You Have To Clean Up Your Financial Mess Before Building Wealth

Summary

The Ramsey Show Podcast Summary

Episode: You Have To Clean Up Your Financial Mess Before Building Wealth

Original Air Date: October 1, 2025
Hosts: Dave Ramsey & Jade Washall
Source: Ramsey Network

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Main Theme / Purpose

This episode of The Ramsey Show delivers classic financial advice focused on dealing with the foundational messes that block wealth building. Through real listener calls, Dave Ramsey and Jade Washall emphasize the need to face tough financial truths, clean up debts and unhealthy situations, and stick to budgets before making moves toward long-term wealth and freedom. Across a wide spectrum of life situations—from marriage and legacy planning to breakups, career changes, and severe debt—the show continually drives home that cleaning up your financial (and sometimes emotional) mess is the essential first step.

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Key Discussion Points & Insights

1. Marriage, Legacy & Mixing Financial Lives

• Caller Leslie is recently married to an older man whose family farm will be willed to his grandson. She’s hesitant about building a house (with debt) on land that won’t be hers.
  • Dave and Jade advise:
    • Don’t mix marital home with generational assets you don’t own (03:12).
    • Build a house on separate/new land or possibly plat off a small acreage in her own name.
    • “You're asking this piece of property to do things it cannot do. Forced one. You can only do one of the two things. It can't do both.” – Dave, (08:00).

2. Prioritizing Financial Goals: House vs. Retirement

• Karina is hustling two jobs saving up for a house but wonders about contributing to a Roth 457b.
  • Advice:
    • Focus on saving for a house first, keep all cash available for down payment.
    • Once home is secured, shift aggressively to retirement investing.
    • “If the market starts moving, you can jump in with the 300k down payment or something if you had to. But let’s work your plan for now.” – Dave, (12:48).

3. Bonus Money: Paying Off Debt vs. Investing

• Mike in Pennsylvania is expecting a bonus and has student loans and mortgages.
  • Advice:
    • Pay off student loans entirely first—even if mortgage rates are high—because “you're not going to prosper as long as you keep those things around. This is not an investment strategy. This is stupidity." – Dave, (14:34).
    • Apply any extra to eliminate the rental mortgage, refinance the primary for a better rate.

4. Evaluating Whether You Can Afford Your Home

• Dylan has a baby coming, a large mortgage, and erratic commission income, thinking of selling to improve cash flow.
  • Advice:
    • Use commission surges to create “sinking funds” and smooth out income—budget by allocating commissions monthly (22:17).
    • If, with proper budgeting, the house becomes unaffordable, then consider moving. Otherwise, don’t make major decisions out of fear.

5. Recovering from Bankruptcy; Emotional Financial Fatigue

• Nate and his wife are post-bankruptcy, driving an unreliable car, and feel overwhelmed paying off the last of student loans.
  • Advice:
    • The “math is not the problem, it’s emotions...you’ve been through hell and there’s a shame that goes with bankruptcy.” – Dave, (28:09).
    • Build momentum with small wins & disciplined budgeting. Engage with community support (follow debt free stories on social media for motivation).

6. Handling Sudden Loss and Fixed Incomes

• Carl, a disabled veteran, lost his wife and a big portion of family income. Managing survivor benefits, inheritance planning, and day-to-day cash flow.
  • Advice:
    • Avoid rushing to “fix” everything—stabilize and focus on basic living expenses first.
    • “Don’t try to make this do too much...The first thing is just live set up, sustainable. And that’s food, shelter, clothing, transportation, utilities.” – Dave, (38:01).

7. Emergency Moves After Domestic Abuse

• Kayla left an abusive spouse and is navigating custody, single parenthood, and financial stability.
  • Advice:
    • Prioritize safety and stability, keep housing as cheap as possible (e.g., stay with parents as long as feasible).
    • Delay debt payoff until legally and physically settled; pile up cash for attorney fees and deposits. “The last thing you need right now is to be spending money on an extra bedroom.” – Dave, (47:17).

8. Marriage & Money: When Spouses Are on Different Pages

• Chad argues with his wife about her not working post-children; he wants her to help pay off the mortgage faster.
  • Advice:
    • “Neither...it's not that you are completely out of line and need an attitude change, and it's not that she's a princess.” – Dave, (57:30).
    • Meet in the middle—address “budget drift,” but don’t pressure for a job if it’s not right.

9. Big Families, Welfare, and Enabling

• Emily calls about her brother (a pastor with 8 kids on state aid and in-law support), justifying it as “biblical.”
  • Advice:
    • “That is not biblical...the Bible also says that those that won’t take care of their own household are worse than an unbeliever...never met anyone who prospers on government aid.” – Dave, (75:36).
    • Emphasize loving boundaries for parents/grandparents—set a specific, budgeted amount to help if desired, and otherwise stay out of ongoing enabling.

10. Listener Q&A

Life Insurance

• Explains the “10-12x income” rule for term life insurance and why it fits most young families (ie, $60k income = $600k insurance will generate $60k/year if invested at 10%).
  • “My wife will be just fine if I die. As a matter of fact, she’s kind of planning it.” – Dave, jokingly (85:35).

Buying Rental Properties in a Retirement Account

• Rolling a 401k into a self-directed IRA to buy real estate: pros and cons.
  • Must keep all profits and operations inside the IRA.
  • More hassle and complexity than using mutual funds, but can be lucrative for those willing.

Working Hard but Stuck in an Expensive City

• Tyler & wife (Toronto): Working 70+ hours/week just to break even in a high-cost-of-living city.
  • “There’s three possible variables: location, career, or work endless hours...You can’t afford to live in Manhattan—same with Toronto—on that kind of income without something changing.” – Dave, (69:27).

Late Start to Retirement

• Justin (48, only $100k saved, house paid off)
  • With no debt, strong income, and company profit sharing, 1.8M+ at retirement is still possible.
  • “If you work from your current age 48 to 68... you're at 1.8 million. That ain't too shabby.” – Jade, (73:19).

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Notable Quotes & Memorable Moments

• "You're asking this piece of property to do things it cannot do. Forced one. You can only do one of the two things. It can't do both." —Dave, 08:00
• "You're not going to prosper as long as you keep those [student loans] around. This is not an investment strategy. This is stupidity. And you got to clean it up." —Dave, 14:34
• "Math is not as much of a problem as the emotions...You've been through hell and there's a shame that goes with bankruptcy." —Dave, 28:09
• "If the worst thing that I've got to do is throw product in the rain...my life's pretty good. I ain't got to go out and get a new car to impress somebody." —Debt free guest (Michael), 112:08
• "The rent is the unlock for that." —Jade, 123:04
• "Retirement is not an age, it's a number." —Dave, 94:28
• “If you can pay off a house in five years, you can save up a down payment to buy a house...the real estate dream is not dead.” —Jade, 113:37

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Timestamps for Key Segments

• 00:05–09:00: Legacy land & new spouse dilemma
• 10:22–13:01: Saving for house vs. retirement dilemma
• 13:12–17:49: Using a bonus—student loans vs. mortgages
• 17:56–26:13: House affordability with irregular income
• 26:19–31:04: Bankruptcy recovery & building financial hope
• 33:17–40:14: Death of a spouse, survivor benefits & stabilizing
• 44:08–51:42: Domestic abuse, custody, survival budgeting
• 54:32–57:39: Marriage dilemma: should the stay-at-home spouse get a job?
• 74:24–83:30: Family members using “biblical” justification for state aid, enabling, and boundaries
• 85:09–93:05: Life insurance calculation explained
• 95:51–103:29: Rolling old 401k into self-directed IRA for real estate
• 105:08–113:19: Debt free scream: Michael & Kara pay off $213k incl. house in 65 months
• 115:35–123:04: Michelle's “financial mess” call—high rent, IRS debt, finding margin

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Tone & Language

• Conversational, direct, sometimes humorous (“My wife is kind of planning it.” – Dave).
• Empathetic, especially during difficult or emotional stories (divorce, bankruptcy, death).
• No-nonsense about financial “stupidity” but always focused on hope, discipline, and practical steps.
• Occasional use of signature Ramsey analogies (“You’re asking this property to do too much.”).

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Summary

If you’re lost financially, feeling stuck, or doubting your ability to recover, this episode demonstrates—repeatedly—that the path to building substantial wealth and lasting change begins with a ruthless cleanup of financial messes. Don’t short-circuit budgeting, debt payoff, or hope for a sophisticated investment strategy to bail you out. Instead, use discipline, community, and common sense to fix the present before building your future.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fair Winds Credit Union studio, this is the Ramsey Show. Jade Washall, Ramsey personality number one best selling author is my co host today. The phone Number here is 888-5225. Leslie is in Lexington, Kentucky. Hi Leslie, how are you?

[Caller]

Good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Thanks for taking my call. I have a dilemma. I'm recently married and I'm selling my home and move. I've moved in to his home on his family farm that's been in the family for a hundred years. We need to put a new house on the property. We are looking to spend about $150,000 on that. However, I am hesitant to go into debt on a mortgage on a property that is going to be 100% willed to his grandson. It's likely that.

[Dave Ramsey]

I'm sorry. Yeah, so he's going to, he's going to, he's going to leave the property to his grandson. What's that going to leave you in?

[Caller]

Nothing. I mean, I can stay there, you know, but I know 100% that I won't want to stay there after he passes. And it's likely that the mortgage will still be in existence because he's a little, he's like 11 years older than me. So I'd be paying on a mortgage for a house that I'm giving away to someone else.

[Dave Ramsey]

Yeah, well, that doesn't work.

[Caller]

Does, doesn't.

What should I do?

[Dave Ramsey]

What should he do? He's in this too. I mean, he wants to leave this land to his grandson. And that's kind of understandable if it's been in the family for generations. I get that. But also, making your new wife homeless is not understandable.

[Caller]

Yeah.

[Dave Ramsey]

Or mortgaged up to her eyeballs. How old is he?

[Caller]

57.

[Dave Ramsey]

And how old are you?

[Caller]

46.

[Jade Washall]

Okay, so 10 year difference there. And have you talked to him about the idea of it passing to you first and then it. Then you turning around and willing it to the grandson when you pass?

[Caller]

Yes, he would do that. The thing is, I don't want to stay there because it, I have no family there. You know, it's. I would want to move closer to where like my family is. It's like out in the country. I wouldn't want to be there by myself and I wouldn't be able to.

[Jade Washall]

Do you see this happening relatively Soon.

[Caller]

No, I mean, I hope not. Obviously.

[Dave Ramsey]

This could be 30 years.

[Jade Washall]

I guess that's what I'm saying.

[Dave Ramsey]

You're willing to live there 30 years, and all those people that you want to move towards, they might not even be there then. Yeah. So I think you just don't want.

[Jade Washall]

To live on that land.

[Dave Ramsey]

I kind of think you don't either. I think I buy. I'd buy a couple acres across the street and build a house there that is yours and his together. And then the family farm is intact to be left to his grandson. And it's not interfering with you all building a life together. I think the problem is when you tried to build a life together on something that is not going to be yours, and that's where it got complicated. So I think you ought to build it somewhere else.

[Caller]

Yeah. The problem is we would have to spend a lot more money if we did that. Well, when I close her to double double the amount of money.

[Jade Washall]

Why?

[Dave Ramsey]

No, no, not double. Because the land is not. Unless you're gonna buy a whole bunch of land. I mean, if you bought one acre across the street, it's not anywhere near double.

[Caller]

Well, and to put a house on it.

[Dave Ramsey]

Well, you're gonna put a house on it anyway.

[Caller]

Yeah, but it would be like 300 to 400,000.

[Dave Ramsey]

You're gonna build a house anyway. The only difference is the land under it.

[Caller]

Right.

[Jade Washall]

We're. Remember, we're trying to help you solve the problem. When you called, you said, the problem is if I live on this land, it's not going to be mine. So that was problem number one. You want something that's yours and you want to be able to get to your family when the time comes. So you want the freedom to be able to sell it, do whatever. So we're trying to help you accomplish that because the other option is you move elsewhere, closer, I don't know, closer to your family and buy something there. Right. That's the other option in the complete other direction.

[Caller]

Okay.

[Jade Washall]

So either way. The point is, either way, you're going to have to spend some money.

[Dave Ramsey]

Does he live on the property now?

[Caller]

Yeah, we live in an old farmhouse that is beyond renovation.

[Dave Ramsey]

Okay. Yeah. I can tell you what I would do. I would move off of the property to somewhere else and I would rent out the old house that's beyond renovation until it's beyond rental even, and just let the property sit there and it's going to his grandson. I would not combine your lives on that property. I'd let that property be what it Is it's legacy generational property. And you're tangling up two things. You're trying to accomplish two goals with one piece of property, and it can't do it. You're asking it to do too much.

[Jade Washall]

Yeah. It's almost the equivalent of, like, you marry a guy and he's got like, his bachelor pad apartment, and he wants you to move into the apartment, and you're like, I don't really want to live here. I'm only doing this to make you happy. Right. And then he goes on, he's like, you're not going to still live in the bachelor pad. You want to live where you want to live. You want a foundation that you start together where you both feel like, this is our home, where we live together.

[Dave Ramsey]

Now, the only other thing I could do is you could plat off one acre off of the family property, build the house on that one acre, and that one acre is deeded to you, not to the grandson.

[Jade Washall]

But it would be tough to.

[Dave Ramsey]

And then you sell that. If you want to offer it to the family, when you get ready to sell it before you sold it to the public, that's fine. But when he dies, you're going to move anyway, by the way, wherever you move to when he dies, you're going to move according to you.

[Jade Washall]

But that's also the assumption that 30 years later, the grandson is going to want to keep up this land and wants the land. Right.

[Dave Ramsey]

Thirty years later, that the family you're going to move next to are still alive.

[Jade Washall]

Right. There's a lot there.

[Dave Ramsey]

Yeah. So we're really, really, really. But I think you are wise to recognize that this is not a. It's not a good plan. So, no, I would not go forward with a plan. I would do something different. So, you know, carve off an acre. That way you could sell that acre in that house when you got ready to leave and after he passes and the family loses one acre of the family farm. If the family farm's two acres, then I guess that's a big deal. But if it's a 200 acres, it's not a big deal. So, you know, decide how that's going to work and then. Or literally go across the street off the family farm and build something. I don't care what you do and.

[Jade Washall]

Be smart about where you plot it out. If you pull it out smack dab in the middle.

[Dave Ramsey]

Yeah, yeah, yeah.

[Jade Washall]

You don't want to do that.

[Dave Ramsey]

The corner. Yeah, off in the corner. And. And that way it doesn't harm the value of the property. And it doesn't leave you with something that's not marketable when you get ready to sell.

[Jade Washall]

Right. Right.

[Dave Ramsey]

So. Yeah, but some. But just. You're correct in that going forward with the plan that's on the table is a bad idea. You are correct about that. It's not going to end well, sooner, later, whenever this is. I mean, the grandson could be really old by the time you're really old.

[Jade Washall]

Also true.

[Dave Ramsey]

You know, I mean, it's. He's 57. So this grandkids probably 6. Yeah. And so 30 years from now, he's 36 or 40 years old. When. When papa dies. Yeah. I mean, that's a whole different thing.

[Jade Washall]

Yeah. And he might decide he didn't want the land, he sells it to somebody. Now suddenly you don't like your neighbors. You know, there's a lot. A lot can happen in 30 years.

[Dave Ramsey]

You know, a lot will happen in 30 years. That's very interesting. Very interesting. Good question. But you're. You're recognizing. I think the bottom line is you're asking this piece of property to do things it cannot do. Forced one. You can only do one of the two things. It can't do both. And so you're not going to be on the property if you're w. Sam.

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[Dave Ramsey]

Karina is In Washington. Hi, Karina. How are you?

[Caller]

Good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

I have a question. I'm trying to figure out the best way for me to proceed. So earlier this year I had picked up a second job because I wanted to save up for a house. And that's what I've been doing thus far. And I learned that my current second job actually offers a Roth 457B. And so now I'm wondering, should I put more money into my 457B so that when I leave I can roll it over into my Roth ira If I should continue saving all my money for a house?

[Dave Ramsey]

I'd save all your money for a house.

[Caller]

Okay.

[Dave Ramsey]

Yeah. Are you got your emergency fund in place and you're debt free, right?

[Caller]

Correct.

[Dave Ramsey]

Okay. And you're going to save up your down payment and then you're going to start your retirement savings, correct?

[Caller]

Yes.

[Jade Washall]

How far, how far are you until being done with the down payment?

[Dave Ramsey]

How long would it take you?

[Caller]

It really depends. In our area, houses are pretty pricey, so they average about 500k and I have saved up 83k.

[Dave Ramsey]

Oh, good. Okay. So when do you think you're going to buy?

[Caller]

Originally I was thinking that I would get a mortgage, but a month ago a co worker of mine turned me on to the Dave Ramsey show and I read your book and started looking at your YouTube videos. And so originally I was thinking probably this fall or, you know, in the winter. But now I'm starting to think maybe I should wait another year, save up and then either put a bigger down payment or whether I should wait for about four years and just try to buy a house in cash.

[Dave Ramsey]

Wow.

[Jade Washall]

What's your income?

[Caller]

Originally I had started with about 70k and right now it's probably going to be about 160 with the two jobs.

[Dave Ramsey]

160, that's great.

[Caller]

Correct.

[Dave Ramsey]

Wow, nice bump from 70. What'd you do?

[Caller]

I am in biotech and I have an IT job.

[Jade Washall]

So what are you thinking? You'll live on 60, is that the plan? And then in four years you'll have 500.

[Caller]

That's kind of what I'm hoping for.

[Jade Washall]

Interesting. I mean, I'm never going to discourage you from paying cash. Just know it's a moving target. So there's part of me that says if I can get in the game earlier, I'm getting in the game earlier. So just think that through.

[Dave Ramsey]

Yeah, I think I would go with your plan, but if the market starts moving on you, you maybe can jump in with the 300k down payment or something if you had to. But let's, let's work your plan for right now.

[Jade Washall]

I love that.

[Dave Ramsey]

That's very cool. Good for you. Congratulations. That'd be very sweet place to be.

[Jade Washall]

That's. We need more people with that mindset, I think.

[Dave Ramsey]

Talk about hustling, man. Hustle, hustle, hustle.

[Caller]

I love that.

[Dave Ramsey]

Mike's in Pennsylvania. Hey Mike, how are you?

[Caller]

I'm doing well. How are you guys?

[Dave Ramsey]

Better than I deserve. How can I help?

[Caller]

So thanks for taking the call. I have a pretty. Basically my situation here is I'm going to be receiving an annual bonus in a month, a few months, and I'm trying to decide what is the best use for the cash. So current situation, I have a little more than a emergency fund in the bank. I have about 50,000 in cash right now, about 25 of which I would say is emergency fund related. And I'm going to be getting a bonus of 60,000 gross, so probably about 40,000 after taxes. Between my wife and I, we have about 50,000 in student loans. And then I have. The only other debt we have is two mortgages. So I have a rental property that was originally my primary residence that I have about 80,000 left on and then I have my current primary residence that I have about 240,000 on. And the simple thought was put the money toward the student loans, pay them off completely. But the rate on my current mortgage is about 7%, whereas the rate on my rental mortgage is about 3.6 and my student loans are at about 5.

[Jade Washall]

Well, you'd still have.

[Caller]

When I look at the long term.

[Dave Ramsey]

No, when you look at the long term, you're wrong. You look at the wrong term. You've got to get rid of the stupid student loans. You're not going to prosper as long as you keep those things around. This is not an investment strategy. This is stupidity. And you got to clean it up.

[Caller]

Right. So the student loans was the, that was the first one where I assumed that's what I should probably put it towards.

[Dave Ramsey]

You're right. You assumed correct.

[Jade Washall]

And then you'll still have, you'll still have a little bit because like you said, your emergency fund is inflated. So you'll still have a good chunk.

[Dave Ramsey]

That I'll take 25 and put on a student loan today.

[Jade Washall]

Uh huh.

[Dave Ramsey]

And when the bonus comes in, pay off the rest of student loan and.

[Jade Washall]

Then you'll still have money left over that if you wanted to throw it towards. What were you saying? Your primary Is that what you're trying to do?

[Caller]

Yeah, well, yeah, I have the primary mortgage and the rental mortgage. The primary just has a much higher rate. So while I would assume like typically I would have paid down the rental, but the primary is a much higher rate, so I'll just have more savings for putting it toward that.

[Dave Ramsey]

What's the balances on the primary and on the rental?

[Caller]

The primary Balance is about 240. The rental is about 80, and the rental is probably worth about 175. And the primary is only worth about 290 ish.

[Jade Washall]

Is the rental local?

[Caller]

They're both local, yep. I manage the rental myself. I've had that for about seven years now.

[Dave Ramsey]

Good for you. Okay. I would clear the student loan, then I would clear the rental and I'd refinance the primary.

[Caller]

Okay, so you would go toward the rental first after student loans just because.

[Dave Ramsey]

Not because of anything, except it's just only 80 grand and you're going to knock it out because I smell a $200,000 income, don't I?

[Caller]

Yeah, I'm right around 160 right now before the bonus. And the bonus is annual, but it's not guaranteed, but I, I typically do receive it.

[Dave Ramsey]

Yeah. Yeah. And so you're, you're making 200k on average. And almost like I've done this. And so. Yeah, yeah. With 200k, you're gonna knock the 80 off pretty quick as well with you sitting there with your emergency fund refinance. Get rid of that 7 and some change because you can get a 5.7 right now on a 15 year.

[Caller]

Yeah.

[Jade Washall]

Once the rental's gone, how much will you clear in profit every month? Just curious.

[Caller]

It's 2,200amonth right now. Gross rent.

[Dave Ramsey]

Yeah. Sweet. So you, so you're probably making 1500 bucks a month, give or take what your area, your property, property taxes are in Pennsylvania, which I don't know, but. Yeah, yeah, I mean, you're probably making some money there at that point.

[Caller]

Good job.

[Dave Ramsey]

And that, that's another what, another 20,000 bucks a year that you could throw at. At the primary, at the primary. But yeah, I'm going to refinance that primary because you're going to, it's going to be more than two or three years before paid off. And I want to get that rate down because that rate is a little bit jacked, but. Yeah, but here's the thing. When you're paying off debt, folks, really, really fast, like we are with this student loan, almost instantaneously and with the on the, the whole thing here is not even five years.

[Jade Washall]

Right?

[Dave Ramsey]

The whole thing. Okay. And so when you're doing all that, then interest rates, the shorter the period of time in which you're going to pay off the debt, the less interest rate. The only time interest rates matter is when you're playing them out 20 years, when you're playing them out 10 years, playing them out five years. But when you're paying off in four months, it's irrelevant, negligible, almost. I mean it's not like interest rates, not your problem at that point. Cash flow is your problem.

[Jade Washall]

Right.

[Dave Ramsey]

That's what you're leaning in on. So good stuff. Dylan is in Fort Worth. Hey Dylan.

[Caller]

Hey Dave. It looks like I got the perfect duo today. I got the payoff debt queen and the real estate master. So happy to be back on again in a few years. So my wife is listening. So we have a new surprise coming that was unexpected of a baby in of course nine months. So we bought our home for 420 probably close to two years ago. So we're not quite past that capital gains market. If we were to sell it now, we're probably looking at 424 30. We owe 388. I have a feeling I know what you're going to tell me to do. We have 62 left in student loans and that's from myself and my masters from years ago. It's now been lingering like a pet for 10 years. I think our big question is we're trying to reduce that monthly cash and increase that monthly cash flow. If we could be going from like 35, 60amonth down to like 2500 to 2800, which is what we see rentals going for the around here. Probably a game changer with cash flow. We can then throw all that in debt, stockpile money, go into sort mode until baby comes.

[Jade Washall]

What's your income?

[Dave Ramsey]

You've also seen what is your monthly take home pay?

[Caller]

I have. Very irregular. So on a, on a, on a regular month, quarterly, what do you make?

[Dave Ramsey]

What do you make a year?

[Caller]

Six grand.

[Dave Ramsey]

What do you make?

[Caller]

Sure this year will probably be about 150 for me, about 70 for her.

[Jade Washall]

If a regular month is six grand, then yeah, you got to get out of this house. It's 50. It's more than 50% of your take home pay.

[Dave Ramsey]

But six grand is not 150 plus 60, so those numbers don't add up. So hang on, we're going to come back to you because I can't figure out what the Flip you're doing. Hold on. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession? Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 42,000 businesses have future proofed themselves with NetSuite by Oracle, the number one AI cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities with one unified business management suite. There's one source of truth for the visibility and control you need to make quick decisions. NetSuite's real time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you spend less time looking backward and more time focusing on what's next. And speaking of what's Next, download the CFO's guide to AI and machine learning at netsuite.com Ramsey it's free at netsuite.com Ramsey all right, we're talking to Dylan, who's got a baby on the way. Surprise. It's awesome. And we're trying to figure out exactly what's going on. If I remember, your house payment was 3500 bucks, is that right?

[Caller]

Yes, sir. And as my wife just texted me, a baby wasn't a surprise, but we weren't sure if we were going to be able to have one, so.

[Jade Washall]

Got it.

[Caller]

We were, we were texting offline and we're roughly around 9 to 10,000 take home pay a month. It shows. I get paid commissions quarterly. So like every four months we have a big surge of like a 10.

[Dave Ramsey]

To $15,000 commission above the 9 to 10k or that included in the 9k.

[Caller]

No, above, above.

[Dave Ramsey]

So you get 9 to 10k plus you get quarterlies of around 15k.

[Caller]

I'd say. So, yeah.

[Dave Ramsey]

So you're averaging about 15k a month.

[Caller]

Yes. So the way I kind of have to budget it out is I kind of have to have those sinking funds ready to kind of know what's, what's coming over, you know, until the next quarter hits.

[Dave Ramsey]

Well, that, that may or may not be, but either way, what is your question is, can you afford this house? Yes, you can afford this house. Why are you wanting to move?

[Caller]

I think it's just that that monthly is so tight on us that it's not tight.

[Jade Washall]

It's because you're not on a budget.

[Dave Ramsey]

It's not tight. You make $15,000 a month. You have a $3,500 house payment. That's not tight.

[Caller]

Well, and I think it's only feels.

[Dave Ramsey]

Tight because you're trying to live without and act like your commissions aren't real.

[Caller]

Probably true.

[Dave Ramsey]

Yeah. So your commissions. Let's pretend for a second. Let's pretend for a second. Let's pretend. You got your commissions in your hand $15,000. And you said, I'm going to allocate $5,000 for each of the next three months. I'm going to pull from that commission bucket, and I'm going to put $5,000 on my $10,000 income. That's making me have $15,000 income for the next three months. Then when your next commission check comes in, you do the same thing. You're trying to do this backwards, looking in the rear view mirror rather than looking out the windshield like I just outlined. Because you've not gotten ahead of it yet. When you do that, this is not going to feel tight at all.

[Caller]

Yeah. And I have been dropping each big check onto a truck payment. So.

[Dave Ramsey]

Yeah, you're just acting like you're acting like you don't get those checks.

[Jade Washall]

It's not even part of your budget.

[Dave Ramsey]

And the problem is that's leading you to a faulty decision on the house because you're acting like you can't afford the house. You can afford the house if you don't want the house. That's a different issue. You can, you're, you know, you're, you're obviously a free person. You're allowed to sell the house if you want to, but not because I, I, you know, pretended like a third of my income isn't there.

[Jade Washall]

Yeah. So for that, for that first quarter, it's not there. And then when you receive it, then you can say, okay, for the next quarter, like you said, you're putting that 5,000 per month, and now you're 18,000, 6,000amonth. But now you're ahead of it. It's just that first quarter when you're not ahead of it.

[Dave Ramsey]

Yeah. You just got to say that. And so you have three. If you start my plan, you have three more tight months.

[Jade Washall]

That's right.

[Dave Ramsey]

And then you'll never have a tight month again. Yep.

[Jade Washall]

It's the same thing with normal budgeting. When you get paid on the 30th, the 30th check goes to the next month. It can't be used for the.

[Dave Ramsey]

Yeah, yeah, you can't wait to pay your house payment till the end of month. So, yeah, you got to get ahead of it on all of this. It's just a little. A one month cash flow, or in this case, a three month because it's a quarterly commission check. So then you've just got to decide, do you want this house? Do you like this house? So I think what happened here is the announcement of the child made you go, oh, we've got to really start. Yeah, you do have to start now. That's good. That's really good. We're gonna give you a year of every dollar as a baby celebration. And I want you to get in the new, improved everydollar. Cause it's gonna guide you through everything. But you get ahead on the sinking funds, not behind them. And then quit ignoring the fact that you actually commission because you're throwing 100% of it at something else. And no, we can't do that. So it all goes into the plan. Then you work the baby steps from the plan, and while doing that, you look at the ratio of your house payment and say, okay, I can afford this house. I choose not to.

[Jade Washall]

That's right.

[Dave Ramsey]

But it's not because it's in air quotes tight. That's right. Okay, now I feel better.

[Jade Washall]

You feel good.

[Dave Ramsey]

Nate is in Wichita, Kansas. Hey, Nate. How you doing?

[Caller]

Better than I deserve. How are you, sir?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

My wife and I went through bankruptcy last year and into early this year because we just made an absolute mess of ourselves financially. And at the start of this year, we really decided to focus and commit ourselves to getting out of the rest of my student loan debt, which is all we have left, and trying to live really disciplined. We lost our car last year when we went through bankruptcy, obviously, and we've been just driving an absolute beater, and we're trying to make it work. My daughter just turned three last month, and I'm feeling very grateful for that. And she's healthy and happy. But I'm just trying to maintain hope right now because it's hard. It's so hard to stay disciplined, to stay focused, to not give into the temptation to go back into debt, to have a nicer car, so things are a little bit more reliable.

[Dave Ramsey]

What's your household income, Sir?

[Caller]

Just under 70.

[Dave Ramsey]

And how much is your house payment?

[Caller]

We're renting right now. It's just under a thousand.

[Dave Ramsey]

Okay. All right. All right. And are you still putting money into your 401k?

[Caller]

No, I was pretty undisciplined through my 20s. I just turned 31 a couple weeks ago. We don't have any money in retirement yet.

[Dave Ramsey]

You're not putting any money out of your check into retirement?

[Caller]

Not yet. As soon as we get out of.

[Dave Ramsey]

How much, how much student loan debt do you have?

[Caller]

Just over 20,000.

[Dave Ramsey]

Okay.

[Caller]

We've paid off about 8 so far this year.

[Dave Ramsey]

Okay. The, the, the thing is that you're facing the math is not as much of a problem as the emotions.

[Caller]

Okay, I know, I know. I'm just being emotional.

[Dave Ramsey]

Well, I mean, it's, you've been through hell and there's a shame that goes with bankruptcy. You're like labeling, I'm a money failure, you know, and you're not. But you know, for a moment there you were. But you're not that way forever and we're not going to stay that way forever. So I remember how it shook my confidence when I went through that and that's just very real. So, okay, now how do we fix that? Well, we need some quick wins, we need some small wins and that starts to build our confidence up. And the best place to do that is a budget, don't you think, Jade?

[Jade Washall]

I agree. Yeah. I mean, I agree wholeheartedly.

[Dave Ramsey]

So I would get your get. You know, again, we'll give you every dollar for a year and it's the new improved every dollar. And so it's going to guide you through the baby steps. But what you've got to do now is say, okay, we're going to look at the money coming in every month. Are you getting a tax refund?

[Caller]

Not much of one. I set up my taxes so I don't end up giving the government.

[Dave Ramsey]

So you've done a lot of the things already where you can find some margin. Every dollar will help you find some more margin. But with a thousand dollar house payment, you've got some margin in this because you don't have any other payments now except the student loan. And so, you know, our first goal is to save $1,000. Our next goal is start knocking off a student loan making 70. You can probably do that in about a year if you live on beans and rice. And what your confidence will come not because the magic wand waves and gets rid of the student loan, but when you start being in control of your money instead of it being in control of you.

[Jade Washall]

The hard, the hard part is you're doing something that you've never seen done before. Right? So we're, you're attempting to pay off debt to Become debt free. And you've never been there before. And so the natural inclination is to say, I'm going to go back to what I know. That's the comfort zone. Even though it's not good for me, even though it got me in bankruptcy. That's why you're like, you know what? I, let me just go back to credit card debt. Let me just go back. And you're, you're fighting yourself because you're, you're heading towards a truly a brand new frontier for you. And so what you need is to keep engaging with people who have done it before so that it becomes more and more real to you and you can see it and it starts to become a normal reality. Right now it's not a normal reality for you. Is that fair?

[Caller]

Definitely.

[Jade Washall]

So keep engaging, keep being around here, watching these shows, listening to these debt free screams, get on social media, follow Rachel Cruz, follow Dave Ramsey, follow myself. And you're going to, this is going to become normal to you, what we're talking about. And that's what you need so that it doesn't feel like this foreign thing that no one's ever done before.

[Dave Ramsey]

Sa.

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[Dave Ramsey]

Well, last two callers we gave the all new Everydollar to. It's a game changer. Watch the premiere on our YouTube channel to see the new app in action. Hear how folks are finding thousands of dollars in margin in just 15 minutes. When they open it up, start plugging in their numbers. Everydollars new features will point this out to you and then show you exactly what to do with that money so that you can move from debt to wealth. And that's exactly what we've Been showing you how to do for 30 years. And now we're doing it right here in the palm of your hand. Imagine how much you could find to put towards your money goals. Be assure and check it all out again. Watch the premiere on the YouTube channel. It's pretty incredible. Carl is in Cincinnati. Hey, Carl, what's up?

[Caller]

Hey, Dave. I'm calling here under some pretty crazy circumstances. So first off, I'll tell you my situation. I am a 100% disabled veteran from the Iraq war. And my income is strictly from those sources. It's fixed. It goes up when the government decides to give us an increase, but that's about it. And I've navigated a lot of things quite well. I know. My wife died a month ago.

[Dave Ramsey]

Oh, my gosh.

[Caller]

And yeah, it's been traumatic for my family.

[Dave Ramsey]

What happened?

[Caller]

She had a stroke in her sleep, according to everything that happened.

[Dave Ramsey]

How old was she?

[Caller]

37, man. She had a heart defect. But we didn't expect this to happen.

[Jade Washall]

I'm so sorry.

[Dave Ramsey]

Goodness.

[Caller]

Wow.

We lost about 40% of our income when she passed. And gracefully. We at least had some life insurance, which was just two years of her salary, split evenly between her youngest, our youngest, and myself. Because of that. It was already in the middle of the Dave Ramsey plan at the time. And because I wanted to do the right for my kids and set ourselves up and economize. We are debt free other than our mortgage. We have six months of savings set up, set aside, largely due because of that life insurance. And I am trying to figure out with my income, which is about 81,000 a year, just strictly that, trying to live comfortably while saving for my son's future. Both my boys got education benefits guaranteed to them. So we don't have to worry about that. I want to try to invest wisely.

[Dave Ramsey]

How much? Stop a second. You're doing like 43 things at once and your wife just passed away. Let's just calm down a little bit. Yeah, I'm sorry, man. The life insurance was how much?

[Caller]

My share was 45,000 and the other was Theodore's. And that's going to be in the certificate held until he's 18.

[Dave Ramsey]

And how much is that?

[Caller]

About the same. About 45,000.

[Dave Ramsey]

Okay. All right. And so that was structured wrong. Okay.

[Caller]

It was strictly through her work. It was a benefit through work.

[Dave Ramsey]

Yeah.

[Caller]

Because of her heart defects, it was pretty hard to get her any insurance.

[Dave Ramsey]

Yeah, but by structured wrong, I mean there should have been none left to the child in a certificate. That's horrible.

[Jade Washall]

So you're treating the 45 as your emergency fund. Did I hear that right?

[Caller]

I put that towards paying off credit card debt and the rest of the savings and economize. Economize. That's literally what I'm doing.

[Dave Ramsey]

Okay. And how much is your house payment?

[Caller]

2600Amonth. And as soon as my lending guy, a really dear friend of mine who works in the lending industry for veterans, he helped me get this house when I didn't have the credit to deserve it, but I got it anyway. And as soon as the rates are low enough for me to do an IRRL va. Irrl, I'm going to. I'm going to lower the rate, but not restart the loan. That should hopefully bring me down a few hundred dollars a month once that hits. But I can manage with what we got right now.

[Dave Ramsey]

Okay, so if you got an $80,000 income, you have no debt except the house. You have some money in savings for. You have some money in savings, you don't have to save for Theodore's future. You're fine.

[Caller]

My thought was, is I want to leave him something since I don't qualify for life insurance because of my disabilities.

[Dave Ramsey]

Not my fault. Right now. My thought right now is, you get your house balanced. Quit worrying about saving for kids. He's got 45,000 bucks sitting there in a cert, and he's got a free education because his dad served his country. Thank you for serving your country. Okay, and so that's all set. And he can make his way. He'll be just fine. I'm worried the way you leave him an inheritance is not by having a kid's savings account. The way you leave an inheritance is you get yourself straightened out and you begin to build wealth for you over time. But right now, the first thing you do is you just get balanced. You buy groceries, you keep the lights on, you pay the house payment, and you live on your income. And you can do that.

[Caller]

It's just been easier to focus on that than to just sit and. You know, idle time sucks.

[Dave Ramsey]

Yeah, I don't doubt that. I mean, it's waves of grief coming at you and catch you off guard at the. At the worst possible time. But in terms of the math of your situation, don't try to make this do too much. The first thing is just live set up, sustainable. And that's food, shelter, clothing, transportation, utilities. You know, you're in good shape. You're not in a pinch. Now, if you start trying to put, you know, 25% away for retirement. And I'm going to put another $2,000 a month for Theodore. You don't have that kind of risk. That's not an option.

[Caller]

Did have survivor benefits that are going to start this month, and I want to invest that. That's what I want to do.

[Dave Ramsey]

Well, if. If and only if your dadgum budget is balanced.

[Caller]

Got it.

[Dave Ramsey]

Okay. If you do so much investing that you call me stressed out, then you're just. You. You're over analyzing this.

[Jade Washall]

How much is her benefit going to be when that pays?

[Caller]

1600Amonth. Divvied up between the two of us.

[Dave Ramsey]

Divvied? What does that mean, between the two of you?

[Jade Washall]

How old is Theodore?

[Dave Ramsey]

Hello?

[Jade Washall]

I think we lost him.

[Dave Ramsey]

Must have. All right.

[Jade Washall]

Yeah, there he was.

[Dave Ramsey]

Well, okay. Anyway. Yeah, so it shouldn't be divvied up between the two of you. There's a survivor benefit that should go to. You shouldn't go to a minor child. So. But even if it does come to him, it's for his care, and we're going to use it in the budget for his care right near the. So we're going to take care of the household. Let's get the household going. Then we'll start worrying about investing. Breathe. Give yourself. Give yourself six months to cry, man. I mean, 37 years old.

[Jade Washall]

Oh, my gosh, just a month ago.

[Dave Ramsey]

Just give yourself. Let's just get this budget to where we're not going in the hole. We're not having a problem, and we're just. Everything's running smooth and we'll worry about investing a little bit later. You got time. You're okay. You got plenty of time. We'll get to investing six months from now. But for right now, let's just see how big a pile of cash we can pile up and living on the income that we have coming in.

[Jade Washall]

Right, Right.

[Dave Ramsey]

Just keep it real clean, real simple, and then give. That gives you. You know, you don't want to add financial stress to grieving.

[Jade Washall]

Yeah, well, like you said, especially since.

[Dave Ramsey]

You don't have to.

[Jade Washall]

He's giving himself something to do when really there's not much to be done.

[Dave Ramsey]

I really wouldn't. I'd find a different hobby than screwing around with this money stuff right now. You know, give yourself a little room to breathe and to hurt. And then six months from now, your brain is going to be working a little better, and then you can talk about doing investing at that point. That's how I would do it. Wow. So couple of pointers then, across the board. You always need to be in touch with Zander insurance and get term life insurance. And you need 10 to 12 times your income on you if you're insurable. Now Carl's not insurable. His wife may not have been either because they may have already detected the heart. Matter of fact he said that because he done it through work. But for the rest of you, you're walking around out there and you're 37 without any medical issues. For the cost of a pizza you can get 10 to 12 times your income. And so you're making 50 grand. You put 600 grand on you and.

[Jade Washall]

It'S for people who are dependent on your income of somebody if something happens to you. Because all the time people are like, I'm taking a policy out on my kid. I'm like no, no, no, you got it twisted.

[Dave Ramsey]

No, you put it out on you. And 600k and 15 to 20 year level term insurance and Zander insurance can help you do that. They've been doing it in a Ramsey endorsed Ramsey trusted for 30 years and we've been sending people over there and you need your life insurance in place if you can. Now Carl's family was not able to, but that call can remind some of the rest of you to get your get your stuff done. Make sure you're lined up. If you've listened to me for more than five minutes, you know that being normal with your money is not a good thing. Because normal is broke. And I want you to be weird. That's why I love what we're doing with Fair Winds Credit Union. Our friends at Fairwinds just launched a brand new Ramsey debit card and it says debt is normal. Be weird right on the front. I love that because every time you swipe it, you're choosing to live differently with no credit card payments and no debt. You see, Fairwinds has been helping people like you ditch debt faster and build wealth for years. They're not trying to shove credit cards or auto loans in your face like the big banks do. And they've worked with us to create the Smart bundle. For Ramsey fans. It includes a a no fee checking account, a high yield savings account to supercharge your emergency fund, and now the Ramsey debit card to help you stay focused on the baby steps. We're excited for you to try it. So check them out [e-mail] Ramsey that's fairwinds.org Ramsey insured by the NCUA welcome back to the Ramsey show in the Fair Winds Credit Union studio. Jade Washoe Ramsey personality number one best Selling author is my co host. Today. Kayla is in Virginia. Hi, Kayla, how are you?

[Caller]

Hi. I'm doing pretty good. How are you?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller]

Okay. See if I can get through this without crying. So I recently separated from my husband because of abuse. Okay. I'm good. And I'm currently living with my parents in Virginia. But my husband and I originally lived in a different state. So I'm going to have to go back there for custody season soon. And I was wondering, obviously I'm not moving back in with my husband. Is it smarter for me to get a cheaper apartment that's around the one bedroom, that's around 600, $700 for me and my two month old, or is it better for me to get a two bedroom apartment because I work from home and I'm just wondering what's more important, paying off my debt as fast as possible or keeping up my mental health with just having more space and a space for the baby versus a space for my work.

[Jade Washall]

How much debt do you have?

[Caller]

I have about 32,000 in student loans, 6,000 and 6,000 in credit cards.

[Jade Washall]

6,000 credit cards.

[Dave Ramsey]

And so how much? What does he make a year?

[Caller]

He doesn't make anything. He's a student. And so honestly, I don't know how he's gonna pay for our current house. He was insistent on keeping it and I kind of want to stick it to him and see him struggle because I know he won't be able to afford it.

[Dave Ramsey]

Your name's on the mortgage too, honey.

[Caller]

It's a rental.

[Dave Ramsey]

Oh. Your name's on the lease also.

[Caller]

I explained everything to my landlord and he understands.

[Dave Ramsey]

Yeah, I bet he understands your name's on the lease. Unless he. Unless he understands by giving you. Unless he releases you from liability in writing. Your landlord and understood nothing.

[Caller]

Okay.

[Jade Washall]

What's your interest?

[Dave Ramsey]

So I don't know. I'd be careful about sticking it to him with your name on there. Okay. Now what do you make again?

[Caller]

I make 20 an hour. I think it's about 40K.

[Dave Ramsey]

Okay. All right.

[Jade Washall]

There's part of me that I. I would really focus on getting your situation financially cleaned up. And if you're able to live cheaply for $600, I would do that. Especially while your baby's young and you guys can kind of huddle up in a one bedroom. And then if you can clear out some of this debt, then the time can come where you can move to a two bedroom. But I think now's the time while the baby's Little and doesn't take up a lot of space. Now, you said mental health, I'm guessing because living and working and sharing a room all in one space, that's claustrophobic. Is that what you're saying?

[Caller]

Yeah, yeah, yeah.

[Dave Ramsey]

But you've been in a domestic violence situation, so you got a whole different issue. On mental health. You've been dealing with a 10 out of a 10. On mental health, a baby being in the room is a 2 out of 10.

[Jade Washall]

I think you're gonna feel relief.

[Dave Ramsey]

So, yeah, you're. Are you talking about moving back to that city because of custody?

[Caller]

I don't know about the same city, but the surrounding areas within 30 minutes.

[Dave Ramsey]

Okay. Are you going to be safe? Are you going to be. Are you going to be safe?

[Caller]

I think so. It was emotional and verbal abuse. It wasn't physical, thankfully. But he is violent, and so that's. It just depends. Like, he would break things. So I really don't know what he would do if he found out where I lived, but.

[Dave Ramsey]

Yeah. So here's the thing. You're coming through an absolutely horrible situation. And so you've got some spiritual recovery to do, some emotional recovery to do, and some financial recovery to do. Agreed. Yeah. And so the last thing you need is right now is to have be spending any money on an extra bedroom. So right now I'm with Jade. Let's keep everything as cheap as possible. How long have you been with mom and dad? How long have you been there?

[Caller]

Two weeks.

[Dave Ramsey]

Okay. How much longer do you plan to stay there?

[Caller]

We're meeting with some lawyers tonight to figure out how long I can stay without him being able to charge kidnapping or anything. Which is threatened.

[Dave Ramsey]

Yeah, he can't. Well, so, yeah, let your attorney advise you on that. And I would recommend you stay with your parents as long as you can, like for a couple months if you can. And during that time, I want you to pile up cash. Okay? Don't pay down debt. Right now, I want you in the middle of a storm. I want you to pile up a big old pile of cash for attorneys and for deposits on apartments and all that kind of stuff, okay? Then once you get settled and you've got a divorce underway, you get settled on the cheapest possible apartment. Then and only then will we turn loose on these debts. Now, if you haven't cut up the credit cards, you need to cut them up.

[Caller]

Okay, they're cut up.

[Dave Ramsey]

Good, Good.

[Caller]

Yeah, I've been trying to pay them off, but my husband is for some reason against going ham on paying off our debt.

[Dave Ramsey]

Oh, it's real easy. I know why that was. He was trying to control you. Yeah, that's a control mechanism. So. Yeah. So what we're going to do is you're going to clean this stuff up after you get stabilized. And the way you get stabilized is you keep your housing cost as low as possible, utilizing mom and dad for the next one to six months. And after that, then, and only then, as the divorce progresses, and only when the lawyer says you absolutely have to move back into the market do you move back to the market. And you do the cheapest thing you can then. And you clear the debts and you pile cash. Clear the debts and pile cash. And pile cash in the meantime. Because that if you had $15,000 saved right now and it was just sitting there in a pile, it would give you a whole different comfort level than sitting there with no cash. And this other. You probably wouldn't have even called us because you'd have that much different of a feeling.

[Jade Washall]

That's right.

[Dave Ramsey]

And that's where I want you to get to first. Then we'll clear the debt, and then we're going to be in an inexpensive temporary housing, which is like, for a year or two. Okay. It's not your whole life. It's for a year or two so that you get away from the jerk and. Wow, pretty crazy. That's. That's something I. Good for you. Good for you for pulling away and for having the strength to do that. Good for your mom and dad to give you a safety net to land in. And, you know, and it sounds like you've got your head on your shoulders. You're already seeking legal counsel. You're figuring out what you can do and can't do. You sound like you've got a good support around you, which is how you break free from this kind of stuff. Because it's got a. This level of stupid, has. Has a gravitational pull. Sucks people back into it over and.

[Jade Washall]

Over again, especially the more desperate they feel.

[Dave Ramsey]

Yeah. You know, and control. That's. The financial control is one of the things we learned 30 something years ago was when we see a guy that is 1000% controlling every ounce of the money, there's very often domestic violence included.

[Jade Washall]

That's right.

[Dave Ramsey]

It's a symptom. It's an indicator of what's going on. It's not 100%, but it's really close to 100. It's in the 90s. And so if the wife's not allowed to go to the grocery store without her husband, if she's not allowed to do anything, make any money decision without her husband, if she's not allowed to do, he's got a complete death grip on every single dollar. There's usually domestic violence tied with that. So that's a little bit of what you were experiencing there Kayla, where he didn't want you out of debt cause it gave him a power over.

[Caller]

Hey you guys. More than a hundred million Americans carry medical debt and that is so scary. And it shows that traditional coverage often leaves people to face big bills alone. Families need more than just coverage.

[Dave Ramsey]

They need community.

[Caller]

So what if your healthcare costs less and you are actually supported by other believers in the process? That's why I love Christian healthcare ministries. CHM is a budget friendly faith based alternative to health insurance that's been serving believers since 1981 and they've paid over $12 billion in medical bills y'.

[Dave Ramsey]

All.

[Caller]

That is faith in action. So let me say it again. CHM is not insurance. It's a nationwide health cost sharing ministry. It's Christians helping other Christians with their medical bills. With CHM you get to choose your providers. There are no networks, no surprise bills and no insurance headaches. Whether you're just starting out as a family or you're looking for something that fits your budget better, CHM is where your faith and finances agree. Programs start at just $98 a month. So go to chministries.org budget to learn more and take the leap of faith. Today that's chministries.org budget.

[Dave Ramsey]

The Rams show Question of the day is brought to you by Y Refi. Defaulted student loans that are private can drag on for years. But why Refi helps borrowers explore custom refinancing with a low fixed rate and a payment you can actually manage. Go to why refi.comramsey that's the letter y r e f y.com ramsey not in all states.

[Jade Washall]

All right, today's question comes from Chad in Washington. He says my wife and I follow the baby steps and are debt free except our house.

[Dave Ramsey]

House.

[Jade Washall]

Our net worth is 1 million and we owe 75000 on a house that is worth 750,000. We're in our early 50s. When we got married my wife had a $100,000 annual salary. But when we had kids we made the decision together for her to stay home and homeschool them. Fast forward 20 plus years. The kids are grown, we are doing well. But my wife is still not working. My income is $150,000 a year. I Have asked her to get a job for a few months to knock out the mortgage and build up a gap fund so I can retire a little early. We have plenty to live on, but I've noticed some budget drift as the kids don't require as much attention as they did when they were little. Is my wife a princess or do I just need an attitude change? Interesting. Okay, so just to recap, you guys are millionaires. You owe 75,000 on the house.

[Dave Ramsey]

House.

[Jade Washall]

Your wife has not worked in 20 plus years is what it sounds like. And now you're saying, hey, I could retire a little bit faster and we could pay off the house a little faster if she would just get a job. That's. That's where we're at. I don't think she's a princess. I think there's something that maybe you guys need to do to work, to meet in the middle. I can understand you wanting to go a little faster on the house, and I can understand you wanting to retire a little faster, but I don't necessarily. I wouldn't go as far to call her a princess. I think you need to frame up the argument in a way that she's also excited about it because whatever you've been saying in west, it's not, you know, it's not. She's not excited about it, so she doesn't want to do it.

[Dave Ramsey]

Yeah, Chad, if we look up nerd in the dictionary, we're going to see your face. Okay. You got you completely dialed in here, bro. And that's good. That's good. That's what got you here. But, yeah, you're 100% concentrating on numbers, which is what I do. That's how I know what you look like. I know who you are. And if you're not careful, you forget about relationships. No, your wife's far from a princess. Does she need to dial it in and get a little bit more serious and join the. Join the crusade to build some more. The last little bit of wealth so that we can. Yes, she does. We tighten up that budget a little bit, and we can. But does she have to necessarily go back to work to accomplish that?

[Jade Washall]

So.

[Dave Ramsey]

I don't think so.

[Jade Washall]

I think the budget is her. That's been her thing for 20 plus years. So if she can tighten up her end of the thing, which is managing the money at home, and if you can tighten up your thing, which is bringing in the money from outside, I think that's fair.

[Dave Ramsey]

I mean, you manage the money at home together, you're gonna do Your budget. We're not gonna do economics, but no budget drift. We're not gon drifting. But I think you could dial it back a little and she could dial it up a little and like you said, meet in the middle.

[Jade Washall]

Meet in the middle.

[Dave Ramsey]

That's what it sounds like. But no, it's neither. It's not that you are completely out of line and need an attitude change, and it's not that she's a princess.

[Jade Washall]

That's right.

[Dave Ramsey]

That's right. But I think you're making some valid observations from a nerd's perspective, and she's probably gotten just a little comfortable.

[Jade Washall]

That's true.

[Dave Ramsey]

Dial up the seriousness just a little bit. Dial down the seriousness just a little bit, and I think we'll find a really happy place right here. By the way, you guys have done great. Hello. Luke is in New York. Hi, Luke. How are you?

[Caller]

I'm doing good, Dave, much like you. I'm doing better than I deserve. How are you?

[Dave Ramsey]

Just the same, sir. What's up?

[Caller]

All right. So I am 25. I just moved back home from graduate school. I just got my master's degree. And, you know, I listen to your show a lot, and I know sometimes there's recent graduates on, but I guess I just needed, like, a refresher. So, you know, I'm having trouble in my job search. I know you always say to not just apply to a thousand jobs on the line without really talking to anybody, but, you know, I have kind of a niche skill set. I worked in the sports industry for a few years, and I guess, you know, that's what I want to do. And I guess I'm kind of being picky at this point, I'll admit. So I just kind of wanted to get, like, your advice or whatever on, you know, handling a job search postgraduate degree.

[Dave Ramsey]

So what are you wanting to do in the sports industry?

[Caller]

So my master's was in data science, sports business, analytics, which, you know, I didn't just choose that degree. It was what I was doing out of school. I was working for a major sports organization, moved down to get my graduate degree at a school that had, you know, pretty good sports and was working for their basketball team and, you know, something in that field. I live around New York City, so obviously there's tons of opportunity for roles like that in other fields. So I have kind of broadened my search in that sense, but it's still just kind of been not the most fun process.

[Dave Ramsey]

Yeah, well, you're right. You're in an epicenter of sports Without a doubt. If you were going to be close to a whole bunch of teams, that'd be the place to be. Right. And all kinds of different things. And yet, having said that, it's a fairly small pond you're fishing in.

[Caller]

Yeah.

[Dave Ramsey]

So that means you've got to go one direction or the other to jog something loose. And one is you lower your expectations for salary and position and you take more of an entry level. Get your foot in the door in a sports organization or two is you step outside sports and you make and you make what you think you can make. So what is it? You're 20. What do you think that this position you're trying to get is worth?

[Caller]

Well, I guess that's kind of definitely part of it. I've definitely lowered my expectations in terms of salary. I would guess like the 85,000 ish range. But at the same time, I'm not really locked into this area. You know, I just moved to Mississippi for school and for this job. So, you know, I'm not kind of. I'll kind of move wherever if the opportunity is right. And there's definitely, you know, a path to developing as a professional and developing my technical skills. But I'm just in a weird tweener spot where, like, I'm not entirely entry level. And then for the jobs, you know, I. I'm thankful to have gotten a lot of interviews.

[Dave Ramsey]

It might be. It might be. I think I heard language that you were using early in the conversation that it's possible you are overvaluing the degree.

[Caller]

For sure.

[Dave Ramsey]

Like, I got this degree, and you think that's going to be like the magic bullet, the silver bullet. The silver bullet, the secret sauce is Luke. And what Luke learned while he was getting the master's. The master's degree has zero value in and of itself, only the knowledge that you put in your brain while you're getting the master's degree. Now, that knowledge has value. So knowledge is valuable, but degrees are worthless. So people. People don't care what degree you got. They don't care where you went to school. What they care is, did you learn something that you can use to help us move our process, our company, our organization forward. And so if you'll concentrate on how you can add value, not concentrate on, look at me, I got a master's. That might change your interview. But posture, the posture of your heart in the interview is like, hey, guys, I went back to get a master's so that I could get really good at this data stuff. And I'm really good at this data stuff and I can help you with your data analysis and it's going to do this, this and this. And I want to add value and I'm excited and I'm pumped up about adding value. Adding value. Adding value. Instead of like opening up your shirt and showing them the S on your chest or the MBA on your chest. Right.

[Jade Washall]

I didn't know where you were going.

[Dave Ramsey]

Superman.

[Jade Washall]

Okay.

[Dave Ramsey]

Superman is here. Right, right. And so you know, like Clark Kent and you know. No, no, you don't, don't, don't. You know, you got to be real careful with a new degree that you worked really hard to get it. And I'm glad you, you got the knowledge. But the. Then don't place too much emphasis on that.

[Jade Washall]

Plus there's a certain level of, I don't know, ladder climbing with any position. Right. You, no matter what, when you start out, you're kind of at the low end of the totem pole and there's some building that has to be done in your role. Right. Like you're building your personal brand and you're building your skill set and you're. So there's that part of it. There's a grunt work aspect all the time as you're building.

[Dave Ramsey]

So that's just when we're doing our onboarding and stuff here that, you know, I want. Sometimes I'll swing in and sit in with the new team members. Inevitably when I ask the question, what's it take to get ahead at Ramsey? Oh, here's an idea. Be really good at your job.

[Jade Washall]

Yeah. Start proving your value.

[Dave Ramsey]

Add value. You add value. Make us really happy that we hired you and that's how you move ahead. We're very utilitarian.

[Jade Washall]

That's right.

[Dave Ramsey]

Most businesses are, by the way. We really just want a return on our investment. That's how this thing works. And so you gotta kind of, you kind of make us more than you cost us or we all go down. Right. That's how this works. So how can I add value? How can I add value? And how can I, in a very practical way, hit the ground with my feet and get. Start running from day one? One. Well, guys, big news. The Fed cut rates, you know about that a couple weeks ago. And the 15 year fixed rate mortgage rates have dropped as well. Lowest, lowest we've seen in about 11 months. If you're financially ready, it's a great time to buy houses because house prices have kind of been basically flat up a little bit. Buying an affordable home you love is possible when you work with a Ramsey trusted real estate agent. These high octane, high protein pros are handpicked to guide you through the weird market and keep your financial goals in mind. While we're doing it. Find a trusted Ramsey trusted local pro for [e-mail] agents or click the link in the show notes. Tyler's in Toronto. Hi Tyler, what's up? Up.

[Caller]

Hi Dave. Hi Jade. I want to start by saying I'm a longtime listener and God bless both of you and your team for the work that you do. It's made a great deal of difference in my life and I'm sure for many others.

[Dave Ramsey]

Thank you. How can we help you today?

[Caller]

Well, I am calling because my wife and I, we are both 30, we've been together six years and we are currently on baby step three. But we are stuck. We're stuck on step three because we have been working at Gazelle like Intensity for the last five years or so. And between the two of us we have two full time jobs and three part time jobs. And I'm calling to ask for help on what advice you would give to boost a household income so that we don't have to be working 70 to 80 hours a week each. Because I'll be honest, we work conscious and hard and we love each other but we are tired.

[Dave Ramsey]

Sounds like you don't make any money.

[Jade Washall]

Yeah. What are you making?

[Caller]

Well, so part of. We live just outside Toronto. So we are in an ultra high cost of living area. Our monthly budget, which we have followed dutifully since we moved in together four years ago, we. So our monthly expenses total including everything is about $6,800. And between the two of us we bring in about 105,000 a year.

[Jade Washall]

Okay, and what did you pay off during that five years of baby step?

[Caller]

Two, our total debt wasn't very high. We only had about eight or $9,000. So that was the part.

[Dave Ramsey]

So if you don't get different jobs, you can't afford to live there.

[Caller]

With our current ones we can, but the compromise is no, just on our full time salaries we can't.

[Dave Ramsey]

Yeah, that's what I mean. You know, you don't make enough money to live there without working 70 hours a week and three part time side hustles, it's a cost of living thing. So I mean you, you also can't live in Manhattan and you can't live in LA either. Yeah.

[Jade Washall]

What's keeping you in Toronto? What's keeping you there?

[Caller]

Two reasons. One, all of our immediate family is Here and both of us are fairly connected with our families and churches and I mean, we've lived here for 30 years. We just want to stay in our home.

[Jade Washall]

But I mean, is there a.

[Caller]

Both of our jobs are tied geographically. She is a high school teacher and so she would lose her seniority and her salary if we moved. And I work as a copy editor for a municipal company, so if I moved away, I would have to find another job.

[Jade Washall]

Right. But I do feel like both of you have jobs that you could find in outer rings of Toronto. Right? I mean, how far out from Toronto do you live currently? Are you an hour outside of town?

[Caller]

Yes, we already live in a suburb, but both of us have been looking for the last year and a half because we set a goal and said we're fed up with this, we want to get it so we have more time together. And so we have been consciously applying.

[Jade Washall]

Right.

[Caller]

And I've had multiple interviews and two offers, but both offers were for less money than I currently make.

[Jade Washall]

Well, there's going to be a cap. I mean, you, you're going to, you've got to go into this knowing for my job, for my career, here's kind of the salary cap, like, here's a generality of what I'm going to make. So just because you apply for more jobs doesn't necessarily mean they're going to be higher paying. And Dave made the, Dave made the point. If you choose to live in Toronto, there are certain things that are going to go along with that price wise. And you have to at some point say, I can either afford it or I can't. I have family members who lived in LA for the longest and they said, the truth is, even I'm a teacher and the spouse did something else. If we work here for our pay, we will not be able to afford the lifestyle we want. We won't be able to buy a home, we won't be able to do xyz. And so because of that, they moved to Georgia where they could have that life. So you guys have to decide as a family what's more important, working 70, 80 hours a week to have this dream of staying in Toronto or having the picket fence and having some breathing room and being able to have, you know, whatever that is. You guys have to make that choice.

[Dave Ramsey]

And the third option is completely change your careers. Ah. And get your income up. But you cannot, you know, you're, you're right. The reason you're tired is that you don't see a way out. You feel like a Rat in a wheel. And because mathematically, nothing's changing, and you're smart enough to realize doing the same thing over and over again and expecting a different result is the definition of insanity. So, you know, you've got to change something if you want something to change. So there's three possible variables, and, you know, it's location and is one of them. And then the second one is to change careers completely. And. But I, you know, I feel for you, but there's some things you just can't. You know, you can't afford to live on $20 an hour in Manhattan.

[Jade Washall]

Right?

[Dave Ramsey]

You're not doing it on $20 an hour, but you're trying to do it on about $40 an hour. And so. And you just can't afford to live in Tokyo and London and Toronto and Manhattan. You just can't make it there on that kind of income. So, I mean, you guys are staying afloat, but you're doing it by just. You got every finger stuck in the. Every hole in the dam, and if you pull one out, the whole thing's gonna flood out on you, and you realize that. So I'm sorry, man. I wish I had a magic wand that would make it easy to do, but it's not. You're gonna. You're going to change careers, or you're going to change locations, or you're gonna work 70 hours a week, which I don't recommend as a way of life. I don't mind doing that to get somewhere, but I don't want to do that and say, that's for the next 40 years what I'm gonna do.

[Jade Washall]

Yeah, there's a cap on that. And five years is a long time to be in that mode.

[Dave Ramsey]

You don't only get physically tired, you get emotionally tired for doing it that long.

[Jade Washall]

You lose sight.

[Dave Ramsey]

Justin's in Illinois. Hi, Justin. How are you? Good.

[Caller]

How are you today?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller]

Awesome. Awesome. So I try to get drunk to the point. I'm 48 and in my 20s and 30 and in my early 30s. I never gave retirement a passing thought. You know, the word 401k meant nothing to me. And so now that I am retiring, you know, I know you can't make up for lost time. I just want to make sure I'm doing the right things so that, you know, hopefully I can retire someday and with a. With a healthy retirement. And I just, you know, just want to run numbers by you and basically see what you think. And you know what? I wish to change and are you.

[Dave Ramsey]

Out of debt except your house?

[Caller]

Yeah, completely. The house is paid for and everything.

[Dave Ramsey]

Very good. Okay.

[Caller]

Yes, sir.

[Dave Ramsey]

So are you maxing out your 401ks, IRAs and so forth, all in Roth?

[Caller]

Yeah, but my 401k is in Roth. I do 14%, which is my company's max. I guess I fall under their high earner category. So I'm at 14%.

[Jade Washall]

How much is that?

[Caller]

I understand at 50, I make about 140 a year. So it's, you know, 18, 19,000.

[Dave Ramsey]

Call it 1500amonth. And what else are you doing.

[Caller]

On top of that? The reason I'm not worried about that, the 401k that much is my company also have profit sharing, which obviously fluctuates. But the last two years it's been $30,000.

[Dave Ramsey]

Good.

[Caller]

That they put into my 401k.

[Dave Ramsey]

Great.

[Jade Washall]

What's in there now? What's the total nest egg?

[Caller]

The total is only right about 100,000.

[Jade Washall]

Okay.

[Caller]

That's why I was calling you today, making, you know, because they had a financial advisor come in a few, few months ago and just look at your numbers and see where you're at. And he gave me some numbers for, you know, 15 years down the line and just, I don't know, compound interest. So I look at my numbers today and, you know, the numbers he gave me, I'm like, that's not right. You know, one of those deals.

[Jade Washall]

Listen, I plugged it in. Now if you work from your current age 48 to 68, you've got a hundred thousand in there. Now, you put 1500 in a month, average rate, annualized rate of return 10%, you're at 1.8 million. That ain't too shabby.

[Dave Ramsey]

There you go. If you want to get some more help, sit down with a Ramsey Smartvestor Pro and they'll show you in detail exactly how that works and how you're going to get there. Sam, Emily is with us in Detroit. Hi, Emily, how are you?

[Caller]

Hello, Dave, how are you?

[Dave Ramsey]

Great. What's up?

[Caller]

Hi. Well, I'm calling with sort of a financial, moral, ethical and biblical question all in one.

[Dave Ramsey]

Let it rip.

[Caller]

So my brother and I, we both work in ministry. Different churches, we live in different states. She's clear across the country than me. He and his wife, they have eight children. And their belief is that God called us to go forth and multiply. And they believe Christians should be having as many children.

[Dave Ramsey]

Well, they are doing a good job of that.

[Caller]

Well, regardless of finances. So their only income is my brother's pastor salary. And as you may imagine, pastor salaries, you know, nobody goes into ministry to, you know, make it big. So he has actually said in podcasts and interviews that if you have more children than you can afford to have, that qualifies you as the niece needy and the church and family members are called to help the needy. And so his solution to this is to be on state aid in addition to a salary. And his in laws also pay them a stipend every month because they believe he's in ministry and they should be helping them with their bills. I think it's lunacy. I think it's crazy. And I was just kind of curious what your opinion was of that.

[Dave Ramsey]

I completely agree.

[Caller]

Thank you.

[Dave Ramsey]

Yeah, that is not biblical.

[Caller]

I don't believe it is biblical either.

[Dave Ramsey]

And even though the Bible does say to be fruitful and multiply, the Bible also says that those that won't take care of their own household are worse than an unbeliever.

[Caller]

I would 100% agree with that. And he and I are the same denomination, but sometimes I wonder if we are reading the same Bible. But my other question to piggyback on that is, do you think Christians in any capacity, whether you are a pastor or a firefighter or whatever, should ever be taking advantage of government or as I like to call it, taxpayer funded aid or.

[Dave Ramsey]

Well, I'm not ready to throw rocks at everybody who ever does anything, but obviously we at Ramsey are big on helping you prosper and I've never met anyone who prospers on government aid.

[Caller]

I would 100% agree with that.

[Dave Ramsey]

So it's not an act of love for me to recommend that or you certainly wouldn't tell people to do it as a way of life because it's not good for them. It's not as much a moral judgment as it's just loving the person and saying, gosh, I've never met anybody on welfare that had just a wonderful life.

[Caller]

I would agree with that.

[Jade Washall]

There's a consistency of staying on welfare.

[Dave Ramsey]

Yeah, but are you going to hell or are you a bad Christian? If you go through a rough patch and the government helps you for a little bit? I'm not going to be that judgmental. I'll give you a break on that.

[Caller]

Okay, perspective. And my other question was actually kind of on behalf of my parents. My parents are very generous people. They fly out, so they live in Detroit with me, but they fly out to where my brother lives periodically, you know, to see the kids to keep up that relationship. And they're very generous when they're there, but when they are there, you know, they kind of have their limits on generosity. My brother will make comments like, gee, you know, my van needs new tires. And, you know, see these bald tires? It's not safe. Or one of the kids lost their glasses, and, you know, we just can't afford to repair them. What are some good boundaries that parents of adult children could have on saying.

Well, this is your problem, you know?

[Dave Ramsey]

Yeah.

[Caller]

So it's just kind of my question. Is there any good guidance on that?

[Dave Ramsey]

The thing is, there's not anything your parents are going to say or you're going to say, it's going to change. Your brother, he's made his decision.

[Caller]

True. It's very true.

[Dave Ramsey]

And so I'm either just going to love him where he is and disagree with him. I mean, I have relatives that vote wrong, and I love them anyway, you know, and so, you know, that's okay. You know, and they think I vote wrong, so that's okay. And they love me still. So. But. But now, you know, how much money am I going to pour into a situation like that? Listen, they're fixing the bald tires or replacing the lost glasses is not going to repair this situation. It's bigger than that.

[Caller]

Correct. And that's what the advice they've been given by other people is. That's just a band aid on it. The tires are going to be an issue again. The glasses are going to be lost again. Whatever it is, it's not.

[Dave Ramsey]

Yeah. So, you know, I would just say, okay, I. I have a budget of money I'm gonna burn on these grandkids just to be that guy, and I'm not gonna worry about it. But past that, the answer's no. And so, you know, when we go out here and visit, we're planning to drop $1,000 into kids stuff that they need right now because their dad's kind of a doofus. And so, you know, I'm just gonna have that as my line item. And then when it gets above that, that I'm not gonna, you know, I'm not gonna do any more than that.

[Jade Washall]

Also, Emily, everything that you're talking about is not even a direct effect on you. You're talking about, this is your brother, this is your brother and your parents.

[Caller]

Deal.

[Jade Washall]

So if I were you, respectfully, I just mind my own business. Because nobody's coming to you for money, right?

[Caller]

Well, it's her mom. And this has not been said directly to me, but a good friend of mine is actually married to My sister in law's brother and she has made money comments about how, oh gosh, they're in such bad, you know, straits financially. Everyone in the family, including and my husband should be helping them. And I just think it's wrong. I think you should be embarrassed if you're in your 30s and 40s and you're counting on family members to pay for things for you. I think you should be so ashamed.

[Dave Ramsey]

And so as an ongoing pattern, yes, but as an off thing, but yeah, but you know, again, somebody four degrees of separation away doesn't get a vote on what I do if they don't like that. I don't agree that he has labeled himself needy biblically and, and I don't agree with that label. So I'm not going to biblically step up and make him not needy. He's needy, but it's not money.

[Jade Washall]

He needy a new job.

[Dave Ramsey]

Careful, you'll get a jade ism. You'll get a J ism dropped on you like a bomb.

[Jade Washall]

You need a job.

[Dave Ramsey]

Oh, that's it. That's the deal right there. Oh boy. Yeah. But here's the thing. It is frustrating to watch watch people that you love, especially when they're taking advantage of people that you love and it's not and they're not winning. But I'm also not going to get sucked into anyone else's guilt trip or I particularly resist someone trying to Christianize their guilt trip.

[Jade Washall]

I know that's right.

[Dave Ramsey]

So like we had a guy one time at the old office, Jay, this was funny, he came in and he was at the front desk and I walked out. They said, this guy's out here to see you. And I walked out front and he said, God told me that you're going to give me a new van. And I said, no, he didn't. He said, oh yeah, yeah, he did. And I said, no, he didn't. Because if God told you that I was going to give you a new van, he would have told me and there would be a new van sitting out there with the keys in it.

[Jade Washall]

I know that's right.

[Dave Ramsey]

If God told me to do it, that's what would have happened. But God didn't tell you nothing. You had bad pizza last night and you're blaming God. And then of course he starts cussing and screaming about how we're not real Christians and had a little duck fit right there on the floor and we had to have him removed because you don't challenge these God people when they're doing this stuff. I Mean crazy Christians give the rest of us Christians a bad name, y'.

[Caller]

All.

[Dave Ramsey]

I'm just saying. So God told me that, you know, and so you're going to quote scripture that demands that you remove my private property from me. We're going to have an issue with that need. Needy. Needy. A new job. That's it. Yeah. Wow. And here's a sad thing.

[Caller]

Wow.

[Dave Ramsey]

There's eight kids being affected by.

[Jade Washall]

That's what I know. Yeah. That's.

[Dave Ramsey]

That's tough. Now they're being raised by that. And then they come. Then they can't figure out why they strayed away from the church.

[Jade Washall]

Exactly.

[Dave Ramsey]

Because they were raised poor. Because their mom and dad had decided to have a bad biblical definition. Series of biblical definitions. But I tell you, I do love the idea that we ought to be fruitful and multiply, but maybe we also ought to raise our income while we're doing that so that we can feed them. That's supposed to be the kind of thing that goes with it. So I agree with you. I agree with your frustration, Emily. But to Jade's point, there's not anything you're going to do about any of this. So this was just a discussion we all had because nothing changed at the end of day the. This discussion. No, because we could give no one instruction in this process that's going to take the instruction.

[Jade Washall]

Yeah. If they wanted help, they would have called in. If the parents wanted help, they would have called in.

[Dave Ramsey]

Yep. So. Yeah. And so now you get to just sit on the sideline, be frustrated or just watch them and grin and go, that's my brother. Y. Yep, that's him. That's the guy. I know that guy.

[Jade Washall]

That's the hardest part of all this, though. When you see a better way and you know a better path and you just want that person to do just.

[Dave Ramsey]

You want it more than they do. Yeah. That's. That's how we become enablers. If we're not real careful or just really frustrated with family members, you're just sitting back there.

[Jade Washall]

Just meanwhile, they're. They're broke eating a sandwich. They don't care.

[Dave Ramsey]

You know, they're broke eating a sandwich somebody else made.

[Jade Washall]

That's right. That's right.

[Dave Ramsey]

Media job. I can't believe you, Jake. That was really good. That's so good. That's good. I like it. I'm going with that. I'm sticking with. I'm gonna steal that one after about three more times. That'll be something. I said buying and selling a home is a big deal. And you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey trusted real estate agents. They're handpicked pros who know their stuff, listen to your needs and have your back from the first call all the way to closing day. To find a Ramsey trusted agent near you, visit ramseysolutions.com agents agent ramseysolutions.com agent welcome back to the Ramsey show in the Fair Winds Credit union studio Jaw Ramsey personality number one best selling author is my co host today Kayla is in Milwaukee, Wisconsin. Hi Kayla, how are you?

[Caller]

Hi, how are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So I had a question about term life insurance. I've been listening about you saying that we need about 10 to 12 times our annual income. And I just, I guess from my point of view it seems like that's very, very high. And maybe I'm just like missing something in the calculations. And so I'm just hoping to kind of get an idea of like why that number you pick.

[Dave Ramsey]

That's a great question. Thank you so much. I appreciate that. Because a whole bunch of other people probably wondering exactly the same thing. If you are so glad you called. So to start with, it is not universal. Number one, everyone does not need life insurance. It's if people are counting on your income to live and you die, then they're up a creek, right? And so, so and as you build wealth through your life and get out of debt through your life and your net worth increases through your life, you progressively need less insurance to the point that you're self insured. I'm 65, I'm worth millions of dollars and I don't have a dime of life insurance. Okay? My wife will be just fine if I die. Okay. As a matter of fact, she's kind of planning it. Okay? So, but that's because we're out of debt and have built wealth. You follow me? And there's no kids to raise. The kids are all grown and gone and so forth. Okay. Jade on the other hand has two littles and she and Sam are raising a family right now, okay? And so different positions in life. So if you're 20 and you have no spouse and no kids, you don't need much life insurance because no one's counting on your income. So that's the sidebar, that's the caveat. But then back to your original meat of your question is let's say you're 34, you have two kids and you make $60,000 a year and your spouse makes $70,000 a year. Okay. That's when we would say if you got a house mortgage, you've got some student loans you're still paying off, you're working the baby steps, you're a normal 34 year old in America today. Oh, you definitely need 10 times. And the reason is this $60,000 income earner. 10 times would be 600,000, 12 times would be 700,000. So if that person died, let's say that was the husband, he died and left the wife behind with too little and half the income that used to be there. That wife could take that 600,000 and invest it. If she made 10% on 600,000, it creates 60,000 of income without touching the nest egg that is created. The goose will keep laying that golden eggs perpetually. If you invest 600,000 at 10% in a good growth stock mutual fund, it should average that or more. Then she's going to have the same income off of that mutual fund that her husband used to produce.

[Jade Washall]

And you did not sacrifice retirement.

[Dave Ramsey]

Yeah. And she didn't have to starve to death. Okay. And so that's where it leaves her in reality. And we've got thousands of those stories over the years, but that's where it comes from. You invest the 10 times at 10%, then you end up with replacing the income of the person. And. And that's what life insurance is for. That makes sense.

[Caller]

Yes, I think so. Yeah.

[Dave Ramsey]

Okay. So if, you know. Whereas if you. What's your situation? How old are you?

[Caller]

I'm 35.

[Dave Ramsey]

Okay. Single or married?

[Caller]

I have. I'm married. We have three kids. Two in middle school, one in high school.

[Dave Ramsey]

Okay. And what's your net worth?

[Caller]

Our net worth is roughly about 200,000.

[Dave Ramsey]

Okay. All right. So you're doing pretty good. All right. How much debt do you have?

[Caller]

We don't.

[Dave Ramsey]

Okay. Good house or anything.

[Caller]

Well, how much? We have a little bit left. There's a little bit less than 100,000 left.

[Dave Ramsey]

Okay, well, you're ahead of the game. Agreed.

[Caller]

Yeah.

[Dave Ramsey]

You're doing better than average for your age. Okay. Funny, I picked out 34aminute ago. Huh. For the example. But. Yeah, but the. But that is the exact average. So what does your husband make?

[Caller]

My husband makes about 80,000.

[Dave Ramsey]

So if he had a million on him and we invested that at 10%, it'd make $100,000. Minus taxes, you'd have 80,000 bucks and we would not miss his income. We'd miss him, but we wouldn't miss his income. And here's the weird thing. If he's healthy, if he's not obese and he doesn't smoke, that, that million dollars on that 30 something year old is very inexpensive.

[Caller]

Okay.

[Dave Ramsey]

It's like the cost of a pizza. I mean it's nothing when you look it up.

[Jade Washall]

So have you priced it out yet, Kayla?

[Caller]

Yes. Yeah, we had gone through Xander and had a couple estimates and so we had priced it out. I was just trying to figure out exactly like where, where we should land with that.

[Dave Ramsey]

So truthfully, a million is a little much for y' all because you're in such good shape. Shape. Because if you didn't get his whole income replaced, as good a job as you've done, you'd probably be okay. But for the difference in the cost and 800 grand and a million on policy so low, I'm going to go ahead and beef it up a little bit. And even later on when the kids were grown and gone and we had some wealth, Sharon wanted me to keep life insurance for a while and I kept it for a little while. Swi, Sharon wants. There was no reason for it whatsoever mathematically. She just wanted some. I finally, I finally let it go. I finally talked her out of that a few years ago. But for about a decade I kept life insurance for no apparent reason other than Swi. She said I'd rather have that million dollar policy than another diamond. I'm like, wow, good. Okay, you can have it. It's just a gift to you. But you understand it's not good financial planning. You understand it's not what I teach. Like I don't care what you teach. I want it okay.

[Jade Washall]

To be a fly on that wall.

[Dave Ramsey]

But that's, that's where the it comes from. If you, if you take 10 times or 12 times your income, your spouse could invest that amount at 10% and we have replaced you. If something happens to you financially, obviously no one could replace you. You're special. But yeah, right. But anyway, so yeah, that's the thing. You're gonna be okay.

[Jade Washall]

And then as you age, like let's talk about the. Once you've aged out of it. Like when you feel like you've net worthed out of it. Let me call it that.

[Dave Ramsey]

Well, the kids are grown 15, we say 15 to 20 year level term. That's a good point. Because 15 to 20 years from now the kids will be grown and gone.

[Jade Washall]

That's right. And they're making their own money, they're doing their own thing.

[Dave Ramsey]

They don't you know, they're not a liability anymore financially. 15 to 20 years from now you'll be out of debt, 100% house and everything. That's right because we tell you, never take out more than a 15 year mortgage. So you're going to be completely debt free 15 to 20 years from now. And 15 to 20 years from now you probably have a million bucks or more in your 401k. As you will be investing in baby step four, 15% of your income. And so your assets are rising, your debts are going down and the kids move out, then it takes less to support you and you set up with good financial planning, working the baby steps. A situation where you become self insured, right?

[Jade Washall]

Where really at that point the only thing you're thinking about is your health and caring for your health. And so there you go.

[Dave Ramsey]

But not if again, if something happens to me today we've done all of those things and then some, right? So Sharon's more than okay and vice versa. I'll be okay, you know, without her income it'd be okay. She doesn't have an income, but that's good. So that's other than mine because it's ours and all that.

[Jade Washall]

That's.

[Dave Ramsey]

Sam. Foreign.

[Sponsor/Advertisement Voice]

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[Dave Ramsey]

Investing might seem complicated or confusing, but it doesn't have to be. The Ramsey Investing and Return Retirement hub is packed with interactive tools and resources that can help you get informed. Not intimidated. Check it out. Ramseysolutions.com retire or click the link in the description if you're listening on YouTube or podcast. Guys, remember, retirement is not an age, it's a number. So it's not like 65 ping. No, it's more like 2 million 6 Bing. You know, okay, what is it you want? What's the nest egg you want to where you don't have to think about money then you are able to retire at that point. Now we can call that financially independent. I don't like that phrase very much, but we could call that whatever. And I don't like just saying, I'm never going to work again either. I think you ought to do something. I work and I don't need to because I love what I do and I help people and it's a good thing. And so find something to lay your hand to. That's a good thing because too many people do, quote, quit work, and like a year later they're dead. So you need something you're doing right. You need to be plugged into something. But that's. Remember, retirement is not an age, it's a number. All right, here we go. Amelia is in South Carolina. Hi, Amelia, how are you?

[Caller]

Hi, Dave. I'm well. How are you?

[Dave Ramsey]

Better than I deserve. What's going on up?

[Caller]

Great. Okay. Well, I'm calling because my husband is a physician and his practice is a private practice and they are about to merge tomorrow with some other groups. And I. We just figured out that his 401k from his old company or, you know, the company he's with today, that's about to become a new company tomorrow, we don't have to put that into the new company's 401k. I guess we can instead make it a self directed ira.

[Dave Ramsey]

Or you could just roll it to an individual ira. Yeah, yeah, yeah.

[Caller]

So I think that that may open up lots of different options and just wondered if you had any advice, like could we consider putting some of it into real estate investments or something like that.

[Dave Ramsey]

Okay. All right, good. Well, the first thing is, yes, I would roll it to something. I would not leave it with the new company, 401K. This is an opportunity to move it to something where you have a lot more control and a lot more options. At a minimum, you sit down with a smartvestor pro and you pick a series of good mutual funds on your own and you manage that. You roll it to an ira. There's zero taxes on that and you manage that from this point forward, at a minimum. Okay. If you chose to do a self directed, you could roll some or all of it that way. How much is Inc in it?

[Caller]

It's our biggest of all of our retirement accounts. It's 1.155.

[Dave Ramsey]

Okay.

[Caller]

Million.

[Dave Ramsey]

Okay. Do you own other investment real estate now?

[Caller]

No.

[Dave Ramsey]

Okay. How old are you guys?

[Caller]

52.

[Dave Ramsey]

Okay. All right, so here's the yes, you could roll half of it or some of it are all up it. Let's say you moved a half a million over and you bought a couple of $250,000 rental houses in South Carolina and you put the other Half a million or the 600,000 in a regular IRA like I was talking about in mutual funds, okay? In the self directed. Then you can buy real estate, as you mentioned, with. And you could do those two $250,000 houses in there if you wanted to. Okay? The downside is two things. One, people screw up and forget that you can't touch any of the money from those rental houses, okay? Just like you can't cash out your mutual funds in your IRA until you're 59 and a half, you're going to get penalized, okay? So you can't pull the rent money out and use it 100% has to be operated like it's someone else's company. And you can't embezzle or commingle funds in any way. It has to be a standalone operation. And 100% of the repairs are done from the IRA. The roof, the heat and air that goes out on the rental, the carpet that has to be replaced on the rental. And 100% of the income created in the rental has to stay in the ira. You understand?

[Caller]

Okay, yep, that makes sense.

[Dave Ramsey]

Because if you pull one dime out, number one, they may toss you out of the whole thing. But number two, you're going to get penalized on that dime and taxed on that dime when you pull it out. So don't commingle it. And people often mismanage these things. So you got to just be real airtight with that and promise, promise, promise and stick with it. The second thing is you've never owned any real estate.

[Caller]

Not as an investment.

[Dave Ramsey]

Yeah. And you're getting ready to be a landlord and buckle up, buttercup. This is a new experience. Okay?

[Jade Washall]

So when she pulls the rents, those hypothetical rentals that she purchases, she pulls the rents, those money, that money has to immediately go back into the ira.

[Dave Ramsey]

You're not pulling it, you're running it as a separate company. It's got its own checking account. You're running it as a company over here like it's not you, you, like you're doing it for somebody else. So it all stays encapsulated within the ira.

[Jade Washall]

So there's no liquid money for repairs and for. That's interesting.

[Dave Ramsey]

Yeah. Well, the rents would create. Because they're stuck in there, you can't pull the rents out. The rents begin to build up cash, Right. Over time, hopefully your cash flowing. I mean you're buying paid for two paid for rental properties, right? So hopefully your cash flowing, you're making some money. So Those rent, those $2,500. Rents are piling up. Then you got to pay property taxes out of that, pay insurance out of that. You got to do your repairs out of that. And what's left in there is profit. But 100% of that profit stays in there. Yeah, that's what we're doing. So, yeah, you just gotta be ready. Because here's the thing. If you get in these things and this is a lot of trouble, you'll make more on those two rentals if you buy them well and manage them well than you will on mutual funds. But you're also going to invest a bunch of time in it.

[Caller]

Okay, that makes sense, because people who.

[Dave Ramsey]

Say real estate's passive investing make me laugh. There's nothing passive about it, okay? It's real estate. The beauty of it is it requires some more effort. With mutual funds, you can set it and forget it. Look at it once a year, twice a year, and not worry about it. I look at my real estate stuff every month. I get reports on it every single month. And that's just me looking at the people that are managing it for me that work for me, okay? And I look at my mutual funds once a year. Year. That's. I mean, so I. I burn a lot more brain calories on my real estate than I do on my other. But I make more money on it, so. But I love real estate. I'm a real estate guy, so it makes a lot of sense for me. I would not put 100% of it in real estate. I would do something like I outlined, maybe 50%.

[Caller]

Okay, but do you think with the real estate market where it is right now, that this is a good time to consider something like that?

[Dave Ramsey]

If you get a bargain on a piece of real estate, it's always a good time.

[Caller]

Okay?

[Dave Ramsey]

Don't pay retail. Good Lord, no. No. We want to get a deal. And so we're going to get a deal. We're going to buy a $300,000 house for 250 because we're writing a check and we're closing Friday. You want to sell your house? It's. So I'm getting a bargain, okay? And we're looking for a deal, and not. And deals are hard to find, but they're worth it. It's $50,000 you made, right? Then as soon as you buy it, 50,000 under market, and that's what I'm looking for. If I'm buying, I don't buy houses anymore. But if I was buying houses right now, that's what I'd be doing. I'd be looking for a bargain. Are they everywhere on every corner? No, they never have been. There's no market that they're everywhere but you can find them. And there somebody out there needs to sell a house right now and there stands Amelia with cash and yeah, you can do it. And here's the other thing. If you get into it and you hate it, you can sell that them inside the self directed IRA and roll the self directed into mutual funds into a regular ira. You can, you can, you can put the car in reverse and back out of this and maybe not even lose money. But if you just get into it and go, this is a pain in the butt. I don't want to fool with this and I want to like be traveling. I don't be dealing with renters. Right. And so that's okay, that's fine. So you can put the car in reverse and get out of this. So yeah, if I were you, you I'd try it since you got the itch. But, but I wouldn't try it with more than half and I wouldn't do it. Of course you're going to pay cash. But I actually knew a guy that did this because he was a guy that did flips and he took his million and made it, made it into three doing flips.

[Jade Washall]

Wow.

[Dave Ramsey]

All inside the IRA though. Never. He couldn't eat out of it.

[Jade Washall]

Well, I was going to say he.

[Dave Ramsey]

Had to have a job over here to eat.

[Caller]

Yeah.

[Jade Washall]

You know, it's a fail safe in that way you're not going to spend your earnings.

[Dave Ramsey]

It keeps your hands off of it unless you screw up the whole thing. Yeah, you work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies and more. Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand. Head to ramseysolutions.com smartvestor to get connected. Ramsey Solutions is a paid non client.

[Jade Washall]

Promoter of participating pros. Learn [e-mail] SmartVestor.

[Dave Ramsey]

Michael and Kara are on the debt free stage right here in the lobby of Ramsey Solutions. Hey guys. How are you doing?

[Michael or Kara (Debt Free Couple)]

Well, how are you doing?

[Dave Ramsey]

Good, better than we deserve. Good to have you. Where do y' all live?

[Michael or Kara (Debt Free Couple)]

King George, Virginia.

[Dave Ramsey]

Oh, fun. Welcome to Nashville. And how much debt have you two paid off?

[Michael or Kara (Debt Free Couple)]

$212,626.

[Dave Ramsey]

Good for you. And how long did that take?

[Michael or Kara (Debt Free Couple)]

65 months.

[Dave Ramsey]

Good for you. And your range of income during that.

[Michael or Kara (Debt Free Couple)]

Time was 96,000 to 120 and down to about. I think it's going to be about 115this year.

[Dave Ramsey]

Cool. What do you all do for a living?

[Michael or Kara (Debt Free Couple)]

So I am a vendor. I work for Liftoff Distribution, which is a Red Bull vendor, and I work.

[Jade Washall]

For a child development center at the Navy base.

[Dave Ramsey]

Oh, very cool. Very cool. Cool. All right. 213,000 over 65 months. That's your house?

[Michael or Kara (Debt Free Couple)]

Yes, sir.

[Dave Ramsey]

Look at that. Weird people. A paid for house. How old are you two?

[Michael or Kara (Debt Free Couple)]

I am 34.

[Jade Washall]

I'm 35.

[Dave Ramsey]

Wow. And a paid for house. Oh, and there's a picture of it in the snow. I like it. So what's that house worth?

[Michael or Kara (Debt Free Couple)]

Well, they said in the email after. I think it was 3:30.

[Dave Ramsey]

Yeah, 330,000. Good for y'. All. And you're 34 years old, and how much have you got in your retirement nest eggs at this point?

[Michael or Kara (Debt Free Couple)]

146,000.

[Dave Ramsey]

All right. Halfway to million out here. Gonna be there quick. Now. How's it feel to have a paid for house at 35 years old? Y' all know how weird you are, right? Oh, yeah. Yeah, we hear it a lot.

[Michael or Kara (Debt Free Couple)]

Yeah, it feels great.

[Jade Washall]

Yeah, we're really excited.

[Dave Ramsey]

Yeah, that's fun. Good for you.

[Jade Washall]

So what started the journey?

[Dave Ramsey]

Yeah, I mean, like, 65 months ago. Wow. Five years and some change.

[Michael or Kara (Debt Free Couple)]

So you did an interview on the Sunday special. And I got to listen to it one day when at the time, I was working at Frito, and I was loading my truck, and I was listening to it, and I was listening to it, and I said, oh, I can't wait to get home. I got to tell my wife this is the greatest thing since sliced bread. I got to go home. So I got done, came home, and I said, said, you know, we gotta do this journey. And my wife was like, what are you talking about? I came in. I came in through the front door like I was crazy.

[Dave Ramsey]

And he got into the Fritos again.

[Michael or Kara (Debt Free Couple)]

And she was like, okay, well, it makes sense. So, you know, where do we start? And I said, well, the first thing is we got enough money. We had a car payment. Pay the $3,000. Let's just pay the rest of it off. We got the money. And she said, okay, let's do it.

[Dave Ramsey]

Well, all right. One down. Yeah. Yeah.

[Jade Washall]

So you already. You didn't start with a bunch of consumer debt. You had kind of kept your way out of debt up until this point?

[Michael or Kara (Debt Free Couple)]

Oh, yeah, yeah. No, it was.

[Jade Washall]

And we've always been against credit cards.

[Michael or Kara (Debt Free Couple)]

Yeah. Credit cards and all that stuff. To be honest with you. I wouldn't have gotten. I wouldn't have gotten the car debt if my mom didn't tell me that it was good for you. And so since it was so good for me, it, you know, I went ahead and paid that off. Yeah. So we paid that off, and then we did the six months. Get your. Get your emergency fund. And then right about that time, Covid happened. So once Covid happened, I took advantage of the refinance rates because they were way down. I went to two and three quarter on the house. And then at that time. Time, you know, so we continued to put anything extra on the house. And it was just a small amount at first.

[Jade Washall]

And every raise, we'd put more.

[Michael or Kara (Debt Free Couple)]

Yeah.

[Jade Washall]

And I got a little more intentional.

[Dave Ramsey]

Yeah.

[Michael or Kara (Debt Free Couple)]

Every. Every raise, every tax return, it just was automatically the raise that I needed to put on the mortgage every month. Every single month. Every single year. If it was $7,000 back, okay, divided by 12, that's what it goes up. If I. She got a raise at work for cost of living or something. Okay. It's $1,200 divided by 12. That also goes on. And we just lived exactly the same way for 65 months. No vacations, no eating out, no nothing.

[Dave Ramsey]

Just. Wow.

[Michael or Kara (Debt Free Couple)]

Streamline.

[Dave Ramsey]

And now you're completely done and halfway to being millionaires already. Yes, ma'. Am. Congratulations, you guys. Thank you. Wow. How many people making fun of you while you're doing this?

[Michael or Kara (Debt Free Couple)]

To be honest with you, it didn't really.

[Dave Ramsey]

Tell me.

[Jade Washall]

I don't think anyone made fun of us.

[Dave Ramsey]

A lot of people were just like, wow, that's awesome.

[Jade Washall]

I wish we would do that.

[Michael or Kara (Debt Free Couple)]

Yeah. Were like. I had a lot of people saying, you know, it was that it is unusual. Why did, you know, why do you want to do it? And, you know, I just was kind of fed up with some career path stuff that corporate America does to people, so I got really, really aggressive.

[Jade Washall]

Yeah, get that piece.

[Dave Ramsey]

So you got walk away power at that point. Yeah.

[Jade Washall]

Yes, I know. That's right. So what's the. My favorite question is, what are you going to do to celebrate?

[Dave Ramsey]

Yeah.

[Jade Washall]

You haven't done vacation. You haven't done anything in five years.

[Dave Ramsey]

You're way over six years. Well, we brought all of our kids here today. That was Not a vacation.

[Michael or Kara (Debt Free Couple)]

As far as vacations and stuff like that, I don't. I'm not totally ready for it yet. I just. Because the mission's not quite done, so this house is done, but the house that we have now, you know, we got a full house, 5k kids, 9 pets, 1200 square ft, running out of room.

[Dave Ramsey]

Yeah.

[Michael or Kara (Debt Free Couple)]

So probably going to take the next year and a half or so, pile up cash, take the equity, buy, you know, 550, $600,000 house cash.

[Jade Washall]

Then from there, then you can take a vacation.

[Michael or Kara (Debt Free Couple)]

Take a vacation.

[Jade Washall]

Listen, I think take one in between.

[Dave Ramsey]

A little one. Oh, boy. Congratulations, you guys.

[Michael or Kara (Debt Free Couple)]

Thank you.

[Dave Ramsey]

Proud of you.

[Michael or Kara (Debt Free Couple)]

Thank you.

[Dave Ramsey]

It's pretty amazing. Who was cheering you on?

[Jade Washall]

Our families. Yeah.

[Dave Ramsey]

His parents.

[Caller]

My parents.

[Jade Washall]

I'm one of 13 kids, so we.

[Caller]

Have lots of aunts, uncles, cousins.

[Jade Washall]

We had a lot of a big support system.

[Michael or Kara (Debt Free Couple)]

Yeah.

[Caller]

Wow. Wow.

[Dave Ramsey]

That's good. That's good. That's the way it should be. All right. So can this still be done? Do you think people listening can do it?

[Michael or Kara (Debt Free Couple)]

Oh, absolutely, absolutely.

[Dave Ramsey]

Absolutely. Definitely.

[Jade Washall]

You just need to be motivated.

[Michael or Kara (Debt Free Couple)]

Yeah. It is the discipline. It is discipline. If you, if you.

[Dave Ramsey]

Where did the discipline come from? How did you develop your discipline?

[Michael or Kara (Debt Free Couple)]

To be honest.

[Caller]

I think it's been.

[Jade Washall]

A work in progress over the last 10 years.

[Dave Ramsey]

I think he's just steadily got more.

[Jade Washall]

Disciplined and everything, and I think a.

[Michael or Kara (Debt Free Couple)]

Lot of it is perspective. I listen to a lot of podcasts because I do work by myself as a vendor. I get to listen to a lot of it and. And, you know, being able to hear what other people are doing. Being able to. Not just on the Ramsey show, but on. Maybe on. On Jocko's podcast or other things like that. And hearing the type of disciplines that people go through, the life, things that they go through as well, that, you know, if. If the worst thing that I've got to do is, you know, throw product in the rain. Okay. My life's pretty good. I ain't got to go out and go get a new car to impress somebody or some. Go spend some money or whatever to feel good. I can. I can hold off, you know.

[Dave Ramsey]

Cool.

[Jade Washall]

Wow.

[Dave Ramsey]

Well, way to go, you guys. Rock and roll, man. That's fun. Yeah, that's fun. So how does it feel one more time? Feels amazing.

[Michael or Kara (Debt Free Couple)]

It feels great. Like you said that you brought.

[Dave Ramsey]

You brought the kids with you. They're in here to do the debt free screen. Yes. Bring them up. Let's introduce them. Get the names and ages on them.

[Michael or Kara (Debt Free Couple)]

You come with me.

[Dave Ramsey]

All Right.

[Jade Washall]

There's the first one.

[Michael or Kara (Debt Free Couple)]

There's the first one. This is Declan. We got a Landon, we got an Anthony, we got an Elliot, and we got my big baby, Riley.

[Dave Ramsey]

I love it. All right. Very cool. Fabulous, guys. Well done. Well done. Good stuff. Well, these kiddos don't even know how powerful a hero their mom and dad are. They've changed their whole family trend. Everything's different in your house because of your decisions. I'm so proud of you.

[Michael or Kara (Debt Free Couple)]

Thank you.

[Dave Ramsey]

All right, Michael and Kara and the gang from Virginia. 213,000 paid off in 65 months, making 96 to 120 house and everything. Halfway to baby steps, millionaires at only 34 years old. Count it down. Let's hear a debt free scream.

[Michael or Kara (Debt Free Couple)]

Three, two, one.

[Dave Ramsey]

We're debt free. Yay. Wow. Oh, man. If you didn't know what freedom sounded like, you can play that back now. That's what freedom sounds like. That's how it works.

[Jade Washall]

I love that. That. Listen, if you can pay off a house in five years, then you can save up a down payment to buy a house. You know what I'm saying? Like, it's just a mirror to show real estate dream is not dead.

[Dave Ramsey]

Right.

[Jade Washall]

They paid off their house.

[Dave Ramsey]

They paid off their house at 34 years old with a house full of kids, by the way, and dogs and cats.

[Jade Washall]

Yes.

[Dave Ramsey]

This is not a. This is doable. This is reachable. And that's why we do the debt free screams to remind you guys that real people are doing it, too. And that gives you permission to go do it. Hello. It's called hope. Proverbs 18:4 is our scripture of the day. The words of the mouth are deep waters, but the fountain of wisdom is a rushing stream. Elizabeth Elliott said, never pass up an opportunity to keep your mouth shut. Make a boring podcast. But other than that, Michelle is in Dover. Hi, Michelle. How are you?

[Caller]

I am wonderful. Dave. Jade, how are you?

[Dave Ramsey]

Great. How can we help?

[Caller]

Well, I was calling in because I need some guidance getting out of a financial mess. And I have been in and out of this mess for many years. And I'm tired of being tired. And I just figure someone has eyes from the outside looking in and can say, hey, this is what I see. And I know, like, I know how to do it. You know what I'm saying? I just. I need. I don't know what I need. I just need some help getting out of the mess, because that's what it is.

[Dave Ramsey]

Yeah. You're sick and tired of being sick and tired, huh? Yes.

[Caller]

So tired yeah.

[Dave Ramsey]

Okay, so tell me about it. What's the mess?

[Caller]

Well, the mess is I have. I. I spend. I'm in debt.

[Dave Ramsey]

Yeah. What kind of debt have you got?

[Caller]

40,000. I have IRS debt. Thousand dollars worth.

[Dave Ramsey]

IRS? 22,000?

[Caller]

Yes, 22,000.

[Dave Ramsey]

What else?

[Caller]

A car loan. 20,000. I have a credit card. $477. And I have a vote. I literally just had my car pay repaired and financed. $834 of that 8,3419 to be exact.

[Dave Ramsey]

That it?

[Caller]

Yes.

[Dave Ramsey]

No. Student loan?

[Caller]

No.

[Dave Ramsey]

You got a mortgage?

[Caller]

Nope. I've got an extraordinarily expensive. For my budget rent.

[Dave Ramsey]

How much is your rent of paying?

[Caller]

18.99.

[Dave Ramsey]

Okay. All right. Are you single?

[Caller]

Yes.

[Dave Ramsey]

And what do you make?

[Caller]

It fluctuates. I work as a teacher. Working. I work online. So I have about 1, 2, 3 jobs. And generally I literally just did this. In one of the jobs. I bring home $500 a month. Let me see. I'm just looking at the numbers. $500 a month. The other one is 1000amonth. Month. And the other one is approximately 32, 2800amonth. Approximately. Because they fluctuate. All of them do.

[Dave Ramsey]

Okay. All right. And how'd you get IRS debt? Some of this. 1099. And you didn't pay your taxes?

[Caller]

Well, I was. Yes. That is the end. That's the cut and dry thing. Yes. I worked at this one of these companies for 15 years, and when I first started, we were 1099. And. And of course, you know, the tax bill is so high, and I couldn't afford it, to be quite frank. And I've been paying on this since then.

[Dave Ramsey]

Okay. All right. So for many years you've had this IRS laying there.

[Caller]

Yes.

[Dave Ramsey]

Okay, so you got 3,800. You've got $4,300 a month take home pay, and 8 and 2,000. Almost. Your rent is ridiculous. Mm, yes, it's ridiculous. Okay. How much is your car payment?

[Caller]

It's 427. I believe it's the exact amount, but I've been behind on it. So I literally called yesterday and got a payment arrangement for $500. I've been paying 430 on it.

[Dave Ramsey]

Okay. All right. So first thing is we have to address living emergency to emergency. And then the second thing is you're gonna have to make some adjustments in your rent. You can't stay there and prosper.

[Caller]

Got it.

[Dave Ramsey]

You simply cannot afford $1,899 on 4,300. That's where the that's your math strain point. It's killing you. Now, how many bedrooms are there?

[Caller]

3.

[Dave Ramsey]

Okay, so the other option would be taking two roommates, but if you're not going to do that, you have to. I'm sorry, what?

[Caller]

I said I don't want to do that.

[Dave Ramsey]

I don't want you to do that either. So you're going to move then. You simply cannot do this. Okay. Unless you're going to tell me that somebody's offering you a job to double your pay. And I missed that in the conversation. So, yeah, that's. This is what's killing you, don't you think, Jade?

[Jade Washall]

I think. So what can you tell us more about the jobs that you're doing?

[Caller]

Yes. So I'm an ESL instructor, and basically it's the way that they pay. It's kind of like. Like piecework, if you will. So depending on how many students I teach for that day, then I get paid, basically, I get paid for every student that I. That I teach, per the minute. And the other is. It's. One is the same thing, actually. It's just another company. I do that as well. And then the other job is I work as a tutor for schools throughout the United States. I just came off of a job on the other side of this same company where I had just for six months because of the summer, where I was working full time.

[Dave Ramsey]

Is there any decent money in translation at all?

[Jade Washall]

That's what I'm wondering.

[Caller]

Well, there is, but I don't know any other language. These companies, these in the email.

[Dave Ramsey]

So you're teaching English as a second language, but you don't know the other language?

[Caller]

Right. It's. It's the unofficial first. English is the unofficial first language in South Korea. That's where I teach, so I don't have to know Korean.

[Dave Ramsey]

I see.

[Jade Washall]

Got it, got it, got it. So you're okay?

[Caller]

Is that. My end goal? Is that I'm. I've been called to ministry, but I do not and refuse to be broke.

[Dave Ramsey]

And I don't know the Dover, Delaware market, Is it an expensive market?

[Caller]

No, it's not.

[Dave Ramsey]

Okay. You just found an expensive place to live. Okay.

[Jade Washall]

And you. This is taking. Is this taken up 40 hours a week or 50 hours a week?

[Caller]

Oh, I'm working literally sun up to sundown. Before sun up to sundown.

[Dave Ramsey]

Let me go. Let me change gears back to what I said a minute ago. The first thing you've got to do is to do your detailed budget and you have to prioritize every dollar that's coming in. And the priority sounds like this. The first thing you buy is food. The second thing you buy is lights and water. The third thing you pay is rent, and it's an adjusted rent because you're moving, okay? And so food, shelter, clothing, transportation and utilities. We pay your car payment, we keep the lights on, okay? So we're not ever behind on the car again. We're not ever behind on the rent. We're not ever behind on the lights. You've got enough to do all of that. The only question is then how can we make progress when we knock out these first two little debts, the little credit card debt and the little car debt you just took on. But from now on, you're gonna be so in control that these little things that pop up are not. You're gonna put $1,000 as your baby step one aside savings. And so if a little car thing pops up, you just pay cash for it. You stop everything, you go back, build that thousand back up. But you've got to get away from this crisis to crisis to crisis to crisis because it starts to feel like your life's a country song.

[Jade Washall]

Well, the rent is the unlock for that.

[Dave Ramsey]

Yeah, well, but being on a budget and a prioritized budget, every detail written down before the month begins, and then it's prioritized as a dollar comes in. It is already spent because you've got the next thing up. Next thing up. First thing up is food. Second thing's lights and water. Third thing, shelter. Fourth things, car and car, gas. That's it, Next thing up, next thing up. And then we're going to knock out the little 400. We're going to build our 800 or build our thousand dollar up. Then we're going to start on baby step two and working our way through that, you adjust that you also have a car you can't afford as well. And so, you know, I'm gonna start looking at that. But it's not as big a pain point as the rent is. The rent is roughly double what you can afford. And so you may, you're doing all this remote anyway. You may be moving out a ways from the city to find a bargain in a little bit of a more rural area and get a much better deal of some kind. You know, a garage apartment over the back in the backyard of a rich old lady. And you move in there and help watch over her a little bit or something and she's, make sure she's doing okay. And you get a bargain with that garage apartment until you get this thing squared around. And then when you get it squared around, you get these debts cleared, then you start to build your good emergency fund. You start to build some wealth. Then you got some wiggle room to start to build a better quality of life at that point. But in the meantime, we're going to beans and rice, rice and beans, and we'll give you every dollar for a year and get you set up and get you going on that. That's going to really help you with the process. Our gift to you that puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.