Focus On What You Can Control And Start Crushing Debt

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

We're here to help you transform your life from the Ramsey Network in the FairWins Credit Union Studio. This is the Ramsey Show, the phone number is triple eight, two five, five, two, two, five. Alongside George Camel, I'm Ken Coleman excited to have you with us.

We get it started off right now with Mary and Dallas, Texas, Mary, how can we help? >> Hey, thank you for having me. So I've been stuck in kind of like a situation where I really, I'm newly married, and I don't believe in date.

And I really love what you guys create. I'm trying to give my husband on board. He has, when we go married, he has like over 35, 40K in date. And that's okay. So I was trying to encourage him to get out of date.

Use my salary to use my salary to pay his date. But he currently lost his job in last year.

“And he has no motivation in trying to find a new job.”

So I'm always trying to like, my money all I do is just pay bills,

mortgage, and by some damn paying, there is nothing left. So just feels like I'm never getting ahead. >> Wow. So sorry, Mary. I mean, I can think of one way to stay motivated,

maybe providing for your new wife. Is that not on his radar? >> Providing for his new wife. >> You? >> You said you just got married to this guy.

He doesn't have a job. You're struggling to pay bills, and you say he has no motivation to work. >> Yeah, he lost his job. So his excuse is like, oh, I can't do that. >> Did he get fired?

>> What happened? Is he in a depressive state because of this? >> Yeah, he got fired, and he's kind of like really confident. I'll get a new job, and you only apply like one job in a month. And it's been six months now, and really like, no motivation at all.

If he gets out of his 4-1K to pay some of the bills, like to pay some of his date. He took a withdraw from his 4-1K, to pay bills, and cover his death payments. >> Yeah, because my salary can't pay all his date. >> Oh, my goodness.

>> He can only cover my salary can only cover more gauge than the house bills, not his date. >> Well, the challenge is, there's really no answer. We can't give you a step one step, two step, three on this, or really can't. This has to be a very, very serious marriage conversation. Have you confronted him about this to say, "Hey, I don't think this is sustainable.

We can't keep doing this. My salary is not enough to take care of all of this. We're falling behind. I feel like you're not applying for enough jobs. What's his response?"

>> I haven't, he's from as encouraged him to, like, to even just take any stupid job, like, to just pay bills, but he's pride will not let him to take anything. He's just, like, until I get something that is comfortable for me. >> Yeah, but I mean, okay, I appreciate that. And you've identified that it is pride.

I assume that he's calling it pride as well.

>> No, he doesn't know where he's, he's two things, he's always, I don't know.

>> Have you shared how uncomfortable and how afraid you are? >> Yeah, and he sees me cry when it comes to bills, when it comes to-- >> What does he do? I'm sorry. What does he do when he sees you cry?

He just says, "I'm sorry." >> I'm sorry, and that's it. >> Well, you know, again, I, there's nothing that we can say here.

“I mean, this is a, you have to tell him that if you can't help us, then is there in us?”

You know, I mean, it's that serious. This guy is just kind of waving at every day, kind of going, "Well, I'll just do this." And hope it works out, and there's just no urgency in it. Put you in a very tough position, and I don't have some magical answer. George, I don't know what your thoughts are here.

This is very, very frustrating for you. >> Yeah, well, I do think you need to make it more clear how serious this is. And it sounds like he's disassociating, is what we call it. When he's just going, "Well, I'm just kind of sort of numb out because I don't have the will power to do anything about it."

Is that what's happening here? Because you got married to this guy because you want the companionship, because life is better doing it with someone else, right? >> Yeah, I see some jobs in 10, 10, then he's wearing, like everybody's trying to give him leads about jobs, but it's just the motivation for him.

>> What was he doing for work, and what was he making?

>> Engineer making one, 30, and he's been applying for engineering jobs, or he applied for one. >> He's applied for engineering jobs. >> And why did he get fired? >> They say he's right, and he's both.

>> He threatened his boss. >> Mm-hmm. >> Okay, so how long have you been married to this guy? >> Two years.

“>> Yeah, I mean, I think you have to get his attention and go, we got to talk about our marriage.”

I've already brought up all the money stuff to you, and you're not doing the about it, and you're not in a good place, you're in a bad place, you're in a bad place if you threaten your boss. Can we agree, you're in a bad place? >> Yeah, he doesn't believe, he doesn't agree that he thinks he was unfair that he was

let go. >> Well, there's a lack of ownership all over the place with this guy. Is that the case throughout your marriage? >> Yeah.

>> It has never his fault.

It's always someone else's fault. >> You got to take care of you. Right now, I think this is a legit conversation about separation to get his attention, but at this point, if he's willing to go to marriage counseling, you're going to have to figure out how to afford that, because you guys are broke, but I would give it, I would give that

a try and get a therapist in the room with you too. You got to try that, but I wouldn't keep letting this guy just put all the pressure on you and show no desire at all to help out. So, you know, at this point, how can you make more money, and you be in control of the finances? So, this guy can't wreck you anymore.

>> Yeah, I wouldn't be concerned about his debt. Right now, it's about covering the four walls and protecting yourself. So, the first thing you cover is going to be your mortgage. You guys own a home, or are you rent? >> Yeah.

We own a home. >> Okay, so we're going to cover the mortgage, we're going to put food on the table, we're going to keep the utilities on, cover all of those bills, and cover your transportation needs. Outside of that, if you can't pay for it, you can't pay for it.

If you can't make the minimum debt payment, so be it. I'd rather have the credit card companies mad than your house being taken away from you. >> Okay. >> So, you come first, don't cover his bills, we're not covering anything for his lifestyle. >> Yeah.

>> In fact, you may want, if this isn't going well, and counseling is not an option for him, you may want to create your own separate accounts so that he doesn't start to drain it. >> That's right. >> It is the press of state.

>> We've never joined a account.

>> Okay, so it's separate, your money goes to your account, and you're paying all the bills from that one account. >> Yeah. >> Do you have a full picture of his finances? Do you actually know how much debt he has?

>> It's around 45K. >> And what kind of debt is that? >> In our gauge. It's cool lawns, and he has a personal lawn and his car. >> And none of that is in your name.

>> None of it is in my name. >> Right. Well, there's the good news. So, that's the best news of this entire call is that he can't drag you down. You can take care of the mortgage.

“I think you need to be thinking about how do I make more income.”

How do I create an emergency fund? How do I create more margin so that his destructive behavior? And what he's doing, by the way, is destructive. He's not doing much, but it's destructive. And so you got to take care of yourself right now.

And we're hoping we can get you guys in some therapy and that you guys figure this thing out. But you got to protect yourself right now, unfortunately. We're so very sorry to hear that you're going through this. [MUSIC] >> Dave, we got a lot of calls on this show where life happens.

One day someone's healthy, they're working, providing for their family, and then a curve ball hits. >> You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

>> Yeah, and that's why you've always said that having term life insurance from

Zander is essential because it protects your family if the worst happens. >> Yeah, that's right. You need 10 to 12 times your income, in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook and that's long term disability insurance.

“>> Yeah, it's important to understand the difference between them.”

Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income, so the bills still get paid while you get back on your feet. >> Now if your employer gives you free disability insurance, great.

Take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan.

If you're going to be out of work for a while, then you need to make sure the money

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Go to zander.com or call 800-356-4282. >> Protect yourself, protect your income, protect your family. [ Music ] >> All right, let's go to Kayla in Miami, Florida. Kayla, how can we help?

>> Hi, how are you? So right now I'm at a cross point. My father just told us that he doesn't have enough money for retirement. He's been retired for several years. He's been retired for about eight years.

And basically he's been living off like an annuity that she thought would have covered his mortgage.

He still has a mortgage about $300,000 left on it. And right now my family and I are deciding how we're going to approach this.

“Do you bail him out, essentially pay off his mortgage?”

Or do we have himself or house move to a cheaper area cost of living area? So keep in mind that $300,000 is what my family and I would use for our retirement. Want to wear it at that age show? >> Why? >> Kind of.

What do you mean? >> The $300,000 is what you would use for retirement? >> No, like investing that for our future retirement. >> Like as an inheritance? >> No, no, no.

So my father owed $300,000 on his mortgage. >> Yeah. >> That's a debt.

>> We can essentially like exactly help out debt and basically give him like 20 grand every year to pay off his mortgage.

Because I don't have $300,000 laying around. And so that was our thought, but at the same time, that's money that we otherwise would be using to investing. >> Yeah, you guys are going to be the same spot. Your kids are going to be funding your mortgage. It'll be a wonderful generational gift.

>> Yeah. >> So this is definitely a bad plan to bail that out after he did some real poor planning. Now, I'm not saying we need to be cruel. We don't want him on the street. But I also don't want you artificially propping up his life for the next 20 years.

>> How old is he? >> He is 71 and on top of that, he is mother. My grandfather was with him and she had no retirement and it all. And doesn't qualify for anything because she immigrated to the country like a couple years ago. So, it's kind of like a series of bad decisions.

I'm fortunate. My husband and I do extremely well. And it wouldn't be my children burden. That will be for sure. Because they're pretty much already taking care of for their life.

So there's many events in their lives. But I just find like I'm having a more dilemma with, you know, that's money I otherwise would have lost my children. So I don't know what to do. I'm selling a house.

What's it worth? >> The house is worth like 700. So that was my thought to sell the house. But then he kind of says, well, then I'm going to go move somewhere really far away. And then I kind of struggle with like, well, then you're leaving your grandkids, you know.

>> Why does he have to move super far away? >> I feel like so forward is pretty expensive. Because even if you go like downsize until like a condo or a townhouse,

“you just still pretty high, then you have to move like a lot further.”

>> Okay, so we're going to rental costs that's reasonable. That's somewhat in the vicinity. >> Probably like 2,000 to like a one bedroom like no frills. >> Okay. >> So that's 24 grand a year.

>> Mm-hmm. >> And if he has 400 grand an equity, and he invests that money, it could spit off 20, 30, 40, 50 grand a year. So that would essentially cover his rent. >> Okay.

>> I'm trying to figure out a way for him to be independent and not relying on you guys forever. Because how old is your grandma? >> She's 93. It seems that we're very long enough. >> The genetics are good.

The financial decisions remind me, how old is your dad? >> My dad is 71. >> Yeah. >> George has given you a great advice on the money stuff, and he could weigh in further. I'm just listening to this, and I'm listening to a very good daughter.

who's worked up in her mind, this burden that you have to carry.

And once we saw the one burden, then you immediately gave us another burden. So we said, "Well, then sell the house." That was one of your options. It's great. It's seen in better shape, and he can go somewhere else, pay cash,

and bring me everything as well. He's going to have to move too far away. And that's too far away from my kids. And I feel like we're creating problems that aren't really problems. Feels like you've got too much of this kind of stuck, because it's not a moral.

You kept mentioning the moral. There's nothing immoral about the situation at all. So I'm just trying to maybe, I'm trying to free you by giving you some feedback here. I'm for you. You're a great, great lady, great daughter.

Phonomenal. Your heart's in the right place. I think your head's in the wrong place. Yeah, exactly. I'm going to feel bad about, you know, to my own family, my own husband.

You work very hard. I work very hard, you know. Well, that's where your head should be.

Yeah, your responsibility is to your own immediate family first.

Yeah, that's your household. That's your household. I agree with you on that.

“You should be making good decisions for you and your kids.”

Dad's not your responsibility. Yeah, and I, and he's not putting it on me. They're the same time. I feel like he sacrificed so much to put us through college, to then get this to the point, like, where we're making so well, money would be only because of him now.

It happens. And just like serving in my relationship. I mean, so like, I think that's where that dilemma comes in like. Yeah, this is all skill. You can honor him without bankrolling him.

Mm-hmm. Give him some good advice. He, he could downsize and buy something for 400 grand in cash further out. True. It's not going to be as nice.

Not going to be as fancy, which, which would solve the problem you're trying to help solve. Correct? Yes, yes. And what is his foreseeable income for the next 20 years? How much is this annuity spitting off and for how long?

We're the annuity ends in like a year. So he was supposed to use that annuity to pay off the mortgage.

He never did, instead, he, like, just enjoyed.

“I think he was just like a lifestyle creep.”

Like he was just enjoying his retirement. And not in like an extravagant way. So that's not how he is. But like. But he was irresponsible once again with this annuity.

And then what's going to happen? If you guys are now funding his lifestyle and he gets comfortable. No social security coming in. He does. So that's what he would rely on.

And that's like going to be like, that's about like 3700 a month. Okay. So that's our number. How do we live off of 3700 a month? And if you've got no house payment, he can do that.

And by the way, what do I remind you what you just told us when this guilt starts to creep in? Oh, my dad sacrificed for us. Yeah, he did. Not taking any of that away from him. But he also did not use that annuity.

How he's supposed to. You just set it. So you got to have. You can't have both of those thoughts in your head at the same time. So you got to choose the one that is the most accurate.

And the most accurate is he squandered his money. Putting himself in this situation. Not. My dad sacrificed so much for us. And we aren't taking care of him.

That's a that's a false narrative. And that shouldn't be in your head anymore.

“When it pops up, you need to immediately replace it with.”

My dad is a grown man. And he was not responsible with his money. And gosh, I feel so sorry for him that he has to sell his house so that he can stabilize In his final season of life. But that's what he's got to do.

And that's what I'm going to recommend to dad. And then I'm going to wash my hands of it. That that may sound heartless. But it's not. That's what protects you from over thinking on all this stuff.

And emotionally getting sucked into something that you're not supposed to be involved in. Now, just like, if you have the money to pay it off, would you pay it off? And then look at it as like a way like whenever he passes, you'll sell the house And almost like it's an alternative investment. I would not try to justify this as anything other than I am.

I'm gifting my dad something that he simply cannot pay because I love him. And it's a small part of our financial world. And it's not going to set us back. And it sounds like you're not at that point right now. Oh, I'm sorry.

At what point? You don't have $300,000 sitting around, right? That's what you said earlier? Not like a hundred. I mean, they're an asset.

Not a lot. Yeah, we're not going to sell off our retirement to cover dad's mortgage. So if I'm in your shoes, what I'm going to do is love him in the way of saying, hey, dad, you're going to need to downsize. We can't afford this.

You can't afford this. We're going to help you create a budget for this. You're going to need to make sure that it covers all of your bills and you can enjoy some life. But it's going to look different.

This is your boundaries versus hey, dad, he's 93.

I would not go down that path.

“There may come a day where he has to move in with you and you take care of him.”

Just like he's doing with your grandma. But I wouldn't make that day today. I love entrepreneurs. Don't forget, guys, I started my company on a card table myself. So I know what it's like to have people counting on you.

Your team, your family, not to mention your customers. And when you're the one signing the paycheck, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team just fixed it.

And they did. We got net sweet. That was years ago.

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That's net sweet.com/RAMZE. [MUSIC] All right, let's go to Manchester, New Hampshire, where Bonnie joins us. Bonnie, how can we help today? [MUSIC]

Hi, thank you for answering my call.

It's my birthday. So this is about to happen. Happy birthday, Bonnie. How old are you today? Thank you.

Thank you. I'm 30. 30. Oh, that's a big one. Do you feel like an adult now?

Yes. I especially feel old. No, no, no. Not old. My gosh, careful.

Careful. You're going to spend people that are season like I am. But congratulations. Oh, okay. You are in a decade where at some point you will just wake up one morning,

feeling like you had a great night sleep. And as you begin to move, you feel as though someone was punching you the entire night. And I can't explain that, but that's the only sign it's can. I already, I totally understand that already. All right.

Well, we're there for you. Okay, how could we help you today? All right. So I am an occupational therapist and my husband is an engineer. And right now we're in about $113,000 debt.

And 96,000 of that is student loans. And I have about 13,000 in personal loans. And that comes from a truck that we had paid off and sold. And then we re-did our basement because our house flooded a lot.

“So, but my question today is how do I pay off my top student loan when the interest is compounding almost every week?”

I log into my account. And my loan has been about $79,000 for years now. And I'm at my width and just trying to pay that one off because it's the largest. And I do want you to know that I am doing the debt snowball with all of my other debt besides that 79,000. But I get so discouraged.

How do you do both at once? You're either attacking the smallest one or you're attacking the one with the most interest? So, I have them listed out in order from smallest to greatest. And I'm definitely throwing most of my extra money at the smallest one. But I am throwing more at the highest school loan as well.

So, my minimum payment was $314 just to cover the interest for the highest loan. And I decided to throw a couple hundred more dollars towards that one just so I could get ahead. And it's just still growing. So, I don't know. I just don't know how to go about the interest rate.

So, I know that sounds crazy, but the $79,000 is made up of about 19 small school loans. It's a federal loan. So, they're all between 46%. Okay. So, none of that is crushing.

I know it feels like a lot. And there's a big balance there.

Because that means you're going to see progress faster than if you were attacking this as one giant loan. So, what is the smallest balance? So, it's really confusing because- It's not just go down to the bottom of the list and tell me the smallest balance. So, when I pull up that on my computer, it doesn't have it listed smallest to greatest.

So, by all small lists. You should be using every dollar. I'll give you every dollar. It'll sort it for you.

“I think the spreadsheet is where this went out of whack.”

I actually have it. And I stick to it every month, but I'm just trying to organize it. Am I brain to make it sound less confusing? The human brain is the worst place to organize anything. It's a junk drawer up there.

All right. Could you two move forward, please? I'm trying to get to the bottom. What is the smallest balance? I speak philosophically at this point since we can't figure it out.

If a third grade I looked at your spreadsheet, they would find the smallest number to be one.

It's about 800. Boom. Oh, there we go. What do you guys bring it in per month? 9,500.

Great. Why is this loan not paid off yesterday? So, because that's only a snapshot of all of my debt. It's only a little portion. So, I'm just going to read off what my spreadsheet says here.

So, it'll be less confusing. So, my medical debt is 33, $190. My basement, I owe 5,000. My next school loan is 6,000. My husband's truck that we sold and we were negative underwater with that.

And we owe 7,000 on that. My next school loan is 11,000. And then the big one that I'm specifically talking about right now is 79,000. But that's 79,000 you said is split up. It is.

So, it's not really $79,000. It's $800. $2,000. $3,000. Someone is so forth.

Right. Right.

“So, that's how we're actually looking at this.”

Don't look at it as a $79,000 loan.

Split everything up. 19 of those in the spreadsheet. Looking at the smallest balance. That's where your focus goes. So, out of the 9,500, how much extra do you have each month?

Two throughout the smallest debt. If you stop this avalanche deal. Um, probably two grand. Boom. Do you see what just happened there?

You actually cleared a debt. So, I guess that's why I called in because I've been so confused. So, total I have like 25 loans. Yes. One, two, three, four, five, six.

Yes. 25 loans. We're just going to work our way down the list. That's it. Okay.

And if you guys, you're living off of 7,500. That includes your minimum payments, right? Minimum payments plus all of your expenses are 7,500. And you have 2,000 left to throw on top of that smallest debt. So, now the game is, how do we get more of that margin?

How can we make more? How do we spend less?

“Are you guys doing any investing whatsoever right now?”

No, we put that on pause. No match whatsoever. No. I'm trying to look for another job at night when my kids are asleep. That I could do from home, which was something else I was going to do.

Great. You know, that's awesome. I love that you have that level of intensity about this. Do you guys have anything in savings? You have a thousand dollars at least?

We do. Yep. Anything above that? Just a thousand. No.

Okay, great. So, you're so close to doing this plan full on. We just need to switch our brain around this debt avalanche thing. I think that's what's screwing you up. Okay.

It's causing you to stall out because you're trying to do three things at once. Because a lot of getting out of debt is a motion. It's behavior. It's the psychology of it. It's not the spreadsheet.

That's the enemy here. It's the person in the mirror.

And we can solve that with this amazing income.

They're bringing it in 10 grand a month. Yeah. I'm going. I think there's some expenses we can cut out of that same question. And that's your homework assignment, Bonnie.

Where else can we cut? Can we sell some stuff? You know, between cutting and selling. Can we make another $5,000 debt? It's good question.

Maybe you can't. Maybe it's only 2000. But that's the mindset where there's a will. There's a way that still works. Let's go to Gina and Salt Lake City.

Gina, how can we help? Hi. Hi, can't. Hi George. I can.

Hi, how are you? How can we help? Okay. I have a question that kind of centers around. How to prioritize.

My husband and I find it as we mirror retirement. Okay. Hit us with the question. So we are about six years out from retirement. And right now we're both doing 401k with our employer.

And I think that we have enough in our three to six months.

Okay. And I'm just wondering the excess that we have each month. We bring in roughly 6,000 take home. And our expenses are roughly 4,000. Great.

That's after investing. Oh, yes. Great. So you got 2k left over and you're wondering what to do with it? Yeah.

Okay. What's your mortgage left on the mortgage? What's the balance? What's left on the mortgage balance? It's 91,000.

Love it. Okay. Are you investing 15% of your household income? So I have a 401k that I'm putting 11% in and then my employer matches for. Okay.

“You should be investing 15% and then your employer matches on top of that.”

So the match is gravy on top and baby set for. So this is what I would do in your shoes. Make sure that you guys are dialed up to 15% of your gross household income. Going into these tax advantages retirement accounts. Anything on top of that, I would be throwing it that mortgage.

Let's get this thing knocked out before you enter retirement. Then we can really start maxing out things as we head to the finish line. I think you guys are going to be in great shape if you do it that way. Hey guys, George here. Listen, 99 times out of 100 when people say,

I don't know where my money goes. It's not a math problem. It's a behavior problem. They're not budgeting. Then they're shocked when their bank account hits triple zeroes.

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The Ramsey Show question of the day is sponsored by Y-Refy. If your private student loans are in default, it's a mess, but Y-Refy can help clean it up. Y-Refy helps borrowers. Refinance with low fixed rate payments and a clear pad.

Excuse me, clear plan forward so that you can clean things up and get back to making real progress. Go to y-Refy.com/RAMSI. That's the letter Y-R-E-F-Li.com/RAMSI. May not be available in all states. Today's question comes from Liam in Washington.

Says I'd appreciate your perspective on a recent news story. When actor James Vanderbick passed away, a go-fun me was created for his family. Reports indicate the goal has increased multiple times, and now exceeds $2 million,

despite him reportedly owning a multi-million-dollar home and significant property. Many people are pointing to this as evidence that medical expenses can financially devastate even high earners. If someone with that level of income and assets needed financial help,

what hope is there for the average American? What concrete steps should families take to ensure their loved ones are not left relying on public donations after a death? There's a lot in there, one can.

I did see this floating around the internet. I've not studied it, but I did see that there was this go-fun me.

It's always interesting to me when the number keeps increasing.

You know, I'm not trying to be skeptical, so you needed 20 grand, and now you go well, actually, 50 grand would be nice. Actually, 100 grand would be even better. So I don't know.

I'm not here to speculate. I've seen there was speculation. People are wondering what's going on here, and I don't know the state of James Vanderbick's estate when he passed. If he had a bunch of debt.

A lot of rich people out there who can pass away and have a bunch of debt to their name. That's not unheard of. Yeah, we simply don't know, and so instead of focusing on which report on social media is correct,

“as you that'll drive you nuts, I think that the final question in that email”

is the one we addressed, you know, and you're basically going,

And in this situation, George,

the question is, if the medical debt was in his name, and he dies, what happens to the medical debt? It's gone. They're not coming after your family for that. So that's the fundamental answer, right?

But that only feeds into the conspiracy theory even more, which we're not going to take on. Yeah. Now, in terms of why would even need it? Yeah, my guess is this is the best case scenario.

They didn't want to have to sell off any assets of the estate in order to cover any debts that were owed. And so they're probably raising these funds to try to cover those separately, so that the estate remained untouched.

Right. So that goes back to your answer, though. It doesn't just wipe away. If there's money in the estate to cover the medical debt, the traders can go after it.

Yeah. And so they're in lies the issue. So, you know, it's tough situation. There's really no clear-cutting answer as to what you do in that situation.

But I would not be freaked out if you're the average American. There's a lot of concrete steps.

“You should take to ensure your loved ones”

are not left for lying on public donations.

I pray that there's never a go-fun,

go-fun me after I pass can. Yeah. I'm hoping to do a good enough job. So what are you going to do? A quick number one, the thing you need today,

is term life insurance. If anybody relies on your income, 10 to 12 times your annual income, and a term level policy, 15 to 20 years makes sense for most people.

And here's the thing. If you follow the baby steps, you get a 15-year mortgage. Guess what? After a 15 or 20 years,

you've got a paid for house, and you've been investing 15% of your household income for decades. So there's a nest egg and a paid for house. So the goal here is, become debt free as soon as possible,

so that your family has no headaches. There's no debts to pay off. And so they can just grieve your loss, instead of also dealing with the stress of paying bills. And then the other thing you can do

is create in a state plan. For most people, will is the simplest route to go. And mama bear legal forms is our partner on this. They're fantastic.

You can knock it out online in minutes. And for some people, when they have this level of wealth, a trust makes sense. And I'm sure there was trust involved

with his estate. And that can help you sort of control the assets. And that reminds me our good friends at Zander Insurance. If you're somebody that does not have term life insurance in the advice that George gave,

you need to go talk to Zander. You won't believe how affordable. Truly inexpensive, good term life insurance is in our friends at Zander. It's been partnering with us for decades.

They'll help you out.

“And that's how you rest well at night to go.”

All right. If I rack up a bunch of expenses, and I've got the right term life plan, I'm going to be in pretty good shape not to leave anybody in the large.

Yeah, I think about that. You've got to will in place. Everybody knows what's going to happen. If and when it happens. Yeah.

And you've got term life in place. Should you pass away within that term policy?

There goes there's going to be a payout of a million

dollars to help cover your family's expenses for long term as you invest that. And then stay debt free. Have an emergency fund. Build a nest egg for the future.

Your airs will inherit the IRA or the 401k. Helping them cover any bills that need to be paid. But that's the goal is become debt free. That free state at free. It's one of the best reasons to follow the Ramsey plan.

Is it puts you and your family in a great position for legacy? Really good. Let's go to Dylan and Phoenix Arizona. Dylan, how can we help? It was going on guys.

How are you? Good. How are you today? I'm doing good. Such kind of question for you.

I'm 22 years old. I make 10 to 12,000 a month. My monthly bills are about $3,000. And I'm saving for a can and side by side. But they can be $20 to $25,000.

“So my question is, would you recommend paying cash for something like that?”

Or financing it if I can afford the payment? I only have like $5,000. Or they can't hand it. What are you going to use the side by side for? I go to the sand dunes a lot.

And all my buddies go do up row grinding. Like every weekend. So it'd be used a lot. Okay. Are you newer to the show?

Have you been listening for a little while? Yeah. I'm pretty new to the show here. Okay. So one of the values on this show is not only people anymore.

And even bigger value is not going into debt for depreciating asset. And so the goal here, and you can do this very easily at 22, making 10 to 12k a month. That is wild. I'm very happy for you. You're very successful for your age.

So here's the deal. If you can't stomach paying $20,000 out of pocket, it's probably not the right time to purchase this side by side. Because too many people can stomach a $400 payment. Because they don't want to part with their 20 grand or they don't have it.

Is most Americans. And so to feel the pain of purchase is actually the best thing in today's America.

Every dealership will make sure the payment is low enough for you to feel good about leaving. Paying them a ridiculous amount of money with interest. So can I tell you what's smarter?

“Why don't you find a five grand use side by side of Facebook marketplace?”

Yes. That's kind of what I do. I got my truck off there. So don't need debt. I have is my home.

I just purchased. Cool. The only reason I was thinking of financing the side by side would be. I could not have the $20,000 out of pocket and invest that. Make money while I'm paying off the debt.

Are you doing that right now? Is that 20 grand invested? Yeah. Yeah. Yeah.

That's in a high yield second count.

That's not a son invested. So it's making 3% and you're going to take on this side by side loan for a brand new side by side at 20 grand at what? 6% interest? Probably. Yeah.

This is a bad trade man. There's guaranteed return of you paying of you staying out of debt. There's a volatile return in the stock market. There's a volatile return. Even with these high yield savings accounts and your paying income tax on the income you make from the savings account.

How much cash do you have put away? So I have like 40,000 savings, but that's not for a tenant. That's just kind of for a rainy day or just a savings account. And then I only have 5,000 savings for the tenant so far. Well then here's the deal.

I'm online right now. And I'm seeing a 2021 Yamaha Wolverine X2 RS-850. I like to say in that. I don't even know what I just said. The more the less the more they can charge.

I'm no side by side guys. We'll come no surprise to anybody who knows me or knows what I look like. But that's 8,995 dollars. You only got another month of saving up for that and you pay cash for it. And you're going to beat the stock.

“You're going to beat the stock out of this thing anyway, right?”

Yeah. Yeah, I guarantee you every single side by side that is finance in America today is underwater. They owe more than the things worth. And then they call this show saying hey man, I did a dumb thing. And I was making 10 grand a month at the time.

And so I thought I could afford it, but I lost my job now. And this thing's going to get repowed. These are the calls we get dealing. And so let's some other dingues who pay the depreciation. By the way, all you get a deal.

And I'll bet you all your buddies to finance these things. And so you just think it's normal. And you want, by the way, I can hear the tone in his voice when I set a 20, 20 one. He was like, yeah, gross. This thing is going to be nasty and full of sand and all kinds of crap.

What are we doing here? Ah, Dylan, buy used. This is too much of your world. You're too young to be making a decision this stupid and you're too successful as well. [ Music ]

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Results may vary and no specific outcome is guaranteed. [Music] Welcome back to the Ramsy Show and the Fairwins Credit Union Studio. I'm Ken Coleman. George Kimmel is alongside.

We're excited that you're with us. Fabulous studio audience out in the lobby today, George. Yeah, look at them. They're all waving at us from our feet. Some people from Venezuela.

That's right. So this is a global show. I got to call my mom and tell her. You made it. I made it international.

I made it mom. I've done you proud. AAA-825-5225. We're having fun today. We're going to help you out.

We're having fun along the way. If that's okay with you. Christine is up. It's all like City, Christina. How can we help?

Hello. Thanks so much for taking my call. I appreciate it. Sure. What's going on?

Yes. We have four kids.

And my husband and I went on our first cruise.

Just a two of us. And so because I watched the kids really like that.

This would take the all of us together.

So I got two part of part-time jobs. So because on one single income of his, the cruising money is just not quite there.

“And we're just trying to figure out the best way to manage what I'm earning.”

And I make about between 10 to 12k a year. And how to go and accrues with that money. And the reason I'm asking, my husband wants to. He's like, what about 10% towards charity? What about 15% towards great retirement of that?

What about extra mortgage payment? So he could kind of a nickeling and dining me like, 10% that's 10% that. But I feel like with much lift for the cruising fund. So tell me if that's the right thing what he's telling me to do.

Or should I just take a hundred percent and Glarge of vacation for the family? That's my question. Well, based on the conversations you guys had, it sounds like he just doesn't want to go in this cruise.

He does, he does. But he wants, like, what about an extra mortgage payment?

Because he's 47 and we own 100.

He's a tight wallet like me. He's just like, ah, we should be doing other things with that money. Exactly. Okay. Got it.

I love it. I'll play husband and Ken will play the role of Christina. Oh, great. Perfect.

“But my question before we roll play is why is it, why aren't you guys doing this with his income?”

The charity giving and the other things that you rolled through. Why is it have to come out of the 10 to 12,000 that you're making? Exactly. Exactly. That's what I said.

But he's like, well, everything helps. Come on. We've got a hundred and eighty four thousand to go in the house. Like, even if you put, you know, like, that only work during the time it's paid off, the kids won't even want to go on a cruise with you.

That's the sad truth. Exactly. And all this is 15 going to 10th grade. Oh, this is your last shot. You'll be lucky if the 15 year old you're going to want to go.

So here's the deal. You guys are completely dead free outside of the mortgage. Correct. You have an emergency fund. You guys.

We're getting there. He was unemployed. Like, a month and a half. So we didn't realize we didn't have enough. But we're really close to be finishing with that.

Okay. What's the price of the cruise for six of you, including everything? Travel, cruise, any other expenses? So we're thinking between about 12 cramps. I mean, between airfare, the cruise fare hotels.

You know what I'm saying? Okay. Now, is this the Ramsey cruise you're talking about? No, just a real career. I was kidding.

I knew it wasn't. But I thought I'd get a little plug in there. You know, because, you know, the cruise you're going on isn't going to have George and I only have the cruise. No pickle ball with Ken.

No pickle ball. Yeah. So okay. But two grand a person that sounds reasonable. It does sound reasonable.

Here's what I would tell you.

The budget will dictate the type of cruise you guys can go on. Is that simple? So if you got 12k, we're going to make sure that all of our expenses are within that 12k budget. You got 13k? Well, that budget just got up to a little bit.

You got 10k? Well, now we're going to have to do some budget shopping. See if there's a different cruise that is still great. Correct. So the thing you don't want to do is go, well, we only have 10k saved.

But the cruise we really wanted is 15. We'll just put five on a credit card. That's what most people do. So don't be most people. You have the little bit, right?

Exactly. So your husband's point. As long as you guys are investing 15% of the household income, you're giving or not going to nickel and dime your side hustles here. If you are working solely to save up for the cruise,

let it be for the cruise. Perfect. See, he did not like it. And I'm like, my little contribution is just not going to make a difference. Well, you're working temporarily for a specific purpose. Correct.

This is not regular income for the household in perpetuity forever. You're only doing this to save up for the cruise, which I love that intensity. That tells me you really want this thing because you're not robbing Peter to pay Paul. You're going, I will create this cruise money out of thin air because I want this so bad. Yeah.

And the question is, can he also is a room in your income from his income to also help contribute to this cruise savings fund? I mean, not really being honest.

“That's why we haven't done that since the kids are a little bit just more camping and all that stuff.”

So what kind of tension is around this conversation? I detect a little bit of tension. Like, you're going to get off this call and be like, I called Ken and George. And they said it was okay. And I don't know if I liked that and am I right or am I wrong?

There's a little tension on this. It is. Wow. You guys can listen really well and can tell. He just happens with a paycheck.

He doesn't do any bills. I take care of that. So really, he just kind of like tell me when you have the money, then we can book. That's kind of how it is. And we're even looking either either in the summer right now,

which the price is a high or even talking to the travel agent. Or the next spring because this fall. We did find months or 6,400, but he's like, it's my hunting season.

It's what season? Hunting season.

You know, they want to do their hunting.

So. My goal. So the siblings will be upset if he misses one hunting trip. Apparently correct. I mean, a season is more than a week.

You're going on a cruise for a week, I imagine. Yes. Oh, let me tell you the story. Being the tenth crater and the seventh crater next year, do not want to miss school.

So it has to be that a full spring or the summer.

“I think we got to have a family meeting is what I think.”

I think this is what it is. I think so. We got to go on the big old giant calendar and go. All right, a spit shake. We're doing this week.

Everyone in agreement. Yeah, because I think we got levels of intensity is what I'm picking up on. I think you really want to go on the cruise with the family more than anybody else. I think husband is probably number two. But him saying, well, what if we do this?

I think George picked up on that. I don't think he's 100% bought in on this. And then I think the kids are kind of like, so let's have a family meeting and decide, you know, do we really want to do this?

And if the answer is yes,

or if you're the mom and you're going to throw some, you know, so influence around as moms and wives can do. Hello, happy wife, happy life. I've been married 20 years. I pretty much do what Stacey wants us to do.

Well, it's okay. I mean, you can't read the room and go. Stacey wants us to do this. Guys, we're doing this. Yeah, like I'm smiling.

I can see throwing out the well. I'm going on a hunting trip. That's just a guy kind of test in the waters. Want to see if there's a little. Oh, yeah.

That's an excuse. 100% it's an excuse. So let's have a family meeting and decide, do we all really want to do this? And then see where it lies.

And then you got to meet with hubs and go, hey, look, I'm working for this sole purpose.

“You need to look at what I'm doing is vacation money.”

If we want to give chair to believe and give over here, then we got to do that in this pile. And if you disagree, that's fine. But I just, there's enough tension around this that I think it's showing me that we need to have a greater

conversation about what we're doing with money, how and when. Yeah, there's really, yeah. Yeah, there's a gap in the values here. You value experiences with your family, and he's going, hey, there's other financial needs

that we need to take care of. Well, let's make a plan for both. I think there's a compromise here. We're going to have the mortgage paid off this year if we keep it this right.

And we're going to go in this trip. I'm saving on the side. So plan the schedule, plan the budget, get everyone aligned, and then just go.

Don't overthink it. Life is short. That 15-year-old, the time is ticking. They're going off. Cruising my parents lame.

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Get started at CHMministries.org/budgets and use promo code RAMSI. That CHMministries.org/budget and promo code RAMSI. All right, Chris is up in Omaha, Nebraska. Chris, how can we all? Hi, how are you? Good. How are you, Chris?

I'm doing well. My question for you guys is I'm curious how much I should have in my emergency fund, with a family of four high-commissioned job and the wife that's an educator.

“Well, that great question. So what is your household income on average?”

About $250,000 a year. Woo! Fantastic income. All right, so the commission is coming through, my friend. Yes. How long have you been doing this job? Nine years.

Okay, years. And how old are the kids?

Fantastic. Are they twins? Two sets of twins? That's amazing. Okay. Well, here's the deal with emergency funds. We say three to six months and there's a spectrum there for a reason. Some people, three months is plenty. For some people, six months makes more sense.

And for a commission job where it is variable, I would definitely be leaning six months. Especially every kid you add is just one more thing that could come up. You're just adding more potential emergencies.

“So what is six months to run your household of actual expenses?”

$25 to $30,000. That's six months worth? Do a total? Yeah. Yeah. So you're saying per month, you're talking about four to five grand covers all of your bills?

Correct. Wow. You guys are living frugally for making $250, that's impressive. Are you guys off the grid? No. Everyone healthy in the family?

Yes. Okay. Wonderful. Then I would just lean towards six months. If 25 grand does it, that's great. And here's the truth of the matter.

If you did have a bunch of emergencies all in one month that were 26 grand, 28 grand. You could cash flow it very easily with your income. Correct? Yes. Great.

All right. There you go, Chris. Appreciate the call. We helped at least one person today.

“I think so. Nick is joining us in New York City. Nick, how could we help?”

Hello, Nick. He seems surprised to be on the air. It's Ken and George. You just went blank all the sudden. That happens to me all the time. Don't worry about it. Let's go on.

So, I have two large loans that I was curious, the smartest way to get rid of at least one. I make about 6, 7, 6 years.

And one is $9,300 at 16 percent inches.

And the other one is going to be at almost 15,000 at 9 percent inches. Okay. Well, is that all of your debts? That's all my debts. Okay.

So, you got about 24 grand in debt. You're making 76. Are you single? I'm with a girl and a living girl. Are you covering her bills? At the moment.

Oh, boy. Well, that's a rabbit trail that I want to go down badly, but I will not. I'll just say this. Please do not combine finances or pay off anybody else's debts. We don't have to go down the rabbit trail, although I think it might be fun.

But the point is that's the answer to your question. Stop paying for her and that allows you to pay off debt faster. It sounds like you're stressed out about the interest.

My guess is you want to tackle the 16 percent interest first, right?

That was my thought. I have about $16,200 saved. You have $16,000? $16,000. Oh, awesome.

How much are you paying? I'm not leaving the girlfriend alone because it's actually real money. I'm serious. How much are you paying every month for her bills and her stuff? Well, basically, it's about bills that we both use.

So, you know, phone, we have two lines on the same phone line. I'll let you know that stuff. Once you add her job before she's currently looking for a new one, she was paying half the bills, half paying the majority of the other bills. So, like rent and the other stuff.

Oh, boy. Other than that, it's small. It's not much. But my goal. How much is it?

You sound like a politician on a Sunday morning show when you ask to direct question. Is it 500 bucks a month? I get that they're split. I'm a little less.

Okay. So, clearly because it's winter. It's going to work out a winter now. It was about anywhere between 200 to 200 electric. Okay.

I'll tell you, Nick. I wouldn't be job hunting super hard if I had bank of Nick at hand to cover the bills anyways. Just saying. All right.

But to the question at hand, we teach the debt snowball method

“because we have found that that's what actually causes people to get out of debt.”

So, the debt snowball method says focus on the smallest balance first.

Regardless of the interest rate. Now, it's your lucky day because your smallest balance has the highest interest rate. Right? So, the main question is why haven't you used part of that 16 grand. You have saved to just knock out this debt.

That's what I was planning on doing. But I figured you know what I'm going to call or you guys and see what my options are. Because this is the first time I've ever been able to hold savings. My whole life has been one step forward five steps back. Do you think that's partially due to the debt that you've been taking on?

There you go.

One more reason or knock out the debt.

What's the payment on that $9,300 debt? $9,300 is 430. Boom. So, now it happens.

“You clear that debt and you still have what?”

Almost seven grand left over. So, let's take six of that. I'm fortunate to be able to apply to the next one. So, three of that's actually going to my car six. Okay.

So, we're down to 13 minus the 9. Right? So, that leaves us with around 4. You could take another three of that and tackle your next debt. So, that brings you to a total balance of 12k left over.

And we have an extra 430 bucks to throw at that debt. And girlfriend needs to be pulling her weight. That's another nice raise. How much are these phone lines? How much are these phone lines?

How much are these phone lines?

We're paying $7,000 for the internet. So, that's $140,000 that leaves for the phones. Oh, your phones are included with the internet. Is that what's happening? It's a cheaper plan for the phones because we have the internet bundle in.

But the internet is also $70. Okay. Well, I was going to tell you that to switch your phone. I think you're overpaying for your phone plan. That's what I was getting at.

You could save some money there. So, I think there's some savings to be had in your expenses.

“If you want to switch, we have a great partner with Boost Mobile.”

You can jump on a Boost Mobile.com/Ramsie 25 bucks a month. So, if you're paying 50 now, well, you just freed up times two. You save 50 bucks a month, just like that. So, there's a lot of things you can do in your budget. My guess is you haven't been paying super close attention to what's actually going on with your money.

And if you did, you'd go, "Ooh, I can shave here. I can shave here."

You'd find another 500 bucks on top of this 430 year, about to free up.

Yeah. So, now we've got 1,000 bucks a month going at this remaining 13K. And what do you do for a living? I do a water treatment. Yeah.

You're a pretty handy guy. I picked up that you do your own work on your own car. Yeah. I mean, I'll be looking for-- Yeah, good for you.

So, the 5K job became a 3K job. But my point is, is, could you do some work on the side, given all that handy skill that you have, just to make more money to just make this thing go faster? You know, so I'm just-- I want you to think-- Yeah.

How do I do this? George just walked you through a lot of it. But you could also bring in some more income. I mean, every time we have a debt free stream on the stage, the income goes up.

Every time we go, "Okay." They tell us, "How much they paid off and how long?" And we say, "All right, what was your income in that time?" And they go, "It was this." And then it went up every time.

And so, know that you can do that as well to fast forward all this. Okay.

“Do you have a goal in mind of when you're actually going to become debt free?”

If you follow this plan? As soon as possible. Don't let that. It's not a day. You sound like a politician again.

How about this? You're paying off your debt today. The 9300. We're going to put a little bit remaining on that 15K. We're down to 13K, right?

So now it's, I'm going to pay off $13,000 in six months. And put that on the calendar, market, put it on your bathroom mirror, come hell or high water. We're getting rid of this debt.

And that means no matter what it takes, no matter what sacrifice is. And that might mean, hey, girlfriend, you're going to need to cover your own bills through some side gigs

because I got some debt to pay off. That's a real conversation that should have happened yesterday. Well, she just heard it apparently. Oh, boy. She on the line, too.

Well, he said that she was listening. She's no friend of mine, no. [MUSIC PLAYING] You've worked too hard to get control of your money, just to let strangers control your data.

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[MUSIC]

All right, welcome back to the Ramsey Show

for all to have you with us. Triple eight, eight, two, five, two, five. Is the number to jump in? Hey, if you've ever wanted to see the person who's calling in asking these questions.

What would it be like to be in the same room with them? You got your chance. We're taking the Ramsey Show back on tour. We've got four cities coming up.

You get to experience the show live raw in the room. It's a lot of fun. We did two last fall. They were great sold out. These are going to sell out.

We're in Charlotte, Denver, Phoenix, and Anaheim coming up this April. We're doing these in really cool venues. Only 300 seats in the very intimate. So we'd love to see you.

Grab your tickets at RamseySolutions.com/events, at RamseySolutions.com/events. Brian is up in Syracuse, New York. Now, Brian, how can we help? Hey, guys, good afternoon.

Hey, so I've been interviewing at some companies, and I am anticipating, hopefully a couple of offers to come in in the next couple of weeks here. I have background and experience in the roles that many are even for, but the roles are net new to the businesses

that potentially be joining. So my question is, what resources can I use to help determine market value? So I can most wisely negotiate my total compensation. Yeah.

Well, if it were me, I would be doing research on this. And so you can choose whatever you want to do, whether that's Claude, JGPT, Grock. I don't care, you know, Google. But you want to dive in and get as many resources

as you can that create a pretty good narrative

that's provable on the range and see where you stand first.

So I would be doing that first.

“Okay, we're based on where I think I'm at”

from a skill standpoint and experience based on, again, the size of the company, the industry itself. There's a lot you can do, and you get a pretty good idea of the range that you think is realistic.

So that's where I would start and see where you land on that. And then when you get an offer, any kind of negotiation is based, and needs to be based in reality. Yeah, that's where I was trying to land. You know, like, I can use GPT and that's fine,

but I want it reliable, good data. So I can say, hey, here's my experience. Here's the conversation we've had. And then based off of this rock solid data, here is where I've come to this number.

Well, again, when you get that information, ask for the sources. Yeah, you'd be surprised, you know, you can find that. You can find that. And then you'll have a range, and you know what you're looking for.

And so when you go in there, be confident. Don't be a rude, but be firm and say, hey, I'm currently interviewing four positions in this range. And usually what you want is your bottom end is really the kind of where you want to be.

“At this stage, though, you should have already discussed”

with them in the interview process salary expectations. Yes or no? Yeah, I left it a little open. So I didn't say, you know, I need X. I thought that'd be better positioned once they,

they want me. They know that I can really get it through. And then I have a bit more leverage. So I have an idea, but I would say, like, even their range is lower than what I came from.

So it's still doable. But again, you know, I want to maximize. And I'm working more than just that dollar. You know, I want to look at the total package as a whole. Have you let them know that?

Yeah. Okay, I did. So they're aware of, hey, we're kind of low for where this guy's at and what he's currently making. How can we make this compensation package as a whole, a little bit more exciting?

Yeah, exactly right. And these interviews as well just came from, you know, networking like direct conversations. So I didn't want to necessarily blow it before we got there. And the conversations have been in really exceptional.

Right. Yeah, again, I want to make sure I get a good information. So now we take the data that you're going to go find. And you can prove it and you got some sources.

And again, you're never going to get an exact amount.

You're always going to get a range. But if we do a research and we've got some real sourcing, which is easy to do today's world trust me. I can find out in about five minutes on any one of those AI agents. Okay.

And so we're going to take that research. And that just informs us based on where you are right now. You're not going to go take the job for less money. So the starting point is where you are now. That's the basement, correct?

“I mean, honestly, I was part of a big layoff.”

So I would even take a little bit less just to kind of get back up there and work back up.

So when you go into our sponsor, you got to say, okay, I know what my basement is. And that's the worst case scenario. And then how does the research inform where I'm at on my basement? And then you'll be fine.

You know, and look, here's the thing.

All of this is about posture. If you act like a jerk or act like an entitled punk, which you're not going to. But if any of us act that way in our response to an offer, then that's where it could go south on you.

“But you have to control what you can control.”

And if your posture is one of humility, but confidence. Okay, based on knowing what you need and knowing where you belong from the research, if we've got a nice mix of humility and confidence to go, gosh, guys, there's a lot about this I like. But realistically, and I don't know what you can do,

that's a great negotiation tactic. I don't know if you can do more, but this would be ideal. I mean, that's all you can do, and you let the chips fall where they fall. I like that. And open ended.

Can you do any better? I'm just curious. And if you leave it like that in the spirits right, the vibe is right, then it's not offensive. Just not going to hurt your chances of getting the job.

Exactly. He sounds like he's in an ease up the tail end of this thing. Let's land the plane, Brian. Let's go like it. Let's go to Richard next in Los Angeles.

Richard, how could we help? Hi, guys. Hopefully you can be some great assistance and some great recommendations for me. I currently have owned my home for about four and a half years. I have about 300K in equity.

A big mortgage payment. I'm single income in my family. I'm married and three children. I take care of the household, my wife stayed home wife. Home schools to kids as well, so she's busy busy busy.

Okay.

Basically, I'm just living every two weeks.

I get paid. I net about nine grand a month. My mortgage is about five. I don't have any car payments. My cars are paid for.

I have about a $2,000 credit card that I owe some money. I owe money on, and I have a $5,000 credit card that I owe money on. My utilities are averaging anywhere from all the utilities included about seven hundred a month. So, you know, and then I got food bill. I got to feed the whole family.

So, it's just, I'm literally just, you know, tired of just hand a mouth on 51 years old.

“So, I need to know, you know, should I sell my home and just move out of the state and buy something within my means?”

I mortgage rates 3.9, so it's very low rate. You know, so I hate to lose that because rates are high. But I'm just torn. I'm tired of living this, you know, every two week paid paycheck to paycheck kind of thing. It's just, it's tough.

And not to mention, I do have a little bit saved away in my 401(k), not a whole lot. But, you know, I can't even do the, you know, 7% company match. I'm barely hitting 3%. So, you know, it's just... Yeah, you're trading water in every area.

You're trying to pay off the debt, but even that's hard. You don't have anything in savings. You're putting a pitily amount and retirement and things are tight. And it's directly tied to that gigantic mortgage payment. I mean, that's, that's eating your lunch right now.

That's over half your take home pay. And it doesn't seem like any of the variables are changing. Your income isn't not going to go up drastically in the near future. Is it 6 to 12 months? No, no.

I've been on the job for 13 years. I'm not going anywhere. Okay. And so nine cases where we're staying and guess what? The mortgage is only going to go up because part of that is your escrow, which is your taxes and insurance.

And as we know, insurance has been going up. Taxes are going to continually go up on property taxes, especially in California. And so the issue here is if your income stays about the same and the mortgage goes up, it's only going to get worse.

And so your best bet would be to downsize. Take that equity have. It might be renting for a little while. It might be taking that 300K equity and putting it down payment on a much, you know, cheaper or smaller house.

I don't know how that affects your family and where you are, location wise. Mm-hmm. It affects the average house in California. I think 540,000 right now, average and the region will relive.

So, you know, but I don't, I wouldn't build it. Those neighborhoods aren't. You know, we live in it. I hate to say that. But the neighborhood just wouldn't be something that we would go comfortable

living in. Yeah.

Well, the reality is you're in a very high cost of living area

and it requires a very high income. And you have a great income. But you bought too much house too soon.

“And so you need to make some drastic decisions here.”

And that probably includes relocating, downsizing, and maybe a rent in a neighborhood you want for now and hang on to that 300 grand, get out of debt, get the emergency fund, and get to a better spot before purchasing your next one. [ Music ]

Do you plan on retiring a millionaire? Yes. But was that rhetorical? I'm sorry. No, no.

I mean, a lot of people do, but the vast majority of Americans

George never hit that mark.

Here's a piece of data that I thought was shocking. Only 3% of US adults have $1 million say for retirement. Is that shocking to you? Are you so in the numbers that you're un-shocked? Yeah.

I mean, 97% have less than a million dollars saved. If you switch the data around, you go, yeah, that tracks. That tracks. And here's the funny part, Ken. In the comments section, as I encourage people to do this,

they go, a million dollars is nothing in today's America. I go, are you even investing? No. The answer is no. So here's the thing.

We're not saying that you only need a million dollars for some people that might be more than enough. For some, it might not be near enough. But I want to show people today that you can retire with a million dollar nest egg, no matter how old you are.

All right, cynics pay attention. So it's not about income. It's about margin. How much you're able to put away a month and how early you start. And here's the other thing.

We talk about investing. It's different than saving. You can't save your way to wealth. Saving is just parking money in an account. A high old savings account, maybe gets 3%.

In investing, we're talking about in the stock market. In companies we're rooting for partial ownership, called shares. And we're rooting for these companies to grow in revenue, which increases the share price, which increases our nest egg. That's how compound growth works.

Your money making more money, making more money. So I'm going to use the Ramsey Investment calculator today to inspire you all to become wealthy. All right, and if you don't become wealthy after watching this, that's your own fault.

So you guys can click the link in the description or jump on RamseySolutions.com to use the calculator. So can let's throw out some scenarios, some ages.

“And I'll tell you how much you need to invest at that age”

to become a millionaire by 65. Okay, good. Our 62 in this case. All right. Am I throwing these in?

Throw it out. Okay, here we go. How about age 24? Oh, okay. So we're out of college.

We got a first big boy job properly. And 24. And let's say you're going to retire 62. You have the ability to do that because you started early. Okay.

You're going to invest. And we're going to also imagine you got 1,000 bucks in there so far. How much will you contribute monthly? $150 a month. We're going to assume an 11% average annual rate of return.

People go, where you get an 11% this guy's crazy. I'm literally looking at historical data of the US stock market over the last several decades. And if you look at the last few years, it's been up 23%. 25%, 17%.

So don't act like these numbers are crazy. This is pretty conservative here.

So calculate, as you can see, almost $1.1 million.

24 to 62, 150 bucks a month. That's unbelievable. All right. Let's jump it up a bit. All right.

So let's talk about these people. They've been out of college for 10 years or so. No longer the young professional, but still young. Yep. 35.

Okay. So let's say by 35, you've followed the plan. You're debt free. You've got the emergency fund. You are ready to invest.

35. You would need to invest. And we're going to say 65. You got a little bit of a later start. 65 is still a great age to be retiring to not have to work anymore.

You're going to have to invest $375 a month. And you would have a little over a million bucks.

“Now what you'll notice here, Ken, is you have to invest a whole lot more as you get older”

in order to hit that same goal.

And the beautiful part here is you don't need to invest a million dollars to have a million

dollars. My screen here, you contributed $135,000. The growth alone was $942,000. That's the magic money of you just staying in the market. Staying put, letting compound growth do the work.

87% was just a growth. So let's say you get an even later start. Yeah. Let's take a 10 year swing here. Let's go to 45.

Okay. 45. Most people who call in the show at 45 go. I am way behind. I got nothing saved in retirement.

You need to invest. Just ready for the sticker shock. $1,200 a month to have a little over a million in that one account. You see what I'm talking about here? We went from 150 bucks a month to 1,200 bucks a month if you had a 20 year gap.

And so the power of starting early is powerful. And you'll notice at 45 to 65 you had to contribute $288,000 to get that million. But at the right page of what we go back to that 24 to 62, look at this. You didn't contribute $288, you contributed about half a mill up. Sorry, messed it up here.

Let me go back to that one 50. All right, here we go. Look at the $68,000.

“So not only did you have to contribute less per month.”

But it was a total of 68 grand that got you that million. That's wild. It's doable. That 94% of that account balance was compound growth. And it's the power of starting early.

And let me tell you if you're listening and you're going with George must be nice to be 24 or 35 or even 45.

There is still hope yet.

And that is just one account.

And so think about it. You got a paid for house. Well, that reduces the expenses that you'll have in retirement. So it's not defined by your age, but by your financial goal. It's a number and you can get there.

So go use the calculator for yourself to get inspired. Not to lose hope, but to gain hope that you can build wealth for your family and leave a legacy. We'll drop a link in the description to that investment calculator for you guys to check out.

“And this is why, by the way, you need to be using every dollar.”

Right, when you've got to get to a point to say, "Okay, I've got to be disciplined now. No longer am I going to let just money come in and leave and not know where it's going." So having a budget like every dollar to use that app to have a coach, a personalized plan. That's what's going to help you be disciplined to be able to put the right amount of money away to actually take care of you long. Exactly.

People check out every dollar. Ken, where am I going to get 400 bucks a month? I'm going to do your car payment 600 bucks a month.

I think we found the investment money.

You just traded it for something going down in value. It's exactly right. It's there. Use every dollar. It'll find you that margin.

Alright, let's go to John and Boston, Massachusetts, John. What's your question? Hey, Dave, how are you doing? Good. It's Kevin.

I have been there about a year. I moved from South America here to Boston with her, which was a big life change.

“We're now big in making six pieces and making 80 years.”

Right now we're doing like housing house and it's starting to weigh only a little bit. My wife feels very strongly that her hair is a little bit bigger salary and her savings. It should be all hers. And I don't feel like telling her that we should combine it. But it's not a way I'll make it.

We've moved into an apartment that she she preferred and we bought a car that she preferred. I'm just getting the pressure of paying house the expenses expenses.

See you guys have never been aligned on money.

Right? We've tried. We did the financial piece. We took a couple of shortcuts. I would say.

No, that's a shortcut. You're not only feeling pressure. You're feeling depressed because your wife doesn't listen to one thing you say about money. Doesn't make you feel disrespected. Masculated a little small.

Yeah. Yeah. I'm trying to keep up. You know, but keep up with what? Marriage isn't about keeping up.

You said a minute ago make your life better. You said I don't feel like telling her. I mean, you have been absolutely put in a jar of my friend. And you know, I don't need you to validate that. I was just trying to get you to realize what we're hearing.

We're on your side. But you guys have a massive marriage communication and values alignment problem. That you got to get fixed. George and I can't give you some little one to punch today. You guys need to get on the same page.

And you may need a professional to help you. Or you're going to end up resenting your wife if you don't already. Are you feeling? What I'm saying? Yeah.

Absolutely. Am I wrong? Well, I feel like she's a bit more open to find a solution that it sounds like maybe a bit more. Okay, well, then if she's open. Okay, great.

If she's open to meet you in the middle, then you guys need to have a candle light dinner tonight. And we get out every dollar and we say we're going to combine finances. And then after we combine finances, we're going to put it in a budget. And we're going to get aligned. And we're not going to take shortcuts.

We're just not going to do it because she's thinking of shortcuts. Okay, you're stressed out by the shortcut. Which leads back to the same problem. You guys aren't on the same page. George, well, everything right now is, well, that's yours.

This is mine. I make this money. You make this money. This is my thing. That's your thing.

When you guys got married, everything became one. Total unity. Right? You share a house. You share a bed.

You should share a bank account. You should share the debts. Share the load.

“Everything goes in one pot if you want to have a successful marriage.”

You can do it separately. It's just going to be a whole lot harder. And there's so many more ways you can screw it up. And so you need to reset the conversations that, hey, I have not done a good job leading in this area.

I would like to restart and be totally unified for our financial goals so that we can win together. That's why we got married. [ Music ] Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio.

And we're here for you.

“Triple eight, eight, two, five, five, two, two, five is the number.”

Robert, joins us now in Denver, Colorado.

Robert, how can we help? Hey, Ramsey King. So I got a lot of debt. It kind of escalated back in June. And I'm looking at things.

And I think I need some help. Okay. How can we help? So I got a car that was too expensive. And I ended up putting a lot of my daily expenses on a credit card.

And so it was out of point where I couldn't really afford the car payment. And I was putting everything else on a credit card. So now I'm kind of looking back at everything. And I just recently got rid of the car. And how did you do that?

That's negative. So I traded it in at a dealership. And yeah, I just got traded in by you for the vehicle. And that paid off the loan? It did not.

So I actually have too much debt to income. And I couldn't get a loan to pay for the negative equity. So I had to borrow money from my dad to pay that negative equity. How much was that? That was $4,100.

Okay. So $4,100 to dad. What else?

What other debts do you have now?

“And then I also have another $4,100 on a credit card.”

I got $3,000 in a personal loan. And $34,000 in student loans. Okay. So that's the big one. Is that split up into a bunch of separate loans?

No. I actually refinance in June. And so now it's just one long for that. Okay. With a private lender?

Oh, yes. Okay. Well, we're going to debt snowball this thing. Do you have the income to support it? And do you have reliable transportation right now?

I do. And that's another part of this. So I ended up borrowing money from my boss to buy a car. Oh, my boss. My boss sold me one of his old work cars.

And I'm currently making him payments on that. Well, that's an awkward situation. Yeah.

So it's real debt and I'll use.

Hard to ask for a raise right now, isn't it? A little bit. What do you make? So I make about $46,000 a year. Doing what?

I'm an arborist. Okay. And how old are you? I'm 27 years old. Okay.

Single? Single. Great. Which means we have a lot of time on our hands, and we can cut our expenses down to the bone,

and no one is affected, but you. All right. Will you agree? Will you agree? Sweet.

So what can we do to make more money? Right now, you've got a big pile of debt. Right. You've got as much debt as you do income. Yeah.

Is that right? That is true. That is right. So that debt to income ratio. You're going, all right.

Something needs to change here. We can't change the debt picture. There's nothing we can sell. You've already got rid of the car. You owe how much do you owe your boss?

I owe my boss $500. Oh. What car was this? It was at a $500 car? Or did you give a money out of that?

It was. It was a $2,000 car. And I told them how they pay. I really don't have the money right now, but I want the truck.

And he's like, okay. Well, see garnishing your wages? He is not garnishing my wages now. He is not. Where did the $1,500 come from?

It came from my tax return. Okay. Which is essentially your wages. That was money that would have been in your paycheck. Okay.

Well, Robert, the path forward. Is going to involve a whole lot of work. So what can you do? Is there anything in your field as an arborist that you can do on the side?

Probably. I would just need tools for it. Because right now my company supplies all the tools and I'd have to go out and buy all that stuff. So that's kind of why I'm hesitant to do something like that.

Wait, wait, wait, wait, wait. What can you do? It doesn't require you to buy tools. You're breaking up on us. Sorry about that.

I could work overtime. Boom. How much? Yeah. I could probably get an extra hour to a day.

Okay. But what I'm getting at is I want you to think outside of the box as well. I'm an arborist. And I usually use my company tools.

So I'd have to go buy tools. No.

“What other skill sets or if it's just manual labor?”

What can you do to make an additional $1,000 to $2,000 a month? That you'd have to answer it on the air. But that's the home one exercise. Right? Okay.

Let's go make some more money and throw it at this debt. Because as a young guy, you have in George puts you on the spot. You have all kinds of time. And the more you can work, the more money you make,

That's the mindset. What can I do? Where can I sell something? This kind of intensity gets you out of the situation. Can you cut down some trees?

Can you do landscaping? How wide is your skill set here? So it's between trimming and plant health care. So applying herbicides and fungicides, pesticides, things like that. Great.

Those guys are knocking on doors all day long, selling people. Yeah. And so you can be doing that. You can jump on a Facebook group.

And say, hey, here's what I provide.

I'm not going to rip you off. I know what I'm doing. I'm an actual arborist. Here's what I provide. Here's my services.

You do a few good jobs in the neighborhood. Now all of a sudden you've got 14 homes in the neighborhood that you're taking care of. Do you see what I'm going with this? Why do you? I mean, we just had a storm come through Nashville.

Can the amounts of money people are charging just to remove a tree branch was astronomical. I had to cut one of my trees down. There you go. Of course. Where were you, Robert?

Yeah. So you see what we're getting here. Get creative with the skills you have.

And if that runs out of steam, you can always do some of the side gig economy stuff.

But you're going to make way more doing the thing that you're already good at. Well, I like that idea. So yes, over time. Because right now, at this rate, it's going to take you forever to pay off this debt.

“You only have a few hundred bucks a month if you're lucky to throw it to debt, right?”

Yeah. Yeah. But if we get throw two grand amount of debt. Now we're done in two years. That's the math.

So that's your number. I need to find two grand worth of margin to throw at these debts. Small, still largest balance. Attack the little one with vengeance while making minimum payments on the rest. Once one balance is knocked out, frees up a payment applied to the next one.

That's the debt snowball method. I understand. Have you ever done a budget? Uh, not really now. Today is your luck today, Robert.

I'm going to hook you up with every dollar if you promise to use it. This is our budgeting. All right. And as you go through the onboarding experience, it's going to personalize recommendations to help you find more margin.

Just like I'm doing right now, it's going to do this on steroids all day long. Inside of the app, making a plan for every dollar. Are you in? Yeah.

I'm in. All right, 24 months that I hope you do it even faster than that. But 24 months is the final final cut off. Make that a goal. Find the margin.

Stick to it. Oh, to be young again, Ken.

“Because when I was, is that's what I was doing.”

When I started here at 23, I had $40,000 in debt. I wasn't making $40,000 in debt. What did you do? I did about 17 side hustles. I was building websites for entrepreneurs and speakers and authors.

I was doing marketing consulting. I was driving for Uber, driving for lift. On top of cutting my groceries down to the bone. How many hours a week? Do you remember how many hours you were doing?

It was at least two hours every night when I got home from work. And then I would go heavier on the weekends. Trying to knock out six. How much additional money were you making per month as a result of all of it? I probably made an extra 25 grand.

My first year just in side hustle alone.

That's you. That's you. It's possible. And the younger you are, the less responsibilities you have, even better. Hey guys, Dave Ramsey here.

Every day on this show, we help people work through real money problems. And figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help.

It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. [Music]

“Alright, let's go to Daniel in Chicago, Daniel, how can we help?”

Hi, my father has a term life policy that he's considering canceling. There's 10 years left on the policy.

And he's always had a little bit of a strain relationship with life insurance.

“And so now he's highly considering canceling that policy.”

And I'm just trying to get him the best advice on whether that is a wise decision now or not. He doesn't have anyone else at home, you know, my mom was the only other person there. And so I'm just looking to give him the best advice I can on whether he should keep that policy or let it go. Yeah, tell me about the weird relationship. I didn't know you could have a weird relationship with term life insurance.

He is from his father and from his bringing up, you know, my grandfather never had life insurance. It's always been seen as something of, you know, people getting rich off of your death type of mentality. He's changed that view a little bit over the years. I think your show has helped him with that and he does understand that it's to help provide for your family if you were to pass type of thing. How old is he's?

He is 65 years old. All right. And what is his net worth? That's a little tough to say. I mean, I think he estimated it somewhere around the 350 to 400K when he said it was all said and done.

That is his entire estate, his retirement, everything.

“That's, that's what he's told me he estimated at and what's the face value of the policy?”

$250,000. I'll tell you right now it's a steal of a deal because that's half of his net worth right there. Does he still have any debts any mortgage? No, he's only debt is one car payment that he continues to pay on but the house estate and everything else has been paid off. Okay. Well, the rule of thumb with life insurance is exist to replace your income to cover the people who need it.

And you're saying that there's no one who needs it at this point. The kids are grown and gone, they're doing well on their own. He has enough assets to cover final expenses, burial, the debts, all of that is what you're saying. I, as far as what he's communicated to me, yes, he does, he does have that. I think my, my one main concern is he has talked about dating in the future where there would be somebody that might be in the, might be in the picture in the future.

That's a great reason to hold on to it because if he gets rid of it now, he's going to have a real tough time getting it again, especially for the raised paying. That's right. How much is he paying per month? 80 dollars. Oh my god. Okay. What's his income? Roughly about 50,000 a year. Okay. So as a, as a part of his world, it's not much. It's very reasonable, especially for a guy, his age.

It's not a huge policy if we're going to be honest. We recommend 10 to 12 times your income.

And so if he makes 50, it should be a half million dollar policy or more.

And he's got 250. So he's got half of as much as he needs, but again, he doesn't fully need it. What he needs is a bigger nest egg. And unfortunately, he's not going to be able to get that out of the insurance policy. So if I'm an issue, I would personally keep it for the peace of mind.

“Because if you look at the actual math on this, we're talking he's paying 9, 60 a year for 10 more years, right?”

Yeah. So what we're really saying is, is it worth the risk transfer if something were to happen to me from 65 to 75, there would be a $250,000 payout to the beneficiary for the low low price of 9,600 bucks. Correct. You see, so when I put it in those terms, I go, that's a good buy. I would hang on to that, not knowing what the future holds, not knowing if I'm going to get remarried one day.

10 years is a long time. That's been my advice to him. He has just been hesitant to take that advice, mostly because he feels that he should take that extra $1,000 a year and invest it into something. So it's guaranteed return, even though it's not as big of a return. Got it. What age did your mother pass?

She was 63 years old. Wow. Was it health raisins? Yes. She died of lung cancer. Oh, my goodness. I'm so sorry.

Thank you. Well, that would put things in perspective for me, going, we're not promised tomorrow. I mean, he's 65, not 25. And so the chances go up over time, that he could pass. And so I hope he lives a very long life.

30 more years in the policy lapses and he goes, wow, that was always the 9,600 bucks.

I would love for us to be looking back in hindsight, having never used it. That's sort of the goal with term life, is that you never have to use it. And that's the point of insurance. I don't want to have to use my car insurance,

So I can't make the decision for him.

But I would find 80 bucks elsewhere to go invest. And he should be investing. Yeah. And that 80 bucks is not going to make or break his world right now, and therefore I would keep it for the next 10 years.

And then again, we talk about this all the time on much bigger issues, much sticky issues in this. It's very difficult for an adult to convince or persuade their parent to do something. You can advise.

You can give some ideas. But other than that, you got to let it go.

“And he's going to decide, I think your winning point is, hey, you mentioned one”

to date, and that could turn into something, then this would be a good thing to have. I think George is pulling on that. It's probably the best case you can make for him why he should keep it. Because again, it's just not that much money. And if you don't have term life or you don't have enough, which can a lot of people

they go, well, I have it through my employer. And I go, how much do you have three employer? $10,000. Right. That's barely going to cover the coffin. And if you've got to have 10 to 12 times your annual income, 15, 20 year

level term policy and the people that I have mine through can as his through his and her insurance, you can jump on his and her.com and just knock this out. It really is not that difficult. Some of these now cannot. The policies are no medical exam.

You can literally do it online if you're in good health.

If it's under a million dollars and you're in good health,

there's a lot of these. Or you don't even need to get your blood to do the nurse. I've had to do that. It shows up takes the blood. But even that is just really not a problem.

They're just such a good job of scheduling around five months. They come in, they do the thing, and you got peace of mind. And by the way, it does not increase your chances of dying if you get term life insurance. You're going to, it's the same exact chances regardless. And I have three kids of life.

I put a pretty good amount on me. I sleep with one eye. You've got enough in there that you're a little bit worried about. I told Stacy, well, don't get any ideas here. All right.

There's a clause in there where George has to sign off on it after he does his investigation. Oh, I like that. You liked it? I love a clause. Like I said.

You like a clause where you're the main part of it. Well, I did a fight. I done that was the ender. Is there a way to put George Campbell in this that he comes in. He's got a lot of questions.

He's very suspicious. There's enough money in here to handle George hiring a private investigator. And you would then determine whether or not Stacy gets the money. If I could determine, if I get to be camel PI, sign me up.

“I think I may ask him if I can write you into that.”

That could be great. Stranger things have happened. I'm sure a lot of people are leaving me as beneficiary on their term life. And in their wells for all I've done that. That's a really dumb question.

But let me tell you about good questions. People are flooding to ask Ramsay. Our free AI tool that's built and trained on our proven Ramsay principles. And today, George, we're going to break down the most asked question from this week. Are you ready?

The main question is, what are the best strategies for paying off debt while maintaining a good credit score? Interesting. Okay. Well, I'll tell you my take on this. You start by making a budget.

Save a thousand dollars. Start our emergency fund. List all your debts. Accept your mortgage from smallest to largest balance for a guardless of the interest rate. And pay minimum payments on all the debts.

Accept the smallest one. Knock it out quick. Move on to the next debt. And by the way, I cheated. That was from Ask Ramsay.

Yeah. Jokes on you guys. See? It actually does. Life is an open book test.

“Why would I not utilize the tool at hand?”

Ask Ramsay is playing off of what we say on the air. And here, let's talk about the credit score angle. It hits this too for your credit score. It may dip a little as you pay off debt and close accounts. But that's okay.

The goal is financial freedom, not a good credit score. So I love this comment. Can I read this here? Yeah, go for it. I just saw this in the Ramsay Facebook group.

Donald said it has answered some very obscure questions I've had for a long time. I listened to about five total years of Ramsay shows and try to hear some situations. But this tool can answer them right away for your specific situation. There it is. Go to RamsaySolutions.com.

You can't miss it right there at the top. Ask Ramsay or you know, I like to send you the show notes. Folks, like the link down there. There's just good stuff in the show notes. Click the link.

[ Music ] When people hear my story of paying off debt, they say things like, "Dang, that must have been so hard. I can never do that." And I tell them, sure you can.

It's a short term sacrifice for a long term gain. But do you know what's really hard?

Working your whole life and never having anything to show for it.

Never having the long term gain. Just feeling broke, stressed, and maxed all the time. And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom.

But you need the right tools to do it. Like our every dollar budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation.

in your budget so you can get rid of your debt and actually build wealth.

So make the choice today. Short term sacrifice, long term gain.

“Choose the tool to help you get it done fast.”

Download the every dollar app and start for free today. Tax season is upon us to get free checklist and guys to help you file. Make sure that you go to Ramsey Solutions.com/taxes. Ramsey Solutions.com/taxes.

All right, let's go to Josh and Beton Rouge, Louisiana, Josh. How can we help? Yes, I can. Can I hear me? Yes.

Here you will. It's an honor to be here. I want to share with you guys. Yeah, that's awesome. Thank you, Senator.

How can we help?

So my question is, my dad's going to be calling me here shortly.

And I need some help with communicating with him without overstepping as it would be in the sun. He's going to be giving me good news that he's retiring after six years with the company. And he wants to take out his whole retirement and pay off the house. Which I'm okay with. It's not going to have a mobile and he has a lot of other debt bill like a lot of other debt.

Cars, a lean, a mouse. Why is he retiring? Like a lot. And you want to get to another company. You said he offered you a job to decide.

Okay, so he's not retiring. You're switching jobs. Yeah, but I just wish he would. Take the money and maybe move it to another account. It's $70,000.

But it's all he's got. But what is it? Is it in a 401k?

It's in the single stock.

With the company? Yikes. Oh, okay. So it's really not retirement money. It's just he's got stock in the company.

Right. Oh, yeah. It's not is it trapped in a retirement account?

“Or is it a non-retirement account buying stock up from the company?”

It's like a stock purchase program. Yeah. Yeah. It's like a stock option. So he can cash out.

Okay. So he has a lean on his mobile home. Yeah. For my understanding, he wasn't really up front with me. Well, about my wife about it.

He had just talked her a lot. And he was going to be calling me because I just got off work. Oh, I see. So he's all excited. And he's like, I feel like he could ring in while we're talking to you.

This is like fresh. So you don't want to be a buzzkill going. Dad, congrats. And don't do this really dumb thing. Yeah.

I'm just having a little struggling moment right now. Well, what's his total debt? What's his total debt? Well, he's going to get taxed. So let's re-frame this.

I appreciate you calling us about this. But we need to reframe this whole thing. Because you're going to let's re-frame this whole thing. Because your dad is excited. He's so excited.

He called your wife at lunch today. Right. Okay. This is hilarious. And he's coming into some money.

And he's excited. And he's 62 years old. And he's made a bunch of boneheaded decisions with money. All right. Let's just can we pour all that into the cup?

Because that's the cocktail we're dealing with. All right. I want to think through this.

“And as an objective bystander that you call today, what's your opinion?”

This is my take. Okay. All you can do is ask him some really good questions. There are questions are better than suggestions. When we're talking about our dad who's excited about cashing out and has made a bunch of bonehead decisions.

You would you agree with that? Yeah. Okay. So questions like and George, you jump in here, popcorn it. But some questions are, hey, dad, are you aware how much you're going to have to pay in taxes on that stock?

I'd start with that. Right. And who knows what he's going to say? But that question versus a suggestion is it's your best chance of allowing him to think through some stuff that he may not think through. And you're not making a suggestion.

Or if you said, dad, you know, you're going to pay this in taxes.

And he's like, hey, man, I just called to hear you say congrats.

So questions, not suggestions. That would be my advice.

“First question I would ask is, dad, are you aware what the tax implications, what are you going to do?”

Know what you're going to pay in taxes on that? And hopefully he registers, oh, so I'm not walking away with $70,000 or whatever it is. I'm going to end up walking away with this. And then you go, what are you thinking about doing with that money? And then when he tells you what he's going to tell you, then you can ask some other questions.

I just think it's the sun. That's about all you can do. George, I want to bring you in here. You're not going to owe the force. I'm going to do anything.

But if you can scare him into it or excite him into something, that's a better route. The main question is finding out if this is in a retirement account or in a brokerage account. Because that vastly changes the advice here. If it either way, we want to get out of this single stock that is very risky. If it's in a brokerage account, it's simpler because like Ken said, there's going to be some capital gains taxes.

And that's it versus early withdrawal penalties on top of income tax, which is going to be a whole lot more. But let me show you the math on this. If he just left the 70 grand and he rolled it over to a roll over IRA. So direct roll over, never withdraws the money, but rolls it over to an IRA in his control. It sells the stock inside of that and buys diversified mutual funds now we're talking.

And now you'll see an 11% return over the long haul. So from 58 to 68, if he does that, his 70 grand turns into over 200 grand. That's pretty wild, right? That is wild. I kind of know that.

Pull up the calculator. Show it. Say hey, I talked to my financial advisor about your situation because I was curious as to what they would say. Because now it's not just your opinion against his. You brought a professional into it and said hey, I talked to this guy.

He thinks you really need to be thinking about the taxes on this and the implications of unplugging the compound growth, withdrawal penalties and it would be a much wiser use to use your future income to pay down this debts, pay down the mobile home instead of robbing your retirement early.

Because here's what it will turn into if he just left it alone and never added a dime.

See, now we're a quick and some facts. We're not leaning into just anger or emotion. It's just very calm. Very much you love him. You want the best for him.

You have no skin in the game here. You would you would treat him like he was a friend of yours.

“So the question is does he respect your opinion enough?”

Oh. There's your answer. We've been Dave Ramsey's fan for a while. You know, I'm not him. I felt me in my, yeah, me in my life.

Oh, okay. I was like, you and your dad. I mean, we already got the answer. When you have someone, does he respect your opinion and your answer is? I mean, that's like a whole paragraph.

And that's where the one sounds.

I think the third party angle based on what you said is the best route to go.

I really, this is a big decision. I'm so excited for you. This is a huge next chapter of your life. And I just thought I'd bounce it off of a friend of mine who's a financial advisor. And he's got no skin in the game. He just had this to say. And then you share everything we've talked about.

Yeah, but I have to calculate. Yeah, ask questions though. Ask questions. Listen, he can't get defensive if you're just asking questions.

“Yeah, but yes, but it's the right kind of question.”

In other words, don't ask a question where he feels pinned in. Just be like real light. Like as soon as the call comes in, just go, okay, I don't want to tell dad. I don't want to tell dad. I don't want to tell dad.

I don't want to ask, ask, ask. I don't want to just be low key light. And let's just see where it goes from there. Because the minute, let's say after your long sigh. And you reaching for the words to answer the question.

Does he respect your opinion? I already know where this is at. And this is really hard. And by the way, I'm going through this in a different level. My parents are in great financial shape.

But my parents are 75 and 74. And it's just a function of life that when we, they get to this age and your dad's younger and understand. But still, it's like the parent becomes the child. And the child becomes the parent.

And that's just life. And so you've got to honor. But still keep a boundary there. And I catch myself all the time kind of saying something in a way that I got, well, that's a little bit like, you know.

And it's just be really careful here because his life, his mistakes. There's only so much. At least you can sleep well, no one you said your piece. And you make this the Oreo method here.

All right, the top layer is dad. I'm so excited for you. That's awesome. Middle layer. A little bit of advice.

Going into the questioning. And then the bottom layer. Again, I'm so excited for you. That's the way to attempt it. So he doesn't get too defensive and shut down.

[ Music ]

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get in touch with a Ramsey trusted tax pro today. That way they can take the stress off your shoulders and once those tax forms come in and teach you how to keep your tax bill as low as possible. But don't wait.

Ramsey trusted pros can book up fast. Go to RamseySolutions.com/TaxPro to find one who serves your area with excellence. That's RamseySolutions.com/TaxPro. [ Music ]

Our scripture today is Proverbs 9/9 and struck the wise and they will be wise or still. Teach the righteous and they will add to their learning. Our quote today from one of George's favorite entertainment icons, Joan Rivers.

A classic.

“People say that money is not the key to happiness,”

but I always figured if you have enough money,

you can have a key made. That's actually pretty good. Thank you, Joan. To the light Joan Rivers. Yes.

Zachary is up at Springfield, Michigan. Zachary, how could we help? Hi. Hey, Ken. Hey, George.

Appreciate you guys taking my phone call. Sure. Yeah, I was wondering if you guys could share some advice or was done. So I've been reading the Bible lately.

You get me thinking if my wife and I are being generous enough at the moment. But I know the Bible talks about tiding and I'm wondering if that's the best approach when I'm on baby steps 4 through 6.

Baby steps 4 through 6. And you say you're tithing and you're saying, is that enough? You're doing 10%. No, you're income? No, no.

No, I know the Bible talks about tithing. I'm currently given both one and a half to 2% of my, well, one and a half gross income. 2% take home pay. What do you believe?

I'm wondering if. Bless us. But this is. So if you're going to come at this from a biblical point of view, then it comes down to what the Bible says.

What do you believe it says? Because a lot of people have a lot of different opinions about a lot of different parts of Scripture.

And so, and so ultimately, you know,

we can't tell you if you're giving enough, but I can ask you a few questions. So the first question is, do you believe in tithing?

“Do you believe that's something that you should do?”

It's something that I definitely want to work up to. I didn't ask you that. I didn't ask you that. Yeah, I do believe in tithing. I don't think the Bible would mention it as many times.

Okay. So there's that standard. And again, you didn't call, and I'm not preaching at you, but you called in you asked,

based on reading the Bible. And so that's between you and God, as to how you take obedience on that particular issue. Okay. So you don't need me to, you know, preach at you.

So you've already stated, well, I do believe I should be tithing. I'm not now. I believe I should, I'm going to work up to it. But again, that's, that's up, that's your deal.

I do believe in the tithing. And I think that you should. And so that's a baseline. And many people in different sex of the faith still believe that there's a tithing and an offering.

And again, the offering is above and beyond the tithing. That's between you and God as well. Okay. So without getting into a theological, you know, foundational lesson or some type of debate,

you get to answer M.I. giving enough. That you get to answer that. It doesn't matter the heart. Yeah. So I'm not trying to evade your, your question.

But that's as, as solid as I can answer that. You have to decide. Right.

“I think the, I think maybe more specific question is,”

if that would apply to people of all ages, of all incomes. Yes. I mean, we're, we're in the financial good situation right now, where like let's say I did want to go about citing right now.

I mean, go from one and a half percent up to ten percent. You would just kind of slow down, you know, what I'm going to put into you like the brokerage right now, which is in the future going to be for a house. And then also like for retirement.

We're, when we are looking into saving for. Well, children.

So here's what I would tell you to do.

Okay. I would tell you to, to go read more scripture. Buy a book or two on tithing. Go listen to some sermons on tithing. And I think you're going to hear a consensus.

And if Dave were sitting here, and I'm not going to try to quote Dave.

I'm pretty certain he would say that that's the wrong mindset

to look at tithing. That if I tithe, it's going to slow down my financial progress. He would say if you tithe and you give, you will receive more blessing.

And it doesn't mean it's dollar for dollar. So that's bad theology. I'm not saying that. But this idea and George, I want you to weigh in on this as well.

This idea that if I tithe and give a tenth of my increase, my income to a Lord who blesses me with it. It's his money. I'm not going to be slow down at all. But again, that's, that's a spiritual mindset

in believing in what the Bible says about tithe. I don't want to bring George and George, but I love what you said past for Ken. And I want to have to that. I'll be taking it off for him by the way at the end of the year.

Well, at the heart of this, I feel like it's actually a really good spiritual challenge for you. Because what we're really saying is, you see it as a finite pie. If I take this slice away,

then I don't have that slice for XYZ for the house for the kids.

“And I think what's so cool about the Bible is,”

it's outside of a pie. We can't look at it in finite when you're talking about the infinite. Right? And so we can't think of it like if I give 10%, I won't have enough to pay off the mortgage.

I think what you'll find is when you were obedient,

when you are faithful, you never lack.

You were given enough to manage. And I can throw some verses for you to look up later. You can watch this back. Proverbs 3, 9 and 10. On to the Lord of your wealth.

But the first fruits of all your crops, then your barns will be filled to overflowing. Your vats will brim over with new wine. Malachi 3, 9 and 10. Bring the whole tithe into the storehouse.

Not one and a half percent. The whole tithe that there may be food in my house. Test me in this. Says the Lord Almighty. Woo!

Them fightin' words. And see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it. And finally, Matthew 626.

I love this one. Look at the birds. They don't plant their harvest or store food in barns. For your heavenly father feeds them. And aren't you far more valuable to him than they are.

So I think at the heart of this, the scarcity versus abundance, spiritual challenge equity. And this is, you are not alone in this. I struggle with this. This is still something I'm figuring out and grappling with

because it doesn't make sense on paper. Right?

“But I think if you can learn to live on the 90 of what God has blessed you with,”

which I assume you have a great income, right? What's your household income? Oh, so gross is about 101. That's a pretty fabulous income. Anywhere in America, would you agree?

Yeah, yeah, no. It's enough for us. And how much are you putting away? Are you right at the 15% in baby step four? Oh, I'll do the math.

It's closer to 20%. I mean, overall retirement, we're putting about 27. Okay. 27%. So now you're going, you're going 12% extra above what we teach.

And you're having a hard time giving 10%. Oh, no, I'm sorry. It's 27,000. So actually. 27,000 out of your 101?

Oh, yeah. Yeah, that's 27%. That's 27%. I don't have to take my shoes off. I was easy math.

I'm sorry. Here's my challenge for you. Okay, it's good. You try it for a month. Try for a month.

“If your life is worse and you hate it and you're going to retire broke because of it,”

you can go back to the way you're doing it. But I think what you'll find is that when you're spiritually challenged, you will actually mature and you will find that you lack for nothing. That's my, that's going to be my hypothesis in this fun social experiment. So Zachary, you call us back and let us know how it goes.

But I think there's room to tie. I mean, you read about the weather. Well, giving her last pennies. Well, here's the irony in this. Zachary.

And I'm not picking on you. But I do, I want to give you this context. Before we let you go. You are concerned about tithing the 10%. Because you feel it's going to slow you down in these other areas.

And then we dig into. The, uh, babysitter for and we recommend 15%. Your income towards retirement and you're doing 27%. So there is fear driving all of this. You're afraid if I tied, I won't be able to do as much as I'd like to do over here.

And we've got to try and true system. And we say 15% enough. George can run through the investment calculator all day long till he's blew in the face. So what we're getting out of this is that you're really afraid. And fear is not a good driver for any decision.

Would you agree with that? Yeah. No, that's there. That is definitely some anxiety of like currently given. Like I said, about 1500 a year.

Here's what I want you to do extra homework.

Okay, George. George gave you some verses. I want you to do a little Bible study tonight or tomorrow. It's fresh on worry. What does the Bible say about worry?

Be anxious for nothing. Oh, when comes to mind. Oh, George, you are all over it today. I mean, you got to, you pulled up a concordance over there.

If I could play a keyboard, I would have noodled underneath of you.

Oh, well, so you were, see, you can play the keys. Yeah, I could have a nice chord. You'd be, you'd, you'd, I could fake it. Well, if I put an acoustic guitar on you, you could have, uh, there we go.

What do you call that? Little alter call? No, it's, if, if Noodleen is on the keys, what's the, what do you call the equivalent? Ah, don't quit. Droning that.

Strumming? Strumming? Strumming? While I preach? All right, speaking of.

Speaking of, preaching.

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