One Decision Can Change Everything

>> Brought to you by the every dollar app. Start budgeting for free today. [MUSIC] >> Normal is broke and common senses weird. So we're here to help you transform your life from the Ramsey Network

in the Fair Wins Credit Union Studio. This is the Ramsey Show. And I'm right to freeze hosting this hour. It was my good friends and co-hosts this morning, we have the hour George Camel.

So we're here to answer your questions about life and money. So give us a call at Triple A8255-225.

At first we have May in Oklahoma City.

Hi May, welcome to the show. >> Hello, thanks. >> Yes, absolutely. How can we help today? >> So I'm getting a little bit of conflicting embrace.

A couple years ago, me and my husband set up like a set kind of budget plan in our goal was to pay down our mortgage as quick as we can as part of that. We don't have any other debt and we've been paying basically double payments on our mortgage instead of 1,500 to 1,395,000 less to the last two years. And I have 195,000 less on my mortgage with no other debt.

But last year when I went back to work full time, we met with a financial advisor because with both of our combining comes, we didn't qualify for a loss. And I finally had a 401k today. Can you be too?

And he was looking at my savings and the amount of retirement we had already saved up at age 45 for we are now. And he was like, your interest rate is 2.9%. You shouldn't be making payments on your mortgage extra.

“You should be putting that toward your retirement because in the long term,”

you're going to make like 8% for more off of that by the time you're tired. And that's more important at this time of life. So I was just wondering which is correct. Which should I be putting money towards my mortgage extra? Or should I be focusing on retirement and like more savings for my kids,

like they're 529s and stuff like that. Says every financial advisor. That's the hard part. Is there's, yeah, they're not terrible people. This person sounds like a level-headed person who's just doing math.

And as you know, money is way more than math. It's about your piece, your options, your margin. And paying off your house leads you towards freedom. Now investing can lead you toward a different kind of freedom. That's also true.

But they have a vested interest in you giving them more money, because that's how they make money. Do you understand? Right. Yeah, they are the investment.

Yeah, so their judgment is clouded. It might be a little fun. Yeah, and I'll say this too. From a mathematical perspective, yes, you're going to make more

“in the market if the returns are 11 to 12 percent, right?”

Then paying off a 2 percent.

Like the math of it makes sense, just like when you have debts, a lot of people want to pay off the highest interest rate first, because math, medically, that's all correct. But what George was saying, it's so true. I'm like, well, we have found, is that money is so much more than math.

I mean, we say personal finance is 80 percent behavior. It's only 20 percent head knowledge. So your behavior is not factored into his financial calculator, if you will, your peace of mind, your sleep at night, your autonomy when you own everything,

including your home, which is unheard of these days. Like when these things start to play in, and you have no debt, you have complete say over everything in your life. There's just something we have found from a psychological, emotional, spiritual perspective.

It just changes. And what I tell people all the time may is listen, because I get the math argument. I understand it. So I would tell you, pay off your house.

And if you hate it, go get a second mortgage, and you can invest the-- It'll be a higher rate, unfortunately.

“And that's what, like, hanging onto this mortgage,”

you point nine percent, yes. But to me, it's golden handcuffs. I'll tell you what my mortgage rate is. It's 0 percent for the rest of my life with no payments. And so I'm optimizing for something different.

I'm going to be okay in retirement, and the truth is,

me, you guys are going to be just fine in retirement. You'll be multimillionaires, am I wrong? I have no idea, because I mean, my husband's military, we were not very good at doing. We did the bare minimum for retirement a long time,

and I just started working a few years ago. Well, how old are you guys? I'm really 45. OK, how much do you currently have in investments? 70,000 can trip you big.

OK, great. And how much are you contributing per month right now? Across everything, retirement, anything else. Just this year was the first time my maxed out. My 401(k) and try to get you that up front at the beginning of the year.

Before that, we were only doing 3 percent, 6 percent of our income at the most.

Yeah, OK.

“We tried to basically play a little catch-up, because I don't know”

for some reason we must've missed the memo on retirement. Welcome to the club. Everybody feels like, man, I wish I knew this sooner. So here's the math. You got 70 grand.

If you contribute 3 grand for the next 20 years, 45 to 65,

at an average 10 percent rate of return, you'd have $2.8 million.

OK. So I'm just saying, if you did nothing else, you just kept doing that. And by the way, once you pay off the mortgage, you can invest 4,000 bucks a month, 5,000 bucks a month. And don't get us wrong, maybe so what we're doing is telling the advisor,

I could play catch-up after my mortgage is caught up, you know? Because I feel like I've been hitting a really good piece with pain. Yes. But I will tell you, May, when you're looking at the overall baby steps, baby steps 4, 5 and 6, which is funding 15 percent of your income

into retirement, saving for kids' college and paying them off early. Those are all done at the same time. So we're not saying, stop everything and just pay off the house.

“Like, you need to be contributing 15 percent of your income.”

Right. Yes. And to retirement, yeah. You need to be putting some away for your kids' college. And then anything extra goes on the house, right? So you don't have to be intense in all this crazy. But the idea of putting nothing extra towards your home

and just keeping a 30-year mortgage for 30 years is wild. And so people that do the baby steps, we find they pay off their homes, it's average of what, nine years. It was actually seven. Oh, seven years.

Yes, seven. I'll say seven in a minute. Pretty crazy. I think I'm in, I'm on track at my rate right now to be done at nine. Here. Yes. And that's great.

So for a financial advisor to be like, oh my, you know, he's just looking at math at that point completely, just focusing on his number. They're not listening to your values and your goals. And what you're wanting to, that's a good point.

Financial advisors work for you. So a lot of people get a twisted and go, well, I just need to do what they say because they're smarter than me. No, they work for you. If you tell them, hey, a value of mine is being completely debt-free.

This is a goal of ours to get the house paid off. We also want to make sure that we're okay for retirement. They should be developing a plan that gets you to that goal. Yeah. And I would, I would encourage you, made a go to ramsysolutions.com and check out smart vester pros.

Because I know there's some there in Oklahoma City that follow, you know, they're, they're amazing. These people have the heart of a teacher, not the heart of a salesman, trying to get more money. So if you wanted just to spread your wings and have some options,

smart vester pros, and they're all over the country. They're amazing. Amazing when they come to financial planning. Yeah, but it is hard. Because you can crunch numbers all day long,

but unfortunately numbers, and I'm a numbers guy. I love crunching numbers. But it doesn't reflect the reality. So when a job loss happens, a health, a health scare. Somebody wants to stay home.

You want to move. Well, now you've got these golden handcuffs,

“because you have to make these payments.”

And you don't want to lose this 2.9% rate. So you stay there, regardless of what you want to do with your life. That's the part that makes me sad. Yeah, what your gut's telling you is something else, right? And then you're having someone, especially when it comes to financial planning.

You know, pushing you another direction, which, um, yeah, I want them to listen to you, man. But this is a question we get all the time, all the time.

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Up next, we have Sarah and it's San Diego.

Hi, Sarah. Welcome to the show. Hi, thank you for having me. Yes, absolutely. How can we help? I'm calling because my fight hustle has turned into kind of a long-term situation, and I'm now wondering if I need to

include it into my retirement investments. Oh, very cool. What is it? What kind of side hustle? So I'm a speech pathologist, and my full-time is speech therapy, and then I pick up a side, a gig, as speech therapy for a different company.

OK, how many hours a week are you working? There is because I can teach my own schedule, anywhere between 30 to 40. OK, that's great.

“So how much income are you bringing in a year if you include the side hustle?”

Including the side up for me and my wife or just me. Both, household income. And household income is around 350,000. Oh, my gosh. Well done, y'all. Well done. I mean, at this point, yeah, I probably would.

I mean, we kind of say any income coming in. But with your main sources of income, you guys are going to be fine. If you just invest 15% of just that. That's 52 grand right there. Yeah, so you guys will be fine either way, but because this has become more significant,

and you are like, it's going to be a probably long-term. I would count that as my income towards that 15% would you, George? Yeah, I mean, it sounds like it's consistent. You're going to continue doing this and you're dead free with an emergency fund. There's no other sort of goals right in front of you.

Yeah, that's correct. Okay, if you're like trying to save up for a house or something, I'd say, hey, it's okay to allocate that. If the sidehouse will exist for this purpose to save up for this goal, it's okay to allocate it there.

But if this is just a part of your regular rhythm, you guys are in baby steps, four, five, six, that I would just invest 15% of whatever else comes into your world. Mm-hmm. I don't think you're going to regret it later.

If you're too rich, later on, you can call me in yellow. I'm okay with that. No one's taking it up on that. You can blame us. People yell me for worse things, so.

Oh, wait a go. I know, I have someone to blame. So great. Well, well done Sarah. That's, uh, that's awesome.

That's, that doesn't go in. That doesn't go in. Those are the questions we want. Well, in the fact she's working 30 to 40 hours. Usually the sidehouse still comes in the play for a lot of people on that baby steps.

One, three, three, they're building up that first emergency fund.

They're trying to get out of consumer debt or build up a fully funded emergency fund. So we usually see that.

“But it sounds like the way her life is structured.”

It's sustainable. It's sustainable. It's like a burn her out. Yeah, it's actually, I was going to ask if she was working like 60 hours a week. I'd be like, and if it went away, you're still okay.

Yeah, it's not a big deal. So that's a great place to be. Well done Sarah. All right, let's go to L in Cleveland, Ohio. Hi, L, welcome to the show.

Hi, thanks for having me. Absolutely. How can we help? Well, I wanted to get your advice on where to allocate my funds. I am, um, and kicking in new life and seeing or taking out a new life and seeing in my career.

It doesn't necessarily guarantee an increase in my salary. However, career growth, um, there are six form modules. I need to take and they're about 850 each and it's monthly. And then there's a review after that that's 1500. Um, I currently has 18,000 pay off in credit card debt and a mortgage about 180,000

do, um, on the house. Okay. So as a single mother, a few kids, you know, just wanted to know, where, where, what do I do? Do I fill it down? Do I hold off on this until I'm in a better position?

How soon will this advance your career?

“Like, how, how, when do you have to, because you said it's not an immediate race, financial”

role, financially, no, but at the same time it is, it is part of a, um, part of the deal of this position that I took about a, you know, a couple years ago. So it's required goals for me to obtain this. Yes. Okay.

And they're not going to pay for it. Well, I get reimbursed after I pass the final exam up to 5,000, which doesn't, I will still be sure, a couple thousand dollars. Yeah, I mean, you said it's 850, you got 6 more plus 1,500 for the exam, right? Okay.

So that's 1,500 bucks for the classes in an extra 1,500.

So basically, you're just paying for the exam when you think about it that way.

So in that regard, it's not necessarily, it's slowing down your debt free journey, but then you get that 5 grand reimbursed, you can slap that on the debt, right? Yeah. Yeah. And it's somewhat required for your position, too, right?

fashionable. I have to do that. Yeah. For your career.

“So I would, I would go ahead and make sure, number one, can you cast fluid?”

How much, how much do you make a year?

Um, about 115. Oh, good. Oh. Well, you could probably do, you could do both of this. Yeah.

Do you have enough margin to cover the school plus throw money at the debt? Yeah. I think in some months, it might be short, but most months, I might be okay. I guess I just am like, I'm not sure to get the debt paid off fast. So that I'm free of it, you know, and just slow down how, because I can push back the exam.

It's offered a couple times a year. Okay. So the exam portion could be, because once you, once you go through the classes, you can get reimbursed, or is it only once you pass the exam? Once I pass the exam.

Got it. So that money sort of locked up, you sort of already paid that. How long would it take?

Let's say you didn't do the courses, and you just went full throttle on the credit card debt.

How quickly could you pay that off, making one 15?

“I think I could, I think I could pay it off rather quick, and I'm fortunate.”

Well, kind of. I had rolled it into 0% about a year ago, so they, and I know I had that transaction fee, but I think a long term, I knew it was going to save me money, based on what I could do. So I think at this point, I could, I could knock it out within, I don't know, maybe 16 months.

One is the 0% period over. One of them, there's 7,000 that I have 7 more months on, and then, oh, I'm sorry, 7,000 that I have 13 more months on, and 10,800 that I have 7 months on. So we need to get this done real fast. Yeah, I was going to say 15 months, I want to pay 5% for the balance transfer, and now you're

going to pay the 25% interest once it pops back out. Look out, there were 3% but yeah, there was a fee. 3% for the transfer out of your A10 grand. Then in that case, I would, if you were saying, hey, I can push this off, it sounds like you're not dying to get this person's done, but I would use this as fuel to get out of

this so much faster and make it, can you do this in 7 months?

I was going to say 7 months, yeah. Well, I, I don't know, with what I currently have. Are you bringing home 9 grand a month? No. Hey, grand 7.

What is it?

“About, I think it's about a little under 7.”

Okay. Yeah. So 2,500 bucks will get you done in 7 months on the credit cards. So out of your 7, can you find 25? That's your goal when you make your every dollar budget tonight, is go, what can I

shave? Do I need a sell stuff, make more liquidates and savings over here? Do you have anything like that, any liquid cash you could use? I have my emergency of about 1500 right now. Okay.

We'll leave that there and just use your future income then for something to sell, but that would be my goal now. You kind of have it set for you by the credit card companies seven months, 2500 bucks a month. I think it feel good, you know, spring of 27, that you're completely done for you. You save throughout the summer and you can retake, you know, or take this test.

And then time it's worth it. Of course it's kick back up, right? Yeah. And I think where I can cut would be some food. I mean, I tried to keep it minimal, but then crazy with family coming in and out.

But also do I, I mean, case would be the other area going by my budget. So I am trying to do 10% sure for tight. Yeah, I would keep generosity in there. I think there's something. Yeah.

I want to give that. Yeah, I wouldn't. I wouldn't. I wouldn't. No.

Well, other than what goes out of my paycheck into my 401(k). I would pause that for those seven months and even until you have an emergency fund. Because that's going to give you even more margin. How much are you investing right now? What percentage?

5%. 5%. Okay. So here's the math on that. Out of your 150 in income, you're talking about freeing up 5700 bucks.

Okay. So that's almost 500 bucks a month that you could be putting towards this product card. That adds to this. Yeah, absolutely. To find 2,000.

Because you just freedom. 500 bucks. In the 25 at this, that's 3,000 you're out of debt even faster. So it's in, yeah, it's kind of just that math game and L remember during this period. It is.

Beans and rice rice and beans. So we talked about, but it is that scored-stirth mentality where even like all these a great grocery store, super inexpensive food, right? So you can do that. I mean, like you find your ways just to push through yes to get creative and it's just

for a couple of months. It's not forever and Christmas may look a little different this year for you. And that's okay. Everyone's going to survive. Being debt-free, that's going to be your key.

You call one company get transferred three times, sit on hold for 45 minutes and end

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that's right for you. So to find a local Ramsey trusted agent who has your best interest at heart for free, go to RamseySolutions.com/agent or click the link in the description if you're listening on podcast or watching on YouTube. All right, up next, we have Caitlin and Indianapolis, High Caitlin, welcome to the show.

Hi, you already said my name, I'm just sorry. No, you're great. Yes, absolutely. Thanks for calling in. Yeah, we've worked in their home in May of 2025, we are up to date on all payments.

We've got you badly at all. However, we discovered there are about $100,000 in structural damages to our house, foundation wise, and it's also resulting in our electric bills being around 1,600 a month. It's not really feasible for us anymore to keep living here with how it is, however, we did find out that through my hairdresser, she was actually apparently under contract by

our house before us, and her inspector found all the structural damages and reported it to the seller.

So the seller never disclosed it to us on the seller's disclosure, which is fraud.

So, we have a turn to open everything, we already paid the retainer and sent give me a letter, however, our turn is running about $30,000 to receive with this case. So our auction's kind of right now as it stands are from the $30,000 to see the people who sold us the house, and if we win, then we would profit about $250,000 to $300,000. If we lose though, then we're $30,000 in debt, and we still have the $100,000 in structural

damages that would be unfixed completely, and we can't sell our house because of how much is wrong with it. We would end up losing about $30,000 on it right now as it stands as well, so we don't really know what to do, like in this in okay situation that put ourselves in the debt.

“What's your financial situation, how much debt do you guys have outside of the mortgage?”

About $3,000, I mean nothing, I know it's not, but it's nothing absolutely astronomical. How much do you have in savings? About $1,000, not much. Have you contacted other lawyers? We have looked around everywhere in our area, and everybody is running about the same exact

price. It's about the 415 hour that I'll want to $7,000 retainer, and they're saying that it's going to cost $20,000 to get it done. Starts finish. I'm trying to think of there's any lawyers that would do it.

Sort of. Yeah, no, no, no, no. I don't call it the back end. My uncle's a lawyer in the area, he doesn't practice the type of law, but he said that's not really a common thing in this area.

Because it sounds like if you guys pursued this, you would win. I'm confused how it happened.

And so at that point, I don't know how they go, "Yeah, we're not going to pay this."

Exactly. What worries me is that they're saying that they're not going to pay it, and I don't have it either. Right. That's my guess is they don't have the money to pay it either.

Yeah. So my fear would be, aren't poor either. These are people who are flipping houses for a living. I mean, they live in a massive home. I don't think that they're poor.

I just don't think they have $100,000 straight up front to pay it. Yeah. Probably not. They're probably leveraged in all areas, so that would be the thing. They would be forced, I guess, from a lawsuit perspective either to come up with a money

in a amount of time, where they would sell an asset, you know, they're primary home to pay. I don't know. It does feel like it still feels like a gamble to me that you're going to get that

much money out of the situation, so I would hate for you to go $30,000 risk that.

So the next option is, if you were to sell it, you said you would lose probably $30,000

“on the home sale, is that with the structural damages like being upfront with those?”

Yes. Since we would have to legally disclose all of the structural issues to the house that we know about our house, we bought it for the $200,000, our home wouldn't be worth anything more than $120,000, we'd maybe get a $150 out of it as a couple of we would have to spoke to us about.

And have you had any contractors out to look to see if you were to rehab it, what that would be, what that would cost? $100,000. $100,000. $100,000.

How many bids did you get, how many people did you talk to? We have talked to probably 10 to 15 different companies. And they're all around there. Yeah, $100,000 was actually the cheapest we could find. Wow.

Well, I wouldn't give up on the search because right now your best case is still finding a lawyer who can do it on contingency.

And so I would ask around, call them more real estate attorneys and say, hey, do you take

concealment and on disclosure cases on contingency? The other thing I would do is check if you're a title insurance or a home warranty would cover a portion of that and dig into the fine bread. Yeah. Yeah, nothing would cover it.

“And you're inspect your title insurance and find out this?”

What was that? I'm so sorry. Now, you're fine. Did you have an inspection? Yes.

We did not inspect your misstep. And missed it. But the previous one caught it. Yeah. So it's documented somewhere.

Yeah. Can you get a copy of that inspection report? Yeah. We have it. My attorney already has it.

Okay. So they've seen this all. They know there's a case here. But they're going, hey, they start my hourly rate. This is going to cost you this much.

Yes. Oh, man. I'm so sorry. It's brutal. I know.

It's not your fault. It's just a bad situation. It is a bad situation all around here. Yeah. My husband excels 100,000 a year.

So I mean, I don't even think that we could financially budget it for $30,000. Right. With course of a year with three kids as well. I just don't think that it's feasible for us. Yeah.

We would 100% have to take out a loan. Right. And I can't. I wouldn't advise you in good faith to do that. So I would either continue calling attorneys and maybe some that aren't even local, right?

I mean, maybe you hop over to another city or something, you know, still in the Indian it somewhere in the year. But I mean, I think I would slowly start trying to probably fix it because selling it then puts you in negative $30,000 with with no equity, nothing starting over versus like what stages over the next three years are we going to fix this house, right?

And it's a slow process and you fix it little by little and then you, you might get in

“there and do maybe half of what you feel like you need to do and it actually ends up fixing”

a lot of the problem. And you know what I mean, like you could, you could get in there. But I would, that's where I tend to lean and on the other side. If you want to save up and pay the retainer and go, hey, we're going to pay you the rest once the case is closed, they might be willing to do sort of a partial contingency there

if you cover the retainer. So that might be. We are selling stuff. Once the kids are down, you're going to get a side job. He's working in extra 20 hours a week so that you can come up with that money.

Because that's still your best case scenario as far as the financial damage. Absolutely. Oh. Yeah. Joyce of home ownership.

As all the parents go, kids, you're throwing away money on rent, go buy a house and you see situations like this. Yeah. But that's the other question thing, just immoral people, that they know that there's an issue to home owners and they don't disclose it.

I mean, complete fraud, completely illegal. You cannot do that. And every part of the month that justice, but also I can't tell, I mean, I couldn't advise you to go $30,000 in debt for still a little bit of a gamble, but if you win or not, what that looks like.

Because then it's just insult to injury, now you're just in a way worse place.

Where I would rather you be putting your money toward something you know is healing the situation rather than a gas, right? Unless they can... More in your control. Yeah.

Unless they can take the retainer, ask for the $7,000 up front and say, "Hey, would you pay this?" Yeah, this is like enough to where I would go, all right, I'm willing to at least lose the $7 grand. And maybe $1,000 a month, you know, over time, to get the rest, I don't know what kind of deal you could work with an attorney to...

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1749, Mallory Lane, sweet 100, print went in to see 37227. Up next, we have Derek and Los Angeles. Hi, Derek. Welcome to the show. Hey, how are we going?

Hi, we're doing great. How can we help? Yes, so just a quick question. Just learned about you guys, also like last year, and been doing some studying and now I'm settled at a criminal's room in life on $15,000 in debt, I was zero savings and I'm just

living paycheck to paycheck and just trying to wrap my head around how I can get out of the rat race, you know, purchase and property, and you know, just things up from up from my children. Yeah, absolutely. Do you have kids?

I do have three phones. Okay. Are you married? I'm not. Okay.

So you've got three kids.

Are you single dad? Or is it shared? Yeah. A shared custody. Okay.

And what are you doing for work? I'll work out at the school program at a local school district. All right. What are you making doing that? Well, during the summer months and, you know, vacation time, I don't make anything.

But on average, I'll say about 40 to 48 per year. Okay. This is the 15. Um, the 15,000 is mostly consumer debt, a few credit cards and stuff, and I also have a housing and a vacation for 12,000.

Oh, boy. Yeah.

“This from a past house that you didn't make payments on?”

Uh, yeah. I took over at least one of my mother passed away, didn't realize like what I was getting myself into and by the time I'm being realized, it was kind of too far gone. Are you current on your rent payments now at your current place? Yeah.

Yeah. Okay. But you still owe the 12 on top of the 15? No, no, that's part of the 15. Okay.

Cool. So 15 total will make $1,000 in credit card debt then. Yeah. Okay. Gotcha.

That's a better picture. Yeah. How's about to happen? Is it like a payment plan on the, on the past due rent for the eviction? How does that work?

Um, I have not started that payment plan, um, it just recently popped up on my credit report.

“And so that's what kind of, you got me like a little worried here.”

Mm-hmm. Um, Derek, what have you been doing this summer for work?

Um, I have, I have just kind of, honestly, blew through my savings and, um, just, you know, to spend time with children, vacations and, uh, I kind of looked at now, like, you know, I could have, could have used a couple grand for some other things. Yeah. Yeah.

Yeah. Well, the biggest glaring piece of the situation that I see is income. Um, how many hours of a week do you work when there is, like, during the school year

“when you're actually doing the after school program?”

Is it, is it a 40-hour week job? Uh, 28. Okay. So yeah. I mean, I see there's a, there's a lot of time available and opportunity available for

you to fill out at least to 40 hours getting a side hustle because if you can make Derek

and another 1,200 bucks a month, like that, that's a game changer for getting this

debt paid off. Like, if you could get this debt paid off in one calendar year and I'm, and think about working 40 hours a week, during next summer to, right, if you're thinking about the full calendar year through June and July of 27 when you map it out, um, there's a great chance that you could be debt free in a year.

It's 1,500 bucks a month, you're done in 10 months. Yeah. So now the goal is, okay, where do we come up with this? And it's going to be partially spending less, partially making more, probably mostly making more.

Because you're, if you're in the LA area proper, making $40,000, that's a tough way to live. Yeah. Are you in the city? Oh, just outside the city.

How old are you, Derek? I'm 36. 36. Okay. What's your, what's your dream?

“Like, if you could look forward five years, what would you be doing?”

And let's say you're making 70 grams, and you are love in life. What, what would that job be that you would be excited to get up and go to work in the morning? Well, right now, we're working at education and I love working with the kids. So I'm in school for any theology.

Okay. Trying to become a teacher, a P teacher and F, and full ball crotes. Yeah. Oh, that's awesome. And you're in school right now, you said?

Yeah. How much is that cost in you?

I was community college and it's basically free.

Okay. Yeah. Good for you. What would you be making when you're done with that degree? And if you've got a full-time job doing that, what would that bring in a year?

Um, I have seen some post things, different high schools in the region around 80 grams. Yeah. That's fantastic. Okay, so Derek, that's great. There's hope.

One of you done with this program. I have another year now. Okay. Okay. So in the meantime, we got to clean up this debt before then.

So how cool would it be? A year and a half from now, you're done with the program. You have no debt and you will fully fund it emergency fund.

“That's why I need to put on that from there.”

That is the goal. Nothing's going to stop me from being there 18 months from now, which means 10 months from now. I'm dead free. Another 8 months from then.

I've got 25, 30 grand in the bank. That's the goal. And however much work it takes to get there, we're going to get there. So what is your schedule with the kids right now? Uh, at the school, I'm not joking.

Your kids. Oh, um, it's kind of fluid, um, I'll have a week, week all week all. Okay. That's what I was wondering. Because if you're a week that you don't have them, I would be working like a madman.

So that's going to mean, I'm selling stuff, I'm flipping stuff, I'm, you know, doing the delivery apps, I'm going to be walking dogs, I mean, there's a lot of people. Go find some nice neighborhoods and go, what do they want done that they don't want to do themselves? Pretty much everything.

And sometimes, you know, these side hustles you want to, you know, be the next kind of step into the next career in your situation, but you already have that. I mean, you'll have that in a year and a half regardless of what your side hustle is. So I would find the thing that pays you the most for your time. Yes, absolutely.

Um, yeah. And I'm doing some calculations here, because I want you to think long term, um, because you said I want to have a house for my kid. Like I hear this in you that you're like, I want, I want my life to look different. I want to, I want my kids, our family tree to be changed.

I want my kids to see something different.

Here's what's wild is if you, um, if you, because investing for me is such a, it's such

a game changer for future Derek. So if you graduate this program, you become debt free, exactly what George is saying. You get an emergency funds, you got to, you know, a down payment on a home at least 5% to save up, which will be a little bit in that area because I know, you know, so they're going to come for you as expensive.

And then you do the baby steps, which you start investing 15% of your income to retirement. And as in your income will continue to grow throughout your life. But let's just say, Derek, for 25 years, you work, and then you invest $1,500 a month.

So there's something powerful up, I want you to map out what future Derek is going to

look like. Right. And you may have to work past 59 and a half, right? In 25 years, if you go to Ramsey Solutions.com, you can pull up the investment calculator. These are just numbers.

I was just putting in saying that you have nothing in retirement right now. And you invest $1,500 a month. Even in your late 30s, because people feel like, wow, I don't have time now. I should have started at 20. That's right.

You still have time. Yes. And it would be you working a little bit longer.

“But man, I mean, that's what's wild about all of this is starting today.”

Something, you know, things are going to change, but that means your life day to day is going to have to change.

It's going to have to look different.

You're going to be working more to get yourself out of this consumer debt. So that you can save for a house. You can start saving for retirement and so forth. I understood. I understood.

Yeah. I've got the marching orders. Yes. It's far. It's like it's far.

It's like saving for a home, like out of that look home. The same way you would save for your emergency fund. Once you free up that debt, you've got to fridge some freedom payments. Now we're just trying to live on less than we make. So if you make 40, we've got to try to live on 30.

If you make 80, we've got to live on 60 and bucket that other 20 grand into high yield savings for example.

“That you just put that in a high yield savings account year after year, five years of 20”

grand is 100 grand. So now by 41 42, you have six figures for a down payment. So there's no magic on for this. No. But when, if you go to ramsysolutions.com/realistates, there's kind of our parameters around when

buying a home, how to do it wisely. But yeah, you got some big goals ahead of you. If you actually stay on the line, Christian will pick up, and we're going to give you a copy of Dave's book, Total Money Makeover, because it walks you through the baby's steps. And this is exactly where you're at.

Like you are starting off. And if you start today, man, Derek and 20 years is going to love Derek today. A lot of banks are happy to hold your money. But Fairwins Credit Union helps you make progress.

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Welcome back to the Ramsey Show and the Fairwins Credit Union Studio. I'm Rachel Cruz here with George Campbell. Taking your calls at Triple 8-825-5-225. Next we have Amanda in Dallas, Texas. Hi, Amanda.

Welcome to the show. Hi. Hello. How are you? I'm good.

Thank you. Great. How can we help today? Okay, so a couple of months ago, my last parent passed away, and I have read a substantial amount of money.

My fiance, so I immediately did, you know, the recommended steps, well, my fiance is wanting me to help him pay off his debt. He has about $18,000, not $18,000 for the credit card debt, and of course, I'm willing to help him. I don't expect the money back, because I know in the long run it's going to help us

like our family, but my stipulation was per roles, you know, close your credit card account.

“Once that pays these credit card accounts, you have to close the account.”

And he is saying that I'm financially of using him, because I'm requiring him to do that. So, I just... Yeah. I don't know. That's like saying, well, like, I'll pay for your rehab if you stop using drugs right

now. Well, he's like, "Hey, come on, that's abusive. I mean, join my life." So why is he anti-closing the cards? Is he still using them?

He still is using them. Okay. He pays, he pays about, he gets a payment from his disability, his VA disability, he pays

So I know that, you know, he would pay it off soon.

He started at a crazy amount of debt, like $60,000 and he's got it down to like 18 notting. But we also he's looking to get a new vehicle and he wants to start saving for that. And so he's like, "This fast tracks everything." So... What are you guys getting married?

I'm a tober of next year. Okay. So a little over a year. Yeah. Well, it sounds like you guys are not really aligned with financial goals or values.

It has been a process. We've been together for nine years and... How old are you? I am 31 and he is 34. Okay.

How long have you been living together? Five years. Okay. So he sees you guys as a married couple where it's okay. So he's already doing life together.

Just go ahead and pay off my debts. What are you doing? Right. Okay. Well, the fact that you're not able to tell someone to change because they haven't had

change. Yeah. I mean, it's been a lot of comfort here of just you guys kind of doing life together without the actual commitment and financial legal protection here. So that's my biggest thing is if you're going to ever pay off as credit card debt, please

don't do it until you guys are legally married. Okay. That's number one. Number two. He's really not going to like that.

I would not pay as credit card debt if he's going to go back into credit card debt. And it's not a year financial abusive. It's we are misaligned financially and so I can't in good faith from my values. Do this. Knowing that you're going to go back into debt with a car payment the next day.

Right. Yeah. Okay.

“I think he's a little bit beyond a skis here saying that it's abuse.”

I can't put it on. I can't put it on. I know. That's like so offensive to people that actually. But I think he sees he feels a little bit emasculated that you're stepping in to sort

of save his butt with stipulations like, you know, it's mom with rules.

Well, and the problem is it does sound like because it is, hey, there's a condition

to what I'm going to do and I believe, I mean, I don't think you're wrong in that. I mean, but I think the biggest red flag, if you dig a little deeper, is that this is good, if you guys don't get aligned on this, this will be a tension point in your marriage going forward and it's going to be really hard to build wealth. It will.

And we see it all the time that, you know, you know, the wife, you know, husband or wife, you could put either one on the scenario, but you're wanting to get out of debt, you're wanting to save for retirement and do all of this and he's like, well, I'm just going to go out and get a truck payment for 1200 bucks and not tell you because you would just shame me and make me feel bad, I'm going to go do it, right, like there's a, it's this,

“it's a level of immaturity on his part personally is what I think.”

So I would get, I would be aligned and you don't have to be the same person. I'm not saying that. You don't have to be the same person when it comes to money. Winston is very different than I am with money, but our overall household values are aligned. And so when we have to make big decisions, you know, for the most part, we kind of have

these, these guardrails that we make the decision within, which is so helpful and I'm scared there's no guardrail for you all, it's just, it is what it is and it's been like that for five years in your relationship because, you know, you guys have been acting like you're married and so that's when these habits and these patterns really start to play in and then the moment it changes and you start to feel like, oh my gosh, we are going to be

a married couple and oh my gosh, this went full of money happened to her, oh my gosh, he lost his job, oh my gosh, I lost whatever it is, right, it starts happening, it starts to magnify the situation and so I would get with, with a marriage counselor or something. I'm going through financial peace and diversity as well. Yeah, and I would do work just on your relationship as a whole Amanda too because I do

wonder what patterns have creaked in for you all that you want to look different in marriage and one of those is probably going to be money. Yeah, I definitely feel like at the beginning of our relationship versus, you know, now not nearly into it that there's been a lot of mental change about the way that he views money.

My parents were very frugal and they taught me what to do and his parents did not. And so it's been a big, more of a learning curve for him, I have faith that, you know, he's going to get where he means to be, but also like he said, it raises all my red flags. Yeah, it should come in your nine years into this. How much did you get with your inheritance?

Just shot of a million dollars.

Okay, yeah.

“Have y'all talked about what you want to do with that?”

Have you even had the discussion with him?

IRA and then they also had a brokerage account and then they had CDs and then they also had

checking and savings account.

“So they had a little bit of everything and I'm keeping the brokerage account as is, I'm”

not going to touch it, I'm just going to let it keep growing and I'll put, you know, invest into that, as far as any of the liquid cash I don't know, we do have a house together. So I was thinking about maybe paying the mortgage off. Is that in both of your names, the mortgage? Yes.

And the deed as well? The house deed? Yes. Like this is legally yours. Like the ownership.

I'm sure it is. Usually if the mortgage is. Yeah. So I wouldn't, I wouldn't touch that asset. I would not pay that off now.

“I would wait till you guys are legally married.”

And I don't know why you're waiting till October of next year now. Will we wait until the 10 year mark? What's the goal with the October 20, 27 wedding?

We've had a specific venue that we wanted to use and that was when they were first available.

Yeah. Just, yeah. Just an urgent. Well, I mean, I would not combine it. I would not touch his finances and I would not pay off this house.

I would not do anything until you are married and I'm telling you. If you guys don't get to the root of some of this stuff, it's going to be constant conflict. And you may look up after you get married in this 900 grand of inheritance. Maybe spent very quickly. When I wrote my first book and launched the radio show, things looked a lot different.

“I was out selling books out of the trunk of my car.”

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Welcome to the show. Hi. How are you all? Hi. We're doing great.

How are you? I'm doing well.

So essentially a year ago I bought my first house and shortly a couple of months after

I bought my first house. I wanted to get some work done on a backyard and a parking area. So I had a contractor to do that and then they worked on it for a little bit and then eventually just stopped coming out and then left my yard of mess and then I had put $10,000 down on that and it had really actually detracted some value from the house and so it's been a little

over a year that I've been dealing with that now. I've got six months into a lawsuit and for the last six months I have been sort of funding the legal fees month to month on this lawsuit just out of cash flow of margin that I happen to my budget but I've essentially stopped a lot of my extra savings. I'm still contributing to my 401(k) but I have a lot less peace with having to contribute

to this ongoing legal expenses without a clear idea of when am I wrap up and so I'm wondering how can I get some peace in just waiting for this to wrap up knowing that I've kind of had to pause my savings while I'm held or he will feed some month. I'm 29. Okay, as has your attorney told you somewhat of a timeline of hey this is going to be

another 18 months or hey because I mean it's hard to have hope when there's no end in sight right? Have they given you any level of timeline? I should know whether it's going to potentially settle or go to trial within the next two

there can take some time to collect on that for them.

“Sure, sure. And did I know where the guy is? Have they been able to contact him?”

Yeah, I'm sure there's not going to be a lawsuit against them so. Yeah, that's not the only one. Just slowly. Man, just go full class action man, this really sucks. Well, how much have you spent so far fighting this thing?

It's about $8,000 in legal fees to recover the 10 grand. So the good part about this is if anything that I put in in legal fees if I win the lawsuit I can get it out because it's one of those special circumstances where I can recover legal fees out of it. So you'll get your 10k plus whatever you spend on legal fees.

I'll get, yeah, I'll get anything that I spend legal fees out of it. Are they going for 10k, is that it? I mean, so theoretically, when we consider how much extra it took to get the project finished and that it's directed value, I mean, I could be looking at getting like a 40k. Okay.

Okay. I also miss because between legal fees and how much extra it cost to have the project done. So I mean, it's a high risk, high reward type of thing, you know, if I win, but, you know, so it kind of feels like anything that I put in in legal fees is a little bit of a savings account that I should eventually get out with.

There's over a small chance that I can't recover it. I'm just looking to get some peace, you know, and paying legal fees a month a month in feeling like I've had to pause night savings and I can't really like get back on to the, you know, path in life that I want to be on in terms of aggressively saving. Sure.

Well, you know, it's hard to find peace when you're in the middle of a battle, but I'll give you hope that this is not going to be forever. You're still going to be okay financially later on in life and you'll look back and go, man, don't, don't miss that era. That sucked.

Remember when I had to spend 20 grand to fight this guy, and maybe I got it, maybe I didn't, but how old are you right now? I'm 20 on. Okay. And how much do you make about 150 a year, 120 based, and then I'm a part-time professor.

So incredible. Take classes.

“And you have no debt, and you have an emergency fund?”

Great. Awesome. So there's the good news is that there is an end insight and you'll be a 30 year old making 150 grand with no debt and an emergency fund with plenty of time to invest in retirement dignity.

Yeah. Is it the short-term savings you're discouraged about lands or is it longed is it retirement and investing? So I would say that, you know, for the past 6 to 7 months, I haven't really been able to save, like I haven't paused any kind of 401(k) going for the business.

Okay. So it's just short-term savings and you're like, man, I make some much, and I'm, I'm, and yeah. Yeah, it bothers me not seeing, you know, the money go up on a monthly basis, which is like the other time I cover the legal fee, that it's like, okay, there's no money left to save here.

What happens if this contractor's broke, even if they do, you know, have the judgment against them?

So they do own some property, so we know that there's property to go after ultimately

at the end of the day, and so that's not going anywhere, so we're feeling fairly confident about that. Okay. And it's value is obviously more than 40. Yeah.

Well, I would just keep on fighting the good fight.

“There is a level of sunk cost if you want to set a ceiling for like, hey, here's my timeline,”

here's the financial ceiling I'm willing to pay in before I move on with my life, but it sounds like you're so deep into this thing, you're just going to see it through to the end, out of sheer anger. Yeah, but I, I would not let this drag on. We see this a lot with people going through a divorce, or you know what I mean, there's

just in, in that grind of the legal world and dealing with attorneys and being in and out of cases, it's just, it's so, it just wears on you so much. So Lance, I probably would have a timeline and say, I just, I can't take this any further than, I don't know, you, you make it up, 18 months, two years, and I would just prepare myself, um, okay, so what would, what would happen in 18 months if nothing came about this?

And I've paid this much, like, a emotionally take yourself there? Yes, I would. So they're prepared. Yeah. And just to be like, okay, so then what would my life look like financially at that point

and, you know, run some numbers and say, okay, if I start saving, then I can get, I can save this much a month and that's going to go towards this next goal, like paint your life of what that would look like. And then paint your life, 18 months for now or whatever, I'm just making up a timeline that you got 40 grand, um, what's going to be happening, what are you going to do with that, right?

And so I would probably paint both scenarios because as much as you want the law on your

side, uh, but a sneaky as people are like that, I'm like, they're not, yeah, doesn't always

follow through the way you want it to. Not always a happy ending there, but I would let it live rent free in your head.

Yes.

Have a hard time not thinking about this every waking second.

Yep. It's for the best. All right, let's go to Sarah and San Diego, high Sarah, welcome to this show. Hi. Hi.

I'm having me. Don't be too excited to talk to us. How are you? I'm fine. I'm just overwhelmed and you know, very anxious about my financial

career. Okay. What's going on?

So I was going fine, you know, had a really good job and then this bug bit me that said,

“you need to, you need to start a business.”

So I started business, um, about two years ago, um, in the midst of starting that business, I started taking on taking out loans for it, um, and so like right now, so my husband and I come by and I was saying, we make roughly around 250, right? Right. Yep.

Oh, man, that's starting to be in it. I have a personal loan, 35,000 to interest rate 9.9% is that for the business? I got 50K. Oh, yeah. I took out for a business.

Okay. Um, another one that's 95K, interest rate about 7%, 7.7% for the business. Um, for the business. Yeah.

Is that like an SBA loan?

No. No. They were just personal loan and I started doing SBA route with the rates were better

“on a personal side and so my goal was just to pay them off early, right?”

Um, but then I think I just got in way over my head. Okay. What else? So we give us the total amount since we're up against the clock. What's the total amount of consumer debt you have?

Right now. Okay. So I have, let me see, 85, 85, 95, so that's the 188K and then the 35K, so what's that? 115K? And then I have 401K loan, which I recently did, which is 23,000, and then I have stood

alone 60,000 because we had 220,000 forgiven things on a mortgage, which is 299K, and then a car alone for 29,500. Um, as far as income, like I said, we'll make about 250, but all our money is wrapped up in debt. Yes, it is.

Okay. We've got a lot to unravel here, so yeah. So Sarah, if you'll stay on the line, we have to go into a break right now, but we'll come back to you in the next segment and try to look at this. I don't want to say dumpster fires, Sarah, but it's just--

Well, I just want to stay. I got the complicated order. That's how it feels. That's how it feels. No, we're going to help you, Sarah, we're going to make a plan, and you're going

to go from overwhelmed to feeling in charge, and really tired, because we're fighting to be a lot of work that's about to happen, but it's going to be great. [MUSIC] Hey, guys, it's Rachel Cruz. When it comes to life insurance, most people fall into one of two camps.

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They're an independent broker who works for you, shopping all the top companies to find the most competitive prices on coverage you need. Get instant quotes online in just minutes at Zander.com or call 800 at 356-4282 to get your family protected with term life insurance. All right, we're going to go back to Sarah in San Diego, so just to kind of recap, I think,

Sarah, if all of our math was correct, you have $327,000 in general, and I think that it's just to kind of recap, I think Sarah, if all of our math was correct, you have $327,000 in consumer debt, you and your husband together make $250 a year, and most of this debt, a bulk of it, was because of this business that you started two years ago. It's like correct.

Okay, what kind of business is it? A venting machine business?

Social media? The internet. TikTok? Yeah. I've seen this.

“I've reacted to many of these videos, and they were like, oh, you just get 20 of the”

machines? Sarah?

How many venting machines do you have currently?

Uh, 15, 15. And they're all leveraged. I don't know. Yeah. Okay.

Yeah, it's hard to make a profit, you know, 75 cents at a time on a, on a Reese's bar, so. Okay. Are we, and you're keeping it running? It's still happening.

How much does it make a year? Yeah. Um, you know, after the expenses, yeah, maybe 45,000. Okay. So it does.

It does spit out a profit, even after all of your payments. Yeah. Yeah. That's factor in. Okay.

Wow. What other assets do you guys have? Like if we said, hey, let's do everything we can to pay this off quickly.

You're saving 111,000 in investment account, uh, retirement or non-retirement, non-retirement.

Non-retirement. Okay. That's good. Then we have about, I said, 10, but I guess the closer about 15,000, just in personal check in state, um, right, and retirement, we have about 400,000.

Okay. All right. Whew.

“So how badly do you guys want to get out of the step?”

Uh, badly. Okay. You're willing to do anything. Is your husband on board? Yes.

Yes. Yes. Yeah. That didn't convince me. Uh, you know, I mean, there may be a little more conversation around it.

So there's, like, give me some time. Okay. What would it, what would it take for you to get out of this business? Could you sell all the vending machines or sell the business as a whole?

No, I think we talked about that.

We talked about that. Um, I'm open to it, but the thing is, I didn't want to do anything in talk. Yeah. You know? Well, this might be your key to getting out of debt.

Yeah. Have you priced it out what you could get out of this business if you sold it? No, I have it. And, you know, we shouldn't have bought it from a company or you buy them in bulk. And then you pay that company a big dollar amount, right?

Mm-hmm. It was terrible. Okay. What do you do for work outside of this? I'm a PA.

Okay. And how much do you make for the, with that? Uh, I mean, base pay about 165. 165. And what does your husband make?

Um, I would say about 60. He's a supervisor. Okay. Hospital.

“So the 250 includes the 45K profit from the vending machine business?”

Right. Right. Cause it varies. I mean, I, I've sent out average 45, 45 may be on the lower end. Okay.

Because a part of me is like this is spitting out 50 grand if you did keep it going. Yeah. And four years, you know, that's helping take a chunk of this 200 off of your 3 25 plus your investments. Um, yeah, I definitely would be selling those investments to knock out a huge chunk

of this. And I would just list all of these debts out smallest to largest balance. Have you done that yet? Mm-hmm. I have.

Um, I guess I was just kind of throwing off with the one that's like the 9.9% interest rate. Sarah, we need to just ignore the interest rates right now. That is the least of our problems. Because if we were doing the math, we wouldn't be continually going into all this

debt. Well, a 7%. It was a good deal. We need to start looking at all debt as the enemy, regardless of the interest rate.

So what is the car works that has 29,000 left on it? Oh, I want to say, maybe 35. Okay. Is that you have two cars in the house right now? We do want paid off.

Okay. Cause I'm wondering if you got rid of that car payment, that leaves a little bit of room. You got six grand from the profit, take a little bit from your saving, you can go get you, you know, 10, $12,000 car, get you from A to B, knock out 10% of your debt. Yeah.

And we actually did talk about that. It makes sense. Um, the thing is, I drive a lot. Oh, five just have to make sure I get a car to work it. I promise you, there's $12,000 car is that run that are fuel efficient.

Probably more fuel efficient than what you drive right now. Yeah. Cause if you take your 327 minus 111, now you're going to have to pay taxes on some capital gains on that investment, right? Right.

And that was the part, yeah. That's okay. That's still worth it still worth liquidating. And then we take out that car loan. We're going to sell that, make a little profit in by something in cash.

Now we're down to 187,000 while we're still making 250. And we freed up a whole bunch of pants. And what if you learn to live on 100,000? God forbid. God forbid.

Yeah. We have a very low key left side. There you go. Like 800. So if you can throw, yeah, and I know after taxes and stuff, 250 goes down.

But I mean, if you could throw an extra gosh 75 or so, plus a year at this, you guys are,

Do you guys take home about 15 grand a month?

“Um, I make it a little less, making about 13, because that was to do have another side”

job too. I forgot about. What is that? Yeah. Yeah.

And I make about 25. I think on the side. Oh, right. That sounds safe. Mm-hmm.

Because I'm wondering, like, what is the maximum amount you think you could actually throw at these debts? If you did what we said, you freed up a bunch of payments, now you're down 187, by knocking out some of those smaller debts. How much could you throw a month at this thing?

Could you throw eight grand at it, nine grand? I think so. Okay.

So, you know, if you pause that, you know what happens, you just gave yourself a raise to get

out of the steadfast. Right. And guess what, you guys are going to be okay. If you make this kind of money and your debt free, imagine how much more you could be investing.

But, Sarah, you, you guys, you and your husband, number one, you'll have to be on the same page. This is not going to work. If you go and do all of this and you cash out, 110, 11 thousand dollars out of a brokerage account, then you guys get right back into it.

Like you both have to really, really be on a team and say, this is what we're doing. It's going to be really hard to do it without him. And if you feel more stressed because of all of this debt, then he does, you have to, you have to explain that to him.

“And you have to tell him how important this is.”

He needs to tell you what he's feeling and think. I mean, this is like a therapy session, right? We're getting it all out because I want you guys so united. And this is an, this is an extreme situation, Sarah. I mean, $327,000 in just consumer debt.

Like, that's a lot. That's a lot. And I know you feel that. But that means that that extremeness has to be swung the pendulum the other way in how you handle it has to be extreme.

And that's why you're selling stuff, you're selling investments, you're selling cars, you're lowering your lifestyle completely, you're throwing so much of this. He's working extra at nights, you guys can still be doing. I guess the vending machine stuff, if you want to keep it, I would use maybe that 45 again to throw at this debt.

I mean, whatever you are doing, but you guys are working like crazy, you're living on nothing. And it's got to be extreme because the numbers are extreme. Right. So how quickly do you want to get out of debt?

If you said, here's my timeline.

“How many months until you guys want to be debt free?”

I would say max of 36 months. How about we do 18, split the difference? I love it. I love it. Well, here's how that works.

You do what we said, you cash out the investments, sell the car by something cheap, you're at 187 and you put 10k a month toward it, because remember, you paused investing too. So now you're bringing home 15k, you live off five, throw 10 at the debt, you're done in 18 months. That's a dream.

That's a dream. 18 months. So now you both know we said 18 months. We said 10k a month, no matter what, that means we're going to live on way less than we make.

We're going to make sacrifices, work extra. But if you both do that hand in hand, rowing in the same direction, you will be shocked at how far you will go. You're going to land on that shore at no time. And to have just the no stress, Sarah, you guys are, you have 400,000 still in retirement

right now. You'll press play on that after this is all done. You guys keep funding every time. And you're going to be fine. At that point, but for you, it's the emotional stress.

If you had no payments in the world. You're paying out your ears every month. I mean, I don't even know how you keep up with it from a detail. Yeah. I mean, if you told 18 year old Sarah, hey, one day, you're going to be making a quarter

million dollars. You look what? And we are broke. Yeah. She's like, what?

Come again. I know you work too hard, Sarah. You work too hard. So you call them feeling stressed and just, I don't know what to do. We gave you a plan.

And if you do it. 18 months. The peace that comes with that.

And you guys make an incredible income.

You guys are going to do fantastic, but you have 18 months ahead of you. That's the sacrifice. So you know what's so interesting about that last call, George, is, you know, you hear the income, like, 250 amazing. But your habits, what you do with that money, says everything.

And it either says, you can make a great income, but you're still broke. You can make a great income. You could still be a middle class. So you can make a great income and use that income and build wealth or you can make an okay income and build wealth or be broke, right?

And so we talked about this on some of our many happy hour, but your habits can really

put you kind of in three categories, broke, average and wealthy. And there's some clues, if you will, about what category you might be in.

“Could be thinking to yourself, does it, do I qualify for these things?”

Or maybe you're like, oh, that used to be me and now it's not. It's kind of like the old Jeff Fox where you might be a redneck if this is, you might be broke. It's good. So you, you tell us, think about your own financial situation, take a look at your own

spending habits. And if you do these things, it's not a judgment call. We're not mad at you. We want the best for you, but it might be a good reality check as to how you're doing financially.

And if you're on the right track. That's right. Okay. Let's start. Let's just start with the broke.

Showing people habits. Okay.

This one is probably the saddest one on the list, which is payday loans and title loans.

You see these in low income areas. They look like abandoned pizza huts, they're open like 24/7. And these are high interest short term loans that spiral into a debt cycle or cost you like your car. And high interest, 100 per, I mean, like, it's insane.

Because they don't disclose it.

“It's just, well, it's a $20 fee to go get 500 bucks.”

You don't realize. That's right. That's cash. That's a balance percentage. I mean, all of those.

And they prey on the lower cost. They do. They go into these low income areas. And it's horrible. It takes advantage of people that do not need to be taken advantage of it.

And it's just awful. But when you get stuck in that cycle, you're paying high interest debt and you just like you can't get out of it. And that will keep you broke if you stay in that life. So next is rent to own and cash advances.

Whoo. I just mentioned kind of that. And it seems like a smart thing. Well, one day I'll own it. Or, you know, I'll get the cash advance now.

I'll pay it back when that paycheck comes in. But these deals are loaded with hidden fees, exorbitant interest, and it keeps people stuck in this really a cycle of poverty. That's right. For a lot of people.

Yep.

“And last but not least, in the broke category, lottery tickets.”

Yeah. So per zip code, if your state has a lottery, you can see it's usually the low income zip codes is where the highest amount of money is paid to lottery tickets. And it's at a desperation. That's right.

It's like this is this false hope that this is my ticket out. I'm going to win and everything's going to be okay. And people end up spending so much of their paycheck on this. And it's where it is sad because it is stealing from people. And it's statistically impossible odds.

But you tell yourself someone's got to win. And when you're that hopeless, you turn to these terrible habits. So those are broke people habits. If you can break out of that, you probably then turn to the average person habits, which are not much better.

This is sort of middle class America. Yep. This is what we see all the time. We'll start with chasing credit card rewards. So you live on the idea that I'm going to be able to travel.

I'm going to be able to do these things because of what I spend on my credit card. And when that is your mindset, you get stuck in a cycle of credit card debt. And we see it. Probably because we host this show and people call in with the problems. But the one credit card that was supposed to be I paid off every month.

Turns out to be the thing that catches when the when the job is lost. And there's no paycheck because there's no savings. And then they look up and they're $18,000 in credit card debt. And so what ends up happening with this so often is that broke people who have to pay interest and cannot pay the full balance end up subsidizing the rewards.

Yes. Credit card companies can do it because of it. No, no, no, no, no, no, no. I mean, half of the people don't pay off their balances. And America's now $1.2 plus trillion dollars in credit card debt.

Yes. So sure, I would love a perfect world before the fall of man where we could all just swipe our cards and no one goes into debt. We all get there like 50, 50 chance you fall off the cliff. I'm not going to go near the edge.

No, say them pay for this game. So yeah, the game keeps you there. New car payments and leases. Wow, this is where someone goes, well, I want the new work car and the dealer said you can get the payment down to where I can afford it. And then you get into the cycle.

We never get out of these.

You're paying top dollar for appreciating asset. So you paid 50 grand for a car with interest. You end up paying 60 and that car is only worth 20 by the time it's paid off. That's bad. That's a classic example of making someone else rich.

Right. You're making the credit card companies rich. The car dealers the banks and you're paying interest on something that's going down and value. And it's going down and value versus actually making interest for yourself. Which will be a loader in the category.

That's what what the people do. But yeah, the idea of staying in the cycle of debt and car payments keeps you. Keep you average. And then you have the bigger category of just consumer debt. So think he locks student loans by now pay later plans.

These are all really used to fund a lifestyle that people can't afford or the home renovation that you really want. But you can't cash flow.

And then the buy now pay later, which is a lot of the younger generations are falling for this one.

Because it seems better than credit card debt. Right. So a couple of payments. And I'm done. There's no interest until there is until there's fees and status to payment.

And until you just buy more crap than what you need. I mean, that's the craziest thing about that is just a logical money. It is where you're like, oh, I only pay that wall by a couple extra more things. No, that's you're spending more money doing that.

“So cutting that off and yes, living within your means is so crucial.”

One of your favorites, George. Last but not least, whole life, whole life insurance. I just got a DM today. And they were like, hey, my financial advisor is really pushing this index universal life insurance thing for an investment. What do you say, George?

I went, plea. I'm like, I don't want to be harsh. Fire him immediately and run far, far away. That is not a financial advisor. That's an insurance sales person.

That's all it is.

So whole life insurance, permanent life insurance.

Variable universal life, anything that has those words in it. It's a costly hybrid that tries to do both things. Insurance and investments or cash value. And it is a terrible return and costs you so much more than term life. So keep it separate.

Get term life insurance to cover. You know, you're income in case something happened to you. And invest separately on your own. You'll be better off. Yes.

And their insurance is a great place to check out for your term life. Everyone needs term life insurance. Hear me. All right. Finally.

Let's get to some good news. I'm sorry. Unless you're self-insured. I guess the astrict is if you become the next category, the wealthy category. That's right.

And you're self-insured.

You've got a couple million bucks.

You might not need it at that point. But for a lot of people, you guys. That's key. Okay. Well, the category.

I said it earlier and I'll say it again. You're earning interest. Not paying it. So you're looking at you have more things invested. You have things that are actually paying you or making you more money versus

debt companies, right? Banks and car dealerships. All of them. You're not going backwards here or moving forward. It's the next up investing in assets.

So you have assets and liabilities. Liabilities are the debts. Assets are things that actually hold their value and make you money. So think stocks, mutual funds, real estate. These are not going to depreciate and lose value.

“And that's how you actually build wealth.”

You can't save your way to wealth. You need to invest in assets. And really all you need is something like a 401k and IRA, mutual funds and your primary home. That's what we found on our millionaire study. Most people just had those things.

Yep. And that's again, that's what wealthy people do. That's what they end up buying into. And they're not worried about status symbols including their cars. So one of them is that they buy used cars.

You know, they're probably nice. It's like a nice truck or something. It doesn't have to be a beater. It doesn't be crappy. But they're like, listen, someone else take the depreciation.

And they drive it off the light out by a two year old car. And we'll be good to go. I'll pay significantly less because of it. And they're just smart when it comes to their purchasing. And they're not worried about what everyone else.

There's no for a lot of wealthy people. They're not very insecure. You know, there are some that are but in general with their money. They're thinking more in a sense of what's going to make me more money. And they look at a car.

No, no, not that. So I'm not going to put my money into it. Amen. And then next up, dead free housing. It's actually pay off their home early, which frees up cash for more investing and giving.

And last but not least, living below their means. So budgeting, what they've earned, they have a plan for their money. They know what their retirement self is going to do. They know what their next goals are. They really live intentionally including a monthly budget.

You know, they say, hey, here's here. Some people, you know, depending on, I think you're net worth. There may be more broad categories, if you will. But the idea that you just have a plan, your intentional is where your money is going. It's so key.

“So if you want to know how your habits stack up, check out our net worth calculator.”

And if you have a negative net worth, hey, listen, you may want to look at some of these habits. Again, it says this me and what can I do to get out of debt. So we'll drop that calculator in the show notes, link to it. So make sure to check it out. [Music]

Welcome back to the Ramsey Show in the Fairwins Credit Union studio. I'm Rachel Cruz hosting this hour with George Campbell. And we're answering your question. So give us a call at triple eight, eight, two, five, two, five. All right, kicking us off.

So we have Jamie and Portland, Oregon. Hi, Jamie. Welcome to the show. Hi. Thanks for taking my call.

Absolutely. I need some guidance as to what to do from here. Last January, I filed for divorce after 19 years of marriage for an emotionally abusive spouse.

Oh, my gosh. Oh, my gosh, Jamie.

So I basically just have my wet end and call the quit.

He refused to help.

“Not to mention we had a whole bunch of marital debt that when I asked him, can you please step up?”

Can you work extra shifts? Can you get a side job? Can you help in this manner so we can pay off credit cards, medical bills, cars, trucks, all the stuff that people get? He refused to do it.

And basically said that I've worked hard in my whole life. I'm not going to step up anymore. You're the breadwinner. You make the money. You work.

So I'm a PA, so I make 107 bigger. What did your attorney say? How did you guys battle it out in court? Yeah, so we haven't gone to court. We had a date originally.

But that was canceled by his counsel because they wanted to quote settle.

But his idea of a settlement is my paying him an exorbitant amount of money.

Yeah, no, no, no. Yeah, no. We are going to continue on to make sure that you're protected. And not to mention pay him $2,000 a month. Well, he lives in an alternate universe.

So what did you, what did you earn? He doesn't get to decide. Yeah, he's a good guy.

“Yeah, so what's my attorney said basically that's not going to work.”

Because I have so custody of our child and we have split 70, 30. So I have 70% of the time. Okay. I've been paying the child's on my health insurance. I pay for everything.

I arrange all his child care, his appointments, everything. He, the his father has not helped with any of that. Sure. What does he make? He makes 80,000 a year.

Okay.

And what are the debts that like?

So we've owned a house that I finance solely under my name last year. And decided to sell it because I wanted to get out from underneath the debt. And move into a rental. Has it sold Jamie? It has.

Yeah. So it sold and I paid off quite a, I paid off like $90,000 in debt. Okay. And I just don't want you paying off this debt if it's going to be split eventually. Because you're throwing a lot of money out of it.

“Have you figured out what split is and what's his debt versus yours and how that's going to shake down?”

That's what we're waiting on. My attorney said we're going to go before a judge and let them figure that out. Yeah. But but so far it's like what his debt is a 401k loan that he took out to pay for his attorney. And then his student loan which is like 19,000.

Okay. What else is left? What's left is my debt which my student loan's 115,000. And then there's credit cards and consumer loan debt that I've had to take out in my name, because he refused to help when I was trying to consolidate everything.

I fell for the consolidation thing. So I'm going to be stuck with those. And that same thing. Say those totals again for us. You had 115 in student loans.

115 student loans. There's two consolidation debts. One's at 40,000. Another one's at 35,000. Okay.

And there's about 15,000 on credit cards. Okay. And remind me, we're say clarify this. You said I had to take this out to pay for whatever. What was the cause for these?

So we were trying to, well, I was trying to get one payment by consolidating everything. So we tried to, I took out the loan up by myself because he refused to step up and help. And this was just living above your means. Like this was all in the marriage. And it was, there was nothing specific.

It's not like there was a small business that one of these loans went to. No, no businesses. But it's yeah. I would say that we were living well above our means. Okay.

I got grossly comfortable living that way. Sure. And now that I filed for divorce. He thinks that he deserves to continue to live that way. Sorry, there's a helicopter outside my house.

No, you're fine. How much do you make Jamie in your job? 170. 170. Okay.

And what's your rent right now? You said you're renting after you sold the house? Yeah. My rent is 1,400. Great.

Okay. So you have plenty of margin. Once the dust settles and we know exactly how much debt's going to be yours. Now we can formulate a plan as to how we're going to pay it off. Okay.

Is that what you wanted to do in this? Yeah. I started doing this on my own without his help or input. I have 3,000 saved in high yield savings account that he can't touch for the emergency fund. And I've been doing every dollar to put everything towards paying my debt.

frequently for the attorney.

I would just stop the whole debt free journey, which sounds crazy. I know I would too. I would too. But you're in the middle of a storm. We got to pay lawyer fees.

Yes. And anything beyond that, I would just stack up on a high yield savings account. And once the dust settles were done, there's a divorce decree. There's a judgment. We know exactly what's next.

Then we can start pushing play on Jamie's new plan for her new chapter. Yeah. Jamie, the 90,000 that you got out of the sale of your home. Was that all go to pay off debt? Yeah.

It's so it paid off the truck. His truck. His truck. His truck. That was nice of you.

Yeah. I know. It paid off money that his mother gave him.

“So you need to document all of this, Jamie, because these are his assets.”

I would use that to negotiate. You can negotiate 90 grand less that you're going to pay him. Yes. Yes. All of that needs to be used.

Yeah. My attorney has everything. Okay. And it's all in the bank record. So Jamie, let's say that was his.

Listen. You need your number one priority is to take care of you and your son and get through this divorce. Okay. The debt for each earnee can. It will happen for you.

But you, you've had your heart broken. You've been in a horrible marriage. Gosh, the amount of energy even with your son having autism. I mean, all of it, you have a lot that you're carrying. Okay.

“So you need to just don't make any more big moves financially.”

Okay. Stay current. Where you can stay current. And that's it. You need to be stocking up cash on the side that $3,000.

You need to keep adding to that. So when these attorney fees hit, you have the ability to pay them and that you have money saved. Right now cash is going to be your friends. More than anything because it's everything is just so chaotic. Do you want to do it?

Does that make sense? Yeah. That's going to give you stability for now. And then what George said is exactly right. Then once everything is settled, then you can say, okay.

Now I'm going to take that amount of cash after attorneys are paid and everything. I'm going to apply it to my debt for what's left. Because that judge may give him some of that debt Jamie. So don't be paying on stuff because it may be going to him. And then you'll have a ton of cash sitting in the bank, hopefully.

That you can actually throw it this debt and get some big progress starting at. And then you're going to just chip it away a little by little. But yeah, there's a lot swirling for you.

“So I think simplifying and just stacking up cash is going to be huge for you right now.”

And I'm so so sorry you're going through this horrible. [ Music ] 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.

There are 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. [ Music ] We wish that we could get to every call and question here on the show. But if you have a money question, make sure to head over to our website and use AskRamsey.

Our AskRamsey is our free AI tool. And it is built and trained on proven Ramsey principles. And you'll get the answer that you want the Ramsey way. Just like if you call it on the show, you don't have to worry about day of yelling at you. You just get your question answered.

We'll discuss you'll be disappointed. It's going to be a little bit nicer. A little nicer though. But yeah, make sure to check it out. It's awesome.

People have been talking so much about AskRamsey. Yeah, they'll DM me.

And then by the time I get to it, they went, oh never mind.

I went to AskRamsey and it was great. Yes, so okay. It's great. Go to RamseySolutions.com and check it out. We'll leave a link in the show notes if you're listening on podcast or watching on YouTube. All right, let's go to Veronica in Detroit.

Hi, Veronica. Welcome to the show. Hi, Rachel. Hi, George. Thank you for having me on. Absolutely. Thanks for calling. How can we help? Um, so in, back in 2021, my, my husband's brother asked me and my husband to co-san. Actually, my husband really asked him to co-sign on the, um, on the loan for condo.

And since then, he has been paying on the condo.

But he stopped paying his, uh, HOA over a year ago. And now we just got a letter saying that there's going to be a foreclosure on the condo because we out 10 grand on piece, uh, for the HOA, apparently. Oh, no.

“What time period was this over, that he didn't pay?”

It's in April of 2025. Okay, so over a year. Yeah, he had, he had made some payments last year, like a few times. He paid here and there, but it's almost $500 a month. Everyone's, you know, plus $25 like fee.

And, uh, quarterly, they have, like, an additional $1,000 fee. Have you talked to him? Yes, we did. Three months ago, he said that he will make a, it was, uh, at that time it was $6,000 and $300,000 or $400 that he owed.

And he said that he will make a lump some payment of almost $3,000. Uh, like next month. And at that time, we were like, okay, yeah, he didn't, he didn't do anything. So what's he saying now? I would be calling him every day.

No, well, he said three months ago, we had been in touch. Yeah, we just got the letter last night and, um, in the letter. It says that we have to come up with a payment, uh, before July 31st, which is tomorrow. Yeah, it's going to say we got, uh, a couple of hours before that happens.

Do you guys have any money for Anika? So, um, the situation has, uh, he's been trying to sell this condo and it's been on the market for 81 days. Uh, and it's just been, uh, had five showings, would just give you two. I don't know how to communicate that.

Is it over price? Why is it not selling? Uh, it's under price for what he paid for it. I think he paid for it, um, 2220,000. And right now it's listed for, uh, 215k. Oh, bye.

“Honestly, I'm willing to just part with it.”

Yeah, you got to come up with the amount of underwater on to get out of the loan. Yeah. So, um, currently left to pay is $172,000. Okay. Well, I would do anything to install this foreclosure, right?

Yeah, much rather. Yeah, much rather. My question. I would like to know how to stole it. Because it's just a first time we're facing somebody like that.

We always pay everything on time with my husband.

We don't really have them much, you know, How much do you have in cash? Like liquid savings you could come up with by tomorrow? Well, if I was like, um, like, on our, say, like, you know, We're checking account.

Anything. Under the map for some checking and investment, you could sell. Yeah. How much? Yeah.

We're basically checked to check right now. But I think we could save a thousand dollars. I'm saying, could you hand them? Could you write them a check for five grand to buy yourself some time

“and have the other five grand by the end of next month?”

And negotiate with them? Um, okay. I see what you're saying. I mean, if you go through four closures, it's going to be much more financial damage than this ten.

Yes. And you're on the hook for it. Because he coasts. Yeah, that's what we're thinking. We were like, let's sell this condo.

Like, I want to sell it. I want to, I want to, I want to out of it. I don't want anything to do with it. But it's just, you know, what you got. You do have something to do with it.

And I would, I would take it over. And I would look to see if there's a Ramsey trusted agent in your area. I'd get this thing. So I would take it on as if it's mine. And we're like, okay, step aside, brother,

because you're obviously union agent do nothing. Incapable. No, I'm going to, like, get in there and do it. Because you would much rather on the front end to go through the hard work in the misery of getting us sold quickly than I do have,

I do have some, like, investment in stocks. Do you think it would be worth selling my stocks? Yes. To avoid a full closure. Well, I have a 50 grand in stocks.

In just a brokerage account. In, like, individual stocks. Perfect. Yes. Okay.

It's going to hurt Veronica. You're going to be pissed. And you're going to be pissed. And you're going to, like, cannot believe. I'm taking this money on investment.

Oh, my brother-in-law. It's horrible. I know. But that is why.

And I pray your husband will never, ever, ever, ever, ever,

even entertain the idea of co-signing. Yeah. I mean, I'll be burned. Yeah. We actually helped him a few years ago with his, yeah, the credit.

And he had a, you know, he took some credit cards out. And he owned some money. And we just took a, you know, the second mortgage. Well, we were buying a car and we covered that up. And Veronica, this is not hell.

This is not good. This is a nail. This is enabling. So here's your homework. Let's make it very clear.

You're going to sell off enough stocks to pay. What's do so that you don't get foreclosed on.

to recoup that amount when this condo sells.

“So he will not see a dime until you guys are paid back”

for what you put it. And then he's got to figure out how to get the difference after this condo is sold. Hopefully, if he has, you know, he owes 170k. You sell it for $2.15.

You guys can still walk away on scale, even after fees. That's the goal. And if he makes zero profit fine, but you guys need to get your 10k back at least. Yeah.

Out of this deal. Yeah. And you can hire your own real estate agent to do this. You can go to ramsysolutions.com/agent. And you can find one that can actually sell your thing.

And tell him you're in a pinch. Well, thankfully, you do have the money to at least push off the foreclosure. So it doesn't have to be very urgent. But we want this thing. So for your own piece of mind, less about the foreclosure at that point.

Because that'll be all be paid.

The HOA fees. But oh, man Veronica. Soon as your office call, go sell the enough stocks to cover this. Because by the time you can get into your checking account to then wire the HOA company, the money, hopefully we can avoid this.

But be proactive.

“Call them right now and explain what's going on.”

They're trying to get this money by the 31st. And hopefully you can walk out of this thing with just a slight burn. Well, it's wild. As we're recording this show, it's Wednesday. You know what I mean?

And it's hard. Sometimes with depending on the bank. So everything happens first. Yeah. So like business day.

So business day. This is urgent. Yes. Absolutely. Oh, my gosh.

Man. You know, guys, this is another. Got a second hand stress from that. Reason. This is another call.

We can have a whole show about co-signers. This is why you do not co-sign. And it's. It is because the person who is taking it along, the bank does not trust. I don't care how much you love them.

No.

Because here's what happens.

The relationship is destroyed forever. So how is that for loving them? Yep. You know, we love the camels. And if you and when he ever came and said,

Would you co-sign? Yeah. I would say I love you. I love you, George, and wait me. And then no.

That's all you got to say. No. No. And I'm a people fleeting. I want to be helpful.

And I still wouldn't co-sign. Because it's not helpful. It's not helpful to the person. They're not at a good standing place to even be able to. Yeah.

What that says. The lender said, I can't afford a house. But he said, if you can promise that you'll pay it, they'll let me have it. Yes. Oh, man.

And I mean, it sounds like Veronica's pretty much done with the brother-in-law. But what's sad is that just that ruined sort of, it puts a bad taste in your mouth about the person. He's not showing up the Thanksgiving. And then if you even invited him. Yes.

And then if you didn't pay some of his stuff back to the, I mean, like, all of it. It's just, it's not good. It takes a strain on a relationship. It is not helpful to people. Okay.

So you are not mean if you say no. No. I will not co-sign. We're not co-signing. I'm sorry.

And if you co-signed on anything, you better keep up with what's going on with that thing. I would have known the HOA fee wasn't paid month one. Oh, man. I'd be getting notifications and emails. You can get out of it in any way.

If they can refinance, I'd get out, right? If you are in one if there's a way to get out. So make that all be a warning call out there. So Veronica, I'm so sorry you're going through that. But I think there's hope on the other end.

Thank God you have that stock because that is going to help you guys in the meantime. But man, that's tough. [ Music ] Hey guys, George Campbell here. You ever feel like you make good money and still have nothing to show for it?

You run into Target for one thing and somehow walk out $87 later with toothpaste and emotional support candles. Just me? Okay. Well, that's the problem. Most people don't pay attention to how they spend their money.

So it does whatever it wants. And that's why we created every dollar. It's a budgeting app that helps you create a simple plan for your money. Every dollar simple, it's clear and it helps track where your money is actually going. Plus, you get daily lessons to do's and reminders along the way.

It's like having a money coach in your pocket. Your money's been freelancing long enough. It's time to give every dollar a full-time job. Go download every dollar for free on the App Store or Google Play. [ Music ]

The Ramsey Show question of the day is brought to you by Why ReFi. If you keep putting off dealing with your private student loans now is the time. Why ReFi helps borrowers explore low-fix rate refinancing options. And affordable payment plans go to WhyReFi.com/Ramsey.

“That's why our EFY.com/Ramsey may not be available in all states.”

Today's question comes from Carson in Ohio. The only debt I have is $15,000 on a credit card.

I'd love to know how to attack this while still being able to maintain my lifestyle,

which includes playing golf weekly, seeing my favorite sports teams play, and going on dates. My friends and I are all in the same situation and we need some help. >> Oh Carson, sweet, sweet Carson. >> Sweet Carson.

>> I still want to grow out and still get ahead financially not to make any sacrifices. >> Got to have golf. >> Yeah, I get any sacrifices. >> Well, here's the hard truth. Do you want financial freedom?

Do you want to build wealth or do you want to keep your hobby temporarily, which is going to slow down those other plans? So you got to figure out what the priority is for you.

“And it's fine if you want to say, hey, I don't want to lose my lifestyle.”

It just might mean you take 24 months to get out of debt and pay an extra five grand and interest. >> That's all right.

>> That's your prerogative.

But if I were you, I'm going to go, you know what? As much as I love these hobbies, I'm going to have to say no to my friends and put pause on my favorite sports teams playing four months. >> Like if you really buckles down, I bet he can pay off 15 grand. >> 65 grand a year, he probably takes home four grand a month.

>> Oh, yeah, that's what I meant. >> Yes, yes. >> And I don't know what his lifestyle is, how much margin he has. But if he can afford golf and sing his favorite sports teams regularly and going on dates. >> Okay.

>> Maybe just pause the dates. Let's stay single for a little while longer. >> And pause everything else. I talk to you like if you are my friend Carson, I hit you straight. So that's the honest truth.

15,000 on a credit card is an emergency. That's like 27% APR, you're paying for the privilege of carrying that balance. I don't care if it's the only debt you have. I want you to treat this like a crisis, which means we are only covering the four walls. Food utilities, housing, transportation, insurance,

every other dime that comes in, including you work in extra, is going to go towards knocking out the debt, getting an emergency fund, then we can bring back in some of our hobbies. >> Yes, it's not a no forever. But instead of paying extra on all the money you're working for on interest,

get out of debt.

“And if you want to check out every dollar, that's a great place to look as”

to see where the most of your money's been going. And then you can delete categories and say, okay, I used to spend it on this. But if I take that out, that's more margin. And so that is one thing I love about every dollar. There was actually a fan quote that said, I love this app so much.

It makes it super easy to budget with my husband. We have implemented this practice since our wedding day. And we have zero money fights and full transparency. We are on the same page. So that's what's great about it.

>> Take notes from this married couple, Carson. >> I know. >> But you just have not been transparency with another person, but yourself, you know where your money's going. And then you can say, Carson, what if I add some extra income at the top of every dollar,

and I went and got a side hustle, right? >> When you're doing it, it's the time to do it. >> Yes, bring in an extra two grand. You add that on the income line item there on your every dollar budget, and you get to see it all trickle down.

So, Carson, come on, dude, you got this. Way more of interactive on the dating circuits. >> That's right. >> When you say you're financially responsible, women love it. We love security.

“So, that's what you're proven out there.”

So, hope that helps Carson. And you guys, if you want to check out every dollar, you can go download it for free in the App Store or Google Play. All right, let's head to Miami. Welcome to Miami.

We got Brian on the line. Hi, Brian. >> Hey, how are you guys? >> Hi, we're doing great. How can we help?

>> Hey, so I'm relatively new to you. I think you answered this question in a segment about 30 minutes ago, but I'm going to ask you anyways. After, when I get paid each month, after expenses, I put money in my tax account and giving.

I've got about $3,000 I've been investing every month. >> Nice. >> My question is, I just talked to somebody about permanent life insurance as kind of diversifying some of my portfolio. So, instead of giving $3,000 a month into my mutual funds in our rain,

all that, they talked about possibly doing 7/50 in a permanent life insurance and then 22/50 in investments.

>> So, by the first 5, I mean, can you give me a bunch of that money in commissions?

>> That's my financial advisory said, please don't do that. >> What a great advisor you have. >> Well, here's your second financial advisor. Me saying, please God, don't do that. >> I would rather get cyclospoora than get a permanent life insurance policy.

>> Okay, I'm curious, I haven't been listening to you guys. I am curious to why your thought is that way? >> George was made for this moment. >> This is what I do. >> My blood pressure one.

>> This is what George is about to show. >> The reason why these guys, I'm guessing, is it an old college buddy?

>> Okay. >> It's actually a family member. >> Oh, good. Even worse. >> It's blood relative.

>> Yeah, they've done well because they've sold scams to people like you, Brian. So, here's the thing. These policies try to make two things at once. Life insurance and this cash value portion, which grows at a snail's pace.

Ways slower than your investments will grow, and they often make 50 to 100% of your first

years premium in commissions. Goes to them. So, they make all their money on the front end. And then when you try to get out of it, you'll lose most of what you put in. So, now there's a sunk cost fallacy where you go.

I might as well stay in. They told me, I'll ROI if I stay in this thing for 15 years. And so, you do not need life insurance if you're a single guy. Are you married? >> I'm married.

>> Good. Do you have term life insurance? >> I just got term life insurance. >> How beautiful. >> Does your wife have term life insurance? >> I just put her on term life insurance as well.

>> You both have 2 million each.

>> Fantastic. Okay, so we have life insurance covered check. Now, let's do investments separately. And you're already doing that through what index funds in a brokerage account. Through retirement accounts?

>> Yeah, the majority is in, I keep 30% in CD's, 50% in a high yield brokerage account. And then I invest in an IRA just for tax purposes. >> Okay. Well, I would keep your investing in insurance separate for the rest of your life. And there's zero upside to this to you giving this guy 750 to then lose money on it.

So much more just putting it in a high yield savings account. >> And no upside of having these CDs. You need to invest.

“Have index funds you can diversify within your investments, right?”

Get a good gross talk mutual fund. It's 90 to 200 stock.

I mean, what it can do from a return standpoint is going to be way more on your side by putting this stuff in.

I get something like an index fund. And is your IRA is it a raw IRA? It's a traditional IRA. >> Okay. So I would look into the numbers on that and maybe converting it.

You'll pay some taxes on it but converting it to a Roth because you guys are so young. The growth that's going to be happening in that account is going to be astronomical. By the time you're 59 and a half, most of what is going to be in that Roth IRA is going to be gross. And you don't want to pay taxes on that. You can pay it now.

So I would look into a couple of things. Is your financial advisor the one that we love who said, say away from permanent life insurance, is he looking at all of this with you? >> Yes. >> And he's okay with all of it?

>> Yeah, he's good with it. My CDs get capped. So right now, I don't add anymore in CDs. It's a capped at like 40 grand.

“And now what's the purpose of what are you doing with that money?”

>> What's the purpose of that money in the CDs? What are you doing with that? >> I'm going to buy a house in the next probably two years. >> Okay. >> So it's just money that I can take whenever.

>> Got it. >> Has it fully matured? >> Yeah. >> Okay. >> I would personally move it to everything to high yield savings for short term goals.

And anything long term, which is 45 plus years, I would do in retirement accounts and index funds. So hang on the line, Brian. I'm going to give you a free ticket to our investing essentials virtual event, where Dave Ramsey and I will unpack his personal playbook for building wealth.

We're going to walk through all of this stuff you're talking about, and probably steer some people away from every getting a permanent life insurance policy. >> Yeah, it's a great question. And you're on the right path. You're doing so many great things, Brian.

I think if you tweak a couple of these things from a mathematical perspective, it's going to be more on your side. [ Music ] >> The problem with online investing advice, you hear so many different opinions,

and you're left wondering if you're even doing it right.

“And that's why we created investing essentials.”

Join me in Dave Ramsey at this two-night virtual event to learn Dave's playbook for investing and wealth planning. We'll break down 401k's, mutual funds, passing on wealth, and more. So join us September 1st and 2nd. Take it start at 199 bucks.

You can get yours today at RamseySolutions.com/events, or just click the link in the show notes. [ Music ]

A generous man will prosper. Whoever refreshes others will be refreshed. Richard Branson said, train people well enough so they can leave. Treat them well enough so they don't want to. Ah, like that.

It's good quote. >> All right. >> All right. Let's head to Dayton, Ohio. We have Patrick on the line.

Hi, Patrick. Welcome to the show. >> Hi, I appreciate you taking my call. >> Absolutely. How can we help? >> Oh, I've haven't got it.

I got a lot going on right now. And I feel really stuck. I can just spin my tires. I can really use some wisdom. >> I'm sorry. Yeah, what's going on?

>> So, well, my daughter's currently in the hospital sheet. I got two kids with kidney problems, third kid has seizures. And I mean, I've been doing the baby steps. I've been, I've been doing everything right. And I'm just, I'm not saying any hope.

We're not getting anywhere. I feel like I'm starting over every other week. >> Are you talking about financially?

“Or no hope as far as the medical sort of getting that under control?”

>> No. That kind of stuff I sort of made my piece with it.

And it's always been very positive outlook.

But I guess it's more of the financial. >> Yeah. Well, give yourself some grace, Patrick. The journey looks different for you. And it's okay if that goes slower. >> Yeah.

>> And, you know, you don't see the progress that other people see around you. You've got a storm. And it might be a longer term storm where you just have to baton down the hatches and have the bigger emergency fund and not be able to invest as much in a season. And that's okay.

>> Yeah. >> So what does that look spend to look like right now? What sort of stressing you out financially? >> So, you know, even if you think the hospital for a week at a time or two weeks at a time. >> Is it dial? What's her treatment?

>> Well, she already had the chance plan. The next thing is present. So, she's always getting sick every little thing. Well, right now she's got something really real bad and stuff to chalk and everything. >> I got it. >> And we just got it.

But I guess it just came back.

But that's just one instance where with all three kids, we're just always in the hospital.

>> Okay. >> And obviously while I'm here, I'm not making any money. I got my wife's home more than an hour drive from here. She's got the other two kids.

“>> Okay. So, what is the little thing she's always popping up?”

>> For sure. What does your work life look like right now? How much are you making and is it sustainable from a remote perspective? If you're able to help with the kids or what is that going to look like? >> Well, I do construction. So, I've got to be there. There's nothing remote.

>> What are you guys making a given year? >> I mean, if I never missed a day, I guess I'd be getting like 39. >> 39,000 years. >> Yes. >> Okay. And your wife stays at home.

>> Correct. >> Okay. So, 39K is a best case scenario for working with here. >> Right, but with the doctors and appointments, the circumstances. >> Yeah, because you're getting paid per day. >> On the construction site.

>> Correct. >> So, what do you think you'll bring in this year? If it, if the top's 39, what is? >> Yeah, I made it 25. If I can get back to work and leave.

>> Yeah. >> What are your expenses every month? Because that's 2K a month you have coming in. >> Yeah, I would say we probably could get by with like 24. >> 100 to bring in.

So, there's definitely a deficit. >> So, your expenses are 2400 bucks a month. So, we need to at least that coming in. Do you guys have any debt? >> Yeah, I still had only the house.

>> Just a mortgage, no consumer debt. >> Correct. >> Okay, that's positive. >> That's good. >> Yeah.

>> And any savings? Anything in cash? >> I mean, I'm like that. I'm telling you, I'm starting over from zero. I took our last money.

Then gas tanked to get it out of the emergency serum. >> Yeah. >> What do you guys have health insurance? >> Yeah, it's like in the state, you know, Medicaid. So, I don't have medical bills.

That's not never been an issue.

>> That's a question. >> That's never been an issue. >> So, that's one thing we don't have to worry about. Is how are we going to pay for this medical use? >> Yeah.

>> Now, the goal is to make enough money that you may not even be eligible for that. But you have good health insurance, a better job. You have margin left over to invest and save. Because, while this is a blessing right now, the long term of you never having any money left over is a major problem.

“>> That's what this year I'm running into.”

Because I took a $5 an hour pay cut in year 2022. And I left a good job that wouldn't want me to miss a day. And I took this job for much less money.

>> For sure.

“>> And then I have no problems with that job with missing work.”

You know, they're like a family there.

They don't, they understand my situation. >> That's a blessing. >> That's not getting paid long enough there. >> That's right. Yeah. And so, she's there a week at a time.

Is what you said. >> I'm wondering if there's a predictor. If there's any predictability to her condition of when you're going to be at the hospital versus not in the day's your home. When you're going to pick up something extra just to bring in some side income for a bit. >> Right.

>> I work when I can. And everything would be fine for a couple of weeks and all of a sudden, you know, then her sister we haven't seizures and I got down. >> Yeah.

>> The predictability part is out.

>> It's tough. >> No, you guys have any family nearby. >> Oh, yeah, I mean, our parents live around. You know, we've got a new and pretty small moon town. >> Good church.

Are you guys involved in a good church? >> No. >> Not really, but the town itself has helped us out before. And the Christmas time, they'll give us something. And our parents help when they can.

>> Yeah. >> I think my goal. >> I'm just wondering if there's. And it would be hard. It has a parent.

I'm like, it's heartbreaking. But if there's a stint that you and your wife agree and maybe with grandparents help. And you guys just say, hi, we need, I am just making this up. It's six months where you, Patrick, are consistent on the job. Just for the goal of getting back in emergency fun just to have some buffer.

And it may take five, six months to get that. And maybe it's a grandparents going to the hospital or watching the kids while your wife goes to the hospital. Or if there's some length of time for you just to focus on work and even work nights, work weekends, Patrick, I'm like, just so much so that you can at least build up some cash flow. Because I think the stress is now that there's no margin, there's nothing.

And that let alone all the health issues with your kids. I mean, that keeps you up at night. And so I'm wondering if, you know, having 10 grand in the bank sitting there. That changes your world financially at this stage of the game. So I just wonder if you and your wife, and again, that's going to be so hard.

Because I know you guys are in a rhythm and you're taking such good care of your kids. But were you both kind of look at each other and say, okay, from between now and Christmas or I don't know what it looks like. But it's during a significant period of time enough to get some cash in that's margin and we're just saving that. That's our goal because we just need that buffer.

“That's I think that would would cause some level of peace. That could be your first step, right?”

And then over time, like what George is saying, looking at your career and getting to a point where, I mean, God willing, you're making 7080 in construction in a great job and you have great health insurance for the kid. I mean, you know what I mean, that that's, that's the ideal dream long term, but for now. Man, just having some piece of buffer. Develop your tank and not have to, and not have to think twice about it, right, to help your kids.

Yeah. What does the latter look like for you if you were to step up into a different role in construction, making 30, 40 bucks an hour? Is it management? Because if there's no long term trajectory here, then I think we need to find a totally different field where your skills could transfer.

Because if you're stuck, making 20 bucks an hour and you're hourly worker, that's going to be really hard to climb out of this and get that margin long term. Yeah. So that's another piece to look at, and I'll send you a copy of find the work you're wired to do. It has a get clear career assessment in there. And that will sort of show you, hey, you know what, I do have all of these skills.

This is what I'm wired to do, and maybe it's not construction for the rest of your life. So we'll send you that copy of find the work you're wired to do to help, but man, there is no easy answers here. Yeah, we're so sorry Patrick. Any quick wins you guys can get.

“I think is your number one goal today, just for you to kind of get through day to day.”

And lean on that community as much as you can. Absolutely. Thanks for the call. George, great show today. Thanks to everyone in the booth.

And remember, there's ultimately only one way to financial peace.

And that's to walk daily with the Prince of Peace Christ Jesus. [BLANK_AUDIO]