You Can’t Win With Money When Your Relationships Are Messy

Summary

The Ramsey Show – "You Can’t Win With Money When Your Relationships Are Messy"

Date: December 29, 2025
Hosts: Rachel Cruze & Jade Warshaw
Podcast Network: Ramsey Network

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Episode Overview

This episode of The Ramsey Show dives into the ways financial issues are often entangled with messy or strained relationships—romantic, familial, or even professional. Through a series of live calls, Rachel Cruze and Jade Warshaw provide practical and direct advice on navigating debt, business struggles, financial boundaries with loved ones, and how life choices (like marriage, divorce, parenthood, and health challenges) impact financial peace. The underlying message is clear: transforming your finances requires both practical steps and honest conversations with yourself and those around you. “Normal is broke and common sense is weird,” Rachel emphasizes, championing a life of intentionality, sacrifice, and hope.

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Key Discussion Points & Insights

1. Career, Business, and Debt Decisions

Segment: [00:59–08:42]
Caller: Miguel from Boston

• The Situation: Miguel, single, 147k in various debts, owns a first-year printing business; considering whether to sell the business for $30k or stick it out.
• Host Advice: Both hosts caution against making major changes out of desperation—don't immediately sell but also don't rely on a struggling side hustle as a full-time income. Find a full-time job for stability while keeping the business as a side gig.
  • Jade: "You're not on a living wage right now...this eats like a part-time side hustle." [03:40]
  • Rachel: “It’s tempting to hold tight for maybe six months...give yourself a time period. If you can’t grow it, sell the equipment, get the money and start fresh.” [06:30]
• Memorable Advice: Put a clear timeline on the experiment with the business; don’t take on more debt for it; up your income however you can (waiting tables, etc.); and focus on cash flow.

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2. Dealing with Health-Related Financial Emergencies

Segment: [12:07–19:26]
Caller: Andrew from Cheyenne, Wyoming

• The Situation: On Baby Step 2, both Andrew and his wife seriously ill (mold exposure), considering a $10k–$30k experimental medical treatment not covered by insurance.
• Host Advice:
  • Avoid debt if possible for medical; pause the debt snowball and save aggressively for treatment. Try to negotiate costs, get close to the low end, and cash flow it even if it means delaying debt repayment.
  • Rachel: "Because it’s not a life or death... pause and save up for it." [19:10]
  • Jade: "Maybe one of you goes at a time to see if it’s helpful." [17:27]
• Key Insight: Using cash, even for medical, forces creative problem-solving and negotiation rather than just going further into debt.

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3. Living Paycheck to Paycheck, Student Life, and Difficult Car Decisions

Segment: [21:29–30:25]
Caller: Sierra, Boone, North Carolina

• The Situation: Mid-20s couple with a child, husband earns ~$50k, Sierra is a full-time student aiming to be a marine biologist, living paycheck-to-paycheck after a hurricane set them back. They discovered they are $13k upside down on Sierra's $28k car.
• Host Advice:
  • Sell the expensive car—even if upside down—to cut the monthly payment, possibly sell the motorcycle too.
  • Recognize the temporary nature of financial hardship due to educational and family choices; hard “adult” decisions ahead.
  • Rachel: "Sell that car...I would rather have a $16,000 loan than a $28,000 loan." [27:26]
  • Jade: "Cutting up those credit cards." [29:36]

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4. The Dangers of Cosigning and 'Relationship Debt'

Segment: [36:34–42:11]
Caller: Greg, Biloxi, Mississippi

• The Situation: Cosigned on an ex-fiancée’s $27k truck loan that’s now upside down.
• Host Advice: Encourage ex to sell the truck urgently; be prepared financially if she defaults since Greg is still liable.
  • Jade: “This is a tie to you...if it were different, you could make the argument for a clean break.” [38:04]
  • Rachel: “You’re in a tough position, Greg...You’re gonna be one of the sad examples.” [39:55]
• Key Point: Never cosign, even for someone you love (“Talk to Greg in Biloxi!”).

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5. Massive Student Debt and Protecting Spousal Assets

Segment: [43:39–52:09]
Caller: Donna, San Antonio

• The Situation: Husband has $340k in student loans due to fraud, age 66, no assets; she’s 57, $1.4 million in investments.
• Host Advice:
  • Federal loans are not negotiable; consider using joint assets (possibly selling a property) to pay off if committed.
  • Address underlying relationship imbalances; the wealthier spouse shouldn’t feel solely responsible, but as a married team, there’s shared stewardship.
  • Jade: “There’s a balance of power here that feels off...work with someone to talk this through.” [51:06]

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6. Navigating Divorce, Large Equity Payouts, and High Interest Loans

Segment: [65:36–73:54]
Caller: Wanda, Los Angeles

• The Situation: Must pay ex-husband $50k from home equity after divorce. Has $25k car loan, $12k 401k loan, high income but little savings.
• Host Advice:
  • Use a personal loan as last resort to avoid refinancing at much higher mortgage rates; set hard lines going forward (no more credit, 401k loans, etc.).
  • Jade: “It’s a blessing he dropped from $150k to $50k.” [71:29]
  • Rachel: “Draw that line in the sand...no more car payments, no more credit cards.” [72:13]

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7. Financial Boundaries with Elderly Parents

Segment: [85:38–94:08]
Caller: Gabriel, Los Angeles

• The Situation: 72-year-old mom, nearly out of mortgage but no retirement savings, asking adult children for money, home worth $1.1M.
• Host Advice:
  • Advocate selling the house and downsizing to free up equity for investment and sustainable retirement spending.
  • The family must have a tough, unified conversation about boundaries and long-term solutions; continuing to “float” her is unsustainable.
  • Jade: “The math is not emotional...the more you float it, the more you’ll be doing it over the next 20 years.” [92:46]

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8. Prenuptial Agreements & Uneven Asset Marriages

Segment: [96:07–104:38]
Caller: Derek, San Jose

• The Situation: Engaged, brings $12 million into marriage while fiancée has $50k; prenup discussion causing emotional friction.
• Host Advice:
  • A prenup is wise with such a disparity, but structure it graciously (e.g., everything after marriage is shared, only premarital assets protected in event of divorce).
  • Use therapy/counseling and transparent communication to keep the conversation healthy rather than adversarial.
  • Rachel: “You’re not being harsh, you sound gracious...I think it can feel like it’s all off to one side, but it’s really yours together unless you divorce.” [103:54]

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9. Miscellaneous Quick Hits

• Saving for a Tiny House with No Credit Score: [105:56]
  • Don’t take on debt for tiny house; save cash, negotiate if buying used. [107:01]
• Should You Get a Master’s for a Slight Raise?: [111:03]
  • It’s not worth $18k in debt for a mere 2% income bump; only do it with cash. [112:28]
• Life After Divorce at 19: [76:51]
  • Take time, get good legal representation, and work out expectations with supportive parents before making hasty decisions.

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Notable Quotes & Moments

• Rachel Cruz, on breaking financial cycles: “Normal is broke and common sense is weird.” [00:11]
• Jade Warshaw, on addressing income issues head-on: “The next line of defense is getting more income. That’s how it works.” [08:21]
• Rachel Cruz, to couple considering a car loan they can’t afford: “You can't afford this car, Brett. At $40,000, you can't afford half of your annual income going to the value of a car." [58:31]
• Jade Warshaw, on financial adulting: “You have to make different decisions if you want different results, Brett...Be weird!" [63:11, 63:13]
• Rachel Cruz, on peace: “We all want peace. Peace with our money, our homes, our schedules...” [08:42]
• Jade Warshaw, on the emotional challenge with prenups: “It's a tough way to start a marriage, because now we’re dividing yours vs. mine. Everything else in marriage is ‘we, us, ours’.” [102:55]
• Memorable call, Greg in Biloxi: Both hosts warn listeners to never cosign. “Talk to Greg in Biloxi!” [39:55]

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Timestamps for Major Segments

• [00:59] Miguel – Business, debt, and tough choices
• [12:07] Andrew – Medical debt dilemma
• [21:29] Sierra – Living paycheck-to-paycheck and the car trap
• [36:34] Greg – The dangers of cosigning
• [43:39] Donna – Massive federal student loans in 2nd marriages
• [65:36] Wanda – Divorce, home equity, and restarting at 55
• [85:38] Gabriel – How to help aging parents without being the financial safety net
• [96:07] Derek – Navigating prenup emotions with a big asset gap

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Final Reflections

Throughout the episode, Rachel and Jade return repeatedly to the theme that money management is inseparable from our relationships, both because those we love influence our spending, saving, and risk-taking habits, and because real peace with money must be built on clear expectations, boundaries, and a willingness to 'be weird.' The advice is tough but compassionate, rooted in both financial common sense and the messiness of relationships.

Rachel’s final encouragement:
"Take control of your money and create a life you love." [125:43]

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This summary was crafted to reflect the episode’s authentic, conversational, and practical tone, giving non-listeners an actionable sense of the real issues, real people, and real hope that defines The Ramsey Show.

Transcript

[Rachel Cruz]

This episode is filled with some of our best calls and advice. But unless you take what you hear and put it to work in your own life, you'll be stuck with the same money stress in 2026. So make a change and download everydollar Today, Normal is broke and common sense is weird. So we're here to help you transform your life. From the Rams Network in the Fair Winds Credit Union studio, this is the Ramsey show, and I'm Rachel Cruz hosting this hour with Jade Warshaw. And we're answering your questions. So give us a call at 888-825-5225. And we'll be talking about your life, your money, career, relationships, anything and everything. We are here for you. So let's start off in Boston with Miguel. Hi. Welcome to the show.

[Caller]

Hey, how's it going?

[Rachel Cruz]

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

[Caller]

So today I wanted to ask. So I have a business, and I'm. I'm contemplating on what I should do next because I'm. I'm also 147,000 in debt, and that's including credit cards, student loans, and car payment.

[Rachel Cruz]

Okay.

[Caller]

So I want to know if I should sell a business, what I think I get value for, and then start fresh and use that lump sum of money to attack, like, the debt.

[Jade Warshaw]

What kind of business are you in?

[Caller]

It's a printing business. So merchandise.

[Jade Warshaw]

What would cause. What would cause you to sell the business versus using profit from the business to pay down the debt?

[Caller]

I think it's just because I'll collect a lump sum of money and, like, the business right now is kind of, you know, fluctuating. It's up and down, and I'm also alone in it. So it's a lot of my time where I feel like if I could change the.

[Rachel Cruz]

If you didn't have debt, Miguel, would you stay in this business or would you still want out?

[Caller]

Yeah.

[Rachel Cruz]

You would stay?

[Caller]

I'll potentially stay in the business. Yeah.

[Rachel Cruz]

Okay. Yeah. Because I look at this as. I mean, because, I mean, well, how much would you sell it for? How much could you get out of it minus all of your liabilities and everything?

[Caller]

About 30 grand.

[Jade Warshaw]

I.

[Rachel Cruz]

How much are you making off of it every year? How much are you bringing home?

[Caller]

So this is actually like my first year in it, so I'd know at the end of the year, but roughly after everything, about 1500 bucks a month.

[Jade Warshaw]

1500Amonth. And this. Is this what you do full time, or is this kind of like a side business?

[Caller]

It's Full time?

[Jade Warshaw]

Well, I don't know that I would sell it, but I would not have this being my full time job right now because of what it's generating. It feels like.

[Rachel Cruz]

How are you guys living? Is your wife work?

[Caller]

No, I'm single.

[Rachel Cruz]

You're single. How are you living off of $1,500 a month?

[Caller]

Just, just making it happen, honestly.

[Jade Warshaw]

But what's your rent though? Like real numbers.

[Caller]

Pay studio? It's about 850.

[Jade Warshaw]

What else? Car.

[Caller]

Car, yeah. 450 and then 450.

[Jade Warshaw]

Okay.

[Caller]

Yeah.

[Jade Warshaw]

And then utilities. I guess that's put in with the rent and then just. You're scrapping on food. No. Insurance?

[Caller]

Yeah.

[Jade Warshaw]

Do you have insurance? Health insurance?

[Caller]

Like caught my cards? No, no, no, no. Health insurance.

[Jade Warshaw]

Yeah. So you're not on a, you're not on a living wage right now. And so while I think it's cool to have a printing business, this, it eats like a part time side hustle when we look at the, the income that it's bringing. So I would be looking, as you're working this. I'd be looking for a full time job. What are your, what are your skills? What have you done in the past before you did this business?

[Caller]

I technically just hopped out of school and then saved money and then started this business.

[Rachel Cruz]

Yeah. How many hours a week?

[Caller]

I've never really.

[Rachel Cruz]

How many hours a week are you putting into this?

[Caller]

A lot. It's probably like 50, 60.

[Rachel Cruz]

Yeah, yeah, yeah. Okay. So if you did, do you have a buyer out there? Like when you say sell the business, I mean, what's that? Have you, have you looked into that option? Is there a realistic option?

[Caller]

Yeah, I have. Yeah, I have a few options. And that's when. I mean the business. I just mean like the equipment and everything.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Oh, I hear what you're saying. Not necessarily. Yeah.

[Jade Warshaw]

Okay. Yes. That's where the debt is. Right. What did you invest in to do this business? Like what equipment do you have?

[Caller]

Oh, I have like DTG, printer, heat presses and a couple other machines. You know, stuff like that.

[Jade Warshaw]

I, I'll, I'll tell you, you've. You haven't been doing the business long, so I don't want to say that there's no future in it. Like, but how much of this debt is business debt? Like how much of it came from the business?

[Caller]

About eight grand.

[Jade Warshaw]

Okay. That's not bad. Of the 147, that's only eight. I. I'm inclined for you to continue. What I want to know is what's the minimal amount of hours that you can put in it to keep the 1500 so that you can search for something else. Is there any feasible way to do that?

[Caller]

Yeah, it's possible. That's. That's also another plan I've been thinking of because I have a location in the premier like downtown area. So I was thinking of just getting rid of the space, trying to find something smaller and then kind of just work on based off orders I get. Yeah, not so much like being in there.

[Rachel Cruz]

Do you have consistent clients that you're reprinting for or is it a one and done?

[Caller]

A little bit of both, but I do have, I've picked up a few clients that are picking up, you know, monthly.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And as most of the hours, when you're saying I'm working 50 hours on this, is it most of it in the actual physical printing that you're having to do or is it trying to find new clients and marketing and thinking of creative ways to get your name out there?

[Caller]

A little bit of both, but mainly the printing process, like printing and being in there.

[Rachel Cruz]

Okay. Yeah, so I'm with Jade. I mean Miguel, if you have all the equipment and it is bringing in 1500, obviously that's not, that's not sustainable long term for you to live like that. Obviously you know that or you probably wouldn't be calling this show. So it's November. A part of me would give, give it another six months while doing something else. Like you need to go wait tables. I mean you could make more money doing that. I mean something right. You need to go be doing something and if you can keep this on the side and actually get some clientele, you could, I don't know, and if you, yes. Grow it and then maybe that be your full time or you just have these clients and you start making 3,000amonth while also still working to get out of all the credit, all the debt that you talked about at the beginning of this call. So I almost would be tempted just to hold tight for like maybe six months. Give yourself a time period though to say, okay, don't go into any more debt in it, but to say, can I pick up any more steam in this business in the next six to nine months and if you can't, then sure, sell the equipment and then that will give you some money. But we just see this, Jade and I both, I think as a great side hustle for right now. Why don't you go get a full time job somewhere else.

[Jade Warshaw]

The fact that you've started generating money so quickly from it I think is good. And you have made an investment in some equipment and it feels like worth it to try to play that out a little longer. But I like what Rachel said on putting a timeline on it.

[Rachel Cruz]

So I would do that. Miguel. Or just throwing this out there. Kind of the other side of the coin is if you hate it and you're not enjoying it, but you. I think you are liking it in some degree because you said you'd still stay in if you didn't have debt. Is it's to. Yeah. Find something just full time, sell the stuff and you start a whole new life where you're not feeling like you have to carry a business. Right. Because it does. It's a lot of strain and mental calories to do that. So I don't know, kind of two different options. But either way you gotta get a second job. Either way.

[Jade Warshaw]

Agree. Agree. Rich. Yeah. I hope that helps. I know that sometimes when we just tell people, cut your expenses and get a job. I know it feels tough, but truly that is. That is the remedy. You don't have expenses to cut your bare bones as it is. So the next line of defense is getting more income. That's how it works.

[Rachel Cruz]

Yeah. And Ken Coleman has a book. Find the book.

[Jade Warshaw]

Find.

[Rachel Cruz]

I'm sorry, Find the work you're wired to do. And we'll send that to you because there's a great. It's on a quiz assessment at the back assessment to kind of figure out. Maybe this will help kind of narrow some possible career paths for you too, Miguel, that you can just kind of brainstorm and think. So holding the line, Christian's going to pick up. We all want peace. Peace with our money, our homes, our schedules. But having peace online is important too. Most of the time, when you sign up for a coupon, enter a giveaway or click yes to another email list, your personal info, like your name, your phone number, your address gets collected and sold by data brokers. And before you know it, your inbox is overflowing, your phone's full of spam calls, and your data's floating around who knows where. That is why I love what Delete Me does. Their team of privacy experts find your personal info on those creepy data broker sites, gets it removed and keeps it off. It is simple, it's safe, and it gives you more peace of mind. That means fewer spam calls, fewer scams, and way less digital chaos. You have worked so hard to find peace with your money. Now it's time to find peace with your digital life. Start protecting Your privacy and your peace. Today, go to JoinDeleteMe.com Ramsey for 20% off an annual plan. That's JoinDeleteMe.com Ramsey. With the last caller, we were talking about real estate and what that looks like to start saving up towards a home. And you guys, when it comes to buying and selling your home, there's a lot of decisions. It can feel very overwhelming. But you don't have to go that through that process alone. We created Ramsey's real estate home base. So this is a place with so many resources and tools like calculators, start to finish guides, how to articles, a podcast, a book, a video course, like everything around the subject of real estate because again, buying and selling it can just, it can be an overwhelming process. And the more information you have that you understand and you know, the more clarity you're going to have walking into that, which is huge. Like you, you want to be armed with so much information before you go and buy or sell your home. So make sure to check it [e-mail] realestate or click the link in the description if you're watching on YouTube or listening on podcast. Because if you need some next steps to towards your home buying or home selling process, make sure to check it out. One of my favorite things on it is the dashboard. They have the US Housing market trends and they keep it updated. And it's just constantly kind of a, kind of a pulse of what's going on with interest rates, median house home prices in America, total days on the market, how many homes are for sale around the country. I mean, it just kind of gives you the snapshot picture of the real estate market. So again, you can go to Ramsey Solutions.com/real estates. All right, we're going to the phones and we're going to Andrew in Cheyenne, Wyoming. One of my favorite, one of my favorite country songs. Hey, Andrew, welcome to the show.

[Caller]

Hey, thanks for having me.

[Rachel Cruz]

Absolutely. How can we help?

[Caller]

Hey. So my wife and I were on baby step two and it kind of took us a little bit to get there, mostly because we've been, we've been pretty sick, both of us, for the past few years and we're seeking some medical treatment to hope hopefully nip this in the bud, hopefully in a few short months. But the medical treatment that we're looking at that was recommended by our doctor is experimental and it's not covered by insurance. And the treatment going to be between 10 to $30,000. So we're kind of in a position where we.

[Rachel Cruz]

Oh no. Andrew, are you there? Andrew? Oh, no.

[Jade Warshaw]

Oh, man.

[Rachel Cruz]

Andrew, we'll give you one more second. Oh, yep, that's a bad line. I think we're going. There you are.

[Jade Warshaw]

Oh, you're back.

[Rachel Cruz]

Good.

[Caller]

Sorry.

[Rachel Cruz]

Oh, you're good, you're good.

[Caller]

My phone's a little weird, so. Yes. I don't know if my wife and I should actually take out a loan or not. We really don't want to, especially since we're.

[Rachel Cruz]

Can I ask you out of. And share as much as you feel comfortable. But what's going on health wise?

[Caller]

We were so we got pretty sick from the home that we were living in and so.

[Jade Warshaw]

Like mold.

[Caller]

Yeah. So it's just been a lot of stuff that's been going on where a lot of the treatments have been not either FDA approved or treatments that have been getting us better. We are better, but it's just been a really long process. So the last time we talked with our doctor, he said that we should try and do like a hyperbaric treatment, which seems great. You know, he's had great success with it. But the only problem is that the payment has to be up front. And so that's, that's the only issue.

[Rachel Cruz]

And insurance, this is obviously something more like in a natural bent, I'm assuming. So insurance isn't going to cover it.

[Caller]

No, insurance won't cover it.

[Rachel Cruz]

Tell me, just health wise, are you guys able to. Are you able to work? Are you able to function? Like, how are you guys? You said you're doing better. I'm just trying to get a gauge about how urgent this, this is for you guys.

[Caller]

Yeah, so. So we are better and we are both working right now. We make about, I want to say close to 70 or $80,000 right now a year.

[Rachel Cruz]

Okay.

[Caller]

The, you know, only problem with this is that the longer we put it off, the worse it'll get.

[Jade Warshaw]

Sure.

[Caller]

And so just what's your margin every month?

[Jade Warshaw]

Like what are you right now putting towards debt and baby step two that you could put potentially towards saving up for this or doing one at a time.

[Caller]

Yeah, we're able to put close to $600 or so a month into debt.

[Rachel Cruz]

And how much debt do you guys have right now?

[Caller]

We have about, I want to say about $20,000 in student loan debt and then about 50,000 in a, in a business loan.

[Rachel Cruz]

Okay. Man, this is so hard. Cause I do feel like they're just from my own, not my own experience, but people within my close circles of friends and family even that I know, you know, when you get something, it's like autoimmune or mold or whatever that it can end up feeling. Andrew, like there's always something else we have. Like there's a long line of things that are continual. And so what I, you know, always just think about and kind of caution is I would, number one, maybe get a second opinion. I'm sure you know your doctor well and trust them, but you know, I mean, we're talking about 10 to $30,000, right? I mean if it was $2,000, that's one thing. But I mean you're, you're talking, you know, five figures going in with treatments.

[Jade Warshaw]

And so is that a piece or all in?

[Caller]

That would be for us combined.

[Rachel Cruz]

And is this ongoing or is it kind of a one time?

[Caller]

Lord willing? It'd be, it'd be just a one time, like you know, one, one to two months worth of treatment. So it'd be okay. You know, 20, 20 sessions is like, is about $10,000 on the high end. So we hope to be done in about a month.

[Rachel Cruz]

Okay. So you know what, what I would probably do because again, I feel like this can sometimes feel like a never ending cycle. I would, I would. And because it's not a, and I know you guys are saying, I don't want to downplay it all the sickness, because I'm sure it's just miserable, but it's not a life or death, like, okay, I have to save my child right now because you know, there's a, you know, like, it's not this, it's not an urgency, but it is something for the betterment of your health. You want. So what, you know, what I would probably strive to do is whatever I could to get because 10 to 30 is a big range. So I would get as close to that 10 and I would talk, negotiate doctor's bill. I mean, I would do whatever I could to get it down to that 10. And you guys are, you know, I would work to save a thousand a month. I would be okay right now because it is a health issue, maybe to pause the debt snowball, stay current on your bills, but I would bump that 600amonth up to a thousand and save for 10 months. And then starting October, November, Andrew, start this treatment and then hopefully by this time next year, you're through it, you're done. And then press play on the baby.

[Jade Warshaw]

Steps and maybe one of you goes at a time to see if it's helpful.

[Rachel Cruz]

Oh, that's a good point.

[Jade Warshaw]

You know, I know you're two different bodies with Two different sets of, you know. But that might be a good way to say, listen, I did it. It did nothing for me, or I did it and it really, really helped. That might give you some confidence going into the next treatment, too. It's just a thought. Like, I don't know what you're facing. I don't know if it's headaches or every time you eat, you know, whatever it is, if it's something that's truly debilitating. But if it's just. And again, I'm not. I don't want to downplay it either. But if it's something that's more of an annoyance that you're learning to live through, that gives you, you know, there's a little bit more timeline there to.

[Rachel Cruz]

Get this done for sure. And the sense too, that, you know, you don't want to prolong it too long because, like, what you're saying, you know, they can come back and get worse unless you have this treatment. So getting to it.

[Jade Warshaw]

Right.

[Rachel Cruz]

A level of urgency. But it's also not like, we have to do this next month. The only option is a loan and we're done. Like, if you can. And it's not debilitating because you guys are working and all of that, I would. Yeah, I would find something because I. And I would cash flow it. And the other thing, Andrew, that's interesting is when you are working with cash, even when we're talking about health situations, it does force you. This is why I like cash. Forces you to look at other options, other decisions, like sell something. There's just other parts of your brain of problem solving versus with debt. It's like, here's a chunk of money. This is all we're gonna do. We don't really have to put the brain power to think through other things. It's just here. But when you're paying with cash and you're working and saving hard, I don't know, it forces other things to come to the surface of other options and choices. That's also true. But. Yeah. So, again, I'm so sorry. That is stuff that is like. And that's. And that has been. I don't know. I don't know if you've. I've just had people and it's like you. You go to the next thing and then it flares up again.

[Jade Warshaw]

I don't know.

[Rachel Cruz]

It just feels like it's like whack a mole a little bit sometimes with different things. So I do want you guys to get that treatment, but. But because it's not, it's not life or death. Right in this moment, I would, I would calm down. I mean, I would pause a little bit and save up for it.

[Jade Warshaw]

That's difficult. I remember when Sam and I were getting out of debt. This was before the days of Obamacare and you had to have insurance or else you were penalized. We didn't have insurance. And one day he was pulling our luggage out of the back of the Jeep and it got caught on his finger and he broke his finger. Oh, no. And we didn't have insurance. And I was like, listen, head over to Walgreens, tape it up.

[Rachel Cruz]

Finger Sam.

[Jade Warshaw]

It's crooked to this day. And you know, he plays instruments. It wasn't good.

[Rachel Cruz]

Take care of yourselves.

[Jade Warshaw]

Take care of yourselves.

[Rachel Cruz]

Is that insurance? This is the Ramsay Show.

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[Rachel Cruz]

So stop stressing over your budget and start saving. Instead, go to boostmobile.com Ramsey and unwrap the savings today. That's boostmobile.com Ramsey restrictions apply. See boostmobile.com Ramsey for details. Foreign. Welcome back to the Ramsey show. Up next in Boone, North Carolina, we have Sierra on the line. Hi, Sierra. Welcome to the show.

[Caller]

Hi. Thank you.

[Rachel Cruz]

Absolutely. How can we help?

[Caller]

So my husband and I are living paycheck to paycheck and I was introduced to Dave Ramsey for my grandmother. Now I have been trying for the past six months and I'm stuck on baby step one and we're not getting anywhere. We had half of baby step one and then everything happened with the hurricane and we're back to zero.

[Rachel Cruz]

Were you guys hit hard? Was, were you one of the towns?

[Caller]

Yeah, we were. It's okay. It happens. But I'm just, I feel like we can't catch a break. And living paycheck to paycheck is so hard for us. I am a full time student, College student. I'm 29 and my husband works full time, sometimes even over like overtime shifts just so that we can get by. And I just, I don't know what to do anymore.

[Jade Warshaw]

What, what's he bringing in?

[Caller]

Income wise about 49 to 50, 000 a year.

[Jade Warshaw]

Okay, and when do you graduate?

[Caller]

I have about five semesters left, so I'll be finishing up in 2027.

[Jade Warshaw]

Okay, wow.

[Rachel Cruz]

Okay. Are you, are you working at all, Sierra?

[Caller]

I'm not, but I pick up pet sitting shifts to try and bring in some money. I tried a full time job and, and full time college and it destroyed me.

[Rachel Cruz]

Okay, what, what are you getting your degree in?

[Caller]

Biology.

[Rachel Cruz]

And what's the goal with that? What do you want to do?

[Caller]

I want to go work on the coast as a marine biologist.

[Jade Warshaw]

Wow.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Okay, so you're, he's bringing in 49,000, you're doing pet sitting. How much do you guys see a month? Like after taxes, after everything? What does that look like monthly for you?

[Caller]

It's about three, 3,500.

[Jade Warshaw]

Okay, and what, how are you guys living? Are you renting? What are you paying for rent?

[Caller]

We are renting. We pay a thousand a month for rent.

[Jade Warshaw]

Okay. Yeah. This is tough. The solution that you're looking for, I mean, people live paycheck to paycheck for different reasons. Sometimes it's our spending's out of control and we've got to, you know, reign the budget in and rain the spending in. And sometimes it really is a income issue and it's. In this case, I think you're creeping up on an income issue. I'm just wondering what is, what is your husband doing for work? What kind of work does he do?

[Caller]

He makes fiber optic cable.

[Jade Warshaw]

Okay, and, and you said he had a side hustle too. What's that?

[Caller]

He doordashes.

[Jade Warshaw]

Okay, so I'm wondering, I'm wondering if both of you need to sit down and kind of figure out, okay, what do we both need to do in order to make this work? Because to your own words, it's not sustainable. Are you guys going into debt? Like, how are you covering the overages?

[Caller]

We are door dashing every chance that we can get. Okay, just so like I can get to class and we can get food and sometimes his mom helps us out.

[Jade Warshaw]

Okay, so there's not. You're covering the overage then. So there's part of this. And, and there may be more that you can do income wise, but there is part of this where you said, okay, I'm going to go to school for the next three years and I'm going to become a marine biologist. And by me doing that, here's what we've decided. My income is limited. And he's in his career right now. And so there's part of this that you guys have decided by, you know, by choosing this path. And I'm not saying it's a bad thing. It's just we've both understood that for the next three years it's going to be extremely tight. But there's a light at the end of that tunnel because you're going to be a marine biologist. What's a marine biologist make?

[Caller]

It kind of depends. I'm trying to get a state job and that can range anywhere from 50,000 to 70,000.

[Jade Warshaw]

Okay, and how are you paying for school right now?

[Caller]

I am pretty set with financial aid and scholarships. I've already finished my associates and.

[Rachel Cruz]

Good for you.

[Jade Warshaw]

Very good.

[Caller]

Went through that with honors, so I've been doing pretty well with scholarships.

[Jade Warshaw]

So no debt? No.

[Rachel Cruz]

Do you guys have any other debt or any debt at all?

[Caller]

Yes, I have three credit cards, but it only adds up to about a thousand. Maybe 1500. I have a car.

[Rachel Cruz]

How much is that?

[Caller]

The total on It's 28, 000 and I pay $668.

[Rachel Cruz]

There's some money. Sierra, you gotta sell that car. Yeah, you gotta sell it.

[Caller]

See, and I'm trying to figure out how to sell it. So I'm not sure because I'm $13,000 flipped on this car.

[Jade Warshaw]

Oh, wow.

[Rachel Cruz]

So you. So you owe 28,000 and how much? And you're saying you really can't sell it except for 15,000 is what it's.

[Caller]

Worth when I had it because I went and had it appraised at a dealership.

[Rachel Cruz]

Okay, don't.

[Caller]

They said they can only give me 6,000 for it.

[Rachel Cruz]

Okay, so don't do the dealership route because they will always give you a much lower rate than what you could actually sell at private sale for. So go on, Kelly, Kelly, blue book.com, put in all the info and just see on the high end what you could get for it. Okay, so the. The dealership told you. How much would they pay for it?

[Caller]

6,000.

[Jade Warshaw]

Oh, my gosh.

[Rachel Cruz]

$6,000. And it's a 20. And you owe 28,000. What kind of car is it?

[Caller]

It's a 2017 Jeep Cherokee and I have 162,000 miles on it.

[Rachel Cruz]

Okay, what.

[Jade Warshaw]

What does your husband drive? What's his deal?

[Caller]

He has a motorcycle that's paid for.

[Jade Warshaw]

Got you.

[Caller]

And we have a. We call it a hoopie. And it's. It's just a really old beater that's also paid for.

[Jade Warshaw]

What about the motorcycle? What's it worth?

[Caller]

About 4,000 okay. Okay.

[Rachel Cruz]

Yeah, I would. Okay. I think, yeah, I would be selling this car, Sierra, for sure. And even if it's, even if you can only get 16,000 for it, I would rather have a $16,000 loan than a $28,000 loan. Does that make sense? Like that's gonna, that's gonna change your numbers a whole lot. And if I were you guys. Do you guys have kids?

[Caller]

We have a two year old.

[Rachel Cruz]

You have a two year old. Okay. Yeah.

[Jade Warshaw]

I mean, I, I might sell the motorcycle and take the 4000 and get.

[Rachel Cruz]

A beater car for you and then sell your car.

[Caller]

Yeah.

[Rachel Cruz]

I mean, honestly, because you can always go back and get a motorcycle again. But you guys, I mean, to your.

[Jade Warshaw]

Point, I mean, it's going to cut that payment down when she gets a loan for whatever it is. Almost half, possibly.

[Rachel Cruz]

Yeah, I mean, it'd be. Yeah, you guys would have an extra $300 a month coming in.

[Caller]

Yeah.

[Rachel Cruz]

So there's, and there's decisions here. And I think Jade set it up really well and it's a, it's a, it's kind of a hard pill to swallow in life. But it's understanding that, you know, as adults we make decisions around our life and not all of them.

[Jade Warshaw]

It's not bad.

[Rachel Cruz]

Yeah. Not all of them are right or wrong. It's not this, you know, oh gosh, you shouldn't be in school right now. It's not that at all. It is, though. We have decided to do this route and because of that, we're not gonna have a lot of money. Like we're gonna be, we're gonna feel broke for three years until I get through school and until I get a job and all that. And in three years it's gonna look different. But in the meantime, what can we do? What other decision make that are going to be adult, like decisions that may hurt and they're not fun. But it's things like getting the extra job like you guys are doing. It's selling stuff to see what you can free up. It's getting out of debt and, you know, freeing up income.

[Jade Warshaw]

Cutting up those credit cards.

[Rachel Cruz]

Cutting up credit cards. Yeah. I mean, it's doing a couple of these, making some of these decisions within the big decision of the lifestyle you guys have made just to make it easier. Sierra. And that's the thing is, is we want peace. You know, we talk about financial peace is what we want for everyone. And that peace is gonna look different depending on, you know, everyone's situation and, you know, the way they view life. And all of it, it's a little bit of, you know, subjective to a degree, but you don't have peace right now. And so what I would fight so hard for is in these three years, how can we get some peace? And being able to free up some money would bring some of that. And how do we do that? Well, I just listed out a couple options from jobs and selling stuff and all of it. So that's one of the long term.

[Jade Warshaw]

That you've committed to. Like, once she starts working, she's got a great pathway to make $70,000 and.

[Rachel Cruz]

Yeah. And then together with your husband. Yeah, y' all will be making, you know, 130,000. Yeah, that's before taxes. Like, that's amazing. So the light is coming, but it's getting to the light that I think is really key. And what decisions can we make in between? And these are hard. Sierra. I understand. Like, these aren't fun. It's not always fun, but it's getting you to a goal. Goal that you guys want together. And part of that is you still being in school. So I commend you for having a two year old and doing this. And, and I'm so sorry about the devastation in your area. We, we, we think about you guys so much, so we're praying for you. Thanks for the call.

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[Jade Warshaw]

You're listening to the Ramsey show. We help people with your life, your money, your relationships. If that's you, you want to get in on the action, you can call us up. It's a live show. The number is 888-825-5225 and we'll get you on the line. Today's question Today's Ramsey show question of the day is sponsored by Y Refi. When you're trapped in a maze of defaulted private student loan debt, it's hard to find your way out. But why Refi can offer you a lifeline where with custom refinancing based on your ability to pay and a lump sum payoff option that you could qualify after 20 qualify for after 24 months. So go to y refi.com Ramsey that's the letter y r, e f y.com/ramsey. Remember it may not be available in all states.

[Rachel Cruz]

Today's question comes from Lauren in New Mexico. I currently own three rental properties and have 30 year mortgages on two of them. You say to have 15 year mortgages because you pay it off faster. If I am putting my profits from my rental toward my principal on a 30 year mortgage and can pay it off in 15 years, is there a need to switch it to a 15 year mortgage? What's the reasoning behind the 15 year mortgage? I make more profits with a lower monthly payment which puts more money towards the principal. Well, Lauren, for starters we would say not to even have rental property if you're not able to pay cash for it. So technically speaking, I mean if you could pay it off quickly, I would probably just sell one and throw some of the equity at the other and make that a goal to, to sell it. But having, yeah, three rentals that have mortgages on them. Yeah, not, not the, not the best idea, not really the Ramsey way to do it. But for your primary home we do say a 15. Even though people, you know, this is one of those that I feel like is, is a, a slippery slope because you know, a lot of people still do the 30 and you know, whatever it is. But of course, but the thing to remember is that your intentions don't always line up with reality. So if you have the intention of paying a 30 like a 15, you know, stuff happens and you're like oh yeah, well we won't pay extra this month, we'll make sure to catch up next month. And then something else happens and you end up usually not paying it truly like, like a 30. You don't now when you're paying off your house. In the baby steps, we do find that people are paying their houses off in like 9 to 11 years.

[Jade Warshaw]

That's right.

[Rachel Cruz]

Which is amazing. So I think that 15 year fixed rate mortgage that we talk about, it just locks you in to a plan to get you out of debt faster with the guarantee that you will get, get it paid off in 15 years.

[Jade Warshaw]

It makes you accountable. And let's be, let's call a spade a spade. The truth is if you go with a 30 year, you're not paying as much. So you get more house.

[Rachel Cruz]

Yes.

[Jade Warshaw]

And I think truthfully, when people want that, they want more house. And not when you're locked into 15 though, it's like, okay, maybe suddenly I can't afford what I thought I could get.

[Rachel Cruz]

Yes.

[Jade Warshaw]

So look at the routine.

[Rachel Cruz]

And that's the thing, that's what's always interesting with houses is that you're going to qualify for a lot more and what they will give you than what you necessarily need or even what's good for you financially. So we always talk about having at least 5% to put down for a down payment, your payment being no more than 25% of your take home pay on a 15 year fixed rate, which I always say, we understand that is a very conservative formula when it comes to, to the housing situation. But just like our last caller, you guys like, you see people that get into housing situations and it, and it takes half their income or maybe one spouse chooses to stay home, but you can't because you've built your life around, you know, having a dual income and it just starts to limit your choices. The deeper you go into debt, the longer you're in debt, it just limits your life choices on what you can and can't do because it's telling you basically what to do. So that's it, Lauren.

[Jade Warshaw]

All right, that helps. Really good advice. Let's talk to Greg, he's in Biloxi, Mississippi. What's going on, Greg?

[Caller]

Hey, Jaden, Rachel. It's, it's so good to be talking to y'.

All.

I'm fangirling a little bit right now.

[Jade Warshaw]

Glad you're here.

[Caller]

So I have been listening for a little over a year but the month before I started listening, I co signed on a truck for my now ex fiance.

[Rachel Cruz]

Oh, Greg, I'm sorry.

[Caller]

Yeah, rough situation. So we had agreed once things ended that hey, you know, we can keep the loan as it is for a year because we needed to wait for the maturity date.

[Jade Warshaw]

Okay.

[Caller]

And so it's coming up on that. And just in talking to her on occasion, she most likely is not in a position to refinance it on her own, and she has said that her parents or anyone else won't help her.

[Jade Warshaw]

Good for them.

[Caller]

So I. Yeah, definitely. Just from my. From my perspective, I'm not quite sure how I can get myself out of this.

[Jade Warshaw]

Have you tried persuading her to sell it and start over fresh on her own?

[Caller]

I have. She is not completely opposed to the idea, but I don't think I can really rely on her actually following that through.

[Jade Warshaw]

Can I ask a question? And I promise it does kind of relate to this. Who broke up with who?

[Caller]

No, you're good. I ended things with her.

[Jade Warshaw]

Okay, this makes it a little stickier. It makes it stickier because this is a tie to you. This is a way for you to still be in her life. And you pulled over, Greg.

[Caller]

No. There's an alarm going off somewhere.

[Rachel Cruz]

Okay. I was like, oh, no. Are you trying getting pulled over?

[Jade Warshaw]

But my point is, like, this is a tie to you, and if it. If. If things were different, I'd say you could make the argument of like, hey, you broke things off, and I want a clean break, and I. I need to, you know, be free from this. Like, you could make that argument. But in this case, it does make it a little tough. How much is the loan for?

[Caller]

There's about 27 left on it.

[Rachel Cruz]

Okay, man. How much is it worth? Do you know?

[Caller]

I. I actually did look up the Kelley Blue Book a couple weeks ago, and it said that private party sale was tops, like, 23.

[Jade Warshaw]

Oh, gosh.

[Rachel Cruz]

And it's upside down.

[Caller]

Yeah.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Yeah, this. I think this is only going to get worse. So I would really encourage her to sell it, and I'd be strong on that. I'd say, listen, there's a reason that you can't. I mean, the math is, like, the logical reason is there's a reason you can't refinance this. And the reason is the bank has looked at your financial situation and said it's not stable. You cannot afford this on your own, which means they expect you to default, which means, I'm here for when you default. That's what that means. And I don't know. The hard part is I don't know if your relationship is there for you to even talk to her like that anymore, but that's the truth of the matter.

[Rachel Cruz]

I know, because, I mean, if you can't, you can't make her do anything. And so you really are kind of at the mercy of, of her. I'm like, you can't go in and, you know, you know, take your name off the loan in secret.

[Jade Warshaw]

Right?

[Sponsor/Announcer]

I mean, like.

[Rachel Cruz]

Yeah. So it is. So, yeah, you're in it. Yeah. You're in a tough position, Greg. And it's kind of one of those, I'm sorry, that you're gonna have to be one of the sad examples that we'll probably use this week to say when someone calls, I should, you know, my girlfriend wants me to co sign. We're gonna say, talk to Greg in Biloxi. Greg would tell you, don't do this because this is what happens.

[Caller]

My family agrees. My family agrees that this is the dumbest decision I've made my life.

[Jade Warshaw]

Oh, man.

[Rachel Cruz]

I mean, unless you can just convince her because you're a great salesman, but coming from an ex fiance, she's probably not going to want to listen to her. To your advice. I mean, broke her heart. Sorry, Greg. And now you're, you're. I mean, yeah, there's nothing you can do. So I think it's one of those stupid texts, you know, and I'm praying she doesn't default.

[Jade Warshaw]

Me too.

[Rachel Cruz]

And she just pays this and, and gets out of it. But you.

[Caller]

But that's, that's what she has been very consistent on the payment.

[Jade Warshaw]

What is the payment?

[Caller]

Oh, gosh. It's almost seven.

[Jade Warshaw]

Oh, gosh. I mean, listen, the most practical thing you can do to be ready for.

[Rachel Cruz]

This storm is if she defaults.

[Jade Warshaw]

Is if, if she defaults. And to be ready if you kind of have some money packed away on the side, because if she doesn't pay it, it reflects on you. And when it's time for you to buy a house or when it's time for you to do some of the things that you want to do, if you still have a credit score laying around, which you will because of this, it will make it bad. And as we've talked about on the show, having a bad credit score is very difficult. We talk about having a zero credit score, which is wonderful, but this will keep you from having that even if you pay off all of your other debts. So if I were in your shoes, which this is the game we like to play, I would be. Which, by the way, we don't know much about your financial situation.

[Caller]

Do you have debt I the truck, technically. And then I have about 22,000 in student loans I'm working on. I've already gotten rid of the credit card debt.

[Jade Warshaw]

I'd go gung ho on your debt. I'd work the baby steps on that. And then when I was through, I would be mindful of keeping some money stacked up.

[Rachel Cruz]

Yeah, for your emergency fund, knowing this is something you may have to do.

[Jade Warshaw]

Exactly.

[Rachel Cruz]

And I would tell her, too, Greg, you don't want to emotionally be attached anymore. Right. And this keeps you guys somewhat together in a weird state for the future. So I'm sorry.

[Jade Warshaw]

I hated that happening to you. All right, that does it for this hour of the show. Stick around. We'll be right back with you before you know it.

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[Jade Warshaw]

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[Rachel Cruz]

And the market foreign. Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm Rachel Cruz and we are going to the phones. First up, we have Donna in San Antonio. Hi, Donna. Welcome to the show.

[Caller]

Hi. Thanks for taking my question. I appreciate it.

[Rachel Cruz]

Yes, absolutely.

[Caller]

Okay. So my husband has a student loan that is currently in deferment. Been in deferment over 10 years. Prior to that, it was in default. It ballooned from 65,000 to 340,000.

[Rachel Cruz]

What? Pretty scary.

[Caller]

I know.

[Jade Warshaw]

I know.

[Caller]

There was some fraud involved. We tried to take care of it with some attorneys. We were not able to get anywhere. We're stuck with it. We got married four years ago. His situation is he's 66, close to retirement. He doesn't really have any assets, not really. No savings. I'm 57, probably going to work for another five years. I've got about 1.4 million in investment assets which are own free and clear. We both have a joint account with Charles Schwab, which has about 200,000 in it, but it's fully funded by me. And then we have two other properties in both of our names. Couple of questions. How can I navigate negotiating this balance down for him? I'm willing to pay up to 100,000 for it. And how do I protect myself?

[Jade Warshaw]

Are they private loans or federal loans?

[Caller]

So they're federal loans. They weren't. Well, I believe they're federal loans. See, I've had trouble with this. They were federal loans, and then they were consolidated. Okay, so. And from what I understand, you know, I've been to so many different places, and I keep hitting a brick wall. It's like nobody can really give me the right answers. I've been told I can't negotiate.

[Jade Warshaw]

If they're federal, you can't negotiate. If they're private, you can. But if the whole lump of them. If that whole lump is federal, you owe what you owe.

[Caller]

So what. What's his best route? Does he just keep deferring it? No, I mean, he will never be able to pay these off. You know, he'll never be able to pay it.

[Jade Warshaw]

So what. Tell me about the properties, because I. I'm gonna. Here. I'll tell you what Rachel and I are gonna do, and then we'll explain it. We're gonna approach this as any married couple would who is dedicated their lives to each other and has decided that they're one, meaning that they're one in life, in money, and all of those things. And then we can go back and trace it back if we need to. But let's talk about these properties, because what I think is somewhere in the assets between the two of you is the money to pay this off. I'm just.

[Caller]

There's. Yeah, there's definitely money. It's. I built this. I mean, we've only been married four years. All of those assets are mine. I mean, I've done what I needed to do, and I've built.

[Rachel Cruz]

How many marriages have you guys had in the past?

[Caller]

Donna, he's been married once before, and so have I.

[Rachel Cruz]

Okay, so it's both second marriages.

[Jade Warshaw]

Okay.

[Rachel Cruz]

Did you do a prenup at all?

[Caller]

No, we didn't. We have our wills, but we didn't do a prenup.

[Rachel Cruz]

Now, okay.

[Jade Warshaw]

What. Can I ask a little bit about that? So I'm hearing you talk, and it sounds like you very much want to protect the wealth that you built, but you didn't sign a prenup, which makes me wonder about that. Like, how did you. How did you view that?

[Caller]

I didn't realize how, you know, I don't know. What can I say? We're soulmates.

[Jade Warshaw]

Okay, listen, that's good to know.

[Caller]

We're soulmates. And, you know, he's a wonderful man, and I'm not concerned about really protecting my assets from him. I'm more concerned about protecting my assets against somebody Coming in and swooping in. A lender coming in and taking.

[Jade Warshaw]

Got it. Okay, so in that case, I loved hearing you say that because it sounded at first like when you said, oh, I'm only willing to put 100,000 towards this. It sounded like you were trying to keep your assets from him. Right. Like you didn't want to spend too much on his debt. That's the way it sounded at first, but now it sounds like that's not the issue. And if that's the case, can you tell us about these properties? Because the money might be there to get free and clear of this.

[Caller]

It's all real estate, basically. And again, they're all owned free and clear.

[Jade Warshaw]

Right.

[Rachel Cruz]

How much, how much are each of the properties?

[Caller]

How much am I into the properties? Probably, you know, five or six hundred thousand.

[Jade Warshaw]

So tell us.

[Caller]

Probably around five or six hundred.

[Jade Warshaw]

Tell us Property one. What's Property one worth?

[Caller]

So I've got a condo which is probably worth around 200,000.

[Rachel Cruz]

Okay.

[Caller]

I've got another house which is around 250. I've got another condo which is probably also around 200,000.

[Jade Warshaw]

Are they all owned free and clear?

[Caller]

Yes.

[Rachel Cruz]

Okay, good for you. Yeah. Great. Donna, did you know about his debt going into the marriage?

[Caller]

I didn't. I knew. He. What happened is his, his wife, his previous wife handled all the finances. She was a stay at home. She did some funky stuff with their finances. And he thought his student loans were paid off. He didn't realize until suddenly he didn't get a tax refund one year that he was in default. He didn't even know.

[Jade Warshaw]

Got it.

[Caller]

So it really was like a big shock. And then, you know, he just. Sometimes men just ignore things. Yeah, it was. I think it was too emotionally overwhelming for him and he pretty much just put it to the side. So I knew there was something I didn't realize.

[Rachel Cruz]

How many years did he put it to the.

[Caller]

Probably about 13 years total.

[Rachel Cruz]

Okay, so there's, there's enough of a. That the shock has worn off and then we can address reality that he chose not to though.

[Caller]

Right.

[Jade Warshaw]

Okay, well, now he's got to bother you, right? Does that bother you? Is that.

[Caller]

Of course it does.

[Rachel Cruz]

Okay.

[Caller]

Of course it does. Yeah, yeah, sure. But right now I'm committed to the relationship. I'm committed to my husband. And I want to figure out.

[Rachel Cruz]

And you guys are in your what, 50.

[Jade Warshaw]

Did you say you're 57 and 66?

[Caller]

Yeah, yeah. He's 66. 57.

[Rachel Cruz]

Okay. And he has. Why does he have no. What's he been doing like, like with retirement and all that?

[Caller]

He pretty much gave everything to her in the divorce. Sort of one of those situations.

[Jade Warshaw]

He, he, it was like no contest. Just give her what she wants.

[Caller]

Give her what she wants. Yeah. Yeah.

[Rachel Cruz]

Is he working?

[Caller]

He works for me, actually. I have a business.

[Rachel Cruz]

Okay.

[Caller]

He does work for me. Yeah.

[Jade Warshaw]

Okay.

[Rachel Cruz]

How much is he making?

[Caller]

We just have him making something like around 50,000. So we've been keeping it low. You know, we do, we do sort of, you know. W2.is real estate your business?

[Jade Warshaw]

Is that your business?

[Caller]

Yeah.

[Jade Warshaw]

Okay.

[Caller]

Yeah, yeah.

[Jade Warshaw]

So there's, I hear two things going on here. I think you're committed to this guy. I, you know, great. I think that you need to reach over and probably sell one of these condos and then go into the joint funds and pay this thing off. That's probably the choice that I would make. I think, you guys, I'm worried that, and I'm, I'm going to say this ever so delicately. There's an, there's a balance of power here that is. Feels off.

[Caller]

Yeah.

[Jade Warshaw]

And I think that if you don't address certain things, it's going to cause issues down the line. And I think you need to sit with accounts.

[Caller]

You're saying.

[Jade Warshaw]

You see what I'm saying?

[Caller]

I think you understand that completely.

[Jade Warshaw]

You need to sit with somebody and work through this because it almost feels like you're kind of just taking care of this guy. And it shouldn't feel like that. You should feel like you're in a marriage where equal people are really contributing whatever it is they're going to contribute. But you should feel good about it.

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[Rachel Cruz]

Welcome back to the Ramsey Show. Up next, we have Brent in Cincinnati, Ohio. Hey, Brent. Welcome to the show.

[Caller]

Hi, Rachel.

[Rachel Cruz]

Hello. How can we help?

[Caller]

So I'm wondering if I'm able to purchase a. A car for my wife. We've been leasing to own for the three years and upcoming December, we can purchase it for 19,000. The same car is valued at 23,000.

[Jade Warshaw]

Okay, so you've been leasing it for three years. What was it worth when you started? I'm just wondering how much it's depreciated.

[Caller]

How much? No, how much was it worth? 28,000.

[Jade Warshaw]

Okay. Okay. And now it's worth 19. But you're saying you've seen it other places for 23. Is that what you're telling me?

[Caller]

Yes. With the same mileage, the same year. Oh, it looks like a good deal.

[Jade Warshaw]

Yeah. Do you have the money and do you like the car?

[Caller]

We like the car, but we don't have the money. So we'd be getting a loan through my credit union.

[Jade Warshaw]

Oh, and what's the alternative? You just give it up?

[Caller]

Yes.

[Jade Warshaw]

Do you have any.

[Caller]

My wife's very attached to the vehicle and doesn't really want to consider any cheaper options.

[Jade Warshaw]

Yeah, listen, I can understand that. Go ahead.

[Rachel Cruz]

Well, yeah. Why is she attached to it? She just likes it a lot.

[Caller]

She likes it a lot.

[Rachel Cruz]

Okay. Well, the fact that she's not going to be able to consider. She's sitting there with you, Brent. Tell her hi for us.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

What's her name?

[Caller]

Elizabeth.

[Jade Warshaw]

Hey, Elizabeth.

[Rachel Cruz]

Elizabeth. So, yeah, I mean, when you put yourself in a position, when you purchase something and say, well, I'm just not. I. I don't want to look at anything cheaper. You've kind of already made your decision. I mean, if you guys don't have the money and you don't look anything cheaper, I mean, I guess the only thing that you guys have decided at that point is, yeah, you're going to take a loan out and buy the car. We would advise you differently. And so you called the show. So we'll give you our advice. I don't know if you're going to want to take it because what you realize is you've been. You've been basically renting this car for.

[Jade Warshaw]

Three years in the most expensive way possible.

[Rachel Cruz]

In the most expensive way. Yeah. And I know, you know, you can't really tell the interest rate on A lease car. But when people, you know, actually ratio it out, it's, it's high, it's usually more expensive than if you went, got a traditional car loan. So then you're going to take a $19,000 loan, pay interest on that, and then we're going to look up in four to five years and this $19,000 car is going to go down to probably $10,000 or $12,000 in value. So when it comes to cars, it is one of the places that financially speaking, I mean, it's kind of one of the dumbest debts you can, you can get into from a financial perspective because again, you're borrowing money and paying more on that borrowed money because the interest on an asset that's going down in value versus like a house, a mortgage. Right. You take out a mortgage, you do pay interest on that loan, but the value of that home is going up at the same time. So the car itself is not a wise purchase to make when you don't have cash for it. So my next question to you guys would be, do you have any cash available to you?

[Caller]

Do we have. No, we don't try to get over some credit card debt.

[Rachel Cruz]

Okay, good. How much, how much debt do you guys have?

[Caller]

We have 4,000 on the credit card and then we have a few monthly payments.

[Rachel Cruz]

What are those?

[Caller]

We're still, we're paying off our wedding rings, which we have 7,000 left over.

[Rachel Cruz]

Okay.

[Caller]

And then we have some, a personal loan, we're paying back my parents, which we owe about 2500 left.

[Rachel Cruz]

Okay.

[Caller]

And I'm doing 500 every paycheck.

[Rachel Cruz]

Okay.

[Caller]

So about towards the end of January, the 500amonth will clear up.

[Rachel Cruz]

Okay. How much you guys make a year?

[Caller]

Close to 40,000 a year combined. Yes.

[Rachel Cruz]

Is, are you both working?

[Caller]

My wife is looking at getting a new job that could make more money soon, but we just don't have the money yet and I don't want to make decisions on. We'll have more money later. Yeah, I want to make the decision on what we have now.

[Rachel Cruz]

Absolutely. Which is very wise. Very, very wise. So yeah, a forty thousand dollar income. There's no way I would take a nineteen thousand dollars loan for a car. You can't afford it.

[Jade Warshaw]

Do you guys have kids yet?

[Caller]

No, not yet.

[Jade Warshaw]

Listen, I'm going to throw something wild out here and roll it over in your minds and in your hearts tonight, but she's not working yet. You don't have children. When it comes time for this lease, like you let it go. But if you have to be a one car family for a couple of months while you save up. What's the harm in that? Just a thought. Yeah, I suggest that my husband and I did that while we were trying to get out of debt. We got rid of one of our vehicles and we were upside down, but we got a small loan for it to get out of it. And then we had one, just our single car. We paid it off and then we actually found that it was doable for us for quite a while and we stayed that way. And then when it was ready time for us to have a second car, we bought it in cash. And for you guys, in this season of your life, that actually might work out better for you than a lot of other couples because she's not really working yet.

[Rachel Cruz]

And I'm going to say this, Brent, and I'm going to be very. As kind and fun as Rachel is, this comes through. But the what the life you guys just described to us from a financial perspective only is so normal.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

You know, you have a personal loan to the parents for. I'm not sure why. You got wedding rings. You didn't have the money, so you guys took out a loan. You have some credit card debt. You have a car lease. Like this is. You guys are. Y' all are the normal Americans out there. But the problem is, Brett, normal is broken. Normal is 78% of Americans today are living paycheck to paycheck, meaning if you miss a paycheck, you don't have enough to cover your bills. So if you guys decide that you want to continue to live normally, then what you guys have have so far decided is that. And normal would be to go get, just keep the $19,000 car because you like it. That is normal. And you will have normal results because of it. But what we encourage people is to flip all of that onto their head and actually say, what is the weirdest thing we can do? Because if I get the results of normal, which is paycheck to paycheck, living and not being able to build wealth and not be able to invest or save for the future or have any amount of money in savings, like, I don't want to be normal, that's not where I want to be. And if you guys look at each other tonight and say, we don't want to be that, we want to be people that have no debt. We have an emergency fund. We're actually funding some retirement for the future. We have a house that we can afford. It doesn't stress us out. We have margin in our budget, like this life that can be created, Brett, is possible, totally possible. But you can't get there if you keep doing normal things. So what Jade's saying is a one car family for a couple that doesn't have kids, is that inconvenient?

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Is that weird? Yeah. But you know what? You don't have a car payment because that car payment on the nineteen thousand dollar car, it's going to be six hundred that you guys don't have. Like, so you have to make different decisions if you want different results, Brett. And that's gonna mean not taking out a loan for a car. For you guys, the reality is a one car family. It's saying goodbye to my emotions, saying goodbye to what I want and what I love and all the things that got me to this place. And you put all that aside and you guys are like, we're adults. Yeah, we're adults and we're gonna make adult like decisions. And we don't have the money. We can't afford to. This car. You can't afford this car, Brett. At $40,000, you can't afford half of your annual income going to the value of a car like that. It's not good. That's not wise. And, and I would be working like crazy to get your income up. And, and I would start working to get out of debt. I mean, you guys could get all this paid off. Your debt's not crazy. I mean, you know, 2500, 4000, like, you guys can get this cleaned up really fast if you just say we're going to be weird and we're going to work 60 hours a week because we don't have kids and we're going to take side hustles. We're going to drive Uber. Right?

[Jade Warshaw]

I mean, like, here's Brent. Here, let me put this in perspective. Here's a couple of interesting statistics about, about cars. Because I want you to never go and have a car payment again. Number one, Rachel just said 78% of the people living paycheck to paycheck. Right. 85% of people who buy, who get a car, take out a loan or at least to get it. And I think that's a very interesting correlation.

[Rachel Cruz]

Almost everybody.

[Jade Warshaw]

Almost everybody, which is almost the same percentage of people living paycheck to paycheck.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

And for most people, that car payment is about $525 a month, which is very close to where you guys were at.

[Rachel Cruz]

And I mean, if you invested that instead of give it to a car company, what would that be?

[Jade Warshaw]

Well, think about it. Most new car payments are over a term of six years. If you had listened to us and invested that money over the last six years, you'd have $85,000 instead of a car debt that's gone down in value. And so.

[Rachel Cruz]

Be weird, Brent. Be weird.

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[Jade Warshaw]

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[Rachel Cruz]

We're always thankful for the listeners of the show, the people that view it on YouTube and watch us. But one of the best ways to help spread the word is to share the show with the people that you know. Your friends, your family, even on your social media feeds, you know, even subscribing, leaving reviews, all that helps. Because with the algorithms of today, when you're able to get the show in front of people that may not know about it, just like our last caller, he just said he just found us, like two days ago. On YouTube. Yeah, or on Facebook. Is that what it was said? And yeah, and it's just. It's great because we want to be able to help people. That's our goal for the show. And the more people we can help, the better we're doing at our jobs is the way we look at it. So thank you again, you guys, for subscribing and sharing. We really, really appreciate it. All right, up next, we have Wanda in Los Angeles. Hey, Wanda. Welcome to the show.

[Caller]

Hi. Thank you so much. It's really a pleasure to be on the show. Thank you for taking my call. So I do apologize if I'm hyperverbal. It's the excitement and the coffee couple together.

[Rachel Cruz]

You're good, Wanda. You're great. How can we help?

[Caller]

So I recently got a divorce and I owe my husband $50,000. And I'm not quite sure where to take the money from or borrow the from for the 450,000. I don't have any money in my savings. I owe 25,000 on my car, 12,000 to my 401k, and my other expense is my home, and My mortgage is 2470amonth. I looked into refinance and I really don't want to refinance my house because my interest rate on my house is.

Two and a quarter.

[Rachel Cruz]

Yeah.

[Caller]

And so I've been looking at other like HELOC personal loans, but personal loan is like 12%, the HELOC is 10% and I just don't know.

[Rachel Cruz]

Okay, so 50,000.

[Jade Warshaw]

Is it because of the house? Like, are you supposed to give him the equity?

[Caller]

Yes, I'm supposed to give him the equity out of the house. Originally I was supposed to give him 150,000, but he knows that he didn't put any money into the house or anything like that. So he settled and said, I'll take 50,000. So I'm just trying to figure out the best course to give him the 50,000. Did take on a second job. I've been working the second job now for about three months. I haven't received any monies for it because I just haven't turned in the invoices because what's the time frame that.

[Jade Warshaw]

You owe the 50k?

[Caller]

It's supposed to be because we went back to court. So it's 30 days after the court ruling. And so, and I got the court ruling in the mail two weeks ago. So I have. Yeah, yeah.

[Jade Warshaw]

So in two, basically in two to three weeks it's due.

[Caller]

Yes.

[Jade Warshaw]

Okay, so let me kind of set the stage for this right quick. Is his name on the mortgage? Like is he on the deed or the title of the house?

[Rachel Cruz]

It is.

[Jade Warshaw]

So typically, typically what would happen if you're divorced, you would do a refinance to get his name off of it and you would do a cash out refinance so that you could also pull the 50k out, give him his money, and now you're free and clear from that. But I see why you don't want to do that because of the interest rate. But I now double check this because I'm not sure, but I feel like you can when you refinance. You don't necessarily have to refinance the. The entire mortgage.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

But just the amount that you're a Portion of it? Yes.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

And so a portion of it would be at the old interest rate and a portion of it would be at.

[Rachel Cruz]

The new interest rates. Yeah. Have you talked to, have you talked to your lawyer, Wanda, about different options when it. Because considering it's because of the house and his name is on it, so you are going to have to get his name off the home. Yeah, Right.

[Caller]

So what I was advised was, I actually talked to the accountant and so what I was advised to do was to do a quick deed to take his name off the title and if he agrees to stay on the loan, let his name stay on the loan. Because if I ask them to take his name off the loan, they may make me refinance anyways and then I.

Lose the two and a quarter.

And so he said he was agreeable with his name being on the loan and he would just quick deed the home into my name.

[Rachel Cruz]

Yeah, yeah. Quick deed is definitely a great option when it comes to the situation. Yeah. I mean, I mean, and we never tell people to go and take on debt, but there is a point that you're, you're going to be owed this from a legal standpoint. And so you, I mean, you have to give that money. And Wanda, you don't have it right now. And so I don't want to see you take equity out of your home and get into that mess of, of a HELOC or anything like that. So it may just have to be a personal loan.

[Caller]

Okay. Even though the interest rate for the.

Personal loans is just through the roof.

[Rachel Cruz]

Well, my, I mean, from the court of law, you have to give this money. So either Wanda, you, you sell your home and you know what I mean, take the, take the equity and pay him what he's due and you have to go find a new situation. Are you able to sustain the home that you're in?

[Caller]

Oh, most definitely. Most definitely. Definitely. Yeah. The, the house is now worth almost 700, 000. When we purchased the house, it was at 391. And so I'm.

[Rachel Cruz]

How much do you owe on it? How much do you owe on it?

[Caller]

360.

[Rachel Cruz]

Okay.

[Caller]

And in California, I can't buy another house at 391 and not in the.

Area that I live in anyway.

[Rachel Cruz]

Sure, sure. What. How much do you make? How much are you making?

[Caller]

I make 188,000 a year.

[Rachel Cruz]

Good for you, Wanda. And you're bringing, how much are you bringing home? After taxes and insurance and everything per month, what's your take home pay?

[Caller]

A little over 6,000.

[Rachel Cruz]

Okay. Yeah. I mean. And your mortgage payment's 2,000. Yeah. So you're in.

[Jade Warshaw]

But.

[Caller]

And that's the reason why I got a second job, too, because whatever I do, I want to chop it down with the second job. Received any. Because I don't know which way to.

[Jade Warshaw]

Go with that yet.

[Rachel Cruz]

100%.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

I mean, I mean, I mean, you're, you're, you're kind of stuck between, you know, a hard place. I don't want you to make a bad decision with your home. I think that would be unwise. So it's not this idea that, like, you know, and it's one thing if you couldn't afford the payment on your income, but you're able to sustain that, which is wonderful. Great. But. Yeah, I would. I would.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Do the.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Do the quick deed. I would again, ask. Ask the accountant again, wrap back around and just ask what Jade was talking about. And if there's a way to take a portion of it where you're able to pay him out of it and, and the entire loan is not then, you know, subject to the new interest rates, because that would be. That. That would not be smart.

[Jade Warshaw]

And it's a blessing that he dropped from 150 to 50,000. Like, that's a big blessing.

[Rachel Cruz]

Yep. So. So, Wanda, I mean, I'm looking at this. So let's just say you have, you. You have $50,000 in debt because of the divorce. You got a $25,000 car, and you got a $12,000 401k debts. Seven, eight. I mean, that's.

[Sponsor/Announcer]

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[Rachel Cruz]

That's $87,000. You make 188,000. I want you to pay this off in 18 months, Wanda.

[Caller]

Yeah. That's why I got a second job.

[Rachel Cruz]

Yeah. Which I'm so proud of you. Seriously.

[Caller]

Yeah.

[Rachel Cruz]

And that's the thing, is, you know that when you. When you look at this high income, I'm like, man, this is. And I know you're in Southern California, so it doesn't go as far as it would in Kansas City or something. I get it. But, man, you. You have a lot on your side, Wanda.

[Caller]

But.

[Rachel Cruz]

But from this point forward, I want you to draw that line in the sand and say no more. I'm not doing car payments. We're not doing credit cards. We're not, you know, borrowing our 401k. I'm living on what I make. I'm going to be, you know, funding retirement. I mean, why is. Because, I mean, how old are you, Wanda?

[Caller]

55.

[Rachel Cruz]

55. Yeah.

[Caller]

So 55 this year.

[Rachel Cruz]

Right. So, yeah. Here in five to 10 years, wanting to retire, you know, and do something with your life. And you're going to be able to make a lot of progress really quickly, which I'm so excited for you. So congratulations. I'm so sorry that with the divorce and everything that's kind of brought you to this point. That's always heartbreaking and grief in and of itself, that's so hard. But you have a lot of great change ahead and a lot of things that. Yeah. That you can do and make a big impact.

[Jade Warshaw]

Thank goodness that he was a good guy and was like, I know I didn't put any money into this house.

[Rachel Cruz]

Right. It could have been 150.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

I mean, that's. I think that's the really difficult part about one of the many difficult parts about divorces. There's all these assets and it's like somebody gets to keep the house, but if you've been living in that house together, there's also a portion of it that goes to the other spouse. And so how do they get their money? And so that's. Right. That's one of the frustrating things. And I know, like during these times where interest rates, it's like if I had it at, you know, 2.3%, you don't want to refinance in order to with these rates. And so I think that's very painful.

[Rachel Cruz]

Yes, for sure. Yep. And again, it's one of these things that to tackle the debt snowball method. And even looking at the car, I mean, she's still, she can pay off her car in 1812-18 months of our, you know, buffer. So she can keep the car, pay it off. It's not an outrageous, you know, different amount considering her income, but she never.

[Jade Warshaw]

Needs to borrow from her 401k ever again. No, Wanda, you hear me?

[Rachel Cruz]

Thanks for calling in. This is the Ramsey Show. The last thing you need this holiday.

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That's Casper.com Ramsey promo code Ramsey exclusions Appreciate. Buying or selling your home. It's a really big deal, and you want an expert in your corner fighting for you to get the best deal and the best price. Honestly, it's probably your largest asset that you're ever gonna buy or sell. So you want this to be a really smooth process. And the Ramsey trusted program is the only way to find a top agent that you can trust who will make sure that your home is a blessing and not a burden. And it's easy because you can compare agent profiles, interview them, and choose the right one that you want to work for you. So find a local trusted real estate pro for [e-mail] agent or click the link in the description. If you are listening to this on podcast or watching on YouTube. We mentioned in an earlier segment, Jade, that you know about college and school and all of it, and it is Teacher Financial Literacy Month, or Teacher Appreciation Month and Financial Literacy Month. And we. We just appreciate teachers around here. I know Jade and I, we both have kids in school. And when you have teachers who are part of your own story from being in school and now if you have kids that are in school, they're just such a gift. Like, these teachers are just absolutely incredible. We love them, so we do want to honor them. So make sure to enter our teacher appreciation [e-mail] teacher yes. And we want to celebrate you, so make sure to check that out. Teachers. All right, let's go to Sarah in Philadelphia. Hi, Sarah. Welcome to the show.

[Caller]

Hi. Thanks for having me.

[Rachel Cruz]

Absolutely. How can we help?

[Caller]

Okay, so just really quick. So when I turned 18, I got married to a man who's about 14 years older than me. We ended up getting a divorce. It was, like, a really controlling situation. But in the midst, I did get pregnant right as soon as I got married. So I have a baby now. She's gonna be five months in May. And so he doesn't help financially. I did stay home after I had the baby, so I was leaning on him financially. And even when we were together, I didn't go to school. So the good part is I don't have any debt or anything. But the bad part is, like, I don't have, like, a career path because I went right into being, like, wife and mother and everything. And now I just, like, need help with, like.

[Rachel Cruz]

Yeah, do you. Where is your. Your parents, your family situation through all of this from when you got married to now?

[Caller]

So we got married, and, like, my parents were not super happy with the idea of me getting married, not because they didn't want me getting married young.

[Rachel Cruz]

I hear the circumstances. Yeah. And they prob. I picked up some things around town that they probably didn't like being a 34 year old, you know.

[Caller]

Exactly. And then so we ended up. We ended up getting a divorce. So I'm staying at my parents now because he said staying at a right house.

[Rachel Cruz]

Okay. Wow. Wow.

[Caller]

Yeah.

[Jade Warshaw]

I'm sorry.

[Caller]

Yeah. And he. It's okay. Actually, his family has been. Not his family. His brother and his brother's wife have been great throughout this. They let me stay in their house for two weeks without like charging me anything. They were super helpful when everything happened. They were like, listen, whatever you need, we're here for you. Like his brother will. His brother's wife will call me every day. His brother was always like, hey, if you need any help with a baby, like, we're here.

[Jade Warshaw]

That's great. And you need that community right now. Like if you have that to depend on, I would. Because the truth is, if you are going to get out of this, it's going to require you working some hours, like working a full time job probably to support your family. And childcare is going to be a huge piece of this. So the question then becomes is what can you do for money? Right.

[Caller]

Yeah. So thankfully I'm staying home with my mom. Like my parents are thankfully well off. So like it's a place that I can stay and I don't have to worry about like, well, what about the bills? What about, you know, my parents are like okay with all that stuff. It's just like, I just don't know where to go from here.

[Jade Warshaw]

What?

[Caller]

No, it's not like I'm in any danger right now. I just don't know.

[Rachel Cruz]

Yeah. The next steps for you, right. In life. Yeah. Turning. Because you'll be. Yep. Turning 20 and all of it. Okay. So I just. Because of what you've gone through, Sarah, from a divorce standpoint, having a child. And I never want to minimize someone because of their age. But I am going to say because you're 19, I mean like you're a kid. Right. You're still a teenager. Technically 19. Right. So.

[Caller]

Yeah.

[Rachel Cruz]

So. So the, all of those factors, I do want to give you so much grace. Like you're still a teenager, you're still figuring out how the world works, let alone the responsibility and the events that you've walked through, through a divorce already. Right. So like just. We have a lot of time here. Sarah, there is no. I. I do not feel like this is a rushed situation. There's a lot. A lot of grace here.

[Caller]

I feel like I'm, like, sliding down. You're not like a hill, you know?

[Rachel Cruz]

Oh, yes. Yeah. If you feel probably out of control, so I understand that. Yes. But you're not sliding down in an un. Responsible way, financially or something. Right. You're. You're fine. Okay. So I just want you to.

[Caller]

No, yeah. Like, I have. I have no debt. If I have a lot on credit cards, it's like $40. Like, I have no debt. I have money saved up. I don't know what to do.

[Rachel Cruz]

Yep. Is the divorce final? Is all of that done? Any legal bills or anything outstanding there? So that's finished. And does he have any responsibility, like, from. From the divorce? Any child support coming in? Any file still? I'm sorry.

[Jade Warshaw]

Oh, okay. She has to file check for child support.

[Caller]

So this is only. Yeah. This has only been a month. I have to file still and file.

[Rachel Cruz]

For divorce or child support.

[Caller]

Yeah, file for divorce.

[Rachel Cruz]

Okay. So it's not even. Okay. Yeah.

[Jade Warshaw]

Okay. All right.

[Caller]

Yeah. So, yeah, that's why I'm like. I feel like everything is.

[Rachel Cruz]

Do you have a good lawyer? Do you. Do you have someone.

[Caller]

I don't.

[Rachel Cruz]

Legal representation. Okay. So that would be step one. That's gonna be. Step one is to find someone in your area who's. Who's. Who's a great divorce lawyer. I mean, you're gonna want somebody. They're supporting you and representing you. So I would. Honestly, Sarah, I would make that. Step one is to find that person. Because when you file, all this is about to. It's about to snowball into a lot of things, and you're gonna. Probably. You or your parents will be paying for some of this too. So that would be my first goal. Find somebody and then figure out. Okay, from a money standpoint, how is this working? Yeah. How much are we gonna have to have? Because that's gonna allow you to know where.

[Caller]

He hasn't helped with the baby since she was born.

[Jade Warshaw]

And he might. He might even while it'll probably take a court order for him, too, and even still, he might not. And so for you, I think.

[Caller]

Yeah, I'm just trying to figure out, like, what I do without, Like, I'm trying not to depend on him at all, because I know.

[Jade Warshaw]

Well, don't depend on him. Don't depend on him right now. What. What Rachel says, right. First step, you get the divorce lawyer. Second step, you sit down with mom and dad and say, okay, we're. We. We're getting the divorce lawyer. How do we pay for this? And find out what help you have and what help you don't have. And in that same conversation that's also a good time to figure out, okay, mom and dad like this thing is happening, I don't live with him anymore. And kind of figure out what, create a plan and a vision for the future, right? It's how long can I stay here? What's that gotta look like? And guys, everybody set really clear expectations of what that means. Do I do, Can I get stay here for a year? Can I stay here for it and really talk this through? Because then when you know what the plan is, you'll feel better and then you'll know what you can actually focus on. If you know that you have 12 months and then at the 12 month point your parents expect you to either start paying some sort of rent or I don't know what you'll decide, but then that will inform, okay, what do I need do? What do I need to do next?

[Rachel Cruz]

Yeah, and I would say too, you know, because we always do talk about that expectation, like what Jed stuff Jade saying. And in this case, Sarah, you know, maybe that expectation is dependent upon your next step and how long the divorce takes. It may even be of if you need to go back to school and while you're in school you can stay with them. Right. So it's kind of mapping out. And again, this is not in a rush, Sarah, for you. I really don't feel like you have to do all of this tonight by any means. But this is kind of your next big steps is finding the lawyer, filing, starting that process and then in the meantime, because it's good for you, Sarah, to be thinking through what does my future look like to Jade's point. So what, what is the next steps? What does it look like? And just paint a broad stroke of like, okay, if I'm 23, what does it look like for me to self sustain.

[Jade Warshaw]

That's right.

[Rachel Cruz]

To pay rents, all that. Do I need a college degree to do that? Do I love, you know, accounting and I probably need to go get, you know, you know, a degree in that.

[Caller]

I actually worked as like a secretary for level construction businesses. I like doing that.

[Rachel Cruz]

Okay, so admin. Yeah, administration is probably really high up in your skill set. Yes. So finding those kind of things and then backing out from there and say, okay, you know, would I be able just to plug in with one or two businesses around to be able just to start working, you know, maybe in the next six months and that's great. Or do I need to go back to school? Right. And then with your parents being that safety net for you right now, how much are they willing to be a safe financially for you right now? And from a time housing perspective, like what Jade is saying. But Sarah, stay on the line. I'm going to get you Ken Coleman's book Find the Work youk're Wired to do, because that'll help in that. In that mindset. And I think it could just be refreshing to you to have a level of grasp and control over your future. But I am so sorry about all of this and we just pray that it's a smooth process for you from here on out. Thanks for the. Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm Rachel Cruz with Jade Warshaw and we're going to Gabrielle in Los Angeles, California. Hi, Gabrielle. Welcome to the show.

[Caller]

Hello, Jade. Hello, Rachel.

It's Gabriel. Sorry.

[Rachel Cruz]

Oh, Gabriel. Gosh, I'm sorry. My bad. Thank you, Gabriel, for the, for the fix. How can we help?

[Caller]

All right, I was calling on behalf of my mom. She's 72, she's a widow who never remarried. Currently she's retired. She's active in her church, and she has a home that's almost paid off. It doesn't include taxes and insurance, but lately she's been asking me for money. It started off small, but it's starting to escalate. How can I help her? Protect her being independent, but also set up her finances wisely for the future without becoming dependent on me or my siblings?

[Rachel Cruz]

Yeah, for sure. How old are you?

[Caller]

I'm 40.

[Rachel Cruz]

You're 40. Okay. And her house is almost paid off. Is she still working?

[Caller]

She's not.

[Rachel Cruz]

Okay, so she's retired. Is she. Do you know, do you have any idea numbers of what's in her retirement she's currently receiving?

[Caller]

As far as her retirement savings, she does. I believe she's exhausted them. So she's currently the only income coming in is Social Security.

[Jade Warshaw]

Do you know what that is?

[Caller]

I believe it was like 1100, 1300.

[Jade Warshaw]

Wow. And do you know. Do you know what her mortgage is and what she has left on the mortgage in full?

[Caller]

So the mortgage currently outstanding balance is around 100k.

[Jade Warshaw]

Okay.

[Caller]

And then the mortgage payment is around, I'd say 1450.

[Jade Warshaw]

Oh, gosh. Okay. Well, yeah.

[Rachel Cruz]

So how is she paying for everything right now?

[Caller]

I have my oldest sister who's living with her and I believe they're splitting the cost of the mortgage.

[Rachel Cruz]

Okay, so they're half and half. Okay. So it's, that's 700 and then everything else, I mean, is she able to pay for. Is your sister splitting other bills? Do you know, like electricity, water, all of that?

[Caller]

Yeah. So from what I understand is that my other siblings, she approaches each sibling individually and asks for help, whether it's covering a bill or a few dollars here and there.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

And it's for real needs. It's not for. Yeah.

[Rachel Cruz]

Is she able bodied to go to work? Is she able to work?

[Caller]

She is able bodied. However, she hasn't worked in some time.

[Rachel Cruz]

Yeah. That's so hard. I mean the reality is she either. Yeah. I mean, if she has no, if she has no money and all she's getting is Social Security, it's not enough. To your point, when taxes are due for property, I mean, when she pays off the house, you know she's gonna have to pay for property tax and all that.

[Jade Warshaw]

What's the home worth? I'm just curious, if she were to sell it, if she were to sell it, what would it be worth?

[Caller]

Conservatively, probably about 1.1 million. It's a five bedroom, three bath. As far as her renting out the rooms, that's also been thrown around. But I hate that for her require me involving myself.

[Rachel Cruz]

I'm just wondering about, is there like a. Go ahead.

[Jade Warshaw]

I'm just wondering because my head is that she's 72, she's still fairly young and she's in good health. She could live till 92. Right. So in my mind, I, as in my mind, I look at $1 million that she stands to take away from this and I go, okay, we can throw a decent amount and invest it and start that fund going and then maybe she can buy a condo for, you know, 250 or 300. I mean, you're in Los Angeles. I don't know what's there, what's possible. Can she buy something that's very small just for her and then your sister goes and does her own thing? Because I'm also thinking what happens if the sister moves out and gets married or moves on in life? Right. So there's a lot of variables here. I'd love for her to get some hands on that money, get some of it invested and get some of it in a smaller, modest living space for her.

[Caller]

Yeah, I think that's, that's what I envisioned for her. I just don't know where to start. I think if I do get the ball rolling, I'm, I'm seeing that through start to finish.

[Jade Warshaw]

Yeah.

[Caller]

So where would I start.

[Jade Warshaw]

Well, I would start with, is everybody in Los Angeles like your whole family or do you have family that lives in less expensive areas of the country?

[Caller]

No, we're all basically based out of the Los Angeles area.

[Rachel Cruz]

Okay. Have you looked at or would, you know, price ranges of, again, a very modest one bedroom condo that she could purchase.

[Caller]

One bedroom, one bath condo. Purchase outright possibly in the areas that we're in, like around, oh, outskirts.

[Jade Warshaw]

Well, yeah, because she's got to be able to afford it.

[Caller]

400.

[Rachel Cruz]

400. Okay.

[Jade Warshaw]

Okay. So then she could invest 500, you know.

[Rachel Cruz]

Yeah, I'm not mad at that. And get that ball rolling. And then again, if she's able to not pull from those investments and maybe for just three years, work somewhere just to pay just the rent, you know, just mortgage. I'm sorry, not mortgage. Hopefully it's paid for. Yeah, taxes, taxes, you know, lights, water, food, and just not touch that money as long as possible and let it grow and then live off of that. Because it's either going to be that or, or you guys as a, as grown kid adults all have to say, okay, mom's not going to be able to afford this long term. Are we going to be willing to support her in it? So that would be, have to be a conversation that you guys have.

[Jade Warshaw]

Will she sell? Do you, I mean, if, if you imagine yourself bringing this up to her, what does that look like?

[Caller]

The last time that I brought up the conversation to her, it was emotional. Yeah, for me it's pretty straightforward. I mean, the way that we're talking right now is the way that I talk with her and you know, she's open to it, but again, she kind of pushes the work onto me, so.

[Rachel Cruz]

Yeah.

[Caller]

And so do my siblings.

[Rachel Cruz]

Do they kind of look to you, your sisters too, to say like, what do you think?

[Caller]

No, they don't have an opinion as far as what she should do. They feel that, you know, it's our home that we grew up in and that she should hold on to it. And she only got such and such ways to go.

[Jade Warshaw]

Listen, there's no, there's no getting around the fact that this is emotional. Like I'm, I'm telling people all the time that plays such a factor in how we manage the money. But if we look at the numbers, the math is not emotional. She doesn't have any money, she doesn't have anything. And she's healthy. She has a lot of years ahead of her. So she's got to get to the point where the comfort, the discomfort of staying the same is more uncomfortable than changing. Right. And that's gonna, you're start. She's gonna start to feel the cracks in that when you guys stop supplying the money, if that makes sense. The more that you got and it's your choice, but the more that you say, okay, we'll float it, we'll float it, we'll float it.

[Rachel Cruz]

Just know that it'll float through the. Yeah.

[Jade Warshaw]

For the next 20 years. Yeah. So you guys have to kind of get on the same page of saying we can talk to her about this, but if she doesn't do it, we have to allow her to feel it. Because when she feels it is when she's going to realize, okay, I have a difficult choice to make. And just try to support her as much as you can. And it is emotional, it is tough. It's your family home. There's nothing comfortable about that. But the solution often lies outside the comfort zone. So.

[Caller]

So it sounds like my next steps might be like two part. Right. Kind of initiating that conversation with my mom about selling the home possibly. And then as far as with my, my siblings, it's having that conversation. If we're gonna do this, we need to stop enabling her and giving her money, essentially.

[Rachel Cruz]

Yeah, absolutely. Yeah, that, I mean, that's what I would do. And even pull some options. You can even get in touch with one of our real estate pros. Yeah. Just to look for the area. Like what's in the areas of where you guys are just different options condo wise. And you know, there could be one a mile down so she doesn't have to move major locations. Right. Maybe it's just the actual home itself, but run some numbers and kind of get some more facts around it. But yeah, this is, this is difficult.

[Jade Warshaw]

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[Jade Warshaw]

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[Rachel Cruz]

Next steps toward your home goals, go to ramseysolutions.com realestate that's ramseysolutions.com realestate. When it comes to debt or Building wealth. People often can forget an important step when it comes to reaching their goals, and that's having insurance and having the right coverage. Or too little or too much can really impact how long it takes you to build wealth. So skimping on insurance might feel like saving, but when life happens, it is not great because you may not have a safety net that you need and we don't want debt to be that safety net. So the right insurance acts as a shield around your loved ones and your wallet if disaster strikes. And in some cases, it can save you money if you're paying too much for insurance. So how do you know if you have the right coverage? Make sure to take the Coverage Checkup. It's an online free resource that creates a personalized insurance action plan for you that's unique to your situation and it makes an overly confusing topic really easy to understand and gives you the next step specifically for you and your situation. So go to ramseysolutions.com checkup to take the coverage checkup or click the link in the description if you are watching on YouTube or listening on podcast. Up next, we have Derek in San Jose. Hi Derek, welcome to the show.

[Caller]

Hey Rachel, I'm a big fan. It's a real honor to speak with you. Thanks so much for taking my call.

[Rachel Cruz]

Absolutely. Thanks for calling in. How can we help?

[Caller]

So I recently got engaged. My fiance and I are both 36 years old. We're looking to start a Brady bunch. We've got five kids between 10 and 12 between us.

[Rachel Cruz]

Oh, wow. Between 10 and 12, is that what you said?

[Caller]

Yeah, I have twin sons who are 11 and she has a 10 year old. 11 year old and 12 year old.

[Rachel Cruz]

Oh my gosh. That's going to be a house full. That's fun. So great.

[Caller]

Yeah, it's been really fun. Yeah. So the reason I'm calling is because we have a pretty large difference in assets and I think based on your advice, it was the advice would be that we should get a prenup. So I have roughly $12 million and she has roughly 50,000. And so we started the process of looking into a prenup and it's been an emotional one and I totally understand why. And I think especially like we went through a questionnaire talking together about it, but then when we got the first draft back from my lawyer, that's when she's really not been feeling good about it and I understand the concern. So, I mean, she feels like I wouldn't be fully entering the marriage in the same way that she is. Because it feels like I'm holding assets, like, separately off to the side. And I'm sensitive to that and especially in some of the context of her former relationship. And so I'm just looking for maybe more clarity and, like, what you guys would recommend.

[Rachel Cruz]

Oh, man, this is a hard one. Because it is. I think it is a wise decision to do one, and I say that even more. I have a friend who's going through not a great situation, and she came in with a lot more, and now he's just. I mean, it was. It's just messy. It's messy. Messy. And there's a level. Again, you're not. You're. You're hoping and praying, obviously, that this is the one and that it's gonna last a lifetime. But it, as you guys have experienced, you know, there. There is a reality to all of this. And whenever we. Any of us get married, right, I think there is, like, this, like, okay, I'm choosing you for a reason and for a lifetime. But. But we also don't live under a rock and know that things change in life and situations come up. And unfortunately, some really hard things happen and does. Causes marriages to. To break up. Right. To. To enter into divorce, and we don't want that. So what were the parts. I'm curious, what were the parts of it that was making her. Because you guys went through a questionnaire together, and it didn't sound like the questionnaire brought up a lot of red flags, but when she was actually, like, reading it, does she feel like she won't be taken care of if something happens or, like, what's that underlying.

[Caller]

That's a concern. Yeah. Yes. And I think, especially, like, her kids as well, too. And it's something that I want to address and I think we could address, like, in a will or like, some other document or method after we get married. And it's something that I want to do. Like, I absolutely would want her and her kids to be taken care of too, if something, you know, didn't happen to us. I think it also. It feels very condescending to her that, like, the. That either she. And I don't see it being a problem for her at all. Like, my goal in this. And I think that's what your advice is, that in our case, that I know is rare, it would help protect our marriage. And that's what I want to do. But I totally understand that she feels it's condescending, like, to her, maybe her and her family and her friends, that they might be a problem and that we would need this to, like, protect against them.

[Jade Warshaw]

Can I ask how stringent this. This prenup is? Like, how strict it is? Because when I've heard calls about this before, my. My question is always, is there a way that this can be more progressive that over. Maybe over time and over years, some of the restrictions fall off. Like, does that make sense to where. It's like, the longer we're together and the more that this feels right, some of this starts to fall off, and now we start to become one, and after a while, it's all gone and we are one. Is there anything built in like that?

[Caller]

So there's nothing currently built in like that. So other than that, it's pretty basic. So everything we enter into the marriage with is separate property. Except she has a small amount of debt. And she's been awesome about eliminating debt, especially the situation she came from that I don't want her to carry it all. Like, we would just pay it off. And then everything after the date of the marriage is shared. So income that I make or she makes, we just share it. Our plan is that she would stop working. She'd be able to be home with all these kids.

[Jade Warshaw]

Does that include interest on the 12 million, like, as that grows, or does any growth on that 12 million remain years?

[Caller]

Yeah. So at least as it's currently structured, the growth in that would remain mine. I think we have talked about. It's not in the document, but, like, if I were to stop working to also help with the kids, which would be an option like that, the income that we drew from that would be considered our income.

[Jade Warshaw]

I think I would. Yeah, I'd be wondering about that if I were entering in that marriage. Like, how. How can we protect what you've already created? But how can I be a player and how that grows from here on out, like, how can I be a part of that? I think I might be wondering about that. That's tough, man.

[Caller]

Yeah. Yeah. And then the only other additional part is we're planning to get a house, and I was just gonna buy the house. We title it in both of our names. I just consider it community property.

[Rachel Cruz]

Yeah. Yeah. Well, it sounds like you're being very gracious about this, Derek. I think it's such a hard line to be wise in a situation and being. I mean, you don't sound like you're drawing these crazy hard lines, and. You know what I mean? And you're pushing it. Like, it's. Your tone feels very humble and gracious, which I. Yeah, I mean, I Think she probably very much appreciates. So. Yeah. I'm trying to think if I were in her position, which you never can fully do for somebody. You know, there's a part of me that I don't know, I think I would understand. You're coming in with 12 million, and I understand that's not mine right now. Right. Like there's. I don't know.

[Jade Warshaw]

Yeah, this one's hard for me. I see.

[Rachel Cruz]

Are you an anti prenup?

[Jade Warshaw]

No, I'm not. I would not go that far. I think it's just, it's. It's. It is a very tough way to start out a marriage, clearly, because we're dividing yours versus mine.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

And everything else in the marriage is out is we say we, us, our. So it is tough. And if you're a person, let's, you know, I'll put myself in the shoes me, I've always viewed. Oh, when you enter a marriage, it's like this.

[Rachel Cruz]

Yes.

[Jade Warshaw]

You don't know who you're going to fall in love with. And that person happens to be loaded. And now suddenly you're like, oh, this picture I had of it being ours is not possible. That's just tough. I'm not saying it's wrong. And it's just.

[Rachel Cruz]

Yeah, yeah, yeah. Well. And I think too, Derek, I think it's too. I think it can feel like the 12 million's off in this corner. And it's never. We're never going to participate in it, but I think the. It comes into. It's mine if something happens. But up until that point, it's ours. Like we're sharing assets.

[Jade Warshaw]

That's a good point. That is a very good point.

[Rachel Cruz]

We are living our lives together as one, but for some reason, if. If something ever happened in a divorce, this part still goes back to me. Does that make sense? I wonder if framing it.

[Jade Warshaw]

That's a good way to frame it.

[Rachel Cruz]

Because that actually with her.

[Jade Warshaw]

Because that.

[Rachel Cruz]

Because it. It can be hers. Right. Like, you guys can share in this. It's the only time it's not hers is if you guys legally go through a divorce. Does that make sense?

[Caller]

Yeah. Yeah, it totally makes sense. And that is how we want to live going into the marriage.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And it sounds like that. Yeah. And that sounds like your attitude because you're going to take some of our money. We're going to buy a house together with this money and use this money for our family. So I think it's. It's such a fine line, Derek. I mean, it's so Hard. But I think I would keep and bring in a third party if there's a great marriage counselor, therapist. Honestly, it's something to think through and even get other opinions because yeah, you want to be on the same page with this.

[Jade Warshaw]

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[Rachel Cruz]

The All New EveryDollar is here and it is way more than just the incredible budgeting app that it is. It now has tons of advanced features to help you make progress with your money so much faster. And the average person is finding thousands of dollars in margin in just the first 15 minutes. So get everydollar for free starting today. Just get it in the App Store or Google Play. All right, let's go to Alex in Grand Rapids, Michigan. Hey Alex, welcome to the show.

[Caller]

Hi there. Thanks so much for taking my call.

[Rachel Cruz]

Absolutely.

[Caller]

I'm 28 and debt free. I'm looking to buy a tiny house to put on my parents property without a credit score. Now, in a tiny house, technically not qualifying for a mortgage, how do I go about getting a loan for it?

[Jade Warshaw]

Well, let's talk about the loan process and then we'll talk about the tiny house on your parents property. So with the loan process, if you have no credit score, you're just going to have to find a place that does manual underwriting. For that now, we would recommend Churchill Mortgage. There are companies that do that and you just have to check and make sure they'll do it in your area. But it's the same process. You're just going to have to show different trade lines. You're going to have to show your pay stubs, you're going to have to show proof of income. If you work for yourself, you're going to have to show your tax returns, that sort of thing. But for the most part the process is the same.

[Rachel Cruz]

But how much? But you're saying it doesn't qualify for a mortgage because it's a tiny house, Correct?

[Caller]

Yeah. So if it's under 400 square feet. I'm looking at square feet.

It doesn't qualify for a mortgage.

[Jade Warshaw]

What's the cost of it?

[Caller]

I'm looking at about 40 to 50,000.

[Rachel Cruz]

Oh, well, save up and pay for it, Alex. I'm sorry, Save up and pay for it? It's like a car.

[Caller]

Right now I only have about 10,000.

[Rachel Cruz]

Okay, well then just wait a little bit. Yeah. So just put, be putting some money aside. Two, three thousand a month and just work your way up and in probably, you know, 12, 18 months, then you can do it.

[Jade Warshaw]

Can I ask the long term strategy on this?

[Caller]

Yeah. So I have autism and I can't really live independently. So it's pseudo independent being on my parents property.

[Jade Warshaw]

Got you, got you. Okay. What are you doing for work?

[Caller]

I coordinate volunteers for hospice.

[Jade Warshaw]

Cool.

[Rachel Cruz]

Are your parents involved at all, Alex, in this process? Would they be able to help you?

[Caller]

Not financially, no, but they've been a great support.

[Rachel Cruz]

Okay. Okay, great.

[Jade Warshaw]

How long did it take you to save up the 10,000?

[Caller]

I just finished. I got debt free in February and then saved up like 6,000 for my emergency to six month emergency fund. And it's so, I don't know, last six months.

[Jade Warshaw]

Okay. Yeah, I'm with Rachel. Just keep saving for this. It seems like you've thought through the best way for you to live. And I, I like that you've thought through that. I, I don't think you need to go into debt for this. And for anybody who is listening to my zero score spiel, that's for the mortgage.

[Rachel Cruz]

No, but that's it. Yeah.

[Jade Warshaw]

That are trying to do a full mortgage on zero credit score. But yeah, save up for it. I like the 40 to 50, 000. Just understand that you, that this is yours. Like the resale on this virtually doesn't exist because it's on your parents property and this is money that you'll likely never get back.

[Caller]

Yes.

[Jade Warshaw]

So understanding that is important, I'd say.

[Rachel Cruz]

Yep. Yeah. So running the. Yeah, I mean so it will. Are you able to pick up extra work, Alex?

[Caller]

Yeah, I'm looking for a second part time job.

[Rachel Cruz]

Okay, good for you. You sound incredible. I mean the fact, I mean you're very ambitious, you're very well spoken, you know what you want. You've been doing the baby steps. You became debt free. You got your fully funded emergency fund. I mean you're literally doing it all. The only thing that's gonna suck is like the next probably three years of saving for this. You know what I mean? You just look at it like you know, and people want to save up for a car. They want to save up for a college education.

[Jade Warshaw]

Right.

[Rachel Cruz]

And these numbers. These are big numbers. I'm definitely not downplaying that. It's just. So it's gonna just take you longer to do it. And even though I guess technically, you know, I guess you could Ramsey, you know, go through it to say, well, but a mortgage is the one type of debt, and this is for a.

[Jade Warshaw]

House, but figure out a way to do it.

[Rachel Cruz]

But the fact that it's. The fact that there is no resale. Because the one reason we do say a mortgage, not only is because it is the most expensive thing that you're ever gonna purchase as a home, but also, homes go up in value over time. And this is more like a car, in a sense, where it's gonna go down in value. And so getting into debt, even a personal loan for this, financially, would not be wise. So it really would be you putting money aside. And, I mean, I don't know about the market in tiny homes. Is there. Can you. Can't you. Can you buy or buy used ones? Can you buy a used one?

[Caller]

Yeah, that's what I'm looking at. I'm looking at them on, like, Facebook Marketplace.

[Jade Warshaw]

Okay. Okay.

[Rachel Cruz]

So maybe you could even. Alex, I don't know, because for some people, they may want it off their property. There may be some urgency to get one off. So maybe you could even negotiate with them and say, hey, if I have cash, you know, what's the lowest. You wouldn't be able to do that today because you don't have that amount. But when you're getting closer to that and, you know, three years or something, I mean, you may be able to negotiate.

[Caller]

Okay.

[Rachel Cruz]

For. For a lower price. Absolutely. Alex. Yep. Thanks for the call. And I, again, I think. Yeah, I would. I just wouldn't do that. I wouldn't go the debt routes.

[Jade Warshaw]

I wouldn't either. And. Because you never know, especially if you're already buying it used.

[Rachel Cruz]

Yes.

[Jade Warshaw]

What type of resale would be.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

On maybe, you know, selling it.

[Rachel Cruz]

Yeah, absolutely. All right, let's go to Elijah in Salt Lake City. Hi, Elijah. Welcome to the show.

[Caller]

Hey, how's it going? I just have a question. I am 22 years old. I'm currently going to college right now. I'm always done with my bachelor's degree. I have only about a year left. I'm only about 14,000 in student loan debt, so almost done. But, yeah, that's my only debt. No credit card debt, nothing. No car loan Nothing like that. I guess my question is. Well, I'm looking to go into law enforcement after, after I graduate. I guess my question is, is it worth it to stay for a master's degree if I get an actual pay incentive for the rest of my career or if I should just, once I get my bachelor's degree, take that pay incentive and just start working?

[Jade Warshaw]

Well, what would it cost you to get your master's? How would you pay for it?

[Caller]

So that one would be, it would be loans, but it would be for a total about master's degree. I've been doing my research about 18,000 for the college that I'd be going to.

[Rachel Cruz]

And what's the difference in job that you would get if you just went into the police department with a bachelor's versus a master's?

[Caller]

Yeah. So if I went in with a bachelor's degree, I'd be getting a 3% pay incentive for the rest of my career. If I went in with a master's degree, I'd be getting 5% incentive. So I guess my question is it would take a long time to repay that, like get that money worth that extra 2% every year. But I do really enjoy college. I do want to get married before I leave college and I, you know, enjoy my hobbies. So I just don't know if it's, if it makes financial sense to get a master's degree.

[Jade Warshaw]

Not on debt. Not on debt. But I'm wondering if there's a way that you can cash flow it. Are you, are you working at all? And my next question is, do you have to do it right away or can you work on it later while you're in law enforcement and still get the 5% bump?

[Caller]

Yeah, you can still get the 5% bump. I've just heard from a lot of people that, you know, it's really hard once you're starting this full time job to go back.

[Rachel Cruz]

Yeah. I mean, how much, how much are you getting paid? Like your first year that you're working?

[Caller]

So yeah, first year if with a bachelor's degree would be about 90k.

[Rachel Cruz]

Okay.

[Caller]

And then with a master's degree, if I came in first year, it'd be about 95.

[Rachel Cruz]

Okay. So that's my thing is that the percentage wise is not big, Elijah. I mean, it's, we're talking maybe a $4,000 difference and you could do that in two months with a side gig. You know what I mean? Like, so there's a part of me and I know, I mean, I have friends in law enforcement and they even move around. They get up to detective or they, you know, move around within it.

[Caller]

Yeah.

[Rachel Cruz]

That can change your pay over time as well. So. Yeah, I think if you had the money and you wanted to do it, I don't think, I mean, I don't think I would stop you. But also, since you don't have the money, it's kind of. That's a no go for me personally.

[Caller]

Okay. Yeah. So you would just, you would. Okay. So you wouldn't be okay with, you know, taking out student loans for a master's degree?

[Rachel Cruz]

No.

[Caller]

Okay.

[Jade Warshaw]

No.

[Rachel Cruz]

Yeah, I'd get this paid off and man, I wish we had a Ramsey dating app because I feel like we get a lot of calls of some ladies that are always single. Elijah. And they're always looking for a man and we could have pointed them your way. I know, I know. No, I, I appreciate the, the, the, the proactiveness of love.

[Jade Warshaw]

I do, I do with him because.

[Rachel Cruz]

I do think that's great. I am. For getting married young and, you know.

[Jade Warshaw]

And what he said. That is true. Like when you're in college, there's people right there to choose from. Once you get out in the world, it's like, I gotta work, I gotta go out after hours.

[Rachel Cruz]

It's exhausting. You know, it's absolutely.

[Jade Warshaw]

I gotta go to any. An event, get dressed up, college. It's like you got your pick right there.

[Rachel Cruz]

Got them right there. Oh, Elijah. Yeah, I hope that helps. So, yeah, if there's not the cash, but to Jade's point, if you're able to somehow cash float or even if you get into a situation where they help pay for half of it, I don't know, you know, your work, that would be incredible too. So I hope that helps. And yeah, good luck.

[Jade Warshaw]

Like.

[Sponsor/Announcer]

Everywhere you turn right now, you're being told a lie about money. That you can't get ahead, that you can't survive without death. And those lies are keeping you broke, don't buy into it. Yes, there's a lot of noise and chaos and confusion out there, but there's also hope. The truth is, you have more control than you think. This year, it's time to take back your hard earned money and your life. And it starts by joining our free live stream. On January 8, me and Jade Warshaw will show you how to go from chaos to clarity with your money. Help you break free from debt and change your family tree, all by using the all new EveryDollar app. Plus 10 people who sign up will win $2,000 cash. Don't let this be another year of I can't sign up for free at everydollar.com livestream.

[Rachel Cruz]

Our scripture today comes from Philippians 3, 13, 14. One thing I do, forgetting what is behind and straining towards what is ahead, I press toward the goal to win the prize for which God has called me heavenward. In Jesus Christ, Booker T. Washington said, you measure the size of the accomplishment by the obstacles you have to overcome to reach your goals. That's good.

[Jade Warshaw]

That's really good.

[Rachel Cruz]

Love it, love it, love it. All right, up next we have Jacob in Grand Rapids. Hi, Jacob, welcome to the show you doing.

[Caller]

Thank you for having me.

[Rachel Cruz]

Absolutely.

[Caller]

Recently, recently in this year, I've had a change in my whole money and it's really been having, you know, $3,000 and a checking account for emergency, putting everything else towards a high yield savings account or cash plus account to some banks and then maxing out my Roth IRA as much as I can every year, as well as traditional brokerage investments. But it really got me thinking. It's like, can you live with these cash plus accounts or high yield savings accounts, considering that they accept direct deposits and bill pay and you can deposit checks, can you only live with using a high yield savings account with the credit card? And if so, like, what's the disadvantage with that without going through, you know, your traditional local bank or even your commercial bank, like the bigger ones, Right?

[Rachel Cruz]

Yeah. Well, from a high yield perspective, usually you have a limit on how many withdrawals you can have. So you can't use it like a full checking account. Sometimes they have a limit of five is, is what I see most of the time. And, but yeah, you will get a debit card and a checkbook with that. So you can, you can, you know, take money out of it, but you can't. I mean, if you think about, you know, the expenses, I just think about my EveryDollar app and when I open it, it's like 15 transactions, you know, and it's like an Amazon, an Amazon Grocery, Netflix. I mean, so you're, you're, you have a lot of transactions coming out that will not, it'll, it'll exceed the limit of most high yield savings accounts.

[Caller]

I see.

[Rachel Cruz]

Yep.

[Caller]

So there, there really, there really isn't much as long as, you know, whatever company you go with making sure they don't have those limits and whatnot for a high yield at least.

[Jade Warshaw]

Well, they, they do, they will.

[Rachel Cruz]

Yeah. A high yield usually does have, have a limit of how many withdrawals you can have per month. Yeah. So A traditional checking out. Now, I will say, Jacob, there are some. And we're actually kind of in talks with one right now, possibly for the Ramsey check. So there are now banks that are offering a higher percentage rate, maybe like a 2 to 3% for checking.

[Jade Warshaw]

Normal checking.

[Rachel Cruz]

Yeah. Which is great. Versus, I think our checking's like less than 1% or something. I don't think we basically get anything from it. So there may be some more on the market that are great. It's not. It wouldn't be considered a high yield savings. It would be considered a checking account. But there are some banks that are offering, usually online banks are offering more of a higher interest rate on just a traditional checking account. So that's something you could look into if you wanted to.

[Caller]

No, that is true. I've been seeing that with a lot of banks. Like, I'm looking at one like it's Vanguard, and that's the one I was looking at. It is labeled a cash plus account. So it might not be a high yield. I guess that's where my kind of question or to myself was a bit confusing. But the main. The main motivation behind it is, you know, making my money work for me. Right. And making sure that. Yeah, sitting in, you know.

[Rachel Cruz]

Yeah, for sure. But I would say the account that. The money you have in your checking, or the way I look at it, Jacob, is that money's sitting there not to make me money. It's to keep my life afloat. I mean, that. That in my investments are there to make money for me. Just like you're saying my high yield savings, it's there for a little bit of that bridge mentality of like, we have a lot. You know, we had a good amount of money in our high yield because we were building a pool, so we were writing some checks out of it throughout this past year. But I'd rather it sit in a high yield savings versus a checking account. But yet I know my high yield savings is not where I'm gonna make a ton of money. And that's. That's not why it's there. It's fine to have it sit there, some savings because it will make more than a checking account. But I look at, for me, my investments from real. From retirement. Winston. I have a separate mutual fund, and then we also have some real estate. So, like, I look at those as where my money makes money, not necessarily my high yield savings or my checking. So I wonder if from your mentality perspective, Jacob, to kind of like loosen that a little bit and maybe. Maybe put Some more like emotional parameters around these accounts, I think so.

[Jade Warshaw]

It's also about the habits you're forming. Like when. When you tell me that I'm thinking you're building the habit of. I have a block of savings and I can pull from that block of savings for normal every day. Do you know what I'm saying?

[Rachel Cruz]

Yeah.

[Jade Warshaw]

As opposed to when you're checking accounts. In your checking account, I only use this for day to day, you know, day to day purchases. And my savings over here, I only touch it if it's an emergency. And then this H, Y S A, I only. You know what I'm saying? So you're building those habits. And when you blur the lines like that, I think also to Rachel's point, it just. It.

[Rachel Cruz]

It.

[Jade Warshaw]

I think it causes confusion.

[Rachel Cruz]

Yeah, yeah.

[Jade Warshaw]

Personally. But yeah, I. I wouldn't do it. There are definitely worse things you could do. Right. You know what I'm saying? But for sure, I wouldn't do it. Y.

[Rachel Cruz]

Does that help?

[Caller]

Yeah, that's.

That's where.

No, it definitely does help. And, you know, that's where I'm going. Eventually. I have money set aside, I mean, a little background for an investment property, a multifamily unit, and it's just been sitting in, you know, I think like a point 1%. So I was like, you know, I gotta move this.

[Rachel Cruz]

Yes, for sure.

[Caller]

Yeah.

[Rachel Cruz]

And.

[Caller]

And I would say this property.

[Rachel Cruz]

Yeah, And I would say this too, Jacob, if. If that. I love that real estate goal for you. And if it's going to be longer than five years, you could even drop that in the S P500 through Vanguard if you wanted.

[Jade Warshaw]

There you go.

[Rachel Cruz]

If it's longer than five years, you could invest it. It's going to go up and down. It's not going to be as steady as just a high yield savings, but high yield savings, you're only going to get 4 to 5%. Now, if it's less than five years, I wouldn't probably risk it putting in the market. But if you know it's going to be longer than five years, you could drop part of it, you know, maybe not all of it. Maybe some of it. Maybe all of it into just the S P.

[Caller]

Yeah, that is. That is very smart because it compounds and it's relatively a good performance.

[Rachel Cruz]

Yeah, for sure.

[Caller]

So again, that answered my question.

[Rachel Cruz]

Okay, perfect. Well, thanks for the call. Jacob, you're a sharp guy, Sharp young guy. Sharp young man to be able to be thinking about. About all of this, which is great. So again, you guys just. Of like, clear that up. You know, you want to have your checking, you want to have some savings, and we love a high yield or a money market account, but in that you're going to have your emergency funds, some short term savings that you're looking towards once you're debt free and have your fully funded emergency fund, maybe your down payment you're saving up for could go in the high yield. And then beyond that, be investing. And retirement is your number one priority. With investing, 15 of your income will go into that. And that's Roth Iras.

[Jade Warshaw]

Yep.

[Rachel Cruz]

401Ks, 403bs.

[Jade Warshaw]

Now, I keep my. I keep my emergency. Like Sam and I keep our emergency fund in one high yield, and then we keep another high yield for, like, renovation, like, things like that. Is that what you do? Y. I just like it over there.

[Rachel Cruz]

Yes. That's how I am. That's how I am. I'm like, don't count that.

[Jade Warshaw]

Like, like, I like to forget it's even.

[Rachel Cruz]

I know. And I'm such the free spirits. Even though I'm like, talk about money every day for my job. And I'm always like, hey, babe, out of all their accounts, like, well, how much is in this? And he, like, gives me the number. I'm like, that's not including the emergency fund. Is like, no, it's not including the emergency fund.

[Jade Warshaw]

Like, never include the emergency fund.

[Rachel Cruz]

I just can't even, like, emotionally. Yep, Go there. But. But yeah, those are. Those are some great questions. And you know, we were. The high yield savings, the returns have gone down a little bit. We saw them. They were. They were crazy.

[Jade Warshaw]

They're like 5.5. At one point.

[Rachel Cruz]

It was wild, wild, wild, wild. So that's always a thing to remember, too. In the economy, when interest rates go up, up, it's bad when you're in debt because you're having to pay that interest, but when you're earning the interest. Yeah, it might be. Might be great. All right, let's go to Tik Tok real quick. We'll close out the show with a little Tik Tok. We got Brian and he said, because of your show, we're living the dream. Retired early and traveling the country in our rv. And we can't stop saving and eating cheaply. How can we eat steaks, ribs, seafood, without guilt? I thought I said without a grill.

[Jade Warshaw]

Wait, wait, wait.

[Rachel Cruz]

Basically, how do you enjoy life on Baby on Baby Step? I think they're on seven. I think they're. They're done. They are living the dream.

[Jade Warshaw]

So I'll give you my framework for like. So basically they're feeling guilty about their spending. Is that what they're saying?

[Rachel Cruz]

Okay, they have the money.

[Jade Warshaw]

So I love this because Sam and I sometimes feel the same way. Like whenever you've gone through a struggle and you've sacrificed to win, you do. It's like, oh, like you're afraid you're going to mess it all up. Right. And so here's what five pillars of personal finance. And if you check the boxes, then you're a financially responsible adult.

[Rachel Cruz]

Love it.

[Jade Warshaw]

So number one, are you living on a budget? Okay, green check. Ding. Number two, are you person who is living out of debt? Like you're out of debt. You don't have a debt. Ding. Check that box. If you're. I carry the proper insurances. Do I have the proper insurances? Yes. Check that box. Am I a person who's saving for the future? Am I doing, you know, my 15 to retirement? Am I doing the 529? Am I investing in my, my, you know, for savings account through my home? Ding. And am I prioritizing, giving? If you're green checking all those boxes, permission to spend, to use some life.

[Rachel Cruz]

I love it. I love it. Hope that helps Brian enjoy the RV life. The retired life, that is.

[Jade Warshaw]

Love it.

[Rachel Cruz]

Oh, thanks to all the guys in the booth for helping out. Jade, thanks for the great hour and remember to take control of your money and create a life you love. Love.

[Sponsor/Announcer]

Ra.