Live from the headquarters of Ramsey Solutions, it's The Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. Thanks for joining us, America. Merry Christmas to you. We're so glad you're with us. Jade Walshaw, Ramsey personality, newly minted, brand new author. Money is not a math problem. Breaking Free From Broke is George Campbell's new book. I'm glad for what I have is Rachel Cruz's new book all in the Remsey store right now, but Jade's with us to help me answer the questions this hour about your life, your money, your work, and your Christmas budget. Oh, wait, we'll just put that in there. Triple 8, 825, 525. Kristen starts this hour in Tulsa, Oklahoma. Hi, Kristen. How are you?

I'm good. How are you doing?

Better than we deserve. What's up in your world?

Well, thank you for taking my call. My husband of 16 years passed away two months ago.

I'm so sorry.

Yes, thank you.

You all are young. How old was he?

I'm 39. We have five children, and he was 46. Wow. What happened? Well, he had been battling cancer for three years, and then he had a really intensive radiation treatment to his liver. Then he had some neck issues, so it was on lots of pharmaceuticals. With that and the disease and the treatment, his body just gave out. Oh, my goodness. I'm so sorry. It happened very quick. Yeah, thank you. I appreciate that. I never paid a bill in 16 years, and so I'm left to steward our five children and all of our finances. I want to steward it well, but I'm feeling zero confidence without him leading in this area.

Yeah, because he was in charge of it for.

All of that time. Yes, 100% in charge.

How old are you, babies?

My oldest is 15 and my youngest is four.

Was there insurance that came about?

Yes. Actually, my primary question is, so he had a few life insurance policies, and I was going to tell you what debts we had and to see if it's better. I remember him telling me a long time ago to take the insurance money and pay off the mortgages. But I know we've refinanced since then, and obviously situations, it's just different now. So I wanted a non-biased opinion on what would be.

You called the wrong place for that. We're extremely biased. No, I listen to it all the time. But we're biased to try to help you. How much insurance was there?

Okay, it's going to be about $720,000.

How much debt do you have?

We have three mortgages. Our primary mortgage, the value is 496, and the payoff is 267. Now, our is 2.65. It.

Doesn't matter. Okay. You said the value of the house is 500? Yes. And you owe to what? $67. Okay. Do you have any other debt other than that mortgage? You said you have three mortgages.

Yes. We have two rental properties that actually we net about $1,200.

A month on them. Yeah. What's the equities in those properties? Give me the value of rental property number one and the mortgage on rental property number one.

Okay, it's 319.

319 value. The mortgage on that one is?

Is.

109. Okay. The other one is valued at what?

231.

Okay. The value is what? I'm sorry, the.

Mortgage is what? We owe 88 on it.

88, okay. Oh, wow. You got a little bit of equity, not a ton in both of them, but you could pay off everything and still have a substantial amount of money left.

Yeah. Okay.

Now, who was handling all the tenants and the landlording? He was. Yes, he was. Okay, so we have two complicated things here that you have to learn in a cram course, how to handle the monthly personal finance issues at home and learn how to be a landlord.

Yes.

Okay.

Which I do have a lot of family here. I don't care.

I mean, it's nice that they're there, but they're not going to do it for you.

They're not going to do it for you. Well, do you want to be a landlord?

No, not necessarily. The good thing is, I mean, the rent-.

You've been a full-time mom all this time?

Yes, and I actually just got my master's last year, and I am actually a counselor. In what?

I'm a counselor.

Cool. Okay. You have the ability to create some income?

I do. Okay. All right. I've been thinking of have Social Security, and I have a better idea now what that's going to look like for me and the kids.

Okay, Jay, jump in anywhere you want here. But I'm pretending at this moment that you're my little sister.

Okay, yes, I love that.

If you were my little sister, what would I tell you to do? I personally love real estate. I own a bunch of it. But it sounds to me like you don't need landlording on top of five kids and trying to learn how to handle money for the first time in 16 years.

That's what I would say.

I'm probably selling these two houses for one reason and one reason only, and that's to simplify your life.

Okay.

Your life doesn't need to be any more complicated in the middle of.

The.

Pain and the newfound stress of having to handle some other stuff.

Plus, you said they cashflow 1,200 a month combined. Yeah, that's not much. You can go out and make that in way more. I don't think it's... Do you see what I'm saying?

If you were to sell those, take the money from those, and pay off your home, you'd have $700,000 to invest and sit down with a Smart Vester Pro with some mutual funds, create an investment account. You've got a pile of money coming in for Social Security for the five kids. You can use that money, the money you earn as a counselor, and a little bit of money off the $700 and easily mathematically. The math would be easy, not the life. But the math would be you could easily take care of your family.

Yes.

That's really what I don't want you dealing with some tenant.

Okay, yeah. I do have my car. I owe $20,000.

Pay it off. Pay it off today. Okay.

What else do you have? Is that it? That's it.

It was a three-year just.

Very long- Never borrow money again. Okay. That's rule number one. Because you have a paid-for house, a paid-for car, five kids, and a big old pile of money, and you're going to live on less than you make so that this is sustainable into perpetuation.

Okay.

Then you've taken care of yourself. Now, here's what we're going to do. You mentioned steward, which is typically a word used by people of faith. You're a person of faith, I assume.

Yes.

100%. Okay, so are we. My book that my heavenly father gave me, he's told me to take care of widows. So you're going to be taken care of. We're going to put you into Financial Peace University into every dollar. I'm going to assign one of our Ramsey coaches to you to get you up and get you trained and help you get sustainable with your knowledge. And it's all on us.

Thank you so much. All right. Thank you.

So much. Merry Christmas, honey. Merry Christmas. I'm so sorry you're going through this. Thank you. But we're going.

To walk with you, okay?

Thank you so much. You hold on. The team will pick up and get you taken care of. This is The Ramsey Show. Hey, guys, it's Rachel Cruz. If your healthcare costs are increasing while your choices are decreasing, check out Christian Healthcare Ministries.

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Giving up your freedom. Check out more at chministries. Org/budget. That's chministries. Org/budget. Jade Walshaw, Ramsey personality is my co-host today. Thank you for joining us, America. Open phones at triple-eight, 825-5225. Those of you that are considering getting on the every dollar app this time of year and getting into Financial Peace University. The last call we took from the lady with five children who hadn't touched a bill in 16 years tells you that you need to go through that class because while I don't mind, and I'm honored for us to be helping her. I don't want you to be in her situation. You should never be in a situation where one spouse does everything and the other spouse has no idea what's going on.

Yeah, when you set yourself up like that, you never know what's going to happen in life. Of course, you hope the worst doesn't happen, but you've got to know what's going on with your finances. Even if something catastrophic doesn't happen, it's your money and.

You work hard for it. You can't even argue intelligently if you don't know what's going on.

That's true. You lose every argument. Oh, my goodness.

That's a good point. You can't... Because you end up being the little boy that's being taken care of by his mommy or the little princess who the husband or whatever. I mean, those are extreme dysfunctions, right? But hers wasn't that. But that's so accurate. But hers wasn't that. She had a bunch of kids, and he's taking care of the bills. That's okay. I do the majority of the finances, no kidding, at our house. But I can 100% assure you that Sharon knows two things about every item of ours. Ours is complicated. With businesses and real estate holdings and other stuff that we have, she knows two things. Number one, she knows exactly where everything is and where we stand on all of our money. No question about any of that. She knows where the bills are and how they get paid. Number two, she knows who to go to.

For the.

Various information, for insurance information, for investment information, for business information, and so on. That's all planned out and laid out. She actually got me on something the other day that I hadn't done. She said, You need to go in. The will's got everything in detail. Everything's laid out in detail, but I don't know what you want done with your collections of things.

Hey.

That's the first time you've talked about Sharon and not said it in her voice.

Okay. Dave, what am I going to do with all those dadgum guns?

There you go.

I don't know what to do with 300 guns. Do you do? I think I need to make a list and tell you how to sell them or which kid needs to get which. That's right.

That's important. Even something as simple as passwords and knowing how.

To get- No, I've got that. That I got them all in one. I've got one of the apps. I don't endorse it, so I'm not going to say what it is. But everything's in that. My personal assistant and my son, who's president of the company, and my wife all have access to that, and it's a treasure trove of passwords- So important. -that gets you and everything. It's all stored, including safe codes to get in the safe in various houses and stuff, all that. But you got to, guys, you cannot leave yourself at a disadvantage. The husband felt like he was serving his wife, but she didn't have to fool with that. But he leaves her set up to now she feels completely lacking in confidence.

But to your point, talking about every dollar, the great thing about it is- It makes both.

Of you do it together.

-you're both on it. It's on both of your phone. They've got the mobile version and, of course, the desktop version. But if you have the mobile, it's on your phone. You open up the app and it's the same login. There's no reason for you to not, even if you're not the one that actually sends out the payments, or even if you're not the one who actually types in the amounts, because there usually is one person who takes the lead on that, there's no reason that you can't spend three minutes a day. You first get up in the morning, look at the app, look at the budget, and see what's on there. That's just part of adulting, #adulting.

There you go. It's justyou make better decisions. The preacher, when you went down the aisle, and now you are- One. One. When you make a decision without the other half of your brain.

Because.

Now you're one, and so if you're doing this by yourself, you're just a half.

That's a really good point. You're using half your brain.

Yeah. You are now redesigned to use your entire brain. Sharon and I make large giving decisions, large financial decisions, large time block decisions. What are we going to do... We're going to do our time, we manage our calendar, our budget, our future planning together. It's a really good marriage tool because it keeps us in high levels of communication. I just want to encourage all of you. Both of you need to know what's going on. That's just healthy. Now, again, one of you is always going to be, maybe your wife is a CPA and she loves doing numbers. She's going to take the primary lady. That's right. That's okay. There's nothing wrong with that. But you don't need to be completely freaking clueless. It just sets you up for problems. I know that's right. Rob is in Cincinnati. Hey, Rob, welcome to The Ramsey Show. Hi, how are you? Better than I deserve. What's up?

Yeah. My fiancé and I are getting married next October. Yay! Thank you. I have $97,000 in the traditional brokerage account, two grand in a separate checking account to help pay the remaining seven grand for our part of the wedding, which includes rings and whatnot. Right now, our household income is around 120 grand.

You don't have a household.

It.

Will be next year.

In October, it'll be a household. Right now, you have you and her. What do you make?

We make $120,000.

What do you make? Well, there ain't no we yet. It's we in October. Now it's me. What do you make?

I.

Make about $60,000. And so does she. Okay, great. Okay, thank you. Thank you. Okay, so when you are married, it'll be 120. Right now, each of you make 60. That's awesome. Very cool. How old are you guys?

I'm 28 and my fiancé.

Is 26. That's good. You're going to go buy a house after you get married?

Well, that's the thing. We want to save for a little bit. We don't know. I've lived in apartments my whole life. I don't know where to begin. We only have one type of debt, and it's her car, which is about $14,000 remaining.

Does she have any money?

I do not. Well, yes, she does. She has a savings account that her dad started for her. It's not a Roth IRA. It is around $21,000 to $23,000 last time we talked, which was a couple of weeks ago.

So she could take that money. She could take that money? She should pay off her car.

Yeah. That was going to be part of my question, too, if we just pay that off immediately with that.

She.

Should, yeah. If you suggest her to pay it off, will she pay it off?

I think so. I don't know how her dad would feel about it, but she's an adult. It's her decision. I think she should. Yeah.

That's interesting that you said that.

I like that. Okay. All right, so you got to finish up the wedding, and then you're going to get married, and then you're thinking about buying a home when?

Ideally, maybe 2026 for a couple of years.

Okay. You're going to pile up cash like crazy and then go buy a nice property with a good down payment or pay cash, huh?

That's the goal. I just don't know how to go about that with saving up for a down payment. If I should just keep that money separate, like in a.

Checking account or- No, you got it in a brokerage account. That's fine. Put it in some mutual funds or something like an S&P 500, or you can put it in a money market, a high-yield savings is fine because you're only going to do for a couple of years. You don't want to take a lot of risk with it.

You do need to keep it separate. You want to make sure you've got 3-6 months saved up first. Keep that somewhere else. Then when you start saving up for that down payment, keep that where Dave said.

I love the idea of saving like crazy for two years and just piloted in that high-yield savings account or whatever it is. It's just the house account, we'll call it. You just dump money in there, dump money in there, dump money in there, dump money in there. Let me tell you, there's two things that are very good about that, Rob. Number one is being married a year, 18 months before you make a decision on which house to buy is very wise, because after you've been living in the same house, married people for a year, you will make a different home choice than you will today. Facts. Right. We always laugh and say it takes, in this case, maybe more true than not based on the father comment, but it takes about a year of being married to know how close to your mother-in-law to buy.

Not too close.

That's the thing, right? You got to get to know each other. You got to get to know life. During that time, the second wise thing is you're going to pile up a big old pile of cash, and you're either going to pay cash or almost pay cash for this house. I love what you're doing. Me too. Go do that. Do not do any of this together until both of you have the same name. This is The Ramsey Show. Fake it till you make it.

It's.

Popular career.

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Your first order. Merry Christmas America. Jade Washaw, Ramsey personality is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Tom and Tenneka are with us. Hey, guys, how are you? Good. We're doing great. Merry Christmas. Good to have you. Merry Christmas too. Where do you all live? We live in Kansas City.

Actually, Atkinson, Kansas. But it's about an.

Hour from Kansas City. Yeah, I know it. Yeah, wow. Welcome to Nashville. Thank you. How much have you guys paid off? $214,944.27. I love it. How long did this take? 48 months. Good for you. And your range of income during that four years? It was 160,000.

All.

Of that time? Well, at the end, it was about 170,000. Good job. What do you guys do for a living?

I work in Health IT.

And I work in law enforcement. Very good. What do you do in law enforcement? I'm a contractor for Homeland Security. Oh, wow. Good to have you guys. Welcome to Nashville. Hey, I love it. That? Yes. What debt was this? $215,000.

Well, I had student loans of about.

$42,000.

$43,000. We also had some consolidation loans. We had credit.

Cards.

Lots of.

Credit cards.

I think it was like 21.

Credit cards that we ended up having.

That was just gracious.

Yes, and just- Just getting rid of those makes your hip work better.

That's for sure. But we also had a loan out against our.

401(k).

Prior to FPU. We were paying that off as well. Just lots of personal loans and just student loans and stuff. What happened.

Four years ago that got you guys on this Ramsey process? Because, I mean, you went from one direction all the way to the other direction. This is a completely turnaround.

Yes, we were.

Doing pre-marital counseling.

And we put.

Our finances together, obviously. My wife looked at me and said, We're not getting married. It's not happening. Whoa. I did. I looked at her- Pre-marriage counseling fail. Yes. The Holy Spirit came upon me and I looked at my wife and said, It's going to be all right. At the time, I didn't have anything to.

Back that up with.

But later on, we were in church and up on the screen came to FPU. We looked at each other and said, That's us.

And here we are. How long have you been married? We got married July 27th, 2019. Okay. Within a couple of.

Weeks, we were sitting.

In church, never heard of FPU, and it came across the screen. Shout out to City Center Church, Pastor Matt and Jeannie Perkey at our church. Thanks, Pastor. Yes, for offering your program. We were there and saw it come across the screen. As soon as we.

Saw it, we literally just looked at each.

Other and we knew that that that was us. The Lord had confirmed what he had.

Said.

Before that. We both knew we were on the same page and knew that God wanted to do something. Also, you were like, I was right.

I love it. Financial Peace University. You guys jump in there and boy, are you ready? We are ready.

We.

Jump in with gazell like... It wasn't like you had to be talked into anything. You're like, Something's got to change and this is it. I love it. Follow the baby steps. They work. There you go. Treat your budget like it's the Bible, like it's a lifelong commitment. Okay. Stick to it, in other words. Stick to it. Yeah, absolutely. I like that part.

We knew God was behind it. That gives you a drive of confidence. 100%. Yes. That's 100%. Now, you guys had.

A- It lowers the whining. It does. If God said there's something, it's like, Okay, I can whine about it, but it's particularly lame.

Yeah, that's a good point.

But what a.

Journey through it to watch how… I mean, there were so many times that we just looked at our bank account, we were like, Where did this money come from? How are we paying off all of this? And how is it?

It literally.

Did just snowball. Like you say, Dave, it works. Well, I wanted to ask you guys because you guys have a nice income and you've had it, it sounds like the majority of the time. What was the hardest part? I mean, did you guys have to side hustle or was it truly just looking at the budget and just cutting back? We really did. I have to give kudos to my husband. He worked overtime for well over two years. We both went in with gazette-like intensity, and he was working 12-hour days. I mean, he was working.

60-plus hours every week consistently.

And.

On top of that, he had an hour or more drive just to get to work every day. So literally, he was.

Going, driving.

Working, coming home.

Falling in bed.

Getting up and doing the same thing in a couple of hours.

And thank you for that. And grow on, hug.

And thank you for that. But he did. That was our number one thing. Also, we have about an acre, a little over an acre of land, and so.

We've got.

Some cattle. And so we sold beef just off of that little, you know what we can do? So no major ticket items. We just put everything together.

We did.

Poshmark and just got rid of things that we didn't need, and on eBay. And he did Facebook marketplace. I don't get on Facebook, but he does. So he did Facebook marketplace and- Just being intentional. Yes, just being intentional and constantly to keep that going.

God did the rest.

Obviously paying attention, working on it together were the keys. One of the big things that you took away from Financial Peace University that you went, I should have. I knew that. That's brand new information. I never heard that before.

Do you have anything?

Just that.

Just follow your steps.

I think that the one big thing that I got from it is that.

With man.

It's impossible. But with God, all things are possible. Amen. Amen, I'm in love with that. I thank you for hearing God's voice with starting this.

And to know that you can't.

Do it on your own.

But if.

You trust God and you are obedient and you follow the steps, that it really does work and it makes sense.

It makes sense. I mean, the principles are grandma's common sense, but they're also biblical, obviously. Get out of that, stay on a budget, live on less than you make, be generous, be saving and investing. Every one of those things show up in scripture, and they show up in grandma's common sense. But most of us refer out in both things in America. When you come to them, it's like brand new information almost. Common sense is not common. It wakes you up and it energizes the crud out of you. You guys are amazing. I'm so proud of you. Thank you. I'd have to say, Dave, when I was growing up and everything, credit cards around my family and stuff, it's like if.

You didn't have.

A credit card, you weren't normal. Right. Well, that's America. Right.

I grew up very resourceful, so I was already eating beans and rice.

But we.

Had to learn.

How to be- She's country and I'm city. I love it. Well done you two. Thank you. Well done. Okay, so somebody's listening, they're brand new, they're thinking about getting married and pre-marriage counseling. They look up and they got $200,000 in debt. What do you tell them? I tell them to.

Trust God.

If God.

Can do it through us, God can do it through you.

There is nothing that's.

Impossible with Him. Follow the baby steps like Tom said, they do work. Don't give up. Stay diligent. God's got it. I love it.

Well played you two. Well played heroes. Wow. Love people taking control of their lives and stepping up. Man, you start your marriage off on a great foot. Pre-marriage counseling went a little rough, but the marriage started off great. Yeah, this is great. Way to go, guys. Hey, we got the live and give box for you. It's got the Baby Steps Millionaire's book in it because that's where you're headed next, total money makeover book. You can give that away and get somebody started, and a financial piece university membership. Same thing. You can go, This is what did it for us. This changed everything for us. One of our pastor and church started teaching this, by the way, you pastors and churches out there, listen to that. It's important you have this class in there because there's someone sitting there going, I need some help. It's like your job to help them by having this class available. Thank you, guys. 10,000 Financial Peace University classes last year were taught. 10,000. It's important. It's very important. Thank you, guys. Tom and Tenneka, Kansas City area, a little about an hour west of Edison, counted down 215,000 paid off in 48 months making 160-170.

Let's hear a great debt-free scream.

Three.

Two, one.

We're debt free!

This.

Is how it's done, ladies and gentlemen. Man, Jade, that's fun.

Very good.

This is The Ramsey Show. I get heartbreaking calls and emails all the time from people dealing with the loss of a spouse or parent, and many of them can't even grieve properly because they're too stressed about the money. This is exactly why you must have term life insurance. You cannot leave your family in this situation. Let the team at Xander Insurance help. I've trusted these guys for over 25 years, and I know they are caring and professional. Go to zander. Com or call 800-356-4282. $5,000. Yeah, we're going to be giving away $5,000 this week. Wednesday, December the 20th is the last day to register for the free Ramsey Cash Giveaway. Go to the website, ramseysolutions. Com/giveaway, and sign up. You can sign up every day. Somebody's going to win it. No purchase necessary, $5,000. You ought to check it out.

Do it today because tomorrow is the last day.

That's tomorrow. That's right. Well, depending on when you're listening. Wednesday the 20th, that's what your cutoff time is, and so don't miss this. John is in Orlando. Hey, John, welcome to The Ramsey Show.

Hey, Dave, how are you?

Better than I deserve. What's up?

I have 10 rental properties, and I am considering selling two of those to pay down two of them or put that money towards my house. I'm just trying to get your advice on that.

Okay. How did you come to this conclusion?

I don't know. I've been buying over the past three years, and with the interest rates high right now, I've just been trying to hold off on purchasing and then just using the equity that I do have to move that around and use it to make the most sense for me, I guess.

Do all of the rentals have mortgages on them? All 10 of them?

Not all of them. One of them is paid off, and then the other nine do.

The two that you're talking about selling have some equity, but they have mortgages. Yes. If you sold those two, can you pay off your house?

No, I can't. Between those two, I have about $210,000 worth of equity. I could use that to pay off two of the rental properties that are worth around $100,000 right now. They have about $100,000 on the mortgages.

What do you owe in your home?

I could put that put in my house. I have about 55.

Listen, if I'm honest with you, my goal, numeral UNO, would be to sell whatever I have to sell to get my personal mortgage debt-free. Because it's crazy to me to have all of this real estate and juggling all these balls in the air, but your own personal mortgage is not paid off.

Right. Yeah, and I was the only reason I wasn't considering selling them all or putting everything towards paying down my mortgage is just because I can comfortably cover it just with my job. The end goal is to have a real estate portfolio and do that full-time at some stage.

Well, John, you can certainly go any direction you want to go. I love real estate. I've got a large real estate portfolio myself, several hundred million dollars worth. I pay cash for everything I buy, including real estate, or I don't buy it because two things that happen when I do that, three things happen when I do that in real estate. Number one, it's the best way to get great bargaining, is close it Friday, and I'm paying cash and I want a deal. You can buy distressed situations, you can buy into bank, REOs, everything else. You can do it quick. The quick means a lot to people if you're looking for a bargain. Number one. Number two, when I pay cash, my cash flow, since I don't have any payments, is astronomical amazing. It's flowy. Number three, my risk profile goes way down because you just said some really dangerous words like no one ever lost a job in your industry.

Right. Right.

Well, we know that's not true.

Yeah. I was considering taking that extra amount of rent that I'd be getting in from those two properties that would be paid off and throwing that towards the mortgage.

That's fine. What do.

You make a year? The payments can be the same. About 250,000.

Good. You got a great income. Here's what I would challenge you to do. You're sticking your toe in the edge of doing things the way I do it. I'm way over here on the right. Most real estate people are all the way over on the left, correct? You're in the middle and you're thinking about moving in my direction, but at a slower pace maybe than Jade was trying to get you to go. Do you follow me? Yes, sir. Okay. I would challenge you to consider establishing a strategy to become 100% debt-free before you add to the portfolio. Now, we can do that two ways. There are three variables. One is selling some property, two is utilizing your fabulous income to reduce debt, and three is time. How much time is going to elapse while we do this? Because five years of making 250,000 is different than two years making 250,000, okay? If you said, All right, I'm going to sell two. I'm going to use that rent that's freed up. I'm going to crank on my personal lifestyle and start throwing it at something in this mix. Every time one of those is debt-free, we're going to add to the cash flow to get another one debt-free, and the cash flow to get another one debt-free to where at the end of the story—and the story is a three-year story, a five-year story—we haven't added anything to the portfolio.

We have subtracted two properties or maybe more and have become 100% debt-free rentals and home. Dude, do you know how much money you're going to have coming in then and how quickly you'll be able to buy that next property for cash? It'll be a lot of amazing.

I understand what I was thinking too.

But you've got to dip back to bottom and clear the table first before you see that increased cashflow, substantial increased cash. My point is if you want to go at this a little bit more gradual than Jade was suggesting, I'm not going to yell at you about that, but I do want you to lay a strategy out. You like running the math and running the spreadsheets, don't you? Yes. Okay, so run a scenario out where you're done in five years and then ask yourself, Okay, what variables do I have to change? What else have I got to sell? In other words, or what extra lifestyle have I got to cut to do it in three years? When you do that, you're going to look at it and go, It's going to make you think about it. Because it lowers the risk profile and it raises the cash flow every time you do this. Does that make sense to you?

Yeah, it does. Yeah, that's a great plan.

Very cool. Thank you for calling in.

Very interesting. Very interesting. I wondered if he had any other debt.

I'm sorry, I didn't give you a chance.

To jump in. Well, here's what I was thinking. This is what Jade's brain said. The average person gets out of debt two, two and a half years. I'd want a plan that gets him out in two, two and a half years. Then at... Go ahead. You're the.

Real estate guy. The guy is a processor. I could see that. I think he's going to, when he lays it out for five years, the math is going to talk to him, and then he's going to dial it back and do it in three. Because that's how my brain works. That's how I get that guy.

You.

Were that guy. I was that guy on the other... No, I really wasn't. He's much more conservative than I was. I borrowed on everything. I borrowed on the dog and the cat it was chasing. I borrowed on everything. He's much more chill, and he's got some equity and that stuff.

Wait, so that's chill. Because I'm looking at this, my heart's beating fast. I'm thinking 9 out of 10 properties. Compared to me.

Now, I was like one of those idiots on TikTok. That's what I was like. Oh, my gosh. That's why I'm willing to call them idiots because I was one of them. The nothing down goobers. I would go and borrow 100% of the value of the house. Here's worse than this. I would buy a house for $150,000 that was worth 250,000, and I'd borrow 250 on the 150 purchase, put 100 in my pocket to go do the next deal with.

Oh, yeah, I'm clutching my pearls.

Okay. All right. Your throat is tightening up now. But that's how dumb I was. I didn't think anything about it. To me, it was just a monopoly game. Yeah, well, that's what everybody's doing. That's what these idiots on TikTok, they're doing the same stupid stuff. But the only thing TikTok when I was doing it was a clock. That was it. But there wasn't anything like that. There was TikTok. All right, Dave. I mean, it was... There was no cable TV even to tell you how to do it. It was just like.

Nothing.

Down, guys selling cassette tapes.

It's like you go to the ballroom.

Of a hotel. You go to the ballroom, the tired ballroom at the hotel, and the guy with the polyester suit and the disco chain starter set gets up there. Oh, man. And he's going to tell you how to get rich. I was such a red neck, I believe the idiot. Oh, my God. I signed up for all of it, man. I did every bit of it. That's why I get so exercised about people putting out that same stupid butt information 35 years later and acting like they discovered something. Like, This is new. No one doesn't know this. You boomers don't know this information. Honey, we invented stupid before you were a gleam in your mother's eye. Wow, this is unbelievable. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walshaw, Ramsey personality, and author of the brand new book Money is Not a Math Problem is my co-host today. As we answer your questions about your life and your money. Merry Christmas. We're so glad you guys are with us. Thanks for hanging out.

Christy starts this hour in Louisville, Kentucky. Hi, Christy. Welcome to The Ramsey Show. Hi, hello. Hi, how are you?

Doing great. Thank you all for taking my call. I really appreciate it.

Sure. What's up?

Okay. Well, I used to be a single mom of three, divorcing, and my plan was, after I got the kids out of the house because my budget was really tiny, to start tackling my student loan debt and purchase my house that I live in from my parents for what they put in it to get it going for me. Two years ago, and kids are out of the house now, so two years ago, I've remarried. I knew my husband had some credit card debt from his prior marriage. However, I know things have been tight since we've been married. It's like we're Robin Peter to pay Paul, Robin Paul to pay Mary. After listening to you all the last couple of weeks, I'm here like, I can do this, do the budget and app, the every dollar, the free version. We can do this. However, we sat down, he's got 22 credit cards.

Well, how much does it total? Well, that's.

An old crap moment.

I'm sorry. That's an old crap moment.

Yeah. This is where a lot of our money is to- Yeah, I think. Yeah.

How much.

Does that- How much does he owe on these 22 credit cards?

Eighteen thousand.

I guess he knew this.

I'm going totell you, he did.

I hope he did.

What was his reaction to your reaction?

He's like, Well, maybe after the holidays, take a debt consolidation loan.

Yeah, because you can always borrow your way out of debt. Right. That's dumb. Okay, what was his reaction? Is he ashamed of this? Does he think he's stupid? Did he feel defensive?

I was defensive on it a little bit because a lot of it, he said, come from his bar marriage.

Is he currently using credit cards.

Or is.

All old?

He.

Said this past weekend-.

He's still using them? Yeah. Okay. -put a.

Battery in his car.

You guys have some conversations to have.

What is your income and what is his income?

Okay. Mine is $33,000 a year. He's doing DoorDash. So it's anywhere-.

Why is he not working?

-5-6 days a week.

Why has he not got a job?

That's a good question. He likes working on his.

Own, he says. Did he have a job when you met him, or he was doing this when you met him?

Whenever I met him, he was doing lift and Uber in Nashville, and making $1,200 a week on that.

Gross, before taxes, gasoline, and wearing a tear on the car.

Exactly.

He might be breaking even.

Okay, so there are some problems here. How much student loans do you have, by the way?

$110,000.

Okay. Sometimes when we get into debt, it's as easy as saying, All right, I make my budget, and I cut back here and there, and over time, I'm out of it. Then sometimes there's more to the equation where there's an income side of it where you can side hustle till you're blue in the face and you're going to be working it forever. In that case, that's where you guys are. Your core income is not where should be. The challenge here is for both of you guys to really begin looking at what's it going to take for me to get my income higher. I mean, $33,000 is the average is $67,000. You see where you're at on that spectrum.

What do you do for a living?

Customer service for a living.

Who got $110,000 worth of student loans?

That's me.

In getting a degree in what?

Psychology and counseling, because that was the quickest thing I can get. I've always wanted to teach.

Why are you not utilizing that in some way?

I really don't know if any job in our little local area for that degree without getting a masters.

Yeah, okay. It is probably limited because if you're going to do counseling, in most states, you do have to have a master's. But there's a lot of things you can use psychology for. For instance, you could move into the marketing area of a company and make three times what you're making. Jade's right. How old are you two? Your kids are grown. You're 40 or 50.

Yeah, I'm 46. He's fixing the term 50.

Okay. All right. This is the time that you all have the first, most lucrative careers of your lives, and the both of you have to decide what that is and start working on it. You don't want to be an 80-year-old Uber driver.

This.

Is not a plan. You don't want to be doing DoorDash at 76. This is not a plan. You don't want to be in customer service at 76, especially when you're looking at $110,000 student loans and $18,000 in credit cards and everything you do, like put a battery in your car, looks like more credit card debt. Something's got to change, would you agree?

Oh, yes. Yeah.

I'm with Jade. I think you guys do need to get on the same page, and I think you need to make a commitment to borrow no more and to begin to reduce these debts, and you're going to have to rethink both of your careers because you're going to struggle. This is going to be very hard 20 years in front of you. Very difficult if you guys do not deal with this core issue.

You.

Can try to ignore it, but it's the elephant in the room. It's going to stomp around and leave the furniture broken.

Yeah.

Is this making sense to you? Yeah. You've avoided this and kicked the can down the road as long as you can, and now the can has come on and hit you in the back of the head like a boomerang. $110,000 on student loan debt. How long ago were at you in school?

Graduated 2009.

No, 13. 15 years was my guess. I wasn't far off. Okay. See, it's time to deal with this. Do you agree? Oh, yeah. Kids are grown and gone. Okay, so we're going to get out the credit cards. We're going to have a plastic surgery party tonight, honey. We're chopping them all up, every stinking one of them. This has to end. That's how I would have reacted had we found this, okay? It wouldn't have been as nice as you. You're a little sweeter than me. This is stupid. It has to stop. How about that one? Let's try that. I like it. There we go. This is The Ramsey Show. Jade Walshaw, Ramsey personality, author of Money's Not a Math Problem, our latest quick-read release, 57 pages you cango through it one setting and you will learn a lot from Ms. Jade. Check it out at the ramsysolutions. Com store right now. The Ramsey Show question of the day sponsored by neighborly, your hub for home services. There are some things around the house you can handle yourself, but electrical problems probably aren't on the list. Contact Mr. Electric for licensed professionals. That's what you want there.

You don't want this, you want the licensed professional. It's a good idea. Yeah, they'll give you upfront pricing and they'll take care of you from your neighborhood. Mr. Electric online at neighborly.

Com/ramsey. Today's question comes from Arlo in Texas. Are those companies that say they will help you deal with the IRS legit? My husband and I had several years of unfiled taxes in fear that we owe the IRS a huge amount of money. Can those companies who claim that they can stop the IRS from garnishing your wages actually do it? Well, I'm just wondering why you're waiting till you get to the point of garnishing of wages. Why not just dig a little deeper, contact the IRS, and find out what you owe and pay it. By the way, if you're in baby step two, if you're working on paying off your debt, this is going to go right to the top of the list. This is going to be numeral UNO, nothing ahead of it.

Because you don't want that to happen. I would change one thing in that suggestion. We're not going to contact the IRS. We're going to contact a tax professional and file our taxes.

Well, yeah, you.

Got to file your taxes. And tell the IRS what you owe. They're not going to tell you what you owe. You don't want to ask the IRS anything because they don't know either. They're dumber.

Than a rock. That is true. They send those statements and it's like-.

Yeah, they just make up crap. But no, you need to catch up on your tax filings and figure out where you are. The answer to your question is no, those companies don't work. Okay, so here's the thing. If you file your taxes and get caught up, the likelihood of you being criminally charged for failure to file is very low. When you come forward, come out of the cold, so to speak, get back on the grid, so to speak, and file your taxes, they very seldom criminally charge you. Because failure to pay the IRS is not a criminal offense. Failure to file is a criminal offense. About 2,572 people or something like that every year, last year it's 2,772, get put in jail for not filing their taxes. It is a criminal offense. You don't want to screw around with this. You need to, right now before Christmas, immediately, get online at ramseysolutions. Com, click on our tax professionals, our ELPs, our endorsed local providers for taxes, get your crap together, go over there and get your taxes filed immediately. Even if you don't pay them a dime and you don't have a dime. That's right.

That's step one, get rid of the probability of a criminal issue. Then we'll deal with the mathematical issue of can they garnish you wages and are their reductions. Let's get into that for just a second because people are spending more time at home during the holidays and watching cable TV and cable news where you see, We have former IRS agents working for us, and we can reduce your tax burden. If you have $10,000 or more in IRS debt, contact us and we'll make your life okay. In the fine print, it says, Bull crap, okay? Because that's what it is. Here's the deal. That you can have a tax professional represent you that is not on cable TV and they can help you with the process. There's a couple of things you can do. Thing one is what Jade said, scratch the money together and pay them. If you're not anywhere near that, at least contact them and you can get on a payment plan.

Payment plan, yeah.

It's ridiculous penalties and ridiculous interest. You don't want to do that. If you can get the money anywhere else, including borrowing it somewhere else and changing your IRS debt into credit card debt, I would have you do that.

Because it's a better deal. Hey, say that again, because I told somebody that one time and they had my head for it.

No, you've got one debt that's a bad debt. I would rather you have a different debt that is better debt. I agree. Okay, let me just tell you. Credit card debt is bankruptible. Credit card debt has to go through legal process to garnish your wages. Irs debt is not bankruptible. Irs debt has a higher interest rate than credit card debt has. Irs debt can garnish your wages without going to court. They don't have to get a judge's permission. All other forms of debt have to. This is the worst debt to have. If you can make it into another debt, you got a $20,000 IRS debt, I would a lot rather you owe $20,000 on credit card than $20,000.

On the KGB. Amen.

Okay. If you guys don't like Jade saying that, well, you're stupid. Okay, so Jade was right when she said that. Don't be stupid, okay? It makes life painful. Now, the next thing is this, you do the payment plan. Now, the other thing they say is we can reduce your tax burden. Bull.

Yeah, they'd have to do something shady.

No, there's one way you can do it legally, but it's so thin and narrow is the door. It's called an OIC, an offer and compromise. You can submit to the IRS your situation and ask that they accept less than the actual tax debt. Try to get them to.

Settle with you. Like, as a hardship? Yep.

When do they approve an offer in compromise to take your $100,000 debt and allow you to pay 20 instead? Okay.

Well, you'd have to prove that.

You have nothing. Yeah. No income, no potential for income, no assets, no house, no car, no money. You have to prove what they call palper status. Wow. Poor people. You got to be homeless, basically, penniless, and then they will approve a compromise because they don't think they're going to get their taxes anyway. But I'm telling you to get an OIC through, and I've gotten a few of them through. I've worked with clients over the years that were in hardship situations and had massive tax bills, and we worked with tax attorneys that we paid good money to, not some goober on cable television. You can get an OIC through. But I'm telling you, out of 100 that I work on or I have worked on over the years, I've gotten three or four through. It just doesn't happen.

You don't want to be on that status.

Well, you got the things you... It's like, Well, it's inconvenient. They don't care if it's inconvenient. You have a car, sell a car and pay me. You have a house, sell your house and pay me. They don't care if you're homeless. You don't care if you're your grandmother's diamond brooch. They don't care. Sell it. They want to know everything. Not revealing assets to them in this process is also criminal fraud. You're just playing with tiger here. You don't deal with these people. What you want to do is get your taxes filed, get on a payment plan, roll up your dadgum sleeves and clean up your mess, and quit looking for easy fixes for major stupid stuff. Usually, major stupid stuff comes with major problems to fix it.

There's.

No quick and easy. You don't get out of debt quick. It took you 20 years to make the mess. You're not going to get out in 20 minutes.

For the self-employed people that are listening-.

Pay your dadgum taxes. -just file your quarterly.

Please, just do it. If you don't want to do it yourself, invest a little bit of money and just hire a bookkeeper to stay on top of this and make sure that that is going through properly for you. I'd rather pay them a little bit of money every year than deal with a tax burden and deal with getting myself in hot water with the IRS.

I'm 1099 and I forgot I had to pay tax. You forgot? I made 100,000 bucks and paid no taxes for two years. That means you made 200,000 bucks. That means you have a tax bill of 50 grand laying around. Or more. That's a lot. You do not want to have this crap sneak up on you. It's not really sneaking up on you. We just discovered denial is not just a river in Egypt. You totally stuck your head in the sand.

How's that? Okay. Let's make it clear, Dave, because we say all the time, don't use a professional for this. Don't use a guy for this, but use a guy for this. Make it clear.

When do we- Do not use cable TV people to fix anything in your money.

We don't do consolidation.

If the commercial runs between Snuggies and walk-in bathtub, it's not a credible operation, okay? Hello.

Not Snuggies. Think about it.

If your financial advice comes between walk-in bathtub and the Snuggies, you got bad financial advice. I'm just telling you, okay? This is what you got. Think about what's going on around you, okay? This is The Ramsey Show. Jade Walshaw, Ramsey personality is my co-host today. Thank you for joining us America. Merry Christmas to you. I'm Dave Ramsey. The phone number here is triple-eight-eight-two-five-five-two-two-five. Williams in Charleston, West Virginia. Hey, William, how are you? I'm doing pretty good today. Can you hear me, sir? Yes, sir. How can we help?

All right, Dave. I'm William, I'm 25 years old. I make 90K a year as a truck driver. I'm currently on baby step two with, I would say less.

Than.

$10,000 of debt.

A.

Vast majority of that.

Being medical.

No credit card debt.

My.

Cars are paid off, and my wife, she's 25, working part-time, and she's able to go to college for free through my employment.

Cool.

Our ultimate goal is we are wanting.

To, in.

Two years, be able to homestead and start our family. What I've came across and I've heard is to consider looking at getting a homestead property under a business or LLC loan because it's a lower interest on the loan than most mortgages right now, and it could allow that property to be more of a tax advantage with being able to write off different things and different equipment for the homestead. I was wondering what your opinion was with this.

Well, to start with, it sounds like you're reading people that are proponents of homesteading and reading lots of articles and hanging out with folks that do a lot of homesteading. It made you susceptible to reading this stuff because that's not mainstream information, and it's also not accurate. Having an LLC and getting a business loan is a higher interest rate than a mortgage, than a personal mortgage rate. When you say, homestead, you're talking about buying a piece of ground with a house on it that you're going to live in and raise animals and food and so forth, correct? Yes, sir. Okay. What you need is you just need to go get a mortgage and buy your house with some property with it. It's going to be cheaper. Your personal residence interest is not a deductible business expense under any circumstances. Now, if you operate a business on a piece of property that is your residence, for instance, let's say you bought, I don't know, make it up 30 acres and you put some cattle on there, okay? Yes, sir. The cattle operation is a business, and you can deduct expenses associated with raising the cattle, but not expenses otherwise.

It does not need to be a LLC. No.

You- You can buy five cows, okay, and sell them at a profit and deduct the vet bills and deduct the feed. Deduct if you had a piece of equipment you were handling the cattle with. You could maybe depreciate that piece of equipment. To the extent you use it on the cattle. But if you buy a truck and once a year you touch a cow with it, you can't write the cow off except one day a year, one-365th of the truck. It's a useless bunch of crap to try to write your truck off, okay? But if you've got a very specific piece of information that is a livestock trailer and the only thing it is used for ever is to transport cattle in or out of your operation, then that trailer could be either expensed or depreciated, depending on the particular portion of tax code. But you could do all of that as a sole proprietorship. You don't need an LLC. You can do it. It's called a Schedule C on your taxes. Schedule C is a small business, and a small business, you write on there what your income from the business was, what the expenses from the business were, and what the profit, the income minus the expenses is the profit, and the profit is taxable.

So you have deducted... You've had a deduction for the expenses on the Schedule C. Does that make sense?

Yes, sir.

You do not need an LLC to do that.

Okay, this is the first.

Time I'm hearing of a schedule.

C business.

Yeah, it's called a sole proprietorship. You would open a separate checking account at your bank, Cattle by William or William Smith or whatever your last name is, DBA doing business as cattle by William. It has your Social Security number on it. You don't even need a tax ID number for it. Then run all of your business income from the cattle into that account, all your business expenses out of that account, and everything that's written down about that account ends up going on the schedule C, and thereby you have deducted your expenses from the income that the cattle created. But it's not a full tax deduction that you get on your lawnmower because you're homesteading. You don't get that.

Okay.

Does that make sense? Yes, sir. See, homesteading amounts to, I'm going to grow some of my own food, and I'm going to grow some food and sell it to other people, right? Yes, sir. Okay, the food you grow for your own use, no tax deduction. The only savings you get is you get really good food, A, and B, you get cheaper food. Agreed?

Yes, sir.

I've been looking at homesteading with my.

Wife as we're getting more and more into the Bible, and I'm reading a lot more about how everybody back then was.

Having farms and.

Getting food. I think one, financially, it.

Makes sense, and two, it is the.

Best quality that I feel.

Like I can get to.

Give my future children.

Hey, a kid being raised on a farm is about as good as anything can be. They know how to work, they know how to get dirt on their fingernails, they know where babies come from. I mean, everything. Being on a farm is a good thing, right? When all of America had spent some time on a farm three generations ago, this was a better place. I completely agree with you. From a common sense perspective. We can bring the Bible into it if you want, but I just think it's a great place to raise kids. I got no issue with it at all. I mean, my kids are suburban, and they survived because I made them do work. But what you're talking about is a fine standard of living, is find a way of doing things. But there are no magic tax pills that go along with it or better interest rates that go along with it. You're just buying a small farm to operate for your family.

I mean, it's the same principle that rolls into anything else. Even if you operate a business from your home or you work from your home, there's a certain amount, but it's not everything. It's only what is directly related to that business.

Well, and here's the problem. For instance, can you write off a home office at home? Sure. Yeah. You buy a $300,000 house, and it's 3,000 square feet, and you have a 300-square-foot bedroom. Well, that's 10% of your house, 10% of the 300,000. Oh, wait, we got to take out the lot because you can't depreciate the lot. So the lot is 100,000 of the 300,000. So now it's only 200,000. Now it's only 20,000. Then you divide all of that by 27 years. By the way, when you get ready to sell the house, you have recapture. All of that depreciation you took is added back as a taxable event. Otherwise, if you had sold your personal residence, 100% of your growth on the income or growth on the value would have been tax-free. So screwing around writing off one of your bedrooms as a home office ends up actually being a stupid idea.

That's a good.

Point, Dave.

I'm.

Thinking long term. Yeah, because when it comes back to bite you when you sell it, because you got 100% recapture on that appreciation that you took. People are going to go, I wrote off. I'm going to write off. You can't write off that. You can only write off what actually is attributable to the actual function of the business. Home office or homesteading, just because you saw it on TikTok, it does not change anything. It's not real, okay?

We actually have a great article on rs. Com about that very thing. We do. Yeah, we do. I bylined it.

Oh, written by Jade.

It's on there. It's on there. Check it out. Yeah, about knowing what to write off and knowing what not to do and just all that good stuff. So if you have a chance, check it out.

Now, here's the thing. Homesteading is a great idea. Running a business and starting it up out of your house, great idea. Doing either one of them for the tax benefits, dumb idea. There we go.

Yeah, I'm.

With you on that. This is The Ramsey Show. If you want to know how to keep more of your hard-earned money in your pocket, not the governments, then listen up. There are certain tax deductions and credits you can be qualifying for by the end of the year with help from an experienced and trusted tax professional. If you don't have one, check out our Ramsey Trusted Pros. They know the tax code inside and out, so you don't have to. They'll help you file when tax season is here. Get a trusted pro by going to ramseysolutions. Com/taxpro. Ramseysolutions. Com/taxpro. Jade Walshaw, Ramsey personality is my co-host today. Thank you for being with us America. Merry Christmas. Parker is in Portland, Oregon. Hey, Parker, how are you?

I'm good.

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

I just bought my first house six months ago, and I just wanted to get your opinion as to whether or not I should turn it into a rental to start paying it off faster.

No? No. No. How old are you?

Twenty-one.

What's the house worth? $245. What do you do for a living?

I'm a tax accountant.

Okay. What are you making?

$63,000.

So you can pay the bill, right? Yeah.

Do.

You have any other debt?

Nope.

Good for you. Okay. First thing I do is just sit down, do a budget, and pay your house payment, enjoy the house. Sounds like it's a very nice property. How many bedrooms?

It's not as big as you sound. It's just a two-bedroom, two-bathroom, and unit condo.

Okay, all right. Well, at 21 years old, it's a pretty impressive purchase, okay? If you want to put in a roommate to try to help you with the cash flow, that's not a bad idea or an unusual idea. But no, you do not need to be a landlord in order to pay your house off faster. That's going to work backward. Landlor is expensive. People tear up stuff.

I was going to say moving back into a house that you've turned into a rental for the last five years, it's not the same house anymore or the same apartment in your case anymore. It's going to feel totally different.

Okay. Are you not liking the property or you're not liking the bill?

No, I.

Can.

Afford the.

Bill and I love it. But I was just trying to think of... I was planning on moving in with my boyfriend in June and then turning it into a rental and then making extra principal payments on it.

How long have you been dating the boyfriend?

A year.

I wouldn't do that. I definitely wouldn't do that. I like Dave's idea of getting a roommate. I feel like that's the quickest way to get extra income in, make those extra payments that you want to pay so that you can pay down this mortgage quickly. What's your goal? When you say, I want to pay this down quickly, what's the timeline in your mind?

Timeline is 10 years.

Okay, I like that.

You're 21, you're going to get there with no boyfriend and with no renters. If your boyfriend turns into your husband, we can have a different discussion. But if I were you, now again, you called us to ask what we would do, and that's what we're duty-bound to tell you based on the fact that I am old and have experience, I have to tell you these things. It's just like a rule and all.

I mean, let's talk about why, though, because when you suggested the boyfriend thing, what came to my mind is I'm thinking, if you go live with the boyfriend, if something happens, you guys break up, you broke up tomorrow night, you've got a renter in there who's under a year lease or however long the lease is, now you're homeless because you've got a renter and you and your boyfriend broke up. That's what my brain immediately goes to. What's your mind go to?

Get married if it's time to get married. I was your age when I got married, and we've been married 43 years, and we've had lots of renters and all that stuff. Actually, Sharon and I were 22.

Yeah, same here.

That's the thing. So 42 years coming up, I guess it is. But anyway, I would just tell you, if this guy is worth doing all this for, he's worth marrying. And if you're worth all this, then you're worth marrying or not. But don't make financial and economic decisions that are interwoven with people you're not married to. It gets you in all kinds of pinches. One of them was just outlined by Jade right there. You can do what you want to. I think you're fairly level-headed and ahead of the game for a 21-year-old. You've purchased a property, you've taxed accountants, you're making $65,000 a year, you're living in Portland, Oregon, on your own. You're making it. Life is good. I think you got a lot on the ball. You sound like you're really sharp. Don't blow that by trying to speed something up artificially, whether it's the relationship or whether it's the pay-down of the house. Just be the tortoise, don't be the hare. Be steady. Boom, boom, boom, boom, boom, boom, boom, boom, boom, boom. As a tax accountant, if you're doing accounting for individuals, you are going to discover people that tried to get rich and how quickly they went broke.

I'm trying to keep you from that side of the equation because you seem to be very wise beyond your years. I want to keep you back on the inside the equation that somehow your parents got you on to start with, and I want to keep you there. If I sound like an old fogey, then chalk it up to the fact that I'm an old fogey. So there you go. Open phones at triple 8-825-5225. Jade, truthfully, I mean, the truth is this, okay? If you call into the show, our duty-bound thing is to love you.

That's right.

Enough to tell you the truth. Sometimes that's funny, and sarcastic, and sometimes we're a little mean. Oftentimes we tell you something you didn't want to hear. It's not unusual either. Yes, that's right. But our goal is not to... We're not taking a poll for popularity.

No, we just want the.

Best for you. Our goal is to actually help you. That five years from now you go, I wish I had done what they said, or I'm really glad I did what they said because they know stuff I didn't know and they've been down roads I haven't been down. They've helped people in more complicated situations than I'm in. It's what we do. That's right. It's what we do. We spend our whole lives doing this stuff. We're heavily invested in it, intellectually, emotionally, spiritually, prayerfully, financially, everything. We're invested in this. That's right. Never confuse that we're doing anything here except out of an act of love. We love doing this. We love helping people, and we love you guys. We want you to win. If that freaks you out, hey, that's okay. We love that. Emma is in Milwaukee. Emma, what's up in your world?

Hey, Dave. Hey, Jade. How are you guys doing today?

Better than we deserve. How can we help?

Awesome. Super excited to talk to you guys today. My question for you is I recently got a promotion and it over doubled my income. Wow!

What are you making?

About 150 right now.

Nice. Wow! How old are you?

Twenty-seven. You're killing it. You're way to go.

Love it.

I don't want to tell you what I was making when I.

Was 27. It wasn't that much. How can we help?

Yeah. Basically, this has brought me to Baby Step 4 a lot quicker than I was anticipating. I am a master of Baby Step 1, 2, 3, History. However, I have my two-sixth month emergency fund saved away. I also have a little extra on top of that, totaling in 23 grand. I'm single. I currently rent. I have no kids, no other major payments. I've been living low maintenance for quite a while now. What I'm wondering about is how to go about investing properly. I can give you some of my company's 401(k) situations. And then also on top of that, is it a wise decision to purchase land from my family farm right now through a land contract?

Well, let's start.

You're doing everything right.

Go ahead. I was going to say, well, let's start with the investing side of it.

Yeah. How about that? My company will match my 401(k) contributions at the rate of 25 cents onto the dollar up to 8 %. They also offer a Roth that they will match eight %.

Let's do that.

Do that. Okay. And you're going to put up to maybe step four. You know this stuff, Emma, 15 % of your income. And you're going to put it in four types of growth: stock, mutual funds, growth, growth and income, aggressive growth, and international. On the other thing, never do a land contract because you do not have title to the property. If you paid the property down in half and half equity, and the person who actually owns the property gets in a car wreck, gets sued, they have a lien against a property that they own, you don't own it, but you have a contract they can't deliver on. So you never do a land contract. If they want to deed it to you and give you a mortgage, you can talk about that. But no, we're not doing any land contracts ever. Very weak position for the buyer, very dangerous position for the buyer. Never do a contract for deed or land contract, which is the same thing. That puts us out of the Ramsey Show in the books. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships.

I'm Dave Ramsey, your host. Thank you for joining us America. Jade Washaw, Ramsey personality and author of the new book, the new quick read, Money's Not a Math Problem. She's my co-host today. Thanks for hanging out with us. The phone number is triple-8-825-5-225. Merry Christmas. Kendray is with us to start this hour in Houston. Hi, Kindray. How are you?

I'm doing all right. How are.

You doing, Dave? Better than we deserve. What's up, sir?

Okay, so I was calling just to get some advice. I am about $61,000 in debt. I make about 55,000 to 62,000 a year, just depending on what jobs we get. I drive a concrete mixer. Our business is generally driven by what contracts we get, the weather, anything in effect, anything and everything in effect.

The.

Paycheck. I have about $19,000 of student loan debt, about $4,000 in credit card, and the rest is a $35,000 car loan, which I pay about $762 a month for it.

Whoa, you're.

Feeling that.

Yeah.

I think we found the problem.

Yeah. Are you upside down on it?

Yeah, definitely. I owe $35,000 and the car is worth $25,000. Yikes. It's a 2021 Jeep Grand Cherokee. I got it with no money down. They would say I got put into a situation where I got scared and then I got stupid.

You did. Okay.

What condition is your credit in?

My credit is now in worse condition. It's not around the mid 500. It was.

At a mid- Who's the car loan with?

It's with CID Financial. It's through a company, through the dealership, Auto Nation, in Houston.

All right. Well, the net result is you've got to sell the car and we have to figure out how, okay? I imagine, yeah. Because the car is killing you. It's safe to say that if you didn't have this car, you probably wouldn't have even called us.

Yeah, definitely. I'm assuming you don't have any money laying around, no savings, nothing. I have.

Half of my baby, seven, one. The other half will be going in at the end of this week. After that, no, nothing.

Okay, so you got 500 bucks.

Are you married? Are you married?

Did we lose her?

No, sir, I'm not married. Okay. All right. You're driving the concrete truck, what, 40 hours a week?

No, I generally work anywhere from 55-70 hours a week.

Okay, and that's making the $65,000.

Yes.

Are you renting a house or apartment?

We're renting an apartment.

What's the rent?

$1,100.

Okay. All right. It may take a little bit, but the formula is we got to come up with 10 grand fast. That means beans and rice, rice and beans, all the OT you can pick up or side hustles you can pick up if you're not picking up OT. All right? I want you to sign up for everything they'll let you drive, anything you can do. Beans and rice, rice and beans. No restaurants, no vacations, no nothing that we get 10 grand to cover the hole that you're in. Then you sell the car and cover the 10 grand, get you a $1,000 car, okay?

Do you have anything else you can sell? Anything associated with the business that you don't need need?

No. Other than this car, honestly, I've been a minimalist for a very long time. I don't really.

Get out of anything at all. Until you met the Grand Cherokee.

Yeah, exactly. That was the first and worst big thing I've ever gotten in my life.

I'm sorry you're stuck in this, but really, you got to have the 10 grand. The other option, and I don't think it will work, but I'll put it out here just because it is a slight possibility, you might slot over there to Auto Nation and say, Guys, I'm about to get repossessed here because I'm having real problems with this car. I need you guys to let me sign a note and pay payments on the 10 grand and let me sell the car for 25. Now, who said the car is worth 25? Where did you get that information?

I went on Kelly Blue Book and got.

The quote. Okay, private sale? Yes. Not trade in?

No, trade in.

Okay, all right. They might say, We'll give you X number of dollars for the car and let you sign a note for the difference. If you pay $700 a month on $10,000, you can get it paid off pretty quick. Let me tell you, I give you less than 10% chance of that working.

I was going to say, What's the.

Likelihood of that? But I would haul my butt down there and sit in front of them and try it. In person, not on the phone and not by email. Drive up with the car, sit down, talk to the finance manager in person and say, I'm screwed here. Don't blame them. You're not a victim. You signed up for this. But don't go in and go, You guys did me wrong. That's not the point. We know they did you wrong, but that's not the point.

If he tries and it doesn't work- Then you got.

To come up.

With 10 grand. -is there a situation where you would say, Listen, if I can get a credit card for that 10 grand?

Yeah, I'd take a credit card for the 10 grand, because I would rather owe 10 grand on a credit card than 35 on a grand Cherokee.

That's what I'm saying.

I don't know how I would go about getting the 10 grand on.

Credit card. I don't either. I don't know. Not with a 550, I don't. But it could be that your credit union will loan it to you, but I doubt it. Right. That's why I was asking about your credit. But if you got a credit union that you've got a long standing history with and the guy knows you're in there, you might go in there and get 10 grand to cover the whole or 11 grand, which is one to buy a car with. You get you a little garage sale car to get back and forth to work, right?

Or maybe.

It's a half. You get rid of 25 of the 35, you can deal with the other 10 pretty quick.

Okay, so if I were to pause the baby steps until I can come up with $2,000 for a little cash car and then sell the.

$25,000 car. Yep, you got to cover the 10 grand difference.

But the difference is that's where the problem is that 10 grand difference.

You can't sell your car until you can get the title for it and you have to pay them 35 to get the title. Right, right.

Right.

Right. Okay. That's why I keep trying to come up with the 10 grand somewhere.

Listen, even if you.

Can get- Don't go down there and let them screw you and put you into another deal. Oh, no, definitely not. No more deals with these people.

Yeah, I'm not trying to get any more notes.

Any more debt. We're going to help you out by selling you a $20,000 car. No, you don't need a $20,000 car. You need out of the $35,000 car completely. Right. No debt. That's what we need. Then if you don't have any payments, when we clear this mess up, then you can deal with the other two things pretty quick.

Yeah, those are going to.

Knock out quick. You can knock out $4,000 in credit card, $19,000 student loan because you're not going to stink at some $150 payment anymore, right? Right. That's why we spent the entire time talking to you about getting out of this car.

Well, that's the lesson. The problem is in the car almost every time. Man, we.

Used to call this the sell the car show. Dave, my dog is ill. Sell the car. Dave, my marriage is struggling. Sell the car. It was the answer to everything. Sell the car. Sell the car. This is The Ramsey Show. Folks, changing your family tree takes more than rice and beans and side hustles. It's also about transferring the big financial risks off your family by having the right kinds of coverage in place. That's why my team created the coverage checkup quiz. It only takes about five minutes to find out what types of insurance you need and don't need to protect your finances. Make this quiz one of your regular checkups starting right now at ramseysolutions. Com/checkup. That's ramseysolutions. Com/checkup. Jade Walshaw, Ramsey personality, is my co-host today. She's the author of the new Quick Read. Money is not a math problem. Check it out. 57 pages later, you will be smarter than you were when you started. Check it out. It's right there at ramseysolutions. Com. By the way, if you guys didn't know our every dollar app, where you give every dollar a name, the world's best budgeting app, it helps you manage your money the Ramsey way.

It works wherever you are. Ios, Android, online, you can do it anywhere you want. You can start every dollar for free and immediately see where you stand with your money. You can get organized. You can work with your spouse. If you're married, both of you have access to it, so you know what's going on with your money. There's no two tracks here. There's one track we're running together. New to every dollar will show you a long-term financial roadmap. You track your net worth, your debt-free date, your retirement date, your baby steps dates, and more. You're going to love this brand new thing. Those of you that are really into this stuff, every dollar just took a whole new step, boys and girls. We're going to proactively coach you to build wealth and reach your goals. Nobody else does that. You can download the free app for iOS or Android, go to everydollar. Com and get started. If you pay just a little bit, you can have all the connectivity to your bank and get access to a whole bunch of other things as well. Be sure you check all that out. By the way, some of you, for some reason, I guess you've been living in a cave or something, you didn't know this, Mint is closing up shop.

January 1, they're done. Wow! They're done. They're closing it. You got your budget stuff over on Mint, you got to have a place.

To go. Yeah, because they don't have anything for you.

They're done. They're done. They're running Credit Karma. That's all they're doing. There's no budgeting tool there. We're the best and the biggest budgeting tool out there. Your natural movement is to move your stuff over to every dollar, and we can help you do that. It's completely free if you want it to be. If you want to connect to your bank, do the other stuff, we can show you how to do that. But we're not going to be selling... Mint's whole thing was they were using it as a lead magnet. They gave away Mint for free because they tried to sell you Rocket Mortgards. They tried to sell you credit cards. They tried to sell you consolidation loans, all kinds of debt products are being sold in there every day, and they made their money selling debt products. We don't sell debt products, obviously. We sell education, and part of that is educating you on operating this app with every dollar. We're running all kinds of free webinars with Jade and George and Rachel are all doing free webinars pretty regularly on how to operate every dollar. When's your next one?

My next one?

Oh, gosh. Right after the first of the.

Year, I'd say. It's right after the first of the year. But for the Mint folks, I just posted. Matter of fact, if you go over to my social media on Instagram at Jade Warshaw, I just posted a deal where if you're leaving Mint to go to every dollar, we're giving you two months. I think it's two months for free. Wow. Yeah. That's a good deal. Check that out because the link is there. It's in my and you can click it and get that deal. Yeah.

Just check out Wade's Instagram, J. Wade. J. Wade warsaw. J.ade's Instagram, and she'll get you a deal there. If you're moving over, if you're navigating, migrating from the Mint close-up shop situation, because you just got a few days, and I don't know when they're going to shut down the access to your information, but you want to get your information out of there before they shut the whole puppy down. Well, yeah. Certainly January 1 is their shutdown date. That's what they're saying. You want to, Bill, be Red D. John's with us. John is in Johnson City, Tennessee. Hey, John. Merry Christmas.

Merry Christmas, Dave. How are you?

Better than I deserve. What's up, man?

Well, me and my wife are looking to buy a home sometime this year.

Good. We're about $34,000 in debt. Bad.

Yeah.

That's what I'm trying to get situated. I want to get this, at least the biggest.

Part of it, knocked out between now and.

Sometime this.

Year, so we can get situated to buy a house. Now you need to get it all knocked out. What do you make?

I make about 55,000 a year.

She makes- Oh, good. What's she making? She makes.

Probably 25 or 30.

So 85,000 and you have 34,000 on what? I've got 13,500 on a car.

She's got a student loan that we're paying on together.

How.

Much is that? Her student loan is a little less than 7,000 now. Okay.

What's the other 14?

We have got a loan.

Together where we bought.

Something stupid. We had to get out from under it.

I'm not going to lie to you. That's what it was.

What was it? That's the $300. I bought a motorcycle. I got stupid, and then I got out of it. She got sick. She started having some health problems. I saw the rotten on the wall, so I got rid of the motorcycle.

Okay. It cost you $8,000 to get out of it?

It cost me six to.

Get out of it. You got 14 more. What's the other eight?

I've got $1,600 on.

A credit card, and we have got a.

$7,000 in a mower.

A lawnmower.

So we're selling that?

Yeah.

Okay, so you're selling a $7,000 lawnmower. We're selling everything else we can get our hands. Sell so much stuff the kids think they're next. Okay. I want you to get a house. All this other crap, it goes down in value. The house goes up in value.

If.

You're going to keep that car, you guys need to work 10 extra jobs, be going nuts from now until summer, and let's be debt-free by summer. But you're going to have to sell. You need to sell the mower. You may need to sell the car, but if you're going to keep it, you guys are going to be working like crazy people for a short period of time here. No eating out and no vacations. Okay.

The bad thing about the car is I'm not ever going to get out what I owe in it. Never going to get it.

What do you owe? You owe 13. What's it worth?

Last time we looked, it was worth about 9,000.

Okay, all right.

So you got to pay it off.

It's easier because it's not $35,000, it's 13,000, okay? Right. It's not the problem. It's just part of the problem. After we saw the lawnmower, it's the biggest part of the problem, right? The thing is this. John, if you and your wife sit down... Okay, let me back up two steps. I got just a second. I want to make sure I lay this out right. One of the great speakers and teachers of all time on self-improvement said, Earl, Matt, and Gayle used to say that the problem with people not hitting their goal, in your case, your goal is to buy a house, is not what you're willing to do to get there. That's not the problem. It's what are you willing to give up to get there. Those are the things that block us. If you want to lose weight, it's not what you're willing to do to lose weight. It's what are you willing to give up that you're blocking. You see what I'm saying? What you guys have got to do now is you've identified the goal is very clear, and it's a great goal, and we're endorsing the goal, right, Jade?

That's right. I want you to have a house.

Yeah, we want you to have a house. It makes good financial sense, good relational sense, everything. A bunch of this other crap does not. $7,000 lawnmower does not, okay? No, it doesn't. Unless you paid cash for it and you make a lot more than you make. Your wife is working more than she's ever worked in her life in the next six months. You are working more. Your family is doing nothing. We're not going out to eat, and we're going to have a bunch of sales, and we're going to sell a bunch of crap left and right. I mean, eBay, Facebook, marketplace, everything is going to be activated at your place so that we can hit the goal.

Do you guys have kids?

Got to.

Yeah, because it's just a good investment for your family, man. I would prescribe, in order to have a great life in the future, that you prescribe yourself six months of hell.

Because.

If you move into this house with no payments, John, the house will be a blessing. Right.

We'll see. I've got.

$12,000 extra.

Dollars coming in a year because I'm pastor in a church.

I'm a pastor.

I've got that on top of.

What I'm making. Okay, then that goes into the budget. That goes into the budget.

Every time I get a church check, I.

Throw it at a bill. Good. I throw it on a bill. I want you to do more than that. I want you to add up all the checks and cut all the expenses, and put everything towards these bills and work from all this debt to largest debt and get rid of all of them. Cut up the credit cards, knock the credit card out. Then let's get the car and let's get the student loan knocked out and let's get the lawnmower sold. You got $21,000, what is it? $26,000 you got to come up with. That's $2,000 a month for a year. That's $3,000 a month. You do it in six or eight months, and you're starting to talk about buying a house by fall. But I want this to be a blessing to you, not a curse. If you buy this thing with a bunch of dead hanging around your neck, it's going to be a curse. I don't want you to do that. It's no secret we.

Love a good deal.

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That's ramseysolutions. Com/store. Jade Walshaw, Ramsey personality is my co-host today. If you're out running around during the holidays, we do this radio show podcast, YouTube thing every day from 1:00 to 4:00 Central Time. We will be off between Christmas and New Year's. You'll get best ofs on those days. But we're on the glass in the lobby of Ramsey Solutions. You can come into the lobby and we have free homemade chocolate chip cookies. We like to celebrate our listeners and our viewers. We like to have you come in. We'll sign your books and take pictures with you. We like hanging out with you at the commercial breaks. We're here every day, Monday through Friday, unless it's a holiday of some kind. Again, we're not here between Christmas and New Year. But otherwise, you can come out. There's usually to 200 folks hanging out. It's a completely free experience. We take care of you. We want to say thank you for hanging out with us. In that lobby, we put a little stage. It's called the debt-free stage. Standing on the debt-free stage is Jason and Cassandra, which only mean one thing. Well, most likely means one thing, that you're debt free.

How much... Guys, where do you all live? We're from Houston, Texas. Oh, welcome to Nashville. How much debt have you paid? $124,000. Nice. Excellent. How long did that take? 48 months. All right. And your range of income during that time? Well, we started at.

$107,000.

Together, and we ended at $158,000. Excellent. What do you all do for a living?

I am a math and stats professor.

Excellent. I work in software development. Okay, very cool. What debt was the $124?

There were two home loans, two school loans for graduate school, and two adoption loans.

Wow. This pays off the house? No, not the house. Everything but.

The house.

Did I say house?

The first house.

Was.

From when we.

Lived in East Texas. That's what you're talking about.

The home loans.

Two home loans. I'm sorry. I'm very nervous. That's okay.

Two car loans. Two car loans.

Okay. We're just going to let him translate.

That's okay. No, you're fine. It's good. Very good. It's nerve-wrecking to be on the microphone. I understand. Not for me anymore after 30 years, but the first time you do it, it scares the crap out of you. You're doing good. Very good. All right, $124,000 paid off in 48 months. Tell us what started this whole story, this journey, this connection to Ramsey.

We did FPU as a couple in 2015. We were having trouble in our marriage. I'm the number person, right? I'm the math professor. But I was doing it by myself. In 2015, we almost didn't make it, and so we were like, We got to do this. We paid off all of our consumer debt in 2018. This whole time, cash flowing fertility treatments, trying to get pregnant for about 13 years. In 2017, we did get pregnant and got evacuated from Harvey and came back and not so pregnant. Oh, man. And so 2018, May, we decided to adopt. And we announced it. We started to go fund me and we started cash flowing. And they said, Probably going to be 18 months. You all want two kids under two. You want biological siblings? Good luck.

With that. Everybody told us that it was going.

To be a.

Year and a half wait to even start. So we filled out our.

Paperwork and we.

Did our little home visit. And then two weeks later, they were like, Hey.

Guess what? We got a match for you. So you know- We believe that God had a.

Mission for us. -and it was...

Oh, mercy, yes. Yeah, those these are our little girls.

Without a doubt. Oh, they are. Yeah, they're amazing. The best.

Thing that ever happened to us. Amazing, yeah. What a story.

We stopped paying... Well, we- 2019. Our youngest was born in October 2018, and we have an open adoption to this day. She's still in and out of our house. Anyway, so in January of 2019, she placed the oldest with us. There was a delay. And so in 2018, I was on maternity leave. 2019, I go back to college. Now that we have both girls, which is what we always wanted, we now have a basically $2,000-plus a month take care bill, as you might imagine. There was room and then there was not room. And even with grants and GoFundMe and all of that, 2019, we had a lot of food insecurity, some that he may not even have known about. We were very frugal with our budget. We did not have credit cards. It was car loans and adoption loans and school loans.

Medical.

There was medical debt. Anyway, so yeah.

We wanted to get out of that.

We wanted to get.

So you were debt-free, and then all of this happened, and there's another pile of debt. Yeah, definitely some. I had some.

School debt that.

We had been working on. So you weren't debt-free when you started it? We were not debt-free when we adopted the girls. And getting out of that.

Was important to us so that we could make a firm foundation for all our.

Family's future. Of course. We were consumer debt free. That may have been what I said. The credit cards. We had paid.

Off all of our credit card. But you still have the cars. We did it in a bank. We were.

Doing small to largest.

You're not consumer debt free.

Okay. Anyway. Oh, I'm not saying.

On credit card. It's okay. I'm sorry. I'm trying to get the story straight in my head. Okay, you're good. You'd reduced some debt, and then the girls came along and you got some more debt because everything got real tight.

It happened a lot.

Quicker than we expected.

I got you. Then you decided four years ago.

What happened? Right. Lily turned one, and both of their birthdays passed by and there was no room for gifts. People gifted us things to pretend those were gifts from food.

Banks and.

Things like that. It just wasn't working. I blame Ken Coleman calling me a chicken by.

Using statistics.

Online that said basically that 25% of all people are in jobs that weren't so great and they are just too scared to do anything about it. I did apply for another job, and I started a new job in January 2020 and got an immediate 50% raise. Oh, my goodness.

Oh, there we go.

I have since become the STEM department chair and doubled that from where I was previously. Oh, my goodness. We didn't have big enough shovel. In 2020, we did not have daycare bills because no daycares were open. I was a full-time working stay-at-home mom, changing diapers on web calls with no camera. But just doing both of those things and making the best of what was a very bad year for a lot of people financially, it helped us.

Push us in the right direction. Yeah, you were able to turn the corner and your bigger shuffle, as you said. That enables you to get the whole mess cleaned up. You knew what to do, but it was just tight. Then you changed... I changed the shovel size and then COVID helped. Not COVID, but I mean- It's so terrible to say it, but it's true. -the being at home from the quarantine helped, I guess is a better way of saying. It came with some expenses. Covid didn't help anything, but yeah. But anyway, Fauci didn't help anything for sure.

Well, $2,000 is a big savings.

That's big. That's huge. Yeah. Yeah, well done. Well done. So proud of you all. How does it feel to be free now? What a journey.

And.

We just closed that door. We just closed the door being in debt. So we.

Still.

Feel like we keep.

Everything.

As tight as we can.

And I'm okay with that.

Yeah, that's fine.

I haven't changed my grocery budget. It was about $300 in 2019. It's now gotten up to about 600. But I'm still very proud of myself to have been able to stay under that grocery budget. Yeah, that's excellent. Because money is not a math problem. It's so true. Come on now. From the math professor, I was the solution and the problem all the same time. I knew the numbers. It's just sticking to them. Yeah, that's right. That's right. Wow. So what do you tell someone who is in your situation? Talk to that person who they're in the fertility battle, they've got debt, they don't see the light on the horizon. Talk to that person right now.

And God is bigger than your problems.

And just because you can't see the exit doesn't mean it's not there for you. You can get.

Through this.

And surrender. I would love to say that it's this, that, and the other. It's Jesus Christ alone. Come on now. The point when we get to just surrender and stop trying to control it, and I'm going to make this work, and I'm going to get myself pregnant and.

All of that. No.

The best thing I ever did was just let go. Just to let go, and let him direct the way and him direct the story and just him seeing us on the other side, I didn't do it. He didn't do it. I mean, we did some stuff, but I don't think we could have alone ever got there had we not got to the point where we just surrendered and say, Okay, Lord, you handle our storyline.

Yeah, it is amazing when you surrender and plant corn and go, I'm not in charge of sun and rain. I'll plant the corn, but I'm not in charge of sun and rain. Yeah, it helps. Helps a bunch. There's a huge release there. Proud of you guys. Way to go, heroes.

What a testimony. That's great.

Couple of beautiful babies, and these girls, they're with you. It's Lily and... Give me the other one's pronunciation. Jalixah. She goes like- Jalixah. Lily and Jalixah. I love it. Look how pretty they are. It's so beautiful. I love it. Very good. Well done, you guys. Hey, we've got the Baby Steps Millionaires book for you, the total money makeover book, and the Financial Peace University membership. Count it down, guys. Jason and Cassandra. Here we go. $224,000 paid off in 48 months, making 107 to 158. Let's hear a debt-free scream. All right.

Three, two, one.

We're.

Debt.

Free.

Love it. What a great story. Wow. Merry Christmas America. Wow. This is The Ramsey Show. Our scripture of the day, Colossians 4:5, Be wise in the way you act toward outsiders. Make the most of every opportunity. Charles Dickens in a Christmas carol, it's the 180th anniversary of the book publication today. No space of regret can make amends for one's life's opportunity misused.

You.

Don't hear that language, syntax used when you're talking about it was the best of times, it was the worst of times, Bah, humbug. But no space of regret can make amends for one's life's opportunity misused. Very powerful. Brandon is in Cincinnati, Ohio. Hi, Brandon, how are you?

I'm fine. Merry Christmas to you, and Jay, it's a pleasure to talk to.

You both. Merry Christmas to you. How can we help?

So Dave, my wife and I, we are newly in baby step three. We are renters. I just spoke to my HR department because I have a corporate credit card. So my company's name is on there and my name, I'm added as an authorized user. But I have it to pay for my work expenses when I travel, submitting receipts and expense reports. And so I was calling today to.

Ask you both. Who is the card with?

It's.

With my company. No, I mean, is it American Express? Is it Chase? Is it Visa, Mastercard?

City Bank. City bank?

City Bank, Mastercard, or Visa? I believe it's- Either one of those. It's one of those, right? You're correct, yeah. And it's in the company's name and you're an authorized user. Correct, that's right. Okay, I'm with you now. I'm catching up. Okay, good.

Okay, so I spoke to them and to one of the HR leads, and I was asking about like, Can I do a debit? Can I do a business debit card or could you advance me?

You don't need to. You're not liable on this card. Oh, I'm not? Okay. No, you're fine on this card. You don't want a corporate Amex because the Corporate American Express requires you to sign for liability. But a corporate Visa or Mastercard with a standard bank like a Chase or a City, you're not liable, that your name is on the card. Let me give you an example. I did not know that. Yeah. I've got Visa debit cards here at the company, okay? Right. They're our company's account, our company's card. But I don't know, do you have one of them? I do. You have a company card? Yeah. Okay. She's an authorized user on it, but she has no liability. If there's misbehavior with that account, the company is the only thing that's liable, not Jade. Now, if she misbehaved with it, then that'd be different. But I'm saying if some thing happened, it doesn't come back on her. Authorized user just means you're allowed to sign for the company.

Well, what's the difference with.

The Amex? Amex is a bunch of shysters, and I can't stand them. Amex corporate cards require the employee to also be liable.

What?

Wow! I've had several clients over the years come in that their company went bankrupt and left them holding a $15 or $20,000 Amex bill.

Wow!

Yeah, but that's not going to happen with Brandon. Brandon, you're safe. You're fine. Don't worry about what you got. You're good.

Dave, can I ask you a question on behalf of other listeners? Okay. Let's say if they had an American Express business card, a credit card, if they were in my shoes and they were in day three, like just starting out, how would- I would.

It be a good advice? I would turn it in. I would get off of it. I would cancel it. I would not participate with American Express in any way. It's dangerous.

Should they prioritize, like hurrying up and finishing day three?

It doesn't have anything to do with it. I would go into the company and go get my name off of this. I'm not going to sign for anything using this period. Got you. Okay. Because here's what happened. I had a guy who went to... His company sent him to Europe, and he was picking up some tech equipment. He came back and the tech equipment was shipped in. It was $25,000 worth of stuff, and he put it on the company Amex card. When he got back home, went to the office, the office had a padlock on it. They were in bankruptcy and shut down. Amex chased him down for the 25k, and it was a company card.

Right.

Now, that's not true with your Citibank Visa, corporate card. That's true. Or it's not true with the debit card that Jade is carrying. You're just allowed to sign for them is all. You have not signed an agreement to sign for liability.

Wow, a lot of people just got a wake-up call on that.

Yeah, really dangerous.

Yeah, but for those that are in that situation, how should they cash flow it? If they were in babies at three, should they finish that first if they had to get reimbursement, pay the expenses upfront and then get reimbursed?

Yeah, I guess they're going to have to cover their own expenses. I'd set up a separate debit account just for travel and that stuff. If Amex is the only way your company will do it. But I'm telling you, man, most companies have moved away from Amex because of that. Most of them are doing what you're doing. If they're using a credit card, they're furnishing a corporate card, or they're asking you a period, they don't have anything, and they just ask you to use yours, and then they do a reimbursement monthly. A lot of companies are still doing that. But we furnish the equivalent of what your company is furnishing, only ours is debit, yours is credit. But Jade has a Ramsey Solutions for travel, because Ramsey personalities do a lot of travel. I probably got 100 of those things out in the building here, give or take. I signed some stuff today this morning for one of our senior VPs was moving some stuff around on it. But anything she buys, she's not liable for the bill, and you're not liable for the bill in this case either, so you're fine. I wouldn't worry about it at all.

Pj is in New York City. Hi, PJ, how are you?

Hello, Mr. Ramsey. Ms. Warsaw, thank you guys for having me on.

Sure, what's up?

So just to, I guess I've set the foundation. I'm 23. I live home, little to no expenses. I have term life insurance for 35 years. I have a Roth IRA. However, at the moment, I have little to no income. Why? I do have a... Well, I joined, I guess we can call it an MON, for about a year, year and a half, thinking it would work out for myself. And I realized that is not the.

Way to go. Okay, so now you're looking for a job?

Well, I actually have one lined up. I'm taking some of my securities license exams at the moment, and I'm lucky to have a connection in the industry where once I pass those exams, I have a job lined up. That should be a little bit after the start of the new year. Good. I'm blessed to be in the position that I'm in.

Okay, so now we're in February and you're making money. Now what's your question?

Correct. The thing is, I really have little to no education or knowledge on credit. Of course, I don't want to live at home forever. I've done my research online. However, I'm just slightly confused, so I figured why not ask you guys. I just really don't even know where to start. I don't have a credit card. I pretty much just have a debit card.

Why do you need credit?

That's the thing. I'm not too sure if I do or don't.

Need it. I don't think.

You do. Credit is for people who plan on taking out debt and borrowing money for their lifestyle. That's the only reason it exists. If you have said, I don't want to borrow money and I don't want debt-.

I'm going to pay cash for my life.

Then you don't need credit score, do you?

I don't believe so. I guess the noise I've been hearing growing up and whatnot is if you want to get a house one day, you need good credit score.

Yeah, the two areas most people are going to push back on that is A, if you're going to buy a car, but we plan on buying our cars in cash, is what it sounds like you said, which you can. You save up, you buy cash cars, right? The next one is the mortgage. People push back and say, Yeah, you can't buy a mortgage without credit, and you actually can. You can buy a home with a zero credit score. So if you never take out debt or maybe you pay off your debt, eventually your credit score will roll to zero. And if you never take out debt, it'll stay at zero or indeterminable. And a zero credit score is just as good, I would say better, than a good credit score or a high credit score, you can do just the same thing that you need to do when it comes to buying a home.

You just do what's called manual underwriting, and you get a mortgage company that knows how to do that called Churchill Mortgage that we endorse as an example. Pj, I like what you've done. Just keep it simple, man. Don't go in debt so that you have the opportunity to go in debt so that you have the opportunity to go in debt so that you have the opportunity to go in debt. That's called dumb, and people do it every day. That puts us out of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. If you're a leader, your personal growth matters for your organization because whatever you lead can only grow as much as you do. I know from experience. I've been CEO of Ramsey Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership Podcast. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One episode could change your business.

Check it out on Apple, Spotify, YouTube, or on the Ramsey Network app.