You Can't Out Earn Bad Financial Behaviors

Summary

The Ramsey Show – Episode Summary

Episode Title: You Can't Out Earn Bad Financial Behaviors
Air Date: June 4, 2026
Hosts: Dave Ramsey & Jade Warshaw

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Brief Overview

In this episode, Dave Ramsey and Jade Warshaw tackle the core theme: You can't out-earn bad financial behaviors. They field a variety of live caller questions about crushing debt, budgeting, family inheritances, real estate woes, and whether certain financial choices are wise. Throughout, Dave and Jade drive home the importance of addressing root financial behaviors, practicing extreme intentionality, and never relying on higher income or windfalls to mask unproductive money habits.

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Key Discussion Points & Insights

1. You Can't Out-Earn Bad Behavior

• Multiple callers who make above-average incomes still deal with crushing debt or out-of-control spending.
• Dave and Jade reinforce: Budgeting, discipline, and behavior change are foundational – not just more cash flow.

“You make a fine income. It's a great income. You guys probably feel like you make a great income and you've given yourself the excuse to be sloppy because you think that you can out earn bad financial choices and it always comes back to bite you in the butt.”
— Jade Warshaw (13:38)

2. Getting Radical to Break the Cycle

• For those feeling stuck, Dave and Jade prescribe "radical" lifestyle changes:
  • Sell unnecessary items (even cars)
  • Take on extra jobs or side hustles
  • Adopt a "beans and rice" budget
  • Cut up all credit cards (plastic surgery party!)
  • Work as a unified team with your spouse

“Nothing changes until something changes... You're going to have to get radical to break this cycle. Beans and rice. Rice and beans. You're not going on vacation because you're broke people and broke people aren't going on vacation...”
— Dave Ramsey (06:26)

3. Debt Questions: Balance Transfers, Credit Cards, Car Loans

• Caller asks if it's smart to pay off a 0% balance transfer card first.

  • Dave and Jade: Focus on the smallest balance first – not on interest rate.
  • “Interest rates are not your problem. Cash flow is your problem.” — Dave Ramsey (08:13)

• Paying off car loans and closing credit card accounts

  • Don’t keep credit cards “just in case.” They’re a temptation and not part of a debt-free plan.

• Paying off car loans early can mean millions saved/invested over decades.

“It's a 3 million, 3.2 million dollar car. I hope you like it...”
— Dave Ramsey (69:40)

4. Dealing with Irregular Income

• For a caller receiving large biannual bonuses, Dave outlines:
  • Set aside a portion of each bonus for monthly cash flow in a separate account.
  • Budget as if you only have the guaranteed monthly base.
  • EveryDollar app recommended for structure and accountability.

(Timestamps: 15:02-18:31)

5. Family & Inheritance Dilemmas

• Callers managing, inheriting, or in conflict over family real estate and estates:
  • Only take on ownership or financial responsibility if legally entitled
  • Don’t take on a property or business to “help” unless compensated and clear in writing.
  • Estate and inheritance plans must be communicated openly before someone passes, to prevent family drama.

“If he really wanted it [the house] to, he should have put it in a trust before he died.”
— Dave Ramsey (89:29)

6. Education, Student Loans, and “Experiences”

• Caller asks about borrowing to study abroad. Dave is blunt:
  • Don’t mistake a “European vacation” for a career investment.
  • Don’t borrow money for an experience versus true career value.
• Jade shares: If you can cash flow it, the travel may be worthwhile for personal development, but never go into debt for it.

“There are very few things that you study abroad that add value to your resume equivalent to what they cost. Like, nothing.”
— Dave Ramsey (58:02)

7. Budgeting with a Spouse Who Won’t Commit

• Spouses need a shared “why” behind their debt-free journey, not just number crunching.
• Lay out what kind of life you both envision and backward-plan from there.

8. Miscellaneous Rapid-Fire Topics

• Should you buy a car extended warranty? “Really bad. Horrible. Only 12% covers repairs; the rest is commission/profit.” (85:16)
• Family travel with different values: Don’t defend your choices—just set your plan/boundaries and politely decline to deviate.
• Feeling stuck in a house you don’t love? “You didn’t get married. You bought real estate. Just sell it.” (126:19)

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Notable Quotes & Moments with Timestamps

• Radical change prescription:
  [06:26] “Get on an every dollar budget and we're going to get so fired up and wired up because I'm sick and tired of being sick and tired... you will not get out of debt doing what you're doing because what you're doing is running like a rat in a wheel getting no traction.”
  — Dave Ramsey

• Behavior, not income, is the root:
  [12:08] “You treated the symptom, not the problem. The symptom is credit card debt. The problem is you spend more than you make.”
  — Dave Ramsey

• Unified spousal intensity:
  [08:26] “The number one thing on your checklist, TJ, is tonight you sit down with your wife. You need to make sure you both have this equal level of intensity on what it's going to take to get out of this.”
  — Jade Warshaw

• On stepping up for family real estate: [102:00] “You're assuming that you're gonna end up with this... You've got a lot of assumptions.”
  — Jade Warshaw

• On student loans for 'life experience':
  [58:02] “There are very few things that you study abroad that add value to your resume equivalent to what they cost. Like, nothing.”
  — Dave Ramsey

• On handling mistakes:
  [127:44] “It was an experiment. I found something that didn’t work.”
  — Jade Warshaw

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Key Caller Case Studies (with Timestamps)

Kansas City Family Stuck Paycheck-to-Paycheck (01:02—08:47)

• Income below national average, large debts
• Main advice: Drastically cut spending, get extra jobs, spouse consider part-time work, stop “normal” financial habits, use debt snowball.

High-Earner Still Broke (11:13—14:33)

• Earns $200k but backslides with undisciplined budgeting; shifted credit card debt onto a home equity loan.
• Dave: Budget is non-negotiable; bonuses need to be allocated for monthly stability.

Young Worker Considering Managing Family Portfolio (98:09—106:13)

• Wants to manage $5M worth of family property but isn’t an owner yet.
• Dave: Don’t work for free or on assumptions; get compensation details and property centralization in writing.

Should We Sell the House We Just Bought? (124:58—127:46)

• Bought country home, immediately dislike rural life.
• Straightforward: Sell both current and rental houses, buy where they actually want to live.

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Timestamps for Major Segments

| Segment | Timestamps | |--------------------------------|--------------------| | Kansas City Debt Case | 01:02—08:47 | | $200K Earner's Budget Woes | 10:55—18:31 | | Inheritance and Estate Conflicts| 21:52—29:18; 87:40—95:46 | | Study Abroad Loan Debate | 54:00—61:45 | | Spousal Money Philosophy Clash | 66:52—71:48 | | Career Stagnation & Trades | 72:39—75:34 | | Real Estate Portfolio Dilemmas | 98:09—106:13 | | Should I Sell My New House? | 124:56—127:46 |

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Recurring Ramsey-isms

• “Beans and Rice. Rice and Beans.” (On extreme frugality)
• “If you live like no one else, later you can live and give like no one else.”
• “Stupid tax.” (Describing the financial lessons learned from mistakes)
• “Plastic surgery party.” (Cutting up credit cards as a symbolic act)

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Conclusion

This episode is packed with tough love on how intentionality and radical behavioral shifts—not income, not inheritance, not "magic tools"—are what move families toward financial peace and wealth. Dave and Jade's advice is practical, uncompromising, and rooted in the belief that freedom from debt and chaos comes from changing one’s habits, not waiting for more money or a stroke of luck.

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For budgeting tools and free resources, Dave and Jade recommend the EveryDollar app and stress the vital importance of budgeting for every dollar—before the month begins.

Learn more at RamseySolutions.com.

Transcript

[Dave Ramsey]

This is an ad for BetterHelp. Stress from money problems doesn't just stay in your bank account. It shows up everywhere in your life. Talking to someone can help you sort it out. Go to betterhelp.com Ramsey to get 10% off. 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 Fair Winds credit union studio, this is the Ramsey show. I'm Dave Ramsey, your host. Thank you for joining us, America. We're so glad you're here. Jade Washall Ramsey, personality number one best selling author is my co host today. We're glad you're here. Open phones at 888-825-5225. TJ starts us off in Kansas City. Hi, TJ what's up?

[Caller 1 (TJ from Kansas City)]

Hey guys.

[Caller 2 (TJ's spouse or related caller)]

Glad you have me on today. I'm doing good.

[Dave Ramsey]

Well, we're honored to have you. How can we help?

[Caller 2 (TJ's spouse or related caller)]

So just in kind of a position where my family's living paycheck to paycheck kind of thing and we tried all kinds of stuff. We've gone through financial advisors and coaches at our banks and all that and we're just hitting a wall where we, we just feel stuck and know that some patterns or behaviors somewhere have to change.

[Jade Warshaw Ramsey]

So when you looked at that with the various coaches, did you find that there was a spending problem or did you find that there was an income problem?

[Caller 2 (TJ's spouse or related caller)]

What I heard most was it looks like you need to generate more income. That's what I heard. But we never could, you know, what is your income? So I, I gross around 69,000 a year.

[Jade Warshaw Ramsey]

Okay. And what do you take home monthly?

[Caller 2 (TJ's spouse or related caller)]

Monthly I net around 5,026, I think. Something like that.

[Jade Warshaw Ramsey]

Okay, what about your wife?

[Caller 2 (TJ's spouse or related caller)]

My wife doesn't have an income. She's, she homeschools her kids and takes her motherly responsibilities pretty seriously.

[Jade Warshaw Ramsey]

Okay, how old are the kids?

[Caller 2 (TJ's spouse or related caller)]

9, 11 and 5.

[Jade Warshaw Ramsey]

Okay. I agree. You probably are facing an income issue. You're below the national average there. And so you are going to feel that I'm assuming there's debt involved as well.

[Caller 2 (TJ's spouse or related caller)]

Correct? Yeah. You know, those, that's definitely the, the biggest hurdle is if we could get out from underneath like one thing, it'd probably give us some wiggle room for other things.

[Jade Warshaw Ramsey]

Absolutely. You'd feel that snowball effect. So tell us about the debt that you.

[Caller 2 (TJ's spouse or related caller)]

We do, I say own loosely, but we do own our house through mortgage. We have a couple of different credit cards, A vehicle loan and student.

[Dave Ramsey]

How much

[Caller 2 (TJ's spouse or related caller)]

for?

[Jade Warshaw Ramsey]

Tell us the credit cards, tell us the car, and tell us the student loans.

[Caller 2 (TJ's spouse or related caller)]

Okay, gotcha. So the student loans are only mine and they total about 62,000. The mortgage, the remaining balance is 200,500.

[Jade Warshaw Ramsey]

Okay.

[Caller 2 (TJ's spouse or related caller)]

The vehicle loan is about 19,000.

[Jade Warshaw Ramsey]

Okay.

[Caller 2 (TJ's spouse or related caller)]

And both credit cards are around about eight and a half thousand each.

[Jade Warshaw Ramsey]

Okay, so 16,000.

[Dave Ramsey]

You guys are normal, but normal. But normal sucks, correct? Yeah. I mean you got like the kind of same kind of debt most people have. Car debt, credit card debts. A student loan that's been around so long, I think it's a pet. How long y' all been married?

[Caller 2 (TJ's spouse or related caller)]

12 years this August.

[Dave Ramsey]

So the student loans, 14 years old.

[Caller 2 (TJ's spouse or related caller)]

I graduated in 2012 with those and

[Dave Ramsey]

so I'll be 14 years old.

[Jade Warshaw Ramsey]

Are you using that degree, T.J.

[Caller 2 (TJ's spouse or related caller)]

not directly. Everybody wants to have on, but so I actually work for an antique store that specializes in antique books and firearms. Very high collectibles.

[Dave Ramsey]

What do you do? Just retail clerk there?

[Caller 2 (TJ's spouse or related caller)]

Kind of sort of. I'm the shipping coordinator. I also do a lot of the research for the individual items and things like that.

[Jade Warshaw Ramsey]

What's your degree?

[Caller 2 (TJ's spouse or related caller)]

I graduated from a Bible college with a youth and family degree. A youth and family ministry degree.

[Dave Ramsey]

Okay, so the part about you using your degree is you're not, which is okay, but you're not at all.

[Caller 2 (TJ's spouse or related caller)]

I'm using it in that it's a placeholder on a, on a resume.

[Dave Ramsey]

Yeah.

[Jade Warshaw Ramsey]

The reason I asked is because I do agree with what everyone else has said, which is you do need to get your income up. Because when you get your income up, you're going to have more margin available to you and then you'll be able to use that margin, which is extra money after everything is minimum payments and everything else is satisfied. That extra margin is what you use to pay off your debt using the debt snowball. And you are absolutely right. If you listed these out from smallest to largest. So in this case, One of the $8,000 credit cards would be first. If you freed up one of those credit card bills, that's a little bit more margin that now you're adding to your life. A little bit more room to breathe that allows you to pay off then the $8,000 credit card. You see how this works? So I, I, I agree with you. So the question is, how can we add more income? I'm there's you who can go out and get some temporary side hustles. Right. I think that you've got something tells Me, you've got some extra hours in the day that you could do that. Not ideal, but you've got the time. And then I'm also looking over at your wife, who's got some margin for time. She's homeschooling. And I do want to call this out. That's a personal choice. That's a values choice. But as she's homeschooling, it's also meaning that she's not adding a paycheck to the mix. And that's a choice that you guys are making. So everything, if I'm looking at your situation, suddenly everything is on the table.

[Dave Ramsey]

Yeah. And we can say, here's the thing. Nothing changes until something changes. So Jade's exactly right. And what the people that you've been with before have not told you, and we're going to be brave enough because we love you. To tell you the truth is you're going to have to get radical to break this cycle. Beans and rice. Rice and beans. You're not going to see the inside of a restaurant unless you're working there as your extra job. You're not going on vacation because you're broke people and broke people aren't going on vacation. You're going to get this stinking car paid off or you're going to sell it. She's going to pick up a side hustle. You're going to pick up a side hustle. You guys are going to sell so much stuff. The kids think they're next. We are going on a mission to clean these debts up. Tonight you're going to get both credit cards out and look at them together with a candle lit and have a ceremony, a plastic surgery party and chop those stupid butt things up. And we're going to get on an every dollar budget and we're going to get so fired up and wired up because I'm sick and tired of being sick and tired. When you get that going, you'll get out of debt, but you will not get out of debt doing what you're doing because what you're doing is running like a rat in a wheel getting no traction.

[Caller 2 (TJ's spouse or related caller)]

I do. I have two very specific, nuanced questions that I think could at least like me a bit better of passing.

[Jade Warshaw Ramsey]

Yeah.

[Caller 2 (TJ's spouse or related caller)]

One, the first one regarding the credit cards. I did recently do a balance transfer from one card to another. Regardless of how we feel about balance transfers, that specific card has a 0% interest rate until October of 2026. Am I better off paying towards the 0% interest rate?

[Jade Warshaw Ramsey]

It's your Smallest debt anyway. It's your smallest debt anyway, so it honestly doesn't matter.

[Dave Ramsey]

I don't care. I don't care. I don't care about. Interest rates are not your problem. Cash flows your problem.

[Caller 2 (TJ's spouse or related caller)]

Okay?

[Dave Ramsey]

You need rid of the debt so you don't have payments.

[Jade Warshaw Ramsey]

The number one, when you don't have

[Dave Ramsey]

payments, you're going to have margin. That's what Jade's been saying.

[Jade Warshaw Ramsey]

The number one thing on your checklist, tj, is tonight you sit down with your wife. You need to make sure you both have this equal level of intensity on what it's going to take to get out of this. And the two of you are going to brainstorm what you. What are you going to do with your extra time to make money? And what am I going to do with my extra time to make money? And you don't stop the conversation until two of you. The two of you have lists of jobs that you'll be applying for in the morning.

[Dave Ramsey]

Now, and 10 years from now, what are you going to be doing? That's not a clerk in an antique store where you make 169, not 69. Listen, identity theft doesn't just happen just because you're careless. You can do everything right and still become a victim. Whether your information is skimmed online, stolen through a scam, or exposed in a data breach, which happens every day, then it becomes your problem. Your time, your money, your paperwork galore. That's why I've told people for years to have identity theft protection. And the only plan I've ever recommended is from Zander Insurance. Zander monitors for signs of fraud, even home title fraud. And they send alerts when something looks off. Most important, if something happens, you're not stuck spending hours on hold, filing forms and arguing with companies trying to fix it. Zander's dedicated restoration team steps in and does the hard work to help restore your identity. You can even protect your kids for free on their family plan. Go to Xander.com or call 800-356-4282 to protect yourself today. Identity theft is everywhere. Xander is how you fight back. Xander.com. Carl is in New York City. Hi, Carl. What's up? Well, if I push the button, we could talk to you, Carl. I'm sorry. Let's try again. What's up, Carl?

[Caller 1 (TJ from Kansas City)]

I'm making about $200,000 a year, and I'm having a real hard time budgeting. I was in trouble with credit card debt, which I have since put a band aid on it. But I'm looking for a Tool to be able to move forward so I don't fall back into that credit card debt.

[Jade Warshaw Ramsey]

Okay, when you say you're struggling to budget $200,000, what do you mean exactly? Tell us exactly what you mean by that.

[Caller 1 (TJ from Kansas City)]

You know, I just feel like my day to day puts me a bit upside down and then I wind up leaning on credit cards, just not disciplined enough, so to speak. And I feel that a budget and putting, putting certain monies aside specifically for the mortgage and, and you know, groceries and day to day things would help me save more and be able to become a little bit more independent or not, you know, so upside down. I mentioned I had $27,000 in credit card debt and I went ahead and took a second mortgage because it was a lot better than 30%.

[Caller 3 (Carl from New York City)]

Right.

[Caller 1 (TJ from Kansas City)]

So I have an 8% loan now on my second mortgage. Still have decent equity in my home.

[Dave Ramsey]

But you're still doing the same position now.

[Caller 1 (TJ from Kansas City)]

Yeah.

[Dave Ramsey]

It's going to get worse every time you do this. You treated the symptom, not the problem. The symptom is credit card debt. The problem is you spend more than you make.

[Caller 1 (TJ from Kansas City)]

Exactly.

[Dave Ramsey]

So why do you spend more than you make? What's it going to?

[Caller 1 (TJ from Kansas City)]

Well, historically it went to just necessities as I call. I mean, maybe living outside of our budget, spending too much on dinners, going out drinking, buying stuff for the house, cars, motorcycles. I mean that list can go on and on, but I feel like I have a better handle on that now. I'm not doing that anymore.

[Jade Warshaw Ramsey]

Because you're using a budget?

[Caller 1 (TJ from Kansas City)]

Well, yeah, yeah, I had a budget, but it kind of fell apart. I don't have a budget currently, but I want to put one in place.

[Dave Ramsey]

So how much that do you guys have? Carl, not counting your house,

[Caller 1 (TJ from Kansas City)]

I am happy to say nothing.

[Jade Warshaw Ramsey]

What about the. Well, the 27,000 that you rolled into the second mortgage. And there's nothing beyond that?

[Dave Ramsey]

No car debt?

[Caller 3 (Carl from New York City)]

That's correct.

[Dave Ramsey]

No, no student loan.

[Caller 1 (TJ from Kansas City)]

That's all bundled in.

[Caller 4 (Gabby from Gainesville, Florida)]

So what student loan?

[Dave Ramsey]

How much is your house payment?

[Caller 1 (TJ from Kansas City)]

20. It'll be $2,800. Now with the home equity, it was 20.

[Dave Ramsey]

Okay, so if I take 200,000 minus 2800amonth, there's a lot left over.

[Caller 3 (Carl from New York City)]

Yes, I agree.

[Jade Warshaw Ramsey]

You want to know? I know where it's all going. And you're not the first one to fall victim to this. You make a fine income. It's a great income. You guys probably feel like you make a great income and you've given yourself the excuse to be sloppy because you think that you can out earn bad financial choices and it always comes back to bite you in the butt. And that's what's happened to you. So I think what's happened is it's not a budget problem. It is a I, it's a self control problem. Right? Because you put those items, those line items, you say, I'm only spending $500 on going out to eat or I'm only spending $1,000 on groceries. And the self control problem comes when you start to butt up against that line item amount. And then you say, you know what, I'm just going to do it anyway. Right? Yes, I know I've overspent. I'm just going to do it anyway. And so that's a, that's a personal problem. It's not a budget problem.

[Caller 1 (TJ from Kansas City)]

I don't disagree.

[Dave Ramsey]

You know, I don't disagree.

[Caller 1 (TJ from Kansas City)]

There's one, yeah, there's one more pivot to the, to the equation. Yes, I make 200. However, I have $100,000 base. The other hundred thousand comes in two payments throughout the year in a bonus check.

[Jade Warshaw Ramsey]

Okay?

[Caller 1 (TJ from Kansas City)]

So it's that ebb and flow. So every six months, yeah, sure, I get the lion's share, but throughout the other months is where I get myself in trouble. And I feel that a proper budgeting tool would help me become more disciplined. And that's what I'm having.

[Dave Ramsey]

So let's pretend for a second that let's just make up a number. Okay, we're gonna put you on everydollar, the world's best budgeting tool that we've developed because we're the best at this. And you and your wife are gonna sit down and give every dollar an assignment before the month begins. Now if we could pan back a little bit. You're gonna have to walk into this carefully. And I don't know exactly how you're gonna walk into it, but here's a plan. Let's pretend that out of the next budget, out of the next bonus, which is half of your income, and that's a strain. That's where the strain is coming from. That's a good, that's a good point of information, by the way. Thank you for telling us that. So let's pretend that you need $124,000, which is approximately, let's say 120,000, $10,000 a month minus taxes. So I need $10,000 a month to operate, but I've only got 8,000 because I only got 100. 8,300 because I only got 100 coming in. You follow me?

[Caller 5 (Seth from Boca Raton)]

Yes.

[Dave Ramsey]

So out of the next bonus check, I set aside $20,000 to subsidize my monthly baseline. Follow me.

[Caller 3 (Carl from New York City)]

Gotcha.

[Dave Ramsey]

Okay.

[Caller 5 (Seth from Boca Raton)]

Yeah.

[Caller 3 (Carl from New York City)]

I'm writing it down.

[Dave Ramsey]

And so. Or you can set aside if you want to make it even. $24,000. That'd be $2,000 a month. So out of my next bonus check, I set 24,000 into a separate savings account. Each month, I move $2,000 over, plus I have my 100 to work with, and I set my budget on that. And then anything else in the budget, anything else in that bonus can go to reduce these debts and to build wealth and to buy things. If we were gonna go on a trip, we'd take it out of a bonus check after we pulled. Okay. If we were gonna go buy a couch, we'd take it out of the bonus check in cash if after we pulled our 24 out. You know what I'm saying? So, yes, you know, you got a $50,000 bonus check twice a year. We're gonna pull 24 out at least once a year, or maybe 12 out of each one. Okay. And then that gives me some other amount of money out of that bonus. And you already need to have it also allocated before it comes. Every dollar needs to be spent on paper and be in agreement with your spouse before it comes into your house. And then stick to the plan the two of you wrote down, and you pinky swear and spit shake and make a contract.

[Caller 5 (Seth from Boca Raton)]

So there's no magic tool.

[Caller 1 (TJ from Kansas City)]

This is just something I can build myself.

[Dave Ramsey]

I'm gonna give you the everydollar budget. That's the tool. Cause it's a system that'll show you how to work the Ramsey process. But what I just designed for you is a customized version. But to deal with your volatile income, because you probably can't live on 100, right? By the time you pay your house payment, your groceries, if you can, well, then you got another hundred to throw at stuff as it comes in. Right. Which will clean up all these debts real quick. I mean, a hundred thousand to clean up almost every debt but your house. Well, no, you only have them. You don't have anything. Knock the second mortgage out, the first bonus check, Right?

[Caller 3 (Carl from New York City)]

Right.

[Dave Ramsey]

And no more credit cards. Cut them up.

[Jade Warshaw Ramsey]

Did you cut them up?

[Dave Ramsey]

You cut them up and use a debit card. We do not spend money we do not have.

[Jade Warshaw Ramsey]

No, you got to cut them up. You got to take them out of the wallet and cut them up.

[Dave Ramsey]

They have to die. The accounts need to be closed Debit cards. Only the debit card will do everything the credit card will do except get you into debt.

[Jade Warshaw Ramsey]

And also something cool happens when you cut them up. You don't have anything to fall back on. So you have to manage your money. You have to do it the correct way. Otherwise when you run out, you run out and there's nothing else you can spend on. So that's good. Yeah, every dollar is going to help you. It's going to be great.

[Dave Ramsey]

Yeah, hang on. We'll have Christian pick up, we'll put you in the premium version, we'll pay for it and get you started. It's a free app, people, that you can download, but the upgrade version has it automatic downloads from your debit card usage from your bank. And so it keeps everything up, keeps everything current automatically for you. It's very powerful tool and it actually has built into it all of the Ramsey system, the baby steps, and shows you everything you need to do. And you know, when you lay it out and the first time you do it, you're gonna sit down, you're gonna, you're gonna say, where's all my money been gone? Because there's 3,000 bucks. I can't, I can't. I don't know where it's been going. Yeah, everyone has that happen. You feel like you got a raise when you do a budget because the disorganization and the chaos, the impulse spending, the lack of self control, the inability to say no, because I make a lot of money, all that kind of. That was a really good insight. Yeah.

[Jade Warshaw Ramsey]

But stick with it. Don't just do this one time in the first month. If you're in the red, quit. Stick with it. It takes most people 90 days to start locking in and really get the feel for it. So stick with it. Don't quit after one month.

[Caller 3 (Carl from New York City)]

Sam,

[Dave Ramsey]

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[Caller 5 (Seth from Boca Raton)]

I'm wonderful. Thank you for taking the call. It's great to speak with you both. So, Dave, before I ask you my money question and your specific advice, I'll give you the quick family dynamic in my specific financial vitals. So I'm 52 years old. I'm single, no kids, no debt. I've been in debt. I went bankrupt 20 years ago. Fortunately, I'm in a lot better place. I make between 1,500 to $2,000 a week in cash. I work in the restaurant business, so it varies. I own my car. It's just me and my doggie. I have $60,000 cash in the bank, so I'm doing okay. The bad news is I retirement. So the good news is that my father, who I decided to move to Florida a couple years ago when I realized my father's health was declining with Alzheimer's dementia. I have an older brother. So the family dynamic is myself and my older brother, we never got along very well growing up and most of our adult life. But now with regards to my dad's health, it's actually helped bring our relationship much stronger. And it's a blessing. And it's a blessing. It's a blessing for me as an adult son to be able to move to Florida to make sure my dad is okay. We moved him into a retirement or I should say in assisted living and now in memory care. Fortunately, my father was always wonderful with money in terms of saving. My mom was a spender. Unfortunately, my mom passed and then so did my dad's second wife. So my dad is 84. As I mentioned, he has a long term health care policy which is paying for his assisted living. So really he, you know, we don't need to spend any money really a month to take care of his needs. My dad's estate, we had a conversation. My brother and I was with his financial advisor. My dad's estate is worth just under $5 million. He's got about 900, 800 ish in

[Caller 3 (Carl from New York City)]

an IRA and then he has two

[Caller 5 (Seth from Boca Raton)]

accounts with Morgan Stanley. What we learned is that of that

[Dave Ramsey]

Morgan Stanley account, we kind of hit

[Caller 5 (Seth from Boca Raton)]

the stock lottery, Dave. My dad had a stock that he purchased for $22 a share, 1,000 shares. And it's now trading at over $1,000 a share. So we have about a million dollar position on one stock. I think I know your answer, but I'm asking your advice. Do we sell off some of the stock into a mutual fund? You know, how do we do it? What's the best strategy? And just kind of the question is, ultimately my brother and I want to make sure that his estate is safe, which will then thankfully take care of my retirement as well as my brother and his family's.

[Dave Ramsey]

So. Yes. You said $22,000 invested in what turned into a million dollars.

[Caller 3 (Carl from New York City)]

That's correct.

[Caller 5 (Seth from Boca Raton)]

Yep. He has a $22 cost basis. Yep. And we know that if we sold it, then there's, you know, long term gain. There's long term gain. But then, you know, if we keep it and then he passes away, we then get step up basis, so on and so forth. But I know that 25% of his net income.

[Dave Ramsey]

What you've got to weigh out is the risk of a single stock is substantial because whatever that company does, so does the million dollars. Right. If that owner comes out and decides he's going to be in the Epstein files and the stock goes the guy, the CEO, and the stock goes in half, then you lost a half million dollars.

[Caller 1 (TJ from Kansas City)]

Okay?

[Dave Ramsey]

That's because you got it in one thing. That's the risk. Okay? The. If you decide I don't want the risk, you're going to have $150,000 in capital gains tax. He's going to have 150,000 in capital gains tax. Y' all are managing it for him. Okay. And as you said, that's on the one hand. On the other hand, if we leave it alone, we don't have any taxes, but we have the risk. And he passes away, there'll be no taxes on it. So it's $150,000 decision. So I'm going to weigh $150,000 in taxes against the risk that this particular company is going to somehow tank before this elderly, fragile man passes away. You sure?

[Caller 1 (TJ from Kansas City)]

I'm saying my brother had.

[Caller 5 (Seth from Boca Raton)]

Yeah, well, we wouldn't sell the full position.

[Caller 1 (TJ from Kansas City)]

The thought on our call on Monday

[Caller 5 (Seth from Boca Raton)]

was to maybe sell off like 20, 25%. So we're talking about a much smaller tax bill of, you know, 30 or 40,000 on a $200,000.

[Dave Ramsey]

So. So the answer is this. Let's just be inappropriately callous, okay? Can I. Can I just be mean a minute? It sounds mean because I'm talking about your dad. Okay, but as long as he passes away, company does something wrong, then you would not have wanted to move it. So the sooner he passes Away versus the risk, the less you would want to do that. And so I'm gauging his health and his situation mathematically, sadly, against whether we begin to move some of this away. And that's what you do. So who is the company? Is it Apple?

[Caller 1 (TJ from Kansas City)]

No, it's Micron.

[Dave Ramsey]

Interesting.

[Caller 1 (TJ from Kansas City)]

Micron.

[Caller 5 (Seth from Boca Raton)]

Micron is up 900 in, in one calendar year.

[Dave Ramsey]

Yeah.

[Caller 5 (Seth from Boca Raton)]

If you look at, I'm sure you're probably familiar with them, they're, you know, they do the AI chip and, and it's, it's, it's literally like, I call it a stock lottery.

[Dave Ramsey]

So, yeah, that's a very, that's a very volatile, volatile position.

[Caller 3 (Carl from New York City)]

Yeah. So do you see?

[Caller 5 (Seth from Boca Raton)]

So do you think, do you think selling off 20 of that and then putting that couple hundred thousand in a mutual fund, is it safer, kind of lowers our position in little bit.

[Dave Ramsey]

Is that a smart decision or. Yes, I probably would say I'm going to sell off 20% every year until he passes. Yeah, that's kind of what my brother

[Caller 5 (Seth from Boca Raton)]

and I were talking. Are there different strategies, Dave, that are beneficial, like in terms of when we do decide to sell? Like I heard something about a covered call or is that just.

[Dave Ramsey]

No, I wouldn't get into all that. I would just say I'm weighing the stepped up basis against the risk of a highly volatile tech AI company. This is not a steady. I mean, they're not a bad company. I'm not trashing them. But this is a sudden leap up, which also is more accustomed to a sudden leap down. If this was something boring, like Apple would be much more boring. Agreed?

[Caller 2 (TJ's spouse or related caller)]

Yeah, sure.

[Dave Ramsey]

Apple. So that's at the stock price you're mentioning. That's kind of what I thought it was, but anyway. But that one's been more of a steady thing where, you know, AI and microchip is just like suddenly on the scene and suddenly off the scene and suddenly it won't matter and suddenly nobody will care. Nobody worth zero. I, yeah, that scares me.

[Caller 5 (Seth from Boca Raton)]

So I kind of thought that on a separate subject, my dad happens to be a plaintiff in a class action lawsuit. His second wife passed and there's a class action lawsuit that he. And if my dad was to pass before we got litigation, because currently we're in litigation, we're basically waiting to see what the offer is in terms of our specific case with my dad's second wife. In your experience, would that still, if

[Dave Ramsey]

the plaintiff passes, meaning my dad does

[Caller 5 (Seth from Boca Raton)]

that then, and then there's a judgment rendered, would that then go to my dad's estate, which is basically the trust

[Dave Ramsey]

that my brother and I have.

[Caller 5 (Seth from Boca Raton)]

Or does that lawsuit go away? Just curious on that. So I had you on the phone and thank you again so much.

[Dave Ramsey]

I'm not a legal expert. I think it'll go to the estate. But I would ask an attorney to get a real opinion about that. My opinion is probably worth what you paid for it there, but I think it is. So let's recap because we were talking gobbledygook there for a minute. When someone has paid $22,000 for a stock that's worth a million dollars, if you transfer it, if you cash it out, obviously before you die, you pay taxes on the difference, the gain. If instead it passes to your heirs, they pay taxes on the difference in market value and whatever they sell it for. And if you sell it within six months of death, it is presumed to be market value by the irs. So zero taxes on a million dollar gain at death or taxes on everything over 22,000 on a million bucks. So basically a million dollar gain is $150,000 swing in taxes. If these two brothers receive this money with the stepped up basis to market value, they have no taxes upon dad's death. But if the stupid thing goes in half before then, you'll wish you had paid some taxes. And that's kind of what he's weighing out and what we were weighing out with him. But yeah, it comes down to how much faith do you have in that particular company to stay stable and how much faith do you have in, sadly, Dad's health? I mean, that's being very callous, but that's the mathematical analysis. And then you've got to cry a little bit and have your heart in that and say out loud, this is an awkward discussion, weird to talk about, but it's weird for me to sit down with my whole family and go over my estate plan once a year.

[Caller 3 (Carl from New York City)]

Year.

[Dave Ramsey]

If I die. Wait a minute, Pipel. I'm still sitting here. But if I die this year, this is what it's going to happen. The if Dave dies this year meeting. It's very awkward.

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[Jade Warshaw Ramsey]

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[Dave Ramsey]

Gabby is in Gainesville, Florida. Hi, Gabby. How are you? Well, I'll keep doing that. Gabby, how are you?

[Caller 4 (Gabby from Gainesville, Florida)]

I'm doing well. How are you, Dave and Jade?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller 6 (Sophia and other female callers)]

Alrighty.

[Caller 4 (Gabby from Gainesville, Florida)]

So my husband and I just got married in January. And since before we got married, we were starting on the baby steps because we both had student loan debt and a bit of credit card debt. However, my husband owns our house with his mother in law. With his mother, my mother in law, because they bought the house after he graduated college as an investment for him and she plans on moving the ownership to myself within the next month or two. But she also plans on refinancing the house. But to do so, it's tied with my husband's credit score. And one of our biggest debt sums is his credit card. So she's been pressuring us to make sure we pay that down. But since we've been following the baby steps, we've been going with our smallest debts first. So basically my question is, should we focus on paying down his credit card so that we can refinance the house or should we stick to the.

[Dave Ramsey]

So how much is on the credit card?

[Caller 4 (Gabby from Gainesville, Florida)]

It's about 12,000.

[Dave Ramsey]

Okay. And how much is the other debts?

[Caller 4 (Gabby from Gainesville, Florida)]

So my student loans are about 14, his student loans are 12. My credit card is 8. And his credit card is 12.

[Dave Ramsey]

Yeah. You already gave. That's the one you already gave me, right? Yes, sir. Okay. All right. So they're all fairly close.

[Caller 4 (Gabby from Gainesville, Florida)]

Yes.

[Dave Ramsey]

And your. And your household income now is What?

[Caller 4 (Gabby from Gainesville, Florida)]

It's about 100K.

[Dave Ramsey]

Okay.

[Jade Warshaw Ramsey]

When you do the refi, what's the interest rate moving to?

[Caller 4 (Gabby from Gainesville, Florida)]

So they've been waiting for the interest rates to drop. Right now it's at 7%, but they're hoping for at least 5, 4%.

[Jade Warshaw Ramsey]

What's it currently? I'm saying currently.

[Dave Ramsey]

It's currently 7.

[Caller 4 (Gabby from Gainesville, Florida)]

Yes.

[Dave Ramsey]

Yeah. Because the market rate right now is about five. Right. You need to talk to Churchill Mortgage about your refinance. Okay. And get a 15 year fixed rate, because you should be somewhere in that 5% range in the marketplace right now. And that's a wonderful savings as well.

[Jade Warshaw Ramsey]

That would be great.

[Dave Ramsey]

So let me say something. As preventative medicine, that's not. The answer is yes. Pay down the credit card, because they're all fairly similar. And this accomplishes a bigger goal. And it's not because she's pressuring, it's because she's offering. So I don't understand how we got here with him and his mom owning the house together. That's not bothering me as much. And what I want to make sure you hear is this lady is. We get all the calls that this went the other way. Like she's being hard to get along with and she doesn't want to help you get out of it, and she wants to stay on it. And you think you have to own this house with your mother in law forever. And that's the call we usually get. This lady is very healthy in saying, I want to put it into my new daughter in law's name as fast as I can. That is the right mother in law answer. You have a peach of a mother in law. She's awesome.

[Caller 4 (Gabby from Gainesville, Florida)]

Oh, I definitely do. It's just been a little bit stressful because we actually recently found out that we're also pregnant.

[Jade Warshaw Ramsey]

Oh, wow.

[Dave Ramsey]

That's so awesome. That is so awesome. Very cool. Well, now she's gonna be super nice. I love it. Hey, good for you. Yeah. I want to give her some props because she wins the mother in law of the year award on this show. Most of the time, the mother in law in this situation is a test pilot for a broom factory. And so this one is really doing a good job. So I want to help her. I want you to appreciate her and to help her. And because she's really just handing you the keys to this thing, y' all gotta just get the paperwork transferred, right?

[Caller 6 (Sophia and other female callers)]

Mm.

[Dave Ramsey]

This is so cool.

[Jade Warshaw Ramsey]

There's no other money involved.

[Dave Ramsey]

That's so cool. Yeah, we just gotta get the refinance, get her name off the loan.

[Jade Warshaw Ramsey]

That's it.

[Dave Ramsey]

And then she deeds it over to him and to the new daughter in law. That is awesome. And that only costs 12,000 bucks. We make 100. I want y' all to work extra. I want you to sell stuff Any wedding gifts that go back that you had duplicates of, turn them into cash and throw them on the credit card. Chop up all credit cards, get on an every dollar budget. We're gonna give it to you as a wedding, the premium version, and get you signed up. The two of you sit down and just wear that thing out. You're going to come up with 12 grand in, like, three months. It's going to be gone.

[Caller 4 (Gabby from Gainesville, Florida)]

Yeah, that would be great.

[Dave Ramsey]

Yeah.

[Caller 4 (Gabby from Gainesville, Florida)]

Just one more side point, because I'm pregnant, and we recently found this out, so we haven't hit all the bills yet. How do we attack the baby steps moving forward? Do we set aside parts of. We've been paying off debt, at least $1,500 a month since we started in January.

[Dave Ramsey]

I want to get you. I want to get that credit card gone, and then I want you to stop paying off debt.

[Caller 4 (Gabby from Gainesville, Florida)]

Okay.

[Dave Ramsey]

I want you to stack cash until the baby comes.

[Caller 6 (Sophia and other female callers)]

Okay.

[Dave Ramsey]

It sounds like you've listened to us before. We call it stork mode. Yeah. So while you're in stork mode until baby comes, we stack cash and we don't use the cash. We're not building on a nursery. We're using the cash to pay off debt after you come home and the baby's okay and you're okay after you come home from the hospital. But this is just an extra little pad while we're pregnant. But before that, the first three months right here of your first three, your first trimester, we're knocking out that debt before we do go to stork mode because I got to get this house transferred.

[Jade Warshaw Ramsey]

Yeah. And that's where the side hustling has to come in. Otherwise the math won't work. If you're using that $1,500 margin to pay off $12,000. And that's it.

[Dave Ramsey]

No, we got to get to get to 3,000 or 4,000.

[Jade Warshaw Ramsey]

Exactly.

[Dave Ramsey]

And we're going to squeeze this budget down super tight. We're going to work extra. And again, I'm selling everything in sight. I really am. Because if you can get this house transferred and be rid of this one thing, and then you stack cash till baby comes, you're going to be in a really peaceful situation.

[Jade Warshaw Ramsey]

Yeah. Margin's got to double.

[Dave Ramsey]

Yeah. That's for a short period of time. I want you all to go cray cray and knock this out. If you live like no one else, later, you get to live and give like no one else. Janice in Norfolk, Virginia. Hi, Janice. What's up?

[Caller 6 (Sophia and other female callers)]

Hi. Thank you so much for speaking with me last night. My mother gifted me $53,000 and I am just wondering if I should put that toward my mortgage which is currently $215,000 at the 2.5 interest rate or. My concern is that, that all my parents life they have been financially frugal but they have not saved. They inherited quite a bit of money from a family member who passed and since then have been a little bit less conservative with their money. So I'm worried that as they get older I do know that they are currently spending more money per month than what they bring in with.

[Dave Ramsey]

How much money did they inherit?

[Caller 6 (Sophia and other female callers)]

Over a million.

[Dave Ramsey]

And that's why 53,000. Where'd that number come from?

[Caller 6 (Sophia and other female callers)]

It was a family thing. One person got that amount and to be fair I also got that amount. I don't need the money. But the other person apparently.

[Dave Ramsey]

Let me, let me help you. She's going to get hammered with gift tax unless she's got some estate planning going on.

[Caller 6 (Sophia and other female callers)]

Well that is also part of my concern when I was looking up if

[Dave Ramsey]

you individual can give an individual 19,000 before you get into gift tax of 55% they don't know anything about any of this and they just write checks.

[Caller 6 (Sophia and other female callers)]

Well, this is the largest check that I have received.

[Dave Ramsey]

Are you married?

[Caller 6 (Sophia and other female callers)]

No.

[Dave Ramsey]

Okay, well they can each give you 19 so that'd be 38. But everything above that unless they file some paperwork called a unified estate tax credit and use up some of their estate exemption which they can do pretty easily, they're going to get hammered with gift tax. You can't just hand out money unless it's a 501. Unless it's a properly done non profit and you're not. So mom and dad need to get some tax advice and quit being ignorant. They're about to get their butts kicked in an audit really bad because they didn't have learn what they were doing. So I don't care out of a million if they gave you a 53, they gave somebody else 53. They're probably okay. I'd put it on my mortgage. I wouldn't worry about the gift. I just worry about mom and dad getting hammered.

[Caller 6 (Sophia and other female callers)]

Have less than 500,000. I'm sorry, it's not. They don't have a million anymore. They have less than five.

[Jade Warshaw Ramsey]

You're worried that they're going to come knocking on your door when they blow through all this money and now they're going to be.

[Caller 6 (Sophia and other female callers)]

No, I don't think they would do that because they they would not ask me for that, but I feel, you know, compelled more.

[Dave Ramsey]

If your house is, if your house is paid off because you use this to accelerate the payoff, then when they are in trouble someday you'll be in a better position to to help them. So I'd put it on the house.

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[Dave Ramsey]

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[Dave Ramsey]

100, Brentwood, TN 37027. Welcome back to the Ramsey show in the Fairwinds Credit Union Studios. Jade Washall Ramsey personality number one best selling author is my co host Ricky is in Riverside, California. Hi Ricky, how are you?

[Caller 3 (Carl from New York City)]

I'm doing well. Just a little nervous but happy to be on talking to you guys.

[Dave Ramsey]

You too. What's up?

[Caller 3 (Carl from New York City)]

I have a pretty stressful situation that my wife and I are going through. I've been animating and games making pretty decent money for the past four years and I've recently lost that job about a month ago and now just doing the budget over the weekend it showed that we were short about $3,000 this month just with the mortgage and all of our bills and just groceries and all that. So I've been trying to figure out what, what is the best path and the only thing that I can think of is possibly selling our house. But I've listened to you guys in the past and I'm not sure if like our situation warrants that or if there's anything else that I can do but just incredibly stressed.

[Dave Ramsey]

Not bad. I'm sorry that's scary. So you were an animator, did you say?

[Caller 5 (Seth from Boca Raton)]

Yes.

[Caller 3 (Carl from New York City)]

Yeah.

[Dave Ramsey]

And you were making what?

[Caller 3 (Carl from New York City)]

I was. On average, it was 120 to 150. Recently. Most recently, I was making 130. I just got a job at Home Depot.

[Caller 6 (Sophia and other female callers)]

Good.

[Caller 3 (Carl from New York City)]

About six weeks ago and.

[Caller 2 (TJ's spouse or related caller)]

Sorry.

[Caller 3 (Carl from New York City)]

I'm sorry. I'm making 21 an hour, so I think that's like 40, 40K. So I just. I don't know if I should.

[Dave Ramsey]

Yeah. Is your wife working outside the home, sir?

[Caller 3 (Carl from New York City)]

Yes, she works for the state of California. She makes about her take home pay is 4,000. It would be higher, but they automatically deduct her retirement.

[Dave Ramsey]

And what does she do there?

[Caller 3 (Carl from New York City)]

Health insurance. She licensed. She checked the licenses for foster care facilities. So.

[Dave Ramsey]

Okay. And what. Why did the animation job go away?

[Caller 3 (Carl from New York City)]

It's just been. The industry's been really rough. The one that I just had was just a contract position after a layoff that I had last year. So this was the contract from September to the end of April. And right around the new year, I've been applying, reaching out to old co workers, anybody that I can, recruiters on LinkedIn, anyone. Anyone that had any sort of connection. I've had interviews. I had an interview recently at Apple, just found out I didn't get it yesterday and interview the other game studios. I get close and then it's usually that final interview where I just don't seem to get it. So I just. I haven't been able to line up another animation job.

[Dave Ramsey]

But it sounds like there is jobs out there in this industry that the industry isn't dying. You just hadn't landed after your last contract. You haven't landed the new gig is

[Caller 3 (Carl from New York City)]

all, in my opinion. I think it's dying. During the pandemic, it was doing really well because everybody was stuck home gaming. So gaming studios overhyped, things leveled back out and games aren't doing nearly as well. So there's.

[Dave Ramsey]

Is gaming what you were doing before?

[Caller 3 (Carl from New York City)]

Yeah, I've been doing game animation.

[Dave Ramsey]

How is AI affecting animation?

[Caller 3 (Carl from New York City)]

I think it's. I think it is starting to affect it to a degree. I think like, just like commercials are starting to use AI more, which that takes Jobs away from animators. I don't think it's really affected games yet unless. I just don't know.

[Caller 5 (Seth from Boca Raton)]

But it's.

[Caller 3 (Carl from New York City)]

It's affecting like movies and TV and advertising for sure.

[Dave Ramsey]

Okay, all right. But you're bringing in $3,000 a month and she's bringing in four, and you're still three short.

[Caller 3 (Carl from New York City)]

Yeah.

[Dave Ramsey]

How much debt do you have? Not counting your house?

[Caller 3 (Carl from New York City)]

Not counting the house. I did the math. It was about 160.

[Dave Ramsey]

On what?

[Caller 3 (Carl from New York City)]

My student loans were 55,000. My wife's are 20,000. We do have a car for 40,000 and just a couple of, like, personal loans, like one for 17,000, another one for 10, another for 5. We owe 10,000 to the IRS from taxes, not getting enough taken out of checks.

[Dave Ramsey]

Okay. All right. So the levers to pull are before I'd sell the house, I'd sell the car, and I'd sell it tomorrow and get out of a $40,000 car, get into a $5,000 car, and I would let the student loan put the student loans on hardship deferral temporarily, trying to get cash flow going here. And then you need. But if you're gonna pay something, you pay food first, lights and water second, house third, and cars and car, gasoline fourth, to get to work. So food, shelter, transportation and utilities before you do anything, before those cards are loans, student loans, or anything else gets paid. Okay. But yeah, I'd get rid of the car immediately. And then I would set a, you know, pick up another second job to go with this one.

[Jade Warshaw Ramsey]

Yeah, I was going to say and

[Dave Ramsey]

fill in the blank here because you're not working 40 at Home Depot.

[Jade Warshaw Ramsey]

And can your wife pick up a side hustle as well, maybe?

[Caller 3 (Carl from New York City)]

My wife, they. On Monday, I had breakdown at work, so they actually converted me to full time on the spot, which was super nice. But I'm working 40 hours now.

[Dave Ramsey]

That's all, though. I mean, you can work another 30.

[Caller 3 (Carl from New York City)]

Yeah, I can.

[Dave Ramsey]

Yeah. I'm not, I'm not. This is not a permanent solution. I'm trying to keep the water in the lake while we get a new position as an animator. Okay. And then what I would do. So let's pretend that you constrain and work 60, 70 hours, and she can work 60, 70 hours. We sell the car, we're on beans and rice. Rice and beans. We having a garage sale. We got so much stuff on Craigslist. The children think they're next. You know, we're really, really dumping stuff out of here. And we can barely hold on. That's what I want to get to. And I think you can get there.

[Jade Warshaw Ramsey]

I think you can get there, but

[Dave Ramsey]

that's a temporary thing. And then I would say if I don't land an animator's job and get my income back up to get us back to where we can breathe again within X number of months, then we're gonna Sell the house. And so like three months, four months.

[Caller 3 (Carl from New York City)]

Okay?

[Dave Ramsey]

You can't sustain the thing I'm talking about for six years.

[Jade Warshaw Ramsey]

No, this is a short term.

[Dave Ramsey]

So we're saying, you know, we're gonna give this until after Christmas, we're gonna give this until Thanksgiving. But, you know, if we're thinking about selling a house, we would wanna sell it after the first of the year. So if you could hang on for six months doing this, and if you haven't landed the animator job in six months, then yeah, you probably do need to do something different. You need to adjust your career.

[Caller 3 (Carl from New York City)]

Okay.

[Dave Ramsey]

The other thing I would advise you, and I am not an AI expert by any stretch of the imagination, although Ramsey is spending a lot of time on it here. The people inside this building are. It is not the answer to everything. It is artificial, it is not real. But it is affecting disrupting some of these industries. Industries. And if I'm in your shoes, I'm going to learn what it's doing to my industry and I'm going to start learning how to use it instead of it putting me out of business.

[Caller 3 (Carl from New York City)]

Foreign.

[Advertisement Voice]

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[Dave Ramsey]

Sophia is in Maine. Hi Sophia, how are you?

[Caller 6 (Sophia and other female callers)]

Hi. I'm good.

[Caller 2 (TJ's spouse or related caller)]

How are you doing?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller 6 (Sophia and other female callers)]

So I'm going into my junior year in college and I want to study abroad next semester. Well, next spring in 2027. But it's a good chunk of money and so I would probably have to take a loan out for it. So I'm wondering if it's a good idea to do that.

[Dave Ramsey]

Should I take out a loan to go on a European vacation?

[Caller 6 (Sophia and other female callers)]

Well,

[Dave Ramsey]

that's what studying abroad is, Sophia.

[Caller 6 (Sophia and other female callers)]

Yes, I know.

[Jade Warshaw Ramsey]

How much does it cost to study abroad?

[Caller 6 (Sophia and other female callers)]

So including literally everything, tuition, home and board, and even like spending money, they estimated it around 18 to 20,000.

[Jade Warshaw Ramsey]

Okay, 18 to 20,000. Do you have any sort of job or any work that you're doing right now?

[Caller 6 (Sophia and other female callers)]

Yeah, I made about, I, I go to school full time, but I made about $25,000 last year.

[Jade Warshaw Ramsey]

Okay.

[Caller 6 (Sophia and other female callers)]

I think around that.

[Jade Warshaw Ramsey]

Are there scholarships for this?

[Caller 6 (Sophia and other female callers)]

Yeah, so all of my scholarships for my home university will transfer. So I, I'll get about like 8,000 covered. And then my own personal savings, I don't have to pay until October. And so I'm planning on saving like everything until then. So I think I'll be able to get like a good, probably another 8,000 on that.

[Jade Warshaw Ramsey]

Okay, so we're getting close.

[Dave Ramsey]

Yeah, we're getting close. But you are spending every single dime you can scrape up on a European vacation while you're a broke college student.

[Caller 6 (Sophia and other female callers)]

Well, I mean, I don't, I mean,

[Dave Ramsey]

this has absolutely no economic or marketplace value, honey. Zero.

[Jade Warshaw Ramsey]

What are you studying?

[Dave Ramsey]

You're not going to come home and go, oh, every employer in Maine is going to line up to hire me because I studied abroad for one semester. Zero chance. Yeah, this is a fun vacation thing to do.

[Jade Warshaw Ramsey]

How old are you?

[Caller 3 (Carl from New York City)]

You?

[Caller 6 (Sophia and other female callers)]

I'm 19.

[Dave Ramsey]

Yeah, I, I, you know, I don't agree with it. If your parents are rich, that's fine. But I would not tell a 19 year old person that I love to spend their very last dime to go on vacation.

[Jade Warshaw Ramsey]

How are your other semesters being paid for? Obviously you've got the $8,000 scholarship. How are your other semesters at home being covered?

[Caller 6 (Sophia and other female callers)]

I go to college for free, so I don't have, I don't have any student loans at all.

[Jade Warshaw Ramsey]

I will say this, and this is Jade's opinion. I traveled right out of college for work. I was getting paid to travel. So that is a big differentiator. But I think traveling is one of the best things that you can do for yourself. It's a different type of education. I personally think that if you can cash flow this, I wouldn't stop you from doing it. But Dave, dad has told us something else.

[Dave Ramsey]

Jade and I can Disagree and both be right.

[Jade Warshaw Ramsey]

We can. That's okay.

[Dave Ramsey]

Yeah, we can disagree and both be right. That's all right.

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

Yeah. So I look at. Here's the problem, okay? If you qualify this as a vacation and you say, I'm going to spend all of my year saving up to go on vacation because I value travel like Jade is talking about, and you want to do it there, and you put that in that slot, that bucket in your brain, I'll back off a little bit and not yell at Jay.

[Advertisement Voice]

Okay?

[Jade Warshaw Ramsey]

$12,000 for vacation.

[Dave Ramsey]

Yeah.

[Jade Warshaw Ramsey]

That's what you're saying.

[Dave Ramsey]

A little bit. But the problem I've got is when people call this education.

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

Because there's very few things that you study abroad that add value to your resume equivalent to what they cost. Like, nothing.

[Jade Warshaw Ramsey]

Would you factor in school of life, life experience, being able to see cultures outside the United States?

[Dave Ramsey]

That's a vacation.

[Jade Warshaw Ramsey]

Yeah, but there's education to that.

[Dave Ramsey]

That's not. You can't call. This. Education is for the purpose of furthering your career. It's not.

[Jade Warshaw Ramsey]

That is a type of education.

[Dave Ramsey]

Well, it should be. And especially when you start talking about borrowing on it. We're not going to do that.

[Jade Warshaw Ramsey]

No, we're certainly. Yes.

[Dave Ramsey]

Hear me say, if you have to borrow, don't go. Yes, period. We're in agreement on that.

[Jade Warshaw Ramsey]

Yes, we. 100% are.

[Dave Ramsey]

You know, here. I'll just. I'll just come clean. All right? We have plenty of money at the Ramsey's, and Rachel, she wanted to study abroad. She decides she's going to study Spanish in Spain for one semester. She did?

[Jade Warshaw Ramsey]

Oh, really?

[Dave Ramsey]

Yep. I paid for it, okay? We had the money.

[Jade Warshaw Ramsey]

Are you mad because she speaks Spanish to this day?

[Dave Ramsey]

Zero strain. The girl cannot call the dog in Spanish. I'm just saying, a key. It's just absolutely. I mean, loco pedo. She can't even get there. I mean, it's just not a chance. Unlo Pedro. It's just no chance she can get there. See, I speak more Spanish than she does. She went over there and had a great time. She knows how to say classic Rachel style. Wherever Rachel is, Rachel has a great time. Right? But it was absolutely freaking useless.

[Jade Warshaw Ramsey]

Oh, man. Okay?

[Dave Ramsey]

And I look back and I go, I got. Got complete as the dad. I got scammed.

[Jade Warshaw Ramsey]

You got swindled.

[Dave Ramsey]

Because they told me this was education.

[Jade Warshaw Ramsey]

You got bittersweet.

[Dave Ramsey]

And what it was was a Spanish party in Barcelona.

[Jade Warshaw Ramsey]

Okay, understood.

[Dave Ramsey]

So I'm bitter.

[Jade Warshaw Ramsey]

You're bitter.

[Dave Ramsey]

I'm bitter. You're bamboo.

[Caller 7 (David from Denver)]

That's the problem.

[Dave Ramsey]

And so you walked into bitterness. That's the problem. No, all kidding aside, don't call it education, because it really isn't. I mean, even if you're studying, if you're going to go to London and study banking, that's okay. It does not add enough feathers in your cap for your future job to justify the expense. No, the ROI is not there.

[Jade Warshaw Ramsey]

It's an experience.

[Dave Ramsey]

It's a vacation. It's an experience. I'll tell you, there might be one exception.

[Jade Warshaw Ramsey]

What's that?

[Dave Ramsey]

Art.

[Jade Warshaw Ramsey]

Oh, okay.

[Dave Ramsey]

If you were going to study. If you're studying fine art and you were going to spend time with the great masters in Italy.

[Jade Warshaw Ramsey]

Yeah. Okay.

[Dave Ramsey]

That might actually add value to your resume. Enough to help you with some of the big houses in New York.

[Jade Warshaw Ramsey]

Okay.

[Dave Ramsey]

So, Sophia Godot, you've actually stood in front of Michelangelo. I mean, you've stood in. You haven't just studied it in a book, you know, or on a slideshow. So that might, that might. You know, if you can spend time in Venice and see the light. Differences that are real, and I'm not an artist, but they're real, then that might. There's something nuanced like that you might get your money back. But most of. Most of this stuff is just bullcrap.

[Jade Warshaw Ramsey]

I would say there's not a. There's likely not a career roi, but you can expand your life. Yeah. Your knowledge of different cultures.

[Dave Ramsey]

I mean, there's some versions of going and getting a degree that are that. But. But we've now told people that, you know, you can spend $200,000 having this, this degree that is well rounded. And you're a barista and you're not well rounded. You're. Well, you're the best rounded barista I know. Know.

[Jade Warshaw Ramsey]

Correct.

[Dave Ramsey]

Most insightful on several subjects. No, thank you. That's not a way to build a child's life. It's not a way to coach a 19 year old because this is how we end up with a student loan crisis. And Sophia called about a student loan.

[Jade Warshaw Ramsey]

Yeah. The fact that you were going to take a. A loan for this was bananas. I will say that.

[Dave Ramsey]

Yeah. It's a fun discussion.

[Jade Warshaw Ramsey]

It is a fun discussion. Hey, I learned something new, Rachel.

[Dave Ramsey]

Go on vacation, you get thrown under the bus, kiddo. I'm just saying, just feel the bus tracks. Bloom.

[Caller 3 (Carl from New York City)]

Bloom.

[Jade Warshaw Ramsey]

Well, you're talking to somebody who's been to 92 countries. So. I love travel.

[Dave Ramsey]

Me too.

[Jade Warshaw Ramsey]

Now, like I said, the difference. I got paid to travel. I got paid to Go to all these places. That's very different.

[Dave Ramsey]

Well, you're working cruise ships.

[Jade Warshaw Ramsey]

Yeah.

[Caller 2 (TJ's spouse or related caller)]

What do you want?

[Dave Ramsey]

Yeah, I mean, that's a different. That's a completely different thing than my college is taking me and I am going to study.

[Jade Warshaw Ramsey]

Yeah, that's. It's just an experience. It's a trip. It's a fun thing that you could do.

[Dave Ramsey]

It's a party. Yeah, yeah. It's beer pong overseas.

[Jade Warshaw Ramsey]

Oh, boy. I can say this with. I never played one game of beer pong my entire college.

[Dave Ramsey]

You didn't? Well, it was. They didn't. They hadn't invented it when I was there. I would have been champion.

[Jade Warshaw Ramsey]

You would have been the champion. Oh, boy. Bourbon pong.

[Dave Ramsey]

That's why we. Oh, there we go. Go. There we go. Whole new game. Oh, guys, you have to be careful with education. It is. It is an irony in America that we're stupid about education. Let that settle in.

[Caller 3 (Carl from New York City)]

Sam,

[Jade Warshaw Ramsey]

If you've worked hard to keep your car running, the last thing you want is stress when you're running the kids all over to summer activities or loading up the family for a well earned vacation. That's why I trust Christian Brothers Automotive. Listen, most people don't worry about their car just because it's older. They worry because they don't feel confident about what's happening under the hood or who's working on it. And that kind of uncertainty can turn a simple trip into a stressful one. Real fast. Fast. But Christian Brothers is different. They use digital vehicle inspections so you can see what your technician sees, know what needs attention now and what can wait, and make decisions without the pressure. That's how you protect your time, your money, and your travel plans. And Christian Brothers stands behind their work with the nice difference warranty. Three years or 36,000 miles, whichever benefits you more. So before your next trip. Trip, take care of the car that's taking care of you. Go to cbac.comramsey to schedule your service and get 10% off your visit. That's cbac.comramsey 10% off, up to a $250 value. See stores for details.

[Dave Ramsey]

You're getting ready to hit the road this summer. You want to feel confident your car is ready to go. But when you don't fully understand what's going on under the hood, it's easier to either ignore something important or spend money you didn't need to. Because let's be honest. Honest, you're not a mechanic and you shouldn't have to be. That's why we trust Christian Brothers Automotive, the official auto repair partner of the Ramsey Show. They bring clarity to car repairs and maintenance with their digital vehicle inspections. You can actually see what your technician sees, understand what needs attention now and what can wait so you can make wise decisions without second guessing. Listen when you're counting on your car to get you where you need to be. You don't want uncertainty, you want confidence. And Christian Brothers stands behind their work with the nice difference warranty three years or 36,000 miles, whichever benefits you more. Go to cbac.comramsey to schedule your service and get 10% off your visit. That's cbac.comramsey 10% off up to a $250 value. See store FOR D details. Our question of the day is brought to you by why Refi? When people get buried under private student loans that they can't keep up with, they might think there's no way out. Well, why Refi helps borrowers explore solutions with fixed rate refinancing and a payment plan that's tailored to their situation. Go to y refi.com/ramsey that's the letter y the letter R, the letter E, the letter F The letter y y refi.com/Ramsey might not be in all states

[Jade Warshaw Ramsey]

okay, today's question comes from Shelby in New Jersey. She says says my husband and I are both 35 years old and we recently combined our finances and did our first budget together. I paid off close. I paid off and closed my credit card. He stopped using his credit card but wants to keep it just in case. Together we earn over $175,000 a year. Our own debt, our only debt is 25000 on a car loan. We have the cash today to pay it off, but my husband will not agree to pay it off any faster than just the monthly payment. We pay a $400 per month. I want to be debt free but I want us to agree to commit to this way of managing money. How can I best go about this? So it sounds like your husband is living. He doesn't want to leave his comfort zone, right? Him closing up his credit card, that's uncomfortable for him because he likes it to fall back on just in case. And also yeah, paying off car early, paying more than just the minimum payment. That sounds like it's setting him outside of his comfort zone. If I do these things, I'm going to have to change something about my life. I'm going to have to pull back on something and it sounds like he's not interested in that. And you're Right. That is a problem. The best thing that you can do about this is to share a deeper reason why not just for the moment and not just so we can be debt free, those just so that we can be debt free. Feels great, but there's a deeper why behind that. And I would challenge you to put words to what that is, what it means for your family tree, what it means for your marriage, what it means for your personal piece. And that is what I would share with him first and foremost, before we even start talking about the numbers. And then I would challenge him to share what his vision is for the family.

[Caller 6 (Sophia and other female callers)]

Family.

[Jade Warshaw Ramsey]

And what his whys are. That way all the cards are laid out on the table and you can actually have a conversation about the vision for your family. And then now we can start plugging in. How do we get there together?

[Dave Ramsey]

Yeah, you're exactly right. If we pan back and we say, is our goal to keep a car payment the rest of our lives?

[Jade Warshaw Ramsey]

Sure hope not.

[Dave Ramsey]

Well, if you do that, then let's go on Ramsey Solutions and pull up the calculator.

[Jade Warshaw Ramsey]

Yeah.

[Dave Ramsey]

And put in 400amonth from age 35 to age 65 in a decent growth stock mutual fund. That's going to be several million dollars.

[Jade Warshaw Ramsey]

Oh, yeah, it is.

[Dave Ramsey]

Hope you like the car.

[Jade Warshaw Ramsey]

Terrible. Yeah.

[Dave Ramsey]

It's a 3 million, 3.2 million dollar car. I hope you like it. And yeah. So the only way that anything he is saying makes sense is in the next 30 days, in the next 30 months or 30 years. It does not make sense. What'd it come out?

[Jade Warshaw Ramsey]

1.2 million.

[Dave Ramsey]

Yeah.

[Jade Warshaw Ramsey]

Unbelievable.

[Dave Ramsey]

Yeah. So which makes the 400. I want to keep a $400 car payment statement. Asinine. That's like saying I want to be middle class instead of be a millionaire on purpose because I really like car payments. Well, what a dumb butt thing to say.

[Jade Warshaw Ramsey]

Yeah.

[Dave Ramsey]

I mean, seriously, that's just dumb. So, you know, but you got to pan back and make sure that he grasps that instead of going, well, I think I'll just pay it out slowly. Well, what are the implications of that? $1.2 million. Hello. So that's just dumb. And so you pan back and you start going, look, the people that build wealth and the kind of life that I envision us living don't have car payments. The people that I envision us living, like, don't have credit cards. They are living on debit cards and they pay cash for things. They don't have any debt. And they use what used to be all those debt Payments to build wealth with. If you live like no one else and later you can get out debt, build wealth and live like no one else. Well, I want us to go somewhere with this. Not always keep a car payment. You're always going to have a car payment. Might as well have a good car.

[Jade Warshaw Ramsey]

But that's what you're saying is so important, which is why you have to go beneath the numbers. Because when you're married, most people do some version of what they saw growing up or what they see the people around them doing. So if he grew up from a family where they had car payments the entire time time and it seemed like everything was okay, look at how the

[Dave Ramsey]

family turned out, right? Broke and living on social insecurity, working at McDonald's or a Walmart greeter at 74.

[Jade Warshaw Ramsey]

But if he hasn't seen that fallout yet, because he will. But if he hasn't seen that yet and so far everything seems okay in his mind, what's the big deal? And then if you came from a family where we did, we paid cash for things and we paid things off and you understood the implications of debt. Those are two different backgrounds working together. And that's the emotional side of money that you do have to have conversations about. You have to understand where the other person is coming from in order to then shift the conversation in the way

[Dave Ramsey]

that there's no long term scenario that his Idea works in.

[Jade Warshaw Ramsey]

No.

[Dave Ramsey]

00. The only idea, the only thing scenario he works in is in the. In the immediate. In the next 90 days. It feels good to not have to have $25,000 in the bank and not have $25,000 car. But there's no 10 year period of time that you look at that and go, oh, that was really smart. It just does not occur. So when you pan back and you extend vision to this. You said vision earlier and you add vision to the discussion, you say, I wanna talk about where this takes us. Not what we're doing this month, but where does this philosophy take us? Into the land of Brook. That's where it takes me. And I want to go to the land of millionaire. That's a different land. There are more flowers there. Hello. Caesar is in Denver. Hey Caesar, what's up?

[Caller 1 (TJ from Kansas City)]

Hey, Ramsey. How are you guys?

[Dave Ramsey]

Better than we deserve. How can we help?

[Caller 1 (TJ from Kansas City)]

Hey, so I'm 21 and I have

[Caller 3 (Carl from New York City)]

a pretty good paying job, but I

[Caller 1 (TJ from Kansas City)]

feel like I've hit my pace ceiling at 21 age.

[Caller 3 (Carl from New York City)]

And Mike, you already maxed out in

[Dave Ramsey]

your industry or just at what is your industry? That you maxed out at 21.

[Caller 3 (Carl from New York City)]

Diesel mechanic, what are you making?

[Caller 1 (TJ from Kansas City)]

I'm making $42 an hour.

[Dave Ramsey]

You ain't maxed out. There's Diesel mechanics making 120 out there, bro.

[Caller 3 (Carl from New York City)]

Working for themselves or other people.

[Dave Ramsey]

Yeah,

[Caller 1 (TJ from Kansas City)]

yeah, yeah.

[Caller 3 (Carl from New York City)]

And I don't, I don't know whether it's time to go on on my own.

[Caller 1 (TJ from Kansas City)]

I've done out on my own.

[Dave Ramsey]

And no, I don't necessarily think it's time to go out on your own. But I think the particular line of diesels that you're working on in the particular industry that you're working on is not paying as much as some of the others are paying. Do it, do it. I mean, Mike Rowe and I were having this discussion the other day. Diesel mechanics are doing much better than a lot of log years.

[Caller 1 (TJ from Kansas City)]

Yeah, yeah.

[Dave Ramsey]

And I feel like at 21 I'm

[Caller 1 (TJ from Kansas City)]

making decent money within.

[Dave Ramsey]

Like you're doing great for 21 years old. 42 bucks is no slouch. But you're, you're not, you're not, you know, you can make six figures in your world, dude. Now you might have to be running a mobile truck. You might have to be out there on the road a little bit. You might have to, you might have to go get some certifications on some engines that you're not, that you don't know yet. You know, I don't know what you're working on on and what the guys making 120 are working on. But I was just talking to Mike about this the other day and he was saying that this is one of the. And there's a shortage in your world too by the way. There's not enough guys and gals that know how to do it.

[Jade Warshaw Ramsey]

Just a quick search tells me the highest paid diesel mechanics often work in specialized fleet maintenance, field service roles, overtime, power generation. But if you do those things, you can make upwards of 120 plus.

[Dave Ramsey]

Yeah. And that was Google in 30 seconds.

[Caller 3 (Carl from New York City)]

Yes.

[Dave Ramsey]

Right. Or ChatGPT or whatever you did. It was not like a detailed piece of research she just did. But that confirms what Mike was talking about. So yeah, you might be maxed out. So what I would tell you to do is move in one of those other more specialized situations, power plant situation, something like that, get your income up, get some more experience and then talk about opening up your own thing somehow and running your own thing. People that own their own businesses generally, if they do a good job running the business, make more than the people that work for them.

[Jade Warshaw Ramsey]

Yep.

[Dave Ramsey]

Doing the diesel mechanics Absolutely. So there you go,

[Caller 3 (Carl from New York City)]

Sam.

[Dave Ramsey]

Running a business is hard work. You're the CEO, the accountant and the sales team. You don't have time to moonlight as your own benefits department. That's where Health Trust Financial helps. In fact, health insurance is one of the biggest and most confusing line items in your budget. And most of you are overpaying because you're stuck figuring it out alone. You don't have time to figure out all the fine print about networks and deductibles. My friends at Health Trust Financial have been helping Ramsey listeners for over 20 years. Their focus is simplifying health insurance and serving people with empathy. No pressure, no games. They give you clear, unbiased advice that fits your life and your budget. Most of their clients save hundreds of dollars. Every real money you can put back in your business or into the baby steps. So stop wasting your time, your energy and your money. You run the business. Let Health Trust Financial handle finding the right health insurance. Go to healthtrustfinancial.com today. That's healthtrustfinancial.com. The right insurance acts as a shield around your loved ones and your wallet. If destroyed, disaster strikes. It's defense offense is investing. Our free insurance coverage checkup helps you figure out if you've got the right coverage or if you got some of the stuff that's just ripoff. And it gives you a personalized action plan with clear next steps. Where are you overpaying? Here's something to shop. Ramseysolutions.com checkup it's free. Take the coverage checkup. Ramseysolutions.com check checkup Susan's in Milwaukee. Hi Susan. How are you?

[Caller 6 (Sophia and other female callers)]

I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller 6 (Sophia and other female callers)]

Yeah. So my question is about how to handle conversations about differing financial values with family members.

[Dave Ramsey]

Like who?

[Caller 6 (Sophia and other female callers)]

Like close family members.

[Jade Warshaw Ramsey]

Mom and dad, Sibling.

[Caller 6 (Sophia and other female callers)]

Siblings.

[Jade Warshaw Ramsey]

Siblings. Tell us the situation. That's where something's coming up and you feel like you need to have a discussion.

[Caller 6 (Sophia and other female callers)]

Yeah, so it's kind of come up a couple different times. So previously it's been about like vacation budgets and we kind of set our budget and you can tell that it's maybe a little lower. Recently it was about a last minute travel plan situation and they didn't feel like they could commit to a date. And I made the mistake of saying like, well, we can't afford to do like a last minute plane ticket because those can be obviously more expensive.

[Jade Warshaw Ramsey]

Sure.

[Caller 6 (Sophia and other female callers)]

And their response was, oh well, we talked about it and we'll just pay the Extra for you and for us? Yes, for me. And it was. It's not. I spoke wrong. It was not that we couldn't afford to. It's that we choose not to.

[Jade Warshaw Ramsey]

Like, you don't want to just turn

[Dave Ramsey]

around and say that. The difference is, listen, I gotta tell you, Dave and Sharon love traveling. We do not get joy out of traveling without a plan or overpaying when

[Jade Warshaw Ramsey]

you don't have to.

[Dave Ramsey]

And so everything is planned out to the nth degree. Even our impulses are planned. And so that's what we get joy from. Other people get joy about just landing somewhere, getting a rental car and figuring it out and that is fun for them. I don't travel with those people. They would drive me bonkers. And there are some of those people I love dearly. But we don't travel alike. And I'm not staying in that place. I'm not sleeping in the back seat because you couldn't get a reservation. I'm not standing outside in the sun for an hour and a half because you can't get in a freaking restaurant. I've had the reservation for four months before I got got there. And so that's the difference. And it's okay. If you want to live free and all that, then do it, you know, But Dave has a plan.

[Jade Warshaw Ramsey]

You're not wrong.

[Dave Ramsey]

And so it's either one's okay. And I just tell people that so. And we have relatives and friends that are in both camps that are plan. Everything's planned out to the nth degree.

[Jade Warshaw Ramsey]

I mean, are they usually like that? Have you found in the past that, hey, we just are yin and yang when it comes to the way we try travel?

[Caller 6 (Sophia and other female callers)]

Yeah, yeah, I mean they're definitely more last minute. They're also just willing to like, oh, it's not a big deal financially.

[Jade Warshaw Ramsey]

Yeah, I think Dave's right. These are not your travel companions. I think it's as simple as that. And it's no shade.

[Dave Ramsey]

It's just going with you. I'm not going with you if it's a fan. If it's a family thing. The way we're going to go is if you plan it, otherwise the family ain't going to be there.

[Jade Warshaw Ramsey]

Yeah, I think that's fair. I think that's totally fair. Because one of the ways costs us more money and we don't want more

[Dave Ramsey]

money the way we function. So you don't have to convert them to your way of thinking, nor do you have to defend your way of thinking. All you have to do is just Say, no, we don't go that way. If we would love to do stuff with you, but here's the terms. We plan it out, out, and we, you know, we. When we stay within our budget, that way it's fun for us. It's not fun for us otherwise. And this is your sibling or his?

[Caller 6 (Sophia and other female callers)]

It's mine.

[Dave Ramsey]

Okay, well, just look at your sister or brother and tell them that. No.

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

And no, you can't pay for it and make it all better because it's still not fun.

[Jade Warshaw Ramsey]

Yeah. And I don't like the way that feels either.

[Dave Ramsey]

No, I don't. I don't. I don't want that. Ick on me. So thank you.

[Caller 6 (Sophia and other female callers)]

That's kind of how it. How it felt is like we're doing well, and it feels like we're now the poor family relation because we're not just willing to throw.

[Jade Warshaw Ramsey]

Well, you don't care what they think, do you?

[Dave Ramsey]

That feeling is on you. That's not on them. You got to just decide that I'm not the poor family relation. I'm the family relation that plans and

[Jade Warshaw Ramsey]

they can think whatever they want.

[Dave Ramsey]

Yeah. Because I know I'm not the poor family relation for sure. And I'm the one that plans. I mean, it's not. I just can't stand it. Drives me nuts. So it's okay if y' all don't want to go. It's okay. But this is how we go. If you're going to roll with. This is how we roll, so. And we roll with the budget. We stick to our budget. That's fun for us. We stick to our plan. That's fun for us. And, you know, if we want to do something a little different, we'll decide on the fly. But 99% of our stuff is detailed. Freaking out. And it's not okay if the details don't execute either, by the way.

[Jade Warshaw Ramsey]

Yeah. And if you, like, here's the thing. If you truly like them enough to travel with them, then you should be able to have this conversation and it be all good when it's all said and done.

[Caller 3 (Carl from New York City)]

Yeah.

[Dave Ramsey]

So, you know, here's another plan. Okay. Like, there's a different kind of situation than yours, but we take our kids and grandkids all for a week after Christmas somewhere warm. And Sharon and I pay for everything. And we have since they got married. That's our gift to them, and that is planned out way in advance. They can speak in into it a little. But it's your plan, generally speaking. We're going to our place you know, and. And this, what we're doing. And I don't mind hearing from Rachel what she thinks she wants to do. But. And that's cool, you know, but. But we're paying for it. And there's no shade on that. That's our gift. And. But those are the terms.

[Jade Warshaw Ramsey]

There's a plan.

[Dave Ramsey]

And, you know, we all agreed. We're going too, by the way.

[Jade Warshaw Ramsey]

Yeah.

[Dave Ramsey]

You don't. You don't come up and go, you know, I don't think I'm going to go there. No, you already told me you're going, and it's already booked.

[Jade Warshaw Ramsey]

Yeah, it's paid for, so.

[Dave Ramsey]

Yeah, you're going. And that. That's. I mean, we don't tell people what to do. We just tell them what to do. You know, it's like. But I mean, it's. But I mean. Yeah, I think what's happening here is there's more than a travel or budget discussion. It's the shade that's being thrown.

[Jade Warshaw Ramsey]

Yeah. And it's making her feel a type of way. It's making her feel like she has to defend herself. And.

[Dave Ramsey]

Yeah, I just take all that off the table. Table and go. This is who we is. Do you want to play with us? This is how. This is the rules of our sandbox.

[Jade Warshaw Ramsey]

I like your usage of shade, Dave. That's. You're doing good.

[Dave Ramsey]

I'm picking that up from you. I got cool kids around me, and the cool kids are teaching me these things. I heard you use it earlier, and I thought I'd just bring it back up and act like I knew what it meant.

[Jade Warshaw Ramsey]

You did good. Context was correct.

[Dave Ramsey]

Boom. Boomer. Boomer usage. There we go.

[Jade Warshaw Ramsey]

Good job.

[Dave Ramsey]

Oh. Oh, man. Eva Lou Ivalu. Ivalu is in Michigan. And I pray God I got that right. Ivalu. Am I close even? You're close. Okay. What's. How's it pronounced?

[Caller 6 (Sophia and other female callers)]

Ivalu.

[Dave Ramsey]

Oh, it is Ivalu. Not a close. I got it. I nailed it. All right, Ivalu, what's up?

[Caller 6 (Sophia and other female callers)]

I want to know if service contracts for car repair do my dealers is a good or bad investment for my car.

[Dave Ramsey]

Really bad. Horrible.

[Caller 6 (Sophia and other female callers)]

So I should. I should just plan on spending the money for the repairs for the next few years.

[Dave Ramsey]

Yep. You want to Hear the numbers? 12% of what you pay covers the repairs. 50% covers the market marketing and the commissions paid to the salesman that sold it to you. And the rest is profit. 12%. So if you paid $10,000, $1,200 worth of repairs is what it covers. On average, these things are unbelievably profitable. And the guys love to sell them because they make almost as much selling that stupid extended warranty as they do the entire car.

[Caller 6 (Sophia and other female callers)]

Okay. They're, they're telling me a seven year bumper to bumper will cost me $2,759.

[Dave Ramsey]

Yeah, well, there's already a warranty on there that's bumper to bumper. They're extending it to seven.

[Caller 6 (Sophia and other female callers)]

No, the warranty is expired.

[Dave Ramsey]

Okay. And how expensive a car is this?

[Caller 6 (Sophia and other female callers)]

I purchased it in, in March of 2025. It's a 2023 Buick Encore. And I paid $22,000 cash for it.

[Dave Ramsey]

Okay. The vast amount of that $2,000 is not going to come out in repairs on average. So if you were going to start an extended warranty company, you would figure out the probability of the car breaking and you would set aside that amount of money on out of a thousand Buicks enclaves, How much is it going to cost me to cover it for seven years? And you're going to figure out it cost me 500 bucks to cover it for seven years on average across 5,000 of them. Okay. And then you would figure out I got to pay the commissions and I got to have a profit. And that's how you run an insurance company. Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm Dave Ramsey. Christina is in New York City. Hi Christina, how are you?

[Caller 1 (TJ from Kansas City)]

Good.

[Caller 6 (Sophia and other female callers)]

How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller 6 (Sophia and other female callers)]

Long story short, my husband's family has a vacation home that is currently owned by my mother in law and a couple years ago we offered to take it over, take care of it, pay for it, deal with the maintenance because that's what my late father in law had wanted. And he had always told my husband that he eventually would inherit this home because they built it together when my husband was five years old. But my sister in law did not agree with this plan and said they did not want this house to go to him, that they wanted it to be split three ways and they wanted my money mother in law to continue paying for it, you know, until she passes away, to like keep it all in a trust together with her other property. But now my mother in law is getting older, you know, maintenance is taking a lot. It's another expense that she doesn't have the money for. And now she's asking us all to split the cost for the house four ways.

[Dave Ramsey]

No.

[Caller 6 (Sophia and other female callers)]

And my wife one yes.

[Dave Ramsey]

No, thank you.

[Caller 6 (Sophia and other female callers)]

And my one, no. Yeah. So. And my one sister in law already said that she's not doing it. So our question is, should we split it four ways or at this point, I guess three ways. But we will not own this house eventually. Or should we just look for our own house?

[Dave Ramsey]

You should look for your own house.

[Caller 6 (Sophia and other female callers)]

Okay. That's what we keep on thinking. So we should.

[Dave Ramsey]

This is called a dysfunctional family.

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

Isn't it?

[Caller 6 (Sophia and other female callers)]

Yeah. Yes. And you know, my father in law really wanted it to go to my husband. There were conversations I've had.

[Dave Ramsey]

Doesn't matter. He didn't cause it to happen.

[Caller 6 (Sophia and other female callers)]

I know.

[Dave Ramsey]

If he really wanted it to, he should have put it in a trust before he died.

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

And then the sisters in law could pound sand.

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

Which is what they need to do. They need to pound sand. But I don't think they're going to. Yeah.

[Caller 6 (Sophia and other female callers)]

Yeah. So I guess for her.

[Dave Ramsey]

So I mean there's two sisters, right?

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

And one is already opted out. If the other one opts out, tell your mother in law to deed it to the trust now, to your son, to your husband and then we'll pay the bill. If you'll go ahead and deed it to us now, we'll pay the bill.

[Caller 6 (Sophia and other female callers)]

Yeah. That's what we had said two years ago.

[Dave Ramsey]

I know again though.

[Caller 6 (Sophia and other female callers)]

And. Yeah.

[Jade Warshaw Ramsey]

Why won't she do that?

[Caller 6 (Sophia and other female callers)]

Because my sister in law said no, they don't want that to happen.

[Dave Ramsey]

I know, but they don't want to pay anything either. So mom, since they don't want to pay anything and we're the only ones wanting to pay anything, why don't we do what dad said to do originally and deed the stinking house to me and I'll pay for it. Yeah, but if you're not going to do that, we're not in. So mom, you get to choose. Somebody's going to be disappointed. Disappointed. Let's decide who.

[Caller 6 (Sophia and other female callers)]

Yeah, and if she doesn't do it, then we. I mean this is what. I can let it go.

[Dave Ramsey]

It's just a house. Just let it go now that's her fault. It's her fault.

[Caller 6 (Sophia and other female callers)]

We have three. I know. We have three children as well. What would you do so this doesn't happen to our children?

[Dave Ramsey]

I would raise my children better where they're not brats.

[Caller 6 (Sophia and other female callers)]

But like we are talking about like maybe having like a trust for the house that has like, I don't know, a certain amount of money in it.

[Dave Ramsey]

Yeah, but how about your father? How about father before he dies communicates to his three kids, I built this with my son. I'm leaving it to him. This is what's going to happen. And you two will get other things. But you're not getting this. Instead, he never bothered to communicate. Communicate?

[Caller 6 (Sophia and other female callers)]

Yeah.

[Dave Ramsey]

Yeah. That's what a lot of people do. They wait till they're dead to piss people off. Go ahead and piss people off while you're alive. If somebody's going to be mad, go ahead and do it while you're alive. This is how you do it. There's not an estate plan that works where there's no communication. Everyone should know every detail that involves them. Okay.

[Caller 4 (Gabby from Gainesville, Florida)]

Yeah.

[Dave Ramsey]

So Rachel, Daniel and Denise can tell you what happens with our lake house. We've all decided together while we're up walking, while we're upright. And then they can, and in this case, by the way, they're going to own it together. And then they can decide to buy each other out. They can sell the thing, they can burn it. I don't care what they do. I'll be gone. But it's theirs to decide. And if I'm going to leave it to one other of them or if one of them wants to buy the other two want to buy the other two out, it's not going to make me mad. They do whatever they want to do. I hate the lake. I don't want to go down there anymore. Okay, cool. Y' all work that out. But you know if you clarify it up front and often in your estate plan, you don't have the first reading of the will after death. You have the first reading of the will as soon as the will is completely complete. Does that make sense?

[Caller 6 (Sophia and other female callers)]

Yeah, I guess that's what my. Yeah, that's what my mother in law is trying to do now. But she's not really honoring her husband's wishes.

[Dave Ramsey]

No, what she's trying to do now is offload the expenses without offloading the ownership.

[Caller 6 (Sophia and other female callers)]

Yeah. And that doesn't work.

[Dave Ramsey]

Yeah, I don't want the expenses unless I get the ownership. No, thank you. Thank you.

[Caller 6 (Sophia and other female callers)]

Okay.

[Dave Ramsey]

And so really honestly, what should happen here based on now I'm getting your opinion and you're pissed at your sisters in law and I don't really blame you. So I haven't heard their side, but from what I'm hearing, what I would say is that mom needs to say, hey, I offered you guys a chance to chip in. You don't want to chip in. And so I'm going to step back and I'm going to honor dad's original wish. I'm deeding it to your brother. You'll get other things in the will. And I'm going to go ahead and move it into a trust for your brother now while I'm alive. And he's going to pick up the expenses. From this point forward, you will not be getting the lake house. I'll take care of you and other things, but I'm just letting you two know you had the option and you opted out.

[Caller 6 (Sophia and other female callers)]

Yeah. Sadly, it's only one of them that's opting out.

[Dave Ramsey]

No, but that's okay. Just step. Yeah. You know that's what I would do if I was mother. They don't have a choice. It's hers. She gets to do with it what she wants. If even if the story wasn't what the story was, she could just wake up in the morning and go, I'm giving it to you.

[Jade Warshaw Ramsey]

Yeah, she could. I think the problem with this too is there was information that you knew that the sisters probably never knew. They probably never heard that the lake house was supposed to go to your husband or go to you.

[Caller 6 (Sophia and other female callers)]

I think I kind of knew, but I'm. You know, they don't think father in law was a kind of change.

[Dave Ramsey]

He's dead, but I think he was a wuss.

[Caller 6 (Sophia and other female callers)]

He did like to keep the peace.

[Dave Ramsey]

Yeah, he keep. Well, he didn't keep the peace. What he did was he avoided conflict. There's a difference. You keep the peace. With clarity, avoiding conflict is just cowardice.

[Jade Warshaw Ramsey]

Yeah. And whatever conversations have need to be between the husband, not you, because you're the in law.

[Dave Ramsey]

Yeah, I would not. You don't need to be talking to mom. You don't need to be talking to sisters at all because it's not going to go well. Jade is exactly right. Good advice. Good advice, Jade. Yeah. So your husband should call his mom and say, mom, this is what dad really intended. If we're not going to do that, we're not going to participate. I'm sorry. If you would like to do that though, if you want to go ahead and deed it over, I'll take it off your hands. And you want it to worry about it anymore. And we will have fulfilled dad's original wishes that we all know were there.

[Jade Warshaw Ramsey]

And just there's no time to cover this. But you've got to view inheritance as the cherry on the top of the Sunday. It can't be the thing that you're counting on to break you free.

[Dave Ramsey]

Right? Right.

[Jade Warshaw Ramsey]

You were counting on this as your house.

[Dave Ramsey]

On the other hand, you don't want to be handcuffed to it either. Yeah, I'm going to be in an LLC with my sister who steals money while was yesterday. No thank you.

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[Dave Ramsey]

Buying or selling a home is a big decision and for most people it's the largest asset that you ever transact. So you need an expert in your corner, not someone who got their license three weeks ago and goes to church with you. Real estate agents that are inexperienced are somewhat dangerous or do they get experience? Not on you. So you need people that know what they're doing that do a lot of transactions a year. If you're thinking about buying or selling a pro, somebody that's high octane, high protein and that's not most of them of them, that's just a handful. We vet the top agents in every market and we track all the market trends out there in the real estate world. So Ramsey Trusted will help you find the real estate agent that you want. And if you want to know what's happening with market trends and prices and mortgage rates and other free tools to help you buy or sell with confidence, go to ramseysolutions.com Market Nate is in Phoenix. Hi Nate. How you are?

[Caller 2 (TJ's spouse or related caller)]

Are you good?

[Caller 1 (TJ from Kansas City)]

How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller 2 (TJ's spouse or related caller)]

Yes, sir. So my question, I am a 21 year old recent college graduate. I'm starting out a career in aviation here in Phoenix. But my question more so revolves around a $5 million real estate portfolio that my late grandmother, she passed away a few months ago. She built it up over the past 40 years by being a nurse and having a house cleaning company. And so no one else really. My family at the moment is like willing to kind of manage this portfolio that she built up. It's roughly a dozen houses, apartments, condos, etc. Across four different states. And so I'm kind of looking to take that on. And the challenge being I have a job here in Phoenix and my Siblings and parents have jobs as well. And being that it's spread across all the way from Hawaii to Pennsylvania, we're looking at what is the best way to manage this.

[Jade Warshaw Ramsey]

If you inherited it, why are you. Yeah.

[Caller 2 (TJ's spouse or related caller)]

Oh, so it's, it's in my mom's name, but my parents are nearing retirement age. They don't want to take on any big ventures or basically like, you know, have a huge hassle of managing this. So I basically stepped up and told them I want to take advantage of this opportunity.

[Dave Ramsey]

And why is it an opportunity?

[Jade Warshaw Ramsey]

How will you get. What's your benefit?

[Caller 2 (TJ's spouse or related caller)]

Well, my benefit is, I, I, you know, I've read a lot and seen a lot online how real estate, kid, you know, be beneficial in terms of building.

[Jade Warshaw Ramsey]

What's your, what's your financial benefit to it?

[Dave Ramsey]

You want to be a property manager because you read real estate online?

[Caller 2 (TJ's spouse or related caller)]

No, I wouldn't say, Yeah, I don't want to be like, I want to basically figure out how I can turn these roughly dozen properties and build it into something that's beneficial for our entire family.

[Caller 3 (Carl from New York City)]

Family.

[Jade Warshaw Ramsey]

So you're thinking, I just want to, I want to make this very clear. Are you thinking, hey, if I help this build from 5 million and maybe I, you know, double it or whatever, then when I inherit it, it's going to be even more. Is that what you're thinking? Or are you thinking you can just earn some sort of salary off managing this? Or is it both?

[Caller 2 (TJ's spouse or related caller)]

So, so it's more. So not that I really want a salary. It's really, I almost want to turn it into a family business if that makes more sense.

[Dave Ramsey]

You keep saying family business and yet you don't own any. Anything.

[Caller 2 (TJ's spouse or related caller)]

Yeah, because, I mean, my parents, like I said, my parents own it, but

[Caller 1 (TJ from Kansas City)]

they have kind of like, I have

[Caller 2 (TJ's spouse or related caller)]

talked with them and we've kind of come to agreement where they want me to basically take the lead on it because they're nearing retirement.

[Dave Ramsey]

How are you getting paid for this? That's dumb. They want to hire their 21 year old who had other life goals to now be a property manager is what you're saying. Because you're getting nothing out of this. No, I don't want you to do this. This because you read an article on TikTok and got excited about real estate. No, if they don't, even if you

[Jade Warshaw Ramsey]

don't own it, if they don't, if they don't enjoy property, they can always sell the properties and invest the money.

[Dave Ramsey]

Yeah, you don't own it, nor are anywhere in this discussion. Have you ever owned it? You've never indicated anywhere in this entire time. We ask you four times. Are you going to own it? No, I'm just going to run the family business. Well, then you're just a stinking employer employee.

[Jade Warshaw Ramsey]

And I don't even think they've said that to you, that they're going to pay you money or a certain amount of money to run this. They haven't said that.

[Caller 2 (TJ's spouse or related caller)]

Yeah, well, I guess, like, I mean, following the logical line of progression here, I guess eventually me and my siblings are going to inherit it, so.

[Dave Ramsey]

And your siblings are going to benefit from all your work because you're not.

[Caller 2 (TJ's spouse or related caller)]

Yeah. So you think I should.

[Jade Warshaw Ramsey]

I think you're. I think what's happening is you're operating, Nate, on a set of assumptions, and they are massive assumptions.

[Dave Ramsey]

Yeah.

[Jade Warshaw Ramsey]

You're assuming that you're gonna end up with this. You're gonna end up with this, and that you're gonna have a bigger percentage of this and that there's gonna be a family business. You've got a lot.

[Dave Ramsey]

Let's play this out. Let's play this out. You go in there and you work for a few dollars, enough to support you while you screw with this. And you run this from 5 million to 20 million in 10 years from now, your parents die and your siblings now have 1/3 of 20 million that you built.

[Jade Warshaw Ramsey]

You're gonna be pissed.

[Dave Ramsey]

That is not a good plan.

[Jade Warshaw Ramsey]

Mm.

[Dave Ramsey]

So, yeah.

[Caller 2 (TJ's spouse or related caller)]

So I guess your advice would just be to, like, you know, your mom and dad.

[Jade Warshaw Ramsey]

Yeah.

[Dave Ramsey]

If your mom and dad want to say, in return for managing our property, we will pay you a property management fee, and we will deed these four properties to you now, and then you do with those four properties something good for you. Meanwhile, you manage the others for your siblings future, because your parents aren't going to do anything with them. Now, that would be one thing. Now, the second piece of this is. I heard a couple other things in there. I'm going to change horses on you now that I dropped that on you. But no, don't just go in there and assume you're going to. That this is all going to work out because it's real estate. It's not. Now, then, the other thing is, you said properties scattered from Hawaii to whatever.

[Jade Warshaw Ramsey]

That's another problem.

[Dave Ramsey]

And that is a bad. I mean, and there's only 10 or 12 properties. It's not like you got this huge portfolio. So you guys need to sell off some of this stuff that's stuck out there in the middle of Egypt somewhere. And get. And get this. Get the properties centralized where you can run them all the real estate, the Ramsey's on, with a couple of exceptions of vacation properties, are all within 40 miles of each other. And there's $600 million worth, not 5 million. All of my portfolio. It's all where I can touch it within a short drive. And so. And that. That's what the kids are going to end up with in this case. So yeah, if, you know, you guys need to do some estate planning and figure out end game after you grow this portfolio. How do you benefit from growing the portfolio other than just the thrill of growing the portfolio? And in the meantime, how do you eat? Which would be the property management piece.

[Jade Warshaw Ramsey]

What needs to be. Dave, go even deeper on the. Like, this needs to be in writing. This needs to be somewhere over Chick Fil A.

[Dave Ramsey]

And then we also tell the siblings, yes, you know, so Nate is taking over the property. In return, Nate is going to do this, this, and this. Okay.

[Jade Warshaw Ramsey]

We all know.

[Dave Ramsey]

Okay. So in our case, Rachel's husband, Winston has a real estate company that he and I started. He has done other things with it on his own behalf that I have nothing to do with now. And he also manages all the Ramsey property and gets paid for managing the Ramsey property. He does not own any of the Ramsey property. The three Ramsey Gen 2s will own the Ramsey property, one of which is his wife. But he. He's not managing it for the family. Vaguely hoping he'll get something. He knows exactly what he's going to get. His wife is going to get one third of the portfolio upon Sharon and my death. And in the meantime, he's being paid commissions and management fees to run a real estate company, which he thoroughly loves. And I like working with him. So it's all good.

[Jade Warshaw Ramsey]

Perfect.

[Dave Ramsey]

But that's a very clear, clear delineation of what's where. And by the way, he kind of came at it like Nate did. He wanted to learn the real estate business. I know it. He wanted to get involved in it. That was one of his. I was his initial mentor. So over the years, I was one of his mentors. He's had other people that didn't just learn from me, but I kind of helped him get started and I did. And so this guy needs a mentor.

[Jade Warshaw Ramsey]

He can't just, just jump into this.

[Dave Ramsey]

I'm. I'm in aviation.

[Jade Warshaw Ramsey]

Yeah.

[Dave Ramsey]

No, I'm in the rental property business in Hawaii.

[Jade Warshaw Ramsey]

That's. And it's going to be different in different. Each country in Each state that he's in.

[Dave Ramsey]

Yeah. Well, Hawaii is a different country. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey, Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try AskRamsey today. That's ramseysolutions.com. Keegan is with us in Palm Beach, Florida. Hi, Keegan, how are you?

[Caller 3 (Carl from New York City)]

Hey, Dave.

[Caller 1 (TJ from Kansas City)]

I'm doing well. How, how are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller 1 (TJ from Kansas City)]

So I had a question I wanted to run by you. I turned, I'm 22 now, but back when I turned 18, I took out some credit cards and racked up to me a significant debt. And I finally, now I'm just facing it. I'm 22 and I got a job, full time job. And I've been working on paying it off.

[Dave Ramsey]

Good. What do you make?

[Caller 1 (TJ from Kansas City)]

I make $3,500 a month.

[Dave Ramsey]

Okay. Working 40 hours.

[Caller 1 (TJ from Kansas City)]

Yeah.

[Dave Ramsey]

What do you do?

[Caller 1 (TJ from Kansas City)]

I work for a pain cream company. Nano Extreme Pain Cream.

[Dave Ramsey]

Okay.

[Caller 1 (TJ from Kansas City)]

The marketing for it.

[Dave Ramsey]

Yeah. And how much credit card debt did you run up?

[Caller 1 (TJ from Kansas City)]

I ran up about $40,000.

[Dave Ramsey]

Is that all the debt you got?

[Caller 1 (TJ from Kansas City)]

$40,000. And then I have some student loan debt. Altogether I had $70,000 of that.

[Dave Ramsey]

Okay, so student loans are 30,000.

[Caller 1 (TJ from Kansas City)]

Yes.

[Dave Ramsey]

No car debt.

[Caller 1 (TJ from Kansas City)]

Well, I was watching your show and I ended up selling my car about two weeks ago because I am able to ride into work with somebody.

[Dave Ramsey]

Wow. Very good. What the car sell for?

[Caller 1 (TJ from Kansas City)]

I sold it for 13 grand, so I was able to put it, put that towards the car. So I just paid that off. So I don't have a loan on that anymore.

[Dave Ramsey]

Big move there.

[Jade Warshaw Ramsey]

Excellent.

[Dave Ramsey]

Way to go. All right.

[Jade Warshaw Ramsey]

Okay, so the 70,000.

[Caller 1 (TJ from Kansas City)]

Yep. And then I had some bicycles that I sold. I, I sold those for 10,000 to pay off some debt. I ended up paying off two credit cards that totaled up to 8, $500 in debt. So.

[Dave Ramsey]

Look at you, man. Get it, get it.

[Jade Warshaw Ramsey]

So you're with the 70 now? Oh, 43,000.

[Caller 1 (TJ from Kansas City)]

Down to 43.

[Caller 3 (Carl from New York City)]

Yeah.

[Dave Ramsey]

But there's 70 total, including student loan debt. Yeah. Okay.

[Caller 1 (TJ from Kansas City)]

So I have a friend who offered to pay off all my debt and I pay him back. I don't really know if I want to do that or not, Because I want to ruin. I know money can ruin a relationship, and I'm not sure if I want to go down that road.

[Dave Ramsey]

It's not really money that ruins it. It's the change in the relationship that can run. Ruin it. So who. You're 22. What kind of a friend has $73,000?

[Caller 1 (TJ from Kansas City)]

He comes from generational wealth. His dad's very wealthy, so he has lots of money just laying around.

[Caller 7 (David from Denver)]

Wow.

[Caller 1 (TJ from Kansas City)]

So he offered to pay it for me and I have to pay him back, of course. But I'm not sure if I want to do that.

[Dave Ramsey]

I would not do that. No.

[Caller 3 (Carl from New York City)]

Okay.

[Dave Ramsey]

I think you're making wonderful progress because you've done a couple of things. One is you became very focused and clear on your debt attack. And two is you've been very impressively willing to sacrifice and very impressive. And so, yeah, I mean, it's not

[Caller 1 (TJ from Kansas City)]

what I want to do at 22,

[Jade Warshaw Ramsey]

but I don't want to live my

[Caller 1 (TJ from Kansas City)]

whole life like this.

[Dave Ramsey]

Yeah, what you don't want to do is live under the thumb of a credit card either. So you're wanting to get out. I'm going to fight my way out. No, I think it's a kind offer and I appreciate it. The problem is that when you borrow money from someone, you change the relationship to that of master, servant. The borrower is slave to the lender. And so if you're a slave, by definition, you have a master. And even if your master is a very nice person or is an unconcerned person, they still become your master. And it changes the air in the room. They start thinking about how much this guy works. They start thinking about if you're going on vacation. They start thinking about if you went to happy hour. All of a sudden they're thinking about it. Even if they have plenty of money, quote, unquote, laying around.

[Jade Warshaw Ramsey]

Yeah. Because this is your friend. So he has front row seats to how you're living your life every day.

[Dave Ramsey]

Yeah. So, I mean, it's kind of sounds good on the surface, or it sounds. It's actually a nice offer.

[Jade Warshaw Ramsey]

Yeah, sounds good.

[Dave Ramsey]

But it's going more times than not to your point, it ends in disaster, Keegan. So I will tell you this. If you can get some transportation of some kind, I'd love to see you pick up an extra job for 30 more hours and continue to accelerate the plan that you've already got. That's what I would do. But the secret sauce to this, Keegan, is not mathematics. On the interest rate, you get A better interest rate with your friend. The secret sauce is not that at all. The secret sauce is Keegan. When Keegan changed, everything changed. And before Keegan changed, nothing changed. So once you decide you're gonna ride this thing, you're riding it. I'm proud of you. Keep after it, dude. I want you to look in the mirror and go, you're the answer to the problem, not borrowing from a friend.

[Jade Warshaw Ramsey]

That's right.

[Dave Ramsey]

And that might include working another 30 hours a week somewhere, which I really wouldn't mind you doing at all. Todd is in El Paso. Hey, Todd. What's up, Todd?

[Caller 3 (Carl from New York City)]

Hey, sorry about that. Let's kind of mute it a little bit.

[Caller 5 (Seth from Boca Raton)]

My bad.

[Dave Ramsey]

No troubles. What's up?

[Caller 3 (Carl from New York City)]

Hey, so anyway, I was. I've kind of gotten myself kind of, like, screwed over a little bit, I guess you could say. I was out getting. I had a friend put me on getting Pokemon cards, and I think I went a little too far over because I racked up. Well, I talked to the lady on the phone before this. I racked up, like, thousands of dollars in credit card debt to help pay for my Pokemon cards.

[Jade Warshaw Ramsey]

How much is. How many thousands?

[Caller 3 (Carl from New York City)]

Probably 10 to $15,000.

[Dave Ramsey]

Okay, how much credit card debt do you have exactly? Do you even know?

[Caller 3 (Carl from New York City)]

No, I don't really pay attention like that. Mm.

[Dave Ramsey]

Well, step one, identify the problem in detail. You're lost. You're screwed. You need to find the map that has the little red arrow on it that says, you are here. Here you are, $13,426 of stupid. I want to. I want to define my stupid very carefully and thoroughly. That's step one. Step two is take assessment of the inventory of Pokemon cards and what. And how you can move them. So you've been trying. You bought them to speculate on them and try to retail them back out. You tried to buy them at one price and sell them at another price, right?

[Caller 3 (Carl from New York City)]

Correct.

[Dave Ramsey]

And did you do that successfully ever?

[Caller 3 (Carl from New York City)]

No, I kind of just winged because I saw other success stories, and I was like, you know what? I'll use the credit card. You know, My logic was, I'll use their money because not mine. And then if it doesn't work, then why were you.

[Dave Ramsey]

Then it's your money after all. Who know?

[Jade Warshaw Ramsey]

You know, I have a feeling this is a symptom of something else. What caused you to be so desperate that you would do 10,000 or however much on. On a credit card for Pokemon cards?

[Caller 3 (Carl from New York City)]

Oh, that's just the American dream in my mind. I'm just trying to like make the next dollar.

[Dave Ramsey]

Like American dream is to go broke in credit cards.

[Jade Warshaw Ramsey]

Card, dad.

[Caller 3 (Carl from New York City)]

Well, when you order like that.

[Dave Ramsey]

Yeah, this dude, like I wanted to.

[Jade Warshaw Ramsey]

Okay, like, what do you do for work? What's your job?

[Caller 3 (Carl from New York City)]

I. Job kind of bouncing around employment. I'm kind of.

[Jade Warshaw Ramsey]

There it is.

[Caller 3 (Carl from New York City)]

Looking for a new.

[Jade Warshaw Ramsey]

And there it is.

[Dave Ramsey]

Job a little.

[Jade Warshaw Ramsey]

Okay, that's what I was getting to. There was something going on.

[Dave Ramsey]

Yeah. Ding, ding, ding, ding, ding. Okay, okay. So you believe crap like you heard. Like, it takes money to make money. And so I'm going to be a Pokemon guy. Because two people I know did this once. And instead of working. So here's what I want you to do. Once you get a 40 hour job and then what I want you to do right after that is I want you to get another 30 hour job and pay these. Pay these credit cards off. Meanwhile, call some of your stupid Pokemon friends and say, hey, stupid friend, you got me into a stupid mood mess because I was stupid. And we're going to get this mess cleaned up and sell these stupid cards. Now help me with this and let's get these cards moved instead of sitting around looking at them. Because every day I got to look at them. If I'm you, I feel dumber.

[Jade Warshaw Ramsey]

Yeah, the American.

[Dave Ramsey]

I've done dumb things, Todd. You did a dumb thing. So I know what dumb things look like. And dumb things, when you leave them sitting there in your house, they shame you. When you walk by, they go, you do it a ton thing. They talk to you. They tell you they do. Had a car parked in my driveway one time and kept saying, dave, you're stupid. Yeah, you're dumb, Dave. Yeah, you look what you did, Dave. Until I got rid of that stupid car, I felt stupid every time I drove it.

[Jade Warshaw Ramsey]

Yeah,

[Caller 3 (Carl from New York City)]

Sam.

[Jade Warshaw Ramsey]

Hey, what's up, guys? It's Jade Warshaw. Listen, summer spending adds up so fast. Between vacations and road trips and camp fees and events and all the extra gas and grocery runs, money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the EveryDollar budget app. It helps you track your spending, free up cash to put toward debt and savings. Savings. And it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download everydollar in the App Store or Google Play and start for free today.

[Dave Ramsey]

Our scripture of the day, John 13:35. By this everyone will know that you are my disciples if you love one another. Thomas Sowell said, some of the biggest cases of mistaken identity are among intellectuals who have trouble remembering that they are not God.

[Jade Warshaw Ramsey]

Oh, boy.

[Dave Ramsey]

Whoa. David is in Denver. Hey, David. David, what's up?

[Caller 7 (David from Denver)]

Not much, Dave, how are you?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller 7 (David from Denver)]

Yeah, I'm on baby step six, paying off my home. I have no debt at the moment and I've been in the corners of the YouTube finance world and I found a video about five weekly mortgage payments and signing up for that program. So I'm currently owe $420,000 on a 5.98 30 year fixed loan. And I'm two years in and I was wondering, you recommend that I sign up for the bi weekly mortgage payments?

[Dave Ramsey]

I would not pay a fee for it. Is there a fee associated with it?

[Caller 7 (David from Denver)]

Yes, sir. To enroll, Rocket Mortgage does require a single upfront mortgage payment, which for me is $3,500.

[Dave Ramsey]

So I would have they take that as a fee.

[Jade Warshaw Ramsey]

Wow.

[Caller 7 (David from Denver)]

No, I do, I guess not a fee. I think it goes towards a principal, sir.

[Dave Ramsey]

Is your mortgage with Rob Rocket? Yes, sir. Okay. Are they charging any fee for the service of the bi weekly? An actual fee?

[Caller 7 (David from Denver)]

I don't believe so, sir. I believe they just asked me to make a one time mortgage payment to enroll and then I am enrolled from then on.

[Dave Ramsey]

Okay, that's possible. I'm not real trusting of Rocket because Rocket has a lot of shysters going on in there, so be careful. But let me. Let's walk through it. Here's why I'm asking that question. All right, so basically a bi weekly mortgage is half a payment, as you know, David, every two weeks.

[Caller 3 (Carl from New York City)]

Yes, sir.

[Dave Ramsey]

There are 26 two week periods in a year. So 26 halves is 13 holes. Right. Which means that a bi weekly mortgage effectively pays a single payment equity extra per year. Correct. So mathematically you would be within $15 of this by simply just writing a check once a year for an extra payment.

[Caller 2 (TJ's spouse or related caller)]

That's true.

[Caller 7 (David from Denver)]

And so I kind of thought like what?

[Dave Ramsey]

There's no magic. Yeah. The bi weekly is not magic. It's just a way to trick you into paying extra principal.

[Caller 2 (TJ's spouse or related caller)]

I see.

[Dave Ramsey]

And that's the only thing that does it. So if you just took your regular mortgage and once a year sent an extra payment above your regular mortgage, you'll be within 10 or $15 of the same exact result. So it takes a 30 year mortgage and turns it into about a 23. It takes a 15 year mortgage and turns it into about A 12.

[Caller 3 (Carl from New York City)]

I see.

[Dave Ramsey]

But it's all done by an extra principal payment a year. And really truthfully, you're on baby step six, so you may be doing more or less less of an extra principal payment a year. Are you paid every two weeks? Yes, sir.

[Caller 7 (David from Denver)]

I do have a salary position, so does my wife. We earn about186,186,000 a year.

[Dave Ramsey]

So it would be kind of an autopilot thing to at least get one extra payment a year. But I, with those numbers you're giving me, I want you to put more than that on there anyway, don't you?

[Caller 7 (David from Denver)]

Well, the problem is my, I have a four year old son and I'm paying $22,000 a year for dating daycare and that just really hurts the budget. I do feel like I'm house poor. I feel like I'm kind of, you

[Dave Ramsey]

know, if you're house poor, you don't need to increase your house payment.

[Caller 7 (David from Denver)]

Yes, sir. I'm just trying to pay this thing off as quickly as possible.

[Dave Ramsey]

Currently, the way you're gonna do that is extra principal payments, not being house poor from daycare. So you gotta decide which, which life is it you're living here. But either way, I want you and baby step six, for your sake, to get the house paid off. And the way you're gonna do that is extra principal payments. If you want to do that by setting it up as a bi weekly and they don't charge you a fee to do it. See if they're charging you 500 bucks to do this or something, well, crap, no, I'll just send in an extra payment.

[Caller 7 (David from Denver)]

Right?

[Dave Ramsey]

But if they're charging you no fee and you want, and you're paid bi weekly and it's easy. Yeah, let's do that. But let's also plan to do more.

[Caller 3 (Carl from New York City)]

Excellent.

[Caller 7 (David from Denver)]

And before I let you go, I do earn $11,000 a month with my wife after taxes, and my mortgage is 35,500, which equates to 32.2% of my monthly income. Since I'm on baby step six, I don't have any debt. Do you still think I can keep this house? I know you always say sell the house is too much, but I really want this home.

[Jade Warshaw Ramsey]

I think that you're feeling the squeeze, especially right now because you have somebody in daycare and that's a, there's a seasonality there that's not going to be like this for all time. So I think that's why you're feeling the squeeze. If there's something you can do to offset that in the meantime, I, I would do it, but I'm not.

[Dave Ramsey]

And that's putting the take home pay you outlined is after you put money in 401k, right? Yes, sir.

[Caller 2 (TJ's spouse or related caller)]

My.

[Dave Ramsey]

That's not the number.

[Jade Warshaw Ramsey]

That's not the wrong calculation.

[Dave Ramsey]

That's the wrong calculation. When we say take home pay, we mean just after taxes only. Yes.

[Caller 7 (David from Denver)]

Yeah, it's a 11,000 hits our joint account.

[Dave Ramsey]

I know, honey, but that's after they took money out for 401k and probably insurance. Yes, sir. Those two numbers don't count in the calculation. So you're not at 32.

[Caller 3 (Carl from New York City)]

Oh, okay.

[Dave Ramsey]

That's what I'm saying. The only numbers that count in the calculation for take home pay is after taxes, gross minus taxes. So add back insurance, add back in your calculation and then say of that number, what percentage is it? It's going to be down close to 25. So you're fine. I don't think you're hurting here. I think you're just observing the fact that you're not out of debt completely yet. And even when you are, it's not a magic pill. It's just. It's just a better place than being in debt. That's all.

[Jade Warshaw Ramsey]

Everybody listening needs to understand what you just said about take home pay, which is it is only the after tax amount.

[Dave Ramsey]

When we say have your house be 25% of your take home pay on a 15 year fixed, we're talking about only after taxes. Not after child support coming out, not after your car payment coming out and going to the credit union.

[Jade Warshaw Ramsey]

Not after, not after the insurance, not

[Dave Ramsey]

after insurance, not after 401k, not after Aflac, not after any of that stuff. Okay, so put all that crap. That's not what we're talking about. Good point. Aaron is in Minneapolis. Hi, Erin. What's up?

[Caller 1 (TJ from Kansas City)]

Hi.

[Caller 6 (Sophia and other female callers)]

Thank you for taking my call.

[Dave Ramsey]

Sure.

[Caller 6 (Sophia and other female callers)]

We recently moved to a country home. We thought it would be our dream home, our forever home that we'd raise our kids in. But after moving here, we realized we hate country life. We miss living in closer to a city, we miss sidewalks, all the amenities. We have another home and we are renting it out. And we thought we would rent it out for a few years and then sell it and then use that money to pay off said country home. But now we are unsure of what to do because we do not want to stay in said country home.

[Dave Ramsey]

We'll sell said country home and Move back to the city.

[Jade Warshaw Ramsey]

What's wrong with that?

[Caller 6 (Sophia and other female callers)]

So our other home is three hours away and sell it.

[Dave Ramsey]

Sell both of them and buy a house in the city?

[Caller 6 (Sophia and other female callers)]

That's what you think we should do?

[Jade Warshaw Ramsey]

Sure, if none of them are working for you.

[Dave Ramsey]

I don't want a rental house in a country home. And I want neither. Why don't we say I don't want to own them anymore? So what am I going to do? I'm going to sell them.

[Jade Warshaw Ramsey]

And you could probably buy what you want, maybe in cash. I don't know.

[Dave Ramsey]

Got to get rid of both of them.

[Caller 6 (Sophia and other female callers)]

Even if we just recently bought a said country home.

[Jade Warshaw Ramsey]

How is it?

[Dave Ramsey]

Okay, why are you arguing with me? You called me up and said you didn't like, like it.

[Caller 6 (Sophia and other female callers)]

No, I'm not.

[Caller 4 (Gabby from Gainesville, Florida)]

Ari.

[Dave Ramsey]

I know, but you're going. Well, I just bought it. Well, I know, but I don't like it. I made a bad decision. Unmake the decision.

[Caller 4 (Gabby from Gainesville, Florida)]

Okay.

[Dave Ramsey]

You didn't get married. You bought real estate.

[Caller 4 (Gabby from Gainesville, Florida)]

Okay, thank you so much, Dave.

[Dave Ramsey]

Yeah, it's hard. It's hard to get rid of the married thing if you do that one wrong. But real estate, when you just put

[Jade Warshaw Ramsey]

it up for sale, it's more simple than you think. I think.

[Dave Ramsey]

Yeah. Well, it's just. I mean, you may lose a little money. Okay, we made a bad decision. Something about our vision for life was askew and so. We may pay some tax for that.

[Jade Warshaw Ramsey]

Stupid tax.

[Dave Ramsey]

We may pay some stupid tax for that. That's okay. I've done dumber things than that than thought. I wanted something that I didn't. But I tell you what is interesting to do, Aaron, in these situations and anybody else, I've done it a lot to myself. When I find myself in a situation like that called a mistake, that's a mistake I want to backtrack and think through.

[Jade Warshaw Ramsey]

How did I get.

[Dave Ramsey]

What caused my brain to malfunction that allowed the mistake? What decision making framework was I using that was flawed? That caused me to, you know. Okay, I was looking at Instagram people on Homestead. Well, don't. Okay, I've just figured it out. I don't need to be looking at Instagram to do anything. Anything that. That has quality in life.

[Caller 4 (Gabby from Gainesville, Florida)]

Right.

[Dave Ramsey]

You know, and. And so what. What was it that caused me to get a skew of what reality was and so that I don't do it again?

[Jade Warshaw Ramsey]

Well, then it becomes research, not just something stupid you did.

[Dave Ramsey]

It was an experiment.

[Jade Warshaw Ramsey]

It was an experiment.

[Dave Ramsey]

I found something that didn't work.

[Jade Warshaw Ramsey]

That's right?

[Dave Ramsey]

Like a test tube when I blew up the lab. Yeah, that kind of thing. Yeah. I put this hour, the rent 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.