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. George Camel, Ramsey personality, host of the George Camel popular YouTube show and co-host of the super popular Smart Money, Happy Hour is my co-host today. We're back live and at it as you folks are. Hey, have you got the cobwebs blown out from the eggnog yet? Are you back at it? Are you ready to rock and roll? Is the game on? Is there a reset? Is there a cycle that needs to be broken? My buddy, Jacko, has got everybody resetting and we're breaking the cycle. Whatever it is you got to do, there's got to be a thing, and you got to do something different. You got to set these New Year's resolutions in process, make a habit happen, and… One of the things that we want you to make a habit of is making sure you go ahead and order George's book. It comes out next week. Next week, George. That's crazy. You can, just for a couple more days, get all of the presale elements with it.

It's called Breaking Free From Brook, the ultimate guide for more money and less stress. It's a very millennial cover. But it's not just for millennials.

That's right. I mean- I mean- 25-55, anywhere in there, or a little younger, a.

Little older. 15-55.

There we go. Well, a lot of people are saying, Hey, what is the book I can give to my teen that they'll actually listen to? There it is. This is it. But I hope this is the year people break free from Broke, Dave. There's too many people out there. It's not about income. We're having people call.

In and make 200 grand. No, no, income is everywhere.

They're drowning in payments.

A lot of people would make a lot of money and spend it all. They think they're in.

Congress or something. I think America is going to unplug from the matrix this year because they're sick of this toxic money culture of debt and payments, and they're stressed out about what's going to happen in the economy. I just want to hold the financial mirror up and go, You're going to solve this. It's not up to anyone else.

That's it. That's how it's done. The book comes out next week. If you order the $20 book today, you get about $100 worth of goodies with it, including a couple of months of every dollar. That comes with it anyway.

That's right. Whether you buy before or after, three months of every dollar premium. The audiobook, which is going to be enhanced with some cool production.

The e-book. That audiobook, it's going to be the best audiobook we've ever done. I'm excited about it. I love the extra production on it.

I'm excited about it. We got a live event happening the launch week that you'll get access to, as well as a video talk I did called Show me the money. All of you pre-order.

Yeah, so about $100 worth of stuff if you pre-order right now, breaking free from broke. We'll start the year with a commercial, but we'll keep going. The deal is that... I'm actually going to carry this over in the next segment because I just looked up and saw how much time I spent yaking about nothing. But the... Sorry about that, guys. That was one of my New Year's resolutions. Let's not do that. Stop yaking. No, I can't stop yaking. It's quiet out here if you do that. But the setting and keeping goals, because the thing we have figured out that is unique at Ramsey that the rest of the financial world still struggles with basically, is that personal finance is 80% behavior. It's 20% head knowledge. You really fix the person in your mirror or you're just screwed. If you keep doing what you've been doing, you're going to keep getting what you've been getting and continuing to do the same thing over and over again, expecting a different result is the definition of insanity. It is time to break free from the cycle. That's why we're doing this live stream called that as well. But I want to talk about that in this next segment a minute, but let's set that up a second because I don't think any of you want to miss this next segment.

It's really dialing into, from a business perspective, treating your life like it's a business. How am I going to set my revenue goals, my expense goals, and my profit goals? That's what you do for a business. You set a budget. How am I going to do that in my personal situation? Because everybody's a little bit introspective this time of year. I got an email from a friend of mine doing dry January. Everybody's going to try to do something to be a little better version of themselves. I think you should anyway.

Yeah, we have a lot of areas. Finance is what we focus on. But now with Dr. John Deloney here, we're covering mental health goals and relationship goals, and Ken Coleman's got work goals if you want to up your career. It's expanded, and you've talked about how you don't want a flat tire in any area of life as well, where you're great with your finances, but your marriage is on the brink. You've got to Excel in all the areas.

Or you're a great parent, but you're broke all the time. That ends up, by definition, eventually not being a great parent by definition. But if you work all the time and you never see your kids, you got a pile of money, then again, you're out of balance. People talk about life balance, but I don't want to talk about it in that sense because sometimes that's code for, I just want to go over here and not do anything. It can be a justification. I want to kick back and call that life balance. I want you to kick in. I want you to get it. I want you to get after it. Whatever the area is that you need to attack, I want you to do it wholesale and wide open. Basically, I'm not talking about dreaming. Dreaming is good. Having a dream is a good thing. Being a dreamer has a negative.

Connotation to it. No one wants their kid to marry a dreamer.

Yeah. Hey, dad, I'm getting engaged, and he's a dreamer. Oh, crap, they're going to live in the basement.

That's code for unemployed.

That's code for I don't do much. You don't want to be a dreamer.

But having vision is a.

Good thing. Well, having a dream is a good thing, but just only the negative connotation as a dreamer means without action. You want to step into action. 41% of Americans make New Year's goals or resolutions. Only 8% end up keeping them. I can't believe it's that high. Only 8%. I would have guessed lower than that. But we're going to talk about in this next segment exactly how to lay out for any area of your life, how to lay out a goal, and how to make it work, and how to stick to it for the rest of this year. If you've had a, Oh, I lay it out, or maybe you're really game on. Well, I'm going to give you a little finetuning for that next time, next segment here. Then we're going to lay it out in a way that you're not going to be confused at all about what it takes to win in any given area. Bottom line is it takes that you're mirror that person that they have to step up.

Well, you teach this in entree leadership a lot, but I love the business analogy going, Hey, what if we treated our personal life like it was a business? There was really something on the line. Because a lot of times when it's just us, Dave, we can let ourselves down all day long. But you can't do that in business. I think we need to have that level of gravity when it comes to our goals.

This year. Yeah, I'm going to get around to investing someday, but not treat it like it matters. Well, you ought to treat it like it really matters because it does. I mean, retiring and eating Alpo is not a plan. Retiring and having the dad-blame government, you're living on social insecurity after working your whole life. You're going to let the government, which is well-known for its ability to handle money, take care of you. That's a dumb plan. That's a definition of mediocrity minus about six degrees. You don't want to do that. But that's what's going to happen if you're on Coast mode. You can Coast through this society and have a relatively decent lifestyle, high stress, but relatively decent lifestyle. Instead, I would rather just turn up the heat and let's go get it. Let's go do something different here.

And all that leads to more peace, more confidence, less stress. That's what this is all about.

So stay tuned. It's going to be good. Stay tuned for the magic formula. Nothing magic about it.

Dave's laying out the secrets for... Can you believe the show is free?

There are no secrets and there is no magic. I just hate to tell you all that. It's just grandma's old common sense. That'll work. Those of you that want to lose weight, here, I'll help you with it. Eat less. Whoa. You and Jenny Craig, Dave. You just saved your money for a.

Diet book. You and Jenny Craig got.

Something going on. Just saved the money on a diet book. You can use it for one of ours. This is The Ramsey Show. Not only do ID thieves commit crimes related to financial fraud, but now we have to deal with home title fraud. Thieves are using your personal information to take ownership of your home. So they can take out loans and you end up with a pile of debt and foreclosure notices. That's why Xander Insurance is the only program I have ever recommended. Their plan covers all types of ID theft, including home title fraud. They also cover your children for free on their family plan. Visit zander. Com or call 800-356-4282. It's just the smarter way to protect yourself. George Camel, Ramsey personality is my co-host today. Welcome to the Ramsey show, folks. We're glad you're here. This is a show that actually helps you want to win at your life. We started years ago talking about your money. We still talk about money a lot, but we talk about every area of your life. We were talking before the break there about dreams. Dreams with work clothes on are called goals. You better put some work clothes on if you want to get something done.

It's funny to me that every time I'm lucky, it's usually around the time I'm wearing work clothes. My luck tends to happen the more I work. It's just this honest correlation. Funny correlation. I get more luck the more I work. That's pretty simple the way this is. Dreams that put their work clothes on are called goals. Now, a lot of people talk about setting goals, but let me tell you, if you don't set the goal correctly, you have zero chance almost of hitting it. Really, there are five components of a properly set goal. If you dodge any of them, you lower your probability of hitting it almost to zero. The first three, for sure. If you don't do the first three, you're just done. There's almost no chance you're going to hit it. I want to lose weight. I want to make more money. I want to have a better career. I want to graduate from college. I want to whatever. The first two things a goal has to be is if you say, I want to lose weight, you're not going to. That's not enough. That's a dream. It's fuzzy. The first two things a goal has to be specific and it has to be measurable.

Losing weight is a measurable event, earning more money is a measurable event. I want to get out of debt. That's a measurable event. Now we've got to get very, very specific how much.

And by when? That's another piece of the.

Puzzle here. The third one is time limit. Yeah.

When you have those three together, it's magic, because now it's reality.

Yeah. Well, when you put those three together, math automatically happens. Let's just use the weight example. A lot of people talking about that this time of year. I want to lose weight. You won't. Okay, it's measurable, but it's not specific. Okay, how much do you want to lose? Oh, 30 pounds. Okay, now we're measurable and specific. Now then the question is, do you want to lose 30 pounds over 10 years? How many times do you want to lose 30 pounds?

That's an important piece of the puzzle.

Yeah. Say, I want to earn more money. Great. How much? I want to earn $100,000 this year. Okay. How soon do you want to do it? Now, when you put a time limit on it and you know what the amount is, automatically your brain starts doing sixth-grade math. How much per month? Long division. If I want to lose 30 pounds when I want to do it over three months, I say instantly, everyone said that's 10 pounds a month. Instantly, some of you are even going further and saying that's two and a half pounds a week. Then you start automatically saying, What has to be true that's not true now. I'm going to raise my water intake, lower the bread and sugar intake, and increase my aerobic activity to 30 minutes a day. These are magical things that you do if you're losing weight. If I want to earn more money, okay, well, are you on commission? Do you need to make more sales? How many more calls do you need to make to make the sales? I had a guy tell me one time, he was working for us, he said, I'm going to earn $100,000 this year.

I said, No, you're not. He said, What do you mean? You're not going to pay me? I said, No. I read the sales reports. You don't make enough calls to make enough sales on average with our average order value on that call to make $100,000. $100,000 is $8300, $33 a month. That's $2,100 a week. What are you going to do to earn $2,100 a week? Then you figure that out. Then what's it take to do that? You're willing to do those steps. Boom, you've done the long division, you've done the math. I'm going to pay off... A lot of times people call in and they go, Well, I've got $75,000 in debt. Okay, well, what do you make? Well, I make $60,000. Okay, if you pay off $25,000 a year, that's three years. Instantly, we're setting goals with you when you call in here for you, but also inspiring you by showing you that if you did roll up your sleeves, earn a little bit more money and lived on less than you make, you could pay off $25,000 a year. That's $2,000 a month. Do that for three years. You paid off $75,000. You start to do the math.

Then the math gives you hope because you can really do 30 pounds in three months. That's not an unreasonable loss for most people. Now, you shouldn't do that. You would disappear.

No, I would float away into the aether.

If I did that, just one of my legs would be smaller. But other people are right. Everybody's got a different thing. But 30 pounds is doable. 30 pounds is doable.

You have to make the goal reasonable, but you want it to be a little bit scary. I think if it's too.

Easy- Let me tell you what. If you don't write it down, that's the fourth one, it makes it hard to do, too. Once you write it out, there's something that happens. The Bible says write the vision and make it plain. It says it in Habakkuk, one of the Old Testament books. Write the vision and make it plain. So when you write down, I am going to lose 30 pounds, 10 pounds a month, 30 pounds in 90 days, 10 pounds a month, two and a half pounds a week. Then you step up on the scales and you're up a pound, you got a baseline. You go, All right, now I got three and a half pounds. I'm screwed. I really got to get out of the cookies here. You start to make the adjustments of what you've got to do. Put up the Christmas cookies. There's enough already. I'm talking to myself now. Sounds personal. I'm going to pay off this debt. If I'm going to pay off $2,000 a month and you look up and you've only paid off a thousand, well, you're off goal. When you write out your debt snowball, when you write out your budget, which is your monthly goals for money, then you've got it in writing.

If you want to earn more, put it in writing, and then start talking about what you're going to do to cause that to happen. Because something has to be different for you to be different. Hello? If you want to be out of debt and you're in debt, something has to be different. What's going to be different? I'm selling some crap. I mean, we're amputating the Tahoe here. That boat that's been sitting out there in the yard that we act like we use and we don't use is gone. Yes, I have a $9,000 riding lawnmower. I'm an idiot, so I'm selling it. Yes. Okay? I mean, you're an idiot if you have $9,000 riding lawnmower and you owe $9,000 on it. Now, if you're a billionaire and you have a $9,000 writing lawnmower- And you paid cash.

And you use it.

That's great. -and you paid cash, that's okay. That's an idiotic-but thing to do. People do that.

So sacrifices must.

Be made. Well, something has to change. Generally, change always feels like a sacrifice. It may not be as sacrificial as you think. It may be you just look up and you go, Oh, there's $50,000 in my savings account. I owe $35,000 on this stupid butt student loan, and apparently Joe Biden is not coming to the rescue. Hello, are you just now waking up to that? I mean, he can't even find my name. Oh, my gosh. Are you just now waking? If the change could simply be you're going to reduce your savings account by $35,000, ready, set, go.

Boom, you're done. It's still going to.

Hurt a little bit. Tap out, done. Just like that. The last one is the goals have to be your goal.

That's the unexpected one in the mix here.

Well, other people let people set goals for them. My mama always wanted me to be a dentist. I'm not going to.

Use it. My parents told me I should stop wasting money on rent and buy a house. That's a terrible reason.

To buy a house. Yet they didn't fund any of this suggestion. No. They don't pay your bills. My friend said I should always have a car payment. Yeah, but he ain't paying it. Hello? People always got opinions about everybody else's stuff. My dad always wanted me to be a preacher. I'm not going to your church unless you're talking about God, your dad, God, the Father. But other than that, for people whose earthly father called them into the ministries, they don't make good pastors. But you need to say, My wife wants me to lose 30 pounds.

Is that a trick question?

No, it's not a trick question. It won't work until I want to lose 30 pounds. I could want to do it to please her. Resent her. That's really horrible. That's wussified right there. I mean, My wife wants me to earn more money. That won't work. My mama always wanted me to... I don't care what your mama wants. It's time to be a grown-up. If you're 25, your problems are now your problems. You can't blame them on your parents anymore. You're like an adult walking around in a large body and stuff, and you need to freaking act like it. The days of blaming mama and daddy are done. That expired. Exactly. Now, seven areas we recommend you set goals for. Certainly financial goals, intellectual goals. You're going to read a book this year. How many non-fiction books you're going to read this year? There's a direct correlation between your income and the level of non-fiction books you read. Read a book. Family goals. How are you going to break that out? Spiritual goals, prayer time, Bible reading, going to church, physical goals. We talked about losing weight, exercising, run a marathon, career goals, social goals. You should set goals in these areas, and they should be specific.

They should be measurable. They should be in writing, and they need to be your goals, not you living someone else's life. Otherwise, it doesn't work. This is The Ramsey Chef. Hey, guys, it's Rachel. You've heard we talk about Christian healthcare ministries, a health cost-sharing ministry. But I want you to hear from one of their members. Abby racked up a lot of doctor bills with a recent pregnancy, but she said CHM shared all of her eligible pregnancy-related medical expenses, and their staff was consistently attentive, helpful, and considerate. That's Abbey's CHM story, and it could be yours. Learn more and join chministries. Org/budget. That's chministries. Org/budget. George Camel, Ramsey personality is my co-host today. Alyssa is with us in Naples, Florida. Hi, Alyssa. Welcome to The Ramsey Show.

Hi.

Hey, what's up?

Oh, not much. Just taking a break in my work day.

Okay. How can we help?

So I just got remarried in October, and my husband and I, after the wedding, really sat down and took a good look at our combined finances. Good. And we definitely made a lot of debt choices independently, and now coming together, trying to figure out how we can tackle that hopefully for the new year, planning on having a kid. I already have a nine-year-old daughter, and trying to get those figured out so that we're not constantly worried about savings and being able to retire.

Sounds like you need to do all the things that all of us need to do. Yeah, definitely. Feed babies, retire, get out of debt, save money, right?

Right. Part of the thing that's a little bit frustrating is between our combined finances, we're bringing in about $11,500 a month and still feel like we've only got about $3,000 in our savings and not able to really contribute to retirement or anything like that. So trying to figure out.

How much debt do you have?

So student debt, we've got about $140,000. Who's the lawyer? I'm the mental health therapist. Okay. I've got about 90. He has about 40, and that was from his parents pushing him to go to college. He has debt with no real-.

What other.

Debt have you got? Nothing really to show for it. Car payments. How much? About $50,000 total in.

Our cars. You owe $60,000 on your cars.

Okay. Mm-hmm. And then we've got a mortgage that's got about $240,000. Mm-hmm.

Okay.

That's as far as debt goes.

Okay. Alyssa, looking at these numbers, let's ignore the mortgage for now and focus on the consumer debt. You've got about $190 or so in consumer debt? Mm-hmm. And you guys are bringing home what, $130, $140,000?

Mm-hmm. Okay.

This becomes a great math equation where we go, How much margin can we create every month to throw at that smallest debt? That's all we're focused on. No saving, no investing. We're not eating out. We got to make some sacrifices here. How quickly could you pay off? Could you throw $3, $4, $5,000 a month at the smallest debt?

What's holding you back? I think for me, it's the fear with my daughter, making sure that we have enough. Because with me being self-employed and him doing construction and things like that, I get worried about catastrophic expenses.

You know what I'm worried about? You make $130,000 a year and you're freaking broke. That's what I'm worried about. I think you need to be worried about that. You're driving cars you can't afford, and you have a lifestyle that's absolutely assinine. That's nothing to do with a nine-year-old.

What does she need that's thousands of dollars a month worth? When you say, I need to take care of her?

It's more just in case.

Yeah, but you're not doing anything about it. You got $3,000. That's a complete red herring. You're doing nothing about that except creating anxiety.

Right.

Yeah. It's time for a pinch in for action, some urgency here and say, Okay, the more dramatic we change our life, the more dramatically we change our life, the more sacrificially we change our life, the faster this is going to turn around and we're going to have a pile of cash and we'll be out of debt. The more you just goof around with it, because here's the deal. You guys have no idea where this money goes.

Right.

We're going to get you on a detailed written budget. Here's the thing. What mental health professional? What work do you do?

I do counseling, like therapy, depression, anxiety, stuff like that.

Okay, all right. What you do is there's some parallels to what we do. You can be physician heal thyself, okay? Right. Because here's the thing. You are an objective observer to someone's misbehavior.

Right.

You look at that and go, Hey, you ought to try this because the way you've been doing it, not working. This yelling and screaming at your wife, not working. This zero activity sitting in a dark room, adding to your depression. You need sunlight and vitamin D and activity. You need to get an exercise and be in sunlight helps with depression. Am I wrong? No, you're not wrong. You send somebody, but they're sitting in the dark room, they don't see it. What I want to do here is I just want you to say, Okay, if I hired you, you're a smart person. If I hired you, even though you're not a financial professional, because the stuff we're dealing with here is sixth grade math, if I hired you to look at this and say you come in objectively and you look at this family, they make $130, $140 a year, they have $3,000 in their name, they have $60,000 in car debt, and they have student loans have been hanging around so long they think they're a pet. They feel stuck. You could objectively look in from the outside like you do every day and look at this the way George and I are looking at it right now going, These people need to tighten things up.

They need to sell a car or two. They're not going on vacation because they're broke. If they're sick and tired of being sick and tired, you'll change your process. Because if you look at this objectively from the outside, I can see in a three-minute radio conversation with you, I can see $40,000 or $50,000 a year here that you could throw at this and you'd be out of debt in no time. But it's going to mean you're driving different cars, you're not going on vacation, you're not eating out. It's not going to be comfortable for a while until you set some new grooves in your brain.

Yeah. We definitely already decided on completely cutting out vacations. Okay, good. Good first step. We had huge conversations with family, even big family crews and just saying, Sorry, we can't do it.

You're going to learn to say no a whole lot.

Yeah, and you're going to say no so you can say yes. The way we say it is live like no one else, so that later you can live and give like no one else. If I were prescribing to you from the outside looking in the way I'm asking you to do for yourself, I could look at these numbers and say these people have a really tough two and a half years ahead of them so that they have an awesome life the rest of their life.

Yeah.

And it's worth it, and it works because it is just math. It's just sixth grade math. But it has to do with controlling the angry little boy or little girl that lives inside of each of us and making that little person who throws a fit on the cereal island wants fruity pebbles. No. No. Because that little kid, he rises up, I want a new car. I deserve. I have a master's degree. I deserve a good car. No, you don't.

You're freaking pro. You deserve freedom, not this life of stress. The math does give me hope in this situation. You make a.

Living five. The beautiful part about your story is, Alyssa, you have the income. The parallel would be if you were sitting with a patient who has a master's degree in something, they have the intellect to adjust their mental behaviors, to adjust their mental health with behavior shifts, with directions you can give them. They have the capacity. You didn't call me up making $30,000 with these numbers. Thank God. You call me up making $130,000 with these numbers. You can do this. The correlation is very simple. The deeper you cut, the more sacrificial and weird you are, and it's going to feel very strange for the first 90 days, and then it'll get to be a normal rhythm. But the deeper you cut, the faster you're out. By the way, that works for all of you. The deeper you cut, the faster you're out. I'm a rip-the-bandaid-off guy. This pull it off one hair at a time thing? No, thank you. That's a lot of pain.

That's why you like to amputate the Tahoe. Just do the big stuff.

Knock it out. It's a stupid car.

I'll get.

Another one later.

You get another stupid car.

There's more Tahos. I got a lot of stupid cars now. But I didn't use... I mean, it's a stupid car. It's a stupid house. It's just stuff. And you can get you some more stuff, but you can't get your life back. This is The Ramsey Show. Hey, folks, January is when a lot of folks commit to doing things the right way, like sticking to a budget. With interest rates and prices the way they are now, it may seem impossible to buy a home on a budget, but Churchill Mortgage can help. We've trusted Churchill Mortgage for 30 years. They'll help you stick to your budget in the new year with a mortgage that keeps your home a blessing, not a burden. Go to Churchillportage. Com to learn more. That's Churchillportage. Com. This is a paid advertisement.

An MLS ID 1591 and MLS consumeraccess. Org, equal housing lender.

1749.

Mallory Lane, Sweet 100. Brentwood, Tennessee 37027.

George Camel, Ramsey personality is my co-host today. Luke is in Tuscaloosa, Alabama, where they are crying this morning. Hey, Luke, welcome to The Ramsey Show.

Not too many tooth to clean up this morning on my end. How's everything going?

Better than I deserve. Oh, my goodness. Tell me how we can help today.

Yes, sir. I'm just looking to get a plan together on possibly buying a house. Not necessarily a set time frame. Being a girl currently that has her stopwatch clicking on me, and I don't want to go through the whole running process if I don't have to. I'm just wanting to get you all's opinion on that.

You've got a girlfriend. She's wanting you to propose you're wanting to buy a house. There's a lot going on here. You're wondering when is the time to buy a house?

Yes, sir.

How old are you?

I'm 24.

When will you get married?

Probably in the next year and a half or so.

You got any money?

I currently have about $53,000 sitting... I know you're going to get upset with me, but in a second account.

I'm not upset with you. I'm happy. You're 24 years old, got 50 grand. That's your stud, man. I thought you were.

Going to say, But I have $100,000 in debt. Do you got any debt?

No, sir. Currently, I'm living with the parents and I've been blessed that they have given me that opportunity.

That's incredible. I'll just stack up as much cash as you can until this wedding and we'll cash flow it, and then we'll talk about buying a house. But I wouldn't do it before you guys are married.

No, I wouldn't.

She's going to want a different house than you, the one you picked out.

That is 100% for certain.

Okay, yeah. Ideal is you guys pile up as much cash as you can and somewhere around a year after the wedding you're purchasing.

Okay.

That's ideal. The reason that's ideal is it gives you enough time of being married, folk, to make a better decision together because you'll make a better decision after you've been married a year than you will after you've been married one week.

Okay.

Because you will have learned to work together on other things as well during that year. That first year of marriage is very interesting. You just take that time get to know her, she gets to know you. The way we always joke about it is we say it takes about a year to know how far away from your mother-in-law to buy. That's about the measure. But there's some truth in that joke, that's why it's funny. But that's what we look at. But that means you're going to be like 26 years old, which is okay with me. It also means you're probably going to have $100,000. Yes, sir. Which is okay with me.

Love it. Does she have any debt?

Not that I'm aware of. She comes from a pretty well-off family.

That doesn't mean a thing.

Oh, I know it doesn't mean a thing. But from what I've heard in a way, it doesn't look like she does. Okay.

That just might delay it if she did. But it sounds like you guys are both going to get married completely debt-free with a pile of money in the bank, which is the best case scenario.

Before you start talking about putting a ring on this finger as an engagement, you need to know everything about her financial life, and she needs to know everything about yours.

Yes, sir. Now, one follow-up question. What do you suggest I do? Because obviously $53,000 sitting in the bank is not doing me any good. I mean, it's doing me a lot of good just sitting there, but I feel like I could use it elsewhere, finance or some account with a financial manager of.

Some sort. I don't think I'd get fancy. You might do a high yield savings account, which might pay you in this current world, what, three or four %, something like that, instead of half a % if the bank... I don't know what the bank's paying you. But talk to that bank about a high yield savings account if they don't have one, shop around and find one. What are those paying.

That you're- Yeah, I got one that's about five % right now, but you can easily find one that are in the four range.

Yeah, four and five is. But I'm not going to try to get rich on this money. I just don't want to lose it. I want to be wise with it, which is what you're asking. I don't want you to pay a half a % or something silly sitting in checking.

But you have a two-year time horizon. You don't want to go investing in the market and all of a sudden your account dipped 20 % because of.

A bad year. Yeah, you're not going to buy a house because of the amount of money this account makes. You're going to buy a house because of how wise you are putting money into this account.

It's the.

Savings rate for sure. That's where this money is coming from. John's in Rock Hill, South Carolina. Hey, John, welcome to The Ramsey Show.

Hey there. Thank you so much for having me.

Better than that. Great, man. How can we help?

All right.

My question is I'm on.

Baby step number two, just started following you all stuff, and I'm super stoked about it. My wife and I are teachers, and we are set to have some loans forgiven, not through the Public Service Loan Program, because I have learned through you all that that is not a good route to go. But our state, South Carolina, will forgive loans for teaching in high areas of need. My wife is special Ed teacher, and I teach at a school with low.

Income students. Yeah. At what rate do they forgive it? They actually don't forgive it, they pay it.

Yes.

They.

Will forgive up to $5,000 after five years of teaching.

$5,000 after five years? Yes. That's nothing. Okay, what's the other one?

They will forgive $17,500 of.

My.

Wife's after five years.

Okay, so that's $5,000 a year. No, it's not. Five years what you said. Neither one of these we're screwing with. You all need to just get out of debt. Just go ahead, because total we.

Have.

$64,000. Yeah, but 22, five of that is you're waiting five years on $22,000. Now, I want you to have a life.

Yeah. You won't be locked in career-wise.

Some of these things forgive like $10,000 a year, and none of the ones you're doing do that. That's why I was asking how it worked. But no, that's not generous enough for me to be wanting to stay in debt and also to have the golden handcuffs. You may decide to change the direction of your teaching career, and you don't want a lousy thousand dollars a year motivating you on that.

Right. So follow up with that, I'll be to the point. I only have one year left until I could get that 5,000.

Well, that makes a difference. Okay. Yeah, I'll take it then if it's one year. I thought we were starting ready, set, go today. What about your wife? How long to the 17-5?

Yes, sir. She has three years left, so that is a little more touch and go.

I'm probably okay with both of those now that you changed my time horizon.

Would you guys stay in those careers, in those areas?

He just wasn't on the one year, he will, so take the five grand. But her three years- For.

Her, I will. The question is with her, special Ed is just a very difficult field.

Very strong.

Her support is not where it needs to be. We have a one-year-old and one on the way, so her ability to stay in the field, we're not really sure with that. I'm leaning towards like, Hey, should we just.

Pay it off? I'm with that. Here's the other thing you could do, and this is what I was going to recommend at the close of the call, is go ahead and set a separate savings account up with that amount of money in it.

To.

Where you have paid it off. It's in your debt snowball, but you're holding the money. Then the day she decides, I want to be with my babies instead of the strain of this job, boom, you pull trigger, right, the check is done.

Okay.

That's very smart. That takes the pressure off of her to stay in the job, pass when she should with little babies. But your five is going to be here in 20 minutes. Right. If you want to set that aside too until the five hits, you can, but it just gives you an extra bump towards your baby step three emergency fund then.

Because you still got, what, 40 grand left even after both would be forgiven?

Pretty much, unfortunately. We both have masters in teaching.

What's your household income?

Well, household income is teaching… The salary is 105.

And then I work in the summer.

So it's about 115 altogether.

Good for you. Okay, good. Very cool. Well, I mean, you're going to be okay. You're going to be fine. It's just a matter of analyzing where the squeeze meets the juice, right? Yes, sir. So always, even if there's a forgiveness program we go along with, we say set the money aside and savings, which takes away the golden handcuffs. That's the big thing you want to do there. Good question, man. Good question. You sound like you're a good dad, a good husband. Proud of you. Keep it up. Happy New Year. 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. George Camel, Ramsey personality is my co-host today. Open phones at triple-8-825-525. Thank you for joining us and happy New Year to you. Dalton is with us in Indianapolis to start this hour. Hi, Dalton. Welcome to The Ramsey Show.

Hello, thank you for.

Having me. Sure. What's up?

So about a year ago, soon after I got my first job, I invested into an IUL due to talking to my parents' financial advisor. And since after having seen some of your work, and I saw one of the videos you guys talking about it, and I looked into it myself, I decided I would like to get out of this. However, the problem is there's a surrender charge. So I've been invested since last November and I have about $1,500 invested. But if I were to try, I can't transfer it into anything else. And if I try to leave it, I'd be left with $400 and the surrender charge doesn't go away until like another 10 years and I have to keep investing, so I'm not sure what to do about this.

Well, it sounds like you've lost $1,100 to me.

Yeah.

Make note that this guy screwed you, putting you into this product. I mean, put you in a product that the only way you avoid surrender charges is 10 years?

Mm-hmm.

Oh, man. How old are you?

Twenty.

Good.

Lord. Man, I'm sorry. We filed this one under stupid tax, and we've all paid our version of it. But I hate that you have to deal with this and lose that 1,100.

But it's not what it's saying. Because the only other option is continue to pay them money and lose even more.

Yeah.

What are you paying into this thing?

It's 150 a month. What do.

You make?

Twenty-two thousand a year.

My gosh. What do you do for a living, Dalton?

I'm a diesel technician. Okay, all right.

Well, as painful as it is, and I'm hurting with you right now, and I'm angry at this character for putting you in this thing, as painful as it is, I would stop. Now, let me just tell you. Here's an interesting story. I was 22 and a guy that was in a fraternity that my wife had been the little sister to the fraternity, came to our house with Northwestern Mutual, sold me a whole life policy, and I've got a finance degree. I should know better. Oddly enough, Dalton, that was a long time ago, but it was 150 a month. When I discovered like you have about a year in that I had been screwed, then I canceled it. You know how much of my cash value I got? Zero. I lost about the same amount you're going to lose. I was 22 years old. But that doesn't mean that staying in it would have just been worse.

Yeah.

Because you're going to pay 1,800 this year just.

Paying into that thing. The bad news for Northwestern Mutual in my case, is that I've gotten to tell this story now for 40 years about how they screwed me. They've lost a lot of customers thanks to you. It's cost them a lot more than the little bit of money they got out of me. I've gotten almost as much satisfaction as the money they got out of me. It was worth it. Yeah, but you're not going to get that opportunity, I doubt, as a diesel mechanic. You might tell some other diesel mechanics not to get do business with this particular guy. But yeah, I'm sorry, Dalton, but the actual proper correct thing to do is just if you have a hole in your pocket, sew up the hole, don't keep putting money in it.

Yeah, that's what I figured. But I just want to make sure there was another option.

Don't be mad at your mom and dad. They don't know any better. The financial advisor should know better. But a financial advisor that sells universal life is not a financial advisor. A financial advisor that sells universal index is an insurance agent. They're not a financial advisor.

Yeah, that's what I started to learn because my parents also are invested through him, and I found out what he has them on is also another life insurance product. I think he just-.

He doesn't really do investments. He just sells insurance.

Yeah.

He makes a lot of money on it, too. He made as much as you lost on this deal this year. Yeah. That's the other thing.

I talk about this, Dave, in my new book, Breaking Free from Broke. I have a whole chapter on investing traps, and I took a lot of time on the permanent life insurance section because too many young people are falling for this.

It's come back around. It's weird. It's come back around. The TikTok idiots have stepped up and are really hammer in this stuff.

Well, they call themselves, Dave, tax-free wealth strategists. They don't call themselves financial advisors anymore because it's cooler to call yourself a wealth strategist.

Here's the dumb butt part of that, okay? Tax-free wealth strategist. Now, let me tell you how you get tax-free money out of a permanent life insurance policy. Number one, you pay into it for years and years and years.

And years.

You tune to $150 a month. Pass this thing. He's got no cash value right now. After a year of paying in 150, just what we've been telling you for years, they keep it all. Once you get past that, you finally build up a little bit of.

Horrible- Pocket change.

-piss-poor returns, and you got $2,000 in there. You keep doing it for your whole stupid life, and it would be a stupid life. You got 50,000 bucks in there. You know how you get your 50,000 bucks out tax-free? Borrow it. You borrow it. Well, guess what? If you go to bank and borrow $10,000, it's tax-free. Borrowed money never is taxed. It's dumber in hell, but it's not taxed.

It sounds cooler when you put tax-free in front of it. Oh, my God!

That's unbelievable. Of course, it's tax-free, you idiot. Not you. Thank you. Not you, Dalton. But the guy, I'm a tax-free wealth strategist. Well, of course you are. The way you get your money out, you borrow your own stupid money out of this policy and you pay them interest. Of course it's tax-free. Barrowed money has never got taxes on it.

That's dumb. Don't poke holes in their genius.

Strategy, Dave. They're a bunch of genius. I'm a tax-free wealth strategy.

I have a hot take for.

Every investment trap, Dave. I got a hot take. Go down to the bank and borrow $15,000. That's tax-free.

Here's what I say. I said, Permanent life insurance as a wealth-building tool is a legal scam peddled by insurance agents posing as financial advisors. It gives them fat commissions and locks you into a lifetime of stupid tax. Dalton is Exhibit A, and luckily, he's getting out.

I'm Exhibit A.

He's B. He's B. Dave did it before it was cool. Now it's trendy on TikTok.

That's why it still makes me mad. Oh, my goodness. Of course, the guy, the fraternity bro- Makes it even worse. -you know how long he was in the business? About 20 minutes after he sold our policy, he was gone. Because that's 80% of those agents are out of the business in one year. So much turnover. 80%.

Well, they must lose their soul in the first three months selling.

This product. No, they don't lose their soul until they sold all their family and friends. There we go. Then when they try to sell it to individuals who are actually using their brain instead of the relationship to make the sale, then they find out they lost their soul. That's what happens. They get out of the business. They run out of steam. But the business is set up to the industry is set up to milk your sphere of influence. They put you in there as a greenie. They milk your sphere of influence, your natural market.

And they tell you go after your friends and young people.

And college students. We're going to serve your natural market.

Oh.

My gosh. With a tax-free wealth strategy. Shoot me.

Brilliant. Just shoot me. This is The Ramsey Show. George Camel, Ramsey personality is my co-host today. Deanne is in Atlanta, Georgia. Hi, Deion. Welcome to The Ramsey Hi.

Hey, what's up?

My husband was laid off yesterday on New Year's Day. Oh, my God. Yeah. Happy New Year. Yeah, really. He was a direct operation, so he was right under the owner for a luxury, landscaping, and hardscaping company that works in Buckhead. They work on commercial homes and all kinds of stuff. So the business owner basically has lost his behind and is dissolving everything. And we have the opportunity to not purchase the business from him, but get the equipment, purchase the equipment from him for what he owes on it, and then he will give us his client book freely. He's been very open, like wants to-.

He's closing up shop.

He's closing shop, and there's a lot of money left to be made on the books scheduled, and he's washing his hands a bit. My question is.

How- What's a lot of money? -how to go out.

Right now, they probably have 2-3 months on the books, and I think there's about $250,000 on the table, give.

Or take. On the table being gross revenues, not counting expenses.

Right. Correct.

What were those jobs net? Do you have any idea?

I don't know.

Your husband's ops manager, he doesn't know his margins.

Yes.

What would it cost for you to buy all the equipment?

One machine, he owes $30,000, it's worth $60,000. Another, he owes about $30,000, it's worth $60,000. Then he has another machine that's brand new. It's worth $30,000, and he owes about $30.

Okay. What are you guys having money?

We have about $30,000 to$35,000 to $40 in cash just hidden away. We have $16,000 in the bank, and we still owe $11,000 on his truck, his personal truck.

Do you have to buy all of the equipment for this deal to happen? No. What did he give you the client book anyways?

He bought the 230/60s and leave the 30/30 for him.

Yeah, he will give us the client book no matter what. He's very encouraging and will be very helpful. He's very sad about the situation.

He just gave up.

He just gave up. Yes, he did. He just gave up.

Why did he lose his butt if there's all this money laying there?

You know, from an outsider's perspective, honestly, I don't know, but they all drive Porsche. They have a big old house in Buckhead, and he's selling his house. He's filing bankruptcy. It's just all not good.

Okay, well, there's a lot going on here. Number one, let me stop with the last statement. If he files personal bankruptcy and tractor number one, he owes $30,000 on it and it's worth $60,000, he can't sell it to you.

Oh, okay. His plan was, he told my husband this week to take all the equipment that is owed on back to the tractor company and get it back to them and just say, Here, I'm done.

It doesn't matter anything. If you buy it from the tractor company, that's fine. But here's the thing. Anything that happens within 90 days of him filing bankruptcy, that was an asset can be undone by the bankruptcy court. Oh, okay. It's called a preference period. You're not allowed to give one creditor preference over another. For instance, those voluntary repossessions, your husband takes the equipment over there, turns it in, that dealer is not going to turn around and sell it to your husband the next day. That's $60,000 tractor for $30,000.

Right.

If your husband buys it for 30,000 and it's worth 60, the bankruptcy court is going to come in and say, We could have got more than 30 for that tractor and given it to the creditors. Okay. They're going to take it away from you.

Yeah, that's not good at all. No.

This guy, he doesn't... If he files bankruptcy 90 days from now, you'd be safe.

Okay.

But if he files bankruptcy immediately, which it sounds like this guy is very emotional, impulsive, and is probably going to file soon because he's freak out mode.

Yeah, probably.

Yeah.ouch..

Okay.

What if we- What I would do is do what he said to do, and see if you can talk the dealer into selling it to you as you take the keys over there.

Okay.

But you need to turn it back into them. Then if it's been repoed and what the bankruptcy court would then have to do, I'm not a lawyer, but I deal with this crap all the time. The bankruptcy court would have to come in. The trustee of the bankruptcy would have to come in and come to the dealer and say, That repossession that you did, you've got to undo it, which they usually won't do that. But they would undo an individual transaction that benefited your husband versus the creditor.

Okay.

You see what I'm saying? Yes. Here's our strategy. I got down in the there for a minute. But yeah, the book of business, you sound like you are excited about it. Is your husband?

Yes.

Okay. You think he can take it and run it. In that case, what I would do is the first thing you need to do is do an autopsy, and you really do need to know what the crap went wrong.

Right.

Why this book of business is not worth hanging around for.

Okay.

What is this guy doing? Is he doing cocaine? What's the deal? What happened here? I got to know if it's the business model that's broken, you don't need to book a business of a broken business model. Right. No, thank you. Yes, I'll take the book of business if I can figure out what caused it. If the book of business is clean and I can still cut the deals with those guys and I can still make that profit, I'll step into that and go do it. Then I would buy one or maybe two of these pieces of equipment with cash.

If.

You can get them for 30,000 and they're worth 60.

That's more cash than we have.

That was my- You have 60. Oh, no, you only have 30. You've got $40,000 and $8,000 and $16,000, right? Right, yes. What do you make?

Well, he did make about $80,000 a year, and we paid off all of our debt.

In the past two years. Good, except the one truck.

Except the truck, yes. I quit my job working in the banking industry.

Okay, let me stop you. Then you got 16 and you said 40 other.

Yes.

41 or something?

40 in cash.

Forty. Okay, so you got 56. You get one piece of equipment, you pay off the truck, and the rest of it's your starter emergency fund.

Mm-hmm. Okay. Can you pull off the projects with that?

You can rent the equipment. I think- Go rent equipment and do the project. -i think we could rent.

Yes, we could rent the equipment.

Yeah, rent the equipment.

And then cash flow the rest of the equipment.

You need. Do not let that dealer talk you into financing that equipment. Okay. Don't go back in debt. It's not worth it. If this business works, it will cash flow enough to buy equipment for cash.

I agree.

Just take your time, buy your equipment. Which of the two? $30,000 worth 60s is the best deal and the best piece of equipment? Take that one. If the dealer will sell it to you for 30, when you take it over there and turn it in on his former boss's behalf. Okay. If they won't, if they try to jack it up above the loan, then no, don't do it. Do not buy it from your former boss. Buy it from the dealer after repo. Okay. Because the bankruptcy court will come take it from you.

Okay.

It's like buying stolen goods from a fenced operation. Got you. Even if you didn't know they're stolen, you're screwed when the police come.

Yeah, we don't.

Want that. Yeah, that's where you're going to end up. It's called a preference period in bankruptcy. You can look it up and you'll see what I'm talking about. But yeah, I'd spend 30 on this and I'd pay off my truck, and I'd have a little bit of cash and let's get going. Let's get going.

Resurrect this business.

Yeah, it sounds fun. She's got her head around it. Oh, absolutely. That's what has given me a lot of hope. I have hope for this. Yeah. This is The Ramsey Show. George Campbell, Ramsey personality is my co-host today. Open phones at triple-eight, 825-5255. Sabrinah is in San Antonio. Hi, Sabrinna. Welcome to The Ramsey Show.

Hi, sir. How are you?

Better than I deserve. What's up?

Hi, so me and my husband, we are on babysit, too. We're almost done. We have about 12,000 left on our car. And my husband keeps trying to convince me that we should trade it in because we have, I guess, equity in it right now. And so we have 12,000 left. I, Kelly, have booked our car. It's around $22,000. He is thinking we should upgrade to a bigger vehicle. So this value of the new vehicle would be $25,000, so about $3,000 more. And so I just wanted to see your opinion. I refuse to go to a lot because I don't want to make a bad decision. So we have about six months left projected until we pay it off. And he just thinks we should trade it right now and we're going to pay it off regardless this year. So that's his mindset. I just get you a payment.

How old are you guys?

We're 29, 28, and we've done this stupid 10 years of car payments, and I'm so over it. But he just thinks we should upgrade to the biggest one, which is the Yukon. Right now we have a GMC, Acadia, so he's.

Wanting the more room. Why do you need to upgrade?

His reasoning or the big reason would just be more room. We have four kids, and we're two kids. There's really no chunk space. I know it's.

Silly, but- You do know they have large SUVs that are cheaper than 20, don't you?

Yes.

Does he?

Yes, he does.

Part of the problem is we are not on baby step two. You are.

He's.

Not.

He's wanting to stay into debt, it sounds like he's trading in one car payment for a slightly bigger car payment.

Yeah, his view is, because I told him the way Randy does it is we cash flow and then we trade it in and then we pay the difference. And he's like, Well, why don't we just do that now and then pay it off all at once? But I'm like, No, I'm so ready to be done. He's like, It's just 3,000 more. I'm like, Well, that's just-.

Well, the dealer is not going to give you 22 for it if you trade.

It in. No, that's true, too. But let's just stay with the concept for a second. The concept, though, is he's willing to continue to borrow money to get what he wants? When he wants it? Yes.

You got a fifth kid in the family you didn't even know it.

Yes.

I don't think the car is the issue. I think the car is revealing the issue that you all are not on the same page.

Okay, yeah.

If I'm you, that's what's disturbing. Because here's what you would really do if you wanted a bigger car. You would buy an $18,000 one instead of a $25,000 one. That would get you out of debt faster and you'd have a bigger car, correct?

Correct.

I think the two of you need to have a discussion about the fact that the way you feel about debt and the way you feel when he acts this irresponsibly and contrary to what you believe and how you thought we were... It sounds like this, Honey, I thought we were agreed that we were getting out of debt and staying out of debt, and now you're coming in here and extending the time that we're in debt to buy something that we obviously can't afford. Why didn't you come in here and suggest we buy something 18,000 that is larger? Because there's 18,000 of our SUVs out there.

Agreed? Agreed, yes. Yeah.

Why didn't you bring that in? Then we'd have something to talk about because that gets us out of debt faster and we get a larger car. But instead, you're scaring the crap out of me that I'm going to have to struggle with you the rest of our lives on this money issue. This is really scary for me, and you ought to bring that up to him that way.

Okay.

Because you don't really... You laughed, but you don't really want to be married to a little boy. You want to be married to a man that's walking along beside you, shared goals. It's not cute that you're the mommy. It's not fun for you. That's why I asked how old you guys are, because I was a little bit thinking you were a lot younger, honestly. You were 22 or something, and he still hadn't grown up. But maybe he's 29. But no, I would not go along with this. I would not go to the dealership. I will not sign this. I don't believe in it. You're scaring the crap out of me. But the car is not the problem. The problem is that you would bring this in here knowing how that's going to make me feel, that you disrespect me on that level. If I'm you, that's how I'm feeling. Let's pretend Sharon Ramsey came in and suggested we borrowed money. Can you imagine how that would go?

I'd get pay-per-view.

To see that. Yeah, that would be a heel-billy knockdown. Oh, my gosh, unbelievable. That'd be one of those fights, right? But obviously, we've had those fights long ago in our marriage. We got past them. I'm really concerned that you use this opportunity to get the two of you on the same page more than I'm concerned about the car transaction. Maybe bringing up, We could buy one for 18. Why didn't you bring me that? Is a good way to start talking about it. But most of all, if I were you, I would talk about how it makesyou feel when he... How it makes you scared that he's going to mess up everything after you guys have worked so hard to get it cleaned up.

At.

Least he didn't come in and go, I want to borrow $60,000 and buy a brand new something. He didn't say that. He's still thinking he's- Silver lining. -still thinking he's going to get paid off in a year. But that means he's like a two on a scale of 1-10. He's not. He didn't take it all the way to F. Com.

We'll make the problem slightly worse.

Yeah. But the big problem is that that's a slippery slope. I mean, once you stick your toe in that water, the cortex will suck you in. It's hard to go on the lot of a car dealer and not leave without a car. It is dangerous. It is because they're fabulous cars. They're great sales teams. Even if the salesman sucks, the cars are fabulous.

You start looking at these new features and you're.

Like, Oh, man. They've got a lot more room. These little kids are on top of each other. The one benefit, though, of having them on top of each other is you can discipline them all at once. That's easier. One-arm- You can reach them all.

That's the parenting style they used.

To do back in this day. I did. I grew up in the day when your mother would reach across the back seat and you could not get away. There was no escaping. There was no dodging.

It's hard to do in the Yukon.

You've got to reach far back there. It was within reach. I'm just saying, well, some of them have automatics that do that now. I like moms. They just- Is that a thing? I'm kidding.

That's a feature moms would.

Pay for. I would pay for it as a grandparent, but there you go.

Just zap you in the seat if you're misbehaving. Just a.

Little zip, zip, zip. There you go.

Yeah, the key here is either sell the car private and she'd have 10k left after that, and they'd save up and pay for a car with cash, or wait, pay it off, then they can sell it and upgrade with cash. Either way, or upgrade with cash.

Or if you want to reduce the debt, okay, she said she owes 12. It's worth 22. If you sold it for 22 and you bought something for 18, you would only owe 8. You pay that off in less than a year. But that's not really the strategy. The reason for bringing that up is to point out that he didn't bother to go that direction. It was going up. If he had gone that direction, I'd have actually maybe gone with him. I said, Sure, yeah. You want to move up in car and down in debt? Yeah. That's a plan. Up in size, but not in value. You actually move down in value, go down in debt, but up in size, yeah, I'm for that. It's like people call up and say, We owe $12,000 on our car, and it's worth $12,000, or $10,000 or whatever. But we have a tiny little Honda or something, and we've got two kids on the way. What are we going to do? Well, you can move to a $12,000 van. It's a break-even scenario. But don't go further in debt. People use all these events to justify going further in debt.

It's so easy to justify going into debt, especially cars. Well, Dave, it's for the safety and reliability. No, it's not.

It's for you. It's for you. It's for you, little boy, little girl.

I want my truck. That's how they sound.

I want my truck.

That's all I'm here. My truck.

I'm sure your grandkid.

Sounds.

Like that. Say that.

One more time. I want my truck.

My truck. That's Dave's grandkid.

Right there. This is The Ramsey Show. Hey, folks, Dave Ramsey here. Do you feel like you're stuck living paycheck to paycheck and can't make any progress with your money? Listen, you do not have to live that way. On January 11th, my team and I are hosting a free live stream where we'll break down exactly what's keeping you stuck and how to break out of the cycle for good. It's time to decide you're ready to make a change. Go to ramseysolutions. Com/breakthecycle to register for free. George Campbell, Ramsey personality is my co-host today. Lots of things happening here at the first of the year. When you get stuck in a rut, it's like being stuck in an orbit. The gravitational pull of stupid is amazingly powerful. It will hold you in that orbit.

Is that a Einstein quote?

I just made it up. It's the new Ramsey theorem. Ramsey theorem of stupid gravitational pull. But I've been stuck in an orbit on something. It's just your habit. You got a dumb habit. You got a habit of not paying attention to your money is an example. When we're doing this thing on this huge, it's already over 200,000 people registered for it, live stream on the 11th of January. It's completely free. You got to go to ramseysolutions. Com and register for it. It's called Breaking the Cycle. What we're doing is we're breaking out of the orbit of stupid. You got to break the cycle. Sometimes it feels like, Oh, it's a family cycle. Sometimes people in my world, in the Christian called it a generational curse. Well, it's not a generational curse once you're 26. It's just you're being stupid.

It's in our.

Dna to be broke, Dave. It's not in your DNA to be broke. It's in your behavior that's causing you to be broke. You've glorified it by blaming it on your family. No, you can't do that anymore. You got to break the cycle. You got to break the cycle. The way you break the cycle is with new emotions and new knowledge and new ways of viewing things, a new paradigm. All of that comes from intersecting with someone that can slingshot you out of that orbit, break the cycle. That's what we're going to do. It's completely free live stream on January the 11th, and we do not want you to miss it.

It's at 7:00 PM Central Time, eight o'clock Eastern Time. Make sure you sign up, because even if you can't make that exact time, we'll send you a link to watch it. We're doing a special giveaway with this, Dave. This is cool. We haven't done this before.

$10,000. $1,000 to 10 different viewers. Now, signing up won't get you in the deal. Viewing will get.

You in the deal. Because we're giving away.

During the live- To viewers, okay? But 10 different viewers are going to win $1,000 to jumpstart their new year. We're going to announce the winners live that night as we're broadcasting. That's pretty cool. Must be present to win, apparently.

Like that, even digitally.

Yeah. You got to register to win at ramseysolutions. Com/breakthecycle. The whole thing is free. Dr. John Deloney, Rachel Cruz, George Camel, Jade Warslaw, Navigating Money Anxiety, Bad Money Habits to keep you stuck, practical money tips that actually work. We're going to help you break free of the orbit of stupid.

That's what we're really good at around here.

We are. We are good at it. We're probably the best in the world at it. It's one of the reasons this podcast just showed up on Apple the other day as the number one podcast in the world.

That was incredible. Out of all the podcasts, millions of podcasts in the world. We roast to the charts, thanks to you all out there.

Listening, subscribing. We've been hovering around 10 or 15, sometimes up to seven, up to five. But I don't think we've ever even broken three. Then we hit number one in December.

We beat all the true crime podcasts out there.

There's a lot of those.

It's gracious. We're in the wrong.

Business, apparently. Well, maybe not. But yeah. Hey, thank you guys, by the way, for spreading the word about the show. You're the ones that did it. Thank you for sharing the show and for clicking the five-star reviews and subscribing and all that stuff. All that stuff helps the algorithms on that, and it drives people to know about what we're doing here. You are our only marketing plan, so God, help us. Thank you. Thank you. Thank you. You help us. Ramseysolutions. Com/breakthecycle, January the 11th. Man, we'd love to have you view it with us. Samuel is in Madison, Wisconsin. Hi, Samuel. Welcome to The Ramsey Show. How are you doing? Better than I deserve. What's up?

I just have a quick question. My parents are in a financial ruin, and I want to help them out. I need some help, I guess. How old are-?

How old are you?

18.

What do you make?

Thirty-seven a year.

What's the situation with your mom and dad, huh?

Well, my dad has been jobless since we moved from Madison four years ago, but their plan was to, for summer, take us out on a camper and travel to the United States and stuff. But my mom got stage four cancer, so he's been taking care of her for four years, and she's on hospice and stuff. I'm the only woman that is currently working, and I'm trying to help him as much as I can. I'm actually debating on getting a second job. That's one of the main reasons I'm calling you.

So your 37,5 is supporting and he's taking care of your mom while she's on hospice?

Yes, but I'm getting a second job, so I'm probably going to be pulling $100 a week because I got money saved and savings and stuff like that, but I'm not paying their bills. I'm just paying for their gas, the phone bills.

You don't live there?

No, I'm living by myself, yes, but I'm still paying their... Part of.

Their stuff- You're paying for their what?

Their Wi-Fi, the phone bill, some of the propane.

How are they eating if your dad's not working?

My dad's living off of Roth IRA. I'm 50 years old.

How much is in the Roth?

That he did not disclose, but it's bad.

What's the plan once the Roth money runs out?

God only knows. I mean, I'm setting up. I have about $1,500 in investments, and I just opened up a Roth IRA because my company that I work for does a good trip to my 401(k) till I'm 21.

What hours do you work now?

Third shifts. I work a 7:00-7:00.

7:00 p. To 7:00 a.

7:00 p. I'm thinking of.

Cutting those in there. Can I be brutal for just a second? What? Because you're in an awful situation, honey. My heart's aching for you. Yeah. How long is the doxie your mom's got?

Well, they just told her that they can do no more. She's untreatable. She has a tumor the size of a basketball.

Yeah, and the hospice is saying she's got how long?

I don't know. She's on a morphine and that's other.

This is a matter of days and maybe a couple of weeks. Am I wrong?

No, I mean, they gave her a month to live. That was four years ago. By the grace of God, he's kept her alive. We're living on hopes and prayers right now, but I want to help them as much as.

My dream is to make- I'm not trying to be mean. I'm not trying to break your hopes or prayers or not. I'm not messing up your miracle, okay? I'm all in for that stuff. But if the miracle doesn't come, it doesn't sound like she's in very good shape to me.

No, she has major edema, so she can barely walk. She's swollen. The main reason I'm calling you now is because.

I can't take care of people here. Do you have any brothers or sisters?

Yeah, but I don't really talk to them because they do other things.

No other families helping.

Or willing to help? All my grandparents are taking care of my mom while my dad is doing side stuff, just getting... He's jobless, but he's got a friend that hires him for a seasonal work, but that just got done. So all that money went towards paying off the camper in the truck. But now he has nothing until he takes back his family and opens up his Roth IRA again. Okay.

Your dad is able to work then when your grandparents are there. If you're able, I would prefer you to spend some of your day taking care of your mom and your dad to be working, and your dad needs to sell his camper.

That is the main thing that I want to get to is that he's still living on the dream of going with my mom and all of us and traveling the country and that's holding him back.

You don't even talk to your brothers or sisters. You're not traveling the country with them. Oh, yeah. Your mom's not leaving with hospice and a camper.

He needs to grieve this dream and to.

Move forward with reality. Somebody's going to have to help your dad out, son. You working more is not the answer. I think your dad has got to make some changes. If you can help him to make those changes, and I don't know how you do that at 18 years old- It's a big burden. -that's what we pray for. I don't think you working and throwing another $300 a week at this is fixing it. Your dad's going to have to make some moves. I'm so sorry you're facing this, son. What a horrible thing to have to go through when you're 18. 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. George Campbell, Ramsey personality, is my co-host today. As we answer your questions about your life and your money, open phones at triple-eight, 825-5225. Ray starts off this hour in Oklahoma City. Hi, Ray. Welcome to The Ramsey Show.

Hey, Dave. I've watched some of your videos and stuff, some of your YouTube things, and I've put myself into some major issues. Started about three years ago, I guess, when I medically had to leave my job, and it took me about a year and a half to even get Social Security disability going on. I am retired military, and I'm drawing military disability also, but I've had to borrow from some very high interest loan places in order to survive for the longest time. Now I can't get out of the cycle because I can't get a consolidation loan to pay off all of them and refigure my cash flow.

What is your military disability income?

Let's see. Okay, so military retirement, I bring home about 1,900 a month. Social security, I bring home about 2,400, and disability is 39.

Okay, on top of that. Okay. Yeah. All right. So you've got to make- I'mtrying to make- You got $8,200 a month coming in.

Yeah. Okay. The problem is with car payment and all my loans and rent and bills and everything, I'm shelling out about 88.

How old are you?

I'm 60.

What's the nature of your disability?

Bad knees, bad back, PTSD.

The PTSD is what cost the last job?

No, the knees and back is what cost the last job. Oh, okay. Because I physically cannot work anymore. I can't sit for any long periods of time. I can't lay down for any long periods of time. I can't stand for any long periods of time. My back is completely shot. I have massive trauma in my back and my knees. And the military has basically deemed me unemployedable.

Because.

Of physical restraints. I'm not supposed to pick up more than 10-15 pounds at a time.

Are you married?

Yeah.

What does she make?

She does a consulting business for a company, but she doesn't really make anything, everything she makes. She puts right back into it for right now. She really doesn't make a whole lot because she just got started with the company.

It doesn't sound like a good deal.

Nope. I'm pretty much having to cover everything.

I've spent the last two years- I'm sorry for the miscer, man. Thank you for your service and what an incredible price you paid.

I've spent the last two years trying to rebuild my credit.

Well, you don't need credit. Credit is your problem. How much debt do you have?

All together: cars, credit cards, and high.

Interest loans. Okay, how much do you owe on credit cards?

Probably about eight.

What do you owe on your cars?

The one car that I owe on is still got about 22 on it.

Okay. What is the other debt?

The high interest loans.

Okay, and how much of those?

If I were to pay them out completely, we're looking at about 25k.

Okay, all right. You have 100k coming in. I think the challenge is that the two of you need to do two things. One is you need to sit down together and get on a detailed written budget. We're going to put you into Financial Peace University and into every dollar the world's best budgeting app, and I'm going to pay for it as my gift to you to say thank you for your service, okay?

Okay.

But you make $100,000 a year, man. Yep. Okay. You can't work because of your physical condition, so you have zero need for a $22,000 car.

No, that's a life car.

Yeah, it's gone. Shouldn't make any money. We're selling it. We're getting a cheap car. What are you doing? What have you got?

2015, verse a note, that's paid off. Okay.

We need to get her something that's paid off because you all are broke and you're out of control and you're going to have to do some radical things to get in control. That's the two of you sitting down together. She needs to get a job that actually pays money. Then the two of you can take the 100,000 you got coming in and the money that she actually makes and get rid of a car payment, and then you can clear this up in less than a year. But you don't have anything here that's not doable. But all this stuff has happened to you and the trauma of this whole situation has caused you guys to get paralyzed, and you're just not dealing with it. But you've got the math to deal with it. The math is there. $4,000 a month and you're debt-free in a year if you keep the car.

Yeah, I know. But that's the problem is I don't, you know.

Well, you got 88 coming in.

If I do that, then do I stop paying on stuff and just snowball it?

No, we're going.

To- Pay off one at a time, or?

I'm going to pay off one of these high interest loans. How many different loans are there?

I don't know off the top of my head, but there's a lot. But there's.

Varying amounts. Let's list the amount, smallest to largest, and take out $4,000 of them this month and take out $4,000 of them next month. That's $8,000 of the 25.

Right. But that's the problem. I don't have-.

You have $8,800.

But that's what I'm saying. So do I just stop paying on them? You pay.

Minimums and you attack these. But you can do this. You can do this. I think selling the car is going to help out.

Freeing up that payment will give you a little bit of margin to start this process. Yeah, and.

You've got to do a written game plan for your money. You write down $8,800 at the top of the page or $8,200 at the top of the page, and then you work down into this. There should be margin in this. It should not all be gone. Those interest rates, there's not enough debt here to cause that. Hang on, we're going to get you signed up for everything as our gift.

It's no secret we love a good deal here at Ramsey, which is why I don't want you to miss this one. Right now, when you preorder my new book, Breaking Free From Broke, you get $100 worth of bonus items for free. I'm talking ebook, online Q&A, and enhanced audiobook all completely free and all chalk full of what you need to know about credit card schemes to investing traps to mortgage myths to building wealth. All the research is there. The offer ends January 15th, so do not wait. Go to ramseysolutions. Com/store. That's ramseysolutions. Com/store. George Camel.

Ramsey personality is my co-host today. Thank you for joining us America. Open phones at triple-eight-eight-two-five-five-two-two-five. The Ramsey show, Question of the Day, is brought to you by Neighborly, your hub for home services. There are a lot of things you need to remember when the weather gets cold. Thankfully, Neighborly has a free winter maintenance checklist that can help save you time and hassle. Check it out at neighborly. Com. Com/ramsey, great company. Neighborly. Com/ramsey.

Today's question comes from Lauren in New Hampshire. She asks, Do your parents' debts pass on to you after they die? Things like credit cards or failed business debt? The age-old question. The question is, is any of this debt in your name? It sounds like no. Let's assume that there's no debt in the child's name, parent passes away, they have credit card debt, failed business debt. My understanding is that this would come from their estate before anything gets paid out in the form of inheritance.

If your dad lives in an apartment and owns nothing and has $20,000 in credit card debt in his name, it does not pass to you. Credit card company will simply not get paid. He died a palper. He died with no money. They took the risk. He died with no money. It does not pass to you. Now, if he owns a house that's worth $100,000 and he has $20,000 in credit card debt and he dies, the credit card company will get paid out of the value of the house before you get a distribution. So the house is sold $100,000, $20,000 goes to credit card company, you're going to get 80 if you're the only heir. That would be the way it works. So you're right, the estate would stand good for the debts. But when you die, what you own stands good for what you owe. Debt does not pass generationally in the United States, but it does come out of what would have been your inheritance if there is an inheritance.

Now, have you seen creditors try to come after the family for debts illegally?

Unethically and illegally, yes.

And people get scared and go.

Okay, we'll pay it. Yeah, they'll have some one of these debt buyers that buys stuff at pennies on the dollar, and they'll buy a gazillion dollars worth of debt, and then they just start calling everybody in sight, and they call you up and they go, All right, your dad, you owe this because your dad, and just see if they can intimidate you into paying it. Your dad died, and they try to get you to pay it for your dad, and You owe this. You're like, Oh, we're going to put it on your credit. They'll threaten you and lie and all that. Some of them are really, really unscrupulous. There was a real movement by the Federal Trade Commission a few years ago to shut a bunch of that down. There's another batch of things they find in the debt is, let's say, someone filed bankruptcy and the debt was discharged in bankruptcy court. You don't owe it anymore legally at all. It was clear. They'll still try to collect it. Oh, my God. Just intimidating at you. Well, your bankruptcy didn't clear this, so we're going to put it on your credit and we're going to sue you and we're going to guarantee your wages and they start yelling at you on the phone.

People that aren't mean and nasty like me, they'll cave and give them a bunch of money. Yeah, it happens all the time. But that's an illegal and ethical practice. So don't fall for it. Yeah, don't fall for it. But the point is, no, Lauren, you don't owe money. If your mom and dad die with a bunch of debt, you don't owe their debt. But it will come out of the sale of their assets before you get an inheritance. That's the thing to remember. Ravi is in Austin, Texas. Hi, Ravi, how are you? Good. How are you doing, Dave? Better than I deserve. What's up?

I have no debt on my name. There were some debt I carried out last year. The only thing we have is our mortgage, which currently is at $350,000. I have a stable job. I earn around $150,000 from a job. I have a wife and two sons, and I have $200,000 in a savings account. I cannot figure out if I should invest in real estate and then create a passive income, or are there other better options that I should go for?

I don't know if you'll like my answer, but if you filter this through the Ramsey Baby Steps, which people have followed to become Baby Steps millionaires, you would be at what we call Baby Steps 4, 5, and six. Invest 15% of your income. We're saving for the kid's college, and any extra money we're going to throw at the mortgage principal.

We have found that one of the keys to building wealth long term is to get a paid-for house in the mix. One of the keys to building wealth long term is not keep a $350,000 mortgage while I go do real estate that I learned on TikTok. Got you. That never comes up when we interview millionaires. What always comes up is we dump money in our 401(k), our Roth IRAs, and we paid off our house. I've got 800,000 bucks in my 401(k), and my house is worth $600,000 and it's paid for, and I'm 53 years old. That's a typical millionaire. And so 800 and 600 is $1.4 million net worth, right? That's a typical millionaire. We're always going to lead you first to be debt-free, which you've done. Congratulations. Great job. Second to have an emergency fund at baby step three of 3-6 months of expenses. Then exactly what George told you, 4, 5, and 6 is 15% of your income, which is just out of your 150 income going into retirement. Starting kids' college funds, you can do that out of your 150 as well, which leaves the 200. I'm assuming you have other money other than just the 200.

I'm going to pay off my home as fast as I possibly can then. With you, I think in your situation, you're going to have a paid-for home in two or three years.

Then you can invest even more, and you can invest in a brokerage account, max out retirement.

Incredible. Man, Robbie, what I did when I followed that 1,000 years ago, I'm still blown away to this day. I know the math. I know compound interest. I know what it looks like. But I took an old house payment and rounded it up 500 bucks when I paid off the house, and I put that amount of money into a separate mutual fund. How fast that one mutual fund was a million dollars blows me away to this day. I look back and I go, That stink, and that was a breakthrough. That's why I know the math works, is I actually lived it and walked.

In it. The key was you leveraged debt. The key was your savings rate, your income was freed up because you didn't have.

Any payments. I didn't pay off the house and then spend the house payment. I paid off the house payment and then took the house payment plus some and invested that plus invested more. But that one account, just not having a house payment, how fast that one account became a million dollars in mutual funds just blows my mind. That's amazing. It's just amazing. It's a cool goal to have. You take like 3,000 bucks a month, that's $36,000 a year going in. How fast that blows up. I mean, you're not talking about five, six, seven years. It just blows up. It's crazy. But we don't think about investing $3, $4,000 a month.

We don't think about that. Well, we're trying to do 17 things at once. That's usually our problem.

Exactly. Amanda is in Phoenix. Hi, Amanda. Welcome to The Ramsey Show.

Hi, Dave. Thank you so much for.

Having me. Sure. What's up?

Hey. First of all, I just want to briefly thank you for everything that you do. It's so important. I remember listening to your show when I was 12 years old on the radio. Wow. Now I'm 25, so I wasn't really taught much about finances growing up. I had to teach myself, worked at the bank four years since I was 18. I got married young. We've been married for six years. We're finally on the same page of like, hey, finances are really important, and we're realizing we suck at managing it. So we've gotten ourselves into a little bit of debt. I'm feeling overwhelmed. I feel like I'm in over my head with it. I'm just wondering where to start. We've got about $30,000 in auto loans, and there's 7,000 in, or more like $10,000 in credit card debt. But that's it. We don't have a house. We're trying to save up for one, trying to get a savings. I just want to know where to start.

How much in savings?

We've got about 500 right now.

Nothing, okay. How much is your household income?

It is between 75 and 95 a year now, so we're in a good place to start doing that.

How old are you guys? Twenty-five. Okay. You said that earlier. I'm sorry.

Okay. No, you're okay.

All right.

If we're going to focus on one thing at a time and filter this through the baby steps, your next step would be baby step one, $1,000 in the starter emergency fund. You'll have that next paycheck, right? Okay, yes. Then baby step two, we're going to focus on consumer debt. We're not saving anything. We're just focused on paying off all of our consumer debt, that 40K, using the debt snowball, smallest to largest balance, regardless of interest rate. Once we knock that out, which you guys will do probably in the next year, you'll focus on a full emergency fund of 3-6 months of expenses. Those are your next steps.

Yeah, plus or minus selling the car. $30,000 car is really high in this situation. You may keep it, but it's going to cost you an extra year of getting out of debt.

You'll leapfrog this thing if.

You get rid of that car. Yeah, you'll move even faster if you move down in car. You really bought too much car. It's not the end of the world, but it's close. It's right on the bubble. Yeah, something to think about. Hang on, I'm going to send you a copy of the book, The Total Money Makeover, to get you started, restarted after your 12-year-old listening. This is The Ramsey Show. Hey, guys, Rachel Cruz here. Now, most of us know what we should do with our money, but actually doing it? Well, that's a whole different story. That's why it's so important to create good money habits. On January 11th, our team here at Ramsey Solutions is hosting a free live stream where we're going to look at the habits you need in your life if you want to be successful with money. Go to ramseysolutions. Com/breakthecycle to register for free. That's ramseysolutions. Com/breakthecycle. Don't miss it. George Camel, Ramsey personality is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. David and Ellen are with us. Hey, guys. Happy New Year. Happy New Year to you, Dave. Happy New Year. Good to have you guys.

Where do you live? I live in the Old Pueblo of.

Tucson, Arizona. Very fun. Well, welcome to Nashville. Thank you. Great to be here. How much debt have you guys paid off?

We've paid off $87,368.

Very good. How long did that take?

Two years and five months.

Very good. And your range of income during that time?

It was between $91,000 and $95,000.

Very cool. What do you all do for a living?

I currently freelance in communications and PR field.

I'm a public school teacher. Oh, very good. What grade do you teach? Fifth grade. Fifth grade. That's an awesome grade. It's a lot of fun. They understand the good sense of humor.

They're not quite middle.

School yet. They're not in security yet. They've not lost their minds yet completely. Good for you. Welcome. Very, very cool. What debt was the $87,000?

It was the rest of our.

Mortgage, Dave. I'm looking at weird people. It's Ramsey official now. Paid for a house. I like it. What is this paid for a house worth?

Concertively about 250.

Very cool. How much do you guys have in your nest egg in your retirement?

I think between all our investments and assets and stuff, we're right hovering around half a million.

All right, way to go. Congratulations. Halfway to the baby steps millionaires. Thank you. Way to go. Thank you. Good stuff. Okay, what happened two years and three months ago that put you on this debt-free journey?

Well, it was about a little more than three years ago. My wife came to me and said, I think I want to get the house paid off before our son graduates from high school. Oh, I like it. We had about a six-year time frame. I looked at the numbers and I saw that our mortgage statement where it was, and I said, Okay, divide by six years. I said, Oh, I think we could do that. Then I dug into the numbers a little more. I said, I think we could do it in five years. We had just finished baby step two. We were working on through three, four, and five, and we started doing all that. As we did it and we started to accelerate the process, we started to see this number is going to come down. Once we got through baby step five, which was we promised to have a certain set of number aside for Daniels College, we squeed, we flew through that really, really quick. I went down and looked at it and said, You know, I think you could do this in three more years. It had been 12 months. We got like $60,000 done.

I said, Okay, let's just attack it. We started attacking it. We were on pace to have it paid off in March of this year and then came out July. My wife came to me and said we had some money in the next car fund. We were saving up for our Baby Step 3B. She told me, How much is left in the mortgage? I said, It's just under 15. She goes, How much do we have in the next car fund that we could use? About 15. She goes, Let's pay it off now. We paid off in July. We ended up spending the rest of the year then building up that fund backup. Really, today we're actually on baby step seven now officially.

You were there. You're just buying a car. Yeah, exactly. We had a car that we really enjoyed, but I knew that we would not be able to take out a loan to get the next car. We do about what, 30, 40,000 miles a year?

We're a heavy drivers.

Not David, though.

Thank goodness. The automatic cars aren't out there yet.

I knew that.

We'd have to have something set aside for the next car. That was great. We were able to work that out.

We pretty.

Much by now have refilled that. Very cool. We'll keep working on it a little bit, little by little. Very cool. It just occurs to me that the people listening on the podcast or radio don't know what we're laughing about. David is sight impaired, right? Yes. How much sight do you have, David?

I'm legally blind. I'm not totally blind. I have an idea where you guys are, that stuff.

Yeah, but definitely not driving. Definitely not driving, or.

Flying planes, or that thing. Okay, all right.

Elon's working on it.

We saw the white cane thing going, so we knew something was going on and we knew what our joke meant, but the rest of the team, the people looking into their microphones and the speakers didn't know we're laughing. Anyway, okay, cool. Daniel is with you, and he's graduated now or getting ready to graduate?

He's in his.

Sophomore year. Sophomore? Wow. You beat the graduation big time.

Yeah. We got a couple of years of investing to work on and get some things going, so he'll be.

Ready to go. Sounds like he's going to get a sweet graduation gift.

He's going to do well. He's such a smart kid.

I was really worried that we'd have to spend a lot to get him somewhere good, if not scholarships. But we.

Knew that was very important. Paying off the house and giving him this legacy and this fresh start. He's been through the process every step of the way. There's no way he's going to have a car payment. He saw mom and dad sacrifice and work so hard to get to where they are today.

No, absolutely not. He's been through the process, and he especially has been participating lately as far as he participates at some of our budget meetings, where he knows we talk about things, he'll hold us accountable sometimes, we'll go through a storage, Mom, that's not in the budget, or, Is that in the budget, dad?

Or something like that.

That's fun.

There we go. What an annoying but beautiful piece where your son is like, Mom, you really don't need to be buying that.

-it's awful. -i taught him.

Too.

Well. He's almost worse than me, actually.

If I recant this story correctly, you guys were working the baby steps exactly, and you got to four, five, and six. But in four, five, and six, you just realized you could turn up the heat a little bit, and six years turned into less than three.

Yeah, it was funny. It was about the spring of the pandemic, so it's 2020. I was applying for disability and getting rejected. I was going through vocational rehab to get my new skills and techniques and stuff so I could be able to get back to work and do the things I wanted to do. That was about the time we got a big windfall. We had the COVID stimulus checks. I got disability approved. I had a bunch of back payments coming in at the same time of tax refunds coming in. We had a big block of money. Spring of 2020, we were able to finish the car. We had financed that. We paid off the last of that. We got through Baby Step 3B mostly, Baby Step 3, and then we got to Five where we had his college fund already set up, but we hadn't really put any real money into it lately. We committed ourselves to say, Let's start this up. We used a lot of that money to speed us through that process somewhat so that we got to Baby Step 5 and 6. We're going to do those simultaneously at the initial plan.

But because we got so much extra money through her working and her school being a quality school, she gets bonuses and things like that for the things they do at their school. We end up speeding through the instead of doing $20,000 in a year and a half, it took six months. We spent through it really fast. That's why that whole timetable went from six years to five to four to now two and a half, and it got done.

Well, what normally happens when you actually put this down on paper, once you start living it and you start winning, you do end up turning up the heat and dialing and dialing and dialing and dialing and dialing and dialing and dialing. It's a natural process. People generally get out of debt a lot faster than they initially think they're.

Going to. There was times that it became like a little bit of a game sometimes. We would come out to the last week of the month and we think we have a limited grocery budget. We said, Okay, we got to do 60 bucks this week. She's like, Let's do it. Let's go. We'd do it in 55 bucks or something. You all proud. We'd do these kinds of things. We'd have these little games to make ourselves get our push through. It was just amazing how we started doing the budget six, seven years ago, and we just found our space and said, We're just going to figure out a way to do this and do it right and just find money. Money just pops up everywhere, even though nothing really changed the turn to our income.

It was messy, messy, messy in the beginning. Yeah, when you start paying attention, though, it cleans up and it dances. It gets in a line. It dances the way it's supposed to dance.

It's well done. It's really been fascinating. Some of the biggest things we did was when we had really lean months, and yet we weren't on credit card, we weren't going to go in the debt, but we found a way. God provided us the guidance, the guidance of the way for us to get through our budget and be able to manage. It wasn't easy. We had to drop a lot of streaming services. We had to basically read the books we had in our bookshelves, watch the DVDs in our shelves. That was really all we entertained. We had for a long time there. Now we have some lease margin and at least enjoy some of that stuff. We can still put a good amount of money toward.

The best. Stream like no one.

Else now. There you go. Yes. Hey, we got a copy of the Baby Steps Millionaires book for you, the total money makeover book for you, and a Financial Peace University membership. That's the live and give box to say thank you for coming from Tucson to Nashville to do your debt-free scream. You guys are amazing. You're heroes. I'm so proud of you. Well done. Thank you, Daniel. Thanks for bringing Daniel to share in the debt-free scream as well. It's something he'll always remember. He's got to be proud of his mom and dad and he's shaking his head. $87,000 paid off in two years and three months, house and everything. They're weird. They did it making '91 to '95. Count it down. Let's hear a debt-free scream.

Here we go, guys. Three, two, energy. We're dead free!

That's how they do it in Tucson, boys and girls. I love it. Well done. Well done. This is The Ramsey Show. Now, our scripture of the day, Isaiah 43:18 and 19, don't remember the prior things. Don't ponder ancient history. Look, I'm doing a new thing. Now it sprouts up. Don't you recognize it? I'm making a way in the desert. Paths in the wilderness. J. P. Morgan said, The first step towards getting somewhere is to decide, but you're not going to stay where you are. Oh, there it is. That's like breaking the cycle. You got to move. Yeah. Or breaking free from broke.

That's what we do.

Breaking the cycle is the new live stream that comes out January the 11th, and we're giving away $10,000. Ten people will get a thousand dollars each. You can sign up for free at ramseysolutions. Com. Breaking Free from Broke is Georgia's new book, which comes out-.

January.

16th. Just a few days later. January 16th, just a couple of days later.

That's the theme, I guess, of 2024.

We're all going to break free. We're breaking something. Something's going to break. Breaking free from breaking the cycle. We're breaking free from broke, we're just breaking something. We're breaking stuff.

You've liked breaking things for.

Many decades. If you want a cake, you got to break some eggs. I'm just saying.

Is that an old timey saying? I haven't.

Heard that one. It could be, yeah. It could be.

I feel.

Like a Sharon Ramsey. It could be a really old timey saying. Hey, check it out, guys. Georgia's new book comes out in just about 10 days here. If you still want to get all of the free $100 worth of goodies with the presale, you can still do that. Breakingfreefrombroke@ramseysolutions. Com. Mary is with us. She's in Seattle. Hey, Mary. Welcome to The Ramsey Show.

Thank you.

Happy New Year. Happy New Year. How can we help?

Okay, so I was an idiot. I was in love with a man that convinced me to co-sign on a 2019 jetta in the fall of 2021. I'm not in that relationship anymore. But anyway, last summer, I convinced him to turn the vehicle back into the dealer, basically voluntarily repossess it. He could not pay the payment on time. And I was also helping him, and he made more than me. But anyway, so Volkswagen hasn't sold the vehicle yet at auction. But when it's sold, of course, we, me, and him are going to be on the hook for whatever is left on the loan. So I want to know if there's anything I can do. He does have a settlement for Harley that he got an accident and wasn't his fault. And he's going to get compensated for that. I was also a cosigner on Harley because I was stupid. But that bike has been paid off. He's just waiting for the settlement. I'm wondering, can I put a lien on a settlement or what can I do? I have text messages from him saying that he will pay off the jetta, but I don't trust that that's going to happen.

It sounds like that's a correct assessment to me. Where was that girl? Oh, Mary, I'm so sorry. What a horrible mess. What a sad way to learn a horrible lesson, too, isn't it?

Yeah, right.

How old are you?

I'm 60 and he was 43, so I had a little bit of the share complex going on or something.

The share complex. You're great. You're great. Okay, so how much money do you have?

How much money do I have? Well, I'm on baby step one.

I'm just starting now. You don't have any money.

I don't have any money. I have $3,000 in credit card debt that I have-.

What do you make?

$61,000 a year. Okay.

What was owed on the JETA, do you know?

$29,000 and change.

Okay, all right. Let's just make up some numbers for a second just to give you an example, all right? Let's pretend that that JETA, when he turned it in, was worth 20. On the repo lot, let's pretend that it sells for 12, okay?

It might get 15 for it, but we could say nine, anyway. Let's say there's a $15,000 deficit when you're done. Right. They come to you as the cosigner and they want $15,000. Well, the first thing you tell them is what you told me. I have no money.

Right.

I don't have any money. I got $3,000 in credit card debt, and I have zero cash saved, and I don't have any money. That's the first thing you tell them, which is also, by the way, the truth. You can tell them where he is and where his Harley account is, and that he is getting a settlement, and that they should get the money from him. Okay. And help them get it from him. That's the best thing you can do. If that doesn't work and you and I are both suspect it won't, out, then the good news is you can usually settle a repossession deficit for somewhere around 10-20 cents on the dollar. If it's $15,000 owed, $1500-$3,000 will settle it.

Oh. Yeah.

Okay. But if you get to that point, that means you're going to, A, have gotten out of debt. You're going to have built up a little bit of an emergency fund of $5,000 or $10,000 or something before they get around to bothering you with this. Then when they call and bother you, you say, Okay, you go after him. They say, Well, we tried. You say, Well, you ought to try again because I got no money. Then they come back at you again. Then you say, Hey, I just want to settle my part. I don't want to settle his part. You can still go after him for more if you want, but I'll give you $1,500 for my part.

And.

Start working with him. You'll have to jostle back and forth with him and argue with him some, but you probably will get it for $1,500 or $2,000, $3,000, and then leave his part there. Don't settle the whole debt. No. But I need in writing from you that the portion of my name is settled in full, that I owe nothing else, and you go after him for whatever you want. Right.

Perfect. Okay, that's a lot better than.

I thought. Yeah, you're in better shape. It's not going to kill you here. But you do have to go ahead and get the rest of your money straightened up.

Yeah. Then you just have a 3,000 credit card debt. Is there anything else?

I own a house with my ex-husband, and we both pay half of the mortgage on it. It's probably worth about 800,000 here in Seattle, but we owe 170.

Who lives in it?

Myself, my two sons, and there's a mother-in-law apartment, so the ex-cash lives there too, but we're not together or anything. We get along. It works for us. That was my choice many years ago when we divorced.

Wow! Okay. All right. Well, then you've got that asset. You don't want them attaching that asset, so you do want to settle this. Right. So you do need to get the rest of your stuff under control. So you got a little cash built up, war chest before the war comes.

Yes.

Yeah. Wow.

Perfect.

Well, we're usually talking to a 24-year-old that did something like this, but you can still give anybody that's dating someone the same warning, never cosigned for someone that never buy anything on debt in any way or even co-owned something with someone you're not married to. Would you testify to that, Ms. Mary?

I will preach it to the mountains. Absolutely. I will never do that. It doesn't matter how good looking you are and how good looking he is and how much of a share complex you want to have. It's not worth it.

That's a great testimony.

That's very good. You did a good job, Mary. We're proud of you. You'll be okay. If you need more help, we're here to help you, okay?

Thank you so much.

Absolutely. Thank you. Thanks for calling in.

What's your old quote, Dave? Testimony is a wonderful thing to have.

Getting one's a pain in the butt.

Yeah. That's what Mary just experienced with her.

Share complex. Oh, that's funny. Oh, she's great.

That.

Was a fun way to end. But yeah, the whole cosigning thing, man. Dangerous stuff, obviously. There's proof. Dangerous stuff. If you need to go. That puts a sour to 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. Dr. John Deloney here.

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