The Decisions You Make Now Shape Your Success

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

So we're here to help you transform your life from the Ramsey Network in the Fair ones Credit Union Studio. This is the Ramsey Sharmjade Warsaw next to me, G.K. George Campbell, taking your calls for the next couple hours on the phone lines. We've got Katherine who's in Atlanta, Georgia,

Katherine, you are on the line, my friend. >> Hey guys, can you hear me? >> Yes ma'am. >> Hey, so my husband and I, we are 20 in 22. We've been married for a little over nine months now.

And we're really starting to think about our future and being wise with our money early on.

And our biggest goal is to buy our first house before we had kids,

Lord willing in the next two to four years. And we want to put 20% down so we can avoid Pima. We've both worked full time jobs, we have a budget. And we just want to make sure we're doing everything we can to reach that goal. So my question is, how aggressively do you think we should be saving for our house

while still kind of enjoying the season of life? Should we cut back on fun things and kind of go in for the next couple of years to reach her goal faster? Or is there kind of like a healthy way to balance where we can still travel, do date nights and things here and there? >> I mean, I do think, I love the goal of buying a house and I even love your time frame.

You said it in the next two to four years.

“And I think the balance that you need to strike is considering the following.”

If you don't have debt and you are in the phase where you could also be investing this money, there's a give and take, right? You want to say for that down payment, but you also don't want to lose out on unnecessary time, right, in the market. And so you want to balance that if you can do both at the same time, I really love that

and still hit your goal, but if it means, hey, we're not going to be able to invest 15 percent

because we need to put all of our extra margin towards this down payment then yeah, you might want to go at a more intense pace so that we're not losing time. So that's one thing to think about. And also a thing that I want you to think about is I love that you're trying to avoid private mortgage insurance PMI, however, in today's market, 20 percent down is generally

just the starting point, right? Because we want to make sure that payment is no more than 25 percent of your take home pay. And for that reason, many folks, depending on the amount of house that you're getting, many folks are needing to put upwards of 30 and 40, maybe even more down so that they can

make sure that that ratio is okay in their monthly budget. Yeah, it's less about the down payment and it's more about how does this actually factor into your budget as a monthly payment. And so I would crunch the numbers. What's your income here?

We're household income. Yeah, our household income after tax is about 87,000. Awesome. And you guys are debt-free with an emergency fund? Where are you at?

Yeah, we are debt-free with an emergency fund. We have lots of three months of our monthly income saved. So we've basically done all the baby steps up into a house and put money aside for our kids college funds and things like that. Yeah, so you're at babysept 3B and that's saving up for a down payment and it's to choose

your own adventure. Like Jade mentioned, you can invest anywhere from 0 to 15 percent and what I would do personally as a guy who went, we went a little too hard in the paint when we bought our house. We paid it off in 26 months. That was not the goal.

We just ended up kind of sprinting and we couldn't stop. Yeah. And so I would encourage you guys to live your life and prioritize like realistic enjoyment, like plan for a vacation, plan for regular date nights. You guys are newlyweds, this is a very exciting time.

I don't want you to look back when you have kids in a house and go, man, we never

got to enjoy anything. We just sort of sped walk through it, like a mall walker, you know? Yeah. So let's run this out in real time. Let's try to help you with some of the numbers.

What do you think just from you looking at the market, looking at your area, looking at your needs, what do you think that you might spend or would be looking to spend on a house? Yeah, so in our area, I would say anywhere from a good reasonable house, nothing too crazy. If anywhere between 380,000 to about 400,000 in the area that we live. So I'll put 400,000 just to account for some time here.

And if you're telling me, hey, we're going to put 20% down, that's $80,000, right?

“And I'm doing this on a 15 year fixed rate mortgage, because that's what we would recommend”

here. And by the way, I'm just using the mortgage calculator, you can find it on RamseySolutions.com. And right now, I'll plug in a 5.8 for the rate. We don't know what it's going to be coming up, but that's around what you might-- Well, by my time you buy a house, who knows where the rates will be.

Who knows? Who knows? But if we look at this, and again, this is round numbers, we're talking about principle and insurance on the payment, property taxes, home insurance, HOA.

So that's the argument that I said before that a lot of people are going above the 20%

because they really want that payment to feel cushy. And I don't believe that you'll still be making $87,000 a year for years from now. But do you see what I'm saying? Obviously, that would be way too much house for a $87,000 a year income. So those are the things I want you to be thinking towards.

It's not to scare you. It's not to steal your hope.

“It's just for you to prepare because I think you can get there.”

It's just being intentional about where you're actually going. Yes, that sounds great. So in your budget, I would just put a line item for date nights, put a sinking fund in there for a reasonable vacation. And then whatever margin you have left becomes your down payment savings.

And then you make peace with that timeline for now. Knowing that it will speed up as you guys make more money and get that budget dialed in. Yeah, that's the reality. I wish we could way of our magic one and say, oh, you can do it all. Have the cake eat it too.

Yeah, but there's priorities here. And there's the reality of the housing market. The housing market, it's expensive out there. We all know what that's nothing new, but the good news is they're 20 and 22. If this takes them six years to accomplish, they are still, I mean, gosh, they have their

whole lives ahead of them. Yeah.

First time home by our media and age is now 40.

Yeah. So if they do this by 30, there's still 10 years earlier than the average person.

“And there's no law that says you must own a home by 25, or else you're a loser in a failure.”

Absolutely. Don't let anyone, especially your parents, tell you that, which is what you hear from your family. Oh, you got to stop throwing away money on rent, Jade. You got to get in the house.

What are you doing? And that's another thing I'll say. Rent is, it's not a negative thing. Obviously, if you're doing it for the long term and it's your plan for life, it's not good because we know that home ownership is a key wealth-building component.

But if you're renting for a short period, or, you know, an extended period to buy time until you can afford to buy, I think it's a really smart decision. Now in their case, 20 and 22 years old George, I would say. And she said in their area average, right around 3, 380 to 400,000 is what she said. I might suggest trying to find something less expensive that may not have everything you

want. It's not the dream home. It may be something that's a fixer upper.

It may be something that you know is never going to really hit the mark for you.

But if you can get an earlier, just to get into the real estate market, and you're not having to spend as much time saving, I would probably suggest something like that because you want to get in where you fit in. The longer you wait, it's kind of like a moving goalpost in that way. And so that's just something to think about.

“Well, my first two homes were town homes because that's what we could afford.”

And we didn't need all the space. We were just a newlywed couple. We didn't have seven kids. And so that was awesome for the time. We were having seven kids, not if I can help it.

And I can help it. And so that's the goal of it. I always say we got two very needy French bulldogs. They don't count as kids, but the level of emotional energy that I have to expend is equivalent. And the money is not more.

And the money. That's my hot take on that. So the moral of the story is the best time to buy a house is when you can afford to buy a house. That's the teaching that we have around here.

And we really want that house to be a blessing not a burden. You might have heard us mention this 25% rule. You may have heard us mention a 15 year mortgage, which some people they clutch their pearls when we said that. This is all for your benefit.

All right. This is because we want home ownership to benefit you. Again, we don't want it to be a burden. And you can go out there and do what you want to do. But if you want it to be peaceful and a blessing, you'll do it the Ramsey way.

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Right back to the phone lines we go, where we have Sky, who's in Tyler, Texas, online three. Hey, Sky, how can we help today? Good afternoon, so I have this debt that I just discovered. It is a medical-de-abally of 25-22, and we can just discovered was because I thought it was

covered by my insurance, and I was never built for it.

It looks like it used to be about 3,500. I'm wondering if I should try to settle that and dispute it by some chance. I've tried to dispute it once and nothing happened. You don't think it's your problem. I don't know, I know it's mine, I went to the hospital last year.

I just, before I disputed, I wasn't aware what disputed meant, because I was moving to

“finances, and so I was like, OK, now I'm like, what's that was for?”

And so I was wondering if there was a possibility that I might be able to settle that, or if that would hurt my credit more, or if I just should just try to outright pay it. Is it in collections? I believe so, yes. I just discovered it on my credit karma, so I was trying to see, oh, OK, and I had no clue.

I would pull your actual credit reports to see which bureaus are even reporting it.

You can do that at annualcreditreport.com, it's totally free, never pay for that, and that

only gives you a real picture of what's happening, and then I would request a written validation of the debt. That would be your next step, because they'll have to validate that this is your debt. Members are actually right, and then you can contact the medical provider, the insurance company, ask for an itemized bill, explanation of benefits, all the nerdy stuff, because

I would, my go-to is always, well, let me fight it if I can, because the health care system is escape to begin with, so let's not overpay if we don't have to, and then what you

“actually owe, do you have the money to pay that right now?”

If you, let's say you owe $2,000. So right now I have my thousand dollar emergency fund, and then I have about 500 extra in cash that I've added to that, but I'm just kind of fully building up, so I have about $500 on that right now. A lot of times you can settle these for a quarter on the dollar, if you don't have the money, but you have the lump sum of about a quarter of this, I would start, I would start there.

At this point, you're probably not going to do any further damage. Did you say this is from 2022? Is that what I heard? Oh, 2025, so it's not actually that old, so they may not settle it. Yeah, the older it is, the more they're like, well, we're not going to get anything, we'll take something, but if it's only eight months old, they might go, nope, we're not going to settle,

you still owe this amount, in which case after validating it all, after getting the itemized bill, after finding it all to see if we can get that bill lower, or even removed, then I would pay whatever's left over, and I would try to do that in a lump sum on top of your thousand dollar emergency fund, and get that out of your life. Yeah, and if for some reason they don't settle, it's not unfair in the way that you had the service, and this is the bill.

Yeah, but never give them access to your checking account. That's the one thing, make sure that

you just do it as a, you know, online payment, or something like that, and you're not giving them yeah, what I like to do is like, I use a site called privacy.com, it's a virtual debit card, so that my debit card number is not exposed. So it can be a one-time use card, I can set spending limits, time limits, so it's called privacy.com. Actually, now we're a partner on my YouTube channel, and I've been using it for years, so I was going to say you've been talking

about that for a long time, because I hate when people are like, "Well, George credit debit cards are so dangerous, you're going to get scammed online." I'm like, there's tools and ways out there to avoid this. Do you know, it's so, it's so funny you said that, because just recently I was thinking about how checks are just crazy work, because it's got your name, your address, it's got your routing number and your account number on the deck, I'm check, and we were just writing a

“willy-nilly just handing them out. Now I think about that and I go, "What was wrong with this?"”

Well, life hack, I found out you don't have to put your address on there, so now my checks don't have my address, but I mean, that's at least one step closer. But just, it's got the routing number in the account number, George, right there. We're just sitting in a lot of checks, if I don't have to. Well, I thought about it recently, because I almost, I a check was required, and I was like, I'm not writing a check. All right, Mary. I know, what is this? Mary's in Boston, Massachusetts,

Mary, how can we help? Hi, so I just have a question. I'm on the baby step two, which is, you know, horrible being on the step and said debt that I have, but I finally have like a big chunk, because I just had a recent pay raise, a fire was able to pay off so much debt that I'd be off in 10 months. Come on, come watch me. About 17,000, and I'm currently, I'm doing a program

it's already like legitimately paid. It's not a promise to pay. Oh, yeah. So what is that? You're 47,

you're 47 down? Wow. Wow. Wow. How much do you do? So, because I'm, I just became a nurse practitioner, so I stupidly, before I did the applied went through financial fees, I was fell into that trap of taking out all the student loans. Oh, I'll just pay them back, and now my minus the 30 grand they just paid. I still owe 120. And then my car loan is 17,000, which is why I'm calling today to see what I can do with that. And then I have two credit cards that are 6,000. So, I am,

I am doing the app and every dollar. Yeah, I'm doing every dollar. That's the point. I have about,

yeah, since there is a third paycheck this month, I have an extra 5,500. This month, so I was going

to put towards one of the cards at 6,000 and then wipe off a card. But my question is, should I take that money and do something else of it? Because the, something else, like what? What was thinking, like, how can I get out of this car loan? Because I listen to, you guys show pretty much like every day driving into work. Yeah. Let's talk about that. So, the 17th, that you owe 17,000 on the car. What's the car worth? Have you checked it on Kelly blue book? So, it's like it's saying like 10 to 12,000.

Is that a trade-in value or private part? It's horrible. Well, it says 10,000, trade-in, 12,000 private. Okay. So, it's a $5,000 difference. Yeah, five grand under water and you have the five grand. But then even if you got out of that car, you still need a different car, right? Unless you're able to commute with public transportation. Are you? Yeah. So, I know. I have five kids. Oh, goodness. Oh, good to know. That is a, yeah. We need that information. Okay.

So, how quickly could you stack up another $5,000 to buy yourself a used van or whatever it is

“that you need to use in the meantime? So, that's actually what I want to do because my car is like an”

SUV in the third row. Once it pops up, it just isn't conducive for the kids. So, I want to get

a van. So, there's a third paycheck in October. So, that's another like $3,500 extra. And then, I mean, I have, I know that I have the emergency sign or I can pull from funds from like other things. Like, I have a few, not a lot, but like a couple hundred, three, four hundred, and the, um, thinking find them in the, so like if I go rogue and take money out of like all the things, what are the thinking funds? What are they for? I guess just because I get nervous if

something happens. Listen, but it's good you should have thinking funds even when you're on baby step two during the death snowball. It's just, is it for a vacation or is it for needed maintenance that's coming? That's the question. Are they, are they necessary? Like need

“and they need to meet and they need to meet and get nervous like if something happens with the car?”

Well, let's leave those of them. Let's leave the thinking funds. I don't want you to go back into debt because you took out the money from your sinking fund once you need the car repair. Right. I think what you can do is keep the 5,500 aside knowing that you're going to need to replace this car and you're going to need to pay the difference and just keep going intensely like you have been and then an October, you can actually make that transaction. Once you have enough to get the

other car and get out of your loan, that's when you know the time is right. Mm-hmm. So just keep those money's aside. Anything above and beyond that, yes, go as intensely as you can at the 6,000 in credit card debt and then yeah, pull the trigger when it's time knowing that you have the money. How much will you free up when you get rid of the $17,000 car? What was the monthly payment? 5,60. Hey, okay. What's your household income? Yeah. So I'm separated from my husband right now.

So me, like we co-parent and do 50/50 with everything with the kids. My income is 145. Great. Great. We're playing this up. It'll take a bit, but getting rid of that car, I think we'll

“free you up emotionally, mentally, and $560 raise on top of your other pay raise. That's what this is all”

about. Raise is on raises. Raise is on raises.

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if you're listening on YouTube or podcast. Alright, even. Mary is in Phoenix, Arizona. Mary,

Georgia and I are here to help. Hi, thank you so much for taking my call. I'm so excited. Just for a little bit of background. My husband and I are in baby steps three and we are about two to three months out from finishing that and moving into baby steps four five and six. Yeah, we did a little bit of talking and while we're doing that, we still want to be able to save up for things that come up such as vehicle replacement or repair or house repair or, you know,

“next town for vacations or things like that. So we were just wondering the best way to do that.”

Like is that would that be best achieved through like high yield savings or investment type of town? Love this question. Yeah. And sinking funds for everyone listening out there, it's confusing. When you're sinking, you're like, that sounds bad. It's a good thing. If you have a $1200 expense that happens every January, like insurance, sinking funds says, hey, let's put a hundred bucks away in our budget so that we have that money ready when the time comes. So, Mary, the way I do it,

there's different ways to do this. Some people like to just keep that amount in checking, stacking up. But for some people, that's tempting because you go, oh, we got extra money in checking. We can spend more. And so people just cash flow it. And some people cash flow it. If it's a small enough thing, like a hundred dollar subscription, you might be able to just finagle your budget that month that's coming out to adjust for it. But in example, Mary, my insurance premiums are all coming

out tomorrow. Every single one, the annual premium, this is thousands of dollars. So what I've done is in my every dollar budget, I've a line-up in for each insurance and it's stacking and I move that amount to savings every single month. And so I have a reminder, and when it's coming up, I move the money back from savings, back to checking. So that's the simplest way to do it if you have a little bit of discipline to keep up with it. Does that help? So in terms of planning, though,

for let's say, if we wanted to take a vacation next year and we just need a time to plan and stay for it. Would you recommend just like, you know, just kind of the standard savings or is there? Yeah, I will go high yield savings. So I don't have a normal savings account because I want to make more than a half a percent. And so for example, our friends at FairWins, they have an awesome smart bundle that has a checking account, no fees tied to a high yield savings account. So that's a

great way to actually move the money really easily back and forth for things like sinking funds. So you can set up an auto transfer of 500 bucks a month to go to savings for your vacation so that 12 months from now you got six grand. I love the idea of FairWins. I'll tell you what Sam and I do. We have two high yield savings accounts. We have one that houses our emergency fund and then another high yield savings account that's broken into buckets where we can save for, you know,

car upgrades, vacations, you know, work on the house, whatever it may be. And then of course, our checking account. Yeah. And I like to earmark it like you're saying, and FairWins actually,

“you can have up to 10 different savings accounts in there. So that's what I do, Mary, because”

you see emergency fund and you're like, well, there's 100,000 dollars in there, but that's earmarked for five different things. Right. So I would separate it with different titles like vacation fund,

who are, they're just a little trigger-happy. It's easy for them to go over and and get that money. You might put it in a separate institution. I've heard of people doing that. Yours truly, I can't look at it. I can't see it yourself. Yes, it's like how people used to put the credit card in the ice block. I'd be in there like chiseling it out in the middle of the night. So I need to make sure you pay some emergency. Yeah, keep it away from me. I don't want to see it. Are you self-aware, Mary,

where do you fall on this spectrum? Oh, we're very self-aware. We use every dollar to prep our expenses. And, you know, like I said, we're kind of future planning where we are like about two to three months out for that. For, you know, building up that emergency fund fully and then moving into the next baby step. So we are very much aware of it. We, you know, we have our monthly budget meetings where we go

over the budget. Do we make any changes to you? How do we tone you guys? You're amazing. I know. Well, Mary,

“I don't think we really have to worry about you much. I think that she's got it in the bag.”

But she's right. And that there are a lot of ways to do it. It can be confusing the mechanics of a sinking fund and where to move it from. But I do like the idea of automating your savings. Yes. Because leaving it up to me to remember or have a discipline. Yes. Not going to lead up the chance. So all of my stuff is automated. And do it automated for payday. By the way, if you're going to automate things, do it. The day the money comes in. Don't let it be the last thing you do. Just let it happen

automatically. Automate smart. Yeah. It's similar like your 401k. I'm glad that it just is gone

before it hits my bank account. I never even think I had the money to begin with. Because if you can

learn to live on that smaller amount, you're going to be just finding this life. I know that's right. So that's a great question, Mary. Thank you for that. Yeah. All right. Mike is in Charlotte, North Carolina. Hey, Mike. Hey, how are y'all? Thanks so much for taking my call. Absolutely. What you do to help folks including other members of my family and ourselves. So my question is, what kind of what amount of

“an emergency fund do you recommend for folks to have in retirement? Oh, are you in retirement now?”

Yes, six weeks into it. Congratulations. How old are you guys? How, thank you. We just were both 60. Fantastic. All right. So how much do you have currently in the emergency fund? So right now, currently it's about 96,000. The threshold had been 35,000. But when last month job received a severance, we put that in the emergency fund as opposed to putting in an investment. Because our plan is, I have a pension from a previous career. And that we plan to

our plans for retirement. I think are pretty reasonable. Just want to be able to live the way that we have. So the 96 grandios plans or anything. The 96,000. How many months of expenses is that for you guys? What does that equate to? Our cash flow is roughly 90,000 a year. Sorry, your broke up on us. Mike, speak directly in your phone. Oh, I'm sorry. Sorry. Yeah, sorry. Our cash flow is about 90 grand a year. And my pension is 60 grand a year. So we'd probably take about 30 out of that a year.

And my thought is I would like to having to pull from our investments once I've used all of my severance. And if we could keep, you know, if that extends it instead of having 35,000 in the emergency fund, if we draw that down to 20, you know, it probably would allow me to not have to pull anything out of investments for an additional six months. I love that. Yeah, and there's a couple of schools of thought here in the financial planning world. It's generally recommended to have one to two years

of expenses if you can to stomach a downturn in the market so that you're not pulling out 90,000 dollars when the stock market is down 20%. That kind of, that really hurts the next day more. And so if you can have one year, you're doing great. If you can have two years because you want to be super conservative, you're doing even better to have 200 grand there. And then some people say, hey, every January, take as much out of investments as you need for that year and then don't

touch the investments the rest of the year. You now have your expenses sitting there in a high-alt savings account. We can, sorry, keep breaking out of on us, Mike. I'm so sorry. A lot of expenses are what I would say optional. So we're completely debt free. So, you know, when the market would be down, we would not take out as much out. And just you can shrink your spending market down to half of that. That's the key. That's the key.

“The key to a great retirement is having flexibility. I'm so proud of you guys. Can I ask”

what your net worth is? Yeah, we're right at 2.2 million. Fantastic. How much that is your

next day? Yeah, thank you. 1.5. And you have a $60,000 of your pension. Yeah, it's, you know, I was a couple. Oh, man, Mike, I'm sorry. He was, well, either way, they've done a fantastic job. And I love the questions around that. What would you say, George, to the person who's

And I had three to six months. Yeah. For most people, if you have a sizeable nest egg to where

you can stomach the market downturn, you're like a cool. I can do six months. Yeah, you're going to be okay. But for someone who's going, I don't want to have to rob the portfolio at the worst moment, or I can't shrink my spending. It is wise to have at least a year. So, personally, when I retire, your boy's going to have two years. Oh, you're going to have stacks on every side. I'm going to be an advocate. Oh, you're going. I'm ready for anything, baby.

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available in all states. Today's question comes from Diana in Maine. When my husband and I co-signed our daughter's student loans, this is a strong start, she promised us she would make the payments. The loan is due now and she refuses to pay anything on it. We've worked hard or whole lives and are debt free. Are you? That's my extra commentary. I like it. We recently started saving for retirement, which will be in 10 years. We've already paid 60 grand on her loans and the

balance is 75 grand. We know that we should never have signed for her, but they would not allow her

to sign because she had no payment history. She's 17, of course. What can my husband and I do? We've always had a wonderful relationship, but this has caused a huge wedge between us. Why is the, I wonder why the wedge is between the, well, they expect you to earn a pay. They co-sign going fine. We'll sign it so that you can go to school, but you're going to pay. Maybe that was a conversation. Oh, she's saying the wedge between them and the daughter. Yeah. It has been

an update. Maybe all of them at this point. Maybe because someone probably was like, we've probably shouldn't do this. And once that's like, now we show it's our future. It's an investment. It's how it usually sounds. Oh, this is brutal. And it's the number one reason I hate parent plus loans is because of the relationship killer. It's not even the financial aspect. It's, I love

“my daughter too much for this to cause a wedge. So the truth is, I'm going to pay the stupid tax”

and pay the extra 15 grand of the balance of 75. They paid 60 on it already. Chances of her paying slim to none at this point. And if she does, she's going to resent you forever. So this is sort of a $75,000 remaining stupid tax. It might mean you retire in 10.5 or 11 years instead of 10. And that's a, that's a hard pill to swallow. But that's, that's what I would personally do as a parent if I was in the situation. I'd love to know. And it's not in here. I would love to know

how successful the daughter is at this point, was she able to get out of college and land a great job? Is she just choosing not to or is she really on a struggle bus? There's so many ways this could land. But do we don't have a situation? Is she able to make the payments? That's one thing or is she trying to like buy a house and she's doing great. But she's like, this is not a priority.

promises you something, I'm going to take that with a big old grain assault. But here's the thing,

that again, and that's such a good point because most people are like, I'll pay off my student loans eventually in 30 to 40 years. And that may have been her thought. Like, yes, I said I would pay them back. I just didn't say I was going to pay them back in the next two to three years. Yeah. Can I, you know, in what teenager understand the actual amount of 135 grain plus interest? You don't. Especially in a parent plus loan where the interest is even higher. So by the time she graduates and is actually

“paying this balance as balloon, she's going, whoa, whoa, I haven't signed up for this. And that's why I'm”

going to take a hard stance and this is a hot take. But this is the parents fault. Even though she's not doing something you had, you were going to deal with the 17-year-old about thousands and thousands of dollars and you were depending on a 17-year-old to make good on a thousand dollars, you know, thousands of dollars of promises. I find that to be a parenting issue more so than it is the 17-year-old's issue who is now probably in her 20s. But it's on to them. Here's the two paths.

They can pursue her and go, no, you said you would. It's all going to hurt. She's never showing up

for Thanksgiving ever again. You won't have a relationship with your grandkids. Is that worth 75,000 more dollars to you? That's really what's on the line here. And for me in my house, I just, I can't my daughter's three. I cannot imagine losing that relationship over a mistake that I made. Yeah, you got to preserve the relationship. This is a suck it up buttercup situation, unfortunately Diana. But you guys will be okay. You will live to tell the tale. I hope so. Hopefully it's a warning sign

for any other parent who's in that situation. ought to be. All right, Elizabeth in Orlando, Florida is up next. High Elizabeth. Hi, Jane and George. Thanks for taking my call. Absolutely.

The former question. I learned to clear up something for a recent caller. They said the

cast of church in the area required couples to have a baby before marriage prep and as a practicing Catholic, as one to reassure you as is not the case. Then it's a spinal wedding during an active pregnancy because they don't want people making a lifelong covenant under financial stress. I have an opportunity to put it to that clarity. Thank you. I was on that call and I literally said this makes no sense and you just cleared it up for me. So I appreciate that Elizabeth.

I felt like I needed a back story. I'm sorry. This was like a week ago. I feel like you know,

“Jade was not there here nor there. But that's okay. I believe you. But a lot of people heard that”

call and were also confused and sent me messages similar to Elizabeth saying, yeah, that's that's on how we're. Gotcha. Gotcha. Okay. Well, thank you for that. Elizabeth, how can we help today? Yeah. Speaking of clarity, my actual question for you is that my own future. I'm heading to college this call on a 100% full-red scholarship. Yay. And I earned my full AA through dual enrollment. I'm very excited. I'm majoring in the animal will be in conservation and considering adding metmaps.

I'm that free and my expenses are covered. So I have the freedom to choose. I know it's early and I don't need to decide today. But I want to be intentional about choosing internships. My dormers between pursuing my passion for animals or lean into the map side, which can lead to more lucrative careers. Do you like math? How would you just say? Yeah. Okay. So they're both interest and loves of yours. Yes. Okay. So fast forward five years from now. What are you

“doing if I waived a magic wand regardless of the income? Are you like a park ranger?”

I'm not entirely sure yet, but like the possibly came-on trainer. Okay. Wow. That's cool. So that's more of a entrepreneurial endeavor, where you could start your own canine training business. And you can make great money doing that. If you're like the season Milan of, you know, canine training? Yeah. You got customers for days. So now the question is what is required for me to be a canine trainer? Do you need a degree for that? No. I'm just getting a doctor learn.

Great. So you're a lifelong learner. You're getting a full experience free. So if it's free, enjoy it, explore all your favorite classes, learn as much as you can, and know that regardless of what you choose, it may not even be relevant to the career you end up having. And that's okay. But for the mathematics side, I almost, if you have the free education and you know that something you're also interested in, I feel like that's something you would need a degree in order to

pursue a career. And if someone's going to hire you for a role that was tied to that field, they're going to go, do you have a degree tied to it? Yeah. So what would you do with mathematics? I have her mathematics. I'm just sure it's very flexible like a data or data scientist or

Good. Yes. Okay. Are you really good at math? Are you like a savant?

“I think so. I think so. But I really like the micro calculus course. Wow. Listen, if you love”

free calculus, God bless you. We need people like that out there. So maybe we ought to set you up with Ken Coleman's, his, his book, find the work you're wired to do. Inside of it, there's an assessment that you can do to assess your skills and what you're interested in, all of these, all of these different factors. And then it helps you take the results and do something with them. So we'll make sure to set you up with that. And I think, because at the end of the day,

you're, you are the captain of your course here. And Georgia and five minutes probably don't know which one you truly are better suited for. And it doesn't sound like there's a wrong answer here. I think you just need to decide. And as long as you're not going into debt over it, it's not a money question, right? You're not going into debt over it. The money part of it is just how, how are you going to make the most money over the course of your career? And I would wager to say that you're

the secret sauce in that. If you decide to start a canine training business and you're the one that's over that and you have a lot of intensity and developing that and you're smart in your business plan, you're probably going to make tons of money and same thing with mathematics. If you pursue a degree, you know, and go into a career path where there's a lot of upside, I think that you'll

do fabulous in that. I always lean towards utility. So what I would probably do and it's kind of what I did

is use the major that I think has the most ROI. But then take classes or minor do concentrations

“in the stuff that's more of the passion. That's what I did. I got a communication degree because I”

knew that's a broader field and I minored in like philosophy and worship leadership because I was into those things. But I knew I'm not going to teach philosophy, which is, you know, there's not a whole lot of people hiring philosophers these days, Jade. Yes, that's true. But you do quote philosophy in your book. I still love it. I love a good Aristotle quote. What can I say? We get you George. If you've had your phone two or three years, there's a chance it's unlocked. So bringing your own

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Hey, everybody. Welcome back to the Ramsey Show in the fair one's credit union studio. George and I are going to continue to take your calls. Remember, if you ever want to get in, the numbers triple eight, eight, two, five, five, two, two, five. Andrew is in Fort Worth, Texas. Hi, Andrew. How can we help? Hi, how are you? Oh, man. I'll tell you what. These, these sell towers need to come along with it. Can we hear you a lot? Oh, yeah, I can hear you. There we go.

So this is my situation. My parents followed me around the city and became debt free and instead that in me. And I graduated with the masses agreed, but without taking any food and loans. Wow.

I recently just got my first job paying 100,000 a year roughly. And I have a wedding coming up

that I'm trying to plan in about a year and a half where I need to save up for that and then move the housing department. Yes. I've been getting pressure from, you know, in laws and friends about why I don't have a credit card and, you know, they bring up, you know, if you use it as a debit card, you know, you can only really get the benefits. So I was asking for some guidance about how, like if that's really true, can I use it the credit card like a debit card and still get

“the benefits out of it without the risk? What are the benefits that you're looking for?”

Well, I guess just better rates for mortgage and, you know, that's the one thing that I will have to do. I can't really get out of. It's unlikely that I'm going to save enough money to buy a house cash. So I won't need to take out a mortgage. So if credit, if the credit score would help

I need the credit card to get the credit score to get the mortgage, right? Okay. What if we could

skip the middle man and go straight to mortgage without a credit score? Would you, would you then need a credit card? Well, no, see, as I talked to my mom as well and, you know, I know it's possible not to. I guess really my consent should be the highway way was better or not. Tell us why it's better. Here's the question I have for you. I'm just going to repeat this back to you. Tell me why it's better to play the game to get the credit score a mortgage versus why it's better

to get the manual underwritten mortgage. You tell me why one's better than the other. Well, I guess from what I hear it's better to use the credit card money since, you know, you can, you can get other benefits while you. Oh, so now it's about more than anything. That's

“what I saw there benefits. Okay. That's what we're trying to get to. Points. So what you're really,”

you're not really talking about the mortgage because we've established, you could do it either way

and you can't really tell me and I don't think anybody could for that matter specifically speaking about a mortgage, why it's better to have a credit score a mortgage or a zero score mortgage. There really is no advantage to a credit score mortgage because if you do a credit score mortgage, then you have to play the credit game. And once you introduce the credit game into your life, now you're introducing risk into your life. And so that's the disadvantage right there. If you

do a manual underwritten score a zero score loan, that means you have no debt therefore no risk associated with debt. So that's a no brainer. Now let's go back to what you're really talking about, which is, but Jade in George, if I open up a credit card, then now I can have access to some points. And George is kind of an expert on how those points come about and how they're actually used and whatnot. Yeah, I'm going to send you a copy of my book, Breaking Free from Broke Andrew.

I wrote extensively about this in the credit cards chapter and the credit score chapter to kind of dispel a lot of these myths because everything you've said so far is well, I heard and I'm getting pressure and they just want me to, and clearly these people care about you.

But they've also never known a different way. This is all they know. And as someone who's lived

without a credit card for 13 years now, purchased multiple homes without a credit score, and I'm not special. They didn't give me it because I'm George Campbell. They gave it to me because I had a strong down payment, zero debt to income ratio, did a 15-year mortgage. And if you do it, the Ramsey Way, 15-year mortgage, at least 10% down, you're going to get just as good as a rate as the next guy who's got a great credit score. Okay. Now on the reward side, let's say

you could have got 2%. Every study shows that if you use a credit card, you psychologically can't use it like a debit card. You're using someone else's money and paying it back later, and that triggers something in your brain to go, I could spend a little more. And that turns into 12 to 20% or more that people spend, which negates any 2% cash back you could have gotten. So my theory, and no one's taking me up on this challenge, use a debit card the next 12 months,

and see if you spent less than you did on your credit card the 12 months previous.

“I think everyone who did that would save way more than anything they could have gotten in rewards.”

Yeah, let me tell you the problem here. The problem that I hear is twofold. Number one, and this is not me getting on you Andrew. I'm going to say this is the general problem. Number one is you've got phomo. You're hearing people talk about this idea of what you can do with points, and you feel like you're missing out. So you better explore it is what you're feeling. However, yeah, but the other problem is you're doing more due diligence, exploring one side of the equation,

and you're not doing the same due diligence, exploring the side of a equation that Georgian I are talking about. So you're over here, you're looking at American Express, you're looking at capital one, you're thinking about what you could do with the money you're talking to all friends, all these friends agree on one side of the equation. You can need to do your due diligence on the side that Georgian I are talking about, and that's the only way you're going to be

able to see this in a balanced way, and I promise you. Just by facts, just by data, you're going to go away. George was right. Jade was right, but that's the challenge that I have for you. This is we're just two people you've talked to, keep going down this thread, and see what else that

“you can find, because I think you're going to find that we're right. The only thing you're missing”

out on, the only thing FOMO that's going on is debt and risk. That's the only thing you're missing out on. Hi, make sense. I have a follow-up question at this time. Sure. I recently, I don't have a credit card yet, so this is only doing research, but in doing that a bank that I have offers a smart card, which is like a credit card, but the balance is whatever you have in your bank. Yeah, it's a secure credit card. I mean, you're one step better off than just

a normal credit card, but at that point, just use a debit card. Again, what's the point?

So what we're teaching, in a moment, obviously we're talking about a mortgage, or we're talking

about a credit score, no credit score, but let's talk about it over the course of your life. What we're talking about is deciding what your financial philosophy is for your life. So you can be a person who says, you know what, and this a lot of people are like this, says go, you know what, I don't mind debt occasionally. I don't mind leveraging it for things like vehicles. I don't mind leveraging it in my credit score to buy a house. And if you choose to be that

person, we love you. We will shake your hand and we'll just go, he's not a ramsie guy, and that's fine.

“But then there's people who say, you know what, I think I just don't like owing people money.”

I think I just like being a person who is self-sustainable. I like being able to use my money.

The borrowers, the slave to the lender, and so I don't like feeling like I'm a slave. I don't like that one at temporary, even if it's temporary. Even if it's temporary. Right, and so those are the people who go, you know, I'm just drawing a line in the sand and I don't borrow money. And because of that, because I don't borrow money, I don't need a credit score. And because of that, I buy my cars over time and cash. And because of that, I manual underwrite if I want to buy a home. And so that's

kind of the, that's really the debate we're having is who do you want to be financially as a man in your marriage in society. And that's something you're going to have to take some time to think about. Yeah. And, you know, this idea that, well, just pay it off every month. I wish it was easy as that, because half the people don't. And now we're $1.7 trillion in credit card debt. We're $0 in debit card debt last time I checked. So, show you right. I wish I could, you know, give

humanity the benefit of the doubt. They have proven me right every time.

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“Kevin is in Houston, Texas. Kevin, you're up next. How can we help?”

Hey there. Thanks for having me. My question is regarding buying a house that is far away from my work versus renting an apartment that is close to it. For some context, I am currently living with my parents. I have no car payment. It's fully paid off. I have no credit card debt or anything. I keep most of my savings at how you savings account, and I'm currently missing out my Roth IRA, as well as my 401k. The apartment my commute to work is currently about two hours of the day

it's about fully 5 minutes in the morning, and then maybe like an hour to an hour 10 after noon, just depends on traffic. If I were to get an apartment, obviously it is kind of like throwing money down the drain, but it would shorten the commute to about like 10 to 15 minutes each way. I mean, you're throwing your life down the drain by spending all that time in the car. But that's you living in your parents house, right? That is true. Yes. Okay, what would rent cost

in your work? Um, it's about 1.5. What do you mean? Like 15 hundred a month. Okay. Yes, they're all like, man, why are you living? Dude, that's crazy. Okay, so 1,500 a month. And what do you

“take home every month? Kind of after taxes before your other deductions and investing in all that?”

After, um, I'm a contractor. I make 80,000 an hour. I'm not sure. I'm like, wow.

part of your world. And I think being on your own, having the independence getting your life back

is only going to number one increase your quality of life. And number two, make you more focused at work, better your job, um, and move you forward. Well, now tell us about why you were thinking about buying far away. What was the mindset around that? I just want to understand. So, I'm currently living with that parents. We're kind of near the medical center in, like, I guess Central Houston. I work out in the refinery area. And so buying a house closer to that is probably not very ideal is what I was

getting word from just from like, uh, my coworkers as well as, as well as my parents in general, the house location that I was kind of searching around for was still kind of within the general Houston city area. Just outside the, um, the inner loop so that it's not as expensive. Have you ever

lived alone? Have you, will this be your first time living on your own? Yes, after after college, yes,

but I mean, yeah, after the loan, uh, during college, yeah. Okay, but on campus. Yeah. Okay. So,

“my advice to you would be, um, I think eventually you do need to buy something. I think that that's”

great for, you know, well, building, I think that that's great for stability, all of those things. But I do like the idea because the fact is you work where you work, right? So, let's rent something in that area. In the time that you're renting two things are going to occur, uh, number one, you're going to be able to save up more money for your down payment. That's thing number one. But thing number two is you're going to learn the area. And you're going to be there for yourself.

You won't have to take anybody else's word for what's a good area to buy. What neighborhood do you like? What neighborhood do you find yourself attracted to, right? You're going to learn all of that. And that's really, really good research because obviously, you know, buying a house is a huge investment. And you do want to buy in the right location. It's like they used to say location, location, location, location. And one of those locations is what do you enjoy? It's got to be some place

that you like, not just what your friend said or what your brother said or what your grandma said, right? So, this is a win-win for you by renting close to work no matter how you slice it. Okay. How old are you? I'm currently 24. Okay. So, there's also, you know, if you don't need a house, there's nothing wrong with just renting because it makes more sense for your life because as expensive, quote unquote as renting is, man, it's expensive to be a homeowner,

to like maintain a three or four bedroom home that you're not even using and paying the extra property taxes. The utility bills, the maintenance, the repair, all that's going to add up. And so, I don't want you to think that renting is just a binary waste of money. You're just buying yourself time and you're really, it's a lifestyle choice in your early 20s.

“So, maybe until you know, you meet someone and go, you know what, I think I'm going to get married”

because guess what, that person is probably not going to like the house you chose anyways. The show is wrong in 24. That's true. I mean, I'll piggyback on that. I'm not saying that I would directly wait until you meet someone because who knows, you might not meet somebody till you're 48, but. Yeah, 24 more years. I'm not putting that evil on you. I'm just simply saying,

you never know, however, I agree with George Horrheartedly and there's also what if you're career shifts.

Like, if this is one of your first big jobs at a college, who's to say, you know, you could get an offer tomorrow and move, and now you've got a house. Yes. You're tied down to that and it's going to be expensive to get out of it with all the fees. And so that is something to factor in as well. Of who knows how long, if this is your long-term career and you know that, you're not going anywhere, then settle down. But I wouldn't just rush into it because you feel like renting is a waste of money.

That's not a good motive. Yes, there's no need to have a two-hour commute. No, thank you. No, thank you. All right. Meg is in Minneapolis, Minnesota. What up, Meg? Hi. Hi. Yeah. Thank you so much for kicking my call. My husband and I are looking for advice if we should fix our current car or for about the same amount of money get a slightly newer car. Tell us more. Okay. So we have, I love this car. We got about two years ago. It is a Ford Expedition. It's a 2020. It's starting to have issues with

its transmission. It's still drivable. But obviously, we don't want the transmission to blow up. That hasn't done some research and the repair on the transmission can be anywhere from five to eight grand to totally replace the transmission. It would be nine to 11 grand. So when we start seeing those numbers, we're wondering, do we just get a new car? The other bit of information is that that same model of car my husband did some research in the 2023 version and newer has supposedly

“fixed this issue that it's common. Okay. Is the Expedition the 2020 Expedition is it paid off?”

Yes. Yep. We bought the cash. Awesome. What's it worth if you don't do this repair?

Yeah. I would guess between like 20 to 22 grand is what we could probably get. Okay. And how

much do you have saved for this other car? We could probably put about comfortably 10 grand towards it. If we needed to do more we could, but we wouldn't want to spend more than like 10 grand and cash towards either the repair or new car. I mean, if you're either going to spend 10 grand getting a new transmission in this car or getting spinning 10 grand getting a revised newer version of a vehicle, I feel like that's a no-brainer. Yeah. I feel like it's a no-brainer because if you're

telling me it's like the escalates, the version before this past one, they had, they have so many issues and it's like it's one thing on top of it. And if you know that you just know that this is just

one thing and a long list of recalls that are going to happen. So if you know that, I feel, I mean,

George, what do you think? Yeah, I would get some real numbers on what you could actually get for this car and what that 20, 23 expedition is actually going to cost you all in out the door. That way you have some real facts and figures to know if you can even do this right now or if we have to keep driving it for the time being and get our actual estimate for the transmission issue as well. And once you have a couple of bits on that, you actually know what your car is currently

“worth without the repairs, you know what the new car is going to cost you. Then I think you can move”

forward with a lot of confidence. But I'm with Jade. I'd probably just go to the upgrade car.

You're doing it in cash. Okay. Yeah. And if you have, if you have a Christian brothers near you,

they're all over the country. I would recommend going in there here in Nashville and the Franklin area. We have Christian brothers automotive. And by the way, if you're even looking to buy a used vehicle, you can bring it over there and have the mechanic look at it and make sure that it's in good shape so you feel good about the purchase and inspection. Yes, please do it and they'll let you do it. So just bring it over there and then they also have like fabulous warranties. So if you have that in

your area, I would check it out. It's the only place that I use and it's only place salmon I take our vehicles. What about UGK? Yeah. I mean, I got a Tesla. So it's a, I'm in a different world. I'm going to do a couple to go to, they, they really kept it in there. You got to go to Tesla. Oh, you don't even think about that. It's like you got an iPhone. You got to go to the Apple site. That's right. That's right. They're built into the ecosystem. That's how they get you.

But luckily, very little things to repair. Yeah. It just, but is it more expensive because everything's so electronic? It's not bad actually. Any time there has been electronic issue, it's like, you know, two, 300 bucks. You're not going to have like a $5,000 issue. Can the computer just shut down

“while you're driving on the road? It could. But I think that's an overblown paranoia. Is it?”

Unless you're dating. Yeah, Dave would be riding with me and that's when it would happen. We get a good luck. People want to know. I'm all about practical ways to save time and mental energy. Especially during the summer when life gets busy. Between vacations, camps, deliveries, travel plans, online shopping, and trying to keep everyone organized. My mental load can get

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Get 20% off annual plans at joinsoleteme.com/ramcy. That's joinsoleteme.com/ramcy. All righty, George. A little discussion time here because we get calls and emails and DMs all the time about site hustles. People are trying to increase their income. For many reasons,

that gap. Maybe you're on the baby steps and you're trying to, you know, pay off some debt. Maybe

you're trying to save up some cash for the first time. And people immediately default to,

well, can I do a side hustle? So let's talk about that because we have some ideas for you guys, but I also want to start out the conversation by saying, if you do have an income issue, if your budget is not balancing and you're in the red or if you do need to make more money in order to pay off debt or do some of the things that we talked about, there are two methods that you can approach this from. Number one, and I want to talk about this first, for some of us, it's a core income issue,

meaning the job that you work day to day that you spend most of your time at, you're just not making enough money. And so you need to be able to identify, is this a core income issue or is this a situation where my core income is good? I could just really use some supplemental income. This process to go faster. And if that's the case, then yes, side hustling is for you, side hustling is what I would call a limited time only deal, right? You're not doing this for

“life. It's not the key to unlock all of your money problems. It's a, it's a way to speed things up.”

So that being said, side hustling, George. I side hustled. You did it. What was your favorite? Oh gosh, my favorite, I think, was doing the thing that I was doing full time, but on the side. So consulting. So I was doing marketing consulting, helping people launch podcasts, books, building websites. So I took my sort of marketing creative tech brain and put it to good use. And that was the most money I made, because I could charge 25, 30 bucks an hour.

It's an extension of a real job. Exactly. Versus doing Uber and Lifts, which I also did, you know, back in the day that I didn't have Instagram door dash. I feel like I'm back in my day. We didn't have these door, but that was the most lucrative, which kind of doing the consulting, freelancing thing, if you have a skill that translates. Yeah, I love that. So for Sam and I,

I fell into the first category. Sam and I did where it was, we had a core income issue. So we

had to work really hard on our core income. But in the meantime, we did side hustle. We walked dogs and I did baking and sold baked goods. What was the weirdest one you did? The weirdest one I did was I worked at a vinyl tint and lettering installation place. So if you, if you go down the road and you see one of those big box trucks that has like all my sons moving on the side, I used to install the vinyl lettering. Do you still know how to do it? Yes. Yes. I probably could

try my hand at it. And let me tell you, that's hard work. Like you're finger knuckles get asked. It's so manual. You're up there on ladders. Yeah. Wow. Did a lot. I did one that was the Nielsen people meter. So Nielsen rating. Yes. They use people every day people and they'll pay you as they listen to all the media you're listening to. They claim it only turns on when you have like radio TV. That's so interesting. And so I'd get a check for like, you know, 10 or 20 bucks a

month for just carrying a beeper around with me essentially. All right. Isn't that so crazy how

“they monitor that? But the truth is there's so many side hustles out there. Now I will tell you,”

I believe the ones that are the most lucrative. If, if it's not attached to your normal job, like what George was saying, the ones that are most lucrative are the ones that are service-based, I believe if you get off the couch and do something someone else doesn't want to do. Yes. You will make them most money. Yeah. If you most someone's lawn, if you will plant their hedges, if you will babysit their children, if you will watch over their grandparents, right?

All of these kind of like care and service-based, if you will cook their meals like clean the house, right? All of these very service-based wash their car. Yes. That is where the money, that's where the money and is that as a kid's what's not, you know, I hear these like, well, you can do surveys

from home and what are things I can do from home? The problem is the ones from home are so saturated.

There's too many people that want to do it and not enough work. So, you know, mystery shopping is another one I hear about and that's not going to make you enough money to pay off some debt. Yeah. The key is you can, you can really mess yourself up and take a lower hourly rate by doing stuff that feels more comfortable or by doing things that you have an interest in. This is not about interest. This is about you making money. So, there is a side hustle article that

I wrote, uh, it's on RamseySolutions.com. We'll put it in the show notes and it's got so many ideas in there for you guys. For ideas. For years, it came through. That's a lot, that's a lot of ideas. That's

“legit. Um, but this is what you need guys. This is how you need to get the old train running and”

get this money going. Right. And hey, drop a comment on this episode, wherever you're watching, listening, Spotify YouTube. If you're doing side hustles or you have, let us know what you do, what you did and how much you made either per month or per hour. Yes. Because I want to, I don't want to gatekeep. Give everybody the ideas. Some of them may not apply to you, but the key is, be resourceful. Get creative. What's something people aren't doing that people

would pay you for? Love that. And, and other side note, guys, now's not the time to be thinking, oh, this is how I'm going to start my next business. Yeah. We need to make money fast. And a good

No. That is not a money making scheme. It costs you money to get into it. And if you look at

the disclosures, most people don't make a dime from it. And so, not shade to anyone who does this, but this is not a side hustle that I recommend for people to get started. We want you to make money fast, more money. All right. That ends that topic. Let's go to Josh, who's in Dallas, Texas. Hey, Josh, how can we help? Hey, guys, how are we going? Well, that's an eye. We make about 400,000 dollars together. Excellent. We've been paying off our, we had a lot of student loans together.

I had a lot of credit card debts and vehicle debt. But we've paid all the vehicle debt off, paid all the student loans off. So, and we've paid off the credit card debt off. But we just found out we are pregnant and we'll be having a baby in November. Wow.

First one. And so, second one. Awesome. So, you're split between us. Wow. Okay. Yeah. So nice gap.

But yeah, we have been trying to do a high yield savings because after she had the baby she wants to take a year off. And we just found out that she has about $40,000 in credit card debt.

“Well, how did you find that found out? Did she not know?”

Yes, she knew. I guess she was a better guy than being consumable. I had the penny. The bills on my account. And so, I guess I just really wasn't paying attention to it because she was saying one of the stuff. Do you guys have separate accounts? We have one main bullet count. And then separate checking cuts. Did you know she had the credit card? Oh, yes. Okay. The way I do is I put my own credit card and I pay off each month and I don't

think she's not your sister. She hasn't been doing that. So, when you said earlier, we paid off the student loans. We paid off the car. We paid off the, was that a joint effort or was this something that was in your name or how did that come about? As a joint effort. Yes. Okay. We definitely get together on that. We're paying off student loans. You're paying the net and paying on the student loan. And then I was paying extra to try to mock it out. Are you feeling blindsided by this

or what is your emotion here? I'm having a hard time telling. I was blindsided about it. About a month ago. And then we just, you know, working on it now. You know, definitely just have an empty mentality because it gets knocked out. Okay. We got half of the 40,000 set aside on the European interest balance transfer. And then the other 20,000 still in the 29% interest. Okay. But I have 20,000 in the high yield savings because I kind of feel worried about that time after

she takes off after baby. Is there any money that is there any other money saved? That's non-retirement. Besides the 20,000. I have 10,000 dollars and just our bill account. But our bills

“are around $800 a month. Right. So that would not be extra money. Here's what I think needs to”

happen. I think that you guys have an incredible income and you have the means to get this paid off

before November. Now that might mean that how much of the 400,000 is her income? Let me ask that question. 90. Okay. So you guys can live off of your income for a year without needing to have it all in savings. Okay. If I'm in your shoes, I'm knocking out the credit cards with all the muster I can muster. And then save up as much as you can. And with your income, you're going to be okay to cash flow any kind of medical expenses that come out of this. But I would work to get this thing

cleaned up fast, sock up an emergency fund of another 10 to 20 grand before baby comes in November. Right. And the core of this is you now need to combine incomes. She wanted that money saved because that was her portion of the income. But if you guys use your money as yours hours and us, then it doesn't matter anymore.

“You know, George, people always want to know working here at Ramsey. How did Dave build this place?”

Like, how did he build up hundreds of millions of dollars in real estate? How did he create this

here called Investing Essentials. It's a two-night virtual event, September 1st and 2nd,

“you're part of it. That's right. Dave and I are going to walk through the playbook for investing”

wealth planning, including how he thinks about real estate, when he buys, when he walks away, he's going to cover the basics, basics of investing if you're new. And then we've got all new content on night two about wealth planning. So think inheritance taxes, how to keep the government's grubby hands off the money as you build the wealth, how to not destroy your kids, how to leave a legacy, how to think about all of this. And so we're going to walk through it in layman's

terms because it is some heavy stuff. Yeah. And so the meetings have been fun. It's deeper than

we've ever gone on this stuff. Is it for everyone though? Do you feel like people at all walks of

investing life? Yeah. It's definitely targeted to the babysept four plus crowds. If you're at a debt with the emergency fund and you want to dig into this stuff and get it right, especially over the long haul, wealth planning, wealth building, that's 20, 30, 40 year journey for a lot of people. So that's who it's for. Now we get people who are in the earlier baby steps because they want to know about it and be prepared. But that's kind of who is aimed at. You're going to get the most out

of it if you're there. So take it started at $199 bucks. Two nights we're talking four hours of deep dive content. Wow. It is live. Get yours today Ramsey Solutions dot com slash events or click the link in the show notes if you're listening on podcast or YouTube. Yeah, that's a biggest port. It's live. I love virtual. So it doesn't matter where you are, you can tune in and you can catch the replay if you can't make it during that exact segment from, you know, 7 to 9 p.m. or

whatever. So I'm going to be fun. Excellent. All right. Sarah is in Washington, D.C. Hey, Sarah. I paid in George. My husband and I are in baby steps to we make a household income of 200 and 10,000. I have 240,000 in student loans. We're projected to pay it off in about two to three years. This thing goes well. However, I have a scalable education business that I would like to

“invest in so that I can help accelerate the debt pay off. So how do I do that? Is it okay to?”

I just heard Dave being that, you know, who's not the time? Well, it depends. It depends on how we're looking at this. Can you scale it without spending $70,000? Right. And that's the biggest thing. So what does it take to scale it? Yeah, I thought of hiring a recruiter because it's like an education business. So we need more clients and students and per client and student. We can get after taxes and all that. It could be 1,500 per student. What does it make now? What's the profit that

you take home from the business as it stands? Yeah, it's 1,500 per student. And how many students? Like per year, what are you actually making from this business at the end of the day? Oh, so that's the thing. It's based on how much work I put into it, how much advertising I do, how much right, but today we've had just 12 students and we've made 25,000. I love them. For the year or for just over since we've been in business since we opened in two years ago.

Okay, so tell me give me an average on a month. How much money do you take from this as profit on a month to month basis? So that's the thing. It's hard to say, you know, per month because it's only whenever you know, people hear about us and they want to take our, they want to go through our program and then they pay for it. So it's hard to say per month. Okay, it's why I hope to have a recruiter pay them so that they can, you know, so I can tell them, hey, the expectation is two students per month.

And it would have to pay a recruiter how much per year. So how much on a flat, yeah, sure. I saw on like a, you know, one of those freelancing companies, I found somebody, she would be about $500 per month.

Here's what I'm going to say to this. I think that you do have an idea here, but my problem is you

haven't proven it out enough on your own. And I actually do think that if you invested the right amount of time and effort, you probably could recruit students on your own. I don't know that you do need to pay a recruiter. That's my first thought. My second thought is to go back to what you said earlier, which is if you had a business that was already generating a regular amount of income, I would say, and it didn't cost much to kind of ramp it up to the next level, I might say, yeah,

go ahead and do it. But similar to what George and I were saying earlier, when you're paying off debt,

“you just need money and you need it fast and you need to to guarantee it, right? And so that's the”

phase that I think you guys are at right now. I don't think you can make the gamble of paying someone

that's what it is. There's no guarantee that that recruiter is going to turn up exactly what you

“want and exactly what you need because you've never tried it. So I'm afraid I'm going to do it.”

I would put them on commission and say, hey, for every student you recruit, I'll give you 200 bucks. And that way, you're not out this money. They can still go in. They have a lot of incentive, but I feel like your core income is the money back here. So you can work overtime and make, because you're basically made 12 grand a year doing this. If you split your 25 over two years. So the question is, can you make 12 grand just in working harder at your jobs, working more at your

jobs? Yeah, yeah, I definitely could. It's just, you know, I work so hard to build the business, but to have it like sitting there for two to three years and just not do anything. And it's a lot of life and sure accreditation. But Sarah, even if you had one student and that was making

you $1,500 a month and you just kept recycling to make sure you always had one student. That's

better than a lot of side hustles. So if you said, hey, I'm going to get to like my goal is two students that I always no matter what month of the year I always have two students in the hopper, I feel like you could do that on your own. And I mean, that's word of mouth right there. And that's enough to really move the needle because you're bringing in $3,000 a month. Unless I have my numbers wrong. Yeah, no, you're right. It's just, I met the days of like just being tired of, you know,

advertising on my own. So I kind of wanted to just bring somebody in to do that while I work my full-time job and, you know, hopefully have that income coming in. But I think that you could try it for one month and go, hey, I'm okay, risking 500 bucks right now. Sure. It's a see if there's actual

ROI there because my fear is they go, I couldn't get anybody and you still owe me the money.

I loved your idea, George, of putting those people on commission. I can tell you with Sam and I, the reason that we were able to scale a business while we were doing debt is because of the payment structure, everything was commission. So we didn't have to shell out a lot of our own money.

“Everything was agent-based commission-based work. And we did, here's the thing, we did a lot of the”

work by ourselves. We weren't at the stage where we could pay things people to do things. We can do that now, but we couldn't then. You're HR accounting marketing, so you have to do it all. Everybody, where every single hat. And so that's why I'm, I'm challenging you because I do think that you probably, if you keep it, if you keep the bar reasonable and say, okay, my goal is one or two and start there, I don't think it'll feel as unmanageable. I think right now you're thinking about a

grand scheme. I want as many students as I can get and there's something wrong with that. But today, you just need a one or two. And then once you get one or two, you're going to feel the confidence to go, well, I could get one more. And it's going to build organically in that way. I would also deputize the students that have gone through. That's your best marketing right there. Are they leaving testimonials, reviews? If they refer someone to you, you can write them a check

as a bonus. And so there's a lot of things you can do with the customers you already have to scale. Yeah, I love that. And if you haven't already, maybe you have, I would utilize AI jump on and figure out what is it that you need to be doing because a lot of the jobs out there, the blueprint is right there on the internet for us all to learn. So I think there's probably a lot more that you can do if you just do some research around what it takes to find your customer. And I would treat it

like a job. Set aside, hey, every Saturday from 12 to 2, I'm working on the business. Yeah. I got to go to my part-time job doing this, creating the social media posts, doing the marketing, reaching out, whatever it is. And if you just set aside that time, kind of like you're budgeting your times, say, I'm not going to work on this more than five hours a week because I don't want to burn out. As much as I get from that is what I'm putting into it. Yeah, I love that. And that I really

write is probably pretty good. Exactly. You're getting a couple of students out of it. And that's

“the thing. That's why I think it is worth continuing to go down that well because just like George”

and I were talking about, your time is the most valuable thing that you have in this. Now, it's not the time to be wasting, you know, your time on an $8 an hour, $12 an hour deal when you can be really making some real money like she can. So that's what we're headed for. Find the side hustles that really are going to give you the biggest ROI and really help you pay down that debt. And in your case, your income is already pretty sweet.

All right, you welcome back to the Ramsey Show. We're here in the Fairwins Credit Union Studio continuing to take calls about your life and your money. And we have Ashland who's on the line in Lincoln, Nebraska, what's up, Ashland, how can George and I help? Hey, George, hey, Jade, how are you guys doing? Excellent. How are you? I'm doing great. So my question is

drain your emergency separation here and not use a down payment like we would teach you to do?

“Okay, so I just, I listen to you guys every day and I don't sound silly, I think this question.”

But I just hear about how real estate will make it a go up and I just feel as everybody does around my age. You feel behind comparing to everybody else and I'm going to get in it as soon as possible. How old are you? 20. 20. I was hoping for a number after the time. I thought for sure you were going to be 48 talking about I'm behind behind who the 18 years. Who are you following on Instagram? Well, my friend back home, they're very entrepreneurial oriented

and I am not. So they have their own little businesses and I just feel kind of less behind there.

Okay, what do you do for work? So I work full-time in investments firm and then I also have

a side hustle that I work probably kind of since two hours every other week. Wow, what do you

“make doing all that? So full-time my office job I make 24 an hour and then my side hustle case”

25 post-commission. Wow, 25 an hour post-commission? Yeah. Wow, how many hours a week do you do that side hustle? 10 to 15 and like every other week. And kind of however many events I want to take up but I've been kind of facing burnout recently. Okay. So I've kind of laid back a little bit. So maybe like 500 bucks a month is that what does bring it in? I calculated it before I called it. I thought it was about 15,000 last year. Oh, awesome. So over a grand a month. Good.

On average, on top of your 50 grand that you're making. So what like 6,000 bucks a month is that where or is that what you're bringing home? Where are you at every month? I would say average,

I would put it around 3500 a month. Okay. So let's go back to this house conversation for a second.

Are you telling us that, I mean, and you can shoot a straight. Are you telling us that really the only reason you're thinking about buying a house and doing it at the detriment of draining your emergency fund is because your friends are doing it? You know, my friends aren't doing it. I just I have I have four older sisters and I see them, you know, going and living their life and I feel behind compared to them as well. Okay. So let's talk about that in the red direction.

Let's talk about that because this is you're talking about money, but this doesn't feel like a money call to me and I you've got older sisters. So I'll be your older, I'll be your older sister from another mother. Can I be on? Yeah, you could be on and I'll be on to you. And let me just I'm I'm 42 years old George Howard or you. I'm 37. Okay. I want you to know because let let me just say it like this. I get comparison, comparison, it just feels it's just part of the human experience. But as much as we can

do to mitigate it, it's really going to be helpful for us. Okay. And what I really want you to take

“away from this is the following. Life is a race, but it's not a competitive race. Okay.”

And the problem right now is you're viewing it as a competitive race. You're looking at the runner next to you, which is your sisters, your friends, and you're going, "Oh my gosh, they're further down the track than I am." And you're trying to run and catch up with them. But that's not the way the course is designed. It is really you doing your personal best on your race. That's all it is because the courses are not the same. My course is not the same as George's

course. We're doing different obstacles. Different obstacles. Different obstacle. Okay. One's a marathon. Man, yes, and his is in the mud, but mine was on a straight shot, you know, his is by the beach, but mine is in the snow, right? There's it's very different. And so if you start comparing, you are going to be bamboozled every single time. And so what you've really got to do is lock in and go, "What do I have in front of me?" And what is my course? Where am I trying to get? And can I do it

as efficiently and with as good attitude as I possibly can? That is your goal. But as long as you start looking at, you do you see what I'm saying? And so you're 20. Your sisters are older. So you can't even compare it by age, right? So let's lock in and go. Okay. What's true is you've got a nice job, making 50k at 20 years old is great. You've got a great side hustle. It doesn't sound like you have debt, do you? Fabulous. You're way ahead of most of the countries regardless of age. If we were comparing,

if we really were comparing, I'd be like, "Well, dang, Ashens got her way more together than I had

impulsive to intentional, from this like, "Falmo to Jama," is what I call the joy of missing out.

“Now, and listen, I'm doing my own thing. I don't need to worry about being behind or missing out”

and the median age of home buyers these days is 40. So if you do it before 40, you are above average, Ashens. Wow. How does that hit you? Not as really crazy as it is. And you're going to get... I just like to stay ahead of the curve. You are ahead of the curve. So let's set a realistic goal that doesn't involve robbing your emergency fund to go. Okay. My next step is a down payment. What is it going to cost to get a place that I like and link in Nebraska by 25? Now, we can actually put

some number on this. Go, okay. It's going to be 350 grand. I need 50 grand down. I can save two grand a month. It's going to take me 25 months to have a down payment. So that's the kind of stuff that will move you away from just emotions to actual facts, to habits. And then you're actually going to get to where you want to go because you could get to 25 and go one out behind in a different way. Now I want a bigger house. Now I want to get married. Now I want kids. Whatever the thing is,

you're always going to feel behind if you're looking at the person in front of you. How many

sisters do you have? Four and you're the youngest? Listen. You're just, you just love your sisters. You're looking up to them. They're doing all these wonderful things. And that's great. They're kind of setting the path and they're setting the course of what quote unquote normal looks like. And I totally understand that I was the youngest for a really long time until my younger brother came along. And so I totally get it. But I cannot stress to you enough that you're doing

such a fabulous job to have to be 20 years old, no debt, no student loans. You are killing it. The fact that you're even thinking about real estate, you're so far ahead of the game that fact that you've been having emergency fun saved. Again, so far ahead of the game. You're really doing well. How much do you have saved by the way? I only have $10,000 saved. Right. Don't say only. Say I girl, I got $10,000 saved. 20 years old. I'm dead free with $10,000 in my name. I have a

positive network. Yes, put some respect on your own name. Way to go. Way to go. And your career is going to grow. Your income's going to grow. So it's easy to think. Well, this pace is going to take forever. You don't know. Five years from now, you're going to be in a different place. When I started this plan, Jade, I was 40 grand in debt back in 2013. And within 10 years, I went from

negative net worth to millionaire. I think that. W to employee. And I never thought I'd get there. People

overestimate what they can accomplish in a year. They underestimate what they can accomplish in a decade. And that's going to be an actual story. Oh, listen, and we didn't plug your numbers into an

“investment calculator, but you should ask Lin, you should go to Ramsey Solutions.com and use”

the investment calculator. Because if you start investing 15% of your money, which you could start doing by the way, by the time your Georgia Nines age, old age, you're going to have so many millions of dollars. It's going to make your head spin. She's going to be a rich and successful. A rich volunteer. Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime

with Ask Ramsey. Ask your money question and get answers built on Ramsey principles. We use on the show whether you're making a decision or just want something explained. Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's RamseySolutions.com. Georgia, here we talk a lot about budgeting. It's a core practice in order to do the things that

“we teach under the well. That's right. If you don't budget, we can't help you. What are you doing?”

What are you even doing? And the best budgeting tool out there is every dollar. And the truth is it's more than just a budgeting tool. It started out as just a budget. But now in there, there is the full Ramsey plan. It teaches you. It helps you. It guides you. It mentors you. It really

is a really, really amazing app. And it really is helping folks. Matter of fact, we got a fan quote.

Somebody sent in this message. They said, you know what? Every dollar is excellent. It really helped me get my personal finances in order. And now that I'm married, my wife and I use it together, out of our joint account. It really helps us maintain a common vision and set of goals. So honestly, that's really great for us to hear. We know that it works because we all use it. I've been using it since inception. It's a marriage improvement tool. Look at that. I mean, common vision and set of goals.

I'm impressed. But it's true, nevertheless. All right. Let's go to Tyler in Lubbock, Texas.

“Hi Tyler, you're on the line. Hey, how are you all? Don't good. How can we help?”

So I want to show you service business here. It's going great. Doing well. Cast everyone fully that's growing. Already done as much this year up to this point as we did all of last year. Wow, congrats. So I had a gentleman approach me this week about purchasing his long carry Christmas light business. I'm concerned. I'm contemplating whether that should be something I should add to my business. Who is the person that's selling it?

Someone from my hometown. We don't know each other super well, but we're from the same place.

And anyway, we've met to go over all the financials and everything. So why is he selling it?

He's moves. He's older and older gentlemen. He's actually moved to be closer to family. Okay. So he's not. He's able to manage it from afar, but he just doesn't necessarily want to.

“So why you? Why do you single you out? Go this guy. Might want to buy my business?”

Well, I'm pretty well known in the area. Or my tree service business. I'm certainly well known in my community. And I think I was just top of mind to reach out to. I mean, you know, he wants to sell it to somebody that, you know, he does want to sell it on it. So he wants it to be the right to it, you know. Do you? How much the business kind of costs? About 200,000. I'm not 100% sure if that's going to include all the equipment and just yet.

So I think probably safer bet would be like 250 for all the equipment. What's been a profit every year? About 40%. 40% of that. Okay. So is the plan that you would take the business and whatever profits you would make, you know, take a salary and whatever's above that. You would pay him until you've paid back the 250,000. Is that the deal? That's kind of how I presented it to him. He says you take out 60,000 per year to pay himself.

So yeah, so mine is that paying him back as quickly as possible. Yes. How many employees does it take to run the, just the long-care and Christmas lights? Apparently he has three full times. And then he has not been, he's been into business working himself maybe like 20, 30% of the time. But as of the last year, he hasn't been working in the business at all. Are they separate? Are they separate P&Ls or has he

to see run them up together? All together. Yeah. What is your tree service business making that profit every year? Not 175 for this year. Because I'm just wondering if you're going to put your time into something, it may be worth just scaling the tree service business versus getting into this deal. I'd also want to know separately what the lawn care does versus the Christmas lights. Because that to me, there are two very different. I can understand, you know,

well, if you're getting this service from me, I can do this for you too. I understand how it happened that way. But I'd really want to know how much are you making on the Christmas lights versus what you're making on the lawn care to decide which is the better business. And if they really need to be paired together, or if you can, you know, there could be a weak link here. Uh-huh. Right. So in my business, I've successfully fully delegated it. I'm only managing and leading

I have a self-person, I have the delivery team from fully built out. I have administration person. So I'm working in my business 15 to 20 hours per week. And it's been a found that that is the correct move right now. And how much are you taking home from that? I'll pay myself 60,000. Okay. So you're making 60 working 15 to 20 hours a week. And you're saying, I could go work 15 to 20 hours a week on this other business and make some money. Obviously,

you got to pay him back and agree on a percentage there. It doesn't sound like a terrible move.

I would do a lot of due diligence. And I would also never go into debt, quote unquote for this.

“So if you want to do a sweat equity deal, like we talked about where he gets, let's say 20%”

of the profits until the 200 K's paid back. I want to know, and I'd want to know what the time frame is because there's part of this where you can't necessarily assume everything's going to

I just like Bob or whatever the guy's name was. And so there might be some drop off simply

because Bob no longer owns the business. So I'd really be thoughtful to George's point on

“what are their terms? How quickly does this need to be paid back and at what percentage?”

And that's under the assumption that you're making a certain amount of profit, right? So there's all, and I, you already know all this. I can tell we're just reiterating it more so for the people listening because I think you know this. And again, I'd really want to know, tell me separately how the Christmas lights are doing versus the lawn care because and can I trim one off if one of of them I find is really siphoning money from the other. Or if one is a real headache and the other

one's super easy and higher margin. And the other thing is just making sure you have a good transition

plan of how are we going to roll this out to customers so we don't lose them. How length of time is this going to take is a six month process to fully turn over the business and he kind of stays in it to guide you through the process because there's going to be some learning curve with a with a new business. It's run, it's been run a different, very different way than you run your tree service business. And then are we going to, you know, move this into our tree service business

to be one bigger business or is it going to be two separate ones? And a final thing here's another factor to write on your list is how does this affect your ability to scale your original tree

“service business at the rate that you really were intending to? Is this taking the place of that?”

How are they running alongside each other? Could it hurt the business? Yes. By taking your tension away from it? Well, the Sancius church question was the Christmas I've just been done for 2025 and that was only about 10,000 of that amount. So that's pretty new, right? This would be a very symbiotic business to what I'm doing already. The launch of this part, yeah. I could present this long-care slash lunchhaping slash Christmas life offer to all my existing customers and you know,

probably instantly increase conservatively at a customer base by 30 percent. And what I

intrigued me about is like tree work is generally one off, pretty high profit. But I'm also missing a lot of potential customers that don't beat my minimal, right? Right. The addition of this lawn care would add contractor recurring revenue, right? Yeah, I can see that. It'll stabilize the business in a lot of ways. Yeah, it'll give me the ability to do these lower margin higher volume type tree jobs. I don't think it's a bad, I mean, let me just go out on a limb here.

And say, I don't think George, you're supposed to laugh at my pun. Sorry. I took me a second.

“Thank you. I don't think this is a bad deal in theory. I just think you need to really”

dot your eyes and cross your teeth and really ask a lot of good questions. Don't rush it. I think it has a potential to be exactly what you're saying, which is a nice boost to your business and really help you grow over time. I think you've just got to play it out and make sure to George's point. No debt. That's the key. I'm going to send you a copy of Dave's book, build a business you love Tyler. I think it's going to give you a lot of confidence and clarity

about how to do this the right way and how to scale it properly. [Music] Hey guys, Rachel Cruz here and I love summer. There is more fun on the calendar, more time with your people and way more chances to make memories. But you know what else? There's more of spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so

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Guys, you probably heard us talk about our free AI tool that's built and trained on Ramsey principles. It's called Ask Ramsey. And today we're going to break down one of the

And the question this week is, I have I've cut back on retirement savings and spending to pay

towards credit card debt. What else can I do to pay off $20,000 in credit card debt? So this person is clearly not really doing things in Ramsey order because we would tell you that if you have debt you do need to pause retirement and pause everything else to get paying things off. Yeah, cut back tells me there's still something going toward it. We need to full stop. So pausing all retirement contributions even the match. I know it sounds crazy because we're not talking

“about math here. We're talking about behavior momentum and that's what happens. When you pause”

that match you're a little bit angry and you've read up some margin. Now you're a dangerous man with some money in your pocket. Yeah. And number one, if anybody with credit card debt,

yeah, you have to cut up the credit card. You can't solve simultaneously solve a problem while

simultaneously creating the problem. You've got to cut it down. Yes, don't add to the balance. And like George said, yeah, pause retirement contributions. And then there's just month to month things you can do like stop going out to eat, cut back on subscriptions. That's all entertainment luxury. Yes. And then what we've been talking about, I feel like we've talked about this all-hour long is side hustling guys finding extra income, whether that's a side hustle, taking on extra

overtime at your current job. Even $300 a month, guys could really shorten your timeline. So pick an amount and focus on it and say I want to make X amount extra dollars every month. And then start selling stuff. I mean, Facebook Marketplace, I list a lot of stuff on there. List stuff that I paid too much money for that hurts my soul to sell at a deep discount. But then I realized, oh, I can go buy it at a deep discount from Facebook Marketplace later

when I'm not broke. And today's society, maximalism, like everybody's just got the most of everything you're telling me, there's not something that you would think something won't sell. I dare you, put it on Facebook. Somebody will take it. I want sold a pair of used bath mats. I will tell that story all day long on Facebook Marketplace. They were, they weren't even very big. They were turquoise squared used bath mats in those Joker sold. So don't tell me,

somebody's needed it more than you, Jay. Wow. Well, hey, check out Ask Ramsay. It's going to walk you through more examples of how to get rid of this debt and calculate a payoff timeline for you.

It's basically like us, but way smarter. So check it out. Ask your specific questions today.

Go to RamsaySolutions.com or click the link in the description if you're on podcast or YouTube.

“Right on. All right. Alex is in Tampa, Florida. Hey, Alex. How can we hope today?”

Hi, Jay. Hi, George. How are you guys doing today? Excellent. What's up? Awesome. Awesome. I want to ask. I'm 23 years old. I've just completed baby set three and I'm currently working on baby sets four and three B. My question is, how should I be allocating my rock IRA? What types of mutual funds would you guys recommend? And how do I balance investing 15% for my retirement while also saving for a down payment on my first health? Love it. In George,

this is your love language right here. Talk in my, especially at this age. I'm just impressed by the way Alex is talking. I'm like, this guy's going to be okay. So in three B, you can invest anywhere from zero to 15%. You sound like a guy who really wants to invest. So, maybe some people go 50%. You're already at 15%. You want to keep it there and then you want to save up a down payment on top of that. Is that what I'm hearing? Correct sir. How long will it take to save up a down

“payment at your current income and margin? I guess the question is, what's from my down payment?”

B, I kind of heard that age says if you have 20%. You can get rid of that mortgage insurance. So that's kind of the minimum. Yeah. I mean, even just based on house prices, putting 20% down could still leave you with too much of a mortgage. And so that's okay. That's like a good starting point. Depending on, I don't know what homes are in the Tampa area. I imagine they're not cheap. What are you thinking that it would cost you to buy a home? Right now, the way we're looking

like for a starter house somewhere between 400 or 500,000. Okay. And what's your income? I'm making around $6,500 a month net and that's going up because I grow my book of business. Fantastic. Are you solo single? I have a girlfriend who I live with, hopefully getting married soon. That's the point. So if you put down 20% if you go out the rate that you're going and you save up 80 grand and put down 20% your payment is still going to be

upwards with everything included, HOA, home insurance, property tax, principles and interests, somewhere around 3,200, which is really half of your income. So you're probably going to have to put down more like 40 or even 45% depending on how long this takes you. Could you save up? Could you set aside three or four grand a month with your current margin and income? I definitely could. I guess the question would be, should I take away some of that 15% per retirement or should I take

live on rice and beans so that I can I can save up that money? I mean, I don't think anything is on fire. I think if you let's say you guys got engaged and then you were married and you rented

Once you're at that phase, but for right now, if you can throw three grand a month, that's 36 grand a year, 72 grand after two years, over 100 grand after three years, so that puts you a lot, like 26 with six figures for a down payment? Correct. And my problem is that I'm out of money as I am. Oh boom. So once you're married and income buying incomes, now that 3,200 becomes a reasonable mortgage, as long as you guys are both going to keep those jobs. Yeah, and just keep it

in a high yield savings account, but I also heard you mentioned earlier, you were wondering how to allocate the money and your Roth IRA funds did I hear that? Yeah, that's correct. I currently have $3,000 in there. It's just sitting in the money market fund. I guess I'm just figuring out

“how I want to allocate it. I know the best thing to do is to do something that I'm really just,”

you know, want to make the right decision. And then as that 15% comes in, how am I going to keep dollar cost averaging across that portfolio? You love it. Well, one way to do it is just automate the investment. So automate whatever the amount is beyond your 401k. If you have a Roth or a match,

I would do that first with your employer. But if you have the leftover money in that 15% go to the

Roth IRA, automate it. We recommend four types of mutual funds split across basically large cap, made cap, small cap, and international. And that'll help diversify some people go all in on the small cap. They want the aggressive growth. Well, that's a roller coaster. It is. Some people go all in on the large cap. And so if you look at like an S&P 500 index fund, it's mostly large cap companies with some mid cap. So that's a great start. If you do nothing else, you know,

broad base index fund will do the trick. But splitting across those four mutual fund types will definitely add to the diversity. Because we saw this when the market US market went down the international market went up. And so it helped just balance the portfolio over the long term. So if you're doing it that way, I mean, you can't go wrong with an index fund. But if you split it across those four mutual funds, you might find yourself at sometimes beating the market

or at least being a little more balanced over the long haul. What you don't want to do is single

“stocks, target date funds, or bonds. Those are the ones to avoid. Yes, I love that. I think we covered”

it. That was great. You know what? I'm going to send him a free ticket to investing essentials. There you go, George. Boom. Okay. Alex, hang on the line. We're going to get you virtual

ticket to that event in September first and second. Dave Ramsey and I are going to walk through

his wealth building playbook, talking about investing in real estate as well, wealth planning for the long haul. I think that's going to give you a lot of confidence as you move forward. I love it. I love it. I love it. All right. All right. All this talk about money, George. Let's go to a question that we have from our Ramsey baby steps community over there on Facebook. If you haven't checked it out and you want some extra support, we have a really great active group of folks. I go in there for fun.

That's my entertainment on the weekend. You're just reading up on the posts in there. The drama, the joy, the celebration, the wins. It's better than Netflix. 100%. Wow. So we have Jackson, who is from the Ramsey Baby Steps community. And he says, okay, George, if banks are FDIC ensured of $250,000, where do you put the rest of your money? Should you split it into multiple bank accounts with no more than 250,000 in each? Very good question. This is a fun question.

Yeah, it's a good note that if you have your money with an FDIC ensured bank or if it's credit union, that's the NCUA. That's that equivalent of that. You're insured up to $250,000. If the bank goes under, the government says, we can help you. So the good news is, if you're married, you've got a joint account that doubles. So now you're at $500,000, which is a good problem to have. You're sitting there with $500,000 in cash and savings. So yes, you can open a different

high old savings account with a different bank. Fair ones, you know, as a great one, if you

“want to add one to the mix, to get more. But the key is you want to make sure that it's per,”

let me see, or it's per 250,000 per account. So that's a good, you have multiple accounts. Either the same bank umbrella. Yes. So categories would be single accounts versus joint accounts, business accounts. So you want to have that different account type. And splitting across different banks, if you get to that point, is a great option. If you're not here, the real question is why you got so much money tied up in a bank? I wouldn't hang on to it for too long. Invest that money.

Our summer black Friday sale starts now. For five days only, a new deal drops each day. Listen, you were too hard to be broke. Car payments, surprise bills, another overdraft notice. It's stressful. But you don't have to stay stuck. Get the books, assessments, and more that have

helped millions take control of their money, get out of debt, and finally breathe again.

Our Ramsey show scripture in quote of the day, Hebrew 611. And we desire that each one of you show the same diligence to the full assurance of hope until the very end.

“Billy Thomas said the road to success is always under construction. Sounds like 65.”

All right, I know it. That's that's an interstate for an interstate. What does that mean?

Yes, age of 65. No, 65. Highway 65. I feel like it's always something going on. And they need to widen it

by where I live. All right, Chris is in Eugene, Oregon. Chris, how can we help? Yes, I was wondering about the statute. And if I should go have $1,200 in a credit card, did I go ahead and pay that off with baby stipend? And how much do you currently have in cash? I have about $1,000 in extra all saved up. Over the $1,000, you have $1,000 total. Yes. Okay, so we'll call that maybe step one. Let's call that baby step one. And you need to keep

“that money. That's the first foundational step that we teach. You need to have that money.”

That is your emergency fund for things that come up that are completely unexpected,

completely necessary and really have a time factor on it that need to be urgent. The credit cards, although they're urgent and they're important, it's not an emergency. I'd rather use your month to month cash to pay those off. How much money do you bring in every month? I am on disability and I get about $1,000 in a month. Okay. And how much, what is it? When you look at your budget, if you have an every dollar budget, how much margin do you have after you've

paid for all of the things that fall into your cost of living? I haven't done that yet. I'm doing this without on your website looking at the books, but I've already established a emergency fund. Fantastic. Well, we'll spare you the research. We're going to hook you up with our every dollar budgeting app, the premium version. You can connect your bank to it. It's got all the paycheck planning features. And once you do that and see that margin, that'll give you the real math of how long it's going to

take to pay off your $1,200 in credit card debt. Do you just have one credit card or are there multiple debts? No, I have one other credit card that's at almost $9,000 in the credit card payment. Okay. What's left on the car? About four years? What's the balance? Okay, I'm not sure my wife is taking care of that bad. Okay. What do I need to do on the car? Does your wife bring in income? Chris? Yes. How much is that? I'm not sure.

Okay. Do you guys have separate finances? Yes, we do. Is that for a intended reason? The reason I ask is because this plan is a whole lot easier and a whole lot more fun when you have combined shared income shared goals. You're going to knock this dead out so much faster if you bring in her income into the mix. So she just paid off one of our big personal loans that she did

“want to start doing. She has me about an app to use and that's what's looking at the”

every now and then. Okay. Okay. Yeah, I want to reiterate what George said. We can help you today. But when we try to solve problems around here, we try to solve them at the root. Whenever we do serve as level stuff, they kind of pop up in new ways over and over again. So solving this problem of debt at the root would cause you to also have to look at how you handle money in your marriage at the root. And so that's why George went to that. In the meantime,

I would love just for your own awareness at the very least. I would love to it for you to at least find out what is your wife earned? Like what's her month to month income? What's her financial life

look like? And I think that that would probably be the first step in that discovery in your marriage

is you should at the very least you should both know what each other earns. So I would start there and if she has debts, do you know her whole financial picture on that side? Not everything, but I do have some idea. He's known exactly to go to a cash checking place

had how long have you guys been married? 10 years. Okay. Well, I say that because on a call today, a guy called in and said, "Hey, we found out my wife has 40 grand and credit card debt that I didn't know about." And so that's where things like this can pop up. So as you're trying to clean up a mess, you realize, "Oh, we got a whole other mess over here." So if you guys can combine your lives, look at all the debts, do the debt snowball together, combining incomes, combining

everything. This whole process is going to be so much easier and it's going to strengthen your marriage. Yeah. And I want to say this. I don't want it to sound like a lecture by any means. I just want the best for you and part of marriage. And I think you know this crisp part of the reason that we say yes to another individual is because we want to build something together. That's one of the joys of marriages. You kind of get to lock arms and plan a vision for your

future. And that's really exciting. And then as you take steps towards what that vision is, it becomes more and more exciting. And to Georgia's point, you gain more in intimacy and in trust. And all of these wonderful kind of things, these deposits get made into your marriage as you go down that line. And I would really love for you to experience that side of marriage with your spouse. So that's kind of why we're really, really pushing on that. On your question today, which is,

here's my list of debts, what can I do? I think the best place for you to start today is with the

“baby steps. And the truth is your wife may never want to combine money. And I would hate for that”

to stop you from doing the baby steps. Because the truth is you could do it today. It's just going

to take longer. And you've got baby step one locked in, but baby step two, we want you to do that obviously paying off all of your consumer debt, everything, but the mortgage. And you're going to list them smallest to largest. We call that the debt snowball. And that's what you're going to do. Smallest to largest by balance. And you're going to take any extra money that you have after your minimum expenses are paid after all of your minimums are paid. And you're going to put

that margin on a smallest debt until you can pay it off. Now, you mentioned being on disability, does that preclude you from really doing any work of any sort? Or do you think that there's things that you could do to pick up some extra income? I could probably help out some funds or some like that, but it doesn't have to do with a W2. I could lose my disability. It's a military

“related. Okay. And you feel really confident. Because here's the thing that you have to balance”

with this. And I bring this up to everybody who's on disability. If you feel completely confident that there's no way in this world that you could earn more than $4,000 a month in your current state of health, then I will support you. But if you think I would hate for you to not go and be your fullest self because you're afraid to lose. Because if you go and be your fullest self and you lose it, it's because you're out earning it. And that's actually a positive thing. It's a good

problem to have. Now, we're bringing it in six grand a month instead of four. So that's why we ask. But I do think, for an example, if you bring in four grand and your expenses are say $2,800, covers everything. That means you should have $1,200 in margin and boom, you just knocked out

that first credit card. Now you free up that payment. Now we can apply all of the margin plus

that new payment that you freed up to the next smallest debt. So that's how the debt snowball

“works. It builds on itself. You get them momentum. And that is the key. That's how millions”

have actually gotten out of debt. And it's as simple as that. And it's as hard as that. Because you got to create the margin. That's no easy task. And that's where all the side hustles and the things that we've been talking about for the last couple of hours fall into play. But then as most of you know, and I'll go ahead and go through it because we haven't done it this show. After you've paid off all of your debt and baby step two, now we're going on to baby step three. We're building

up three to six months of expenses. Still add intensity, right? We're still going fast through here from there. Once that's completed, we do the next three steps together simultaneously. Four or five and six happen together. Number four is you're investing 15% of your gross income every single month and to good growth stock mutual funds, George talked about it in the previous call. At the same time, if you have children, you're going to put extra money at your discretion towards five 29s

to help pay for their kids, you know, college fund. And then any extra money above that, yeah, we want to start putting extra payments, extra monetary amount on the mortgage. And once that's done, we're in baby step seven. The house has paid off. Kids college is funded. Now we're just living and giving guys. We can invest more than 15%. We can really build wealth. We can really enjoy life take that vacation. Have a good time. All right, guys. All right, George, that puts us out

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.