It's Never Too Late To Build Wealth

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Start budgeting for free today. [MUSIC] >> Normal is broken, common since it's weird. So we're here to help you transform your life in your money from the Ramsey Network in the Fair Wins Credit Union Studio.

This is the Ramsey Show. I'm Jade Worsha. Next to me, George Campbell, we will be taking your calls about your life and your money for the next couple of hours. It's a live call, Tribal 8-825, 5225 gets you on the line.

Harold is on the line. He's in Colorado Springs, Colorado, Hey Harold. How can George and I help you? >> Okay, what's going on guys, thanks for taking my call. I'll make it really brief.

I'm 70, get to be 71, still working full time. Been there for 20 years.

I blown all my money all over the years.

But the traveling, going different countries, confidence. I started listening to you guys when I was 62, 63. >> Okay, and I'm totally out of debt. I have no debt in my house paid off. I have credit cards, no, I don't owe anything.

I have no personal debt. Nothing on wheels as Dave says. I have no debt on wheels at all. >> Okay. >> But I'm frustrated because I've lived a like Dave says,

so you spend like you're in Congress today. I just went out and had a primary approach. I live in your best life. >> I am, and I don't know what I'm going to die right next week. >> I'm sure that.

>> But you have nothing saved, Harold? >> No, not really. No, no. I was using nothing to speak about. I make at $3500 a month, I'm so scared to eat another $3500 a month from Costco where I work.

>> Are you full time with your hours like? >> Yeah, I'm full time. I had a chance I went part time for a little while, but I'm working because of my benefits are so great there that. >> Yeah, Costco crashes the game on the benefit side.

>> Are you investing, are you investing 15% at the very least, Harold, of that 7,000 that you're bringing in? >> You know what, I'm not. You know, I have, I have my four, one of my Roth at Costco for the last 20 years.

“And I know there's some money there, but how much is it?”

>> No, I think it's $663,000. >> Okay. >> That's not enough. >> But I mean, it's nothing that I pull out or use, because I'm at a point in my life, you guys, maybe it's psychological, but I feel like I'm going insane because it's like, what do I do with my life now, I'm just working, I have my dogs.

>> Are you healthy? >> I don't know what to do, you know, are you healthy? >> I'm a little chunky for me and so darn good, but. >> Listen, that's all right. You have a family, do you have green kids?

>> Why? >> They're significant. >> No, they're all gone, they're out of state, they're in Virginia, they're all successful. You know, they're all, my son's been in the Air Force for 20, some years, and all my grandkids. >> But you have good relationships, do you have good relationships with them? >> Okay. >> Yeah.

>> So you're not alone, you're not alone, you're just, you're just chilling. You're in this weird sort of purgatory herald, where you're not like rich, but you're not broke. And so I think you just haven't really taken the time to create a vision for what you want this sort of quarter to look like of your life. To go, okay, what does it look like?

Is it me working full time? Do I want to travel more? Do I want to go see family? Do I want to pick up a hobby? Start a business?

It sounds like you're sort of itching for some, some purpose. Something you can sink your teeth into. >> Yeah, it's not the life I'm just sitting around the house with my dogs. You know, like endlessly working on the yards because I have a huge yard and stuff.

I'm always out there, like, you know, mowing, pulling weeds, cutting the bushes.

And I just, so, I think what it is. >> I mean this kid, and yeah, I'm anxious. And I, so like, I want to do stuff, you know?

“And if you could snap your fingers, what would you be doing?”

If we just said, you, hey, you have a genie in front of you, you know, do the little I-Dream of Genie thing, and you can have what it is that you want. What would that look like? Would that be, I no longer work at Costco? Would it be, I live closer to family?

Would it be, I moved overseas? What would that be? >> You know, definitely not living close to family, because I think that's when you start taking on all their responsibilities and their needs and stuff you get. >> Yeah, you got to watch the grandkids.

That's a real drag, man. But I myself would probably be on a beach down a plate of Carmen somewhere. >> Okay. >> Who are the drink of my dad? I don't know.

That's how immature I am. >> No, that's not immature. It's not immature. >> I just have energy at 70 ha. I don't have it now at 37.

So I pray I get some later on. >> You need something to aim at.

“I think that's what George is getting at, and that's what I'm getting at too.”

And we can do that.

down by the beach to get myself a little condo. Maybe I moved down to Mexico. Let's put that on the board and let's start working towards that. What must be true in order for that to be the case? What age do we want that to happen at?

How much money in the bank would make you feel secure, right? And even if you don't ever do it because you get down the line, you go, you know, I actually didn't want to do that. I just loved dreaming about, I love thinking about it. That's also fine.

>> But I used this now just, well, I was just unwilling,

versus I regret never figuring it out.

>> Exactly. >> So you might make a list of, here's the things I want to stop doing ideally. These are things that are draining me, here's what I want to start doing, and for you that might be,

I delegate the lawnwork for 300 bucks a month. Someone else can deal with it, because it does not fill my tank. It does not reduce my anxiety. I'm going to throw in a spa day here or there, and then that's going to factor into a real budget.

“So now you need to figure out, can I sustain the life I want”

without needing to keep this full-time job? >> Yeah, and the thing that must be true for you is starting today, you do need to start investing 15%. Because a day is going to come when you let that cost-go job go, and you're going to want to replace that $3,500 a month.

You're going to want to draw whatever that is, you know, $30,000 a year off of your next egg, $35,000 a year off that nest egg to kind of take the place of that money. And so by you investing, that's going to make sure that money is there for you to do just that. >> Yeah.

Now, I listen to you guys every day, sleep, and I don't see a lot of cars, you know, that are in that position of man, I'm old, and I'm still working, what the heck do I do? >> You know what I'm saying? Because it gets scary, it becomes what he's scared of.

>> You know, I don't know, but you can never stop.

>> Yeah, yeah, because I'm 70 and I'm like, I live working with the people that I do, and I enjoy the interaction with the employees, and my neighbors, and you know. >> And I think you need that for your mental health. I think you need interaction.

I think you need purpose.

“I think you need to be using skills and using your talents.”

I think that's has to be a part of life no matter if you're working at nine to five or you're volunteering or you're mentoring someone. You just need to use your functions and your devices. And I think that's what you, I don't know, but based off of what you're saying, I think you're afraid that if you let this job go,

that's like the beginning of the end, and it's kind of a downward spiral from there on. And so just tonight, I think Harold, I think two things are your homework, and these are going to be things that you look at for the rest of the week and into the weekend. Number one, start playing out that dream of moving to play at El Carmen.

And what does it look like?

Would you be willing to sell your house? Start looking online at what little properties look like. Get some numbers and put some real vision to what that is. And then you can actually decide, do I really want this or do I not? That's thing one.

And then thing two, I'm actually going to give you, can Coleman's book find the work you're wired to do, because I think that you deserve to know exactly how you're wired, what your skills are, what you enjoy to do, and how you can kind of filter that into other activities.

Maybe it's not just working at Costco. Maybe you get involved in a local ministry. Maybe you start volunteering at a school or at a hospital. Whatever that is, you just need to get into the game and start using your personality, because George, this guy's got a great personality.

I can tell you that. I want to hang with Harold. I'm going to be honest. Yeah, you sound like a good time. You sound like, listen, at the family reunion.

He's the one that everybody's talking to. But the key here is, I want you working because you want to, not because you have to. That work optionality changes your life. Yeah, agree.

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“Well, we're going back to the phone lines where we have Eduardo in San Antonio, Texas.”

Hi, Eduardo. How can George and I help today?

Hello, I had a question. My question is BAs, I have $200,000 in bad debt. When is it okay to give up on my credit? Give up on your credit or give up on the debt on paying off the debt. I guess it'd be both because I guess the credit would go bad

after giving up for, you know, let's say I get my chart get re-bode or the credit card going to collections. I see. So, I'll try to answer your question.

When you make the choice to begin paying off debt and closing accounts,

your credit does get bad before it completely goes away. And once it completely goes away, that's actually a really good thing. Because a zero credit score is the same as a very good credit score. The hard part is watching that number tick down because as you're paying them off and as you're closing those accounts, the factors that are used to measure your credit score, they start to

disappear, right? And so that's kind of what's going to happen naturally.

“That's what happened to me. That's what happened to George. And that's not a bad thing.”

But what you're talking about, I think, is a bad thing because what you're saying is, hey, I'm kind of just giving up on this entire process. I want to do a voluntary repo. I don't want to even fool with this anymore. And I think that we can help you curtail that a little bit and do it the correct way. How old are you? 23? How did you get into 200 grand in debt by 23? What happened?

So, um, when I was 18, I got my first credit card secured. I was like, you know, gave me

about $200 down and after that I became $23,000 and then after that I applied for another one and became six. And I had a business at the time where I would just kind of use the credit and pay it off. But after a while, I just kind of added up in somehow I got to $25,000 in credit card debt and then later on, I ended up buying myself a truck to do hot shots because that was like the only way at the time to kind of, you know, do anything for myself because I couldn't get a job.

Why can you get a job? I guess I have a criminal piece of past because I had a Mustang at the time when I was young and I evaded a rest and I got a rest for that. And that basically shut down all my chances to go out there and do anything. So you're thinking that it's actually started business. What type of business did you start? What type of business did you start?

“I'm also trying to do anything because they see the passive income as the best thing but that was not”

you even close to positive income. Sure, yeah. I was doing another electrician for a good while, but I couldn't get into every single place. I was working in Tesla but then I got a job in Google and they declined me. What are you doing today? I'm a truck driver. Okay, is it, are you working for a company or do you own the truck? How is it set up for you? So I get 25% of what it comes in and I work for a company. Okay, all right. And what do you earn?

What do you take home every month doing that job? Your portion after expenses? So weekly I did 2500 monthly. I would say around 8000 to 10000. Okay, great. And is it just you or do you have a family and children? I have a wife and a kid. Okay, and does she work? And she did not. Okay, how old is the kid? One year? Okay, so she's home with the one year old. All right. And if you broke down the debts, how much of this is credit card debt versus the

truck loans break that down? So $25,000 is credit card debt. $70,000 is my, my chart debt. And then 35,000 is my fiance's card debt. And then 60,000 is around my house debt. Okay, so we're not going to count the mortgage right now. You're talking about a mortgage. Yeah, I have equity in it. Uh, the towards the run 180, the stinging of selling it to get out of this, but no, I don't know if you sell a car in the truck before I house. Yeah, because the house, that's just a mortgage debt. It's not a he lock or anything,

the very first places I would start that half your debt has gone immediately. And so let's move

the mortgage out of this. That brings your debt down to 140 in consumer debt. We get rid of the cars that gets rid of 105, right? Uh-huh. This is a solvable problem now. We just went from, I can't make my payments to, oh my gosh, I'm almost debt free by the end of the year. Yeah,

“what's that $70,000 truck worth if you maybe sold a private sale on Kelly Bluebook?”

Like 55. Okay. And what about the $35,000 car? Do you know what that might be worth? By like 20. What was the last time you checked? For the car, I haven't checked on it. I just bought it this year. Um, freezing being. Uh, we got kicked out of our, you know,

parent home pretty quickly. And she also, you know, was forced on like to get a car.

I was kind of forced up on me that I need to, she need to have a car in case of any emergency that she needs to be. And she was forced against a wall by $40,000. I'm a cut through that because that's some BS. Yeah. Everybody needs everybody needs a car, but he ain't need to get a $35,000 car. Let's just be like you could have gotten a $10,000. You could have gotten a $12,000. So like those are the things that I want you to internalize and go, I needed to solve a problem. I did not need

“to go to that extreme because that's the only thing that's going to save you going forward.”

You've got to look at some of the choices you've made and go, why did I do that and why did I go to

that extreme? Because going forward, you and you and your wife both, you're going to have to

stop and think in a different way going forward. Otherwise, you're going to start to repeat the same things for the same reasons. What we needed a car, what we needed to do this and all those things are needs. You needed to get a job. You needed to probably come up with something smart to do. That was different because of your record. She needed a vehicle. I understand that, but we have to not go to the greatest extreme on it. Does that make sense? Yeah. Yes. Okay. So to George's point,

let's keep looking at these cars. So back to the $35,000 car. Let's check tonight and see what it's worth because, you know, obviously for the call today, I appreciate the guests, but let's get the real solid numbers. Really on each of these vehicles, because that's the ticket to you guys truly getting free on this and doing it quickly. You'll see the private party value on Kelly Bluebook, check Carvana and Carmax and all the others to see what they would offer you for these vehicles.

“Then at least you know the amount you need to cover that you're underwater on.”

Right. Let's say it's 24,000. I checked the truck yesterday and it was 50,000 with the offer. I mean, a dealer trading. Okay. Yeah, dealer trading is going to be the worst offer ever. So I'm not, we're not looking for a dealer trade in at the local dealership that's selling brand new cars. Private, private sale. Yeah. So what would it sell for on Facebook or auto trader? And then what would Carmax or Carvana give you for it, which is likely going to be higher than a normal dealer

trade in? Okay. And then whenever it's time that, you know, so how does that work? Do you have to like just pay it out of pocket? Whatever. You need to come out of the difference. Some people go to the local credit union and get the difference as a personal loan. As just an unsecured loan and some people will save up the difference. Now with your income, if you really hunker down, making 10 grand a month, you could save up 24 grand pretty quickly. Yeah. Or at the very least save

up the difference on one of the cars. You see them saying? Yeah, one painter that I could so like I said, I was doing a lot shots for a bit and it trailers worth around 10,000. Oh, perfect. Okay. And it's paid all costs. Yeah. So let's do that. Let's sell the trailer that gives you the 10k. That's probably, I'm not to get you out of the car. Yeah. Now what's your wife's car payment? 750. Now imagine you got a $750 raise every month and your net take home pay that you can now apply

to your other debts or use that to save up for the underwater difference on the truck. Now we're starting to get some momentum. So you went from your back against the wall to should I let this car get repoed to, oh, we can, we can do this. Yeah. The thing that's missing and it's not just for Eduardo, it's the nuts and bolts of what it takes to get out of an underwater vehicle and George said it beautifully. If you can get a loan from a credit union, I love that. I don't care where you

get the money. If you get the loan, the point is we're going from $70,000 in debt to maybe $10,000 or even 15 or 20,000. But that's going backwards. We want the debt to go down and as long as you're doing that, we're okay with you doing this. The point is you're freeing up payments up into the tune of 750, $800 a month in car payments. That's a big money.

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agent who has your best interest at heart for free at RamsaySolutions.com/Agent or you can click the link in the description if you're listening on YouTube or podcast. Caleb is in Little Rock Ark and Saw High Caleb. What's going on? Hello there, man. I'm on step two of the baby steps. You know, the debt snowball. And I'm actually treating it more than an adult. I'm the my smallest debt is also my highest

interest rate. So, but anyways, all I have is $50,000 instead of loan debt, right? And the highest interest rate on it is five percent. It's several different loans but the highest one is five point zero two percent. And I'm likely going to have some changes with my housing situation soon. I've been staying with my grandmother taking care of her for the past three years. And there's a good chance that she may have to move to a place with higher amounts of care

“or, you know, God forbid you should anything happen to her. I will need to find a new place to live.”

At the same time, my vehicle has also started trying to go out on me. My question is this, the $1,000 that I saved up for the emergency fund. I do not think it will remotely cover a vehicle repair replacement or, you know, temporary housing law find something long term. Right. Should I postpone the baby step two until I get, you know, maybe at least two or three months worth of income saved up. And that way, I won't have, you know, I won't be up against the wall.

Should one of those two eventualities take place. Yeah, I hear two things here. I do hear a bit of a storm mode, which is kind of what we would call a situation in life that things are changing, whether it's a job loss. It's a move that's coming up. A lot of times when people are pregnant and having babies or if there's a diagnosis, all those things kind of cause us to put things on pause while we stack up the cash that we need to endure that next season. There's a couple of things

I hear, though, when it comes to car repairs. And I want to say this to you, Caleb, but I want to say this to the broader audience that's listening, emergencies are considered things that are unexpected, things that are completely necessary, and things that are needed, like within a specific time. When it comes to cars, regular maintenance, or when we know we drive an older vehicle, those are things that we want to be putting aside money monthly, like a sinking fund.

We just know there's a maintenance line item on our budget. And that way, when something happens, it's not like, oh my gosh, it's an emergency. So that's just a little tidbit there. But let's talk about the temporary housing situation. How much time do you think you have left with your grandma in her residence? Most likely, probably, six, eight months. I would say at least, granted she's not in three, so that could change any time. But, you know,

unfortunately, it'll be a good, at least six months. And what happens to her residents if she were to God forbid, if she were to pass away, or if she were to go into like an assisted living, what's the plan for that home? It will most likely be sold by my father and my aunt's. Got it. Okay,

more about that. No, ma'am, I work at a state park. I'm actually not in a little rock. I'm about 120 miles south of there. That's just the only place anyone would know. I'm in the middle of nowhere. My job with Arkansas State Parks, I've worked with him for 12 years. And realistically, one step above my current position, it comes with housing about a 20% pay boost. And, you know,

“how do we get that expected? Well, you have to be picked for at the very least one of the”

tiny programs, which is one of the reasons that I'm, you know, looking a little harder at the future now because I was turned down from a six time yesterday. Man, I'm sorry. Do you know why you

were turned down? Do they tell you? Um, Jeff and the first one they said, my qualifications,

you know, they were excellent, but I lacked a more managerial experience. So I worked, my current job is, you know, I'm a facility manager and I have employees underneath me. So I'll work that for another year. The next time they said yes, the management experience is good now. You need more maintenance experience. And should then I got my supervisor to agreed to let me work two days a week with maintenance. Okay. Got all that. And the next time, they said, well, you need more maintenance experience.

So I did that for another six months. And then this time, they wouldn't even give me a reason. Well, well, I'm sorry. Well, we'll go to cost to rent around you. Let's say that wasn't an

option and you got to get out of grandma's. We'll go to cost to rent somewhere, whether it's on your

own, or whether roommate. Realistically, the town that I'm in, there's only, uh, the only place and I understand strengths, the town of about 800 people. And that's including the dogs and cats. The only place to rent is low income housing, which, for my $42,000 a year income would hit me about $800 a month. And that's just down to you. You know, it's no, no movement forward in life. No, that's not true. No, no, let's, let's talk there because I'm, and I'm glad that you said that

because I, I want to challenge that belief. Renting is not down the tubes. Renting is a fabulous option that prepares you for being able to buy. It's, it's a preparation deal. It's not down the

“tubes because the truth is the opposite is, oh, I'll just buy a house and I won't have enough money”

for repairs and I won't have enough money if property taxes go up next year. And I'll be house

pouring and my payments goes to interest. Yeah, so, yeah, trust me. And this is coming from Caleb. My husband and I rented for 10 years while we saved up and paid off debt and saved up a down payment. And I don't regret it one bit. I'm 42 years old now. I don't look back and go, oh my gosh, I can't believe I rented for 10 years. I go thank God. I rented for 10 years. So I just want to, but that kind of put that in your back pocket and think about that later. But the $800 a month,

I think that's a fantastic price number one. And if that's the only option, I don't think it's a bad thing. And it's not forever. This might be for six months, 12 months while we get some financial footing, get the emergency fund, you know, start saving up for a down payment. Because I imagine if it's a small town housing isn't super expensive if you were to buy your own place. It just depends. The big problem is that it's a farming community. And so a lot of migrant workers

come in in the summer, which means that anything that's cheap and easy to put people in, gets bought up by fairly large farmers. And then anything that's into your level home, wants it being $100,000. Okay. So what you're talking about now is just, it's almost the logistics that anybody has to decide about in life, right? So the career that you've chosen has put you in this location.

The question I'd say to you is, okay, you're doing this in little rock Arkansas. What does it

“look like for you to go to another place where there's national parks and do the same job there?”

And you get a promotion and be able to afford your life, right? Because right now you're sort of stuck on your own volition gone. Well, this is the only job I can find. The only place I can live. And that's not true. Yeah. Well, you see, and that's the reason that I did a cloth for all those promotions because every single one of those would have had me traveling the entire state for about you know, two years. Right. But we're saying Kayla. I finished it. They would move me to another place

likely better opportunity. Where saying is there a way? Is it just one tube of opportunity or is there a way that you're like, you know what? Forget the state of Arkansas. I'm going to go to the state of

I don't know your career field, but I'm just wondering with your degree and what with your expertise, it seems like you could go to another state. Maybe there's some training involved. Maybe there's, you know, some things would have you. But I don't want you to think that you're up against

“and back into a corner because George and I see options. Yeah. And I would definitely, if you want to”

save up to cover the repair, get some actual facts. I want this repair is going to cost. Let's pause maybe step two and save up for that. But let's not just saving definitely

three months of expenses just in case. Let's get some facts and figures first. Yeah.

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Georgia and I help today? Good afternoon. Thanks for taking my call. Yeah, you bet. Draw, I'm looking for your thoughts on the following situation. My wife and I retired in our mid-70s. Do well financially. We have two children who are married each has two grandchildren and we're wondering about should we start giving you money now when the kids are in the grandkids are small rather than waiting for inheritance someday. I love this idea, Bill. And I'm going to speak on

“behalf of your kids and say they would love it too. Now are they doing well financially on their own?”

Yeah, they're all doing pretty well. Nice. What's your net worth?

About five million. Fantastic. You guys have done an awesome job.

Way to go, Bill. And what is this like break that down for us? How much of this is your primary residence? Do you have properties? Is it all retirement accounts? It's basically all retirement accounts. Fantastic. How much do you want to give? And do you want to give to something specific? Like buy them a thing or is it just here's money? Do what you want with it? You know, the last few years, we've been giving them $15,000 at Christmas,

something extra. And we're probably going to kick that up a little bit more, maybe $20,000 a year. Wow. Awesome. Well, you can give. I mean, without even having to file a form with the IRS for gift tax, you can give each kid 38 grand between you and your wife. So you can at least give

“up to that amount if you want to do a straight cash gift. But I would, you know, talk to them”

about it and see, hey, what, what are the current needs? What could really help you guys out? Is it an experience? Do we just take them on a great cruise once a year internationally with the grandkids? Or do you want to just give them cash to help bolster savings or call replacement funds? Okay. Great. Yeah. I, you know, we've been kind of talking about this and, you know, we've been fortunate in our lives. And we just don't want to wait till we die and they haven't both could

buy a cash. Yeah. I love that. Well, there's an old saying, you know, better to give with a warm hand than a cold one. And it's a dark. It's a dark. It's dark. But I like the idea. You know, you want to see your kids thrive and enjoy this money while you're alive versus, well, once they're in their 60s and I'm 95. Yes, sure. They'll, they'll get some inheritance to do what they want with. The best time is when your kids could use a leg up when they're raising young kids. Yes.

Things are expensive, daycares, expect everything's expensive, especially for those in the, you know,

will go into this. It's not a ramsy book, but it'll help you think about this in a different way. It's called die with zero. Again, sounds very dramatic, but the idea is you don't need to go

into the afterlife with 28 million dollars if you don't want to. Yeah. I can spend it while your

life. I love that idea. A little bit of both is great. You know, there's an inheritance there when you pass away, but if you're able to give while everybody's alive and kicking and can enjoy it in their youth. I mean, that's my plan, at least. Yeah. Any goal is set them up so well to where they don't even want the inheritance. Like, we're good, man. Yeah. Yeah. I think the line is you want them to still be productive human beings and feel like I don't. I'm not relying

on this money to take the place of my own productivity. If you give it to someone who is not managing money well, they're just going to manage more money terribly. Yeah. So you want to make

“sure. That's why I always ask. Are they? Are they doing well? Are they? Yes. You know, they're”

not in crippling debt and going further into it. Are they working full time? So there's some good pieces there to say, what's the work ethic like? What's the current family dynamic like? Before you just go hand a pile of money over. I agree with that. Great question. Thank you so much Bill and well done. Next we've got Marsha, who's in Tallahassee, Florida. Hey, Marsha, you're on the line. Hi, thank you, my call. Yes, man. How can we help? Well, I have a couple

questions. Um, with fire. I've been through some situations. So now I'm defailed basically. And

I'm dealing with a six income. But I do have some debt. And I'm trying to figure out how to get out of it and following the plans that you guys set up. And I've been trying to put money away and paying off the credit cards that I have. But I still have like a personal loan. And I have some money saved. And I'm wondering if I should use that money to pay off some of these things. And then just maybe start some scratch even though my income is not going to change. What is your

“income? Your fixed income? Um, about 74, 75,000 a year. Okay. What's that breakdown every month?”

I have a mortgage. So, um, take home off spending about $6,000. About $6,000. Okay. And you mentioned

some credit card debt. How much is credit card debt? And how much is personal loan debt?

I have a 30,000 personal loan debt. I've paid it down to that. And then I have about $8,000 just very card. Okay. And there's no more debt. That's, that's the only two. Okay. What's left on the mortgage? Um, I have $255 left on the mortgage. $250,000. Yeah. I have some equity in there. Are you living alone or are you family? I'm living alone. Okay. And how old are you? I think I don't know if I missed that. And I said

you're retired. Oh, I'm 65. 63. Okay. What's the nature of the disability? Um, military? Okay. Because I'm wondering, you know, do you have a skill set and experience where you could actually go make more than the disabilities offering you to, if you wanted to get out of this thing faster? Um, I can't know. Mobility wise. I'm having to catch that way. Okay. Understood. Um, now you didn't mention you had some money saved. How much non-retirement money

do you have saved? Well, um, but I have $20,000 in a, like a mutual fund. Plus an IRA. And I have, um, I say about $18,000 just like in regular savings. Okay. So $1800 in savings. Did you say the $20,000 was in the IRA? It's in the mutual fund and IRA. I have about $5,000 in IRA. Okay.

“Okay. Yeah. And the other's just in a mutual fund, a brokerage account. Yes. About 15,000?”

Yeah. Okay. Okay. So you're right. There is some money at your disposal to kind of start cleaning some of this up. I would keep the $1800 in savings. I'd probably drop it down to $1000 and just keep that as a starter. Um, emergency fund. It's just there in case something pops up that is unexpected and you need a little buffer there. Uh, that'll keep you from running to a credit card, right? But then that leaves you 15 almost $16,000 that we can start. We can fully knock out the

credit cards, right? We can knock out all $8,000 of those. And now you've got another $8,000 that you can throw towards these personal loans. And so you could begin to clear that out. Uh, do you know off the top of your head what you were paying each month onto those credit cards to pay the minimums?

off those credit cards today, essentially, now you've got a $1,000 back in your month to month

“budget, uh, that you can put towards paying off the remainder of the private loans.”

Or personal loans. Okay. Now let's get back to what George was saying because I do wonder, you didn't mention that your mobility was down, uh, but everything else seems to be intact. I would be curious. And it might just be something that fills up your, you know, personal time, too. Just to see what other skills, what other things that might interest you that you can do with your time. Because it is important for all of us to do some sort of work that matters and have that

sense of purpose every single morning. Um, and obviously the benefit to that is we can make some money in the process. And in your case, it would really, really help. Because I'll tell you what I envision for you, Marisha, is to look up and have this mortgage paid off one day when you're ready to fully retire. And when you've said, you know what, I'm just not working anymore. I'm hitting that age. I would love for that mortgage to be off of your plate. Have you thought about that?

Yeah, I do. I do think about that. I like this plan. Do you have, is this VA disability?

“What kind is it? Yeah. Okay. Because you should be able to, to work part time with no earnings”

limit if you can do something and that's not physical. And that could help me this up if you're looking for ways. Otherwise, you're going to go with the current pace you are, try to bring your expenses as low as you can. But we can't pull the other lever, which is income. Yeah, that's right. So this is just going to take a while if we don't pull one of these other levers on the expense or income side, you just got to make the budget and go, all right. It's going to take a couple of

years to get out of this thing. The good news is you have that disability locked in. [Music] As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business. We wasted too

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like when you're talking to a member of your team. And right now, you can try NetSuite next for free. If your revenue is at least seven figures, go to netSuite.ai/RAMsey. That's netSuite.ai/RAMsey. Well, welcome back to the Ramsey Show here in the Fairwins Credit Union Studio continuing to take calls about your life and your money, where we have miles whose in Bismarck, North Dakota, on the line. Hey, miles, how can George and I help out? Hey, guys, how you doing? I got a question

about my mortgage. First off, let me say, five kids married. I got a single income. I wonder if I should

refinance my house. I have about $100,000 left on it in order just to have some more cash flow during the month. Oh, my kids are still young. My oldest is 16. So I just want to enjoy time with them as much as I can. When you say refire, are you trying to get a lower interest rate or are you thinking about like recasting it so that you can get a lower payment on the same terms? I would refinance to a 30 year amount of 15 year right now. And then the interest rate would be a little higher,

but my monthly payment would be cut at least in half. I don't love that idea. Are we thinking about cutting the payment in half because it's too much of your take on pay? We have some money left over at the end of the month, probably saving like maybe $1,000 a month. My thoughts are my kids are getting

older just to have more wiggle room at the end of the month that's basically my thought on it. Tell us

what you're bringing home every month and then tell us how much the mortgage is. I'll bring it home between about $6,000 a month after taxes and everything's taken out mortgages with taxes and all that

at home, so I'm thinking there's no day care costs or are there? Nope. Why is that home? She homeschools are five children. Just maybe I don't know. Have a little money anxiety. Are we both doing a fine answer together? But I would say I'm the main one that works over the numbers on a regular basis and maybe too much. Are you investing right now? Do you guys have other debt? We don't have any debt other than our mortgage? Right. And I am investing. I have some money in a money market account

and money in the end to expand and then my 401k. How much are you investing as a percentage of your total income right now? I do 4% in my 401k. I work for a major railway so they take out,

they don't take out so security they take out two different tiers of retirement and that second

tier is about an extra 5% compared to normal American. Okay. So you're only investing 4% of your household income right now? Yeah, outside of that extra tier 2 that railroad takes out. Okay. And that creates sort of a pension for you? Correct. Yeah. Okay. I'd love if you were investing. I mean truthfully assuming that you've got some money saved and I'll ask about that in a minute. A truthful I'd love for you to be closer to 15% that you're saving of your income. So that'd be around $900 a month,

probably a little bit more if we took it off the gross. So I'm wondering what's creating the squeeze on your budget that's causing you to consider refinancing from a 15 year to a 30 year because that's

pretty drastic and to be fair it's going in the wrong direction. And so something is causing you to

really consider like a drastic measure and almost doing something I'm going to call foolish, not that you're a fool, but it's a very drastic backward. Yeah. The whole goal in the show is to help

“you build wealth and we found the best way to do that is to get debt-free as soon as possible,”

house and everything. Two have as much margin as possible. So if you call it in saying, hey, I've got a car payment, it's 500 bucks a month over three years. If I refinance to a six year loan, I can get the payment down to 300 bucks. We'd all agree, that's a bad solution. And so we're trying to find another solution, which is you got 4,600 bucks coming in

outside of the mortgage payment, where is all that money going? Can we squeeze some more money out of

that? And then let's actually put down on paper, what are the goals with this extra $1,000? Because if it's just all feel better emotionally, that may or may not be true. But if you go, I want a vacation with the kids once a year, it's going to be six grand. Great. Now we know, let's set aside 500 bucks a month. Or is it kids college? Do you have some that are coming

“up that are getting to the age where they're starting to think about university or college?”

My oldest is 16. She doesn't have an interest in college. I guess what we do is kind of just throw all the money into our money market account every month. We don't have a designated college fund. Okay. How much is in there? About 32,000 in a money market and another 14,000 in the next fund? Is that outside of an emergency fund? The money market would be my index or excuse me, my emergency fund. Okay. Now, so I have another 10,000 in a regular savings. Okay. Okay. Good.

So you've got some good money saved. You are thinking about education and putting some money there. I was a little confused though, because I almost sounded like the college fund was the emergency fund. Well, I would say to the emergency fund is like the money market is 32,000 and that 14,000 in the index fund would be above and beyond my emergency fund. And is that your market for college? I think we need to put some parameters around what this money is. So I would say and you jump

and tell me if I'm wrong. I agree 32,000 emergency fund. Then you said you had an additional 10,000 saved. That was kind of on top of that. We need to earmark what's that money for. And then you said

“you had 14,000 in an index fund. I'm almost wondering if you should take, you've got five kids.”

I'm wondering if you should take that additional 10,000 at it to the 14,000 and call that kid's college fund. Okay. We are our vehicles or kind of getting older too. So I have that on the horizon of saving out for a vehicle. Okay. I just said I really like a slash fund. Well, well, I don't mind. Listen, I don't mind if you said, hey, no, Jade, let's keep the 10,000 and that's couldn't be our vehicle fund. I'm fine with that. I just think we have to put very clear markers on what this money is for. Number one,

it's going to make you feel better. It's going to give you guys some organization. And it's going to make you feel like, okay, I'm being very intentional about this to your point. What you said when it feels like a slush fund is when it feels like anything goes. Nothing's really solid. Sort of floating.

let's say $10,000 vehicle fund, 14,000 index fund and that's for kids college. And at this point, where you are in the baby steps, which is our overarching plan for your money, where you are right now, miles is let's bump up and I know this is against your feelings right now because you're feeling like things are tight. But let's bump up the investing to 15%. Let's say, hey, on top of the 14,000 in the index fund, what would it look like if we continue to put another $150 or maybe $200 a month in there?

And then instead of going backwards on the mortgage, what would it look like if we just continue to make the payment and maybe we threw, whether it's quarterly, whether it's once a year, maybe we aim for an extra payment every year. However, we want to break that up. And that's you going in the right

“direction. But I think what would really help, and I don't know if you have one, are you guys on a budget?”

Yeah, I have a written budget on just like on a notes app on my phone that we go over every month, but it's not hard and fast. Yeah, the hard thing about that, I love that you have that because it's a great place to start. But the tough thing about that is you, you're not able to track your transactions in real time, so you can't really see if you're off track. And if you are off track, then it's not till the end of the month where you go, oh crap, we're $1,000 over, or oh, you know,

we should have had money left over where to go. Yeah. That's where the budget comes in apply. So miles, hang on the line, we're going to gift you every dollar, the premium version for the next year, so you can connect your accounts and get a real plan with your wife going, listen, we're going to

“have a thousand bucks left over, because we are going to be in control of our money. Yeah.”

. Hey guys, it's Rachel Cruz. If you're working the baby steps,

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Okay. Jordan and I own a home on 15 acres. And it was kind of always our dream.

But now I'm to the point where I want to sell and Jordan wants to stay. Okay, the dream changed. What caused it to change for you, Taylor? I have lost my job a couple of times in the last few years. One was a long termination. And then one was my last place of employment that's out being gutsy. And we closed unexpectedly. And I'd always been the high earner. Jordan always had a more blue collar job that allows

more time to spend with our daughter. And then he carries really good benefits for us.

Okay. So it's always really worked out. But I've always been the high earner. So

when I've lost those jobs and with the amount of debt that we have, it's really impacted things. And you feel it? I've always just, yeah, I'm feeling it that. And I've always just figured out a way to make it work and now I'm tired. I can understand that. So and it's no shade on Jordan, but you're literally feeling the weight of the household on your shoulders. Yes. And one thing changes and it's like crushing.

Okay. Um, what's the current incomes?

lost my job again. Um, I'm expected to earn about 137. Awesome. And I used to earn 200 though.

“So that's the reason for this call. What time is it Jordan?”

I work in automotive, automotive management. Okay. And what is Jordan doing? Now I work for the post office and I'm close about 65. Okay. Okay. Great. So still over 200,000 household income, which is fantastic. How much consumer debt do you guys have? Um, 190 to including vehicles. Okay. Tell us about the vehicles.

So the vehicles, um, so I used to always have a demo of vehicle provided for me and when I lost my job,

I no longer had a vehicle. So I bought a Chevy track, um, because they had 0% interest and it was a 500 dollar payment and it could get me, I'm driving an hour to work now. Would you pay for it? I bought

“28,000. Okay. 28. Okay. And then what other, any other vehicles?”

And then Jordan has a vehicle that we owe 42,000, it's an F-150. Okay. F-150, anything else? Um, we have a tractor. Okay. You need that. Yes. It's 20,000 that we have left on that. Okay. We have $3,000 left on a lawnmower. Okay.

We have $7,500 left on vending machines that I'm currently trying to sell. So in my last dealership,

we owned the vending machines in the company. So when it closed, obviously I sold one of them. I have two more to sell. And I think that would pay off the remainder of the loan that's owed on them. How quickly can you sell those? I don't know much about that. Maybe you can educate me a bit on that. I should just post it in like four weeks ago. I've sold one and I'm trying as hard as I can to get to other two sold. I'm like $7,000 on the loan. I'm thinking, I mean, even if I can take six for it,

I, you know, I'm willing to do that just to get them gone and get a payment gone. Okay. And you said the total was $7,000. Did I hear that right? Yes. $7,000 that we owe. Okay. $7,000 that you own. So we still got $92,000 to go. What else is there? What's the damper? Canper? Canper. Yeah. So we have $9700 on a camper that we know longer on because I, we weren't using it. So I tried renting it out to make income to try and be off it. Mm-hmm. And someone told us, told us it. Oh, and they left it still left me with a payment on it.

There was no insurance. Okay. It out. The insurance didn't pay the full value of the camper.

“Okay. And I won't ask more questions on that. Okay. Anything else? Because I think we're still missing quite a bit here.”

We're about 80. Okay. $11,000. Okay. We owe a little over 2,000 on student loans intuition. Okay. And then the rest is credit card debt. Our total is like $197. Actually. Wow. Okay. And the rest is just credit card debt. And this is all while you guys have been making six figures or more. Yeah. Yes. And I just I can't I can't catch up. It doesn't matter how much I make. Well, here's the good news is you guys have a great income. You got a lot of land. You could get

out of this fairly quickly. The bad news is selling this piece of land alone is not going to change any of the behavior that got us here. Yeah. And behavior hasn't changed until probably recently. Very recently. Okay. Has the behavior change? Well, you owe on all of this property and what's it worth? We so last year to pray at 6.95. I think I could probably list it for 7.15 maybe.

I am working on my real estate license. It's just always been something I kind of wanted to do.

So I was thinking if I had my license, then I wouldn't have to pay real estate fees if I sold it. And I could keep more of the money. Maybe. But I don't know about that. I think I'd want somebody who's been doing this for a long time to make sure you're getting the best price and they're not missing anything. And you're pretty close to the transaction because it's your own property. So that could also muddy the waters and make things a little emotional. What did you

could hurt you? What do you currently owe on it? We know what it's worth 7.15. But what do you guys currently owe? We owe 4.53 on the primary mortgage and we owe 120 on the heat lock. The contractor went

rid of a certain amount of land and make this more manageable for us but keep the house. Is that

possible? No. Not the way that it's parcel is in the way that there's an inform the property and stuff for the farmers behind us. So it won't work. And you're positive. Has anybody else looked at it? I might add that to my due diligence list just to make sure you know it's easy sometimes to make assumptions and they need to find something that's like oh great like I didn't know. I trust what you're saying but just because we're talking about big numbers and big decisions

I would do some due diligence on that but I agree with George. I don't think selling this land

“at this point is necessary. Leave the key to you guys getting out of debt. I think it is a”

behavioral thing. However long term you might find that there is a lot of just emotional maintenance that's attached to this. So you might sell it for those reasons but that would not I would not sell it to get out of debt if that makes sense. I might sell it to simplify my life but it's not the key to you getting out of debt. Is that fair? Yeah. I don't see the way out whenever like after I accepted this job now we are $2500

upside down every month to make minimums. So the money that I have in our checking account is going to go quickly. I'm not going to be able to make it. I don't have enough funds to cover the monthly payments. Okay and what is the payment on the mortgage?

The first one is $2500. And then the heat lock payment is like $1200.

Yes, we're about $3700 to have your take home pay. Okay. So I mean the mortgage and heat lock is still a small part of everything else. All these toys, all the payments. So the goal is we got to focus on the IRS debt so that goes to the top of the debt snowball. But in the meantime let's try to sell everything that can be sold. Every car, every vehicle, every camper, every lawnmower and just start from scratch. And if you guys do that

then I would see where we're at three months from now to see if it's still an unsolvable problem where we need to sell this land and start fresh and clean up the debt. And I will say and you can

“stop me. I think I do hear that you do want to simplify your life. And I do think that the land”

and the mortgage is part of that. Is that fair to say? I don't mind the land. Like I know that Jordan loves to hunt it. But I want a simpler land. We can go hunt on someone else's land. Because now the dream that you both guys that you had is turned into a literal nightmare for you guys financially. This is not a blessing in your life. And it's okay to call a spade a spade and say we tried. We messed up. We made some decisions. Let's start over fresh. Fresh start. Yep. Do all of it.

I'm so all of it. A lot of banks are happy to hold your money. But Fairwins credit union helps you make progress.

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high-yield savings accounts to help you stay organized as you say for different goals. Plus early direct deposit and no monthly fees. And you get support from real people who want to help you win with money. You can even get the Ramsey debt is normal be weird debit card, which is linked to your free Fairwins spend smart checking account. To tell the world you think differently about money. So look, if you're working the baby steps, your bank should be helping you move towards financial

freedom, not just park your cash. Go to Fairwins.org/RAMsey to open your smart bundle and start making progress today. That's Fairwins.org/RAMsey. Ensured by the NCUA. Well, George, you had a really interesting weekend. Yeah, I'm a hustler, Jade. So I didn't get any breaks this weekend. Me and the whole YouTube team from my YouTube channel, we went to the world cup. Not one to the world cup, but outside the stadium, okay, because inquiring minds want to know

how much did people spend on this thing? I'm very curious. So we have to say and God bless our team. They stayed up to like 3 a.m. to get this video out by yesterday morning. So I want you to watch a clip from this. We'll drop the link to the whole episode. It's about 16 minutes worth

thing. Here's a taste, Jade. Okay. See what you think. How much do you guys spend on your

“world cup final ticket? Airvine. We spent 30, bro. Okay. So is that 15 apiece? 15 apiece. I'm going to”

offer bankruptcy after this. I'm calling my credit card. I'm saying this was never me. So you put it on a

single credit card. Yeah. So who's paying who? I've spent. Yeah. What's the interest rate on this credit card? I don't even want to think about it. What's your credit limit on those things? It's already max. After this it's max. Call you and make a came in. You know, you can't do this. They let me through. They let me through. I got happy to collect 25% on 30 grand. Exactly. Wow. Okay. How much you have in like checking right now? I'm not negative brother. Shut up. I've got no investments. I've got no

savings. I've sacrificed everything for my life to be here today. You know how much I check my face. There you go. Oh. That is just the scratch in the surface of my experience. I'm shook upside down. I don't even have a when he said 30 I was like 30 thousand. Yeah, there's a couple of zeros after that. And then the fact that his dog owes him 15,000 on 29.9%. I'm just this is going to go

bad very quickly. He's all I'm saying. Like I had second hand stress just talking to these people.

And here's the crazy part. There was only two camps. Guys like that who put it all on the credit card, super broke. And then there was the families who let's just say that some some general. So I'll rate just generosity. Okay. Either like a family member, grandpa covered the whole trip for all five of us from Spain. Oh, 80,000 dollars. So you know, a lot of these people were entrepreneurs, you know, their family has a company and they were able to afford this. Great. I love that for

all in cash. Absolutely. But then to the spectrum. But it still shocks me regardless of how you paid people paid anywhere. This is just from me talking to people anywhere from 4,000 to 15,000 dollars per ticket. And that's without flights lodging all of that. Okay, but school me because I don't follow World Cup. Was that just do you see one soccer match with that money or how many soccer matches do you get to see? So that guy specifically was a single ticket. A lot of people did say,

hey, I've been to five games so far. It was about 4,000 per ticket. So I'm 20 grand all in. Okay. Just on ticket. But that guy was 30,000 for one single game. Him and his buddy. He was closer. Like closer down. Yeah. Well, he he must have paid a lot of money in last minute kind of thing. Oh my word. I hope his team won. They did. Oh. Yeah. That was the funniest part. I met a lot of Argentina fans and the whole time. I was like, all right. Let's hope they win. Little did we know what would happen

in this year? Gosh. The next morning he probably woke up feeling like, wow. Yeah. Like can you imagine spend a 15 grand to see zero team score in the first 106 minutes? I just I'm sure it's still

“great. And here's the thing that always said, well, I'm going to be telling my grandkids about this.”

I'm like, you're assuming your grandkids are going to care. You're going to do this all for the grandkids. Don't put that on them. So I do you it's I got to know. Is there comments like what are people saying? Oh, this is my this is the top comment on the YouTube video. The winners of the world cup are Spain, Visa, Mastercard, and American Express. And someone added and FIFA nine billion dollars this year. Gosh. Yeah. They're the real winners here. Wow. Wow. I love a lifetime.

Once in a lifetime experience, I love if you can afford it. I love if you've saved up over time and budgeted for it. Then I'm not bad. Then I think it's like, yeah, good for you. Yeah. But otherwise, just watch it at home, guys. Go to the watch party and you'll have a good time. Which a lot of people did. I met a lot of people who said, no, I'm not going into the game. It's not like that. I just want to be around it. And I was like, I understand that. You want to be around the energy. I hope you gave them

I hope you gave those two guys every dollar so that they could at least maybe next time this

comes around do it with a little bit more wisdom. Well, the problem is who met a lot of international

people and every dollar is a US budget. So the ones that were US, I could hook them up. The other ones I said, good luck. God bless and watch more Ramsey show. Okay. Well, check out the whole episode. We'll drop a link in the show notes. That was just one of the many people I talked to. And they were very entertaining as much as it was chaotic. It was a lot of really fun, interesting people that we got to talk to. So a very fruitful time in New York. We did some

other ones ask people to cost of living in New York. How much are you paying for rent? That was a fun thing. I like that. International people, how much they have in debt? How do you view debt? How do do you view America's debt? What do they? I'm like, what do they say? You can't tell me. You're not to watch it. Subscribe to the George Camel YouTube channel. Again, we'll drop a link to the

“world cup episode. If you want to see how much people spent on tickets. But goodness gracious,”

it made me even more fiscally responsible. Yeah. And in you already are, I thank you. I almost want to know how much was your ticket. Well, we didn't pay for the flights. I guess you didn't wait a second. We didn't go into the game. You didn't go into a game? No. George, this is my life, Jade. I was just in the worst parts of it. And the Vuvu Zayla zone, and people, you know,

folks. There you go. It was always sacrifice. Yeah. Well, I mentioned earlier, and now I'm going to do

my seamless transition into every dollar that it's very smooth. Yeah, I want you guys to have a good time. Do those life once in a lifetime events. Listen, I want to see Beyonce and I spent more than I've ever spent on a concert ticket. Did you go like sinking fun? All right. I'm going to put away 500 bucks a month to have six grand a year. Yeah. I knew what was coming. And so when it was time, I was ready. Well, this makes Beyonce look cheap. I mean, yes, it does. It makes Taylor Swift tickets.

Look at that. Uh-huh. Yeah. You're going to be in a sinking fund for a really long time in order to do that. But I'm telling you, people love every dollar. It allows them to do the things that

not just they need to do, but the things that they want to do, and they can have a plan for their money.

Uh, you can find that on the every dollar budget app on the App Store for free, or you can find it

“on Google Play. All right. We've got Sam who's in Minneapolis, Minnesota, on the line. What's up, Sam?”

Hey, guys. I'm fanboy and so harder now. I love the Randy show. I love you guys. Thank you for what you do. Thank you. We're glad you're here. Uh, okay. So I'm on debut set two. I am currently not investing in my kids college accounts. I opened them up nine years ago and my son was born. I have four children nine ages nine six four and one and there's about 20,000 bucks spread out across the four of them. My mom is currently investing in it like 25 bucks a month per

kid in a hundred bucks on their birthday. Good. And my wife brought up

rolling it over or moving it into like an IRA or like a Roth IRA account for my kids. He was kind of like I didn't know if that was a good idea or not. Neither of my wife or I went to college. We're not really big believers in it. I guess if that's the last semester or not, but

“is she talking about now or later if they don't use the money? Do she she was talking about it now?”

Okay. You can't now. There's a rule that five 29 has to be open for 15 years at least before you can even begin the roll over and then it's 35 max per child. So up to the Roth IRA limit for that year this year at 7500 bucks until you hit 35 grand. And that's only if they don't end up using it for college because I know you know we all think well who knows 20 years from now what will college be? Well what if they go and it's three times as expensive as it is now? Right.

And now they're in crippling student loan debt because mom and dad said you probably won't go. So I would rather be safe than sorry and have the money and then not need to use it or roll it to a different person. You can change the beneficiary anytime again. You can roll over up to 35 grand and two retirement. There's so much you can do with these accounts and the tax advantages are so good that I would hate for you to miss out on that. What was her purpose in doing that?

What was her purpose in making that move? Is she trying to solve a different problem? I don't know honestly my wife brought it up. I didn't really want to touch it. We're not investing in it right now. Like I said anyway. And it was just kind of on my wife's behalf. I thought I would ask you guys. Yeah. My guess is maybe she was thinking since you guys aren't currently investing. If you rolled it over it could be either for your retirement or for the kids college

but to Georgia's point it doesn't work that way. It's got to be one or the other. And you guys are in babysept to keep chunking away at that after that you'll build up your three to six months of expenses and then before you know it you'll be investing 15% and what I did advise you to do is go over to ramsysolutions.com and use our investment calculator and start calculating if you start investing from this age to that age how much money that you're going to have and when

you know those numbers it gives you a lot of peace or if you don't like the numbers you can start to plan for scenario where you do like the numbers. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is term life isn't a baby step. So if anyone is dependent on your

“income you need to have 10 to 12 times your income in life insurance. Now and most people are”

surprised by how affordable term life really is. Even if you're not in perfect health look I understand the hesitation since most insurance companies make it more of a hassle than it needs to be. Not a Zander insurance. They're not an insurance company. They're broker that works for you. That means

coverage for your family. For almost 30 years I've recommended Zander for straight answers, competitive rates and coverage that actually protects your family. Call 800 356 4282 or go to Zander.com for a quick and easy quote that's Zander.com. Alrighty, your Ramsey show question of the day is brought to you by Y refide. When past due private student loans keep pulling you backward it's hard to focus on what's ahead.

Y refide helps borrowers with a low fixed rate refining refinancing option that fits your budget so you can focus on the future again. Visit yrefide.com/ramsey and remember it may not be available in all states. Today's question comes from Victoria in Louisiana. Would you explain how compound interest works with regard to the stock market? I understand earning interest on bank deposits and how stocks can increase in the market but how and when does compound interest happen?

I love this question. This is super fun. Mathematica's. Which we could do like a whole like Bill and I visual. I just want to make it easier but uh so there's a couple of things going on here. Number one compound interest is more like a bank deposit like your high yield savings account. The bank says hey will pay you 3% on your balance. So every month the bank looks at your balance

and you know per day and they go right here was here's what paid out per day. We're going to pay it

out at the end of the month. That's pretty easy to understand. Yep. 3% on $10,000 divide that by 12

“months. That's how much you'll make if you just left that amount in there. Now compound growth is actually”

a little different. That's what's happening in the stock market and it's not a straightforward because the stock market goes up and it goes down. So I buy a share of jade incorporated for $10. Right. Now jade's crushing it. The revenue comes in. We're all excited for jade's company. She's crushing it. The stock goes up to $15. Thank you. Now remember I bought it at 10. So I just made $5 profit. So now as you start to go okay I have multiple of those shares. Now the profit increases.

And so now I got $15. Well jade's company is now they got they're going for $20. So now I just made money on top of the money I already made and so over time that growth compounds

to where you don't have to actually invest a million dollars you invested $10,000 or $15,000.

And over the course of decades it grew as the sort of the piece that you had about the share.

“So that's how the stock market works. As you have a share price, that share price goes up and”

up and up and up. By the bank by the boom you can retire one day. And we've seen about 10 to 12% on average in the overall US stock market. I love that. You know I pay good money to see you explain that bill nice style. But I think the closest I could get is investing essentials. There we go. That's true. We are going to walk through this in nerdy detail. How to choose mutual funds. How to sort of filter and balance where you invest when you invest. Where do I put

this money? What about the kids? What about estate planning and taxes and insurance? How to keep the government's hands off of it? How do I hand it to my kids without destroying them? And at what point do I do that? What about trusts and wills? We're going to get into all of it at investing essentials. It's a virtual event that Dave Ramsey and I are doing September 1st and 2nd. So you can join us from anywhere. Two nights, a couple of hours a night. It is definitely worth

“the ticket price if you want to learn about this stuff. So. All right. Jump over. Ramsey Solutions.com/events.”

There's your answer. If I had your information, I'd send you a free ticket, but I don't have it right here. All right. Dawn is from Dallas, Texas on the line. Hi, Dawn. How can George and I help today? Okay. Hi. So the good news is I got married three weeks ago. Oh, congrats. Thank you. We have a situation for how's my husband and I need some guidance on. So before this marriage,

I was married before. I've been divorced for about eight years now. In first marriage,

I took out a laughing insurance policy on me and won on my ex-husband. There were $500,000 term laughing insurance. They don't each of us. After the divorce, I kept the laughing insurance policy on both me and him because he was paying child support and other expenses and if something were to happen to him, you know, it would be difficult. So anyway, with that, my new husband, he's like, he says it feels weird to pay laughing insurance on my ex-husband. He's not 100% against it,

but he's not 100% for it and he doesn't know what to do. But then on the other hand,

twin boys who are about to go into high school. You know, we're staring down college. You know,

there's just so much going on at this stage in law. And if I want to make sure something were to happen that they're taking care of. But on the flip side of that, also want to respect my husband's decisions and follow his lead, but then he's like, he doesn't know what to do. So, like, so go ahead. I can see two sides of it. I can see how, I'll tell you how my brain is seeing it. Obviously, the purpose of insurance is to replace income that's necessity, right? So before you were

married, obviously, yeah, this guy was, you know, you were married to him. So he was part of the income situation. And then even as an ex, maybe he was paying child support or alumony, that sort of thing. At this point, now you're married to somebody else. There's kind of a new situation going on financially. The only piece of this that I could see a connection to is the kids. If your ex-husband was saying, hey, this is kind of an inheritance thing. When something happens to me, I want the kids

to have this money. That piece I can totally understand and then being the beneficiary of that makes sense to me if that's something that he wants to do from a legacy perspective. And as your current husband, I don't know that that should bother me to that extent because this is their dad. So how are you guys viewing it? Is he viewing it from more from a marital perspective or more from a children's dad's legacy perspective? Well, Mike's family or his health, it was difficult to

be the last insurance to begin with. And like he had gotten rejected multiple times over the course of the times we had tried. And so the health is not great as we speak. And then so I also got that in the back of my mind. And then my new husband, he's like, you know, he's a chart driver. So he makes pretty good. And you know, he's adamant that, you know, these are his kids. He will do whatever he can to take care of them. But the fact of the matter is, you know, he's a chart driver. I'm

“a teacher. There is only so much money that we make. And with my teacher education is important”

to me. So I want that option to be there for my kids to be able, if they want to, to go to college, to whatever college. Um, so there has been said, we're going to. If your expo has been said, I want you guys to keep this policy and the purpose of it is for the children's college. And if my life exceeds that, then it's there for them, you know, as they begin their life and start their life, then I think that's a wonderful thing. And I hope that he has a will and some documents that

can really outline some of those things that he wants for his children. Um, there's part of this policy.

I am the policy owner. I got it through. Um, so I'm the one who's always paid.

And you're listed as the beneficiary, I guess. I am the beneficiary of the policy. I always have been. So I don't even think even remembered he had, we had the last insurance policy until the other day when I called and took him about it. Mhm. So well, the main distinction is you are not hanging on to this policy to hang on to the past. You're hanging on to it to protect your kids' futures. Right. So until they are independent on their own, their through college, they're working.

“Okay, now they're fine. But right now, the truth is, let's say you got rid of this policy. Well,”

you might not be able to afford college and support them. And so part of having kids is, it's your obligation to support them. Now that might be through child support, that might be because you want to. But I would keep it for that reason. And it's really has nothing to do with, you know, the new husband, the new husband. And so I totally understand his side of it. So I don't want to diminish that. It is uncomfortable. But that's the nature of a broken marriage and kids from a

from a different father. That's just part of what he signed up for. Yeah. It's a little bit of this discomfort and messiness. And if, I mean, I'm, I'm trying to put the shoe on the other foot. If for some reason, my kids, I was separated from them through, you know, a divorce. I would. I'd want them. I'd want them to still have life insurance on me so that they have access to whatever money I've accumulated or, you know, obviously get that death benefit if I were to leave this earth.

So I can totally, totally understand it. And it's just a good lesson, guys. Life insurance is so

“important. I said it earlier, but I'll say it again. The purpose of life insurance is to take the place”

of income that's people are dependent on. So you don't take out life insurance policies on

children. You take them out on working individuals. And we always suggest 10 to 12 times.

haven't looked it up, Zander insurance, that's where I get my life insurance. Term life is what you're

looking for. That's where George gets his. And if you call him up, they are going to hook you up and take good care of you. Welcome back to the Ramsey Show here in the Fair Wins Credit Union Studio, continuing on with the phone lines. We've got Amanda who's in Tampa, just Tampa, Florida. I almost said Tampa Bay. Isn't it sometimes called that? You know what? I forgot. There was multiple. Okay. Well,

we're just going to go with Tampa, Florida. Hey, Amanda, what's going on? Is it sometimes Tampa Bay? Yeah. Okay. That's about the fine. Just was checking my old checking out my own brain there. Okay. How can we help today? Yes. And first of all, I'm sorry for your loss. I saw you post the morning Instagram. I left you a message, but yeah. I'm almost done with your book and I am such a big fan.

“So I'll make you brief. I have a question about an album with great current issues. I believe”

it has been an era with my 24 tax return. I've worked remotely for a company based in Alabama and I lived in Tampa, but the state says that I owe 1100. I'm trying to resolve it because I don't

think the amount is correct. I don't think that I owe the many taxes I've never physically worked

in the state of Alabama. Should I just pay the 1100 or to bear the time and garnish my wages now, so should I guess that isn't the IRS? Yeah. So have you verified this dead? Have you actually logged into IRS.gov and checked for all the letters there? I have, yes. And I have called and talked to multiple people and they all say the same thing. I did file the return and they say that it shows in their system that I do because the company is based out of Alabama. So we just

sentence, I worked so hard to kind of step one. It's crazy. And so now I do I just go ahead and use that money to pay off the, you know, that tax that they can say I do owe. Did you prepare taxes or I do? I did. No, I did it myself on turtle tax. I mean, I, you might have a tax professional take a look at it just to verify that there was an error or, or say no, this is actually exactly

“right. There's no error. I mean, that would be the best way to look at that because George and I wouldn't”

be able to tell you just from sitting here. I'd want somebody to look at it. And if it turns out you do owe the money, then we can talk about, let's talk about that scenario. Let's pretend you run it by a tax professional and they say sorry Amanda, you owe this money. Let's talk about what a plan to look like for you to pay it. Have you checked with your employer? Check with the accounting department there. What do they say? So in 2024 it was reported that I had moved

which is, which is true because I did, I lived in Alabama for like two months out of the 20 late beginning of 2024 and then you moved to Florida. But that was reported, but it's, it's come this because the old employer said that it has been reported. But when I chat a call, it looks the state of Alabama, they said no, it didn't do that because it was reported that I'm reciting in Alabama. So yeah, I'll try to get a tax person to look through it. But

well, I'm trying to figure out, I just think we need some facts here because I'm wondering if they say, hey, well, those two months where you're going to owe taxes in Alabama. So you might owe taxes in two different states for that year because you did live there. I mean 500 bucks a month for two months is that's not outrageous in taxes. Alabama has an individual income tax rate about 5%. So I'm just wondering, you know, I'm not here to defend the IRS, but I just wonder if maybe there is a legitimate

tax owed and we just didn't understand the tax law. And that's where I would reach out, go ramsyslution.com and click on tax pro and we'll connect you with a Ramsey trusted tax pro to just

look at all over and go, okay, here's the fact, here's what's not true, here's how to respond to the

“IRS before the deadline. That's what you want to do is stay in communication, meet all the deadlines,”

document everything and versus just going, well, I don't feel like I should pay it. That's the last thing you want to do. And if you do find that you owe the money, let it, if you

want to fool around with and that's definitely one that we want to knock out sooner than later. And

“until again, until you find out otherwise, I'd start stacking up for this payment knowing that”

it could possibly be coming down the pipe. All right, thank you so much for the call Amanda. Let's go to Mason and Dayton, Ohio. Hey, Mason, how can we help? Hey, guys, yeah, thanks for taking my call. So my wife and I were 26 just starting the process of realizing we're in a bad situation trying to get out of it. So we have a lot of debt, but we have an investment home and we're just curious if we should sell the rental property and get out of this hole or put her in those down and kind of stay

in the whole longer while keeping investment property. Interesting, so just tell us right off the bat, what do you owe on the rental and what's it worth? Yeah, so we owe this right around 60,000 and it's worth around a hundred and sixty thousand. Okay, that's great. And you have a, are you and your wife also living in your own primary residence? No, so we rent from actually a family and my grandparents and the house that we are running. So we're going to pretty good deal on rent. It's more the location we

want to be opposed to where the rental property is. Got you, so you guys are renting, so how much other debt do you guys have? We have between student loans, cars, and bad credit card debt around 78. Okay, 78,000. And what's your income? How much? Right around 95 to 100. Is that including the rental or not? No, not including the rental. Okay, what is that cash flow? What's the actual net profit per month? About six hundred dollars a month, roughly? Okay. Is there ever any,

“is it in your plans to move into this house as your own at any point? Like what was the plan with this rental?”

Yeah, so the plan was for it always to be a rental. We actually lived in it for about a year,

and it's just not in an area near where that we really wanted to live in and raise the family with too little kids. Okay. So my parents helped me buy it when I was in college. So I'll help pay some bills and stuff while I was in college. I rented out while I was in college. I got out of college and didn't have money to buy another house. So I moved into it for a year. Actually, about three years, but got it fully in my life's names a year ago. So that's kind of how

we got there. Understood. And now you're renting it again. And I guess my big question is, was the plan to be landlords or did it just kind of happen by default? I guess I like the idea of the income coming in, but we realize what kind of hole we've been in. So we finally put it all on people and like, wow, that's a bigger number than we thought. You know, you get those credit cards or a card that you can't afford. So now we're just like,

how can we get out of this the quickest way possible? Yeah. The math just says, hey, we could get about $100,000 out right now, or we could take home our seven grand a year. And it sounds like there's more urgency for you guys to get out of this situation.

That you're in versus, man, we love the extra seven grand. We never set out to even be in this

situation, which is sort of landlord by default. Yeah. I think that is a pretty clear decision. Yeah, that's kind of something got some information. A lot of my family selves in the real estate. I know that you guys all, please, you know, it's a good way to make that extra income when you have the money. So it is. It is. I thought it was a better to put our notes to the grindstone and keep the run on and we have it at the end or start over fresh again once we get out of this big hole.

“I don't think this rental is like the key to your whole wealth building scheme. I think the key is”

going to be getting out of debt, creating margin with your core income. That $100 K. So I would sell it personally. I would get out of this, but I'd make sure to change the behavior along with it and not use it as a get out of jail free card. Hey, guys, Rachel Cruz here. And I love summer. There is more fun on the calendar, more time with your people, and way more chances to make memories. But, you know, what else there's more of? Spending.

Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the every dollar budget app. Because it helps you plan your money, track your spending, and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the every dollar app in the

App Store or Google Play and start for free today.

Hi, Karen. Hi, Gaden George. Thank you so much for taking our call. Yes, man. How can we help?

So my husband and I both lost our jobs in May. And we want to know if it's okay to take this time to build the potential businesses that we have our eyes set on or if we should go back and start looking for, you know, quote unquote, "normal income." Well, gosh, I'm sorry that you both

“lost your jobs. Did you work in the same place or this was just a crazy coincidence?”

Thank you. Yeah, we were working at the same place. I was laid off just after coming back from a trendy leave and his called track ended. Oh, I'm so sorry. Do you have emergency funds? Do you have money set aside? So we've been kind of working on the baby sets, not as well as we should,

but we do have our basic $1,000 emergency fund. And then on top of that, we have, I would say,

our emergency fund plus they three to six months. It's not all in the right place. So, and I actually got a seventh of $12,000. So we started with that and just said that we would try to live off of this for maybe three months or so. Do you guys have kids? We do. We have two, you know, fresh baby. It's almost five months now. And then we have a five year old. Okay, so this is, I mean, this is a huge life change. Obviously, it's also a huge emergency. Hopefully, it doesn't feel like a crisis,

though, because you've got this money set aside. 12,000 severance, $1,000 baby step one. And how much would you say that the six month, three to six months fund is how much money? So our expenses on a monthly

basis are about $3,000. And so we felt that six months was the safest bet. So we have $20,000 in a

high yield savings account. And then we have another $20,000 in a separate high yield savings account for a little bit more cushion. The goal is to try to start generating income from the businesses, so we don't have to touch any of our savings. But how long do we do that before it becomes, you know,

“the UMB? Well, tell us a little bit, well, first let me also ask, do you have any debt?”

We do not have any debt on the house. Oh, excellent. Excellent. So you're sitting on about $53,000 in liquid cash. Okay, that sounds like we're telling me if I haven't put it all together. Sounds could use some of it the last two months to live. Some might be down to like in the 40 somewhere. But I would sit down tonight and understand, here's all the rations we have. And also we need some urgency to get income in right now versus, well, let's just wait and

pursue our passion project. Like I would be feeling the fire right now of going, we got a baby, we got a five year old, and we have no income. You're going to burn through those savings way faster than you think. Did you already have a business that you'd started that you're just going to focus more on or is this starting something from scratch? So we've been noodling on it before and it's kind of branches off of what we are doing prior. I luckily enough, well,

we both actually have nailed down clients since losing our jobs. I got two clients. And so I have been able to generate about $2,000 which paid, you know, the mortgage. And then my husband is generating a couple photography clients. So it's not as much as we would like, but it's kind of working. The idea is that we, we don't want to go back to normal nine to five. We want to really, really make these work. I respect what is hoping to keep money coming in. What are the two businesses?

What is it he's doing? Photog? What are you doing? Operations consulting. So before I was like an executive assistant operations manager. So now I am doing consultant for like, you know, small business owners, founders, consulting for their businesses, cleaning up their anything, you know, cleaning up their papers in box documentation. Okay. So many different things.

“And what do you need to bring home every month to match what you guys were making before?”

We were bringing in together. He was bringing in $3600 by monthly. That's a month. And I was bringing in about $24. So in total, I believe we were right around like 10, maybe 12. Yeah, I'm seeing 12k. So what you guys were bringing in take home? It's more than we needed. Yeah, that's what we were bringing in take home after taxes, which is more than we needed our expenses prior to losing our jobs were about $3600. But we've since been able to get that down to $2700 to just the

stay in our home. Oh, boy. Okay. Well, we want to, we want to calculate beyond that because you got to live, right? You have to have a lifestyle that you enjoy. So if you said, hey, for us to,

and save a little bit and not just be bare minimum. What do you think that number is?

I would say about $3500. Okay. Yeah, that would take care of the home. And then we could invest a little bit as well. And if you have actually $10,000 invested into a betterment account, sorry. I'm just pulling more out. That's fine. So we do have $10,000 in a betterment. I wanted to ask, is that what Dave considers like good growth stock mutual funds? Does that account? It depends on what it's invested. My guess is it's in a taxable brokerage account that's not on retirement. And then

you can buy anything within that. So you tell me what you invested in. I actually don't know because I put it in the hands of the account because I didn't want to pick individually before you didn't like a RoboAdvisor. What do you mean in the hands of the account?

RoboAdvisor. So betterment is the platform. And essentially I understood that they were

investing it into the S&P 500. Got no. Okay. So it's likely in some sort of index fund, which is it's fairly close to a mutual fund that we talk about on the show, which is you want to diversify across different types of companies. So large cap, made cap, small cap,

“companies and international. That's what we recommend. Your index fund is likely not as diversified.”

It's probably mostly large cap companies. But that's not a crisis right now. I would not be investing until I had consistent income because you guys are still, you're not as safe as it feels. You're in a great spot. You've done an awesome job. No debt except the mortgage. You've got 40 grants sitting there to protect you. But I don't want it to give you a false sense of security

either and get too comfortable. Right. I want to say to you, I love businesses. I love small

businesses. I love people who are like, I got to break out of the nine to five. I love that. I just want to know how consistent we are because the best way to do that is having a consistent income while we build the business. And then once the business gets to a point to where it really is spitting off enough income for us to live our lives on, then we can transfer and do the business full time. So right now, it does sound like you guys are in that stage of, hey, we've got money

coming in. It's still a little inconsistent. We're still trying to build the structure out, especially I haven't heard much on the photography side of things. For that reason, I think that you

“both probably should pick up two other jobs. Like, you should pick up another job. He should pick up”

another job. And the point is, hey, this is not our long-term play. This is just to get us some consistency while we build the thing that we really do want to do. And there's no shame in that game. That is the way that it's done. Otherwise, you guys are going to be living hand-to-mouth. Like, yeah, especially if you're both reliant on clients, that's kind of a scary situation. Versus one of you having the stable income. And now you're out here trying to gather the clients.

And if you have a bad month, it's not going to sink you guys. Was he doing photography before full time? What was he working in? Just kind of freelancing. I think he was doing photography and he was working as a similar consultant, office manager kind of deal. That said, we did, you know, think a similar thought. But we were concerned that maybe getting stuck back into the nine to five, you know how it just gets tiring. You know, and then you feel like you don't have time for yourself

at the end of the day or time for the kids. So we were afraid that that would take away all of the momentum from the businesses. And the next thing, you know, we look up. And, you know, two years later, we're still just comfy in these nine to five. Well, what you could do is you could split it and say something like, and this is just me looking at the numbers you've given me. It may be different. But I'd go, okay, so the person who has the biggest upside right now seems to be

you, you can go out, you can get a couple clients and make $23,000, which is just shy of what it is that you need. So I'd say, okay, given that information, husband, why don't you go out and get the stable job or I hate to say stable? You go out and get a job. That's going to bring in some consistent income. I'll go out and I'll build my thing over here. And once that gets solid, that will allow you to then go out and build your thing, right? We don't have to both do it simultaneously.

You guys are young. You've got two babies. You've got time to build this. And I want you to, please hear me say, I want you to do this. I just want you to do it in a way that's going to cause as little rocking of the boat and as little financial ups and downs as possible.

“And entrepreneurship self-employment. The first couple of years?”

It ain't for the week. It's not 20 hours a week with a bunch of flexibility. It's 80 hours a week. And so I don't want you to get a twist that's going to be a walk in the park either, going this way. I'm not against vacations. I'm against being broke.

Come do that on the live like no one else cruise. Hang out with me and the Ramsey personalities for seven days in the Western Caribbean. Join the world's largest debt-free scream. Here, exclusive Ramsey teachings and more. The best cabins are filling up lock-in yours with a $600 deposit at RamseySolutions.com/events or click the link in the show notes. You know, we wish we could get to every single call and question here on the Ramsey show but

that's just not possible. So if you have a money question and you want to answer for your question, go ahead and head over to our website ramsysolutions.com and use the Ask Ramsey tool. Ask Ramsey is our free AI tool. It's built and trained on proven Ramsey principles and you'll get an answer the same way that we'd answer it here on the show. Ask your question today at ramseysolutions.com or just click the link in the description if you're listening on podcast or YouTube. All right,

“Chris with a K is in Atlanta, Georgia. All right, Chris. How can we help today?”

There. I have a question about debt. I have a few different categories of debt and I'm trying to

determine which to pay off first. Okay, we can help. Yes, so I have a mortgage payment. The mortgage,

I have left is about $190,000. My interest rate is $2.5 on that mortgage. For student loans, I have about $23,000 with the highest interest rate is $4.6 and then my car, I owe $16,000 with a 5.5% interest rate. Okay, anything else? Were those those three or it? That is it. I luckily don't have any credit card debt. Wait a go. Okay, well first off, we tend to separate the debt by consumer debt versus mortgage debt. We don't touch the mortgage debt until a little bit further down in our

steps of methodology. So, how familiar are you with Ramsey? How long have you been listening? I'm just saying the occasional listener. I'm so not very much. Okay, so for your benefit and for anybody else listening, we have a seven step, seven baby step program that we teach and it helps people not only pay off debt but a long term they're building wealth as well and doing all of the things that are necessary to do with your money. So, part of that, baby step two is the pay off your debt

section of this methodology and, like I said, we break it up, mortgage debt is not until baby step six.

So, today we're just looking at the student loans and the car payments. So, that's the first

answer to your question and then within baby step two, what we do is the debt snowball method. A debt snowball method is when you list your debts from smallest to largest by balance. And so, in your case, I know that you read off the interest rates but we do it smallest to largest by balance because we find that over time, people are more willing to stick with the process and they're able to experience small wins quicker. And so, for people who actually want to finish paying off their

debt, study show that the debt snowball method works best in order to do that. So, you mentioned

“that the student loans were broken up. How many individual ones are there?”

I have a mix of subsidized and unsubsidized and there are six and they all vary between $3,000 to $5,000. And I've been on a forbearance for the last several years since COVID with the repayment plan. And so, I need to change my payment plan or I just need to pay off the debt. So, that's kind of what I'm curious about, especially because the car is less money, right? I

owe less on the car. So, are you suggesting I should pay off the car first and then the student loans?

No, I'm suggesting since the student loans, there's six of them. I would go through tonight and look at what the individual balances are. So, you might have one for three, you might have one for eight, you might have one for seven, whatever those numbers are. Do you say there are three to five total, like 3,000, 3,000, 4,000, 5,000? So, if you use our every dollar budgeting app, it'll list out the debts from small slages for you and that will give you your next step.

So, you're going to make minimum payments on all of the debts, but that smallest balance, that $3,000 student loan, that's the one you're going to throw extra money at. And once that's knocked out, you free up that payment, now you'll apply that new found payment

“to the next smallest debt. And so, that's how the snowball starts to gain traction. And that moment”

I'm like, Jade talked about is what actually causes people to follow through with it versus interest rate,

used to these student loans being on default. And so, or being on, you know, forbearance.

Forbearance, thank you. And so, you're not paying the payment. And so, you're probably thinking, oh, if I just pay off my car payment, that's a bigger, that's more money. That's being freed up. I totally understand that line of thinking, but psychologically what George said is absolutely true. I use the debt snowball method to pay off $230,000 of student loans, but in total $460,000 of debt.

“And I can tell you it really does work. George used it as well. And so, that's what I would suggest.”

How much money do you bring home every month? About 78,000. Awesome. Mm-hmm. Yeah, I have a good chunk of savings too, which is why I thought maybe I could go ahead and pay off. I have about $60,000. Oh, my thing. Wait, you're telling me you could pay off

all of the consumer debt today and have money left over. Yes. And we just spent seven minutes

walking you through this. Like, it was going to be a whole lower deal. Chris, with a cake, I've made that you told us this late. Come on. You're very delirated. We thought you were broke. Yes, no. I've done my savings and I, you know, because they've been on forbearance, I haven't really thought about paying towards it. Well, the interest has been accruing this whole time. I know. That's the scary part. You're going to look up and that balance is ballooned.

Yeah, that's what it is. And then the income did, you know, start to increase a little bit

“in the last few years, which is why I'm in this position now to be able to pay some of that off.”

Well, I'm going to pay off all the debts today. Congratulations, you're debt free. How many left? And you'll 21 grand left. We're going to call that your emergency fund. You may want to add a little bit to it. We recommend three to six months of expenses. That's babysitter. So if you're a solo income owner, you may want to lead towards six. And so if your expenses are, let's say, five grand a month, 30 grand is six months. So you

got nine grand to go. And you'll save up three grand a month for the next three months. And boom, by Christmas, you are completely debt free with an emergency fund of 30 grand and you're investing 15% that's babysitter for into retirement accounts. And if you just do this, I know it sounds like, should I go with the savings? Should I focus on if you just just trust us on this one? This is a trust me, bro, situation. You will be in a very different place mentally, emotionally,

financially. When you don't owe anyone money, you've got to pile a money in the bank and you're building toward the future. Yeah, I love a call like this where we find out that there's some cash that they're sitting on. But even if you're listening now and you're thinking, okay, I have debts trust me. If you just start to think about this, think about, do you have money? Do you have stocks? Do you have money sitting in a brokerage account non-retirement? Things you could sell?

“Are there things you could sell? It's toys, recreational vehicles. Yes, that's what George and I do.”

When you guys call on and tell us your list of debts, we're thinking, okay, what are the easiest ways

that we can knock out money? And it's almost always, it's sitting in stocks, it's sitting in a brokerage

account or it's sitting in your vehicles if you're just willing to liquidate them and drive a hoopty for a while and even be surprised. Even like pausing investing, if you're investing, you know, 5-10% and you pause that, that's money back in your paycheck. Yes. Well, if you get a big refund, you're with holding. Yeah, yes, thank you, George, changing your withholding. A lot of us got refund checks back from the IRS. If you take that amount and divide it by 12, you could essentially

get that much money back in your paycheck if you just change your W4 withholding. That's $3600 refund. That's $300 a month. You could have had in your paycheck. Yeah, that's big money, big money. I love this. So just take a moment tonight, comb through your assets, comb through what you have and you might find that getting debt free is quicker than you think. All right, I love a social question, George. How about we do it? This is Darrell from Facebook. He says, should gifted money

received for birthday be separate from household income and theirs to spend as they choose. Or should all income regardless of its source be considered household income? I love her. Come on, you better spend that birthday card. Say the quiet part out loud, Darrell. I want to keep this money for me. Yeah, keep your wife's hands off of it. She's like, and the question is, where are we at financially? If we're crippling debt and you got a hundred bucks, you may need to throw it at the debt.

But if you're in a decent spot financially and grandma gave you birthday money, like if my wife gets birthday money, I'm not like, hey, you know, I get a cut of that, right? No, that's not right. I should go towards the bills this month. However, can I just tell you this is like a real story. There were several years. My mother-in-law, Bubby, she would give us like cards every year for anniversary. She would give us Valentine's Day cards. I'd get a birthday card. I can tell you that

money went to utilities many times when Sam and I were getting out of debt. Or it went towards getting, you know, paying off a credit card balance or getting that current on something. So I love it. Do you ever see where it's to choose how the all the blessing plays out?

Oh, goodbye. Electricity? Is that count? Water.

“All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and”

interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who

guide you through buying or selling. They're people you can trust to have your back from the first

call to closing day. Find a Ramsey trusted agent near you at RamseySolutions.com/agent. That's RamseySolutions.com/agent. All right, our Ramsey show scripture and quote of the day Ecclesiastes 1010 says, "If the axe is dull and its edge needs unsharp and its edge unsharpened, more strength is needed, but skill will bring success." John Wooden said talent is God given. Be humble. Fame is man-given. Be grateful. Conceit is self-given. Be careful.

Wow, like that. That's a foreboding. All right, Jenny is in Cincinnati, Ohio,

“Hey, Jenny. You're on. Hi. Hi. Hi. How can we help?”

So me and my fiancee are getting married in October. We've been together since high school and she bought a house last June and I'm not on it yet, obviously, because we're not married. But he got it through a VA loan and the VA inspector missed a bunch of theft. So our $150,000 home, we had to put $50 so far. Wow. Repairs and maintenance, unfortunately. And last month, I got

laid off from my job. And we're tuning okay, it's just after I got laid off, we found out that all

of our waste plumbing was still clay pipes and they collapsed. Oh, oh, boy. So that was another $30,000 we had to take out in debt for that? How old is this house?

“It was built in 2010. Goodness gracious. Okay. And this inspector, really,”

screwed you guys big time. Yeah, which is what we've been told. But since King laid off, our pipe payments don't start till next month. And I've been applying like crazy daily even like entry-level fast food jobs and I keep getting rejected. And I just want to know how to deal with a guilt and ways that I could help them out more, because I've been feeling really guilty. He assured me it's fine. He's pretty traditional where he thinks that the man should take care of a majority of things anyway.

But I come from a family that if you're a woman, you still have to make your own income and you should feel financially secure on your own in case anything happens. So I'm feeling a lot of emotions that I don't know exactly how to deal with that. Well, I'm hearing two things. I want to get to the emotional part, but I also am thinking about this home inspection. And you can, you can pursue a claim against a home inspection company. I don't know if you've looked into that. But I mean, if it's sorry,

if at least we're up to here. Yeah, did you? So unfortunately, I can't do anything because I'm not on the health itself to contract the mortgage. But I keep telling him to pursue that because I can't do anything. If I could, I sure I would be on the phone daily. Why is it just? I love laid back person. It comes to stuff like that. He'd rather figure stuff out himself. And to the tune of $80,000. Yes. That's not a fun way to be chill to just go into crippling debt and do nothing

about it. So he's right in that this is his problem, not from a traditional man's standpoint. Because if that was the case, you guys wouldn't be living together before marriage or if he was like a super old school that way. But this is his house. And so let's say you guys got for bed. You're broke up and you put $50,000 if you're on money into this house. You have no claim on this house. Yeah. And so that's the scary part. This is his problem to deal with, legally, financially.

And so you both have your own crises to deal with right now. And this is on him to figure out

this financial aspect. Now once you're married, you combine your lives. Now it's going to be your jobs together to clean up the mess and to get to a better spot financially. But right now,

“you both have your homework to do. Mm-hmm. Now what were you doing for work before you were fired?”

Or they don't? I wasn't insurance agent. So I was one that pushed him originally with the pipes happening. I pushed him to look, because he didn't know if he had any, sorry, blanking on it. But like the extra stuff you add to your home insurance? Mm-hmm. He had no idea if he had any of that or not. And he did. But the clay pipes are considered wear and tear, which is not covered under most home insurance policies. Yeah, that insurance company didn't exist when those pipes were put in.

So that's the hard part here is I would be going through that thing. I would upload my insurance

documentation to AI and help me figure all of this out and do some due diligence here to figure out what we can go after, what we have to cover, what isn't covered. Yeah. So that's part of this whole thing. But what is he making right now? Uh, I believe he makes around 3,000 to 4,000 a paycheck. And he gets paid twice a month or what? Yeah. Okay. So he's making a great income, 6 to 7 grand. And have you tried to get back into the insurance world? Yeah, it's just, I'm having issues with

one. I just get rejection emails where I get ignored even if I try to reach out again. Will do you know people on the insurance world that you can contact personally versus just sort of a name and a digital stack? Uh, yes. I've tried to reach out most of the time. So unfortunately with my company, the reason I got laid off is they got acquired by a bigger company so they weeded out the old employees and from what kind of insurance were you selling? Uh, it was life insurance and

car insurance. Okay. Because a lot of these jobs are commissioned. So it's not like they need to go pay you a whole bunch of money, right? So I would be contacting every single person I know who's still in the insurance world who's not tied to that company and say, hey, are you guys hiring

“over there? What kind of positions? Can you give me a reference or referral? That's how a lot of”

people get hired here at Ramsey because we get thousands and thousands of applications and the ones that pop to the top is because, well, Jade said, he's awesome. You should look into him. Yeah, that'd be my homework for you tonight is I'd be compiling a list and I wouldn't go to sleep tonight until I have at least 10 people on that list. Even if it's somebody that somebody else knows that can say, oh, my buddy has a friend, right? It's okay if you're one to two people away. It's

just something that someone can say, oh, I know somebody or I know of somebody. That's, that's going to be something that's really going to help you. Um, that being said, don't stop applying, you know, you've got to get something. So keep applying, uh, keep looking for that in between job to have something in the meantime because I agree with you. You, you want to contribute and I know that you're getting married, but today you want to contribute and you want to use your

“skills and I think that you should. So keep working towards that and I mean, my heart goes out”

to you because I know that that's tough. It's not, it's not easy to lose a job and it's not always

easy to find a new job. So you do have your work cut out for you, but don't give up on that. And I do think that this also opens up an opportunity and your marriage to have some deeper conversations about expectations and how we're going to handle money and how we're going to handle things that pop up, right? Because this is an $80,000 deal here. We don't want to sleep on this and we don't want to, you know, go easy on it because we're quote unquote. Yeah, this is what the next 40 years of

marriage looks like is he super passive and you're super frustrated. It's not going to build well. And you guys have noticed other a long time. So you know, here's the parts he probably will change or is willing to change and here's where this is just who this guy is. And I love that about him that he's so chill and also there's a down side to that. So some new conversations to have, but I would also look into just side gigs right now, Jenny. I know it's it's tough to kind of

swallow the pride. I mean, you've done a great job just going, I'm going to apply to entry level fast food. I'll do anything. I just want to have the, you know, that feeling of I'm producing. I'm adding some value here and that might be, you know, delivering pizzas. I'd be going everywhere. Going, hey, do you guys hiring right now? I'd be driving around town looking for any hiring signs and I'd walk in there as the best employee they've ever had. Absolutely. George and I actually did a

segment on side hustles on Friday. That episode aired on Monday. You can find it on our Ramsey Solutions YouTube, but people posted tons and tons of side hustles in the comments of what they're doing and what they're earning from it. One person said, and I'm not saying that you're going to go on to do this, but just for anybody who's looking one person said that they do document review and they do it from home and make 23 an hour. Wow. Photography, if you have a special skill,

those are services that people will pay money for, based off of your skill set, based off of your

“background check that you can do. Yeah. There's like a lot of apps and sites that make it easier. Like,”

if you're going to watch kids or walk dogs, care.com. Yes. You can jump on there or if you're going to

deliver instant-cart shit or dash. All of these apps can help even finding side gigs like

doing, you know, special events. They need people to help out and serve concessions, all kinds of things.

Yeah. That's right. You've got to be looking for those opportunities. That's correct. Well,

“George, that puts this one in the books. Remember, guys, there's ultimately only one way to”

financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.