Debt Is Never a Blessing, It's Always a Burden

From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work

that they love, and create amazing relationships.

I'm George Campbell, joined by one of my best buds, Dr. John Deloney, host of The Dr. John

Deloney Show, and we're taking your calls at 888-825-5225.

You call up, we'll talk about your life, your money, your relationships, your mental health

issues, boundary issues, whatever you want, we're going to air it out in front of everyone

for the good of America.

Is that aggressive enough, John?

Is that a big enough promise?

It's quite the lofty promise, that's right.

We'll see if we can accomplish it today.

Mason kicks us off in Springfield, Missouri.

What is going on, Mason?

Hi, guys.

Thanks for taking my call.

Sure.

I'm actually calling on behalf of my sister-in-law.

She had a stroke three years ago at the age of 23, and has since been trying to get back

into the job market, and she just simply can't get herself back to normal, and has not changed

her spending habits from when she was working two jobs 80 hours a week.

She was a hard worker, and now she's stuck, and she's taking on loans, and she doesn't

know whether she needs to file.

She's going to have to go bankrupt, a bankruptcy, or if there's another route that she can go.

There's always another route.

The question is, how is she, let's separate the two from financial problems to her health.

How is she doing health-wise?

She can't speak well.

She pretty much mixes her sentences with ums and uhs nonstop, and has to have assistance

with reminding her of different words, and then her physicals, about the right side of

her body.

A portion of it does not work.

She can't move her arm well.

She can walk, but she is frequently stumbling at times, and happens to pull herself up or

get assistance to get up, and that's about the extent of it, her health.

She's still going through therapy, but it's based on what the doctor has said.

He does not have any expectations that she'll recover past that point.

What is she doing for work right now?

She's not.

She's applied.

She's been to multiple places, and every time she goes to do the interview, it pretty

much gets shut down during the interview.

I would check out, I don't know the resources there in Springfield, but I would check out

and call around and see.

Sometimes there are entry-level programs, maybe through a disability rights program,

or some sort of state-run program or local program there in Springfield, which, here's

what we're looking for.

We're looking for an on-ramp.

So that she can, A, get her confidence back, B, figure out the actual limitations in a

work setting, because those are different than at home sometimes, and then from there,

you can springboard to another job that might pay more, that might be in a more established

place.

So that's number one.

Filing bankruptcy while somebody is still spending out of control is like Congress forgiving

student loans and making them in the same month.

Right?

Like, it's not a solution.

The solution number one is like, let's stop the bleeding.

Why won't she stop spending?

Or where is she getting money to spend?

Let me ask that.

So her spending habits come from when she was working constantly.

She had enough to pay for her lifestyle and then was able to save a lot of money, and

she had a boyfriend.

Her and her boyfriend would essentially just buy whatever they...

They wanted to, and when she had the stroke, she lost both her jobs, and then now she's

on disability, but she hasn't really...

She has reduced a lot of her spending, but it's still at a specific lifestyle that she

enjoyed before her stroke, and I think that's the biggest portion of it.

And then the money, so it would be her boyfriend who works, and then her disability that she

gets.

Have you talked to her?

Uh, yes.

How'd that go?

Are you referring to talk to her about the spending habits?

Yes.

Yeah, because here's the hardest part of all this.

At the end of the day, she's an adult.

Yes.

And unless you have financial power of attorney, you got no say in her finances.

She didn't have to do anything she didn't want to do, and that's hard, and it's miserable,

and it's heartbreaking and all those things, but it just is.

Yeah, that's a conversation that we had just after her stroke about...

My wife and I...

...sought to try to assist with managing her finances.

We got some pushback from a lot of the family, but they've come to us with assistance and

a lot of different things.

And then when it came to spending less, I would refer to the government example that

you gave.

It just was not interested in cutting costs and reducing spending as much as it was.

How can I help get out of this hole?

How can I get out of this hole?

So it may be that the solution out of this situation for you is...

To you and your wife, draw some pretty firm boundaries inside your home, and knowing

that this ship will run aground at some point.

Yeah, yeah.

And I think the biggest reason is there's some issues with her and her boyfriend, and

now she's needing to leave him, but she can't really go anywhere because she's tied to an

RV that they live in that is under her name, and she can't afford on her own.

Yeah.

And she could sell it.

She could trade you some other things, but she's made some choices and refused...

Just help from other adults.

If you and your wife choose, the only way I've seen it be successful is if somebody

steps in and says, I need some help, and you're able to say, okay, here is my conditions

for help, and I'm not going to enable.

Here's what help would look like if you want to participate.

And you and your wife make that decision beforehand.

It's very hard to do in the moment because it sometimes includes, you're not there for

me, you hate me, I knew I couldn't...

All that kind of stuff that just is real personal and attacks.

It's hard to hold boundaries in the moment if you haven't thought through them clearly

on the other side.

I mean, on the front end, right?

Yes.

Yeah, that's the best case scenario.

She doesn't have to do anything you say.

She hasn't for a long time, and until she says, hey, I need some help, and I'm willing

to accept the help that you'll provide, I think what you can do is let her know that

you love her and that you'll be there when she decides to call.

I don't know another option.

You know what I mean?

If you give her a book, it's just going to sit on the shelf.

And maybe one day she'll pick it up, but we can't force her to go, you're going to learn

this and you're going to do something about it.

Yes, and this is actually a lesson we've already learned in this process.

I think it was more of a...

And even if we came to her with this advice, which is an advice that we've given before,

it has been more of a, that's a really good idea, and that was pretty much the extent

of the response from her.

How much of that is boyfriend?

Say that again, I'm sorry.

How much is the lack of action on the back end is boyfriend?

Would you say, you mean how much does he provide or...

No, like you guys sit down with her and say, hey, here's reality, here's the amount of

money that you're spending, we want to help you.

And she's like, that sounds amazing.

And then she tells him, he's like, that's stupid.

Yeah, he's not really involved in the conversation because she's trying to get away from him

due to certain circumstances that are nothing violent or anything.

It may have, you know, I think it goes back to the thing that you guys mentioned about

not putting yourself in front of her.

It's a financial situation that requires the income of people that you don't have a,

you may not have a long-term established relationship, such as marriage.

And there's no marriage between them.

And so...

Well, aside from her health issues, she's made a lot of choices, and it's going to be

hard to unwind all of this unless she really wants to, on top of fixing the health issues.

So I hope she does, and I hope you can help her with some resources.

But like John said, I wish I could just wave a wand and change people because I love them.

Adults can't change other adults.

It's heartbreaking.

That's one of the hardest truths to learn in life.

But thanks for the call, Mason.

You're a great brother, and I wish you and her well on the financial journey.

This is The Ramsey Show.

So here's a quick math refresher.

There are only 24 hours in a day, so your business needs to streamline tasks that are

time suckers and focus on activities that make money.

So to reduce headaches as they scale, smart businesses use NetSuite.

By Oracle, the number one cloud financial system, NetSuite helps you improve efficiency

by bringing all your major business processes into one platform.

So join the more than 37,000 smart businesses like Ramsey Solutions that have done the math

and graduated to NetSuite.

And right now, you can download NetSuite's KPI checklist absolutely free at NetSuite.com

slash Ramsey.

That's NetSuite.com slash Ramsey.

This is The Ramsey Show.

I'm George Campbell, joined by Dr. John Bologna.

We're taking your calls at 888-825-5225.

Danielle joins us up next in Milwaukee.

Danielle, welcome to The Ramsey Show.

Hi, thanks for having me.

Absolutely.

How can John and I help?

Well, I'm calling about a question regarding paying for my father's phone bill.

So basically, my dad lives below the poverty line due to his own life choices.

I've helped him financially throughout the years.

And currently, I am just paying his phone bill.

And I want to help him.

And this has been a way that I've been able to do so.

But he has been making some questionable choices.

And I don't want to parent him.

And I'm not sure if this is the right thing for me to be doing.

Yeah, I'm happy to give more color to that.

It's family.

It's kind of complicated.

Yeah, it always feels so complicated when you're in it.

And in Georgia, in my seat, it's usually way less complicated.

Can I ask you a hard question?

Yes.

Are you paying his phone bill for him?

For him or for you?

For him.

I know, but are you paying the bill for him or for you?

Well, I guess I want him to be okay.

So I guess for me in that regard.

Has he listened to any of the wisdom or advice you've given him over the years?

No, not really.

If behavior is a language, what has he been telling you for a long time?

For a long, long time.

Well, I guess that he doesn't value my input.

Yeah.

He'll take your money.

He'll take your phone bill.

Cool.

But when it comes to, I want to live a different life, a healthier life, a safer life, a more loving life.

Yeah, I don't really care about that.

I'm especially not going to take that crap from you.

And then with a healthy dose of who do you think you are?

I'm your dad.

How long have you been chasing him?

Your whole life?

No.

I would say when my parents were married for 35 years and once they divorced, I kind of, not right away,

but as he just continued to make bad choices, I sort of, unbeknownst to me, took the role of my mom.

Yeah, there you go.

Yeah.

Yeah, I know.

That's a weird position to be in.

And while you chose to be there, he had a part in putting you there.

And you have a choice also to get out of this and to say, hey, dad, listen, I can't cover your phone bill anymore.

What would happen if that were the case?

What would the conversation be like?

At this point, it's going to be me probably writing him a letter.

We, I've tried to, this is the second time I, you know, I've tried to write him a letter.

I wanted to go out and visit him.

He lives out of state.

And I don't know if he just doesn't want me to visit him or what, but he always has a way of just, you know, bringing, we don't always agree on, you know, kind of everything, right?

And I'm fine to just leave those things out of the conversation, but he has a way of bringing them up and just.

Would you call this relationship transactional at this point?

No.

No, it's not.

I mean, he was a really good dad to me growing up and he's not a bad person.

He just makes really bad choices and doesn't seem to learn from them.

So that's why it's, you know, he's not a bad guy.

Well, it's not about his character, but I'm saying the relationship right now is I pay the bill.

He doesn't really want to see me.

He doesn't want much to do with me, but please keep paying my phone bill and thank you.

It's more nuanced than that.

But I mean.

Yeah, I realize I'm calling you guys asking you for your advice.

I mean, is it more nuanced than that?

Yeah, I really, I really think it is.

I mean, he, you know, expressed that he was excited to see me, but then he's telling me, you know, he's.

I don't want to get into, I don't want to take too much of your time, but, you know, he's, he went through,

he's not even technically divorced the third time, but he is separated, I guess, legally.

And he's started these, like, some kind of dating site.

I don't know what he's doing.

And there's been, you know, people he's been talking to.

And, you know, I thought all of that was behind him now, but he just shared with me that he's been talking to, like, 30-year-old women on some weird encrypted app.

I just don't understand.

And now I feel like he's putting my own safety, like, with my phone account, like, linked to his in jeopardy.

And I'm just, like.

Yeah.

Your gut instinct is right.

And there's more to it than this, too.

Yeah.

I think if to circle back to the first question I asked you is, are you paying this phone bill so that you can sleep at night knowing I tried to preserve my relationship with my dad?

As I watched him slowly, the man that I love, the good dad that I had, as I watched him slowly implode.

His life.

Getting involved with all these people, getting married a bunch of times.

Now he's just slowly just unwinding.

Often we try to hang on because something inside of us says that if there's just we say the right thing or we can just give the right amount of data or just do the right, nice, kind thing that suddenly they'll be like, oh, amazing.

Hey, by the way, can you help me with my love life and my money?

And unfortunately, this call is not going to come.

And so if you want to make if you want to pay his phone bill and just pay his phone bill and make that a part of your life and and not hope for that, that will have an arrow, a relational ROI on it.

Great.

Knock your lights out.

George and I just say, make sure you're not putting on a credit card.

Right.

If you're just tired of being involved with all this and now you're wondering what he's even doing on an encrypted app that's that's linked to you and your bank account.

Dude, let's just write him a letter and say more reason.

I'm a step away from this.

Yeah.

And then you're going to have to spend some time in this scary black hole called grief.

It's not supposed to be like this.

Your parents are married for 34 years.

Yeah.

Here's the spark notes.

If a cell phone bill is propping up the relationship and this is one Jenga piece that knocks the whole thing down, there was never a relationship there.

And that's the hardest, scariest part to face.

Is that whatever was, I know he's a good guy.

He was a great dad, but it's changed.

The relationship's changed.

And I think that's the hardest part to grieve is the guy he was and the guy he is now.

And I know you know this, but I feel, I feel compelled to say it.

You didn't do anything wrong, Daniel.

You've been a good daughter.

There's not a thing.

I know, but there's not a thing you could have done differently in a conversation you didn't have.

He's your dad.

He's a grown man.

He's way older than you.

He's made adult choices.

And like we told the previous caller, there's just nothing harder than watching someone you love flush their life away.

Especially when you're standing there on the bank of the river saying, I can help, I can help.

And they're like, nah, I'll just stay here.

It's heartbreaking.

What is his portion of the cell phone bill?

I'm just curious.

What's the financial amount?

Maybe like 70 bucks.

Or something like that.

So if it was on him to cover 70 bucks from now on, do you think he could do it?

No, I think he'd have to go back to like a flip phone.

Maybe that's the best thing he could do.

That sounds like a great idea for him.

Honestly, ever since he got this iPhone and he's had more time on his hands, I just don't even understand what's going on over there.

Yeah, it might keep him out of jail.

I think it's a good idea.

Seriously.

Yeah.

Something's weird.

Yeah.

I'm so sorry.

I'm so sorry, Daniel.

That is not a fun thing to deal with.

The theme so far of the show, John, has been you cannot change people.

No.

No matter what you want to give them or cover for them, it's not going to make the relationship better and it's not going to solve their problems.

You can create good boundaries.

You can be graceful and merciful and forgiving.

And then you can do the next right thing for you and for your relationship.

And sometimes that's walking away.

Sometimes that's just saying, I'm taking my hands off the wheel.

You're driving.

Cool.

I'll be here when you're ready.

More of your calls coming up.

888-888-8888.

This is The Ramsey Show.

Hey, guys.

George Campbell here.

As a new dad, I see a lot of things in a new light.

The cost of diapers, the value of sleep, and how crucial it is to have a will.

Because if something happens to me, I don't want my family stressing about the details.

And that's why I recommend making a will with Mama Bear Legal Forms.

A will gives you peace of mind knowing things will be taken care of the way you want instead of a random probate judge deciding who gets your fine china.

Or precious moments collection.

Looking at you, Aunt Shirley.

If you think you're too busy, you don't have enough time, no excuses here.

I completed my will in just 20 minutes with their easy online process.

Plus, if something comes up, you can make changes to your will for free for up to six months until you're completely satisfied.

And listen, there's a lot of online will companies out there.

But what's great about Mama Bear is that there's no membership, no subscription, no upselling.

The price is the price.

And if you love a good deal like me, go to MamaBearLegalForms.com right now.

And save 20% with promo code Ramsey.

That's MamaBearLegalForms.com, promo code Ramsey.

Welcome back to the Ramsey Show.

I'm George Campbell joined by best-selling author Dr. John Maloney.

Open phones at 888-825-5225.

Let's keep it rocking with Danny in Columbus, Ohio.

Danny, welcome to the show.

We are rocking, Danny.

Hey, guys.

Yeah.

How's it going?

Good. How are you?

Not too bad.

Appreciate you guys taking the time.

I have a question.

I had a question.

I recently got promoted a couple months ago and I've got some extra money coming in and

was just curious, you know, to hear your thoughts on how I should split that up and incorporate

that into my budget.

Fantastic.

Congrats.

Tell us about the promotion.

How much more are you making?

So I went from, so there's a 10% bonus attached to the base salary.

So I went from about 78 grand to 89.

And then with that bonus, it's about 85,000 to 98,000.

Wow.

That's incredible.

Okay.

So let's talk about how much is actually coming in to your budget every month on top of what

you were making.

So what's the increase in your take-home pay?

I don't have, so currently gross pay last paycheck was about 3,600 I get paid bi-monthly.

I don't know.

I don't have exactly what it was prior to that, but around, it's like around five grand

coming in each month, I think 2,400 after pre-tax deductions.

And you know, 401k and all that.

And what's your financial picture?

Do you have any debt?

Do you have an emergency fund?

Yeah.

So that was kind of part of the question too.

So right now I've got, you know, I max out my Roth contributions every year, max out

my HSA company matches a hundred percent up to the first 6% of my 401k.

So all of that's being contributed.

And then I've got about eight grand cash and savings and the only debt I have, so I had

around 23,000 of student loans, paid that off during COVID and I've got 4,900 left on

that.

Wait, you have eight grand in savings and 4,900 left in student loans?

Yeah.

You know what this means, Danny?

Yeah, I know.

I got to pay that off.

Why aren't you doing that today?

Well, I kind of wanted to call, I mean, I kind of figured y'all would say that.

I guess the situation I'm in.

Yeah.

The situation I'm in now, so I know, I know how, you know, Dave and you all feel about

car leases, but you know, I've got a, I've got a lease and I think, you know, following

the baby steps, that kind of puts me in a weird spot where, you know, I've got my emergency

cash saved up, but I also still have this car lease and I know paying that off early

doesn't really help you.

So I guess, you know, with that taken into consideration, you know, if I do pay off that

4,900, you know, once we hang up kind of how to move forward from there.

Well, if you want to keep the car, what is this car worth if you did the early buyout

on it?

Um, so I'm on a portal right now.

If I were to do, if I requested a buyout right now, it'd be 38,000.

Okay.

Now that's your only vehicle, only thing with wheels and motors in it?

Yeah, that's it.

Do you love this car?

Do you want to keep it?

Um, I mean, if it makes financial sense to keep it by the time that the, you know, the

lease cycle is over, um, I'd definitely hold onto it.

It's not, I didn't really get into a car lease to get a new car every year.

Yeah.

Um, right now it just kind of made the most sense.

Are you renting?

Uh, apartment?

Yeah.

Renting.

You keep saying that it made the most sense.

Uh, how?

Um.

How does paying a car dealership money for their depreciating assets so that they can,

they can fund the gap between the car that's going to lose money, like how, how does that

make sense?

Yeah.

I mean, that's a, that's a fair question.

I kind of put off getting a car for two and a half years and six.

I got some cash, used that money to pay off the student loans instead of buying, you know,

buying a car.

And, um,

What were you driving during all that time?

I was just walking and taking the train.

Yeah.

Danny, I, here's my thing.

I have like lofty financial goals where I'm like, I want to own a house one day.

I'm going to get married.

I want to save up for a vacation.

And so cars are depreciating asset and leases just allow you to prepay all the depreciation.

It's essentially what happens.

And so it's not that the car is too much of your world.

We say, Hey, no more than half of your annual income tied up in all the things with wheels

and motors.

So you're not above that right now.

You're not, you know, breaking that parameter, but it's a lot of car for a guy who has some

debt, doesn't have a fully funded emergency fund, probably wants to own a home one day.

And so it's not, you can keep the car.

If you want to aggressively paid off, you can pay this thing off in a year or two, go

ahead and keep it if you love it.

But I would also reassess what your future looks like.

Not what tomorrow Danny looks like now, what a year from now, what is five-year Danny

look, what would he look back on and go?

That was the right move.

Yeah.

So I guess kind of with that, you know, I'm 20, 25 right now, um, with that taken into

consideration, you know, as far as addressing the car situation with, you know, would you

request that, that buyout and just take a loan and try and just pay that thing off as

soon as possible?

I mean, is there a way of getting out of that lease, you know, just kind of ride it until

the end of the cycle and, um, you know, kind of go through it.

Yeah.

Go from there and likely not lease another car, but buy something that, um, you know,

buy it in cash, kind of, you know, what, what, yeah, I mean, you could save up the cash and

do it, but again, that's, that's a big mountain to climb right there.

Isn't it?

Yeah.

For sure.

Cause so far you've saved up eight grand to save up 38 grand.

You're like, oh my gosh, is this car worth it?

And by the time I buy it, that thing's only going to be worth, you know, 25 grand.

And so that's the problem with these leases.

So you can do what you want here when it comes to the budget.

Yeah.

It's a $3 budget income expenses.

I filter it through the baby steps and right now you're in baby step two, which means we're

pausing all investing.

We're actually going to take all savings, but a thousand bucks, throwing it at the debt.

And what that will do is catapult you in your financial journey.

And within a year, if you get rid of this car, you do all the things I mentioned, you'll

be in such a different financial place and you'll be making very different decisions

with all this new money.

What you don't want to do is allow lifestyle creep to set in where Danny goes, Hey, I made

an extra 10 grand this year.

I'm going to spend an extra 11 grand.

That's most Americans.

Yeah.

So I hope that helps.

I would contact the dealer and get the early buyout amount, see what your options are,

but I don't know that I'd want to take out a $38,000 loan right now.

That's not going to further your financial goals.

All right, John, let's go to the Ramsey network question app.

How do you feel about that?

You feel good?

Yeah.

Um, I just, I just, I just, I just, I just, I just, I just, I just, I just, I just, I just,

I was just, I just, I just, I just, I just.

John's hung up.

Well, so my high school, or I have a high school kid and of course, on day one.

He's in high school.

Yeah.

He's in high school now.

Oh, this gets worse.

He walks into as Econ class and the curriculum is you and me, George, you and me.

Oh, that's right.

And on the Ramsey education high school curriculum and his teacher, he said, his teacher raised

an eyebrow, looked at him and said, are you, and he goes, yes.

And he said, only one of the students caught on so far.

um he did have some choice things to say about our acting i don't think we're that great i thought

it was pretty good i thought we crushed it i mean it was a little bit grammy i mean not grammy but

it was it was emmy worthy here's my thing are we gonna trust awkward teenagers to judge our acting

fair well played well just saying uh but he was asking me about car leases he's like i don't

understand them and as my 14 year old laid it out it makes so no sense it's so irrational to do a

car lease that my 14 year old can't wrap his head around why people would do that like well it's

simple i get the shiny thing forever even though if i don't own it but in his head why would you

give he's like hey this new car is going to go down in value so if it goes down in value over

two years and you lease it you're just paying the dealership for two years so that they get to keep

all that money and then you have to eat the depreciation then they get the car back and i

was like yep

he's like why would somebody do that and i was like i don't know man and so i just get stuck on

no i had to man it was the right thing it's just not it's just not well people go well john i don't

have to deal with the maintenance and it's awesome and i get just keep getting new fancy cars and i

love the new car smell all the while realizing that this is one of the biggest things holding

people back it's car payments and leases and there's a reason the dealerships love to push

you to a lease they love them because they get a red flag they get a gently used car that they

control the mileage on back that's been um majority of the time they're not going to be

already depreciated and then they resell it to somebody else and they win twice it's a it's a sad

conundrum and i i write write about this in my book breaking free from broke john to try to steer

people away from it and i walk through all of the reasons it is in existence to screw you uh and it

moves you backwards financially and the best thing you can do is just save up and buy a cash car you

can afford versus listening to the human brain that says oh shiny shiny thing that's right that's

it you're the

we come back we'll we'll go to the ramsey network app question but sorry i just my 14 year old can

do better math than some folks out there way to humble brag hank's an impressive cat i'll tell

you that much hashtag just saying more of the ramsey show coming up don't go anywhere

i've been doing this show for over 30 years and some of the saddest calls

i have taken are from situations that are completely preventable yeah and what's

so hard is i feel like one of those especially the ones that i'm like oh

it's terrible air people that call in and their spouse has passed away suddenly

and they don't have life insurance when you have to think through how am i going to pay

my bills i'm going to eat next week yeah in the middle of all that grief like it's just it is

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 got to say it out loud and you 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 the cost of stinking

pizza to get a free quote call 800-356-4282 that's 800-356-4282 or go to zander.com

welcome back to the ramsey show i'm george camel joined by dr john maloney you've heard me talking

about every dollar on this show and that is the best way to make the most of your money it is a

sweet budgeting app you can download right there in the app store or google play and this is a it

makes it really simple to plan your spending track expenses save for what matters to you

all in an easy to use app that fits into your busy life because it's always with you

in the palm of your hand so if you want to check it out go to uh check it out go to the app store

or google play and just search every dollar or click the link in the description if you're

listening on youtube

or podcast all right john it's time for our question of the day brought to you by why refi

why refi refinances defaulted private student loans and builds a custom loan based on your

ability to pay you'll have a payment that you can afford with a low fixed interest rate you

couldn't get anywhere else to help you stick to your budget and work that debt snowball

go to why refi.com today slash ramsey that's letter y r-e-f-y.com slash ramsey might not

be available in all states all right today's question comes from

a

lissa in pennsylvania alyssa writes i was completely debt free but recently had some

life situations that put me back in debt can we stop real quick here i want to rephrase this

in a more accurate and honest way okay today's question comes from alyssa in pennsylvania i was

completely debt free but life happened and i chose to make some purchases on credit cards

see what i'm saying that's more honest because life situations they have no ability they don't

put you in debt they don't put you in debt they don't put you in debt they don't put you in debt

that's right that's right but i made some choices how you respond there you go there we go i opened

a store credit card for home remodeling purchases and charged seven thousand dollars over several

months each time i made a purchase they would give the option of interest free which i always

opted to do in the past five months i paid over five thousand bucks on the credit card bringing

my balance to two thousand bucks so proud of myself today my balance had gone back up to

five thousand dollars and i freaked out because i knew i'd been hacked come to find out

they had to pay me back five thousand dollars and i had to pay them back five thousand dollars

it added a three thousand dollar penalty for not paying the entire balance by a certain date

i had no clue about this i told them i wasn't going to pay a red cent and asked them to close my

account i've always paid my bills and have good credit but it should be illegal to charge a single

mom who only makes 25 bucks an hour this exorbitant fee what is your advice on the matter

okay so i never ever will have empathy for a credit card company but i'm on the credit card

company side they do not care hold up how much you make for a credit card company

per hour they do not care if you're a single mom and no it's not illegal you probably just

didn't read the fine print you signed away in a hurry because you were excited to remodel your

home and they lured you in with free uh just click make sure you click the button that says

interest free and you're like sweet and they were like don't read over here where where it says if

you don't pay the balance in full there's this massive penalty oh and by the way there's 25

percent interest which is like a fourth of the entire debt that's going to get added to it

and so what is my advice on this matter should it be illegal to charge

i don't think it's a you know we live in an economy and a capitalistic society you can pretty

much do what you want you can you're an adult you get to make decisions that can derail your

financial life if you want that's part of american freedoms and you also have to own up and look in

the mirror and go yeah that was pretty dumb of me to trust a credit card company to be a blessing

in my life yeah and um at the end of the day um here's the hard thing

you get you owe that money and so choosing to not pay quote unquote a red cent and asking them to

close your account um it doesn't work it's going to add up and it's going to add up they'll just

sue you if you don't pay right which is only going to add more financial yeah so this three

thousand is going to turn into ten thousand it's just um and by the way these store credit cards

are some of the highest interest rates yeah i remember one time dave called i think it was

sears back in the day when that place is open that they are just credit cards with stuff out

front of them and they're just credit cards with stuff out front of them and they're just credit cards

and i like that like like store credit cards the stuff is just the vehicle like they're really in

the credit card lending the lending business there's the lending and they have stuff they

got pants out front that's right yeah and screwdrivers and whatever else they got so

um yeah i hate this for you alissa but you got to pay you got to pay i i think man if i could

give you one piece of advice it's to be bummed out and take full 100 ownership of what you put

your name on and you you don't have three thousand dollars i don't know anybody that just has a spare

three grand laying around

um we got to figure out how to get this stuff paid off and then we have to commit to

um not quote unquote letting life situations put you back in debt um that might mean we're

going to do without a sink for a while that might mean that we're it's going to be hot or it's going

to be cold um because we can't afford x y and z that just may be the reality of what you can or

can't afford um and that sounds harsh but this is what happens this is what happens and

um i remember i remember when hurricane alicia came through houston when i was a really young kid

and that we had no power for a week and we had we ate off a camp stove i just remember that

i tell you that to say whatever you're going through you'll look back on it five years ten

years 15 20 years you'll remember those things remember that time we had to do without for yeah

that was weird and that stunk or whatever but it keeps this kind of crap from happening yeah

and so the better way to do this next time is to give yourself a zero percent

loan and you're going to have to pay for it and you're going to have to pay for it and you're going

to have to pay for it and you're going to have to pay back because it's coming out of your own

bank account from money you saved up for through a sinking fund through an emergency fund if it's

a true emergency that is the way to do it where you never have to deal with any of this crap ever

again and you have freedom and options so thank you for the question i hate this for you listen

we're we're not pumped about this and trust me i'm no fan of credit card companies all right

jacob is next up in jonesboro what's going on oh how are you guys doing today oh i just um i'm

20 years old i'm uh active duty military and i have no debt so i'm just trying to figure out what

exactly to do to better my future love it thanks for your service and congrats on living a debt-free

life thank you thank you how much money do you have in the bank right now i have four grand

saved up awesome and what does life look like for you in the next year or two or

do you have a contract deployment or what's the next goal um i have

two years left on my contract with a deployment in that two years okay are you single i am single

awesome so let's say two years goes by you keep can you keep saving money how much money could

you save up in that account in the next two years um that's i make roughly two grand a month so i

mean it's it's kind of hard to say because i do have like i guess i have car insurance um and and

stuff like that but um

definitely could probably save a thousand a month pretty easy okay so think about that we're talking

another 24 grand added to your four so two years from now you have 28 grand sitting in account

that's your emergency fund plus some extra maybe we separate them out and start a down payment fund

because one day you're probably going to want to buy a house right yes that's great and i would

park it in a high yield savings account um and one i i love and use is called laurel road if you

want to check them out laurelroad.com slash george and that'll at least help it grow at like five

percent over the next two years while you keep being diligent and serving this country okay so

you are on the path as far as setting yourself for the future beyond your emergency fund i would begin

investing i imagine you have access to a tsp through the military retirement account yes i'm

putting as of right now 20 and then they match 10 wow so we're talking 30 yes and 10 of that is a

100 return on your money yes you are you are doing it my man and if you

want to do that you can do it on your own you can do it on your own you can do it on your own

ratchet it down to 15 and you wanted to get the emergency fund dialed in first i would recommend

that personally to get you in an even better spot financially get you a little more foundation

and guess what at 22 and you get a paid for house by 28 or 30 now we can really create some serious

wealth but i think that you need to set a vision for yourself what does 25 year old jacob want to

be doing what does 30 year old jacob want to be doing his marriage in the future all of that

um that was pretty much it sir just just trying to figure it out slowly and surely i'm kind of new

to all the budgeting stuff and all that but i mean i've always been pretty decent with money

you've done a bang up job without us uh jacob and the ramsey plan is is the way

and for your service i want to gift you financial peace university to give you even more education

these nine lessons will walk you through the ins and outs of wealth building uh insurance you know

you name it you're gonna be more equipped and at 20 john can you imagine getting this stuff at 20

years old no i didn't know what day it was when i was 20 i don't know what day it was when i was 30

there's still still some days you don't know what day it is today this is a weird tuesday afternoon

oh my goodness well uh that's inspiring i needed a win jacob and you were at a 20 year old who's

dead free going i'm just trying to set myself up for the future instead of pay for the past

that's it that's the whole goal my friend you're doing it that puts this hour of the ramsey show

in the books thank you to

dr john baloney all the guys and gals in the booth keeping the show afloat

and you america will be back before you know it do you ever feel like you're finally making

progress towards your goals only to get quickly distracted by something else in your feed well

that's why we created the ramsey network app your single source for content that keeps you

motivated the ramsey network app is designed to keep you laser focused on reaching your goals

loaded with over

7 000 hours of ramsey shows this free app is the best place for uninterrupted content and no

distractions plus you can search specific questions to get more personalized content in seconds so for

the days you need some extra motivation you'll have proven advice at your fingertips it's time

to get serious about your goals and shut out the distractions for good simply search ramsey network

in the app store or google play

if you're listening on a podcast just click the link in the show notes to download our free

ramsey network app today from ramsey network it's the ramsey show where we help people build wealth

do work that they love and create amazing relationships i'm george camel joined this

hour by the one and only dr john baloney we're taking your calls at 888-825-5225

we will do our best to help you take the right next step for your life your relationships and

your career

your money taylor's going to kick us off this hour in orlando florida how can we help taylor

hi good afternoon um my my question is about two loans that i took out that were really bad ideas

and one of them was a car loan and one of them was for solar panels and they they really put me in a

bad financial spot and i really regret them and i was even thinking about lowering my 401k

contributions which i don't want to do because truthfully i should be doing that but i'm not

putting in more not less got a lot going on here let's say we focus on one thing at a time

so how much do you have in the car loan and how much is left on the solar

uh the car loan is 335 a month and the solar is 127 a month

okay here's the deal i want you to stop thinking in terms of payments because that's what got you

into this right oh i can afford the payment who can't afford 127 bucks a month

and what you need to look at is the actual loan amount so what is the total loan amounts on both

of those that's left i to be 100 honest of you don't know the exact number uh because when i you

know when they're selling it to me they're that's how they're talking about it is just the monthly

and that should always be a red flag when they're not talking about the total cost of the item and

instead well hey we can do 50 bucks a month we'll just stretch out the payments give you a crazy

high interest rate and we'll be out of your hair that's pretty much what they're telling you

so that's what happened to me at the car dealership because they they kept they convinced me to do the

84 month term which i didn't want to do but they were like they didn't convince you you chose

to say okay that sounds good yep do they tie you back in the finance office and go you're

gonna take this 84 month loan lady no they didn't they didn't do that that's yeah good i would have

reported that to the police so let's say can we do one thing just for me it's just for me i'll let

you the numbers will you say out loud i'm kind of frustrated with caitlin for taking out these two

loans i shouldn't have taken out well with taylor or taylor sorry i'm i'm very frustrated with taylor

for taking out these two loans okay this is this is the first step in all emotional health

challenges mental health challenges relationship challenges it's ownership of they didn't make me

do this i did it i wanted and they were convincing and yada i signed it is that cool

yeah it was me in the end it was me that did it all right i love that because now we can go solve

this problem now we can solve you can still be mad at them but you took ownership let's go solve

it now i love it right so what is your income taylor i make cake home probably uh just under

3 000 a month okay and are you single yes all right so the bad news is we can't return the solar

the good news is we might be able to sell the car so if the car let's say the car is worth thirty

thousand dollars and you owe 25 basic math would say you'd get a five grand check right yeah but

then i wouldn't have a car well five grand can get you a car can it true so that's what i would do

that's what i did it's what john did and this is the only path to getting out of this cycle that i

think you've probably been through a lot of times i've been through a lot of times i've been through

in your whole adult life not really it's it's weird i spent most of my working life doing not

buying anything but 100 necessity because my goal was to buy a house and so that was all i thought

about was saving up for the down payment for the house but you didn't have a principle in your life

that said i don't borrow money taylor's going to live her life debt free at some point you said

i'll take on some debt it'll be all right yeah and basically like after i bought the house and

i didn't have that goal and i didn't have that money and i didn't have that money and i didn't

have that money anymore to kind of keep me on track i was like well now that i'm not saving up

for a down payment i can just spend money on things the first solar guy that shows up i'll

hand him forty thousand dollars so here's the key yeah basically yeah your income is the key to

getting out of this and you might need to get your income up and you might need to do about seven

other things so the question is if i told you taylor can be debt free guaranteed in less than

two years if she follows these recommendations would you just do it

one of the recommendations is going to be taylor needs to stop investing because taylor has a

priority to get out of this mess and trying to do four things at once is only going to slow down all

of it so how much are you investing right now uh just my 401k i put 15 percent in my 401k

15 of your income is probably a hefty number we're talking hundreds and hundreds of dollars

it's like 480 a month if i gave you 500 back in your life to tackle debt you think it'd make a

dent to add six grand a year to your debt snowball i want to believe that i would put it towards the

debt but my worry is that i would just spend it well we got to fix that first you got to have this

one singular focus that i want to get out of debt because this habit is going to cause you to be

back and you're going to be calling us a year from now yeah why don't you trust taylor taylor

i don't know i just have um

i don't know like when i have a goal of something i'm saving up for i can be so disciplined but when

i don't have that goal this is a goal you're saving up to get rid of debt yeah this is a

goal to save your life it's an even bigger goal it's more exciting than saving money

because you're getting a monkey off your back right so true you just tell us you're just going

to go back into debt then we can't help you get out of debt 100 yeah and it sucks because if i

hadn't taken out that because the

car i had before was completely paid off and then i traded it in for this more expensive car and i'm

just kicking myself over it the key here is we've got to learn to live on less than we make and we

have to make decisions that will make future taylor proud and so that's where the budget comes

in handy and i'm going to gift you every dollar premium and it's going to help you find these

kind of margin activities to where you go hey if i pause investing that's 480 bucks and what if i

got a side job making an extra 500 that's a thousand bucks i can throw with this debt

and then what if i was getting a tax refund every year of you know let's say it's three grand three

grand a year what if instead i put that back in my paycheck and now i got you know 250 bucks

back in my life on top of that so you can see all these ideas as you get creative and resourceful

start to add some serious momentum to your debt snowball that's the only way to get out of this

without continuing down the path of just trading one debt for another and going well i found a

zero percent credit card i can put it on and then i'll do a balance transfer and then i'll give the

credit card company more money to try to move the debt around we got to stop playing the shell game

at some point yeah well i don't have any credit card debt but that's good at least because i've

always been that person who pays the balance off every month well how about you switch to debit

card for a month and see if it doesn't change your spending habits well then i wouldn't get

the cash back though because oh my goodness taylor you really think this cash back is a

blessing in your life you think you're winning right now well because i don't pay any interest

on the card you were like a rat in the maze and you got to the cheese and you thought oh my gosh

i made it and i'm looking above it i'm going oh my gosh taylor's in this experiment from the credit

card company let's get her out and she said no no i'm gonna miss my cheese i gotta have my cheese

and i'm going do you know what they're doing to you taylor get out of the maze i'm gonna send you

my book breaking free from broke along with every dollar premium call me back after you read it and

i hope we can have a very different discussion and i want fired up taylor that is ready to knock down

some doors to get rid of this

debt this is the ramsey show

hey you guys emergencies happen in life your dishwasher breaks and floods the kitchen

your ac goes out in the middle of the summer situations like those are why we teach people

to have an emergency fund and when it comes to medical emergencies there is a medical emergency

kit from the wellness company they're great for when you need medicines right away and can't wait

for the pharmacy to open and who has time to wait

in line at urgent care medical emergency kits from the wellness company aren't band-aids and

tylenol your medical emergency kit has antibiotics and medicines for over 30 common illnesses like

strep throat pneumonia utis and more these are doctor prepared prescriptions like z-pack

amoxicillin and ivermectin so they're like having an urgent care in your home just answer a few

questions at urgentcarekit.com slash ramsey

and your medical emergency kit is shipped right to your door and use the promo code ramsey at

checkout to save 15 i have one and you should too that's urgentcarekit.com slash ramsey

use the promo code ramsey hey it's rachel cruz and i'm pumped to tell you that the new

2025 ramsey goal planner is here with all new encouragement and guidance from dr john deloney

jade warshaw and me you'll get what you need to stay focused

organized to go after the life you want financially relationally and spiritually

plus this year's planner is so beautiful with a new cover a vision board and all the features

you love it sells out every year so head to ramsey solutions.com slash store

welcome back to the ramsey show i'm george camel joined by dr john deloney

open phones at triple eight eight two five five two two five we are headed to pittsburgh

and caitlin what's going on caitlin hi good afternoon um yeah so i'm a younger millennial

and the idea of being a homeowner feels so unattainable for me in a reasonable amount

of time due to my current debt expenses and cost of living um and those are mainly my student loans

child care and rent so i'm happily married with one daughter and another on the way and we're

slowly running out of money and room in our current renting facilities so just looking

to see what options i have to meet my goal of being debt-free and also you know a homeowner

and a like where i'm not 45 years old how old are you now i'm 28 okay 28 years old you're about to

have two kids what's the child care cost yeah um monthly um right now just for one it's 1500

but in october it's going to be three grand we're gonna stick i saw a comedian recently say

that if he had just lent me a phone i would have been like oh my god i'm so sorry i'm so

on planet earth and seen a video with no sound of them storming the capital um he would have

thought surely that was about the child care cost i buy it that would track it's so expensive well

caitlin i hope you have a strong household income you got two working people here yes my husband and

i are both engineers wonderful what's the household income um we take home a little over 12 grand

whoo that'll knock out some debt

that'll save up a down payment real quick but here's the thing i think you want to do it all at

once uh yeah um unfortunately because we're both engineers we both got stuck with student loans

me more mainly because i was 18 years old just went to college didn't think anything of it it

was a private school and those loans were pretty hefty how much so um what's left well what's left

is um 100 000 i just went under 100k okay i'm sitting next to a guy who happened to pay off

100,000 in student loans can i tell you caitlin so here's what i hear in your in your voice i hear

anger and bitterness like just frustration is that true yeah at who um honestly i don't even

know who i'm angry at because i can't really blame myself for being 18 years old like i wanted that

degree um but i just feel frustrated because like i've been told you know if you do everything in

this order things will work out and here i am 10 years later and i'm like i'm not going to do it

and nowhere near being a homeowner and so i'm just like angry that i can't get what i want

essentially there you go so once you once you take that level of ownership i i think i i get

that i don't want to blame an 18 year old i was the same way i just signed the paper i didn't know

but also i don't have to take blame as much as not by my hand but in my lap like i gotta take

ownership this i signed my name here we are yep and what i would tell you is any energy

you spend being angry at this amorphous them the the people who told me this the this it's just

energy not going to your family and not not going to work it doesn't solve anything it just it's a

decision to make your present miserable the best thing is to get a plan and roll out of it and what

i would tell you is having been there ike um i sold my truck and i sold my house and i moved

my family into a residence and i sold my house and i sold my house and i sold my house and i

moved my family into a residence and i sold my house and i sold my house and i moved my family

into a residence hall and i know not everybody can do that but i'm just telling you i had a

toddler and a we were trying to work on um a second kid and we sold everything just because

we had to get i was sick of it you have to get radical in terms and let this and by the way i

was an associate dean i was a professor my wife was a professor we had fancy jobs just like you

and your husband everyone around us looked fancy all you have to decide i don't care what anybody

looks like i don't care this quote-unquote what i think i deserve what it's worth i don't care

what it's supposed to be i just in two years i want this gone what must be true in our life so

this is all gone in two years is there a different um child care place is there a teenager who can

come over here i don't know what the what the world looks like where you live but how radical

and obnoxious borderline insane can we get so that this goes away yeah so um when we were looking for

daycare if we were kind of trying to be financially responsible and um in the pittsburgh area it can

be as low as $1,000.

but as high as $2,000 for child care so we went with a cheaper facility and they forgot to feed

my daughter so went into overdrive and like really did digging and we found like a median facility

so like um we did we definitely did try that the first go around that's cool but here's what's

important though can you exhale that you made a choice yeah on behalf of your daughter it's too

expensive it's so expensive so expensive and me and my husband made a choice and we went to a

and it's the right choice i'm telling you i'm applauding your choice as as a as a parent george

is sitting right here too we're both applauding your choice you did the right thing but we made

a choice we want our daughter to eat every day so um the choice is we're gonna spend 1500 bucks a

month yes what's your rent um 1800 wow that's amazing for your income so what what would it

take let's say you rented a bigger place if you needed it what's that gonna cost a reasonable

place nothing crazy

what would that move your rent to so in the pittsburgh area most places for rent that we're

seeing that's bigger than what we're currently living in is probably 2500 ish okay that's still

very reasonable for your take-home pay are you guys doing any investing right now retirement

plans elsewhere definitely 401ks um but again um is it a percentage i think i think i just do

whatever my company matches um probably like five or six percent

what if i told you you could be let's say debt free in less than 18 months have an emergency fund

a few months after that and begin saving up for a house and probably have that down payment in less

than a year at that point so we're talking three years total you were in the house of your dreams

completely debt free with an emergency fund yeah that would be great now the question is what are

we willing to do to make that a reality in that period of time and part of that is you guys are

a young couple making amazing money and we can pause the investigation and we can pause the

investing right now because we're going to get back to it with a vengeance and instead of four

percent we're going to be investing fifteen percent and that's just until we get our house

paid off which is going to happen pretty freaking quick when you're making 12 13 15 grand a month at

that point with no debt except for the mortgage so you see how this the ramsey baby steps kind

of unfurl as you get momentum but most people understandably go well i want to pay off the

debt i want to save up for the house i want to invest in the 401k i want to have xyz lifestyle

and it becomes very difficult to accomplish any of it yeah it's so tough to do it all yeah

can i tell you this too that was shocking to me how much combined income do you and your husband

have uh uh 12 000 like a little over 12 000 okay on an annual basis oh like um you mean like

yearly yeah what's your annual take on both of you just approximate um 250 260 okay yeah

you guys make really didn't we all hear a story that if you made a quarter million dollars a year

that you would never think about money you even worry about it i know i i like whenever i got my

new salary i was like so proud of like how much we make as a couple and then once we look at

everything we're like wow we are nowhere near where we thought we would be with this okay that's

the feeling yeah and if you take that feeling and start spraying it all over your neighborhood and

it it it does it doesn't accomplish anything most i i know people who cross that million dollar

line they they cross that first seven figures and they thought it was going to feel a certain way

and it doesn't and it's so frustrating i thought i wouldn't have to think about this and then the

school calls and then the car break like i just thought and i thought and i thought let's just

traffic in reality and get this thing knocked out it just it just is what it is what it is i'm going

to choose optimism and a plan george is going to lay out for you other than just anger and

bitterment

and by the way i know that the people pulling up next to you in the parking lot

some of them know what you make or have some ballpark and they're like why are you driving that

can you believe she put her kid in that daycare exactly exactly so caitlin hang on the line i'm

going to send you a copy of my book breaking free from broke two specific homework assignments

number one read the first chapter it's pretty much what you said verbatim so it's going to

let you breathe and go oh my gosh someone gets me then read the margin is breathing room chapter

there's like 20 things i've gotten there to make more and spend less

do that in the every dollar budget with your husband and go oh my gosh we're sitting on five

grand a month that we could throw towards the set we can do this in two years this is definitely

possible and you're going to leave with hope and a practical plan if you read that book so hang

the line we'll send you a copy of breaking free from broke we are wishing you the best thanks

for the call this is the ramsey show this show is sponsored by better help all right so we all

know i'm a pretty big nerd i love learning new things and it's one of the reasons why i spent

most of my adult life learning new things and it's one of the reasons why i spent most of my adult

life in a classroom either as a student or a professor so the flurry of activity this time

of year around kids going back to school it reminds me of my love for learning and even if

school wasn't your thing i bet there are things that you loved learning over the years like

gardening hunting medicine shakespeare and if we're honest most of us spend our lives learning

deeply about anything other than ourselves this fall i want to challenge you become curious about

why do you feel the way you do therapy is an amazing place to learn more about you to regain

your sense of curiosity wonder and excitement about the world and if you're considering therapy

i want you to call my friends at better help better help is a hundred percent online therapy

staffed with licensed therapists you can talk with your therapist anywhere so it's convenient

for just about any schedule you just fill out a brief online survey and get matched with a

licensed therapist and you can change it anytime for no extra charge

let's be curious about ourselves this year visit betterhelp.com slash deloney to get 10 off your

first month that's a better help h-e-l-p dot com slash deloney listen tickets for the live like

no one else cruiser 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 six hundred dollar deposit today at ramsey solutions dot com slash events

this is the ramsey show i'm george camel joined by dr john deloney and we've got a special treat

for you because on the debt-free stage we have bruce and cory welcome guys thank you where you

from uh louisville kentucky all right and you may have heard of the ramsey solutions show

we made the drive down yeah we sure did i'm glad you said it the right way one time i said louisville

and i was attacked in the parking lot i think it's a hate crime we forgive you yeah

we are glad you're with us today so tell us how much debt did you pay off

111 000 that's a high number how long did it take six years all right and what was your income range

during that time uh highest was a hundred thousand and right now we're at a hundred thousand

about seventy thousand all right and let's do this what do you guys do for a living was there

a job change oh yeah um i am a stay-at-home mom that is the best job change congratulations thank

you was this during the debt-free journey yes wow yeah we made the decision um you know we thought

that the lord wanted us to do it and we thought if we did it we'd maybe pay off in another two

years or something we did it and um we were all finished with debt eight months later wow so you

thought it would slow you down more than it actually did absolutely because it probably

lit a different kind of fire when you went this is what's right for our family and we're gonna keep

full steam ahead for sure and bruce what do you do i'm an electrician wonderful yeah god bless the

train and that's his shirt says he's the dad of girls outnumbered hashtag outnumbered how many

are we talking okay i didn't know if this was one of these like we got nine kids and it's a farm

it's a homestead we have a we have a five-month hold at home so wow how are you even here right

i know

this is our our first trip with just the two of us did you just make snow angels in the hotel room

last night just in the blankets no one's screaming no kid i don't understand something phantom

screams why is there i think i heard something what type of debt was the 111 it was our house

whoa hold the phone hold on hold on guys in the trades and stay-at-home moms cannot pay off homes

right that's not really absolutely it's not true we're so poor but we're not

this was

all mortgage yeah all mortgage that's amazing so six years ago you guys had the mortgage you

were debt free other than the house what made you go hey what if we just go ahead and went

and knock this out instead of looking at this amortization schedule for the next 25 30 years

yeah well when we were only engaged we went to financial peace university together and that was

fantastic that got us set up to be married and to be on the same page financially and so even

when we bought the house we were like this isn't going to be we got the 15-year mortgage like what's

suggested and we did the downfall amazing for you yeah we got the 15-year mortgage like what's that

and we did the down payment that was suggested but we knew we were going to pay it off fast

because we were so here's what i want to ask because people go this is outdated dave doesn't

understand you guys decided in the face of all that no what if we just did a mortgage the right

way and that set us up to be debt free six years later well i didn't want to listen to my dad

anymore oh there we go that's part of it uh yeah you know it was just going through your

class and it was just so convincing you know dave was so convincing and was like we got to do this

so wow and here you are now a young couple two little kids no payments in the world yeah he

turns 30 tomorrow what yeah this is his birthday trip oh my god we got to do something more

exciting than this but nashville is a great destination yeah they pulled up to the parking

lot on a pedal tavern george they're trusting they've got the weekend they figured it out we

pulled up in our hoopty and i was like we're gonna fit in yes this is good be just fine

the ramsey parking lot hey

so i'm interested in hearing from both of you what what was your what was money like growing

up do y'all both come from a lot of money or was money a struggle coming growing up well i didn't

particularly come from much money um and uh it was just my dad raising us but uh the thing about

my dad is he never did take on debt so so growing up i didn't even know about credit cards and when

we got married she was like you should get a debit card and i

did and i remember going to the gas station thinking i hope this works he still carries cash

to this he's like only cash he's still to this day you were the youngest living boomer i know

that's incredible dude stay strong bruce that's amazing so tell us about the this home payoff

because a lot of people have like i've seen like there's this tiktok strategy to pay it off faster

you guys actually did it so you are the poster children what did you actually do

you just work hard you you make a budget you um yeah you can so your mortgage payment and your

rent is how much every month just if you just paid the normal payment 1400 and you guys said

let's put extra on the principal was it once a month and you were consistent no it was kind of

fun you know we're just doing the budget and whatever extra we had we we put towards it and

you know it almost became like a game you know it was every time we got an extra payment i was like

yeah yeah at one point in time we lived off only his income to see if we could be stay at home so

just lived off his income and um my income

went completely to the mortgage wow so every few months when you could you're like hey what if we

put an extra thousand or two thousand what was the biggest extra payment you applied oh there

were some big ones because when we got like our taxes back and sometimes we'd put all of that

like a refund you go let's throw that on there yeah so a few thousand bucks probably yeah i think

it was the the covid checks they were hanging out i think we put all those all of them we were like

we don't need that money the checks they were handing out the government the government paid

off our mortgage wow those biden bucks came in handy for you

wow that's incredible what was the hardest part of all this because six years is not a short amount

of time to sacrifice well you know we've been doing maintenance on our cars just keeping them

chugging along yeah so probably keeping those cars going and we yeah and we did have a lot of

naysayers like a lot of people in my family um would be like oh you need a new car you need this

or just do this this is the way everybody does it and we were like wait family telling you what

you need isn't that your job yeah oh my goodness

i can't imagine so kind of just putting the blinders on and going this is what's right for

our family and i don't care about your opinion because you don't pay our bills yeah that's right

that's powerful that's a good yeah that's a good way to say it cory what was money like in your

house um my dad was the typical he has credit cards he still does to this day and i love him

to death um but um and he has the house payments and stuff like that and he's he still will today

he'll probably maybe listen to this show and be like well i guess you did okay

here's what i think so so amazing and y'all are experiencing this right now in real time

your two daughters will never understand the electricity that's in a home when you're worried

about hey i just did a job for this contractor he didn't pay me or i'm waiting on that check i'm

waiting on the check and they gotta they gotta go get x y and z groceries you they'll never know

that yeah i'm so and i'm so glad like we are we do do things cheaply we get secondhand clothes and

we get groceries at aldi um and we get groceries at aldi and we get groceries at aldi um and we get

groceries at aldi but i am glad to show them that but i'm also glad to show them that it's not

from fear it's from we made a choice and we think this is wiser than this and so we're not afraid of

like spending our money but we're gonna not do it stupidly be intentional about yeah you also

not afraid to drop the five-month-old off and pack up and come to nashville right so i don't

know about that it's amazing oh it's amazing so what do you tell people the key to getting out

of debt is completely mortgage and everything how do you do it well i think the first thing

was going through your house class and just having a good time and then i was like oh my god i'm so

having the mindset shift that you know debt is not good and uh and after that the budget

is just such a key key part to it i love it well we've got the budget for you every dollar we're

going to gift you two uh subscriptions for a full year and you can use them you can gift them to

someone else to get them on the journey but that really is the key is paying attention to your

money and sticking to a plan so we're so uh honored that you decided to join us happy 30th

birthday tomorrow what a way to celebrate what do you what do you tell to a couple out

there

who's uh wants to be a stay-at-home mom and married to an electrician oh gosh um yeah you

know if you think the lord is telling you he's gonna you can do it it doesn't matter if you

make you know at one point we're making 50 000 a year um if the lord wants you to do it he's not

going to be like now i'm gonna smite you like he's gonna lift you up and he's gonna do well

to you y'all gotta go make decisions every day yeah yeah amazing i'm proud of you guys it's

love it let's get to the fun part it's bruce and cory from louisville

kentucky 111 000 paid off house and everything in six years making 100 down to 70 so cory could

stay at home with the kids what a beautiful picture of the new american dream debt freedom

baby count it down let's hear a debt-free scream three two one we're dead free

the unity john unmatched they heard it all the way back in louisville

incredible

incredible that's inspiring making 70 grand louisville kentucky two kids

normal couple doing very not normal things going hey what if we had a different picture

for our family's life what if we could be completely debt-free before we're 30 years old

that's inspiring this is the ramsey show

hey it's dr john deloney look when you're stressed about money it makes everything feel out of

control you run around like a maniac trying to make sure everything is in order and you're not

everything's covered everybody's okay i've been there it's the worst but you can flip the script

with an every dollar budget it helps you track spending and expenses in real time so you always

know what's happening with your money talk about a weight lifted off your shoulders start feeling

in control of your money again download the every dollar app today for free

welcome back to the ramsey show i'm george camel joined by dr john deloney open phones at

888-825-7000

here's your reminder that the live like no one else cruise is quickly approaching cabins are going

fast more than 85 of the cabins are booked you don't want to miss this we are going to turks and

keiko saint thomas puerto rico and the bahamas and who's going it's all of us all the ramsey

personalities you hopefully special guests comedians musicians celebrity chefs you name it

i heard you opened up five more spots because it's sold completely out um you opened up five

more spots for your cannonball competition yeah we're accepting between you and ken coleman

submit your videos that's right so there's five more spots dm them to john that's where they're

going right now he's handling it's on the google doc we are going to have a lot of fun all the food

is included even room service you can lounge by any of the pools the hot tubs they've got a state

of the art fitness center or pickleball courts which can i tell you john and i played this

morning and it was a good time we got worked over by ken coleman and that is not a theme

that is 100 true ken coleman is

uh he's a great guy he's a great guy he's a great guy he's a great guy he's a great guy he's a great

um savant he is the lord of the pickleball court so join us we'll be having a good time

seven days march 22nd to the 29th 2025 ramsey solutions.com slash cruise all right eric's up

next in des moines how can we help today eric hey thanks for taking my call sure what's going on uh

my wife and i are on baby step 2 with 70k to go um and i received child support uh it's about

400 a month

i was curious if we could use that as income or put that into like a 529 for college

for myself okay so 400 bucks a month we're talking about five grand a year and you're

saying hey should we use this for college do we use it for living expenses should it go toward

the debt are you just wondering where you should use this money yeah because i don't touch it

because i just you don't need it necessarily to cover the expenses for the college so i'm just

asking people so you need 15 cents for the month yeah i don't need it that's an interesting

question no one's ever asked this question when i've been when i've been out here uh eric great

question what do you think george because part of me says you throw every penny towards this debt

but i can see a scenario where i'm just going to continue to fund this 529 um it's i i get both

sides of this how old is he yeah it's interesting question seven years old so we're talking 11 years

um do you have any money safe for cash?

college yet no okay and you don't need this money like you said to cover his expenses yeah i haven't

used it okay since i've been receiving it and you've got 70k in debt how much do you have in

savings uh we have our thousands uh for baby step one and then i have a couple thousand that i

gotta allocate towards that good okay yeah it's an interesting one there's no uh you know

the principle around this i would personally i would probably put it in college because i'd

sleep better at night knowing i was using it toward his future yeah how long is this going

to take you to pay off uh we use your calculator on your website as said february 27 february 27

how much money do you guys make a year

uh i'm not sure per year but we net 6400 per month that seems like the very

you can toggle

say again that seems like a variable you guys could adjust it seems to be the only one you

could adjust unless you've got really high living expenses um which doesn't sound like you do but

man i really want to see that down into early 26

okay my gut check says well let's not invest while we have debt and so if you're using 400

of your normal income to cover his expenses

there's no difference in using this new 400 of of child support to pay off debt because you're

covering all the expenses and more there's no needs that he has that you're not able to cover

and so i don't see a problem with using that extra 4800 a year to get out of debt faster

okay so put it towards debt yeah i mean if if you're saying that i have 6400 plus the 400

is that what we're talking about yes yeah and i would even go to the

and try to make more than that i would try to cut my expenses down because i do think

your timeline this feels like a long ways away and i'd rather see you guys in baby steps 456

where you're investing for your own future saving for his college and by then you might be putting

even more away and you still have time if you got you know a nine year time horizon before he goes

to college okay so i mean yeah there's there's both both options there my heart says just lean

into the baby steps and throw it toward the debt and i would try to make more than that because

i think that's the only way that i can get out of debt and whether the money's coming from your

income or child support it's all the money that's being used to cover the family expenses

and part of that is debt yeah because yeah yeah yeah i i agree with that it took me a minute to

think through it so thanks for talking that out loud george but yeah you're spending that much

money on a girl and young boy and groceries and the room as part of the rent our mortgage so yeah

i mean you're working it out that way you're spending the 400 bucks a month and more on a kid

gets older good gosh i think i spend about six or seven uh million dollars a month on feeding my 14

year old so kid can eat it just it just it's working though he's like twice my size yeah well

that's that bar is very very low fair enough but yeah eric i would i would get out of debt as

quickly as possible um and we do have an article for you eric that we'll send to you we'll also

link it in the description and show notes wherever you guys are watching america and it's called what

can child support be used for and it's on the ramsey solutions blog so we'll be sure to link it

and send it out to you and i hope that will help you make the right decision for your family thank

you so much for the call all right uh john before we take another call here i want to mention that

for all of the folks listening on youtube or podcast the show's about to end and so if you

want to listen to the rest of the show john and i will still be here taking them but you got to

jump over to the ramsey network app it's the only place to get full episodes of the ramsey show

and it's the best place to stay focused on your goals with content that keeps you motivated it's

and if you're just listening on radio stay right where you are the show will go on for you but

youtube or podcast jump on over so you can click the link in the show notes to get the app or just

search ramsey network in the app store go check that out all right let's try to get one more in

here john zachary is in indianapolis how can we help zachary hi um so i had a house fire a little

ways back um and we are going to be we had originally planned on selling our house and uh

buying another one in contingency actually called you and jade uh back about two months ago and you

guys helped me uh clear up that we shouldn't buy a house at the moment that's not the right time

um i finally talked my wife out of buying a house when we do end up selling this house

but it looks like we are going to be getting a little bit more back from insurance and um

as well as a good chunk from when we end up selling the house so i was curious on if you

guys would recommend just continuing the baby steps in order of the debt snowball

or if you think we should clear up one of these big car payments that we have to get rid of the car

first to clear up about 800 bucks a month what's the total consumer debt you have left um right now

we have about 75 to 85 i'm not sure on the exact number and how much is the insurance check um the

insurance we're going to be getting anywhere between uh 10 to 20 it just depends on uh

reconstruction okay and you're saying should we use this insurance check to just plop into the

debt snowball smallest to largest and we're going to be getting anywhere between 10 to 20

largest how many debts could you knock out um so i have i have two student loan debts um one is about

3 000 um i haven't i don't i haven't started paying on that yet that doesn't i'm not supposed

to start until november um but you're allowed to though yeah yeah i know i just got the information

to start paying it like less than a month ago what's what's the next biggest start start this

month let's get that let's get rid of the biggest is uh another

student loan debt of about 8 000 okay so let's say you knock out both of those debts debt snowball

method how much is that going to free up payment wise do you know um about 500 okay and then we

have a new 500 to apply to the next debt on top of our income and what's the timeline if you do

that if you do it that way what is the timeline to be completely debt free um i'm whenever i wrote

it down uh i wrote it down back right before this whole house fire and everything happened so

um i'm pretty sure we estimated around like three three and a half to four years

i think we need to reassess and go what is it going to take what is the gap to where we can

get rid of this debt in two years because four years is a long time to pay off 75 grand so i

would try to get your income up get the expenses down and do not buy a house just plow through the

debt snowball that's what i would do if i was in your shoes thank you for the call that puts this

hour of the ramsay show in the books be sure to jump on to the ramsay network app if you're on

podcast to keep listening and watching

hey you're still here

what are you doing here

you do know that the rest of today's show is playing right now over on the ramsay network app

right all you got to do to finish the episode is search ramsay network in the app store google

play store or just click the link in the show notes to download the app for free yep you heard

me right for free then right there on the home screen you can watch the rest of today's show

bada bing bada boom all right i'm getting out of here enjoy we'll see you on the app