Don't Let Debt Steal Your Future

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So we're here to help you. Your life. From the Ramsey Network and the Fairwinds Credit Union Studios, this is the Ramsey Show. I'm Dave Ramsey, Dr. John Delan. selling author, host of the Dr. John Baloney. MC Personality. He's my co-host today. Jenny is with us in Orlando. Hi, Jenny.

Hello guys. Um I'm just kind of tired of this financial dynamic that I have with my spouse. Um for context. We've been together fifteen years, we're almost forty, and I'm the breadwinner. I make about a hundred and seventy thousand a year and he makes sixty five. Uh, I'm more so now getting passionate about not carrying debt, making smart choices and possibly buying a business.

Does he have a seat at the table with you?

He does. We talk about finances every single month and I express kind of my displeasure about these things and it's always the same thing. Oh it's zero percent interest for eighteen months and final pay

Let me let me I didn't ask a good question, that was my bad. Do y'all have a co-created vision that y'all are both working towards? Or does every month he come to the table and get taken to the woodshed by the breadwinner, the boss? You know what I'm saying?

Yes. I say we're working toward the same vision and he has gotten a little bit better, but I can't get him to understand like even though it's zero percent interest, it's still money. He sees it as this is eighteen months, it's a scot free deal, it'll be paid before then. We just view it so differently. I'm kind of now learning if you can't pay it cash, you can't afford it.

Thanks to you guys. Yeah, we just view it so differently and it's just building up a lot of resentment and I don't wanna like you said, breadwinner, bring'em to the table. Give me the credit cards, I'm gonna cut'em up. But also I just am not in alignment with opening more stuff just because of the bells and whistles that they're dangling on the front end.

The the only way I've seen this be successful, and Dave, you've got way more experience with this. The the only way I've seen this be successful is You opening the hood to your heart and your spirit and you telling him, not, Hey, when you do this and you need to do this and y this was dumb, but you saying Debt scares me. Debt makes me feel less safe. Debt makes me feel like somebody else is controlling our lives and I want you and me to be in control of our lives.

Yeah.

I'm not okay. I'm not okay with either one of us. I'm not okay with either one of us. Making a large money decision without the other one or in perpendicular to the values of the other one. And you keep doing that and I'm not okay. This is not okay. You think it's harmless and it's harming me. Yeah. I'm not okay. This is scaring the crap out of me. I worry about our future. Because of this, because we're not aligned.

And if you've made a bunch of ex uh expensive like expensive purchases, you go out and buy yourself a car, you like you lead with that. I've made purchases without even talking to you about it. I got excited about this thing without even talking to you about it. Now I'm gonna own that, but I want us to start to do this together.

We we've gotta build a thing together. Um because you know, uh us being on different pages is is harming our relationship because it's terrifying me.

Yeah, I think because of how much I make, like he doesn't see ten or fifteen thousand as a lot of money. I see it as

That's irrelevant to the feeling.

Yeah.

It doesn't matter who makes more, it doesn't matter who makes what. It doesn't matter how much the income is versus the behavior. It's the behavior. That's causing me to be terrified.

Right. You introduce yourself to us as I'm Jenny the breadwinner. Does he walk around getting told that a lot? I make more money, I make a lot of money.

No, but I think it gives him that safety of, Oh, it's only ten thousand, it's only fifteen thousand. Like it just seems like so little because I make so much. But to me, every dollar I make I want it to grow and multiply and he's still

The this makes me feel the same way as if you brought home a half a pound of cocaine.

That's a lot of cocaine, Jen.

I'm not going to go this way. Okay. This is a violation of my values and it terrifies me. And it's not a matter of the money, it's a matter of us doing things that are directly a spear point sticking in my arm every time you do this. Or every time I do something that does that to you. We're not going to do things that we're not aligned on. So Sharon has my wife has some things after forty five years that she loves to do that I frankly do not understand.

It it's the the other one that's hard. Sure. You submitting to me is easy. Me submitting to you, that one's hard. Yes. And and some all and by submitting it doesn't mean I do what you say. It means I care what you think so much. that we're not going to do something that terrifies you.

Yeah, and and she brought up a great point here that I see couples get sideways on which is It really matters. She said, I want every dollar to be ROIing, multiplying and growing.

We do not make large purchases or gifts. Right. Without the other one being an approved. Yeah. And um you know, and sometimes the approval is laughing.

Sure.

You know, it's like but there's knowledge ahead of time and we don't get uh it's like, oh, you know Well let's let's let's let's sit on that a week and pray. Okay. That's a fair answer too. Yeah. Um Yeah, I don't I don't understand. Why are you doing that? And explain? Okay, I still don't understand. All right, let's wait a minute. You know, so yes, no, or wait.

And fun people have to realize bills have to be paid every month, which is annoying, right? And we need the other side.

Yeah, there's all that thing that the grocery store wants, money for those groceries. Who knew?

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're gonna die or something?

Well I used to be one of those guys I didn't even think about it and one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

That's a gut punch.

Oh, uh you're telling me and for for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

Yeah.

Don't know what to do next.

Me too. I mean you're gonna have a crisis here and and you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's gonna invest all this money properly and not mess this up, or she's concerned how she's gonna eat tomorrow. That's exactly these are the two options.

In terms of the yeah.

Take care of your dadgum family.

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Cody is in Chattanooga. Hi Cody, how are you?

I'm doing good. How are you doing today?

Better than I deserve. What's up?

Great. Appreciate you taking the call. Hey, I am a first time hono homeowner. I bought my house about six months ago. Um, I got it on a fifteen year doing bi weekly payments, but I just got and going through the process of switching to an arm loan. So a seven year adjusted rate mortgage. Um I closed on it today. I've got three days to cancel it if I need to, and I feel kind of in my gut like I might have been making a bad decision and I wanted to chat with you about it.

Okay. What what was the interest rate on your own mortgage?

Five point six two five.

And the interest rate on the arm is?

It's gonna be four nine nine for the next seven years.

So five Was the f the the one you got rid of was five what?

is five point six two five.

Okay. All right. So it's less than one percent. And your loan balance is what?

It is when I got the house it was one hundred ninety two

What's your loan balance today?

I've managed to pay it down to one sixty eight in the past six months.

Okay. So one percent is sixteen hundred dollars a year.

Uh-huh.

Is the difference. And it's not even that. So it's probably$1,400 a year, is your difference. And what was your closing cost on this?

My closing costs are gonna be about eight thousand dollars.

So you're not even gonna break even.

That's that's what I'm looking at too. And my goal is to pay this off in the next

Doesn't matter. Your goal's irrelevant on this. It's just a simple refinance calculation. If you save fourteen hundred dollars a month and you pay eight thousand dollars for that purpose and the loan's gonna be paid off in seven years, you're not even going to make your money back in interest saved that you paid out in closing costs. Your break even analysis sucks.

Got it.

Cancel it.

Right now.

Yeah.

Call.

Yeah. Well you see why? It's regardless of what your payment change is, it's the interest change that matters. The only real savings is the interest savings, the difference in five six two and four nine nine. Which is what? Po point seven five, three quarters of a point, right? Three quarters of a point is uh one point is sixteen hundred and eighty dollars, so three quarters of a point's around fourteen hundred bucks.

Got it, got it. I d I and I had think I had done my math wrong towards the the front end of doing this, and in closing I think I kinda

Yeah.

Uh

starting to figure that out.

Okay, so now let's let's p l can I pile on now? Are you okay?

Please. Please.

Buckle up.

Which is really just to go back to the real reason to talk that this thing let's pretend that we had not found a that mathematical problem. And instead you just had signed up for an adjustable rate that adjusts one time in seven years. If you don't pay it off in seven years, it's going to adjust dramatically. You know that, right?

Yeah. Yes.

Okay. And so if if if your if your plan doesn't work out, you've got a problem.

Yeah.

Never put together. a a financial formula that that i you have it everything your plan has to work for it to work. It also it has to work when the plan doesn't work too.

Yeah.

Because that's the... That's the only plan that works when things are good and the plans work out and when the plans don't work out. Yeah. So you you did a deal here that only works if it works. And those kinds are the ones that'll come around bite you in the butt later. And and so you probably would be okay'cause if it adjusted to, you know, nine or ten percent or something crazy.

I was gonna say like doctors and uh

Uh

Lawyers, like there'd be way fewer of them and guys like us if everyone's plan worked all the time.

Yeah.

Like the one thing is your plan's probably not gonna work.

If there were functional families, we wouldn't need people with PhD in counselling.

That's exactly right.

Like

If people used a calculator.

Most families put the fun in dysfunctional. So I mean it's you know, including mine. So there you go. All right, fun. Victoria is in Austin, Texas. Hi, Victoria. How are you?

I'm doing well. How are you?

Better than I deserve. What's up?

Hi. Um, I am um looking to see um I am three hundred two hundred and twenty seven dollars and six hundred in debt and I'll

I'm sorry, wait a minute. I didn't understand that number. That was a number I didn't understand. Three hundred thousand dollars?

Yes, indeed.

Okay. I and and how much of that is your home, ma'am?

Two hundred and fifty five thousand.

Okay, what is the other forty five thousand in debt?

Um, it is student loan. Mm-hmm. And then I have a car that's twelve thousand and then my air condition went out that is ten thousand.

Your air conditioner went out and you borrowed to get another one. Yes, sir. That's the two thousand. Okay. All right. The air conditioner go out and doesn't put you in debt. It's the buy and the other one that goes you into debt. Okay. So the um and what do you make, ma'am?

I make uh between a hundred to a hundred and fifty thousand dollars a year. Wow. I didn't work any overtime, it would just be a hundred if I do add overtime to that.

Good for you. Okay. I'm quite uh I'm caught up with you now. And your question's what?

Um, like would it be smart for me to um open up a Roth IRA now even though that I'm still in debt and I'm paying off my debt or should I wait till I get all my debt off of me first before I open up a Ross IRA?

That is an excellent question. The good news is you're smart enough to know you need to be investing. That's very smart.

Yeah, okay.

How old are you?

I am thirty two years old. Okay.

Okay. So you're already looking out into the future. Good for you. Well done. So what we have found is after studying this for many, many years and helping millions of people get out of debt and build wealth and that tens of thousands of them become millionaires. is the fastest way to become a millionaire, the fastest way to build substantial investments, is to first get out of debt because your most powerful wealth building tool is your income. Now I'm not talking about your house.

Yes.

That doesn't make you bad, it just makes you normal. But normal sucks, we don't wanna be normal.

That's right.

Okay, so let's buckle down, get on beans and rice, rice and beans, get on a budget, get that every dollar app, download it off the web for free, get your budget going, and let's knock these debts out. And and lay at lay it out on paper where you're done in one year or less, okay?

One year list. Yes, sir. I will.

Y that's forty five from one hundred fifty leaves me one hundred five to live on, not counting taxes. You can do that. Okay. Once you focus,'cause you're a person that focuses, I can tell. But now that you're paying attention, now that you're awake, game on, okay. All right. And and you can do this. And so then what's going to happen is the what you used to pay on car payments.

Yes, sir. So and took pay the forty five off and then opened the ward.

Yes, ma'am. There you go. So it we teach a process for getting out of debt and then building wealth. We call it the baby steps. And again, millions of people have done it. I'll send you a copy of the book, The Total Money Makeover, is my gift. And it shows you exactly how to work those baby steps. And don't make up your own plan, Victoria. Do the one we have that works.

It's proven. It's not because somehow we just dreamed it up. It's millions and millions of people have done that. I've sold twenty million of those books. So we know this is moving the needle. And you're you're awake now, so game on.

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So I'm really starting to I mean, I was mildly amused with AI to start with, but I'm really starting to love it. Um, once I understood this one basic thing about AI, here's something you gotta understand. So AI obviously generates an answer for you. You pose an answer for it. But the only thing it can answer from is the data that you give it access to. And so if you control the data inputs, you're controlling the output.

They took George out though, and that kind of He drove home in his Tesla in a huff. Except there was no huff because there's no huff coming out the back of his Tesla.

See, there's a good George joke right there. All right. So here's some that we get questions and and we always go down and s'cause you need to check this app out. It's at Ramseysolutions dot com. It's free. Ask Ramsey if you can't get through on the air here, which nobody can'cause these lines are jammed all the time.

a I have a buddy who talks about that in the nutrition space about um you have you're you're on a diet and you have one bad day and then you're just like ah I blew it. He said that's like walking outside in the morning heading to work and you see you have a flat tire.

Yeah. Yeah. Just keep get back with it.

Yeah.

Mm so you messed up. You're human. Oh ooh who knew. And and here's the thing, you have to adjust for irregular expenses. When you first do your budget, you suck at this. You've never done it before. It's not going to be right. Your first thirty days you're probably gonna have some emergency budget committee meetings and adjust and raise one category and lower some other ones by the same amount'cause it's still gotta equal zero.

Or a doctor bill that's seven months old just comes out of the blue and you gotta pay like it just shows up and

Who knew? Yeah, I forgot about it. Forgot I went. Yeah, that that's all there. So these are the this is the top pitfalls to avoid when budgeting and straight out of the ask Ramsey tool, almost like we said it because we did.

Can I tell you something? Um, this is a very personal private experiment I've been doing. N equals one. And I gotta tell ya, um, you and I haven't we haven't hung out in a while. And I'll just tell you right here on the air. Uh oh. My wife and I, March first, canceled Amazon Prime. And the second thing is I said for the month of March um and the month of April, I'm just gonna use I'm gonna go old school and just use cash. And

Every transaction.

Every transaction. In fact, today was the first thing I've spent with a card.

Because of April, yeah.

Um well I didn't I just I was like oh I forgot cat like I'm I'm still practicing. It's my first first one that I didn't keep up my end of the bargain I made to myself. I gotta tell you two things. One The ability to just click it and buy it versus I'm gonna plan and go to the store has so insanely reduced the number of things I buy. I I never in a million years would have would have thought that.

Well you forget it.

The or the socks I got. Yeah. The second thing is you've taught this for years. As I'm just putting over cash It is painful.

Yep.

It sticks in a way that just waving my phone over the little beepity beep thing, it is causing me to rethink all the stuff I bought.

What gas costs?

Yeah. It's just it it's a reminder at how the credit card companies, the tech companies in an effort to make everything comfortable and quote unquote reduce friction. have taken away our our our internal like metric system for this hurts. Do you really need this? Do you want this? Yep. And man, I do this I'm uh I I'm with you on this show and I've been shocked at how My spinning habits, frictionless habits have have taken over.

Well and your your psychology brain is probably gonna over.

Oh dude.

Yeah, you're m you're melting down analyzing all this.

I'm I'm I'm trying to connect what I'm feeling versus what I'm doing and man that bridge is I need a lot less stuff. And man, using cash

And now the other thing is you cannot replace the weird looks you get when you pay cash for things.

I I did have one exchange where I and they're like

I'm not currently.

They're looking around at me like I was handing them a snake and I said, Hey, I that's all I got. So if y'all don't take like money, I'm gonna have to and they're and they're like, No, no, you you can you can do it. We just gotta I don't know how to open the drawer and I mean it was a whole thing.

Ha ha.

I felt like I rode up to like a store on a horse.

You're dead.

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Zach is in North Carolina. Hi, Zach. How are you?

Hey, doing wonderful. Appreciate y'all taking the call, big fan.

Sure. How can we help?

Yeah, I couldn't ask for a better duo. I was hoping you could help resolve a disagreement between me and my wife.

Yes, I love these. We're probably gonna be right.

I'm sure you are. Um she would like to move back um to where we're from, where more family and friends uh for we've got a eighteen month old baby girl and uh she'd like some more help and uh

Where's that? Where's home? And you're in Wilmington? How far is how far is Wilmington from Charlotte?

About three, three and a half. Not bad.

Okay.

All right. Um, versus um I've built a um I'd say fairly successful uh real estate career over the past decade here and uh just trying to Resolve that issue and trying to trying to figure it out. Um,'cause starting over in a different market is terrifying and uh just doesn't sound feasible to me and trying to find a middle maybe a middle ground or just get walked through it, if you will.

What would a middle ground look like?

That's a great question.

I don't hear I don't hear a middle ground here, so I'd love to hear if you've got one.

Well, I guess I'm looking for a

How old are you guys?

You have thirty three. Yes, sir.

Wait a minute, has she been there ten years?

Uh six.

We all been married.

Well some Yes, yes.

Okay. All right. So the baby is the is the thing that caused the change. 'Cause there was probably no big no big deal before that.

Well Mike Mike, I would bet the opposite. Uh has this been brewing for a while? We don't have any friends. I'm kind of all all alone while you're out running deals. And then the baby just brought that all to the surface.

Yeah, you pretty much hit the nail.

Okay. All right. Cause th'cause that's like there is the draw, I want to be around family. I want all I want all my all the family's chickens, you know, in the same roost. Like that that's common. I totally get that. But just listening to you talk about your career and like that makes me think she is rapidly feeling like um she is Living a life that she doesn't like living. She doesn't y'all have created a life that's mostly about you and she doesn't like what y'all have created together.

We've got uh we got my folks here, but that's not enough and she doesn't have the village that she needs, so um just having a hard time with that.

So is the f is the fear all all market based that you have this job, it's comfortable, you know how it all works, and the thought of starting over again at thirty three, which by the way, you're not gonna be starting over, but it feels that way and I get that. That is that what makes you nervous or do you also not want to live there? You don't want to be around her family, you don't want to be around her old friends. Is that part of it too? Or not really?

Well, a little bit of a combo. Not that I don't want to be around him, but I just I don't know. It it's just been taken so long to get where we're at now, um and just starting over it's it's extremely overwhelming.

Yeah, I I I would A sit down with a good marriage counselor and keep talking about this for a while. Uh to keep yourselves from getting entren too entrenched. Um And then I would probably throw out the challenge of two things w and this is just old guy talking and then I'll let the real psychologist over here answer the question, but um N number one, uh going back you can't ever go back home. I drove through my neighborhood that I grew up in the other day. It's not the neighborhood I grew up in.

Wherever you go, y'all are gonna go with

Exactly.

And so if y'all have built a life where she thinks you work too much, she feels alone inside her own house, y'all sit by each other on the couch and you're scrolling on your phone, checking deals, and she's trying to connect with you, but she's on her phone.

Ship code doesn't matter.

That same dynamic's gonna end up.

Yeah. nimble and flexible and talking and understanding each other's needs as you're going into this is I would go on a hardcore six month experiment to build community. Plug into a church, invite people to your house, invite neighbors to your house, invite church people to your house, invite work people to your house, have dinners, develop some friendships. You're not friends with anybody because you've not been friends to anybody.

Agree. Yeah, and th the layer underneath that one is I think there's some real power in sitting across the table from your wife and saying if this is true, don't say it if it's not true. But over the last six years the market's been up and down. It six years ago you were living high, right? And then the last four years it's been you've been grinding it. Um I've put this ahead of you. And I want to build an I literally essentially I want to build a new marriage.

Yeah, have you protected her from your mother?

I have. has to do with we're in a we're in a secondary vacation um primarily home market. Uh we're not in Wilmington and um probably of course the city and she's got her sister and her kids there who are the same age as is our daughter and and her best friend of twenty years is there and um just harder to make friends here than it is is there. And I think that has a lot to do with it. Plus lack of sleep and blah, blah, blah, it's just

Uh yeah, and I I think you get into all of that. And but I I really would explore some new attempts at building the life there before I left there. And if you can't and you decide based on that, the only place we can build the life we both want is I'll I will make the sacrifice to rebuild my market in another place.

And here's what that's gonna cost. Is is there's gonna be a uh we're gonna have a cut and in cost like we're gonna plan for this. We're not just gonna be emotional and reactive about it. We're gonna plan for it. So it's not gonna be tomorrow. But uh Dave, I th I always wanna tell especially young hustlers like this guy that's just out there grinding.

And he doesn't feel like he needs to he he doesn't feel like he has to if if she just had friends.

Or her sister or her cousins or her nieces and all that kind of stuff. But but um I I I love the idea of y'all two sitting on the same side of the table and putting the problem on the other side of the table and making sure, like Dave said, y'all don't come a seam at the part uh come apart at the seams at each other. It's you versus me. One of us is gonna win this.

We did we did this, John.

Okay.

Forty five years ago. What's when I got married. My wife came three hours from her family. moved into a city where she knew

Yeah.

Did exactly what I said just then. It's exactly what we did. And she's never one time said she wanted to go back. But we built community.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, John Deloney. Dr. John Deloney, Ramsey Personality Number One Bestselling Author is my co-host today. Ruth is in Nashville. Hi, Ruth. What's up?

Hi. Um, so I'm calling because my husband and I built a multi-generational house with his parents. Um now only less than about a year and a half later, my mother in law has moved out and will soon stop helping with the mortgage payment. So we will either have to loo have to sell the house with very little equity in it, or we will lose the house. Um she said she wants part of the sale of the house. Um, but how can I move forward without feeling as much hurt or animosity towards my mother in law?

Co could I venture a guess that before any of this was done or signed up for you had a bad feeling about it?

Yes.

So you're really mad at yourself.

There's a good part of it that I am mad at myself. Yeah.

What happened?

Um, so my husband and I um to my in laws with the idea to build a multi generational house um back in probably late twenty three, early twenty twenty four. Um his dad had had a stroke back in two thousand eight and was in poor health. So we were talking and we talked about how important it was for him to be with his dad when the time came

It was kinda what you signed up for. Yeah, that's good. That part's good. Yeah.

Exactly. Um

So did you put equity into the house?

Um me and my husband put about um a hundred, maybe a little over a hundred thousand into that.

And it won't bring enough for you to get your hundred out?

Um, we may just get our hundred. So we put in a hundred, his parents put in a hundred, but it was like a six hundred and sixty thousand dollar

So would there be enough to get her hundred and your hundred out?

Probably not both of our hundred. Um she has yeah. Um we're hoping to get close, but um she has since started dating a guy um in Jul mid July and moved in with him in August.

And she was she first she would cover the normal part of the mortgage. She wasn't um taking that away from the picture. And then January she said, No, I have to go fifty fifty with I was a little annoyed but I mean I dealt with it'cause it was fair and then just last month she said, No, I'm not paying half. Um I will only be pa I will only be paying fifteen hundred and dune I will not be contributing to the house.

So um but you I assume there's no written there's no written agreement, right?

No. Okay. Just her text messages saying this is what is happening.

So the reality is the house is gone. Yeah. Immediately. Mm-hmm. And uh deduct what she pr she promised to pay everything above fifteen hundred. originally and whatever she doesn't keep her promise on, deduct that from her half of the proceeds.

Okay.

to make the deal fair, to make her she's going to honor her word. I'm just taking it out of her hide. And um um but there's so much to be disappointed in with this lady. But uh none of it is your fault and none of it is anything you can do about. Uh but a and and really I would be so disappointed whether in all things except the house. There's just so much that she's that does that's wrong about what everything it's just sad.

She's met somebody and he's he's whispering in her ear'cause he wants that money in his

Yeah, from

Not in y'all's.

Yeah.

Um okay, Ruth, can I use your situation, your original question as like a miniature teaching moment here? 'Cause you asked a really powerful question and I think this question is drowning us as a culture. How can I do these hard things that I gotta do that were not what we agreed upon and not feel sad, resentful, all these other feelings?

Mm-hmm.

Uh all feelings are they're just there's they're digital billboards as you're driving down the highway of life. They're giving you information. And if you think of'em that way, th they they are powerful and they're important data, but their job is not to tell you the truth. It's to keep you safe on this road you're driving on called light.

Yeah, if you're going through hill, keep driving.

Right.

Yeah. So I'm gonna feel I'm gonna feel sad. I'm gonna feel frustrated. I'm gonna feel XYZ. This is what maturity is. This is what emotional regulation is if you wanna be a nerd. It is, can I feel this thing and then do the next right thing after that feeling? And it doesn't mean that your feelings are wrong, bad. I I don't judge feelings anymore. Have all the ones you want. What I'm gonna look at is what's the thing I did next after that feeling.

And still sell the house.

Still sell the house.

Yeah. And still execute on the proper way to handle the money at the transaction at the sale of the house and all of that.

Still choose to I I I'm gonna drop a contract with this woman as we sell this house or whatever. gonna listen.

I'm gonna listen to my b When the my dad used to say when the bell rings The bell's ringing for re listen to the bell, it's ringing.

That's a great line.

Yeah, listen to it. Listen to it. Listen at that

Doesn't mean it's right, but I'm gonna at least listen to it and and talk to it.

When in doubt, don't.

Hey, what's up guys? It's Jade. Listen, my husband and I drive used vehicles and we really do plan on keeping those running for a long time. So we trust Christian Brothers Automotive to take care of them. Their team is honest, their shops are super clean, and what I love is they don't try to upsell us on things that we don't need. I personally feel really confident walking into Christian Brothers because I know that no one's gonna try to take advantage of me or scare me into unneeded repairs.

Thomas is in Dallas. Hi, Thomas. How are you? Better than I deserve. What's up?

Hey, so um I'm basically a sub contractor working for um a company. Um I have to be doing a lot of driving, need a personal vehicle. Right now my boss is lending I currently have a broken down truck that needs an that needs an engine, probably around a five thousand dollar fit. If I get that fixed, my boss will give me the equivalent of a twenty to thirty three percent raise across the board.

What are you doing? What's that? What do you do for a living?

I'm a s uh clean clean swimming pool.

Okay. All right. And so a$5,000 or a$6,000 truck will get the job done as long as it runs and gets you there, right?

Well so I currently have a vehicle that is broken down. It needs an engine.

You told me that. I don't want to fix it. It's crap. I'd rather just buy one that's already running. Okay. So what can you sell that piece of crap for that salvage? A thousand bucks? Fifteen hundred?

Not quite sure. I haven't priced that yet. Yeah.

Okay. What um what what kind of what kind of year model and what truck is that that's sitting with no engine?

Two thousand one or maybe a two thousand three Ford F one fifty?

Okay. Yeah. So you can buy that car with an engine running for five or six grand. Yeah. Okay. Um And what d what are you making how much do you make before he gives you this twenty or thirty percent rate?

Uh net is thirty three point five, gross is thirty after my ten ninety nine taxes.

Thir thir thirty three point five thir thirty three thousand five hundred dollars? Yes. Okay. Yeah. Yeah. Okay. And so a twenty percent raise is seven thousand dollars. Does sound right?

Uh

Yeah, twenty percent of thirty three. Okay. And so um yeah, the um So you break even after one year? If you spend seven thousand dollars to get a truck and he pays you twenty percent. Um, how long have you been working for this guy?

Well,

So

M so he's the one that trained my dad. I've been working for my dad for ever since I'm twenty I'm twenty eight. I've been working for my dad off and on since I've been fifteen. Um I I recently had uh life destruction events and have been work literally have started working last back in this job that I have like

What's a life destruction event?

I I um had a mental health crisis. During the mental health crisis I s there was fin there was uh family violence happening between me and my wife. I got put in prison for that. Um, even though in Texas there's supposed to be provisions for preventing for helping people with mental health to not just put them in prison, but that didn't happen with me. So

How long were you how long were you away?

uh two years and a month and then I got a violation and was back in for another five months. I've been back out a week now. So

Okay. No.

Yeah, don't borrow money, please.

You do not need to borrow any money. You're you're li you're coming off of a highly unstable situation and you haven't stabilized yet. Um at least we don't know that. We hope you have. And you hope you have. Okay. If you told me this was all three years ago, it might be a different discussion. It wouldn't be a discussion about borrowing money, it would be a bit a different picture. But instead we're three minutes into this, not three years into this. So you need to sustain

How long do you can save up? Six grand?

Um that's kind of that's kind of the issue. The i all my money's basically kind of breaking even in my every dollar zero budget.

Where's it going?

One second. Most biggest expense is three hundred dollars in gas since I'm spending about a hundred and five I'm purchasing about a hundred and five gallons a month. Come on though, please. Go. That's it. Me and my wife are currently separated. She has a five hundred dollar rent. I have a two hundred fifty dollar rent.

You have to pay the five hundred dollar rent?

Uh currently because we have we have two kids, she's basically stay at home. Her family sometimes helps, but if I'm paying the stuff, she doesn't ask for the money. Um and currently because of the family violence there's a no contact order so I cannot coordinate anything with her. So I'm kinda defaulting to doing everything, basically.

Yeah. Well, um I'm gonna help you. You don't have to do everything. You need to make sure the kids have a something to eat, but she also's gonna have to bank a life without you. And so she and and that means she has to develop a way to live sustainably without you feeding her. Okay, so I um you know, right now we've gotta get you up and stable. So your two fifty rent, um, even five hundred going out for her still not used up all your money.

Impulsive.

And I want you to slow And just be boring for a while. That's no excitement. You've had enough excitement to last you the rest of your life. Just be boring Thomas.

Can I a can I paint you a picture, brother? The last two plus two and a half years, somebody told you when to get up, when to eat, when to you could go outside, what you were gonna eat, right?

Yeah.

When you borrow money That bank tells you, I don't care how you feel, you're going to work tomorrow because I want my money. You already took my truck. Oh, you got you lost that job? I don't really care. You're doing this because right? And so what I don't want you to do is walk out of prison and then walk right back in voluntarily. And that's what borrowing money does. Stay free. That's good. Stay free.

Hang on, I'll send you a copy of the Total Money Makeover and we'll help you as you rebuild your life and just steady, steady and slow.

Christian send him Building a Non Anxious Life Two. I want to give him some tools for Walking through the ups and downs that are gonna be the next five, ten, fifteen years of his life as he ste steadies himself and builds a new version of himself from the inside out. We'll send him both of those.

Yeah, very good. That's good. I like that. Mike's in Detroit. Hey Mike, how are you?

Alright, thanks. Need a little bit of help. So I got my dream job in September of twenty twenty three, working for a friend's company. Everything was going swimmingly. Up till about November twenty twenty four where I had to leave his company and pick up work with a competitor. While I was working for him, I was working to get myself out of university debts, education debt, and get my feet underneath me and

It took everything out.

Uh old friend. Uh old friend.

Why? You only work for him for a year.

Well, I was working for him on and off for about nine years, kind of

No, but the dream was the dream lasted a whole year. What was the lawsuit for?

Um, he did not pay an invoice that I billed him for for work that I performed for him.

After you left?

Yeah.

Why did you do work for him after you left, if you got fired?

I'm sorry, I'm sorry. I'm sorry before before I was hired on full time.

How big was the invoice?

Eight thousand dollars.

I'm sorry, so how uh uh how much were you making working for this guy?

Sixty five thousand dollars a year. Okay.

So have you been able to replace that income?

Uh I was working for another company, a competitor They were only paying half of it.

Yeah. So I think what I'm gonna concentrate on is not being angry at him and all this quote dream job stuff that never was really a dream and instead be working on the future.

G get get after something moving forward. Yeah.

Go forward. Forward.

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Hi, good. How are you?

Better than I deserve. What's up?

Thank you for taking my call first off. Um, so my husband and I have three kids and our oldest, she's sixteen. We share her with um his first wife, um, and she's sixteen. And um we want to know our question is should we help pay for her driving school? And

Who's paying for her insurance? Okay. So you paying for driving school gives mom a discount. Yes.

So that's kinda where we're at and we we also want some advice on how to navigate that conversation. Um

How to navigate the X?

Yeah.

I didn't I didn't have that class in grad school. That's a tough one.

mom did kind of this shady thing um last week. She um had the d our daughter text my husband say, Can we talk? And then when they finally got to talk, she said um that they were waiting on us to start driving school. But we are going through our own. We just started the every dollar app, like we're trying to get debt free. We pay her child support and like

I just told her how to navigate this because we've paid for her braces and we were supposed to go half on that. She never once called and made a payment to the dental office even though we told her this was the off

Let me jump in on this, Leslie, okay? Let me jump in. Yeah. I want you to take like imagine you're sitting at your kitchen table and you have a shoe box on the table. Yeah. Inside that shoe box is the people in your life that get a vote.

Okay.

Take her out of that box. Because you're still trying to Like she's doing these things. And you're spending a ton of energy trying to get inside her head and why did she do this? And I bet it's cause of this. And then you're making up a bunch of stories about why she did or didn't. And your stories are probably right. But they aren't affecting her one bit. So you're drinking the Hoping the ex wife is is is feeling pain and you're the one getting sick.

Yeah. Your husband needs to do the same thing. My ex wife does not get a vote. She does not get a vote in our house. Okay. Now what our house what you and your husband sit down and decide to do for his daughter that he loves, regardless if she's married to a woman who's a test pilot for a broom factory. Okay? Regardless of that. All right. So all that that's a given. Okay. That's a s that's a constant in the equation.

Energy you give ex-wife is energy you're taking away from from your home, from your marriage, from your relationship with your kids. Don't give her that.

Yeah, uh it's done. So then as far as the driving school goes, you guys look at it and go, How how much is it by the way?

Is it three hundred bucks?

It's uh twelve hundred. And yeah, we pay child support. We pay her two seventy five.

doesn't matter, doesn't matter None of that matters. We don't have to rehash all the things we do. And we paid half the braces and you didn't. None of that matters. All that matters is do we want to do this? That's all that matters. And we can decide that in context of all these other things, but the two of you just sit down and look at that. Do we want to do this? You don't. That's your vote.

Yeah, I don't.

I survived. And your husband, I don't know. What's he you know, your a and and

No two.

Okay, then because the the the the test pilot for a broom factory's teaching her sixteen year old to be a travel agent for guilt trips. Daddy, I can't get a driver's license'cause you won't help. Bull crap. You could get like a job and stuff, kid. Or you could talk to your mother who could pay for it. There's an idea. And so no, we're not able to do that right now. I'm sorry.

But I but I would tell the kid It's it i we have reasons for you. We don't think this school is necessary. You're a great driver already. We've been driving with you for a year with your learner's permit. We like or we think you need to have some skin in the game. Somebody else is paying your insurance. Somebody else is buying you a car. Somebody else is paying your gas. We think you should own this one.

And by the way, if the ex-wife was completely out of the picture and she lived in your house 100% of the time and it was your actual kid, it needs to be the same decision.

That's it.

Okay. Okay.

Otherwise, you're gonna end up penalizing this kid trying to get back at at X. You're gonna become the person that you're frustrated with right now.

Yeah, that's exactly right. That's exactly right. So yeah, I think you and your husband just sit down and say, Do we want to do this? And if the answer is no, then how can we help? We can coach you, we can share you on. But um, you know, your mom's paying for the insurance and um she's the one that's actually gonna get the break on the insurance because if you go through driving school you get less insurance for a sixteen year old.

Well here's what's funny. I'm sitting here in real time. Three hundred bucks is what I pay. When I was

Well say that there were dinosaurs in the road.

Exactly. I know. I had to pull a rope to start the car I drove around in. And I just realized my wife when we paid we paid for my son, he turned sixteen soon to go to driving school. I the number in my head I was like, Of course, yeah. I thought it was three hundred bucks. I didn't know it was twelve hundred dollars.

Now you gotta go look up and see what you pick.

See what I just paid for this thing. Yeah. It sounds like it's being taught by a Formula One driver, but that just may be what the cost of

Yeah, well that's the difference of three hundred back then and twelve hundred now. Yeah.

Blasted inflation.

Yeah, that's it. So yeah, I but the thing is, John, the the the teaching is everyone, you have to stop in the middle of these things and go instead of replaying these all these scenes over and over and over in your head about the braces and everything else and just go and and she tell you know, we didn't hear from her and then she texted us and she got the kid to text us and All that really doesn't matter. None of that really matters. Because the kid doesn't even get a vote.

Sure.

They can have a wish.

have an opinion.

That's different than a vote.

But I don't have to think about it.

And I think a gr a sign of great st like sturdy parenting is there's seasons when your kids don't like you. That means you're doing it right. If you're if you're parenting so that your kids always like you, you're gonna find yourself in some real dangerous territory. And worse, your kids gonna find themselves in some dangerous messes. Like part of parenting is saying, here's why we're doing this and It's okay.

And in addition to that, if they're teenagers, your job is to also embarrass them for the right.

With all of your

Yeah. With all possible energy embarrass them. Exactly. Find some way to give them a ridiculous hug and a kiss at the in front of all their friends.

On behalf of mental health practitioners across this great country, embarrass your kids a lot'cause we need your future business. Yeah, it's good. My I I Dave, I I don't know what to do. My daughter's in fourth grade. I can embarrass her by just smiling.

He hit the ball back across the biggest.

At the dinner table I made a crash joke, but it was a good one. And you don't know shame until your fifteen year old looks at you without a smile and goes, Dad, when are you gonna grow up? Well played, son. Well played. And he was right too. That was the worst part.

I'm gonna

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Alright, this is an awesome question, Dave. Today's question comes from Megan in New Jersey. Megan writes, I was recently in a car accident and my vehicle was totaled. My emergency fund paid for my hospital bill and my parents lent me five grand so I could buy a reliable used car. Most of my remaining debts are smaller than they're loaned to me, but I hate owing them money.

Yeah, I understand.

No kidding.

That's good. Yeah. So Megan, we list our debts smallest to largest, pay minimum payments on everything but the little one and attack the little one first.

That would and you know, I am guessing you're you said credit cards and five thousand, so I'm guessing there's a l lots of little ones or a few little ones that total up to five thousand. So you would knock those out first and then you would knock this out. The good news is the ten thousand dollars from now you're done except for student loans. And so that's a really, really aggressive part time job for just a few months.

Just to like like enchannel that

Yeah.

Converted.

Discomfort right at those credit cards. First, cut them up and then list them and get yourself on a super tight budget. Like beans and rice, rice and beans, and um, you know, and then add income and look around. What can I sell? What can I sell? Now here's another thing I want to throw out that's not asked here, but um It's a five thousand dollar car, so it m the answer might be that she didn't have insurance on it.

Replace it.

And go further into debt. So I'm guessing though that maybe she did not have collision on a five thousand dollar car and so when it got total, it was just lost it. Sure. She just lost the money.

And I wanna add something else that's not in here. And this is coming from a parent who's my son's about to turn sixteen. Like there's a chance this is me, right? I hope not, but It can feel like you're helping bail out your kid when you loan'em five grand. I would much rather her parents give her five grand.

Yeah. from our perspective here from almost forty years of doing this, helping people with their money and and and clean up money messes that they have made. I'll make a bold statement. Parents should never, under any circumstances, loan their children money.

I second that.

Period. As a matter of fact, you should not loan any relatives money under any circumstances. Period. If you have the money to help them and you want them to have the money, give it to them. If you're not willing to give it to them, shut up. But I wanna be paid back after I helped you with your misfortune, and I'm gonna feel good about me when you pay me back after I helped you with your misfortune. That's pass Accords, people.

The interest payment on that is your relationship.

Yeah.

Yeah.

Leaves notches in the belt at a minimum. Yeah. Wow.

Um I have a interesting uh dynamic going on. So um we own a small rental home that we are close to having paid off and it's probably worth about a hundred and seventy five at the current market. Um we owe about fifteen thousand left on it. Um on our our current home and land that well we we the land that the current home that we live in is on is is uh we owe fifteen thousand left on that.

How old are you? How old are you?

I am forty four.

Okay.

So um you know, and with that we wouldn't have to worry about paying for a home ever again because we've been doing

I wouldn't have done that, but we're there. How can we help?

Yeah, no no doubt. Um So I have no appreciable uh retirement savings, uh obviously for putting all those eggs in that basket. Right, I understand. Um obviously that's some level of stressful for me. Mm-hmm. And uh um you know, here soon enough there'll be, you know wide open rental income that will come in associated with that will have, you know, freedom from the mortgages and things like that.

What what does the uh what does the house rent for?

Um currently it's at a thousand. I have a It it's it's valuable more but I have a uh I have a widow in there and I I can't charge her any more than we currently are. Bye.

OK, so you've got an asset that's not maximized. OK, that's fair.

Yes, correct. Yep. All right. Correct. And um You know, I'm looking I'm just juggling around this and my wife and I have been kicking it around, um me mostly me kicking it, most me mo mostly her telling me not to do it. Um of selling it and investing that money then into Um, some form of retirement savings and I wanted some feedback on that instead.

Um Well, n not counting the uh arrangement, which I I uh endorse you helping a widow, endorse anyone helping a widow, that's biblical. Um uh and you're making you know, about seven percent on your money'cause a hundred and seventy five thousand you're making twelve thousand minus expenses, so you're probably making probably five percent on your money on this rental house, plus it's going up in value.

Well I do have payments on um the property that that we built on to our country.

much to y'all on it.

Uh fifteen thousand.

I know, but you're gonna be done in just a few months on both of them, you told me, right?

Yes.

That's what I was calculating. So no, no, no. I'm talking about a few months from now you're a hundred percent debt free. What's your household income?

Uh about an eighty five to ninety.

Okay. So start saving twenty percent of your income into good retirement or twenty five percent of your income into good retirement. You don't even have a stinking house payment. And put fill up your four oh one K, fill up some Roth IRAs and get with a good Smart Vester Pro at Ramsey Solutions and that account alone will be millions of dollars when you get when you're sixty five, twenty five years from now. And and and keep the houses.

Okay.

You don't have to give up the house to have a retirement plan. You got plenty of time and you have a good income and you have no debt.

But make s make space make space in the middle of your chest for this feeling that's gonna come. I thought that if I had a house outright and I had a rental house outright, that then me and my wife could just do whatever we wanted with our money.

Nope.

And you have a debt to pay to future you.

Of course.

Right. And so you're still gonna have to watch your income. You're still gonna be putting a sizeable chunk away. It's not gonna go it's not gonna go to a house payment, but it is gonna go to future you. Right. And so expect to feel like, oh man, I thought we were gonna be free of all this budgeting and all No Man, we still gotta stay tight on it because we're gonna get eighty-five or ninety years old one day.

Yeah, as the the same intensity you were using, or maybe not quite as much, to clear up these two mortgages, we're just gonna turn most of that cash flow and some of that intensity into a retirement planning system, into four oh one case and Roth IRAs with your Smart Vester Pro. And promise you do, that's gonna be millions of dollars, that one thing alone.

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Dr. John Deloney, best selling author Ramsey personality, is my co-host today. Clay is in Harrisburg, Pennsylvania. Hi, Clay. How are you?

Hi, Dave. Good. How about you guys?

Better than I deserve. How can I help?

Yeah. So um just kinda really overwhelmed. Um don't really know how to attack my debt. Um a majority of my income's going to rent and a car. And um it I need both of those things. I need a place to live and I need a car to drive to work. So yeah. Um just need help getting out of here.

Gotcha. What do you make?

Um I make about twenty two hundred a month.

Okay.

What do you do?

Um so I currently work in str construction. Mm-hmm.

How old are you?

Thirty three.

And uh how much do you owe on your car?

Uh it's a little under twenty thousand. Mm-hmm. Sorry, I did make a little bit more, um, but a portion of my wages are going to some tax debt and student debt.

Yeah, okay. And um How much is your rent?

We're uh seven fifty.

Okay.

Currently also dealing with a pest issue that's taking up uh some more of the income.

A pest issue.

You rent, brother.

Your landlord would be taking care of the pest issue.

It's i like there's not an easy way to say this, but you gotta make a lot more money.

Okay.

What do you what do you do on a construction site?

Uh so I work in an office, like a design office on the and uh yeah, we provide products.

But I mean, are you in some sort of apprenticeship that this is all gonna double and triple and quadruple in two years, four years, or is this kind of it for you?

Um, that's kinda it. Uh before that I worked in behavioral health as uh like a tech.

Mm.

Um, just kinda ran out of options there and looked for another field and construction was kinda up and Some good opportunity there.

Well but the opportunity construction is are you a builder, are you a craftsman, right? But you're the guy servicing those guys, right? Yeah.

I get the project in the door.

Yeah. So, um I mean there's several things going on, but um Uh w one of them is that you just have an income problem, for sure. And there's two ways to fix that. Uh one is the extra part time job in the meantime, while you're developing a career track where you go instead of making thirty thousand dollars a year, you go try to find a way to make ninety.

Ja.

How how how much could you get for that car if you sold it today?

Um so I did a quick like estimate on um Carvana and they offered nine albums.

Yeah, I bet I did.

Look up Kelly Blue Book what the private party sale value is.

Yeah, and that's probably more like sixteen. Yeah. And then then dig up the difference and let's get the car sold. Yes, you need a car to get to work. No, you don't need a twenty thousand dollar car to get to work.

Clay, I uh here's what I want I want you to reframe this. The way you describe your life as is as though this is happening to you. And I want you to visualize yourself getting in the driver's seat of your own freaking life. And hitting the gas and going forward that way. Your your taxes didn't just not pay themselves.

Captain of your own destiny.

Your taxes didn't just not pay themselves. Your boss is paying you what you're accepting. Um, you're you bought a car that like I want you to own this thing. And that's the only way you're gonna get out of it because cause life just keeps happening to me over and over. Get in the driver's seat and say, what do I want this thing to look like in a year, two years? And let's head that way a thousand miles an hour, man.

Yeah. The people that um that that get along in this world that that we call successful are the ones that leave the cave, kill something and drag it home. They don't sit in the cave and wait on a duck to fly in already cooked. Mm. And that's what you're talking about. Is Dr. Stephen Covey's book It's called The Seven Habits of Highly Effective People.

Dave, I was gonna say... Again, I don't want to toot my own horn here, but I was a dean of students at the law school in Texas. I drove a$3,500 truck. And when I got my job here at Belmont, Nashville, I drove a seventeen thousand. I really upgraded, man, to seventeen thousand.

Making a lot more than

Right, so it's like listen man, like Dry what you can afford.

Yeah.

Happen to your life. You gotta I gotta do this. You don't man, especially when it comes to depreciating assets.

Hey guys, Dave Ramsey here. Every day on the show we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramzysolutions.com and try AskRamsey today. That's ramsysolutions.com.

Free. Go to ramseysolutions.com/slash taxes. Shelley is in Washington, D.C. Hi, Shelley. How are you?

I'm doing good. How are you?

Better than I deserve. What's up?

All right. So I'm I'm pretty new to watching your show and so I've just really wanted to reach out because me and my husband are in a big mess financially and we can't seem to get on the same page. Um I I'll kind of run down some numbers for you. It's pretty bad. Um We have student loan debt for my student loan debt fifty two thousand. We have federal tax debt twelve thousand.

So you have a business that is failing.

Yes, the business has been struggling in the past.

Yeah, you're not you're not making money and you've been financing it with all these loans.

Correct. Having too many people in payroll and not having

You're not making a profit for whatever reason and you've been financing it for how long? How long's it been since you made a profit?

Well, I mean technically w I did make a profit. Um these last two years, but obviously I'm paying loans so the interest um is obviously the only part I can deduct, but cash flow, I I don't have any cash.

Yeah, you're but you've been using I mean you you didn't use these credit cards, these business loans, these personal loans, these other credit cards all to finance the purchase of the business. You've been operating it at a loss and feeding it.

Yes, so for m for my portion, um yes, I've been feeding the business with the debt.

And all of this debt was created by this business.

No, no. My husband, he took... He had a idea to pull money balance transfers off of his cards and his personal loans to put it in the stock market to invest. Um so the first year he made a lot of money. He had a big tax bill. the second year we had a lot that we owed and um he's never repaid those loans and credit cards that he pulled money off of. So His debt is about three hundred and sixty of this, which is from him only to credit and got a business loan, um and business credit cards. So

So does anybody around there work? Yes. Like for a job to make money?

My my husband has a W T job.

What does he make?

About one twenty a year.

Yeah. And what was the profit on your business that you paid taxes on last year?

Tw fifty seven thousand.

Okay.

Do y'all both agree that y'all have a mess? Do y'all both agree that you want it to go away?

Yes. Okay. It's just the method of so my husband got a bonus for about twelve thousand and so since I've been listening to you I was like, Well don't we do the snowball, pay these uh debts, the smaller debts off? to free up about six hundred dollars a month. Um, he he he wants to pay on a w a personal loan, that's for forty thousand dollars. and he wanted to put it towards that to get the balance down. But as soon as he was we were arguing about it and then he

The money that he made on the stock trades he put back into the stock market and lost it.

So he was day trading.

He never he never paid any of the like

I know he didn't pay the taxes, but also you said he made a profit that caused taxation. That's where taxes come from. And then that profit He might not not which mean he m not only made the money back, so he borrowed sixty thousand on a credit card or whatever, and he put it in the market, he got the sixty thousand back plus money, didn't pay the taxes and put all of that back into the market and then lost it.

So the first year that he did that, which would have been twenty twenty, he did we did pay our tax bill. It was like twenty five thousand I think it was.

Yeah.

he had the money and we paid it in full that year.

Now the money that he made in the stock market, where did it go? He put it back in the market and lost it, didn't he?

Yeah.

Okay, that's all I wanna know. You don't have any money is what I'm trying to establish.

Yeah.

That's correct. None of the money that was made is there anymore. It's all gone. Okay. Do you own anything other than your home?

Um Uh he his cars. Um he doesn't have a loan on the net. And then I have uh vehicles that I don't have a loan on.

Okay. So your business doesn't have any assets.

Oh it does. Sorry. It's it does. I have desks, computers, tables, mm, laptops.

What what's your gross revenues on the business?

Three hundred and thirty for twenty five.

Okay. How many employees?

Right now I'm down to one. Um I I let them go um

What do you do? What what what's your trade? What's your skill?

I have a tax and accounting business.

Couldn't you make more than fifty seven working for somebody else?

I actually did um the end of twenty four I got a job, a full time job, uh making one ten and then I got laid off in gin in August.

ok you need to go get him out

Yeah. Yeah.

Yeah.'Cause you need the income to be able to income to be able to learn lean into this. Okay. And then back to your original question, y'all are arguing about what to pay off first and so forth. Um not counting your mortgage. You have a long road ahead of you. So the first thing we need to do is establish two principles before we begin to attack the debt. Principle number one is no more day trading. Ninety-seven percent of day traders over a three-year period of time lose money.

Can I throw a third principle in, Dave? Mm-hmm. Third principle, Shelly, is for this to work, you're gonna need all the like synchronicity and momentum that y'all two can muster together. And so y'all are gonna have to decide this is our debt.

We both have done some dump things.

Both done this and we're both gonna attack this stuff together. You you will never conquer this thing if he's responsible for paying off his and you try to pay off.

Exactly. Then pull the mortgage out of the equation, list all of these debts individually. smallest to largest and begin to pay them in that order after the twelve thousand dollar tax bill is paid. Twelve thousand dollar tax bill's the first thing and that should have been paid out of his bonus or if he's got that forty thousand dollar bonus laying there, pay the IRS.

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Dave is in Pittsburgh. Hey Dave, how are ya?

I'm doing good. Thank you for taking the call.

Sure, how can we help?

So I'm a huge fan with you guys. I've been watching for five years. I just wanna say you guys are doing absolutely miracle work. So the question is right now me and my wife are thinking about relocating and that we are thinking about having a kid as well within one year to a year and a half. So art planning definitely want to buy a house and to build the good memories for our future kids. Um, so they can have a good memory and kinda build a good foundation with that.

Okay, so you don't have the cash.

Uh so right now uh we have uh my salary is seventy K and she's doing fifty five K. We possibly net around

Do you have the money in a pile to pay cash for the house? That's not really an option, is it?

There is, there is. So right now, uh you're gonna be very happy to hear this. Um I graduate my grad school and I did pay it off

Oh my

uh student loan debt with around a hundred K. And then we both net around one point two million, it just investing in the mutual fund ETF bonds and stocks.

So you have a million dollars in mutual funds and bonds and stocks.

Yeah, that's approximately right. Yeah, depending on the valuation.

Bro, lead with that next time.

Yeah, so way to go. So um no, I would not borrow money when I have a million dollars in investments. I would just take some of that and buy me a house.

You know why, Dave? Cause you have a million dollars.

So what how expensive a home are you thinking about buying, sir?

So we're looking at three hundred fifty to three hundred eighty K.

Perfect. So three hundred and fifty leaves you six hundred and fifty in investments. You have no house payment. There's no strain on your budget. Your wife can stay home with the baby. That's awesome though.

Yeah.

Why would you not do that?

Yeah, help us out.

Why would you not automatically do that?

Pitch us on why this is a scary ideal.

Bri, I think I'm just running the two scenario that usually the market return ten percent, but however, you know, when you pay down a house, uh you're gonna guarantee return back three point five percent on the real estate and also you have to avoid paying the same

Right. And and her plan is to not work once we

You missed the point. You just took out a house payment and put her in a job for your little investment scheme. That you think is real, but you left out the fact that you're taking on risk. And the peace that when your head hits the pillow it goes to sleep. When you have no payments, you make different decisions than when you have a house payment. So don't do that to your family. You have worked very hard and done a very good job saving money. Use that money to buy a house or don't buy a house.

So right now we are renting. Okay. We are waiting we are waiting for

And what is your income, Dave?

Uh so I do seventy K.

A year.

Yeah.

How did you get a million two with that income?

Uh I think there was uh I got lucky with some of the investment and also fortunate and unfortunate because we got some inheritance.

How much inheritance did you get?

Uh she roughly got around two hundred to three hundred and kinda grew. Uh, and then I got around three hundred, four hundred and kinda grew in the boat kinda get around one male.

Okay, there it is. All right. So whoever whoever passed away and left you all this money bought you your first home and that's their blessing to you. And you pay cash for it. And that's what you're gonna do. If you're smart, there's no way you need to be playing around with all this stuff. Emily's in Denver. Hi Emily, how are you?

Good. How are you?

Better than I deserve. How can I help?

Hey, so um I've carried most of the financial responsibility in my marriage. They almost like

Is he using again, Emily?

Is he what?

Is he using again?

I don't know.

You know. You know. What do you think?

Don't I d I think his behavior doesn't line up, but I can't prove anything.

If if behavior is a language, what's he telling you?

Yeah.

Yeah, he's back. Yeah.

He wants he wants the addiction. He's in the addiction. Yeah. Yeah. An addict can have no access to money. Yeah. None.

Okay.

And somebody in recovery knows that. Somebody who's back to using again and you've been down this road with him before, are world class manipulators, world class distorters of reality, and they make you feel like you're crazy, right?

Yeah. Yeah. Very much so.

Yeah. So here's the deal. Um you're gonna get I if if I'm you, you sit down with him and say, Okay, we're gonna get you back into rehab. We'll get you back in some help and you're relinquishing all control of all money until you've been dry for two years.

And you need to put a freeze on your credit report the second you hang up this phone call, and that way nobody else can add you to any more debt.

How do I do that?

Freeze it.

And it will do it across all three of the uh crediting re like credit reporting bureaus. Yeah.

But you're you're y this is hardcore kiddo. The only chance he has is um and the only chance your marriage has is for him to stop using and the first step is a complete confrontation. And, you know, he gets into a program. If he's not willing to get into a program, there's nothing you can do to save your marriage or your money. You have to get away from him as fast as you can. Because a hundred percent of addicts burn down their world. A hundred percent of them are broke.

Yeah.

Yeah. And you know, I know you don't want it to be true. We don't want it to be true either, but we also don't want you your don't want it to be true thing to allow you to walk around and act like it's not happening. It's happening.

Yeah, it drives me crazy'cause I can't prove it.

I don't have to prove it.

We've got all the signs in front of us. And and by the way, if if he's not using Let's go one step uh uh darker. Um

Where's he doing with the money?

He absolutely doesn't care about your marriage, about how you feel, your safety at all.

'Cause he's going crazy with his stuff. Right.

You what I'm saying? Ja, genau.

Thank you.

If he's not using then and he's got some

Yeah, some other issues.

Some character, yeah, some challenges.

Yeah.

I you're gonna need to get yourself your own checking account and get on your online bills. I'm sure you already have this, but where you're paying that you got electricity and light and why c you're gonna take ownership of this for a season.

You have to take over everything. You have to take your name off of any his name off of everything. He cannot have access to money unless you hand him cash.

I hate this for you.

in the tank and walks into the store and pays for it and walks back out to the car, like we used to do.

I did that recently. They took it.

I know, it's amazing.

It was awesome.

That little walk changes your what you pay for gas.

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Our scripture of the day, Matthew six twenty six, look at the birds of the air. They do not sow or reap or store away in barns, and yet your heavenly father feeds them. Are you not much more valuable than they? Earl Wilson said money in the bank is like toothpaste in the tube. Easy to take out, hard to put back.

I like that.

It's pretty cute. Mary is in Minneapolis. Hi Mary, how are you?

I'm good. Thank you, Dave, for taking my call.

Sure, how can we help?

Well, I have a little bit of a dilemma. I became a widow four years ago at the age of thirty eight.

Wow, man.

And my husband was a farmer. He was fifty one. Um, and he left me with quite a bit of assets. He left me with farmland and of course our home and then a million dollar life insurance policy on top of that. Um

What's the... What's the... What's the...

Yeah, against the farmland.

Oh there's debt against the farmland.

How much? Um close to two million. It's about one point eight.

And what's the farmland worth?

Around six million.

So what has the last four years looked like?

Um, I continued to run the farm for three years. I had a farmhand that my husband trusted. He worked with him for a very long time. And he took over the farm. I took over the business and we ran it for three years. um, successfully. We did we did very well. Um, and then he bought the farm from me a year ago, twenty twenty five, January twenty twenty five. So I sold the farm I didn't sell any of the farmland, but I sold the farm site and the equipment to him.

I'm sorry, what is the difference in a farmland and a farm site?

Well the farm site has the shop, the there's a home on it, there's um hog barns and then it's just where it's just the home base for the farm. And then the farm land is what they grow the crops in.

So you own the land still.

Eye on the land, yes.

And you have the debt still.

And I still have some Zegdan's gland, yes.

Okay. So where are we where are we today and how can I help?

So I'm looking at trying to pay down some of this debt with the life insurance proceeds. I have about one point one million in in in cash. It's in a it's in a investment portfolio. Um, but I wanted to pay down some of these smaller debts and I just was wondering if this is the right thing to do with this money.

What are the smaller debts?

The smaller ones, so there's a land there's one land mortgage for forty thousand. Um my home mortgage is eighty five thousand and then the Um there's an SBA loan for$125,000.

Okay. And is there a business separate from the actual farm operation?

Um no. Okay.

All right. So the SBA loan is associated with the farm.

It is, yeah.

Okay. Now when you sold the other piece of ground the other day to your farmhand, what did it sell for and where's that money?

It sold for eight hundred thousand and that is a contract for deed with him. So that's where my monthly my income comes from, is that contract for deed.

Okay. So he's paying you how much a month?

Um seventy two thousand or seventy two hundred, sorry.

Okay.

Is he also leasing the land from you that he farms?

He is. He's also leasing the land and there's a ten year lease on it. So he will be farm it's five hundred acres. He'll be farming it for the next five hundred or f ten years. Um and that brings in about a hundred and twenty thousand a year.

But he also put himself in kind of a pickle because if you sell this land or if in ten years you want to do something else, he's bought this farm equipment, but he won't have anything to farm, right?

Right. He farms he farms around two thousand acres, so he has some contracts with other farm uh landowners. So he

So the balance on the farmland is now down to what?

The balance on the farmland, let's see. So I have one point one million in one piece of land and then there's three hundred and eighty three thousand in another piece. And then the smaller one is just forty thousand. I gotcha.

Okay. All right. Okay. So I think I've got the picture right. Um, if I do, uh what I would do is to do what you're suggesting. I'd take two hundred and fifty thousand of your million and pay off the SBA and the eighty five and the forty, right? You're a hundred percent debt free except for the two land mortgages.

Thank you.

And you have an income of seventy two hundred, which you can easily live on. Yes. And a hundred percent of the profits from the farm go to reduced debt at the f on the land.

Yes. Yes. So the the profits coming from the uh land, the land rent is covering the le the payments for the

No, not just the payments. You're making more than that. In a g in a given crop year on the acreage, your portion when he farms it on your behalf, your portion is how much? It was three hundred grand, wasn't it? Or a hundred and fifty grand.

Uh yes, a hundred and twenty, I guess.

Hundred twenty, okay. And you have three hundred thousand on the small mortgage and a million on the other mortgage. So in two years, the small mortgage is gone because you're gonna put that whole hundred and twenty on it.

Oh, okay. Okay.

And then we're gonna do the same thing until we get rid of that a whole million. And so by the time his lease is up, his tenure lease is up, before it's up, this farmland's gonna be free and clear.

Yes.

And then you're sitting on a fifteen or twenty million dollar net worth at that point.

Correct. Okay.

Because the value of the land will have gone up plus your investments will have gone up.'Cause you got six hundred fifty invested that you're not touching either because you're living off the seventy two hundred from the land contract on when you sold him the property. Did I get that right?

You did, yes. Yep, that sounds that sounds about right.

Can I throw an alternative reality t at you? I sp I spent a big chunk of my life out in West Texas where there's cotton farmers and cattle farmers. The the conversations I had with those, especially those older men The the thing that I felt at the end of the day was giving them their coronary challenges was the d debt on their farms. It took one bad year to start a debt cycle that they could really never ever get out of.

Yeah.

There is not. No, I I w I'm a I'm not opposed to selling maybe a hundred of the acres um down the road if I i if I run into that issue. I don't think I will, but I I don't wanna sell the land. I wanna hold on to it. It was it's family land it's my husband's family land and some of it was passed down. He actually bought two hundred of the acres right be like a year before he passed away. And that's where that one point one million came in. But

I'm more nervous about this than you are, so I'll keep that to myself. But just man, I I just watching those farmers just get crazy.

Get rid of all the little mosquito debts right now, and then we've just got two big ones to knock and w and the smaller one of those will be gone in two more years. So pretty quickly we're down to and the land goes up in value. So we got an eight million two years from now we have an eight million dollar piece of ground.

And what's your husband's name? Your ex yeah, I mean your husband who passed away? Kevin, pretty awesome guy.

Oh my gosh, he was amazing, yes. He was an amazing farmer, an amazing husband, a great dad. Yeah, he was he was he was a great guy.

I just always wanna take a moment and a honor somebody by saying their name who passed away, but I also wanna honor a husband who gave his wife the privilege of You got to grieve for as long as you wanted to.

Yeah. Million dollar life insurance policy and a business that was right side up.

You got to be sad for a season, not worry about where your next meal is gonna come from, and that's noble and honorable and and good for Kevin, man. Yeah.

He's a good man. He took care of his wife. And she took care of business afterwards. Pretty incredible. The dynamic duo there. Yeah. Yeah. Very cool. Congratulations, Mary. We're proud of you. Very cool. Thanks for giving us the honor of talking that through with you. Yeah. Pretty crazy. So yeah, just always be looking for a