Escape the Gravitational Pull of Stupid
02:04:03 Share

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, Ken Coleman, number one bestselling author, host of the Ken Coleman Show. Ramsey personality is my co-host today. Thank you for joining us, America. The number is 888-825-5225, 888-825-5225. Scott starts this hour in Springfield, Illinois. Hey, Scott, welcome to the Ramsey Show.

Hi, Dave. It's an honor to be talking to you and Ken. I appreciate you guys and what you do, and I'll get right to my question so I don't hold you guys up. My question is, me and my wife and my five kids, we have a 40-acre farm and a log cabin that we just recently sold. It's under contract. We signed the papers January 19th.

What we're looking to do is with the cash we get from that, we plan on building a new place over on an acre and a half that we were gifted. And we're trying to figure out where to put the money and why we build. And the build would start, you know, January 19th closing.

So more or less, we would try to be in there by September 1st is the goal, to have everything done and built. I'm being a general contractor and just trying to figure out where we can put that money to have best access to it. You're going to use the money to build with.

Yes, use the money. We have no debt. We have no debt at all. We are our farm and cabin and everything we have now thanks to you guys. So if I'm understanding you, you're going to use up the majority of the money by September? Yes, correct. Correct. So you're going to draw down on it beginning almost immediately as you put in footings and start to lay block and start to order your lumber package, which is, as you know, is one of your big ticket items. Yes.

So, I mean, in the first 60 days, you're going to come out of pocket with a ton, right? Yes, correct. Correct. Yes. That's how a building budget works. So, yeah, I would just lay out your budget and, you know, a high-yield savings account, a money market, something like that. It doesn't matter because you're not going to have the money in there. Basically, you're going to have the equivalent of half this money in there for nine months, three-quarters of a year.

So if something's paying 5%, you're going to make the equivalent of 2% or 2.5% to down to about 1.5%. So net, net, net, that's the net dollars you're going to earn because you're only going to be in there nine months and only half the money is going to be in there because you're going to be drawing down on it through there. You follow me?

Yes. My point is what you earn on it doesn't matter much. Having solid access to it does, and having it in a separate account that you nickname building fund does. So high-yield savings account, money market with check-writing privileges, that's fine so you can write your checks and pay your bills, right? Okay, yes, because what I'm seeing around here is I'm seeing like 4.5 on high-yield savings. Again, you're not going to make 4.5 because you're not going to be in there a whole year with a whole pile of money.

Okay. I understand if you're taking it out, let's say you took it out over 12 months, the average would be half the pile through the 12 months. You follow me?

Yes, sir. And so the average would be half a four and a half percent net that you're actually making on the pile. So the point of all that is when you add up the actual dollars, it's not going to be a lot. You just want it safe and you want to be as wise as you can. So the important thing here is check writing privileges, access to it to follow the building budget and the cash flow needed. And yes,

So a money market with check writing privileges at your local bank, if you found one four and a half and they've got check writing privileges to be able to pay the bills and be able to transfer money to your lumber company and so on, then you're right on track. That's exactly what I'd do.

Good question, man. Sounds like you're living the dream. Congratulations. Yeah, exciting, isn't it, to hear a young couple, because you can tell he's young, and they're going to cash flow a build. And I think that's pretty amazing. That, to me, is the American dream. I hear all this stuff all the time. Oh, can we get ahead? And the answer is you can't. But you've got to be disciplined. You've got to be debt-free, because he's got lots of options. Jim is in Hawaii. Hey, Jim, welcome to the Ramsey Show. Hi, Dave. Aloha. Aloha. What's up, man?

Well, my wife and I are in a dilemma, and we're trying to figure out if it makes sense for us to sell our home in paradise and move to Florida. I've got details, but I don't want to give them to you until you're ready. So fire away with your questions. Help us figure this out. It's funny. Hawaii's paradise, and we've got to move to Florida. Yeah. Which Yankees from New York think Florida's paradise. Okay, now. Who wants to move most? So why are you moving?

Primarily for, we could sell our house for 2.5 and buy a house there for about 1.5, put a million in the bank. We're debt free. She's retired. I'm not. So we'd save on state income tax, put some money in the bank and earn more money that way. Local politics kind of drive us crazy and the cost of living keeps going up in Hawaii.

Yeah. Well, if that was me, I'd be going to Florida. Yeah. If those were my answers, that'd be enough. Yeah, that sounds like you've got a lot of math reasons to leave. And the sad thing is Hawaii, as wonderful as it is, is the third, is in the number three state that people are leaving. Number one's New York, number two's California, and number three's Hawaii. And the reason they're leaving all three of them are exactly what you've outlined, taxes and politics. Yeah.

So financially, I don't want to go back into debt, and the rest of our money is tied up in other areas. So the only way we can really do it is to sell, and we don't feel emotionally ready to leave. And so we can't find an emotional way to unhook ourselves. You've been there a long time. There's no financial solution either. You've been there a long time. In Hawaii, we've been there 15 years. And you didn't leave. The state left you. Mm-hmm.

You didn't change. That's right. I wonder, Jim, how many more times you have to pay those taxes, how many more times you have to see some type of politics that you just really don't align with before your emotions do get ready. I got a buddy of mine just moved out of California, and he paid cash for a house in Nashville. He's been in California his whole life. He paid cash for a house in Nashville with his income tax savings in one year.

One year of income tax savings from California, just getting out. He makes a lot of money, obviously. But, you know, one year with no California income tax bought him a cash house in Nashville. That's why people are leaving. I mean, it's math.

And it does pierce through the emotions. So I get why you would leave. I also understand it's a beautiful, wonderful place, and it's hard to leave home, and it's home for you. So those are decisions you guys have to make as a couple, the emotional part of it. Mathematically, if I'm you, I'm gone.

I get why my buddy moved out of California. Again, he paid cash with one year's of tax savings. It's bonkers. Art Laffer tracked this years ago. The states that have an income tax, particularly high income tax, have the highest rate of exodus. Yeah. And it's gotten worse and worse and worse every year. And those three states with the COVID policies, when the Fauci pandemic hit,

And the policies around that and the crazy politics and the lawlessness and everything else, people are bailing, man. It's crazy. And it's sad because they're wonderful states. The actual geography is wonderful. 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.

Ken Coleman, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Bethany is with us in Dallas, Texas. Hi, Bethany. How are you? Hey, guys. Thanks for taking my call. I'm doing great. Good. How can we help? Hey.

Hey, so my husband and I both work for my dad. Um, he owns a hardware and feed store and, um, we, you know, he's owned it for 16 years. So I've worked on and off just through middle school and high school. Um, and then now we both run the store full time. Um, we make about 34,000 each a year. And then Ivan, my husband makes 19 with, um, the VA income. And so collectively we make 87,000. Um,

So instead of a raise the last few years, he has given us 1% of the store's, I guess, value. If the store would ever sell, we would get X percentage of the sale price. And so right now we have 3%.

And we, sorry, backstory, we're debt-free. We are in the middle of building our home. And so our home loan total is $292,000. We were able to buy the land in cash. And so we own, sorry, about an acre and a half. And everything else is paid for. We have our six-month savings saved up. And so...

Kind of, I guess our big question is, we've been listening to the Ramsey show and we hear all these crazy numbers of combined income. And I know you're not supposed to compare, but I do. And so we live comfortably. We have three kids. We're able to pay all of our bills with the homeland. We're going to be able to pay that off soon. But whenever you look at our income, it's significantly lower than a lot of people. And so we're,

but we have the percentage in the store. So the big question is, do we stick with the store to where when dad retires in about 10 years, we already have 15% in it, or do we look for something that has a higher income, um,

But then we wouldn't own the store. So I don't know. We're kind of, we're torn. And there's some days that we're like, yeah, it's worth it in the long run. And then some days it's like, but man, it'd be cool to pay off the house and

three to four years instead of 10 years. I don't know. So my question is, what's the long run look like with real numbers? And is it really worth it? I'm not questioning is I don't think it is. I'm asking you what's the store worth? Why is it worth it? The store? Why is it worth it personally or financially? What's the store worth? What's the value of the store? If he sold it today, it would be between 2.5 and 3 million. Okay.

So 1% is $25,000. Right. And so this year we would have three. How did you come up with that value? That's what he's gone by. And so he just did a revaluation of everything too. And the bank said, Hey, you're, we are worth between 2.5 and three. Does that include real estate? That includes real estate and that's just the hardware store. So we also owned like a bed and breakfast around the corner and et cetera. Well, the question is, are you going to get all of that? Are you the only kid?

The only kid that wants it. So my brother has no interest in any of it. And so he's told me, you got to buy your brother out of his share. No. Okay. So, well, $25,000 a year on top of 34 or on top of that, that, that helps your income. That basically that's what 1% is worth, right? Correct. Yeah. So then you just ask yourself, is that, is that home? Could he hire a manager?

a couple of managers for 34,000 a piece plus 25 bonus. Probably not. Yeah. I don't think so. Yeah. Cause it's just me and my husband that, that managed the store. And then there's a couple of high school kids that come and help. Yeah. I mean, what does the store, what does the store make? What's the profit on it? Couldn't tell you off the top of my head. I don't have the numbers in front of me. Okay. Well, hold on now. I'm not gonna waste your time with me. That's okay. Um,

Well, I'm not questioning your contentment or whether that's fair or not. It's just a matter of is this a fair deal to you? And that's really what you're asking. And the fair deal to you is the answer to that is the math for me. I don't think he's giving you enough percentage per year to make me excited if I'm you. He needs to up this to 5% a year to where after 10 years you own 50%.

Okay, that makes sense. I'd be excited about that. Oh, and by the way, as I own more percentage, that percentage of the profit comes to me each year because I'm one of the owners. I don't own 25% and you keep 100% of the profit. Yeah, that makes sense. So, yeah, I think you just need to talk to your dad about it because his intent is not to run you off.

Right. And his intent is not to be cheap. He just hasn't thought it through. And you're going, Dad, when I think this through, the numbers don't make sense to us. 5% a year would make sense to us. And so you're saying at the end of the year, say we own 3%. He should give you 3% of the profits and 5% of ownership. Yeah. It's like a dividend payment. Gotcha. I have a question. If you own 10%, you'd get 10% of the profits. And, you know, now we're talking that's fairly generous.

You get 10% of the profits and 5% more ownership each year. But each year he bonuses you 5% ownership because then you don't have to buy out. I mean, I don't want you 85% having to buy him out after you've done this enslaved all these years. That doesn't feel right. So I have a quick question on this. Do you guys want to be in the feed business, the hardware business, or do you just want to own your own business?

It's probably a combo of the two. I love this sort. I grew up here, and I love the people, and I love serving the community. The community is a big part of it for me. That's a good question. From the beginning, it's never been. Because none of this matters if you hate every day, but you don't hate every day. Exactly. No. That's what I wanted to know first. I think Dave is absolutely right. I think you guys got to have a money conversation because I'm going to throw this out. I'm curious to know what Dave's going to say about this.

It's not a guarantee that dad's going to walk away in 10 years either. It's hard for founders to walk away. So that to me also, that's why I asked that first question. Is it really worth it?

And what I mean by that question is Dave addressed it. Is it worth it year in, year out? But I'm also asking, is it worth it 15 years from now? What could turn into 25 years? I just think that's what you need to give you in writing that he's done in 10 years. He gives you 5% a year and he pays you your percentage of ownership and profits every year. That's a fair deal. Mm-hmm.

That makes sense. He would have to do that if it was a third party coming in to interest them in taking it, managing it for him. To get a world-class manager that knows the community and cares as deeply as you do, he would have to pay that kind of money to get them. That makes sense. And this doesn't hurt him. He's in good shape. He's fine. Yeah. We need to work towards that. By the way, too, you need to add up all this stuff, and if it's worth more than $20 million...

I don't think it is, but if it is, you guys need a detailed estate plan because the freaking federal government is going to come take some of it when he dies if you don't have a good estate plan. But a written game plan that you take over the store, buy out the remaining ownership after 10 years, and in the meantime, he gives you 5% a year, and in the meantime, your percentage of ownership gets paid out in profits every year on top of that, and you get paid your salary. That's a fair deal.

That is not an unfair deal at all. And it's a good way for him to not have to pay out cash right now. And it accomplishes his long-term goal, which is to hand off the store. So, yeah, it's...

But if his only income is coming from this store, this is going to be scary for him. I think it is. I think it's going to be an interesting conversation. Yeah. Very cool. So Ken makes a good point. Those of us that are founders, and I'm one of them, that found a business. As we've studied family business succession planning, the hardest move is from generation one to generation two.

The founder handing off is very tough because they're all wrapped up in it. Those of us that are founders are hardheads. We're stubborn. We gutted it out. And we don't like to let go of stuff. We like to control stuff. And so it's very hard for us to hand off to the next generation. The most emotional handoff is Gen 1 to Gen 2. And the founder, it's incumbent upon them to be a grown-up and to count on the next generation taking over. This is The Ramsey Show.

Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you.

for the life insurance and then paying you a crappy rate of return on your overpayment. Stop wasting your money and really focus on getting out of debt and growing your savings. For over 25 years, I've trusted and used Zander Insurance to find the best rates on term life insurance

from the top-rated companies. They keep the whole thing simple. You can apply online or over the phone, and they even have low-cost plans that don't require an exam. Go to Zander.com or call 800-356-4282. Even if you don't have a cash value policy, if you're one of the 70% of people who have no life insurance or not enough, it's even more important to get this done. 800-356-4282 or Zander.com.

Ken Coleman, Ramsey Personality, is my co-host today. Thank you for joining us, America. Danelle is with us in Salt Lake City. Hi, Danelle. How are you? I'm good. Thank you. How are you? Better than I deserve. What's up? I have a little dilemma that we're trying to figure out what we need to do. I have a 2012 Hyundai Elantra.

And it's got over 200,000 miles on it. Around the end of October, I was backing up out of a parking spot, and a guy behind me backed into my car. And it didn't ruin my car, so I couldn't drive it, but his insurance totaled my car. Great. So now, yeah. I mean, you're driving a hoopty, and you're getting a check.

Yeah, I can get a check for it for sure. I can get $37.45 and keep it, and I'll have to get a salvage tile. No, you don't want it. Or they'll give me $45.38. No, you take the full pay, give them the car, go get your car. Okay. If the car was in good shape and it was 200,000 mile 2012 Elantra, what's it actually worth? Have you looked it up? Yeah, it's probably under $5,000. Well, that's what they're giving you is under $5,000.

Yeah, yeah. I want you to make sure that what they're giving you is the actual value of the car. Well, the 45 is what they would give me, and that's what I've looked at. No, honey, they're going to give you the value of the car. That's the law. Okay. They may not have understood that yet. You may have to help them with that. Yeah. But they're supposed to give you the value of the car. The guy tore your car up. So it didn't take much to total this car, but it's okay. Cool. I'm glad. So I want you guys, you said we. Are you married? Yes.

Okay, you guys jump on the computer before you accept the offer and find out from Kelly Blue Book what the retail value of that car is and enter it with 200,000 miles, no damage, and the attributes of that car, the accessories it has and so forth, and then look on stuff like trader.com and find some that are for sale. Okay.

that look similar in mileage, and if you find out that car's worth $5,200, you call this insurance company up and say, you need to pay me $5,200, and here's the appraisal from Kelly Blue Book, and here's three cars on Trader.com that look the same, and all these things say $5,200, not $4,500, and the guy will go, okay. All right. Who's the insurance company? Bear River Mutual. What? What?

Say it again. They're the ones that... Say it again. Bear River. That's the actual insurance company, not they wrote the policy. Do what? Bear River Mutual. Okay, I just don't know that one. Okay. All right. Well, because sometimes I know their reputation. Like if it's State Farm, you can pretty much be assured they're trying to screw you. Okay? Yeah. It's like their modus operandi. Okay? Jake? I've been hit by State Farm people twice, and it's been a problem both times. Okay? They're just a pain in the butt.

And see, it cost them a lot because I just said that. But anyway, just verify that the actual cost value of the car. I'm not trying to rip them off. I want them to pay you what you're due. That's all. Yeah. It's an honest transaction. Even with the ding in it? I'm sorry? I mean, with the ding in the car? No, darling. There wasn't a ding in the car before he hit it. Oh, okay. Before he hit it, what was the car worth?

Yeah, okay. Because that's what they owe you. That's the market value of the car. Because you've got to take the cash and go buy that exact car on Trader.com from somebody else. That's what you're going to have to pay for it. Yeah. That's what they should give you. They should replace your car. No, you don't keep your car.

Okay. My other question for you then is... This car was almost dead before this guy put a bullet in it. Let it die. Yeah, it's true. It's true. So I have listened to you for years, and I just get sick to my stomach now thinking about even taking a loan out on a vehicle. Well, don't. Buy a $5,000 car. We have money put aside. Pardon? Buy a $5,000 car. Okay. You'll have $5,000. Okay.

You were driving a $5,000 car before this happened. True. So it was doing, it was perfectly good with your life or good enough for now. How much money do you have set aside? And is that earmarked for something else or was it for a car replacement? It's to go towards a car replacement. How much you got? We have about $7,000. $7,000? So then you have that. That's your car fund.

Yeah. Okay, well then you can buy a $12,000 car. Yeah. Okay. Yeah. All right. My husband wants me to have a car that he knows we can depend on, and he's like... Man, man, man, man, man. Where was this husband before you got hit in the parking lot? He was sitting next to me. I know. I know, but you see what I'm saying. He wasn't whining about you having something that would dependable when you were driving this $5,000 hoopty. You were saving up to get out of the hoopty. Now you sold the hoopty. You just sold it to an insurance company.

Yep, you're right. A lot of $12,000 cars that you can rely on. Oh, excellent vehicles for $12,000. Excellent. A car that'll do anything. It'll do double backflips. You can get great cars for $12,000. Yes. Okay. The best value in the market is $10,000 to $15,000. It's the best buy in the car market. You get the most bang for your buck.

And it's a great, you can get a great vehicle for that. That'll last you for a long time. Yes, yes, yes, yes, yes. There's no reason for you to go in debt, hon. It's just, it was an event. Thank God nobody was hurt. It was a little parking lot ding. And it's just sad that your car, the parking lot ding, I never heard anybody get totaled in the Kroger parking lot, but there you go. So, bump, you're totaled. I was going to say, that was quite an incident. He must have been on his way to the game. Yeah.

With the wings and the chips and salsa. He's in a hurry. Something going on. Amber's in Spokane. Amber, welcome to the Ramsey Show. Thank you. I just have a quick question, actually two-part question. I have an 18-year-old son. He's still in high school. He will be 19 next year graduating, and he is planning on opening his own business. Doing what? With his...

with his own money. He's very smart with money. He doesn't have any debt. He won't get a credit card. He only uses what he has. But I was trying to explain to him the other day that he can do it with a zero credit score. And he and I, I am also confused a little bit too, but I know it's possible. So he doesn't want to take out any loans. Then he doesn't need a credit score.

So why do you need a credit score? I think he's more worried about if something comes up where he has to borrow money, borrow, borrow to, yeah, if he has to get a bigger machine or, well, that already is going to come up a hundred percent of the people that buy machines buy too many of them. Well, he has a plan to buy used and cash. And if something comes up, he'll buy used and cash. He does not need a credit score.

Do not use debt as your backstop in case of emergencies in business because you will live in debt the rest of your life. Because 100% of, there's three rules in business. It takes twice as long as you think, it costs twice as much as you think, and you're not the exception. Those are the three rules of business. The nice thing is that he understands all three of those rules. Then he doesn't need a credit score. Okay. The other question is I have is how, I've been trying to get him to listen to

your show or, or read your book or, and he's 18. I'll give him that because he's just, he's still in that mentality stage where he's 18. And is there something, I don't want to push too hard so that he doesn't do it all together, but is there, I know you have, have books and programs and stuff like that, but I've already bought those and he,

He wasn't interested in it. Is it something that may come along later on when he's going through? I guess. I mean, the only thing I can tell you is the only good I've ever been able to do with my kids once they turned 18 and beyond was I tried to try my best to not use my dad voice because once I do, they quit listening. I have to use my persuasive uncle voice like I'm their uncle that loves them and has no power.

Because I am that person that has no power once they're 18. So you've been using your mom voice. You need to listen to Dave. That won't work. He turned that off immediately. Use your friend voice. And maybe, maybe he'll pick it up. Probably not. But maybe he will. This is The Ramsey Show.

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

Here's what I've learned. When it comes to taking care of me, I have to put on my oxygen mask first. And that means that I have to do the things that keep me well and whole. And I know that you have to do those same things too. So don't skip the things that matter to you, including regular exercise, hanging out with your friends and regular therapy appointments. And when it comes to therapy, contact my friends at BetterHelp.com.

BetterHelp is 100% online therapy staffed with licensed therapists. It's convenient, it's flexible, and it's suited to fit your schedule. And therapy can help you learn positive coping skills, how to set and practice boundaries, how to become the best version of yourself, and most importantly, how to find peace in all of this chaos. In this upcoming season, make sure you put on your oxygen mask first. Never skip therapy day.

Call my friends at BetterHelp. Visit BetterHelp.com slash Delaunay today for 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Delaunay. Ken Coleman, Ramsey Personality, is my co-host today. Thank you for joining us, America. So, interest rates on home mortgages are dropping. It's having a predictable effect. Just to give you a little history of

The 30-year interest rates on the 11th of December were 7.1. Now they're 6.6. The high was 8%, so it's down almost 1.5% from the high. The 15-year on the 11th of December was 6.5%.

Uh, it's sitting right now at, uh, 6.0 is down a half a percent. The high was 7.35. So it's down 1.35 from the high. So interest rates on home mortgages dropping is about a 10% drop. And, uh, um, which equals about, you know, a little less than 1% drop, but not from the high from, uh,

just the other day, which is $275 a month on a $400,000 house, just to give you an idea. 1% is. That's a change. So what we've seen since the day after Christmas is a huge increase in consumer demand for mortgages and agents. And we've also seen a similar increase in the number of pros, real estate pros, trying to become one of our Ramsey-trusted pros during that time.

So all of that means the real estate market's coming back to life after a really cold, dark winter. Yeah, it was pretty much sitting dormant. And this little drop, it's a 1% basically across the board since in a month. That's a lot. Yeah.

And really, 1.5% is causing people that were sitting on the sidelines to come back into the market, even some real estate agents that were kind of waiting. I'll just wait until spring before I go selling houses. I don't know what the flippy people are doing. But anyway, the real Ramsey trusted pros are people that are

People that sell, you know, 100 to 300 houses a year, they're high-octane, high-protein real estate agents. They're not your Uncle Charlie who got his license three weeks ago. And it gets his feelings hurt if you don't list your $500,000 freaking house with a newbie, which would be the definition of dumb.

Okay. So we don't, we don't hire uncle Charlie as one of our Ramsey trusted pros. We get the top people out there because real estate business is a business where people come in and out like a revolving door, depending on how devoted they are to that as a career. But if you're devoted to it as a career and you're selling large volume, you didn't sit on the sidelines in the last three months while a lot of people did. That's exactly right. I mean, but what's really interesting about this, and you said this, we've talked about this on the show. Yeah.

You know, people were shocked by the increase in rates. And then the minute you start to see a little drop, you had people that were all pent up and now they're moving. And so it's going to be very interesting to see. And it's an election year. Hello. It is. And you explained this to me years ago. So I want to tee you up to talk about it because the Fed right now is kind of hedging its bets. You see a lot of different news on it, but there's no guarantee that the Fed is going to actually drop rates.

They said they're going to be in a holding pattern, but that doesn't mean they're going to drop. So we may stay where we are. But regardless, that's not what is going to drive the actual mortgage rate. It's people. It's the bond market and the whole lot. Mortgages are sold as bonds. Exactly. Once they're packaged together. And so the bond, the interest rate, prevailing interest rate on the bond market is the mortgage rate. That's right. Period. That drives the mortgage rate. The Fed has absolutely no direct connection to mortgage rates. That's right.

The Fed rate is the rate that banks borrow money from each other.

It's the wholesale money rate in the industry. That's all it is. And so it is not a direct connection. But it does, you know, it does, you know, telescope out, right, you know, telegraph out where we're going. And it's not unusual with the Fed raises rates. You're going to see that bond market raise rates. And when the bond market raises rates, your mortgage rates go up. So that's what's going on. But, you know, I don't.

You've got to think anything the Biden administration can do to put pressure on the Fed to not do that, they're going to do because a president that is in a very weak, precarious political position add a bad economy to it, and you've got a 100% chance of non-reelection. That's right. There's a lot of speculation. So they're going to do everything they can to get rates down. And that's not politics. That's just history.

of politics. So yeah, good luck with that. Yeah. Good luck being a president and trying to get reelected in either party when the economy is bad in your watch.

Good luck with that. There's almost zero time that has happened. Like, I think it is zero. Do you have an opinion on if it will be a long time before we get back to the rates that we've had over the last five, ten years? No. Economists and weather forecasters are the only people that can be wrong all the time and keep their jobs. I love it. You're like, I'm not touching that one. No, I have no idea. Yeah, that's exactly right. I do know this. I do know this. A hundred percent of the time they go up and down. Yeah.

And they've been up a while, so they're kind of due to come down. You know, it's real. I mean, that's, you know, it's always going to go up. No, it's not. It's going to come back down. No, it's always going to go down. No, it's not. It's going to go back up. I mean, it's the same as the stock market. You know, it's going to move. About all we know is change is coming. That's 100% prediction on change.

And I honestly think that anything that any political pressure that can be brought, any administrative pressure that can be brought to bring rates down is going to occur because, I mean, whoever's running the Biden administration is not. They got to have a clue that even if someone else is running in the Democratic Party, they're not going to get in.

If he, if they don't get this straightened out because the economic situation is dire with the inflation and with the high interest rates, you got true stagflation going on. Open phones at 888-825-5225. Milagros is with us in Charlotte. Hey, Milagros, how are you? Good afternoon. Good. How are you? Great. How can we help?

Well, I am a new teacher. I worked my first year in 2023, and I recently discovered your show about two months ago. So I've changed my way, but I wanted to give you a little bit of background before I tell you what my end goal is by now. So I'm a first-generation student, graduate.

I graduated in 2022, so I had to take a lot of loans out and private loans as well to pay for school because I was decided to be the first one to graduate in my family. How much debt do you have, honey? So I have $8,000 of private loan that was originally $6,000 and it's still growing, but I'm paying monthly now with very high interest. How much debt do you have, honey?

28 federal student loans, $19,000 a car, $5,000 credit card, and that's it. Okay. Are you ready to stop borrowing money? Because you've been borrowing on everything in sight. Yeah. I got a second job, and now I'm paying with that second job. What are you getting paid as a first-year teacher in North Carolina? $38,000. Yeah. And you got a $19,000 car you can't afford.

You've got student loans coming out your ears. You bought a car way too expensive. I know. That was the first mistake that I made after graduating because I thought I was a big girl, big girl job and I could afford a car, but now I'm paying it every month. Now you've got big girl problems. Yeah. Okay, let's get rid of it. Let's sell the car and get you a cheap one.

Yeah, I've tried to, but I'm scared like no one's going to buy it. Well, how would we know? We've not tried. Yeah. Oh. Okay.

The path that, listen, the definition of insanity is continuing to do the same thing over and over again, expect a different result. You've been borrowing on school and justified that. You borrowed on a car and justified that. You borrowed on a steak dinner and put it on a credit card and justified that. Some point you've got to quit borrowing and justifying.

At some point, you got to say, this is stupid, and I'm going to go back to ground zero and start building my life. I make $34,000 a year. I'm a first-round teacher, and I'm going to pick up tutoring jobs on the side and double my income and get these stupid student loans and credit cards out of my life. Cut up the credit cards tonight and sell the car this week. Time to take radical action, kiddo. If you want to win, that's how you do it. And I'm trying to shock you and break you loose here because how you grew up has nothing to do with student loans.

It's because you didn't work while you were in school. That's why you have student loans. Because you could have worked your way through. A bunch of people do every day right now. So it's okay. I'm not mad at you. But don't walk around justifying this. Get it cleaned up now. Because it's between you and becoming wealthy. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships. Okay.

Ken Coleman, number one best-selling author of the book Paycheck to Purpose, host of the Ken Coleman Show, Ramsey Personality, is my co-host today. Thank you for joining us, America. The phone number is 888-825-5225. Clayton is in Little Rock, Arkansas. Hey, Clayton, welcome to the Ramsey Show. Hey, sir. How are you guys? Better than we deserve, brother. What's up?

Awesome, man. Well, first of all, I just want to say it really is an honor to speak to you guys. I'm a huge fan of the show. I've watched countless YouTube clips, etc., and I think you guys are out there changing lives. So I want to start off with that. Well, thank you, sir. How can we help you today? Sure, sure.

Absolutely. Well, I'll start from a broad overview and I'll break it down if that's okay with you. My broad overview question, Dave, is really just how not to get discouraged in the wealth building process. I'll give you some background information. I'm 27 years old. My wife is 30.

We have a combined net worth of around probably $200,000 or so. Wow. It's right there on my number. Thank you. And I make about $58,000, $60,000 on my primary job, and I do a side hustle. But total, I make around $80,000 to $90,000 kind of depending on the year.

And my wife makes around 72. The only thing that we owe on is our home. We both have MBA degrees. We have no consumer debt, no car loans, anything like that. My home is currently worth probably around $300,000, and I owe about $195,000. We have two kids.

And overall, life is good. We're still in the process of trying to button everything up. We're investing 10% right now. I know I need to get that number to 15. My home's on a 15-year note. We're trying to get our kids college, all that situated. So there's nothing really on fire, per se. But in general...

I really do believe what you guys teach. And I believe, you know, we, we, we give 10% of our income to the church. I mean, I'm a really big believer in living within your means. I'm not saying we're perfect by any means. You've done a great job, Clayton. I mean, your numbers are amazing for your age. Way to go. You make $160,000 a year. You have no debt except your house. Everything's on track. You're killing it. Right, right. Well, man, you know, I, I, I, I, I really do believe it and I, I appreciate it. But at the same time, um,

Like, I think long-term, right? Yeah, but have you done the math? Huh? Have you done the math? Right, right, yeah. I mean, if you save 15% of $160,000, that's going to be a million dollars in 10 years, dude. Right, right. And that's with no match. Have you got a match? Yes, sir. Yes, sir. Do the math.

Right, right. Well, you know, man, it just... Did you do the math? No. Yes, sir, I did, yes. Okay, then did you see 10 years you're going to be a millionaire at 37 years old? Yes, sir, yes, sir. So why was that discouraging? You know, I don't know, man. I just, like, I look at life, right, and I know comparisons are a piece of joy, and I don't, you know, I try not to go there in my head, but... Comparison to what? If anything you compare to, you should be ahead of.

Right, right, right. Well, you know, it's okay if I give you some background, some more background information. Is that okay? Okay, I'm trying to understand. It's okay. I'm trying to understand why you're discouraged. There's no reason to be. I'm really confused with that. Because, dude, you're in the top 2% of America. You're killing it. I just think, like, long-term, Dave, I think when I just see how everything is so expensive, and even when I pay off my home and I have all my retirement accounts, et cetera,

I'm trying to really set my family up so in 10 years, my daughter will be 13. I'm trying to almost get ahead of the game where I can make sure we can go on big vacations, take care of her college. I realize, okay, I'll be a millionaire, but it feels like everything's so expensive and it's such a long process. I realize that wealth isn't obtained easy. I'm not trying to say that.

It is a long process. Ten years is a lot longer than ten minutes. And most people have the attention span of a gnat. That's why they're not able to build wealth. I've been listening, Clayton, and I've been where you are. I actually hear me ten years ago on this phone call. So I just want to say this. Your issue is not comparison. Your issue is fear.

And you're afraid you're not going to be able to do the things that you would like to do because you're too stuck in the headlines. And what you're not focusing on is, as Dave has pointed out, you're crushing it, number one. You're really ahead of the game. This is all going to compound for you, and you're going to be fine. You're going to take some great vacations. But what you're not focused on is...

is what you can actually do. You're focused on all these outside circumstances, the economy, inflation, whatever else is going on in your head. You do need to quit watching the news. Yeah, you need to start focusing on your income and what you're going to make next year and the year after that and how you're going to be able to make more money and that you can go out

and determine your financial future. You're already great, but you're forgetting all this headline stuff and all this fear and comparison. Here's what you're forgetting. Your ability, your wife's ability to put a financial plan that includes increasing income. You're going to be able to pay for all those things. Yeah, your income is not going to be stagnant for the next 10 years.

Absolutely. I don't know if that helps you, Clayton, but you've got to shake all that stuff off. You're inside your head so deep. And or here's the thing. The secret to happiness is low expectations, and I'm a little bit afraid you thought when you made $160,000 you were going to be rich. That's a very good point. And you're not rich at $160,000 with two kids. It's no cake. You thought it was going to be on Easy Street, like you were going to be flying in a private jet or something. And, you know, it's $160,000. You're not.

So you got a lot more. You got double the household income of the average American. You're in the top one or two percent of the average American your age with where you are with no debt and already having a positive net worth of a couple hundred thousand dollars. You are killing it. And you actually are paying attention, which puts you way above almost everyone who walk around with their head stuck in the fog.

That was kind. I did that. I did that for radio. Did you hear that? Yeah, I mean, you're incredible. You're doing great. You're doing great. Calm down. Enjoy the ride, buddy. Really, I can't tell you enough to do this over and over and over again. Enjoy the ride. I want to say one other quick encouragement because, Dave, I think you're absolutely right. I just want to echo what Dave said.

We have with all young generations and throughout history, but even more so now because we're in the social media era. God help us. I know.

unrealistic expectations lead to unmet expectations. I can't say that enough. I wish I could preach that message to every young person in the world because here's the deal. You nailed it. They think when they get to six figures, that life's going to be an easy streak. I thought you were talking about my golf game and your golf game. Oh, yeah. Unrealistic expectations equal unmet expectations. That's it. No, I just... My golf game is in the last category. Just unmet. Period. It was...

It doesn't matter how. That's what it is. Isn't that true? Because here's the thing. When you make $100,000 a year, you thought it was going to be easy. And when you make a million dollars a year, you thought it was going to be easy. It don't get easy. It just gets better than if you don't pay attention. That's all it does. This is the Ramsey Show. Ken Coleman, Ramsey personality, is my co-host today. Thank you for being with us. Chaz is with us in San Antonio, Texas. Hi, Chaz. How are you?

I'm doing pretty good. My question is about what is the best route I could take to become an airline pilot? And if you'll allow me, here's some quick details about my situation. So I am in my freshman year of engineering college, and my plan is to get a four-year mechanical engineering degree that my parents are willing to pay for.

And with that degree, I'll get a job and then pay for flight school with my own money without going into debt.

And then on top of that, I will have an engineering degree to fall back on in the case that I can't fly in the future for whatever reason. However, I'm starting to rethink this plan because I'm sure you've heard there's a massive pilot shortage right now. And I think it might be a good opportunity for me to skip college and go straight into the airlines.

and I would get lots of benefits going in immediately. I would be in a hot job market, and I would also start my aviation career earlier, which would get me something called seniority, which is very, very important in the airlines. It's basically the pilot who's been there the longest has the most job security, the best pay, and...

Hey, Chaz. I'm just in a really good position. Chaz, a couple things. Number one, you can't just go into being a pilot. You're still going to have to fork out a lot of money for the training, but I've got a better solution for you. And this is not my opinion. This is from a guy who is one of the top pilots for FedEx, flies all around the world, flies their jumbo jets, met him over the holidays, had coffee with him. Here's what he said. Okay.

I asked him, what would you say to somebody who asked this question? Because I get this question a lot. He said, and this is a guy who was a Navy pilot. He said, I would have a young person go into the military and you're going to get paid for the training. And there's no debt. And they're going to train you as a pilot. And you're going to have the hours. You're going to have the hours. You get everything paid for. And they pay you. They pay you. And you come out of the military and now you're qualified and ready to go. So skipping college, if you wanted to fast forward,

then go right into the military. But if my mom and dad are going to pay for a mechanical engineering degree and that was a fallback plan, that's not a bad plan and then go into the military out of school. So I would say those are the two best options. If I were you, based on what I know, that's what I would do.

Okay. One thing I can tell you is it may be wrong information, but I'm pretty sure it's correct. I talked to an airline pilot that lives in my neighborhood and he told me not to go to the military route because they can get you

All the hours that you need, but they can't actually get you the ratings that you need for the airlines, which is something that you're going to have to get yourself, which will still cost money. And my parents are willing to help me pay for the fast track school to the airline partially.

Okay. Well, that's new information. Uh, you are correct. Your, your friend is correct. Your neighbor's correct, but still you're getting advanced. You're advancing yourself in the military without having to come out of pocket. But if mom and dad are willing to pay cash and not go into debt for the, for the training, then that's an option. So Chaz, um, I, if you fast track with them, you go to fast track school, what's that cost? How long does it take?

Since I already have my private pilot's license, it would cost $80,000, and my parents would pay for that partially. I'm assuming about half, maybe a little bit less than that. And how long does it take?

It would take nine months, and I could get into the airlines very soon. And one thing I would like to mention is the reason I would want to do this is to get into the market immediately because the pilot shortage is right now. Sure, but who's paying for the other $40,000? If mom and dad are paying about half. Oh, me? I would be going into that $40,000 a day.

Okay, but that's not what you said earlier. So now the story's changing. It was mom and dad could pay for the flight in Fast Track. Well, they can't. They can only pay half. I said partially, partially, not entirely. I would be going into debt, yes, sir. Well, we would not recommend that you go into debt for this when you don't have to. And here's the thing. When you come out with a four-year degree in mechanical engineering –

We're talking about $90,000 to $100,000 a year. Exactly. When you come out of $80,000 worth of flight school, you're flying American Eagle for $35,000 a year. Yeah. You know, I don't give a crap about the pilot shortage, honey. They ain't putting you in a 727 when you're 19 freaking years old and you just come out of school and wet behind the ears. They don't do that. Okay? The guys in the big jets are old.

and they don't put the boys in there they put the little boys in the american eagle little canadian jets i fly with them i see what they're doing they're i got socks older than these guys that are flying these things and they don't pay them anything so you need to check your facts on actual entry on what you do get paid coming in because you're going to fly a regional at best prop or jet and um you

And you don't make any money at the start, even if there is a pilot shortage. The pilot shortage is a shortage on the top end stuff, not –

people getting paid no money doing... And if you go the military route, you can save up the money for your instrumentation and all that. Not to mention, I wish I knew this. I'll know this next time. But I also wonder if the GI Bill does not maybe go towards that certification and that education as well. I would tend to believe it does, but I'm not 100% sure. I think it probably would. I think it would. I'm just not 100% sure. So therefore, no debt. Chaz, let me just tell you, working with doing what I'm doing for 30 years, pilots are...

It's a different thing that activates in people when they decide they want to be a pilot. Flying an aircraft, you've got your private, you know this, is addictive. And you guys, you lose your minds in order to get to fly an airplane. You're willing to jump through and do anything just to get to fly an airplane because it's just so stinking much fun. And, you know, people do ridiculous things. So don't trade a $100,000 job for a $35,000 job and $40,000 worth of debt.

Uh, don't, don't make that trade. Yes. I please don't just because of this. So, uh, people get, there's something about the pilot thing that people, they, they, it's all, the only other one is like being coming a chiropractor. They spend $200,000 to do that. You spend the same $200,000. You'd have been an MD, right? You know? And instead you're making 45, $50,000 a year as a chiropractor. And it makes no sense at all, but they get their head gets all foggy with the

The process of doing it or whatever. I don't know. I don't know what it is. It's different. Well, they justify. It's different than other careers. Yeah. Well, it's a good career. It's a good. I'm going to make good money. So we justify it. And again, there's not good money on the start. There's not. It's not good money. There's not. There's not at all. Because there's a blind of these guys that are addicted to flying. Yeah. So, yeah, there is a pilot shortage, but it's a certain kind of pilot and it's not entry level.

I wish you could have heard this guy, Dave. He was a Navy pilot, straight out of Annapolis, Navy pilot for 20 years, flew combat missions, and now he's flying the biggest jet FedEx has. And he was like, tell people, tell young people, they have a great career if they go the military route and they're not going to go into debt and they're going to be able to pay for it. He was very emphatic about it.

Well, yeah, you fly with an air, you fly with a pilot and you know, their military, you can tell when they land. That's right. They don't, they're not worried about soft. Right. That is true. They put them down. Uh, you did. Yeah. That guy was, he was Navy. Yeah. Yeah. That guy was Air Force. Yeah. Uh,

Oh, this guy didn't fly. He didn't fly luxury charters. I don't think. Right. Right. Well, they land on an aircraft carrier. I guess. Unbelievable. Talking about that in the middle of the ocean. Chaz, go live your dream, buddy, but don't turn it into a nightmare. That's what we're saying. Great. So if you were my son, I would tell you to finish your mechanical engineering degree and then work on your pilot stuff. And I would consider the military route. If you're my son, that's what I'd tell you to do.

So that's the summation of the call. We appreciate you calling in. Open phones at 888-825-5225.

It started a long time ago when people started saying, live your dream, live your dream, live your dream, Ken. And people will then justify that and turn their dreams into a nightmare if they're not real careful. So true. And it happens all the time. It's the trap. And the trap is this. I want it now. And I've never seen a dream that was worthy that you got now or that you got fast. Change your mindset on that, and then you'll be able to avoid the temptation. Philosophy 101, Ken Coleman. This is The Ramsey Show. Ken Coleman, Ramsey Personality, is my co-host today.

All right, I got a question for you folks out there. How long does it take you to pay off a credit card that has a $5,000 balance with an APR of 16%, which in the credit card world is a good deal, if you pay $100 a month minimum payment, which is the average requirement on that? $5,000, 16%, $100 minimum payment. Answer, six years and 11 months, and you pay $3,200 in interest on the $5,000 while you do it.

Can anyone spell stupid in math? I just did. That's stupid in math spell. I just spelled stupid for you in math. It's pretty good. Seriously. And yet we all walk around. Well, I get airline miles. Oh, my God, you're so stupid. Discover gives me a dollar back for every hundred dollars I spend. Oh, my God, you're stupid. I've never met a millionaire that said, Dave, you know, I made all my money with my airline miles.

Doesn't come up man. It just doesn't come up The problem is you get stuck in a cycle of this stuff and it's so freaking hopeless like the student loans. They're hopeless It's like a pile of Mount Everest of debt, and I don't know how I'm gonna climb and I'm stuck in a cycle of debt I'm stuck in a cycle of stupid financial stuff that's out there And did you know that stupid has a gravitational pull and you can't break loose from it. It'll hold you into the orbit and

You just keep orbiting around and around and around stupid. You know how you break an orbit? Massive energy. You have to expend massive energy to break an orbit. So if you're stuck in the cycle, you can kick the year off. We're hosting a free live stream one week from today on Thursday, January the 11th at 7 Central. It's officially our largest live stream ever. Over 250,000 people have already signed up to watch it. It's completely free.

It's called Break the Cycle. Break the Cycle. Break the Orbit. Off of stupid. You are not stuck. Your family curse is not your problem. The neighborhood you grew up in is not your problem. You need some more information and some more inspiration, and we can show you how to break the cycle. We've done it for millions of people. So me, Rachel Cruz, George Camel, Jade Warshaw, Dr. John Deloney, we're going to be doing Break the Cycle today.

Talking about navigating the money anxiety, bad money habits that keep you stuck, practical money tips that actually work, how to break the cycle because you're stuck. And we're going to give away $1,000 10 times, $10,000 to people that are viewing. There is no purchase necessary, but you must be a viewer not having just signed up to watch. And so we want you to watch. We want to help you. We want to change your life. We want to give you the information and the inspiration. It's called Hope.

Break the cycle. So what do we do? We go to RamseySolutions.com slash break the cycle, and you sign up for the free live stream. It's going to be 7 o'clock Central Time, Thursday, January the 11th.

And I'm guessing at this stage of the game, we're probably going to have close to 400,000 people, maybe even 500 viewing. So thank you. Thank you for your response already. And thank you for those of you that are going to respond after I just did this. Because you are not stuck. But I will promise you, I've been there. Stupid has a gravitational pull. And if you continue to do the same thing over and over again and expect a different result, that's the definition of insanity. If you don't like the cake, change the recipe.

I don't like chocolate cake. Quit using that recipe and then scratching your head while you're getting chocolate cake. That's how it works. You got to change something if you want something to change. And we're going to show you how, baby. We love you enough to coach you. We love you enough to encourage you. We even love you enough to get up in your face because we want you to win. And we've proven it.

30 years of doing this. So come join us, ramsaysolutions.com slash break the cycle. Matt is in Knoxville. Hey, Matt, how are you? Hey, Dave. Thanks for taking my call. I just had a quick...

baby step question with my own variables thrown in if you don't mind sure um so i have these two credit cards one of the 2200 ones at 6800 um i make 56 grand a year uh usually comes out in my check about 3500 when bills are all said and done i got about 800 to spend or

live life with essentially. Um, and on top of this, I have a beautiful girlfriend in medical school and I'm looking to buy her a ring. And, um, one thing I did last year was I maxed the match with my retirement at 7%, I think. So my retirement got up to like nine grand.

And obviously with this credit card debt, I'm thinking I couldn't have afforded to do that. So I took that down to 3% into my retirement to have the extra money to go to the ring and whatnot in my credit card debt. And so I'm just kind of curious in my situation. I'm also looking to gain income. I got some side hustles in the works to gain income and get a new job too. You're 25? Yeah.

Yeah, I turned 26, so that's the other thing. I'm diabetic, so I'm going to have to pay for my own insurance and not cheat when you're diabetic. Juvenile diabetes or adult? Yeah, juvenile. Okay. All right. Man. Okay. So what do you do for a living?

Fundraising. Okay. All right. So you're doing what most people do, and we discovered a long time ago doesn't work, and that's trying to do six things at once and none of them get done. Right. You're getting no traction nowhere. Everything's half-assed. Follow me? Yes, sir. Yeah. So what I'm going to change is just tell you to get totally focused on one thing first. Do you have any money saved? $500. When are you going to pop the question?

Six months. You're going to wait six months to pop the question? You said don't wait? I said are you going to wait six months to pop the question? Did I understand you right? That's a long time. Yes, sir. That's the longest. That's the longest I'll wait. Okay. All right. Well, we need a game plan here to lay out to save for this, all right? So here's what I would tell you to do. I would stop all saving. Okay. Stop everything, all right? Did you get a tax refund last year?

My taxes were screwed up. I have to redo it this year. Okay, so you don't know because I don't think you're taking home enough. I don't know if the $3,500 was after $9,000 coming out. If it was after $9,000 coming out, then that's about right. But if it's not, then there's something else wrong. But anyway, so I want to take all we can home without creating a tax problem, and I want to stop all 401K temporarily and focus on the first goal is get $1,000 saved.

Okay. The second goal is pay off the $2,200 credit card and cut them both up tonight, by the way. Okay. Plastic surgery. No screwing around with those things anymore. They bit you in the butt, and you need to throw them out the front door. Right. All right. Now, then the $2,200 is gone. Then I want you to save for a ring. How much are you going to spend on the ring?

About two grand. Okay. So if I'm understanding right, I need a 500 bucks to finish my thousand. I need 2,200 plus two. So I need 5,000 bucks to get the credit card paid off the ring and have my first thousand dollars saved, right?

Right. Okay. You're right now have $800 in your sort of budget, but your sort of budget sucks. So you're going to do a real budget where you make every dollar behave. Every dollar is going to scream. I'm going to give you an app called every dollar. It's the world's best budgeting app. And I'm going to put you into financial peace university, our nine week class on how to handle money. And I'm going to pay for it. You're a hero. Now you're going to be the hero. You're going to go do this crap because what you're going to do is hard.

You're not going out to eat. You're not going on vacation. You're going to take the side hustle, and you're going to have five grand done in two months. Two months, man. Yes, sir. Yes, sir. No, one credit card down, ring bought, and $1,000 in the bank. And then once the ring's bought, we go back to the debt snowball and knock that other credit card out, and we're game on, and I'll show you how to do the rest of it in Financial Peace University. It's called the Baby Steps. You're going to win. You're just the guy we work. You're the guy why I'm here.

I love where you are. You're a great guy. You just need somebody to show you how to do it, and I'm the guy. Hold on. Austin's going to pick up. We'll put you in the financial piece and get you in the EveryDollar app. My gift.

Ken Coleman, Ramsey Personality, is my co-host today. The Ramsey Show Question of the Day is brought to you by Neighborly, your hub for home services. From repairs and maintenance to home improvement projects, winter brings some challenges for homeowners. You need to check out Neighborly's helpful winter checklist, which you can download for free. Check it out at Neighborly.com slash Ramsey. It's an incredible company, Neighborly.com slash Ramsey.

Today's question comes from Kelly in Ohio. I'm 23 and about a year out of ministry school with no school debt since I work four jobs and cash flowed everything, so I'm totally debt-free. Way to go, Kelly. I work at a professional screen printing and embroidery shop and volunteer for ministry, making $20 an hour. I work 45 hours a week at the shop.

And after taxes, I'm at about $36,000 a year. This is the most I've ever made, but when I listen to the show, I'm often confused at what y'all say is a good income. To me, this is good income since I'm able to save $1,100 a month towards a down payment on a house. What are your thoughts? Do I need to be worried about getting another job, or is it about how I'm budgeting? All right, a lot of questions here. First thing that comes to mind is why did we go to ministry school?

You know, if we go to ministry school and we've changed our mind, fine with that. But if we went to ministry school to be in the ministry, I'd want to know what the path is to ministry. And then once you get into ministry, it depends on what you're doing, because people don't go into ministry to make money, at least the people that are actually about ministry. So the question about good income, I think it's a tad bit relative. But if you look at the the

income scale in the United States, $36,000 is obviously on the low side. But I love your discipline, that you actually have a budget, and that on that income, because you have no debt and you're living on less than you make, you know, look, you're saving some pretty good money there. So I don't think you need to be worried about getting another job, no. But the answer to that is, what job do I go to next?

Because I doubt that you want to be in the screen printing and embroidery business for the rest of your life. So if I was sitting with you, I'd say, what's our long-term plan or what are our couple options that we are considering for the long term? And what I'm talking about there are destinations.

And once we have an idea on some destinations, we can start to choose direction. Direction is always more important than destination because the destination tends to change, but direction will get us going and making progress. So you're doing a great job on budgeting. And as you increase your income with the way you budget, the more you save, the more you can invest. Now, that's the proper answer to your question. Also hidden in your question was,

You didn't like it that we said $36,000 wasn't a good income. Good income is not a moral statement. Good income is relative to the average household income in America, which is $78,000 right now. And so if you make $36,000 as a single person just out of school, you are considerably less than the average, which would also make up the average, and that's okay. It's not the end of the world. You're not a bad person.

You're not a horrible income earner. You're not lazy. None of those are judgments that are said when we say good income. All we're saying is relative to the average, yours is low. But somebody's got to make up the average. So the question is, do you want it to be you? And so, you know, you start thinking about where you want to be in 10 years. If you're just out of school, let's call you 23. What do you want the 33-year-old version of you to look like?

Detail it out. Ken just told you to determine the direction, the destination, and then let's move towards that rather than landing and being satisfied and say, well, I've got margins, so I call this a good income, even if you all don't. Well, our portion is not that you can't live on it. I think you're doing a great job. You're amazing. You're doing a great job with your budgeting.

But your income is below average. That's another way of saying it. It's exactly right. Rather than saying a good income. So when someone calls us and says they make $160,000, that's double the national average. And so that, by definition, is a good income. It's above average, way above average. And so these days, when you make six figures, you're above average. The old days, when you made six figures, you were called rich.

But nowadays you just can buy Alpo, but you know, it's, there you go. But that, that's the thing. I mean, so, you know, because Alpo, have you seen the prices? No, I'm kidding. But so the thing is Kelly, that you are doing a good job and you're not spiritually or psychologically wrong to be satisfied right now with where you are. However, as a person that tells you, you know, we want to be anything that's not growing is dying.

So let's be something that's growing. Let's be aiming at something and have a destination. Dustin's in Kansas City. Hi, Dustin. Welcome to the Ramsey Show. Hey, Dave. How's it going? Better than I deserve, man. What's up?

Hey, I talked to you and Ken back in 2021. My income was considerably low to where I'm making now, and I'm just trying to get some guidance on what house price is reasonable for my income and then also what my five-year plan should be. Real quick, tell us what you were making when you called us and what you're making now.

So when I called you guys, I was making $46,000, and that was just my main job. Now I'm making $100,000, 60 of that being salary, 40 of it being in bonuses within the last two years. Well done, sir. And then also my side business that I've been running this year was a major, major job, and I made $125,000 just on that alone.

That Ken Coleman guy, when you call him, he's amazing. Yeah, right. You had everything. That's amazing. Way to go, stud. Wow. Proud of you, man. That's excellent. Yeah, that's great income. You have a good income. Yeah, there we said it again. By the way, not our opinion, just the stats. Yeah, and you guys are my only guidance. I'm 24 years old, so not my age. Yeah, that's good advice. So you're making a couple of hundred.

Yeah, this year. You know, it might not happen next year. Dang, dang. Dadgum, man. Nice. How in the world can we help you? So currently, right now, if I sold my inventory that I have, I would have $125,000. I paid cash for a car this year, which was $30,000, and then I paid cash for land that was $65,000. Wow. So I got that all paid off. The only debt I have right now is $119,500 on my house.

The house back when I called, it was a flip house. I didn't intend on living in it, but I got comfortable and I'm still comfortable.

just because my mortgage is $750,000 and that's my only debt. But me and my wife are going to look at a house tonight. It's $335,000. And, you know, going from a $750 mortgage to potentially $1,500, it scares me. So I just want to make sure that's okay before I just jump into anything. It's okay. You got it, dude. Yeah, you're good. Put it on 15-year fixed and then pay it off as fast as you can.

Keep working the plan you've been working. It's amazing when you aim at something how you hit it. And you're a great example. When you start aiming at something, everything starts changing. And you just had a very clear vision of where you wanted to go, and you've gotten there even faster than you dreamed you were going to and very impressive. So, yeah, put it on 15-year fixed. And here's the thing. You marry the house and you date the rate. The rates are up over where they were three years ago. Everyone that's breathing knows that.

but they're down over where they were 10 years ago. So I don't know what the rates are going to do, but let's pretend they came down after you bought this house. You refinance. You date the rate. But you buy the house. You marry the house. So we're not buying a house that's temporary because of this real estate market and these interest rates. We're buying a house that's a good house that we're going to live in a while. Great house. You marry the house and date the rate.

And then you go ahead and get the interest rate. Make sure it's less than a fourth of your take-home pay still on a 15-year fixed, and it will be with what you're describing. You've done a great job. You're doing good. And here's a beautiful thing, too. As long as you'll stay a little nervous, a little nervous, not anxious, but a little nervous, that kind of nerves is called caution. And some people call it wisdom. Way beyond your 24 years.

That you're not just out spending like you're in Congress trying to keep up with some moron on TikTok. So, yeah, that makes you a super impressive 24-year-old. Yeah.

And Dave, I want you to comment on this, but I tried to take myself back to when Stacy and I bought our first house and I think it was $195,000. And I thought, how'd you get the dinosaur sale? But I remember like, but it was based on the ratios. And what we did is we went back to the ratios that you've been teaching 30 years and we were able to afford it. You can't focus on how much the mortgage payment's going up.

Focus on the fact that it's well within the ratio of what you can afford. Exactly. And then your mind adjusts to the increase. Exactly. I think that's what helped us. Well, and the house is going to go up, and your income is going to go up, and you're going to be fine. Yeah. Yeah. You're going to be all right. It's all going to work out. Way to go, man. Good job. What a stud. Man, I love it. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth.

Do work that they love and create actual amazing relationships. Thank you for joining us, America. We're so glad you're here. Ken Coleman, Ramsey Personality, is my co-host today. He's the author of the number one best-selling book, From Paycheck to Purpose, and he's host of the Ken Coleman podcast, which is...

unbelievably popular helping people with their jobs their money their career make more money and enjoy everything a little better so he's helping today you jump in we'll talk to him me all of us 888-825-5225 Catherine starts this hour off in Detroit hey Catherine how are you

Hi, Dave and Ken. Thank you so much for taking my call. Sure. I am seeking advice today on my relationship. Okay. I've been dating my boyfriend for almost a year and things have been going really well, but I have concerns that as, you know, things continue to progress, hopefully down the path towards marriage, that our discrepancy in finances, specifically income, debt,

retirement savings will be a problem and that ultimately I might kind of find myself in a sugar mama type situation which I'd really... You don't want to be that girl. We already have a problem. Yeah, I love it. Good for you. So how old are you? I'm 38 and he's 35. Okay, cool. And what do you make?

I make $200, and he makes $45. Okay. All right. And what does he do? He works in construction. And what do you do? I work in the automotive industry. Okay. There is nothing wrong with anything you've told me so far that makes us incompatible, as long as you're both in agreement. So what we've found is there's four things that good research is revealing that if you agreed on four things prior to marriage...

You have a very high statistical probability of staying married. Number one is money, how we handle it, how we view it. Okay? Number two, because money fights and money problems, number one, cause a divorce.

So you've got to deal with it. So you're smart to call a money show and talk about this. Number two, kids, are we going to have them? How many? How are we going to treat them? Are the inmates going to run the asylum? That kind of stuff, right? Number three, the crazy people in our family called in-laws because everybody's got crazy in their family and you don't think you do? It's you.

So everybody's got it. So how are we going to handle that? How are we going to handle the extended crazy? And are we going to stand beside each other in that? And number three is religion, agreement on religion. And so if you're in agreement on those four things, you have a very high probability. Let's go back to the money one a minute. You obviously are a high income earner and he's obviously a construction guy out there doing it. And yet you're falling in love and that's cool. All right. That's not my concern.

My concern would be his view towards his debt. How much debt has he got and how does he view it? So he has, um, around about 50,000. Um, and, um, uh,

And when we started dating, I gave him the total money makeover and he read it. And I have seen him change his spending behavior. His, you know, started budgeting. I'm really trying to save and attack debt. So he bought into the idea that debt is bad and he wants to get rid of it.

Yes. And you think that is bad and you want to get rid of it. So you're aligned on that. Yeah, I'm completely debt-free, baby step six. I'm not talking about where you are. I'm talking about what you believe. You both believe debt is bad and you want to get rid of it. Aligned, yes. Okay. Then that's the important thing. So what are you worried about? If he says, oh, baby, it ain't no problem. I'm just going to work till Friday, and I'm going to get me a new truck whenever I want to. Don't marry him.

But he's not saying that. What I'm worried about

No, he's not. What I'm worried is just, or maybe need to kind of come to grips with is, you know, I've worked really hard to be in the financial situation I'm in because I've followed you all for most of my adult life. And now we're talking about, you know, what this would entail would be ultimately taking on someone else's debt because I don't see anybody

any way he's getting out of it, you know, in the next few years. No, you're going to marry him and he's going to have debt and you're going to pay it off. Well, wait a second. Wait a second. What's wrong with that? I have a quick question. What makes you think that it's going to take him two years or so to get, I mean, $50,000 if he gets serious and he is in alignment, he can get rid of this debt.

You don't have to necessarily marry all of it. I think if he's aligned, what I'd want to know is how gazelle intense is he willing to get. And stay that way. And stay that way so that you don't marry much, if any. First of all, he hadn't even put a ring on it. So we don't know. If he had $200,000 worth of debt and he's plowing through it and you marry into it, I'm okay. Yeah. As long as y'all are aligned on getting rid of it.

That's the thing. What will kill you is not being aligned, unless you just get all twisted up and bothered inside your head and go like, I did him a favor and he owes me the rest of his life. Now that's on you.

But if you're willing to just throw in and say, all right, it's all in, everything's in the middle, and we're all going to get rid of it, we're going to use my assets, my debt, your debt, it's all ours now, we're going to clean it up, and we're going to live for the rest of our lives the way you've been living so far, then you've got a good marriage match. I think that sounds good. I think that's a good point. Yeah. But if you're having to drag his butt along... Mm-hmm.

because he's going to misbehave and he's going to, well, you know, everybody has a car payment. Crap. Who needs that garbage? You know, you don't want to be that. That is then you're signing up for a problem. Yeah. My concern. And again, I'm not saying this is this guy, but there's a difference between somebody believing something and doing something. Yeah. I'd like to see him. I want to see him. He's starting to take action on his new beliefs. And as long as he does that and he's really, you know, he's taking two extra jobs and he's attacking this debt. Yeah. And this may be a great thing.

maybe a great find he's a great guy he just needed some you know he just needed somebody to show him the path right i think it's a great test to not that she says it that way and she doesn't position that way but if you if you're willing to say yes to this guy i think you being willing to say yes if he proposes is based on you laying down the tough conversation now while we're dating see what we don't want to do is have the tough difficult money conversations after we've gotten engaged we're

or after we've gotten married. I think at this point, what you've laid out seems like he's a good guy and he seems like there's alignment. But now, Dave, is when I think we have the difficult conversation. And she goes, this is how I want to live. And I'm going to marry a guy who believes in living this way. And what you want to marry it into is a shared vision, not a messed up past. Correct.

Correct. Everybody's got a messed up past. That's right. We're marrying into a shared vision of where we're going. Yeah. And so I don't mind if you marry somebody who was an alcoholic for 10 years, but they've been dry for three years. And they've changed their life. I don't count the previous against them. Yep. I count where we're going is way more important than where we've been. Yep. And so...

You know, where we're going, where are we going? And are we going to go together? And is it going to, we're going to be in agreement. If I have to fight you all the time about borrowing money and about saving money, I'm not going to be on. That's not, that's not, that's not an alignment, but if we're on, if we're aligned on that and I just got to have start on you. Oh, that's okay. That's okay. This is the Ramsey show. Well, for the first time in the Ramsey show history, a couple of weeks ago, we hit number one out of all podcasts on Apple in the entire world. Thank you.

And you did that. We appreciate you. You did that because you have followed instructions when we told you to subscribe because that helps us to follow, to share the show, to give us a five-star review. We really appreciate you doing that. Thank you very much. And continue. Listen, if you like it, share it. Follow it. Subscribe.

And leave us a five star. It's very helpful to us. We really, really appreciate it because it changes the algorithms that are used with the different podcast platforms, Apple included. And that's how we end up number one on Apple. So thank you, guys. We really, really, really appreciate it.

and podcast reviews are coming in. These are cute. Thank you. Just started out on the baby steps, and this show offers such great motivation. The personalities on the show all complement each other very well. Enjoyable to listen to. Hearing debt-free journeys is a huge source of hope and encouragement. Grateful I found it from Tanya. Thank you, Tanya. We're grateful.

ruining my life. How do you know it's working when your spouse says Dave Ramsey's ruining my life? All in jest, but it's definitely working from Coupon Clipper. Thank you. Way to go. And thanks from the UK. Love the show and the principles you adhere to. They work just as well over the pond in the UK. I love it.

You've changed my mind on how I view debt and how I invest, so I'm starting a new journey today, which means no more car loans or leases, maximize tax-efficient savings, and smash at least 15% into pension. Thanks from Hoss. Way to go, Hoss. I like the way he said that or she said that. Smash the 15% into savings. I like that. You've got to love UK. I love that. Very good. There's some passion, some intentionality in that. Mason is in Charlotte, North Carolina. Hey, Mason, what's up in your world?

I'm doing good. How are you doing, Mr. Ramsey? Better than I deserve, sir. How can we help? Hey, I'm just calling. I'm 21, and I've been working at the same job since I got out of high school. And I've kind of lost all sense of passion and pride in what I do, and I'm really struggling to find some sort of path to be on.

And I understand that nobody can tell me what will make me happy, but I've kind of lost all sense of passion, and I'm calling you for some guidance in the sense of— Ken Coleman, 21-year-old clay on the wheel. Yeah. Do your thing, man. Well, I want to start with you said you lost the passion. That implies that at one point you had some. Is that true?

It is. Okay. Take me back to when you absolutely loved what you're doing. And why you loved it. Yeah. I want to hear that. I think it was a sense of just something new in my life, something like a different world outside of what I had already lived through. And that being like the type of job I do with being a machinist and seeing different stuff come in every single day. Yeah.

And it's just, it's kind of slipped away from me and I've lost that sort of passion. So you love the newness and I would guess the challenge with that as well? Yes. So you're good with your hands and able to see things in your mind before you make them? Yes, I would say so. So have you lost the challenge? Are you getting new stuff or now you've seen all the new stuff and so there's nothing new anymore? Is that what's happening?

Not necessarily that I've lost the challenge. The challenge is there every day. It's just a sense of, you know, accomplishment and pride. I feel like I've gotten stuck in a sort of rat race, you know, like being like a cog in a machine. And I've done things to, like, kind of help

maybe spark new passion. Um, like I've, I've been streaming on Twitch, um, pretty regularly. And I actually, I really enjoy that, but you know, it's not, it's not going anywhere. Yeah. Well, the question is, what are you streaming? Are you streaming like, uh, working with your hands and projects like that? What are you streaming? Uh, just, I,

I mainly play video games in my free time. All right, so let me help you out. So there was this time when you really enjoyed working with your head and your hands, the building, the repairing, all of that. And I think what you're facing right now is...

You are looking for the next mountain to climb. And I do think this is a natural progression for somebody who's 21. You've been doing this three years or so. And so here's the question I've got for you. I don't want you to overthink it, all right? I want you to tell me what – because work solves problems. All work provides a solution, which is essentially solving some problem.

What are the problems that you most get excited about when you think about work and your abilities? Because there's a tie between what you're good at, which we know, and what you love. So what problems or solutions get you excited when you think about work? I think the biggest thing would be providing a general help.

You know, like feeling needed and feeling wanted. All right. Let's stop right there. That's really good. Now let's go back to what you do best. If I interviewed all of your shop teachers, coaches, parents, uncles, everybody, bosses, and I said, what's Mason best at doing? What would they say your super talents are? And don't be modest here and don't try to word this. There's no wrong answer. Just tell me. What would they tell me?

It would probably just be like doing what I'm told without questioning. It sounds really bad to say, but... No, but what I mean, okay, let me put it this way. There's four types of work. There's people work. It's what Dave and I do. We're in the people work business.

There's idea work. That's what Dave and I do, people and ideas. There's process work. Those are your operations people, accountants, that kind of process stuff. Then there's things or objects, and those are people that build, fix, invent. You tracking with me? Yes. All right. So which one of those areas or two do you have the most talent in? People, ideas, process, or objects?

I would say the things in people. Perfect. Like, I enjoy connecting with other people. Perfect. That ties into the earlier answer you gave us where you just want to add value to people, right? And right now, all you're doing is things. That's right. You have no people in this room. That's right. So I'm not hanging any of these ideas on you, but this is where your brain's got to go. I got to go, where am I gifted? If I'm gifted at building or repairing things,

or things of that nature, fixing, wiring, connecting. If that's what I'm really good at and I love doing it for people, then that could be plumbing, HVAC. You could be in the trades where you can make a killing in today's economy and eventually be on a path to owning your own small business. I don't want to project that on you, but that's where the ideation comes from. I'm good with my hands and my head. What are you making as a machinist? How much do you make?

Post-tax or pre-tax, I'm sorry. It's about $40,000 to $45,000. I work 50 hours a week, and that fluctuates from pay to pay. $45,000 a year? Yes. Okay. All right. Yeah, I would be interviewing some people that are in trades that do stuff that you're good at,

And ask them about the people quotient. Ask them about what they love about the job and how they see their work making people's lives better. I think that's a good starting point for you because at 21, you don't have a ton of life experience. What you need are ideas. And the ideas are validated when you go, I'm good at that.

And I would really enjoy that once I've truly unpacked what goes into it. Does that make sense, Mason? I think we need to give him here. Yeah, I'm going to give you the assessment. I want to give you the get clear assessment. It's going to give you a purpose statement that becomes essentially a high level job description. I'm also going to give you my book from paycheck to purpose, which is like the guide to climb the mountain or pursue the mountains you want to go after. So that's my gift. But practically speaking, you're not stuck.

you just don't have some ideas that you're either confident in or you just don't have any ideas at all does that make sense it does and i definitely do feel like a sense of being stuck yeah and um i i i feel like it also might be a regional thing as well because i live in a very in a rural area in north carolina but it kind of touches based on like another thing that i wanted to bring up with you know if

You were in this position at this age with the knowledge. This goes for both of you. If you were at this age with the knowledge that you have now, where you've gotten to where you are, what would you tell yourself then? I want to figure out what I aim at 10 years from now and get about the business of getting there. Right now, you're just doing the same thing over and over. You're stuck in a wheel. So I want you to aim at the mountain 10 years from now and then go climb it.

So hold on. We're going to help you with the assessment and with Ken's book, brother. I appreciate you calling. You're a sharp young guy. This is The Ramsey Show. Ken Coleman, Ramsey personality, is my co-host today. Thank you for joining us, America.

In the lobby of Ramsey Solutions on the debt-free stage, Sean and Kathleen are with us. Happy New Year, guys. Happy New Year. How are y'all? Doing well. How about yourself? Better than I deserve. Where do you live? Boston, Massachusetts. Very cool. All the way down to Nashville, Tennessee. Well, welcome. It's so good to have you. And how much debt have you guys paid off? We paid off $147,000.

Yay! How long did that take? About four years. Good for you. And what was your range of income during that four years? Our range was from $48,000 to $184,000. Well, there's a nice jump. So what do you all do for a living? I'm a firefighter and a Ramsey Preferred Coach. Okay. And I am a teacher's aide and a full-time nursing student. Okay. So what happened to cause your income to go up so much? Well,

A lot has happened. We went everything from being unemployed to working the gig economy and then working on my, I worked myself into, um,

operations manager. And then from there, while I was doing that, I had the GI Bill paid for me to go to school. And so you went to fire. Okay. Yep. And then after that, I went and joined the fire department as well. Yeah. Wow. Good for you. Wow. Way to go, guys. That's a great journey. So what kind of debt was the $147,000? It was everything. So we had student loans. We had a solar loan. We had personal loans, credit cards, everything.

Car loans. You were normal. All the normal stuff. Very normal. Yeah, normal sucks. Yes, it does. Way to go, guys. So how long you guys been married? We just celebrated 13 years earlier this year. So after nine years of marriage, y'all looked up and said 147,000, this is not working. Something's got to change. What happened? Tell us the story of what got this started on the Ramsey stuff. It was actually even before that. So we started probably back in about 2014. Yeah.

It came down to, this all happened when I was in the Marine Corps. I was, we did the normal thing. We took out a bunch of credit cards, racked it all the way up.

And then we had basically the choice of do we pay the mortgage this month or do we eat? So we knew something had to change at that point. So we went, my mom flew out and she gave us your book because she Googled how to do a budget. That's basically all she knew about you. She was like, oh, this guy knows something about budgeting. So we did the budget and then we went through FPU and then we did just enough change

Breathe. Breathe. And that was it. We were Dave-ish for about four years. Okay. And then what got you on fire? What kicked it into gear? It was the I deserve mentality. So when I was working, it was after the Marine Corps, when I was working in a private wealth banking job, I got promoted.

And at that point, I was like, well, hey, I deserve a truck. And so the $650 payment that we came with it kind of slapped us in the face again, you know, because I'm stubborn. And sometimes I need a two by four to the head to, you know, really get things moving. So yeah.

Once we had that $650 payment, we were like, well, again, something needs to change. Here we are again. Here we are again. You know, rat in the wheel, right? So we went back, went through FPU again, and then we got real intentional about it. At the end of 2019 when we started. So you got a C- or a D- the first time. So you had to retake it. Pretty much. We had to retake it. Okay, I'm in. I'm in. I'll take it.

Yep. Yep. And then so we, in 2019, we saw something going on with the company that I was working for and stuff like that. So we actually paused the baby steps. This is why it took a little bit longer than we wanted it to. We saved up a bunch of cash. Sure enough, 2020 came around, COVID lost my job. And so right after that, I didn't, we had the savings to rely on, but we

We really went and got, you know, I did all the jobs. I did the Instacart, the shift, I did DoorDash. I donated white blood cells, everything. Wow. Everything. Out of control. Yeah. And to survive and not have to hit the savings. Yep. And then now you've settled into good, solid careers, both of you. And now you're debt free.

Proud of you guys. Way to go. Thank you. I'm just curious about your mindset over the four-year period. So once you actually recommit and get after it,

I always like to know, were there moments where you just didn't think you could make it any longer? If so, I see you shaking your head, Kathleen. Take us there. Because I think there's some people that are probably on this journey. They're not where you are today. And they feel like quitting. We're not going to get there. What did you do? What did you guys do? How did you not quit? Well, we leaned into each other a lot. There were times when I felt like giving up and he was like,

the person that was like, no, honey, we got this, we got this. And there were times when he was working so many gigs and was tired. He would come home so tired and he was just like, I don't know if I can do this. I'm like, no, babe, you're doing so much. We're almost there. There was a lot of like late, late, late night conversations. Um, kind of like,

putting our minds back on what is the goal? What is our end goal? Because if we lose sight of that, that's kind of like when our motivation would like go down. But it was definitely hard. Sometimes the kids would be like, I want to be like my friends. They're going out tonight. I want to go buy this. And it was hard to say no to them. But we also had to explain to them like what we're trying to do for our family so that

We won't have to say no in the future. And they understand for about 10 minutes and then they ask again. Oh, of course. Of course. Especially the younger ones. Yes. But our kids were pretty good. We kind of like brought them along in our journey and they knew what was going on and what we were doing. Probably been really good to watch their hero parents. Yes. Probably has. Their parents are heroes. I'm so proud of y'all. They're a part of our budget. So like they knew what we were doing. Yeah. Yeah. Yeah.

They have their own little chore charts and everything. Ah, very good. Oh, yeah. All right. The biggest thing that kind of really pushed us through was, you know, seeing things actually work the way that they're supposed to, right? So when we were going through, you know, you can do anything for a season, right? You guys say that often, right? And I'm kind of a prime example. At one point when I was working at Amazon, I would, so Monday, Tuesday, Wednesday, I would work at Amazon from 2 a.m. to 2 p.m.

And then I would come home, do some schoolwork, go to school, come back, do some more schoolwork, and then go back to work. So I did not actually sleep Monday, Tuesday, or Wednesday. Wow. And then I did that for, I don't know, two and a half months or so. Wow. And so I just, you can do anything for a season. For a short period of time, you can do anything. Yeah, way to go, gosh. Was it worth it? Yes. Yes, absolutely. What do you tell people the key to getting out of debt is? I think it's important to be on the same page in communication.

Because, I mean, this journey is not for the faint of heart. Like, you have to really, like, lead into each other and understand each other, where you guys are coming from. Yeah. Consistency and grace, right? So, because you're going to mess up at some point. Mm-hmm.

Right. Do you have to be able to not just kind of give up after you've messed up once? Right. And then once you've cheated on your diet once, I'm never going to do it again. Right. It's we have to go back into it and go, yeah, we messed up. How do we avoid that next time? Yeah. And just keep pushing. Very good. Way to go, guys. Way to go. Very proud of you. We've got the live and give box for you to say thanks for coming from Boston to do your debt free scream. It's the baby steps millionaire book.

because that's the journey you're on for sure. Total Money Makeover book to give away when somebody says, I need a budget, like your mom did, right? And Financial Peace University, and you can go through it twice if you need to. We proved that. So we got that for you. You can give that to somebody. It'll help you do that. So bring the kiddos up. Give us their names and ages. All right. All right.

So there's Madeline right here. She's 11 years old. There's Evelyn, who is nine. Then there's William, who is six. Wow. Good looking family. Oh, they're worth it, I believe. Oh, yeah. Yeah. Good, good work. Good work, you guys. Very cool. I'm so proud of you. Congratulations. Thank you. All right. Sean and Kathleen. Kathleen, I'm sorry. Madeline, Evelyn, and William from Boston, Mass.,

147,000 paid off in four years. A lot of unbelievable hard work. Living like no one else so later they can live and give like no one else. Income from 48 all the way up to 184 during that time. Count it down. Let's hear a debt-free scream. You guys ready? Three, two, one. We're dead! Yeah! Yeah! Yeah!

Madeline Neville and William got it. I like it. Yeah, that was well done, kiddos. Yeah. They practiced. Score. This is The Ramsey Show. Our scripture of the day, Philippians 2, 14 and 15. Do everything without grumbling or arguing so that you may become blameless and pure, children of God without fault in a warped and crooked generation. Then you will shine among them like stars in the sky.

Theodore Roosevelt said, complaining about a problem without posing a solution is called whining. I like it. Uh,

You got to love Teddy Roosevelt. Good stuff. Hey, guys, George Camel's brand new book is coming out January the 16th, just a couple of days from now. If you preorder the book, Breaking Free from Broke, it is an incredible book. It exposes the most common money myths and excuses head on. It is truly a snarky, fun,

read because he gets after the people that are misbehaving in the financial world taking your money and you're going to like it you're going to learn a lot from him

Breaking Free from Broke comes out January 16th. If you pre-order it before then, you get $100 worth of free bonus items, including an instant access to George's newest talk, Show Me the Money, and exclusive access to an online private event and a Q&A with George, the audio book, and the e-book. You can get all of that at ramsaysolutions.com. Jump into the store and pre-order the book.

That's the deal, and we'd love to get you in there and get this Breaking Free from Baroque book. It's been selling like crazy. Thank you very much for that. We appreciate you supporting, George, and this book is going to be well worth every dollar and then a bunch more. All right, Mark is in Lima, Ohio. Hey, Mark, welcome to the Ramsey Show.

Hey, how you doing, Dave? Thanks for taking my call. After 30-plus years of being like everybody else, buying everything on credit, house payments, multiple cars, all of that, we did a financial piece a couple years ago, kind of figured out that, you know, we've been dumb, had a house for 25 years that when we sold it to build a new one, we actually owed more on the house that we had owned for 25 years than what we paid for it. Because you kept refinancing it? Yeah.

Yep. Refinance and add on, do this, do that. Anyway, we kind of got our heads out of our rear end. And in two years, sold the cars, condensed all that stuff. I'm currently driving an old piece of crap, paid off the house. Wife retires early. Now we debt-free don't own a penny to anybody. And I'm like, now what?

You know, you got cash sitting there and it's like, you know, I want to spend it. And then the other part of me says, you know, how dare you? So I'm kind of like wrestling in my head with how do I kind of open back up the purse strings and be smart about moving forward. Yeah, that's good. Well, yeah, it's normal when you've been going this fast. When you slow down, it feels weird.

that's a normal thing for most people. Um, Sharon and I went through that as well. When we went, you know, we, we went to the extremes to get clear of the, the past history of misbehavior. And, and once we got there, we're like, I'm not ever buying another car. I'm just going to drive this one. And finally, the old thing just lay in there on the side of the road. We're looking at it. We're going, okay, we got to do something. So, um,

And we had plenty of money. We just were cheap. And, you know, that's where you get to because you stack cash pretty quick when you're getting in your situation, right?

Right. Yeah. Yeah. So my problem in my head is I'm a gearhead car, car fetish guy. Yeah. So, you know, I've, I've spent 30 years and really enjoying what I drive. And, you know, I kind of like cut that off two years ago and now the itch is there. And I'm like, ah, I'm not sure that's the smartest thing to do. Yeah. Well, I mean, there's basically three or four things that keep us aligned at our place. Um, number one, we don't borrow money for anything period going forward.

So no discussion about anything that has that in it. And I think you're already there. That's off the table. And we're going to live on a written game plan that the two of us agree on our spending. And while you're working the baby steps, the way to remember it is there's only three things you can do with money, and you should always be doing all three. Giving it, investing it, and enjoying it.

The problem comes when... Yeah, the first two we've got, it's the third one. Yeah, yeah. So, you know, now we've got to add that back or you've got an unbalanced equation. And so as long as you have the other two in there, you can add that one back. Okay. Because you will never return to the shape you were in. You've stretched too far. Oh, I better not. No, you can't. It's impossible. You just won't.

Because you guys have, you have changed. You've had a total money makeover. You have changed. You've changed who you are, the way you view money, and you will never go there again. And so now when I buy something, I still, 30 years after going through all this, pause,

And look at it and consider, well, and as a percentage of my world, is this out of control? Does it mean I can't give like I want to and I can't invest like I want to? No, it doesn't mean any of those things. It's a small percentage of my world. Okay. Then I'm allowed to buy that car. Okay. Okay.

In your case, in your case, that's what you want. You know, and I like cars. I've got a bunch of cars. I like them, but I don't, I have never, once I got through all that, I have never looked at cars the same way again. I enjoy, I buy cars now for the same reason you do Mark. And that's because I enjoy the car. I have zero care what you think of my car. I used to buy cars for what you thought.

you know, as a prestige item. And now I don't give a crap what you think. It doesn't bother me at all. I mean, you can like it or not like it doesn't matter to me. I bought it for me. I didn't buy it for you. So, um, and that's a different way. Then you'll make a different decision. And so, you know, a few years ago, you know, I bought a 1960, uh, Corvette frame up restoration. I was born on my, it was born on 1960. So a 1960 Corvette frame up restoration.

Fabulous. 350 in it, six pack on it. It's a hoss and it's a beautiful little antique. It's a cherry. Yeah, it's a fabulous. It's so nice. But you know what? I bought that car because I enjoy that car.

And it's a garage queen, obviously. It's not a daily driver, right? So, you know, you're going to get back to there is my point. But I drove a hoopty. I drove like no one else, and now I drive like no one else. Yeah, you know, Mark, I wonder if you can downshift on the intensity. No pun intended. Right. I didn't realize I did that. Boy, that's amazing how that happens. That's great. All right. But keep the discipline.

And so here's what I'm saying. You said today's response to the three guardrails, you said we have a hard time with the enjoyment part. Well, what if you use that unbelievable discipline muscle and you discipline some fun, some enjoyment in that new budget? Because when we're gazelle-intense...

There's no enjoyment in the budget. But now you can, and maybe you rely on that discipline as you begin to kind of ease off the throttle a little bit. Here I did it again. I can't help myself. Stop me, Dave. Downshift and throttle. You got this running. Yeah, I think that's what you've got to do, Mark. Does that make sense? You don't have to be gazelle intensity anymore, but you can still be disciplined. Budget some money that you have to spend for fun. That's it.

I got you. You're basically planning. Yeah, yeah. So save up for that awesome car. And the difference in that and the way you used to live is you used to just spend until you ran out of money. Right. Right. And now you're planning like an adult what you're going to spend on enjoyment. I'd pick a car out and go, all right, how many months based on where we are? How are we going to save up and get there? What percentage of get there and...

You know, let's get an upgrade out of some of the junk you're driving and get you back into some nice stuff. And you're there. That's why you do this. You live like no one else so that later you can live like no one else and give like no one else. You live like no one else. You drive like no one else so later you can drive like no one else. You know, everyone, you give like no one else so later you can give like no one else. You put yourself in these positions. There's a price to be paid to win.

And you have reset your brain and you've gotten above this money thing instead of down under it. And you guys have learned that, Mark. I'm proud of you. Way to go. You're killing it. Good stuff. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

Hey guys, I'm Rachel. And I'm George. And you've probably heard our voices before on The Ramsey Show. And do we have a surprise for you? Yep, we have our very own show, Smart Money Happy Hour, where we talk about pop culture, current events, and of course, money. George, it's a great show. And what else do we talk about? So much, Rachel. Not enough, and yet too much. We talk about guilt tipping, because tipping is out of control, and I won't stand for it anymore, which is why I'm sitting. I'm glad you're taking such a stand. Okay.

And we also talk about something else I'm passionate about, Disney adults. Oh, George. Why is it a thing? Listen, some adults still find the magic. Sure. We are.

We also talk about toxic money traits and girl math. And if you don't know what those are, you have to listen to the podcast. Yeah, there's a lot there, you guys. It's pretty fun. We keep you relevant is what I'm trying to say. We help you out. So pull up a chair to the happy hour you wish your friends were having. We promise you won't regret it. And if you don't have friends, we'll be your friends. We will. We're great friends. So make sure to check it out on Apple, Spotify, YouTube, or the Ramsey Network app.