Making Good Financial Decisions Is Hard (but Worth It)
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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 am Ramsey Personality, Rachel Cruz, hosting this hour with my good friend and Ramsey Personality, Jay DeWarsaw, and we're answering your questions, life, money, relationships, career, anything and everything. Give us a call.

So first up in Gainesville, Florida, we have Cameron on the line. Hey, Cameron, welcome to the show.

Howdy, thank you. So my question is, my parents just sold their house in Texas and they got a considerable amount of money for it. And they're currently in the process of basically planning for their future. And I recently also purchased a house in Gainesville, Florida, which is part investment property. I'm living there at the same time and kind of renting out rooms in addition to it. And my father brought up to me, hey, with all this extra money that we now have,

You know, would you like us to pay off your house? And then that way you'll just pay us back instead of paying back the bank. And I've kind of heard before, you know, Dave talk about not going to take money from family members. And I kind of just want to hear y'all's perspective on it, the pros and the cons here.

Yeah, I mean, I think if you look at the pro side, sometimes families in this situation, they do it with less interest and all this stuff. But I think, honestly, Cameron, there's just more cons in this because I think the math side sometimes can play into people and they're like, oh, well, they're not going to charge me interest or like whatever the deal is that's a better deal than the bank. Right.

But here's the truth. I'm like, it's a house. Number one, you're not talking about like we're going to pay off a $5,000 car. It's your house. And so for now and in the next foreseeable five, 10 years, it's

You're going to be having Christmases and family dinners, and you're going to want Cameron to go on a great trip. And they may be thinking, wow, why is he going on a trip? He needs to be paying us back. I mean, like, you know, like it starts to like it starts to play into the relationship in a pretty deep way where your parents end up being your bank. And again, all good intentions. Like I hear that because I think a lot of parents go into this and.

And their heart in it is so good. Yeah. But the way it just plays out, Cameron, like it just ends up getting messier. Yeah. I'm just thinking about, okay, so if you're in the baby step where you're paying off your house early, right, you might commit to, hey, we're going to make an extra mortgage payment every month, right? But then something might come up in your house where you go, you know what? We're not going to make a full extra mortgage payment. We're going to do this or that. And you kind of have the freedom to choose what you're going to do. But when your parents are the bank,

And if they get used to you paying on a certain schedule, a certain amount, and then you and your wife decide there's another priority right now, we're not going to do as much. Like Rachel said, I just feel like there's this weird feeling of, oh, they stopped paying $6,000 a month and now they're only paying $4,000. I wonder what that's about. I just feel like there's so much...

And then, and I mean, I'm not saying anything negative, but there are the negative side of things that we have to think about, which is something with your parents' situation changes and suddenly they need more money or something with your situation changes and suddenly you don't have as much money. And you can't afford the house anymore for some reason. And then they are looking for, yeah. There's a lot. I wouldn't do it. Okay. Because Cameron, let me make sure.

Sorry, let me ask you one follow-up real quick because you said something about an investment property. This isn't their house, is it? It's yours. No, it's not. This is my own personal house. It's just that it's more than what I currently need. And so I have, it was being in Gainesville near the local college. So I have, you know, young adults that live in the additional rooms. Gotcha, gotcha. How much, just for wondering, how much was it that they were going to pay off on your mortgage? A little over $100,000.

And I'm currently putting an additional about $3,500 per month towards it. And that's actually what my second question was going to be in regards to. I have about $25,000 liquid right now on top of my emergency fund. And I wonder, is it worth it to just throw all of that in on the mortgage right now? Or should I kind of save that and maybe, you know, wait for better opportunities?

Look, if you're on baby step six, absolutely the case. If you're not, you know, in this case, it sounds like you are, you don't have any other debt. I'm sure you're investing 15% of your income. You know, obviously you already have a home.

are you savings for kids college, like that kind of thing. If you know you're checking off all of those boxes, then yeah, the applicable boxes, then yes, I would do that. Yeah. And if you know, you know that there may be a, you know, you have to replace a car soon or, um, you know, you use that money for something else. If there's something you want to redo in the house, I don't know if there's other expenses, you know, are coming. You could leave some of that aside just as a buffer, you know, savings fund to be able to pull from if you need, if you need that extra cash, um,

Especially with renters. Yeah, yeah, exactly. But I would put a big chunk of that, yeah, towards the mortgage to get it paid off faster. So thanks, Cameron. Thanks for the call. You know, Jade, I feel like the family dynamic with loaning money, it is, and it's one, and what's always kind of hard for me in this seat, I know there's families out there that are like,

This can work. It can work. And then there's like the disaster families. The disaster families are kind of easy to be like, my mom's saying I have to. Yeah, you can paint a picture pretty quickly to be like, you probably wouldn't do that. I wouldn't do that deal. And then there's some families where it's like, you know, the parents are healthy. It's a good situation, all of it. But still, even with that.

Even with that, it just changes the relationship. I would think, and I don't think it would even take anything like truly negative happening. I really think it's just the difference of we were used to this payment and it seems like you've been paying less and then just wanting to ask the question why, even if they don't. Which they have the right to because they're technically the bank in that scenario. That's right. And even if they never do, even if

Even if as the child or like the grown child, you never they never come to you and say, hey, we were wondering what happened. Just them even wondering it has the ability to affect the way they're viewing you like, hey, we're all going Black Friday shopping and they see you spending money. They might in their own head be like, interesting. She spent a thousand dollars here, but she didn't. And you just don't want people thinking of you through that lens at all times. That's right. That's right. It's just the human quality of it. And especially the parent experience.

to the child relationship. It just, again, sometimes well-intentioned. Yeah. And all of it, but we've seen it so often, so often go sideways. And people even talk like with friends and everything. And I'm like, it just...

just keep it all separate. It's like, I don't want to. I mean, think about how just as people think about how we are, if we've ever heard a friend or family member say, oh, I'm saving up for this or I'm doing this or I'm doing that. And then we after they've said that we view what they're doing with their money. So if they say, oh, we're saving up for, you know, a down payment on a house, then it makes sense when they say, oh, we're not going to go out to dinner. We're not going to you start filtering it through what they said they're going to do. Right. Right. And so if that changes, you're like, oh, I thought they said there was

house like you just you can't help it and i just wouldn't want my own parents doing that which honestly borrowing money in general not even just for a house or a mortgage but any time for a car for a personal loan i mean anything yeah so we always say if you have the money you can give it as a gift and again with the parent-child relationship there are some situations where it is a gift and the parents can afford it

The child can handle that gift and it's a beautiful thing of changing a legacy with something, right? Like that 100% can work. But then also on the other side, there's parents that enable children and it can be dysfunctional too. So it's never about the money, right? It's never about the money. It's always about the person who's handling it in that specific situation. So always give, never lend. This is The Ramsey Show.

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Welcome back to The Ramsey Show. It is full shopping week, I feel like, for all of us the last two weeks. And so we actually have the Cyber Monday sale, you guys, going all week long. So all this week, we have extended our Cyber Monday sale, which means there's great gifts, meaningful gifts for your friends and family as low as $7. We have every dollar premium. You can get a gift card for that.

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All week long Which is a beautiful thing We love a good sale My go-to gift Is that goal planner I get that I get several of them Every year And give them out Yes Oh it's beautiful They're so so great Alright up next We have Marcial From the Woodlands In Texas Hey welcome to the show Hi guys Thanks for taking my call It's such an honor Being on the phone With you guys Absolutely Thanks for calling How can we help?

Okay, so my wife and I have been listening to The Ramsey Show for the last six months, so we already read the books and we are working on the baby steps, but our income is irregular. She's starting a career as a real estate agent. I'm self-employed. I'm an entrepreneur. I have a business, and we have some money saved up. We just have debt in cars.

We have two cars, and one we owe $15,000, the other one we owe $13,000. We're getting rid of the $13,000 one, so we're just going to tackle the $15,000 one. My question is, since our income is so irregular, is it smart to set aside, instead of $1,000, just $5,000, and then throw the rest at the cars? And also, I have a small $4,000 student loan.

So that's the question. Is it smart to set aside instead of $1,000, $5,000 and then tackle with the rest of the money, the debt? And if we have a good month, then we throw extra on the debt? Or what do you guys think about that?

Yeah, I, okay. So with the irregular income, there's two ways that you could think of it. There's two ways I would think of it. Number one, if you're able to create a budget based on your worst month, like, right, you can look back in your self-employed job and go, okay, like what's,

what's my worst month been over the course of the year? And your wife can look back and go, okay, what's my worst month been? And you can start to budget from there. And then, you know, okay, like everything else is gravy. If you can make that work, then I would just do the normal thousand dollar emergency fund as normal. Now, if you're like, no, we are really like, this thing is a crazy roller coaster. And the months that we don't do well, like nothing's happening.

what I would do is there is something to be said for having money that you are carrying over from month to month. I wouldn't view it as an emergency fund so much as this is just living expenses. Yeah. This is just rollover from a previous month that I keep there almost like a cushion for my budget. Um, and I think that's very normal for people who are on irregular income because there is such variance there. Um,

The third part of this, I know I said there's two things, but there's three things, Rachel. The third part of this is if you are going through such low valleys to such high peaks, or if you feel like there's a lot of low valleys, that might be an indicator that there needs to be another source of regular income coming in, at least until you can make this a little bit more steady. More stable. Yep.

Got it. Got it. No, that's not the case because in a bad month, we average five to six grand a month. Okay, good. So that's the worst month. Okay, good. Like a really, really bad month. And if that's the case, and again, your expenses and everything can handle that, which I'm assuming so, then yes, $1,000 is enough. And that's enough. So, but yeah, we call them, yeah, P.

peaks and valleys kind of with the budget. And I mean, that's how Jade and I both are on commission is the way we're structured. And so some months it's like, oh yeah, it's been a great month. Some months it's like, nope, not much activity happening. And there it is. But that there's enough in there to make sure that our bills are covered because we don't want you to get behind on your mortgage or not have money for food. I mean, yeah, that's common sense. So we want to be able to have enough there. But if it is,

then yes, Marcelle, I would throw the rest. I would go down to that $1,000 emergency fund. And then I would, for you, you named off a couple of debts, but I would pay off that student loan, the $4,000. I'd get that out of the way first. Now, what did you say about the $13,000 car loan? You kind of glossed over that and said, but we're going to pay on the $15,000.

Yeah, that's a car that was a mistake. It was a desperation purchase because my wife and I, we filed for bankruptcy like a year ago. And then I lost my truck and I had to buy a car. And I bought a car, a Carvana at a 24% interest rate, zero down because I needed a car. I needed to move. I didn't have $2,000 to pay for a car.

car so we bought that car and we are a little bit upside down in it uh so we're just gonna uh sell it and pay the difference because we got that so yeah that's the plan for that perfect well that's great yeah that that that sounds amazing and good for you guys i mean coming out of bankruptcy um

Out of that and then a year later that you guys are like, hey, we got to clean this stuff up because, you know, that is one that is one part of money that is so crucial. And you talk about this a lot, Jade, in your quick read that money's not a math problem. Is that, you know, so often we just try to fix the math. Yeah. We try to go after the interest rate. We try to go after this. But realizing which again, Marcial, I feel like the light has come on for him and his wife. Oh, we're the problem. Yeah. So we're going to have to do some things.

to change our behavior when it comes to money, because that's really the crucial part of winning. That's right. And I know that we talked earlier about

even those nitpicky things, like it's really easy to go, oh, that doesn't matter much. I can do it like that or that's not going to be a big deal. But even with him saying, hey, should we put the $5,000 aside as our emergency fund? Even that, you kind of really have to go in there and go, wait a second, if I pile all this money together, there's really no differential between what's an emergency and what's a month-to-month expense. And before you know it, you're going to be plowing through that quote-unquote savings. And so even just...

making sure that when you say, okay, I'm going to follow this plan that you follow it and you go, okay, this is my thousand dollar emergency fund that goes over there. And then if I have to have an extra cushion in my budget, there's, you know, a thousand dollars or whatever that needs to be in my budget. And it is for month to month expenses is not to go to the mall, like really making clarity around those categories in our mind and understanding that,

so much of it like you said is is about how we're framing it in our mind this money is for this this money is for that and i stick to my word period yes so good yeah so money's not a math problem jade's quick read it's at ramsay solutions.com but she explains so much of this in depth and it's so good yeah all right up next we got laurie in nashville tennessee hey laurie welcome to the show hi how are you we're doing great how can we help

Yeah, so I have $9,000 in student debt. It's my only debt that I have. I have my car paid off and everything. Good for you. I was recently unemployed, but I just got a job, so I'm thinking more about how I can pay off that debt. I have money in index funds and ETFs. I only have about $5,000 in there, so I'm just wondering if I should start paying down

down my student debt with that money, or if I should leave some of that in there just as a little cushion because I don't have much more savings than what's in there. Okay. Yeah, well, good for you. That's great. Yes, I think these are great options to go ahead and cash out. If it's non-retirement...

Then cash out everything to throw at the debt, which is which is huge because that'll get you down to four thousand dollars left But I do want to make sure you have at least a thousand dollar emergency fund and you can put that In a money market account or high yield savings and just kind of set that aside So if that's money that has to come out of one of these funds, I would do that So cash these out take a thousand dollars put it aside and then throw the remaining At the debt because you have any extra savings at all laurie

I am going to get my first paycheck soon. So I think I'll have some leftover in that. So I think maybe I'll be able to build it pretty quickly if I don't spend a lot anywhere else. Yeah, that's great. Yeah. So I would definitely, yeah, definitely go ahead and just cash those out. And again, make sure double check on taxes with any capital gains or any growth that you have.

from those but yeah use that to pay off debt which is just it's amazing that's such a gift that you've done that and then use that same those same savings goals and kind of muscles that you have after you pay off that debt to save up a fully funded emergency fund and then go on to retirement investing and on forth and then you know Vanguard and index funds and all that can come back in the picture later on but for now I would use it to get out of debt well done Laurie this is The Ramsey Show

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Find out more at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I am Rachel Cruz hosting this hour with my good friend and Ramsey personality, Jade Warshaw. And we're taking your calls. It's a free call anywhere in the country at 888-825-5225. Up next, we have Kevin in Los Angeles. Hey, Kevin, welcome to the show. Hey.

Howdy, thank you for taking my call. So I'm kind of calling out of desperation, not for myself, but for my parents. They just pretty much had their whole world turned upside down the past week. Oh, what happened? So my dad, he's an owner-operator. He drives a truck and a semi, a CDL. And so last week he was...

stepping out of this truck and took a wrong step, fell down the concrete, got hurt real bad. Um, kind of try to tough it out. And instead of going to the hospital, he went home instead. And when he was home, he was dealing with pain. And so he took a painkiller thinking that would help. Uh, and then decided to call the insurance company, see if you can get some type of workman's comp or whatever. And, uh, they decided to do a urinalysis on my dad. Um,

which he would end up popping positive for painkillers. And, and this was last week, had no idea this was happening, but back to work. And on Sunday, I believe he was in an accident. It wasn't his fault. Someone else ran in front of him and his semi. And, uh,

They towed away his truck, and as he's trying to figure out how to get back home to Dallas where my parents live, that's what happened in Oklahoma, he gets a call from the company he leases on to find out that he is no longer allowed to drive because he failed his drug test, and they fired him from the business. And so in a matter of a whole week, my dad lost his entire career, and he's in debt. They have no emergency fund. They're behind on the mortgage. They've been living on credit.

And my sisters and I do not know how to help our parents. Wow. Oh, Kevin. Oh, I'm so sorry. That's... It's like the worst chain reaction that could happen happens. Right. Right. And then there's no way for him to dispute any of this. I mean, there's...

Yeah, you just have to like take it as is. I mean, there's no... Yeah, I mean, it's the worst because if you were to know my father, my dad's never done drugs in his life. He doesn't even drink alcohol, none of that. Legit, the man was in pain just trying to go back to work. And my sisters and I didn't realize why he was trying to go to work so bad until it came out clean saying, hey, I've been living off of credit. Like I have to be out in the road making money because I got all this debt I got to pay off. I do have one question and this...

is maybe neither here nor there, but did he have a prescription that he can say like, Hey, I, I was given this. Yeah. It's just, it's an expired prescription, but yeah, he broke his back a couple of years ago and that's where it came from. Shoot. And we've all done that. That's crazy. Okay. So you're wanting to know how to best help

Your parents. We're actually, we're having a family meeting tonight. And, you know, my sisters and my family, they're all in Dallas. I live in California. And we're just trying to figure out, like, what do we do? You know, like, how do we keep our parents afloat through this whole process? And one thing I didn't realize, which my sister told me earlier today, is, like, they're even behind on their mortgage. And no one had any idea. Oh, man.

Okay, where are you guys at financially, Kevin? You and your sisters and, like, how is everybody? I mean, we're all okay, right? My wife and I, we do okay. We both work full-time, and we have a little bit extra. You know, we talked about possibly supporting them. My sister's the same way, you know? I mean, we don't have a ton extra, but we do have a little bit. Yeah, yeah. So, like...

you know, we want to help our parents at the same time, you know, what do we do? Yeah, my knee jerk, I would love to, Jade, I would love to know your thoughts on this. So my knee jerk reaction is first and foremost, Kevin, you have to take care of your family, your wife, your kids, same with your sister, right? I mean, that's your priority above all else. So I never want someone to get in a financial situation where their own family is suffering because of parents or extended family, right? Right.

But if you guys, I mean, there's a part of me that would say yes. I think if you guys have the means to at least be able to help the mortgage side of it and let them not fall further behind. And again, it's not putting yourselves in a dangerous situation financially. But if you guys are able to help financially

Float that You know I would totally be okay with that But I do Long term though Kevin this isn't going to You're not going to be able to fix your parents right There's long term they're going to have to be the ones That say we did this

Our habits are terrible when it comes to money. We have to handle our money completely differently to get different outcomes, all of that. Like, no, there's nothing in your power and your sister's power to help save them long term. I'm thinking about the short term, like with like, you know, December 15th coming up, you know, like if like for them to be able to keep their house, what are things that you guys could do? And I would be comfortable as a gift not to loan, but to say, hey, here's a set amount of money that you and your wife, Kevin, feel comfortable with. If

If your sister wants to have that same conversation with her family, and I would probably put a set amount of money and just say, this is what we have and pile it together and say, this will help them, you know, for three months, catch up to the mortgage, maybe even that. Like if there's anything in that vein, I would be very comfortable with you guys doing that if you and your wife agree on that. But as far as a long-term play, I mean, he's obviously going to have to find

different job hopefully in the same industry I mean I guess it's on your record I mean I don't know how that how much that kind of thing follows you yeah there's a like a rehabilitation process but still it's a process and it takes time right yeah yeah how much time do you know that just

It can take anywhere from like a month to three months, which is fine. But the issue is like they have no emergency fund. It's like how are they supposed to get through? Yeah, he's going to have to do something. I mean, he'll have to drive Uber or like, you know, have something. Your mom probably your mom's going to have to step up and do something as well. They don't have any kids at home, right?

You guys are all grown. Yeah. How old are they? We're all grown. How old are they? 62. Okay. Yeah, they can. Yeah, they're going to have to both just, I mean, whether they're putting together side hustles or whatever it is, I mean, they're going to have to have some level of income coming in to eat. And, and it's just, and Kevin, I think too, like it's, it is a hard reality to,

When you become the grown child, looking at your parents and thinking, oh, my gosh, like I'm now I'm switching roles and I'm having to take care of. Right. And people find that physically having to take care of parents financially, emotionally, like all of this. Right. And so I do think that there's some boundaries there. And, you know, you want to be you want to do this well. Right.

But yeah, as far as them, yeah, like you said, they have no savings. They have nothing. So they have to, a reality check is going to have to hit them, which I'm sure it has, where they're like, wow, we're going to do things we never thought we'd have to do. But what do you feel, Jade, about him and his sister helping catch up to the mortgage if they have the margin themselves? What do you think? Look, I think that ideally that's what you want to do. I think the hardest part in all of this, I think there's two really difficult parts. If you're the spouse,

being on board with that and going, okay, we're, I mean, cause we're talking about thousands of dollars. Yes. Yes. Um, and knowing that this has got to be a gift. It can't, I mean, we talked about this last segment. It's got to be a gift. It can't be, Hey, borrow this money from us. And when you get back on your feet, you'll give it back. If you guys agree to do this, it's gotta be a gift because it's,

especially in the situation that your parents are in, they can't get this money back. They don't have it. And you don't want that hanging over you, Kevin. And so the spouse is being on board. I see two dynamics that have the ability to be kind of funky, but I think you can navigate this. A, the spouse. B, you've got siblings. And so there might be this feeling of like, well, we're giving this. What are you guys giving? And just...

That dynamic of, is it fair? Who's giving more? I feel like you guys could have done more. Like, I think you guys are really going to have to put on your, and it sounds like you do, like, it sounds like you're all adults here, but keeping on that truly like big boy and big girl hat of,

coming to the rescue here. And then I think there's another part of this that's got to be really firm and especially in the siblings minds of it's really easy to focus on this and go what happened to my parents is my dad fell out of the truck and then he took a painkiller and tell that whole story to yourself. But really what the story is over the course of their entire lives our parents have not handled their money well.

And you've honestly got to focus on that being the story. Otherwise, the other story, you feel the guilt of having to, oh, we got to care for that. I mean, my dad just fell. And so really being able to reconcile that in your mind is going to be really important going forward because this is not going to be a short-term situation. Yeah, Kevin, hold on the line. I'm going to give you a membership at Financial Peace University and EveryDollar Premium to give to your parents as a gift from us to at least get them some basic knowledge of how to handle money. And they're 62 and change is hard for anyone, but especially...

Those 16, 17-year-olds, it's changing decades of it. But hold on the line. Kelly's going to pick up, and we're going to gift that to them. I'm so sorry, Kevin. Thanks for calling. So here's a quick math refresher. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money. So to reduce headaches as they scale, smart businesses use NetSuite by Oracle.

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Welcome back to The Ramsey Show. So Jade and I were talking about Christmas and I guess you were on a webinar. What was it that happened? And you thought, oh my gosh. Well, it's that time of year. So the media hits and they've been like, hey, can you write a couple of articles on this? I'm like, yes. And I keep going back to the same thoughts.

So the idea is it's Christmas time, right? And so many of you listening and we've all been there where it's like, I've got bigger fish to fry this year, right? Whether it's paying off debt or you've got real savings goals that you're trying to hit or whatever it is financially that is very important to you as a priority. Sometimes Christmas can really throw you off of your goals. And specifically when it comes to getting out of debt, it can really be just that thing that's like, oh,

it's a damper, right? Because it's like you want to participate in that traditional way where you're giving gifts and you're doing all the things. But the reality is if you want to stay on track and you want to hit your goals and you want to be responsible, you can't always do all of that. And so what does that look like? Does it mean that Christmas is canceled and we're never going to get to, you know, it's like you can really go into that mopey side of it. But

just over the years. And for those of you listening who do know my story, you know, like when you're paying off debt, it's tough. And for those of you don't know the story, like when Sam and I were paying off, you know, 400 and $460,000 of debt, you have to embrace Rachel, a whole new set of values and truths when it comes to the holiday season, if you want to get out of it unscathed with your peace intact and with your money and your budget intact. And so I

Like I said, I've been writing some budgets about some articles about this. And I just want to share with you and the folks listening some of the truths that I've embraced. And hey, poke holes in it. Like if you're like, Jade, that is so Scrooge or that is so like unrealistic. Hey, be my guest. But I'm just going to tell you what worked for me. The first thing on my list is and this is just to set you guys free. So if you want to be free, embrace it. You do not have to buy a gift for someone simply because they bought a gift for you.

Oh, yes. I would agree with that. I used to be that person that would buy like I'd go to Target and buy like a couple of inexpensive things just to have them on hand. So when someone gives you a gift, you can give it to them. Yeah. And I finally was like, you know, I in my church, there's a lot of folks that I'm friends with and there's like a lot of people in my circle. And it was just getting to the point that I was like, I am giving 50 gifts, like literally 50 gifts, like literally.

And I was like, I'm not doing it anymore. I would agree with that one. I'm with you on that one. And I think it takes away, it almost can be in this, if you're in that mindset constantly. Sure, it probably comes out from a good place originally. But then it just becomes, okay, you give me this, here, this. It's like the switcheroo thing that doesn't, you weren't even expecting. It wasn't even a gift, like you said, that you bought for that person because you saw it and you thought, you know what, I'm going to do it.

It's just this general idea. So yes, that's good. And a lot of times it's kind of like, honestly, it's kind of junky. Yeah. Like it's kind of like. It's like another candle. Yeah. It goes in the candle drawer. Yes. Yes. Yes. Yes. Okay. So then this one, this is what one of the things that Sam and I embrace in our family. Draw names. Yes. We do this. Draw names. On both sides. Yes. Because on my side of the, it was, I have three siblings.

then two nephews then my mom and dad then sam's mom his two sisters they're one two three four five seven kids like oh there's a lot yes so my thing is like okay draw names kids get them gifts but for the adults like in your family your nuclear and partially extended family yes draw names yes and can i tell you everyone wants to do that too they want to they're like oh no

no really look some people you know some people Christmas is a sport for them and they're like yeah they want to buy gifts for everybody and it's not that they're mad at you but in some way they kind of feel like it's ruining Christmas for them for there not to be a zillion gifts from everybody oh that's funny do you know what I mean when we talked about it all as adult siblings this was years ago because we've done this for probably 10 plus years or someone had that said that and it was separate conversations on both sides Winston's side and on our side and all

And all of us were like, thank you. Because for me, honestly, I'm just like, it's the amount of time. Time. Everything. And I'm like, everyone's already stretched thin. Yes. Especially when you have kids and all of it. So we found it's great. So we did. We do a dollar amount. Okay. And we say, here's the budget for it. Love it. That everyone feels good about. And then, you know, we stopped doing on Winston's side of the family. We stopped-

telling like, oh, send me what you want. Like text me something. Yes. We stopped that. So then your creativity has to kick in. So the thoughtfulness is in that because you have to think through like they haven't asked for this. Yes. I'm not clicking a link that they sent me.

I am, I have to figure out something for them. And it's great. I love that. I'm going to add that to the list because it also pulls back expectations because it's very different. If someone has said, and by the way, I want blah, blah, blah, blah, blah. And you're in your mind, like calculating the cost of that. And you're like, crap, that's not what I planned on spending. Then you are automatically feel an obligation to get them that. Whereas if it's just literally adults being adults, then that doesn't exist, which brings me to my next point, which

You don't have to buy gifts for adults. They're grown. They have their own money, their own job. If they want a new blender, they can go buy it. They do not need you to go buy them slippers. Like they can buy their own slippers, Rachel. And

And that's the thing. Are you saying from parents to adult kids? What are you saying? Because Sharon Ramsey this year, y'all. Sharon Ramsey was like, I don't think I really want to do Chris. Y'all don't. You sound like Sharon. Y'all don't need anything. Y'all are adults. You don't need anything. And my sweet mother-in-law, she's like, here's your budget every year. So we still get guests.

from Winston's parents. I don't think we get any from the Ramseys this year. I really don't. But here's the thing. Are you mad? Like, are you like, oh my gosh, they didn't give me a gift. And I'm like, well, fun across the continent. We'll see y'all on the 25th evening. No, no, we're not mad. We're not mad. It's, uh,

It's just funny. Rachel's like, I'm a little salty. There may have been a gift. The person shall not be named. Texted to my mom.

And she texted back. Yeah, I'm not sure we're going to be buying gifts this year, but thank you. Wow. I love it. A person will not be named. I am here for that. Look, if you're trying to get out of debt. Now, especially. Yes. Yeah. Getting out of debt. And if you're getting out of debt and there is an adult in your life who is mad that you didn't get a gift.

Okay, but what if you're living like no one else? The later you can live and give. Then it could be a little questionable. That's questionable. Oh, that's so good. I love it. All right. Again, this is for folks getting out of debt or have extreme goals that they're trying to hit. Here's the other thing that I've embraced. Okay. If you don't live by me, like in my city to where I can put the gift in your hand,

I am not sending out a gift to you. You're off the list. Oh, yes. Because I'm like, we're not even live by each other. Just like family friends. What are you thinking? Yeah. I'm thinking like friends that live far off your great aunt that you haven't seen. She lives in New York. You know, that kind of thing. I'm with you. I'm with you on that. You're off the list. Like you're not seeing them on a day to day cinema Christmas card. Kelly's face. Kelly may disagree with Kelly. What do you think? Girl, we're getting out of debt. Kelly.

She doesn't have a mic that can talk for good reason. Yeah, she probably... Don't cuss me out back there. I can read your lips. I don't think... I don't know if I have ever... Ever is an extreme statement. But genuinely, I don't think I've ever gotten like a...

delivered to my door and I open it and there's like a Christmas gift in there. That's never, I don't think it's ever happened maybe because we all have family in town. Is there closer? Yeah. Has that happened to you? Is that what you're thinking? Like you go wrap a gift and then you FedEx it to someone? Well, all of my siblings except now that I've moved but most of my siblings live out of state and it's like, I'm like, y'all don't have to send me a gift from California here. Yes, yes. I'm like, I don't know. I'm like, if you're in debt,

that I'm grown. Like I said, I can buy my own bed, bath and beyond. You know what I'm saying? So, okay. That's the next one. Babies. Okay. Do not need gifts. Don't need gifts. Let me tell you what I did. Actually, they have no clue. It is kind of true. You can literally take a gift, Rachel, and rewrap it. They don't know. They think, oh, this is great. I can just pull the paper off. They play with the paper, Rachel. What age is baby to you? Three? Three and up?

I mean, three and younger. I think two. I think two is the cutoff for being able to do that. I will say when you have one baby and they're 18 months old, they have no clue. That is. They don't know. That is fair. Like my daughter is three and a half. I could not do that with her. Like she. She would know. Yeah. Yeah. Yeah. We're out of that. Yeah. I think like the end of two, like getting up to two is like where you'd have to cut that off. Yes. All right. So babies don't need gifts. What I would do, I would focus on like.

the children in your life that are ages three to 18. That's the guilt trip you don't want to go on. You need to get those folks gifts. That's how we end it. That's where you want to be generous. It's the truth.

Man, Jade. I would have loved to look at like a list of all the people in Jade's life that could have gotten a gift and then just scratch them off one by one to like five people. Make it feel good. It's so great. Oh, thank you, Jade, for going through this hour. Thanks to everyone in the booth for making this happen. And thank you, America, for listening. Remember to take control of your money and create a life you love.

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 am Rachel Cruz, hosting this hour with my good friend and Ramsey personality, Jade Warshaw. And we are here to answer your questions about life, money, relationships, career, anything and everything. So give us a call. It's a free call anywhere in the country at 888-825-8255.

5-2-2-5. Up next we have, or up first I should say, we have Kristen in Houston, Texas. Hey Kristen, welcome to the show. Hey, thank you very much for taking my call. Absolutely, how can we help? Well, my husband and I are in a financial transition.

So we've been paying off our credit card debt for like the last two years. We've been chasing our tail with it. We're due to pay off our credit card debt by the end of December, maybe the beginning of January. Okay. Coming up. Yeah. Yeah. Thank you. It's been crazy. Yeah. Okay. So our next phase that we want to do is work on building our savings to

for down payment and closing costs to purchase real estate within the next year or two. This year, we made two big decisions. Well, actually, we made two big purchases and one big decision. We're renters right now, and our rent was going up, and my husband and I decided, okay, let's go ahead and move into an RV.

Well, I already had one that was paid off. I traded that in and we purchased one. And so that's what we're doing right now is we have a brand new RV and we pay space rent. So that's our housing. Then my truck, which was his truck is paid off, my truck is paid off.

But my truck ended up needing like $15,000 in maintenance repairs in the last year and a half. Just to turn right around, have another $1,500 repair, and we said, forget that. We need an upgrade truck for the RV anyway. And so we went ahead and made a purchase for a truck to pull the RV. How much did you spend? We owe $56,623 on it right now. $56,000? Hold on. Did you say you bought a truck for $56,000?

Yes, it's a 2021 F-250 diesel for $58,000. I'm shook. It was a deal. It was a great deal. But our monthly note is nuts. We've already done that with our budget and all. And Kristen, I'm going to just ask the assumption. It's on payments.

Yeah. Yeah. The payment, the payment is a nine 46 and some change. And we had to, yeah, it's nuts. Wait, hold on, hold on, hold on. I got to call you out slightly. It's the Christmas season. So I'm going to be a little bit lighthearted. First. You said it was a great deal.

then you just now turn around and said it's nuts and just for the record yeah it is nuts it is y'all just are about to pay off all this credit card debt you had two paid for trucks i'm just spelling this out for you well here's here's the thing is uh we we we thought about this we went through the budget we uh we did the budget on the net income not gross and how we could afford all of that and

And so we have it all in the budget. And everything together with the truck, the RV, and the space rent, we're at about $2,100, okay? But his truck is a 2012. My truck was a 2011. And high mileage on both of them. We cannot pull the RV with either one of his or mine. The difference is, and the hard part that you're going to realize is everything that you have that money tied up in is going down in value. Yeah.

And I understand that what you really want is real estate, but I don't think you guys went about the right way to get there. Probably not. But given our situation at the time, that's where we were at. Okay, so how much can you, let's just, real quick, Kristen, how much could you sell the truck for today? The 21 or the 2011? 21, the $56,000. The 21? Yeah.

It would have to be $56,600. Okay, so right around there. How much could you sell the RV for? Right now, it's sitting at $43,000, so pay off would probably be around $44,000, $45,000. Okay, so you do realize your truck costs more than where you guys live.

Right. Okay. So there's just parts of this formula, Chris, that I need you to see is not the wisest choice. And I need you to say, wow, we should not have done this because renting is not throwing your money away. What you guys did is you chose to take on more debt by getting an RV and then you chose to have to go deeper into debt to be able to move the RV. So you just dug yourself into a deeper hole thinking, you

It was the wisest, smartest thing to do at that point. But mathematically, financially, it just wasn't. It wasn't. And so for you guys, you guys have stepped backwards a lot in this process. So I almost would say, I want everything to be wiped clean. You guys had such a great track record with the credit cards. You were paying down debt, paying down debt. No, no, no. Let me tell you right now that when we were renting, he was making lower income at the time. And we were actually in more debt debt.

over our then you could have gone to a cheaper rent you could have no we couldn't wait no wait a sec wait a sec wait a sec let me draw it back we can't help you if you don't want help and here's the here's what i want to here's what i want to make clear rachel and i are going to look at this and we're going to go hey this is not the smartest choice we want you to be free and we want you to be out of debt now here's the difference because i i agree with you in the way that renting it doesn't feel good it feels like we're throwing money down at

you know, down a black hole. I could care less about renting. That doesn't bother me. I'm a real estate broker. I understand. Okay. But what you're not understanding, what you're not understanding here is it would have been better for you to rent because rent is not debt and you're just looking at the payment per month, but you're not looking at the grand scheme of it. Okay. Payment per month doesn't matter. It matters.

Does that make sense? You're looking like, oh, $2,100, it's less. But I'm like, yeah, but you're forgetting about the $56,000 and the $43,000 and then the land. Actually, $2,100 is more than what we were paying. How about this, Kristen? For you calling in, what was the main question? My main question was you, okay, it's not changing what we're doing. I understand your philosophy and everything like that, and I understand what we've done, and there's reasons why we did it.

Okay. And I understand. I totally agree with you. Normal circumstances. Sure. Where we're at right now. Okay. Okay. We will be freeing up about $3,000 worth of money every month once we pay off these credit cards. Okay. Which is about to be done at the end of the month and the beginning of next month. Okay. Maybe. Okay. We have $1,000 in savings every month. Okay. And we have one month's reserves for bills, all of them. Okay. Okay. Okay.

How would you best advise to put that $3,000 to our debt? Yeah. How much are you guys making a year, Kristen? In a year, his gross for this year is going to end up being, year to date, it's $121,000. $121,000. Okay. So he'll probably be about $130,000 by the end of the month. And do you add anything to that as well? No, not right now. Okay. Okay.

I will, but... So what I would do... I'm a little bit broke, so it's variable. So what I would do, Kristen, if you guys choose... We just say not to have... I know. ...things and motors and wheels that is more than half of your annual income. So if it were me, Kristen, I would be selling these two things, the truck and the RV, like I said earlier. I'd go rent somewhere...

free up this money, save up a good down payment for you guys to get a primary home for you and your husband. After three to six months of expenses, I'd put that in a money market account. If you don't want to do that, then the next move is you have to start paying off this RV, which is $43,000. And then you need to pay off the truck before you ever think about real estates. This is The Ramsey Show.

I've been doing this show for over 30 years and some of the saddest calls I've taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills? How am I going to pay my bills?

I'm going to eat next week. Yeah, in the middle of all that grief. Like it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here.

You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. So, Jade, I kind of want to just circle back. That felt like a phrase we all said during COVID. I'll circle back. Circle back. To that last caller, Kristen. And...

You know, I think what can be so hard is we can ourselves talk ourselves into something and into situations and be so clouded by maybe our own judgment, our own ways of thinking that

That we keep digging ourselves deeper into a hole. And you're thinking you're on the outside yelling down and no, come out this way, come out this way. And I feel like that's what we were trying to do with her is just to show and understand. And it's just the numbers. There's parts of this that you just go back to just facts and $900 a month car payment and, and, and everything. So, yeah, I mean, look, I,

I am the first one to say when I hear that kind of talk, there's not much we can do because you've already kind of painted yourself into this corner of my my situation is the exception.

And all of us can find somewhere where we can say that. But you've honestly got to commit to going, OK, I've got to just not make these excuses because all of us can say, well, the way my income is set up or well, because we were paying this in rent or well, because all of us can do that. And whenever you do that, you automatically exclude yourself from the solution. You automatically ostracize yourself from why a plan can't work for you. You just you create

You're the exception. And if you want to take on that identity, then that's the identity you have. And nothing we say is going to be able to help you. And I always hate when that happens because I'm a firm believer, Rachel, of the idea that whatever you look for, you find it.

So if you're always looking for the reasons that you can't do it, then you never will. But the moment you just say, okay, I'm going to open up my heart. I'm going to open up my mind a little bit. And just say, I'm going to try this plan. I'm going to try something different. Yeah, because look, and I don't say this to be anything but real. When I first heard your dad talk, he's brass. Like he's strong. He comes across. And I remember thinking he's got more money than I do.

He's figured it out. He's not living paycheck to paycheck. He's not in debt. I am. So...

I'm just leaving it at that. I'm just leaving it at that because at the end of the day, it's like, that's where you have, like, that's the way you have to see it as, okay, like I'm still trying to figure this out. I haven't figured it out yet. Right, right. Someone who has gotten a handle on it is telling me, hey, here's what I did. And if you're not going to take advice from a person who's done it, then you're always going to be kind of like trying to fight your way out of a paper bag. Yep, yep. And like you said, the light, somebody's shining the light going, it's this way, it's this way. Yes. It's your choice. Yep, absolutely. So good. Woo.

All right, let's go to Heather. They're in Illinois. Hey, Heather, welcome to the show. Hey, guys, how are you? Doing great. How can we help?

Hey, I'm actually like really excited I got on. Oh, I'm so glad you're here. So my husband and I are in baby step number two, trying to get rid of our debt. We have about $62,000 in consumer debt. And we bring in...

um, like $6,200 a month after taxes and insurance and all that stuff. Um, so I, we'd use every dollar budget, the premium to map out our paychecks. And, um, I was raised in church. So I was always taught that you give 10% of your, uh, take home pay, uh,

back to church, like to the Lord, because it's his, anyway, he's just giving it to us to manage. Um, so in doing that, I typically budget about $600 a month. Um,

in tithing. And after our expenses are paid for the month, we have about $150 extra to put towards our debt repayment. And we're pretty on fire to try to get rid of this debt. So my husband got a work truck that he, we don't have to pay for anything of it. He gets to drive it wherever he wants. So we actually sold my nice car and I drive his old 2005

four-door truck because it's paid for. Yeah. So we are just trying to get after this. And my question is, do I can continue to give the 10% to church and,

At this moment, or do I cut it down to 5% or just pause it to take the extra $600 to get rid of put towards our debt each month? I'm just kind of at an impasse. Like, I kind of feel guilty doing that, but I don't know what else to do.

Yeah. It's a, yeah, I think it's a, I think it's a fair question for sure. And what's funny, Heather, is we get, I get hate on my, the Rachel Cruz show for certain things. And recently it's been this, it's been giving. People have not been happy with the fact that I am pretty set in my ways when it comes to the giving part. Wow. Yep.

So Heather, what I would say, okay, so there's kind of two ways I look at giving. One is from more of a spiritual aspect. If you're someone of faith and then people that are not, there's still a factor here. So for me, giving is,

in general, regardless of where you stand spiritually, it is a practice of character. For me, there is something about the continuation of giving and living with an open hand as a practice that I want ingrained in me so deeply, regardless of where I am financially. Because I am a big believer that as that becomes a habit and then you guys start winning, people think, well, if I just had more money, I would give and it would be easier. And the truth is, Heather, that's not necessarily the case. Sometimes when you get more money, it's not necessarily the case.

It's almost harder. Yeah, it's easier not to give the opposite way, which sounds so backwards, but it's just crazy how our minds work. And I always want money to be in a healthy position in my life. And so to have it far out with an open hand, that's always my stance. And then if you are a person of faith, which you said you are, you know, I never want any part of my faith walk

to be legalistic. Legalistic stuff, it grosses me out. I hate it. I don't like it when people are like, you have to do this and this and this. You have to read the Bible this often. Anything like that rules. I'm like, nope, that's not my thing. You go the opposite direction. Yeah, I'm not a legalistic person. So I don't want your giving from the spiritual lens to be out of legalism because that defeats, I think, the whole purpose of it. I think there's so much in scripture about

being a cheerful giver and the why and the participation that we get to participate in something bigger of what God is doing. And I'm not a prosperity person either. I do not think that if you give, you will be given back monetarily always. I think sometimes God blesses us, but I don't think it's an A, B equals C thing there. But what I do see though, Heather, and I can say this with confidence, people that give, and I would say even people with faith, if you put that layer on top of it,

There is a sense of joy. There's a sense of peace. There's something in there because it is bigger than just the paycheck that's hitting your accounts. The gifts that you're giving, the consistency of giving and giving back to the local church, which is the tithe,

There is something there that I am choosing to participate in what God is already doing. And so for me, it's yes, the obedient factor, but there's also the joy, the contentment, learning to live with what you have. That principle is kind of forced in there, especially on a tight budget like you guys are. There's just so many of these character benefits that come out of giving that I can't in good conscience just say, don't do it.

Now, I understand it is tight and some people choose, Heather, and I think you're a big girl and you get to get off this phone call and you guys get to decide. Some people choose to lower it. They do certain percentages, but I do stick to that 10% because I think the challenge of it is healthy. And I think the habits that it causes in us...

I just see so many positives. And yes, it may take longer to get out of debt mathematically, but I think it forces something in all of us that I think we just need as humanity. Look, I'm with

I'm with Rachel, you know, and I can speak to you Heather too, because I, you know, getting out of debt. You guys, yeah. The long journey of it. It is the biggest temptation. Like, and I'm going to speak to it through that lens since you said you're a Crest follower, I'm a Crest follower. So we'll speak to it through that lens, but it is a temptation. Like that's the first thing you go, well,

Nothing's going to happen. Like, nothing's going to happen. It's not like they're going to cut my lights off if I stop paying my tithe, right? And so, but I do think for us, like for Sam and I, it was an opportunity to really test God the way he says to. He's like, test me in this and see if I'm not going to throw open the floodgates and pour out a blessing that you won't have room enough to receive. And like Rachel said, you don't know that it's going to be money, but it will be a blessing even if it's just...

the intentionality in your heart to keep going. Like he's going to hold up his end of this thing. And when you build his kingdom, he builds into you. And it's not like it's a quid pro quo, but it's something you get to participate in. And when you do that, the scripture does say that he does overflow that blessing. So we're saying stick with it, Heather, all the way around. Such a great question though. Thanks for the call.

Today's question of the day is sponsored by Neighborly, your hub for home services. When was the last time you thought about your dryer vents? Clogged dryer vents are

are a cause of thousands of house fires every year. So let the experts at Dryer Vent Wizard clean yours. Visit neighborly.com slash Ramsey to schedule service today. Wow. Today's question comes from Brooke in Kentucky. She says, my husband listens to you every day, so it would be amazing if you would set one of us straight. Here we go. We got into debt when we were in our early 20s. We found the baby steps and haven't looked back.

Our home is almost paid off with no other debt. Kids have enough money in their college funds and we put 15% of our pay into retirement. I've always been a stay-at-home mom, homeschool the kids and work full-time from home. Way to go. Here's the problem. When we go on vacation, I want to stay in a nice hotel and a fancy room. I work very hard and am not happy unless this happens. My husband doesn't get it at all. He says, we just sleep there. Why spend the extra money?

Financially, the extra cost is in the budget. I don't spend any money on myself. It's the one thing I want to splurge on. I want my husband to recognize my hard work and show his appreciation by getting the nice room. Who's right? If it's me, what can I say to make him really understand? Oh, my gosh. Number one, Brooke, you're right. Yes, you are right. Oh, man, you're right. Oh.

always splurge for, here's the deal with a vacation. If you go back to a place you hate, it just takes away from the vacation. Maybe I'm girl mathing this, but when you go to a place that you love, it changed. I'm like, I would cut on food before I'd cut on hotel for me personally. Yeah. A nice hotel or nicer hotel all day. Oh, all day. Look. And,

Rachel, look, I'm just. Listen, Jay and I have stayed in some really bad hotels in our days. Yeah. Don't do it. I'm not risking finding a hair in my bed. I am not risking, you know, the way the sink looks when it's old and crust. Like, I just. Yep. It's not worth it. It's not a vacation. And especially if you have the money. Yeah.

Yeah. Okay, so Brooke, here's the thing. I want my husband to recognize my hard work and show his appreciation by getting all of this. This is y'all's money together. True that. So like him deciding all of it, I'm like, no, you get an exact say in it. And sure, I want him to appreciate you

And your hard work, regardless of vacations and hotel rooms. That's really it. That was kind of the weird. I don't like that. It's like he gets to he gets to decide this and all of that. I don't like that. That was the only weird part about this whole thing is I don't I don't know that I view the vacation like when when Sam and I go on vacation. I'm not viewing it as this is your chance to appreciate me. Right. That's right. I'm thinking of like, OK, like this is our family's chance to get away. Yes. And.

In my opinion, the whole point of staying in a hotel is to be somewhere a little more luxurious than where you are. Right, right, right. And don't get me wrong. Everybody's budget is different. Yes, yes. I mean, once she said it's in the budget, I'm like, give me the green light. It's the green light. All day. I know. Hope...

Brooke, we're on your team and I think your husband appreciating you or you wanting to feel more appreciated. Whatever that looks like is a conversation outside of the vacation conversation. And you could try and find a way to relate to him. Like whatever he's into that he would be willing to spend money on, kind of try to find a way to parallel it. Like if he's into, I don't know, like golf, just say, hey, like you wouldn't want me to go buy you a

I don't know what is a nine iron. Like, I don't know, like try to find a way to relate it. Be like, you don't want me to buy you a nine iron from Walmart. So don't, don't try to buy me a, you know, and just kind of relate it to something he understands and he sees the value in. Maybe that'll help. That's good. That's real good.

Oh, man. Yeah. You know something I know the value of, Jade? What? Our friend George Camel's new book. Georgie boy. He's got a book right now, you guys, on presale called Breaking Free from Broke. So make sure to check it out. He exposes some of the most common money myths.

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Quick read that is in the store as well. Money's not a math problem. That's in there too. So check that out at RamseySolutions.com slash store. All right, up next we have Delaney in Washington, D.C. Hi, Delaney. Welcome to the show. Hi, guys. Thanks so much for taking my call. You're so welcome. How can we help?

So my husband and I are kind of going through a lot of transitions in life, and we have recently made some decisions that I'm not feeling so sure about anymore, so I thought I'd call in. Okay. So for some background, he's 30, I'm 23. We got married last year, and we now have a two-month-old baby girl. Okay.

Um, we live outside of DC, um, actually Northern Virginia. Um, and I was on maternity leave for a couple of months, um, and then have now dropped my hours to part time. Um, and with our annual household income, we just can't afford rent anymore where we currently are. Um, our lease is up at the beginning of January and they were going to increase our rent by quite a bit. Um,

So we were kind of figuring out where we want to be. Um, my husband is in defense contracting and, um, in a couple of weeks is going to be going completely remote. Um, so we kind of have a lot of leeway in terms of where we want to be, um, with him probably still having to make occasional trips into his office in Maryland, but, um, not very frequent. Um,

I'm from Vermont and have lived there up until last year when we got moved to Northern Virginia for my husband's work. My husband is from Houston. And so we are...

We kind of found a place a little bit further out because we do really like the area we're currently living in to get a little bit more house to rent for cheaper. But now we're just crunching the numbers with what my take-home pay is since I'm part-time. And it's kind of stressing me out. It's still too much, I think.

And so we're just trying to figure out where we want to move. And I don't feel like we have a lot of time to figure it out because our move is currently scheduled for next weekend. Oh, wow. Wait. Yeah. So where are you going? So we're going to be in still northern Virginia, but out in Leesburg. It's like about an hour and a half away from here. OK. And that plan is not feeling right still. Right. Because of the rent. Right.

Yeah. And another big factor, I think, with finances, and we're currently in baby steps too, but finances and also just it's definitely been a difficult transition. Me being a stay-at-home mom and now working part-time and not having any family close by. We have a few friends that we've made in the last year and a half we've lived here, but it's been really challenging not having family. And so I think that's another thing on my heart. For sure. Go ahead. Is

Is it for his, like, cause he's going to be able to work mostly remote. Is that what you're saying? Yes. Yeah. Does he want to move back? So he isn't really, we haven't found places in Vermont. Um, the renting market is horrible. Um,

Um, to be close to my parents, um, they've offered to let us move in, but, um, I mean, I would love to, but my husband is definitely not on board with that. Um, so he is okay with making it work. Um, it's a new place out in Leesburg. Um, and, and he's also in school full time right now. So, um, once he's graduating with his degree, um, in like a year and a half, two years, jobs will open up quite a bit and then hopefully we'll be able to increase his salary by quite a bit. So we're still, um,

You know, it's just, it's budget's going to be tight if we move there. And then Houston is the other option. It's a lot cheaper, no income tax, and we'd have his family close by. I've visited Houston many times since we started dating. And I just, every time I'm there, I just can't wait to leave. Yeah, it's an acquired taste.

For sure. It's just really, it's, it's really hard for me. So Delaney, we're up against the clock. So I hate to cut you off. I hate to cut you off. But so what I would say is that for on the financial aspect, I think it's going to be really imperative that you guys find something that's at least, you know, 25% of your take home pay. And I think that's going to relieve a lot of that feeling of, oh my gosh, how much do I have to work? You know, and like that financial stress, but also Delaney, I'm like, this is,

you and your husband, you guys have to figure out what do we value? What do we want out of our life in the next season? Do we want to be close to family? I mean, how much of this is, you know, you guys having to transition into like a, it's a different life, right? When you're married with a baby, it's, it's, it's a grownup world now. And if you want to stay home full time, part time, you've got to set yourself in a situation where you can actually do that. And that there's going to be some form of sacrifice, whether it's where you live, how much you work,

if he's in school now or saves it for later, there is going to be a sacrifice that has to be made. You guys have to decide which one it is. Welcome back to The Ramsey Show. I am Rachel Cruz hosting this hour with Jade Warshaw and taking your calls.

Just your friendly reminder, you guys, as everyone's doing their Christmas shopping, make sure to go to RamseySolutions.com slash store because we have our Cyber Monday sale all week long this week. And it's everything from every dollar premium for $49.99. You can get a gift card and even give that as a gift. Audiobooks as low as $7. Junior's Adventure Storytime Collection for $14.99.

books from myself and dr john deloney and ken coleman and dave ramsey uh books in there that are yeah as low as you know ten dollar sales some twenty dollars so make sure to check that out at ramsey solutions.com store as you are doing your christmas shopping all right up next we have melissa in minneapolis hey melissa welcome to the show hi thank you guys so much for taking my call absolutely how can we help

So my husband's about to file bankruptcy. And to the best of my knowledge, my name will not, I don't have to, this is related to a business line of credit that when he took it out with a former business partner, he signed a personal guarantee. I don't know that he was super aware of the implications to that at the time.

That happened, I think, back in like 2018. And then the business shut down with COVID with an insurmountable line of credit that at the point just was not able to be paid back. We've been working for since 2020 with a lawyer to reach a settlement and try to, you know, do the best that we can to pay some of this back at least to the bank. And they've denied us every time. How much is it? To a point now at $800,000.

Oh, Melissa, I'm so sorry. Half would be his, half would be the partner, but, you know, they don't really, they're not looking at it individually at this point. And so at this point, they said it's a thing that they...

He's not at all the conversations with the lawyer. He's like them. Like we had a call yesterday and I'm like, is there any other option? And he's like, do you have 800,000? I'm like, no, we certainly don't. What's the business partner doing or the ex business partner, I guess.

We don't really have a relationship any longer, so I don't know. And I don't know that they would have it either, to be honest. I'm not sure. We really have no idea. So are they on the line for this or just your husband?

Nope. They are too. So they've also been working with a lawyer. We just don't have any like personal relationship outside of that. So, okay. But the expectation though, is that he has to come up and I see that they're seeing it as a whole 800,000, but if there's a business, if there's another person whose name is on the loan too, that doesn't factor into it. So they either like both are filing bankruptcy or they both have to come up with, you know, half, um,

So the partner is going to be filing bankruptcy as well? Correct, yes, to the best of our knowledge. So you do know that, okay. And just to clarify, is that what the court is saying, that they both have to take the same course of action? Or if the partner files bankruptcy, does your...

does you and your husband still have the ability to just pay off the $400,000 if you choose to? Like on your own time? No. If one files bankruptcy, then it would be the entire. So then that's where it would be $800,000. So I'm like, can we, like if we take the whole thing, will they have a little more pity on us? Like we've asked to settle. We've, you know, offered different lump sums. We've offered different payment plans over, you know, six years. Or like, can we pay like $200,000 of this over the course of five, six years? They,

And in lack of better terms, they've actually, this has been, like I said, since 2020, the attorneys are quite young for the bank and they keep changing. So we've been ghosted for like nine, 10 months at a time where we're like, oh, this might actually just, there's a statute, I guess, that we were like, well, we might actually hit that and this might just disappear. What's the statute? They keep dropping the ball. It's got to be at least a decade.

It was six years from what we had heard. We were about halfway through, but then they filed last December 31st. They filed something. I'm not exactly sure the terminology, but essentially they filed that, which gave us one year. But then come this December 31st, had they not responded, which they hadn't until last week.

It would have been dismissed. But then they came back next week and they were like, all right, this is, you have till December 8th. Is the balance growing or is it like, is it frozen? There is, there's interest growing on it, but they're not really pursuing that for some reason. They're more just going after, you know,

the lump sum of like kind of when the business shut down, it looks like, I mean, because of the total on the last statement I got was over 900,000, but they're asking for like 817. So what chapter are they going to put you guys in? Do you know?

Well, when I've read about it, I'm thinking seven. Yeah. Just because of the ability to pay this back and everything else that goes along with 13. Yeah. It seems like seven is our option. The stick to that is like we were just about to pay off our cars. We don't have other debt. This just feels wrong, but yet we also just signed it. I mean, yeah, and that's a little bit of that hard reality of...

And my dad, Dave, talks about this a lot with, you know, his story of bankruptcy. Yeah. I mean, like there's there's a truth that it feels like the system. It's like, man, make it half. You know, I mean, like the system part of it is frustrating. Right. But then at the end of the day, this is.

This is what happens, you know, when, when you sign your name to something and it's heartbreaking and terrible as it is. Yeah. It is what happens. How is, how is he doing? Your husband? He's actually, I mean, his attitude toward it is much better than mine. I'm like, this is pain and anguish. This is a devastation. He's like,

Yeah, this really stinks. He was like, but we have to just move on. Like, this is going to happen. It's going to be wiped out. He's like, and we just move on. He's like, we're almost on cash anyways. Yeah, that's what that was our goal. That's where we want to go. So we're almost there. And then the attorney said that you basically once we file, it stops.

the bank from being able to like do anything to us about this 800,000. Right. Garnish wages. And the next day you can just move on, you know, I'm like, we just move on. I'm like, okay. But the, I guess the, the kind of things that we're not super clear about are that we're being told by the attorney to do one thing. And that I don't agree with is like our cars. We, so we have some loans on our cars, but the way our income works is my husband kind of makes like

large chunks of money at a time so we'd be able to pay off like we have about 11,000 on one of his cars that we were just let pay off last month when this kind of came to light that it's like no don't pay off your cars because there's we can only keep like there's like 5,200 of equity that's protected in vehicles and then they can take the rest so like if your car's paid off yeah you know don't do that like okay we're holding you know but I'm like we're really close like

to paying that stuff off. And now we were told to turn the cars in and lease them and lease a different car instead because then we don't technically own it. But then I'm thinking in three years, then his car, I'm assuming it'll be trashed and the lease is up and we'll have sunk a bunch of money in that we couldn't save. And then what? You know, I'm like, I don't know. What about your home? Is it protected under like the, like do you have the homestead protection? No.

Our state protects our equity up to $450,000. So I know that with what we owe on our mortgage and our house's worth, that's been pretty clear that our house is safe. Okay, that was my number one question. Yeah, so that's all safe. There's going to be something he said with this that called a reaffirmation of the loans basically after it's filed because there is going to be something that happens with the house even though it's like we've never missed a payment. We're not behind anything.

at all. He's like, it's just, unfortunately that's,

But it's assets. When you do a personal guarantee, it's your life there. I mean, yeah, that is. And that is how people lose their houses and everything. Yeah. Yeah. My name is not on this. And I guess there are marital protections, which help us as well, because my name wasn't, you know, I was not part of the business, any of it, you know? So there's a little bit of that, but yeah. So the house is safe. The car's,

It sounds like you're about to walk through a really difficult season.

And this is a season where you guys are going to have to hold on to each other. Absolutely. I was going to say, I mean, it does not, it won't take you out, right? People have recovered and have changed their family legacy because of this event like this. And that's what we want to see you guys' story go through, Melissa. But it is gut-riching to the identity and the core of who you guys are. And so stay with it. Thank you so much for calling. This is The Ramsey Show. ♪

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and Ramsey personality, Jade Warshaw, and we are taking your calls. It's a free call anywhere in the country at 888-825-4255.

225-225-5255 answering your questions on life money relationships career anything and everything so first up we have calvin in portland oregon hey calvin welcome to the show hey how are you doing we are doing great how can we help

I just wanted a unbiased opinion on this. I just made it to baby step three right as I was transitioning jobs. I had left a previous company due to some disagreements about the way things should be done and undercutting management and so forth. The company I came to had made some promises and benefits. They matched my pay.

But when I got here, they didn't hold up their end on a lot of things. They're doing some shady stuff, not following kosher regulations, and we're really kind of scurrying over the residents by not taking care of the units that we're turning. Currently, I have a potential job offer with a pretty reputable company who's offering better benefits to businesses

A retirement fund, a better schedule, things like that. Okay. How old are you? 22. Okay. And the first job you left, what was the disagreement over?

Your last job. I had been promoted after working there from a service tech to manager after a year and a half. Whenever I got the management position, I was pulled aside and told that I'm the youngest in the company, I'm inexperienced, and they're going to be taking charge of my property.

And that was something they hadn't done to any other manager before. Whenever I tried to talk to HR and things like that, try to come to some kind of solution, it got pinned on to me. And eventually my schedule started getting changed. They started threatening my job. And so I ended up putting in my two weeks. Okay. Can I ask a clarifying question?

Um, when they pulled you aside to have these conversations, was it, was the reasoning simply because you were the youngest in the company and some people didn't like that? Or was the reasoning you're the youngest in the company, therefore we're finding like performance issues? Was, was there any performance issue on it? Or it was just like, we don't like that you're

doing well at a young age. Does that make sense? Am I missing something? No, that makes sense. And that's one of the things that I was struggling with understanding and had tried to get clarification because I had never been written up. I had been talked to probably one or two times, you know, just flip up previously. But other than that, I had good reviews from my residents. Everyone else was saying I was doing a good job. Everything was kept up. Yeah. And Calvin, what's your line of work?

Oh, property maintenance. Property maintenance. Okay. Yeah. Because I think the thing about careers and stuff, and if I was talking to 22-year-old Rachel, I would tell her this. There's a lot of crappy businesses out there. There's a lot of crappy bosses. There's a lot of...

stuff that you run into and you're just thinking, oh, wow, these people don't keep their word. They're doing some shady things like that is a reality, Calvin. That is a reality. There's also a reality, too. And again, I would tell 22 year old Rachel this, that Rachel, you don't know as much as you think you might, you know, that there could be problems within different circumstances that are Rachel problems.

Rachel may think it's everyone else's problem, but it's really Rachel's problem. And Calvin, I'm not saying you're one or the other, but usually that's what we find, especially if, you know, when you say...

know, you there was a job you just left because of questionable leadership, which could be very legitimate. And then you come to a new job and find out again, just like point A, there's crappy people and crappy businesses. You were thinking, oh, geez, I picked the wrong one. I need somewhere that's reputable and great and you're going to thrive and it's going to be awesome. Right. I am going to give you the benefit of the doubt that that is your situation. But I would say also, Calvin, just to have the humility always and

And I still at my age in this too, that when issues do arise, there are times that it's us that were the issue, not always everyone else. So just always keeping that in the back of your head, Calvin. But if you really are working for a company that did not hold up their end of the bargain,

And did not do things they said they were going to do. And then even the way they run things, you just don't morally feel good about. That is a valid reason to switch. So if you have another opportunity, even if the opportunity didn't even have all these great benefits that you laid out, that would still just be a reason to say, I don't feel comfortable working. Because if I can't trust them,

to not comply with certain regulations, I can't trust them with me, right? As an employee and how they're going to treat me. Oh yeah, that's right. And then if for some reason this one doesn't work out, then you do have to do what Rachel said and be like, okay, maybe I'm, what's my job process selection looking like? Am I going on the Craigslist and looking at stuff that's just like the wrong option? But I'm with Rachel 100%. I do think that, I think you're young going in, as much as you can

Ask really clear questions going in of and really understand what the expectation is for your benefit. Anytime it's like, OK, when I get here, what is your expectation? What does when you say this is what we expect you to do? What do you mean by that? Like get as much clarity as you can. So, you know that you're hitting your mark. Right. And I think that's the best thing that you can do in this next situation. Absolutely. Up next, we have Kevin in Huntington, West Virginia. Hey, Kevin, welcome to the show.

Hi. Hello. How can we help? Okay. I have, I'm not very familiar with your all's stuff. I've kind of just started watching some of your highlights and stuff on YouTube recently. But enough to get an idea, a basic idea of like the debt snowball stuff. And I've gotten myself into a little bit of a bond. Like I'm not,

I'm not drowning yet but I kind of see that if I keep going the way I'm going I've kind of just been jumping from crisis to crisis and juggling everything and making it work for a while I kind of see that if I stay on that path that I'm going to be drowning before too long so Kevin we're up against the clock a little bit so I want to make sure we get to your question and situation so how much debt do you have?

I have $63,000 total. $47,000 of it is between cars. $2,900 of it is credit consumer debt. I have $9,000 student loans and $3,800 in collections. Okay. Okay.

Some of the credit, some of the consumer debt is like rent-a-center kind of stuff, like weekly payments. And my question is, those aren't necessarily the smallest payments.

You know what, Kevin? I'm going to keep you on hold for a second. We're heading into a break, a hard clock. So if you'll hold on to the hold on the line, putting you on hold, we're going to come back to you after the break so that we can really walk through these numbers, especially as a new caller. I want to make sure Jade and I kind of get a full picture of your situation and help you best, because I think this could be a turning point for you, Kevin. So stay on the line. We'll be right back with you.

So we held over a call from last segment and we're going to talk to Kevin in Huntington, West Virginia. He's a

newer listener to the show and has $63,000 in debt, everything from cars, credit cards, student loans, and trying to figure out, you know, this feeling that he's on the cusp of possibly living crisis to crisis, like he's kind of right at that edge and possibly wanting to do some things to change that. So Kevin, thanks for holding on the line. Yep.

Okay, so as we were talking, you were saying some of your consumer debts, I think of the $2,900 that was credit cards, is also, you were saying, was it furniture from Rent-A-Center? Yeah, yeah, like stuff like that, like a bed. I had to buy tires for my truck, and I financed it, weekly pay kind of stuff. How much of it is that? About $3,000. Okay, and what does that amount to monthly?

Well, it's weekly pay. Okay, weekly. Each one of those comes out weekly. The cheapest one is $21 a week. The other one's $30 a week. The other one's $74 a week. What happens when you give back the Rent-A-Center stuff? Like what happens if you're like, I don't want to rent it anymore?

Nothing. They just get it back. So the payment's the payment. You can't say, I don't want to rent it and get out of it. No, I can take it back, and I just don't have that stuff anymore. And don't have the payment. The tires, I couldn't. I don't have the payment anymore. Okay. I would go through and go, what can I give back? Like, obviously you need tires on your car, but is there a way that we can...

Save up some quick cash and get you the tires you need and get because I want you to get out of that as quickly as possible because the interest on that I'm sure is not great.

No, it's not. And that was my question because I recently got my side hustle. I got a job basically to do nothing. I'm on call for a record service where if I get a call, I have to go out and work. But it's overnight and I usually don't get called in three hundred dollars a week. And I can get out from under like the one is two hundred six dollars so I could pay it.

off the check and that I'm off from, I'm out from under that one. And that frees up 2132 to roll into another thing with the debt snowball. Yeah. I, for me, things like Rent-A-Center, that's akin to like payday loans and stuff. It's really just scraping the bottom of the barrel. So I'd want you to get that stuff clean. And honestly, like I said, I'd be looking and going, what can I just give back? And if you're making $300 doing this wrecking service, how quickly can you save up what you need for tires? Yeah.

You know what I mean? And just get yourself back on your feet in that way. And then you've also got this debt and collections. And so the way you listed it out, you know, 47 or $47,000 in cars, 29,000 in credit. I want you to go through even further with a fine tooth comb and really list everything.

each debt in order from smallest to largest because that's going to give you not only a clearer picture of truly what's going on but it's going to break it down in a way that you can like you just said hey this one is for you know two thousand dollars i can i can tackle that and it's going to help you see it in its smallest form so that you know okay like what is it going to take how many hours do i need to do okay i can pay that one off and you're just going one by one line by line

Yeah, for the cars, Kevin, how much? You said $47,000 for cars. So how much is each car? For my truck, it's $700 a month. Or what's the total loan? Sorry. $22,000. $22,000 for your truck. Okay. And what's the next car? My wife's SUV. It's $24,000. $24,000. Okay. And then $2,900 on credit cards. Yes, that's including the...

The rental centers? That's right. You were saying that. Okay. Yep. So yeah, if you'll break those out per credit card, per rent-a-center. $700 on one, $300 on another, $1,000 for a bed, $500 for my tires, and $200 for a computer. Okay. And then...

Like if I paid off the computer with the check that I get today. Yep. Yep. Yep. That's exactly right. And then $9,000 in student loans. Is that right? Yes. Okay. And then some in collections. What's your income? Like you and your wife's combined income? Combined our take homes of just over a hundred thousand. That's a take home. Okay, good. So $63,000 in debt, a hundred thousand take home.

You know, there's a part to this where I go, OK, what would happen if you guys lived on sixty thousand dollars and you're going through this? You've got forty thousand just in your money that you can put towards this every year. Plus three hundred a week side hustle, the side hustle and your wife getting a side hustle. When you look at it like that, you realize, Kevin, that this can you can knock this out fairly quickly. Eighteen to twenty four months.

Right. Well, that and yeah. And I like that was why I called because like the debt snowball, it's it's I think it's the list smallest, the largest. Right. That's right. Exactly. And like some of these weekly payments aren't smallest. But if I attack the weekly payments first and got them paid off really quick, that has me paying like twenty five hundred dollars a week towards the twenty five hundred dollars a month towards the next. Well,

Well, the smallest to largest is not the payment size. It's the size of the debt, the total debt. Oh, okay. So you look at, like you said with those renters, I think you said one of the total debts was $200. One of the total debts was $300, right? Yeah, so those would be my smallest. That's right. I was thinking payments. Nope, by the balance, by the full balance. And you want to stay current on everything. So you'll stay current on all the payments, pay off that smallest. And then, Kevin, you guys, you and your wife...

Because, you know, I mean, even just this picture of the debt, this isn't to shame or embarrass you, but, you know, it's a picture of like, this is normal. Like you guys were just kind of doing what you wanted to.

And you make great money and you're probably feeling like, how are we broke? Like, how do we feel like we have no money and we have to go to rent a center for our furniture when we make a hundred thousand dollars a year combined? Like this shouldn't be like that. This is not how it should be. And so as you guys start this process, Kevin, I would really encourage you to lean in when you start to feel these wins and

because I would bet you, Kevin, that you guys may look up at the $24,000 SUV and be like, man, could we sell it for $26,000, get 2K, and get a crappy car for a little bit, and knock this out even sooner? Because there's a taste of freedom, Kevin, that you guys...

guys have never had, have never experienced. And for you and your wife doing this process together, it is huge. It's huge. So I want you to stay on the line because we want to give you Financial Peace University for you and your wife to go through together. And you guys, it's our seven, it's our nine lesson course. And you guys walk through that and Every Dollar Premium. And this is our budgeting app that connects to your bank. And it's really going to help you guys list out

very specifically, hey, here's our paycheck. Where is it all going? This is going to give you a roadmap to get this stuff paid off. And I think, yeah, with the side hustle and everything, Kevin,

This is it. I mean, yeah, your question was, what's the best use of our side? 18 months, I bet. Yeah, our side hustle money. And it's just, yep, throw out that smallest debt amount. And as you guys start to really make this traction and this progress, you're going to feel it. And it's going to be amazing. And we're here for you. So keep watching the show and listening for that encouragement because the way you're going to view money is totally different than how you've lived. And it's going to feel uncomfortable at times. It's not going to always be fun.

during the season of sacrifice, but the more you guys sacrifice and really buckle down, yeah, the traction you're going to see is amazing. Look, and you hit the nail on the head, you know, $100,000. You think, all right, we're doing well. Like the average family is somewhere around 67,000. So if you are above that mark, kind of status tells us, hey, that's good. You're doing well. And it does feel weird when you're like, wait a minute, I'm buying my furniture at Rent-A-Center. Like I told you. I can't buy tires. I can't buy tires. Yeah. And

you know, I told you during the break, I knew this couple, they were older than us. But when I was in college, I went to their house and I remember them saying like, our furniture is from Renicenter and they had two giant SUVs that were brand new. And I remember thinking, wow, they've made it. But they...

Their situation was probably very similar to what we just heard. And I've said this before and I'll say it again. When you start to make these changes, it will show. So if you try to do this in a vacuum or in the quiet, like you have to just accept, hey, if I really want to do this and I want to do it faster, I might drive a different car. Yeah. Like people might see me going from driving a 2023 Infiniti to

down to you know a 2015 camry and they may ask me questions about that and that is okay number one it's none of their business unless you want it to be their business but if they ask you there's no shame in saying you know what we were out of control and we're getting our life back yep like let

Let's normalize that as the status symbol of, I'm getting my life back and I am being a responsible adult. And when you give back that bed to Rent-A-Center and give back, you know, the tires to Rent-A-Center, that is you being a responsible adult.

Welcome back to The Ramsey Show and standing on the debt-free stage, we have Connor and Julian with us. Welcome, you guys. Hello. Thanks for letting us be here. Well, congratulations. We always know when there's people with headphones on the debt-free stage that there's always a good story. Where are you guys from? We're from Oklahoma City. Okay, awesome. And how much debt did you guys pay off? We paid off $288,000.

Amazing. What kind of debt was it? So it consisted of student loans, rental property, as well as our primary residence. Paid off your house? We did. Amazing. How much were you guys making during that time? We started at $74,000 and finished right around $103,000. Okay. And how long did it take you? 38 months. 38 months. Amazing, you guys. Okay. So 38 months ago.

What happened? What caused this radical change of paying off almost $800,000 of debt? So I got started on the plan before we got married. We were still dating at the time. And once we got married, we hit it hard. I told her kind of the game plan. She knew what she was getting herself into because I was already hardcore on the Dave Ramsey plan. And so then from there, once we had a combined income, we just hit the ground running. Wow.

Okay. So what was the debt? I guess what was the debt going into the marriage? Was it who had the rental property? Who had the student loan? So I had the rental property. It was actually a previous primary residence from my first duty station. Okay. Wow. So my question is, I'm looking at a rental and a house. What are those properties worth?

So that was kind of the key. That was how we paid off. We sold the rental property, which was a big part of paying off our primary residence. Wow. How much was that? How much of that was... So we sold the rental property. We left with about $100,000 in equity when we sold that. Good for you. Amazing. So that added, of course, to the $288,000. Absolutely. Amazing. Was that a hard decision to make? Because a lot of people...

They call this show. They love a rental property. They always want to keep it. And especially in the military, it's definitely not the norm to not keep the property. But I had purchased that property right before kind of really diving into the Dave Ramsey plan. Yes. So I knew when we left that that was the best decision to make. Okay. And what branch of the military are you in? Army. Army. Okay. Thank you. Thanks for your service. Yeah, definitely. So what...

What caused you to dive into the plan? Like, how did you get acquainted with this plan? How did you find it? What was your first reaction? So I have always been pretty financially oriented. I've always had an interest in it. But I think my dad was getting tired of me asking him questions about finances. He purchased the...

Peace University CD bundle and had it shipped to my house. I went listen to that about two times over on my way to work every day. And I just bought in, dove in headfirst. So great. And how long have you guys been married? We've been married for just over three years. Three years. Okay. So Julian, you knew what you were obviously getting into. He's very focused. He is very. You can tell. Connor knows what he wants. Oh, yes. So what were you thinking when you...

when he brought this up. I guess I'm assuming when y'all were dating even, this was a conversation. Oh, absolutely. So I was not a stranger to Dave Ramsey. My parents in high school made us do the financial peace class with our youth group. So when he told me that he really wanted to do it, I said, I mean, that's fine. I'm not the money person. Don't ask me my advice. So I was...

I was ready to do it. Yeah. It wasn't as hard to switch using like just my debit card to just using like straight cash. It wasn't as hard as I thought it was going to be because it made me actually, you know, like not spend all my money. It made me, you know,

Budget. Yeah. So you went like full cash mode, like full cash envelopes. Absolutely. I love it. I love it. Connor is hardcore. I can tell. Okay. So what was the hardest part? Because you're newly married, right? And I just feel like, especially that stage, I feel like there's different stages of life. Like when you graduate college, after you get married, there's certain points in life that it just feels like everyone around you is living at a certain level.

Right. Like lifestyle degree of what they're doing. So what was hard about that? Did you feel like that was kind of around you and you had to push back or were you, were you so focused that you didn't feel like there was a lot of temptation? Um, no, definitely. There was definitely some temptation. Um, a lot of, a lot of friends didn't really understand what we were doing. They, they didn't appreciate that we couldn't always do all the things that they were doing. Um,

But for the most part, like our families were all completely on board. Like we definitely had a strong, a strong cheerleader squad. So I would say all in all the, the, the friend group part was the hardest part of it. Yes, for sure. On the social side. Absolutely. Yeah. I can definitely see that.

So what would you say the key of getting out of debt is? If someone asks, someone listening or watching right now, and they're thinking, oh my gosh, we're newlyweds. We have all this debt and look at them on stage. They've done it. What would you say to someone that things that they have to do to make this process work? So I'll say two things. One general and one military specific thing.

I'd say general is living on less than what you make. I think we all know, and that's a common thing I know that gets said on here. But for military specific, it's not...

trying to do what's popular and what everyone else is doing. I think it's very popular in the military for people to try to acquire a home at every duty station and then people end up with four or five houses in four or five different cities. And that's where we were for a second. And I was like, that's not gonna work. That's not the best way to do this. And once I saw that we could pay off our primary residence by selling the rental property, it was hands down, easy decision. - Well, can I ask about that? Because I could imagine the influence of that. Like there's all these people around you, they're doing this thing.

was it as simple as going hey you guys are doing this it doesn't seem to be working well for you like how were you able to reconcile that because it is hard to look at what everybody seems to be doing especially if it looks like it's working and do the exact opposite talk more about that so for for me it was a little bit easier because both of both the houses were on 15-year fixed mortgages um so

where a lot of people have it financed on a 30 year mortgage and they're like, oh, well, I'm making $200 a month rent to their mortgage and we were never making a profit off of the rents because we were

we had a higher mortgage at a 15 year and so that also are you know we were at a point where I was like well we're really one bad brew for HVAC system away from a bad time so that's when I was like this long distance landlord is not not for us we're not gonna do that yeah started turning on your brain and thinking about like what this really really means for your situation I love that so good okay so how does it feel

It's outstanding. I mean, it's crazy that you guys own your home. How old are you guys? 28. I'm 25. Holy crap. Wow. Wow. I mean, that's so remarkable, you guys. That's unbelievable. So all the hard work and the sacrifice, which I know part of this was the rental house that you sold, but $180,000 came from you guys living it out. And so if someone asks you,

Was it worth it? What would you say? Absolutely. Amazing. And I'll just say the one thing on that is, is a lot of people, if they saw our story just from afar, they might think, oh, you know, that's, that's an easy way to, to pay off debt. But I want people to know that we got extremely lucky with the COVID-19 market on how much our house in El Paso appreciated.

So that was a huge part of, and like I said, that was luck. That was not the norm as far as buying and selling real estate goes. So we got lucky in that regard. I don't want people to think that anyone should just buy and sell a house like that. That's a very good point. That's so great. Oh, you guys. Well, Connor and Julian, you're amazing. And you're in your late 20s, mid 20s, and you guys have done it. And I'm like, and now seriously, people call the show in their 50s and 60s.

And they're like, why didn't we do this earlier? And you guys get such a head start. And so I see you have some cheerleaders next to you here on your left. Who's with you today? So aunt and uncle that live locally here and then our son, Logan. So you have a

Logan. Oh, he's so cute. Oh my gosh. And how old is he? He is a year and a half. Year and a half. Okay. Well, you guys, we have the live and give bundle for you guys to enjoy or give away all the pieces within that because you guys are definitely living like no one else. So we have Connor and Julian from Oklahoma City who paid off $288,000

including their house in 36 months making 74 to 108 000. count it down let's hear your big debt-free scream three two one we're dead amazing oh absolutely incredible i am shook i am shook

They're not even 30. Well, that's it. That's where I'm just like, you can decide. You can decide. And there's a road to be walked down that. But man, what an incredible life that they're about to dive into financially and in so many ways. Absolutely amazing. Congratulations, Connor and Julian. This is The Ramsey Show.

Our scripture of the day comes from 1 Corinthians 16, 13 through 14. Be on your guard. Stand firm in the faith. Be courageous. Be strong. Do everything in love. Dorothy Bernard said, Courage is fear that has said its prayers. Courage is fear.

It has said its prayers. There you go. I'm going to marinate on that. That's a good quote. Yes. All right. Up next, we have Colin in Fort Worth, Texas. Hey, Colin. Welcome to the show. Hi. Thank you. I'm trying to figure out what I need to do. I am 21 years old. I am $42,000 in debt. And I just got laid off two weeks ago. And I'm in a bind kind of thing. I am borrowing money.

from my aunt and uncle but i don't have i don't have any payments until about three weeks from now wow okay um what's your living situation are you renting are you living with family

I am living with my aunt and uncle right now. They are helping me out. But one of the rules is with me living with them, I'm getting my GED. I did drop out of high school. Before I got laid off, I was making a crap load of money for my age. My sister always told me to listen to y'all. She told me to give y'all a call to help me figure it out. That's where most of my debt's coming from is from cars. Just wasn't spending the money wisely. How much were you making?

I was making from $1,800 to $2,500 a week. Okay. Okay. And what kind of work were you doing? I was an oiler. I worked on the road. I worked in Kansas, New Mexico. I maintained heavy equipment. So are you trying to get back into that same field or are you looking to do something else?

I'm pretty religious in my life and I don't necessarily what I've learned over time is money is not worth it to me and actually I want to become a firefighter. I've always wanted to be one. I want to go to school and I want to try to work on that and I know where I'm at in Texas there's a program that

that pays for you to become a firefighter but they only accept like a thousand people and it's at the end of september okay so that's a long way yeah i'm trying to figure out a way to manage until then or trying to get out of debt or figure something out what's the 42 000 uh colin what's that consistent i have a sports car which is 24 000 of that and then i have a gmc sierra which is the other is a truck and how much is that

It is, I think it's like $19,000 or something like that, or $18,000. Okay, so it's all cars, literally two cars. Yes, ma'am. And then I have two other cars also. What? Okay, how much are those? I have a Chevy Tahoe. It's paid off. It's about $12,000, I would say it's worth. And then I have a Honda Civic, but it has a blown-up motor right now. Wow. How much could you sell it if you just like, without a motor, with anything, just sell it?

Yeah, that's what I'm working on. I have a buyer from next week. How much will you get for it? About $1,800. Okay.

is what he wants to offer. All right. That's not going to last me so long. Colin. We got to sell up these cars. Honestly, Colin, I would just have a massive car sale. I would sell everything. I would sell them all. Everything must go. I would sell all of them. What could you get for the sports car? You owe $24,000. How much could you get for it, do you think? So the problem with me, I love cars and I'm a car enthusiast. I've modified it. And to a dealership, they're offering $12,000 is what I got offered. For a car?

For the $24,000? Okay, not a dealership. Did you Kelley Blue Book it? Yeah. So Kelley Blue Book came back at $16,000. But with the modifications, they said it's going to be less. So I'm stuck with trying to sell it private party is what I'm stuck with. Is this because you did a bunch of stuff to it? Yeah. So it makes a lot more horsepower. It's a very fast car. Interesting. So I've put about $12,000 into it except for buying it also on top.

What about the other car? What about the 19,000? Yeah. That's the most reliable vehicle I have, I would say. Wait, how much did you sell it for? I could sell it for around 15. Around 15. Is what a dealership offered me. So if you sold the Tahoe, if you sold the Civic, you could cover whatever you're upside down, truly in either car. Like even if you chose to take the hit on the sports car, I'd probably focus on the $19,000 car, the Sierra, right?

And I'd get rid of those three for sure. Yeah. And then you're going to make 12,000 and maybe, yeah, 1800 from the Honda. So that's 14,000 that you're going to make off of selling the other cars. So you can cover some of the difference, the 4,000 with that, keep the sports car.

And you're going to have $10,000 to put towards that. Yeah. I mean, honestly, without a job right now, Colin, I just don't like you sitting with a $24,000. I don't know if you'll be able to get a loan for the difference on all of these either. You know, because usually we take a loan out for the difference. Yeah.

But if he gets the 12K from the Tahoe, then he can cover, he honestly could cover the upside down, the 4,000 from the Sierra, and he'd probably be able to cover the other 5,000 from the sports car. Yep. Because what are you paying in payments for the sports car and the Sierra every month combined? I am paying $450 for the Camaro. It's a Camaro. And then for my Sierra, I pay, I think it's like $270. I mean, look at that. That's $700 combined.

That's over $700 a month that you're getting back. That would feel... And insurance, I'm paying about $780 a month also for cars being covered. I mean, look at that. And then you could take some cash and you could buy yourself a cash car. Like you said, you're into cars, so you know how to pick a car for $5,000. That's just going to be your temporary thing until you get back on your feet and then you can add money to that and upgrade. But I mean, you got $42,000 of debt. It's all cars and you don't have a job.

Yeah.

And this is you going, look, I made a mistake. I'm going to make it right so I can get up out of y'all's house so I can stop borrowing money. And next time, because there is going to be a next time where you make great money and you're going to treat it the right way and you're going to buy things in cash and you're not going to go into debt because you know, you will have then known how it feels for that to cave in on you and you're never going to do that again. Yeah, because Colin, you said earlier in the call,

That you, I think he said something like I'm a religious person. So I'm not money's not everything to me anymore, you know, and that's true. But money is something when you don't have it all and you got two car payments. So like there is a level of having money in its right position. And I think that's what you were saying, which is very noble. The yes, money is not everything, but you do have to have it as a tool in life. So you have to learn to manage it, right? So you're either going to choose to manage it well and why so that it doesn't become an idol in your life or

Or if it's the thing that you're stressed over and over and over and over and over every single month, living month to month and stress, it's going to become an idol. So as spirituals, we want to make it for it not to be. You actually can choose for it not to be an idol to have control over it. And I think that's one of the best things is.

That you can do Colin. And I think that this is a wake up call. I think there was a part of you. That we all have. This like little inner child. That kind of once and once and once. I see it when J.Crew has a sale. Or whatever it may be. That you're like. It's what I want. I want that. I want that. Yours happens to be cars. And I think Colin. There's a level of maturity here. That you're like. I'm a man. You're getting your GED. Which I think is fabulous.

and you want a career that you said is a firefighter and it doesn't, you know, you said it's not going to make a lot, but that's okay because money's not a big thing to me. Well, guess what? You get an option to be a firefighter and maybe not make as much when you don't have debt, but you don't have that option to make that kind of money

solely when you have all these car payments too. So that's the trade-off I want you to see that living without debt, not only frees you up financially and spiritually, emotionally, like we talk about, but it frees up your options. Like if you have no payments, then you can say, yeah, I'm going to choose to be a firefighter, make less than what I made in the oil fields. But I literally can't because I don't have bills. So like I have the freedom to choose that, which is beautiful. And that's what you're starting to see, Collin. Yeah.

is that it gives you options. Like it gives you the ability to make decisions with your life. You know, I was talking, calling to this young couple when I first started speaking and they had close to $180,000 in student loan debt combined. They just got married out of college. They went to two Christian universities. They wanted to be missionaries. Whoa. And you can't, I'm like,

I don't know. I don't want to tell you. You have bills to pay. So, Colin, this is the best thing for you. I'm so excited for you. Sell these cars. Become debt-free. Get a side hustle. Work till September to be able to go be a firefighter and do what you want to do. I love it. Jade, thanks for being an awesome co-host as always. Thanks to all the guys in the booth. Thank you, America, for listening. Remember to take control of your money and create a life you love.

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.