Are You Ready to Find Freedom With Your Money For The First Time?

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people with their money, their work, and their relationships, whether it's friends, romantic, whatever you got going on in your life, we are here to help. I'm John Deloney, joined by my great friend, Rachel Cruz, and we're here to take your calls on just about anything. Alright, 888-825-5225, 888-825-5225.. Let's go out to Johnny Five in Phoenix, Arizona. Hey, Johnny, what's up?

How are you doing today?

I'm good, man. How about you?

Not too bad.

Outstanding. What's up?

Alright, so I'm going through the baby steps, and I'm looking to maybe kind of work them around. Basically, my income is about $8,282, and I just paid off about $25,000 worth of personal debt, and it freed up about $3,700 a month, and I wanted to find out that I have about $16,000 worth of credit card debt, and I have it targeted to have those paid off in about three to four months, and it still leaves me with that 15% that I could apply to it, and I was wanting to find out, one, is it okay to invest that, or should I take that $1,242 and still attack credit cards, or could I turn around and still start to be investing as I'm attacking the credit card debt?

How old are you, Johnny?

I'm 47, and I think that's the call to action.

Well, yeah, well, I was just curious where you were, because here's the deal. How much interest are you paying on those credit cards?

Combined, I mean, it kind of varies and stuff, but half of them, there's probably about 10 of them that I have, and the most expensive or the most debt that I have on one of them, I think it's like $3,500.

No, but what's the interest you're paying?

Yeah, what are you paying on those?

Do you know what? I really haven't calculated it, but if I had to guess, the average ones are probably close to 18%, 19%.

20%, yeah. That's what I was probably going to guess, because here's the deal. The baby steps are in order for a reason, and you're going to have opportunity costs on either side, but you're going to come out better when you eliminate debts. You're not paying that extra interest of 20, some of the credit cards, up to 22%. I mean, it's wild, the interest rate right now.

Yeah. Essentially, I've committed plastic surgery.

Good. Yes. Yes. Yeah, that's awesome. And again, I know it can feel unnerving not to be saving for your future and having retirement there, but here's the deal, you're going to be able to knock these credit cards out so quickly, like with your income and everything, and, like you said, the biggest one's, like $3,500 or whatever it is.

I want that to haunt you, that you're 47 and you're not putting money into retirement because you're still cleaning up old mess. Let that be the jet fuel that gets that nonsense out of your life quick.

100%. Yeah. And that's what I've done. I've already paid off like two of them, and I know that they compile interest, and so I'm trying to compile my payments. So I took the smallest one, or essentially the smallest two, paid them off, and then I'm just attacking them.

What's your next biggest credit card that you have to pay off?

Next one is going to be $2,295.

Pay it off right now. Right now.

Okay.

By the end of this show, you should have that one knocked out, because you got $30-something, you got $30-what, $500? burning a hole in your pocket. Pay that next debt off. Now you just knocked one out. Now you only have a few, you have nine left, right?

For sure. For sure. I've got two houses right now. My one house is paid off that I live in, and then I have a rental that actually brings in some passive income.

You're passively going broke, too. Sell that house. Can you afford it?

Oh, yeah. Hands down. The payment's like $450 a month. I bought it as a foreclosure, and then I paid like $45,000 for it. It's a stick built on a little lot in a rural area, and I've had renters in it for five years now, six years.

And how much total debt do you have, Johnny? Not including that extra house.

Not including the house. I drove a well, and I got some personal loans, and I got those paid off. In fact, I just paid off $6,000 yesterday. Good. My monthly bills...

No, no, not monthly bills. Yeah, just in general, and all of it. Is it just the credit cards left? Was it $16,000, you said?

Yeah, that's it.

And that's it.

Okay. And then the $3,500 a month is what all of my bills are, my electric, all that.

Okay. And any savings?

Yeah, about $15,000.

$15,000 in savings?

Yeah. It could be more, but...

I would.

No, dude.

Johnny, Johnny.

I mean, honestly, what I would do is.

Everything all at once.

So yeah, if you.

I've been kind of shuffling it a little bit. Yeah.

I mean, but you have great progress, because I'm like, you're making great money. You're able... You're motivated to do stuff, which is great. I just think just tilting that motivation and going in one direction versus trying to do 18 different things is going to help you see more progress and feel more secure. So if you hold on the line, Austin's going to pick up, and we'll throw in a copy of Total Money Makeover, which is Dave's best-selling book, but it walks you through very simply the Baby Steps.

It's great. Well, yeah. And then you've got two paid-for houses. Yeah.

One that you're renting. I mean, you're going to be doing great. So just do them in a correct order. Honestly, Johnny, since the house is only that much, I would just almost throw it into a debt snowball.

I would. I would.

That's like what people pay for a car.

Exactly. It's awesome. Well, they pay more than that. And I think it's important to call out. You mentioned One Direction.

Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you for the life insurance and then paying you a crappy rate of return. If you don't have a cash value policy, you're going to lose out on your overpayment. Stop wasting your money and really focus on getting out of debt and growing your savings.

Welcome back. This is the Ramsey Show. I'm John Belloni, joined by Rachel Cruz, taking your calls, 888-825-5225.. Today's question comes from Ella in Nevada. Ella writes, My partner and I used a lot of your advice in our day-to-day lives, and I desperately need your advice.

Wait, wait, I was going to say, Dr. John Belloni, what do you think? I mean, it's like the, I've been learning, I don't know why, I'm probably into the game, attachment styles. He sounds like an avoidant.

Oh, big time.

Yeah.

It sounds, man, there's so much here.

I mean, he's 22.

If this is-.

Girlfriend's pregnant, you're in college. Yeah. He may not have any money. Your whole world has changed. And he feels like I can't.

Right? No question about it. And I will say this as a guy who did, my first kid was in my late, late 20s. We waited a long time. I did not fully understand the responsibility of what was coming our way when my wife got pregnant.

Yeah. Because, Ella, I mean, only what you can control. is you in this situation. And so I would be talking to your parents and saying, hey, once this baby comes, and cause I mean, they're still being financially supported by parents, am I off the payroll? And are you going to still be with, you know, what, how can I create a life for me and my baby?

And she doesn't, nobody, well, let me say it like this. I've had this conversation. I can't even tell you how many times with college students that, and then their, and their parents, and some parents would say, you went, did this, you're out of our life, which I think is a terrible choice. It's a terrible decision. I've never seen parents not regret that move.

You just have to create your life.

And which means, Ella, you've got to move forward as though you're a single mom of a new baby and with a boyfriend. And that's the plan you have to make for housing, for childcare. And that means you have to sit down with your parents as much as you want him to be involved. He's telling you, I'm not going to be involved. And that's heartbreaking.

Yeah. I would never stop a life choice, like getting married, even having a baby, of waiting on the finances to be in a good spot. Because the truth is that that finish line can keep moving. It will. And can it be less stressful if you have money saved and all the things and then you have a baby?

But again- And you can do it together.

Yes. That's the other thing.

And there's this, this, this big cultural lie that I've got to be perfect, and then they've got to be perfect. And then we come together. It's nonsense. You'll never be fully you in isolation, like that. So, man, get married, go, do your, do your thing.

Hi. So I have a question. I am following the baby steps, currently in baby step two, trying really hard to get the rest of my debt paid off. Most of the debt I have left is in my car. So I am looking to get rid of it and get something that costs a lot less, so I can get out of debt faster.

Sure. How much, how much do you owe on it? How much is left on it?

I owe about $18,400.

Okay. And how much is it worth?

I was just at the dealership the other day and talked to them. They said they would probably only take like nine or 10 for it.

Okay. And dealership is the more expensive route. or you're going to get less of, less of the money for that car at a dealership because they have to do a markup cause they have to turn around and sell it, inventory, all of that. So your best bet is through a private party. But how much do you make a year, Beth?

Just under 60,000.

Okay. You know what Beth, keep the car.

Keep the car paid off.

Yeah. Keep the car paid off. You're fine. Cause our rule of thumb is, if you can't pay it off in 18 months or if it's more than half of your annual income, that's when you have way too much car and it's going to be hard to get traction and progress. But with these numbers, I mean you'll, you'll be able to do it.

Okay. Um, I guess the other part of it, why I'm trying to get rid of it too, is because I actually have a Kia. I'm not sure if you know about the problems going on with them right now, um, but I can't get it insured. And for me to be able to get it insured, it's like way out of my price range is a ridiculous amount of money to try to get it insured. I'm at the point where it's time to renew my policy and I really am having trouble like trying to afford the insurance on it.

Okay. Yeah. All insurances is through the roof right now. So yeah, you do want an insurable car, but what about a Kia makes it uninsurable?

I've never heard that.

Uh, so they've been having a lot of issues lately. There's certain models. And I think mine is one of them that they were not made with some kind of like security system, like anti-theft, and they're really easy to steal. Um, I did talk to like some insurance companies and they did tell me like, yeah, my Kia is the problem. Like they're not insuring Kias, almost a lot of insurance companies.

And did Kia not have a recall? And to fix it?

I'm not sure.

Yeah. You can't have it. You can't have an uninsurable car on the road. Yeah. All cars have to be insured on the road.

And I think in a sense too, though, Beth, I think that, I don't know, you'll have to run up the numbers, but taking an $8,000 hit on a car just because of insurance doesn't sound right. Doesn't sound worth it to me. Um, so again, I would still shop around and, and again, it's, um, I mean, all insurance is up right now. Like we're seeing that across the board on all, in almost all States, um, it's a lot. And so, yeah, I would hate for you to take an $8,000 hit, though, on something that you're going to be able financially to pay off.

Um, well, right now it's like almost $500 a month for just my one car and just me as a driver.

And how much are they quoting you for the future?

It's about the same. It really hasn't, um, not gone up too much, like maybe a little more, but it's just, it's hard, because I had paid it in full, um, before. So now that it's like time to renew, I can't afford to pay it in full again, or like the monthly. So I didn't have the monthly insurance payment before, which I'm going to have now.

Call our friends at Zander and call a local, um, endorsed local provider in your area. I just got a message from my brother-in-law, a family member, this morning that said, he reached out to a local ELP for the first time and they knocked $300 off. It's a great crew.

Um, yeah, they shop all different companies, but it's not just one specific.

So yeah, check out Zander.

Hello there.

How are you doing?

I'm doing great, thanks.

Excellent. What's up?

So I have a question. My husband and I, we own two homes and our primary home is paid off. It has about $550,000 in equity, and then we have an investment property that we owe about $90,000 on, and that equity is around $700,000.. We have both of these homes in an irrevocable trust, naming our daughter as a sole beneficiary. It was set up that way originally because my husband's son was not in our lives at the time, but he has since come into our lives.

Yeah. How old is his son?

His son is 40 years old.

And why isn't his son able to afford to move where his son wants to move?

So they do have a home where they live. Where we live is very expensive. The average home is between $70,000 and $80,000..

So he can't afford to live there.

He can't afford to live there.

He can't afford to live here, yes. And that's why my husband is like, well, he can if we give him this house.

Yeah.

Dude, that doesn't sound good.

And what about your daughter?

And that's the other thing, too. She would be in agreement because she just wouldn't want to be confrontational. She'd be like, okay, that's fine if that's what you want to do. But of course she's going to be hurt if he's given a house that she originally thought she was going to inherit.

With $700,000 of equity? I'd be pissed.

I'm sorry. $700,000?. What?

Yes.

It sounds like-.

So we have a greenhouse on the property and my husband is wanting to create a CFA in the future. So his other thing was, is he said, oh, he'll be here to carry on my name and keep the green house-.

It sounds like a husband issue more than the son issue.

Dude, this is 100% a husband issue. Here's what it sounds like. It sounds like he is trying to buy back lost years and you can't do that.

Yeah, that's my feeling, too.

You can't do that. You're going to throw money- So emotional. You're going to throw money in the garbage pit and it's don't do it. Don't do it. He's going to compromise his relationship with his son.

Yeah, the will is one thing. Giving them just a house right now, when he can't afford to move there.

Yeah, that's just madness. Y'all can't afford it. He can't afford it. Nobody can afford this.

Because this is your retirement. Is that what you're saying? That you guys don't even have a lot like this, is it?

Well, we're right.

Our primary home is paid off and both homes have a lot of equity. We have some gold, some silver, a little bit of that. But yeah, we don't have anything else. When we retire, it will depend on our social security.

Yeah. So I think that's-.

Why would he give away three quarters of a million dollars of your financial future?

Because he's emotional.

To a 40-year-old.

I think he originally is like, we probably aren't ever going to sell this property because we're going to put the greenhouse on there and we're going to have a CSA. But we don't know what the future brings. We don't know if the CSA will be successful. We don't know if we'll ever need to live in that house and sell this house. There's a lot of unknowns.

Is your husband a gardener? Is he a gardener?

No, he's not a gardener. He just recently decided that he, with the way things are in the world and food security- Yeah, I would get a C.

That's so awesome. I would get a third party involved, Michelle. I would sit down with a good therapist or a counselor, and you guys need to hash it out. Because again, this is, when you get down to it, what John said, I'm like, it's not even like the house, isn't the problem. It's everything underneath.

Well, it's him watching a lot of YouTube, the way the world's going, we've got to start our garden now. Yeah. Hey, listen.

It might be me.

Just as in, I know it's Rachel, for sure. As a guy who lives on some acres outside of town and has gardens, we've got enough produce. We share with all of our neighbors. My wife's amazing. Yeah, that's great.

Right? That's what I tell my husband. We don't know that his son, he may come here, and that may be exciting for him.

He's just being, he's emotional, Michelle. He's emotional. There's so much baggage and so much wound. He's anxious.

He's anxious.

There's so much there. And I really would. He's not listening to you. No. His wife.

Not mine. Yours, Rachel.

And it's perfect. We agree on everything.

All the time. It's fine.

And I don't want to be the bad stepmom that didn't let the son come live here. Because I'm not a-.

The math.

Blame the math.

The math isn't mathing. As the Gen Zers say.

I hear. You're the planner. You're the wonderful, sturdy human being who's saying, hey, I don't want to give away three quarters of a million dollars to a 40-year-old man who has a job and a family of his own.

Right. And that we need to figure out. And if he wants to move here and he truly wants to move here, then we can certainly help facilitate that and figure out how to do that. But it can't be-.

Well, let me flip it in reverse. My parents live in a great house in Texas, in Central Texas, in a small town. They are talking about moving to Nashville. Their living experience is going to be radically different. And they know that.

in Texas. And it's like groceries and restaurants. It's gas.

Moving around. Real estate. All of it's different. So there's just a reality to it. And that's why Rachel, like what she's saying, is dead on.

Yes. And there's such a beautiful redemption part of this story. Right? And like. they've reconnected.

Yeah. It's amazing.

They want to be close to each other. Like in even proximity of living close together. All of it is so good, but just do it the right way. And throwing a house at the situation of someone that can't afford that part of the country or that part of the state, it's going to do more harm. And then, in the meantime, fracturing relationships, possibly with your daughter, with you, Michelle, because you're not fully on board.

This is the Ramsey Show. We'll be right back.

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This is the Ramsey Show. I'm John Deloney, joined by Rachel Cruz, 888-825-5225, taking your calls on money, life, relationships, parenting, all of it. Let's go out to Oklahoma City and talk to Brandy. Hey, Brandy, what's up?

Hi, John and Rachel. How are you?

Good. How are you?

Good. Okay. So I'm really nervous, but I just started Baby Step number two, and it's super, super overwhelming. But I did have a question regarding one specific debt, because I don't really know what to do with it or where I should place it.

All right. Go for it. What is it?

Okay. So it's a debt settlement company, and I am currently... I've paid two... It was for a credit card settlement. I've paid two off.

Is that your only debt? Are these four? No.

No. It is not my only debt. I have 110,000 total in debt.

Okay. And what are the last two? What types of debt are they?

One is like a small bill to, like AT&T, it's like $300, it's not very much. And then it's a credit card to Wells Fargo.

And how much is that one?

It's 4,272, and that has the one that has not been settled yet.

Okay. And those two, though, are the ones that are not settled, correct?

Right. They're, I guess, would be like still in negotiation.

Okay. Okay. And where are you guys at in that negotiation? Because I would hate for you to pay on it, and you guys settle for a less than amount, right, in writing that you're able to, that. that's the amount you actually paid for.

So the estimated settlement date is like September or October. Okay. I'm expected to graduate the program, is what they call it, in June of 2025. And if I were to continue to just make some $220 payment that I make a deposit into there every month, it would be like $3,000, something that I would still owe. So I have included the $4,200 into my total debts.

paying it. Well, the $300 one, I probably, I mean, that feels like it could just be settled, right? I'm like, you could just pay it off, and it would just be gone, right?

Yeah, I think so. I can probably get that one done. That one kind of popped up on me like a few months ago, and they kind of just took it over. So I could probably get that one taken care of. Okay.

Are you able to get out of this? What kind of program? When you said, I'm in a program until 2025..

Yes. Yes. So I started a debt settlement program in November of 2020, where, basically, I just, all of my credit card debt, I just gave to them, and then they're settling it for me.

Are you in a contract with them, or are you able to get out of this whole like thing, all of this?

So yeah, I'm not. actually, I don't actually know on that. I'm not sure how they work. I had gotten a divorce like four years ago, and I was kind of in a hard place, and I didn't have any other option. But now I understand that it's not a good thing, but it's already happened, so I can't really do anything.

Well, it's already happened. You can, though. I want you to, your path forward. is you taking back your autonomy, taking back your power in this, okay? It's your money, and it's your bills.

Yeah, and with their fees, yeah.

Yeah, plus their fees. So they've just burned your credit to the ground. They've burned your ability to get yourself out of this to the ground, and they've taken their fee money, and you're going to get done, and you're still going to owe $90,000 on all this. Yeah.

Well, are you.

Yeah. So I started with seven. I have paid three of those off since I've been in the program.

So you have four left.

I have two that I'm currently paying on that they've negotiated. I've made 22 of 24 payments on one, and 28 of 36 on the other.

So what I would do, Brandy, is I would call them and just say, hey, I went out. I went out, and what can I do? And you may get charged a penalty for that, whatever it may be, but I don't want these people... These people don't need to settle for you. Like, you have the debt.

Even the way they call it, you graduate, as though you're getting.

All of it. Okay. So, Brandy, walk me through, because you have a lot of debt, and I want to know the whole picture. Walk me through every piece of debt that you have.

Okay. So, between me and my husband, our total take-home pay is right at $100,000, it's like $99,000, like $800,000.. And then my total debt is $110,000, and $66,800 is student loans, and my student loan payment is the highest payment of anything I have, including my rent. So I'm trying to put that away, because that just overwhelms me, and I hate it.

Sure, sure. And then the other four debts that you have with this is... And those are what again?

And then I have $33,000 in auto loans between three vehicles. I have a vehicle, my husband has a vehicle, and then he has a child with a vehicle that he pays on.

Okay. How much are...

No, that's the.

Okay.

I owe $12,000 on mine, he owes $4,000 on his, and then the child's vehicle is like $18,000.

Oh my gosh. $5,000.. Oh my gosh. Yeah. How much could you sell that for?

Yeah. I'm not sure if I would be able to really, because that was his gift to his kids, so I don't really know if I want to try to... I would just rather pay that debt down. I don't know that I would rather...

I don't know if I want to get anything. So here's the thing. Okay. So I hear you. I hear you.

Oh, he's very on board. That is. one thing I have not talked to him about, is specifically that vehicle.

Okay.

So that's one conversation we have. And maybe that's on me for avoiding that, just because I'm conflict-averse. So maybe that's part of the problem, but I could have that conversation with him.

So you're conflict-aversion, maybe you are, but let this be the moment, right? A conflict-aversion, you've hired a company to deal with some of your debts, and it's going to cost you a lot of money and a lot of time and a lot of heartache. There's particular debts on the table in your home right now that you don't want to talk about. And you can create a story about how, hey, you know what? That's really not mine to talk about.

And talk to him that you're scared. I mean, Brandy, that you're stressed, right? Yeah. Come with him and just say, I want to do this together, and I just feel like it's an uphill battle. And it's not.

But bring it forward. Yeah, the money you make and the amount of debt you owe, you can do this. Y'all can do it. Hang on the line. We're going to send you Financial Peace University Total Money Makeover as our gift.

Hey, how's it going, guys? Thanks for taking my call.

You bet, man. We're partying. What's up?

So, a little bit newer to The Dave Ramsey Show, and I've been listening to the podcast the last couple days. So, just a lot has kind of come out.

Hey, welcome to the cult, my friend. We're glad you're here. We're glad you're here.

Thank you.

So, what's up?

So, I have about $90,000 in student loan debt. Just a little bit of out-of-state tuition, being irresponsible. And I'm currently getting my MBA right now, too, and I'm a little more than halfway through. I also have a car loan that has about $12,000 left on it, and the value is about $16,000 or so. I don't have any credit cards anymore.

Yes.

So, which one should I go after?

What are you doing? Yeah.

And then I do have a little….

Yeah. What do you do for work?

Consulting. Management consulting.

Okay. How much are you making?

Base is 84.

Okay.

What are you in school for?

Getting my MBA.

Okay. And you have two years left of that, correct?

Next spring. So, a little less than a year.

Okay, good. Okay. And you're able to cash flow the rest of that? Like, as you look out, you won't be taking on more debt for that?

Yeah. If I save the 10%, it'll cover about half of that, so I can pull out of my emergency fund and do it. Yeah. Just looking at the baby steps, I have….

Yeah. So, Rachel's going to walk you through this, brother, but here's what I want to say. Yeah. You are a driven, smart guy. And so, we are totally Team Austin.

Yeah.

Okay. So, Rachel's going to outline it for you, but you're going to have to make some short-term sacrifices to get where you want to get. And when you get there, it's going to be much better upon arrival.

Okay.

You have one quick wrinkle to add to it.

Okay.

My fiancee inherited some money, and she offered to pay off my car. No.

No.

Don't do that.

Okay. Okay. Okay. Don't do that.

Not yet. Not yet.

If you take her to the courthouse this weekend and get married, then it's y'all's money. But until then, don't take her money. Don't take one penny of it.

Okay. All right. Yeah. Got it.

I didn't want to do that anyway.

Perfect. So, you owe $12,000 on the car, but it's worth $16,000..

Sell it tomorrow.

Okay. Here's what I would do, Austin, if I woke up in your shoes. Because that's always kind of how we frame this scenario. If I woke up in your shoes tomorrow, I would take maybe $2,000 to $3,000 out of the emergency funds. And that leaves me with $15,000..

Yeah. Yeah. We have a date for next year, next year, March.

Oh, awesome.

Okay. So, right, before you graduate, you'll be married? Yes. And how much does she make a year?

It's a little variable. She left her corporate job. She is doing life coaching. So, the low end this year will be $50,000.. The high end will be like $150,000..

But she hasn't made $150,000, though yet, right? She's made $50,000..

No.

Okay.

Yeah.

But the hope is that, yeah, that it's a little bit more than that. Okay. So, you guys will be on the conservative end because you said your base was $84,000.. That's a base. So, I'm like, once you graduate everything, I mean, y'all could be, I mean, close to $200,000 together.

You're debt-free in 18 months.

Yeah. Will she have any debt coming into the marriage?

No. She's had her car for 17 years and never had a credit card.

Okay. Wow.

All right. So, get out of debt and get her a car in 18 months. Okay?

Okay.

But you see, the order is important, right? Because the debt that's just kind of like just biting your toes on. the car is then leaning, and you're going to make a choice about, well, then, I got to pay this. And so, then I'm going to go ahead and take out another student loan just for MBA, but then I'm going to pay the principal over here. And you're just zigzagging back and forth.

Yeah. Get north and south.

That's right. Go downhill. Go downhill. So, let's knock the car out. Done.

How old are you guys? Okay.

I'm 30. She's 33. Awesome. Okay.

Be debt free at 33.

Yeah. I'm like, you're going to have two cars. You'll, by that point, replace cars. Be debt free. Killing it when it comes to your jobs and your careers.

This is the Ramsey Show, 888-825-5225.

Yes. Or 30th?

30th, 20th.

25th.

For you millennials out there, the book was written before you were born, and it still works.

Not millennials. Gen Z.

Whatever. You youngsters.

Millennials are in their 30s.

All right. Good job, millennials. Hey, it's for you. It's for you. The book is getting a complete overhaul, but the principles are staying the same.

Hey, thanks for taking my call. I was calling. My husband is obsessed, going debt-free, but he won't take one step at a time. How do I get him to take one step at a time?

Oh, my gosh. What do you mean? What does that mean? What's happening?

We have about $65,000 in consumer debt, and he just thinks it's possible for us to get it done in just a few months.

Is it?

It's just not realistic for us, no.

Have you all sat down and made, like, a plan on paper?

We have. We have. We sat down. We started doing budget, making some cuts that we needed to do, and the $65,000 isn't even what we make half a year.

So where does he get these numbers from?

He just sees all this debt, and they start running in his mind. They're flying at him.

Okay. So what is he doing, though, like, in reality? Is he, like, selling stuff? And you're like, whoa, that's our couch. Don't sell our couch.

Yeah. So that's kind of the thing. He's willing to sell it all. He's willing for us to sleep on an air mattress at this point.

Yeah.

Yeah. But we have been selling things. He picked up a side job. I mean, we're doing the work towards it, but we haven't even done step one. He skipped.

Oh, my gosh. I so appreciate his enthusiasm. Okay. So how much do you guys make a year, Keely?

About $115,000.

Okay. And you have $65,000, is that what you said, in debt?

In consumer debt, yep.

In consumer debt. Okay, $65,000.. And so you all have no money saved right now, like, not even $1,000..

We have right at $700,000.

Okay. So, yes, he needs to bump that up to $1,000.. Yep. And so, again, being specific on your end, because you're calling us saying he's obsessed with it. Is it because you never see him?

That's all he talks about. He's not sleeping at night. The conversations, we can't have a conversation about our kids, even in the evenings, without him being like, well, there's money signs already flying out the window.

All right. So here's what I think is important. Is he a guy that gets this way about a thing and it goes away in three months, or is this a new husband for you?

This is a total new husband.

Okay. So he didn't, like, when Little League was going to start the first year, he's like, we're going to crush it. He's not that guy?

No. I mean, he's been the type to always check his bank account to see where he's standing with his money, but never to this extent. We're checking it a thousand times a day.

Okay.

Okay. So he's just, his body flipped a switch and it's game on, but it's like atomic game on. It is. Yes. I'm afraid he's going to start running and he's going to be that guy who picks up the fumble and runs the wrong way.

Yeah. So I think it's just, it's a total mindset shift in your household and there is a level of momentum that he's actually probably feeling with his money for the first time ever. Yeah. And I don't know, this is so stereotypical, but the way we've usually like talked when it comes to men and women, with money for women, a lot of people, and this has been through research that our number one fear is security. And if the money is not good, I don't feel safe.

Safety, but also shame.

Yes.

I put my family in this hole and I'm getting us out today.

Yeah. So there's like a motivator that he has, Keely that you may not have. Right. There's something in him that suddenly the light has turned on and he sees a way out and it is like, he's not stopping. So what I would want you guys to do is to be in agreement, that you may, Keely, for a hot second, just smile and nod as he talks about the debt all the time and the budget all the time.

And I'll tell you, I am somebody who gets overly zealous about a thing. Okay. And I'm going to tell you, here's how my wife has kept us married.

Since December.

Okay. So here's what I would love you to do. I would love you to take, set up and say, honey,

Okay.

And if you can communicate to him in whatever language y'all use, not an accusatory, but in the same way, he feels panicky and shameful about the whole, he quote, unquote, Doug for his family that he's so insane to get out of. I want you to communicate that same fear that you're losing your husband. And we're going to make a plan. We're going to make a budget. We're going to stick to it.

We do not yet.

Okay. It's going to be my gift to you. I'm going to give you the premium version for a year. Okay. Thank you.

or if there's a, if there's a raise at work and a bonus, we shake your hand. That's going to the debt. Yeah.

Like. we just did that.

Both of us took that step.

Awesome. But the kids still get to play soccer this summer and the kids still get to go to church camp, et cetera. Okay. Just build it into the budget. Okay.

Perfect. Yes. All right.

He's lucky to have you. He's lucky to have you. We'll be right back.

Thank you.

Welcome back to the Ramsey show. 888-825-5225.. Taking your calls on money, life, work, all of it. Let's go out to Austin, Texas to the 512 and talk to Jacob. Hey, Jacob, what's up?

Hey guys. How are y'all today?

Fantastic brother. What's up?

Well, I've got a few questions for you and I hope you could provide some clarity here. Um, I've got a few, uh, brokerage accounts. Uh, one of which being a crypto account, um, totaling to about $50,000.. Um, the question is, should I allocate that towards a $48,000 vehicle loan as well as chip away at $200,000 in a student month?

Woo. 200,000.. What was your degree in? Yes.

Uh, that was my wife's anesthesia degree is the vast majority of that.

Okay. Okay.

And I'm not going to tell you to go get a, get, get student loans, but that's not, that's pretty good.

What does she make? What does she make in a year?

Uh, she makes 209 and I make about a hundred. So we're just shy of 13..

Okay. Well, that's the good, that's the good news of all of this.

What kind of car is this?

Uh, it is a Chevy taco.

Okay.

Awesome. And is that the debt? Just that? And student loans.

Uh, in addition would be a mortgage. Okay. Just a home in October.

Okay. How much do you guys owe on that?

Uh, three 20.

Okay. Um,

yes.

So I would, when you cash that out, there may be some taxes implications there, but, um, but the rest, yeah, I would throw, pay that off. Exactly. And then I would just, yeah, lower lifestyle and yeah, get this 200.. The student loans knocked out. I mean, if you guys could live on a hundred thousand, this could be gone in 12 months.

Sure. Uh, and we've been, we have another vehicle as well that we actually just paid off, uh, yesterday.

Oh, congrats. Congrats. That's awesome.

Can I tell you? if it was me, I'd probably sell the Tahoe. What does the Tahoe? It's a, it's an amazing car. I love them.

Uh, it's certainly a possibility. Uh, we purchased it about three months ago.

Okay. Um, so what's it worth now?

Our family has grown, uh, probably, I would have to assume, roughly the same. Uh, we don't drive terribly, uh, you know, much. Um, so I would assume, you know, 50 or so. so we're,

how, how big is your family?

Uh, we just had our second daughter, uh, a few months ago.

So my parents raised all three of us in a Camry hashtag, just saying, but I know the world's different now, but, um,

Okay. Okay. So, just so I'm clear, he would advise to sell everything in crypto, uh, as well as the brokerage account. There's also a $10,000 Roth IRA. that, uh,

don't touch that.

Yeah. Leave that one.

Yeah. Leave that one. Yeah. Yeah. Yeah.

account, leave it alone. Yeah. But I, if I'm in my house, if I had $50,000 in a brokerage account with crypto in it, I would, that would be gone before the day's over.

Okay.

And John would sell the car.

I would sell the car.

I honestly am on the fence with it. I'll, I'll just be a little bit. It's not,

it's not, it has nothing to do with your salary, the car income ratio.

It's just getting out of debt as quick as possible.

I would be more haunted by the debt than I would be by a smaller car.

Yep. Sure. And then would you still advise, uh, maintaining, if I'm not mistaken, baby step two of $1,000 mercantry fund. Uh, right now we have $5,000 in that savings account. So we whittle that down another four to get to the one.

Yes. Yep. And just throw that anything extra you guys have at that 200 and let that dude,

I know it will haunt you. It'll drive you. It'll drive you crazy. Let that be the gas, um, the dumps on the fire that y'all just say, honey, can we do this in one, one calendar year?

Yeah. And realistically, Jacob, if that's the route you guys take, you'll take that 4,000 and put it towards, towards another car, right? Like, cause, you'll be selling the Tahoe. If you sell the Tahoe, um, then, Oh yeah. But then you have the 50,000 in the, in the brokerage account that you can take some.

And then I also have another, you know, paid for vehicle. So I don't know if that would, you know, have any merit in this conversation.

So you have a third car or just two?

No,

sir. The one that you just paid off. Yeah. That's fine. I would just keep it.

Keep that car. Yeah. Unless, unless it's a $75,000 car. and you think, well, man, we could sell it by two Camrys and take that 50 grand. Now we're, we're dealing with 150 grand in student loans instead of 200,000..