Spending Money You Don't Have Won't Help You Win
2024-07-04 01:57:51
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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 wash, all Ramsey personality, is my co-host today as we answer your questions about your life and your money. Open phones. a triple, eight, eight, two, five, five, two, two, five.
Ariana is with us in Portland, Oregon, to start off this hour. Hi, Ariana. How are you? Good. How are you better than I deserve?
What's up? I?
am trying to Figure out how I can get my husband on the same page with his out of control spending, so that we can have an emergency fund to fall on and Pay off some of our debts that we have.
Mm-hmm. Well, what is this out of control spending? What do you mean? My husband spend?
Over a thousand dollars a month just on phone game. Oh.
phone games.
Like candy crush. Yeah on his iPhone. Oh.
Wow,
Yes, and it. I found it. I look at our statements.
Yeah, when you say that out loud, does it sound as crazy to you as it does to me? Yes, like this is. this is. this is like illness level. Mm-hmm.
I'm.
last year he.
I'm sorry, you cut out honey. What'd you say?
Oh, Thousand, you're cutting in and out. you spent what? 14,000 last year. Yeah. Yeah, what's your household income?
Apparently, your phone has not been paid.
I can't. oh, you're losing most of your phone here. So, okay. So what is your household income?
83.
$83,000.
. Okay. Are you somewhere where you can walk and get a better signal? maybe? Because you're losing you about every third word.
All right, $85,000.
. How old is your husband?
I have a question for your daughter. I have a question. It's just what I'm wondering. something tells me This is not the only thing he's overspending on. What else is he spending crazy money on?
His car is what his car. his car car, what's that? Yeah,
He has a 91 Volkswagen.
Yeah, okay, which? yeah, just that just screams money right there, um, I'm a stay-at-home mom, you know, and I.
Am the one that pays the bills. yeah, and I pinch.
Money wherever I can. Okay, we can get those paid. You're? you guys need to see. you need to get some professional help.
That's what I'm thinking to you. Yeah, because this is not a.
$100 and he makes 200,000 and it's over. I know, I know it's 14,000 a year, and the money we're spending on the car, too. So there's something I'm sure you're aware of this, or maybe you haven't heard, but in dealing with our phones, What we are now discovering is that a lot of the things the games and the games have actually have them. They've carefully designed the games to create a dopamine hit to cause you to come back again and again and again. They've designed these games to be addictive.
if you're not aware of that. That's, it's very true. Okay, it's also true of, for instance, the way the videos now work on slot machines. They have carefully designed those To be addictive, and So your husband is involved in an addictive behavior loop. Because if you just say what he's doing out loud, everyone that hears it except him thinks cray-cray.
Yes, they think he's nuts. I know, Okay, and so this is not a money problem. This is, you have a husband that is addicted problem. Now, what do you do with that? Cocaine?
if your husband was doing pornography? if your husband was doing some other form of addiction, what would you do? Well, you would demand that he gets some help and you would begin to see someone to Build language and a narrative, to talk to him in such a way that he starts to understand that he's destroying Himself and his family with this behavior.
Yes,
I'm talking at him.
This point what?
It feels like I'm talking at him. Oh, yeah, you are, you're talking to an addict. I just feel like I'm nagging.
He's glazed over. you're talking to him when he's drunk. Yeah, you can't talk to a drunk, Right. You don't make any sense. And so but you.
what you do need to do is sit down with someone that can give you some language That says okay. This is terrifying me. I have a baby and I feel like I am in the house with a cocaine addict. Right, because you are exhibiting the exact same behaviors as a cocaine addict.
Yes, and he just spent seven hundred in the last three days. Yeah, so it's getting worse.
Well, I mean we've established. he's out of control. We don't need anymore. We don't need any more evidence. That's established.
Does he think that there's a problem at all? or when you bring it up, is he like no, this is fine, This is, there's no problem here.
He's told me twice that he was going to Disconnect to the car from his phone, but then I did not happen. Yeah. Well, I mean, I'm promise you.
I'm not gonna get drunk anymore, but I am hanging out in the bar, right? Yeah, right.
Yeah, we do have a car payment every month and With what he spent last year, we could have paid off the full balance of what we owe left.
Yeah, but we could. the car payment is not your problem. Your husband is an addict. Yes, and you need to start treating this situation like your hair is on fire. Okay, with lots of urgency.
Mm-hmm. And so are you guys, by chance, in a good church? No, we're not. who is in his life that can talk to him that will listen to him. It's not you.
Definitely not me. I Have. I think that we'd have to hire somebody that doesn't know us because he doesn't have a father figure or a.
Mother that he'll listen to. so you need to. you need to say honey. I'm going to Marriage counseling because I'm afraid our marriage is going to end, Because I'm terrified that I'm married to an addict. You are completely out of control.
I'm going to go see a marriage counselor to try to save our marriage. I hope you'll come Okay, and set an appointment and go Okay, regardless of whether he goes or not. you go without him. Okay, and have that person start to teach you how to speak to an addict to give you any possibility of getting through The fog of this Into his brain. and he remembers that he's a husband and a father More than he is a game player on a freaking iPhone.
I don't care how much he works. It doesn't mean you don't get just because you work a lot, doesn't mean you get to do cocaine.
Sorry, that's not how this works. I think he's not a trade-off here.
I think if I were in her shoes, his phone would suddenly go missing tonight. You think it would just look at you. It's almost like it ended up in the river and no one knows how I got there. I have no idea where it is.
You know, after I dropped it out of the car, doing 95.
. I have no idea what happened to that exactly. It's somewhere between one of those mom.
No idea, but he'll have another one by morning if he's not. well, that's true. This is the Ramsey show You.
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Jade wash. all Ramsey personality is my co-host today. open phones a triple, eight, eight to five, five, two, Two-five. Andrea is with us in Houston. Hey, Andrea.
How are you? Good, how are you better than we deserve? How can we help?
So I just started your university and I've got all the materials. I'm kind of thinking a little bit ahead and I was contemplating what to do with the two cars I have.
Okay, basically, they're both upside down big time, but I mean in a perfect world I'd love to sell them both and get a really cheap minivan that I can fit my five kids.
What do you owe on the first one?
It's 37.
What's it worth?
Well, one place, one dealership called me, said that they could pay 40 grand for it. But then the car, fax or max whatever, just saying like 30, like really low 30s.
Okay, well, what's the other one? yeah, it's the truck, it's 47 on that one and Definitely I could. I know I can only get like 30, probably 30, mid-30 for it. Okay, the Traverse is upgraded, but the truck isn't, it's just the average Dodge Ram.
Okay, so have you. let's do a little bit more research on this first car and find out if you can really get 40 for It. because, if you can, are you looking at to just, you're going down to a one-car family or you? because you could take The 3,000? if you, if it really is worth 40, put it towards a 47 and keep rolling, or, if you're, if you were wanting to Sell both, at least that 3,000 could go towards the amount that you're upside down in car number two.
You have. you have any money like 20 grand upside down at least? yeah, well, that's that's Dave's next question.
Is do you have any money set aside whatsoever?
No, that's literally the plan, so I have to still save the thousand emergency I've been. I'm credit cards are starting to get paid down and I plan to cut the first one this next week, and so I'm kind of Still thinking. I tried, though, because I want to attack this pretty intensive. So your plan was to sell both cars.
What was your plan after that? I guess I'm trying to get on your train of thought, because I can tell you what I would do, but You're gonna sell thing.
Yeah, I'll sell both and get a cash for a car like a minivan that I can fit. all five, okay.
And then what does your husband drive? I'm divorced. You're divorced. Oh, so you own two cars with one driver, Right. Oh, okay.
And what's your householding like?
Okay, right now I'm the self-employed business owner and so after business expense and my cut, basically after employees, it's 120 a year. good,
Okay, good, So you're, you're on it. I love your intensity. Thank you. Thank you. Thank you.
You're gonna go places. You're gonna be okay. Yeah, so Well, do you how, how bad is your credit?
It was close to 740. now it's down to a 650 because I've chosen to pay other stuff rather than credit cards.
Mm-hmm. Do you have who's the truck loan? with who do you owe the money on the truck?
Well Fargo, so it's a good bank and it's a good interest rate.
No, it's not a good bank, you know, It's not a bank that's going broke. But um, okay. So what I would do is trot over to, as well as Fargo got a branch there that you work with.
Mmm, I kind of ordered the car in line.
I mean I can look for a branch there be. what I want to do is talk Wells Fargo, and I would prefer to do It in person. talk Wells Fargo into letting you sign a note for whatever the truck doesn't bring, So that approximately $20,000 or so. Hopefully you can get more than 30 for it. hopefully your your data is wrong and you get into KBB and you do a Private sale and you get 35 or 37.
then you're only 10 in the hole. Yeah, you would borrow that 10 from Wells Fargo and Then they would release the title to the buyer, Because you've got to sign a note for the difference. in the words, They're making you the equivalent of a personal loan, which they already have. They're just admitting it. Mm-hmm.
Okay, because the truck's not worth enough to cover in the event of a repo. So they're already not. they already don't have sufficient collateral and they're just allowing you to get rid of the debt, Which ensures that you're actually going to pay the 10 Or the 12 or the 15, or whatever the difference is. So that's what I want to start with is try to get them to cover. Let you sign a note for the difference.
how much other debt other than cars. Do you have?
Credit cards, personal loans and my student loan, which How much? credit card. so the credit cards are probably totaling about 10 grand left to pay. good Personal loan is about 10 grand as well, because I have to. they're small, Perfect.
and then the student loan used to be 20,000 out to 9,000.
Okay, I paid that down. Okay. So what I want? to temporarily stop paying on the student loan completely. Who's the personal loans with?
First of all, it's some silly companies called opportunity prize. They were basically when, Because I have four months with my work And so I didn't have emergency savings or any kind of bill savings until I got personal loans out.
Okay, I'm just wondering if they would loan you the money to get out of that car if Wells Fargo won't.
That's right. I don't they would.
No, I'm not talking about if you pay it off. I'm talking about the $10,000 hole difference. $15 hole. You're in on the truck. Oh, I'm trying to get rid of that truck today and you've got to give Wells Fargo $47,000 to get the title to that truck to sell it.
in Order to do that, You've got to cover the difference, the amount you're in the hole. if Wells Fargo won't let you sign a note for the difference, You got to find another bank or credit union. You loan you that. that's why I was fishing around for. so Now, yeah, I'm selling, selling both of them, if I can find a way to cover the truck deficit by borrowing that amount, And then you're going to.
that's going to get rid of way more than half of your debt. And yeah, scrape together the cash with the difference on the van and whatever other cash you. if you have to stop debt snowballing for a minute and Get you a $5,000 van. Yeah, right, I hope you can get five more for the van than it's worth and then you can just go get a $5,000 van. Then we can get the truck sold.
that's going to leave you 10 or 15 in the hole. Then you got 10 on credit cards, 10 on personal loans and 20 on our nine, nine on student loans left. So, you know, you're gonna be out of debt really really fast with your intensity and your intentionality.
You're really doing good. Really good. That's exciting. I'm excited. It's not even my situation.
You know, she's really taking action.
Let me tell you what. when you start saying I'll do whatever it takes and you mean it. Yep for towards any goal, You're gonna get the goal. Yeah.
Well, she's. you can tell she didn't say what it was, But she's got a reason and it's it's very clear what her reason is and why she's got to do this and why she's got To act so intensely. and that's really the difference between her and somebody who calls in, you know, lollygagging through this thing. Yeah, it's.
Probably pretty easy to surmise. a stinking truck was her exes. Heck. Yeah, Oh, yeah, that thing is. there's a lot of reasons to be pissed at that truck, But the yeah, getting rid of that and Wow, and then cleaning up this mess with your hundred twenty thousand dollar income.
In one year, you're gonna be in such a different place because you're willing to amputate these vehicles Where you're willing to get rid of them. and so you got to set up the deficit, You got to cover that deficit and then you're gonna be fine. All right, Jeannie's in New Jersey. Hi, Jeannie. How are you?
Better than I deserve.
Anyway, I, I just I had a question. I hope it doesn't sound stupid. I'm kind of doing this by myself and I did go through FPU. I didn't have the best experience, but I I'm smart enough to to know How to eat the meat and throw away the bones, if you know what I'm saying? So I, I went through the course.
I feel like I went through steps one through three, relatively easy, and I'm wondering is there ever a time when it's okay to be Intense to? I need to buy a house very soon. And is it okay to be intense in step six?
I'm kind of, since I never really felt that I'm kind of interested in what these bones you're talking about. But um, I'll say that till the end, You know, I think some people they go through one, through three quickly, or maybe they had something they were able to sell, or it's not as Much of a process. So if you want to go quicker through baby steps four or five and six, that's up to you. We tell folks they don't have to be intense. But if you want to be, you know, that's up to you.
if you want to get there quicker, you know, do your thing. I'm not mad at that.
This is the Ramsey show.
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Jade wash. all Ramsey personality is my co-host today. Thank you for joining us. America. Jake, is with us in Dayton, Ohio.
Hi, Jake. How are you?
Hey, thanks for taking my call. Good. How can we help?
So world got a little flipped upside down. I got a injury. I'm 26 and They said that I'm gonna need a total knee replacement and It's not going to affect my career now, however, in the next 10 to 15 years, I'll need a second knee replacement and Based off that, they said a decent chance. I would not be able to go back to work. So I'm trying to grab that job.
Yeah, in this career field, so I'm a, I'm in law enforcement. so okay, my thought process, I figure out, is Do I go ahead and switch careers now? Because I I don't want to, you know, keep dumping money into a pension and then be 40 with kids and then have to switch careers and Take a pay cut? because everything I'm looking at right now is a significant pay cut to where I'm at.
Okay, well, let's just change the set of assumptions. what do you make?
Last year, with overtime, I made 102.
. Okay. All right.
so The assumption that you can't make 102 ever again in your life is not a correct assumption.
You know, sure, yeah, I get that. it's just everything I'm looking at right now.
I know, but I don't know. right now, your hearts kind of broken because you've had your height, your your Sight set on being in law enforcement, your whole life or a large portion of your life, and you're heavily invested and then you got injured and you've gone through the trauma, the emotional trauma of the injury and the physical trauma, and Now they're telling you that that you know, your dreams are gonna die early, Right, and so in that mindset, you usually don't see this the sunlight, you usually see the storm clouds.
That would be in human nature. not not that you're a bad guy, okay, But I'm not sitting in all that mess that you've been through. and so for me, I'm got 26 year old guy who's bright enough to become a police officer. He's bright enough to become a lot of things Between now and ten years from now. I mean you could open a business and make two million a year.
I don't know.
How old are you 26? I'm in 26 and I, since I found this out, I Signed up for classes again, and me and my wife are cash flow in that good. I'm just trying to. yeah, I don't know like How long is too long to stay in this career based off of you know?
Like when? when's the best time to switch careers? Well, number one, you don't want to get injured again, Or, or, you know, leave your partner in trouble because of an injury or something like that. And Number two, you don't want to. You know, wear it all the way down, but do we have to decide this week?
No, we don't said. this week, I mean we have to go work at Chick-fil-a. No crap. No, I thought what you're doing, Okay, you, but you know, what I would do is say okay, over the next two to three years, I'm gonna develop a career my next, my encore career, my next career, after the curtain goes down and comes back up, and I'm gonna get you know, what classes I have to take her certifications. I have to take to be that and I'm gonna become a student of Ken Coleman and and go live my next dream, which, Oddly enough, might end up better.
Now, I like that. That's interesting. Yeah. Yeah, that's.
Thinking God's making me Making me change your career. here. I'm trying to figure out well what what kind of timeline is here, you know?
Yeah, maybe, or, or you know. you know, my whole life was set up for me to be a real estate investor, and Then my real estate portfolio was deeply in debt and I lost everything. and I was 28 years old, just a tiny bit older than you, with a brand new baby and a toddler, and And went bankrupt and lost everything. Mm-hmm. And so I get to have a new career after that.
because, guess what? They don't loan you a bunch of money at the bank to go do flips if you just file bankruptcy. So that was kind of out, and so those days were over, plus I was done with them because it didn't bring me a lot. And so and bought the time your knee got busted, you know, You're, you're part, you're partially over being a policeman at that point, because you're like this. this is less fun than I thought it was.
Yeah, you know. and so you're having a little bit that same kind of an experience and you get this next chapter of your life, this Second half, so to speak, and I, yeah, you know.
I think about things like that, even what you just said, Dave, you did this. I was just about to say I came from entertainment. I was an entertainer my entire life, and then kovat happened and there was no entertainment and I had to contemplate my life and Fauci being entertaining. That's how low we got. but I realized hey, there's other things I can do, There's other things I'm good at, and I think that you'll find the same thing.
and I'm the type of person Where I think we just go from from good to better to best. like if you, if you're living your life, right? It's just getting better and better. and I think that this has the opportunity to take you on yet another adventure. That's gonna have another great outcome.
you know, being a law enforcement officer is gonna be the first part, and then you're gonna move on to something else, and then, who Knows you might move on to something else, but that's just the evolution of life and it's not a failure. It's not an. it doesn't have to be a negative. This can be a. this can be one of the greatest things that's ever happened to you, because it'll open that that next door.
You don't know what's gonna be behind it, But you got to keep turning those knobs and something's gonna be behind there and you're gonna look back on this and go man. Here's what my prayer always is. I want to look back and go man. I'm so grateful. XYZ happened, because when that happened, it allowed me to do this, this and that, and this has the potential to do that for you.
You'll look at this right now. It's painful. It sucks, But in a couple of years, in eight years, in 12 years, I would have never got dot-dot if it had happened. Yes, you know, I never would have been at Ramsey if it wasn't for 2020.. Yeah.
Yeah, and everybody hated 2020.
. Thank you.
Thank you, that's the only time we'll say it. that's the only time. it's one time you ever hear that Nobody, nobody, but except the plexiglass people say thank you, Fauci. I'm just saying now, that's what it means to get Fauci then.
So, yeah, that's the thing anyway, but I mean, yeah, the point is, I mean I didn't, I didn't sign up for bankruptcy, It wasn't what I wanted. No, And I won't say it's the worst. It's the worst thing that ever happened to me. It's the best thing there. I agree both.
Yeah, very dramatic, traumatic, And I, you know, I still, you know, we've got the actual bankruptcy filing on the wall. Wow, bankruptcy out here in the, in the Ramsey Lobby. when you come out here Just so you can see how this started and I walk by that. I still kind of go.
You know, but it's been 30 years and I still get the heebie-jeebies, But yeah, but so it's not like I'm still joyful about the whole thing.
But you know, never would have sold to me and books selling houses. Yeah, I feel that I, I thank God that we went through.
$460,000 of debt. at the time. I'm gonna sign you up for Ken Coleman's career assessment and It takes about 15 minutes to take. I'm gonna give it to you free and I want you to take that and it's gonna kind Of point you in some directions that you probably were already thinking about, but it'll start to give you some clarity on that And I'm also gonna send you his book from paycheck to purpose, Because I think what you've got here is not the end of the play. I think you've got the second act, mm-hmm, we're between the first act and the second act and There's no rush.
You said you've got ten years before. this is going to go sideways on you, so to speak, and.
But so I mean we can take two or three, we can take six months and figure this out. We do want to actively figure it out, though. We don't want to sit and let this situation happen to you. You want to happen to it. be proactive, but let's determine, you know, okay, here's the direction, Mm-hmm, and then, and let me tell you what the direction is, Jake.
The direction is not Go back to school. That's a good point. That isn't? people get this. I just go back to school.
for what? because if you don't know, because that's just, I just go back to school. No, that's dumber in Iraq. You might be studying exactly the wrong thing and you may not even need to go to school for what you're thinking about doing. So, when we talked to a guy the other day, he's making 300,000 a year and he has a landscaping business cuts grass.
Yeah, you know, yeah, shut up. Yeah, do not go back to school unless you know, you've done your research. You are locked in. you have to have it. Yeah, you definitely don't go into debt for it.
No, But you have to have. you have to have the degree or the knowledge base to open up the feet, you know It's permission to play in the field. You're going into right? Okay, and so, you know, what do we got to do there? And you know It could be as simple as I may not be appealing to you.
could be as simple as you work on your master's level stuff And admit in law enforcement administration and you move up into leadership And you know where the knee is not the problem. and that changes the whole discussion. I don't know. and maybe maybe you're, but maybe your love of law enforcement parlays you up into that. It's okay to be either any of those, but do it intentionally.
take two to three years to get tooled up. Begin to make your move gradually. So you sneak up on this. It doesn't sneak up on you, and we'll send you the tools from Ken Coleman to help you do that. This is the Ramsey show.
I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.
yeah, and what's so hard is I feel like one of those, especially the ones that I'm like. Oh, it's terrible air people that call in and their spouse has passed away suddenly and they don't have life Insurance. when you have to think through how am I gonna pay my bills?
I'm gonna know next week. Yeah,
how, in the middle of all that grief, like it's just it is, it's terrible, as a life insurance is the one thing, especially as a mom with three little kids, that I'm like So big on for people to get because it's inexpensive. Xander is the place that Winston and I actually get all of our life insurance and it doesn't cost much because Xander shops among a gazillion.
Different companies. It doesn't cost much. You just have to admit that someday. You're not gonna be here. You got to say it out loud and you got to say I'm gonna say I love you to my family by taking care Of them and taking the time to put this stuff in place.
the cost of stinking pizza. to get a free quote call 800, three, five, six, forty, two, eighty, two, that's eight hundred three, five, six, four, two, eight, two, or go to xander.com
Jade wash. all Ramsey personality is my co-host today. Thanks for being with us. America. open phones at triple eight, eight, two, Five, five, two, two, five bills in Hartford, Connecticut.
Hey bill. How are you?
Hi, David, okay. Thank you very much for taking my call. Sure. What's up? I look so I have a question.
so I own a condo with my wife and I Was wondering is it possible to rent instead of owning a condo to save up to buy a house?
Why, what is your opinion? why oh?
I owned, so I lived in apartment kind of in-house and me personally. I like a house. better like the house is the best.
Okay, but I mean you want to buy a house. I got that, but why don't you just There's a condo have equity?
I Don't. I mean, I don't know. Here's the thing. I bought over 160,000 and It could probably sell now for 185,000, because that's what my neighbor sold his for.
Okay, so you're not got much equity by the time you sit, by the time you pay expenses. You're just gonna get out. You think so? Yeah. Yeah.
Yeah. Mm-hmm. Yeah, $20,000.. You're gonna spend You're probably gonna spend most of that on commissions and expenses to sell the property. I mean not, maybe not quite that much, but yeah, very well good.
So Yeah, you're not gonna come out with a big pile of money or anything when you sell it And then you're gonna go rent something and save up a down payment.
Well, what are you paying? What are you saying?
That's.
What he said, is that what you said?
Yeah. Yeah. What are you paying now every month?
So the mortgage this is including the kind of fees is 1232 a month.
Do you think that you would be able to rent for cheaper than that?
Well, I looked online and rent ranges from 1200 of 1500 to 1300 in Connecticut. Yeah, yeah, so a one or two bedroom.
So you're not going to do any better.
Hmm. Well, okay. So here's a situation. So stuff like, say, for example, the furnace went out. I had to pay, you know, $4,000 to replace it.
Yeah, cuz you own it, Yep, I mean, what would it benefit me to live in a place where I don't have to pay for fix things up?
I wouldn't do it. I would stay where you're at if it was some drastic. You know, If you had a bunch of equity in there that you could get your hands on, that would be one thing. if You found that it was going to be a drastic change, you know, between renting and what you're paying now and ownership, I you know, you could consider it, but for you, there's no real difference. I mean, you got to put your emergency fund aside, you know, for things that pop up, and yes, Homeownership or condo ownership in your case does come with things that you know, you're on the hook to repair.
But in your case, I think there's no reason that you can't start saving for a home now. How much do you earn every month?
Um 5,300 after taxes. Yeah. Okay. So here's the thing.
three years from today, between now and three years, if that's what it took, or four years or five years, if that's what it took to buy that next House, to save up, to buy the next house. During that three, four or five year period of time, rent is going to go up every year, Okay, and the value of your condo is going to go up every year, But your payment is not. So I would stay in the condo and keep my expenses low, Even though you just had this Horrible thing I have in a bottom furnace, and that's kind of made you go kilter on it sideways, but Jade's exactly right. I would sit right there until I can save up my down payment and or the condo grows more in value and Will help provide you with the down payment for the next move. Yeah, I don't disagree with you that a home is a better standard of living for most folks, Especially in early stages of your life, moving towards marriage, kids, that kind of stuff.
So I think you're. I think your direction is a good direction, but what I would do is sit tight and let's have this fixed low payment and deal with whatever repairs, but also get the benefit of increased value. and While you're trying to save up and buy something. that's exactly it, and I want to make sure that if he has debt.
He pays that off first.
Absolutely clear your debts and and be working on your income during that time to which will affect what you can buy. Dave is in Philadelphia. Hi Dave. Welcome to the Ramsey show.
Hi, thanks for taking my call. Sure. How can we help?
So my. I'm expecting my income to increase pretty dramatically in two years, But in the meantime, I'm having trouble Paying costs, including two kids in daycare. So my question is is it okay to go into debt, take out a loan? Or is it better to become extremely frugal and cut costs as much as possible?
See work more.
None of the above. So what, what is this guaranteed income increase, this dramatic in two years? explain to me what's going on?
My wife is doing a medical residency and two years should be done with that and get a job as a doctor.
Yeah, I will increase things pretty dramatically. That's great. And how much debt will you guys have?
Right now we have, We own, a house and aside from the house. We have about $25,000 in student loan debt. and is she borrowing to finish medical school? No, she has no med school debt. Wow, did the student that is mine, okay, so that she'll graduate debt-free in two years?
She's done with medical school. She's in doing her residency right now.
But I mean she'll graduate, finish, she'll finish and pass her boards after residency and become an MD. That's correct. Okay. Excellent. And no more.
So what's she making in residency?
About 70,000, and what are you making?
About a hundred and ten thousand. you explain to me why you can't get by on a hundred and eighty And you have to borrow money because you can't get by on a hundred and eighty thousand dollars, that's not right.
We are child care costs about come on.
Hundred and eighty thousand dollars, and you're gonna explain that with child care. Hold on. How much are you paying a month in child care?
It's about eighty thousand a year.
Why? You bought him in college.
Did the base tuition for the child take care we use is 25,000 per kid. then we pay extra for early care and aftercare and it doesn't go during the summer. So during the summer we need a nanny.
There's. there's cheaper route. look, I know that there won't be as nice as I can, Dave, you guys have lost your minds.
There's cheaper routes. Oh, yeah, there's cheaper routes.
That's all I can say, because you got them in some kind of dadgum, I mean, are they going to Harvard? what the?
Downgrade y'all think.
They're not even in school and you're already paying 25,000. I had. Yeah, come on, dude. That's just dumber than crap.
Seriously downgrade. it's going to. it's time to take the kids off filet mignon care.
Money you make. there's not enough money in the world. It doesn't make that stupid gosh. find you a free summer camp, anything During the summertime. borrow money.
now, we're going to take out student loans for the four-year-old, Because that's what we're coming down to. don't do it. No, you make a hundred eighty thousand. Yeah, I think you need to become frugal. if that's what the definition of living on a hundred and eighty grand is, yeah.
Killing me. daycare is expensive. daycare can be expensive, but it doesn't have to be that expensive.
Let's just put a thousand a kid. Yeah, I think not, believable, think not, I think not.
Yeah, I think I think you can. just I'm having trouble here. I think he can get. I think he can get it for half That half that yeah in Pennsylvania. I gotta believe that.
Yeah.
Yeah, if not, if not, we're opening a daycare tomorrow, I know right here. Philly, Dave's kids heading off to Philly, Load up the truck and head to Beverly. Oh my gosh.
Golden knows daycare.
Like George's doggie, daycare People man the things we now call necessities in this culture. So no, sweet guy. You're a nice man. I'm sorry to make fun of you, but that's crazy and y'all need to cut that out. That's not a good investment.
Your children are precious and yes, they're worth whatever, but you don't need to be nuts about it. Yeah, and and this is crazy, Especially when you tell me you're talking about borrowing money to cover this expense Among others, because you got what? two kids or three kids at 25 K a piece. Two is 50 K. for daycare.
It's two kids. That's too much. I think we can universally agree Among all the listener base. Yeah, nope, It's too much. then then guess what?
You've solved your problem. You don't have to borrow money, David. seriously, if you say out loud in America today, I can't make it on 180,000.. So I need to borrow money. Just the fact that you enunciated that is a problem.
This is the Ramsey show.
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Thank you for joining us, America. We're gonna talk about your life right in front of you talk about you right in front of you. The phone number is triple eight, eight, two, five, five, two, two, five. you jump in and we'll talk. Michael is gonna start this hour.
He's in Dallas. Hey, Michael. How are you? I'm good, Dave. Are you doing better than we deserve?
What's up?
Nothing, so I'm in an interesting predicament. I've incurred about 60k worth of debt trying to survive a lawsuit I.
Started a company with four gentlemen down in Austin. Things were going well. This started right at the beginning of COVID and we progressed for about three years towards the end. There were some, let's say, vision differences and me and my partner ended up selling the company to a company out of Houston and to the other gentleman. our CTO and our CRO basically stole all of our intellectual property.
and the problem lies. I have about a Roughly about a $250,000 stake that I'm kind of chasing, Trying to figure out what I should do and whether or not I should. I should give up and call it quits, but things have come, basically Sucked me dry and I'm getting kind of desperate. So Yeah, I was hoping, hoping to get some guidance.
Well, I don't borrow money and.
I hate your position, because this kind of stuff. I'm a redneck. It makes me mad. I want to fight to the death. Yeah, and yeah, you don't let you simply don't have a war chest.
Yeah, and yeah, you could go. you could go another $60,000 in four years in debt and Still never see any of this. Yeah, cuz about, the only thing we're all sure about the court system is that it sucks. Yeah, I mean, even if you're right, it sucks. it takes forever and a lot of money to prove you're right and.
So no one ends up winning, as you figured out, but the lawyers Yeah, even when you win, you lose.
And the other, the opposing party. one of the gentleman, his wife, is a lawyer. She's actually a partner at a firm, So they've been very successful at just burying us in every which way they can.
Kicking the can down the road, dragging it out and make it trying to starve you out. It's not a bad strategy on their part, actually, but yeah. Yeah.
I mean you said you're a stake in. this is $250,000.. Maybe, maybe.
So that that's essentially what my my payout would be. But because they have stolen the intellectual property and done a split-off company, The company who bought us pretty much put a pause on it until you know, everything is resolved, because that's what they paid for, and.
Through just a number of loopholes, I won't bore you with. they've basically been able to pull all of the, I guess, most relevant information and Critical things that we would need, and You know, they're. they're really just kind of holding it at this point just to hurt us or harm us, and so the info.
They're not competing with you with the IP yet, But they've, but they've undone your your sale by holding the Iraq. Yeah, correct. Yeah, they they have, they have the.
Inclinant, like they're starting a company that is supposed to do something similar, the company that you sold to do. they have deep pockets.
They do, yes, I'd cut a deal with them.
Go to them. go to them and let them fight it and tell them you'll take, you'll deduct the The legal fees from their, the stake that they owe you.
Yeah, they owe you 250 if you win. right, if you don't win, the company that bought this has got nothing. Yeah, because they got a competitor in the marketplace and they don't even have access to the IP. right now you're telling me Correct. Yeah, so they've got to win or their sale is bad.
And what they're doing is they're saying we're not going to pay you the 250 until You give us what we bought, which included the IP, right? Correct. Yeah. If I'm that company and you came to me, I'll go knock them in the nose, because I got the money And I did this deal to start with. so in other words, they owe you 250.
if they spend 150 on this to get it. You're gonna get a hundred.
Yeah,
the otherwise.
We. we have a number of investors. I'm probably the smallest split of that. the total sale of the company was ten million dollars.
Yeah, well, I would go to some of them then and do the same thing. Yeah, and just go, guys, I'm out, I can't, I can't do it anymore, I can't. I'm not financing this on a credit card. This is stupid, I can't? I?
I'm not. I don't have big enough war chest to stay in the fight.
You know, I reached my end, so I'll give you If you'll give me credit towards it or or I'll even discount my share.
And then you, you know, take my share of the legal fees out of it and pay me out if you win. good luck. I'll be happy to sign it over to you on that basis.
Yeah, Yeah, well, the issue too is, I'm, I'm probably the smallest fish in this entire equation. I'm only 28. most of these people are 40. just you know, longer careers, a little bit more of a war chest, like you said. Yeah, my only concern is One.
if that were to be the case, I would get some sort of payout and then they end up losing.
Right, then you won't get a payout. Yeah, yeah, they're taking the chance then, not you. That's why you would discount your share. Okay. So if one of the other investors said, okay, we're going to continue the fight, you can't, and we'll continue it on your behalf.
We're going to take your pro-rata portion, the future legal fees, out of your share And we're also going to discount your share since you're not in the fight anymore. That'd be a deal for you.
And it's not a bad deal for them, because you're tapping out either way.
Because if you tap out and do nothing and they go win, You're gonna get the full thing. So it's a better deal for them if you offer to let them Continue the fight on your behalf and you give them credit for that. That's a better deal for them. How many? because there's like 10 or 15 people playing in this.
you're saying? Yeah, yeah, this is not it, this is a complicated mess. yeah, Wow, Yeah, leave some people's children. Yeah.
Yeah, that sounds very, very, very stressful. there's a lot of money at stake.
Yeah, you just can't stay in it, Michael. You've got to find a sugar daddy to keep you in the deal.
Yeah, well, yeah, cuz, if he tries to do this, He'll mess around and spend all his stake on lawyers fees.
Well, you won't. even even then he got. at least he wins, but he gets nothing. That's what I'm saying. He goes turn $50,000 in debt and then loses.
Oh, then he's yeah, double completely screwed. Yeah, you know. so you just got to stop, Michael, You got to stop, but I would sell out my part to somebody, the buyer or the other investors, or somebody at a discount yeah, in Today, or if they want to give you cash, that'd be awesome. or if, or better yet, I would discount it and offer to have them reduce the Amount by the my share of the attorneys fees going forward, my 115th or whatever. that ends up being.
like you said, you're in a Untenable situation. This is why we don't believe in partnerships around here. boys and girls, The only ship that won't sail is a partnership. This is the Ramsey show.
This show is sponsored by better help. This is Deloney and I'm always railing against social media, especially in the summer, because everyone uploads the highlight reels of their perfect bodies and perfect vacations and perfect kids, and I know they're Not real, and I also know that I'm blessed beyond my wildest dreams. But I still find myself wishing my life was like other people's and, based on the data I know this is happening to you, to comparison is wired into us. but comparison can also become the thief of joy, because we can feel like we're not enough and begin acting and thinking in ways we Would never think otherwise. when all gets to be too much, think about contacting better help.
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We need your help. It's a way you can help us. We appreciate you. let people know that we're here. Gonzola, our Gonzala is with us.
Gonzala. How are you? And that was good, how are you better than I deserve? how can I help?
Well, thank you for what to do. I am six months into a cash value insurance policy. I'm sorry policy.
Yeah, this was before I started hearing your podcast and the way you feel about that.
I did stop contributing to my 401 To make the payments for this because it's, you know, the payments, about a thousand bucks. I do have some, Some of my 401 still, You know, I'm still contributing to it, which is the amount that my employer matches. So I'm taking advantage of that. So I am six months into it and I wanted to know if Stick with it or you think I'm better off cutting my losses and if you, if you had a.
Suitcase of money laying in the back seat and the back door flew open and it was flying out. What would you do?
I'd probably stop it. Yeah. Yeah, you probably closed the door.
Ended. Yes, That's what's going on. You're getting screwed man big time. It's the world's worst. I Mean that the whole life is the payday lender of the middle class.
It's an absolute Horrible set of mathematics. Mm-hmm. It's the worst investment product on the market by far. The only people correct that sell this stuff are the people that sell this stuff. They're the only people that believe in it.
I mean all the rest of the financial world looks at this and goes. Oh my god, and It's just, it's trash. So yeah, You need to do your investing in real Investments, not in something that has a poor rate of return. and when you die, They keep your money. and that's what whole life is now, this policy, this whole policy.
Before you do get out of it. We want to make sure that you get into a term life policy at the very least.
Have you got good term insurance in place already? I?
Have about the same amount benefit, a couple of separate policies. Mm-hmm. So I Don't necessarily have the need for it. Um, The, the reason why I went with this was an investment in that amount, you know, tax-free, correct, No taxes at the end. That was the selling point and that's what got me.
You know why there's no taxes, that you know, why there's no taxes at the end Because you make a money And they never text you when you don't make money.
Okay, so if you put money in a mutual fund and it does not go up in value, there's no taxes at the end.
Correct. if it goes down in value, There's no taxes at the end. if they take so many fees out of it that the net net net to you is no gain, There's no taxes at the end. Oh, and by the way, when you borrow money, even if it's your own money, you're borrowing, Which is what a whole life is. borrowed money never has taxes.
you go get a loan at the bank. They don't give you a tax on that loan. There's no income tax on borrowed money, even if you're borrowing your own money. and So if you put a CD in the bank and then you go borrow against the CD and take out a loan, There's no taxes on that. Of course, there's no taxes on borrowed money.
So that's the biggest scam in the freaking universe. There's no taxes. Of course, there's no taxes because it sucks. Yeah, I don't usually charge you on something that sucks this bad. Yeah, please, please, Please, please, cancel.
I hope I haven't been unclear. All right, Matt is in Baton Rouge. Hey Matt, how are you?
I'm doing well, sir. Thank you for taking my call. Sure. What's up? I Just have a quick question.
So I'm a relatively new listener and I started listening just in time to hear you talk about the bank craziness going on and I'm just curious. might be a really stupid question. But how can the FDIC? Ensure every deposit under $250,000? where do they get the money in?
I'm not even exactly sure what the FDIC is.
Okay, like a brief crash course rundown. Sure. It stands for Federal Deposit Insurance Corporation. It's the federal government writing insurance against your banks failure Now. do they have a pile of money equal to everyone's covered amount?
Absolutely not, but your insurance company does not have a pile of money equal to everyone at State Farm totaling their car this week either. If everybody told their car at once State Farms gone, They don't have that much money. Okay, what they're running is they're running probabilities, statistical probability of this occurring. and so if enough banks Went down at one time to destroy the amount of money that the federal Deposit Insurance Corporation, the federal government, could get their hands on, That means the entire American economy has collapsed and you should buy a gun.
Gotcha, gotcha, so it's. it's publicly funded. No.
Well, it, Matt, think of it like how your insurance works. if you have State Farm, Everybody's paying their premium and they're paying into this big pile of money So that when somebody needs to actually use their insurance, there's money there. and it's the same thing with FDIC. These insured banks are paying premiums to FDIC. Okay, so there's a big stack of money.
The banks fund the FDIC with their premiums, but they don't give it enough money to cover all bank failures is simultaneously occurring. No, Gotcha, but it is a lot of money. It's plenty to cover anything that's actually going to occur. But if, but but the mathematics are to your point, Matt. The mathematics are just like if all of State Farm Autos had a got totaled in one month.
They would. there's not enough. They don't have the money to cover all that because they're running it on probabilities. and so this is an insurance policy based on a You know a, a projected number of bank failures in a given decade, Plus a lot, and so it's a very conservative Set of mathematics, meaning you could have a whole bunch of banks fail. We had a lot of them cashed out FDIC and went belly-up.
FDIC took them over, resold the banks, the sale of the bank. the money goes back into the insurance policy as well to cover. But that happened in 2008, a lot more than in the last three or four months or so. Yeah, so, but if you had Twenty five thousand banks crash at one time, There's not enough money. And by the way, of twenty five thousand banks crash at one time, We got issues life as we know it in America no longer exist.
That's right. There's a whole lot of other crap that goes with that. That can't be just an independent thing. Yeah, you got to understand that if that occurs.
Everywhere you shop is out of business. Oh, yeah, we're looking for clean water and in supplies.
Yeah, we're not. we're not looking for gold. Yeah, that's exactly what we're doing. so that that, but it's a good question, it's good something to think about. so No, and it's good that you know, we do a little bit of education occasionally here.
Jason's in Dallas, Texas. Hi, Jason. How are you? Hey, how are you today better than we deserve? How can we help?
Appreciate you taking the call and condolences to your college, Susie as well. That was really sweet, what you did for. Thank you, Look, we're losing our husband. So.
You know, I have, I have some issues and I have some kind of questions. I'm sure that you get to the questions through the issues, but um, a few years ago, Probably four years ago. My wife and I picked up and moved from our home in Los Angeles. when we got to Texas It was about a year before the pandemic. I felt like something was going to happen.
I'm just seeing where la hit was going and Jason. I don't know, but I am up against the clock.
Go ahead and just ask me your question.
So we have a new business and a new baby, a lot of debt.
When I had the baby last year, I Was trying to pay us, you know, a top salary, but I feel like I'm now bleeding my first baby, which is this new business. I'm trying to get my real estate license to supplement some income. But what do I sell, what do I get rid of? to prioritize? The debt while also keeping up with this big new.
This big new thing in my life, which is was just trying to raise a new kid. Hey, man.
Very cool. Hey, we're gonna put you guys through Financial Peace University too, because I am up against the clock. I'll make sure you get served. Okay, but in the meantime, you got big hairy car payments. get rid of the big hairy car.
You need to prioritize very carefully and keep that business running, Because it's the golden goose is laying the eggs. But don't leave a bunch of extra money down there and don't do a bunch of reinvestment down there. Take it home and clean up the mess at home. It's a balancing act between the two. I wish I could give you a more detailed answer.
Hang on, Jay Austin. I'll pick up for you.
Jade wash, all Ramsey personalities, my co-host today. Thank you for being with us. Kaitlyn is in Milwaukee, Wisconsin. Hi, Kaitlyn. How are you?
Good. How are you better than I deserve? What's up?
So I guess to get short with it. I need to figure out how to.
Essentially get my spouse. he is mentally on board with me, But not physically on board with me in not just baby steps, but financial aspects in general. he has a bit of a addiction with instant gratification.
Okay,
It's not an addiction, it's not an addiction. It's just immaturity.
How old is he?
He is the same age as me. He's 32.. Okay. How does that manifest? What does it look like his spending?
We'll put it in addiction for quotes right now.
Sure. So he is pretty. he's got a little bit better. I'll give him that credit, but he is pretty selfish. Some examples are Instead of, I mean the family car was a decent family car, one that that fits the kids.
We out, unfortunately, outgrew it, not to him knowing, but then he, instead of just leaving it as a daily, he needed to Lower it, which makes it more expensive and ruins the car more. then he needed a bias Customized steering wheel that absolutely wasn't needed. then he needed to do this and he knew that. He souped up your family minivan, well, it's not the minivan, it was a wagon. It was his daily that would still fit us at the time.
Not anymore, but at the time would fit all of us, Mm-hmm, and then I had like a daily that would fit all of us. and is he creating debt while doing this? Well, I can't even argue Like. I can't even like, fathom the amount, like being a person that before I met him I bought my own house as a single mom. It completely destroys me.
Like I, I meant, I have so much stress from everything he's done. actually, the last year. I spent hearing like stress seizures.
Wow, okay. Um, You said he had children. how many?
We have three children. One of them is not biologically his, but he, since day one, has taken care of her. like he has said, she is.
Well, I, this is not a money problem, it's not a budget problem. this is a marriage. no, it's a marriage problem. and so We end up backing into those, sometimes through budgeting and that kind of stuff. but there's budgets don't control people.
people control budgets or Don't, or in some cases don't do a budget, or in some cases, don't live with a budget. But budgets aren't. they don't have any magic powers. It's just simply a road map. maps don't control people.
You just look at the road map and am I gonna go down? I gotta go down the road or not, you know, that's all a budget is, it's just a map. and so And and wives don't control husbands and husbands don't control wives As much as they'd like to and as much as it would be awesome if we could pull it off. We just can't do it. and so What we've got here is, as you said, I you know, selfish and immature Guy who's putting his own?
Impulses ahead of the good of his family. How about have you guys reached out to a counselor? That's what you need.
Yeah, yes, so we've done marriage counseling already that I set up that. then he denied you're not done marriage counseling, But he was ready. No, I know. so we've done these things, because that's where it's led to. I've all, did he go?
He went two times to the one I set up and then he did I going because he was Essentially being blamed for things and he didn't like it. He's getting defensive and it's like well, not saying that I'm perfect, But you know your selfish habits are creating an issue. Then he set up marriage counseling. He also, more recently, is going back to therapy for himself. I'm sorry years ago, but he is going now.
And now he is seeing a, and I don't remember the difference between psychiatrist and psychologist, but technically I guess being both.
So he's got a lot of stuff going on.
Unfortunately, yes.
Um, Yeah, the first thing you said when you said, hey, we went to counseling, He didn't like my counselor, because this isn't that I will say. Both spouses need to feel good with the counselor, because you know Sam and I, you know We've gone to counselors and it's been like I don't like her, or I didn't like him, and is, you do sometimes have, but if.
You don't like them because they're telling you the truth. That's a problem. Yeah, that is a problem.
Yeah, yes, I also didn't like if a guy didn't get his name right a couple times, which I won't argue, You know, whatever, but um, but yeah, it was mostly because of he's telling him the truth and he doesn't want to hear it.
Yeah, so he is going, and he is going for himself. That's good. I think the hard part with this is This is not necessarily going to be mean that next week things are different, right? Like. this is something that's gonna play out over time, And he's still actively creating debt for your family at this moment in time, right?
We're not, unfortunately, yes, even though we try to work out things that you know, give him Leniency isn't really the word.
And the dead to have if he's, if he's running these things up on credit cards? is your name on the credit card? Or is it just these are cards that he's pulling out and he's doing this on his own?
So he, he had like one in my name that he put into Collections, that then I paid off because I was also on it trying to help him build credit from when we first.
Got married. Okay, and that one's closed.
Yep, and that one's closed. He did have. he's got three of his own. He hasn't touched credit cards in a couple years, Mm-hmm, and then he then I you know, He, we kind of discussed how we're gonna make things work and I asked if he was ready. And so he got a $300 limit back, Like two weeks ago, and he racked that up plus he had $100 cash.
So he spent $400 about five days.
So I took the credit card away. I was like you clearly aren't ready. You told me you're well.
I think I think as a rule of thumb in your family in general, You need to cut up all the credit cards and no one uses them. No one uses any more credit cards. So that's thing. one is, we just don't operate on debt anymore. I mean my screen says that you know, If you're in trying to do the baby steps, like, you definitely cannot use credit cards anymore.
So those get cut up. and then after that, yeah, you probably do need to have a really a real conversation about how His access is to this money. if he's just gonna go off and spend five and six hundred, I mean that is that's a scary position to be in. Dave. Okay, Lynn at some point.
And through you, working with a counselor, or working and or working with his counselor. The day is going to come and it's coming pretty soon, based on the tone of your voice that you're finally going to say something like If we can't get on the same page with money and You can't be a grown man and take care of your family instead of buying freaking steering wheels, Then I'm not going to be able to be here anymore.
Because you're terrifying me. I Am awake at night. I've never been in debt like this. You're out of control. childish behavior with money is Terrifying me.
I Can't live like this. so if you can't be a grown man and learn to Control your impulses. You're not a twelve-year-old little boy. you're acting like one, but if you can't be a grown man, and we can't get a bead on, we're gonna manage our income together for the good of this family. that will include you doing some fun things and me Doing some fun things, but it's going to include being a freaking, responsible grown-up.
And if we can't get to that point, I'm not going to be able to be here, and you need the guidance of a good counselor on how to say that and when To say that. I'm not suggesting you hang up the phone and say Dave Ramsey said that, sure, But I'm telling you, if you do not get there systematically and begin to put that in front of him One day, here's what's going to happen, and I know this because I've counseled thousands of couples. you're going to have that little switch that particularly ladies have down inside them and it's gonna blow a fuse and you're gonna be done, and no amount of talking and no amount of Conjoling and no amount of logic and no amount of preachers and no amount of nothing is gonna get you back in the marriage. You're gonna wave bye-bye Because you're gonna blow a gasket and you will have had it. and I've tried to reel these ladies back in after they've blown it And show them that the guy gave.
he gave in. he gave in too late. She's gone. All you see is her back walking away. She's done you wait, you just kept on.
you kept on. you kept on. you kept on until she blows a freaking gasket and You're. it's in your voice. I can hear it.
So you need to keep away from that gasket blowing by getting some coaching on how to bring him to bear Before you don't care if he comes to bear anymore. This is the Ramsey ship.
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Dead wash. all Ramsey personality is my co-host today. if you're ready to buy your first home in this market, It's not because of luck. It's because you've been putting in the work. You've been kicking, but you've been budgeting, You've been saving and we're fired up for you.
We don't want your hard work to go to waste. buying a home is the biggest purchase you'll ever make, so the last thing you need to do is fly solo or Work with some kind of brand new, sweet little real estate agent that doesn't know what to flip They're doing, even if it's your aunt, Susan. I know she's a nice lady, But you don't leave this up to an agent who's good enough. You need great. a Ramsey trusted agent is a great agent.
They set you up for success before, after the closing day, during the closing, Find the right house, keeping you on track with your goals and making sure you're confident in your decision. Ramsey trusted pros get our stamp of approval because we know they work hard to serve you, Not to pad their paycheck. You've worked too hard to buy your first home with anyone, But the best. find a Ramsey trusted real estate agent by going to Ramsey solutions.com slash agent. Ramsey solutions.com slash Agent Mary is with us in Tampa.
Hi Mary. Welcome to the Ramsey show.
Hey, thanks for taking my call, Dave. Sure. What's up? So, um, I don't know where I should start, but um, I've got over $85,000 with a debt with my husband That we've incurred over Probably the last 15 years. been having trouble paying it off.
So we're married for now. I'm not sure how much longer, because I talked to a lawyer. He called him a schmuck, basically.
The lawyer called my husband a schmuck. I know it's my beautiful. I have a high school graduate that's going to college In August, I have a special. we have a special needs daughter. He's 13 years old And I didn't work for like eight years, but I went back about seven years ago and I worked my way up And I'm making about 75,000 right now.
and he's finally. he had his own business. that's not doing anything, Lost our butts, trying to sell our house And, you know, using our profits to pay off all the debt from from his business. But he finally has a job, a stable job in the past year and a half. So I'm trying to figure out how to pay off or how we're supposed to pay off this debt and.
And gracefully exit out of the marriage we had to. we're renting it now because we sold. we sold our house.
We don't have. let me stop you a second. Okay, Mm-hmm. Um, how long have you been married?
Eight, seventeen eighteen years, I'm sorry, longer than that 24, my dad 24 years. Yeah, that's correct.
What? why is your marriage over?
It's been mentally checked out for Sometime. for many, many years. He worked a lot, worked a lot, trying to make money didn't in the beginning and eventually nothing, and then the lockdown hit and We were able to stop some some of the pain of not having money, but I've been working so And a year ago, he told me he had a relationship with someone and so basically.
I was. I was waiting for the part. Have you filed yet? Have you filed for the divorce yet? No.
No, I just, I just. I can't afford to like. I don't know. I'm in Tampa. I think you're just.
everything's ridiculously expensive and I can't. I've been looking to see. you know What my options are, but I can't afford to like live alone right now.
Didn't you say you make 75,000 a year? I?
Do people make 75,000 a year, live up by themselves all the time in Tampa. That's a kind of average. They don't live in your neighborhood.
But they live already lived out of. yeah, but we lived out of the neighborhood. We live on the French. So to save money, because rents were about thousand dollars more where we were at. Yeah.
When you talk to your lawyer. when you talk to your lawyer about this, have you done any research to find out what the cost is? What might happen with your debt?
That sort of thing. I don't know. Yeah, I don't know what happens with the gut and I'm not sure if I Remember asking him about the debt. I just know that everything else is no fault. So basically, we just kind of walk away.
It's not like one of us makes more than the other person right now.
And She wants. my husband wants to consolidate the debt.
So it's 85,000 in credit card debt. we paid off our he lock and all this other stuff we had When we sold our house, so we were pretty much left with nothing after we sold our house.
Okay, and I guess all the credit card debt is in both of your names.
Yeah, the one cards in his and two are in mine.
But is it about half?
Yeah, the two that you have about forty, two, five.
Yeah, thirty. they're all thirty across the board.
And this is hard making the payment.
Okay, so you're seventy five thousand dollar a year, single mom that has thirty eight thousand dollars in credit card debt after the divorce, right? Mm-hmm, and you have a special needs child, Yes, and he would, and I hypothetically, be paying child support. Mm-hmm. I.
Know. yeah for him. Yeah, my other daughter's gone now. Oh, she's 18 now. Yeah, so hypothetically you have child support in the special needs child, right?
Yes, okay.
And so you're. I'm sorry, this is a very sad situation, it is, But you're not Mathematically trapped.
Mm-hmm. Lots of people make $75,000 a year in the Tampa area that have thirty, about thirty eight thousand dollars in credit card debt in one kid. Mm-hmm. Lots of people. I don't believe I help that.
We have a lot of health expenses because my older daughter Actually has more hope. it has more health issues than my younger daughter and my special needs daughter. They're both you actually. So we're constantly running the doctors, doing surgeries, doing different things, Car repairs and just, but that it just. you know, that's not going to change, Yeah.
You're not stuck mathematically, Mm-hmm, you're not. if you want to be, you can decide. you are, but the numbers you've given us it's not got you stuck in this. and If he's having affairs and you're going to end the marriage based on that, Then you're gonna have half of the credit card debt And you're gonna have the care of a child and you make $75,000 a year and you're gonna go rent an apartment.
I Never been in a situation where money is managing, where money is being managed effectively, right? And now you're about to go off on your own and you don't have the confidence of knowing I can take the $75,000 a year and I can manage it effectively. it can be because it's never been enough before, right? So you don't know, like inside your body, You don't know that this is gonna be enough, that I'm gonna be able to take care of my kids, that I'm gonna be able To pay the bills and then I'm gonna be able to pay this debt off. You don't know that.
that's I mean.
you understand that the story you told us has you all mathematically in With him working and earning. you working and earning in the best place. You've been, and probably a decade. Mathematically, you're in the best place Relationally, obviously. relationally.
Obviously, you're not the best place. She doesn't feel that She doesn't. you don't have any respect for him because he didn't make any money during this time. He's a schmuck because he slept around on you. And so, relationally, you got those things to overcome, for this marriage to survive, if it's going to survive.
but mathematically, You're in the best place. You've ever been, You know, with his income. if you, if the marriage survived, with his income and your income, if you both decide to manage money together, You could clean this mess up rather quickly.
But we just resigned our lease, that's 2300. I mean the net. We're where we're at. that's like the cheapest that we could get. so we just really doesn't sound like someone that's filing for divorce to me.
Mm-hmm who's filing for divorce that re-signs a new lease?
For a year. Well, I don't know. I don't I, just I don't either. who does that much going on mental?
I don't know. I think you just made a choice. Thank you. Yeah. Yeah.
Yeah, you're. she was like, I have no choice. Yeah, I have no choice. Well, you had a choice, but you felt like you had no choice.
But you're taking your choices away, but if you want to be stuck, Oh, yeah, you know, you can be stuck if you want to be, but you're not stuck. So, um, you know, I I think that you guys could Sit down with a good marriage counselor and invest some time and energy into this 25 year Marriage and give this a shot, Since you just signed a one-year lease. I kind of think you want to do that deep down. And, by the way, if you ask a divorce attorney if you're supposed to get a divorce, a hundred percent of the time they say yes, It's like asking a dog if it's hungry. This is the Ramsey show.
Live from the headquarters of Ramsey solutions, it's the Ramsey show. We help people build wealth, do work that they love and create actual, Amazing relationships. Thanks for joining us, America. We're so glad you're here. The phone number is triple-8, 8, 2, 5, 5, 2, 2, 5.
that's triple-8 8, 2, 5, 5, 2, 2, 5. Jade wash, all Ramsey personality is my co-host today. Sula is on the line in Hartford, Connecticut. Hey, Sula. What's up?
Hey, how's it going? First of all, thanks so much For the work that you do. I've been following Ramsey solutions for a while now and subscribe to the YouTube channel, and I'm really really happy with. You know the results that I've seen following what you've guys, what you guys are putting out.
So, thanks again for what you do. Well, thank you. And I think I butchered your name. pronounce it for me. It's a lot.
So, a lot. So a lot. Okay, I'll get it right. Sorry about that. Okay, what's up?
Tell me what's going on.
all right, so um, Some background. I'm 22 years old. I graduated college. I got married a year ago. All right.
Yeah, about a year ago, and.
I Got a baby on the way, which has been kind of the driving factor in getting my affairs in order and wonderful. yeah, so I, my big thing is. um, I, You know, I, I know that I make, you know, definitely gross over a hundred thousand dollars a year, but I'm just struggling with, You know, just balancing everything. I feel like somehow some way the money's not stretching the way it should. You know, I come from a family who definitely didn't make that much money and somehow things felt different.
So I always thought six figures would be that big number, but it's just not what. it's not what I thought it would be.
It's not as much as it used to be. Is it just you working or does your wife work as well?
My wife was working, but we agreed that once we Have a child, that she would, that she would be a primary homemaker, and so she's not working down up.
Okay. Um, so tell me a little bit more about your debt. to where you're feeling like this hundred K isn't what it used to be.
Okay, so I the primary debt that I had when I first started getting into credit cards. I would just you know You know deal percent interest and then flip it on to a bet with a zero percent Intro offer for a balance transfer, and I did that about three times. So, how much credit card do you have? so yeah, now I'm sitting at about.
6,000 and outstanding Debt. that doesn't include the month-to-month cards that I'm paying, but those are almost paid down to zero, Probably like a thousand between the three or four cards. I pay those only month to month, but the one, the two that are in zero percent interest, Those they end in March and and they're about 6,000.. What's the total amount of the debt, all the balance?
9,500, I believe. okay. What else do you have? I Have 5,500 in student loans that, of course, just started being due for repayment, and my wife also has about 10,000 in student loans. Okay.
How much on your car again?
No cars. We I'm a car guy. So we own our cars out, right?
Okay, what's your mortgage?
No mortgage. I rent. So wait a second. How much is your rent?
1,500 a month. Okay, and how long ago did you start trying to follow our stuff? a month or two?
It's been like three months, but I mean, I didn't really have much income to go off of initially. I I started. I'm an uber driver. I have a full-time job with my degree in effectively in IT and I I also started uber driving And I started kind of kicking that into high gear to try to get these credit cards paid off. and that's been my Avenue.
So you're just getting started and you've not really gotten the budget dialed in yet, No.
That's really all. this is because I'm looking at a guy who makes a hundred thousand dollars a year. You got twenty five thousand dollars of student loan debt or of debt period Actually less than that. so I don't think it's a lot of debt, but I don't think it's the Big fire and exploding thing that you think it is in your head. I think that if you guys get on a simple budget and you live on eighty thousand dollars instead of a hundred thousand dollars, You're knocking this debt out super fast.
That's that's. if you just okay, we're gonna. we're gonna cut back, But if you really got crazy, you'd knock this out very quickly.
Yeah, beans and rice, rice and beans, a detailed written budget on the every dollar app. You and your wife agree that we are doing nothing except eat and diapers and Electricity and pay rent. That's it. Nothing. We're doing nothing until we get this paid off and $2,000 a month and you are free in one year.
Yeah, you guys are newly married.
You got baby on the way. you guys have been spending a lot. That's that's what I'm seeing here.
Well, and I'll add to this, I'll take up for you just a little bit. you live in a very high tax, high cost of living town, that's also true, Connecticut is the highest taxed state in the Union and Hartford is a beautiful town. very expensive, agreed.
Yeah, I, just that's kind of my big thing is. I know it's a hundred gross, but yeah, I mean after taxes.
It's definitely not a hundred, and no, I know it's not. Yeah, I know it's not, but you can do that. You can still live on. even in spite of that. You can do this.
Okay, this is doable in New York City, It's doable in LA, and so it's doable in Hartford, and thankful you have a good rent.
Situation too. So that's good.
So I think the thing is that the piece that will come to this is you and your wife are in agreement That for a short period of time we're gonna live like no one else, so that later We can live and give like no one else, including Super big-time. take care of this baby. Mm-hmm. and so you have a new reason to delay pleasure, and that's adults. devise a plan and follow it, and Children do what feels good.
You're gonna do great. So we're gonna give you a gift to say Congratulations on a new baby and help you get started on all this. and we appreciate you following us on YouTube. and the gift is You and your wife to go through Financial Peace University And get signed up in the every dollar app, the world's best budgeting app, And it'll break every one of your paychecks down for you. It'll show you how to use the baby steps exactly and Financial Peace University.
I'll teach you the things you should have been taught about money, but weren't taught The things we all should have been taught about money, but we weren't taught. and So we're gonna give you every bit of that, and it's completely free. you hang on, Austin. I'll pick up and we'll get you signed up for that. Jade, One of the things we saw with the every dollar app you've been doing some of these, every dollar webinars.
Yep, is that? To showing people how to do the budget. by the way, You can sign up for those if you just go to every dollar comm, slash, budgeting and Jadal, Jadal, be doing those, and Rachel Cruz And George Campbell as well. Anyway, one of the things we're finding is is we've always said it feel like you get a raise when you're on a budget. Yes, but we've actually found a piece of research of the day, said you, it literally is 10 to 15 percent of a year.
Yeah, well, most people are finding three hundred and thirty two dollars extra. That's just money that they were piddling away at Target Groceries. Yeah, they're able to find that money that I mean.
So when you happen to your money, instead of the lack of money happening to you, the efficiency increases. Yeah, you get a raise and you don't feel like you got a raise, and then you don't use that raise to go buy a new car.
Yeah,
So most people do. most people get a two hundred thirty two dollar raise and go take out a four hundred dollar car payment to celebrate. No, no, no, no. No, this is the Ramsey show.
Hey, good folks, dr. John Deloney, here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what Ramsey solutions is hiring, if you're ready to join an amazing team.
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That's Ramsey solutions comm slash careers.
Jade Walsh. all Ramsey personality is my co-host today. Thank you for joining us, America. Well, the stock market's been rough lately. it's been up, it's been down, and it's basically about where it was a year ago.
But it was a wild ride to get to even. The facts are, if you invest $200 a month from age 25 to age 65, you'll have between a million and two million dollars. No, that's not too good to be true. That's based on the long-term average return of the S&P 500. Now, if you're not 25, well, that's okay.
You can still get started. A huge predictor of investing success is that you actually invest. So get a pro in your corner to help you get started. Go to Ramsey solutions, comm, slash, smart Vestor. Our smart Vestor pros are people that have the heart of a teacher.
do things the way that we teach around here. They don't work for us, but we recommend them now. drop down a list of the smart Vestor pros in your area. You can meet with all the different ones and decide which one you want, which one you match up with the best you pick. Ramsey solutions, comm, slash, smart Vestor.
They'll guide you through the ups and The downs of the market. Louise is in New York City. Hi Louise. Welcome to the Ramsey show.
Hello, Dave. Thank you very much for taking my call boy. I sure need your Advice will try. How can we help? Okay.
Well, Let's just say in the past. I'm 68 years old and right now, in the past, my investments, anything I ever did was, Let's just say, it would make you cringe as far as money goes. However, at this age in my life, I'm about three years from retirement. I mean I can retire. now I'm working, I have social security and small pension.
I'm taking all at once. The question I have is this I have a small mortgage on my house and a car that I'm leasing. those are really the only depths that I have right now and In my bank account, let's just say 125.. I Want to pay off the house and then start putting that money into, like the 401k for these next three years. But people aren't like.
every time when they see money here found here. It's like no. No. No, I can invest in this. So, I'm not too sure what I should do.
should I just wait till I retire then pay off my house?
Why do you want to wait till retirement to be free?
The question is and here's the other thing that maybe I'm just old-school, don't know, really honestly, ignorance. I worry about the income that I am having coming in right now, working full-time, Collecting Social Security and a small pension, all at once, Putting money in the bank, then I won't have anything to claim, just me.
on your taxes.
Yes on that, on anything. I mean, does that matter? So then I would have to really make sure So that I am not paying extra. I would have to really.
You're not claiming anything. Now. You're not itemizing. You're taking standard deduction now, aren't you? I Believe.
so. Yeah, I think you are. You're a small mortgage and a car lease. That's not deductible. The mortgage is.
the interest is what's the balance on your mortgage?
Right now it's seventy three thousand. What's your interest rate?
Four, point two, okay,
So four times seven. so twenty eight hundred bucks is your annual? interest. You're not clean. You're not claiming that That's not enough to be your standard deductions.
probably fifteen or eighteen thousand bucks. you're taking standard deduction, So you get no tax benefit whatsoever from this house mortgage? Okay, and you certainly don't from the car, and car leases aren't deductible.
Right that I that I know so by paying this off.
You just don't give the bank three thousand dollars a year in interest, which would be kind of nice. Oh, Definitely definitely. how much is in your saving? how much is in your account? how much money you got?
you said you had a hundred.
How much one. right now? I have a hundred and one twenty off your mortgage in your car today.
All right. All right. How's that? breathe that in? What's it feel like to have no payments?
Oh, It sounds good. Yeah. No, what are we gonna do? We're rich now because you got all your income to start investing.
Okay, that's the thing, though, with investment, because everybody I meet wants to take the money and put it here. put it here, Put it, lock it up for three years. Why are you wanting to meet with people like that? I don't know, because that's who I seem to run into when I go to my keep running, you know, Every time they see my money, they want it.
You need to get online and get go to Ramsey solutions and find one of our smart Vesta pros, So that once you've gotten all of this paid off and you're working full-time, You're gonna invest 15% or more, because now you got your money freed up and you can start really packing away on your retirement. And, as you know, what are you working two more years?
At least two more years. I'm gonna be going to Bible school. So then you know Paris Bible. So I just want to be able to. when I do that, Well, I'm gonna do a part-time and then eventually my second year.
I'll be full-time. get a smart Vesta Pro in your corner and don't do what they say. Learn from them and do what you say.
Nobody gets to tell you what to do with your money, not even me, and I'm good at it, But not even me. you get to decide. you get to decide. I'm teaching today and I'm giving you an opinion of what I would do if I woke up in your shoes. I'd be debt-free by the end of the day.
I pay off that car. Call the lease company, find out what it takes to pay it off and be done with it. Call the mortgage company find out what it takes to pay it off and be done with it. and then I would take the fact that I have no car payment and no house payment and I would load up a bunch of Mutual funds and build me up some money. So when I go to Bible school, I got a little pad And never lease a car again, ever, ever.
You don't need to borrow money ever again. That's right. You're now rich people. Kay is with us Kay's in st. Louis.
Hi Kay. How are you? I?
Am certainly blessed. reason for my call. Oh, cool. What's up? Um well, my family believed in generational wealth and, Based on their amazing decisions.
I have been blessed to get get incoming over a million dollars. Wow, Whoa, yes,
I knew these people existed, but I've never met one way to go. That's awesome. Who was it? mom and dad or grandparents?
Grandma was 94 and she passed away peacefully and was ready to go to heaven. turned out He had been saving and properties were sold. and Wow, That's I can't even hardly imagine. How can we, how can we help you? So the only that I have is my mortgage.
that's automatically gonna go away. Good. What's it? How much is it you?
Like $100,000. good. Okay. So now we got 900.. Okay.
Well, it's gonna be more than that.
There's other things coming in, so in excess of a million, so I don't. I don't want to do anything big with it. I can't obviously put it all in one account. It's over 250. good.
so I guess my question is what do I do with this for a year until I can actually absorb this and Sit down and take the time, like I have high yield savings account. Yeah, I pop it.
I'll pop it in some high yields and some different banks. Okay, so you're not over the 250.. Are you married? Yes. Okay.
Well, you can put over. you can put 500 in one bank. Right. You got both names on it. So yeah, and the yeah, if you want to do that and just let it sit there for six months and then study and read and listen and learn and Think.
yeah, and study and read and listen and learn and think and get some people in your corner that have the heart of a teacher Again, like we were just telling the last call or the SmartVestor pros.
Yeah, I'm, I'm just, I'm like you. I'm blown away by this. I think it's really exciting and I agree with Dave. You don't need to make any quick movements. you've got time to think about this and I like what he said about listening and learning.
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