
Your Life Is More Than Just a Set of Numbers
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- 6 Jan 2025
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"We have struggled with relationships since becoming everyday millionaires,"
"My ex was living a double life and left our family in poverty,"
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"My wife won't talk about unplanned purchases,"
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From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by my good friend, Dr. John Deloney, and we are here for you.
We want to help you take right next step with your life, your money, your relationships, whatever is going on. Give us a call at 888-825-5225. Chad is going to kick us off in Orlando, Florida. What's going on, Chad? Hey, how's it going? Good. How are you? Thank you guys for letting me on the show. I'm in the construction industry. I started my business in 2017. Rained it for until the end of 2019, then started I was looking for somebody and then picked up my business again in 2022 until today still.
I never paid taxes and never filed business taxes, and I'm at a point now where I don't know what to do. I don't know where to start. Have you estimated how bad it is? Let me ask you this way. Have you made money? Yeah. Have you done well over the last few years? The past two years have been very well. Do you have any money currently? You got money saved? Probably around 10 grand is it. Oh, boy. I don't even know where to begin. I'm trying to do everything right, and this is something that keeps me up at night.
What stopped you? Because you knew day one, All right, I got a business. I make money. I got to pay the piper.
What caused you to go, I'm going to bury my head in the sand.
Did it just become too much after year one or two or what?
Yeah, the first year was a little rough. Just trying to make it. Then the second year was pretty decent, but it was still rough. I was basically using everything to just pay for my life, pay for my everything. When was your last tax return that you filed?
What year? I did one last year. I have my business and I still work full-time with a company. I have a W2 that I have filed.
I've been filing W2s, but it's my side business that's been filed. If you had to ballpark the last seven years, what you've made minus what you… Like your profit. Right. Times 35 %? Yeah. What's 35 % of that profit number, do you think? Are you talking $100,000? Are you talking $500,000? No, it's not near that. It's probably around $100,000 at this point, I would say.
What's your call to conscience?
Is it just like, New Year, new you, like 2025? We got to get this thing right? No, I've been trying to figure out what to do for probably about a year I'm at the point now I have to secure the rest of my future with my family.
I have to do everything right now. George is going to walk you through it, but I want to tell you two things. Number one, we could sit here and beat you up for being dumb over the last seven years. You got a family, I'm not going to do that. I'm going to tell you, I'm proud of you for today being the day. We're going to come clean, and we're going to get this thing right. Okay? Yes, I appreciate that.
Second thing is, you have put an extra 10 years of life miles on your heart and on your brain.
Let this be the moment that if you have a hard conversation with your wife, with your kids, with your kids' schools, with an employee, that we're going to handle that stuff as they come up day of so that we don't add any extra miles to our soul, right?
Absolutely. Good on you. All right. Hey, this is going to suck. All right. This is not going to be fun.
But we're going to get on it. We're going to do it Chad, the first thing like John was talking about, we need to assess the damage. You need to get all the financial records you can, figure out what amounts are owed, income, payroll taxes, federal, state, local, you name it. Get all the documents you can get, expense records, prior tax filings. Once you have all that, you need to contact a really good CPA. If you go to ramseysolutions. Com/tax, we have a network of these pros that can help walk you through this. But you're going to need a pro. This is not a DIY situation. I knew that from...
Yeah. Okay.
That's where I'm at the point where I was like, Do I need to get a tax attorney? I mean, not just a CPA.
I don't know what to do. Well, they'll be able to direct you and say, Hey, this is attorney level. It may not be. I think so. I don't know yet. I think you'll end up there unless you can come up with a big chunk of money, but that's a problem for future you. Let's just do the next right thing right in front of us, right? The goal is you want to be proactive, calling the IRS, explaining the situation, that can actually reduce your penalties.
Likely, what they're going to say is, Well, how much can you pay now? Because that's going to help you reduce penalties in the future.
Then what does this payment plan look like? Yeah. You're going to have to pay the piper here, but the goal is to now minimize more damage being created.
That's where being really proactive, explaining the whole situation, getting with a good CPA and then figuring out a game plan.
The next few years of your life are going to look drastically different. You're going to have to learn to live on 30, 40% of your income because the rest of it is going to pay for the past. Right. That's the That's the best part is the sacrifice your lifestyle is about to take. But it's not as hard as going to jail for tax evasion. Exactly. Oh, no. Yeah, that's- Those are your options. I've literally thought about every scenario you could ever think of, and that's where I'm at. How old are your kids, brother?
I'll do.
My daughter, she's out of high school now. It's not a young family, but it's still my wife.
She's wanting to start a business, and it's just like, we need to get everything done 100% right now. Can I tell you what's going to free you? Yeah. It's going to sound nuts. After you call this, I want you to get online, like George said, and get with the Ramsey Tax Pro, I don't want you to sit down and say, I've made a huge mess. I don't know where to start. I need some help. They will give you a step-by-step guide. That's number one. There's a chance that with your business not being so great most of the time your expenses and buying tools and wood and whatever else you're doing.
It may not be as bad as us just sitting here thinking it is, right? Right. Yeah. But there's an existential part of this, and I want you to sit down with your wife and your daughter at your kitchen table I don't want you to look them both in the eye and say, I messed up. My wife's aware, and she's- I know, but I want your daughter to participate and see what it looks like when a man tells the truth. When a man says the words, their dad says the words, I'm sorry, and here's what I'm doing now. Because your daughter's going to be a part, your wife's going to be a part of this sacrifice moving forward, like George said. You're not going to have way less disposable income. Daught She may not have the car that she was hoping to get. She may not be able to go to the college she was hoping to go to. Maybe. Yeah, that's where I'm at. Maybe not. But you're going to be free because you're going to have put everything out on the table for her. She needs to know dad has a plan.
Dad's calling a professional. Dad called a couple of knuckleheads on a YouTube show, on a podcast, and so that was huge.
But dad's got a plan, and we're moving forward. In this house, from this day forward, we're people of integrity. We do things the right way. Right. I really Yeah, I really appreciate that. You got it. It will free you if you do that.
Yeah, a lot of this is the emotional just buildup of seven years of burying this and burying this, and now we got to do some excavating.
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I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me, too. They don't know what to do next.
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Com or call 800-356-42. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. If you're listening to this show, I'm going to assume you like it. This is not a hate watch or a listen for you. We want to know your favorite For some people. That's why John listens. Some people. But we do, John. We want to know what your favorite parts of the show are, what you like, even what you don't like. We want to hear more about whatever it is we want to hear. So, survey is now live. The Ramsey Show annual listener survey And there's two ways to participate. If you want to help us out, text the word survey to 33789, that's 33789, text the word survey, or just go to ramsey solutions. Com/survey. And if you're listening on podcast or YouTube, just click the link in the show It's in the notes and description, and you will be sent there. Here's a little bonus for you. If you sign up today, you'll be entered to win a $500 gift card if you complete the survey.
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All right, let's go to Brandon in Gulfport, Mississippi, up next.
Welcome to The Ramsey Show. Hi. Thanks for having me. Sure. What's going on? Well, Doris, Dr. John, very good to talk to you all. Dr. John, about halfway through your new book, and so far, Well, I appreciate that, brother. Thank you. Good. Yeah.
Hey, just a little backstory.
We've been at the Baby Steps since about 2010. We became everyday millionaires, almost textbook around Within 10 years, we became millionaires and paid off our house, a whole nine yards, started- Amazing. Started doing business, and of course, with no and so forth. But recently, I'd say within the last two or three years, we started noticing old Good relationships, fizzling, and building new ones have not been so great as a family. It's an unintended consequence of, I think, how we live our lives. Even though we don't brag about it, I mean, certain things have come up over the years, like paying for our kids, fully funding their college through 529s, paying for cars with cash, paying off our house and renovating our houses with cash. In certain circles, that information has spread like wallet fire, but in a negative way. Like I said, we're not going out of our way to brag about these things, but we start to see a trend of folks backing out of our lives. We get the comments like, Oh, you all are hanging around rich folks now, or we're in different circles and so forth.
We're just trying to figure out how do we deal with that. I know it's not a terribly bad problem to have, but still, we're just waiting for the change. Yeah, it can be a devastating problem to I have. The two words coming to my mind are the title of Mel Robin's new book. My thought is, let them. Just let them. If people don't want to be your friend anymore because you're successful, then I would suggest they may not have been your friend in the first place. The depth of the relationship that you assumed was there or that you had invested on your side was not there to begin with. Because over the last few years, obviously working for Dave, he takes care of us really well. My life's changed. For my deepest closest relationships that I've had for years, it's just made them deeper. They make fun of me more. They make jokes, and they always laugh when the tab comes, and they're like, I'm not paying that.
You're paying that.
But it's all in support and care and love.
How old are you guys? 41.
How old are your kids? They're still in elementary school. Okay. I'm wondering if two things are happening and you're looking at one side of the equation. The other side of the equation is it's very, very normal. You guys are like me and my wife. You all are late parents. You all are older parents with young kids. You find yourself at elementary school functions with a bunch of 20-year-old parents, maybe 30-year-old parents, and you all are just in different life stages. Those same friends you realize, Oh, you're one of those weird Little League parents, or you're like a Cub Scout dad, and you might be like a We go fishing dad. There's a natural separation that happens when your kids are this age. That happens whether you have money or not. It's just normal. It just happens. I think the bigger challenge for you guys is to not dump this all on the fact that you all pay for stuff with cash and more recognize it as just a life stage, just a developmental transitional stage, and It's like when my grandparents on both sides, they were told, Hey, smoking is a good way to help you relieve stress.
Then they were like, Oh, yeah, and it kills you. They all had to quit smoking. I think, similarly, you guys have to decide we have to do something different to stay healthy. That means we have to be obnoxiously intentional about having friends, making new friends, and going from there. I don't know another objective way around this problem because you can't be lonely. Because I just know the data on loneliness is, it's just a decision to die early and miserably, right?
That's all great advice. Like you had said, we have heard that quite a bit. Hey, we're not catching this bill. We know you guys have money, so we're just going to let you take the bill. That's funny at first, but when it's three, four, five times in a row, it gets a little older.
Hey, let me qualify what I said. I remember the first time that happened, the second time I went out with some friends. They've been my friends for 30 years. I picked up the tab, and one of my friends turned and looked at me and said, You will never do that again. I'm your friend before this, and I'll be your friend after this. He's somebody who speaks wisdom in a mile. He's a goof, but he's awesome. But that was a good like, Hey, we don't love you for this. They're not your friends then, right? You're their coupon book. Here's the two things I found. Go first and be weird. What I mean by that is, don't wait for somebody to invite you all because it's not happen. You all do the inviting, have somebody over to your house, and be weird, meaning just go ask them. Hey, I'm going for a run. You want to come with me? I'm going to work out. You want to come with me? I got to build something in my backyard. You want to help me build it? You're going to get no, no, no, no. Sure, I'll call Then there you go.
But I don't know another way around it. George, how do you make friends?
You're asking the wrong guy, John. I'm asking the wrong guy. John won't even be friends with me.
George has an app for that, I guess, somewhere.
No, I've been thinking about this, Brandon, because I'm in a similar phase. I'm just very gun-hoe on the baby steps have been for a long time. What I found is over time, there's a natural shedding of old relationships that just don't serve you. It's not a selfish thing. If they've got to add value to my life, you just find that I communicate with them less, they talk to me less, and I'm learning to have new relationships. And so part of what you're experiencing is this idea that your friends have poisoned the well by choosing to believe that the way you live your life is a judgment against them. It's a personal attack that you say for your kid's college while they can't or I won't. That's the part you need to drop and go, All right, that's not on me. You sound like a real nice guy, not a braggadocious type. I don't know, maybe I'm wrong. But that's the hard part, is for you to just swallow that pill and go, No, that's on them. That's the poison they're choosing to drink, and I It's not no part in it.
Now, George, I think you hit the nail on the head there, and that's some of the comments that we've heard, nonchalant off comments at social events. It's like that. It's like what we're doing is strange and out of character for them. But we've been living this way for 15 plus years. Here's the deal. It's not like we became this way overnight.
Yeah, but here's the thing. It is strange and it is weird. It's insane that I just said that, that it is strange and weird to live on less than you make.
You've lived intentionally for a long time. That's rare.
But here's the thing. Your friend should love you in spite of and because of your weird and strange things. That's what makes you all, you all, right? None of my friends... I can't think of any of my older friends that live the Ramsey principles. I get an open. They mock me, we'll laugh at each other, we'll poke and prod. I got one guy that has never owed anybody money ever, and he's like, Yeah, I didn't need a program to tell me. That's my friendships, but they love me in spite of it. Same with my weird music choices. Same with the fact that I like to sneak away and go to punk rock shows at 10:00 at night. They love me in spite of and because of my idiosyncrasies. This is deeper than the baby steps. This is, like George said, people who are choosing to see the way you guys live your life as some indictment on the way they're doing it. That just is them, unfortunately, opting out of relationship with you. That's a bum deal, man. But by the way, this would be happening if you did or did not do too much travel sports, or if you did or did not do too much cub scouting.
This is just that season for you all.
The comparison game is real in adulthood. It just is. So I love John's idea of who do you admire? When you You guys go home and you're talking to your wife, who are the people? Man, they seem really... We should get lunch. Invite them over. Yeah. Then be weird and send the text, make the phone call, and then you're going to develop new relationships over time. It's still going to be weird and awkward.
It's always going to be weird. And go anyway.
Thanks so much for the call. Great conversation, Brandon. More of your calls coming up. 888-825-5225. This is The Ramsey Show. Hey, guys, this is Jade Warshaw. Listen, I get it. The student loan situation is bananas, but it's time to make progress, not excuses. So if your payment and interest rate have you treading water, refinancing could be the solution for you. Look, if I were in your shoes, I would contact Laurel Road today and get a free 30-minute consultation. You'll work with a student loan expert, and you'll go over your refinancing options. Hey, for refinancing to make sense, you've got to check certain boxes, like making a good income. And bottom line, Ramsey's advice is that you only refinance if you can get a lower rate or for a shorter term. Remember, the point is to pay off debt faster. Maybe you just need to keep rocking the debt snowball. But if refinancing does make sense for you, Laurel Road offers low competitive rates and interest rate discounts are available for stuff like auto pay. Listen, you can't mess around with student loans. If you want them gone, you got to go hard. So go to laurelroad.
Com/ramsey to find out more and schedule your free 30-minute consultation. That's laurelroad. Com/ramsey. Laurel Road is brand of Key Bank National Association. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Open phones at 888-825-5225. Jennifer is up next in Boston, Massachusetts What's going on, Jennifer?
Hi. I'm calling because the question is mostly related to my house as I look like I'm going to need to be selling it because I got myself into a bit of a jam. For context, I got divorced this year after last year, I discovered my husband was engaging with women online for most of our 15-year marriage and spending thousands and thousands every month and had later gotten into game stop things like with the stock market and gambling. It was a huge shock to everyone, especially me. We did end up getting divorced in October. Over the past I'm disabled anyway. I was on disability SSDI for a long time. I started working during COVID and was able to get back to a really good job that I loved. But over the past year, I've had to exhaust my leave time and ended up leaving completely because I had gotten sick so frequently. Right now, I'm without a job and have three little kids, and I do have this house which I got the divorce. But I'm looking for next steps and what I should do because I didn't accumulate a lot because of my situation. It's just a tricky spot to be in.
Yeah, it's heartbreaking. What a mess. What's the nature of your disability?
Shortly after I got married, I got a really bad virus, and I never really recovered from it. I didn't walk for a couple of years. It slowly went back. It's energy limiting. It was like long COVID, before long COVID, M-E-C-F-F.
Was the stress of finding all of this stuff out and realizing that the man you'd been married to for 15 years wasn't who he said he was? I mean, that's just so disorienting, but almost more disorienting than finding out somebody who's not who they said they were is you lose trust in yourself, right?
Oh, absolutely. It was like a complete denial. How did I not know?
How did I not know? That's right. Not only do you have this person that he didn't stab you in the back, he stabbed you in the face, right? He stabbed you in the front. But then also it's hard to even look at yourself in the mirror. Did that exacerbate your what would ultimately be some chronic fatigue? I mean, did that make it worse over the past year?
Oh, absolutely. Not only did it exacerbate my chronic conditions, but I got shingles, I got COVID twice, I got food me multiple times. You mean? My immune system's just BS.
Here's why I asked that, because there's not an easy path forward. But my hope would be that when the acuteness of the stress, when the pain from this burn that you feel is lessened, will your body go back to a place where you can work? What you said was a really great job that provided for you guys? Because here's the thing, it doesn't sound like anybody's coming to rescue you.
No. My doctor, it was hard because even when I was working from home, every week was a win. Sure. He knew that. I think he took advantage of that because every week was a win. I did it. I wanted to have that self-identity because I felt like my career was done. I worked really hard every week just to survive. At the expense of, honestly, spending time with my kids and living more of a life because I wanted that career. Sure.
Now, you have to have it.
That's a different- That's a hard thing because my doctor just agrees. He's like, he needs to take care of you. You do?
But you all need groceries. Are you getting alimony?
No alimony, but child support. Then he did only a promissory note from what he had spent. He had agreed to sign for that some of he had spent. But I haven't really seen consistent payment on that, and I don't know if I will.
You won't. Have you filed for SSI yet?
Because I had gotten that before, I'd been on the phone, but Actually, this week, I was on a phone with Social Security for three hours on hold in that process.
Okay. You may need to bite the bullet and get an SSI attorney that will walk that with you. They can be worth their weight in gold. They can help you navigate that process. Yes. There may be some local resources. Do you have any family help with mom, dad, sister, brother, cousins?
Yeah. My parents, because there was also construction happening, we had a flood in the house and had to leave. There was construction happening at the house, and that went over budget. My ex was supposed to pay half of that, but he didn't, so my parents had to loan me money for that. I really do need to sell so I can pay them back because they're older, and I don't want to have to have that burden on me as well.
Well, there is that, but I'm talking more long term, because if you sell your house just to pay off a debt, that's fine. But where are you with three or four kids? Where are you all going to live?
I'm hoping in a house where I don't have a mortgage.
Yeah, there's no such thing as that.
What's your mortgage right now?
It's 2,200.
Okay. You've got zero money coming in?
Right now, other than child support, correct.
How much is child support?
I get 5,85 a week.
Okay.
That's barely enough to cover the mortgage.
Much less food, clothes, everything. Is there a possibility that you sit down with your parents and say, We need to sell the house. I need to move in with you guys? Here's the thing.
You don't have any options.
I know, but they sell the condo and move in with you? You have to get drastic because I don't feel like you're grasping the gravity of the situation. You got four kids. You don't have enough money. Three kids.
I'm grasping the gravity. That's why I'm calling.
It's going to be getting radical. It's going to be doing things that are uncomfortable. You're picking from a series of uncomfortable choices.
Yeah.
Selling the house might be the move. I want it to be a last-ditch effort when you've exhausted all other options because I assume to rent in your area to get a house that will fit your kids is going to be more than 2,200.
Absolutely.
I don't know what part of Boston you're in, but that's where I'm from, and it ain't cheap.
Yeah.
Or do we have to move? Do we have to move to Kansas, where it's cheaper to live, and I can work remote there. I think your doctor's right. I mean, I would agree with him 100%. You got to take care of you. But that works in a context when you have somebody that can help with the bills and with the food and with the light bill. You don't have that right now.
Yeah.
It's a matter of calling a sister and saying, Hey, would you move in with us for a year? Or, I need to sell this house because we're broke. Could I move my three kids in there? I know that's awful and awkward and whatever. I'm going to get back on my feet. Or, Mom and dad, I know this wasn't in your retirement plan, but would you be interested in moving in with us? We'll put one of the kids in a room. I'll give you all the master, and I'll move into one of the other bedrooms, but we're going to figure something out. I think you're at that level of, I've got to solve these problems here. I hate, hate, hate, hate, hate that you're in this situation.
Thank you. Yeah, it's very stressful. I know it's like a vicious cycle there. I'm just not a lot of options. There's not a lot of options.
But here's the other thing. If you don't remember anything else from this phone call, remember that George and I believe in you. Thank you. Because we've taken call after call from people who are like, All right, we got to figure this out, and then somehow, someway, they do. They scratch and they claw and they do. I think you've got strength and power inside of you that has been squashed and stomped on. Again, you don't know this, but we do from the outside. You've lived with somebody for 15 years that has been a liar, has been dishonest. There's an electricity that's been in your home of deception, dishonesty, and a lack of integrity for a decade and a half. I know this sounds bonkers, but my guess is, even though you have this loss and you have this heartbreak, you're going to have peace in your home that you haven't had in ages.
I agree.
I think your body is going to respond to that. That's my hope. Keep listening to your doctor. It takes the the right steps, but it sounds like you're at a place you got to get radical.
We're going to hook you up with Financial Peace University and Every Dollar, Jennifer. That's going to give you the information you need, the motivation, the budgeting tool, so that this week you can look at what are my bills, what is the income, and can I get through without going into debt. This is survival mode, and we hope that one day soon you'll be thriving. Thanks for the call. This is The Ramsey Show.
This show is sponsored by Better Health. Hey, folks, we all have stories. The family and cultural stories that we were born into, the stories of the things that have happened to us, both good and bad, and the stories that we constantly tell ourselves. While we can't go back and change any of our old stories, the world is waiting to see what you and I are going to write next. As we enter 2025, I want to encourage you to examine your old stories and be intentional about the new ones you're writing. I'm not talking about goals that are going to be long gone by February. I'm talking about writing new stories that will change your life forever for the better. If you're like me, therapy can be a great place to explore the old stories, even heal from them, and begin to write new ones. If you're thinking about starting therapy, I want you to consider my friends at Betterhelp. Betterhelp is 100% online therapy, and you can talk with a licensed therapist when it works for your schedule. You just fill out a short online survey to get matched with the licensed therapist, and you can switch therapists at any time for no extra cost.
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Welcome back to the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Every day, we take calls on the Ramsey Show, but we don't always know what happens after we hang up. Did they take our advice? I know a lot of you are wondering, and so we wanted to stop you from wondering. We have a new show called 90-day money makeover that lets us find out what happens next. The good news is the first episode is now available on YouTube. In episode one, we follow single mom Heather, who's drowning in debt and stress following her divorce. Not only that, but she's trying to keep up with the family farm, including horses, chickens, and more. It consumes almost all of her time and money. The question is, is she willing to sell 30 chickens a calf, maybe even the horse?
Hey, dude, this lady is incredible. It's incredible. I got to watch this. I went out to her farm. It's amazing.
It's amazing. You got to check this out. Heather, she's got to consider major lifestyle changes. Jade's out there walking alongside her through these decisions and sacrifices that she never imagined making. If you want to see just how far she's willing to go to change her life and her finances for good, go check out 90 Day Money Makeover. It's now available on YouTube, on our YouTube channel, or click the link in the show notes. It'll take you right there. Very exciting. It's an awesome concept. We never get to interface with the people.
Here's what I think it is. I think it's cool to the people who wonder, is this for real? It's cool to give somebody seven minutes of whatever, of our opinion on something. It's cool that we're always up here saying, You should use every dollar, and you should go through financial piece. But if you're a critically thinking person, you have to ask, Is this for real? It can't possibly be this easy.
Are they really going to do all this? Is it going to change their lives? This is actually work.
It's like a bluff call. Money where your mouth is. We're going to follow this person for 90 days and see what happens. But they got to do it every day, and they do video journals, and they walk through the site. It's amazing.
It's so good. The production quality, our team did this all in-house, and it is next level. So go check it out. 90 Day Money Makeover. All right, Phoebe's up next in San Diego. How can we help Phoebe? Hi.
Great to talk to you guys. You as well. I have a question about… I just got engaged. Euh.
Is the person good?
He's amazing.
Okay, good. I take that. Well done.
I own a business. I've been open for two and a half years. It's a little facial spa. He is a musician, so he's self-employed as well. I'm wondering, because my business is basically me, I don't have any income that goes into my personal account apart from my rent being withdrawn. I'm wondering, how should we combine our finances? How much should I pay myself for when we have a joint account? Then also, this is like a two-part question, he's in debt He has 25,000 student loans, and he doesn't really think it's important to pay those, all that money.
You should marry him.
And then pay them off?
No, I'm just playing. No, I mean, you should still marry him, but I was just being a smart colleague.
He is on that, pay them slowly, auto-pay thing, whereas I think I'm not in any debt, and I love not being in debt. I want to get on the same page with that, and I don't really know how. Then one more question. We don't live together yet, and when we get married and Basically, I'm just wondering, San Diego is very expensive and we want to buy one day, and we were thinking of looking out of state to buy something that would be cheaper as an investment property and what your thoughts are on that. Then if renting is wasting money in the first few, I guess, years of our marriage.
Are you new to our gang, Phoebe?
Fairly. I know that you're saying know about buying out of state, but maybe there's an exception because San Diego is so expensive.
There's the Phoebe rule. The Phoebe rule. Statute 54. No. Correct.
Well, hey, welcome to our gang, and we will ship you an honorary gallon of the Ramsey Kool-Aid. We won't, but that'd be cool if we did that.
All right.
Let's try to address these. Welcome to our club.
Yeah, let's walk through. Lock on on here. Combining income, it doesn't sound like you're paying yourself a salary right now. How are you eating? How are you paying for other bills outside of rent?
I don't have that many bills. Right now, my lifestyle is quite low because my rent is very cheap.
Hey, hold on. You're doing something that I think is dangerous. Do you have a separate business That's what you buy, an account that all of your business money goes into?
Yes.
Okay. That money just stays in there, and that's what you buy, facial stuff with tools. That's what I buy.
Everything for my business, I buy that. Then I have money in a different Wells Fargo account that I buy my own life stuff.
It's your personal account.
How does money get from one to another? Do you just go to the business account whenever you need to get some groceries or something?
I have about Well, 10,000 in my Wells Fargo that I've just been using. I've just been using that money for personal, but it's because I sold something, so I have that money. Okay.
What would be a reasonable How would you generate to pay yourself out of this business? Every month, let's say, here's your take home pay for the month, what would you transfer over to your personal checking?
Maybe half of what I make.
No, give me a number.
Is it $5,000 a month?
Yeah, that sounds good.
That would mean you're making $60,000 a year. Then California is taking 90%... I'm just kidding. But they're taking a big chunk of it. Then Washington takes a chunk of... If you don't know what you're actually making, and you either, A, live out of this account, which a lot of small businesses do, and it's dangerous. If you don't know what you're making, then you don't know if you're running a hobby or an actual successful business. Coming up with some number, some draw that you're going to pay yourself. Then, as George is going to walk you through, then it sets the stage for, Can I afford this car? Can I afford this apartment or this house? Because you know how much money your business is making, and then you know how much money your business is paying you.
Then we can make a plan to get out of debt, get an emergency fund, save for a down payment. Otherwise, it's just, I don't know, let's see how much we can pull out of the business this month. We need to have something a little more stable. Then as When we actually get married and combine finances, now it becomes, Okay, what is his stable income? What's his irregular income? What can we plan on? Then where is that money going to go? That's where the baby steps come in. Your next question was, how do we get on the same page? Because he's clearly in a different world right now when it comes to finances. That's where a financial piece, University, is one of the best tools, and I will gift it to you guys as premarital counseling if you think he'll go through it with you.
Oh, yeah. That's something that I've been wanting to do, and he said that he would. That would be amazing.
Because I think he's a great guy. I think he He's a bass player. He doesn't know. You don't know what you don't know. Yeah, he didn't have financial literacy. Yeah, what does he play, by the way? I think that's important.
He's a multi-instrumentalist. Oh, dang.
So he's not great at anything. That's what I heard. No, I'm just kidding.
No, he's actually very great at all of them. He sounds like a savant. How much money does he make a year? Probably about 40. Okay.
George is right. Watching those things, those videos together, and I think not talking about, Hey, it's a really big deal. I get out of debt. I think the conversation for him is, Hey, as we build our marriage, I want us to be free. I want our new marriage to have peace, and I want you to be able to do your art, and I want me to be able to take care of my people. If artists and artisans owe money, they can never fully go to the full ends of the expression of their art because they always have to pay somebody. It's really talking to your musician about freedom.
We need to figure out if this is a hobby because 40 grand in San Diego, we're not talking real estate mogul buying investment property. We're talking like, maybe I get to eat this week. We need to look at what does a career look like. We both have savings, a good amount of savings.
Yeah, but those go away so fast. They go away so fast in your newlyweds. Just trust two people who have been married. They go away so fast.
Okay. So your last question, is it a waste of money to rent? No. Renting is buying patience. It shows wisdom and maturity. Until you guys are out of debt with a fully-funded emergency fund and then a down payment where you can actually afford the mortgage, we're talking 25% of take-home pay, I would not buy property locally, and I definitely would not buy it outside of the state. If you guys want to move outside of San Diego and you start a facial business out there for a lower cost of living, go for it.
But the high cost of living in San Diego doesn't give you a pass on the rules of math. Math doesn't care how you feel. Path just is.
So thanks for the call, Phoebe. We appreciate it. Hang on the line. Kelly's going to pick up. We'll get you Financial Peace University. Wishing you guys the best. That puts this hour of The Ramsey Show in the Books. The Ramsey Show annual survey is Live. So text, survey to 33-789, or go to ramsey solutions. Com/survey, and be entered to win a $500 gift card. That's, survey to 33-789. Live from the Ramsey Network, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by the host of the Dr. John Deloney Show, Dr. John Deloney. We're here to help Taking your calls at 888-825-5225. If you want to talk life, money, mental health, relationships, you name it, we are here for you. Ted is going to kick us off in San Francisco. What's going on, Ted?
Hey, guys. Happy New Year.
What up? Happy New Year, man.
What's going on? I have three financial advice questions I need from you guys, so let me give you the background about my history, where I'm at. Right now, my wife and I make pretty good money in San Francisco. Our Combined income is $450,000.
Awesome. That's basic minimum wage in San Francisco, right?
Pretty much. We have a two-year-old, and we have another one coming in May this year. We have zero debt, zero car payments. We locked in 2.5 interest at a condo about four years ago. We're saving a lot. We're maxing our 401k. We have an emergency fund, we're putting money into education funds. We finally have enough money saved up to buy a home, and we want to move to Southern California just because we have family, friends there, we don't have anyone here. We want to be close to family, get some help. But with the current... My first question, with the current interest mortgage rate and how expensive housing are, what's your advice or your thoughts on reducing our savings a little bit, like our 401k, our normal savings, entrain an expensive 8,000 to 9,000 mortgage, which basically goes from 20% of our income to 50% of our income.
That's a lot of your income going toward a mortgage.
I would never do that.
It is, yeah. What does it take to get to that 25% parameter with the mortgage? Would that mean pausing investing and waiting two years and stacking up cash?
Well, I mean, we could go for a smaller home, but with two kids, one kid now, one coming, we were wanting a floor bedroom place, at least for the that's in our future. Everything in telecounseling is really expensive. We could maybe go cheaper and then renovate down the line. But we were just looking for something that's moving ready because with the kid, we didn't want to renovate, and we didn't want to do anything in terms of building a home.
You're in a condo now with how many bedrooms?
It's a small two bedroom condo. Okay.
Well, for the first six months, the baby is going to be in your room, probably, right?
Yeah.
We're probably going to be here for maybe up to a year. We're talking like 2026 for a home purchase would be ideal?
I think so. Either end of this year or sometime in early 2026.
Okay. If you paused investing, how much extra money could you stack up? If you guys just got real focused on a budget, cut the lifestyle down, how much could you save that $450 take home?
Right now, our all-in expenses is we need about 7,000 a month to survive. We're taking almost roughly about $22,000. That's after putting in $ 401,000. Awesome.
You have $15,000 to play with if you didn't pause investing? Yeah, Exactly. How much do you have saved currently for the house?
$400,000.
Awesome. You would add another 180,000 over the next year if you didn't make any changes?
Correct. If you did- Did you sell your condo? How much you get for your condo?
750,000.
Okay. What do you owe?
Roughly about 520,000. Okay.
You got about 200 equity?
Yeah, about almost 250,000 in equity.
Okay. So let's call it 200 plus your 400 saved, that's 600. Let's say you save up another 200 over the next year. Now we're talking 800 grand as a down payment for the next house. Would that get you closer to that 25%? Mark?
Oh, I see. Well, the thing is, I guess here's another question. Since we locked in such a good way, we were just not talking about Ted.
No, no, no, no, no, don't be that guy.
Don't get greedy on us, Ted. Now you want to hang on to the condo, use it as a rental while adding stress to life as a long-distance landlord.
That's what happens. While also taking out a mortgage with two young kids that is 50% right when Sam Altman keeps tweeting out that he's changing everything in Silicon Valley by the minute. Why would you do that to yourself? Here's what I want you guys to consider, probably something most families in America have never considered. I want you and your wife to imagine over the dinner table, what if we solved for peace? Not for maximum comfort, not for best ROI and not for we got a good interest rate so we can keep... What would peace look like in our house for the next five years where we have two toddlers, two kids under two? What would our life look like if we solve for a peace? And by the way, that would mean you guys buying a $2 million house. It's not like, Oh, man. You get what I'm saying? If you'll solve for a piece, that way, if she says after a kid want, I don't want to go back to work. Or you have this conscious awakening. You're like, I want to be a stay-at-home dad. Whatever. You all can. You can do whatever you want.
If you owe 50% of your money, I promise you you will regret that decision. I promise you, I promise you, I promise you.
Yeah. Okay, thanks. That's where our hesitation was coming from. We just wanted to see if that was even a possibility because we are getting cramped in here. Okay, thanks. That's good advice.
How does that sound? Is that deflating? Do we just bum you It's controversial in the financial world, especially Silicon Valley.
Bro, that would be a great investment property. It's two and a half %. You're basically robbing the bank here. Why would you? We're going, your life is more than just a set of numbers. You got a family you're trying to take care of. You got a life to live, and I don't want you spending it worrying about a property that's hundreds of miles away.
Okay.
All we're telling you is what we would do in our own house.
It's what I have done. We sold our house. We didn't hang on to it. We could have. We said, We're going to sell it because we want peace. We want to get to total debt freedom faster. Now we don't have a payment in the world. When my wife wanted to stay at home with our baby, it wasn't even a financial conversation. It was just an emotional one of you're leaving your career. That's what I would love for you guys to have.
Freedom, flexibility. Or if suddenly podcasting ended tomorrow, it wouldn't be destitution. It'd be like, Oh, this sucks. We got to figure out something else to do. George would start mowing lawns or something. He wouldn't. He absolutely would not mow lawns. But Do you hear what we're saying? I know it's super controversial to solve for peace and to live on less than you make.
Did you have another question?
Yeah, what was the other question, brother? I did, yeah.
If we're currently that 400,000 adjusted in high-yield savings. Just looking for a bias between leaving it in high yield savings or investing in money market funds.
I think high yield savings would have equal, if not better rates right now. I don't think it's worth switching to the money market or even putting it in a CD because you're talking about a of your timeline, that's just too short to be messing with things that lock up your money or invest your money. A money market acts like a savings account. There's not many more benefits other than sometimes you get to write checks out of it or you get a debit card attached to it. I would just leave it with a high yield savings account.
Okay. Ted, can I give you one more piece of advice? It's dark, tinged advice. Is that okay?
Yeah, please.
I would not make any big major just moves, job decisions or anything until your second child is born and healthy and you'll know the road ahead. Too many people that I've talked to over the years make major decisions when pregnant, and life just happens, man. Pregnancies are tough. There's so much that can be different than we thought it was going to be. Let this thing play out. Baby be born healthy, you and mom are rocking and rolling, and then start making new decisions, and let that cash just pile itself up. Thanks for the call, man.
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Here's my New Year's hot take. Skip the resolutions this year. Look, we start every January with the best of intentions. We break out a fresh journal and fill it with a million goals we're totally going to accomplish. And Gen Z would say, You're doing the most. So what if we just pick one realistic, achievable goal? And here's a really wild idea. That one goal could be to get on a budget. Every dollar is my favorite budgeting app. It helps you make a plan for your money and makes it easy to track spending on the go. Think of your budget as a launching point that helps you set goals in all areas of life. So this year, instead of doing the most, just do less and start the new year with an easy win. Head over to the App Store and download every dollar for free. That's right, free. My favorite price. For free tools and resources to help you reach your home goals, go to ramseysolutions. Com/realestate. Com or click the link in the show notes. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Hey, it's a new year.
If you're ready to get your finances in order once and for all in 2025, you've got to join us. January 23rd, we're doing a free livestream called Take Control of Your Money. It's hosted by Dave Ramsey and Jade Warshaw. You're going to learn how to stop living paycheck to paycheck, free up more breathing room with your finances so you can pay off debt fast, finally get ahead. Plus, Rachel Cruz and I will join at the tail end for a Q&A where you can ask your money questions live. When you sign up for the free livestream, you'll be entered to win our cash giveaway, and five people win $4,000 each. Sign up for the free livestream by going to ramseysolutions. Com/liivest. Com/liivest. Com. Stream or click the link in the description if you're listening on podcast or YouTube. Need I remind you, it is free. You've got nothing to lose. Ramseysolutions. Com/livestream. Casey is in Green Bay up next. What's going on, Casey?
Hi, how are you guys?
Doing well. How can we help?
My husband and I are trying to contemplate of him taking a new job. However, it would be a very temporary pay cut, and then there would be some changes to my career as well.
In a good way?
I hope so. A little background. My husband has been a firefighter paramedic at his current position for the last nine years, making anywhere between 81 and 86 a year. I myself am an ER nurse and make about the same. The offer has come down the table for his dream job at a different department elsewhere in the state that's actually a little bit closer to our family. However, the training period is about five and a half months. He would start out at around 62,000 for that five months. We've contemplated myself staying home from work to take care of our two kids during that training period. We just want to see if our finances he can handle it.
When he gets out of training, what is this how we're going to go to?
It's a stepwise process. After that initial training, it will bump up around 75,000. Then after a total of 42 months, he'll be making 97,000 a year. It would actually be more than what we're at right now.
We're talking a few years down the line. Correct. Okay. In the grand scheme of life, let's call it a wash, but it's where you guys want to go. You're closer to family. Is it cost of living the same?
It's a little bit more expensive, fax by our family. However, we're trying to purchase a family property through an informal probate. We have a property in mind that we're trying to- Would you guys immediately live on the property? Is there structure on it? There is structure on it, yes. It does need some upgrading and things like that. The other caveat to that, I guess, is that we wouldn't move until after the training period just because That's very wise. That way we can save on childcare and things like that.
It gave me some pause. When you're saying we're going from making 160 to 60, and we want to buy property and renovate and, and, and. I'm like, now I can't breathe a little bit. I think we can't have the cake and eat it, too. What can we do to take this job? I'm all for this. It sounds like it's where he wants to be longer term. You're closer to family. Eventually, the pay will get up there. He sounds like he's a hard working man. He's willing to take on a side job if he needs to in the meantime. On on top of the training. The question is, can you financially stay home, get your income down to 60 grand, and still make ends meet? I don't know. Correct. What is your monthly expenses?
Our mortgage is 600 a month, and then we did go through a financial piece, University, and the first few baby steps, so all the debt that we have is just a house.
Good. You have a fully funded emergency fund?
Yes.
Wow. How much is in there?
We have about $55,000 in our savings.
Awesome. Okay. The good news is you guys are in a great spot that this move won't be as stressful. I do like the idea of pausing to make the move until after training. What does that mean for him traveling?
He would probably stay with his parents because the commute then would be much closer than it would be in our current home. That's why we're contemplating me staying home with the two kids, so he's not driving three hours one way every single day.
But you wouldn't see him for six months or what?
He would come home on weekends.
Okay. I did that for six months, transitioning jobs. When my wife stayed, she was finishing up her research. We've done that.
Now, it's before FaceTime.
Yeah, we just had to drive and see each other. It wasn't great, but we made it work. I don't think that's super undoable if you all plan it going in and you all have some preintentional things about keeping your marriage squared up. I think, George, the variable here to me sounds like I would wait at least a year, probably two, maybe three, before I quit my ER nurse job because it sounds like that's a significant chunk of your income. I would wait until the smoke cleared, and that probably means you getting a job in this new town, too. I know that's not what you want to hear, but man, that's cutting $100,000 out of our annual budget to move to a more expensive place.
That sounds scary. My plan would be to... I've been applying for some remote positions just for during this training period, but I would plan to go back to work after the training period. If we could get some help from our family and stuff like that, I would absolutely go back to work.
Oh, you're talking about just quitting your job for six months?
Yes. Would it make sense then to just do childcare for six months?
Childcare is quite expensive where we're at.
Is it $100,000? No. You know what I mean? If you're making $86,000, I doubt it's…
I think your take home pay is still going to be much higher than what your daycare would cost you.
Okay.
If you're bringing home 6 grand a month and daycare costs three, you're still in the black here. I would crunch those numbers. I'd sit down with your husband. I would do a fake every dollar budget and go, Okay, here's what life looks like if we drop your income. Here's another budget Here's what it looks like if we go down to just you in training, and then here's what our budget looks like later on. That'll give you some peace and facts instead of just, Here's how I'm feeling about it. That's what I would do if I was in your shoes with my wife.
Here's an important thing. When people are trying to make decisions like you are, you've got a cool opportunity that George and I both agree it's right on. You don't want to be by family. It's a temporary pay cut. It's the job your husband really wants and the department he really, really wants. Everything's good, right? But it's just going to be some steps to get there. I think where a lot of us get paralyzed is we don't want there to be any pain, any hard decision, any uncomfortable consequence as we make this transition. If you just go in knowing that's impossible, there's going to be one, two, or three things that we have to do for a season that we don't like. Then it's a matter of saying, Okay, it was just choosing your heart. Which crummy thing do we want? Do we want to just put our kids in childcare or hire a nanny for six months. It's expensive, it's annoying, but it is going to be what it is to get us where we want to be five years from now or three years from now. Or do we want to... You get a remote bike.
It's just knowing upfront, there's going to be some crumminess to this. You're going to have to move in with your mom. Ha, ha, ha. Then we're going to go from there. Putting those things on the table, for some reason, makes them easier to stomach. It's when we're trying to do it all without Are you making uncomfortable at all that we end up paralyzing yourselves? You know what I'm saying? Yes.
You guys would be selling your current home and buying a property over there? Correct. Or are you going to do the structure on the family property? Because what does this family property cost?
We are still trying to work that out with my family beneficiaries, but when it was last- Oh, boy.
That doesn't sound good.
When it was last appraised, it was around 268,000.
Okay. What's your current house worth?
Around $300,000.
Okay, good. I'm trying to make sure your mortgage doesn't triple when you make this move, and it's all of a sudden, whew. The other piece of this to be thinking about is, do you guys need to rent while you renovate the structure?
No. It's very It's livable. It's more so some cosmetic things than maybe adding on a garage.
Excellent. That's stuff you can do down the road. So very, very cool.
Thanks for the call.
It's an exciting life.
It's a lot of change at once. John, there's so much more when you look at just, Can we do this financially? There's so much more under the surface when you talk about family and relationships and career and moving to kids. It just takes your breath away to think about a change that big.
There's two things that paralyze us. One is we don't want to have any discomfort If you just get that out of the way, there's going to be some stuff that we have to do that we don't like. The second big one is very few things other than having kids, and I would suggest getting married, that you can't undo. If you move down there, this is a disaster. It stinks. She's an ER nurse. She'll have a job tomorrow. Anywhere. He can go get another job as an EMT. We're going to do the next right thing in front of us, not over-dramatize. What's going to happen in 10 years? Nobody knows. We're going to do the next the right thing.
Beautifully said. This is The Ramsey Show. Okay, here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with. People are unknowingly putting money into tech giants and household brands that don't match up with their core values. But here's good news. Timothy Plan is at the forefront of biblically responsible investing. That means Timothée Plan uses a strategy that lets investors chase competitive returns while staying rock solid in their beliefs. So if you're ready to invest with a clean conscience, it's time to check out Timothy Plan. Request information at timothyplan. Com to learn more or contact your financial advisor today to see if Timothy Plan is right for you. Timothyplan. Com. Investing includes risk, including possible loss of principle. Before investing, carefully consider a fund's investment objective, risk, charges, and expenses contained in the prospectus or summary prospectus available at timothyplan. Com. Read carefully before investing, mutual funds distributed distributed by Timothy Partners, LTD, and ETFs distributed by Foresight Fund Services, LLC. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.
Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? If you're ready to take the next steps toward your home goals, go to ramseysolutions. Com/realestate. That's ramseysolutions. Com/realestate. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. We got to kick off the air with a little pep on our step. To do that, we have a very special couple on the debt-free stage. Steve and Katie are with us. How are you guys doing? Great. Where are you guys from? Peoria, Illinois. Wonderful. All the way here to do a debt-free scream. How much did you pay off? $214,000. How long did that take? Eight months. Okay, there's a story here. What was your range of income during that time? We started at 331,000 and finished this year at 391.
What do you do for a living?
I'm in sales.
And I stay at home with the kids. Excellent.
That's beautiful. We love to see that. You're clearly very good at sales. Okay, so let's talk about this. What type of debt was the It was our home. Okay. We're looking at weird people, John. This is wild. You guys aren't old enough to have a paid-for home. Well, thank you. Oh, my goodness. Okay, so we got to go back a long eight months ago You guys had this mortgage sitting around and you decided, Let's knock this out. What happened? What got you on this journey? Well, it actually started for us 15 years ago.
We were buried in debt, had a good friend of mine who reached out to us and sent a copy of the Total Money makeover.
Katie read it right away. She became davish, and I was so hopeless at the time.
I put the book in the closet, didn't touch it for two years.
Two years later, I started to read the book, and it was the first time that I actually had hope that we could get out of debt and get on track.
We started budgeting and put a plan together.
Thanks be to God, he is so generous and so faithful that as we started managing money the way that he wanted, it seemed like he just blessed us with more money to manage.
Fast forward to last year, our oldest is 17, and we started talking about, could we have the house paid off before she went off to college? We just started talking about that.
For me, a little over a year ago, I had, through prayer and promptings from the Holy spirit, started to feel like this mortgage is such a weight on our shoulders. Why are we not just getting rid of this? There had been a couple of opportunities for us to give, and I wanted to give more, and we just didn't have that ability. I had this whisper in my heart from God just saying, If you didn't have that mortgage, you could have given more. I started crunching some numbers.
We talked to Steve, we had a couple of meetings together, and I was like, I think we can do If we just really buckle down and get really focused.
We thought we could do it in 12 months.
That's what we thought it would take. God is just so generous.
Once we got started, we got really laser-focused, and we were able to do it in eight instead of twelve. I have to give a lot of credit to our daughters because we did tell them what we were doing. We had a meeting with them at the beginning and said, This is what we're going to do. This is the amount of money.
This is how long we think it's going to take.
They were on board.
They said that they were willing to make the sacrifices, too. I thought if you told your kids no, they spontaneously combust.
Ours are still here. Wow. You got four girls? Yes. How old is the youngest?
Nine.
How did the nine-year-old react? Did they have the biggest reaction? How does this affect me? Or was there none of that? They were like, All right, sounds cool. I'm in. Well, we promised them a vacation at the end of it.
Yeah, we dangled a little carrot.
There we go. We all had some incentive here. Wow. What What is the principle and interest that you've now freed up every single month for the rest of your life? Are we talking a few thousand bucks? Yeah, it was 2,700. Oh, my goodness.
For the rest of your life? Yeah.
That's some good living given like no one else.
That comes on, right? Yes.
Wow. That's an exciting phase. As your first heads off to college, you guys are living a little easier now. You got a spare bedroom and you got some spare money in the budget.
Absolutely.
How does this It's easy to get complacent in your marriage when you're making great money. You're a great team, right? Somebody's staying at home, somebody's out there making money. You got four amazing, beautiful, wonderful daughters. Things are cooking along. This is, in my experience, when couples wake up and their second kid is going to college and they look at each other like, I don't know you. There's something about this moment that you all picked this moment specifically to reengage a hard goal together. What has this meant for your marriage? Doing a hard thing midstream, right? Just to be like, Hey, you want to do something crazy? Let's pay the house off. Tell me about the impact this has had on your marriage.
It's been wonderful. It's really taught us to communicate with each other.
We discuss all of our purchases. We have monthly date nights.
Yeah, I think the communication was key. It's kept us close.
I think it's good to have these goals.
Even going forward, we're going to goals, goals for giving, goals for our children, setting aside money for their college education.
We're really focused on changing our family tree and making sure that they don't go into their 20s with what we went into our 20s with.
There you go. Did friends and family know about this? Are they weirded out? Did it feel like a personal attack that you guys have been so successful at this? Was it awkward to talk about? Well, we actually have some family here today, and we have friends that we've actually brought along on the journey and introduced to financial peace. Katie and I get pretty competitive, and they started paying their homes off. We thought we need to get on board, too. Yeah, it's true friendship right there. Because we took a call earlier, and they were like, Hey, I feel awkward because we're in this phase of life, and you guys have surrounded yourself with people who actually want to see you in, who want to cheer you on and support you.
There's nothing cooler than when you guys as Yoda, you bring in Luke Skywalker, and then they're like, We're going to go ahead and pay our house off and you're like, Oh, crap. We're just getting past. We got to get on it, too, man. Yes. It's amazing.
What's the house worth?
Five hundred thousand.
How much do you guys have in your nest eggs? Well, yeah, we did the calculation right before we came here.
It's a little over 700,000 in investments in cash.
Wow. Baby steps millionaires, just like that. I'm not putting your ages out there. I assume she's still in her 20s. You look like you're at 40 max. Yeah. Am I close? 45. There we go. Here you are, no mortgage payment, the rest of your life ahead of you, just all margin to live and give like no one else. You're taking them on a vacation. You're going to give more. Anything else you're doing to celebrate or upgrade life and have a good time? Well, this weekend, we have an Airbnb in downtown Franklin, which we love downtown Franklin.
It's so cute and quaint.
That's part of our celebration. Treat yourself. We're going to some nice restaurants.
Good. Eat well, Franklin. It's awesome. What would you tell a couple right now that's just coasting? Their marriage is good. They're making fine money. What would you tell them?
I would tell them that once the debt is gone, you just don't realize the weight that is lifted off your shoulders. It's just a great feeling. You don't realize it until it happens. Can I ask, did you guys have a low interest rate on this thing? We did. We did. Two and a quarter. You paid it off anyways? You know how not optimal that is financially? You could have invested in Bitcoin or something. But now it's zero %. There we go. Take that. How's that for your interest rate?
We always tell people, Hey, if you hate it, pay it off and try it, and then go take a heel luck out, and you can have that. Has there been a second you've regreted it? Not one.
No.
I've never one time heard somebody said, I shouldn't have paid that house off. I've never heard that one time. Amazing. You all are absolutely amazing.
You want to get the girls up here? Are they going to be a part of this with you? Let's get them up. What are their names and ages? Adlyn is 17, Eleanor, 9, Sophia is and Vivian, 15. Beautiful. Beautiful family. We've got a couple of every dollar, one year subscriptions to give you guys that you can use. You can pass it on to kickstart someone else's Baby Step Millionaire journey. You guys ready for it? Have they been practicing? We have. All right, here we go. We've got Steve and Katie, Adal and Vivian, Sophia, Eleanor, $214,000 paid off house and everything in eight months, making 331 to 391. Count it down, guys. Let's hear a debt We're dead free. Scream. To God, we give the glory. Three, two, one. We're dead free. It's that simple and it's that hard, John. The simple part is just choosing. Hey, what if we didn't? What would that be like? The hard part is then going, All right, every month, we got to be disciplined. We got to be focused. We got to be intentional because there's a lot riding on this.
We sat down with our kids and said, Here's what we're going to do. Are all in, too. We think you all can handle it. And their kids said, We're in.
It's amazing. No secrets.
Everything is different for that family now.
And more as cough than tot. Those girls will never forget that. They're going to be living and given like no one else, too. So proud of you guys. This is The Ramsey Show.
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Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Derek's up next in Norfolk, Virginia. What's going on, Derek?
Hey, George and Dr. John. Thanks for having me on the show. Sure. I appreciate it.
What's your question?
Getting right to it. Basically, I used to have life insurance through work. It was group term life insurance. But since I started following the baby steps that they blaze out, I wanted to get term life insurance independent of my work. Smart. I went through Xander as my broker, and I got approved for a policy. Actually, I already signed for it, but I'm still within the grace period, I can still get back. But the question is, my life insurance policy through work was the premium was It's $10.50 a month, $10.50. My premium for the policy that I got through Xander is $120 a month. That's just due to my… Technically, my BMI qualifies me as underweight, even though my PCP isn't concerned about it like it's a normal weight for me. My question was, due to the increase in premium, is the change from my life insurance through work to the Are the policy really worth it?
I don't know that they're apples to apples, so I'm wary on trying to compare them. I'm guessing the policy through your work doesn't have a big face value. What's the policy worth?
The 1050 was a 210,000 buy-up, but my employer actually covered an additional 271, so it was what's That's a 481 total?
Yes, sir. Okay. And what's the Xander policy?
It's a 20-year term, $1.25 million policy with the Wildriders.
Do you see why it's not apples to apples? You're talking triple the amount of face value. Yes, sir. I know there's some sticker shock when you see 120 versus 10. But the thing to remember is that 480, I'm guessing, what's your household income or your income?
My income, my wife is staying at home with her daughter. My income from my My primary job is right in the ballpark of 93,000 annually. Perfect. Then I have a side gig that boost me up to maybe 110, annually.
Awesome. Our philosophy on this is that you want 10 to 12 times your annual income in term life. That 1.25, you're right on track there. I think that's the right amount for you. If you wanted to scale it back to a million, you'd probably be fine there. The goal here is to become self-insured when this policy runs out. So 20 years from now, your life looks very different. You've been investing for 20 years. You've got the house paid off long before then. So your family would be okay if something happened to you once the policy expires. But in the meantime, if, God forbid, something happened and you got to stay at home on with no income now, that's scary, isn't it? For sure. That's why I will pay the 120 bucks for the peace of mind all day long. We spend 120 bucks on stupider stuff in America.
That's very true. My only hesitation was so… When I first applied for the policy, I chose the preferred plus health class just because my cholesterol, my blood pressure, everything was in line with that health class. Then in that premium was like 20 bucks a month, which was in line with what I was used to paying. But then the underwriters took a look at my BMI and they bumped me down the plus, and that's what- That's what got you a little higher.
Well, it may be worth. I don't know if there's an appeal process or if your doctor can write a letter back and say, No, I've been following my patient forever. He's good to go. Because my guess is a lot of those underwriters just look at an actualry table and say, What is the risk for us? Boom, boom, boom, here you go.
That's right. It's definitely worth trying to follow the appeal and try to get a better rate. But at the end of the day, right now, I'd get something in place.
I'll say a few things, maybe nothing, but a few things in my life makes my wife have more peace when we sit down and go over, Hey, if I were to die today, here's what happens. We have this much money in life insurance. We have this here, and there's just a piece in the house. I'm paying that 120 all day, every day.
That's right. Hey, when this segment ends, folks, if you're watching on YouTube, you're listening on podcast, the show, as you know, it will be over. But if you want to catch the next hour, jump over to the Ramsey Network app. It's the only place to get full episodes of the show. You can download the Ramsey Network app for free. We've got a link in the show notes or just search Ramsey Network app in your app store. If you're on radio, stay tuned. The show will continue. Today's Question of the Day is brought to you by YreFi. Yrefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment you can afford with a low fixed interest rate that you couldn't get anywhere else to help you stick to your budget and that debt snowball. So go check them out, yrefi. Com/ramsey. That's the letter Y, R-E-F-Y. Com/ramsey. May not be available in all states.
Question comes from Hunter, North Carolina. My wife and I have a bi-weekly budget meeting. During this time, we talk about finances, goals, and direction, and we usually leave this conversation unified and excited. One of the agreements we have as a couple is if there are any surprises that come up that we didn't budget for, we need to communicate with each other before making a purchase. Two to three times a week, I find out by looking at our bank account that my wife has made an unbudgeted purchase without communicating with me. Over time, this has eroded trust and has hurt our relationship. When I try to have a conversation about how this makes me feel, she tells me to stop talking and to leave her alone. I don't know what to do. I'd say, number one, you need to own reality. That means you guys aren't unified. Unified is not a feeling. It's an action. It's a way of being. You can feel excited and like, after conversation. But unity is people working together towards a common goal. You all are not unified. This, George, is not about spending. This is about saying, Hey, we made an agreement, and then someone acting like a child, a wham-wham baby child.
Don't talk to me and running away. I'm taking my balls and I'm going home. That's what needs to be discussed here, Because I promise you this is not only happening about budget purchases. She treats him this way on everything, or he's a nag, and he's always nagging about it. Either way, you only need to get beneath this thing. Here's a quick tip. When you sit down, don't say, You keep running away. Always use the word I. I don't feel like I'm doing a good job communicating how scared I am that we come up with these agreements and then we walk away and everything we agreed on isn't upheld. I don't I don't know how to communicate with you when I try to talk to you about it. For some reason, I set you off, you're out. I don't know what to do about that, but I'm struggling here. Usually, beginning an eye conversation is an invitation. It's not a fight.
Versus a shutdown attack.
When you start with you, then just my finger automatically points at you. It's a declaration of war. I have to fight you now.
Instead of an exclamation, let's put a question mark and dig into, Hey, what's going on here? I'm seeing these purchases. Here's the theme I'm seeing. Tell me if I'm wrong, what's going on? What can I do to help create some guardrails so that we can actually stick to the budget?
But you have to have the conversation deep in the budget on this one because this is about either a husband who thinks he's being clearer than he is or a wife that will do his stupid little budget meetings, and then she goes on about her life and could give two craps what they've agreed on.
Is this a dollar or is it 100 each time? That also makes a difference. But getting to the root of it, then we can go, Okay, here's what we're doing next as far as the budget goes.
If you're nagging over $5 that she spends, increase her- Fun money. Personal like her fun money and just call it what it is and move on with your life. If it's something big, at the end of the day, you all need to have this conversation anyway.
Absolutely. Hey, that puts this hour of The Ramsey Show in the books. If you want to catch the next one, if you're on YouTube or podcast, jump over to the Ramsey Network app to continue the party. This has been The Ramsey Show..