You Don't Become A Millionaire By Investing Borrowed Money

[Music] live from the headquarters of Ramsay Solutions broadcasting from the PODS moving and storage Studios it's the Ramsay show where we help people build wealth do work that they love and create actual amazing relationships thank you for joining us America Rachel Cruz Ramsey personality number one best-selling author co-host of the smart money happy hour my daughter is my co-host today open phones at triple eight eight two five five two two five this is the show where we love you so much we will tell you the truth and sometimes you won't like it but we're here because we care about you and we're going to help I'll say I'll say nice I'll say the say the truth nicer than maybe he will sometimes Maybe sometimes I'm nicer we're matching today I just saw this in the camera little black action here color color coordinating yeah you know what makes you look thinner than wearing black what being thinner I discovered that that's a personal revelation of mine open phones at triple eight eight two five five two two five Mary is starting us off in St Louis hi Mary welcome to the Ramsey Show hi Dave thanks for to my call sure what's up so the last few weeks uh to be honest I've gone down a little bit of a Dave Ramsey rabbit hole on YouTube so I'm just kind of getting to know your principles I'm really intrigued by them uh but I have a real question about your baby steps the one thousand dollar emergency fund philosophy I think my husband and I might be a little out of whack when it comes to following the steps um exactly correct we have a sixteen thousand dollar car loan we have a 215 000 mortgage and we have about 30 000 in non-retirement Investments um and we've also started a few small investment accounts for our children we're trying to increase our retirement to 15. we're kind of trying to do everything at one time yeah um my question they did all of that long before you even heard of us yeah we've been trying to really you know try to pay off as car loans and things like that so we have one car left um my question is this it's taken us several years to save that money that we have and then non-retirement investment and we currently have a deck in our backyard that is literally falling apart so we've been quoted to remove it and replace it with a patio for about fifteen thousand dollars what's your household income uh about 145. okay cool um so I guess my question is and I you know I also am worried if we use the money to pay off the car loan and then we do the patio I just always like having some cushion to know that if there are big purchases that come up um that we have enough cash to do it and so I guess I just wanted to know what your philosophy was on based on everything you know where we're at um the summary of the background of the baby steps was this when I first started teaching uh basic financial principles 30 years ago I would have this exact conversation with people where do I start where do I start where do I start and uh a couple of philosophies emerged as we worked with thousands and thousands of people now millions of people years later but uh the philosophies uh number one that emerged was the number one wealth building tool that you have is your income when you give it to other people in the form of payments you limit our slow down or even stop your ability to build wealth so becoming debt free first personal later home is an essential part of a long-term wealth building plan because the money you make 145 000 should turn you into a millionaire okay if you don't give it all to someone else in the form of car payments etc etc right and that's the general philosophy okay the general philosophy number two was people kept saying where do I start because one hundred percent of us including no matter how much money you make uh have competing priorities we have a broken down deck we have a uh a uh an emotional need for a pad of an emergency fund laying there um we have high school kids they're gonna be going to college soon college kids coming at us we've got life insurance we need we've got a next car we might need to purchase we've got another thing we've got to think about Christmas God it's going to be here again in 20 minutes you know and we've got all these things coming at us and so the what we came up with was the baby steps and the reason they've been so successful is because it gives you a very clear path uh that is based in good solid financial planning principles and get out of debt philosophy and it's the shortest distance between where you are and wealth now that it might not be the shortest distance between where you are and a deck but it's the shortest distance between where you are and wealth and that's what the whole thing's built on and so what we would tell you to do is have a thousand dollars first any other non-retirement money you have the thirty thousand bucks in your case would be to come become debt free except your home so we pay off your car by the time you by the time dinner is here tonight pay off the car okay then that leaves you um fourteen thousand dollars and you have a debt problem and you make 145 000 so we need to get a deck fixed you have any money in savings at all other than this non-retirement um we have about um we have a small savings account it's about five thousand right okay so I would keep some of that other though but instead of the deck for your emergency fund because when you said I just want to have some cushion that's what that provides you and then you guys make great money and I would just cash flow put in yeah put in the budget hey we're gonna save x amount per month towards the deck and let's pretend okay so you make 100 you're right Richard you make 145. let's call 20 000 your emergency fund which would probably be about right and you never touch that ever for anything it's not for purchases yep a bass boat another car is not an emergency okay okay this is only if the world come to an end I mean only if the transmission goes out only if your mother or your relative or whoever in another state passed away and you got to buy an airline ticket I mean only as an emergency an unexpected event a deck falling off is gradual that's not unexpected yeah okay so to Rachel's point we're gonna put 20 000 bucks there now you got no car payment and now you're going to get on a detailed budget and start working these plans I and I would save up for that deck very rapidly I think you can save for that deck by Christmas okay and and then you pay cash for it oh by the way in the winter the guys aren't working as much in St Louis and so you might get a better deal yeah okay then a deck in the summer I could be wrong but I think so and so and so on okay now we got a deck and now we got baby step five fours fifteen percent of your income going into retirement you already got the kids college going you already got that going and now let's start just thinking about how are we going to knock out this little 215 000 mortgage there's not much you sound young how young are you I'm 34. yeah yeah so I mean you got the same age right so yeah um 35 35 basically it's just close enough yeah but I mean that's when you're my age it's really cool yeah so anyway the point is the uh uh uh you know you're gonna gosh you should have this house paid off before you're 40. yeah you're going to see a lot of traction Mary because you guys you already have the Instinct you've been doing this and like you said it's everything's a little bit all over you just need more of a concise plan but there's no power and you're going to see it in lack of focus focusing and working straight down those baby steps gives you a power uh because it keeps you from doing other stuff when you try to do six things at once nothing gets done but you can do one thing you can get the one thing done and so we got the car and we got the deck now we got the retirement we got the kids college going now we're gonna start working on the house one thing [Music] hey guys being free to make your own medical decisions is a big deal these days Christian Healthcare Ministries gives members the freedom to choose the doctors and providers they want without the frustration of worrying about networks and with no waiting period to join it's a membership-based non-profit Ministry where hundreds of thousands of Christians share funds to pay for and pray for each other's medical bills for over 40 years chm has helped families living across all 50 states so cfchm could be right for your family check out more today at chministries.org budget foreign [Music] Rachel Cruz Ramsey personality is my co-host today thank you for joining us America I'm Dave Ramsey your host hi coming up is Jackson Michigan Mike's on the line hey Mike how are you good Dave how about you better than we deserve sir how can we help quick question for you I am retired we are retired and we have note that and we're purchasing a new car and we can pay cash for the new car uh if we could get a financing deal and we can invest that same amount of money in CDs for that same period of time what's your recommendation pay cash for the car or don't buy it okay yeah okay here's the thing okay how much what's your net worth uh about 2.5 million yeah you didn't get that by playing games like this you know well you got this by saving money and investing money right but you didn't borrow on uh a car and invest the difference no what I was talking about is I don't know what you're talking about but I mean my point is is you steadily invested over a long period of time to get 2.5 million you did not borrow money and invest borrowed money to become a multi-millionaire did you correct correct and and now you're going back on all your old ways don't do it Go stick with the plan that got you here you're incredible man congratulations hero thank you I wish I would have found you a lot earlier it would have made the path a little bit easier but I enjoy your shows I don't think it's ever easy but you you scored touchdown in the Super Bowl as far as I'm concerned my man well done thank you works hard to get there thank you very much that's so cool you know it's funny that uh Rachel when you start paying attention to money and obviously that's one of the things that's required to end up with two and a half million dollars I kind of thought he was going to tell me that by the way yeah um kind of felt it and you know he's just like hey but the people just you you're they're thinking about money not in the negative way not in a greedy way not I'm obsessed with money but instead of just you know it's like people that drive and pay attention when they're driving and the ones that drive and don't pay attention when they're driving and that's what they do with their money they don't pay attention or they do and the ones that do pay attention if you just think about it even though he was getting ready to do a dumb thing but I mean he he's a guy that thinks about it that's why he won yeah that's why he won and and I think this is where people can overthink something and take the math of something and think okay well I can kind of beat the system here because we hear that all the time right paying off your house or even debt you know people use debt and want to keep debt around because like well if I invested that amount of money instead of paying it off I would make more and you know I mean like they start to they start to overthink it where I'm always like oh my gosh you have to like untangle it in almost in a sense remember what brought you here yes and what is the emotion that you have when you're not attached to debt what is how do you feel and that behavior part I feel like some people you know jump but I but I appreciated this question because I mean I think there are people naturally that are like I want to do well with money what's my what what's the quickest path point A to point B exactly exactly you're exactly right and and so sometimes what can happen is you try to fix something with the math and you forget the heart that's right you you know use only your brain and not your heart because your heart measures risk and your head does math and so if you're if you you know oh I work so hard to be debt free and then all of a sudden you forget and go back into debt on a car oh so so absurd when you think about it right but but at least he's on Pat task and he's thinking about he's a person that considers these things and is asking questions yeah absolutely I'm still curious yeah still curious yeah two and a half million dollars in Well Done sir well done I'm proud of you Stephen is in Cincinnati Ohio hi Stephen welcome to the Ramsey Show hey Dave how are you better than we deserve what's up good good I had a question for you I'm well versed in your program um I'm 52 and I've got three boys one is a junior in college or is going to be a junior the other one is going to be a freshman in college and the other one's just going into high school he's not far off from college either my wife and I have made the decision to try to pay their tuitions in full good and we've got yeah we've got good 529 programs but they're just not going to cover all of it so we're trying to make up some ground in a fairly short period of time and I wanted to see what your thoughts are on basically moving the principle that we've paid into our Roth retirement accounts and moving that over to the 529 it's about a hundred and ten thousand that would basically kind of get the deal done and Iran you know we ran the hypotheticals I'm still going to have about 2.2 million dollars when it comes to retirement time which is more than enough for for our lifestyle so just want to get your thoughts on that um how much money is in your retirement now about 900 000. okay and you don't have any other money I've got our emergency funds well you're saying pay in full Stephen you mean just like semester by semester right correct for all three boys for all four years what's your household income 150 000. um go ahead well I just want to make sure Stephen that yeah you're I mean you guys will pay each semester when the semester comes you're not looking how much is in the 529 yeah uh let's see there's about a hundred and ten thousand in there now okay and What's the total What's the total budget for the kids to go to school the tuitions uh they're about let's see a 45 a year or yeah about 45 a year for each kid that includes dorm and and everything yeah that's that's everything so you weren't talking about just tuition you're covering everything correct okay and so you got 80 a year right now correct and you got 110 in there so you got a Year's worth you don't have enough even if you move the Roth uh well no so we can get out we'll continue to stay for our youngest but we will basically you know fund that difference yeah but you don't have enough even if you move the Roth because you're you're burning the 80 a year uh for the next two years that's 160 and after that you're burning another 80 or in college only two I know two are in college now 40 each right yeah that's right yeah 40 each yeah so 80k per year and you got a freshman and you got a junior so for the next two years that's 160. you only got 210. well we'll cash flow some of it so yeah the math isn't Apples to Apples you're not gonna get there you're not gonna get there um so you're a freshman when you're freshman graduates will you have another we have two in school like ever again or is it the one going to leave about the time the other one comes in the the one leaves as soon as the other one comes in yeah okay so you're gonna be once you get past this two years you're at a 40 a year burn rate give or take correct correct and that doesn't count them getting a job which they need to do um and and applying for scholarships which they need to do right um I just I it just I it just goes against everything I am and start Cashing Out retirement for college um I'm certainly not gonna borrow to do it so I do that before I'd borrow and by the way you can't roll a Roth into a 529 you can just cash it out correct yeah so it's not you said I'll put it in the 529 you can't but you can just take it out and spend it and I wouldn't do that until I'd emptied the 529 I'd let it sit there and grow grow additional growth before you move it tax-free right and so you got I'm gonna try to make it two more years and get that get the first one out of school and then get down to the 40 burn rate if you got down to the 40 burn rate with this money that'll get no that just makes it one year all right yeah it's interesting to me it's the you know it's a it rubs me the wrong way because it's kind of against the principle it's against everything I believe yeah I'm gonna do everything I can to not do it so so here's what I'm gonna do I'm going to use the 529 I'm going to cash flow like a bandit and and I'm gonna put kids to work and I'm gonna go for scholarships and try to not touch this if you do touch it make it the last thing you do and you allow it to sit there and grow until then so maybe only in the uh fourth or fifth year or whatever else what else can we sell do we have any other assets do we have anything we can do because this hundred thousand is worth millions if you'll leave it alone and not take it out of there what's your what it's going to cost you and Miss is just ridiculous because you're getting tax-free growth on it I hate to touch it I really hate to touch it so it'd be the very last thing I'd do this is the Ramsay show [Music] hey Dr John deloney here I'm a huge fan of both meditation and prayer and good mental health includes slowing down gaining control of your thoughts and plugging into something bigger than you and Halo makes it easy to start a daily practice of meditation prayer and finding peace Hollow is the number one Bible app in the world and you can tailor content towards your faith tradition from scripture readings and prayers to meditation and journaling hallow makes it easy to practice prayer meditate and build a deeper more meaningful spiritual life and ReDiscover true peace go to hollow.com Ramsay today to get three months of hallow for free that's hallow.com Ramsay thank you foreign [Music] [Music] erly your hub for Home Services most American homes have dozens of appliances and chances are at any given time there's something wrong with at least one of them Mr Appliance a neighborly brand offers expert appliance service on your schedule visit neighborly.com to find Home Service Experts including a Mr Appliance in your area today's question comes from Jonathan in Florida I am 35 and my wife just had our first baby I have roughly forty three thousand dollars in debt my annual income is around 73 000 I'm wanting to start my baby steps but I had a quick question about baby step one and two I have a credit card that is maxed out at the thousand dollar limit if I pay that card off can I count that as I baby step one and then tackle my snowball while simultaneously putting a thousand dollars cash in my savings account no John it is so convoluted no no no no no because no a maxed out credit card for a thousand dollars is not considered your emergency fund your emergency fund is considered cash that you have saved so your own money so before you pay off your credit card you save a thousand dollars cash then you start working to pay off your debts and this might be the first one you pay off appreciate Jonathan's you know if I have a thousand dollar limit can I just cash out a thousand dollars put that and then the underlying bull crap in this question is that he's going to use his credit card as his emergency he's going to use a stupid credit card so that's the underlying bull crap yeah that's just no sorry Jonathan wish it was that easy you know Sharon Rachel's mom when I'm when I do crap like this Jonathan she goes you're scheming and scamming again you're trying to find a shortcut quit scheming and scamming just do the work boy that's Sharon that's Rachel's mom that's that's that's what I get so yeah Jonathan just you're scheming and scamming Jonathan just do the work boy I mean oh my gosh that's it yeah quit you cannot scam your way into wealth okay you can't even trick yourself into it and uh so no we're not going to go a thousand dollars in credit card debt for the emergency fund but we appreciate the question so cute here's a more sophisticated problem so this was sent to me via Instagram appreciate all my Instagram people there uh because they will send me things a lot and they're like oh my gosh what do you think about this or what do you think about that and this one came no people might send me stuff too but I don't look at it so I wouldn't know you have to you like read the messages or something is that what you're supposed to do I am part of the people these are my people so yes I get on into people on social media you could too social media that's how it works they're real people out there on the other side I know that enjoy your stuff you should get in I love them so much I'm not gonna get on it should go and talk to them anyway and they sent you this yes and I read the messages because I read my messages and they're like hey I want you and Dave talk about it and I was like oh well perfect we'll be on the show together so this was from a New York Times article and the headline was I've hidden my trust fund for 15 years do I finally tell my spouse so you ready for this I'm a 44 year old man and I've been married to my spouse for 10 years we've been together for 15. unbeknown to my spouse I have a trust fund that provides me with a monthly income of twenty five thousand dollars when we first met I said that I worked as a consultant and they've never questioned it my spouse a dedicated doctor Works long hours and doesn't like to discuss work when not on the job over the years I have repeatedly assured my spouse that they don't need to work as my income is secure and stable they are however passionate about their career and have chosen continue working I actively serve on various boards but I have never held a full-time job and don't plan to our lifestyle is Comfortably upper middle class and I'm content with that my dilemma is whether I should reveal the truth about my trust fund to my spouse my family members have always advised against disclosing our financial situation but the weight of the secret is becoming too difficult to bear what do you do all day he sits on boards oh somebody said I don't know um Place Wordle I wonder how often like this kind of well we well we know that spouses hide things from one another that's a that's a consistent theme through life like that's a known thing um but this one was just interesting because I'm like okay 25 Grand a month I wonder what she thinks that he does to earn that amount of money I don't know so anyways um what I would tell the name is withheld they did not disclose the name of the New York Times article so yes if anyone out there has this dilemma no or no one else or the idea that you have a secret that is too unbearable to bear that is from your spouse listen we always teach and talk about and believe that being on the same page with your spouse is much better so coming clean and telling them anything and everything when it comes to money anything you are withholding is not only gonna just lift the weight off your shoulders that you've been carrying around having to navigate because I think about this situation which this is kind of is true I know it's a little absurd but if you do think about it I'm like the amount of like probably lies and deception that had to have occurred to cover the big to cover the big lie that's a lot of work in life and I don't know who has time for that so I'm just like Free Yourself learning an awful lot of calories free yourself being a liar and you've been with your spouse for two I mean like I mean I think it's fine and then you know what she probably still wants to be a doctor because she's passionate about her work and that's great but yeah being upfront honest disclosing everything regardless of whether it's a 25 000 trust fund or it's a secret credit card that you have whatever it is uh you and your spouse be on the same page is is crucial to to winning winning long term yeah so um yeah you should have disclosed this day one and you should be continually you should not have any secrets from your spouse hello period I mean that's just a thing okay you just cannot build a quality relationship on Deception duh okay so your family is screwed up dude because your family is telling you that your money and you're not needing to work is is you how they know your secret and your own freaking wife does not and your family thinks that's good your family's screwed up and then they left you money so you don't have to work that's screwed up so let me tell you if you're going to participate in the Ramsay trust it involves continually working because working is good for the soul like real work yeah doing work showing up and doing stuff you know this is not good this is not healthy there's nothing in this it's fun or it's only twenty five thousand dollars only three hundred thousand dollars a year it's not like you're freaking rich I mean it's 300 Grand jeez no I mean really no I mean it's not it's not three million it's 300 000. and what does this guy not done with his life that he should have done pretty good I I agree he should have done something with his life instead he's the king of words I mean oh my God I mean no really I mean he's sitting on boards that's code for I don't do much I'm telling you serious this is wrong it's wrong it's deception and it's all glassed over as if my family has said we should not share our money information because your family thinks this money is a bigger deal than it is it's just something more important than your spouse yeah and more important than your integrity in your marriage yeah yeah you've been living a long time in the in the super deception and it's it's poisoned you man really the cleanest best thing you can do you'll be like an alcoholic who sits down the bottle when you quit lying you're gonna have a cleanliness of Soul that's going to be so good for you and is she going to be pissed well yeah of course she's gonna be pissed she's been lied to for 50 years jeez so yeah ah yeah yeah of course she's gonna be mad yeah I mean she if she's not she's a wuss she should be mad this is just nutty anger is a good thing yeah in that situation I mean really you but you're you're living a lie that's why you had to put it out on the dad gum ethicist columnist page you have to go to ethics class to figure this one out this is why we need ethics classes yeah son uh don't and and papa don't do this to your kids you better off teach them how to work and give them no money than give them this crap this is the Ramsay show [Music] [Applause] [Music] well you've all played the telephone game the first person Whispers a message to the second person who Whispers it to the third and so on around the table until the original message has completely changed multiply that confusion by a hundred if you run a business with different software systems that don't talk to each other that's why there's netsuite by Oracle in the early days of Ramsey we were using different systems for all of our business units we needed one single source for accurate data netsuite was the software we used to optimize and take us to the next level netsuite gave us the visibility into all of our numbers so that we could communicate across departments and plan ahead better and as we grew it scaled with us netsuite worked for Ramsey and it will make a difference for your business too join the more than 34 000 customers who trust netsuite to help make them smarter and make better decisions and level up their operations to learn more get a free product tour at netsuite.com Ramsay that's netsuite.com Ramsey foreign [Music] [Music] personality is my co-host today thank you for joining us open phones at triple eight eight two five five two two five Ashley's in Nashville hi Ashley how are you I'm good how are you guys better than we deserve what's up um so I just wanted to get your skin I have a friend that does your house program as well as I've been doing it since 2020 I'm still in babysit too and we discussed it a few times but I'm just not sure of my decision so in 2019 we adopted our son and then a year later our marriage fell apart and we split up so fast forward to now um well we've been to court two times over custody issues a lot of nonsense really his dad's just really hard to get along with um so but in those two times it's cost me around 20 to 25 000 in court returning fees and everything else so um I'm trying to just gain some traction on um maybe preparing for that in the future because I feel like it's not going away and still being able to pay off my bed I really just don't know what to do I'm sorry Ashley that's really yeah that's a that's a really hard situation um how much how much money do you make a year um so I work as much overtime as I can um I try to last year I made around 100 100 000 and then um this year is probably going to be between 80 and 90. okay what do you do I'm a nurse yeah good for you thank you uh how much how much debt in general do you have um all together is probably around 90 000 and it's a mixture of vehicles uh to well my vehicle alone and then um I have some credit cards and a line of credit at the bank audio in your car uh 25 all right so you have 90 000 in debt and 25 of its car and then how much of its credit cards um around nine thousand okay so the rest of it is what um I have a lot of credit which is around 20 000 that I opened up to pay for court fees um and I'm not sure I can't think of anything else so I might be wrong that's only 45 that's only 54 000. another vehicle my name but I don't pay for it so that's another 48 000 but that's not mine it's one in the world who what is that it's his truck but he makes all the payments on that it doesn't cost me anything but we went in together to get it so so your name is on the is it on the deed on the on the loan on the title of the truck yeah yeah but the divorce decree gave him the truck and you're supposed to pay it or he's supposed to pay it so that's not his no that's like my fiance that I have now I'm sorry oh you so you have a so you're you're gonna get a truck for your fiance for fifty thousand dollars so we went in to get her I didn't necessarily buy it for him and we it's something that we just done together if you needed you to co-sign it no no he's I mean he's doing good with his money you know he no he's not he took out a 50 000 truck loan yeah there's money why are you on the loan uh because I mean we're we're getting married and um I just I don't I don't know it was when are you getting married uh hopefully within the next year okay in the in the whole story that you told us that has a lot of uh tragedy and sadness this thing then jumps up as super stupid and crazy right like a 50 000 truck while you're fighting and don't have the money to pay and you have to take out a line of credit and and the best idea y'all got to go in debt for 50 Grand on a truck while you're trying to keep a dadgum child in a custody battle on going with a crazy ex this truck is crazy nuts crazy yeah yeah so um all right so you're getting married when did you say okay uh uh why are you waiting um honestly because everything's just been so crazy with my ex for the past two years and I've dealt with um anxiety and depression um my son has a lot of issues he was born with and none of that's changing in a year I'm sorry none of that is changing in a year I know yeah and we just we just not just anxiety and depression on my side and my main focus being my son right that's just not been at the top of the list I guess okay you called and asked us for help and we love you and we want you to win and we're sad that you're having to fight to keep your baby okay now then I'm going to tell you some hard stuff are you okay with that yes okay sell the stupid truck get married now or don't but don't wait around on some mythical Island to Come Sailing up some mythical ship to Come Sailing up to your Island when everything's going to be right because the things you've been facing part of your anxiety and part of the things you've been facing with mental health stuff is not just your ex it's this pile of stuff on you and all of these un uh untied knots knots that need to be tied okay right you don't have closure on anything all these open-ended things or there's open ended this open-ended that open into this there's no closure anywhere and that creates angst it creates anxiety so um yeah you've got to get some some predictable order not chaos to the more areas of your life you can get non-chaos in the the faster your anxiety is going to drop I'm not a mental health professional Dr John delonius I've just heard him say that so I said it okay but that's the truth okay so and these you know and the debt and the pile of debt you guys have you have and now you guys with this fifty thousand dollar truck is part of where your anxiety is coming from because you don't you feel trapped and now you're you're worried about the next time the crazy ex comes at you how are we going to cover that meantime I got a 48 000 truck note okay and I know he takes care of it Ashley but the truth is though if he doesn't it's on you then and so you're carrying this around your neck you feel it in your between your shoulder blades you feel the weight of it and that's part of the anxiety you can't keep from doing that by the way it's just how your body and your mind and your spirit works so yeah if I if you're my little sister or my daughter I would tell you get married and sell the truck by the weekend or run this guy off and sell the truck by the weekend but painter get off the ladder right okay that's what I would tell you to do if I loved you and I do so I want you to do that okay and then we want you to uh take this wonderful income you have and you have a fabulous career choice because you'll always have a job and you can always make money when you're a nurse it's just a great job and actually I would sell your car honestly I would get any level of attraction for 25 000 I'm like you can get a used ten thousand dollar whatever it is but just I would I would get out of that how hard would you work how crazy would you go to have twenty thousand dollars in the bank and no debt so next time crazy X comes around you can punch him in the nose with a lawyer right well that's what I thought I was doing this last time exactly and now but you didn't you went over the car lot with your goober fiance and bought a truck okay so you went the other way so I want you to sell everything in sight work like crazy people live on beans and rice rice and beans get married and let's get the credit card debt paid off I mean all of it yeah start getting some traction with that debt payoff Ashley and I think you're going to start to feel more in control because you are that's why you'll feel that way because you're going to run the chaos off and drive order in and and build a build a build a war chest to go to war and then you can fight for this baby this is the Ramsay show [Music] hey it's Rachel Cruz if you love this show and want a deeper dive on your money Journey we have a Weekly Newsletter that gives you trending and helpful articles and tips on following the Ramsay way just go to ramseysolutions.com today to sign up for our newsletter again that's ramseysolutions.com to sign up for our Weekly Newsletter [Music] [Music] live from the headquarters of Ramsay Solutions broadcasting from the PODS moving and storage Studios it's the Ramsey show but we help people build wealth do work that they love and create actual amazing relationships Rachel Cruz Ramsay personality number one best-selling author co-host of the smart money Happy Hour podcast on the Ramsey networks with old George camel is my co-host today open phones at triple eight eight two five five two two five Sarah starts this hour in New York City hi Sarah how are you good how are you better than I deserve what's up start baby custodial accounts and I didn't know if I was supposed to use that on that I've read make a Total Money Makeover in the handbook and I just it wasn't clear so I just wanted to clarify uh I would not unless it was on some kind of some kind of super emergency technically technically you can um but what what ends up happening is most of us that are parents uh feel like a dirt bag if we use kid money that we set aside for our kid right and that dirt bag feeling offsets any of the good progress you're making 100 and I thought that's what you would say but I just wanted to make sure yeah how much debt have you got Sarah um non-house related 74. okay and household income's what uh three times oh okay so you're gonna be able to get it without doing the show no trouble oh yeah for sure I think I could probably do it in like 14 months yeah um but how much is in the custodials oh it's not much it's like 10K yeah so it doesn't even make a difference really yeah it's just more more of a concept than anything so yeah yeah yet another reason but I mean if um you know you're I don't know some bizarre thing you had a medical emergency or of a with an adult and like you or your husband or something in the house and you there's a hundred thousand dollars in the kids account and we needed to pay medical yeah I would use it for that yeah you know but but but um most of the time you just the the negative feelings aren't uh don't uh you know would offset any good the money would do uh in my opinion and so that's why we'd say don't do that I'd leave that money alone what do you think yeah that's what I was gonna say I was curious the numbers or what it was specifically for or where did they get it if it was that they funded it as parents yeah I was just curious more of that um but when it comes down to it yeah that's exactly right it's their money so I would stop adding until I'm debt free and I would stop adding until I had my emergency fund and I would stop adding to a custodial until I had 15 baby step four going into my uh into my retirement fund so now so once you've walked up the baby steps and you're back to baby step five then you would start adding again but I wouldn't um but it's kind of like retirement in the sense I wouldn't Cash Out retirement but I would stop adding to it while you're at this stage Ben is in Nashville hi Ben how are you I'm doing okay how about yourself Dave better than we deserve what's up yeah so I have a question about disability insurance my wife and I it's a workplace my 60 uh and my wife is 70. and we have been considering getting supplemental disability coverage we don't have kids yet but plan on it um and then next year 18 months and so we were just wondering what your advice would be on the supplemental coverage generally it falls in the gimmick category um and and so the bang for the buck is not as good uh is your workplace furnish the other two disability policies they furnished the the two that we have right now we would be going outside yeah I understand so uh and and so but if you like uh your policy would cost prop would cost your employer probably uh half what you would pay for a small supplement policy it's just it's not meaning the supplement policies are expensive they're a little bit gimmicky that's what I'm saying for the actual coverage they are expensive yeah and so um I mean it's certainly dependent upon your uh your occupation yeah and say what do you all do Ben do you have a high risk of something happening physically to you because of a job or no I'm a lawyer and my wife as a nurse okay okay and uh what you are you guys out of debt you've got some money built up or what we are on baby step number two right now we should be out of out of debt and here in about 16 months or so um and we make at 130 000 a year total okay yeah I would not buy it I would not buy supplemental in your case I I as you've discovered it's not it's expensive for what it what you get and you know the you've got the main thing covered because after taxes you're you're 60 or your 70 is going to be about what you're coming home I mean you're coming home with 80 probably but I mean you're you're not gonna lose uh you're not gonna be living on 60 of your current take-home you're me leaving 60 of your gross or 70 of your gross and so um yeah and he if I woke up in your shoes when I was in your shoes I did not carry additional disability and um but I will reiterate because I'm glad you brought this up it's not something we talk about enough on this long-term disability insurance is the most under insured area in America you need long-term disability insurance hopefully you can buy it through work very inexpensively or work furnishes it for you or you can buy it through your Association if you're a home builder and you buy through the Home Builders Association or whatever something like that but get long-term disability insurance it is very inexpensive for what it is for that first 60 to 70 percent amount and you're 32 times more likely to become disabled than to die if you're 30 years old between 30 and 65 so your probability of disability between 30 and 65 is high much higher than it is if you uh than death is and yet we all run around talking about life insurance and you need to get life insurance too but um but yeah so Ben brings up a really valid point that disability insurance is vital but supplemental is not yeah so for any additional does Insurance when would be a time that you're like yeah I would recommend something I mean is it is it labor because I would think if you're at a job that is more physically taxi like you know I mean if there's if you're in a blue collar situation of some kind yeah your your Disability Policy is going to be even higher because it's as much occupation based as it is age or health-based so anything X -rays high-rise window cleaner right right versus you drive a cubicle for a living right you know it's a whole different set of categories for you to get uh they're gonna it's really expensive okay so again you've got to go back and try to get it through some kind of an association but you know what we're talking about is something like an Aflac policy and it's like the cancer policy The Accidental deaths yeah yeah the cat Insurance the uh heart attack Insurance whatever all this it's all gimmick stuff yeah and so I don't I don't spend money on that stuff at all and so I'm sorry Nick Saban but I just don't there you go this you're not sorry sorry not sorry Aflac duck yeah but there we go this is the Ramsay show [Music] [Applause] [Music] if you're like most people your home is your most valuable asset and when you want to make improvements it can feel like everything costs too much or takes too long but something as simple as custom window coverings from blinds.com can completely change your space and add value to your home we've recommended blinds.com for over a decade so you know you can trust them from blinds drapes and shutters to motorized Shades they make it easy and affordable to upgrade your entire home and their team is ready to help with everything from design consultation to measuring and installation plus there are never any misleading quotes or hidden fees ever three things backed by their 100 percent satisfaction guarantee and shipping is always free see whyblinds.com is the number one online retailer of custom window coverings go to blinds.com now and save 45 off selected products visit blinds.com today for more info [Music] thank you [Music] Rachel Cruz Ramsey personality is my co-host today open phones at triple eight eight two five five two two five so before we went on the air today you did your uh free webinar on budgeting with every dollar gang right yes we did yep we had um yeah a couple thousands show up I think over ten eleven thousand registered so there'll be some replays going out to those people that submitted their email address but um but yeah it went really well we kind of just dove into the fact that your budget really is the found one of the foundational principles of winning long term you do this in baby step one all the way to seven and how most people feel still just out of control with their money that paycheck to paycheck cycle and then you have inflation on top of that student loan payments are about to start coming in again so so there's just a lot there so really pressing people and showing them hey here's how to do a budget and then even with every dollar every dollar premium like here's the here is the functions for your day-to-day life with money and how we built it to help people again day to day having it accessible on your phone uh and just making it something that's part of your your habits on an everyday basis so it was uh it was great and I have another one on the 24th of August um so you can sign up at everydollar.com com webinar for that one and everydollar.com budgeting well I think that one's Jade's I think we all have different no it's every they're all known they're now they're all on according to this thing I have in my hand okay well according to the website okay I could be wrong but anyway so anyway you can try either one everydollar.com budgeting Jay it'll be teaching another one she had ten thousand at hers George's uh George is doing one as well coming up soon too August 30th is Jade and George and Rachel Cruz all of these are free webinars on budgeting with the student loans bearing down on you inflation bearing down on you credit card debts at an all-time high uh folks are needing to get control and the budget's a tool that helps you do that it's completely free to go to one of these webinars so go to everydollar.com budgeting or everydollar.com webinar was my last webinar they made changes since let's see what it is so you can find it either way we'll get you going yeah open phones at triple eight eight two five five two two five Julie is with us in Houston Texas hi Julie how are you hi I'm fine and you better than I deserve what's up well um my husband's family has a history of very the early onset Alzheimer's my husband had to stop working at 49 years old so he has it right right he does and his mom had it and she had to stop working like early 50s and she lived to be 67. now I say that so you understand that maybe with the early onset they live a lot longer right needing care a lot longer and I have three kids and so um they are in their 20s 29 26 24 and so they have about 15 to 20 years to prepare financially for the possibility of them needing 15 years of care and I don't want them to be in the same mess that you know my husband and I are in so my question to you is how can they prepare financially for this huge um burden now I know they need long-term care insurance but they're going to need you know a substantial amount of money as well yeah I'm sorry wow what a tough thing you guys are going through um yeah how long was he diagnosed Julie your husband um five years 54 now how's he doing well he's attending an adult day care and he's starting to progress a little bit um starting with hallucinations and stuff and just yeah he's painting on me I'm so sorry Julie [Music] uh well there's no there is no uh different formula it's just um it's just got this uh I don't know a different urgency I guess if you will uh to prepare because as you said long-term care insurance the typical policy only covers three or four years um most of them don't cover you know from 49 to 65 kind of thing you can investigate those types of policies the ones that I have seen are very expensive they're inordinately expensive because the uh the long-term care industry is figured out that not counting you know you're obviously you all are an outlier statistically but the typical nursing home stay is three years or less two and a half to three years that's the average uh and so they're covering that and that's about all they're covering so they're not um but yeah you can investigate that and the first three to four years of use of the policy then when you are not able to care for them care for someone you know you would do that uh and but other than that it's a it's a wealth building formula what's the best wealth building formula you know walking these baby steps and Building Wealth now you know you may want to adjust your baby step four and start thinking like it like sometimes people call us and they're going to retire early before 59 and a half and to have access to their 401ks and Roth IRAs and so forth which you can get hardship access to those without penalties but uh it's hard to prove it and hard to pull it off so if but if someone's going to retire early we tell them put some of their money in non-retirement investing call Bridge investing and so you know instead of putting 15 all into Roth IRAs and 401ks I might put 10 there and five percent into just S P 500 or some mutual funds that have low turnover ratios right so that you've got some money that's not trapped in a 401k that you could get to in case you had the deal this with this before 59 and a half does that make sense and most likely they will yeah yeah if uh if they yeah if you know face the same thing more of them probably it's not yeah it's not a hundred percent but yeah you've had this had this horrible pattern that you guys have watched um and yeah very very tough so yeah um you know and and then I guess the rest of the equation is spiritual and emotional isn't it yes you know just just walking uh through something like this in in as a faith exercise so to speak and then and dealing with the emotions of what you guys are facing I'm so sorry I wish I had I wish I had a really good easy answer to make the the money part easy and even but even the money part's not going to be easy yeah and I think Julie for them just to be able to which I'm sure they are because they're experiencing with their dad I mean as we speak and so um for them to know hey I I have to be even more disciplined and buckled down um knowing you know some things about my future that is a possibility you know unlike the average person's walk around they and they don't know you know they may not have that deep of a family history that they are aware of so it kind of just fast forwards for them a level of I mean kind of buckling down and maturity to know okay if this is really true how much do I need to have so my family can take care of me and that may mean sacrificing you know some of the fun or whatever it may be but just being that much more intentional and then also I think having the joy of life and that was the emotional spiritual part that you were kind of talking about but also not letting fear um you know drive drive all of this you know John delone is coming out with a new book um called building a non-anxious life and not that that book is going to have all the answers um Julie for your situation but stay on the line and Austin can pick up because we want to give you it's on pre-order right now but we'll get you uh set up for for that to ship to you and then anyone else listening because I think that that's um it's a part of this equation that it could so easily turn into Madrid a lot yeah which is reasonable and understandable but also you don't want it to steal um the the parts of life that do have the joy and being able to live in that but that's so difficult exactly so sorry you're facing that and if we can help you any any way as you're walking through this you call us anytime we'll help you any way we can but um yeah the idea that um oh I'll deal with that later I'm just going to screw around now in my 20s and be irresponsible those kids don't have that option yeah they got to lean in they gotta they gotta be serious from day one and that that's not a bad thing that part that part's not a bad thing the reason is a bad thing but the result is not a bad thing this is the Ramsay show [Music] it's a competitive home buying Market but there's a way you can get an edge Churchill Mortgage works with you to understand your budget and your goals and the Churchill Mortgage home buyer Edge offers you fast pre-approval and a secured interest rate plus Churchill has bumped up their seller guarantee to ten thousand dollars giving your offer the best chance of being accepted and helping you win in today's market go to churchillmortgage.com today to learn more [Music] foreign [Music] personality is my co-host today thank you for joining us America we're glad you're here open phones at triple eight eight two five five two two five Danielle is in St Louis hi Danielle how are you hi I'm doing well how are you guys better than we deserve what's up good hey um I have a car fleece right now and it is going to end in April the end of April 2024 and I'm starting to prepare what I need to be doing at the end of that um currently I'm in baby step two I started last June and I've I'm about at the halfway mark right now but I'm wondering the only thing I have left in my snowball is three student loans and then of course I'm just making my normal monthly payments on my car so I don't know if I should be trying to put aside money to buy that out at the end the value on it versus what I will have to pay for the buyout is about 6 000 in equity that I should have so I don't know if I should be setting aside money do you think you're going to be able to buy it six thousand dollars cheaper than it's worth yes I mean right now it's very unusual I just looked at the KBB today and it's valuing at about twenty six thousand um in my buy outfit the online actual lease contract has it at twenty twenty thousand six hundred and forty two dollars in April in April yeah in April right probably six thousand dollars is it I don't know I mean what kind of car is this um it's a Subaru Crosstrek and I'm significantly under my mileage as well so part of me is like you don't get credit for that but the only way you get credit is the actual value of the car so I'm gonna guess and say the car is going to be worth 22. okay I'll just make a number up okay okay and you can buy it for 20 and so you're not overpaying for the car but you've got all these student loan debts and you got twenty thousand dollar car uh and you're under your mileage uh what's your household income it's just me just me my before I'm estimating to make about 12 this year so about 62 give or Shake and what is left in your debt snowball just three student loans three student loans and then just my my fleece payments what's the balance on the student loans each I have I just made a payment today so it'll be thirty five hundred seven thousand three hundred and eight thousand nine hundred so total will be nineteen seven okay all right uh I have a theory of what I might do sure um I'm all open ears yeah I don't think you're gonna have twenty thousand dollars and be debt free by April unless there's some kind of Miracle happens in the numbers I didn't hear okay so if you were dead free and you had twenty thousand dollars cash and you wanted to buy the car we can talk about that but uh if you were going to just walk up and buy a 20 000 car in the middle of what you're going through right now you wouldn't yeah that's fair you know and so that means you don't buy this twenty thousand dollar car and because it's not going to be worth 26 in April it's gonna be worth 21 22 it's not it's not going to be the deal of the century at least it's just not going to be there so I'm turning it in and I'm gonna have saved five thousand dollars to pay cash for a car and so I'm gonna I'm Gonna Knock Out the 35 I'm Gonna Knock Out the 3500 and then I'm Gonna Save five thousand dollars so I'm putting five thousand dollars in your debt snowball to buy a car okay and I do I have been putting a little bit aside already so I'm at about six so then I could consider that done oh you were already cheating the baby steps I I don't know that I call it cheating I call it preparing that it's coming oh okay all right well I would stop uh and buy a six thousand dollar car and uh when and when April gets here and in the meantime I would just tear into these student loans and then you can move back up in car later uh with cash after you get your emergency fund in place but in other words if this car was ten thousand dollars to buy instead of 20 we might stretch and do it but 20 is a bit of a stretch with your income numbers because you're only dealing with 62. that's kind of what I mean what I mean I was like I did right right around the questionable Mark yeah it's a little above the bubble for me to be wanting to do it if if I'm in your shoes I'm just saying what would I do if I woke up in your shoes so and except for the six thousand dollar already saved part yeah yeah you were right on we were right there together yeah she's doing it before you even told her now some people might be like but Dave you're going off the baby steps you're going after that snowball but this would be a time to say I'm selling a car so let's it would be like if you're selling it would be the same as if you had a 35 000 car loan and we're like hey sell it and get a chance yeah yeah yeah and let's say you were upside down on a car and take a loan out and you ended up with a small loan those are the baby steps that's the same thing too so all of this is just we've got to get we got to provide for basic Transportation yep and so yeah six thousand dollar car fits beautifully in this and she's already a step ahead of us bill in New York City hi Bill how are you I'm good how are you better than I deserve what's up I am in between buying an apartment for myself and buying a mixed-used building and I'm not sure what to do hmm well both are excellent things and so it's a choice between excellent things right it's not like I don't know I don't think one's in the stupid column and one's not okay the advantages in a 20-year game plan of owning the home you live in are pretty dramatic um and but but obviously investment real estate is pretty dramatic and wonderful so uh but what happens is what people don't think about when you buy a home the first thing you do is you do away with rent and rent goes up every year and home you know what you pay for your home doesn't go up every year or go up some with taxes insurance but I'm talking about your payment the the largest line item in your budget is locked in the second thing is it's going up in value tax free 250 000 can be profit uh after one year held a single 500 000 married and then the third thing is is the one of the things we find in the millionaire studies studying millionaires is one of the biggest items is a paid for home that uh stabilizes your uh you know your your last 30 years of your life you don't have increasing rents and you've got a very stable predictable non-chaotic situation because your home life is steady versus investment real estate over there is playing Monopoly yeah and that's more of a game yeah yeah so I mean I think owning your own place of residence is it's a huge factor in not only just Building Wealth but if your entire just Financial picture for not just the Math's sake but also just the Peace of mind's sake of having a place to live that's yours and again the fact that it's going up in value and all of that is is fantastic so um so yeah I'm all about buying a home for myself but also investing in real estate it's it's another great option for for wealth building too yeah yeah if I were you I would buy a house first that's what I'm trying to say you know after all that babbling that's what I was saying you know so yeah just straight up by a home and uh didn't get it paid for and then save up and pay cash for investment real estate and uh Rachel's husband Winston runs our family real estate and he's a real estate investor as well they always pay cash we pay cash um for investment real estate we love real estate I'm a huge real estate fan but I'm not a huge mortgage fan and I just there's uh I can always relate I don't know it's one part uh it's a you know it's a 42 years I've been married almost 41 years I've been married and um in my 42nd year I guess is the way of saying it and yet I can still remember that part of being single that I think gosh I could live in a tent and have investment real estate you know because I always wanted to be an investor that badly I've always wanted to buy real estate and so you know that's kind of what he's thinking he's thinking I just that that apartment over there owning that thing will be so cool and so I can always relate to that emotionally that's what causes me to babble through the answer but at the end of the Babbling I still bought a house this is the Ramsay show [Music] oh [Music] [Applause] [Music] hey if you're in over your head with student loans and tired of getting calls from collection agencies if private student loan debt is taking away your financial piece and you don't see any way out you need why refi they're not a debt settlement company and they're not connected to a bank why refi refinances defaulted private student loans that other places won't touch and gives you a custom loan built for you based on your ability to pay so when you refinance your private student loan debt with why refi you'll have a payment you can afford with a low fixed interest rate you couldn't get anywhere else to help you stick to your budget and work the debt snowball and you can save thousands of dollars to learn more about this custom refinancing option and a lump sum payoff option you could qualify for after 24 months call 8442 Ramsey or go to yrefi.com Ramsay foreign [Music] Cruise Ramsey personality is my co-host today thank you for joining us America I'm Dave Ramsey your host Savannah's in Orlando hi Savannah welcome to the Ramsay show Hi how are you better than we deserve what's up owners and and our property taxes car insurance rates in Florida went up like crazy this past year we are under on a lot of our bills and we've been trying to make it work with our savings our savings are running out in the next few months and we're trying to decide if we should sell our home because we have a lot of equity in the home or if we should accept a ten thousand dollar gift from a family member to help us be able to stay in the home a little longer okay so Savannah how much how much is your home worth um a realtor came and they said our home was worth about 400 000 and how much do you owe on it um I believe uh we got it two years ago it was 251. um I'm sorry I'm blanking how much we owe on it still um they said we'd walk away with um a hundred and thirty thousand roughly if we got for what it was worth how much do you own your car um our cars are a big issue we pay um all our debt we owe about 25 000 um for our debt what do you owe on your car um my car is I believe 16 000 and my husband's is 5 000. what's your household income um we bring home about 3 900 a month okay what are you gonna do on the ten thousand dollar gift Runs Out that's why I was thinking maybe selling the home was would be better but I wasn't sure what what we should do I wanted to make the right choice [Music] well the fact that the 10 000 gift is a is a it's just Financial denial I mean you're just kicking the can down the road you still haven't dealt with a problem the problem is your budget's upside down okay right that's kind of what you were already thinking yeah you were already thinking that so what's your household income again 3 900. a month um oh I'm sorry a month four thousand dollars a month how much is your house payment um it went up to 1700 a month yeah I saw your house okay you can afford the house and it wasn't the insurance you couldn't afford it before and you may need to sell the sixteen thousand dollar car too okay y'all are swimming in stress aren't you yes we are this is not fun are y'all fighting no we're we're handling it pretty well while we're trying to trust the Lord and decide what to do action for I'm fighting oh yeah I'm kidding with you all right so how long you guys been married how long you been married three years okay and you've been collecting crap the whole time you got married now you got a big old pile of crap and a big old pile of debt so let's get rid of a bunch of crap and get your life back sell The Sixteen thousand dollar car sell the house and get your life back I want you to like your life in each other again yeah and there's a part of trusting the Lord absolutely we're people of Faith but there's also that Savannah you guys have to do you you guys have to make decisions hard decisions and you have to put action towards things that are needed right do you get that too like if I weigh 300 pounds and I want to lose weight I can't just trust the Lord I have to back off the donuts right there's both things right and that that's the thing and that that's like Dave's example because Dave's addicted to Donuts so uh although I have I'm donut free for gosh about almost three years now I'm donut-free so you bring down a star house pretty good I'm gonna get my little donut coin soon oh my gosh but um yeah um but yeah Savannah I mean and I think for you guys honestly um if you stay on the line Austin's gonna pick up because I want you guys you and your husband you've been married three years to go through Financial Peace University this is nine lessons on exactly step by step what to do with your money because you guys are just kind of you're just you're just normal I mean really is what it comes down to you're like you have a great house you have great cars and you think oh God everyone else seems to be getting ahead and doing well and here I am and this there's a lot of stress to this life that looks like it should be okay and it's not and I don't know what we're doing wrong and so having a very methodical plan where you guys are on the same page and you know what's going on and you actually have a plan that you're working towards and that's probably going to mean selling the house um that's going to mean selling the car that's being backing off on some stuff because yeah I mean you guys are you know I mean after taxes you're probably bringing home 40K um so that's what you have to work with and there's a lot of deck here compared to that income and so it's probably does feel very overwhelming but it's possible to to change all of this but it's going to require a lot of sacrifice and diligence on you guys on your ends and you can do that if you'll take a machete to some of this junk in your life you'll um you'll get a life back because right now you don't even realize how how hard it is to breathe yeah because you're just you're concentrating and you're being sweet and honestly you called with the exact right question and you already knew the answer to it that the ten thousand dollars just kicks the can down the road it's you're living in an unsustainable set of mathematics and the mathematics are kicking your butt and you you already knew that so you're you're on top of it you're gonna you got the stuff to win Rachel's right we'll get you signed up for Financial Peace University you know her case is almost like a stereotypical case study thing Larry Burkett used to say we uh spend the first seven years of our marriage trying to attain the same standard of living as our parents but it took them 35 or 40 years to get there yeah and we do it in four or five years of marriage they've been married three years four years and they just been get a house get cars get a house get cars get ready baby and you just gather and then you all of a sudden you look up and you go oh crap I can't breathe oh I'm gonna kill you the stressor I'm gonna kill my spouse my stresses level is so high and so you know and but that's the the problem is the stupid banks will loan you so much money that they put you in bankruptcy because they don't have an off button they'll just loan you money you know you can go get a credit card you can go on a trip you can't afford you can go you go down there and get a car and I'm like you know I was sitting with a young couple when I first started doing coaching many years ago their take-home pay was 2 600 bucks and the guy had a 1200 car payment which was a that's insane for it now saying 30 years ago that was yeah that would be like having a 3 000 or 2500 car payment now right but he you know 2600 our take home paid 1200 car payment yeah and he's like we're having trouble paying for our kids food and I'm like well no kidding I said you need to sell a stupid car man and he's like no um I can't sell the car I said yes you can because no God gave us that car I said God did not give you that car he goes how you know I said because the scripture is real clear the blessings of the Lord have no sorrow added to them and this has got sorrow written all over it Bubba and he goes well even the finance manager said it was a miracle [Laughter] I've been I bet it was a dead come miracle that some Bank approved your crazy butt little purchase but they will they will loan you so much that even the finance manager thinks it's a miracle can't believe it went through it must be the Lord wow I made another Saleh thank you Lord oh my gosh the guy in God's up there going I got nothing to do with this don't blame this on me don't put my name there oh hey the banks will loan you so much they just you know and you know there's actually people out there walking around that still think that if the bank will loan it to you it means you can afford it but the same people that thinks if you have checks left in your checkbook there must be money in the account mm-hmm people well because you can afford the payment you know what I mean like that's that's the mindset I can afford the the living situation that we're in because we're not behind on payments and all of it right so you're just staying right afloat and that's where risk and life and job loss and sickness all that never comes into play but when it does then that's your wake-up call gotta love it this is the Ramsay show [Music] Dave here you can find all of our shows with the Ramsay Network app on your smartphone it's the only place to listen to the entire back catalog of episodes download the Ramsay Network app in your favorite app store today [Music] [Music] live from the headquarters of Ramsey Solutions broadcasting from the PODS moving and storage Studios it's the Ramsay show where we help people build wealth do work that they love and create actual amazing relationships Rachel Cruz Ramsay personality number one best-selling author co-host of the smart money happy hour on the Ramsey networks and also my daughter is my co-host today open phones at triple eight eight two five five two two five Todd starts this hour in Phoenix hi Todd how are you Rachel hey Todd what's up I'm just calling up to uh ask uh how do I protect myself from an inheriting a timeshare and to add a little context to that question uh my in-laws they have expressed to my wife and her siblings that they plan on uh including the two times shares and two they're both and trust and pretty much I want to make sure that that times there has no way it ever getting to to my wife and I and our siblings have also expressed their their uh they they don't want to to inherit the time shares either so um is there anything that we do my wife and I too so the kids have figured out that Time Shares are basically legalized fraud one of the worst products on the planet but the parents hadn't figured this out yet they you know they they love it they they they think it's the best thing it's like so what I just said you you guys hate it they love it the parents still haven't figured it out okay so basically a timeshare is a liability it's a bill it's a problem which you what you're saying and I don't want to inherit a bill well you don't inherit a bill so you're not going to end up owning this it's not going to be transferred to your name under any circumstances because you won't sign the transfer papers you're just going to give them the old uh salute no thank you right now now could the time sir company foreclose on the timeshare and they can come back against the estate but they cannot come back against you so they may take some of the parents assets likely will likely will screw up the estate but it's not going to come against you it might come against what your wife would have inherited from her parents it might mess that up but it's not going to mess you you and your wife up because you're not liable for your for your in-laws stupidity does that make sense so they're what they're doing is they're poisoning their inheritance would there ever be a crusation with you guys yeah we I mean do they know that you guys don't want it yeah so so my wife and her siblings they have had that conversation and um but you know we we've all I guess benefited from the time shares they you know they like I said they love their points they they use them and uh you know they they provided you know room accommodations for us on trips and stuff but you know when time comes I mean if you buy a hotel if you're great if your mother-in-law buys your hotel room it's the same thing except she doesn't end up damaging her estate later yeah so yeah I think you guys need to explain to them that this is going to mess up their estate yeah all right well this is good news knowing that it can't ever come to my wife and myself no you can't because you you do not inherit debt but the uh and this is Dad it's a bill it's a liability but you but but the estate does have to stand good for the estate so anything that they own stands against anything they owe but you do not inherit debt that may not be an issue then because we did it expressed to us that uh who will the time shares will also receive a cash account I guess loaded with 20 grand the pay maintenance fees but no I don't want to 20 grand I don't want the time share keep the stupid thing throw it that's right no no 20 grand won't even touch it people pay 20 grand to get out of these dad blame things all the time I mean it's just it's a horrible business full of fraud full of scummy operators it's a filthy business and yeah you don't want anything to do with it no under no circumstances are we taking this timeshare you can't give us enough money to take it it's like it's a poison pill all right so that's really yeah I was just seeing if there's any other stuff to protect myself so yeah you're fine you you know how do I protect myself from my mother-in-law going 80 000 in credit card debt you don't have to because you're not liable but you're not going to get any inheritance because when they sell the house they got to pay the 80 000 in credit card debt before you get anything what you own stands against what you owe when you die but children do not inherit debt it will affect what they inherit because the debt has to be paid before there's any distribution net of the debt and so the stupid timeshare is a debt and it's an ugly debt because it's very hard to get rid of you get stuck in these things and one lawyer calls it legalized fraud and again we've worked with the timeshare industry they are the filthiest nastiest lyingest bunch of Thieves I've ever seen on the planet they're horrible they feed on old people they feed on dumb people they just it's awful it's a whole they put old people in buses and ship them over there lock them in a room and keep feeding them pretzels until they buy a dadgum Timeshare it's awful they're horrible business so have I been unclear I was gonna say how do you feel how do I really feel about time shares it's an end man I'll tell you it is it's great yeah you know you know it's uh other Industries do do bad things that are not good for you but this industry is particularly scummy I mean like the credit card people credit cards are stupid but uh they're straight up they just say you know it's 28 we're going to screw you and you're gonna love it and people just go take it and they just you know sign their but they can cut it up and get rid of it I mean at least you could get away from that yes yes I mean whole life people you know we're going to take all your money and give you almost no insurance and make you act like and and somehow make you think that that was a smart idea and we're going to screw you and you're gonna love it but at least you can cancel the policy you know you know car lease at least you can get out of a car lease stinking timeshares man it's like a oh yeah yeah sorry you just got me all riled up Todd I hate these I hate that well and they pray too on and old people and dumb people well yeah yeah but they they go and they target obviously specific people that they see out at a hotel and they're like hey we can rope you in yeah and and knowing that they probably don't even have the money to pay for this stuff I mean like it's yeah playing golf the other day down in dad gum Cabo and this guy comes up and goes hey you want your golf free and I'm like yeah and he goes all you gotta do is sit down oh get away from me I'm gonna take a seven iron to your house you should knowing that you're not going to sign up for it around a golf I'm gonna sit and listen to your crap not a chance unbelievable this is the Ramsay show oh [Music] [Music] foreign [Music] [Applause] [Music] [Applause] personality is my co-host Teresa is in Little Rock Arkansas hi Teresa how are you better than I deserve what's up well I am knocking on the door of 61. I have no retirement money saved up whatsoever I've been working the baby steps I've got my little thousand dollars and um hopefully Social Security will still be there when I retired 67. my question is even though I'm in the baby steps to my company uh matches four percent and I'm just wondering if I should go ahead and be putting that four percent into my 401k even though I'm still in baby step two so you're 61 and have no money none what do you make uh uh I bring home roughly 67 000. what is your debt a little over 69 000 on what uh student loan is 11. I have a car loan of 18. I have a personal loan of 12 and then uh I guess you could say another personal loan of 26 on a tractor why do you have a tractor uh well we're country folks where's your husband my husband is 75 he's drawing Social Security he is basically um disabled I guess you could say he has COPD and emphysema he's had three back surgeries so he don't need to be on a tractor who's the tractor not anymore broke people don't have 26 000 tractors well I have tried everything I can to try and sell this thing other than just letting it go back and letting them sell it for whatever they can sell it for no you're paying the difference tractors are selling right now what's what contractor is this it's a Kubota contractural cell uh well you haven't tried to sell this tractor I am price of what my payoff on it is well your payoff is a personal loan it's not a try is it again yeah does it have an actual lean on the tractor yes okay with who who do you owe Kubota uh yes okay well I would go to the credit union and borrow the five thousand dollars worth of difference and get this tractor sold and you need to sell your car too you guys are in emergency mode girl you don't buy 26 000 tractor when you're broke well this was two years ago before I discovered Dave Ramsey this past March what's your land worth um probably about three or four thousand your land is worth three thousand dollars yeah we yeah we it it's we've been an acre no for the whole seven acres your 26 000 tractor for a four thousand dollar piece of land well we hunt and I use it to clear deer leases and our hunting area and food plots yeah I told you I was country girl I'm not criticizing country I love country I was over Bush Hogan last weekend on my farm so I got that uh and just because it's therapy but yeah but okay uh I admit it was a stupid purchase yeah it is yeah spur of the moment purchase it gives you Joy but not as much joy as being as being broke is stealing from you right yeah and you're starting to look up and go I need something to eat other than social insecurity when I get to 66 67. so yeah yeah I if if I'm in your mode I am so scared I'm going crazy and I'm selling tractor I'm selling car I'm gonna get a two thousand dollar car I'm gonna work like a crazy person are you leasing the land did you say dearly hunting lease are you leasing it out to people it did no no it's land that other people own that has given us permission uh to hunt we're not having that physically pay for a lease oh you don't have to pay a lease but you're not receiving any lease money on your seven acres okay all right that's what I was trying to get to okay all right you have seven acres and literally the only value of it is four or five thousand dollars 500 bucks an acre is it Mountain Land or something no it's it it's just it's in between a bunch of uh errors that and nobody I mean it's paid for I know I know but it's just hard for me to imagine land that's that cheap 500 an acre land in Arkansas I mean you must be piping sunlight in there okay we are all right we are all right I got you girl only God knows where we're at I love it I kind of think I'm gonna like I think that I've got a feeling it's beautiful I really do but uh but anyway though okay so all right um Teresa why do you have a 11 000 student loan I've been paying on it since 1999. and did not take advantage of paying the last three years okay so you've got to get in high gear mode because if you'll get this mess cleaned off you can you'll have plenty of money to save and invest but you've got so many payments coming out you ain't got any room in your budget to invest and that's why we tell people to clean their debt before they take advantage yeah so the short short answer don't I want you to get free in a year by selling everything in sight I want your husband afraid he's going to be sold next okay and uh and uh you know and every deer in the area needs to be afraid you're going to sell him because you're going to shoot him and put him on something and sell him I mean oh my gosh you're unbelievable you've got to scratch up every dollar you can clean everything up and and knock this out as fast as you possibly can because you don't have any money to invest you don't have any room in your budget with what you described to me so uh and you've you got you know as you said you got six years so we've got we got to make we got to make hay while the sun shines and you got to get with it and um and Teresa it's gonna be it's going to be extremely uncomfortable just know that going in because it's going to be really uncomfortable being 82 and she wrote money 100 and a rusty track but you're you know what I mean but I'm like after Decades of living a certain way untangling that is much more difficult I think than when you're living some some way for five years and you're in you know I mean you're you're taking a life Teresa and you're turning on its head I mean you're going to be doing some really yeah newer ways of thinking that are going to feel very uncomfortable but keep pressing through even though it's hard and every time every time you do something smart I want you to say I'm doing this because I'm a country girl I don't want you to do anything else dumb and say I'm doing this because I'm a country girl quit blaming dumb stuff on country girl blame smart stuff on country girl because country girls do smart stuff and and you know this is what that's what you're about to do you're about to do some really difficult things and people in your life are gonna think you've lost your dadgum mind but what you're doing is you're trying to secure a reasonable last three decades two decades of your life you know and and that that's very important to fight for it's very important to fight for and it's possible Teresa we've talked to people it's getable five years from down from where you are and it's a completely different situation so you do you it's never too late we always get that question is it too late it's not too for me you know and not too late but you're trading a 26 000 tractor for 150 000 bucks in your retirement you're trading at 18 000 car for another hundred thousand dollars in your retirement you could have a quarter of a million dollars set aside with match if you'll get your butt out of debt now by the time you hit 67 68 years old you can get there if not maybe maybe 200 maybe not two and a quarter or maybe not 250 but you can get to where you don't have this sense of being broke and then if you want to go buy a six thousand dollar tractor to play with out of your two hundred thousand dollars and your seventy fine go do that but otherwise don't no no no and blame all smart things on being a country girl don't blame dumb things on being a country girl this is the Ramsey Show [Music] thank you [Applause] [Music] [Music] [Music] thank you [Music] Rachel Cruz Ramsey personality is my co-host today open phones at triple eight eight two five five two two five in Maine is John Portland Maine to be exact hey John how are you Hi how are you better than we deserve how can we help sir yes uh so I have a question regarding my 40K of student loan debt once I pay off roughly 15 000 of other debt do I make a charge to pay off my 40K of student loan debt or use a main tax credit program that over 10 years would result in me paying 5 000 the program would refund me my payments on as a refundable tax credit and should the program fall through at some point in three years or so down the road I plan to have the money saved to pay the loans back immediately so that I get rid of that debt but is it a wise thing to just make a charge at it disregard the program or Let It Go the 10 years and pay the 5 000. over 10 years pay it off John yep disregard the program um for many different reasons but one of them is just that you have the ability to pay this off and you will be debt free on your own regardless very quickly regardless of a program or the government's assistant whatever it is like you you have the ability John to pay this off and to be debt free and to move on with your life if Maine had a program that would give you five thousand dollars in one year while you're doing it anyway yeah we would take it but Maine has a program that keeps you in debt for 10 freaking years I'm not standing around in this sewage for 10 years no way yeah get your life back what do you make I make 65 000 at this point what do you do look into I'm an electrical engineer in the power industry okay how long you been out of school uh just a couple years I I did just switch jobs right I took a little bit of a pay decrease to just transition to a better work culture as you definitely uh elude on in your show yeah because you're not making much for an electrical engineer that's why I'm kind of like whoa yeah I know I had to take a bit of a pay hit and transition to um a different what other debts do you have John uh my other debt is roughly 15K 12 000 in credit cards to get me through school and then um I have 2500 in personal loan yeah you know most electrical engineers make like a hundred right yes uh and that's that's more you have a couple years of more than a couple years experience from five and um maybe a PE two but um I'm only a couple years out I would like to see myself around 80. yeah I'm making some changes to try to okay good see if that can happen but all right I just didn't want you to be settling down there about 65 cents on the dollar where you should be ending up so because you got a great degree It's a Wonderful It's a Wonderful degree that's right you got a great choice by the way the number one career field of people that become millionaires in America is engineer number two is accountant number three's teacher just to kind of give you an idea so that's uh of all I mean we did the largest study a millionaires ever done that's what we found so you're in a great place that's why I'm rooting for you I think you chose well there but yeah let's get the debt cleared off as fast as we can uh yeah and and the opportunity cost on your life what you could have been doing with your life while you were screwing around for 10 years with the state of Maine is not worth it get get this stuff paid off yesterday take six Jobs sell stuff get it cleared up really really really fast and go have you a wonderful life yeah and you know the student loan conversation is is Big because I think there's 40 million Americans that student loan payments will be hitting in October and it's something that we're actually going to address on our live stream on Tuesday September 12th uh it'll be at 7 pm central time it's free you guys so make sure to tune in because this the student loan there's so many of these types of things of these programs and even with you know everything that happened with the Supreme Court I mean like there's there's all this stuff there's all this chatter yeah how did we get here where do we go from here yeah and so being able to kind of just like clear clear all the all the messages that you're hearing and all the programs and all this repayment stuff and just say okay hey what can you do how can you take what you can control and knock this stuff out and to finally be free of student loans I mean our last segment you know there was a 61 year old who had been paying on it since the 90s so like 99. yeah so you guys I mean this is a it's a it's a big conversation to have but also one that we feel like we're able to help direct and guide you so make sure to tune into that live stream it'll be actually Dave you me Jade warshaw and and we're going to talk about this and for again a lot of Americans these payments are going to be hitting here in the next couple months and it and it is it is scary right hundreds of dollars now that you may not feel like you have the margin for you're expected to pay so September 12th at 7 pm student loan debt in America how we got here how we get out go to ramseysolutions.com student loans sign up for the free live stream we'll furnish it to you we're expecting over a hundred thousand people to view that and we want you to be one of them spoiler alert we're going to tell you to pay them off I know you're shocked to hear that we're going to tell you that so just let you know right up front that's how it is just like to show you how though as well walk you through exactly just like we just did scenarios yeah Shirley is in San Antonio hi Shirley how are you guys I'm honored to be speaking to you today I've been a fan for years well I'm honored to talk to you how can we help I want to know if we should help our daughter pay off some debt um she's got she was in credit card debt a couple of credit cards about fifty thousand dollars to a wow and well back the first of the year she kind of drank the Kool-Aid and she called him up and she made a deal with one to pay on her that card at zero interest the other one agreed to two percent interest good so this girl makes sixty two thousand dollars a year she's not a girl she's 56 years old and she is paying these guys 850 a month and I just feel like I'm watching my daughter as I rat on a wheel just what does she make 62 000. so I if you help her are you giving a drunk a drink or are you helping her for the last time ever use she's never going to use credit cards again as she learned her lesson yeah yeah um how much are you going to give her well my question to you is I've heard you in the past tell people that are in debt like this to call the credit card like if she knows 20 on Words is she behind with them hello Shirley surely we lost you yeah shoot I think we lost her if she's if we're behind try see if you guys can bring her back up I don't think you can I don't know I'll put it on hold y'all work on it um if she is behind you can settle it for pennies on the dollar if she's current you can't if she's got a deal where she's paying them 850 a month you probably can't if you are going to give her some money I would only do it on a matching basis like every time she sends you a receipt for uh I don't know how much you want to give her but if she sends you you know tell her you're going to give her every time she puts a thousand in you'll put a thousand in or something like that if you got that much money and that's how much you want to have yeah and making sure to surely that you are in a position that you're able to do that that's assumed and I would dig into like what that fifty thousand dollars what like what was that right and understand that hopefully you know that it doesn't need to be a pattern in her life that this is like the thing she just goes to all the time um but to really oh line six good we got her back we got her back all right we're about out of time surely but are you there I'm here okay is she behind on this debt no she's not behind then they're not gonna shuttle with her they're only going to settle if she's behind how much how much money have you got no I mean you're a millionaire okay yeah so I would not pay it all I would match whatever she's doing if you think that her behavior is permanently changed no more drinking if you're gonna give a drunk a drink don't don't be an enabler but if you're assured that her behavior is permanently changed and you want to match her she puts in a thousand you put in a thousand she puts in a thousand you put in a thousand that kind of thing I'd do something like that let her sweat through this a little bit to solidify she never does it again [Music] [Music] thank you our scripture of the day Proverbs 27 17 is iron sharpens iron so one person sharpens another John Wooden said whatever you do in life surrounds yourself with smart people who will argue with you [Laughter] I have done this this I have done that's his wise that's an art form for me that is so great I've never heard that from wooden very fun retro Cruz Ramsey personality is my co-host today Tina is in Pensacola Florida hi Tina how are you hi Dave how are you guys better than we deserve what's up hey I have any question I've been following the baby steps but I [Music] um in 2020 we did FPU and at the same time before the nine week class was over I was my breast cancer returned after 10 years of being gone so we kind of did things out of order because of that sleep um piles of cash that went into the emergency you know emergency yeah we don't we don't tell you to work the baby steps when you're fighting cancer well we tell you there's pile up cash I'm stage four so I'm always going to be fighting um so we've paid off 46 988 of debt in these last three years but I still have 9052 to go and we have our fully funded emergency funds almost fully funded it's twelve thousand dollars and I'm just I'm asking you to get that nine grand gone at the same time I'm scared to take out the emergency fund and pay off that debt what type of cancer do you have kiddo how old are you okay and so it came back with a vengeance three years it's been 10 years yeah that's an eight and then it came back in 2010. and then both of that was destroying occurrence and then in August of this month August 2020 it came back as stage four in my lungs I'm sorry I'm sorry um okay stable but I'm still I'll be in treatment forever so obviously yeah um so what yeah I don't think this is a baby I I would not say you do the baby steps normally when someone's going through a chemo and trying to get towards remission which is not your diagnosis um correct but uh uh we would say stop everything don't work on the baby steps pile up cash fight cancer in your case you're electing to fight cancer while having some savings and fight debt right correct and so we're not going to call this the baby steps this is just your choice instead of just piling up cash only you're saying part of my walk is I want to go ahead and hit this debt right that's what I'm hearing okay so I just I want you to I want you to know what you're doing is you're saying it's a modified version of piling up cash is all it is okay it's not a modified version of the baby steps and that's okay I mean it's a nuanced difference but so the point being that there's not a a baby steps answer to this it's more of a thing of you have how much in in your emergency fund now 12 192.98 and what's your household income tax and you have nine thousand dollars in debt left nine thousand dollars and fifty cents or nine thousand dollars nine thousand fifty two dollars yes I mean we're able to perform our expenses Twenty One Hundred a month because we own our house um but in Florida we're getting hit high with insurance insurance so um our expenses are 2100 a month so we have I've been putting 1800 a month well fifteen hundred a month towards that 300 a month yeah keeping it for other things that come up that aren't planned for so we don't have to touch our emergency fund sure okay here's the well here's the way I'm analyzing this and you you tell me if I'm wrong because I I don't know but in sitting in this seat I've had this discussion with people lots of times over the last 30 years okay and so what I understand about cancer and I've never had it and I've not had you know my spouse fighting it but I've had lots of friends and lots of people sitting in the seat I've talked to about it it's very very important that you focus on winning the battle right yes I mean you have to focus your emotional energy your spiritual energy on be on winning right now and and so having said that then I would tell you that whether you add to the savings or whether you pay down on the debt the answer is which one gives you the most peace because I want you to have the most peace so you can concentrate on the most important things living okay that makes sense there's not a wrong answer yeah so for for you Tina you may say I would feel more peace with this nine thousand dollars gone you know like or for some people it's like nope the minimum payment's fine I just want some cash over here right so it's kind of this you choose your journey with where you're at of what gives what what gives Tina the most peace because you need you need peace because you need power right and and boy look at you've got an amazing you've got an amazing tone to your voice I'll just tell you there's a lot of joy in your voice there is a lot of peace that I have and I the reason I was getting six hours to live I'm 36 months later and I'm good so um yeah yes so and talk about it with your spouse too I mean what gives you guys the best quality of life right now um and you know it might be that you know we'd rather instead of having twelve thousand we'd rather have 22 000 um or instead of having twelve thousand I'd rather have three thousand and no debt um you know what you know Rachel's right you choose your journey and that's what I'm telling you because that all of that is a modified version of piling up cash the reason for piling up cash and pushing pause on the traditional baby steps is to give you the power the emotional spiritual and even Financial power to lean into this fight and uh to enjoy the ride uh and uh so as much as you can and and that's what we want for you so um you're smart you're game on there's not a thing in the stupid column fight fight fight that's what's that that's what that's what we want for you we want you to have the the Peace of a warrior to fight and and to go into this and and not be going oh I'm doing this wrong by Ramsey you're not there's not a wrong pile up cash or pay off debt what gives you the most power what gives you the most peace so reminder when you have storm clouds in your life folks or when you have a unexpected thing you get a job layoff you get a a baby on the way you're fighting you get a cancer diagnosis you get a whatever like this it's not modifying yourself you just stop the baby steps and pile up cash you can come back later with a pilocation restart so if you pile up 50 Grand follow up 100 Grand and you know you could push play again and run the table Yeah on baby steps one through three you know just just like that you know if you got a big old pile of cash but in the meantime you can concentrate on what's important which in that moment is the storm yeah get it running into the storm not from the storm that's right and uh it's the old story of the Buffaloes on the planes run into the storm that way they're in the storm not as long because the storm goes over them faster since they're running into it and cattle run with the storm so they end up staying in the storm so be the buffalo be the Buffalo run into the storm that that's the old story and that's that's the thing so ah I'm sorry for praying for you girl if you can help you in any way your husband anyway y'all call us and let us know we'll help you any way we can this is the Ramsey Show we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace Christ Jesus [Music] okay hey it's Rachel Cruz if you like what you heard in this episode and want to know more about getting started on the Ramsay baby steps go to ramseysolutions.com and click the get started button we'll help you figure out the best next step for you based on your specific situation that's ramseysolutions.com and click get started [Music]

Channel: The Ramsey Show

Views: 123,398

Keywords: dave ramsay live, dave ramsey, dave ramsey channel, dave ramsey live, dave ramsey live show, dave ramsey live stream, dave ramsey podcast, dave ramsey radio show, dave ramsey show, dave ramsey show full show, dave ramsey show live, ramsey, ramsey solutions, the dave ramsey show, the dave ramsey show live, the ramsey show full episodes, the ramsey show

Id: ZopsynjErII

Length: 124min 30sec (7470 seconds)

Published: Tue Aug 15 2023