Your Bank Account Shouldn’t Define You

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

So we're here to help you transform your life. From the Ramsey Network in the Fair Wins Credit Union Studio, this is the Ramsey Show. I'm George Campbell, joined by my pal and co-host of Smart Money Happy Hour, Rachel Cruz, and we're taking your calls at AAA-8255-225.

Naya is going to kick us off in Cleveland, Ohio, Naya that I get that right or is it Naya? >> Naya. >> Yes, it does. >> First charge.

>> All right, we're off to a great start. Naya, how can we help today? >> Hi, so I was just wondering kind of what Naya has been just set up our budget on just to give you a quick back story. Naya has been, we alone, can we got married early

because we wanted to just have the foundation going forward into our wedding as far as finances? I work in real estate, so the insurance rates got super high for me, and I was like, well, let's let's get on a normal insurance and then put the rest of our money.

So that we could cash low our wedding versus pulling from out of our savings, and we've mostly been able to do that, except for the final cost of the food base off of the head count. But I just started reading your total money make overbook. Our original goal was to buy a house properly within the next year,

a year after the wedding, the wedding's this coming day. But after starting your book, I realized that we may not have enough to start it as based off of the three to six months in savings. Currently, we have about 30,000 in savings. Most of it is in a higher savings account, and we don't touch it,

whatsoever, again, except for pulling for the final count for the food. And I thought that was a good amount, moving forward to get a house. But our three to six months work. Our six months work of savings is about $24,000. So I was like, oh, maybe we don't have as much as I thought.

And so I wanted to know your guys is with them on, OK, how much do we need to start saving for our house? We're both completely deaf free. We paid our leads through college. We don't have car loans or anything like that, and currently we rent. Awesome. Well, you guys are doing great.

I want to encourage you, everything you've laid down like they are crushing it. And I'm glad the book just kind of gave you a little pause to go, hey, we're going to be broke if we just jump into a house with close to nothing down or nothing in savings.

So you're right that we got to get through this wedding first.

Then we'll see what's left. Money-wise, make sure we get the emergency fund. And then anything beyond that becomes our down payment savings plan.

“OK, yeah, how much will the food cost for the wedding?”

Right now, we're looking at about $35, $100. It could go up depending on the final RSVP. But we're assuming we're going to put out $35,00. And everyone keeps telling us that last minute expenses are going to come up. So in our mind, we're just even though $3,500 is the amount that we think we're going

to spend. We're thinking of $5,000. Sure. Yep, I think that's a great plan. So out of that, you'll have $25 left.

And you said $24,000 is a six-month emergency fund for you guys. Correct. OK, yeah. And what you could do, just to kind of press play on this and keep moving forward because you guys-- well, you're in housing.

I'm trying to give your careers how stable they are. Would you say you guys are in a pretty good spot? We're going to put a good spot here, I'm looking real estate. And then he is an engineer. I'm going to have a fair stable job.

“OK, so what you could do, honestly, is we say three to six months of expenses”

in the six-month side.

I always like more-- I'm more comfortable with that if there's two people working,

or one person working, multiple kids, there's a lot going on. That six-month cushion usually feels good. But you guys-- you don't have kids. There was a responsibility there. You're wanting to buy a house.

So if you wanted to go to the three-month, the 12,000 versus 24, 6-month, I would be OK with that. So you could say, hey, we have $12,000 earmarked after the wedding for our emergency fund. That's a check. That's maybe SIP-3.

And the baby SIP-3B is that down payment. And you guys will have $12,000 to kind of jumpstart you guys into a house to get you there faster if you wanted to. More conservative people would lean to the six-month. But because of your situation, I'd be OK if it's closer to three months of

an emergency fund. OK. OK. And is there any-- again, I just started listening to you guys in reading the book. I didn't know if you guys had any more suggestions.

We always just know the little bit below our means.

But all of the things that I'm learning in the total money makeover is more than what I've ever known.

Well, as far as home buying?

No, in general. Life tips. I mean, there's a lot. That book will cover a lot. You're right.

We'll get you very far in life.

“You can actually build a whole lot of wealth just doing that.”

But there's a lot of minutiae when it comes to the offence and defense with getting the right types of insurance and not having too much insurance. And you also need to look at investing. And we need to be investing 15% of our income. And there's match beats for off beats for additional.

And so all of that gets laid out in the total money makeover to help you live out those principles. Yeah. Yeah, I would say, now that you know, working together as a couple is going to be big because money fights and money problems, it's one of the leading causes of divorce in America.

I mean, it's just, it tears apart couples if you are not on the same page with money.

It's a really hard marriage when you're both on completely separate pages. You just continue to have conflict in but head. So, so I would say that's a big goal for you and your new husband to say, hey, let's we're going to work together. We're going to be a team.

Our income when we get paid comes into the household into a checking account. And we see that as the household income, right? Not just mine and yours, I get this is our money. The more you guys can work as a team is our functioning, the relational side of money. That's a big thing you guys can be working on and talking about.

And out of that, you're going to have goals together, right? This house. This is a great goal for you all to say, hey, let's look at the numbers. Look how much we need for a down payment of at least 5% on a 15 year fixed rate. How much cash above that 12,000 do we need to save?

And so you guys will find a kind of a number of range for that. And then as you do a monthly budget, what you guys need to do together, if you hold

on the line, we'll pick up and give you guys every dollar for free for a year.

A little wedding gift. A little wedding gift. Wow. Yes. So that you guys can start budgeting together.

Because that's another part of all of this is actually being intentional with your income. Not just living billar means and just kind of doing it, but you're actually doing it with intentionality, right? But you actually know where your money's going. So there's bits of pieces to all of it again. I think that book is a perfect guide to all

of this. And you'll reference it back.

“So just focus on the one thing you need to know at this time.”

And then you can circle back on the investing side and saving for college one day. So don't feel like you need to learn at all right now. Your singular goal now is get through the wedding debt free. And then whatever is left over, that becomes our emergency fund plus home down payment. And I would earmark it in a separate high old savings account so that it doesn't get

co-mingled with the emergency fund, that just helps me not feel guilty when I go to use that money for the home down payment. And then just figure out, hey, how much can we realistically set aside each month? Have you guys done that yet? To go with our future incomes?

I think it's going to have three grand a month. And you're setting aside, right now with the wedding, we're only setting aside about 800 a month because we're wanting to pay for most of it through cash flow. But realistically, after the wedding, we have decided we'll set around 2,000 to 2,500 that's why each month.

Great. Okay, so that's about 25 grand a year. So in one year, you'll have 25 grand for the down payment and 2 years, it becomes 50 grand. Well, plus the 12th. Plus your 12th.

Rachel's very generous for 7. I know. And what really will happen is you guys will be making more money as a married couple who is very intentional and all of a sudden you'll be saving 3,000, maybe even 4,000 and all of a sudden this will speed up the process and you might have 50 to 100 grand saved up in no time.

And don't rush it, do it when you're financially ready. Nobody's yelling at you if you get out at 28 versus 24. Yeah, renting is not bad for now. And you guys are doing awesome, just like George said, you were on the right track without even knowing it.

Yeah, you're in the right track. The testics show that half of Americans don't have enough life insurance, or they don't have any at all.

“I don't understand this, John, why don't people want to take care of their family?”

They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it and one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids and I immediately went and got term life insurance.

That's a good punch. Oh, you're telling me, and for decades, Dave, I've sat across people who've lost spouse. They've lost somebody important to them. Me too.

They don't know what to do next. Me too. I mean, to have a crisis here, and you know, you got two options while you're sitting in talking to a young widow. She's concerned about how she's going to invest all this money properly and not miss

this up or she's concerned how she's going to eat tomorrow. That's exactly. This is the two options. And turn your dad gum family term life insurance going to replace income path, dad's cover funeral expenses, so your family can actually have the opportunity to just be

sad. Yeah. Exactly what it's supposed to be.

Jeff Zander and the team of Zander Insurance makes it easy and affordable. I've used them personally for 25 years that the only people I'd trust go to zander.com or call 800 356 42 82. Beth is up next in Chicago. What's going on?

Beth, how can we help today? You with us? Oh, yes, I'm here. I'm sorry. Okay.

Crisis inherited. How can we help? Hi. So my question was regarding a prenat. My boyfriend and I have been dating for about a year, so we're speaking about marriage.

And he had mentioned that he would never get married without a prenat and I've always been

against the idea of a prenat. If I do understand the logic behind them, but any of the words a lot more than I am financially he has a lot more in assets and all of that. So I just feel like if a man says that he won't get married without a prenat, it makes me feel like it's an unsafe marriage for me to enter into because he's planning for divorce

basically or preparing for it. Have you shared that with him? Those exact words? Yes. How did he respond?

Well, he said that he feels like I'm being ungrateful because he would be willing to take on me and my two children and I shouldn't question.

“So this is an act of charity for him and you should ask for no more.”

He's already doing the most by letting you into his life. That's, I mean, that kind of, that's how it makes you feel. Does that feel on brand for him? Like was that a shocking answer? You're like, wow, that's not what I was expecting you to say or was it like, yeah, it's

kind of like his, like, emo. Well, I was pretty surprised when he said that and it was a little upsetting and I don't, I mean, I understand that money is important, obviously. But there are things that I value more than money and there's no amount of money that would be worth a divorce to me or like dragging my children through a field marriage and all

of that. Sure. Are you married for both of you or one of you? It's the second marriage for me. I was married young but we were married for about six years and when I was getting ready

to have our first, our child, he decided he didn't want to be married anymore. So I've been a single mom for the last 11 years and this is his first marriage.

He's never been married, he's no children so he's, he's only, he's been alone his whole

life. Okay. And, and you have one child, you said, I actually have two, so I had a second child, she, she just turned three. Okay.

Okay. Not with him though, correct? Right. With his boyfriend. Okay.

“So, how much more is he worth the new, would you say?”

10 plus million, a million, half a million, less than half a million?

I don't know exactly, the number that he gave me was two million, like between retirement

and asset savings, all of that. Okay. And what is he wanting to protect going into this marriage exactly? Anything that he has right now, so all of his assets and retirement and all of that. He says it wouldn't be fair, if we were to get divorced, it wouldn't be fair for me to

get half of everything he's worked for. I understand the logic, and I'm not saying I want half of everything, I'm saying I don't want to go into this marriage, like, talking about divorce because I'm 36 years old, and if I'm going to be getting divorced in five years, I'd rather not get married. Right.

Right. No, I think you guys are just missing each other, communication was. He has his reasons and you have your reasons and neither of you are getting to the root of it and understanding each other. And my problem, Beth, is, I don't think he's necessarily in the wrong, because I will

be honest, our teaching around pre-nups. It kind of varies a little bit, like, we don't really have a hardcore teaching.

“I think we are more hardcore, no pre-nup for a long time.”

And as the years have gone on and different situations, different, you know, divorce law and certain states, like, you know, there's an understanding if there is a significant difference in that worth that if you choose to protect it with a pre-nup, like, you know, it's not necessarily wrong, right, for in his sake.

that itch about is the way he's responding to you in it.

And it makes you feel like he's valuing his money over you. And that's how it feels. And so that's the problem that I have, right, his response to you at the beginning of this call what you said.

“I was like, oh my gosh, that's why I asked like, is this like his, is this how he is?”

Because he kind of sounds like a little bit of a jerk, right, versus someone that's going to take care of you where you're like, I don't like the way this is making me feel, you know, in Bethany, and you could, you could own it all and say, this may be more my issue than yours. And I wish he came with some empathy, I'm saying, I completely understand how this does

kind of feel off because I could only imagine being a single parent raising two kids. And then I'm putting this paperwork in front of you that feels so like litigious and it's just, oh, it's not a good feeling, but here's where I'm at, right, like if you like met you in the conversation with it and valued you in it, I think you may be feeling better, but it's like he keeps doubling down in the, the thickness of what preenups due to people,

the grossness, he doubled down on that. Do you know what I mean? He didn't help the preenup, like the, the preenup, you know, fight in that. Let me send it up. Well, and what happened here is, the preenup is a tool.

It's not evil. It's just a tool and he's using it as a weapon to say, well, you should be on your,

“you should be great. Yeah, that part gave me the extra shirt, but I think there is a compromise”

here where you can, instead of you getting defensive, just say, hey, I'm open to hearing more about what you're thinking when it comes to this preenup. Can you, can you share some details about how this would be set up? I would love for this to be fair to both of us. And yes, sorry, George.

Go ahead. That's, that's it. That alone. He's like, oh, I can be disarmed now and not have to bow up. Sure.

Yes. You knew going forward how you guys are going to work together in your marriage with money. Like, that may be helpful too. And that's where sometimes preenups can get a little bit convoluted if, if you start coming, coming, coming finances, which is what we talk about that you need to be working

together and you are one, while his retirement, all that will still be in his name. But we see it from an emotional standpoint as this is our household finances together. Once we get married, we say, we are one and every aspect, and I would want to hear that from him to know that like, like, when we say I do and we do this life together, I want to know not only is it going to, is our expectation is it is forever, right?

“That's what we're going in saying, but also that we're going to be one in the subject of”

money. And he's already started the conversation off as already it's split, right? Like, we're going to be two is how it feels. So I just want to make sure in the marriage, you guys are working together and that you are being taken care of and that he's being taken care of.

Like, you know, you both have that given take in the marriage when it comes to money.

And I don't want it to be one sided and sometimes, on always, people with that pre-nap

mentality sometimes continue it on in the marriage to continue to isolate the other spouse to say, well, this is my money, this is your money. I'm working hard, right? If you look down two years and if you want to be a stay at home mom and he makes, you know, enough for you to do that, but yet he keeps saying it's my money over here, that is, that's

not a mere task for an allowance, I mean, that's where it's toxic. So if I would get a full picture of what money is going to look like in this marriage, and if the pre-nap makes sense as a part of that, great. But if you guys are unaligned in every other area with money, that is a huge red flag that we should not move forward.

Yeah, that makes sense. So get clear with them. Tonight, sit down and say, hey, I want to know more about this, would I be a beneficiary as long as we're married on your retirement accounts and on the real estate? And any future wealth, any appreciation of the house and of your retirement accounts, any

wealth that we create together from here on out, would I be entitled to half of that? Those are the things where you start to understand and get in the minutiavate. You might go, oh, okay, that makes sense. It just sounded harsh on the front end. Right.

Yeah, and he didn't help us case, though, the way he treated you. That sounds true. So yeah, so I think you go in with some caution, but a lot of clarity, Beth, and I would not sign anything until you feel comfortable, though. So I don't want you to feel intimidated.

Never feel pressured until we're better happen now, ultimately, that's another red flag.

Yeah, yeah. And I feel like if she would break up with me over a cleanup, then that isn't cheating his money. You dodged the bullet there if that happens. I agree with that, too.

Yeah. You should be thankful. You should write him a thank you note if that happens. To spare you. Oh, my goodness.

Well, we're rooting for you, Beth. I hope you guys can come to a consensus that is fair and equitable for all. Without the itk, that's the goal here.

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“All right, Dan, as in Kansas City, up next, what's going on, Dan?”

Hey, hey. How can I help? I just had, so I have some money that was a couple years ago, I put in with a family member who has some investment stuff that you've done. And it's not a huge part of my savings or anything, but it's just a little bit.

And I guess it wasn't really worked out in the initial agreement, like, what his cut of the money was going to be. And he managed the investments, and so we're working on that now. And what was mentioned to me was, like, a 2 in 20 structure with, like, a 10% hurdle.

So I can get the first 10% and then anything above that, like, he would get 20% but then

somebody else went to the 25% and to me, those were the 20% of the number. What was it? An insider? Or is this some back alley deal? It's just a family member who talked with some finance people and worked out some

investment thing. He's been doing that and making money, like, actually all around. What kind of investment is it in the market? Like, index funds are mutual funds. Yeah.

It's in, yes. Well, it's based on the S&P 500 for the most part. So this is the highway robbery. The standard in the industry is around a 1% AUM fee. That's assets under management.

Sometimes it's one and a quarter, maybe upwards of two in a crazy scenario. And he wants to pay. But 20%. Yeah, that's just anything above 10%, but, like, anything above the 10%, if we make over 10% profit on the air, he gets 25% in the air.

And he's sure, though.

“Does he work for an actual, like, registered investment advisor, like an actual firm?”

No. You keep saying, well, he's got some guys, like, he's, like, a middleman and he's, I would get your money away from this guy, ASAP. Who's this family member? Is it an actual, like, a cousin, a brother?

Uh, yeah, an uncle, it's not, like, running it through anybody else. He's handled it on, so, but it's just something that. Okay. So he's a DIY investor, and he's just offering his services to you for a steep fee. Uh, I mean, we haven't really agreed on the fee yet.

That's kind of what happens if he leaves all your money. So, uh, if I lose that money, but it's not, it's not a huge part of my, how much are we talking? How much have you given him so far? Uh, it's only 10 grand.

Okay. So, what I would probably do, Dan, when did you give him this money to invest? Uh, about two and a half years ago. Okay. How old is he?

Uh, 40. And does he do this regularly? Like, is this, like, a side he'd been working on it with his own money for a while before he, like, opened it up to anybody else? And again, is he, is he using, like, a fidelity or a vanguard, like, does he have

a bar? Yes, he's doing it. Broker. I think it's, uh, you trade. Okay.

So, it's basically something you could be doing, because he's not really moving when you're

around. He just picked an investment and put it in. But you'd be better off just doing this with an actual professional. Yes. Who's licensed?

Oh, right. Okay. So, how much money did you originally put in two and a half years ago? Uh, I put 10 grand in two and a half years ago.

Okay. I was going to say, I was like, if it's still on 10 grand, this guy needs to go to progress. I mean, what? I mean, the market has done really well the last few years.

Yeah. So, number one, I would, I would untangle this whole deal.

It's just, you know, the whole money family, minutiae, it's not, it just never really

ends up good. So, I would just say, hey, bro, I just want our relationship to be clear of any level of entanglement when it comes to money. I just, I'm starting not to feel great about it. You've done nothing wrong.

I freely chose to do this, but I've been, you know, reading some books, doing some stuff, and I just think, are you married? Yeah. Yeah. You know, me and, you know, my wife, we've been looking at our entire financial

picture, and so we're going to kind of consolidate some stuff, move things around. So, um, I probably will just cash out with you and move on.

“That's what I would do and not even worry about it.”

But if you feel like you can't do that and all of it, then I would charge him, um, what the average market rate is if you had an investment professional, look at that, which is one percent. Or to say, hey, I've got it. I've got my wife and I, we decided we're going to work with an actual financial advisor

at XYZ firm, and we're going to move our money over there. Yep. And if he gets real upset, that's a good clue that this was a bad idea. Okay. Okay.

Okay. But I'm glad you are at least up for that. Curls and when is the money? It's crazy. Usually this call ends with, and all the money's gone, and I can't get a touch with

them. Now, that would be weird. But that'd not be crazy. You went until him. It sounds like he's just, he likes this stuff, and he does DIY, and he came up with

some deal that was like, all right, I'll make a little bit of money to manage this for you. I don't even know if this is legal. It sounds crazy.

“Yeah, I don't, I think it's kind of stuff like an investment club type thing, so it's”

mostly fine. We have input into it. But yeah. Well, why don't you just do it, Dan? Well, I don't know exactly what it is, like, I don't know how to do whatever it is.

You know, he's not just putting it in a stock and leaving it. He's doing like some covered call type stuff, I think. Oh, boy. Okay. There's some more risk here.

I personally, I would jump on Ramsey Solutions.com, click on Smart Vester Pro, and you'll sleep better at night, knowing that all this money can disappear, because you're a thing. You can lose it all, and you have no stake in the game. Yeah.

And the fact you can't explain what he's doing, never put your money in something you

don't understand. So you've got to figure out what he's doing. Okay. just for your own stake, Dan, don't give someone 10 grand to be like, I don't really understand what he's doing, but he kind of knows what he's doing. You don't know what you know.

You don't even know if you know what he's doing. Did he make any promises? Was he like, hey, man, I'll do it on the money. No, no, nothing like that. I mean, he gave a, like, yeah, he just said it was doing pretty well for him.

And he's been making, I don't know what the percentage of whether he said at the time, but he's decent amount. And I was like, okay. Like, I'm like, I put all my money in there, like, but I have some, like, put there. Sure.

It's fine. Yeah. Hopefully, we talked you off the ledge to get out of this weird situation. And it's always a family member. That's the part that I'm glad at least it wasn't a whole life insurance thing where

he's like, he said he's managing my money. And it's really just a life insurance salesperson who was at Northwestern who sucked you into this deal. Totally. Yeah, it could be totally fine, Dan.

We may be being dramatic. But from the relational aspect, I would not, yeah, I was from a commingal money in family. I'd rather be a stranger. I can, yeah.

You just put it in an index fund.

“Probably getting out with think the same returns is what he's doing, honestly.”

All right, Jack is in Lexington up next. What's going on, Jack? You there? Jack? We were so close to talking to Jack.

All right. There's a good effort. Let's go to Joe and Raleigh instead. What's going on, Joe? Good.

How come we help? I have a quick, whole kind of quick question.

First of all, thanks for taking the call.

I just graduated school from Indiana, moved down to North Carolina. I have about 65,000 in student debt. I've got my master's, my MBA, and then I have about 7,000 in a car. I work actually kind of rough car allowance so that time it gets paid for. I'm getting married in two months in my fiancee.

We're very blessed. She has had money put aside for her. It's about $120,000 and it's going to be all right, money we're going to combine our finances. We've talked about what the best to do with that money as soon as we get married and combine our finances.

Part of me, thanks, yes, I should just, we should just use that money and wipe out all the debt that will now be ours, what we're married. But also being a good man, I am. I feel like I don't want to just take her money and do that, but it will become our money, if that makes sense.

And yeah, we could use it on, I could use some of it and then pay the rest off on my own. But I feel like you guys would probably just say, just use it.

So you're curious to hear it you guys think.

Absolutely. Using it and set yourself up.

“I mean, this money was created for her to get a leg up in her financial future.”

And now she's got you. It's a wealth multiplier. So yes, it feels like you're taking a step back temporarily and it stinks because you're like, man, this was half her money's gone now that was set aside for her, but you're just setting yourselves up.

This is a great foundation to go off of. So absolutely, I would do it. And you would do the same if she was in your shoes.

And so it is your y'all's money, our money.

Yeah, and you're not using all of it. I mean, you're using a good bit of it, like 50K left. I was going to set, yeah, 48,000 left, which could be the starter or the fully funded emergency fund, right? Part of that could be there, and then some of it for a dump in for a home and you guys

keep moving along. So the goal is to get to wealth as quick as possible and getting debt out of the picture helps you get there fast. If you run a business, you already know this. Bad information leads to bad decisions.

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That's netSuite.com/Ramsey. One phone's a triple eight, eight, two, five, five, two, two, five, Spencer is in Hollywood, Florida, up next. Spencer, welcome to the Ramsey Show. Hello.

Thanks for having me. Sure. How can Rachel and I help? I was just calling because on me, my fiancee, I was 25, but me, my fiancee, I'm looking to get married and all this, but I haven't, I couldn't anymore, with her, her mom.

Her mom wants to stay with us. Her mom doesn't have a good relationship, really, that's happening, and we're kind of in between what we should do, but she doesn't want to ban her mom and leave her, because she's a single mom with two other sisters, and we're just having that, I guess you could say that guilt of that bring her along with us.

“Okay, so the mother-in-law is asking to move in with you all, once you get married?”

Yes, that's correct. And she has two other daughters? Yes, and the thing is, she has her aunt, that is in Jacksonville, she's in the Navy, but that's not really like her, I guess, because I said, they've made it very smart to live at that.

Okay, why does she need her oldest daughter? Is it financial, is it that she helps take care of the two little ones, like, what is her primary motivation to live with you all? I think it's the combination of a lot of things you said, plus more, I guess, for, like, because you could say more accountability, and she's even, she means things aren't like

odd of the responsibilities, but I'm thinking about it. Your wife does? Yes, correct. That's not for her mom and everything, I guess that's like a, I guess, if she leaves, that's like a guess, you know, a gap that she has to sell, you know, feel like a single mom.

And what's the relational side?

“You said there's a bad relationship, who's it between?”

Well, when I say, like, bad relationships, it's like, I guess, like, you could say, like, hot and cold, like, um, it'd be like, I guess you could say one day, like, they get it along, and then next day, this, I guess, you're bringing some drama into the house by inviting her in, is what you're saying. Yeah.

And I guess, like, my standpoint, I'm like in the middle of it, so I don't want to play, like, a both sides, and, you know, and I respect both of them, and I feel like, I kind of give her ideas, like, saying, like, you know, you could love your mom for a distance,

Maybe, like, go on to Jackieville.

It's not a bad idea, but at the same time, I feel like, you know, I don't, I never

live with her mom, so I'm saying, like, maybe it won't be a bad idea. She comes through the flush for a little bit, but the little bit turns into a long time. Yeah. And the long bit turns into, well, this is where we live now, and it's a generational

house. And that's fine, if everybody agrees to it, but it sounds like you and your fiance, you're both like, this is not it. This is not the life we pictured. Yeah.

I mean, I didn't mean, I don't mind, but for her, you know, she, she's all in that. Spencer, you don't mind, you really don't mind your mother-in-law. So you guys open and the fridge together, and the two little kids running around with your new wife, you don't mind? Oh, and not really when you say like that, but there we go.

Yeah. It's okay to admit, you do not want this. It doesn't mean you're a bad person. It doesn't mean you don't love her, but there's a reason people get married. They all leave and cleave.

There's a sense of independence that we're creating a new life for us together, not dragging everyone along with us and funding their life as well. Yeah. And the guilt trips your mother-in-law will give to her daughter because it sounds like the emeshment of their relationship is super deep, and there's not clear boundaries.

And your, your fiance has basically become in a way another parent to your mom, to her

mom. You know what I mean? Like, it's like the roles have flipped, and that's not healthy. Not healthy. It's not, yeah, it's not the way the progression's supposed to be.

And I know life isn't perfect, and there's messiness, and things happen, absolutely. I'm not saying you abandon her mom or anything. But it is not wrong for you both to say, "Hi, we are both in our mid-20s. We're going to choose to start a life together, choose to start our own nuclear family, and we're choosing to do life together."

And now I'm leaving the home mom, and that's not crazy, right? And she may have a hard situation, and you guys can choose how much you want to help

“in that if you want to, but there's no, there's no responsibility there.”

She's the daughter, right? Her mom is in charge of her own life. And so when she depends, and it's so independent and codependent on her daughter, that's not good. And so if you're fiance decides, yes, I do not, I don't want my mom moving in with

us. I think it's not only a wise move, but it's going to be a really hard conversation, because when you put boundaries up with someone who's not used to boundaries or new boundaries, it's going to piss her off. Like it's going to be really hard, it's really, really hurtful.

And she can do it in a really kind way, but she can't control how her mom's going to respond. But that is going to be messy, messy, but that doesn't mean just because it's hard, doesn't mean you, it's not right. So this needs to be between her and her mom, so that you don't need this triangulation where now it's like you're in the middle going, what do you want to do?

You'd be the typewriter. You don't want that. You support your life in these setting up the boundaries, but you don't need to get in the middle of it either. Correct, correct.

“Yeah, that's why I did listen to what she told me and I gave my advice to her by spayout”

and makes you know, and when I come over, it's like nothing I feel like. Can I be honest, Spencer? I think she wants you to take a stand. I don't think she wants you to be Switzerland. Yeah.

She wants you to bow up and say, you know what? This isn't okay. And I support you in you stopping this before it gets at a hand. And then go, hey, we're not going to leave you on the street. We want to come up with a plan to make sure that you're covered, that the kids are okay,

but that doesn't mean you're going to move in with us. There's other options, right? If you guys weren't getting married, what would she do? Yeah, so I guess the panel is she's supposed to move the Jacksonville trial either sister. I guess that's the plan.

It's great. Yeah, yeah. Keep it. Keep the plan. Great plan, love the plan.

We love the plan. We shouldn't be so supportive of that plan.

“You should cover the moving costs for her to get to Jacksonville.”

That's how much you love this plan. You see what we're going with this? Yes. I need you to steer this. What are your hesitations, Spencer?

What's causing you to not just be like, yes, absolutely. I mean, I guess no, I guess the patient is really, you know, is that I guess what she tells me.

I guess it's always like mixed emotions, I guess you could say like, that's fair.

One day, something is different, and the next day is a certain note. One day is like, you're saying, like, you know, I show past my mom and she did stuff for me and like, you know, like, okay, what if they had like that idea, what if we did get a house and she came. But then it's idea that I would say, oh, about like, okay, one of the one years turns

into many years and that's not something like that. Yeah. And is she working full-time? Yes. Okay.

And I think her mom just got actually surgery and surgery so she's been out of work. Well, she still has her job, but she's been out of work for about a month now.

Yeah.

And you guys can be helpful, right?

“We're not saying you just like abandon a relationship by any means.”

But co-mingling your whole lives together, that's a totally different step. And she doesn't need to feel good about her mom taking care of her. That's why you choose to be a mom. You take care of your kids, like that's what you do. They don't, oh, they're not indebted to you because you took care of your kids.

Yeah, that's selfish too. I'm going to have a kid so that they can take care of me in my old age of 42. How old is she? Um, at least in our 40s. Okay.

Yes, she's not elderly. If this was someone who's like, hey, they need care, this is different. This is a barely a middle-aged woman who can work full-time. And yes, it's a hard life to be a single mom with two young kids. But it's not impossible.

We hear calls all the time.

And so she needs to figure out how to be independent because that's what's actually best for her. Yes. Okay. So you're actually doing this out of love, not out of spite.

“And I think you need to convince yourself of that.”

Spencer, you need to get an energy if I've five hour energy shot before you get a little aggressive in there, you know? Sometimes I'll slap myself in the face just to wake up, alright? Get in the game, bud. Let's do this.

We got this. Spencer. I'm hoping the best for you guys in setting up this boundary conversation. Call us back if you need a Spencer. And call us back if you do let her move in and then it's two years later and you can't

get her out and she's not paying any of the bills and it's chaos in your house. We'll also try to help you then. We will. It's just going to be less fun. We'll always do.

You try this. This is the preventative medicine. I know. Versus the emergency surgery. We need to evict my mother-in-law and her two siblings.

I know. Right, right. That's the nightmare scenario. I know. And what if you guys want to move and she's like, well, no, we need to stay here.

My job is here. I can't afford. So you guys are really locking yourselves in with some handcuffs if you do this on top of the drama and the stress. I wouldn't be doing that as a newlywed couple.

If you've been married 30 years and she's elderly and needs care and you decide to take her in, that's different. But you're going to create a zoo that you did not sign up for. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian healthcare ministries is a great option to think about.

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Get started at CHMministries.org/budgets and use promo code RAMC. That CHMministries.org/budget and promo code RAMC. Welcome back to the RAMC Show and the Fair Wins Credit Union Studio. I'm George Campbell, joined by bestselling author Rachel Cruz and we're taking your calls at triple eight eight two five five two two five.

Mike is in Philadelphia up next. What's going on, Mike? How can we help today? How are you? We're doing great.

What ails you. Good. So, all right. So, I have been pulling my hair out past a couple days about a new truck.

“That's how Dave Ramsey ended up like that, man.”

Be careful. Oh, pull that hair out, doesn't come back. I'm close to it, I'm fully great, you know, I used to have a nice face of round on now, I'm all great about it. So, that's life.

Listen, my car, I've had it on, you know, on the road for years now without a car team. I love it. I'm the one percent of the world who doesn't have a car team and I like to say. And now, unfortunately, the car is on a list that my body shop on life support. Was this a big surprise?

Or was it like, yeah, it kind of was there? Yeah. Yeah. Wasn't a surprise. It, I think this thing was coming, but I was in denial.

So, you know, insanity with 250 something on it, I guess, all changes left in the right premium gas. I take care of it and I'm really hoping to squeeze just a couple of more, you know, miles out of this thing before it had to make the jump to a new car, but of course, here we are, you know, life's brings us on our here.

I spent all day yesterday on the Toyota Tundra and lot, looking at the Tundra and seeing how we're ridiculously expensive they are, versus going to my body shop right now, throwing the whole tax return that all the repairs and driving off and just hoping the squeeze just a couple more miles out of old berries is his name. Old berries?

Old berries. Old berries. No, man. I love a berry. It's been good.

Baries are always good. Barry has been fantastic to me and I think he still got some life's left over the front of the family. Listen, no. Well, we don't listen.

We don't listen. Okay.

“I don't know, Mike, how much money do you have to buy a Tundra?”

So, I have, I would say about six things up. Six thousand. Yes, correct. Okay. Okay.

Okay. Okay. Okay. So, 35 down on it. 35 hundred?

Yes, correct. Down. I thought we were anti-payment. Thought we were a one percenter of, and we're down in our vocabulary. Uh-oh.

I know. I don't know. I think Barry's going to feel disappointed in you, Mike. What's the repair cost? Very easy.

So Barry, all in right now is 2300, and then now I just got surprised with a new part plus in 100. So, whatever that is. 3100. Okay.

Okay. Okay. So, what's the car worth after you do all this? Listen, we're at 216 something thousand miles. I don't know.

I don't know. I don't know. What kind of car is Barry?

Because 2,000 percent in infinity and 35.

Okay. Yeah. Yeah. Um, Mike, do you listen to the show? What?

“Do you do, do you, um, yeah, do you listen to the Ramsey Show a lot?”

No, no. I actually just started following the whole group pretty recently. Okay. Okay. We'll be united.

We'll be united. You were the one percent. We had a car payment before you knew it. Because you call a show that helps people get out of debt, not into debt. So, I'm aware.

And that's, you know, but I have heard the rare stories where, you know, they're like, "Yeah, sure. Why not?" You know, you have this and that going on. Why not?

Oh, we get it. We do tell people to buy cars, yes, um, new cars, when they have the money to buy them. So, people will call it. And they're like, "Listen, I got 600 grand and a high yield savings account.

I want a new tundra. Then we'd be like, Mike, don't you do a new tundra?

If you have a net worth over a million dollars, go buy a nice car.

Mike, you're, you're kind of broke, you know? Can I be honest, Mike? You can be honest, Mike. You can be honest, Mike. You and Barry in six grand.

You don't need to be walking around a tundra lot, Mike. Yeah. You'll be a tundra guy one day. But, right now, champagne tastes on a beer budget, Mike. Yeah, no.

We can't. No, no, no. Do you know how much a tundra, you know how much a payment's going to be, Mike? I bet it's what, I bet it's what, 900. 9000, close to a glass of 1,000 $2,500 down with a drop in the bucket for a brand

tundra. Hey, do your math. Mike is new. So show. You made it like a car loan payment calculator?

Yes. So listen, Mike, this is what your car payment would cost you as Barry's sitting there on life support. But he's got another, he's got another life. What's the price of the car?

How much would a new tundra be? I know you know. I believe it. Well, we don't need that. Just say like, just say.

I do need to know. How am I going to know? I was going to do investment. He is the end-fested. Sorry, George.

She's just yelling at you over here, Mike. Give me a break. You pull up the investment calculator. Oh, God. Okay.

I see where you're going with that. If you went and got a new tundra, and you were like everyone else in the world, and you put away. How much do you think a payment is? Probably can we call it 900?

1100? How much do you think? Let's call it 995 views. 995 views. 995.

How old are you, Mike? 36. 36. 36. So let's say you're like everyone else, Mike.

You go. You get this new tundra, and you pay a car payment, and you do it over the next five years, then you're done with it. The tundra is five years old, you're done with the payments, but you know, I want the new tundra.

You didn't say anything. I want the 2030 tundra. So then you go get a new one.

“You stay in a cycle of car payments, because that's what ends up happening.”

So if you pay the car payment every month now, until you're 62, that's your life. Versus if you keep Barry alive, you start saving up. You pay cash for your cars, and you invest in a car payment. You paid yourself that car payment.

How much money would he have at 62 to you to have 1.4 million dollars of that?

You only put in less than 300 grand. Compound growth did the heavy lifting. So, or you could spend 50 grand on a car that was worth 40, that's now worth 16. And be paying payments. 6 years later.

Now let me ask you this, you know, the option to at least buy, you know, brings that.

“Oh, no, that's even worse, Mike, who sold you on that idea that guy at the dealership?”

That's true. That's true. Just wondering, right, right, right, you know, I had a feeling, so, but I figured listen, it's worth a shop to call in and just see what, you know, I know, and especially me, like I've been paying my pay my debt down like crazy.

How much debt do you have? I'm almost getting ready to do that debt, uh, debt free screen. Okay. Don't ruin this moment. Don't try it traction.

Keep moving Mike. Couldn't come at a worst time. One foot in front of you. But you know what, Mike, you have the money. You have the six grand.

So you're able to fix bear.

Cover the repair. You still got three grand. Yes.

“Then how much could you save up every month once you're completely dead free?”

How much could you save in a car fund? Well, uh, let's keep today through, so, you know, my emergency funded back. Up after this payment, the emergency fund is back up and replenished. Yeah. I mean, I could.

Could you put away a thousand bucks a month, two thousand bucks a month? What are we talking? Yeah. Yeah. I mean, because I don't have a, I don't have rent or a mortgage.

And what's your income? Oh, that 85. You make 85 grand a year. So you could buy up to a $40,000 car if that was your only thing with wheels and motors.

With cash. With cash. And you just told me, you could save two grand a month? Yeah. 24 grand a year.

Yeah. At the end of it. Yeah. I think about it. One year, you could have a 24,000.

I don't know. You might, I'd go find a $24,000 tundra a year from now. Yeah. That's used. That someone else said, I'm done with that.

I want the fancier newer one. 100%.

“That's the right way to go if you want to build wealth, Mike.”

But if you want to look good and feel good for just three seconds, you go get that new car with a big old payment. But man, I don't want to see future, Mike regret that. . If you're at the point where you think bankruptcy is your only option, stop for a minute.

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That's GuardianLIT.com/RAMSIE. It's very advertising. Results may vary and no specific outcome is guaranteed. [Music] Shantal is in Sarah's soda, Florida, next.

Welcome to the show, Shantal, how can we help? Okay, so my question is, I am a new mom and I had a baby about seven weeks ago. And my question is, I don't think you, my question is, does it make financial sense at this point really strongly considering transitioning from full-time working relatively well-paying medical job to a state-home mom with losing all benefits in all those kinds

of things from my current employer also while considering my husband's employment kind of decreasing grossly year-over-year, I'm just kind of lost at what to do at this point. What does he do? Medical sales? And sales just aren't coming through?

Well, it's a very seasonal area where we live in Florida, so most of the year relatively busy, but in the summer months definitely dropped off quite a bit. So kind of over the last two years kind of bring home has been decreasing just based on volume overall. Mm-hmm.

Okay. What was he making? What is he making now? I would see the range between 4 and 600,000.

That's a huge range.

Yeah, we're a little on the lower end, yeah, a little on the lower end kind of on the

trajectory for this year. Okay.

“Do you see volume picking up next year to get back to that half a million or 600?”

Probably not until 27 when more hospitals kind of -- So next year, though. Next year. Yeah, probably in the latter half of next year, I would say. Yeah, does your lifestyle support you guys living on $400,000 a year?

Um, I mean, he has two kids from a previous scenario, so there's three kids total now. Um, and I have been the one carrying like the health insurance and all of those kinds of things up to this point. Um, his company does have provide that, that's not a benefit. Uh, no, because he's an independent contractor in a Navy veteran, so he gets all his care

through the VA. Okay. And family's not included in that. No, it's not. Okay.

Do you actually know your total household expenses in a given month? Um, it is mortgage is probably 2100 fish and that range and we owe maybe about 240 on a house. Okay. Um, you know, then just like your regular, like --

“Well, would you say you guys spend $10,000 a month to keep the household running?”

Um, between all of the things that's probably generous as a child support included. Okay. Well, I'm, I'm doing math. You're going 10 grand a month is $120 a year and take home pay. So even if you made $250,000, you'd still be able to cover all of your household bills

easily on his income alone. Yeah. Yeah. Now, the part to factor in is getting marketplace health insurance, which you can check out our friends at health trust financial at ramsislusions.com and they can search for you

to find out what it's going to really cost is it might be 3,000 a month. You got a budget for it to cover health insurance for now. But I think you guys can afford that. But even if your bills are 13 grand, if you're making $400,000 in a bad year, you're going to be okay.

Yeah. I mean, and I think the biggest thing for me is transitioning from my contribution to all of that, which last year I brought in about 250, to going from all of that to 0. Now is that 250, like, you know, like I'm not doing my part, you know, as a, well, the hardest part about staying home, Shantel is disassociating your work identity from your

human identity as a mom. And that part is legitimately hard, because this is all you've known.

“You've worked really hard to build this career, haven't you?”

Yeah. So, yeah, invested all this, you know, master's degree for the last 13 years and working my butt off. Yeah. You've got to do here.

It got you to an amazing life.

And it's, I think what you're going to have to do is grieve that over time. And go, man, I work really hard for this, and it's not the right next thing for me. Right. Do you have this new baby now? And so that's your new thing that you are contributing to, as well as the household.

And that I think that has so much nobility in merit to it, even if it doesn't come with a big paycheck. 100%. And I say that as someone who's my wife stays at home and had an amazing nine-year career here at Ramsey was at the top of her game and dropped it all to be at home.

And it was a really hard decision for her emotionally, but it wasn't hard financially because we set ourselves up. And you guys have done the same with this amazing income you have. Yeah. I think the other portion of that is, you know, I have been working towards, you know,

obviously investing in retirement for a 1K rough IRA to try to set ourselves up, you know,

first, some point that would be able to transition, you know, I'm going to lose all of that

to you as far as like corporate contribution. Sure. But you'll roll over any retirement stuff you have. You can roll that over to an IRA, it'll continue to grow. And you can do a spousal spousal.

Rough IRA. You guys may have to do the back door considering how much you make. I do have one question to on tell them, I want to get back to what you were saying. Is the 250 year contributing part of the 400 or he's making 400? He's making 400.

Okay. Good. Perfect. Yeah. If you don't build wealth, making 400,000 dollars a year, you don't have a financial

problem to tell you have an identity problem. Is what it is. And the hard thing is, is so much of the applause of our world today, the score card at which we place our worth is our income, what people see, success, positions, all of that is what is applauded in our world today, which is really sad because a lot of that ends

up being empty. If you can flip that and say, hey, that is not who I am.

part of me, but that is not who I am.

It's maybe a part of me, but it's not my full identity.

“And so taking that apart, I think is so important.”

And for you and your husband to sit down and I would love him to affirm this in you that this is our household income. Like, yes, you were contributing to it, but regardless of who makes the money when it hits a checking account, we are in charge of it together. But you have as much say still into the money, even if you're not bringing it in, that's

a healthy perspective. And it's going to be hard for you because you are very intelligent, you're very hardworking. And I'll be honest, too. I mean, I felt this way when I went on maternity leave, even. You might go a little circuit, you might be like, oh my gosh, you're making peanut butter

and telling sandwiches for so long, or I'm nursing, or I'm, you know, washing, burp, you know, burp costs constantly and swaddled blankets. Like, there's a monotony to a new world that you've entered into. And so if you have to find a little outlet to kind of like find that part of you that is so gifted, that's great, too.

But honestly, embracing the season you're in, it's going to go so fast.

And I know everyone says that. And I even hate to say, because I rolled my eyes every time people said it, but it does. I'm like, it just flies. It flies. You're a contribution.

If you're wanting to stay home, and that's where you feel like you're, your spirit, your soul is pulling you, listen to that, listen to that, okay? Yeah. Because it is really so little for so long. Yes.

And it's going to be exhaustive. You can get a job again one day if you miss it. Yes. That's the good news. You're so.

And you're going to be tired. Like, it's a different kind of tired. I think it's more tiring. Yeah. A hundred percent.

I could not twice. I was functioning with adults. You don't have a adult conversation like we are now. So yeah, you'll miss some elements of your work life for sure, but if there's ways you can still have yourself fulfilled in those things, whatever that looks like is great

too. So, man, but I would, I would, I would say, listen, listen to your heart and become with that baby. If that's where you're being pulled. I would like to appreciate your help.

Yep. Absolutely. Good luck with the transition. Get some more. Congratulations.

I'm a seven weeks in. I'm surprised you're able to call in coherently. Oh, man. That's the most impressive part. So tiring.

So tiring. So tiring. As baby years, they're beautiful, but they're exhausting. I, I'm in it. I got an infant now.

I got a toddler. And I get home and I'm like, I thought I was at work. Now I'm at work. That was a joy ride compared to what's going on over here. I know.

And I know parents are different seasons, but it does get better and better. I know. Like, our season is the right now. I know the right now. I know the right now.

I'm like, it's perfect for us. Like, a five to eleven year old and like, stay right here at your yard. So fun. Don't grow. Don't grow.

Come dramatic teenagers. Hey, guys. George Campbell here. Listen, we need to talk about your phone plan because for a lot of you, it's like a bad roommate.

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Today's question comes from Toby and Missouri.

I have a net worth of $400,000 and my fiance would be out of school and getting a job

within a year starting out at 95,000 a year. I have saved 200,000 to put down on a house for a down payment. Should I buy my dream home for $450,000 in the best neighborhood in town or a house that costs 200,000 in an okay neighborhood knowing that we want to move into another neighborhood in the next couple of years.

We have no student loans or car payments and we'll be getting married later this year. Ooh. Okay. A lot of variables here. It's like a little riddle.

A lot of timing. I'm going big. Yeah.

“Well, I'm wondering, can you wait to buy the house until you're married?”

Oh, for sure. Why the urgency right now to get the. I would get the $450,000 house, but I would wait until you're married. Yep. Because then you know that you know that you know both incomes are there.

Because what if God forbid the mayor maybe the wedding gets pushed and you're stuck with the mortgage payment.

That's a little tight for your $100,000 income, which is amazing.

But you take on a $250,000 mortgage, I don't know what the payment's going to be because your take home pay. That's right. That's right. Yes, I would assume that after you get married, you guys will be making 200,000.

You put and maybe rent for one year right before you, before you jump into the new neighborhood and save an extra 50, 75, 100, right, to add to the down payment. And if you put 200, 300, 300 down on a $450, 400, 500, the options you have will be amazing. You'll pay off the mortgage fast and then fast forward, let's say your fiance wants to stay home one day.

We just took a call about that. Yep. Guess what? It's a no-brainer. Like, yeah, our mortgage is a 1,000 bucks a month or it's paid off no-brainer to do this.

Or are you jumping right now with that mortgage that's a fixed payment and it gets tight if she decides to stay home?

“That's the kind of stuff you need to think about with a home.”

It's a long term decision.

So I would wait, I think renting is wise for six or 12 months, then jump on it and get that dream home, my friend. That's a great question. I know. That's a good place.

Yes. Because we do, I mean, if you guys didn't have a big goal of like, oh, we want to be here and a $200,000 house was sufficient, you know, this is perfect, this is what we're wanting. And that's great. But if you know you're going to be moving up in home in three years, then I wouldn't

stay our stuff. You don't want to be jumping in and out of homes within a three years. Because you have the money. It's expensive, there's real turfies, there's closing costs, it's a hassle to move. You want home appreciation to actually, you know, have some foothold here and that's

going to take at least three or four or five years similar to the stock market. Because in a given year, the home price could actually dip for a little bit. And so I think you're doing it the right way, Toby, I would just be patient and wait till you're married to, uh, pull the trick on the home. That's awesome.

All right, Patrick is down the street here in Nashville, Tennessee. What's going on, Patrick? Hey, Harry, I'll be moving today. Great. How can we help?

Great. So I'm 26 years old and I just landed a job straight out of college with my green. I make about $73,000 a year, I don't have any credit card care. I do want to be a cool one. I've got about $63, $4,000 saved in a CD account and in savings.

Okay. And my CD account is about to renew here in the next month and I'm really just wanting to know is there somewhere else I can put my money to really let it grow and then how can I start to utilize these savings for the future? Great questions.

“You're doing really good at 26, what is left on your debt?”

What's the balance? So I only owe 25, just shy of $26,000 on a vehicle. That's a lot of money where I came from. It is. It is.

I'm more than willing to pay it off and I'm comfortable paying it off right here right now. And do it. I do a lot of fun with us. Prove it.

I've been putting it in the works but I just want to know, you know, I've got a considerable amount of money left over and I just really want to be able to put it to work especially since the job I'm in is a good salary and it's only going to increase throughout the years. Are you doing any investing right now through a retirement plan?

I'm not going to want to start. Okay. So let me run you through some napkin math here to help you. That's 63 in CD and savings. I would not renew that CD.

I would get out of that and just park it in high old savings. You're going to use 26 of that to pay off your car loan, right? Yes. So that brings you down to 37,000. Now we need an emergency fund unless you have other savings outside of this but you need

three to six months of expenses saved up in an emergency fund. You can park that in the high old savings. How much would that be for you? I think for six months it probably would be about one, four, thousands.

So we're going to take 24 out of the 37 which leaves you with 13,000.

“That's really the number we're working with and now think about it.”

You've got an amazing financial foundation, no payments.

Six months of expenses saved up 13 grand to now invest. And what I would do first is just fund a Roth IRA for the year. That's 7,500 bucks right there. Are you tracking what they on what that is? You know, I'm new of occurred by IRA but I'm looking why I'm not familiar with it.

No, it's all good. I'll give you a quick explainer. So an IRA is just an individual retirement arrangement. It's just an account that's outside of an employer where you can invest money with some tax advantages.

And so there's traditional IRA which means you're going to get some tax benefit now but you'll pay taxes later when you withdraw it on the growth. And then the Roth version says, Hey, what if you use your after tax money, essentially your take home pay to fund it, but then you don't pay taxes to Uncle Sam ever again. And so I love that tax-free growth.

Your whole the rest of your life.

I mean, young guy, that's some amazing opportunity.

So funding that for the year, the maximum is 7,500 for 20,26. So you can open up a Roth IRA, fund 7,500 and you'll still have some money left over which is incredible. And then beyond that, you've got to think about what are my future financial goals. So I need to upgrade the car, do I need to save up for a home-down payment?

And so you want to think about short-term goals, high-eld savings, long-term goals. Let's invest it. Yeah, I'm Patrick. At that point, we have what's called the 7 Baby Sips. So it's a thousand-dollar emergency fund, get completely debt-free, everything but the house.

And then a three to six month emergency fund. So you've done all of that because of the savings that you've done so well stockpiling that cash. And then Baby Sips 4, 5, and 6 is what you're going to move forward with. And Baby Sips 4 is funding 15% of your income into retirement. So that Roth IRA would be included in that 15%.

“So from now on, Patrick, you need to be investing 15% of your income into retirement.”

So that's $25,000 for you. Yep, $11,000 a year. Okay, you need to be going in an investment. So Roth IRA would have been included in that. Does your employer have a 401(k)?

Um, I'm still failing you. And I'm figuring all those numbers out. I did know that we have a pension after if you're age and you're a year circle. Okay. So if there is an option for any kind of retirement within your company, then that would

be great and any kind of investment. So sometimes there's a match as well. To where they go, hey, if you put in 3% we're going to also match 3%. You doubled your money, 100% return, just like that.

So that's the first place to go.

And then beyond that, like I talked about the Roth options. That's after tax money, but it grows and you can withdraw it without taxes again. And then beyond that, if you run out, you can go to traditional options as well. And I'll walk you through this Patrick and my book Breaking Free from Broke, I'll send you a copy.

There's a chapter called Wealth as Patience and you my friend have all the time in the world to be patient. You're a young man who's doing great. Yeah, you're on the right track, Patrick. Just remember, stay out of debt, invest in the long-term CDs, percentage wise, you're

getting what? What do you think a CD is right now? Probably two, three. Upwards at close to four, but not quite. OK, OK.

Better than I was thinking. But yeah, you're going to get better returns, investing your money in the market. But again, doing it wisely in George and his book, we'll walk you step by step by that. So make sure to read that when that comes to your Patrick. Can we give some quid pro quo, Patrick?

“Can you promise me you'll pay off the car if I send you the book?”

Absolutely. I'm planning to do it, and I knew that was going to be the first thing that we're going to tell him. Yes. We'll do the thing.

But how much is the payment on that thing? What's the car payment? It's about five, thirteen months. You just became $6,000 a year richer. You just got a raise, just like that, Patrick.

Man, I'm happy for you. Hang on the line. We'll send you a copy of Breaking Free from Broke, enjoy. . Rachel Keithy, on the show here.

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You know, I was just doing during the break. When you budgeting, tracking your transaction. Yep. She practices what she really do. I really do.

Yes. How did it feel? It feels so good. You're a little dopamine. Well, the Costco went hit.

Oh, that would never feel.

It's not like fun. But it's in the budget. It's so good. Costco, the science will study Costco for years to come as to how they convinced everyone to spend hundreds while I'm sure.

You know, thinking they saved money. I know. And my kids get locked in on certain snacks. Like, there's like a little protein drink. It's a little monkey on the front.

There's so expensive. They're nine dollars off. So I was like, you know, I thought about that.

“My daughter gets her a little like pouches, you know?”

Yeah. And my wife likes to crunchy like clean ones. Oh, yes. They're like $2 a pouch. So when she doesn't finish one, I'm like, you're going to finish that pouch.

Dad, good money for that pouch. We're going to put that in the refrigerator and you'll reuse that pouch. I know. I know. That's life.

All right. John is in Virginia Beach up next. What's going on, John? How can we help today? All right.

Well, so my wife and I have just finished paying off all of our credit cards with excellent feeling. Nice. Good job. We are moving on to our bigger debt to next.

We have a student loan, a heloc, and we also have a card that we're paying off. My question is, the student loan is the next largest one, and her student loan is through the government. It's in forbearance right now until I think 20, 28. So there's no minimum payment that's required on it right now.

Do I start paying on that, since this is the next smallest one, or do I go to the next biggest one, which is the truck note, and by paying additional on it? As a great question. So what's the total balance of the debts? Student loans, right at 14,000, the truck is right around 20, and the heloc's right around

47. Okay. What's the smallest student loan up next? So her student loan's got all consolidated into one, back under the previous president's administration, so it's all wrapped into one payment.

Okay. Well, here's the deal, interest is still accruing in forbearance. Sure. So even though they're like, hey, you don't have to make a payment, that balance is ballooning, because you're not knocking down the principal at all.

So I would absolutely treat it like any other debt, and just attack that one first,

“at 14 grand, how quickly can you knock that one out?”

Probably about a year, maybe 16 months at most. Okay. So 12 months from now you're moving on to the car loan? Correct. All right.

And then the heloc's next. All right. You're on the path. Yeah, I would absolutely knock out that student loan. The problem and the thing I hate about forbearance is it makes people think they are like,

"Oh, I got some relief." Yes. And they look at the balance six months later, and it's so much bigger than it was the last time they looked at it. Yeah.

That was my concern. Thanks, Lisa. They're low interest. I think it's a four and a half percent interest was obviously as low, but the interest is still accruing and adding to the balance when I'm not making payments on it.

So I just wanted to make sure that that was the right next move. If the interest could not be low enough, unless it's gone, zero percent was no payment. Exactly. One, I'm okay with.

So I would knock it out just as aggressively as if it was 40 percent interest.

That's the spirit that will get you out of this fast and not be a grueling, you know, four-year journey. Lock the rest out and let's say, under two years, probably maybe a little over two at most, but I wouldn't, I don't see why not. That's the spirit, John.

Well done, John. Well done. And you got the credit cards out. That was good. Those ones are real.

Ikey. Not fun. Hopefully you cut 'em up. All right, Keegan isn't Sioux Falls South Dakota up next. What's going on, Keegan?

Hi. Thank you for taking my call. Sure. What's going on? Well, I am a full-time law student and I'm living with my parents in school.

They've our supporting me, you know, providing me with food and housing. I'm going to graduate with no student debt and I'm wondering what I can do to pay my parents back once I graduate. Wow. That's amazing.

First of all, way to go, going to law school debt free. How did you do that, by the way? Because we got a lot of calls of people saying it's impossible. Well, you know, my wife and I are a big fan of you guys, so we wanted to try and do this debt free.

So I studied hard, but you all said I got a high score and I managed to get a full scholarship. Wow. Wow. Well done. So just be a boy genius like Keegan.

And you can avoid that. You can do it. Yeah. That's incredible. Okay.

“So did your parents set up any arrangement with you?”

Did they talk about any financial aspect of you living with them and them covering food? No, they are just doing this out of the kindness of their heart. They want to support me and they know that this is the goal of mine. So they have no expectation that I paid them back, but you just want to.

And I don't think they would take just a check for me to say thanks.

That's what I was going to say. You're right, Dad, a check. He's going to rip it up, I'm guessing. Right? Yep.

“But will you still feel like you did your part in attempting to pay them back?”

I think that might use some of my burden. Yeah. Well, you know what? You're giving them the flex of saying, oh yeah, my kids are lawyer. That's what every parent wants, man.

You're giving it to them. The check can not touch that. They're just proud of you, aren't they? They are. They're very proud.

And I know they don't expect anything. I thought maybe I have to take them on a vacation or something that. That's a fun idea. Yeah. I think that's great.

You know, sometimes it's hard, Keegan, even, you know, as an adult to accept the generosity of others, it kind of puts you in a humble position, you know, meaning to be vulnerable. To have to, yeah, accept that. And so there's something beautiful about that that your parents had the ability and have set you guys up all in that you guys have been so smart.

I mean, it's unbelievable the decisions you guys have made. So yeah, I think there's for sure ways that you can be creative and, you know, take them on a trip or, you know, whatever that looks like, I think that's great. I feel like no one's trying to house man, that grill could use an upgrade. Once I graduate and I get a job, I'm just going to surprise them with a great grill, you

know. So there's things you can still do to be generous. Yeah. And there's stuff like that too, you know, depending on where they are financially, you know, that as you guys start to build wealth, that, you know, it's a beautiful thing to be

generous to people that don't expect it or don't feel entitled to it, you know. And so that's part of living, like no one else, later you get to live and give, like no one else and giving to your family is one of those things that you absolutely can do. So yeah, I'm all about that. I think that's great.

“I think it comes from a good place in your heart that there's, and there's no, you”

know, weirdness of feeling like, gosh, I, you know, they're expecting this. So they have to really is just your, you saying thank you to them. And I think that's beautiful. Yeah. Thank you so much.

Absolutely. I'm inspired for calling. I know. And I feel like paying it forward is one of the best things you can do. You do this for your family.

You set them up so that no one in your family tree ever goes into debt.

That's a pretty incredible legacy to leave that goes way beyond repaying them a, unknown

amount. What is this really cost? I don't know. I'll try to check for five grand. I call it good.

Yeah, right. Right. I don't think they're needing it or expecting it. It sounds like they're, they're in a great spot financially. Yes.

You know, put out by you staying there, but it's impressive. A whole story just makes me go, that's how to do it. And he was ever a poster child of, it can be done. And that's how to do it. And he said, we've been following you guys a long time and we just decided, I don't want

to leave law school with debt. Yes. So what did he do? He found a way. He worked his butt off to get a great else at score, so that he got a full ride.

Yes. Is that difficult? Sure. Is he privileged? No.

He just worked his butt off. He was smarter than you. Because he worked harder than you to be smarter than you. That's how it works. I think I probably could work that harm price, so I wouldn't give up.

I would love for Rachel. I want Rachel and I to take the LSAT just to see who he fails worse. We should just take the SAT or the ACT again. Yeah.

“Honestly, you could give me a common core math problem for a fifth, right?”

No, I'd fail it. Listen, it is humbling doing homework with a fifth grader, you're like, oh, even solving for X at this point in my life would add some-- It's pretty good. Yeah.

When the fractions come in, you're like, oh, man, I got to remember how to do this. It's crazy that we didn't end up using it. Like, I know math teachers out there are really angry with me right now, but who's using the Pythagorean theorem? Well, not that, but we use math every day on the show, we're sitting here.

Basic math.

Basically dividing by 12 all the time.

And how many of you are to divide it by 12? I got an investment calculator at RamgySolutions.com at the ready. I know. It takes that. Oh, man.

We need Dave back here with his financial calculator, the old school one of the desk. Oh, yeah. Just back to analog, Dave. Let's go back.

He's going to keep that thing alive. Well, come back to the Ramsey Show and the Fair Wins, Credit Union Studio. I'm George Campbell, joined by Ramsey Personality, Rachel Cruz, and we're taking your calls at triple eight, eight, two, five, five, two, two, five. Michelle keeps us going in Phoenix, what's going on Michelle?

Hi there, thank you for having me on the show, I'm excited. Oh, we are too. Don't be nervous. Rachel will guide you through this. Okay.

I'm being anxious. One. Where do I start? You tell me what else you're right now, what's the main thing on your mind? Oh, my gosh.

Well, my husband and I have made.

My husband is going to be 57 in August.

How do we overcome our large debt plus our house and the bills that come with that, but we have debt. Okay, so it's a mouth. If you just kind of parse out the consumer debt versus your mortgage debt, how much consumer debt do you have?

Oh, gosh, let's see, that's about 10, 80, 10, 10, 20, 40.

“So almost 50,000, about 48,000, and what's your household income?”

We have 98,800 before tax and insurance, and also I have a school debt because I'm going to school. I was dumb going to get my master's, and I graduate in a month thinking it was going to help me, and I should have done it when I was younger. So that's our top of the 48, too?

Yes. How much more? I think, well, to be honest, I was kind of confused when I looked at that.

At the fast, it looked like it was 18,000, but when I looked at my school's website, it said

28,000. Oh, boy, okay. Yeah. Yep. All right, that puts us at a grand total of about $70,000, and consumer debt.

Make an '98. Okay, at least now we have facts and figures. That's all we're trying to do right now. It's sort of get out of the emotion and overwhelm and just go, okay, what's actually reality of our situation?

Right. We're breakdown the other 48,000 in debt. Um, a credit card for $10,000, or about $10,790, personal line of credit about $11,560, air conditioners. So we had to buy two air conditioning units for our house last year, because they broke

in the middle of the summer, and we were at what's in it and what to do, so we ended up having

to get a loan for that, and that's about $25,083, oh, yeah, okay, a school debt. Are you either of you able to increase your income in the foreseeable future? To be honest, that's where I was hoping I would be able to do, and I didn't have any luck, and it could be the way I interviewed, it could be my age, it could be the everything wrapped into one.

“That's why I thought getting my masters, which is something I wanted to do years ago,”

that I started and then I stopped back in 21 when my mom got sick, and then I thought I'm going to finish it and hoping that would help me. So we ended up getting jobs that are hard labor, and for our age, I might actually kind of, you know, I was kind of embarrassed that I had to go back to a hard labor job, but you got to do what you got to do to pay bills, you know, but I have been there for two and

half years, so I was hoping to grow in that company since I've already been there. Well, the MBA help you, would I give you a raise? Um, not necessarily, not the job I'm in right now, but I was hoping that would help me get promoted, but the job is kind of, it's kind of a different company, and how they promote within.

Well, I found you, I'd be going, how can I use the MBA to double my salary so that I can get out of debt before I retire? That's really the goal now. Was can we get out of this thing in the next three, four, five years, maybe stack up retirement? Do you guys have anything in retirement?

Well, and that's it, and that was one of the stupid things we did when we moved from Minnesota to Arizona. We used my husband's retirement and pension at that time, and then we were pretty good, but then we were making dumb decisions. What do you mean, you used it for the math?

You can't understand? Well, we moved, well, not, well, we cashed it out, but we bought a place that was paid for, and then we ended up selling it, thinking that would be the way to go, and it wasn't the way to go. We should have kept it because it was paid for.

So, now you have a mortgage. 'Cause we had to have a bigger house, it's just the whole thing. We had to have our daughters and grand babies live with us. It was kind of a...

“Michelle, the key word in your life you need to get rid of as we had to.”

That is what has caused you to be broke. At every turn, we had to, we had to, we had to. Yeah. You have to retire with dignity. That's the only half to at this point.

So, everything else is out to window. Yeah, out of the '98s, that you guys bring home a year, what number, what number do you bring home, when does what does he bring home? Mine is 40,408, I wrote it down before. That could be ready for the past, right?

And then his 54,392, and of course, all before tax and everything. Okay. And tell her not doing 401k. Okay, tell us about the house. How much do you owe in the house?

Mm-hmm. What was it? 343,658. You owe 340, and how much is it worth? Um, maybe about 500,000?

Okay. What's the payment on that? Yeah. 2270. And what's your take on pay every month?

Is it closely five or six grand? Yeah. About that, I think totaled together. Um, as I think he brings after, and he pays the insurance. So, six minus, like, five to 1100 per week, maybe give or take?

Do you still need this bigger house?

“Uh, not really, and I've told I have talked to my husband about that, but he's really”

setting him ways and hard to change, but maybe it will. And he does hard labor at 57? Yeah. Yeah. We work at the same company.

Well, he's going to be setting his ways until he realizes he can't keep this up for 10 years to climb out of this mess. Right. And then he's going to be forced to. So if I'm in your shoes, truthfully, based on what you've told me, I would consider

selling the house, clearing all of your debt. That way your income can now be used to fund retirement, and you guys just rent for a while. And if your income goes up and you can own a home again, that's great. Okay. You're right down there.

Yeah, you could clear one 50 out of the home.

Um, man, I don't know. There's a part of me.

“I don't know, George, that if you could go, I mean, and it's going to be a different”

type of lifestyle Michelle. So I just don't know if, if how you guys would feel about this, but if you could find something, a $200,000 condo or 100, I mean, if you could get it one fit, I mean, I don't even know. I'm going to pay cash.

Hey, cash. And then that frees up $2,500 a month that you guys could throw at this debt. Because that's almost half your take on pay going out to this mortgage alone. So you're not going to be able to make head, headway on your debt. And you guys need to start being creative because you're going to be working for another

decade. And if you can't stay in this job, then you guys are going to have to start getting creative and think through where else long term could we be to be making even more money if possible. Obviously, I know that's ideal. There is another thing, too, that we, so my mom just passed and we did get a little bit

of inheritance from her. So we ended up buying a condo and paid cash for as an investment property. What? And you're going to leave Michelle, go live in that thing, forget your renters. Can you go live there?

I don't even want to, but I mean, yeah, to do what you got to do sometimes. Yeah, you told me your, your will to do it, isn't it? How much is that worth? Probably about 150. So either move into it or sell it, then you can maybe stay in this house.

Yes. The mortgage is still too much for your take home pay, so it doesn't solve that problem, but at least it clears your debt. True. Yeah, I would sell the house and I would go move in something smaller.

And I'm sell that investment property, Michelle. You guys have $78,000 in consumer debt and no retirement, no sell it, pay off the debt and invest the rest and be done. That's your choice. You can try to work until 70 and maybe get out of this thing and still have a mortgage

or you can do it our way and find a path to freedom way sooner.

“That's what I would be doing if I was in your shoes.”

I ain't doing hard labor, look at me. . If you want to grow, get better at communication. Until you figure that out, you're not going to move forward. I've been there.

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Go to RamseySolutions.com/store. Flying or selling your home is a big deal. There's a lot of clickbait headlines out there, conflicting data and it's hard to know what's really happening in the housing market. We're here to make the latest trends easy to understand.

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Buyers have more options and negotiating power while sellers face more competition. The average 15 year fixed rate dipped to 5.86% last month. So if you're dead free, you've got a fully funded emergency fund to solid down payment. Now it's still a great time to buy your sell your home. So to learn more about the housing market trends and get free tools to help you buy your

sell with confidence, go to RamseySolutions.com/market or if you're listening on podcast or watching on YouTube, click the link in these show notes. Steven is in Nashville, up next, Steven, welcome to the show. There, thanks for making the call. Absolutely.

What's going on? So a few years ago, friend of mine came to me and asked to start a business at the landscape service project base business and things have been going well. We've been growing, making money, and then out of the blue said that he can't do it.

So I said, okay, we'll go about it the way the agreement says, "Get evaluation done." And I kind of did that whereas he is saying, no, the business isn't worth anything, it's only worth what we own.

“And I believe that's a different based on the goodwill and the cash flow and the profit”

that we've made. And we've kind of reached a stalemate at this point and I don't really know where to go from here as far as how to leverage the situation to kind of get this clean and over with. So to see now I want to pay to get evaluation because he thinks it's worth nothing. Is that the deal?

No. He doesn't want to pay for the company. He kind of just wants to dissolve it and then start the exact same thing on his own. The second that that's done. What is the evaluation cost?

I mean, 1500 to 2500 depending on, and have you done that already? Have you gotten an evaluation? I've got an informal one and I spoke with an SBA lender that's a friend of mine and gave him our tax terms and said, hey, hey, I was trying to buy out my business partner. What would you guys approve on alone?

Because obviously they're not in the business, they're making bad deals and they set of valuation around 775, so making my 50% shares anywhere from my 350 to 360 range.

And that's a big gap from, it's worth nothing to it's worth three quarters of a million dollars.

Now I would not go into debt to buy him out. If you wanted to continue this, you could do some sort of like profit. This is running. Yes, sorry. I'm a little confused.

Is he just wanting to leave? He wants out and wants to start his own. He wants me out. Oh, he wants you out. Oh, I'm sorry.

I'm sorry. He basically wants you out. He was going to just leave. And I was like, well, I'm just letting him leave. And you keep the whole business.

“What does the operating agreement say if the business, one of the partners want to get out?”

It says, obviously, you get a valuation done, you know, then multiply that by your shares with 5050 owners. And then you can either do it through an SBA or the operating agreement says a 20% down

and then four quarter of the installments for 60 quarter, so basically 15 years, which is kind

of a great as I think. And that puts me at risk in case, you know, he defaults, and I would, you know, whoever's on the other end of that, I wouldn't imagine that that's, do you guys have any debt in the business currently? Yeah.

Like a quick man in machine loans, probably a little over a thousand, nothing, 120,000. Hmm. Well, I mean, if the agreement says you get a valuation, then I don't see how it's illegal for you to take that out of the business, checking account and go get a valuation. What's stopping you?

I don't, that's not the, that's not the issue, it's that whatever that valuation comes back as he's going to say, no, it's not worth that I'm not paying that, um, you just buy me out. And then I'll, there's a two-year-old not compete attached to our operating agreement. But, well, if it's worth nothing, then you don't have to buy them out, isn't that what

he said? That's what I'm thinking. And I don't understand. Let it be worth nothing. There's nothing to give you.

And he can leave and start his own thing, right? Yes, down the other part, that comes into it is I picked up my, the center of my life and moved out of Nashville down to, you know, we're kind of in his home turf where he grew up on from Ohio football, brought me down here. And so I'm in a area that really don't reason I moved down here was because we were running

a business. That was doing well.

“Um, so are you capable of running the business on your own or hiring someone to help?”

Sure. Yeah, no doubt. I'm definitely capable of if he's going to turn around and start another room. Well, where do you want to live, Steven? Uh, go about it.

You know, in the Nashville area, we're about an hour and some, you know, an hour and change. Okay. So you'd rather live somewhere else. So then why don't you go get new clients elsewhere? I can't do that.

Um, obviously, you know, selling the house that I live in now.

I got my first child doing a month, not even a month, less than a month.

Um, my wife's, you know, we do a health insurance. We heard job here. Uh, the logistics of it all are just not great to leave with no form of compensation or buyout. And in that case. Um, I'm guessing nobody would actually buy your business.

I mean, no, probably going on a very desirable location. Is that when it, and that's his argument, is that it's not worth? Yeah. He says it's not worth. Obviously, if we sold it to an outside buyer, they would be tough for them to do that.

Now, all the contacts that we've built in the last three years if he is still going to continue. Is he going to post all that current clients?

If we were to divide ourselves right now and I start my own company and you start your own company.

We're going to be competing, you know, for the same advice. He's going to be okay, yes, or my own thing, come over here. Sure. Yeah, you, you guys need to come to a consensus on what these next steps are. Otherwise, this is going to be a bloodbath.

Make it happen. And there's debt, I'm worried. So now the debt part is the debt. Yeah. Uh, if an LLC, you know, so we're, we each have 50% of that.

Okay, so if he leaves the business, he's still liable for the debt. Yes, and as he talked through that, I would have said unless I were to. Well, no, he doesn't want to leave the business. He's not going to leave the business. He wants to get me out of the business. I thought he wants to start his own.

Yeah.

And you don't want to do this thing.

You don't want to do this anymore, right? I do, but I'm not, I don't want to, I'm not going to do it by myself down here. Well, and he can afford to buy you out to do the solo. I mean, he could. He's saying that he, you know.

Yeah. That's what I'm so confused about. Well, he wants to solo. He can't afford a couple of options. Either you guys just dissolve the business. You start your own thing. He starts his.

Uh, you sell the assets. Pay off the debt and just say, what a bad deal that was. You go your way. I go mine. And you got to outperform him and your new, and your new gig.

“You know, do you mean to, to get a competition wise?”

Because you're not willing to move. I just asked you in the middle of the call. And you're like, well, I got a baby on the way. A house, my wife. You, so you're not moving.

You're stuck regardless of the business. So we're, so you either are going to do this business or do a business like this. Or you got to go find a different job. Or you go move and do this business. Yeah.

If you feel like the competition is going to move. You know, I would move is, you know, we each took six. Bigger salaries last year. And essentially nothing's going to change for, you know, for my partner. It's whether we dissolve or he buys me out.

I keep still going to continue like, like, business is usual. Well, you. And so without me in the picture, there goes a six figure rate. So I'm figuring if I could be compensated somehow for, you know, giving you. You're not wanting to pretend that it's company guy.

Yes, but Steven, but that makes, it doesn't make sense if he wants out. If he wants, if he wants to business by himself, then yes, then he needs to write you a check. I 100% agree. And if he's not willing to write you a check, then you can say I'm not leaving the business. Then he has to side he's out and he may go start his own thing.

And then yeah, you got a competition in the area, but it is what it is. So yeah, but I still have the infrastructure and everything of our business correct. Yeah, yeah. So you got to, you got to say good luck, bud, get on. Yeah.

And then you can kind of, I was thinking that it was going to end on as well. If you're not going to buy me out, then we're going to continue to be partners. 100%. This is a classic. We can do this the hard way or the easy way.

But yeah. Then the debt tied to it's a whole other thing. You guys got to make sure that you guys form a new agreement saying, hey, we're staying in this thing until the debts are paid and then here's how it's going to get dived up.

“I think maybe you rip up the current one and draw a new one up that makes sense for both”

of you because the current one is not, not really working. A ship that does not sail, partner ship nailed it. That's what I'm going to do. That's what I'm going to do. I'm going to ruin the friendship on top of it all.

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. Welcome back to the Ramsey Show. I'm George Campbell.

Here with Rachel Cruz and in the third chair, we've added a special guest.

We've got Matt Clark, president and chief operating officer at Churchill mortgage. You've heard of Churchill because they've been our trusted mortgage partner for more than 30 years now. Matt has over two decades of experience at Churchill. He's got some deep industry knowledge. We want to bring him on to help explain to our audience what the heck is going on in the housing market.

“When are the rates going to magically come down, Matt?”

Where is your crystal ball? Well, if I had a crystal ball and I knew where rates were going to go, I wouldn't be here right now.

For being an island somewhere.

It's so hard. Rachel just unstable right now. Everything that's going on in the geopolitical climate with the war and I ran with oil prices. I mean, rates are very sensitive to those things. And so it's really hard to tell what rates you're going to do.

They're quite unstable. Rachel kind of like trust. They get worse really fast and it takes a long time for them to come back down and get better. And so I just think right now, people just need to recognize that they got to be patient. And there's no way to really predict what rates you're going to do.

Yeah. Would you say you're pretty confident?

“They'll probably, like, would we ever see in our lifetime the, like, two percent again?”

Like, do you think that's probably from the past, would you assume? Ever is a long time. Yeah. But I'm not banking on them coming down to the two percent. Yes, to what it was.

Do you find that there's some gold and handcuffs out there with people that are hanging on to their three percent rate?

And so they're never going to move now.

They're like, well, I'm stuck here. This was when I started home and now it's the forever home. Yeah, I do. I think we call that rate locked. That people are afraid to let go of that rate.

At the end of the day, I think if they can afford and they want to buy a house right now, even though they're right, they're right, they're right, me go up. If it fits their budget, it may not be a bad idea. Yeah, absolutely. Well, speaking of budget first time home buyers, that's the most frustrated population out there because they're going dude. How do I step into this jump rope going 90 miles an hour?

I'm going to get hurt. What do you say to them when it comes to rates moving around? How much that affects their mortgage payment? I would tell them to focus much less on the rates moving around.

“And much more on is their budget ready for them to be a homeowner?”

And as soon as they feel like their budget is ready for them to be a homeowner, they'll be a homeowner to jump in. I want to talk about pre-approval. Some of you talk about a lot of the show. But it's one of those things where you go through the process,

and you're like, I didn't understand. I needed to do this. So talk about pre-approval. Yeah. And Churchill has something special called certified homeowner.

We do. I mean, when I think about pre-approvals, I think there are really three different types of clinical approvals that a lender can give you. There's they have a phone call with you and collect some general information. And tell you, yeah, I can approve you for XML.

That's a pre-qualification. And they take that piece of paper and they bring it to their real estate agent. That agent presents that when they make an offer on a home. And quite frankly, it's not really worth a whole lot, because it's not gone through any evaluation.

We most likely haven't collected a lot of documentation. Then there's your standard pre-approval where you collect some information you run, credit, you see what the financials are. You look at income statements. You look at W2s and you make a high-level credit assumption based on some automated

models. And we send you out with a pre-approval. And then there's what we do at Churchill, which is what we call a certified home buyer. And with a certified home buyer program, we actually fully underwrite your credit and send you off with a fully credited approved approval, which allows you to really

shop with confidence. And we put on top of that a rate secured program where we lock you in for an extended period of time, 90 days. So that it takes the uncertainty of that approval away. Because you know, if interest rates go up, you're already protected.

And you get to keep that low rate. And if they go down, we just lock you in when you find a house at the market rate. So you get the message about worlds. That's impressive. And on top of that, we throw on a $10,000 guarantee to the seller.

So that if you present an offer to a seller with a certified home buyer, we guarantee that seller that your credit is good. You only think it could go wrong. There was a praise of their title work. And if for something happens, we pay the seller 10 grand.

Wow. So just to back up that process. That's impressive. So in a spectrum, let me recap this. You have this person might be good for the money.

You have their probably good for the money with a standard pre approval. And then you have the, they are definitely good for the money with the certified home buyer program. You're able to go into that. So, you know, we have a lot of new listeners to the show. I feel like even most of our callers.

They're like, I've just just gone to you guys. So people that are looking to get into the market, but they're doing the baby steps. So they're working their way out of debt. They've now have an emergency fund.

And then they have some money for a down payment. Okay. At that point, you know, their credit score may be tanking. As we speak and/or it's end determined. If it's been long enough, right?

They don't have a credit score. So that is one thing that's a little different with Ramsey that we say yes. You can still get a house without a credit score.

And we always recommend you guys because you guys are always the place that we say to go to.

Because not everyone can do it. Not everyone will do it.

“But what does that look like to get a mortgage without a credit score?”

First, I want to make sure people hear this clearly. Getting a mortgage without a credit score does not mean credit score doesn't matter if you have one.

It doesn't bypass your current. It doesn't bypass that score if you have one. So the tanking one, not good. You can't really buy them. Thank you.

One is a challenge. But when you come to us with no credit score or what's called an indeterminable score, we look at trade lines. We look at your ability to pay your bills.

“And so you have to have more than just living in mom and dad's basement, not paying any bills.”

You actually have to have some sort of established history of taking care of your financial responsibilities. Things like cell phone bills and other utility bills or other types of monthly payments that we can use to create an alternate credit profile and move you forward on a no score alone. And that's on top of 12 months of rental payments. Because a lot of people say, "Well, I live with mom and dad.

We never had an agreement about it."

You guys go, "Well, we don't know that you can pay a housing bill on time." Well, months of housing payments, part of that process as well. Is it that? So yes, that's the important part. But it can be done, which I think is.

I mean, I've done it. That's not saying much, because everyone goes, "Well, it was easy for you to say." No, I got out of debt. Didn't have a credit score. And you guys are the specialists in no score loans.

I imagine you've probably done more no score loans in the modern world than any mortgage lender. More in the modern world than any one. And we do it better. I talked to real estate agents like, "Oh, you can't do that." I go, "Yeah, I can."

I can't. I can't. Watch me. Oh, my goodness. Well, I do want to hit on closing costs.

Because a lot of people, we talk about the down payment so much. Yes. And people forget that there's other costs associated. So what should people expect to pay when it comes to closing costs in general? This can vary widely.

Yeah, closing costs consist of a lot of different things. One, there are, there are lender fees. Every lender has their own administrative fees, processing fees, underwriting fees. And then you have things that are going to be consistent across the industry. You're going to have to pay for an appraisal.

You're going to have to pay for title insurance. You're going to have to pay for credit report fees.

“There are state taxes and tax transfer fees that you have to pay for.”

And so when you think about rate and you think about getting to the closing table, there's a lot of things that will impact what you have to bring to the table in your closing costs. The key is getting that transparently put in front of you early on. So you're not surprised at the end. And you can get those estimates from your loan off.

Or you should be helping me understand all of the things I'm going to be paying for. So that I'm ready. Yep. You want to be cognizate your way fees. All of those things end up surprising people at the end.

Yes. Which creates problems for them not having the amount of cash to come to closing with. Let's be able to do it off. Yeah, so the full picture is so key. So someone that is entering to the market for the first time.

They may feel kind of intimidated. And they're like, oh my gosh. Am I ready? Can I do this? What are a couple of tips you have?

We'll say for first time home buyers and maybe people that haven't. You know, maybe they do.

They locked in the 2% and they're like, we're never going to move.

They're like, okay, actually we're going to look for another house. But it's been decades since they bought something new. What are a couple of things that you're like, okay, this would be good. From your seats, you're like, these are things that you probably need to do. Well, one, talk to somebody who's going to be patient with you and ask you the right questions.

Find out what you're trying to accomplish and where you are.

“I remember so well when I bought my first house.”

Three years old, I had a child and another one on the way. I was desperate to buy a house. I found a realtor. They put me in touch with the agent, a loan officer. They had a relationship with.

And all I wanted to do was tell me how much I could buy. And I ended up not knowing anything. And so I let my anxiety cause me to make a bad decision. And bought a house that was more than I could afford with a mortgage at a rate that I knew nothing about. Other than they told me I could afford it.

That's good. Get the facts. That's the process. That's good. Now, thank you for being here.

If you guys are ready to start your home buying process, the Ramsey way. Churchill mortgage can help. They're the folks we trust. And they have a special offer for you. 500 bucks off your home appraisal credit at closing.

Only at ChurchillMorgage.com/Ramsey offer. Go check it out. Thanks again, Matt. Thank you. Thanks for being here.

When people hear my story of paying off debt, they say things like, "Dang, that must have been so hard." I can never do that. And I tell them, sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard?

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

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

Like our every dollar budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation.

So you can get rid of your debt and actually build wealth.

So make the choice today. Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the every dollar app and start for free today. Our scripture of the day, ecclesiasties 5-10.

He who loves money will not be satisfied with money, nor he who loves wealth with his income. This also is vanity. Chris Rock said wealth is not about having a lot of money. It's about having a lot of options.

Well said. Yes, I agree with that. Both Solomon and Chris Rock bring in the heat. Love it. All right, Charlie is in Phoenix up next.

What's going on, Charlie? Hi, thanks for taking a call. I appreciate it. Sure. So I've been retired for about six or seven years.

I'm 67 and retired about 60.

And we're currently worth about 2.4 million dollars.

Awesome. In the movies and IRAs, we're off IRAs in our house. And the emergency planet about our high yield savings about 300,000 and emergency front about 50,000. But so my call is that.

And we were debt free and in so security, we make about $56,000. And so security a year. Okay. Between my wife and I. And we have our ability that pays about 25,000 dollars a year.

Okay. And which we haven't even started taking that.

“But that's what the current balance we've done.”

The current flow would be. Okay. And then also on the side. I I have fishy high school and college sports. And they come out of 25 to 30,000 dollars during that.

Wow. That's an impressive side hustle. Yeah. So I have we have these. These assets.

But I'm still. I'm working as collecting that I am spending. That's my my problem here. You want to start accumulating instead of a family. Yeah.

So you're like, you're like, my wife and I took a road trip. I'm just a week or so ago. And I hooked up for like five additional. Volleyball games. It's one of the sports I wrap.

So I could pay for it. You know, I could pay for it. You know, I got to. Yes. It doesn't really.

It's just your stuck in your scarcity loop right now. Yes. That's the way to try to change that. You know, like my wife says, well, I say, I need something. You're just going by and I've got to go get it.

Get a gig before I can buy it. So I can pay for it. Did you grow up with money? I know.

“Are you the first one in your family to be a millionaire and be at this place?”

Me and one of my other brothers.

He's probably worth about four million probably.

Maybe two brothers and sisters probably not close. Oh, okay. So you guys have all done pretty well. Um, do you guys have a great financial advisor that you meet with. Maybe yearly.

I have a. Um, a gave Ramsay approved person and he just retired. So he transferred to another guy. Okay. I have I just got with him at the beginning of this year.

Okay. And so I just talked to a couple weeks ago. And I told I wanted to get together and you talk about. Yeah. I just like we went on a cruise last year.

And I go. Okay. And all these gates before he can go. Right. Right.

Well, I think the idea of you working and still having a passion for something. It's just good for you as a human being. Right. I still think there's like, you know, you still have this reason to get up and shower. Yeah.

That's great. Um, so there's kind of the two ends of the spectrum here that you got to think about. One is just the facts.

“That's why I asked about the financial advisor.”

Because sometimes when you actually see the numbers and say, okay, we can spend X amount extra per year. Because you're bringing home probably around what eight, nine grand a month between your Reffing, you know, those games and the pension and everything coming in. And so anything above that, you know, what could we, and a safe way spend extra. And you can look at that number and say, okay, great.

And if you want to continue to spend that, that's fine. But what I would say though is I would. This is the emotional side. So you have the tactical. You have the plan of what you can spend.

And then what I would say is you don't have to spend all of it. But you need to be spending something extra every month, Charlie. Because with money, you're, you need to be giving some. Um, you've done your savings.

Yes. That's great. Yes. So you do. Yeah.

You're giving. You're saving and spending.

“Those are the three things that you need to be doing with money.”

And they all need to be balanced. And the spending is what's off for you. And so you kind of almost have to rebuild this habit of letting go of some money and not having this type control that you have. Because, you know, it's wild. Because I'm one end of the spectrum money can be such an idol for people that worship it and they spend it.

And there's like the vanity side, right? I've just the scripture. You just read George. But then on the other end, it almost becomes an idol because it has so much control over us out of the sphere that something's going to happen. And I'm not going to be okay.

And that fear. It's not rational, right?

You got 2.4 million dollars sitting there.

And so we don't want to be unwise with that. But there needs to be some freedom in your life, Charlie. And right now, the equation of the freedom to me is letting go of some and spending and enjoying it. And so, um, as there's things that you can do that are fun with you in your wife and you're like, hey, or, you know, I don't know if you have grown kids or grandkids. But, you know, find something meaningful, not saying to go buy a bunch of crap and just like have a bunch of stuff.

But if there's things you can do to enhance your life or to make things easier, if you guys need someone to come clean the house once a week. By your time back, as one of the best ways to spend your money, buying experiences with people you love. Dr. Arthur Brooks has one of the best things you can do with your money. So we do have, we have three kids and 17 grandkids. Oh, wow.

How fun. There's someone up to spend money. That's great. Yeah. Well, when they become forth creators, we'll take them on a 2,000 mile road trip. Oh, that's fun. Yes. Yes. One coming up this year, the destination, Yellowstone, the White River, we're after.

We're going to review. I love it. I love it. But I love it. But yeah.

And so I just got it.

My wife tells me that I just need to get out of that mode of saving.

I had to go from a saver to a spinder. Yes. It takes me out of her transition, even though when she wants to do something. Okay, I'll go get a couple of gigs and you can do it for you. Right. Right.

And so what if you just countryside house for six months instead, I'm not going to do it. And I'm going to spend money. With that for you. And that's a heart that's a heart thing to get on in that leadership role. And one of the side gigs.

Oh, they need you now. I came in. You're running this. Sure. And you enjoy it, right, Charlie in general.

Yeah. Well, this is my 50th year officiating. Wow. That might be a world record. That's amazing. That's awesome.

I don't know about that. Which I appreciate your advice. And you know, I do listen to quite often. You talk about side gigs and delivering yourself like that. I want to encourage you to tell a couple of the look into officiating.

We are officiating in general because I do make 30 of 50, 60 bucks an hour doing that. Oh, it's impressive. Is it wrestling? Is that what you said? I do.

I do mostly wrestling. That's for about 50 years and 25 or volleyball. Okay. And I put baseball at one time also. Wow.

Good for you. I would have a dream date with your wife and, you know, buy the apps by the desserts. The stuff that makes you feel guilty and do without guilt. And then have a little dream date where you go, hey, if we were to spend

“X amount of money this year, where would we divvied all out?”

And then put it in the budget and go, hey, we decided. Remember we pre-decided that we're going to send the money over here. And we're going to buy this thing here. We're going to go on the trip here. We're going to do it.

So you sort of force yourself to flex that muscle. And eventually you'll feel less guilty writing those checks and swiping that card and all that. Yeah, because it's all about balance at this point. You guys have been a fantastic job, Charlie.

I mean, unbelievable. What careers did you and your wife have to accumulate $2.4 million? Well, I said, my wife was a stay at home mom until our youngest went to... I think it was a high school. So she did 16 years as a dental assistant.

Yeah. And then I was... I don't have a college degree or anything, but I was a computer engineer for IBM. IBM mainstream engineers for like two years. Okay.

That's it for you. That's amazing. Absolutely amazing. And one thing to do with that. Smart Vester Pro Charlie that I think will be helpful is they can walk you through

your current withdrawal rate of hey, you're spending 50,000. 50,000 dollars a year out of this much of your nest egg. That's a 1% spend. You can go up to three, four or five without ever running out of money. And they can show you the actual dollar amount of hey.

You could up it to 2% or two and a half or three or four, which is $100,000.

And still never run out of money.

“I think some of those facts from a trusted investment advisor will free you to go, oh.”

You know what? We can loosen up. I don't have to take on nine more gigs. Yes. I can do it because I want to.

Not because I feel like I need punish. I need to. That's right. That's right. Well, well done Charlie.

You guys are a success story. Absolutely amazing. Good problem to have.

Remember there's ultimately only one way to financial peace. And that's to walk daily with the prince of peace. Christ Jesus.