Shortcuts Won’t Help You Get Ahead With Money

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“>> Normal is broke and common sense is weird.”

So we're here to help you transform your life. From the Ramsey Network and the Fair Wins Credit Union Studio, this is the Ramsey Show. I'm George Campbell, joined by Jade Warshan, we're taking your calls at Triple A, 825-525,

pick up the phone, give us a call if you want the right next step for your life and your money. Omar is kicking us off in New York City, what's going on Omar? >> Hey, hi, how are you?

So I'm a third of your old general dentists

living in the northern New Jersey near a city area, graduated from dental school back in May 2024 with around $510,000 in student loan debt. I've been paying it off aggressively since the last 8 months when I started working.

So I'm around $450,000 in student loan debt. And I'm kind of just wondering how exactly to prioritize that. I'm looking to buy my own dental practice in the upcoming years. I'm married with a daughter, so hopefully a home. So I'm wondering, do I paid it aggressively?

And so we focus on that? Or pay a good chunk towards there and also some savings for a practice and for a house in the future?

“>> I mean, what you just said is the exact key.”

You've got to figure out how to prioritize this. And it sounds like you were doing a good job of that the past eight months, the fact that you paid off $60,000 of this, look at the split, which I think is good.

If you're asking George and I, which you are, I would tell you that the priority here does need to be this debt. I certainly would not go into further debt with a medical practice.

I love the idea of home ownership, but at the same time, if I imagine being in your shoes already having 450, and then piling another, I don't know, five or 600 on top of that, in mortgage debt, that I don't know how it makes you feel Omar,

but that makes me start to quiver. You know what I'm saying? Like my armpit starts to sweat a little bit. And so for that reason, my take on this, and this is just a Ramsey World view, I would say, is that here,

we believe that your biggest wealth building tool is your income.

“And so in order to have your income at your full disposal”

right at your fingertips, you've got to make sure that portions of that are not being sucked up by debt payments. And so for you, having $450,000 of student loans, yes, you make a great income, but that's still money, and that's being sucked up,

and it's still risk that you're adding into your life. And so our path here is all about you finding your way, yes, to wealth, but also to financial freedom and peace. And freedom and peace are emotional aspects of money

that get left out a lot. And so for that reason, I would say, absolutely prioritize the student loans first and foremost. - Okay, so, you know, wildhing up and pseudolone, it's being done to say, but I kind of just wanted to save

some on the side, so my life and I've been putting every month or so, some entire high yield savings, and I do have around $25,000 in high yield savings. - Good, and I just don't know, should I dump that into my pseudolone or just keep it as is.

- Yeah, I would, so here we teach a series of baby steps. Are you familiar with the metal? - Yeah, I am. - So then you know that baby step one for us is a starter emergency fund,

and I'm gonna blow your mind and probably some people's minds who are listening right now, when I tell you that that starter emergency fund is only $1,000. So essentially, yeah, you'd be taking 54,000 of the 55, and throwing it at these student loans

and knocking them down to 395.

But doesn't that feel amazing?

- It does, yeah. - And if you had an emergency, what would likely happen is you'd take that next paycheck and apply to the emergency instead of the debt. And so, making your kind of money,

there's very few emergencies that would exceed your paychecks in a month. And so, you know, one of the main reasons for my calls because over the last few months, I've been putting every single cent into my loans

and stopped funding my high yield savings account. And my wife and I just worry, sure, is that the best idea, and I kind of just want to hop on this call and just get that little relief, you know?

- Yes, yeah, you're doing the right thing. Even though it feels weird, 'cause like what I've been told, it's good to save.

Sure, it's also kind of scary to have half a million dollars

to a lender, and those payments are come and do whether you like it or not. So the faster you get rid of these loans, the faster we can live our life. And I'm happy that you're a practicing dentist

and you made it through, making good money. How much are you actually making? - So, I'm only eight months in. I after taxes, I take about $16,000 a month.

- And right now you're applying what you told me

about 7,500 a month towards your debt. - Yeah, it's a lot, the last few months have been putting around 10 to $11,000.

“- Good, well let me do some math for you,”

'cause I did it just to give you some encouragement. If you did 7,500 a month toward the debt, you're done in five years. If you do 93, 75, you're done in four years. But here's the plan I want you to aim at.

Three years, you can pay off this debt if you put 12, five towards it every month. - That's aggressive, right? - Yeah, it's five by pretty quick. - But then you gotta learn how to live off four grand a month

for your life. So if you can keep living like a broke college student, even with the kid, with your wife and go, hey, 36 months of sacrifice so the next 36 years can be filled with freedom.

That's what you're really doing. - Yeah. - And do you think you're income will go up at all in those three years? - Yeah, so I mean, I'm projecting my income

in the next couple years to go up to at least, you know, 20, 30% more. - Amazing. So with every increase you get an income, don't go increase your lifestyle.

Instead increase your debt payments. - Yeah. - That way it's done in less than 36 months 'cause you have too many goals to be just scraping by, making minimum payments.

You want to own a house, you want to own a practice, and the best path to that is to clear the decks, get rid of the debt, rebuild the emergency fund, and now you're able to cash flow. Think about, now you get 16 or 20 grand free

to do whatever you want with to stack up for a down payment or for a practice. It's a different ball game. - All right. And I just want to add to that what George is saying

because you can walk away from this conversation with two points of view. One is what we're saying, which is, hey, the quicker you get it done, the quicker you can get about the business of, yeah, saving up for a down payment,

“saving up for the practice, all those fun things, right?”

Or you can walk away from this conversation and go, oh, two to three years, that feels too long. That doesn't sound fun. I'm not gonna do it. I'd rather go ahead and you know, start on the house

and stack up more debt there. And I'd rather think about this practice and stack up more debt there, right? So this really is going to point to what mentality do you want to have in life?

Do you want to be a person who can short-term sacrifice for a while, for a long-term gain, right? Can you have the foresight safe? I just really lock in. And I think you have that foresight.

You're a dentist for crying out loud, right? So lock into that same mindset that allowed you to accomplish that degree and allowed you to go on that path where you said just for a short time,

it's really gonna suck. But if I do this now, the world becomes my oyster, right? - Yeah. - And so the biggest blocker for you Omar is not gonna be you and your wife.

It's gonna be your friends, your family, your peers going, dude, Omar, what are you doing, man? You should have a nice house by that.

“You should be driving a nicer car, yeah.”

- You should have your own practice. And you're gonna be going, no, I am laser focus on this debt right now.

But the truth is, most dentists

dentists won't take the advice that we're giving you right now. And also, most dentists are broke. - Yeah. - They have a huge house with a huge payment. They've luxury cars with a huge payment.

They have practices with a million dollar loan on them. While they're still trying to pay a lot of student debt. - There's a lot of people in my college have been tongue like, you know, just pay the minimum open-up to practice on just worry about a leader,

pay the lump sum, down the road. - Oh, the old, the old down the road trick. That's right, when life gets so much easier, we've less responsibility in chaos, right? Dude, do it now.

Your life will never be as simple as it is now. And I promise you, if you hate on the other side, when you're debt free, owning a practice free and clear, with a house payment, you can actually afford. If you hate it, call us back, and you can yell at us.

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Megan is in San Antonio up next.

Thank you so much. How can we help today?

“So I'm a single mom with three young kids.”

I've been divorced for about six years. And after the divorce, my mom moved in with us. And so I support her, but she helped slip the kids. I've worked very hard to get today. We stepped four since the divorce, but now I feel stuck.

My take home after taxes is about 6,200 a month. And I recently put my house on the market just because we live in a very tight space. And it's three bedrooms too bad for the five of us. I'm sharing about her with my three kids. So my question is, would it be smarter to deal with the living space that we have currently

to have seen a financial freedom or should I make the sacrifice to get a different space than the kids have more and more of it growing up? Wow.

First of all, you have done an incredible job.

I mean, coming out of one of the hardest seasons of your life, you have just scratched and clawed and taken care of those kids and gotten out of debt and taken care of your mom. You are a hero. You're a warrior. Thank you.

So just know that the path looks different for you. It's not as easy as it is for some people with two incomes and nobody to take care of. And so it's going to look different. So let's talk through this decision. You bring in home 6,200.

What is your current mortgage payment? It's $1,800. Okay, not including insurance. Oh, what is it with insurance? Okay.

So about 1950 all in for principal interest taxes insurance.

Correct. Okay. And this house that you would get. What is that going to cost you? Is it equivalent?

Is it going to be a lot more? As far as the mortgage? It would be more, if I were to get a 15 year mortgage, it would probably be 20,000. Oh, boy. Okay.

“And is there an opportunity for you to make more at work?”

What is this sort of path for growth look like? I was just recently promoted, so I'm not seeing any other promotions happening any can soon. I'm a nurse, but I do pick up extra shift when we can do that. It's hard about that with all so on and just when I'm up to kids too.

Yeah. I wonder, so you said you have this deal with your mom. She's living there and exchange for that. She helps with the kids. Is there, is she unwell?

Is there anything that precludes her from having her own space? At this point? Yeah, it's just my schedule is very unwell for addicts, so I can get call to them in the middle of the night. And so that way, if she's been able to go to lunch, she's the kids who can take care of.

Here's where I'm trying to solve so that you kind of know my train of thought. You're already over slightly what we would say is kind of that baseline for where your mortgage wants to fall, 25% of your take home. In a perfect world, your mortgage would be like 1550, right, and it's already 1950. I would have a hard time telling you, hey, yeah, go up and mortgage, go up to 2300 because

that's going to make you house poor for all intents and purposes, and I would not want that for you. So in my opinion, we need to look for solutions that don't cause you to pay more money

per month for your living space and the first thing that I'm looking at is freeing up space

and already, did you say it's a 32? Yeah. So freeing up some space there, I'm fine with the kids sharing a room, I'm fine with the kids sharing a bathroom, but it feels like with your mom in that space, it's causing difficulties.

So in my mind, I'm thinking, okay, is there a way that mom can move to maybe she's in an apartment that's really close by that if you do have to do something in the middle of the night, it's easy for her to come by, maybe there's some future planning that we can do to mitigate some of that craziness in the night, but do you see what I'm saying? I don't think going up in mortgage payment is going to solve the problem, it's going

to create a different problem for you.

“I think that's probably true, that's why I'm.”

And you likely couldn't address it. You're probably going to have to forego investing and go, well, I can't afford the 15% investing. I need that money to afford the mortgage on the bills. That's the other part that worries me is we put a total halt on your wealth building.

And so yeah, this might just be a not now. It might be, let's wait a year, let's build up some more equity, let's keep knocking down the mortgage so that we have more to put down on the next house, bring in the mortgage down. Or are we go, is there a house that's actually bigger that's maybe a little further

out, but it fits our family and we can keep that payment to 1600 bucks a month. So that's the other option, is there other houses out there? Have you actually looked with a real estate pro to see what the options are? Yeah, it's just unfortunately everything around here.

To stay near your employer, near schools, all that?

Yeah. Okay. And what is the long-term plan with mom? Is she able to afford her own place? Is she able to eventually take care of herself?

I know she 100% could, but I feel like there is an obligation to support her because she retired a couple of years early to move in with us. And you say obligation is that financial or is that she can't physically take care of herself. No, no, she can take care of herself. I just feel like the expectation on her apartment is that I will take care of her since she

“made a sacrifice to take care of the kids, how old are the three kids?”

Yes.

I'm a five, six and eight.

So they're all in school, right? The five-year-old is in kindergarten? Yes, but I homeschool them, so she helps with that. Okay. Interesting.

Yeah. I can point to a couple of places. Now, this is a values conversation, but I can look at a couple of places where there might be room to move, and again, it's when I say move, I mean something to shake loose. But it's really up to you on how important those things are because if you told me, yeah,

my kids are in school and grandma looks after them when they come home from school at three o'clock or at three thirty whatever the time is.

“And I'd go, okay, well, you know, that makes, it makes, does that make sense?”

You wouldn't have to feel so much of an obligation to her.

But when you tell me, oh, no, she's, she's basically working a full-time job by homeschooling

them and taking care of them. I see why you feel such a strong obligation there. And unfortunately, if you continue to choose that, I'm not saying it's wrong, I'm just saying it's, it's your values. If you continue choosing that, then what you're also choosing is we live in a smaller place

where we're cramped and that's okay, it's hard to have it all sometimes. But I want to address the, the expectation because it seems like there's some unhealthy entitlement creeping in here and I get that she's, she sounds like a wonderful woman, she's helping take care of your kids and while she expects you to take care of her, you didn't expect to go through a divorce, decimating her life, crawling out of debt, taking care of three

kids on a single income. And so there's also this resetting of expectations of mom and a perfect world, I would love for you to be able to live with us, but unfortunately, right now, everything's tight. We don't have anywhere to go and we need a little bit of our space back. I still would love for you to help in this way and you get, you get a vote here too.

“But that's kind of, I see what you're saying like, I think that you're viewing it as this”

is her pay, like I can't give her salary for the things that she's doing, so an exchange for that her pay is she gets to live here and I don't charge her rent, is it, am I looking at that, right? So if you say mom move out, but still do all these tasks for me, it's kind of like she's working for free and she can't afford to do that, right, she's just living off social security.

So she can't afford it either. That's her payment every month, or what's her income total? I know she has a lot of investments that she's poor, that if she were to ever get sick or need a retirement home, and she got older, that all of that money would be needed for that, which I understand, that social security is 25 hundred a month.

Okay. All she pays for is her insurance, which is about 300 a month. Okay. I think you guys have a deal here, and it seems like, you know, it's a quid pro quo, you got your part out of it, she gets her part out of it, and I think that there's just

some parts of it that are uncomfortable, and I think that's just part of dealing with the Georgia's point, you're a single mom making it with three kids, and there's going to be, I mean, I don't have to tell you, you already know, you're well acquainted with the sacrifice and the struggle here, and I think that this is just part of it for this season.

Another option, Megan, I'm just throwing it out there, I don't love it, but you could get the new house, 2,300 a month, and she pays 700 bucks, so she can have her own room in space, and that could solve a few problems now, doesn't solve the long term, because if she moves out, you're just up with that payment, but it could in the short term alleviate some of these issues, but it sounds like right now, you just got to wait, keep knocking

out that mortgage with the equity, and then eventually we can make this move once we are kept. Getting married changes something in you, as sure it did in me. When you say I do, all of the sudden life isn't just about you anymore, it's about we, and one of the most grown-up things you can do for that we, is to make a will at

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Hey, how's it going now, are you all? Great. What's going on with you today? Not too much.

I just have a good question about some of my wife and I are expecting our first at the end

of the year. We're trying to pay down some consumer debt, so we've looked at balanced transfer cards. We have one line of credits that is currently bearing interest at 15.4% which is pretty mild as far as like credit cards go. There's about $12,000 on that card.

And we're paying it down aggressively, 2,000 bucks a month. We've been hammering it towards that, plus our balance transfer cards and whatnot. My question to you guys is, is there an option to, like I've looked at personal loans or debt consolidation loans, but every offer that I get is above that 15.4% that that one line of credit is actively accruing.

And so my question is about, is there ways to consolidate lines of credit from preexisting cards like ones that I've already set up for myself back in high school, I'm 26 for reference, and the newer balance transfer lines of credit that were set up within the past 24 months.

“So like is there a way to consolidate the lines of credit?”

Is there a way to unlock other tools that may be lower than the 15.4 outside of going to friends and family? I mean, they're possibly would be, but the question I have before I answer that is how quickly do you think you can pay off this 12,000? 10 months.

Okay, so we're talking about, we're trying to do the most to save ourselves maybe 140 bucks a month and interest. Yeah, I think the most recent interest charge that was on that line of credit was like 220 bucks a month. Right, but you'll be actively paying it down, so the amount of interest that you're paying

is also the actual amount is going down. I think that your energy is better spent in this way, paying off the debt and finding ways to poor more money on it. I think that's where the energy is better spent.

“And I say that for this reason, the why behind that is a lot of times when there's two things”

that happen here.

What kind of debt is it first?

It's consumer debt. We got married in May of last year, so a lot of it is wedding debt. Is it just on the credit card? Is it just on one credit card or multi-plus? Yes, so there's the 12,000 that's bearing interest on the one credit card.

We've done two balanced transfers to two separate cards, one of them completely paid off. The other one I recently just renewed my, I don't what you call it, the offer to get 0% on another balanced transfer, so that-- So what's your total debt right now? Yes.

17. Okay, so the other reason that I don't love consolidating debt is because the way we teach debt pay off is the debt snowball method, and there is something to be said for having a couple of smaller debts that are separate versus one big debt, because when they're separate, you can focus all of your extra margin on one, get a quick win and actually feel good about

what you've done. So instead of having one massive thing that's 17,000, it's kind of cool if you haven't broken up, there's a $12,000 one, there's a $2,000 one, and there's a $3,000 one, because then you knock out the $2,000 one, and there's actual site, like there's psychology behind

If you were, if you did consolidate them, George, there's worse things he could do, but

“I don't think it seems like that's where you're interested.”

So far, Joseph, everything you've said is a shell game of just moving the debt around, switching out fits for the debt, let's move the debt in some stretchy pants, so we feel a little more comfortable. I'm trying to get rid of the debt and set a move it around. Are you with me?

You with me? We lost Joseph. Okay, there you go. I was like, come on man, I was hoping for a big one. One more time.

Are you with me? Can you hear me? Yeah, I can hear you a little. Yeah. Okay, cool.

So I understand what you said.

I can tell you're a smart guy, you know your numbers, I just want you to, like, James had focused your energy in the right place, not calculating how much interest you can save, and said calculating how fast can I get out of debt if I just throw the most at the payment. No more balance transfers, no more consolidation, no more lines of credit, no more Instagram ads, no debt relief, no debt settlement, the guy in the mirror is the solution to the debt.

Not on outside force, not on another debt whack a mole. You feel me? He's there. He feels you. He's there.

His phone keeps cutting out. I promise, guys. I'll play the role of Joseph, yes, George. I feel it. I could just, I was exhausted just listening to him talk about all the balance transfers.

He did move all this around like, dude, in that time you could have just knocked it out.

You could have been done.

I mean, if you're throwing two grand of the debt, you got 17, it's pretty easy math here. Let's just knock it out, and, you know, what's eight months, nine months, he said 10 months. So, all right, less than a year, it's gone. And we're not going to focus on interest rate. We're going to focus on the margin we're throwing at that principle.

That's the goal here. The goal. Stephen is in Fort Worth, Texas up next, Stephen, welcome to the show. How can we help? I think you're taking my call.

I'll try to keep it quick. So my wife and I, I mean, we baby in June, we've already got like our start, start mode. We've got 16,000 in a high yield savings account for that. We've since we already have that saved up. We've still been paying on my wife's student loans.

We've paid about $75,000 since last June, and we are on track to pay off the last $20,000 by the time the baby is born. Awesome. However, I just got a job offer that would require me to move to another city. And the house that we bought four years ago was a bit of a fixer effort, and we caused

our innovations to do the baby steps properly. So, we feel like there's some work that's going to have to be done before we can actually sell it, and we're not sure if we should continue making big payments on the student loan or hit pause on that right now so that we can cash on anything as long as it would have a good offer or a why that makes sense of it actually increase our equity.

“I mean, I've got to tell you, I think I'd hit pause on both of these things since this”

baby is on the way. How soon is this job stuff happening? Is that for sure? Like I have a contingent offer that are running a background check right now. We still haven't established the start dates.

They already said that they would be willing to let me do a hybrid sort of thing until I'm ready to move after the baby's born. That's how great. That pause, yeah. So, the move would probably be July or August.

What type of work needs to be done on the house and how much money do you think is that stake if you do were done? It would be probably several thousand dollars if we did most of the work already ourselves and we're kind of exhausted of that so we need to have a contact or it's things like updating this lowering a little bit of painting and then potentially you've incentivating the master

bathroom that's like original 50s. Oh, boy, that's a lot. Is that like 10 to 10? Yeah, what do you think the real number is? Everything together would be that.

Like I said, we talked to a realtor about specifically which items would increase the value the most, but yeah, it would probably be anywhere from 5 to 20,000 total. I don't see how you can do a bathroom in floors for 5,000. But maybe check if it's a bathroom, it would be 5. Okay.

Okay. Gotcha.

“I was about to say in the 1990s, I think that how long would it take you to save up”

the money to do that work? So, we'll be getting 75 hundred of miscellaneous expenses paid by the company as part of the relocation package on top of what they calculated it would cost to actually move. Okay.

But you'll need that money to move. So that's already earmarked for whatever they pay us to move, loss, miscellaneous expenses and other. There. They'll cover that too.

Anyway. Right, but I'm saying with your own cash money because the money that they're paying

So I would keep that earmarked for what it's earmarked for.

And now we have to set aside and understand what the timeline is going to be for us to do these renovations. How long would it take to save up 20 to $25,000?

“And really just, I think now, you are in Stork mode, we're pushing pause on it.”

But during that pause, let's really plot this out and map it out with a timeline. How much do we need to save? How much time is it going to take to save it? Can we work as we go and really just create a plan? It's going to give you guys a lot of peace.

Yeah. I don't know. The exact start date and push it as far as you can to buy ourselves as much time. Get the renovations on, get the baby here, get yourself in good financial position. If you're at the point where you think bankruptcy is your only option, stop for a minute.

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Absolutely. What's your question? I have a financial advisor and we were kind of going through the baby steps. I was kind of telling them where I wanted to go with the baby steps and I was getting my 401k investments up to about 15 percent.

I was at 13, my wife was at 12 and he told me, hey, have you ever thought that you might have too much in retirement and you might want to live a little bit more freely now. And so he suggested that we kind of knock it down to 8 percent because my company matches my 8 percent at 11 percent and so he suggested that that's too much money going into retirement and we should live more freely currently and I was hoping to get your guys as a opinion

on is this the right move or should I still be pushing to get done with baby step four?

Wow, I've never heard of a financial advisor telling you to invest less.

I mean, are you guys already financially independent? Do you have millions of dollars? What do you have? Okay, so we don't have millions, we've got 350 putaway in our 401k's between my wife and I.

We make combined, I make 1/11, she makes 1/18 a year and then I also get 24,000 from disability from the military service and we have two kids and I kind of want to start saving for my kids college fund and that's why because I've got a seven year old and a four year old and I'm scared that I'm not going to be able to just cash flow that for them. I want to start building 529 and it's kind of where all this came in.

And you don't have the margin to do the investing that you're doing and put aside some. You guys make a great income. Well, thank you and right now we're kind of struggling to do both. Why? Something that that means something is out of proportion.

Yeah, life's out creeper. There it is, thank you for the self-awareness for all of that. We didn't have to pull it out of you. Well, let's go back to the, so we've got lifestyle creep going on George and let's also go back to and answer the question from the advisor.

So I love the fact that you have an 8% match that kicks in at 11%.

“I think that's that's very cool and I think that that's gravy because the truth is you”

could switch jobs and they're not be a match to that extent and I just love the idea of when you're in baby step four, understanding what it feels like to flex your muscle of investing 15%. And that way, if it ever goes away, you're just used to like, this is what I do. This is what I do.

And you can consider the match just a really awesome bonus in the benefit that it actually is for you building wealth.

If you truly are on baby step four, I think that you need to do baby step four and sock that money away. Now to that point, if it's tight, I'm looking at other areas on the budget, George, to see what's going on here. So 38K is about 15% of your gross income based on my calculations.

“So that's how much we want to be putting away into tax advantage retirement accounts, regardless”

of the match. So that's that's step one. Once you have that going, then we move on to college savings and set a goal. You can use an investment calculator on our website and go, all right, if we put 400 bucks away for the older one, 300 bucks away for the younger one, we're going to have this much

by the time they turn 18, plus we might need to cash flow some, they would get scholarships. You got it. So that's where you form a game plan for that. And then you guys also have a mortgage. We do.

Yep. And that's $20,000, $20,000, $20,000, $44 a month. Okay. That's very reasonable. Considering your take home pay, which I imagine, is your take home pay like 15 grand a month?

I, it's, it's a little shy that it's 14, it's, it's a little over 14k, yeah. Perfect. And then you get those bonuses at the end of the year. So now I'm going, okay, how do we budget this 14k in such a way that we're able to invest

for our kids first before we have every little luxury in life?

And my guess is you can find some wiggle room and fun money in $14,000. Yeah, yeah, you're right, and we're trying to, so we just, I just downloaded every dollar and I finished my first month last month in April. So we just started budgeting to get where we could, uh, when everything was red and I over spent, not the best, but it helped it was eye opening.

“I think it's the best way to say it was eye opening to see where the money was actually”

going versus where we thought it was going. So you saw the lifestyle creep happening, the set, but the crazy part is you were doing that already, but just delusional, uh, instead of intentionally. So now you know, now you can do better and go, all right, we need to cut in this area. Here's where the money leaks happen.

We thought we were spending 200 bucks eating out. It was really 500 bucks. We need to ratchet down on that. So now you and your wife can create a game plan and spit shake and stick to it and go, all right, we're going to cut these areas down, ramp this area up, add this investment.

And what I do Ryan is I auto-invest it to my kids, 529 plans so that the paycheck hits. You don't even see that money. It happens on payday. So by the time I have a chance to even look at the bank account, the money is already building while for me.

“That's the kind of mindset you need to get into is being so proactive that whatever is left”

and whatever the fun stuff is, that floats to the bottom. And priorities are at the top. And to George's point, and that's such a good point, George, for anybody who's listening. Whatever you can automate, you automate your 401k, obviously. That's coming out of your check automatically, 529 coming out of the check automatically.

If you're putting money aside for sinking funds, it's coming out. And when you do that, then when you actually receive your check into your account, you're already used to what that amount is, and you don't miss. Does that make sense? You don't miss the money that's gone out.

You forced the boundaries to do the smart thing that you know is good for you. You forced yourself to eat the vegetables first.

Okay, so really quickly, especially because George you're on the phone, and you always

use the retirement calculator. I was using the retirement calculator on Ramsey Solutions, and I plugged it in, I plugged all of our stats in, and it's showing that in retirement, it could be up to like, with the 11.8% that you suggest, it could be up to 22 to 24 million dollars in retirement. That's, to me, I feel like if I sacrificed a little bit of that now, it would make sense

because I could pay, you know, I feel like I'm going to be fine in retirement anyways, but getting kids through college might be tight. We still think drive to the 15% and then just focus on the budget, crack it down and go through with the 529s as well. The reason, okay, I would love to talk about that a little bit because I do think if you

had called in today, and you were like, hey, we've been talking money away, we've got 4 million dollars, you know, and you had accumulated a certain amount of wealth. I would have definitely felt the feeling of, do we have to be quite so intense? I mean, we're going to have so much money, I could understand that, but you're not quite there yet.

Therefore, the choices that you make today really, really matter, and how you craft your lifestyle really, really matters, and where you are, where you're making this really great income, it's so easy to get sloppy, because you do have the cash flow and you can, you

don't understand, like your income can kind of cover up things, but the truth is, if you're

making this income and the margin is not there for you to do the baby steps, that is a huge red flag that man we do need to tighten it up.

15% there to invest, you'd look at me like I was on the crazy train, like what in the world are you doing?

Because the truth is, I'll find it.

It just might be hidden in a debt payment or lifestyle creep, it's in a Georgia, yeah, absolutely. And so for you, Ryan, I think you have the opportunity to really look at your lifestyle and put the correct boundaries in the correct place, and that's something that's going to serve you well beyond this, being able to have the discipline of saying, I know when I'm off the rails, and here's what it looks like.

So it's more of a philosophical thing for me than a, if you don't do this, does that make sense? You're going to have plenty of money, and there's a lot more statement could do, okay? So here me say that. And the other part of this is there are a lot of assumptions made, like it's fun to punch

“it into a calculator and go, "Cool, that's how much I'm going to have."”

But we also don't know what the returns will be, what inflation will be, will your income stay this high forever? What if there's a health diagnosis, what if one person wants to stay home?

And so you have to factor in a whole lot of options, so I like to be a little bit pessimistic

about the future to force myself to do smart things, and if you have too much money, that's just more impact you can have on your family, your community, the things you are passionate about. So I wouldn't be too worried about having too much, but I think creating the habit of at least investing 15%, especially with your low mortgage compared to your income, I think

you can find this money easily, and it'll be a great exercise for you and your wife to be a little less sloppy with the spending, because you can out earn your stupidity with the money you guys make. The money leaks can happen, you don't really feel them. So adding some friction back in and putting your money where it matters, man, you're going

to feel so good. I think it's being proactive and intentional instead of just going, that will be all right, what's a little door to ask you, a little door to ask there.

You know, one of the first things I discovered working in the financial world is how absolutely

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I'm George Campbell, here with Jade Warsaw, taking your calls at Triple 8-825-5225. Max is in Minneapolis up next. What's going on, Max? Hey George, hey Jade, how are you guys? We're doing great.

How can we help today? Hey. Yeah, I had a quick question for you guys, my wife and I are in Baby Step 2, and I just received a pretty significant job offer, and then I'm really struggling with the idea of leaving my current employer, and I really don't know how to leave an employer that's been so loyal

to me as a woman that you thought for. Wow.

“What's the pain now, and what will you be making?”

Currently, I'm an electrician, so I'm going to print us. I'm making 28 an hour right now, and the new job offer at the other place would be 50 an hour. Wow. That's a pretty serious upgrade, man.

That's almost doubling your income. Yeah. Bye. Bye. So explain to us the trouble that you're having with.

So it's not the move. It's not the job. It's strictly, man. I'm loyal to these people. They've been good to me.

How do I tell them? Is that it? Yeah. That's pretty much it. I'm one of the biggest things that he helps my wife and I with, he owns a due

in places in town, and he gives us 750 off a month on rent, just for working for him. So that's a pretty, that helps us a lot just with our living expenses, and I mean, part

a pretty big test, and he takes his time out of Saturday morning to come into work outside

of work hours to help me study and help me understand what the test is going to be like. And he just has a lot for me, and gives me a van to drive. It sounds like he's a friend. It sounds like he's just as much a good friend and a good person as he is a good boss. Right.

Right. That's super generous. That's awesome. How long have you been there? Five years.

Okay. Is it fair to say, let's, because I'm kind of going somewhere with the idea that he's not just a boss. He's been a good friend.

“If a friend called you up and told you some really great news, how would you feel?”

Even if it kind of affected you, but you can tell, man, this is really good for them.

How would you feel? I would feel very excited for that. Were you out there looking for this job? Not really. Other friends who are in a similar position who had already taken before me, and there's

just more to come to. They're looking for people. They're looking for guys as they're hungry to work. Yeah. Well, what I wouldn't do is just stay in it for loyalty.

I would have the conversation with a whole lot of gratitude and let him know exactly how you feel. Man, you honestly changed my life over the last five years. The way you've mentored me, the generosity you've had toward me and my family, the things you've done for us outside of this place, it has impacted me, and I'm going to take that

with me forever. But there's an opportunity that is going to change our family's finances and help us get out of debt, help us build wealth, and we're going to take that opportunity. But I want to know that this place means the world to me, and I hope that we can remain friends.

How would he handle that?

“I think you'd handle that pretty well, I think he's a little too nervous about what the”

reaction will be. Yeah. Well, I think it's probably worse in your head than what's, I don't think he's going to yell at you and go, after everything I did for you, this is how you treat me. I mean, if he knew you were going to double your income, he should be happy for you

as a mentor. The reason he did all this was because he believed in you, and he wanted you to grow as a person, as an electrician, and a natural byproduct of that is when you grow, you outgrow. Yeah.

And I think mature adults understand that nothing lasts forever, you know, and few things last for a really, really, really, really, really long time, right? So I think that's just part of life to George's point, you grow, and sometimes you outgrow, and you can move on from different spaces, and that's okay. I think judging by the way you're describing this guy, I think he's going to understand

that. Yeah. I would be more worried if he was like a toxic boss, you know, if I got to bring him the snooze, and he's a narcissistic jerk, and he's not going to take kindly to it. We have my great examples.

Our friend Ken Coleman, who recently left Ramsay, and he was here 12 years, friend to Dave's before he got here, friend to Dave's after he left, and he had a very honest conversation with Dave, and led with a whole lot of gratitude, because I mean, Ken and I, you know, we grew up here. I feel like, especially me, and I kind of took over for Ken when I started here.

As a host, and I'm seeing some my journey in Ken's inner twined, and as he shared it, all you, like he was dripping with gratitude for the way Dave has treated him the team here, and nobody felt any level of, wow, I thought Ken was loyal. We know he was loyal up until the day he left, and now he's just a loyal friend.

“And so I think you're going to have to, this is like the first breakup of other break-ups,”

and the first one, the first one hits the deepest.

This cut is the deep. I knew you're gone. I didn't want to sing it, but I wanted to just know that. Sure, sure. So Max, I think you have the emotional maturity to have this conversation, and luckily,

I think he has the emotional maturity to handle it, and I'm honestly just so happy for you. I'm not even your friend, I mean, I guess I'm a new friend, but if he finds out you're going to double your income, he can't pay you that, right? It's not like he's underpaying you right now. No, he, I don't think he could match that.

Exactly. You're not doing this to try to manipulate him and to paying you more because he can't. And so, therefore, it's not like a tactic you're using. You're just changing your family tree right now as a young electrician who has a lot of room for growth, and I think you're going to find that if he's a real one, he's going to

stick with you as a friend in a long haul, and he's going to be cheering you on from the sidelines. Now are you moving to take this job or are you staying put? It's union, so I kind of pick who I want to work, but there's pretty and stuff that comes with it.

Okay. And are you going to choose to move or are you going to choose to stay put? I will. Interesting. Okay.

And are you still going to live in the duplex with that, that your old boss offers you?

technically through a management company, it's not necessarily just, you're not dealing with him directly. Okay.

I wanted to know how that's going to, I could basically say yes.

That's some awkwardness that you get out. Okay. How much did you have left? We have 22,000 in consumer debt. Awesome.

And you're going to be making 100k on your own when you take this new job. Yeah. Our take-home pay with this new income would be around 10, 6 months. Like that. Man.

That's pretty wild. Which means you're going to get rid of this debt fast, build up an emergency fun fast,

“be investing double what you would have been, and I think that's an amazing feat at”

your age to be in that place. And nobody would fall before it. Nope. Yeah. That's like old man.

And if you want, here's what I would do, I would practice the conversation.

You can write a letter first to kind of get all the words out there because when you start the actual conversation, it's going to be like a word vomit and you're going to be nervous and it's going to be emotional. And so just knowing ahead of time, how you want it to go and kind of knowing the flow in the arc, I want to start with the generosity.

I want to enter with the opportunity and with how grateful I am for this friendship. And then you guys can get in logistics. And I think quickly you'll find his facial expression will be that of maybe surprise, maybe a little bit like, oh man, but then at the end, happyness. Yep.

For a friend. Thanks for the call, man.

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and cut down on manual reporting. And if your revenue is at least seven figures, go to netSuite.com/Ramsey for a free product tour. That's netSuite.com/Ramsey. Joseph is in Tampa, up next, Joseph, welcome to the show.

Hey, how's it going? Great. Can we help today? I don't really know how to put it in a question, but I have a lot of debts.

“I'm not really sure where to go, and honestly, I just feel like I'm failing my fiance and”

our two kids and I just need help. Wow. Those are some fightin' words. How much debt do you have? I'm total $77,670.

What kind of debt is that? Break it down for us. It's 34,000 in credit cards, personal loans, and a broken rental lease, about 29,000 in a pick-up and about 14,600 in student loans. Okay.

So the overall is, I want to get out of this. I want to let go of this stress, I want to do more from my family financially. Yeah. Sorry. That's all right.

You take your time. This is, I mean, there's a lot here. I can tell this has been weighing on you a long time. Yeah, it's really hard. It's really hard.

What caused this?

“Was there an incident that kind of caused a snowball in the wrong direction?”

Or is this just a couple of decades just not being intentional and just letting life happen?

from watching my parents be really bad with money, have a lot of debt, and they still do.

I mean, I didn't really know what a debit card was, grew up or enough, I knew what a credit card was. So, the last few years, you know, just making dumb decisions, and then I've matured a little bit and realized that I messed up and I got to fix it. So you're working.

What are you earning? Yes.

“I don't know the exact, I think it's almost 71,000 a year.”

Okay, what does it look like a month?

What's your paychecks look like every time you bring them home? It's about $1,200 a week. Okay, $1,200 a week, and what about your fiance? She stays home with the kids. Okay, and how old are the kids?

Our daughter is almost four, and our son just turned two. Okay. And is there a wedding insight or? We've been thinking about going to the courthouse, but we've also kind of agreed that we

need to tackle some of this debt first before we can start saving for a wedding.

Okay, I would. Okay. What are your months, you guys, have so everything that I'm actively paying on comes out to $1,870 a month? That's just the debt.

No, that's just like my pick up payment and then all my bills. Okay, that's not your full, are you guys renting it right now? We are currently with my in-laws right now. Okay, so you have very little housing expenses, which is good. Yeah.

So you have a little bit of margin right now to throw extra on your smallest debt? The way I've got it calculated, and I could have it calculated wrong, is I have about 250 bucks a week left over a thousand bucks a month. throw extra on the smallest debt. Have you have you built a budget yet? Because if you don't have every dollar, we need to get you in that. Because I think it's going to give you a better visibility into all of this. Have you have you tried that? I had downloaded every dollar before I can't tell you that I've used it. I just have a piece of paper in front of me with the cost of all my bills and you know how it comes out each month.

Before we get off the line, we're going to make sure you have every dollar because it's going to help you in so many ways. Number one, it's going to give you a clear picture of

“what your income is, what your expenses are and it's going to help you with the most important thing next. And that's what you need to focus on.”

And just being able to see once you plug in, okay, here's my income. Here's all the expenses. Here's how much margin I have per month. Looking at it on a weekly basis is helpful, but really seeing it for the month and seeing those lump sums is even more helpful. And I think that's going to give you a clearer picture on what's actually going on. And then you'll know, okay, I have, you know, $800 or I have a thousand dollars every single month that I can throw at the smallest debt, which in this case is the student loan.

But I have questions about this $29,000 truck. Can you tell us more about that? Yeah, I was 22. I thought I was doing well for myself. And I mean, at the time, it wasn't the worst, but I'm doing way better now. What's it started? Probably right about, we actually talked to my buddy. He's a car salesman, but he said he can blue book it right about 28. Okay, great. Now what it's worth. Okay, so if I were in your shoes, I'd be off loading that truck immediately. Do you have any money saved anywhere? I have $400 in the savings account.

Okay, so here's the plan. I'm going to give you a step by step plan. Thing one, I want you going by a credit union this weekend, and I want you to say, I need 5,000 bucks. And that's going to be the money that you spend on your used vehicle. It's going to be a beater. It's going to suck. It's going to have a lot of miles on it, but it's going to be like a Toyota or something that runs forever.

“Okay, so that's thing one. And then thing two is you need to get a thousand dollars saved, so you need 600 more dollars in a hurry.”

So I want you going through your house, you and your fiance looking at every single thing that you can buy or post or you know, I'm saying to sell because you need a thousand dollars saved. That's baby step one. And just having cleared out that truck and now having the truck payment back, because what were you paying on the truck? $930,000. And that's without the insurance. That yeah, my insurance side cover my fiance's as well as 330. Yeah, so you having that $1,200. $1,000,000 that you said you can throw at the debt. Now we're moving. Yeah, see what's happening here. We just freed up 2,200 to throw your smallest debt, which is over 25 grand a year.

If you go, well, I want to just take parts of it. It's not going to work. You got to go all in.

Now let's go back to the fiance. So you don't you don't have the money saved for the wedding. Tell me about the courthouse. Can you guys just go down to the courthouse and get married legally? So it's done and done.

“I think so. I mean, I don't really know all the rules. Why wouldn't you? Why wouldn't you? It's just a certificate. It's just something you both sign.”

Okay. So my ear to myself told me in the past that even if we do a courthouse wedding that she said she would still want a dress and a photographer and a tuck.

Here's where I'm getting at and this is what here's where my mind is going.

So you guys want to be married. You have a family together. I would love for you guys to be able to link arms on this and attack this together because it's for both of your future. You called in here sounding like you just have a pit in your stomach. It's because you're looking at the future with this woman and with your kids and you want to do better for that. And so what better way to start than to fully commit now today you don't have the money for you know a big party if she wants to put on her best dress and go down to the courthouse.

“I think that's great or if you guys simply want to say today this is kind of our secret and we're going and we're signing the paper and nobody really has to know about it.”

This is just so that legally we have the protections to go all in on this together. And then after you know in a year or however long once we calculate that this is done then we can throw the big party and we can tell all of our friends and it can be this funny story that we tell hey we were married all along we just didn't right. That's fine but for today what I want is the security of you knowing that you can talk to her and include this her in this and her income now counts towards this and now it's just not your debt it's her debt to and you guys are actually beginning a life together.

Okay and I don't want you to feel the pressure I've got to clean this up first before you got children.

“Yeah that's a great why by the way Joseph one of the best wise is those kids and that woman who you love and so I want to circle back to what you said the beginning.”

That you're failing your family let me tell you this failure is an event it's not an identity. Failure is a comma it's not a coma so don't let it be that's not who you are you made some mistakes at 22 welcome to the club man. Now it's who am I going to be tomorrow in the next day in the next day you live that out we're going to hook you up with every dollar to walk you through it and my book breaking free from broke. I want you to call us back when you're married when you're dead free when we want to celebrate every single milestone with you buddy.

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A lot of questions about buying and selling a house investing and budgeting but the top question was around retirement savings accounts. Yeah, the specific question was should I only contribute to a 401k or switch to a Roth IRA. Good questions you see nerdy debate. There's a lot of variables here so number one if you're still paying off debt you pause all investing so this is a question for later.

We say match first so if you have an employer match inside of a 401k then take that first free money then you can go to a Roth IRA.

Next finally if you run out of money like you max out the Roth IRA you can go back to your traditional 401k until you hit 15%. I love that we call that rule of thumb here match beats Roth beats traditional and part of that like we said yeah matches free money that's free money that your company is giving you. Yes of course and then of course you know the Roth IRA that's going to give you the tax free growth and tax free withdrawal in retirement. We love a Roth if you have a Roth 401k go like ham on that immediately.

And then of course if you don't have that you just do the Roth IRA and then you can go back to that 401k traditional which helps you get to your 15% goal.

“If you want to play around with your numbers your situation have a conversation with ask Ramsey it'll help you determine how much of your household income needs to go into each retirement account.”

And you can ask all of your questions today at RamseySolutions.com or click the link in the description if you're on podcast or YouTube.

Stephanie is in Detroit up next Stephanie what's up. Hi I am graduating from medical school next week with a lot of debt. My question is do you think making minimum income driven payments to qualify for. The public service loan forgiveness is a smart strategy or am I taking too much risk relying on a government program potentially accruing more interest if the program is canceled. Very thoughtfully worded. Stephanie appreciate that. Yeah I'm you know people hear us on the show and they go wow these people really hate student loan forgiveness.

“No we're just pro people taking control of their life it's not even a responsibility thing.”

There's nothing wrong with the public student loan forgiveness program it's just really hard to actually get it done and it's a long time and you're still making payments the whole way.

And you're also limiting your income because you kind of have to work in a certain place in order to get that forgiveness and if that changes will you're out. And so that's the risk that I'm more worried about not being canceled entirely but more just you don't know what the future holds and I don't want to limit you if you get an amazing job offer in the private sector. But you can't take it because you have these golden handcuffs that's a real bummer. But truthfully the data on it I mean the data on it is not good and I'll just tell you right now at this point like currently only 5.5% of the applications are approved for forgiveness so that means 93% of the applications are denied.

That's a horrible shot you know to risk how many years of your life doing a job that maybe you don't want to do just to possibly get the chance at this so how much students do you have. I have 300 about 315,000 to a lot. I'm starting residency in June at a place that does qualify and I'll have about 6 years of training that would go towards the 10 years so that's kind of where. Like you know I don't only have 4 years as a practicing position elsewhere that would need to finish to qualify. And what do you think you'll be making.

Um after fellowship I'll probably be making between 350 and 400. That's fantastic. Excellent. I mean well here's the napkin math on that if you can just for a short time let's say we can go both ways let's say you did it. Four years you made the minimum payments so you still paid into it but maybe you got the rest forgiven after four years. Cool we did it let's look at the other side where you are in full control and you just attack it with a vengeance and keep living like a bro college student in residency.

Well if you could put you know if you could live off let's say 75 or 80 of that. 350 to 400 right that leaves you with 300 grand you could throw it to death so you'd be done in 18 months. Right instead of hoping that four years from now or whatever it is that it's paid off.

“So either way I think you could try it but I think I like the odds of Stephanie more than the government program working out.”

Right I guess we're just I'm engaged in one of the things we wonder it should be putting more money towards the loan right now or should we try to like buy a home and you know pay a mortgage. I just think that kind of where we go. Listen we had a dentist call in earlier similar questions similar amount of debt and he had the same struggle is like hey I'm getting to that point in my life I want to start a family I want to buy a house.

And when I hear somebody that has $315,000 of debt and then you say oh and I'm thinking of buying a house on top of that that just feels like the ultimate stressor because now you're cutting into your margin because home ownership George I don't have to tell you it's one expense after another.

Especially as a newlywed couple yes there's no reason you guys have to jump into home I mean just rent for a year enjoy your newlywed life without all the stresses of home ownership.

There's some blessings in there but if you do it with a huge mortgage you can't afford to which by the way you'll have close to nothing down which is going to make your mortgage huge on top of the student loan debt even if the payment is income driven. And it seems low it's sort of a you know farce because it's 315 grand no matter what the payment is every month that's a good point and if you really think about this Stephanie the house that you would choose to purchase on a $400,000 income is if you had no debt the house that you would choose is very different than the one that you would choose if you had 315,000 in debt and my wrong where am I right.

“So I think it's worth it it believes you to to wait on this get the debt paid off by then maybe you're even earning a little bit more money and you're then husband will be working to write.”

Yeah he works.

What's he doing you know what he works as a breast salesman.

So he as well for himself we're just not planning on combining anything until we're married next year. But think about that let me walk you through that if you get debt free let's say before your married let's see follow this and 18 months or whatever you do this now obviously need to be at a residency making that kind of money so you're probably married by then.

“But if you can pay off the debt in 18 months 315 grand then you can save up another 315 grand and 18 months.”

Yeah, well my my income won't be that for another 6 years though. Yeah, so that's a ways away so even when you're married though when combined incomes once you're married you'll still be able to start knocking out this debt even before you're making that kind of right.

And so it still tells me I'm just saying within 3 years of being married 4 years you're probably going to be debt free with an emergency fund and a down payment.

But you just have to stay focused. It'll happen you'll be shocked at how fast you'll move away yep once you guys are married and you have two people working toward the same goal now that's that's hoping that he's on the same page as you that you guys have the same money values principles goals that's going to cause you to move so much faster. And I've great thing that you're going to be just fine, but I would focus on on paying it off because of your situation. I think the upside is there for you just to knock it out and not have a care at dangling of forgiveness and then to not get it because you messed up the application or you got a private second job.

Yeah, so I wouldn't do it personally, but I'm not mad at you if you do it. And don't take my word for it. So you get on the on the interwebs get on chat GPT and look it up for yourself and you're going to you will be astounded at the numbers and at the data on this and you're going to go. Oh crap. She was right. I wish she wasn't. Listen, I wish I wasn't right. I wish that this was a guaranteed move for you and it would happen and it'd be a light switch, but that's just unfortunately that's just not the way it is.

“Whew, especially when I think the problem is people are now going into massive amounts of debt without really feeling it.”

That's right. Because they're gone well. I could probably get it for a given later. Hopefully, fingers crossed. Well, what what it's hiding under is the rate has actually increased, but when you say, oh, we've gone from 3% or we've gone from 1% to 3% or 3% to 5% it's still 5% that's terrible. Now it's 5 out of 100 people who are going to get it. Hoof. All right, Jay, let's talk about insurance. Everybody needs it. Nobody wants to talk about it. And it can be hard trying to find pros who aren't just looking to make a buck trying to find agents who know their stuff.

But we've got you, Ramsey trusted insurance pros are vetted and coach to make sure their market experts who have your best interest at heart. So go to RamseySolutions.com/coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent.

Yeah, I felt out the application. It was a breeze. Five minutes on my phone love that and I slept a little bit better at night. Now I just got another appointment. I think I need some blood worked on. That's the noise on my face a little bit. Well, one time they hit at the hit a valve.

I didn't know I had those but I'm pretty old and so I never gave blood after that. Let me just say that.

“Who? That was painful. Somebody just passed out whilst they were driving. Sorry, that's my bad. My bad. Alright, let's go to the phones. Blake is in Chattanooga, Tennessee. What's going on, Blake?”

Hi, thank you guys for taking my call. Sure. How can we help? I have a question about retirement. So right now my husband and I were on days at four, five and six. We are not hitting the 15% of our income and I'm not sure where to go. So we already max out our IRAs. We're doing 12% in the husband's 401k through work, which is about 12 or 13 grand and that does only bring this to 27,000 on a low. Like if we take a low month, 30 grand a month, roughly. That's a low month for us. That's 360 grand a year, right?

So we're coming pretty short on 15% for the year.

So I love that. So what is your gross household income for the year? Give me a ballpark on that.

The lowest it would be is about 360, but probably somewhere closer to I'm hoping for 50 this year. So you're maxing out the 401k. You're each doing a Roth IRA. You're maxing out those. Are you doing an HSA as well? No, we do not. You're an HSA. Okay. I love this problem. I mean, I can tell you George. Yeah, so I would do. I'm going off of that $450,000 number. I'm going to go 15% of that is 67,500. Okay. So if you both max out of 401k, is that what I'm hearing?

No, I don't have a 401k just 10. Okay. So we're going to do max out his 401k. I believe, is that 24,500 this year? Yeah. Okay. So we've got that done. Now both of you can do a back door or a Roth IRA. Because your income is too high for. You do that. So that's 15 grand, 7,500 a piece. Yeah. Okay. And do you guys have access to a high deductible health care plan?

“So you should have the HSA. If you do then you have the ability to open the HSA.”

We don't ever use it because we don't really, we don't ever really go to the doctor and eat the money. Well, here's the life that's even better. You fund this thing. And any money above a threshold, like any money above a thousand bucks, you can invest just like an IRA. Cool part is you can just stack money in there. And after the age of 65, it becomes like a bonus traditional IRA. And I think it's 8,500 a year you can do. Yeah, I think like 8750 or something for a family.

So I would max that out as well. If you have access to that, that's another 8750. And then he might have access to something called a mega back door 401k. And this is where you can do after tax contributions. And then convert it over to a Roth IRA. So he can look into that. But honestly, once you've done the 401k, the IRA, the HSA, I might then just go to a taxable brokerage account and invest in index funds. And kind of have a, what I would call a bridge account because I assume you guys are young.

Yeah, 3560. Amazing. So this bridge account, let's say you wanted to be work optional at 50 or 55.

Well, this bridge account in this brokerage account that's not a retirement account. You can just use that money. You'll pay, you know, capital gains taxes on any of the growth. But you can use that money to float you until you hit 59 and a half to access the retirement accounts without penalty.

“Okay. So that's what I would be doing in that order of, you know, we talk about match then Roth, then traditional.”

And outside of that, you get the HSAs, you have the back door options, then if you've exhausted all of those, because you want to take advantage of anything that has tax advantages, then go to the brokerage account and just invest outside of retirement to finish it out. Okay. That makes it. Yeah. So you might be putting, you know, 20 30 grand is that brokerage account. And if one day you may have an employer plan, then I would start utilizing that. You're doing right. What's your net worth it? You said 35.

Yes. Oh, probably not very much. I mean, we open it on our house. I mean, we've got our emergency fund. I don't know. Oh, there's an idea. You know what? I would do personally. I might use that extra money and throw it at the mortgage. We do. We pay $1,500 extra amount to our towards our, towards our house right now on top of the normal payment.

Yeah. I said 30 year long. We bought the house probably a year and a half ago. I can go for 90 on it. So it's pretty hefty payment. $3,500. Yeah. I'd start shipping away at that thing and knocking it out in like seven.

I would have a goal to have it paid off in about seven years with your income.

Seven years. You can do it. Guys make half a million dollars.

I mean, not that it's easy, but you can definitely accomplish this. If you throw, let's say, a hundred grand a year at it. You're done in four years, five years. Yeah. Yeah. And that's plausible for you. I mean, that's throwing like what? Seven eight grand a month at the mortgage total.

“So I think it's very doable. I would sit down with your husband tonight and start crunching some numbers and setting some real tactical goals.”

And I think that's going to put some fire under you guys to get even more intentional with everything you're doing. And then I would automate it all so that you don't have to think about it. Let's brain calories of that. That's a great problem to have. I love that question. All right, Derek is in grand rapids up next. What's happening, Derek?

Hey, so I had a question. I've got some people that are calling me for money picking up as a client for their financial advising services. Thank you, quick picture. I'm a self-employed real estate agent, but doing it for six years.

It's my income is not guaranteed.

I own a house, a married one kid. And my goal so far has been to just pay off the house as quickly as possible. We don't have any other consumer debt other than the house. And my dad's been getting on my case about starting investing in some more traditional ways. And one of those ways is he said, "I need to get life insurance with every kid."

And I need to start investing in traditional accounts. Well, this financial advisor, I know Randy's position on whole-life insurance and that it's terrible in I agree. But he presented this thing called a variable life insurance plan. And it sounds good, and I feel like I'm missing a downside.

“Oh, I bet he made it so good. Do you know why Derek?”

Do you know why he would pitch you a VUL over term life insurance? Well, I'm guessing he'll make a lot more money. Ding ding ding. We have a winner. This guy wants a fat commission check, and let me be clear. He's not a financial advisor. He's an insurance salesman.

Yes. In financial advisor clothing. Could be. He probably calls himself a wealth strategist on Instagram. I don't know. I'm not on Instagram.

That's the tell, by the way.

And their websites are always a little bit vague and sketchy.

What is he actually? Yeah, because it's selling. It's investments, but you don't have to have a securities license to sell variable life insurance. That's just scary part. They can get away with kind of selling investments through the insurance policy.

But no, these are terrible investments. And the returns are awful. The commissions are super high. The premiums are super high. So here's what I would do instead get term life insurance to cover the insurance side,

which is going to be a fraction of the cost, like 20, 30, 40, 50 bucks a month. And then that's the difference. The term policy he presented was like 20 bucks a month. There you go. And then whatever premium he was pitching you, if it was going to be $500,

just invest that $472 difference on your own and you'll be so much better off. Otherwise, you're going to be calling me back in five years going,

“hey, how do I surrender this awful policy that my friend wrote me into or family friend wrote me into?”

No, and I wouldn't get any financial advice from him in the future because it's tainted now. You already know he's trying to steer you towards products that make him money, not build you wealth. Yes. Big difference.

Big difference. Thanks for the call, man. [MUSIC] Welcome back to the Ramsey Show and the Fair Wins Credit Union studio. I'm George Campbell, joined by Jade Warshot,

or taking your calls at Triple 8, 825, 5225. Beth is in Pensacola up next. What's going on, Beth? Hey. How are you doing?

Good, how are you? Good. What's your question today? Okay. So I have $80,000 cash, but I have a three and a half year old mobile home

that I have $80,000 on that's completely falling apart due to manufacturer defects. It's completely rotty. We have mold. We really need to get out of here. And they don't also have student loans.

So I'm trying to figure out, like, do I take the 80K pay off the house

Or do take the money to fix the house?

Which estimates right now are between $1690,000? Good. Or do I get the student loan lucky off my back? How much are the student loans? So between the amount has been, it's $85,000.

$85,000. Where did this, the $80,000 cash come from? So we actually purchased property that we were going to move the mobile home. But in its current condition, if we take it apart, it's a double watt, and a trailer park right now.

If we were to try to put it back together,

“the engineers say that it would probably never go back together, right?”

So we sold the property. And so now we have the money from the property that we purchased. Got it, got it. So what would this thing sell for, even if you did the repairs? Like nothing.

That's what I'm trying to say. Yeah, that's not worth thinking. $90,000 into it when it's already not worth that. Right. So could you get anything for it right now?

I've tried not had any luck. I've honestly been trying to move out of here since a purchase of place

because nothing is basically what I was sold.

But how much did you purchase it for? So it was worth $129. I purchased it for $105 at a discount and exchange for living in the park for four years, which at that time we didn't have the property so it was okay. And then I'll $86 on it today.

And you've been in the park for four years? We will be in August. So it's our homes about three and a half years old. Okay. Man, oh man.

“And how many, how many bids have you had on the mold?”

Have you checked with several places or just the one that quoted you 60 to 90? Yeah. We've been like four months back and forth with the insurance and the mobile home dealer and, you know, they're saying they're not going to touch it because it's out of warranty, even though another home identical to mine was the identical damage in the same park. And he actually just let his home go back to the lender, but we worked really hard.

They filled our credit. Yeah.

Were you living in the meantime?

Were you living? You can't live in the mold. What's going on? That's hard. The hard truth is this just might be a money pit.

And either way, it's a money pit or already has been a money pit. And you might need to just use the savings, pay off the mortgage and get out of this thing as soon as you can. I think so too. Otherwise, you're going to go through four closure. Give it back to the bank and it's going to destroy your financial world for a while.

Yeah. And you guys can save back up 80 grand. That's not the end of the world, right? It kind of feels like we both came from this thing. So this is like a huge amount of money for us.

“It is, but let's let's pay in a picture because I think I think you've been in the midst of this for a while.”

And how would it feel to completely be free of this? There's no mortgage left. You can walk away from it. Just grab it, right? And then you guys look for an apartment. Your renters now, but there's no mold.

And when you come home, it's peaceful. And you're not, you know, battling insurance people anymore. You're not battling. Do you see what I'm saying? There's there's peace on the other side of this.

And it might cost you $85,000 or $80,000. But there's so much peace on the other side of getting rid of this mess. I'm just afraid that with the rental prices in our area, we're in Northwest Florida, that we won't be able to save up to buy our place for like years and years. And I've got an 11 year old nail.

And I really wanted to give him a safe home, you know, out in the country would have been the dream. And what do you guys do for work? So I'm a stay at home. Mom, we have three kids in our homeschool. And the husband is an engineer.

And what's he doing? And I do all kinds of sad stuff. He earns right out of 100,000. And what do you earn with the side stuff? Anywhere between like 10 to 20.

Okay. So $120,000 household income. You guys can definitely afford rent. It's not going to be fun. It's going to be more than you're paying now on a mobile home.

But it's not outrageous. Yeah. It feels outrageous. What's it going to cost? What's the actual rent for a reasonable home?

Nothing fancy. A rent for a reasonable home with no mold down here is about $2000 for three better. Great. You guys bring home in a one bedroom. Yeah.

And we don't have any other bills like we paid everything else off. No. It's 25% of your take home. But you're right there. Yeah.

Yeah. You're just not used to paying $2000 for any type of housing. So it feels outrageous. But for your income and your take home pay, you're right there. That's perfect.

And honestly, rent is the right space for you right now.

You don't have to shell out any extra money for anything else.

Because right now, once you get into an apartment that you can afford or a rental house that you can afford the next thing for you guys to tackle is this 85,000 of student owns. Yeah. Yeah.

“And I think, I think, honestly, even though there was what we would call some stupid tax attached to this,”

I think this is going to help you guys get right side up and start doing things in the proper order. Yeah. And I'm saying to where you're really able to achieve that financial piece that clearly you want otherwise you wouldn't be crying. Right? It's setting you on the right path.

And so that's the learning and that's the piece that comes from all of this. You know what? This is just putting us on the right path. Now we're walking before we walk or walking before we run, which is good. Okay.

And honestly, Beth, I don't want you to drain all of your savings to pay down a mortgage for a mobile home that's worth nothing.

So what I would do first is negotiate with the lender.

And you might maybe a short sale is the best move. But I think you could do a negotiated settlement with the lender after explaining all of this. And they might be willing to work with you to take a much smaller amount to call it good and get you guys out. Okay. It may temporarily, but you guys are going to rent for a while.

You have no other debt. And so it's not, it's not the end of the world in that case. Okay. You're not going to be buying a home in the next, you know, six to 12 months. Let's rent for a while.

Let's rebuild. Let's get rid of the student loans.

Let's build an emergency fund.

Then save a down payment. So yes, I know your dreams of having a home in the country and home schooling. That's still on the table. It's just a not now. Okay.

This is just a reset period.

“And I think you're going to have so much peace getting out of this.”

And by the way, your health and your family's health is worth getting out of it. Got to get out of that. Yeah, you're right. So you're not a failure. You're doing the most right now.

And you guys were dealt a bad card. And I'm so sorry that you're having a deal with this financially emotionally in the midst of some chaos. We worked so hard to raise it. You know, to do everything right. Even at no fault of our own we're losing everything. It's really hard.

Hmm. Well, I hope you can. I hope you can negotiate with that lender, explain your situation. Because this is, I mean, Yes, to have some decisions on your part,

but there was also just a reality of the defects and the mold that was just out of your control. So I wish you guys the best in cleaning the mess up and getting some fresh start. You deserve that. Hey, summers rolling in soon, vacations, camps, all the fun. And if you're already thinking, man, I hope I can afford all this.

You can enter right now for a chance to win $10,000 in the Ramsey May cash giveaway. $10,000 that's breathing room. You can fix the car, say yes to plans, stick to your budget without stress. We're giving away $110,000 grand prize and weekly $500 prizes. No purchase necessary.

Go to RamseySolutions.com/giveaway. Today's Ramsey show a question of the days brought to you by YRIFI. If you've lost control of your private student payments, your financial progress is stalled out. But YRIFI helps borrowers, explore refinancing options with payments built around their real life situation. So learn more at YRIFI.com/RAMsey.

That's the letter YREFI.com/RAMsey. May not be available in all states. Indeed, today's question comes from Justin. In Iowa, he says, "I'm in baby step two and I've been selling items to help pay off my $15,000 of debt. Currently, I'm just finding free items online and selling them on various sites."

While I've been doing this, I've seen some inexpensive items that I can purchase at a low price, allowing me to flip them for profit. Is this a good strategy to pay off my debt? Ah, arbitrage. You can find on eBay listed right now for five times the price and you flip it.

“I'd love to know, I think there could be some validity to this,”

but maybe I'd give you some guardrails here because what you don't want is you've invested even if it's $400 into a bunch of items and they've all been sitting on, I'll just say, the Craigslist to incorporate all of those different sites.

know you're like, "Ah, I thought this thing was going to sell it didn't."

I feel like that's a slippery slope to get in. I like the idea of it almost as a business. If you look at it like that, you're going to invest a little bit of your own money to purchase the inventory that you're going to sell. So in that regard, what I would do is set a boundary on it in your budget to say, "Hey, this is how much I can purchase each month to flip,

but it's going to come out of the profits from other things I've sold." Yes, I like that idea and only after you've done all the research. Because you can get starry, I'd just start buying stuff up, hoping you sell it. Now find out what is constantly selling for consistently at that price point and then make sure that you can still ROI after all of the fees and shipping and all that.

And I even say in addition to, I don't want this to be your only side hustle. I want you to be doing something else that's kind of like guaranteed quick, quick money as well so that you're not getting there's there's the opportunity that this could actually slow you down on your journey versus speed you up if you're investing too much of your profits. Yeah, well I've got a friend who was doing this for fun and she was finding like old school toys.

Yeah, she was buying stuff for kids and she would find these toys, look them up on eBay and sell them for, you know, she'd buy it for 5 or 10 bucks, sell it for $300. Yeah, because some of these vintage toys, these parents are like, "I want my kid to have the exact thing I had when I was a kid and they'll spend crazy money on it." So in furniture flipping, that's a huge one.

You can make so much on that.

You're sending me and you can do the research. It's not now. You've got to think about how much time you're investing into it. Right, right.

“I think that's the only thing you can do.”

I think that's the only thing you can do. I think that's the only thing you can do. And I think that's the only thing you can do. And I think that's the only thing you can do. I think that's the only thing you can do.

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“I think that's the only thing you can do.”

I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do.

I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do.

I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do.

I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do. I think that's the only thing you can do.

I think that's the only thing you can do. I think he's got 60 left on the mortgage. So wait a second. He's saying, and now is he holding it hostage? He's saying if you don't do this,

you will not be part of my inheritance. Is that what he's saying? No, no, no, no. Okay. Just checking on that.

He just sort of gilting you into it. Hey, hey, she could really use the money. You guys are doing okay. What do you think about giving it to her? Listen, I'm going to tell you right now.

I think that's totally out of bounds that he asked that. Isn't she already getting $100,000? $200,000? She was $24,000 in credit card debts. And my mom is going to help her out.

But she passed away. She's going to help her out anymore. How about this? Let's let it play out. Let's see what she does with her $100,000.

And see where she is a year from. I'm not even letting it play out. Well, it's more for entertainment purposes at this point.

“I'm not saying you should promise of anything.”

I would not be giving your sister this money. And it's not because you're cruel. No. It's because it's actually going to hurt her. Not be a blessing to her.

It's also because it was intended for you. Oh, my sister is bad. But here's the thing. Here's the thing. The money was intended for you.

There was a portion that was intended for her. There was an a portion that was intended for you. And some that were intended for other family members. There is no obligation for you. Whether she's doing well or not doing well.

What it doesn't. Her side of this honestly matters nothing. We don't wait inheritance based on who could use it the most. No. It was intended for you.

And it's yours. And if you wanted to do that, that would you would have to come up with that idea in your brain. But for your dad to reach over and say, Hey, son, I think it could be a good idea of you helped out Linda. That's not fair.

That's neither fair nor right. In any way, shape or lower.

My wife and I are actually actually we've settled her death.

Yes, she has no dead anymore. Oh, my God. Your sister has no dead anymore. Correct. She had like 24,000.

Over the credit card debt. I managed her contact her crediters and sort of a 15,000. Wow. So where's she at now? She works over until dog.

But now she's on the levels. She can't get her credit card anymore. Nobody will get her credit anymore. So now she can save. You know?

And she saved. I don't know that I want her to invest all of this money that she gets. And so I was going to send her information from the national pros and stuff in her area. How old is she? How old is she?

I'd see on 31. She's training 40 this year.

“Is there anything, and I'm asking this in the most delicate way that I can at this point?”

I'm not going to lie. I'm very irritated. Is there anything that precludes her from going out in the world?

And basically doing what what other adults do or is there an is there a mental problem?

Is there anything that's precluding her? Or is she just like a child like her growth is sort of stunty? Right. And we want to know is there truly anything there that we need to be considering? Or is this just a person who's just deciding?

I don't need to do all the things that the other adults need to do? No, no, no. She wants to find a new job. She's actually going to get married later this year. And her fiancé is very much like a guy.

And I'm like, I'm a lot. So then why is it up to you guys to step in and save her? Is my question. She seems fine. It seems like she's fine.

She's in a relationship. She's got a job. She's got a future house spouse on the way. She's got a hundred grand comment to her. Yes.

She doesn't need your help at this point. Yeah. I love you. You want to know what I'd love to do, Jason.

“I'd love to shift the conversation to, so what are you going to do with this?”

A hundred thousand dollars of inheritance you're about to receive. What are your goals, Jason? I want to shift it. So we're pretty well off. I'm planning on putting it in an index for my dad and his assistant's later.

He's older. I already said he wants something. What a guy. You're already thinking about other people. As you build wealth.

I would go read the parable of the talents in the Bible. It's a great parable that explains how you can squander wealth or how you can grow it. And there's a lot of scenarios. And some people cannot be trusted with money because they will not handle it well. And your job is to be a steward of any money that comes your way.

That's my viewpoint at least. And so if you were the steward of this money, what is the best use of this money? Is it to give it to someone who you know we will not multiply it? But instead likely squander it? I don't think that's wisdom.

Yeah. And another concern to find is that I have a special needs son who's going to be making care of the rest of his life. And we need to have a pretty big money. Yeah, especially it's trust and funded.

“That's what I would be doing at this month.”

You got your own life and she has her own life. You've already done enough for her settling her debts. I would step out and let her spread her wings. Yeah. When people hear my story of paying off debt, they say things like, "Dadding, that must have been so hard.

I could never do that." And I tell them, "Sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard?

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

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

Like our every dollar budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation. And every day it finds ways you can free up extra money in your budget. So you can get rid of your debt and actually build wealth. So make the choice today.

Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the every dollar app and start for free today. Welcome back to the Ramsey Show. We are now joined by a wonderful couple on the debt free stage.

It is Andrew and Megan. Welcome, guys. Thanks for coming all this way to celebrate with us. Where are you guys from? Chicago.

Chicago. Awesome. How much debt did you pay off?

I got it written on it. 165,293 dollars. Fantastic.

And how long did it take to pay that on?

22 months. Okay. There's a story here. Something happened. There was some hustle going on.

And what was the range of income during that time? About 200 to about 230 depending on overtime and side hustle. Wow. Fantastic. What kind of debt was the 165?

We had a car in there. A swimming pool. And then our mortgage. Yeah. Just throw that in there for fun.

Just throw a little bit. Yeah. That was incredible. I got to say I just saw the photo of, it was just like a backyard renovation situation. No.

So we just, the kids love being in the backyard. We got the pool. So we just some lights and a little movie screen back there for summertime. Yeah. So live in the life.

Look at this awesome. And now it's actually years. They can't repow the pool now. No. Absolutely.

I love it. I love it. Yeah. We've been a lot of trouble with the kids. Yeah.

Now that we need this pool now. Okay. So 22 months ago. You were sitting here with the mortgage, the pool, the car loan. What happened?

That made you guys go gazell intense. I hate saying it, but he started it. He was a Ramsey fan before I knew what Ramsey was. And I said, oh, that's great. Good.

Do your thing. And I'll do mine. And we just sat down in that was January of that year. And we were talking about kind of what our goals were and long-term goals. What we want to do, what we want to do for the kids and college and all that stuff.

And he mentioned Ramsey again.

And so I finally, we had the book on the shelf the whole time since before we met.

So I finally read it. And I'm the nerd. And once I read it, I was like, let's go. We've got a spreadsheet open. We've got this. We're doing it. And so just kind of dove in had first.

So you're telling me that what really changed it was number one. You guys sat down and actually had some vision for your future. Absolutely. And then it was, okay, we got a reverse engineer. How are we going to do it?

Well, here's a plan over here. And he dusted off total money makeover and said, let me just read it. All right. Yeah. And that sold you.

Absolutely. Yeah.

“It's so simple that it's like why weren't we doing this before?”

And you guys floored it all the way through. It's like, you baby step two, you said, okay, we'll do this car in this pool deal. But that's not good enough for us. We're going to attack the mortgage on to it. Yeah, it's well.

Yeah. We realize that kind of with where we're at in our life and the age of the kids. And you know, I know sometimes people say, I just, I want to be there for my kids. And I don't want to miss things. And I didn't want to miss it.

But more importantly, I didn't want to miss the future. I didn't want to see them going into debt for college or doing things like that. And so we decided to just really floored and live on beans and rice and do the thing.

So he was, he has always been, I'm going to throw a little extra on the mortgage,

a little extra on the mortgage, which made a difference. But it didn't when we were financing cars and pools. So how much of it was the mortgage that was left? About. Probably 120 years.

Oh yeah. Yeah. I totally get it. When you're that close, you're like, I'm just going for it. Yeah.

And we kept seeing it go down, you know, month after month. And so we did the pool first. We actually, we got our tax refund and paid the pool off right away. So that was a nice jump start. We had some in savings.

The car, I think we paid off almost a year before my initial projection was because we just started. What don't we need in cutting the budget down? And so then by then we were getting close to the house was inching closer and closer to a hundred.

“And we were like, well, I mean, what if we just kept this up?”

And so we did. And you know, any overtime that he could get from work. And then my side job, I just picked up as much as I could there too. And we just threw it all there. What was the side job?

I'm a nurse practitioner and so I do home health visits. I love that. Fantastic. That's a great success. It's probably one of the better ones.

I bet. Yeah. Because everybody, I mean, listen, if you can get it in your home, that's wonderful. Yeah. So good.

And how about you, Andrew, what do you do for work? I'm a fireman. Oh, fantastic. Yep. Look at this.

We got a nurse practitioner, fireman. So what do you say about this? I mean, obviously, they're going to, they're noticing. Life around here's changed. Mom and Dad, like, tell us more.

There were definitely times where they were like, Mom, Dad, why can't we go on vacation? People down the street are, they're getting the newer toys. They're getting, we said, no, we're going to, we're going to hold off on that. You're going to get it later on. Yeah.

And they, I listen to the show all the time and the kids are, they know the phone number. And they're like, oh, you're listening to Dave Ramsey. Like, they know all the time now. And they, they, they laugh when they hear the commercials. And it's like, what's in your wallet?

They're like, not a credit card. It's a debit card. So they, they're on board. They're drinking the cool aid. That may have been the best part of this whole journey.

Is that, you know, we say Morris caught them taught. And you guys have set a precedent to now. They're not going to turn 18 and go, well, Mom,

“I think I really need to build my credit and get a credit card.”

What do you, they know better now. Absolutely. Such a young age. You don't even need to talk about it. You've lived it.

Yeah. And I think that's a big thing. But more than more is caught than taught. We were wondering how we bring it in and how we teach them. And we realized that just doing what we were doing and telling them, like,

putting some into savings and, you know, this is what we're doing and why we're doing it.

So yeah. What's the house worth? Um, anywhere between 450. Let's go.

“What do you guys have across your retirement accounts in this deck?”

I think we're probably, we're probably right at or maybe over the threshold there for, for baby set millionaire, depend on the market to do in here. So wow. We're going to close that and not there. Way to go.

Exciting. I feel, I mean, you don't have a payment in the world. You owe nobody nothing. I feel like sometimes it still hasn't hit me. No.

It hasn't. We, we have the proof. Yeah. But I'm still, oh, you got the proof. I see everyone else here.

Everyone else telling about talking about what they're paying off. And what they still have, they still all on their homes. And I'm like, oh, I don't know anything. Do you know the exact amount. You guys have freed up in payments from the car loan, the pool payment, the mortgage payment.

Um, probably close to if not at about 3000. Wow. I would say close to 3500. Wow. So we're talking like a $40,000 raise and take home pay.

Yeah. And it's he last month worked. Um, some overtime. And we didn't realize how much it was until the check came in. And so instead of figuring out what goes where we're like, whatever you're going to do this money.

Like, it's a great, it's a great problem to have. And, um, fun to, you know, kind of plan what we'll be able to do with that for the future. What are you going to do? What are you going to do to celebrate this? Because this is a major, major accomplishment.

Yeah. So we are, well, we came here obviously.

That's, that's the first part.

What else? What else? We are going to take a trip this summer. We're going to just drive out west with the boys and kind of see as many of the sites as we can for a couple of weeks.

And then ultimately, we would love to be able to live on a lake. And so we're, we're putting money away to hopefully one day be able to do that too. I love that. That's so cool. Man.

Live like no one else. So later you can live and give like no else. Absolutely.

“I think that's the key to becoming dead free is.”

I think of whatever one says all the time, right? Yeah. Being partnership and having those conversations together. I think we, when we first got married, did not have joint finances. I was paying off student loans.

And I said, let me just keep it coming out of my account. And then we didn't know where the money was. What was coming, what was going, who was spending what?

And so finally, when we sat down and did this and got everything on the same page.

It just makes so much more sense. And now there's no question about what's going on. So the communication and getting on a good budget. Every dollar is my favorite thing, I'm on it all the time. Love that.

Because we know exactly what's going on. Then both of us can see it too. I love to hear it. Well, we'll, we'll give to you to every dollar subscriptions. You can keep those to renew yours and keep the fire going for new savings goals.

You can give them to someone else who you want to encourage to get on the same journey. That's our little parting gift to you. Thank you. Can we get the kids on the stage? Yeah, all right, what's their names and ages?

So Gavin is nine and Leo is seven. Love it. And they've been practicing.

“If they know the phone number, they for sure have been practicing the debt free screen.”

Yeah, we're very good. Screamers in general. So we're hoping that the debt free party. All right. Hey, blow the audience away, guys.

Okay, ready. We've got Andrew and Megan and Gavin Leo. Chicago area. 165,000 dollars paid off. That's the car loan.

The pool. And yes, even the mortgage. They did it in 22 months, making 200 to 230 with the side hustles. Count it down. Let's hear a debt free screen.

Three, two, one. What's that free? Yeah. Man, that's pretty wild. That's what I'm talking about.

Listen, you know what? We teach on here all the time. You know, you can be intentional. You don't have to be intense about paying off the mortgage. But man, every once in a while, folks like making an Andrew come along.

And they just slam on the pedal. And I'm not mad at him for doing it. No. And what's crazy is, yeah, they're making 200 grand. But the stats show people making six figures.

Okay. I'll put them on paycheck to paycheck. So don't tell me, well, if I moved that much. No. Use your income.

And as you make more, keep throwing at the debt. Keep working the plan. And eventually, you'll become baby set millionaires at a young age with a whole lot of life on the other side. So proud of you, guys. (upbeat music)

Alright, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling.

They're people you can trust to have your back from the first call to closing day.

Find a Ramsey trusted agent near you at RamseySolutions.com/agent. That's RamseySolutions.com/agent.

Our script for the day Matthew 634. Do not worry about tomorrow for tomorrow. We'll worry about itself. Each day has enough trouble of its own.

Mark Twain said the two most important days in your life for the day you were born and the day you find out why.

That's good. You gone last good day. Alright, John is in New York City. John, welcome to the show. Hey, thanks for having me.

Sure. How can we help? To get some contacts my mother and I love her death. I love her daughter so much. She has a great income.

You know, no debt except for her car. You know, the house is paid off. But I can't get her to buy in on retirement or saving. Actually, I can get her to buy in for a little bit.

But then it just goes completely out of the window for this reason or that reason.

And admittedly, I am worried that in 20 years she will be totally responsible for her financially. And that concerns me, of course. So I don't really know how to get her to a place to like fully buy in because she's in a rare and unique circumstance. Where she has the ability to save her retirement over the next 10 years and have a good retirement. But she just won't for, you know, multitude of reasons.

Sounds like something spooked her or scared her or she grew up hearing something, right? There's something that's living in her psyche that is informing her. And it's clearly not the facts. I think that's right. Yeah, she grew up pretty poor.

And so I think it's one of the mentalities of what if I die tomorrow and socials save. You know, we did get a lot higher going. You know, that's great. But, you know, that's pretty much all she has saved for retirement.

So she will do a rough IRA.

Oh, she had about 25,000 in it.

“And so that's the only thing that we've been able to stick to.”

Mostly because I think it's automated. So she's matching it out every year. Yes, but it only started through years ago. So, you know, quick napkin math in 10 years. I mean, in the way and frankly, you know, as you spend, you know,

I mean, that will go in three months probably. Does she have access to a 401(k) through her work? Yeah, yes, she has access to it. But, and we've sat down and, you know, date every single cent where it goes. And I mean, she have like $56,000 a month.

And her mind, what's the difference between her doing the Roth IRA? And letting that be, you know, automated versus also setting the 401(k) And obviously that being automated. And her mind, what as she said the difference is, is it just the amount of money or? Yeah, yeah.

It's essentially the amount of money. But she, she recognizes that she makes a good amount of money. But she believes that life just continues to get in the way. You know, but then it's like, I'm walking the Easter and, you know, I got a basket. Oh, so it's not, it's not the investing.

It's her parting with that being, that money being part of her day to day spending budget. Yeah, exactly. Okay. I mean, it's probably $200 a day. And I just don't know where it goes.

Like, frankly, I don't know where it goes.

“And I think that I will grow resentment if she has no money in 10 years.”

And I've just been watching this for, you know, two decades. Where's your wife? Where's your wife? Where's your wife and all of this? Because if you, you're a good son and law, you're talking with her.

It feels like this is something that maybe your wife should be taking the lead on. And, and there's part of this where you both are going to have to relinquish the idea that, Shh, you can't make her do anything. Like, she's a grown woman. She can make her choices and because of that, you can also control what you're going to do,

because if you and your wife have sat down and said, we don't believe that it's our job to fund her retirement. Let's just, we agree on that. Fine. But maybe it's our due diligence to let her know that as well so that she can factor that into whatever

plan that she has. And then from there on, you can kind of just go on about your business and say, I set the expectation and I'm aligned with my spouse. It's all good in the hood. Move on.

What's wrong with that? No, and you know that that is definitely a conversation where neither of us want to have it.

“And I think that if push comes to shove or both like on the fence of, like, of course we'll take her in.”

But that budget will look totally different than where she wants it to look like. But I think the thing the expectation is probably what needs to happen. Personally, through my mom, I got probably like locker in the closet, you know, six days a week. 'Cause I'd like, what are we doing? Like, this is ridiculous.

I mean, it's, it's just disappearing into random spending. Exactly. I guess it's probably $200 a month. I think her burning too, I think you're burning too much energy on. Yeah.

Just continually circling what she's not doing. I can't believe she's doing this. I just got this. Why wouldn't she, that's a lot of energy you're burning. Uh, John.

“And so I think you need to burn more energy on.”

Here's what I'm going to do.

And here's what that's going to look like. Here's what my wife and I are going to say. Here's what we're going to do. This is what it's going to look like. This is what it's going to sound like.

And, and if it makes you feel better because, please hear me. I get it. There is just, when you come from someone, you know, you've got parents. You care about them. And even though it's very easy for myself for a George to say,

it's not your responsibility because this is your family. You do feel it. So I want to acknowledge that you do wish that you could get a mental in it and go in and change it, but you can't. So if it makes you feel better.

What you could do is say, I just want to make sure she knows.

I'm just going to set a regular rhythm of, you know, maybe it's once a year.

We kind of have a state of the union and we say, hey, we just want to. I don't know if you're interested in the investing thing yet. We're still here if you want help because remember, we're not funding this. And as long as you're, it's almost like the college discussion that you have with children.

You set the expectations and you set it early and often. I know what you're saying with this. Yeah.

“So I think you're going to, you can, what you can do is support and equip your wife with some information to bring to your mother-in-law.”

So that this conversation goes better because it's going to take a little bit of a persuasive argument if you can even get her to invest. But the good news is as you found out, if you can get her to automate it and just live on what's left, then you're golden. And so if your wife can sit with her, log into the 401(k) or ratchet it up and all of a sudden she is less coming in each month. Well, now she has less that will, you know, flitter away into money leaks. And also the good news, I think I heard you say her home is paid off. She's not taking on any new debt correct.

She just has the car loan. Yeah, she just had a very nice car and that's it. What's left for the car loan? Do you even know? Oh my gosh, um, 34 probably, 34. Does she have any plans to pay that offer? She's just doing the minimum payment.

You know, the 600 a month or whatever it is. She has savings? No bleeding. No, and that's the thing that we would get to, like, 15, 20,000. Again, pretty easily, pretty quickly. And then it's like, you know, all of a sudden, you know, like, one of them has access to the account.

And it'll be $400 in there. But what is this? And it's nothing like on the surface of, like, you know, a $12 dollar handbag or whatever. I think it's just like literally $200 a day. No, that'll do it.

That's $6,000 a month if you're doing the math at home. Yeah. So it doesn't take much to just have all these money leaks either way. It's even when you make great money. And the more you make, the more you go sweet, more I can blow without feeling it.

So this is going to be doubled or salary. Like, we've done really good work. And you're like, I'm so emotionally attached.

“Like, I just, I think about it because much of I think about my own part.”

You've got to chill out with that. That's the scary part. This is consuming you. So I mean, it's like, you can't want it more than she does. And at some point, she might need to feel the pain. But again, that's too late for you.

Where you're going, well, I don't want to need to fund her retirement. So that's going to be up to your wife to go, mom, we love you. We are not your retirement plan. And I don't know what your plans are, but it doesn't seem like you have one. And I love you too much to watch your retire broke.

And for you to become a burden, I want your retirement to be filled with dignity, filled with options and flexibility, and not you needing to live with us. Because you have no other option. Yeah. Oh, boy. And for anybody listening, man, if you're listening this, and you're, you know, late 40s going into your 50 60s, please, please, please,

take it upon yourself to do the right thing. Do not set up your children to have to have conversations like what John is having. It is your duty to set yourself up for life. It should not be your, when you bring children into the world, it's your responsibility to take care of them.

You brought them here. You take care of them. And there's no quid pro quo of, well, they now are my retirement plan because I raised them. No, that's selfish. That's what it is. And we're, we're seeing a generation that is the sandwich generation. Yes. They are trying to raise their kids.

They're trying to set their own financial goals. And they got to take care of mom and dad who did not prepare for retirement. They got their own kids to take care of. Like, hey, mom and dad, you had a 70 year heads up that one day, you're not going to be able to work anymore.

And you squandered it. So this is why we're seeing a generation who wants to learn financial literacy, which is probably the only silver lining here. Well, that puts this hour of the Ramje Show in the books.

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

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