Freeing Up Your Income From Debt Will Build You Wealth

Tyler is with us in Topeka, Kansas. Hey, Tyler, welcome to the Ramsey Show.

Hi Dave, hi Jayde. Thanks for taking my call. Sure, what's up?

My wife and I, along with our two boys, are ready to purchase a home financially.

Emotionally, we're both at different places and having a hard time coming to an agreement on what to spend and even whether now is the right time. Okay. What's the problem?

We both want to move into a home, but my wife really enjoys the security of having a large amount of money in the bank.

Okay. So, what's it going to cost you? What are you looking to spend? How much do you have saved? Tell me more.

We've got up to $80,000 for a down payment.

Buying probably no more than a $300,000 home. Okay. And is that $80,000 just the down payment, or do you have more money that you have set aside for your three to six months?

Yes. What's yes? mean, which is you have an emergency fund in addition to the ADK? That's correct. Okay, cool.

And what's your household income?

$140,000 to $160,000, depending on commissions and bonuses. Okay. There's no reason to not buy. I don't understand.

No hesitation whatsoever. This is the time to do it. Yesterday. Y'all, go find your house. Every guideline you gave me fits and makes good common sense.

It fits everything we're talking about.

The only trade-off is she wants to keep $80,000 in the bank and watch it go down in value while the house goes up in value.

Okay. So you're trading a $300,000 house for what is now a $250,000 house, because in 20 minutes that $250,000 is going to be $300,000, while you sit around and watch your cash.

Okay. Yeah, this is not the time to wait. You understand what I'm saying? The $80,000 is still going to be $80,000 a year from now. The $300,000 is going to be $350,000 a year from now.

Okay. I got you. And then it's going to be $400,000.. And your $80,000 is still going to be $80,000.. You probably need to sit down and explain that with the right attitude.

Not my tone of voice, but Jade or Rachel's tone of voice. I don't know about mine. Maybe Rachel's. Yeah. Rachel's always the friendly one.

She's the nice personality. Yeah, it takes great joy in that. But anyway, yeah, I think I would start with some of that. I understand how you feel. But 10 years from today, waiting is not going to be our best plan.

Would you agree? And say something along those lines and say, 10 years from today, the house that we can buy for $300,000 we won't be able to buy anymore. And the $80,000 will not have gone up. And so the longer we wait, the less house we're going to be able to buy. How old are you guys?

28.

. Listen, I remember when me and my husband bought our first house, everything was in line, and I still felt just a little bit trigger shy. It's a big purchase. It's the biggest purchase you're ever going to make. And so there is that apprehension there, but let her listen to this call, and the experts are telling you that you're ready.

Yeah, you're in good shape. Listen, dude, if you were a broke guy trying to buy a house, and your wife was trying to talk you out of it, I'd call you stupid and tell you not to do it right here on the air. You know that. You've heard me do it. Yeah.

I mean, because I love you, and I want you to win, right? And so I'm, you know, I would love to do it. That's it. Yeah. I'm kidding, but not much.

But the, yeah, so, yeah, seriously, you guys are in really good shape. You've done a good job. Waiting is going to cost you. And the only reason you're waiting now is fear, and in this case it's false evidence appearing real. It's just.

you're doing something big you've never done before, and, like Jade said, that is scary. It's valid to be scared, but it's not valid to let the fear rule you.

Okay. Fair enough. Well, I appreciate everything you guys have done. You've really helped us out a lot. Hey, Tyler, how old are you, too?

28.

. All right, cool. You fit everything, man, everything. you're lining up. I mean, you didn't call me up when you're 19 years old and you have no money, and your broke friend at the happy hour, drinking three beers with you, told you to buy a house.

You're not that guy. I mean, you actually have a clue. Well, then, there's, like the perception, right? Your perception really denotes what your behavior is going to be, and I think right now so many perceive that it's impossible to buy a house in this market. You'll never be able to do it, and they are actually doing it.

Yeah, everybody's telling them that. All their friends are going, no one can do it.

That's right. Paul's in Chattanooga. Hey, Paul, welcome to The Ramsey Show. Thank you, Dave. I have a great situation to be in.

First off, thank you for taking my call, and I appreciate all the information and education that you all give to everybody on finances, but my question is we're looking to open a Roth account. I have that available through my employer retirement. I have a 401K with a Roth option. My question is, after we've looked at all of our finances, after we've become debt-free, house and all, trying to allocate money, I think we've got enough to fully fund one Roth, but to accomplish all of our other goals, I don't think we can fully fund two. So the question is, over time, would it grow more if we fully funded one Roth account with $7,000 a year?

Not a dime. Or two Roth accounts? $7,000 is $7,000.. If it's in seven accounts or one account, it's still $7,000.. And if all seven accounts are growing at the same rate, the seven $1,000 accounts will grow to the exact same total as the single $7,000 account mathematically.

So you would recommend me and my wife both open one? Doesn't matter. Doesn't matter? Doesn't matter. If you both want one and partially fund it, that's fine.

I do want to ask you, though, because you started out by saying you have the Roth 401K. Are you saying that you're fully funding that, which is around $22,500, and then you're moving over to a Roth IRA? I just want to make sure that you're clear on what you've got and what you're funding. No, we're trying to establish the 15% total. Okay.

I thought you said the house was paid for. Yes, the house is paid for. Well, the 15% total doesn't matter anymore. You max out everything if you can. Keep the government's hands off of it.

If you can hit your other goals with the house paid for, I'd max out the work Roth, max out two individual Roths, keep the government's hands off the money. When you're in Baby Step 7, the 15% doesn't apply because you're debt-free. Now we're stacking cash. But if you've got some other goals and you want to keep retirement down at 15% temporarily, that's okay, too. 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. 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 going to pay my bills? How am I going to eat next week?

Yeah, in the middle of all that grief. It's terrible. So 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. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much, because Zander shops among a gazillion different companies.

It doesn't cost much. You just have to admit that someday you're not going to be here. You've got to say it out loud, and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. It costs no stinkin' pizza. To get a free quote, call 800-356-4282..

That's 800-356-4282, or go to zander.

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So some of y'all may not know Jade and Sam's story. They were in the cruise line business for years and somewhat still are, booking talent onto the cruise ships, right? Sam's business. And they were actually talent themselves at one point on some of the cruise ships. So you've got to have mixed emotions about going on a Ramsey cruise.

You're like the most experienced cruiser. I mean, I've been on a bunch of cruises, but nowhere near as many as you have. I mean, I'm excited. It's the best vacation you can take. Wow.

Okay. Well, and you'll be working, but not working. I'll be working. You'll be working the same way. That's right.

I'll be on the stage, but in a different capacity. Let's put it like that. And it's a completely different situation. That's right. Than being the entertainment.

Because we're just, we're entertaining, but we're not the entertainment. So the Ramsey cruise is coming up in March. It is not yet sold out, but it's approaching a sellout. If you want to come, it's the live, like no one else cruise. You need to be on Baby Step 4 or beyond.

We'll check your little Baby Steps card and make sure you are, because we don't want you going on vacation with us and not getting out of debt. That would be a wee bit hypocritical when we tell you not to go on vacation while you're doing this. So anyway, up to Baby Step 4, 4 and beyond. Live like no one else. cruise.

Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas, Dave and Sharon Ramsey, all the Ramsey personalities, plus Stephen Curtis Chapman, plus Manit Shohan from the Food Channel, plus Dina Carter, fabulous country music star. Remember Strawberry Wine? Yeah. Oh, man.

What a great song. Yeah. Anyway, and just a lot of other folks on the cruise with us that are unbelievable talent, and you're going to have an absolute blast. We're going to be with you the entire week. It's a seven-day, very high-end cruise.

It's not one of the cheapies. This is not Walmart on the seas. This is Holland America, the good stuff. I vouch for that. And yeah, I've been on Holland America a couple of times, and this is one of their newer ships.

It's excellent. I've also been on the cheap stuff, and this is not that. Yeah, there's a difference. I'm just saying you do get what you pay for on the high seas, so there you go. Well, speaking about paying, Dave, a lot of people are like, do I have to have, however much it is up front?

But the good news is you can book it with just the deposit. $600 deposit. Yeah. March 22nd through the 29th, 2025, and we had one sold out. It was supposed to sail in March of 2020, when the only thing on the high seas was a virus, and so we weren't able to go.

They shut the whole thing down. I mean, they shut the ocean down. They pulled the plug on it. It was actually dry sand. Go ahead and say it, Dave.

I know you want to say Fauci pandemic. The Fauci pandemic caused all of it. But anyway, so now, five years later, we'll be on the high seas for real and going to be amazing. Ramseysolutions.com slash cruise. We'd love to have you join us.

There's just a few cabins left, so you need to get your reservations done now, people. Lindsey's in Wichita, Kansas. Hi, Lindsey. How are you? Hi, I'm good.

How are you guys? Better than we deserve. What's up?

All right. So my question is, at what point do you prioritize paying off the highest interest versus the lowest balance snowball method? You mean snowball versus avalanche? Mm-hmm. Never.

You always do the debt. snowball. The avalanche, is mathematically incorrect. Let me tell you why. Okay.

Because it sounds like it's mathematically correct. You understand? Paying off the highest interest rate first sounds like it's mathematically correct. Should get you out of debt faster, right?

Hello? Hi. Hello? Sorry. I'm still there.

Okay. Is that right? Is that why you're considering it?

Kind of. Yeah, I'm looking at these interest rates, and the highest interest rate is about seven times our lowest interest rate. Yeah. And how much debt do you have? We're right, about $23,000..

$1,000.

. Mm-hmm. And your household income is what?

Right under $100,000.

. So the interest rate does not matter. You're going to be out of debt in one year. So the actual dollars paid in interest will be irrelevant.

Okay. So, I mean, 10% on $23,000 is $2,000 in a year. That's the most swing you could have in this whole thing, and you're not even going to have that much swing. Your whole swing in between the –. if you ran out the numbers on two probabilities, you would find that the actual math is probably around $1,200 that we're having this conversation over.

You don't have a $1,200 problem. You have a $23,000 problem and a lifestyle problem and a process problem, and you're spending money. you don't have to impress people you don't like, and you've decided to stop because you're smart. Way to go.

Thank you. That's your problem. The problem is your mirror. The person in your mirror is your problem. It's not an interest rate problem.

That's thing number one. Okay, let me walk you through this for a second, because this is something I just, in the last two years, got my head around. I knew the debt snowball method was working better than the avalanche method, because we help literally millions of people get out of debt using it, and the avalanche method does not have the same success level. Avalanche method, for those of you who don't know, is you list your debt's highest interest rate to smallest interest rate, thereby paying off the highest interest rate debt first, regardless of its size, and the debt snowball method is you pay off the smallest debt to largest debt. so you have some immediate success, because you knock out the little one really fast, you get a little more excited, you knock out the next one a little faster, a little faster, a little faster, a little faster, and every time you knock off another one, your hope increases.

Here's what we have actually discovered, Lindsay. The math is incomplete when you only consider what we've talked about so far. If you're actually doing a real business case on this, you would also enter into the math equation, the probability of actually completing the plan,

finishing, and becoming debt-free. If you put probability to it, the number of people that complete the debt snowball plan is vastly higher because they get excited and hopeful because they're knocking out the little ones. It's vastly higher than the probability of people who complete the supposedly intellectual version, highest interest rate to lower interest rate, but the probability is lower of completion. When you enter in the math of probability of completion, if you're doing a probability and statistics equation, you would never use the avalanche plan because almost no one actually finishes it, because they lose hope. They get stuck in a large debt, the high interest rate, and they're just peddling and peddling and getting nowhere, and they lose hope, and 30 days in they quit instead of getting fired up and wired up and plowing on through.

That's the difference. You always use this. By the way, Northwestern University actually did a research study on it and found that the debt snowball outperforms on average because of probability of completion, the avalanche method. They actually then ended up printing an article in Time Magazine that said Dave Ramsey's right. after all.

Who knew? Well, it makes sense. you're shortening that feedback loop, so you're getting a good result, and every time you get that good result, you get that hit of dopamine. that's like, feel good, yes, I did something. So, yeah, you want to keep going.

You need some wins. Yeah, you do. Everybody needs some wins. If you're a brand new salesman, the first thing you need to do is go, make a quick sale. Anything, yeah.

Just even if it's a little one. You need the success, the confidence builder, the hope deferred makes the heart sick. Hopelessness makes the heart sick. The opposite of that is. when desire comes, it is the tree of life.

So when you get that hope because you pay off that little one, you go, whoa, this is weird. I never paid off a debt before in my life. There's another one. Knock down another one. Look at that.

And there's another one. I got another one. And you start getting more and more and more pumped because you're getting through it, and your likelihood, your probability of completion, enters into it, and when you actually convert that to a math formula, the debt snowball is far superior, because in the real world it's far superior, and so it shows up in the math. Yeah, that's right. The worst thing in the world is when you've been doing a workout plan that doesn't work and you stand on the scale and it never moves.

Oh, God. It's like, I give up. Cut the tape. I'm done. I'm done.

But if you see it, even just a couple of ounces, you're like, okay, it's working, and you keep doing the plan, and before you know it, you lost five pounds. Well, yeah, and it's back away from the donuts. for me. I got to, you know, no donuts, Dave. Son, it's a donut problem, son.

The guy in the mirror, right? Every time. It's so sad that most of our problems originate with the person in our mirror. Yeah. That's the bad news.

The good news is most of your solutions originate with the person in the mirror and not someone in the White House. Yeah. Thank you, Jesus. Or broccoli could just be round and donut flavored. That could also.

Put a little hole in it. A little hole in the middle, but it's still broccoli. That would solve everything. It would have to be donut. Oh, this is just.

These shouldn't even be in the same sentence, Jay. I know. This is the Ramsey Show.

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Jade Washall, Ramsey, personality, number one best-selling author, is my co-host today. Thank you for joining us, America. This is the Ramsey Show. The phone number is 888-825-5225.. Eric's in Buffalo, New York.

Hi, Eric. How are you? Better than I deserve, Dave. Long-time listener, great fan of you, and Jade. Got you on Spotify and Facebook and all that.

Appreciate you for having me. Thank you.

So I was in a train accident about a year and three months ago. Got caught between a couple trains and finally just settled that just a little over a couple weeks ago. After the lawyers took, everything, ended with about like $275,000.. And my birthday is coming up on 7-Eleven and just decided to pay off my house and my car. And that leaves me with just around $200,000..

I tied $150,000 up in a CD at $4.

25 because I really wasn't sure what to do and I don't really know if I trust the market that much right now. So I have about $50,000 left over. And I'm just looking for, like how to be a good steward of the rest. And then, once like December 24th comes up and that CD's matured, what to put it in to gain the most potential on the money. How are you?

You? okay? Yeah, I am actually finished with all my medical. And I am back to almost everyday normal living, playing volleyball again. Good.

And pickleball and all that. So, yeah, my left hip got fractured. I needed surgery. And yeah, so I recovered from December 12th hip surgery. What is that?

About a little more than six months now. But everything's great. Talked to a therapist for a good matter of about nine months. And I feel like I'm back in some of the best shape of my life.

That's great. It's not everyday. you hear somebody say, I got caught between a couple of trains. Yeah, usually people don't walk away from that. So that's pretty cool, man.

That's neat. Yeah, no, I'm truly blessed. Okay, cool. Well, it sounds like you've done the stuff we would teach you to do with the money. You've been very careful, thoughtful.

You've gotten yourself out of debt. You've got a plan.

So what is it that you actually need us to answer? Because it sounds like you've done most of the stuff. So I guess I just threw it in a seedy just because I'm not really sure what to do with it. And when I was in my 20s, I had a great paying job and went and borrowed money to go on trips. I'm actually going to El Salvador tomorrow for like a birthday trip.

Because I was actually supposed to go to El Salvador right after my train accident. I called them on the hospital bed and they allowed me to cancel the non-refundable ticket and they refunded me. So it's kind of like full circle. I went on a business trip a few years ago. And so I'm going to revisit some friends.

So I guess the whole point of the question is,

where can I earn the most potential on my money? if I don't really trust the stock market right now? It's at all-time highs. Obviously, you're probably following that. Well, listen, I think that if you don't know what to do with your money and if you're unsure about how to invest it, yeah, sticking it in a high-yield savings probably would have been my move.

But I wouldn't want it to stay there. It's a lot of money, $150,000.. I'd love if you would put in the time and kind of learn a little bit more about this with a smart investor pro and kind of get that confidence before you start investing it. Because I do think the best place for this money is invested. Let's say, the $50,000 that you have set aside is your three to six months of expenses.

And then, once you learn and feel comfortable enough to invest this, you do that with the $150,000.

. That's what I would do. Now, what happens in the future? Do you start working again?

I'm a self-employed. I just drive for Lyft because I don't see any value in going and finding a W-2 job that pays me $17, $19 an hour and then takes away taxes, where I make $25, $30 an hour driving Lyft. And then I just write off all my miles from my car. But you still pay taxes? No.

No, actually, Jade, I've driven rideshare for the past seven years and I've never paid a dime in taxes. It means you're not making any money, then. Just because of all the write-offs. Yeah, the write-offs aren't fake, they're real. Your car's going down in value more than you're making, so that's why you're not making any taxes.

So the investing question works like this. How old are you? I'll be 35 on 7-Eleven. Okay. Have a great trip, by the way.

Thank you. You've been looking forward to it a long time.

The way I look at investing is. I've been doing this on the air now for over 30 years. And every single year for 30 years, people have told me that they're not going to buy a house because houses aren't going to keep going up in value. They're going to tank and there's going to be a bubble. Every single year, people have told me they're not going to invest in mutual funds because look how high they are.

They can't maintain that. And every year, both have gone up. Every decade, both have gone up. Every five-year period, both house prices and the stock market has gone up. So I completely am 100% trusting that both of those are going to keep going up long term.

Now, I don't know about tomorrow or this week or by November 3rd. I couldn't tell you anything about that. But over the next decade, I'm 63.. I'm 100% sure I'm going to make money in the stock market going up by being in mutual funds. And I'm going to make money by owning real estate, and real estate goes up in the next decade.

I'm 100% sure of that. And there's very few things I'm 100% sure of. I've never seen a time in modern American history that you can look back that both of those things in a decade did not go up. Now, can you trust the stock market between now and Christmas? Oh, crap, no.

I mean, there's crazy people running to be in the White House. But when you look at the graphs, I mean, you can go back and look at the graphs as far back as you want. And you're going to watch them go up.

I'm with Jade. If I were in your shoes, I think, Eric, you need to learn some more about it, because you're afraid of it, because you're watching the news. And that's where you're getting your information. Bad place to get information, by the way, about reality. And so, you know, if you want to learn about everything that's wrong with the world, you can find that out on Fox and CNN.

They'll tell you. But if you want to actually learn what the market has done, you need to sit down with somebody and look at the actual numbers and say, all right. In 1982, here's what it was. When I was 22.. And I'm really glad.

I bought my first mutual fund in 1983.

. Can you imagine? Can you even imagine how sweet that little mutual fund is today? Oh, my goodness. I know.

Listen, I sit next to you, so.

It's a sweet baby. I like it. So you, just if you're thinking long term and you study the actual data, it'll help your fear dissipate. Because this is a case of not knowing, and the fear comes from not knowing. Some things, when you learn more about them, you should become more fearful.

That's right. Oh, yeah. Healthy. And more careful and more wise in the handling of the thing, whatever it is. Right.

And so fear is a good thing in that sense. But fear that creates paralysis based on lack of knowledge is never a good thing. So learn, learn, learn, learn, learn, learn, learn. And the more you know, the less you're going to want to do it, or the more you're going to want to do it. Facts are your friends.

Exactly. Dr. John Deloney. He's right about that, though. Yes.

There's so many things I can think of, like the guy calling a little bit earlier about buying his first house, his wife's afraid. Yeah. Facts are your friends. Yeah, it's usually a lack of clear knowledge on it. It's kind of a circulation of what you've heard people say, what you think might be going on, what happened to your friend a couple of years ago.

It's like all those things kind of correlate together to inform your. Yeah, and, you know, we're at a disadvantage in our culture today because we have so much bad information at our fingertips. And bad influences at our fingertips. It used to be the news media was actually, you know, in the 60s or 70s, they were actually credible and you could trust somewhat what they were saying. And you weren't bombarded every minute with this magic wand in your hand by negativity.

Yeah. And so it was somebody that's 14 years old, that lives in their mother's basement, that has an opinion on TikTok. Oh, my gosh. And they're called an influencer. God help us.

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Some of those platforms have a share button, sharing the show with friends, that's a big deal. Jade was just telling me about a movie at the break that I need to go see. See, that's how you tell people, she said, and I'm not going to tell you about the ending. So there we go. That means I've got to go, see it to get, you know, there it is.

Now the difference is, your friends will tell you about the ending on this show. Spread the word. Tell people about this. Click a link and send a link around and tell them something fun and funny, or something you learned that changed your way of looking at money. Whatever, however, we can help you, that's what we want to do, and help us spread the word.

with that. And those five-star reviews, they help us with the algorithm as well, folks. Thank you very much. And we know you're doing that because our numbers are way up. Thank you.

Wow. Justin is in Omaha, Nebraska. Hi, Justin, how are you? Good, how are you? Better than I deserve.

What's up?

My wife and I have about 145,000 in student debt, and she kind of feels like it's her fault. So I'm trying to just help her, I guess, not really cope, but just figure out how to help her better understand and how to attack it from there. Well, was most of it hers when you got married? All of it. Well, then it would be her fault.

Yeah. That would be accurate, but we don't have to be shamed about it or guilty about it. It's just like, you know, apparently you thought she was worth it, so there we go.

Listen, when I got married, my husband had $200,000 of student loan debt. And it just kind of ballooned even more because of interest. Was he worth it? Yeah, he was. He was.

Sam's definitely worth it. And more, Sam. But I mean, the point of me saying that is that feeling is very real. It feels like a weight. It feels like the weight of the world is on you, and you feel bad about it.

The best thing that you can do, and this is just from personal experience, the best thing that you can do is really lock arms with her and never refer to it in her presence as her debt again. Our debt. It's ours. I'm with you. And I've been doing my best to not do that, too.

Yeah. And I mean, honestly, over time, that helps so much. And then, you know, coming up with a plan to attack. it, is this the only debt, or do you guys have more?

We have about $25,000 on her car. Mine is paid for. Okay. Did you guys just get married?

We've been married a little over two years. What's your household income?

About $85,000 after tax. What does she do?

She's a speech pathologist. Oh, that's good. What do you do?

I'm in golf. Okay. As in a professional golfer?

No, the other side. I'm a class A PGA member, but I'm not a professional golfer. I just help other people get better at golf. Oh, so you're an instructor. Okay.

Yeah. Okay, good. And what do you make?

I make about $42,000.

. And she's only making $42,000 as a speech pathologist?

Yeah, so right after she got out of graduate school, it's a little lower, and then, once she gets her C's, it goes up. Oh, when will she pass that?

Next couple of months here. Okay. And what will her income go then to then?

She'll be at about $65,000. after that. Still sounds low. Hmm. Okay.

I was actually thinking a speech pathologist generally made six figures, but what do I know? No, no. Maybe not. in Omaha. I was going to say maybe not Nebraska.

Okay,

so you guys are going to end up making a little over $100,000. at that point. You've got $145,000 plus $25,000.. The car's pretty expensive.

Mm-hmm. $25,000 car is bothersome in the equation. It's not the end of the world, but it's a lot. I mean, you've got a $800 car payment, right?

It's about $470,000.

. Oh, okay. That's better than I thought. Okay, good. All right, anyway, so you've got $160,000 to come up with, making $100,000..

And so if we do $50,000 a year, that's three years and some change. So we need to do $60,000 a year and be done in three years. And that's going to be beans and rice, rice and beans, no vacations, no eating out. We're going to lean into this thing and we are going to clean up our mess. And she is going to maximize her career that she paid a lot to be in.

Because I've still got my head sideways a little bit. I've got that German Shepherd. look right now on what she's making. It just doesn't sound right. So I'm not an expert on speech pathology, but I've been doing this a long time.

So I've interviewed a lot of people about what they make for, what they do. And so, anyway, I want you to work on that. I want her to squeeze every dollar out of this degree field that she paid a lot for to get a return on investment. Because she's got high income potential. And you've got to do as much as you can do also to increase your income.

And in your field, I suspect there's some side gigs, so to speak, that you could do. That weren't with club members or whatever, where you're not in a conflict. And I'd be working every tournament, everything I could get my hands on to do that as well. So all of that to say, you guys maximize your incomes. And I'm with Jade.

I think you just change your pronouns and just go, look, honey, we've got debt. If you want to talk about it like it's yours, it's fine. But I married you. It's now we. We're French.

We, we. And this is what we do. And we are going to attack our debt. And out of the abundance of the heart, the mouth speaks, the Bible says. And so if you never again speak of it, except in terms of plural, our, we, that kind of pronoun versus yours, mine.

If you never again speak it, then that says that your heart has shifted. And as long as your heart is there, then eventually she will acquiesce to that. We are going to work on this together. We are going to knock this out. We are both going to sacrifice.

We are going to clean this loan mess up so that we have a good future. Yeah. Yeah. Love, love is the only thing that really drives out that shame that she's going to feel. And that's the way you do.

it is just by coming alongside her and it being a we. The good news is with their situation, he said her income is going to go up 60, some odd thousand dollars. No, 260.. Oh, 260.. From 40..

I may have misunderstood them, but either way. I hope it goes up 60, goes from 40 to 100.. That's going to be very helpful. Well, that's what I'm saying. That makes more sense.

That makes a two-year plan instead of a three-year plan. Either way they're going and they're paying it off. Either way, we're going to lean into it. And it took you guys longer than that. Significantly longer.

You accepted each other and didn't shame each other in that process. And that's how you all did it. Yeah. That's a big key. Now, I always say, like, I don't take much credit for that.

Like I always said, I don't know if I was very wise or just like love is blind, but, you know, I just didn't see it any differently. It's both of ours. Well, I mean, we did it in a little different setting, but I mean, it was our income. Yes. And I have never, I don't remember ever, saying to Sharon, I brought this money home.

I'll decide what I want to do. I don't think I've ever said that. Dave, I think that's equally important. Yeah, equally important. Yeah.

Our debt, our income. For 38 years, she's not had an income earned outside the home. Well, yeah, because what spouse wants to feel like I'm getting to have some of your income? Yeah. That's a recipe for somebody.

That's a recipe for disaster. It's a power play and it's relationally unhealthy, number one. And it becomes a manipulation and all that kind of stuff. Like, you know, well, only when we have a big fight is when I yell at you and say, it's my money. Yeah.

But other than that, I say, it's our money. You know, and it's like, yeah, if you're going to play that, that's a power play. It's a manipulation play. And then that's when you find out what's in the heart, out of the abundance of the heart, the mouth speaks. So when someone is saying something, you need to listen, because it's coming from inside of them.

Oh, yeah. The words that people use do matter. And so I'm listening to that, watching that, I'm thinking about that. So you're going to be on the other side of that, Justin, and you're going to be just fine. Y'all are going to, the point is bust through it and it doesn't matter.

And over time, both of you will adopt the proper pronouns regarding your money. That's right. This is The Ramsey Show.

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Maya is in Salt Lake City. Hi, Maya, how are you? Doing great. Thank you for all the work that you all do. Thank you.

How can we help? I am calling because we have two debts left. We have our primary mortgage, and we have the mortgage on a rental property. And we're wondering which one we should pay off first. Cool.

How much are they? The rental property has $130K balance, 3.785% interest. Our mortgage is $457 at 2.75% interest. How's sold incomes?

$530.

. Whoa!

Rocking it, girl. Good for you. It has gone up a lot in the last two or three years. I'm happy for you. Way to go, successful people in Salt Lake.

What do you do? We're very grateful, very blessed. My husband works for Delta, and in the last year and a half, he switched over to the captain's seat. We're very happy. That's awesome.

And he's gone a lot, too. Oh, okay. Wow. Well, good for you guys. I'm so proud for you.

Okay, so the only trade-off in my mind is this.

I always do a risk analysis first. And the way I look at that is, if everything went sideways, which you're a long way from everything going sideways, you're square in the middle of prosperity, right? But if everything went sideways and I was going to lose one of these, which one would I want to lose? Well, I'd want to lose the rental, so it's always the second to pay off. Unless it has a super small mortgage, and I could just knock it out real fast.

Now, relative to your income, what would be your plan to have both of these paid off? How long will it take you? Making $500, you need $550, right?

Right. So we were figuring three years. Okay, so really it doesn't matter, because in three years, both of them are gone. Yes, sir.

And so if we said that, then really we're talking about, of the three years, two years is your house, one year is the other, give or take. Not quite, but more of it's the house. Well,

the speed at which you're doing it kind of makes me on the bubble. I don't really care. So what would I do? I'll tell you how I'm thinking about it. With your first risk assessment, the one that you'd want to lose, I'd want to know what the rental property is worth.

What is it worth?

It's worth about $300.

. $300, okay. And your home is worth what?

$790.

. Ooh, interesting. I'm paying off my house. I'm paying off my house, too, because if you had told me that the rental was worth plenty of what it would take to pay off the primary, I might say, oh, go ahead and pay it off. Like you said, if you had a risk scenario and you came on hard times, you could always sell it and pay off the primary, but it wouldn't bring enough to do that.

Right.

So that's why I would go with Dave. Yeah, and you're going to pay it off. And I'm thinking of the non-math benefits that end up being math benefits, like peace.

Like when you pay off your home, you feel different than when you pay off your rental. Agreed? Agreed. Like when we paid off our cars, and you know that you can get to and from work and not have to wonder getting to and from dropping the kids off at school. It felt so good.

Yeah, like the stupid thing doesn't start, at least it's mine. You know, that kind of stuff. I also think there's something of it. I'm like, if anybody's living in the paid-for house, it's me, not the renters. Yeah, I like that, too.

There's that thing. Yeah, I mean, if you owed like $45 or $50, I'd just knock the rental out like it was a credit card debt or something, and just knock it out quick. But it's kind of on the bubble because of the way the math works in your scenario. So, you know, for the peace and the non-math benefits of being debt-free on your personal residence, I'll put it in line first. Keep in mind, we're only having a discussion here of one year.

Yeah. That's. the only difference is which one's paid by one year. That's the only difference. If you put the rental in front, it delays that by one year.

If you put the rental behind, it makes it sooner by only one year. So it's not a if, it's not a 10-year issue, but with her math, that's what we're talking about. So it's not, it almost doesn't matter. But just if I was going to get right down to it, I'm going to knock out the personal residence, because I think so many good things happen that people don't even anticipate, when they're debt-free on their house, that I'm going to put them there as soon as I can. 100%.

Hey, let me be a Pharisee real quick. So let's pretend that... And by the way, you folks notice, interest rate did not matter in that discussion. No, not at all. Not at all.

Over three years, it's irrelevant. Let's pretend that the numbers worked out a little bit differently and we were vying for her to pay off the rental first. I know there's people who are listening going, well, Dave, she shouldn't have bought a rental anyway if she didn't pay for it in cash. Why would you tell her to pay off the rental first and not the primary? I don't liquidate real estate unless it's causing a problem.

Yeah, for her it's not. If I liquidate a car in a heartbeat, I'll sell your car on you in a moment. Well, it's also depreciating. And cars are just land of stupid when it comes to money, stuff. But real estate, it's so cumbersome and expensive to liquidate.

And it's time consuming and everything else. I got a house for sale. right now. My personal residence is for sale. And it's just, it's a thing, you know, it's a thing.

And so real estate, if you call in and you're in trouble and you're in deep stuff up your neck, I'm going to start selling off the kids, three of the dogs, everything. But the house is the last thing I'm going to sell. Unless you're just, unless you've got a mortgage payment. that's, you know, 50% of your take-home pay and you've got to get out of it. All right.

I'm going to play another game. Okay. Because I like this. All right. Pharisee, the devil's advocate, whatever game this is.

Because I get into other people's brain. Okay, now there's a guy listening. He's like, well, I make $500,000 a year. I already live in a house that's $457,000, but I'm looking at a piece of real estate that's $300,000.. Why can't I go buy it?

Well, because the goal, the number one goal in the whole discussion, is to become debt-free and stay debt-free. It's not. Now, if she called me up and said, I've got 10 rentals. Sure. I might be liquidating some of those.

That's right. In order to get to debt-free faster. And pick which one. Okay. Pick the one you don't like, dump it, right?

That kind of stuff. I'm probably, and you've heard me do that if you listen to the show all the time. Because the shortest distance between where you are now and wealth is not your income. It's the freedom of your income, not going to someone else in the form of debt payments. That is what builds wealth.

Again, for the first $1 to $10 million worth of net worth, that's what all of the data shows us. And so, freeing up your income, it becomes my number one goal here. And not going into debt to buy real estate. It's not my number one goal.

Of our number one goal. Love it. Good question, though. It's good clarification to bring it up. And, you know, people bring up all kinds of things.

Here's the point. 100% of the time, that's all the time, the borrower is slave to the lender.

100% of the time that you engage in debt, you are submitting yourself to some form of mathematical, relational, some kind of slavery. 100% of the time. And 100% of the time you call this show, we're going to tell you not to do it. This is the Ramsey Show.

This show is sponsored by BetterHelp. 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.

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Jade Walshall, Ramsey Personality, is my co-host today. Thank you for joining us, America. Sam's in Birmingham. Hi, Sam. How are you?

I'm doing good, Dave. How are y'all? Better than I deserve. What's up?

So, I'm going into my third year of law school this next year, and I financed law school through student loans. And now my grandmother, who has a lot of money in checking accounts, she, has offered to pay my student loans through our loan servicer so that I can pay her back without interest. And I was just wondering if, because I've heard you kind of go against inter-family loans and saying that that might rub the relationship, and I don't want to do that with my grandmother. So, I was just wondering if I should tell her that that's a good thing to do, or if just taking a gift, maybe less than the full amount of the loans. I just am wondering how to navigate that.

Yeah. Wow. So, how wealthy is your grandmother?

She's very wealthy. What's very wealthy? I don't know what that means. Is she worth $10 million or $1 million or $500,000?? What's very wealthy?

I would say $2 to $3 million. Okay. And how many grandkids does she have?

She, including my mom, she has four. Kids or grandkids? Grandkids?

I think maybe five or six. You don't know how many cousins you have?

Well, some of them aren't under my mom's dad. So, I'm trying to think in my head. Okay. But I'm asking you, your grandmother has $3 million that presumably will be left to her kids and grandkids, correct? Yes, sir.

How many siblings do you have? I have one sibling. Okay. All right. And your mother has how many brothers and sisters, or half-brothers and sisters?

She, one just passed away, so she has three.

Okay. All right. Because the reason I'm trying to do all this, I'm trying to add up, if your share of the inheritance is $140,000, we might ask her to just advance you your inheritance. But not loan it to you. Not loan it to you.

Gift it to you. Only to put on the student loan. Okay. Or any share of your inheritance that she does want to advance to you as a gift. I would accept that gladly and put it on your student loans.

Even if it was an obligation to put it on student loans, I still would accept that. Would I accept a loan to save the interest? 100%? no. Never.

Okay. Yeah, and I guess, so in my head, my mom would be devised some money to the will. I don't know how the estate plan is working, and I guess that's something you need to find out. Is there any of this money, this $3 million, that's going to come your way when your grandmother passes? If the answer is zero, then obviously she cannot advance you against your inheritance, because the answer is zero.

Yes, sir. So if it's all coming to your mom and her brothers and sisters, and they're not leaving any to the grandkids directly, which is not that unusual, by the way, then you don't have an inheritance out of this. Or if your mom wanted to agree to accept the amount that your grandmother gives you less as an advance on her inheritance, and it go through to you now, that's okay. If you guys, the three of you, want to talk that out, you and granny and mom, okay, I'm fine with that. If you don't want to talk about it, don't do it.

But in no circumstances are we going to do a loan, if I'm you. Who's having these conversations? Is it you and your grandmother talking directly, or are you finding out about this by way of your mom or whoever? How does the conversation look?

So it started with a phone call with my grandmother and my mom on the line, and so I told my mother and grandmother that she probably needs to talk to her estate planning attorney, and my grandmother's kind of like, well, I can go down to the bank and get the money right now, and I'm like, well… You can, but you also can get screwed by gift tax. Your advice was correct. Yeah, I wanted to see what the relationship was, because it does feel presumptuous in many ways to be like, hey, just give me my inheritance in advance. No, he didn't bring it up, though. Yeah, he didn't bring it up.

I'd say, granny, I'm not comfortable doing a loan. If you and mom want to talk about a way that this is an advance on some of the estate plan, and either mom's share or my share, or however it works is reduced by the amount you want to give me to reduce the student loans, I can talk about that as a gift, and we'll put it on the student loans, but I don't want to be in debt to you, and I'll just work it out. Thank you so much for the kind offer. I honor you. I appreciate that.

I know you've got plenty of money, but the idea of me having to pay my grandmother payments makes me ill, and I would never want to do that, because I love you too much. And that's how it sounds. Does that make sense? Yes, sir. Yes, sir.

That's where my head was at on it. Thank you all very much. Thank you for calling in, man. I appreciate it. And so, family does this stuff.

Mom and dad are going to loan the grown kids money to buy a better house, so their grandkids have a better place to live.

But we'll do it at 4% interest, because the going rate's 6%, and I can't make that down at the money market anyway, so you just pay me what I was going to make on the money market. I've heard that story, like, I don't know, a bazillion times, and sometimes it all works out, but usually at least one or two people in the equation. You know, here's what I discovered, okay? When we went broke, Sharon's dad, who is one of the nicest men, he may be a saint, he's one of the nicest men I've ever met, and just a kind, good man. We went broke, and he loaned us some money to keep our house, to bring the house up current, so when we fell bankrupt, he would keep the house.

And I never thought anything about it, because I'd borrowed it up to my eyeballs and just went bankrupt. Hello? I mean, you know. And that's where I came up with the saying, Thanksgiving dinner tastes different when you eat with your master. Don't I know it.

Because here's the thing, it bothered him not at all. He never thought a thing about it. He's the nicest guy, didn't bother him a bit, but he was the master. It bothered his daughter, my wife, not at all, because, as far as she was concerned, daddy was helping, and that's what daddies do, not a big deal. It about killed me.

You had sweaty armpits, yeah. Yeah, that's how I lost my hair, right there, I'm just saying. And he never said an unkind or shaming thing to me once. Never one time. And yet, I carried all of this.

It just ate at me in silence. And it was after I paid it off, and years later, when I'm learning this borrower-slave-to-the-lender thing, I'm learning this, I'm going, well, that's what happened. I changed my relationship with my father-in-law, who I love dearly, to master. And even if your master, when you're a slave, is a kind master, you are still a slave. That's so true, Dave.

We did the same thing. We were upside down on a hummer, of all things. Oh, God. That's almost as bad as my Jaguar. I know, it's bad.

My Jaguar was on, yeah, that's the same stuff. But bad credit, you know, couldn't get a loan for the difference, so our mother-in-law, who, I would agree, one of the most generous people I know, lent us the money. And it just, I mean, I couldn't pay it off fast enough, because it just, yeah. From their point of view, it's generosity and it's kindness, and they uphold all of that. Well, they never thought a thing about it.

It didn't bother them a bit. Listen, being the master is not hard. It's being the slave, that's hard. That's the easy position in the story. And so, yeah, that's a good, it's a really good call, Zachary.

Thank you, not, Zachary, I'm sorry, Sam. That's a good question. And it's a valid question. Moms and dads do good things, bad ways. Grandmothers do good things, bad ways.

That's so true. Because they're ignorant about it. They just don't know. Just mean. well.

Ignorance is not malice. It's just, I don't know. This is the Ramsey Show.

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Jade Walsh, our Ramsey personality, is my co-host today. Today's question comes from Erica in Kentucky. Yeah, she says, my husband runs a landscaping company that's owned by his father. He's been told for years that he'll be taking over the business soon and he does everything in the business except collect the checks and send the invoices. He has put in a ton of time and invested a lot of money into this business, but he makes the same hourly wage as the other employees on payroll.

He's trying to be patient, but with the low pay and amount of work that he has put in, it doesn't add up for me and personally, I think he's being used. His dad is now trying to talk him into buying equipment with debt to invest into the business he doesn't yet own. I'm stuck in the middle and seem to have no say because he trusts his family's promises. How can I best support my husband while also keeping things cordial in the family? You can't.

Okay, so in Genesis it says, a man shall leave his father and mother and hold fast to his wife and they shall become one flesh.

And that's where the old time preacher would say, leave and cleave. You leave your father and mother and you cleave, an old English term that became part of the biblical lingo because of King James Version of the Bible. But you leave your parents and cling to your spouse. Your husband has not done that. You have a marriage problem.

I agree. He's still married to his daddy. 100%. Whether they're intending to use him or not, it's not a fair situation. Just reading what you've wrote, there's nothing fair here.

If he's doing a job and it's above and beyond what other workers are being paid for the job that they're doing, yeah, that's unfair. Now there is something to be said for... But we can't even have that discussion because he won't talk to her, he listens to daddy. Yeah. But I mean, back when I used to work in the cruise business, they would say, you know, I signed my contract, you signed yours.

Which was basically a saying of, hey, don't complain to me now that this is not fair, because you knew what you were getting into when you signed it. And so there's part of it, I'm like, the more that he continues to sign that contract, he's saying, yes, I agree with this. The problem is not your father-in-law, the problem is your husband. Yeah, because he's agreeing. He's going along with this and he's not listening to his wife.

Okay. Now, if we stop there and say, okay, I'm going to quit doing that. I'm going to listen to my wife and my wife says this is unfair. Now we can talk about, oh, is it unfair or not? Well, here's some good rules for family business.

And I coach a lot of family businesses. Got a world famous podcast called Entree Leadership, where I coach family businesses every single week. And, you know, millions and tens of thousands of them are being coached by us right now by Ramsey. Okay. So we deal with them all the time.

So here's the, here's the guidelines. Very simple. You do not invest money in a business you do not own. I don't care who owns it or what the promise was, period. If I walked up off the street and said, hey, Mr.

Employee, would you put money into my business? Well, they'd have to be brain damaged to do that. The only time you'd be brain damaged enough to do that would be your own stupid family. So no, we're not doing it with a stupid family either. No, number one.

Number two, when you work in any business, you're only worth what the marketplace says that position is worth. You're not worth any more because you're the golden child, or any less because you're family. We get to work our family for free. That's why we had a lot of kids. No, that's not the plan.

This is not what we're doing. And so Rachel Cruz, Ramsey personality, makes exactly the same percentage on royalties, on books, exactly the same percentage on speaking gigs that Jade sitting beside me makes. Rachel Cruz makes the same as John Deloney. Now they don't have the same income, but they have the same percentage of their deal. Now one of them may sell more books or less books.

One of them may have more speaking or whatever, right? But that's not the point. The point is they're on the same schedule and she gets paid for that, not because she's my daughter. And she doesn't get paid less because she's my daughter either. And so that's a simple formula that you should go with.

The third formula with family business is if you say you're going to turn over a business to a family member, you need to never say that, unless you say when.

Someday it'll all be yours. When you're 76 and I'm 104, right? What kind of crap is that? That vague stuff. Nobody knows what you're talking about.

So when you say to a 30-year-old, someday it'll all be yours, he thinks next week. And you think a decade from now. So you need to say, not. someday, you need to say, so, you need to work hard, someday it'll all be yours. Oh brother, how about?

I don't want to be in the landscaping business with you? There's a whole new idea too. I'd rather start my own thing. I could make three times as much money as you're paying me. So all that can come up only after we can have some basic family business principles in place for operating a family business and treating each other with equity and with dignity and with high communication levels.

And then you don't get to play the role of resentful wife either. You have to play the role of supportive wife. then. If your husband wants to do this, he likes working with his dad, and he's being treated fairly. And I don't think you're saying you just don't like these people, but you're starting to not like them because they're standing between you and your husband.

And that's a fair complaint right there. She said I'm stuck in the middle. How do you get stuck in the middle? You can't get stuck in the middle of one. Thank you.

I'm like, there's a party there that should not be there. Party of one.

Yeah. So I think you and your husband need to sit down and discuss who's in charge here of your life. You and him or his daddy. And then, once we decide that, then we can have a discussion about who gets paid, what and if we want to take this business over and under what circumstances. But this is where it is.

Those are tough conversations. Because when you're in it, like if it's your family, sometimes you can't see the forest for the trees. But then if you're the in-law, it's like you can't say, you know what I mean? Like. there's certain things that, as the in-law, it's like, you can't say to your family-in-law, right?

She can't talk to them at all. No, she can't. She's not got any footing to do it at all. Plus she's pissed off. So it's not going to go well.

If you write a letter to a radio show, you pissed.

All right. Just put it in that bucket right there. I don't care how much language. I really like them you put in there. You wrote a letter to a podcast.

Yeah. I'm just saying. Yeah. Yeah. Honey, you got a marriage problem.

You need to stop being angry with your father-in-law. He's not the problem. Your husband's the problem. The two of you being on the same page and him putting you and him as a family unit ahead of everything else, starts the conversation. That's where it is.

Leave and cleave. It's an interesting study. Look it up. The number of people who never leave their mother, never leave their father after they're married, and the damage that does to their marriage relationship, it's everywhere. Yeah, 100%.

And it's hard to do it when you live in their basement. Oh, gosh. You always take it to the next level. I always go there, too. Just helping you with this.

Oh, boy. Yeah, that's important. Open phones at 888-825-5225.. Jade, you know why we will always have a compelling and entertaining show? Because human beings are going to do stupid stuff.

And we human beings, when we do stupid stuff, me and you included, we're just downright entertaining. Yeah, 100%, every time. You know, this whole building wealth thing, the math is sixth grade. It's the stupid humans that mess it up. It doesn't require any thought.

I mean, there's not that much to it. Live on less than you make. Or we'd be out of business. And the funny thing is, it's the same stuff over and over, and we've all done it. But it's relational.

Yeah.

I was reading a thing the other day. In terms of wealth building, it matters more who you marry than where you went to school. All day. I believe that all day. So important.

And that case in point right there. This is the Ramsey Show.

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Thanks for joining us, America. I'm Dave Ramsey, your host. Jade Warshall Ramsey Personality is my co-host. The best way to make the most of your money is by creating and sticking to a plan. To be intentional.

A plan in the money world is called a budget. Just tell your money what to do instead of wondering where it went. Every dollar makes it simple to plan your spending. It is the world's best, most robust budgeting app. Tens of millions of people are using this.

Keep pulse on your spending. Make progress on your money goals. Follow the baby steps. Hit every milestone. Get your questions answered.

Work the system. Every dollar of the budgeting app will help you do it. You can download it for free in the App Store or Google Play. today. Jay is in Mobile, Alabama.

Hi, Jay. How are you? We're doing great. Thanks for having me today. Sure.

What's up?

I'm doing one of the least favorite things I ever do in life, which is shopping for a car.

My wife and I own Baby Step 7.

. We have about $15,000 saved so far for a car purchase. I'm wondering what you recommend in terms of a price range for a car for someone in my situation. I'm looking at these car prices. Unfortunately, I remember what cars cost pre-pandemic.

I got sticker shock here. What's your net worth? $800,000.. What's your household income? $160,000..

You're talking about paying what for a car?

The car we're looking at looks like the average cost is $25,000 to $30,000.

. What is it? That would be a $21,000 or $22,000 Chrysler Pacifica minivan with 40,000 miles or less. Okay.

You've got $15,000, but you don't have the rest of it?

Are you just going to reallocate some of your investments to buy your wife a car?

We could write a check. What we're probably going to do is leave that $15,000 there and take the next few months and save another $5,000 or $6,000.. You're saving it. You're not reallocating. Right.

We're going to sell my wife's car and get about $6,000 from that.

We're creeping up to it. I'd say do it. I'm just uncomfortable turning around and turning loose with that much cash all at once. You are a serious type. I love you.

The question I have to ask is, what's the alternative? That would be my question for you. What's the alternative? If you don't buy the $20,000 or $25,000 car, what would be your alternative?

If I'm going to buy a car, that's really the only car I'm going to buy, because we want to keep it 10 years plus. We want to drive them as long as we can.

I don't want to buy anything a lot older than that. I don't want to buy anything with a lot more miles on that. Then there's not an alternative. This is the car. This is what you're willing to spend, $25,000..

You realize you have the money, right? Yes. You're not a broke guy calling me up wanting to buy a $30,000 car. No, not at all. Do it.

Pull the trigger. Thank you for that perspective. I appreciate that. You bet.

What happens is as our incomes increase and our net worths increase, sometimes our emotions don't keep up.

Ramsey does about $300 million a year in revenue. What we spend on coffee for our team, we have 1,100 people here, and the coffee is free for employees. What we spend on coffee blows my freaking mind. Because my mind, emotionally, still is back when the company was making $10 million, not $300 million.

We had 10 people, or 20 people, not 1,100.

. I can intellectually look around and see it, and I know we're okay. But I look down and I go, you've got to be kidding me. Or what we spend on copier paper. It's just bizarre stuff at volume.

My emotions have not kept up. I have to stop as an act of my will and go, Dave, you're okay. You're okay, Dave. You're not going to die. Because I'm ready to kill something.

I'm ready to go have some of that caffeine right now and just jack them up.

That's what you're dealing with, man. My point is, it's a normal human thing. Your brain is not functioning at an $800,000 net worth, $160,000 income when you're having this discussion about a car. It's a true thing. Let me put it on an even smaller scale, because you've got this giant company.

Usually, when we buy paper towels, we buy the big Costco thing. You have a big supply of them in the house. Well, we ran out of paper towels. How is that possible? if you buy that from Costco?

You'd have enough for 10 years. How could you possibly run out? I have kids. I have a dog. Dave, we ran out.

I said to Sam, go out and get some paper towels. Costco is far, so he just went to Publix. Do you know? he came back with a single roll of every great value paper towels? I said, what am I supposed to do with this?

Once I pointed it out, he realized. He was like, oh, that was the broke Sam. Broke. Sam went and got one roll of the cheapest paper towels. I was like, that old man has got to get out of here.

I need you to go. get me brawny. Broke Sam, you're fired. We're sending you to Costco to get multi-rolls of the good stuff. That's the old way.

That's what you do when you're broke. You go get a four-pack of Angel Soft. You get the smallest. That's what I'm functioning. I'm functioning in broke Dave.

His income was not what our coffee budget is. It's the old man. That's broke, Dave. But, Dave, you're okay. Jay, you're okay.

You can afford the car. Buy the car, pay cash for it, enjoy it, happy wife, happy life. You know the federal law. Wife gets the good car. That's federal law.

Zachary's in Indianapolis. Hey, Zachary, what's up? Dave, Jay, let's talk to you guys. How are you? Better than we deserve.

How can we help?

What I've got going on, this year I've paid almost just under $20,000 off in debt, including just credit card. I've already cut my truck loan in half. Good for you.

I've got $14,000 left.

I basically stay with my girlfriend pretty much every night. I have an apartment. She has a house that will be paid off by the end of this year.

We plan on moving in together next month, when my lease is up. I will be able to save basically half of my rent and all utilities that come with it. She's a very big Dave Ramsey follower as well. Our question is, would you support that? I know the whole don't play house if you're not married, but this is the one, and that is my goal.

Then marry her next year. Marry her? Yes, sir. Before you move in? How old are you?

I'm 27.

Someday, you're going to have a daughter.

How do you want a guy to treat her?

End of story. End of story. End of story. We're not blaming sex convenience on money saving.

If you want to get married, get married. If you don't, quit acting like it. You asked me. The way he set it up, I was like, Dave is about to come through like a freight train, but you showed restraint. Good job.

I get it. I understand it. I understand how your brain has worked your way through this, but all the data tells us that the highest quality marriage does not occur with people that first live together. All the data tells us your highest probability of marriage success. I've been married 43 years, and we haven't killed each other yet, so we call that a success.

That's in the success column. We're both alive.

If you want to check the box, all the data says that the best probability of getting there, and nobody talks about this. Yeah, that's data. It's like the culture. You're not allowed to say that. You're telling people, well, you shouldn't ask if you don't want me to say it.

I'll just tell you, if you were dating one of my daughters or you were my son, I'd give you the exact same answer I just gave you, sir. I love you so much. I want good things for you. If you want to live with a young lady, marry her first. This is the Ramsey Show.

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 Walsh, our Ramsey personality, is my co-host. Thank you for joining us, America. We're so glad you're here. Open phones at 888-825-5225..

April is with us in Detroit. Hi, April. Hi, how are you? Great. What's up?

I was calling to see if I should buy a new car. I have put about over $6,000 in the car over the last less than two months, and I am a single parent, so I'm, just like, I'm, a little overwhelmed with the amount of money that I'm dumping into the car. $6,000 in two months? Did you rebuild it? I had to put a new transmission in, and then this morning, my car wouldn't start, and the tow truck driver told me that I could possibly be looking at a new engine.

They did, however, call me back and let me know that it would be a new starter, so I would be looking at another $600.

. When I look at the value of my car, it is around $7,000, but I also have a daughter that is going to high school, and I just want to make sure that I have something that is good on the road, but at the same time, I'm not trying to go into more debt. You owe money on the $7,000 car?

Yes. How much?

Oh, well, if I buy a new car.

. No, honey, how much do you owe on the $7,000 car? Oh, I owe $4,800.. Okay. Do you have any money laying around at all?

I'm trying to get a snapshot. I have about $5,000 less,

and all of this money is coming out of my savings that I put to the side to buy a house. What do you have set aside? That $5,000 is all that's left, period? Yes. So I'm a bit frustrated.

Yeah, I bet. Because how much did you start with?

I was right, around $12,000.

. I'm sorry. What's your income?

I make around $65,000 a year. Okay, good.

For me, I'd want to start looking and seeing what's out there. Your car's worth $7,000.. You owe $4,800 on it. If you sold it, what would you get? Seven.

Yeah, and I looked up the Kelley Blue Book.

It said, at a great price, I could get about $65,000 to $7,000.

. Yeah, I'd probably try to get out of it and put some more money with it and get into something else. But this time around, I would do a lot more research on getting the car. If I were in your shoes, I'd be asking around, does anybody have a car that they're selling? Is there anybody at my church who has a car?

and they were the only driver and I can get into it for super cheap? That's the type of research I'd want to do, because if you're going to choose an older car with more miles, you do want to know what you're getting into. Here's what you're looking for. You're looking for a car that no one thinks is impressive.

All we're looking for is reliability.

What kind of car have you got now? A 2016 Ford Fusion. Okay. We want to get a car that has a little bit of size to it, a little bit of substance to it.

The drivetrain and the engine have a little bit of oomph to them. They're not being strained every time you start the stupid thing. These little baby cars, they're always in a strain.

It's always a problem.

You're looking for something like a used Camry, a used Accord,

a used Taurus, something like that in that family of mid-sized vehicles. You're looking for something that probably is going to have to have a name, because it's ugly. Old Blue. Big Red. Bessie.

But Bessie has very few miles. A horrible paint job in the interior is not much. The radio might not work. It certainly doesn't have Apple Play.

Okay. So Bessie, is 100% of the time going to turn on when you turn the key and get you there. And 100% of the time is not going to get you a date.

And I'm okay with that. As long as I get to where I need to go. That's what we're after. You get my point. I call them garage sale cars, because sometimes you'll find a $5,000 car like that in the garage of a granny who's died and they're having an estate sale.

And it's got dust half an inch thick on it. And it smells like Estee Lauder inside. Right? That's the kind of car you're looking for. That's the one I want, right there.

It's faded, and so nobody knows how much love is left in this thing. But there's a lot of love left in it. That's the type of vehicle you're looking for. The second piece of advice I'll give you. Do you have family in the area?

I do. Are you in a good church? Yes, I am. Get a guy from one of those two pools. From church or family, that knows a little bit about vehicles to help you shop, for two reasons.

One is they'll give you information, but I think you're capable of doing it. Two is, sometimes people that are selling cars are the most sexist human beings on the planet. And an ugly guy standing there who don't know nothing will get further than a brilliant woman standing there. And that's not right, but it is a fact. And so if you've got your old Uncle Henry standing there and he's scratching his armpit and he just shakes his head, that sometimes will make you $1,000 on the dadgum negotiation.

You follow me? Yes. And it might be that Uncle Henry actually knows something about a car too. That would be handy. And so you don't step off into it again.

Then the last thing I'll give you is this. I've got two more things. I can't stop. I think you're incredible. You've been fighting a battle all by yourself and been losing.

And you just called us just to say, I don't know what to do. I'm scared. And I think you're stronger than you think you are. You're a warrior princess. So here's the deal.

The next time you have a $7,000 car, never put $6,000 in it again. You cut bait sooner than that. We don't spend $6,000 on a $7,000 car. We sell it for salvage and take the $6,000 and buy a good car. You don't put more in a car than it's worth.

And then the last thing in this series of instructions I'm giving you is this too shall pass. You're still going to get a house. It's just going to be a little bit longer than you thought it was because of this stupid car. But you're still going to get there. You're still going to win.

And 10 years from now, this will be a story. you tell your kids about the time you went and bought old Bessie. And you're going to be okay. This is the Ramsey Show.

Listen up. Trying to reach your money goals without a rock solid budget is like trying to climb Mount Everest in ice skates. It isn't going to work. That's why we built the EveryDollar app to help you win with money. It's the simplest, most straightforward way to track your spending and give EveryDollar a job.

That way, you can stop letting your money push you around and start reaching those money goals. Download EveryDollar for free on the App Store or Google Play.

Jade Walsh, our Ramsey personality, best-selling author, is my co-host. Speaking of best-selling authors, one of my good friends, Dr. Henry Cloud, dropped by. He is the author of the famous book, Boundaries, among many others.

Integrity and Necessary Endings, and many others.

Henry and I, inside baseball, are good friends. We spend a lot of time together. Our wives do. Last winter, he sent me a manuscript. I was sitting and reading it.

Tears were running down my face. I went, Henry, this is a different Henry Cloud book. This is way different than anything you've done. The new book is out. It is officially a national best-seller.

It came out a couple of weeks ago. Why I Believe, A Psychologist's Thoughts on Suffering, Miracles, Science, and Faith. This book is different for you. It was real personal, real vulnerable for you, wasn't it? It was very vulnerable.

I never had done that before. I write books on psychology and business. Sometimes, how faith interacts with that. I never had written one on faith.

The easiest way to summarize it is in the preface. It starts with, I have a problem. This book is my attempt to solve it. I love God. I know beyond a shadow of a doubt that he's real.

He's proven that to me for decades. That's not my problem. My problem is, I love my friends. Many of them don't know him. I struggle sometimes with how to talk to him.

It's a hard conversation with some people.

It's divisive for some people. They feel threatened. They feel uneasy. They feel like you're trying to convert them.

I had so many friends in business and other places. We just never have gotten into that conversation. I said, Dadgummit, that's not being a good friend either. I'm going to solve my problem. All the things we never talked about.

Why I Believe. Why I Believe. This is why I'm one of those weirdos. Why you're one of those Christians.

One of us Christians. I like it. The way you go at it. The approach. It's almost like you're solving the objections.

It's like, okay, you think this. But here's what I see. Some people think this. This is what I see. You walk through several different chapters on that.

How suffering, miracles, science, and faith all can coexist. I didn't know any other way to do it except tell my story. Which came out of deep suffering. I was almost non-functional. Depressed, way back when.

Reached out to God one day. Didn't know if he was really there or not. He showed up. The book goes through the whole sad story. How he took me from hitting the pavement to being above the waterline.

How he healed me. Also, a lot of miracles that I've seen along the way. The why, I believe, started out with me realizing that he was real. But then, when I became a Christian in a real way. All of a sudden I had all these intellectual quandaries.

Because everybody told me science is just proving the Bible. It's a bunch of myths. I did a deep dive for a long time into those questions. As an intellectual, you've got a problem. You put your brain in a jar or something.

The book also goes through how those questions were resolved for me.

Then it ends up with one area of science. I actually know something about. That's psychology. I talk about how the science of psychology proved the Bible to me to be true.

A lot of people know you as one of America's great psychologists. You've written and spoken all over the world on these subjects. I don't think a lot of people know the story that you actually are a wounded healer. The way you got into psychology was you discovered it on your own path to healing.

One of my favorite verses says, We comfort others with the comfort by which God has comforted us. Sort of like your story. You didn't start off above the waterline. in finance. No, bankrupt.

Coming through struggle, you learn things.

What I learned in that struggle was that there are real answers to healing. We can heal from this stuff. Major stuff. PTSD, depression, anxiety, all of that.

There are ways that that has to happen. God took me through those. Then I learned more about them. Slowly, I realized that's something I wanted to give my life to. That's how it happened.

I'm a Christian person too. I'm a Christ follower. The number one thing that people have a hard time reconciling is, If God is real, why is there so much suffering? Why would all these horrible things be happening? It sounds like you're talking about that very question.

I did get into that question pretty deeply. To me, that's the hardest one. Absolutely. Especially when people are in deep suffering, not only the big existential,

meta-theological question of if God's good and all-powerful, why all this stuff? But it's way more personal than that. for people. It's like, why is my child suffering? Why was I abused?

Where was God then? Why doesn't he stop all this? And we know, if you scratch the internet too deep, to find out, God still heals today, miraculous things, but then what about the people that aren't healed? Because they're in the pain. That question, to me, that's the hardest one of all.

I went pretty deeply into that one. What about the scientific side of it? Because for a lot of folks, there's almost like that curse of knowledge. It's like, I know so much, and I rely so much on logic and these other sides of things, that for a lot of people, it just doesn't feel, it just feels more like a fairy tale than like... Well, it does feel like a fairy tale if we've been told fairy tales.

And if you talk to most people, well, I don't believe in faith, I believe in science. And you go very deeply into that, and if you know enough to ask the questions, a lot of people just repeat that line to you. But when I went deeply into it, the first thing that really dawned on me and clearly emerged was, this isn't an IQ question. It's not like dumb people believe in this and smart people don't. When I get into the science and the various fields which I talked about, you know, astrophysics and cell biology and all of this deep, deep stuff, so many of the leading scientists themselves, the science, led them to faith.

I mean, you can start with complicated design, but what actually gets into it, when you begin to see, science can only look at what exists and examine what exists. Then you have to jump into faith, both on the atheistic side and the believing side. The atheists have to say, well, since there's no God, it must have just happened once. We must have gotten something from nothing. We must have gotten life from non-life.

And that's an act of faith, too. And so we're not really talking about science versus faith. We're talking about faith versus faith. when you get past the science, because you've got to interpret what is somehow. It takes a lot more faith.

for me and a lot of other people, especially, really, really like Francis Collins. The guy that unmapped all the human genome and all of that, that's what brought him to faith. So it's not like idiots only believe. There are a lot of smart people that the science drove them to faith. Sir Isaac Newton.

Yep. Even Darwin, one of my favorite things I put in the book, Darwin himself said, the human eye causes me to shudder.

It takes a lot of faith to think a booger, a piece of goo, turned into that thing. that does all that. it does. This human eye. That's evolution, the essence of it.

The book is Why I Believe. by Dr. Henry Cloud, New York Times bestselling author of Boundaries, and many others, many times over. He's been informing you about a lot of things in your life over the years. Now he's talking about why he believes, why I believe, Dr.

Henry Cloud. Be sure and check it out, boys and girls. I read it in manuscript form. I've endorsed it. I'm probably on here.

Yeah, there, I am, right there, on the back. There it is. It's what happens when you're friends.

It's a good book, worth the read. Good to see you, my friend. Good to see y'all, thanks. Dr. Henry Cloud, this is the Ramsey Show.

Listen, tickets for the Live Like No One Else Cruise are selling fast. This is the ultimate debt-free vacation, and I can't wait to celebrate with all the folks who've worked their butts off and changed their family trees. We will be sailing through the blue waters of the Caribbean with the Ramsey personalities and other special guests. A bunch of cabin options are already sold out, so hurry and reserve yours with a $600 deposit today at RamseySolutions.com slash events.

You guys notice real estate out there is weird right now?

It's weird. If you're going to buy a house in this current environment, and you should if you're ready, because they're not going anywhere but up, you need a really good real estate agent in your corner. If you're going to sell a house.

and I'm not talking about your Uncle Henry, who got his license three weeks ago and never sold a house in his life, and he's going to sell your $300,000 house, that's dumb. Just tell Uncle Henry you love him, but no, thanks.

Get somebody that's an actual pro that does 50, 100, 200 transactions a year and knows what the flip they're doing. That's who Ramsey Trusted Agents are. We don't have anybody in the Ramsey Trusted Real Estate Agent program. that's not a high producer, high octane, high protein,

and track record. And, by the way, they know the Ramsey stuff inside and out, so they're not going to give you advice. that's contrary to what you're hearing here on the air either. We call them ELPs, Endorsed Local Providers. They live there in your neighborhood, but they're the best of the best in your area, and they have become Ramsey Trusted Agents.

Be sure and check them out. If you want to find out who is Ramsey Trusted in your area,

you talk to them, and you interview them, and see if you find the same thing that we found when we talked to them, and we interviewed them, and we coached them, because we do all of those things. Marie is with us. Marie is in Philadelphia. Hi, Marie. Welcome to the Ramsey Show.

Hi. Thanks for taking my call. Sure. What's up? So, I'm currently living in hotels.

I can't seem to find an apartment. I've been looking for a roommate. What should I do? You can't seem to find an apartment. Why?

My credit score is abysmal. Okay. Are you working? Yes. What do you make?

I take in $87,000 a year before taxes. $87,000 a year? Yes. Good for you. What do you do?

I'm an occupational therapist. How did you end up homeless?

Well, I moved from state to state for love and a relationship, and that did not work out. And my only real option at the time was to find a hotel for temporary housing,

and I really didn't have anything saved up. I wasn't prepared. Do you have any money now?

No, because I'm basically spending $2,200 a month just to keep a roof over my head. But you make $87,000.. Yeah. You must have a lot of debt payments. Where else is your money going?

Yeah, so I have a car lease,

and I have my student loan debt. How much are the student loans? Tell me the amounts, if you don't mind. Yeah, I think they're probably at $275,000 right now in student loan debt.

$275,000?

. Yes. Okay. What else?

And then, you know, car insurance, my phone, and food. That's really what I've got money for. Tell me about the car lease.

It ends next month. Okay, good. That's about $340 a month. Okay. I'm not even sure if I'm going to be able to get a car by the time that's over.

So Dave asked you the question, and it was kind of a vague answer. I want to know, financially what put you here, because you've got the $275,000 in student loans. How much is that for you per month with your income?

It's about $1,000 a month. Okay. Are you current? No. Have you been paying it?

No. Are they federal?

Part of them are federal, and part of them are private. Okay. Marie, I'm struggling, okay? You've not paid that. You paid a $300 payment.

You make $87,000, and you paid a hotel bill. That's all you've done. Where is all your money going, kiddo?

It is going to eating out.

I only have a microwave here, so I can't really cook. Traditional meals, so I'm eating out and just trying to survive with food and drink. It goes to my phone bill. $84,000 is $7,000 a month, minus taxes, you should be getting $5,000 a month coming home. I take home $2,200 every two weeks, because I put in about $300 every paycheck into my 401k.

Well, I reckon you need to stop that.

Let's stop your 401k, and that gets you to $4,800 in take-home pay, which is pretty close to what I'm talking about. And then you can start to, even with eating out and even with a hotel bill, you can still stack some cash.

I can't tell what's going on in the numbers, but numbers generally talk to me, because I've done this a long time. So I think what I'm hearing is a highly educated, very intelligent lady whose heart got broken, let me take that further, got crushed, and you've been in a spiral emotionally since, and everything's out of control. Yeah.

Is that right? Yeah. Because the numbers aren't telling me anything else. Because you're too smart, you're too intellectually bright to be in this situation if you were functioning at a normal level, and right now you're functioning with a broken heart, and it's clouding everything. You're spending all of your calories and your emotional energy going over and over and over and over this, and feeling ashamed for having chased somebody that dumped you, and feeling bad that the guy wasn't worth your trouble, and all the different things, or whatever it is we do when we're in your situation, and normal humans do it.

So you're not a bad person, you're not a weak person, you're just been stomped on, and you're hurting, and it causes your math to get screwed up. Does that make sense? Yeah. Okay. Because here's what I hear.

You've got plenty of money to go rent an apartment. Lots of places will rent somebody with bad credit an apartment. You just put up a good deposit, and you get out of $2,200 a month, and you get straightened out. Where did you move from? to move to Philadelphia?

I moved from Voorhees. Where's that? In New Jersey. Okay. Okay.

So just down, just a few hours away. Do you have family back there?

My mom is farther south than Jersey, down by the shore, and my dad is in South Carolina. How's your relationship with either one of them? Awful. We don't talk. All right.

Here's what I want you to do. Jade and I are going to help you, all right? We've got Ramsey Preferred Coaches that we have trained to coach people on finances. Okay? All right.

I'm going to pay for you to have one for free as my gift.

Thank you. Because you're hurting, and you need somebody to put their arms around you, and we're the people that are going to do it, okay? Thank you. And then I'm also going to have that person recommend to you to get plugged into a good local church. And, between the coaching on pulling the money together to deal with an apartment and to deal with getting an inexpensive, paid-for car, with this lease running out, we're going to get you back to sustainability, okay?

But you need some human beings in your life, because you're wandering out there in the middle of a huge crowd called Philadelphia, completely alone. Yeah. Yeah. And that's not going to lead you to where you want to go. You need community.

You need human beings with their arms around you, helping you, loving you, and showing you the way, and even maybe helping you a little bit with the money stuff. But we're not going to give you money. You've got plenty of money. Your money's just out of control because your heart's messed up, okay? Yeah.

So we'll walk with you, kiddo, and you need to get out of this hotel, and you need to get out of this lease, and you need to throw your shoulders back and get your dignity back, because you're worth way more than you sound like you think you're worth. So you hold on, and we'll pick up. We're going to get you hooked up with one of our coaches, and they'll plug you into a good church, and between the two, we're going to get you in community and get yourself squared around. Hang on, kiddo. This is the Ramsey Show.

Our scripture of the day, Isaiah 5811.

. The Lord will guide you always. He will satisfy your needs in a sun-scorched land and will strengthen your frame. You will be like a well-watered garden, like a spring whose waters never fail. That's for our last caller.

Yeah. Elizabeth Elliott said, Of one thing, I am perfectly sure, God's story never ends with ashes. Ooh. You know what? Mini rant.

Because that and the last caller and the caller before, with the car that was breaking down, I think the number one factor that people sleep on is community. I think it's the number one thing when it comes to your life and your money, having a church, family, a community around you. And here's the thing. I get it. Anybody listening, they're like, Jen, I don't follow Jesus.

I'm not into that. I really don't care. Being in a place where people will love you and care for you, it is such an answer that it's a place where you can go when you need somebody to look after the kids. It's a place where you can go. if you need somebody to help you, go down in the car dealership and buy the right car, somebody who has a car that they're selling.

It's someplace where you can go, where you're heartbroken and people will put their arms around you and pray with you. It's a place where you can go when the election is going crazy and you are fearful of the future. There's so many things that come up in normal everyday life that, I mean, we say it all the time. You don't want to go through life alone. And it is the number, I'm telling you, it's the number, one thing that will help you keep it together in life.

That's it. That's all I have to say.

Psychologists say it regulates. Yeah. You regulate yourself off of others and you only go crazy in your own head. You don't do that because, you know, even if your family's nuts, I mean, in her case, she's estranged from her mother and father, and they're separated, obviously. Yeah.

Divorced, probably, or whatever. I don't know what her story was. But, you know, that's, I grew up on a street in suburban Nashville. And it was like a, something out of a book. You know, like, we didn't knock on the neighbor's door.

We just walked in. Yeah. We, all the kids played, hide and seek outside until 10 o'clock at night. We jumped over plywood in the middle of the street on our bicycles. And yes, we had no helmets.

It was a long time ago. I'm a dinosaur. And, but I got to tell you, if a neighbor built a deck on the back of their house, all of the kids and the men from the neighborhood are up there swinging a hammer. Yeah. At 12 years old, I'm driving nails in the neighbor's deck.

I can show you the nails I put in, you know, like I knew what I was doing. But, you know, that was what we were taught, that you're there for your neighbor. You're there for each other. You're in community. If, I mean, my grandmother died, I remember, and my parents jumped in the car and took off and dropped us on the front porch of one of the neighbor's houses.