You Have To Get to the Root of Your Debt Problem
02:05:18 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 amazing relationships. I am Rachel Cruz, and co-hosting today with my good friend and fellow Ramsey personality, George Camel. And we are here to take your calls, America. It is a free call.

Anywhere in the country, which it's been a free call for a long time, George. When are we going to start charging, Rachel? We kind of poked fun at that. Inflation's killing us. That's like a 2000. If you remember having to pay for long-distance calls when that was a thing, you would appreciate that. Those old collect calls. But it is a call, any call in the country, at 888-825-5 at 225, and we will answer your money questions, relationship questions,

Questions about work We are here to talk to you So first up we have Portia In Houston, Texas Hey Portia Welcome to the show Hi, hi Rachel Hi George Love your book Breaking Sleep and Get One Oh, thank you That's a good shout out How can we help you today? Yes So I just graduated from school In December And I feel like I'm late with everything So

I have, of course, debt, and I'm just trying to find the proper time to purchase my house. When I did the numbers, when I worked the numbers, it appears that based on my income, I will be able to pay my debt off in about...

Two years. So my car, I only have like two major debts, which is my car and my student loans. My car is 14.5 K remaining. And so I'm paying it off. I'll be done paying it off in April. Yay. Yeah. That's great. And my student loans is 134,000. What's your degree? Yeah.

It's my master's in finance and investment management. Okay. And do you have a job? Did you get one out of school? Yes, I did. How much are you making? $166,000 a year. Good for you, Portia. That's awesome. Thank you. So what's your question today?

So when I pay this off, because I'm all for it, I'm disgusted by this. Like, I am not interested. So I'm past. I cut up my credit cards. I'm done. I just want to know. I don't have any kids yet. And so I am getting married too soon. Oh, congratulations. I just want to know, like, what's going on?

Thank you so much. I just want to know, like, when would be a proper time to pay for a house or do I rent? Like, George, I've heard you speak on, like, you know, don't get caught up in the whole where my kids are going to be, you know, where, you know, thinking families, the big yard, the whole nine. Yeah. And just a townhouse, renting a townhome can be – so I'm thinking in my situation –

Is that the direction? Because I'm thinking about my age. How old are you? I'm 35. I'm 35. Oh, my goodness. Ancient. Throw in the towel, pack it up. Portia, it's over. It's over. You know? Life is past you. Rachel hit her prime about 24, and it's been downhill since.

But no, Portia, we're kidding. You have so much time. You're doing great. But I know compared to your peers, you're seeing people in their 20s. They're like, well, I should own a home by now. But also you had a different journey and you got a master's and you got further education and you had debt. And so that's okay that, you know, you're delayed with this dream, but don't do what most people do, which is go buy a house while you have a giant pile of debt, while you're trying to invest, while you're trying to do everything else in life. Yeah. When are you getting married, Portia?

I'm getting married this summer. This summer. Okay, that's great. And what's kind of what's his status? Like, do you guys know where you want to live? Do you? Yeah. Are you guys on the same page with all of that?

Well, he has no debt. He's never financed a car. He's awesome. That's great. I like this guy already. He sounds like a winner. So do you know what his income is, or are you not there yet in the relationship? I hope so. They're engaged. You never know? We've been together for years. Oh, okay. Yeah, he makes $72,000 a year. Okay, so you'll have a household income of over $200,000 this summer. Yeah. Which is going to speed up your debt payoff process.

Yeah. If he's the man I hope he is, which is we're going to clean up our mess now. Yeah, that's right. Yeah. He's very encouraging. So let's play this out. By April, the student loans are gone. You get married in the summer. You're attacking the student loans. And when do you think it'll be paid off with all that factored in with his income and maybe his savings? Who knows? He may come in with a hundred grand in savings and be able to wipe out your debt.

True. Well, when I did the math, I know I could pay my car off quick, like in three months. I'm already on track with that. So I'm paying like $2,500 every two weeks to pay that off. Right. So like five grand a month you're throwing at debt.

Yes. Okay. And now the student loans, it does. Well, the student loans is $134,000. And I think it'll take me about two years because I decided to live on just maybe 30% of my income to pay it off. Yeah. And that's great. And Portia and I, honestly, with you guys getting married, combining incomes, and like George said, him bringing anything into the marriage, it's

you guys together, you'll pay it off faster. I really do believe that. So whether it is you guys combining and being on the same team or even just you, I mean, I just, I can already tell from this call and the tone of your voice, I'm like, you're going to do this quickly and probably faster than you even realize. So yeah, I think once you're out of debt, I would build up a strong emergency fund of three to six months of expenses. And then by that point, I mean, yeah, you and him, I think you guys really look and say, okay, you know, where, where do we want to live? What is this one? What

What do we want to, you know, where, what part of Houston do we want to be? Do we want to do a townhome? Since we don't have kids right now, do we and can we maybe afford something more? And that's what we choose to step into. So I think it's totally up to you guys. I think I would stick with that idea.

formula though of your of your payment being no more than 25 percent of your take-home pay I think that's where it gets a lot of people and and really you know you guys together look but I think it's going to be sooner than what you think Portia and I think that's the best next step for you all is to save up that down payment and if um does he own a home now

No. Okay. No, that's great. Yeah, yeah. Rent for a year or two and get that down payment saved up. And that may be four years from now you guys get into this house. But you're going to do it with so much peace and patience and equity that it's going to be a blessing instead of a burden. Yeah, that's right. Well, Portia. I appreciate that.

Yeah, go ahead. I was going to say, I appreciate that because family can, we ain't going to get a house. I know. You got to turn that volume down. They don't pay your bills, Portia. That's the problem. If they did, that'd be great. Say, great. You go get me a house then if you want me to have one so bad. Right?

So that's the problem is avoiding all the pressure. That's the hardest part of this whole financial mess. Yes, and I think people, you know, they say that from one element of like establishing roots and having your place, but also from a financial standpoint of, yeah, once you get in, you're building equity and it's good for your overall financial picture. But Portia, you guys are going to be fine. You're going to be fine. You're going to get a house when it's best for you guys. You're going to both be investing. You make insane money. You make great money, over $200,000.

And so you guys will start investing consistently. You're going to build, you know, I really think a great, a great financial life together. And the fact that he has such great common sense with money and already such great money habits from what you've said, I think you're going to, you're going to do great. So here, George and I, as your friends, patience is, you're fine. You're good without buying a house, pay off that debt, get a good emergency fund down payment, and you're good to go. This is the Ramsey show.

Hey guys, it's Rachel Cruz here to tell you about a faith-based alternative to health insurance that can make healthcare more affordable, Christian Healthcare Ministries.

CHM allows members to share each other's healthcare costs, and it's as easy as one, two, three. Step one, choose the healthcare provider you want. Step two, submit your eligible bills. And step three, get reimbursed. CHM members take care of your eligible medical bills. With no network and the freedom to choose your healthcare provider, CHM is the best option for Christians who want to take care of their families and help other believers.

Find out more at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. We are taking your calls. And up next, we have Seth in New Orleans. Hey, Seth, welcome to the show. Hey, thanks for having me. Absolutely. How can we help?

Well, I mean, not to be too long with it, but 2018 rolled around and Dave came out to church nearby my house and went and listened to him talk. And, you know, I've been broke and working hard and decided that I'd follow him and be working hard, not broke.

And over the last couple of years, I've worked real hard and put a lot of seeds in the ground. And this holiday had some of my family over and I have a new property and some new space. And they wound up asking about the mortgage. We're working on some land and asked about the mortgage. And I just kind of said, I don't have mortgage on the property. And then one thing came to another and it came out that we had

a lot more money than my family had ever thought you could have. And it's caused quite a bit of, quite a bit of a hum dig around the family. So have they asked you for money or are they just upset and envious that you don't have debt and you're not strapped with payments? Oh yeah, no, all. All of it. So they straight up said, hey, you're doing pretty well, boy, aren't you? You got any of that money laying around for us? Like, was it joking or was it pretty serious?

no I mean we went out for a we have a mess of kids you know and so we went out one night for something and the ice cream was there and I was like you know you told my kids grab ice cream whatever kids grab ice cream wound up getting ice cream forever which isn't a big thing anymore and uh

you know like oh it must be not you know and then the next night they were saying you know we're going out to dinner my wife was only went to dinner family over so like oh just the two of us will go out and oh you got us you can go too does it uh no i do not i do not have you so there's there's assumptions and entitlement now of like well he'll cover it because he's doing pretty well so he should cover it yeah and is this your direct parents like who who's involved here

Everyone. Yeah, no, everyone asked throughout the course of the two weeks after that. You know, they found out about aunts, uncles, cousins. Yes, sir. All the phone calls and everything. Goodness gracious. It's like you won the lottery or something, but it's taking you. How much money do you guys actually have?

A lot. I mean, I don't know what a lot for everyone is. A lot for what I thought. My wife and I picked up, we stopped whining and started working, which is kind of our joke to us. And I don't know, we put some things together. And right now I think we did our net worth at the beginning of the year, and it was right under $4 million. Oh, my goodness. That's great. That is amazing. How old are you two? Yeah.

I'm 37 we're 37 so that's incredible and this is mostly your family not hers no her family doesn't know and and they're I mean you're like they're not going to we're not telling anybody else after this debacle oh they're good though they're all square they're not they're not my side they'll be like oh good for you is your family local Seth do you guys have like day-to-day interaction with them

Not so much right now, but yes, ma'am. Yes, ma'am. Okay, but they're local and you guys usually would like kind of do life together. You do dinners together. They're a part of your rhythm in life. Yes, ma'am. Okay. Seth, it's about to get uncomfortable. How do you feel? Are you like pissed about it or are you confused with it? Do you feel bad? What's your overall emotion? Well, I was...

I was upset the first night, and so I ended up calling everyone together the next night, and I was like, listen, my responsibility is to take care of my wife and my kids, and I'm going to do that. And I told them I would put them through FPU, you know, and I wrote a list of all the books I read. I mean, I picked up

majority of all the books and the library is free you know and so I was like I'll tell you all the books you can read those you know I'll tell you what I did they're not interested in learning that's pretty bold Seth the next night I was expecting us to have like a conversation about setting a boundary you just did it the day after so then how do they respond to that they ask for you to pay for their dinner I think yeah

Yeah, pretty much. You know, well, if you don't have it or you don't want to share, you know, and it was just a lot of guilt. And so I've been wrestling with it for a couple months now. And I was listening to y'all show and I was like, yeah, well, I should probably just call and say, hey, y'all. I mean, you guys have money. I don't have a lot of people in my life to have money. So, you know, I have new friends, I guess. But it's hard to say, you know, to your brother looking at you. Yeah.

You've got $10,000 for a business. I don't have $10,000 for your business. I'm sorry. That's not what I have. This is not Bank of Seth. But I'm not there. That's right. Well, you've approached this with a lot of tact and wisdom and maturity, which I applaud you for. And the fact that you're even willing to have the hard conversation tells me that there is hope here. But it may take a few of these conversations and enough times to where they get the hint.

And you know what? That might hurt these relationships. These people may not want to hang out and go to dinner because they have some own resentment that they, you know, some poison they've been drinking. Yeah. And so I don't want that to be a reflection on you. And it's going to be painful in some of these situations. But you have to do what's right for your family. And you can't let this generosity turn into requirement because that takes all of the joy out of it.

Yeah. And Seth, and just so you know, and I know you probably know this, but just to say it out loud, like you've done nothing wrong. Right. And I feel like what can happen is they can pin you in a corner where you feel like suddenly if you don't do something, you're doing something wrong because, yeah, do you have the means? Yeah, you guys do.

But you're an adult and you get to decide what you do, just like what you told them. Your responsibility is to you and your family. And what you do beyond that is up to you. But by you existing with this money, that is not a wrong. You're not in the wrong. And I feel like sometimes you can feel like, oh my gosh, I'm the one that's done something that's not good or not okay. And so just remember that, that you haven't done anything wrong. And the truth is, and George said it, but

it probably sadly will create a divide. And I wish that wasn't the case, but I feel like they've proven themselves. After you set a pretty strong boundary and were very honest and clear, they chose to overstep that boundary and asked you to pay for dinner that night. So I think you have to have a realization too, and you probably already have, but you and your wife stick together as a team and just realize, oh my gosh,

Sadly, they don't have the maturity to handle this part of your life that you brought them into, right, by sharing this information. And that's sad because it may end up causing a divide and stronger boundaries that you're going to have to set. Yeah.

No, I agree. The thing that I kept pushing for was they could do it too. You know, that's what was hard. My heart was, and I'm not trying to withhold from them. I'm trying to, you know, I'll walk with you. I'll tell you exactly how I did it. I wrote it all down. You know, I'll keep my budgets in paper. You know, I can tell you how I did it. And yeah, there's a lot of luck and a lot of things, but you know,

We could do it together. I'll help you, you know? And they're just, no, I'm not interested in working. I mean, they used to make fun of me in the beginning when I said, oh, yeah, I was going to follow Dave Ramsey. And they're like, no, don't do that. That's not going to make any money. I was like, all right. He seems to like his wife and his wife. I want to do that too, you know? Yeah, and that was my heart. I was like, they're not interested in learning.

Entitlement runs far away from work. That's generally how it goes. And so I love the old quote. I think it's a Maya Angelou quote. When someone shows you who they are, believe them the first time. And if they show their character that this relationship is based on transactions and your forced generosity, then it's not a relationship.

And they're choosing to opt out of that relationship if that's how they see you. And so the hardest part about all this is you grappling with the emotions of that. It has nothing to do with them. It's you feeling like I'm not the bad guy here. Because they're going to gaslight you and go, man, you're evil. I can't believe that. You're so stingy after everything we did for you. Remember when you were five and I took you? There's going to be all kinds of things that bubble to the surface now.

Yeah, that's what my, you pretty much nailed what my dad said. Yeah, 100%, hit him right on the head. Dang. Yeah. Man. It was an odd conversation. It's an odd place to be. But, you know, I don't know. I was thinking that maybe the best course would be

you know, bend the knee a little bit and just... Best course is, I don't know, flee the country and change your name, but let's not do that, you know? Go into the witness protection program. Yeah, the right course is have the hard conversations as many times as you need to, and then you need to draw the line and say, listen, we've talked about this several times. This is where I stand on it. I love you guys, but our relationship can't be based on transactions. Yeah, and again, they're choosing this. Like...

You haven't done anything. You've just done the hard work for five, six years. Seth is a good man. I know. And this is what is being exposed in them. And you can't control them as much as your heart is so good and pure and wanting that. You can't. And I think it's going to be, it's going to continue to create that divide. And you're going to continue not to want to let them into your life, which is so sad with family. So I'm so sorry, Seth. I hope you feel encouraged, though. You're doing good. 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 deloney today for 10% off your first month. That's betterhelp, H-E-L-P dot com slash deloney.

The Ramsey Show question of the day is brought to you by Neighborly, your hub for home services. There are a lot of things that you need to remember when the weather is cold. Thankfully, Neighborly has a free winter maintenance checklist that can help save you time and hassle. Check out neighborly.com slash Ramsey. That's neighborly.com slash Ramsey. Today's question comes from Brittany in Nevada, or is it

Did I say it right? Yeah, you did. Nevada. Are you sure? I don't think it is. Now I feel bad for everyone. It's Nevada. That's what it is. No, it's Nevada. Brittany asks, my sister only makes around $25,000 a year and recently found out our mom took out a credit card in her name, which has a balance of $2,000. Our mom habitually has no money and I don't see a world where she will pay this debt off.

I ran a credit report, and as far as I can tell, she does not have one in my name. I make $72,000 a year and have been thinking about saving up to pay this debt so it's not hanging over my sister anymore. Is this a good idea, and how do we close this account? Oof. Man. Well, there's a lot going on here. Most of it's relational. Only part of it's financial. Yeah, I mean, it's illegal. She stole her identity. It's fraud. And so...

I mean, and I know people don't always, and it's hard to take legal action on $2,000. And against your mom. That makes things extra awkward. Yes, yes, yes. I'm like, and so, oh my gosh. Yeah, so what you would do is, yeah, in order to close the account, you have to have it paid off, paid in full, then you close the account. And then I would put, you know,

as much protection around all of your crediting as possible. I would freeze every account with all three credit bureaus immediately. And just making sure that, yeah, no one, especially her, but also having the conversation with her. Like she needs to be confronted. Absolutely. That this happened. You guys have the knowledge of it. I mean, and I'm like, and you hate to threaten someone, but I'm like, you literally stole my identity and took out money in my name to somebody that makes $25,000 a year. And so going forward, it's like if you, if you,

continue to have to have a legal action against me I'm gonna have to process like we're gonna have to move forward with something harsher mom and so I don't know again two thousand dollars for some people they would go ahead and like do as much as they could by the law to get this stopped because I guess she could get right if it's considered if it's considered fraud yeah she actually won't she won't have to pay it but then but and again in some like world where you're like yes justice needs to be served

But then in the real world, I'm like, it's $2,000 and how much you're going to pay a lawyer to do everything? I don't know. Yeah, my first go would be contact the credit card company, say, hey, this is fraud. This was not a purchase I made and have them try to reverse that. And secondly, like Rachel said,

I would close this account, pay it off. And if the sister wants to do that as a gift, which it sounds like Brittany's wanting to do that, that's very sweet. That's a one-time thing and go, hey, I'm going to cover this and we're going to fix this and freeze all of your accounts with all the credit bureaus so this never happens again. And then confronting mom is another piece of this. And helping sister get her income up. That to me is another glaring problem outside of this, but making $12 an hour is not sustainable anymore.

Long term for her. For an adult long term. Yes. Yes. And we don't know how old she is or what her situation is. She may be 16 for all we know. I have no idea. That's so hard. And that's become a common thing, George. Like we're seeing more and more of this. I'm seeing it on TikTok and Instagram and people are going, oh, open a card in your kid's name. Add them as an authorized user at three years old so they have great credit when they graduate. Yes.

And then you tank your kid's credit accidentally or maliciously. When life happens and a pandemic hits and you get strapped for cash and you have to go make disfinancial decisions that are not wise in a crisis and your kid's name is attached to it. And so again, yeah, we're seeing like, but that in and of itself-

Is that legal? That's not, I mean. To add them as an authorized user? Yeah. That's legal, but opening one in their name is not legal. No, no, that's illegal. Yeah, yeah, yeah. Without, yeah. Obviously, they're under 18. You can't ask a three-year-old for consent. No, you can't. So you just add them as an authorized user. Which, that's what parents are doing in the legal aspect of it. But again, it ends up, we see the horror stories. And we've had people call the show, same thing happening every day.

My parents tanked my credit. What do I do? They opened up cards in my name or added me as a user on this card and it's affecting me financially. Yes. Yeah. There was a study by Carnegie Mellon and this was in 2011. So again, it was a few years back and

but found that children are uniquely vulnerable to identity theft. And in their analysis, more than 40,000 American children researchers at their university found that 10% of them had someone else using their social security number. Oh, gosh. And then in 21, a study came out saying

that found one in 50 U.S. children fall victim to identity theft every year with 73% of victims being targeted by someone they know personally. Goodness, which is probably going to be a parent, an aunt, an uncle, a brother, a sister. That's terrible. And so much of it is financially related, right? Selling your identity to open up accounts.

And credit cards. And they say here, the founder of the law firm said the chief motivation behind these crimes was when a parent has had bad credit and is not able to make a debt based purchase. There you go. And it says in most states, this is a crime, fraud, identity theft, misappropriation of funds or all possible charges a prosecutor could bring. Yep. So it's possible to go to court for this. But again, the costs of lawyer fees add up to where you're like, was this I spent 10 grand to fight two grand.

was this worth it in the end? And a lot of stress. Sure. Emotional turmoil. Yeah, yeah. And again, you want justice in every legal sense of the word, right? But when you get down to it in the real world, it's like, oh my gosh, for somebody out there, her making $72,000 a year, it's like,

Is it realistic for her to go and, yeah, go and hire a lawyer and do all of this? Or do you pay it, close the accounts, have the threatening conversation with mom? But, yeah, some people choose the latter. So we'll see. Choose violence. Never. All right. Up next, we have Bailey in Pittsburgh. Hey, Bailey, welcome to the show.

Hi, thank you for taking my call and thank you to you too and your team for what you do. Oh, thank you. I appreciate that. How can we help?

So, years ago, back when everything was paper, I started following your dad at that time and then kind of got off track. And here recently in the last month, I've just came back around. And I'm trying to convince my husband to let's follow the program to a T, which means stopping our investing in our 401ks and things like that.

He's a numbers guy, so I thought he would get it, but he says that's leaving money on the table, and I'm saying let's do it temporarily so we can pay off some debt. Okay, so how much debt do you guys have? Around $40,000 on a vehicle, $7,500 on a credit card. And he's a numbers guy? Yeah. Does he know what the APR is on that credit card?

Yeah. Does he know what that car will have costed him after all the payments and interest versus what it's worth after the term is over?

I'm not the numbers person and I've laid all that out, which if I can understand, that's what my frustration is. And I, I say to him, you know, we, we've done some things okay through our years. Like for example, after this year, we'll have three children through college. We fully paid for that. So they're not coming out with debt. Yeah. I feel great. How much do you guys make Bailey? I'm sorry. How much do you guys make a year?

household income um uh combined now just recently took a new job so combined now we're at 250. well yeah i mean you guys have the margin to for sure pause the investing and pay this off i mean i know you know that um yeah and at the end of the day too bailey i'm like and also the truth is even if you guys continue to you know do because how much are you putting in retirement now

He's maxing his and I'm maxing mine. And that's what I'm saying to him. Let's just pause that. I'm not saying let's stop. I'm just saying let's pause it, pay off some of this other stuff. That's right. Do you guys have money in savings? We have 10 liquid cash, 10,000 liquid cash that I, you know, something happened. Yeah.

Yeah, well, and the truth is, Bailey, over time, you know, if you guys didn't pause it and you guys just threw some extra money and got this debt paid off, you're going to be fine either way. My biggest red flag is that you guys are just not on the same page on your value system. So obviously your passion is more on getting out of debt. And I would and I would present not just the numbers zone, but the why. Why is it for you, Bailey? Is it because it's stressing you out? Are you fearful? Do you see, oh my gosh, we're empty nesters now?

And what we could be doing if we didn't have all these payments. And I'm stressed that we're going to go deeper into debt because that's a part of our life, right? Explaining the why, not just the numbers to him. Spouse to spouse is really important. 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.

So one of the topics that is really popular, I'd say in this line of work, George, but also in the world right now, is real estate. Hot topic. We are so excited to announce that Dave Ramsey has a brand new quick readout, which means it's a pretty short book. You can finish it over coffee. Yep, 70 pages. And it's called The Real Estate, The Ramsey Way. How to Make Home Ownership a Blessing, Not a Burden. And Dave has decades and decades of experience

of real estate knowledge, being an agent himself. Started at 18. Started at 18. That's how he made his first few millions. Yep. Lost it all through real estate. Learned a lot. Made it back largely through real estate, which is cool. That's right. What a comeback story. All the way around. I know. 360.

Just back, back. And in this book, Rachel, I love that from start to finish, you'll get a clear plan to help you buy, sell, and invest in ways that will let you build outrageous wealth and leave a legacy. There is a right way to do it. Home ownership is still possible in America today, and your home can be your biggest asset. It doesn't have to be complicated. We can do this the right way. Dave's going to show you how. So get your

copy at ramseysolutions.com slash store. I know a lot of you are wanting to buy a home. You have people in your life who are wanting to buy a home or they're about to sell a home. They want to get into real estate investing. This is a great gift to get for them as well. Yeah, for sure. And we want to give hope that it is still possible, you guys, but we want you to do it the right way. So it is all here. So again, whether you're buying for your primary home, investing in real estate, all of it, real estate, the Ramsey way at ramseysolutions.com slash store.

Up next, we have Mark in Minneapolis. Hey, Mark, welcome to the show. Oh, yeah. Thanks for taking my call. Absolutely. How can we help? Well, I wanted to know if you guys had dealt with anything like a promissory note being repaid. I have a promissory note kind of hanging over my head, about $26,000 from a previous job that

I was supposed to stay there for two years, left for personal reasons. Only had about three months left until the two years was up. But now it's with an attorney and we just

We don't have anywhere near that amount of money to pay. I just don't know if you guys have ever heard of getting out of a promissory note or what do you think I should do? Well, I mean, this is a legal contract that you signed and it said, hey, you get $26,000. What was this for? Relocation? Yeah, relocation. And if you leave within the two years, you owe us this money back.

Correct? And so you broke that contract and there are consequences for breaking contracts. And one of those is you owe $26,000. So what happened to the 26? Did you spend it all? Oh, yeah. I mean, we used it for a relocation. Went from Texas over here. What made you leave three months before the contract was up? I just knew that I wasn't going to be able to honestly fulfill the duties of the role. And the travel just took too much time away from my family. And I wanted to

to be with the family. That's what I prioritized. Okay. But you knew you would owe this upon quitting. Like this wasn't a surprise. Well, yeah. When I quit, my boss said he wasn't sure that they would actually do anything, but he didn't really know. And they enforced it. Yeah. It's with an attorney right now. And they've contacted you and expecting some type of payment. Yeah.

Correct. Other than trying to settle and negotiate, there's no way to skirt around the law if you sign the contract. So your best bet is to go, listen, I don't have $26,000. Are you willing to negotiate a smaller payment to call this good? That's what I would do if I was in your shoes. Do you guys have any money saved, Mark? No, and I'm sure we could talk for hours on our situation, but yeah, we have no money. Okay. How much are you making a year now? I make $100,000. Okay. Does your wife work?

Yeah, she makes about $60,000. $60,000? Okay, so you take home pay $160,000 household income. And what other debt do you guys have? Quite a bit. I would say from credit cards to consolidation loans, around $100,000. Okay, how much is in the credit cards? Right now, only about $14,000. Okay, and the remaining is a debt consolidation loan?

Yeah, like three of them. Yeah. Okay. So, Mark, you realize the decisions you guys have made up until this point with money, not great, right? Is that a consensus between you and your wife? Like how you guys have been doing money isn't working? Oh, yeah, no. Yeah, 100%. Okay. Okay.

And I hate that this 26,000 will be added to this list. I'm afraid it will be. I mean, there's nothing unless they will settle. Like George said, I think you guys are just going to be on a hard journey here for the next few years, digging yourselves out of these mistakes. And listen, Mark, nobody's perfect with money. So that's not a shameful thing. Like nobody's perfect. Right. Before you came on, we talked about how Dave went bankrupt, you know, got foreclosed on by doing bad investment deals. Like everybody,

From one extreme to the next, like nobody here is perfect.

But also you have to realize, okay, what we've been doing isn't working. And so now we have to change not just our mindset around how we've been looking at money because it's not working, but we're going to change our habits. It's going to feel different. Our life is going to look different. But something has to change in order to get a different result. And you guys have to get at that point. We call it the sick and tired moments around here that people get to this point where they're like, I'm so done. I'm so done. And Mark, I hope this $26,000 thing

You know, situation is the thing that just shakes you to your core that you're like, holy crap, we can't keep doing this. Because so far you've tried debt consolidation, trying to move your stuff around for interest rates and for all the other reasons people do it. But you have to realize what's going to change your situation is you, Mark, you and your wife, not some company out there.

And so that's going to take you guys learning a new set of principles and a new set of skills. But that is very possible. And I want that for you as we sit here on this call. And you have to want it for yourself. But but to answer your question on why you called in, I don't think there's there's much you can do with the twenty six thousand unless they'll settle or try to get on a payment plan of some sort.

to pay this over time. Yeah. But the good news is, Mark, you guys make $160,000. So let's just lay out some napkin math for you. If you're able to live on a smaller portion of that and throw 50 a year at your debt, you're done. Two and a half years from now, you're completely debt free. Even the relocation money. Think about that.

Yeah. That feels like a long time, but you could just sit around for two and a half years and continue to move around debt with consolidation loans, or we could really make some deep sacrifices and be done and have freedom in two and a half years and never touch debt again. That would be my goal for you personally. Yeah, that would be amazing. The math says it's possible, but you have to believe it's possible, and then your actions have to follow.

Okay. So that's the plan. There's no way around it. I'm sorry you're going through this. It stinks, but I hope it's the wake-up call you needed to go. We've got to clean our life up. Yeah, and stay on the line, Mark. Austin will pick up, and we're going to give you Financial Peace University, which is our seven-lesson course online.

And Every Dollar Premium, which is our budgeting app, which is going to help you guys look at your lifestyle and say, hey, we're doing nothing. Like we say, beans and rice, rice and beans. You don't go out to eat. You don't go on vacation. You do nothing. And there's going to be an extremeness to all of this because...

I mean, 14,000 in credit card debt, for the most part, I'm going to assume, Mark, that, yeah, a lot of that's just the lifestyle creep of like, we're just going to continue to live and spend where we want. And you have to get to the point, you say, all that's done. All that's done. And it's a hard line in the sand. You cut up the credit cards tonight. You and your wife sit down together, cut them up. Be done with this, Mark. Be done with this. I mean, I can only imagine the stress that you guys were in already with 100K in debt. Yeah.

And then you get this call from this attorney of this, yeah, relocation fee. That's that cost that's owed now, which legally it is owed. And so I want this to be your wake up call. We can't force that on this side of the desk. We are not lawyers. So good luck with that. We want it for you, though. We want you and your wife and your family to experience freedom. Life's too short, Mark, to be living like this. And I think that for a lot of you out there, it just takes...

It takes an extreme mindset shift, though, and an extreme way of looking at something so different than how you've always looked at it. And that's one of the hardest parts, George, for people. It's just the change. Like, it's going to feel uncomfortable not living with credit cards. You're enjoying extreme spending and now it's extreme sacrifice. Yes. And it's going to it's going to feel off. It feels like you're going backwards.

But I'm telling you, if you stick to this, watch these videos and Financial Peace University, do the every dollar budget, you and your wife together. And in two and a half years, as George laid out the math, you guys can be done and have a whole new set of skills for investing and building wealth and changing your family tree. So we're cheering for you, Mark. Thanks for the call. Thanks to all the gentlemen in the booth keeping the show afloat. And thanks to you, George. Thank you. Thank you, America. 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 amazing relationships. I'm Rachel Cruz, hosting this hour with bestselling author George Camel, answering your questions. So give us a call at 888-825-5225.

All right, let's hit the phones, George. Let's hit it. Go straight to it. Let's go to Tori in Louisville, Kentucky. Hey, Tori, welcome to the show. Hi, thank you for taking my call. Absolutely. How can we help?

Well, I have some, well, I need some advice on what you all would suggest my husband and I do to pay off our debt. My husband is currently working two full-time jobs and going to school. So we are making the most we have ever made. However, we are both miserable because he's never home. And I have taken on the majority of the housework with our children. And I also work.

So my question is, do we power through like we're currently doing to pay off our debt quicker? Or would you suggest that he scales back on his work? We buckle down tighter on our budget and pay off the debt, which might take a little bit longer. How much debt is left? We have $75,000. Okay. And how much are you guys making currently with him working two jobs, you working a full-time job?

We bring home an average of $10,000 a month. Okay. What kind of debt is the $75,000? We have two car loans, a home equity loan, two credit cards, and then one student loan for him, but it is deferred at this time, but it is included in that $75,000. Okay. What's he going to school for? He's a nurse practitioner. Okay. So when is that over, that schooling? Two and a half years. Okay.

Okay. He's working two full-time jobs while becoming an MP? Yes. This man's impressive. So he is. He is a firefighter, so he actually does 24-hour shifts. Goodness. On his days off, he teaches at our community college. He teaches the nursing classes. So by the time he gets home, he is exhausted. It really has affected our whole lives, our marriage, our children, our health.

Sure, sure. What's the current trajectory? If you keep all of this in your life, how soon will you be out of debt? That is a good question. So we recently have not been great with our money. So we recently, just January 1, started working with a Ramsey coach on our budget. So we've completed Baby Step 1. So I'm not, I would think within probably 18 months, maybe. How much are you throwing at the debt total, including extra payments?

Well, we've just hit baby step one. So you guys have been working this much. Where was the money going? Out the window. So did you increase your lifestyle as he took on the extra jobs? I mean, we did. So we we bought the two vehicles. I would sell these these cars. I don't know what they're worth and what you owe on them. But that feels like a better sacrifice than losing your husband right now.

Sure. Yeah. What are the car numbers for us real quick? So my vehicle, we owe about $23 on it. Okay. I recently looked at what it was worth because I was considering selling. Upside down, probably. Yeah, about $2,000 upside down. It's about $21. Oh, okay. So it's not huge. Okay. Now, my husband, he purchased a truck, and it is huge.

It is the worst thing we've ever purchased. It is the worst lemon ever. He doesn't even feel comfortable selling it to anybody. So he's just kind of driving it around as little as he can. How much is it? We owe $6,800 on that. Okay. Okay, that's okay. So you think it's worth about that if you're lucky or what? Oh, he doesn't even think we could get that out of it. Okay, so Tori, how long...

Sorry, how long have you guys been on the schedule, the 90-hour-a-week schedule? He's about two and a half years. So why, Tori, I'm a little bit confused because usually when we talk to people on this show, just in this perspective, they're working two, three jobs. They're going crazy because they're putting extra money to the debt. They're doing it for a reason. Why did you guys choose to do this lifestyle two and a half years ago, working-wise? I think we were just...

You know we weren't good With our money at that point Okay So it was just to keep Your life afloat Yeah just to keep going Okay okay Because what I would say Tori Is that this level of sacrifice We've seen people do it And they do it For a period of time Maybe not Maybe not two years But you know A good six nine months And then maybe they take A break for a little bit Then bring on an extra job To get out of debt right They're doing all this For a purpose And then they're

So if that was the case, there's a part of me that would say, okay, you know, if someone was calling in and they hadn't done it yet, but they're like, we're looking into this. If we just power through for two years, we could get all this cleaned up. Like, I feel like I would be like, yes, yes, yes. You guys have been doing it for two and a half years just to keep your lifestyle afloat, which obviously is more of a lifestyle than what you were, you know, expecting because you guys went into debt for it too. Yeah.

And so I don't want you, I don't, I don't want 90 hours a week to be the norm on how to just support your life. Right? Like that's not, I don't want you calling us two and a half years from now being like, well, we still have 75 in debt and he's still doing this. So we need an end game here. And that's what we're trying to show you. And based on math, if you bring 10 home a month, you said, can you put five of that toward debt? Cause that would get you debt free in 15 months. And like, like live on nothing, Tori, like nothing. Yeah.

So, yes, we could. I did what our four walls payments would be, and it was about $4,000, $3,500. Perfect. So that means there should be, in a perfect world, $6,500 of take-home pay left to throw at debt with minimum payments plus extra. And once you do that math with the debt snowball calculator, you should be debt-free in a year. Yeah. Yeah.

I can do about anything for a year. And you're calling us, though, two and a half years after all this. So you guys are exhausted. Like two and a half years of nine. I mean, like that's it's not sustainable long term. Right. That's how you guys are doing it. It's not. And I wouldn't recommend that long term for anybody. The second full time job. Would it just take an extra year? Because I'm OK with that. If this takes two years for you guys to clean up and you survive it. Yeah. Yeah.

Yeah. But here's the deal, Tori. I'm like, you guys have to be so committed to this process because if you're not, you will look up in two years and

and hadn't made much of a dent in this if you're not really committed to that process. And maybe you guys stay on, Tori, through the summer. And maybe in the fall, he pulls back. It doesn't have to be today. But you guys kind of do a game plan and just say. But we understand. We're parents. We're human. We know that...

It takes a lot of sacrifice, and we don't want your mental health to be an issue. We don't want this idea that parents are just workaholics and they're far away, but people do all the sacrifice and do what you're doing for a goal of becoming debt-free so that they don't have to do this anymore, right? So there's a reason for the sacrifice, and we're all for that.

but you guys have been doing it for two and a half years and you haven't made any progress. So my fear is if you kind of pull back from the work side...

you know, have your money habits really change. So I would just, yep, tell you guys, if you can do it for a little bit longer and maybe bring in some of that income and then really get into the habit of budgeting, living on nothing, putting money. And once that habit really is instilled, then maybe you pull back a little bit from work knowing it's going to take you a little bit longer because I don't want you guys, yeah, to be suffering for too long. It's unsustainable. That's right. Yep. But you guys got this, Tori. You can do this.

This is The Ramsey Show. One of the principles that we really push people towards is savings. So whether you're saving for an emergency fund, saving up for a down payment on a home, for a purchase, buying a car, vacation.

and where to put that savings is a question, George, I feel like I get a lot on social media and different things. Probably the number one question I get in the DMs is, what's a good high-yield savings account? You guys talk about this. So we're going to talk about what a high-yield savings account is and the pros and cons. You just went to the punchline. Oh, I ruined it? Here, back up. All right, go again. Back up 10 seconds. So people always ask, George, on social media, where should I save this money? Should I save it in a...

Just a savings account? Under a mattress? Do I... Invest it? There's high-yield savings accounts. There's money market accounts. There's all these places. Do I invest into the market? What do I do? And one of the places we always talk about investing is... A high-yield savings account. Oh, that's right, George. Why don't you tell us more about that? I'm just so excited. It's one of the things I love the most. Couldn't wait to talk about an old high-yield savings account. But no, it's a great spot. We call them HYSAs or...

Heises for short. No. No, no one calls them that. It's fine. God bless. So this is just literally a high interest savings account. They're generally online banks because the brick and mortar banks can't afford to dole out as high of a rate because they've got a lot of overhead to pay for. That's right. So traditional savings accounts average about 0.35%.

on savings. But plenty of high-yield savings accounts offer rates of over 4%, even over 5%, which is amazing. Yes. Yeah, it's been incredible. And even when all the rates, mortgage rates, you know, everything has gone up, debt, all the things...

Silver lining, savings rates go up.

You can get your money out anytime. For some accounts, you have a limited number of transactions you can do per month, so you can't use it as just like a full-on checking account. But it's pretty easy to access. Yeah, we use Ally. Yep, I use one called Marcus by Goldman Sachs. Again, we don't have a Ramsey partner advertiser in this space, but these are just the ones we personally use, so we can tell you at least that much. And the key is to do your research on these. I don't trust the ones that are offered by credit card companies or Apple, which...

makes you have a Apple credit card to use their savings account or Capital One or one of these companies, the big banks. And so while these are huge companies, you know, Marcus by Goldman Sachs and Ally, I have not noticed they've been marketing debt products or using my information to sell me those products. That's fair. That's a key here. Yeah, we would say, though, this is not a place to park your money long term, right? So investing...

Don't mix it up. Savings is not investing. That's right. Two different things. Even if you're getting some interest. Yeah, and I always say, George, my rule of thumb is kind of that five-year mark. Is that yours or is yours shorter, longer? Yeah. What do you think? I'd say depending on the situation, three to five plus years is that's, I'm going to invest that money versus parking it

Yep. But, you know, home down payment, what worries me, Rachel, people want to invest their down payment. And I go, yeah, but three years from now, what if the market took that dip at the worst time when you want to buy that house? Yes, yes. The 50 grand turned into 40 grand all of a sudden. So that's risky. But a good example of this, let's say you are going to buy a house and you have $10,000 saved in a high yield savings at 5%. Well, over the course of 12 months in your sleep, you're going to make $500. If you have $100,000,

doing the math, at 5%, that's $5,000 over the course of 12 months that you would gain. And a good point, Rachel, here is that income is taxable. People don't realize that. Now, it's not the end of the world to get taxed on $500 or $5,000. Right, but the interest that you're accumulating, yeah, that's a great point. This is not free money. Yeah, that's a great point. Yeah, and the emergency fund specifically, you guys, that three to six months, like this is a great place to park that. And while we say it's not an investment, you want to be able to get to it quickly, so you're...

Your worry on that is not, oh my gosh, am I making a high rate of return? It's really just the idea that it is cushion. I can get to it if I need it. Something big comes up, a job loss or a medical emergency. But while you're at it, you might as well put it in something that's low risk and still make something, right? So versus just putting it in a traditional savings account. Yeah, high yield savings account's great. But remember-

Your emergency fund is insurance, not an investment. This is money that's made to protect you. It's not made to make you more money. So don't be freaked out if you're not getting a certain interest rate. At the end of the day, it's not going to be life changing. That's right. But I think it's a great option. And right now it's the highest rates I've seen. When my wife and I were saving up for a house, interest rates on savings accounts were 2%. I was jumping for joy.

Yes. Because of all the free money we were getting from this 2%. So now that it's 5% or more, goodness gracious, I have a lot of, you know, it's a great time to be saving up for things because of that reason. That's right. Exactly. Yep. And you guys, the way to find savings, one of the best things you can do is be budgeting, making sure you see, okay, here's my income, here's everything. And when we talk about, you know, giving, saving and spending and what that looks like and to really be intentional with putting money aside, letting that be a habit. And so if you

have never budgeted before. Maybe you are a budgeter. I really recommend downloading EveryDollar. It really is the best way. There's a savings category on EveryDollar. Yes. So you can kind of automate that and go, all right, we're going to do a direct transfer from our paycheck or bank account to our savings account every month. Yeah. And the budget will help you track that. And it's all right there. Yep. So EveryDollar is amazing for budgeting and to get you in a position to

to be able to say, yeah, we actually can find margin here and save some money. Again, for whether it's a car, vacation, down payment, emergency funds, a high-yield savings account, it's a great place to park that short-term savings. To make sure they are FDIC insured or NCUA if it's a credit union. That's a good point to call out. So when you're on the website, which the ones we mentioned are, but you want to make sure that it's insured. I think it's up to $250,000 per depositor. So that's pretty sweet. It's good. All

All right, let's go to the phones. We have Aiden in Dallas. Hey, Aiden, welcome to the show. Hi, thanks for taking my call. Absolutely. How can we help? I'm just getting ready to purchase a new truck. I'm just trying to figure out what... Truck, yeah. Oh, George loves a truck, Aiden. How much I can really afford when it comes to being a truck, buying a truck for what would be smart. All right. How much do you make a year, Aiden?

This year, I will gross anywhere in between from $95 to about $115. Okay. Amazing. And what debt do you have? My current vehicle will be paid off in about two months. I owe about $300 to my Mac dealer and a little under $500 to my Cornwell dealer. Okay. And how much do you have in savings to buy the truck? $115.

I have about eight, but I'm trying not to touch that so I can keep on growing that for down payment on a house. $8,000? Yes, I plan on trading in my current vehicle. Trading in for another truck with a payment on it? Yes. What kind of truck are you going to buy? I'm still trying to build my credit. What truck are you looking to buy? I'm looking to buy a 2500 or a 3500 diesel. What year?

Early 2010s to late 2010s. Okay. And what is that going to cost, do you think? It all depends. I can get the trucks I'm looking at, I can get one for anywhere between about $20,000 to $40,000. Okay. That's a big range. Well, Aiden, you're probably not going to like our answer today.

If you listen back to this call, Aiden, you're going to hear that you have a lot of priorities right now, don't you? Yes. You're trying to pay off debt. You're trying to buy a house. You're trying to get this truck. And I found that when people are doing too many things at once, they don't really make progress on any of them, and it usually leads to poor financial decisions. And right now, you can turn the ship around pretty quick. I mean, making $100,000 and you've got, what, a few thousand in debt left? Yeah.

Yeah, not much. And so we can clean up all of your debt within three or four months? Yes. And in fact, you have $8,000 right now you could use to pay off the car and pay off all of your debt. You could be debt-free today. Yes. And that would leave you with how much in savings still? A few thousand? Yeah.

Yeah, a few thousand. There you go. So that's going to be your starter emergency fund. Yeah, that'll be your starter emergency fund aid. And then whatever cash you have beyond that, you can put with the truck you're going to trade in and you only are going to buy a truck that you can pay for. No more payments because...

debt is stealing this income. And especially with a car, you are taking a loan out and paying interest on an asset that's going down in value. Mathematically, it is not a smart move, Aiden. So I would stick with the truck you have. Pay it off. Drive that for a while. Save up and pay cash for your next truck. Six months from now, you're going to be able to save up and pay cash for it. Yep. Don't let the bank steal all your income, Aiden. Don't give them payments.

So one of the things we love to do around here, George, is put on events. We love a good live event. We love a good live event. Our team is really good at them. Yes. Some of the best events in the country. And sometimes we're out traveling to different cities. But this is a good live event.

But this time, George, we're going to do one in our backyard. Literally. Here at Ramsey Solutions up on the hill in our new event center. And we are doing the Total Money Makeover weekend, you guys. This is going to be a full weekend on May 10th and 11th. And we are going to help people when it comes to the subject that we talk about all the time, which is money. So actually, the night before on the 10th, George and I, we may or may not be doing a live recording of Smart Money Happy Hour, our podcast episode.

So you can come and participate in that. And then an all-day event that next Saturday with all the Ramsey personalities. And it's going to be really fun. We're going to talk through, obviously, the baby steps and different parts of your money and your life. And we're going to do lots of Q&A as well. We find that people have questions.

Whether it's specific situations or even, you know, just the generic problems that we all run into when it comes to money. But to be able to have conversations with you guys throughout the weekend is really important to us. So it's going to be really fun. Our labor tickets are only $99 only for a limited time.

And if you want to get the best deal on tickets, again, this is it. So go ahead and buy your seats, buy your tickets, because we only have 2,400 available. And so you can do that at ramseysolutions.com slash events. Love it. People come from all over the country, even the world, to Ramsey.

come to these events, which is so amazing. So go start budgeting for the travel and transportation and lodging and all the fun stuff. And Nashville is a great place just to hang out. So extend your trip and enjoy it while you're here. RamseySolutions.com slash events, May 10th and 11th. Looking forward to that. Yes. Love to hang out with you guys. All right. Up next, we have Sarah in Charlotte. Hey, Sarah. Welcome to the show.

Hi, thank you so much for having me. So my question for you guys is currently my husband and I are renting an apartment for about 32% of our

net income. And in order to get closer to that 25%, we have to move to a low income house, like a low income community. And I'm not sure if that's wise, you know, because sometimes crime is higher in low income communities. I just wanted to know if you guys had any takes on whether we should

jump from our 32 to 25% by finding a cheaper apartment in a low-income community or what you think. I appreciate your intensity for the plan, but that 25% is really a guideline and it's not a set in stone. If you're at 26, time to move, bucko. So I don't think this is on fire. You guys sound like you're doing a good job paying attention to every dollar. And my assumption is your income will go up over the next year, correct? Correct.

Potentially. My husband put in some applications to become a police officer, and it could potentially go up a little bit, but it's going to stay about the same. Okay. Yeah, I mean, I would say, Sarah, I mean, obviously we don't want, you know, you in a situation that maybe you feel unsafe or whatever, you know, it may be for you. I mean, yeah, you want to be able to find a place that you feel good at. And I would say, too, that, you know,

Just because a situation is different doesn't always make it bad, right? And so I think there can be some places that you may overlook

Because of just the thought of, oh, gosh, you know, the high crime or whatever it may be. But to really do your research and dig in because there's parts of cities, you know, that may be lower income, but they're great neighborhoods and great people and all of it. So I would I would do my due diligence to really look and see. I mean, ultimately, I want you to feel safe. I mean, I think that's a that's a that's a fair value to have in life.

But also, you know, to maybe look at, yeah, maybe our life, maybe where we are though, where we live will look different than maybe what we thought because of our income. And George is right, like that 25%, it is a guideline there. But when it starts to creep up in that 35, 40% of your take home pay, that's what it does. It just limits the amount of income that you can use for other things like getting out of debt and investing and all of that. So how much do you guys make in a year?

We make about $55,000. Just my husband works and I'm a stay-at-home mom. Okay. How old are your kids? My son, he's almost two. Okay. That's great. So great. Yeah. So, I mean, I think you guys talk about it. Look at the budget. Do you guys have a lot of debt? We do, but luckily it's just to a family member who paid off our debt. Okay. How much is that? We don't have, it's almost $50,000. Okay. Okay. And are you guys working on getting rid of that?

We are, yeah. Okay, that's great. Yeah, and once that's freed up, that's going to feel like a breath of fresh air. Is it a monthly payment you're making? Yeah, we're trying to do a monthly payment, and it's pretty low right now. If we keep, right now we're only...

uh trying to give about 250 a month so that'll take us like 10 years to pay him off goodness gracious yeah i wouldn't do that i would be changing something in that formula which is probably going to be the income um on making more i mean you know and what's so hard sarah is um you know

Math, it is what it is, right? And so being able to look and say, okay, this is the amount of money that we have. And so we want to be wise with it. We want to be on a very strict budget and know exactly where that's going. But I also don't want this debt hanging around you guys for 10 years to a family member. And even though they're probably not charging you interest,

From a relational standpoint, it just gets weird over time. And so... They'll see you go on vacation and go, whoa, whoa, whoa, they owe us money and they're going on this trip? Yeah, that's right. Even once you're out of debt. So I would just make a plan to pay that off more aggressively and that might mean making more income. But the point of the 25% guideline is so that you're not house poor, is so that you have more money to pay off debt. And so again, nothing's on fire here, but I would make a plan to increase income over the next 12 months.

to create more margin to get rid of this debt faster. That's great. All right, up next we have Larry in Evansville. Hey, Larry, welcome to the show. Hey, guys. Thanks for taking my call today. How are you doing? We're doing great. How can we help?

So, I recently found you guys and I'm really trying hard to figure out budgeting type things. I grew up in a family that, you know, didn't really care about it, you know, and I'm trying to figure it out and I've looked at every dollar and I'm just overwhelmed with things. Like, I try and budget and then something comes up and it's just very overwhelming and it's just, I'm to the point of, I'm tired of, you know, living every paycheck to paycheck and, you know, the next week I'm broke and

It's just hard. I just need help budgeting. I need to figure out, like, where do I start? What's the problem right now when you say, I feel broke? Are there too many bills after your paychecks show up?

So what happened is, you know, a couple of years ago, I got, I did some bad things. I got addicted to some things after an accident I had. And, you know, I screwed up our family. When I did that, it meant a lot of death for my family. I'm sorry. And I'm trying to get out of it. And I try so hard. I work, you know, 65 hours a week.

And it's just, I don't know. I honestly can't tell you exactly where it's going. You know, I am paying down the debt that I'm doing, but then also, you know, car repairs come up. My kids need something. Yeah. Yeah. How many kids do you have? I have three. How old are they? Two, five, eight. Wow. So you guys have been through a lot, Larry, over the last...

Wait, how long has this journey been for you guys? And are you sober now? I've been sober for over a year now. A great guy from Boston, you know, took me up there and helped me out. And it's just the last six years before that, you know, I was working, but I'd leave the job because, you know, something would happen or I wouldn't go to work. And, you know, I'd get behind on things and, you know, I'd say, oh, I'll push this off for now. And it's all just coming back to haunt me. And,

I'm trying so hard to budget money. Yeah. So Larry, we're coming up on a break. If you'll hold on the line, we'll come back to you if that's okay in our next segment, just to kind of walk through more of your story and to help you with just the overall picture. Cause I think budgeting for sure is a piece of it. Um, but there's a lot of life in there and possibly some debt and we can run some numbers and kind of help you walk away with a game plan. Does that sound good?

Yeah, I appreciate it. Okay, absolutely. So hold on the line. Yep, hold on the line, Larry. And you guys listening and watching right now, we will be back. Welcome back. We were just talking to Larry this segment before, and he was asking us really, how do you start budgeting? What does this look like? If you're just new to this process, what's it like?

Because it just feels like something always continues to come up. Car repair, something for the kids. Yes, throughout the month. And they've walked a hard journey, he was telling us, with just some addiction. And he's been sober a year. And they're really trying to get in this place where they can get control of their money. Was that a good summary, Larry? Yeah. Okay, wonderful. Okay, so tell me this, Larry. How much do you guys make in a year, just household income?

Uh, so, uh, my wife makes about 30, about 28 before taxes. Um, and then me, uh, you know, I just started back working about a year ago and this past year I made about 51, you know, consistent saying, you know, with the same employer. That's great. What do you do?

I work in home health care. I work with mentally handicapped individuals. It's something I've loved for a while. Yeah, that's great. That's great. So you guys are making around $80,000, $81,000. And what debt do you guys have?

So we have a car that got repoed a couple years ago because of me that I'm working to pay off just to get that out of there. We got my wife's car now that we had to have because we had to have reliable transportation for her. How much is that? It's about $8,000 right now. $8,000, okay. And how much is it that you're repaying for the repossession?

I'm about 14. Um, okay. I bought it for about 16, but, uh, I was 14 and, you know, just basically stopped paying. Yeah. Okay. So the two cars, what else? And then, uh,

We have a combined between like just little loans that we tried to get to get by, you know, and loans to family. We have about, you know, 15 there, you know, and then medical debt. We have about 6,000, but I'm trying to get some assistance from like their financial aid there. But, you know, that's just a process of trying to get that figured out right now. For sure. Anything else? Any credit card debt?

That's in with like the 15, you know, there's some credit cards, which is about, you know,

1500 of it. Okay. The rest is loans, but like family, little loans just here and there that, you know, I thought would, you know, get me by to where I need to be. And then I found you guys and, you know, realized that like, there's something I'm doing wrong. And, you know, I finally built up the courage and then off the embarrassment that I have to, you know, call you guys and, you know, figure it out. And yeah, I'm tired of it. Yeah. Yeah.

Well, I'll tell you this. I think you've won probably the hardest battle. Money is nothing compared to fighting and becoming sober and walking that whole journey, Larry. So if you can do that, you can do this. Okay. So just hear me say that. It's an amazing thing when people find...

and one area of their life, it seems like it opens up the door in other areas that they long for that same level of peace and freedom that you've found in that part of your life. And now that's transferring to your money. And money was and is possibly in the present still a stressful place. But we want to be able to walk with you and give you just some peace for a plan. And I think it's one of those things too, Larry, that it can carry a lot of shame and a lot of guilt because...

The hard thing with money is that you see the numbers of the past that stay with you and you have to, you know, face those and figure out what to do. But but just know what you've done in this last year. You can do this like you guys together can do this process. Is your is your marriage in a good spot? You and your wife, are you guys on the same team? Just at least from the financial standpoint that you guys are wanting to work a plan together? Yeah.

Yeah, I mean, we've talked about it a lot, and she just, you know, not the best with math, so she leaves it up to me. I don't want to, you know, stress her out too much, but, you know, I talked to her about it, but I'm just still ashamed of it to, you know, talk too much. Okay.

Okay, so what I would suggest as we start working through the budget is I do want her to be involved. And she doesn't have to be the one that is all excited about it and gets in there every day and all the things. But I want you guys to be in a constant communication and be on the same team because that's going to help with these day-to-day things. Because if the kids pipe up and want something, there's a good chance you guys are going to look at them and say the famous words I always heard growing up.

It's not in the budget. It's not in the budget. Like there's going to be times that you guys as a family are going to have to make some hard decisions to make these numbers work. And that's part of the process, right? That you're, that you're learning how to do this and define margin. So, so in every dollar we talk about, yeah. And as you said, you've walked through it, but,

your income minus those expenses equaling zero and we have on every dollar premium which we'll give you after this call if you don't have that one already it's our paid subscription part of every dollar but what's so great is they have a payment a paycheck planning application within it and so what ends up happening larry we find that what's difficult is you plan out your month and you say okay we're going to spend you know 600 on groceries and then but then all of a sudden

The mortgage or the rent hits, the electricity bill, like how all the bills are lined up, one paycheck of the first isn't going to cover it all, right? You run out of money before those bills are paid. That's right. It'll help you figure that out. Yeah, and it feels like you're broke in that sense. And so what the paycheck planning part of EveryDollar does is it's able to show you, hey, here's where you're getting close to the red. So what can you rearrange in your budget to make sure that that paycheck goes as far as you need it to go?

with some cushion even till you're paid again on the 15th or however often you're paid. And so that that money then is going to be able to take you through it. And then there is a goal, Larry, I would say from budgeting, at least for me, George, is that you're kind of a paycheck ahead. So you always have that cushion. So instead of using the money that just hits your account, you're kind of using the money from the paycheck before even just to give you some breathing room

to not feel like, oh my gosh, our count is getting down to zero, right? And so that may take a few paycheck cycles to get in that place. But do you guys have any money saved at all? Do you have an emergency fund?

No. I've been trying and anytime I do it and then something comes up. Yeah. What are the things that are coming up? You've mentioned that a few times. What are those kind of things? Just at the beginning of the school year school, my son has gained weight and lost a lot of weight. So we had to buy him a whole new wardrobe of clothes and

His mother, who is not my wife currently, you know, there's just a lot of, you know, stuff going on there. Like she, you know, I feel like sometimes I have to replace her because she's chose other people over him. And, you know, I try and overcompensate. I'm not going to lie to nobody. Yeah. And I'm trying to get past that. But yeah, I hate seeing the way he's broken because of it. And yeah, it's just messing with me. So, yeah. Yeah.

Which is very understandable. I mean, I see that. And we see that a lot with families that there is that overcompensation of buying things for kids or wanting that. And I'll tell you, Larry, though, at the end of the day, what he needs and what he wants is love and acceptance from the people in his life. And that's you.

And so, I mean, and so that that is something that you you are going to have to be the adult in those situations and say, you know, that this toy is not going to be the thing that brings him lasting joy and acceptance and love. Like it's it's just not. And so knowing that, even though it is so easy just to run to stuff and buy stuff to make someone feel good for a moment.

You know, there will be a boundary there. So I think that there's going to be a level of discipline that you and your wife, I want you to get on the same page with her and say, okay, you know, once we do this budget, it's done. And the kids are going to ask, stuff is going to come up and we have to say no. We have to stick to this because I want you to get $1,000 quickly. If you guys don't have any money saved, even getting a starter emergency fund of $1,000, it's going to free you up. And as you go through every dollar,

Again, those are places where you're going to be able to say in categories, okay, we used to spend this much and not to eat. We're not doing that. And we're putting that aside here. Like you really do sit there and take things away, lower those expenses. And then for you, if there is a way to up some income for the season, I think it's one of the best things that you could do just to bring in some extra money to get that thousand dollars and then start working your way through this debt and working your way to pay this debt off.

And, I mean, there is hope in this. I mean, we get these calls all the time, Larry. You make 80 and you owe 43. This is a very fixable problem. And it might take two years, but we can get out of this. That's right. So tactical things, Larry. You can add a miscellaneous category to the budget for some ankle biters.

You can also print out your bank statement, and that way you'll see a real picture of what was spent in the last few months. That's going to help with this budget as well. Yeah, and give it three months, Larry. I mean, we're in February, March, April. Give it April, May. Okay, don't give up. Keep sticking with it. But hold on the line. Austin will pick up. We're going to give you Financial Peace University, our seven-lesson course on money and every dollar premium just to make sure that you guys have the knowledge that you need as you start this journey. We're cheering for you. 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 amazing relationships. I am Rachel Cruz, and this is George Campbell, and we are hosting this hour of the show, and we're taking your calls at 888-825-5225.

Talking about your money, your life, your relationships, your work, anything and everything. We are here for you. So first up, we have Jennifer in Ventura, California. Hi, Jennifer. Welcome to the show. Hey, guys. Thank you so much for taking my call. Thank you for all the work you guys do. I'm so blessed to be on the call. Oh, thank you. Thanks for calling. How can we help?

I guess I kind of have a key. I'm brand new to you guys. Shout out to Ventura, Mission Church Ventura. I will be doing DBSX 3 lesson on Monday. So I'm like brand new. That's with Rachel and I. We did that once. Yes.

I kind of took a sneak peek. They gave us the little barcode thing where we get it for free. Thank God. Oh, that's awesome. I took a sneak peek, so I saw my favorite speaker, George. You're my favorite. Cheers. George. He wins the hearts of many. Truth be told, I told Jennifer to call because she had a great question for Rachel. I was like, you need to call. Rachel's going to crush this question. Wait, with what? Rachel's going to crush this. Okay, so check it out, Rachel. Okay.

I kind of have a case of, like, family FOMO. So it's not keeping up with the Joneses. Like, I drive an old van. I've got old stuff. I learned my lesson. I'm listening to you guys. I didn't know. I'm 37. I'm, like, way behind, and I did not know any of this. So I'm, like, lifetime learning it, and I'm binging it, right? But I've got one of those super close families, kind of intrusively close families. Like, we...

we do everything together where we have like a Facebook messenger, kind of like a group thread, email chat thing where we're like, it's literally like, Oh, Paisley woke up with a fever today and Ben got in trouble with school. It's like every single thing like in each other's grill. Um, but that also includes like, um, like let's do everything together. Like every single Sunday, let's have family dinner, especially cause my dad passed away.

It's been like every Sunday, let's go to Nana's house and don't show up untended. Like, what are you going to bring? Are you going to bring ribs? Are you going to bring this? And I'm calculating this in my head. Like, there's like 18 of us. So for me to sign up for drinks and buy everybody their favorite drink, I'm like way over, like I can't. So oftentimes I'm like, oh gosh, sorry guys, I'm volunteering at church. And I like to pass.

And then I get the whole, like, under the breath, like, oh, well, too bad you can't, you know, your kids are missing out on family dinner and all that stuff. So I'm just at a crossroads, and I've got that crafty sister that's always like, we're going to the zoo. And I'm like, I can't afford the zoo. Oh, there's a Groupon. Okay, well, it's a gas. And it's like, you're taking time out of my side hustle. Like, I can't do it all. And my kids see it. The cousins show them the pictures. They all talk about it. Like, oh, look where we went. And my kids are like,

why can't we go and i'm just i'm just at that point where there's only so much i could tell like let's be content kids and my kids are like i don't i want to be with my family you know how old are your kids so my son just turned nine in january and my daughter will be 11 in may okay well i think what's hard jennifer is what's happened in your life is you've shifted

a perspective, right? You've shifted how you're viewing money. You are shifting something. You're changing something about who Jennifer was nine months ago, 12 months ago into, you know, a new season, right? And I think, you know, we always parallel the financial world with even the health world, right? It would be the same thing if it was like, oh my gosh, we're going to

you know, go, I don't know, eat a bunch of pizzas. You're like, well, I'm gluten. George would have to say, no, I'm gluten free unless they have gluten free crust. I can't go. You know, like some people, even with their nutrition, right? They draw boundaries on what that is. And I know money's a little bit different, but

Anytime you change of what you're used to, what people expect of you, the normalcy of what was is not there anymore. And so I think that acknowledgement is really hard. And it's hard when it plays into these kind of smaller day-to-day interactions with family. And so, I mean, have you just bluntly said to them, hey, guys, I'm living on a strict budget now because I'm trying to get out of debt.

And I can't be doing all of this, but I want to still come to dinner. I'm just going to bring stuff, you know, because we're water people now. And you've got to make fun of yourself and be like, sorry. But I don't want y'all to, like, miss out on all the good stuff. I'm just choosing to miss out for me, but I don't want that to put you guys out. So y'all do you. Y'all plan yourselves. And I'll just bring my own stuff. I'll bring my, you know, grilled cheeses and my water or whatever it is that you're choosing to do. Totally.

I totally, and I have. I've been doing that. I think the bigger piece is the kids. Probably my kids are what's bothering me most. Because my family, like, I'm the only one that goes to church in my family. I'm the only one. So, like, I'm telling them about this Ramsey thing, and they're like, okay. It's another one of those weird Jennifer things that's happening. Well, I think you mentioned to me also that their incomes, they're all making, you know, six figures. They're just at a different place in life. Yeah, and so, honestly, Jennifer, the gift to your kids, even with family, is

is to say, hey, how do we learn to be excited for somebody that has something that we don't have?

And how can we still have relationship with them? Right. And, and I would hope your family would kind of give a nod to where you guys are and be like, okay, yeah, if we're going to the zoo, it is going to cost $30 for everyone to go. So we're going to choose not to do that. We'll go to the park or we'll come over and do a play date. Like what other things can we do that you can be a part of as well? Right. And maybe you throw out those ideas, but I think for your kids and I get that. I mean, I understand you're like, I want them to be with family and all that, but

But for them to start to see that there are boundaries in life and limits in life when it comes to money, and it's not just this endless, you know, way of how to live. You're modeling that, Jennifer. And that's what they're going to grow up with a level of boundaries that's

really great and wonderful. Yeah. But I also don't want you to miss out on family time. So I do wonder if there's ideas that you can even bring to the table to be like, yeah, they don't, you know, I don't want to miss out with you guys. So I still want to hang out, you know, and, and I had a good friend, Jennifer, who was going, they're going through some tight financial spots and, and she was very honest with me and, and I knew, and there was, you know, times that it was like, oh yeah, we, you know, I could,

take my kids to the zoo but we're going to choose not to because we want to hang out with them and I don't want to put her in a bad spot and then also I don't want to feel like she thinks that I have to pay for her all the time you know like there's all you know some of that so I'm like you know what. Thank you for being considerate that's like thank you Rachel. Yeah but. Be the considerate friend. But for real and you and so for your family like you know and not that you can make them do that those kind of things but I would throw out ideas that are kind of

free or less expensive or whatever it is that you actually still get time. I would be like, listen, I'll sign up to clean up after you guys. I'll sign up on dish duty. Thanks, George. Love it. I love it. So that's really good. Be fun about it. And it's only for a season two, Jennifer. This is not going to be your whole life. When are you going to be out of debt? Oh, gosh, probably two years. Okay. They're fine. When I credit my numbers, it's going to take about two years. That's okay. And here's the truth too, Jennifer. I look back, John Deloney probably would like...

shake his finger and be like, that's not right child psychology, Rachel. But I'm like, I don't remember being 8 and 9. Oh, for sure not. Do you know what I mean? Like, your kids are fine. They are fine. They really, really are. They have a great mom and a great life. Yes. And no trip or zoo is going to change that. That's right. Thank you so much. You're doing the hard work. Like, you guys are like my church piece. They're kind of like my family right now. So thank you. That means the world. Add us to the group chat. Add

I know. We can't wait to hear who gets in trouble at school today. That's what we need to do. Add Rachel to the Facebook Messenger group chat. Have her pop in and just smack some people around. Here's five inexpensive things you can do with kids under 10 years old. Just start putting her blog articles on there. That's fun. Oh, Jennifer, we're cheering you on. And remember, it's not forever. It is not forever. This is a season of sacrifice to get yourself in a place where you can go and enjoy and do the things because you actually have the money to do it. So...

Thanks for the call, Jennifer. George, thanks for the DM. Blessed to be a blessing. Yeah, you're just spreading the Lord's work. This is The Ramsey Show. Welcome back to The Ramsey Show. We are happy to be here, you guys. And if you love the show, whether you're a new listener, old listener, been with us for a while, if you will share the show with your friends and family, it helps us out a lot just to spread the word because we want, spread the word we want.

to be in control of their money. Even if you hate the show and you're here listening for some weird reason, just go ahead and share it. Just share it. Spread the hate. Yeah, because at least somebody will see it and they'll think, huh, that's interesting. Spread your hate and dissension and give us more views. I know.

Yeah, and even go on where you listen to podcasts and leave us a review, subscribe, all those things. Just help us out. It's not for Rachel's affirmation, we promise. It just helps the algorithm show this to more people that we can get close to. And we like your feedback. We say that on Smart Money Happy Hour, our podcast. We like seeing what you got. You guys are very vocal and we like to know that. We like to know what you like, what you don't like, mostly what you like, but it's fine. We can handle what you don't like too. But yeah, just spread and share the show for us.

Always helps us out. Thanks so much. All right. Up next, we have Becca in Detroit. Hey, Becca. Welcome to the show. Hi there. My question is about home renovations. Specifically, how do we know when it's the right time? Oh, that's a good question. And do you mean from like a financial standpoint, obviously? Yes. Yes. From the money standpoint. Is this a need or a want?

I'd say it's a want. When we purchased this house, it was with the expectation that we were going to redo this kitchen because it's just really ugly. It doesn't function too well. That's a perfectly good reason. That helps me. It just helps to know, like, is the roof falling off or are the countertops? Yeah. So that's a good, it just helps me kind of use a filter here. Yeah. Are you guys in a financial position, Becca, where you don't have debt? Do you guys have some savings? Yeah.

Yeah. So the only debt we have is our mortgage. We have about $200,000 left on that, but no other debt. And we have $125,000 saved up, which would be by the time the contractors got around to doing the work, the cost of the renovations plus an emergency fund plus a little leftover. Oh my gosh. Amazing. So you just can cash flow it.

Yeah. That's it. That's why. That's when you're ready. Is it a big number? Is it just scary to spend this much money? Does it feel like frivolous? Exactly. It's a huge, huge number. It's a huge number and we're getting it all over town. So we think it's a real number. Yeah. I mean, if you have multiple bids, I mean, labor's up. I mean, it is. Everything is just more expensive in life. Long gone are the days like, 10 grand, can we get a new kitchen? Yeah. So what is this going to cost you?

We're hearing $100,000. For all of it. Are you gutting? Are you moving walls and stuff? Or is it just appliances and countertops? Yeah, it would be a gut. It would be some structural work to support heavier stuff, bigger islands. Yep, yep. And just the labor is really expensive right now. What's the house worth? We're carrying all over.

$400,000. Okay. Because one thing to think about is not that everything has to be about ROI, because you put a pool in the backyard, it may not ROI, and it's okay to just do things for enjoyment, knowing you're not going to get that money back out of it. Look at you being all fun, George. I'm such a fuddy-duddy, Rachel. Unbelievable. But, you know, with a kitchen renovation, it can and will increase the value by a certain amount. I don't know that it's going to make a $400,000 house into a $500,000 house, but...

Over time, it may. But kitchens and bathrooms. Those are the big ones. They are the big ones. So if there's a place to do it from an ROI side, I think kitchen is the best. And yeah, if you guys have it, Beck, I mean, literally, this is exactly the perfect situation to do it. And just for everyone listening, remember, no debt, an emergency fund. They have the cash-to-cash flow it. And that's what we're talking about.

And that's it. There's no HELOC. There's no, we still have our student loans. Take a HELOC to do these renovations. No, and that's what a lot of people did during COVID. And so Becca, you're doing it the right way. You just got to do it. And what's funny though, is like you said, people actually save the money and they're like,

oh man do we really want to spend it on it but what's great about doing it with cash too Becca is you guys well you have your budget and you're going to stay within the budget because I'm telling you you go to the appliance store and it's like oh we can get this you're putting it on credit you're like just get the nicer one yeah you yeah you see it and they're like oh but two levels up oh gosh that's a really nice okay I found out about levels I was like this is a scam

Yeah. Well, you don't want the level two tile, Rachel. That's basically dangerous for your family. You need the level four tile. I know. You can start to... If you use debt, you really can start going over budget because you're like, ah, we'll worry about it later. But when it's your own money and you have a strict budget, you know, okay, nope, we're just staying within this. And it helps keep boundaries on this because home renovations, home building, all of that can go off the rails so quickly. So...

I'm the spender though, Becca. So I'm your biggest cheerleader on this call. Do it and get a great kitchen. We spend so much time in our kitchen. Yeah, send us a picture later so we can see it before and after. So we're giving you the green light, Becca. That's pretty rare on this show that you get a unanimous instant green light, but it's because she's got no debt and has the cash to do it. So great. Get what you want. Stay within that budget. It's exciting. That's great. All

All right. Up next, we have Anthony in Philadelphia. Hey, Anthony, welcome to the show. Hey, thanks for having me. Really appreciate it. Absolutely. We're doing great. Doing great. What can we help you? All right. So my question is, should I sell some shares of stock that I have from my previous employer and my current employer to put towards existing debt? How much debt do you have?

So we have two pretty big sums, not counting the house. We have $14,000 left on a solar and then $38,000 on a car. Okay. And how much would the stock be worth if you cashed it all out? Yes. So I can pull out somewhere around $25,000. I also have about $20,000 right now sitting in a high-yield savings account. How much? $20,000, did you say?

Yes. So 20 in savings. I can get about 25 from the stock. My wife and I do have a plan to actually have the $14,000 paid off of the solar pretty much in about a month or two. We are going to pull from our savings account. We're following the kind of debt snowball method. Yeah, that's great. And none of this is obviously retirement. It's not tied up in a 401k or Roth or anything. Do you have capital gains you'll pay when you sell this?

Oh, Anthony's off the line somehow. Oh, we lost him. Pick him up. He's back. Anthony, sorry, we just hung up on you real quick. No, it's okay. All right, so are there capital gains on these stocks when you sell? You make some money off of it? Yeah. Okay, so I would factor that into your equation. Make sure you're prepared for the tax hit on that. It's not going to be astronomical, I am assuming. You haven't had these stocks super long, and it's not a huge amount.

But I would at least calculate that and make sure that you pay the taxes on that. But that'll at least knock most of the debt out. Yeah, that's amazing. Yeah, because we do say to cash out everything you have but retirement to get debt paid off. And we don't like having too much in company stock anyways. The single stock. Because it's pretty, yeah, it's pretty limited and kind of that...

your all your eggs are in one basket mentality which is not ideal with investing diversification and all that is what we're what we're really going for so um and i tell you that as a person who actually did this anthony so it's not like advice i tell you to do but i would never do it i had apple stock from when i worked at the retail store back in 0809 when it came time for debt payoff i was looking around for money and i had a bunch of apple stock and so i sold that and it helped me get out of debt way faster got me to investing faster got my emergency fund funded faster and i don't

miss having those stocks and the what ifs of like, well, do you know how much that would be if you hung on to that? That's what your friends are going to say when you go and sell this. You kind of have to turn down the noise from all the opinions and inputs and go, I want to be debt free sooner. That is my priority. I can always buy more and invest more later. I'm not going to miss out. Yeah. So Anthony, with your savings and the stock,

It's about $45,000, and you guys have about $52,000 in debt. Is that right? So you'll have $7,000 left to knock out after all this. What's your income? Yes. Household. So my wife is a stay-at-home mom. She works part-time for our church and does pull in a little bit. So combined, we make about $175,000. That's great. So we're talking like two months from now, you're debt-free.

Theoretically, yes, but we have two toddlers and we just had our third child two months ago. So there's a little bit of a fear. Congratulations. There's a little bit of a fear. Okay, so four months. So maybe four months. Give it four. We'll give you four months, Anthony. It's a great question, though. Yep, cash it out, put it towards the debt, and start in...

With a new little baby. You know what? I'm going to send you Rachel's new kids book. I'm glad for what I have for those toddlers and the new baby. Isn't that sweet? Thanks, George. I just thought of it. It's a great gift for the kiddos out there. So hang on the line, Anthony. We're going to send you Rachel's new kids book. It's a great read. Welcome back to The Ramsey Show. I'm Rachel Cruz hosting this hour with bestselling author George Campbell. We're taking your calls. Up next, we have Shonda in Cleveland. Hey, Shonda. Welcome to the show.

Hi. Hi, guys. Hello, hello. Hi. Can you hear me? Yes, we can. We can. Oh, okay. Thanks for calling. Yeah. How can we help? Oh, yeah.

Yes, I have money stress. I have an income of like $22,000, $24,000, but I have two collection agencies. One is $5,000, which I could pay. I only have $2,000 more to pay for that one collection agency, and the other one is $8,000, and I don't know what to do or begin to pay that collection.

That debt. I don't even know where to begin. I haven't talked to that collection agency at all because I don't know what to do because I don't have no money to pay them. A driveway that needs to be fixed, that's like $20,000, they say. So that's an upcoming expense. That's not debt, right? Yeah, that's an upcoming expense. Okay. What other debt do you have?

I have student loans that's $50,000, a car loan that's $11,000, a home loan that's $75,000, and I was like one month behind. I think I just caught up. Let's see, credit card, that's $200,000.

$200. Dollars. Dollars of minimum payment or that's the total? Yeah. No, that's the total. So I was going to pay them off when I, next time I get paid. Okay. How old are you? I'm 33. Okay. What are you doing for work right now?

That's an assistant, but I feel like I'm overwhelmed. I don't know what to do, and I know y'all say don't play the lottery, but I've been trying to do that. Oh, no, Shonda, don't step in the convenience store, a gas station. Stay far away. How many hours a week are you working? That's right. Like 40 hours, and then sometimes I pick up on my off days. Okay. So I'm working. I'm working. And you're doing what again? I'm sorry. Say it one more time. Yeah.

Nursing assistant. Nursing assistant. But you're only making $24,000 working as a nursing assistant and working 40 hours a week. Yeah. Okay. Okay. Yeah, I mean, I think the first thing to be looking at, because what's your degree in? Because you have some student loans. Yeah. Well, I went to school for different... Well, I'm really...

Went to school and didn't really get much of a degree. I got one degree. How long have you been paying on these student loans? Years. And I haven't made a dent. And I mean, you know, during COVID, they wasn't taking any payments during COVID. They were sending money right back. Are you single? Yes. Okay. Okay.

Well, there's some simple steps you can take that are tactical to help you, but it's going to take sacrifice. It's going to take making more, spending less, all of that. So here's the thing. With the collections, you've got to talk to these people. We can't bury your head in the sand. And even if you call them and say, listen, I can't pay you. I make $10 an hour and...

and I got a lot of bills and a lot of people who want to get paid, and so I need to keep the lights on. So your one priority is food, utilities, shelter, transportation. We call that the four walls. Nothing else gets paid before those get paid. I don't care who the debt is to, what the collectors are saying. You got to keep the lights on, keep the mortgage paid so that you don't get foreclosed on. And

eat something too. And so beyond that, you gotta make your insurance payments, we need to keep all of that to protect us, and then we can start tackling the debt. But clearly, there's not much to tackle it with, because you have no money left after making minimum payments, right?

That's right. So, I mean, so what do I tell them or what do I do? Do I write a letter? Do I call them? I call everyone you owe debt to and say, listen, I want to pay you, but I don't have any money. I make $10 an hour. I'm six figures in debt. I'll pay you when I can and what I can. But right now, I'm flat broke. Okay.

Yeah. And then on the income side, Shonda, I mean, honestly, I mean, I was, you know, Walmart, Target, like these places are paying up to 20 an hour. Like you could double that.

your hourly rates by working somewhere else. I think you're going to need a different job. I just don't, this job is not going to be able to sustain you and you're working 40 hours. So I'm like, you're, you have a, you know, a great work ethic, but that energy is going to something that's not giving you your rate of return of what you need right now. And so in places like Walmart, Target, some other places, I mean, they have great benefits. Like they really do a great job in helping their employees. So I honestly would be switching jobs. Yeah.

You have to make more. You can't be living on this. Is there a path for you to make more in the nursing assistant world? Like it's a CNA where you could be making $40,000 a year? I don't know. Like the hospitals or something like that. I don't know how much they...

I would do some homework and research and talk to people who are in these fields, in these positions, and ask them the path and what it's going to cost and what it's going to take and how long. Because long-term, we need a solution. Yeah, agency pays. I mean, I guess agency. But beyond the agency, you know, as a certified nursing assistant, you should be able to make $30,000 to $40,000 versus $22,000.

And with your experience, I'd imagine this wouldn't be a huge leap. And so I would just at least start to do some homework. I know life has got you down, but this is the time. The next 10 years, we need to be really getting focused, get the income up, get rid of this debt, and have no mortgage payment. And Sean, to start binge watching some of our debt-free screams,

here on the YouTube channel or even podcasts, but go through and watch some of these stories because I know it feels like you're in such a hopeless situation. And numbers wise, it does feel hopeless, right? And so we want some of that to change with your income and starting to get a grapple on this debt situation.

But just know that there is a way out. It's just going to look different than probably what you've done in the past, and that's okay. But there's people that do it every day. So continue to feed your mind with this stuff. If you hold on the line, Shonda, Austin's going to pick up. I want to give you Financial Peace University. It's our nine-lesson course on money, just to get you the basics of

We'll throw in Every Dollar Premium as well, which is our budgeting app. And they have a great tutorial there when you sign up there to really walk through and teach you there. Here's detailed how you do a budget. And also go ahead and throw in Total Money Makeover too. And that's Dave Ramsey's bestselling book. And it's the seven baby steps. I just want to get some knowledge of this plan in you, Shonda. And I want you to just like soak all this up because it's going to kind

kind of be a different world that you'll be navigating with money it's going to look different but I want you to have motivation and people behind you cheering you on and even if it's us on YouTube cheering you on and giving you some encouragement through other callers or watching their stories I want that for you because I want you to know that that this can change it's going to be different it's again yeah it's gonna be different from what you've done and it's

It's going to be hard. None of this is easy. None of this is easy, but it is possible. I'm going to throw even one more thing just because I feel for Shonda. I'm going to gift you a free coaching session with a trained Ramsey financial coach who can walk through all of this with you, help you with the collection side, navigate this wild journey, help you make a plan with the debt snowball, be

just because we can't do that in a radio call and I really want Shonda to have hope because I know a lot of older caller there's older people out there listening who are in their 50s Rachel and they're going well I'm in her shoes there's no hope for me and it takes it's harder to do as you get older it's just harder the habits deeper habits that are you have to

break that you're used to. The mistakes have been compounding for years. The debt's been sitting around for years. It's in collections. So hang on the line. We'll get you connected and give you a free session with a trained Ramsey financial coach who can help. So that's a big part of the problem is feeling hope and getting a game plan. That's right. And we talk to people, yeah, in their 50s, 60s, sometimes in their 70s, right? And they don't have anything for retirement. They're trying to figure this out. And

And even though it's a hard hill to climb to say, okay, I'm going to buckle down. I'm going to learn something new, change what I've been doing, sacrifice, take on that extra job. All of that is hard, but it's also hard to go into retirement with nothing if you continued on that path, right? So it's one of those things like you choose your heart. And one heart is actually going to be able to

give you money when you start working a plan and get out of debt and be able to have some level of control over your life versus not at all, right? Don't give up, Shonda. You got this, Shonda. We believe in you. This is The Ramsey Show.

Our scripture of the day comes from Isaiah 46, 4. Even in your old age and gray hairs, I am he. I am he who will sustain you. I have made you and I will carry you. I will sustain you and I will rescue you. One man cannot hold another man down in the ditch without remaining down in the ditch with him. Booker T. Washington. That's a good quote right there. That is so true. So, so true.

Well, George, it's been a great hour. It has been. We've had some great calls. I've enjoyed it. I'm glad you feel the same way. I do. I have. All right. So to round out the show, let's go to Ethan in Kalamazoo. Hey, Ethan. Welcome to the show. Hi. Hi. How can we help?

So I just had some questions. So I just turned 18 and I graduated a couple months ago. And I just don't really have any idea like what to do with my money. Okay. So you're 18 years old, graduated from high school. What are you doing now? Are you in school? Are you working? I'm a pipe fitter in a pipe welder. Okay. Good for you. How much are you making? I make $20 an hour. So about $2,400 a month. Okay. Okay.

Good for you. Are you living at home? Are you on your own? Yes, ma'am. You're at home? Okay. Awesome. How much money do you have? Right now, I have about three grand saved up in a checking account. And then I have, I think, $2,500 in a money market. And then I have another $300 something for bills. Okay. And do you have any debt? No, sir. Great. And what's your question?

Um, so I was just like wondering, cause I know, I feel like every, like my whole life people said like, you know, renting like apartments was like super bad and stuff. And then I heard a couple of times from you guys that, you know, renting apartments isn't always the worst idea. And I just figured, you know, since I'm young, I don't want to get any in any debt ever. You know, it scares me now after I've watched your guys' shows for 10 hours a day.

And so I was just like wondering like what's okay to be in debt for and like what's not okay? Yeah, that's a great question. Well, if you listen to the show for 10 hours a day, you'll know that we are anti-debt all the way anytime. We don't think there's any such thing as good debt. And the only debt we don't yell at you for is a 15-year fixed rate mortgage that you're attempting to pay off early.

So outside of that, we don't believe there's any good debt, that it should be leveraged, that it's some kind of tool. We've only seen it cause pain and harm in the long term, and the ones that brag about it just haven't been burned yet.

And so at 18, man, if you can get a hold of those principles now, you're going to be unbelievably wealthy. Yeah. You're going to have a great life. Yes, sir. Yeah. And the renting thing, Ethan. Yeah, we're not against renting. I mean, renting buys people a lot of patience and gets them in a position financially then to be able to put a good down payment on a house and

get out of debt, you know, do some things. And where a lot of people feel like it's just throwing your money away, for us, you know, there's a level of risk that you don't have when you don't own a home. Because owning a home is,

I mean, it can be expensive. I mean, you're, you know, from roof issues. We just had our chimney had to be completely basically redone in the inside. And so they've been working all week at that. You know, we had stuff with our roof last year. You know, appliances go out. I mean, it's just there is so much that you pay for as a homeowner when you rent. You don't have to pay for it.

you don't have that expense. So there's a beauty to that, right? We eventually, Ethan, want you to have a house because owning a home and real estate being part of your overall financial picture is a great thing and we are all about it, but we want you to,

to do it the right way. But you're 18. So my question for you is, are you going to school? Are you going to do trade? Are you going to be doing this job, do you think, for the near future? Are you happy living at home? Do you want to be out on your own? Where are you at with just your life stages right now? It would be nice to be out on my own.

But, you know, just like the apartments in my area, like just a studio, those cost about, you know, like $1,100 to $1,300 a month. And that's well over half of my monthly income right now. Yeah. I don't really plan on going to school. The place I work for, they do an apprenticeship. And so hopefully I'll start that up in September. Okay. And will that cause a raise to occur? Yes, ma'am. That's great. What will you think you'll be making?

Um, I'm hoping they'll give me another dollar. So about 21. Okay. But the thing is, is in, you know, four or five years when I'm done with the apprenticeship and I become a journeyman, I'm expected to make $1,000.

you know, around $50 an hour. Yeah, that's amazing. It'll be six figures by then. Yeah, that's so great, Ethan. Yeah, so I wouldn't be in a rush with the housing situation. I mean, I think eventually you'll get to a point, you know, maybe when you're 19, 20...

- And go get a roommate. That's what I had roommates up until I was married. So get a two bedroom and it may be eight or 900 bucks a month if you split it and go do that for a while. And that will give you a sense of independence. It'll help you learn how to be an adult.

And, you know, Dave always says that an eagle that doesn't leave the nest is eventually a turkey. So it's good. I think it's good for your spirit if you can get out. But, Ethan, I feel like such a mom right now. He's a good boy. He's only been out of, you haven't, I mean, I guess it'll be coming up on a year. Did you graduate last May from high school?

No, I graduated early. So I graduated right before Thanksgiving. Nice. Okay. So you've only been out of school for three months, right? Out of high school. Yes, ma'am. Okay. So yeah.

I just feel like you're just so young. I'm like, you don't have to go live on your own apartment right now. If he's saying that's something he wants to do. Yes. I don't want people to feel like, well, once I get out, I need to go buy a house. That's right. No, no, no, no, no. Yeah. Yeah. And if you want to go and rent an apartment and go do it, that's great. That's great. But I do feel like you've had a lot of life shifting and you're learning and

how to be an adult right now. And if you don't have to pay for rent, right, this moment and, you know, I think that's a great thing, but I would have plans to move out, right? To get to your point, George. Yes. And while you're at home, it brings dignity. I would say every single penny. Yes. This is such an amazing season where you don't have many bills. And what happens, and I lived this out when I was 18 living at home, is I started working and I just spent every paycheck because they didn't have bills. I was like, what else are you going to do? I'm 18. Let's go have fun.

And I just bought gear and stupid crap, and I could have been saving, and I could have been paying off student loans, but I was just being an idiot. Just an old lad. An 18-year-old trucker head. Just a little old lad, George. You won't be me, Ethan. You're going to do great. But here's the thing. Pay cash for your next car. That's where 18-year-olds go wrong. So what are you driving now? I have a Ford Ranger. Is it doing well for you?

Yeah, yeah. It's been pretty reliable. I've had it for almost two years now. Cool. So great. Yep. So yeah, I would do what George said. Just stockpile some money. Have a date to say, okay, you know, by, I don't care when it is, September or something, six months from now or whatever, I'm going to really seriously look at moving out, being on my own. And honestly, I think there is something about when you work and you're not in school,

You do feel more like an adult, right? I mean, like there's a sense you're bringing in a bunch of money and you're, and you're going to, that itch to move out will probably happen sooner than later. I just don't want you to feel like you have to rush out right now because you've just had a lot of life change, but have a date. Talk to your parents about it too. And just over communicate with them. Like, cause you sound like a very responsible guy, you know? And so I think having that plan is great. And that money market account,

is a great place to be doing your emergency fund. So I would build it up to three to six months of expenses, which may, it will increase when you move out because you'll have housing and all of that. But just be putting money away in that money market account.

and I think just be saving and avoid debts and then be looking at investing soon after you get that emergency fund. I mean, there's some things you can be doing. If you hold on the line, Ethan, I'm going to give you George's book, Breaking Free from Broke. Cheers. Because,

He does a great job laying out so many of the myths in our world today when it comes to money and our culture and our generation. And I think as you start diving into adulthood more and more, you're going to hear more and more opinions about money. And George does a great job refuting. Is that the right word? Oh, yeah. Great word. Thanks. Man.

Really, really pulled that one out. Refuting a lot of the myths and the lies that people have fallen into. It will keep you away from debt for the rest of your life. I promise you. If you read that book, it makes you want to take a shower when I just lay out the facts. And Ethan's already right there. But it's easy at 18. You start working. You feel like you need to increase your lifestyle. And you start comparing. The credit score. And you hear all this stuff. My buddy just got a Camaro. You got to just turn down the noise and all of that and focus on your goals. That's what the kids want these days. Really? I don't know why.

Are Camaros the thing? I saw some nods out there. The 18-year-olds love a Camaro. They love a little muscle car. Who knew? I got my finger on the pulse, Rachel. Man, you know what's going on, George. You're so hip. I'm a car guy. So hip. Well, Ethan, thanks for the call. And thank you, America, for listening. Thanks to all the guys in the booth keeping the show afloat. George, thank you. Thank you, Rachel. Good times. And a great co-host as always. And we'll be back. We'll be back.

If you're a leader, your personal growth matters for your organization because whatever you lead can only grow as much as you do. I know from experience. I've been CEO of Ramsey Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership Podcast. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One episode could change your business. Check it out on Apple, Spotify, YouTube, or on iTunes.

The Ramsey Network app.