The Right Financial Decision Starts With Understanding the Problem

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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. I'm George Campbell, joined by Jade Warshon. We're taking your calls at Triple A825.

5225, you can't tweet it in, you can't call it in yet-- >> Sometimes we do take the social ones. >> That is true. >> And you can leave us a voicemail with us less fun. So call in live, we've got some open phone lines here,

Triple A8255225. Tonny is in Bismarck, North Dakota. Kick us off, what's going on, Tonny? >> Hi, thanks for taking my call. >> Sure.

>> So basically my whole world imploded on me recently.

>> I don't know. And I found out that my husband, we've been together for 15, Mary, just over 10, we have two boys that he's been cheating on me. But at least two years physically online, who knows how long. But again, we have two boys and all of our assets are combined.

We have no debt except for our house. Well, so I thought, because another layer to it is he has been hiding a significant amount of credit card debt. >> Yeah, but having this relationship outside is costing him. >> Yeah, yeah, and so I'm trying to figure out

how to move forward with not only that credit card debt, it doesn't have my name on it, but we're married. So I'm responsible for it too. >> And then-- >> Well, you may not be with that. >> I think if I'm the judge, I'm going to go, well, you're an innocent spouse,

and he's taken on this credit card debt as part of the, you know, judgment. What are you going to do next? >> I don't know. >> Have you spoken to an attorney yet, Tonny? >> No, yet, no yet.

>> I think that might be my first order of business day by day.

>> Yeah, I would see what, you know, every state has different laws. But I just want to make sure that there's no rash decisions here, out of fear or anger that could hurt you later on.

“And so I think talking to attorney, you're going to have what can I do?”

And should I do legally to protect myself during this awful season that you're going to find yourself in cleaning up this mess? >> Yeah. >> Have you guys talked to each other? How did you find out about all this?

>> Well, I had lost my phone basically, and he was sleeping, so I grabbed his phone and I saw a snapchat. That's the special looking snapchat, and I kind of led me to swooping in his phone. First time I've ever done that in 15 years. >> Wow.

>> Yeah. >> How old are you guys? >> How old are you guys? >> 33. >> Wow, I'm sorry this is happening.

This is devastating. I mean, I can't imagine waking up in your shoes. So just the fact that you're trying to keep it together, you know, good on you. How old are the boys? >> They are 10 and 6.

I'm so sorry. Do they know about this? >> They don't know the details. They just know mom and dad are going through some things and dad moved out. >> Okay.

>> But we're trying to keep it as civil as possible. I think I have all the reasons to be the crazy one, but I don't. That's just going to work. >> Yeah, I think it's worth it. >> I think my first order of business would be, like I said, I find an attorney

that I'd ask in my circle of friends and who do we know, who did Jeff use for his divorce? You're circle of friends and find somebody recommended an attorney that you can speak with. And then the next thing is I'd be looking for a counselor and I'd be speaking with a counselor and I'd also ask, what do you think about the kids?

“What's the best way for me to approach this with the children?”

Just to make sure everything's being handled with as much, I think you're probably doing a fantastic job, but just to make sure everything's being handled with the most intentionality that we can muster up. And then from there, it's about letting your attorney kind of guide these proceedings and guide, okay, how do we bring up divorce?

What's the best? Because I think that if you, and it's not to say that anything has to get muddy or ugly, but I think if you're going to try it, because I see on my screen, you're asking, how

do I sell my house, the answer is right now you're not, you know, I wouldn't try to do anything

with moving money, selling assets, I just wouldn't do that until speaking to an attorney. Okay. Are you paying the mortgage or self right now, or is he helping, what's he going on there? Yeah, he's helping, like, he basically just started his own account and then he's just

Okay. Okay, good.

So he's got a mind that he wants to keep taking care of the kids, he's not completely

just, he's not going to like train that count and flee the, the state. No. Okay.

“No, I think he, he knows he's the one that really screwed up here and he's not going”

to do anything to make it any worse for himself. That's good. And both of your names are on the deed of the house? Yes. Okay.

And is he down to sell this house? Would he be cooperative in that, to sign the paper or anything? I think so, but we have so much renovating to do with the house before we could really make a good gain on it. Okay.

How much equity do you have right now? We have about 100 equity in it now. Okay. And do you work outside the home? Yes.

Okay. What do you make? I make about 85. Fantastic. So what I would be doing, Tani, is just trying to forecast what the future might

look like with this new chapter for you and these boys going, hey, if I am on my own six months from now, what is life going to look like financially? And I would start to craft a budget around that and start seeing, hey, what would rent be if we sold the house and I rented somewhere? What kind of place would I need?

How much would that cost? Can I afford all of this without needing any income from him? Now maybe there's going to be child support, alimony, I don't know the full story, but I would sort of try to create this this independent island in case this thing doesn't go well.

Yeah, but there's, there's no easy way to deal with this situation other than taking it one step at a time. So I would make a list of all the things I need to do to get it out of your head. Because right now, everything is swirling, everything is emotional. You're going to have moments where you just need to lay down.

“So don't feel like you need to do this alone and don't feel like you need to figure it”

all out day one. That's what I've been trying to do. Yeah.

The first day, I'm like, we're screwed.

We're not going to make it through this. I'm going to be homeless. Well, I like George's idea because it is going to help out and just to put even a little bit more on that, what I would do tonight and we can help you walk through a little of this. I would just list out all the assets, list everything out and just split it in half for

now and say, okay, there's this much debt. I'm going to assume that I'm on the the hook for half of that half the assets and then kind of do that net worth equation and decide, okay, what's left and then from there, that will kind of give you, because I've heard Dave say this and I believe it's true when there's no knowledge or brain just kind of makes things up and fills in the gaps and you start

freaking out and winging out. So as much as we can pull some hard numbers and hard facts, that's going to help give you some peace.

“Even if it's not pretty, it's still going to give you peace because you actually know”

the answer. So I would do that tonight and then along with that budget, what are you bringing home a $5,700 a month is that about right, well, I pay all the health insurance and so that comes directly out of your check. So whatever, whatever your take home amount is plugged that into every dollar, we're

going to give you that for free, at least for the next year, just to help you see and start planning out. Go online and go, how much does a two-bedroom apartment cost and just start to answer some of these questions that are floating around in your head, I promise it's not going to be fun, but it will give you peace.

We always say that divorce turns a marriage into a business transaction and so now it's

just how do we do this as cleanly as possible without affecting the kids and not dragging them into this mess that was created. I'm so sorry, Tony, we are rooting for you to get through this. Hey, this is Dr. John Deloni. I take my sleep seriously because better sleep means better health and if you've been

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How's it going, guys? Good. How can we help today?

Yeah, so I recently did having some trouble, so I recently had like, I would consider her

a loneliness girlfriend at the time. She was pretty easy on the budget, but as things have gone, like, increasingly, you know, a little more serious, you know, my budget has kind of expanded on every dollar app. So nice way to put it. Yeah, so I was just going to ask how you guys, you know, account for those things.

It's like, nah, I'm like every month, I'm like having to, like, slice and offer the categories. Like, my restaurant budget now is just her, I had a lot of budget at this point. Like, I'm just trying to do extra things for her. So how is this? Like, explain to a start to finish.

“Is she texting you, like, hey, we're going out to eat tonight?”

It's a whole mess of that and more of, like, I somehow got tricked into, like, paying for extra things. So, like, like, what the final week, so she was, like, very tired. So I was, like, just buying her coffee every day.

What was that on your volition or was she asking for it?

It's my volition. Okay. Because I want to dog her and be like, wow, she's terrible. It sounds like you just feel this pressure to spend. Yeah, tell us what, tell us what type of money you're spending on her on a weekly basis.

Like, we go to a, we go to a dinner and the dinner is $90. And then I spend coffee on her and I probably get her five coffees a week. That's, you know, $69 or I don't know how much coffee's. But, tell give us some ball parks here. Yeah, sure.

So I think every month is a little different just, like, this month has been, like, a birthday and then final, so it's been a little more since then. Would you get her for a birthday? A small package. How much?

Roughly around 450 to 500.

Yeah, wow. Okay. Now, here's the problem Chris, you just set the tone in the bar. Yeah, next birthday. It's got to be at least 500 bucks.

You, do you set the bar early, my friends? Not flowers and chocolate next time. Yeah, I kind of got a little screwed over here. We started dating around Christmas time. I kind of had to get a Christmas gift.

So like, that kind of put me in the hole a little bit too. Okay. So I will start out by saying this because I, I, I want you to know who you're dealing with here.

“I believe in wooing and I believe in like whining and dining.”

I do believe that I love that as part of courtship. So there's part of me that I feel like you're just doing everything right. It costs money to have a girlfriend. Just like it costs money to have some of the other things you enjoy having. So there's part of this that I do think there's, you know, there's a toll here.

Now, the question is, is it bothering you because you're in debt and you need that money to pay off debt? Or why is it bothering you that you're showing out this money? Tell us about your financial situation. Yeah, sure. So she's the one who brought me on to the rambi stuff.

So for me, I think it's a mixture of like I'm trying to be like, you know, I got a budget for her, but like this month I just blew right through it right for the birthday. Mm-hmm. So I don't have that much debt. I think I have point to hear.

I mean, I'll tell you the more we do about 35,000 in debt. Okay. I do have a CD that's about 100,000. Oh, I won't be able to access it, so August or July, but the plan was to use that to pay off the debt and then start investing a little more aggressively.

But that's a plan, but I was just trying to figure out, like, my budget, like I've been just changing every month. Like, some of them are lower than the others, some of them are higher. And also just trying to bond that with. Well, you set the budget, you're the boss of the budget. And so it's your job to say, all right, I'm going to spend $200 for this birthday and no more.

And then you figure out how to do that. But instead, you're going, well, I really want to get the spot package. Is it to impress her? I mean, it doesn't sound like she has crazy expensive taste and you're just trying to appease her. Yeah, I think for me it's trying to appease for sure.

It's not so much expensive taste, but I guess the way her schedule works out, we don't have as much time to spend. So it kind of makes it a little more sense to, like, go a little extra step. So you're trying to buy her love since you can't do it with your physical presence. I don't think there's anything wrong with you saying, like I said, I love winding and dining. But I also love a budget and I love financial goals.

“I think if she's a good match for you, you should be able to say to her, I love being able to take you out.”

I love being a gentleman. I like being able to, you know, practice chivalry and pick up the bill that being said. My budget is kind of limited. I just want you to know so that if there's something that maybe we're, you're used to us doing and we don't do it that week. That's the reason why it's not that I'm not into you anymore.

It's just I got to pay off my debt and I think you should be able to say that at this stage in the relationship and it be received because she probably has things at least she should on her end. That are similar. I can't actually like, yes, I'd like to do my financial goals too. So I think another human being should be able to understand that type of statement.

And you do, by the way, once that CD lets let's him and he needs to pay off that debt with the full maturity. And I would look into what the actual penalty is because if it's enough in Burger and you're just missing out on some interest, I would pay off that debt today. Yeah, because sometimes it really isn't anything it just kind of stops other times there might be a withdrawal penalty there. There's different rules on that.

“But I think if she turned you onto the Ramsey plan, it's an easier conversation.”

So yeah, if you go, hey, listen, I've been wanting and dying and I realize I've been blown through my budget every month. I got to get this thing under control. Date nights might look a little bit different for the next year as I clean this up. Can I tell you a real-life story? Okay, so it's going to be good.

You got that smile of like, Miss Schiff. It's just a memory that I see in my mind right now.

When I first met Sam, he, my husband, he lived in a townhouse obviously alone and he was showing me around his house for the first time.

And I was struck because he just had a pile of cash that he kept. He just savings. He just had, he had a lot of things and we totally wouldn't have liked it. He would have liked it on a table. Yeah, no, no, no, it was in his closet. It was just stacked up money. And let me just tell you, Sam definitely would me, he wind and dying me.

And I can actually see the stack of cash going down down down. As he continues to date you. Yeah, yeah, yeah, yeah, it's so funny. And then he finally did propose. He proposed six months into dating. And yeah, and by then he needed to get a paper route because he'd gone through his savings.

And so he had to get a paper route to buy my engagement. Resson, did he not know about us savings account?

Listen, did we know anything back then?

He's not like a 70 year old man with 10 cans in his backyard. That's funny. All right. I got a razzum for that next time. I see him.

“All right, Justin is in semi valley, California up next. What's going on, Justin?”

Hey, guys, how you doing? Thanks for taking my call. I appreciate it. Absolutely. How can Jade and I help? I'm super excited to talk to you guys. So, my wife and I are about to be on baby step four, which I'd love to share. How we get that.

We're both educators and contributed to CalSTRS. We're contributing about add to our four three B as well as the CalSTRS through work, which equals about 10%. Once we get to baby step four, do we bump up our four or three B contributions, invest more in mutual funds, open up a lot?

He's kind of excited about getting the baby step four. And what do I do when I get that? I really love that question. And just for the listening audience, baby step four is the baby step after you've paid off your debt after you've saved up three to six months of expenses, where you get to invest 15% of your gross income.

That is the amount before attacks is before insurance, before all that good stuff comes out. And to answer your question, yeah, and baby step four, I would bump that up to 15%. And if you're already maxing out the 403 B at the 10% I would move to a Roth IRA.

But if you're 403 B isn't Roth, and if there's no match, I would do the Roth first.

And I would go to those funds first and max that out. Then go over to the 403 B. If you can, I don't know if you have a match in the 403 B. No, it's not a match. Just whatever we put into it. Okay. And then is there a Roth option for the 403 B? Have you looked into that? There isn't. So I was with a previous school district.

And I took that 403 B and I was able to convert that to a lot because I separated from them. So my company was able to do that, but not able to do that on a day to day. It's just a straight 403. I'm not not able to. Okay. So if there's no Roth option and no match, I would go straight to the Roth IRA first and fund that. And if you still haven't hit 15% then go back to that 403 B and contribute there.

That sounds perfect. I'd love to share with you guys just how we got here. I got 20 seconds. Okay, speed ramps. 2025 put it away about days was way too strict. In 2026 I went back to it for I sold my car bought a car cash. We paid off $53,000 in debt. We have a rental house that we're selling.

It's the best growing out. Once that goes blue, why not end the baby stuff for us. Yeah. Way to go. I love these are teachers. Educators.

And it's the number three career path for millionaires. That's right. We love to see it. So it's about what you do with the income. Not making the high six figure salary because those people are generally broke. The teachers, they got control of this money. Way to go.

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Right before the break, we were talking to a fella who has asked, "Hey, how do I invest with babysept four and I've got a four three B through my employer and the Roth and the match?" We were throwing out lingo left and right. And so we thought we'd just take a moment to help explain some of this in layman's terms because it is confusing and it can be overwhelming.

And I don't want that to stop anybody from building wealth. Yeah, that's right. And we teach over here obviously babysept four. I told you guys the last segment. And we say when you do start doing babysept four, you're investing 15%.

We like for you to start with an employee sponsored account. So if you just have a regular nine to five W2, it's usually a 401k with teachers. We see 403 B's, military has something different. But most professions have their version of a 401k.

And that's just literally the section of the tax code that says you can have an employer sponsored retirement plan. So section 401 subsection k. Yes. That's it. And then from there, there's different tax treatments on it.

So we've got the traditional that we talk about all the time. And that's just saying, hey, you are adding money into this account before you've paid money before you paid taxes on that money. Pre-text dollars. And people go, okay, great. That's one option.

And then there's the Roth option that we talk about that. We tend to favor because this is the option where this is after tax dollars. You've already paid the taxes on this money. We love that because when the time comes later on in life after retirement, when you want to pull that money out, you don't have to pay taxes because you've already paid them.

Yeah, think about your take home pay. The government already took their cut. So I'm using my take home pay to fund this retirement account. And Uncle Sam says, all right, you paid us once. You don't have to pay us again.

Yes. Great. So if there's $2 million in a Roth 401k, that's like $2 million of net income. Yes. Because you're not paying tax on that.

And that's great, especially if we're talking about leaving that money to airs and things like that. That's also so, so important.

“You mentioned the match earlier, we asked him, do you have a match from your employer?”

We can talk about that, George. Yes. So that we say match beats Roth beats traditional for a very simple reason. Match is an instant return on your money. So at range to money.

For money. You know, a fine vest 4%. Ramsey's going to give me 4% to match that. So I just got 100% return right there. Yep.

Now some might say we do 50% up to a certain amount. So it might be different based on your employer, but many employers have a match.

So we always tell people take that first when you're ready to invest.

Then go to the Roth options because you're going to have that tax free growth. That's right. And then move on to traditional if you haven't hit that 15% market. And the last thing I'll say about this, Jay, this people message me and they go, I'm so confused. Is it 15% of my income or our income?

I say, but it doesn't matter. So Jayden Sam are investing. Jayden best 15% of her income. Sam invest 15% of his income. Yeah, how much of their household income are they investing?

15%. It's the same thing. Because people go, well, I'm doing 7 and a half. She's doing 7 and a half. No, no, no, no.

That's just 7 and a half total of the whole pie. No. So all the money together, 15% 15% of his, 15% of yours. Yeah. And again, if you don't have an employer sponsored plan or you don't have a Roth option,

you can always open a Roth IRA.

And that is just a non-employer retirement plan that anybody can open as long as they have earned income. Yes. Your 17 year old working at Burger King can open up a Roth IRA. That's right. And start investing there.

And the limit for this year is 7500 bucks.

“So that's why we said, if you fill that up and you still haven't it 15% of your household income,”

then go back to traditional options. And if you make too much, there's contribution limits for the Roth IRA. That's right. You can look into a backdoor Roth IRA, which sounds, you know, it's not that sneaky. It's a very legal loophole to where you just, you basically fund an after tax traditional IRA,

and then immediately convert it over to Roth. Yeah. I like that. And while we're here, let's just hit on what happens if you have a 401k connected to your job, you leave your job.

And now that 401k is sitting there. We had to call about that yesterday, George. Yes.

So we always tell people, you don't want to see that money.

Because if you do, you're going to have some taxes and penalties and fees attached to it.

Let's hit that real quick.

“Obviously, if you've invested this money, it's expected to be there until 59 and a half,”

which is like legal retirement age. So if you pull it out early, it's an early withdrawal. You're going to get hit with that penalty, plus 10% just for pulling that bad boy out. So what you want to look into is a direct roll over IRA. And what that means is the money is moving from your traditional 401k,

directly over to a traditional IRA. It seems the light of day. You want to keep the flavors the same. So if it's a Roth 401k, move it to a Roth IRA. Yes.

The wreck roll over is what you want.

Make sure that you've checked that box before you just send money to your bank account. And then go, oh my gosh, I didn't know what I just did. Yeah. That's a hard one to undo. All right.

So there was a lot of investing 101 in about four minutes. We did our best. All right. Mike is in Salt Lake City up next. What's going on, Mike?

Thanks for taking my call. Sure.

So I'm just finding myself in a situation here.

I've been taking the steps towards starting my own business, doing carpentry work, and other construction jobs for the last couple years. And we decided to purchase a home this spring and in our area about an hour from Salt Lake. It's, there's a lot of opportunity for me in construction. There's a lot of, not a lot of affordable homes.

So we bought a home on the edge of our budget. And we're paying about 3,800 a month for our mortgage. And I've calculated the rest of our expenses at about 3,000 after health insurance. And gas and everything like that. We currently have $15,000 in security's back to line of credit against my index funds that value.

You $105,000, otherwise we're that free. And I was curious also we have a baby coming in December here. All right. Just, yeah, just kind of seeing if you guys think it's the right time for me to jump into this business. And kind of just getting a little overwhelmed with our overhead right now.

I don't want to sell the house. I'm not ready to think about that. Just because we do have some runway. What's your take home pay? What's your take home pay every month?

My take home pay was about 70,000 a year before I left my before I started doing more of my own work. And now it ranges from about 1,500 a week.

“So seven, seven, seven, what's that $4,500 or $6,000 a month to about $10,000 a month ending on the month?”

And is your wife working outside the home? Does she plan on staying home after the babies here? What's the plan there? She does work outside of the home. She makes about 1200 by weekly, 2400 a month.

And it's about 30 minutes and I think between child care and the community and the opportunity to talk to her being able to be home to keep our expenses down. I think it's best that she doesn't work once the babies here because I don't think we're going to end up keeping much of her income after your child care. What does she think about that? She's back and forth. She loves her independence. She's also excited to take care of the babies. And I think we're kind of talking about, you know, let's look at three or four years of you staying home and then we can revisit that.

And are you telling me that you're currently self-employed with this business? I am currently self-employed with this business. I can just what do you mean jump into it?

“That's what I'm confused about too, what's that idea?”

So I can go back to my employer as a 1099 subcontractor and make my $70,000 per year. So you're saying do I do this? Is it a safety thing like do I do the safe thing of making the 70,000 with the employer or do I keep doing my thing making six to 10,000 a month, even though it's more risky? Do I have that right? That's kind of, that's kind of where I'm at, right?

What makes it more risky? Just the fact that I may not be able to find work for myself and that. Well, right now, based on what you said, if you make six grand in a month and it's just you, you can't cover your monthly expenses. So this house is too much of your income, even at 10 grand, it's still close to 40% of your take home pay on your best home. And so I don't know that this house is a good long-term option for you.

So that's the tactical numbers you need to crunch and figure out if you can sustainably make 12 grand a month, 13 grand a month with this business, I would consider it.

“But I would probably go get that full-time job again and do this on the side until you have a clear path to doing it on your own full-time.”

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It's super easy compare agent profiles you interview them and choose the right one to work with and you can do that at RamseySolution.com/Agent or click the link in the description if you're on YouTube or podcast. Sharon is in Houston, Texas up next. What's going on, Sharon?

Hi, good morning. How are you doing? I was, I was calling basically just to see so right now I owe 52,000 dollars, I mean my husband owe 52,000 dollars to my card that we got in August.

We have about $40,000 now I've been to count saved, we started saving pretty aggressively back in December and we're about to have a baby in July. My husband makes about $2,000 a month and I'm a travel nurse so sometimes I work sometimes I don't. But my question is should we get rate of my car payment or should we keep my car payment? Because my husband owes about $3,800 to his truck which we were planning to pay off within the next two weeks. About $3,000 to a furniture payment and about $13,000 to going in that we're paying on land.

But we want to know if we should eat if land property. We want to know if we should get rid of my car or if we should keep my car. I don't like my car. It was imported by my car. It's a $2,500 pilot.

I wouldn't say it was an imported by I actually rigged and told it out my grantee charity that was paid off in July and we were trying to carry it and get out of the rental.

And it ended up having a better interest rate than a used car. Wow. That's how they got you. It would give you a lower interest rate if you buy brand new on a $52,000 loan he said what a deal. I'll take it.

I mean, I can't tell you. Actually it was about $60,000. We paid it down but it still varies. That hurts my soul. What's the car worth today?

Uh, so we quartered it with carbon. I couldn't thought about selling it to them. It's about 43,000. That's how much they'll give us for it. Okay. So we still owe $50,000. Uh huh.

So okay. So we're upside down there not too much to scare me. I think we can get out of that. And I would by the way.

“If you want to get out of that, you guys have the cash.”

You can pay the $9,000, $10,000 difference. And even have a little bit left over to get yourself like buy yourself a cash car. Maybe $10,000 or $12 since you're trying to get out of debt. I know you've got a baby on the way. Uh, so hold that.

Hold everything that I'm telling you to decide. Uh, because I know you have a baby. Um, the way you would teach to get out of this debt is by snowballing it, listing it smallest to largest and paying minimum payments on everything in the mean time.

So I'd hypothetically knock that one out first with any extra money after paying the minimums.

Then I'd move on to the truck. Then I'd move on to the land and do it that way. Uh, however, there's a baby coming in July. So the, well, what we was talking about. Right.

Stork mode here on the baby steps where you can hit pause to stack up cash. Now you guys already have the cash stacked up. So that changes. Right. Right.

So now it's how much can we use to pay off the debt without putting us in jeopardy. To make sure we're okay when, you know, until baby and mom or home safe. And so Jay's right and that debt snowballing these, these bottom few. You could do that with less than 20 grand from your 40. Which frees up those payments and gets rid of those debts.

And then maybe pause until babies here and then decide what to do with the car.

“I think we really wanted to kind of get rid of the car because the car payment is 950.”

Oh, yeah. You know, then we can afford it. The question is, what car are you going to get on the other side of that? Well, we were planning for me to just drive my husband's truck because he drives.

He works pipeline and he is always in his work truck.

He's been in another state for four months. So you can live on, you can be a one car family for a while. Yeah, I could be able to give him this truck in about four months in another state. So I'll be honest with you. I would get out of that car right away because it knocks your debt in the debt snowball from 52,000 down to 9,000.

So then that order would be the furniture, the truck, the loan, the upside down difference. Although I guess you could do that in cash and then the land. Right. And I would also shop around to see how much you could get for that car. You may want to check car max, fuel local dealerships, private party to see if you can be less under water.

So I'm not eating as much of this. And then if you can live on that be a one car family for a while, you just free to put 1,000 bucks. Absolutely. These other debts will get paid off real fast because you're not having to dip into savings to get something for you to drive right away. Exactly.

Yeah, I like that plan.

“Now let's talk about the stock mode thing a little bit because you do want to consider that. You need to make sure that you've got a nice chunk of money sitting there.”

And I'm not mad at if you want to wait until the baby comes to do all of this because it makes you feel better. I'm not mad at that. A rule of thumb that I kind of have is I want to make sure that I have the out of pocket max saved. Like that's what I want to make sure I have just in case you stay in the hospital a little longer just in case there's any complication. God forbid that you have the money there because that's really the most that you're going to come out of pocket.

And then you might want to do some calculations on I don't know George Meals like that first couple weeks can be can be tough.

So just making sure that you've got a nice cushion of money there just in case is really, really important. And nobody's cooking for at least a month. So you got to factor that in. Hopefully there's a good meal training going on. Get on the old.

Yeah, the math Sharon says that if you paid off all of your debt today, the underwater amount plus the other debts. That's 29 grand out of your 40. So you'd still be left for the 11 grand plus another month or two to save out of your great income. So you guys might decide, hey, we can do this all right now and take the stress off. That's right.

So that when this baby arrives into this world, we are debt free. Wouldn't that feel good? Yeah, would feel good. So it's a risk tolerance thing because either way all the debts get paid off in the next, you know, in 50 days.

“Well, the question is, when do you want to do it based on your comfort level and all of the variables that we haven't even talked about?”

So I would sit down with your husband tonight and figure that out and decide a plan that works for you guys. But my guess is you could probably stack up another 10 grand before the babies here. Right. Yeah, because I'm actually traveling at the moment right now. Oh, great.

So based on the next couple of paychecks, think, okay, what are these next paychecks going to be until, you know, I, I head into the hospital have this baby. And if you can make it work, I love the idea of you guys becoming completely debt free and getting rid of this payment. Because next month, that 955 stays with you instead of going to Honda lending nice feeling. $1,000 car payment. That makes me want to throw up. Glad it's going to be out of your life.

All right, Jessica is in Detroit up next. What's going on, Jessica? Hi. My husband and I are on baby stuff too and plan to be moving into baby stuff for around this time next year. I own my own company and have learned that my business can contribute up to 25% on tax of my salary into a solo 401k. Yeah.

But yeah, I'd like to know where this fits into the baby stuff. And how do I know if I should prioritize that contribution over taking owners draws to pay down the mortgage on our home? I love this question. Okay, good. I'm unclear on the best way to categorize these revenues. I have to make the choice between funneling it through payroll and taking it as owners draws or making it employer contributions into my personal retirement.

That's what my husband and I did.

There's probably a limit on how many draws you can take and then the rest is payroll and you can get with your tax person or your bookkeeper on that. And yeah, it sucks because if you're taking more payroll than you want, right, just to to be able to pay off personal debt. So I would do that and then the 25% which is fabulous for that solo 401k that falls under baby step four that's you investing and so that's where that falls under now I wouldn't go over 15% until you've gotten through the baby steps and then yeah, if you wanted to go up to that full 25% limit you could.

But it all fits within the the parameters of the baby steps for a reason and it's because we want you to be paying off your house. So once you've gotten up to 15% you can do the rest through payroll.

I don't know if you worked from your home or not, but there's a certain amount that you can pull from the business to put towards your mortgage as well. So yeah, get with the tax professional get with your CPA and definitely do that. Yeah, so the key is it sounds great to invest right now, but we have some debt to clean up. So let's wait one year from now. You got your eye on the prize. You're going to be investing 15% there. Let's knock out the mortgage in a no time. You'll be investing that full 25% and you guys will be building some serious wealth of the rest of your life.

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“Welcome back to the Ramsey show and the FairWins credit union studio. I'm George Kamel here with J.D. Warsaw open phones at triple eight eight two five five two two five if you want to jump into the conversation about your life and your money.”

Jacob is in Springfield Illinois up next. Hey Jacob. Hey, how's it going? Great. How can we help today? Yeah, so my wife and I were based on just trying to figure out how to navigate rising costs and everything while still trying to put money aside for the future and for retirement, but also just other savings goals and just kind of figure out how can we navigate this while everything seems to be just keep rising out of control. Where do you feel like in your home? Where do you feel like you guys are feeling at the most is it groceries? Is it gas? Are you trying to buy a house? Like tell us the top three pain points that you feel like you're feeling it.

“Okay, so let's get into the nitty gritties. What do you guys do for a living or what do you earn?”

So I'm an insurance service and then I'm a wife. She's working working in a clinic. So we're basically combined. We're right about 110,000 dollars a year gross.

Okay, cool. And do you have any debt right now? The only debt we have is our mortgage and we have a small about $200 worth of pay off on our credit card. Okay, and that was just, and that was just to a monthly nine monthly, a couple of medical bills that we just wanted to split those payments not to earn our budget. How much do you have in savings right now for your emergency fund and anything else? So emergency fund we have about three or four months expenses for right about that $20,000 range. Okay.

It's about 1325. So I mean, it's pretty much right about that 21% or something. Yeah, excellent. So it's got to be child care then. How many kids do you guys have in what do you pay for child care every month?

So we just have one child. She's 18 months and we're paying right about that would be 13.

Yeah, 13 hundred months. I mean, that is definitely it. I mean, you're usually somewhere between 13 and 1500, especially for a younger baby. Are you guys investing 15% right now? We are not some putting money into a Roth IRA and then wife is putting out.

“I think it's about 5% of her paycheck into a 4 or 3. So I see how much into the 403? I think about 5% of her paycheck.”

Why can tell you? I mean, I'm looking at the biggest ticket items your mortgage daycare. That's eating up 2600. I'm guessing you're bringing home around 7100 a month. How much are you bringing home?

So after after taxes and after deductions like insurance and health care a lot of stuff, we're right about 6400 a month. Okay. So I still think there's something missing here. If you guys done a detailed budget to figure out where the rest of the money is going because even if you were spending a bunch on groceries and gas, there's still a couple grand ones to over. So yeah, actually, I mean, yeah, I was just doing the budget before we hopped on and I mean, looking to our paychecks, it's in our, I mean, it costs.

“I think it was about I want to say about a $150 or $80 per pay period for health care for, because it's under, because mine's by myself and then.”

Life covers yourself and our daughter. So yours doesn't come down. Okay. So hers is coming out of the pay. So that's the 6400 a month. That already covered hers and then yours is another 300 a month. Is that what you're telling me? So no, for my health care, it's like I want to say about $150 a month. Oh, okay. So that's, that's not the problem either. Here's what I, this is what I think I think you guys don't have a detailed budget. And I think, and this is no implication. This is no judgment. I think you guys have a young baby. I think you've come off of, you know, when you have your first child to major life change, you're doing a lot of things out of convenience, you're doing a lot of things out of learning what a new life rhythm feels like.

And my guess is there's just a lot of spending that is.

Can be cleaned up. And I'm not saying that some of it hasn't been necessary. You have a new baby. So you buy new gadgets and new things and convenience is to make life easier. You pick up dinner more often. Those sorts of things and my guess is that if we give you every dollar and you really use your bank statements to kind of do what I would recommend is do last month's budget. Go look at your bank statement and plug it all in and you're going to go, oh crap. You're going to see how much in the red you were and then do this month's budget.

And in real time start making those adjustments. And I think George that they're going to find a couple of thousand dollars. You'll see I might based on my estimation there should be like two grand left over and so the last question is what do you actually saving for because you're saying to have a hard time continuing to save. Is that for the emergency fund? Is that investing? Is that trying to pay off the mortgage? What is the goal? So we have to do use every dollar you're talking to the nerd. So yeah. Well what do you think is going on there if you see the learn on it or tell us how much is actually left over when you do your every dollar budget. What's the margin right now?

So right now it's about, I mean, grand last month was rough just because we had five weeks to pay for and daycare. Yeah, but I don't get you. It's right about it's right about 800 a month. So our savings goals we have we have to just got we have a kind of a home improvements.

“So that's what we have. We have emergency fund. I'm just basically just trying to keep opposite couple like a 100 or so here there.”

But the other two big thing that we're trying to focus on is the saving for a new car to try to pay that and cash. And you have sinking funds for all those things. There's a sinking fund for saving sinking. Okay, so that's where the money's going which in that.

So we have that. So we, we can, so we can show you to those, so he funds at the end of the month when we after we see where our margins at.

So for new, so for the car. A vacation fund that we just have kind of to keep as like a safety net for if we want to do a vacation next year or so. I think that's great. Jacob, I think what you're doing is exactly right.

“The only thing that I would tweak in what you said is I wouldn't wait till the end of the month to decide that I would plan that when the month begins because the money you have is the money you have.”

You're both. It sounds like on salary. So if you know we are taking home 6400.

Make the plan on purpose. This is how much we're spending. This is how much we're putting in the vacation.

This is how much we're putting in the car. Do it at the beginning because if you don't, you'll let yourself go over on door dash. You'll let yourself go over on, you know, some of the frivolous things and then just say, well, that's okay. We're just not going to put as much in the car fund. Be intentional about that. It's your money. You get to decide. And if you want it to feel like you have more going to those categories, make the necessary adjustments. [Music] As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business.

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“Sarah is in Sarah Sota, up next, what's going on Sarah?”

Hi, thank you so much for taking my call. So I had a question, can we bought our home in 2022? We bought it for $535,000. And there's a lot of equity in it now. We think it's worth about $750. And I should be coming into a settlement in the next six months. I just talked to my attorney today, and I think I'm going to be receiving about $250,000.

And my husband really wants to sell our home, take the equity and the money from the settlement, and buy a home outright. So we don't have a mortgage, and we just have a little bit more freedom in our budget. But to be honest, it doesn't really buy a lot of house around here anymore. And I like our neighborhood, and we are kind of tight, months, months, and I was thinking maybe we'd take the $200,000. We have kind of a smaller emergency fund.

So I was thinking that we put $50,000 in our emergency fund in 200 down on our mortgage, which we have $397,000 left on it. So I was thinking about doing that, but I wanted to get from you guys what you thought was a better idea.

“Cool, so you guys, do you have any debt right now outside of that mortgage?”

No. Okay, so you're thinking, hey, let's stay in the house. Let's use 200 grand to throw it with the $397. That brings it down to about 200,000 in a mortgage, and then would you do a re-cast to get the payment lower? That was going to be my other question. Do we do that? Or we just kind of continue to wait, not going to try to pay it down faster, or we do a re-cast?

Well, what's your current mortgage payment now? It's $3600, including the H-O-A and the SNA and insurance taxes and everything. I think the actual mortgage is only like $2,500, but I mean, we live in a plan, you know, a H-O-A community. And there's also questions that probably is going to go up over time.

And I think our taxes should remain stable because our home is that it.

Yeah, what's your take away every month? I think it's around $93, $100 a month, but that's kind of variable. We made $26,000 last year, but my husband got a bonus, and I got a bunch of commission. But we can work guaranteed $93, $100 a month, but I made about an extra $30 last year and couldn't go on.

“I'm going to say, making over 200, you should be bringing more home.”

So I would look into cash, because I'm going to make $3600 all in for your house, your housing payments for all the H-O-A's and things. That's a lot of your take home pay right now. So you are feeling the pinch, but with the recast, it could lower it, which would help. But again, if you can just keep paying what you're paying and not pay for the recast, you'd be fine to just keep knocking through that mortgage.

And if you guys did that, you'd probably be done with this thing and what?

Maybe two or three years? So mortgage? Yeah, could you do that? I think that would be a little bit hard for us, so we have one child still in daycare. That's a mortgage payment right there for sure.

Yeah, it is, and I also, we have quite a bit of medical expenses, so I just went through kind of a really hard challenging time health wise.

“And the treatment that I'm doing right now is not covered by insurance, and I'm planning about $100 a month at that.”

That could be another reason why the recast is good for you, because obviously, for anybody listening, when you do a recast, you're throwing the lump sum at the mortgage. And it's just recast at that new principle to mount, it doesn't change the terms, it doesn't change the length of the loan, but your payment is going to be lower. Everything stays the same, but the payments now calculate out on the new balance. The new balance, and yeah, so your payment would be lower, and that would free up a lot of margin, especially if you're saying you've got medical things to pay for.

There could be something there, but I do, I would caution on this because it doesn't change the length of the loan. You do want to find ways to be more intentional about paying it off, since it is a lower monthly balance. Monthly payment. Yeah. So that's where I'm going to ask you guys make 200, and you can live off of, let's say, 80 to 100, and throw the rest of the mortgage.

That's where I'm going, hey, you could pay this off in three years, but if you're saying there's a lot of other expenses right now, that's okay. You guys are in a tough season. I mean, you got one in child care, you're dealing with the health issues, I would focus on that right now. There's no urgency to knock out this mortgage as far, you know, nothing's on fire here. You guys are doing great. So I would take care of you right now, and when the time is right, you do this move and bring in that mortgage payment down, we'll give you some breathing room for sure.

But I would downsize into a house that you guys hate just just to be mortgage free. No, I wouldn't do that either, because you're not going to enjoy it. Want to live like no one else. You think we can find a place that we can be happy and like we don't have a pool, we could afford a pool and some of these different areas a little bit more land. We'd be closer to schools, also the schools that we're known for are like really far away from middle school high school.

So I think he's thinking long term and and I get I get all the reasons why, but I mean, friend of the neighborhood for years now, and I really we have a big beautiful hall that we have a lot of equity in and we're very lucky.

I mean, I think to get in when we into the neighborhood when we did, I mean, new house here construction with everything we have would probably be close to a million dollars.

So I feel like it was a really good investment and I want to stay here, but things are really tight. So the other day, it just came up, he wanted to do some more sports activities for my son over the summer and it was going to be $400. Like we had just paid like for a camp, we found like a county camp that was very reasonable in price. We had just paid for that and a bunch of other expenses. And he's like, I think the things are so tight all the time. It's a valuable question.

It's a valuable question. It's a valuable question.

“Of what's important to us and what are we actually going to put in the budget?”

And that should be a reflection of of the life you guys want. And because you are talking about a mortgage, you do need to look long term because you don't want to make a short term decision. And change a long term asset like like a mortgage. So you need to be thinking through, okay, the sports thing is that just for this summer. How many summers do we see them wanting to participate in things like that?

And really think through how long certain variables are actually going to be part of the equation. And just have some really intentional time set aside to dig through this before you make a major choice, I would say. Thanks for the call. Yeah. Appreciate that, Sarah.

Good luck with this and the health issues, especially. Yeah. Kyle's up next in Louisville, Kentucky. What's going on, Kyle? Hey there.

Thanks for taking my call.

My wife, 43.

“We have three kids daughter that's 15, a 14 year old boy that has profound autism.”

And we have a 10 year old boy.

My question is whether I should keep a survivorship policy that I have in place that the sole beneficiary is a special needs trust that we set up for our son. Who's likely to to be with my wife and I, you know, for his lifetime. So I know that Dave is not a big fan of a lot of these universal life policies, but wanted to get your all thoughts on how I should think about that from a special needs. How much is that? What's the premium on that?

The premium is only about 1,300 a year. It definitely not anything that's, you know, breaking the bank. You know, it's something that we plan for every year. The death benefit would be $500,000 in the event that both me and my wife died. And that would go straight to the special needs trust.

That's correct. And in addition to that, you know, I have a term life policy that is about 10 times my base salary, my wife is a state home mom. And we also have a term life policy on her as well. Okay. Okay.

That's good.

“Is there anything else in the special needs trust besides those three pieces?”

No, not currently. And the term life policies don't pay to the trust immediately. You know, that would go to my wife or if she could pass away, that would go to me. And then would likely go to our other kids. The trust is there to fund, you know, any trustee or any caregiver that might take on, you know, our son.

Yeah. I mean, if you guys are debt free, you're investing well, 1,300 bucks a year is a small price to pay for some peace of mind right now.

And if you want a second opinion, I would definitely get with an estate planning attorney, a smart vester pro at ramsyslution.com.

Because special needs trust and having a special needs child, you want to make sure that all the eyes are done and the tease are crossed to take care of them. If something were to happen, you guys. So you're doing a great job, man. I can't imagine what you guys are dealing with three three kids and the special needs kid. That's a lot to manage at your age and your mid 40's trying to hold down the fort. Keep it up.

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Alrighty. Today's question comes from Hudson in Utah. It says, I am 17 years old. And I run a music marketing business using Spotify playlists. I've been running this business for just about a year and a half now.

I've heard several deals worth up to 25,000 and have gotten to work with very large artists. My parents are hard set on me going to college. But they are not paying for it. So all tuition and expenses would be on me. I have about 30,000 in the bank.

A car worth 15,000, which I bought with cash in zero debt. Do I go to college and pursue a business or finance degree?

Man, I just love this question because it really does. I like things towards that kind of like butt up against norms and like allow you to do your own thing.

“Because there is no rule that says, when you leave high school, you must go to college.”

There is no rule that says that. And I know a lot of parents probably hate me saying that, especially if they're children are listening.

But it's true. That's not always the smartest path.

And so if we have three choose your own adventures here, go immediately to college, which is very easy George for somebody to say go spend your money on this. They're not the ones paying for it. He doesn't, I mean, he's got 30,000, but he maybe doesn't want to spend his money that way. He's doing something entrepreneurial. That's doing well for himself right now.

I like that. And so my thought here, I'm just going to, and I want to hear your opinion to George. Ruffles some feathers. My opinion is college is always going to be there. It's always going to be there.

And I know there is something to like momentum. Like when you're, you don't want to just take a gap. You're not know anything, right? But this guy, he's got a clear path. It's like, okay, there's momentum going on one direction.

Follow the momentum. Your entrepreneurial business on Spotify is taking off. I love you doing it. If for some reason it putters out and you find yourself like, okay, the reason it's Puttering out is because I just don't have the information or skills I need to grow it.

“Well, then you might look at, okay, what are some of the things I need to learn?”

Is it a university path? Is it a certification path? Do I need to go shadow and, you know, do some sort of internship path? So many options there. George, what say you?

Well, as a guy who took a gap here. I went to school for a year, took a gap here, pursued music. Love that. Isn't a band worked at the Apple store. Everything you think about me looking at me is true.

So I would never tell them not to do that.

I mean, here's the funny thing. People send their kids to colleges with prestigious music programs. Hoping one day they'll start a business like Hudson did at 17. Yes. And just not to be whatever.

But the school is already behind. The education is already behind. Your professor does not know what Spotify is most likely. So I would go, hey, I'm going to pursue this. I'm going to see where it leads and worst case.

If you go mad, I am at a wall. I hit a wall. I don't know where to go from here. I think a business degree would help or a finance degree would help. Then go for it.

But do it because you're passionate about it and not because mom and dad told you to. I don't think that college is a place to search for what you want to do. I don't.

“I don't think you should search for anything else.”

For most parents, it's just the safe place to find that.

And so they go, well, I'd rather my kid there than out in the real world. Okay, and for every semester and every change of major and every change of. I just think that we can be more efficient. A hundred percent. I know.

If you want to kid to be cultured, send them to Europe for a year instead of the college. I can tell you. That would be cheaper. And I'll have a better time and come back a different person. I agree with that wholeheartedly, George, as a person who worked on ships right out of college.

Traveling the world will do more for you than a lot of a lot of things. I'll tell you that. I love it. Way to go, Houston. Yeah, I'm proud of you, man.

I mean, I don't want your parents mad at me. They're already mad at you, but. I'd say mom and dad unless you're foot in the bill. Yeah. I'm going to just pursue this business.

And let's add this. Maybe he has to move out at 18 because of it because mom and dad have won. Some attention. That's okay, too. And you can afford it if this business keeps out.

Way to go. Jason is in Chicago up next. What's going on, Jason? Hey, how you doing? Great.

What's your question today? Oh, so I have a 2026 honor and it's 25,000 left on the vehicle. I have 203,000. I'm close. I was wondering, I'll get paranoid when I don't want to pay off right away.

Do then I have nothing in my bank. Would you recommend just paying off right away? Or, I mean, I could build it back up pretty quickly. What's your payment? It's 532.

And what's your next paycheck? What's my next paycheck? Yeah. 21, 22. Okay, so we're talking two paychecks from now.

You'd have enough to pay off the car and still have a thousand bucks left over in savings? Yeah. And you'll be freed up of that 532 for the rest of your life. So how quickly could you save it back with 532 extra in your pocket every month? Oh, I could probably give it like a couple of months.

I'd be in a decent spot. I think you have your answer. Because what I do is I split my check and half. Half of it goes a savings half of it goes to bills and go from there. Okay, so 50% of your take home pay is going to that savings account that has 23 in it?

Yep. Way to go. I mean, if you keep that up once you're dead for you, you're going to be right as rain my friend.

I mean, if you look at our baby steps, baby step one is a thousand dollar starter emergency fund.

“Which means if you have more than that, it's going to go towards baby step two, which is pay off all of your consumer debt.”

So is this all of the debt to your name? Is this $25,000 car loan? Yep. Man, I would pay it off and not look back. But again, don't do it until you have that thousand dollar buffer on top of the money to pay it off.

Yeah. So we're talking about a month from now. Roughly. That's it. All right.

I would not be scared, my friend. And if listen, if you have an emergency come up, you hit pause and you cover the emergency and then you hit play and move forward again. Awesome. Are you a single guy? Young guy?

I'm not single. But yeah. Is your wife working outside the home? Uh, yes. Okay.

So we have two incomes on top of this. Yes.

“What do you guys bring in home every year or every month?”

Uh, probably she's bring a month. I don't, I mean, she like girlfriend. Oh, well, that's a different story. Okay. Fifth star.

Yeah. Then it doesn't, then the advice stands. It's not concerned. Not her business. It's cute.

Appreciate that, Jason. That's a fun one. That is. I want to talk about the the car loan epidemic. Jake's.

I just saw the headlines that they've now surpassed student loans. A national debt. Oh, boy. That's one point six eight trillion dollars. Oh, wow.

That is surpassed in auto loan debt. The average payment is now $750 for a new car. That's painful. And in the high five hundreds for a used car. Yes.

And it just shocks me that people are still out here buying a brand new car, which depreciates 10%. Mm-hmm. The moment you drive it off the lot. Yeah.

60% within the first five years.

Yeah. On average. While you pay interest. And it goes down a value. I think the most compelling argument here is when you synthesize the data out there on car payments,

who has car payments, you can derive that of working adults, like adults that are of working age. Over 50% of them have car payments. Then when you stack that up against to the percentage of people who are living paycheck to paycheck. And then when you stack that up against the amount of people who feel like I won't be prepared for retirement or I don't have enough money in retirement, then numbers are so close that you go,

"Oh, it really is true that the car payment is keeping middle-class broke and unable to cross over that line to wealth." Mm-hmm. Well, it's very interesting. And then the hardest part is we can justify it. I mean, you talk to the callers.

They got brand new cars. And I go, "Why do you need a brand new car? Well, safety and reliability." I go, "Okay, so two years from now, you've got a used car. Is it still safe and reliable?" Yeah.

Yeah. Yeah. It is.

“And the truth is, new cars, you know, if you look at all the technology and things”

that can go wrong, they're not as reliable. Some of these used cars without all the bells and whistles are actually safer in a lot of ways. And less prone to eating all these reports. Yeah. What I do is research the make model year for known issues that come up with this car.

Don't buy one. Oh, it's got the CV transmission issue and that Nissan. Great. Let's avoid that specific model for those years and find something we can buy in cash. Until we can upgrade in cash.

If you stare step at that way, you are guaranteed to build wealth. Great. Set a trading and one payment for another.

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Yes.

I apply that to insurance.

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For circle. Marie. Marie's in San Jose, up next. What's going on Marie? Hi.

So two years ago, I went to the emergency room because of a cold. And I'm not from this country. I had no idea how high deductible worked. I had insurance at the time. And while I was there, I signed up a paper that the amount would be around 720 dollars.

And I was hit with the bill of $4,700. And the insurance paid $1,700. And I still have a $3,000 bill to pay. I think that's those treasures. And I really don't want to pay this bill.

I didn't pay. So you went to collections. And the collections company sent me a bill with the same amount. But with my name wrong in it. I was wondering if I can skip this payment.

“Okay. So when you went to the hospital, did you stay over?”

Or was it just a quick ER visit? Tell us, did you think that you were just going into an urgent care? Tell us what happened. Did you stay over? No, I didn't.

It was a few hours. There was a lot of people. There were a lot of people in there. Was it the emergency room? I took a pill and like a like a not bill.

Like they did me a not bill and that was the whole treatment. You know, it was a short time. I mean, it could be faster. You know, for what he was, it took a long time. But it was a cold that had a cold.

Did you get an item? Did you get them to print you out a statement of each line by line item? So I called them and I complained about the price because I couldn't believe when I saw the price. And I asked for a night of my and they didn't send me the item.

Did they never send me the item?

Hmm. I would if I mean, your shoes send a written dispute to the collection agency and to the original hospital. I can tell you this. I don't think you're going to get out of it because of a typo of your name. No.

The debt is yours. You can get a debt validation letter. You know, you can send them that. But they're going to validate it. Go up.

There's a typo in your name. But the debt is yours. I'm surprised for if you saw the portion that the insurance paid, but you couldn't see. See the information. Do you see what I'm saying?

I would keep fighting for that. I'm like, let me know. Show how it is. How old is this debt? Three years.

Oh, wow. Yikes. Well, you can still try to get all that information. And at this point, they're going to be willing to settle. Do you have any money?

I do. I do, yeah. Okay. So this is more out of principle. You're just angry at the American healthcare system.

I'm just a little late. Join the club. You can probably settle this for a quarter of the amount and be done with it.

“Do you think a quarter of the original amount that they asked that I find for it?”

Because they told me I would go to the bill 700 dollars. I mean, you can sell it. Talk to the collection company and say, listen, I was told it'd be 700. I've got that. That's all I have.

If you'll take that as paid and full in writing and don't give them access to your checking account, then you call it good. And see what they say. They might go now. We can't do 700.

We can do a thousand. It's probably worth it for you to not deal with the hassle at this point. And just go, all right, I'm angry, but you've been angry for three years now. Yeah. So I want you to just be free of this.

And when you settle it, just know because I've had to do this. You might have to call several times to get somebody with a brain who will actually know the policy that they can settle it.

The first three people might say, we can't settle this.

You owe $3,000. Just hang up and call the next person until you get somebody with some persistence. Brain cells. And have you talked to the insurance company to understand why they didn't cover more or what your actual insurance was? I didn't call the insurance company what I understood is that I had a high deductible.

And I at this point I had no idea at that point. I had no idea how this worked. I had no idea of this camp that insurance is far in this country. So I, yeah, I didn't actually really didn't understand. I couldn't believe I thought I was going to have to pay the whole thing.

They, what, these are something else. If you 700 dumped to 4700. Sure. Yeah, that is the confusing part. That's the part I would at least get the info on.

And through the itemized bill and some of the validation of this debt. And I would be talking to everybody. I'd be going to the insurance company to the hospital to the collection agency. Mm-hmm. And really get to the bottom of this before you ask for that settlement.

Just, so, you know, the type of in my name is not really just a type of, it's like a whole name.

and then they put my last name. So do you think there's a confusion of accounts?

“Do you genuinely think they have your account confused with someone else?”

You know, it is possible.

Yeah, I, and now that you, I never thought about it.

But now that you say that, I mean, it could be, it could be. That's where a sending that debt validation letter would really help. So, hey, this isn't even my debt. This is my name. I don't know.

I didn't get these services, and so that's the part you can fight. And I would. But again, it's been three years. And so, there, you might be limited in your options because of the, the age of this. So worst case, if you fought the good fight, I would just try to settle if it really is your debt.

And if not, keep fighting Marie. Good luck. Yeah, it's connected to your social security number. Yeah, that's a good call. And pull your credit report and see what pulls up on there.

Because if it's not your credit report, you got to wonder. You got to wonder. Is it really your debt? Listen, two Maria's could have come in on the same night with similar last names and similar symptoms. Well, it's funny, as we just took a call from Marie, and now we've got Maria.

Maria, was it your debt? Hey, are you with us? I think you're calling on me. I am here. Yeah, how are you doing?

I'm well. Thank you, Hario. Good. What's your question today? Um, so I have a subtle debate question.

My husband and I are on baby set too. And we are debating whether or not to pay off kind of like our fifth or sixth loan amount debt to free up a huge monthly payment. Oh, tell us more.

“How much would you be paying off if you jumped the line and paid off the fifth smallest debt?”

What's the amount in the debt and what's the monthly amount? It's 3,591 and 7 and the monthly payment is 4705. Okay, and what's the smallest debt right now? How much is it total and what's the monthly payment? It is 2,000 total and there's no monthly payment because it was a fund from church that went money to help pay for a car repair.

Oh, listen. I don't want that paid for that. Yes.

Like, aside from the rules for a second, I would 100% pay the rent.

That's a relationship tied to that. Right. How much money do you guys have right now to pay if you threw money at debt? Right, it's about 4 to 6,000. I was pregnant, so we were like bank rolling and then several things went wrong. We all three ended up in the hospital, so we have money to throw at debt, but we're waiting.

And we're kind of like holding my husband just started working again and we're still waiting for the financial assistance application to be answered, to find out like how much of it is starting and then like charitable right at all. Yeah, what you're going to do. Okay, so let's imagine perfect world. We'll call it good for a grand, want to make sure we have it.

Yeah, so let's say you have five grand to throw at your debts.

“You did the debts snowball. How many debts would that knock out?”

So that would be 1, 2, it would get into 3, which is the $2,000. Yeah, it would be 1 for $2,000, 1 for $2,000 for teen, which is the credit card. And then 1 for $2,800, which is the past few bill and also doesn't have a monthly minimum. Okay, I still like that that snowball option because you're going to be up against that one soon enough, the 3591. If it was like $1,200 or something, it might be worth it if you have the lump sum.

But I think either way, if you map this out on paper, you're probably going to get to the same destination in a similar amount of time. Yeah, and because this particular loan goes down by 4705 per month, so we've been having this conversation for many, many, many months. Yeah, and at this point, it's gone from like 10 grand or 8 grand. I mean, I can tell you this. I can tell you this, Maria. I do care about relationships when you owe people money, and I do care about knocking those out fast.

I think there's worse things you could do than to pay the 3500 first, but I'm a person who I like following the rules.

I think when you set a standard to follow a process, you will follow it. Welcome back to the Ramsey Show and the Fair Wins Credit Union Studio. I'm George Campbell, joined by Jade Warshaw this hour, taking your calls at Triple 8-825-5225.

Thank you for having me.

Absolutely. How can we help today?

I'm wondering if I should pursue public service loan forgiveness, or if I should try to pay off my student loans. What are you doing for work? I work at a university. What kind of role? I'm a pharmacist.

What are you making? 115,000 a year, starting when my job serves next month. How much student loan debt do you have? 164,000. The term on that is this idea that if I follow the payment structure that they put in place,

sometimes there's other things attached to it, then after a while, these loans can be forgiven. The only problem that I have with this, I would love for everybody to have some form of pay out on something. Oh, you didn't have to pay the debt, that's great. The problem with this is the success rate is so very low. We're talking one percent to five percent of people even have their loans forgiven.

That is just terrible. That is just a terrible success rate.

What a horrible idea to pour a decade of time into something and never see it.

Never come to fruition when if you applied the full force of your income, that's only going to go up from 115,000 to paying off 164,000 as a single person with no kids. Do you see what I'm saying?

“I think that you could pay this off in more than half the time.”

Don't you? Of waiting around for the forgiveness? Yeah, do you know why the success rate is so low? There's a lot of reasons, so a lot of it is paperwork being filed and completely incompetent government is the headline. Yes, incompetent government, whoever's working and checking things behind the scenes, there's just so much of it that you might not even be able to control here.

And so that's, we're talking like problems. And I don't know if you've seen even with this administration, there are already starting to change the rules of what qualify, what employers can and can't qualify. And so because of that, it just scares me for you to sign up for a 10 year clock, make all of these payments, minimum payments, while interest accrues and then still possibly be on the hook. While locking yourself into a certain job or a certain type of employer, when you could go make more in the private sector.

I mean, what if you went to go work for a big private sector company making double? Yeah, that would be really difficult given my job. That's very much has to work at the university, but I hear what you're saying. So, I right now I make 50,000 a year, like I said, next month I'm transitioning jobs. I'll be making one 15 year.

How do I then allocate, like, what should my percentage of my income, what should I be saving and what should I be putting towards the phone? Well, let me clarify something first, are you working for the university because they're qualified employer for the public service loan forgiveness?

No, I work in academia, I do research and stuff, so I pretty much will always have to work for university.

Because you're on the research side of things. Just double checking that.

“Okay, so your question was how much will you have to put towards this to pay it off?”

Yeah. Okay, well, let's look at, let's look at some real numbers to get this a fair timeline for you. So, where are you living right now? Like, what are you, what are you bringing home and what are you paying for rent? Um, I pay $18,000 in rent, and then that will be against the $15,000 income. Okay, and you haven't received the income, right? That's not until next month. Correct, next month is when I start that income.

Okay, so let's pretend you'll be bringing it in around 70, 200 a month. I think that's a fair place to start taxes considered. Okay, so $18,000 in rent, what other expenses have you taken into account that maybe we should think about? Um, and then I have pets, so obviously like, students, groceries, but I don't have any car payment. I know other stuff. Yeah, you know, other credit cards will be like that.

Good. I mean, the napkin math is telling me you could probably knock this out in four and a half to five years. Yeah.

“If you're bringing home seven, and you can throw three at the dead every month, which I think--”

And live all four, that's very reasonable. And so the key is, this is all we're doing, is we're focused on this debt, and we're not, you know,

So this short sacrificial time is going to free you up for the rest of your life.

So how old are you today? Twenty-six. Love it.

“Can you imagine by 30 years old you're completely debt-free, making mid-six figures from the world?”

That's the dream for most people. And so what I don't want is for you to now be 36 and go, oh my gosh, this whole thing fell apart, and now I'm still on the hook, now you're really frustrated. So much for that. I like to feel like I'm in control of my life. And I'm not mad at people who got the public student loan forgiveness.

But the thing is, it was also created for the person making $38,000, who is going to have a real hard time climbing out of it.

And so in your situation with as much as you make, it's a very solvable problem for you to just knock this debt out, making 115 plus. Okay, thank you very much. I appreciate the encouragement. I feel still better about this. Yeah, and if you look at that timeline and you don't like it, you still feel like it's too long. That's another place where you can take matters into your own hands and say, okay, maybe I'm working overtime,

maybe I'm picking up side hustles, maybe I'm getting a roommate, all of these things that are going to add to your income and add to the amount that you can throw up this debt every single month, the more the merrier.

“I like this plan. All right, Laura's in New Orleans up next. What's going on, Laura?”

Hi, how are y'all today? Doing great. My question is this, I am just about 62 years old. I just do to my past, not making the financial decisions and being married at the time and no longer married. I have about 119,000 in debt that I accrued and took over from my divorce.

And in retirement, only have 329,000. Okay, that's 190. I am. Some, I had a SBA loan where I used that, most of that was the payoff debt that we had had from a marriage. And due to some real estate difficulties.

And so got it, was able to get a loan to pay off some of that debt, most of all that debt, and at a lower interest rate. So, the other debt is my car. I have a $550 a month, car note for a car. I owe about 28,000 on that. Hey, Laura, hang on the line.

I'm going to carry you over into this next segment, because I want to break this down with you and give you some hope that you can still retire with dignity. Even at 62 with a bunch of debt, not enough in retirement. Let's walk you through a plan where you leave feeling confident. So, hang on the line. We'll be right back to explore that situation.

[Music]

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best.

If you're ready to learn how to make your money work for you, check out the smart vester program. Smart vester can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals your pro will take the time to explain your options. So, you never have to invest in anything you don't understand. Head to RamseySolutions.com/smartvester, the get-connected.

RamseySolutions is a paid non-client promoter of participating pros, learn more at RamseySolutions.com/smartvester. [Music] All right, we're going to be joined by Laura. Before the break, we were talking to her. She's 62 as $190,000 in debt.

She's got $329,000 in retirement.

“Let's see if we can help her out. Laura, are you still with us?”

Yes, I am. Okay, so you were breaking down your debts for us. You got a car loan. It's $550 a month. You have this SBA loan. Any other debts in that $190?

Uh, I have a boat loan that is about $40,000. And I'm with a person, so it's my boat and another friend of mine that we are trying to sell.

It's under my name.

Okay, just your name, that's good.

Do you have any money saved besides retirement? Not really, not anything to speak of. Tell us the amount, because it's something. It's not really $5,000. Okay, great. $5,000 saved.

“And what do you bring in every month for work from work?”

Um, I make about 32,000 a month gross. Okay, good. Great. That helped the situation. Greatly. Now, how much do you actually have left over?

If you went real serious, I'm going to cut all my expenses. I'm selling the car, selling the boat. How much could you realistically throw at this debt? About 22, and then you've got a bunch of debt payments? Right.

Yes, so I could probably, that's probably about, I'd say, with all my expenses About 10,000, that's, with expenses. Okay, so you've got about 12 left over. Yes.

So you could throw at these debts.

That's great. And what's the car worth if you sold it and what's the loan on it? About 28, I've only had it probably a year and a half. So it's probably, at least, break even if not, maybe sell the 30. Okay, and then the boat, what does that worth?

The boat, um, I would probably, it probably is about 120, maybe 140,000, and I owe 90 on it. Oh, I think you said 40 is owed on the boat. Okay, so you owe 90, but it's worth 140. That's a nice boat.

Yes. Okay, and you figured you could get 140 because that could clear a whole lot and give you some profit back to knock out. You could knock out the car and keep it if you wanted to. Mm-hmm.

Right. And then the SBA loan is a giant one, right? That just won big debt. Right. And couldn't you throw 10 or 12,000 a month at that?

And knock that out and almost--

“Well, that's what I'm talking to you last in two years.”

Because I really want to get rid of that. Right now, I've been putting about 5500 into my retirement. Mm-hmm. And so I don't know if I should put less into that and pay more to the debt. Yes.

I would stop those contributions altogether and put it all towards it. Because if you said 10 to 12, if you could bump that up to 15 by really cutting back your lifestyle, I mean, gosh, you could knock that out so quickly. And then you could put that same amount into retirement. Right.

Because it's the SBA loan like 70 grand. It's-- Well, 95 grand. I thought I heard you say 190,000. Did I get something wrong?

That-- Well, that's what the boat-- Oh, that's everything together. Okay, great. And better.

Okay. So think about it this way. If you just had the SBA loan of 90 grand and you threw 15 at it a month, you'd be done in six months. Perfect.

So think about that. You sell the boat. You could profit. You're telling me 50 grand.

“Which would knock out the car completely and still leave you with another 20 grand”

to throw the SBA loan. Now we're down to 70 grand, right? Correct. So four and a half months. You throw 15 at that SBA loan and four and a half months.

You're completely debt-free if you pause retirement. So what we're talking about is not pausing retirement forever. We're talking four and a half months. You pause retirement. Get to a place where you have some financial foundation.

No debt. Get yourself an emergency fund. And then think about how much you could sock away in your investments. If you had no debt, make a 32 grand a month. Okay.

So this is- You're going to be just five. You're going to be just five. Because it's been okay. And it's having only to three 29 in my retirement.

Well, if you turn around and if you do it, George said. And then you take the 10,000 that you were throwing at the debt. Even just 10,000 of it and you put that away every month. If you put 17 away every month into investments, that's 200 grand a year. That's crazy.

That's just your contribution. That's not even the compound growth over the next 10 or 20 years. So, Laura, I'm telling you, if you get focused and you follow these baby steps, knock out consumer debt, that's it. It's all you're doing.

Get the emergency fund of three six months in place. That's all you're doing. Then baby set four is 15% of your income. And if you don't have a mortgage, you're completely debt-free. Then you can bump that up to 25, 30, 40, 50% of your income to catch back up on retirement.

So, very solvable problem because of your amazing income.

Get focused and call us back when your debt-free. We'll celebrate with you. Michael is up next and still water Oklahoma. What's going on, Michael? Oh, just working away.

I feel you. How can we help today? So, a few months ago, my wife and I started to get a house bill. And so, we just signed a contract a little over a month ago to start that process and they started on it.

is when we'll have to get our traditional mortgage and we'll need to

downpaying when at that time.

“And then a few weeks ago, she got diagnosed with cancer.”

And we're going to have to amputate her white leg. And she's not going to be able to work for six months give or take. So, that takes away a large majority of our income. And I don't know how we're going to be. As far as monthly bills, my jobs should be able to hopefully sustain everything.

But I don't see how we're going to have money for a downpayment now. And then the other thing is, our house won't actually be complete either because in that loan, I told them not to worry about drilling well for a water. I was going to pay for it out of pocket. And then not to worry about running electricity because I've got a friend

who's in the electrician and I was going to pay for that out of pocket and get a deal. But now I don't know the well would have been about 10,000 electric to a couple thousand. And then about 60,000 for the house downpayment. Which we, I don't see how we're going to be able to make that work now. Yeah, how much debt are you currently in?

About 50,000. Is that the construction loan? No, no, that is a sumer debt. And student loans and a tractor. Okay.

What are you in for the construction loan so far? The total cost at the end will be $340,000. That'll be the total cost. Okay. And where are we at this process?

You said you're under contract.

“Is there a way you can negotiate a stop with the builder on this?”

I'm not that I'm aware of.

I talked to them a little bit and they basically told me we're screwed.

So they they gave me when we started the process. They gave us a backup plan, which is very possible. I guess at this point. And it is a the full loan mortgage at the 30 year mortgage at a 10% interest rate. How much?

Just sounds absolutely terrible to me. And what was the down payment they needed from you? What I was going to do is go through another company or the mortgage we wanted to do like a 15 or mortgage. Okay. And now we're kind of out of options from what I can see.

I really don't want to spend.

You know, a million dollars on this house after interest and stuff.

Yeah, I mean, there's just a lot of dominoes here that are going to fall. So I would be trying to do anything I can to get out of this deal. And even if that's going to cost you some, it's still cheaper than what's on the other side of this.

“So I would be talking to maybe a real estate attorney to see what the heck did you sign?”

What will they be willing to negotiate if there's an amendment to the agreement to maybe even just pause this build or get out of it completely? Can you pay him 10 grand to call it good and you sell the lot? I don't know what all those details will be. Maybe you can pause if nothing really big has started yet.

Maybe you can pause and sell the plot and somebody else can pick up where you left off. I'm not sure. That's a best case scenario. Otherwise you're going to be working your tail off. And I would be selling this car and tractor and getting out of as much debt as you can in the meantime.

Because we don't know what the future holds, but man, we are rooting for you guys and praying for your wife. 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 Ask Ramsey today. That's RamseySolutions.com. In the lobby of Ramsey Solutions on the Dead Free Stage, we have Chad and Michelle.

Great. We're doing great. Thanks for joining us.

“You brought the Dead Free T-shirts to match.”

Love it in your Ramsey blue. That's fantastic. How much debt did you guys pay off? $168,933. Wow, nice.

Love it. And where are you guys from? First of all. Love it. And what kind of debt was the 268?

Credit cards, card loan, tractor loan, mortgage, mortgage. I can't just sneak that in there, Chad. I knew it. Oh, that's great. Okay.

268. And how long did that take you guys? Five years. Wow. And what was the range of income?

It was 90. And we ended that about 140. So you obviously paid off the consumer debt, student loans, tractor, all that. And then you just decided, you know, we're just going to go right on through. Did you keep that same intensity?

Well, we kept the same intensity for a while. What happened? It sounded like something changed. Go ahead. Well, the gazelle intensity started off pretty well gazelle intensity.

She was certainly going off the start of it. I was kind of more like a laying down gazelle to start with.

And then I finally got up and I was catching keeping up with her.

Wow. So you were the reluctant spouse. I was, I was, yeah, I'm the Spender. And she's the nerd. And it took a while for me to get on board.

Once I started going to the classes and seeing what the outcome would be. So yeah. Was that the turning point for you? Was going to financial peace university with her? That's correct.

“How did you convince Michelle to actually go to the class?”

Every spouse wants to know. How do I get this gazelle to get up off the grass? Well, we, I, this started at 2019. I had, um, I was doing our bills. I think and I was, like, had a budget in my brain.

And I was like, I don't know how we're doing this. I mean, I just don't know how we're doing this. And our youngest was graduating that year. And it was like, we have no money for her for college. Wow.

And I was like, that's it. I got to do something. And in 2019, we had done a school trip. And we're actually going to Kentucky to run the Kentucky Derby Marathon. And on the way there, I saw a billboard with financial peace on it.

And I was like, I wonder what that is. And I didn't think anything about it. And then in December, I saw our local front porch forum had a advertisement for a financial peace class. Wow.

Okay. This is a sign. So serendipitous. Yeah. So I took it.

And my oldest daughter was going to go with me. And she kind of bailed on me. And so Chad felt guilty. Really.

So the second week of class, I ended up going.

And then we went through the rest of them. Wow. And this was during COVID. So we had two in-person classes. And then we were, that was it.

All remote. I remember that. I was hosting a class at that point. And we started together. And then we ended up going remote.

That's so funny. Wow. Okay. So it was a slow start. But then things ramped up.

And it sounds like you're income went up. What do you guys do for work? I'm a paralegal. I'm a mechanical assembler. Fantastic.

So what happened to the income over those five years? Was it just natural promotions and raises? Yes. And I worked a lot. Wow.

Absolutely. Very, very cool. So the house is paid off. That's been the hardest part through this journey. Once you guys really understood what it's going to take to make it happen.

You get focused. You get intense. What became the hardest part day in and day out, patients? For me sticking to the budget and not getting the wants. Yes.

So there's the needs. You've got to have. Yeah. What were those sacrifices for you, Chad? That you were like, I can't spend money on this for the foreseeable future until we're out.

You know, if for some reason, I thought I need a new pair of running shoes. Just can't go out and buy a pair of running shoes. He's a budget for the next month. Or you make it do with what you have. There's one thing I didn't sacrifice.

My beer budget was always in there every month.

Beer budget remains intact. Don't mess with beer budget. That's correct.

“That's what's kept in Chad going right now.”

Okay. That's amazing. Okay. So what's the house worth? Five, thirty, right?

Five, thirty. Awesome. How much do you guys have in your nest egg and retirement accounts? One point four. Oh, I love it.

Baby steps millionaires. That is why. So you guys did a really good job investing your whole life. But you were also kind of collecting debt and being normal along the way. That was the smart thing we did was invested in retirement.

Yeah. You don't get to 1.4 million accidentally. Yeah. And you guys still have a long life to live, which means that money is going to double triple quadruple.

Hoping so. Wow. So it'll at least double. Well, I mean, every seven years, if the stock market's about 10% average, every seven years it'll double.

And you guys could live a good what? At least 30, 40 more years, right? Well, we're a lot older than you. You guys look 48 as the crow flies. It's on the marathon running.

Chad looks older. I will say that.

James Ramsey looked to him.

Thank you. I'll take that as a compliment. Well, he's younger. I brought the cradle. Wow.

Okay. So you guys are far past baby steps millionaires. But now you're doing things intentionally. Did you have any cheerleaders along? All right.

All right. Our two daughters. Our cheerleaders. Wow. And you brought them here with you.

Did they learn along the way? Because I mean, they're older now. They saw mom and dad do this journey. They were older when we started.

“Did they think you guys were crazy or were they on board?”

I believe they think they were crazy. I believe so. They thought you were crazy before though. It sounds like something changed. Yes, but just more poor.

We had to say no to them a lot.

Well, yeah, because you said the college was the crux of this whole thing. So how did that end up tell us the end of the story? Would you end up doing? Well, we actually sold it. We had to undo some of the stupid that we could.

Yeah. So we had a piece of property, of course, on a home equity loan. Man. And so we sold that. Yeah.

And that money helped pay for our shared college. Good. Worth it. Do you want to bring them on stage? Yes.

And tell us their names and ages? Good. This one is Sydney and she is 25. Awesome. This one is Ariana and she is 30.

Oh, wow. And a family tree chain just like that. And so did their inheritance. That changed too. Well, they didn't know that number until now.

Oh, there's one. What? Mom and dad's a little bit when I opened. Yeah. Well, the good news is you got a lot of time to enjoy it.

And you know, the character traits are passed down now. Sacrifice, perseverance, patience. And Chad now gets to spend a little more in the beer budget. I would like that. That's still pretty tight.

Okay. That's true. I love this so much. So what's next for you guys? You're in Baby Step 7.

The house is paid for what are you looking forward to in life? Um, well, traveling more. We've run marathons. So we, I have four more states left. And so that's the next two years is to, are you going to do one in every state?

That's we've done. I've got four more. Oh, that's correct. And it's the last four states. Idaho, Minnesota.

Um, Wyoming and Colorado. And Colorado. Holy cow. That is amazing. Wow.

So inspiring. You're only like 46 ahead of me. So I'm going to catch up one of these days. That's incredible. Oh, my goodness.

You guys are excellent.

“What do you tell people the key to becoming debt free is how do we become like”

Chad and Michelle? My theory is you need to stick to the budget. You make a budget every month. And you stick to it. And it works because I, to start with, I was an unbeliever.

But I'm a believer now. I want to sing it so bad. I'm a believer. Oh, there it is. All right.

How about you, Michelle? What was the key for you?

I think the biggest, the first step to me was admitting there was a problem.

And then, you know, then the budget working as a team and getting both of us on board. I mean, I, if he wasn't on board, I would have tried to do it. Sure. But it made it so much easier and simpler with him being on board. Just sheer grit.

But you probably would have been very resentful along the way. He would have forever guilty. Oh, my goodness. Yeah, working together is a different story. I would have double the beard budget.

Oh, man. We, we have this no button. So we use the no button a lot. Hit it. What does it sound like?

There's different ones, but they sound like they. I've seen this before. Yeah. Oh, is, is it actually Dave Ramsey? It just sounds like a shot of sound like.

I think it is. That's fantastic. That's his side job. Oh, so I heard that a lot. I want to ask him and she said she hit the button a lot.

Well, you said no for five years and you get to say yes for the rest of your life because of the position you've put yourselves in. We're so proud of you guys. All right. Here we go.

It's Chad and Michelle and their daughters Ariana and Sidney from Bristol Vermont. They paid off $268,000. The credit cards, the car loan, the tractor, the house and everything you five years making 90 to 140.

Count it down. Let's hear a debt free screen. Three, two, one. [ Cheers and applause ] I want to Michelle.

“You have to thought she won the price is right.”

I mean, look at her. She's run your mayor funds in 47 states. I wish that. Those legs can jump. That's true.

I wish I had a boy he'll die net set to give her as a prize. But instead, they get to be on the debt free state, which some say is even better. [ Music ] Hey guys, George Campbell here. You ever feel like you make good money and still have nothing to show for it?

You run it to target for one thing and somehow walk out $87 later with toothpaste and emotional support candles? Just me. Okay. Well, that's the problem.

Most people don't pay attention to how they spend their money, so it does whatever it wants.

It's a budgeting app that helps you create a simple plan for your money. Every dollar is simple. It's clear and it helps track where your money is actually going. Plus, you get daily lessons to do's and reminders along the way. It's like having a money coach in your pocket.

Your money's been freelancing long enough. You give every dollar a full-time job. Go download every dollar for free on the App Store or Google Play. [ Music ]

Our scripture of the day first Corinthians 9-24.

“Do you not know that in a race all the runners run, but only one gets the prize?”

Run in such a way as to get the prize. Sarah Blakely said, "Don't be intimidated by what you don't know. That can be a great strength and ensure that you do things differently from everyone else." I love that. Hey, the first Corinthians made me think of something in that debt-free scream,

talking about running. We talk about gazelle intensity all the time. I think we should take a minute and explain that because if you've been rocking with us for a while, you're like, "Oh, gazelle, we throw out phrases a lot." But that's one of those if you're listening for the first time, you're like,

"What the heck were they talking about?" What is that sound like? You sound like a gazelle. So, we talk about getting out of debt and doing it with intensity. And there are villains out there.

There are predators out there. That's how we consider debt. debt is the lion. It is the apex predator that is chasing after you. And gazelles are able to outrun a cheetah or a lion that can have a burst of speed,

but a gazelle, if you can run fast enough for long enough, you can outrun them. And so, being like a gazelle and running fast and intense for a long period of time, we'll get you out of debt. So, that's kind of the crux.

I could never explain it the way Dave does with his body.

Yeah, well, I'll read you the original scripture, Dave stole this from. He plagiarizes a lot. So, this is from proverb 6. It says, "My son, if you've put up security for your neighbor, if you've shaken hands and pledged for a stranger, aka debts,

you have been trapped by what you said and snared by the words of your mouth. So, do this, my son, to free yourself since you have fallen into your neighbor's hands. Go to the point of exhaustion and give your neighbor no rest, allow no sleep to your eyes, no slumber to your eyelids, free yourself like a gazelle from the hand of the hunter,

like a bird from the snare of the fowler. There it is. poetic. Yes, I love it. It is.

It is. You've got to go. You've got to go hard to hate. No sleep to your eyes, no slumber. I like that.

That's gazelle intensity. If you ever wondered. All right, L is in Detroit, Michigan, up next. What's going on, L? Hey, George, hey, Jade, how are you guys doing?

Good, did I get a ride or is it L-E? Nope, you got a ride. Boom, first try. Okay, how can we help today? So, I'm trying to figure out what to do with the pile of money that I have.

I'll just lower the cost of living, because that I'm dealing with. Oh, wow. Okay, how much do you have? Um, well, I have like $100,000 in a safe in my house.

And I'm expecting like, yeah, it's stupid. I know. I'm expecting like 28,000 more and about six weeks. How are you getting to? Where is this money coming from?

Can you legally tell me ranges? Like, we are weird people. So, like, we breed dogs. And this is all for like, four, four years. So, um, I couldn't have this for a living.

And I've got a lot of tips. Oh, man. I've been five and flipped cars and like furniture. Okay. Um, and so it's just like whatever cash we get.

I mean, obviously we clean it.

“And then it's like, if it's tips, I don't think you have to clean that.”

But, um, it just sits in the house. So, but I'm thinking, oh, I just knew that because, you know, it's not doing anything. And then our monthly mortgage payment increased. Uh, DG taxes.

And I'm pregnant with our first child.

So, I'm kind of, uh, yeah, excited. But very, very, uh, scared from the future. Why are you scared for the future? Do you guys have dead or is there something that's not secure about your life? Um, no dead.

No, the only stuff that we have is the house. And we owe 298,000 on the house. Um, and we're both so employed. So, like I said, I clean houses. Um, my income is steady.

But I plan to quit working once I have our child. And then my husband, he, um, he's a painter. And so, it really adds and blows with the season. Okay. Some months, he'll make, like, two grand.

Some months, he'll be able to bring in, like, 10 to 20,000 on, like, a high season. Um, so, I think that's one of the reasons why I'm just really unsure. Because, like, he said that lack of security is very knowing. What's the mortgage payment every month? Well, it was 24/50.

And as of March, it's now 2995. Ooh, yeah, that did go up. What happened?

“I had no idea. You know, I think it's taxes, even though, like, we've only been living here”

for two years.

It really assessed the value and up on the assessment.

Yeah. Yeah. I was just making sure it wasn't anything else. But taxes and insurance, they can do that. What do you bring in every month?

As you said, his could be anywhere from 2 to 10 and on a good month 20. What's yours look like cleaning houses? Um, so, like, on paper, it's through grand. But sometimes, like, with tips, it's like four. Okay.

So, the good news is you have like $128,000. It sounds like that's to your name. Uh, and we can do a lot with that. The bad news is, I think that it might be worth it for you guys to figure out what an exit plan looks like for you to exit out of your income and into his in a way that makes it feel secure.

“I think that that's what the crux of this call is.”

Yeah. I agree. Can he find something? Can he find something to do in the slower seasons? I mean, he sounds like a real handy guy.

Are there other things he can do, or he could keep business up to be, because really what you want.

You got three grand in a mortgage. You want to be bringing home about $12,000 a month in order to make this all work and have some cushion to breathe and vest. Safe for college, all of that. Um, so I mean, yeah, it's one of those things where the things that he can do. Um, it's, um, it's unpredictable.

You know, like, we just want a car like three days ago. That was $2,000 we paid. And it's worth like $7,000. So I mean, it's like, we can, we can just call cars. Great.

Wow. And you just sell them off. Yeah. Can you just flip it? If you knew how much money in Pokemon.

Oh, my goodness. I like that you guys are resourceful. I like that you find house ways to make money. I think that's very cool.

“I think that what would really help is to lower your monthly expenses a lot and to make sure that you have a fair amount of savings.”

So six months of expenses. I would not do three months. I do six months for you guys. And I would treat your money like a real estate agent or somebody who has has variable income like that.

And I would always make sure I have an extra month's worth sitting there.

So that I always know that I have enough to cover the bills. So essentially you're always one month ahead. Uh, I would recommend that for you. And honestly, if you guys have no debt. Uh, I'd probably keep.

I'm not exactly sure what six months would be for you. But let's pretend it is 28,000. So you keep the 28,000 there and your emergency fund. You guys start the process of investing. Baby step four.

And maybe you take this 100,000 and you throw it on the mortgage. Maybe you recast the mortgage so that it's not such a big chunk of your life. Mm-hmm. I was thinking about doing that. But honestly, it's been burnt with every person that I called.

Whether it's mortgage company or just some some person I know who's a lender. I feel like I've been burned and everybody's just looking out for themselves. And you know, there's refi and obviously there's like closing costs. And you start. Not if you recast.

Recast. My cost is a couple hundred bucks. Yeah. So you're not actually going to be finance. They're just recalculating the payment based on the new balance.

And keeping all the other terms the same.

“And if you want to entrusted partner of ours,”

reach out to Churchill mortgage. And they can walk you through that until you if it makes sense for your situation. But I like that plan to give you guys some breathing room and cushion. But either way, we need to put this in an actual high yield savings account. Not in a savings account.

In a savings account. And inflation is eating away at that money right now. Even if it's physically safe. I know. So I would put it in a high yield savings.

We have another partner, Fairwins. You can go to Fairwins.org/Ramsee. They have a smart bundle just for our fans with a great high yield savings account. And you can actually have up to 10 savings accounts in there. So what I would do if in your shoes L is have a peaks in valleys fund with your variable income.

So on a great month, he makes 10 or 20. Let's park a bunch of that in that peaks in valleys fund. So that if he has a $2,000 month, we can pull from that instead of our emergency fund. I see.

Okay. That sounds like a good game plan for sure. Especially with my the income reduction coming up once I have the baby. Yes. That's going to give you a whole lot of peace instead of going.

Oh my gosh. Our expenses are still the same. But he only made two grand this month. What are we going to do? Go flip some cars real quick.

You need some simplicity and peace in your life as this baby enters the world. And so I'm wishing you guys the best on that journey. Thank you so much you guys. I really appreciate the clarity. I sometimes just need a straight path forward.

Yeah absolutely. That's what we're here for. That's one thing we got you. That's all I know how to do. Straight a clear plan.

Straight path. I love it. That would be steps like that. Man, but the good news is there's a lot of good things happening here. I mean, I mean, you don't have a bunch of consumer debt.

You have a pile of money even if it's physically in a safe. That's a why. Usually you hear that from the, you know, the 78 year old man with 10 cans in his back. You are rarely from a, you know, a young couple. Yeah.

I mean, I would do it. But you know, you get that distrust of the banking system and go. Ah, but you got to spread it around. Yeah. You got to have a little hit at least it's in the show.

Yeah.

“You know, I mean, someone comes to middle of the night.”

It's safe. You're a carton.

But FDIC insurance and C UA insurance.

If you're with a credit union like Fairwins, go check it out.

“Remember, there's ultimately only one way to financial piece folks.”

That's to walk daily with the Prince of Peace.

Christ Jesus.