Being an Adult Means Delaying Gratification
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Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, and I'm joined by the one, the only, my Smart Money Happy Hour co-host, Rachel Cruz. Good to be here, George. Always is. We usually don't host a whole bunch together.

But when we get to, it's a real treat. It's a special time. Y'all are here for it. So we haven't got to hang out in a while, Rachel. We're taking calls from people all over the world now. We've gone international officially. So if you want to join us, call 888-825-5225. We'll answer your questions. We'll give you our best advice. Sometimes it... We've been known to hurt feelings. We've been known to tell people to sell the horse. This is the kind of stuff that happens on this show. We...

You're in there. You're an accomplice, Rachel. I will give you advice in a kind, nice way. George, we'll see. You never know. You never know. Well, congrats, Rachel, on your new kids book. It's been fun. Oh, thank you. I'm glad for what I have. Yes. I read it to Mia the other day. You did. She doesn't know because she's five months old, but she enjoyed it. That's good. Hey, reading even to the young ones is important, George. I've heard that. I saw my wife sent me the Instagram reel. Thank you. Jonathan is up first in Raleigh, North Carolina. Jonathan, welcome to the show.

Hey, thanks for having me, guys. Absolutely. How can we help? So I am a long time familiar with Dave Ramsey. Just kind of started getting into it more recently the last year. But I am going, I've done the baby steps, have been debt free, and then got married and other things. So recently I've done the

attempt to get my wife to budget with me. So I got her to watch the financial piece that was gifted to me because I'm a veteran. And I got her to watch the first episode. And as soon as I brought up the budget, she shut it down. She was mad. Yeah. So I'm not sure if it's something more deep seated going on, but we're not really financially hurting, but we are losing a lot of money just to waste. Sure. Yeah.

Okay, so Jonathan, why? Why was she mad? What was she saying in her anger? That she didn't want to have any constraints. She didn't want me to control her spending. I think she didn't really want me to know what she was spending on. Okay. Do you guys share an account together?

We do, and that was a point of contention about 13 years ago when we got married. But we did join the accounts, and I eliminated her. She had college debt and other car loans and credit cards and all that. And so we've purged all that since and joined accounts. And was she on board with that, with getting out of debt? Yes. Okay. So it's the budgeting piece for her. And is she the spender out of both of you? I don't know.

We're probably both equally spendy. Yeah. Do you, Jonathan, if you were to be honest with us, have you had any history of maybe a snide remark or two with what she has spent on? Have you been sarcastic with it or do you bring it up in a way that she doesn't like? I'm just curious that dynamic. Yeah.

Well, when we got together, she was a lot fancier than me. So she would like, you know, finer things and, you know, Louis Vuitton and, you know, stuff like that. So I'm sure I possibly have thrown out a, wow, that's a lot of money for something, you know. Right, right, right.

Okay. Well, I think one of the biggest, you know, breakdowns that I'm hearing is in a perfect world, you know, you both would agree on, yeah, here's what we're going to spend. You know, here's electricity. Here's our cable. Here's like our utilities, you know, the basic stuff of life. And then us both say, okay, you know, here's an amount of money per month that we agree on together that Jonathan gets that.

that your wife gets and together you both say it doesn't have to be an equal amount of money, right? I mean, she could say, no, I actually on average spend X amount. And if you guys can afford that and it's not constraining other parts of the budget to be able to say, yes, she can. But I think it's the idea that you guys are agreeing on where she's spending or I'm sorry, on how much she is spending. Because to me, the amount of

I think it's the first step. And then the where would be the second step. But I don't think the where matters as much. Like Winston probably thinks I'm crazy how much I get my nails done. Like, do you know what I mean? Like the where is like, okay. But I think it's the amount that you guys agree and you're on the same team to say, okay, here's what our overall money looks like. And within this, you know, you're not her dad that's going to be ruling over her to tell her where she can spend her money. But we both agree like this is a reasonable amount for us to spend on personal things or anything.

Even out to eat. Yeah. Yeah. And Jonathan, have you kind of seek to understand when you go, hey, what's what's behind this? I feel like, you know, there was some some high emotion here when you shut down there. I just want to know, like, does this come from somewhere? Was there anything in your past or, you know, why do you feel like this budget is going to control us? All I'm asking is that we pre decide how we spend our paychecks.

And we can decide that you have a lot of money for fun. I think she sees like we're going to have a life of sacrifice and rice and beans and couponing for the rest of your days. Is that how she's feeling? I don't know that it's that. And because, like I said, when I brought the budget to her, she wouldn't even look at it. So it's not that. What kind of budget did you make? Was this Excel spreadsheet? I made a zero balance or zero dollar budget, whatever it is, at the end.

I'm trying to do the thing that y'all did. Did you use like every dollar of the app or was it an Excel spreadsheet? Yeah. Every dollar. Good. Sometimes, you know, if someone shows me an Excel spreadsheet, I shut down. She wouldn't look at the numbers at all. Nothing. And yeah, did you ask why?

Well, our communication is sometimes strained and limited also. Yeah, yeah. So, you know, whenever it's something that's uncomfortable or, you know, not easy, just glazed over the top, something more in-depth, it's kind of like, mm-mm, I don't want to do that. Yeah, she doesn't go there. Yeah, it feels vulnerable. It feels scary for whatever reason. So, Jonathan, I think that's...

That's the issue, right? And we usually say money issues within marriage are rarely the actual money issue. To your point, it's not like she was like, no, I need $300 a month, not $250. It's the communication.

Something in her does not feel okay to go there for whatever reason. And George is right. It's usually it comes from somewhere. It stems from somewhere. And for you guys to get on the same page, because if you can understand and you guys communicate more effectively in general,

that's going to help you effectively communicate with the money. That's going to help you obviously communicate better in general. But I mean, to me, that's where you bring in a third party. Have you guys ever been to marriage counseling? No, and I suggest it. I'm usually the instigator. I'm usually trying. And because I've taken care of everything since the beginning,

I maybe have a little bit of anxiety and things to bring up topics to her because every time I try to bring it up to her, it's just shut down. Hmm.

And so there may be some animosity and all that. That's what we need to get to the bottom of before we start talking about money goals. We need to learn what's behind all this. How do we communicate well? And I'm going to send you some tools to help. Number one is a copy of my book, Breaking Free from Broke. I want you guys to read chapter 10. It's called Budgeting is Freedom.

I think it'll show her a different way. And I'm going to send you a copy of Rachel's book, Know Yourself, Know Your Money. It's going to really help her understand why she thinks the way she thinks around money and maybe unlock some really cool things and conversations. So we're wishing you the best, Jonathan. Hang on the line and Skylar will get you those books. This is The Ramsey Show.

This show is sponsored by BetterHelp. Hey good folks, the back-to-school madness is upon us. It's hitting us right now. We got travel and work and all these forms to fill out now and sports to travel to and on and on. My family's schedule is so packed and we haven't even begun talking about things like exercise and date nights and counseling and church and home projects. And those are the things that make our life even worth living.

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Call my friends at BetterHelp. Visit betterhelp.com slash DELONI today for 10% off your first month. That's betterhelp, H-E-L-P dot com slash DELONI. Welcome back to the Ramsey Show. I'm George Campbell joined by Rachel Cruz. If you want to join us, we've got a brand new event coming up in May on May 10th and 11th right here in Nashville, Tennessee. It's called Total Money Makeover Weekend.

And whether you've been listening to us for decades or this is your first time listening, we want you to get a little pep in your step when it comes to your money goals. And one weekend, you're going to get a crash course on everything we teach about money with brand new content from all of the Ramsey personalities. Rachel Cruz will be there, myself, Dave Ramsey, Dr. John Deloney, Jade Warshaw, Ken Coleman.

And there's going to be live Q&As throughout the weekend. It's going to be interactive. We have a live Smart Money Happy Hour on Friday night. Looking forward to that. And this is a really fun weekend. We don't do events boring. And so this is the one to bring that spouse to, the reluctant friend. If you want to come solo, you're welcome. All are welcome here. Early bird tickets start at just $99 for a limited time. So if you want the best deal, go grab your tickets now.

They will sell out. RamseySolutions.com slash events. Put it in the budget and we'll see you guys May 10th and 11th right here at the Ramsey headquarters. It's going to be fun. All right. Open phones at 888-825-5225. Kiera is in Buffalo, New York. What's going on? Hi. Thank you so much for taking my call. Sure. So I am 24 and I have over a half a million dollars in debt. Wow. Is that consumer debt or does that include a mortgage?

So that's with my mortgage and my car loan. Okay. That makes me at least breathe a little easier. So let's walk through the consumer debt. How much consumer debt do you have? What are the amounts? None. None. Oh, so it's just your mortgage. Yeah. My mortgage is 490,000. What's the rest?

And then my car, I owe $54,000 less on it. Oh, okay. So we would label anything non-mortgage as consumer debt, if that helps. Oh, okay. Yeah. Okay, so you have $54,000 on the car. Anything else? No. And then $490,000 on the mortgage. How much do you make a year? I'm self-employed, so it kind of varies some years. My last taxes, it was $250,000. Awesome. At $24,000, that's amazing. What do you do?

I'm a reseller. All right. And what's your question today? So my question is, I have some money in the bank. I have some in savings. I have a retirement account. But my biggest question is the car payment kind of is weighing heavy on me.

And I wanted to get your opinion on where like my money should be going kind of. So I have in a high yield savings account about 46,000. So I was wondering, I kind of wanted to get rid of my car. Like after listening to you guys, I wish I would have listened sooner, but I don't think I need this luxury car. And it was kind of an impulse decision just to buy it.

So I was wondering if I should take some of this money and get rid of my car. As in sell it and downgrade to a different car with cash? Well, I'm engaged. So we have two cars right now and we would just be sharing the one car. Is that a reasonable lifestyle switch for you, Kira, to just go down to one car? Yes. Okay. How much could you sell it for?

So that's the thing that is unfortunate because like I'm, you know, the car, I got different quotes and stuff. So I owe 54 left and my offer was 37,000. Where was this offer from?

Um, well, that was CarMax. I've tried to sell it like personally, like online. And I'm going into a dealership on Saturday to do some kind of like auction thing to see if they can get maybe even a little bit more. My guess is private party is going to be your best bet to sell this for top dollar versus going to a dealership. Of course, they're going to lowball you because they're going to sell it for that higher amount. Yeah, what kind of car is it?

It's a BMW X5. Okay. What year is it? 2019. Okay. Okay.

You know, I mean, yeah. I mean, if I were you, if you're honest about yourself and your day-to-day life and how that looks, that you really don't feel like you need a car, like if that really is true, because you make plenty of money, P.S. You can afford to get another car, maybe a different car, and you can do something different, but don't feel like not having a car is your only option. I just want to give you that window that you have great money saved. If you needed to get a car, you could, okay? So just know that. And if you wanted to pay off this car, you could. Yes, absolutely.

That's right. And just keep it. Yeah, but if you don't want it and you're like, it's just too nice, I don't need it, you are upside down. So what I would try to do almost is just say, hey, I want to try to get 40 for it, a little bit more than what was quoted in a private selling situation is probably the way you're going to do that. And then you're going to have to say, okay, I got 14,000 of my own money that I'm going to have to just finish off the loan. And take that out of your high-yield savings account. Yeah, we just call that stupid tax when we do things that we're like, dang it.

and just take it out of your high yield and then start from there. And if you want a different car or something down the road, I would use that money saved that you have to get a great used car that you want. So when are you guys going to get married? Hopefully next year. Okay, so not a date. Are you guys going to live in this house that you have a mortgage on right now?

Yes. You are? Okay. Is he coming into the marriage with any real estate? Wait, what do you mean by that question? Does he own a home too? Will he be selling? No. This is our home. We bought it together last year. Okay. Okay.

The only reason why this car is weighing so heavy on me is because I know this is my only debt, but I don't mean to put a business out there, but he has a lot of debt. We are trying to clear his debt right now. You're not trying to pay off his debt, though, right? Okay. So one thing you have to realize...

Kira is, yes, I understand that you guys are engaged. I believe we'll get married next year. But you guys legally, you're not married. You're roommates. I mean, from a legal standpoint. You realize that, right? I know relationally and love and future plans, all the things. So with your money, the wisest thing you can do, which sounds harsh, I know, in your situation because you guys have already bought a house together. You keep things separate financially. We have talked to so many people, Kira, who have used their money to pay off their

someone's debts and they start working together and suddenly the wedding next year doesn't happen and you are out all this money and so keep protecting yourself in that sense is necessary during this time and because you have no legal contract i mean there's there's nothing legally binding you guys together if you were married that's a different story um

But from this standpoint, I would not be paying on his debt. So you need to be focused on you. He needs to be focused on him. And then you have to say, yeah, when we get married, we do become one. All of this, then we can work as a team. But I would not be doing that until then. Until you say I do and you sign that marriage license and there's a ring on the finger, you guys are not, I would not work together as one when it comes to the money. Now you guys can be encouraging and all that, but I would have very separate opinions

financial lives at this point. Okay, that makes sense. And I should have mentioned the car would be his that we'd be using, so we'd be paying on his loan. So there's a loan on his car? Yeah. What's left on that? We would be splitting the payment. I actually just asked him. He didn't answer, but I think it's around like $40,000. I wouldn't do any of this. I wouldn't do that. Just go get your own car with cash. Don't pay on a car that you don't even own. Yeah, that's not even in your name. You have no...

The point to get rid of this car is to get rid of the payment, and you're just going to take on another payment, but less. With one car. Right. Yeah. Yeah, I wouldn't do that. Honestly, if I were you, I would get rid of this car because I think it's a good exercise for you. You're 24. You're like, I made a crazy purchase. I shouldn't have bought it. And if I were you, I would go get, you know, a $10,000 whatever, whatever, go drive that. He needs to work on his stuff. I mean, like, his debts...

His income, all of that needs to be his. This does not need to be your responsibility. Because what concerns me a little bit, and I could be reading into it, is that you're so responsible. You're obviously extremely bright. You're making $250,000 as a 24-year-old. I mean, like, you're a go-getter, okay? And I'm not saying he isn't, but in some cases, what we find is that he gets the benefit and reaps the benefit of all the greatness that you have, but then you get no benefit from him from a legal standpoint because you're not married. So...

I would be very cautious in all of that sharing and buying a house together too. This is for the listener out there. Do not put both of your names on a deed of a house if you are not legally married. It gets you in a mess, you guys. It'll get you in a mess. These days, it's not if your identity gets stolen, it's when. And the only ID theft protection plan I have ever recommended is from Zander Insurance. It helps real people with real life situations. Like,

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This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. The number to call is 888-825-5225. The Ramsey Show question of the day is brought to you by Neighborly, your hub for home services. From repairs and maintenance to home improvement projects, winter can bring some challenges for homeowners, and you need Neighborly's helpful winter checklist, and it's free. You can download it for free at neighborly.com slash Ramsey.

All right. This one is from Jenny in South Carolina. My husband and I are on baby step two. We have an SUV that has paid off and my husband wants to finance a second vehicle. It's kind of the opposite of baby step two there, but he has $12,000 to put towards the purchase. I thought he was looking in the range of 35 to 45,000, but he now wants one that costs $90,000.

He only wants to use the truck for eight months and then take advantage of the buyback program from the dealership and get a cheaper vehicle. Then we can't afford an $800 car payment for the next eight months. And I don't trust the buyback buyback program.

How do I make him see that the numbers just don't work to finance a vehicle right now? I have asked him to find a vehicle that we can afford with the $12,000 or he can use our SUV and I will drive an older vehicle. This argument has been going on for six months and I don't know how much more our marriage can take. The stress has gotten the worse and I

I'm currently between jobs and my income is very low right now. Goodness. Sounds like a lot, Jenny. It sounds like he is coping with a marriage on the rocks. She's unemployed. They're between incomes. And he's like, I'm going to go get a giant truck to make me feel better about all of this. I just want some kind of comfort in my life right now because everything else seems to be chaotic. Yeah. This man is reverting to a child. He's like Benjamin Buttoning, Rachel, real time with his finances. Right in front of our eyes.

She's right. I mean, if you need some confirmation, yes. Oh, yeah. You have $12,000 to purchase a car. But Jenny, I think you're asking the wrong question. She says, how do I make them see that the numbers just don't work? It's not about the numbers. It's not the numbers. It's the fact that you guys are obviously not on the same page. You're trying to do a program and get out of debt while he's adding on debt. Like you're literally counteracting each other. It doesn't make sense. And so what ends up happening is exactly what is happening, sadly, is it causes a lot of stress. It causes a lot of fights because you're both...

not walking the same path you're you're running into each other and so that's going to cause tension and so for you guys I would just pan way back and say okay as our family what do we want money to look like what what does this look like for us and if you guys can't get on the same page with that value system then yeah I mean I think we said in an earlier call but it's true I'm like

That means you're probably not on the same page on a lot of things in life. And so working and finding that unity, and even if that's bringing in a marriage counselor or a therapist,

to get you guys back on that same page. And always know with marriage, you guys, that there's always going to be opposites. Okay, so there's always going to be one person that always kind of wants the bougier thing, probably the one that's like, eh, we're fine here. Or one's more of a spender, one's more of a saver. Like, you're always going to have these different money personalities in a marriage. So we're not saying you have to be uniformed and just identical robots together. But the overall big picture is that you want to be walking the same path. And

And that usually comes down to value system, a value system conversation that obviously you guys are on separate pages. So I think that looking at that as the issue is where I would start. Yeah, this is so tough because this marriage is only it's only going to go grow further apart if he makes this decision. And it's going to be a harder decision to undo. And it's going to cause so much resentment on Jenny's side of like.

She does not gonna feel like she has a vote in this marriage if he goes and does this behind her back in front of her back No matter how he does it it's gonna screw things up even more So she needs to have to come to Jesus meeting with him and go listen. I don't feel safe I'm trying to do this plan. This marriage is not going well We need to get on the same page. You need to act like an adult and have some delayed gratification Yeah, and that means one day you can have that truck when we can pay for it in cash when we're not in debt and

But right now is not the time to go make more terrible decisions. Yeah, because again, take the money piece out of this, you guys. It's just the fact of, it's just disrespect, right? Like if one spouse is pleading with another on something,

You would listen to that, right? What would you do if Winston went out and financed a $90,000 truck while you guys were in debt actively trying to get out? Well, that's the thing is I'm like, yeah, we can talk about the money piece about how that pulls you backwards and all of that, but it's a complete respect thing. I'm like, there's a level that you're obviously not being heard in your money, probably not in other parts of your marriage. And Jenny, like, I don't, you know, I mean, it sounds like such a desperate situation, which is so sad and it's so difficult. And there's a lot of couples that are walking this road right now

But it's so much more than just the money decision. It's the fact that he's not hearing her, respecting her. And at least like, I'm like, it's one thing if he's like, no, Jenny, I think you're wrong. But you know what? I'll come down, at least go to $35,000. There's zero compromise here. It's just a complete like middle finger is what it feels like. Like, I'm going to go do whatever I want. And...

That's not a marriage. That's not a healthy marriage. I'm not here to rag on the truck bros, Rachel, because I get a lot of flack for that. But there's something about... George's opinion on trucks. There's something... I'm not going to even call men in trucks. I'm going to say boys in trucks. Because men in trucks I have no problem with. Winston Cruz has an awesome truck. I got to ride in it. That thing is awesome. That's right. Boys in trucks, and by boys I mean grown men who are financing $90,000 trucks to cope. That's not okay. And I will fight against that every single day.

Fight the good fight, George. That's what I'm doing in Winston's Tundra. The Lord's calling on your life. Rachel, I had to crawl into Winston's Tundra. It was so high up. I was like, is there a ladder you can throw down for me? Stop. It's not a raised truck. It's a regular truck, George. Truck. All right. Jillian is up next in Salt Lake City. Jillian, welcome to the Ramsey Show.

Hi. What's going on? So we've gotten ourselves into a situation and we're wondering what's the best way to get out of it. So we are...

Looking to see if it makes sense to pull 401k to pay off a HELOC. How old are you? I just turned 40 on Saturday. Happy birthday. Happy big birthday. That's a big milestone. And also, please never do this. Okay, I know. Happy birthday. Don't do it. I understand you've got this big HELOC and you're looking for some kind of shortcut to go, how do we get out of this HELOC?

But what you're doing is robbing your future self with penalties and fees on top of that. I would just, Oh, I would just treat it as a baby step six situation. Jillian, I would, I would, because how much do you owe on your house mortgage wise? So mortgage wise, we're like four 50, which it's only two and a half percent, but the HELOC is like eight and a half percent. The payment is chilling us. Yeah. Yeah. How much do you guys make a year? Um,

um which sounds like a lot of like uh it is a lot around 350 000 okay yep it is a lot but when you're drowning in payments all over the place it doesn't feel like a lot yeah we're we're cutting back as much as we can and obviously we need to make changes what was the HELOC for uh a house remodel and a pool as one does it's the american way okay any other debt

We have a credit card. I have a business that I just started, so I have like $18,000 on a credit card. But other than that, we have our cars are paid off. We were debt-free until this pool. My husband makes large commission checks, and we made about $170,000 more than we're making now until we knew that we would get these commissions and be able to pay this off. And the market turned in his... in his... you know, where he works, and bonuses are not coming. And so we...

And then the HELOC payment doubled with interest. This is like Clark Griswold in real life. You guys lived out the Christmas vacation story. Did you learn nothing from that movie? Right? You thought, this is a fictional movie. It doesn't happen in real life. And, Jillian, this is a really good lesson for people. This is not to continue to pick on your situation by any means, but this happens all the time, and I can do this mentally and emotionally. You spend the money...

before you get the money, right? You're like, oh, oh my gosh, we're going to make what? Oh, this is going so well. This year we're for sure going to make and you already spend it, right? Whether in your emotions or actually. It's kind of the concept of debt is spending money you don't have and then hoping you have it later. Yeah, but it's different when you feel like, no, I'm supposed to have $170,000 bonus, you know, and then. Yeah.

You don't have it. So, yeah, I think it's just a, I think it's a pain point, Jillian, for you guys. So I would just, I would, I would pay off, I would pay off your, is it the car, the 18,000? Credit card. Credit card. I'm sorry for the business. Yep. I would, I would focus you guys to pay that off. Get that out. Okay. Cause that's going to just free up some mental space because I would then move forward. Do you guys have savings at all? No. Okay. So I would save up three to six months of expenses after you pay off this card and

And then I would be funding retirements, you know, look at the kids' college stuff. But I would attack this HELOC first and then your mortgage. But I would go ahead and start the baby steps. But I would use this HELOC as kind of a baby step 6A and then your mortgage is 6B. But I would put it there.

And making $350, Jillian, you guys are going to get out of this faster than you think, but it's going to take some deep sacrifice. Y'all have been living La Vida Loca, and now you're Broca. So you're going to get out of it. We have hope in you and faith, so call us back when you're debt-free. We'll celebrate with you, and happy belated birthday. This is The Ramsey Show.

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I'm George Campbell, joined by Rachel Cruz. This is The Ramsey Show. And if you enjoy this show, you should check out Smart Money Happy Hour, co-hosted by myself and Rachel Cruz. We have a blast. And if you need to send someone the show that's not too heavy, too intense, Smart Money Happy Hour is a breath of fresh air. There's lots of laughs. And we sneakily teach you money things.

But you don't even know it. You don't even know. It's like a, what? Our writer Savannah said she was at the nail salon and some Gen Z girls were like, hey, you know that Dave guy? She's like, yeah. She's like, well, his daughter has a really cool podcast. I love it. We're talking about Smart Money Happy Hour at the nail salon. We talk about current events, pop culture, and money. Rachel's like the cool sister. It's the best. And I'm the cool uncle, I guess. Uncle George. That's right. All right. Gabriela is up next in McAllen, Texas. Gabriela, what's going on?

Hi, guys. Thank you for taking my call. So my question is, my ex-boyfriend left me with an RV payment and I do not want to pay it. Oh, my gosh. So what happened? You guys. So he took it to go work and could no longer afford the payment on it and left it to me last weekend and was like, here you go. Here's the RV with the payment. What do you mean left it to you? Whose name is on the loan?

It is under my name. We were together for 10 years. I got it for him. So he had to go work in the oil field. And we split up about a year ago and he can't afford it anymore. So he brought it back to me and I'm left with it. Oh, no. Shoot. Well, Gabrielle, you'll never do that again, will you? Yeah.

I've learned my lesson. Oh, no. You know, we talked to somebody earlier in the hour and her and her boyfriend, well, fiance, they don't really have a date. I don't think a wedding date we asked. But yeah, both their houses, their names are on the deed of the house. And I just thought, oh, no, no, no, no.

So you're a great, I guess, poster child of what can happen when you sign on to debt and buy things with people you're not married to. And I'm so sorry. I mean, on top of the hurt from this long-term relationship being over. And it was a year ago, though. So now you're like, well, crap. What's left on the RV loan and what is it worth? The balance left is around $48,000.

And looking it up, it's worth around $30,000. So you're $18,000 underwater? Basically. For some reason, they took, like, the prices in RVs were just expensive when I bought it and have dropped.

Well, that's been the theme on the show for the last week or month is everyone is underwater on vehicles and things with wheels because it was really expensive and they had good intentions and then the market turned and now everyone's underwater. So there's only two ways to go about this. Number one is you need to come up with the $18,000 in cash in order to sell it and pay off the loan. Or number two, you go get a personal loan for the difference of that $18,000 to get out from under this. Do you have any money?

Uh, yeah, I have around $10,000 in savings. Good. And any other debt? Well, yes, I have a mortgage. I pay my vehicle, but my vehicle is actually a lease. And I hadn't learned my lesson at the time, but I have a bedroom set under my name that somebody else owes about $3,000 of that. Really no credit card debt. Somebody else owes? Yes.

yes it's under my name so technically i owe it but and are they paying are they paying on it or you're yes and no oh gosh is this family is that a friend that you like said hey it's family it's a family member oh gosh i think you need to stop being generous with money you don't have gabriella that's what's been happening it's a theme in your life you sound like such a sweet wonderful person and now how much do you make a year

So this year I made, so I'm actually a nurse and with COVID, I made really good money 2022, kind of gone down some. So this year I made $1,000.

133, but it will probably drop again this year because there's no more COVID crisis, so that's just how it works. Not if I can help it. You're going to be out there busting your tail over time doing Uber Eats and DoorDash and Instacart, whatever it takes. You're climbing out of this thing, and I think you're not scared of work, which is great. And we got to start with the smallest debt here, which it sounds like is this bedroom set.

Yeah. I think you just pay it off and if they ever pay you any more for it, great. You can apply that to the next one. Don't expect it. But don't wait around. Yeah, be done with it. Okay. Even if it's zero interest, I should pay that one off first? Especially if it's zero interest. All of it. Okay. We're done with payments. We're done with debt. You make too much, you're too successful, and you're too smart to ever do this stuff again, regardless of the interest rate.

Does that track, Gabriela? Are you with us on this? Yes. We are Team Gabriela. And so we want you to win. And that's going to mean you have, you know, if you count up all your debt and if you want to get out of the lease, you can look at the early buyout amount and see if that's going to be worth it for you to do now. Otherwise, you turn the car in and then you need to go get another car. But don't just get another lease. Okay. It's the most expensive way to get a vehicle. And dealerships love it because they make the most money off of these leases.

Okay, so no more leasing. No more leasing. Buy your next car with cash, which is going to be tough. When is the lease up? In about two more years. Okay. Yeah, I would look at the early buyout. I would just kind of do some research in that. But then in the meantime, between now and two years, be saving some cash, knowing that you're going to have to replace this car. But I would take, yeah, this $10,000, Gabriella, I would pay off the bedroom set,

And then you're looking at the 18 that you'll probably have to take a loan out for for the remainder of that RV after you sell it. Okay. So I shouldn't give it back to the bank and then let them sell it and then me pay the difference? You're saying to have the RV repossessed? Yes. I wouldn't do that. No, I wouldn't do that because I would go on your credit. Yeah, I would just find the private sale.

Okay. List it, sell it yourself, get as much as you can for it, obviously. And then, yeah, you'll have to have a loan for the difference. And then you'll be working your way out of that. Oh, okay. Yeah.

I wish we had better news. The good news is you make great money. You make six figures. We've seen bigger, scarier numbers than this, but it's the hurt and shame and guilt and baggage and, oh my gosh, I'm so stupid. You got to just pick yourself up and go, listen, that doesn't define me. I'm going to make different decisions. And Gabriella, is it just you? Are you single kids? Yes, it's just me and my two girls. Okay, so you do have two girls. Okay, how old are they?

I have a nine-year-old and a three-year-old. Okay, so sweet. That's so great. Okay, so what you're probably going to be doing, I mean, where you can work extra and even if it's, you know, at night online or something, like if there's like something that you can do to find that extra money. But with this $133,000, I mean, I would act like I would tighten everything up.

And I mean, give yourself a goal to say, I'm going to act like I make 70,000 a year or whatever it is. And then find that difference to have an end point to say, okay, I could be completely debt free, be done with all of this and start fresh, not owing anyone anything and start this whole process. I'm like, you could do this in 18 months, Gabriella. I mean, if you really focused and did this,

The car lease, you know, kind of hangs in the balance of what you decide there. But being able to have no payments and this income going to you and your girls and you guys keeping all of it, that's the goal we want for you. Have you been through Financial Peace University?

No. Okay. So if you hold on the line, Skylar is going to pick up and we're going to gift that to you as well as EveryDollar Premium, which is our budgeting app. And so what I want you to do, Gabrielle, is watch these lessons, even binge them. There's going to be seven lessons and I want you to go through and watch all of this and really get a game plan to say, okay, here's

Here is how I take control of my money. And what that's going to teach you is everything from budgeting to getting out of debt to saving up for an emergency funds to investing to your kid's college. I mean, it kind of runs the gamut of everything and it's all packaged in there. And so to be able to walk through that and apply this stuff, Gabrielle, because what you've already witnessed and experienced is that money, it's personal finance, it's 80% behavior. It's only 20% head knowledge. You're going to watch these videos and be like, I knew that. I knew that.

I knew I shouldn't probably co-sign some furniture for a family member. I know that I probably, okay, now, okay. You know, you're going to get all that, but actually changing the behavior and doing it is going to be the key to you winning. And I believe in you. I know you can do this, Gabriella. We're cheering you on. So hold on the line. Skylar will pick up. That's the theme of this hour. Don't spend money you don't have, especially with people you're not married to.

That puts this hour of The Ramsey Show in the books. My thanks to my co-host, Rachel Cruz, all the folks in the booth, and you, America. Thank you so much for listening. We'll be back before you know it. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by bestselling author and all-around great person, Rachel Cruz. And we are here for you, America, answering your questions about money,

in life and all of the predicaments and challenges and maybe some wins that you're facing. 888-825-5225 is the number to call to join the conversation. Olivia kicks us off in Buffalo, New York. Olivia, welcome to The Ramsey Show.

Hi, thank you so much for taking my call. I'm a huge fan of the Ramsey show, especially Dave. He's awesome. We agree. Yeah, love him. So my question for you all today is, my sister took advantage of our sick mom, skipped town, and stole my inheritance. What should I do? Oh my gosh, Olivia. What do you mean took advantage of your sick mom?

Took advantage. Well, okay. She took over the family business even though it wasn't left to her. She convinced my mom to become the power of attorney and healthcare proxy and transferred all money to her own account. Oh, wow. Wow. She also sold my mom's house and moved my mom into the family business.

Into the business? Into the office? Yes. Okay. What kind of sickness does your mom have? She had cancer. She died three months ago. Oh my gosh. I'm so sorry, Olivia. Do you have any other siblings? No.

No, I'm the eldest. I'm 40 years old. My sister is approximately 37 years old. She lived with both of my parents who passed from cancer, and she has skipped town and has not buried my mom. Where is your mom? Sorry, my sister has her ashes. Okay, she's

Oh my gosh. Did you and your sister have a relationship before all of this? We did. It was, I thought it was a lovely relationship. And then things started getting weird when my father passed away five years ago. And then my mom got cancer. And I believe she felt entitled as the power of attorney to all money, all estate, all inheritance. And she's gone. She changed her number. She left town.

So from a legal standpoint, did your mom have and your dad, you know, any documentation legally like in a will of what your inheritance is? And then she went and changed it as power of attorney? Or is there a will out there that you are owed essentially your inheritance? There is a will that my mom wrote. I have never seen it. My sister attempted to change the will one month prior to death, but they never got it signed. Okay.

So there is a handwritten will. I'm not sure if it was done with a lawyer, but I've never seen the will. Okay. And you have no point of contacts for anyone that might have information on this? I've tried to reach out to the lawyers and they said, Catherine, I'm sorry, Olivia, it was never signed, therefore it's not valid. The will, yeah. And they have no version that is signed?

Oh, man, Olivia. The question would be, do I keep my own peace and sanity and money and move forward with my life, or do I try to fight it? Essentially, yeah. I mean, the only issue with all of that, because I don't mind the fighting injustice. I mean, we're not scared of that, but I don't know if you have any legal documents that will uphold in court that

To to fight your side, like I don't know if there's any legal documentation to show your side, because from a legal perspective, you know, you could be lying as much as she is. Right. I'm not saying you are, Olivia, but like there's no there's no proof otherwise. We need some kind of paper trail. There needs to be like some some level of documentation to in order to when you hire lawyers for them to fight this in the court system. And I just don't know if you if you have that. Have you contacted a lawyer?

Yes, I have. What did they say? That was a lawyer. He said that it may not be worth it because number one, there may not be any money left over. That's true. Yeah. And right. So it may cost five to ten thousand dollars for a lawyer. And I may not get anything after all. Yeah. How much was the estate worth? Like how much did your parents have? Do you do you have any idea? Well,

The house was sold for $344,000. There were many liens against the house. Okay. And my sister has all of that money. Okay. So there were some liens. Was that all of your inheritance or was there other money that was supposed to be given to you? That was probably all of my inheritance. Okay. So it wasn't retirement accounts, other assets, cash, things like that.

No, there was the family business, but that's another topic. I believe just the money from the house would be part of my inheritance. Yeah, I mean, that would be $120,000 for you if you just 50-50. We don't know all these liens against it, what got paid out. I was going to say, the liens against it, too, would be diminished, too. I don't know that there would be much here for you based on how complicated this whole thing is and was. I agree. Oh, Olivia. Well, what's so hard is I'm like, you've lost your mom.

There's a feeling of no closure. Lost your dad, lost your sister in a way. Lost your sister in this. There's no closure. I mean, the whole way it went down for you, Olivia, it's just terrible. And I wish I had better guidance or direction for you to get some justice in this. Do you have any money right now? Yes. How much? Oh, myself? Yeah.

Oh, yes, I work. I make $70,000 a year. I'm a surgical nurse. I'm married. I have a dog. We're doing just fine. This situation is a strange one. It's very sad. And you're in fact right. I lost mom, dad, and a sister. Yep, yep.

And even the closure with your mom and her ashes, you know what I mean? Like that would probably be the step I would take of trying to get contact with your sister. But you have no way to even know where she is, how to get in touch with her. She is off the planet at this point. Correct.

Yes. She had three cell phones. She changed the last number and has not responded via email. We did have a lovely funeral for my mom in church. She attended that funeral, but since then, she has taken off with the ashes and all of the money. Wow.

I don't even understand that part. That just feels so strange. Well, I mean, Olivia, honestly, if I were in your position, and as much as you can find the closure in it, I would. It's so sad to say you close a chapter in a book from your family, but she sounds crazy. The way you presented it to us, she sounds crazy. Almost dangerous if you did pursue her. Yeah, that's right. I mean, she stole. It's immoral, the things she has done. And so if I were you, I would create... I mean, not that you have to even draw boundaries because there's no relationship there, but I mean...

I would in my heart just, there's a level you got to just say, all right, that I'm done. I can't, I'm not going to keep fighting and in this wheel, because even that with the inheritance and all of that, it just muddles the piece of what's happened with your parents, you know, at that point. And so for you, Olivia, I think it's in the healthiest retrospect for you to, to move on. Hang on the line. I'm going to send you a copy of Dr. John Deloney's book on your past, change your future to help you grieve all this.

Welcome back to The Ramsey Show. I'm George Camel, joined by Rachel Cruz. If you want to call us and talk about your life and your money, you can do so at 888-825-5225. Lisa's up next in Indianapolis. Lisa, welcome to the show. Hi, guys. Thanks for taking our call. Sure. How can we help? I'm a newer listener to your show, and my husband and I are wondering if it would be beneficial to pay off our mortgage early. Ooh.

Well, the question is, why wouldn't you want to pay it off early? Because we don't have too many years left to pay on it. We can pay it off if we want to. I just, like I said, I'm a newer listener, so I'm just intrigued about the debt-free process and wanting to know if it's a good decision or not. Yeah. How old are you guys? We're 57. Okay. And how much do you have left on the mortgage? $85,000. Okay. And how much is the house worth?

Um, anywhere between seven to 800, depending on what site you look at. Yeah. Good for you guys. And you have money saved? We do. Non-retirement? Correct. He had a buyout from a job severance. Okay. How much is, how much do you guys have saved? 143. 143. Okay. That's awesome. Um, and how much do you guys make a year? Uh, he makes 230. Okay. That's great. Any other debt?

Credit cards, car loans? No. The only thing we have, we have a long-term care insurance plan that we have payments on for eight more years. Okay. Okay. Good for you guys. Wow. I mean, yeah, Lisa, I think there is something to be said about having absolutely no payments. And when you free up a mortgage payment per month,

you know, what you guys can do, whether it is spend it, invest it, put it for retirement, give it. There is such, there's such freedom financially when you don't owe anyone anything. And then the flip side of it too, Lisa, that not many people talk about it's the freedom just emotionally. I'm like, when you have no payments and a pandemic hits and everyone is panicked about their jobs, like,

You don't you don't have any bills like there's there's no one that you owe at that point, you know, so it's amazing how much risk that debt is associated with that we get used to as Americans that we just carry around and just assume it's normal.

And when it's finally done and that house is completely yours, there's no payments, there's no bank associated with your life. Like there is there is something so powerful in that. And that's on just the emotional side, obviously not even just the financial side, because I guess you guys have a good interest rate, I'm assuming.

Correct. Yeah. Yeah, because some people make the argument, we'll just keep the money invested. You'll make more on a rate of return with it invested versus, you know, paying it off because it's at 2.5% or, you know. Yeah, people go down the math route, which we understand. Like, we...

We can do math like we get it. But again, it's this other piece, Lisa, that the people just don't put into the formula. And that other piece is a level of risk that debt will always have associated with it. Yeah, the reality of having no payment is so much better than the potential assumption of the spread you could get if you left the money invested.

and uh we rachel and i both don't have mortgage payments and i have zero regrets i'd never look back and go well if i just invested them i could have we're gonna be fine yeah so are you guys because the other side of that coin too lee says you know if you had a paid off house would you go borrow on your house no okay so then that answers your question some people say yes and they go build pools and remodel their home so i'm proud of you guys what's in your nest egg how much do you have in retirement um

A lot. I mean, like 1.85 right now in retirement. But then we've got a couple of Roths and other investments as well. That's so great. So you're worth millions of dollars. Because here's the deal too, Lisa. If we're all just being honest here, you could keep paying the mortgage payment and you're going to be fine, right? Like you are. But what we try to do on this show is to get you the fastest right way

to this idea of building wealth and leaving a legacy and all of it. And part of that plan is paying off the mortgage. So you have the money. Okay. I would do it. I would do it. Okay. And if you regret it, Lisa, you can, you can, you can borrow on the house. Happy to give you more monopoly money, but listen, you pay it off. You still have 58,000 leftover just from what you told us. Yeah. And making great money and all of it. What's your mortgage payment? Um, we pay 2,400 a month. And that includes property taxes and insurance.

I believe so. No, because we pay our own taxes. Oh, great. Our own property taxes ourselves. Well, I want to do some fun math with you. That's $2,400 a month, you said? Correct. Times 12 months in a year. That's almost $29,000 that you could then invest, let's say, right? In the next 10 years, that money could turn into $462,000 if you just take your mortgage payment and invest it for 10 years.

OK, you could have an extra half million and you could also give more. You could spend more. You could retire earlier. And so that just gives you more flexibility, more freedom, more options and margin. And so that's why we recommend it. And you guys have done so well without Lisa. So that's just one two people's opinion. Yep.

All right. Well, wonderful. That's kind of what I was leaning towards, but my husband's like, well, let's ask them. So I said, okay. I love it. Your husband's a great man. Glad to call. Thanks. Hope you guys do it. All right. Angie's up next in Chicago. Angie, welcome to the show. Thank you. How can we help?

So we have an opportunity to move overseas for about three to five years, three years for sure. And we would take about a 65% pay cut to do this. And I'm wondering what your thoughts are, whether or not you think the experience would be worth it.

So what's the situation? Is it a work thing? What's going on? Yeah, it is a work thing for my husband. He would take a 30% pay cut and I would not be able to work. Okay. So we would go from making about $300,000 a year to just over $100,000. And we have four kids. We have one in college whose college is paid for already. Then we have a 15-year-old, 12-year-old, and a 5-year-old. Oh, wow. Would they come too?

They would come. George, three years? You never know. What if these kids are prodigies? And she's like, I'm out of here for three years. That's big. Well, what does the whole family want to do? Are they all excited about this? Yeah. What's the family feeling? The middle two, well, the oldest one would not come because he's in college and he has one year left and he'll go through his thing. He may come for visits and travel, but the middle two are not...

Super excited about it, but I think that once they get there, they will love it. Where is it? It's in Eastern Europe and Poland. Okay, okay. Well, yeah, I don't think George and I are going to be able to answer the question, is it worth it, the pay cut? Because I think that's a complete...

Yeah, I mean, some families would be... You can look at a budget and look at cost of living and can you financially afford to go down to $100,000 in Poland for those many years. That's a different situation, but I'm more concerned about the relational aspect, the emotional aspect. Do you want to do it, Angie? I do. You do? Does your husband? He does. I think it would be really good for the kids. We do move a lot, so they are used to moving. I think it would be good for them to just...

just see how people live differently and we'd have the opportunity to travel all over Europe for them to see different cultures and whatnot. And I'm not, I don't think I'm too worried about financially us affording it because we don't have any bills other than a mortgage. And we, I think it would be wiser if we just sold our home so we didn't have to worry about paying that. And the company pays our housing while we're over there. What kind of job does he do? Does he have?

He works on computers. Okay, that's awesome. Yeah, I mean, I think it's one of those things. I'm just trying to think, you know, with my kids, I have younger ones than you, though. They're eight, six, and four. But I mean, I think at the end of the day,

You guys are the parents, Angie. And if you both, you and your husband are like, hey, this is a lifestyle choice we want to make as our family. Like you, you ultimately get that say, right? A 12 year old doesn't get to tell the family what to do. But I would. But as George said, like, I mean, I would very much as much as you can get their buy in. But it will be sad. I think that's I mean, if I was a freshman in high school, leaving all my friends for the rest of high. I mean, there will be a a.

that's a big shift right for them so I would want to give the proper weight and understanding of that but I think at the end of the day Angie if you and your husband both want to do this I mean yes one of my best friends literally you're living her dream right now this is all she wants to do she does she's like I just want to get out of here and do something different and I guess if you hate it you can come back to the states and it sounds like he can make some good money going back to what he was doing yeah absolutely hope that answers your question Angie thanks for the call this is the Ramsey Show

Welcome back to The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. This is your show. Give us a call at 888-825-5225.

Well, Rachel, we took a call about paying off the mortgage early, and it's a fun conversation to see what that money can turn into. Oh, yeah. Invested versus just sending a regular old mortgage payment to the bank. Yeah. And there's so many mortgage types out there, and most of them are truly just crap. And they're meant to give more money to the banks and lenders and less money in your pocket.

And so I want to take a look at an example of the 15-year mortgage, which is the one we recommend, versus the 30-year mortgage to show people exactly what the numbers look like. And we're not going to get super nerdy. I'm not going to talk amortization schedules, Rachel. But I did want to look at this graph from our blog article on the 15 versus 30. So we're going to look at a $300,000 house, which I understand you're all like, where can you find those?

This is back in the day, kids. Let's say you did 20% down on this $300,000 house. That's $60,000. Tracking? That means you'd get a mortgage for $240,000. So let's look at that same mortgage on a 15-year and a 30-year. In the blue, if you're watching on YouTube, is the mortgage loan. The orange is the amount of interest you pay. So here's the shocking part. On a 15-year mortgage,

a fixed rate loan with an interest rate of three and a half percent, the monthly payment is $1,700. And the total interest you'd pay is $69,000 if you just paid every single payment perfectly for 15 years. Right, right. On the 30-year, you're going to have a higher interest rate at 4%. Now, the payment is lower, which is why most people do it. It's $1,146 instead of $1,716. But the total interest you pay on that 30-year, over 30 years of payments, is $172,000. Okay.

that you just gave away to the lender yep that is shocking i mean almost a hundred thousand dollars more and that's again i get the interest rate people are probably like it's at six percent sure well the numbers change now but it's even worse with a 30 year at eight percent right right so the math is just magnified you're paying 350 000 on that eight percent loan so that's why we want your mortgage paid off asap because this interest you guys i mean it does it just it it

racks up and you see it. So you're paying over $100,000 more in interest to have the 30-year over the 15. I know people have great intentions. They say, well, George, I'll pay it off like a 15. Yeah. I'm like, the people that really want to build wealth and they don't want to wait till they're 65, what they're doing is they pay off their 15-year mortgage in 7 or 10 years. Right, right. That's the average we found with people who follow the baby steps, our millionaire study,

10 years is what it takes for them to pay it off. Yes. Baby steppers, seven years on average to pay off their mortgage. And so that's very encouraging to see how much money you can save. And I actually shared this in my book, Rachel. I wanted to see the numbers for myself and my wife when we paid off our home. So you ready for this? We paid off our mortgage back in 2021 and I did the math on it. We would have shelled out if we paid ours off aggressively in like 26 months because we're weird.

But it was on a 15-year fixed rate. If we just made payments for 15 years, we would have paid almost 50 grand in interest. Had we opted for the 30-year loan, we would have paid over $100,000 in interest. So instead, because we paid it off even earlier, we paid just nine grand in interest by being crazy. And you chose well in your home. And that's our big point, you guys. I mean, some people are like, oh my gosh. Choose a modest, affordable home. Yes. And we know the housing. We're not...

completely oblivious to what is going on in the world. Like we understand rates are up, housing prices are up. And depending on your area, yes, a starter home could be $800,000 in some areas. Right. So like this is a reality. But the hard thing is, George, is money doesn't have emotion. It doesn't care. Math doesn't care. It is what it is. And so-

You can't justify, okay, I'm going to go and buy a house that's my payment is half of my income just so I can say I have a house because you're going to feel screwed every month. It's going to feel like, oh my gosh, we have no money because you have too much house. And so expectations on when you buy a home, what kind of home you buy,

have shifted in the last three years and people even some drastic things they're moving states even because they're like we just can't afford long term what we want our life to look like because of this because again you guys it's the math and that's what we have to always go back to regardless of how much it sucks

That's the reality. And so we want you to build wealth, get there the fastest right way. And what we found is when you do a 15 year, it forces you into a formula that makes you pay it off faster, even though you're probably going to pay it off even faster if you're doing the baby steps, which is great. But, you know, it's a hard conversation, George. And what's even difficult about and I'd be curious just your prediction on this with just the housing market, because in my head, when rates go down, you guys, you're

The demand is suddenly going to open up. Everyone's going to freaking rush to buy a house because rates have gone down. And then that's going to drive the prices up again. So if you are in a position where you can put, you know, 5% down, 10% down, 20% down, and it's, again, we use the 15-year here at Ramsey because we want you in a formula that's getting you out of debt quicker. Because we don't like any kind of debt. We just won't yell at you if you do a 15-year fixed rate mortgage. Yeah, and it's, you know, 25% of your take-home pay. That's the formula we use.

and you're ready to do it, do it. Because people thought the bottom of the market was going to crash, what, last year? That's what everyone kept saying. And it's like, it's going to crash. And we kept saying it's not. It's supply and demand when it comes to this stuff, you guys. And so if you are in a position to buy, having a home is

is a great investment. We want you to do it the right way, though. Absolutely. And I understand for those that want to buy a home, it's painful right now. It sucks. Yeah, it does. It's harder than it was for your parents. Yes. And the harder thing is it's not going to get easier.

So make a plan, get out of debt, get the emergency fund, start saving up that down payment, adjust your expectations. This doesn't have to be your dream home. Just get in the game. And that might be a condo or a townhome, and it might be in an area further out from the city, and it may not have all of the accoutrements and the fancy kitchen island that you dreamed of, but at least you're a homeowner. And that's a great thing. Be proud of that. It's an amazing accomplishment. And it's always interesting to me, George, especially houses, cars, these like big parts of our lifestyle, right?

When you look back, you know, in the 70s and 80s, on average, a square foot of a house was 1,400. Now it's up to like 2,600 on average, right? The average single family home.

And so our expectations on life in general, in general, have changed. If we don't have the quartz countertop, we're throwing a tizzy fit. What we've just categorized as this normal way of living. When you look back, I mean, I look back on childhood pictures of like my our home growing up and I'm like, it's brown carpet. I mean, it's just not aesthetically pleasing.

But it's okay. And now it's like you can't even imagine having X, Y, and Z. You know what I mean? Like because social media, reality TV, I mean, all this stuff we've been painted and this picture of what life should look like has been in front of us for so long, for so long that it's normal. And God forbid, you know, kids share the bathroom. Like, I mean, like, you know, all of that. So again, it doesn't make it easier, but I think we do have to have some level of grounding to say, gosh, what we expect in life.

Like it or not, the lifestyle creep thing, it is real from a generational standpoint too. You used to have to wheel down windows, George in our car. That was my first car, Rachel. You would wheel down a window and everyone was okay with that. But like, oh my gosh, could you imagine today? You know what's really embarrassing though? I'll say this is the worst part about having manual windows. Whenever someone I knew pulled up next to me,

And I couldn't reach over far enough to get to the passenger side window to talk to them. So I would just like wave at them awkwardly. I know. Because I wasn't trying to pull a hamstring. And think about our cell phones. Nokia, Krikus.

Oh, yeah. That was it. Simpler times. It was. No internet. You didn't have email. Play Snake on the Nokia brick. But now we're so used to having all the information, everything we want right there in our hands, right? So I'm like, it's to the little things of our expectations. And I'm part of it, too. I'm guilty of this. You're part of the problem. I may be part of the problem. I'm not pointing fingers. Oh, that's good. That's good.

That's a good level us out. Yes. But also don't make a terrible decision out of fear or like this FOMO or I'll never get a house. So I just need to jump in now because you'll be the next caller calling the Ramsey show saying, Rachel, I think I need to sell the house because we're so broke and so stressed. And we go, the home should be a blessing, not a burden. And what happens when you do it before you're ready is it becomes a burden.

So, Rachel, you talked about forecasting the 2024 housing market. That's literally the YouTube video I uploaded to my channel today. Stop it. George.

- We are like twin, you know how twins, they have the twin thing they say? You could like feel, like that's us, George. - ET energy happening on the show today. - George, it's like brother-sister energy. I like, I can't believe it. - So if you want that, in eight minutes, you can go to my YouTube channel and watch the forecast of the 2024 housing market. - My brother from another mother, George. - I did the weatherman thing. We got a green screen. - Yeah, you did it. - I got to be weatherman on the channel. - How happy were you? - Talking about like northeasterly winds and cumulus clouds, it brought me so much joy.

It's always been a dream of mine, Rachel. If this whole thing falls apart, I'm going to go be a meteorologist. I'll be traffic. You can be weather. And then Ken can be politics commentary. Okay, maybe not. This has been fun. Thanks for being the dream killer, Rachel. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm George Camel, joined by Rachel Cruz this hour. If you're enjoying this show, do me a quick favor. The show is free. What I'm going to ask you to do is free. It'll just take you a second. Hit the subscribe button wherever you're listening or watching or hit the follow button. Leave us a review and make it kind. We like those the best. And then share it with a friend. That's one of the best ways we can spread our message of hope is by you telling another friend, hey, this is a great show.

add this to your podcast repertoire. Watch this video on YouTube. I enjoyed it. I think you will too. And that's, you are the best marketing we have. So thank you all so much for continuing to do that. All right. Becca is up next in Orlando. Becca, how are you doing? I'm good. Thank you. Thanks for taking my call. Sure.

What's going on? I'm just checking in. Well, last week my husband's bank account was garnished, and we found you guys in the Ramsey show after trying to figure out what to do, and we're just wondering if bankruptcy is our only option or how to proceed. Oh, gosh, Becca. What's the situation? What's going on?

Um, well, it was about eight years ago that he had a car repossessed and that was before we were together and he didn't realize that there was further action that needed to be taken at that time. Um, so then last week, uh, his, we had, well, we just were married a year ago and we finally merged our bank accounts and everything over. So thankfully the account that is garnished didn't have anything in it because we combined everything on my side. So they tried to drain an empty bank account.

Correct. So we can still pay our bills because they didn't garnish our shared account through a different bank. But we don't have enough in savings to pay for the amount that we believe is owed. Okay. How much is owed? $9,000. $9,000. Okay. How much do you guys make a year? About $89,000. Okay. Why do you feel like you would be bankrupt? I'm just curious why that was part of your question.

Um, well, he reached out to, I think, four different lawyers. Um, and they all said that that was our best option and really didn't give us any other option. Um, neither of us even knew what garnishment was. So we're trying to soak up as much information. And that's why we found you guys were like, let's just listen to as many shows as we can, um, to see if we can find the answer. But, um, we don't really know what our other option would be. Um,

The lawyers seem to think that since we were already garnished, that there's no way to make like a payment plan or anything like that. Have you contacted this creditor who's garnishing the bank account? Yes, he did. Okay. And what did they say?

It sounds like they just wanted the full amount due. Sadly, I wasn't on the phone call, but my husband can't be here today. So it sounds like there's a way out. You pay the $9,000. You get it in writing that this is paid in fullness. Debt is cleared. Right. If we don't have, we only have $6,000 right now. Would we need to pay it all at once?

That's a question for them. If they're willing to settle for six and say, hey, this is all the money we have. That happened a decade ago, correct? Yes. Yes, okay. They're happy to get any money at this point. Yeah, for sure, Becca. Yeah, bankruptcy, that shouldn't even... You don't even need to say that anymore. You guys are...

I'm shocked that these lawyers told you to bankrupt over three grand. This is so stupid. No, I'm like, you could sell four TVs and a couch and get that money if you needed it. Right. I'm like that. No, you're not gonna be bankrupt over three grand. Is there something else going on that we don't know about? Like, are there other debts and things that you haven't mentioned?

I mean, we have like the regular stuff, a mortgage and like $1,800 in credit card debt. And my husband's current car that he owns, he has payments left on that. What's left on the car loan? On the car loan, it's the same amount in the $9,000. And then we just bought a small condo right after we got married. So we have the whole mortgage basically left on that. And how much is that for? $207,000. Okay. Okay.

Okay, yeah. Well, if I were you guys, I mean, I would contact the creditor that has this. And again, it's a 10-year-old credit. I mean, meaning it's been passed by creditor after creditor and it's been sold and it's here and there. I mean, it's been on a journey for 10 years. So if I were you, I would call and say, I have six grand. I'll send you today.

And if not, I can get you the other three in the next 30 days or whatever it is. But I would not give them any more access to any accounts. Okay. That is like number one because they will. They'll come in and they'll do exactly what they did. But thankfully that was from an old account. Right. Is there a way to prevent that? That's what we are. I think we were worried about communicating with them more because. Yeah. You just don't give it to them. No, I would. No, they don't need any access to any of your personal stuff. No.

So I would, I just wouldn't give it to them. And they don't need it. So Becca, like this type of situation, just so you can picture it, and this isn't to down, not to downplay these people, but this is some guy in a cubicle who's been on the job for 90 days. There's a lot.

There's so much turnover in that world. And gets a sheet of paper with credits that, again, these old debts that have been sold from one company to the other. I'm like, these are not, they sound like scary people. They're not scary people. Okay, you can do this. Okay, so just don't give over and be like, oh my gosh. If we're talking about the IRS or something,

That's a different story. But in this situation, I just I would not be I would not be concerned, Becca, because you guys work hard. You make good money. You can get this cleaned up really quickly. And if they would settle for six grand, that's the only option they have. So that's what I would tell them. The only thing I can give you right now is six grand. That's all I have. I can do a payment plan over the next 60 days to get you the other three grand.

But I don't have any more money. This is all I have. Will you settle? And if they say yes, just like George said, get it in writing. Have them email you.

get the name of the person you're talking to get the number get the extension get at all record the calls do everything do everything you can to have proof that it has been settled if they will and if they won't then just yeah set up a plan for the next 60 days and then becca if i were you and your husband in general regardless of this um i would get i would i would work extra i would do a budget i'd cut everything i'd get this credit card paid off get your car loan paid off

And you guys will be in a really great position. I mean, you have a great condo. It's worth 200 grand, which is very reasonable for what you guys make. And you guys could be on your way to something great, but you got to just change the way that

You have been looking at money and that's one of the biggest hurdles with this. So if you stay on the line, Skylar will pick up and I want to give you guys Financial Peace University and Every Dollar Premium, which is our budgeting app. Just to get you guys some of this like basic knowledge since you're new to the show because we found over three decades, Becca,

the best way to go through life with your money. And this will be the plan. It's called the baby steps. So I'm excited for you guys to engage this. But yeah, do not at all feel like you are bankrupt, that you are hopeless. This is...

One of the easiest solutions today, George. I feel very hopeful about this. I appreciate it so much. Absolutely. Thanks for calling, Becca. And have your husband watch this call to give him some hope. I think what happens, Rachel, is people get spooked. There's these collectors calling them, and they're telling them, and then the lawyers are saying, well, you just got to go bankrupt. When you look at the facts on paper, you're like, we make $90,000 a year. We're bringing home $6,000 a month. Can we come up with $3,000 if we really tried? Yeah.

Yes. Yeah. And so most people that call the show... They're an extra side hustle, $1,500 to two grand. Yeah. In just a side hustle. If you had to pick up Uber at night or delivery... Selling crap around the house, you can make a thousand bucks in a month. Right, right, exactly. So there's a lot of hope here, but a lot of people call the show and their first thing is, well, I got to file bankruptcy. And it's those people usually I'm like, oh, you're fine. Yep. And so...

That's what we do here. We want to give you guys hope, but also the reality that you can get out of this. But, you know, it's like going to the dentist. You're like, my tooth hurts. Of course, he's going to want to fill the cavity and, you know, make a little bit of money. And that's what happens when you go to these some of these lawyers that are, you know, there's some great apples out there, but there's some bad ones who go. Absolutely. I'll help you file bankruptcy. I'm just also, by the way, cost thousands of dollars out of your pocket to file bankruptcy. Do it. Yeah. Yeah. It's not free. Lawyers want to get paid.

Yeah, and the garnishing. I mean, and that would spook you too, right? If you realize, oh my gosh, this creditor has access to a bank account, which thank God it didn't have any money in it.

But yeah, that's so violent. You know what I mean? That makes you feel like they are. And that's a scary thing. Yeah. Personal privacy. It is. It's weird. Oh, gosh. I'm glad you called, Becca. I hope that gave you some some peace and a plan that you guys. Yeah, you're gonna be able to do this. We're excited for you. That puts this hour of the Ramsey show in the books. Thanks to my co-host, Rachel Cruz, to Skylar, to Will, to James, Andrew, Zach, and

They made it happen this hour. The world doubted them, but they came through for you guys, keeping the show on the air. And we thank you so much for listening and watching. We'll be back before you know it.

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Rachel Cruz, host of The Rachel Cruz Show and co-host of mine on Smart Money Happy Hour. This is your show, America. Give us a call at 888-825-5225. We'll talk about your life and your money. Chad is up first in Green Bay, Wisconsin. Chad, what's going on?

Hey, George and Rachel. Good to talk to you. I'm liking the show. It's a great show. Wonderful show. Thank you. Thank you. Yeah. And so I'm kind of a first time, I would say not first time listener, but just started kind of following the Ramsey way here and just caught bits and pieces of some of your shows.

And I really wish I would have found these resources years and years ago, but I've always been pretty good with money. But now we're kind of in a predicament. My wife and I were expecting our sixth child actually coming on Monday. Wow, Chad, you can give George some father advice. I'm exhausted by the one, man. You guys are troopers. You get like a Nobel Peace Prize, I think, at that point. Hey.

Yeah, exactly. We do our best. It's a crazy house, but we really enjoy it. That's awesome. And we're blessed. The bigger family, the better, they say. I love that. It's fun. Great. So how can we help you? What's your predicament here? So yeah, so my wife is an in-home daycare provider, and with the baby coming, she's going to be out of work or taking a step back from work, which is fine. We have funds in place to kind of

prepare for that, but we are going to be tapping into our emergency funds and our bank account even before this fluctuated a lot, sometimes $2,000 down a month, sometimes up a thousand. So I think a big issue that I'm finding out is we really need to be on a budget obviously and figure out where this money is going. We try to budget a few times and we've always fallen off the horse. We get triggered by it. It's hard to track every dollar. You

and be nitpicky with each other and it just triggers our stress and you know and that affects marital relationship if you're always on each other's case so I'm the one in charge of the money mainly so it's kind of hard that way but you end up being the bad guy in a sense looking at all the details and saying yes we can't spend x y and z you become the no the no spouse almost

Right. Wow. So she's been good lately and she's on track now, on board now, I should say. Yeah. She's a wonderful woman. I'm glad to have her. Yeah. How much do you guys make a year? Pretty much solely on my income, 80 plus she makes.

$1,500 a month. So I could just tell you my net take home per month. Yeah, that's great. Because that'll be your new income once she's not working. Correct. Okay. Yep. And that's $3,800 a month net. Okay. What are your expenses? Our expenses are around $2,300 a month. That's not counting groceries and miscellaneous bills, bills, expenses. Is that, does that include debts? That $2,300, are there payments within that?

We have no debt. No debt, okay. Other than our house loan, yep. Okay, so that includes your mortgage, that $2,300, and utilities and all that, correct? Correct, yep. Okay. And then, yeah, and then you have $1,500 left, but that doesn't include food and miscellaneous stuff like you were saying. I imagine with six kids plus you guys, that's a lot of food. Yeah. That's probably the hardest part of your whole budget is trying to nail that down.

Exactly. Yeah. I budgeted like 685 for it. And yeah, we're right around there. Yeah, I'm sure. Totally. That sounds very reasonable. Yeah. I mean, I think it's one of those things, Chad, I think y'all will be in a season, especially with her not working. Yeah. That you're, you're going to probably feel a level of a pinch, but what a weird thing with a budget and the way we always try to frame it. And as you kind of start to live on and it becomes part of your rhythm is that it actually gives you more peace and

Because you actually have control over it. So even if it's, you know, $600 left over after food for miscellaneous to be able to really say, okay, for this month, where can the 600 go? And you guys both together, like you were saying, agree on it, know where it's going. And then the next month, right? Like maybe there's no clothes. We don't buy clothes for this coming month.

But next month, yeah, let's put $150 towards some clothes and we're not going to do something else that we did in February, but we'll do in March, right? So you kind of just month to month gauge that. And then obviously, I mean, there's no debt, which is awesome. And you guys have an emergency fund. So if something does come up with the baby or something that you need the money, it's there. Because how much is in that? We have the $1,000 emergency fund plus we had about,

Four to five months worth of step three of the expenses. Oh, good. Okay. Yeah. Yeah. That's great. So, yeah, I would do...

everything in my power, which is really hard with six kids. So I know this is much easier said than done on the side of the call. Just to try not to tap into that, that emergency funds. If you need it, it's there, right? That's, that's to help relieve if something does come up and you need cash instead of going into debt for it, you obviously have that cash to use. But if you can start to practice both of you guys together to run this household together,

on and it is a tight budget like that that is what it is but there is something about having the power and saying okay this is where we know what's going and not feeling like gosh i feel like we're just running and we're not getting anywhere at least you have numbers on paper that show you yeah you are you are getting somewhere and and you guys are you know you're doing a great job you really are how have you been budgeting currently chad

We have not been. Okay. So this is just kind of napkin math. You know your income and you know roughly what your bill is add up to. Yep. Exactly. And I look at bank accounts, add it up, track it monthly, see where we're going, up, down, up, down.

Yeah, that's a lot of brain calories and stress. So here's what I'll do. I'll gift you every dollar premium, and that's going to help your wife. She can log in on her phone. You can be logged on your phone to the same account. You guys both have accountability and transparency. And bring her into it, not in a negative way, but, hey, help me adjust this. Let's include a little bit of fun money for her so she doesn't see this budget as this negative thing holding her back, adding stress to her life. Instead, it's,

oh, look, we have this much left to spend on food for the week. Let's meal plan together. Let's figure out how we're going to do this. And so you not just being in charge of the finances, but bringing her into it and her getting a vote and both of you having that accountability. Yeah. And I mean, Chad, in a perfect world, you know, what's great about every dollar premium is it attaches to your bank account. So your transactions, when you swipe your debit card, come in. So if you guys shop at Costco, a Costco transaction will hit every dollar budget and you drag it up to the groceries or the Costco line item, however you guys do it.

And, you know, a good rhythm to keep this, to keep the money. I don't know. I feel like some couples, it's a very like formal way of dealing with money and they sit down every month. Winston and I, we text, I mean, it's probably every other day about something going on of like, oh, hey, there was this transaction. What Venmo is this? What's going on here? Okay, there's that.

We didn't have We had less in this category Should we We're going to move it down Like we just kind of It's kind of this Ongoing conversation Because money is a reflection Of our life right And so You're going to see That it just becomes A rhythm for you guys And

And it's a good goal to hit. It's one of those things that you map out for the month and you say, okay, this is our goal to hit. And it may take on some new habits and it may take a little while to get some of those habits in place. But I really, you guys sound so grounded and focused

I don't know. I have a lot of faith in you guys, Chad. So hold on the line. Skylar will pick up for our baby gift to you and your wife. And I'll throw in my new kid's book. I'm glad for what I have for the baby. That's really cute. For all the kids, too. Welcome back to The Ramsey Show. I'm George Camel, joined by Rachel Cruz this hour. The number to call is 888-825-5225. Rachel, I wanted to spring this on you.

I've got an article here from Yahoo. Here's the headline. Prepare your heart. My family of four can no longer live comfortably on $230,000 a year.

Here's how much the American dream really costs. I want to get your take on this. You ready for it? Man, yes. Former Goldman Sachs analyst says his family of four need to earn more than $230K per year in order to live comfortably in the Bay Area. Okay, well, Bay Area. Well, asterisk, that's one of the most expensive places to live in America. Okay, here we go. Stop!

Sam Dojan, now 46. He hit headlines in 2012. He retired at 34. You know, the fire movement, all of that. He had a $3 million net worth. Oh, wow. Okay. Well, since that time, he's a father of two. He's been living off of passive income from stocks, bonds, and real estate. Okay. Sounds good, right? The financial guru now says his investments will generate just $230,000 before tax, while his annual expenses are projected to top $288,000 in 2024. Oh, my gosh.

So he says to net that sum of money, he needs to earn $420,000 before taxes in order to make his life work. So he says he's declaring he's not asking for sympathy or empathy. He's admitting they have an upper middle class lifestyle with his wife and two kids. Yeah, I would think so. And he says there's areas to cut, but overall it's a realistic and comfortable lifestyle. The annual budget includes, Rachel, over $80,000 for private school tuition. Sure. And $24,000 for health care costs.

He also estimates food expenses will top $26,000 this year and his housing expenses. $26,000. Yeah. And then housing expenses, which includes property taxes, maintenance, insurances, are estimated at a whopping $68,000. So because he says, my wife and I don't have normal day jobs, we have to pay for unsubsidized health care, which costs $2,300 a month in premiums. Which would be fair, right? Like if you have to do... You don't have it through your employer. It's not subsidized. Yeah, it's expensive. It's crazy expensive.

So, you know, he just goes on to say the budget breakdown is sure to alarm Americans who are struggling to cope with soaring costs of utilities, rent, groceries. It's a struggle to raise a family in an expensive city, safer retirement, figure out how to spend a lot of time with your kids before they leave for college and enjoy life in general. That was kind of his last quote there. So do you feel for this guy? I had a feeling that you would be our, you know,

What? Someone with some empathy and sympathy for this situation. While most Americans would be like, wow, wow, you live in the Bay Area making $200,000 plus. Oh, I'm like a family making $90,000 right now is pissed at him. Exactly. They're just like, are you kidding me? Are you kidding me? So here's the deal. What they've considered normal is this lifestyle, right? That it is normal to...

I mean, they're almost $2,100 a month on food, which means you are out to eat at great restaurants. Oh, they're eating good. They're eating good, right? Have you been to Air One? No. It makes Whole Foods look cheap. It's in California. Okay, so yeah. It's frightening. Yeah, so I'm like, the problem with that is it is, everything is just,

I was gonna say inflated inflation inflated in what the norm is for them, right? It's just here. It's here. And if that's the life they want to live, we're not mad at that. But don't say that the average family has to live that because there's people that are living a sacrificial lifestyle right now to better their families.

that are significantly, their norm is down here. So the complaining at somebody that's living up here is what bugs me. Yeah. Well, in this idea that you have to, well, I want to live in the Bay Area. I should get to live wherever I want to live. Well, that comes at a cost. Yeah. It's math. And we're seeing some of the costs here. And by the way, you chose, I know you want to put your kids in private school, but it's a choice. Yes. To put your kids in private school. That choice comes with a cost. Right.

in his example, $80,000 a year. For two kids. For two kids. So it's a $40,000 school, you know. Which again, private schools...

Even here in Nashville, you know, can get up there. And then I don't want to work a traditional nine to five working for the man. He works for himself. Great. That also comes with a cost. You have to pay for unsubsidized health care, which we could get in a whole tangent about how that whole system is messed up. Sure, sure. But I don't feel, I want to feel bad. Because it's choices that you're making. That's it. That you can make different choices and have a different outcome. And that can be choices from where you shop for your groceries to

To your job, right? Or to where you're living. So, I mean, those are choices you're making and this is the outcome that you're getting. So to get a different outcome, you have to make different choices. And if I'm going to live in a super, these are ultra high cost of living areas. Yes. And so, yeah, you need to make. It's like being in Miami. You got to make half a million dollars a year in order to be comfortable. New York, Manhattan, you know, like, yeah. Yeah.

So that is one thing with the FIRE movement that we always kind of push back against. He thought this $3 million would float him. Would be fine. He's realizing it's not enough to cover my expenses. And that's the fear in this idea of like, I'm going to live on nothing and invest everything, which in a sense, you're like, okay, there's some like...

great principles in that idea of living of living on less than you make yeah of we're not going to give in to instant gratification we're going to delay everything live on nothing and we're going to be okay so that I can not work and live off these investments but the prediction of what you're actually going to want to how you're going to want to live is going to probably up that's what I've always said to myself I'm like 65 year old Rachel is going to be way bougier than 35 year old Rachel so I'm like

It is. You're going to upgrade your life as life goes on. And so that's the fire movement caution. Ouchie. And there's some lifestyle creep here too, as well. We can admit. You know, he said we're living an upper middle class life. We live comfortably. We do all the things that we want to do. There's not a lot of sacrifice happening right now.

And, you know, he did well. He's still young and multimillionaire. So the night can't complain too much compared to the average American. But I'm not going to vote for sympathy on this one, Rachel. Yeah. Oh, no, I can't either. OK, thank you for that. I can't. All right. Back to reality. Michelle is in Sandpoint, Idaho. Michelle, what's going on?

Hey, George and Rachel. My family got turned on to the Ramsey program about three months ago, and so we're all working through the debt snowball right now, and we don't have very many forms of insurance. Hey, Michelle, speak directly into your phone for me. You're breaking up.

Okay. Is that any clearer, George? It's still a little rocky. We may get you on hold to get your phone clear if we can't clean it up. But all I heard was you guys are in, you're trying to pay off debt in Baby Step 2? Yes, we're in Baby Step 2. Okay. And we don't have anything except car insurance right now in our monthly budget. Okay. And so I've been looking over, getting quotes for the different ones, and I'm just not sure, you know,

Basically, we have where in our monthly budget, 42% is the ratio of our income, our $9,000 a month household between the four of us. And that's going to paying our debts in Baby Step 2. Okay. And so your question is what other insurance you need?

Which one to budget for first? Because I know that if we took all our extra that's on the snowball right now and used it for insurance, that until we get our shovel bigger in the next couple months, we wouldn't be making any traction. And I'm not going to currently don't think I can sell that pitch. Well,

Well, insurance is not a baby step. Insurance is a, these are non-negotiable. It's almost under your utilities. Yeah. That's kind of what you could say. And the problem right now is if you forego insurance, it could derail you financially in the biggest way. It could cause bankruptcy. If you don't have health insurance and you get some medical bills, it can be game over. If you don't have homeowner's insurance and renter's insurance and something happens, it's game over.

Yeah. So, yeah, insurance is above your debt in that sense. It's a necessary expense that you will pay. So anything after insurance and utilities and mortgage or rent, food, all of that, whatever is left there, then take that amount for your debt snowball. And we just got access, thankfully, one of our family works for Costco to...

smart dollar. And so I know that the Financial Peace University lessons are in there. Is that right? Yes. Go watch the insurance lesson for sure. But here's the ones you definitely need. Auto, you have that. You need health insurance, you need term life insurance, and you need homeowners or renters insurance. That's the bare bones. And we'll walk you through the rest of those in Financial Peace University. Thanks so much for the call. This is The Ramsey Show. This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz.

Open phones at 888-825-5225. Evan is in Toledo up next. Evan, how are you doing? Doing well, George. How about yourself? We're doing great. How can we help today?

Yeah, first, I wanted to say, glad to finally talk to you. You've been all over my TikTok. Love your messaging. The algorithm knows what Evan needs. You just made his day, Evan. Thank you for calling instead of DMing, being like, hey, bro, I need financial advice. Call the show, guys. Thank you. Right. Yeah, of course. So my question is, I'm putting way too much money into my beater car. Should I use my emergency fund to purchase a new one?

- Walk us through what way too much money is. So how much is the car worth and how much are you putting into it?

Yeah, so the car's worth, the Kelly Blue Book is between four and six. It's a 2010 Honda Accord. I purchased it 20 months ago for $9,700. And I have unfortunately put over the course of those 20 months, $12,624.67. But who's counting?

Goodness gracious. What did it need? Were there major issues that you didn't catch in the inspection or what? So that's part of the problem too. Um, I, I rushed myself into purchasing this vehicle. Um,

Did not do proper due diligence. I did the Carfax, sent it to a few people that know things about cars, but went up there, you know, drove two hours, went with my brother who him and I combined know zero about vehicles. And

I mean, I drove it. It didn't, I mean, I knew there was going to be some work, but I figured it's a Honda. It's only got 106,000 miles on it. Sure. I'm, you know, when I was purchasing it, I'll be able to do a little bit of work and then ride this thing until, uh, you know, the wheels fall off. And, um, right off the rip, the, the tune up with a bunch of stuff. Um, the radiator went out. Um, the first expense I had was $2,500. I forget what all went into that. I don't have the best tuners.

spreadsheet in front of me in terms of what work was done, but it felt like

it got to a certain point where I was putting enough in. I'm like, okay, I can just ride this thing out. But it seems like every two or three months, something happens. I mean, last February was the starter. I just had my crank sensor go out during the cold last week. And my fear is with all my side hustles require me to drive. Yeah, you need more of a reliable vehicle. And I think you've driven it, Evan, to the ground. I mean, the idea that you drive it to the wheels fall off. I mean, it's gotten to that point.

Basically. Well, the wheel literally did fall off. I had my ball joint fail. Luckily, I was in an Aldi parking lot and not...

you know, and not going on a high speed on the highway, I guess, you know, for other people to learn and even myself, I just don't want anyone else to feel the way I have emotionally, you know, driving a $22,000 2010 Honda Accord isn't, I mean, it, I mean, I own it, you know, I don't owe anybody money on it. It feels great being able to say that, but you know, at some point I feel like I've got to cut things loose. Right. How much money do you have right now?

Um, I have in liquid cash, uh, $22,000. Great for you. Any debt? No debt. Way to go, man. Yes. I would for sure get a new car. So let's say you, can you sell it private party for six to get top dollar? The guy that, um, has been working on it for me, I'm sure we could maybe find somebody. My, my, I try to be a little more conservative. I could probably get four cash for it. Easy. Well, is everything fixed on it now or does it still need more work?

The check engine light is on, but that's the story of a lot of people, I'm sure. And I think it's just the aftermarket oxygen sensor, the catalytic converter. That's the only thing, the reason that's flashing. So it's got brand new tires, you know, a lot of stuff, basically. Well, maybe you take the, if you can sell it for five, you take 10 from your savings and you go buy a $15,000 car. What's your income? Yeah.

I think with everything and when you take into account my side hustles and everything, I probably net $70,000 a year. Great. Yeah, that's awesome. That's a reasonable purchase. And you can drive that $15,000 car for a while. Do you have any other future goals like a home down payment? Are you investing right now?

Yeah, I'm investing a lot. So over the course of the last three years, I put a bunch of money into a non-retirement tied investment account and just been riding dividends in that space. I mean, that account, I think, is...

$55,000 and I'd rather leave it where it's at. I mean, I'm putting enough into my 401k. I'm maxing out my Roth. Good. And actively, you know, investing that. I mean, I feel like I'm in a good spot. Yeah, you are in a great spot. Yeah. So just replenish the emergency fund once you buy the car. Make sure you're at, you know, three to six months of expenses in there. But other than that, dude, you're doing all the right things.

Yeah, it's like, and I know the concept was great, right? You know, buy used, reliable, and just a little bit of the due diligence was good. Yes, that's what I was going to say, Evan. I think for people out there, because I think you're right, there's so many lessons always to learn on this journey. And one of them, yes, is to always do the inspection. And to your point, we laughed at another caller, or not at another caller, with another call a few weeks ago, uh,

because I was having trouble keeping up with all the car lingo and whoever I was co-hosting with, they're like, you just need a car person in your life, whether it's the uncle or the friend, but there's always that person in your life that just knows cars and just take advantage of their knowledge, right? And because you are gonna be buying a crappier car when you're, especially when you're getting out of debt and you're doing this plan and you sell the nice new car that has a $900 car payment every month to it, you know, and we say, go get a beater.

It's this kind of thing, but you want to be wise with that, to your point, and those beaters are not there to last you three, four years down the road. Maybe get you through nine to 12 months, and then maybe you upgrade a little bit there, right? So it is a continual change. It's not something that'll be forever. So I think you're at the point for sure, Evan, that, yeah, you can definitely...

definitely step up in cars. And your next car, you will definitely do a pre-purchase inspection. I guarantee it. Yes, you would. And I would really challenge you to try to get closer to that six because you've put money into it. It's not just a crappy, you know, 2010 car. Like it has new tire. Like you put value into it and I want you to be able to get that out of it. So don't, don't just settle. And if you look at, you know, what these cars are actually going for in the open market, even over a hundred thousand miles, even a 2010 Accord, you could get over $10,000 if you can get this thing in good shape.

It's a wild time out there. You may have gotten a lemon, too. It's kind of what it sounds like. Yeah, I did. And it was tough because I went across state lines and I didn't read all of the paperwork. And I'm sure I signed away my lemon law rights. They're different in Michigan than they are in Ohio. And it took 25 days for me to get it into the shop anyway, originally. So it kind of was a worst case scenario. Totally, totally, yeah. And you have a good, reputable, honest mechanic that you're working with?

Yeah, he's a great guy. Um, you know, and it's, uh, he's a retired Honda certified, um, you know, mechanic just does work out of his garage. Um, I have no reason not to trust him. Uh,

Yeah. And for you, Evan, to keep, I feel like there's so much good stuff for listeners out there with the story. And that's another thing is your, as car maintenance as Evan has felt over the last two years, it just gets expensive. Right. And so I do think though, for people listening, get a second opinion because sometimes that one person not saying your guy, Evan is this, but there are some people that they're like, Oh my gosh, it's kind of like, I don't know. You go somewhere and they're like, Oh, well this, this, this, and this.

And if it's me, again, that doesn't know cars, I'm like, okay, fix it all. It happens to the dentist. Like you need $3,000 worth of work. The other dentist is like, no, you're fine. We'll fill that one tooth. You're good for a while. Yeah. Right. Right. Cool. Yeah. Yeah. So second opinion on big maintenance things for those of you listening to.

Yeah, and to give you a little insight to my driving habits, I mean, in the 20 months, with all that work I've done, I still put 30,000 miles on the vehicle. Yeah. So to me, that's a lot of driving. Oh, yeah. That's a lot of driving. Yeah, that's a lot of driving, for sure. And in my opinion, looking in that 2019, probably 2020 STIVX range, I know those might be a little bit more expensive.

I know the body style got bigger, but in my mind, that's something that is going to be reliable, even if I get it, you know, pre-owned certified. Sure. And that's something where I just kind of eat the cash and then spend the next few months rebuilding that emergency fund. Yep, for sure. Yep. Just be paying cash for the car. Don't let it be a crazy percentage, but it's not. You're doing great, Evan. Just overall, your overall financial picture. Yeah.

is awesome. Well done. You got the right headspace around this. Don't let this hinder you from buying another used car. And don't let that hinder you, America. Don't just go out buying a new car because you heard Evan's story. Okay? Make the right choice. Get the pre-purchase inspection. It's like $150. You'll have a lot of peace of mind. Worth it. This is The Ramsey Show. Our scripture of the day, Matthew 5, 15. No one lights a lamp and then puts it under a basket. Instead, a lamp is placed on a stand where it gives light to everyone in the house.

Mary Kay Ash said, "Those who are blessed with the most talent don't necessarily outperform everyone else. It's the people with follow-through that excel."

That's a good quote. And Rachel, that's not Mary-Kate and Ashley. It's Mary-Kate Ash, a different historical figure. No, I didn't want to confuse you. Thank you. Solving a mystery before dinnertime. Man, I used to love those books. Adventures of Mary-Kate and Ashley. How the West Was Fun. Anyone? Oh, all of it. Throwback. There you go. The Holiday in the Sun was the preteen big movie where they went to Atlantis. Remember Atlantis? Oh, yeah. Right when it opened, they filmed... What great PR for Atlantis. And the enemy...

on it was uh megan fox wow back in the day i know there's that's good in the pre-teen take rachel to your mary kate and ashley trivia night she will crush it oh well back to what we're here to do rachel's answer america's questions and help them solve their life's problems and uh hopefully we can do that with jeremy in palm springs jeremy what's going on hi george how you doing doing great how can we help

I got $75,000 in debt and a baby on the way. Oh, congratulations. One bad thing, one good thing. What number of child is this for you, Jeremy? It's our first. Oh, congratulations. When are y'all due? Due in about a month and a half-ish. Okay. Five, six weeks out, huh? Yeah.

Yeah. That's exciting. It's coming up quick. So you paired those two things together. It tells me that you're a little bit stressed about this debt. You want to try to get out of as much of it as possible before baby's here or what? Yes. Yeah. Well, that's the instinct. Me and my wife decided to go ahead and just put everything in savings because we don't know really how to raise a kid yet. That's wise. So how much it's going to cost and all that. So yeah. Yeah.

You're doing the right thing. So I don't know how long you've been listening to the show, but you guys are in baby step two where you're paying off all consumer debt using the debt snowball method.

And because you're having a baby, we call this stork mode, which means we are pausing the baby steps. We're pausing debt payoff and we're stacking up cash and savings until mom and baby are home safe. Yeah. Staying current on your bills. Yes. Good. But yes, but so, okay. So how much will you have Jeremy stacked stashed away here in the next month or two and what you guys have been saving so far? Well, so far it's,

It's kind of complicated, but right now we have about $33,000 in emergency fund. Okay, that's great. And that will go up in the next couple months, hopefully. To what? What do you think that'll be?

Uh, if I were to guess, maybe it all depends on a job and, and all that. Yeah. So maybe about 35,000. Okay. Perfect. In the next few months. So let's say you have 35 K babies here, mom and baby are home safe. Then we can take most of that and throw it at this 75 in debt, knocking it almost in half. Right. Yes. I guess my question is, is,

um there's about 55 of that in school loans and they range from like three percent to to seven percent and there's like it's like one loan but it's got 10 loans yeah they're broken out into separate little loans yeah so should i attack that as one loan as like the seven percent or should i attack the car loan

At 3%. What's the car loan? What's left on that? The car loan is at $22,000 right now. Okay. And is that all of the debt, the $55K and the $22K? Yes, minus the house debt, yeah. Sure. Okay. So with the debt snowball, what's beautiful about it is you don't have to worry about the interest. You are trying to focus on momentum and progress. So you're going to lay out those debts from smallest to largest. So let's say one student loan is $1,000, the next one is $3,000, the next one's $5,000.

then you would just knock those out one by one from smallest to largest while making minimum payments on the rest. And what that does is you free up a payment sooner. You apply that payment plus all the margin you were throwing at the next debt. And the same thing happens. And you can see how the snowball picks up snow. And most people following this plan, they get rid of their debt in 18 to 24 months using this method. Okay. How much do you make a year? Okay.

Well, that's in transition right now. I just got out of the military, so hopefully going back to making about $70,000, $80,000 a year. Great. What's the car worth? The car, honestly, I haven't looked it up. It's a 2019. It's a pretty new car for us anyway. Okay. Okay.

I'm just wondering if you got to the point where you're like, man, I have $77,000 in debt. I'm going to make $70,000 this year. This is going to take four years at this rate. It's a possibility that you end up selling the car and downsizing with cash. Yeah. So that's something to think about. Just to speed up this process for you guys. Because you've got a solid income, but you also have some pretty serious debt here.

Yeah. Yeah. So if your income is not going to go up significantly over the next year, you may want to look at just selling that car while you can, while you can still get some good money for it. And then using some of that cash and savings to get a beater car to get you by for a year.

Gotcha. Okay. Yeah, that's an option, man. Thank you so much for the call and congrats on the baby. That's exciting. Good luck with the new addition. I'm five months ahead of him here with a five-month-old and it's a wild ride, Jeremy. No one can prepare you, not even Rachel Cruz, and she tried emotionally.

- Tried to give you all the baselines, George. - What can I say? - You and Whitney are great. Y'all are killing it. - She's the best mom. - Killing it. - You know, we were at dinner the other night and we were just trying to have a moment of connection. And I said, "What are three things you're learning?" This is what we do on date nights. - I love that. - You and Winston do that too, right? - Great, good question. - And she said, "I'm learning that I'm a good mom." And I was like, "Yes."

A thousand percent, yes. That is so good. And I feel for moms out there. The mom guilt is real. It's just like constant chaos and emotions and lack of sleep. And should I work? Should I stay? I feel for new parents out there. Or you see moms like, take care of yourself. And you're like, yes, I will. Don't worry about the laundry. You're like, okay. You know, the worst advice, Rachel, I'm going to say this. This is the worst advice I got when it came to parenting. And I heard it from so many people. Oh, no. Did I give this to you? Nap when the baby naps. Oh, no, I hate that. Yeah, don't do that. What?

When am I going to shower? When am I going to eat a meal? When am I going to do laundry? That's a silly one. That's really nice. Now, at night, obviously, ideal. That's fair. Let's get the baby sleeping. Then we can all sleep. But yeah, no, that's a... Well, Rachel, meet Rachel. She's up next to finish off this hour. In Scottsdale, Rachel, get right to it. We're up against the clock.

Hi, I'm Rachel. I live in Scottsdale. I'm currently working as a nurse and I was wondering if I should take out some student loans for my bachelor's in nursing. How much is it going to cost? Yeah. Well, I was looking at some programs. The cheapest program I could look at was 40 grand and that's kind of a lot for me. I don't really have any debt right now. And the big thing is like, as I work as a nurse currently with my associates and I make

Like, there's really no difference between a bachelor's and associate's at the moment just because... As far as your salary? Yeah, exactly. So the ROI isn't there. You're not going to be making $40,000 more. No, exactly. Yeah. So why do you want to do it then? And why now? Well... Just what everyone does. I don't know.

Well, that and at the moment, I'm really able to get most jobs I want, but I don't know if that's going to last long term only because a lot of nurses were scared off because of COVID. Yeah. And I think eventually we're going to work. The nurses coming in, it will be caught back up and everything will be OK. And I fear that I won't be able to get the jobs I want later down the line. Sure. My fear. Yeah. And I think that's a valid fear, but I don't think that's a valid reason. Yeah.

to take on debts to prevent something that hasn't even happened yet. So when the time comes and you start to see that shift start to happen, then I would say, okay, let's think about, hey, what would it look like to go back to school, pay cash for it though, because we'll never, at least on this show, advise you to go into debt. How quickly could you save that up, that $40,000?

Well, I'm married. Me and my husband together make about $90,000 a year. But cost of living in Scottsdale is pretty high. Like we're in a one bedroom and it's $2,100. Yeah. I mean, it would take a while. Totally. It would take a while. Yeah. I mean, I think it could be a good goal for you, Rachel, here in the next, you know, four or five years and just put some money aside in a sinking fund and just say, hey, that's kind of my school fund. And then you may look up in four years and the thing you fear has not come to fruition. Yeah.

And then you make a different decision. Maybe you guys have a baby and life looks different. I mean, who knows what's going to happen? But I would not rush into a degree and go into debt for it on something that's not reality yet. Retweet. That puts this hour of The Ramsey Show in the books.

Hey folks, Dave Ramsey here. You know, budgeting doesn't have to be boring. You just need a budgeting app that's made with you in mind. And that's EveryDollar. The EveryDollar app has helped millions of people work the baby steps and take the stress out of planning and managing their money. Start budgeting with EveryDollar for free right now. Just go to ramseysolutions.com slash EveryDollar and download the app today. That's ramseysolutions.com slash EveryDollar.