Stop Whining and Change Your Life!
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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 actual amazing relationships. I'm Dave Ramsey, your host, George Campbell, Ramsey personality, number one best-selling author of the book Breaking Free from Broke, and co-host of the Smart Money Happy Hour, a Ramsey Network production. He's my co-host here. Open phones at 888-825-5225. Kristen's in Austin, Texas. Hey, Kristen, how are you?

I'm doing great. Thank you. Good. How can we help? Well, I have a very close son of mine who has done a lot of good work as an electrician, doesn't have a lot of debt, but he is asking about tax lien investing.

And I guess his goal is obviously to make some more money, but also to get into real estate, I guess, a little easier in a way. But I just kind of wanted to know your take on tax lien investment. Okay. He's asking you about it? Well, okay, so he's telling me what he's thinking about doing. Okay. How old is he?

He's 24. Okay. All right. This falls in, I can explain to you what it is and how it works, and I'm happy to do that, especially for the benefit of our audience. But let me tell you where he found it. He found it on TikTok with the get rich quick easy nothing down real estate people. Probably. That's where he found it, because that's the only place anybody talks about this subject.

And they do it to get clicks and views because it sounds amazing and it sounds too good to be true. Or buy their course for $3,000 on how to get rich buying foreclosure real estate and doing tax liens. Okay? Right. And by the way, this is the same exact line they used. Wait a minute. Kristen, how old are you? I am 43. Okay. You're barely old enough to remember infomercials. You remember those? I do. Okay. It's the same line they were using back then.

The only difference now is it's cool because it's on TikTok, okay? And it's on Instagram and it's on whatever. But it's still the same genre of stuff. Can you buy a piece of real estate at foreclosure at a bargain? Yes. I used to do it for a living in my 20s.

And I bought a lot of real estate since then that was distressed in one way or another at a deal. It is, however, one property out of 200. We consider 200 properties to buy one. Okay? It's not like I walked out my back door and the sun came out and I looked over there and there was a foreclosure and I bought it. It is actual hard work, expertise, needle in a haystack. Okay? Okay.

Can you buy tax liens and turn them into real estate and into profit? Yes. The likelihood of your 24-year-old doing it is really close to zero.

It's really complicated. It only works in a couple of states. Here's the way it works. Some states will sell if someone's behind on their property taxes, the state or the municipality, the local village or city takes a lien on the property for back property taxes. They sell that to someone.

In some states. My state, they do not do that. You can't buy tax liens in Tennessee. Okay? So if I lived in Tennessee, I'd have to be buying them somewhere other than where I live. Problem number one. Problem number two is you're buying a tax lien. Okay? Now, let's say that you foreclosed on the tax lien and the people that own the property do not pay off the tax lien and you end up with the property.

The property is worth $250,000 and they have a $270,000 mortgage. You know what you got? Nothing, honey. Nothing. You got a $250,000 property with a $270,000 lien on it. You don't want that. It has no value. Okay. So you would have to find a property tax lien that is delinquent on a property that actually has equity. Oh, now we've really made this difficult.

Oh, and wait a minute. Almost all of these states with property tax liens have a two-year or a one-year right of redemption. Now, let's take this a step further. You find a piece of property, needle in a haystack, that actually doesn't have a lien on it, probably not in your state of Texas. I'm pretty sure Texas does not sell them. And so then you actually buy this $250,000 property. Maybe it's only got a $100,000 mortgage on it.

Now you've got $150,000 in equity, but you've got to pay the $100,000 mortgage to keep the property that you just became the owner of or they'll foreclose on you. Follow me? Oh, wow. Okay. This is a problem. And then on top of that, you become the owner of it, but the old guy that didn't pay his taxes has one year or two years to come back and redeem it by paying the taxes plus 10% or 15% interest.

So you can do absolutely nothing with that property except pay this mortgage payment for the next year and a half to two years, and you're 24 years old. This is suicide. Oh, yeah. Absolutely. Okay. Can it be done? Yeah, you need a real pile of money, a lot of patience, a lot of expertise, and the ability to do a lot of work to actually find this needle in a haystack.

And so can you do it? I've actually bought two of these in my life. I've owned about 2,000 pieces of real estate in my life, and I have actually bought two of these. And as you can tell, I've done it. I know how it works. It's a freaking nightmare.

I'm not buying one ever again. Haven't done it since. No, thank you. Too much trouble. Too much risk. I did look it up, Dave. Too much time frame. I hope I explained it well enough that it didn't sound like a barrel and a fishhook, George. So Texas has redeemable tax deeds. So it's different than, you're right, you can't buy tax liens. You can get these redeemable tax deeds. And you're right, there's a redemption period. They can come back. The house is probably in disrepair. They do sell the deed then. Yeah, it's a little different. But it does not clean the title, people.

Meaning if there's a mortgage on it, it stays there. Property tax foreclosures in zero states clean the title. If a first mortgage forecloses, the second and third mortgage are now wiped out. It cleans the title. You get a clean title. If you buy a foreclosure in a second mortgage position, you inherit the first mortgage. If you buy a property at a tax lien sale or create a tax lien sale, you inherit all the mortgages.

including the IRS liens from the goober who also didn't pay his IRS taxes because he didn't pay his property taxes. You think these things might walk hand in hand? You can bet they do. I'm guessing the house could be in disrepair as well. Yeah, I think. We haven't paid any of our taxes or our mortgages, and we're so far behind that. And then I'm going to sit there and maintain the house.

Pay all these bills for two years, and then he can come back and redeem the thing for 10 cents over what I paid for it. No, thank you. And if this was a money-making scheme, there's going to be banks, hedge fund managers, real estate investors with deep pockets going after these. You've got some competition. It's been going on for years. And people, I will say again, it is possible to go down this rabbit hole and get out with a handful of money.

But it's just, it's... Juice ain't worth the squeeze, as they say. It's a 24-year-old guy on TikTok who thought he found a way to make easy money. And I'm just here to say, no. You'd be better off delivering pizza. You'd end up with more. This is The Ramsey Show.

This show is sponsored by BetterHelp. This is the season for Halloween. It's October, we're wearing costumes and we're wearing masks. So if you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest. A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work, we do this around our friends, we do this around our families.

We even do this when we look at ourselves in the mirror. I know because I've been there multiple times in my life and it's the worst. If you feel like you're stuck hiding behind masks and costumes all the time, if you find yourself hiding from your true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest, where you can talk to somebody else and reflect and learn and you can accept all the parts of yourself over time and start living an authentic life.

Masks and costumes should be for Halloween parties, not for our emotions and our true selves. And if you're considering therapy, try calling my friends at BetterHelp. BetterHelp is 100% online therapy. You can talk with your therapist anywhere so it's convenient for you and your schedule.

Just fill out a short online survey and you'll be matched with a licensed therapist. Plus, you can switch therapist at any time for no additional cost. Take off the costumes and take off the mask with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp.com slash Deloney. George Campbell, Ramsey Personalities, my co-host today. Ryan is in Grand Rapids. Hi, Ryan. How are you? Good. How are you guys? Better than we deserve. What's up?

So I'm about to graduate with my bachelor's in computer networking, and I'm just looking to figure out how, if I'm good enough to get married or get engaged. I have about $3K in savings. I'm about $25,000 in debt, so is she. And I make about $800 a week for right now, but I do have a job lined up after. I don't know the exact pay, but I know it'll be about $60,000. A job lined up after what?

After I graduate. When are you graduating again? December. Okay. When are you thinking about getting married? This winter, hopefully. After December? After December, I plan maybe like early either January or February for the engagement and then August for the actual ceremony. So by then you will have been working eight months at a $60,000 job and you have a $25,000 debt.

Correct. And I just didn't know if I should start attacking the debt first before I buy a ring, or do I wait until I have the ring and then start working through all of the debt? Well, how long have you guys been dating? A year and a half. Our year and a half was yesterday. Have you guys talked about marriage at all? A lot, yeah. What's her financial situation?

Um, she is a CNA and she works, um, she works there and she has an apartment. She also has about 20K in debt and then she plans on going to community college in the winter to go for nursing. Okay. So what is your all's plan and view of debt and budgeting going forward if you're married? Uh, we're both, we both listen a lot to you. Um, and I, my parents are also, um,

Like use your way to get out of debt with their small business and stuff. So we know the right way to do it. It's just about when do we start doing, going through those steps? Do we get married first or do we do it individually and then get married? And we know the whole, we both have the same philosophy of combine everything. It's us, it's us, it's us, not you and me.

Well, each of you would be doing the baby steps on your own. And then as soon as you're married, we combine finances and we attack it together. And it usually goes faster at that point. So if you wanted to say, I'm not going to pay off the debt, I'm going to save up to get a ring. We're going to save up and cash flow the wedding. And then we're going to attack this debt together. You could do that. As long as you're aligned on the belief and where you're going, that's all that matters. I don't care how broke you are when you get married. Okay. What I care about is where you're headed, not where you are.

Okay. Now, if you're broken planning to, and she's planning to get broker or you're planning to get broker, like, you know, I think I'm going to make $800 for the rest of my life. Um, you know, I'm going to be her dad and tell her not to marry you.

Yeah, until you get up off your butt and earn some money. But you've got a good job lined up. You're graduating. She's got a career move lined up. We're going to knock out this combined $20,000 worth of debt with a combined $100,000 household income next year when you're married. Yeah, I think that's a wonderful thing. So obviously the ring doesn't need to be anything super fancy. You can always upgrade later. Yeah, well, I did. Sharon married me with a spec ring.

It was so small it was unmeasurable. No, it was actually a .23 carat, which means you needed a magnifying glass to find the freaking thing. We set it in the safe the other day and thought we lost it. It just disappeared. It's that small. Well, the one she has now, I've seen it. It's blinging.

It's a headlight now. Yeah, but that's 40 years later and one bankruptcy later. So she gets whatever she wants now. But yeah, you can get married. By the way, there is zero research on the size of the ring as a correlation to the quality and constancy of the marriage.

the success of the marriage. As a matter of fact, there might be an inverse correlation. I thought I saw that with how much you spend on the wedding. Same thing. Like how you spend an inordinate amount on the wedding could hurt the chances. There's something there. Same thing. Inordinate amount on the ring, same thing. But there's no actual data on it. It's just lots of people got married with very inexpensive weddings and very inexpensive rings and have a long, wonderful life together. Barbara's in Atlantic City. Hey, Barbara, how are you?

I'm good, Dave. How are you? Better than I deserve. What's up?

Thanks for taking the call. Sure. Okay. I recently got engaged. We're an older couple, and my fiancé has a home in a shore town. He's had it for about 30 years, but he has a reverse mortgage on it. I saw the paperwork, and he owed, I guess it said that the total for the

The reverse mortgage right now is about $386,000. That was in July. Good, Laura. Well, I'm not done. I know he was in a lot of credit card debt, but someone's helping him get out of that. I saw him right in front of me cut up one of his credit cards. He worked four days a week. He just got taken down to two days a week, and he's upset and anxious and nervous and...

Um, I think in New Jersey, if I was, when we were to get married, it's half, I'm a little nervous, excuse me. Everything's half credit cards, I guess this home equity. See, the thing is, is that being in a short town, if he was to sell the house, he would get over a million dollars for it. So he could get out of the reverse mortgage, but he'd have to move and he doesn't want to do that. So,

So he's trying to reverse the reverse mortgage now.

So my question is, should I walk ahead into this thing? I'm a Christian, he's a Christian, and I'm just not sure if we should hold off on the wedding or I would like to sit down with someone, the two of us, some realtor mortgage person that I know, rather than go with, he had already gone with somebody who I never heard of. And I think they're not even close.

accessible you know you get them through the phone or something you know something like that you're so quiet well what is it you're wanting to accomplish here i'm confused well i want i love this man and i would like to see us spend the rest of our lives together it sounds like to me that he has a pattern of financial irresponsibility and not working much how old is he

Seventy-five. Okay. Well, that's understandable then that he's not working a lot. He's past retirement age, so to speak. And if he took out a $300,000 traditional mortgage to pay off the reverse mortgage on this property, how is he going to pay the payment?

Well, I think that's what he's upset about now is because he just lost two days out of the four days that he's worked. And, of course, he has Social Security. If he's working those four days, how would he pay that payment? Through that and Social Security. So he's making plenty of money in the four days. I don't think so. Do you know what he makes? What does he do for work? I don't.

He works at a furniture store, a seashore furniture store. So you're talking about a $4,000 a month house payment here. He's going to lose the house. So I think he, there's no, well, he wants to keep it and he doesn't want to sell it. He has to sell it. He's broke and 75. So you're going to be signing up for some of this money stress and you can choose to do that. I don't think he's going to be able to pay this thing off with his income and his lifetime. I don't want to do that. I don't want to do that.

When you get married, you're signing up for all of his problems, and he's signing up for your problems. Not legally, but morally. Your name's not on the mortgage. For 20 years, I've been walking with you and following you, and I own my own home, and I have an IRA, and I don't have any credit card debt. So if you got married and you moved into your house and sold his house, what's wrong with that? He doesn't want to do that. I know he doesn't want to do that, but he can't pay the payment.

He doesn't have the money to pay. He lives a half block from the shore. I don't care if he's in the corner of the Empire State Building. He can't pay the payment. Nothing being on the shore magically creates money into your hand to pay the monthly payment. You have to pay the monthly payment or you have to get rid of the property. And so, yeah, this reverse mortgage has bit him in the butt now. That's what it amounts to. You don't get to reverse the reverse mortgage. It doesn't work like that. The only way you reverse it is you pay payments.

Go get a new mortgage and pay that one off with the old one, refinance it, and then you've got a $3,000 or $4,000 a month house payment that he can't pay. That has to be solved for both of your sake. This is The Ramsey Show. What does the future hold for business?

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Thank you for joining us, America. So glad you're with us. George Camel, Ramsey personality, is my co-host today. We're so glad you're here. Hey, we're going on the Live Like No One Else cruise, setting sail March 22nd through the 29th.

Over 90-something percent of our cabins are full, but we have a couple left. If you want to come, you can still get a suite on the, get a stateroom on the Holland America's, one of their newest ships, and it is a premium Caribbean cruise. Only going to be Ramsey people on the entire ship.

Turks and Caicos, Puerto Rico, St. Thomas, the Bahamas, all of our Ramsey personalities, all seven of us will be on there all week long, and my wife Sharon will be with us the whole week, and Stephen Curtis Chapman, comedian Trey Kennedy. Now, this is a big deal.

Trey Kennedy's like world big deal, world-class chef from the Food Channel, Manit Chauhan. She's also a big deal. And by the way, Stephen Kersh Chapman's a big deal. And so is Dina Carter. And they're all going to be there and others all week long. So it's our friends are coming to hang out with our friends. It's a good thing. RamseySolutions.com slash Cruz. Check it out. Josh is in Greensville, Greenville, South Carolina. Hi, Josh. How are you?

Doing good. How are you, Mr. Angelo? Better than we deserve, man. What's up?

Well, I'll keep it brief. So me and my wife are actually in about $20,000 worth of debt, and we weren't in this shape last year, but circumstances kind of changed for us. And we've got three credit cards. Two have pretty high interest on them, and we have a car that we bought when we actually had a little bit of money we paid cash for. And my question was,

do we sell the car to pay off those two high interest rates cards and then turn around and then throw everything extra at that other card it has no interest on it and it's a low payment okay so wait a minute you were debt free and then you ran up twenty thousand dollars on credit cards yes sir and now you want to sell the car that's paid for that has no payment in order to knock out some of the cards

Yes, sir. Okay. Why do we, why do you believe the stupid has left your house? Well, I'll put it this way. Um, I'm a Christian born again and I had to repent of my money mismanagement along with some other things. Um,

loving my wife like Christ was the church being one of the others. I've kind of got a hold on that one, or at least I'm putting forth the effort, not just saying I'm trying now. And I truly in my heart do not want to go back to where we were last year. What did you spend this money on, man?

Well, we sold our house. We had got it under a previous administration for a very low price. Obviously, administration changed, and we were able to make profit after the mortgage and everything about $90,000 and debt-free with $90,000 in our savings account. And through pretty much taking that, well, it wasn't $90,000. Josh, what did you spend $20,000 on with credit cards?

Oh, so we live in a rental and we pay rent by pretty much working on it. What do you spend on the credit cards? Well, about $8,000 of it was home redecoration. There we go. On a house you don't own.

Exactly. And then the rest of it was dumb decisions. What happened to the 90K in profit? There ain't anything here that's been a smart decision. What was the dumb decision? Well, pretty much everything that we spent that money on was dumb. And the bad thing is I've been a listener for... Okay, here's why we're asking. Let me stop. Here's why we're asking this, hon.

If you don't stop what puts you into the credit card debt and you sell the car, you'll repeat the pattern. Right. Yeah, so I need the two of you as a couple to go through Financial Peace University. We're going to pay for it so that you guys really get a handle on doing a budget together and not spending any money that you don't have. And please don't ever spend money to fix up someone else's house.

Ever again? I agree. Ever again? There's no situation that that makes sense. None whatsoever. I agree. And anything we're going to buy from this point forward, we're going to pay for it. Now, what's your household income? Currently, we make about $3,500. A month? Yes, sir. Okay. And so only one of you is working? My wife works part-time. She works mornings. Do you have children? I watch...

Yes, sir. We have an 18-month-old and have another on the way. Good for you. That's exciting. Sounds like you need to work on your income side of the equation too, don't you?

Yes, sir. Okay. I'm actually trying to get two part-time jobs as well, one for the morning before my wife's work and before mine, and then one in the evening as well. Good for you. Those applications are pending. That's a good start. And then we need to say, okay, what are we going to do that makes me $60,000, $70,000, $80,000 a year? How are we going to move into that in the next year and a half to two years so we don't work part-times the rest of our life to survive? Right. And I think you take your side hustles right now and you pay off the $20,000 and you keep the car.

Yeah. You know, getting rid of the car, it's not freeing up a payment. And so all you're doing is leaving yourself without a car, without changing behavior. Exactly. Exactly. So you hang on. We'll have the team pick up and get you signed up for Financial Peace University and the Every Dollar Premium, both as our gift. Now, the two of you as a couple sit down and work on that. And that's going to tell you I got to work on my income.

And I've got to work on my outgo. We don't buy anything else we can't afford because here's the sad story I think I just heard. We sold a house, made a bunch of profit, and now we have pissed it all away. That's what I just heard. And so now with a brand new baby, we get to start again.

When we had $100,000 in our pocket earlier, 90 anyway. So yeah, the car is not your problem, honey. Your income is your problem. Your lack of management is your problem. And you're no, you're like a dog I used to have. You don't have an off button for spending. Dog would eat itself into oblivion.

I mean, if you put food out, it would get so fat. It did not have an off button for food. It just eat and eat and eat. Some people that way with spending. You just spend and spend. Now we can't do it anymore. Look at that. The credit card looks like unlimited food to the dog. Exactly. Well, just keep racking it up. It doesn't have an off button. It will run your butt up into debt. I mean, it'll act like you're in Congress or something. That's what's going on there. Madison's in Boise. Hi, Madison. Welcome to the Ramsey Show.

Hi, thanks for having me. Sure. How can we help? Okay, so I'm recently divorced after 14 and a half years. Thank you. Long time coming, but it sucks, obviously. Three boys, 10, 8, and 6, and I have 50-50 capacity.

Um, so basically we're trying, we've been trying to sell the home, um, and both moved in, I moved into a rental home and he moved into an apartment and, um, it's been for sale for almost two months and it may end up in foreclosure. Um, we both don't want a foreclosure on our record and technically I guess foreclosure,

we could end up having to file for bankruptcy or something like that and my ex doesn't want to do that because it'll ruin his business and i mean i don't want to deal with that either what do you owe on the house um 512 000 for the first loan and 27 000 on the second loan what's it on the market for at 540 just enough just enough to get out yeah we're probably would probably have to put five to ten thousand to yeah what do you make even close on it

Um, right now. Okay. So when we got the home, I was making over a hundred, 110,000 and now I don't know why I've been dealing with a lot of mental, emotional stuff and I don't have a stable, I haven't, I went from a full-time job to working from home, doing my own bookkeeping. What were you doing at the full-time job?

I was controller then I was financial accountant and it was just way overworked and burnt out and couldn't handle it anymore so I wanted to go back to working from home and if I was to guess if I was caught up on everything and not behind I'm probably making $4,000 to $5,000 right now but I have multiple monthly I mean but I have multiple clients that I could start in October What does your husband make? I have no idea what he makes How far behind are you on the house?

The second mortgage won't foreclose. The first will. The second mortgage will then come after you as an unsecured note. You're going to be bankrupt, but you're going to have more problems on top of this if you guys don't get the house sold. That is where you are. So I suggest both of you make all you can make and make these payments so you can get this thing sold. It's going to be a bigger mess if you don't handle it. Sorry.

I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable. 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 in the middle of all that grief, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm 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.

Our question of the day is brought to you by WeWiRefi. I'll get it out in a minute. Politicians make a lot of promises, and sometimes they might even keep one or two of them. But if you're in over your head with private student loans...

You can't and shouldn't rely on the government because of private student loans. Contact Y Refi. They refinance defaulted private student loans, and they give you a low fixed rate loan built for you. You can actually be current and stay current and get it paid off. Go to Y Refi dot com slash Ramsey. That's the letter Y R E F Y dot com slash Ramsey might not be in all states. Today's question comes from Ian in Maryland.

The Federal Reserve cut interest rates recently. How long will it take for people to see any real impact from that decision? Also, my high-yield savings account is paying me over 5%. Should I expect to see that rate to start coming down? In your opinion, which rate is more important to the economy, the rate we pay to borrow money or the rate we get paid for saving money? A few layers in this question. Let's start with the first one. How long will it take for people to see any real impact from the Fed rate cuts? Well, it depends on the type of debt.

Mortgages are going to take longer to be affected. It's not a direct relationship, whereas things with variable rates, credit cards, student loans, car loans will be impacted sooner rather than later. Well, my experience is credit cards don't move at all.

They charge a bazillion dollars in interest and they will continue to charge exactly a bazillion dollars in interest, 18, 22, 24, 28%, whatever it is. And they don't move that up or down based on the Fed rate. The Fed rate is what banks borrow money from other banks at. It's the wholesale banking rate. Okay. So if your bank is paying less to borrow money from another bank,

then they don't have to charge you as much interest on the debt that they are issuing. So local bank or bank debt, credit cards are not affected at all. Maybe home equity loans might see a little movement. Maybe car loans might see a little movement. As George said, mortgage interest rates are not determined by the Fed at all. They're determined by the bond market. Now, they generally follow the Fed, but

But they're not directly connected in any way. It's just trending, prevailing interest rates is all that drives that. And so a half a point drop by the Fed 45 days before a national presidential election, which basically does nothing, is what I'm saying.

It's not going to affect your high-yield savings account probably at all. Half a point. Yeah, I mean, it goes from 5 to 4.8. If it goes from 5 to 2, yeah, your high-yield savings account is going to go back down where it was when things were 2, right? But right now, you're not going to see. All it was is it's just great and interesting political timing when the economy is like probably the number one political issue, whether the candidates realize it or not. It's not some of the other stuff they're talking about. It's the economy.

We know because we're talking to you, and you tell us all the time. The things I'm concerned about, they're not talking about up there. I'm concerned about $5 gas, $5 eggs, and 7% mortgage rates. That's what I'm concerned about. And so this one thing, this move right here, is actually touching on the number one item in the political landscape today. Very difficult to find in history a troubled economy reelecting a party to the White House. They usually get booted from the White House.

They get their little eviction notice by a bad economy. Either side. Republicans are in, bad economy, Democrats come in. Vice versa, right? We see it happen all the time. Is that the old saying, people vote with their wallet? They do. What affects them and their house? They do. So that's what this move is about. And so the actual truth is, Ian, it's not going to make a lot of difference in anything you're seeing. Number one, it's only a half point. Your high-yield savings account will follow it because when your bank is...

paying you to save money with them, they are borrowing money from you at 5%. If they can borrow money from another bank at 2%, they're not going to pay you 5% anymore. So when the prevailing Fed rate goes down lower than your high-yield savings account substantially, they're not going to borrow money from you anymore because they can borrow it from somebody else wholesale cheaper. But right now,

The Fed rate is fairly close to your high-yield savings account, even with the half-a-point drop, so they're probably not going to monkey with it much. But when you're saving money in a bank, remember, what you're doing is you're loaning money to the bank at that interest rate, and that helps you tell why they're willing to pay that interest rate, because they're borrowing money, and they can then loan back out approximately 12x whatever their deposits are, according to FDIC guidelines.

And so if you put $1,000 in there, if you loan them $1,000 at 5%, that allows them to loan other people $12,000. At higher interest. At 7% on the car loan. Or make a profit. On the car loan. And they make the spread on that. And that's exactly how banking works. It's really not much more complicated than that. Vernon is with us in Lexington. Hi, Vernon. How are you? Not too bad. How are you, Dave? Better than we deserve, sir. How can we help?

So, I'm a single dad struggling to put food on the table for my kids. I don't have any credit card debt. I do have an auto loan that I'm majorly upside down on. I've got about $4,000 in medical debt. And probably the most embarrassing one is I haven't filed any taxes in the past year.

This coming season will be three years. I just have not had the money to file them. And I'm tired of living paycheck to paycheck. Ends are not meeting. I make about $80,000 a year. I should not be this broke. I just need some help. When were you divorced? About six years ago. And you've never really taken control of your whole life since then. It's all kind of just happened to you.

Yeah, I've never been taught how to manage finances. I don't know anything about it. Yeah, but what you described to me was you've been coasting. Yes. Today you took a step to try to figure out how to fix it, but you've been coasting. Yes, $0 in the bank before every paycheck. Yeah, and $80,000, you ought to have some money, shouldn't you? Yeah, you should. Yes. Are you self-employed? I don't know. I work as a 1099 contractor. Yeah, okay. That's what I meant, yeah.

Yeah. Okay. So, um, well, the first thing we do is we get on a written game plan called a budget and we make every dollar that comes in behave. And starting this month, you're going to set aside 25% of every dollar that comes in to pay your taxes. So if you get a thousand dollar check, you're gonna take 250 and put it in a savings account.

to pay your quarterly estimates on your taxes and then you're going to do a budget with the remaining 750 dollars per thousand follow me okay you'll make every dollar behave and you're going to withhold on yourself because you have no money in the bank to pay three years worth of taxes this is a problem right and i'm guessing you're going to have somewhere around 60 80 000 in taxes on these three years you've been making 80 a year of those three years

Pretty much, yeah. Yeah, okay. So you probably got, you know, 60 grand going to be O plus penalties. Right. Okay. So now, here, let me, you have a tremendous responsibility as a single dad that people do not get put in jail in America for not paying their taxes. They do get put in jail for not filing them. So you have 24 hours, my friend. Okay.

to get at ramseysolutions.com and click on tax ELP, endorsed local provider, for someone in your area to sit down and you get those taxes filed. I don't want you led away in bracelets at Connect. I hope I'm scaring you. 2,571 people went to jail last year for failure to file. It is a law. It's a criminal law.

Not paying is different. You can get away with not paying. You can't get away with not filing. Get your freaking taxes filed now and then get on a budget and we'll walk you through the rest of this. Hang on. We'll also send you a copy of Total Money Makeover and help you with the money part of this. You got to get on this, buddy.

Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app, your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser focused on reaching your goals. Loaded with over seven episodes.

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build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, number one best-selling author of the book Breaking Free from Broke. He's my co-host today.

and also the host of the George Camel Show on the Ramsey Network. You'll see him on YouTube. Be sure and check it out. Open phones here at 888-825-5225. Nancy's in Mobile, Alabama. Hi, Nancy. How are you? I'm good. How are you guys? Better than I deserve. What's up?

Okay, so long story short, I'm going to make it quick. My husband and I are in our early 40s. We did things a little bit backwards, but we're debt-free now. We have about a total of 220 or so in 401ks. However, about 125 or so is in old 401ks from old jobs. What is it or when is it good to roll those into Roth so that we don't end up

paying taxes on growth and requirement on distributions when we get to that point. Oh, you're asking a really good question. This is a great question. Really smart. You're on top of it, kiddo. Way to go. So when you said debt-free, you mean your house? No, no, no, no. I wish. Household incomes, what? About $130,000. Okay. All right. So...

The original question, when do I roll a IRA or a 401k, an old 401k, you can't touch a current 401k, into a Roth and create the tax bill? So we move $100,000 over there, we create a tax bill, $25,000, okay? Now, if you take the $25,000 out of the IRA and therefore only end up with $75,000 in the $100,000, $25,000 goes out for taxes and out of $100,000, right? Right.

And you leave 75 in there. The 75 will only grow. It's a break even. The 100 would have grown to enough to pay your taxes, although you'd had the RMDs. So you shouldn't have done that one. So you don't take it out of the actual account to pay the taxes. Number one, you would move it only when you have the cash extra to pay it out of your pocket, pay the taxes out of your pocket. That has the mathematical effect of actually investing an additional $25,000 per 100.

You follow me? Okay. So if I move the $100,000 over and don't reduce it, now it's growing tax-free, but I've got to pay $25,000 in taxes out of my own pocket over here to the side. You follow me? Correct. So you've got to have that cash, number one. Number two, you need to have been debt-free on your house before you do that because it's more important that your house is debt-free than that everything's in Roth. But you'll get there pretty soon.

Okay, I think that was the question. My husband's a mathematician, so he runs the numbers. Good. And so he was, but neither one of us grew up with any financial literacy, so we are kind of new to real financial literacy. Okay. And so we're trying to, like, that's where I think the thing was, what priority does that make it? Do we just let it sit for now? Well, this is not completely a math problem. It's more of a data response.

Okay. When we study millionaires, we find that the first one to five million dollars of net worth that they have comes from their retirement savings and a paid for house. So we typically run into somebody with like 49 years old. They got a million eight net worth and six or seven hundred. That's their house. And seven or eight hundred of it is a retirement account. You follow me? Which is kind of where you'll be at 50.

Okay. That's about where you'll be. What's left on the mortgage? About $170,000. Yeah. So you're going to be out of that. It'll be gone.

Few years, you'll have it knocked out. So the element that that's what the profile of the typical person that gets the first one to $5 million in net worth looks like is that. So I want to take you there first, and then, yes, you get all the benefits of having all of your accounts. Then when you got no debt and nothing to do left but to invest, well,

Paying the taxes on a rollover has the same mathematical effect of having invested. So we'll do the rollovers. So like, for instance, today I've been in Baby Step 7 for 30-something years.

And so I don't have anything but Roths now. So now you're just trying to optimize the wealth. Exactly. Exactly. You know, when you get to my age at 65 or something, I'm 64, 100% of my retirement is in Roths. So that does a couple of things. One is not only is it growing completely tax-free and say, I live to be 84, that money is going to be

It's going to double like four more times if I don't touch it all tax-free. That's pretty cool. I have no required minimum distributions at 72.5 now. Because the government already got their taxes. Roths don't have required minimum distributions, only traditional.

So I don't have to start pulling money out of my account unless I want to. Oh, and here's the cool part that I didn't even think about when I did all of it, but now I'm getting into it a little bit. When you have an inherited IRA, you have to pay all the taxes on the inherited IRA, traditional IRA or 401k in 10 years.

Under the new SECURE Act. So grandma leaves you a million, then you got to pay that over the next 10 years. Then you got to pay all the taxes on that, the income tax, not inheritance tax, but the income tax on it within 10 years. So you've got to start, you know, you got to start pulling it out and paying taxes on it. Guess what my heirs have to pay on the Roth? Zero. Ding, ding, ding. So they're going to inherit Roth IRAs tax-free that are going to continue to grow infinitely.

tax-free. Hypothetically, if the laws don't change at all, my grandkids could inherit my Roth IRAs. Wow. Can you imagine what they would be worth by then? They might be the first trillionaires. Can you imagine what those IRAs would be worth by then? All growing without the stinking government's hands on it. I mean, I didn't even think about how awesome that was. I just thought, I don't have to pay any taxes. But

Now I'm going to leave tens of millions of dollars completely tax-free that they are not required to withdraw. And by the way, they don't need any money. They're in all good shape. So they can just sit there and watch the stinking thing compound tax-free, maybe even a whole other generation. That would be super cool. That's a cool ripple effect. Because inherited IRAs, regardless of whether they come from your mommy, your daddy, your grandpa, doesn't matter where it came from. Inherited IRAs that are Roth have zero taxes.

This is stinking cool mathematically. You math people, you're going to love that one. Yeah, your grandkids will love the inheritance. They'll love you even more when it's tax-free. I'm just saying. Yeah, it's one thing to get a million dollars from grandpa. It's another one to get a million dollars tax-free from grandpa. That's just different right there. I'm just saying. That's generational wealth. A godly man leaves an inheritance to his children's children. Why are we doing this? We want to change our family tree.

Somebody had to be old man Vanderbilt. Somebody had to be old man Rockefeller. Somebody had to do it. It might as well be you. You can do it. So when she asks a question like that, that's why I think she's awesome. Well, you're thinking so far. She's a hero, man. And I guess that means you're old man Ramsey. Based on your own logic. Hey. Not my words. Hey, you had to twist this to something ugly, didn't you? The history books reveal. He'll be up there. It'll be Vanderbilt, then Ramsey. You need to get me a Commodore hat.

I could see you with a monocle later in life. A Commodore. You should consider a monocle. A Commodore Ramsey. A monocle. I need a ship. You'll be so rich. You only need one. If I'm going to be a Commodore, I'll need a ship. This is The Ramsey Show.

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That's promo code Ramsey at UrgentCareKit.com slash Ramsey. Listen, the housing market is crazy. And if you've been on the internet, here's the sentiment. Affording a home is impossible and you're doomed to be a renter for the rest of your life. Right? Wrong. George Campbell here. Listen,

Listen, finding a home you love within your budget is possible, and I'm excited to help you get there with our brand new course, How to Buy a Home You Can Actually Afford. From saving a down payment that fits your budget to making an offer that sellers can't resist, we'll cover it all. So if you're ready to seal the deal on the right home for you, take the course at ramseysolutions.com slash course. That's ramseysolutions.com slash course. George Campbell, Ramsey Personalities. My co-host, Liam, is with us in Salt Lake City. Hi, Liam. How are you? I'm doing well. How are you guys? Better than I deserve. What's up?

So my wife started her business earlier this year, and I wanted to ask if there was some things that we should be trying to help get the business off the ground. So far, we've only done two online orders and about 10 in-person orders. We've been doing everything from social media to in-person interactions, and we were just wondering how we can help get that business going. What is she selling?

So we're doing a lot of her artwork that she does and also some customized vacation t-shirts or family reunion stuff. Is this an Etsy shop? Shopify. Shopify, okay. Has she tried Etsy? She did look at Etsy, but I think Shopify looked a little bit better to her based on what they offered price per month and everything.

assistance in helping getting the website set up. Okay. I say that only because you want to sell your products where your audience is at. And I've only heard people going to Etsy for these vacation type t-shirts and, you know, artwork might be a different story depending on what kind of art she's making. There might be a local community where she gets her start, but this is, it's not a business where it's instantaneous money starts to rain down from the heavens. Yes. I was aware of that. I was just wondering what we, what we should be trying to help get to that point.

What kind of artwork? It's just mostly stuff that she does on a whim. It's a lot of artwork based off of books and movies. And then she does commission artwork as well. So is this more in the kind of pop culture world? If she went to, let's say, forums where people love this movie or this book, I imagine that would be a better audience than a random Shopify store.

Hoping people see it. Yes. I imagine that would be a good, a good place to start. Yeah. Let's find some Reddit pages. Um, let's find some Facebook pages where people are gathering as groups that around, um, those types of things.

Okay. Yeah. I, I, I think you've got to find, this is not something you have, you can throw a broad net on and get a good response, get a good return on investment with your marketing dollar. It's going to have to be very targeted. And so, um, you know, we're always asking ourselves where it, where are the people, where's the customer, where do they live? What are they on? How can we reach them? Where are they? And, um, you know, the, uh, uh,

you know, what, what's the demographic. And, and, uh, like George said, if there's a, a group of people discussing that movie somewhere and you drop an offering about that movie in the middle of those people, well, that that's pretty much like piranha. That's perfect. Right. But if you drop it into the general public, 98% of which never heard of that movie, you just lost all your money, your marketing dollars. And so very targeted, very specific communities that you're diving into. I don't know other than that. Um,

Because the problem with podcasts or social media is that it's now infinitely large. There's somewhere around 2 million podcasts and what is there, something like 26 million Instagram accounts or something? I mean, it's just in terms of people trying to do business that way. It's not so, you know, and you're right.

You know, you're lost in a sea of nothingness out there in those worlds. Has she found people who are crushing it in this exact space? I believe she has, yes. I would study them, follow them, befriend them, figure out what they're doing, and try to replicate it. Yeah, look at best practices there. That's a really good suggestion. Yeah.

If there's an Etsy shop that's doing a thousand sales a month, doing the same thing. Yeah, but there's a lot of t-shirts. I mean, how many millions of people got a t-shirt on Etsy? Oh my God. If you're going to Disney and you want, you know, the Camel Family Disney vacation, well, I got a lot of options when it comes to who makes that shirt. A whole lot.

including myself. I can go to Canva and make one and get the Walmart, you know, iron on and do it myself. So you've got to have some unique value proposition to go, here's why mine is better. My artwork is that much better. I personalize it in this way. So it's going to take time to stand out and she's going to have to do a lot of research and get involved in a lot of different groups to try to kind of infiltrate and say, I have a great product.

You ordered family vacation t-shirts? I have not. I'm not the type. Let me just say that. I'm not the target demo for vacation themed t-shirts. Well, I'm not because I didn't even know it was a thing. So there you go. Oh, yeah. Well, you've seen our debt-free screamers. They get the matching t-shirts. A lot of them get them from these Etsy places. They make it themselves. That's where that came from. And so I think it's the crafty mom target demographic. That's who you need to find. Okay. Yeah.

I guess I'm not going to give Dave the matching T-shirt I made him. This is awkward now. Yeah, that's good, George. I'm glad we got that settled. Open phones at 888-825-5225. Joe is with us in Louisville. Hey, Joe, what's up? How about you guys? Better than we deserve, man. How can I help? So I got asked a question yesterday about taking over ownership or taking over the payments on the family farm.

However, in my current financial state right now, I don't know if it would be a good idea or if it would even be plausible. And I'm not sure where to go with it. Okay. The family farm, your parents have it? Yeah, it's in my mom's name, and her health has been going downhill for the last several years. What do you do for a living? So I actually live in logistics.

and I found out that I was back in an application process for the police force. So I jumped out of the logistics probably a little too soon. So I'm actually in between jobs right now because I didn't want to be out on the road if law enforcement decided that they wanted to pursue or go along with the application process. Logistics had you on the road. You were driving a truck? Yes, sir. Okay. You call that logistics. Okay.

All right, so you quit your truck driving job because you're hoping the police department comes through. Yes, sir. I have several different applications with different police departments. What are you doing for income right now? How are you eating? I was relying on my savings. Now I'm working on doing applications around town and trying to be home for when they go on with the process. Okay, and your mom owes how much on the family farm?

It's right around $40,000. Okay. Are you going to move there? No, I'm not going to move there. I already own part of the property there, free and clear. And all I was going to do was take over where the house is and some of the other properties. Do you rent your home or have a mortgage on your home? I rent. Yes, sir. Okay. All right. And so you're going to start paying her payments? Yes.

Either start paying her payments or she's going to make the payments through me. She wants it over in my name in case she has to get a long-term care. And I'm not sure that's a good idea, to be honest, but I don't know for sure. I need outside information. How much debt do you have personally? Right close to $100,000. What kind of debt is that if you don't have a mortgage?

So I was looking to start my own trucking business, and I bought a truck and a trailer that are up for sale now, along with some other stuff that I'm working on selling. So the truck that you quit driving was yours? Yes. Can you not just start driving it again until you get the police job?

I'm looking for some local stuff, yeah. But everything I'm seeing is either going to be out for three or four nights. I mean, they don't give you like three days' notice on a police application. They give you like 30 days' notice. Right. One of these is for the state police, and they do random home visits. They randomly show up.

And you're supposed to be sitting at home 24-7? No, not necessarily sitting at home, but, you know, be relatively close where they can have essentially an in-person interview right close. They can come to you real quick.

I don't buy this whole process. No, I don't either. Something's fishy. I think you need to get back on the road and get to making some money. Okay, no, you do not need to take over your mom's debt because, no, it will not help her with long-term care. Okay? If you move property to hide it so that you appear poor to get welfare nursing home care called Medicaid, they have a five-year look back, and they will undo anything that happened five years before.

And if they think you did it even before that, fraudulently for the sole purpose of getting free care from the government, when you actually had the money with your property to pay for it, they'll undo it whenever they want to undo it under the heading of fraud. So don't do it.

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That's Fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. Hey guys, Rachel Cruz here. You know, some people think budgeting means they can't have any fun with money. And I know this because that was me.

But the truth is, budgeting doesn't limit your freedom. It actually gives you freedom. A budget is simply telling your money where to go. And the best way to do this is with EveryDollar, my favorite budgeting app. It'll help you create a plan for your money that fits your lifestyle. So whether it's a spontaneous date night or an epic Disney cruise, budget for some fun. Download EveryDollar for free today.

George Campbell Ramsey personality is my co-host today in the lobby of Ramsey Solutions on the Debt Free stage. Matthias and Sierra are with us. Hey, guys, how are you? Better than we deserve, Dave. Love it, man. Where do y'all live? Wild Lakes, Minnesota, just north of the Twin Cities. Very cool. Good for you guys. So how much debt have you paid off? We paid off $308,000. $308,000. How long did that take?

Four years and 11 months. Four years and 11 months. And your range of income during that time? $155,000 to $190,000. Wow. What do y'all do for a living? We're both physical therapists. Oh, okay. Wow. PT. Excellent. So was the whole 308 your student loans? Basically, with a sprinkle of medical debt in there. Wow. Ouch. Yes. Ouch. It was terrible. How long have y'all been married?

Six years. How long you been out of school? Six years. There we go. And almost five years of that has been spent cleaning up the student loans. Yes. So you had one fun year of marriage so far. That's right. And a great vacation to Nashville to do a debt-free trip. Yes.

So you had the honeymoon phase of a year and then you woke up one day, four years, 11 months ago and said, we got to clean this up. What happened? Tell us what happened. Oh, we're just looking at this debt. We had the minimum payment of $3,200 a month. For 10 years. Yeah, for 10 years. And it was freaking us out. And one of my friends who is like, hey, we're taking this financial peace course. And I'm like, oh my gosh, this is heavily on my mind.

And so we, yeah, we took the course and I was dead set and,

Well, I had to snowball my wife into it a little bit. It took me a little longer. Did you not go to the course with him? I did, but I was kind of against budgeting at first. Okay. It felt very restrictive to be on a budget. So it was $308,000. Exactly. It was, well, which one do I want? Yeah, which of these painful things do I want? Yes. So how far into financial peace were you before you said, I'm on board?

sierra oh um well it took honestly it took about a year before i was like okay i get what we're doing and why we're doing this okay and so then i was like okay we'll do we're just gonna go hard game on okay all right good for you so you made more than that 3200 minimum payment you put extra at this because it would have taken 10 years you said yes yes to the plan um six to

six to $7,000 a month. - Yeah, you must have doubled the payment. - Yeah. - You're doing under five years, that's amazing. - Yeah, way to go. - So you guys are like living on very little, even though you're making great money, you were still living like you were broke college kids. - Well, we lived in his parents' basement. - There it is. - That whole time. So shout out to them for allowing that.

And are you gone now? Yes. We are out. Yes. It's beautiful. That's got to feel good. That's got to feel as good as being debt free. Yes. It kind of feels like this is the honeymoon now. Yes, exactly. It was just delayed. Wow. That's incredible. And how old are you two now? I'm 32. I'm 31. All right. Tell people what you think the secret to getting out of debt is.

Well, one of the big secrets, I don't know, for me, is just like, so we're Christians and just like the Bible says, to be renewing your mind with scripture every day, to remind yourself of the purpose of your life and day-to-day actions. I think that same principle can be applied to this, getting out of debt as well, and just kind of renewing your mind, I think, through the show or reading your books or things like that. So you're kind of, you're constantly practicing

reminding yourself, why are we doing this instead of inputting other things like from TikTok or wherever. I like that. Make sure your inputs are coming from good sources that are actually improving your life. Right. What was the why? What was your why? Your big motivator that drove you so hard? We couldn't do anything with that. With that minimum payment, we just couldn't do anything. So we were like... Freedom. Yeah, freedom. Yeah.

I want out. Yes. Yes. Yeah. Wow. Well, if there's a 25-year-old that's got $300,000 in student loan debt out there, talk to them. Can they do it, and what should they do? They can do it. It's just going to take a lot of dedication, a lot of ignoring what your friends are doing.

ignoring the things you want to do as well. But knowing that there's better things in the future. We always said, sad now, happy later. Live like no one else so later you can live and give like no one else. I love it. Delayed gratification. You guys did that. You lived on way less than you made. Because, I mean, if you're making $10,000 and you're throwing $7,000 at the debt and you're trying to pay all your bills with the rest, you guys really sacrificed a lot.

But it's gone now. Yes. The rest of your friends, they're on the 10, 20-year plan, and you guys are free in your early 30s. It feels amazing. Now we're thinking, what should we be doing with our mortgage payment, with the money? Should we be rolling it into that? What should we be doing now? I'm used to living on nothing. You take that same seven grand and chuck it at the mortgage, you'll be completely debt-free, housing everything in no time. Mm-hmm.

Yeah, that's a little intense. We might lighten up a little on that. These two seem like the intense type. If I lived in my parents' basement for more than a month, I might just go crazy. So that's impressive. That is. It's impressive for everybody involved. Well done, y'all. Very well done. Proud of you. Excellent, excellent work. Very, very good stuff.

All right, Matthias and Sierra from Minneapolis. Man, this is incredible. What a great story. $308,000 paid off in four years and 11 months, making $155,000 to $190,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yay! Wow. Wow.

You know, that's incredible. Very smart, very wise beyond their years, young couple. I wonder these days with there's so much in our face about how bad student loan debt has gotten. We're up to about $1.8 trillion now, as you know. And when we did Borrowed Future, I think it was $1.4 trillion or something like that when we did that documentary a couple of years ago on student loan debt. But I wonder, I mean...

Because I'm convinced that 98% of the people that sign up for student loan debt have no idea what the flip they're doing. And they look up, get married, and they go, I got $150,000 in student loan debt. Oh, wait, so do you. We've got $300,000 in student loan debt.

And it's more than a mortgage payment just to make that minimum student loan payment. You're talking $3,200. If you told an 18-year-old that, they'd go, never mind, I don't want to sign. Yeah. Wow. Well, because they don't, you know, number one, we think about us. We don't think about getting married. And when you get married, you double it. Rachel was talking about, she was at a Christian college speaking, and a little couple came up and said they wanted to be missionaries, and they got $180,000 in student loan debt. And she said, you're kidding. Oh, wait.

Each of them. Oh my goodness. Had $180,000. She's like, you're not going to Africa.

I mean, you're going to be working. You can't make that payment on missionary money. Well, you should not know. Oh my goodness. So it holds back your dreams. We're seeing the stats that people are delaying home ownership. They're delaying marriage. They're delaying having kids all because of student loans. Parents teach your kids to choose a school. You can afford, teach your kids to go into a field. At least the good news about these two heroes is they went into a field where they could earn some money. Um,

Uh, cause they're earning, you know, almost a hundred a piece here, which that helped the story considerably. Um, and, and there they, they woke up, saw it and to their credit said, okay, instead of reacting like a victim to this, we're going to react like a Victor and we're going to get an attack mode and we're going to knock this out.

That's powerful. And we've got a parting gift for them we didn't mention, but we got two every dollar premium subscriptions for you guys. Good for a year apiece. You can use those. You can gift them to someone else because that budget really is the key. It's amazing when you go, we make 200 grand. Where is it going? Well, the budget shows you the reality of those numbers. And then you go, hey, you know, our bills are actually like three grand. We could throw the other seven at these debts. And what would that do? That could get us debt free in half the time. And that creates some hope and momentum.

That's exactly what it did. Four years and 11 months. Way to go, guys. Excellent, excellent work. So that's the thing. You know, the moral of the story is know what you're signing up for. And if you find yourself and you wake up and you have that, oh, crap moment, which is kind of where they found themselves after graduation, then you go, what are we going to do? We're getting in attack mode and gazelle intensity. They were willing to do anything. Run! Living in the parents' basement. That's the equivalent of run in this case. That's...

That's hardcore. That's hardcore. For five years. This is The Ramsey Show. Hey, guys. Dave Ramsey here, and I got a big announcement. I'm coming to a city near you live on the Money and Relationships Tour with Dr.

with Dr. John Deloney. This is the most interactive event we've ever done. You get to decide what we talk about. You do not want to miss this. We'll be coming to Louisville, Durham, Atlanta, Phoenix, Fort Worth, and Kansas City in April and May of 2025. Get your tickets and more information at ramsaysolutions.com slash tour.

George Campbell Ramsey, personality, is my co-host today. Open phones at 888-825-5225. Effie is with us in Houston, Texas. Hi, Effie. How are you? I'm great. How are you? Better than we deserve. What's up?

Um, I was calling, um, I, um, so the last two years I've come, I've been coming out of postpartum depression. I had a couple of credit cards that I let go because I, well, I was also not working and I couldn't pay them. Um, my husband and me, we do not, we do finances separately. Um, I know a lot of your, um,

listeners, they, you know, they might be doing things together, but me and my husband have always done things separately. Um, so his dad is his dad. My dad is my dad. Um, that's wrong. You shouldn't do that. And, um, I, I don't disagree with you, but, um, getting my husband on board for anything is always very difficult. So it's,

But I have two credit cards that I could not pay while I wasn't working. And one of them in particular has been sent to a lawyer and they're knocking on my door. They're serving you with lawsuit papers.

Exactly. So I have, I mean, our debt is considerable considering we have, you know, we have a rental house. We have our primary residence. How much credit card debt do you have that we're talking about? The credit cards that I'm most concerned about, it's about $20,000. Okay. What does your husband make and what do you make?

So I just started working again. I'll probably be making anywhere from $70 to $100, but $100 isn't guaranteed. It's a bonus. And what does he make? About the same. How much other debt do you all have in the house?

How much other debt other than the house? No, no, no. Yeah, other than the house. Do you have more car debt or does he have other debt that he has in his name or what?

Yeah, well, his, yeah, it's his name. Like he has his credit cards, I have my credit cards. I know, I heard that. We have cars. So cars together with the credit card, with his credit card, or well, if I was to combine both of them, it's 12, 13 cars or $1,300 a month. I know, that's bad. What's the total loan amount?

Total loan amount for the... Your car and his car.

My car and his car is $11,000, $11,200, $11,300 a month. Now, I'm saying the total loan amount. Is it $50,000 left on this loan? Oh, no, no, no, no, no. We both have about $20,000 left on the cars. Okay. So you're around $100,000 in debt as a couple, not counting your house, and you make somewhere around $200,000 a year as a couple. That's about right. And you have rental with a mortgage on it. Yes. Okay. And you're how old, hon?

38. And you have a baby. And do you have other children? Uh-huh. I have a seven-year-old. Okay. All right. And you've just come through two years of really tough postpartum. Yes, sir. Yes. Okay. All right. You're the same age as my daughter, who has three kids. Okay. And I think what your husband is doing to you is abusive. Yes.

As your dad, I don't appreciate it, the way he's treating my daughter. I'm pretty pissed at him right now. He makes a baby, his wife is in postpartum, and his answer to it is go figure it out, chick. You're on your own. We have our finances separate.

I heard that they said, for better, for worse, in sickness and in health. I bet by God when he has the flu, he wants you to make him soup. So this is the core of it. You don't have a $20,000 credit card problem. You have a very serious issue in your relationship.

And you guys have walked along. You've walked through the forest with your hands over your ears going la, la, la, la, la, la, acting like nothing happened until something happened. And now the situation that you're in is revealing how terrible your theory on handling money is. So the two of you need to sit down together and rethink your marriage and say we're going to love each other in sickness and in health. We're going to love each other for richer, for poorer.

We are mommy and daddy. We are husband and wife. We take care of each other. It's us against everybody else. You're not on your own. This is not a joint venture. It's not a partnership. And so you really guys, you've really got a series that rethink your theories on relationships because they're broken and they're wrong. And it's caused you to be in this situation where your soul is unraveling. I can hear the fear of,

And even almost a sense of shame in your voice and you didn't do anything wrong other than as a couple, you've run up the stat. So if someone had abandoned my daughter while she's in postpartum to her own devices, who was supposed to be her husband, who was supposed to love her and care for her, he and I would probably be having a discussion about that. And it wouldn't be pleasant because it's not fair and it's not right. The way you're being treated is wrong, hon.

And I'm begging you to no longer accept that as okay. Because instantly when I take a $200,000 income, I can clean up $100,000 worth of car debt and credit card debt when we're working together in a unified front. How fast can we pay off $100,000, George, making $200,000? 12 to 18 months max. This thing's gone. You can be 100% debt-free. And yet we have people serving warrants at your door and you have a baby.

And there's no excuse. There's no reason. You're not broke. Y'all are just broken. It's just to see my wife drowning emotionally with postpartum, financially, with lawyers at the door. And I go, well, it's her dad. It's her problem. I'm not a man. Honey, they're here to see you. What kind of man does that? I don't know if I can call him a man. That feels generous. There we go. There we go. There we go. So it's a crisis, folks. It's a problem. I'm sorry, hon.

We love him, but we're ready to box his ears right now. That's an old Southern term. But anyway, I'm not even sure what it means, but somebody's getting ready to get hit in the ear, I guess. But anyway, I'm going to box your ears. What the crap does that even mean? I don't even know what that means. Adding that to my day one. I had my ears threatened to be boxed several times. I'm still trying to figure out what, trying to find my, he couldn't find his butt with both hands. You never explained that one to me. Well, that's like Southern riddles. I got to figure out.

It means you're pretty limited on your abilities. That explains it. It explains itself. Effie, I'm sorry, hon. But you guys really, if you guys, you understand the math in your situation is easy. It's a hot knife through butter. You can fix this very quickly when you fix the reason that it's caused. What caused it? The problem, the people showing up at your door are not the problem. They're the symptom.

And I would even go so far as to be so bold as to say it has contributed to your postpartum, your depression. And so it certainly didn't make it easier at a minimum. No question about it. This sense of abandonment and you're on your own. No, that's not how this works. So...

If you guys want our help, we would be honored for you to go through our classes. I'll put you on hold. And if you want to sign up, I kind of don't think your husband wants to sign up with anything with me right now after I just finished with him. But I'm okay with that too. Pissing people off is like one of my spiritual gifts. Because folks, I love you. And we're going to do one thing around here. We're going to love you enough to tell you the truth. This is The Ramsey Show. ♪

Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.