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“>> Normal is broken common sense is weird.”

So we're here to help you transform a yellow life from the Ramsey Network in the Fairwins Credit Union Studio. This is the Ramsey Show on Jade Worsha. Next to me, G.K. George Campbell taking your calls. Really for the next three hours, it's going to feel like two hours to you.

>> It's going to fly by. >> Yeah. >> Because literally the amount of show they hear. >> That's right. >> Ads and radio breaks. >> That's right.

But for us, it's three hours in the studio. And we've got Sam who was on the line in Cincinnati.

Oh, hi, oh, hey, Sam, how can we help today?

>> Hey, can you guys hear me? >> We can. Can you hear us? >> I am 19 years old, sorry, yes, I can. I'm 19 years old, I just graduated high school.

I'm heading to college about 45 minutes away. We come and home on the weekends because I have a lawn and landscaping business that I like to keep up. And so I have a truck that's not good on gas management. So I'm looking to buy a car, something small like a Honda Accord.

My parents told me to send the buy something a little nicer and reliable. Maybe around $20,000, but that would take me down really low on cash. And so I'd have to say, got a loan. I'd have to buy something around $10,000 and just pay it in cash and just get something to get the job done.

“>> Have you ever heard the phrase that people vote with their wallets when it comes to politics?”

They vote for what's best for them financially.

I think your parents should vote with their wallet if they're going to have a say in you taking on a car, right? So unless they're paying for it, I know they want Sam to have a nice reliable car, but Sam can only afford an $8,000 car and he's going to get the best one he can at that money.

>> Yeah. That's where it is. >> I will say I have around $20,000 now in cash and up until August, I'll be making anywhere between $152,200 a week. >> Wow. >> And so I'm then I have another around $16,000 in tools and equipment.

That's all paid off, those all paid in cash. >> Wow, good job. >> Excellent. >> So I just, I don't know if that change is the scenario. >> It doesn't.

What that tells me is you're so smart with money and you understand the power of cash, and it sounds like you understand the power of delayed gratification, right? And that's kind of what this car business is about. I, it sounds like you don't want to go all the way down to zero in savings, and I actually think that's very wise.

And I think you understand, I'm 19, I don't need a $20,000 car, so you understand the difference of needs versus wants.

“So that's what's gotten you this far, and your parents, God love them.”

I think that they're, you know, they're not trying to jack you or try to do anything negative. They're just, they want you to have a safe car, and they probably somewhere in their minds don't believe that you can find a $10,000 car that checks all the boxes. And I think that, when you do it, they'll go, oh, that is nice. That does work.

>> I'm curious, do they know how well you're doing, how much cash you have? >> Yeah, they do, my dad's going to count, and I like to call him my own accountant. >> He runs all my numbers. >> Wow, okay, so how much of that 20k would you call your emergency fund? >> In terms of expenses, I guess, when I go to college, I honestly don't know how much I'm

going to spend, it's been a little town called Cedarville, and there's not much to do. So I'm guessing I'm not going to spend any more than $300 a month. >> Wow. >> Well, let's say 10,000 is your emergency fund. Okay, and let's say the other 10,000 becomes your car fund, and you can make $1500 a week in bank

most of that. >> Yeah. >> How many more weeks can you work? >> Now until mid August, so I don't know how many weeks. >> Oh, that gets us at two months.

Okay, we'll call seven weeks, right, and let's go on the low end. You said you can make $1500 a week on the lower end. >> Yes. >> Okay, $1500 a week, seven weeks, that's over 10,000 bucks. So you take your 10,000 you have, call out the car fund, a new 10,000 from your future income.

Now you could buy a $20,000 car in cash. Do you need a $20,000 car? >> Yeah. >> Absolutely not. You could find a great Honda Accord, that's a, you know, 2016 for 12, 15 grand, probably.

>> Sure, okay, yeah, yeah, well, I appreciate you guys. >> Yeah. >> You've got some options. I love to hear a responsible young, lad handling his money with care, love that. All right, Abby and Birmingham, Alabama is next up.

Hey, Abby, how can George and I help? >> Yeah, so I had a question about loss insurance. So I'm 27, that's the 28th.

to all, and got a $200,000 term policy, which, you know, you can keep it to your idea, whatever.

And I went to go cancel my whole loss every day, and they told me out of it, because there were, well, what happens when it gets to the point you can't pay it anymore? Like, you know, the band are like five years, so it will go up like a percentage to every five years. Now, about what I'm doing day brandy, and that's, you chose the self-insured by the time

that happened anyways. >> Yeah, they were, you know, they were in the own part of Zander. He makes money off all of our lives. >> That's hilarious. Crazy town.

>> So now, you know, they've no integrity, because they've already lied to your face, and they're trying to convince you to keep it, so they can keep their commissions. >> Yeah.

“>> So a little bit of a vested interest to ask them if you should keep it.”

>> All right, because I wasn't going to do the surrender for whatever.

>> You know, you told me all that, and I mean, what do I, I know it's a scam in the end, but there's also this thing about you can pause it, quit making payments on it, but not really surrender. >> Okay. So here's the issue.

>> Um, there's the issue. >> No, because you have two products wrapped up in one, right? Part of what you're paying every single month is being invested, and it's being invested at a very poor rate of return, very, very bad. Somewhere between one to three percent is what I would estimate.

That cash value is crawling, you could do better on a high yield savings account than you could with that cash value. >> No, if you pass away, your family doesn't get to keep that cash value. That goes away, that goes back to your insurance agent who sold you this, right? And so what we're suggesting is, let's just pay for insurance.

Let's just pay a little bit or a lot less per month on the term life insurance than the extra money that you're not paying in that premium, you could take that and invest that

“10 percent, or if you don't want to invest it, you could apply it to your budget, right?”

Whatever, baby step you're on. So you're saving yourself money by simply buying insurance. And if you believe what we teach about the baby steps, there is a time to pay off debt, there's a time to save money, there's a time to have insurance, there's a time to invest. And so that's a great way to think of it is, right?

Now as a time to buy insurance, when you're ready to invest, you'll be doing that at 15 percent,

and you'll be doing that earning, probably 10 to 11 percent in the market. Well, what's your current payment you're making for that whole life insurance policy? I think it's 51.87 a month, so go on and pay 50, please. 51.87, like $51.87, yes. Okay, and the death benefit is real small, 75,000.

That's not going to get you very far, if something were to happen to you. What is your household income? Or your personal income, sorry, about probably right at 30. I'm like a poor, I clean houses right now. I'm actually a nurse, but I had a baby and been doing what I can do to.

Okay. Cast flow on my husband's work in his little son. Cool. So we recommend having 10 to 12 times your income. So you're actually a little low on that 200 side for his under, I would up to 300.

You can also get another policy versus just trying to swap it out if you already have it. Under that policy, don't trust them, run far, far away from any kind of permanent life. Your mind as well, light your money on fire. Yeah, just remember the purpose of life insurance is for anybody who's dependent on your

income, if something were to happen to you, this is to replace that, it's to make sure that they're okay. And 75,000 dollars is maybe going to get them a year of life, but you want to set them up for life, which is why you want 10 to 12 times your income. , let me tell you what I get asked all the time.

When should I get term life insurance, how much do I need, is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is term life isn't a baby step.

“So if anyone is dependent on your income, you need to have 10 to 12 times your income in life”

insurance. Now, and most people are surprised by how affordable term life really is. Even if you're not in perfect health, look, I understand the hesitation. Since most insurance companies make it more of a hassle than it needs to be. Not as under insurance.

They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates,

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you're on the line. How can we help? Hi, how are you? Excellent. I'm doing all right, thank you, but honestly, I'm on the show today to just ask as someone

who has, I really feel like I've asked it almost every option and has done everything to cut spending and all those things to down her debts, like what are suggestions and recommendations

“that you have to generate more income to keep aggressively attacking debt?”

Yeah, so tell us where you're at right now. You've cut your budget back, and with everything pulled back to a skeleton, how much margin do you have right now? Very, very little, so I recently became unemployed. I was working on a minimum wage budget before, and after leaving that job, I thankfully got

a job today, but I want to start that whole two weeks, and it's going to pay me 20 an hour, so it's significantly more than what I was working with before, but before, I think I only had about $20 a few after you've been staying alive like the BG's, like you've been barely making it, and now there's like, you know, sun starting to part through the clouds, and it's, you know, you've got $20 an hour, this is great, are you behind

on anything? Yes, I am. Tell us what you're behind on. Yeah, I am behind on my credit card debts and a personal loan debt. Okay, so you start this job, you'll be working 40 hours a week?

Yes. Okay, excellent. All right, so let's go through the debt so we can get a picture of it, and then we can try

“to help you find kind of where you are today and where you need to go next.”

So we know you're behind on the credit card, the personal loan, what are the total amounts of those debts? In total, it's minus, like my student loan debt, it's about $20, $29,000. Okay, $29,000 minus the student loan debt. If we added student loans in there, what's the total?

Um, about $50,000. Okay. Okay, so another $20,000 student loan debt? Yes. Okay, cool.

Alrighty then, um, yeah, so you've got this job, you're starting to work.

The first thing that you're going to do when you get that first paycheck is let's get

current on everything. Let's get current on everything, and let's make sure we've got our four walls work. The first thing you're going to do is I pay my rent, and then I pay my utilities. I make sure there's gas in the car, and I make sure there's groceries. Those are the four things first, and then we're getting current on anything that's behind.

So that's the first thing right down in your notebook. And then after that, we can begin to say, okay, what's a normal rhythm going to look like going forward? We've got everything taken care of. We're going to make sure to give you every dollar, which is how you're going to budget

your money. Do you have it already? Every dollar out. Yeah. Do you have it?

Okay. Excellent. Have you opened it? Have you gotten started in it? Not yet.

I recently came across it. Okay. So that's homework number two. Tonight you're going to open up every dollar, and you're going to do the math and say, okay,

“if I work $40 a week at this new job, what are my paychecks going to be?”

Do you get paid by weekly? If you get paid a month, however you get paid, put it in there, and then we're going to start to run out all the things I just said.

First, you're doing those four walls, then you're getting current on everything, and then

we're going to find out how much margin there is. And whatever margin you have left, that is going at your smallest debt on top of the minimum payment. So your smallest debt is probably one of these credit cards I'm guessing. How much is it?

First, having all of it, A bill from the IRS right now is the smallest. Did you factor that into the 50k, or is that on top of it? Yeah. That's that's factored in. Would you owe them $986 in 31 cents?

Okay. Cool. So that's the first goal. We put the IRS debt at the very, very top because they can really screw up your life, and

they basically have unlimited access to your financial world.

So we're going to attack that one first. Luckily it's the smallest, so it will be gone real fast. So I'm curious. You said you had 20 bucks left at the end of the month with your old job.

a month after taxes. Hopefully. Okay.

“So now how much margin would you have then?”

If you kept your expenses this low and made your minimum payments on debt, how much extra

could you have? The country we want. We can help you if you tell us what you were making before. I was making 14 an hour before. Okay.

So you're getting about $12,000 raise. So let's call that you're getting an extra $700 a month. That's big. That's major for you. But it's good, but I don't want us to stop there because how old are you, Emily?

I am $27. Okay. Your 27 years old, which is you're at a major crossroads right now. You felt what it feels like to struggle, but at 27, I don't want you waking up at 37, feeling the same way, right?

I'm making 20 bucks an hour, I'm trying to make ends meet, I'm just looking for margin.

So I want the bigger goal to be, I don't want to feel like this, I don't want to be floundering, I want to plan. And so I'd be looking for what is it that I want to do with my career? What do I see myself doing, five years down the line, 10 years down the line, 20 years down the line, and I'd start making a plan for what it looks like to start accomplishing

“that, because we can give you quick fixes for how to get margin, because the truth is,”

yeah, you are going to need a side hustle on top of this $20 an hour job. You are going to need to pay off this debt, you are going to need to handle that side of things, but if you can start looking on the career side of things, that's really what's going to break you free long term. And short term, there's a lot of things you can do to up the income.

And Emily, let me encourage you, I was exactly where you were when I was 23. I started at Ramsey, I was 40 grand in debt with my consumer debts, credit card, student loans, and I was making about that. So it was overwhelming to see those numbers. So what I started doing was finding out what stuff do I have around the house I could sell?

Is there anything I could flip that I could buy cheap on Facebook and then sell for more? Can I do any of these delivery jobs? Back in the day, they didn't even have door-dash and Uber-Eat. So I was doing Uber and Lyft driving people around nights and weekends, and then look at your tax with holdings.

If you're getting a big refund at the end of the year, we can change that. Are you doing any investing right now? I am, actually. Okay, I would pause that down to zero, because that's going to free up a couple hundred bucks, probably, right?

Yeah, perfect. I have. So every single extra dollar we can find is going to get thrown at this debt. And you will get back to investing in no time, and you will retire a multimillionaire if you follow this plan.

And then there's also all kinds of things you can be like babysitting, dog-sitting, pet walking, I mean, babysitting is where the cash is. That's where the bag resides. I don't know when. And babysitter started charging like 20 something dollars an hour, but it's gotten insane.

I sound who has to pay these people. I have come across, and I'm sorry to say that I have paid as much as $30 an hour for a baby sitter. Uh-huh. Now, this is the type that, you know, cleans up after the kids, puts everything

away, will fold the laundry, will put things, you know, it's not just, I just sit there on my phone while I write. So I would encourage you to look into some of those service-based positions because people will pay because they need it, and you could just get a baby done. There's apps, like, you know, [email protected], you make an account, and people will find

you. And if you have, you know, if you look like a sane person with a decent profile picture, they're go, okay. Yes. Let's see if Emily can handle this and Omaha.

And so there's going to be a lot of things you can do. I'm going to send you my book Breaking Free from Broke. There's a whole chapter called Margin is breathing room where I show people. Here's all the ways you can spend less. There's all the ways you can make more.

That's it. Those are the two levers, and you've already done so much good work and spending less. So now it's how can we make more in the short term, and then long term, how do we get that core income up with our full-time job? But I have a lot of faith that you will get through this.

My guess is less than two years. Yeah. I do too.

But the key thing is this is the crossroads.

And for anybody listening, when you have that, I've had it moment, which is what Emily essentially has had, which is, I'm tired of struggling, I'm tired of just staying alive, I'm tired of just holding on by my fingernails to get through a day.

“That's when the rubber meets the road, and you have to decide if you do the things that”

we teach. The time is going to pass anyway and to Georgia's point. You are going to wake up on the other side, you'll be out of debt, you'll have savings for the first time ever, and you'll be well on your way to building wealth. When I started, I had great ideas and I knew how to serve people, but I didn't have

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Back to the phone lines we go, we've got John who's in Reno, Nevada for ever reminding me of Sister Act. What's going on, John? How can we help? Yeah, hi, I have a question right now, my daughter's not speaking to me because there was

comments that I said about me not putting myself in debt for her to go to college, and

never said I wouldn't help her, it's just, you know, I don't want to put my family to endanger

for putting me in the loan, so then after that, I mean, it's been probably now a year and three months that she hasn't talked to me. And I guess my question is, I make about 185,000, I have $45,000 in debt. I still want to help her, but I just don't know how to do this or how to even explain it to her, it's just, you know, it just got pretty ugly.

Can I ask a question, I feel like for whatever reason I'm making an assumption and I don't want to make it if I'm wrong, is your wife involved or is this a, is it just you and her or is there a wife involved, tell me, tell me about your family situation. So yeah, for me, for me and my wife are willing to help out, right?

“And the only thing is just one of the things that we don't try to do is put ourselves in”

the loan. I just wanted to make sure I understood the family dynamics. When did this conversation start? I'm curious. Because this is like, if we know that eventually someone might go to college.

And then the work of June 20, 25, that's when you started the conversation. Yeah. Okay. And when is college supposed to begin? Well, she actually graduated this year and she decided to go out of state and college

too. Okay.

And you guys never got this conversation.

We had the conversation a couple of years back, but her mom and what I'm, I'm not with her mom. That's what I've never did. Yeah. I guess they never give me type of information or anything, you know, like to be able to

clear things out.

“They just like, oh, you need to pay for this.”

And then in that same conversation, they're like, oh, well, can you at least help for the car? And I was like, what car are we buying? So there was never really any type of information given to me other than just little bits and pieces and they'd be expecting me to do right there and then.

Okay. Understood. That's, that's the family dynamic I was trying to get to. I had a sense that something there was a separation or, you know, your wife is not in the house.

Here's, here's what I think is happening.

And I could be wrong, but just by the way that you're saying your words, it sounds more like you're talking more about what you're not going to do versus talking about what you are going to do. And I would be leading the conversation with exactly what I'm going to do to help. And I think if you do that, then it'll cause them to hang out there as well and remember

that from the conversation. For example, if she says, but daddy, I want to go to this school and the only way I'm going to go is going to, I need a $30,000 loan. And you say, I'm not taking $30,000 loan, right? That's not going to work.

But if she says, but daddy, I want to go to this college and you say, honey, I'm going to give you $15,000 for college. It's up to you to figure out which school you can go to where that money will go the furthest. Here are my suggestions.

Do you see what I'm saying? That's a very, that's a very different conversation. Now you've never said no. You've never said no. You've just said, here's what I'm saying, yes, too.

And I think that that would go a long way. Because if what's happening is true, which is, there haven't a bunch of side conversations

your best protection is to be able to say over and over.

I'm giving her the $15,000. I'm giving her the $15,000. I've said I would pay up to this point for this particular school. So if you're being accused of not caring, show that you care by saying, here's a school that works.

It's in my budget. If we all pull our money, we can do it like this, right? Let's solve the problem, everybody talking about what we can't do. Yeah. And that I did try, but that thing is like, no, she needs to go here.

“That's what she wants to do, and that's what she's going to do.”

And then at that point, I was like, hey, well, I'm not going to be able to do it, especially with out of state. And then you've got to pay out of state fees, too. So are you not helping at all financially right now? Yeah.

So what I did was just put, you know, I put myself in child support and all that stuff. So I've been paying all that child support. And that's pretty much a, and when she comes to, she came to the house before, you know, she had her own room, her own place, to be. And I had, you know, told her, like, hey, if you need anything, you know, come to talk

to dad. Well, not anything. Sure. Yeah. Like, whoa, what I meant, like, when I came to school, you know, let me know and

we'll talk, but I don't need to be talking to your mom because it just becomes a to talk, sick. Well, that's what I want to know.

“What is relationship with mom versus you on how long has it been like that?”

So it's been 18 years.

I never married her, so I have my own family with my wife.

Okay. Yeah. So yeah, with my wife, I never married her, so I never been with her ever since my kid was born. So this is just kind of been for lack of a better word, like baby mama drama for 18 years back and forth, back and forth.

Okay. That makes a lot more sense. No, I just want to. I want to clarify just to get down to brass tax. We understand you're not going into debt.

I would not, I would agree with you. And I think George would too. We're not going into debt. I'm not signing a parent plus loan. I'm not going to recommend for her to go into debt.

How much, how much money do you plan to give her every month or every semester for college? What's the number that you have in your head? That I don't have, but I mean, I could come up with the number. That's what we need.

Yeah, I restart this relationship. I think if you going to her and saying, Hey, I have really screwed this up and I'm so sorry. There was a lack of clarity. I did not communicate well.

I communicated too late and that's on me. What I do want to do is restart this conversation and create a plan for you to go to college debt free. And here's how much I can do right now based on my financial situation. Would that get her to perk up?

I'm hoping. Yeah. Because there's so much deeper here. This is there's a lot of relational issues. This money thing is just like one baby symptom of years and years of broken relationships.

And I think she's now seeing this as, man, this guy hasn't been there for me relationally and he's not even here for me financially.

“Well, yeah, and that's how it seems, right?”

And the thing is that I always been there for her.

She's stayed with me like I told you guys like every weekend and stuff like that. I made sure that I went to the court, Scotch, I'll support on myself and then make sure that I had a visitation with her because I knew that we're going to try to pull her away. So I made myself available for her. It sounds like they're stitching up a net to me.

There's two conflicting family dynamics. You've got a family over here who were a no debt family and then there's a family on this and for her that's like, hey, whatever it takes, we're going to do it. And she's caught in the middle of that is what it sounds like. I agree with George wholeheartedly.

If you come to her because I'm going to tell you like this, my dad said to me, I'm not, when I said, I want to go to the school and I need a loan, he said, I'm not doing student loans. He said to me straight up, he's like, you better get a scholarship, you better be good at sports because I'm not taking out no student loans is what he said. And I was like, okay, you know, and I remember at the time feeling away about it because

you know, you're 18, you're 17, you're 16, you're young, but on this side, I'm like, oh, thank goodness, I'm really glad that he didn't in snare both of us, you know, I went on and I was hardheaded and took out some loans, but at least it wasn't a parent plus loan and at least I didn't in snare him in it. So I think on the flip side, like, longer down the line, she's going to appreciate that.

But if you do what George said and you humble yourself and apologize for not starting this conversation earlier as the adult, she is, that's going to do something to her on the inside because parents don't apologize to children and enough for the mistakes that they make. And so please, please do that and don't do it in the heat of the, you know, the next

Use, you go first, call her up and get, hey, can I take you out to lunch, can I take

you out to dinner, sit her down and go, I messed up, and here's how I, how I did it.

“And I think that's going to change the whole landscape from us going forward.”

Yeah, no. I agree. Cool, cool, cool. Well, it's a great wake up called all the parents out there. Do not start this conversation as your child is touring schools.

Start this conversation at 12 at 14 at 15, so there's no surprises. Your kid knows exactly where you stand. Hey, I will cover four years at an in-state school. That's right. That's what I'm willing to cover.

And if you can't, if you don't have the money, that's okay. As long as you have set the expectation, I don't have the money for college. You're going to have to get a job. You're going to have to do workstays. You're going to have to go to community college.

As long as you set the expectation, that's all we can really ask of you.

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So get real legal help at GuardianLit.com/RAMSI. That's GuardianLIT.com/RAMSI. It's earning advertising results may vary in no specific outcomes guaranteed. All right, back to the phone lines, we go where we have Timmy, who is in Dallas, Texas. Hey, Timmy, how can Georgia and I help you out today?

Hey, good afternoon. Hey, shut out to a smart money at the hour. Hey, don't go hard. Good afternoon. Good afternoon.

No, it's a baby baby. And great, thank you. Keep going for hope. Oh, you're welcome. It's Friday.

I know you guys aren't going to see this till later, but it's Friday. So I feel like I'm all right, we're fine. How can we help Timmy? All right, so my wife did call last week about our mobile home. So we out about 80, we owe 80, 98,000.

Okay, I think I remember this. I think I remember this. It's a balla in Dallas, Texas, but we finally got an appraisal in the difference is $33,000. That's what it's worth. Here you're saying it's worth $65.

Okay. $65, yes. Okay. So you're $33,000? I know.

Yes, yes. So that's fun. So we're already wearing baby step three. And so we have right now saved up, I want to say $2,000. And so now is, now is like, which way do I go?

Right? I want to show this thing like Dave said last time. It's just, I just, I'm financially illiterate, I just don't want to. Yeah, I would, I, this is going down every single day that you wait for those who didn't hear that episode.

Yeah, your wife called in. This was something that was really keeping you guys stuck and we suggested that you sell it right away, get it a praise, sell it right away. So you've got the appraisal and the way to get from upside down on this is you've got to get a loan for the difference.

And as much fun as that's not going to be, it's better to have $33,000 of debt than to have $98,000 of debt. That's just creating a bigger gap day by day by day, right, basically going up.

“So that's what I would do, I would try to go down to the credit union if you can, try to find”

something with as low as, you know, lowest interest rate as you can, but the key is we've got to get out of this mobile home that's going down now. Tell me about the land, because I don't remember, do you guys own the land or where is it? Unfortunately, we do just run out the land and so each year it just keeps increasing. So right now we're at nine, 50.

No, we got to get out of this. Yeah. Yeah. And find some place to rent for a while and just kind of clear your minds of this thing that did not go well for you.

How much money do you guys have right now?

I don't get off. It's just so late in the game. Yeah. One time.

“How much money do you guys have right now to your name?”

I would say, and saving checking, just $3,000. Okay. Because I'm wondering, I'm guessing the time it would take you to save up the gap, it would be a year or two from now, right? Correct.

Correct. To save up $33,000.

What's your current household income?

Current household income is $80,000. Okay. And what's your monthly expenses? How much is that up to to cover everything? $2,700.

Okay. So there should be some margin at the end of each month right now, right? Yes. Yes, there is. Okay.

I can home $60 and spending $30, you could save up $30,000 a year. Again, the value is going to go down, so the gap is only going to grow with this right. Because the appraisals only going to come back the same or lower next time you do it. Yeah. I mean, if you take out that loan for the difference and then you get very aggressive

“about paying off that $33,000, that's the choice you have to make.”

I'd hope that you could do that within the year as well if you got extremely aggressive. it's your choice, but if I were in your shoes today, I think I'd call it and get out of there. Have you looked at rent in your area? Unfortunately, I think rents pretty high in my area. So it's going to be around $1,700. But it did. But it did. Better than just like at $2. If I remember correctly, didn't you tell me that the interest rate on this thing is crazy, so your payments high on the

payment super high? 0.5, yeah. Okay, what are you paying every month for it? The mortgage alone is 1100. But then the rental. Plus a lot rent, yeah, 950. So yeah, this is going to be cheap. It's going to be cheaper for you to rent. I mean, you'll have to pay right, you have the $33,000 loan, so you'll have to put some margin towards that. But you're putting two grand towards housing already. Right. It's what we're saying. Yeah. Okay. And so putting two thousand towards something that

helps you build for your future is way better than something that's going down in value like a vehicle. So this is not going to be fun. And I don't know how easy it's going to be to get a loan for the difference on this. But that's your option other than selling stuff aggressively, saving up as much income as you can. But again, that's going that could be a year from now, so you can get out of this. Do your do your do your do your due diligence see what you can find. And as a last resort,

yeah, go ahead and cash flow. But when when when we say cash flow, we don't mean like doop doop doop doop.

We mean everybody's picking up second and third jobs. And we are attacking this like a virus.

Like we're going crazy on it. Okay. We want you to get out of this for good. Shelley is in Atlanta, Georgia. Shelley, how can we help today? Thank you for taking my call. I've been listening for a quite well now. And I really appreciate everything guys do. You too are my favorites. Oh, thank you. Anyway, my question is, my husband was diagnosed with dementia about a year and a half ago. Even doing treatments every two weeks. We have very

expensive insurance, but it is covering it. So that's the good thing he's doing quite well. Good. He's 77, and he works part-time still. So we're not just one day a week, but it's just something to do. You know? Yeah. My question is, I'm trying to say but fill up our emergency funds. And we're completely get free. House is paid off. Everything is done. I'm 65. And I still work full time. My question is, do I keep putting money into the emergency fund to get to the recommended 12 months

“in a situation like this? Or that's what I heard on Ramsey. But, or do I use some of that money”

to try to bring him to some of his siblings. He has fixed siblings and they're kind of spread out for them or coming for my son's wedding next week. But there's still two that we haven't seen in a while. Because I feel like, you know, we're getting to that point in time right. I feel like I feel guilty that he's not seeing them. Is are the siblings that he hasn't seen that are not coming for the wedding? Are they older? Like, are they, is it hard for them to get out?

There are, there are ages range from like 67 to 80. Okay. And actually the 80 year olds coming in from New York. And but there's one that's in New Hampshire. And he's like in his late 70s as well. Like he's not able to travel. Correct. And then we have one that's in late curls for his hand. And he's a little bit younger. Yeah. Listen, you have no debt. You've paid off all your debt. You've paid off your mortgage as well. Yeah. You do need to save up an emergency fund.

Hampshire to see a family member or whatnot. So I would not let that stop you. What are you earning?

You said you're still working full-time. What do you make? I just do a little job. It's about 45. And then with his social security and his job between all of it, it's like 77. So. Okay. Okay. What is his social security? I want to know monthly what you guys are bringing in. He is bringing in 127. 47. Okay. And mine after everything is taken out, probably is around 36. Okay. And there's no nest egg. 300. 300,000. I would be looking, of course, for the

short-term plan, which is yes, we need an emergency fund. You can go six months or more. You might just have a sinking fund in the budget for medical expenses. And then we need a long-term plan. Because if you're looking at, you know, dementia care, it could be 50 to 100,000 a year, right?

“Right. And that's why that's what stops me from spending money. Like very frugal. We don't do much.”

And you should be. But we had, we had thought about getting long-term care. Well, of course,

we never did it. Now we can't because of him. You know, with his diagnosis, you can't get the

insurance. Yeah. Yeah. So, but as far as, so on one hand, you're saying, go ahead and just keep out. Yeah, keep funding it. And then sort of sinking fund. And don't feel guilty for spending along the way. You still have to live your life. You still need to see family. And the best thing you can do is make a game plan for what this looks like long-term. Become an expert on this health insurance plan. What does it cover? What does it cover? Have the full out-of-pocket max ready to go?

That's all the things you can do in a situation this difficult. And we are, we are rooting for him. Sounds like he's doing good. Let's hope it stays that way.

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“this is George, and we got tea, who's in Orlando, Florida, on the line. Hey, tea, what's up?”

Hi, guys. How are you? Doing great. How can we help today? Okay, I'll try to keep it in for this possible. So, my husband and I are currently working to pay off debt and we're trying to follow the day of Ramsey, I'll explain as far as the baby steps, which we have not started because we're in a difficult situation and we're kind of neat how it would've looked at playing with our finances. So, we both have loans for paying off.

My husband, he bought from a loan company, several, and he has came those balances, and I've also borrowed, who helped pay off his part of the rent, which was originally supposed to support my car payment. And because we're focusing on making those payments, our cash flow is extremely tight. So, in addition, I'm helping cover a portion of his rent obligations while you say off his loan, but just calls me to follow the high. I'm sorry, what's the rent for? Are you living in different

places? No, we live in a apartment, if they'm a apartment complex. And you're married? Yes. What do you mean when you say his portion of the rent? Does he owe from another? Yeah, he, you know, not from another. We split the rent in half. But he hasn't been making his portion. So, you covered it with debt? Yeah, because I, I, I, I'm up short. I have my dose that I'm paying to. And if I don't have enough,

I had to make the non-smart decision. How long have you been married? Um, two years will be on Monday. Two years, okay, happy anniversary. And you said,

somebody. Okay. So what's the rent? The rent is about 19, 16. Okay. And what do you guys each make? Uh, I make about, uh, 16 every two weeks. Then he makes about, he gets paid every week. So, what's about 700 every week? Okay. So you're both bringing in about three grand a month.

Yeah. About six grand total. Yeah. Okay. So the rent is about a third of your income, which is a

little high, but it's not broken. Why did he get behind on rent?

“That's why I've been trying to figure out, too. Um, I did at him. He did mention borrowing from like five”

different other companies that he's paying back. Oh, yeah. How old? When he gets paid every week. And I didn't really get a clear answer on that part. Well, this is to you know this. This is a huge marriage issue, more than it is a financial issue. There is zero transparency, zero accountability, zero acting like a married couple. You just, you got checked up with a bad roommate. Have either of you expressed the interest in wanting to kind of combine money so that everything is transparent.

And it's just one big pool. Uh, actually I did. That was me. And what do he say?

Oh, it's got a hesitant on it. Um, he didn't really like the idea of like even though it's coming, his money is coming in through his account mine in my account. He didn't want to combine. Don't he say why? No. Is it shame? Is it fear? Is it baggage? I think we need to get to the root of that in order to solve this because I don't see a path forward if you're going to continue to borrow on his behalf because he's behind on rent and he won't tell you why this is crazy.

It's very tangled up. It's a very tangled up situation because you can't control him. You can't

“change him. And so if he continues to make bad decisions, it's going to affect you, right?”

Yeah. In some way, shape or form. And I hope you don't take on any more debt for him. Can you promise me that? No. Um, I'm going to say my back. I just have to market as well. Now be done. Okay. It's kind of stuff. What's your total debt? What's his total debt? Um, I have my car when I'm paying off. I have about 5,000,000 left on it. Okay. I just have also my credit card, which is about 800 and something left on it. And I just have

paying off my car, sorry, which is about a little over 2,000 left. And then he just has the I'll say about 1,500 left for it. What's that debt? Um, it's between those five loan companies. Okay. What are these loan companies? Wait. Um, some sort of apps you found on this phone.

Okay. I thought so. With these short term, it's basically payday loans, but make it digital,

which is even worse. Something's going on here. Um, I'm going to break up the money talk just for a minute because I want to go back to the marriage talk. Uh, I've been married for almost 20 years. It'll be 20 years next year with my husband. And one of the reasons you get married is yes, you want a level of commitment. You want to know like this is my person. But a bigger part of that is you see the ability to build something bigger than yourselves together over time. And there's a

shared vision that's there. And you spend the years of your marriage, aligning on that vision and

“going towards it together. That's one of the joys. That's why you have children. That's why you buy a house.”

Like those are that you're just creating this life together that you, you vote both visualize and both agree on and both believe in it so much that you work hard to achieve it. And what I hear right now and this is no, this is not any meant for shame or indictment or anything like that. It's just you call this and I'm letting you know what I observe because it's still really early and still very, very fixable. What I hear right now is two people who agreed to live together. But that's

kind of it. And so you've got goals and he's got goals and you spend your money like this and he spends his money like that. And I ain't got to tell you what I do. And she don't have to tell me what she did. Right? And it will be impossible to build anything like that. And I think you're starting to butt up against that. You're starting to feel that, which is why you suggested, hey, let's put the money together. That's the thing. One thing, two I want to mention because it's just the truth.

And it's again, it's not to promote fear or shame or anything like that. But when people want to hide, it's generally because they have something too hide. Most people, the part of the purpose of entering marriages you want to be known. You want somebody to see you and know you and get to accept all the facets of you. And this person is hiding something that they don't want you to see because they're either ashamed of it. They don't think you'll accept it. Do you see what I'm saying?

So that's what I'm hearing. I'm not a counselor nor a therapist. I'm just a person who's been

really do it out of love. Not out of I'm angry at you or I'm putting the finger at you. But man,

“I love you and I chose you for a reason. And I just feel like there's something here that's”

between us that's between us. It's causing a rift and I don't like that. And I would love to get to the point where we know each other and we have nothing to hide. And if we have to see a counselor to make that happen, I'm all in with this, right? A portrait from love and see what happens. Okay, now we can get to the numbers. Well, the good news is you can attack your dad all you want. You can get rid of it. And you're right. There's not like it's not like you have $50,000 of debt here. The

problem is unless we address the root problem, you're going to go further into debt. You're going

to get evicted eventually if this continues. Or like Jade said, you have this conversation. You

restart what this marriage looks like. Well, now we have some unity. We have some vision. We have transparency accountability. Now we can make a plan for $6,000 coming in instead of my 3,000 in his 2,800. I don't know what he's doing. And he's not paying his share of the bills. This is not working. And so tonight you have a new marriage. It's going to be a come to Jesus conversation. Catch him in a good moment. Don't come out attacking him. Yeah. Don't do it in the heat of an argument.

It's not. You're the problem. And I'm doing perfect. It's, hey, we've been really miles apart. We are in different galaxies right now. And I love you. I want a different kind of marriage. And I want a different financial future. Oh, I love that. Listen, when you sense a red, and this is for anybody listening, when you sense a red flag, don't ignore it. Go head strong into it. Tentos deep get right into it and get to the root of that problem.

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as he 37227. Well, investing can be confusing and overwhelming. So lucky for you, we created a two-night virtual event that gives you a simple strategy that you can feel confident in. George, you and Dave paired up on this, and I'm really excited. It's going to be a two-night investing

essentials event September 1st through the second. It's the only place that Dave unpacks his

playbook for investing in wealth planning. Plus this year, you guys added some new content. Yes, so we did real estate investing on night two. We're going to shove that into night one and make night two all about wealth planning. I like that. So we're going to talk about legacy, navigating whales and insurance taxes, how to keep the government's hands off of all the wealth you've built. Great. How to pass it on to your kids without destroying their life. All of the things that that will really

affect a lot of people who are in that baby step four through seven phase and Dave, we go super nerdy. So if you've ever been like, man, I wish they'd go deeper. I wish we'd get a little more inside baseball. Yeah. Listen, Dave will have some formulas that will have, he's like beautiful mind out. There's a good whale hunting to see Dave on the board crunching the number. So check it out, take it start at 199 bucks. Get your today Ramsey Solutions dot com slash events or click the link

in the show notes if you're listening on podcast or YouTube. Yes, Stella is in Rochester, New York. Stella, how can we help you? Well, I'm actually looking for some advice on house investing. My husband and I have been married for a few years. We're out of debt. We're trying to save up our down payment and someone close to us who's done really well investing in real estate is giving us some very well-meaning advice, but something sounds fishy to me and I can't quite figure out where

Do you have a personal residence or this is strictly for, you know, well, we're looking for some things right now. Okay. We're out of debt. We have our emergency fund and we're working on a down payment, so I guess you could say baby step three and a half. Love that. Three be as what we call it,

“which is right on. Are you guys investing at all or are you just solely saving up?”

We're right on that tipping point between having the six months emergency fund and starting to invest. Love that. Okay, so Thomas, I guess the friend is telling us, oh, you know, this is the way that you could, you know, get in on the ground level and grow really fast and, you know, wind. And what is that? Tell us the details. What are they saying?

So he was looking at a rental property in Florida, which was $1.2 million, which we could never

afford. But after Hurricane is now 600,000. So he says he or we could buy it, put in 200,000 in renovations and then it would be back to that $1.2 million value. The boom, you just made 600,000. Now you can take out a home equity loan on that and then use it to buy another house and do the same things. So you just made magic money, you don't have to pay income taxes and it's wind wind, what could possibly go wrong. There's where you lost me. So if you had said, hey,

here's a property that needs some work in some improvements and, you know, I can get it for cheaper because it needs work and improvements and I'm going to purchase it and do that. I'm all for that. But there's several parts in this store. I know you heard it too. That are just really... It just sounded like a TikTok came to life and they've been watching a whole lot of it and maybe they tried it. Maybe it has worked so far. That's not the whole story here. Yeah, and I agree there's

something fishy. Are they profiting off of this? I don't understand how your friends are benefiting if you do this. Do they do this? They do this. They've done well for themselves. But I don't... I'm starting to have wondering if they're actually in the plus or if they just owe more than they're

actually worth it. And you'll never know. And you'll never know. But what I know and let's you

told us not the truth, which is okay because you don't have to tell us where you are. But my screen says you're in New York and this property isn't Florida. So they're saying, hey, go in other states where you can't even really see the property. You don't even know the market and let's get involved over there. You got to pay a property manager. Somebody who cares about us very deeply, they live at another state and they're snowbirds. So this was a property he was looking at and then he was trying

to give us advice on we could do something. Why don't they buy it? And in my brain, he was talking

“about it. I don't remember what decision he made. I think you let them have this one. So I appreciate”

the offer. This is all you guys. We're working on our own financial plan and we're going to go slow when we're okay with that. And by the way, we're in the Rochester area. There's a lower, much lower house that we can actually afford. And we do this. And you know, it's lost its value. We put in some amount. It doubles in value. Where does what goes wrong when he starts stacking those she locks? What's the error that happens? Your stack can get on top of that on top of debt. So every

rung of this ladder that he's describing is borrowed money tied to your home. So one bad contractor bid, one vacant month, one rate hike, one Florida insurance premium hike and your underwater and the whole house of cards comes tumbling down. And they get real quiet when that part happens. And you don't hear from them. You only hear from them with things are going really well and they're really loud and they want you to get in on this. So this is like an MLM. It's like

cryptocurrency. Someone just got a little too excited and they want everyone in on it. So I don't know if they personally benefit or if they're just real excited because it worked for them and they went, wow, free money. Yeah. But you guys do not need this level of risk in your life. And the violates several of our real estate principles. Number one is pay cash for any investment property because of the risk that's involved. It's hard. You can, you can do the formula

and you can represent the risk. Nobody does that. People who are into real estate investing generally, their risk meter in their brain is broken. Every extra dollar they want to put it to a

“house, to reinvest, to get a he-lock, to do it again, do it again. And the truth is, I love this”

proverb 13/11. Wealth gained hastily will dwindle, whoever gathers little by little will increase it. So if it feels like your wealth is being built too slow, you're on the right track. Okay. And I think you guys need to clarify, what is your goal? Is your goal today to have a, say, for a house that's you, you know, yours and yours alone and it's just your primary

residence? Is that your first goal or is your first goal to be screwed to McDuck and have a real estate

So my guess is your first goal here is we just want a house and we want something to call our own

“and we want to do it in a smart way. And if you do that, that will set you up to build wealth”

like George is describing and then be able to pay cash for a real estate with extra margin. But I would not ever sacrifice the American dream of being able to purchase a home and being able to pay off that home and live in peace for, you know, some sort of real estate moguls idea of how to really just ruin your life with debt and he looks. Yeah. I mean, this is Dave Ramsey's origin story, right? He built a 4 million dollar real estate portfolio on borrowed money at age 26

and he lost it all when the bank called his notes and it can happen fast. And so it's a lot of risk that is not represented in these conversations and for those reasons I would very politely say, no thank you. We're going to live our life. We got other financial plans, but thank you for letting us know about this quote opportunity. Absolutely. Which that's my trigger word, Jade. And obviously, if you call into the show and you say, "Hi, we have an opportunity. Whatever comes next

is about to be the worst decision you've ever made." It's never good. It's never good to have

an opportunity. No one ever says, we have the opportunity to purchase a house really peacefully with 30% down. It's always we have an opportunity to do zero down on this home and start with zero equity and being a really risky financial position. Yeah. It's never good. And what we teach, it's very simple to understand. Some might say that it's boring because it doesn't have a lot of hoops to jump through and it's not a lot of bells and whistles. It doesn't make for a great

TikTok. When we say, "Hey, save up, pay off your own house first, then save up and pay cash for any investment real estate property." I'd get zero likes on that video. Yeah. And while you're at it,

don't borrow against your current mortgage because we actually want you to gain that equity. We

like we like the idea of you having equity and money in your house on the block variable interest rates. I mean, it's just a credit card attached to your house. Yeah. Absolutely. He lock is. Absolutely. And people make it sound like it's some wealth hack that everyone knows about and does except for you. Yeah. And then when you're ready to sell that piece of property and you're thinking, "Oh, here's my payday. Now you've got that he lock hanging over that." It's like, "Oh,

I forgot about that." I still owe 50,000 over there or what have you. So the way that we teach the whole purpose, guys, is we want your home to be a blessing and not a burden. When we tell you things like the 25% rule, your mortgage should be no more than 25% of your take home pay after taxes. It's so that you feel good and you can actually enjoy your home. You're not house poor. When we tell you not to borrow against your home on he locks or home equity,

loans. It's so that your wealth that you build is your wealth and when the time comes for you to upgrade in house, you have all of that at your disposal. If you've had your phone two or three years, there's a chance it's unlocked. So bringing your own phone is a great way to unlock savings on your wireless bill. You can switch to boost mobile to get unlocked. Bring your own device and save big. See, the big wireless companies count on

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Today's question comes from Isaac and Indiana. Our primary home is our only debt with a $300,000 mortgage. I've roughly $400,000 in mutual funds and a little over $300,000 invested in precious metals.

but it's a big struggle for me. My initial investment in them was only $150,000 and my gut says to wait until there's enough to pay off the mortgage completely and cover capital gains. But waiting is slowing down our investing more for retirement. Kick me in the pants with your wisdom.

Wow. Wow. Well, that's the first time I've heard that. I like that line though.

Yeah. I might use that. Gladly. Wow. Gladly said. So he's got, I don't know if the, it sounds like the mutual funds are non-retirement, the $400,000. Right. On top of the $300,000 in precious metals, I don't know why it's sentimental to him, but he said his initial, it's more about the taxes, the key scared of the tax hit, more than anything else.

“And I think he knows what we'd say about commodities. I think that's why he's also looking”

there and not looking at the mutual funds. Yeah. If you're going, should I use the mutual funds of the precious metals? I would personally use the precious metals. I don't know what apocalypse is going to help you survive with your bars of gold, scrooge, McDuck style. But paid for house, that's what you're really trading for. What I rather have a paid for house, or what I rather have $300,000 in gold and silver. I would rather have a paid for house personally.

Indeed. And so yes, you'll have $150,000. That was the growth. You'll have capital gains, tax at your rate. It may be 15% of that. So you're talking about, really, to pay off the house, you're going to have a tax of 22 grand to pay. Now, if you are debt-free with an emergency fund and savings, you could cover that. Or what I would do is just pull from the mutual funds. Yeah. I will 22 grand from the mutual funds to cover the taxes when tax time comes due.

And enjoy your free debt mortgage payment. Small price to pay to have a paid for mortgage,

“I think, and do the math on this. Take that mortgage payment, the principal and interest,”

pop it into an investment calculator for the rest of your life. And say, there you go.

Bested that. Now we're talking. There's a million bucks on the other side of

paying off this mortgage. I'll take it. I get, yeah, or yeah, or just thinking about if you didn't pay off the mortgage, what you're paying an interest all of that time, you're going to pay well over 20,000. So we can do what you slice it. We can do the math all day long, but this is more emotional than anything. It's just a big, big chunk of money. It is. And there's something physical that you're letting go of to get rid of these precious metals. I understand it. Well,

that kick in the pants wasn't so bad. Let's go to Elizabeth, who's in Nashville, Tennessee, right in our backyard. Hey, Elizabeth. Hey, how are you doing? Doing good. How can Georgia and I help? I'm reaching out because I just found you guys literally within the last two months. And my husband and I are in a hundred and eighty nine thousand dollars worth of debt. And I currently worked in AP and wondering if I should continue to get my account in degrees or just get this debt

paid off. What kind of debt is the 189? It's a hundred and fifty and student loans between my husband and myself. He got his master's degree. And then I, when I was a year ago, was stupid and went to school to ice and dropped out. And then it's eight thousand dollars in a car, forty five hundred with two credit cards, and then three thousand for the debt. Okay. And how much longer do you have if you continue to school? 48 credits. That sounds like a lot of credits. So it's a couple of years?

Yes. Are you currently taking out student loans to pay or how are you? I was taking out student loans, but we just had a two month old. And so I, that school a lot was pregnant because it was very difficult. Right. So you haven't restarted? It's going. I haven't restarted. So I'm trying to figure

“out. I do think you need to. I think you need to, because you're not, if you were told me”

you were paying cash, we'd be having maybe a slightly different discussion. But if you're calling me saying debt is the problem. And I'm currently borrowing, while I know it's the problem, you can't solve a problem while simultaneously creating it. And if we know debt is the problem,

we have to stop borrowing money. That is the first and foremost step that you have to make

when you decide, hey, I'm going to get my life right with this money. You got to start borrowing money. That's the thing. One thing too is we'd say, okay, now we got to get on a budget and think three is now we're going to start to work this thing through the baby steps, which is the method of teaching that we have to help people break free from debt and build wealth ultimately over time. Are you familiar with the baby steps? Yes. Okay. Then we started a financial piece University class.

Excellent. And we're trying to, we're trying to get our income up and between our child doesn't start daycare for another month. So we're, when one's not with baby, we're driving for

we don't know how we're to begin. What's your household income now? It's a 120

“gross, our take on right now is 6200. Okay. Either of you investing right now?”

We stopped actually both stopped our 401(2) last night. Okay. Okay. Because I'm wondering why you're only taking home 74 out of 120. 50 grand in taxes. It's crazy. He's a high school teacher in the Metro School District and they are on a 10 month contract so they were withdrawing money for the summer, which we had after that last night too. Okay. So hopefully that take some pay goes up. And then he can go up home and then he can get something for the summer to cover those summer months.

Yes. Aside job here, he's the one staying home with baby to prevent like that additional daycare from kicking in earlier. Got it. And how much are you making personally? 50 size. And what would you be making if you continued this program?

“I could have ran to go up to 100,000. But that's not immediate?”

No, it wouldn't be immediate. That's sort of like this is where this could go. So year one, could you be making 65? Yeah. Okay. I'm just looking at the ROI of this because I'm scared we're going to fast forward if you continued this school and you're going to be $250,000 in debt. Now with a toddler trying to clean this up, making only $10,000 more, which is again like 600 bucks extra in your paychecks. So that's my fear. And so the other side of this is if we pause

school, we try to get our court income up without going further into debt. We clean this mess up for the next couple of years at least. Now we can start from a place of peace, a place of strength and set of desperation. Yeah. These student loans, are they are you currently making payments? Are they in forbearance or deferment? We're currently making payments on them. We did do the income based one because it was $1,500 a month, which we couldn't afford that with baby and everything.

Okay. Well, the payments got lowered, but it stresses me out that the interest is not growing and the payments that we're making. That's right. In my last progress because you just lower the payment. Yeah. And that's the picture I want to paint just to make sure you guys understand

what's at stake here. I would never just say stop going to school without a really good reason.

And the really good reason is the longer you wait to attack this $150,000 student loans. I mean, you can look up in 10 years and instead of it being $150,000, it's closer to $200,000, right? And so I don't want that to be the case. I want you guys to really do a complete $180 on what you've been doing. You've been focused obviously both of you on your careers. That means school. That means education. You focus on starting a family. Now I want you to focus on we are paying off debt.

We are eat sleeping and breathing debt payments, right? That's all we're doing. We're working so at so many extra jobs. We are leaning on friends and family to watch the baby because you

“got to go out and hit your shift, right? That's what's going to be taking place. And I'm just”

warning you upfront. It's not fun. But the outcome is totally, totally worth it.

If you guys can really get on the same page of this and say, okay, here's what we're doing. Here's

what I can do. Here's what you can do. Here's what we're cutting back. And I'd start with that bill. Minimum payments on everything. And how quickly can you get $3,000 to get the vet out of your life? I like this plan. Baby steps. One little movement at a time and eventually you start gaining that momentum. Okay, guys, let me ask you something. What would it take for you to switch your bank? Because

if you're still earning next to nothing on your savings, you need to check out FairWins Credit Union. And I know what you're thinking it might sound like a hassle. Moving your direct

deposit, updating bills, getting a new debit card, feels like a lot. But here's what most people

don't realize. Staying where you are could be costing you hundreds of dollars every year. Y'all, the average savings account pays less than half a percent. So let's say, for example, you got $20,000 saved. You might earn around $70 a year. But with a FairWins high yield savings account earning 3% APY or more, that same money could earn you over $600. And that's real money that you can use towards the baby steps. So don't let temporary comfort keep you stuck. Check out

checking account, and the Ramsey B weird debit card. Go to FairWins.org/Ramsey to learn more

and make the switch today. That's FairWins.org/Ramsey. Ensured by the NCUA. Guys, if you're working the baby steps, the best and fastest way to do that is by using every dollar. Every dollar is more than just a budgeting app. It's the plan that we teach built right in. It's a fabulous tool. You can track your progress, get personalized recommendations, and coaching for your situation that will help you free up more money, more margin,

to work the plan even faster. It's like having one of us walking with you every day, showing you the next right step, holding you accountable, start every dollar for free by downloading it in the app store or Google Play. You remember in living color? Mo money, mo money, mo money.

“You remember that? How old do you think I am? I'm sorry. Not as old as, not as old as me,”

apparently. Austin, is it? Thank you, Will Retter. He knows what I'm talking about in the booth. Austin is in Roanoke, Virginia. What's going on? Austin? Hey Jayden, George, what's up? Doing good. I just aged myself. Help me feel better. Let us solve your problem. Okay, so here we go. I'm a 26-year-old pharmacy student. I'm going into my

third year. I have about $290,000 in a brokerage account and a inherited IRA. I've been taking

out student loans for the first two years, which has occurred to about $100,000 in debt. I was wondering if I should cash out my brokerage and cash flow the rest of my schooling. Okay, let me make sure I've got this straight. So the $290, part of it is in a brokerage and part of it is in a inherited IRA. Yeah, that's right. I got about $158 in a brokerage and the inherited IRA is about $128,000. Okay, and the inherited IRA, how much are you required to pull out every year?

My arm, D, that I took out last year was about $20,000, but the arm, D, I think it's around five grand. Okay, so you took out more? Yes. Okay, for tax reasons. Wow, well, I would definitely get rid of this debt. You've got the money. What's the brokerage

account being used for? What are you investing in that? It's through an investment group.

Those recommended by a family friend. So it's just kind of it's in there and I've just been watching it grow and I logged into my financial aid provider today and saw that I just crawled $100,000

“that knowledge like, oh no. Wow. Well, here's the thing I would think through. It's taxes.”

So the brokerage account and the inherited IRA have very different tax treatments. When you take money out of that inherited IRA, it's taxes ordinary income. So whatever your tax bracket is, let's say that's 22%. While the brokerage account, if you have a long-term capital gains, you've held those assets for more than a year, well now that could be 15%. So you're going to take a much smaller hit by taking the money out of the brokerage account.

So that's the part I would look at. My guess is the brokerage account is going to be your best bet to knock out that $100K and I would absolutely do it. Okay. And further rest of my tuition, I have two years left. Would you recommend it cash flowing that? Absolutely. Yeah. I mean, and you've got the $5,000 that's going to come out your of the inherited IRA, whether you like it or not. You're going to drop down the price.

So that kind of becomes your cash flow school money, right? Yeah, code. I mean, tuition, like 40 year and a year and I've been paying, well, I haven't been taking the full amount of loans, I've been paying for half and loading the minimal amount of financial aid will let me take out. I would have just avoid loans all together in the future. So pay off the ones you have and then cash flow the rest using the inherited IRA and then even

“part of the brokerage if you have to. Because coming out of school, making good money with no”

debt, it's going to put you in a very different place financially. You're going to have so many more options with all that margin coming in versus your friends who are in school graduating with 250 grand in debt. Right. Now they have to live over here. They have to work over here. And so that's what happens. Dead free equals margin, options, flexibility and I understand you can make the case that, well, if I leave it invested, it could turn into this. You're going to be just

fine at your age. If you start investing with no debt, your investing rate is going to be significantly higher than your peers. Yeah, absolutely. How much school is left on two years, so about 80, 80,000 dollars worth of toys and left? Yeah, great. And I'd be working hard, too. I'd be working hard to cash flow as much as I can so that you don't have to pull as much off, but I would consider this a college fund and thank whoever, yeah, who left this for you. My grandma left this to me.

sharp young man, whole life ahead of him without debt. I mean, because now you can do the same for your grandkids. Exactly. A good man leaves in inheritance to his children's children. The Bible says, I love that because that's future thinking. You stop thinking about yourself as much and go, what am I doing for the next generation and the ones beyond that? If you can start your young adult life with no debt, you are significantly ahead. It's like wealth cheat code. It's a cheat

code. I mean, because you're not going to spend the average person that we find around here who starts working the baby steps because they have debt. It's taken them, you know, one and a half to two years. That's on average. That means there's people who it takes a lot longer and there's people who takes a little bit less, but to not have to spend the first two to three years of your life cleaning up a mess and getting on financial footing, but to just be able to accelerate forward.

You become a homo on a faster. You're going to build wealth faster. You're going to be able to

“retire earlier than all of your peers. Yeah. If I think about that, I might be crying on the couch”

about how much time it took to write the wrongs. You know, it was debt free. A 23, what could have been. Boy, Kizikira Kira is in great falls Montana. Kira, did I get it right? It's Kira. Yes. Second. Second time. Okay. How can we help you? Okay. So my question is about renting a car with a debit card. I've traveled for work a couple

times a year and I've never had a problem with it up until the last couple months. I went to

Renacar and they were like, "Very, you don't pass the credit check. We can't write you this car." Thankfully, I have my mom traveling with me so she was able to rent it because she had a credit card. But, you know, they basically told me there was no way around it. They were not going to rent me a car because I did not have a credit card. Was it because your return ticket wasn't to the same destination? Because I know that they will put up a stink about that.

No. So I showed up my return flights. I, you know, did the $500 deposit or hold on my card. All that stuff and they asked me for my social security number. I gave it to them and they came back with a little piece of paper that said, "My credit score was four." So, you know, we haven't had that. Is that true? It's for six, I don't know, because we don't borrow money. Because we don't borrow money. It's for six years. We have a paid

for home. Well, who was any of the equipment? You want to show them out? Yeah.

“Shout-in-out. Who was this wonderful credit card company that did you wrong?”

The rental car company? rental car, yeah. Yeah, rental car. It was hurts. So, it's so good. It happened back in April and then my husband and I actually got pre-approved for a mortgage so that we can move and we told them that they were going to have to do manual underwriting and I told them about my rental car experience and how my credit score was four and all this stuff. And they actually came back to us and they were like, "Well,

your husband doesn't have a credit score, but you have a great one." So, we can actually approve you for this mortgage because your credit score is so great. I don't know how. Wow. I would get to the bottom. Wow. I want to rent a car again about two weeks later, same thing. They wouldn't rent it to me because I didn't pass the credit check.

So, that's really interesting. I would want to make sure, first off,

I do want to clarify that a zero credit score is just as good as a good credit score. But if you have anything that's hanging around open, that is causing that to reflect as just a low credit score, I would double check. I would hop on and make sure that there's no open account. There's nothing anywhere that's keeping that from rolling to indeterminable. And then other than that, I would choose a different rental car company because, unfortunately, and you'll find this with apartments,

you'll find this with mortgage companies. You'll find this across the board. There are some companies that won't do their due diligence to look and really say, okay, does this person have the

“money to do the thing that they're saying they're going to do? And for that reason, you have to be the”

one to say, I'm just going to find a company who is going to keep the lights turned on upstairs and understand that I have the money to rent this car by this apartment manually underwrite this house.

Yeah. And remember, the person working at that desk may be incompetent. And so, that's always

a possibility. And you might need to talk to a manager and if they are the manager, God bless, I would go over to the, you know, a different rental counter and go, hey, they wouldn't help me over here. I've got plenty of money. I want to write a car. I will bring it back. Yeah. And I've had a good experience. I'm trying to think of the ones I've had a good experience with. Use Avis. My husband and I tend to do Avis. Oh, nice. A national and enterprise. I've had good experiences with. So, I would try those,

but you do, you do a little research call ahead and ask, hey, what's your debit card policy? Be prepared for the credit check. Let me know. I don't have a score. You're going to pull it up, but it's going to say no score. That's fine. What they're looking for is that better low score.

Welcome back to the Ramsey show here in the Fairwins Credit Union Studio. We've got Liza,

“who's an Austin Texas on the line next. Hey, Liza, how can George and I help out?”

I'm good afternoon. I love your show and I really have been taking those all these past two through months on financial matters. But I do have a concern. This is on you to me. I just I grew up with not being financially responsible and how to save money. I am a single mom. I have one daughter. She is 20 and she is going to school university and we have not been, well, lately, we

financially that's not been helping us out because we earn, I guess, we don't earn how to say,

we earn a lot for our family of two. And I've been helping around paying her tuition every semester, but what I rely on to pay for her tuition balance or left-door balance to help her pay her semester is taking out of my my Roth IRA. And I don't like to do that because that's my, of course, that's my my retirement. Absolutely. And yes, so any helpful tips, please. How much have you pulled out of the Roth so far? Um, and like every every year I take about, I take about 1,000, 5 times 2 will

be a Roth 3,000 a year. How much is in the total? Right now it's 5,058 with 70 cents. Okay. So it's

about to be zero if we keep this up. Uh, yes, exactly. How old are you? I'm 44. Okay. Well, it's clear that you love your daughter. Can we agree on that? Yes. You're doing something genuinely sacrificial to invest in her future. And that that part is right. Your heart is right there, but the vehicle they're using to do that, that's the issue here. Because right now, here's the future, only paying for you. You retire broke. Now your daughter has to take care of you financially,

sacrificing her future, creating a generational cycle. Hmm. Right? Yeah. And you didn't mean for this. You had good intentions, but I don't want you to become a burden to your daughter later on because

“you sacrificed for her today. So I think there's a different way we can come up with a game plan”

to cash flow $3,000 a year. Would you agree? Yes, sir. We're not talking 30,000 a year. $3,000 is manageable. It's about like $6,000 to $7,000 a master. Okay. She's about to work here part time in the summer. Good. So how much will she make doing that? That we don't know yet because she will be working soon. So she's going for animal science, that's her major. And she's been applying to all these like black clinics and stuff. And so she wanted to be a vet vet tech. What's her goal?

Like a vet tech. Yes. Okay. Does she know how much of that tech's make?

“I think she told me once, but I forgot that number. Okay. I thought I heard you say that for a family”

of two, you guys bring in a really good income. What do you guys bring in together? Or what do you bring in? Year is 120. Okay. Approximately. Okay. And how much longer does she have for square amount? Just two more years to go. Two more years. So we're talking like $12,000 solves this. Correct. Yes, sir. You got it. Okay. So what if we had a game plan to where she works part time? She covers, let's say, half of that amount over the next two years and you cover the other half

and you both cash flow it without robbing your future. Okay. Let me write this down. I have my notes in everything. Yeah. You said, so you bring home how much a month, seven? Seven. How much of that can we use to save for the college fund and cash flow this? Okay. I have consumer debt and I have a car loan. So what's left on the car loan? It's 9,984 with 56 cents. Okay. And the consumer debt is

authority, these are like past, past debt. They're older debts. They're older yes, yes sir. So let

ask me answer one question for me. So before you were saying that you were taking out $3,000 a year from the Roth IRA to make this happen, right? So that's essentially all we're looking to find. If you were floating all of it except $3,000, that feels like a fairly easy equation to solve unless I'm missing something. It's now we can just budget 250 bucks a month over to a little savings account so that we have three grand by the end of the year. You see the math on that? $3,000 divided by $12.

So now we can make a budget. Okay. How we're going to budget to cover our debts aggressively,

pay that off. And on the side we put $250 away in a savings account, earmarked for her college.

Yes. In addition to what you were already putting aside. Yes. And then if she can work part time, that lowers the amount you even need to put in. Yes. Because I do cash out my vacations from work. So that's like every quarter. So I use that extra money to pay for the rest of her tuition plus the $1,500 of the IRA. I'm sorry. Okay. So we won't cash out the additional 1,000 or however much it was from the IRA. If you want

to keep catching out your vacation, that seems to be working for you. There's extra cash there.

And then the rest is cash flowed through the budget plus your daughter's portion from her job.

“And I think you've got to cover it. I think you're doing your paychecks or the solution instead”

of your retirement account. So are you investing anything currently into the Roth IRA every month? Or anywhere else? Yeah. It's what the month, it's with our Jones. How much is that? It's about 400, 480 or 60 a month. Okay. So starting today, we're going to pause that. We're going to take back that 480 a month and apply it to our debts. Okay. Okay. So we can actually go to our employers. They say, hey, I can stop that. Yes.

So I have like the stop all contributions. And what this does is it allows you to focus for a season so they can get rid of your consumer debt so that you can cash flow your daughter's college. So that's your deep why. Let that fuel you to get really intense to not let this debt drag on any longer. It's been hanging out long enough. You got a future ahead of you. Your daughter has a future ahead of her. And so let this be in a aggressive season for the next six months. We're going to knock out the

consumer debt which frees up how much in payments. What's the car payment? What's the consumer debt payment every month? Okay. The the car one is 390. But I pay 500 a month. Actually,

“I raise it to 525 to pay it faster. Okay. So 390 on the car plus how much on the consumer debt?”

It more is there is on the payments monthly. But 4,000 and now 4,000 is 103. I make monthly like I guess I'm in the month payments because I have some like a couple hundred bucks. I guess. Okay. So right there, that's going to be 5,600 bucks freed up once you knock out these debts. Now you got some margin. Now instead of ever robbing or retirement again, we're just building and building and building so that you can retire with dignity and not have to rely on your daughter.

Yeah. And the good news is once you do that, if you start investing 15% of your income from let's say age 46 when this is actually done to age 65, you're going to be right close to a million dollars.

“You should not feel uncertain about investing and you don't have to. That's why we created”

investing essentials. A two night virtual event where George Camo and I walk you through my playbook for investing and wealth planning will simplify everything from 401k's and mutual funds to passing on wealth. So you can invest with confidence. Take it start at $199. Get yours today at RamseySolutions.com/events or click the link in the show notes.

we're going to break down the most asked question of the week. So this week we saw the biggest

“question was what's the best way to create a debt payoff plan? Well, they're in the right spot, George.”

I love it. Well, if you've hung out with us for a long enough, you've heard us talk about the debt snowball method and the other method that you may have heard about is called debt avalanche. So think about it this way. Avalanche is focused on the highest interest rate. The debt snowball is focused on the smallest balance. So you list out all of your debts from smallest balance to largest balance, we ignore the interest rate from now and we're going to pay minimums on all of the

debts except that small one. The small one, we're going to tack with all the vengeance we can,

everything extra, we're going to just focus on that one debt. Yes. That's it. And once that debt is knocked out, what happens? You freed up a payment that you can roll into the next debt and the next one. And so that creates a snowball effect as you pick up more snow along the way. You get some

“quick wins. You get some progress. You get momentum. That's what causes people to get out of debt.”

I love that. And so if that helped you, you can try Ask Gramsy for yourself. Ask Gramsy can help you lay out a debt pay off plan based on your debt balances, your minimum payments and your interest rates. Ask her question today at ramsysolutions.com or just click the link in the description if you're listening on podcast or YouTube. Gail is in Phoenix, Arizona. Hey, Gail, how can we help today? How are you doing? Do an excellent. What's up in your world?

Good. Well, so I'm just going to be turn 69. Last 40 years, a serious drug problem. I worked. A lot. I worked for a lawyer back and forth. So I lived home to turn my mom and she died about two years ago. I think you. The house I lived in with her made my brother able to sell it for seven times the amount for the neighborhood. So what do you end up taking? We got 700 and I think it was 750 right around there. The house they bought for like 135, 30 years ago. And you know, I think because

you know, in an addiction, you don't think about anything but yourself and never thought I'd get

old alone. You know what I would do at my life. But I have a son. I was a single mom. He's 37 now. I don't know how that happened, but. And so we sold the house and I was able. Okay, I got sober. I got serious with God. I started to walk with God. I mean, serious one. You know, once that started, I started to walk and all these things were shipping me like a ton of bricks. You're just old. You don't have, you know, you didn't say. Never. Never thinking about retirement. So I brought

the house. I got it for 325. It was 350. I got it on the 325. I was able to gut the whole house because it was very old, very old. And I brought it. I don't have a mortgage. Wow. I love that. I'm way to go. I love that girl. How can we help you to do that? I want to happen with our God. I listen right on. Amen. How can we help you out today? So what happened? So this last two years, I was just saving. I, like I said, I work full time in a lot for my salary. My, my salary is about 50,000

a year. Yeah. And so I started taking, I went full retirement age with my retirement, might, to get my retirement savings. I started that. I get full retirement. That's 23 or 3 a month. Okay. So that's the money I come in. I don't, my HR weighs only 80 bucks a month. So all I have, no dad whatsoever. I don't want to car. You know, so I just had my regular bills. Are you investing? Are you investing 15% every single month? No. That's the question.

“I was able to say, even after, you know, I did all my, I start saving last month. I, you should”

be putting $1,000. You should be putting about $625 a way every single month into your 401k. If your job has one, I don't have one. So is there any retirement plan through the employer? Okay. So you have access to a Roth IRA, at least. I don't have a clue what to do. What I did do the other day or last week was I took $7,000, open the brokerage account. Okay. To buy SpaceX. I was a lot of 14 shares. That was it. Right. So I $5,000. Well, let us help you. Let us help you. Because we

only have a little bit of time with you. Okay. And we appreciate the backstory because that does help. But what, George and I would suggest for you to do today the same way that you went over and

to open a Roth IRA and then we want you to invest at this point. I wouldn't mind to match it out. Yeah,

“it's $8,000 a year since you're over 50. And that'll allow you to sock away $8,000 a year tax free”

because you're using after tax income to fund it. And it's not tied to your employer. And that will compound over the next 10, 20 years God willing into a nice little nest egg for you. Yeah. And so between that social security, the goal is how can I survive? Because right now, you don't have much of a nest egg. It sounds like we have a paid for house. And I would stop by the same stocks by the way. I don't want you to do that again. Okay. Okay. Don't do that anymore. So I don't,

I'm going to be 69. So my boss is saying he wants to retire next year. That means I have to, well, I'll definitely keep working. But what do I do? What, where do I get a Roth IRA? I don't know any. Where did you open the brokerage account? I opened it with E trade. So more than family. Okay. So you can open a Roth IRA through them as well. And if in your shoes, what I would do is get a pro in your corner because time is of the essence and we cannot screw this up. So I've got

just a person for you. Jump on Ramsey Solutions.com and click on Smart Vester Pro. These are

“investment professionals with the heart of a teacher because that's what you need right now.”

You need the financial literacy so that you know what you're doing versus just hoping. This is like spray and spray. I hope my money is doing well. I hope it grows. They will actually

educate you to go, here's what a mutual fund is versus a single stock. Here's what a Roth IRA is

versus a brokerage account and they can help create a strategy so that you can retire with dignity instead of just fingers crossed hopefully one day I can. And you've done a good job. I mean, the fact that you were able to buy a house in cash is a great thing. You've got a great secure job. You've got a good income going forward. You're going to be just fine. But you've got to do what George said to do next. You can't just guess and hope that everything works out. Yeah, there's a

level that DIY becomes dangerous. Yeah. Because I've done DIY my own house with like a house project doesn't end well. Usually end up calling a pro to fix all the things I messed up. Yeah, especially if you don't feel like you have a baseline of knowledge and you don't have a lot of time. She doesn't have time to make any more mistakes. You can screw some things up and make up for

later. Listen, at 22, if you just parked your money in an index fund, I would probably never stop you,

right? And it's just growing and growing and growing. There are worse things you could do, right?

“So I agree with her a smart vester pro you have to. You need to get the help you need. But I think”

that Gil was a cautionary tale for a lot of people listening. It's so easy to just go through life, George and think, I'll, you know, I'll make that change later. I'll save later, you know, and the time it does catch up with you. And so if you're listening now and you're looking at your finances and you feel that squeeze of living paycheck to paycheck, if you feel, you know, that that shame about knowing the debt that you have, you haven't touched the student loans, you're still spending

on a credit card, right? You just, you know, went down a bot yet another car and you have another car payment. It's going to be another three to four years before you paid off. Don't ignore that. We get those checks on our spirit. We get those red flags start today. If you start today, then you will look up in two years, three years, the debt will be gone. I know for Sam and I, it was seven and a half years. How long did it take you? Two years. Two years. You commit for two

years, your debt's gone. And then in 20 is freedom and margin. Yes, freedom and margin. And you can

actually live like no one else. George said something so amazing to me on the way into the studio.

We go out and shake people's hands in the brakes. He came back. He said, Jane, one of my favorite things that I get spend money on is a laundry service. I love that. Buy in my time back. Buying your time back, and all of that is because you sacrificed to win when it was time, it was crunch time. And when it's time to crunch, get to crunch it. Get to crunch. Well, I mean, here's the crazy math on this. At 20 years old, every dollar you invest, becomes $73.65. But you invest that

same dollar at 50 years old, it becomes $3.50 at 65. That hurts. Instead of $73, you get three bucks because you waited 30 years. So do not delay, get to investing the best time to plan to trade with 20 years ago. The next best time is today. It's not too late if you can still fog up a mirror. The time is going to pass anyway, boys and girls. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting,

but there's a lot to think about. And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell

an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to RamseySolutions.com/real Estate. That's RamseySolutions.com/real Estate. Well, buying or selling your home is a high-stakes game because one bad deal could cost you tens of thousands of dollars. You don't want to overpay for your next house,

“or sell your current home for less than its worth. That's why Ramsey trusted connects you with”

vetted real estate agents who have the experience to guide you step-by-step to make smart decisions, not expensive mistakes. Connecting is really easy. Just compare agent profiles, interview your top

choices, and ultimately pick the one that's right for you. Find a local Ramsey trusted agent

who has your best interest at heart, for free at RamseySolutions.com/agent, or click the link in the description if you're listening on YouTube or podcast. Jackson is in Colorado Springs, Colorado. Hey, Jackson. What's up? Hey, Jordan J. How are you? Doing great. How can we help today? I have a question regarding our babysat free emergency fund. Life and I just hit three months, and we both think we need to get to six months. I'll ever that will take us about another

14 months to get there. Or that is a sinking fund. Sorry, a labor and delivery bill. What would be your thoughts on where we should be at? Three months is about 25,000, six months is about 42,000.

“I think that what you're doing is about right kind of stopping and saying we need to put this money aside”

specifically for labor and delivery. We know we're going to need that money. I would exactly do

that because chances are you are going to use that. You might hit your deductible. You don't know what the situation is going to be. So I like the idea of that. Hopefully there's some that you can hold back when it's all set and done and plop it over into the emergency fund. And if not, you can just push play on the extra three months once you're done saving up for labor and delivery. Perfect. Yeah. I have another question. There's time. Yeah. What are the numbers? Tell us the

numbers. What's three months? Three months is about 25,000. Okay. Three months is about 42, little over 42. We are about 30 Conservatives said, let's go to the 45. Yeah. And what's labor and delivery? So we just had one about a year ago. That was about 7,500. I budgeted 9,000 just to be safe. Okay. So hopefully you'll have another 1500 when it's all set and done to plop over there

“and get you closer to the 42, 45 you want. Yeah. Okay. What was your other question?”

Would you, we have a paid for car. That's worth 45,000. We've been debating back and forth and we should sell it by a $20,000 car and basically end our baby step three with the extra. Oh, I say. Okay. What's your income? Why stay at home mom? She makes about $100 a month giving remote work and then I make $132 to after-based salary and vehicle allowance. And what's your other car worth for other vehicles? My truck is worth about $18,000. We're just under the 50% mark. Okay. Yeah,

nothing's on fire here. But if you're just like, we don't really need this much car. We can get

something great and reliable for the family for 20 or 25. You can always use that margin to

then apply to the emergency fund and spare yourself 14 months of sacrifice. So it's like, the either way, there's sacrifice going from a $45,000 car to a $20,000 car. You'll feel that. You'll feel that and saving 14 months of sacrifice with this baby on all that going on. I think that's well worth it. If you guys don't really care about driving the fanciest cars. Yeah. And I do love my wife being in a basically brand new car that's paid for. Yeah. What kind of cars the one that's paid for? Boy the

tundra. Or I'm sorry, I'm sorry. I'm sorry to afford it. Mind the tundra. Four runner. Okay. So she'll be using the four runner. You can get a last forever. Yeah. Yeah. Four runners are great and they hold their value pretty good too. So you're in good shape, man. Congratulations. You guys have really thought through this intentionally. Yeah. It's a good place to be. Very good. Thanks for the call. All right. We've got Rebecca in Dayton, Ohio, Rebecca. You're on the line. I didn't. I didn't do it. Thanks for taking

the call. Yeah. Absolutely. I have a question about my husband's retirement account from a previous employer. He switched jobs about a year ago. He didn't have a traditional 401k with a previous employer. He now has a Roth 401k at the new employer and his old account has been doing pretty good. And so we've just, he's just kind of let it ride. But we've been hearing

figure out how to go about moving that. But we're so nervous that we would do it wrong. But we should

“be able to do that ourselves. Is that correct? Yeah. It's not a complicated process. The key is you”

never want to see the money in your bank account. You want to do something called a direct roll

over and you want to keep it in kind. Meaning if it's a traditional 401k, we want to do a traditional IRA. Okay. Because if you move it to a Roth IRA, well now there's, you've got to pay the taxes on that. Both of the accounts, the old account that's traditional of the new Roth, they just happen to be with the same company. But as he made, you know, he opened the fidelity account. Does it maybe say what the same company or doesn't matter? No, it doesn't matter. He could roll it

over to Vanguard. So you could just get a direct roll over to a Vanguard IRA, fidelity IRA. It doesn't matter. The key is direct roll over. And what happened with my wife's 401k when she left Ramsay to stay home with our kids, they actually mailed us a check. Now wasn't to my name. It was to the Vanguard account. And then I deposited that check into the Vanguard account. So it's not a complicated process. But I understand it's a lot, there's like a lot of zeros on the end and it can feel

intimidating. So if you need help with that, you can always reach out to a Smart Vester Pro,

just jump on ramsysolutions.com, click Smart Vester Pro, and those are investing pros.

“That's what I did when I first started at Ramsay at an old Apple 401k. They helped me roll it over”

to an IRA. That took some guess workout for me for sure. Okay. And then you want to invest? That's another key. It's just going to sit in the settlement fund in the cash portions. You want to make sure you actually invest that money once it's in there into good funds. Yeah, and I was going to say you mentioned that you didn't want to move it because you liked the way it was invested. So I would just choose the same funds again and make sure if you

really loved your rate of return that it's invested the exact same way in the same funds.

Just get to as close as possible. It's been getting about 18% so we're like, okay,

that's good. But now we're thinking we do still need to move it where we can control it. Yeah. Well, I mean, it's not magic. The market has been doing really well the last couple of years. It was like 26%, 23%, 17%, so that is probably the reason for that. It's not magical funds. You can probably find very similar funds in that IRA. But I do like an IRA because you have full control of it. So that that's a nice feature. And you have access to all of the investments in

the world versus just what's in your employers 401k. Absolutely. Well, George. Let's see.

“Let's try to help Connor. I think we can do it, Rokana. Get your question fast, Connor,”

and Washington, D.C. Have a great day. I'll be quick. I've got married a month ago and we experienced an implore of love and generosity. I'm sitting or I'm driving a least car that expires in December. I'd be able to buy it for 19,000 or I can, you know, full go at let the dealer take it and then buy a Peter. But I feel like I'm getting a pretty good value on this car. So the question is, do we take the gifts from the wedding and put them towards this shiny

car or do we just put it directly towards the lawns and get it simple? Gosh, how much loans do you have? What do you own debt? We have 72,000 total in student loans. You know, I'm all about having a nice car, but if you can have more cash to go towards this debt, I'm going to take that every single time. The gift was yours to do what you want with and I would definitely, when I can get out of it, I get out of it and I take some cash and buy a Peter. Yeah, the way I think about this is if you

did not have this lease and you had $19,000 and you had 72 grand in debt. Would you go out and buy a $19,000 car? Probably not. And so I know it's a little painful. You're newly wedged, you're excited. You want to feel like we made it. We're doing well for ourselves and then you go out and buy a $7,000 car. Now you're going, oh, this kind of stinks. But what happened for me, Jade, is it actually lit a fire under me? Anything that you don't like about that car just becomes more fuel to get

out of that faster. Show you right. I know that's right. Sam and I used to have a, we had an old Jeep. It was a Jeep Liberty and we decided like this is our what we were one car family and everything went wrong with that car, but you know, you're getting out of debt. At one point, the motors went out in the windows, so the windows went stay up and to take it to get fixed, it was like $700 and we're like, nope, my husband found like shoelaces and like inside the door used the shoe is full of my

driver, my driver. By the time we got out of that car and upgraded, like smoke would come out of the engine every time I started it up, it was just, it's a beater. I'm glad your life had tell the tale. I lived to tell the story. We don't need to go that crazy corner, but I would just buy a reasonable used car for far less than 19. We're not telling you to do anything we haven't done ourselves as the point of the story.

you that most people are broke. Not because they don't make enough money, but because they don't have

“a plan. You need to give every dollar you earn a job because when you do that, something changes.”

You stop guessing. You stop worrying. You stop stressing. Our every dollar budgeting app will show

you how to find extra cash, pay off debt, and finally start winning with money. But most people

won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play. Ramsey shows scripture in quote of the day, Ephesians chapter 2 verse 4 through 5. But because of his great love for us, God who was rich and mercy made us alive with Christ,

even when we were dead in transgressions. It is by grace you have been saved. Thank you. Earl Wilson said this. If you think nobody cares if you're alive, try missing a couple of

car payments. They'll do it. They'll come after you. That's so funny. I love that. All right.

It's also kind of sad. There's a sad issue for sure. Jessie is in Nashville, Tennessee. Hey, Jessie. How can we help? What's going on, guys? I hope you're all doing good today. Yeah. What can we help? Yeah, so my question. Yeah, I'm 22 years old. You know, graduate college of my kind of been working for a year. And my question is, should I be chasing in my career, something that is more financially stable or something that's closer, like tailored to my

passions and what is the balance in that? Why can't it be both? Tell us more. Oh, yeah. I worked so hard nine months in foster care and I enjoyed it, but it was very much

just didn't pay great and it was just emotionally burnt me out. And I thought I needed to break. So

now I'm trying something in the business realm, telling insurance. And, you know, it's maybe more higher earning and kind of provide more for me. But I'm trying to figure out that's just something I want to do long term. And if this is what I want to do, you know, it feels like the beginning of 2020 years. That feels like a really big leap of interest from caring for children, literally orphans to caring to selling insurance. Is there something that you can do that still

works heavily with caring for people, mainly children, that maybe doesn't burn you out quite as much

“and maybe you can make a little bit more money? That's what I'd be thinking because clearly,”

do you see what I'm saying? There's a huge gap there. Yeah. Have you thought about that? Definitely. I haven't. Yeah, that's what I've just been trying to ponder and think gone past months and I'll start this job and insurance now. Well, our colleague, our former colleague, whom we still love, Ken Coleman, wrote a book, find the work you're wired to do. And inside of it, there's a career assessment. George and I are going to send that to you because I think that's

all your hangup is. I think that you've identified what it is that you're passionate about. We just have to figure out all the different ways and all the different career fields that you can use that passion and that book is going to help you do that. What I wouldn't do today is choose a career simply based on how much money you can make out of it and what you perceive to be stable. I would not do that. Yeah, you'll get to the end of that road. A lot of regret going

now what I'm burned out. I paid a soul tax for a decade. Sure, I made some money, but it was not worth it.

“So I want to know this, Jesse, where are you at financially today at 22?”

Yeah, I've been living at home up there and so I've paid off all my debt and, you know, I'm kind of out of point, I just proposed to my girlfriend. It was not going to be married next nine months. So kind of, you know, we're not, not in the negatives, got a couple thousand dollars in savings, get a emergency fund and now it's just trying to figure out what can I do to as we navigate going in the marriage. So that's great. Well, that financial piece gives you so much flexibility. It gives you

options to pursue the thing you really want to do instead of, well, I have to go sell insurance because it makes a lot of money because I have a lot of debt to pay off. So staying debt free is actually sort of a hack for doing the career that fuels you. And I'm just, I did a quick Google search and find the work you're wired to do will help you with this, but I'm looking at jobs like licensed clinical social worker making 16 to 90 K. Child Protective Services Investigator, supervisor,

50 to 75 K, foster hair program director, 65 to 100 K. So there's a lot of jobs out there that

That's kind of the name of the game. And as you get more experience by 32, you should be making

much more. So you've got a lot of time on your hands. So just don't squander it. Start to kind of vibe out. What is, what is the thing I liked about that? How can I pursue that? But the key is,

“what do you love? What does the world need? What are you good at? And then what can you be paid for?”

And if you find that sweet spot on the center there, you have struck lightning. It's something most people don't do their entire lives. I like that. I like that. Good question. Thanks for the call. We've got Drew, who's in Springfield, Missouri, up next. Hey Drew. How can we help? In my life, I have a question. We were thinking about taking some equity out of property that we

have to buy some rental property. Okay. How many properties do you have total?

We have two. We have a main house. It's paid for. We have a lay house and it's paid for. Okay. And so which you were going to borrow against one of these to buy the next property? Yeah, we were the way we feel about it is like having cash in a checking account. It's really not doing much. And I could be wrong. It might be the wrong way of thinking it. But you seem like a lot of equity setting. They're not doing anything. So yes, we were going to take the equity

out of the lay house and try and put it in some rental properties. The lay house was meant for you guys as a toy, right? You're not renting it out? Yeah, that was just no. We're not renting it out. It's just a weekend thing. Okay. So here's the way to look at it. It's not an investment. And therefore, it doesn't need to make you money. It's just for you to enjoy. And the reason we tell people to pay cash for things like that is so that you can stomach that. You know, Dave Ramsey's got a lot

of properties. He's got a lay house that he loves. He does not look at it and go, man, a lot of money just sitting in that lay house. I'd like to have that. Because what happens is now you're moving backwards. You're taking on the he-lock or the home equity loan to do this. Now the lay house is on the block. You got a new payment in your life to try to do this again with another rental property. So I want to know what's the deeper reason behind this. Because I don't think it's that the

lay house is just sitting there. It sounds like you guys are wanting to build wealth in a different way. Well, yeah. And so really what's driving it is, we got started late on investment accounts. We just got started a few years ago. And we're trying to catch up. There's kind of what they're

“how old are you got? I'm 38 and she is 39. All right. What's the lay house worth?”

It's roughly 300. We put a lot of improvements to it. I mean, we bought it and just have remodeled it from one end to the other. So it's kind of hard to tell. But 200 is a safe number. How often do you use the lay house? Just about every weekend. Oh wow. So let's get a lot of use. So you're not, it's not something you're like, I'd be willing to sell this thing and put the money in investments because we're behind. No, it's it's our hobby. It's much our own like hobby. We

what's your income? What do you guys bring in every month? Well, we take over about 145,000 a year. What's the process of that? I'm not 100% sure on that. But how much could you invest a month right now in order to quote catch up? Because you're only 38. You've got plenty of times. Absolutely. And you've got no debt in your life. It sounds like. Well, there is a the boat that's setting in the boat foot. I have 6,000 on that. That's it on that.

We in the out of 145 that we take home. We invest 68,500 of that. Wow. Okay. That's great. The stock market.

“Yeah, we have an Edward Jones. Okay. And how much do you currently have in investments?”

224,000. And that's that's we've accumulated that over this in my second year. Okay. Well, let me show you the math on this. Your 38. You've got 5,600 a month basically going into these investments. You already have 2,24,000. You're going to have 7.4

million at 60 if you just keep this up. Yeah, it's pretty good. So therefore, I tell you that to say,

you don't need to rush this. You don't need to take out a heloxical, get an investment property that hopefully, ROI is that hopefully, you know, actually makes any amount of money because you have debt leveraged against it, which is going to hurt the cash flow. So I would just keep doing what you're doing. The life hack here is your income and your savings rate, not that you're not doing enough

done really, really well. And you've set yourself up for success. There's no reason to really change

“change the recipe now. Unless you love real estate, then just stack cash, invest in buy real estate and”

cash. But the stock market is a great passive way. It truly passive way. No headaches, no landlording,

the money just grows and grows and grows. That's right. Well, thanks for hanging out with us today,

“guys, and remember, there's ultimately only one way to financial peace and that's to walk daily”

with the Prince of Peace Christ Jesus.