Transcript

It’s Time to Go Scorched Earth on Your Debt | February 3, 2026

From The Ramsey Show · Episode page · Watch on YouTube

· 2 h 6 min · 24,608 words · 424 timestamped sections

This is the full, timestamped transcript of "It’s Time to Go Scorched Earth on Your Debt | February 3, 2026", an episode of The Ramsey Show published February 3, 2026 (2 h 6 min, about 24,608 words). It mentions 10 people, works and ideas, including Rachel Cruz, Jade Warshaw, Dave Ramsey, Robert T. Kiyosaki.

What this episode is about

The discussion centers on navigating a complex financial situation involving a family gift of silver that could cover credit card debt but comes with emotional ties and expectations from relatives. The speakers emphasize the importance of prioritizing debt repayment over holding onto potentially unliquidated assets, ultimately advocating for a "scorched earth" approach to debt management.

Key takeaways

  • Gift or Guilt? A gift with strings isn't generosity—just a disguised obligation.
  • Silver linings can tarnish: Market dips remind us that value is volatile, not sentimental.
  • The fine print of family gifts: Expectation can turn affection into obligation faster than silver can melt.
  • Financial wisdom doesn’t come with conditions; prioritize stability over sentimental silver in budgeting.
  • Navigating familial expectations? Sometimes, honesty is the best policy—even when it sparkles like silver.

Who speaks in this episode?

What is discussed, and when

  1. – 15:00: Rachel Cruz, Jade Warshaw, Every Dollar, Fair Winds Credit Union
  2. – 30:00: Every Dollar
  3. – 45:00: Fair Winds Credit Union, Xander Insurance
  4. – 1:00:00: Christian Brothers Automotive, Every Dollar
  5. – 1:15:00: Fair Winds Credit Union, Y Refy
  6. – 1:30:00: Rachel Cruz, Fair Winds Credit Union
  7. – 1:45:00: Every Dollar
  8. – 2:00:00: Dave Ramsey, Robert T. Kiyosaki

Notable quotes from "It’s Time to Go Scorched Earth on Your Debt | February 3, 2026"

  • Transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsay Show. I'm Jade Warshaw. Next to me, Rachel Cruz, taking calls all hour…
    about Jade Warshaw · at
  • Yeah. And Jessica, I would not sell a home for $20,000 of consumer debt. So, if there's a bigger reason why, like what you said that you eliminate a mortgage so that you can homeschool your.
    about Rachel Cruz · at
  • Can take control of your money. You can change your family tree and live like no one else. Go download our Every Dollar Budget app for free in the App Store or Google Play.…
    about Every Dollar · at
  • Xander is the real deal and that's why they've handled all my personal insurance for over 25 years. I trust them and you can too. Visit xander.com for instant online quotes or for a more.
    about Xander Insurance · at
  • Well, Dave, on the show all the time, we get calls about cars, used cars. What's one thing you want folks to know?
    about Dave Ramsey · at
  • Budget and every time you use it, it's a reminder. You control your money, not the other way around. Fair Winds Credit Union is for people who are serious about taking control…
    about Fair Winds Credit Union · at
  • To you by Y refi. Defaulted private student loans don't fix themselves, but they can be fixed. Y Refi helps you by refinancing defaulted private student loans into a low fixed…
    about Y Refy · at
  • And that's one thing that changed was the Robert Kiyosaki book when I read that and it said that the wealthy don't work for money their money works for them.
    about Robert T. Kiyosaki · at

Who and what is mentioned in this episode?

People

  • Rachel Cruz — Person · Co-host / Ramsey Personality · 3 mentions · first at
    Co-host taking calls and providing Ramsey Baby Steps guidance; co-leads advice on debt payoff, housing, and family decisions.
  • Jade Warshaw — Person · Host / Ramsey Personality · 1 mention · first at
    Primary on-air host guiding callers through Baby Steps, budgeting, debt payoff, and relationship dynamics around money.
  • Dave Ramsey — Person · Referenced host / Ramsey brand figure · 1 mention · first at
    Referenced as the voice behind Ramsey principles (e.g., 'don't collect rocks') and appears in a recorded segment about car buying and maintenance.
  • Robert T. Kiyosaki — Person · Referenced author/influencer (passive income concept) · 1 mention · first at
    Mentioned by Kelly as an influence on the idea of passive income ('money works for them'), shaping their approach to dividends and income.

Sponsors

  • Every Dollar — Product · Sponsor · 7 mentions · first at
    Budgeting app promoted by the hosts to help listeners manage their finances.
  • Fair Winds Credit Union — Company · Sponsor · 5 mentions · first at
    Credit union mentioned as the studio location and likely sponsor of the podcast.
  • Christian Healthcare Ministries — Company · Sponsor · 4 mentions
    Health cost sharing ministry promoted as a budget-friendly alternative to traditional health insurance.
  • Christian Brothers Automotive — Company · Sponsor · 2 mentions · first at
    Auto repair service recommended by the hosts, with an exclusive discount for listeners.
    Looking for. You need somebody who can take care of your car. So, when we found Christian Brothers Automotive, it was a no-brainer and they've been absolutely great.
  • Xander Insurance — Company · Sponsor · 1 mention · first at
    Insurance broker recommended for term life insurance, with a personal endorsement from the host.
  • Y Refy — Company · Sponsor · 1 mention · first at
    Service for refinancing defaulted private student loans, mentioned as a solution for listeners.

Full transcript with timestamps

Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird. So, we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsay Show. I'm Jade Warshaw. Next to me, Rachel Cruz, taking calls all hour about your life and money. We have Jim who's in Phoenix, Arizona. Hi Jim.

Hey Jade. Hey Rachel. How are y'all doing? Good. How can we help today? Hey. I've got kind of a weird situation that I want y'all's help navigating. Uh I received a um a large gift of silver from a family member and it was kind of given to me under the pretext of hey I really want you to hold on to this. I think this will increase in value. I told them that we're working baby step two and they would be like, "Oh, this is awesome. It's actually going to cover in the rest of our credit card debt, but they really want us to hold on to it."

Um, and I'm trying to figure out how to navigate the situation. Is it like hold it for safekeeping or it's a gift, but we don't want you to cash it in just yet? What which is it?

Yeah, it was more like it's a gift, we don't want you to cash it in. We think it's going to exponentially go up in value. Um, and you know, it's funny. I listened to Dave talk about, you know, not to collect rocks.

Well, when did they when did they say you could cash it in? Um, there wasn't there was really it it it was a it was a grandparent. So, it was really a you can hold on to this. Um, or you can do what you want. But there was sort of a uh

strings attached to a degree. Yeah. Which is funny because about two days ago, silver went

in the tank. I don't know if you I actually had a friend I was debating about with silver

and then he texted he's like, "Well, not a good day for my argument." And I was like, "No, it's not. It went down."

Um, well, okay. So, yeah. So, I I do think, you know, having a gift with strings attached is not fair to the person receiving it because it's not really a gift at that point. there's an expectation and and I appreciate their sentiment and I'm just wondering I mean I kind of think Jim honestly I think you're an adult and so I think you were given something and you and your wife are you married did you say you're married?

I am. Yeah. Yeah. that you guys make a decision on on how you think it would be best used and you know is it best to to keep it because you never know or you know whatever this grandparent's saying

or for right now in your life like this is what we're working towards to create financial stability which is ultimately what this grandparent's wanting for y'all is financial stability because they think that this is going to you know become something. Um, so yeah, at the end of the day, Jim, I mean, and I feel like it sounds harsh, but I'm like I I think that, you know, you you're an adult. You were given a gift, and I think you guys use it as best as you best see it. What you could do is you could let the grandparents know and say, "Hey, I know that it's your desire for us to keep this. For us, it'd be better used if we sold it." Um, so if that changes whether or not you want to give it to us or not, like we're like you could put that on the table and say, "Hey, if you'd like to basically revoke your gift back knowing what we'll do with it, we'll be fine with that. But we wanted to be upfront with that with you

that we're going to we would sell it and see what they say." Yeah. If you wanted to totally be like above board, I mean, you're fine to do what you want now, but if you really wanted to take it to the next level,

you could give them that option. The the only thing, and I don't know if this changes at all for y'all, it really only affects my baby step two by like a month and a half to two months. How much is it worth?

It's It's worth about $8,000. I'm We're chucking about 6,000 a month towards credit cards and consumer debt right now. So, Um, yeah. Well, you know, got to get out of it quick.

I know. It was good. That's amazing. Yeah. Well, yeah. So, the the time thing again, if you if you weigh out what it's going to do to a relationship that if you really think it's going to harm something, you're like, it's not worth it. And so, for a month and a half of our sacrifice, we'll sacrifice an extra month and a half to keep this thing. And and this sounds horrible too, Jim, but when you know this person passes, you know, and you guys look up in 10 years, I'm like, "All right, we did this to honor to honor Nana, but we are ready to let this go." Um, you know, it's not the end of the to your point, it's not going to change your life either way. It's just a principle of we're going to put our efforts and our money and our time and energy into things that we think are actually going to be worth it in the long run financially and and this commodity is not. So, you know,

um Oh, thank you. That's a good It's a good question. I mean, we know gifts should be given and for anybody who's thinking about giving a gift out there, if you're going to give a gift, give a gift. And it's okay. I think if it's something that's like um estate planning, like a will or something like that, to have certain uh stipulations on something like that, uh that makes sense. like from a moral perspective or something like I don't want to harm my kids if they're, you know, be misbehaving in life and then I don't want to hand them a bunch of money

because that could magnify it, you know, the things around that. But just this like kind of nitpicky, hey, I want you to do this, not that. It's like giving someone a whole life insurance policy and being like, I don't want you to cash it out. And you're like, yeah, but this is not a smart investment,

right? Or even the idea of, I don't know, a family member, let's say a family member struggling and you want to help with their rent, so you're not giving them cash, but you're like, I I will pay your rent for you. I just feel like there's

it is a interesting line to walk there, Jim. And I, for one, think that this is kind of more on the side of you should be able to do what you want with this.

Absolutely. Absolutely. Thank you for the call. All right. Jessica's in Oklahoma City, Oklahoma. Hi Jessica. Hello. Can you hear me?

We can. What's up? Okay. Hello. So, uh, to sum up, we are putting our house on the market next month, and we, our plan is to eliminate a mortgage by downsizing. Um, if we can buy a home in the $350 to $400,000 range, we will eliminate a mortgage and all of our debt and it will give us the opportunity for me to homeschool my kids if we do that.

Wow. What What home the home you're in currently? Um, what equity is in it? So, we are putting our house on the market at about 680,000. is on 15 acres.

Um, so our big downsize would be in land, not necessarily home size. Gotcha. Gotcha. What will you make on the sale? What will you pocket?

So, we will pocket about 420,000 after closing costs and uh taking away the mortgage, which is at about 215,000. Um, so if we bought a home in the 350 to 400 range, um,

we would have 17,000 in like education debt slashcredit that it's all one. Um, and so we would take that and pay that completely off. And then so we would kind of do and we already have about 75,000 in a brokerage account.

Great. That we use as our emergency fund. So what's the question? Um I guess if uh our head is in the right place of doing this because it's kind of going out of order of the baby steps. Um but it would

because you're in what way? Um because we're paying off our home early. Oh. just kind of babysit.

Yeah. Well, what I would say is if you do this, obviously you're clearing your debt,

I would uh save some money aside for a 3 to 6 months uh emergency fund, but other than that, that's it. And it really feels like it's in that brokerage account. Just pulling that out and having since it's not retirement, having some of that liquid, I think, is where you're going to want to do there.

Yeah. And Jessica, I I would not sell a home for $20,000 of consumer debt. So, if there's a bigger reason why, like what you said that you eliminate a mortgage so that you can homeschool your kids and stay home, that makes sense to me. But I would not make this move for 20,000 for $20,000 of consumer debt. So, if there's a bigger reason why, which I think you said there is, then that's great. Yep. And you're not out of order necessarily. I think you're Yeah, you guys are doing awesome. So, good luck.

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Code Ramsey. Exclusions apply. All right, back to the phone lines we go. Charlie in Atlanta, Georgia. Hey, Charlie. What's going on?

Can you hear me? I can. All right. Thanks for having me on today. And uh I guess uh I may have kind of a complex question, but we'll just dive in and see what details are needed.

Sounds good. So I'm calling on behalf of my wife and I and uh we're in baby step number two. We've been in it for a couple years now. Um we started $254,000 worth of debt. We're down to 145. Um but on our snowball, our next loan is kind of a sticky situation. So my wife, her last year of undergrad and all four years of my brother-in-law's college are consolidated into one parent plus loan.

Okay. And so we our portion of that loan, it wasn't really done, right? But this is before we found Ramsay and this is all before we even got married. Um, but they consolidated it and it was like, okay, and here's your like they they took it since it was four years of his college and one year of hers. They just took the payment, divided it by five, and that's what we pay. So we pay 211 per month.

Yeah. And so our we have our original balance for my wife's loan was 25,000. That's interest included. And so we had that cash saved up, but the problem is my mother-in-law, I think, but no, no, I don't think they're they're trying to do the PSLF program

and get it all forgiven. And there's still like there's still like seven years left of that. And so we don't want that. we have the cash to get out. Now, the problem is is that they depend on our 211 per month to make the payment.

And I guess my question today is probably more of a relational question of how cuz you know, it's my mom or my wife's mom. So, you know, we're going to have her talk to them because I don't want to be the me son-in-law.

Smart. And um I guess I guess just some insight on what are some tips or something. Maybe my wife can talk to her mom about this maybe

because the loan is in the is in the mother's name. Correct. Your wife's name is nowhere attached to this to this loan, right? So there's Okay.

Yeah. We we've we we double triple check and Yes. And u morally they they spit shake that we would pay it off

sometime and you have the money, the 25,000. The longer this loan sticks around obviously the more interest it gains. So for you it is smart to say hey if we have the money now let's knock it out. You can give them the 25,000 that you owe. It's up to them if they want to siphon that out $211 a month or whatever that is or whatever they want to do. But what you do need to do is make sure that the same way it was a spit shake before that you get in writing and just say, "Hey, we're giving you the entire balance of what we owe as of, you know, February 2nd, 2026." Um, and that way no one can come back to it and say, "Hey," and then you give it to him and say, "Hey, if you guys want to do this loan forgiveness, that's fine. But any interest that occurs, that's up to you.

We're ready to be out of this today." And I love the idea that he's that you'll be the one uh that your wife will be the one talking to the mother-in-law.

Yeah. I mean, that's exactly what I was going to say, Charlie, is I would sit down with them, have a check, and the writing thing is so smart. It's going to probably feel really weird, and her mom's going to be like, "This is so what are you doing?" But it's like no, I'm just going to have the date the balance of what is and then tell the mom like and hey mom listen

I just warning that sometimes these programs not do not go the way you think it's going to go and if it's not paid off this is what the interest will be but we are not going to be on the hook for it because if it was our loan today we would be paying it off like I would overcommunicate it have it in writing

give them the check and to yeah and to Jade's point if they really want to just keep it then it's like okay you do whatever you want with that 25,000 but we we are done And credit to your wife, too. We take so many of these calls where there's like some communication when the child is 20 years old, you know, and then you look 15 years down the road and mom doesn't want to pay anymore or daughter's like, "No, it's not really mine." I thought, you know, it's really messy. So, the fact that you guys you guys are

definitely above board in the sense of like you are keeping your end of the deal, you know, flawlessly. It's amazing. And so it's just going to have to be that communication of here's the check.

Let's sign this together just so it's said out loud. Um, and thank you, mom. Love you.

And I'd even I'd even frame it up like the whole thing of getting it in writing. And by the way, I'd take screenshots of the balance and everything. Just everything. And the way I'd frame it up is, hey, you know, I don't know about you, but sometimes over time I can just forget details. And this is just for all of us. as opposed to a I'm doing this to hold you accountable, right? Just the idea. Everybody forgets what the balance was 2 years later. Nobody's going to remember the exact dollars and cents. No one's going to remember exactly what was said. So, it's just an idea of we all forget details.

It's easy for this to get muddy for me for me to remember. I'd like to do this. And that way, you're kind of putting all the onus on you and not being um just you're not indicting them anyway.

Yeah. pointing the finger at them. How will that how would that conversation go knowing your mother-in-law and her relationship with your wife? Like what we just laid out, how how do you see that going?

Well, that's the the worst part about it is that I mean I was fixing to have a follow-up question. And this might be passive aggressive, but I was wondering, you know, getting it in writing. Would do y'all think it would be okay to like get a cashier's check and get it put in the memo? Maybe.

Yes. And the reason why I say that absolutely I worried about I worried about like cuz when we first approached this I was like well heck we'll just go get it and notoriize but but it makes it look like I don't want to make them look like bad guys for doing

it's not that's it's just how these things are done. Okay. Yeah. And I and and honestly you asked how they would be received. I'll be honest I'm worried that it might not that it'll be bad but it'll catch them off guard just because there's a total different mindset there. I mean, dead is just a normal way of life for them and all that. Me and my wife, we're f we are first generation Ramsay people. I mean, my side of the family, my wife's side of the family are both the same. And so, we're trying to get out of this where we can, you know, fix our family tree as y'all say.

Totally. Yes. Absolutely. So, I'm afraid I'm not going to say it won't be received well, but

you're going to look weird. Yeah, it's going to be weird. Also, because like I said, like they firmly believe that it's going to get forgiven. Like there was a comment even made back in the summer. uh they looked up the loans and whatnot because we live we live six hours apart so we got a vacation together and we met them and they uh the the comment was even said like oh how much is left on that loan cuz we talked about paying off our debts and stuff and uh her mom pulled it up and was like oh it looks like seven years and the brother was like well it looks like you're in debt for seven more years at least and we're just like uh no not really

y but so I'm not going to say it be bad but just a it's probably gonna be it's gonna have to be like a teaching moment and that's gonna be hard because that's her mom.

Well, well, I mean, I don't know if you do have to teach it. I think it's just I would keep it. And I know you're not the one talking,

but yeah, I wouldn't even get into all that. I would say, hey, you know, I was thinking back to when you pulled up that loan and me and my husband, this is her talking. Me and my husband talked about it. You know, I think we just we're ready to be done with it and we looked at the balance and based on what it is today, I think we're just ready to pay our portion off and we'll give you a cashier's check so you can put it on there. But, you know, and and you're not even talking about them. you're really not even talking about you. You're just letting them know you want to get out and there's no detriment to them. And I think at that point, as long as you know, as long as they understand it's it's at no detriment to them to pay this off, I wouldn't I mean, Rachel, I I wouldn't even get into

the why the why and what you should be doing. And unless they ask, you know, then you can you can elaborate.

Less is more. Can I dive in? Less is more. Yeah. Yeah. For sure. For sure. Um, okay.

Yep. So, yeah. I hope it goes well though. But yeah, keep it short and sweet. Clear.

We always say kindness, you know, to be unclear. To be unkind. Yep. So, be clear, which helps with the writing. And I like it. And I like the whole I like your advice, Jade on

Hey, this is for us and for our records and like what we're doing and just so I can remember because I sometimes can forget. You know what I mean? You can put that off a little bit on you. And I think that's fine.

And it's true. And and it's also true. I mean to remember what the dollars and cents are because what I see happening in that situation is if for some reason on down the line it doesn't get paid off. It starts to feel overwhelming. It could be easy to think well maybe they didn't pay their whole portion. Maybe I remember it being you know

and and if you're tied in with a loan with someone else the brother's loan is in there and if he doesn't pay for a year cuz he doesn't have a job or something happens you know what I mean? Like it just it starts to build. starts to build a lot. So, uh, Charlie, great question. And hey, great for you and your wife. And again, I kind of pointed out to the weird word word, but

it is how they're doing life and money. That's normal. That's what most people do. So, when you come against that and you're kind of at this intersection of like, oh my gosh, we're butting up against normal. It's going to feel weird and it might be a little awkward, but you're going to get through it and then you're going to be fine and I think you won't even think about it 6 months later and it's going to be great. So, I think it's a smart move and yeah, excited for you and your wife.

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Elizabeth in San Francisco, California is on the line. Hi, Elizabeth. Hi. Thank you guys so much for having me.

You bet. How can we help? Um, so my question is, how do I know if I'm heading past Gazelle intensity into kind of the burnout space as it relates to paying off my debt?

Tell us more. or what are you doing that think makes you think you might be going too far?

Yeah. Um I first of all I did I never really learned how to budget. Um I'm a medical doctor so I make good money but I just got out of residency and I I have like about $600,000 worth of student loan debt and plus consumer debt. Um, and knowing that I don't want to be in this space of paying debt forever. Like I fully bought into the baby steps. I believe in the biblical principle. It's just I'm finding that when I get to the end of my paycheck and I'm having to wait 3 weeks because it's kind of a I get paid on the 10th and the 21st. So between the 21st and the 10th, I'm like scrging around for my last dollars to make it to my next paycheck. Yeah, I know that feeling.

I'm really Yeah. And so I'm trying to figure out if I'm like paying too much aggressively because I have this goal in my mind of paying off over $100,000 of consumer debt by December if I'm if I need to pull back a little and stop being so so extreme.

Well, I I'll I'll give you some parameters. Um, something that you said definitely hit home for me and when my husband and I were paying off debt, the feeling of having just a little bit of money in your account, I think that can be good, but are you budgeting a cushion just in case? Like, if you're finding that you're going to the wire and it's causing you to overdraw or it's causing you to not pay minimums on other things, that's a red flag that you're just doing you're just taking every cent and you're not planning for just like a basic cushion. But if you're if you're telling me like, "No, Jade, I'm not it's not causing me to overdraw. It's not causing

stress and strain. I just don't have I'm just using all of it." I I think that's pretty good.

Yeah, I I was I was overdrafting a lot up until October and then I I kind of like I hit rock bottom. My friend's an FPU coach, she was like, "We are going to do this." So now I This is my first month doing my every dollar myself.

Good. Okay. Yeah. Okay. And you're putting the cushion. What's your cushion amount?

Um I would say I don't have a cushion right now. Okay. You need a cushion. I I This is coming This is coming from your friend who has done that and the overdrawing it because it's inevitable, right? You you budget zerobased budgeting doesn't mean zero dollars in your account. So, if you're budgeting every single dollar towards debt and you're not putting a cushion, it is ine inevitable, Elizabeth, that something will come up, grandma's birthday or just something that you forgot that will come out of your account and overdraft you and then you're like, "Oh,

that's happening every month." Yes, that's happening every month. How much how much money are you putting towards debt? So right now, um, just like in my minimums, it's about two grand and then what I'm paying on top of that is like another two grand. So somewhere around 4 to 5,000 a month.

Okay. Cuz how much are you bringing in a month? Um, 13 to 14. Okay. But I made griefbased decisions like because of working in an ICU during COVID and getting PTSD. Like I was like, "This has to mean something." And so I'm like standing in a $6,000 a month rent right now

and just paid off a $5,000 couch. Yeah. And when I finally hit rock bottom, I was like, "Okay, I've made a lot of good decisions. I'm paying the stupid tax till I get out of this

like lease up." And yeah, my lease is up in January of next year. Okay. So, another year of you kind of have outearned this the I don't want to say stupidity, but you know what I mean. Um the bad purchase.

And like I said, luckily you have enough you're earning a high enough income that you're probably not feeling it the way some others might feel it. But yeah, that's going to make a huge difference when you get back down to 25%.

For sure. Right. Yeah. Have you calculated out because you have $600,000 in debt? You said

when you get that When you get that 6,000 a month back in the budget, how quickly are you able to pay this all off? And I'm assuming your income will go up over the next couple years.

Yeah. Yeah. So, right now, um, my income goes up about I'm I'm at 320 right now and about 10k a year um is my salary increase and then I get about a 10k budget once I I just started my job. I'm only four months in, but that's essentially

okay where we're at. I've paid down almost 20k of my of my debt so far. Okay. Okay. Just a question. Um and I'm sure you've run this out, but if you haven't, if you broke the lease, what would the lease, what would it cost you?

Oh, it's like 15. 15. Mhm. H Well, that's two months of rent. Yeah. Versus continuing to pay

Yeah. 60,000. Yeah. I'd probably do that. Just so so should I save the money then to pay off. Okay. So instead of worrying about paying off my other debt just like Okay.

Yeah. Okay. I would do that because think about it. If you can find a place that's I don't know 2,000.

I already have I already have three. I already found like five places. I search like once a week.

I probably would do that, Elizabeth. Yeah. Versus being stuck in this cuz that's what 66 almost $70,000 a lot

that could be going towards this over time, you know. Um. Right. Yeah. I mean, if you saved 4,500 a month on rent, that's a a killing.

Yeah. Okay. Okay. Okay. Great. And I feel like you're motivated. You are. She's like, I already found three places. I found three places to live in high school. Okay.

Yeah. Oh, yeah. Say less. Eight years of non-gratification. I can do this. Yes, Elizabeth.

Oh my gosh. Well, you make a great income. You have a crap ton of debt, which I know you feel, but you can. Yeah, you you can do this. I love this for you. Okay, so we've got a clear plan forward. There's way more margin coming up. I love that.

Yes. Oh, yeah. I would do that. So, so, so good. Okay. And six grand a month. It's a lot. It's a lot. It's a lot. So, just for anybody who's listening for the first time, whenever we have people ask about their home situation, you don't want it to be any more than 25% of your take-home pay. And that's not just with mortgages, that's rent as well. Yeah. And the purpose of that is to make sure that you've got your income at your disposal to do the things that we teach. What regardless of your baby step, whether it's um you know to to be able to do all of it to be able to save 15% in baby step four, five, and six, you can't exceed that or else you'll wonder how are how is everybody saving 15%.

It's because our mortgages and our rent is 25% or less. Yes. Yep. which allows again so much of your income to be able to do so many things whether it is paying off debt like where she is in baby step two or beyond that what you're saying with investing and even kids college putting extra towards the house all of it.

Yes. Yes. But yeah, um what I appreciate about her though is she um she's not like a typical we see some people get out and they out of law school, out of you know doing all the residency with in the medical field and they make $320,000 their first job and that's a that's a great income. It is they and you want to feel it. you want to go enjoy it and you want, you know, upgrade the car, get a nicer spot, like you just want to all these things. You want to be in it. And so her though, I could hear it in her voice. Yeah.

Where she was like, "No, I am I'm cutting. I'm getting out of this because it's crazy to think if she does this in 3 4 years, which is totally doable."

Absolutely. Um at that point, she'll be making 400,000, you know, with nothing with no debt. It's amazing.

That's so true, you know. Um, and she did this with co she kind of went back and re revenge spend uh which was a real thing. But it's true when you make an income like that or really anything if you've worked hard to get what you have you almost feel like it's a reward to be able to enjoy it

and and it is but if you've made mistakes you've got to go back and pick them up and clean up the mistakes and that's just part of it. Um and so I'm really proud of you Elizabeth for doing that. Call us back when you're debtree. Matter of fact, come see us in Nashville and do your debtfree screen live.

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All right, thanks for hanging with us. We're going right back to the phone lines where we have Amanda who's in Santa Fe, New Mexico. Hey, Amanda.

Hi. Thanks so much for taking my call. I hope you guys are good. Absolutely. How can we help today?

Hi. So, I need more of a I guess relationship advice. I want to see how I can maybe get my husband to be as intense as I want to be on step number two or maybe how I can be less intense. We can balance out. He says I'm a little bit um obsessing over money right now.

Okay. So, he's viewing he's viewing you as obsessive. You're viewing him as a little bit passive. Tell me tell me some of the things that you want to do that he doesn't agree with. So, um, we have some crypto that I would love to take out so we can get through step two faster. And I know he was not totally on board. So, I made uh like different plans as to how it it would look like or how long it would take to pay off our debt if we took out the crypto, if we uh you know sold my car and I would get a cheaper car or if we didn't do either. So, we could compare the the length at which it would take to get through step two. Um, and then he he's he's supportive of going through step two, but he was just like, "You're obsessing too much over this.

Like you he's not feeling the pain as much as you are." Yeah. He's Yeah. He's like, "I we're going to get through it. Like, you just need to calm down. Like, you're spending a little bit too much time on it. Like, you should focus on our family and our marriage instead of like looking at this."

Wow. Does Does Okay, let me go on that side. Does your marriage need attention? Is there other things that need more attention right now?

I I would say maybe, you know, we just had a a baby. We have a four-year-old and a six-month-old right now. So, I would say maybe we could we try to do date nights and stuff, you know, at home and we go out for dinners.

Okay. Maybe like once a month or something. Okay. So, I guess I can see why we could spend more time. Maybe I would start by I'm going a different direction. I don't usually go this. So maybe you could start by getting a picture from him of what that looks like

um in his mind. What does it mean for you if I I thought about what you said. What does it mean for you um in your mind? What does it look like for me to spend more energy on our marriage? What does it look like for you um for me spending more time on our family? Because I'd like to meet you where you're at. And then I'm hoping that we can meet each other where we're at. And so if you start by

wondering what that is for him, huh? Because I'm not saying this is you, Amanda, by any means, but we do have some people that are so hardcore that every conversation is around getting out of debt. Every purchase is looked at to like the inth degree when the spouse walks in the door and it's like, look, I saw this over, you know, and it's just like it it becomes so obsessive to the point that there's nothing else in life but this. And listen, we're all about intensity, right? like we want you, but also you're a whole person and so you are in a marriage, you are a mom, you have these other roles that you can't neglect. Um, so on the extreme side, Amanda, how where would you be with how I just described? Are you that person or are you like, "No, I'm not that person.

He just is way too passive and I'm not that crazy." What would you say where where you are? Well, you know, I would admit I'm not like crazy obsessive, but I do want to get through um the debt payoff and yeah, maybe could be a little bit more

I guess cuz I I'm the one that handles the finances. I would like for him to be on board and not be the one that's like, "Oh, we can't, no, we shouldn't be spending on that or you don't want to be the mom of him, right?" And giving permission of what he can and can't do and what we can and can't do as family. We as two adults need to decide that. So there's there there's a core issue there.

It's a big issue. He's not in there with you. I I like that. I think if I were in your shoes, my next step would be set up a date, like a date night. And the first date would be for you to learn more about what we talked about before. What does it look like in your mind for me to do these things? And then I'd set up another date. And I would say, um, here's what I I I know you didn't ask, but here's a few things that I would like to see going forward. And I think if we if I do some of the things on your list and you do some of the things on my list, that's us meeting in the middle. Y

and to do all of that around a date night, I think is a great way to be intentional. Um I I'll I'll just be honest. I for one like the fact that you're running different scenarios of if we did this, here's how quickly and if we did this. And that way there's options. And I think maybe presenting it to him that way and saying, "Hey, what I don't want to do is make the decisions for our family. What I don't want to do is be the one saying you can or can't do this. So what I thought would work would be would be me bringing options so that you can decide and that we can decide together and both feel good about it as opposed to me saying no we're selling the crypto and no you're selling your car that sort of thing. So just it just really feels like hearing the heart around the situation for both of you would be helpful. Yeah. And I do wonder, Amanda, if there's like if you guys are just missing a point of connection, and

this sounds like so simple, but honestly, I could see being in your shoes and feeling like I feel so isolated over here. I feel so much responsibility. I have a new baby. I have a toddler. This is up to me to make all these decisions about the household finances. I don't I feel like I'm on my own. I don't feel connected to my husband. Like, if I had a husband who was paired with me, excited with me, asked questions, was involved, had thoughts, maybe different opinions than me, cuz that's going to happen. But at least there's like a there's a connection point and I feel level of connection where his level of con connection Amanda maybe something totally different and so figure out what that is for him like what Jade's saying.

So, I think there there's like kind of this missing element of, you know, you could be functioning more like roommates and you're the CFO and you know what I mean, doing this role all on your own versus it being a marriage and we're in this, we're in this together. And what we both need may look different, but let's say that out loud um so that we at least hear each other. And that's the part of marriage is that you you know, you're you don't you're not going to be the hero to your spouse's story by any stretch of the imagination, but you can at least choose to step into those things. Absolutely. And I do wonder if that would help you because he does need to be part of these decisions with money. It doesn't it does not need to be on your shoulders, Amanda, at all.

Yeah. And and you're probably Yeah. And I Sorry, I'm going to keep talking because I I bet you feel the stress though because you're seeing the numbers day in and day out and he's so he doesn't feel it as much as you

and and I'm like, "Oh, we have this much left for our for grocery budget." And he'll be like, "Okay." you know, he's supportive of that, but I'm the one that has to like remind like, hey, we have this much in our account. We don't want to use our savings or

Yeah. You're wanting to get You just want help and you want 50/50 on this. And I don't think that's too much to ask. Um I truly don't. I I don't think you're wrong. I I I don't think you're wrong at all. I don't think he's wrong for saying what his needs are. I think you guys just need to really talk about it and don't leave anything out. Just be honest and see where that leads. Do you think you could be honest with him? And if so, what do you think his response would be? Do you think there'd be any change?

Yeah, I think I think I could be honest with him. The thing is that we used to do finances together, but I I told him I I didn't think I could trust him with the finances because I feel like it would be unnecessary expenses. So then that's why I felt like I had to take over the finances

because you feel like he spends he spends too much on unnecessary things. Is that what you said?

Yeah, maybe. So you wouldn't trust his methods? Maybe not. Yeah. Okay. So it's a philosophy.

I have I have it in my mind that I wanted a specific way with the finances, but I feel like it's just sticking to the budget and not purchasing what's not necessary. It sounds like you both have two different philosophies. It sounds like for you getting out of debt's really, really important or finding this financial security, whatever that means for is really, really important. And you're willing to really sacrifice to get it. And it sounds like for him debt is not as big of an issue.

Therefore, why be intense about solving it? You are definitely correct. Yes. Okay. So that's a whole different conversation I think because if he doesn't mind debt then you pushing to go harder. He's like why? Why? Why? Right? It's just like a moot point for him. So the conversation needs to be here's the way I'm feeling. Here's what this debt is making me feel. Here's my philosophy on debt. Where can we meet in the middle? Where can we where can we align on this? Because the baby steps, they're not there to be the stumbling block for a marriage. They're there to be

to be unified. And if it's causing so much friction, then you have to take steps back and go back to the almost the precipice of where you guys went arai and spend a lot more time having those conversations, getting aligned before you start any actions on the baby steps.

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Welcome back to the Ramsay Show in the Fair Winds Credit Union studio. I'm Jade. This is Rachel. We're headed back to the phone lines where we have Matt who's in Orlando, Florida. Hi Matt. How are you?

I'm good. And you guys? It's very very nice to talk to you guys finally. Great. How can we help today?

Um, so basically I have wrecked up around 26,000 in consumer loans and unfortunately I have a a immigration situation with the lawyer and everything. So I had to put a lot of money to a lot of like loans towards the credit card and I just want to know uh what should I be the best if I go for a debt relief program or I pay car uh the highest first. How like what do you recommend that I should do on this situation? Well, I wouldn't go to debt relief simply because they're going to take all of your payments and pull it and then in the time that you're not paying it, they're going to use that as leverage to strike a deal for you. And you really don't need them to do that.

That's going to tank your credit. If you wanted to do that on your own, you could really do that on your own. Um, so I I would not get involved with the debt relief program. Um, the 26,000 that you mentioned, is that everything? That's including the immigration lawyer fees and everything, or is there more to speak of?

No, it's everything. Okay. And how much are you earning right now? Um, around 5560,000.

Okay, good. Is it just you or do you have a family? Are you married? I'm I'm married.

Okay. Uh, go ahead, Rachel. Well, I was going to ask, how many credit cards does this consist of? The 26,000

it's uh six credit cards. Six credit cards. Do you know the balance on each of them?

Uh the American Express around 10,000. Um the other credit cards around 2 3,000.

Okay, perfect. Okay. So, what we would tell you is to list out the debts smallest to largest and actually regardless of the interest rate and pay minimum payments on everything. stay current, but attack that smallest one first. And so what I would do, Matt, is if you guys can up your income, I mean, even if you can get um gosh, if you could find 500 bucks of margin, $1,000 of margin a month, and then maybe work extra and you get another thousand, some of these two thousands you could be paying off every month. Do you know what I mean? As you go down the line. Um, and that's what's powerful about it is you start actually knocking some of the stuff out and then those payments that you were paying on those roll over to the next debt, right? So the 300 400 bucks a month you're paying for minimals now that's paid off. So that's an extra, you know, could be 2400 going to the next one, right? So you kind of keep

that snowball effect going. Um, but that's going to be the fastest way, the most efficient way for you to tackle these. So no, I would not pay a debt consolidation company. I wouldn't go to a debt relief company. I wouldn't try to combine the debts into one thing and take out a heliloc or whatever, right? The people maneuver their debt around so much. The best thing for you guys is to take these six credit cards and you and your wife sit down and say, "How fast can we pay these off ASAP?" And it's and it's 30 grand. I mean, 26 grand. Um, so you can do this. I mean, I I really do.

I mean, if you can get two grand a month, you know what I mean? You got to pay it off in a year.

Yeah. I just have a feeling that every every month that I pay, I I usually pay a little bit uh more than uh the minimum. So, every time I pay $200 and it comes back, entry is $200. I'm like I'm just paying the interest basically.

Yeah. And know like I'm going I'm I'm moving a step forward but like not not exactly

and it's going to feel like that on all of the debts that you're paying the minimum on. The one that's going to feel that you're making progress on is the smallest debt. So just know that until it's everybody's going to have to be on hold at the minimum until it's their turn to be the smallest debt cuz in that smallest debt you're paying it off lickety split. So just for real numbers, after you pay the minimums on everything and you know your household is taken care of, how much extra money do you have every single month to put towards these debts to put towards the smallest debt?

I would say $500, $600. I could put more, but then that that's uh I leave like money out of my pocket in case of of an emergency or something.

Okay. So, what we need to make sure is that you have $1,000 saved as an emergency fund so that you don't have to be worried about that month in and month out. If you have $1,000 saved, that's what we would call baby step one. And that way that's there. You don't have to think about, you know, what if I have a flat tire? You know, there's money there. And then secondary on your every dollar budget, which by the way, if you don't have an every dollar budget, um Christian will pick up after this call and make sure we set you up with it. I want to make sure you have a cushion item, a cushion line item, meaning that you're budgeting a certain amount of money every single month just as a something could happen. I don't know what, but maybe it's $50, maybe it's $100 that you just keep in your account just in case, you know, maybe a subscription slides through that you forgot about so that you just feel good

about the money that you budgeted for debt actually going towards the debt. Um,

yeah, Matt, do you have $1,000 saved right now? Um, no, not really. Okay. So, yeah. So, that would be the first goal is to work towards that. So, it may take you two months to do that. Um, but in all of this, we want it to be really aggressive. So, almost say, could I do this in a month and a half? Could I do this in one month? Like, what do I have to do to get this thousand dollars as quickly as possible? And again, it's probably going to mean working overtime, getting a side hustle. But this is all on Matt for nine months. You know what I mean? Like, we're not you're not going to be doing this forever and ever. And you're right, these credit card because I mean are these interest rates in the 20% or higher even some of them.

Yeah. Yeah. So they're ter it's terrible. It's horrible. So the faster you get out uh the better off you're going to be where some people can hold on to a student loan because it's not high interest you know and they don't really feel it. You feel credit cards credit card debt you feel. So um getting out as fast as possible Matt is going to be your goal. But I see a way out for you guys. I mean I really do. And even if your wife can take a part-time job and her, you know, even bring in an extra 500 a month or something.

Absolutely. That stuff helps. That stuff changes the game. So, uh, let's take a moment. I feel like this is the second or third call, and I I want to just kind of go back to basics on debt payoff. So, first things first, you got to have baby step one. Like, you got to have the $1,000. I have tried it without it back in the day and it didn't work because to to his point Mark uh to Matt's point, you're worried about well if I put all my money on the debt, what if something happens? That's what baby step one is there for. So guys, you have to have baby step one in place. Next thing is the cushion. You got to have you know a cushion is not an emergency fund. It is not a slush fund. It is strictly there

in case something that you forgot about comes out. And a way to think about it is what's the worst that could come out. I don't know if you still have Amazon Prime. What is that like 120 bucks when that hits? Or Dropbox subscription or something hits once a year.

So think about like yeah, maybe it's 150 bucks if you're getting out of debt. And especially if you have uh you know when I say lower income, if you're kind of in the average income, you're making 60 70 yeah 150 bucks extra, that's a great place to start for a cushion. Now, if you're making a little bit more, you might need a little bit larger of a cushion because there might be larger things that come out. So, you need the cushion. And the next thing is just understanding that when we talk about the debt snowball method, I've been noticing this, Rachel. Um when we say smallest to largest, it's by balance. It is not by payment due. Okay. I've been noticing people are doing it by payment and I'm like, "No, no, no, no. Balance."

So, the full amount that you owe, that's how you're listing them. You got to pay the minimums. Cuz I've also, and I've done this, you think, "Oh, I don't have to pay the minimums. I just want all the money going at the smallest debt." No, no, no. Please pay the minimums. It is It is thankless. I will just go ahead and say you, it doesn't feel good, but please do that because it's going to keep those debt collectors off and it is going to help keep the interest at bay. Okay? So, please do it and it's going to give you more motivation to go quickly through the debt snowball. All the smallest money goes to the debt. So, that's just a little refresher for you um for you to get yourself right if you haven't been doing it right up until this point.

Well, Dave, you know, on the show all the time, we get calls about cars, used cars. What's one thing you want folks to know?

Well, really a couple things. Number one is always buy used unless you got a million dollars. We don't buy new cars. And if you're going to buy used, number two, you want it to last. And that means regular, proper maintenance.

Yeah, that's a big deal. I know when Sam and I moved from South Florida up to Tennessee, that's the first thing you're looking for. You need somebody who can take care of your car. So, when we found Christian Brothers Automotive, it was a no-brainer and they've been absolutely great.

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Yeah, that's CBAC.com/ramyc store for details. All right, back to the phone lines we go where we have Anna who's in Greenville, South Carolina. Hi, Anna. How are you?

Hi. Um, so I'm calling today because I just need some advice on what to do with some the money that I just got from the sale of my home. Um, so I'm a single mom of three. Um, got divorced a couple years ago, but the house just it was a nightmare, but it just sold in September.

Um, and so after I got the money off of it, I ended up making um a little over 100,000 off of it.

Oh, great. I took uh the first thing I did is I went and paid off all my credit card debt because I had a lot of debt from the divorce process.

Okay. Um, so I have no credit card debt at all. Go ahead. Um, no. The only only two things I still have um on my credit, one is are student loans. I'm about 45,000 in student loan debt. Um, but I am a teacher in a title one school, so I am on the public service loan forgiveness program, which I know y'all speak about still trying to pay that off. Um, because you know those can be complicated. But I have talked with someone and I'm on the right path. I've been paying on it for five years. Um, and then the other thing I owe about $8,000 on my vehicle, but I have tax money coming in. That should be more than enough to pay that off. Um, so right now I'm renting um because that was the only option I had until the house sold that I could afford

and you know it would it is easier. Um, however, I would really like to be able to buy a home to where I feel like I'm investing in my future for me and the kids instead of renting. I kind of feel like I throw a little bit of money away. And I know that that's not fully the case because I'm not having to worry about fixing things. But I'm pretty handy. I can fix most things myself. Um, so I guess my question is, um, I don't think I'm quite ready because I'm not sure where where I want to buy a home at at the moment, but based on interest rates in today's economy, for me to have a home big enough for me and the kids,

um, I would have to put a h 100,000 down on something just to get the payments to where I can afford them.

Right. So Anna, out of the hundred,000 that you got, you said you paid off all your credit card debt. How much of that is left? Oh, it was like I ended up with like 112,000. So, I took that 12. I still have a h 100,000.

Oh, wow. Okay, perfect. Okay. Um All right, that's great. So, you know what we would suggest?

Yeah, and I think you probably know our answer to a degree of what we would do with this 100 grand. If it were me, I would pay off the student loans in the car today and then I would look to say, "Okay, I have, you know, you'll have around 40ish 48,000 left." And I would take that, I would put it um in a high yield savings account and I would just be making it a goal to be building that up because part of that 45,000 that's going to be left um is that right? No, no, no. I'm sorry. The 45,000 was your student loans. Yeah. Yeah. Well, it gets to be around 45 or so that you'll have left

once you pay the car off. Yeah. Um you know, part of that's going to be earmarked for an emergency fund and then start saving on top of that though. Um, and and it it may take you another probably 2 years, Anna, of renting to be throwing some money at this to be able to get to a spot where you're going to be able to buy the home that you want and to have, you know, we always say to have at least a 5% down payment, what percentage um when you say I would need at least $100,000, is that to get your payment to 25% of your take-home pay?

Yes. Okay. Yep. Um um the because a fourbedroom home in my area, you're not going to find one under 300,000. And for the for me to be able to afford the payments per month, I need it to be at at least 200,000.

Yep. So, so a couple of things in this. Number one, you know, you know, it may not be a four-bedroom home. You know, two of the kids may share a room. I shared a room growing up and a bathroom. uh you know, you may decide, hey, I'm going to value home ownership more than just the comfort of what, you know, my kids space-wise, right? Some people make that decision. Some people don't. Some people say, "No, we're going to save an extra year to make sure we get really what we want." Um, you know, but there can be um decisions you make along the way. I just don't want you to ever feel locked in that um I have to get this type of house in this specific area.

This has to be it. Right. I would I would broaden the horizons just to see if you're wanting to get into the house faster or maybe you have the patience to save another year or two.

Yeah, I I 100% Rachel agree with your plan and I I wouldn't change it at all and I would make it my goal if possible. You know, the best way to do this is on a 15-year. So, I'd make that my goal too if it's not already your goal. Um, but the biggest thing that's going to give you peace is having this debt gone and having that 3 to 6 months of expenses really between you and life, especially with three kids, is such a it's just a breath of fresh air to have that. So, I like the goal. Um, I like that you have 100,000 cash, but that's exactly what I'd do with it.

Okay. I have some money in an MMA account that's gaining like 3.5% interest. Um, I don't know much about the high yield savings account.

Is that what the hundred,000 is in? Yes. Okay. Okay. Okay. Yeah. So, it's same thing. It's in a money market account right now.

Yes. Yeah, that's fine. Yeah. Yeah. Money market and high yield are same pretty much same. Yeah. Yeah. So, that's but that's where where I would keep I wouldn't invest it because I think Anna, you're going to use this money probably in the next three to four years. And if it's anything longer than five, you could think about, you know, a brokerage account or an index fund or something. Um, that would probably make some more. But if you're going to be using it in the next 3 years, um, I would just keep it in that high yield and just keep saving on top of that.

I would too, especially knowing that really a portion of that is technically your your 3 to 6 months after you've paid off this debt. Having it liquid is a good a good place to have that as well.

Yeah. H, thanks for the question. Good question. All right, let's go to Braden in Philadelphia. Braden, how can we help today?

Braden, are you there? Hey, what's up? Oh, yeah, I am. Sorry. No worries. Hey, how's it going?

Hey, how are you? How can we help? So, um, I'm calling today because I've been doing the baby steps, but um, I've been doing, I guess, Ramsayish would be the word, and it's kind of not working out so much. Um, I'm kind of like still paycheck to paycheck and I've been budgeting and um, so I just had a couple questions about some debt that my wife and I are in. And I had my um, I guess my income up because there's a couple options. I I have a two-year degree from Pen College and pretty much I could go back for four years. I did do an additional two years and have a bachelor degree in engineering. I'm not sure how much that would help. Um, but I don't want to take out student loans on that either.

So, you're facing an income problem and you're thinking changing careers is the situation is the move.

Um, yeah. I mean, it would be more so the same field but a different job. It' be more engineering than like technician work.

Okay. What would Do you know what it would cost you to go back to school? And how much more would you earn by doing that? Um, it's hard to say. I think each semester is around 12 to 15 and it'd be another four semesters.

Okay. I'm not sure how much more I'd earn. Really depends on the kind of live in an area I'm a little bit outside of Philadelphia.

So, I I don't know what kind of work would be around here for So, I think that's where you got to start. anybody who's looking to switch career fields, um, and especially if you're looking to pay for school in order to do it, you've got to do that initial research to find out number one, if I go back to school, what's the earning potential there? Do I have a potential to earn just 10 10 or $12,000 more, or can I double my income? And then from there, it's like, okay, if I feel like the jump in income could be worth going back to school, now I have to go back and say, okay, how how much does it cost and how where can I go that's the least expensive route? How long would it take me to save? And then you're able to weigh out those really important factors. So, I think you have a little bit of research to do there.

Um, I'm guessing that you're feeling this because you guys are in debt. Am I right?

Yeah. Yeah. We got our kid now. We got a another one on the way with both super happy about, but it's kind of

Yeah. How much debt do you guys have? It's going to be um I think uh quick math around 37 I think.

Okay. Is that cars, credit cards? Um there we have a car on there, a few credit cards, a personal loan.

Okay. And that that's actually not not including our house. Okay. Yeah. Yeah. I hear you. We're about to go to a break, but I would say to you, I would encourage you and your wife, sit down tonight and just say, if we went scorched earth and did this Ramsay thing the real way, what would this look like to get us out of this mess? Cuz it's just kind of floating around. And then I would make sure to before you're even talking about school, you need a hard fact that you need a degree in order to get these other, you know, jobs, which you may, but I would want to know black and white like, yes, you absolutely have to have this four-year degree in order to have this job, and this job you're going to make $40,000 more. That's when you know it's a green light.

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That's fair winds.org/ramsey. Insured by the NCUA. So, if you've kicked debt to the curve, you deserve to celebrate on the Live Like No one Else cruise. Hang out with Dave in the Ramsay Personalities on March 14th through the 21st, 2027 in the Bahamas, Jamaica, Grand Cayman, and Cosmill. Cabins are limited. Save up to $300 off when you book by February 7th. Click the link in the show notes or go to ramseyolutions.com/events to book your cabin today. All right, that's exciting. I can't wait for that. We've got Yeah, I know. We've got Taylor who's in Fort Worth, Texas. Hi, Taylor.

Hi. I'm so excited to talk to y'all. Thank you'all for answering my question. For sure. How can we help?

Um, okay. So, I need y'all to help me solve a disagreement between me and my husband about how much to spend to upgrade my car. Yes, we love a marriage disagreement. Give it to us.

Y'all are perfect to help me with that. We can do this. Um, okay. So, a little bit of background. Um, we are on I think baby step four. Um, we don't have any debt. We're 28 years old, no kids. Um, we don't have any debt other than our mortgage. We have a small mortgage. Um, and we recently inherited um $100,000

from my grandpa. Okay. And so of that, we're trying to figure out how much we want to spend to upgrade my car. And it's definitely a it's a want, not a need. Um, so I'll preface with that. But my husband wants to spend, if anything, around 25,000, and I would like to spend up to 50.

Nice. That's a big difference. What kind of car are you looking at, Taylor? Well, that's the hard part. we really can't look at cars because we're at such a difference on price that it makes it hard. Um what we've kind of decided on is potentially maybe a Volkswagen Atlas. Um but of course the year really depends on how much we're going to spend.

Yes, for sure. For sure. And of course I think he's being frugal and he thinks I'm, you know, kind of spending too much and so we're just kind of at a disagreement and at odds.

Totally. Okay. If this if the upgrade of the car is it um let me ask this the current car you have are you like yeah I'm going to have to upgrade at some point probably in the next year or two or is it like you both have fine cars but you're like hey we got 100 grand and I enjoy a nice car. Which one is it?

Well, he drives a very nice truck. Um so I'll say that we don't own it. Um it is a business truck so you know that's it's not something that we own. Um, I drive a Mazda CX3 2017. It has about 100,000 miles on it, so it could definitely go for the next probably three more years.

What would go? So, okay. So, whether you spend 25 or 50, what what's the plan with the other money? Like, does it keep you from doing something else?

Not necessarily. My We don't have kids and we probably plan to in the next couple years. And so I think my husband is just like, we could spend that on the house to pay it off or on other investments in in the next two years. We're going to have probably a lot more expenses than we do currently. And he just feels like seeing it grow. And I mean, he just sees that big number and he's like, "Wow, we could do so much with that." Which I totally understand.

What's left on the mortgage, by the way? Um, around 200k. Okay. And how much do you guys make a year?

200K. Oh, wow. Okay. So you make 200. Yeah. You So you probably know our parameters on this. Have you heard of it?

Uh yes. So nothing more than 50%. Yeah. So we always say that things with motors really the whole family combined shouldn't be any more than 50% of your take-home pay.

And Taylor's at 25. Yeah. He's at 25. And I mean you could you could go up to 100.

No. Yeah. I was gonna say no. She's at 25 wanting 50,000, right? My math's right. If you make 200,000 Yeah.

a year and she wants to spend 50,000, that's 25%. Yeah. Of the take. So So she's way way below.

She's way below. Like even with his he's at 12% or something. That's what I'm saying. You got you guys have a $100 $100,000 window to fill. And so

in cars in cars and so you Okay, but here okay. So here would be the deal. I would say in order to feel good about you spending 50, let's say he loses his job and he needs to go buy something. Could he buy something for 40 to 50 that he would feel good about?

Well, he works for his his family's business. Yes. Well, no. Hypothetically, though, because

Okay. Hypothetically, yes. If he could, then together you guys are under the 50% rule. If you have a $50,000 car and he has a $50,000 car, you're at $100,000 of cars making $200,000. Does that make sense? So like you're good.

And you're saying as long as he'd have the ability to do what you're asking to do.

Yes. Yeah. Yeah. Yeah. To stay within those parameters then. Yeah. Because again, God forbid he loses a job, you know and

he needs a car. And he'd need a car. Could he do it within the parameters of the 50% total household of vehicles? And he could, you know, he could buy.

Do you take into account the inheritance at all or do you just kind of ignore that and think about

how you got it? Yeah. No, I kind of ignore it. That's just a cherry on top. the fact that you didn't have to save up for it.

Yeah. Unless Unless something in the inheritance says that they want this to go for your future kids college tuition or something. You know what I mean? And you're going against and you're like, "Oh gosh, that feels weird to do that." Yeah.

Um I mean, Taylor, I'm saying yes. I'm on your team, Taylor. Team Taylor. You know what? Maybe say 45 to give them like a little a little bit of a buffer. 48. But hey, but seriously though, research the cars cuz what you want in the year, you may find like, oh my gosh, I can totally get that for 43 and I and I'm great with it. You know what I mean? So, the research is going to help too. I think brings some of this just the idea cuz like just and I understand like golly, so on the pill of $50,000 to a car.

Well, is it used or is it brand new? Used. We we would buy used. Okay, just double checking that.

Yeah, I I am a green light. I think you called the right day, Taylor. If you got George Camel, I don't know what George would say, but he say yes.

I say yes. So, the key is now you have to get your husband to listen to this episode.

Exactly. I don't know. Yes. And you got to pay and y'all agreed. And you're married to him, though. So, there's, you know, you you committed your life to him. So, there may be a little give and take, but we would say yes.

Oh, wow. Congratulations on the new car. Oh, man. I love a call like that. Those are my favorite calls when we get to get in the middle and decide

and we get to and when we get to say yes to people because I feel like so many of the calls it's like dude you got to sell the car, you can't go on that vacation. No, you're broke.

You don't have money. You can't do that. That's I feel like that's a lot. So when we get to say yes because it's respons. It's fine.

Well, and I think it's a good it's a good reminder because a lot of people uh forget that we want you to be able to live like no one else. Obviously, we're telling people all the time, hey, cut back, pull back, get a beater. And it's really great to understand that these moments happen to every day. Yes. Where whether even if it's not an an inheritance, maybe you've just worked really hard and now you bonus or something. Yep.

Yeah. It's fun to be able to do this. And just the reminder, I think it's good to go back and remind folks who might be listening for the first time, you know, we're sticklers about this obviously because cars go down in value. I mean, you said it. You know, you drive a car off the lot, it could drop 30% so so quickly a year or two. Yeah. It's crazy. especially like with um EVs now, they're very like it's huge. And so the parameters are there really just to make sure too much of your world is not going down in value. That's so so important.

And so yeah, 50% is the rule. And then I asked her earlier about if she was buying a brand new vehicle because we even have a parameter there that really you should have a net worth of a million bucks before you purchase something outright because again, brand new vehicles drop in value so quickly. And I've heard Dave say, you really want the feeling that if I took that amount, that value that it was going to drop and I just put it in the street and burned it, I would feel nothing, right? You don't want to be attached to it in that way.

And so that's kind of they're parameters, they're guidelines, and they're there um for you guys. Yeah. Just to help you.

And whenever you get a big sum of money, too, we didn't really touch on this earlier, but really we always say there's three things you can do with money. You can give it, you can save it, you can spend it. And I think doing all three in a situation like this, I think is I think is important. And so, you know, if we were still chatting with her, I probably would tell her, "Hey, take some of this, give a little bit of it."

That's true. Yes. Put some in savings for the future. Spend some on you. Like, you know, there's a there's a threeprong to this money stuff. And some seasons you're going to be saving more, you know, for something, for a down payment, for a house or whatever it may look like. Um, you know, some seasons you're going to have tons of generosity flow through you and you're able to do a lot, which is amazing. And then some seasons you're going to be able to enjoy your money. So you it doesn't have to be like a a equal split between the three every single time, but just be aware that that's how money flows and and it should be flowing at some level of all three of those buckets.

Yeah, that's what you're looking for. I love it. Congratulations on the new car. I hope that your husband gives you zero problems because we agree with you wholeheartedly. Heat. Heat. N. Today's question of the day is brought to you by Y refi. Defaulted private student loans don't fix themselves, but they can be fixed. Y Refi helps you by refinancing defaulted private student loans into a low fixed rate payment that fits your budget so you can clean up the mess and move forward with a plan. Visit yrefi.com/ramsey.

That's the letter yfy.com/ramsey. May not be available in all states. Today's question comes from Jenna in Michigan. She said, "Your podcast inspired my husband and I to start the baby steps and we've made so much progress. I'm expecting our first baby and we'll be having a baby shower soon. As a new mom, I feel pressure to get the nicest, which means most expensive items, so my baby can have the best things. With all the talk about how there are so many items you need, what advice would you give a new mom wanting to be smart financially, but feels the pressure of needing to get the new things her friends say are important?

Oh, that's a great question. Well, you asked two moms, so we can uh we can attest to this.

Um, yeah. I mean, I do feel like people go crazy on the first baby. You're about to have a shower, so I'd say register to your heart's desire. You know, put put stuff on the registry, see what you get.

And then I know the money coming out of our pocket where we spent the most, and we did, we invested in a good stroller. Yep.

And a good car seat because those things lasted through three kids. And if you know baby stuff, toddler stuff, I mean stuff gets beat up constantly.

Oh yeah. So we did we bought the nice I mean we did it was a very very very nice stroller car seat set. But everything else we went cheap on to the the the high chair, the crib, like all of that stuff like did not it was the thing like what's going to get the most wear and tear

that I would want to um keep for the next kids, right? So it's like kind of that's how we made that decision. Um yeah. So I think it's the two things. I think it's being practical and and buying the most expensive item sometimes is worth it because it is the nicest and it's going to last you. And then but then the other side of that prong is the um is the keeping up side of feeling like you have to keep up. And let me tell you,

you're going to buy something and then six months later they're going to come out with a better thing of that. I mean, it just keeps going and going and going and all the crap that is out there. It is like I swear it's like the wedding industry.

The baby I mean it's like billions of dollars. been so much so much. So, I would not Yeah, I would not feel the pressure. Um, it's easier said than done. I mean, just saying this over a microphone. I know it doesn't help you, but I do want to relieve like once you get past it all, you're not you don't even remember like you don't even think of like, oh my gosh, did I get the best

bottles or pacifier, whatever. You know what I mean? I will say our stroller I wish I had made a different choice to this day.

Did you Did you buy a nice one, but you didn't like it or what? It was. And I it was the one everybody recommended and I honestly didn't do a ton of my own research. I just went with what was recommended and I hated the stroller. But I'm with you, Rachel. I Sam and I picked like four or five things that were really important and they obviously happened to be the most expensive ones. But when we put them on our register, our registry, we kind of had the idea that, you know, most people probably aren't going to get you a $500 gift. So, we kind of knew we'll probably be on the hook for that or maybe we could use our gift cards towards those things. But, we kind of knew like we'll get the expensive stuff likely and everybody else will get all the other dads. But

the best thing I bought and I want to hear what you think the best I sock the Owlette sock that goes on their foot

it it measures their breathing so you don't have to like worry about like is my baby okay, right? like that. That's the main thing that I would get up in the night to just be like, I just need to make sure that they're fine. But it measures it's a little thing that goes around their foot and it grows with them in infancy and it measures their O2 and like

and it goes off if for some reason they've rolled over on and they can't breathe. So,

yes. Oh my gosh. Best purchase ever. Yeah. Peace of mind. I don't even know if they I'm trying to think. I don't even know if I knew that.

Yeah, that we had that. Maybe back in your day. I know they had that. I know. Um Oh, that's so funny. Yeah, but there's so much so much crap I feel like that they just Yeah, it's so marketed to. So, just make the decision. Go to consignments for clothing. That's what I did, too. I found a few places in Nashville did consignment. That's where I bought so many of the kids babies.

The baby is none the wiser. Make the things that make your life easier. That's what I'd say.

Yes. Amen. Hallelujah. Alrighty. Craig, who's in Salt Lake City, Utah, is on the line. Hey, Craig. How can we help today? Well, I've I've got a a business, a construction business, and over the last couple of years, I've had a couple of jobs that have went a little south on me, and I've taken out a a business loan from my bank, and I've also got a cash flow to ride the incoming, outgoing, and my overhead during between payments. Um, well, over the last couple years, I've managed to get myself about 240,000 in debt, and my payments on the cash flow in the business are about 4,600 a month. And we took out an equity loan on the house

to pay down some of it. But right now, I'm sitting at about with all my bills, everything, I'm about $9,800 a month to just cover my overhead. And we we owe just under 300 on our house. It appraises for just under 600. And I'm wondering if if it would be a good idea to sell the house and pay off this debt or whether I should just keep trying to pay it and make headsway or I'm worried that if I sell the house now I got to buy another one and I'm not going to get my payment is only 1,800 a month.

Well, how much was the home equity loan? Like how much is that going to cut into the 600 that it's worth?

Well, I we it was 109. Okay. Okay. For the home equity loan is what we got. So you still owe 300.

Is that correct? Yes. So it's about 400,000 in debt. So you'll net out around around 200.

Yes. Okay. So tell walk us through the plan. Is the plan to take the because if the plan is to take whatever equity maybe you walk away with 170 after all of this, I don't know. Uh what's the plan with that 170? Is it to clear business debt? Is it to roll it into a less expensive house? What are you thinking?

Well, I my my lease payment on my shop space is about 2,400 a month. And so I would take this if we sold the house, I would take this and clear the business debt, but I still have to have shop space because I have a bunch of equipment that I need to have running to stay in business. Um, can you clarify for me when you said earlier that you had 240,000 in the business, is that including the 109 of the HELOC or is that in addition to

No, that includes that. Okay. So, it's 240 total or is it 349 total? Yes. No, 249 total with the with the house loan and the cash flow and my business loan. So, you would take the the the 170 and you would throw it towards all of the all of the cash flow loan.

Yes. Okay. Yes, we're we're able we're able to keep up with the payments. I mean, it's tough, but just those two, the loan, the business loan and the cash flow is about 4,400 a month. uh my business. I mean, I'm able to generate that, but I've had to let a lot of the employees go because I had to

cut payroll, increase my overhead. Yeah. And so now I'm doing everything myself. So,

is the business do you see it having an upward trajectory or is it flatlining? Is it going down? Where like where do you project revenues to be in the next 12 months?

Well, I stay I stay pretty busy. Um I average Um, I don't know. I I would probably average in the next year maybe 200,000.

Okay. In volume. So, it almost feels like you grew too big too fast. Like you created a world that you can't sustain.

So, yes, you selling your house is making a huge I mean, you've already taken out a home equity loan. If you sell your house and then turn around and take the equity and run it back into this business and it's still not even fully clearing the debt, I'm afraid of that because it's only going to clear out some of the cash flow loan. You're you still have this business loan over here that has how much will be left? Well, we we figure after the sale of the house, I would have um probably about 40,000 in the business loan, and that would be the only the only lo, you know, the

Yeah. So, unless I would need to pay off, I would sit down with your wife and unless y'all had an aggressive growth plan to get a house again in the next 5 years. Um but man, yeah, I

I'm not sure. I'm not sure about this business. I might sit down with um I might sit down with somebody who could give you some input on how the bis the health of the business and maybe get connected to our entree leadership coaching and see what they tell you about this business cuz I'm not convinced you need to keep it.

Welcome back to the Ramsey Show in the Fair Winds Credit Union studio. I'm Jay. Next to me is Rachel Cruz. We've got Lauren who's on the line from Tampa, Florida. Hi, Lauren. How can we help today?

Hi there. Uh, so my husband and I are expecting our first baby come spring. And we're trying to decide whether I will keep working full-time, move to part-time in a different role, or step away from the workplace totally. So, we're just like wanting some help weighing the risk risk versus reward of one leaving the work workforce

and like what what to do to re you know reduce the hours for a season and just all that that comes with it.

Totally. Well, congratulations. So exciting. Um what would be the main motivation for you to change? Is it anything money related, financial related? Is it just your longing of, you know, wanting to be a working mom or not be a working mom? like what's pulling you the most?

I think the main thing is leaving my leaving a baby with daycare for 5 days a week seems really really hard. My husband isn't he's he works in law enforcement so he's on 12-hour shifts, right? And he might be moving

back to night shift come, you know, springtime when the baby's due. And so that's also kind of a factor like could I be solo parenting for days at a time while he's working night shift and then sleeping during the day and then I'm having to do

overnights and daycare and all that on my own. That's a lot. Where are you guys at financially?

We have no debt. We Yeah, we have no debt. We just just our mortgage. We could live off of one income. Right now we aggress um we invest pretty aggressively. So, a little bit more than like two grand a month into like retirement and um like a like a brokerage.

Okay. So, is is that 15% or is that more or less or do you know what percentage that is?

Uh it's more than 15% of our take-home. Okay. What do y'all bring home a month?

Uh per month we bring home about a little bit more than 9,000 between the two of us.

Oh, yeah. That is more. Okay. Um and what would it be if you stopped? Well, that's that's a good question. So, I'm I'm currently full-time engineer and so I haven't had the conversation yet with my employer of what uh part-time would look like. Um I know I could not stay in my current department. So, I'd have to either switch departments within the company and and take a pay cut to go part-time or just leave the company altogether and find a different part-time role.

What does your husband make? What what's what's his income of this 9,000? Um well, he makes about 96 a year and I make 94 a year. So,

Okay. Yeah. So, could y'all live off of 4,500 a month comfortably? Like mortgage and food and you know, you guys are in a good spot.

Yeah. Yeah. Mortgage and food, but we would have to really decrease our our investing.

Sure. Okay. Yeah. Well, you're in a The good news is you're in a really great spot to just choose. It's not You're not Your back is not against the wall. There's nothing that's demanding attention financially. You're doing very very well. Um and the biggest red flag is usually can we afford the mortgage? uh like this. And I'm just curious if you went down to 4,500. I know you'd be working part-time, but just curious, what is your mortgage every single month?

Uh it's about 1,800. 1,800. Yeah. Um I think that with you even bringing in a little bit, you'd be okay. So,

do you want to work, Lauren, or do you want to be home? I think ideally I would like to work part-time just to be able to contribute financially to the to the family, but then also like have time at home with with littles cuz they're only little ones. Yeah, for sure. Well, here's the great thing that I I feel like I've learned in this of having three kids and and working is different seasons are going to bring different things. And it's okay for you to make a different decision. So, I feel like sometimes women feel like I have to make this call and it's going to be my life forever.

And that's not the case. That's that doesn't have to be. You know, you could you could choose, hey, I just want to be home full-time. That's great. And then you may get in six months in. And I had a friend just like this and she's like, "I'm going crazy. Like

I want to babysit her so that I can go and like do something and and just to like um and to use my talent." She was really talented and she missed that part of her. You know, she really did feel like there was something God has given her and that part she didn't have. And so she's like, I kind of wanted to do both. And so she figured out a way to do both. But she changed her mind, right? Or some people say, "I'm going to go back to work." And they get in. That happens a lot here at Ramsey with some girls, you know, they haven't been. And especially your first, you don't understand how it feels. And you and you think, I'm going to come back.

And then you get back in the swing. Yeah. And you're back in and you're 6 months in, nine months in, you're like, I hate this. I want to be home. Guess what? You can quit and do that. You know, so like just know because of this financial situation you guys are in, which is such a blessing. What a gift is that you can you can make a different decision. So, you know, if your knee-jerk right now is, hey, I think I do want to work part-time. Yeah. Start talking to your employer about that and start making plans around that. And then Lauren, give yourself permission that if you're in the six months and your husband's working night shift and you know, life is just hard and exhausting and you're like, man, I just want to be home and do the home thing.

You can make that decision. You know, it's not an all or nothing. Yeah. So now what about like leaving the work for? Like I I I guess one of my fears is leaving the workforce as a woman for a period of time and then not either making as much as I make now or like I guess never I guess never being as professionally leveled as I am now. Like if I am to leave and then come back.

Yeah, I could be I could be wrong on this. So Jay, if you have a different opinion, I think that is something that to a degree we've kind of like created this fear in our heads to feel like we can't have an off-ramp. So we have to go go go. But I've I know many women who have offramped a career for four to five years

and get back in when the kids are in school and it takes a little bit to get back in but like they do it and they and they've th they've been fine. Now that may not be the case every single position or every single company. Um

but for me that that fear of it not being an absolute there's not like a law, you know what I mean? It's it's more an idea that that can happen.

Yeah. That would that would not be my motivator because it's not a hard fact. It's a fear that's not always realistic.

Yeah. And I think it depends on what field you're in. It could be something that if you're keeping up like if you're just keeping up, whether it be certifications or you're just keeping up with new improvements, you know, how how that that particular field is shifting, just being in the know could help. Um, and there's a big part of this where the there's also the assumption that, okay, let's pretend you're you're a stay-at-home mom for 10 years, right? and you're thinking, "Oh my gosh, after 10 years, will I really be able to get my old job, right? Be be in my old field." Who's to say you would even want to do that type of work? So, even you changing as a person to saying, "Hey, I may want to go back to work, but not necessarily what you were doing before."

So, also giving yourself the ability to evolve in the career space and maybe have a completely different act and do something totally different.

What the world's going to look like to in 8 years, you know, is wild. Yeah. So to your point, the fear part there, it could really be unfounded because careers could change, you could change.

Yeah. Yes. It's a lot to think of. Like this is a huge choice. And hopefully that Rachel and I just gave you a couple of thoughts just to push you in a direction, but it really is a big choice.

Yeah. And and you're never in a corner though, right? You It is a big choice. But we have multiple choices you get to choose from. you know, any any given month you get to it's your life, you know, you get to make that call.

Um, and none of them are con like none of them are for life. You always That's right. seasonal. It really is. It's so seasonal. Like what I mean, I know I pulled back some after I had Charles cuz I had three kids under five and I was like, I can't do the travel I'm doing.

And I did pull back and I did I watched people have um books come out that hit higher than mine. pod my podcast when you know I saw other people's shows do better and you do you kind of sit on the sideline for a season and now that they're all fully back in school I'm like oh my gosh I like have the ability to do more and it's great you know what I mean and I'm not saying my situation's exactly going to mirror every single person but but that is what so many working moms I talked to when I was just in Lauren's position with before my first that's what they always said it's so seasonal and it is after being through a couple of these seasons with kids it is life is so seasonal as a mom so give yourself permission to be presently where you are cuz I really do think that's where God and the Holy Spirit has you.

If you've been working the plan, paying off debt, saving, and changing your family tree, I'm proud of you. And if you're in Baby Step 4 or beyond, it's time to celebrate. The Live Like No One Else Cruise is back March 14 through 21, 2027. Join the Ramsay personalities and me as we sail to Half Moon Key, Cosm, Jamaica, and Grand Cayman on the ultimate debt-free vacation. Cabins will sell out just like last time. Lock in yours with a $600 deposit at ramseysolutions.com/events.

One of the best things to do for your finances is to have a really good tax pro in your corner that you can trust. They'll help you. They'll help advise you on the best moves to make for your situation or for your small business, especially if you've had some big life changes in the past year. Go to ramseysolutions.com/taxpro to find CPAs and enrolled agents that have been vetted by the Ramsay team. Very, very good. All right, we've got Mark who's in Indianapolis, Indiana. Hi, Mark. How can we help?

Hi. How are you doing? Good. What's up? Hi. Um, so my wife and I bought our first home recently about a week ago. And um the thing is that the seller had agreed to fix a few items um from the inspection report and uh we we've taken a look at at the fixes and we've had a few issues going on um this week and we're not really sure if we have any recourse that we could do or anything that we could do after closing on this house. Now

what what are what are we talking about? Tell me what the items are. So, um, the sump pump was not operational. Um,

what's not the pool? What' you say? Sump pump. Oh, sump pump. Okay. I'm sorry. Go ahead.

Yeah, the sump pump was not operational. And they they agreed to replace a sump pump, which they did. They did replace a sump pump, but in doing so, they did not connect the the pipe properly.

And the the day that I went um the day that I went right after closing, there was water flowing everywhere and it go the flooring of the basement. And then we also have a garage door situation that they put on a new door, but they the the um they half-heartedly did it because um

there's still the old tracks and the old pieces from the Yeah. They used So they use some crappy person to you know that did crap work on the repair. Yeah. It's in the contract, right, for it to be

fixed and they didn't fix it and it's not fixed. So yes, force that. Absolutely. And it's just been a week, right, Mark? It's not six months. Yes, it's been a week. So, that's what we're wondering. Like,

I would talk to your realtor and go back. Yeah. And absolutely that they I mean, you have and you have evidence. Did you take pictures?

Yeah, I took pictures and I took videos. I sent it to my realtor, but there's just it's just been crickets on that end. So,

from your if someone's scared. Yeah. From from our realtor. So, I'm not sure if someone's just if they're just busy or they're just scared to be bothered. I don't I don't know what's going on. Yeah, I'm not sure what's going on.

I'd show up. Do they have a place that you can show up to? It's about a 30 minute drive, though. But I I mean, we're we're willing.

I would I'd show up at their realy office and say, "Hey, I've been working with Bob and I just closed on my house and this is part of my contract and it's not been done and I've been trying to contact Bob and he's not re answering my texts or my emails or my calls." That's what I do. Okay.

Yeah. And then I Is it likely we'll be able to recoup anything? Yeah, it's in your contract.

That that that that's that was a uh part of the deal of this being a fair deal and they did not do it.

And if they don't do it in the next 72 hours and answer, you're going to have to get it fixed. And when you get it fixed, you're going to bill it to them.

Along with a letter from your lawyer. Yeah. It's in your contract to fix it and they didn't fix it properly. So they have to go back and fix it. So yeah, no, that you definitely have a level of recourse. Now could is there a world that nobody answers your call, Mark, and everyone disappears and you can't find anyone? Is it worth pushing legal action at that point? You'll probably pay more in law fees than to fix it, right? So like there's a point

there's a world that yeah, you end up just having to fix it yourself. But I would go to every single measure possible. um yeah to get this cuz that's so that's so unfair just to do a crappy job on the fix just to say to check off uh check it off to get the contract through. So

terrible. The worst part is having to spend the time and the effort and the brain power on this. Sorry you're going through that, but thank you for the call. Next up is Katie in Dallas, Texas. Hi Katie.

Hey, thanks for taking my call. Um I'm 44, my husband's 46. We currently only have 80K left on our mortgage. We have no other debt. We are interested in purchasing a newer home, bigger, more desirable area, which would leave us with a newer mortgage of about 250K after about a $250,000 down payment. And I'm just wondering if this is financially smart. I think number-wise, it's doable. However, emotionally it feels a little bit more um challenging to move forward with this.

For sure. or how much you guys make a year? Close to 200. Okay. How quickly could you pay the 250 off? Do you think if you like really if you guys said, "Okay, paying off the house is a priority to get this mortgage down." How quickly do you think you guys could do it?

Honestly, I don't think it would happen very fast. Maybe 7 to 10 years. Okay. Um,

what do you just feels Go ahead. It just feels like we wouldn't be able to I'm going to say build wealth as far as contribute more to the 529s, more to the 401ks doing this.

How what percentage are you doing for you're doing retirement now? Are you doing 15%.

Um my husband and I are each both doing 10%. Okay. And how long what do you have in there? What do you have in retirement so far?

About 550. Okay. Um so that'll double. Yeah. I mean that will that'll double every seven years. So you guys I think will be fine at retirement. And people that are doing you know the baby steps on average they pay off their home in about 9 years. So let's say that's you guys you know then you'll be you know your husband will be 55 you'll be um 53 with a paid off house. Um, so I think the numbers I don't I don't think it's absolutely terrible, but but you know, big purchases like this, I always want to check my spirit in it and ask like the motivation of it, right? Is it to be

closer where you guys want to be? Is it for the schools for the kids? Is it in a newer newer neighborhood, a bigger home? You know, kids in the neighborhood that are friends with kids.

My kids. Yeah. Totally. Yeah. So, I mean, yeah, it doesn't that doesn't absolutely scare me. I just want to make sure you guys as a household can fund

15% of your income into retirement. And I don't want the kids colleges to go on complete pause because you guys wanted a newer, bigger house, right? So, from a legacy perspective, I do think there is um some level of saying, hey, we are going to have to contribute and make sure the kids are good with college and do this. Can we do both? because choosing one or the other feels

maybe a little off. And I'd also ask myself the question because when I look at this my brain goes immediately to oh my gosh you only owe 80,000 on your mortgage. Now I'm just throwing this out there. Um the question I'd ask myself is if our house were paid off, would I still be interested in getting a 200 two at that point maybe a $200,000 mortgage on a house or would I be like no way my house is paid off. I'm good to go. that that that'd be the question that I'd spend a lot of time with. And you might be like, "Yes, Jade. I am ready to go."

Yeah, it does seem like we're almost towards the finish line. Yet, we've been looking at houses for the past decade.

How much is How much is your current house worth? Um, about 280. Okay. And what are you guys looking to upgrade to?

The sale price is $4.95, but we put down about 55%. Oh yeah. Yeah. I I think you guys are fine, Katie. I mean, as long as you Yes. the payment, you know, no more than 25% of your take-home pay so that you guys can invest

in retirement, kids, college, all of that. So, it may be a season of decreasing lifestyle a little bit. Yeah. And and pulling back from Yeah. I want the household to be investing 15% and you guys are at 20 right now. So, uh just be thinking about that. So, pulling back will help with this and to hopefully maybe get it paid off sooner. But um but yeah, with your ages, income, what you're putting down, I mean, they're putting down 55%. Like I think

you're doing everything right and above right in in that in that perspective. The biggest thing is making sure and I'm assuming that you guys already do have some sort of uh emergency fund in place, but making sure you have the right amount of emergency fund because now with a bigger house payment, that amount needs to go up to match that new lifestyle obviously. So just some little things to keep in mind. Um, I love that you mentioned the 529s and making sure that college is still a priority because

very, very important. But other than that, I'm like, let's go. It's great. Welcome to 2026. Last year is officially in the rear view and you're fired up to finally make some changes with your money. New year, new goals. We love it. But let's be honest, old you said the exact same thing last January and the January before that. And before you know it, those money goals fizzle out faster than the fleeting flavor of Lacroy. So here's the truth. New year motivation only gets you so far. You need an actual plan. And the good news is you don't have to figure it out on your own. Every Dollar builds a personalized plan based on your goals and your real life. And it actually coaches you to stick with it.

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So, just a reminder, so much of what we teach here is not just to make your life difficult by saying that you need to cut back on your budget or you need to sell your car. The whole purpose of this is so that you can live like no one else, so that you can achieve financial peace. And of course, that does translate to numbers. The hope is that you'll become a baby steps millionaire. And a baby steps millionaire is simply someone who has, you know, used our teachings, the baby steps and all the methods associated with that, and they've achieved a net worth of a million dollars or more, which when you think about a net worth equation, guys, it's what you own minus what you owe equaling a million bucks. And so, we actually have someone on the line who has accomplished that and we want to celebrate them. We have Kelly who's from Oklahoma City, Oklahoma on the line.

Hey Kelly. Hey, how you doing, Jade? What's going on? A million dollars. Tell us more.

Um, well, yeah, a net worth of $2.4 million. Wow. And, um, I'm 57 years old. My wife is 49.

And we inherited 0 and0. Every bit of it we've done ourselves. Incredible. What's the 2.4 consist of?

Okay. It's uh, I got 1 million. We got 1 million in retirement. That's I rolled over TSP. I was uh in the military.

Okay. And then her 457. We got Roth. It's mostly an index funds. There's a little mutual funds in there.

Yeah. And then non-retirement, we got our emergency fund of 30,000. And then we put 260,000 in highpaying dividend ETFs. My wife uh is uh really into that and it's paying dividends.

That's great. And then we've got 890,000 in a brokerage account. Wow. And then our home, which we paid cash for in 2015, is worth about 200,000 now.

That's amazing. Well done, Kelly. That's amazing. So, what kind of work do you both do? I mean, you mentioned the TSP and mentioned the military. Tell us about that.

Yeah. Well, I'm retired military and my wife is still working. She's a nurse. Okay.

So, she's been able to work quite a bit of, you know, overtime is always there for her.

Yeah. That's always one of the top careers we hear from people um that achieve a millionaire status is Yep. is uh Yep. in the medical field in that way. Um okay. So, how long have you guys been married?

We got married in uh let me think here. 2006. Okay. Okay. Okay. Great. So what would you say maybe not as a maybe not as a married couple but as a you know while working what do you think the worst year um financially how much did you make and then what was your best year and same with her if you know off the top of your head I'm just curious

well when we first got married she wasn't working because she uh immigrated here so

okay yeah I probably made probably like I was making 3540,000 in a year. Okay. And we were we were deeply in debt. I was deeply in debt. Take that back.

So, um Oh, so you brought most of the debt into the relationship. I brought all the debt.

How much? You know, oh boy. How much did I have in debt back then? It was probably uh I had student loans, car loans, personal loans. I had it all. Yeah, I mean it.

Yeah, it was probably close to uh 90,000. Wow. So, going from a negative net worth building it up to 2.4 million, what would you say the key? What were a couple of things that you did that you were like, this was this was a game changer for me.

I think the game changer was realizing that I had got myself in the mess and it was me that's going to get myself out of the mess.

That's so true. Yep. the personal responsibility aspect of it that you're going to be the thing that changes it. Yes.

And then I mean obviously you know you've got the spouse that's such an important part your partner and and accomplishing all this. I mean what would you say to the person? I mean we get calls all the time who they're trying to decide should I marry this person or maybe they're newly weds and they're trying to figure it out. What advice do you have for that couple?

Oh for a couple uh one thing is you both have to have the same principles and values. you know, as far as money goes, if if someone just doesn't mind being in debt and doesn't plan and doesn't set goals, I think that's a red flag because it's going to be a one-sided marriage and you're going to be carrying you're going to be carrying the burdens.

Yes, absolutely. Yeah. Absolutely. So, you never gave us the top number. So, the lower number was around 35. What did you guys get up to in order to accomplish this income? probably just uh just recently because with our dividends and that's one thing that changed was the Robert Kiyosaki book when I read that and it said that the wealthy don't work for money their money works for them.

That's what we've been able to do is increase our money our income by passive income. So now it's about 150,000.

Wow. Way to go. Well done. Way to go. But during your during just your working lifetime, did you guys ever break 100 grand? Would you say

we did towards the end of my okay military career but that was only like you know within like uh maybe like a uh two three years ago.

Yeah 100,000 that's what's impressive and I think what a lot of people need to hear is that you know your income is powerful right it helps but you don't have to be making $300,000 a year to become a millionaire. Absolutely. you could be making under six figures, right? Like just like Kelly, you and your wife did. But it's the diligence. I mean, the amount you guys have in investments, whether it's ETFs or, you know, your um you know, your retirement, you have almost a million in retirement. I mean, all of that, like that stuff adds up.

And it's just the consistency and the diligence of what you guys did. Again, you guys weren't making 300 grand, right? You barely even hit six figures just, but that's only in the last few years. That's not what created it. It was the consistency of the investing and you guys being wise and paying off your home and all of it. So, absolutely

well done. So, so well done. And just curious, what did what role did the budget play for you? Like, were you budgeters or how did you do this?

Well, the budget is we uh we tracked every expense. I mean, we really uh we really really were diligent. We really were intentional. And I've known a lot of people, like you said, they make a lot of money, but they're broke.

Yep. Yeah. So, you know, basically we made sure that after, excuse me, we paid ourselves first. Like they always say, we made put money into our investments first

and then what was left, that's what we used to pay our living expenses. So, if we had to cut back on certain things, we did.

Yeah. You know, but we're we were buying our freedom is what we were doing. I love that.

Well, well done. Well done, Kelly. And to your wife as well, what's her name? Uh, her name is Eg. EG, well done, Kelly and EG. You guys are an inspiration. And what I really truly love about your story is that so many people think if you walk the baby steps, you you're g you're you're going to be an old man by the time you're a millionaire. And I just love that you guys are young. I mean, you've got your whole life in front of you. And what's you know, you've just you've got, like you said, you bought your freedom and you've got your time back. So, well, well done.

Thank you so much for calling in and encouraging everybody. So, so good. Thanks, Jade.

You bet. You bet. Well done, Kelly. Well done. I love a call like that, Rachel, because it just it's so inspiring for people to actually see what's possible if you walk in.

Well, and especially him, right? He's 57. So, we'll make up an age of when he started all this. I think he said it was about 20 years ago, right? So, he's 37 $90,000 in consumer debt.

And it just shows that you can still make the change, right? Wherever you are, you can still make the change. And he went from nothing a negative

Yes. Uh deeply in debt, you know, nothing. No one gave them a hand out as you said like no inheritance inheritance.

Um but it is it's the consistency of what you're doing day in and day out. And you know we're not as blunt to say like you know you have to do retirement first before lifestyle necessarily. We are big on like you know you want to you want to give save and spend. And so um but that idea that my future's worth it that I'm going to I I'm going to make that the priority not the lifestyle today that's a that's a different mindset than most people. Most people they want to feel good today, right? And I and I get that, right? But at at at what expense?

Yeah. At what expense? And what it is is not sacrificing what you want mo most for what you want now in the moment. And I love that. You know, I think the number one advice that I give to people is guys, the time is going to pass anyway. If you're 30, one of these days you're going to be 50. And if you're 40, one of these days you're going to be 60. And what you do with that 10, 15, 20 years, it matters. And usually, here's the thing, it really is just like a 2 or threeyear window that if you can just pour on the gasoline and do what you need to do for a very short period of time, it affects that entire 10, 15 year, 20 year window substantially. So, please, please, please let Kelly and I believe her name was Eig.

I like that. Let that be your inspiration. If you've been on the fence, come on, get started today. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsay. Ask your money question and get answers built on Ramsay principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseyolutions.com.

All right, our Ramsay scripture and quote of the day. Proverbs 12:11 says, "Those who work their land will have abundant food, but those who chase fantasies have no sense." Thomas Jefferson said, "I'm a great believer in luck and I find the harder I work, the more of it I have." So good. All right. Adam is in Detroit, Michigan. Adam, how can we help today?

Hi. So, I am in an interesting situation. I have a job offer which would move me out of state into Indiana. um where we are looking to sell our house and use the money from our house debts and then live with my in-laws for a couple months. And I just kind of wanted to get uh your opinion and some non-biased thoughts on if this is a good idea, what should I be thinking about?

Well, financially. The first question was if you use the money to pay off the debt, why wouldn't you just rent an apartment or rent a house? Why would you have to live with the in-laws? Um they they're they have a very big house. It would save us additional money where we could basically put my entire check to the side where we wouldn't

be, you know, spending just to spend. You know, that's why I don't want to get into renting again. I think it would

How much debt do you guys have, Adam? Uh including my student loans, about 40,000.

Okay. And um how much would this um if you did was it you you were selling? Correct.

And how much would you get from that? Uh I would say after uh the sale of the house and realtor fees and all that probably about 90k.

Okay. Okay. So you clear the debt and you're left with 50. That's your emergency fund. And the

How much do you guys make a year? I'm sorry. How much do you make a year? I make 100,000.

Why don't you just pay off the 40,000 and stay in your home? Uh it Well, the job moves me. Um

Oh, that's right. You said that. Oh, I'm sorry. You were moving. I'm so sorry. Yeah. Yeah, I got you.

Okay. So, once you take the job, you'll be making $100,000. You'll have no debt plus $50,000, part of which would be your emergency fund. I just How old are you guys?

Uh we're both 29. We turned 30 this year. Do you have kids? We have three kids.

Oh, man. I just can't see why you would need to live with family because you'll be in you'll have no debt. You'll have plenty of savings. Get your own spot.

Are you are you um are you guys familiar with the area? Like would you want to know when when you buy a house where you want to be?

Yeah. So, I mean I went to college in the area. My wife is from the area originally.

Okay. So, we're very familiar. We have a lot of family and friends in the area.

Okay. Um, do you um My main thought was to, you know, take a couple months to basically save up for 20% down on a house that we want.

And how Yeah. How how many Yeah. How long would you be there, would you say? Uh, we said max 6 months we And that's why I want to be smart about how much I pay off.

So, versus how much I keep to the side. Here's where we always I feel like I don't know, especially Jade and I like we're on the same page with this. Well, we always kind of caution against the idea of just moving back home or moving in with, you know, the family. Um, because for the most of the time, people just have this vague idea, hey, I'm going to move back home to pay off debt. And then you dig into the numbers and they've been home for six months, like, well, how much are you saving? Like, well, I, you know, I've actually gone $2,000 in credit card debt or whatever. And you're like, how have you gone in debt when you're living at home and you're saving money? Because they don't really do it, right? they just kind of have this idea of it. It's not driven. It's not specific. There's not a timeline. Um, so the only reason I would be I would somewhat entertain it for you guys in this situation is it's

short enough. It's 6 months and to move somewhere and move out and get a six-month lease, you know, might be somewhat of a headache. Um, you know what you're going to be putting away. And I would just say if you choose to do this, be be diligent about it because I do think living with family over the long term, it just can erode the you know what I mean? Like there's a tension point to it

and it's five of y'all that's a lot. Yeah. Yeah. So if you guys know for sure there's an end timeline. It's no more than six months. We're going to get because we're moving anyways. Like I don't know. I I would be I would be somewhat okay with it, Adam. Again, you guys have to be diligent cuz some people get in these situations and more than like or more than what we see. They just get lazy about it.

Sure. And they don't really put what they think they're going to put away um and all of it. So, you just have to be diligent. That's my word of caution.

Yeah. I I think the one the one thought process we had is my entire check which I which is about 6,000 a net a month.

Mhm. Uh I would set the entire 6 grand off to the side and it would just go into a separate account with the 50k that we have left over.

Yeah. And my wife's account would pay for the car payments and the car insurance and all that stuff.

Car payments. I thought that you were would be totally debtree. Uh they I have two leases. So those those I didn't include those in the 40,000.

When are those leases up? Uh her lease is up in May and then mine has another two years on it.

Oh boy. Are y'all going to be paying for it to to to own the car? Are you guys just done after the lease and have to, you know, buy a new car?

Uh we talked about possibly buying out her lease on her car and then um soing from there. those act obviously add to the timeline.

So, I mean, I would sit and and plan that out because obviously my next question for you before you said the lease was going to be how much do you need to save up for this down payment? Like, what's the exact number and run that back? But now you have to add in, okay, what is it going to cost to possibly buy buy out these leases or what's it going to cost at the end of the lease to now buy something in cash, right? So, those are real numbers in the higher thousands to be aware of. Um, and that could really set this on a longer journey. So, if you had to spitball it right now, what would you say the cost car-wise is going to be for you guys?

It's a great question. I know like our monthly payments right now is about 800 between the two cars.

Between the two. Okay. So, your wife's is over in May. I mean, that's creeping up here in a little bit. What do you think you'll do? I mean,

go buy a $6,000 car with one of your month's paychecks. Yeah. I mean, but but that to my point, I guess what I'm saying here to my point is that's the sort of thing if you're living with in-laws, it could be really easy to say, "Oh, well, we'll just" and end up spending more on a car because you're not you don't have any other, right? There's no parameter to keep you in line. So, just be aware of that. If I had to vote for this, and I think Rachel and I are split. If I had to vote for it, I think I'd vote no. I think I'd vote get get an up get like rent somewhere and decide if you like the area and be on your own with your three kids. But if you didn't do that, it wouldn't be the worst thing in the world.

Okay. Yeah. The decision is not going to make or break you. It just could create bad habits though

um that you don't even realize because the lifestyle creep that could happen. again hypothetical but you know you're not paying for the you know it's just it's just that ongoing which you guys know you're adults Adam I mean you guys have done you you've been homeowners you know you know the deal

but um it's just that it's just getting lazy on any of the numbers and then actually pushing things that you wouldn't have pushed otherwise like getting a nicer car that you wouldn't have done if you were paying rent paying bill like living in reality changes the numbers you're going to be living in reality hopefully in 6 to 8 months you know when you when you have a house, but making sure always too, Adam, that you guys have that emergency funds and all of it. So, there's some there's some steps and that may push the timeline.

So, yeah, you and your wife um that's the homework is figuring out what these create real numbers. Don't just make it something up in the clouds. Say tonight or sit down this weekend and say, "Okay, lease is coming up in May. What's the plan? What are we going to spend?" and make a hard concrete number and then decide about your lease and say are we really going to ride this car payment thing out for two more years or you know can we buy this thing out decide and figure out whatever research due diligence you have to do get that actual number and then from there it's then saying okay realistically in this area to get the payment underneath 25% of our take-home pay what must our down payment be and you might look at that number and go oh gosh in order for us to do that

is going to take longer that could like 10 months or that could be like 14 months and then that might cause you to pull back a little bit and decide, do we really want to live with in-laws for over a year? So, I can just see this snowballing really quickly. So, just be on top of it.

Yeah. And the hard thing with lease cars, too, is usually, not always, you know, you usually can afford a lease payment of a nicer car than if you got a car payment, right? And so, even the type of car you guys, if you don't do the buyout that you're going to get, it may not be as nice as the current car you're driving, too. So, just be be thinking through kind of the scenario and don't let your lifestyle creep, you know, outweigh smart decisions.

So true. Well, thanks for hanging out with us today and remember, there's ultimately one way to financial peace and that's to walk daily with the prince of peace, Christ Jesus.

Questions about this episode

Who speaks in "It’s Time to Go Scorched Earth on Your Debt | February 3, 2026"?

Jade Warshaw (Host), Rachel Cruz (Guest), Jim (Guest), Jessica (Guest), Charlie (Guest), Elizabeth (Guest), Kelly (Guest), Adam (Guest).

What is "It’s Time to Go Scorched Earth on Your Debt | February 3, 2026" about?

The discussion centers on navigating a complex financial situation involving a family gift of silver that could cover credit card debt but comes with emotional ties and expectations from relatives. The speakers emphasize the importance of prioritizing debt repayment over holding onto potentially unliquidated assets, ultimately advocating for a "scorched earth" approach to debt management.

What is mentioned in this The Ramsey Show episode?

10 people, works and ideas are mentioned, including Rachel Cruz, Jade Warshaw, Dave Ramsey, Robert T. Kiyosaki. Each one on this page links to its own page with every episode that mentions it.

How long is "It’s Time to Go Scorched Earth on Your Debt | February 3, 2026"?

The episode runs 2 h 6 min; the transcript is about 24,608 words in 424 timestamped sections.

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About this transcript: the episode's spoken words as captioned on YouTube, split into timestamped sections. Reclip.Me locates every person, work and idea in the text, keeps the time it is first named, and quotes the words around it verbatim. Last updated February 3, 2026.