What Is Your Relationship With Money?

[0] It's the Ramsey Show, where debt is dumb, cash is king, and the paid -off home mortgage has taken the place of the BMW as the status symbol of choice.

[1] We help people actually build wealth, actually do work that they love, and actually create amazing relationships.

[2] Rachel Cruz, number one bestselling author, and Ramsey personality and my daughter is with me today as a co -host.

[3] We'll be taking your questions about your life and your money.

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[8] Looks like Mario's going to start us off this hour, and he is in Atlanta.

[9] Hey, Mario, how are you?

[10] I'm doing better than I deserve, as you would say, Dave.

[11] I'm doing great.

[12] Glad to be on the show.

[13] We're honored to have you, sir.

[14] How can we help?

[15] So the big point is.

[16] I'm fairly new.

[17] I'm not new to you, but fairly new to the show, and I'm really on fire and on board about just becoming financially free, debt -free.

[18] The teachings that you and your team teach are phenomenal.

[19] And my big question is, I want to know the best way to get my wife on board with implementing some of the drastic changes that we would need to make in order to get to that point.

[20] I make a pretty good.

[21] I have a strong income.

[22] I know all of our debt areas.

[23] I know the areas that, you know, where I feel like we're, you know, spending too much or overindulging, but I know that I'm going to get some resistance with the changes that we're going to need to make in order to get to get to where I know that we can get to.

[24] You mean an example of one of the changes that you think you need to make that you think you're going to get resistance on?

[25] Um, some areas of convenience, like going out to eat a lot, um, or, or ordering food.

[26] How much debt have you got?

[27] A lot of, um, including house.

[28] No, not including.

[29] So, okay, uh, credit card debt.

[30] I met about $15 ,000 credit card debt, uh, student loans total, um, around 75 ,000.

[31] Um, and I have one car that's not, I have one car that's not, I have one car that's not, not completely paid off.

[32] And I think we owe $12 ,000 on that car.

[33] And what's your household income?

[34] 175.

[35] Okay.

[36] Yeah, that's a great income.

[37] So, Mario, what's your, what's causing you to believe that she's going to have a hard time with all of this?

[38] Is it comments she's made?

[39] Is it something that in your head you just know her and you're, you know, you know what's going to be coming?

[40] Has she given you clues on it?

[41] Like, I want to know.

[42] Oh, oh, yeah.

[43] I have proof.

[44] Yeah.

[45] Absolutely.

[46] A comment she's made.

[47] There's other things that I've implemented.

[48] So then for her in these conversations, what are her hesitations?

[49] A lot of it has to do with our kids.

[50] Okay.

[51] So like for instance, I'll say, okay, hey, we've completely paid off this particular credit card.

[52] We're not going to use it.

[53] We're going to put it up.

[54] Interest rate is high on this thing.

[55] It doesn't make sense and paying somebody to borrow from our future self.

[56] you know, I do all of that, and she's like, great, sounds good.

[57] But then time will go on and how she charges on a credit card.

[58] And then when I say, hey, what happened here?

[59] Why did this take place?

[60] And it was like, oh, well, I had to do this.

[61] I had to make this decision and do this.

[62] And so it's just kind of like, you know, these things, you know, come up.

[63] Like I said, a lot of times it's with the girls.

[64] Yes.

[65] You know, my kids.

[66] Sure.

[67] And it's life, right?

[68] Because you guys have not put systems in place.

[69] for life to look different.

[70] So you're still keeping the credit card.

[71] We're going to put this credit card over here.

[72] We shouldn't touch it, but it's still there.

[73] Get rid of it.

[74] Get rid of it.

[75] You guys, do you guys have a written budget that you have together sharing an account saying, hey, here's the line item for the kids.

[76] This is what we're going to spend on the kids.

[77] Here's the line item for you, me, food, out to eat, clothes.

[78] Here's where every single dollar this month is going.

[79] I've done all of that.

[80] No, have you guys together.

[81] No, Mario, have you guys together?

[82] done that we have we done that or have you done that so I have done it and I've shared it and it's communicated this looks good I'm on board let's do it let's run this plan and we'll start running the plan and okay totally so Mario I also think I'm sure Ramsey has become a cussword in your house because a little bit of me I'm fearful that you're using this again I don't believe your wife is malicious.

[83] I think she's a great mom, probably a great wife.

[84] And so these things, life is just happening to her.

[85] And she's reacting, obviously, not in the way that you prefer or that even what we would teach, right?

[86] She's going charge in the credit card, all that.

[87] But it's not malicious.

[88] And so I think that there needs to be a higher level conversation to say, okay, you and I together as a couple, where do we want to be?

[89] What do we want life to look like in five years?

[90] What do we want, what is our why?

[91] Like, does she have any level of pain or stress around money?

[92] Is she worried in any way?

[93] Like, I want you guys to, to, yeah, I, me, for the most part, I am.

[94] You're, yeah, the weights on you.

[95] I don't want to have to work until I retire.

[96] A hundred percent, totally.

[97] And right now, I'm the, I'm the, listen, she's a homemaker.

[98] You're treating her like she's her teenage daughter.

[99] She's not a partner in it.

[100] She's not a partner in any of this.

[101] You're just bringing the budget and laying it down.

[102] down, giving some instructions about a credit card, and then you're shocked that she didn't do what you told her to do.

[103] She's not a partner.

[104] Rachel's right.

[105] You need to get above this, and the two of you need to sit down with the kids away or the kids in bed and say, we have $102 ,000 in debt.

[106] We make $175 ,000.

[107] That makes us stupid people.

[108] We need to change some stuff here.

[109] We're broke, and we make $175 ,000 a year.

[110] We have got to, as a couple, aim at something bigger.

[111] than kids close.

[112] Lord Jesus.

[113] Really.

[114] Yeah.

[115] Okay.

[116] And so we've got to have a big plan that we're going at.

[117] Now, honey.

[118] And he feel it.

[119] And he feels that.

[120] I know, I know.

[121] But this is him and his wife talking, okay?

[122] We have to get on the same page.

[123] I do not want to be your daddy.

[124] I don't want to be your daddy.

[125] I want to be your husband.

[126] I need like a grown woman beside me helping me make decisions about our future.

[127] And she needs an input in all of that, too.

[128] And then she gets input.

[129] That she gets to say.

[130] And then by God, when she gives input, it's a contract.

[131] Yes.

[132] Yes.

[133] But she has no reason.

[134] She has no contract with you now because you dictated it to her and walked away and then we're shocked that she went and bought kids clothes on a credit card because she had no buy -in.

[135] She had no buy -in.

[136] None whatsoever.

[137] She didn't have a voice in this and she has no belief in the overall vision.

[138] She was just going along with you.

[139] Yes.

[140] And I would say this too, just as an encouragement, Mario, that the conversation that I feel like Winston and I, the best conversations we have around money is not really even about money.

[141] It's more like, hey, let's just dream.

[142] And in five years, what do we want our life to look?

[143] How old are the girls going to be?

[144] What kind of car do we want to drive?

[145] What vacations do we take?

[146] What do we want to be giving to?

[147] Like, allow your numbers then to motivate you to your goals together as a couple, where you guys both want to go.

[148] And then the day -to -day plays into that.

[149] But kind of, there's a...

[150] I mean, I'm looking at it and I'm going, I'm like $175 ,000 a year.

[151] I'm really not okay.

[152] okay with us being broke.

[153] I think that's crazy.

[154] It's just crazy.

[155] But also there's a level, yes, I know, but there's also a level marriage -wise to get above it to have a conversation.

[156] I think it's all of that.

[157] I think it's every bit of that.

[158] But I think you've got to say, look, we're sloppy.

[159] We're disorganized.

[160] We're fat.

[161] And what can we do to help you for the life?

[162] What can we do together to fix this?

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[179] Rachel Cruz, Ramsey Personality is my co -host today.

[180] Parents, if you've got school -age kids, the last thing you want is for them to be normal adults broke.

[181] You want them to be weird, not broke, like you.

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[194] Evans with us in Winston -Salem.

[195] Hi, Evan.

[196] Welcome to the Ramsey Show.

[197] Hi, Dave.

[198] How are you?

[199] Better than I deserve.

[200] What's up?

[201] Well, me and my wife, we're on baby steps three B, trying to save for a house, and we've got a chance to buy a house from a family member.

[202] and she's my wife's cousin and not really like a close family members but they're offering it to us at um 3 .5 % interest on a 15 year fixed rate owner financing and i've called around to the bank the best that i can do is probably around four or a little over four and so we've made my wife we're longtime listeners and we just wasn't sure about owner finance center if that was a safe thing to do Owner financing is as safe as anything else if you have a good attorney draft the equip draft the documents it's not a land contract it's an actual mortgage and the deed of the house goes into your name yes okay that's no land contracts at all we don't do those okay now the downside of the whole scenario you're giving the other the other upside is you're going to have a lot less costs involved closing costs other things that you're going to not have with owner financing so that part's all wonderful how often do you have or with his cousin?

[203] This is the first time that we've spoken to them and probably at their wedding about 10 years ago, maybe.

[204] Okay.

[205] So you never see them.

[206] You're not mad at them, but it's not a relationship you have.

[207] No, it's just not one that we have.

[208] Okay.

[209] Because here's the thing.

[210] It's going to affect whatever relationship you have.

[211] The borrower is slave to the lender.

[212] When you borrow money from someone, you change your relationship.

[213] from cousin to master yeah okay and so if you're if your father -in -law loans you this money I would tell you no because Thanksgiving dinner tastes different when you eat with your master it will change the tone the relationship of your between you and your wife your her dad all that kind of stuff never do that one but this one is really there's not much of a relationship here this is almost like a stranger yes And so I'm probably doing it.

[214] Okay.

[215] I agree.

[216] It's another one, Evan, in like just the, in most of the calls, though, when it comes to borrowing money from family, it's just an absolute no. But there's these exceptions like this.

[217] This is so distant.

[218] Yeah, where it's so distant and it's like there's not really, you're not going to be with them.

[219] You're not seeing them every day.

[220] You guys aren't chatting and talking.

[221] And there's not really much of a relationship to hinder because there's not much of a relationship.

[222] So in that makes...

[223] Nobody's mad.

[224] We're not saying that.

[225] No, no, no. But it's just a, you know, the thing is, if it absolutely completely went bad and went sideways and everybody was mad, it really wouldn't change your life.

[226] Right.

[227] Yeah.

[228] And we're not calling that.

[229] We're not saying that's going to happen.

[230] But the point being that, you know, if you borrow from your father -in -law, that you lose that relationship.

[231] Or a sibling or an in -law.

[232] I mean, somebody that you're spending time with.

[233] Yeah.

[234] But, like Rachel's got cousins that she actually has really tight relationships.

[235] relationships with, right?

[236] That you would not do this.

[237] You would not do this deal with them.

[238] I would change it.

[239] Yeah.

[240] Not a chance.

[241] I'm not changing.

[242] Because I'm telling you, man, the old joke is if you loan your brother -in -law $100 and he never speaks to you again, was it worth it, right?

[243] I mean, you know, so because it does change the relationship when you loan or borrow money.

[244] It just does.

[245] So, but the point being here is there's not much of relationship to change.

[246] So that's, I'm doing it because it's a cheaper interest rate, saves money.

[247] Make sure you have an attorney, close the deal like you would, any other.

[248] professional transaction, get title insurance, get an inspection on the house, get an appraisal on the house, all of those kinds of things you would do if you're doing a normal transaction to where no one's getting screwed here, no one's, it's all very business -like and button up.

[249] All the documents are done.

[250] They're properly filed at the courthouse.

[251] A title company does the closing.

[252] You do everything right here.

[253] If you do all that right, you're going to have lowered cost and lowered interest rate, and it's a good deal.

[254] Go get it.

[255] There you go.

[256] Matthew's with us in Tulsa, Oklahoma.

[257] Hi, Matthew.

[258] How are you?

[259] Great.

[260] How are you guys doing?

[261] Better than we deserve.

[262] What's up?

[263] I've just got kind of a career question, but I was going to give you a rundown of myself and my wife's financials first.

[264] I make, we're both self -employed, no debt other than our home.

[265] I make about 120.

[266] She makes about 60.

[267] We owe 160 on our home.

[268] It's worth about three, 30 -5.

[269] And I actually sell real estate, really looking forward to the reality check.

[270] And I'm just curious, should I take the chance, because I have an opportunity to start my own brokerage, but should I take that chance with a baby on the way with all the risks that we know come with starting your own company?

[271] So you're a real estate broker now making $120 ,000 a year?

[272] I'm an agent, yes.

[273] I'm not a broker yet.

[274] I'm getting my license shortly, yes.

[275] Okay.

[276] How long have you been selling real estate?

[277] A little over a year.

[278] Okay.

[279] I'm 22, my wife's 22 also.

[280] Okay.

[281] I was doing the same thing you're doing when I was your age, and I got my real estate license when I was 18.

[282] Okay, so I know what you're facing.

[283] One of the things you're facing is it's tough to have credibility with people to sell them houses when you're only 22, right?

[284] Mm -hmm.

[285] Yeah.

[286] You've got an uphill battle there.

[287] And having your own brokerage would probably help with that a little.

[288] Or it might scare them even more.

[289] Well, see, I feel like I don't have as much of a problem with customers as I would with people working under me who have been doing it 20 years and think.

[290] For how young you are, right.

[291] From like a leadership perspective, someone respected.

[292] Yeah.

[293] And just with a kid doing October, it's like, do we take this chance when we're sitting pretty good right now?

[294] Yeah.

[295] And we've got a real estate market that is twisting and turning in the wind.

[296] It's very unpredictable right now.

[297] I think the market's going to slow down.

[298] I don't think house prices are going to go down.

[299] We've already said that out loud, but I think it's going to slow down.

[300] So my only concern would be, Matthew, you got into the real estate business in the best time ever.

[301] So, like, what you made then, not saying you can't make that again by any means, but it was probably easier to make what you made then, then it's going to be easier to make that same amount in the next coming years because of the slowing and softening of the market.

[302] So what's your wife say?

[303] she says do it because it's a it's a pretty good option i mean it's a pretty good opportunity with a business partner who has a very good end i'm sorry a business partner that's new that's new information yeah i would be opening it with a with a partner no don't do that oh really no you're already married yeah no listen the only ship on sales a partnership The number of business, small business partnerships that survive one decade is very close to zero.

[304] Almost none of them do.

[305] We work with entree leadership businesses, tens of thousands of them have for decades all across America, and one of the biggest problems they have is a stinking partnership.

[306] It's gone sideways.

[307] Now, the exception is medical partnerships and law partnerships, but they're structured differently anyway.

[308] It's a whole different set out.

[309] But two guys opening a real estate company, two guys opening up a heating air company, me two women open up a nail salon this is just a it's just a no no no no no no you don't you don't need a partner uh okay so what i what i'm gonna tell you is is scary for me to tell you because i believe in getting after it when you're young and you're an ambitious and smart young and i hate to tell you not to do something but while you uh get another 18 months is going to give you a lot of information about life a lot of perspective especially if it's your first baby too there's just a lot of change let the baby get born let's get past some of this rough patch in the real estate.

[310] Let's see what's going on.

[311] You save up.

[312] You open up with your money.

[313] Doesn't cost that much to open up a brokerage firm.

[314] If you open it up on your 25 instead of your 22, you're going to be just fine.

[315] And, um, little patience.

[316] Yeah, I think it's going to be good for you.

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

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[333] Rachel Cruz, Ramsey Personality is my co -host today.

[334] Emma is in Pittsburgh.

[335] Hi, Emma.

[336] Welcome to the Ramsey Show.

[337] Hi, Dave.

[338] Thanks for taking my call.

[339] Sure.

[340] What's up?

[341] Okay.

[342] So my husband and I used to own a bunch of rental properties, and we ended up going bankrupt because we listened.

[343] We had your book and somebody else's book and the other person's book said it was okay to have debt whenever you're renting.

[344] We ended up being over $100 ,000 worth of credit card debt, you know, just because things were breaking in all of the houses.

[345] Yeah, and you had no margin because you put nothing down, yeah.

[346] Right.

[347] And we have a family of six, so there was a lot of mouths to feed, and I had some health issues, and I was homeschooling those four kids.

[348] So there was only one income.

[349] And y 'all lost all that.

[350] We did lose all of it, yes.

[351] When was that, Emma?

[352] That was 2017.

[353] Yeah, me too.

[354] It was 1988, yeah.

[355] Okay.

[356] Well, we got out of that, got to the point where we could buy another house, and now, as I speak, we've got $16 ,500 worth of credit card debt, which I'm trying to pay that down.

[357] I've got a spreadsheet where we're down $3 ,538.

[358] good in the last six months okay um but still the total debt is with a $5 ,000 balance on a car is $223 ,480 that counts your house that that yes how much of that your house i mean that's all your house except for you got the little credit card debt and the you got $20 ,000 plus your house right yeah that's yeah that's about it and what's your household income it's right now sitting at 95 and so what's your question so my question is i'm finding my emotional relationship with money is bad you know the love of money is the root of all kinds of evil i hate money and i get it rid of you're avoiding evil it's a spiritual stance on him as part honestly my i have i have some family issues where my one family member has a lot of money, and he is not a really nice person.

[359] He uses it to manipulate people, and so I don't want to be like him.

[360] Well, money didn't make him that way.

[361] Money exposed the fact that he is that way.

[362] All money does is, all money does is magnify.

[363] Okay.

[364] If you're a jerk and you get money, you're big jerk.

[365] If you're crazy and you get money, big, lots of crazy.

[366] Okay.

[367] If you're kind of compassionate and generous and you get money, you're what we call a philanthropist.

[368] Like you change whole worlds because you give so much.

[369] So, you know, it's not money.

[370] It's just you just got a jerk in the family.

[371] Well, welcome to being in a family.

[372] Okay.

[373] But you've had, you have a negative relationship with money is what you're trying to say.

[374] Yeah, I'm not making fun of that.

[375] I'm just laughing with you because you're funny.

[376] I like you.

[377] Okay.

[378] Okay.

[379] And so it's caused a lot of pain, Emma, is what you're saying.

[380] Money is a place.

[381] And you don't feel like you have a good handle on it because you guys have this credit card debt and you just think, oh my gosh, I just feel like I have no control over this part of my life.

[382] It doesn't feel.

[383] It doesn't feel safe.

[384] I've only proved that by going bankrupt once.

[385] Yeah.

[386] Yeah.

[387] I did too.

[388] And so, yeah, you then you've got to decide, am I going to happen to this money subject or is it going to happen to me?

[389] and what's what's going on is it's been happening to you yeah and I think understanding emma it's not just the money part I mean I think the money exposes some things but I think I wrote a book called know yourself know your money and I'll give you a copy of that yeah that book is perfect for this but it's to understand why do I handle money the way I do and I think for you and I think it's some good kind of questions to ask yourself everything from how you were raised what kind of you know tension was money in the household what kind of value did your parents place on it and kind of walking through that, understanding your tendencies, you know, are you more of a spender or a saver?

[390] Are you more scarcity mindset or abundance?

[391] What's your biggest fear?

[392] A lot of people are driven by fear.

[393] They don't want to end up, you know, how they grew up.

[394] You know, a lot of people have that fear.

[395] So they'll swing the pendulum so far where they save so much because they don't want to, you know, be poor like they were growing up and they saw the hardship or whatever it is, right?

[396] So everyone has their own, their own stuff.

[397] So that plus Emma being married, you have a spouse that has the, all different factors of everything we just listed.

[398] And so working together and all of that can create, yeah, just a lot of attention, a lot of stuff.

[399] That combined with the failure on the other part and with a house full of kids, a homeschool, all of those things combined to take away your confidence and your power, your emotional power over money.

[400] Does that sound right?

[401] Yeah, that sounds perfectly.

[402] Are you guys, Emma, you and your husband, do you guys do you guys do?

[403] a monthly budget?

[404] We look at money, we look at the debt together.

[405] And we're trying to get that number down.

[406] I'm going to pile you on with some stuff.

[407] I'm going to give you every dollar a premium, okay, as well in this call, because I think one of the things I can feel so out of control, and people do this a lot, Emma, so I'm not picking on you, but they're like, oh, yeah, I just have kind of all the expenses in my head.

[408] And it's just, it's like, it's this imaginary thing that can suddenly become very isolated.

[409] It can be very scary when you don't see.

[410] the facts.

[411] And Dr. John Deloney talks about this all the time, that facts are your friends.

[412] And I think a budget, honestly, working in that and seeing, okay, here's our income that's coming in, because you guys make a great income.

[413] I'm 95 grand.

[414] You're doing great.

[415] But to be able to say, here's the plan for that.

[416] And then for you, over the course of time, and I bet you, if you guys start that this month, I bet by January, February, there's going to be a level of confidence over this, Emma, because you're going to learn how to live within boundaries and make different decisions, and you're going to be at the grocery store and be like, okay, we got $200 this week.

[417] And I can spend that and I don't have to worry.

[418] Yeah.

[419] And what do I have to spend to stay within that?

[420] And it's this practice of discipline and being in control of what the, that's what the budget does.

[421] And I think that really will give you guys a sense of confidence too.

[422] I think the $3 ,500 in debt that you paid off is absolutely amazing because you've been beating it with a hammer, not slicing it with a sharp knife.

[423] And Rachel just gave you a sharp knife.

[424] it's going to go a lot easier you're just beat the heck out of it I mean yeah and you just beat the snot out of it this this 3 ,500 was heavy lifting you gutted that out girl because you didn't have it you didn't have a sharp knife you're just whaling on it with a club you guys should also know that most of my children are six foot tall and our food budget is $1 ,600 a month so that's okay that doesn't mean you can't get control of money okay that I know there's places.

[425] I know there's other places I can cut spending.

[426] Yeah, so I think that's what it is.

[427] You don't even know where your spending is because you don't have it all written out.

[428] Right.

[429] You get every stinking detail.

[430] You will be amazed.

[431] You and your husband sit down and look at where every single dollar is going before the month begins and give every dollar an assignment.

[432] That's what we call the app every dollar.

[433] So because you're giving every dollar a mission, okay?

[434] And when you do that, you're both going to go, where the crap have we been doing?

[435] And try this, you know, $1 ,600.

[436] That's before a budget.

[437] Try 1 ,400 for the month, right?

[438] Like, you start practicing this like ebb and flow and see, okay, where can we get an extra hundred, a few hundred dollars here or there.

[439] I mean, like, it's amazing the power that that really does give you and to be able to cut stuff.

[440] But honestly, I think for you guys getting some quick wins, because I think it's hold, I think you said, Emma, that it took six months to pay off.

[441] 3 ,500.

[442] So I want you to do that even faster.

[443] Oh, you're going to do it a lot faster because you're going to have a sharp knife instead of a club.

[444] You're going to have that.

[445] So I think that's going to start to give you guys confidence.

[446] But I think it's just rewiring these habits and it takes time.

[447] But you're not a failure, Emma.

[448] And that's the other thing is that this people equate their net worth or their money mistakes to who they are.

[449] And that's when they talk about shame, that shame is your identity.

[450] So take those apart that you are not the past mistakes that you've made.

[451] You are not your net worth.

[452] That is not who you are, Emma.

[453] And so there's a level there that I want you to release that because that stuff will follow you.

[454] And those lies will just will play a tape in your head.

[455] add that you don't need.

[456] Yeah, you're doing better than you think you are, especially considering how blunt the instrument is you're using.

[457] Yeah, but stay on the line, Emma, because Austin, I want to give her, know yourself, know your money, and every dollar premium.

[458] You're going to love that book, Emma, because it's exactly talking about you.

[459] It's a number one bestseller, and you don't want to miss it.

[460] It's know yourself, know your money by Retro Cruz.

[461] And it's all that, not only family history, but your tendency, scarcity, abundance, all that stuff.

[462] It's brilliantly done.

[463] You will love it and We'll put you in the every dollar budgeting app, and that will change everything.

[464] You and your husband do that together and turn off the stupid TV and tell the six -footers to go in the other room.

[465] We're working on the budget.

[466] This is the Ramsey Show.

[467] Buying your first home is a big deal and sets the stage for your financial success.

[468] So, work with a mortgage advisor you trust, not just some random website.

[469] Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step.

[470] Learn more at Churchillmortgage .com.

[471] This is a paid advertisement.

[472] NMLS ID 1591 and MLS Consumer Access .org, Equal Housing Lender.

[473] 1749, Mallory Lane, Suite 100, Brentwood, Tennessee, 37027.

[474] Rachel Cruz, Ramsey Personality, is my co -host today.

[475] Open phones here at AAA 825 -5 -225.

[476] Hey, if you're brand new to this show and a whole bunch of you are, based on our ratings increases and our ranking increases and so forth.

[477] We appreciate all of you being here.

[478] And of course, if you want to, if you're, you know, you're hearing stuff like baby steps and dead snowballs and you don't know what all that means.

[479] You want to get plugged in.

[480] Go to ramsysolutions .com for free and click on the get started button.

[481] When you click the get started button, it'll help you figure out where you are and what your next steps are and you'll start to learn the lingo of the stuff we're talking about and figure out how you can best apply.

[482] some of this and start to change your life.

[483] So, hey, that's what we're here for.

[484] The phone number here, AAA 825 -5 -225.

[485] Brian's in New York City.

[486] Hey, Brian, how are you?

[487] Hey, Dave, Rachel.

[488] Pleasure to speak with you.

[489] Thanks for taking the call.

[490] Sure.

[491] What's up?

[492] So my wife and I are out of debt.

[493] We built up our fully funded emergency fund, and we're in Baby Step 3B.

[494] We are currently renting.

[495] We're about an hour away from the city, and we commute into the city to work, and we're trying to save up for a down payment, and we're doing, we're trying to cut corners and take every step we can to increase the amount that we can save each month, and I'm just wondering if I should change my retirement down to zero and what my wife should do with her percentage at work.

[496] Currently, I'm working part -time, and I'm also staying at home with the kids, so we're cutting out child care there, and she works as a nurse manager in full -time, and her job has a 4 % match at 50 % – I mean, I'm sorry, 50 % match, and she currently has it at 4%.

[497] So I'm just not sure what we should be doing to try to get the most amount possible and just trying to figure out ways to yeah have you guys um kind of done a timeline brian to say hey if she does pause because i would i would encourage you guys to pause for a period of time while you're saving just to increase the cash flow like what you're what you mentioned do you know how long it would take you guys to save up a down payment if you guys paused all retirement and through all the extra money you guys have per month um it's probably going to be a couple years.

[498] Currently we have $6 ,000 down payment and we have $5 ,000 in a car fund and I guess if need be we can combine them but yeah to get a good down payment especially in this area it's going to take a couple years at least how old are you?

[499] I am 31 and my wife's birthday is actually today and she is not going to say so if you start And we started saving for retirement at 15 % of your household income, beginning at age 33, you would retire a multimillionaire.

[500] Okay.

[501] And so if you take two years off and save up a down payment and then you start, the trick is don't take two years off and then keep spending like you're in Congress.

[502] You don't need to be going out to eat.

[503] We're saving for a house.

[504] We're saving for a house.

[505] We're saving for a house.

[506] We're saving for a house.

[507] the match.

[508] We're sacrificing the compound interest.

[509] We're sacrificing our investments to get a house.

[510] So by God, let's get the house.

[511] Don't screw around the edges of this.

[512] You see what I'm saying?

[513] You've got to play through for this to make sense.

[514] If you just stop retirement and then you lollygag along for five years, this is not good.

[515] Okay, so you're thinking somewhere in the range of one to three years?

[516] Yes.

[517] Yeah, three years will be the max I would be unplugged.

[518] And so you've got to set yourself a goal and say, how much have we got to save a month to be there?

[519] And what have we got to do to make that happen?

[520] And that may be working extra.

[521] That may be cutting other things or maybe other things involved, but you've got to set this as a detailed thing.

[522] Because the danger of some of the stuff that we teach is if you don't do it all, it'll leave you hanging.

[523] Because we tell you to stop retirement and, you know, get out of debt.

[524] But if you don't go get out of debt, then you never start.

[525] retirement again.

[526] In your case, you've got your emergency fund.

[527] I'm trying to, I'm going to really enhance this 3B because this is an expensive area.

[528] I need some down payment money.

[529] Yeah.

[530] And Brian, too, we, for a first time homebuyers, because you said you're renting, you know, we say anywhere from 5 to 10 % for a down payment.

[531] So be, you know, looking on that side so that you guys can press play back into retirement.

[532] And then you're on babysubs four, five, and six.

[533] And then you're throwing extra money that you guys have at the house.

[534] But yeah.

[535] We love 20 % down because you avoid PMI but for first time homebuyer getting out Richel's right let's get the deal done yeah um and uh you know five 10 % down something like that you're gonna have some PMI but get her done and then get that retirement going and then get that mortgage paid down and get rid of that PMI that'd be your next thing Arthur's in Richmond Virginia hey Arthur how are you I'm good how are you guys doing better than we deserve what's up um so I had a question I've seen you guys give some career advice So I want to ask you, I am in a job right now, and I don't think my boss is very good at doing his boss job.

[536] And so I'm wondering, I really have some one main question is, how do I, when do I know how bad it has to get before I leave?

[537] And then also, if you're doing things that I know aren't useful to the people under him, including myself, when do it, and things that I just think are wrong?

[538] when do I when would I go to his boss and kind of report things I don't want to obviously stir the pot and just like start fights at work with with his boss about it or cause problems at work but I just don't know like when is when is the right time to go to his boss about thing that he's doing or lack of or not doing and when would I know it's just how to move on and go to a different company.

[539] Arthur is it is any of it moral issues or is it more just leadership style like he's not engaged where he should be and he's not communicating.

[540] Is it more of those kind of attributes, or is there stuff going on that you're like, that's flat out wrong, borderline immoral?

[541] So leadership style, I can get over, but like one is competency in leadership.

[542] Like, I'm a salesperson.

[543] I've been number one in my company for the past five months.

[544] And some of the advice he gives me, I'm just like, yeah, I would never do that.

[545] Like, I don't, I don't understand where you're getting this advice.

[546] And I don't believe he has the experience to back up his like their role as also a teaching manager um in sales and then how long have you have you been there five months i've been there about six months how old are you i'm 26 how old is he uh gosh like 50 something okay so what do you think the probability that you're talking to his boss is going to fix all this um i don't know i i don't know because his boss does ask me questions about him and I'll give him honest feedback I don't know what it's going to change honestly I really don't well I mean there's two possibilities one is realistic one is not one possibility is they move him on they fire him because he can't do his job and their number one sales guy is talking up to leadership about that okay um that that's a possibility that's reasonable the possibility that this 55 -year -old guy who is not competent suddenly becomes competent because you talk to his boss is precisely zero okay think about it they can't train him up on the things he's doing in a short period of time these are long pattern things that have to be fixed so you're either going to endure him while he's growing uh which is really doubtful or he's going to be removed, or you're going to be labeled, and you'll be gone.

[547] Right.

[548] That's something I'm worried about.

[549] Well, I wouldn't be worried about it.

[550] You're going to quit anyway, so what's it matter?

[551] So that's, I guess, the other question.

[552] And in terms of quitting, like, so I don't know, like, it's good money, and I'm making good money, and I'm happy in that sense, but it's just, it's a mess all the time with, like, you know, management.

[553] So I don't know, I don't know what point I should leave is I'm not growing personally, except things I learn on my own.

[554] But I'm not learning from the company anymore.

[555] So I don't know when.

[556] I would have, I would have something else in place, Arthur, before you go in and just quit, though, right?

[557] Because there's sales jobs everywhere.

[558] If you're a great salesperson, you can find a lot of things to sale and find good culture in other companies.

[559] It doesn't sound like it's a great culture.

[560] I think you've lost faith in the entire organization, not just this one guy.

[561] And it's probably time for you to go get something else.

[562] Which, thankfully, your skill set is very broad, right?

[563] Arthur, so I think you could kill it a lot of places.

[564] Go get something else.

[565] And then be aware that you might be 26, and after six months you don't know it all.

[566] That's possible, too.

[567] Yes, I thought about that, Arthur.

[568] A little humility.

[569] Just remember that.

[570] This is The Ramsey Show.

[571] Live from the headquarters of Ramsey Solutions.

[572] It's the Ramsey Show.

[573] We help people.

[574] Build wealth, do work that they love, and create actual amazing relationships.

[575] Rachel Cruz, Ramsey personality, number one bestselling author, co -host of the Smart Money Happy Hour.

[576] My daughter is my co -host today.

[577] Open phones at AAA 825 -5 -225.

[578] Dylan is with us in Miami.

[579] Hi, Dylan.

[580] Welcome to the Ramsey Show.

[581] Hey, guys.

[582] Thanks for having me. I am 22 years old, and I just graduated undergrad and got married the next day.

[583] My wife and I don't have any debt, but two weeks after our wedding, my mother passed away.

[584] Oh, no. Gosh, I'm sorry, Dylan.

[585] Was that unexpected?

[586] So yes and no. Yes, and the fact that she declined so quickly.

[587] She died at 61, so she left us, her.

[588] IRA, which has about 300 ,000 in it.

[589] And then the main reason I'm calling is because the house that she left has $60 ,000 left on it.

[590] And I'm just wondering, should I, what I'm planning to do is rent it out and have my renters pay the mortgage.

[591] But I also have the life insurance, which is, I got about $90 ,000 left on that, just kind of sitting in my bank account.

[592] Should I just go ahead and pay the mortgage off completely and then have that passive income or what would you guys do.

[593] Wow.

[594] I'm so sorry.

[595] That's completely tough two weeks after you're married to make all these decisions.

[596] I wish we could slow down.

[597] Okay.

[598] Here's the thoughts that pop into my head.

[599] Okay.

[600] Number one, renting a property as a landlord is not passive income.

[601] That's humor.

[602] us.

[603] That's crap from TikTok, okay?

[604] Because there's nothing passive about dealing with renters.

[605] I've got a bunch of them.

[606] I have been, I am planning to hire a property.

[607] It doesn't matter.

[608] It's not passive.

[609] This is very active.

[610] You have a hassle factor in your life called renter, okay?

[611] It's just part of it.

[612] And they'll be renting your mom's home too.

[613] And they're going to be in the home you probably grew up in, right?

[614] Right.

[615] Yeah.

[616] Yeah, that's weird emotionally.

[617] It's hard.

[618] Okay.

[619] So that's number one thing.

[620] So can this be done?

[621] Yes, it can be done.

[622] You're 22.

[623] You're brand new married.

[624] In my opinion, the last thing you need is the hassle of a rental property.

[625] But if you're going to keep this and give that a try, you should pay it off.

[626] Okay.

[627] Okay.

[628] And because that will lower the hassle.

[629] You won't have a payment.

[630] anyway.

[631] And so take the insurance money out of the checking account and pay the mortgage off.

[632] I normally wouldn't like to make that decision on that property that quickly, but I will tell you like the current, the rate, the home Rachel grew up in is now in my rental portfolio.

[633] We kept it.

[634] It is weird.

[635] I haven't lived in that house in 20 years.

[636] It is weird to go over to that house with other people's crap in it still emotionally.

[637] And I'm, I land landlord, a bunch of property, and I grew up in the real estate business.

[638] So I've got a huge advantage over you, and I'm old.

[639] I've done this a lot, okay?

[640] You're 22.

[641] This is your first property.

[642] I'm warning you that the first time that they screw around with the house you grew up in, they being the tenant, it's going to be emotional for you.

[643] Just be ready for that, okay?

[644] No one, it's never going to be the same.

[645] It's never going to smell the same in there.

[646] Okay.

[647] and so all of that now so if you want to get a professional property manager that's great are you local dylan where the house is are you guys close i'm not i'm about i'm in miami the houses in central florida that's not too bad i i don't like long -distance landlording either so i'm going to tell you that it with all the emotions if we had a little bit of time to digest all of this, I might just sell it, but that's even a harsher thing than letting a renter be in it.

[648] So it's not an automatic thing that at 22 years old, two weeks after you're married, you ought to be a landlord.

[649] That's not an automatic thing.

[650] Okay?

[651] So it's an automatic thing you probably shouldn't do, actually, just in terms of quality of life for you.

[652] But it's thrown in your lap, and here we are.

[653] So if you want to try it, just be forewarned that this is not, it's not passive.

[654] you're going to have some emotions around other people and smells being in your house.

[655] No pets.

[656] I love pets.

[657] One of my favorite things on the planet is my little dog, but no pets, not in my rental properties.

[658] We call them $10 ,000 cats.

[659] They devalue your house $10 ,000 when they put the cat in there, okay?

[660] And so, sorry, that's the way that works.

[661] So I'm telling you, this is an experienced landlord talking to you.

[662] Dylan, for you and your wife, where are you guys at financially?

[663] I know you said you have no debts.

[664] you obviously have this $300 ,000 IRA from your mom.

[665] Are you, do you and your wife, do you all rents?

[666] Do you own a home?

[667] Where are you guys at?

[668] Yeah, we're renting.

[669] We're just kind of getting started financially.

[670] Our combined income is probably around 70 or 80.

[671] Okay.

[672] I would sell this house and buy you a house.

[673] I know.

[674] How much is the house worth?

[675] How much is the house worth?

[676] How much is the house worth $250, maybe 300 tops?

[677] I would sell this house and buy you a house.

[678] And when I say that out loud, two weeks after you got married, your mom dies, that's very harsh for me to say that.

[679] Yeah.

[680] It's hard for you to even hear that and think about that.

[681] But five years from today, you having this as a rental property versus you and your new wife having a new home to live in, that's a much better, wiser decision.

[682] And, you know, I know I'm asking a lot for you to process of a lot of emotions.

[683] have to make this decision today, Dylan.

[684] And you don't have to do it because I should do it.

[685] But, you know, give yourself some time and kind of just, you know, maybe you try the renting thing for a year and I would still pay it off.

[686] And maybe you look up in a year and you and your wife are like, man, we want to get settled somewhere.

[687] You have a great asset that your mom left you, which is such a gift.

[688] And you can use that gift to continue her like a saying.

[689] I mean, what a beautiful thing that she, you know, it has for you guys.

[690] So maybe it's not right now, but maybe you look up in six months and think, okay, we can make we can make this decision but for you and your family now going forward you and your wife um you can really use this to jump start you guys if this house had no emotion tied to it if it was if she had it as a rental property right you would have sold it already in your mind you wouldn't you wouldn't buy me and my brought a new house you wouldn't be going I'm going to rent and yeah but let me say this this may not be Dylan's case real quick but the idea of having real estate it's a big deal it's a big deal people want a rental property I mean the idea of you You don't want to have a rental property two hours away and be renting yourself.

[691] Yeah.

[692] No, I agree.

[693] But I'm just saying, I know, Dylan, I mean, if I can get into a 22 -year -old's head, the kind of content that's out there and what people are saying about, about personal finance.

[694] TikTok will tell you you got to have a rental house.

[695] Yeah, but it's a very appealing thing, right, to have this, quote, unquote, active income, not passive.

[696] But so there's a, I get where you're at, Dylan, but I think what you have to realize is when you set you and your wife up really well, then in 10 years you could get into this if you want.

[697] You have all the rentals you want.

[698] Yeah.

[699] And you'll be a millionaire.

[700] Yeah.

[701] And you'll have a paid -for home for you and your new bride.

[702] The impact on your marriage is positive.

[703] The impact on your health is positive.

[704] The impact on your finances is positive.

[705] I just, man, I'm sorry.

[706] Sorry you're having to make these decisions.

[707] But that's what I would do if I woke up in your shoes, sir.

[708] This is the Ramsey Show.

[709] You know, it doesn't take a degree in statistics.

[710] to realize this one stinks.

[711] 93 % of undergraduate private student loans are co -signed.

[712] So when you're delinquent and drowning, mom or Papa or Uncle Joe is stuck in that financial stress along with you.

[713] But there is a way out.

[714] Why Refi.

[715] Why Refi offers a custom refinancing option with a fixed rate loan based on your ability to pay.

[716] And the average interest rate Y Refi offers is 3 .9%, which can significantly reduce your monthly payment and decrease your total cost.

[717] Contact Y -Refi at 8442 Ramsey or go to Y -refi .com slash Ramsey.

[718] That's 8442 Ramsey or the letter Y, then R -E -F -Y .com slash Ramsey.

[719] Y -R -R -R -FI is not licensed by the California Department of Financial Protection and Innovation.

[720] Y -Refi is not authorized by the New York State Department of Financial Services to service any New York loans.

[721] Funding may not be available in all states.

[722] Rachel Cruz, Ramsey Personality, is my co -host today.

[723] Thank you for joining us, America.

[724] I'm Dave Ramsey, your host.

[725] Ha, coming up is Jackson, Michigan.

[726] Mike's on the line.

[727] Hey, Mike, how are you?

[728] Good, Dean.

[729] How about you?

[730] Better than we deserve, sir.

[731] How can we help?

[732] Quick question for you.

[733] I am retired.

[734] We are retired, and we have no debt, and we're purchasing a new car.

[735] We could pay cash for the new car.

[736] If we could get a financing deal and we can invest that, amount of money and CDs over that same period of time, what's your recommendation?

[737] Pay cash for the car or don't buy it.

[738] Okay.

[739] Here's the thing.

[740] How much, what's your net worth?

[741] I'm about $2 .5 million.

[742] Yeah.

[743] You didn't get that by playing games like this.

[744] You know, well, I, you got this by saving money and investing money.

[745] Right.

[746] But you didn't borrow on, uh, a car and invests the difference.

[747] No, when I was talking about it is...

[748] I know what you're talking about, but I mean, my point is, is you steadily invested over a long period of time to get $2 .5 million.

[749] You did not borrow money and invest borrowed money to become a multimillionaire, did you?

[750] Correct, correct.

[751] And now you're going back on all your old ways.

[752] Don't do it.

[753] Stick with the plan that got you here.

[754] You're incredible, man. Congratulations, Hero.

[755] Thank you.

[756] I wish I would have found you a lot earlier.

[757] It would have made the pay.

[758] that's a little bit easier, but I enjoy your show.

[759] I don't think it's ever easy, but you scored touchdown in the Super Bowl, as far as I'm concerned, my man. Well done.

[760] Thank you.

[761] Works hard to get there.

[762] Thank you very much.

[763] That's so cool.

[764] You know, it's funny that, Rachel, when you start paying attention to money, and obviously that's one of the things that's required to end up with $2 .5 million, I kind of thought he was going to tell me that, by the way.

[765] Yeah.

[766] Kind of felt it.

[767] You know, he's just like, but people just, you're, they're thinking about money.

[768] not in a negative way not in a greedy way not I'm obsessed with money but instead of just you know it's like people that drive and pay attention when they're driving and the ones that drive and don't pay attention when they're driving and that's what they do with their money they don't pay attention or they do and the ones that do pay attention if you just think about it even though he was getting ready to do a dumb thing but I mean he's a guy that thinks about it that's why he won yeah it's why he won and and I think that's where people can overthink something and take the math of something and think, okay, well, I can kind of beat the system here because we hear that all the time, right?

[769] Paying off your house or even debt.

[770] You know, people use debt and want to keep debt around because, like, well, if I invested that amount of money instead of paying it off, I would make more.

[771] And you know what I mean?

[772] Like they start to, they start to overthink it where I'm always like, oh my gosh, you have to like untangle it.

[773] And almost in a sense, remember what brought you here?

[774] Yes.

[775] And what is the emotion that you have when you're not attached to debt?

[776] How do you feel?

[777] and that behavior part, I feel like some people, you know, jump.

[778] But I, but I appreciate it as question because, I mean, I think there are people naturally that are like, I want to do well with money.

[779] What's the quickest path?

[780] That's how you got to point A, point B. Exactly.

[781] You're exactly right.

[782] And so sometimes what can happen is you try to fix something with the math and you forget the heart.

[783] That's right.

[784] You know, use only your brain and not your heart because your heart measures risk and your head does math.

[785] And so if you're, if you, you know, ooh, I work so hard to be debt free.

[786] And then all a sudden you forget and go back into debt on a car.

[787] So absurd when you think about it.

[788] Right.

[789] But, but at least he's on pat task and he's thinking about he's a person that considers these things and is asking questions.

[790] Yeah.

[791] Absolutely.

[792] Still curious.

[793] Yeah.

[794] Still curious.

[795] Two and a half million dollars in.

[796] Well done, sir.

[797] Well done.

[798] I'm proud of you.

[799] Stephen.

[800] is in Cincinnati, Ohio.

[801] Hi, Stephen.

[802] Welcome to the Ramsey Show.

[803] Hey, Dave, how are you?

[804] Better than we deserve.

[805] What's up?

[806] Good.

[807] You had a question for you.

[808] I'm well -versed in your program.

[809] I'm 52, and I've got three boys.

[810] One is a junior in college, or he's going to be a junior.

[811] The other one is going to be a freshman in college, and the other one's just going into high school, so he's not far off from college either.

[812] My wife and I have made the decision to try to pay their tuitions in full.

[813] Good.

[814] And we've got a, yeah, we've got good 529 programs.

[815] but they're just not going to cover all of it.

[816] So we're trying to make up some ground in a fairly short period of time.

[817] And I wanted to see what your thoughts are on basically moving the principle that we've paid into our Roth retirement accounts and moving that over to the $529.

[818] It's about $110 ,000.

[819] That would basically kind of get the deal done.

[820] And we ran the hypotheticals.

[821] I'm still going to have about $2 .2 million when it, it comes to retirement time, which is more than enough for our lifestyle.

[822] So I just want to get your thoughts on that.

[823] How much money is in your retirement now?

[824] About $900 ,000.

[825] Okay.

[826] And you don't have any other money?

[827] I've got our emergency fund.

[828] When you're saying pay in full, Stephen, you mean just like semester by semester, right?

[829] Correct.

[830] For all three boys, for all four years.

[831] What's your household income?

[832] $150 ,000.

[833] okay um go ahead well i just want to make sure steven that yeah you're i mean you guys will pay each semester when the semester comes you're not looking how much is in the 5 .9 uh let's see there's about a hundred and 10 ,000 in there now okay and what's the total what's the total budget for the kids to go to school or tuition uh they're about a 45 a year or yeah about 45 a year for each kid that includes dorm and and everything yeah that's that's that's everything so you're you weren't talking about just tuition you're covering everything correct okay and so you got 80 a year right now correct and you got 110 in there so you got a year's worth you don't have enough even if you move the Roth well not so we can get out we'll continue to say for our youngest So we will basically, you know, fund that difference.

[834] Yeah, but you don't have enough even if you move the Roth because you're burning 80 a year for the next two years.

[835] That's 160.

[836] And after that, you're burning another 80 on him.

[837] No, only two are in college.

[838] Only two.

[839] I know.

[840] Two are in college now.

[841] 40 each.

[842] Right?

[843] Yeah, that's right.

[844] 40 each?

[845] Yeah, so 80K per year.

[846] And you got a freshman and you got a gentleman and you got a general.

[847] So for the next two years, that's $100 to $2 .60.

[848] You only got $2 .10.

[849] Well, we'll cash flow some of it.

[850] So, yeah, the math is in apples to apples.

[851] You're not going to get there.

[852] Yeah, you're not going to get there.

[853] Yeah, yeah, yeah, yeah, yeah.

[854] So your freshman, when your freshman graduates, will you have another, will you have two in school ever again, or is it the one going to leave about the time the other one comes in?

[855] The one leaves as soon as the other one comes in.

[856] Yeah, okay.

[857] So you're going to be, once you get past this two years, you're at a 40 -a -year burn rate, give or take.

[858] Correct.

[859] And that doesn't count them getting a job, which they need to do.

[860] And applying for scholarships, which they need to do.

[861] Right.

[862] I just, it just, it just goes against everything I am to start cashing out retirement for college.

[863] I'm certainly not going to borrow to do it.

[864] So I'd do that before I'd borrow.

[865] And by the way, you can't roll a Roth into a 529.

[866] you can just cash it out.

[867] Yeah, so it's not, you said I'll put it in the 529.

[868] You can't.

[869] But you can just take it out and spend it.

[870] And I wouldn't do that until I'd emptied the 529.

[871] I'd let it sit there and grow additional growth before you move it, tax -free, right?

[872] And so you got, I'm going to try to make it two more years and get the first one out of school and then get down to the 40 burn rate.

[873] If you got down to the 40 burn rate with this money, that'll get no that just makes it one year yeah it's interesting to me it's the you know it's it it rubs me the wrong way because it's kind of against the principle of it's against everything i believe yeah i just i'm going to do everything i can to not do so so here's what i'm going to do i'm going to use the 529 i'm going to cash flow like a bandit and and i'm going to put kids to work and i'm going to go for scholarships and try to not touch this if you do touch it make it the last thing you do and you allow it to sit there and grow Until then.

[874] And so maybe only in the fourth or fifth year or whatever else.

[875] What else can we sell?

[876] Do we have any other assets?

[877] Do we have anything we can do?

[878] Because this $100 ,000 is worth millions if you'll leave it alone and not take it out of there.

[879] What it's going to cost you and miss is just ridiculous because you're getting tax -free growth on it.

[880] I hate to touch it.

[881] So it'd be the very last thing I'd do.

[882] This is The Ramsey Show.

[883] Rachel Cruz, Ramsey personality, number one best -selling author, is my co -host today in the lobby of Ramsey Solutions on the debt -free stage.

[884] Ben and Angela are with us.

[885] Hey, guys, how are you?

[886] Hello, Dave.

[887] Welcome.

[888] Where do you guys live?

[889] We're from Kennewick, Washington.

[890] Whoa, it's a bit of a trip.

[891] Yeah, that's the sane side of the state.

[892] You know what?

[893] Most of Washington is sane.

[894] There's a few spots, though, that offset it.

[895] Yeah, that's so true.

[896] A lot of states have that disease nowadays.

[897] Welcome.

[898] Good to have you guys.

[899] How much debt have you paid off?

[900] So $436 ,959.

[901] Way to go.

[902] How long did that take?

[903] About six years, one month.

[904] Love it.

[905] And your range of income during that six years and one month.

[906] We started at about 140 and took a quick dip for when the Lord blessed me with a job loss and then bumped her all the way up to a little over 300.

[907] Good for you.

[908] What do y 'all do for a living?

[909] I'm a registered nurse.

[910] Of course.

[911] And I help people get mortgages that are 15 -year fixed rates.

[912] Very good.

[913] I do mortgages for a living.

[914] Very good.

[915] So I'm going to guess the high amount, 437, and six years maybe you paid off your house.

[916] We did.

[917] I love it.

[918] Weird people.

[919] Our kids have told us we're weird for years, but now we officially are.

[920] So now it's been declared on national radio.

[921] Yes.

[922] Oh, man. A mortgage broker with a paid.

[923] four house that's so crazy i love it way to go congratulations jall yeah how does it feel to have no payments um you know it feels really good uh knowing that's one less stress in our life but uh we still live below our means and uh we have goals but uh we're not certain what we're going to spend money on here forward we're just kind of like okay what's the next goal but uh yeah we are are very thankful to where we're at six years of focus and now we're like wow what do we do with all this and so we started our next thing fund we have so many things that we want to do we couldn't decide so we just started piling it up in every dollar under our next thing fund and i'm sure we'll figure it out pretty quick so i'll like that that's so fun you guys so you have kids we have four okay what are their ages uh 27 is kiley jacob is 25 hannah is 22 and abbey is 7 Okay, so most, in their 20s, and what do they, what do they think of mom and dad?

[924] You know, they've been our greatest supporters through all of this, and I think it was our goal all along to make sure our kids knew what that journey was like, and hopefully they became smart with their money as well.

[925] Very good.

[926] You guys are great examples.

[927] Thank you.

[928] Good modeling.

[929] Good modeling.

[930] Rachel always says more is caught than taught.

[931] Yeah, very good.

[932] Good.

[933] So what starts you guys on this journey six years ago doing this Ramsey stuff?

[934] So, you know, April, tax time.

[935] We sat down and we had probably our biggest tax bill we'd ever seen.

[936] And we were sitting chatting and we're like we also made more than we had ever made in our working careers.

[937] And we're like, wow, how do we make so much money, owe so much money to the IRS?

[938] And we felt like we were still living paycheck to paycheck.

[939] Yeah, we were one expense away from a disaster, I think.

[940] That's how we could sum it up.

[941] Wow.

[942] And how long ago was that?

[943] Was that six years?

[944] That was six years one month.

[945] Yeah, I had heard of Dave, you know, prior to that.

[946] And, you know, some of it sounded pretty cool, but I thought I was smarter.

[947] So, you know, a mortgage guy.

[948] So, you know, but, you know, we'd just, we'd had our, you know, I had it moment.

[949] And we also had a situation.

[950] get connected with us after that.

[951] I had a co -worker, actually, that had turned me on to you.

[952] I read the book and listened to the podcast quite a bit.

[953] And we chatted about it, you know, probably four or five years earlier than that.

[954] And we kind of did, I don't know what you'd call it, Dave -ish, but we did Dave a little bit.

[955] But once we had that, you know, I had it a moment, it was all game on.

[956] It was just, you know.

[957] Amazing, you guys.

[958] He decides we're going to do this stuff, Angela.

[959] What did you say?

[960] you know we talked about it initially i was like i don't know if we're ever going to dig out from this mess um but we started and i think what kept us going in the driving force was paying off the small debts and seeing them go away and so it just kept us in that momentum and uh we knew at that point um that we'd get there um wasn't easy a lot of struggles along the way but we made it and so we're very thankful for that wow so what was all the other debt part of it was the mortgage.

[961] I guess a big chunk of it.

[962] Yeah.

[963] So we had two cars in an RV for 61, six credit cards at 39 ,000, a big honking $78 ,000 student loan.

[964] That was mine.

[965] The IRS debt that we chatted about 401K loan and about 190 for the snowball.

[966] And then what took us about three and a half years for that.

[967] And then we had about a five or six year plan on the mortgage, but the last two years have been super good for for my business.

[968] And so, um, we accelerated.

[969] And now we're sitting, you know, with no mortgage payment and my business is extremely slow.

[970] So, and I would probably be freaking out right about now and thinking about, you know, what the future would bring for us.

[971] But with no mortgage, you know, I can, don't have to worry about it.

[972] Yeah.

[973] Yeah, we talk about a lot on, Dr. Johns -Lone, he talks about it too, that even when you own debt psychologically, like your mind knows it's not safe because, as someone else has control over a part of your life.

[974] And there is this deep sense of peace when no one has a say over your life.

[975] You know, you truly are being able to control that.

[976] Did you guys feel that?

[977] I know I'm sure with the consumer debt when that 190 was gone at the consumer debt.

[978] And then did you feel it again with the mortgage when you paid it off?

[979] I'd say so.

[980] Absolutely.

[981] I mean, we had refinanced the house and done so many home equity loans that I swear our mortgage probably contained a pizza from college or something like that.

[982] Some shoes from Sears, you know, when they were still around.

[983] So, you know, I've been in debt since I was 18 years old.

[984] You know, when I bought my first stereo for in college, you know, at a little mom -and -pop store where you had to go in and pay cash for your payment once a month, you know.

[985] So.

[986] Wow.

[987] So it's just so it's an ultimate feeling for you to feel like, have you never experienced it?

[988] I mean, since you're 18.

[989] Yeah.

[990] Yeah.

[991] Yeah.

[992] Wow.

[993] You ever go back?

[994] Never.

[995] Never, never.

[996] That's obvious, yeah.

[997] Not a chance.

[998] Not once you've done what you guys have done.

[999] No. This is impressive.

[1000] Well done.

[1001] Thank you so much.

[1002] Thank you.

[1003] What do you guys tell people the key to getting out of debt is?

[1004] We have a saying, it's the three Cs, communication, commitment, and compromise.

[1005] And it's really the same keys to being married for 25 years.

[1006] We celebrated our anniversary three days after we paid off our mortgage.

[1007] Wow.

[1008] That was a killer celebration.

[1009] But communication, the constant, the budget meetings that we had, we'd never done anything like that.

[1010] And it really just opened up a ton.

[1011] Commitment to each other.

[1012] Commitment to the plan.

[1013] You're just committing to it.

[1014] And there's a whole lot of compromise when it comes to these different things, either wanting to spend money or not wanting to spend many different priorities, especially after we hit baby step four or five and six, figuring out, you know, how fast to go after that mortgage and still live.

[1015] This is the perfect time for you guys in the mortgage business because it's tough out there.

[1016] It is.

[1017] Absolutely.

[1018] Perfect timing for y 'all to be free.

[1019] Congratulations.

[1020] So well done.

[1021] Hey, we got a copy of Total Money Makeover for you in the Live and Give bundle.

[1022] You can give that away and help somebody get started.

[1023] The Baby Steps Millionaire's book, which is the latest number one.

[1024] And that's the next chapter in your story for sure.

[1025] and of course the Financial Peace University, one -year membership, and again, you can go through it, give it away, however you want to do with this stuff, it's our gift to you to say thank you for making the trip here, and to say congratulations.

[1026] We're proud of you.

[1027] Thank you so much.

[1028] Well done.

[1029] Very well done.

[1030] Ben and Angela from the state of Washington.

[1031] They did it.

[1032] House and everything.

[1033] $437 ,000 paid off in six years in one month, making $140 to $300.

[1034] Count it down.

[1035] let's hear a debt -free scream three two one we're debt -free yeah I love it I love it I love it so fun way to go guys this is the Ramsey show Rachel Cruz Ramsey personality is my co -host today open phones at AAA 825 5225 Jake's in Canada hi Jake how are you Hey, Dave, pleasure to talk to you.

[1036] I had never thought I'd be able to actually communicate with you, but it's a blessing.

[1037] Well, we're honored.

[1038] How can we help you?

[1039] So a little bit of a back story.

[1040] I got married at a pretty young age.

[1041] So, you know, life is good.

[1042] You know, we're doing the five baby steps.

[1043] We managed to pay off a lot of debt.

[1044] And then got a three to six months of an emergency fund sitting.

[1045] And so, you know, year and a half ago we were blessed with a little baby boy and um so now um you know our marriage started getting really uh rocky it was like a hard you had a hard time and so um now my wife uh she's saying how like she doesn't want to be together anymore she doesn't love me anymore um she's talking to somebody else um like in the middle of the night i'll hear here on the phone with another person and I just don't know what to do with that and she wants to basically like live at home still like in the same house and so that she could raise our son but it's like it's a very like it's a very difficult place for me to be in so I just need some advice on that I'm sorry how old are you uh 24 dude you don't deserve this no it's uh I mean it's I mean it takes too to break a relationship right i'm not blaming her on at all 100 % but it's like i i wanted to make things work we're watching a marriage counselor and everything and for a while there i thought things were going good and then about three weeks ago she said she was done like she was completely done and then like a couple days later she was talking to somebody else already so it's a tough situation and how old's the baby uh he's a year and a half year and a half oh check I'm so sorry.

[1046] Yeah, I mean, what do you do?

[1047] Well, yeah, I mean, in this case, I mean, if she's like, I mean, in a sense, having an emotional affair and she's, you know, talking to people and all that, I'm like, she's breaking her vows that that she made with you and choosing not to walk down a path that you guys can have healing and maybe.

[1048] move past this and so so sure no one's perfect in a marriage um but she's making these decisions consciously to to go against everything that you guys had in your marriage and so yeah i mean what they've said earlier but i'm like at that point like she doesn't she doesn't get a lot of votes right now in your life in my opinion yeah so yeah so let me let me back up and just address your initial question okay um if you guys work this out and be married and with a marriage counselor walk through this this patch and she can set the phone down and devote her life to you you can set your issues down and devote your life to her that's great and i hope that's what can happen if the if she actually gets once a divorce you can't stop her it's her you can't make other people do things yeah i can't make my wife do anything believe me we've been married 40 years i can't make her do anything exactly and she really can't make me do anything either in all fairness okay we all make decisions as individual adults okay so you can't you can't make people do what you want to do but what you can decide is what's right for you based on the decisions they're making and um and you know when you say out loud we're going to get a divorce and live in the same house and be roommates that that's just strange weird and dumb you know when you say that out loud that it is all of those things right yeah yeah exactly like it's it's heartbreaking not even not even a possibility okay if we're going to go through a divorce that means we're not going to be married and we're going to have separate lives no we're not living in the same house that's assana right so she doesn't want to leave jake is that like he said she wants to stay in the house she wants to be in the house with you or she just wants the house no she wants to because she doesn't have a degree in anything and And for her right now, like the way the market is right now, for even renting a home would be super hard for her.

[1049] So she basically wants to just live there.

[1050] And like, so she does not want to go back to work because she wants to raise our son, which, like, it would be better for him.

[1051] I agree.

[1052] No, it wouldn't.

[1053] No, no, it wouldn't.

[1054] He does not need to be raised by divorced parents living in the same house together.

[1055] That's so freaking weird.

[1056] It's psychologically damaging to your son.

[1057] No. Yeah.

[1058] no that's not better for your son it sounds this poor girl she's so screwed up i don't want to work and earn money but i don't want to be married well darling you can't you get to choose one of the other it's not the way this is going to work out so yeah i i think if we're going to get a divorce that she's going to have to go get an apartment you guys are going to sell the house and you're going to go get an apartment okay no you're not going to live together i mean yeah does that i mean that you knew that right yeah i did and i just i just like i don't want to be the guy to just like decide something you know and for it to not work out in the end that's why i think well if if you got staying in the same house involves healing your marriage i'm all for it yeah but not work out and there is nothing where you divorce and live in the same house together that works out the end you're a highly unattractive single guy at this point that you live in a house with your ex because it says it has a big arrow above your head that says stupid okay no really that would not you don't want to do this you don't want to do this no I know you don't know but oh no no no and and he seems like such a kind he's a sweet guy person so to have the conversation with her Jake is that she's doing this like that's my thing you're not the one putting her out on the street and not letting her be home with her child she's making decisions about her life that is now choosing to isolate herself because she's chosen to go against her vows to her husband so like yeah and yeah and you're probably not perfect i'm not saying that but like man it is you reap what you so and there's a level of consequences that she has to face because she's making big girl decisions and now she's about to get some big girl results and she's got to deal with that like that's it's unfair to you to be the brunt of all of it and she calls me mean that was very kind that was very kind but man it's just unfair to you Jake like I feel for you and I'm like you don't because you're a kind person even the way you're asking the question you're so nice no I'm not sure we're pretty sure you're not perfect but you are a nice guy and you don't deserve this so no we're going to set up a normal process that says you have a future away from her if she doesn't want to be with you.

[1059] She is a future away from you because she doesn't want to be with you.

[1060] We can't and then you can move on with your life and she can move on with her life and we've got this connection with this one and a half year old.

[1061] And this is all the caveat that for some reason if there's an issue that she's running from the marriage to all these other relationships that you guys in counseling and therapy can work through and build a stronger marriage.

[1062] That's our number one, right?

[1063] Number one is that you guys can heal this over time um but divorced and living in the same house is not on the agenda yes okay it's not on the agenda we're just taking that off the table just not let's just be real clear if we hadn't already been the way you can look at some of these things sometimes when you're in a fog on the decision making folks whether it's something deeply relational like that where your brain just shuts down because the stress level is so high and you really can't see clear the way you can the way you can get clarity when you're overwhelmed with that kind of stuff is just projected out 10 years okay 10 years after moving in with your ex and living in the same house how's that working out for you yeah and I think and he probably knows that but following through with that decision means confrontation with her making her move or he's moving and like do you know what I'm saying like following through with the repercussions of that decision is messy and so entering into that probably sounds exhausting for you, Jake.

[1064] Not his decision, though, it's hers.

[1065] I mean, she made it.

[1066] Yeah, yes, yes.

[1067] But his decision of not living in the house with her was her divorced, which is the right decision, by the way.

[1068] instantaneous, yeah.

[1069] It doesn't take 30 seconds to make that one.

[1070] Not three seconds.

[1071] You make that one.

[1072] Sorry you're going through this, young man. I hope it works out.

[1073] Doesn't sound like it's going to.

[1074] That puts us out of the Ramsey show in the books.

[1075] There's of Ramsey Solutions.

[1076] It's the Ramsey Show.

[1077] Where Dad is dumb, Cash is Can.

[1078] and the paid -off home mortgage has taken the place of the BMW as the status symbol of choice.

[1079] We help folks build wealth, do work that they love and create actual amazing relationships.

[1080] Rachel Cruz, Ramsey Personality, number one best -selling author, and my daughter is my co -host today.

[1081] Open phones at AAA -825 -5 -2 -2 -25.

[1082] That's AAA 825 -5 -2 -25.

[1083] Jeff starts off this hour in Indianapolis.

[1084] Jeff, how are you?

[1085] Doing great.

[1086] Thanks for taking my call today.

[1087] Sure.

[1088] What's up?

[1089] So my wife and I are on baby steps four, five, and six.

[1090] We have three kids, a senior and high school, a sophomore, and an eighth grader.

[1091] And we have a pretty good retirement built up.

[1092] And we have about $130 ,000 left on our mortgage.

[1093] And we were just wondering, you know, what kind of is our next step, you know, how do we split, do we split our money or do we kind of focus it in one of those three areas over the next six years?

[1094] College is coming at you like a freight train, huh?

[1095] Yes, sir.

[1096] What do you have to say for that, Jeff?

[1097] So we have about 10 for each kid and probably 20 for our oldest.

[1098] We think that her college will probably be between 5 and 10 with her guarantee.

[1099] scholarships to an in -state school so we could essentially finance that pretty pretty easily what's your household income over the next usually around 120 this year it'll probably be up to 160 way to go good okay well it sounds like you're making good college choices in terms of choosing one that's affordable that's very wise.

[1100] I mean, if I woke up in your shoes, the college would be my first concern, but it doesn't necessarily mean that it has to get all the math.

[1101] I just want to make sure that that box is checked, and I've got a way to do it before I move on to some.

[1102] In other words, I wouldn't pay extra on the house until I knew I had the kids covered.

[1103] Okay.

[1104] That's why it's five instead of six.

[1105] Yeah, what about throwing more into retirement because the market's on sale?

[1106] That'd be tempting, but be tempting, but before I did that, I'd want to take care of my kids' college.

[1107] 15 % of your income going into retirement, and then let's, I would, that's why it's four, and then five is kids' college.

[1108] And, you know, now, if you, if you have said, okay, we make 160 and we can cash flow this.

[1109] If we do this, this and this, then A, B, and C, then go do A, B, and C, and cash flow it.

[1110] And that's the kid getting scholarships, college choice, kids going to work while they're in school.

[1111] None of those are bad things.

[1112] It's not child abuse.

[1113] so but but I want to know that we have a way mathematically figured out and it's not just we hope we can do it.

[1114] We've actually calculated it out, projected the budget out and said this is how the math is going to flow for each of the three kids to get through school.

[1115] Once you've got that, then I would move and start paying off my house.

[1116] Yeah, then the wiggle room starts to happen once you have mapped it out.

[1117] And I think that that's a powerful thing too, Jeff, of what he just said though when you put facts on paper like when you and your wife sit down and you guys just plan out hey in the next five years here's what 22 23 24 25 look like and project out whether it's income but the big chunks and you start to see it then then that kind of gives you more breathing room to be like okay we'll put we'll set that track going and then we're going to take this money over here and we feel good about throwing that extra on the house because we know that that's taken care of but it just gives you kind of that piece of mind and answers the question because as you guys may look down and be like, oh, gosh, like, you know, because of the kids' college, maybe we pause on paying off the house early.

[1118] Yeah.

[1119] For a little bit, it may not be able to pay extra.

[1120] You may not be able to pay extra, especially when, like, how old's the youngest one?

[1121] He's an age grader.

[1122] Okay, so you're going to have two in max at the same time, but you're going to have several years of two people on the payroll.

[1123] Absolutely.

[1124] Yeah.

[1125] So you can map that cash flow out.

[1126] over the next eight years right and so um you know that that's just exactly like rachel's saying there and you can just put the bit it won't take an hour i mean you do you sit down and do it turn tv off and just lay it out on a yellow pad it's not hard but you're but in that you're going to make assumptions about where they're going to school and so you can go and start communicating to all three of them this is where you're going to school yeah which is exactly what we did the boundary conversation Or if you want to go somewhere else, you've got to pay the difference, which was a conversation.

[1127] We had.

[1128] So the other option is do we try to hammer down on the mortgage and get it paid off in three years?

[1129] And then...

[1130] You'll have kids in school.

[1131] You've got a senior, right?

[1132] Correct.

[1133] But again, I think her cost is going to be around $5 ,000 a year, which we have covered.

[1134] Okay.

[1135] We have four years of her school covered.

[1136] Check number one.

[1137] Box check one.

[1138] Box check two.

[1139] Box check three.

[1140] And then you can play with a variable of jumping in and knocking off the house, and that increases your cash flow, which enables you to pay, be more able to pay to cash flow college.

[1141] That makes me more nervous, though, than just having it covered, and then reaching over and paying off the house.

[1142] You're going to get to all three.

[1143] You're going to be wealthy.

[1144] You're going to have a paid -for house, and you're going to get all three paid for.

[1145] But you just need to have a game plan laid out to do it.

[1146] and you decide, you called asking what the priorities are.

[1147] And Jeff, that may be the case.

[1148] Like, I don't know.

[1149] Yeah, you may look and be like, okay, daughter's taken care of, 20 ,000.

[1150] That's all she needs.

[1151] So before the next one gets to college.

[1152] And he's going to go to in -state school and have that.

[1153] He only needs that.

[1154] Okay, that's cover.

[1155] We can do that.

[1156] I mean, yeah, you can kind of map it out.

[1157] Map it out.

[1158] And you may be able to pay off the house in three years.

[1159] If you want to do that, but I wouldn't put the kid, make sure that you're not rocking over the edge of the cliff on the kids' college.

[1160] Because if I'm choosing between pay, off my house two years earlier versus paying cash for the kids college there's no choice here you pay off the kids college first before you pay off the house two years early you're going to get it paid off it's just a matter of when so it's okay but just make sure you've got that math laid out i mean if you told me a 200 000 in the bank right now and you're just going to write a check and pay off the house and say okay go ahead and do it because you can we know we can get to the college right that's the thing so but you don't and that's not where you are so map it out map it out map it out map it out all you got to do is be intentional here you're going to make good choices i can tell from talking to you for 10 minutes you're going to figure it out it's not like this it's just a math riddle of sorts and it's not a complicated one it's just flow it's the it's the you know here's september here's october i mean here's september here's january you know here's april three tuition payments or two tuition payments or whatever they are every year and here's dorm or not dorm and here's the school cost today and here's how much we've got to and here's what the state scholarships are.

[1161] And you just map all that in there.

[1162] And there's about six variables, and you can pull it together.

[1163] It's not going to be rocket science.

[1164] It's really not.

[1165] It doesn't even require a spreadsheet.

[1166] You can do it with the calculator on your phone and your yellow pad if you want to.

[1167] So it's not that hard.

[1168] But the good news, you're the secret sauce for figuring this out, not some formula or adherence to the baby steps or something like that.

[1169] You are the sauce, and you've got what it takes to do this.

[1170] You're going to do it.

[1171] I'm proud of you.

[1172] Very, very well done.

[1173] That's a good call, Rachel.

[1174] That's a good dad.

[1175] Jeff, you're a good dad.

[1176] He's a good dad.

[1177] Your kids better say, thanks, dad.

[1178] Yeah, they're going to look back later and say it.

[1179] They may not like where he lets him go to school, but oh, well, life goes on.

[1180] This is the Ramsey Show.

[1181] Rachel Cruz, Ramsey Personality is my co -host today.

[1182] Open phones at AAA 825 -5 -2 -2 -25.

[1183] You jump in.

[1184] We'll talk about your life and your money.

[1185] Thank you for.

[1186] joining us.

[1187] Joanna is with us in Montana.

[1188] Hi, Joanna.

[1189] Welcome to the Ramsey Show.

[1190] Hi.

[1191] Nice to be here.

[1192] Good to have you.

[1193] How can we help?

[1194] Yeah, so I want to build a home on my land, but I'm wondering if going with the construction loan is a good idea, especially since I have no credit because we're debt -free.

[1195] Okay.

[1196] What's your income?

[1197] Yeah, it's around 90K, and that's my husband.

[1198] I work at home.

[1199] What's he do?

[1200] Software.

[1201] He's a full -stack developer.

[1202] Okay, great.

[1203] Do you guys have any money saved, Joanna?

[1204] So we have three months worth of money saved.

[1205] We had a rough year last year, so it kind of depleted.

[1206] We had six months, and then now we just bought it back up to three after, uh, Having a rough year.

[1207] What's a rough year?

[1208] What happened?

[1209] He lost his job for a year, for a whole year, which was kind of really unexpected.

[1210] Does he do contract work?

[1211] No, no. He had a regular work as his salary.

[1212] Does he work from home?

[1213] He didn't at the time, but now he does.

[1214] Okay.

[1215] And where are you all living now?

[1216] Are you living on the land or what?

[1217] No, we found a temporary place.

[1218] So we bought a mobile house gutted because renting, it was hard to find rent, and renting was expensive.

[1219] And so my husband fixed up the whole thing while he wasn't working.

[1220] And so now we're, that's the reason why we're debt -free because now we're living in a three -bedroom, two -bath mobile house.

[1221] Is that on your farm?

[1222] We're just renting the lot.

[1223] Nope, we're renting the lot.

[1224] Oh, okay.

[1225] Yeah, unfortunately, we weren't able to move it to our lanes.

[1226] Okay, where are you going to, what are you going to spend on the house or building?

[1227] We were thinking around 300K, and we're thinking, yeah, about 1 ,500 square feet, not a huge house.

[1228] Mm -hmm, mm -hmm, okay.

[1229] But, yeah, with materials, everyone's telling us that, you know, it'll be more expensive.

[1230] Okay, in order to get a construction loan, you would not.

[1231] need a blueprint that has been appraised by an appraiser the bank that you're getting the construction loan mortgage company you're getting construction loan can help you with that and you will have to have a contractor building the property building the house okay they don't loan money to people who just think they might want to build a house and I've never done it before okay so a licensed contractor a blueprint an appraisal very detailed financial package and then you're you would qualify at your local credit union or bank for a construction loan even if you don't have a credit score if you've got a steady job you've got this piece of property that's paid for what's the property worth um more than a hundred k yeah okay so you got effectively a 25 % down payment in other words you'd have a 400 ,000 dollar deal if you put a 300 ,000 dollar house on a 100 ,000 dollar piece of ground right yeah and that'd be a 25 % equity position from day one.

[1232] So they'll take a lien against your farm, and then they will dole out the money to the contractor on a schedule, construction draws schedule based on completion points as the house goes up.

[1233] When the house is completed, you would get a permanent regular mortgage that pays off the construction loan.

[1234] That's called the takeout loan, and you will need to rearrange.

[1235] you'll again the mortgage company of the bank that'll help you with this they'll probably help you will get your permanent loan as well because you have to have what's called a takeout letter how are you going to take out this construction loan and you're going to take it out with a new permanent regular mortgage all of that lines up as dominoes and you can build now um how long is it going to take you to save 300 000 if you don't quite a few years yeah i mean if you save 50 a year of 90.

[1236] It's going to take you six years.

[1237] Yeah, it's true.

[1238] So that's the numbers that are running through my head.

[1239] Now, if you take that out, you get out of permanent construction loan, and then you viciously attack that permanent mortgage after you move in, and you pay it off in five or six years, that'd be wonderful, wouldn't it?

[1240] Yeah, it was.

[1241] As long as he's making 90 or more, and if he's in tech world, he should be able to continue to do that.

[1242] Yeah.

[1243] Rachel, when he's that, when through building a house.

[1244] It wasn't using a construction a long a while back, but it is a detailed process.

[1245] It's not something you just walk into and go, oh, I want to put a house over there.

[1246] Yeah, no, there's a work.

[1247] Yeah, you'll have a part -time job in that process, but it's fun.

[1248] But it's great, yeah, and I think it's exciting for you guys, and with the numbers and everything, you guys have worked hard to be debt -free and to be in the position you are.

[1249] And so, yeah, I'm making the step forward, I think is great.

[1250] Okay.

[1251] So do you, there's certainly you guys think it's a good time to build right now because not now but you're not ready now you don't have a blueprint you don't have a contractor you don't have an appraisal you don't have any of this lined up i mean you're going to you're going to break ground in next spring maybe in the fall but i would probably wait till spring and let some of these lumber prices and other things continue to calm down lumber's back down but some of the other stuff's not labor there's a serious shortage on still in most areas okay yeah I mean but you got a lot of work to do to get ready to break ground in the spring yeah well how do you know what order to do all these things like I did call a contractor then they can they can help you start walking through that uh get in touch with churchill mortgage and see if they can do a loan there in montana if they can't find your local credit union talk to them about a construction loan and a permanent mortgage they'll help you get the appraisal.

[1252] Contractor can help you get the blueprint.

[1253] But you're going to have to have all of that.

[1254] You can't just say, I think $1 ,500 and I think that's $3 ,000.

[1255] I heard, that's what I heard it costs.

[1256] That doesn't work for getting a loan.

[1257] They're not going to loan that person money that does that.

[1258] You've got to have like airtight business case for this whole process, whether you've got a credit score or not.

[1259] You've got to do all of that.

[1260] And the land helps her in that case because she owns, but for a lot of people.

[1261] And 100 % debt -free helps her.

[1262] Yes, yeah, yeah, yeah, absolutely.

[1263] But a lot of people that want to build don't have lands to build on.

[1264] You have to roll the land into the deal.

[1265] Yep.

[1266] And then that becomes harder.

[1267] Now you're talking about a down payment issue.

[1268] Right.

[1269] When you do all that.

[1270] And that rolls in as well.

[1271] So that is a question I've been getting quite a, at least on social media on Instagram, is yeah, for the new construction, home buying, is it a smart time to build a house?

[1272] There's a lot of people asking that.

[1273] I'm probably going to build one next spring, but I'm not going to.

[1274] You are?

[1275] Yeah, but not today.

[1276] Yeah.

[1277] I was going to ask you where.

[1278] I won't ask you on the air.

[1279] Well, I haven't figured that part out yet.

[1280] I didn't know.

[1281] But, well, I mean, we moved out.

[1282] We moved out of the big house.

[1283] And we're living in a nice home, but we had planned to build when we moved.

[1284] Yeah, I knew that.

[1285] But in the middle of all this craziness, we're not going to.

[1286] I thought y 'all were going to take, like, three years just to, like, do nothing.

[1287] Of course you or not.

[1288] Just announce it to you right here on the air.

[1289] So there you go.

[1290] but the um anyway that's exciting good good for you and the point is lumber has stabilized i think labor will smooth out by spring it's still there's still a labor shortage in general on construction so construction's a little bit wacky wonky still and i think it's going to be for a little while longer uh but i think most of the supply chain crap will be behind us and that stuff and i think we'll have a more normalized environment and i kind of think the economy's going to be a little slower and so builders are not going to be quite so snooty uh about like they're doing you a freaking or something, you know, which is the way they act right now, or particularly acted six months ago.

[1291] Because they can.

[1292] Yeah.

[1293] Because they can.

[1294] Like six months ago.

[1295] They're doing you a favor or something.

[1296] And I don't need them doing me a favor.

[1297] I need them building a house.

[1298] Oh, we know that, Dave.

[1299] We know that.

[1300] Oh, my goodness.

[1301] This is the Ramsey Show.

[1302] Rachel Cruz, Ramsey personality, number one bestselling author.

[1303] My daughter is my co -host today in the lobby of Ramsey Solutions on the Dead Free Stage.

[1304] Amber's with us.

[1305] Hi, Amber.

[1306] How are you?

[1307] Hi.

[1308] Great to be here.

[1309] Thank you guys.

[1310] Good to have you.

[1311] Where do you live?

[1312] Indianapolis, Indiana.

[1313] Welcome to Nashville.

[1314] And how much debt have you paid off?

[1315] 37 ,193 .15.

[1316] Phenomenal.

[1317] How long did this take?

[1318] 22 months.

[1319] Good for you.

[1320] And your range of income during that two years?

[1321] So started out net 52 and ended at 67.

[1322] Cool.

[1323] What do you do for living?

[1324] I got promoted.

[1325] And I'm currently a financial analyst manager now.

[1326] Well, congratulations.

[1327] Very cool.

[1328] But these numbers, you were killing it.

[1329] Yeah, that's, I mean, you were living on nothing, nothing, nothing, nothing.

[1330] What was the 37 ,000?

[1331] All student loan.

[1332] Oh, got rid old Sally Mae.

[1333] Yep, kicked her out of the house.

[1334] Love it.

[1335] Yep, she'd been a pet, unfortunately.

[1336] I started about 12 years ago, is really, I'd card debt and student loan debt.

[1337] and I was Davis for a while I went out to E and sorry my headphone sorry um and just didn't I didn't have the hope it just felt like a mountain of debt sorry I'm like losing my you're doing good it's all good okay I'm sorry what is what got you started then 22 months ago what jacked you up um so I finally just it kicked it in gear when I got accountability for my daughter sorry I Yeah, yeah.

[1338] It's falling off this back of her head.

[1339] Just move it up.

[1340] Yeah, there you go.

[1341] Good job.

[1342] Good job.

[1343] Okay.

[1344] Sorry.

[1345] Perfect.

[1346] No, you're great.

[1347] Okay.

[1348] So, and my biggest thing was making my daughter, like, being accountable to my daughter.

[1349] And I went finally, because I had a debt thermometer.

[1350] I kept staring at for, like, months that, like, I really would have get started.

[1351] But I finally made up debt chains because I'd seen a bunch of debt -free screams and they did the chains.

[1352] And I was like, you know what?

[1353] Let me get her involved.

[1354] And as soon as, like, I, We made the chains together, the lengths together, and I was looking in those big blue eyes.

[1355] I couldn't let her down.

[1356] So she's pretty tiny for all that big accountability.

[1357] How old is she?

[1358] She's four.

[1359] Four.

[1360] Okay, so a four -year -old whip you into shape.

[1361] Yep, yep.

[1362] I didn't want her to ever know what college loans felt like, the weight of those student loans ever.

[1363] It just got really, really old, didn't it?

[1364] Yeah.

[1365] I got tired.

[1366] Oh, amazing.

[1367] We did incredible.

[1368] So what did you do to get out of debt?

[1369] What was your process then?

[1370] So trying to think here.

[1371] What was my process?

[1372] Just, I mean, just the normal things getting at, like, getting a budget, staying on a budget, prioritizing, because there's so many, that's why I want to talk to Singram moms about.

[1373] There's a million distractions flexing your no muscle and then making that budget and knowing that there's hope.

[1374] Like, you really do have hope.

[1375] Like, it might be a mountain of debt.

[1376] It really can be.

[1377] but there's still hope.

[1378] And you don't, I, my personal story is I want to spend time with Meadow.

[1379] And so I didn't do a lot of side hustles, but I worked really hard on my career.

[1380] And I really tapped into Ken Coleman with making my purpose and really working on my career and just showing excellence in my workplace so that I could add value.

[1381] And I actually called in to the show asking if I should ask for a raise.

[1382] Yeah.

[1383] And you kind of kicked me in the butt, which is great.

[1384] And so I was...

[1385] I say yes, of course.

[1386] Yeah, yeah.

[1387] And you were like, well, how are you adding value?

[1388] Because, like, yes, you're getting responsibility.

[1389] But how are you really adding value?

[1390] Put yourself in the position of your boss.

[1391] And that really clicked for me. I was like, okay, what's my growth plan forward?

[1392] How can I add value?

[1393] And my boss is an amazing leader.

[1394] And I didn't use exactly all that, but I really kind of took some of those principles and add like okay how can how can i grow in this and how can i add value to where i'm currently at which i've been there for eight years so so how'd you get plugged into doing the rams you way of money um i think i had a friend back in college in grad school um that was into it and i just kind of got connected started listening on youtube that was what really like clicked for me when i started hearing the debt free screams john and mattie hearing their story yeah oh wow okay Yeah, yeah, so back then it was been a little bit ago, but yeah, that I finally got, like, really serious 22 months ago.

[1395] And if I heard the rumor right, you ended up in their financial peace class.

[1396] Close to, yes, I'm in Indiana, and so we've been friends, like, over, like virtually.

[1397] Oh, okay, just a virtual connection, but it wasn't a class.

[1398] Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah.

[1399] They've been super coordinators, obviously, all over the, of course, have led people, mentored people all over the world, so I didn't know exactly how it happened.

[1400] Good, very good.

[1401] Good for you guys.

[1402] So, Amber, for me, being the single mom that you are, that's a hard, that's a hard journey in general.

[1403] And then on top of that, doing a sacrificial work with your money to get out of debt.

[1404] So talk to all the single moms out there because I know it's, you guys have so much responsibility.

[1405] And I know you're already exhausted.

[1406] I can't even imagine.

[1407] And so what encouragement do you have for single moms out there that, that you did this?

[1408] You got yourself out of debt.

[1409] I mean, it's so impressive.

[1410] Yeah, I just thank you, Rachel.

[1411] It is, it's hard, but I want to talk to those single moms because I came out of an abusive marriage.

[1412] And it was really hard, but I had to work on myself.

[1413] And when I did that, one thing is I lost about 70 to 80 pounds.

[1414] Wow.

[1415] We're exercise and then getting financially fit too.

[1416] Wow.

[1417] And the biggest thing for me was hope.

[1418] Just hope that you can, you can, you believe in yourself, you work your butt off, but you believe in yourself that you really, in God, obviously, he's going to produce and give you favor, but really believe that you can make that income to make it happen, that you can make those sacrifices.

[1419] And those sacrifices are so worth it.

[1420] So yeah.

[1421] Yeah.

[1422] You are amazing.

[1423] I mean, 70, 80 pounds and $37 ,000 in 22 months making 52 to 67.

[1424] That's living on nothing.

[1425] I mean, when you set your mind to something, there ain't no stopping you, girl.

[1426] This is pretty impressive.

[1427] Very impressive.

[1428] I'm proud of you.

[1429] Very, very good stuff.

[1430] Yep.

[1431] I've really just, all the vision casting that you and Rachel and Ken and everybody on the personality team has really, and John Deloney have really helped me give that, that juice that I needed to keep making those decisions.

[1432] I'd hear you guys in my head saying, you know, just pushing me. on.

[1433] I remember a pivotal moment.

[1434] I was driving back.

[1435] I was commuting in my car an hour away.

[1436] And it was one of your leadership.

[1437] And you were talking about be the thoroughbred among the donkeys and just having that spirit of excellence.

[1438] And that's actually what promoted me like going from like 27 ,000 to like 50 at the time.

[1439] And just hearing that, it just really set a fire.

[1440] So every time I just use the YouTube and books to really fire me up and really just make progress.

[1441] Wow.

[1442] She's incredible.

[1443] Amber, for years.

[1444] You're killing it.

[1445] You're killing it, though.

[1446] Good stuff.

[1447] Hey, we've got the live and give bundle for you, the total money makeover book, the Baby Steps Millionaire's book and a one -year membership to Financial Peace University to use or to give away.

[1448] So let's bring Meadow up and introduce her to the world.

[1449] She's four years old, you said, right?

[1450] Yes.

[1451] Are you four years old?

[1452] and has she been practicing her debt -free scream have you been practicing ready to go all right good stuff she's beautiful well done very well done all right it's amber and meadow from indianapolis 37 ,000 paid off in 22 months making 52 to 67 Count it down.

[1453] Let's hear a debt -free scream.

[1454] Three, two, one.

[1455] What, death -free!

[1456] Woo!

[1457] The amount of emotional and spiritual transformation to come out of an abusive situation to go through that much transformation.

[1458] Amazing.

[1459] It's so empowering.

[1460] She can, I mean, the confidence, the confidence that she has.

[1461] Woo!

[1462] Love it!

[1463] It's amazing.

[1464] Man, this is the Ramsey Shep.

[1465] Our scripture of the day, Deuteronomy 2812, the Lord will open to you his good treasure, the heavens, to give the rain to your land in its season, and to bless all the work of your hand.

[1466] You shall lend to many nations, but you shall not borrow.

[1467] That's the blessings on the House of Israel, people of Israel the promise when they go into the promised land the curses you borrow the blessing is you are having rain on your land in its season Jim Henson said the only way the magic works is by hard work but hard work can be fun father father of the Muppets yes I didn't know that all right Stephanie is up Stephanie is in Minneapolis hi Stephanie Stephanie, how are you?

[1468] Hi, I'm doing great.

[1469] Thanks so much for taking my call.

[1470] Sure.

[1471] What's up?

[1472] So a little bit of context.

[1473] My husband and I are three years into marriage.

[1474] We did a Ramsey -ish thing for the past two years, but we have gotten really gazelle intense on Baby Step 2, and we are looking to be out of debt within the next eight or so month.

[1475] Congratulations.

[1476] Thanks.

[1477] So as we're doing this, of course, Murphy comes around.

[1478] And what we're facing right now is that my husband's mom is looking at about $50 ,000 in dental work that needs to be done.

[1479] All of her teeth have to be extracted.

[1480] She needs dentures or implants or something like that.

[1481] And she is looking to us for help.

[1482] So she called and asked my husband to fill out a loan application while she was at the dentist.

[1483] And he was like, I can't do this right now.

[1484] I'll call you back later.

[1485] So, of course, we talked and learned more that she's hoping that maybe we would, if we aren't willing to do that, we take out a home equity line of credit or maybe fill the house.

[1486] So as a little bit of background, my husband purchased this home for his mom a few years back before we got married.

[1487] But by purchase, I mean she paid the down payment and she has been giving him money to pay the mortgage.

[1488] But he had the credit score.

[1489] He had just graduated from college.

[1490] So they use his credit score, his name, for first -time home buyer.

[1491] And this debt has been weighing on him because if anything happens to her at any moment, then we are now responsible for that house as well.

[1492] You live in that house?

[1493] We do not live in that house.

[1494] Okay.

[1495] Where is that house?

[1496] That house is in Connecticut.

[1497] Oh, that's her house?

[1498] Yes.

[1499] Okay, so she's going to sell her house?

[1500] No, it's technically in his name.

[1501] So he could sell the house that she lives in and get rid of the debt and she would have the money for her dental out of the house that is hers.

[1502] It's morally hers, but it's in his name.

[1503] Right.

[1504] So then we don't understand fully the tax implications of selling the house and then giving her that money.

[1505] How much money is it?

[1506] The dental work would be.

[1507] how much is the house worth?

[1508] Oh, the house is worth about 350, $360 ,000.

[1509] Okay, what did they pay for it?

[1510] $235 ,000.

[1511] $360 ,000 and $235 ,000.

[1512] Was that the two numbers?

[1513] Yes.

[1514] And how long have they had it?

[1515] Probably about six years now.

[1516] Okay.

[1517] All right.

[1518] And he's not been depreciating it as a rental property on his taxes, has he?

[1519] Nope.

[1520] Okay.

[1521] Good.

[1522] And, okay, there may be a little bit of tax involved, but it won't be a ton, okay?

[1523] It'll be 15 % of the gain.

[1524] The gain would be 360 minus the selling expenses, which will probably be $30 ,000, so about $3 .30.

[1525] So you might have $100 ,000 in gain, and it might be $15 ,000 in taxes.

[1526] So I would sell the house and pay the taxes and give her the money.

[1527] Okay.

[1528] And if there a gift tax on giving her that money?

[1529] Yeah, you're going to have to manipulate this because this was a dumb, bad deal.

[1530] It's going to take a little bit of work to get out of it.

[1531] But no, we're not borrowing money.

[1532] If she wants to sell her house, by the way, she needs to get a second and third opinion.

[1533] I've been doing financial coaching a long time.

[1534] I have never yet heard of a $50 ,000 dental operation, not once, unless there was some kind of car accident.

[1535] Well, if they're taking all of her teeth out, you're going to put in veneer.

[1536] or something.

[1537] I don't care.

[1538] I really want to get a second and maybe a third opinion.

[1539] Okay.

[1540] Okay.

[1541] On this.

[1542] In other words, if you're going to do a $50 ,000 remodel, you get three bids.

[1543] The same thing here, okay, because I'm suspect.

[1544] Okay.

[1545] So, yeah, I think if mom wants to sell the house that's hers, we got to figure out what the tax implications are and that money has to be held back and the rest of the money she can have and use for her dental.

[1546] Okay.

[1547] But no, I'm not going to borrow money, no. And she doesn't, she, and don't put a he lock on the house, obviously.

[1548] No, not in your name.

[1549] And you already got enough dead in your name.

[1550] Exactly.

[1551] So she's now a renter with good teeth.

[1552] Okay.

[1553] Gotcha.

[1554] Thank you so much.

[1555] Oh, man. I'm sorry.

[1556] What a mess.

[1557] Let me tell you, though, this is a really clean break to something that's going to get worse year by year.

[1558] This is going to go sideways at some point because this lady doesn't handle money well.

[1559] and he's propped her up with this purchase, and it's going to go sideways someday.

[1560] So this is a good time for it to go sideways and get it cleaned up and get his name off of all of her debt, the death that's associated with her.

[1561] Okay.

[1562] So the best thing is to sell this house, let her take the money and just keep whatever we would need to keep her.

[1563] This house, meaning the one she lives in that's in your husband's name.

[1564] Right.

[1565] Yeah, but get to get tax.

[1566] You've got two types of taxes you have to consider, like you said, gift tax is there a way to work around that and then you also have to consider the capital gains tax on it capital gains tax probably going to be around 10 or 15 000 bucks on this based on what what you told me something like that and there if you can you can probably move around some stuff on the gift tax and not have any but you probably need to do a how much is gift tax what's the gyrations it's ridiculous if you get into it but um what is the thing this year i can't even remember Let me get my cheat sheet out.

[1567] It's fine.

[1568] 16 ,000 and 22.

[1569] Okay.

[1570] So it's probably up a little bit from that.

[1571] So it's probably 20 ,000.

[1572] So, you know, that much of it's not going to be taxable, but the rest of it, they're going to have to do something with.

[1573] Yeah.

[1574] And I don't know.

[1575] You're going to, you need tax advice and you need a realtor.

[1576] But I think this whole story is going to change when you tell mom the house is sold.

[1577] Because right now all she's going to do is borrow.

[1578] and now she's got to move so I think this is going to change I bet you the whole thing blows up but I'm just but I'm trying to stir up trouble because trouble needs to be stirred up here because it's going to come sooner or later and we might as well go ahead and get it out of the way because yeah you don't have a money problem Stephanie you've got a mother -in -law problem and I'm trying to help you with that so get her with good clear boundaries yep and in that situation like she said you graduated college had a good credit score mom needs a house house I'll take it out in my name right all the your husband this stuff this stuff happens your husband didn't tell his mother no when he should have but he wouldn't know too though that's what i'm saying is a lot of this stuff though this is where it is it's it's the it's the good intention yeah it makes sense mom can't get the house but i can put it in my name she can pay me like it all sounds good until you're married exactly and also it's that's why you have to be careful with money and the good intention with family members and friends so don't put your name on other people's debt ever and if you're going to loan if you want to if someone's asking for a loan you either give it or say no but this whole like attached your name to my stuff and my money think that it just gets weird it gets weird so remember clean everything needs to be clean i guess i'm going to get hate mail from dentists but that's okay i'm trying to get no i'm trying to get more of them business i think dental stuff is expensive though Well, yeah, and sometimes.

[1579] And, yeah, check it, get a bid.

[1580] Yes.

[1581] Get another opinion.

[1582] It's not a bid.

[1583] We're not getting, we're not doing drywall, but don't get a bit.

[1584] But, yeah.

[1585] Let's get several opinions and estimates.

[1586] And is there other ways to solve this issue?

[1587] It's the problem.

[1588] Yep.

[1589] Because this sounds like a complete reconstruction.

[1590] That's what she said.

[1591] Like, oh, man, nasty.

[1592] Extracting everything and a whole new set of tea.

[1593] Young, young, young, young, young.

[1594] people you 18 year olds 17 year olds 22 year olds parents come to you asking and do stuff like this don't i love you mom no i love you mom no and by the way no is a complete freaking sentence there you go i love you dad no it's sometimes the dads yeah well this was mom where you're i know i know come on that puts this hour of the rameses show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace.

[1595] Christ Jesus.

[1596] Hey, it's Rachel Cruz, co -hosts on The Ramsey Show.

[1597] If you want to do your debt -free screen live on the show, visit ramsysolutions .com slash debt -free screen.

[1598] We'd love for you to come to Nashville and tell Dave your story.

[1599] That's ramsonsonsons .com slash debt -free screen.

[1600] Hey, folks, Dave here.

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