Financial Pain Creates Real Change

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Normal is broken common sense is weird. So we're here to help you transform your life. From the Ramsy Network and the Fairwins Credit Union Studio, this is the Ramsy Show. I'm George Campbell, joined by Jade Warsaw this hour and we're taking your calls for free. Triple 8, 825, 5225, and as Dave says some say the advice is, "Where's what you paid for it?"

A lovely riddle. We'll see how it goes today. Jonathan kicks us off in Orlando. Jonathan, welcome to the Ramsy Show. Hey, how you doing?

Doing well. I have a question. I've got myself in a big mess where I'm actually where I actually had to force the credit car companies to sue me. You force them to sue you.

By not paying? Not paying every time I sign the agreement and it's a payment plan.

I changed my numbers and bank accounts and they never hear from me again.

Why were you scamming like that? Well, I'll start with American Express back in August 2023 where I paid off all my American Express cards and requested my account and they did all except for one card, they returned to payment. They kept the minimum payment and they told me I was no longer eligible to pay that card

off in full because they just checked the interest rates up to 49 percent on them. Okay. I'm struggling to find a question in here. How can we help today? So my question would be because I tried different lawyers and whatnot and they all

“told me that chapter 7 would probably be the best way out of it.”

How much credit card debt do you have? About 49,000. Okay. And I just want to make sure I understood I made sure I understood you. Did you say that American Express would not allow you to pay the full balance?

Is that what I heard you say? Yes. They told me that this was right after when they declared a pandemic over. Okay.

They jacked the interest up on all my cards to above 49 percent.

So I called them and I asked them why I said if I could get them back down to 19 percent where they was. It was a result. And as they told me, no, that was a federal going right. Okay.

Right. Okay. I understand they jacked the interest up. Now I want clarity on the payment. You said that you couldn't pay it off.

They would not allow you to pay it off.

“Is that simply because they made the interest so high?”

You felt it was impossible or was there something somebody was restricting you on the phone from making a payment? No. I sent in the payment twice.

The first time they sent it back, they kept the minimum payment and I had received the letters

and they said they could not validate where my funds came from. So there is one of the reasons that that might happen would be if your account's been frozen or closed or if you're under fraud or review and or if there's suspicious activity. And if what you're saying is you were constantly changing your address and constantly that might be a reason.

I don't know. But this was after after they returned my payment because it's been two years where the debt collector has been coming after me. So where are you at in the lawsuit? Has there been a judgment against you?

They just filed and the same debt collector just went and bought the other credit cards and they're getting ready to file the other on the other side. Okay, how much money do you make?

“I make roughly 70,000 a year and do you have any assets or money to your name right now?”

No. Is this the only debt? The 49,000? No, I got a house, I got two cars. Those both have loans on them?

What are the loans on the cars?

1,000, 29,000, the other one is 7,000. Do you need both cars? I need one.

“Could we sell the one that has a $29,000 loan on it?”

Actually, that one I can't sell. Are you upside down? There's not upside down at the time of purchase when I ordered the truck and $2,023. Well, what's it worth today? You owe $29, what's it worth today?

Today, Kelly Blue Book value has it right at $19,5. Okay. $10,000 under water. Yeah.

And that's it, there's no other personal loans he locks anything I'll say.

We should be privy to. No. Okay. Is it just you or do you have a wife, kids? A wife.

Okay. What are the biggest problems I've been trying to get? I've been trying to send him payments and all that to this debt collector, but the more I pay him, the greedier they get, and-- Why don't they get in greedy?

I think they want their money, and they don't get me wrong. They have horrible ways of showing that.

“But the truth is you owe this money, and all of the back story and getting up to this”

point, I think if we'd spend too much time thinking about all of that, it's just going to cloud our intentions going forward. So today, what we're looking at is $49,000 of credit card debt. The past doesn't matter. We're looking at $29,000 of a $29,000 vehicle that we're $10,000 upside down on.

And another $7,000 vehicle with $70,000 of income is your wife working at all. No, she's not working. We just got married in April, and we haven't been able to get-- we're waiting for the attorneys to follow her adjustment of status. She not legally allowed to work in the states?

Right until the adjustment of status is done. Got you. Okay. How old are you guys? I'm $45, she's $44.

Okay. So the solution to this problem isn't filing bankruptcy. The solution to this problem is you taking 100% control and responsibility for what's gone on here over the past several years.

“The truth is you've lived a lifestyle that's above what you earn.”

You earn $70,000 a year, and you've got car loans, you can't afford for whatever reason you've racked up almost $50,000 of credit card debt, and that's the truth. So getting out of this is going to require you raising your income in multiple ways, and it's going to require you lowering your expenses in multiple ways. None of what you're going to be comfortable or fun in any way, shape, or form, but it

is going to be comfortable and fun once you're out of the debt. So the only way out of this is debts, no, ballad. And if the credit card debts are old enough, eventually you might be able to settle for a little less than once owed, but if you owe it, and you can pay it, let's just make a plan to get this done.

I mean, going into 49 grand, a credit card debt tells me there's been a couple of years of buying some toys, living high on the hog, and now it's time to face the numbers, face reality, and get on a plan with your wife, even though she doesn't have an income right now, she's involved with this, because some of the spending is going to be from both of you. And so this is going to take probably three to four years of some serious serious sacrifice.

Yeah, and we didn't ask you about your mortgage, but I can tell you, if your mortgage is

more than 25 percent of that 4800 take home pay that you probably have, that's probably

one of the first things on the chopping block. Yeah. And bankruptcy is not a quick fix. It will destroy your financial life, stay on your credit report for 10 years, make it hard to rent an apartment, get jobs, all of that, so I would not go down that path.

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25 years. I trust them and you can too. Visit zander.com for instant online quotes or for a more personal touch, give them a call at 800 356 42 82. Anna is in Nashville just down the road up next what's going on Anna?

Are you with us? Yes. How you doing? I'm a single mom of good how are you? Good.

I'm a single mom of two and I'm self-employed and I have $28,000 in credit cards that right now. So all of the payments are current, but the interest in debt is really hard to manage. Is that your only debts? Is it 28k?

Yes. Okay. What's your income? It varies because I'm self-employed so some months it's quite good.

“In other months it's slower, so I'm creating some supplemental income?”

Through sidewalk or what? Yeah. Okay. What's give me an average month? Um, an average month this year has been really low because I've been taking some business

courses and furthering my education, but some months I was making $3,000 a month and other months I was making for a little. So $3,000 is like the top end. What kind of work is it? I'm a practitioner, so I started my own business to support women in children with anxiety,

but I basically left an abuse of marriage, started my whole life over again, in the state.

Okay. Get off old bills, like on the credit card, it's old bills, you wouldn't pay a attorney's fees. Got it. And then re-building my life to create a business like it's work from home.

Okay. Remember the kids? Um, they're now 13 and 16. Okay. So in school and you have full custody?

I do have full custody now. Okay. Um, I think the struggle is coming from the 3000 a month, which it sounds like on many months it's less than that. I think that's where a lot of the struggle is you said you were doing some supplemental

work. What are you earning? What are you doing and earning from that work? I'm just starting to pick up more and more work because before I could the reason why some of the early months for low is, I was just in survival mode, sure, you know, leaving, leaving

that place and then trying to help my kids. And so I wasn't at my best capacity. Sure. Now going forward. How long ago was that?

I'm putting more out there. How long ago did you leave? I left four years ago, it took two years to get the divorce and I had no support for two years. So, you're back on your feet, we'll say maybe two years back on your feet.

But back to the other question, what is the supplemental work that you're doing and what are you earning from it? Um, I just started some of the supplemental work. So I'm doing, you know, like some dog walking, walking side, dog walking pet sitting, you've just started.

I realize that. And by the way, no one, we're just trying to get information. No shame in any game. I did dog walking and pet saying I did all that too when I was getting out of debt. So don't, don't feel bad about saying what it is and don't feel bad about saying the

amounts. The more details you give us, the more it'll help us help you out. So just getting started on that, what do you, what are you able to bring in on dog walking today? And what do you think you can get it to?

I just started, so literally we have our first customer.

I tried to fix something I could do with my kids. So I mean, we're looking at-- I love that, you know, four days, it's going to be a couple hundred dollars. Okay, great. Okay.

But I can also work from home while I'm doing that. Okay, so you get a client, if they're gone for a weekend, you think you can make two or three hundred dollars off of that. I love that. I think it's a great thing to be able to do with the kids.

“I wonder, though, what 13 and 16 year olds do you need to do your job with the kids?”

I feel like the 16 year old can stay home with the 13 year old and you might be able to do several side hustles that don't involve them being available to go with you. And that might free you up a little bit, Pierre. Exactly. And that's why I'm building my business right now.

I'm able to, before I was doing one-on-one with clients.

I help other people who went through trauma and--

Right. I want to challenge you on this, though, and this is-- I'm being your buddy right now. This is not me trying to jam you. This is me trying to be your buddy. What you're earning from this side hustle consistently from your business equates to a side

hustle. It's not a full-time business yet. I want you to keep doing it because you're clearly passionate about it and you have a point of view because you've lived it. But today, I would love to see you go out into the world and get a job that can earn you

double that because I think that you're worth it and I think that you have that to offer. And it'll help you break free of this debt. Yeah, you need stability right now. And right now, the business, it's great. But it this feels like ministry that you could get paid for a long term.

But let's make that gravy on top when we're not working full-time, 40 hours a week.

Do you have health insurance right now?

I have Medicare. OK. So the focus is going to be, let's get this income up because without that, it's going to be hard to even keep up with the credit card payments. What are the minimum payments every month on this 28k?

So there's two separate cards and the minimum payment equal to $700. OK. So the goal is going to be, what is the smallest balance of the two cards? Um, roughly under 11,000. And then the other one's about 17?

Yes. OK. So our goal is going to be to chip away at that smaller 11,000 one. And I mean, if you put 1,000 bucks toward it a month, you'd be done in around 11 months. So about a year.

So that's just the napkin math to show you how long it's going to take, how fast you can move depending on how much margin you have. So that's the name of the game here. We're talking about your income, we're talking about your expenses, and the gap between that, hopefully there is one, is called your margin.

“And that's what's going to allow you to get out of this debt fast.”

Normally, it takes people 18 to 24 months. It might be a slightly longer journey for you because you're a single mom. You're trying to go to school, which I wonder, can we put pause on school right now because that's hurting your ability to produce income? Right.

I mean, when I'm saying, it was just continuing education. And so I have everything that I need right now, it's just a matter of more visibility and getting myself out there more. That's true. But that's the client.

The truth is.

The truth is, Anna, though, that there is a horizon on building that for anybody who's

starting a business. There's a horizon for creating a reasonable client base that's dependable that you know you're going to earn. And so for that reason, no one is saying, don't do it, no one is saying, you know, it's not worth it.

We believe in that. We love that.

“However, a lot of times, you have to do something full time while you're building”

the business. While my husband and I were building our entertainment business, I still had to go and do gigs and perform and do a lot of the things that I didn't really want to do. But that's where the steady money was. And so I had to do both at the same time for a while until the business that I really wanted

to do took over and could earn me what we needed in order to pay off our debt and sustain our life. So I just really want you to hear that. I agree with George and this is for the broader audience. When you are about the business of paying off debt, you need focused intensity.

All right, you can't do a bunch of things at once because something's going to suffer. You can't work on school, work on the business, pay three cards at the same time. You have to pick one goal and focus all of your intensity and all of your margin and all of your efforts at that one goal. Even if it feels silly to say, well, I'm just focused on paying $2,000 off on this credit card

right now. You will be shocked. George, you know this. How quickly you will pay something off when you put all of your effort towards it. You got to get the blinders on.

So and there's a few moves to make here. I would possible I would try to go for a full time job while you double down on these side gigs. And if you have clients currently, that's great. And you can still try to find some more, but right now I would not be just so focused

on growing the business because that's going to take your efforts away from debt pay off side gigs on top of everything else you've got going on. And you're going to have to invest some of what you're earning back into that business to grow it. And now is not an investing time for you.

So I hope this business grows. I hope you call us back a couple of years now and say, I'm debt free, the business is flourishing because the help others, you've got to do it from this place of strength. And right now, you're in a tough spot.

“And I love this passion you have to help others who have been through the same situation.”

But Jay's right. You need to charge what you're worth, right now you can't just make it more affordable. That's generosity and generosity takes abundance to be generous. It's an overflow. And so I hope you get there. I love your heart for this, and we're hoping that you

can knock out these two debts using the debt snowball method. I saw on the screen something about debt consolidation, you don't love that. Let's not make this into one giant mountain, just to save 40 bucks a month on our payment.

The margin you can create through your income, through slashing your expenses, and maybe

putting that 16 year old to work too. Yes, that wouldn't hurt. Yes, little work ethic. Hey, George Campbell here, let me pull back the curtain on something you may not know.

“If you're in debt and collectors are threatening lawsuits, the worst thing you can do is ignore it.”

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That's GuardianLIT.com/RAMSI. The attorney advertising results may vary in no specific outcomes guaranteed. Welcome back to the Ramsey Show. I'm George Cannell here with Jade Warshaw, open phones at Triple 8 8 2 5 5 2 2 5.

We were just talking about margin Jade.

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We've had zero money fights because there's full transparency and we're on the same page. I love still fights, but no money fights. Yes, that's a healthy marriage right there. It's good. If there's no fights, I question the marriage. I go, it's not really real.

Yeah, but money fights I could do without. That's fantastic.

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Download it today if you want to find that margin. Paula is in Boston up next. What's going on, Paula? Hi there. Thanks for taking my call. Sure. How can Jade and I help? Okay. So I have two daughters.

Well, my husband and I have two daughters. They are ages 9 and 12 and we are in a really neat place where we're about to move from baby step to baby step 7. Which is awesome, right? Wow. Wow. Can I ask what happened? Well, it's kind of a mixed emotion.

So we live in a very high cost area and my husband has a line of duty injury from the military and a line of duty injury from law enforcement here. So he's going to be getting double pension and then military retirement as well. And because of the high cost of living here, we are actually selling our what we're looking to sell our home here and then purchase in a lower cost of living area and the home will be cash.

Wow. That's a blessing. And thank you for his sacrifice service. Thank you so much. You're right here. I'll pass it along to him. Wow. Okay. So baby step 2 to baby step 7. Just like that. Yeah, a lot of work in the between. But yes, essentially it'll it'll happen pretty quickly. God willing, but we have two daughters, they're 9 and 11 and because of his veterans status,

we're wondering whether to invest in a 529 for our daughters as a 100% disabled as dependence of 100% disabled veterans are eligible for yellow ribbon schools and to use the remainder of a GI bill. So sometimes it's happened half sometimes. It just depends on what the funding is. But it's very likely that many colleges within the United States, they could go to them for free. It's also we do. Yeah. Yeah. So we just we want to make a wise decision and support them.

But we also, you know, want to enjoy our money and not kind of put it away without necessity.

“Yeah. I would this would weigh into my into how I invest for school. I think knowing that this is”

there. I'm not sure what all would be covered. Does it include just tuition or is it room and board and all those other things, do you know? I believe it's just tuition. Okay. I might invest a reasonable like a smaller amount of money in a 529 knowing that okay, if they go to a 4-year, they're

That sort of thing, a meal plan. I just wouldn't overly fund it and there's calculators out there

that you can use, but just something to keep in mind. Defive 29, whatever money that's left in there,

“not all, but up to an up to $35,000, I believe, per child can be rolled over into a Roth IRA”

if they don't use it. So knowing that is kind of helpful. Also knowing that that money could pass to other siblings or other family members is also, I don't know if you would have anybody or a fewer your husband has any need to hire your education. But those are good things to kind of keep in mind as you fund that and what amount that you put into that. Okay. So if there's money left over, that amount can go into the Roth, but then what happens to the rest of it, which it's not used.

You can pass it on, change to beneficiary anytime to even grandkids or, I mean, there's a worst case scenario where you can just use the money. There's just a 10% penalty. Yeah. Oh, okay. So it's not like you can't touch it, just know anything beyond the 35,000, yeah, 10% which is not fun, but at least you're getting to your money. So it's not going to just disappear, but I would do a lot of homework on this because there's still a little bit of a fingers crossed, not knowing all the ins and outs

“to find print of this because I mind or standing the GI bill can only be used at one time for”

one person or the benefit split, which means it's, you know, half a benefit each. So that's the part where I go, if you're still on the hook for the other half, well, now we need to make sure we have some savings to cover that. Yeah, there's certain schools throughout the United States, like I know, Liberty University is 100, like it has it, so it's a yellow ribbon school, so they pay 100% of the tuition. Wow. So anything that's left over for additional, so some schools will say

50% for yellow ribbon, the other 50% is a GI bill. So we would just encourage them to go to a yellow ribbon school. Yeah. And again, there's a fingers crossed there because you sure can you force your kid? I hope, but maybe they go, no, I want to go across the country to the XYZ school because of this program or a boyfriend and you're like, listen, okay, I have to speak on this

because Paula, if that happens, the answer is no. You're on your own kid. Yeah, yeah, I agree.

And that's where the conversations happening early and often to where those kids know exactly where you guys stay, they know exactly how to go to school debt free if they so choose and I hope they choose that. But again, the 529 plan is a great backup plan to have because you can't use it for so much more than just that tuition and it's not going to hurt. You put, you know, 200 bucks a month in there from, you know, 11 to 18, you're going to have a nice buffer and not be worried about

any spillover gap. Yeah. And just some nerdy things to keep in mind that raw that a 529 needs to be, needs to have been open for at least 15 years before you can start rolling it and, you know, the annual Roth contribution rates still apply. So whether it's 8500 or maybe by those years, it will be like 11,000 who knows what the, so if you open them now, the kids will be, you know, 24 and 26. Well, that's great. They just have a starter retirement plan out there if you have two 529s

forums. So I love, I love that you guys are thinking about this and it's an unfortunate circumstance in which you guys are leapfrogging the baby steps, but again, we're so grateful for your husband's service. So that, that 529 rule was part of the Secure Act 2.0. 2.0. And I got to believe, you know, I feel like 35,000 is kind of low, but I got to believe that that might come up over time, possibly as Roth limits. Yeah, you know, I mean, it's going to only convert up to the amount of the

Roth IRA. So it's your, you know, 7500 bucks. You can't do it all in one fell swoop, but it goes up every year. So you got to believe 15 years later, which is when they're off with the eligible. Yeah. Yeah,

that's the hope. You never know what the government would ever do. They could revoke the whole thing.

You never know. I'm just glad there's an option because for so long, people were like, well, I don't want to do it because what if they don't go? Yeah. And I go, we have a student loan crisis upon us with about 1.7 trillion. Yes. I'm more worried. They're going to go into crippling student loan debt than the wonderful problem of what if they don't go and I have a pile of money sitting here that I can change any beneficiary. And what's cool? I mean, this can become a generational

100 college endowment fund when you think about it by the time your kids have grandkids. Never, you don't even have to add anything to it. It just grows. It'll just snowball into this massive pile of money. That's why I like that idea. I'm not like aiming for that, but if it happens, I'm not mad. Not mad. Yeah. Well, Grandpa George started a scholarship fund for his whole generation.

“Ken, I think that's what you call it. That's very Beverly Hills. What's weird to”

think about is I'm going to be somebody's ancestor. That's just weird to me. It's just I don't want to think about it. I don't want to think about it. But it's a good teaching on the baby steps here, Jade, of when to do this because some people, they love their kids so much. They

talk about that. There's a time to begin investing. You've got to put your own mask on first. I've

“heard you say that. I think that's a really great analogy for it. Over here, we're going to teach”

you get your own house and alignment, your personal business. First, that's you paying off your debt. We teach a series of baby steps. Baby step one. Get $1,000 saved. That's pretty quick. Most people do it in 30 days, George. Baby step two. We talked about it earlier in the show. This is where your debt snowballing. All of your debt. Everything except the house. And then from there, now we're going to start playing a little bit of offense. Is that a good way to say it? Yeah. We're going to

start saving up some money for ourself. Three to six months of expenses. It's a barrier between

you and life. Making sure you no longer go into debt. Making sure you're in a really good

financial footing. So that you can begin baby step four, which is investing. Now we're starting the process of investing. Baby step four, five and six. We do simultaneously. You won't know it. That means at the same time. So baby step five. Now's the 529. You could do an ESA. There's limits there. I like a 529. We just keep eating details about it. Yeah, I do 529 plans for both of my kids. Couple hundred bucks in there from zero to 18. You'll have six figures in there,

which is right. That's right. What it's going to cost for a normal state school by then. You're lying. God bless. Let's keep saving.

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Alice is up next in San Antonio. Welcome to the show, Alice. Hi, thank you so much. My question was what is the difference between being generous and enabling poor financial habits with family members? I love this question and also I'm sorry. How close are these family members? There might have been siblings and low.

“Well, I think you said the difference in your explanation. I think the difference is poor financial”

habits. I think that is the difference between helping and enabling. If somebody has really poor financial habits and let me add this part, they're not interested in changing them. That is the difference because I think all of us started out at a point where we had a lot to learn financially. And when the knowledge came, we were willing to receive it. We were willing to look at ourselves and go, okay. Yeah, they're right. I need to change. But if these family members are

not willing to do that, that's where it becomes. I believe enabling because it's no longer helping them. Yeah, there's no movement toward independence and the direction is not toward freedom for themselves and autonomy. Well, then we're just giving to give and if they keep asking for more giving, it's not really giving at that point. It's entitlement. So is that where you guys are at? Are they every month going, hey, can we get 500 bucks? No, and it's not even that much.

So maybe it's just in my head. But it's, we've been married for seven years now so I would say over the course of seven years, it's five and like every three months or so and it like rotates between them and then sometimes his friend also act. Oh, hello. So when you guys have been going around that you, it's Bank of Alice. Are you guys wealthy? No. And we've also gone through like different jobs. Like we have two little kids at home and so I stay at home and work. I do some like side stuff

but like between us, you know, we probably are on track to make about 70 this year, but you know, up and down. So it's like it's not even like, you know, we're working six to get, you know,

will be able to fit the bill? Why do you think that is? Because you've given them money before?

“Yeah. And I'm not sure what he was doing when he was single and stuff. But it just has been, you know,”

25 years here, 50 years here. I need help covering my phone bill. I've never really been like,

we can't put food on the table. It's always been like, hey, this bill is here. So I don't know where it started and why not, but I just like know that it just keeps, if it's still, you know, seven years later, everyone's a while comes up. So I, you know, I feel like I'm in a bad position because, like, we have 25 dollars. We could send them, but I just know it's going to come around again. Yeah. And so, and I don't want it to be 500 or a thousand in the future kind of thing.

Or are you guys debt free? Yes. Your debt free? What baby stuff are you one? I don't really have been following them, but we just re-run. We don't have any credit card debt. We had school loans when we got married, but we paid them off within the first year.

And then, and we had some credit card debt, but then we paid it off. And do you have any savings?

Yes. We're working towards, like, three to six months of, you know, built up. So I think we're about two months ahead on our budget. Okay. What is that a quite two dollars wise?

“I think it's 30,000 dollars a month. Okay. 30,000. You have 3800 saved or that's what you”

paid for a month. So all in total, it sounds like crazy, but between all of our accounts, we probably have about 20,000 dollars. But I have it, like, all year marked for months or a car fund or stuff like that. Okay. So the small tweak, and you didn't ask, but I'm just going to say, this, the small tweak that I would make is I wouldn't make sure to do the math and figure out what would be six months of expenses. With 70,000, I like the idea of you having a full six

months of expenses. It sounds like only one of you is working. Not both of you. Yeah. My husband is working full time and then I do, like, um, contractor work. Yeah. I'd love for it to be a full six months of expenses. And I might hold back on the funds, especially if it's not something that's really, really pertinent to, to the moment. I would hold back on doing the funds and get the six months settled and then above and beyond we could do the funds on top of that. So back to the question

at hand. Yeah. You just have to say no. Is your husband aligned on this or are you the one who's like, hey, I don't like this pattern. He's like, well, it's just 25 bucks. It's fine. Or a seed just as mad as you are. No, he sees it as, like, it's only 25 dollars. And I see it as it's a pattern. Did you get any unification there? Yeah. And that's where I feel weird because I'm like, I enjoy being generous and but it like, if it just, are you generous in other areas? Like, do you guys have, uh,

“is, are you, are you church people that you do tie? Or do you have foundations that you give to?”

Are you generous regularly in other ways? Yes. Yeah. We do 10% to our church and then we set aside another 10% to just give to random things. Okay. And is this part of the 10% that you set aside to give to the random things? No, not typically it's usually like structured organizations, missionary. Okay. So that answers that question. That answers that kind of moral dilemma of am I not a generous person? Clearly you are because you are giving, it sounds like 10 to 20% of

your income, which is very, very generous. So that answers that moral dilemma. Anything beyond that is, is this is the relational part of it, which is somewhere in his mind or upbringing. He kind of feels like, well, this is just what you do. You know, if your buddy asks for 10 bucks, you give it to it. We're not hurting. So what's the big deal? Now, there is, I do want to, I think there's a, there's a difference here. If my, if a friend of mine was like, hey, we're out to dinner. She

forgot her wallet. Of course, I'm spotner the 25, but whatever it is, that's very different than, hey, man, you know, I'm just coming on some hard times. Can you, can you, can you spot me? You know, I just got, I need something from a cell phone bill, right? That, it's a different feeling because it's like, well, what's causing this? So what you can do, a very amazing way to be generous, if you have not already done this, is you and your husband number one to George's point. You got

to get on the same page, but when you do, you sit down with the mother and mom, you sit down

with the friend, you sit down with the siblings and say, hey, here's what, and separately,

you know, at the same time, here's what we're seeing. It just sounds like you guys, we love you guys, and it just sounds like you're going through a hard time. We'd love to show you the thing that helped us. We've been there, and we started walking these baby steps. We thought it'd be a great idea. We'd love to gift you this, and you can gift them every dollar. You can gift them financial piece university. Matter of fact, before we leave, we'll give you the total money makeover. Put a

and we know it can help you too. And that to me is a subliminal way of saying stop asking me for money. They'll get them out pretty quick. And it's okay to just say, hey, we're not able to do that. That's not in the budget for us, but we'd love to sit down, help you, create a budget, and help you avoid needing money for bills next month in the month after, because we're seeing this pattern, and we love you. And so it's not out of a place of, you know, you're better than them.

It's out of a place of love, actually. And if they never feel the consequence, then they're never

going to change the behavior. So you're not being cruel by stopping. You're actually letting the reality of their life do the teaching that you can't. And that's a hard thing to do with family, people that you love. And then they feel a certain way about you and they go, wow, wow, so stingy. Well, this is the part of money. This is the part of money that is emotional, which is it all has to do with the way we were brought up. If you were brought up in a way that

you know, everybody just kind of, it's a pot of money, and you just kind of throughout the family mom gives to dad, brother gives to mom and dad, grandma, you know, and everybody just kind of reaches in.

“That's very different from probably the way that you grew up with money emotionally. And that's why”

the two of you and your husband need to kind of sit down and have a meeting of the minds there,

because it's not necessarily that one is wrong or right. It's just your values and how you view it, because, you know, some people might argue, hey, if the money doesn't bother you and you can do it, do it. Some people might argue that I would disagree with that, but it's just a, it's from a value standpoint. Got it. That makes sense. Not to the rain on your old parade, but we did buy them budgeting books for Christmas to go. It wasn't every dollar. No, it was a different one,

but maybe what it's collecting. That's why it didn't work. I don't even know if they read it. Well, we'll give you every dollar because that's someone that'll actually work, and we'll also give you total money makeover. George, what about breaking free from broke? Let's throw that one in there. Yeah, and I'll give you mine also, what no one tells you. It's a convolutal. Well, there you go. So that the key pieces here are guilt-based giving is not generosity and enabling isn't love.

And the sooner you can understand that and put the boundary up, in love,

“the better your life is going to be, the better your marriage is going to be.”

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of membership. Go to CHMministries.org/budget and use promo code Ramsey. That's CHMministries.org/budget and use promo code Ramsey. Welcome back to the Ramsey Show and the Fair Wins Credit Union studio. I'm George Campbell here with Jade Warsaw, open phones at Triple 8, 825, 5225.

“Danny is up next in Orlando, Florida. Danny, how can we help today?”

Hi, thank you guys for taking my call. Sure. So a little background, me and my husband have been married for about a year and a half. He immigrated here from Peru. He's been here for about five years now. He has a high possibility of being deported before our family case is approved. So that'll be that decision will be made in December. So we still have about 15,000 in credit cards that we were working on paying off. But my question is should we just

keep the payment and try and stack cash in this time since I don't know. If he is deported, it'll be like two to five years before it will be able to come back. Oh my gosh. I'll be going with him, of course. Right, that's going to be my ask. What are the financial implications if this does happen? Like come December, let's say he is deported. You go with

It depends. He could be detained for a couple months before he's deported and then it's kind of

up to the government as to where they'll deport him to. Then we may have to pay for him for a flight to a new place. That's a little safer for him. He's thinking about going to Spain. He's a buddy that was there that could help him out with starting his life there. And you're going to follow him wherever he is. I would plan. Absolutely. Okay. What are you guys doing for work? That's my husband. Right now we both manage a kitchen. I make about 26 dollars an hour and he makes 23 dollars an hour

and then we also have a bunch of side jobs. So we're bringing in about 8,000 a month. 8,000 a month. Okay. And do you, are you renters? Do you have a house? Tell us about any assets you have.

We have two paid off vehicles. One that has a loan on it but it's not upside down. It's a

wash if we sell it. So we have three vehicles or we're selling the one with debt on it to get that monthly payment out. We have monthly bills of about $1,000 in lawyer fees and then the rest of our expenses are about three grand a month. So we'd be able to save a piece of the amount of money.

“But paying off all that credit card debt. I think I'm not sure if it would be wise to do that”

given we might need it. Yeah. I'm calling this storm mode for you guys because it's a storm. Then you know what's coming and so I would treat it that way. Just like we would if there is a baby coming or if you knew you're being laid off that sort of thing. Did you say that you're renting? Yeah. Okay. You are renting. Okay. So if you were to go, let's pick Spain. If you were to go to Spain, I'm guessing you would sell the remainder two cars. And how much would that give you?

About 7500. Okay. That give you another 7500 and then if you were to stop just payment of payment and stop debt snowballing, how much would you have saved by December to add to the 7500? To get out of the apartment it's three grand. We'd be breaking our lease. Okay. And then after that we could probably save up about 15,000. Another 15. Okay. What I would start doing is to try to, and I know that you don't know, you mentioned Spain.

So I would just start there. I would just start gathering as much information as I can. I'd look at where his buddy lives in Spain. What's the cost of living over there? What's it cost to get a two room apartment or a one room apartment? What type of job opportunities are transferable that you do here that you could do there? And I do the same thing for Peru. Where whatever area of Peru is family is from, right? And just start to get as much knowledge

“and information as you can. I think that's going to give you more peace.”

Yeah. More money, more information will give more peace. Absolutely. So it is wise to stop paying on the, well, just make minimums on the credit cards. Yeah. And if this doesn't happen in December, well, now you have a pile of money just knock at those credit cards instantly. Okay. Okay. But if you can approach this with like 25 grand in your pocket, I think that's going to feel really, really good. And to kind of have a checklist

of here, here's what what we're going to do. We're going to sell the car. And then we're going to

do the least. And then we're going to do this and just kind of literally put down a plan of action, like document it and document what it would look like going to Spain, document what it would look like going to Peru, all of that. And I think that that's just going to help you feel Uber ready for this. And you can use the every dollar app, Danny, and plan all this out. You can make a fake budget. Like, here's what our new life could cost us. Here's what our current life costs us. And in the

meantime, use that budget to create as much margin as you can. Now is not the time to go yellow and life's crazy. So let's eat out. Now it's how do we use as little of this money as possible to stack it up so that not only can we pay off the credit card debt, but we have an emergency fund.

“We have no debt now starting this new life. So that's the end goal. Is can we whatever happens?”

Can we restart this process with no debt and an emergency fund? You guys will operate differently. No matter what happens. Yeah. And spend some of the things to add to that list would be, if you do go to Spain, you're going to likely need some sort of work visa as well. And what's the cost for that? So make sure you're factoring that in as well. That's a lot. That's a wild one. What shouldn't you guys the best? All right. Daniel is in New Orleans up next. What's going on, Daniel?

Yeah. I was going guys. I was thinking my call. Yeah. So I got a question. So if I was used,

young. And I've used the principles and teachings that you guys have had. Just getting to

now adulthood, my oldest daughter graduated from flight attending school. The same day she graduated from college, debt free with a bachelor's degree. And she's going to be doing some international travel with her new career. And I'm just trying to figure out how to navigate, you know, using a debit card during international travel. And what kind of advice you guys can give me that I can pass along to her? I love that. That sounds like an adventure for her. Well, I mean,

I can tell you what I did. My husband and I worked on cruise ships and went to over 92 countries. And I had a debit card. And a lot of times I would call them ahead of time and let them know. I'll be out of the country. Here's where I'll be visiting. So my card would work in those different

locations. I never had an issue with them thinking it was fraud. But also, because I was traveling,

they knew to be aware that there could be fraud. And I had all the same protections.

“And another key point here is international fees. And you can avoid that. Our friends at Fair”

ones actually, they created a smart bundle for our fans that includes a FairWins debit card. And after watching my video that I did on this topic, they said, "Hey, let's get rid of international transaction fees for all of our users." So she can open up a FairWins account and sort of use that as her, you know, international spending money and keep her home bank account separate and just sort of fund it with how much she needs each month from that. And that'll help protect

her, you know, son of OG account as well. So that could be a great move for her. And on top of that,

they will even wave 10 bucks a month in ATM fees if you're international. So a lot of cool features there, not intentionally applied for FairWins. It just happens to be the thing that came to mind of how to solve this. And for online purchases, there's a great one called privacy.com that allows you to create virtual debit card numbers. So that's another solution if she's making

“purchases abroad online. They even can do a physical card as well. But I think FairWins would do the”

trick right now for her. And I'm less worried about fraud now with things like Apple Pay. Yes. And I try to use the local currency instead of converting because that'll actually cost you more to convert to USD. But you know, do the research. Nowadays it's easier with a smart phone. That's right. There's an app for everything. That's right. Hey, you guys. Did you know that there are thousands of data brokers whose entire business

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Jenna is in Seattle up next. Jenna, welcome to the Ramsy show. Hi there. So my question is quick into the point. Should I allow my very generous boyfriend to pay off some additional debt

“of mine? Wow. Tell us more. What does additional mean? How much has he paid off so far?”

Well, he paid off a personal loan that I had taken out to do some home repairs about a year and a half or two, about a year and a half ago. And then about six months ago, he paid off my student loan. Oh, how much was the personal loan and how much was the student loans? The personal loan was maybe $15,000 and the student loan was probably 35,000. Oh, my. So he's paid off $50,000 worth of debt for you so far. How much more is there to go?

Well, I all have at the car and a home loan. That's the only other debt that I have. Do you guys live in your home? We don't live together. Okay. We maintain separate households.

We both have kids that are all college age. Okay. How old are you guys?

In our 50s. Okay. He's retired. He retired young. Okay. He and his late wife did everything right financially and I'm divorced. And so that kind of messed up my financial situation. But I'm in a weary head. I'm just going to talk to the chase. We, we, um, we've both decided we don't want to remarry, but we, we found, you know, we, we're committed to each other. So continue to live in separate households and hopefully be together forever.

And separate households. I don't know. We're, we're still figuring that out. I'm going to tell you, Jenna. I think this question is more about you than it is about him. Because if you said to me,

this is the one. Like, I, I think we're getting married. I want to be with him. And I think it's

happening. I think he's going to pop the question. I would feel less of the way I feel right now,

“which is I don't think you need to be accepting these gifts from somebody that you don't think”

that you're going to be on the long haul with $50,000 with a lot of money. Well, I think we're going to be in the long haul. We just don't necessarily want to get married. I was in a very abusive marriage. True that. He had a very long, happy marriage. But, um, true that, but you and I both know long haul doesn't exist without a committed, without commitment. And I, I didn't hear it. It's like, it could be like, I, I care for him. I love him, but I don't know. It was more like that is fair enough.

I don't feel that way, but I can see how it comes across that way. That's, that's my only thing. I don't hear me because this is on all the radio and all the YouTube and all the podcast. I think you're a great person. I don't think that you're in any way trying to like scam this guy or you're not doing anything wrong. It's on his volition to want to spend his money. How he so chooses. He could give 50 grand to a charitable organization or a game. Sure. Vegas. It's his money. He's choosing

to help somebody that he loves, which is a very noble friend. We can all agree on that. I just don't know that I would accept such a gift if there, if there wasn't a full commitment there, because this is the type of thing that could breed resentment later, I think. Right. Couldn't this hang over your head of, hey, I paid off 70 grand of your den. This is how you could that happen one day? I don't see that happening with him because he also pays for a

wiggle on a lot of occasions. He pays for everything. He doesn't let me pay for much of anything. He just, he has done well and he, yes, he independently wealthier. He's obviously retired. He has a huge nest egg. If he's just willy-nilly paying off debts like this, it sounds like he's doing very well. He's a multi-millionaire in my guess. Well, yes, I, yes. We're very open about about the financial situation. It's very a lot cited. What's his, give me an estimate. What's his

net worth first year net worth? He's in the double digit millions. Okay. I'm in the, at less than

half a million. Okay. For you, for you and your placement in this relationship, I love the idea,

“I'm not saying that you need to go back and pay him back the 50,000. I'm not necessarily saying that,”

but I don't want you to let him pay your car off. I want you to do that. I want you from this, if, if you take on debt, because you have said, hey, we're separate. We live in separate places. We have separate finances and many, you're dating. Like you, you guys have maintained your boundaries. I actually love that for you. Since you're doing that, I would do that in this area as well. No, it's my debt. I want to pay it. I think that allows you to maintain a certain amount of

independence and I think it allows you to keep the, if this were a marriage would be different, but it's not. So it allows you to keep the balance of power. Right where it should be, which is, there no one can say that this guy is taking care of me, that I'm mooching off of him, that I'm living off of him, that I need him. You're still a very independent woman. And I want that for you. And I think it's a good thing for you. And I think it'll make you feel better in the relationship

“long term. Yeah. What do you think? That's kind of how I, that's how I feel about it. Okay.”

Okay. Yeah. He's, he's just a nice guy. I can sense it. Like, I really, yeah. Oh my gosh. And I think you're a nice lady too. And you're like, this is, I think it's probably really great. I don't sense anything that's off here. I just, if I were in your shoes. Yeah. It's not, it's not.

find a trust that you need and find the healing that you both need because you both have been through it.

I mean, you said he's a widow and you've been through an abusive time. I, healing would have to take

“place in major ways. I think for both of you to get there. But man, if you can, it's such a beautiful thing.”

Yeah. Mayor, Mayor, I just not the villain here. And I know it feels that way because of your past experience. But being married to this guy is going to be light years difference than your last one, right? Right. I can already see that based on the way he's treating you in his generosity. So it's not that we're like, you better get married or else, Jenna. I, I just think it adds a different level of commitment. It adds a layer of protection on on his part, even though he doesn't really

need it financially. But the question asked yourself is this, is this help accelerating your own

independence or is it replacing it? That's the part that worries us more than anything. Because what if one day you guys break up? And now you're kind of needing him for his income and the lifestyle. And now you don't have that. You don't have your own retirement. So there's also some protections you don't have in that regard. Right. George makes a good point. And I'll go further on that point, which is I love that the separation that you guys have created because that's just

what I think is a normal dating separation. I think that that's good. But I think if you tie your finances up too much in the way of, yeah, letting him pay major debts, there could develop, let's say in the future you're starting to notice some things that you're like, yeah, I don't know if this guy's the one. When he's done so much for you, it could make you feel

“like you need to stay with him longer than maybe you would of if these things hadn't been done”

for you. Does that make sense? Like it could just create a cloudy vision there that I wouldn't want for you. But I don't see that happening. I think it's going to be all good. But I just want to throw that out there for you. What is your income right now? My primary job, I make about 150. And then I get some of my ex-husband's pension, which all goes toward my retirement. And then I have some a side gig. Yeah. So you're good. You got money. You've got your own

account. You could break this car a couple of months, it sounds like. What's left on the line? Right now about 40. Okay. So if you took, let's say, four, five grand a month, you could be done with this in eight to ten months. There's my question. If this was only on you, there's no urgency here. You're not changing any behavior that got us here. What we went out and bought up, you know, $50, $60,000 a car. And that's the part. I want you to be good on your own,

to where you don't need him. Right. And I think it's going to change Jenna. If she pays off her own car loan, she's going to drive that thing differently than if Jenner's boyfriend swooped into pay it off. Now she's going car shopping again. Go on. What other deck can we get in? Let's play this game. This is fun. So I'm wishing you guys the best. I hope you have a long, wonderful life together. And yes, I hope you get married selfishly.

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“Katie is in Sacramento. Up next, Katie, what's going on?”

Hi, so I had a question. I am getting a about $75,000 workers comp settlement, and my parents want me to save all of it for a down payment on a house, and I was wondering if it's valid to take 5 or 10,000 of that and spend it on my wedding for next year. Oh, okay, what happened with the workers' comp situation? I got injured, and yeah, I ended up getting an attorney and turned into this.

Wow. Are you okay now? Are there any kind of ongoing health? I'm getting better. Yeah, I have good insurance, so yeah, but I'm fully getting better now. I'm just doing a lot of different treatments. And you'll be able to work as you once did? Yes, okay. I start nursing school in the fall, actually. Okay, cool, cool, cool. So you're getting married. Are your parents helping fund the wedding at all?

Or it's just you and your fiance fitting the bill? So it's a little bit of both, so his parents are pitching in a little bit, minor pitching in a little bit, and then we're also going to have to

“pay a little bit on our own. What's the total budget? I think we're looking at about 15,000,”

and I'm thinking we're going to be splitting it three ways. Okay, 15, you said? Yes. Okay, so you guys collectively as a couple would owe five grand. Yes. Okay, and you want to take 5,000 of the 75, and that be your cut? Yes, correct. I mean, I don't see why not. Is there anything else to the equation we need to know about? Do you have a bunch of debt laying around anywhere? It doesn't sound like you do.

No, we have no debt. We have paid off the occult, and we currently are living in a trailer on our house. My future in large property to save money. I don't, I have my bachelor's degree, but I don't have any student loans. I have all of it paid off. How are you paying for a nursing school? It's only about $5,000 to the throughout community college, so my parents are offering the pay for it. They're paying for that. I mean, I think $5,000 of the 75 is a reasonable amount.

“I think the $15,000 dollar wedding in full is a reasonable amount. I'm honestly impressed. You can do a”

wedding for that number. In today's America, I agree. I guess my second part to this question is

what to do is the rest of the money to help it grow over time until I'm ready to buy a house. Yeah, how far away is that purchase, you think? Is it a year or two years, five years? About five years. Five years. Twenty-one right now. The magic number. Oh, wow. Ding ding ding. So the way we look at this is five years is a long-term decision, and so you could invest this money. You could invest it in a brokerage account,

non-retirement, put it in some index funds and let it ride. And hopefully, in five years, the reason five years is sort of this magic number is because over five years, you're likely to see some gain in that investment account versus a shorter time period, like two to three years. You could see some market dips and you go to pull out that money and it's a smaller amount than you even put in. That's not the ideal scenario. So if that worries you at all, a high yield savings account

is still a great option. You can make over three percent, you can jump on to fairwinds.org/Ramsie and open one with smart bundle, and that'll at least help your money grow and not get eaten up by inflation, sitting in a checking account. Yeah. What would you do with your investor, or would you hold your temperament? If I knew it was five years and I'm not going to get a little you know, doom scrolling on Zillow and go over really three years, then I would be comfortable

investing it, and you can always contact a smart investor pro in our website to help you

invest that wisely. But otherwise, a high yield savings account, no one's going to be mad at you if you do that. Nope. Okay. All right. Sounds good. Well, thank you guys so much. Yeah. Good luck with everything. It's a lot of life change. That is a lot. Nursing school getting married, trying to buy a house, especially at 21. Yeah. So much life left to live. Babies, I tell you. Don't you wish you could go back and be 21 in debt free? If I was 21 in debt free, I wouldn't know how to act. I don't even think I

wouldn't know how to. I don't think I can say that way at 21 with my prefrontal core tax. I don't know. I'm an inch in for some debt. Listen, I think I needed to learn my lesson. Maybe it was good that I had some of us need to touch the hot stuff. Yeah. That's right. All right. High gives in Portland up next. What's going on, Mike? Hi. Thank you for taking my call. I've got

groundwork here. So I'm 29 years old. I am a nurse. And I make pretty good money. Currently,

“make about 250 a year. Well, as a nurse. How? Try to know. No. So luckily on the west coast,”

we do I'm from Florida and we make crap money there. And we get paid a whole lot more here on the west coast. That's one of the reasons I came out here. And I do work a good amount of overtime that's also this is just in your case. Is this a specific type of nursing? I'm just a nurse in the hospital, whoever nurse in my hospital could make that much of thing work. I mean, that's like doctor money. I'm just impressed. Why do you go? Well, see, that's actually part of the problem.

I mean, it's a good problem to have sure, but this is the reason I'm calling because I like being a nurse, it's great. But I don't want to do this forever. I do want to do more down blind. So I also have been here for about a year and a half and I've got just a little bit over 200 K invested in my in my brokerage account. And it's been going well. And really,

I went into nursing because I wanted to do something else down blind initially. It's basically

something you can go back to school for and you essentially are working anesthesia. Those guys make much more money than even the 250 I make. It's closer like 350, 375. Yeah. But it's a three-year school to go to. And most of those schools will either make you sign a contract saying you cannot work during that time. And even if they don't make you sign a contract, you really, you can't really work in that time. It's so easy. It's pretty intense. Yeah, you're really not going to be able to

work very much. So initially, when I worked in Florida, and you know, I was going to make about 60 K a year. So that was a pretty easy thing to pass up for three years to go to school and make a whole lot more money. Right now, it's so much more. So to give up for this income, what would you be earning if you got the degree after three years? So pretty, pretty reasonably in-we're between 350 and 375. That would be pretty reasonable. And what's this program cost? Um, so that's the other thing.

Um, the cost of the program usually about one about one 30 to one 60 depending on the school. By you also have to live, right? So you also most people have to take loans out. Till it's, it's, it's very similar to medical school because most you will go to medical school. They don't have a significant amount of money to be even brave off of. Well, you've got the money invested to pay for the cost of the education. But you're, you're not quite, the problem would be

“what would you live off of for three years? How much do you need to live for a year if you, if you were”

just acting like a broke college student while you're in this program? Um, so I pretty much live like that now. I invest my money very, very aggressively. Um, probably, uh, I would maybe like 3,000 bucks a month. So you could live on, like, say 50 grand a year. You could live for sure. So you need a 50,000 plus the amount for the program, which is 300, you currently have 200. Here's a game plan. I would just work for another six to 12 months and save up another

hundred K. And then you've got a nice little parachute to not work for three years in cash flow as an entire program. And you will likely be the only person to graduate from that program completely debt-free. So here's the other option. I think that's a, that is one of the ones that I is one of the options that I was thinking about. Um, but the other option I got about is why not just keep doing what I'm doing. And what I mean by that is if I were to keep doing what I'm doing for

about another five years, um, I would reasonably, I mean, you know, assuming the market goes okay. Uh, I invest in very, very, like, very, like five seconds. We got five seconds at my time, spit it out. You want to retire early? What? Uh, no. I don't know. I would retire early. I would just like to

fortify more years and have about one million bucks invested. And then instead of going the

anesthesia out, just go be a nurse practitioner. Yeah, my brother does that. That's a great field as

“well. I think either way you're good. Follow your heart here. Do what you feel is right.”

[Music] The Ramsey Show question of the days brought to you by Wirey Phi.

But Wirey Phi helps borrowers, explore refinancing with low fixed rates and payments that

“make sense for their budget. Was it, visit Wirey Phi.com/Ramsey to learn more? That's the letter”

Y-R-E-F-Y.com/Ramsey. May not be available in all states. All right. Today's question comes from Travis in Maryland. He says, "I'm debt free and I've built a successful career making over $150,000 at age 28." I will soon be marrying my fiance who is graduating from medical school with $475,000 in student loans. Whew. She seems flippant about this amount of debt when I

bring it up. While the amount stress is me out, I've never had any debt because I paid for college

vehicles and etc. out of pocket. How can I communicate to her the importance of getting this paid off once we're married? Once we're married. Oh, oh, yeah, yeah, yeah, yeah, okay. I wouldn't wait till then, bud. I know because I want to show improved. I'd be like, show me that you agree with this sentiment by starting to pay off some of this debt on your own fiance. Yeah, not being aligned on your values around money is one of the biggest red flags. It's a red flag.

Big flag. You've got to get that part dialed in before you get married. Yeah, the fact that she seems flippant about it specifically is what would give me a little bit of pause here. Which can we be honest? Most people who went to medical school and went half a million dollars into debt are flippant because either they're in denial or it's monopoly money to them. Because you're like, well, let's take me a lifetime to pay this off. Yeah, I have a couple

of questions. I wish you'd called in Travis because I want to know when is she graduating? And I want to know how much time that and when you're getting married. So I can understand the timeframe. What I think needs to happen is as much as she can begin starting to pay these off now while she's working. And then once again, I don't know the timeline. Yeah, she's graduating. We don't know when. We don't know when she'll have a job. What residency looks like all of that.

So this could be a long journey before she's making real money. And so if they're married, it's basically it's Travis's problem. That's right. So he's worried,

understandably about taking on a half million dollars of debt. And if she's not on board with him

going, you know, full force patients, she's been on a problem. And he's like, we got to clean this up before we get a house. Well, there's going to be a lot of fights. They got to have this conversation.

“This is a conversation that you're not going to want to have, but you need to have and”

you have to have the conversation and not try to manipulate the outcome for it to be what you want simply because you think you want to marry this person. You need to go where the facts lead my friend. And I would get to the bottom of why she's flipping about it and do it calmly. You don't need to be defensive and instigating and yelling. But just say, hey, I want to know why are you so cavalier and nonchalant about this? Like, this is a lot of money. Yeah. And you might need to help

show her that with some math and what a monthly budget would look like trying to pay off half a million dollars in student loans. And she's going to go, oh, make in 16 residency for five years. This is going to be a tight life. Yeah. It's going to delay our ability to buy a home and go on vacations and upgrade the cars and all the things you want to do once you're married. That's true. And so if you guys can only get on the same page of here's the game plan once we're married,

here's how we're going to attack this debt, then I would move forward. But I would not wait until your married to have that discussion. I would not. And I want to let's talk about this for a tad bit longer because I think this is important. So if you're dating someone and you want to start having conversations about money, the first thing you're just trying to learn is what their philosophy is

“around debt and spending. And I think the best way to do that is to simply float a question out”

there and listen for the response. Don't start by saying your point of view because I think a lot of times if you're out with somebody, you like them, you think there's a future. If you have a sense of what they believe sometimes you can kind of veer your answer towards theirs. There's a little bit of fake it till you make it a little bit. Yeah and you don't and with this subject you don't want

that. So it would be as simple as me being like so George. You know so we've never talked about this

before like what's your philosophy on money like what do you think about money and you just you're just quiet and you just listen really what do you think about debt? A debt is fascinating to me what do you think about it? And if he's like well you know if you ever did the right way you know learn and I would that night I would just everything would be like oh that's so cool. You know does he ask you the question back? Be like these are all of you. She shuts down when you bring it up

and that's something we got to dig into. Yes. What's behind that? What's in my piece of the from her child that her parents handled money who knows? Shane Gil baggage but you got to deal with this stuff before you put that ring on it. Yeah there's got to be like three levels that you got to get to. Number one is just you learning. Number two is are they asking you are they interested in your opinions on the matter? And number three maybe they shut down the first few times what if you

go in there for a third try is it still lock and key or are you able to see a little bit more

be amplified once you're married. Yes. Once you can really let your hair down. Yeah it doesn't get

“easier simply because there's a ring on your finger. Yeah please good luck Travis. What's your the best?”

Terry is in Boise up next what's going on Terry? I am calling to get you guys a opinion about what constitutes a valid emergency to go into safety funds. Oh, are you guys disagree on this? vehemently. How long? What do you think constitutes as a financial emergency? Things like well so I've been on a long-term job search and so that's adding to my wife's stress about money.

So that in and of itself is kind of an emergency which I've tried to include in the conversation.

Perth take home pay is about $3,800 a month and we have been using every dollar and then live it on a very declared budget and so when things like how you know polls in the shoes or prescription contacts for our kids or a dentist or car repair more like kind of preventative maintenance. Yeah car care a lot of times. She thinks that's an emergency. What is over? They took us over the $3,800. And even I actually even know pretty much the

exact amount that we should be supplementing the monthly income by about $300 because of how responsible we're being but she is just very fearful of the savings going away because the job

“search has taken so long. Are you guys living off of savings because of you not having income?”

No, no, we're living off of her income. How much is the savings? $40,000? Oh wow. Yeah, and you guys don't have any debt? No, we just finished. We went back to financial PC University through our church last year to get rid of medical bills and tax issues that I had from my company that has closed. Okay, wait a go. You guys are in a better financial position than you think, especially once you get some income in the door. How long have

you been going without income on your side? Almost a year. Okay, what? That feels too long to zero income, zero work, zero side gigs. I have been applied to everything. So I'm a sales engineer and industrial automation. There's not a lot of that here. A lot of the jobs that I've applied for at the nurseries or retail jobs that kind of don't understand what I'm doing there. They've actually made comments about the jobs for high schoolers kind of thing. Sure. That's okay. That's okay if

they make this comment. Yeah, and we have the budget history to show that. So $4100 is really what it should be. If she's taken on $38, she needs to be taken on $41, or you guys need to be creating

that level to cover all the bills. And so I'll say this. Here's what constitutes an emergency.

Is it unexpected? Is it urgent? Is it necessary? If it's not those things, then we know. All right, this really was just poor planning. Let's add a sinking fund line item in the budget for car maintenance for contact lenses because we know that's going to come up every few months. That will

“solve a lot of these problems. But I think she's really stressed. Because you haven't had a job in a year.”

Any job. Any job. All the jobs. Make a job. Welcome back to the Ramsey Show and the Fairwins Credit Union Studio. I'm George Kamel, joined by Jade War Shaw. We've got open phones at AAA 825-5225. You jump in, join the conversation about your life and your money. Doug is in Charleston, South Carolina. Next, what's happening? Doug?

Well, um, 50 years old. You said 50? Correct, we lose. Yeah, 50. Okay. That's right.

And I've got two point two million dollars saved up, and I'm spending part of it on a 32T.

Sorry, what was that last part? Your phone's breaking up on us. Try speaking directly into it. So you two point two million and then what? I want to do a 72T retirement plan. Okay. And what's your, and I won't expense as a reader. Do that.

“I don't have any bills. Everything I got paid for. I'm sorry. What? Do you like what?”

Everything I had is paid for. You don't have any bills? I helped. No, sir. How does that work? I mean, tax and insurance. I mean, it's still falling in light bill and stuff like that, but not not bills bills. You know what I mean? No car pain. It's no. Sure, but I'm talking. I'm talking. Wait, I mean, you don't need eat. Well, other than that. You got it, like other than that. Okay, because I'm thinking like health insurance, life insurance, car insurance, home owners,

insurance, property taxes, groceries, eating out, subscriptions. You got none of that? Well, yes, we have that. I haven't figured that up exactly. I'm getting around $4,000 a month. Okay. Maybe five. So to run your house, five grand a month, 60 grand take home pay would cover you every year.

“Yes, I would think so. Okay. Who else has involved in this picture?”

Just my wife. Okay. And is she working or is she retired? No, she just stay at home mom. Okay. How old are the kids? They're growing on. Oh. So she no longer, she's just stay at home wife now. That's correct. Okay. Okay. Cool. I was like, "Well, man, there's no kids here. This is a sweet gig." All right. So you both want to retire. Are you both good with this goal or is there sort of an encore career on the horizon for you

that you want to pursue? Well, I do some pressure watching on the side now that I would probably continue to pursue. And I guess the only reason why I'm calling this is to kind of help clarify it for her and me, where she's not nervous. And I'm not nervous about doing it. Have you guys ever worked with a financial advisor? We do. Yes, sir. Okay. Have you run these numbers by them to see the projections and all of the wood if scenarios? I have a team's meeting with

with my financial advisor Monday. Okay. I want to get your opinion as well. I appreciate that. You're the more opinions I get. Yeah. I think you're in a great spot. If you're completely

dead free at 50 with $2.2 million and you have 60 grand and expenses every year,

“that tells me you're in good shape to do this. That's why I was asking about those caveats.”

Are there any upcoming expenses or the kids need to save for college? You've got to pay it for house, all of that. Where is this 2.2 million sitting? Yeah. Is it Rothers at traditional funds? Most of it's been at 401k, but about seven years ago, they opened up a portion in our 401k to put it in Roth. And then I have some, I also have a Roth for me and from my wife, outside of my 401k plan with my financial advisor. How much do you guys have in Canada?

2.2 million. Um, readily available cash probably off 50. Okay. Have you your financial advisor talked about having some cash reserves or bonds or a bond tens? Something like that to help preserve your nest egg? No thought to add it. Okay. That would be something I would ask about. Those are the kinds of things where I want to know every scenario. Let's say the market was down for three years. How would you guys make it without depleting the nest egg at the worst time?

Those kinds of scenarios. And if you can, you know, dot the eye across the T, seven different ways that I'm going, all right, green lights go for it. Okay. And you can also try it for a year. And if you're like, hey, the portfolio can sustain this. We've enjoyed this. Then you kind of know.

And if not, if you're only 51 by then, and you're a smart guy, you can always go back to work and

make some money, right? Well, yeah. Well, where I'm at is a rather large steel mill. And it's I could probably end up getting a job back there eventually, but it's it's very hard on the body in the feet south in a steel mill in the summertime. So I don't know that I'd be wanting to go back there. And I get what you're going to say, Max, you're going to say, you don't have to go back to a steel mill. You could find other things to do. And I understand that. But I'm just trying to

talking about to take out enough money. Now you're going to pay taxes if it's on the traditional

“side. So the other pieces of homework I would talk to the your advisor about is Roth conversions.”

And then also the other pile of money outside of your retirement, which is locked up. And again, you mentioned that there's 72 T, which can be a tool to access that retirement fund early. But I would try to let that money grow and keep compounding before you access it. So if you have other money, you could use. And that might mean you work for a little bit longer stack up some cash. Maybe get a year of expenses under your belt and let that money grow for another year.

But I think sitting with that financial advisor and going, hey, I need a final gut check. Show me every projection possible to make me feel really good about this. But you're talking about, you know, maybe a three, three and a half percent withdrawal rate, which if you look at any

every financial planner would say, you're good. You're never going to run out of money if you do it that way.

Okay. But the question is long-term care, the crazy health stuff that could come up. Big expenses that come up. That's the kind of stuff I want you to be ready for in case you go. Man, I loved to buy a car, but it feels like I shouldn't. I don't want you to have a sort of a limited retirement because you're scared to spend money, because you're not sure if you're

“going to run out. And that's why I would have a lot of confidence going in.”

Okay. But you've done really well, man. As long as your, you know, lifestyle doesn't inflate like crazy. Yeah. You've got a green light for me. Let us know how it goes. I wouldn't want to be in that steel mill for a single day, Jay. I don't think I'd make it. No. No. I wouldn't make it through the audition. They'd pick up that peat. No. He's just looking at a photo of me and go, she's not. Mm. She can't do it. Well, you know, especially in the trades, it is when a job is

hard on your body. You want to be like you're in the NFL. You can't do this for 30 years. And so I totally understand, I also just go, I've seen a lot of people follow the fire movement, which is financial independence retire early. And this is not a similar situation, but they stack up a lot of money aggressively over a shorter period of time. And they basically burn themselves out to a point of

exhaustion panic attacks in order to retire early to do what? To do what? And so I always tell them,

what are you retiring to? Yeah. Instead of from. I think it's, David, I had this conversation the other day on the air. I think the word retire when you're that young. I think what you really want is work optional. Much better for it. Do you know what I mean? And that way it's like, I may not want to go to my nine to five job Monday through Friday, but if it's the right type of work and it's the right hours and it's on my terms. Yeah, I'd be willing to do the thing I love and still make money from it.

And I think that's probably what most people are after. I don't think most people just want to sit and do nothing. Yeah, retire feels like prices right reruns and being able with the VFW office. Yes. And I think you just that will lead to an early death. That's all you do. And trust me, I love being going prices right more than anybody. Options are what people want. They want the

“office to say not today. Freedom, that's what you're after. You spend hours researching before”

making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car home or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com/insurance. Welcome back to the Ramsey Show. Before the break, we were talking

a Doug and he was asking can I retire early at 50 years old. They got 2.2 million in retirement accounts.

I got 50 K in cash. And he said he was going to use the 72 T rule to do it. So we just want to take a moment to help our listening audience understand what that is because I probably go on. Is this a life hack? Is this a loophole? What's going on? They're trying to bridge time because they've got time before they reach 59 and a half or maybe some people are trying to bridge time before they receive social security all of that. And so it's how can I get at this money without being

penalized for not being retire-made? Because the IRS normally will charge you a 10% penalty if you pull money from that 401k or IRA before age 59 and a half. So section 70 do T of the tax code is the exception and let's you avoid that penalty. But there's some kind of fine print red tape and

only do this if you agree to take what is called substantially equal periodic payments SEPP from the

account. So think of it like you're making a deal with the IRS. They're saying hey you can have

“your money early, but you have to take a fixed amount on our schedule not yours. And you're locked”

in for five years to that schedule. Yeah. It's five years or order 59 and a half whichever's longer. So in Doug's case, you're talking nine and a half years of making sure that you can live off of this exact payment. Yeah. And so that would that's part of the risk I was talking about where you got to make sure your eyes are dotted T's are crossed before you just go, oh cool, there's a loophole. I can do it. Well, where people get hung up, sometimes as they know, okay, I won't be charged the

10% early withdrawal, but they forget that they're still going to have to pay income taxes on the tradition. Yeah, because it's traditional. And here's the crazy part. If you miss a payment take extra chain team out, modify the plan before the lock in period ends, the 10% penalty applies retro actively. Yeah, to every single payment you've already taken, plus interest on all of it, the IRS does not forgive honest mistakes here. It's not, yeah, there's no, oh my bad. Yeah. And so that's why I'm

not a fan of this kind of a last resort option. I would say. Yeah. And this is, so if you're wondering, okay, we'll Georgia, how can I access money earlier? How do I retire before 59 and a half, if I so choose? And the much better way is to create what's called a bridge account. Yes. So this is where you just open a non-retirement brokerage account. You can still invest in index funds and mutual funds within that. And there's no penalties. That's right. You'll pay taxes on the gains of that,

either long-term or short-term, hopefully long-term, because that'll be a whole lot cheaper. And that way you can access that money until you can access the retirement account. So think about

if he had a million in a bridge account on top of his two million, well now he's not even

touching that time. He's completely in control. It is just growing for 10 more years and he has this million dollar bridge account to live off of in the meantime. And he'll pay some capital gains on that, but there's a there's some really cool tax plan that you can do to basically pay no taxes. Yeah. If you're married filing jointly, get the standard deduction, you can basically take out 130 grand tax free. I love that. So a lot of cool things there again. This is why you want to have a

“good financial advisor in your corner. And if you want to get connected to one, jump on to ramsysolutions.com,”

click on smart vests or pro. And they will nerd out 10x. What I could do on this show. That was a good time. I hope you enjoyed that. If you didn't fall asleep at the wheel by now, hopefully. All right, Jade asked grams. He's our free AI tool that was built and trained on proven Ramsy principles. And we're going to break down some of the most asked questions of the week. We had a lot of questions. Look at this around saving for retirement, paying off credit card

debt, but the most asked question was around zero based budgeting. My favorite, the main question. How do I create my very first zero based budget, George? How do I do it? This is great. So the core idea with the zero based budget is that every dollar gets a job before the month begins. So if you brought in $5,000, we need to allocate every dollar of that $5,000. So even if you have $3,000 in bills, well, if you don't make a plan for that other $2,000, it will disappear into

door dash and entertainment and whatever else is going on in your life. So you start by writing down your monthly take-home pay. You can enter this into every dollar in income section, each paycheck, and start with what hits your bank account after taxes. Yeah. And we like to say after that once you start, go through and start your expenses, let the first line item of the budget be giving. It just puts your heart in the right place, set aside 10% for church, charity, general giving, whatever it is,

that's the first thing on your budget. And then from there, go on to the most important four walls

is what we call them. Your food, your utilities, your shelter, your transportation. And I'd say in a close fourth and fifth, it's probably insurance and daycare. Yes. And then, of course, debt. If you've got some consumer debt, we're going to list that as the minimum payments. And it will actually break out the debt snowball for you inside of every dollar. It will break it out by smallest balance to largest balance. And then you're going to subtract until you hit zero. So if there's money left over,

let's throw it at the debt. If you got debt, if you're trying to save up the emergency fund, any leftover money goes to the emergency fund. Love that. And, you know, some people might go, "Jade, I'm in the red." That's okay. My expenses are 3500, but I'm only taking in three grand. Yeah, that's a learning experience there. And that's when it's time to start cutting back.

“You should say, "Glad, I did a budget figure this out," that I'm 500 bucks in the whole every month.”

Yeah, and you can look for areas to cut back for most of us. It's areas of subscriptions, going out to eat self-care those types of areas or the areas that we can cut back. And if you look and you go, there's no place for me to cut back. I am, then now we know we need to add a side hustle to the mix, which you can do, but just know it takes about three months to really get in the flow of budgeting and just really create a budget that's going to work for you and your family. That's right.

So, check out AskRamsi. You can get started based on your specific income and expenses. It'll walk you through it just like we would on the show. Go to RamseySolutions.com or click

Did I get that right? Yes, Christ is averted. How can I help today? Thanks for the call. Thanks,

Francine. So my boyfriend and I are trying to figure out a plan for finances so we both can be on the same page in the future. What can we do right now to set up for success and what would the alternative be to building up credit? Great questions. How old are you two? I'm 18. He's 19. I'm almost 19. How long have you guys been together? Um, officially six months. That was no each other for a while. Okay. And what have the money conversations been like thus far? Sounds like you guys have talked

about this a little bit. Yeah, we're both a little overplayers. So we're just thinking and talking and trying to figure out just like how we would do things if we're going to be using credit cards or not because I was raised without like no credit cards or bad things. My parents are both debt free except for the house. I still remember when they caught up the credit card. I love that. So is there some tension because he's like what? That's crazy. Like you got to

have a credit card. Actually there's no tension which is great. So he's good. He's like,

“cool. Yeah, I think credit cards are not a healthy tool either. Yeah, he's not. He thinks as”

I could possibly be used smart, but but we both don't have enough information to figure it out together. Well, I think there's two, I think there's two paths that we need to cover on this. And one is, do you even need credit? Like is credit necessary to your life? And then the other side of this is, and I'll probably start here and work backwards with George witches. Okay. Please, please, please, at no point. If you guys even if you decide we don't care,

we don't agree with what Ramsey says about not needing credit, please never co-sign together.

You're you're dating who knows if you'll get married one day, but if he's thinking debt could be used in a good way sometimes like maybe getting a card note. I cannot tell you how many times people call in here and they've co-signed alone with somebody that they were once dating because they wanted to help them because they wanted to build credit. They wanted to start their life together and then it goes south and he's looking for her to pay her into this

car that they've co-signed on, right? So the first part of the conversation is whatever you do, please don't co-sign. If there's a co-signer needed, it's because that person would not be approved for debt on their own because they're clearly broke and you co-sign with somebody. You know this, I'm saying it for those listening, because somebody, it goes the opposite way, you're on the hook

for the entire balance and then never do it. The other piece of this you're talking about how do we

“build credit without a credit card? Well then I go, what are you trying to build credit for?”

For a car loan? Well I thought we agreed. We're not going to debt for a car. We're going to save up a cash. So all the things that you think I need credit for that, I would question it and go, do you though? And I walk you through this in my book break and free from broke. So I'm going to send this to you as a gift because if you guys read this together, you're going to be reading off the same sheet of music. You'll be totally aligned. You know how to communicate about it,

how to navigate life without a credit card without credit. And I walk you through every piece of it in the book and the credit score chapter. So hang on the line. We're going to send you breaking free from broke. If you want the audio book, just let our phone screen or no, they'll get you that as well. I wish you guys the best. Green flag. So yeah, you guys are right, Jack. Hey, George Campbell here. We often talk about how being normal sucks when it comes to your

money. But guess what? Normal isn't so great when it comes to your job either. Normal is staying

“in a job you hate, dreading Mondays and working for people you don't even like. Sound familiar?”

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But you also have to protect it as you build it. That's defense side and that's where insurance comes in. The right insurance acts as a shield around your loved ones and your wealth if disaster strikes.

by giving a personalized action plan with clear next steps. So you can take it at RamseySolutions.com/checkup for free.

“Get that covered checkup, find out if you've got the protection you need. Mary is in Cincinnati”

up next. Mary, welcome to the show. Hey, Georgian Jade. I'm so excited to talk to you guys. We're excited to talk to you. What's going on? So my question is, might not someone I would like some advice to what do you in our situation specifically about paying off our mortgage? So we're in the process of adopting a baby and we would love to be completely debt free before the baby comes. We have no debt except $16,000 that's left

on our mortgage. And we're wondering if when we have sort of we've been working so hard and listening to your show and just so inspired by all the callers is it's really motivated us to get to this place and we're excited where we're at. But we're wondering if when we get down to the last $8,000 on the mortgage, if we can just use part of our emergency fund to pay it off because

“we're just itching. Would it be taking it for six months to three months?”

It would. So we have $18,000 in an emergency fund currently. We have $36,000 in an adoption fund which we think would cover the adoption plus time of maybe an off work but we're thinking that they're on a little bit extra towards that. We make about 75,000 a year combined and our house is worth $275. Wow. What's the mortgage payment? The principal and interest part. So we owe about $1,000 to $16,000 to $16,000 a month and we're down to bust and I think it's like $39

dollars an interest. Wow. $300 worth the escrow and then the rest is on the mortgage. So you would free up just about 1,100 bucks a month. It would which is why we're so ready. Yeah, I feel done and yeah, I would I would look at what we're saving too short. Yeah, what will your budget look like without a mortgage payment? I would calculate that out for a month

“and then go minimum three months and knowing you're going to stack it right back up.”

So that free up mortgage payment is just going to move to the emergency fund until you're back to six months, which is probably the better move as you adopt this this sweet child. Yes. Okay. How sure are you at the 36 grand will cover everything? That's my only

question mark because I know these can always feel be more expensive than you intended them to be

and kind of drag out longer. Yes. We were already paid some towards the fund or towards the adoption. So it would just be if it would be extra with me cutting into like my time off of work would be cut maybe a little bit shorter, but we are pretty confident that we have maybe like 10 to 12 still for me to have time off. Okay. So that that's covering the gap and income without dipping into the emergency fund is what you're saying. Correct. Oh, I love this. You guys are

such planners way to go. Oh, great. My husband is. Oh, we lost you. She was about to say my I'm guessing she was going to say my husband's so excited. Yeah. They've done such a good job. I know I didn't hang up on you Mary. That was on your own volition. On $75,000 a year to save $36,000 for an adoption 18,000 for an emergency fund. Knock them or get knocked the mortgage down. Rockstar. That is impressive. Don't tell me you can't do it. It's Mary just proved you wrong. Yeah. I'm inspired. She's making

a saw look bad out here. And what a noble you know what it is. They have a big why. Yeah. They do. They want to adopt that baby and that will if you can put the blinders on and focus. You know, like I don't need all these other expenses and subscriptions and the vacations. I just want to bring that baby home and man if we can bring this baby into the into the world debt free. He's been

bad. Great why. But yeah, for the teaching on that, we always say you want three to six months

in the emergency fund and people go well. Can I scale down the emergency fund? Yeah, temporarily. So my gut is always if you can at least keep three months in there. Knowing you got a new budget, you don't have a mortgage payment. So that also changes the numbers. Right. How much you need in that emergency fund. Then I go, all right. Go for it. Just know you got to you want to make sure that you don't have an emergency as soon as that house is paid off. Right. And on the bigger scheme of things

when people are deciding whether I should have three months or six months is there a wrong or a right. You do want to look at certain factors that can help you determine that. Are there two incomes coming in or are there one? If you're a one income family and my pot in my opinion, you got to have six months. Like there's just a little bit more risk there. Therefore, you want a little bit more of a cushion there. What's the health situation of everybody? Are you guys healthy or are

they're ongoing health concerns? That's another one. If everybody's healthy and there's two

the jobs in income. If you're a teacher and a UPS employee, well, that's pretty stable. If you're in commission sales and you're not sure what the income is going to be, I would lean towards six months.

I got to tell you ever since COVID-19, I almost am always on board with six months. No matter what,

I just just makes me feel good to tell other people, hey, if you can get six months, just do it.

“Yeah. And here's the thing, usually one spouse wants it to be more than the other. And I'm not”

going to stereotype, but generally the women have this security gland flare and I'm going, hey, we need a little more security. And the guys are like, no, we're fine. We get 10 bucks and you can't let it ride. I can make that happen. I can make that work for another week. And so I always lean on the spouse that wants the bigger one. Go with that answer. You're never going to regret having six months. No, I don't set a three. Having more peace, more security. And the honest truth is that baby

step three is one of the hardest baby steps. It's, it is a sleeper. People sleep on how difficult,

because you've come out of baby step two and you think that you're about to have like this major

relief of life is going to get easy. And then you're like, oh, holy crap. It's, this is, this has got a level of challenge to it as well. You don't get the excitement of knocking out a debt, freeing up a payment. That's what it is. The gazell intensity, like you still need the gazell intensity without all of the fanfare. Well, it's what you described earlier, which is the why kind of gets hit. And when you're paying off the debt, the why is right in front of your face. You're

like, I see you, Sally May, and I hate your face. And so you're ready to like make the debt payment. When you're saving money, you feel good about the fact that you're paying yourself, but it just doesn't have the same, you got, you got to manufacture the tenacity. Well, it's like paying

into an insurance plan. You're like, great. I'm glad this is helping to cover me in case of

something happens, but this is not exciting to pay for. I don't love this. Nobody stoked to pay for their auto insurance for the year, but you're real happy you have it. Right. And once you do see that six months sitting in the account, you're like, this is, you become, what's the guy smiggle from Lord of the Rings? Oh, yeah. Oh, yeah. Oh, got them. Got, isn't it like with the S, smiggle? What's that? Got one smiggle. Okay. Nobody, my precious is what I'm getting at. Yeah,

if it comes your press. Once you build it, you're like, you guys know what it is in the audience.

“I think it's like, it's like pre-imposed, smiggle versus golem. Okay. We got there.”

It's the same person. Well, let's, let's forget this conversation ever happened that I referenced Lord of the Rings this out because the nerves are going to come after you in the comments and flame you as the kids say. You're going to get roasted. But it is true. Once you build the emergency fund, it's like you built that sand castle and it took you forever and you're like, nobody touched this thing. Yeah. Oh. Nobody touched it. And even a real emergency,

you're like, no, it's not an emergency and you'll do everything you can to keep it funny. Once you build it, you stop having the same level of emergencies. I agree with that. They don't feel like emergencies. The flat tires now just in inconvenience instead of, ah, yeah, because at that point, I also think your money management skills have reached an all-time high and so you're just you become such a better planner. You can look at life and go, I see this coming and I'm going

“to plan for it. I know it, right? And I think that all of that just comes with time and financial”

literacy and yeah. And you get better at maintaining the things you do have, which causes less emergencies. Yeah. So it's sort of a self-fulfilling prophecy and most people go, I could cash flow this from my budget this month. I don't need to tap into it. All right, George, inquiring minds want to know. Uh-oh. Do you, do you ever just have times where you're like, I just, I like, I feel good about keeping a little more than six months.

Oh, a hundred percent. Okay. My wife is that way. Me too. Like whatever my number is, she's like double it. Yeah. Yeah. Okay. Fine. And you know what? It's sort of like a life fund. Yes. What if we want to buy something a bigger purchase or an opportunity comes where we are a generosity opportunity. You have the money. We have the money. So it's like, you have an emergency fund for your emergency fund. I love the feeling of that. Can't beat it.

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of God? Or am I trying to please people? If I were still trying to please people, I would not be a servant of Christ. Amen to that. P.T. Barnum said money in summer specs is like fire. It is a very excellent servant, but a terrible master. Oh, it's good. Said the circus guy. A lot of fire. He knows a lot about that. Yeah. All right.

“Erica is up next in Dallas. What's going on, Erica?”

Hey guys, thank you so much for taking my call. Okay, so I'll get right into it. My husband and I were both 31 and we've been married for three years. We're currently in baby step two and we're about $10,000 away from

becoming that free. So I know we're not quite ready to purchase our first home.

We currently are living in my mother in law's house and we only pay like the household bills. And last month she told us that she will be selling her current house and moving back here and she wants us to stay and I know that over the years she has said that she wants to leave this house and my husband upon her plant passing. So I guess my question is, is it financially why to stay in the house, although it's legally not ours or would it be better for us to just

save up and buy our own home once we're ready? I totally, I understand the the allure of thinking, oh, we could just stay in this house. It's going to be his one day anyway, but the reality is you'd be living with the mother in law and I just think that something like that would drive a person crazy

after a while. And the truth is that was never your goal. You never sat down with your husband and

said, you know, it would be great. Let's live with your mother in law for, you know, maybe another 20 years until she passes and then we'll get the house. Like that wasn't the goal. The goal is let's

“save up and buy a house of our own. So I think that you should continue down the path of your original”

goal. And if circumstances change and she moves back in, that just means you've got to move out sooner and maybe you rent for a while someplace else. But don't let that affect what you initially set out to do. Okay. Yeah, we I'm currently in nursing school and I should be graduating next May and I already have a job lined up. So I know there will be able to start saving at least a year and a half after I graduate for us to buy our own house. So do you think while I'm filming

school, we should just go ahead and move out because she'll be moving in by like the end of the summer. I mean, go ahead George. I'm just curious. So she's moving back into her house that you guys are living in. Correct? Yes. Yes. Okay. What would rent cost you if you moved to a reasonable place nearby? Yeah. So we do have two dogs and they're coming with us. So with the yard, I'm looking at anywhere between 21 to 25. 25 hundred bucks. Really? Yeah. Okay. And what's the current household

income with you in nursing school? My husband, he works two jobs and he brings in 65 a year and I only worked like the three days out of a month. I only bring in like a thousand. Okay. 65 years. So it's he taken home like four K a month or so. With overtime, he can bring in five. Okay. So definitely not

“renting a $2,500 house. That's out of the picture. That's 50% of your take home pay. So the truth is,”

we might need to sacrifice for a little while longer and live with mother-in-law. And let's there's some real issues here. Are there things where like I cannot do this? We need to figure something

else out? No, she's, um, she's like a second mom to me. I love her to dad's and her being here

doesn't bother me at all. It's just, um, my husband, he doesn't want us to stay for a house. Like he likes the idea of being able to live here and this home becoming his one day. So I guess that's like really where we're not seeing eye to eye. Whereas I don't mind living here for the next five years. Is that if we need to save up or whatever. But if you want to stay there because you love it, that's one thing. But if you're staying there with the promise of one day, this will be mine.

I don't love that because there's so much life that can happen in between and we've heard all those stories. Mom takes out a reverse mortgage because she ends up broke and retirement has a health crisis. And now this house is not what you thought. Now there's a giant loan attached to it. You know, and so that's where I go. I wouldn't count my, my, my chickens before the, what is it? Don't count the eggs before the chicken hatches. I don't count your chickens before their hatch.

There we go. I, I don't like this idea either. Um, and I'll, I'll say this and I'll, I'll let it ride.

family generational living is more, um, more than norm. And I understand that. However, just from

a marriage point of view, I, I tend to believe that marriages need their space to grow and become what they're going to be. And it's just very hard to do that in a contained environment with mom there, especially when it's long term. I just think you guys are so you're young, but you're old to be living with a parent, right? You're young and you're marriage, but you're also 31. It's not like you're 21. So there's part of me that's like, hey, be 31 and use your income and understand that. Hey,

if we want to be able to have this type of an apartment, we're going to have to improve our income

“in this way and allow yourself to stand on your own to feet. I think that would be my advice, uh,”

barring the cultural statement that I made earlier. If that's part of this and you're like, hey, this is just how we do it. And in, in, in my culture, then I, I'm not going to fight you on that. If you're going to stay, I would have an end goal in sight and make it stated among the group that we are gone by this time. And that helps add some clarity to the situation. John is in San Antonio up next. What's going on, John? Hey, hey, guys, thanks for taking my call. So I am finishing my internal

medicine residency here in a year. So I'm thinking about, you know, where to move for my first

real physician job. I have some family in the Bay Area and I'm thinking about going there and I was just, you know, wondering if that would be a bad move financially because it's pretty much the most expensive part of that country to go to. Well, do you want to go there? All things, if you took the money off the table of taxes and all that, are you like, man, I would love to live in the Bay area or is it, well, I could make more in the Bay Area, but it's going to cost me more to live.

Yeah, I would say so that I do, you know, want to go there. Okay, because nothing is said in stone. You could go there, try it out for two years, decide it's not for you, and then piece out. Yeah, and so I like the idea. If this is really where you want to go and you're going, hey, I'm going to make, I don't know, with $300,000. Yeah, it's going to cost me a lot around. It's going to cost me a lot to live, but if anybody can make it work out there, it's a guy making $300,000.

Yeah, okay. So if you were like, hey, I'm going to make 40 grand. I want to go live in the Bay area. I'd go, hey, man, that's going to be a really tough life. Yeah. But with your income, do you know what it may be in the Bay Area? Yeah, um, the jobs to base rates pay like 320. Okay. So we'll just have that because Bay Area and now you're bringing home 160. And look at grand stuff. Yeah, groceries where you want to live, what that's really going to cost. And that'll give you some

“clarity versus just vibes. Yeah, you have to think about your values and what it is that you're”

trying to accomplish financially. Are you going to want to be a homeowner one day? Are you going to have want to have a wife one day that stays home? Like, what are the things that you believe that you want out of your life for the next 10 years? And would you be able to accomplish it, living at that cost of living? Or would you be able to accomplish a level of that? And would you be happy with the level of life that it gives you? And then you have your answer?

Right. Right. How old are you? Uh, I'm on the older than I'm 35, I'll be 36 when I. You're on the older end. What's the reason for me? What does life mean for me, John? I feel like I'm not done. Oh, uh, I guess compared to my college, you know, when I was seven years off. But I mean to become to become a doctor. It's like a 17 year journey. So you got to be in your 30s by the time you

“finish it. So you're doing great, man. I would if you want to pull the trigger on this,”

I would go for it after doing some homework. Yeah. I would obviously go visit the area. That's a good start. And you get a feel for like, all right. This is what my life would be like. Kind of pretend like you're living like a local. And this is where my apartment would be. Here's the lifestyle

and then you can go for it. Because at 35 as a single guy, you can always change your mind at 37

and nobody's mad at you. You're not uprooted too much. Best of luck. All right, that puts this hour of the Ramsey Show in the books. Remember there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace Christ Jesus.