The Payment Mentality Is Keeping You Broke

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

So we're here to help you transform your life from the Ramsey Network and the Fairwins Credit Union Studio. This is the Ramsey Show. And I am Rachel Cruz hosting at this hour with my good friends and co-hosts this month.

We're going to happy our George Camel. And we are taking your calls live at Triple 8-825-25. So give us a call. All right, kicking us off this hour in Austin, Texas. We have Tracy on the line.

Hi, Tracy. Hi, how are you? >> Hi, we're doing great. Thanks for calling in. >> Yeah, absolutely.

>> How can we help today? >> So long story short, we've had the financial losses. It's that we're out of our control. You know, our income has got down, our cost have gone up. We've blown through all of our savings trying to stay afloat,

went to credit cards to, you know, for all of our business expenses, our household expenses, all of those things. And we're still behind borrowing from family, all of the things. Right now, we are running at about a $5,000 deficit a month, even, you know, all things considered.

I'm just trying to figure out, you know, do we-- what point do you give up on file?

“Bankruptcy, you know, do we keep trying to dig out of this?”

Like, what is the smartest path forward with everything that's happened? So, what do you guys make? What are you bringing in a month? >> It's variable, so it's about 12 to 17, but 250 a year on average. Okay, and you are-- so you guys make $250,000 a month or I'm sorry I'm sorry a year.

And you're still behind $5,000 a month. What do you guys spend in your money on? >> Well, a lot of it is going toward credit cards to about $40,300 a month is credit cards and fees. Unfortunately, a bunch of our cards are, you know, 12 to 30% interest. So, I've reached out to them for their hardship programs and tried to get the interest down,

so that we're able to tackle more of the debt. >> What part of this wasn't in your control? You were saying something about how it's not, it wasn't in your control. >> Yeah, yeah, yeah, one of our companies that we run, someone had been bezeled money from us, and it took away about 70 or 80% of our income.

>> How much money are we talking?

>> They have bezeled about 1.6 million, my gosh, total, yeah.

>> In jail? >> No, no, it happened in the big city and they have bigger fish to fry. So, what do you mean? You didn't press charges? >> It's all, I don't know how much I can say.

They're working on it. >> So, do you have an attorney? >> Yes, yes, we've got an attorney that's working on it for us. >> You act and let you're like, well, it's water under the bridge. We're moving on.

>> Oh, no, no, no, no, no, we can do. >> No, we had investors, and it was our investors money that was in, it was a whole situation. >> Okay, yeah. >> So, what are you wanting to do?

>> Money to begin with, you didn't go into debt, 1.6 million.

>> No, no, no, but we managed that fund, and when the fund disappeared, are income disappeared. So, we've taken on additional jobs, we've cut business expenses, that we didn't need, sold assets that weren't performing, so we're selling everything. You know, like, yeah, it was saying, like, sell so much the kids think they're next. >> Yeah, yeah.

“>> Okay, so what are your debt do you guys have, Tracy?”

I'm just trying to figure out where $15,000 a month is going. >> How much is your mortgage? >> The mortgage is $5,500. We did take out some of our equity to try to pay down our asset, or our debt, so the home is worth about $700, and we owe about $5,50 on the mortgage, so.

>> Okay. >> So was that a heel-up you took out, or a home equity loan? >> Home finance, yeah, we did finance. And then we've got about $3 to $5,000 a month that's going out and expenses for the businesses that we run out of our home, so we've got, you know, the $4,300 in debt service, you know,

$13 to $14,000 a monthly expenses, kids in college, you know, all of those things, you know, tuition rent, and then our business expenses will come out to about $20,000 a month. >> Okay, so your business expenses, Tracy, not within side of the business, why is that coming out of your personal budget?

>> Well, it's kind of all in one lump now, like, because we're just trying to keep everything

current, so I'm not even taking it. Do you have a business checking account, and you have a personal checking account, and

“you're paying business expenses from the business checking?”

>> Yeah, everything coming, I'm not taking a paycheck from the $3,000,000 on business expenses. It's coming out of a business account that has nothing to do with the $12,000 you're bringing home every month. Correct?

>> Sure. >> Okay. I mean, I would separate it. Okay, so then you got kids in college. >> Yes.

>> Are they working?

>> No, having a good number, I'll try to-- >> That's correct.

>> And your phone, Tracy, right now, on time, and-- >> Oh, yeah, yes, sorry. We've got scholarships and grants, so there's not a lot that's coming out, it's about $1,700 a month left over in two missions and fees, but they are applying for scholarships like it. It's their full-time job.

>> Okay. >> And what's the total amount of debt you guys carry outside of your mortgage? >> So the total debt, we have some unpaid taxes. So, it's hovering at about $270,000. >> Goodness, great.

>> Wait, that includes the business? >> Yeah, those are bit-- >> Okay, let's separate that out. What is just-- >> So the credit card-- >> Yes, credit card is $152, we owe family 30. And then we owe 88 in back taxes. We had an employee that said she was filing them and she did not.

So we've had some-- some things piled up, so we're just trying to doggy paddle through and figure it out. >> And the key is going to be just debt snowballing, this listing it all out small, so large as balance and attacking the smallest one with the vengeance and just keeping up with minimum payments on the rest.

>> But the income needs to go up and expenses need to continue to go down even just to work the time. >> Yeah, I mean, Tracy, the way to do it and it's going to be harsh, but you guys have to make a list of everything and when the money runs out, the money runs out and we stop. We do not continue to borrow from credit cards, we don't continue to borrow from family.

Whatever that $5,000 is below the line, food, shelter, utilities, transportation, you get your four walls, you pay your insurance. Everything else below is a want, like kids in college, sorry kids, mom and dad are broke. >> That's a wrong shirt. >> That's a wrong shirt.

>> But the break of bankruptcy, we can't keep paying your rent. Like we're done-- we mathematically, we can't keep up our lifestyle. And I think you and your husband, you guys have to come to a really hard reality that we

“can't keep doing this, and I know that's why you're calling us, but that has to see”

so far down that the sacrifice is so deep. Do you guys have anything out on the cars at all or those paid off? >> Sorry, broke up again, Tracy. >> Oh, sorry. Cars are paid for, we drive old car.

They've even tried to sell that, and see if we could put your money. >> Here's another issue is this mortgage is huge compared to what you take on pay is now, which is 12 grand. It's almost half your take on pay, just in this new mortgage. So, you might need to look into selling the house and downsizing if you can't solve this

within six months. >> Yeah, because you asked about, you know, when do you just file bankruptcy? Well, you sell everything, including the house to avoid a bankruptcy, you know, even cash. I don't want you to, right now, because we don't have enough time to dig into the numbers. It's like a 401k, you do all of that to avoid a bankruptcy, but the IRS goes to the top.

That's the first thing in your desk, no ball right now is those back taxes.

And Tracy, I heard a lot of, well, this person, as well as there, at some point we got to look in the mirror and go, I'm responsible, I'm the one in charge here. >> Getting married changes something in you, it's sure it didn't mean. When you say I do, all of the sudden life isn't just about you anymore. It's about we.

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Next, we have Sally in Los Angeles. Hi, Sally. Welcome to the show. Hi, thanks for having me. Yes, absolutely.

How can we help? Big picture. I recently sold my house and I was able to get about 300,000 tax free because I didn't have to qualify to do any capital gains on it because I lived it in past couple years or what not.

Now I'm sitting on this little nest egg of mine and I keep, I've invested like the first

50,000 into stock and there are, I don't see some fluctuations on a day to day basis based on what the President of the United States sometimes also tweets thing to choose. What do you mean? Sally, what do you mean? What do you mean?

What are you talking about? What are you talking about? I just like, I don't want to move, but I feel like I've almost plain like hopped, got to share or I'm like nothing now that I can go down and I'm like, I know it's just sitting there and I'm like, I'm sure they have it, but I also don't want to be irresponsible.

Are you needing this money anytime soon or were you looking at this just to put away for years down the road? I'm looking to put it away.

“I think that is the best solution for me, my husband and I were doing fine, primate”

he's covering all the current expenses, we have toddler, we're doing it and I don't we don't have any debt or anything on those lines, I don't feel like I can purchase anything with what I have in our current areas, a high cost of living area, so that's not really an option either. It can be put away for a moment, but I'd also like to maximize my earning possibilities

for it as well, for sure, so do you guys own a home? Well, he owns a home that we don't currently live in, he's running it out. I also was running out my old house before I sold it, honestly I sold it because I was like, I hate being a landlord, this is not the business for me, it's not much anxiety, yeah. So we have homes, we have the deductions from being a home owner as we also deductions

from being parents, and so in this specific area it's quite expensive, so it's like, I don't know if my little nugget would really make much of a dent. Well, I think eventually you guys need to talk about home ownership, so whether that's

“you guys moving back into maybe the home that he owns, are you guys married?”

Yes, yeah, yeah, yeah, I mean, a home ownership needs to be a long-term goal for you guys, and I know that you're in an expensive area, but for your financial future on going, home ownership will be the cheapest route because rent will just continue to go up, right? So letting that be a goal, which this money could be used for, and I understand you're saying not right now, which is totally fine.

So we always say investing, you want to give it around a four-year kind of benchmark, so

to give it four years to do the up and down, and in that time they'll be an election. Like right all of that, right? So you think about the timeframe that kind of feels good to write out the highs and lows if you're going to use this money down the road. So if you're going to use it less than four to five years, I would not invest it, but if

you think you're going to keep it in somewhere for four to five years, then yes, investing still for me would be the answer because we're not looking at what you're saying a 30-day span, right? If you looked at the last 30 days, yeah, it looks insane, but that's not always the case. In fact, last year, the market was what, 20, over 20%, 20% last year, which is just--

Exactly, exactly. I don't want to even do like a high-interest league savings account, and like, I just feel like that's like money left on the table. That's right, that's right. Yes, that's right.

“So that's why the investing has a long term, you have to have a long term mindset.”

And so right now, actually, what George you talk about this in your book, Breaking Free from Broke, when you buy low, which is what it is, right now with the volatility, you're actually going to get to buy more shares, if you will. So as everything goes up, you kind of have more eggs in your basket, if you will, when the market does go up, because over the course of the trajectory of what the stock market

has done since it's--inception, it does go up. The American army overall goes up. So that just means you actually are going to be making more down the road if you buy now low, but that's kind of an investor's mindset.

Yeah, I always like to say, time in the market beats timing the market.

And right now, Sally, it's stressful, because you're trying to time the market.

And so it's just easier to not look at it and just know, I'm going to block this money

away and just let it ride and keep adding to it. And then four or five years from now, you're going to look up. And there could be five, six hundred grand in there. And now that's a series down payment, even with the prices in LA, five years from now. And so I would make it a goal and say, you know what, instead of going, well, we can't buy

house, just go, we're going to buy a house and we're going to save up $500,000 to the down payment to do that. Yeah. I like it. So what does invest it in?

Because you said, I'm invested in stocks and that scared me, gaming single stocks or like an index fund. No, index. And honestly, I don't feel like the most food was having this conversation on that topic. I'd break now, I would just have like, I took 50,000 of that 300 and it's in like VOL.

Sure. And then the Russian just like sitting together. Yeah. You can invest the rest in there and let it ride and keep adding to it every single month, make it a goal.

Hey, we're going to add $3,000 a month to this, that's 36 grand a year growing for us with compound growth. And you can do some projections and see that five, six, seven years from now, it's probably going to be closer to 700 grand if you do it this way. And then when you have enough to where you can go, all right, we can take out a mortgage.

It's going to be 25% or less of our take home pay, 15 year fixed. Let's go ahead and pull the trigger and get this house. And I get it Sally, I mean, and when I think about investing personally, I really, I look maybe once a year at what's going on, because I would give myself a panic attack every time I look to the market to your point, specifically right now.

And you're going to look when it's down, nobody looks when it's up and doing great. That's right. And that doesn't hit the news either, right?

It was not like flashing all over everywhere of how amazing the Russian has worked.

Yeah.

“I mean, the last year has been insane and then this year not so great, but that's what we're”

seeing in the news. So, and I get it once and I actually had some money in a high-yield savings that we actually talked to you about this. And we pulled some of it and invested it literally, Sally. I think like 32 days.

It was like right before everything hit the fan and once and I was like, oh, that's it. See it go down like, wait, and I was like, this is why I don't, this is why I do not look. Because most of the stuff, you know, I'm like just venting machine, I did money. It is.

Yes, that's how it felt. But then I know, I go back to my brain of what I just talked you through of what I know. And I'm like, we're not needing this money for, you know, a couple of years, so I just let it ride and let it do its thing. So that is what you know, what you would have to do.

And it would be the smartest thing. I would still do what we did again because I know what's happening, you know. And if you can, Sally, I would auto-invest it. And that way it's out of sight at a mind. I don't want to see the money.

I want to just leave and go straight to that investment account. I don't want to touch it. And the reason you can be like, so, you know, blinded by it, if you will, is because what you're investing in is has, it has a good track record, right? What we talk about with index funds or even mutual funds is you are buying, you know,

$290 to $200 stock in a mutual fund. And even with some of the index funds, you know, it's the S&P 500 in general. So $500 company. Yes.

“And so that's why you can kind of not have to look at it and feel like you have to manage it”

because it's just doing what the economy is going to do, right? It just kind of rides that wave versus stressing about Apple or Tesla or whatever, right? If you're trying to manage single stocks and all of it. So that's kind of the beauty of that diversification method. That index funds or mutual funds give you is because there's a lot of kind of safety in it

because if it all, if it all hits right down and it all kind of falls out, then the American economy is done. Yeah. We got to thank your fish to the company in America. America goes bankrupt.

We're like, all right. This is the end. That's one hoarder ratio. Wonderful for me, Sally, is when you're looking at the line graph of like returns on

whatever investment you have, I never look at it less than a three year.

Because if you look at it a one week, a one month, you're freaking out even one year. But when you look three years, five years, 10 years, the further back you go, the more up into the right it goes. And so that's just a good perspective to have that you are investing for the long term. It doesn't matter if you on paper lost $20,000 because you didn't sell, you hung onto

it. Yeah. So keep keep it up the ride. I think I needed to just have talk to get out of my way because I've never, I don't come from money.

I've never, I've never, I'm thrilled that I'm here today now, having this opportunity and I'm like, oh, don't mess it up. Yes. You're doing great. You're doing better than you think.

You know, in that caution, that's a good spirit to have.

“I mean, honestly, it's a really research research and understand and you have to feel good”

about it. But George and I, that's what we do personally. So we would not tell you something that we wouldn't do. You know, one of the things we do is we don't have to do anything. We don't have to do anything.

We don't have to do anything. We don't have to do anything. We don't have to do anything. We don't have to do anything. We don't have to do anything.

We don't have to do anything. We don't have to do anything. We don't have to do anything.

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Visit zander.com for instant online quotes or for a more personal touch give them a call at 800-356-42-82. Tax season is upon us so to get a free checklist and guide that will help you file go to ramsysolutions.com/taxes. Let's head to Greenville and we have John on the line.

Hi John. Welcome to the show. Hey. How you guys going today? Hi.

We're doing great. Talk to me. Today. Yeah. So name my wife or newlyweds got married last year and having a little bit of a disagreement

on whether we should take a vacation this year. She's going to take a vacation and I'm thinking that we should probably just time to get a little bit more financially head to investor retirement and save up for our house and just wanted to call to get a fresh perspective. Okay.

So John you're the money responsible guy and your wife is fun. Rachel really. I think she does that. I think she does that. Like John.

I think she does that. She's ready to spend and have fun and you're like we need to think about retirement which is good and responsible. We say I'm not trying to paint my wife in a bad way. Oh no.

I'm joking. I'm joking. No. I'm going to be probably more on your wife's team in the call. That's right.

Do you guys have debt? We do not have debt.

“Do you have savings right now if like your emergency fund?”

Yes. We do. We have about 23 grand in a savings account and then about 45,000 in a brokerage. Wow. Okay. And are you investing 15% of the household income right now into retirement

accounts? Yes, we have about 54,000 in retirement. And how old are you guys? Just turn 24. Go on the freaking vacation man.

John. What do you mean you got to catch up? You're ahead of like 99.9% of America. How much do you guys make a year? One 15.

How much is this vacation going to cost? I don't know, probably about three grand. Okay.

If I told you, hey, John, when you were tired, you could either have 9.85 million or 9.9 million.

Would you say, yeah, I'm willing to take the 9.85, that's fine. Uh, yeah, I would probably do okay with that. Yeah. That's what we're talking about here. You guys are going to be multi-multime multi-millionaires if you keep living this way.

But you're going to have a miserable marriage if you keep living the way you want it to live. Which is well, that money is an opportunity cost, and you're talking to the nerd of all nerds. I'm going to say you're telling you about the trip to Spend.

Yeah. If you guys, if you guys seriously had some, hey, we got a lot of debt that we're walking into this marriage with. We got to clean this up. I don't understand.

You went on the honeymoon. Let's take a pause on vacations till we got our mess cleaned up. But there's no mess here. You guys are doing everything by the book. You've got plenty of money.

“You're not going to stop investing to save up for the trip, right?”

No. No. I think I just get nervous because I've been really trying to save up for a down payment for a house, and everything is just so extensive, so it just makes me nervous. Or I'm just, I get my own head of what could happen or anything like that.

We'll do the math. The three-granden vacation is going to cost you maybe a half a month in your house-down

Right? The next paycheck, you could fund this vacation. Okay. Right? That makes me feel a little bit better.

Yeah, it's not going to delay your home ownership goals, so don't let the fear of

while I'll never be a homeowner.

I mean, I'm not going to go on a trip for the next six years because we got to get a house. We got to get a house. You're so young. You're doing so great.

You guys will own a home before your 30, and you're going to do it the right way, and it's going to be super peaceful and be a blessing in your life. But if you don't also learn how to let go and live, you are going to be miserable in that house. I was afraid you were going to say that.

Tell your wife you didn't do that.

“Not that it's a competition, but, you know what, I think it's three on one, John.”

And as punishment, she gets $500 in fund on my house. He kind of let me down. You got to upgrade the hotel room now. Upgrade the hotel room. And she gets more fun money than you feel comfortable with.

That's that's it. Yeah, that's the consequences, you know. Okay. Okay, that's what I'll have to do. No, it's a good.

We're hanging. We're playing around.

I appreciate the caution and wanting it, but let me encourage you that our friend Arthur

Brooks talks about five things you can do with money. And he said four of them actually can bring you happiness. And one does not. The one that does not bring you happiness is just buying stuff. But one of the, one of the things that can buy you happiness out of the four is buying

experiences with people you love. He said that's one of the best. So when you spend your money, yes, and you go and have an experience with people you love, that actually incurs a level of happiness in your life. So we are, yep, that's a, that's a Georgianized marriage advice to you.

Enjoy. And have the goals. But you guys have them. You are on track. You are good.

Nothing's going off the rails. And yeah. And I'll be honest. I'm kind of living vacuously through them because I wish I went on more trips than when we were newlyweds.

Oh, yeah. Now that you're a dad. Because we got married. Yeah. We went like one great trip in 2019 and then COVID happened and then travel and then we

had a baby. And now you're like, well, we got at least two good trips in. It's so true. So you're, you're going to look back and go, man. We got kids now.

It's much harder to travel.

“So when you're newlyweds, I'm like, ain't you doing this great?”

And it's three grand. I'm going to go. You're going to do it. You're dead free. Emergency fund.

Retirement's kicking. Let's go, buddy. Yes, so great. Well done, John. You guys have done a fabulous job.

We can beat up on you because you're doing so good. I don't know. I was like, your wife seems like the funder's like, I don't want to pay her in a bad light. I'm like, not your trust.

She's in the best light. We like those people. We like her. All right. Let's go to Brandon in Columbus, high brands and welcome to the show.

Peter, how are you guys? How are we doing? Good. How can we help? So I'm self-employed to make about $50,000 a year.

I have about $66,000 in a high-ude savings and then aside from the mortgage, I have about $50,000 in debt between a truck, a garage, and then alone to finish the garage. I'm trying to determine if it's best to kind of delete that, safety net, and pay off some debt.

Or if there's something else I should be doing with it. You say you make $50,000 a year? Yep. And your truck is $48,000. You have a loan on it for $48,000?

It's 28. Oh, I'm sorry. That's OK. And I have a garage that I run the business out of. It's $17,000 and then alone to finish the garage, like the drywall and all that good stuff.

It was $6,700. It's what's left for me. I gotcha. I gotcha. Um, OK, so yeah, to answer your question quickly, yes, I would.

I would take it down to $1,000, which is going to make you sick. You're really, oh my God. Just know that it's a false safety net, because if you lost your job today, guess who doesn't care, every lender you owe is still going to demand that payment. And so you're going to feel a whole lot better and more peaceful taking your account from

$66 down to whatever 10 or 15 grand that you'll rebuild real quickly without those payments in your life. OK. That's the simple answer. And I didn't know.

Are you going to do it though? That's the biggest question on America's mind right now. Well, so I think I've asked for advice on people I know and nobody could, hey, do whatever you want to do.

I've got to reach out to somebody else in, you know, third party and see what they say.

Yeah, because the great thing is you'll have around 14,000 still left over in that high yield account. You won't take it all the way down to zero or to what's else. So you'd still be able to cover any emergency that came your way in the few months until you build it back up.

And then you'll be truly free. Are you married, Brandon? Uh, girlfriend. We're going to have a child together. OK.

Um, all right. Yep.

“So that's, yeah, that's what I would do though, because I would go ahead and pay off all the consumer”

debt and then practice, you know, paying for things that you can afford, right, that we're not going to continue to go into debt. Because if you count this 14,000 as an emergency fund, you may want to bulk it up a little

Then the beautiful thing is you get to move on to investing into retirement, right?

“And start really looking towards the future with this money instead of having to pay for”

things in the past, which is what debt basically is. Um, right.

So this is your never going to debt again insurance plan once you become debt free with

the emergency fund. So next time you have a project, it's not, well, I got to take out a loan for that. I got to take out a loan for the truck. You just learned to go, I'm going to save him and pay cash. I'm a guy who doesn't owe money, owe money to other people.

And well done on saving 66,000, though, for real, because I mean, by tomorrow, you could be completely debt free, which is incredible for a lot of people, you know, they are having to work extra, you know, cut the expenses and it's a, and it's a year long process to get out of that debt. I might use some of that remaining savings for a wedding ring.

Never too late. You know, I have a kid together. If she's the one, do it. See all the deal, Brandon. When you're drowning in credit card debt and collector start threatening lawsuits,

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Welcome to the show. Hey, Rachel, I'm George good afternoon and thanks for calling. Absolutely. How can we help today? So yeah, we are in the wonderful world of navigating home auto and umbrella insurance policy

renewals, and our insurance agent recommended a product that is somewhat new to us and was hoping to see if you have a position on, is it something wise to purchase specifically

“into the standalone wind and hail insurance policy for the home?”

And that being a separate policy beyond just the homeowners with your roof and all of it. So what is that cover that's different than a pale, pale damage to roof? Yeah, yeah, pale damage to roof, you would have insurance to help replace the roof. Even if you didn't have wind and hail. The way that it's described is that it would be specific to wind and hail, and it would

essentially bridge the deductible on the homeowner's policy. So something again, relatively new, and we weren't able to find a whole lot of additional information. And we'll see if you had familiarity with that type of a product and otherwise purchase. How much is it?

Extra. It's well, I mean, it's less than 230 bucks per per year for the year, but it's essentially just covering the deductible. Is that what you're saying? It's covering that gap.

It does. Exactly. Okay, because your homeowner's policy does cover it, but you're saying this other policy

is basically a deductible insurance policy.

“I like the way you said that you're right, and it's a insurance on insurance, right?”

So it bridges the gap of an increasing deductible on that type of peril, no winter hail damage. Oh, interesting. So how much is it actually cover? That's the dollar amount.

Up to 12,000, which would be the deductible on the homeowner's policy for such a peril. And it costs how much a month or a year? Well, through the year, it's two, 30, so call it, you know, like maybe 20 bucks a month.

I mean, you know, for the year, in 10 years, you've paid 2300 bucks for this thing, and

so if something happened in those 10 years, and you needed to use more than two grand, you're like, all right, that was a good buy. So do you guys have them? Is this like easy money for you guys to cover this thing at this point in your financial life?

Well, most definitely, it's not a burden at all. And in the same stretch, if you had to cover a $10,000 deductible, you'd be able to do that with no problem. We could. That's where I go.

I might hang on to my money, and if that happens, I pay it out of the emergency fund and move on with my life. Yeah. Yeah, because there's going to be things like this almost feels like an extended one. Do you feel to a degree of just, it's a little bit gimmicky, and that they were like,

“what else can we come up with, just to make a little more money?”

Yes, to kind of just tack on, to keep going. Do you know what you mean? And it's like, it's an easy sell, especially in the fear, you know, idea of, oh, my gosh, in the middle of a hill or wind storm. If this was an imminent threat, and you didn't have an emergency fund, I might go,

hey, this might be a good way to float the gap for 200 bucks. It's like buying you some peace until you have that money. So at this point, you can run some calculations. It doesn't seem like a no-brainer by to me, though. I would have some pausing, oh, I don't know if it's worth it.

And at the same breath, you could burn 230 bucks on the kitchen table. Yeah. And it wouldn't matter. That's right. Yeah, I think it's less about the money for you guys, Sean.

It's probably more of the principles I would say if you did it. Just be aware in the future of other things, because there's all, I mean, companies are constantly looking at how they can make money off of people. It's kind of nickel and diamond people, but to them, they're just making so much. And if people work, actually really do use it.

So just, yeah, beware, I'd probably pass.

“I mean, we don't, I don't think, I think we would probably just--”

Well, I didn't figure out your number. Because some of these policies, they'll say it's 1% deductible on wind and hail. So if your home is 300 grand, you might pay 3 grand out of pocket. Well, then it wasn't worth paying 230 every single year for 10, 20 years.

But if it's more than that in your house is worth a million bucks, well, now it's bigger

numbers. So that's where the things I would start to weigh before you make the decision. But it's a non-fatal decision either way. All right, let's go to Cam in Richland, Virginia. Hi, Cam, welcome to the show.

Hi, thank you. Hi, absolutely. How can we help? Hi, I was wanting to get your assistance and potentially getting some money back from my bank.

My bank was a large bank and they have closed multiple accounts of mine back in early February. I can tell you to give you the background that if you like, because they've had my accounts closed and are holding my money since February the second, I've pursued numerous routes with the numerous bank managers, numerous levels within the bank. I've also followed a claim with the OCC and the CFPB and still have had no success in getting

any of my money back. How much money are we talking? I'm not totally sure I'm thinking it's around $5,000, the reason being I've literally filed multiple accounts for people in my family and we had all just filed our return. So a little bit of tax return money coming back in, maybe $1,000,000 a piece, so it could

be anywhere between $3,000 and $6,000 depending on if the credit could come back. And why do they close the accounts now? I essentially, I was on 12 different accounts because I had opened accounts with all of my children checking from savings when they were 15 and initially started working and hadn't been tidy with my finances and taken myself off when they turned 18, 1920, so I have four

kids, eight accounts there and four accounts with my husband and myself, but I was central to all of them. My youngest child, the post did a check, that he thought was a refund check, the person that issued the refund check, then called the next day and said, "Oh, that was a mistake. Can you wire us the money back?"

And he knew instantly that was fraudulent. He called the big bank and said, "Hey, I deposited this check, they just called me. I think it's a fraud. I just want to let you know. I haven't spent the money."

And they said, "Buff fine, we'll take care of it and the next day they closed his account which I was on and every account that was associated with me." Because of the fraud. Correct. That's done.

So, it wasn't great and they didn't let me know.

I basically my banking app just appeared and I called the bank number and asked and they

said, "Oh, we closed all your accounts and I said without email, phone call, mail." Yes. Yes.

“That's our policy is to close your banking app and then you have to call us and we'll”

tell you that we've closed your account. Okay, what did they say about the money? I mean, it's FTEIC and sure, so it's not going to disappear because they have to give you this money back legally. Yes.

I think it's just delay after delay.

Supposedly, they're going to mail a cashier's check but every time that I speak with them,

“they say they're still in their quote-close process.”

That's how long the worst is. That can't. February the second. So, it's over two months now. Yes.

I might send a certified letter to the banks legal and compliance department. That's more sure to get their attention versus customer service or like a branch manager who they don't have much to do with somebody in the, that is trying to resolve through the C, they've combined the OCC and CSPB and they are telling me they are with the bank but that they don't have any power to force the bank to do anything within a sense of

them so do you think the letter would have more power than that? I mean, I'm just going to be the squeaky wheel. I'm going to hit it at 17 different angles until someone does something. You know what I mean? That's my style.

You can also go to your state. Your state has a banking regulator like a department of financial institutions and so you could kind of double up the pressure there. Okay. But again, do you need a, do you need the checking account, Kim, you had four with your

husband you said so do you guys need that to, to live off of him? Yeah. I'm assuming five grand spread out of all those accounts. You don't know, but thankfully we did, no, thankfully we did have some in reserve at a credit union and so we pulled out of that to cover what was in those accounts and of course

we're still currently getting in gum, but I'm thankful that we had that set up.

“I do listen to you guys, so that's what tried to follow up.”

It's a diversification in your banking. What's that? That's the diversification with your banking. Is it bank of America? Who is it?

It is bank of America. I mean, it didn't, didn't, didn't, didn't corporate, just put it past her. It is. It's horrible. It's horrible.

It's why I don't do business with these huge banks. I love a credit union for that because they treat you like a person and we have a great relationship with Fairwin's credit union, Kim, if you want to diversify now and have a secondary backup. Everyone's awesome.

Good people. They're like that really do care, honestly. Someone will actually pick up and help you, especially to tell him Rachel and George sent me. Yes, Kim, I'm so sorry that, yeah, I think the squeaky wheel approaches it.

Because honestly, in a bank like that, you're just a number. It's just you're just going to be floating around up there. They're not worried about five grand, you know, so the more consistent you are, you're 60 days out. But I mean, I would, I mean, daily probably, just be colon, send letters, doing what I can

to get that in the never bank with them again.

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See website for full details. Welcome back to the Ramsey Show in the Fairwins Credit Union Studio. I am Rachel Cruz hosting this hour with George Campbell, and the lines are open at AAA-825-5225.

First we have Matthew in Charlotte, North Carolina.

We were just there last week. Hey, Matthew, welcome to the show. How are you? How are you? Hi, we're doing great.

How can we help? Just try and figure out how to stop live and check the check on our life works. I work. We have a house, cars, kids, and we just can't seem to get ahead. We're just treading water constantly.

How much debt do you guys have? If we're not including the house, it's just the cars and probably around close to 90. How much debt on the cars? What's the balances of this? My wife just got a new car because her previous car had a bunch of electrical problems.

car, and so that one's fresh, that one's that like 62 grand.

Oh, my God. What kind of vehicles is this? It's a Nissan Pathfinder. Oh, nothing fancy.

“How much under water does that mean I'm drowning right now?”

No, is it worth 40 grand? Yeah, the car, yeah. Brand new. Is it brand new? Yep.

Yeah. Okay, so you said nothing. Let's see, Matthew, you guys just bought a brand new SUV Pathfinder. So it's pretty nice, pretty nice, okay, so we're just going to let's just keep the reality where it is.

So you guys got a brand new. And electrical problems do not necessitate going on buying a brand new car.

That was the right decision.

We don't have them. We didn't have the money to get it, the electrical problems fixed, and it was out. Okay, I'm saying they're going to buy a $5,000 car. Right. So, okay, yeah, yeah.

So I'm not trying to beat you up. I'm just trying to get to the route here, which is we need to own up to the things that we did and not go well, we had to, because that's usually the sign you're going to stay in the cycle. Yeah, and majority of this debt of the 90 is that one car.

So what is the other car? What payments do you have on it? Um, I also had to get a recently, I got a used car because my car was, I had $1,500 left on it. So, and it required like $8,000 and work.

“So what's the balance of this car, what do you have?”

What do you guys make a year? My wife makes about $45, and I brought home $96. Okay, good. So you guys are clearing 140 grand a year? Yeah.

And not including my raise, my last raise, that I'll be getting, which is a $14 increase. So, I'll be-- That's big, that's 30 grand a year. You're seeing it's going up by $14 an hour? Yeah, I'll be roughly about 50 an hour.

Okay. So what's the other debt? You got 20 on one, 62 on the other. That's 82. Is there another eight laying around?

Yeah, between credit cards, about the, you know. Okay. Well, the main thing I would do is get out of the 62 K debt. That about solves the problem, doesn't it? Right.

But then what did it change our credit? And like how would I go about that? I just tell the bank hey, we can't afford it when they take it. Seriously. You need to do.

“You need to come up with the difference that you're underwater on, which is going to”

be a lot because you guys rolled negative equity into it. So how am I going to do? You might need to save up 20 grand if you go sell this thing. But then you need maybe another five or six more to go get a used car for now. In cash.

Right. That gets you. What's the payment on that thing? Hmm. About 1200.

If 1200 bucks freed up, change your life right now. I would like to say it would, but I don't think it would. How much underwater are you guys every month on your bills? Um, electric bills about a thousand dollars. We don't have heater air conditioning.

Um, you know, we, you know, we're still from Peter to pay ball console. Well, you're making what you're taking home nine grand a month. Between tourists. Yeah, probably. Okay.

So you have paid by weekly, I get paid weekly. Well, you guys need to do tonight is have a come to Jesus conversation and make a budget for

the first time in your marriage.

What do you like out? Hey, here's the next paychecks coming in. Here's all the bills that are going out. We need to make sure that we're not spending more than we make. And you're like, you might at least see the reality where two grand underwater every month.

And we're going to cut up the credit cards. Like, we're going to give ourselves no options of going any further into that at all. Right. Yeah, minor in the freezer right now in a bunch of water. Send them to hell.

Forget the freezer. Card on. Burn them. They have not been. You don't, you know, yeah.

And do you guys have any savings, Matthew? No. No. Okay. No.

What's your wife, how, how is money between you guys in the relationship when you, like, with the fact that you're calling us, does she, is she begging you to, to change? Or are you begging her to change? Like, where are you guys at? Um, I mean, it's, I would like to say it's more her, um, concept like, she doesn't really get

I don't get stuff for myself.

It's more or less like 15 issues. You got 82. Great and vehicles. I'd say that's getting something for yourself. Right.

I mean, I see that as, you know, I need to save the vehicle for my wife and kids. Now, when you can't afford it, Matthew, can we be honest, about 2018 Pathfinder would have been just fine. Right. But then, we have to worry about warranty and, you know, something happens.

We don't have money. Not if you save $1,200 a month, you get to save up an emergency. You don't have to save up an emergency fund. You don't have six grand, didn't it? But I don't know, a couple months.

You create your own warranty program. Yes, you are it. It's called Bank of Matthew. Yep.

“So do you see what we're trying to get out of here?”

If you keep thinking like this, you're going to stay in the cycle. We're trying to break you out of this thing by making some really deep sacrifices.

So that you never say, well, I had to.

Because if, if that's the case, we can't help you. So there's a, there is a change in perspective. You guys have to have to say, we are in charge of our money in our decisions. Like we're going to choose what our money is going to do. We are in charge.

We're not just going to let things happen and what we have to do this. We got to do that. Oh gosh, we're stuck in this corner. There has to be a perspective change. And when that happens, then you actually get to look in the mirror, if you will.

And say, all right, who's going to change our lives? We are. This is us. So now we have to, if we don't want to be where we are today with money, then we have to do everything opposite that we've been doing.

We've not been saving. We have to be saving.

We've been relying on debt.

We can't rely on debt. We haven't been living on a budget. We don't really know where our money is going. We have to be on a budget. Like I literally math you do the opposite of everything you guys have been doing.

And so if you hang on the line, Christian's going to pick up. We're going to give you every dollar for a year. You guys need to sit down tonight and do a written budget. Where does nine grand go? Every single, every single month.

Like where, line item by line item. Where is this going? And then your next goal is to save up a thousand dollars for some foremost. That's your starter emergency fund. And then you guys need to start working your way out of debt.

But there has to be a level of ownership and you guys have to agree that we can't keep doing this. And so if you can't keep doing this, let's do the opposite of everything we've been doing. At Ramsey, we don't partner with companies chasing trends or pushing gimmicks. Trust is earned.

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Up next on the line, we have Chris in Tampa, Florida. Hi Chris, welcome to the show. Hi, how are you doing? Hi, we're doing great. How can we help today?

“Well, I'm going through a now three-year divorce and having hard time financing the rest of the divorce.”

We've used up quite a bit of assets during that time. So-- Are you doing your accident? Yes. Yeah.

Why is it dragged out for three years? It would be-- She had a-- She had a stakeholder in her company that she worked for. They had private chairs, it's private company.

And so we had to do, like, long-discovery process, because they were unwilling to give the information. So I had to hire a forensic accountant via accountant had to do a lot of digging. And it just cost me probably 200,000 now over those three years.

I did, now I'm out, so I've been signing up for credit cards to pay for the 380s and the accounting. How much credit card debt are you in? About 30,000 now. And accounting because we're still not worth still litigating. I mean, where is the end inside here?

We're specifically done in February, but the stock price change is every March. So let's play this out. What if this is another two years? And now you're $200,000 in debt. Was it worth this?

Yeah, because every year, and this is what I tried to talk to my ex-wife about was every year, the stock price goes up and we own about 300,000 shares in the company, which if

a clutch rate could dollar, that's close to another half million, a year, just if it's

a dollar or a share or increase. So we're looking at 1.7 million difference from 2025 to 2026 into that. But at this point, we're gambling because if you lose this thing, and you're 200 grand in debt, now you're screwed. Yeah, I'm kind of getting richer and poorer at same time.

So it's the weird credit card debt. Can you move you this to mediation? Can we mediate it three times now? Can some confuse what the whole debt is?

“What else do you have to have for it to be final?”

For her to, I guess, give up and face reality. We've tried to mediate and we're so far off on the numbers that basically needs to go to trial. And the trial, they just keep on getting pushed off the docket and move forward because the non-colloperation on their side, we want to get it done, sent in offers, no counter

offers were put in.

So it's just drawn out, I think she's just drawing it out so that she bleeds me basically.

It's worked. I guess. Now you're going to crippling debt at some point, you're going to have to give up and wave the white flag while making the lawyers really rich. You offended some really nice lifestyle for some lawyers.

Well, for sure, I'm sure they're building pools in the backyard. I mean, at some point, we just need to make this a peace treaty and cut our losses or take what you get. How do you compromise? No, I don't know how to do that.

Is it all or nothing for you?

“Like, what does it, let's say, what's a decent scenario that you get some of these shares?”

Well, the company has a clause that clearly states how the share gets split in the

good awards and they write a check, you know, for whatever the court determined.

So it's actually the company is very simple. It's a simple process. So then what's, but what's from the legal perspective? Why is it drug out? If it's that simple, what you're saying, I don't understand why all the lawyers don't

see that. And yeah, it was discovery. Discovery was the longest part of the process and the forensic accounting part. And then, so, but it costs money, you know, that cost money. I knew that it was going to be a, we had separate assets and I hear it all the time with

you guys. Nope. We lost your Chris. Chris? Yes.

Okay. Yeah. Okay. Well, this guy, you said discovery was the longest. Is it over?

Because you said you guys kind of found everything, but then the stocks changed over in March. So now we're in April. What's your, what's your, what's your final, because you don't want to live five more years like this, Chris? No, we're looking at possibly, so my lawyer has told me that we have meeting in the

May and then we determine what the next trial date is and that's supposedly going to be September. And they're going to keep working on the thing that whole time. Yes. So this could go a whole another year before there's some resolution, which means you're

another 100 grand in debt easily. Yes, but I don't know how to get out of that. I mean, you're stuck in the process.

“What's your, what's your, yeah, how much do you have Chris?”

I mean, how's your assets? What, where are you at, financially? I still have two properties in the Carolinas that are, I own out, right? One burned down my wife filed for divorce and February of 23, and then the house burned down a week later.

I believe 50,000 and then we have the properties about 15, 16,000.

What's your total network?

“Wait, a property is it, is it just land?”

I had a house, I had a house and I burned down, it got set on fire. So the land is only worth 15 grand? Yeah, 50 grand for that one and then we, the land across the street is about 16,000. Okay, that's your own company. Those two properties, and my own company and it fluctuates like last month, I made like 30,000.

This month, they'll probably make like 5,000. So over only 100,000, I work on medical equipment. Okay. Man, I personally, I know this is like your sunk costs fallacy. I would cut my losses and go, you can rebuild a great life and build wealth from scratch.

You're a smart guy, you'll get there. I also know that you could burn another 150 grand on the off chance, you can make half million a year. I just don't think the risk is worth it and the stress. It's going to take years off your life to keep this battle up, emotionally, mentally,

on top of financially. Of what it is, yeah, and I would sell those properties. I wouldn't be a long day. Well, I wasn't saying landlord. I don't think there's any occupancy in this situation.

So I'd go ahead and just get rid of it. Sell that for you. I wanted it if you're going to keep fighting this. Yeah, yeah, and that's 66 grand that you'll have to help at least pay off some of this credit card debt.

“And I think Chris, you have to make a decision to say, okay, whatever that breaking point”

is for you.

We're never going to tell you to continue to go into debt.

So yourself, if you're choosing to kind of play that game, you at least please, you at least need a point in your mind to say, if we get to X point on the calendar and nothing has moved or there's no set, there's nothing. Even if a trial day keeps moving out, you can't just live in the cycle forever and ever like George said.

This is the same part of your brain like a gambling addict where they just go, well, I just got to double down. This time it's going to be different. I'm going to get it this time. Yes.

I just don't mean it's worth it when you're a smart guy making great money. Well, and I'm very, and it's a little confusing if, if it's so clear in the bylaws of the company of what happens to the shares, and in the case of a divorce, how, how that's not. It would have happened by now.

Yeah.

Maybe I'm being naive, right?

And again, I know every divorce is very different.

“Every state is different, every little whatever, but how it's just not spelled out like”

that. Part of all the assets that are, you know, divvyed up and everything, so my fear is that you've been in a three-year roller coaster, that doesn't matter for anybody. That's not a matter for anybody. That's not a matter for anybody.

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All right, let's head to John in New York City. Hi, John. Welcome to the show. Hi, Rachel. I George.

They sure having me. Absolutely. How can we help today? So I work for a very, very small family business and we don't have a 401k retirement plan. So the owner is offering me something called deferred equity.

So this would be a small percentage every year that I'm there. But I don't get paid unless the business is sold and if I leave I get nothing. Is that too much risk for me to take on or is it a wise retirement choice? No, I would not bank on my retirement for that. I would be doing some other things with investing, but would that just be an added?

I don't know. Do some contributions to it or are they just going to give this to you regardless? They're going to give me one to quarter percent retroactive to when I started. So when would you even get that payout? You'd have to be still employed there when they sell it in order to make anything.

Correct.

I guess the idea is I would get first dibs on the business if that, you know, when

that day comes and I could use that deferred equity as a down payment on the business. Or if I choose not to do that and someone else buys it, then I would get paid out. Are they planning on selling the business? Is that part of the long-term plan? Eventually.

Is that 30 days from now or three? Because there's a big difference.

“Well, exactly. I have no idea. I think realistically, maybe around 10 years, but who knows?”

Well, I mean, if it costs you nothing, take it. I still would prefer a retirement plan that's actually yours instead of basically a promise. Yeah, is there an option of he would give you like a traditional 401(k) situation? Or this, or is it that this is the retirement package that's it? This is basically a way to keep-- I'm essentially running the business right now and by providing

this, that's a retention plan. That's a retention plan. It's a retention plan. Okay. What do you make? I gross a little over 80, and I have, I get health insurance in a company vehicle.

Okay. And what kind of industry is this?

I'm like I think exactly what it is, but it's very niche, and it will-- I can guarantee it will always be around.

Do you want to take it over one day? I could. I would-- I think if the circumstances were right, I would like to. It's something my family has been involved in for nearly 100 years. So how old are you? I couldn't carry that on. I'm 35.

Okay. You got any debt? Just the house. Awesome. Are you investing currently? Very, very little. Just a whatever fraction I have on my Roth IRA. Is it because it monies too tight?

It's too tight right now.

“Well, that worries me, because you need to build wealth on your own.”

And if this equity doesn't happen, you're going to retire broke. Yeah. So that's where I go. We have another fish to fry, which is why can't I invest 15% of my income? Why can't I fully fund a Roth IRA?

I would at least be doing-- that's the bare minimum. Is you funding a Roth IRA every single year without fail? In order to save yourself. I need to make more money, which is something that I plan on negotiating. Because I know that it's there.

Can you make six figures doing this elsewhere? Yes, but I don't know. I would probably have to relocate to do it. I might be willing to do that. Are you single?

No, I'm married. OK. What is your wife doing? She's working. She works part-time for college.

OK, do you guys have kids? No, yeah, but we're planning on. OK, she needs to go full-time. She needs to be working. And you guys need to be funding 15% of your income into retirement.

That's your answer. Right? Oh, I agree. Yeah.

want our lives to look like and run some numbers?

You can use even just the Ramsey investment calculator to say, hey, right now if we fund 15% of our income into retirement, where are we going to go? So-- Because if you make 100 grand household, you

could fund two Roth IRAs. You and your spouse. And you can't do that. It tells me that your expenses are too high or the cost of living

“is too high, in which case you should go move.”

Because if you move somewhere where the cost of living is lower, and you can make six figures, it's a no-brainer. So I would not hang on to these golden handcuffs of a promise of equity at 1% per year that you might use as a down payment to buy the business one day.

If you can even afford it, there's just way too many variables there from it to be comfortable with. And if they're giving that to you as a benefit and you're loving the job and you and your wife's that down, and she works more, and you guys kind of figure out,

OK, here's what we can do for the next couple of years,

then yeah, take the benefit they're giving you. It's how harm to you. It's just going to be an extra thing you have in your back pocket, but I would not at all have the confidence that it's actually going to play out.

I would work on negotiating that to say, hey, I'm going to vest three years in. I can take that equity out and you can pay me that if I do leave. Absolutely. All right, let's head to Zoe in Des Moines.

Hi, Zoe, welcome to the show. Hi, how are you? I were doing great. How can we help?

“Yeah, I was wondering if I should sell the car”

that I have currently. So there's like just under 12,000 left on it.

And the payment is like 275 a month.

And if I take what I have over $1,000 in my savings and just leave that $1,000 emergency fund, and then what I got back in a tax refund, I could knock it down. The loan would be about $6,500 instead.

So I'm just trying to decide if I should get rid of this one, get a different car, and have no payment, or if I knock it all the way down to $6,500 and pay it off before the end of the year, if that's okay. Yeah, how much do you make a year?

Like 40. OK. What's the car worth? $16. Oh, so you would make money on it?

Yeah. Yep. And you could how quickly could you pay it off with the $6,500 take you? You said to the end of the year.

Definitely by the end of the year, yeah. OK. Do you like the car? I do. Yeah, they don't like the debt.

Sure. Well, I mean, use that as fuel. If you don't like the debt, let's aggressively just pay the debt off. But the car is not inherently the issue here. It is a lot of car.

I mean, it's worth 16K and make 40. That's a pretty big ratio. But it's not on fire. We wouldn't tell you, hey, you got us. And if the car was worth 30 grand, I would say,

this needs to be sold tomorrow. Well, you could, if you wanted to, you know, you take your debt down to 6,500. You sell it for 16. It leaves you with $9,500 to go by and a new to you car.

You could do that. But it's a lot of effort. So then just have a different car that you might like less. Yeah. OK.

So how aggressively just pay it off? I probably would do just from the hassle standpoint. When you look at the numbers, I mean, you could try to earn an extra grand and have this paid off in, like, it's which we'll be close to the end of the year.

It's sad already there. I know. In my head, I know many people I know. That's what I was thinking too. Yeah. So I think it is either way, Zoe. I think it's fine. I think it'd probably be a personal choice at this point.

If you do keep it, be gazellintense, pay it off as soon as you can. But if you're, like, so tired of it, which you kind of sounds like you are. And you're just like, I don't care about the hassle. I will sell this thing.

I will go down to a different car and just be done with it in 30 days. And have no payments and you're, be happy. You could do that too. But it's 275 a month.

So all things considered, it's not a maker break in your budget likely. But, I mean, it's still eating your lunch at 40k after taxes. You're like, "Ooh, if I could do a whole lot more with that 300 bucks if I didn't have it." So I would use it to fuel it, to get rid of it faster.

“But no harm, no foul if you want to sell it.”

[MUSIC PLAYING] The Ramsey show a question of the day is brought to you by why ReFi defaulted.

But why ReFi helps you explore Refinancing Options?

With a low fixed rates and a payment based on something that you can actually afford. So visit WhyReFi.com/Ramsy. That's the letter Y, R-E-F-Y.com/Ramsy. May not be available in all states. Today's question comes from Patrick and Michigan.

Do you think it's a good idea for my 19-year-old daughter to buy a small home while she goes to college? I would be a co-signer and she would rent out the extra rooms and manage it. She would use the rental income to pay the mortgage. But I could potentially be her backup.

Does this sound like a solid housing plan for her? Oof. I don't think so. It's just shivered.

It sounds like you saw a TikTok that sounded really cool.

I was like, it's easy. Buying investment property, your daughter lives in it. And you can rent out the rooms. It's a money-making scheme. I don't want to combine these things.

These are good things buying investment property. But you're doing it in a bad way by co-signing and forcing yourself to buy in that area. Who knows if it's going to be a good area? It's usually a college town, right, as we're buying. So majority of the renters in that area are probably going to be college students.

So no, I would ask the question, would I buy an investment property in this area regardless if I had a child there or not? And I wouldn't co-sign.

“If you want to do it, just buy it out right yourself.”

That's right.

And let her manage it for a fee or something.

You don't even like if you wanted to have something. But you, he probably, I don't know if Patrick has a primary home with a mortgage on it, but I would not go get another mortgage. So if you can buy in cash and you're excited about this prospect of owning some property out there for whatever amount of time, I would, you can go for it.

But I would not do it the way you're describing here. All right, let's head to Logan in, is that LaFayette? Yeah, hey, LaFayette, it's LaFayette, isn't it? Hey, Logan, welcome to the show. Hi.

Hey, thank you, guys, for taking my call. Absolutely, welcome, how can we help? So I'm kind of in a little bit of a pickle right now, so where I'm trying to stick to the baby steps and make meaningful progress towards paying off my debt. But I just feel like, you know, that $1,000 I saved, like, I will push it up to the

three grand, and then I kind of feel bad for having that much money to be used somewhere else. And I just pay off my debt to back down to $1,000, so I think it's just, I need, like, a clear goal in mind-bought thing off my debt, and that's where I'm asking you, guys, how can I stick to that baby step number two? Well, that kind of is your goal is each individual debt that you're paying off as what you're

looking at. And that's going to be your goal is the next smallest debt. Is there something that's happening in your life that you're going to need more in that emergency fund, or is it just the idea of having a thousand dollars that makes you nervous or what causes you to keep bumping it up?

Well, because I moved out of my girlfriend in August of this past year, I used to live in that different state, and then we got jobs over here in Indiana, so that's where we spent really less eight months, but my girlfriend was actually a pretty bad car accident in October, and she did not have health insurance, so she has a mound pile of debt to the she's trying to pay off.

“So that's why I was thinking that I probably will need a little bit more just in case”

that she's unable to pay something off or pay her bills than maybe I could step in help that way. But how much debt do you have? I'm right now, I actually just paid off my credit card, so it was about five grand worth of credit cards, about two months ago, so I just got the auto loan, which I did about

a $2,500 payment today, so it should be around $19,8, I believe. So about 20 grand left on the car? Yes. What do you make of your? I make about 41,000.

Man, that's a lot of car for your life. Yeah. What's the car worth? I'm going to be honest, I got it at a pretty bad interest rate, too, but the car's worth to drive on the 11 to 13 to give her a ticket.

Did you roll over negative equity? I did not. I'm wondering private story value, if you can get closer to that 20, and you just save up five or six grand over the next couple months, and just sell it and get a different car.

“Did that those mind plan, too, but I think the main issue with that is to be my girlfriend.”

We work different shifts, so it's in a share one car. I don't, I mean, we probably could, but I feel like it'd be more of a hassle just because I go to work at 1230, and she goes to work at 430, so it's going to be kind of hard, too.

We do not know. She has her own car. Okay, wait.

“What's the problem of our team about working different shifts?”

You're not going to be using her car. I'm saying get a different car. You save up six grand, or whatever the difference you're under water in, and then save up enough to get a different car, cheap car. And then you'll have a different car with no payment, and then you can stack up that emergency

fund really quickly.

Yeah, so basically instead of paying off 20,000, then just save up 10, cut your timeline

and half, save up 10, pay off the negative equity, and then go get yourself a four. A thousand dollar car. Let's say you sell yours for 15, you owe 20, right? So you use part of your 10 to cover that, that's five, and then you'll have five left to get a new to you car.

So you just cut your whole timeline in half, basically, of getting out of debt. So it's been just making extra pay to my car, just saved up the 10 grand and cash and just do it that way. Yep. That's what I would do.

How quickly could you do that if you got real aggressive? You can multiple jobs over time if you can, all of that. Probably by the end of the year. You're everything. Okay.

That's not a bad timeline.

And now it's, hey, I can survive on a thousand bucks emergency fund till the end of the year. Yeah, versus something comes up. You just stop the baby steps and stack up cash really quick. Yeah.

“Instead of all of 20, 27, still paying off this car, you know what I mean?”

Like it just, it's shrink down that timeline, and then after that car, you, you have the new car, the old one's sold and all of that, then you start saving up in a merge emergency fund. And at this point, truthfully, you're not in a place to support your girlfriend. Yeah, you don't have to money, you're broke.

Yes, sir. So that's not a reality where you can cover her rent for her for any amount of time. How old are you guys? She's 29, 21. Okay.

Do you have health insurance? Sorry, did I get, do you have health insurance? Okay, so Logan, I think what you're doing in your stock process of taking care of her is very honorable, but I would keep finances as separate as possible because there is no legal marriage here, there's nothing that protects you in any of this because there

is a, yeah, I mean, I hope not, but there's a good chance that, you know, you guys six months down the road, aren't together anymore. And if you, you know, went into debt or started giving, you know, all of the money for her. Yeah, you know, that's 10, 12 grand that you don't have going to someone that's not married to.

And so it sounds really harsh, and again, if you're in a position to help pay for her and you want to, and even if she leaves or you leave, and it's, you know, you look back years from now and you're like, oh, wow, and you feel good about it still, then that's one thing. But we just have talked to some people, they pay on, you know, people's student loans

and they're, you know, they're co-mingling lives. And so what happens is you end up co-mingling money naturally because you basically are acting like your married but you're not. And so I would just, I would just give you a word of caution. You guys may need to set up some pretty hard boundaries when it comes to money.

And if, if she can't pay rent for, foreseeable amount of time, she needs to go find some or she can't afford it or go live with family while she heals. But you can't put the bill for her. Yeah, they say that that makes sense, but it's, it's also a fact that I, I've, I've had a

hard time saving over ears as well to where I've actually never had probably more than like

forger and cash have one time as well throughout my working life for the last four years. Yeah.

“And would you say that's due to having a little bit of debt?”

Yeah. Yeah, they're still doing stupid decisions when I was 18, 19 years old and translating to now. Yeah. So let that fear be the fuel to get out of that faster with that thousand bucks going,

hey, I'm not safe. I want to be at a place where I got 20 grand saved up to protect me. And that's where you'll be if you follow the plan. Yeah. And Logan, you're on the right track.

And I mean, being 21 and starting this plan is amazing. There's people 41 that are starting this, you know what I, wish I knew when I was his name. I mean, you were ahead decades. If you do this stuff, Logan, stay out of debt, live below your means, have this emergency

fun, get out of debt, bump it up to a fully funded emergency fund, start investing in retirement. Literally, walking the baby steps, you will retire a multi-millionaire. Welcome back to the Ramsey Show in the Fairwins Credit Union Studio. I am Rachel Cruz with George Camel.

We are taking your questions at Triple 8-825-525. All right. In Armadillo, Texas, we have Katrina Armadillo.

But it was so, I'm like, is there an Armadillo, Texas? Because there needs to be. There are. I was thinking. Katrina, can you confirm?

“Oh my gosh, I'll never live that down Katrina, dad is gone, it's a real one.”

I know. I know. Oh my gosh, Katrina. She's so relatable. No.

I love it. Katrina, welcome to the show, how can we help? So, I've just kind of been chasing my tail like an Armadillo. Or a cat, like Katrina cat. Oh, there we go.

Thank you. Thank you. Thank you for helping me out. You're fine. You're fine.

So, I've been chasing my tail for a while, and I'm a series of bad luck with my family. Leon, Daisy talks about Murphy's Law, where Murphy moved into my home and Canada affected my knee, my grown daughter, her good friend, and my husband, and it's been heck. Like we were trying to balance out the bills and basically we're on payment plans for everything and we have according to our budget and every dollar, it looks like it's going to be okay,

but it's never okay because we're paying payment plans on everything which is more expensive.

For example, I just paid the last month at 678 dollar water bill. So, there's unexpected things that come up.

“Are you behind on utilities, is that what you're saying?”

Yes. I don't own everything. On everything. Okay. So, what's happened in life Katrina when you said Murphy moves in?

Well, I worked for the place that was granted in my grandmother's and unfortunately, it's me a while, but I've got another job and it's good. My daughter works for the same place. Okay. How old is she?

She's 22. She's before this year in her own place. Okay. So, she's living with you now because she can't afford her own place? Yes.

Because of this new job, doesn't pay what she was making? Yes. Because it's not even a living wage and then... And that's the same place you're working. What's working?

Okay. We both worked at the same place. And what was that? What was she doing? I was helping with healthcare navigation and she was helping this son and people homes

kind of worked for her. Work for her. Okay. What are you making now?

“I am making about 4,500, I think, a month.”

Is that your household income? No, just mine. My husband makes about 2400, bring home. What does he do?

He works for the state, he works for work, first developed, and he's in there for 20 something

years. And he makes 30 grand? Yeah. Yeah. That doesn't make sense.

Yeah. And he says he had a raise, and then they had a cut, and that was another thing that messed us up. They gave him promotion, gave him a raise, and then the mortgage across the board because they're funding, the mortgage.

Right. What does he do? What's his role? He's worked for his development specialist, so he's helped people fund jobs. Hmm.

Okay. So you're taking home pay $6,900, and what's the total balance of all the consumer debts that you guys owe? Consumer debts, everything but the mortgage. Okay.

That'll be plus like 200,000 over take. That doesn't not include the mortgage? No. That doesn't include the mortgage. Okay.

That's going to be about $150,000. I think. A hundred. And then I'm mortgage. And then mortgage about $144 that it's less now because I hate it.

Okay. So you have $150,000 in debt aside from the mortgage. Break down some of those debts for us. And that 70 is a student loans, of course. Who's those?

They're my, they're evil. How long have you had them? Since 2012. Okay. We have some credit cards, and then we have about a $30,000, no, sorry, $20,000 left on

a car. We've paid one car off. Okay. And what's on the credit cards?

It was basically the expenses.

But I mean, you got 70 in student loans and 20 on a car loan. That's 90 out of the 150. So where's the other 60? Is that all credit cards? I think that.

No, it's not 60,000. I didn't math correctly.

Okay.

“Close your, close your, close your, that's 15.”

Sorry. Okay. That's all good. That's better. Definitely helps.

A hundred, fifty grand was a worse number. So. All right. So you got just about $105,000 and most of it is those student pesky student loans. And then we get this car loan.

So if you laid out your debt small, salar just I'm guessing one of these little credit

cards is the first one that needs to go.

Yes. It would be. Okay. And right now you're saying when you do the budget, there is money left over on paper. Yes.

How much has left? If nothing crazy happened in a month. Um, about 400. And what payment plans are you guys on? You said utilities.

Um, just utilities and of course my mortgage. Okay. Yeah. Okay. So, but you're able to pay your mortgage every month correct.

Now I'm paying 29 days behind. Okay.

“So I think our first goal is to get caught up.”

So we want to get out of this payment plan with utilities and we want to be caught up to the mortgage. Okay. Katrina.

And paying your four walls before any debt payments kept.

Yes. So food shelter, which utilities and house is this. So this is your, this is your A1 before anyone gets paid. Okay. Credit cards could go.

The car payment is the next priority after the four walls. Yeah. Got to get from A to B to get to work. But outside of that, if the student loans and credit cards can't get paid one month, I'd rather those go to default than your utilities and your housing.

Yes. Yeah. Okay. They haven't been getting paid. Who's not been getting paid?

And no one said those have not been getting paid. The student loan or the credit cards? No. Be just stop. Okay.

So you have 7,000.

“How much is your daughter bringing in a month?”

Uh, whatever, 11 dollars an hour.

Okay. So she needs to go be working. 24 grand a year. Somewhere else, too. You know what I mean?

Be looking for a job. And you mentioned a friend. Is there a friend living with you all? Yes. Yes.

Just a family friend that was a roommate with her. And is she working? He lost his job. He lost his job too. But he just now recently found a good one.

If they need to be paying rent. They were, and then this, he, I don't make her do it. But he does. And he was paying. And then he had to stop because he lost his job.

And he's got a good one now. Like we're at the starting level. Everything's okay now. We just need to get out of this chasing my tail. Yeah.

Okay. So the $7,000 a month Katrina that you guys have. You guys have to pay the mortgage on that and making sure that the car is paid for. And your utilities. That's all you guys have to do.

And you're going to be eating rice and beans, beans and rice. I mean, the whole bit, right? There's like the food budget is nothing. Like we are, we're going to eat. But it's like that slow.

We're doing nothing else but catching up. And that needs to be your goal probably for the next couple of paycheck cycles. On top of your husband getting a better job. And that, that solves a whole lot of problems. If he can double his income by doing some work that pays him what he's worth.

[ Music ] Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems. And figure out what to do next.

Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained. Ask Ramsey is here to help. It's fast, simple, and free to use.

Go to RamseySolutions.com and try AskGramseyToday. That's RamseySolutions.com. [ Music ] Kyle and Lansing Michigan is up next. Kyle, welcome to the show.

Hey, Rachel. Thanks for taking my call. Absolutely, how can we help today? Well, two months ago, we lost my mom to an unexpected heart attack. Oh, my gosh.

We're so sorry. I'm so sorry. I'm 79. I'm so sorry. I lost my dad five years ago to cancer.

And I recently came into a sizable amount of money. And I just want some opinions on how to not lose it.

What does a sizable amount of money mean?

To talk to over two and a half million.

Okay. Was it from mom's estate or what it is? Okay. Wow. So your parents did well.

Obviously. Yes. Did you know about all this? Is this a prize to you? Yes and no.

I have two siblings.

“We always knew they were comfortable, but just not to just scale, I guess.”

Yeah. You didn't know just how comfortable. Right, right. Wow. Oh, my gosh.

Wow. What kind of. How was this two and a half million. Did you get out? Is this in cash?

Is it in an asset? Through the most part. Most of it. It's all. Most of it's like a Edward Jones.

Okay.

There's about a half a million in an IRA.

We've got to get out in 10 years and the rest is in cash. Wow. Okay. What do you make? Between my wife and I were about 200.

Fantastic. And how old are you guys? I'm 45. My wife's 47. Okay.

And how are you guys financially? Oh, we're pretty good. We just built a new house. Just under 500,000 in that, which we borrowed the money from my mom to build. And since it's been forgiven.

Oh, wow. We still have our old house that we're getting ready to sell. You know, painting, putting a carpet in and spruce in it up. And that's somewhere in the neighborhood of 300,000. Okay.

So the payment to her, that 500, it just went away when she passed. That doesn't take out of your 2.5. Well, it's part of the 2.5. Oh, okay.

“So would it be 2 million left or was it supposed to be 3, but now it's 2.5?”

No, there's just a little over 2 million left. Okay. After that. After that. After that.

Gotcha. 2 million. And you guys have no debts whatsoever. Nothing. No.

But then when you sell this house, it goes back up to 2.3. In a sense, right? Yeah. Yeah. With everything.

Okay. That's great. And yeah, cash on hand for you guys. Where are you guys at? Um, well, we just moved about 70,000.

Over into a money market because it was sitting kind of stagnant. And to, you know, I just saved me the count. Um, and our financial advisor. Asked us to to move that because that's not doing anything there. Mm-hmm.

Is that your emergency fund or is that for earmark for something else? No, it's just, it's just money, just extra money. Okay. Okay. Yeah.

“And how much do you guys have been retirement for you?”

Um, I actually have a pension to work. Um, my wife says about she's over 200,000 in a Roth. Mm-hmm. And I've got about 55,000 in a Roth, I guess. Okay.

Um, all right. That's great. So you guys are in what we call baby step seven. You got no debts whatsoever. Houses paid for, which puts you in a really unique place.

'Cause you have a lot of options now and there's only three things you can do with money. And that's to give it, save it, spend it. And we would recommend doing all three with reasonable ratios. Okay. So I would be giving a portion of this money.

That's up to you guys. It's a matter of the heart. I would be enjoying some of it. What's the thing you guys really want to do? The thing you want to upgrade.

Maybe it's a car. Maybe it's a thing in the house. And then invest the rest of it and build generational wealth. So you can be able to do this for your kids one day. Which by the way do you have kids?

Yeah. We have one six year old.

And that's, that's, I've always been kind of a savor I guess.

You know, my parents, you know, they beat it into you when your kids safe safe safe safe safe. You know, we've got a new house. We don't need to do anything else there. We've got good vehicles. I mean, neither one of us have any desire to buy new vehicles.

Right? Yeah. And I want to make sure that this opportunity is there for my daughter. Mm-hmm. You know what I'm gone.

Yeah. So I just don't want this to trickle away in the next, you know, 30 years or 40 years. I have a good feeling it won't just based on how you're talking to me. You're probably going to be handing over 10 million dollars to your daughter at this rate. Yeah, for sure.

I hope you're right. Because I mean, the money if you just let it sit without adding anything to it would double every seven years. Okay. Yep. So that's time, you know, you think about that?

Two million to four million to eight million to 16 million. Do you see where we're going with this? Yep. Yep. And so, yeah.

And so, since you are a natural saver Kyle, you know, I would sit down with your financial advisor and kind of you guys map out. But part of this, too, is, you know, create good memories, too with your daughter. You know, if there's, you know, going a great trip every year with some of this, you know. And like, have some experience and live live life well. You know, you know, you know, you know, even a pain for her first starter home or something.

Like, like, there's some big things that you guys can do with this money. That's really wonderful. And you have the time for it for her specifically considering she's six. But, but enjoy some of this, too. Yeah.

And it doesn't have to be just stuff. I wouldn't just be like, oh, go buy a bunch of stuff. You can. You guys can afford it. But find some experiences that you guys can do together as a family.

You know, just got back from a Disney 3D Disney crew. Oh, great. So that was a lot of fun. That is fun. Yes.

So like, make memories together, too.

“You know, I think your mom, you know, you just kind of think through, okay.”

What would my parents want for my new killer family? And I think they would want peace for you guys. And financially, you know, being debt free and doing what you guys have done. You've, you've created that. You know, create some great memories is what I would say as well.

But I think this money, yeah, as you play it out mathematically, it's going to be plenty for you all in retirement. And yeah, and to be passing on something to her as well. All right. Have you funded college?

Uh, she has about my mom started a fight. Twenty nine four and she's got about twenty eight or twenty nine thousand in there. Oh, that's awesome. That's great. I was going to say you could do something called super funding.

It's already kind of super funded at six to have 30 grand as awesome. But you might want to play another ten or twenty grand in there.

And then never touch it again and just let it ride and she'll be fine.

That was part of our last meeting with our financial advisor. And he advised just to not just dump a bunch in. He said, just trickle a little bit and, you know, a couple thousand or $3,000 a year. Yeah, because you guys could just pay out a pocket too if she didn't go on. Yeah, you know, you wouldn't get through obviously the.

Yeah, super funding is basically instead of funding a few grand a year. You just put in 10 grand now and then never add to it.

“Okay, because mathematically that'll be the best way if you can lump some it now.”

And then you want to add as much over time in total contributions. So that's one thing you can do, but that's such a tiny portion of this. That's what I was going to say. Yeah, drop it in. Yep.

And so I would be investing most of this so that you can create generational wealth. And I would at least be maxing out, you know, all of your tax advantage retirement accounts first. And then once you run out of options there, move to non retirement and a taxable brokerage account. And so you got a lot of options on the table and outwork with your financial advisor. If you trust them to walk you through the best method to invest those dollars.

Yeah. Man, you got a great problem to have and what a wonderful legacy. Did your wife work, Kyle? Okay. Yep.

And you obviously are working. Yep. I was going to say, yeah, I probably wouldn't change much unless, you know, one of you wanted to stay home and be a stay home parent. You know, if something like that, like there's a big life sell shift. You guys could do if you wanted if that's like a value.

“That you guys have that's what that's one beautiful gift of this money that could happen.”

But I definitely wouldn't change, you know, at least for you or her, you know, somebody to still be producing an income. You guys kind of living off of that for your primary source just to, there's a, there's kind of a groundingness there. And then you kind of have this other fund over here that's growing. But when you want to do something big, it's available to you, you know, to be able to take out some money and enjoy it when the time comes. So, um, it's wild.

I mean, they make it a grand.

If they just put 2 million in there and the market does 10% this year, it just replaced their income.

They're holding that company wild. I know. That's when if you hate your jobs, you know, you go do something for less money and you're good. Like, you know what I mean? It's a freedom fund right there.

But to have like that, still that purpose, there's something in that that's beautiful. So, um, wow, what an amazing testimony, guys of, um, got that does. That's how to do it right. And money doesn't change the family tree out of this idea. Like, oh, my gosh, we're suddenly rich.

It just gives opportunities to do amazing things, um, for others and your family. When people hear my story of Ping Off Dead, they say things like, "Dening that must have been so hard. I can never do that." And I tell them, sure you can. It's a short-term sacrifice for a long-term gain.

But do you know what's really hard?

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

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

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

Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the every dollar app and start for free today.

Well, George, you know, we wish that we could get to every call and every question. In a perfect world. But it's hard. We live in a fallen world. We didn't get to all of them.

Only four hours in a day. We call some cities. Armadillo and Santae Amarillo. You know, sometimes it happens. So, we're not perfect.

It's foulable creatures.

We are, but here's the thing.

“Is most of our advice is consistent, right?”

What we talk about on this show is what it is. And for those of you listening and having listening forever and ever, Amen. You could probably answer the questions just as well. George, why don't you think you could?

Or, you think you could. No, but, you know, that is a great thing. Because we are able to use technology because of that. Because of so much content that is out there. To feed an AI system, if you will.

And with learning models. And we, oh, thank you. And we created Ask Gramsey. So it is our own version of Ramsey AI. And you can actually go in.

Ask your question. Like you were calling the show, talking to one of us. And you will get the answer that we would say on the show. Because this has been fed, if you will. By, I mean.

I mean. I mean, I mean. Oh, sure. These episodes. Yes, of everything you guys.

So, if you have a question about your life and your specific situation,

head over to RamseySolutions.com. And ask your question in the Ask Gramsey box. It's right there for you. Or if you are watching on YouTube or listening on podcast. We'll put a link down below.

But, you know, technology, you love it and you hate it. And this is a love it. This is a love it. This is a love it. Because you are able to spread the information and help people.

You know, if you are not able to get through it right now. All of our lines are booked up. I didn't like the DMs. I go in my Instagram DMs. Like it's three paragraphs or 17 numbers.

I'm like, I guess. I'm like, go use Ask Gramsey. It will walk you through it. Because it will like take all your numbers and do what you need. It really is amazing.

So, yeah, and check it out at RamseySolutions.com. All right. We have another person calling from Charlotte George. We are just there last week. That was a great event.

We have great time.

Thank you to everyone who came out.

Yes, we're going to be in Anaheim next week. George and I are. Yeah. Oh, my gosh. It's already here.

I think it's sold out Denver. There's a crew that's going to be there tomorrow. John Deloni, Jade Worshaw, and Ken Coleman. And then Ken Coleman, Jade Worshaw, and myself. We're going to be in Phoenix next week.

“So, I think there's still some tickets to that one.”

I think all the other shows are sold out. Oh, sweet. Jump on it. Yeah. Go to RamseySolutions.com for tickets.

So, we'll open up a little line. Plug for that. Because I see Charlotte on our board. And then we had such a fun time. And then people go, when are you coming to Charlotte?

We're like, dude, we were just there. We were just there. I know, I know. But we are excited to talk to Phillip. So, hey, Phillip.

Welcome to the show. Hi, George. Right now. I guess. We're doing great.

How can we help? So, you know, life currently is in a mobile home. I hear a near Charlotte. And my in-laws are currently at middle. We're about to see the inheritance.

So, $100,000. Wow. And they set us down the other night. And told us they wanted to pay off our mobile home. I was just going into the internet.

And it's whether there will be any kind of gift tax or. Or can I just, you know, put that money in their account and pay it all for.

“So, this is that you're getting this inheritance while they're still alive.”

Is that the idea? Well, my wife's grandmother is a very sick. Not expecting to make it. No. So, the inheritance is going to your wife's parents.

And then they want to gift it because they don't need it. Yes, yes. They got it. So, it's $100,000. Is the $100,000 fill up going to pay off the mobile home where they went to it.

In addition, pay off the mobile home. Yeah, it will. Our mobile home pay off is like $31,100. Somewhere on that. Okay.

So, yes. Sorry. Are they using the $100,000 for that, though? They are. They are.

Okay. So, you guys would be left with about 70,000. They would be left with the paid off mobile home. So, yes. They can do that.

You can. Yeah. Each individual parent can give each individual child $18,000 a year without it. I know. Big upgrade.

Is it 19? They opted to 19. This this time. Okay. For 20, 26.

So, that's 19. I had 18 in my head. That's the annual gift tax exclusion. And so, if the in-laws are married, you guys are married. That's potentially 76 grand.

In-gift exclusions. Which just means they don't have to file the gift tax form that goes against their lifetime, you know, state exemption. So, that you can do up to that much. Now, you guys will not owe anything in taxes.

It's them that have to deal with, hey, if they give over that $76,000 threshold, they'll have to file a form. That's all. Okay. Okay.

Thank you. Absolutely. So, just make sure they're aware. And if they have a tax pro they work with. Just say, hey, just see you guys know.

If you do the $400,000 this year, you might need to file a form for that extra, you know,

Okay.

Now, Phil, are you guys, do you guys have plans to move out of that?

Home at all? No. We're not. We're staying. We're here to the long haul.

What long haul? Until it's worth nothing. For the foreseeable future. Because that's part of that worries me. Is that mobile homes going down and value?

Yeah. Make sure you guys are saving on the side. Fill up that one day, you know, if you guys, yeah, from a value standpoint, from the, the value of the mobile home, it will start going down.

“So making sure that you guys have some money saved that if you need to upgrade and/or go buy a house”

or something, you know, that you guys have. You're not building any equity right now, if you will. And that's where a lot of people build a lot of their wealth from a home perspective is in their equity in their home. So just be thinking about that on the just the side that maybe you put, I don't know,

maybe this, this other 70,000 away for who knows, you know, maybe a down payment down the road. So just be thinking about that. I'm so sorry, yeah, for the loss, but I'm, I'm thankful that you guys can put this money to good use. All right, let's head to Colton in Asheville.

Hi, Colton, welcome to the show. Hey, thanks for taking my call. So I've got a question about my retirement account.

Basically, my financial advisors wanting me to do something and it doesn't make any sense to me.

I was hoping I could get your advice. I worked for a company for two and a half years.

“And during that time, I went through financial peace and diversity.”

And I realized that instead of putting my retirement into a pretext account, I should do the after tax for a 3B. So I've got two accounts there. I don't work there anymore, but they are changing from Trans-America retirement solutions to some other company.

And so they called me and said, they want to meet to keep my money with Trans-America, like Trans-America called me. And so they want me to pull it out of that account and then put it into a Roth IRA with them. And I thought that sounded a little sketchy. So I called my advisor and he said, don't do that. But let's pull it out and put it into a normal IRA here at Edward Jones.

But I'm most likely going to be going back to work with that company, like in the next few weeks. And it'll be a long-term position. So I don't know if it even makes any sense to take it away from that company, or just let them change to their new retirement solution company, and keep it with them and starting this and back into it.

Well, I would just hang on tight until we know what's going to happen in the next few weeks. If you go back to that job, you just reopen that 4-3B and keep investing.

“But it's not bad advice to say once you leave a job, you should do a direct roll over to an IRA,”

because you don't have control over that anymore. The employer doesn't want to manage this old fund. It's like keeping your stuff your ex's house. And it can be getting dinged with fees at the same time. And the IRA gives you basically unlimited options to invest,

where your employer plan might have 10 to 15 funds to choose from.

Yeah, so we do always suggest, yeah, when you leave a company,

you roll over your 401k or 403B to a traditional IRA. That's great. If it's traditional 401k or 403B. That's true. If it was Roth, yes, that would be different.

But since you may be going back there, yeah, and instead of dealing with all that has to do it. As you don't go back, I would roll it over. You can do it through your advisor. You can do that on your own. There's a lot of options here, but they're not giving you bad advice.

And an example is my wife worked at Ramsey for nine years. Well, when she left, we rolled over her money. She had some traditional, some in Roth. We rolled over the Roth side to a Roth IRA, rolled over the traditional side to a traditional IRA. And it was a direct roll over.

So we didn't see the money. It was not in our bank account. We moved it directly to avoid any taxes. Yep. So good roll.

Yep, hope that helps Colton. Yeah, good luck with all the transitions. I hope you get settled and feel good about where you end up. Alright, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates.

But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Alright, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates.

you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling.

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

Find a Ramsey trusted agent near you at RamseySolutions.com/agent. That's RamseySolutions.com/agent. Our scripture of the day comes from 1 Peter 4-8. Above all, love each other deeply because love covers a multitude of sense. Tina Fey said there are no mistakes, only opportunities.

Thank you, Tina Fey. What an original, you know. She's a poet and a comedian. We love Tina Fey and Amy Polar. Alright, let's head to Phoenix.

We're going to be next week. Hi, Emily. Welcome to the show. Hi, how are you guys doing? We're doing great.

What are you doing next Tuesday night, Emily? Hi, not sure. Probably working. Probably working. Okay.

We'll have Christian pick up at the end of the call.

“If you are open, I think we can snag you two seeds to our Ramsey show live.”

It's at the Mesa Arts Center. April 24, 7 p.m., we can even have you at VIP at 5. If you're free. Oh, my goodness. That'd be amazing.

Okay. Okay. Stay on the line. Christian will pick up. We'll get you some tickets.

Rachel, my experience comes true. Hey, Emily, I did this two weeks ago, John's loan and I were hosting. And a guy called in from Charlotte. And I said, we're going to be there next week in Charlotte. And he's like, really?

So I got him to take it. It's met him in the signing line. He said, I said, I'm the guy you gave the tickets to.

So Emily, I hope I meet you next week.

I'll raise him. Yeah, it's George won't be there. But Jade Ward, Sean can call me won't be. But all right. Emily, how can we help today?

Okay. So right now, I'm a massage therapist. I make about risky 8,000 annually. But I'm currently $65,000 in debt. Mm-hmm.

“Right now, we, the last six months we've been staying at my mother in”

my house just since the money and get caught up. But I just recently found out that there's the house who's an older house. So it's covered in like mold. Mm-hmm. So we're trying to get out as soon as possible.

But my main concern, um, so in 2018, um, I went in with my family and we bought a multi-generational house. So, um, we all like, two people are living there currently. But the other, um, we all left. But my main concern is, um, because I've brought it up to get me finance to

possibly them buying me out. But they're just not budging at all. Or even till like, if we could sell the home and each, but it, the three ways. But yeah, they're just not budging at all. So I'm just kind of, I don't know what I can do.

Is that the $65,000 in debt? Is the home situation or is that above? Yeah. Yeah. That's a different thing.

That's my own, um, summer's in 43. I think it's in credit cards in $9,000. Personal loan.

“And then also, uh, I believe it's 13,000 for my car loan.”

Okay. Was there an agreement when you guys bought this home of how this all works? Yeah. We didn't sign it on paper. But essentially, we're supposed to, um, get the, get the home.

And then the next person was like, those three different families. And then, um, the next person were going to use equity for another home. And then that one would build equity and get the next. So essentially, we thought we were going to have three different homes. But it didn't end up handing out that way.

So you guys are just riding on vibes right now. And it's just, well, we don't want to do that. And we didn't sign anything. Yeah. Exactly.

And like, they won't budge like the, it's like I'm trying to get out of it. And just how much do you own of this home or what percentage? Um, there's still 250,000 left the home currently is 425,000. And what's the plan that for the people that are living there now? What are they saying?

Right. You're just saying, um, let's say, meaning my mother, she just doesn't. She thinks that she'd be a forever home that, um, all the, Cause I have four sisters. So it's like all of us.

Can you live forever in a, in a mold covered home? I'll tell you that. Which, I mean, it's kind of crush her health. I understand that. I'm also, it's clearly like my mother and mother.

Um, it's the mother and law has the mold. Yeah. There she's the, the other home is different. Okay. Gotcha.

Um, okay. And you're married, Emily. How much do you guys bring home a month? You and your husband combined. Um, I make 58.

I believe he makes 50 as well. But right now he's like finances are separate.

And then I'm trying to pee off my stuff. Okay. How much, what kind of debt does he have on me? Also has a car loan himself. And then he also has like $49,000 in credit card.

Okay. Why are you guys doing it separately?

I, let's, let's always, then that, what we, I don't think these others can find money.

How long have you guys been married? Um, we, um, 2023. But we've been together for 13 years. Okay. Um, well, what I would probably do.

If I were you guys, I'm trying to think your car's loans, everything.

“Um, what, what did you rack up $43,000 a credit card debt with?”

Um, well, I have two small children and it was just like, um, one thing after another. Okay. So he lost his job for two years. So it was just trying to. So he lost his job for two years.

Your, your ex husband or your current husband. Oh, my current. And you help float his financial life. Yes. But we're not combining finances.

Only when he needs help. Yeah. Okay.

So what I would do, Emily, is it, this is a bigger question.

It's more of a shift in the relationship. But what we find couples who work together and say, hey, this is our household income. Here are household bills. Your debt is my debt. Like, we're, we're in this financial life together.

They win faster. They get out of debt faster. They build wealth faster when you're trying to do your own thing. It's going to take you both longer. But when you have synergy, not only from a mathematical perspective, but also a teamwork perspective.

It does. It just goes so much faster. So that's a really big conversation because you guys have done your own thing for about 15 years with money. Yeah. But what I would do, I would, I would really, yeah, I would push you guys to combine and work together.

And you guys list out your debts together. You know, like his, his $9,000 in credit card debt. You're a $9,000 personal loan together.

“You guys like, make a plan and say, hey, what if we lived on 60 grand?”

And we had $40,000, you know, this year to pay off debt. You know, what could we not get? And you start together doing a plan. And you guys could be out of debt in two, two and a half years. If you really, really focused on this.

But you couldn't do that separately. You would be slowly doing it because you're paying some bills over here. He's paying some, so it's all disjointed right now. Yes. So I would, yeah, I would have a relationship conversation.

And combine your money. Draw it. And what is your share of the house that you co-owned? How much would you actually get if they bought you out? Um, I'm really just asking, I'm just a 43,000 for credit card.

Um, I own a third of the, um, the mortgage and the deed. Yeah, so you own a third of the house. If they were to buy you out, how much would you net? Um, I just wanted the 43.

Here's what I just asked for.

I know, I'm not sure. You just want the 43, even though you own more of it. Exactly. Okay. Well, I mean, the one thing you can do is to get a real estate attorney.

And you can do something called a partition action. Where a court can order and force the sale of the home.

“But you need to kind of get some details down.”

What's the home actually worth? Get the home appraised and then what's your share? How much are you wanting and then present a formal written buyout offer? Because right now, nothing has been written down. It's all just must see dysfunctional family dynamics.

And it'll continue to get messier as time goes on, honestly, Emily. So organization is your best friend right now. That includes getting on the same page with your husband, combining the finances, attacking your debts as one. That will help all of this.

Got it. Well, thank you so much. Absolutely. Emily, thanks for the call. Yes, thank you. Yeah, that's yeah. Hold on the line too, Emily.

If you're still there and we can see if we can get your tickets to Phoenix. And bring your husband. This is going to be great. You know what? Yes.

Ask your question. Hey, our finances are separate. Yeah. Here's why. And have the jury weigh in.

Yeah, have him there too. We can all talk it out. And no Ramsey show life. That's why we love this event. It can't be just so much fun.

I believe in you guys. You know, but this is the, this is the warning call of when people co-mingle from a family perspective real estate. They have this dream that, hey, let's buy a piece of land. We'll plot it out and everyone can build a home.

We'll win one person. We'll have seven homes one day. And when one person wants to move out of state because the spouse, you know, got a job and they got to sell them to a stranger. It messes up the whole thing or this, you know,

we're all going to go in on a home together. And you can have this equity. I'll have this and it's going to be great. Will it, though? It does.

Yeah, it rarely works. You guys. I can count on zero fingers. How many calls we've gotten? We're like, this was the biggest blessing in my life.

And I co-owned it with my mother-in-law, my sister.

One of them doesn't.

I mean, it's a tangled nightmare.

And so, yep, just a, just a warning.

You guys for all of that.

But George, great show. Thank you.

“To everyone in the booth and thank you everyone for listening and remember,”

there's ultimately only one way to financial peace.

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