Today's Habits Create Tomorrow's Progress

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start budgeting for free today. [MUSIC] >> Normal is broken, common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairlands Credit Union Studio,

this is the Randy Show. I'm George Campbell here with Jade Warshaw. Taking your calls at Triple 8-825-5-225, we'll try to help you take the right next step for your life and your money. Sarah is up in New York City.

What's going on, Sarah? >> Hi, thank you for taking my call. >> Absolutely. >> My question is, my parents, they are pressuring me to find $250,000 if you lock.

And I feel very uncomfortable doing it. >> You should.

>> Yeah, they already owe me $20,000.

>> Oh, man. >> So they went, hey, Bank of Sarah hooked us up last time. Let's try to 10X our loan. >> Why is this even a conversation?

“Why is this even gone beyond the point of an immediate know?”

>> Honestly, they cannot pay their debts. And I'm very worried for my little siblings. >> 'Cause the siblings are living with them, you are not. >> Yes, no, I'm also living with them as well. >> Oh, wow, they're very hectic.

>> I'm 23. >> Okay, and how old are the siblings? >> They're 14 and eight. >> Okay, 14 and eight, and is the he lock? You said they can't pay their debt.

So is the he locks supposed to be used to pay the debt? Is that the point?

>> Yes, but the thing is, another twist.

They already took a he lock on our primary home. They want to take a he lock out on their rental property. >> Oh, boy. >> What's the rental property worth? >> It's worth about $950,000.

>> And what do they know? >> They owe $250,000. >> So they got $700 grand sitting in equity and that thing. >> Yes, but why not sell it? >> They refuse.

I just don't want to keep it in the family, but-- >> There's not going to be anything to keep in the family. If they keep this up, they're going to he lock their way into oblivion to where there's no equity anywhere. And they're going to be forced to sell it one day.

So no, the easy answer is you get to say no. >> Go back to the kids, though, when you say you're worried about them in your mind, what do you think is going to happen? >> I'm worried that there's not going to be any money left for them. And they're--

>> Like, as far as inheritance, yeah. And then I also think, I feel like the primary house is going to get for clothes on because they have no cash. >> But they do have the, here's the problem. What you're saying is likely true, maybe they will get foreclosed on.

Maybe they will destroy any inheritance or anything like that over the course of time. All those things are very possible. So hear me say that because if they don't change course, yeah, they're really setting that path for themselves very clearly.

>> Inheritance is the last thing I'm worried about.

“>> Yeah, and the truth is, if they do foreclose, the truth is they do”

have some assets here that they have at their disposal. If they choose to do so, the hard part here is these are grown adults who are going to make their own choices. And the hard part is you just having to sit back and watch despite them maybe having some better advice,

them not taking the advice. That's the hard part. If you had told me, hey, I'm really worried that the kids aren't having food at night or they're, you know, the lights are getting cut off and things like that.

I think we'd be in a different discussion right now. But if truly you're only worried is gosh, when we become adults, there's not going to be any inheritance. I don't know that there's much you can do to stop that. >> Yeah, that's true.

>> I also, I feel like the lights might come off, because my parents, they don't work. They're both retired, and they don't have any cash. >> Well, you're there, are you there without? Are you there staying rent free or what's your deal being there?

>> No, I give them $1,000 every month. >> So why don't you, let me say this. Instead of you giving them $1,000 in cash, why don't you say, I will pay the utilities. If I'm going to be there, I'm going to pay the water so that you know

that those things stay on, and maybe the other bits, you pay groceries, or whatever it is that you're doing. But in this case, I would be hard pressed to be handing somebody my money and cash, hoping that they're doing the right thing with it, which is keeping the utilities in the place that I'm living.

>> If your family's livelihood is at stake,

“you need to get involved, and that does not mean you need to loan the money.”

It means you need to be involved with the budget and paying the bills, and you might need to take responsibility, because these grown adults have chosen not to. Why are you living there? >> Well, I still have one more class left for college.

So I was going to take that class, and in December, I was thinking about moving. >> I have about $60,000 saved. >> You want to know what?

I think that dysfunction is magnetic, and it has a way of pulling us in, and pulling us, and not just physically, but even mental. When you're around dysfunction, before you know what you're starting to act in dysfunctional ways,

and you're starting to consider doing things that you know are dysfunctional. >> It's like a vortex you get sucked into.

“>> The fact that you're even calling us concerned about what do I do here?”

Let's me know, man, this dysfunction is really having a pull on you. I think I'd get the heck out of that situation, and it's not to say you don't talk to them or see them, or interact with them, I'm not saying cut them off by any means. I'm just saying, you've got money, you're 23 years old,

you're grown, go and start your life and start on a healthy path. >> I agree. >> So, they have 1,000 bucks coming in from you. They have rental property money coming in. I assume they have social security,

any other sources of income? >> No, they also have another rental property as well. >> Where's all their money going? >> Bill, they're back to fun, everything. >> So it's all going to bad debts.

They're trying to keep up with. >> Yeah, he has about, I think, 100,000 in credit card debt. >> How old are they now? >> My dad's 70 and my mom's 60. >> Okay, so older parents, can she work?

“>> I think she's going to start working.”

She never worked before, but she's going to start.

She's going to have to get a job. >> No time like the present. So how much debt do they have total? Do you know between all the tea locks and consumer debts? >> I think about 800,000.

>> Okay, and they have at least 700 locked up in this rental property number one. What's the second property worth and what is owed on it? >> That's debt free. They owe about, they don't owe anything, but it's worth about $4,000.

>> Okay, so they have $1.1 million that they have access to. If they chose to sell one of these properties or both of them. >> They're not in the red, they just have a lot of risk in their life. >> Yeah. >> That's true.

>> So you can show them that. Hey, mom and dad, I'm not going to co-sign anything, but what I can't help you do is come up with a plan to get out of this. If you're willing to listen to me. If you don't want my advice, fine,

but that's all I'm able to help with at this point in my life. >> That's true. I'm also afraid that they're going, not going to pay me back. >> They're not going to pay you back, I get certainly they're not. What makes you think they would?

>> You think they would? >> Because they said they would? >> Yeah, I mean, you know, it's your parents, I would think they would. >> But you-- >> It's not about that, it's you can tell by people's patterns of behavior,

what they're most likely to do. >> I'm sure they want to pay you back. I'm sure somewhere deep in their heart, they feel for you. Go, man, we really need to get her money back, but they've got a thousand things going on,

and you might get it back in inheritance one day. But at this point, there's still a lot of life to live for these kids, and for your mom, and for your dad. So in the meantime, we need to clean this mess up, and you might need to show them how bad this really is.

And that debt is not the answer. Because it got us where we are today. Another he-lock isn't going to solve anything, is it? >> No, it's all about the behavior that got us here, and they're not willing to change that,

and you can't change them. >> No, you can't change them. >> That's why I want to be involved. >> Yeah, yeah, you can't change them, and I think you need to move out.

I go back to my point. If I'm you, this weekend, that's my, that's my fun. I'm going out, and I'm apartment hunting.

You've got $60,000 saved, which is amazing.

Go put it to good use. >> Oh, parents, please, do not put your kid in this position. This is abuse on several levels. [ Music ] >> Hey, guys, it's Rachel Cruz.

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That's CHMministries.org/budget and promo code Ramsey. Lauren is in Salt Lake City up next. What's going on, Lauren? How can we help today? Hi, I'm Lauren. I'm working at a job at a company that I don't wish that type of treat myself in some of the employees,

but I'm under a service based repainant through a health grant to the government. And so they pay for all of my school and all of them put them all in school. And so now I have a period of commitment time. And if I don't fulfill that commitment,

“I would owe back three times to the government. What was paid?”

No, time, yes, what was paid? And so they initially paid around 280,000.

And so if I don't fulfill it, then I would owe back basically a million dollars.

So I don't technically have any loans per say that I'm paying, but if I don't fulfill the commitment, then I would have to pay it back. I've never heard of such a thing. Have you George? Not three times the amount. You're talking about all the fine print here. You're saying that you would owe them like $900,000 if you quit today.

Yes, so it's really scary. What if you get fired? Yeah. So if I get fired, I'd have up to six months to sign a job where I'd get pleased with another health date. What's wrong with that? Not necessarily anything wrong, it just would require me to move.

So there's no other, they have certain scores. And so the nearest site can be is about nine hours away. But it's not the job. It's the location, right? You said it's a toxic environment? Yeah, it's a toxic work environment.

“Is that one person or is it like this whole place is corrupt?”

The whole place. Yeah, there's been. That's completely. What parents is this that you study? I'm working as a medical program, but it's true. Like the health return. How long do you have it? How long is the contract for before you're free?

So I have about a little under three years last. And if you move locations like to George's point, let's say you got fired, and you moved, does the term start over again, or are you able to, you know, do your time the rest of your time in the other location? So I can do the rest of my time in another location.

I think the part that my husband and I have been torn about is just that we have scheme we were at and it would require us to sell our house and kind of sort of

“or not since then, you truly. But isn't that the least of your problems?”

Because when you called in, you said, I hate my job, but the problem is,

if I leave, I owe 3x the salary. So that means let's pretend, let's pretend that wasn't the case. Let's just pretend you hated your job, and you wanted to leave, would you still be saying, oh, well, here's the problem, you know, we have to move and, you know, housing and whatever. Do you see what I'm saying? I feel like you shifted the problem to something else just now. Yeah, I agree with you. I think I felt pretty stuck where I'm at.

Okay. Is there a way to transform versus having to force yourself to get fired, which sounds in science? Can you just go to leadership or is there a bigger organization that handled this program that you can go to and ask for a transfer? There's a way to transfer another site and so I am interviewing another site and that's kind of part of the reason that I wanted to reach out today. It's just to kind of see if that, if that was wise, because I'm not sure.

Is that a way? It would be a little under 10 hours away, and so it would require a move, and that's actually one of the closest sites to where I'm at now. I'm just trying to figure out with lots of little kids in a big move. If that makes sense, even if I'm going to come back here, because it might have been, it would also obviously lead to the job here as well. It's okay. So let's, let's separate it out. It sounds like, on the one hand, what I hear is,

you can't stay at this job, like for your own mentality, you can't stay for the soul tax, it has to be paid. Now, what we can't do is cloud an inconvenience with keeping us in a really bad situation. Moving is inconvenient, even when you want to move it's inconvenient. So let's just

put that on the shelf as being a move point, because moving is always going to be an inconvenience.

So let's not let that stop us. I think the main thing here would be your husband's job. That could be a logical thing for us to consider staying or staying closer by.

He's moveable. He's also in healthcare. So kick it a job. Maybe it's more, you know, stay care and child care. We've got three kids in the care. So lots of, lots of movement there. And that's okay. We can do that. If I could stick through here that maybe I could stay at home at the end of it. We don't know the environment you're talking about. So I don't know on a spectrum of my bosses annoying to I'm having a mental health crisis because of this. I don't know where you're at.

Yeah, tell us. Yeah, I'm definitely more towards the latter. I've watched several of my co-workers get fired in front of me. And so it's been, it's been a really hard time. Are they in the same program as you? What happens to them? Pretty much everyone in the program stays until the day they can be released and then leave. But you're saying they got fired. So they have to move to a different location 10 hours away? Yes. Yeah. So co-workers, do you get fired or let go

“prior? Do you have to move? Do you think they got fired on purpose? Because I think it”

possibly. I think a lot of it is the employer. I've watched about 30 co-workers get fired. Then those jokers are getting fired on purpose. I think they're seeing the same thing you're doing. And in fact, no one's seeing this pattern going on. Hey, there's some toxic leadership here. 30 people are getting quote unquote fired. Yeah. Otherwise, great workers. So this is a real tough situation. There's just suck on both sides of this. And so I would just try to make peace

with this move and go. It's an adventure. Yes, family's going to be further away for a couple of years. But three years from now, this is all over. And it's a good reminder that all of these

programs, they sound so amazing. Like what a blessing to have a whole program paid for that would

have cost you over a quarter million dollars. We can all agree. That's awesome. The red tape on the other side and the prison sentence and handcuffs is the part that scares me with these programs. Can you afford to move? Tell us about your finances. Yeah, I think so right now we're in a really good financial position. We make about 225 combined in our houses almost paid off here. And so we would we would sell our house and we could

we probably rent where we would go. Yeah. I'm not sure that we would stay. I think the part that might be hard financially is that we would possibly be living on just my income for a while. And the rent where I'm interviewing is more expensive. Because you won't be able to find job or what? It probably more until we can find childcare because we'd be trying to enroll. But the area, a lot of the sites are in relatively rural areas, but not a lot of resources. Well, let's do it.

Let's give you a fair order to make this move. So the first thing that you would need to do before you transfer or before you get yourself fired because you pulled the fire alarm,

“you need to make sure he has a new job, right? Like that's the thing one because you don't”

want to go somewhere. If you can have him locked in and you locked in, I think that's a good thing. And we can figure out childcare. You've got options. You could hire a nanny for six months if you needed to. Yeah, for sure. And it still be worth him working. And if you know where the transfers send you, then you can he can start to look in those areas prior to to prior to you actually requesting the transfer or prior to you getting fired. I don't know. I'm not going to

tell you to get fired on purpose. I would be contacting an employment attorney. I know there's going to be looking into the fine print of this. They can read these contracts backwards and forwards and tell you what your actual options are versus just our opinions basically. You're

never seen it. Yeah. But if I'm in your shoes, I'm going to be taking the contract uploading it

to AI talking on the employment attorney and seeing what all of my options are. And this choosing one that is the sort of path of of least resistance here that's going to involve the least amount of pain. But it sounds like either way. It's going to be a tough go for the next couple of years. Whether you stay, whether you move. And you know, three years feels like a long time in the

“scope of your whole life. You're going to go man. Remember that time? We had to move 10 hours away”

for three years. Yeah. It can feel very short too. Yeah. Man. That was wild. The bigger lesson. Let's talk about the bigger lesson that might be in this whole thing. This was golden handcuffs if I've ever seen it before. Yeah. Just to find out for something. Knowing that I would have to pay three

X the amount. Yes. And knowing that it was over a quarter million, which equals three times that.

And you're going into the unknown. Yeah. You're going into the unknown for it. Oh, lardy. Yeah. That's the financial equivalent of heaven and hand over a kidney. Oh gosh, it would not recommend.

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so that you can free it more money and work the plan even faster. You can start every dollar for free by downloading it in the app store or Google Play. Chris is in Dallas, Texas up next, Chris. Welcome to the Ramsey Show. Hi, George. Thank you for taking my call.

“Sure. My question is, is it worth it for me and my two siblings to fix up our mother's house?”

I've got a lot of foundation plumbing, roofing, regular issues or should we just sell it as is. Well, what's it going to cost to get it back to a decent condition? Well, the foundation, the quote we got was $13,000 and it's $28, but if you fix the foundation, you in turn, of course, have to do the plumbing and the windows and the roof and so forth.

We're basically rebuilding this house. Pretty much. And she owes $8,000 on it

because she and my dad got love them. You know, wanted us to have these great childhood, so they just kept refinancing the house. And it's obviously very sentimental. And every time we bring it up to her, it's very emotional, but a portion of her feeling fell a couple weeks ago. And we had a contractor come by and put some plywood up. And so now, of course, mom thinks, okay, this is great of the last few years, and I'm like, mom, this is so unsafe. But how old is she? Mom, she's 78.

And when you've said to her, I feel like our options, mom, or we can start to do the work on this house, or we can sell it. What does she say? She says, where am I going to go if I sell it?

“Yeah, that's what I mean. Well, where she would go is my sister has offered to let her live with her”

and her family. My husband and I have room. Or we could find her a nice little apartment where she doesn't

have to stress over these issues, but it depends on the day, honestly, when I ask her, she's, um, is she well? She's just, oh, yes, oh, she's, she's, she's very well. Okay, she's, uh, yes, active, yes, but she has no money other than Social Security. She has 2200 a month from Social Security and about 500 a month from an annuity. I started her on a budget, and she's got about $400 a month margin. I mean, she's just, yeah, she doesn't have the money to fix it. She's asking if we want to fix it,

and then we get the house when she passes. What's it worth? Um, the value on this, that was County Central Praisal District is about 265 to 279. Um, what if you fix it? Correct. That is, if we fix it. Okay, she's received a couple of, you know, these internet offers, which I told us stop looking at. Oh, come like, you know, buy your house and cash today. What's the address? What would be the as is price? Have you talked to a realtor about that? Well, I've talked to two of the contractors

that have been out who are builders, and one of the gave us an offer of 140. Okay, so all is not lost. You could walk away from this with 120 grand, probably after fees. I think that's about what I, what I figured. I'd still have a realtor look at it and make sure, because I mean, that guy might have just been trying to take advantage of a situation. I'm not saying he's a bad guy, but at least we have a floor. Yeah, someone will give you 140. Barely. So now I'm going to go,

who's the highest bidder and work with a pro real estate agent who can get rid of this thing. I personally don't think it's worth all of you chipping in all of your money to hopefully get this thing back to working condition so that one day we can keep this sentimental value of this house.

to turn it into a rental? Because at that point, how sentimental was it? Well, it does have, she has a lot of a, a lot of a, a lot of a trying to say it's a big lot. So if a builder did tear it down, he could probably build two or three homes to corner a lot in a, you know, wow, so you might be able to get a nice offer on this thing, because the land is worth more than the house that's sitting on it. That's 100%. Interesting. I don't think it's worth rebuilding. This is a lot of hassle.

A lot of siblings money tied up in this thing. Everyone's going to want to get their money back out. So now it's going to be a fight of when are we going to sell this so I can get my share out.

“I think it's going to cause more familiar harm than it's going to be, you know, precious”

sentimental family time. Let me, let me ask you this, um, because I would wonder, these are the questions. If I were in your shoes today, and I were making the decision, I would want to know exactly what the house plus the land would be worth. And I want you to really do your due diligence on that. I'd want to know what the fix and without the fix. And then take that margin between the, the two amounts and go, okay, if we, how much money do we truly have to invest into this? And if it really is

a fraction of the amount that you would bank off of getting it fixed, then I'd be asking myself the question, can I do this in cash? Do I need to even include the siblings? Because that might make it easier and to just know, hey, later on, I'm getting my, this is what I put and I'm getting that money out plus whatever split is or whatever, uh, and maybe not involve as many people. Because if there's a, if you find that there's a lot of money that's going to be left on the table, there might be

something that's worth doing in cash if you can afford it. Now, if you can't afford any of this, it's a move point. Well, between the three of us, we can afford to do it. Um, my brother has expressed interest in buying the house, but my point to him, well, if we fix this house up, then I want my money out. Yeah, if you get this house, I want my money back. I just called that. I knew this would happen, Chris. This is what happens when siblings get involved financially, and but now is so much

emotion wrapped up in it and what would mom want? So because of that, and here's the problem. You might put a hundred grand into this, and some builder comes along couldn't give a rip about it. He's going to tear it down anyways. So you don't ROI on it. He probably would have given you the

“same offer if you had done nothing to it. So that's why I would do all of my homework like Jade said,”

figure out, here's what it would truly cost to rebuild. Here's what we could then get for it. Here's

what a builder would be willing to pay for it. Here's where we're going to put mom. Here's where we're going to put her money to afford that, and come up with a game plan altogether as siblings. Okay, a harder part of course is the sentimental part of it. It's just hard for her to do that, and that's, you know, that's emotional, and that's something we have to work with her on. So, you know, as they get older, they have their routine, and know where everything is, and they like

what they do, and they don't want to change anything. Just imagine though, she's in a place where the roof isn't about to fall on her. That's pretty comforting. She says, God will provide, and I'm like, mom, God provided you a sign by having the roof cave in. It's time to go, and she just says, we'll keep praying on it, but I love her, but sometimes God provides with wise counsel to avoid us bringing harm to ourselves. So, it looks a lot of different ways. So, that I can't help you convince

a 78-year-old woman to let go of a home. That's beyond me, but I think what you can do is show her all the facts and say, hey, mom, we're not going to put all this money and to fix it up, and here's

what we can get for it. Here's what we're going to do with that money. We found you an awesome place.

Let's go check it out together, or you're going to go live with, you know, one of the siblings, and she's going to have to make peace with that, because this is the life she's built for herself. I will say, I do want to add to that part. I think the siblings do have to be careful. So, let's say you sell the place as is. That's her money. And so, taking that, what I want to make sure doesn't happen is, well, we want to preserve as much as this money as possible. So, let mom go live with sister,

and that way we don't have to spend money on an apartment or something like that. I don't want you guys to be thinking too much about what it is that you want out of this deal. I want you to be thinking a lot about what really will be good for your mom, for her to keep having independence,

“for her to feel good about her day-to-day life. Because the truth is, today it is her money.”

If you guys have not, you know, fixed the house, right? Whatever equity is there is hers.

So, just keep that first and foremost, and don't spend the money before it's yours, if that makes sense.

It does. Thank you both so much. I really appreciate it. Absolutely. That's a sticky situation. Yeah, that's not easy. I can't imagine, but there is a piece of this, too, if you got to think about long-term care expenses, you know, if she's in her 80s and she needs, you know, medical attention and need to put her in an assisted living, that could cost you a hundred grand a year. And someone's going to have to pay for that. Yeah, that is a good point. And so we need to be

thinking about what assets do we have at our disposal to make sure that we can take care

of money, too. And so I like the idea of selling this thing, getting a whole bunch of money out, that is now, let's give her the best life possible instead of having her sitting in this place. It's literally falling apart. It's dangerous where she's at it. It sounds like it is. Yeah, I'm going to go. The memories I will carry with me. It's not in the studs of the walls. Yeah. It's in our hearts. And that's a hard thing to sell to a seven-year-old woman who's this

is been her whole life. Yeah, yeah, but she don't have any money. It's tough. I'm all about practical ways to save time and mental energy, especially during the summer when life gets busy. Between vacations, camps, deliveries, travel plans, online shopping, and trying to keep everyone organized. My mental load can get pretty full. That's one of the reasons why I love to leave me. Most people don't realize how many data broker sites have their

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at joinsoleteme.com/Ramcy. That's joinsoleteme.com/Ramcy. GG is in Chicago up next. What's going on, GG? Hi, thank you for taking my call. Absolutely. How can we help? I'm a 20-year-old college student, and I was just wondering how much should I have in my personal savings account before I start putting it into a higher savings or a mutual fund. You are the most mature 20-year-old I've talked to in a long time. Congratulations.

“You won the prize. That's awesome. How much do you have in savings?”

About 7,000 right now. Wow. Some of you debt free? Yes, I am. Fantastic. Well, you're doing

better than 99.9% of America at 20. Let's keep it that way. Really? So we always recommend having

a 3-6 month emergency fund of your expenses, not income. And so once you have that, anything beyond that, I would utilize towards either short-term goals, sinking funds or investing. Okay. So how much are your expenses per month right now? Right now, like, probably 250? Dollars? Dollars, yeah. How are you doing? You live on campus? Yeah, I'm on scholarship and everything is capable. That's so awesome.

Oh, are you smarter talented or both? How do you get this full ride? I'm a golf county. And there's the scholarship that Evan's foundation, and they

pay to send the living counties to school. So I counted my whole life and I got it. That's amazing.

Great. So how much time do you have left in school? Um, two years. And after school, I'm hoping to get a job, obviously. But, um, you know, I don't know if I'm moving out of the seat to get an apartment, right? And main team, you know, enough liquidity so that I'm like, if I need a down payment or something,

“like, I have the ability to do that. Yeah. That's why I like, I don't want to put too much in”

an account where then I have to pay to take it out. So I just don't really know how much I should be putting in. And yeah, I really like a high yield savings for you because there are in two

years, you do have some real expenses. You're going to want an apartment. So first and last month's

rent is going to be there. And then suddenly what George talked about, your emergency fund is going to have to take up because we'll now you have rent and maybe, you know, it's not going to be 250 a month anymore. It's going to be 2,500. Exactly. And probably that $7,000 is going to be right on for what you're looking for. There might be moving costs or might be a car upgrade. And so for that

stacking it up in a high yield savings account because you have so much time on your side to

“invest and have compound growth working your favor. And if you start off completely debt-free”

with a bunch of money in the bank making a good income, you're going to be able to invest 15% or more the rest of your life. Okay. Great. So I don't know that I would invest at this stage until you have full time working income and you're planted somewhere. And then you'll know how to

allocate that that money. I've never heard someone complain that they started their adult life

with too much in cash. So I'd love for you to have that problem, GG. Great. Great question. Way to go. Who knew a golf caddy? I know. I wish I had a time machine. Half the parents out there trying to get their kid to play golf. I'm like, hey, maybe you help the golfer. Maybe just be a caddy. That's the ticket right there. All right. Madison is in Atlanta, Georgia, up next. What's going on, Madison? Hey, I had a question about him in the same for my kids. Sure.

Specifically, they have where they get, you know, they're only five and three. So they get minimal income. But they do a little flower stand and they earn their own money. I make sure that they pad with it. And then I have been putting some of it. Originally like their birthday money and stuff like that, we would put it in my husband works for an employee on company where they do stocks. So we were doing that. And then I started listening to you guys and realize it's not good

to put all their eggs in one basket too. And so now I've gotten them like a thought 29. I mean, not a thought 29. I've gotten them an S&P 500. But I was curious if it's better to like go ahead and do them a thought 29 or I mean, and it sounds silly, but they can even do like a raw sentence income as long as I don't put their birthday money in that. So I was just curious what your thoughts were in the best course of action for them. Great question. I love what you're thinking about this

for a five and three year old. Lot of parents out there struggle with this. Either they don't know what to do. So they do nothing or they do the wrong thing or they try to do seven okay things. So here's how I see it. If you're looking at education, which I would be starting with, the 529

“plan is your best bet. As far as retirement goes, it's awesome if you want to kick start a little”

retirement for your kids. They should be okay if you raise them right on that regard. But school is a much bigger price tag and it's coming much sooner than their own retirement. So most people go, well, my kid might not go to school. So let me not say of anything. And now you've all this money stuck in a retirement account while your kid goes 400 grand into student loan debt.

Great question. So I'd rather you fund the 529 first. And if they don't use it all,

you can change beneficiaries at any time. You can roll over up to 35 grand over to a raw IRA over time. So that becomes a retirement account for them, essentially. And it has way better tax advantages. Okay. And then if you put in a 529 because I haven't looked into it in debt, because I'm just now kind of getting started and with many of those all that. If I do, it's not 29 and I able to like index within the 529 or does it just turn on a growth.

Okay. It's just, it's just like an IRA. There's going to be a bunch of options for funds there. And there's a lot of bad funds you don't want. So I would personally avoid things like bond funds, target date funds. You want to stick to 100% equity. Because they're young. They got a lot of time for this to grow. So let's stick with those growth stock mutual funds and index funds.

Okay. Perfect. So just chunk it all in a 529 and quality. And here's what I do Madison as well.

If you have the 529 on a lock and you know that hey, based on the average stock market return, we're going to have enough to cover let's say an in-state school for four years.

“If you want to say for other things like, let's say cars, wedding, a future-down payment,”

you can use that parent taxable brokerage account to stock away money there and that money will be super flexible. Okay. Okay. Gotcha. Yeah. I know that I won't have a hold of it forever. So I just wanted to take advantage of it while they would let me use youth part of their money to go ahead and invest. They will thank you later. They will. Whatever toy they could have bought is that that's going to be like 70 x if they just let it ride in retirement. So I like to

there be a split. You know, I think it's great to teach a kid that money is an amoral tool and it has three uses. Give save spend. Yep. Yep. So let's teach them to do all of it. If you just teach a kid out of save, they will become a maniacal saver and have a really hard time enjoying their life. Now that's what we do with our kids. They have their chart where they can check off the chores that they've done and they get paid at the end of the week. But the rule is you can't spend

your money on payday because they have to wait until the next time so that it's not like I got my paycheck. I go spend it. It's gone. Yeah. It's a little silly ratification. They have to have delayed gratification and so that's the way it works. But yeah, we teach them. They have to put 10% aside. They have a jar that they put their savings in. They have a jar that they put their spending in and I love it. Great question. In Madison, hang on the line. I'm going to send you a

copy of Rachel and Dave's book, Smart Money Smart Kids. It's really great to walk you through

understand money because that's every parent's goal. Oh, yeah. Actually, if you follow rams,

you're like, how do I get my kids on this? I want them to get it early. And we are to got budding entrepreneurs at three years old. Oh, yeah. She's got a rough going on. I mean, that's pretty impressive. Yeah. That's so good. And it's a good reminder. If your child has legitimate earned income, we're not talking tax fraud here. That's right. But if they have a little business, let's say they do any modeling or acting, something like that. They work for your own business.

You can pay them above board and they can then invest up to that amount in their off IRA. And can you imagine 60 years of compound growth from five years old to 65 years old? I know, that's right. That's pretty impressive. It wouldn't take much to cause you to be a multimillionaire.

Wouldn't. And as long as you're doing that 529 first, you've kind of got both bases covered,

which is really nice. And there is a new option now with these Trump accounts. They're technically

“called the Section 530 A accounts. If you want to make it a political, but all is the government said,”

hey, we're going to create these accounts so that you can invest for your kids. Anyone can contribute up to five grand a year. And if your kid was born 25, 26, 27 or 20, 28, the government will seed it with $1,000. That's money that you didn't put in. Thousands of bucks sit in there at that age to grow into retirement. And at 18, it basically converts to a traditional IRA for the child. So it's a pretty cool thing. There's nothing bad about it. Yeah. The tax treatment is the only

terrible thing because you use after tax dollars and you pay taxes on the way out. But there's a cool hack that I'm exploring where you can convert from traditional to Roth. Once that kid's working at their tax rate, be super cheap to convert, now you get tax-free money. Grow in search.

“So that's how your mind works. Very nerdy. Very in the weeds. And if you want more info on this,”

I'm going to be walking through exactly how that works in investing essentials. It's a virtual event. Dave Ramsey and I September 1st and 2nd. Investing essentials, you can get tickets at RamseySolutions.com/events. If you want to join us. 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. We wasted

too much time chasing information instead of making decisions. That's why we got Net Suite. Net Suite brings your financials, inventory, CRM, and more together in one place. More than 43,000 businesses trust Net Suite, including Ramsey. And now they're taking the next step with Net Suite next, making it easier to put AI to work across your entire business. Net Suite next helps you make the most of your time, automating routine work like forecasting demand and following up on overdue

accounts. With Net Suite next, AI is built into everything you do. So you can ask it questions just like when you're talking to a member of your team. And right now, you can try Net Suite next for free. If your revenue is at least seven figures, go to net Suite.ai/Ramsy. That's net suite.ai/Ramsy. Welcome back to the Ramsey Show and the Fair Wins Credit Union Studio. I'm George Camel, joined by Jade Warshaw. Free call at Triple 8-825-5-225. Jacob is in St. Louis up next. Jacob,

“welcome to the show. Hey guys, how are you doing? Doing well. How can we help today?”

Hey, so my wife and I are on Babes Tip 2. We currently have 24,000 left to pay off. We paid off 76,000 over the last 22 months. Wait and go. Yeah, thank you. Thank you. Yeah, we've really been able to make a lot of progress. The main thing is because we've been getting free childcare for our three kids. How do you do that? Well, yeah, my mom was a director at a preschool that was kind of part of her contract. Perfect. Yeah. You got a built-in

blessing there. Yes, it was amazing. And we made the most of it. So the bummer is that kind of

ended. So coming into the fall now, we're going to be paying for childcare. So it's going to cost us about 2400 per month. And that is eating up pretty much all of our margin. And it's really slowing down the snowball here. Yeah, that was it. Yeah, that was it. Is that for all three kids? There's that too that are in daycare. So yeah, actually, yeah. So our oldest is starting kindergarten

listening. You can easily pay 121300 or even 1400 depending on the age. If it's the younger,

the younger they are, the more expensive they are, it can be up to 1500. So that's the billing rate. Yeah. So what is your after tax monthly take home pay? After tax is about uh, 9200 come on. Okay. That's a great income. And so you're saying your bills after daycare is paid from that 9200 pretty much leave you with nothing left to throw at extra at the debts. Yeah. Yeah. We have like a margin. We went through it and laid it out. Our margins like

“probably about two to 400 right now. How much is your home payment?”

Our mortgage is like 27, 2800. Okay. How much are you paying in minimum payments? Minimal payments are like 750. That's not a lot. So I'm finding that there's still quite a

bit of money here. What what happened? Where's it going?

Great question. I figured you'd say that because I was going through all of this. So like just our needs, like our monthly needs, excluding daycare and mortgage, I have it like 3200. Right. And that's the chunk that I want to know more about. Because like if you ranked them from most expense they would be, you know, we spend a thousand bucks on food. Then we spend 800 bucks on this. Where is that money going?

Yeah. I think like food is at like 625 a month. Okay. So I'm showing that you still have 2,725 to go. Okay. And I mean, obviously, yes, you have utilities. But if you're telling me, hey,

the two items that I actually thought were going to be really high were really low.

You said 625 on groceries, stupidest. You said 750s on your minimums. I mean, obviously, I wish you had no debt. But that's not that bad. Right. So there's there's money going somewhere. I would challenge you to look to where that is because I think there's probably a lot of things that are nickel and diamond you because generally the big ticket items, it's either the mortgages too much or yeah, daycare could be sucking up whatever margin you have. But I actually don't think daycare

is the culprit here. Okay. Because I mean, even after daycare's paid, you guys were taking home well above the median household income. So that's where we're going. Well, there should be more. But I think this is going to take you to sitting down, doing it very detailed budget. And instead of going, let's see if there's anything left over and said, let's make a goal. Hey, we need to find two grand a month to put towards these debts with minimums plus extra two grand. So that's

1,300 bucks. We need to find in this budget. Where are we going to find it? And you guys take turns

“going, all right, I think I can slash this down here. I can reshop insurance here. Oh, you know what?”

You're doing your 401k. Let's pause that. Let's get some money back in. And if you start doing a budget audit and getting real creative, I think you're going to find way more margin than you thought. Okay. And I'm going to help you with that. We're going to give you every dollar premium. And it actually gives you personalized recommendations now based on your goals, where you're at, where your actual expenses are. And we'll make those recommendations just like J and I would do on the show.

Now, are you guys still investing? No, we did pause that. Okay, that's good. Yeah, I think it's probably the doubles and the details. You know, it might be things that pop up that maybe you didn't budget for and you look up at the end of the month and it's like, oh gosh, we did do door dash or we did go to Target do a target run or all those little things coffee. I'm trying to think it's still the little things. Maybe you have a lot of subscriptions. Do you, if you have Hulu, Netflix,

Disney, Paramount Plus, Amazon Prime, Fan Dango, Instacart, Instacart, you can just keep going. Everything's a suggestion. Everything's a subscription. So my point is, I'm talking to myself because that's me. So cut half of them off and I win everything. 15, 20 bucks. You don't feel it in the moment, but I can add up. So I hope that helps you start to navigate this. It's the hopeful situations. You have a great income. There's not a ton of debt left. You guys have a crazy progress. So I just don't

want to see Luz all of that momentum just because of the childcare. So now for those who are listening and maybe you don't make $9,200 a month, maybe you make somewhere around $5,600 a month.

“And you're like, I have kids and daycare, Jade and George. My margin, the truth is,”

daycare, I do feel like sometimes the baby steps can really be impeded by seasons. If you're in a daycare season and you're not making, you know, maybe you're making the average income, you're going to feel that stupendously. And you're probably going to be a person who has to go out inside hustle and supplement your income in order to make that work. But the good news is, and if you've ever stopped to think about it, George, the good news is if you can pay for a daycare

the $36,000 a year, you know, you could go to state school. So once a daycare just reallocate

“that daycare paying to their future. Yes, you're basically paying for college twice. I don't know”

why anybody, nobody talks about that. You know, that's a life hack there. It's a life hack. There's hope.

If you can pay for a daycare, you can pay for a daycare. You'll never get rid of this payment,

but there's hope yet. But there's truth in that. A lot of times people do make really good money, and they go, well, I don't have any margin. And I always wish I could sit down and look at their bank statement, look at their every dollar budget and help them. Yeah. But luckily, the every dollar app now does that for them. So I always point people to that, it's such a great tool. That plus ask Ramsey, which is our AI chat bot. If you combine those two things, you will feel like you got

a raise. You could sit there for two hours and go, hey, give me more recommendations. Hey, here's how much I'm spending on groceries. How do I cut this down? Hey, here's how much I'm spending on my utility bills. How can I get this down? And you know, it's going to be through a Ramsey Ramsey lens. Yeah. So I love that. But insurance is a sleeper. People don't realize that they're

overpaying for insurance. So I always tell them to re-shop using independent broker. And again,

we have an awesome coverage check-up tool that walks you through all the ones you need. Making sure you don't have too much insurance. Right. You don't want too little insurance. But a lot of people will reach out and say, oh my goodness, I just saved 300 bucks a month. Just by re-shopping, because I always had whatever XYZ company for the last 10 years. And then check your Amazon. Go through there because sometimes it just becomes a catch-all,

and you can look at the end of the month and just go, what have I done? What have I done? It's like the little sticker on the gas station pump. I did that. Yeah. It's your on-face pointing

at your Amazon account going, how did we spend $2,000 on Amazon? How much of that did we need?

And how much of it was just retail therapy after the kids went down? Man, it'd be like some real questions ask ourselves. . If you've worked hard to keep your car running, the last thing you want is stress when you're running the kids all over to summer activities or loading up the family for a well-earned vacation.

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“Jessie is in Modesto, California. What's going on, Jessie?”

Hey, George. Thanks for having me on. Get straight to the point. So, my wife and I we bought a house about four years ago. And since I was listening to the show a lot more and where you talk about buying a house on a 15 year fix that no more than 25% of your take home. Well, ours is a 30 year fix and it's about close to 40% of our take home. And the question I have is, would it be wise to look to downsize from our current home, even though interest rates have

risen since we bought our house or should I try to find more work to bring up our income? I don't know. If you guys have any advice on get a approach for that. I'm glad that you're realizing the problem that this is. If you said to us, I see a long term play where my income can go up and it will stay up. There might be a way to keep this if that's happening in the near future. But what I wouldn't want you to get sucked into is maybe I can

side hustle my way out of this because side hustles are temporary like temporary fixes. And so that's kind of where the rubber meets the road on this. Is there an upside for your careers that you do

there's anything like listen to the next five years that would drastically increase to where it's

going to you know put me up closer that 25 percent. Yeah because there's a numbers on this. I'm curious

what's the mortgage payment and what is your after tax monthly income? Our take home is probably 9,000 a month. Does that include and that's just after taxes or does that include? That would be after our health insurance and our diverse 10 percent. Okay so let's remove that out that will help our numbers here. That is a confusing point when we say 25 percent of after tax income we're just saying after your taxes are paid but don't include health care and 401k because that can skew the numbers.

That might force you to go hey you know it actually at 28 percent this is not a fire. Gotcha okay. So how do you calculate it? Just just all that comes out prior to I getting the deposit into my checking account. So you did it based off the 9,000 that comes into your checking account. Correct. Okay. And what's the mortgage payment? It's about 3700 a month and that's just just mortgage. And how much goes out of your check for investing and how much goes out for health?

I have about 10 percent set for investments and then health is it's not much it's a couple of

hundred bucks. Okay so you probably it might be like let's say it's called 10-3 for example 10,000, 300 which brings you to 35 percent of take-home pay. Okay so it's not great but I wouldn't set this on fire where I'm telling you hey man you got to sell this thing. Now the question is do you have enough margin to do the baby steps live your life create sinking funds all of that? Yeah I mean I would say it's we have a decent margin I'm having no debt.

“Good. I emphasize the mortgage. I think the only thing that after those in your show that's”

I realized is you know I could go up to 15 percent on my investments but I you know I want to invest you know for we have three kids so I'm going to start investing for their education and I see that start thinking about all the things in my I don't know where we're going to get a lot margin and part of the reason you know I'm putting it all together why we want to be around that 25 percent is so you can have those margins to make those investments. Yeah that's true you're

getting a man that's exactly it we want you to be able to live your life and that's not because we're trying to be super legalistic and you're a bad person if it's 30 percent on a 30 year we've just found that you're going to pay that house off in 15 years or in case scenario you're going to have extra money to cover the vacations the car repairs the kids activities whatever it is and so that's where I'm wondering if you keep this thing for another year or two and see where we can shave how we can

make more and then later on down the road you can decide hey this is there's not a sustainable path and I mean you can run real numbers on this today to get your head around what the future would look like so I would go ahead and I would plug into my budget how will my paycheck change went once I

“invest the full 15 percent because the truth is if you have no debt and you have an emergency fund you”

should be doing that today and then I'd say okay ideally in my ideal world what I'd be putting into the 529 so I'm gonna you know 300 bucks a month okay great subtract that and then I'd like to be making extra mortgage payments in my ideal world it'd be I don't know 700 bucks a month whatever you decide and then then see the margin and you and your wife decide how do we feel about this is this enough to take the vacations we want to take is this enough to you know be in the lifestyle that we

want to be in that we've worked hard for and I think that will inform a lot of your decisions looking at the real numbers around it yeah just a real quick I guess the reason that felt more of like a urgent fire situation because you guys talk about a 15 year fix and we're on a 30 year you know well over that 25 percent of the take I don't know I mean I do think that a little more stressful it it is because a lot of times people will do a 30 year to be able to afford the house that they want

and if you're telling me that even on the 30 year it's still 35 percent yeah you bought more

“house than you should have I mean there's no question about that I think that you bought more”

house than you could afford can you guys reasonably downsize what that look like in the desk area I mean we could probably find something I think our house is far worth around 600 right now and we have about 130,000 equity we could probably find something in like the 500,000 dollar range

so it's not like a major downsize I never ran the numbers on what a 15 year fix would look like

yeah my guess is it would it would be a whole big chunk of your take home pay and you got to think about all the fees involved with moving selling a house buying another house so I don't know

I'm I'm the first guy to tell you if I was five felt heart palpitations that you should sell

“your home I would not on fire it's just something to be thinking about and you do live in a you”

know high cost of living area and that's just part of life there you just kind of have to make more money to have a life with some cushion so I would be looking at your careers going okay can I work over time temporarily if we need some extra margin but long-term what does it look like to get the core income up do both of you work right now outside the home yeah I work full time my wife works it's a pretty young job so it's yeah I'm kind of fluctuates okay so she got something

that was more stable that paid you know higher weight that could be your ticket to make an 11 or 12 grand a month all of a sudden this mortgage payment is nothing burger yeah yeah okay you look man it's it's a fun math equation it is and I think you highlighted a good point George you know our rule of thumb I think everybody knows it but we'll say it again 15 year fixed rate mortgage is what

we would suggest um and obviously you want a mortgage where the take home is no more than 25 percent

but sometimes you know people run into the ramsy principles after they bought a house and so they're looking at their mortgage and they're going oh gosh mine's 29 percent or mine's 32 percent or

“mine and it's not to say that you have to run and sell your house and get it 25 lightning will not strike”

if you're at 28 percent or and you can still go to heaven with a 30 a mortgage so don't worry about that and we're not telling you if you have a 30 year you need to refinance to a 15 year right now we're not telling you that at all but we are saying that if you're wondering if it feels tight and you're wondering why that's something that you can look at and go okay now I understand

why it feels tight it may not be that my incomes the problem per se it just have a little bit more

house then maybe I should have bought and then you can decide the way you want to solve the problem but if you're looking at your life and you're going you know what we're kind of doing the things we want to do maybe we don't have as much margin as we want but we're taking off all the boxes and we're going in the right direction yeah it's not on fire it's just something that be aware of yeah it's a good reminder if you're following the babysept sometimes it feels

like you're living paycheck to paycheck because you've given every dollar a name and that can feel like well there's not an extra 3,000 bucks down around because I allocated it towards things college savings this much is going to savings and I like to automate it personally so by the time the money hits my checking account it's already gone to all the different things and all I have in that budget is the spending money right because all my saving stuff has gone the giving stuff has

gone and so it can feel like that money's gone but I like it because I'm human yes I'm going to be

“tempted to spend it if I see extra yeah I mean you don't you you don't you should not be spending”

everything you get you should be doing the things that make you financially responsible it all oh good luck my friend as a dad of young kids I'm starting to think a lot more about the world are growing up in and how I'll help them make sense of it as they get older and that's why I like world watch a video new service for pre-teens and teens because one thing I know for sure if you don't teach your

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he says my wife and I have $34,000 of debt and $12,000 in savings. I'd like to drain our savings

to pay everything off but it's hard to get over the fact that we will only have $1,000 in savings and we really want to buy a house. This feels like a step backwards. Can you give me some encouragement about pulling the trigger? Whew okay. This is fun. Well here's some here's some reality. You guys have a negative net worth. So let's not talk about a step backwards or already in the negative. Yeah we can't go much further back. So you would take your let's say 11,000 of the 12

keep your starter emergency fund the thousand bucks and you would knock that debt down and you

“knock out a couple of payments along the way probably. Absolutely. I mean I think the biggest thing”

is what he's talking about is it feels cushy to have $12,000. You feel exposed. It's a security

thing and what I you know on my sheet here it says can you talk me into using savings to pay off debt. Yeah my talk into it is mathematical because the person who has debt and then says but I have $12,000 in savings I'm like math says you don't have any money. Math says you actually owe $22,000. That is just basic arithmetic which is my favorite type by the way and so when you look at it for what the numbers actually are you realize oh crap I am actually putting my security in

something that's false. And so that's kind of my way of thinking about it George. I mean I don't know what's funny. As a guy who likes the numbers and likes the math I think this one is the best emotional play in the whole we switch chairs. Okay go for a ride. When you have $1,000 you are a little bit scared. You're like okay we got to get out of this debt real fast because I want to

“get that emergency fund real fast. I know those are back up and so that's why I actually like this one.”

It causes people fire. Yes it causes people to move faster and part of the problem is when you

got 12 grand sitting and savings you have comfort and when you're comfortable you move a little bit slower. That's a good word George. There's a lack of urgency and so I like the fire this thing lights under your butt when you got a thousand bucks to your name and here's the good news. Most people in a given month could cash flow any given emergency. There's very few things other than like you know the H-FAC or like a roof needing to instantly be replaced where you need to come up with

20 grand on the spot. Right. Think about your last couple emergencies. It's likely the flat tire. It's the dental emergency. You have health insurance for that. So as long as you have good insurance in all places you know your deductibles you could likely pause the baby steps and cash flow that emergency in any given month. That's a good point. Yeah I think that's a good point and then when you think about okay once the debt's gone how quickly with all those freedom payments how quickly could

you stack back 12,000 in then some and you do the math on that and you go oh you want to know what this is actually a really great play. We say around here all the time your biggest wealth building tool is your income. That's your biggest wealth building tool and so let's do it it takes to free that up and stop giving it away in monthly payments and when you do that that's when you start winning with money. I hope Tyrone was listening if not this was a big waste. I'm kidding I'm sure

it helped somebody out there. There's a lot of people in that in that spot. Yes I think that's a very normal way to feel and I think there's a little personal pride attached to it to like I saved. Yeah 20,000 dollars. I'll tell you this though and someone tells me I went down to a thousand and I had this much in savings before I go oh they're actually doing it they're going to get out of debt. I'm back convinced because now like I'm willing to pause the 401k I'm willing to do the side hustles this

“means something to me I'm prioritizing this so that's what to me it's more of that I'm putting”

the stake in the ground. Lime in the sand more than it is a financial you know equation. Yeah arithmetic if you will. arithmetic. That was fun. Thanks for indulging me. Your wealth. Donald is in oh Claire Wisconsin what's going on Donald? All right well I was wondering if I more information should show or talk to a pair of two curds of our debt. Wow what's the truck worth? $21,000 and what do you owe on it? $8,800. Okay so you owe about 9 it's worth 21 so you could walk away

from this thing with about 11 grand 10 12 grand? Yes. Okay and then you would use that money to buy a different vehicle do you need a different vehicle right now? No I we have two vehicles at the moment and I would probably use it just to pay off her most of her debt. Wow what's the other debts? We have 9,000 and a personal loan 8,000 towards my studio loan two credit cards they're on $20,200. Something else in there? Okay yeah because you said the $21,000 was

profit 12 grand and knock out some of these smaller debts with it. Yeah speeding up the process

“by assume several months. Wow what's the payment on the truck?”

Feels like a no-brainer. Free of a payment you get 12 grand to throw at the smaller debts you don't need the truck I'm going sell it today. Yeah why would why would you not sell it just because you like it? Yeah. Okay yeah I mean that is part of the the sacrificial nature of the baby steps as you let go of some things that maybe you you like or you wish you could keep but it's the greater good right you're you're doing it all for the greater good so I would do this deal.

How much do you guys make? $700 a month. Fantastic. So if you sold the truck through that amount

at the smaller debts you have that debt remaining with your income how quickly would you guys be

out of this whole thing completely debt-free. Probably 40 or 60 likes. Wow. Love that. We're talking like by Christmas. Yes. Christmas is going to hit different and then by the spring time you'll likely have your fully funded emergency fund right? That would hope so. Think about that man. By by 20 summer of 27 you guys have no consumer debt you got 20,000, 25,000 bucks sitting in a

“high-yield savings account. How quickly could you go save up and go buy yourself a nice truck?”

Tell me what's your much? Think I mean we're talking like one year from now you're in a totally different phase of life. You're a guy who happens to life instead of life happening to him and you can save up two grand a month and go buy a $20,000 truck 10 months later. That's crazy. You see that future ahead of you? Yes. Yeah, we did about $80,000 or $70,000, but $22,000. Wow. So this is a home stretch. Yeah. So this is just you going, hey, let's not make this any

harder than it has to be. Let's get rid of this truck. There's more trucks where it came from. So I feel real good about you selling this thing. It's not a horse. It doesn't have a soul. That horse power though. I'll tell you that much. You know, I just love calls like this because it reminds me I read a book by Hoda Coppy. It's called Jump and Find Joy. Anyway, in the book she's talking about how you can be going through life and you can just stop and go, you know what?

I don't want to keep going down this path. I just want to stop and make a change. And I love stories like this because this guy he's gone was going through life and he was like, you want to know what? I don't like this. Let me stop. Let's just throw all the cards up in the air and start going down a different path. And now you look he's paid off $80,000. He's about to sell a truck. It's you can just stop and go, this doesn't feel right. And I want to go in a different direction.

And I just love that. And we have the plan to help people do that. And they do it every day.

And I always like to say the time is going to pass anyway. So you have the luxury and you

have the opportunity to use them now. You want to still be in debt? Yes, God willing you have two years in front of you. And if you can do the same, you can you could be the same. You could be worse off or you could be better. And all of that has to do with people in a moment just going, I'd like to make a change. I'd like to just stop. I'd like to get off this ride and I'd like to get on this ride please. This ride is not fun anymore. Is there a different one? This ride is making me sick.

And it's great because it's the same person in the mirror who made all those bad decisions. Same guy is going to make the good. Yes, yes. Please do it. I love stories like Donald and the calls we've gotten earlier. It's so worth it guys. You can see somebody out there is going to get a sweet truck from Donald. I know that's right. At a great price. Hey, what's up, guys? It's Jade Warshot. Now, I know a little something about saving money.

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or you just want to keep more of your money in your pocket, this is a win. Go to boostmobile.com/room z. And make the switch today. That's boostmobile.com/roomz. 25 dollars forever requires customers to remain active on boostmobile and limited plan. Paul is in Las Vegas up next. Paul, welcome to The Ramsey Show. Hi, George. Jay, thanks for having me. Sure. Welcome, Neil.

Hi, I had a question. So, I'm just getting into baby set number six. I paid off all my consumer debt. I've done the emergency fund, and I'm investing for my retirement. Way to go. Here's the situation on my house. I bought this house three years ago.

It was from my in-laws at the time. They're no longer my in-laws. I bought the house from them.

They had a solar put-on-the-house prior to me buying it. When I bought the house, I told them. I said, "I'm buying the house. I don't want to assume the solar alone, though, and we'll keep the solar

“in your guidance and name. I'll continue to make the payments on it." Which I've been doing?”

Now, I'm entering Baby Step 6. I did a title search on my house. The after I purchased the house, the solar company put the lean on it for the equipment on the roof against my former in-laws. I owe 32,000. Well, the solar loan is 32,000. I owe 92,000 on my house. I'm wondering, do I pay off my house? Or do I pay off the solar since regardless at the end of the day when I go to sell the house? I'm going to have to pay off the solar anyways." What was the situation with the X in-laws?

Do you still communicate with them? I hear in there. I mean, I have it set up to autopay on the solar

account every single month. I don't really have to deal with that in like the aspect of sending them money, but I'm still on good terms with them. Okay, but you're making the payments? Correct. So what was the deal with them? It sounds like they got the best deal here. You're making the payments. There's a lean on your house, but it's in their name, but there's really no risk on their part because the lean is against the collateral's your house. The equipment lean, so it's not against

“the house, it's just against the equipment on the roof. So they can come repo the equipment?”

That? Why not? I have like a moral obligation, and I made that agreement with them that hey, I'm going to make the payments on this. I'm just not going to assume it, and that's where I'm at right now, and I've continued to make those payments for over a year and a half after the divorce. I'm guessing they don't want to have the money to pay this off. Correct, they do not.

I'm trying to understand why I know it's spilled milk, but I'm trying to understand why you would agree to make the payments. Like why you would go that far, but not say I don't want anything to do with it. Period. Do you see what I'm saying? Because I get, I get that, and at the end of the day when I went to purchase, I tried to see if I could get out of the full or a green accident. I didn't want to assume it to put more debt on my own,

myself, and put more stuff on my credit. And so I just, at that time, you know, I was good with them as good with my x-wife at that time. I was like, yeah, I'll just continue to make the payments on this. And I made that agreement with them. I have a lot of respect for them. It's, yeah, and on bad terms, or anything, and I don't want to screw their credit over by saying, right, right. I'm done paying it. Do you know if this lean is actually real and record it on your home? Because sometimes they use this as

a scare tactic, and it's not actually valid. It is real, and it's record on the home, because I owned a couple of property, a couple of parcels, and when I split and fold one of my parcels, up the beginning of this year, it was an issue on it. And they were trying to say, well, you can't sell it until you pay off that lean, and I was like, most of the equipment lean, and then they ended up letting yourself a property that was attached to it. So now, when I go to

sell the house, it's going to be an issue with selling that. When do you plan on selling the house? Probably in the next two to three years. Okay. I kind of think you have to think of this as though you bought the house in any other way, other than the way that you bought it. If you bought the house in any other way, you would have assumed all of this, and it would be on you to take this over anyway.

“So I think I'd have to do anything that way. So you have the money to pay this off?”

It was during my emergency fund. How much is in there? In my emergency fund is around like 38 to 40. Okay. That's in the high yield savings, and then some of that is an account that I just have for my house, or all my bills, for my house, go out of that I put money into that every month. Okay. I think it would simplify your life. Yeah, I would just pay it off today, and then rebuild the emergency

It sounds like you could do this pretty quickly and kind of just restart from scratch here.

“Yeah, what's the, I'm just curious, what's the percentage on that loan for their solar panels?”

So that's the other thing. So my home loan, 91,000, that my payment on it is a thousand dollars a month. I have nine years in four months left on it, and so that's a four and a half percent.

The solar's 32,000, it's 2.9 percent, and I don't know exactly, but maturity date is in 2046.

Yeah, it's like, let's get this out of our life. I would. It stinks, because you were charging, save all that money up, you had an agreement with these in laws, then they were the x-in laws, and I'm guessing there was nothing in the divorce agreement about the x-in laws loan, right? No, there was. It was just sort of a verbal part of the thing, and that's where I'm like,

I know I could just stop paying it tomorrow if I really want it, and I don't, I don't feel right doing that. No. I looked into trying to do like a solar X, the company, and I couldn't find one that was like really a reputable one that I didn't get. I feel like I was getting a scam buy from. Well, here's my thinking, because I'm, I guess, as they act like a debt relief company where they tell you, hey, stop making payments, and then we'll negotiate with them, it'll take your credit,

but you can get half off something like that. So I'm wondering if you can negotiate with the solar company at this point and explain the situation and see if they might settle for a lower amount. Yeah, well, that's the other issues with the solar company. It's out of business, so now it's a

breakthrough. Is this through the lending company, which is still in business, I guess? It's, yeah. It's

even what's the last, you might see if you can negotiate. Yeah. And say, hey, I sort of, you know, adopted this solar loan, here was the agreement, if you're willing to take, you know, 25 grand, I'll pay it off today, right, you check. It's worth the try. Yeah. I would at least try that. Worst I can say is no. Right. So that would be the route I go, but I would not make extra mortgage payments until the solar loan is taken care of. And I, like your point, it's too much to

rob you of your piece to go, well, I'm going to let it get re-powed on my roof, taking down the solar and affecting my credit or whatever it would do, who knows. Oh, that's messy. X in laws.

“That's about as messy as it gets. James is in Baton Rouge, up next. What's going on, James?”

Okay. So I have a, we're in the middle of our get pay off and not a word. We have a car. And I

gaze to basically my question is from down the ramp to perspective, if interest rates matter,

or if it's just that, that's to get rid of a debt. Yeah. There's two prime methods that people tend to think about when they're paying off debt. One is an avalanche method where they are thinking about the interest rate in terms of which debt to play off first. And then there's the snowball method, which is the one that George and I and everybody at Ramsey suggests where you're looking at the debts in term of balance. Full balance owed. And so when you really look at a person who

is interested in paying off all of their debt, the data does show that the debt snowball method is the way to go. And people have the most amount of success in paying off all of their debt if they use the

“debt snowball. And the reason for that is you get small wins quickly. And so that's what I would say”

when it comes to paying off debts, what tell us about yours? Well, we need my wife to start our pay off our debt journey about two years ago. We reach the point where we pay off everything, but the house, the student loans and the car. Okay. And we built up about six months of order emergency fund. Why did you stop? Why did you stop without doing the car in the student loan? Oh, what would not that we stopped? We're kind of in the middle of that.

But you stopped to build up the savings as what I'm saying. Yeah. Well, my thought process on that was all of those are with percentages that you know, we started our journey in the secular world. I was getting most of my advice from you know, other financial people. And so in our mind, it was better than paying off that we can't beat in the market, right? And then build from there. Okay. So how much do you have in savings?

Savings about about 15,000. And what's left on the student loans? The student loans are actually fairly fresh. My wife just graduated last year if I was a working-hunter school. And what's the balance? About 30,000. And the car loan? About 18. 18. Okay. I get rid of that car loan and use

And I know it's scary to lose your savings. But we're really gaining his traction on the defray journey. Let's give him a copy of the total money makeover to read. Hang on the line. We'll send it your way. Thank you. Welcome back to the Ramsey Show and the Fairwins Credit Union Studio. I'm George Kamel here with

“Jane Worsha. Stacey is up next in Tampa, Florida. What's going on? Stacey?”

Hi, George and Jane. Thank you for accepting my call. Actually, basically, I'm trying to keep

from going back to a shelter. Oh, my goodness. The homeless shelter? Yeah. I was three, only got out of it about three months ago. I managed to take $100 since I got out of there. But I owe the IRS and child support and child support has already put in a call. I made a mistake to call the IRS and child support thinking that this child would convince them. But now they're wanting each one with 750 a month. So IRS 1750 a month and child support is 750 a month?

Yeah. Okay. When you call, when you call them, when you call them, what were you hoping to do?

I mean, once a year, I could be 201 and the other one, maybe 300. Okay. So you thought to be a

much lower payment and they said, nope, this is what it's going to be. Yes. Wow. Are you working? I know. I'm so much shelter. I am. Okay. What are you doing for work and how much do you make? I am a practice for surgeons, receptionist.

“And I make a 2500 to protect a month after Texas. Okay. Is that 40 hours a week?”

Yeah. All right. What's your living situation right now? I'm currently 19 a.m. to pay efficiency. How much is that amount? I can afford a thousand bucks a month. And then if you owe this child support and IRS, that's 1500 extra, which is all of your income gone and you haven't even put food on the table. Oh, my phone or my bus class, because I don't have to be a co-editor that's under my feet money. How are you getting to work right now? I'm literally

sure. I'm just about to. I don't think it does. Okay. Oh, my goodness. I'm so sorry. What happened that got you into this situation originally? Mental health, no, which breakdowns. I have 39 years of trauma. So I, unfortunately, keep going into the depression and I can suicide and do you have medical support right now? Yeah, I thought the other thing I need to mention into, I have to go to therapy every week to keep me going.

That's the reason I came to Florida to run away from home, my trauma. And the road came to Florida about six or seven months ago. I know about a year, actually. Another thing about it is, like, it's mine from the shelter. So yeah, it's, it's been tough, but it's a few to go back to a shelter.

I've never been in the number one I do it again. I find time was more than enough and I need to

“help get mentally healthy and pay off my debt. How much debt do you owe total?”

Do you ever take about 35 crime between the IRS and the child support? Okay. And is there a judgment against you for these? I just, because I'm in the divorce, my husband or property taxes, so they give them to me and he took my far-one came, my pension, my house, my car, he took everything, because all of us are down. So I had your case. Your wages are being garnished for these payments, to the IRS and child support? Now yet, they are in the process of it. Not with the IRS,

and the IRS, right now currently. I'm trying to make like 50 dollar payments here and they're whenever I can. So you're thinking for me from the, what is it called, where they don't give you? It's when I was in the shelter, I was desperate and I called them at home my situation. And it put me on something where they do not charge me interest for a little bit. Well,

you know, get started and catch up on everything. I'll call them up and I told them, okay. So

“I'm currently working. I want to make them in plan wood, but I can afford, so I can, they have to”

set. They're removing me from that no interest thing, the gentleman that I spoke to that told, "Make you told me that you just want to, like, you know, don't do anything right now." It's like, I'm literally just out of the shelter. I'm just not getting the money. I need a little bit of time, but unfortunately, the gentleman, when I said, "And remove me from that, so I'm not starting to creep in just once again on the IRS." And with the child support, I call them and I told them,

"That one that you know, payment plan." And they told me, and then I also modified my child's

a book, if I'm out of decking out, no, one got $400 a month. Yeah, that's a huge chunk of your income.

I'm going to have fun there. So they should adjust that. And I would fight for that.

“Can you get that prepared? I guess there's a, you know, there's a 20-28 is when they can do a”

modification because it sends the people who are through the shelter, however the shelter either returned it and it's placed it. I don't know, but I do not get the paperwork. So now this end because it sends the paperwork to the shelter and then they have a responded, "I'm no longer eligible for them to modify my child support." Okay. Do you have a social worker that you're connected to? No, probably the shelter? Yes, I do have a social worker. I would lean on them to see what resources

are available, what programs are available to help you get your head above water right now,

and even fight for you because you're doing a lot. You're doing a lot to just try to fight these things, pay what you can, go to work every day. So in my mind, number one, you got to take care of you. Because if you don't have your mental health and physical health, you can't go to work. And if you can't go to work, you don't have an income. If you don't have an income, we're going to be back in the shelter.

“So that's how it prioritize it and you need to put food on the table first. So here's what you need to”

focus on with your 2,500 bucks a month, the four walls, food, utilities, housing, transportation, like your bus pass. And that might mean we don't have a car for the foreseeable future, but at least we can keep the bills, pay the lights on, we can eat and be on that insurance. Any insurance you have to pay, let's make sure we have that covered. And if that means you can't pay whoever else, that's tough cookies. And we can deal with the ramifications of that later. But the IRS is the one that is not going to go away.

And so we want to get, get them off our back and see if they can lower that payment. It sounds like you're, you're trying to talk to them. They haven't been super reasonable, but you simply do not have the money to pay. So at some point, they're going to have to give in and go. All right, 300 bucks a month is what we'll take on a payment plan and same with the child support. I did, um, Monday, Sunday, uh, court documents indicate in the River North just navigating my

check from child support. I did appeal for it and explain and my situation once again. So I'm still waiting on that. I just did that last week, um, the appeal. That would be fine. I would be fine. And keep in the, in the meantime, look for whatever extra work that you can be doing. That's within walking distance. That's within bus past distance. Even a couple hundred extra dollars in your pocket is going to go a really, really long way to make

you feel a little bit more secure in all this. Even asking at work, is there extra work I can do overtime, come in on the weekends, anything to bring in a couple extra hundred bucks? That is breathing room for you. Oh, wishing you the best. [Music] Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real

money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles. We use on the show whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

You don't want to overpay for your next house or sell your current home for less than its worth.

“And that's why Ramsey trusted connects you with vetted real estate agents who have the experience”

to guide you step-by-step to make smart decisions, not expensive mistakes. Connecting is easy. You can go to RamseySolutions.com/agent. You fill it out, compare agent profiles, interview your top choices and pick the right one for you. So you can go to that website, RamseySolutions.com/agent for free or click the link in the description if you're on YouTube or podcast. Christy is in Washington, DC, up next. Christy, welcome to the show.

Thank you. Thank you so much for having me Georgian Jane. Absolutely. How can we help?

Well, ultimately, our question is about pain for college for three kids.

First, we want to thank you. We want to thank total money makeover back in 2009. My husband and I paid off of $92,000 in debt in 22 months.

“Wow. That's not all. So thank you. That set us on a pretty good financial path, but not perfect.”

Because, like I said, our question is about pain for college. We have three kids. One is in our second year of college. One is going to be a senior. One is a freshman. And we're okay right now, but we're going to run out, basically. So our question is ultimately what's the best path? We have some investments and we want to know what the best path would be.

All right. Are there any scholarships involved? Are they working? Tell us all the components that need to come together. Sure. Aside from just you guys' cash. Sure. Our oldest is in Chobious, sophomore. She did get a number of three scholarships,

smaller scholarships, but basically we're paying almost full price. In our middle daughter,

did get a nice sports scholarship. She'll be a senior in high school. Okay. But we're already know she has a nice sports scholarship, which we'll pay for a little over half, but it's still going to be out of state. Yeah. Okay. So we're going to be around 20 per year. And that our son is a freshman in high school kind of unknown. So we're just going, like when we run the numbers, we're just like we're paying, we're in Virginia.

We're going to pay, you know, basically full. We're just trying to be conservative and we're going to pay full price. Okay. So the biggest thing, the biggest thing here is college choice, right? So going out of state, although there's a scholarship there, that's a big deal. And so I'd want to know, are there any other schools offering anything? You know, because once you have as an athlete, I can tell you once you have one school, it kind of does kind of open up

the doors with some other schools of the same statute. Yeah. So I would be looking into that. Okay. And then the other thing we are in state nothing as a now. Okay. Keep looking. Yeah. Because if she's also a good student, she might find that she can get academic schools and then walk on to the team that she wants to do. I had that option too. So if sports is a

“thing, but she's also smart, I think there might be other ways you can play that to where she can”

still play. Okay. So how better scholarships and be in state? Because if in state is 15 a year and you're paying full price, that's still cheaper than your half off out of state school. Right. And I got to say this when it comes to sports. If she stops playing, she can lose her scholarship. Like if she goes does freshman year, she's like mom, it's too much. I or I hate the team. I hate the coach. Whatever. It doesn't play. Now she doesn't have any money and she's in an out of

state school. So I just want to make all those things there. Now with the freshman coming up,

obviously we need to start looking at maybe can we do community college first and do those

genetics there. Right. So I think there's some things that we can tweak with the senior and with the freshman so that we're not spending way more than we need to and we won't run out of money as quickly. And then there's a other part where it's like, can they work a little bit? Can they start saving up a little bit towards this and have some skin in the game as well? Yes and they actually are. They actually have three new jobs. Okay. Good. So how much do you guys have that you

could utilize that as non-retirement money? Okay. So well, that's our question. So long story short, after we did our debt snowball, we're in a good financial position. We moved from Connecticut to Virginia and the house we bought was a foreclosure because it was a good deal. We fixed it up. We did pretty well on it and building our dream home became possible because of that. And so what we did was kind of ram the inspired, not kind of totally rammed the inspired. We sold the house that

but we moved into a two bedroom condo while we built our dream home and this seems like a lot of

“story to tell us something simple much, do you have Christie? Not that we don't want to hear it but”

for college just in general. Because we can just look at your assets and go, okay, how much do you have it as non-retirement that we have access to? That could be stocks that could be savings whatever it is. Well, um, could you sell a property? Is that what you're getting at? Well, yes. Okay. Kind of as getting at the condo that we lived in. We kept and we confronted for the last 11 years. It's been wonderful, great investment. It is worth 1415 and we owe 130 on it. Okay. And so our question is should we sell

that condo and basically, I mean, we would have more than enough to pay for college to be a college fund.

Uh-huh. You'll walk away with like 250 grand that becomes the college fund. Right. It's been a very good investment. Where's the condo? Is it even in Virginia? Right here by us. Yeah. Oh, it's by you. Okay. What is it, Caswell? After all expenses and the mortgage is paid

“all of that. Uh, we get about 1,000 a month. Okay. Where's that money going right now?”

The college. Okay. So when you say to college, where is the current college savings? A 529. Great. How much is in the 529s across all of them? Okay. After we paid for our first year of our first daughter, um, we are down to about 20. Okay. Left and that will get us through that plus but we're putting in, we're putting in the 1,000 from the condo plus from our monthly budget, another 1,000. So between the two, we can pay for

another full year and then our second daughter goes in and we can get about halfway through that year

and then we're going to run out of that 529. Okay. It almost feels like a bit of a no-brainer, I think, to me because knowing that there's two behind you that are coming, I would, you know, and the condo is cool. It's cash flow. It's not like it's like changing your life the thousand

“dollars a month. But in many ways, this is the college fund that you should have been building”

from the beginning. Yeah. So I know you love it. And now what you can see is, hey, this was kind of a secret blessing. Yes. This helped us cash flow college. None of the kids are going to have student loans. But that also means we need to reset the conversation with the kids that we're not about to walk into the mall and just buy whatever we want. We're going into this store with a shopping list.

Here's what we can do. Here's what we're not going to get. Because if you give a kid,

carte blanche to go anywhere in the world, they're going to choose anywhere in the world. When you tell them, hey, we're going to cover four years at an in-state school and you're going to work your tail off and apply for scholarships and grants. Now we're all in agreement. Yeah. You guys set the budget ahead of time and make them align to the budget. Because my guess is you probably want to take some of this money and check

it towards your current home, right? Get that paid off. And your freshman's not going to be happy about this because he saw the other siblings get to do whatever the flip they wanted. Right? There's going to be a little bit of-- Well, it's not fair. Right. Why did they get to go out of state? Yeah. No, I got you. And that's definitely, we are already having those conversations.

Yeah. And here's the math on this, Kristi. You sell that condo. You pocket 250 in a high-old savings account, even. That will net you about 700 bucks a month just from the interest off of that. With no hassle, no landlording, plus your 250 principle. And then just take from that and pay as we go. Exactly. Now, you could shovel a lot of that into the 529. It doesn't have a whole lot of time to grow

and have the compound growth. But it's still nice to have that grow for the next four years for your high schooler. Right. And we get a-- we do get an encouraging nice tax break. That's great. On top of the tax-free withdrawals for qualified education expenses, that's personally what I would do. And the 529 plan is great for that because there's no income limits. The contribution limits are virtually unlimited. And so that becomes your glorified college savings account,

that condo. So I would grieve it, say goodbye to the condo, get rid of the renters as soon as you can, and enjoy debt-free education for all three of those kiddos. It'll be worth it. Hey, George Kamel here. We often talk about how being normal sucks when it comes to your money. But guess what? Normal isn't so great when it comes to your job either. Normal is staying in a job you hate, dreading Mondays, and working for people you don't even like.

And we refuse to settle for the ordinary. In fact, we are anything but normal and we are proud of it.

And right now we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. So head over to RamseySolutions.com/careers and apply today. Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. And today we're going to break down one of the questions we received this week. Here it is. Why should I set aside 15% to retirement before paying off my mortgage?

I love this question. We get this a lot. And one of the reasons is compound interest is really time-sensitive. Right, guys? And your mortgage isn't going anywhere. But the time in the market is going somewhere. We want you to capitalize on that and spend as much time in the market as you can.

A dollar invested today is worth far more than a dollar invested five years from now. So so important there.

“And the truth is your mortgage has a fixed payoff date regardless of when you attack it extra hard.”

Of course we want you to do that at some point. But yeah, because the thing is if you just made minimum payments on your mortgage on a 15 year, it's gone in 15 year. Which is still way better. So there need to be investing because there's no guaranteed sort of fixed force savings plan there like there is with your mortgage. Right. So it is wise to do both. And the Ramsay plan lets you do both. We recommend investing 15% once you're debt-free with an emergency fund. And the extra money, you can put towards college or extra on the mortgage. And if you do it our way,

you have a reasonable house payment, 25% of take home. You'll have extra to do all of this stuff with. And then once the mortgage is paid off, you can invest 20, 30, 40, 50% to your hearts to lie dry and maximize your wealth.

The problem is if you skip investing and you pay the mortgage faster, you arrive at a paid for house,

which is kind of nice. But then your retirement is very thin, and that doesn't feel very good either. So you're scrambling to catch up. So there's a way to do this guys in the Ramsey plan. Let's you do both. So check out Ask Ramsay. It'll walk you through your financial goals based on your specific situation. Do it at RamseySolutions.com or you can use the link in the description if you're on podcast or YouTube. Brailin is an Austin Texas up next. Brailin, welcome to the show.

All right. Thank you so much for taking my call. My boyfriend loves this show and I've been debating back and forth on a life update upgrade. I would say a car upgrade. Okay, specifically. Tell us more. So I'm really wanting to upgrade to a luxury car. I do work in real estate so clients see my car from time to time. Right now I drive a 2021 Toyota Camry and there's quite nothing wrong with it. And I do not have a car payment. But I've had a really good year the last two years in real estate and I'm wanting an upgrade.

“So I wanted to hear y'all thoughts. Is I want to know the number one driver? Is the number one driver?”

I have the money to do this and I earned it or is the number one driver? I'm a real estate agent. And I want people to think that I do really well. So I want to drive a really nice car. It's honestly split 50 50 like when I get in a car. I want to feel like I'm in something really updated and I have worked really hard and I know I deserve that. And there's a little bit of that too. I do want people to know that they're well taken care of and you know I'm a great real estate agent.

Okay, what's this car going to cost? Around 70 K. And what are you making? So far this year I've made 280. Whoa, John. Did thank you last year I did 428. So you didn't need the car to smash it out real estate. There's people driving a luxury car with

that socket real estate. I just want to let you know. So I don't want you to think that the car is the difference maker that you're going to get clients. You're already doing it in your camera. So clearly, nobody's reaching out to you because of your cool car. It's what I'm trying to say. So I want to free you of that. No matter what car you drive, you're just a really good real estate agent who helps people. Yeah, the question is do you have 70,000 saved? I might not work right now. My boyfriend does all my

investing for me. So shout out Joe. He's listening right now. Did you say your boyfriend does all your investing for you? Yeah, just as a guy or is he, is he just like an investor version? He's like, hey, I'll get to set up. Yeah, he just loves investing. He works in like investment properties. And you know, do you know how it's being invested or you're just like here you go, Joe, you got it. I do. I'm sorry next to him when he does it. He's teaching me. So I want my friends to.

“Okay. I'm a little concerned, but let's move on to the next topic. What is your net worth?”

My net worth is at 380 right now. Good job, total. Okay. So where did all the money go? I won't do you mean? Because you said you made 428 last year, but your net worth is 380.

Your net worth is 380 or you have 380 invested. I have 3, no, my net worth.

“Okay. I don't know. It's going to be a job question to be honest. Well, that's why I wanted to”

make sure that what is the big job is helping net worth is assets minus land worth. He says my net worth is 8 at 380. I told him I was calling today. I was like, you know, he said we had big purchases. What does that mean? I bought him World Cup tickets for his birthday. Wow. But that's not. Okay. That shouldn't be. I mean, it's expensive, but to George's point, if you made 4, you know, 4 something last year. Like, where did all that go? So yeah. I had to pay back.

Yes, that's true. Okay. So let me ask you these questions. How much do you have in liquid cash? I'm not sure. See, this is why I don't like Joe doing this. Because you, if you have to

go, I got to ask Joe for how much I have in checking. We have a problem. Yeah. What is in your

checking slash savings across those two? Probably around 70 right now in my checking. So then I have about 48, maybe 80 invested into Ross 40 or 80. And I don't have all the, I don't have the sheet in front of me, but we have a sheet. Okay. Brailin. Yeah. This is what I'm going to say to you. Uh, this is a side from the car. I really want you to know you work really

“hard. You're really good at your job. You make a lot of money for a single individual. You should”

know where all your dollars are, especially if you're saying you want to buy a luxury vehicle. One of the caveats to being able to, to really spending that kind of money and feeling good about it is knowing that I am a keeper of the funds. Like, I know how I'm spending my money. I know where every dime is going. There's, you want that backing this purchase because that lets me know that you, not Joe, but you are a financially responsible adult. And so I want you to have that

clarity on your numbers to feel really good about it. I don't want you to have to go to him and say, Joe, what do you think? I want you to be able to look at the number. You know what I'm saying? You deserve that with all the work you've put into this. Okay. And this is, this is a little like I just started this the last two years. So I am still learning and I didn't learn, like no one taught me

about it. Yes, I totally get it. I totally get it. It's the first one and it is overwhelming, you know,

working as much as I do and then having to learn about it all of it. But two years. It's the process. But I'm going to push you on this. I'm going to push you on this. It doesn't take two years to do a budget and be able to look and say, here's how much I have in savings and here's how much I have in my checking. That doesn't take two years. I want you to know there's numbers two night. And you, you help people with numbers all day long and real estate. You know how much your clients

have in savings, but you don't know how much you have. Okay, he sent it to me. She's a little stingray now. It'll take good. Okay. Okay. Like in my checking, I have 50. Okay. And high yields, I have about size. That was about that was a deduction because of talking, I had to move stuff over. Okay. Okay. I obviously had a big chunk to pay in that. Robinhood is actually 300. 300,000 invested. Okay. I thought so. I thought that that was your retirement. We're not going

to touch invested money. So let's use future income. But here's the parameter. You're not going to buy a brand new car right now, even if you had 70 grand spend. That was my question, too. It's like we're seeing financing what are you also not? No chance. No lease. You're going to pay a cash and you're going to buy a used luxury car. It sounds like you've got maybe around 45 to spend because what I'd want for you, if you said 50 and checking five and high yield savings and the

rest is invested, I'd be thinking, okay, I want three to six months of expenses that's liquid. So I would move whatever six months of your expenses are into that high yield savings. That's an emergency fund. And then whatever is left, that's kind of your car fund. And I would separate the two. Open up a different high yield savings account called car fund. And once you have, let's say 40 50 grand in there, you go buy yourself a nice used luxury vehicle. So what kind of

car are you looking at? I'm sure you already know exactly the make model and trim level.

“I really like the Mercedes GLC groups or the GLE groups. I like this for you. So that's 70 grand new, right?”

Yeah, here's the good news. Mercedes go down and value heavily. So you can go buy a 2022 version of that that's still super nice, low mileage, and you can go pay cash for that once you have the money, but you gotta get your money in order. Right now it's a mess. You make great money and you got nothing to show for it in savings. Yeah. So let's get control of that before we start buying super nice things. Yeah, and we'll give you a copy of, we'll give you every dollar, we'll give you a

copy of the total money makeover, read that, and you don't need Joe for that. You can do that on your own. And you should. Take a back seat, Joe. She's got this one.

left wondering if you're even doing it right. And that's why we created investing essentials.

Join me in Dave Ramsey at this two night virtual event to learn Dave's playbook for investing and wealth planning. We'll break down 401k's mutual funds passing on wealth and more. So join us September 1st and 2nd. Take it start at 199 bucks. You can get yours today at RamseySolutions.com/events or just click the link in the show notes. Our scripture of the day, Matthew 626, look at the birds of the air. They do not sew a

rep or store away in barns and yet you're heavenly father feeds them. Are you not much more valuable

than they? Mary Kay Ash said aerodynamically, the bumblebee shouldn't be able to fly, but the bumblebee

doesn't know it. So it goes on flying anyway. Is that true? I did know. I figured it must have the aerodynamics built in. You really think it's sitting there thinking about it. I don't think so. I don't know Mary Kay. All right, I'll take it. It's an interesting thought. It's an interesting thought. I get the principal underneath it and I respect it. There we go. There we go.

“Speaking of which K is in Houston, Texas, what's going on K?”

Hey, thanks so much for taking my call today. I appreciate it. Absolutely.

Yeah, so I am going through a divorce after leaving an abusive marriage, and I'm under water every

month, and I'm sorry. I have two kids, two in ten months, and I'm just trying to figure out how to manage all the costs coming up. I'm so sorry, Kay. I'm about 5,000 in the whole month after doing my budget. Once the divorce is finalized, I'll be okay. I'll be like right at where I need to be each month, but right now I'm having to cover my rent on my new apartment, plus my old mortgage, and the bills at my marital home. I had to move out of my house.

Why are you having to do rent and mortgage? Is he paying anything to the mortgage?

“He paid half. I'm just getting half of everything right now. That's what our county”

standing orders require is that I pay half of all of our bills until something else wouldn't place. So everything is 50/50 until divorce is processed in the final. Just until there's a temporary order in place. So we're working on that with our attorneys, but he's dragging his feet and making things drag out longer and getting more expensive. Is there a cap on it at all? Yeah, I'm hoping to have it set in September. It's September. So I'm hoping by mid to September,

I can get some clarity on like, okay, maybe I can stop paying the mortgage and stuff, and then that would give me at least that. But at this point, I'm just, I just, yeah. Okay, who's got the kids? I do. I have them full time.

“Okay, so of the 5,000 that you're underwater, tell us how much money that you have to your name”

that you can spend on the things that are not half of the bills. Like cash, what have cash on hand? Yeah, I mean, is the income being split? Or is it just the expenses being split? No, so I, it's just expenses. So we each, like art and gut, like I'm giving, I'm paying half of the mortgage on the website, but you don't get half of the income that you guys shared. No, no, so I just, I actually make more of them. So we just, I just stopped giving him

money, essentially. Okay, so how much are you bringing in every month at the, you know, how many pay you get two paychecks or one paycheck? Yeah, take, I usually get to, I've thought my retirement from getting 42, 30, I get 42, 40 a month or every two weeks. Sorry. Okay, maybe $400 a month. Maybe $400 a month. And then what is the mortgage costing you? You're half of it. $3000. Wow. And then you rent. So right now my rent is $2000 because I did a short term lease,

but I'm hoping that'll go down a little bit when I find something longer. Okay, so you got $3,400 left after that. And then you get still have all the bills to pay. Mm-hmm, and that's probably on his on the house. Let's see. It's $415 about, you know, that's average and then on me for water and internet and electricity, it's about 450 right now, but that was because I long story short,

right now? Is he still there? Just, yeah, just myself. That's it. Just your stuff. Just my spouse.

Oh, your spouse. Okay, so I want to make sure I understand, towards aside from the mortgage, the other bills that you're on the hook for are $415 for the old house. And then $450 is your kind of utilities and bills for the apartment. So that's, I mean, the two car payments. Sorry. Okay, so one car payment. And tell us what that is. So here's the $750, so half is $750. And then my total car payment is $1,300, and I'm paying that on my own right now. Oh, my goodness.

And why isn't yours part of the half split? Yeah. Why are we not splitting this car, but not splitting your car? If this is decided by your state. It hasn't been finalized yet, but the end, like hopefully by September, he will end up covering the home and his car. No, no, you said earlier, you said earlier that whatever the decree was said that you needed pay, you guys had to split the household expenses, which I sounds like included by the cars. And I'm saying why only his car and not your car? Yes.

So I was paying only half. And then he told me I needed to pay for my own car. Okay, so no, no,

“either the state says, if you have to follow the law, so does he? Why does he get to decide right now?”

Yeah. No, that's a good call out. Because here's what I'm wondering. You said you're 5,000 in the

whole and you make 8,400 bring it in. That means your expenses are over $13,000 a month. Based on what I put in every dollar, that's what I was getting out. So what are the other, let's let's pretend the 1300, let's split that up now because let's let's go ahead and do that and say, okay, yeah, we're both on 650 on that. Then what's the other major bit ticket things that we're missing? Are there a bunch of other debts that aren't accounted for yet?

No, I only have two cars in the house, the mortgage, there's only two debts. Oh, I have a credit card that I have currently, but I'm paying the minimum on that at the moment, which the minimum on that is

500 because that's where I've been putting my attorney fees. Okay. Is that car in your name only the moment?

And the loan? No, unfortunately, it's not. Okay, because I'm trying to think of a way to get you some breathing room right now and selling that car is very one. But you should have, but you should have breathing room because if I go through everything that you told me and I take all this out, they're still 1135 dollars there. Now granted, we haven't done groceries yet, but I know we're, I know we're near. I am going to countering regularly at this point. Okay. That's to the

situation fair enough. Yeah, 800 bucks a month. 800 bucks right now. Okay, so now we're starting to get in the way. Sorry, thank you because they, I did not have that cost prior, but now I have to pay for day care and you will not pay for half of it. But again, if you did not have day care before,

“but here's the thing. We're either going to play by what the state, if you, if you have to do what”

the state says he has to do what the state says. So it's your children to just take out day care that I be paying towards that house. I would be talking to your attorney and saying he's not playing fair. He's not playing fair. So it's on them to, to force him to play fair. It can't just be you texting. I'm saying please pay. No, no, absolutely. No, no, and that's what we're working on. So let's get with the attorney and then redo the budget based on what you actually have to cover,

and that will give you at least a clear picture. And then 45 days from now, we're going to know and in the meantime, I would be talking to my attorney to see what financial moves I can make legally to try to free up some breathing. What I can sell, what I can move around, because going five grand a whole in the whole every month is not going to work even for another month and a half.

“No, if you do it, George said you should do, which is split everything and do it, do it fair.”

You're going to be right at zero. You're not going to be far below, but you're going to be right at it. I do think counseling is really, really important for you. $800 though right now is really, really high. I'd be trying to see what I can shave off there or even speak with them and say, hey, and sometimes even your insurance might cover partial or full, and so maybe go through that and see, and maybe cut it down to two or three instead of four or five. Just things like that,

go through the entire budget and see what we can trim right now, just to get by. That's all we're trying to do is just break even into your point and go ahead. I was going to say the things that I would, if you've calculated this is my half, this is the dollar amount for my half. How you want to

do that at this point because if he doesn't pay his half of the mortgage, that's on him. If he doesn't

“pay his half of the card, that's on him, right, but you need to make sure the kids get to daycare, right?”

So I would prioritize it in that way. That puts this hour of the Ramsey Show in the book.

So remember, there's ultimately only one way to financial peace, and that's to walk daily with the

prince of peace, Christ Jesus.