Your Life Will Suck if You Wait on Washington To Fix It
2024-05-23 01:54:43
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships. Jade Washall, Ramsey, personality, number one, best-selling author of the book Money's Not a Math Problem. It's one of our quick reads, a whole 74 pages long, so you can take care of it in one setting and you'll change your life if you read that kind of stuff. She's my co-host today. Open phones at 888-825-5225..
Jennifer's in Pittsburgh to start this hour. Hi, Jennifer, welcome to the Ramsey Show.
Hi, Dave, it's wonderful to speak to you.
You too, what's up in your world?
Well, we are recent graduates of FPU, and we have a debate in our household.
We have $42,000 worth of consumer debt, and our mortgage is $69,000.
. So, the whole $42,000 is all my student loan. Right now, I am waiting on a public service loan forgiveness application. All of this documentation is temporarily paused while the government changes a servicer from Mojila to U.S. Department of Education.
But when I applied, the website says that I have $24,641 eligible for forgiveness. So, as you know, if I die first, the student loan is forgiven. Also, if we pay towards this $24,000, that's eligible for forgiveness, that money is gone and could have been used to pay down the mortgage. So, that's my husband's case. So, in our case, is it okay to go out of order and start tackling this mortgage while we're waiting on the application to be processed?
So, you owe $40,000, but $24,000 is possibly forgiven. What would be wrong with paying it down to $24,000??
Well, there's nothing wrong with that idea. I'm on board with that.
Oh, but he wants to pay the mortgage instead. He wants to pay the mortgage instead because he's planning your death.
I hope not.
Well, it's what you said.
How old are you guys?
Fifty-one.
How old is this debt?
It is about ten years old.
And what is your household income?
$168,000.
How long are you willing to wait for the government to tell you that they're not going to forgive this? I mean, they're going to forgive this.
I think you're right the first time, Dave.
Correct. I mean, so, right. Historically speaking, yes. But every day on the news, we have the Biden administration forgiving more debt.
Wait a minute, wait a minute, wait a minute, wait a minute, wait a minute. Did you just tell me you believe the news? Worse than that, did you tell me you believe the Biden administration? So, let's move on. Let's go back to the original argument.
Okay.
Now, what's your household income?
$168,000.
Okay. So, you only have $100,000 in debt. You make $168,000.. So, you should be, both of these should be gone very quickly. Agreed?
Agreed.
So, we're really not arguing about anything, but four months?
Right. It's just kind of like the order of operations.
Four months? It doesn't matter. It doesn't matter. Four months. So, how long are you going to wait before you say, I give up on student loan, forgiveness and I'm going to pay it off?
Okay.
I'm asking, how many months are you willing to wait?
Here's my honest answer. The website is saying it's going to take until July of this year. So, I can hold off until July of this year.
Okay. So, let's give you until September. Okay. Because it doesn't matter. Okay.
Because you could go and pay down the loan first from $40,000 to $24,000, and then you could reach over and pay off the mortgage if you wanted to let the $24,000 sit there for a couple of months. But don't let it sit there one day longer than when you're ready to actually get to it. So, I want you to plow through all of this. $100,000 out of $168,000, you should be done in 18 months.
Okay.
Okay. And so, if we put the $24,000 at the back of the 18 months and plow through down to $24,000 first and then through the mortgage, we're really not having a discussion here about some – it's a theoretical concept, because it's all going to be gone by the time you blink.
So, your husband's – it's ridiculous to even have this conversation. Do it in the correct order. Pay it down to the $24,000 and then pay off the mortgage, and then, when the mortgage is gone, if you've not gotten the forgiveness, pay it off.
Okay.
And do it in 18 months. And do it in 18 months. So, really, when you couch it in that order, whether we put the $24,000, the $40,000, whatever, in front of the $69,000, we're arguing about four or five months difference is all. So, it's a non-issue.
Hey, do you have a chunk of money saved somewhere? Yeah.
No, we don't. We have our $1,000 emergency fund, but we're just maybe a step to it. Okay.
So, you're doing everything else on the plan until you got to this. Correct. Okay. Okay, good.
All right.
Well, I mean, I'll give you a shot at getting the forgiveness. I don't think it's going to happen, because the numbers are horrendous. It's like 3% of the people that apply for forgiveness actually get it. Yeah. So, when Biden comes out and says he forgives $7.7 billion, it's absolute statistical hogwash.
It's a political move because he didn't. He made it available to them, but then when they go to the education department to get the forgiveness, it's not actually happening. I mean, it's like you have a 3% chance of getting student loan forgiveness.
Not to mention what it has been.
And it's private, you know, under those programs. It's just the actual facts. And it's not a political thing. I can make it a political thing because it's stupid politicians, but they're promising you crap they're not going to give you. That's the oldest game in the business, right?
So, anyway, put it at the end of the thing. Give it a shot. Maybe I'm wrong. Maybe you did it just right. Maybe you're one of the ones that sneaks through and gets free 24 grand.
I'm not opposed to you getting the money. So, go, get it, but don't sit around five years from now and go, I'm still waiting on a promise of a politician.
Yeah, a lot of what's been forgiven is really old. You did your payment plan, it's long since been finished, and you never got your payout.
So, that's how I would handle your situation, hun. You guys are thinking about it. But sometimes it helps me, folks, when I'm looking at this stuff, that the argument we're actually having is very theoretical. When you actually break it down by the dollar differences or the time differences, it's an irrelevant amount of time or an irrelevant amount of dollars. Just do it.
It's not a big deal. So, if you want to do it his way, or you want to do it your way, in 18 months, you're done. Either way. Which one we put in front, whoop-dee-doop-dee, as long as you freaking, do it. Now, moving on to the other thing.
Folks, when these articles come out from the Trump administration or the Biden administration, or somebody that claims to be an administration, and they tell you that they are responsible for the less than $7.
7 billion of debt, forgiveness, you need to read the article. Because, actually, that particular, this latest PR push in an election year, if you actually read the article,
it wasn't a new program. All he did was take credit for what was already in place. It was the program that was already there that they're not executing already. And he held it up. Look what I did.
You didn't do anything. It was already there. You just put it out in the spotlight and acted like you did it. And that's not a political thing. It's just how these twerps in Washington, D.C.
do stuff. So, don't let Trump or Biden take credit for your life, and don't wait around on either one of them to fix your life, because your life's going to suck if you do. This is the Ramsey Show.
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Jade Walshaw, Ramsey personality, is my co-host. Well, it's graduation season. Lots of people coming out of high school, coming out of college, coming out of whatever. So, before you stick a crisp $100 bill, which is always welcome, by the way, inside a graduation card, why not give somebody the tools you wish you had? You know, you could get George Camel's Breaking Free from Broke.
This is the millennial and Gen Z snarky, well-researched version of what we teach, and it's really, really good. And it's selling like crazy, especially among the age group of newly graduated folk. Breaking Free from Broke, the ultimate guide to more money, less stress. And George is the king of snark. That's one of the reasons I just love reading his stuff and hanging out with him.
Ken Coleman just hit the bestseller list with this, the GetClear assessment. Find the work you're wired to do. Wouldn't you think it'd be cool to get an assessment on what you're wired to do? Absolutely. Especially if you're coming out of college or out of high school, that would be a cool thing.
The assessment is included in here. About 100,000 folks have taken the assessment by just buying it off of our website. So that's why we put out the book on how to actually read and analyze the answers and the results of the assessment. And it's not a super lengthy thing, but it's very engaging and really, really helpful. Helps you figure out what you're good at, what you enjoy, narrow your job search down, all that kind of stuff.
And we are now celebrating the 20th anniversary of the Total Money Makeover. And so the Total Money Makeover's had yet another makeover. So there we go. And of course, number one bestselling, gosh, over 1,000 weeks it's been on the bestseller list. now.
Pretty crazy. 10 million of these puppies sold. Not a bad graduation gift there. You could add Jade's book in there. Money's not a math problem.
Somebody doesn't want to read a bunch of 74 pages, it'll get right to the point. And have a little Jade attitude in there, and that'll help you too. So just put all of that in the pile. Go to RamseySolutions.com, and that'll be a whole lot better than, well, it'll be the kind of stuff you wish you had read when you graduated, boys and girls. That's how that works.
Andy is in El Paso. Hi, Andy, welcome to the Ramsey Show.
Hi, Dave and Jade. How are you guys today?
Better than we deserve. What's up in your world?
So honored to be speaking to both of you. I'm a huge fan of the show.
Thank you.
No, well, thank you guys. So I'll get straight to my question, and I can provide more detail as needed. So my overall question is, should I remain with the company that I currently work for as a remote employee, or should I start looking for a new position? So currently, I am a CPA, and the CEO of the company that I work for recently announced that they want to shift to more in-office positions, but they have not yet mentioned what they plan on doing to the several employees that are 100% remote, scattered throughout the country. And the company I work for is in Iowa, while I am located here in Texas.
Okay, so if you don't move, you're going to lose that job if he pulls everybody in. Is that what you're saying?
Yes, correct. At the moment, my wife and I, we don't have any intentions of leaving El Paso.
Wouldn't blame me on that.
For sure, to go to Iowa.
Pretty cool place.
So I guess you're looking for a job, to the extent that you think you're going to lose that one. Agreed?
Yeah, yeah, exactly. I believe so, but I guess I'm just kind of, you know, I don't want to jump ship too soon when, you know, they haven't provided much more detail, but then I also kind of don't want to...
How long have you been doing this remote?
For almost two years now.
So the job since you took it has been remote?
Yes, correct. Yes, I was hired...
They don't have any offices in El Paso, never did?
No, correct.
Okay, so they hired you remote, and the only question you've got is are they going to keep the people that aren't? So we don't know, could he be talking about the people that are in proximity to an office need to come back to the office and the rest of you stay remote? That wouldn't be that unusual today.
Correct, yeah, and that's kind of what I'm hoping for, but again, you know, they've been kind of just tiptoeing around the topic and.
What would happen if you asked? What would happen if you just asked your, you know...
Who do you report to?
Your leader.
Right, yes, I have not had the opportunity to ask my direct boss yet, just because this was pretty recently and, you know, we'll probably have that conversation pretty soon. And my boss is over there in the headquarters, so I know they'll have their ear more closer to the ground to kind of sniff out any news. So I haven't had that conversation yet, but I do...
Yeah, if I were your boss, I would not be offended at all if you called me in the next 20 minutes as soon as you hang up from us, which is what you should do. And you said, hey, I saw this thing, I really like what I'm doing, and I want to know if this means you guys are going to fire me.
Right, correct.
I wouldn't be offended, I wouldn't be offended. You're asking for clarification on a vague corporate communication, crappy announcement.
And I might even, like what Dave said is pretty direct, like, are y'all going to fire me? I might just ask, hey, what's the expectation going to be? Is the expectation that all of us at some point come to office here in Iowa, is that going to be the expectation? I'm just, just so I can plan. I mean, you don't necessarily have to say what exactly you're planning on doing, but...
You should be on the phone in the next 30 minutes and get some clarification. And if you can't get clarification, that would worry me greatly. Non-clarification from corporate goobers means they're getting ready to screw you.
Right, okay. That's what that means. Right.
But if you talk to him and he does a politician's dance, go get a job, because it's coming. Okay, but if you talk to him and he goes, hey man, we're just talking about the people in the neighborhood here. They don't need to be living 20 minutes from the office and not coming in. But you're in El Paso, we don't have an office in El Paso, we're going to be leaving you alone. Okay, cool, worry over.
You need, instead of sitting and stewing over this, make a phone call, man. But yeah, that's, you know, and then figure out what your situation is. But to the extent that your probability of losing the job means, you need to look for a job, yeah. The more I become convinced I'm going to be on the street, the faster and more intense my job search. I'm going to be reading everything Ken Coleman writes and getting out the proximity principle and paycheck to purpose.
And I'm going to figure out what I'm going to do with the rest of my life, and it's not going to be these goobs.
Yeah, and for me, there was just a little something that I read into that going. If you don't feel comfortable talking to your leader, there's something else there. Well, it's because he's remote.
That's kind of strange. It's the problem with remote. You don't have good connections. You don't have high quality relationships. You've got a Zoom call, you know, or, worse than that, a freaking email.
For real. You know, and so you, it's hard to communicate with people when you're not in, you know, 80% of communication is body language and tone. None of that happens in an email or a text, and it happens poorly in a Zoom call. And this is the problem with remoting. So, but it's not, it doesn't mean you have to stop doing it, but you just need to dig to push through the problem.
You don't get, let's meet the challenge head on and find out what the flip is going on here. Jake is in Fort Myers, Florida. Hey Jake, what's up?
Hey there. Thank you for taking my call. I appreciate it.
Sure. How can I help?
So I have a question for you. My wife and I, you know, we didn't have a 28 to three comeback story like yours, but we're definitely in the midst of one. We got married last year, in 2023, prior to that in 2022.. We had a, we were living together and we had a cashflow problem. We could barely afford, we could pay for our rent and pay for living expenses, but we had relatively no savings to put away.
Ever since then, we, we got out between now and between then and now we, we got out of that lease, moved home. We were lucky and fortunate enough to be able to move home with our parents. Saved up. there. We got married.
And now we're living at a totally different place and we're, you know, through a lot of risk taking through our jobs.
Okay. So where are we today? What's your question?
The question is, I don't know if I should, if I'm ready to buy a house or I need a second car.
How much money do you have piled up now, after this turnaround?
My wife and I have stashed away approximately $116,000.
Very cool. Why don't you do both?
Buy you a $10,000 car and then put a down payment on a house. You got enough?
Yeah, it's a little bit more complicated. Is all the debt gone? Yeah. I just paid off the one car that we have. Yeah.
$14,000.
. I took that away.
What's complicated, dude? You got the money to do it. You start, you turned it around. You probably got your confidence shaken by being stuck in the mother-in-law's basement for a while. You know, but Hey, you know, go get you a house, man, or go get a rental, but buy a $10,000 car for sure.
This is the Ramsey Show.
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Jade Walshall Ramsey, personality, is my co-host. Thank you for hanging out with us, America. Christine is in Atlanta. Hi, Christine. How are you?
I'm doing great, Dave. Thank you so much for taking my call.
Sure. What's up in your world?
Well, I feel like I should have been listening to you a long time ago. So my husband passed away of COVID three years ago, almost, not quite. And he had a little bit, a little bit of life insurance policy. And I panicked and I went ahead and paid my house off. It was like $225,000 left and I used it all.
And I'm like concerned that I made a mistake by doing that, because I went to my friend's financial guide. He's like, you're so far behind at 55 or what you should be. And he made me feel stupid for doing that. And then I started watching you and you are, you're all about the house payoff. I was like, good with that.
But then you do talk about how your income is your wealth building thing, you know? So anyway, I'm a realtor and I have just had a slow down, screeching halt on sales. And I'm just afraid any, you know, what I've got left in savings, I'm going to have to start using that supplement.
Well, what would.
That's where I'm at.
First off, I'm sorry for your loss. That sounds terrible. Second off, this financial guy is not the guy. No one should be making you feel stupid, right? Yeah.
No one, you know, you're going to them for advice. You want to learn, but they shouldn't be making you feel stupid. I would not look at this as a big mistake. I would go, okay, you did. It's not like you went out and bought something you couldn't afford, or it's not like you went out and you got crazy.
You paid off your home, which is something that we would teach you to do. It might sound a little bit out of order, but maybe not. I mean, let's think through this. Do you have any other debt?
No.
Okay. Do you have any money set aside that you could call just savings? that's liquid?
Yes. So I have what's left, like that, we, you know, work together to build. Like. I have $300,000 in a high yield account. But after listening to Dave, you're like...
Yes, but like high yield accounts aren't the way you build money. Like. I hear Dave say that all the time. So I've got that. And then I've got, I don't understand the, I've got a rollover.
There's something called a rollover that I've got and a Roth and then a beneficiary. And all of that adds up to be about $140,000, $145,000..
But here's the bottom line, okay? You don't have any bills. Your income has slowed down and you have $300,000 that you can eat out of until you get your income back up. Right?
Right.
You're doing better than you think you are.
Christine, you're okay.
Am I okay? You're okay. I feel panicked.
Why? How long is it going to take you to burn 300 grand?
And you're not going to burn 300 grand.
It may take you 10 years to burn 300 grand, because you're not supplementing this to the tune of $8,000 a month. I know you're not just by listening to me. No. And you take $1,000 here or $1,000 there to make sure you've got food coming in until the real estate business picks back up. Right?
Right. I guess I've just been not sleeping at night ever since talking to that guy. Why would you do that?
Let me help you with that guy. Here's two words for him. You're fired. Now. who's stupid?
Right. Because he's an idiot. You don't need to talk to him anymore. He's a classic financial guy who's a nerd and has zero relational capabilities. Right.
If you want some help, click on SmartVestor at Ramsey Solutions. They will not have that approach. They'll have the heart of a teacher, because the more you understand, the less anxiety you'll have. The more knowledge you have, the less anxiety you have. But let's just take a real, basic, simple thing from the 6th grade.
How much are you taking out of your high yield savings account to pay bills with right now, while things are slow per month?
Well, nothing so far.
Okay. So really, what are we worrying about?
Well, I guess like, I don't know. I guess I just, after talking to him, I just have very exciting thoughts.
You've got to quit saying after talking to him.
I think he just threw you an egg.
He does not count. Okay. I want you to count on you for a minute. Just use your brain. Your brain's fine.
You don't have a broken brain. Okay. So your brain says, I haven't used any of the 300 grand. If I started taking 2,000 a month out, it would last me for 150 months if it made no interest. You know how long that is?
12, 14 years.
Right. Okay.
You're okay. Okay. You're okay. You have such a big stinking pad that there's nothing you're going to do that's going to screw this up. Okay.
You have no house payment.
Unless you go blowing 100 grand a year somewhere and burn through this money in three years and don't work, you're okay. And you're not that person. Okay. So you need to stop it with the anxiety. You're very capable.
You're smarter than the guy you met with. You probably have more money than the guy you met with.
Do you have kids at home, Christine?
No. Unfortunately, we did, not. Just a four-legged one.
Okay. Four-legged dog. Kids count. What I would do if I were you.
All right. So you need to get somebody in your corner that has the heart of a teacher. That's our Smart Investor pros. Sit down with them. They'll help you with how the rollover works, how the Roth works, and how the beneficiary position works.
You need to understand those three things, because you feel confused and it made you feel like the guy was right when he made you feel stupid. And you're not stupid. You just don't know something. I'm not stupid, but I can't work on my new car. When I lift the hood on it, I have no idea what I'm looking at.
Looks like a spaceship. Okay. But I'm not stupid. I just don't know how to do that. And if I have a mechanic that tries to make me feel stupid, he's fired.
It's not his job. His job is to fix the car.
Right.
Not assess my car fixing abilities. Now, you did the right thing by paying off your house. I think you've been very wise and very conservative. The only thing I want you to do is to engage the knowledge gathering process here to get your confidence up. Because the more confidence you have, the less anxiety you're going to have, the better sleep you're going to have, the more real estate you're going to sell.
Because a salesperson who thinks they're broke smells bad.
Right. So would you use some of that money into the $300?. Should I put that into...
I'm probably going to move some of that into something other than a high yield. But only after you understand it, and only after you realize and internalize, as Dr. John Deloney says, your body recognizes that you're okay. Because your body thinks you're going to die, and it's freaking out.
Yes, you're exactly right.
And that's just due to this guy's speaking. shame over you.
Yes.
I rebuke that. It's just bull. crap. It's just bull. You're not that girl.
You're not a dumb girl.
He was saying that it was like a low interest rate. Why would you do that? And I guess that's what I wake up at the night thinking about.
Okay. I might invest some of it for that reason. But I'm not ever going to do anything after this phone call, if I'm you, because of that guy.
Right.
He's completely invalid. He invalidated his position. He invalidated his opinion. He invalidated his relationship. He's fired.
For God's sakes, don't let him have any more free rent in your head.
Yeah, because he's somewhere eating a sandwich. You're here calling us and worried to death over what he said, and he's out to lunch.
Yeah.
Hey, why do you think that is, Dave? Like, you know, obviously we have really great smart fester pros.
Because those of us that are academically trained math nerds, we look at the math and we are aghast if someone didn't do the math right. And we think everyone should be able to understand it instantly the way we math nerds understand it. And so we're just like, oh, God, you're an idiot. You know, and it's how our stupid non-relational math nerd brains work. And he shouldn't be in the business he's in because he's in the wrong business, because he's bad at it.
His job is to coach. His job is to inspire. His job is to teach, not to shame. And so he's a rookie or he's an idiot or both. This is the Ramsey Show.
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Our numbers are just amazing. Jackson, Mississippi. James is on the line. What's up, James?
Hey, Dave. I'll be 64 in August. I'm still working. I'm retired from the military, so I get a military retirement.
Thanks for your service.
You're welcome. Thank you. And I'm going to start the Baby Step 1 tomorrow. This is how far behind I am. I have about $102,000 in debt other than the house.
Me and my wife together make about $140,000 a year.
And here's my main question I wanted to ask you. I've only been listening to your show for about a week now. My son turned me on years ago, but I didn't pay attention. I wish I had. I thought I'm an idiot.
But anyway, I have $9,500 in stock from the company I work for. I work for a food service company, and their stock. I have $9,500 in there, and I have $16,000 in a 401k. My question is, and this is my logic, if I draw that out, I can pay all my debts off, except for the house, the two cars, and one other deal that you're not going to like. So what do I need to do with that 401k?
Well, you're going to need that 401k later because we need to build you a nest egg to retire with after we get you out of debt. Agreed? So I would not cash out that 401k. I'd let that ride. I would cash out that stock.
And what we're going to tell you to do is list your debts, smallest to largest. You said you had $100,000 in debt, right?
Yeah, about $102,000.
Brian, how much of that's your mortgage?
None of that's my mortgage. That's without my mortgage.
I thought you said you had $14,000 in a 401k and $9,500.
. My God, what do you owe on your cars?
That's a problem. My truck, I just bought it. It's brand new. I owe about $45,000 on it.
Sell it.
Yeah.
Yeah, I'm not kidding. Sell it.
What's the other car?
My wife's car is a RAV4.
. I think we owe like $12,000 on that.
That's not a problem.
Half of your debt is the mistake you just made.
My timeshare.
No, half your debt's that truck.
Okay, yeah.
How much do you owe on the stupid timeshare?
$29,000.
Yeah. And you got screwed on that. That's legalized fraud.
Oh yeah. I just listened to you this morning on a previous podcast. about that. I'm sorry.
Hey man, I'll help you. You can still do this. It's not too late. But you're going to have to pay a lot of attention and you cannot make big mistakes. So you're going to have to undo the truck.
And I don't know how you're going to get out of that timeshare or if you can get out of it. But I'm going to begin to negotiate with them. if I'm you. Hire an attorney and try to work your way through that timeshare and see if you can get out of that debt. Or pay it off, one of the two.
And then we've got to work what we call the debt snowball. And that's listing your debts smallest to largest. So take that $9,500 worth of stock. We're going to throw it at some of your small debt. And, James, we'll pay for you to go through Financial Peace University.
Because I think you're ready to listen now. And we'll help you do this stuff. We'll show you exactly what to do first, what to do second, and how to do this. But you and your wife are going to have to sit down and get very, very serious about this. And say, gosh, in seven years we've got to have this mess cleaned up and have a pile of money.
The thing is, though, if they make $140, if they say, okay, we're going to live on $100.
. They take that stock, that all, but pays off the raft for it, put a couple thousand with it. He gets out of that truck, buys something easy in cash.
If he got out of the timeshare, then he's almost there.
Yeah, and I wouldn't put too much towards legal fees for that timeshare. I mean, it's $29,000..
We'll knock it out. But I mean, if you could pay $5,000 and get out of it with a good lawyer that works that stuff, then maybe.
The point is, he can be done in a year.
Yeah.
If he makes the right choices here.
And then you need to work on your house and start piling up cash, and you've got seven years. And then you're 70.. So it's very doable, but you're not going to be driving that truck.
Yeah.
That truck's a problem. It's the biggest problem in the whole thing.
Lucky for him, he's got his military retirement.
Yeah, that's helpful. But that's part of that $140,000.. Yeah. I'm just going to tear into this thing, man. I'm going to make a sprint to the finish.
That's what you're doing. And you can do it. We'll help you. Christian will pick up and he'll get you signed up for Financial Peace University. We'll pay for it.
You and your wife both work on this stuff, James. And then you make the sacrifices to win, and you still have time to turn this around. You do not have time to half-butt do this. You've got to do it all exactly the way we teach. If you don't sell a truck, I don't know how you're going to turn the corner here.
If you don't bust that timeshare in the mouth, I don't know how you're going to turn the corner here. If you and your wife aren't working the thing together, I don't know how you're going to turn the corner here. So you've got to do it. You don't have a second, third, fourth opportunity to figure this out. You've got to do it, and you've got to do it now.
But it can be done. I'm not saying lose hope. But I am saying freaking. pay attention. Lean in, baby.
Lean in. We'll help you. That's what we're here for. Bella's in Bozeman, Montana. Hi, Bella.
Welcome to the Ramsey Show.
Hi. Thank you for having me.
Sure. How can we help?
So I started listening to your radio about two weeks ago, and I just wanted to say thank you for motivating me to hang off the debt that I have in my mom. So, about one and a half years ago, I've borrowed from my mom 7,000 euros, and I've been pretty much kicking the can and neglecting that debt for this entire time because it's my mom. So you're like, you know, there's no APRs on it.
It's a different type of interest when it's family.
Right. Exactly. But now, since I've been listening to you guys, I feel so embarrassed. I mean, I've been embarrassed this entire time, because, you know, I don't want her to know that I'm struggling with money, but I am.
How much do you owe, Bella?
7,000 euros, which is probably equivalent to about 7,000 euros, which is equivalent to 7 or 8,000 dollars.
7 or 8,000 dollars. Yeah. Okay.
So she's out of the country?
Yes.
Okay. And what do you make? What's your house income?
So I think last year I made about 40,000, and I think this year it's going to be a little bit better, because I've been working. Seven days a week.
Good for you.
Good for you.
So what will be wrong with scratching together $7,000 over the next few months and just paying her off? Why would that not work?
That's the problem, because every time I put it to the side, I have my little envelope with $1,000 inside of it for the emergency. And whenever I have leftovers, you know, I put additional money inside of it. And there is always a couple of months, there is some kind of emergency that I have to put that money.
You want to know what that sounds like to me? You want to know what that sounds like, Bella? When I listen to people and they say, month after month, I have unexpected costs come up. I know that they're not doing a very detailed budget. Are you using every dollar?
No, I'm just writing everything on a piece of paper.
All right. Well, before we get off the line with you, Christian is going to pick up and we're going to make sure you have every dollar. And on there, you can plan and be very detailed each month about what your expenses are. And it's going to help you plan for those. And they won't be emergencies anymore.
So you'll be able to keep that $1,000 set aside and make some progress.
This is the Ramsey Show.
Dave is in Seattle. Hi, Dave. How are you?
Pretty good. How's yourself going?
Better than I deserve. What's up?
So I got kind of a tough family money related question. I don't know how to approach a family member as far as regards to money. Long story short, unfortunately, my mother passed away and my uncle has a 50% stake in her house. And he came with me with an offer to cash me out. But it was about a couple hundred thousand dollars low.
Lower than what market analysis reports and multiple realtors that I've talked to have said that place is worth. And I don't know how to give him the tough answer or ask him just, hey, this seems really low without burning a family bridge. So I'm just having a tough time with that one.
Wait a minute. If you go back to your uncle and say, sure, I'll be happy to sell you, but I'll sell it to you at just a little bit below market value, which is a whole lot more than your offering. You think he's going to get mad and run away mad?
Essentially, yeah. And then the house would go on the market. It was my grandfather's house.
Okay, put it on the market.
Years ago.
Put it on the market.
I'm trying not to burn a family bridge.
I know you didn't burn a bridge. If he acts like that, he burned the bridge. You can't choose who burns bridges except you. But you're not burning a bridge. You didn't say go to hell.
You said, I want a price.
Yeah.
If he gets mad, he's the one burning a bridge. You can't control him. But we're also not going to be scared of his reaction by $200,000..
Especially if you have it printed out and you can show him, say, hey, I did a little research. Here's market value. If you can show me what you're looking at and make it more of a conversation rather than some sort of a...
I'll be happy to sell it to you at a little bit of a discount, but not this steep. And if you don't want to do that, it's okay. Let's just put it on the market and we'll just both get our money out of it.
Yeah, because I guess the other kind of an issue is he does live at the property, too, to where he would have to, because he owns 50% of it, he would have to move everything.
That's his problem.
Yeah.
It's not your problem. Okay, so let's walk back. How old are you?
I'm 25.
Okay. And how long ago did your mom pass?
About five years ago.
Oh, my God. That's been going on a long time.
Yeah.
So he's been sitting there. Has he been paying you rent?
No.
So he's living in the house rent-free for five years?
Yeah, the house is paid for.
Yeah, I know. But he's not paying any rent for your half?
No.
You think that's fair?
Well.
Do you think that's fair?
That you take your 20-year-old nephew, whose mother just died, and don't give him anything for his half of the asset? I think your uncle's a skunk.
Yeah. I don't care.
If I have a 20-year-old nephew and his mom just died, my job is to take care of him, not pee on him.
Yeah.
Right?
Yeah.
Hello, son. Seriously. And you're scared of this guy.
I was just about to say that.
This guy's a problem. All right. Now, what's the house worth, honey?
Everybody said $900 on the low end.
Okay. So let's pretend it's worth $900.. It has no debt on it, right?
Yeah.
Okay. So if you sell it, you guys are going to spend somewhere around 10% of that in selling expenses. So it's going to cost you close to $100 in selling expenses. So you're probably going to net $800.. So your half is worth somewhere around $400 if you all sell it.
Yes. What did he offer you?
He offered me $360.
Okay. That's not bad.
Or any.
Okay. You said it was hundreds of thousands off. It's not. Your half. after selling expenses, if you all sold the house, is worth some...
I mean, the thing's worth $800,000, right? After expenses. Okay. It's worth $900.. If we take 10%, 12% off for expenses and negotiation off of appraised value, it's not going to be that far off.
You know, if you pay a 6% commission. as an example, if you had other miscellaneous expenses, you negotiate a little bit, you pick up the title policy for the buyer or whatever, and your net profit on this property is going to be somewhere in the $800 range. Your half's worth somewhere around $400.. He offered you $360?.
Yeah.
Take it.
That's not bad.
Or any.
Where did you get that? you were getting $100,000, or $200,000 less than it was worth?
Just talking with people, trying to.
I know. How did you get there? I mean, the numbers you gave me, do you see how I just did what I did?
Yeah. I've seen how you're doing that. Yeah.
Thank you. Unless you didn't think you were going to have any expenses selling the property.
He didn't account for expenses.
Yeah. But even then, it's only $50,000. is your half of that. Yeah. Half of $900 is $450,000, and he offered you $360,000..
So you thought that $100,000 was off?
Well, because the realtors on the low end of said $900 to where the house next door, similar square footage, sold for $1.
1.
. For the low end of $900 to where it just seems a little off.
Wait a minute. The realtors are off?
Well, the numbers are a little low, at $360,000.
. This seems like...
No, they're $40,000 low if the house is worth $900,000.
He's saying it could be. What you're saying is based on comps, it might be worth more. Is that what you're trying to say?
No, you just told me it was worth $900,000, and then you changed that. So which number are you going with? that is the value, son?
Well, on, the low end is $900,000.
. The high end would be $1.1..
Okay. So say $1 million.
No, no, no, no.
You don't get to have a 20% range in value on a million dollar house. You need to figure out what the house is worth. If you want to be fair, exactly fair, here's what I'd tell you to do. Order an appraisal. Pay $500 for an appraisal.
Find out exactly what the house is worth, and quit talking about ranges of $100 to $1.
2.
Several people in that conversation don't know what they're talking about. The thing's worth something in there, but that's not a range that you don't... If you're getting ready to put a house on the market, you don't go, well, it's worth somewhere between $900,000 and $1.2..
We got comps. This thing's worth $1.15, and we're going to put it on the market at $1.2 and hope. You figure out what it's actually worth. So let's get an actual appraisal or a very, very professionally done, high quality realtor doing a comparative market analysis, either one. Then take 88% of that number.
You follow me? 12% for expenses. 88% of that appraisal number divided by 2, and that is what your half is worth. If you do that, and the appraisal is $900, the 360 offer is not a bad offer, and I'll get up off your uncle, then. That's what I would do.
This is the Ramsey Show.
Well, the money and marriage weekend here on the hill at the Ramsey Event Center in October, with Rachel Cruz and Dr. John Deloney, spending three days with you talking about money and marriage. It's fun, funny, and a little bit blunt.
Yeah, they go there, and sold out. You can't get a ticket for October. It's gone. Sold it out two weeks ago. The tickets are six.
They start at $6.
99.
. The VIPs are a lot more than that. if you want to sit down front and hang out and do all that kind of stuff. It's a two and a half day deal. The gang decided we're going to do another one, since that one sold out.
We're going to do it on Valentine's Day 2025.
Another money and marriage event with Dr. John Deloney and Rachel Cruz. It went on sale, I guess it was yesterday.
Thank you. It's not sold out, but I mean, wow. A popular little product here.
It's a great event. It's a wonderful event.
The two of them are funny and fun, and they're irreverent, and they're real and authentic. and all that stuff that people like. You'll communicate better. You'll strengthen your emotional connection. You'll get on the same page with money.
Hey, it's two and a half days away from the kids, so shut up. It's a money and marriage getaway. Valentine's Day 2025 on sale now. Tickets begin at $6.99.. Please don't wait around.
You'll have more FOMO when you miss this one.
And it's still a full weekend, right? 13th through 15th?
It's a what now?
It's still a full weekend, right?
It's a full weekend. It's Friday, Saturday, Sunday, or Thursday, Friday, Saturday. Thursday, Friday, Saturday.
Ramseysolutions.
com slash events. Get your tickets. To the 4,000 of you or so that signed up for Dave Ramsey's Investing Essentials. that ended last night. I taught it the last two nights, two hours a night.
Thank you. Wow, what an incredible turnout to that virtual online event. Not my favorite thing to do. I prefer to be in front of a live studio audience instead of a bunch of blinking lights and a camera. But George Camel and I had a good time.
And they had cookies.
And we had cookies. We had American cookies. Chocolate chip, American cookies. I'm just saying. I was jealous.
I was watching through the screen. Bless his little gluten-free heart. He went and got some gluten-free cookies. And you could taste the fact that there weren't any little glutens in it. I'm just saying.
You could tell.
Yeah, you can tell.
I'm not sure those are real American cookies. But we had a lot of fun with it. And all the investing stuff. And, man, we went super nerdville. And if you missed it, we'll try to do it again for you someday.
Because I've never taught that material before. It was a lot of fun to teach. Jennifer is with us. Jennifer's in Denver, Colorado. Hi, Jennifer.
Welcome to the Ramsey Show.
Hi, Dave. Thank you for taking my call.
Sure. What's up?
My question is, how do I go forward supporting my family financially? I just kind of went through a little separation. We're back together. We're going to work on our marriage. Go to counseling.
We just had our first child together. He's three and a half months old. And neither of us are working right now. But I'm staying with my parents and they're supporting me and my son. My husband is actually in rehab, kind of waiting to start working as soon as he can.
So I'm just at a point where I'm not sure exactly where I need to go and what to do to support my family financially at this point.
You've been through hell. What's he on?
What was that?
What's he on?
It was alcohol.
And so he's in inpatient rehab?
Yes, he is.
Good. Good for him. He's getting some help. How old is he?
He is 29.
How long has all this been going on?
So we met actually last year in May, so a year ago. And we got married pretty quick. And then, within the first week that we got married, we got pregnant.
Yeah, but he was an alcoholic before you met him.
Yes, he was an alcoholic before. And while I was pregnant, I was working two jobs at one point to kind of support us financially.
That's because he was just drinking. So now he's on the wagon and he's in rehab. Yes. Have you gotten some help for you to be able to walk through and keep good, solid boundaries and have reasonable expectations of his healing to go forward?
Yes, I am in counseling.
Good. Okay. Yes. But you have a place to live. You're with your mom and dad.
And you have a baby. And what bills do you have?
So I have a car loan. I owe about $18,000 on it. And I pay roughly $500 a month for it.
What's it worth?
It's worth probably $12,000 at the most.
Who said?
CarMax.
That means it's worth $15,000.
. Okay. CarMax is offering you a wholesale price on it because they want to buy it and resell it for a profit. So go to KelleyBlueBook.com and look up private sale and you'll see that car is probably worth $15,000 or $16,000.. Do you have any money at all?
I don't.
Are you working at all?
No, I'm going to start working next week. Hopefully, I have a job interview tomorrow so I can start working again.
What will you be making?
$22 an hour and I'll be working three night shifts, from 10 p.
m. to 6 a.m. a week.
I want to start talking about scraping up some money and getting this car sold. Okay. It's a burden. You need to get about a $5,000 car that you pay cash for and get rid of this $500 payment.
It's a huge problem in your life right now, mathematically, isn't it?
Yes.
If you didn't have that thing around your neck, this whole conversation would be different. Agreed?
Yes. How are you paying for it now?
So my parents have been helping and also they've been paying me to help take care of my grandmother. Her health isn't the best right now, and so I've been kind of pitching in to help with her care.
Well, your parents are good. They've been giving you a good safety net and they're taking care of their grandbaby and their daughter and they're trying to love you well. And you're being good in that you're thinking about how I can create a sustainable life. And you're smart because you're not afraid to work and so you're going to get some work. And then, if we can get your expense level way down and get your income up to where you're stacking cash while you're with mom and dad and he comes out of rehab in 90 days clean and then both of you get to work, you can start building a life together then.
Yeah. Okay.
Yeah, you can do that. So we got it because he's probably in there for what, 90 days?
He can be there up to nine months. He's been there almost 60 days right now, but he can't start working until he's hit the 90 days. So he's kind of in limbo waiting to work.
Okay. Cool. All right. But does he transfer to outpatient after 90 days? Is that what he's doing?
So he's going to still live at the same place.
Okay. He's got some good insurance. Who's paying for his insurance?
Yeah, Medicaid.
Good. Okay. Good. Yeah. Well, his job is to get clean and stay clean.
because he's a dad now and a husband. He's no longer a party animal. And so good on him that he's doing the hard work, and your job is to demand of him, if he's going to be in your presence, to get clean and stay clean. That's your job.
That's what your therapist is telling you, right? Yes. Okay. Good. That's the way it is, because you got to be careful on the codependency side of this equation too.
So you're good. You guys are a sweet couple. You just walked head on into a buzzsaw and now you're fighting your way through it. And I'm proud of both of you for throwing your shoulders back and facing this. You're going to be okay if you keep facing it.
Have you plugged into a good church, kiddo?
I have not. No, I have not been to church in a while.
I would recommend getting that family and that element of your life around you, because a whole person has a spiritual walk, emotional healing, intellectual healing, financial healing, work in all these different areas of our life to create a whole life that is sustainable. Okay?
Okay.
All right. And you hang on, kiddo. We're going to help you. I'm going to put you guys through Financial Peace University. We want to walk with you and be part of this wonderful healing story.
We want to see what God does in your life. It's going to be pretty cool when we get to the other side of this and we look back and go, wow. Someday you got grandbabies and you look and you go, man, this guy, sure glad he straightened his life out. This is the Ramsey Show.
Jade Walsh, our Ramsey personality, is my cohost. Thank you for joining us, America. Hey guys, we're about 12 miles south of Nashville, in a wonderful little town called Franklin, Tennessee. The Ramsey campus is here and we have a big, beautiful lobby with a great coffee shop in it with homemade cookies. They're chocolate chip, by the way.
And of course, and some coffee, and it's all on us. Come by and visit. You can see some of the history of Ramsey in here. You can watch the show. We do it live on the glass from one to four central time every weekday.
And we'd love to have you come by and see us. There's usually 50 to 200 folks sitting out here. Sometimes there's two and sometimes there's 300.. So you never know. And in the middle of that lobby is also the debt free stage.
Brandon and Morgan are with us. Hey guys, how are you? Better than we deserve. I love it, brother. Where are y'all from?
Rockford, Illinois.
Cool. Welcome to Nashville. How much debt have you guys paid off?
$672,000.
How long did this take?
Four years and nine months.
Gee, man. Wow. What was the range of your income during that time?
$165,000 to $335,000.
Nice jump. What do you all do for a living? We're veterinarians. So you got the practice and gear, huh? Yes, we do.
So can I guess what the type of debt was?
Yeah, two vet bills.
Student loans?
Yeah, we had $57,000 in two different vet trucks. $80,000 in student loans.
We're large animal veterinarians, Dave. Yeah, okay. I'm getting that.
And then $385,000 when we bought into the clinic as a partnership. And then $150,000 for our mortgage.
Okay. Wow. I thought it was all student loans. I'm glad to hear it wasn't all student loans.
There was $92,000 in student loans before that for my half of student loans. And then we got married in June of 2019.. And then we really got gazillion tenths on the rest of the debt.
So did I hear you paid the mortgage off, too?
You all are weirdos. How old are you two weirdos? 30..
I just turned 32.
You're 32 years old, 100% debt free, and you own part of the practice or all the practice?
A portion of it.
And that's a big practice. then. Okay. What's the house worth?
Now it's like $230,000.
Way to go, y'all. And you got two fabulous careers. Both of you vets. Both of you doing large animal. And you're kicking butt.
You're making $300,000 plus. Way to go, y'all. You're rock stars, man. Very, very cool. What got you on this Ramsey stuff?
What got you so fired up?
We had a couple great mentors who are also veterinarians. And when we were students, you travel around to different clinics. And we got to go and stay with Dr. John and Lori out in Idaho during our clinical year of school. And Dr.
John sat down with both of us the separate times that we were out there. And he walks through a budget with you, and he introduced us to this plan. Wow. Thanks, Dr. John.
And Dr. John is now a long-term missionary. And he had us start teaching other vet students about this through a Christian veterinary mission as an organization. And then any vet student that arrives with us, we try to share the financial piece. Thank you very much.
Wow. You guys are amazing. 30 years old, $672,000 paid off in four years and nine months. What do you tell people? the secret to doing?
that is? Work hard. You worked all the time.
Work hard. Don't complain. Just have long-term vision.
You have no idea how it pays off.
So when Dr. John sat down with you and went over this Ramsey stuff, did you have any pushback? What was the hardest part of taking it on?
I know, when I sat down with Dr. John, I went out later than he did. But we have to run our own vehicles when we're doing large animal work. And he told me just to buy a lot less truck than what I dreamed of coming out of school with. So that was a hard pill to swallow.
I had this dream of it.
She got a pretty nice truck.
Yeah. For those of you that don't know, the only people that are dumber about pickups than construction people are veterinarians. Very true. Buy a truck. that's 60 times what it needs to be to go visit a horsey.
I mean, come on. Wow. Way to go, guys. I'm proud of y'all. Excellent.
Very, very cool. So you report back to Dr. John. Does he know he's this big of a success?
We keep in touch, email, and we told him when we paid off our debt. And we'll try to send him a video of this now.
You need to, because he gets a lot of credit in this particular version of a debt-free scream. I'm proud of him, too. I appreciate him. I never met him, but I hope to. Or maybe I haven't.
I don't know.
I have a question for you guys. I mean, we have people calling all the time that want to be vets, and they're looking at $400,000 each of student loans. How did you come through this?
With only $80,000?
. Yeah.
We both worked during vet school.
I didn't think you were allowed to do that.
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