Ditching Debt Is the Fastest Path From Stress to Peace

[0] from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

[1] Thank you for joining us, America.

[2] We're so glad you're here.

[3] Open phones at AAA 8255 -225.

[4] Number one bestselling author and Ramsey personality, Jade Washaw is my co -host today.

[5] Thanks for being with us.

[6] Alyssa is with us in Dallas, Texas.

[7] Hi, Alyssa.

[8] How are you?

[9] Good.

[10] How are you, Dave?

[11] Better than I deserve.

[12] What's up?

[13] So, big fan of yours.

[14] My husband and I are on baby Step 6, but I needed your advice with my stepdaughter.

[15] So the situation is back in April, I had wanted to plan, I planned a family vacation, rent to the cabin, and I wanted my husband's family included.

[16] So there was about five families total.

[17] I also wanted to include his 30 -year -old.

[18] daughter, and she has an eight -month -old son.

[19] It was 270 per family because my mother -in -law paid for the majority of the cabin.

[20] So his daughter had paid me 170, leaving a remainder of 100.

[21] Five days prior, she kept asking how to budget for the trip.

[22] I felt like she was trying to get me to offer to pay for the remaining 100, and plus the expenses that she was asking about, I didn't offer, so she told me to keep the 170 and that she couldn't afford to go because she had to take off work from being sick the week before.

[23] I told her okay, and then, you know, that I hope she could come.

[24] And then she told me, asked me if I would ask the other family members to pitch an extra to pay for the 170, she already paid me. I asked them, they said they didn't feel like they owed her.

[25] So then she asked if I would pay her the 170.

[26] and I asked my husband, he didn't feel like we owed her because I brought up to her the fact that she had paid bought up.

[27] It's his daughter, right?

[28] Yes.

[29] And how long have you been married to him?

[30] Two years.

[31] Okay.

[32] And he didn't want to, he didn't think his daughter should get a refund.

[33] No, because this is what she's really mad about.

[34] I brought up the point that she had spent money on other things.

[35] like a plane ticket and to go be in a friend's wedding and the olympic weight loss shot and and then from there she just after she figured out we didn't really feel like we owed her the money she went off on me my husband this is really toxic on both ends by the way okay okay this is I could tell this is a toxic relationship you guys are just tit for tatting am I wrong because what is her it nothing what she's spending her money on is you know none of your None of your business.

[36] Yeah.

[37] But you're bringing that up as she's asking for this.

[38] Here's a thing.

[39] She needs the money.

[40] That's why she's asking for it.

[41] And she figured out, hey, I can't go on this trip.

[42] I can't afford it.

[43] And I'm glad she did.

[44] You don't owe it to her.

[45] But if you could get it to her, is it really hurting anybody?

[46] Because it's not.

[47] Do you see what I'm saying?

[48] Is it hurting anybody?

[49] It feels like this is more about all the things that have happened in the past with her than this actual event.

[50] Yeah, there really wasn't anything in the past.

[51] That's not true.

[52] Yeah.

[53] Well, she told me she was struggling.

[54] She couldn't make ends meet, but then we see the way she spends.

[55] I'm talking about for the last eight years her dad has observed her misbehavior, and he's like, I'm not chiming in on that, no refund.

[56] Independent of you.

[57] Right.

[58] So I'm thinking this is about the past more than it is the actual situation itself.

[59] It's her pattern of living that nobody, the other family members, including your husband, wants to endorse.

[60] And you're new to this problem.

[61] Only two years have you been observing this dysfunction?

[62] Yes.

[63] And so, yeah, you're not in a seat to give her advice about her spending, obviously, because she didn't take it.

[64] all she took was offense because you're not sitting in a seat of love or a seat of respect or a seat of where she's asking and values your opinion she simply wanted her money back and you started teaching her about her money wrong right that doesn't work that piss anybody off by the way that's unsolic my grandmother used to say those convinced against their will are of the same opinion still and so that's what you were trying to do and so yeah I don't think you owe her the money back but you probably owe her an apology for interfering in her life you know you didn't you went you went there I mean if you wouldn't have spent money on this and this you could have come you bridesmaid thing and in the drugs and you know no just leave it alone and go on and just go, you know, we've looked at it and we don't want to pay you.

[65] We don't want to do this.

[66] It's not that much money.

[67] Well, that's the thing.

[68] Like, let's think of it.

[69] You said there's five families going.

[70] So essentially, if we run this backwards, what you're saying is that if she hadn't agreed to go, nobody would have agreed to go.

[71] Because that's saying, well, if she doesn't pitch in her 170, the rest of us can't go.

[72] No, they just didn't want to refund her because the way she acts.

[73] I get it.

[74] I really don't blame them for that.

[75] She didn't ask us.

[76] She said, when she said, She told me to keep the $170 ,000, and then she asked me to ask them.

[77] Then she said, well, I'm not paying you the $100, I owe, and you owe me. It was just more of a. And then it got ugly.

[78] Yeah, it was entitled.

[79] Yeah, like, she said, you, then you pay me the $170.

[80] I wish it was more like, hey, I'm struggling.

[81] I can't do it.

[82] Yeah.

[83] Can't you?

[84] Then I would have been, because I have been very generous with her in the past, and I'm really easy to sucker, but you got to sucker me. Don't say, I'm not paying me. you, you owe me. Yeah, don't, don't, sucker me. Don't entitle me. And I guess, you know, my son.

[85] I don't disagree with you.

[86] I don't disagree with you on that.

[87] If she comes at you, if she comes at you, she bought 170s what she bought.

[88] And so, yeah, I mean, I don't disagree with that at all.

[89] The only thing is, is that it feels like she's, um, there's all these other family members that she's on the outside edges of the rings of this family.

[90] already.

[91] She already feels like an outsider.

[92] Yeah.

[93] And this just, this just drove a stake in that.

[94] It feels like just listening to the story.

[95] I don't know.

[96] None of it sounds like it's worth $170 to me. Right.

[97] I just want to make sure they weren't holding it for spite.

[98] Like you told us this and this is what you do.

[99] And so we're going to hold it.

[100] I think, I think her dad said this is a pattern of hers.

[101] She pulls this crap all the time.

[102] We're not playing.

[103] And, you know, you put the deposit up and and play adult games, get adult results.

[104] Yeah.

[105] And I don't think he just said enough.

[106] I mean, it's her dad.

[107] That is true.

[108] If it's the, you know, if it's a stepmother, you could think maybe well, maybe there was some more spite.

[109] But I think dad just looked at it.

[110] It went, yeah.

[111] And the other family members are like, I'm not, I have no responsibility for her.

[112] Of course I don't.

[113] And then it lands back on Alyssa.

[114] And then when she came at Alyssa, Alyssa went back and went, yeah, but you bought an airline ticket.

[115] That's true.

[116] you've got this prescription and you got these other things you could have you know it's a matter of choices and you're making bad choices tone matters but i think the girl i think you're right the girl's hurting financially yeah and she's not very good at relationships yeah they're all the all the tones were off on this one if she had asked in a better tone if it had been received i think i feel like tone is what messed up this whole and and patterns of living that i'm not going to give a drunk a drink.

[117] That's true.

[118] I'm not going to reward this continual flightiness and air responsibility and impulsiveness.

[119] And I'm not responsible for your lack of maturity.

[120] You know, that's her dad.

[121] I can hear it in my head.

[122] This is the Ramsey show.

[123] Hey, you guys, emergencies happen in life.

[124] Your dishwasher breaks and floods the kitchen.

[125] Your AC goes out in the middle of the summer.

[126] Situations like those are why we teach people to have an emergency fund.

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[140] Don't miss your chance to join us on the live like no one else cruise and don't put up a deposit because I won't refund it if you're not going to go.

[141] That's a fact.

[142] Following that call, I do a cruise ad with a deposit.

[143] Anyway, actually, it wouldn't be with me anyway.

[144] It's with the cruise line, so you have to deal with them.

[145] There you go.

[146] Because I love you and I'd probably give you your money back.

[147] Not really.

[148] But anyway, I'd leave it up to the cruise line.

[149] So seriously, there's not that many cabins or sweets left.

[150] If you want to come, we're going to be doing this March the 22nd through the 29th.

[151] That's next year, of course, 2025.

[152] We're going to Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas.

[153] A hundred percent of the Holland America, first class, almost new ship will be Ramsey people.

[154] It's going to be like a huge baby step four and beyond party on the seas.

[155] Lots of baby steps, millionaires, lots of debt -free people screaming.

[156] lots of us doing events on the boat talking about all kinds of things all the ramsie personalities david and sharon will be there too me and my wife the whole time plus manit shohan from the food channel stephen kirtis chapman uh dina carter and many others we've got all kinds of line up on this thing it's going to be a lot of fun just a handful of cabins you can still get one and you can put down the key six hundred dollar deposit to secure your cabin.

[157] I don't know what the refund is on that.

[158] You'll have to check.

[159] All joking aside.

[160] And check it out at Ramsey Solutions .com slash cruise.

[161] It's the first time we've actually done one of these.

[162] We attempted to do one and there was this little thing, this little disease thing going around and it kind of ended the cruise back there a while back.

[163] Fauci pandemic.

[164] Yeah, the Fauci pandemic got us.

[165] And so, you know, anyway, we're back on the high seas now and we're rocking and here we go.

[166] It's going to be a lot of fun.

[167] I'm just glad Sharon's coming to keep you in check.

[168] Yeah, there you go.

[169] There you go, because I'm known for being out of check.

[170] There you go.

[171] Brea is with us in Seattle.

[172] Hey, Brea, what's up?

[173] Hey, thanks and much for taking my call.

[174] Sure.

[175] How can we help?

[176] So, I have been, I watch your show every day.

[177] And ever since I started watching, what you teach has lit a fire under me, and I've just been paying off debt like a psycho person.

[178] So far, we've paid off a $10 ,000 car loan, about $5 ,000 in credit card debt, and the remaining debt that I have is $6 ,000 in student loans and a $1 ,000 medical credit card.

[179] I'm so grateful for your advice.

[180] but now that in the next few weeks my husband I plan to pay off the remainder of our debt you're incredible well done thank you and while I would have imagined that I would be full of joy and full of excitement to be debt -free I just find myself feeling like there's just a cloud over my head because I can't seem to forgive myself for the debt that I racked up The credit cards were used for really dumb things, like eating out and buying stuff that I wanted in the moment that wasn't necessary.

[181] And so my question is, is as we embark on applying for a home loan and just building our future, my question is, how do I forgive myself for falling behind on finances when I could have been ahead if I hadn't gone into debt?

[182] And how do I stop obsessing over my past financial mistakes?

[183] How did you do that?

[184] Because Jade had a lot bigger mess than you did, and my mess was bigger than both of you put together.

[185] Yeah, I think what's passing through my mind, and I'm going to misquote it, but the gist of it is that Maya Angela quote where she says, like, once you know better, then it's your responsibility to do better.

[186] And it sounds like that's exactly what happened.

[187] You got a hold of this information, and you said, that makes sense.

[188] Like, that rings a bell in my life.

[189] And then you started making the necessary adjustments.

[190] And so I know for me that that was a lot of it, a lot of the mistakes I made.

[191] And I'm not saying this to make an excuse per se, but I just didn't know.

[192] I didn't know what I was doing.

[193] And a lot of stupid is from ignorance.

[194] Like, you know, I didn't learn budgeting in school.

[195] I didn't learn financial management skills.

[196] And so there was a piece of it that I just didn't know better.

[197] But the key is once you do start to know better, if you don't start to do it, then it becomes, yeah, it's your own fault.

[198] And so in your case, you're like, listen, I took this advice and I started running with it.

[199] And it's still very new for you.

[200] And there is a piece of this where you still have a longer period of time where you made the wrong choices, therefore you don't trust your judgment, then you've had time where you've been making the right decisions.

[201] And I think the longer that you continue to walk down this road and it kind of starts to even out and you start having more years behind you where it's like, okay, I'm doing the right thing.

[202] I can trust my instincts.

[203] Part of that is just time passing, and then you just choosing to say, hey, I didn't know, I know now.

[204] I'm changing my life.

[205] And a lot of that is just you choosing that every single day to go, all right, I'm a person who understands it.

[206] I'm a person who's responsible, and that's who I am now.

[207] And that's how you view yourself.

[208] Yeah, I like that.

[209] Yeah, the way you rebuild, let's say you violated trust with someone else, not with yourself.

[210] How do you rebuild trust with someone?

[211] It takes time.

[212] And it takes a pattern of not doing the thing that broke trust ever again.

[213] Right.

[214] And so, you know, we have calls on the air here that sound like my husband quit doing alcohol three years ago.

[215] And I'm having trouble trusting him or three months ago and I'm having trouble trusting him with money.

[216] I'm like, well, you should have trouble trusting him with money.

[217] He's been dry for a whole three months.

[218] that that's reasonable but if he if you call me up and say he's been dragged for three years or 10 years and you're having trouble now that's on you that's not on him anymore because he's demonstrated a pattern of not returning to the bottle when you're just demonstrating a pattern of not making the same mistakes as jade said then you build trust with yourself you're rebuilding trust with yourself and so um i have um done so many different things, financial and otherwise, especially in my stupid misspent hillbilly youth, um, that, um, that no humans should do, but I did them.

[219] And, uh, Jesus forgave me in any way, even though there's no reason.

[220] And I can just kind of sit in that and not even understand that level of grace.

[221] And it took me a long time to get really comfortable with.

[222] The windshield is a lot bigger than the rearview mirror for a reason.

[223] That's grace.

[224] The rearview mirror is small.

[225] You look in it and make sure that, you know, nothing's coming up from behind.

[226] The past is not coming up to bite you again.

[227] You're looking in the rearview mirror to adjust your course to make sure you stay on track and never go back to some of the stupidity again.

[228] But the big window is the windshield.

[229] The rearview mirror is small because you don't have to spend much time looking back.

[230] You spend most of your time looking forward.

[231] That is forgiveness.

[232] And once I walked into that, this sounds kind of goofy, but I forgave myself a lot faster than Sharon forgave me. And she's still working on it.

[233] No, I'm kidding.

[234] She's not.

[235] I'm kidding.

[236] But there's truth to that.

[237] But I mean, you know, she was a terrified young mom with two little kids in the water and the electricity got cut off because of my stupidity in handling money.

[238] Not her fault at all.

[239] And so anytime that I even have that facial expression or that body language or that tone around something we're discussing that reminds her of that.

[240] And it's been 30 something years.

[241] You know, that wound inside of her spirit can open right up again and acid can gush out.

[242] But it doesn't happen years after going through that, it took her a long time to trust me again and with good reason.

[243] Absolutely.

[244] Because I was not trustworthy.

[245] The more trustworthy you are, the more you are worthy of trust, that more you can say that other person did that.

[246] I'm not identified as the worst thing I've ever done.

[247] That is not my identity.

[248] It's just something I did.

[249] And with every new choice you make, you're building that new identity.

[250] Yeah, I met a guy who has a fabulous life, he's very successful in business, and very neat young man, great dad.

[251] When he was 18, he robbed a bank.

[252] You don't hear that every day.

[253] Yeah, but he's a completely different human being now.

[254] You know, he served his time, a completely different human being.

[255] And so, yeah, just small mirror.

[256] Hey, when you go against what society thinks is, quote, normal, like avoiding debt, for example, it might seem weird at first, and that is totally okay.

[257] We want you to be weird if that means doing things intentionally, including how you spend your health care dollars.

[258] And one way to be intentional is with Christian health care ministries.

[259] CHM isn't health insurance.

[260] They're a health -cost -sharing ministry that's helped hundreds of thousands of families like yours, take care of health care costs without sacrificing their freedom.

[261] Find out more and join at chnistries .org slash budget.

[262] That's chmistries .org slash budget.

[263] Jade Warshall -Remsey personality is my co -host today.

[264] Thank you for joining us, America.

[265] We appreciate you hanging out with us.

[266] Joanne is with us in Springfield, Illinois.

[267] Hi, Joanne.

[268] How are you?

[269] Good.

[270] How are you doing?

[271] Better than we deserve.

[272] What's up?

[273] Hey, so I'm trying to figure out my best course of action.

[274] Right now, I am trying to, I'm trying to get a second job so I can hurry up, pay off all this debt, so I can get a down payment, get married.

[275] But I do have a kid on the way nine weeks to go.

[276] We have two children at home.

[277] And my girl, she wants me to not work as much.

[278] but like right now we're in a situation to where the current living situation I was paying $900 a month for rent but how everything is going I could possibly be paying $0 but moving somewhere else like one of those housings so I'm just so what I'm trying to do is I just want to work as much as possible pay off all this debt build up a nice emergency fun as soon as possible and then just get out of there so I'm just trying to figure out what's my best course of action because I want to keep the gazelle intensity what kind of work do you do right now I'm doing H -back I just got hired on probably about three months ago I got through apprenticeship I was going to take a loan out for 15 ,000 but I called around and I happen to get an apprenticeship so I now just stormed off at 1750 but within two and a half years, I'll be making $28 with like a double pension and all that stuff.

[279] Okay.

[280] And you're working 40 hours a week?

[281] Somewhere around there.

[282] I just started working Saturdays.

[283] Well, they started letting me work Saturdays too.

[284] Okay.

[285] So roughly around 40, sometimes 47, 38, 39, somewhere around there.

[286] Okay.

[287] And she wants you to stay home more because there's, you're about to have three babies together.

[288] Well, it's my first child.

[289] We've got two children at home.

[290] And, So wait a minute, I'm sorry.

[291] Is your first child, then we don't have two children at home?

[292] She has two children that are not yours, right?

[293] Is that what you're telling me?

[294] Right, right, right.

[295] Okay, I'm just trying to make sure I understand the dynamic of what's going on here.

[296] But this is the woman you want to marry, you know that.

[297] You want to marry her?

[298] Yeah.

[299] Yeah.

[300] Okay.

[301] So I disagree with the idea of you going to zero a month housing.

[302] I think that's a trap.

[303] And I think if you go there, you have the ability to get comfortable there.

[304] and I think you'll limit your income because of that.

[305] I would not do that.

[306] I think that's going backwards.

[307] Do you see why I feel that way?

[308] Yeah, I do, but that's why I wanted to keep working the two jobs just so I can hurry and get out of debt.

[309] How much debt do you have?

[310] Tell us your debt.

[311] I mean, because I was paying, because right now when I'm living out, I'm literally making just enough to pay all the bills.

[312] When is the wedding?

[313] The wedding?

[314] I mean, I want to.

[315] I want to get out of debt first.

[316] Why?

[317] You said why?

[318] Babies are a bigger deal than debt.

[319] Yeah, yeah, yeah.

[320] I mean, I want to be able to be prepared for all that, but I wanted to, I mean, I wanted to get married.

[321] Too late, there's a baby coming.

[322] Right, right, right, right, right.

[323] And when we say, just to clarify, when we say get married, like, this could be you going down to the state court house and getting your marriage license.

[324] I mean, that was the, I mean, that's the goal.

[325] That's what I wanted to do.

[326] But you can do that in an afternoon, bud.

[327] But, like, this is, you can do that instantly.

[328] You could do that tomorrow.

[329] And I think you should.

[330] I do too.

[331] I mean, that's what I wanted to do.

[332] No, it's not, if you wanted to do it, you'd have done it.

[333] She wanted to wait.

[334] For what?

[335] To wait until the baby was out.

[336] Just so.

[337] Why?

[338] I mean, she said, you know, she's big.

[339] I don't say she's good, but.

[340] She's thinking about a party.

[341] She's thinking about a party.

[342] And what you need to talk to her about, here's where she's not thinking.

[343] this protects her too.

[344] It protects his child.

[345] Because right now it protects everybody.

[346] Because right now she's just living in your house with her two kids.

[347] And she's the one carrying another baby.

[348] She's the one at risk here.

[349] So you marrying her is an act of love that protects her.

[350] Yeah.

[351] And legally.

[352] Listen, so what would you called us?

[353] Ask us what we would do.

[354] And she doesn't want you to work as much.

[355] So I agree with you.

[356] I think, I agree with you.

[357] I think you ought to be working all the time like a madman and get the mess cleaned up to provide for this young family that you have now committed to and created okay so you have a child that's yours and two step children um if i woke up in your shoes sir i would get married this week and if we want to have a party later when she's not carrying a child and not you said big you know not she she wants good nice pictures or something that's fine we'll have a party and a celebration later but let's get married and establish for this child when this child is 30 you can look at them and say when you were born we were married it does make a difference and yeah and that was my goal but i want to say that it's not your goal it's not your goal okay if it was your goal you would have already done it okay you're you're calling me up trying to get out of debt with gazelle intensity and you're crawfishing like nobody i've ever seen on getting married so you you know if i woke up in your shoes.

[358] I would go get married.

[359] I think that's a bigger part of the discussion here than whether you work a few extra hours in the next nine weeks.

[360] I think so too.

[361] And then it's also we're talking about who this person is in your life because if you call me and tell me it's a girlfriend telling me telling you to work less, I'm going to say she doesn't have a vote.

[362] But if she becomes your wife, there is a vote.

[363] I still think that she would be incorrect.

[364] You do need to work.

[365] She gets a half a vote because she's the mother of your child.

[366] She gets a full vote because she's your wife.

[367] She gets no vote if she's a girlfriend.

[368] As a matter of fact, it puts her in jeopardy if she's telling me I can't go succeed.

[369] Facts.

[370] We might put her on the street in that case.

[371] So I'm not hanging out with somebody telling me not to win.

[372] Yeah.

[373] I do think he needs to clarify.

[374] Like he's not talking to have a party later.

[375] He just wants a piece of paper.

[376] If a guy says, listen, I want to mirror you tomorrow.

[377] I'm saying yes so that we can go into this with the right relationship, with the right protections in place.

[378] No one even knows you have the certificate.

[379] Like if you want to keep it a secret who cares and have the party later surprise surprise between you her and god that's right that's it and whoever the justice of the peace is that's what i would do because it sets up then okay now my wife and i and our baby on the way and her two children uh from a former relationship are our family unit and it is now my job honey to go and provide for this family unit i know it's difficult right now because you got a a baby coming any minute and you got i mean my son my daughter -in -law is getting ready to have a child any minute, and she's got a three -year -old who's, you know, that's more than anybody should have to deal with right there.

[380] That right there is enough, okay?

[381] And your wife's got two sitting there on top of this.

[382] And it's just, she's, I mean, because I know, because grandma and grandpa have been picking up the three -year -old and getting her off of it because she's driving everybody crazy.

[383] So he's driving everybody crazy.

[384] She's not.

[385] But, so, you know, that's what, all this dynamic is going on.

[386] And she feels like you've left her at home to deal.

[387] with all of it.

[388] And so I think what we're talking about is woven into this.

[389] And then sit down and go, okay, I'm going to help you with these kiddos and I'm going to work like a maniac.

[390] So let's figure out how I can do both because we've got to get up and get out of this mess.

[391] And we got to go to where 10 years from now, we look back and go, well, that was the start of a whole new, wonderful life.

[392] And it, because Joanne ain't afraid of work.

[393] That's a big deal, Joanne.

[394] You ain't afraid of work, you can go win, brother.

[395] That's a big deal.

[396] And Dave, I don't know what you would call this, but there is something that happens when you change titles.

[397] When you become dad, husband, wife, all those things.

[398] Like, you have to then rise to the occasion as opposed to...

[399] I don't want to be tacky, but husband is a lot bigger deal than baby daddy.

[400] I was just going to say that.

[401] I don't want a baby daddy.

[402] Like, give me a husband.

[403] Yeah.

[404] And I'm saying.

[405] I mean, I mean, and, you know, and I don't want a baby mama or whatever you call it.

[406] No, thank you.

[407] I want a wife.

[408] I mean, I want to be joined in partnership to go live the goals into the future.

[409] Yes.

[410] Step into a vision.

[411] Step into a dream.

[412] And kids want dad, not Joanne, not you can just call him by his first name, right?

[413] They want dad, papa, dad, dad, all that.

[414] Yeah, I'm a dinosaur.

[415] That first name thing's tough for me. It's hard.

[416] My kids didn't do that until they came to work here, and we made them start calling me Dave so that it didn't freak out the rest of the employees.

[417] But other than that, oh, my gosh.

[418] This is The Ramsey Show.

[419] I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.

[420] Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible.

[421] People that call in and their spouse has passed away suddenly.

[422] and they don't have life insurance.

[423] When you have to think through, how am I going to pay my bills?

[424] I'm going to eat next week.

[425] Yeah, in the middle of all that grief.

[426] Like, it's just, it is, it's terrible.

[427] And so life insurance is the one thing, especially as a mom with three little kids that I'm, like, so big on for people to get because it's inexpensive.

[428] Zander is the place that Winston and I actually get all of our life insurance.

[429] And it doesn't cost much because Zander shops among a gazillion different companies.

[430] It doesn't cost much.

[431] You just have to admit that someday you're not going to be here.

[432] You've got to say it out loud, and you've got to say, I'm going to say, I love you to my family by taking care of them and taking the time to put this stuff in place.

[433] The cost of stinking pizza.

[434] To get a free quote, call 800 -356 -4282.

[435] That's 800 -356 -4282 or go to Xander .com.

[436] Jade Warshall -Remsey, personality, is my co -host today.

[437] Open phones at AAA 825 -2 -25.

[438] Jason's in Kansas City.

[439] Hi, Jason.

[440] How are you?

[441] I'm good.

[442] How are you?

[443] Thank you for taking my call.

[444] Sure.

[445] How can we help?

[446] All right.

[447] So I may break down a little bit on this one.

[448] So I'm getting ready to inherit about $185 ,000.

[449] Who passed away?

[450] Following the baby steps, my dad.

[451] Oh, I'm sorry.

[452] When did he pass?

[453] Just about three weeks ago.

[454] I'm so sorry.

[455] What happened to him?

[456] He was in Vietnam, so Agent Orange got a hold of him and throughout the years, just dementia, prostate cancer, amongst many others.

[457] How old was it?

[458] How old was he?

[459] He just turned 81.

[460] Wow.

[461] Yeah, so he turned 81, seven days later, he passed away.

[462] Wow.

[463] And you're getting $185 ,000?

[464] Yeah, through cash and life insurance policies and various, a few other various things, we're estimating it somewhere between $170 ,000 to $190 ,000.

[465] So about $185 is pretty close.

[466] And I interrupted you, but I wanted to know more.

[467] Thank you for sharing that.

[468] I'm sorry for your loss.

[469] I appreciate that.

[470] So my biggest question is, I'll start with the question and then we can go from there.

[471] My biggest question is when it's all said and done after following the baby steps and everything else, would it be acceptable to take some of that money?

[472] and purchase a newer truck.

[473] I currently have a truck that I owe about $4 ,800 on it still.

[474] Our only other debt is about a $2 ,900 credit card.

[475] We'd be able to have a fully funded emergency fund.

[476] I've been doing 15 % investment for quite a while.

[477] We adopted two kids in 2022, so the state gives us a subsidy from there, 100 % of that subsidy is being set aside in the 529 for their college.

[478] So that puts us pretty close to step six.

[479] What's left is not quite enough to pay off the house.

[480] We plan on investing quite a bit.

[481] We plan on setting some money aside for future home improvements.

[482] And so my question is, would it be acceptable to purchase a want at that point?

[483] If you're in 4, 5, and 6, a want is acceptable.

[484] Okay.

[485] But you're not, you've not been following the baby steps, and you're still not following them with what you're outlining.

[486] So let me go back and clarify.

[487] Okay.

[488] You don't have an emergency fund in place yet, correct?

[489] We've got about $3 ,000.

[490] You don't have an emergency fund in place yet.

[491] And you started Baby Step 4 without that being done.

[492] So you're not following the baby steps.

[493] And you've got debt of $2 ,900.

[494] So you've not been following the baby steps already.

[495] So if you want to follow them, we can show you exactly how to do that.

[496] But then you've got to say, that's what I'm really do.

[497] You can't sort of, you either is or you isn't, okay?

[498] And so you isn't right now.

[499] So first thing is we pay off the $2 ,900.

[500] The second thing is we fully fund the emergency fund.

[501] And then as you said, four and five are already underway, which brings us to six.

[502] but what we teach is when you're in Baby Steps 1 through 3, which is getting out of debt and having the emergency fund, you're in tents and you don't buy anything, you don't do anything until you get the emergency fund in place and they're out of debt.

[503] Now, you're going to accomplish that in one fell swoop here.

[504] Then when you're in 4, 5, and 6, you move from intense to intentional, and that's when you would use some of your money to upgrade a truck, buy a couch, go on vacation, and put the rest towards Bay, Maybe steps four, five, and six, the house, not invest some of it.

[505] Now, what's this home repair or remodel future thing?

[506] We had thought about, you know, upgrading some landscaping.

[507] They're basically more or less wants also.

[508] To what kind of a number?

[509] We had debated about 50 ,000.

[510] Of landscaping?

[511] No, no, no, no. I'm talking total homothropics because, you know, we're looking at possibly redoing the driveway.

[512] There's, you know, painting or siding, the, you know, the new gutter.

[513] That's fine.

[514] All right, so let's walk back, let me walk back through this, okay?

[515] $2 ,900 is there only debt other than your home, correct?

[516] No. The truck, right?

[517] Oh, $4 ,800 on the truck, that's right.

[518] Okay, so we pay off, well, let's just round that and call it $10 ,000, okay?

[519] You're debt free.

[520] And then you need another 15 in your emergency fund.

[521] That's 25 out of the 185.

[522] That puts us at 160, I think, out of 185.

[523] I just spent 25 to get you through Baby Step 3.

[524] 160.

[525] What's the balance on your mortgage?

[526] 181 and change.

[527] Okay.

[528] And what is the truck worth that you're driving today?

[529] I've blue -booked it anywhere between 9 ,500 to 13 ,000.

[530] All right.

[531] Let's call it 12.

[532] And if you get 12 for it, what are you going to buy?

[533] What price range?

[534] I was looking for less than $40 ,000.

[535] What's your household income?

[536] Last year I made $106.

[537] This year I'm looking at it, or between $110 to $115.

[538] What's your wife's car?

[539] She drives a Dodge Caravan.

[540] this is 40's too much you don't need to have more than half your annual income going into going into things with wheels and motors and you will have more than that with her van and your 40 truck will be more than half your annual income so we need to back your truck down to 50 minus her car value we'll call her car value 10 for the fun of it um that would put you at 40 um but 30 30's going to be fine you that's enough uh so i put I'd move you into a 30 truck, so you need 18 more to do that because you've got a 12 truck.

[541] Okay?

[542] So we're going to upgrade by 18 or 20 ,000 bucks in truck.

[543] We'll make it 20 for the fun of it, so I can keep this in my head.

[544] So 160, that's 140 left.

[545] And then if you're going to spend 40 on the landscaping and home improvements, that leaves you 100 to throw towards your mortgage and you only owe 80.

[546] Okay.

[547] You don't do investing.

[548] you throw all money above 15 % at Baby Step 6 and above Lifestyle.

[549] And you're using some of this for lifestyle, a little bit on the house and a little bit of upgrade on truck.

[550] And you're cleaning up some of your earlier baby steps right quick.

[551] And then you're going to throw the rest of it at the house.

[552] That's what I would do.

[553] That's what we would teach.

[554] I think that's right on.

[555] That's following it to the letter.

[556] Okay.

[557] And then how quick we're going to pay off $80 ,000 on the house, making $100 with no payments in the world?

[558] and living on a tight budget and watching what we're doing.

[559] You can still go on vacation.

[560] You can still go out to eat.

[561] You can still enjoy some of your money.

[562] But I want to start throwing some money at this house and be done with this house in like three or four years, okay?

[563] Yep, that sounds good.

[564] That sounds like a plan.

[565] How old are you?

[566] I turned 50 here in two weeks.

[567] Okay.

[568] And what's the house worth?

[569] Last estimate was about 320 to 370 depending on what website.

[570] you're looking at okay and how much is currently in your 401k's and mutual funds uh i've got a IRA that stands about 125 ,000 uh i just started this job about two years ago so i've got about 30 ,000 in a 401k okay uh based on that at about 55 years old you'll be a millionaire good if you do what i just told you to do if you keep screwing around with some of other stuff you won't make it that fast Were you paying off debt before you got this inheritance?

[571] Were you actively working on it?

[572] We've gone back and forth.

[573] We've been debt -free before, and then we've kind of made a few mistakes, and then we very quickly scrambled to get back out of it and stuff like that.

[574] You're going to have to pay careful attention.

[575] You're going to have to pay careful attention going forward that you don't get sloppy because...

[576] Yeah, brace yourself for a guilt trip.

[577] Are you ready?

[578] Yeah.

[579] You got a hold of something?

[580] Yeah.

[581] Okay.

[582] If you go back in dead after this, you're dishonoring your father's memory.

[583] Yes, I can understand that.

[584] Okay.

[585] The best way you can honor him is to do good with the money he left you.

[586] So this is your last time to fall off the wagon, my friend.

[587] Time to get with it.

[588] You're 50 years old.

[589] Now let's play.

[590] Well done, sir.

[591] Well done.

[592] Appreciate the call.

[593] This is the Ramsey Show.

[594] Hey guys, George Camel here.

[595] No matter what platform you use for news or entertainment, you and I both know it is way too hard to keep your feed from getting junked up with bad content.

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[607] Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people, build wealth, do work that they love and create actual amazing relationships.

[608] I'm Dave Ramsey, your host, Jade Warshall, number one bestselling author and Ramsey personality is my co -host today.

[609] Open phones at AAA 825 -5 -225 Matthews in Orlando.

[610] Hi, Matthew.

[611] How are you?

[612] Oh, I'm fantastic, Dave.

[613] How are you?

[614] Better than I deserve.

[615] What's up?

[616] Wonderful.

[617] So I'm on 80 step number two, and my wife and I are thinking about buying a home compared to waiting until we pay off all of our debt, which is two cars total of $60 ,000 before we go into buying a house.

[618] We're currently, yeah, sorry, we're currently using all of our income to pay.

[619] pay off the cars, but we're wondering if we should use what we have to put money down on a house.

[620] No. You should pay off the cars.

[621] You know, here's another idea.

[622] You could just sell them.

[623] I was thinking that.

[624] What's your household?

[625] What's your household income?

[626] What's your household income?

[627] We make just under 200 ,000.

[628] Okay.

[629] And are the cars 30 apiece?

[630] 25 and 35.

[631] So how quickly can you pay them off if you just pay them off before you buy a house?

[632] we're thinking under six months maybe even earlier if we put everything we have so what's the big deal you just got house fever yeah well um my my brother who i'm very proud of who actually introduced me to you he just sold his house and got 160 000 equity and he's able to move with his wife down the florida and we thought wow you know we're paying you know x amount of dollars in rent right now what if we took the next six months and started paying towards a house while we're paying off our cars but then we're like we won't that stop us from paying off our debt and make paying off a house and getting to our goals wouldn't that make it take longer compared to that's why we have the baby steps in the order they're in yeah you want the fullness of your income going towards paying off your debt while you have it and you think that if I get that car debt taken out completely I don't we probably could sell our cars but I think I don't think you need to I think you just need to wait six months that house fever.

[633] You're looking at somebody else's life and trying to make yours look like theirs.

[634] That's a bad plan.

[635] And what are your payments?

[636] What do you pay in every month for these cars?

[637] So one is 750 and one is 900.

[638] We make the...

[639] Yeah.

[640] So you're having an extra $1 ,500 a month as soon as you get them paid off.

[641] And you make enough to knock them out in six months.

[642] I agree with you.

[643] If I can pay them off in six months, I would just wait six months and pay off the cars and save up your down payment.

[644] There's no big deal here.

[645] There's another part of this, though, that we're not talking about.

[646] I want to know, do you have three to six months of expenses saved?

[647] Because I totally do not want you moving into a house with debt and without additional savings.

[648] That's a recipe for disaster.

[649] No, we don't have that now.

[650] It's not time yet.

[651] I hate to tell you that, but it's not time yet.

[652] No, that's really good to know.

[653] Thank you.

[654] I really needed to hear that.

[655] I'm glad.

[656] Thank you.

[657] Please, the fastest route between where you are right now and financial peace, two words that don't go together, like airline service, The fastest route between where you are right now and being wealthy is pay the cars off, build an emergency fund, build a down payment by a house.

[658] If you go in that order, if you go in a different order, it's going to slow you down or even set you back substantially.

[659] But the number of months between now and you have a net worth of a million dollars and owning a home and having money going into your 401ks, the number of months, the number of months, The shortest number of months is doing it the way we're talking about.

[660] It's not trying to do everything at one time because someone else just bought a house or sold a house.

[661] Well, let me tell you, nothing is worse than turning around you buy a $500 ,000 house.

[662] And then the AC goes out and you don't have $5 ,000 to get a new AC.

[663] That is backwards.

[664] And so when you move into a home and you don't have an emergency fund to cover the things that will happen eventually, you know, you thought the leak was fixed is not fixed.

[665] You thought the roof was good.

[666] It's not good.

[667] There's always something.

[668] Aaron is in Portland, Oregon.

[669] Hi, Aaron.

[670] How are you?

[671] Doing better than I deserve, Dave.

[672] Good.

[673] How can I help?

[674] My question is whether getting something like a car shield, which is a insurance against car maintenance, is a good idea given the fact that what I do for a living is DoorDash and Uber Eats.

[675] No. It's a horrible idea.

[676] Okay.

[677] Here's the numbers on extended warranties and car warranties.

[678] 85 % of what you pay for a car warranty does not actually cover the math of the potential loss.

[679] The potential loss is covered by 12 to 15 % of what you pay.

[680] So if you pay $1 ,000, you basically, on average, you're going to get $150 worth of value.

[681] you.

[682] The other 85 % goes to profit, to commissions, to marketing, and more marketing.

[683] And so, you know, and if you're buying an extended warranty folks for there are others out there, not Aaron, but if you're on a car lot and they're trying to sell you an extended warranty, the car dealer very well may be making more profit on the extended warranty than they are on the car.

[684] That's how bizarre these things are.

[685] the math on it is what they pay a car salesman or a car dealer to sell you an extended warranty as a percentage is huge it is more than the actual cost so Aaron anytime you open an insurance company or a warranty company you build a table of statistics okay it's called an actuarial table and if you're opening a life insurance company you say all right number of 60 -year -olds out of 1 ,000, 60 -year -olds that are healthy, how many die in a year?

[686] And then you can back into the mathematics and say, here's what it costs me to provide life insurance if I'm a life insurance company to a 60 -year -old.

[687] And that's a statistical table.

[688] Does that make sense?

[689] And you do the same thing if you're opening an extended warranty on a car or a home warranty or anything like that.

[690] You say, all right, I'm going to cover brakes, drive train.

[691] engine on what's your what's your car Aaron what are you driving uh a 2012 Ford Fusion okay a 2012 Ford Fusion I'm about if I cover a thousand two thousand 2012 Ford Fusions my cost on average to to of the things I cover the number number of people out of a thousand that are going to bring me claims when their car breaks down my cost on average is going to be X and that X is somewhere around 12 to 15 % of what they're trying to charge you for an extended warranty.

[692] And so, meaning that law of averages, you could break down twice as much as average and still spend half as much as you pay for the warranty.

[693] Wow.

[694] That's the actual mathematics.

[695] That's crazy.

[696] So what if you just took that money and threw it in a high -yield savings account?

[697] And built you an emergency fund.

[698] Look at that.

[699] And up your budget for car repairs if you're running the wheels off your car.

[700] 100%.

[701] Yeah, you're going to have to literally put wheels on the car, tires.

[702] You're going to have to put brakes on the car.

[703] And you're going to have to run more oil changes.

[704] And you're going to have more and more miscellaneous odds and ends.

[705] More than anything else, though, Aaron, you're losing value in the vehicle because miles cost you value.

[706] So you run the miles up.

[707] You're deteriorating your value very rapidly.

[708] And that's an unseen force that doesn't hit your checkbook until you sell it.

[709] But that, you know, you put 200 ,000 miles on this car.

[710] you trashed its value, and that's the other, that's the dirty little secret of door dashing.

[711] That's true.

[712] This is the Ramsey Show.

[713] This show is sponsored by BetterHelp.

[714] Hey good folks, the back -to -school madness is upon us.

[715] It's hitting us right now.

[716] We got travel and work and all these forms to fill out now and sports to travel to and on and on.

[717] My family's schedule is so packed, and we haven't even begun talking about things like exercise and day.

[718] nights and counseling and church and home projects.

[719] And those are the things that make our life even worth living.

[720] Here's what I've learned.

[721] When it comes to taking care of me, I have to put on my oxygen mask first.

[722] And that means that I have to do the things that keep me well and whole.

[723] And I know that you have to do those same things too.

[724] So don't skip the things that matter to you, including regular exercise, hanging out with your friends and regular therapy appointments.

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[731] call my friends at better help visit betterhelp .com slash deloni today for 10 % off your first month that's better help help dot com slash deloni jade warshall ramsay personality is my co -host matt is in miami hi matt how are you hey davy i'm doing better than i deserve how are you better than i deserve sir what's up well awesome glad to hear that so i'm i'm in a little bit of a situation here I am following your baby steps, and I'm currently have about $10 ,000 in debt in my car, and I'm planning to pay that off soon.

[732] But I'm thinking about the next baby step, which is just trying to pay the house off as fast as I can, right?

[733] So with that said, what is my situation right now?

[734] I have about $50 ,000 in the stock market, and that $50 ,000, I'm using the stocks that I have, to put covered calls on my stocks.

[735] Therefore, it generates me about $2 ,000 per month being very conservative, right?

[736] And I'm a little divided because I can put that money back into the stock and make even more, put more contracts onto that stocks and make more money.

[737] Or I can direct all that premium that I receive for the stocks towards the payment of the car and the house.

[738] So I would like to, you know, get a perspective from you what would be the best way to go about that.

[739] I don't think you have any concept of how much risk you're taking.

[740] Okay.

[741] You've hit with your covers.

[742] You haven't had a problem yet.

[743] And as soon as you miss one of those covers, you're going to realize that 2000 is not your worst -case scenario conservatively.

[744] A negative 10 ,000 is your worst -case scenario.

[745] Right.

[746] Yeah.

[747] You're playing dice in Vegas.

[748] And you feel, and you feel like you're taking no risk at all because you think you've got it figured out.

[749] Yeah, you left out a very important word and a very important side of the equation.

[750] You didn't even, you said, I can make, you didn't say potentially, and then you didn't say what could happen if you lose out.

[751] Yeah, if you miss the cover, if you miss the call, if you miss your, if you miss your numbers, you know what I'm talking about.

[752] You can get upside down as fast.

[753] You can get right side up here, brother.

[754] 78 % statistically, 78 % of the people who day trade stocks, lose money that's eight out of ten okay okay so I don't I do I do not day trade stocks I don't do puts I don't do calls I don't do options I don't do covers I don't do commodities I don't screw with any of that stuff I like the money that I earned too much to put it that much at risk no thank you and I also don't play the roulette wheel in Vegas so right it's in it they're all right there about the same level so what would I do if I were in your shoes I would sell the $50 ,000 in stock this instant, pay off your car, build your emergency fund, make sure you're putting 15 % of your income into retirement.

[755] But Matt, you're like the guy who walked in, walked through the lobby of the, of the casino and dropped two quarters in and hit.

[756] Yes.

[757] And you end up putting your whole freaking paycheck back in trying to replicate that bogus luck that you had that wasn't luck at all.

[758] It was them playing you.

[759] And that, you know, you, you haven't, you haven't, you haven't, you bled yet from this.

[760] I can tell.

[761] Yeah.

[762] Because you think it works every time.

[763] And so it doesn't work every time, dude.

[764] I promise you.

[765] That's not how that business works.

[766] And so, you know, you're risking and risking and risking and risking and risking and risking and risking and risking and risking with money you don't have, really, because you're broke.

[767] You got $10 ,000 in debt.

[768] You don't have an emergency fund.

[769] And, you know, if you've got $2 million in net worth and a bunch of money laying around and you want to goof off with 50 grand and screw around with it on the roulette table or screw around with it doing day trading go ahead I got a friend of mine that does that he thinks it's entertainment I don't you don't do anything I'm doing anything I don't know I don't own a single single stock that's so cool if someone handed me one today I would sell it and it's because I'm such a nerd I know the probabilities yeah I know that if I the moment I start thinking I can do a better job than a billion dollar mutual fund at analyzing stocks.

[770] The instant I think that is the instant I'm wrong.

[771] Yeah.

[772] And I just don't do it.

[773] And consequently, I've got a lot of money because I don't lose it all the time.

[774] And so that that's the deal.

[775] So Matt, I hope we're giving you a little something to think about.

[776] I don't know if we are or not because I don't think you're in a very good place to hear this because you're at you're at the stage where you think you've got it figured out and everybody else is dumb.

[777] And that's a bad stage to be in.

[778] That's right before you lose a bunch of money.

[779] So I hope I can just scare you a little bit and you'll go ahead and stay away from this.

[780] But I don't know.

[781] Usually you've got to lose some to figure it out.

[782] At least I lost five grand on a gold option.

[783] I took an option position on gold back before I went broke and I had some money I had a lot of money flowing in I was in my 20s and a buddy of mine came to him and he goes hey this guy's been picking these gold prices and we'll set our option number and if y 'all don't know how option works you have the I had the option to buy the gold at x and if it was above that I could that option was going to go 10x I would have made 50 grand off that 5 grand okay and if you if the option number doesn't go above that you lose 100 % of what you put in so it's either I either got I don't give five grand back.

[784] I either get 50 grand or zero.

[785] But this guy hit 12 times in a row.

[786] He predicted the option prices.

[787] So me and my genius beer drinking buddy decides we've got this thing figured out because this guy's got it figured out.

[788] We're going with this guy because he's got a pattern going.

[789] He's got this thing figured out.

[790] Bull crap.

[791] And so I put five grand up and you know where this is going.

[792] Yeah, I lost the five grand.

[793] But I have a rule.

[794] I don't do stupid stuff two times.

[795] I only do stupid stuff once.

[796] Fair enough.

[797] And so I've already got that one out of the way.

[798] That's fair enough.

[799] That one's out of the way.

[800] I don't ever have to do that stupid thing again.

[801] And then I get to tell Matt, please don't do it.

[802] Well, there's two, I always say there's dumb decisions.

[803] There's two types of dumb decisions.

[804] It's the dumb decision that you're like, hey, this is my first rodeo.

[805] I didn't know any different.

[806] I tried what I thought could work and I was wrong.

[807] I learned from it, right?

[808] Then you've got the stupid decision where everyone's telling you, hey, if you do that, you'll die.

[809] Like, don't do it.

[810] I've tried it.

[811] This is what happens.

[812] And then you go and do it anyway.

[813] Because you think you're the exception of the rule.

[814] That's the stupid choice you do not want to make.

[815] That's the pride goes before the fall.

[816] Almost certainly.

[817] And when I think I'm smarter than the averages, when I think I'm the guy that can beat the averages, that's when you're getting ready to take it on a chin.

[818] So Matt, I hope we give you something to think about.

[819] But I hope we did.

[820] I just leave it at that.

[821] Stevens in Knoxville.

[822] Hi, Stephen.

[823] How are you?

[824] Hey, Dave, I'm doing good.

[825] How are you?

[826] Better than I deserve.

[827] What's up?

[828] So I find myself, my wife and I, we are in our first year of parenthood.

[829] We're two years out of grad school.

[830] And we talked to a real estate agent yesterday, and basically it comes down to weekend after fees and everything else.

[831] We paid the mortgage off.

[832] We've done everything else.

[833] Come out with about between $250 and $300.

[834] thousand you have a paid for home no no so that is the other thing I thought you said we got the we got the house just before the market went crazy okay and so so you have 250 ,000 worth of equity yes okay so if you sell the house you put according to them okay so if you sell the house you put a quarter million in your pocket so what's your question so the issue is in total um we have no other debts except for student loans but we have $183 ,000 in student loans.

[835] Good Lord.

[836] Oh, boy.

[837] So, yes.

[838] What's your household income?

[839] So we, this year, are bringing home about 112.

[840] What in the world do you get your postgrad in?

[841] So my wife, I got money in advertising as an undergrad.

[842] I only have about $13 ,000 in student loans.

[843] And my wife has the rest, and she has her doctorate in psychology.

[844] So what are you trying to do?

[845] Sell the House of California.

[846] Yes, she is working.

[847] But neither one of you're making much, huh?

[848] No. So with this being the year that our son was born, with her being a child psychologist, we made the decision and felt a conviction that one of us needed to be home.

[849] So she works half the week and then I worked the other half of the week.

[850] I've been something to think about $4 ,000 and something -thousand -thousand -doubt to become a child psychologist.

[851] Yes.

[852] Oh, my gosh.

[853] Okay.

[854] I would not sell your house unless you just hate it.

[855] I would roll up my sleeves, live on nothing, and both of you get to work as fast as you possibly can and get this student loan debt cleared up.

[856] No excuses, no reasons.

[857] You need to get it cleaned up.

[858] If you want to sell your house and live in a rental and be debt -free, you can do that.

[859] But you're still going to have to go make some money to justify the expense that both of you went to.

[860] This is the Ramsey Show.

[861] You've worked, saved, sacrificed, and been gazelle intense with your financial game plan.

[862] But do you have the right defense in place, like the right health insurance?

[863] Look, you can't walk past a doctor's office these days without getting a massive bill.

[864] And if you don't have health insurance, a major medical situation can undo all of your hard work.

[865] That's where my friends at Health Trust Financial can help.

[866] They work for you, not the insurance company.

[867] they find you the right health insurance and they save you money.

[868] Ramsey has recommended health trust financial for two decades because they're the experts and whether you're 19 years old or 90 you can trust them to do two very important things.

[869] Listen to you, then find you health insurance coverage with everything you need and nothing you don't.

[870] Health Trust Financial is your one -stop shop for unbiased advice about affordable health insurance options.

[871] They could save you hundreds of dollars a month, so make sure you're not overpaying.

[872] Go to health trustfinancial .com today.

[873] Healthtrustfinancial .com.

[874] Buying a house in this weird real estate market is weird.

[875] Selling a house in this weird real estate market is weird.

[876] If you want to navigate weirdness with one of your most expensive, if not your most expensive asset, you probably need a pro in your corner who's done it before.

[877] Not your aunt Sally who got her license to sell real estate three weeks ago because she thinks it's fun.

[878] No. No. Sorry, Aunt Sally.

[879] You want a pro who's high octane, high protein that does hundreds, if not close to a hundred transactions a year.

[880] And that's the only way you would get to be a Ramsey trusted real estate agent, an endorsed local provider that, and there's thousands of them across America that we have vetted.

[881] We've done the due diligence on them.

[882] They're the people that get her done.

[883] They leave the cave, kill something, and drag it home, baby.

[884] And if you want that kind of real estate agent in your corner to help you buy or sell, just go to Ramsey Solutions .com slash agent to find a Ramsey trusted real estate agent for free.

[885] Pedro is with us in Chicago.

[886] Hi, Pedro.

[887] How are you?

[888] Hey, doing good.

[889] Very good, David.

[890] It's an honor.

[891] Honor to speak with you, sir.

[892] How can we help?

[893] Okay, so I'm about to remarry my first girlfriend, the mother of our three grown -up and working daughters.

[894] I just found out she makes a 62, about 603K net a year, and finally got out of her that when I was trying to make a budget for her soon -become plan that she owes over $76 ,000 in credit cards.

[895] So I would have no issues paying it.

[896] probably pay it off in a year, year or half after we get married.

[897] It just makes me mad.

[898] And I'm considering three options.

[899] Filing for Chapter 13 bankruptcy, I don't care if the credit goes bad.

[900] We don't ever plan on taking any credit ever again, so it's not a concern for me. Negotiating with the credit cards for a lower payoff of the credit cards, or the third one, just forget everything and just attack them with a gazelle intensity and pay them off.

[901] What would you recommend?

[902] Chapter 13 bankruptcy is five years long, and there is a formula used to determine what percentage of the debt she would have to repay, and they would use her income against that formula, and over five years with only 76 ,000, she's going to pay almost all of it over five years.

[903] So you're going to gain almost nothing mathematically with a Chapter 13 bankruptcy, and there's a means test used to see if you can file a Chapter 7 bankruptcy and wipe them completely clean.

[904] she will not pass that because she has the means to pay this.

[905] She just hasn't because she has a spending problem, which is your bigger problem than the $76 ,000.

[906] You're getting ready to marry a woman who doesn't know how to stop spending.

[907] Yes, I'm not to worry about that.

[908] I'm pretty sure I've got to worry about it.

[909] We'll get on your program and we'll pay it off and I'm pretty sure in less than about a year, year and a half.

[910] Why do you think she'll suddenly change?

[911] I think she's carried this death for many years and she's been just unable to get out of it but I've known her and I'm sure she will be willing to come to do the program, get on the program and just Okay you've talked to her about it absolutely yeah yes okay because I tell you that there's nothing in this story that tells me that she's going to be willing to do this or able to do this so you must know you know something we don't know yeah yeah i'm just going to the right way we'll have one account one budget we're going in the whole program so i know but you can't muscle this if she's pulling against you and so she's got has she said i'm out of control i need help i don't know what to do i'll do anything yes yes that's called repentance and that's a chance of turning this around if she said well it's just the way life is you're screwed no no no no she she's been crying she's been carrying the shame for years trying to struggle try to get out of it and without finding solutions okay that's a different side because when you first said you said you were mad and that you know so that's why I was trying to get that he's mad at the credit car companies taking advantage of her got you my mother credit card company is being able to lend people more money than to make in a year I got you yeah yeah yeah so um what would I do if I woke up in your shoes.

[912] I would put your income and her income together when we get married, as you said, on one budget, and I would list these, and I would work a debt snowball, and I would pay them off in a year.

[913] Okay.

[914] That's simple.

[915] Yeah, we can do that.

[916] That's simple.

[917] It's not about credit.

[918] It's about she borrowed the money.

[919] It's about your wife's integrity.

[920] She has the money to pay her bills.

[921] She should pay her bills now that she's marrying you and has a system and your income to add to it.

[922] and by the way she had the money all along to do something towards this and to not continue to dig this hole she's not a victim she chose to spend more than she makes she didn't make a lot of money but she chose to not live on that to the tune of 76 grant and so um you know these are very concerning things in a second marriage and you're coming back in and you're sounds like a lot of years in between the two times you've been married to her and well yeah a lot going on here brother uh you probably ought to sit down spend some time and do some good in -depth pre -marriage counseling and dig into this and this money piece is part of the things that we discuss as we do that just to make sure that we're we're i'm not saying you guys can't make it i think you can make it because i think you're a strong dude uh but but i would want the information that a good counseling session or two would give me so if we gave people listening let's start with three questions to ask before you tie the knot three questions like three three main points financially to discuss my first one would be like what's your philosophy around debt like if you do you like debt are you interested in paying off the debt you have are you interested in going back into debt or do you want to avoid it that would be my first question second question probably would be something around the lines of what what's your philosophy on combining money is it yours versus mine is it hours hours do you trust me enough to combine like i'd want to know about that and i'd probably want to know their spending slash saving inclination that's good i like those three you got anything to add or are we slamming the gavel no i mean if you're gonna you know like if I was a coaching a 23 year old couple that was engaged and they were going through a normal cycle of pre -marriage counseling which by the way increases the probability of the of your of your marriage lasting if you do get married after doing pre -marriage counseling because sometimes I'll break you up but if you do get married after doing pre -marriage counseling you have a very high probability of making it yeah it adds the data on this is clear okay that's true So let me add that in there.

[923] But if you were doing that, and a good pre -marriage counselor, one of the things I would always put in there is a practice budget.

[924] Oh, that's good.

[925] Where you act like you're married and say, okay, here's all of our debt.

[926] Now it's ours.

[927] Here's all of our income.

[928] What does this month look like?

[929] And then that exposes what the philosophies are.

[930] That's good.

[931] On debt, on saving, on spending, and on lattes and whatever.

[932] Yeah, well, everything but pumpkin spice, you know, it's like, Yeah, all right.

[933] So, you know, everything but my nails, you know, or I don't know.

[934] Yeah.

[935] Or what is the guy?

[936] Everything but me buying, going hunting, I have to get a guy in there, right?

[937] Golf clubs.

[938] I need a golf.

[939] I got everything but my, my, my, the club fees.

[940] I can't drop my club fees.

[941] Yeah.

[942] So, yeah, I mean, you really get into what's, what the deal is, all right?

[943] So, yeah, a good practice budget because we do know the numbers as well.

[944] and this is a very high probability that all the marriage data tells us if you're an agreement before marriage in detail on four areas, your probability of making it is in the 90 percentile.

[945] Money is the number one cause of divorce, money fights, and money problems.

[946] So if you're an agreement on money, you've got number one out of the way.

[947] That's right.

[948] Kids, how many to have and who runs the house after you have them?

[949] The kid or the parents.

[950] Ah, how we raise these.

[951] Yeah, how do we raise?

[952] There's anarchy going to be the deal here, okay?

[953] In -laws and crazy people in the family.

[954] How are we going to deal with the extended family?

[955] Is Mama still going to tell me how to cook?

[956] She bet not.

[957] Nope, noop, nope.

[958] And religion.

[959] That's a biggie.

[960] Unequally yoked.

[961] If you're in agreement on religion, money, in -laws, and kids, you have a very high probability of making it.

[962] Okay.

[963] There you go.

[964] This is the Ramsey Show.

[965] Jade Washall, Ramsey Personality is my co -host today.

[966] our question of the day comes from Susie in Florida She says I'm at my wits end with my husband's spending We got married young and back then I assumed the poor choices were due to his age I thought over the years that he would learn from his mistakes But he hasn't He recently racked up $125 ,000 in non -housing debt And it's not the first time We've refinanced or sold our houses Two other times to clear his debt I'm embarrassed to admit that I found myself scour the couch cracks for enough quarters to buy a gallon of milk.

[967] He recently maxed out his credit cards and then took out an annuity to pay them off.

[968] He has sold my paid -off car so that he could pay off debts.

[969] He comes home with something new whenever he pleases.

[970] About a year ago, I opened my own savings account.

[971] I'm afraid that our marriage will crumble and I'll need to move out.

[972] I even went back to school to finish my degree so that I could support myself if we separate.

[973] I have always stayed debt free and saved what I could.

[974] I feel disrespected and fear that our family is at risk at all times.

[975] At this point, I'm so full of resentment and distrust that I'm constantly angry and anxious.

[976] What should I do?

[977] Well, yeah, you've got a problem.

[978] It's beyond a money problem.

[979] It's looking like a money problem, but it's beyond that.

[980] He's got a lot of problems.

[981] And the fact that you've already separated yourself to the extent that you have, you've, you know, you're looking at a life without him and you're getting your education to do that you're setting aside money to do that so in your mind there is a line that he's crossed a long time ago and it sounds like you're in this position where it's like once i get my footing i'm out the door and i don't know what you guys have talked about in way of counseling you know i i kind of have this acronym when you're in these situations i always say it's it's a safe acronym about keeping your money safe and it's the s is you need to seek counsel if you are experiencing things like a addiction abuse uh f financial infidelity right those are the times that you seek counsel and then from there the e is you need to evaluate your options what is it is it me having to separate funds for him in order to keep myself and family safe for a while until you know the right counseling is taken place and we've seen evidence of change is that i've got to get myself in a safe environment if there's some sort of abuse.

[982] So it sounds like you've already started implementing that, but I don't know about the counseling.

[983] That's the one thing I haven't seen here, and that's going to be paramount for you guys, if there's ever even a chance of this working out, because he's a child.

[984] And I'm wondering, if you're racking up this kind of debt, Dave, correct me if I'm wrong, it's something going on.

[985] $125 ,000 in non -housing debt, and this is happening more than once.

[986] I got to wonder if there's anything going else with another lifestyle if there's some sort of addiction i just don't see how you can do that and you're looking for money for a gallon of milk yeah um so susy your marriage is over yeah now the only question is can it be healed and put back together um the only shot at that is to get some professional help because you're you know i don't i can tell from reading this that you're done, but you don't even realize you're done.

[987] Ah, she's done.

[988] Stick a fork in it.

[989] You're done.

[990] And really with what you've described, no one listening is blaming you.

[991] You know, we're sick of this guy, everybody that read this with us.

[992] So, um, you're done.

[993] Now, can it be salvaged?

[994] Yeah, it can be.

[995] Probability's fairly low because two major things have to happen.

[996] He's going to have to change in your, going to have to change and you guys got to have some help doing that so get in touch with a marriage counselor he likely is not willing to go to marriage counseling but you need to go sit down with one and then they can give you words and phrases and give you clear thought on um exactly how this is going to go down but normally the way this would go down would be you would sit down with him after meeting with a counselor and say, I'm not willing to live like this anymore, period.

[997] If you will not go to marriage counseling and you will not go to Financial Peace University with me and you will not live on an agreed budget and you will not quit spending more than we make and crashing our lives continually, I'm done.

[998] That's probably what the counselor is going to instruct you to say.

[999] It's called an ultimatum.

[1000] And then let's see if that gives Bubba the wake -up call.

[1001] Because this is one seriously immature dude.

[1002] He is the axis of the world runs straight straight through the center of his head.

[1003] He thinks the whole thing revolves around him.

[1004] And he's a baby child.

[1005] And so if baby child can wake up and go, I'll do anything, I'll do anything.

[1006] I don't want to lose you.

[1007] Yeah, well, we'll see because you're about to do a lot of stuff.

[1008] that you've never done in all these years.

[1009] And that's called grow up, be a man, learn to delay pleasure, learn to live on less than you make, learn to agree on spending with your spouse, have a written detailed plan, save money, don't just spend money, invest money, don't just spend money, be generous to other people other than yourself.

[1010] You selfish little immature, jolly.

[1011] and so he's got a lot of changing to do and you've got uh you've put up with this for so long you've become accustomed to crazy and you kind of think crazy's normal so you've got some changing to do because crazy ain't normal this what you're describing is not normal and i'm a little bit aghast that it took you this long to wake up and there's something broken in you that caused you to wait this long to wake up yeah so sit down with a coach counselor and um because i'm guessing baby child's not going to go and then you can you can go back home and explain to him with the um tv off and the kids in the bed that this is what's going to happen i i'm going to pack up and i'm going to leave if you don't agree to these terms because i'm no longer willing to live like this and something along those lines is going to be the process and marriage counseling financial coaching and counseling like financial peace university a written in detail budget and for this point forward agreement on every dollar that goes out the door yeah and i'm no longer going to scrounge in the couch after all these years and how much money we make for a gallon of milk that's assinine and i'm not going to live like this and see the problem is you you never even said that except in your head and so now you've got to have some coaching on how to sit this down because you're you are going to put your marriage on the line when you make the statement because if he does not change then you will be required to walk back out and be done you've got to make a decision because if you decide to stay in crazy then you're just part of crazy that's right that's right you're just crazy as crazy is then and everybody gets crazy so yeah this is this is out of control wow it's tough refinanced and sold two houses to clear this debt yeah i mean it's it's a constant flow of self -centered and immaturity.

[1012] Yeah.

[1013] At a minimum, at a minimum.

[1014] Now, again, if you decide I'm going to be strong, speak my mind, and require reasonableness to live here.

[1015] Yeah.

[1016] And he decides I'm going to go along with reasonableness and a plan and we're going to heal this and turn this around.

[1017] I've seen things worse than this.

[1018] Yeah, all things are possible.

[1019] 100%.

[1020] But the choices that have to be made are very difficult on both sides.

[1021] Number one, he's changing who he is when it comes to money.

[1022] And then too he's just changing who he is yeah and the money you'll be that's true and then three or two for her she's got a like there's a side of her that the forgiveness on this is tough and the ability to go okay we're starting a new thing i've got to hold up my end of the bargain i can't keep holding old stuff over the head but at the same time i have to let that like that is a very hard line to walk only counseling can help that you know but susy jade opened up and she's exactly right with the thing that your marriage is over.

[1023] You've already separated yourself emotionally, career, savings account.

[1024] You've already ended this in your head.

[1025] You've just not actually had the courage to say it out loud, and to yourself even.

[1026] You've just taken these little steps to kind of like prepare as if there's a storm coming that might not hit.

[1027] Well, the storm is already hit.

[1028] The damage is done.

[1029] You've got to do it.

[1030] You're going to have to deal with this head on or it's your only chance of saving it.

[1031] Wow, I'm so sorry, honey.

[1032] What a mess.

[1033] This is The Ramsey Show.

[1034] Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

[1035] Jade Washaw, Ramsey Personality, is my co -host, number one, bestselling author today.

[1036] You can call us at AAA -8 -25 -5 -2 -2 -25.

[1037] starts off this hour in Pittsburgh.

[1038] Hi, Christina.

[1039] How are you?

[1040] I'm good, Dave.

[1041] How are you doing?

[1042] Better than I deserve.

[1043] What's up?

[1044] Okay, so basically, recently my dad has called me out for overpaying a, what they call it, a penny delegate for, or he calls them insurance scams, but I am paying a company called Shermed to basically be the middleman for covering health insurance dental and vision.

[1045] and I was wondering, slow down, slow down, slow down, I can't understand you.

[1046] You're paying a middleman for health insurance?

[1047] Yes, but they also say that they give you like a $500 ,000 or $5 ,000 benefit for them to take care of it for you.

[1048] So I have an agent through penny, our health insurance marketplace, that I'm supposed to be paying them $150 a month, but I'm still getting a bill from Fymark, and I'm just confused those to why.

[1049] I am too.

[1050] You know what I mean?

[1051] I'm too.

[1052] So health insurance is pretty simple.

[1053] When you buy health insurance through an insurance agent, the health insurance company pays the agent to commission.

[1054] You should not have an additional commission on top of that.

[1055] Your dad is right.

[1056] So how do you feel about insurance brokers?

[1057] Are they necessary?

[1058] An insurance broker represents several different.

[1059] companies and when they sell you insurance for one of those companies that company pays them you do not pay an insurance broker oh oh my gosh i love insurance brokers because they for instance we endorses jeff zander at zander insurance for life insurance they're a broker they're an independent agent they don't sell for just one company they sell about 40 or 50 different companies for life insurance or whatever the number is okay and when you send them a note and you say hey i want to buy life insurance here's my age my medical condition they shop among all the different companies for your situation and get you the best price for the amount of insurance in your situation and then you buy it through them and that company pays them a commission you simply buy the life insurance and that's the way health insurance works too Okay.

[1060] So I think your dad's right, kiddo.

[1061] Yeah, I think he's right, too, Danny.

[1062] So how old are you?

[1063] I'm 24, sir.

[1064] Okay, and you do not have health insurance through your workplace.

[1065] No, sir.

[1066] So you're just trying to buy it in the open market?

[1067] Yeah, but since I have a two -year -old, so it got kind of complicated to think about, like, or not complicated but you know what I mean I just kind of want to see like what the best care for her is because I really don't go to the doctor unless I'm like dying so I thought that would be like a good thing because they called me and I was like oh that sounds like a good deal and I guess I should have called my dad first before that's okay you're fine yeah I think you can cancel it and you're going to be just fine what we've got a company that we endorse for health insurance that will shop among the health insurance companies a real broker okay and they're not it's it's called what again health trust financial health trust financial good they just renamed it that's why i couldn't think who it was it's a guy we've worked with for 15 years but uh health trust financial and the guys at health trust financial will uh shop among different companies and get you the best price in your situation you will not be charged a dime by them when you buy health insurance through them if you do the health insurance company pays them a commission okay okay and they can help they can help you get they can help you get some cheap coverage in your situation shouldn't be that bad at 24 years old even with a baby okay yeah yeah can you um just repeat that the name of them one more time please sure i'm going to put you on hold and they're going to give you the phone numbers and everything but it's health trust financial is what it's called and i don't i don't have it memorized because they changed everything just about a month ago and i'm i'm dumb so i can also drop a link in the show notes okay and uh producers saying for the rest of you he's going to drop a link in the show notes to help me out and cover me since i don't have it figured out used to have all these things memorized but we've got a lot of people we got a lot there's a lot going on so what we used to have folks i'll go ahead and explain it to everybody else out there we used to have endorsed local providers we had health insurance agents everywhere all across america and um basically the health insurance business has um almost collapsed uh there's very few operators left after oboe Obamacare.

[1068] It put most of them out of business.

[1069] And so this guy has been doing, has been what was one of our largest ELPs back in the day.

[1070] And he formed Health Trust Financial and he's got a group of agents around that serve people.

[1071] And he's been able to navigate and stay alive and make a living and help people after Obamacare where most of them weren't able to.

[1072] And that's, that's why this all changed.

[1073] Because we used to just say, go to Ramsey Solutions .com, click on health insurance ELP and you'll find one in your area that is an insurance broker and they'll shop it for you and get you the best deal.

[1074] That's what we did for 15 years around here.

[1075] And then the, it's taken about a decade for the Obamacare to completely basically destroy the health insurance world.

[1076] It took out 90 % of it or so.

[1077] So it's a mess out there.

[1078] But anyway, this guy, they do a great job.

[1079] They're good people.

[1080] And in this environment, they're going to get you the best possible deal.

[1081] So I'm proud to endorse them in this situation.

[1082] So very cool stuff.

[1083] Natasha's in Tampa.

[1084] Hi, Natasha.

[1085] Welcome to the Ramsey Show.

[1086] Hi, thank you.

[1087] I'm excited to be here.

[1088] How can we help?

[1089] So basically my question is, when should my daughter get a bank account?

[1090] I open a bank account for a child as soon as they're born and I throw gift money and other stuff in there just to let it start building up because somebody's got to pay for their first car and it's not going to be me. yes and then as far as the bank account goes that they actually operate their lives out of 14 15 or 16 depending on their personal maturity um rachel cruz and her brothers and sisters all had one at 14 and 15 had their own debit card uh the only thing was they did not have free rain uh old dad was checking it all the time to see what you were spending where you were spending and that you were managing the account correctly because this is not a right This is a teaching aid.

[1091] I agree with that.

[1092] I had mine at 16 when I got my first job.

[1093] I had one at 12 and kept a full checkbook because I was running a little lawn care business.

[1094] And my parents taught me how to do that.

[1095] And so what a blessing.

[1096] And then we actually, and back when the dinosaurs were on the earth, there was a class in high school called General Business.

[1097] Okay.

[1098] And they would teach you how to actually reconcile and do a hand -kept checkbook back when people did that.

[1099] This is long before the digital age, boys and girls.

[1100] But yeah, but anyway, yes, yes, yes, yes, yes, and yes.

[1101] But it's not an entitlement and it's not a right.

[1102] It's a teaching tool.

[1103] Like when a teenager has a job, it's not their money.

[1104] Well, they earned it.

[1105] Nah.

[1106] I allowed you to work and earn some money as a teaching situation.

[1107] Yeah, they don't get to go do whatever they want.

[1108] You don't get to go do whatever you want.

[1109] You get to do whatever you want when you pay all your bills.

[1110] Okay.

[1111] And don't live here anymore.

[1112] That's the only time you get to do whatever you want.

[1113] This is the Ramsey show.

[1114] Are you married?

[1115] The number one cause of divorce in North America today's money fights and money problems.

[1116] Number one disagreement.

[1117] If you get money disagreements out of your marriage, for most of you, it completely changes everything.

[1118] Because when you agree on your spending, you're agreeing on your dreams, you're agreeing on your values.

[1119] You're agreeing on what comes first, what comes second, which is your values, represents your values.

[1120] You're agreeing on your fears.

[1121] I'm scared of this.

[1122] I've got to spend some money to cover this.

[1123] When you agree on all of those things, you're agreeing on your life.

[1124] You're adding a level of unity, a level of oneness to your communication and to your marriage that nothing else will do.

[1125] And it's a stupid budget.

[1126] It's a spending plan.

[1127] where you agree on it together.

[1128] The easiest way to do that is the world's best budgeting app.

[1129] It's called Every Dollar.

[1130] It makes it simple to plan your spending and simple to work with your spouse and simple for both of us to hold each other accountable that we've actually stuck to the freaking thing.

[1131] Did we really do it or not?

[1132] Download every dollar for free in the app store or Google Play today.

[1133] Doing a budget is by far the number one indicator of someone who's going to become wealthy.

[1134] by far it's not your income and it's a big time communication tool in marriage you know here's an interesting stat this is an old one but I would imagine it's still fairly accurate because you don't hear this one very often I read this a couple years back in Red Book magazine that's how old this stat is okay ready 97 % that's all of them of ladies wish there was more communication in their marriage bingo if you want to have communication from a guy ladies let me tell you one thing that guys speak most guys speak budget we speak numbers we speak decisions in the household around the numbers and this is a instead of i just wish we talked more how about let's sit down to a budget by god there'll be some talking interesting there'll be some communique you might not like all of but there'll be some communication.

[1135] I'm just saying it's a coming.

[1136] And that's a big deal.

[1137] Every dollar.

[1138] You can download the app for free in the app store or Google Play today.

[1139] Judah's in Atlanta.

[1140] Hi, Judah.

[1141] Welcome to the Ramsey Show.

[1142] Hey, thanks for having me. Sure.

[1143] What's up?

[1144] We've got over $150 ,000 in debt, and we are on the every dollar app now.

[1145] We're budgeting for the first time in our life.

[1146] But my question to you, that's credit card debt we we are have a plan to pay it down but I wanted to know if that's the best plan from your recommendation just to be on every dollar budget and baby steps well yeah but my question is how did this happen because I think you do have to figure out what happened so that you don't do those mistakes again years ago we changed careers we were both making upwards of 400 ,000 a year so we had credit lines up the wazoo we had credit cards and we used we were spending, but we were paying it all off.

[1147] And when we switched careers, we went down to under $100 ,000 a year and still spending like we had, you know, that kind of lifestyle.

[1148] Yeah.

[1149] So, okay.

[1150] Have you adjusted your lifestyle to under your income now?

[1151] Yeah, we're back up, we'll make upwards of that for $500 ,000 now that we switch back to the same type of field.

[1152] What do you do?

[1153] We're both in construction.

[1154] Okay.

[1155] So can you pay this off in a year?

[1156] Sales.

[1157] No. Why not?

[1158] It's sales, so we have to build our pipelines back up.

[1159] What are you going to make in 2024?

[1160] 120.

[1161] What are you going to make in 2025?

[1162] 220, 250.

[1163] Okay.

[1164] All right.

[1165] That's the thing.

[1166] Okay.

[1167] Because if you're making $400, you pay it off in a year, but you're not here.

[1168] Okay.

[1169] All right.

[1170] So the deal is this.

[1171] You can't out -earn your stupidity.

[1172] You also have to have the processes and the systems in place, which is why you're wise to ask the question that you've way to go you're really good at making money you suck at handling it agreed agreed okay so now we're going to be on a budget and the two of us together are going to be in agreement what we were just talking about before we picked up with you and um and our agreement is we're not doing anything until his debt's cleaned up we're going to cut up every single credit card if you haven't had plastic surgery now's the time yeah a lot of them are metal that's all right destroy them yeah get a saws off heavy metal you're in construction you can figure it out they just they get they die today okay you don't keep a single credit card agreed agreed they these are snakes they bite they bit and you don't play with snakes okay no we're both we're both in our 30s my reason for asking because the idea of of you know accumulating all that together bankruptcy is even crossed our mind you're not bankrupt you're not bankrupt you're just out of control Here's the thing.

[1173] What we look at is a shovel -to -hole ratio.

[1174] You have a $160 ,000 hole with $120, $220 ,000, $320 ,000 shovel.

[1175] Agreed?

[1176] Agreed.

[1177] This is doable.

[1178] Yeah.

[1179] This is doable.

[1180] This ditch can be dug out.

[1181] Okay?

[1182] This is not a problem.

[1183] It's just, it's going to mean that you live on beans and rice, rice, rice, and beans.

[1184] You don't go out to eat, and you work all the time, and you don't go on vacation, and you're going to clean this up.

[1185] And based on the numbers you're giving me, me, it's going to take you about two years, two and a half years.

[1186] The faster your income goes up, the faster you'll be out of debt.

[1187] How much can you control the speed of your income coming up?

[1188] A lot.

[1189] We'll both make over $200 ,000 in the next two years.

[1190] Yeah, well, you said $220 ,000 to $2 .20.

[1191] Oh, okay, that's just you.

[1192] Oh, wait a minute.

[1193] Slow down.

[1194] So you're at, she got, what is the household income going to be in 24?

[1195] 24 probably 250 all right all right so let's put let's live on a 75 ,000 dollars and pay most of this off yeah yes yes okay yeah but that's that's something you've not done in your entire lives so far right correct yeah that's what that's the answer to this here's the here's the numbers we know from coaching people in these messes the more radical you get the deeper you sacrifice the faster you get out and here's the key the faster you get out the higher the probability is you actually do it you don't quit right and so it's a rip the band -aid off thing not peel it off slowly and let every hair come out of the follicle embrace the suck that's what they say yeah it's going to suck and got embrace it and i'll tell you the hard thing for you guys which you're going to do it but we get basically two types of calls.

[1196] The folks who it's like, listen, your income's low, you got to get your income up, you got to bring everything up, right?

[1197] And then there's people that fall in your camp where it's like, you've had this high lifestyle.

[1198] You're making $400 ,000 a piece a year, 400 ,000 a year, and you're having to bring it down.

[1199] In many ways, I feel like that's tougher because you're used to a lifestyle.

[1200] And for you guys, it's, oh my gosh, I have to live on 75 when I was used to living on 400.

[1201] So that's the part behaviorally.

[1202] That's going to be difficult for you, but you can do it.

[1203] have to know that that's what you're up against and that's what you're facing.

[1204] The deeper you cut, the faster you're out, the more likely you make it.

[1205] Got it.

[1206] And make more money and make more money.

[1207] So all you're going to do is work.

[1208] But you'll be done forever if you never go back to the old patterns.

[1209] Right.

[1210] If you permanently change the patterns.

[1211] And this is basically a neuropsychology thing.

[1212] And so you're resetting the neuro pathways in your brain when you do all this.

[1213] That's what a new habit is.

[1214] And you're setting a whole new set of habits.

[1215] And again, the extreme, the level of extreme deepens the rut in the brain.

[1216] Yes, that's right.

[1217] And so it's like, because I went through bankruptcy, lost everything, mine is real extreme.

[1218] I have a real, this, this like freaking Grand Canyon, right, to where there's no chance I'm ever going to deviate from it.

[1219] And so you can add to your chances of ever coming back here again by trying, you know, you're more likely to come back into the mess again if you gradually get out.

[1220] Because it's not a deep pathway.

[1221] It's not a neuro pathway that's deep.

[1222] It's not a deep rut.

[1223] And so you want to get, this is a rut you do want to get stuck in.

[1224] Neuropasticity, the things we talk about on the Ramsey show.

[1225] Who knew?

[1226] But yeah, there you go.

[1227] That comes from having a John Deloney in the building.

[1228] Anyway, that's the thing.

[1229] So you can do this, man, but it's all about intensity.

[1230] List the debt's smallest to largest, pay minimum payments on everything but the little one.

[1231] Attack the little one with every available dollar until it's gone.

[1232] then attack the next one with every available dollar until it's gone, then attack the next one with every available dollar until it's gone.

[1233] Smallest to largest, regardless of interest rate.

[1234] Make sure they're all cut up before the sun sets today or sawed up, whatever has to happen to those puppies.

[1235] Jade Barshall, Ramsey, Personality, is my co -host today.

[1236] Ted is with us in Raleigh, North Carolina.

[1237] Hi, Ted.

[1238] How are you?

[1239] Hey, Dave, I'm doing okay.

[1240] Thanks for taking my call.

[1241] Sure, what's up?

[1242] So, question for you.

[1243] My left and I, last year, we bought too much house, and to change our situation, we've chosen to sell.

[1244] We'll run it into some roadblocks, and so I wanted some guidance, and I'll jump into the numbers with you.

[1245] Okay.

[1246] What are the roadblocks?

[1247] Yeah, so bought our house last year, 366 ,500, put 5 % down, which is about 20 % percent, 7 % interest rate.

[1248] Um, currently we still owe 342 ,000, um, and our, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, sorry, three hundred and sixty -six.

[1249] Oh, three -six.

[1250] Okay.

[1251] And you, so you put 20 down, so you got a 346 and now you owe three -forty -two.

[1252] Okay.

[1253] Now I'm catching.

[1254] Correct.

[1255] Good.

[1256] Okay.

[1257] Thank you.

[1258] Sorry.

[1259] Yep.

[1260] Uh, I make 71 ,000 a year.

[1261] Um, we had a three - no other debt.

[1262] But this home is more than 50 % of our take -home pay.

[1263] So it was an unlawy's choice.

[1264] In January this year, we decided we needed to make a change.

[1265] The increase of property taxes and home insurance kind of tip this over the edge, as well as the situation at work was not what I was expecting it to be.

[1266] So in April, we decided.

[1267] position opened up closer to family, so we decided to take that, but it's a lateral position, so we are responsible for the move.

[1268] The workplace is not providing us any kind of support in moving.

[1269] Where are you moving?

[1270] To Nevada.

[1271] How in the world are you doing that?

[1272] You don't have that option.

[1273] You're stuck in a house right now.

[1274] You're just going to walk away from the house?

[1275] Well, I wanted to review our options with you.

[1276] We listed the house on May 3rd.

[1277] We only had two offers.

[1278] What were they offers?

[1279] Yeah, it was $3 .50 plus $14 ,000 closing costs.

[1280] So factoring in fees, we would owe about $30 ,000 to sell the home.

[1281] And just this past weekend, we took the house off the market.

[1282] because my wife hits 38 weeks pregnant this week.

[1283] Oh, boy.

[1284] Oh, boy.

[1285] Pull it back.

[1286] You need to pull it back.

[1287] Did you already quit your job?

[1288] Well, I have made the trip.

[1289] Yes, I did make the change to the new team.

[1290] So you're expected in Nevada when?

[1291] Well, my new manager wanted us there in July, but that's obviously not happening.

[1292] Did you not look at what the markets were doing before you took this?

[1293] I mean, the 38 weeks.

[1294] The market was better in April.

[1295] Yeah, not that much better.

[1296] Not that much better.

[1297] It hadn't changed that much.

[1298] Oh, you're in it now, though.

[1299] Oh.

[1300] Eight months pregnant.

[1301] You were due in July, so now they want you there ASAP.

[1302] You're going to owe.

[1303] What money do you?

[1304] You don't have any money anywhere?

[1305] No, we don't have any money anywhere.

[1306] No, we're not any money.

[1307] We have only a small, about one month emergency fund.

[1308] Let me ask you this, so just so I can get on your train of thought, what did you think you might do?

[1309] Like if you knew, okay, we're going to be a little underwater in this house, what did you think you might do in order to cover that and make the move?

[1310] Well, we've listed at 365, so we were hoping we could sell it at that and come out clean without owning anything on the house.

[1311] but you hadn't thought, what if we can't get that?

[1312] Correct.

[1313] Well, and you can't pay the payment barely now, but you're going to move and take on housing costs in another city at the same pay rate.

[1314] So how did you think you were going to pay the payment until the house sold?

[1315] Well, we were hoping to sell the house fast.

[1316] Oh, man. And there's a lot of hoping here.

[1317] All right.

[1318] Dude, you really got this out of order.

[1319] I wish you had just kept your job until you got the house sold.

[1320] Yeah, because, And had a baby before you got the house, before you have to move.

[1321] Were you thinking you were going to go to Nevada to stay with family until this house sold, or were you thinking you'll go to Nevada, the house will magically sell and we'll be able to afford rent there?

[1322] Well, you'll have to sell the house and then move and rent in Nevada.

[1323] Okay.

[1324] And, you know, start from zero.

[1325] What does your wife do?

[1326] Well, I mean, I know she's pregnant right this second, but what is her career?

[1327] So she takes care of her kid at home.

[1328] She's a full -time mom, and you make $71 ,000.

[1329] All right, well, I'm caught up with where you are.

[1330] I'm aghast at how you got here, but let's see if we can help you from this point forward, okay?

[1331] So you're moving to Nevada with a brand new baby and starting your life.

[1332] and your house is going to sit here until it sells or until you borrow $30 ,000 successfully to be able to sell the house at the current deal, right?

[1333] Right.

[1334] And your current house payment is what?

[1335] $2 .09.

[1336] Okay.

[1337] So $3 ,000 a month is burn rate.

[1338] So 10 months, you could have the thing on the market and break even with the $30 ,000 loss you're facing.

[1339] Right.

[1340] Okay.

[1341] So that's probably not an, offer you need to take because you know even if you could borrow the 30 ,000 I suspect you can get more for this house sometime in the next 10 months than you've gotten for it now okay uh now you're probably not going to be able to pay the payment because you're going to set up house in Nevada and you're not going to have the money to pay this payment am I right correct so the house is going to get progressively behind because you made this move without having the house sold.

[1342] Yeah, what are rents in Nevada?

[1343] Have you looked it up?

[1344] What's it going to cost you?

[1345] Yeah, we're about 1 ,800 to 2100 a month.

[1346] Okay, just 2100.

[1347] Let's say you got $30 ,000 more for the house five months from now.

[1348] You're going to net $15 ,000 more than you are today because you're going to lose $3 ,000.

[1349] a month for five months that's 15 grand if you get 30 more than you got now and you broke even well broke even is no longer break even because you're now five months in the hole at that point and that's fairly realistic that you could probably pull that off in the meantime while you're in nevada i want you working 24 -7 every job you can get your hands on that you need to stack up as much cash as you can stack up to keep from getting foreclosed on here if you can how are you paying for the move cross -country well we've downsized um all the non -essentials and um I was planning to drive a U -Haul trailer okay so you're paying cash we're not using we're not going into debt or okay all right so let let's um I would not take the $30 ,000 loss today number one you can't finance it probably you probably don't have the option to take it and then And that's put the house on the market and try to see if we can get more for it sometime in the next few months before you lose it.

[1350] You're going to lose it about a year from now.

[1351] And they're going to come after you for the difference and sue you for the difference.

[1352] If during that time you get another lower offer that you can't cover, then you would propose a short sale to the mortgage company.

[1353] A short sale is where you're behind on payments and the mortgage company thinks they're about to have to foreclose on it.

[1354] And if they have to foreclose on it, they're only going to get X out of the house, and you can get them X today.

[1355] They'll take the X, they'll take the reduction in the balance on the mortgage.

[1356] But they're not going to cut it while you're current.

[1357] They don't do short sales with people that are current.

[1358] So if you're five months behind and you get an offer like this and you don't have the money to cover the difference, you negotiate a short sale, and then Ted, here's the number you remember, here's the phrase you remember, without recourse, a short sale without recourse, which means they don't come after you for the whole you leave in their mortgage that you don't pay because of this whole series of unwise decisions you all have made, starting with an overpriced purchase and then making a move before you had a house sold, both really unwise.

[1359] This is The Ramsey Show.

[1360] our scripture of the day second corinthians four 16 therefore we do not lose heart though outwardly we are wasting away yet inwardly we are being renewed day by day fred smith that would be fedex said losing is a temporary condition quitting is an attitude okay jade i um i don't know why because it seems so obvious bloody obvious to me but i'm still feeling the to go back and say, okay, what, what, let's pretend that we could revisit our last caller before he made some of these decisions.

[1361] Yes.

[1362] All right.

[1363] You buy a house that you can't afford.

[1364] Now, lots of people have done that.

[1365] Yes.

[1366] And your house payment's 50 % of your take -home pay.

[1367] This, by the way, is mathematical suicide.

[1368] The stupid mortgage company will approve you for it, but there's no chance this is sustainable.

[1369] Okay.

[1370] He did that in October for $366 ,000, put down $20 ,000, which, by the way, now we've lost that money.

[1371] Yeah.

[1372] $20 ,000 is gone.

[1373] It's gone.

[1374] Okay.

[1375] Because we bought a house we couldn't afford.

[1376] And we put ourselves in a crack.

[1377] All right.

[1378] Now, make $71 ,000.

[1379] Mom does not work outside the home, has two kids and one on the way any minute.

[1380] We have a toxic work environment.

[1381] Okay.

[1382] That's what he said.

[1383] Uh, it didn't, that didn't exactly what he, he didn't call it that.

[1384] He called it something else, but the current job didn't, wasn't what it was supposed to be.

[1385] It wasn't what it was, yeah.

[1386] Something like that, okay.

[1387] So what should you do in that situation?

[1388] Well, your wife is about to have a baby.

[1389] You are about to have to sell a house and change jobs.

[1390] Okay?

[1391] You've got to put this stuff in the right order.

[1392] or you make a bad situation really bad.

[1393] Yeah.

[1394] Okay?

[1395] So you do not have the luxury of leaving the toxic work environment unless they fire you.

[1396] You want to create stability.

[1397] You have to stay there until the baby comes and the house is sold.

[1398] Absolutely.

[1399] Period.

[1400] Period.

[1401] And if you can't pay the house payment because it's so tight, you have to work an extra job yes suck it up buttercup and take care of your family your wife and your baby and your obligations not my it's not working out at work yeah i'm sorry that's unacceptable i mean unless they are doing something that's going to get you put in jail, not just hurting your little feelings, you need to go to work until the house is sold and the baby comes.

[1402] Now, if you get the house sold and the baby comes and you want to take a break -even job and lose your $20 ,000 down payment, break -even on the house, which was his hope, then move with cash with a U -Haul to Nevada and break even.

[1403] Not sure, that's the smartest move, but at least then it's somewhat acceptable.

[1404] But by putting this in the wrong order, he may have bankrupt himself and may have put himself in foreclosure.

[1405] The thing is that that $20 ,000 loss plus is going to cost him $10 ,000 to move.

[1406] You can't move.

[1407] Even if you do a U -Haul, what it costs to hire the people to load up the truck, you driving down there, the boxes, all of that stuff, it adds.

[1408] Let's pretend your friends from church feel sorry for you and help you load the truck.

[1409] Listen, beyond 30, good luck to you.

[1410] You just, you got to buy that, you got to pay for the U -Haul and the gas.

[1411] All right.

[1412] And that's all.

[1413] You can still cost you some money out of pocket.

[1414] Cost you a lot.

[1415] They probably can pull that off if they had everything else lined up.

[1416] Yeah, they, I don't, you've got to run.

[1417] You don't get to run from discomfort into the other frying pan.

[1418] Well, and they didn't, you have to run scenarios.

[1419] You have to say, well, here's an option.

[1420] Well, what, okay, worst case scenario, if that happens, what do we do?

[1421] okay worst case scenario if that happens what do we do and they didn't run any options it was just like I quit I quit my job and our house will sell and it'll sell for the magic number like in time for me to have a baby and move my baby no let me tell you husbands rule number one don't move your pregnant wife period and you're moving to Nevada where it's hot no do not move your pregnant wife it's like it's like federal law Do not move your pregnant wife.

[1422] Let her have the baby then talk about moving.

[1423] I mean, really, this is what you do.

[1424] It's pretty simple, y 'all.

[1425] So, but there's a thing that goes with this that.

[1426] It was 115 degrees in Nevada last week.

[1427] That was the way it felt outside.

[1428] If you're talking about moving a woman that's eight months pregnant to 115 degree temperature, she's going to make him pay for that.

[1429] Yeah, for the rest of his life.

[1430] And now what we're facing is the house is going to get behind.

[1431] And we're either going to write a check to cover the difference.

[1432] We're going to go into a short sale, which is right there next to a foreclosure as far as destruction of your credit.

[1433] Or you do what's called a deed in lieu where you deed the house back to the bank.

[1434] And they take the house and as settlement in full without recourse.

[1435] And that's instead of foreclose.

[1436] closure, deed instead of foreclosure, similar to a short sale.

[1437] Both of these are due to your credit about what a foreclosure does to your credit, but they don't chase you for the deficit.

[1438] If you don't pull off one of those two things, and those are up to the bank, up to the mortgage companies, whether you can pull that off, very difficult to negotiate, especially in this current real estate environment.

[1439] They don't like losing money on mortgages in an escalating price environment.

[1440] They just don't do it very often.

[1441] And so if you, you can, you know, can't negotiate a short sale or a deed in lieu, a deed instead of a foreclosure, then you're going to get foreclosed on.

[1442] And now this $242 ,000 loan will have been run up with foreclosure fees and 10 months of back payments to about $310 ,000.

[1443] They're going to sell this house for $200 ,000 and they're going to sue him for $110 deficit.

[1444] So how does he walk that line?

[1445] That's how dumb this was.

[1446] How does he walk the line of, okay, so the first offer they got would have put them out of that $30 ,000 deficit?

[1447] If he had said, you know what, I'm going to wait this out for five months, I'll pay the payment, I'll see if I can.

[1448] And then if I'm getting offers, maybe I can then cut that in half and I'm loaning out, I'm getting a loan for the other 15, something like that.

[1449] At what point, because he's got to decide at some point, I'm either going to do that.

[1450] And if that keeps going on, and then I get to the point where I can't make the payments, does that make sense?

[1451] I don't think he can make the payments day one because he's got the same money coming in and he's got to pay rent in Vegas.

[1452] Right.

[1453] And so there's this area of if he doesn't make the payments but they don't do the short sale, but then that makes him ineligible to get the loan.

[1454] No, yeah, he's not going to get the loan.

[1455] Once he's behind on the mortgage, it's a short sale.

[1456] So he's got to make that.

[1457] Once you're behind, it's a short sale or a deed in lieu or a foreclosure.

[1458] Yeah.

[1459] So he's got to make that decision immediately.

[1460] Otherwise he's.

[1461] I'm either going to, if he can, if he could borrow $30 ,000, which I don't think he can.

[1462] I don't think this guy's bankable for 30 grand But if he could borrow $30 ,000 today He could put the thing to bed for $30K But I still don't think that's what I wouldn't do that I still would play it I'd play it on out and see if I can limit the hit But you are at the bank's disposal Like you're at their At their will Short sales in 2008, 2009, 2010 We did a lot of short sales And we did a lot of deeds instead of deeds In lieu of foreclosure And the key is Without recourse meaning they don't come after you for the difference, the deficit balance, which they will in the event of a foreclosure.

[1463] So the only advantage to doing a short sale or a deed in lieu is to avoid the deficit chase on the foreclosure.

[1464] It's not to really save your credit.

[1465] It saves it a little, but not that much.

[1466] You're still trashed.

[1467] You're still in a hole.

[1468] So, folks, the point of the rant here and our, I don't know what the right word is, our distress for that family is when you're in a situation that's tough like that you've got to be tough you got to throw your shoulders back and go to work even if it's not pleasant to take care of the pregnant wife and to take care of the mortgage that you can't afford until you get the house sold I don't care if it's pleasant I don't care if it's toxic I don't care if your boss is a jerk I just don't care you signed up for a crappy trip and you get the ride the roller coaster of a crappy trip.

[1469] It's not forever.

[1470] It's for a few months so you don't bankrupt your family.

[1471] Because this one episode, this four months long right here, may take them a decade to recover from.

[1472] It just hurts me. It just hurts my soul.

[1473] Ouch.

[1474] Ouch.

[1475] Ouch.

[1476] That puts this hour of the Ramsey Show and the books.

[1477] We'll be back with you before you know it.

[1478] 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.

[1479] If you're a leader, your personal growth matters for your organization, because whatever you lead can only grow as much as you do.

[1480] I know from experience.

[1481] I've been CEO of Ramsey Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership podcast.

[1482] I'm taking your calls and helping you figure out how to overcome challenges within your organization.

[1483] One episode could change your business.

[1484] Check it out on Apple, Spotify, YouTube, or on the Ramsey Network app.

[1485] Thank you.