You Don’t Need a Raise, You Need a Plan

Summary

Podcast Summary: The Ramsey Show – "You Don’t Need a Raise, You Need a Plan"

Release Date: March 19, 2025
Host: Dave Ramsey and Rachel Cruz

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Introduction

In the episode titled "You Don’t Need a Raise, You Need a Plan," Dave Ramsey and his co-host Rachel Cruz delve into various financial challenges faced by listeners. The episode emphasizes strategic planning over merely seeking higher income, highlighting the importance of budgeting, debt management, and thoughtful investment. The hosts provide actionable advice through listener call-ins, addressing issues ranging from financial infidelity in marriages to managing oversized vehicle expenses.

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1. Navigating Financial Infidelity in Newly Married Couples

Call from Christy in Kansas City [00:47 - 09:06]

Context:
Christy and her husband, both newly married with previous long-term marriages, grapple with trust issues stemming from past financial infidelities. Christy's ex-husband hid significant financial information, and her current husband is involved in a family farming business with similar fears of financial deceit.

Discussion & Insights:

• Transparency and Accountability:
  Dave Ramsey emphasizes the importance of merging finances to enhance transparency, suggesting joint accounts and comprehensive budgeting as foundational steps.
  Dave Ramsey [02:23]: "Getting into an every dollar budget and beginning to look where every dollar is being spent creates so much transparency that trust is in some way a byproduct."

• Therapeutic Intervention:
  Both Ramsey and Cruz recommend marital counseling to address deep-seated trust issues, acknowledging that both partners are victims of past financial dishonesty.
  Rachel Cruz [04:03]: "Our emotions from our past form neural pathways...you have to build a new way of trusting."

• Biblical Perspective:
  Christy references biblical principles of financial unity in marriage, aligning with Ramsey’s advice on financial integration as a path to deeper intimacy and trust.

Notable Quote:
Cruz [05:18]: "Couples that combine finances not only have a higher level of happiness, but there's also a depth of complete intimacy."

Conclusion:
Ramsey and Cruz advocate for a combination of financial transparency and professional counseling to rebuild trust and secure a healthy financial foundation in marriage.

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2. Managing Excessive Vehicle Expenses

Call from Shelby in Seattle [10:08 - 19:06]

Context:
Shelby, a new stay-at-home mom, expresses concern over expensive vehicles that consume a significant portion of her family's budget. Her husband purchased a truck that is now underwater by $25,000 and incurs monthly payments nearly equal to their mortgage.

Discussion & Insights:

• Debt Snowball vs. Strategic Selling:
  While Ramsey supports the debt snowball method, Rachel Cruz challenges the efficiency of this approach given the substantial negative equity in the truck.
  Rachel Cruz [14:01]: "Stick to the snowball method, but sell those cars and take out loans for the difference."

• Utilizing Surplus Income:
  With her husband's temporary income spike from working in Alaska, there's an $8,000 monthly surplus. The hosts suggest leveraging this for aggressive debt repayment or selling depreciated assets.

• Financial Trade-offs:
  The conversation explores the balance between sticking to a structured debt repayment plan and making strategic asset sales to prevent long-term financial strain.

Notable Quote:
Dave Ramsey [16:11]: "Make no mistake, it's going to be painful to drive a piece of crap for a while, but if you have your mindset on where this gets us, then you can drive anything."

Conclusion:
Ramsey and Cruz recommend selling the undervalued truck to eliminate a significant debt burden, suggesting that the emotional and financial relief outweigh the short-term inconveniences of driving a less desirable vehicle.

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3. Renting to Parents Amid Financial Concerns

Call from Rachel in Phoenix [21:04 - 30:32]

Context:
Rachel considers renting her renovated studio to her parents to support their shaky financial situation. Her father plans to retire in Mexico with inadequate funds, posing potential risks to her family's finances.

Discussion & Insights:

• Assessing Financial Viability:
  Rachel Cruz advises against expecting rental income from parents who may not have the means to pay rent reliably.
  Cruz [22:56]: "But you're not going to get paid. Do you realize that?"

• Emotional vs. Financial Responsibility:
  The hosts delve into the emotional implications of supporting aging parents versus maintaining financial stability for her immediate family.

• Protecting Personal Finances:
  Emphasizing the importance of safeguarding one's finances, Ramsey and Cruz stress that Rachel's primary responsibility is her immediate family's well-being, not funding her parents' lifestyle.

Notable Quote:
Cruz [24:47]: "I promise you... have mom take care of mom. I agree so much with Rachel Cruz on this. This is not your responsibility."

Conclusion:
Ramsey and Cruz strongly discourage renting to parents under these circumstances, highlighting the potential for financial strain and advising a focus on professional boundaries and family financial health.

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4. Saving for Children's College Funds

Call from Antonio in Indiana [32:25 - 42:17]

Context:
Antonio and his fiancée, a young couple earning over $200,000 annually with no debt, plan to save for their children's college education. They are seeking advice on maintaining financial discipline and contentment while saving for substantial future expenses.

Discussion & Insights:

• 529 Plans as Optimal Savings Tools:
  Rachel Cruz advocates for investing in 529 college savings plans due to their tax-advantaged growth for educational purposes.
  Cruz [39:40]: "I would go ahead and invest into a 529 for them."

• Balancing Current Contentment with Future Goals:
  Both hosts address the psychological aspect of saving, encouraging the couple to stay present and enjoy their current milestones without undue pressure.

• Alternative Education Funding Options:
  The conversation touches on military benefits like the GI Bill and ROTC scholarships as potential avenues to alleviate future college costs.

Notable Quote:
Ramsey [35:31]: "Even with the GI Bill, fiscal discipline now ensures that your future remains secure."

Conclusion:
Ramsey and Cruz recommend aggressive saving through 529 plans and exploring military scholarships, balancing disciplined savings with the enjoyment of present life stages.

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5. Protecting Assets in Potential Common Law Marriages

Call from Christy in Billings, Montana [43:24 - 51:37]

Context:
Christy seeks advice on protecting her assets in a long-term relationship that may verge on a common law marriage. She and her boyfriend have been together for ten years, with recent considerations to cohabit fully.

Discussion & Insights:

• Understanding Common Law Marriage:
  Ramsey and Cruz clarify that common law marriage typically requires prolonged cohabitation and mutual agreement to be considered married, which is not the case for Christy and her boyfriend who live in separate cities.

• Asset Protection Strategies:
  Regardless of marital status, the hosts recommend keeping finances separate to protect individual assets, especially when the relationship lacks formal commitment.

• Emotional Readiness and Commitment:
  Dave Ramsey urges Christy to evaluate her commitment, suggesting that her hesitancy may indicate insufficient readiness for full financial intertwining.

Notable Quote:
Dave Ramsey [48:42]: "Do not marry him until you guys are on the same page."

Conclusion:
Ramsey and Cruz advise maintaining separate finances and urging formal marriage before combining assets, emphasizing the importance of clear commitment to safeguard individual financial well-being.

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6. Late-Stage Investing Amid Health Concerns

Call from Karen in Portland, Oregon [74:22 - 83:06]

Context:
At 68 years old, Karen seeks guidance on investing $75,000 in savings amidst critical health issues and uncertain alimony payments. Her income is primarily from alimony, and she faces upcoming surgery that may impact her ability to work.

Discussion & Insights:

• Consulting Financial Professionals:
  Both hosts suggest that Karen should engage with a certified financial advisor to tailor an investment strategy that accounts for her health and income stability.
  Cruz [79:47]: "I would want you sitting down with a Smartvestor Pro."

• Balancing Risk and Stability:
  Given her imminent surgery and limited income sources, the emphasis is on preserving capital while seeking modest growth, ensuring funds are accessible when needed.

• Expense Management:
  Ramsey advises aggressively cutting expenses, potentially through shared housing or finding a roommate, to extend her financial safety net.

Notable Quote:
Dave Ramsey [82:42]: "Consider a roommate situation. Get rid of unnecessary expenses to safeguard your financial future."

Conclusion:
Ramsey and Cruz recommend cautious and strategic investment through professional guidance, coupled with stringent expense management, to ensure Karen's financial security amid health uncertainties.

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Key Takeaways:

1. Financial Transparency:
   Merging finances in marriage can build trust and accountability, but requires openness and often professional counseling to navigate past financial betrayals.

2. Debt Management:
   Prioritizing debt repayment, especially high-interest or negatively geared assets, is crucial. Strategic selling of depreciated assets like overpriced vehicles can alleviate financial strain.

3. Family Financial Dynamics:
   Supporting aging parents financially can jeopardize personal financial health. It's essential to set boundaries and prioritize immediate family needs.

4. Educational Savings:
   Utilizing 529 plans and exploring educational benefits through military avenues can effectively fund children's higher education while maintaining financial discipline.

5. Asset Protection:
   In non-formalized relationships, keeping finances separate is vital to protect individual assets and ensure financial independence.

6. Late-Stage Financial Planning:
   Engaging with financial advisors, minimizing expenses, and cautious investing are paramount for individuals approaching retirement or facing health challenges.

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Notable Quotes:

• Rachel Cruz [05:18]: "Couples that combine finances not only have a higher level of happiness, but there's also a depth of complete intimacy."

• Dave Ramsey [16:11]: "Make no mistake, it's going to be painful to drive a piece of crap for a while, but if you have your mindset on where this gets us, then you can drive anything."

• Dave Ramsey [48:42]: "Do not marry him until you guys are on the same page."

• Dave Ramsey [82:42]: "Consider a roommate situation. Get rid of unnecessary expenses to safeguard your financial future."

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Conclusion

In "You Don’t Need a Raise, You Need a Plan," Dave Ramsey and Rachel Cruz offer comprehensive financial advice tailored to diverse listener situations. From enhancing marital financial trust to strategic debt elimination and safeguarding assets in complex family dynamics, the episode underscores the importance of deliberate financial planning over seeking immediate income increases. Listeners are encouraged to adopt budgeting best practices, consult financial professionals when necessary, and make informed decisions that align with their long-term financial well-being.

Transcript

[Dave Ramsey]

Hey, guys. Dave Ramsey here. Me and Dr. John Deloney are coming to a city near you on the.

[Rachel Cruz]

Money and Relationships tour.

[Dave Ramsey]

It's happening soon, so don't wait. Get your [e-mail] tour. This is the Ramsey show, where America comes to win with your money, win in your profession, win in your relationships. Thrilled to have you with us. 888-255-225 is the phone number. Rachel Cruz joins me today. I'm Ken Coleman. And let's get right to it. Are you ready to roll?

[Rachel Cruz]

Let's do it.

[Dave Ramsey]

Christy is up first in Kansas City. Christy, how can we help today?

[Ken Coleman]

So I was just wondering how you guys would handle this. My husband and I are newly married about six months. We were both previously married. I was married for 26 years, and he was married for seven. And both of us, through our relationships, it's like we both had financial infidelity by our partners. So I found out that my ex husband had been lying to me about money for well over 15 years. And. And then his ex wife, she left him and then tried. He's a farmer, so if they have a large farm, and she tried to take the whole farm. So there's been a lot of infidelity there on the financial side. So both of us have these deep fears of combining finances from, you know, previous relationship.

[Rachel Cruz]

We don't.

[Ken Coleman]

We don't know how to handle moving forward financially together, Biblically speaking.

[Dave Ramsey]

What do you mean, biblically speaking?

[Ken Coleman]

Well, the two. I know from listening to your guys's podcast, you say the two shall become one, and that includes finances. And there is just a lot of fear there with combining and afraid that you're gonna get what you got before and that you're gonna find out, oh, my gosh, this person who I was supposed to be able to trust was lying to me and then his side of the fences. Well, if I open up to her and I tell her what's actually going on with finances, she's going to mess me over and take me to the cleaners again.

[Rachel Cruz]

Yeah, okay.

[Dave Ramsey]

I get what you're saying. Here's what I would say right out of the gate. I actually think if I were in your shoes and I understand the trust issues. So what's going on with both of you is very natural. It's very normal. I think you guys got to get with a therapist without question and work through this. But I would tell you that just practically speaking, I think that the fact that you have your finances merged and shared actually creates greater accountability for both Right. So that the trust at least has some type of transparency. Now, just because you share accounts doesn't mean that financial infidelity isn't happening. However, one big step going forward to me is, okay, there are no separate accounts, and we both see what's in there. And even just getting into an every dollar budget and beginning to look where every dollar is being spent, all of that begins to create so much transparency that trust is in some way a byproduct. I'm not in any way saying that therapy doesn't still need to happen, because. Rachel, I. I want to get your thoughts on this, because I do think this is a. We need a good therapist to help us both heal, because they've both been.

[Rachel Cruz]

Yep.

[Dave Ramsey]

They've both had this trauma.

[Rachel Cruz]

Yeah. I mean, you both been burned. Yeah. By the exact same issue from an. From an ex spouse. So. Yeah. Christy, I mean, you're not crazy by any means, for this to be so heightened and so aware. But I would also just challenge you that the man you chose to marry and that you chose at the altar and said those vowels, you know, what caused you to say yes to him? What were those things?

[Ken Coleman]

He loves Jesus Big. And I. I respected his walk with Christ and who he was. His character was so good, and he was different than anybody else I had met.

[Rachel Cruz]

Yeah. So I think what can happen is our emotions and from our past, it's almost like a. Like a neuro pathway in our brains. Right. Has been formed for you that with money, it's like, don't trust, don't trust, don't trust. And over time, you are going to have to build a new way of trusting. And I think even leaning on kind of just those facts of what you just told me, Christy, like, this man is not your ex husband. And I know me just saying that doesn't wipe away all the emotion, but just you have to trust yourself as well. And I think when people get blindsided by a spouse, whether it's financial infidelity and affair or something, there's almost that fear of, I can't even trust myself. How did I miss it? Right. You're probably asking yourself, how did I miss it for 15 years. Right. So you're thinking about that. And so I would say, trust yourself, Christie, because you chose someone to do life with. And so, um, again, I would. I would talk to a therapist, because that trust string isn't gonna just be tied to money. It's gonna come out in other parts of your marriage where you probably have a level of that wall and What? Why we say, too, to combine finances.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

I would say from a spiritual perspective, I think it's wise, but it's also, again, whether you're spiritual or not. The data shows couples that combine finances not only have a higher level of happiness, but there's also a depth of complete intimacy that when you say, I said yes to this person and I chose to lock arms with them and take on the world together. When you do that in just this, like, fullness together, you enjoy life together more than trying to keep everything separate and, you know, compartmentalized, if you will. So. So again, from a spiritual aspect. Yes, but I would say it's even bigger than a spiritual aspect. I think people that aren't. That aren't spiritual find this level of depth in their marriage when they choose to work as a team.

[Dave Ramsey]

Well, because you're right. Because of, again, the word we've been talking about, which is trust. Christi, I want to dig a little bit. We've kind of told you what we thought. You've been listening. I'm curious, are you both. Would you say you both are at the same level of distrust of each other, even though you're probably happily married in every other area? Describe for us where you are and where he is on the particular issue of trust of each other and money right now. How would you describe that?

[Ken Coleman]

Well, on his side of the fence, he farms with his dad. So it's a. It's. That was a. You know, that's a family business, generational. And so we also have a mix on his side of the fence of fear from the whole family.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

Yes.

[Dave Ramsey]

You know, that makes us even. Can I.

[Rachel Cruz]

Can I jump in here? Christy? Can I jump in? Okay. This is. We never talk about prenups. You know, we like our. It's almost an almost never conversation, I feel like, around here with prenups, unless there's a few caveats. One of them is if there is an excessive amount of wealth, you know, there's a level of just protection there. But then the other one is kind of what you're talking about, Christy, for him, at least, if there is some level of a family business, because we've talked to people like this where they get divorced in this and the ex still has voting stock in the company, and then he gets remarried to someone crazy, and now all of them are still speaking into the ex's family, and it's. And it's affecting other people. So this may be a conversation that you have with him of that. Specifically that farm, because it is tied to other people in the family. That domino effect is very real for those, for them to be protected in that sense with a farm, you know, with, through, through some level of prenup. So again, we, we say almost never a prenup, but there are situations that make sense because it's protecting other people as well. Um, so that may be something on his side towards you. Right. So it would be for you to sign up.

[Ken Coleman]

Actually, we did. We did find a prenuptial agreement. So I, I, I actually volunteered.

[Dave Ramsey]

Oh, you.

[Ken Coleman]

Yeah, I said, I said when we were dating, I said, I'm feeling like that there's something here. And I said, I just, I said, if you need a piece of paper, then give it to me and I'll sign it because I don't want anything from you. Except.

[Dave Ramsey]

Well, that's huge. That had to, that had to create a lot of trust for him. That had to be huge.

[Ken Coleman]

Well, there's still, there's still some walls there. You know, I can, I can sense that he doesn't want to open up to me too.

[Dave Ramsey]

Okay.

[Ken Coleman]

And from my perspective of having that been violated on my side of the fence, I completely understand it. I'm like, as you should be. Well, you should be worried.

[Dave Ramsey]

I gotta say, Christy, I, I think you guys are, are on the way. I believe marital counseling here, because neither one of you were the bad guys. You're both victims. That's an interesting combination. And a professional will get you guys the tools that you can heal. I think you commit big time to some serious therapy one time a week maybe, and let's dive into this and come out on the other side. And then I think, you know, you guys will get there. Really, really interesting call. Thanks for trusting us.

[Rachel Cruz]

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[Dave Ramsey]

All right, let's go to Shelby in Seattle, Washington. Shelby how can we help today?

[Ken Coleman]

Hi there. So I am in a bit of a pickle right now. I'm a stay at home mom. A new stay at home mom. So I was working previously, but now my husband provides all the income for our family. We have an eight month old son. But our biggest issue right now is that our vehicles are taking up way too much of our budget. And before we got married, my husband bought this really nice truck that he could afford, or he thought he could afford then. And that was before we met, before we got married. And now it's costing us almost as much as our mortgage. And we owe about $25,000 more than the car's worth right now.

[Dave Ramsey]

25 more than it's worth or what is it?

[Ken Coleman]

Actually more than it's worth?

[Dave Ramsey]

Oh, my.

[Rachel Cruz]

Okay, how much do you guys owe on it?

[Ken Coleman]

About 55, 55,000.

[Rachel Cruz]

Okay. And you're thinking you can only Kelly blue book it for what, 25?

[Ken Coleman]

About 30.

[Rachel Cruz]

30.

[Ken Coleman]

25 30.

[Rachel Cruz]

Yeah, yeah, yeah.

[Dave Ramsey]

Is your husband willing to get rid of it?

[Ken Coleman]

He is, and he's actually making a big chunk of change right now. He's working up in Alaska, so he's making about four times as much as he normally would.

[Rachel Cruz]

Oh, wow.

[Ken Coleman]

So I've been trying to convince him to throw all this extra income at the truck, but he's saying, no, let's just stick to the snowball plan and go smallest to largest. Well, it's a lot of money that we could be using for other bills if we could get rid of the truck.

[Dave Ramsey]

Well, why don't you walk us through where you are on the snowball right now? What do you guys walk that out for us? Smallest to largest.

[Rachel Cruz]

Yes.

[Ken Coleman]

We pay off the mortgage is 1,400.

[Dave Ramsey]

No, no, no. Tell me your current debts. Smallest to largest.

[Ken Coleman]

Oh, I see. Okay, so we have credit cards. That's about $600 left. His credit card, which is about 5,000. We have. I'm sorry, that wasn't small. Solar dis. But my credit card, which is about 600. I have a personal loan for 2,000. We have a joint loan together for 3,000. He's got a credit card for 5, his own personal loan for 7,000. And then I have student loans for about 8,000.

[Rachel Cruz]

Right up 2, 3, 4, 5, 6, 7, 8.

[Dave Ramsey]

Like stair step kids.

[Rachel Cruz]

Okay, so then the $8,000 student loan and then the truck. Or is there another one?

[Ken Coleman]

And then my car.

[Rachel Cruz]

Okay.

[Ken Coleman]

Which is about 22,000.

[Dave Ramsey]

Okay, now what's that worth?

[Ken Coleman]

His truck?

[Dave Ramsey]

What's the 22,000 dollar car worth about 20.

[Rachel Cruz]

Okay, and how much are you guys making a month now that his income is up? What, what, what, what is he bringing in?

[Ken Coleman]

Right now? He's bringing in about 16,000amonth.

[Rachel Cruz]

16,000Amonth. Golly, that's amazing.

[Dave Ramsey]

How much surplus is that? If you do your full budget. Sorry, Rachel, if you got all your expenses, including the minimum payments on debt, how much extra do you have now that he's making this? 16,000amonth?

[Ken Coleman]

Yes. So our expenses right now are about 1500 a week. So that's about 6000amonth. So that's about 8000 surplus.

[Dave Ramsey]

Okay, and how long has he been doing this? I'm just asking these questions for Rachel because she's running numbers here for you. So how long has he been making that extra money and how much longer will he make that in Alaska?

[Ken Coleman]

So he's been doing it for about four weeks. He's going to continue to do it for about three more.

[Rachel Cruz]

Oh, three more weeks. So it's very short.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Does he have to. Okay. Is that because of his. Is that because he's choosing to make it shorter, or is it because of what he's doing? There's only, like, that much contract or whatever it is.

[Ken Coleman]

It's just seasonal. It's like a contracting operator.

[Rachel Cruz]

Okay, gotcha. Gotcha. Well, what I would say is, yeah, I mean, I'm on his team with going ahead and just because you would not, you guys would knock out one, two, you know, close to three of these debts using the debt snowball with this extra money coming in, being able to knock those out with the surplus. And if he's going to be working for three more weeks doing that, like, yeah, so I, I would stick to the snowball method. And then I would challenge you guys and just say, you know, you know, you're like, you guys can keep the cars and keep trucking down the debt. Snowball. But run the math and just say, what if we did sell them at a loss? Right. So you would have to take out a personal loan. So for yours and for you to have a car, you know, you'll have to take out to probably $7,000 loan for you to get a crappy car and pay the 2,000 that you owe on yours that you're underwater. Um, and then for him, you know, what if you guys took a $30,000 loan versus a $55,000 loan, right? I mean, you're shortening the life of this so significantly because of two cars, you know what I mean? Like, like, it's it hurts so bad to say that it's upside down and it's like, I mean, it's just, it's sickening. Right? I mean, how much you guys are paying per month for this stuff? I get it, but I think I, if you can get a credit union to give you guys two other personal loans, I think that's what I would do. And then Kelly Blue book these individually.

[Dave Ramsey]

Because this truck, we're talking 55 grand.

[Rachel Cruz]

After he's been driving it for two to three years. I mean, like, yeah, I, I think.

[Dave Ramsey]

I would take the hit too. And, and just, just, you know, you're also going to get a, a real raise here after you start knocking out some of these debts. So. I agree with Hubs, but I, but I would. But the. I want to make sure you hear what we're saying. Work the snowball. Okay. And he's right about that. With the extra income, however, take the hit and get rid of both cars. Yeah.

[Rachel Cruz]

What were you doing before Shelby, before you went home as a stay at home mom?

[Ken Coleman]

Yeah, I was a court clerk.

[Rachel Cruz]

Okay. Okay. Because I'm just trying to think. I just know a family right now personally and she's worked, she was a stay at home mom for years and she's working three days a week now to get them moving and going. So I'm like, I just, I just wonder for a season if there is something that's. And I don't know what that looks like. I don't know if you probably can't do that virtually.

[Ken Coleman]

I was going to photography business on the side too.

[Dave Ramsey]

How many hours a week are you spending on that?

[Ken Coleman]

It's not super regular that way, but I'd say It's probably maybe $1,000 a month.

[Rachel Cruz]

That's.

[Dave Ramsey]

I'm wondering.

[Rachel Cruz]

Great.

[Dave Ramsey]

But I'm with Rachel on this. I wonder if we take that skill set and experience of being a court clerk. So we're talking about details, right? Good listener. You're administrative in nature, is that right? You enjoy that and you're good at it.in the eyes crossing the T's. I wonder if you don't look into maybe doing virtual executive assistant or something like that.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Even if it's 20 hours a week, 30 hours a week. Because you can do that in your sleep. Something like that.

[Rachel Cruz]

Yeah. Because I'm just thinking, how much do you guys make a year? When he goes back to his normal salary, how much?

[Ken Coleman]

About 100,000.

[Rachel Cruz]

A hundred thousand a year.

[Dave Ramsey]

And what was your previous salary as a court clerk?

[Ken Coleman]

About 55.

[Dave Ramsey]

Oh, I wonder if you can't get 40,000, 50,000. As an executive assistant, you do it all virtual.

[Rachel Cruz]

I'm just running really fast math here, but I'm like, if you guys are using all this extras, I'm going down my list. And if you go and get that loan for 30 and 7 and pay the cars, it's basically right at $50,000 that you guys have left with those cars. And then the other student loan, personal loan. So that's kind of what it goes down to. To say after all the smoke clears, we're going to have about 50 grand left to pay off. We make a hundred grand.

[Dave Ramsey]

That's doable.

[Rachel Cruz]

Yeah. So I'm like, I mean, what if we. Yeah. What if there was something for six months? You know, it doesn't have to be long. That there's just something to bring in. Just because the whole goal here, which, you know, but is just to fast forward this process, do this as fast as possible. We call it gazelle intensity, but just get through it as fast as possible. And there's gonna be some sacrifices, things you don't want to do, but it's for such a short amount of time. It's six months to a year. And. And be done with all of this. Right. And then save up for the emergency fund and replacing your cars, because you guys are going to want new cars after the beaters that you buy that are crappy. But it's just this idea of this progress really fast. So, yeah, the. The photography stuff's great. I mean, a thousand bucks is usually what we see, a side hustle people bring in. If they can bring in a thousand dollars a month, that's great.

[Dave Ramsey]

And that's great, by the way. Shelby. I didn't want to sneeze at that.

[Rachel Cruz]

No.

[Dave Ramsey]

But I do think there's something even more.

[Rachel Cruz]

Yeah. You have a lot to offer.

[Ken Coleman]

Yeah.

[Rachel Cruz]

So I'm just like, man, I wonder for. You know, and I know it's not ideal, and I know as a mom, too, you know when you decide. Because I even pulled back from work a lot when my third was born, and you kind of have this mindset of like, okay, I'm going to be more present as a mom. I'm here. And so to kind of rewind that a little bit and plug work back in. Yeah. That's a hard mental. It is obstacle, Shelby. So I get that. But my only hope in all of it is that it's. It's for such a short period of time, and I really. I think I Think you guys can do this and work as a team? But to answer your original call, Shelby, I think we agree with the husband. Throw it at the debt snowball, but Ken and I both agree. Sell those cars, take a loan for the difference, and keep on going.

[Dave Ramsey]

Make no mistake, it's going to be painful to drive a piece of crap for a while, but if you got your mindset on where this gets us, then you can drive anything. And here's the deal. Park around the corner and walk a little bit.

[Rachel Cruz]

When you go through a job loss or job change and lose your employer sponsored health insurance, there's no better time to try Christian Healthcare Ministries. That's right. There's another option besides COBRA to take care of your family during that time. Because if you didn't know, the cost of COBRA has gone up a lot in the past few years. And CHM is an affordable, biblically based alternative to health insurance. So do your own research. CHM is a great option that's potentially a third of the price of cobra. It's a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And the support you get from CHM goes beyond helping you pay for medical bills. Members become part of a family that prays for them when they have a medical event. Try getting that with cobra. So if you're going through a job loss, life change, or just want to explore other options to save on health care, CHM might be perfect for you. CHM programs start as low as $98 a month. So find out [e-mail] budget. That's chministries.org budget.

[Dave Ramsey]

All right, let's go to Rachel in Phoenix, Arizona. Rachel, how can Rachel and I help you?

[Ken Coleman]

Hi. Thank you so much for taking my call, you guys.

[Dave Ramsey]

You bet. What's going on?

[Ken Coleman]

So my question is, I have a studio that I would like to renovate, and it's going to cost about ten grand. And would it be a bad idea to rent it out to my parents?

[Dave Ramsey]

Ugh. I'm going to go ahead without any information and say yes. But I. But I'm going to admit early on, Rachel, that might be a snap reaction.

[Rachel Cruz]

That was a snap reaction, Ken.

[Dave Ramsey]

I'm owning this. Okay, tell us more.

[Rachel Cruz]

Yeah, give us more of the. Of the.

[Dave Ramsey]

Why? Why would we do that?

[Ken Coleman]

Okay, so I got this idea and I got the sense of urgency because my father shared with me his retirement plan in January and he has very bad spending Habits. He did say that his plan is to retire in Mexico, be a gold miner with $30,000 that he has, and basically leave my mom here with his Social Security check so she can keep paying their rent. And their rent is $1,200, and that's the same exact amount that he gets for Social Security. So I'm kind of freaking out here and thinking, you know, my mom won't be able to keep up with that payment on her own. So I know my dad is going to splurge and spend his money in about one or two years and he's going to come back and want to also move in with my mother in the back studio I have. So in order to maybe not enable his bad spending habits, that's where I was like, okay, what if I charge them rent? And part of it would be to pay me back for the renovations I've done, but the other part is to secretly fund for their retirement and any future bills that. That's going to fall on me.

[Rachel Cruz]

But you're not going to get paid. Do you realize that, Rachel? They're not going to pay you. They're not gonna have any money.

[Dave Ramsey]

Yeah. This is a disaster.

[Rachel Cruz]

Okay, so Rachel, you can't stop. I want to know how you, how are you financially? How much debt do you have? How much savings do you have?

[Ken Coleman]

Thankfully, my husband and I are almost debt free. We have a paid off mortgage, savings. We both have about a hundred thousand.

[Rachel Cruz]

Okay.

[Ken Coleman]

For retirement.

[Rachel Cruz]

For retirement.

[Ken Coleman]

Okay. 5,000 for emergency.

[Rachel Cruz]

5,000 for emergencies. How much debt do you have left?

[Ken Coleman]

500.

[Rachel Cruz]

Oh, okay. So you'll pay that off this month. I mean, you'll. That'll be done. That's amazing. Okay, so how much do you guys make a year?

[Ken Coleman]

We make 120, 000.

[Rachel Cruz]

120, 000. Okay. So, man. Okay. I have so many thoughts.

[Dave Ramsey]

I have lots of thoughts. Do you want to go first?

[Rachel Cruz]

You have what? You have what?

[Ken Coleman]

We have two boys that are four, four and six years from going to college. So we're trying to hurry up and pay for a college fund. Yeah.

[Dave Ramsey]

So here that. Okay, so I got to jump in real quick with a question then. I'm with Rachel. I don't think you can expect any money from them. So for this moment, let's suspend this idea that they're going to pay you and help pay this thing off and whatever, whatever. My question is, if they live with you in this studio, how much money are they going to cost you? Assuming they don't pay you rent is it going to be any kind of a utility suck or something? Like, is it minimal as to what they'll actually cost you and your husband?

[Ken Coleman]

Yeah, I'll say it's minimal. Maybe combined with electricity and whatnot, It'd be like 300.

[Dave Ramsey]

Okay. I just wanted to know that. I also wanted Rachel to hear that, too. So it's going to be a minimal increase because we have to assume, I think Rachel's right, that dad's going to go do something really dumb and, boy, oh, boy.

[Rachel Cruz]

Is gold mining, like, a thing in Mexico? Is that like a. I have.

[Dave Ramsey]

That was a question I had. I don't hear a lot about it. So I. I don't know what.

[Rachel Cruz]

Video real, Rachel, or is he kind of just saying, like, I'm just gonna leave?

[Ken Coleman]

Well, no, he really wants to be Yosemite Sam because he did it in his teenage years, and he has a friend who has a golden.

[Rachel Cruz]

How old are your parents, Dance varmint?

[Dave Ramsey]

Sorry. I just had to say that for everybody who knows who Yosemite Sam is, It's an older demographic. I got a point out.

[Rachel Cruz]

All the boomers are laughing.

[Ken Coleman]

How.

[Rachel Cruz]

How old are your parents, Rachel?

[Ken Coleman]

My dad is 71 and my mother is 61.

[Rachel Cruz]

Okay. And how old are you guys?

[Ken Coleman]

We're 35.

[Rachel Cruz]

Oh, man.

[Dave Ramsey]

Okay, this is a.

[Rachel Cruz]

So here. I mean, here's the reality. And this is what's always so difficult about family relationships. When the child. When you're the parent, that's what's happening. Rachel, you are flipping, and that's not fair to you. So I just need to say, first and foremost, this is not your responsibility. It's not like you can only control you. They are going to dig themselves into whatever hole, finding gold or doing whatever they're gonna do, and literally gonna dig.

[Dave Ramsey]

Himself in a hole.

[Rachel Cruz]

So, like. Like, you can't stop that. Right? And so there is one side of the coin, and some people are like this, where they're like, we are putting up a boundary, right? It would be like if your husband was like, we are absolutely not funding your crazy parents. No, we're not doing this. Like, some people put a hard boundary, and it's like, mom and dad, y'all have to grow up at some point. And I'm not gonna be the safety, and I'm not gonna be the parent. So that's one side of the coin. Ken may lean more on that side.

[Dave Ramsey]

Oh, I promise you. You know me well.

[Rachel Cruz]

I know, but then there's another part, Rachel. A human part with a heart.

[Dave Ramsey]

I have a Heart. I also have a brain that does.

[Rachel Cruz]

Say to a point, like, am I really gonna let my parents be on the side of the road if I have the ability?

[Dave Ramsey]

They're not gonna be on the side of the road. You know why? Because Rachel's mom is gonna look at. And if I went to Stacy, my wife.

[Rachel Cruz]

But you're not 20 parents. You're not her parents.

[Dave Ramsey]

But. But Rachel, your mom, at some point, is going to tell your dad to wake up and smell the coffee, is she not?

[Ken Coleman]

She has. And we've had the pastor intervene and family members with the spending habits, and that's why they are where they are right now.

[Rachel Cruz]

Does your mom. Does your mom work?

[Ken Coleman]

She works 12 hours a week.

[Rachel Cruz]

Okay. Well, if I were her. If she was calling this show Rachel right now, I would tell her, as much as we talk about commercial combining finances and being one as a team, he is. He. He is the most risk possible for her not to retire. So if I were her, I would be working 40 hours a week, and I would be creating my own retirement. I mean, honestly, because he's a child. Like, this is, like. This is crazy.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

You know what I mean? Like, it's just.

[Dave Ramsey]

But here's. Here's something I want to point out. Rachel, please speak up to this, okay? Because I'm just.

[Rachel Cruz]

Rachel. Phoenix. Rachel.

[Dave Ramsey]

Rachel and Phoenix, I believe that this is kind of like a teenager. I think your dad needs to be treated like a teenager. And that's why I agree with my partner here. Rachel's advice on this. Have mom take care of mom for a bit, Because I don't think anybody's going to get through to this guy. The only thing that's going to get through to him, as Davis said this for decades, when you land so hard, you bounce. And I think this guy. I hate this, what I'm about to say. But I think the family, including your mom's, going to go, all right, pal, Go to Mexico, please, for the love of God, be safe. But let the guy go digging and let him go gold mining. And when he doesn't find any gold and he runs out of all money, he's a bit of the prodigal here.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

And I think it's the only shot.

[Rachel Cruz]

You have hitting rock bottom, like, is.

[Dave Ramsey]

To let this guy get this out of his system. He's 71. I think this is his last hurrah. And I think he probably doesn't even realize it, I think, to get his attention. But I think mom protects herself. I agree so much with Rachel Cruz. On this. Rachel, your thoughts on that? I mean, where's mom at on this deal? Because you're trying to help and I don't think, by the way, I want to make sure we come back to this, this point. I don't think this is your problem. Even though it feels like it. I don't think it's your problem.

[Ken Coleman]

So my mom opened up her own secret account but for 20,000. And she's afraid that she has to speak on it when they file their taxes together. And he's going to find out.

[Rachel Cruz]

Not for a savings account.

[Ken Coleman]

No, for high yield savings. She doesn't need a report to Texas.

[Rachel Cruz]

No, just earned income. Right. Investments. I mean, if you're.

[Dave Ramsey]

I don't think so. I don't think so. I would, I would. Here's the deal. I'm not a tax pro. I was certain about it until you looked at me sideways and I was like. Then I started thinking, I don't think that's going to be an issue. But I would again, I would have her consult with a tax pro. Go to ramseysolutions.com.

[Rachel Cruz]

He'Ll know what she earned.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

So that he will.

[Dave Ramsey]

But again she's. But listen, that's okay.

[Ken Coleman]

Yeah.

[Dave Ramsey]

I'm okay with that conversation. I'm not suggesting, by the way, this is a secret.

[Rachel Cruz]

That's right. Don't even make it.

[Dave Ramsey]

I think she needs to be bold and go, hey, Yosemite Sam. I got to take care of me. Because there's a good chance. This is really going to be harsh, but I'm going to say it. There's a chance this guy goes down there and, and, and falls into something bad. I mean, I. Gold mining in Mexico. You might as well get on a roller coaster without the seat belt. I don't think this is a wise decision. I'm not in any way making light of that. But she's got to protect herself. And I would say to her, she looks at him and goes, you're putting us at risk.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Which is a crazy venture.

[Rachel Cruz]

So the renting the studio thing, I wouldn't do it. I wouldn't do it. And the only way I would do it is that it's a ministry to mom and dad and we don't need the income as rental and we're going to fix it up for them. And it's there for them if they.

[Dave Ramsey]

Need a landing daughter.

[Rachel Cruz]

But, but like I would expect 00 money from them. But if you guys need this as rental income for your life to fund your kids college. Sorry, mom. And dad, we're renting someone else.

[Dave Ramsey]

Tell you one thing I am going to do. I am going to see what the gold mining situation is in Mexico. I she's got my Ken doesn't show.

[Rachel Cruz]

Back up to the show. We know where he's gone.

[Dave Ramsey]

Ken went to Home Depot to get a bunch of pickaxes.

[Rachel Cruz]

Hey guys, I'm Jade Warshaw and I want to talk to you for a.

[Dave Ramsey]

Quick second about student loan refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today@l Laurelroad.com Ramsey There you'll find helpful resources like a student loan rate table, a refinancing calculator and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5% and you can get your interest rate even lower if you sign up for autopay. But if your situation is more complex, sign up for a free 30 minute consultation with one of their student loan refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan, so make sure you run the numbers. But for some people it is the right move. Learn more@l Laurelroad.com Ramsey to find out more about their student loan refinancing, that's laurelroad.com Ramsey Laurel Road is a brand of KeyBank National Association. All credit products are subject to credit approval. All right, let's get to our Ramsey Show. Question of the Day. It's brought to you by why Refi? If you're feeling stuck with defaulted private student loan payments, why refer? Refi can reduce your payments and help you regain control of your finances. Take the first step towards getting unstuck by visiting why refi.com Ramsey that's the letter y r e f y.com Ramsey it may not be available in all states.

[Rachel Cruz]

Today's question comes from Antonio in Indiana. I am 22 years old and getting married this year. Once we combine finances, we will have no debt and we'll be making 202, $205,000 a year. While we feel extremely blessed, we just recently started earning this much, so it's a little intimidating. In the next two years we could easily save for a 20% down payment in Addition to an emergency fund. Do you have any tips on how we should remain content with renting during that time? The longing to reach my goals. Often in the clouds. Often clouds. The journey it took to get there. And I don't want that to be the case for the first two years of marriage.

[Dave Ramsey]

Oh, that's good. Very good question. What say you? You're the queen.

[Rachel Cruz]

I don't know. Preaching to myself all the time, Ken. Okay, I don't. This may be a little Pollyanna, but I also think when you get married, that's such a newness in life that this whole thing of like, oh, gosh, I gotta, like, do the next thing money wise, the intensity kind of changes in a sense, because your whole life has changed. Like, you're starting this new life with a. With a new partner and like you're doing all of this. So there's almost this element of life that changes, that's exciting, that may kind of help naturally, kind of loosen this like, discontentment you may feel towards a money goal. It's like when you have a baby, right? Like, it's just. Something just changes and you kind of have like this new thing in life. And then once you kind of get the rhythm of that, if we ever get the rhythm of marriage, let's be honest, it's like then from there, you guys, I mean, that then you'll be like, okay, we have 12 months and we'll be good. So I think being as present as possible, though, I've learned this, Ken, recently with some stuff I've been reading, because staying completely present is so difficult because we're always thinking forward extremely or thinking backwards of like, oh, gosh, even at lunch today. I mean, you're just. Where our minds go. It's rarely in the present. So it's almost a practice to be present. I mean, it really is because we just, we're either forward and back all the time. So I think it's hard for a lot of people. But also, I don't know, Antonio, I think he'll be okay. I think that there's a fun new element of your life that's about to change with marriage. And you're going to enjoy that. And I don't know, there'll be enough distractions, I think.

[Dave Ramsey]

When I was 14, I had an old pastor tell me, looked me in the eye, and I'll never forget, he had his bible in his hand and he kind of thumped me on the shoulder. He says, young man, hear me on this. Don't sacrifice the future on the altar. Of the immediate. That's a lot of old man speak. But what that statement says is don't risk or sacrifice your future on how you're feeling in the now. And so to Antonio, I would say, how do you stick with renting while you're accumulating that down payment, you start looking towards the future. And you say, if I wait and I get that 20% down payment and I do it the right way and I buy that way, when I'm ready, my future is so much better. But if I don't wait right now and I go in and I become house poor, what is that going to do to my mind, my wife's mind?

[Rachel Cruz]

Yep.

[Dave Ramsey]

So just look out to the future and go, what do I want that future to be? And that's going to require me to sacrifice. Now you want to go lose weight. You want to lose 30 pounds by summer? Well, now we start to go, I have got to win the now and I've got to be disciplined in the now or else I don't get where I want to be. You can pick any category of life. So that would be my encouragement there. Two things I want to get to really quick. I want to go back. You and I did a little research. You did the research?

[Rachel Cruz]

Oh, yes.

[Dave Ramsey]

I want to cover that tax question for the interest.

[Rachel Cruz]

Yeah. So the interest earned on the high yield savings, if it's over $125 in 20, 24. Yeah, it is. It is considered earned income. So if she. Which depending on how long she's had that 20 grand in the high yield.

[Dave Ramsey]

That's right.

[Rachel Cruz]

Yep. There will be taxes on that. But to. But we'll circle back to that call again, is who cares if he learns about it?

[Dave Ramsey]

It didn't change our advice.

[Rachel Cruz]

He should be learning about it.

[Dave Ramsey]

He should know about it. But we did want to. We wanted to clarify that. By the way, that's a what we would call a simple tax situation. So if you have a simple tax situation, I want to make you aware of Ramsey Smart Tax. We're really excited about this. This is a 100% accurate tax software that's going to save you up to 80% compared to what you see on TV and commercials. And here's what's cool. It's powered by Tax Layer. A lot of, you know, tax layer. So Ramsey partnered with Tax Layer. They've been in the industry for 50 years. We've got it doctored up the Ramsey way. So that's a great simple tax solution. It's called Ramsey Smart Tax. You can get it at ramseysolutions.com smarttax Again, that's ramsaysolutions.com Ramsey Smart Tax. All right, I think you call that Wooster. We'll find out. Is it, is it Worcester?

[Rachel Cruz]

I have a fun fact about Worcester. I got take pictures.

[Dave Ramsey]

Oh, you want to get her on it? Okay, so let's go to Jessica. Jessica, is it Worcester? Mass.

[Rachel Cruz]

Worcester, Worcester.

[Dave Ramsey]

Oh, I should have known.

[Rachel Cruz]

Jessica, do you know Holy Cross that's there?

[Ken Coleman]

I know Holy Cross very well. My best friend graduated from Holy Cross.

[Rachel Cruz]

Okay. My brother in law played basketball there.

[Dave Ramsey]

Fun connection.

[Rachel Cruz]

Yes, I know. And I went to an American versus Holy Cross basketball game in D.C. did you really? And watched it happen. So anyways, that's my fun connection.

[Dave Ramsey]

Did you get a funnel cake while you were there?

[Rachel Cruz]

No, I thought it was cool. All right, how can we help you Jessica?

[Ken Coleman]

Well first, thank you guys for what you do. I'm really grateful to be speaking with you. And my question is a little bit of context really quick. My husband and I are currently working baby step two. We've been working it since July of last year. We are on pace to complete baby step two at the end of April. So next month and then we will be at baby steps. Thank you. Four and five by this August. So saving for our kids college fund this August. But at that time our twins will be 15 and heading into their sophomore year of high school. And while I wish we found you guys sooner, we didn't. So we will be starting from scratch. And my question is what is the best way to go approach saving for their college fund knowing that we're going to need to dip into it within three years? Does it still make sense to invest in a 529? Is there something else that you would recommend is my question?

[Rachel Cruz]

Honestly I would recommend a 529 more to you guys than even others. We always, we always recommend a 529 because it grows tax free for educational purposes. So the money in there, the, the big fear around 529s, especially people that have young kids is that they're going to overfund it and or college is going to change so much between now and 18 years that who knows like if that money gets stuck. So there's some ca around it with people with younger kids. But for you guys, I mean, yeah, I would for sure I would sit down with a smartvestor pro because they're going to be able to look at what the market's doing. They're actually a lot of these financial advisors who are great. They're going to be able to run these numbers to know, okay, should they go in more aggressive funds, more conservative funds. And they're going to do the best to really work with you guys. But I. Yeah, I mean, if I were you, I would, I would, I would go ahead and invest into a 529 for them. Are they, what's, what's expectation of college for them? Is it state school, community college? Where. Where are they? Are they scholarships in the future? What are you thinking?

[Ken Coleman]

Great question. So it's a little bit up in the air. There's definitely the possibility of, you know, college. So I've got a boy and a girl. My daughter is considering, you know, being a vet. They're in an agricultural high school right now, but they both are also talking about potentially joining the military to help fund their college. There's so much up in the air.

[Dave Ramsey]

GI Bill would be an answer to prayer for you, wouldn't it?

[Ken Coleman]

Absolutely. And we've learned that, I guess the Army ROTC pays for vet school as well.

[Rachel Cruz]

Yeah. How much do you guys make a year, Jessica, you and your husband?

[Ken Coleman]

Combined, we make 240. Okay.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Okay, so follow up. Let's go right where you left us off in the, in the actual question. 10, 11, 12, those high school years, how much do you anticipate that you could sock away in each child's 529? What do you think that would be?

[Ken Coleman]

So I'm projecting that once we get into August and we're at that step five, we'll have approximately five to 6,000 each month of extra, you know, what was previously our snowball.

[Dave Ramsey]

Split it up, let's say 2,500 each, maybe a month, potentially.

[Ken Coleman]

But then there's also things, you know, I'm the nerd in the relationship. So I'm thinking, all right, we're both going to need new cars in about two years.

[Dave Ramsey]

You can't take all that surplus and split it to the 529.

[Ken Coleman]

Right.

[Dave Ramsey]

So what do you think is more realistic?

[Ken Coleman]

I was. I don't know if, you know, a thousand each makes sense. So it's like half of it is going to 529 and half of it going towards other. Yeah, that's kind of what I was thinking. Yeah.

[Rachel Cruz]

And I think too, Jessica, number one, communicating with the kids. You guys all need to be on the same page of what's happening here. No debt. Debt is just off the table. So what other options do we have besides that? Is it community college? Is it not and you guys are in the northeast and they love their education up there. So that may be a humble pill to swallow too, that they may not go to the college they want.

[Dave Ramsey]

I'm going to say this though. If my kids were thinking about the military, what a great growing up experience. Not to mention the financial benefit. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order?

[Rachel Cruz]

Yes, I have, George. Sketchy. And never trust them.

[Dave Ramsey]

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

[Rachel Cruz]

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

[Dave Ramsey]

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

[Rachel Cruz]

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

[Dave Ramsey]

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

[Rachel Cruz]

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

[Dave Ramsey]

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

[Rachel Cruz]

It's amazing. So again, that's joindeleteme.com Ramsey. Make sure to check it out, you guys.

[Dave Ramsey]

This is the Ramsey show where America hangs out to talk about your money, your profession, and your relationships. Alongside Rachel Cruz, I'm Ken Coleman. Excited that you're with us. The phone number to jump in is 888-255-2225. Billings, Montana is where we're going to go. Christy is there. Christy, how can we help?

[Ken Coleman]

So I have been in a relationship for about 10 years and I am very much secure in my assets and my boyfriend is not. And I wanted to know if there's anything that I could do to avoid or to protect my assets from what could possibly be common law marriage.

[Dave Ramsey]

Well, okay, so when you say could be possibly Rachel and I are not common law marriage experts. We certainly don't know the law in Montana. So what do you know? Because it sounds like you're uncertain.

[Rachel Cruz]

I don't know.

[Ken Coleman]

I think there's a seven. He's not living with me right now. We're talking about it, but I think there's a seven year living together.

[Dave Ramsey]

And you guys have been sharing a residence for seven plus years?

[Ken Coleman]

No, no, no, we have not as of yet. And I don't want to get there. I don't want to be put in the position that it becomes a common law marriage.

[Rachel Cruz]

What's up with the relationship?

[Dave Ramsey]

Yeah, that's what I want to know.

[Rachel Cruz]

What are you guys doing? Why don't you get married? Do you love us and married?

[Dave Ramsey]

We're older, but what does that have to do with anything?

[Ken Coleman]

Why aren't we married? Because we didn't see. We live in different cities and we didn't see a reason to. Like, we've had kids, we've done the whole thing.

[Dave Ramsey]

You still live in separate cities?

[Ken Coleman]

Yep.

[Dave Ramsey]

How far away?

[Ken Coleman]

It's. It's great. You should try it.

[Dave Ramsey]

Okay. Wow, that's. That's a little awkward. I'm very happily married. I'm rolling into 27 years and I actually. This is going to freak you out, Christy. I sleep in the same bed as Stacy. It's wonderful. You should try that. Now, I will tell you, mouth tape has really helped. It's. It's helped. I use the mouth tape now. Rachel, I haven't told you that.

[Rachel Cruz]

Old man. That's an old man move.

[Dave Ramsey]

It's a great marriage. Stacy's happy about it. Okay, so you. How far apart do you all live?

[Ken Coleman]

A couple hours.

[Rachel Cruz]

Okay, so how often do you get together? Why are you worried about the common law marriage? You guys aren't living together?

[Ken Coleman]

Yeah, because we're now looking to. So now my daughter's in college, so we're now looking to. What does the future.

[Rachel Cruz]

How old are you guys?

[Ken Coleman]

I'm 56.

[Rachel Cruz]

Okay, you're not too old.

[Dave Ramsey]

Okay, so according to what I'm seeing here, a common law marriage in Montana is recognized if the parties are competent to marry. I don't know if you're competent to marry after that little comment you made. Mutually agree to. Hold on, hold on. I don't know, Christy. You're a little saucy today. And I can be saucy back.

[Rachel Cruz]

You.

[Dave Ramsey]

You have to mutually agree to the marital relationship and then cohabit. Well, you guys aren't cohabiting for how long?

[Rachel Cruz]

What does it. Does it give a time frame at all?

[Dave Ramsey]

No, no, just his cohabit. We know what cohabiting is.

[Rachel Cruz]

Well, I know, but usually there's a time frame with common law marriage, if you have been together for, you know, 12 years or whatever does it say.

[Dave Ramsey]

But again, have you guys ever lived in the same house?

[Ken Coleman]

Well, for what period of time?

[Dave Ramsey]

Just answer the question.

[Ken Coleman]

Yes, we have.

[Dave Ramsey]

How long?

[Ken Coleman]

A couple weeks.

[Dave Ramsey]

That's not a common law marriage. I might as well have.

[Rachel Cruz]

A judge's going to, though. She's going to. You won't like.

[Dave Ramsey]

You're gonna have to do it for a long period of time on that deal. I just. I. I'm not sure we can answer your question, because I don't think you guys actually.

[Rachel Cruz]

The definition of it's not going to happen unless you guys are together for living together for a longer time.

[Dave Ramsey]

And I, in this case, would say common law marriage. I don't think under our Ramsey way of thinking, I don't think I'd combine finances. I don't think. I think you keep your assets separately. Your question was, how do I protect my assets? I don't think you guys are combining them, because I don't think this is a real marriage. I think you guys get together for conjugal visits. If I can be very blunt, that's what I think this is.

[Ken Coleman]

It's more than that. You don't do as long as we've been doing for conjugal visits.

[Rachel Cruz]

I'm just saying two hours apart for 10 years.

[Dave Ramsey]

How often do you guys see each other in a year?

[Ken Coleman]

We see each other every weekend.

[Dave Ramsey]

My point exactly.

[Rachel Cruz]

Okay?

[Dave Ramsey]

Just. I'm just saying this isn't a marriage. I'm not judging her.

[Rachel Cruz]

Sorry. You called today.

[Dave Ramsey]

I'm not judging you. I swear. I'm not judging you.

[Rachel Cruz]

Okay, Christy, our advice would be, you.

[Dave Ramsey]

Are keep the assets separate.

[Rachel Cruz]

You still have a good, you know, 30, 35 years together. You could have a longer marriage than what Ken has today for 20. Married.

[Dave Ramsey]

That's not a marriage.

[Rachel Cruz]

No. What they could have if they got married. They're not going to, but that's what I'm telling her. She called our show. She doesn't want to get married. That I would get married.

[Dave Ramsey]

Oh, okay.

[Rachel Cruz]

You have another 30, 35 great years, maybe. My papa's 96, so that's what, 45?

[Dave Ramsey]

I mean, like, I love your sweet.

[Rachel Cruz]

You've got a long way to go, Christie. And so all of this would be summed up if you're like, yeah, we want to be in a committed. If not, then don't have a permanent residence together, and the common law marriage isn't even an issue.

[Dave Ramsey]

And keep assets separate.

[Rachel Cruz]

Separate.

[Dave Ramsey]

That was my.

[Rachel Cruz]

But I think some people will go to court if they. If they break up, though, I think that they can. It can feel like a marriage where it's 50, 50, regardless of. I don't know.

[Dave Ramsey]

Anyways, Christy, now, after all of that, and I tried to answer your question honestly. I'm having fun with you, but I'm dead serious. Everything I said, I completely stand behind. No judgment, by the way. Zero judgment. You do what you want to with your life. I'm a libertarian on that deal. All right. What I am saying is, is that I would keep the assets separately because I don't think you guys actually want to even do the common law marriage. Am I missing that, or is that what you're saying you're thinking about doing?

[Ken Coleman]

So that's. Well, if we're thinking about marriage, possibly we're thinking about moving in together. We're thinking about a lot of different options, but.

[Dave Ramsey]

Well, if you move in together, I agree with Rachel. You should get married. It's. The statistics are absolutely undeniable that it is better for you. And Rachel's right. You're gonna have a greater quality of life.

[Rachel Cruz]

Now, if you don't love him and he's not marriage material, then I wouldn't be living with him anyways. Do I?

[Ken Coleman]

Yeah. I wouldn't be having this conversation if that wasn't the case.

[Rachel Cruz]

Yeah, it's right. Exactly. Exactly.

[Dave Ramsey]

I don't know. I don't know if. If you love this guy.

[Ken Coleman]

So hesitant in this, because I.

[Dave Ramsey]

Here's why. I'll tell you why I'm hesitant. And I'm on your team. He didn't call. So underneath this snappy sweater here, I've got a Team Christie shirt on. Okay, so I'm cheering for you. I mean, this. Okay, here's another.

[Rachel Cruz]

You're better off financially, Christy.

[Dave Ramsey]

Yeah. So what I'm hearing is, if you were my sister Christie, I'd be like, sis, what are you doing? You don't love this guy that much. If you did, you couldn't stand and be away from him. My wife left town last week with my daughter for a trip with her sister, and they were gone for four nights. I really, truly missed my wife. I could not do what you're doing. So maybe, and I'm honest about this, maybe it's just me, but I don't see enough evidence that you really want to commit to this guy and truly marry this guy. Based on one of the first. First comments. You said you're like, well, I said, why? And you went, well, we're just older now, and I think you've rationalized it. And I also don't think that you can. I think you can live without this guy. And this is not my opinion. You see this guy once a week and you live a couple hours away. That ain't leaving Cleave, in my opinion. Now, I'm old school, and I don't mind when you push back on me, but. But, Christy, that's why I'm a little bit cynical. I think if you would have said, you know what? We've done it this way for a long time, but now I just can't. I can't live without him. And I want us to have our life completely intertwined, for better or for worse, rich or poor, bad Tuesday night. Great. Thursday morning. Whatever. I don't hear that from you, so therefore, I don't want you to do it.

[Rachel Cruz]

Is there any fact, Christy, that there's a level of you that you've handled money well, you're successful, and he hasn't? That's a little bit of a deterrent.

[Ken Coleman]

That's a huge deterrent. Ah.

[Dave Ramsey]

Oh, you buried the league.

[Rachel Cruz]

There we go.

[Dave Ramsey]

That would have been nice to know five minutes ago. I definitely stand by what I think. Do not move in with this dude. Do not marry this dude until you guys are on the same page.

[Rachel Cruz]

Don't marry him unless you're on the same page. And don't combine your finances. Keep them separate.

[Dave Ramsey]

What are we doing on the weekends? Christy, what are you doing? This guy's not, like values. I stand by what I said. I wasn't trying to be salty.

[Rachel Cruz]

I like Christy, but this is a.

[Dave Ramsey]

There's a guy in the lobby that agrees with me. This is adult conjugal visits. We're playing house. I got head shaken all throughout the lobby. I stand by what I say.

[Rachel Cruz]

Rachel, Stand firm. Ken, stand firm.

[Dave Ramsey]

It's tough being a Puritan. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something. Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately Went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them. Me, too. They don't know what to do next.

[Rachel Cruz]

You're going to have a crisis here.

[Dave Ramsey]

You know, you got two options.

[Rachel Cruz]

While you're sitting and talking to a.

[Dave Ramsey]

Young widow, she's concerned about how she's.

[Rachel Cruz]

Going to invest all this money properly.

[Dave Ramsey]

And not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly. These are the two options.

[Rachel Cruz]

It's saying I love you to your family.

[Dave Ramsey]

Term life insurance, Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. People ask me all the time. George, what's your number one money saving hack? Glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional cut back and save more money. So how much money are we talking here? Well, the average EveryDollar budgeter frees up $395 in their first budget. That's the hack. And if you ask me, I think you're way above average and you'll save even more. So what are you doing still listening to me? Go download the EveryDollar app for free and start saving more money right now. Let's go to sue in Sacramento. Sue, how can we help today?

[Ken Coleman]

Hi, thanks for taking my call. Yes, we have baby number seven on the way and we are considering a move to Texas. My husband and I have been talking about it and I wanted to bring it by to you guys and see what you thought. We're coming into some money. We don't have a lot of savings, but we're trying to decide if we want to pay off debt first and stick it out here or move to Texas for lower cost of living and so my kids can go to school.

[Dave Ramsey]

Wow. Sounds like there's two really good positives. Is this also a good professional move for both of you?

[Ken Coleman]

It could Be, there's definitely jobs in the same price range as what we're earning now. So it's going to be about the same.

[Dave Ramsey]

Okay.

[Rachel Cruz]

Earning just different taxes.

[Dave Ramsey]

But if we combine that with the other two issues, that sounds like this is a real big win. So what when somebody calls in this situation and it sounds like, you know, there's a lot of positives here. What are you considering? What are you worried about that you want to get our take on? What do we not know that's giving you pause?

[Ken Coleman]

Right. Well, the main thing is just that, you know, we've outgrown our house here, we've outgrown our car here. We're always in the, you know, falling into the negative, and we do still have debt to pay off. So it's like when we do come into this money, you know, are we going to be spending it on making a move? Because obviously it's going to cost a lot to move seven kids out to Texas.

[Dave Ramsey]

Oh.

[Ken Coleman]

Or are we going to try to get our situation looking a little better?

[Dave Ramsey]

Okay, so let's go into that. So let's paint the picture here for Rachel. All right, so tell us how much money you're going to get or that you believe you're going to get, and then let's walk through your debt. So how much money are you getting first?

[Ken Coleman]

So about 10,000 is what we got in our. Our tax return. Something like that.

[Dave Ramsey]

Okay. And then tell us your debt situation.

[Ken Coleman]

So we owe 13k on the car and then we have 23k that we're not currently paying in charge.

[Rachel Cruz]

Offs and collection from credit cards.

[Ken Coleman]

Basically. Yeah. Some medical stuff and. Yeah, credit card.

[Dave Ramsey]

Okay. Now what do you think the move is going to cost?

[Ken Coleman]

Oh, I mean, I was thinking it might take somewhere around 8,000. I mean, the whole.

[Dave Ramsey]

I don't think that's unreasonable. What I would tell you to do is get about three or four quotes and let's come down to a pretty concrete number. And so let's just play off the 8,000. Rachel. Let's say the move costs about 8,000 and. But it does lower your cost of living. I'm curious, do you know or can you ballpark what your new budget would be with the lower cost of living so that we know how much more we're going to keep if we're going to have the same jobs? And you said similar jobs, so I'm assuming similar pay. So what's the analysis there? How much more money would you have at the end of a month, if you will, that we could put towards the debt if we move.

[Ken Coleman]

I haven't calculated it exactly, but I know the cost of living is going to be a lot less in terms of everything across the board. Right now we're about 650 over budget every month and that's because of how much we pay in California. And I know Texas would probably give us a lot more wiggle room.

[Rachel Cruz]

Yeah, for sure.

[Dave Ramsey]

I would do it based on this because I think what's not mentioned in this is I think you guys are going to have a better quality of life. Is that what you think?

[Ken Coleman]

Absolutely. Yeah. Right now my kids have no religious freedom to go to school, so I'm not able to work. I work per diem because I'm home with them.

[Dave Ramsey]

And could you work in Texas full time?

[Ken Coleman]

I do think I could work, yes. Yeah.

[Dave Ramsey]

What kind of income are we talking about there?

[Ken Coleman]

Well, I'm a nurse, so I make, I make a good LVM, but I make around $40 an hour. There's some Texas jobs that pay more, you know, out there.

[Dave Ramsey]

Actually, Rachel, I think it's a no brainer because it's not that much, Deb. And they can tackle it.

[Rachel Cruz]

And Sue, I'll just encourage you. I feel like we've heard more and more over the last probably three years or so of people making this move. People.

[Dave Ramsey]

Oh yeah.

[Rachel Cruz]

And I hate to pick on California, but it's just true. They're leaving California and they're going to Florida.

[Dave Ramsey]

This is an extreme example. But you and I have a friend. I will not mention his name because he's a public figure. We have a good friend.

[Rachel Cruz]

Mutual friend.

[Dave Ramsey]

Who essentially bought a house in Nashville on the savings from his taxes in California.

[Rachel Cruz]

Yes, exactly.

[Dave Ramsey]

He's very successful. Yeah, but that's real.

[Rachel Cruz]

But genuinely. Yes. That's crazy.

[Dave Ramsey]

So for that reason, I think this is not. That's the only debt you have is, is.

[Rachel Cruz]

And there's a, you know, and for the kids, school. I mean, you think about that, right? You add on all these layers.

[Dave Ramsey]

The kids get to go to school, she can work.

[Rachel Cruz]

Yeah. Of what life can look like. And then you may guys get in a situation soon and you don't have to work in three years, you know, because you guys are ahead and you've.

[Dave Ramsey]

I love that.

[Rachel Cruz]

Paid off debt and everything.

[Dave Ramsey]

What do you think now?

[Rachel Cruz]

And you think about the housing even? I mean, again, housing is expensive everywhere, but compared to California, I feel like.

[Dave Ramsey]

This is a no brainer. Sue, do you feel better? Worse, the same.

[Ken Coleman]

I feel better. Yeah. I'm excited.

[Rachel Cruz]

What does your husband really hear that?

[Ken Coleman]

Well, it's hard to talk to money money talk with him. He always thinks I'm coming down on him about his income, you know, and it's not that.

[Dave Ramsey]

No.

[Ken Coleman]

You know, I respect him and I appreciate his hard work. I try to come a lot. I appreciate him working hard, but I.

[Rachel Cruz]

Just, you know, does he want to do the move? Has the.

[Dave Ramsey]

That's the question.

[Rachel Cruz]

Has he. Have you guys talked about together as a couple?

[Ken Coleman]

We have. And he's pondering and he's looking and he's, you know, he has his eyes peeled and he's actually open to it a little bit more these days and things have gotten pretty bad. So I, I think he's open to it. But it is hard to talk to money with him about money. I mean, we end up just walking away from the conversation and it's.

[Rachel Cruz]

And it's him. You're saying when you approach it, he gets defensive, right?

[Ken Coleman]

Yeah. Like he just doesn't want to be told what to do or you know, talk about our earnings or.

[Dave Ramsey]

Okay, I got a thought.

[Rachel Cruz]

Why? What, what is it? I'm curious.

[Ken Coleman]

It's just kind of always been that way. I've always been kind of the breadwinner in a way, so I've always made more. And now that I'm a stay at home mom and he's doing it, you know, we cut down so many things that I've become honestly a little bitter and I probably have been not the nicest about it and I mean, I don't yell at him or anything but you know, it's probably not nice to hear that, you know, he's really not making enough to, to provide out here in California.

[Dave Ramsey]

That's exactly tell you right now you just self diagnosed the man. A man puts so much self worth in his ability to provide. And with the dynamics you just shared with us, I think there's some potential healing there. And I think you got to defrost the situation a little bit. I'm not saying it's all on you, but you acknowledge some things and I think the dynamics have changed. And where you were the breadwinner, now you come home, he's not making enough. This is a tough situation. I wonder if we don't pivot this move to a non money conversation. And the move is about life. And I'm curious, with that being said, does he agree with you that a move to Texas would be better for the kids school schooling situation?

[Ken Coleman]

He didn't for. He didn't for the longest and Even a few weeks ago, he didn't agree that Texas has a lower cost of living. I mean, it is completely in denial. It's like a family thing, like wanting to stay by family to understand.

[Rachel Cruz]

But there's family in Sacramento.

[Ken Coleman]

Yes. Yeah.

[Rachel Cruz]

His family, your family.

[Ken Coleman]

They're all the way in Monterey. So. They're all the way. They're far away, but yeah, they're in California. So it's kind of a whole California. We're, you know, we're born and raised here. So the mentality, A lot of people deal with this, you know, it's hard to leave here. Sure.

[Dave Ramsey]

But let me get back to where we were.

[Ken Coleman]

Does he.

[Dave Ramsey]

Does he now agree with you that cost of living is significantly less in Texas? He's on board with that.

[Ken Coleman]

He does. He now agrees. Yeah. What about the schooling and the schooling is, you know, it's a hit or miss with him because he does like that we homeschool. He doesn't love the schools here, but I think in Texas he would be okay with them going to school because it's a lot safer.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

I think you all need to take a weekend trip.

[Rachel Cruz]

Yeah, well.

[Dave Ramsey]

And visit and let him see it. You guys need to pick an area. I'm going to suggest that.

[Rachel Cruz]

Yeah. And I think, sue, you guys need to press into this. I'm just hearing enough of. I understand what Ken said, that so much is tied. I mean, so much of America, let's be honest, of our self worth is tied to our money, what we make, how much is in our account, what kind of car we drive. I mean, so much is attached to that. And, and I. So I understand why he can get defensive, but I also, if I'm being the female in the chair, I'm like, I'm sorry your ego hurts a little bit, but the math shows we are $150 behind.

[Dave Ramsey]

Like, I agree. He needs to get over it.

[Rachel Cruz]

Yeah. We have to do. Something has to change. So that change, either, sue, is you earning extra money, him earning extra money, you guys moving to a cheaper area. I mean, something has to change. So. But. But you. Your dynamic within marriage. I don't like the, the tiptoeing, or we can't talk about this because there's usually no resolution. We end up walking away. Like, like that kind of stuff will follow you guys to Texas as well, and it'll come up. Its head will pop up in a different issue as well. So I want you guys to be so unified on this decision, and it doesn't need to come out of strife or fine. Sue just wants to do it so we're gonna like it needs to be. We have run the numbers and we are in full agreement for our life and our money that this is what we're doing.

[Dave Ramsey]

Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes, but thankfully you don't have to dread filing. When you've got Ramsey Smart Tax, it comes packed with everything you need to file online before the big deadline. That means all major federal forms and deductions are covered with no hidden fees. Plus, with Ramsey Smart Tax, you can save up to 70% compared to other tax software out there. It's a no brainer. Just go to ramseysolutions.com smarttax and see how simple tax filing can be. That's Ramsey Solutions.com smarttax hey, have you heard about the Money and Relationships tour? Dave Ramsey and Dr. John DeLoney are hitting the road and this is going to be a fun, fun night. They're going to be talking about everything from raising kids to handling money fights to making friends and so much more. Here are the cities. Louisville on April 21 Durham on April 23 Atlanta April 25 Phoenix May 5 Fort Worth Worth May 7 in Kansas City May 9. If you want to get your seats to see Dave and John live, go to ramseysolutions.com tour. That's ramseysolutions.com tour and is with everything on the show. If we mentioned anything and you didn't catch the link, you can get the link in the show notes if you're watching on YouTube and podcast. Did you know that James Childs are a fearless producer? He tells me all the time. The show notes are just chock full of goodness.

[Rachel Cruz]

So much stuff in there.

[Dave Ramsey]

So anything we discuss, James wants you to know if you miss it because I garble it or I say it too fast. The show notes, it's all there.

[Rachel Cruz]

You can find it there.

[Dave Ramsey]

Boy. It's the show of Rachel's today.

[Rachel Cruz]

I know.

[Dave Ramsey]

Is it our third Rachel? Oh, it's very exciting. Rachel number three in Lexington. How can we help?

[Ken Coleman]

Hi. So my husband and I bought an investment property next door about two years ago and we would like to know if we should a move into it and renovate it ourselves or just sell the property and you know, take the money.

[Dave Ramsey]

Give us the reasons why we would do either of those. So go with option A. Why do you think you should do that?

[Ken Coleman]

So we currently have our home paid off that we live in the property that is the Investment property is actually next door to us. So combined it's six acres, hillside is really pretty. It shares an easement and it's the only two houses on the hillside. It's just, it's a really pretty location and so we are very attached to it. But the home we live in, currently we have it paid off and so that's a bonus. So we could either that's kind of where we're stuck.

[Dave Ramsey]

But why would. So what I'm understanding is, I'm trying to understand is why would you want to move to this other house next door?

[Ken Coleman]

Okay, so I have four children. There are six of us in the house. And it is a. We currently live in a two bedroom single life. So it's getting really tight and we are needing a solution. And so that's why we're calling. We do. The only debt that we have is the investment property. And we got it at a really good deal. We got it at 75,000 and we've paid it down to around 60,000. And so that is the question of the day. Do we, you know, do we sell it because it's worth more? Do we take that money and we just, you know, what do we do?

[Dave Ramsey]

Okay, I would sell the current house that you're in.

[Ken Coleman]

Okay.

[Dave Ramsey]

And what would you make on that? Any idea?

[Ken Coleman]

We have had people come look at it and realtors and on people who know what they're doing. So a really cool fact is we purchased it nine years ago for $32,000 and it was livable. It was actually really nice. And we bought our little single wide trailer on 2 acres for $32,000. And now we can sell it for at least 120.

[Rachel Cruz]

Oh my gosh.

[Dave Ramsey]

I would sell that and then go ahead and pay off the other house and that becomes your primary residence because it's got the space you need and.

[Rachel Cruz]

You love the little 100% and take the, take the extra money, the 60 grand because you'll, you have, you owe 60, you're going to make 120, pay it off. Means you got 60 left and use that for renovations. Cash flow. The renovations have. Are you guys, do you guys know what you're doing when it comes to renovations or have you ever done that?

[Ken Coleman]

We, we have not. We don't know what we're doing.

[Rachel Cruz]

So I probably would, I would not recommend doing it yourself. I would get a contractor in there and having someone. And they can, oh yeah, do what they need to do and you may have to live in a construction zone for a little Bit. But I would do that just in order to cash flow it, you know.

[Ken Coleman]

Okay.

[Rachel Cruz]

How much work does it need? Is it terrible?

[Ken Coleman]

It. It is not in good shape. I will tell you that it is an old house. It's cute old farmhouse. However, to give you insight, it doesn't have any doors inside, it doesn't have closets. It's a really old house. We have gotten it looked at by contractors and they say that the bones are good, that we would be losing money if we completely demolish it, but we're kind of just stuck because.

[Rachel Cruz]

Have they given you, have they given you a number of what it would take? I mean, I'm sure you guys haven't picked. I mean, that would be a ballpark. But I'm curious.

[Ken Coleman]

They said it would take at least 50,000 and we have 40,000 in, in our savings. So we just are really stuck. We just don't know.

[Rachel Cruz]

You've got a great option, Rachel, with.

[Dave Ramsey]

That cash set aside, plus the profit that Rachel's talking about after you pay off this little house. You stay on the hill that you love. You got the room for the kids. You make it your own. You don't have to get it all done right away, but you got the cash, it sounds like, to do it all.

[Rachel Cruz]

You know what you could do, Rachel? Sell the, sell the trailer, pocket the money, and you guys go rent somewhere for six months. It's not gonna be a fun six months, but to get the house all fixed up and stuff, I like that. Rent somewhere for six months and then you guys move in and you're cash flowing. All of this as you're traveling.

[Dave Ramsey]

You're not in a construction zone.

[Rachel Cruz]

Yeah.

[Ken Coleman]

Okay.

[Rachel Cruz]

It's gonna be a headache. So hear me say that. That's a headache. You're moving twice. But, but am. I mean, all day, right, to be able to do this.

[Ken Coleman]

Our next door neighbors, the, the investment property and the home we live in are technically next door neighbors. So we really. Do you think we could just live in the home we have or move into the investment property and fix it up? You think we should completely get off of the property, correct?

[Rachel Cruz]

Well, in order to get the cash is what I'm saying. But you guys have 40,000. How much do you guys make a year?

[Ken Coleman]

So this year on taxes, we're going to be bringing home about 110.

[Rachel Cruz]

Okay, so four. But you have 40 saved.

[Dave Ramsey]

So you could cash flow without selling the current house you live in.

[Rachel Cruz]

Well, cash flow, the rent. Yeah, but you still got the mortgage on it and stuff. I Don't know. You guys run some numbers and just say, okay, what would our. How would we feel? What would our emotional state be? What gives us the most peace? Is it to sell the current home, pocket the 120, sell off the house? You got 60 left. You guys put 60, 70,000 of cash into it and go rent somewhere, or is it less stressful for you guys say, okay, we're going to pump the brakes a little bit. We're not in a rush. We're going to take some of this 40, we're going to start chunking, paying it off. I don't like that. Because then you're going to have to save up all this.

[Dave Ramsey]

But it's your option. We're giving you multiple options.

[Rachel Cruz]

Yeah.

[Ken Coleman]

Yes. Thank you. It's all sounding really good.

[Dave Ramsey]

I think Rachel's option is cleaner.

[Rachel Cruz]

I do, too.

[Dave Ramsey]

You get rid of the current house, you get. You get all the cash. You go rent, you get the whole thing renovated. That's a little easier. It is a pain to move twice.

[Rachel Cruz]

But it feels like.

[Dave Ramsey]

It feels like now. But again, I think what I'm hearing you say is you guys could cash flow the renovations while staying in the existing house.

[Ken Coleman]

Correct.

[Rachel Cruz]

And then paying the mortgage off later. Yeah.

[Dave Ramsey]

Or at least get it to a point that you can move into it and then whatever's left is not a complete construction zone. I think they got options.

[Rachel Cruz]

Yeah, that's true.

[Dave Ramsey]

So at this point.

[Ken Coleman]

One more question. I'm so sorry. One more question I have for you is I've heard. I've heard people say that it's smart to have rental properties in this situation. Would you suggest having both houses and living in one and renting the other be a good option?

[Dave Ramsey]

I don't think it's enough money.

[Rachel Cruz]

Yeah. Not in your financial situation, I wouldn't. And having renters next door to you.

[Ken Coleman]

Okay.

[Rachel Cruz]

Not a fun. Not a fun.

[Dave Ramsey]

And it's just not a lot of money, you guys. I don't even know where you live, by the way. When you're buying a house for $32,000. That's mind blowing to me. Or the other one for 60. So I just don't think it's going to spit off enough rental income that it's worth the hassle.

[Ken Coleman]

Okay. Yes.

[Dave Ramsey]

So we're going to say no to renting.

[Ken Coleman]

That's very not. Those numbers are not common where we're at. Oh, I know it wasn't blessing.

[Dave Ramsey]

Trust me. I knew that much. I'm no real estate baron, but I.

[Rachel Cruz]

Was like, no, but I Think y'all go to the House on the Hill, Rachel. And whether you guys cash Flow Renovations, then move in, then sell or sell and then move in, I think either way you're great. But cash flow, the whole thing and yeah, go live on six acres because. How many kids do you have?

[Ken Coleman]

We have four little children. Yes.

[Dave Ramsey]

They're just gonna be right.

[Rachel Cruz]

What a dream.

[Dave Ramsey]

You know what I'm picturing in Kentucky? I'm picturing wildflowers. Do you have wildfire flowers on that property?

[Ken Coleman]

I absolutely do. And that's another thing. We're so attached to the property.

[Dave Ramsey]

How do I know these things? I gotta say, I'm also picturing a little. I think you should get the. The. The troop together. How old are the kids? Their ages?

[Ken Coleman]

So we have a 3, 4, 5, and 9.

[Dave Ramsey]

This is perfect. Have you. Have they ever seen.

[Rachel Cruz]

I know, three, four, five.

[Dave Ramsey]

Yeah, she's a busy lady. Have you ever seen the Sound of Music?

[Ken Coleman]

I have. Yeah.

[Dave Ramsey]

I need. I put the little kids together and get to that point. The hills are alive with the sound of Music, children, the von traps, the.

[Rachel Cruz]

Wild flowers, some of the old curtains.

[Dave Ramsey]

I got such a great vibe about this place on the Hill. I. I'm going to go with my partner's recommendation. Sell the current place, go all in, go rent, go all in and fix the other little place up. And then we watch the Sound of Music, we run through the wildflowers. I think it's going to be great. I like everything about it. I hope you're not allergic to pollen.

[Rachel Cruz]

So magical.

[Dave Ramsey]

I talk to people every day who want to know how to do better in two areas. Money and relationships. That's why I'm pumped to bring the Money and Relationships tour to a city near you.

[Rachel Cruz]

Join me and Dr. John DeLoney for a night that will challenge the way.

[Dave Ramsey]

You think about this stuff and possibly change how you live forever. Starting April 21, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort.

[Rachel Cruz]

Worth and Kansas City.

[Dave Ramsey]

Grab your [e-mail] tour before they're gone. So how you folks doing with the baby step? Some of you brand new to it, some of your tests driving it, some of you are in the middle of it. You know, we got a fun little quiz online that'll allow you to check your progress in just a few minutes and get a personalized plan. And this is really valuable because you kind of see, okay, this is where I am. And now I've got some help, some action steps to keep going. Because remember this about the Baby steps. It is about momentum, pure and simple, and there are times where you need that little boost. So if that's you, you can head to the show Notes, click on the link titled are you on track with the baby steps? And complete the quiz. It's. It's really encouraging and it'll actually equip you as well. All right, we're gonna go to Portland, Oregon now, and Karen is there. Karen, how can we help?

[Ken Coleman]

Hi. I'm 68 years old, and I probably have put it all together, have about $75,000 that I don't know if I could or should invest. About four years ago, a financial advisor told me and my situation had totally changed at that point, and he just told me I was too old to get 401ks or buy any property or anything like that and to just live as frugally as I could and try to get as much income as I could within that point. So now, fast forward four years and I still have. I may at some point need to live off that money if my income changes my income stream. So I don't know if I. And I've been doing like little CDs with my bank, you know, three months and six months and that kind of thing, and making a little bit of money there. But I'm really a novice on have, invest anything or if I should or if I could. Yeah.

[Rachel Cruz]

How much are you. How much are you making a year, Karen?

[Ken Coleman]

I. Let's see. I wrote this down. About $53,000 a year.

[Rachel Cruz]

53,000. Okay. And how much per month are your expenses?

[Ken Coleman]

I'm living under them all the time, so. Because I've been tracking for years now to track compulsively. So I'll sometimes live, you know, $1,000 a month underneath what I. My income is. So I don't have the exact number, but it's not.

[Rachel Cruz]

But you're not. You're not in the red necessarily.

[Ken Coleman]

Not at all.

[Rachel Cruz]

Not at all. Okay. Yeah. So you're coming up even a thousand. Okay. And you're how old again? I'm sorry. I know you said that at the beginning of the call. 70.

[Ken Coleman]

68.

[Rachel Cruz]

68. Okay. I'm so sorry.

[Ken Coleman]

In a critical health situation, too.

[Rachel Cruz]

You are? What's going on there?

[Ken Coleman]

I have to have a very serious surgery that is. I'm considered critical but stable.

[Rachel Cruz]

Oh, gosh, Karen. I'm sorry.

[Ken Coleman]

So I can't work.

[Rachel Cruz]

Okay. When is that surgery happening?

[Ken Coleman]

They don't know for sure yet. It's depends on. It's very metabolically challenging and so metabolically, I have to be strong enough to be able to withstand it.

[Rachel Cruz]

Okay.

[Ken Coleman]

And that's what I. That's basically what I feel like is my job right now, is to stay healthy, eat healthy, get it, you know, get healthy.

[Rachel Cruz]

Absolutely. Absolutely. Yeah, for sure.

[Dave Ramsey]

Did I understand you're unable to work right now because of this preparation or you would be unable to work after. After the surgery?

[Ken Coleman]

I think both.

[Dave Ramsey]

Oh, okay. So how are you.

[Ken Coleman]

How are you living right now? I have, since four years ago, have alimony and see, that's unstable. I consider that unstable.

[Dave Ramsey]

Has he been consistent on his alimony payments?

[Ken Coleman]

Relatively.

[Rachel Cruz]

And is that the 53,000 a year? What was that number you gave me?

[Ken Coleman]

Yeah, 53.

[Rachel Cruz]

It's coming all from alimony?

[Ken Coleman]

Yeah.

[Rachel Cruz]

Okay.

[Dave Ramsey]

How long is that? How long will that go? That's not perpetuity, is it?

[Ken Coleman]

I don't know. What do you mean, you don't know specifically? Our divorce order doesn't say specifically when it ends. Well, as long as he's working, I guess is what it says.

[Rachel Cruz]

As long as he's working and making an income, he'll be paying you alimony. How old is he?

[Ken Coleman]

He's a little bit younger than me.

[Rachel Cruz]

Will he be. Do you know. I mean, do you talk to him ever? Do you know what his plans are?

[Ken Coleman]

Well, that's one of the reasons for divorce. Is there? Yeah, yeah.

[Rachel Cruz]

I'm with you on. It's being unstable because you don't. You never know. He decided not to work next year, you know, and. And this is done. So you have $75,000 in savings. Do you have any other savings?

[Ken Coleman]

Yes, and that I just. I. I didn't include that in the amount that I. Because I didn't know how much you wanted here. But just that's for.

[Rachel Cruz]

That was in like the same thing.

[Ken Coleman]

In my checking account. And.

[Dave Ramsey]

Yeah, we need to know your total financial.

[Rachel Cruz]

What's your. What's like in retirement. Do you have any other money saved in retirement or investments or anything?

[Ken Coleman]

No.

[Rachel Cruz]

No. So the 75,000, it's pretty much it. That's everything in checking and CDs. All of it. Okay. Okay.

[Ken Coleman]

Right.

[Rachel Cruz]

Well, I think from a mathematical standpoint, I know that you are living below your means, but I want to know what your means are. So I would give you homework to say, okay, you know, figuring out, do you rent, own a home? What's your housing situation?

[Ken Coleman]

Yes, I rent, and that's my biggest expense. I rent in the least expensive place. Place in the. Where I live. Yeah, but of course, rents are all high. So, yeah, there's nowhere I could go that's cheaper. Yeah. Everything else and I, you know, I miss. Hey, yeah, Put my grandkids through your book too. So what. I mean, I'm doing all the right things. I just feel like there's this, I, this money there. Should I be doing something with it?

[Rachel Cruz]

Okay, my answer is yes, you should be. And what I would do, Karen, I would recommend you sitting down with a Smartvestor Pro. And if you go on ramseysolutions.com and look up Smartvestor Pros, there should be a couple in your area there in Portland and talk to a couple of them and sit down with one that you, you know, interview two or three of them, find one that you like, and sit down and lay out the whole situation. Because some of the 75,000. Yes. Should be invested. Now, should it be invested within a retirement account like a Roth ira? Not necessarily. I mean, you know, a lot of that stuff is to grow tax free till you're 59 and a half. And if you start pulling from it. But you can invest into those past 59 and a half. Right. So I, I would, I would sit down with them and honestly let them run some of these numbers because I want to make sure that you have enough to live off of. And on top of that, knowing. And, and again, the health thing puts a whole other spin factor to your situation, which is terrible. But to note for yourself of like, okay, this money, eventually, if I just, if alimony stops and if this is the only money I have, eventually it will run out. So what do I need to do to kind of safeguard? How much do I need to be living on a month with the amount of interest that we can be getting? Because that's the crazy thing about the market. In 20, 23 and 4, it was like, up at like the S and p was around 20%. Like, we had crazy, crazy returns this year. Not looking so great. Right. So there is a level of this roller coaster ride that we talk to people, Karen, to ride out. Now, again, at Your age, at 68, you are on the latter end. If I'm kind of the ride.

[Ken Coleman]

No, that's right.

[Dave Ramsey]

So.

[Rachel Cruz]

So the aggressiveness of it may look different because of your age and situation. And that's why I wouldn't. That's why I would want you to sit down with an actual investment professional for them to look at some of this, because they probably will have a good game plan for you on how to get the most out of this money without losing A bunch of it if you need it. Right. Because that. The. The market game, if you're living off of that, you want to make sure that there's a level of it that principle wise is still there making you the money you need, but yet you're. You're still able to. To pull money and live off of it, even if you have to pay taxes, if it's a standard, you know, investment. So there's kind of a lot there, Karen, but I would. I hate to hand you off. Off to someone else, but I. I don't think I can answer this. And you know, a five minute call.

[Dave Ramsey]

This is tough. I. And the only thing I would add is if I were you, I would be trying to find another golden girl or two in your area and let's see if we can. Roommate. I'm not kidding you. I. I really think you got to slash your expenses as much as you can because you're in such a. This whole health thing is just limiting you and your ability to work and hoping the alimony payments keep coming in. But in the meantime, I'm going to be pinching like I have nothing coming in. And I would really, truly consider a roommate situation. Situation. Getting yourself in that. Let's see if we can cut your rent in half. My goodness.

[Ken Coleman]

Yeah.

[Dave Ramsey]

Don't tell me there aren't other ladies out there like you that wouldn't mind having a roommate, somebody around the house. So I would at least look into that for years.

[Ken Coleman]

Yeah, I've joked for years about starting the golden girl arms.

[Dave Ramsey]

Yeah, see, I had no idea. I think it's meant to be. I do think there's some golden girls out there that would love to have a Karen in the house. And I would consider that the good Karen, by the way.

[Rachel Cruz]

That's right.

[Dave Ramsey]

Careful how you use her.

[Rachel Cruz]

She's a great Karen.

[Dave Ramsey]

She's a great Karen. Hey, you're still here. What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the app store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right. For free. Then right there on the home screen. Mean you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.