Break The Debt Spiral And Regain Your Life

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Normal is broke and common sense is weird, so we're here to help you transform your life

from the Ramsey Network and the Fair Winds Credit Union Studios.

This is the Ramsey Show.

I'm Dave Ramsey, your host George Campbell, number one best selling author and Ramsey

personally, co-host to Smart Money Happy Hour on the Ramsey Network.

He's my co-host today.

Open phones at triple eight, eight, two, five, two, two, five, Elizabeth is in Seattle.

Hi, Elizabeth.

How are you?

Hi.

I'm doing well.

How about you?

Better than I deserve.

What's up?

I have a question about debt transfer cards.

I've been following you for years and I know you always say don't do it, but I'm kind

of at a loss.

I don't really know where to go because we're drowning and can't make even our minimums

because we have kind of a lot of debt.

How much debt do you have?

How much debt do you have?

How much debt do you have?

How much debt do you have?

How much debt do you have?

I say probably 13, just under 13 for our car and 35 for our school.

Okay.

And what's your household income?

Around 3,500.

Okay.

You don't have a credit card problem, you have an income problem.

Yeah.

Yeah.

Yeah.

Why do you make 30, who makes 3500 and doing what?

Between the two of us, my husband and I, we both lost our jobs about a year ago.

So we door dash, spark drive, and substitute teach.

We're both also applying for more consistent jobs with consistent income.

Yeah.

You don't need to apply for these jobs.

You need to get a job.

It's been a year.

Your dash does not support a family.

No.

What were you guys doing before?

My husband worked as a CEO for a realtor company, and I worked in the ministry, but my church

closed down, and I lost my job right as we had our child the same month that he was

born.

And then three months later, my husband got fired from his job, so very deep dive.

We were making over 6,000 together at that point.

Yeah.

Right.

That's where we concentrate on not trying to find some trick to cause $15,000 in credit

card debt to go away.

$15,000 will cause that to go away.

That's what fixes it.

And so we need to go get $15,000, and that is about income is what that's what's occurring

to me as I'm talking to you.

I think if I were you guys, I would step back from the debt issue and step forward into

the career crisis, and say both of us have got to land something immediately that is

a substantial real job.

Why did your husband get fired?

They wanted to cut budget costs, and they hired a management company rather than paying

a CEO.

Okay.

All right.

And how large a company was he, the CEO of, how many people were working there?

It was only him and one office staff, but they service, I think, 50 realtors.

Mm-hmm.

Okay.

And so he was doing administrative work for the real estate company.

Yeah.

There's really more than not, I mean, the CEO is not really a proper title.

I mean, it's a title they gave him, but I mean, he's not running a huge organization

or he's not running an organization even with 40 people, because the real estate agents

all wrote work for themselves, they're just running Helter Skelter, and he's just trying

to keep the thing, he's hurting cats.

So okay.

Yeah.

So what was he doing before that?

And before that, he worked for another real estate company at a project manager, then that

role ended.

They wanted to keep him on, but there wasn't, it was for a specific project and it ended,

so it...

Mm-hmm.

So it sounds like he knows the real estate business, and I'm wondering if there's some

place in the real estate business that he lands, and gets out of the door, Ash?

Yeah.

He does.

Even a part-time real estate, we better than the door-dash sometime.

I'm sorry to say again.

Yeah.

He is in the final process, he has an interview tomorrow for the final process of a job

that he's getting, but it's a half of what he was making, so we will still have to

door-dash, but it's a job, it's something.

What will he be making?

60.

Okay.

Is making...

That's an upgrade.

Okay.

That's a good start, and then you've got to land something that you can do with a child

and with a new baby and so forth that you can do from home and or work arounds of some

kind.

But Elizabeth, the deal is this, the $15,000 in credit card is very easily overcome once

you guys get your income back to where it used to be, and then you just live on nothing.

You don't go out to eat and you attack these credit cards with a vengeance because you

remember how pissed off you were, and how stressed out you were, and you get rid of them.

You can do that, but you can't do it on $3,500, you can, but it'd take forever.

And $3,500 is really not, it's not really not your world.

It's just the world you've found yourself in after a couple of tragic career situations,

and now you land back into good stuff, and you look back in the rear view mirror five

years from now and you go, well, that sucked, that was a period of time that sucked, and

I'm sure glad we're not living there anymore.

But you go and clean up everything so that you do that, and don't use these credit cards

for anything.

Yeah, they're closed.

Good.

The credit cards are closed.

We're just trying to get out from under it now.

So first thing is you take care of food, shelter clothing, transportation, and utilities,

make sure your family's okay.

Your shelter, pay your rent, pay your house payment, pay your car payment if you've got

one.

You did have one, you had 13,000, and you keep gas in the car and those kinds of things.

And the credit cards are down the list of things that we're going to do.

They're the last people to get paid on the list.

It's an unsecured debt.

Yeah.

They can come after the car if you stop making the payments.

Yeah, and it's your transportation.

So make sure you got the student loan on a hardship deferral temporarily.

And so let's get the cash flowing around here again, and then just begin to clear these

credit cards off as fast as you possibly can.

Then as in Salt Lake City, hey, Ben, what's up?

Not much.

How are you?

Better than I deserve.

How can I help?

Hey, my question is more like a career question.

I have been a driver for UCF for the last six years, and they have been tanking volume

recently, dropping accounts and just driving volume down.

And I haven't been working a lot lately.

And now they're offering a $150,000 voluntary buyout offer to leave the company.

That's exciting.

And what were you making?

I'm 4473 an hour.

Okay.

It's about 90k plus.

So what are you going to do with your life now that you're not at UPS?

That's the million dollar question, because I'm 31.

The $155,000 question, yeah.

Yeah.

I don't know.

UPS has been great.

They've had great benefits, great pay, and they're sure taking care of my family.

But if I pivot and go to a different career, I'm going to take a significant paid cut.

Why?

Just because I've been looking and applying for jobs and had interviews and just anything

pivoting from what I'm making currently is just going to be a paid cut right off the

bat.

Well, what do you want to do with your life that makes $100,000 a year?

Let's go be one of those.

Yeah.

You know, I've always had a drive and passion to go to the police academy, but doing right

along and talking with local officers is also not against these things, because a lot

of people with military backgrounds, degrees, and criminal justice.

Let's not figure out what we can't do.

Let's figure out what we can do.

You got a little launch pad here if you take this buyout, but let's not sit on it.

I'm not going to go take a dumb down job.

Excuse this as a chance to go live your dreams.

What is the dream you want to be?

Now go be that and use some of this $155,000 to get tooled up to do it.

Murphy's Law means if something can go wrong, it will.

And it usually happens when you're not prepared.

That's why a big part of what I teach is staying prepared for whatever curveballs life

throws.

Have a fully funded emergency fund, buy term life insurance, and get a will from Mama Bear

legal forms, because the last thing your family needs is trying to figure out what you

wanted after you're already gone.

I've seen families torn apart because no one wrote things down.

A will spells out exactly what you want to happen after you've passed away.

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Bruce is in Columbia, South Carolina.

Hey, Bruce, how are you?

I'm good.

Thank you for taking my call.

Sure.

How can we help?

Well, I'm 64 years old, and I've been working for 46 years, and I have a little different

alignment on retirement than my wife does, and I have a lot more debt than I should have

for somebody that's made the kind of money I have.

And I am trying to figure out how to pay down over $230,000 in debt within the next year

and possibly get retired by 65.

Okay.

Okay.

Where are you going to get $230,000?

Well, my income is, I make $160,000 a year, but the problem is, is my wife's income is

around $30,000 a year, and we have $20,000 plus in credit card debt, and $12,000 on a

car.

My mortgage is $118,000, and I have a second mortgage at $36,000, and I've been paying

down the credit cards, but every time I turn around and look, it's higher than it was

six months ago.

How did that happen?

Well, not enough boundaries, not enough conversation.

I'm trying to get myself into it.

Have you guys got money saved?

Do you have a nest egg?

Well, I have a 401k with about $310,000, and I have an IRA that's between my Roth and

my traditional IRA, it's $425,000, the Roth part portion of that's only about $55,000.

Yeah.

You're not going to retire with $230,000 paid off in one year.

You don't have the money, and you're spending, your household spending is out of control,

so even if you did retire debt-free, the debt's going to come back.

You know, I'm coming that realization.

Yeah, you guys can't live on $160,000, how are you going to live on retirement income?

What would be your retirement income?

Well, probably about half of that.

Yeah, you can't live on $160,000, you can't live on $80,000 agreed?

Right.

Yeah.

And the nest egg's not big enough to support retirement at $65,000.

No, it's not.

I mean, it's a goodness egg, but it's not a great one.

So yeah, I mean, it sounds like you guys have never really addressed the issue, and the

two of you're going to sit down and go, hey, we're up a creek here.

We've got to cut up these credit cards, and we've got to get rid of these card debts,

and we've got to get this mess cleaned up, or we're going to be working until we're 80.

Yeah.

And the only other income I have is I do have an annuity.

Yeah.

Why do I think you're not going to do that?

Because you just completely changed directions after I told you what to do.

You know, I 100% I know you've been married 36 years, yeah.

This is a come to Jesus meeting I'm talking about.

We're going to sit down and go, this is broken, and we are going to fix it starting now.

That's the meeting tonight.

No television's on.

Nothing in the background.

No dishes being washed while we're talking about it.

This is we are screwed, and we have screwed ourselves, and we have to fix this now.

And never go back to the old ways.

We're going to get on a budget, we're going to open that Ramsey every dollar app, and the

two of us are going to start acting like grown-ups, not like a couple of children in Congress

spending money we don't have.

We're going to cut up the credit cards, and we're going to clean up this freaking debt

so we don't have to work till we're 80.

And then you get yourself used to living on $80,000 a year while you pay off all this

debt, and then when you retire, you can live on $80,000 a year because you've got a couple

of adults in the household instead of children.

And children can be 64, by the way.

So that's what I mean, but you've kind of think, keep thinking you're going to treat

the symptom rather than the problem.

And the problem is, is that you guys spend more than you make, and you don't have a system

and you're not in a line, and you're not agreed in your marriage after 36 freaking years

on how we're going to do this.

And so this is going to run off until you're 90, and you're going to be eating dog food.

And this is where this is headed.

So you've got to go back, you've got to go to the source of the problem, which is not

her, it's both of you, but it includes her.

And so she's going to get to hear a word that you haven't told her in a long time, and

here's the word, no, we're not doing that.

We are broke people.

And you have to start acting that way, or you're going to, you know, this thing's going

to fall in on you.

And that's what you're starting to feel, and there's sense of desperation creeping up inside

of you.

You've got a year, maybe you work two years, maybe you work three years, and you clean

this up and end up with a half million dollars in your nest tickets to the 300,000, and

you got no debt house and everything's paid off in three years, because the two of you

got very, very serious starting tonight, ready set, go.

I don't know if you're going to do it or not.

I keep thinking about that old Dave quote, you worked too hard to feel this broke, 46 years

of a career, making six figures, which is way more than most Americans, and you got

nothing to show for it.

And that breaks my heart, because we know retirement is not an age, it's a financial

number.

And so I wish you could just ding a, hey, I'm 65, time to retire, not if the math says

you can't.

And so that's the hard truth.

It's been 36 years of compounded, bad decisions.

It's going to take a little while to clean this up, and you guys need to be unified.

Emerson Los Angeles.

Hi, Emma.

How are you?

I'm good.

Thanks for helping me out today.

Sure.

How can we help?

Yeah.

And I were wondering if it's a good idea to pull from a Roth IRA to pay off the rest

of my student loan debt.

No.

Okay.

That's what I thought.

You don't sound like you're a retirement age, you're going to cost you millions and millions

of dollars in the future, you.

So how much student loan debt have you guys got?

It's about $9,300, and that's just my student loan, if we're only debt, we have left.

$9,300?

Mm-hmm.

Like $9,300.

Correct.

What do you guys make?

We are on a variable income.

My husband is a study income, so he makes about 5,600 and then my income varies from anywhere

from nothing to 12,000 a month.

I'm a wedding videographer, and so it just depends on the season that I'm in as far as

I guess I'm a wedding or not.

How many times do you have a $12,000 a month?

Last year I had about three or four of those.

This year I haven't had one yet.

You guys, can you guys live on his income and just pay off the student loan the next time

you have a good month?

It's possible, yeah.

My work is very slow right now, it's kind of like a tricky season with that.

No, but I mean, as soon as you get a $12,000 a month, just pay the stupid thing off.

Yeah, I think we could probably manage that.

Yeah.

You can't be counting on your income because it's too volatile.

Correct.

Very correct.

Yeah.

So where does your income go when it does come?

Our expenses are not covered fully by my husband's income.

Okay, so you can't live on his income.

Okay.

Not fully.

Why are the expenses so high?

Is it your mortgage or rent or what?

Because it's not the debt.

Yeah, I mean, our rent is trying to apply.

I mean, not ridiculous for the area, but it's about $2,800.

And then between just insurance, we have two kids, yeah, it just adds up.

We're in the process of like refining things and trying to get really, really serious,

especially since my income has been so scary lately.

Yeah, good.

I would make a budget and pretend like you have to live on his income and cut the expenses

down until you can fit that.

Yeah, I would.

You get your every dollar budget out.

And then that takes the pressure off of your business.

And when your business starts making a loan, you have one of those good months again.

You just blink past student loan.

But no, I would not.

The student loans are not your problem.

The problem is that you're not living on his income and your income is not dependable.

And that's what's throwing you guys into a tizzy.

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Everyone to see the person who's calling to ask a question.

Everyone to what they look like when they're calling here and asking.

That's kind of interesting, wouldn't it?

You can experience this.

The Ramsey show is going back on tour.

We're going to do live Q&A with the audience and tape one of these shows.

Raw confessions, crowd debates, local debt free screams, Charlotte, Denver, Phoenix, and

Anaheim all in April.

These are small venues.

We're only having about 300 seats because we want to be able to talk to you guys and take

questions from you.

Last time we put this out last year, it sold out in 72 hours.

So get your tickets at RamseySolutions.com slash events or click the link in the show notes

if you're listening on a podcast or on YouTube.

Again, Charlotte, Denver, Phoenix, and Anaheim in April, just in a few weeks here.

We're going to be in those cities and taking questions live, studio, audience.

It's a different vibe.

I'll tell you that.

But it's also kind of fun, isn't it?

I love being out there.

We've got some even more fun interactive stuff planned for this next run.

Kelly is in Raleigh, North Carolina.

Hi, Kelly.

How are you?

Hey, guys.

I'm good.

How are you today?

Better than we deserve.

What's up?

I have a question.

I listen to your show all the time and get some of your feedback that I internalized.

But my fiancé and I got engaged last November and we planned our wedding for April of

2027.

We were looking to buy a house, hopefully, in the next couple of months.

We have the money put away for it.

Why are you waiting to get married so long?

A couple of reasons.

One, we wanted to focus our money effort toward the home first.

And then my brother and his brother are also both getting married.

One in April this year, one in September this year.

So with the help from our parents for our wedding, they're both gifting us a little bit

of money to have a bigger and more fun wedding.

So we have a lot of life under you, too.

I'm 26 and my fiancé is 29.

Okay.

I would beg you to not buy a house with someone that you're not married to.

So would it be worth it then to go to a courthouse and get married before we buy a house?

Yes.

And then just have the wedding next year.

Yes.

Okay.

Change is so many things because I've just sitting in this seat, taking calls from people

that have problems with their money, have run into so many different ways that they can

go sideways because basically from a legal standpoint, you've just got a general partnership

with no partnership documents.

And so if something goes sideways, I'll give you a horrible one.

This is not going to happen to you guys, okay?

And a guy and his fiancé bought a house together and she died in a car wreck and so without

a will.

And so now he owns the house with her mother because he's not kin to her.

So her half was left to her only remaining kin.

And by the way, her mother was crazy.

So my crazy future didn't happen mother-in-law is now my partner in a house.

Because that makes me throw up just a little bit in my mouth, right?

You follow me?

Yeah, that's a little scary.

That's kind of crap we've talked to over the last 30 years and so we don't want that

for you.

And so yeah, I do the courthouse and do the celebration later because now we've got a situation.

It's also okay to wait after you've been married a while to buy a house.

You guys maybe not.

You've kind of got this plan unfolding here, I'm with you.

But we always laugh and say marriage is different than checking up.

And it takes about a year of being married to know how close to your mother-in-law to buy.

Yeah, and I hear that because I live with my in-law, my future in-law right now.

Is that driving?

I think that's driving this decision.

You're like, get me out of here.

Hey, one house!

Okay, yeah, courthouse.

How did I, yes, part of it, no.

We were going to consider renting, you could go rent something, but courthouse and rent

for a year and then buy is ideal.

Courthouse and after the courthouse is next best thing, please do not buy a house or someone

you're not married to people.

It is a disaster.

I mean, there's just no way you can break up.

I mean, at least when you're married, the divorce, you know, there are laws that dictate

how things are split up and judges will dictate how things are split up.

But in a divorce situation, but when you're just, you're shacking up in your own house

with somebody you used to sleep with, it's just really a pain in the body.

We're seeing to be a blessing to somebody when they call in.

Yeah, it's just a problem, problem, problem.

So there we go.

Good stuff.

Spencer's in Boise, Idaho.

Hi, Spencer.

What's up?

Hey, Dave.

Um, I, my question is, so I'm 24 years old.

I'm in college and I unfortunately had about $15,000 in credit card debt, which I am planning

to pay off this summer with a good internship I landed.

Good.

My parents are pretty adamant that once I pay off this debt, they want me to rebuild

my credit and kind of dive back into the, that world to build up my credit.

And I'm kind of worried about that.

So you want to fight off the lion and then your parents were saying, Hey, jump back

into the lion's den.

It's good for you.

Pretty much.

Makes sense.

Yeah.

So are they paying your way through college?

They're helping.

Yes.

Yep.

All right.

Um, well, I mean, there's a couple of things here.

One is, if they're paying for your school and you live with them, you have a different

level of obligation to, you know, to honor them and to be kind and so forth, right?

If you're standing on your own and you're out of school and you're doing your own thing

and your mama's dad still have an opinion, it's, they don't get to vote anymore.

That's how that, not how this works.

So, um, but then the second part of the discussion is, what's wrong?

With their theory, okay?

Their theory is based in the, the idea that you need to go get credit means that they believe

that the best way to have a wonderful life is to purchase things and stay in debt the rest

of your life.

That that's the best way for you to get things and to have a good life.

They believe that and their theory is wrong.

Their belief is wrong and, and, and, and that's at the core of the discussion.

So they don't, they're not bad people, they're not trying to punish their son or do something

bad to their son.

They actually do believe a lie that the best way for you to have a good life is for you

to have good credit so that you can buy anything you want, anytime you want on payments.

Right.

Well, and so how do I have this conversation with them?

Because I think, I mean, I obviously agree with you and, and I think they would normally

agree with you that they're, they're not terrible with their money.

They're always, you know, telling me to stay out of debt and stuff, but they're, they

just.

There's only one reason to build credit, mom and dad, and that is to go into debt.

And I am really don't like debt.

And so I really am not going to build my credit because I really don't want to be in debt.

It's the only reason to build your credit.

It has no other value.

And if you want more info on this, I wrote a whole chapter on this in my book covering

every single objection.

You can read that and then have the conversation with them, say, hey, I know you're worried

about me getting an apartment.

There's easy ways around that.

I know you're worried about me not being able to get a mortgage one day.

There's a way around that.

And so you just have to realize you can rise above the system instead of being stuck in

the hamster wheel.

Yeah.

Hang on.

We'll send you a copy of that book and read it and might be fun things.

Hey, listen, I just read this chapter.

You guys read this chapter with me and tell me what you think.

And because I just don't, I don't want to be in debt, mom and dad.

And because here's the whole, the whole FICO thing is 100% of your FICO score is based

on your interaction with that.

It's an I love debt score.

If you don't borrow money, you don't have a FICO score.

Tada.

Just like that.

And I've lived it.

I mean, I paid off my debt.

Didn't have a score.

Still was able to rent apartments all over town, even ones with a landlord, not apartment

complex.

I was able to get a mortgage through a manual underwriting.

And everyone told me, Dave, oh, it's going to be so difficult.

You're like, you're going to have to jump through so many hoops, you're going to be exhausted.

It was a nothing burger.

It was just like, well, you don't have a criminal background.

Can you pay the deposit?

All right.

You're in.

Yeah.

You have the money to pay the mortgage?

Great.

You got a tax return in 12 months of rental history.

Great.

It's not that difficult.

No problemo.

Yeah.

But the only reason to get credit is so you can get into debt so that you can get credit

so that you can get into debt, so that you can get credit, so that you can get into debt,

so you can raise your FICO score, so you can get into debt, so you can raise your FICO

score, so you can get into debt.

I think it's a scam, boys and girls.

One hog day and only the lenders win.

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Ed is in Jacksonville, Florida.

Hi, Ed.

How are you?

I'm good.

Mr. Dave, how are you?

Better than I deserve.

What's up?

So, my question is, I've got around 300,000 in the equity in my home and I've got a total

of 240,000 in debt with 140 of that being the mortgage.

Some pretty bad debt within that 100K.

I said, I sell my house to get out of debt, start over, I'm 43, I'm zero retirement,

the house is my retirement.

I've had a really rough couple of years, some pretty tough events have happened.

And trying to get out of this financial prison, if you will, and there's no money left over

to save.

And I just don't know what to do, should I sell the house, refinance the house, state

but what's your household income?

Combined with my wife is 140, with me bringing in 100 and her bringing in 40, the only caveat

to that is after my employer paid health insurance, which is 1700 a month, I've taken home

about 5,000 after taxes.

Okay, but you're getting a tax refund.

That's another thing, I owe the IRS 7,000 that I'm making payments on, that I have left

from being, my wife being self-employed, I'll go back to 22 that we're making payments

on, so my tax refund goes to that, but that should be paid by this year's tax refund

with my monthly payments.

I'm really hoping to have that paid off by the end of the year.

Yeah.

Okay.

And how much do you owe on your truck?

39,000.

And that's of the hundred.

Yes, sir.

Sell the truck.

And I'm 10,000 upside down, I would have to come out of pocket to be able to sell it,

now I just don't have it, but that would still be selling a house.

Yeah.

You borrow, you know, go to the credit union, borrow the 10K and then get your $2,000 card

to drive while you get this miscleaned up, but 40% of your problem is the truck.

Okay.

So find a way to get the 10K to get out of the truck.

Yeah.

And you borrow it or who's the, who's it, do you owe the money to on the truck?

All right, financial, the only problem with that, Davis, my credit, take a hit.

We had a house fire in 23 and the insurance paid 80 less than what it cost to build.

And I had 40 of that, but I had to bank bar rob Peter to pay Paul to find the other 40,

which I did, but my credit took such a hit during that time that I'm in the rebuilding

phase of my credit.

I don't want you to rebuild your credit.

All right.

I'm Linda.

They're screwing you.

You have a 16% interest rate.

Don't you?

It's not that bad.

It's only 14.

It's not in the half.

They do promise will.

They have a subprime program.

I work in automotive finance.

Yeah.

Well, you're, um, you're getting destroyed by that car and by the nine and a half.

That's, you know, and you can't, you can't keep doing that in the name of quote rebuilding

your credit for the opportunity to borrow money again, but I'm trying to break the spiral

without selling the house and I'd sell a car 14 times for I'd sell a house.

The house isn't the problem and it sort of doesn't change the behavior if you do sell it

that got you into this mess.

And then you still got to go right somewhere, don't you?

Yes, sir.

And that's, that's horrible, too, because it's going to cost double what my mortgage is.

It's just getting my hands on the table.

So let's get ahold of this amazing income you guys have and just clean this mess up.

You sell the truck.

You got 61 left.

Make a 140.

Now it's an easy math problem.

Let's live like a broke.

Yeah.

But you're right.

You could, you do have scratch up the 10 grand, but you scratched up 40 grand to get

a house fire redone and, um, you know, and that made part of this mess as well.

So I would rather you have 10K on a credit card than I would have 40 on a truck.

And, um, you know, you, that's a, that's moving in the right direction then and again, get

you a hoop.

It's not real popular when you're the finance manager at a new car dealership, but I don't

really care.

Um, you know, I don't care what your buddies think about what you drive.

I care about you and you winning.

And so appearances are not, not something I'm willing to invest in at any stage of wealth

building, but certainly not where you are at.

So yeah, you've got to do something to break the cycle and I don't, I think selling the

house is awfully desperate when you're sitting on a 40,000 or trucks.

So I'm finding a way to get that 10K and I'm getting rid of that thing.

Uh, Austin is with us in Nashville.

Hey, Austin, what's up?

Hey, Dave.

How are you?

Better than I deserve.

How can we help?

Good deal.

Yes.

So I'm recently engaged, um, my fiance will graduate from grad school in May of this year

and we're getting married in May of 27.

Um, my question for you is, is together, um, currently we have about 50,000 dollars in

savings and we'd be going into our marriage with about a 100,000 dollars worth of debt.

Um, 50% would be her student loans and 50% would be on a fairly low interest rate.

Um, piece of equipment for my business.

My question is, is it smart to use some of our savings or all of our savings X, Y, R,

Z, the pay off of one of the loans or should we hold on to the savings and pay the loans

off?

There's, there's not a we or an hour.

You're not married.

Okay.

You don't pay somebody's bills that you're not married to.

Well, I guess I'm looking, you know, next year when we are married, why don't you just

get married?

Well, you wait.

Well, we're waiting just, nah, I guess we're waiting to get married.

Um, why?

But, well, we know we're already playing house and acting like you're married.

What, what's the big deal?

Oh, no, we're not playing house.

Uh, well, you said we have savings.

Oh, well, I was just saying electively.

Okay.

Well, you guys individually, individually, if you want to live, continue to live separate

lives until May of 27 when you're married and you work on you, getting your debt paid

off, she works on her getting her debt paid off.

She would use her savings towards that and you would use your savings towards yours until

there's a, until there's a we at the point there's a we we combine everything and we

attack it together, combine incomes and everything else.

What's her degree in?

Uh, speech therapy.

Good.

Okay.

Excellent.

She'll be able to make some good income to offset the student loans she took out, right?

Correct.

Yeah.

Good.

And let's get that done.

That's all we're looking at.

And, you know, and my business is going well too, um, but I guess just the big thing is

is how obviously we want to, you know, knock our debts out as quickly as possible or individually.

You know, that's, that's the goal, but should we take out of savings to do so?

Yes.

Or.

And you should stop adding to savings until you get the debt cleaned up because the debt

is sucking the marrow out of your cash flow.

Your most powerful wealth building tools, your income and your writing checks every month

to other people instead of to yourself.

Okay.

And that keeps you from building wealth.

And so your, your first impediment, your first block blocker for building wealth is

the debt.

So when you clear the debt, you don't have any payments in the world, now we got money.

And then we build an emergency fund of three to six months of expenses and then we start

putting 15% of our income away towards retirement.

And pretty soon, you'll be a millionaire doing that.

But you've got to get rid of all these stupid payments and talking about interest rates.

And I don't give a crap about the interest rates.

My interest rates are zero because I haven't had a debt in 30 years.

And so that's my interest to zero.

I got you beat.

And that risk on the businesses is bigger than you think.

All it takes is a few bad months and now you can't pay, you know, the equipment and

we get that call a whole bunch, hey, the business failed, but I still owe a bunch of money

on this equipment.

What do I do?

And you're selling it for pennies on the dollar, trying to clean up the mess.

So I would move forward, clean it up this debt.

And maybe by the time you're married, you both are debt-free.

How cool would that be?

That's an idea.

Yeah.

Okay.

Yeah.

You some of the savings and future income.

But only after you're married do you combine everything and when you come home from

the honeymoon, now we have debt and now we have savings and now we have a dog and

now we have, until then it's your dog, until then it's your problem, right?

And of course the dog piece on the floor, then it's your dog.

So it doesn't matter.

Even if you're married.

So that's how that works.

I know that life.

Look at what your dog did.

Yeah.

And to which I say, look at what your daughter did, you know, who's cleaning up the mess

in the Ramsey house?

Oh, Bella, the bear dog is my responsibility.

And Sharon made that cleaver.

Uh, yeah, just because Bella, the bear dog eats sharing stuff.

Oh.

So that's definitely your problem.

The dog of the bear dog stays on serious probation at all times.

You got a line item and they ever know the fourth or fifth set of earbuds from my life.

No, no.

Recently, yeah.

Yeah.

Would you please put those things where the dog can't get to them?

Is it still in the dog?

At what point is it the dog's fault?

Is it passing through or is it still in the dog?

I have.

No, I don't want to talk about it.

Dave doesn't want to know.

I don't want to talk about it.

That's someone else's problem.

Statistics show that half of Americans don't have enough life insurance or they don't

have any at all.

I don't understand this, John.

Why don't people want to take care of their family?

They think they're going to die or something?

Well, I used to be one of those guys.

I didn't even think about it and one of my buddies said, hey, the only reason to not have

life insurance is if you hate your wife and kids and I immediately went and got termed

life insurance.

That's a gut punch.

Oh, you're telling me.

And for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody

important to them and they don't know what to do next.

Me too.

I mean, you're going to have a crisis here and you got two options while you're sitting

and talking to a young widow.

She's concerned about how she's going to invest all this money properly and not miss

this up.

Or she's concerned how she's going to eat tomorrow.

That's exactly true.

These are the two options.

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Welcome back to the Ramsey Show in the Fair Winds Credit Union studio.

I'm Dave Ramsey, your host, George Campbell Ramsey Personality, number one best selling

author and co-host of Smart Money Happy Hour on the Ramsey Network is my co-host today.

Nate is in Nashville.

Hi, Nate.

How are you?

I'm doing good.

How are you?

Better than I deserve.

What's up?

So I'm an independent songwriter and music producer.

So my income is very inconsistent and I've had a lot of good years and a lot of bad years.

So me and my wife have been okay with that kind of inconsistency and income until last

year in December, our baby had to be delivered extremely prematurely.

And at the same time, my wife was diagnosed with lupus.

So both our baby and my wife have been in the hospital pretty much all throughout the

beginning of this year.

And with all of this kind of medical uncertainty, basically, that we're going into with this,

I am trying to figure out if I have the option to do something called a catalog sale, which

in music is kind of like selling a business, it's just getting a lump sum for all of the

songs that I've made.

And I have the option to do that.

And I'm kind of wondering if it's a smart move to just take the sale and invest that

money and move off of the interest or if I should just keep working and try to maybe

find a way to make my income a little more consistent.

Yeah.

Nate, I'm sorry you guys are going through this.

It rocks your world when the baby's sick and when mama's sick too, it's double.

That's a tough, tough thing and when you're an artist, it particularly is rocky.

So as you guys, as you know, I'm in Nashville.

And so I've got lots and lots of friends in the business that have sold catalogs and

so I'm fairly familiar with it.

Typically what happens in your world is that the money that you make from the songs is

the value that the catalog has, right?

And so what typically happens, as you know, and everybody else knows if you think about

it is, when a song comes out, particularly if you get a good hit, it'll peak within

a few months and then depending on how big a hit it is, it'll continue to feed out and

pay out.

But gradually, the payout deteriorates over time on every song.

Agreed?

Yes.

That's correct.

Okay.

So it goes up, big nice thing, big splash, everybody smiling, everybody's happy.

We collect a statue or two and then we go on and start.

But then the income associated with a hit from five years ago is way different than

the income associated with a hit this year.

And so what you're trying to figure out is, and that's how they value the catalogs.

They value them based on what they think they can make on it over time, right?

Yep.

And so they're looking at that deterioration.

And so anything you write the year after you sell the catalog is yours.

You're not selling your future hits, you're only selling the past ones.

And so that block of income starts at one level and goes down every single year when

they buy that catalog, right?

Right.

Yeah.

And so that's how they're valuing it.

So that's also how you make the decision as to whether you want to keep it or not.

Some artists, friends of mine want to keep it just because those songs are like their

babies.

They don't want to let them go.

They're very attached to them emotionally.

It's like a legacy for them.

Yeah.

Others view it on a pure business factor and go, you know, I can get X number of million

dollars for this thing.

And I'm going to keep on in the business and I'll make my future there.

But this gives me a lump sum to stabilize my life, which it sounds like kind of how you're

thinking.

So what are they offering you for the catalog?

It would be around 4 million.

Good.

Oh, you've done a great job.

Congratulations.

You've had some good stuff, man.

Thank you.

All right.

Thank you.

How old are you?

I'm 33.

Yeah.

How do you feel about making a year?

Well, my last year was my best year and I made just about a million.

And that's why I'm a little bit not sure because if I do a deal with an LPM dealership

last 12 months, I would get like about a times four on my catalog sale.

But I'm also not sure.

Like if I continue to write, maybe I can make that number go up and then my catalog sale

could be worth, you know, there's nothing to say you could have saw another catalog.

That's true.

But this is one block of songs, one library, okay?

And so, but here's the deal, okay?

So if you got four million a day, but you would get a million next year and 800 the next

year, would you rather have that stream of income?

Because that stream of income is going to be there, right?

And so, you know, what I would say is if you project that you're going to make a fourth

of this in the coming 12 off of this catalog, I'm probably keeping that.

Okay.

Because you're going to get a million of the four million right now.

And so we're only got a three million dollar swing.

And what have you got three million dollars for?

You're going to get that three million in the next five years.

Yeah.

Yeah, I think just with just seeing how crazy these swings can be in music and just, you

know, not not having that certainty, especially with, well, it's not a horrible deal and it's

a fairly standard process, like you said, they're doing about four X on the LPM.

So that's, that's not a, that's, that's a fairly standard formula and they're not ripping

you off.

The question is, do you, what do you want?

And it sounds like with your family situation that you can restart your career fresh with

four million dollars in an investment, which if you put it in a good investment, it'll

make you 400,000 a year.

And forever.

And that's without you forever producing future income.

Yeah.

And on top of that, then, and you've got that for your baseline to operate your household

on and relax.

And then you still, you still go to work every day.

You still go down there sitting right every day, like you were desperate and broken hungry.

But you're not desperate and broken hungry anymore, but you're still right like that.

You still work like that because my experience with the songwriters is it's, you know, you

have to go to work every day.

Yeah.

It's not, it's not random.

You guys grind those things out most of the time, right?

Uh, yeah.

And then, you know, I haven't been able to do as much this year.

I really haven't been able to do much at all.

I just put for the medical situation.

And so that's, but I'm not talking about, I'm not, I'm not shaming you about that.

What I'm talking about is just because you've got four million dollars in a mutual fund

doesn't mean you can quit work.

Right.

Absolutely.

When mom and baby are healthy and you're ready to go back to work, go back to work.

Nate, you've got a talent.

Go use it.

Okay.

Don't get lazy because you got 400 K or four, four million dollars and you're making

400 K.

Do you believe you're talented enough to go create another million dollar a year in the

future?

No question.

If he built that catalog, he can do it.

Yeah.

I think, I think I can, I think I would be able to do it.

I'm, I'm just putting myself in your shoes.

I'm taking the deal.

Yeah.

I am too.

I like what it does for you.

Stabilizes your life.

You got a family you're responsible for.

You're not just a kid with a guitar in a room with too much coffee.

You know, yeah, this is, there's, you, you now got other stuff going on.

So I'm with you, man.

I'll take the volatility of the stock market over the volatility of the music industry.

Oh, no, it's, it's not, it's not that volatile.

It's very predictable.

It's going to go down.

Yeah.

Exactly.

It's very predictable.

We just talked about the stream of income deteriorates.

The S&P 500 dulling on up over time.

Yeah.

I'll take 400 K a year off of that four million, live on that or 300 K and live on that and

let that sit there.

Get with a Smart Vestor Pro, you know, click at Ramsey Solutions Nate and get sit down

with one of the folks we recommend.

They'll sit down, put together and believe me, they're in Nashville.

They've worked with catalog sales before too.

They know what it is.

It's a fairly, you know, in our, in our community, we're in a music community that's a fairly

common occurrence.

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Brandy is in Tulsa.

Hi, Brandy.

How are you?

I'm good, Dave.

How are you?

Better than I deserve.

What's up?

So, my husband and I, we together have about $65,000 in debt.

50,000 of that is our auto loan, which is about 1,000 a month.

And we're barely staying current on it.

We are behind on rent, which just started in February.

The deal with that was that we were working at a job where we got the house for free.

And now, but the job only paid like $1,000 a month.

So obviously not sustainable.

Our bills are about $3800 a month.

He does have a new job now that is bringing in $3600 a month as of February 1st.

So we are behind on rent, barely staying current on the car.

We have not filed taxes yet.

We should be doing that this week.

Our plan is to get current on rent.

And then about half of that, the O, the last boss we had about half of, we're expecting

about $5,000 to $6,000 return.

So we're going to owe him about half of that.

For what?

We're just wondering like how do you owe him thousands of dollars, the guy you worked for?

We, well, my husband accidentally broke a piece of equipment that resulted in about

that much to fix it.

Yeah, but that doesn't mean your husband has had he borrowed the equipment or was he

operating the equipment while he was being employed?

He was operating equipment while being employed as an employee.

Why does that make your husband liable?

He feels bad for breaking the equipment because that doesn't make him liable.

You're broke.

I don't care how bad he feels.

Okay, if George drops to his computer that I own on the way out of the studio today and

breaks it, George does not have to pay for it.

Yes.

Okay.

Does that work when you have, does that work when you have, it works when you have employees?

Did he sign some agreements saying that he's liable for any accident or damages?

No, yeah, he did tell him that he wants to pay him that, that he's owed that.

Why?

He did come to us with an agreement.

Why?

Why, what basis does the employer think the employee has to pay for broken equipment?

What's the, what's the found, the moral foundation of this is this is cray cray.

I think it was just my husband's stupidity.

This is a month of his pay.

You guys, okay, number one, the landlord is on hold.

Period.

I mean, the former boss, if you ever pay him, it's not going to be any time soon.

Number one, number two, sell this stupid but car.

This car is insanity.

What is this thing?

So I do have a question on that now that you bring up, it is a 2025 Dodge Deringo and

I bet it is.

Yeah, we bought it last year when we were making about $5,000 a month and we had that job

for about a year and a half.

That doesn't mean you need to be stupid.

I know.

$50,000 Dodge Deringo for $1,000 a month.

Yeah.

Killing you.

How far underwater are you on this thing?

It is worth by Kelly Bluebook about 26,000.

What?

What?

How is that even possible?

You guys drive this thing to the ground already in a year?

We drive about 35,000 miles a year.

Why?

During that time, we were traveling more for work and we travel about a round trip to

Florida.

Did you trade a car that was upside down into this deal?

I'm sorry.

Did you trade another deal, another car that was upside down into this deal?

Do you roll over negative energy?

Because even at 35,000 miles a Dodge Deringo should not have lost half of its value in

one year.

They suck but they don't suck that bad.

Yeah.

So we had about $10,000 of negative equity on the old vehicle that we rolled into.

Okay.

That makes more sense.

40 down to 26 because you drove it to the ground.

Okay.

That makes more sense at least.

Is there any other debt?

We have 9,400 about 5,500 of that is personal loans and the rest is credit.

Okay.

All of that's on hold until you get your rent current and keep your truck current until

you figure out a way to get out of this truck.

And the ex-employer does not get any of your tax refund until you are out of debt and

even then they probably don't get any money.

You do not pay for broken equipment when you work for someone.

That's not how life works.

Okay.

If I own a heavy equipment operation, I got six bulldozers and one of the guys breaks a

bulldozer.

He didn't have to pay for it.

I have to pay for it.

I'm the owner.

That's how it works.

Okay.

The owner has taken the risk here.

That's what owning a business is.

Even if the guy made a mistake and tore it up, it's still on the owner, not on the employee.

And so what you guys are engaging in, I don't understand the moral code by which you've

come to this decision or your husband thinks he's liable.

He's not.

There's no code I've ever been around that says he's vit.

He might feel guilty, but he's not liable.

He feels bad for turning up the guy's stuff that he should do.

He's an honorable man, but it does not make you need to pay for it.

And for sure, you don't pay for it when your rent's not current and you can barely pay

your car payment.

So you guys got to get rid of the car and get current on food, lights, water, transportation

and rent.

And don't get behind on those things again.

And never again, never again by a car on debt.

The rest of your life, this should be the last one.

Because you guys are handcuffed, this thing has a gun to your head.

You have nowhere to go.

And I'm not sure how you're going to get out of this truck.

It's a mess.

You're going to need to save out the difference.

Yeah, you got two bad deals tied together here and you're at 50% sub.

I don't know how you're going to do that.

He's going to need to make a whole lot more money.

I don't know if you're working outside the home, but I think you're going to need to get

a job as well.

Yeah, you guys are all going to have to be working all the time for the next three years

and clean up a lot of this mess.

Because everything you've touched has gone backward for the last two years.

You've gone deeper in the hole, deeper in the hole, deeper in the hole and you've got

to turn that around and income turns that around and then stop doing ridiculous

decisions turns that around.

And so if you go near a car lot to buy a car on payments again, I can't help you.

You've got to stop that.

It's just destructive.

And so, oh man, what a mess.

We're seeing a higher and higher percentage of people taking on car loans over $1,000.

It just keeps going up.

And let me also tell you guys out there, this is the second or third time today that

we've taken these calls.

So here's your order of priority.

And you do not violate this order of priority.

The first thing you do with money that comes into your household without exception, you

buy groceries.

You buy groceries for your family, your family eats before you do anything.

The next thing you do is you keep the lights and the electricity on.

You have to have that to operate and almost everyone and even in a horrible crisis can

put the money together to do those two things.

The next thing you do is you stay current on the rent so you're not freaking homeless.

You stay current on your mortgage, you stay current on the rent, period.

The next thing after the rent is current is the car.

Not the car and then the rent.

You did that backwards, Brandy.

You keep rent current because if they take the car, you at least got a place to live.

If you take the house, you're living in the car and we don't want to do that.

Hey guys, George here.

Listen, 99 times out of 100 when people say, I don't know where my money goes.

It's not a math problem.

It's a behavior problem.

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That's the letter Y-R-E-F-Y dot com slash ramsy might not be in all states.

Today we've got two related questions, first is from Craig in Georgia who asks, what

will the market do based on what's going on in Iran?

And Alan in Indiana asks, my daughter is going to college in August with the stuff going

on in Iran, should I change her 529 plan to an age based investment?

So today people are spooked by what's going on, it obviously affects the economy at

least temporarily.

And so they're wondering, should I make any changes to the way I'm investing right now?

No.

That was easy.

You should not change a thing.

If you go back throughout history, every time there's a burp in the geopolitical world,

every time Donald Trump burps or Joe Biden burps, or there's an October 7th attacked

by Hamas and they kill innocent babies in Israel, or there's the Israelis now and the United

States bombing the crud out of Iran for a few days.

When you go back through history, you're going to see that generally what happens, there's

a one or a two day, sometimes a 30 day period of time that the market will go down.

Those that ride roller coasters only get hurt if you jump off in the middle of the ride.

Give me an example.

Anybody remember that little thing, COVID, there was a little thing we had called COVID-19,

there was a little problem we had a few years ago.

And it was going to crash the entire world economy and everything.

And the market dove when everything started sheltering in place and everybody had to go

home and all these, everything started shutting down and all this.

The market dove and it went down and down and down and down and down and down.

Fifty seven days later, it was back up to where it started.

Hmm.

Oh, yeah, when the bombs first started falling on, I ran the other day.

The market dove.

It went down a couple of points.

It's been a week or two, it's back up.

The market is basically flat as of this recording for this year and net, net, net out of all

the ups and downs and backs and forth.

If you jump in or jump out every time you see a bad report on CNN or Fox, you're never

going to stay invested and you're never going to make any money.

And so no, you don't do age-based investments for $5.29 for God's sakes.

And you don't ever do that and you don't sit and fret about what the market is going

to do based on a war if you even call it a war based on a series of bomb runs.

So I mean, I, again, the markets just are not that tender and here's the thing.

You should never put money in mutual funds that you're going to leave alone a week.

You should never put money in mutual funds that you're going to leave alone for a month.

You should never put money in mutual funds if you're going to leave it alone for six months.

You should never put money in mutual funds unless you're going to leave it alone three

to five years.

and over three to five years,

all of these problems that drive the market down

become a distant memory,

and all you will see is a trend line overall up.

So here's my investing strategy.

Time in the market beats timing the market.

And what you're doing when you get spooked by this

is you're timing the market.

And what you're really doing is you're selling low,

and then you're gonna buy high,

because you don't know when the bottom is.

So what do you do?

You cash out hoping that you're gonna get,

you know, avoid this big dip.

And then what happens is when you get back in,

it's already back to record highs.

And so you're really lost out,

because the best days usually happen after the worst days.

So what Dave and I are doing,

we're not changing our investing strategy at all.

Yeah, and your daughter goes to college in August.

By August, it'll be a memory.

By the next August.

And by the way, you don't need all of her $5.29 money.

The first year she goes to school.

If you do, she didn't have much in the $5.29 to start with.

And so you're just gonna take out enough to pay for that years,

or that six month or that semester.

That's all you're gonna use.

And so the vast majority,

let's say you got enough for four years in the $5.29, okay?

The vast majority of what you need

is not gonna be used for two to three more years.

And so over the next two to three years,

you know, the bombing of Iran will be a distant memory.

And it's a much smaller blip on the radar,

no pun intended, than COVID was.

COVID was a real thing in terms of what it did to the market,

but it recovered dramatically fast after that.

And so you go back and look at March of 20

and watch what the stock market did.

Go look at the chart from March of 20.

And you'll see it come right back up in April and May and June.

And these age-based investments,

they for people that don't understand what it's doing

is moving your investments to more conservative things

like bonds as your kid gets into the college phase

so that it sort of stabilizes.

But what you're missing out on is the returns.

Look at the last three years.

It was up 23%, 25%, 17%.

And if you are half in bonds,

you're not gonna see those returns.

Yeah, and you've affected your kids' ability

to go to college at that point.

So no, no, no, no, no.

If every time you get afraid

by watching the news, quit watching the news.

Cause you know, it's, it's, it doesn't matter, you know?

Like we were going to Cabo the other day

and some of my friends and wives are like,

Oh, they have problems with Mexico.

You can't go to Cabo.

And I'm like, it's not, it's a, it's a can't come.

I mean, it's like, they got a big problem in Chicago.

So I'm not going to Nashville.

That's just dumber than Crud and people's perception of stuff.

So I'm, oh, I'm canceling.

What do you canceling for?

We're not even, we're not a thousand miles away.

They burned a car in Chicago.

So you're not going to Nashville.

I mean, that's just dumb.

So it's the same thing here.

It's overreaction.

The fear porn that the news media just spreads all the time.

And so turn off your televisions.

A good idea for your investing strategy

and just get off the Fox website.

Because it's just, the world's coming to end.

The world's coming to end.

The world chicken little lives there full time.

The sky is falling, the sky is falling.

What phones here at triple eight, eight, two, five, two, two, five.

James is in Raleigh.

Hi, James.

How are you?

Good in yourself.

Better than I deserve.

How can I help?

Um, so I went through my financial transaction transactions the other day.

And on my life's phone, I found that she has spent a minimum of about $5,000

sending to one person because she has an addiction to paint pills

that were currently trying to get under control.

And she is dealt with five or six people over the course of the last year.

And I've been noticing more and more money, good missing.

I had about $600 saved up and that went missing.

And every time that I ask her about it, where the money went,

she can't give me a straight answer.

Well, if your wife is addicted to drugs, take her off of all of the accounts.

Well, I did.

And that was the problem is that she will grab my phone while I'm asleep.

I'm a truck driver.

So I'm home to maybe put a passcode on your phone, man.

She cannot have if she's an addict, she cannot have access to funds.

Okay.

And at this point now, I don't want to leave her because we do have two kids together

that both get registered school and that doesn't mean she has to have access to funds.

She has no access to money, period, if she's an addict.

It's not good for her, dude.

She'll kill herself.

And I'll try to explain that to her.

I don't care about what she's saying.

I don't have to explain it.

You get no money until you're a clean of drugs, period.

I'm not explaining, I'm telling.

I'm protecting you from yourself and I'm protecting us from you

until you get off these pain pills and you're dry.

And so we got to get you some help for that, baby, doll.

I love you and we're going to walk through this together.

But you got no money.

I'm not giving you, you have no access to no money, no how, no where

when you're doing drugs.

Period.

That's a non-starter.

You just got to start with that and end with that.

And make sure she's actually getting the help she needs to get healed, man.

And then when she gets healed and becomes trustworthy again, worthy of trust,

then we start working this like two functioning adults together.

But until then, no.

And July is in Phoenix, hey, Angela, what's up?

Hi, good afternoon, thank you for taking my call.

I'm excited to see you guys next month in Phoenix.

Yay.

Glad you're coming.

How can we help?

I was in a car accident in April of 2020.

I'm OK and went through several physical therapy sessions, like maybe eight sessions.

I was represented by a locker.

Fast forward in 2023.

The case closed and I only got $4,000 settlement after everything set and done.

And they told me everything was settled and was asked to shine the client directive.

And I was only 24 at that time, you know, nothing, nothing, nothing, anything better.

Fast forward to 2026.

Last week, I got an email from physical therapy.

But I owe them $3,800 because the law firm didn't pay them.

And I didn't have to pay for it.

They're six years from now.

I was able to confirm that everything wasn't legitimate.

And I just don't know what to do.

Do I just pay them?

Have you talked to the law firm?

No, not law firm, the physical therapy.

I know.

You said the law firm was supposed to pay it and they didn't.

Yes, they didn't.

And Wendy said,

Did you call the law firm that was supposed to pay it and didn't?

They didn't.

They told me that you call the law firm that was supposed to pay the bill.

Yes, I did.

What did they say?

They told me that at that time, they said they cannot get it.

I'm talking about this week.

Yes.

This week you got a bill that they were supposed to have paid.

Did you call them this week and say,

How come I got a bill that you were supposed to pay?

It's not even a bill.

It's just an email from that.

Ronnie, did you call the law firm?

I did call the law firm.

Okay.

Jeez.

What did they say?

They said at that time in 2023 before they closed the settlement,

they cannot get a hold of the physical therapy.

That's why they asked me to find that directives, clients that I have to take care of everything.

But from what I can remember, they told me everything was settled,

even the medical bills from the hospital.

Okay.

So you signed off knowing at the time they have a piece of paper in their file that says

you knew at the time that they had not paid the physical therapy.

No, they told me at that time that everything was settled and I don't have to worry about anything.

And come six years after the physical therapy was emailed last week about it.

I got that.

What I'm trying to figure out is what the law firm is,

what's their excuse for not having paid this?

And how did they say it was your fault?

They said at that time they cannot get a hold of that physical therapy.

That's what they told me last week.

That doesn't matter.

They still have to pay it.

Whether they got a hold of them or not.

You're telling me for three years they haven't been able to get in touch with the physical therapy place?

No.

From 2020 to 2023, they didn't settle it.

Yeah.

Okay.

Well, I think I'm going to be talking to the lawyer that was supposed to have paid the bill.

And I don't really want to hear any excuses about why they didn't pay the bill.

And they need to call the physical therapy company and get this settled.

Because that was their job originally.

They withheld money from your settlement to pay your bills.

And then they didn't do it.

Yes. The settlement was 14,000 and it only got 4,000 in total.

Which means you got nothing by the time you pay this bill.

So the only person made money on this was the lawyer.

Oh, there's a shock.

Okay.

Oh my gosh.

All right.

Well, I'm going to be all up in the business of this law firm saying you guys are supposed to have paid this bill and you didn't.

And you need to contact them and you need to negotiate this.

And if it does land back on you, Angela, you probably can settle it for $400 or $500.

And just tell me it's a, you know, it's a six year old bill.

And you haven't gotten it so far in six years and I'm not paying you.

The law firm was supposed to pay you, but I will, I will give you $500 for settlement and full.

And then you can go after the law firm that's supposed to pay it if you want to do that.

But you know, if you want to settle it, that's fine.

Or you want to dump it in the back of the lap of that law firm.

I'm dumping it back in the lap of the law firm.

I'm going to have some real stern conversations with them about how they should have taken care of this at the time.

And I'm not sure I understand what your deal was with them completely, but it sounds like they were supposed to have taken care of this and didn't.

And I'd find some documentation right now.

It's well they said.

Yeah.

Five years ago that they were going to do this thing.

I'd get some, what did you sign in writing?

What did it say?

Yeah.

But a medical bill, regardless of what the story is, a medical bill that has been unpaid for six years, you can settle it for pennies on the dollar.

And so just make them a $500 offer to go away and they'll go away and get them $500 bucks and get it in writing and keep the piece of paper forever once you settle this.

That's probably your easiest route.

But there's something about the injustice, the injustice of the law firm being the only one that actually makes any money on this transaction.

Oh, geez.

Don't get me started on water.

Is it one of those billboards that she called one of those numbers?

They took her to the cleaners on this one, getting 70% of the payout.

No, they got it all.

Well, she said she got $4,000.

Yeah, but now she was $3800.

Which takes it down to zero.

And if they had paid that, she would have got nothing.

So they got it all.

That's my point.

That's some of zero.

I'd be the squeaky wheel.

Yeah.

So I'm getting up in some folks business here at a minimum.

Just to have some fun with this.

And then, because there's nothing more fun than yelling at lawyers, that's one of my favorite things.

The past time for Dave.

So, I'm sorry about that.

Sorry you're facing that.

If you want the easy way out, I just settle it for 500 bucks.

Call the physical therapy people and say the lawyer's supposed to pay it.

I don't know it.

I'm going to turn it over to them.

Or I'll give you 500 bucks for settlement and full.

But I'm not giving you $3800 period.

Not going to assume me.

Laura's in Washington, DC.

Hi, Laura.

How are you?

Hi.

Thank you for taking my call.

Sure.

What's up?

The question is, how do we navigate wanting to start a family, but still being in baby step two?

Just start a family.

I don't wait to get out of debt to have kids.

What are your concerns?

What are you worried about?

I think we just feel like anxious and fearful that everyone says having a kid is a big expense.

It's not.

They don't eat much.

They're tiny.

Yeah.

They really don't.

Do you guys have any money saved?

No, they're in baby step two.

You got a thousand bucks?

Yeah.

Okay.

So let's just stack up cash once you're pregnant.

And, all right, for the next nine months, we're just going to save and save and save and save.

And once you and baby are home safe, we can push play on the debt snowball.

But for now, just make your minimum payments.

No, for now, you pay full debt snowball.

You pay everything on the smallest debt.

When and if you get pregnant, then you push pause on your debt snowball and pile up cash instead of reducing debt until baby comes.

Okay.

And then you use that cash to pay on the debt if baby comes.

I mean, I'm sure you've got health insurance, don't you?

Yeah.

Okay.

Covers labor delivery, right?

Yeah.

Okay.

Good.

You can find out you're deductible.

You're out of pocket money.

Okay.

What's your household income?

240 crores.

240 thousand dollars.

Gross, gross.

Yeah.

Well, it's not gross at all.

That's pretty cool.

Yeah.

I think you can afford a baby, kid.

Okay.

People have babies are six.

I don't care.

I mean, you're in good shape.

You're fine.

You're fine.

There's nothing to be anxious about.

Yeah.

But you do have to focus and be thoughtful.

But children do not cost $300,000.

They're not.

It's not.

It's not that big a deal.

I mean, little money on some diapers and formula.

And they don't take up much room.

So you don't.

Unless you go crazy, go spend $100,000 redoing the nursery that the kid doesn't even know

is there.

But that's you going crazy.

That's not the kid.

That's you.

And so, but I mean, they just need a place to sleep.

And so I was with the guy the other day, where he wants to.

And he was telling this story.

Oh, I know where it was now.

And he said, when he was born, his parents lived in a one bedroom studio apartment.

And they had a dresser drawer thing, a dresser drawers that they bought at a garage sale.

And they opened up the top drawer.

And that was his bassinet.

That's incredible.

That's old school right there.

That's how he started out life.

And he doesn't even remember.

And he's a wealthy guy.

And he's a wealthy guy.

That's incredible.

Yeah.

So, yeah, the kids don't cost much.

You just need a dresser drawer.

Just 31.

Welcome back to the Ramsey show in the Fair Winds Credit Union studio.

I'm Dave Ramsey, your host, George Campbell Ramsey.

Personality is my co-host today.

We're so glad you're with us.

Open phones, a triple eight eight two five five two two five.

Marie is in Philadelphia.

Hi, Marie.

How are you?

I'm good.

How are you?

Better than I deserve.

What's up?

So, my husband has committed financial insidelity three times.

And every time that he was caught, we had to refinance and all of that.

So, he runs up debt behind your back and lies to you.

Yep.

Yep.

100%.

And I told him the third time, if he does it again, we will divorce.

I'm not doing this anymore.

So, he did it again.

Are you divorcing?

I just happened like two weeks ago.

The third time was two weeks ago.

The fourth time was two weeks ago.

I found out.

He did not come clean.

I found it.

My friend does financial whatever for a company and she helped me do a credit

strike on him and we found it.

So, are you divorcing then?

I checked in yesterday online to see how to get divorce papers.

Yeah.

I'm still going back and forth.

I just, I, yeah, we've been married 41 years together.

My question is, I have, so I've homeschooled our five children.

We have 11 grandkids.

I started a cleaning business that shifts me after our son, young son, graduated.

So, I've been taking that money and we put it into a savings and we consider it like fun money.

So, we use it for vacation, house projects, whatever.

My question is, do I go and get his name off of that account?

You need to go see a divorce attorney and let them advise you on what you're allowed to do in the state of Pennsylvania while filing divorce.

Whether you can take names off of accounts or not.

I don't know if you can do that there.

Yeah.

But yeah, I mean, you've got to protect yourself in any way that is legally allowable.

But you certainly need to take pictures of the account so that you know that that money is there.

And if it disappears then, you've at least got something to hold against him.

You know, while you go through the divorce and, you know, for instance, if it how much is in that account?

My account, uh, 7,000.

Oh, so it's not much.

Okay.

And he's never touched it thus far.

Well, we used it, yeah, we used it for everything.

I mean, he's not stolen from it and lied about that account.

I'm not not that I know of it because.

Okay.

So I'm dyslexic with numbers.

He knows that.

But he always has paid our bills.

He's always on our finances.

And I put my guard down last year.

I should not have done it.

And he went and started using a credit card.

And I was just like some of a gun.

I just, you know, can't believe that you did this for the fourth time in our marriage.

So I, yeah, I don't know because.

Well, the 7,000 dollars is probably going to be used as your attorney's fee.

Okay.

And so do you guys have, do you guys have any, do you have any assets?

Do you have any money in the marriage?

We have nothing.

Nope.

We have nothing.

You own a house?

Yeah.

We own a house.

That's it.

What's it worth?

We have my daughter's mother-in-law.

She's a realtor.

And she said she thinks she can get between five and six out 100,000.

What do you want it?

It's an acre lot.

Huh?

What do you owe on it?

Nothing.

It was paid off five years ago.

Okay.

So have you guys attempted marriage counseling?

We did when he did this the last time.

And it got better.

The problem was so we, he said number credit cards.

We had no credit cards and we took a trip for 40th anniversary last year to Utah.

And they would not let us rent a car and left.

We had a credit credit card.

No, that's not true.

Well, he, I don't know.

We, he said he tried.

They won't take debit cards.

They won't take checks.

They won't take cash.

He said, I have to rent a car.

You have to have a credit card.

So he tried.

I think it's capital one.

And so he did.

And I should have taken it.

And I asked him the other day.

I said, I want the credit card.

He said, no.

And I was like, okay.

Well, there's that.

Is your name on any of these debts or cards?

The ones that were paying 80,000 off.

So we consolidated.

So they take out 600 every month from our checking account.

And I guess a barter with the companies to pay off whatever.

Did you work with the debt settlement relief company?

One of these scummy companies out there.

Yes, that's what she did.

Yes, that's what we're with.

Okay.

Yeah.

She have $80,000 in debt on credit cards.

And you have a $500,000 paid for house.

And do you make enough to live on?

I do not.

I only work two days a week.

There's three days.

I think.

How are you going to eat?

That's my, yeah.

I'm going to have to work full time.

That's the only way.

Yeah.

How old are you?

Me.

60.

Okay.

Oh, Marie, I'm so sorry.

I wish marriage counseling would have fixed this.

But it sounds like your husband is just whatever.

I don't know what he is.

Do you know where he's spending all this money?

Is he an addict?

Some sort?

No.

So that's what I checked on.

And my friend, he does finances for Armstrong.

She said everything shows it's just gas and food.

And one was on loads.

It's all like petty stuff.

It's like, I don't understand.

I, yeah, I don't know.

What does he make this frustrating?

He only makes, uh, he almost made 60,000 last year.

He had a job, the same job for 35, 35 years.

Um, they closed up.

It was a printing company.

And of course, you know, computers took over that.

So, um, he got a better, he got a job.

I mean, he doesn't have to work friendship anymore.

And he doesn't have to work weekend.

But he took a big pay cut.

Yeah.

Marie, I think you need to, um, get in touch with your pastor,

get in touch with your marriage counselor.

And you need to sit down and have a initial discussion with a divorce attorney.

And you need to look at the reality of what this is facing here.

I'm sorry, you're facing this.

And I wish your husband, wish I could yell at him and make him behave.

But I can't, and you can either, obviously.

And I can't believe 41 years down the toilet with grandkids everywhere and everything else.

That's just, that's just devastating.

And, um, but I don't understand a guy who's willing to give up all of that either

for just simply for the use of a credit card.

It doesn't make any sense at all.

And lying to his wife.

Right, some pathological freaking habit.

Ugh.

Horrible.

Just horrible.

I guess it's proof that, uh, integrity matters even after 41 years.

Yeah.

That's brutal.

We see a lot of this with couples that have been married so long.

Kids are finally out of the house and then they have to face the spouse and go, oh my gosh.

This misbehavior.

I've been dealing with it and putting up with it for far too long.

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 Ramsey.

Ask your money question and get answers built on Ramsey 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 RamseySolutions.com.

Well, we wish we could get to every single call and every single question here on the show.

If you have a money question and you want an answer for your situation, head on over to our website and use Ask Ramsey.

Ask Ramsey is our free AI tool that is built and trained on hours and hours and hours and hours and days and days and days of the show on proven Ramsey principles.

So you're going to get an answer pretty much the same answer you get exactly here on the air because that's who trained it.

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You'll get the answer the same way we do it right here.

Ask Ramsey.

You can ask your question today at RamseySolutions.com completely free.

Just click the link in the description if you're listening on podcast or YouTube.

Ask Ramsey.

George, this little project has exploded.

I was meeting with one of our leaders today and he was telling me the bazillion people, the numbers are crazy.

The number of people that are going to ask Ramsey.

It's working.

It's a good idea, but I don't know if it works.

Yeah, well, you put a tool out there and you go, well, people use this instead of trying to search the internet for a brand of answer and it's working.

Well, and you don't have to ask your question in front of 32 million people, which you do on the show.

That helps too.

Sharon is an Atlanta.

Hi, Sharon. How are you?

I'm just fine.

I'll give you a day.

How are you?

Better than I deserve.

How can I help?

Okay, this is my question.

I have almost $200,000 in consumer debt.

Good Lord.

I know $250,000, $2,000 on the mortgage.

And so my question is, should I stop my Roth that I have?

Yes.

Okay.

You should stop everything and clean up his mess.

What in the world do you owe $200,000 on them?

I owe about $7,000, $1,000, $1,000 credit cards, $35,000 finance companies, and $6,000,000 in taxes, and $20,000 on a car.

Why'd you not pay your taxes?

Well, I have had them.

No, you didn't pay them.

No, you didn't pay them.

That's why you have $61,000 in debt.

I'm working on it.

Look, I just put on a date.

I found you at the end of last year and I have turned my household upside down.

I'm not working on it.

I'm glad.

I'm glad.

I mean, why did you not pay your taxes?

Well, I haven't paid them in full, but I've been paying them on a monthly basis.

I know.

I'm asking why you didn't pay them originally.

Seriously.

Okay.

The reason why is because with my husband's job, he's a contractor, and you know if you don't lay that 25% to decide.

Yes.

So you've not been doing your quarterly estimates and you got behind because he's a $10,99.

Okay.

That makes sense.

Okay.

So what's your household income, Sharon?

$286,000.

Well, that's good news.

Woo.

So when you decide to turn this house upside down, you can shake this $200K out pretty quick, can't you?

And that's what I'm thinking.

But you know, that's what I'm planning on doing.

Good.

But this is the first course that one of the first courses I have.

The taxes come first, correct?

Yes, ma'am.

Okay.

Because the interest rate is unbelievably, and the penalties are unbelievably high.

And the end, more importantly than that, they have almost unlimited power to screw up your life.

Gotcha.

They can just show up and take all the money they're checking account.

They don't even have to ask a judge.

They just do it.

Okay.

Okay.

So this is $1,000.

What I'm thinking is that probably in the next one, two, three, four, maybe five to six months.

I can have the $6,000,000 paid off.

That's good.

That's good.

You don't have any money in savings.

There's not retirement.

In savings.

Well, that's $3,000, $4,000.

That's about it.

Okay.

That needs to be $1,000 and we throw the rest of it at the taxes.

And then let's get the budget done.

And you and the husband sit down.

Look at that budget.

And go scorched earth, no life.

And we're getting these taxes gone.

And once the stupid IRS is gone and we never, and we file quarterly estimates from this point forward.

So we never get back there again.

Right.

Definitely.

Good, good.

And then we're going to work the rest of the debts off smallest to largest using the debt snowball.

And stop all investing, stop all savings.

And let's focus on this because you make enough money to not be this broke.

Right.

Definitely.

Well, you know what?

I didn't realize I was this broke until I started listening to you.

That almost sounds like it's my fault.

Finally, listen to you, Dave.

I wouldn't be here.

Oh, my goodness.

You know what?

I turned this house, I turned these bank accounts that we have upside down.

Good.

Good.

Shaking, shaking the nickels out.

Is he on board too?

Oh, yeah.

Well, he had no choice because he had been doing the budget for 43 years.

And I'm like, OK, we're going to do them together.

So it's somewhat my fault.

But as of right now, where do you learn how to budget?

Congress.

Now, I love it.

You guys are great.

That's wild.

You're going to do good, Sharon.

I'm proud of you.

You probably have 1820K who's slipping through your hands every month.

Now we just got to get control of it.

Yeah.

You're going to be able to knock some stuff out fast.

Hang on.

We're going to send you a copy of the book, The Total Money Makeover to make sure you get all your questions answered.

It takes you to the baby steps on steroids.

And as you're working through this, you're going to want to know a few of those odds and ends.

And you call me back anytime, kiddo.

I got to feel and you're going to do good.

She's on fire.

Yeah.

She's spunky.

She's on fire.

Fire it up.

Burn these bank accounts upside down, shake all the nickels out of them.

I like her.

She's flipping the couch cushions up looking for some change.

I'm telling you, this is going to happen.

Ty is with us in Milwaukee.

Hi, Ty.

How are you?

Good.

How are you?

Better than I deserve.

What's up?

I have.

I have.

So I'm new.

I haven't.

New to listening to your show.

And by the way, it's a great show.

Well, welcome.

Good to have you.

Yeah.

I had a question.

So my fiance and I were getting married in October.

Good.

We have a we have a wedding to pay for.

And then we also have.

Around.

We have some student loan.

Yes.