When You Don’t Owe Anybody Anything, You Have FREEDOM
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From the Ramsey Network, it's The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney, and we're going to be your host for the next little bit of time here. This is a live show. You can call in with calls about your life and your money. We'll help you build wealth, do work that you love, and create actual amazing relationships. It's what we do here every single day. So if you want to get involved, you can call the number 888-825-5225.

And we'll get you in the lineup. All right, John, you ready to go to these phone lines? Let's go. Let's hit it. Let's go to Jessica. She's in Oklahoma City, Oklahoma. What's going on, Jessica?

My husband and I are on baby step two. We've paid off about $2,700 of our debt. That includes credit cards, balance transfer, and then we have my car. We listen to your show. He's probably going to hear me and be like, what the heck? He is really handsome, isn't he, for an Oklahoman? He is. He's the best. Okay.

We make a good income. I stay home, though, and we've racked up some debt, and we're getting into some side hustles, like Uber, Lyft, maybe some Instacart, and I'm wanting to do it every day to get it done as quickly as possible. I love that.

wanting to do it every other day and I just want to be as good as Ellen Pence and I don't know what to do when we're having disagreements on the intensity. Why doesn't he want to go as intensely as you?

Probably because we've been pretty comfortable. We, you know, we've been living exactly how, you know, we want that, not that we can afford. It's hard when you have a lot of people who are more affluent than you around you, you feel like you have to keep up. And so we've just been comfortable. And I think you guys have differing, I think you have different definitions on comfort versus discomfort.

Because you're describing a situation where you guys are up to your eyeballs in debt as comfortable. And he's still viewing it that way. And you've realized, oh, wait a minute, that's actually really uncomfortable. I want to get out of debt so that we can be comfortable. And I feel like his definition hasn't changed yet. Is that fair? Yeah. I also feel like...

Because he does work every day, and I work in the home. If I got a job to put two kids in daycare, a nine-to-five isn't going to pay for that. It's going to have to be outside work after when he's home and can watch the kids. So maybe I feel like I need to bring more to the table, and I don't think he feels like he's already bringing stuff to the table, but...

And you're probably tired at the end of the day. I don't know. I mean, there's some validity to that. If you feel that that's the dynamic, that could be the case. I think...

So there is a part of this where it's not necessarily tit for tat. It might be something where you guys sit down and go, OK, here's what the plan is. Here's the amount that we've decided extra. This is the amount we need to bring in extra every single month in order to meet the goals that we say we have. OK, so let's say that's I mean, you tell me what is it, two thousand extra dollars? What is it?

Yeah, I mean, we've already found $1,000 within our budget a month to throw at this debt. Right, but what's the goal? What have you guys sat down and said, here's what we need to bring in?

We need to, oh, for on our side hustles? Yes, ma'am. We don't have a goal. So maybe that needs to be a goal.

And then you go, okay, let's look at each other's schedules and let's feasibly figure out who can do what. You know, maybe he does a side hustle and it brings in a thousand and you do one that brings in 1500. Who cares? You met the goal and you both decided on it. So I think the problem is, A, there's not a clear goal. And B, you're thinking of it in more as tit for tat. If I work five hours, he should work five hours on a side hustle. If I do Instacart, he should do Instacart. And I think that if you do that, you're setting yourself up for, you know, an unmet expectation. Yeah.

Definitely. How does that hit? Because I think that's dead on. It hits fine. I think we've had conversations about it, and I think having conversations each and every day and meeting each other exactly where we're at is super important. Can I tell you something wild? Whenever we talk about quote-unquote mental health, we talk about relationships, everyone talks about communication and communication, and people think that communication means talk more.

And I find that a lot of people have a whole bunch of conversations all the time that amount to about nothing. And what I love about what Jade said is this is the act and art and science of communication. Let's agree on a goal. $2,500 extra dollars. You as a stay-at-home mom, can you figure out how to find $1,000 extra?

Because that's like you working, what, 200 hours at Instacart? I don't know what they pay you for Instacart, but that's like you taking another, that's another job. You're earning 12 grand a year tax-free, right? And okay, I need you to get 1,500 extra bucks. Now we have a goal that's not going to move and that also allows everybody to drop their shoulders when you hit that goal. And that lets you catch your breath so you can go get the next one. Yeah.

And you're in control of it. It's not happening to you. You have said, this is what I want to get. And it's you, it's both of you guys against this thing, right? You guys are the ones that decided it. You're in control of it. That feels great. And can I tell you, you're not less than Jessica. Thank you. Don't carry that around. You're including the thousand dollars a month you found in the budget.

The childcare that you're saving, you're making about $35,000 a year after taxes. Definitely. Right? Because it's about $6 or $7 million a year per child in childcare. And you found another $1,000. Right.

And you're raising two amazing kids. Like, you're doing good work. I don't want you to feel less than. Just because you participated in running up the credit card doesn't mean that you're less than because you're not out actively earning an income. You are a part of a household that is paying this thing off.

Definitely. And the fact that we can have that extra, I mean, if we can find, I mean, we already found a thousand and if we can find another thousand, 1500 a month, then it's crazy how comfortably you can live when you have that extra liquid cash and you're not having. And how fast you can pay this debt. Totally. I mean, by within less than a year, I think we can do it. Oh, good. Done. That's great. How much debt is it? You never said.

So excluding my car, it's about 19 grand. Don't exclude your car. Why are you excluding your car? Is it almost done? Because I just have the line item. Including my car, my car is $23,684. Okay, we got to include that now. Yeah.

Yes, we just paid off a $2,200 credit card. We have about $2,000 left on another credit card. Okay, good. We have a personal loan of $8,700 and a balance transfer of $9,400. Okay, good. So a good chunk that we racked up. So yeah, you guys...

The good news is you're normal. The bad news is you're normal, right? And so we see people in your situation every single day. They rally together. They get a game plan like we talked about. They decide on the game plan. They spit shake on it and they start moving forward. And that's going to be you guys. And I think you're exactly right. The date that you projected sounds just about right. Most people, for anybody listening, most people who work the baby steps in the Ramsey plan, they're debt free in two years or less.

All right. Baby step two is where you become debt free. And most people, if they continue working in three years or less, they've also saved up three to six months of their emergency fund. So that's the way this works. And then people keep on working right through those baby steps. And most people, John, by the time they get to baby step six and they're paying off their house, it's been about 10 or 11 years. And

And so this is a lifestyle. This is a journey. This is not something that's just a flash in the pan. So getting on the same page with your spouse is super important because this is a lifestyle. This is also the Ramsey show.

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You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. Hey, guys. Listen, you've heard me talk about it before. I'm talking about it again. The Live Like No One Else cruise is quickly approaching. And by quickly, I'm talking about next year. We have an entire cruise for seven days. It's from March 22nd to the 29th of 2025.

However, the time to book your slot is now. You don't want to miss this unforgettable vacation. I told you we're going to places like Turks and Caicos, St. Thomas, Puerto Rico, and the Bahamas. There's lots of excursions. You can ATV, catamaran, jet ski, horseback ride, all of that. Not to mention all the personalities will be there, myself and John Deloney included. So if you haven't already booked your cruise, go ahead.

You need to go book it. More than 85% of the cabins are booked and we're trying to sell this thing out. It will sell out. But if you want a spot, you got to get it today. Book your cabin today at ramseysolutions.com slash cruise. Or you could click the link in the description if you're listening to this on YouTube or podcast. I know I'll be there. Be there or be square. Let's go to Laura, who's in Orlando, Florida. What's going on, Laura?

Hi, good afternoon. Thank you. We have a son with a chronic medical condition and we are in baby step aggressively and baby step number two. And I'm trying to figure out, should we, we, we have about seven or a little more liquid cash. I'm trying to figure out, should we take the rest of that and pay off the

the remaining day or cause things can turn left real quick with him. And we learned the hard way a couple of years ago, we need, we need money to you know, buy the thing. So we're trying, I'm trying to figure out, do I kind of reprioritize baby steps a little bit? Or how do I treat this given the,

his medical situation. Yeah, that's a really good question. Can I ask a little bit more about the medical situation? When it flares up, when things go down, is this you're hitting your deductible or is this we hit our deductible and there's a whole lot of things on the side that we have to do that insurance doesn't cover? It's catastrophic out-of-pocket max. Okay, what is your out-of-pocket max? $10,000. Okay, and you've got $7,000.

Yeah, sitting in a savings account. What I would do if I'm telling you what I would do if I were in your situation, because this is something that goes on and flares up and it's just part of life for you, correct? Or is there an end in sight?

No, it's a chronic breast of his life. Okay. If I were you, I would keep 10K aside. And that is always you have your out-of-pocket max all the time. That's going to give you more peace than you could ever think of. And then that stays there. And if you have an HSA, I throw it into an HSA. And then you work the baby steps. And that way, if anything pops up, you know you're covered. It's not stopping you from going forward. It's not stopping you from working the baby steps with intensity. And it's...

if something happens and you dip into that, then the next year you're back at it again, you keep that 10 K and it's always there because assumably there's always going to be the, the, the chance for you to hit that out of pocket max every year. That's what I would do. Okay. What do you think? Is that cool? Is that cool?

Yeah, we're just, I mean, I just feel like we make a good income, but we also spend an astronomical amount of money on medical expenses. And I just, I'm trying to figure out how to, you know, like, stay afloat. I think that does it because you're paying these medical bills as you go and you know they're going to equal up to $10,000. So yeah, probably out of pocket every single month that feels hectic. Yeah. Yeah.

And Laura, there's not a resolution here. I mean, there's not a time when this will plane. It's just every year it's just going to be $10,000, $10,000, $10,000. Well, I mean, like two years ago, we hit it really quickly within about two weeks. Because when something happens, we're typically talking about an ICU stay. Sure. Yeah.

So, but like this year we haven't hit it yet. But it's also just expensive, the monthly medication, the medical equipment, you know, all of the things we have to buy every month. And I feel like we're living paycheck to paycheck, even though we make really good money. And I'm just trying to figure out a way to not feel like we're so strapped all the time. Can I offer...

This isn't going to help with the math problem, okay? Uh-huh. How old is this baby? 11. He's 11. Okay. Mm-hmm. Are you tired? Is he what? Are you tired? Oh, exhausted. Exhausted. I have a 14-year-old and an 8-year-old, and when they're not well, everything in my life falls over, and I've got nothing compared to what you go through on a minute-by-minute, hour-by-hour, year-by-year basis. And...

I want you to, here's what I think the goal in your house has to be is we have to work towards separating the math problem from how exhausted and frustrated and angry and heartbroken we are. Okay. Because $10,000 in an account on an annual basis, even if that's the first 10 grand of January and February, that's just what y'all do in your house. Yeah. Should allow you to exhale. We've got this year covered.

And look at this. We didn't even get there this year. So we only needed 3000 bucks because we only used 3000 last year. We had seven that rolled over. Boom. And then we're going to, we're going to max out at HSA because we know every month we have to buy stuff. And so then we're going to spend our energy just being sad. And that's different than trying to survive. You get the difference?

Yes. I know we've been in survival mode for three years now. There you go. And so you're in survival, survival, survival, survival. I want you to, when you feel that fight or flight, we're in, what's going on? We got $10,000. We are fine. We have this year covered. Exhale. Okay.

Now, husband, let's just go put our feet up on the back porch when our 11-year-old finally goes to sleep, however uncomfortable he may be. And can we just be sad? It's not supposed to be like this. 11-year-old's supposed to be running around in the yard and tripping over stuff and playing with dogs, not laid up with tubes in ICU. Right. And you see how those are two different challenges? Yes, definitely. But it all feels mushed together. Okay. Let's make it a party. Jay, that's a soul tax. Yes.

Let's just get this 10 grand in an account and an HSA. We're going to leave it there. And once we get that 10 grand, Jade, I would probably, just because I'm a little bit of a worrier. Tell us. I'd probably keep adding. I put 500 bucks extra a year, 1,000 bucks extra a year. And maybe I look up one time and it's 20,000. Then I'll make a decision then. But I know this is going to be a part of our life. It's part of your life.

And let's make peace with the math problem so that we can spend time heartbroken and dealing with the emotional reality. Exactly. And that's essentially what we're trying to do here, Laura. The last thing you need to be worried about is money. Do you know what I'm saying? That's the last thing that needs to be stressing you out. It sounds like you already have a high deductible plan. Do you have access to an HSA? Have you seen that anywhere or-

We did the math the first year once it was... We realized how catastrophic it was in March. And it's actually cheaper for us to go on my husband's P.

PPO plan than the high deductible plan, much cheaper. Okay. That's fine. We stick all that money in a high yield. Okay, great. That's perfect. That's perfect. And again, like John said, you have 7,000 now. If maybe by the end of the year, it's down, it's dwindled down to 5,000. That's okay. You keep it and you add five more to it.

as soon as you can at the beginning of next year. And that's the rhythm of how this plays out. And, you know, if something happens and you're like, you know, it would feel a little bit better, you know, if we had 11 because there's this, you know, you're realizing hotel stays or you're realizing something else that is added to the burden of, you know, hanging out in the ICU, add it.

and make this work because if you can take this off of your normal month-to-month budget, it's going to make your day-to-day, week-to-week, month-to-month cash flow work out a lot better than it is now. And it's going to take that stress, at least that financial stress out of the equation. And really that's what I want for you. And I'll tell you, Laura, your little one won the lottery getting you and your husband as their parents. He's really blessed. This is The Ramsey Show.

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You're listening to The Ramsey Show on The Ramsey Network, where we help people build wealth, do work they love, and create amazing relationships. That's what you're here for, Dr. John. That's right. The relationship part. You know about money, too, but if you have calls about your life, your money, we'll take the call. The number is 888-825-5225, and we'll get into it. We'll get involved. Let's get involved with David. He's in Montgomery, Alabama. What's going on, David? Hello. Thank you for taking my call. You bet. How can we help?

So my main question is, since we're in the military, we move every three years.

And most people, most people will buy a house at their new assignment. And so at three years later, and then throughout their career, they buy, sell, buy, sell. I'm wondering if that's the right idea going forward or if we should rent. And while we're renting, accumulate money and investments that we kind of make money off of over time and then have a large down payment for a house when it's time to get out of the military and settle down somewhere. Yeah.

It's almost like you've really thought through this. Who's telling you that you're wrong? By the way, we have openings if you want to co-host the show with us. I'd love it. A lot of military people will buy a house and then they'll keep it and then they move and buy another house and they kind of build a house of cards and it comes back to bite some of them because renters don't always pay and things happen to houses and all that kind of stuff. So then you know the downside. Yeah.

Yeah, yeah. We definitely don't want to do that. By God's grace, the last two assignments, we bought a house, and by the time we sold it about three years later, we did make good money off it, but I just don't think that's going to... I don't know. Nobody knows the future. We don't know if that'll keep going. Yeah. But I don't know if that's sustainable or if we should...

kind of shift down and do renting and put money away. Yeah, here's the thing. Yes, you know, real estate, it's a great investment for the most part if you're investing in the right real estate. The way that you're talking about

It's not sustainable for a couple of reasons. A, these, you're going to end up with houses, you know, cropped all across the United States. It's going to be hard to manage them, hard to keep up with them. Um, you know, what we teach here is if you're doing real estate, you need to kind of be in the vicinity, especially a beginner, be in the vicinity of the real estate so you can watch it, see what's going on. And when we talk about building a real estate portfolio, it's after you already have your primary mortgage paid off and then you're buying these, uh,

other houses in cash. That's the way that we teach it. So there, I mean, of course you probably have a buddy where this has worked out great for him. And if it has, you know, good for him, but I don't think it's sustainable. And I think there's a lot more risk that goes along with that. So if I were you, I like your plan. I like the idea to rent and save up in a high yield savings account. If you're in baby step three B and save up a down payment. And who knows at the end of all of this, you might be able to buy a house outright. That would be my goal.

Hey, David. With the money we've... Go ahead, brother. Go ahead. Yeah. With the money we've accumulated over time, because my wife is amazing at the budget, I'm more of the spender than she is, but we've put quite a bit of money away, and seeing that grow, seeing the compound interest on that is really awesome. And to see that go for... If we rented for the next...

10 years we could we could have quite a bit of chunk of change to put down on a great house and then soon enough you know just really attack that mortgage get it done before 15 years and then the world's up to us you know and so we can help our children out all that fun stuff i love hearing all this i love hearing all the stories that people say on the show of their freedom the feeling of freedom they have after they're done to travel to do all these fun things and

And that's what we're building towards. And you get a housing stipend? Do you get any housing stipend? We do. Perfect. Yes, we do. And so we try to match that up. Most places we've been, it matches pretty much, you know, that's what we say is our budget line item for how much we can pay. You guys are smart. You got this.

Okay, David. We're trying. Hey, David, help speak for all of the veteran community worldwide, okay? I know you can't do that. I'm just being ridiculous. But help me out here. So there was a year when I realized my wife and I were six figures in the hole. It was a mess that I had played a massive part in creating. We sold our family home, and I was working at a university, and I moved my family into a residence hall.

Me and my wife and a toddler. And it was both a zoo. And when I look back on it, incredible. It changed our life. Because we spent one year or a little over a year with no anything bills. No electric bill, no water bill, no rent, no nothing. Okay. So I asked that because I know that that one year was so transformational. It had such an outsized ROI in the course of my life.

Why wouldn't somebody in your situation, when you can take the stipend or live on base, if you're playing a 10-year game like you and your wife are, is there really that big of a downside to saying, okay, let's live on base for three years and we can pay for a house with cash in 10? Help me with that because that's something I've just never understood. Yeah.

Yeah, we've looked into base housing at every base we go to, and unfortunately, there's a lot of mold issues. There's a lot of water issues, so water quality is pretty poor. And the more news stories we saw and also asked locals, so it wasn't just, you know, what does social media say, but the more we asked friends who'd been on base, you know, they were like, oh, you know, in a three-year time span, they spent half their time moving from house to house because their house had to be gutted because of mold. Ah.

and then they keep getting issues of water. Like, so they'll get a warning that says you have to boil your water. And so do you even want to shower in that? Or, you know, there's a lot of hoops that people have to jump through and it's really sad and really unfortunate. And, uh, they say they're trying to address it. The military in general says they're trying to address it. But,

Even this last month here in Montgomery, you talk to people who've lived on base. They have all sorts of issues. You drive by the house and you see, I can tell. I'm not a house builder or anything. I can tell the roof needs to be done. This needs to be done. That needs to be done. So you're saying that if you take the stipend, you can live off base. It's at no cost to you. You might not be able to pocket that money, but at least it's not, you're not at a loss. Correct.

For officers, I can say that for officers for sure. They call it BAH, so the housing allowance is comparable in most places, I'll say, to definitely a better quality of life off base. Well, I appreciate you shedding some light on that. I've always wondered, and that's actually very helpful. Yeah, I didn't know that. I didn't either. I totally did not know that.

It's kind of anecdotal because we've been to probably four different bases and each one my wife really wants to. She's fully embraced the military life. She wants to be on base and talk to people and, you know, have that culture. But every place I've cautioned her, I've said, listen, I've heard stories and like we visit some of the base housing and it's tiny, it's hot, the roof needs to be redone, this needs to be redone. A lot of times their contracts, they'll call in

you'll call for an issue with your house. The AC goes out, roof, whatever. They'll call the contractor and the contractor is loaded. Like there's just too many work orders. So even if you do have issues, it usually takes a while. So in our experience, yeah. Anecdotally in our experience, we've done, we've done very well with off base housing, but you guys, like you guys preach, it's, you know, it really works when they say we'll give you this much for housing because it

It usually turns out to be about 25%. Sometimes when you're a younger officer, it can be more. That's perfect. More than that. Listen, keep doing that. Keep doing what you're doing. I love your plan. I love this idea of we're going to live off base. We're going to use the money that they give us. That's our budget. Like that's the minimum. And then instead of buying a bunch of houses across America, you're renting. And, you know, how long until you retire? How long until you're no longer moving every three years?

It could be eight years. And so, you know, you get three, four moves in there and all of a sudden you rent the whole way. And then you can really settle into a house that you really want to be in for a long time. Yeah. So in eight years time, in eight years time, I think the fun thing to do for you and your wife is to, again, get out in front of this and set a real goal and say, OK, what do we want to have in this H.Y.S.A. in the next year?

eight to 10 years. And what does that look like? How much do we have to save a month? What does this do for our lifestyle? And I think that's really fun to be able to have that number there. You can work towards it and to know that, you know, in eight years, you'll be close to a cash home or pretty darn near close to one is really, really, really exciting. That's good. I love that. Yeah. This idea of,

Being in the service and everywhere you go, you buy a house and you're gaining equity in all these houses. That just feels, I don't know, John, that stresses me the heck out. That's right. That's right. And hey, if you want to learn more about buying real estate the right way, go to ramsaysolutions.com slash real estate or ramsaysolutions.com slash agent, and they will walk with you and they'll give you the same wisdom and advice that Jade and I just did. But it's a great place to go if you have questions about buying a home in this bonkers market. Mm-hmm.

Good idea. That's a great, great, great idea, John. Thanks for that. This is The Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success. So work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step. Learn more at ChurchillMortgage.com. This is a paid advertisement.

NMLS ID 1591. NMLSconsumeraccess.org. Equal Housing Lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027.

You're listening to The Ramsey Show. I'm Jade. Next to me is Dr. John Deloney. All right, today's question of the day is brought to you by YRefi. YRefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment that you can afford with a low fixed rate interest rate. You couldn't get that anywhere else. So this is going to help you stick to your budget and work the debt snowball. So if you need this, go to yrfi.com today slash Ramsey.

That's the letter Y-R-E-F-Y.com slash Ramsey. This may not be available in all states. All right, today's question comes from Betsy in Ohio. We have a 25-year-old college graduate still living at home. She's working full-time at a low-paying job earning $15 an hour. She's had emotional issues the last few years and she's on medication for having anxiety attacks.

We also think she has snowflake syndrome. She's living rent-free in our home without a specific plan to move out on her own. I don't like the idea of charging her rent, but I also don't want to stunt her growth in living a financially independent life from us. She's a little emotionally fragile, so we don't know how to proceed. My fear is that I will have a 30-year-old still not living on her own.

Kick her out. I'm just kidding. Well, I mean, here's the deal. There's several things going on here. So if she's on medication, that tells me she sat with a medical professional at some shape, form, or in some shape, form, or fashion. There needs to be a family plan. And since you have already gone a professional route and she assumedly has a diagnosed anxiety disorder,

a disorder of some sort. You'll need to work on a plan, the three of you, you, husband, and child, on a what's next strategy. Okay. Here's number two. This one's where things are hard. You say these things that she's got emotional issues. She is stunted. You're worried about her being there 30. She's fragile. She's fragile.

And then you threw in there, I don't like the idea of charging her rent. And my guess is you haven't liked the idea of her being uncomfortable her whole life. And this fragility, think of it this way. Often with our kids, we don't want them. Nobody wants their kids to hurt. Jade, you and I have kids. We don't want our kids to hurt. We don't want our kids to be uncomfortable. And what happens is parents over the course of a lifetime keep going into the gym and taking the weight off the bar.

Because they see their kids struggling and they say, whoa, whoa, whoa, no, no, no, no, no. I worked really hard so that you don't have to struggle like this. I'm going to take the weight off the bar. And then they become 25 and something happens. Life happens. Things get hard. They get 28, 29, 30 and they face failure. They face their first layoffs. Their spouse walks out on whatever. Yeah.

They never had a bench press. And suddenly they don't got the strength because no one's ever let them handle the weight of a squat rack. And so this idea of fragility can only be fixed with strength, right? Unless there's brittle bones and we're going to go, right? There's actual medical issues. Sure. But let's think this emotional fragility is going to come through slowly over time, heading into that anxiety and teaching somebody how

You can get stronger. And I believe in you. And I think you can. We're going to practice, but we're going to head towards this. Not just hide away in your bedroom, rent free for the rest of your life. Listen, it's not going to change. I'm not going to act like I know anything about this subject matter beyond. You do. You got life. You got life under your belt. I was going to say just beyond life, but you're the expert. So answer me this because I'm going to talk. I'm going to say what I think that somebody listening on the radio is thinking right now. Let's do it. Like I look at this and I go, wait a minute.

I feel like I run into people every day who have anxiety attacks and are probably on some sort of medication and they're leading full lives. They've got a house and they've got a spouse and they've got kids and they got a job and they're... And most of the time it's because they've had to and this child has never had to. Okay, that's just what I was trying to get to because I feel like we're treating this... In some cases, I feel like we come across as and it's like, oh,

Tiptoe. I'm like, wait a second now. Almost all these situations are somebody's been tiptoeing for 25 years and then you have enough. And then I tell Betsy, you've got to spend some time in the bed that you made. Okay. And that means y'all got to work out a plan because it would be cruel at this point if

To just up and pull the rug out. You got 25 days and you're out of here. That's not nice. You created this world, right? Yeah. But you do, Betsy, have to choose reality. And you're right. You're going to blink and she's going to be 30, your child, and still living there. And that's going to be more Betsy's. That's more on Betsy than it is on... That's exactly right. That's exactly right. So I am reading the context here that this is not somebody with some major neurological challenges, somebody who's wrestled with something their whole life. Mm-hmm.

that there is definitely some relationship challenges between mom and this child. All that said is to quote our friend Henry Cloud, at some point your child has to be trusted with some problems. If you're going to stay here, you're going to have to pay in rent and that rent starts in 30 days.

And you're going to pay $200 and then it's going to go up in four months to $600. And then it's going to go up to $5,000, right? We're going to make this to where you got some choices to make. I hate you. I don't love you. You know that I'm not doing well. No, I actually believe in you. I'm going to trust you. That's so, so, so true. And Betsy, you're going to have to deal with the discomfort of having an uncomfortable child. And here's the deal. My son's 14. He comes home from these cross-country practices where he's running halfway to New York City and back, it seems like.

And he's, he's exhausted and I'm watching how much it hurts. And I see he tripped and fell the other day or some guys in his knees were all skin. Just let him do it. My job is to stand next to him and not try to solve it, but to say, man, I see how hard you're working. Yeah. And that, that,

gives him this this idea my dad believes in me too but like play it the opposite way john i mean what if you saw hey whoa it's too hot it's too hot you shouldn't be doing that hey if you're gonna fall down if someone's gonna push you down while you're right you're not doing this i'm taking you out across country and what if i told him when things get hard i don't believe you you've got what it takes and i'm not gonna do that i'm not gonna do that to my 14 year old right yeah and then if he becomes 25 and he shows some signs of some neurological challenges or some

major psychiatric challenge. Dude, now I've got a context. But here's what we want to avoid. We want that anti-fragility that Nassim Taleb talks about. I want my kids to be stronger when times get tougher so that they thrive when times get tough. And you only do that by doing hard stuff every day over and over and over and over again. That's real. Always being uncomfortable so that when real discomfort hits, you're ready to rock and roll.

John I'm gonna just give you the mic for the rest that's hard man this is like a pet peeve of mine it's very good though and it's heartbreaking it's heartbreaking for this daughter it's heartbreaking for Betsy because Betsy doesn't want the world she's also created yeah and on and on and on man on and on and on till the break of dawn that's good that's a good word John uh all right let me see here let me talk to Thomas right quick I can get to him real quick here in Chicago Illinois what's going on Thomas I'm against the clock what's your question

Hey, how are you doing? Doing good. Thank you for taking my call. My question is, I'm investing in my retirement plan. It's a 401k through my job. And I'm on baby step six. And I'm wondering if I should attack the mortgage and stop investing fully. I can give you a little context with that, but that is the general question. Well, here's the thing. I would never advise that.

I would always say you need to keep investing. There's a reason that the steps are in the order that they're in is because, yeah, we want you taking advantage of that compound interest over time. And we want you building that muscle of I invest 15% no matter what. This is how it is. The only time I would say, hey, you're going backwards is if

you went into consumer debt again, and then you were back to baby step two. But in this case, it sounds like you've got your primary mortgage, yes, and then you've got this rental property. Is that also true? Yes. Okay, so how much do you owe on the mortgage, your personal mortgage? The primary mortgage is $250,000. The rental property is $130,000. Okay, what's the rental property worth? So the idea for me is to attach...

the rental property is worth about 260. okay um is there a reason i'm just asking is there a reason that you wouldn't offload the rental property to pay off your personal mortgage and then save up to buy cash for the next one uh i i would say yes um it's more of a personal attachment i guess it was my my first home that i bought and i lived in it for uh

Listen, if I were in your shoes, you're looking for a way to pay off your primary mortgage as quickly as possible. And you were even willing to stop investing for that. So that tells me you really want to get this thing paid off. If I were you, I'd be looking at that rental property as the solution. I would not stop investment contributions to make this happen. If you keep both of them, I'm fine with it. Just be intentional about paying them off. This is The Ramsey Show.

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From the Ramsey Network, it's The Ramsey Show. I am Jade Borshaw. Next to me is Dr. John Deloney. We're taking your calls. We're helping you build wealth, do work that you love, and create amazing relationships. We're doing that by taking live calls every single segment, talking about your life and money. Hey, if you want to call in and tell us about your life, tell us to strangers.com.

about what's going on in your life and your money, you can do just that and we'll give you our best advice. The number is 888-825-5225. That's all you got to do to get involved. All right, John, let's go to AJ. He's in Tyler, Texas. What's going on, AJ? Howdy. Howdy. So I have a question. My husband and I just recently got married and

like three months ago, but next year he has plans to go to optometry school. And I'm guesstimating, I don't know exactly the price of it. It's going to be, I'm guessing around $200,000 that we would have to take out. Okay. And that's over the whole entire four years, and that's including the boards, the exams, everything like that, the equipment. All in.

Yes, ma'am. And so I'm wondering if there's a better alternative than traditional student loans. We're kind of new to the whole don't be in debt thing. So we don't really know what we're doing. So, AJ, I'm going to speak broadly here. And this medical school is the one...

It's probably been the hardest thing for me to try to wrap my head around when it comes to Jade and I. But the whole, me, Jade, all of our colleagues will tell you, don't take out student loans to go to college. And medical school is tough. And here's why.

If there's a simple cost, if I want to become a brain surgeon, then I have to be taught by somebody who knows how to saw open a skull and do brain surgery. And that doctor, she or he could make a jillion dollars out of the marketplace. And so to hire that person to come in and be a professor is,

Cost X amount. So med school is always going to be incredibly expensive. There's just a labor cost, not to mention all the other things that universities pile on, all the other administrative things and mumbo jumbo. So I've always wrestled with that. In your particular situation, y'all have to make a decision.

Do you, are you able to say for the next four years, we're going to buckle down so that we can have the next 50 years after that, we can be free and we can live the life that we want to live. Meaning y'all got to come up with 50 grand a year. And so that would probably fall majority on you as his wife to work and to say, we're going to cashflow this thing and we're going to live like freshmen and

and we're going to get through optometry school all the way through the boards. We're going to have spent 200 grand and he probably will not be able to work. I don't know what the residency program is on optometry school, but we're going to get all the way through. There's not one. There's not one. Okay. So maybe he can work limited amount. Um,

But we're going to get all the way through. And this is our goal. Four years from today, we will owe $0. You will have an optometry degree. You're not going to run out and take out a seven-figure loan to buy a practice. And we're going to be able to live wherever we want to live. And when insurance changes, when AI interrupts, we're going to be okay because we never borrowed any money. But that's a choice you'll have to make right now. Otherwise, you're going to find yourself like many, many of my friends...

who went to med school, had careers as medical doctors, and still have their student loans and their kids are going to college. Woo!

And that's a number of my colleagues, and I'm telling you 20 years from now, it is a nightmare. It's a nightmare. Yeah. That's what we're trying to avoid, and we know, like, I do plan on working the entire time to kind of cash flow where we can. I just don't know that I'll be able to make enough to fully cash flow it. So...

I make, right now, I make seven. But let me interrupt you. It's a value and a principle thing. And if you start trying to nickel and dime it, and you start trying to say, well, we can't because...

There's always a variable. And maybe the variable is, okay, we're going to have to delay entrance to school for one calendar year. So that means we're going to set out two years and you and I are going to work B-A-N-A-N-A-S and save up this money because our values that we anchor into bedrock is no one will ever own our family. Not a bank, not a lending institution, not a car dealership, nobody. And if you don't feel that strongly about it, I mean, literally he can

send a few emails, sign a few pieces of paper, and they're going to give you $100,000 a year. That is a drug. It's just too hard. You have to say, I will not get on that train. Otherwise, it's just too easy to do it. You know what I mean? Yes, sir. I hate that for you because I need good optometrists out there, and I want good doctors out there, and I want good attorneys out there, and all the schools are so expensive.

But essentially what we were talking about here is you determining the timeline and you being extremely intentional.

And in all you're doing, you're differentiating yourself by not just kind of like letting the wind blow you into this. Right. Like it's like, oh, optometry school. That sounds good. Let the wind blow me in. And oh, how much is it? All right. Let me let the wind blow me over here to these student loan debts. And what you're saying is, no, I'm going to intentionally be very clear about the direction I go and the speed at which I do it.

And that's really what we're talking about. You're just lasering in and you're going, hey, I'm doing the same thing. I'm just making sure. And here's how I'm doing it. And then so there's this level of control that you have over it as opposed to letting the system control you. Well, this is the optometry system. Once you jump in, you're in it and you got to get the loans and you got to do this and then you got to go and get the practice. And you're like, no, no, I can make my own rules. Right.

Like you can change the game here. You don't have to let the game run you. Right. And I think that that's actually pretty BA. If you ask me like that, you could just jump in here and go, you know what? No, no, no. I make the rules. It's my money and I get to decide how we're going to do this. I think that's pretty freaking awesome. Do you know, AJ, I don't have this, this data. Do you know how much an optometrist makes a year? What's an average salary?

It depends. So his brother actually did it as well and he started working last year. He got a really good gig making $165,000 but some of his other classmates only started at $125,000. So it's pretty broad. So just for context, if you were both school teachers there in Tyler, Texas, y'all would start at about $58,000 or $60,000 and you'd have a combined household income of $120,000. Yeah.

And the reason I tell you that is it's real easy to get starry-eyed about a job title and not live with the reality of what that job brings to your house. Across the country, starting salaries for attorneys have fallen all the way down to $65,000, $70,000 in certain places. That's a school teacher who works at Chick-fil-A in the summertime.

And so there's a resettling of these, the outsized schooling expenses. Now, if you told me he's going to start at $325,000 a year, that's just what they make. That's the starting salary. And then we're going to go from there. Man, let's have a whole different conversation. I'm still going to tell you don't borrow money, but that's a different conversation. If you're telling me best case scenario, best case scenario, he makes $150,000.

man, what if he put two years into becoming the best car salesman in Tyler, Texas? I guarantee you that guy makes more than 150, right? So it's just a re-imagining of what's possible when you put the dollar amount down and this dream side by side and say, okay, what's real here over the long haul? And then good gosh, what's it going to cost to get into that? It's $0 to get into selling cars. It's $200,000 for the price to play.

Autometry school. There's more than one way to skin a cat is what John is trying to say. This is the Ramsey Stroke.

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You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. We are your hosts for today, taking calls about your life, your money. If you want to get into it, you can call us. The number is 888-825-5225, and we'll get all up in your business. All right, let's go to Timothy. He's in Laguna Beach, California. Oh, that's the place where James' favorite show of all time is, Laguna Beach.

He's got a... That's James' favorite show. He's got a tattoo of it, the whole thing. It's kind of weird, but he loves Laguna Beach. All right, so what's up, Timothy? Hi, Jade. Hi, Dr. John. My fiance and I are huge fans, so thanks so much for taking my call. You got it. What's up? So...

Yeah, my fiance and I are getting married in a couple of months. Thank you. And my parents just gifted us $20,000, and it's just a gift for future down payments for our house or just extra support for the wedding. I got a high five when I got engaged. You got $20,000. That's incredible. I got a buffet, Chinese buffet rehearsal dinner. Okay.

Oh man. At the Chinese buffet. Good on you, Timothy. Thank you so much. And although I'm very grateful for the gift, I'm not sure if I feel comfortable with it just because my parents don't have a really good retirement plan set up for themselves. And so for me, I feel very hesitant. And so for me, I'm not quite sure what to do with it. Interesting. So you're like, hey, you guys can't afford to give me this $20,000 essentially. Yeah.

Yeah, pretty much. And I just feel like it would be better if they held on to it. And, you know, of course, for me, I feel so grateful because they're very generous parents. They always have been their whole lives. And they've been saving up all this money for this moment. But for me, I know that financially they're not really set up well. And so for me, I feel a little burdened by it. And so I'm not quite sure I've been really wrestling with this. You're a good son.

You're such a good son. Yeah, that's pretty cool, man. That's wonderful. It's really the exact opposite of selfish. How certain are you, Timothy? Are you confident or are you guessing as to their financial situation?

Well, I know my dad has been doing the same, you know, embroidery job. He's self-employed and he's, you know, he's always been, you know, on the lower side of the income. So he's always had lower income. And my mom had to pick up a job taking care of elderly people. And so I know that their financial situation hasn't changed. And they've rented the same house for over 20 years. Like they still live in the same house.

that I grew up in and I know that financially nothing much has changed. That could mean they just save a lot. Yeah, part of me is like, man, I know people like that and they're like, yeah, I've got $7 million. Yeah,

You know, I'm honestly hoping, I'm just waiting for their secret to say, you know, to come out and say, hey, we actually saved up millions of dollars. But I know that that's really not the case. And because I talk about their retirement plan and it just, you know, they just say, you know, we're going to have to work until we die. And that just seems like the reality of the situation. Here's a few thoughts. Here's a few thoughts I'm having. Okay.

Thought number one is take into cultural context, take into... I think... Gosh, I'm going to probably get in trouble for saying this on the Ramsey show. I think as a Western culture, we have stripped our culture of all sorts of meaningful signposts, if you will. Just pause and celebrate things. We've turned everything into a transaction. And so...

Here's my hesitancy. One time somebody gave me a gift that I didn't think they could afford. It was a really fancy dinner to celebrate a really cool milestone that we did together. And I tried to be slick and I secretly paid for it behind their back. And I hurt that person. I'll never forget and I've never done it since, but she looked at me, it was an advisor of mine. She looked at me and said,

This was my gift. You blocked the blessing. Dude, it was just, it was my own arrogance. Like, oh, I know your situation better than you do, so don't worry, I'll take care of it. And so I have a bias there. And so part of me says, if somebody has spent the last 40 years saving nickels and dimes for this moment when you are going to leave and cleave,

let them be adults and make adult decisions. The other side is I also know what it's like to be haunted by a gift that you know somebody really is paying. So part of me says save that 20 grand, put it in account, and say thank you so, so much. Are you going to cash flow this wedding? Do you already have plans? Can you all do that? Yeah, my fiance and I are 100% paying for it. We're keeping the budget low of about maybe $17,000. Okay.

Yeah, so we're 100% paying for it. - Here's something creative you could do. I'm spitballing, I'm thinking about what John said, both sides of it, because I agree. There's one part where you're like, man, I don't wanna block this person's blessing 'cause it's a blessing for them to give it, it's a blessing for you to receive it. Then there's what John said, which I also agree with. Sometimes you're like, man, I shouldn't have let them do that or they shouldn't have done that. And you live with that. What if, I'm gonna hybrid this thing, what if you accepted the gift and you're like, I'm gonna stash this away,

in a high yield savings or i'm going to stash this away in an index fund and knowing what you know about their finances on down the line you're able to re-gift that back to them 20 years hey mom dad we got you plus interest and you're like you know what you took care of me and you gave me this gift now i want to give you this gift back that's some fence put what did you call it fence post would you just sign post yeah just and here here's the third option um

I'm guessing your parents are the kind of folks that have been working really hard and they wanted you to have good education and they made sure you knew what hard work was and they set you off pretty good. Is that fair? Yeah, it's a hundred percent. Okay. I'm imagining my 14 year old being 25 on the eve of getting married and taking me out for lunch that he paid for and saying, dad, um, I want to tell you what, what you give gave me, you gave me character, you gave me this, you gave me this and you gave me some opportunities. Um,

Because of the investment you made over the last 25 years of my life, I actually have saved up, me and my fiance, and we've got enough cash to pay for this wedding. It would really honor us, and I'm using your dad's business money

Would you be willing to embroider a gift for all of our attendees to our wedding instead of this 20,000 bucks? And what you're doing is you're not saying, dad, we don't need your help or your love or your blessing. You're saying, because you've been such a blessed, I'm gonna get all choked up. Shoot. Because you've blessed us for a quarter century, I would love you to bless us in this way.

And that way you don't rob your dad of his autonomy and his, his honor and his dignity. But you say it would really be a blessing to us to channel it in this way. And he may look at you and say, you're taking this 20 grand son. And you're like, yes, sir. Right. And I'll put a high yield savings account because we don't need it. But instead of just saying, we don't need you. There's something on her about saying, here's the story. I want you to see the story that you, that you wrote 25 years ago, dad. And here's what it looks like now. Thank you. And man,

And man, if you could not take this, instead of this cash, if you can embroider, use your talents and skills to make something for this wedding, it'd be a gift. And you see how that might be a third option here.

Yeah, exactly. And, um, yeah, that, I think that's awesome. And I know, um, cause they, they handed it to us, um, uh, just the other day by surprise. And I said, Hey, can we talk about this first? And my parents were like, no, you're, you're taking it right now. So, yeah, let, let the, let the, let the air like,

And then come back to, okay, this is a math problem. This is a reality problem. This is an honor and dignity and respect problem. And your dad may look at you and say, you're taking this money. And if he does honor your dad. And they're not, we can tell just by listening, they're not the type of people. Cause some, some gifts do come with strings. And it sounds like just by what you're saying, they're not the type of people that is like, Hey, you took this gift and now we get to decide, you know, or now we get to say an X, Y, Z, or we expect now that you will do X, Y, Z. Like they, they don't sound like those sorts of people. Correct. Yeah.

That is correct. Okay. Because if that was the case, then I'd definitely be like, drop the money and run. Like, just drop it on their doorstep and go. But they're not, it's not that. And so that's, for me, that's always the biggest red flag is, if I take this money, is there going to be something attached to it? But if that's not the case, they're doing it out of the goodness of their heart. I love John's ideas. I'm not going to add anything to that. I'll say one more thing, Timothy. Do not, if you look back and suddenly realize, oh, they've lived in the same rental house for 20 years because they were putting money away from my wedding.

Don't let your guilt over this gift impact that blessing that they're trying to give to you. I often feel guilty about, well, I know what this probably... There's something to be said for living open-handed and grateful. Just dropping your shoulders and saying, thank you. And people have different priorities. That's right. We know we rented so that we could because we wanted to. Okay. They made grown-up choices for a quarter century for this moment. But sometimes it's just having a father-to-father or...

parent to child conversation over over a cup of coffee saying I love you and I see you is this the right move this is the Ramsey show

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In the show notes. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. We just spent the whole break talking about John Mayer. I hope you're a fan. If you're not, you need to become one. But this is a show about money. We talk about your life and what? Kelly, you're not a fan? Oh my goodness. Our phone screener is shaking her head in dismay. Oh.

Oh my goodness. That's all right, Kelly. I forgive you. Anyway, I need some time. I might need some time. I need some time. This is a show about money, not about music, but John and I like music. We discuss it a lot. But if you want to talk about your money, give us a call. The number is 888-825-5225. We'll get you in. Speaking of money, you know, John, I find a lot that there's, you know, when it comes to money, there's a lot of jargon, a lot of lingo. You know, a lot of words that it's like, if you don't know exactly what that is, a lot

a lot of terminology. If you don't know exactly what it is, it can leave you making assumptions. It can leave you feeling left out of a conversation or maybe like dumb. Okay. Yes. That's the way. Yeah. Sometimes I'm sitting by Dave, by you, by George. I'm like, what are y'all talking about? Nerd now? I never feel dumb next to George, but you and Dave, I just feel like, what do y'all, I don't know the words you're using. I mean, it, it,

it's like that sometimes. And so we decided that, you know, a lot of times folks will come up to me, John, and they'll be like, hey, can you tell me such and such? I'm asking for a friend. They want the advice, but it's like, I'm asking for a friend because I really don't want you to know that I was today years old when I actually found out what

bankruptcy is, for instance, which happens to be the topic of the day. Bankruptcy. We hear it all the time. People call into the show. They're like, hey, I want to file for bankruptcy. They may not even really understand exactly what it is. So we're going to clear that up for you today, asking for a friend. What is bankruptcy, Jade? And how does it work? I'm going to explain how. And I need the help of my friend Michael Scott to do it. Hey, cuz, heard you're having money problems. No, you didn't.

Listen, I got the answer. You declare bankruptcy, all your problems go away. That is a good point. Bankruptcy, Michael, is nature's do-over. It's a fresh start. It's a clean slate. Like the Witness Protection Program. Exactly. Not at all. I declare bankruptcy! Ha ha ha!

Dude, I remember where I was when that episode came out and I remember laughing so hard I thought I was going to die. I have referred to that so many times in my life. I don't know why they thought they could play that and then have me do this segment. I declare. Okay. Somebody told me they're like, hey, I think I'm about retiring.

I'm like, can you afford to retire? And they looked at me like deer in headlights. And I was like, you can't just declare bankruptcy like Michael Scott. That's the greatest it's ever. It's awesome. That's one of the best clips ever. All right. So Jade, what is bankruptcy? What is it? There's all these different kinds and numbers and colors. What kind is it? It's basically a legal process that you can go through if you're buried under so much debt that you're like, I don't know if I can pay.

I don't know what to do. And so what basically what you're doing is you're submitting it to the court and they're looking at everything. They're looking at your assets, your liabilities, talking about basically what you owe versus what you own. And then they're going to decide, can they actually pay this back or not? Right. And then the court decides if you can't pay back your debt,

They're going to look at that and they're going to say, if you have means to pay, how do you pay it back? And if you don't have means to pay, what they will look at canceling. They might cancel some of the debt. They might cancel all of the debt. They might have you pay back some of it. So it's basically letting the court look at your money and do what we do on this show, which is say, here's what you should do. Let's look at it. Can you afford it? How long would it take you to pay it back? All of that. So

Here's the thing. If you file for bankruptcy, in some cases, you might have to sell some of the things that you have in order to pay back the money. You might have to sell houses or cars, that sort of thing. And so that's how that works. So here's the thing. Bankruptcy, it can stop a foreclosure. If your house is in foreclosure or in the process of being repossessed,

It can stop that process. It can stop your wages from being garnished. Like if you're in so much debt that the government is popping in there and garnishing wages or whatever, bankruptcy can stop that from happening. It can help you clear out some debt, right? Like if you've got a bunch of medical bills or a bunch of credit card debt, it can help clear that. Sorry, student loans are not on the list for those of you inquiring. It does not cover other government debts.

uh it doesn't cover things like child support or alimony you are on the hook for that okay um

So you may have heard like what John was talking about. There's different types of bankruptcy, right? You hear them spoken about as chapters, right? The one that you hear most is chapter seven or chapter 13. That's the ones that you're going to hear that we talk about on the show a lot because they apply to personal finances. OK, so chapter 13. This is basically when the court says, hey, you need to replay something.

some or all of your debts. Some of them we're going to cancel and some of them you're going to pay off and we're going to put you on a repayment plan. And that payment plan is usually between three to five years. And again, it sounds suspiciously close like what we do here. It's very close to that. So all the time when people

calling they're like man i'm thinking about filing bankruptcy i'm like they're gonna tell you to sell your stuff and they're gonna tell you to pay off your debt and get on a plan to do it that's what we do here and the great thing about not doing it through bankruptcy is you still have control over it all right it's not the court reaching in and saying yeah you're gonna sell that vehicle and you're gonna let go of that you know you get to control it all right i digress chapter seven

This is when the court reaches in and they say, hey, we're going to sell all your assets and we're going to just erase your remaining debts. And some of you might be thinking, Jay, this is great. I want them to erase my debts. That's what I want. But the thing you're forgetting is it takes up to 10 years for bankruptcy to be cleared off of your credit report. 10 years. All right. And again, that's them reaching their hand into your life.

and they're taking the things that they can take. They're selling off your stuff and you have to just stand there and watch them do it. And so that's kind of what this looks like. When you file bankruptcy, you have to go through credit counseling afterwards. It's kind of like, hey, now we're going to try to teach you how to manage your money better because you went through this. And obviously it's going to cost you money. The entire process is probably going to cost you around $3,000 or more because there's filing fees and attorney's fees attached to it.

And of course the downside is banks know about this, uh, clients and businesses know about this and they get to choose whether or not they want to work with you or not because of this bankruptcy. So it is not a cure all, it is not a catch all. Um, yes, there are other types of bankruptcy chapter 11 that has to do with businesses. Um, so if you ever hear, uh,

A business file, Toys R Us files for bankruptcy, right? It's just a way that they can reallocate their debt and probably stay in business. Chapter 12, that's, you know, that's another type of bankruptcy. You don't hear about it a lot unless you're into farming or farming.

fishermen, that kind of thing. Chapter 15, again, for international cases. And then chapter nine, that usually applies to municipalities and things like that, state and local government, schools, that sort of thing. So the key ones that we talk about in personal finance, again, chapter seven, chapter 13, and

And again, while we don't recommend filing for bankruptcy, when you do this, you know, you have to file, you go through, file the paperwork. They're going to ask for certain things. They want your tax returns. They want your proof of income, proof of debt. And that's what they're going to use to ultimately determine what is going to happen if you're going to be in Chapter 7, Chapter 13, what you have to pay back, what they're going to sell off and what gets cleared. So that's how this works. The thing to walk around and walk away from this is,

Bankruptcy, it's all-encompassing. It's life-changing. Dave Ramsey, he's got the most popular bankruptcy story I know of. I've never filed because most of our debt was student loans, but it's not something that we recommend here. And it's for the reason that I've said before.

At the end of the day, they're kind of doing what we teach here. They're looking at everything, listing the debts out, just like we would tell you to do. Hey, list out the debts. And then they walk through and say, OK, we can sell that off, sell that off, sell that off. If you call in here, we're going to tell you sell the car. OK, get rid of the forerunner. OK, can you sell some of the you know, some of those old clothes? We're going to tell you what you can sell. And then they're going to say, OK, with whatever's next, you got to get after it.

And they say, hey, whatever's next, you got to pay it off in three to five years. The only thing with us is for most people who work the Ramsey plan, they're out of debt in two years or less. And so I'm just saying, and you don't have to have the scars that come with, you know, the government's hand reaching in and selling off your, you know, four by four or whatever. I think that's maybe the most important call out here.

there are a few things more stressful and more destructive to an individual in a marriage unit than putting your face in your hands and saying,

We're bankrupt. Yeah. You take the control. You're done. The control out of your hands. The government has to come take a part of our lives and sell it because we're out. It's not something to be taken lightly. Dave still has PTSD and it was 30 years ago, right? Okay, I bet he does. Still a part of his life. You still hear it on him, right? This is The Ramsey Show. The Ramsey Show.

I know you work hard for your money, and the key to keeping more of it in your pocket is by making a plan for your spending with a budget. And EveryDollar is the budgeting app that I use personally because it's perfect for looking every dollar you make in its little president face and telling it exactly where you want it to go, just like you told that guy in traffic exactly where you wanted him to go. And even better, EveryDollar walks you through the entire budgeting journey so you always know your next right step.

Download every dollar for free in the App Store or Google Play today. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. We're taking your calls. The number's 888-825-5225 if you want to get in on the action. The calls need to be about your life, your money, your wellness, all sorts of things we'll talk about. Hey, I know you guys hear us day in and day out. We're giving financial advice. We're talking about baby steps. We're talking about opportunities.

the ultimate way to financial peace. But it's worth noting that there's a foundation to all of that. And the foundation to all of what we teach is budgeting. And the best way to make the most of your money is by creating and sticking to a budget. That goes without saying, you can't do this without having a budget. And since we know that, we created the best budgeting app that there is. And it's called EveryDollar, okay? It makes it super simple to spend,

to track your transactions, to plan and save for what matters to you. It's all in this easy to use app. And if I say that it's easy to use, that means it's easy because your girl is not really technology and technological savvy. Okay. I don't like it, but with every dollar I do like it. It makes it easy. It's very intuitive. It fits into your busy lifestyle and it fits into your pocket. Okay. You can do it on desktop or you can

you know, on your phone. And so it just, like I said, it helps you keep a pulse on your spending. It helps you make progress on those money goals. And so if you don't have every dollar, you need to download it today for free. You can go to the app store or Google play. You can click the link in the description or you can click the link in the description if you're listening on YouTube or the podcast in order to get that. So get it today. Every dollar. All right, John, I can talk about every dollar all day. I know you're the, the every dollar guy.

Budgeting queen. That's what they call me. All right. Let's take some calls. We got Corey. He's in Palm Springs. That's who I used to call James. The budgeting queen? Yeah. He likes that. Yeah. He had to get rid of the tattoo. He had to get it removed once you came along. Yeah. He was jealous of me that I had a budgeting queen. He was. All right. Let's go to Corey in Palm Springs, California. Sorry, James. What's going on, Corey? Yeah. I'm new to the baby steps. I'm still on one. I have about, hey,

Only 300 saved up so far, but I was trying to see like how to get going quicker and what direction I should be going. I do, I'm going to be starting a part-time job. I have a full-time job right now. I'm going to be starting a second part-time on Friday. I also have like a little hot dog cart.

business that I started on my own. It's very small right now. And just, I'm trying to get your opinion on, do you think I should aim more towards like an actual legit part-time job and hustle there or more towards my own thing? Just given like the upfront costs of it. I don't, I mean, I'd follow the money on this one since you're in baby step one, I'm going wherever the money is. How long did it take you to get the 300 saved?

That was this month. Okay, good. So with all three combined, once you start the part-time job, you got the hot dog cart, the full-time job, what will you be making in a month once all those things are firing? Well, with maybe $3,400, that's not including the cart. The thing with the cart is it's very hit and miss.

You know, like, I don't really know. Like, it's not a big thing. It's just being by myself with a little push cart. How much time do you put into it every week? How many hours? If I were to go on the weekend on one day, I might get maybe 150. For how many hours? Maybe like four. Hmm.

Yeah, it's not really high return. The only thing too is like with the part-time, if I were to go more into it, it'd be seven days a week. I'm having a hard time. I do have, I'm in recovery. I have two years clean and sober. I do have a couple felonies on my record, so it makes it harder for me to get better jobs. Okay. I see what you're saying.

Okay, well, listen, I admire the hustle. The hustle is real. I love that you're out here. You're like, I don't care if I have to sell hot dogs. I'm going to make it happen. I kind of like that you have some variety here because I'll tell you one thing with side hustling like this, you get sick of doing certain jobs. And so it's nice that you kind of can lean into one or lean into the other. And then you've got this full time job here. Yeah.

Again, if something pops up where you can make more money than the hot dog cart, then I would jump over to that. How much debt are you working to pay off once you get this thousand saved? I have about a hundred thousand. That's including my mortgage. Okay. That's including the mortgage. How much of it is the mortgage? Fifty five. Okay. That makes me feel a lot better. Okay.

All right. So we got $45,000 that we're trying to pay off. You're making around 3,400 bucks a month. Yeah. The key here is for most people, baby step one, they're able to do it in about 30 days. And the reason they get it so fast is because not only are they side hustling Corey, but they're also selling whatever they can. They're living on bare bones. I mean, if there was ever a month to sacrifice to the fullest, um,

the month that you're in baby step one is that month. So you're going to, I mean, this is the month where you're like, Hey, we're just eating peanut butter sandwiches. Like this is the month where you go hard in the paint. Um, and then after that, then you get into your normal baby steps, uh, baby step two gazelle mode. So yeah, that's what I would do. John. Corey, tell me a little bit more about this, this hot dog cart. How much have you sunk into this thing?

The thing with that also is, like, I don't have all the permits and stuff. It is literally just a push cart with the grill. I only spend, like, a couple hundred dollars on the setup, and so I do some, like, hired catering gigs here and there. But you're also rolling the dice again that you're going to get another...

You're going to get caught again. Yeah, exactly. All right, let's do this. Let's not dig any more holes, both legally or financially. Is that cool? Especially for a hot dog, man. Yeah, it's for a hot dog. Yeah, yeah, yeah. So just napkin math. If you mowed four lawns, that's $160. Okay. That's $40 a lawn, give or take $10 here or add $10 wherever you happen to be.

And the reason I tell you that is if you can grab a get a mower or borrow a mower from somebody and more Four lawns mow four lawns. You've already You've already reached your threshold that you're making with that hot dog stand and you know You have a repeat customer and then you keep going back and going back and going back and then nobody's gonna come over there and Write you a ticket for not having the right permits and I tell you that because that's just one of power washing odd jobs, um

I have a buddy of mine that started a six-figure business by changing oil in their driveway. His name was Gus Menendez. He's one of my closest friends. He's amazing. He drove around and changed people's oil in their driveway. And you're in Palm Springs. There's some folks with money who don't want to do this. You see what I'm saying? But you don't need job applications. You don't need to disclose everything. That was a former life. You're a person of integrity.

and you're a hardworking guy, I just want you to keep your eyes open and not get fixated on hot dogs, hot dogs, hot dogs. Because, man, there's way more money to be made out there and very unique in different ways. Okay. Is that fair? Yeah. All right. Think big, but, man, go make it happen. I'm proud of you, dude. John, I don't think he was fixated on hot dogs, hot dogs, hot dogs. That's James. Hot dogs, hot dogs, hot dogs.

Oh boy. Oh boy. You know, it's funny what people get into. Like we should have, I kept, I should have kept them on the line and asked him like, what made you get a hot dog cart? You're like of all the things, like what people are passionate about. It's interesting, but you're right. Here's, here's, here's how we end out this segment in a way that makes more sense. Then hot dog, hot dog, hot dog. What, what I'm, what we're talking about here is side hustling. And there is some, some method to the madness here, right? It's, it's easy to go. Okay. Like,

what's available to me and everybody jumps to Instacart, everybody jumps to Uber and the things that are kind of like preset there. But a lot of times, depending on where you live, depending on what the market is, you might not make enough for the time that you're really sinking into it. And there's something to be said for, and I will say this because when Sam and I were getting out of debt, uh,

I'm not going to sit here and act like it was really the side hustles that broke us loose because we had to get our core income up. Let's be honest about that. But the side hustles did help. And I found that when you do side hustles that are more entrepreneurial based, like what you were talking about, you buy a pressure washer, you go out, you get the clients, you set the rate, you set the time. You can make a lot more money doing those service based. Yeah. So fast. So fast. So fast.

You mow lawns. You decide, hey, I'm a nanny. I set the hours. I just, you know, this is what I offer. I cook meals. I do laundry or I start a cleaning service. Those are the side hustles where you're making ba-ba-ba-bang. That's right. And those are the customers that tell their friends, that tell their friends, because everybody needs those kind of services. That's right.

Man, you can be off to the races quick. You're off to the races quick. So don't just necessarily go to the ones that are preset apps in your phone. Get creative. Get out there. Whatever you're good at. If you're good at making cupcakes, now you're a caterer, right? If you're good at watching kids, now you're a nanny. That's how this works. Oh, and by the way, if you want to keep watching the show, head over to the Ramsey Network app. That's where you're going to go to finish today's show with me and John. We got Simone in Tucson, Arizona coming up. 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.