Your Payments Are Keeping You From the Life You Want

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I'm Jade Worsha next to me, George Kamel taking your calls for the next three hours, triple eight, eight, two, five, five, two, two, five is what will get you on the line. We hope that you do choose to call in, because we'd love to hear from you. All right, George, you ready to do this? Game on.

James is in Riverside, California, James. You are on the line. How can we help today? Hello, I was calling in. I walked you guys to show a lot.

I watched George's YouTube channel.

“I'm just trying to figure out what's the best way to pay off pay day loans.”

Ooh. I have 10 all together. Ooh. That's a monster. My goodness.

I've seen someone calling about him, but never this many.

Wow. How did you, let me just ask, how did you get in the situation where you were needing to go to these places 10 different times? I had some car troubles, a couple of maybe a little over two years ago, and I needed a pay rent, so there was one down the street from me.

So I've seen it, and I walked in there and to get to try to get a loan, and they gave me that. Man. I just spiraled into getting behind again, so I got in up getting another one, then another one.

So they're four, four, pitty loans where I walk into a store and do it, and then I got stuck with the ones on the apps on my own. So I got six of those. Have you deleted these apps? Like, I know you're still paying on them, but I'm scared you're going to go get in

11th one. That's right. Yeah, and I got, yeah, I need to, I got all the ones I could possibly get. So for listeners listening, we hate payday loans, because number one, most people, they're borrowing somewhere from 100 to $1,000, right?

These are small loans, but they're usually due in a very short period of time. Sometimes they're due in two weeks, sometimes they're due in four weeks, but the main kicker. Right, the next payday. Yeah.

That's where they get the name. The main kicker is guys, the interest rate, the APR on these is anywhere between 300

and 600 percent many times.

But they don't know that. So it's just a fee, oh, it's a $45 fee to get this small loan. And when you actually factor in what that's costing you, no one can get out, because the loan grows. It just grows.

And by the next payday, you don't have enough to cover it, so you go take out another one. Right. It's just whack a mole. So that's where James has found himself.

You borrow $500, you add the $75 fee, and I owe $575, that's banana. So James, how much do yours total, do you fall in line with this or tell me what yours on the break them down? Yeah, I'd love that. Before, before that I go to in store, they let you borrow maximum $255, but I have to

pay them back $300, so every two weeks, I got to pay that. So that's about $190, every two weeks, almost $400, just on those two a month. Wow. And then the phone ones, like, let me see, I got it written down. So the phone ones are just different numbers, the smallest one is a hundred, and I pay $5

an incher so that every two weeks. And then the next one is $300, and I pay $13 an incher, the next one is $350, I pay $10, $50 an incher, the next one is $240, and I pay $35 an incher. And then the next one is $250, and I pay $19 an incher.

“Oh my goodness, that is, what's the total balances of all these 10 pay day loans?”

If I would pay them all off today. Yeah, the four are $1200, and then the other are $1550, so, okay, about $2500, you clear these? Yeah, about $2500. Do you have any money in the bank right now? I don't.

I try to listen to you guys as steps, like, save up a thousand, I try that twice. I think this is such high interest, I should pay these off, but like, I saved up a thousand twice and I might just come up so I would use that. I think that, I think James, that the baby step is not the issue. I think it's your income, that's the issue, because obviously not having the money for

in the first place, and that's also the thing that's holding you back from getting the

thousand dollars saved and being able to hold on to it. So, I'm hearing two issues, I'm hearing a cash flow issue, so an income issue, and I'm also hearing a lack of financial planning issue, which sounds like a budgeting issue. So, let's talk about those two things, do you have a budget, and also I want to know how much are you bringing in every month as income?

I make about a little over 4,000 a month. And is it just you? I have a girlfriend also in two kids.

“Okay, girlfriend in two kids, and you guys are all living together in one household?”

Yeah, apartment. Okay. Is she contributing financially or no? Yes, she goes, she basically covers all the lights, gas, food, and then she goes half with the rent with me.

So why is that? And I cover. Why is there a huge issue? Because if I'm hearing somebody who is in a shared financial situation, you've got 4,000 a month, you're splitting rent, she's covering all the basic utilities, where is your money

going? Tell us more. Tell us about all your other debt. No other, I just have one credit card at pay remun to have storage, phone bill, then another big problem I was going to bring up next is I have a car loan that I'm under water in.

How much is a behind on? Do you still own that car? Yeah, I still have it. I'm about 12,000 under water. What's it worth?

It's worth about 8,000. Okay, so you have 10 and a half, 20? Yeah, oh, about 19. What's the payment on that? Payments 530.

Yeah, that's messing with you. I don't.

“I just realized just about a month ago, that's why I gave you guys a call.”

So did I also behind a lot, and I didn't know that it's like a big fee of interest. That's when you're late also on top of the other interest.

So it's basically like a little over 150 and late fees every month of terrain.

What about your rent? What are you guys paying in rent? Because still I'm wondering where this money is going. It's 1,800. That's your half or that's the full rent.

Okay, so yeah, we've definitely got to find out where your money is being spent. So second question, do you have a budget I'm guessing no? I tried the budget with the app, but it's just so confusing with all these other fees and other stuff. Okay, so what I want you to do, I want you to give it another shot because I think you

just need a little help tweaking it. When it comes to the fees and everything, just plug in the minimum payments. That's all you need to do. There's a section you list all of them out. It'll ask you what the minimum payment is that you pay, just fill that in.

And then from there we can figure out how much margin you actually have because I think that you have more than you think you have. And then we can see a full number because the way we want you to tackle this is with the debt snowball, which means you're only paying minimum payments on everything. And then smallest to largest, we're taking the very smallest debt and all of our extra

money goes on the smallest debt. So therefore, while it's going to feel like the others are struggling because they are and you're going to feel it because these are paid-a loans. You're just going to see the balance go up temporarily, but you're going to feel great when you knock these pay-a loans down from 10 to 9 and from 9 to 8.

And you're just going to have some stupid tax that you're going to feel in way of interest.

“But the key here, James, is you need to throw more money at it than the balance is”

accruing, which means you need to get aggressive. That next paycheck needs to go mostly towards these debts so you can stop playing the shell game and whack them all. That's the only way out is you've got to be more aggressive than they are.

And then you know, never touch this hot stove again.

To leave these apps, never walk into one of those stores, you drive by and say, that's a past version of James, never again. And you're probably going to need to pick up a couple of side hustles, you're going to have to work extra to get this done quickly. Dave, we got a lot of calls on this show where life happens.

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All right, back to the phone lines we go where we have Jeb, who's in Columbia, South Carolina.

Hey, Jeb, you're on the line. How can George and I help out? My question is, I'm 24 years old and I am facing and get married in November and I make 30, 5,000 years and I was wondering, how can I make a good budget and how can I be, and I only did I have is my house payment and what's the good way to stay on top of that

while I live in paycheck to paycheck? Yeah, absolutely. I love that you're thinking ahead. I love that you have no consumer debt. What about the lady and waiting, how do her finances look?

You don't have no debt either. Okay, great. And does she work? He does. He works.

And what does she make? Right now, she works, she probably makes, and the month, right now, her job, but she's going to be switching jobs. Right now, at the time, she's at, right now, at the time, eight hours hours a month. Okay.

And what does she do? And what will she be doing, she said she's switching jobs. She, when she switched jobs, she's going to be working out, call her job. Okay. I mean, she's making, like, less than minimum wage right now, she's working full-time, so

that part scares me. Oh, no, no, she ain't working, she's part-time working right now. Oh, okay. Got it.

“And once she's working full-time, what will she be doing?”

You'd be working out, call her job, and they told her with her experience is that she'd be part of my career out, 15 to $20 a hour at the call for job. Okay. Great. That's closer to 40 grand a year.

Wonderful. And what are you doing for your work? I am, I am a part-time little carrier for the post office. I got two more years before finding their full-time. Two more years.

Okay. Okay, that's good. I love that. All right. So, the key here is to stay out of debt and to continue to build wealth in the process.

So you're probably familiar that we teach a plan that's called the baby steps, and there's seven of them. And the idea is to get your, throughout the seven baby steps, to get your money working for you to build wealth so that you can live like no one else and be generous and all of these things.

Correct? So you guys are partial. Right. Because you don't have any consumer debt. The question is, do you have any money saved?

Right now, I'm trying to, it's about one being dead. Like, I'll tell you to start a quick, well, the house was given to me, it was my grandma, she passed away. She gave it to me. And then my parents said, you know what, y'all are starting out new, but y'all won't

be in debt. You can go in there and really mod the house for y'all. Y'all just pay us back. They not, we only have to pay the whole loan back to them. We only have to pay, but ten years, a thousand a month.

A thousand dollars a month for ten years.

And is there any way that you can pay that off early, are they open to you basically doing

“the calculation on that and saying, we want to get out of this early?”

I mean, I can. Like, we can't afford it. I would love to pay it. I'll quicker so I can. Okay. And that would be my goal. Do you guys love the house? Do you plan on staying there for a while? Yeah. And you're saying there's no mortgage. It's paid off, but you basically have a hundred twenty thousand dollar loan attached to it to family.

Yes, well, yeah, yeah, to family. Yeah, okay, out of a thousand bucks a month. So the goal would be, instead of waiting ten years for that to get paid off through the minimum payment of a thousand bucks, can we throw two thousand at a three thousand at it and get this thing done even faster? Yeah, because Thanksgiving is going to be awkward. I'll tell you that much. Because they're going to see you guys on the honeymoon going on vacation.

years. We need the money now. Because they might have a health problem or one of her tire

and go, man, we're kind of regretting making this ten year loan drag out. And just to be clear, they are willing to hand over the deed once you've paid it. It's not just, uh, we're talking here like they're actually going to give you the deed. No, no. This what they said, this is a deal. They said it's on part time. They said, since I get full time and two years, they would put the house in my name. Okay, is any of this in writing? Yes.

The question I have though, okay. So when the house is in your name, what's the actual mortgage payment? Not what they're charging of what's the actual payment? I still be paying the thousand. I understand this paid off. And so I get it paid off. But they would have

the house in my name. It would be just like the house will be in my name. And I'll just

keep paying them the thousand. Right. But the clarity that I want is, is there an actual mortgage on the house or are they just charging you that money? No, no, no. There's no mortgage date. My day is just retired. And he took the money off his retirement to redo the house. Okay. Oh, it's kind of scary. How much does he have in retirement? Yeah. No, but 300,000. Okay. That's a pretty big chunk to take out for these renovations. No, no, no, no, no, no, no.

“Okay. Okay. So back to you and your fiance. I love this free. I think it's very generous”

that they're doing that. And so like I said, the goal is to continue to live that debt free lifestyle. I want to make sure you have savings today. Do you and your fiance when you guys get married in November? If you combine your savings together, how much money will that be? I'm listening. If I combine it, because I'll take this. I gotta, I got a statement of a count out of my mind. I just opened up this past month. 250,000 going into a paid

period. Perfect. Okay. Great. So the goal for you guys is to save up six months of expenses so in your budget, which we're going to give you every dollar for your wedding present, I want you to look at your month and say, what does it cost to make our month go? Does it take $3,000? Okay. Let's multiply that by six. We need $18,000 to make this thing go. Lock that in, put it in a high yield savings account. Somewhere that it's liquid,

but that it's not with your normal month to month checking account. And that's going to be your three to six months. That's baby step three. And then once that's done, you guys can start investing baby step four. You can put 15% of the amount that you make before taxes. I want 15% of that to go to retirement. And if you have a 401k through the post office, you want it to go into your employee sponsor to count. So you're 401k. If you don't have that, you can put it into a Roth

IRA and do that. And I want your wife to do the same thing. And even now, she's your fiance. I want her to start doing that if she's to that point already. So now you're investing. Now you're starting the process of building the wealth. And then from there on, you can continue the baby steps. Baby step five, obviously you're putting away for kids college. And then baby steps six, which you guys are going to be at real fast. That's when you start hacking away at this $120,000,

like George said, maybe doubling up and doing $2,000 a month instead of $1,000. I'll tell you this. I thought when you know, Mark, low people and I am, I just, I'm in the process of opening up the law IRA and a brokerage account. Good for you. Good for you,

Smart Vester Pro. That's fantastic. You connected with one. And I wouldn't, here's the thing.

I wouldn't put money into that until you have that emergency fund. That's right. And that might not be until the wedding. Because what happens is you go invest all this money. And now you don't have any. And the HFAC goes out in this house. And you're on the hook. And now you're trying to go

“10 grand into debt to cover the new HFAC. So that's why the emergency fund is so important.”

It is you're never going to dead again insurance plan. So you guys open up, I opened up the savings account was just so, as I thought, out of mind, I'm not going, still it's not money. That's, I need it. Like I've lived. Yeah, breaking case of emergency. And that means it's unexpected and it's necessary. That's right. And you guys should aim for, if I were you, somewhere between 15, 18,000 is probably a really good number for you. Again, I wouldn't

combine finances until you guys are married in November. But you should be having these conversations and you should be talking about it. You should have full transparency until what she's doing financially and vice versa until you do get married. And then everything is combined together. One checking account, one high yield savings account, you can add her as the beneficiary on your 401(k), she can do the same on hers. And that way everything is all together.

“And listen, I'm pulling for you guys. This is exciting. I think that you're in a really, really”

good position. You've got to, you know, an uptick on your careers. You're in a good place with the home.

and you keep living like this. Oh, yeah. You're going to be stacking some cash and building some

“serious wealth. Multimillionaires is what you'll be. I just crunched the numbers for you. Even at”

67,000 household income. If you invest 15% of that from 24 to 64, you're looking at over five

million bucks. Wow. So it's simple. And that's if you guys never get a raise. You don't both

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Go to CHMministries.org/budget and use promo code RAMSI. That CHMministries.org/budget and use promo code RAMSI. Erica is in Philadelphia, Pennsylvania, Erica. How can we help today? Hi, thanks for taking my call. So I am a single female living in Philadelphia. I'm a pharmacist and I graduated with a ton of student loan debt. So at this point, I am wondering how I can get this amount down or if I should invest instead to offset the the compound interest on it. So I guess my question is, do I pay

down the student loan debt or do I put more investment? Okay, how much debt are we talking about? Not that it changes my answer. I just want to know. Yeah, student loan debt is right around 192,000. 192 and what's your income now that you're pharmacist? Currently, post taxes, I may 50, 7, 82 per month. Okay, do you happen to know what the interest rate is on those student loans? A ballpark if it's not the same for all of them? Yeah, it's 3.1%. Okay, okay.

“So your question offsetting the compound interest, the best way to offset the interest is to”

pay more than the minimum payment. To throw as much as you can at it, to knock down that principle, because 3% of 100,000 is a whole lot less than 192,000. So the faster you knock these debts out, the less interest you're going to pay. And that's a guaranteed rate of return. That 3.2%. Versus investing it with market volatility, you could lose money one month, make a little one month, but you're much better off knocking out all these debts because your life is on hold until

you repay these lenders. It's going to be really hard to do all the things you want to do in life, get married, get a house, have kids, whatever it is, go on vacations. When you have all these

“payments stacked up every month, what are the minimum payments currently due for that 192 grand?”

Currently, it's sitting at 1300 per month. Okay. Yeah, I mean, that's a high payment. I tend to agree with George on this for similar reasons, but also I would just add on, you know, I think that there's, you're not the only one who feels that way, who thinks, hey, I could just pay the minimums and anything extra, I can invest that money and I'll feel great because I'll have

$300,000 sitting in investments or I'll have half a million dollars, but you also have to consider

that if you did that for a 5 or 10 year span, that student loan is still accruing. And even if you did invest, and even if you did have $300,000 sitting there, that's your money, now the student loan that started at 191,000 is now creeping up to, you know, 270,000, 270,000, and you have to ask yourself,

this picture before, but it helped me in my husband when we had 90,000 left, and the payment wasn't

very high, and we thought, you know what, we don't need to pay this off, we can just, we can live with this, but it feels like it's like what I like in it too is being inside of a beautiful home, the home is beautiful, it's everything you wanted, as long as you're in there, everything is great, but the minute you open the door, you realize you are right at the edge of a cliff, and it's like a California cliff at the edge, you know, if the house falls off, you are just tumbling into the

abyss, and that's the way it feels on the inside, is I still have this debt attached to me, and you know what I'm talking about, I mean, you feel at every time when you win the bed at night,

“so that's kind of, you know, a more emotional take on it, and I think it's worth it because, you know,”

our body does keep the score in these, in these situations.

Yeah, absolutely. I think maybe the only issue that I find because I do have my own budget is walks off over after all of my expenses, so that, and what makes it even tougher is being single, and not living with somebody being the only person, yes, and so being a rent in big city, and I, I did at one point make very large payments and it helped a lot, and then, you know, switching to different jobs, moving to a different city, being single again, because I used to be married,

it can make so a lot harder. Yeah. So this business with tough parts isn't the, like, we're trying to look for that extra income to be able to put there because all I'm doing right now, surviving. Well, what is the trajectory for you look like as a pharmacist? Because if you're bringing home, you know, what is 69 grand a year, that's probably around 100 grand gross in a high cost of living area. So how do we get you to be making 150 as a pharmacist? Because that would really speed this up.

Absolutely. So right now, that's kind of what I'm looking towards. It's the market within pharmacy is a little tough, but I do have some future plans on finding a job that probably the market in Philadelphia is right around. I would probably say about 140, that really, so that would be as a pharmacist, like a good salary that you can make. Now, I'm looking for other options too, that can help me make more, because right now what I'm making is not just as modern. Yeah,

I guess maybe that's the answer. Well, at this rate, it's fine. You're just feeling hopeless, because making these minimum payments, it's going to take you a lifetime to pay the student loans off. And until you can throw, you know, three grand a month at the debts, four grand a month, it's not going to feel like there is any, you know, hope and sight or light at the end of this tunnel. But I'm doing the math here going, all right, if you can throw 3,200 to these debts every month,

you're done in five years. And that's if you don't get a raise. Now, that's tough. Obviously, you're in a high-cost-loving city. What is your rent every month? Currently, it's right

“along 16 or 1600 a month. Okay. Could you get a two-bedroom and rent with a friend? Get a roommate?”

So next year, I'm planning on renting from my friend who owns a home in Philly, and it will be with a roommate. So I'm this, that 15, 1600 is one bedroom one bath. Okay. So what would your rent go down to? I'm not sure. She would probably work with me. I would say she would probably help me get to like maybe a 1,400. Oh, that's not much savings. I thought I was doing this in like 1,000 bucks or something.

Like, all right, we saved 500 bucks a month. This is worth it. When you pass it along through utilities and maybe food, I don't know how much you would share, there might be something there. If you guys, you know, but if you could get a two bedroom for two grand a month, well now you're splitting at a 1,000 bucks. I'm trying to go through. So there's two ways to get more margin to get rid of this dead faster and that's to make more or spend less. And so those are the two areas,

the two levers. I want you to start looking at is do a detailed budget using every dollar, and I'll give that to you to help you get through this. And go look at all of your expenses.

“Because right now, you feel like you need to live like a pharmacist. You want people to know,”

look at me. I'm doing pretty good. And the problem is that's going to cause lifestyle creep.

You're going to eat out more, go out more, have nicer things, dress nicer. Right now, we need to live like a broad college student, because we got a mess to clean up. The good news is, I don't have any problem eating on them. The good news is, you know, you're rent right now is really right at the 25% mark. You know, between that and your minimum payments, you're at $2800 a month. Where's the rest of that money going? What's your next biggest expense that you go, you know, here's the problem

Do you have a car payment speak of? I give a car payment. It's not much. And it's, um, no, I

owe $1898 worth on it. Okay, that's about $385. Okay, well, that's some margin freed up. Is there anything else? Because I still feel like there's a big chunk of money that's not

“accounted for by all of the major players. You didn't mention kids or daycare or anything like that?”

Um, let me see what I have a budget. Um, there is, I mean, not really. Those are really, it's, it just goes to essentially rent car. Um, I have a lot of, I put a lot of money away and average higher than that. Okay, there's where it is. I knew it was somewhere. So again, I love this conversation because you're, you're wanting to do the right things. You're just doing them in the wrong order. So I love a person who wants to build wealth. I love a person. You're

very responsible because that's a, a responsible choice. But George and I would caution you that there is a better order to do this in because if you're investing, but you're still in debt, you know, obviously it's, it's taking away your piece. We talked about that. And obviously you probably don't have much liquid savings. And so therefore your retirement is at risk. The next time

“you're in a jam, you might liquidate that, which is terrible. So George and I would say you need to”

pause investments. It's only temporary. It's not a scary thing, but you need the full force of your income to do what George said, which is be putting, hopefully around $3,000 a month, on the student loans to get them paid off. Please, please, please cancel and pause those retirement contributions. Hey guys, George Camel here. Listen, we need to talk about your phone plan,

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customers compared to 12 months on the BoostMobile unlimited plan as of January 26. See website for full details. Alright, George, let's hear from Tabitha, who's right here in our backyard, Nashville, Tennessee. Hi, Tabitha. What's up? Hey, so I really paid off my student loan, and I'm not only on the straight narrow, right? I'd also try to even open up the high yield, but it's a checking,

but it has a higher yield than the high yield savings, so anyhow. And I asked them, like, you know, because I want a plan to go to put money down, and I was thinking about the manual underwriting, because other than that, I have one credit card, but I don't use it, so I'm

because you have it just kind of off-basically. So I guess I have the weird thing for the first time,

but I'm wondering, like, am I asking, like, is there questions I'm supposed to ask? Is there a different way to go about it? Because they were like, no, you need credit, like, you don't need to turn that off, like, even if you don't use it, your credit score will still be there, we'll be able to use it, and it should, if it's been paid off, and it should go up, and I'm like, well, just to, for the person listening, manual underwriting is the way that you get approved for a

mortgage if you don't have a credit score. Not if you have a low score, people think, like, get around my low score, but no, if you have a score at all, you can't do manual underwriting,

“but that's the key tab of those. Once you're completely dead free, all the accounts are closed,”

it may take six to 12 months for your credit score to become indeterminable. And at that point, then you can do manual underwriting. So I don't know when you're going to be ready to actually go home shopping. Are we talking three years from now? I'll be like, a little over a year, based on the amount that I'm going to have to say is to get to a 25% fund. Okay, cool. So do you have an emergency fund yet? I know you said your student loan, your loans are

start on the-- On the down payment savings fund. Okay, cool. So here's the deal. A lot of people

don't know what manual underwriting is because they were so ingrained in the broken financial

“system we find ourselves in. But the truth is, credit scores have not been around that long.”

We're talking like since the 90s. And before that, what lenders did was look at things like your income. So they'd verify your income, look at your rental payment history. They'd look at, you know, 12 month history of your bank statements. They would look at trade lines, a utility bills or cell phone bills to determine whether or not they will grant this loan to you. So that's exactly what manual underwriting does and you just looked in the wrong place.

So I would reach out to Churchill Mortgage. You could go to Churchill Mortgage.com and talk to them

about it. They're the number one in the nation because we send all the Ramsey fans to them.

So they won't look at you like you're crazy. They'll go, oh, absolutely. We can help with that. And they'll answer all of your questions and steer you in the right direction when it comes to what you need to do to get prepared for that. Because there are some steps, there's a few hoops to jump through. But I've done it. It's not as difficult as people make it out to be. No, it's not bad. So for a few more specifics. If you're thinking about that,

“you need to be able to show 12 months of documented rental history. So if you're listening out there”

and you're living with mom and dad and not paying rent, thinking you're going to buy a house and do manual underwriting, you need to pay rent. You need to have some sort of documented rental payment history. You know, to have 12 months of other trade lines. These are things like George mentioned cell phones, utilities. You could even use insurance payments for that. Also actual money. Okay. So they're going to want to see that you have income for the last 12 months. If you're self-employed, they might look

back two years. That's important. And then obviously you want a nice down payment. The bigger the better is going to set you up to win. And that's really all there is to it. It's really not that big of a deal. The only other part of this is just making sure you're in the right position and tab of it. It sounds like you're on the right track, finishing up that debt, saving up the three to six months and then getting on to that down payment. Very, very good calls all over the call. All right.

Let's keep it roll in George. We got Madison and Charlotte, North Carolina. Hey Madison. Hi. Thank you for taking my call. Yes, man. What's going on? So my husband and I just got married in January and we started out at around $100,000 in get. We're now at around $38,000. But we are expecting a baby in November. So I question, I know you guys say usually to pause if you're expecting, but how much you think is a good amount

to have to be prepared? I love that question. So yeah, you're exactly right. We call that

"Stork Mode," which is kind of funny, but it's just an idea of the most important thing in your

world right now is being prepared for this baby, not paying off debt. And so yeah, pausing is good. I'm thinking about two things. Number one, I'm going to save as much as I possibly can.

“Whatever money I can because the truth is, if it weren't "Stork Mode," you'd still be doing that.”

The money would just be going towards debt. So yeah, let's keep up that same intensity because the fact in the matter is, when the baby comes and you guys get home and everybody's healthy, you're going to take that money and you're going to throw it towards the debt. So the more the merrier, but I would have a couple of thoughts in mind to go along with that. Number one, George, I'm always looking at the out-of-pocket max on my insurance. I want it on the hook for. Yep, I want to know that if things

go south and you know, we end up having more stuff. What is it? Is it 10,000? Is it 1250? Like whatever it is, I want that amount saved that just gives you just that warmth of peace of mind that you're not going to be going into a bunch of medical debt if you were to have a longer hospital stay. And so once you and baby are home safe, you might have 30 grand ready to throw at the debt while you've been making these minimum payments. So how much could you save by the time babies here? That's a good

question. I feel like we kind of got a good head start. We were able to get rid of a car and then we had wedding money, but I would say we could probably say close to 10, maybe 15,000 before the baby gets here. Okay, so if you made minimum payments on the debts and then through the rest of savings, 15k by no-members, what you're thinking? Sure, the only other thing is that I know we shouldn't have done this that we borrowed some money from a family member, so we do want to pay that for

sure before the baby gets here, but I think we can't get through that pretty quickly. Okay, which is a $1,500. That's a significant shock of 10 to 15,000. Yeah, I mean, I wasn't, we should be able to have that this month or next month. Oh, so that's a sign from this? I think that we could still get to at least 10,000 for the baby gets here. Okay, what's your household income? 105. All right, and are you planning on going back to work after, or are you going to stay home? I do plan to go back,

car, 9,000 and students, the 50,000 to my dad and the rest is credit cards. Okay,

now the bigger question is, are you guys done with debt? Are you changing the behavior that got you here? Like, have you cut up the credit cards? Yeah, we're, we're absolutely good. Good, love to hear that. Well, you're on your way. I'd be focused on just making sure you and baby or healthy, and the debt will get paid. And I hope it's done. I mean, it'd be pretty cool if you guys went real crazy and got it out early next year before that baby's first birthday for sure. That's a plan.

As soon as possible, we've been doing pet sitting and it's like staying at different houses, which we don't want to do that anymore, because it's hard to be newlyweds in a way from together, but trying to do whatever we can to get through it. Yeah, absolutely. I mean, that's the mentality

“that you have to have when you're attacking debt, George. It's, you're going to feel a level of”

discomfort. And if you're trying to do the things that we teach and trying to keep it, you know, life is the same. Nothing really changes. I don't really feel it. You're not going, you're not doing

it right? Yeah. I need to go hard enough that you never want to go back into debt. That's right.

Because you sacrifice so deep. Yes. And for me, it was like lean cuisines. That was my debt from dirty food and outweights. Sorry. I'd go to Kroger. I'd wait for them to be on sale five for $10 at the time. I don't know where that sale $2. I was like, all right, if I can eat for $2 a meal, I mean, I look, if you open my fridge, there was nothing in it. You open my freezer, just a stack of lean cuisines, 20 high. Oh, I think about as the microplastics in today's world, they're going to

study my body for science one day. Your brain is like, really made of plastic. And so now I can't even pass by the lean cuisines in the grocery store. Oh, it's like, it just brings me back. I feel a little bile. Oh, no, thank you. Not doing that again. But that's caused me not going to debt. I know that's

“right. What not? You have to do. Because I'm not going back to that lean cuisine lifestyle. Who cares,”

who cares if you were in the best shape ever? I'll keep my lean physique in other ways. What a great name though. Lean cuisines. You got to admit. Yeah. Do you have a debt free food? Now you're a fruity and you eat super clean. You wouldn't darken the door of a lean cuisine. I wouldn't darken the door of a lean cuisine. I think for me the biggest thing is I don't don't ask me about a coupon. Don't ask me to do something to get money off. Right? Like I did enough couponing that I don't want

any more. That's your PTSD. Yeah, even you'll say, oh, you should do that app. You can get, you can save money. I'm like, no, I don't want to save money. She doesn't want to hear about my promo code to get 30% off pizza. George Campbell here. Let me give you three signs. It's time to stop hoping your debt problem goes away and actually take action to fix it. If you've defaulted on a debt, if collectors are calling nonstop or if you're facing a lawsuit or think

“ones coming, you don't just have a debt problem anymore. You've got a legal problem. And that's why”

I tell people about guardian litigation group. Because here's the thing. If you're behind on your

bills, doing more of the same is not going to fix it. You need a different plan. And guardian litigation isn't just another debt relief company making promises they can't keep. They're an actual law firm. And from day one, you get an attorney who represents you. So when collectors start pushing, you're not guessing. You've got someone in your corner who knows how to respond when your debt problems escalate into legal problems. So don't wait for it to get worse.

Go to guardianlit.com/ramsy right away. That's guardianlyyt.com/ramsy. That's hurting advertising. Results may vary in no specific outcomes guaranteed. Welcome back to the Ramsey Show here in the Fairwins Credit Union Studio. I'm Jade. This is George next to me taking your calls. And we've got Jacob who's on the line in Richmond, Virginia, Jacob. What's going on in your world?

Thank you, guys. Thanks for taking my call. All this calling about, I've been considering building the college and to kind of get a job that I'm more wired for. I'm not taking the can like assessment test. And the hard decision about it is just that on an agreeer now, that pays pretty solid considering I don't have a degree, but it's just not the most fulfilling. What kind of work is it that you're doing now? And what are you earning?

Yeah. It's a lot of just kind of desk work at a computer desk for a labor company. I make about 55. Okay. And what is it that you want to do and what would be a fair salary that

counsel people or speak with them and they kind of leave an impact. From my research work and

expect if I could agree with it would be about 60 to 65 is an average requirement. Okay. I'm confused. Are you talking about being like a therapist? Um, so with the assessment test I did, some of the options why I saw that I liked was like a school counselor with an option.

“And have you looked into what it actually takes to become a school counselor?”

Yeah. Um, so on that assessment it shows that a master degree would be needed. It went with some licensing, which the part that's hard for me is like, I don't mind doing that, but I feel like it's kind of maybe unwise to maybe do this to a really change one and process a baby step number two. Oh, okay. So yeah. Baby step two for those listening, that's the step

where you're paying off your consumer debt. How much consumer debt do you have?

At this current moment, I have about 11,000. I started at 20 like last year. Okay. So you've been making headway on that. And is it just you Jacob or do you have a family wife? I actually just got married in March. I came down and this is y'all went on my honeymoon. Wow. We probably told you to go have fun and get out of here. George, George made a Jesuit better video. That is sad that does you're like, "What do you have for your honeymoon?" They're like, "We're here." I'm like, "Okay, what else?"

No, that's exactly it. So is your now wife working outside the home? Oh, yeah. She's a nurse, well, she's a nurse tech at hospital. Okay. And what does she make? I think right now, she's like about 30 years. She's like hourly like 18 to 19.

Okay. Okay. Okay. And that should be closer to like 40 grand gross per year,

which puts you guys close to a six-figure salary. Does she have any debt? I know. Now all of her schools are in 34 so far, but we might have to pay for it in the future. Have you guys combined finances? Yes, completely. Okay. Because I'm wondering, how can we, here's my goal for you. How do we do this thing? Because I want you to pursue this dream of being a school counselor, but we want to do it smart and we want to do it debt-free.

And so what I would recommend is knocking out this debt really fast and the why behind it is I got this dream on the other side that I want to get to. And that's going to put some fire under this to go, you know what? We make a hundred grand. We're bringing home seven grand a month, whatever it is. Can we throw three grand a month of this debt be done in three months or four grand a month and go hard at this thing? Because now three months from now, now we can work on the emergency

fund. Do you guys have savings right now? We have the thousand dollar savings out there that we're doing in terms of paying off debt? Okay. Good. So I would set an aggressive goal to pay off the debt an aggressive goal to get through your baby step three, your full emergency fund of three to six months of expenses. And at that point, now you can begin investing and cash flowing this school dream. And so that's where you need to get clear on. What is the most affordable school I can go to

to get the degree required? Yeah. Not the fancier school, just what is the most affordable school

“to check the box and say, yep, I have this degree. Because you need to go undergrad into grad?”

Good. Thanks for that. I'm not necessarily saying a fixed factory. It has to be. I just know for a fact. I'd probably be more fulfilled. But yeah, it's just difficult because I'm not sure if it's unwise or kind of selfish to do a step like that. Well, you do have to consider the return on investment. You have to consider a couple of things. Number one, we're not going into debt for it. So just for the master side of it, I mean, a lot of people would borrow anywhere between 60 to

120,000 to be able to do what it is that you want to do. But then you're coming away with a degree making 55 to 75, right? So you have to think through that. The timeframe, I think, gives you some time that you could cash flow. I mean, people do these programs in two to three years. So I think that that gives you some time that if you started with a chunk of money, right? To start out with, it's like, okay, I work a semester and during that semester, I'm saving up for the next semester.

“I think you could cash flow it in that way. And that's the only way that I would suggest it.”

Yeah, I would just do some really deep dives into how I hate the word cheap. But how inexpensive you can get this degree. Is it an online option? Are there things that you can do to mitigate that cost at all? Yeah, that may come. And you have to think through, can you do this go to school full time while your wife carries the load of income for the family? So that's another piece of the puzzle to figure out. Well, you need to work part time and this just takes longer. And you're doing

school at night, for example. So that would be a conversation I would start to have with your wife.

so I'm just going to leave at all costs. I'm going to go do it. You want to be smart about it. And move slowly with peace so that you don't have a pilot on the other side. And does your wife does she plan on moving up to being a registered nurse or is she going to keep

“teching like what she's going to do? Yeah, I think she wants to continue moving up in that”

kind of a career tree. She is about two more years before she can consider like an official nurse. Okay. And we can probably expect about another 10K for her schooling and that we're married. She probably won't get as much financial aid. Okay. Okay. So I wonder if her career trajectory

has a higher ceiling right now. I might have her pursue school first. Like, hey, you go first.

Yeah. You go make secure the bad 80 grand a year as a nurse. So that we have the freedom flexibility for me to go pursue this over here. So there is kind of a given take here. We can't all just go pursue our dreams all the same time and nobody's working. Yeah, there. So it might take longer than you want it to. But I believe this is it's not a selfish thing to go do work that you're wired to do that does give you fulfillment. Okay. Thank you. Yeah. Thanks for the call.

You know, a lot of times George, we we take these calls and we're talking about dollars

“and cents and income and all these things. But the truth is this is the job that you're going to”

be going into day and day out spending the majority of your life. They're eight 10 hours a day. You're commuting there. You're giving up time from your your children and your family there. It matters. Like, you have to feel good about the work that you're doing. You have to feel like you're making a difference. It has to feel worth it to you. So conversations like this, I love them because I'm all about getting people to that. Like, everybody wants to feel good

about the work that they're doing in the time that they're spending doing it. Well, Anna, I always recommend

go meet with some school counselors. Get a feel for what they actually do data to do that. Do they enjoy it. What are the pitfalls? What are the things that they love about the job? Uh-huh. What do things to look out for as you pursue this career field or what school you work at? All of that matters and you don't want to show up and go, wow, this is not what I thought it was. Uh-huh. I sunk all this money. You're not your Ross from Facebook.

Tive it. Pive it. [Music] Okay, guys, let me ask you something. What would it take for you to switch your bank? Because

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Check out the smart bundle from FairWins Credit Union. You get a high yield savings account, a no fee checking account, and the Ramsey B weird debit card. Go to FairWins.org/Ramsey to learn more and make the switch today. That's FairWins.org/Ramsey. Ensured by the NCUA. All right, back to the phone lines. Simon is in San Diego, California. What's up, Simon? Hey, how are we going? Good. How can we help?

First of all, really awesome to be talking to Jay and George longtime listener of the show. Second of all, I am debating on getting a C-lock to pay for one clear-up some MS debt that my wife and I have to buy a new vehicle. Wait, is this a prank called, dude? No. You said long-time listener, and then you mentioned three things that we are vehemently against. Or did you just wait till Dave wasn't here? I totally get that. I was going to feel like I kind of found a little bit silly,

long time prisoner. You guys don't like going into debt. So the goal of all this is to buy a new car?

have is on the Fritz. And yeah, that's a primary concern right now with me and my wife is getting a new car. Okay, so let's kind of pan back here because if you're doing all of this rigmarole to get a new

“car, this is a symptom of a much greater issue, which is you guys are out of control, right?”

There's something going on with debt. There's something going on with income that's causing you to spend on the credit card, not be able to pay the balance. And then instead of looking to something like savings or liquid cash, you're now looking to a line of credit, that's attached to your home, which is what a he-lock is, and you're now thinking about draining the equity in one of your greatest assets to now fund. What I think you said is, I don't know if it's a brand new car,

but a new car, so I'm a little nervous about that, very nervous about that. Tell us when you say your current car is on the Fritz, what does that mean? Does that mean, hey, we just have to make some repairs and we just don't want to pay to $700, or is it, you know, the engine exploded and it

needs a new drive shaft, like what's going on? I'll never use that terminology again, by the way,

that's the best I've got. I was impressive. It's gonna be one of those scenarios where we either keep it for maybe a year, but it is a 2018, and it's gotten, it's gotten so many problems to where the next time we get any sort of, we have to pay more money for this car, it's we're just gonna sell at that point. Okay, so you said you could make this work for another year. So the question now is, can we clean up the financial mess in a year and save up for this car and cash and get a new

TU car? Well, yeah, I have cash, that's the thing. How much cash do you have saving? About 15 grand or right now in a savings? Good, but we have a lot of money actually in an inherited IRA, but we want to use that money to, for use that money technically is our income, so we use the stipends of that to add to our current income. What's your current income without the IRA? Appy IRA, the IRA right now

“it's giving us an additional 30k a year, so then what do you guys make up that would be about 135?”

Okay, 135k is your household income, and what's left on the MX? What's the balance? About 14k. So why don't you use your savings and pay off the MX today? Well, because we then we don't have any savings. Well, we technically do, but then we don't have any liquid cash. I don't like taking money out of that IRA. I want to use that, use those monthly stipends for, you know, as long as I possibly can. Well, you like putting your house at risk with a

heloc to pay off the MX to buy a brand new car that's going to go down and value? I get that it's going to go down and value, but I don't think the home is technically at risk, because if I make a plan to pay this heloc off quickly and don't let it get higher. If I had a nickel for every time someone had a plan on this show, I wouldn't be in the job. So, you know what to do? Use your cash savings to pay off the debt, cut up the freaking MX,

never use it again, never take out a heloc, and then you save up for a car you can afford in cash.

That's it, and make the repairs needed until you have the cash to buy the car you want, and make sure that car and everything other cars don't add up to more than half your annual income. So for you guys, that's, you know, 65 K in cars. Yeah. That's plenty of car, plenty of car. And I think the rule of thumb, there's a lesson to be learned here, and I think it's worth highlighting. So, you cannot solve a problem while simultaneously creating the problem.

And in simplest terms, that is, if debt is your problem, you cannot solve the problem of debt

“while going into more debt. You cannot use debt to solve for debt. The only way you solve for debt”

is to pay it off. And the problem with it is a lot of times people use language like, I'm going to use a heloc to pay off my credit card debt. Like, you're not paying it off. You're simply moving it. It is not a solution. It's just, I'm moving it from here to over here, and the saddest thing about it, George, is they're thinking that that's a better position for the debt. Do I like, well, I'd rather, I need to pay off the mafia. So, I'll go borrow from the cartel.

I'd rather owe the cartel money than the mafia. You're like, dude, this is a terrible life you've created for yourself. Yeah, and it's not even, I don't even want to create any shame around it, because I think what's speaking here is desperation. It's, I see a situation. It's not good, and I'm looking for a quick fix. Can I fix it quickly? Because you know, you know, you're not safe. Like, you know, it's not a good thing. So, the quickest possible thing I can do, I can go over here

and get a heloc. They're going to loan me up to 80 to 90 percent of my home equity. I can do that.

sitting there. And in many cases, that is, you've got the money liquid, but there's that false security of, I have this cash. I need this cash. But we're telling you, once you pay off the debt in your free, now suddenly you've got more income, you can save up that cash. And if you save it up once, you can save it up again. Well, if you're scared to part with the cash, you already did by going 15 grand to death. That's right. Just you did did it without realizing, because someone

else's money that you got to pay back later. And later, always comes, unfortunately.

It does. And that's the part where, and this is, I'm not saying this to be snarky, although George, you could say it to be snarky. I appreciate that. Math, if you're deciding to do math,

“then you have to decide to do math on both sides. If you're deciding to say, I care about my 15,”

thousand, it took me X amount of months to save it up. It's precious to me. Then you have to do the math on the other side that goes, well, you don't really have that, because you owe 14 on the balance sheet. It's not math. Yeah. And so that's, that's just a little something to

remember. It's, it's important, guys. Okay, Brian, in Sacramento, California, I'm sorry, Brian.

How can we help you today? Is it another car question? Hi, Dave. Hi, George. Yes, it is. I want to buy sort of my midlife crisis color. How much is the most of me out of going to cost you? Close. It's a 12 grand. Okay. What a car is it? I would rather not say, because it's very rare, but it has old as I am, and it's a convertible. That's fun. All right. And it's only 12. Okay. Do you have the cash to do it? I do. Are you in debt? What bothers me? No, I have no debt other than my

mortgage. But I am 54. I have only about 100 grand in retirement savings at this point. And you know, my mortgage, I'd like to pay off by the timeline in my mid 60s. I'm currently on track to pay off by 666. Okay. So you're saying you feel bad, blowing 12 grand on a toy when you're buying on retirement? I feel, yeah, I feel self-indulgent and frivolous. It would be fun to have. But yeah, I feel like I need to pay off my mortgage as fast as possible, and I need to build up my

retirement. I'm currently putting 15% every year, based on a 185,000 horsepower salary into my 401(k). Would you be trading your existing car for this car or would this just

“be another car to add to the garage? Okay. Are you married? Single. Okay. Man, well, here's the thing.”

I don't think this is going to make or break your chances of retiring, but I do think if you buy this car, I would really hit the accelerator to get your retirement in order to get this house paid off faster, get your income up even further. You're doing really well right now. You just are in, you know, later on in the game. So I'm not mad about it. For you get to get this 12k car, you've got to be ready for the insurance, the maintenance, the repairs as well. There's going to be

ongoing costs, but again, it's not a make or break. I think it's not a make or break by the time you retire. Your house is going to be paid off, and that money is going to a lump sum that's earning the right rate of return is going to double every seven years. So I think that you can be okay. Just be okay working four months longer than you would have. There you go. As a mom, I plan for everything. I plan the budget. Snacks, lunches, backup outfits in the

car for the unexpected. I mean, everything. Because moms handle a million details every day.

“So don't skip one of the biggest ones. What happens to your family if you're not there tomorrow?”

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“The truth is we wish we could get to every single call in question that pops up here on the show,”

but we can't. So if you have a money question and you want to answer for your specific situation, head over to our website and use the Ask Gramsi tool. Ask Gramsi is a free AI tool that's built and trained on proven ramsi principles. You'll get an answer the same way we'd answer it right here on the show. Ask your question today at ramsisolutions.com or just click the link in the description if you're listening on podcast or YouTube. Jennifer is in Charleston, South Carolina,

Jennifer, you are on the line. Hi, how are y'all doing today? Doing great. What's up in your world?

All right. So me and my husband got married just over a year ago and we were living in a apartment, parent. We have no debt at all other than just rent. Okay. So we got into some family issues. My husband's parents were supposed to be taking care of my husband's grandparents when it's one of them passed away. They were pretty much going to be moving in with them. They got into an argument. They're no longer taking care of grant and hate grandpa. So we have now been blessed with

the financial burden. I guess of his grandfather and trying to to help him financially because he's

unable to want just one income. So we're having a hard time trying to navigate our life moving forward

with taking on this big expense. Since we're both 27, we haven't started our family or anything like that just kind of worried about long-term. So let me get this straight. Your in-laws got mad and decided

“we're not helping him anymore. And they then pushed it over to you guys the 27-year-olds?”

Pretty much. So they don't think that he really looked at all of his options. He's living on his own right now. He was going to be moving in with them. But now that they don't want him to move in, they think that why don't they want him to? It was some argument. Some old bitterness from a thing that happened many years ago. That now they don't want him to move in. Now that he's he's needing to. Got it. And so now you guys are up to bat. And you can also say no. What happens

if you say no? What do you think the repercussion is? Probably just a hard-and-relationship I guess with grandpa. I mean. He's alone now and he's sad. He just lost his wife back in December. No. So he just wants to be around family. And of course he could probably find a home to stay in or he probably would have to get a job again and work to make up. But how is he living in? He's in great health condition. He's loving the retired life. He doesn't want to have to go back

to work. Well he doesn't get an option if he doesn't have money. I mean true. So I mean that that's a hard conversation to have with a grown adult. And maybe the whole family and go listen. We know what he wants to take on the financial burden. We love Grandpa. We need to figure out a plan for him. Let's say he lives another 25 years. Are you guys just going to live there and take care of his bills for 25 years and stunt your own growth? I don't want to. No, you know it's

the same thing to to be asked of you and you have every right to say no. I'm not doing that. Right. And it doesn't mean you don't love Grandpa. It just means you're not going to be a part of this dysfunction and get this slapped onto you to go out. This is your burden to carry forever.

“That's what family does. Now if you want to chip in to help Grandpa, that's a discussion”

you can have and what limited contributions you're going to make per month or whatever amount of time. But for you to just fund his life forever because he enjoys being retired is insane. We're living now. Does he have a home that he owns? He does. He still has a mortgage on it. He could probably sell it but would only make probably a little over 100 grand back in proceeds. Okay. So we have just moved in with him. We told him we can of course cover the home things.

Do you moved in with him? Yeah, we already have. Oh no, Jennifer. You just made this you made this in the plot. Now it's one of you guys to get into this is awkward. Our lease was ending. And so we didn't want to have to sign a six month or another year if he was really struggling.

in stuff. Right. Without going back to work he's in like a $2,000 deficit is what he says.

Pretty much. Really. Yeah. What are his expenses outside of the mortgage? For the list thing. He's been too much money on groceries and so it's not really a deficit. It's a budgeting. He's living about his means for sure. So now we're infunding a budget heavier. We're not even just taking care of the elderly. We're just funding his lifestyle and whatever he wants to buy. It's going to be on you to fund the deficit. Yeah, even more reason to not sign up for this.

“Yeah, I think those are two different things and it's worth noting the difference.”

If you're telling me that this guy just needs to reallocate funds and then he's got enough to live on his own, that is completely different than saying my grandfather who is 90 years old,

who is suffering from, you know, whatever, whatever, health things he cannot work.

He has, you know, $1,500 of social security and that's it and no, right? Those are different situations or just is not that. How much is he actually bringing in a month? A little over 2,000. And what's his mortgage payment? His mortgage is like 792, I think. Okay, he listened or he escrowed his taxes. He pays out a pocket for insurance. Okay. What about cars? Is he of a car payment? No, both of his cars are paid off just the

insurance. He has two vehicles. He doesn't want to get rid of one because it's his dream must stay. Oh, boy. This is getting worse from my, I know that is expensive. I think he needs to

“feel the reality of a situation which means nobody's going to be funding his misbehavior anymore.”

If he can't make the payments, if he goes deeply into credit card debt, that's on him.

You don't need to try to like fund his life so that he doesn't go into, if he goes into debt, that's he's a grown man who can make those decisions and that's, you know, capital ones problem. If they give us 73 year old, the $10,000 credit card limit. And Jennifer, I want to turn this conversation to you just a little bit because I'm going to tell you, this is you and me just, we're hanging out right now. Okay, like you and me, we're best buddies.

I'll probably pour you a glass of shardine. Okay. And I'm a slided over to you and I, and ask you, why would you move into grandma and to grandpa's house? I wonder, do you also have alter your thing here where it's like we can save a little bit of money? We'll split the rent here, we'll split the mortgage, it works out for us. Tell me why you would do that because I'm looking at this dysfunction going Shirley Jennifer wouldn't want to participate in that. Right, right.

So he has, he has offered us a deal, ish. So we were an offering. I know for you, you can't refuse. Right. Right. So we're already paying rent. So that money is already kind of going down the drain, you know, in a insect. So we're paying towards the house, which is about what we're paying in rent anyways. So we're not really showing out more money than we already are. Okay. He has stated that this house that he's in now just isn't going to be a good house long term

for all of us. Okay. So he said, if we move in and we pretty much agreed to take care of him, that when we find it the next house, when he sells his house, we'll get whatever pros or whatever money we've put into his house now as we're living there. We'll get back and then he'll pay the down payment of a new house for this guy should become a politician. He meant a lot. He's coming out of his mouth. He should be in Congress right now. Because guess what, he's not going to have

any money. Right. Take give you pretty much thinking on that he's going to get a good chunk of proceeds from the house sale. How is he going to take care of himself though? Because he would need to take those sales and that would cover, I don't know, a nursing home or whatever living facility he'd go to, whatever care having forbid he doesn't need a nurse or someone to take care of him. This is how the money he has to his name. He can't give it to you. Right. And I want money saved. He's told

me in debt how much money he has. I thought you said you only had the 100,000 in the in the house. What else does he have? Oh, no. I mean, he has savings and stuff like that. I'm just talking about what he sells the house. So he has like how much does he have in savings? In a savings account.

“And I think he has 40,000 in another savings account. But he's trying to think how long that's”

gonna last him. Well, and that's the biggest problem because he's 73 in healthy. This could go on for another 25 years. And you could look up and be like, we paid the debt them house off. Yeah. And then he's like, oh, I don't, you know, I think that at a 25 grand deficit, all of his money is gone in like five years. So I'm not hitching my wagon to anything this guy's doing. I'm not trusting anything. You don't need it. You don't need it. Jennifer, you guys can go out and make a life for yourself

and buy the house that you want in time. Nothing's on fire. We don't need to make these crazy deals to be successful. I would move out tomorrow and say, love you grandpa. We'll visit at Thanksgiving.

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“All right, all right, Laura is in Gray Falls, M.T. Montana. Okay. Did I get it right? Laura is it Montana?”

Yes. All right. Gotta remember those abbreviations. Elementary school payment. Elementary school. I'm telling you. How can we help out today, Laura? Yeah. Thank you so much for taking my call. So our question is should we pause the step two to have the lead team on the exterior of our house scraped and redone? Oh, that's a health hazard correct major. Yeah. So our children, two of our children have tested with lead exposure in their blood

and it's like horrible, but yes, I'm saying yes. How much is it gonna cost to get rid of this poison that is on your home? About $10,000. Really just to get it out of there? Because you got to repaint the whole thing? Yeah, so the pain is in horrible conditions. All the whole house has to be scraped to remove whatever's chipping and then they have to repaint the whole thing to seal it. Okay. And you guys are in debt right now. How much debt do you have? We have 23,000 in student loans

and 103,000 on our house. Okay. Okay. So just 23 is your consumer debt. Yeah, that's where it gets really hard for us because we had planned that we would be done with that student loan within the next year to year or half and so now or just like do we wait the year and scrape and do the house later or do we address it? I would just make minimum payments on those student loans and stack up as much cash as you can to cash flow this whole thing and be done with it. I mean to me,

this is an emergency. If it were my kids and I'm weird about this kind of stuff too, I, yes, there's certain things in life that Trump getting out of debt for the moment, just for the moment. And this is one of them, like health is such a big part of our life. Otherwise, what are we doing it all for? And if you don't deal with this, it could cause more bills and health bills down the line. So absolutely, I would pause the debt snowball and just make minimum payments. How fast can you

guys cash flow the scraping and repainting? It'll be like five, six months. Is there anything you can sell? Can either of you work extra, get side jobs? Because I wouldn't want to be in this house if I'm telling the truth. I'd be getting out of there until this thing is settled. Yeah, you live the same last summer and we just came up with, like, that would be a horrible financial decision. Yeah, no, I would not sell over a $10,000 repair if you wanted to look at it like that.

Yeah. Do you have family nearby? Yeah, yeah, we do. And then I'm also wondering, can you break it down? I mean, obviously you want to have

the house repainted, but can you do the scraping first? And that's the first thing we do and then

for a while your house looks, you know, ratchet and then once you've saved up the other half and kind of break it up.

“So it's not, it's a little bit more bite-sized. Does that make sense?”

Yeah, that's an interesting spot. We had thought about scraping it ourselves, but then you were concerned that like, we're just closing ourselves to all of a sudden. No, I'm not saying scrape it yourself. I'm just simply saying, how much is it? Because my guess is it's probably, I don't know, but it might be more expensive to repaint than to just chip off or scrape off the bad paint. So I'd want separate estimates. And just how much is it to get rid of the paint that's on the house? You might find that that's

We just got a bid for like the whole thing. So I would check and see if you can get different

bids and maybe you can find someone to scrape for three and paint for four. Well, now you just save three grand on the project. Gotcha. So I would be doing some homework to get that price down. As I stack up cash as fast as possible. I mean, I'd be flipping things on Facebook, Marketplace to try and create some cash. Like this is an emergency. Imagine your child needed an emergency procedure or medicine and you had to come up with 10 grand to get it. That's the

level of urgency. I would personally have for my family. Yeah, I agree. I would do the same thing and there are certain things guys and we can do a better job of letting you know that because we're no one goes harder in the paint on debt than us. We want you to move hell and high water to get out of debt. We want you to sacrifice to win all of that is so important. But we can't let that stop us from doing the things in the moment that really do require our attention. Obviously, anything regarding

health. We're the first ones to tell you if there's a medical emergency, if somebody's having a baby,

you need a pause. Where the first ones to tell you if somebody loses a job, if if somebody goes into the hospital, you need a pause and there's other things that need to happen while you're paying

“off debt. Like you need to have the right insurance. You need to have life insurance. You need to be”

paying for a will. Like there are certain things that it's okay to do while you're doing baby step two, paying off the debt and you should feel no shame about it. Yeah, you're not a failure because it took you six months longer to pay off the student loans. No, life. We're still going to cheer you on. Life be life in, as they say. All right, Andy, Detroit, Michigan on the line, Andy, what's up? Hey, I'm calling on behalf of my son and daughter-in-law. The bought-in money

put house and they thought elbow grease would be enough, but it's not because they would pay

to pay to the pay checking. Can't fix things. And while they recently had an emergency flood, that made the tuition worse, it's been displaced into a hotel, and now they're talking about it possibly being condemned. Oh gosh, is insurance paying? It was the flood something like where the water pipes burst or was it like it rained a lot in flood in water came in the house. Like what was the nature of the flood? The reason that had to happen was a pipe burst and it caused

this whole thing to start, but they've had floods from rain in the past that hard-clier damage. So when insurance is passed to be going to cover some of this, that they're finding a lot that was already wrong with it. So insurance is probably not going to cover a lot of things have been launched for many years. Yeah. They're finding the successes in the ceiling, those wiring that have cloth coverings. Oh, and they're not getting inspection. They didn't get an inspection when they

purchased the house? They did. They did. Yeah. And they found none of this. They thought this house is

“perfect. How long ago? How long have they had house? It's been about a few years, I believe.”

Like a few years, like two or a few years, like eight. I think it's been, I want to say three years. Okay, three years. So what are you? Tell us, tell us why you're calling? I'm calling because I want to advise them. They come to me for advice, and I want to do it right. Whew. I'm wondering if the short fill is what's going to be needed because I don't see if insurance will cover this, then everything will be fine. They can look the way out of this,

but if insurance won't cover this, then the house is not livable. I'm afraid for them. I mean, I'm really, my husband and I will be making them in the our house and do whatever it takes. Uh-huh. But I just want to have the right advice, but I'm financially, and I don't, I don't want to do that up. Sorry. Are they panicking? Uh, and I'm not saying your panic is misplaced. But are they panicking as much as you are? Or are they like we're fine?

They're panicking more so. And when I talk to them, I, I, I show a lot different side. Right. You're like, I'm gonna call. I'm a season trying that to show. Yeah.

“Okay. Do you know the numbers around the house? Do you know what they paid for it?”

I, I believe it was like around 130,000. And it's just a little, you know, 800 to 900 square foot house. But the market, the way the market was when they bought it, this would all be to get. And if they just put it for sale as is, hoping a flipper will take it, do you think that what do you, what do you think reasonably? I mean, I don't know if you've done any research, reasonably, what do you think they could get as is? I don't know. I have not done that research,

but I know they would be because they didn't had a chance to pay out very much of it. Yeah. What's left on their mortgage? Well, what's left on their mortgage? They had, I don't know. I, I don't know specific numbers here because I try not to get to their business, I'm not sure. Yeah. Another one. Yeah. So I'm trying to get advice while not being too much in their business. Listen, I'm kind of glad that I don't know the numbers. That makes me know that there's boundaries

help. Okay. That's fine. Well, on the advice front, what I would be doing is helping them navigate

this insurance landscape because that's complicated and it's a headache and you think you got one denial, so you give up. I would encourage them to appeal it, get a public adjuster, do all the research necessary because this insurance thing is the make or break if they're going to be able to get out of this unscathed or not. And worst case, there might be an as is cash buyer situation and they might be on the hook for the difference and that's a real problem for them. So I would do everything

in my power to guide them to that insurance process and get this thing covered. Welcome back to the Ramsey Show here in the Fairone's Credit Union studio. We're headed

“back to the phone lines where George and I find Mark in Albany, New York. Mark, how can we help out today?”

Hi, how are you? Doing great. What's up? So I was just wondering, is it ever okay to use or to plea your emergency fund to avoid taking a loan when you're making a big purchase? Is the big purchase on emergency? Something that is urgent, something that is completely necessary and something that is like time's back to? Yeah, unexpected.

No, it's something that's sort of been expected. It's for a car because my first micro on one is

getting a little too expensive to maintain that although safety isn't yet a concern, it's slowly getting to that point. So does the car need repairs? What do you mean expensive? So I have to repair the, not have to but the mileage is suffering from damaged cattle with a converter and a couple other things and it's also just losing value. I know that shouldn't be my primary concern but I'm just- Is there a loan on it? No, there is no loan of the paid off.

“Okay, and what kind of car are you looking to get? How much is that going to cost you?”

Um, it would be about 30,000. And would you be selling the current car?

Yeah, I'd be trading it in most likely. So you traded in and paid cash for this next car? Yes, yes. Okay, I did not use the emergency fund and I would be taking out a loan for about half that amount. Uh, what's the, what's the, what's the trade and amount that you think you're going to get for the existing vehicle if you don't put the repairs in? Um, I might get 3 or 4,000. Oh, okay. Um, not much. All right, how much is in the emergency fund?

Right now, I believe it's 11 or $12,000. Okay, so you don't even have the money to even buy this car. It's all like you have 30 grand sitting in the emergency fund ready to buy that car. Yeah, where's the other money coming from? Well, I have 11 in the emergency fund and I've been saving up in a new car fund. I have about six years, 17 in the new car fund. Great. So why can't we just spend 16 or 17 since you have a new

car fund that you've saved for? You can get a great car for $17,000. Uh, I suppose I could. It's just I found what I really liked and I think I'm going to have a pardon me. I was just saying ding, ding, ding, ding, we have a winner. You got to the actual the bottom of this, which is I saw it and I want it in it looks fancier than the 17,000 version. Huh. What kind of car is this? Uh, it's used. So it's not a new car. Don't worry about that.

Uh, it's a 2023 Q5. Oh, I thought we didn't want to get into expensive cars with expensive maintenance and expensive insurance in premium gas. That is true. Yes. Well, we are. This is different. Okay. So I, I mean, my, my answer here is very cut in dry and we can get into the wise about it. But I think that you did something very intentional, which you said, I'm going to need a new car soon. Therefore, it's not really an emergency because you saw it was coming and you started saving

“money, which I applaud you. That's exactly what you should be doing. And you saved up a pretty”

penny, saved up $17,000. Nothing stops you today from saying, I'm going to buy $17,000 car today. And I'm going to continue to save towards that car fund so that maybe next year or at their appropriate time, I can add another 17,000 to it. And then I can come up and get my, what is it? I, I, I, Q, what is

months to a year while you save up another 13 grand? Um, for another six months, I'd probably be able

to save up seven grand. Okay. So that puts us at about 24. Yeah, just about. All right. I mean,

“I'm looking at them online right now. I'm looking at some 2023 Q5 sitting at 23 grand. So I think it's”

possible to do some research and negotiate and find the right one for the price. And maybe it's eight months. Okay. And then we'll have 25 grand. And so it's up to you the timeline. But the goal is don't use the emergency fund except for emergencies and save up and pay cash for this car and don't let them talk you because you're just looking to happen. You're going to step on to that lot. And they're going to say, well, do you want to just see the 20, 26? I mean, we can get you in for whatever

payment you want. I mean, it will, well, we can work with you. A sneaky sneaky. So I already know the worst thing you can do is say I want my monthly payment to be this place. You're going to sneak in all kind of stuff. Well, we're not even talking about monthly payments. Love and just they're I know. They're going to try to get you into a fancier car that gives them a higher commission, talking extended warranty. I mean, I just played this game. They put low jack on a Tesla,

“which already confided self, Jade. They put low jack on there as a little extra. Try to add a little”

something. You can't take that off. I do feel like though, when you go to the car dealership and you've done your research online and you're just like, I'm here to pick up the car. Like I'm here to get that car. I feel like there's less of that, you allow for less of that kind of inviting in of the sales guy. It's just, I did my research. Do you have the car ready? Here it is. Great. Okay. Can you move on the price? Yes, and you go to the finance office to talk to that guy,

no matter how you're paying. And then he talks, he wants to get you the warranty and the pink protection package. That's true. It's exhausting. Yeah. I'll be honest. So Sam and I just upgraded vehicles a couple of, I guess it's only been a couple of two weeks ago for him. And it really was, it was the best experience ever. I should give the guy a shout out. But yeah, looked online. This is the one we want. We called ahead of time. We said, hey, this is the car we're looking at.

He goes great. I'll have it ready by the time you pull up. This is the Toyota in Colombia. He goes, we'll have it ready when we pull up. We pulled up. It was right there. He goes, you guys just want to drive. He handed us the keys. He was like, I don't need to go with you. I trust you. Just like that. Wow. So we go test drive the car by ourselves. Come back. He's like, so he's like, are you guys, how are you wanting to pay for this? And I said, let's decide the price first and then

we'll decide me being sneaky. Yeah. He goes, all right. And he goes, what are you hoping to pay?

And I said, here's what we're hoping. And he goes, okay, I said, if you can do that deal, I said,

we'll walk away, you know, we'll walk away with a car today. He comes back. He goes, I think I can get there. I said, all right, we're paying cash. That was that on that. And that's it. That was it. So simple. But you got to get to your point. Got to get to the heart of the matter. You got to have the walk away power. You got to know exactly. You got to know more about the car than they do. First of all, because otherwise they'll, they can talk around you in circles and get you into car that you

“didn't actually want or you didn't ask enough questions about. I think the worst thing is when”

you're like, I think I want a new car and you just go down to the lot and you're just browsing hoping to be sold. Okay. Well, this and it's why like the car max and car vinas of the world have done so well because nobody wants to have to sit there and negotiate and haggle. They just go, I see that car for that price. Can I have that? And they go, sure. Yeah. When I went normal dealership experience. When I went to the place, that was their whole thing. We get you in and out

in less than an hour. That's amazing. And it was less than an hour. Can I just say it's not an interrogation,

it's a time share presentation. You're there for three and a half hours to drink some curing coffee. And you don't even want to have what you wanted. No. That's the worst part. All right, George. I hope we help Mark. The key is it's not an emergency and thank you for at least admitting it's just the shiny new thing and you want it. And so now you can look at your piece of crap car and go, well, the catalytic converter is out. It's going to be a safety issue and you just say it, you want

a nice new car, at least new to you. And it's okay. Just make sure everything, all the things with wheels and motors don't add up to more than half your annual income. That's right. And go, there's some opportunity costs here. And if you're willing to take on the cost of ownership and maintenance and premium gas, which right now, that hurts. Yes, it does. Go for it. Put it in the budget. Yeah, you got to know the difference between it and emergency guys. We've hit it earlier. It's got to be

urgent and necessary, boy, and unexpected. Dave Ramsey here. Most people stay stuck with their money because they're not paying attention to it. Most people are living paycheck to paycheck. Stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke and you deserve to have something

for your money to show you how to free up extra money every month and use it to beat debt and build

lasting wealth. Plus you get real coaches guiding you through your plan step by step. Look, most people hearing this will just keep hoping something changes, but not you. You're ready to make change happen starting now. Go download every dollar in the App Store or Google Play and start for free today. All right, today's question the day is brought to you by YRe5. If you've been turned away by

other lenders because your private student loans are out of control, YRe5 may still be able to help. They specialize in refinancing options built specifically for borrowers in your situation. Go to YRe5.com/RAMZ. That's the letter YREFY.com/RAMZ. Remember it may not be available in all states. Today's question comes from Carly in South Dakota. We're debt free with a fully funded emergency fund so I'm creating sinking funds for newer cars and house projects. I'm guessing that the

sinking funds can't be cash and envelopes. So do I need to open separate savings accounts or

“separate checking accounts for each goal? What is the best way to create a sinking fund where”

I can put my money aside and not touch it for those expenses? These are great questions to be asking.

Yeah, very good. Okay, so let's start with the first question. She's saying, okay, it's not

going to be cash and envelopes. Do I need separate savings accounts? I think it's helpful. Yeah. And what's cool is that we have our partner Fairwins. We're in the Fairwins studio. Oh, yes. And what's really cool is they created this just for our fans. You can have up to 10 different savings accounts that are earmarked for different things. Wow. Within the high old savings. So that's what I would do personally is have a car fund because these are big ticket items.

Yeah. If it's little stuff, you don't need it all in separate savings that gets complicated. But a big house project or a car, I would label it car. Otherwise your emergency fund gets convoluted. They're actually different accounts or they like bucketed. Yeah, they're bucketed it in there. So they're can actually move money around between them. Oh, wow. That's nice. It's very convenient. So that's that's one feature. In the sinking fund part, you can set that up in every

dollar. To actually mark it as a fund. And, you know, if it's, let's say $1200 for the years what you need. Yep. You can set a sinking fund for a hundred bucks a month in every dollar. Perfect. I love that. And that's just one of the ways that every dollar really helps you have

a functioning budget doing the things that you want to do. I always say good budget is detailed,

“realistic and flexible. And that's what you can do. The budget's very flexible. You can add”

the line items in there. You connect your bank. I'm a pro bank connect. You can track your transactions. You can set goals. All of those things you can do within every dollar and you can manage. You're sinking funds. I love that. All right. So great. Mary's in Denver, Colorado, Mary. How can we help out today? My question is, I am married. My, and we're having kind of a dispute on retirement. I contribute a lot to my retirement account. And my husband contributes

nothing to social care. So I'm asking your advice on how to address this issue. So how old are you guys? I'm 37 and my husband is 39. Okay. And when you say his goal is we'll just live off social security. Is that what I hear you saying? Correct. It worked for his parents and he believes that that's all he needs. Okay. Are you guys out of debt? We are. We're on baby set four. Okay. So just to frame up this conversation and then we're going

to go to town on this. So let's talk about social security for a brief moment because he's not the only

“person in the world who has had that plan. But the truth is social security is only going to replace”

about 40% of your income and that's if it's still the trust fund is going to be depleted by I think 2032 or something and that's going to lower the benefits by probably 23% or so. Yeah. And the average payment right now for social security is like two grand. Yeah. 18 to 2000, which is you guys don't even inflation. Imagine 30 years from now how much two grand is going to get you. Yeah. So I think some of it is the actual facts and it may it may need to come from someone else.

You guys might need to sit down with a financial advisor or a smart vester pro and have them walk him through the reality of the situation and what could be. So sure. Could you get by office social security? Ask people who are doing it. It's a sad reality. That's usually the

have as social security then the rest of the family, the younger members of the family are on the

hook or feel like they're on the hook to help that person survive and that is certainly not the

“position you want. I think social security is fine as supplement as a supplemental piece of your retirement”

but it should not be the main piece. Okay. We've made that argument. So let's talk about the convincing part. So you're investing. How much are you doing the 15% or? Correct. Yeah. I do 15% and I make significantly a lot more than my husband and I also work full-time. He works kind of part-time. Why is that? My issue is well he works for his dad and his dad owns a concrete company and his dad

is getting to in my opinion, he needs to retire and the business is just not really going anywhere.

What's he earned and working part-time? What's he earned working part-time there? He makes about 40,000 a year. And what do you earn? I make about 55,000 or sorry, one 55. 155,000. Do you and if you don't want to answer this you don't have to but do you feel like because your income is so solid that he kind of feels like he can coast and doesn't really need to do much? Yeah, I do. He also has three kids. I'm a step mom

to three kids and I have none of my own. So my concern I guess long term is my family. We have a lot of inheritance coming down the line here and I want to protect myself. If I have a child of my own, you know we're trying but it's not working and so I'm saying if if I have a child of my own, I want to be able to pass down my family's inheritance to my child and I also want to I just want to protect myself. I'm not saying like we're headed for like a divorce but I just

in some way feel like I'm being taken advantage of and yeah. I just don't know how to navigate it.

“Well you're seeing some red flags and you don't want to ignore them and I think that that's”

very smart and scary. It's scary to not put your you know bury your face in the ground. You're trying to be alert and see what's going on and I applaud you for that. Have you actually shared your why behind all of this? Not asking him why is he not contributing? Here's why I'm scared. Here's why I'm contributing. I have a fear of not being prepared. I want to leave an inheritance to our children and their children. I want freedom and retirement. I want to

be able to travel. I don't want financial stress. Does he care about any of that if you share it with them? Yeah I shared it with him and yeah I've shared it with him. I before we even not married I shared with him my retirement dreams. I want to have multiple homes in different states. I want to be able to travel. I want to see my family. I've shared all of that before we even got married because it was a concern of mine and I've just worked very hard in my career. I've earned you know

“where I'm at and what's his response? He says that he I think he honestly is just”

content being at home, being around his children. I think that over the years his dreams have kind of changed compared to mine. Has he given up or is that truly what he wants? He just wants to be a state-owned dad. What do you think it is honestly? I think it's a little bit of both. I think that he doesn't. I think honestly he feels a little defeated. The fact that I make so much more money and that I'm already so far ahead of my retirement. When I say I want to travel and I want to see my

family, I have a large family. He is a very small family. I want to go golf and do all these things. He's very concerned being at home. It's just like it's very different change. Yes. I see if you guys

were never aligned on any of these like values and goals. It was just sort of like well we're different.

It'll be fine. But now there's a chasm that's growing between you guys as you are very driven. You're ambitious. You have certain goals and dreams and he's gone that's not for me. And the truth is he doesn't care about those for you. How long have you been married? We've been married five years and I think that the things have changed. We've been together almost nine. Children have grown up. They're now 2018 and we have an 11-year-old in the 20-year-old has a baby and I think things

as the children have gotten older. The priorities have become more of I want to be around my grandchildren. I want to be around my children and less about traveling and doing all those things. But I feel free

that can only be solved in a counselor's office. This is a marriage problem far more than a financial

problem. And I hope you guys can figure it out in a line on some vision for your future. [Music] You spend hours researching before making a major purchase like a home or car. But it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car home or any other type of

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All right, we got not bad. We got Grace who's in Dayton, Ohio. Hey Grace, how can George and I helped today? Hi there, good afternoon. So my question is regarding whether I should use my home equity to pay for college. I am a single mom to two teenagers ages 14 and 16. Do you recommend a helox for this type of situation? I owe 96,000 on the home and I have roughly 200,000 in equity. Oh boy, okay. So let me start with the the empathy which is I love that you're thinking

about ways to for your kids not to go into debt. I love that you're thinking about ways to pay for college that doesn't put the debt burden on them. However, putting it on you and your home

in your place of safety and security is something that I would never, ever, ever recommend.

And the reason is hey yeah, a heloc is like a credit card attached to your house. So you're going backwards. Now you've got a variable interest rate while putting you at risk for foreclosure or a few mispayments. So you're trading this unsecured education debt for secured debt attached to your

“house. And let's unpack that just a little bit more because I think it could be helpful for you”

and anybody listening. Guys, when we when you bought a house, you weren't thinking to yourself, oh if I buy this house, it would make a very good credit card for me. You bought the house thinking this is a way that I can build wealth. This is a way that I can have security. This is a place of do you see them saying financial security and emotional security? You're like resetting the clock on when you can retire now. Yeah. Which puts you at risk of you becoming a burden to your

kids. So I want them to go to school debt free, but let's make a plan to take debt off the table and go, okay, what are all the ways? All the levers we can pull that don't involve debt. And that might mean they're going to work part time. It might mean they're going to go to a two year community college to knock other free wrecks. How old can save in a 529 plan? How old are they? Are they ready to go right now? They're 14 and 16. Okay, so they talked about that time.

“Have they been conversations about college plans and what they might want to do?”

Because they're still young enough that they don't know. Yeah, they do know they would love to go to a four year school. So I'm just trying to figure out how I can potentially make that work for them. And is that do they have the one to stay in state? Because I would start to set some boundaries on hey, guess what? School costs this much money. It's going to be $200,000 for you to go out of state to this quote unquote dream school or quote name brand school or you can go to the school

down the road for 5,000 a semester. So you can start to help them understand the math on this.

not even sure I can afford that lower cost route with you know what I'm looking at. But that's fact, you're not factoring in if they get scholarships grants and that's where the the pressure's on to do really well in school. Get really good grades on those those SATs and maybe there's even athletic scholarships. I don't know what they're into. But I would be looking at every scholarship and grant possible. You saving up as much as you can in a college savings account like a 529 plan

and having them choose an affordable school and possibly working part time and even working now

to start saving up for that. Doing community college on that first on those first Genets is going

to save you a ton a ton. I wish I had done it if I had been able to. So that plus what George is saying.

“I mean, that's how people that's exactly how people do it. People call in all the time”

who paid cash for college and that's the way they do it. And I would say to George's point, don't be afraid to let them have some skin in the game. You know, this is the point, especially for the 16 year old applying for scholarships and creating an environment where they can be accepted for those scholarships, that ought to be their full-time job. You know, also while they're working out of supermarket or McDonald's or wherever else they're working. So them having skin in the game,

I think is actually really, really healthy for their college relationship because they'll value it more. Okay. I like that. Yeah. And if you want to some help with the conversation, you can go watch borrowed future. It's a free documentary we created. It's on our YouTube channel. It just starts borrowed future. And that will cause them to be asking questions. And it will likely scare them away from going into debt for college. And so that way we can do the work for you.

I also talk about this in my book, Breaking Free from Broke, I've all chapped her on student loans and at the end how to go to college debt free. That's the goal. Because I don't want to set you back in retirement and you just take on the burden and go, well, at least the kids went to school debt free. Now I'm shackled to debt for the last 20 years. Yeah. And I mean, we see that not just with helux grace, but even with folks doing parent plus loans, it's just, it really is, I think what it is

is parent guilt. In this case, mom guilt, where it's like, I don't want to be the reason that they

“go into debt. Or I didn't do a good work job. And it reflects on me as a parent. And the truth is,”

I've said this before and I'll say it again, the ability to pay for college is a privilege, both for the parent and for the child. If you're there's plenty of people who meet us

on down the line, their kids have already gone to school and they never, they didn't find Ramsey

Solutions in time to kind of create that pathway. And that's okay. Like, we're all learning, we're all making mistakes. But I will say the most important thing that you can do even more so than paying for the college is just starting to have the conversation very early and very often on what the expectations are. So if you're just saying, hey, this is what my parents did for me. They said, there is no college fund. We don't have the 529. If Jade, if you want to go to college,

you either need to be very smart or very good at sports. And they said that straight up. And I was like, okay, got it. Let me, let me work on this. Yes. And kids, I think, I hate to say the word kids, teenagers. I think they're responsive to that, especially if it's the household that you brought them up in, which is, hey, we're responsible for ourselves. And, you know, we're self-starters, and that sort of thing. So I was just at a local high school in Columbia, Tennessee, and we just

release this video on my YouTube channel. I asked high school, there's money questions they weren't

ready for. Oh, and it was shocking to me, Jade, that I was the first person to be asking them

“questions like, hey, what do you want to do after high school? Okay, what's that going to cost you?”

Will do you plan on taking student loans? Yeah. How much student loans would you, how much debt would you be willing to go into to get this? Wow. And what work was it, was it crazy what they said? Oh, they had, not one, well, the funniest one was this girl won the beach. She said, I want to stay at home. I want that sweet. You want to have kids? No, she said, no, I don't want kids. So you want to be a stay at home wife? I said, how will you spend your time? She said shopping?

Oh. And I said, I wish you the best of luck with this plan. And God bless the man who signs up for that. Oh, but a lot of the kids were just sort of like, well, college is the next step because I was told it's the next step. I don't really have a game plan. I hope I have a job on the other side that pays me enough to knock out my student loans and whatever other debt I have. And so just a way to find her that parents need to be having these conversations

early and often, it should not be a YouTuber like me asking your kid for the first time at 16 or 13 point. How are they going to pay for college? What's the game plan? Why are they going? Because you heard her say, well, they just want to go to a four-year school. Well, why? Because our friends are not exactly the football team is great. Exactly. That's the real reason kids are going. The brochures. They don't talk about how great the

library is. Yeah. And the quality of education. They're showing you the water slides, the cafeteria, the football team, how exciting it's going to be. That's how they market these things to get you to

is I go to college. Like I have to go away then I can have a dorm room and further I go away the better and also the more expensive. Yeah. So true, George. Yeah. Having these conversations

“so, so important. And again, if you're able to do a 529 and fund your kid's college, that's”

amazing. What a privilege. That's fabulous. Good for you. Good for them. But you're not if you're not

able to, that's also okay. As long as you're having these conversations, as long as you take debt off the table, totally fine to tell your kid, hey, you're going to work for this. I'm going to work for this and you are too. And you're going to work more. And they may not thank you now, but promise you, when they're in their 20s and they look at all their friends with student loan debt, they're going to go mom. Thank you. Thank you for allowing me to avoid student loans.

. Hey, do you ever get to Memorial Day weekend and wonder, how is it almost June? Summers almost here. Why do I feel like I'm in the same spot? This weekend, you can grab two hardcover books and assessments for 20 bucks. And that matters because summer chaos is about to ramp up and you want to keep your focus. Kids at a school trips, fourth of July party, before it all gets wild, grab the books and tools that help you stay on track. So when it all hits,

you are still on track. Two for 20. Go to randiesolutions.com/door. While we're coming to the end of the line, so that means one thing, scripture on quote of the day, George. Can't miss it. Galatians chapter six, verse four through five says, "Each one should test their own actions." Then they can take pride in themselves alone without comparing themselves to someone else. For each one should carry their own load. Um, underline that. Check yourself before you record

yourself. Your best check yourself before you wreck yourself. All right, Mark Twain, not Dr. Dre, said a man cannot be comfortable without his own approval. I'll chew on that. You on that a little bit. Come on Mark Twain, we were just on Dr. Dre. And here you come. All right. The drive is time. Some say. All right. Wow. That really makes me want to laugh. Alex from Los Angeles is on the line. What's going on, Alex? Hi, guys. Thank you for the Dr. Dre shout out.

You're not going to be in the time. He's a real one. Yeah. So I had a question basically for how to,

how do the baby steps involve a newborn baby that we had with my partner? And with those baby steps, what are the sighting factors that decide who was in with who is the most money,

“is it who was closer to work, is it who has the most family around? How does that all tie in together?”

Well, they're definitely all back to their coin toss or a thumb word, be my favorite options. Are you guys getting married or tell us about the major relationship? That is in the upcoming future. I'm getting married together. Of course, having a strong family foundation to begin with. So again, that's in the line. And then just I guess just making sure that I do the best that I can from my family, whether saving the most money, whether it's moving into the cheapy city,

I just want to see what guidelines are there for the baby steps and creating a family. Well, are you in your partner in different cities? You've mentioned that a little time. Where are you and where are she? It's about a 40 minute commute from the both cities. Okay. We'll keep that confidential. I want to get to your question, and I don't want to side track it, but I'm kind of like, why not just get married? Like solidify the babies here. There's no question you're going to

“be living together and starting a family together. I think George that that would be top on my list.”

First, and then I'd be looking at spots. We can have the party later, but why not? If we are doing

this thing, we're in this together for life with this new baby. Why not just go down on the courthouse, get the marriage certificate, and have some protections in place for both of you? Definitely. I feel like that would definitely make the household stronger in come as well. We can get combining comes and exactly. We've got a goal going, get the babies that's not out, but it's more secure than the most of you. Yeah, definitely. She's not really into this,

like mindset, like saving money, and you know, building a good foundation. So I guess that's kind of what what a shame. Coming with me. And like working going home, buying stuff, jewelry, things like that. Cardet. Okay. I'm going to use the save for college money. Do you have? Yeah, I'd say so.

Yes. Okay. I'm about 20 in total. So yeah. What she have, do you know?

I don't know. That's kind of, you know, on her side of the court. We haven't been as vocal financially, but she does know that I have this mindset of getting towards that end of the baby steps. But again, I don't want to scare her away. I'm going to move in with him. Can we be real Alex? You guys made

“a baby together. I think it's time to get real with each other. Well, how new is the new born?”

How how young is this baby? One month, one month. I will say this. Come at me in the comments. But if you have this conversation with the one month old, and she's still riding high on hormones, and whatever, it may not end well for you tonight. So I might, I might spend the next one to two months and gather my information and journal and think through what it is that I want to say and kind of

you do some self-preparation, give her some time to kind of adjust to life, then have the conversation

easy into it. Postpartum is real. It's a real thing. You're talking to somebody who was crazy. So was she working before? She was, but she's been off leave ever since. So about a month with no work. I went back to work two weeks after she was born. So I thought she could kind of write her bills in the baby right now. Through her savings that she has, she did tell me she has a little bit safe, and she also has family leave. So I don't think she's lost too much of her income.

“Okay. What's the expectation of you chipping in and helping pay for things?”

Well, I mean, if she was with me, I'd be covering the rent from all for both of us together and my daughter, you know, just eating the household and a sense for your food on the table. How long can I just ask and no judgment? How long did you guys know each other before the baby before the pregnancy? A few years. Okay. So you, you know her? Okay. Yeah, definitely. We've been she knows my family and her family. Okay. Good, good, good. Yeah. And you, do you live near

where you work? You're working in Austin? Yes. I, I got promoted recently as well as started a new position in two weeks. So I'm glad that's not making closer to my 90. Awesome. And what was she doing and what is she making? The same thing, but she's making 70. Okay. And she does plan on going back to work at this point? Yeah. Okay. Well, I mean, it's a discussion for you two to have as far as who's going to go wear and what the commutes are like. There's some logistical pieces

of this that I would factor into the equation. And you know, what is she paying for rent? What are you paying for rent? How much can we afford together as a family? Yeah. As we do a budget together. And again, I would not combine income until you're married and I would get married very soon, so that we can combine our lives fully. Because until then, this is just going to be messy and awkward if then mowing each other. The things I'd be thinking about as priorities and deciding

I'd be thinking about if we need family around for childcare, then whoever's closest to the family who has been said that they would help. I'm thinking about that. I'm thinking about the place with the lower rent because if something happens and she becomes more attached, then she thought she was going to be indecisive. You know what? I kind of do want to be home more. Having a lower cost of living is going to be who view. So those are the two things that stick out to me right

away as being like possible drivers on this. I don't think the size of the apartment would be as big of a driver because, you know, if you decide to have more children down the line, you can

always move that that's fine. But I think those top two tend to be the ones that it's like,

okay, daycare is always a big ticket thing. So having family is so important and then of course, yeah, the police agreements as well. Like who signed up for what? How much time is left on the lease? Can we get out early? Which one has the least amount of damage if we exit early? And so I would be looking into all those factors. And those are things you can do now. Kind of on your own, you know, you can ask her for some details without getting into the weeds. But yeah, there's going

to be a lot of logistics here to figure out. And again, it's just going to simplify everything if we can combine our life, be married. It's just one team wondering. One team, one band, one sound.

“Remember, drum line? I miss that one. You've ever seen drum line? Have we had this discussion?”

I think we did, and I think you judged me last time. I had this discussion. Probably did Lisa, the movie's not all that good. Do I look like a guy who would enjoy drum line? Yeah, it's HBCU centered. I guess. Well, it's more the, I don't do band stuff. You do punk rock. Yeah, punk rock. All right. Bonna there. There we go. Are you happy that I set it the right thing? Thank you for not saying Bonn, either. You're offensive to all people groups. Oh, well, let it be known that I

have set it that way as well. And I believe you were the one who corrected me. So, oh, that's correct. It will be a living you learn. All right. Do we want to take Jessica, or can we, can we get to it?

tomorrow. I promise we'll get to you. But if people, let me just say this, people don't know this.

“The Ramsay shows on the radio, as much as it is on YouTube. And so we have a clock”

guys that we have to hit. We have to go to break out a certain time. We have to do all that.

So don't be mad at it. The assignments are like exactly eight minutes and 34 seconds. And it's

“our job to police that and try to get in and out. And that's why sometimes it's like, we feel like we”

don't take as much time. Don't be mad at us. It's just the clock. We have to make the radio folks happy

too. Well, we got less than a minute. What do you got from me? All right. Should we include our

child's 529 accounts as part of our, as part of our net worth? Or not, since they're going to be spent eventually. Oh, that's a fun one. I like that question. I mean, you can include it for now. But I wouldn't include it as far as your nest egg and retirement projections. But yes, it is an asset. Yeah. Who knows if they'll actually use all of it. Yeah. And it's growing. And if counting terms, it all counts. But I would not count it as far as my future financial plans. Do you think

about yours when you, when you sit at night and you ponder you? I do. You know, well, I check it to see where it's at because every month I contribute. Yeah. I like to see the number go up into the right. That does make me feel good about my kid's futures. I agree.

“Fute. I see what you did there. Part in the pun. Well, guys, remember, there's ultimately”

only one way to financial peace. And that's to walk daily with the Prince of Peace, Christ Jesus.