You Can't Borrow Your Way Out of Debt

this is the ramsay show you can be intentional about your character you can have money and a career you are the hero in your story [Music] live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the ramsey show where dad is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice i'm dave ramsey your host dr john deloney ramsey personality is my co-host today open phones at triple eight eight two five five two two five that's triple eight eight two five five two two five as we talk about your life that's why dr john's here and your money that's why i'm here and we'll probably both interrupt each other as we go along it's kind of what we do here jamie is with us jamie is in scranton pennsylvania hi jamie welcome to the ramsay show hi dave how are you better than i deserve what's up well i wanted to ask you about a little bit of a shadow plan on buying my first home um i have enough cash to buy it cheap fixer-upper and pay cash without a mortgage but the problem i have is i need a garage on site big enough to run a small business out of and i can't afford a property with a big garage and a house so i have to figure out if i'm better off buying the house playing casual than financing putting a building up or the other way around well i guess it's uh if it's the same amount of money that you're going into debt either way it's just whichever property you want to end up with right i guess but the being self-employed it's very difficult to get a mortgage um i was kind of figuring that if i had a property and help a deed to it it'd be easier to get a loan for the building no no no but it won't be the exact same thing because in both cases if you're struggling to get a mortgage you're going to be going to a local bank rather than a traditional mortgage company so of course the other option is to uh you know buy a property to live in and rent your garage somewhere else well the problem the problem i have with that is i'm sick of renting um and i have a i have a young son that i take care of every day he comes to work with me now and i'm reeling that realizing that in this post-code world we're going to live in that they're going to cancel school for any time somebody gets the sniffles so i figure i'm better off being prepared to have him there every day with me right yeah you know you understand what i mean i want to be able to work and and live in the same property so for that you're a single dad no no his mother works full-time and i take him to work with me so he doesn't have to go to daycare and stuff like that so i'm a full-time dad part-time business owner i guess you would call me you sound like somebody that's on the back end of a really frustrating trying exhausting year and who is just fed up with the way that the politics and the schools and all that's being run especially up there in scranton and i would suggest not going into a long-term debt a 5 10 15 20 year commitment financially over a current just an exhaustion and a frustration right now you know i i agree i i don't know when uh schools are going to normalize but to project that they're never going to normalize is is not accurate right um and i don't know exactly what's going to occur but is the entire public school system in america going to be uh apt to shut down with sniffles from today forward no is it in some places right now yes is it not in some places right now yes they're i mean we're in middle tennessee and it's pretty well open yeah and they're not freaking out they freak out more about tornadoes than they do covered right now and so um uh more likely to shut down for that uh so that that's to tell you that it has normalized here i guess if if you want to call the phrase if normalized is a good word i'm not sure it is a good word but anyway uh to to dr john's point jamie i agree i would not uh build a life around this current circumstance i wouldn't build a a debt and a home purchase around this current circumstance um and uh but it sounds to me like you just don't want to rent and you're using this as a justification too so i'm buying a house and renting a garage and if kids got to go to work with you a couple times while you rent the garage i just do that and um especially while this is a part-time business yeah yeah um or you know buy a house and have a small mortgage on that's got a garage i don't care and you can get that at your local credit union or whatever and if your wife has a full-time job and makes an income and you have a part-time business that makes a profit that you pay taxes on properly you are bankable for a loan in that case if you're trying to make zero money on this garage and show that on your taxes because you're taking everything under the table then uh you need to do your taxes properly and not take it all under the table and that'll help you get the loan by the way but you're also supposed to be paying taxes on that money or you're really not making any money you're not making a profit legitimately in which case you're not bankable so that's another thing and oh in which case you wouldn't need to be renting a garage either yeah because then you want a garage for a cool hobby uh where you're building something or making something that you like but you're not making money on it exactly alex is with us in sioux falls hey alex welcome to the ramsay show hi thank you what's up so i've kind of dug myself a pretty big hole uh relationship wise and financially um i'm about 55 000 in debt not including my mortgage with student loans credit cards and a home equity loan and i'm kind of just stuck i have i think maybe a hundred dollars to my name right now and i just yeah i couldn't i couldn't even afford my medication that i needed for depression last week and it's just getting to the point where i'm lost are you working yeah i make about 39 000 a year um actually graduate college tomorrow so congratulations that's man what's your degree thank you uh collision repair so i'll work on cars i work for a family business your family yeah my family my grandpa started this business and my dad owns it now and eventually i plan to take over it very cool so what's got you down relationally man some some you sound like things are heavy i know you owe a lot of money but what you got what's got you down on the other side of that um well i broke uh i was engaged last september and then things took a turn for the worse and then i started dating this other gal and things were going really good and then i got off my medication because i couldn't afford it and i didn't want to disappoint her so i didn't tell her about it and it really drove a stake into that relationship and yeah so things just ended this last week and so things have been really tough this week how much does your medication cost i was about a hundred dollars for the bottle which lasts how long uh about a month and a half okay tell you what man we want to hang with you a minute can you hang through this commercial break so we can talk some more yeah all right we'll be right back with you stick with me a minute [Music] hey folks i got a great option to help you pay for your education the army national guard the army national guard believes you are the next greatest generation because you have proven that even in adversity that you have what it takes to succeed that's why they offer benefits like tuition assistance career training and a paycheck to help you avoid debt no matter what your goals are the army national guard can help you get there visit nationalguard.com to find out more [Music] [Applause] dr john dolone ramsey personality best-selling author and host of the podcast that is extremely popular the dr john doloni show so you can join him there be sure to jump in and do that if you want to actually call him on that you can do it at 844-693-3291 or you can email him at ask john ramseysolutions.com we're coming back to alex and sue falls just graduated with a degree in collision repair he works for his family business that does that and i got off his meds and lost a relationship uh the same week that he graduated from college so a lot of highs and a lot of lows a lot of sweet and sour going on meds cost a hundred and something a hundred dollars for uh a month and a half's worth and said he can't afford him but he makes 39 000 a year so that's my first question alex it sounds me like you can't afford them and didn't buy them why um i guess i don't i don't know like i just don't know i'm not very good at saving i i see my friends go out and do all this stuff all the time and i feel like i should do it too and yeah how old are you i'm 22. okay how long have you been taking meds for depression um since i was a sophomore in high school so right around eight years got it okay and you know one of the cornerstone lies of depression is that this is always going to be this way right that's what that's what that blanket feels like that weight it's always going to be like this and one of the cornerstones of depression is taking a small step of healing from depression is another small step another small step getting people in your life and taking that other small step and suddenly the sun starts to come out right yeah but it feels real dark and heavy right now huh yeah i'm sorry man so something about you prioritizing alex enough to buy the medication that you need to get the counseling and relational help that you need do you think alex is worth taking care of yeah i think i need to open up more and be more open about what i'm going through because i don't like people seeing me struggle and let them know that i'm struggling and i want to be strong and just prove to people that i can do it on my own but obviously it's not working very well you're not alone in that my friend i'm having that same conversation right now i'm still learning still growing my friends that are my ages to learn is still growing it's a powerful lesson you can learn at your age is to let people in let them know that you're struggling and you want to want them to help meet your needs in some ways and they all going to work on something together all right how uh i'm interested in uh how successful you've been at completing this degree something made you able to you know cast a long vision like that and then go do all of the steps to walk out the door this week with that degree in your hand what was it that allowed you to do that because that sounds like something you could attach to to me yeah well i started out going to school for business and that was for my first two years out of high school and i was sitting in a business class one morning and i asked i just asked myself why am i doing this i like to work with my hands i don't want to sit behind a desk the rest of my life and it's been so how long was collision school how long was collision school two years so what enabled you to complete a two-year field of study successfully touch down spike the ball do the touchdown dance what enables you to do that because i'd like to attach that to you taking your meds i got a scholarship that no no no no alex you know i'm talking about what inside of you yeah you went to class every day and crushed it you did something you crushed this thing man i i don't know i like working with my hands was somebody up in your grill telling you you had to do it my family the the or the family business paid half of the money so i didn't want to disappoint them by dropping out of it and not completing the degree okay that's what i'm after so what if we said i don't want to uh what if we said i don't want to disappoint them by not taking my meds yeah because i'm going to call you on something brother i'm going to love you enough to call you can i do that yeah you make thirty nine thousand dollars a year you got a hundred dollars you can't say i can't afford them that's not true you can say i chose to buy other stuff instead that would be true but you can afford it is that fair yeah okay and when you say i don't want to let them down whoever they happens to be i want you to start putting yourself at the top of that list yeah i want you to love alex enough if you live your life trying to make sure other people happy that that's got an expiration date on it brother it's not a good way to go you ma hey listen i've sat with kids in med school i've sat with kids in law school who are two three degrees down the road from you and they did not have the courage you had two years in the business school to say what am i doing i want to do something that i actually love and you wouldn't you wouldn't did it i like working with my hands i'm good at it and you went and did it alex you realize what you did there you said i'm important and i'm worth it and so what i'm what we're suggesting is we attach that same thing to your meds because you may not need meds the rest of your life but you apparently need them today right yeah and you know that the heartbreak that you're experiencing right now is not gonna last forever you know that right yeah okay you're a brave guy the only person in the room that doesn't realize how brave you are is you and you're about to walk across the stage you're going to walk into a job that's going to have meaning attached to it because it's got your family name on the door yeah all right so i you're talking to two uh guys that have enough uh sh have worn out enough shoe leather over the years that uh we know something about you that you don't know that when you're 32 all of this will be in distance way in the distance in your rear view mirror if you continue to make progress along these lines with your career with your meds with your getting well and uh you can have a you know 10 years from today this could be like the you know the story that's in your past i mean that's what it is that's what it should be and that's what that's what we actually see in you that in this moment the no energy in your voice uh that you don't see in you and so all we're saying is dude like you prioritize going to class prioritize those meds prioritize getting well prioritize getting out in the sunshine prioritize being active uh prioritize making sure you're seeing your doc and that you're talking with them and prioritize that a decade from today alex is uh um you know not facing these things still right that you've got a community you got a gang around you that's going to laugh with you and hold you accountable and cry with you and be heartbroken with you and then take you out for tacos when it's over man yeah and that starts today yeah that's exactly right starts today and going back to your original call of making a budget for the first time is a great tiny step into what tomorrow's gonna look like it's it's a tiny step towards getting control of your life it's a tiny step towards saying you know what i'm a person of value i'm gonna learn how to do intentionality i'm gonna learn some new tools about how to make relationships and it's going to start with making a budget today right yeah i'm i'm we're going to send you a copy of the book the total money makeover we're going to show you how to do all this stuff um and you know we're going to walk with you so you call us back if you need some more help but you know let's tell the truth the truth is you can't afford it and you need to make the purchase just like you can afford to go to school and graduate and you make the purchase and then you follow through why because you're actually worth that and um then you don't make choices over your health and put you in a completely different role hey brother you call anytime we're here to help you this is the ramsey show [Music] we were drawn to christian healthcare ministries because we both had young families and we wanted to have more children and we had also just started a real estate company and needed to find health care coverage that would meet our needs we were attracted to chm because of its low monthly costs and the ability to negotiate medical costs down established in 1981 and accredited by the better business bureau chm is here to meet the needs of your growing family or small business check us out at chministries.org backslash budget we absolutely believe in it [Applause] [Music] dr john dolone ramsey personality is my co-host today open phones at triple eight eight two five five two two five thank you for joining us america we're so glad you're with us [Music] in the lobby of ramsey solutions on the debt free stage michael and mindy are with us hey guys how are you hey we're great welcome where do you guys live we're just north of seattle and ever washington very fun and here to do a debt-free scream how much have you paid off one million one hundred thousand dollars oh wow and how long did this take about eight years goodness gracious and your range of income during that time started at about 150 and went to 350-ish depending on the year goodness gracious what do y'all do for a living i sell real estate and i'm a high school english teacher awesomeness okay wow what in the world what kind of me did you pay off your house yeah we paid off um our home as well as for rental properties wow looking at weird people congratulations and we met at the break so you're in real estate elp right you're one of our endorsed local providers excellent i love it well done well done well done congratulations so what in the world put you on this journey eight years ago well we um tried some other methods we learned about uh leveraged investing so buying real estate and getting mortgages and things of that nature which was all well and good until well they had a problem and we had one particular property we called the pasco fiasco and um we ended up in about 60 000 of debt after two floods and uh somebody set it on fire oh my god and at that point when the when the bank wouldn't loan us any money anymore we decided we needed to try something different our insurance person actually said listen uh before you call us about this property again please make sure that no walls are standing don't call us again other than that you can almost feel him winking at you through the phone that's right that's right he says don't say i said this if it's on fire throw gas oh my gosh wow but you pushed through eight years yep yeah we we i think we found you shortly after that and went through the financial peace program and it was like oh okay we gotta get we gotta get serious about this so uh it was it was really you sold that property i assume oh yeah that was the relief right there was a huge relief when that one went absolutely okay and that got rid of a bunch of the debt how much of the debt was that that wasn't very much of the debt at all that was only about a hundred thousand oh okay um that's the only one we sold and we had enough income we could have sold them off and you know whatever to do it faster but we had enough income and ability and we wanted to have the rentals long term we figured we may as well just pay them off and i did the math and figured it wouldn't actually take us all that long so we did the long haul wow eight years though that's real yeah just plunking along plunking along one at a time they go away and then the house goes away or your house goes away and then one of them goes away out whatever basically debt snowballed are all of our mortgages so we paid the smallest one first just like if it were a regular debt and then just paid through the whole thing yeah so what was it like navigating this journey making the income you were making yet not living the life that you would think somebody making you know a quarter of a million dollars should be living for us it's pretty normal um we're not big extravagant people okay um you know we don't need a ton of stuff i mean we have a lot of kids so we had a lot of kid expenses but other than that i mean we're okay to live on just the regular stuff um and for homes yeah and for us it's more long-term planning and just kind of paying stuff off and putting ourselves in a place to be able to have a ton of fun in retirement and live like no one else wow so what do you think i mean this is obviously a huge number 1.1 million we don't usually get that um and uh but it's also eight years so it's quite a slog so what what is the difference in that and just knocking off some credit card debt in one year or something there's a lot of difference emotionally and everything else but what do you think the secret was that enabled you to stay with it that long and plow through a number that big i i mean i think that part of it is it became a lifestyle right it's it's there's a part of the beginning where it's like this is hard this is really hard because it's new it's a new kind of way of doing things we got to be serious about this and now it's kind of just the way we do things and it's just the way we expect it to be and hopefully we're you know we're giving that to our kids to say this is how you handle money this is this is the expectation going forward yeah wow and we took a little bit i mean once we paid because we borrowed i mean when we had those issues and we took out that 60 grand i mean we borrowed against our car that had been paid off we took out a personal loan we borrowed from friends i mean i had my mom go to the bank and borrow money for me so i could pay her back because they wouldn't loan me any more money so we were really serious during that first time i mean i was putting stuff back at the grocery store doing all the really hard stuff after we paid off all the non-non-mortgage or the non-mortgage debt at that point we got a little bit looser we would start to go on vacations and do things like that so we could have done it faster um but we didn't want to kill ourselves and so we gave ourselves a little bit of freedom and had some fun in the meantime well you're supposed to at this stage this this baby step is not intense this baby step is intentionality yeah right and so you're supposed to have a rhythm to it and so very well done you guys how does it feel to own that much stuff completely debt-free it feels good it feels real good it's not bad dave it's not bad at all but i did buy we bought our first one uh our first investment cash all right and so um that feels really good we're super excited about that and um you know they rented it out we're going to get our first check in like a month so we're super super excited it feels way better wished i hadn't done that the way it should be right yeah these things cash flow when they don't have debt on right they make money it's nice i got a bunch of them i love it and then you can buy another one with all that money and another one with all that money it's just it snowballs in the right direction then yep so well done you guys so very proud of you who were your biggest cheerleaders probably each other yeah honestly you weren't telling a lot of people this sin it's a big long run not a ton there's not a lot of people that can relate when you're at a certain level um and you know things of that nature so i mean we mostly just kind of talked about it we did our you know monthly meetings and you know things of that with our with our um budgets and everything else under the sun and just kind of kept going and i'd say early on it was you you were the cheerleader right you were you know speaking into that um because we were listening and and doing the program so we really appreciate all the things that that you were helped with we're so proud of you guys you're heroes man you did it i'm so so well done so very well done well congratulations and you brought the kiddos with you what are their names and ages so we have christopher who's 17 caleb and macy are 15. uh maya is eight and arya is seven all right very cool very cool we got a whole choir out here i love it it's great too they look awesome all right very fun all right michael and mindy 1.1 million paid off in eight years we gotta copy a legacy journey for you because that's definitely what you're the phase you're in is leaving a legacy and an extra copy of total money makeover for you to give away and pay it forward so thank you guys for making the trip all the way we're so proud of you and so honored to endorse you as elps as well thank you so thank you guys so much michael and mindy 1.1 million paid off in eight years 150 to 350 income count it down let's hear a debt free scream three two one [Music] you guys are amazing so so very proud of you excellent job way to go that's a lot of money that's a lot of money and real estate people in particular are i mean i grew up in real estate household i'm a real estate guy i mean i've had my license since i was 18. uh we in particular don't that genre of human doesn't think much about debt they don't worry about that and so for them to flip that switch and go i'm getting out that's a big deal yeah that's a big deal man i mean you just gotta and and then they go through a huge pile of it and they got all this property now making money yeah now this is gonna it's gonna flip it's raining on them so fast yeah that and go the other direction so quickly gonna be absolutely amazing now very very powerful the hat is wonderful smiling kids man that's the legacy right there man changing a family tree this is the ramsay show [Music] [Music] [Music] [Music] so [Music] thank you for joining us america we're so glad you're with us dr john deloney ramsey personality is my co-host today thanks for being with us are you tired of feeling stuck with your money like you'll never get out of debt or save enough for the future well it doesn't have to be that way you can make progress with your money and faster than you think but the only way to make it happen is with a budget that's why you need a ramsey plus membership you get access to the premium version of our every dollar budgeting app as well as financial peace university you plan out every dollar you'll need to spend or save before the month begins and you connect your budget to your bank so you never miss a transaction custom budget reports this thing is the best budgeting app on the planet and it's all part of ramsey plus and when you budget you get intentional with your money you will make progress really fast and you can start budgeting for free today to start your free trial of ramsey plus text trial 233 789 that's trial two three three seven eight nine thank you for joining us america james is with us in san diego hi james welcome to the ramsey show hi dave ambassador d how are you guys great man what's up hey um i had a question for you um i'm currently uh in work in agriculture and i'm a manager for one of the large farms in our area and about five years ago i started a business on the side and it's become pretty successful and my question is is i'm looking at having a profit in my business around 200 thousand at the end of the year um and i'm wondering what to do with that money if i and that's after retained earnings of around two hundred thousand and so um i'm trying to figure out what to do with the money if i should i had three options come to mind and uh one of those would be to pay off my house or use it to pay off my house another would be to open a step ira and then the last one would be maybe put in an account to save to purchase farm ground so i just want to get your thoughts on that okay well before i purchase farm ground i pay off my house and i'm assuming you're debt-free other than your home i'm debt free other than the home in the business and personally other than a home and a business what do you owe on the business i don't know anything on the business the business is debt-free as well oh okay i misunderstood the way you phrased that okay and all right so you're 100 dead free not counting your mortgage good and you have other savings i assume yes the business currently has around 200 and 000 in retained earnings yeah and do you have a person you have a personal emergency fund of three to six months of expenses yes good okay that's what we call baby step three you're out of debt and you have your emergency fund then the next thing you would do is make sure you're putting 15 percent of your household income away for retirement so that might involve the sep the next thing is kids college that's baby step five i'd begin to work on that if that applies in this situation and then baby step six is pay off your house so that's going to lead us pretty quickly to paying off your house what do you owe on your home a little bit under 300 000. okay so you would pay it off how if you had 200 coming out of the business all right well i mean i've just jumped down on it i wouldn't be able to pay it off completely you could if you pulled a hundred out of retained earnings well i'm and because of uh being in agriculture i don't get paid very uh i get paid very sporadically so i there's a lot of times i have to cash flow out of that 200 000 maybe 100 000 a month at times and then sometimes less than that you know but that's only two months then sometimes well but i mean one month might be a hundred thousand but then it on on average it averages out to about 200 000 for six months oh okay all right so that's that's that's setting you up to keep the business running then all right that's not it's not free retained earnings it's our already spoken for i got you okay that makes sense well no what yeah well it's above what i normally i don't have to touch it most of the time because of what's coming in but if it was a catastrophic something i got you know something happened and i lost you know that it would be a kind of an emergency fund for the business i don't normally touch it okay well i'm i'm moving towards paying off the house as fast as i possibly can so if you chunk it on the house then we need to find that other hundred pretty quick and get that house finished off that's my only goal here but yeah that's the answer is i'm gonna pay it right down the line on that that would be the game plan so dave uh talk to me about what's retained earnings savings account in business oh okay and so he's using it for an emergency fund or in his case but obviously it's um you know it's more than just a rainy day fund uh and for business you can use it for expanding you could use it for buying another business or buying a piece of equipment you could use it for covering a cash flow drain which is what he's worried about he's worried about a situation where he continues to have to write checks but doesn't have the money to do it and yes you have some money to do that or you go in debt is there a is there a tax break or something for calling and retained earning versus savings it's just a fancy way of saying savings account no i get tax day every year on it okay whatever i add to my business savings account the irs considers it personal money okay and i get to pay taxes on it so it is reduced by tax amount every year yeah it's it's no fun at all yeah that's the part where they love small businesses and we always laugh you know when you say congress loves small business horse crap no but by hanging on to some money to make sure your business continues to run you get taxed on holding it yeah yeah that's exactly right i didn't take it home buy something with it i left it in here to keep it running keep all these jobs afloat but i get to pay taxes on it so that's yeah that's bogus but it's been that way always so that's not going to change jessica is with us jessica's in jacksonville florida hi jessica welcome to the ramsay show hi dave and dr d um my question is i've been feeling um kind of lost after separation from um husband and i'm back in my hometown and i just feel lost separation from husband are you divorced uh i i'm having a hard time pulling the trigger on that one and we were about to sign the papers and we even had you know paid the lawyer and just had the pen to the paper and just kind of said well let's just do the separation first kind of thing so we're just doing that first and then probably be divorced before the end of the year so what what's the of course you're going to feel lost because you've you're in this limbo now why did you decide to hang on for a second even though you sounds like you already know where this where this how the story ends i'm not sure everything was so hard to let go of like you know when you got you know your kidney you got the tooth that's coming out and some of them come out just real clean with the no blood and then you got the one that's just really bloody it was just so it is like the second one just felt real emotional and messy and i don't know just having a real hard time letting go both of us but so why'd you decide to get divorced um just certain lifestyle choices that my husband's making kind of um and so kind of pushed me into the corner of having to do it and everything and it's it's just hard to let go um so why don't you trust jessica i don't know i think because yeah i um i feel i feel like a like a loser like i can't do anything right like no choice i make is right i try and try to make the right choice and everything kind of turned out wrong all the time so one of the most not everything i i do make some good you know choices one of the most devastating things when a relationship um is is falling apart when someone's making choices that impacts the other impacts you know their wife or their husband someone cheats on somebody someone steals or does something that um starts to melt a relationship we often you know mourn the loss of that relationship but the part that goes unspoken for is that we also lose trust in ourselves i thought i was wise and how did i make this decision and so jessica you're gonna feel untethered until you put a period at the end of this sentence and you can begin moving on with your life now [Applause] and anytime you stump your toe and you fall down and your hands get scratched you wonder if you know how to walk that would be a normal human reaction to lose some confidence so you're not as dumb as you feel like you are right this second the opposite nowhere near it you're very wise this is the ramsay show [Music] did you know you can listen to the ramsay show on your smart speaker just tell alexa google assistant or siri to play the ramsay show podcast check out all ramsay network shows on your smart speaker today this is the ramsay show [Music] you can be intentional about your character you can have money and a career you are the hero in your story live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the ramsey show where that is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice i'm dave ramsey your host dr john dolone ramsey personality is my co-host today thank you for joining us america we're so glad you are here open phones at triple eight eight two five five two two five that's triple eight eight two five five two two five rosa is with us in london england to start this hour off hi rosa how are you hi dave how are you better than i deserve what's up thanks for taking my call i'm such a big fan um so i'll um i'll ask my question and then give you context i'm in the middle of buying a house in london and i'm having second thoughts and thinking of pulling out because of my lifestyle and i'm newly engaged and i'd love to know what you would do in my situation so i'm an actress so my life is very nomadic which means i spent like i spend several months per year abroad for work but all of my family and friends are in london and i've always wanted a base here and i like to have a place to call home when i've been away for so many months but now i i've just got engaged my fiance's based in canada so our aim is to move to la um so would you still purchase a small property in london in my situation and also even if i am based in la i'll probably end up working in london a lot anyway i'd love your opinion thank you wow this sounds so sophisticated i feel unqualified to answer your call based on everything you just said just because you sound more smart and more lovely and just more just a better person yeah i don't know she's a better person than you are i could i could feel it through the telephone line oh that's hilarious okay so um what will your household income be in a given year on average um the last three years it's ranged from 500 000 to 50 000 so let's say an average let's be conservative an average of like 150. okay so that'd be like a bad year yeah and uh that's just you or your fiance that's just me what does he make um on average i'd say a hundred okay so a bad year is a quarter of a million and you're going to buy a home to live in in l.a and what would the what to live i said la is our well eventually once we get to l.a we would love to buy a home together combining finance yeah but right now um right now london is where i'm from so i'd always wanted like a song i got that part but i'm saying your your marriage home base will be la because this is where you're going to combine your lives and then london is like where you are from obviously and you spent a lot of time there so that's like your second home yes okay and what would you spend on the second home um the place i put in an offer for but i can still back out of obviously it's 375 pounds have you got the cash yes okay and i've i've i've been i've been debt-free all my life i think i've kind of been following your plan without knowing it and now i found you i'm so excited okay well here's the way i would look at it i'm going to kind of reverse engineer this a little bit let's pretend i'm talking to a couple that's making a quarter of a million to a half a million and they live in la and they want to buy a second home for 375 000 cash in london because they spend a lot of time there because of her family can i phrase it that way it's still the same thing isn't it yes so this is like someone in the states calling me and saying i want to buy a beach house it's a second home in a sense it's a toy uh my kids were in college in a in a town in a city uh several hundred miles from here and i bought a condominium there because we were gonna spend a lot of time there going to football games and seeing our kids there so it's that kind of a thing right yeah so this falls under the heading of it's a toy it's a second home yes you can buy it if you can afford it based on your income and if you can pay cash for it so you happen to be doing it backwards because right now it's home but it's not always going to be home much longer yeah and so would you say yes i would buy it to only but if i don't buy it cash like say i chose to save some of my money i would not buy it unless you pay cash for it okay if you called me and you lived in l.a and said i want to buy a house in uh cancun or in martinique as a beach house uh but i want to go into debt to do it i would tell you don't don't do that i would say pay cash for it or don't buy a toy because a second home is a toy and even though this doesn't feel emotionally like a second home because you're leaving there and it has been your home it's going to function in your new life as a second home and so i'm gonna treat it like it's a beach house a vacation house a lake house a mountain house or whatever uh in this case it just happens to be in london and so um i've got friends that live in la and they've got um apartments that they own in in new york city because they're back and forth they're by coastal they're back and forth all the time and they buy it just so they can not have to screw with hotels and stuff and they've got the money you know and so but it's a second home it's not a it is not a necessity of life you could go back and the times you're back there you could just rent an apartment and it wouldn't kill you and rosa if you and i had an hour to sit down and talk through this a little bit deeper the next question i would ask and this isn't for this show is something i see dave often when people are about to get married is they want to go stake uh put a flag in the in the ground back where home was trap door just escape just in case it's the escape hack i need to make sure that i don't lose my roots because i'm about to go tether to somebody else and i need to hang in there with that in mind it might be okay not to buy it and that's it almost got the sense that rose was asking for permission to not buy it and do i not need it but either way know that going into to marriage it's a safety valve you are joining forces with somebody okay all right and not having this little purpose of this is just to come back and visit i'm gonna take that happens a lot right uh i'm gonna i'm gonna invest in this small little business back in my hometown or with my old high school buddy or whatever the thing happens to me when people are about to get married it just feels to go all in so marriage is you are pushing your chips across the table i'm all in that is really insightful i have not thought of that that's very very interesting did not hear that in her voice at all uh but that's a possibility because the way she did alfred up three or four times not to do it and and i don't want to pay cash and and i'm gonna i would it's gonna be my money for my little thing because then we're gonna get married and move to oh and i get that i get it i get it i get it it's like keeping the old bachelor pad that's exactly right i'm gonna keep paying rent on this little place yeah um wow oh very cool but you can you can man there's so many tethers when you're about to get married dave right there's so many well and that's uh there's so much going on i mean you got canada uk and la all mixed together and a transient job right where you're moving everywhere where you're already gypsified inhabiting other people for a living right what a fun life just an incredible life inviting other people into your body that's what it is man you have to become somebody's zombie body snatcher so great that's interesting that's interesting not a call we get on the show very often but you know what i'm not going to lie that touch of sophistication i think helped the show a little bit interesting i'm saying we just need a good i'm gonna tell you what's getting a good english accent a good australian accent at least once a week kelly can you arrange that for us just make sure you get a caller on that sounds smarter than we are fairly often oh wait a minute no comments no comments from the booth we've had 10 of those comments from the food this is the ramsay show [Music] stop paying your overpriced wireless provider and switch to puretalk they use the same network as the larger providers for much less for just 30 a month get unlimited talk text and six gigs of data with no contract the average family saves over seventy dollars a month by switching to pure top just go to feartalk.com and enter the promo code ramsey to save 50 off your first month pure talk simply smarter wireless [Music] ever asked a question how much money should i be saving how much debt can i pay off how can i pay off debt faster what's the right way to invest investing scares me hey here's the good news you don't have to figure out the answers to this on your own ramsay plus will guide you every step of the way with ramsey plus membership you get the digital teaching that you need with financial peace university to really understand money so you can be confident you're always doing the next right thing plus our world-class budgeting app tools and guided action steps to help you make progress on your money goals fast it means no more debt cash in the bank for emergencies and a real plan for your future ramsey plus helps you get small consistent wins every day that lead to big results and lifelong habits to get started today with a free trial text trial to 33789 that's trial to 33 789 dr john deloney ramsey personality is our co-host today our question of the day comes from blinds.com the number one online retailer of custom window coverings you get free samples free shipping and with the new promos they run every month you'll save even more use the promo code ramsey to get the best possible deal all right today's question comes from jennifer in alabama jennifer writes our daughter has been struggling with college for a couple of years she's seeing a therapist for anxiety and depression she recently decided to drop out of school and work full-time she refuses to move back home and wants to keep the car we provided her for school we told her to come home figure out her next steps and give the car back or she can finish school and keep the car she sees this as a punishment and thinks we are unsupportive villains any advice on how to keep a 21 year old who seems to have already already made up their mind dave you're a dad who's had a couple of three or four 21 year olds i've got some man this one gets under my skin a little bit so you go first um i don't think jennifer that you're involved enough in her situation emotionally uh to meet out of this boundary it sounds like you don't believe that she has anxiety and depression and she's just screwing around and so you're gonna punish her for screwing around um that's the way this sounds to me so if you're acting on that then that's okay if she really has anxiety and depression and you really believe she does then you're completely out of line give her the car help her she's trying to find her way through a real tough mental situation and you know but i i think you guys are pretty detached from her emotionally is what it feels like yeah the note i wrote is this is a relationship issue right now yeah and you're trying to flex on a 21 year old who's struggling and sometimes for a college student with obviously with high expectations and high family support to say i'm gonna take a break that's a hard brave move it's not always the best and sometimes people are into drugs and crazy but sometimes it's a hard brave move and this looks like well then you can just fill in the blank and you know what as a parent you can do that it's your car you can do that and i've said your question was how to help her that's right the question was not what should i should i take her car away the question was how do i help her that's right and if this is my kid i'm going to get on the next bus or get in my car and we're going to go have a meal together and say i'm i'm something here tells me this is a long time coming and um there's a there's a deeply fractured relationship it's just hard to hit somebody in the back of the head unless you got your arm around their shoulder you know and it feels like that you're trying to punch from over here not from your not from your arm around the shoulder yeah um and with somebody struggling and they say hey i need to take a step back and your first thought your first response is then you need to do what i say that's hard yeah it's hard and at the same time i want to be clear this is your car come get it but it may cost you your daughter yeah your question was not what your rights are your question was how can i um help guide a 21 year old who's already made up their mind right um i think i you know i'm going to do a i i'm reading a lot between the lines it's hard to know in this situation but i'm reading a lot between the lines that your relation your emotional connectivity and relationship with her is not deep enough to make the to make to to she's not listening to you and that tells me you don't have enough connectivity for her you're not persuading anymore you're just you're just hitting with a bat you're not even a safe place enough a safe enough place to come home when she's falling apart right she's got to go find somewhere else we we talk a lot about boomerang kids who can't wait to run back to mom and dad and you know there's a whole industry about teaching mom and dad how to draw boundaries but kids think that mom and dad are safe in that situation your kid's struggling and she doesn't you are not a place that she can even be around now she wants to keep your car fair enough you're not a place that she can go and that's where the car the car doesn't matter no that's what i think um the advice on how to help guide her is spend more time with her right and this looks like help guides him to listen more and talk less how do i flex more yeah how do i listen more and talk less and um gain the emotional proximity earn the right to persuade and guide and that's creating you've lost you've lost this right that's what we're both seeing she's lost the right to persuade yeah that's what amounts to for sumps through something we don't know what and my guess is this is a long time it could be the kid yeah it could be the kid but somehow you lost the right to persuade so keep the car don't keep the car i don't give a rip about the car um but get in your car and go sit down and meet you if it's not an expensive car just go to her i wouldn't give her any more money until we've got these things repaired she's a 21 21 year old making a 21 year old grown-up decision so she can go make her 21 year old life yeah i'll go along with that and i'm not going to support things that i don't have that i can't speak into uh so if you're gonna wall me out for whatever reason my fault or your fault then i'm not gonna throw money in over the wall that's not uh that that's just uh that's enabling on a steroids but but if you throw the car into the mix and then use that as a leverage to just start to rebuild a higher quality relationship to persuade that's your only help i think as a dad of kids grump having grown kids is the most difficult version of kid raising kids i mean because you no longer get to tell them what to do no you have to persuade them and so i have to sit with my son who's getting ready to turn 30 and talk him into stuff like i have to talk you into stuff you know i can't just make you do well i can as your boss but then it's the same thing it's a temporary thing so i have to persuade adults in my life to do things that are even for their own good whether they're my kids as adults or other people's kids as adults and so you just cannot you and it was just easier when i said you have to do that because i said so i read a line the other day dave that i'm still processing in it and when i hear a line like this i'll sit on it for a while but here was the line i want to be the kind of father that when something happens to my child he doesn't think oh crap we can't tell dad we can't let dad find out i want to be the kind of dad that when something happens to my kid he says oh crap we better find dad we better call dad and not that that means that we're not going to hold people accountable but i want to be the the sentiment behind this is i want to be a safe enough place that my kid trusts me that when things get sideways i'm going to walk alongside them and i haven't wrapped my head around that yet dad may kill me but he'll help me first that's right that's right that's right that's the dad i want to be i do want the threat of death over them he'll do it quick and painless right this one's going to be slow and miserable right yeah yeah but there's something about building that safety as a parent that i'm going to hold you accountable but you're never ever going to doubt that i love you yeah and that's a hard balance right yeah that's exactly right it's a and i think it's even harder the older they get yeah when they're three you know you just make them do stuff is it okay so let me ask you this dave is it hard because you have a desired future for them or is it hard because because i like people doing what i tell them to do yeah you're letting the control go right that seems to be the hard part yeah i mean we all do oh no it's like i told you you know listen if you turn left there you're going you're not going to get the where you're going you need to turn right yeah it's and then i have to then when they go around the block six times i told you you know it's like you keep driving a car like that you're gonna wreck it you know you keep driving your life like that you're going to wreck it and sure enough they do you know and but uh you can't and the only way we learn stuff is about wrecking the card no it's not the only way you can watch other people i know you can listen to your own man who wrecked a bunch of cars and knows better you know you don't have to go broke to learn to not do what i did to go broke you can you can you can do better and uh thank goodness oh my goodness parenting a little too much authenticity here on this segment of the show this is the ramsey show [Music] [Music] in the lobby of ramsey solutions on the debt free stage daniel and sarah are with us hey guys how are you hi we're good how are you wonderful welcome welcome good to have you so where do you guys live bowling green kentucky ah an hour and a quarter away that's right yes sir that's right i took delivery on a new corvette at the museum and did the tour of the plant and a week later the museum caved in so you got to did you get to come back and see our sinkholes i saw the sinkhole right before it happened i was standing over the top of it and a week later i was like i could have been in that hole yeah it said they put it all back it's supposed to be beautiful i haven't been back up since they did it it is it's gorgeous for those of you that don't know the corvette plant is in bowling green kentucky and the corvette museum is in bowling green kentucky and i don't know what was that five six years ago i guess i think so sinkhole swallowed up half of the museum all these vintage vets are in this hole for those of you not watching on youtube dave has a tear in his eye just talking about definitely i'm completely sidetracked here these poor people came to do a debt free screening i'm talking about so how much debt have you guys paid off we paid off 101 240 dollars i like it and how long did this take 12 months wow and your range of income during that time about 144 to about 180 that's a nice jump in 12 months and what kind of debt was the 101 um we had some cell phones hvac units student loans a jeep lease which i didn't know it was leased at first and then um i had bought a small house the day after our first date and we had a foundation repair okay so what was the big one um the small house after our first date yeah the biggest was um such a great line bought a small house right after our first thing again for those of you are watching there's a story here i'm just saying he said jeep lease you looked at him as though i still might kill him and then you mentioned the small house shabbat well you know i really didn't know that we were going to get married and so i was looking for a place for myself to live so i purchased a really like a really small house i was going to be able to walk to work i was going to get a small dog i was going to eat thai food every day i just had this whole plan you know i have a corolla i'm happy with it [Laughter] he carries the corolla yes so fun y'all so okay so what was the big number out of the 101 um the small house was about 48 000. okay and then you paid it off or did you sell it we sold it okay all right good that helped you move it that much in a year well yeah that 48 came off you know of course immediately but the money that we got from the sale of the house was basically my down payment back and during the middle of our debt snowball we learned that we had a foundation repair and so that was about 30 grand extra oh so we um you know selling that in the 101 or an audition no that was an addition because that wasn't a debt we just cash flowed that okay wow it was a yeah like this is a test yes right in the middle of it you have to have to not lose your mind yes yeah way to go guys okay so how long you've been married um about a year and a half okay so not long end of the marriage you said we're gonna clean this all up yes you put it all in a pile both of you brought your stuff in put in the middle of the kitchen table and said oh crap and tell me the story what happened well actually um i lost my first wife in 2019 and she did not have any life insurance or anything so i had tons of debt you know to take care of at that point sure and um you know i there was a lot of times where i didn't know if i was gonna be able to buy groceries you know it was it was a tough time and then not long after that her aunt who i am i used to work with called me up and like hey you know would you uh my my uh niece sarah i just want to know if you want to go out with her and i said heck yeah i remember her from high school i had a crush on her in high school so you know we've been on our short squat with me yeah exactly that was that was exactly you know my first thought so you know we went out we hit it off great and then you know after my second or third date i had a huge interview with her like she was asking me everything he calls our dates job interviews yeah because i mean you know how you know how much debt you have you know you know what what's your plan i was running down numbers i'm a nerd believe it or not what kind of plans are you doing so you know once we you know once we got married she's a big dave ramsey fan she's been you know listening to to you for years and years and so she kind of got me on board with wanting to do this now she was debt free before except for the little house you know before i came in the picture and then i just screwed it all up okay no no she brought half of this in there yeah 48 of the 101 yes so you split it down the middle you just it just came about it differently you might call one a little smarter than the other but you had a tragedy too yes so yeah that makes it the whole process so the good news is in 12 months you did it so how does your income go up 40 000 in one year um you know i had a child when i was 20 and so being a young mom work is not anything i'm scared of so i picked up a second job and the company that i work for was offering some bonus money and some incentives to go help at a hospital in pennsylvania so i took as many of those assignments as i could get even spent the entire christmas holiday working in pennsylvania in a hospital just you know and that really put us over the finish line and then um also he sold everything that even stuff that was nailed down like i got home from work one day and he said uh did you notice that everything's off the walls i was like because i just don't care about things like that and so he had taken everything off the walls and it was sold whoa and when we were combining households we just sold everything we took a bunch of stuff to goodwill um he was a little nervous about cutting cable but we cut cable we cut satellite radios oh my goodness we cut the gym membership which was interesting because he had me work like use me as a piece of workout equipment one day and i was like what is this about um what else did we do we shopped all of our insurance to make sure we were getting the best rates on everything um gosh we you know just literally everything you teach we just want you to dial down every little every little corner to make it work yeah for me so when you look back on it the two of you and someone comes up to you and they say how do you get out of debt in 12 months what do you tell them the main thing they have to do is to me you both have to be on the same page you have to work together if you've got one person that's 100 percent in and the other one's not it's not going to work out very well and we were both there we both wanted it bad you know and especially me and i felt so bad that you know i know we both brought dead in there but i just felt so bad that she had to be part of my debt but we're married you know we put our accounts together which we've never done in our previous relationships so you know it just it worked out god centered to me at the right time and it was perfection wow hey you know what he sent her to you too man oh yes he did right yes um you know he was the he was the answer to so many prayers yeah and here's what's cool one of the biggest challenges with when when folks get married and they've had previous relationships one of the hardest parts is how do we get on this how do we find a new path right i've got this path experience hey man y'all launched out of the gate on a 100 000 gazelle intense mission yes and now you you guys forged a path you're just looking better locked man you just blaze the trail through the forest with you just put your head down and he's a good guy to get behind right because yes he is over that head you all cleared a path and now you're off to the races right you know a funny story you know i have a 20 year old daughter and he has a 14 year old daughter and um it was a december of 2019 the youngest daughter wanted to get her ears pierced and she had plenty of money to do it so we took her to the mall and when we get to the mall she starts crying she wants daddy to pay for it and she's got her own money so i said no you know you've got your no money you can pay for this then she tries to negotiate well i'll pay you back later or can you pay half of it and i'll pay half of it and so the crying went on and on and on and finally he leans over and he whispers you know should i just pay for it so i you know took this big hand and i was like no we're going to get through this like this is a this is a teacher she's 14. is she crying about this this is a teachable moment but since that time we put her through the homeschool curriculum and so she's got her own she's got her emergency fund she's uh she's working for commission to do chores it's you know we've just we're changing everything absolutely i'm so proud of y'all we got a copy of legacy journey and total money makeover for you 101 thousand dollars paid off daniel and sarah bowling green kentucky they did it in 12 months making 144 to 180 what a great story count it down let's hear a debt free scream three two [Applause] this is how you do it baby touchdown how fun it's so fun what a great love story this is the ramsay show [Music] dr john deloney ramsey personality is my co-host today this is the ramsey show i'm dave ramsey open phones at triple eight eight two five five two two five jessica is in lancaster pennsylvania hi jessica how are you i'm doing great dave thank you for taking my call it's an honor to speak to you you too what's up so um i i have a question about some inheritance that i received when my dad passed away um my sister was purposefully written out of the will and i have always wanted to i think it's the right thing to share something with her but i don't agree with the way she's financially lived her life and the decisions she's made so i do not want to give her cash the decision i made was to have some money set aside for wedding whenever she gets married and to make a one-time principal payment on her student loan that she's been carrying and she now thinks it's a waste for me to make that payment and she thinks you'll agree with her which i know you won't um why was she why was she cut out of the wheel um the relationship between her and my dad fell apart years ago and i believe my dad's stubbornness led it to not getting repaired okay that's so sad yeah yes i know it how long has he been gone five years how old are you and how old is she i'm 46 and she's 43. and um and obviously you guys have a pretty good relationship yes we do okay and how much money are you talking about i i want to make a 20 000 payment towards your student loan and out of how much money did you receive um i think about 150 total okay all right there's a part of you that is act feels somewhat maternal towards her that you don't trust her to make good decisions and so you're gonna you're gonna give her you're gonna give her a gift because it's the right thing to do but you're gonna direct how it if it feels like a weird relational dynamic for between sisters is is is that she's responsible with money right um is that is there a discomfort there between the two of you said she was gonna say that was a waste of a gift well yes because the direction she's going is she's she's not doing anything to pay it off with any urgency she's just writing it out until it gets to 25 years thinking the balance will be forgiven because of an income based repayment plan and what i'm offering to give her and what she would pay over the next 13 years so that happens would not total the total balance of the loan okay well there's a lot of things going on here um first let's just talk about the public service student loan forgiveness program as of today the last night i'm sorry she's not even public service loan forgiveness why does she feel oh she just feels like in general it's going to be forgiven yeah she found something online that says the the income based repayment plan when the loan yeah it hasn't been so far 227 000 people have applied for student loan forgiveness under these programs 3 700 out of 200 000 have gotten it that's less than one percent and so um her she's um uh she believes a lie about getting out of student loan debt so that's that's one piece of information so in that sense um you know we we've got other problems with her student loan other than whether you give her money or whether she pays it off because that student loan's not going away unless the biden administration and the democratic congress decides to forgive student loan debt which is possible uh for the first time in our history um and uh uh you know there's obviously a lot of rhetoric in the last four or five months uh since the inauguration about that so and there's no way to predict what they will actually do or if they will do anything other than just talk about it you know their congress so um um normally so uh normally in a situation like this i i want to give because it's something that i think is the right thing to do and it always is hard when you come up against this moment when you think by by giving the right thing to do i'm going to enable somebody to hurt themselves further is that where you're at jessica or you just don't like how she's spinning it i don't want to enable her bad behavior because she's obviously not going to put it towards the loan it will most likely get at least somewhat wasted and spent uh and i really want to help her yeah if um yeah is there if we could take the student loan out of the thing it would change the equation for me i mean does she have a car loan or something you can just pay off no she doesn't uh this is her only dad this is her own this is her only dad is this her only debt as far as i know yes okay and the interesting thing is as you all have talked about it to where the language has changed to where now she feels entitled to it i know i'm entitled to tell you what to do with the money you're giving her that was interesting part of the thing too yeah so wow i don't know what to tell you i um i think i you know here's an idea when in doubt don't and just say you know what i want to do something to honor you out of this inheritance because i think you got a raw deal but i also don't want to participate in a delusional situation and your student loan is not i don't think your student loans going away um and so how much does she owe i think 92 and what does she make she makes now about 60. okay um you know i i might offer to match her for every five thousand dollars she puts on you'll put five thousand on it um i like that idea but um but but but you know and it's just it's just you and her talking and you're just saying i you know you're an adult you have the right to do what you want to do sister but but i also have that and i i cannot give you money for i agree with you that giving you money for this is going to end up being wasted because you're not going to get it paid off and then it's going to be a bigger problem because you think it's going to go away i don't think it's going to go away so i really don't want to put the 20 on that and so i don't know how to give you money because you're mis because i think what you're doing with this is irresponsible and so i love you and i want you to win and so what we're going to do right now is nothing i'm just going to sit back and watch a little bit and and if you decide you want to get after the student loan and i'll put some money towards it with you and i'll help you but until you do i right now i'm just gonna watch because i want to do something but i don't know how to do it right now and so what i'm gonna do is wait okay and in the meantime should i do something different with it other than it's just sitting in my face with the camera bank yeah well you can do whatever you want i mean it's not it's you can put in a mutual fund if you want then you can pull it out and give it to her but um later on but it's just the the biggest thing here is it's just all tied back to this heartbreaking relationship between her and your dad yeah that's the part i don't like about it dave is it because dad did what he did now she's holding this and she's gotta make one of two choices either i'm gonna become dad and i'm going to use my relational position and my money to keep you to not share it with you because of your decisions your choices so i'm replaying what just happened no that's true or i'm going to give you money knowing that i'm just throwing this i'm throwing it in the wind that's right and so my impulse um there's always wisdom and they just just it's just do nothing that's all i said yeah and then my thought is you know what i'm saying i'm free myself from this and so i it's the same impulse just the other side which if you feel in your heart's the right thing dad did a raw deal the right thing is to give money the right thing to do is to give money and forget it don't worry yeah and that's what i wanted it's not on you well it drills down to if someone's if someone's doing drugs someone's hurting themselves versus they're gonna go buy a dumb car right um but man especially when you're holding that money you could really help them with their student loan it's hard it's just a messy situation there's a 41 year old yeah so it might be down to what you're saying i don't disagree with your change in direction on that it's i just give them the money or i wouldn't yeah and i just call it call it yeah i like your advice better than mine this is the ramsey show [Music] hey it's kelly associate producer and phone screener for the ramsay show if you would like to do your debt free scream live on the show make sure you visit theramsieshow.com and register we would love for you to come to nashville and tell dave your story [Music] this is the ramsay show [Music] you can be intentional about your character you can have money and a career you are the hero in your story [Music] live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the ramsey show where debt is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice i'm dave ramsey your host dr john deloney ramsey personality and host of the dr john delaney podcast and youtube show is my co-host today open phones at triple eight eight two five five two two five that's triple eight eight two five 825-5225 haley is in denver our first call this hour hi haley how are you doing good thank you um my husband and i are currently on baby step number two um our annual income is about 115 000 per year and we have about 75 000 left in debt to pay off so i'm thinking that we can be completely debt free within the next 24 months amen um and my question is where do we prioritize family planning into the baby steps if we're facing an untraditional path to start our family through surrogacy or adoption uh well there's not a baby in the baby steps um you have babies when you're ready to have babies but you throw a curve in there when you say there's a different kind of a cost here okay and so um you know i i think uh and the i guess the other possible uh question that comes up that's similar you're not asking that question but this similar is an in vitro uh you know when do we do that and i'm you know i'm 36 and i i you know i don't want to wait two more years and that kind of stuff i get that question over the years a lot that's in the it's in the same bucket of questions um and so uh i i think if you're gonna do surrogacy or uh adoption you would do the uh you would learn so much about these two things that you would find that there's a vast spectrum that people pay for these things uh 5 000 to 100 000 spectrum yeah we're seeing about 45 to 60 000 depending on which route we take and if it's in the united states or international and my husband is 35 so age is something that we're definitely thinking about yeah i think you've got more research to do okay uh we've worked with many many many families uh that have done adoptions for half of your low number or less and so um i think you're getting uh the bentley pitch rather than the chevrolet pitch on the adoption process so um no it does not it doesn't know it does not cost that much and so um i i think you've got you know here's the thing when i when i the more information i gather and the more options i have the more power i have in making a decision and i i don't think you have enough options yet as a matter of fact i'm sure you don't because the prices you're quoting me are ridiculous well that's mainly for our first choice which would be surrogacy so that we could have a biological child the adoption would be secondary okay which we know we can do cheaper okay all right and i i you know obviously there's a lot of ways to compensate a surrogate and a lot of price ranges on that as well so it's such a personal thing and such an intimate thing that it's very hard for somebody on the radio like me to speak into it and and not sound callous or not sound like i don't care about it i do care about it it it's just you have got you do not want to get into these situations and um and and look back later and and wow that that uh uh it's so emotional it can cloud you from treating it like a business transaction as much as you should i want it to be emotional i want it to be intimate i want it to matter but i also want you to use wisdom in the process does that make sense yeah yeah so i'm not trying to be unfeeling in other words but uh but but so anyway uh i can tell you in our life me and my wife when we were walking down some of these steps we put an end a line we wouldn't cross because we knew that once we um our hearts got into this deal and once there are people around you always saying well there's another option there's another option there's another option that suddenly you wake up and you're you're you're so far over your head or you're so far underwater it's just the whole thing what was going to be this joyous precious moment gets really really cloudy what's the 75 000 in debt oh my gosh everything um we have how much of it how much of its cars um about 25 000 but last july it was 90. we sold well we've surrendered two vehicles and then we're paying off the death assist on it but we have two cash cars now oh okay okay we have two beaters right now so all right so the 25 is the deficits yeah correct yes and then the rest is some debt to um i have a loan with my parents um and then credit cards just furniture how much do you owe your payments what's that about twenty thousand okay all right i you know i i might you know i might consider uh making that a pause point in the rest of the clean up the rest of that snowball because you do want the cash to be freed up to be able to do these other things so i want you working your death snowball i want you pushing through the majority of it but that 20 i might ask for a moratorium on that until after the baby and say mom and dad i'm not going to pay anything on this because we're going to get you a grandkid oh that's a good blackmail and uh uh but yeah or i mean negotiate that with them talk to them about it and and so um you know that's a different kind of debt that you could get uh you know no payments and no interest while you work through this other thing and then come back to it after baby and get it done that would be fine but um the question is not really when to have babies the questions were to stick a sixty thousand dollar or forty thousand dollar or twenty five 000 expense in the middle of your debt snowball and it's an expense that is very intimate very emotional and um and worth every penny yeah i would strongly recommend going to a counselor that you recommend or a pastor this is one of those moments where your pictures and words get screwed up right we think in in pictures but we speak in words and we're both saying baby and we're both saying kid and we're both saying pay off the debt and that's when one of you has one picture the other's got another one so just being able to have a third party to walk you through make sure everybody's on the same page where are we headed what do we want to do here and how what order we're going to do that man you can't go wrong getting everybody on the same page yeah that's important and um and i agree with what you said earlier too that you and sheila talked about you do have to put a line on this uh because otherwise your emotions will plow past anything that's reasonable you look up maybe 150 in yeah or something and i've i've seen people with in vitro where they just break the bank yeah they just keep going back and that was my wife's wisdom up front let's draw a line here let's say this is this is as far as we're going to take this and then we're we're going to work hard but this is we're not going to cross this line and i was that ended up being extraordinary wisdom as you know as usually our wives yes absolutely yeah there's it's just it's one of those things that's very it's it's impossible for people or yourself to tell yourself no one it's just a if you don't you're going to get in [Music] trouble [Applause] what makes our show unique is that we genuinely care about our listeners we're intentional about choosing the best advertisers to recommend blinds.com is no exception they offer high quality window treatments at unbelievable prices and they make it simple to shop blinds shades and interior shutters with easy online ordering free shipping and a guaranteed perfect fit go to blinds.com and take advantage of this week's special savings [Music] so [Music] dr john dolone ramsey personality is my co-host today today's the day to do things you've never done so that you can get things you've never gotten this is your chance to learn how to make faster and real progress with your money and other things when you check out our famous ten dollar sale get sick and tired of being sick and tired well are you trying to get out of debt our number one best seller total money makeover is 10 bucks redefining anxiety by dr john deloney bestseller only 10 bucks our life changing books there's over 40 best sellers on the list 60 off for only a few more weeks there's something for everyone whether you're looking for a job starting a business paying off student loans teaching your kids about money there's a book and a plan for you remember adults devise a plan and follow it and if you give like no one else this is your chance to save 60 off our best-selling books shop our 10 sale at ramseysolutions.com go to ramseysolutions.com store and you can get things moving people that's simple open phones at triple eight eight two five five two two five christoph is with us in los angeles hi kristoff how are you better than i deserve how are you doing mr anthony just the same sir how can i help well i'm a fourth year medical student about to start residency actually in nashville in one month i have a hundred thousand dollars in medical debt um and based on what i'm training to do i'll be a medical resident for the next six or seven years making 60 to 70k per year however when i'm done training and become an attending physician i'll be making 330 to 500k my question is that with the knowledge that i can easily you know more easily write a check for a hundred thousand dollars in you know seven or eight years should i make minimum payments now to be able to live comfortably uh such as living close to work having my own apartment versus having roommates do you think that i'll be you know in an intense uh residency program working 80 hours a week or should i be really aggressive right now at the expense of being able to live more comfortably man off top of my head i'm going to be real aggressive right now i don't know what the world's going to look like in eight years man yeah i would get it i agree agree i'll get it off of me and here's the thing here's what's running through my head it let's pretend that you just called me up and you said i make seventy thousand dollars a year and i have a hundred thousand dollars in student loan debt and that's all you said and that's all it was because there wasn't a 330 000 job out there you made 70 000 a year and you had a hundred thousand dollars in student loan debt uh i would tell you paid off in three years beans and rice rice and beans and work your way through it and i don't know why you can't do that in this situation um you know and uh yeah you're you may have a roommate situation you are an inexpensive property that you're living in but if you made seventy thousand dollars a year and a hundred thousand dollars worth of student loan debt that's what you would do anyway so that's not different the only thing that's different is you are in a high stress high pressure cooker situation as a resident so and 80 like you said 80 hours a week so no opportunity to make any more you are stuck with that income uh but the payoff and you do have this payoff at the end but yeah i'm going to go ahead and clear it it's going to take you two and a half to three years to clear it but i'm going to go ahead and clear it because that's how i'm going to treat it is is if you're just made 70 grand and you had 100 what would you do well you'd pay it off and i'm going to tell you something it's going to sound counterintuitive i've done some research on med student mental health and in fact i'm going to speak to med school here in the fall i would lean towards not living what you would call a solitary life where you work 80 hours and you go by yourself into a home and you can just you can shut everything down i would actually especially in your first couple years of residency want you leaning in and having some friends i'd recommend have some roommates man have some people you can go home to and that can be with you and be a human with you one of the biggest challenge that medical residents have is this becomes their planet their universe and it is dealing with other people's pain and trauma all day long 24 7 365 and no sleeping grab a grab a granola bar on the way to the next thing and the next thing hey man there's something about being tethered back to a group of people i tell you to live light man people that you're not treating yeah i'd say to live light have a group of people that you're sharing life with that's not gonna sound like i'm in residency i'm a doctor i'd say have a house full of roommates get this debt paid off and then you're gonna look up three or four years later you're gonna be living a lot lighter man then you can make some different decisions yeah good good call alex is next in phoenix hi alex welcome to the ramsay show i'm dave and john pleasure to speak with both of you you too what's up so my wife and three of our four kids were recently in a car accident which totaled our vehicle oh no is there a way okay all right yeah yes it was a pretty bad accident but thankfully everyone is just fine good good so working on replacing it and i'm comparing a lot of vehicles of the same make and model very similar model year and trim level the only real difference are the miles and the price so is there a calculation i can use to help decide which vehicle has the best value based on that vehicle's mileage and price uh so i assume you've got the money to buy whatever you want with some reason yes i mean within within the range that you're talking about you've got the cash either way yes we do so the simple thing is just how to put a valuation on a vehicle yes okay uh i mean you can hit a little bit more money probably the uh the goal the gold standard is uh is uh uh in terms of placing a value on a vehicle would be kellybluebook.comkbb.com edmonds car guide is pretty good as well that's not a bad one there's four or five sites you can go to you can look at trader.com and just look at other vehicles exactly like it that are for sale uh and a lot of these sites now overlap and have apis where they talk to each other and everything else so it's fairly easy if you just spend an hour or two surfing to actually put a pretty good valuation on the vehicle in terms of what is uh the the best end quotes value um uh usually the older the vehicle with the lower the miles uh and so if you had a a 20 i don't know i'll make it up 2015 with uh 15 000 miles or you had a a 2018 with a hundred thousand miles the 2015 is going to be more bang for your buck usually because it's got more life left in it it didn't lose much life during those three years the miles put more on it than that years do in terms of the actual uh use of the vehicle typically i mean it can depend on the car obviously but the other thing you get into is the technology advances so quickly in the newer ones that um it's just the creature comforts and the newer ones are big time different sometimes two years makes a world of difference uh in terms of trying the goodies just just to decide if it's worth it spending a few extra thousand to you know have you know 10 20 000 miles left it sounds like you're saying it's not value-wise even though the vehicle might not last as long i am still getting more value if it has a higher mileage in the lower price yeah um i think that's very car specific yeah and it's you know you know if we're talking about 200 000 miles we're talking about 20 000 miles it's a lot different but uh um but i mean what kind of car are you looking at a honda odyssey oh an odyssey okay and and what price range uh um 13 to 19. okay and what kind of miles of range are we playing with here so to give you a few examples we have a hundred and forty four thousand miles for thirteen five hundred and fifteen thousand miles for seventeen four seventy five thousand miles for nineteen one now the only one that would get my attention based on the miles would be the 17 the uh the uh the 13 would sound like the deal with the 144 yeah that's one that sounded like it sounded like the deal because the the you know the good news about honda i mean it's just you don't have to be a rocket scientist no that thing's got a two it's a 250 000 mile car if you take care of it so it's it's got it's got 100 000 miles left in it um you know it's it's not worn out if they've taken anywhere near care of it i mean i don't know what condition they're in that kind of thing but um yeah i you're not gonna mess up none of those right there are going to ruin your life would not overthink if a car's got 1000 miles more i wouldn't overthink it yeah but 75s you know it's a lot different you jumped way down all of a sudden on that one and that's the only one that kind of got my attention but the other one for 13 was the first one that got my attention interesting none of those are dumb no you win with all three yeah this is the ramsey show [Music] [Music] [Music] dr john dolone ramsey personality is my co-host in the lobby of ramsey solutions on the debt free stage mark and ashley are here with t-shirts that say weird people so they must have paid off their house way to go guys how much debt have you paid off uh four and six thousand seventy-five dollars that's house and everything huh house and everything i am looking at weird people i love it and how long did this take you uh 53 months good for you that's perfect and your range of income during that time start about about 140 250 to 250. wow what do you all do for a living i'm a veterinarian and i stay home with our kids and take care of them and i breed dogs on the side and babysit and homeschool and sell things and you got a place you got a place to sell the dogs through this vet you know huh so what kind of dogs uh standard poodles oh yeah all right big boys huh yeah all right so one of you approached the other and said i have an idea let's get shirts there you go it was the veterinarian has the fun ideas you're asking about their money i just want to know who came up with this idea that's it okay so 53 months ago you decided to pay off your house what caused that and how did you do it um so we had just bought into the practice um and i was about like five to six months after that i was outside grilling one afternoon and it just like we did the budget we were kind of doing davish at that point and at the end of our month it was just tight like everything felt tight and uh i was thinking about like how much money we made like this is ridiculous they make way too much money to feel this way um and that was my yeah that was my it moment we had paid off our student loans before that and we grew up hearing about you dave and we had applied some of it um but i always felt we always felt really good because we didn't ever have big balances on our credit cards or i didn't bounce checks at the bank but we could not get any traction we really were slow to pay off our loans and for the amount of money that we made at the time i just felt like it should be more it should work better so that's when we decided to submit to the principles and get it done okay so you investigate a little deeper and figure out exactly what the details were to do the baby steps and to do our stuff yep and did you go read a book or go through financial peace or just listen to show or what we listen to the show a lot i actually heard a lot of financial piece growing up my family didn't practice it but my parents enjoyed listening to you um i actually took a class through my church as a teenager too i like a young adult um i just didn't i felt like i was pretty smart i didn't i didn't i have to i have to do everything my way first yeah i got it okay so you just kind of went back and revisited yeah all of that and said okay we're going to really do the stinking plan yep i think just hearing hearing people's debt-free screams hearing you every day a lot of the stuff that you speak is truth and it really um it really got to our hearts and eventually you're like he is he has helped lots of people so we're going to get him i'm so proud of you guys yeah very very cool very cool so that's all where do you guys live what city uh green bay close to green bay oh okay so what's this four hundred six thousand dollar mortgage house that doesn't have a house another mortgage on it worth uh the house is worth uh 250 probably now 250. so maybe about half of that's the practice buy-in oh okay half of it's the house and so you own the practice 100 or your partners oh eight partners yeah hey partners okay a small animal large animal everything large animal large animal the whole thing's large animal yeah wow okay and my dogs and your dogs and i have to do this those are large animals there this is not a toy yeah that's a it's a standard yeah wow very cool you guys got this moment you're on your back porch i just have a picture of you in my head of you raising a spatula to the sky saying no more pretty much yep and you brave heart with a spatula and lightning strikes and then you come in and you tell your like walk us through that that conversation yeah so he probably would have done this a lot sooner i was the one who dragged my feet for sure um i just really like stuff yeah i like to buy stuff and uh looking back i just really struggle with self-control struggle with contentment so yeah his his job was convincing me to get on board and i love him i want him to be happy and to thrive and do well um and so that's kind of what he does you can thrive in that atmosphere i want him to be happy in my lexus yes that's correct yeah so it took a little while for me to come on board um so what's the first big thing you're going to get to do now that you don't have any debt i bought her a new van or a newer van yeah that's perfect it was coming for a while yeah it was needed i can tell the funny story was that i knew she had bought in the year before we bought the van uh we had set aside from the air and bonus stuff to buy a van and uh it was like a few days into that like after we'd set it aside she came to me and said um i think i'd rather put this towards the house wow and i had done the math and i had mapped out if we put this towards the house and your bonus towards the house and we pay on it like we've been paying off our debt then we can we can probably pay the house off in a year and i think it's only going to get harder because we've got kids that are growing and they've got plans and goals and wow he grabbed that spatula and he waved it that's right we're in it so good man i love it well congratulations what do you guys tell people the key to getting out of debt is i think um the why just having a big y and the bigger the y the better um i think the most important thing you say say every day that dave is um the only way to true financial peace is to walk daily with the prince of jesus christ jesus and that's a huge why of um we're stewards i mean you talk about it all the time we're stewards and um that money's not ours um it's we're responsible for taking care of it and using it wisely yeah and for me it was learning that self-control and contentment sometimes i reflect back it felt like a really long time especially when you look at the the time that we were davish all the way to paying off the house pretty much our marriage we've been paying stuff off and trying to live frugal and trying to get good at that and sometimes i look back and i think it took that long for god to get through my to get through to me to change my heart but um i definitely would say for me that was it and honestly i'm a bit of a wheeler and a dealer i love to see the potential in things and i'm really good at selling things and doing that stuff but my superpower ended up being just to sit still and to save our money and not spend it and to find ways to grocery shop better that's a life change right there that's a family tree change right there godliness with contentment is great gain so you brought the kiddos with you what are their names and ages we've got reuben who's ten vienna who's nine tori is seven maddie's almost six and jen's almost four okay and they have the t-shirts you are looking at it the why what are we looking at we're looking at weird people [Music] it's not it it's an exclamation point i love it well we've got a copy of the legacy journey for you because that's the journey you're obviously on what a great looking family and of course you uh also will give you a copy of the total money makeover to pay it forward and give to somebody start their journey so you are looking at weird people exclamation point that's perfect you're looking at a change family tree it's incredible that that's awesome very cool very very well done all right mark and ashley rubin vienna victoria madison and geneva count it down 406 000 paid off in 53 months making 140 to 250. let's hear a debt-free screen ready three two one [Applause] [Music] wow wow man that's powerful that's incredible a lot of transformation happening not only in their family tree but in each of the individuals that's powerful stuff right there wow every decision they make is going to toss in everything the practice it's all uh not a debt in the world so powerful whoa this is the ramsey show [Music] [Music] [Music] [Music] [Music] our scripture today ecclesiastes 7 12 the protection of wisdom is like the protection of money and the advantage of knowledge is that wisdom preserves the life of him who has it albert einstein says we cannot solve our problems with the same thinking we used when we created them oh amen on amen amen requires new thoughts that's what we're here for usually requires some new thoughts yeah some of them are good new uh actions kevin is with us kevin is in fort walton beach hi kevin welcome to the ramsay show hi dave hi john thanks for taking my call sure what's up uh so um the question that i have is about life insurance so we are debt-free except for a house we are currently renting um and the plan for the financial freedom as we should be i guess kind of at a financially free point and i would guess about five years uh but my question is so how much how much and for how long should we get life insurance assuming we're going to be able to self-insure in a fairly short time horizon okay self-insure means that five years from today you're going to have a paid for house your kids are grown and gone or you have so much money that your kids are taken care of if you die anyway how old are you so we uh we are both my wife and i are 34. and you're renting we are currently renting we do have two children okay and how much money do you have uh currently we have around five hundred thousand okay and what do you make a year um so we are our income right now is about 140. we live on about a third of our income so we're able to put a lot of into investments and then my um so due to a job change probably within about a year our income should be increasing substantially okay i um well i mean apparently you understand the or or my definition of self-insured is is there's enough money in in investments that your family will have enough income coming off of those investments without touching the principal to take care of them easily without your income being there your income is replaced by income off of investments without having to touch the actual principle of the investments if you're going to be there in five years then you know you're there are you guys healthy yes okay because here's the thing i mean a million dollars on a 34 year old just doesn't cost the cost of a pizza it's not much money and so and i do yeah you're not and i guess that's my question is do we do that because i know you kind of typically recommend the 10 to 12. yeah i'm just saying but well i mean if you buy a million and a half on you uh or whatever you know i mean it's just not much money we're not talking about some super expensive policy if you go to xanderinsurance.com and you quote out a million and a half two million whatever on a 34 year old it's just not that much it doesn't cost that much so um you know if you buy that for a 10 year or a 15 year uh i'd probably just buy a 15 year and then when you reach the point that you uh are self-insured by the definition i just gave you uh that your wife and children are you know they got 100 000 a year to live on so you've got um you know million me and a half in investments that that they can draw off of uh once you reach that point you would just cancel the insurance if you want to um you may find other uses for it but um uh in terms of just padding things and that kind of stuff but um it's yeah the difference in a 10 year and a 15 year is not going to be substantial enough at 34 years old to screw with it i wouldn't worry about it or even a five-year i mean it's just not it's not going to blow you away that it's it's not triple you know it doesn't cost that much more and um so i would probably just go ahead and get a 15-year 12 times your income and then if you reach self-insured before the 15 years is up cancel it and i i look at those decisions in my life dave on a on a see-saw and of risk right and so what's 500 bucks or six or seven hundred dollars a year versus my family being taken care of if something happens it just doesn't make any sense on the other side of it right i have the advantage and the distinct disadvantage of having sat with 34 four-year-old widows yeah yeah that had two million dollars yeah or had nothing correct as if i and it's it's versus 500 bucks right you know for the cost of policy or whatever it is you know and it's um it's not just a game changer that's such an understatement right such an overused cliche to say that it's it's it's oxygen yeah it's everything it's not the money replaces somebody or anything like that but it's a way different conversation man to be sitting in that living room with somebody and they're going dave you know and they're friends of ours you know and dave you know he he we did this stuff you said to do in the class man and we got you know i got a two million dollars coming and i'm scared i'm gonna mess that up yeah that's a that's a different thing than that i'm scared and then i'm scared i'm how we're gonna eat next week i gotta go to work on monday yeah so it's just it's not that much money yeah carson is with us in st louis hey carson welcome to the ramsey show hi dave thanks for taking my call sure what's up um so my wife and i uh for the last year and a half have been on baby steps four five and six uh the the two years prior to that um we were on steps one two and three and paid off uh about eighty thousand dollars in debt um my question is so we've got a little one-year-old boy and my wife well we're both kind of contemplating together she wants to quit her job and what does she make you know i'm what does she make she makes probably will be about 135 this year what do you make i make about 150 160 so what do you lose when she comes home and your income goes in half well so the way that we've been living right now essentially we're you know living off of my income and saving everything from her and and a little bit but well a lot of it yeah yeah well i mean you're saving 135 000 that you won't be saving anymore exactly yeah and that's okay so you're not going to be quite as wealthy but she's going to get to be there with her baby do it okay well and i'm all for that too but i also know what you know 135 and growing over the next five or ten years if we put all of that into an investment account and you know what that can grow up to you know and you know i work what does she do what does she do what does she do for a living she does uh digital advertising okay i i would tell her just for the fun of it for the for the intellectual stimulation to do some freelance absolutely just to keep herself busy because a one-year-old drives you freaking bananas but the uh uh and if she'll stay current in that world she can step back in whenever she wants or whenever you all want you have absolutely no financial need to do that and i trade uh one-year-olds for money in about 30 seconds yep yeah and and i i totally agree with you um it's more just is it is it uh you know what we could have in the future is it a wise decision i i you don't need it your side i think you don't need it okay yeah hey it's not a math problem carson you can be you can be multi-millionaires on 150 000. okay and by the way you're not gonna make 150 000 in the future because you're going to be making more and she's also going to have some freelance income and when the kids are eight and nine and ten and she's sitting at home by herself while they're at elementary school she's gonna go back to work and do something because this woman likes what she does she just likes one-year-olds better yeah way more than i'm worried about your your income i'm worried about her identity and so she's i'd recommend her getting some um professional women some stay-at-home mom women in her circle yeah and she she's got a good great community too and and so uh i think that makes me a lot more comfortable with this decision just hearing you guys talk it out so i really appreciate that thank you i'm so proud of you guys i'm proud that you got up to baby step four where you can do this with and it's a no-brainer yeah y'all worked hard to get to this exact moment this is this is living like no one else so that later you can live and give like no one else this is exactly what you're doing well done very proud of you john good show thanks man good show james and kelly in the booth i'm dave ramsey your hosts will 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] hey guys this is james senior producer for the ramsay show did you know over 18 million people listen to the ramsay show every week and a lot of those people listen on one of our 600 plus radio stations across the country to find a station near you head to [Music] thermsyshow.com [Music] you

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Id: -UT02WNSkGc

Length: 121min 45sec (7305 seconds)

Published: Thu May 06 2021