A Fresh Start With Money Is Possible

Brought to you by the EveryDollar app, start budgeting for free today. Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Campbell, my co-host, Jade Worshaw, taking your call at AAA825225. Kayla kicks us off in San Diego. What's going on, Kayla? >> Hi, how are you guys? How are you doing well? >> We're doing great. >> So my husband and I have a bit of a conundrum for you guys, I'm hoping you can help us out. It's kind of more of a moral issue, I guess, so every year being military, we move a lot. Every year, we just make sure we have the will, we have it updated, everything's going well. Right now, the beneficiaries stand as my niece and nephew on my side of the family. My husband's side of the family has just had an addition to their family, which was great. We were excited for them, but apparently not enough for the mom and dad, and that caused some tension. So we're wondering that we have not spoken to them now for a year. We are wondering if we need to include that nephew as well, or because of the tension, if we're just going to create a monster, like a mountain out of a mole hill for this little baby, to deal with if and when something were to happen. >> Well, hold on a second, I just want to make sure I have this straight. You were planning on including, you were planning on including your new nephew in the will, but whatever kind of beef that you had with the mom and dad, that would cause you to take the nephew out of the will at one year's old. >> I think the nephew was fine. I don't want it to be an issue for him. Obviously, I'm assuming we're not going to pass away for some time. >> Right. >> However, I'm more worried about what the parent will do with the money itself. Honestly, it's things have gotten so spiteful. >> But it would go to the nephew. >> Yeah, it would, I don't know. I feel like there might be some issues. Again, it was something very simple that caused the break of relief. >> Well, was it, have you had things before that's caused strained? Or it was like one incident that caused you. >> They were very, yeah, we've had problems before. My husband has a marry for 10 years. There's been little things. It's almost like they can't handle someone's a different opinion. So, when they announced their pregnancy was great. My husband and I have had multiple miscarriages when they announced it was on the anniversary. And so, we were under the anniversary of one of our miscarriages. We were extremely excited for them. >> Okay. >> But obviously, we're still grieving. I mean, that miscarriage was only two years prior. So, I still feel it, sorry, I'm getting worked up. And we had a text after they had announced that, well, that was just rude of you. >> And we have video tape of everything, am I right? >> Did they know that it was on your anniversary? >> Yes. >> Okay. >> Yes. >> And did you tell? >> Then there was no contact. >> But you told them that we reminded them of that. Like, hey, I'm excited, but this is just a hard day for me. In general, has nothing to do with you guys? >> Yes. >> Okay. >> Exactly. And then we didn't talk to us at all the rest of the pregnancy. We tried to reach out, hey, how are you doing? You're like two months alone. You trying to, I mean, she's my first sister, I'm on that side of the family to have a baby. I am very excited for you. There's just some things that I told her when she announced. I just need baby showers, like that, I don't know what it is that kills me. But when they announced the baby's name, it was one of our deceased babies name. And now I don't own that name, but a conversation would have been nice. >> And they knew that. >> They knew that. >> So you've got beef, you've got beef with the parents understandable. I just wonder, is your thought, hey, this nephew is growing up in their household, whatever they think he's probably going to think. And as much as we don't like them, we're probably not going to like him either. So let's put it here. >> I know, but I also, I also, the difference in size of the family, they see money very differently. My side of the family, it's a wealth building tool. It's there. >> Listen, it's your money. You don't have to put anybody in the will that you don't want to put in the will. I will say this in Georgia. I would love to hear what you have to say about this, because you are even Steven. I feel like I'm getting worked up. >> James Fiernan. >> I would hate for, I'm just putting myself in the nephew's shoes. Let's pretend my grandparents, if my grandparents had a bunch of money, I would hate for them to leave me out of their will because of any beef that they had with. I don't know, say my mom, right? >> Right. >> Her mom made us mad so we're going to keep Jada the will. I would feel like I got the short end of the stick, because I'm like, I wasn't even here when all the beef popped off. I'm an innocent party, so that's something to consider. >> I totally agree. I totally agree with that. My concern would be, I mean, he's a year old. We've not even seen a picture. We just know his name. I mean, the grief, the beef between them and us, and we've tried to have multiple conversations. It's just not happening. So then I'm like, well, if I leave it with the executive of the will, they have to deal back and forth sides, and I don't know. I don't know. I just don't want there to be beef when we're dead, but I guess I'm not here. >> Someone else is probably. >> I don't know. >> Yeah, I think I would get to the bottom of the actual facts of if something were to happen while that child is a minor, here's what would actually happen. And likely what happened is there's going to be a trustee or someone that's handling the money that is not the parents, because if it's in the will, they legally have to abide by it. They just go blow that money. >> Here's my thing. So we sent him on his birthday for every year for nephew. We send them craft supplies and $20. That got returned to us. >> Ouch. >> This is pretty, it costs more to return it to you. >> Okay. >> They returned it to me. I'm like, it looks like donated. I don't even care. >> So they don't want me to have, they don't like you meddling in their family at all. It's what it is. >> No. >> So when he was born and the name came and my husband said that was very hurtful, I'm so excited for you, but that's my son's name and that really hurt. That's going to take a minute. And they set us an expectation for an uncle and one military family. There is stuff on that list. There is no way on God's green earth we can fulfill that. So my husband took it as you don't want us to be an uncle and I'll take it and my heart is like, that's my nephew. >> So. >> We're back in force on this will saying it's like they didn't even want the birth they get. The will. >> Why don't you just play, if I were in your shoes, I play it by ear. Today is probably, like how old are you guys? >> 30s. >> You're in your 30s. God forbid, you live long, full lives. If I were in your shoes, today it doesn't feel right, right? You're estranged from the family in general. So it doesn't, clearly it doesn't feel right for you. You've tried to give gifts. They've been revoked. There's a long laundry list of water under the bridge and on the bridge and above the bridge with you guys. So I would just say for now, the will is as it stands and maybe you look out, you know, I don't know how often you review your will but maybe in the next two years when you review it, something's changed or in five years, something's changed. Just because it's set that way doesn't mean it can never change. And I think that that's the beauty of a state planning is that you're living breathing documents. >> Yes. >> So what's your net worth? >> Okay. About 250,000. >> Awesome. Well, as you guys continue to build well, it might be worth looking into a trust with staggered payouts eventually. If you want to have more control over how this money gets disseminated and when, now that's not a today problem. You don't need to go create a trust today but it's something that you can look into for the future as you guys continue to build wealth, work with a good state planning attorney and figure out what are all the laws in your state, what are all the pieces you need to know and try to just take the family drama out of it. I don't want to punish this net change and you don't either. And regardless of how they feel about it, whether they want you meddling, I'm going to take the blessing of generosity. So don't let them block that blessing. >> When they go low, we go high. >> That's right. >> If you've ever thought, I don't even know where to start with life insurance. You're not alone. And that's exactly why I recommend Zander Insurance because the insurance world will throw everything at you, confusing words and add-ons like writers, whole life crap called an investment, return of premium, and it's all total junk. And most of that confusion you feel is by design. 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But I did go to school out of state and I was kind of young and chose to go to an out of state public university and it left me with a lot of debt and architectures a five year program. So I have accumulated about $340,000 with a debt. They're in five different loans for each kind of year. And an architecture you don't really make a lot starting out but the ceiling is pretty high. So I'm wondering, I make 60K, which is kind of on the upper kind of right out of college for an architect actually. What's your top end, do you think? And what do you think is a fair timeline to kind of start hitting that upper end of what you could make? - Yeah, so it takes about probably seven years to get your architecture license and once you get your architecture license that you're kind of pay, you become more valuable to your company. - There's no way to expedite that seven year process. - I mean, yes, you can. A lot of people can get it done in three years, four years. - Let's do that. - So here's my fear, that $330K, if you don't start attacking this thing, it's gonna become $350, $375, 400. By the time you have your license seven years from now. 'Cause that interest is going to crush you if you're just making minimum payments. And making 60K, how much margin do you have currently to attack the debt? - I have a decent amount of margin. I pay, I don't pay a lot for rent raise a bet, rent is about $600, and I don't have a car payment. - Good, no other debt. - I don't have any credit card debt. I have a credit card that I kind of use for the perks, but no debt is paid. - What kind of perks are we talking? - Like flights and other things like that. - Where are you going? - No where, not with this debt. - Yeah, work to do, man. We're not going on vacation. - How much margin do you actually have, John, at the end of the month, once everything is paid? John? - We lost him. He didn't like my take. - Maybe he didn't like your comment. - John, well hey, if we get you back, John, let's keep talking and get you a plan. - We're on your side. - Generalities right now, Jade, you have a very similar story. Will you and Sam pay it off $460,000? - Yeah, that's right, that's right. And 280 of it was student loans. So the short answer is going to sound very simple, which is there's two things you can do here. You can cut back from your budget, which there's only going to be so much he can. Oh, John is back. - Great. - John, we lost you, bud. - Sorry, I don't know what happened. - You got mad and hung up on it. - I thought I offended you, so I apologize if I just joking. But, we're glad you're back. - You didn't have to think of me at all. - Okay, so yeah, I was just sharing that Jade has a very similar story to paying off a massive amount of debt. So you're on with the perfect person today. And we want to walk you through a plan, but Jade was getting at this idea. You can only spend less and make more. - Yeah, there's two things you can do here. And so right now you're at $60,000. My question to you is, there's only going to be so much that you can cut from a $60,000 budget, right? And by all means, do that because that margin does matter. But there is going to be part of this where we've got to bring in extra money in order to make this something that you can sink your teeth into and feel motivated to go on that journey. Fair enough? - Yeah, fair enough. - Okay, so what do we think we can do? Just brainstorm some ideas. How can you make some money fast? If I said, hey, somebody's life is on the line. You got to bring in $1,000 a month to make it go away. What would you do? - My first thought is maybe trying, I find like a drafting. Like you can make some money doing draft work. - Yes, love that. Okay, so drafting, let's add that to our homework list of things that we're going to figure out this weekend. Not just an idea, but kind of bring it into fruition. So drafting is going to be number one on that list. What else? - I'm not sure, I'm not too like familiar. I mean, I had a job in high school that I worked at Publix, but. - Okay, so that'd be number two on my list. So this weekend, when you get a little bit of time, I want you to sit down and do the research and figure out what must be true for me to get into the drafting game in the next 30 days. So that's thing one, thing two is, I'm also going to brainstorm a couple of other ideas this weekend that I can start to track down. Make yourself come up with five ideas, okay? Of how you can make some money. And then what did you tell me your margin is now after everything's paid, how much do you have? - I'm sorry, could you like further explain that? - Sure, so after you've paid for all your expenses, right? Oh, you've paid all your minimums. How much money is left for you to kind of say I can throw this at debt? - I say after rent and groceries, I don't pay anything on health insurance, like my company provides health, dental, and all that. So I would say I could probably throw 2000 of my paycheck. - Extra on top, what are your minimum debt payments on 330K or 340? - From what it is, from what the company is telling me, it's 3000, which is so much more than what I can do right now. - Well, you just told us you had a 2000 left over, that's why I'm confused. 'Cause if you're gonna bring in home, what, 4K a month or so? - About, yeah, a little under that because of tax, yeah. - So under 4K a month and your student loan minimums are 3000, you're rent is 600, you're barely gonna be able to eat, let alone throw extra at the debt. - Yeah, are you able to get with the student loan companies and negotiate a lower minimum? And that way we can take all the margin and throw it at the smallest of those five student loans. - I have been looking into ideas. I called them earlier kind of in October and they told me to wait until mid-November to like for my Grace Period 10 to talk about it. But the company doesn't do, like I was looking for a 20 year loan just so like in the beginning, I can kind of be relieved of like an intense payment. So you're gonna refinance it? - Yes, I'm thinking of like refinancing to another company to like consolidate three of the loans 'cause three of my loans are at 12%. - Are they private? - That's great. - Yes. - Okay, you could try contacting YRIFI and see if there's a consolidation that would work for you. But I caution you this, there is pluses to that. Obviously you can lower the interest rate and have a affordable payment for you. And when you do that, the point is to use all that extra margin and throw it at the smallest debt. But the one negative of that is you've taken something that's kind of conveniently broken into payment, like broken into five different loans, which is helpful for doing a debt snowball and you then slice it into one big lump sum. Psychologically that's tough, okay? So I do wanna warn you against that. If you sit down with the folks at YRIFI and it makes sense for you, I would not be mad at that. I think that that could be a great idea but just be aware of how that can feel psychologically to just have this one big snowball of $340,000. - Yeah. - Okay, so you weigh that and decide what's right for you. But I do agree if you can find a way and if you could find a way without refinancing to get that payment lower, I would again put that margin on the smallest debt. So here's some practical tips to take away for you. This is gonna take some time. All right, this is a long-term play and you have to treat it as such. Most of the folks that call into the Ramsey so George, they're paying off their debt within 18 to 24 months. That's kind of the normal range. Every once in a while we get a caller and like John, like myself, who you're just in this for a longer haul and it's no reason not to start. But the rules change a little bit for you, which is you're gonna go gazelle intense and you're gonna do that for as long as you can. But then there's gonna be moments where you take your foot off the gas and you go, woo, that was tough. I hate this side hustle. I'm gonna get rid of that one. I'm gonna take a couple of month breather and then I'm gonna pick up another side hustle and get back to it, right? So you need to build, you just need to know that that's gonna kind of be the rhythm and you need to build in some milestones for you to celebrate this journey because until you hit that period in your career where you can really amp up your income doing the thing that you set out to do, I'm not gonna lie to you. It's a tough journey but it's definitely worth it if you commit to it. The time's gonna pass anyway, right? You wanna build a sustainable way to do this because of how long the journey's gonna be and who knows what's gonna happen the meantime. Your income could go dramatically up but you could meet someone and double your income. All of these are factors. So have hope first. You're just looking at the math on paper going, well, whoa is me. But this is a good lesson learned for anyone out there. If you're 17 or 18, you wanna go to the out of state school for fun, rethink that plan. If it's gonna cost you, student loan debt, especially six figures worth. 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Go to joindeleteme.com/ramsees to get 20% off all plans or click the link in the description. (upbeat music) (upbeat music) Our Christmas deals are already here. If you get life changing gifts for every age at prices that make holiday shopping easier, that includes $13 best selling hard covers, including Rachel Cruz's kids books, $22 career assessments, $12 questions for humans decks, eight bucks for audiobooks and ebooks, and more, go to ramseesolutions.com/store. If you're watching on YouTuber podcasts, click the link in the description. All right, Eric is in Jacksonville, up next. What's going on, Eric? - Oh, you know, just did the smart thing that most people do nowadays went home broke pretty much. - Oh, no. - Tell us about it. - So meet my wife. We bought our house last year, almost exactly last year. The 21st of November will be one year we've been in it. And I assume from everybody that tells me, gotten a little bit of debt, you know. Need this, this, and this. And now I want to buy a similar truck because I can essentially double my income in like two years. The first year will be strictly paying off debt. I'm currently paying off all the debt that we have right now. - How much? - I think when we did the math, what did it, a little bit of retail debt we have is like maybe $6,000. We might have about $12,000 in total. Thankfully, maybe $1,000 of it is credit card debt. So we're actually decent on that. - Okay, keep going. - $3,000 left on a personal loan. And I think $2,500 left on my dental care debt. And that's it for, and then obviously the house, which we probably, we actually, I think we got a good deal. We got two and a half acres in Florida for 250,000, so. - What's the payment? - $2,100, but that's mortgage with escrow and everything. - What do you guys bring in every month? - I'm bringing in about $6,000, single-wing income family, six to seven somewhere in between that range. I deliver fuel for a living, gas, all gas stations and everything. - And how are you doing that now? Do you have a semi now? - I'm a company driver now. So the company I work for actually offers contractors. You go out, you go get your own truck and they contract you and essentially, you almost quadruple your money. So right now, I gross about, if I work six days a week, which I do most weeks, I make anywhere between 18 and $2,800 and $2,000 a week. And if I do, yeah, that's my gross. - What's your net? - My net, I average, probably after tax and insurance is and everything between 15 and 17. - Okay, and that's a six to seven K take home you mentioned. - Yes. - Okay, what's the semi going to cost you? - I've been looking around and I've found some for about 35,000. So I currently ties, and that was my main question when I got on this, should I stop chiving temporarily? Keep track of what I owe in my ties. But wait to pay that essentially in a lump sum. - This is kind of like a loan on God. Oh my God. - Yeah, that's pretty rough. - Let me get you on that. - I never heard that. Trust me, God, I got you back, bro. - It's such a conflicting thing for me because. - Don't you think that's a good indicator though, the fact that you're feeling conflicted about it? And that's why I'm like, I don't, I feel conflicted because it's something that I always do it's something that's very important to me. - Yeah. - But I know. - Yeah, if you couldn't like pay your mortgage or your light bill, I'd be like, all right, let's pause the tie. But you're talking about, you know, I want to afford a vehicle and so I'm going to stop it. So that's a value for you. Then I'm going to tell you you got to stick to your values. - Yeah. - It's going to eat you alive. - But there's something about this situation. I'll be honest with you, that's still not quite adding up for me, Eric. You're making the six to $7,000 a month. Sure, your mortgage is a little high. It's about a third of your take-home pay. But honestly, it's not, I thought you were going to tell me, it was like 40 or 50%. So when you told me that I thought, okay, like we can work with that. That happens actually a lot around here. And then when you told me your debt, your debt's not very high. So part of me is wondering if you guys just need to tighten up your budget in order to find margin. Don't get me wrong. I'm all about trying to increase your income if you have a pathway to do that. But what you're talking about doing, which is kind of violating a moral standard or not like about you, I'll say that for yourself, doesn't feel like it warrants that type of urgency if that makes sense. - Yeah. So are you guys following the baby steps otherwise? Are you doing the debt snowball? Do you have 1,000 bucks saved? - Yeah, we actually had 1,000 bucks before we even heard of the baby steps thankfully, just because we got into the situation once we were like, well, at least we have 1,000 bucks. - Okay. - We get tires once. - How much is the savings now? - Maybe 1,200 bucks, you know, just a little bit over that. Just kind of, we had a little bit extra money, you know, because our savings account is where we, oh, our car, sorry, I forgot about that one. - Tell us. - That one is the expensive one, sorry. That's about a 20, we have 23,000 left on that. And that's about 465 a month, sorry. - Okay, 465. - That's almost a semi right there. What's the car worth? - I don't know, I don't know how reliable it is. When we get stuff in car facts on our emails, it's like, oh, it's $7,000 and I'm like, I don't know how reliable that is. It's a 2020 Nissan Pathfinder. It's got like 110,000 miles on it. I think, no, I don't think it's got that, but. - That's seen some things, okay. Well, I would check Kelly Bluebook and get the private party value and see what that is. It might be worth selling if you're really aggressive about this. If you're like, hey, I want to get out of debt fast. I want to save up for this semi fast. I mean, you told us you had 12K in debt and now we got an extra 23 on top of that. - Yeah. - So this debt for a journey just has been. - Well, to me, it's one of those things that I don't think of it as debt just because I go, it's, you know, I make the payment every month. It's just it rolls into, you know. - Let's reset the definition real quick. Debt is knowing anything to anyone for any reason. - Yes. - That's simple. How about this? Here's a good way. There's a great old quote. It's like, if you don't think it's debt, stop paying and see what happens. If the repo man shows up, it's debt. You don't own that car. It owns the word. So that's where I would reset your definition and you're a man of faith clearly. I'd go check out some proverbs. I'd start with 22/7. The borrower is slaved to the lender. And right now, you can't do the things you want to do for your family and for your business because of the debt. Can we agree on that? - Definitely. - Can we agree that that should piss you off? - Oh, trust me, it does, I've opened my LLC back in July because, you know, I don't know how old familiar as our trucking company is. My dad says they're a step below politician on honesty. And one of it was, oh, zero down. And then you go and look into the policy. It's like, oh yeah, no, cheers of business experience. - Are you promising to us, though, that since you've been burned and you know too much, that you're never going to touch debt again? - Oh yeah, no, trust me. After this, me and my wife were, we, she needs some dental work and we were like, yeah, we're not doing any more of this payment plan stuff as long. - Okay, we looked at medical debt, we were like, as long as it's not a detriment to our health. - Well, everything so far has been well, as long as we can afford the payment, as long as, and so I want you to just reset your definition of saying, We just don't borrow money. Take that off the table. You got 35K in debt. You want to buy $35,000 semi. So you have $70,000 of cash flow ahead of you. So now it's how much margin do I have in my six to seven grand? And then how fast can I do it? And so if that's $1,000 a month, it's gonna take you 70 months to get this whole thing done. - Now what does your wife do, Eric? - She just stay at home, mom. - How old are your kids? We have a 10 year old girl, a four year old boy, and a one year old. - Okay, so she's got her hands full. I'm gonna give you a couple of homework things because I think that this'll help you take the next steps that George was talking about. First things first, you gotta get on Kelly Blue Book this weekend and figure out what the value of that vehicle is. And then you and your wife can make a decision of, if we can sell it and if we're upside down, can we come up with the cash to get right side up and get into a cash car? That's the one thing too, is you need to do a clean sweep of your budget and you need to cut out anything that's not completely necessary because you need that margin to go towards debt. And then finally, you and your wife sit down together in each of you brainstorm five things, five apiece, 10 total, things you can do to bring in extra money. (upbeat music) If you're waiting for rates to drop before you buy a home, here's what nobody tells you. When rates fall, every buyer who's been sitting on the sidelines makes their move at the same time you do. 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Danny, welcome to the show. - Hi guys, thanks for taking the call. - Absolutely. - How can Jayden and I help? - Well, due to some of my own behaviors, I've gotten a pretty late start in life, getting on the right track. I'm 28 now. And well, sort of short, I've only been doing the right thing for the last couple of years. I struggled with being sober. I'm sober three years in March. - Congratulations. - Two years, eight months today. - That's awesome. - That means a lot. - Wow. - I thought you were gonna say you're like 58. 28 and that's a late start. - Yeah, man. I feel like it. It shouldn't feel like it, right? - Let me free you, Danny. You're right on time, bud. - Well, so I'm from New York. I moved to South Carolina about a year ago, left December. Tried to do a couple things, tried to join the military. I thought that would be a good path to get my finances on track. That didn't work out. I did find a good warehouse job at $20 an hour. I bring home about 3,000, give or take, a couple over time hours. So I am struggling to figure out how to get ahead. My budgeting is good. I'm a frugal person. I just don't know how to do any better. - So what's ahead? - Yeah, what's that mean for you? - Well, I have debt. It's just personal credit card debt. I do ODIRS the money. I'm not exactly sure how much, 'cause I'm kind of scared to go talk to a tax representative and get that straightened out. - If you had to guess how much do you think it is? - IRS, left notice I got was about 2000. I'm sure I increased by now. - Well, don't keep putting it off because the more you put it off, like late fees we'll start to add to that. And 2000 sounds like a scary number, but with your income, you can knock that out quickly, I think. So don't keep putting it off. Let's add that to your list of things to do this week and find out the actual amount. How about the credit cards? - Credit cards, so at the beginning, it totaled about 18,000. I did a debt relief program that I did in since April. - Okay. - I paid 300 months towards that. They negotiated one of the four credit cards, which will be paid off by December, which is really great. So that leaves me with about 12,000 for them to negotiate and bring down. - And when should that be done in total? - It was projected about three and a half years. - Oh, okay. - So I had three more years to go, and I need-- - No, no, no, because that's unbelievably ridiculous for them to say it's gonna take you three years to pay off 12,000, it's a thousand bucks a month. You could drive Amazon. - 300 bucks, all while they've just destroyed your credit. So it's gonna be hard to live your life financially now, right? They told you to stop making payments, pay us that payment, and then we'll settle. - Yes, sir. - So I would get out of this program. - So I can't take my money out at any time. - Yeah, cancel it this weekend. Cancel it this weekend. - Credit card directly seems like it would be a lot more. They've negotiated one card-- - Right, but how they did it-- - We could be 500 to half. - Let's explain how they did it, because if you choose to do this, you could do the same thing. All they did was they stopped you from paying the payment. They said, don't you pay the payment, pay us instead. We'll pull the money, so nobody's making a payment, which means the credit card company's going, they're not gonna pay, this is going into collections, they're gonna sell that debt off, and once that debt's sold off, then they can say, all right, now we settle it, and now the credit card, your debt consolidation company comes in and says, we'll settle it, we'll settle it for 25 cents on the dollar. You can do that if you want to do that. You don't need to do that, because you actually do have some income here, and like I said, $12,000, that's a thousand bucks a month if you wanna be done with this in a year. You could go out and do Amazon, you could do anything and make a thousand bucks a month, fair enough? - It's true, so my monthly expenses come just short of 1900, and my monthly income is a cat above 3000, so I only have about a thousand to play with. - I understand. - Not understanding any emergencies happen, you know? - I understand, so if you have a thousand in margin now, plus you got a second job, because it's just you, right? - I'm in a relationship, but I do have a lease with my girlfriend. - Okay, but I'm saying you're not, you don't have a wife to take care of, you don't have kids to take care of. - I do not, and that's part of why I watch your guys' show, and I wanted to call in, because I want so badly to be able to propose, and I want so badly to be a dad, and I'm very scared that that can't happen. - It will happen, and I'm gonna show you how. So it sounds like in your mind, I wanna clean up this money first, that's gonna give me some confidence that I can handle this responsibility. If you have a thousand dollars of margin now, Danny, and then you say, I'm gonna pick up a second job, because I owe that to myself to clean up this debt fast, and you make another thousand dollars. Do you know, first thing that's gonna happen is that IRS debt is gone in one month, it's gone in December. And then the next thing that's gonna happen is the $12,000 of credit cards is gone in six months. Just with two thousand bucks a month. - Maybe I picked the wrong second job, so I worked this warehouse job from six a.m. to four p.m. I did work at Amazon overnight, only a few hours, so I went home at four p.m. We'll back up to work 11.30 p.m. to 3.30 a.m. And I was also donating plasma twice a week. - And what was that getting you? - Amazon was an additional about 300 bucks a week, and the plasma was about 125 extra a week. - Listen, there you have it. - That's 500 a month right there. - You're killing me. Yeah, doing all of it was killing me, but it did give me so much of a turn. - We're talking six months. If it was six years, I'd say, yeah, that's unsustainable. - Or even if you said, hey, I'm gonna do that, I'm gonna do that until I pay off the IRS, get that out of my hair, and then I'm gonna go back to the $1,000 margin, and then I'm gonna intermittently do the thing that you just said that kind of kills you for a while, right? You don't have to do that a year straight, but if you picked up a rhythm of it, because either way, it's gone in six months. - Okay, yeah, and the thing about the IRS did is I'd like to go to community college and from the research I've done, I can't apply for FAFSA if I have outstanding IRS. - That's true. - I'm not too educated on it, but. - Well, you'll be able to cash flow community college at that point when you don't have any payments, and you've got an extra $1,000 a month laying around. And so I wanna encourage you that you'll be able to cash flow this. I think you're a guy who has overcome a lot at the young age of 28, and if you can get sober for three years, you can get out of debt. - You can do anything. - I believe in you, man. You've already done some of the hardest work possible, and so you know the discipline, you know your boundaries, you know the guardrails, so now it's just making a budget and sticking to it, and going, all right, 1,000 bucks a month is gonna go towards those debts, come hell or high water, 'cause I have a lot of life ahead of me. I wanna be a husband, I wanna be a dad, I wanna improve my career, and all those things will be possible. But it's one day at a time. - And I just wanna encourage you, Danny. - I wanna encourage you. - I wanna encourage you, you know, you called us and told us a little bit about your past, and thanks for trusting us with that, but listening to you talk. All I heard was a guy who's really motivated to do hard work and I only heard a guy who's gonna make it happen. I'm not caught up in your past. I only see what you're about to accomplish. And when you said you wanted to have a wife and a family, I just thought to myself, wow, this guy's gonna be a great dad. And you're not scared of work. That's one of the key indicators it tells me. You're gonna become debt-free. You're not making excuses. No, not at all, not at all. I just push myself to your heart sometimes. So give yourself grace. You've been through a lot, you're only 28. I didn't have my first kid till I was 34. Yeah, you got to. And so you are ahead of life already. The fact that you've got this, you've already sort of had your failures and mistakes. Now we can clean it up. By the age of 30, you're gonna be debt-free with an emergency fund. Gosh, think about that. That's so good to say it like that, George. Think of how many people would have loved to be debt-free with an emergency fund by the age of 30. No way. Yeah, I mean, when you say it like that, it's so true. I mean, when I think about, I was 35. I was 36 when I had, 35 when I had my first baby. And I was debt, I didn't get debt-free until age 34. And so in the middle of that, you are getting married, having kids still working the plan. So it is possible. We always tell people, hey, you don't need to wait until you're completely debt-free and have your life together financially to get married or have kids. But you do have to be aligned with that person, that person you're gonna do life with forever. That's right. On here's the game plan, here's what I'm up against. Are you in? Oh, sure. Are you with me? So if you've got a good lady by your side, hang on to our man, that's fantastic. And I would love for you to call back and tell us, I'm debt-free, I proposed. And then there's another call, there's a baby on the way. I'm investing. Man, that's the kind of life change that we exist. Yes, keep us posted. Yeah, keep us posted. I want to see that day because I'll go Hulk Hogan style. That's big. If he ends up on this debt-free stage. And Danny, you inspired a lot of other people out there who probably also felt like it was too late for them. I've made too many mistakes. Everyone's ahead of me. Who's everyone? I don't like that. Everyone's broke. You're different, man. You're gonna be debt-free sooner rather than later. And you're gonna be a great dad and a great husband. And we're praying for that sobriety journey to continue on strong. (upbeat music) If you've listened to this show for five minutes, you have heard us say everybody needs a will. But you keep finding reasons to wait because the decisions can be hard. Like, who gets your stuff? Who takes care of your kids? But here's the problem. Avoiding the questions don't make them go away. It just means the people you love will have to guess at the worst possible time. And that's why Mama Bear Legal Forms is worth the 20 minutes it takes to complete your will online. It's built by real attorneys and tailored to your state. So you know it'll hold up. And the step-by-step process means you don't need a law degree to get this right. In fact, it's the exact process I used with my own family. Mama and Papa Camel recently visited me here at the Ramsey headquarters and I helped them update their will and even arrange for a notary to meet them in the lobby to knock it out and get it done. So if you don't have a will, don't wait. Go to mamabearlegalforms.com and use promo code Ramsey for 20% off. That's mamabearlegalforms.com. Promo code Ramsey for 20% off. (upbeat music) Welcome back to the Ramsey Show and the Fair Winds Credit Union Studio. I'm George Camel here with Jade Warshaw, taking your calls at triple 8-825-225. Chris is in Boston up next. What's going on, Chris? - Hey, how you doing? - Great. I'm just giving a call so this year, my wife and I are gonna pay off our student loans, which we're really excited about. - Awesome. - And we don't have any credit card get, which is great, we're in a good situation. We do have two mortgages. We have one house that we're currently renting out and that's been going great the first year doing that and we are coming up on our first year of our new house. Which we did a 5-1 arm at 5.5%, which was the best rate week. It was the best rate at the time. I think the best rate I can get is six and a half. And I thought, you know, one is the best rate and within this next five years, I think I can start, keep making more money. But obviously right now with the economy, I'm a little nervous. I still form our years. But yeah, I'm not sure if I made the wrong decision. - I think that you may have made the wrong decision with that arm because it can go up and there's an unknown that's always associated with it that I think would keep me up at night if I were you and your shoes. So there's the two properties, I'm just curious. You mentioned, I think I heard you say no student loan debt, is there any debt of any kind that you guys have besides mortgages? - So other than the student loan debt, we do have one car payment. - Okay, and how much is that? - Right now it's 373 a month. - And what's the total amount of the debt of that car? - It is a lease, so that will be done in March. - Okay, good. And then the student loan, how much? - Just about 30. - 30, okay. Okay, and can you just tell me a little about the rental property? So what do you guys hope on it and what's it worth if you were to sell it? - Yeah, so it's the principal balance is 224 on the rental property. I think we could probably get 390 to 400, I believe. We are renting it out right now. The mortgage per month is 1480 a month and we are getting 2800 a month for the rental. So after all expenses, you're clearing a little over a thousand bucks probably? - Yeah. - Okay. And what's your current household income every month? Aside from that. - Every month we're probably around 12,000 collectively a month. - Okay, solid. Okay, so you're gonna get rid of the student loans ASAP and then when the lease is up in March, what's your game plan? - Well, we need a bigger car. So we have twins and they're both under two and we're getting maxed out of the vehicle that we have right now. - So are you gonna buy a cash car? What's the financial game plan? - Yeah. - When you hand in that car, you need a different one. - Yeah, we're gonna need a different one. We're probably gonna have to go up in payment. I'm trying to stay around for fifth year if my 100 a month for that car. You're still invested in making payments every month. I thought at this point you'd be looking for a way to get out of that lifestyle and kind of end that for good and have some peace, especially with twins, no? - No, no, definitely. I think the car is just obviously we just need a bigger car and especially if we wanna keep growing our family too. - So can I challenge that mindset? I mean, I agree with you. You have two kids, you wanna make sure both car seats fit in the back, that's a real logistical thing. So whether it's a van, whether it's something with a nice fourth row where you got one on either side, I get it, but to George's point, he said, what's the financial game plan? And you keep saying, well, we need a car, we need a car. What we're looking at is, what's the plan that we can make to get you the car and not go up in payments and not have the payment at all? So let's open up our minds to that idea because I mean, it means nothing to me whether or not you have payments. But for you, you're feeling this otherwise, you wouldn't have called into the show. So with this $12,000 income and you mentioned you have $175,000 equity in this house and you've got to arm and all these things, what are some things that are standing out to you 'cause I want you to have some skin in this game thought wise that you might need to look at in order to create a little bit more stability and peace in your situation. - Definitely. - Well, yeah, so with the car, not a, maybe, I don't obviously I don't want to put more money down. Maybe it's getting, my plan is to get a used car and try to get low mileage and get a good reliable car. I don't care about the flash or anything like that. It's more of just being able to fit my family in. - So my challenge to you is can you do that with cash? - Yeah, what if we said, what if we worked backwards and reverse engineer didn't say, okay, we got $12,000 income and I'm just making this up. We got $12,000 income and after our bills are paid every month we've kind of got $3,000 to play around with. If we were able to save up between now and what did you say, may or March, I can't remember. - On March. - So we got five months to save $3,000. Okay, is there something we could buy for $15,000 and work our way back like that? You see what I'm saying? - Yeah, definitely. - You know that, yeah, definitely that makes sense. Like I said, I just want a reliable car. I'm not really a car person. So like off the Toyota's are expensive, but I know they're going to last that. Like for example, I have a Toyota Corolla right now. I have 150,000 miles on it. It's been paid off for four years. - I love that. I want you focused on the financial side of this. I want you just as focused on the financial as you are on what the car is. How many miles is it? Is it good for my family? Is it all that matters? But just as equal How you buy that car matters because if you go into debt for it, you're going to be calling us back in March going Oh my gosh, I think I made another mistake. I bought another car on payments So let's let's do that plan. How much margin do you have left after you've paid bills and done all the expenses? Yeah, we're usually around probably like we save about 1500 probably a month So you spend over $10,000 just to cover the basic bills and minimum debt payments Uh, yes Why That's a really good question. I mean you can have legitimate expenses. I'm not trying to get on you I'm just wondering is there more margin here because for a guy who makes this much money It's crazy that you have this little to show for it at the end of the month You know what I mean to attack your other goals because that what that means is if we got rid of this rental You'd only have five hundred dollars of margin and an eleven thousand dollar take home Yeah, so I mean we like I said, we're still you know our Sort of owns is about 500 a month at the moment, but the plan is to have that paid off this year What's your mortgage? My mortgage is 2951 a month, but that's not including Taxes and insurance. Oh, so it's probably closer to four grand a month Yeah, probably it's on the high side. I have a crazy thought Chris we got 30 seconds, so let me just lay it out for you if I was trillion your shoes I would sell this rental. Yeah, you'll walk away with a hundred fifty K You'll knock out the student loans instantly leaving with a hundred twenty K You can set aside an emergency fund by yourself a nice use van Apply the extra toward the principal and refinance into a fifteen year mortgage Boom you just solved all of your life's problems now you lost your thousand bucks What you gained is a whole bunch more margin back and so I would highly consider getting rid of that rental It's not that it's not cash flowing. It's just that you got to mess over here and you can clean it up in one fell swoop So I would highly consider that unless you're willing to do some deep sacrifices for the next couple of years If your business is making seven figures or more you should be proud of that But that growth probably brought a mess with it systems that don't talk to each other It's impossible to track down your numbers because they're scattered everywhere That's a visibility problem and net suite has solved that problem for more than 44,000 businesses like yours Net suite brings financials inventory CRM and more into one place and their AI tool net suite next Builds AI into everything automating busy work like forecasting demand and chasing down over to accounts It's not complicated to use you just ask it questions like you're talking to a person and you're not starting from scratch Because net suite is built on leading practices from thousands of businesses preloaded and ready to go Ramsey solution switched to net suite years ago It helped us know our numbers and we've never looked back if your revenue is at least seven figures Try net suite next for free at net suite dot com slash Ramsey that's net suite dot com Slash Ramsey or click the link in the description Ham is in West Palm Beach up next and what's going on? Well, thanks for taking my call calling regarding taking social security my husband retired Three years ago, and we'll be 62 in February Should he take social security at 62 or wait until he's 67? Ooh the age-old question. How old are you? 67 okay, you're 67 I took mine at 62 yes, so you took yours early. Who is the higher income earner out of the two of you? He is hate he was Okay, this helps me and how is your fell your health and family longevity for both of you? Pretty good. I have had open heart surgery, but I think I'm pretty good now. Okay, and do you guys need the money? No, we don't we have a Our here's a pension and then my social security total is a hundred thousand for his pension and my social security And so you guys are living comfortably as is yeah, we have 1.9 million in investments a paid four house So let's go Damn, that's great 2.4 and I want to tell you I have never paid interest on a credit card in my life I've followed the baby I'm proud of it. I didn't know about baby steps. I was baby steps before baby steps with something Let's call grandma call the common sense Yeah, there you go way to go way to go miss Pam so based on the factors you told me and this again This is like napkin math from a random guy. I would you may want to double check all this, but I would consider Waiting for him to be 67 or even 70 if you think he's gonna live a good long life and here's why if he were to pass You could then take his bigger check Right, and so it's basically you're guaranteeing your income for the foreseeable future and I like that plan if you don't need the money Right, so if he passes before me, I do get 66% of his pension. Oh nice So that's another bonus on top of that. I hope he doesn't but I mean that's that's at least gives you some right some piece about the whole situation So how much would he get He's 31,000 and I was just thinking well five years. He's missing out on a hundred fifty thousand dollars Sure, I know you've done the math on the break even on that. Yeah. Yeah. Yeah, so it's 67 How long would it then take for him to break even on this deal into his 70s? It's like I did I did for 80 It will take him till 80 years old Yeah, I did it for no the break even is at 80 years old. Yes So if he lives beyond 80 it would be a better deal to wait. That's what we're saying yes Yes, so if that's that's the game you're sort of playing here is do we think With his health and current health care and technology and all that that he could live into his 80s I think if you guys made it into your 60s there's a good chance you could make it into your 70s and 80s Yes, I think easily and because you don't need the money it I would for that I would pause and also wait Now the good news is there's no rush, but I would I would consider all those factors to go okay I don't need the money now if I did take it what would we even do with it? That's another question and then if we do wait here's the upside on the other side of I can guarantee this income for the rest of my life If something were to happen So if we wanted extra money to take vacations because we do vacation a lot Would I take it out of my I have I have 250 in a Roth Okay, what are your other retirement vehicles Well, he's got a 457 okay with set with 700,000 and he's got a 401k with 700,000 and my total is 500,000 making it at 1.9 So I do have 250 in the Roth So if we wanted extra money to do something just take it out of the Roth I would not start there I like saving the Roth for last. I would rather you use so that the sort of buckets that I look at personally And again, I would you can talk to a financial planner if you haven't already It's a good thing to sit down lay out all the numbers They can look at your social security statements for both of you and lay out a great game plan But based on what you told me I would be looking at cash savings first Then any taxable accounts then any you know traditional accounts where you're gonna pay taxes on taking the money out Then I would save the Roth for last because that is sweet sweet tax-free money. That's just compounding right now And so that's why I would save it for last if you need it Okay, but the truth is a lot of people Pam end up not taking enough out of retirement people who are in good shape I'm talking about people like you have two million bucks not going. I don't know if we're gonna actually use all of this And so I would be looking at what it's actually invested in And making sure that it's still invested pretty aggressively because you guys could live another 30 years Is he want to make sure that it's not just barely beating inflation sitting in a bunch of bonds So do you guys currently work with a financial advisor? Well, I do with mine and she does she'd have me in bonds for forever And so I finally got her to switch to half in bonds and half in the and mutual funds. Do you guys have cash savings? Um, yeah like 35 Okay, and you have some traditional accounts as well traditional What is your is the 401k traditional Yeah, it's yes into an IRA now. Yes. Okay. So I have 250 in a traditional and I guess his 401k is probably really a IRA now too Well, I just don't want to see you guys getting you know, just super poor returns because half your money's in bonds for the next 20 years Let's say because the market you know, it's up 12 13 percent year to date and if half of your money sitting in bonds You're not going to see those returns right his isn't his 1.4 is not he he manages that himself and it's he's pretty aggressive Okay Well in that case you that's where I would sit with the planner and go how much can we realistically spend without depleting our nest egg too early Based on all of these factors and that's why I was kind of laying out things like health care longevity family history Other sources of income those are all the factors you want to plan out before deciding to take social security or Withdrawing more from retirement, but you guys have done a great job. This is a good place to be get free paid for home, you're flexible on your spending, I would go take that vacation and I would definitely take it out of an account that is not growing tax-free like that wroth one first so that you might cash out some of the traditional for one K, for example, to make that happen. But great question, it's nice when it's, you know, not a situation where you're going to die or you can't take vacation. You need the social security, which is kind of the mood point on social security is if you need it, you need to take it. Yeah. If you don't need it, you likely will never need it. That's what you want. You want to be in the position where you've saved up a nest egg. You don't need to take it. And gosh, at 62, what a wonderful thing to say, I don't need that money. I can take it and invest it and let it grow for me. That'd be exactly. So you've got a lot of options there. All right. Levi's in Huntsville, Alabama. Up next. What's going on, Levi? Hi. Thank you all for taking my call. Sure. What's your question? Oh, so right now, I made him a lot for looking at, I think, so building the house in the next couple of years. And we're just trying to figure out if we're on the right track as far as the pain of that often inside and up for the downpain. Okay. How much debt do you have between we currently have a mobile home. It's about 58,000. And then we have her car and my truck. It's about 24,000. Okay. What do you guys make? A year. Take home each month is roughly $7,800. Oh, wow. Good. Great income. Okay. So what is the mobile home worth? If I tried selling it right now, I might get 45,000 out of it. Ouch. Do you have any money saved anywhere? I have 10,000 in a 401k and then 10,000 in checking account. I love that you have 10,000 in that checking account because if you needed to close the gap and make the sale of that mobile home and you guys rent something in the meantime, you could. Right. My fear is that mobile home keeps going down in value and the gap gets bigger and bigger and you're still going to have to come to closing with that difference. So I'm wondering, that's why I was wondering if you could sell it now and just go rent for a year and then knock out these car loans real fast, making $7,800, then start the emergency fund, three to six months of expenses, then start the down payment. That might be a couple of years out from buying a home. How soon were you wanting to do this? About three to four years. Perfect. It gives you some time. It doesn't feel like you're moving and then you're moving again right back to back. And to George's point, the mobile home won't continue to drop in value because you're going to offload it right away. And then how quickly, with that margin back, well, I guess you may not get much margin back because you're going to turn around and rent, but how quickly with the margin that you have now, could you pay off the car and the truck for $24,000? I know kind of the plan I've been doing at, I had a camper, we just sold it and then I've been putting at my job, I get hurting them, which is untaxable. I mean, if you find $2,000 a month that you can put towards this, I mean, you're for sure going to knock it out in the next year. And if you have more than that, well, then you go even faster. When I hear the words open enrollment, I'm immediately stressed out. And the same goes when I hear deductible and premium. You probably feel this way too. Choosing the best, most affordable healthcare for your family can be overwhelming. Will my premiums go up? Is the doctor I want, even in my network? Can I even afford this? Well, the good news is there's a different option. 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Listen, if you're sick and tired of working super hard and have nothing to show for it, that is normal, unfortunately, and normal is broke. You don't have to live that way. We've got a budgeting app called EveryDollar that helps you find extra money every month and helps you build a personalized plan to beat debt and build wealth. So go check it out, start EveryDollar for free in the App Store or Google Play. Micah is in Kansas City up next. Micah, welcome to the show. Hey, yeah. So, me and my wife, we were trying to figure out, we've paid everything off, but our mortgage. And this past year, we made the decision to have her stay at home. We hit four kids, our youngest one had some health issues, two of them are under the age of five. So, we're down to one income. I'm trying to figure out how though I can still kind of get across the finish line and pay this mortgage off. My goal has always been to pay it off before it turned 40, and 34 right now. I don't think that's quite going to happen, but we're trying to figure out how we can go about without having to give up, having her go back to work to really get this paid off. The job I currently work is pretty demanding, so a second job has been difficult to try to figure out how to make that work. So, just trying to get some advice on how we can get the mortgage paid off and across the finish line. I have a question about the intensity of this and why it feels so urgent to you, because I mean, you know around here, we kind of teach that baby steps one through three. Those are the ones that we're super intense on. And then we can ease off the pedal for a baby step six. And you know, kind of get on a rhythm of saying we're going to put this much, and here's how often we're going to do it. But it doesn't have to feel so balls to the wall, like the other steps feel, right? So what in your life is causing you to want to do this at such an intense pace? I think it's more of it's the way that we are wired. We've wanted to have complete debt free for years, and we have been free of everything else, and this is kind of the one thing staying in our way. So, it's just us wanting to push to get across, across it, so it's not. Could the extent of her not staying home with the kids? Well, you know, part of that came with, it's a one and a half girl who's had a lot of health issues, and then a four year old, and so we made the decision because it was that or paying for daycare and the cost of daycare versus which it was making wasn't a whole lot of the difference. It felt like it was better for at least the time being to have her stay home. No, and I agree with you, but you had mentioned. How can we pay off this mortgage without her going back to work as though that were maybe on the table in order to get this done in the next six years? Right. So, what are the numbers tell us? Let's lay it out for us. What's your current mortgage balance? So, like currently, oh, 172,000 on the house, we've paid off roughly a close to 100,000 on it. Fantastic. What's the principle of interest every month? I don't know the breakdowns, we pay roughly about 15,500 a month on it, it is the monthly mortgage. What's the interest rate? 6.7%. Okay. So, based on your math, how quickly will you pay it off if you are making any extra payments you can? With the extra income and everything you have, based off what we looked at, I'm looking closer to, versus the six years, more like 10 years. Okay. How much extra are we talking for a month that you could dedicate? So, we pull in roughly every month total, about 7,000 extra after groceries and everything else, usually roughly about 3,000 left over every month. Wow. But you're saying you wouldn't put all of that on the mortgage. Are you still doing college funding and living life, saving up for vacation? Yes, a little here and there, but we try to shove as much towards everything that we can, putting some back, continuing to adding into our savings and towards kids and everything else. But that's what's left over. So, if I can, even if I split that in half, 1,500 or 2,000 towards the house, so an additional payment if I could, that's, I don't know, that's feasible every month, because things happen. Yeah. And you want to enjoy a little of life, too, at this phase. Right. So, I'm just saying, I just did the 2,000 extra month, and I'm using our mortgage payoff calculator. You can see here if you're watching on YouTuber Spotify, your payoff date currently would be August of 2031, which is, you'd be there. You're 35. now you said you want to pay it off in the next six years. And that's more like, you know, four and a half years. That would be if I'm in super addresses. You said two thousand a month, which felt reasonable, right? Yes, as long as you know, nothing else comes up, you know, we have things that maybe occur or, you know, to your point of living life still because we don't owe anything else. Still the full kids trying to do still family. And that's where I wouldn't let your dollars compete. I would just plan for ahead of time. You have your emergency fund for emergency, right? You have that three or six months of expenses. Right. Do you have sinking funds in your budget for things like vacations, car upgrades, insurance premiums? Yes, yeah, we have, we have everything to cover us, you know, in those situations. You know, we don't owe anything on anywhere vehicles and we don't owe anything on anything else. I mean, I've never even owned a credit card, so you're doing fantastic. I would, I would set a goal that challenges you a little bit and then also give yourself grace that you've got a lot going on. You've got four little kids. You've got there's some health issues going on. And the other side of this is your income will likely go up over time from 34 to 40, right? Yeah. And so at that point, you can throw even extra at it. And so it's going to happen faster than it actually is represented on paper. People who were like you and me, Micah, we tend to beat the goal faster than we thought in the end, especially if you and your wife are aligned that this is a priority for us in a flight happens. Yeah. Take your foot off the gas for a season. We always say you move from intensity to intentionality once you hit baby steps four, five and six and even seven. And so it's okay to say, hey, we wanted to put extra this month, but life happened. Now, if that's a pattern to where you're never putting extra, there's a bigger problem here. But if you can sort of dedicate with your budget and say, all right, two grand a month and we're putting toward that mortgage extra on the principle, you're going to start seeing that get knocked down, knocked down, knocked down. More is going to principle than interest. All of a sudden, you're under 100,000. You can see the finish line and you go, you know what? Let's just lump some of this thing will be done. Yeah. Yeah. You're right. Because the calculator gave me some confidence and your budget's going to give you the actual facts on whether that that can happen. So that's what I always do is what must be true. Okay. I've got to put 2000 extra a month for the staff and by August of 2031 then work back work at backwards. That's it. And then stay disciplined on it. And then the thing to remember is it's just kind of keeping it in in perspective is most what's normal is a 30 year mortgage that you never really pay off. You just keep borrowing against it. Take out he lock. You do this. You do that. The fact that you if you take our advice and you take a 15 year fixed rate, you've already cut that thing in half. And if you just practice our principles and say, all right, I'm going to do the fixed 15 year fixed rate. I'm never going to borrow against it to know that even in 15 years, you'd be out of a payment. Just making that minimum payment. Just that is such a huge leap forward for mankind. And then if you get even more aggressive and go, you know what? I'm going to take this baby step six thing seriously. And I'm just going to make one extra 13th mortgage payment a year, right? That's taking it to the next level. So just to remember, there's there's levels to this and stages to it. And then you could be like the guy that just called in, be like, Micah, and get super intense and go, I want to do this in four years. So I just think it's good to keep that in perspective. I think what we teach around here, if you just follow it at the most base level, you're going to do so well. It's true. And you know, a lot of times, people who follow the Ramsey plan, they're just very goal oriented people. They want the next thing. And what's funny is you pay off the mortgage. It is a very exciting milestone. Don't get me wrong. But now you're like, okay, we got an extra thousand bucks extra 1500 bucks. Next great. What now? Well, I guess we could invest that. I guess we could take a slightly better vacation. So it definitely changes things. It gives you way more peace. But it's also not your ticket to freedom. I'm retiring tomorrow. There's still a lot of work to be done. There's still bills to be paid. The kids are still going to be kids. That's right. Dogs are going to dog. And so income is still your income. It's a good reminder. You know, the term financial freedom. You're never really free from having any financial obligation, but you can create peace in your life, which is why I like the word financial peace a lot more. I do too. But let's always aim for independence freedom autonomy. And it's also it's also good to know to look back on all the hours you worked and all the hard work you put in and say, you know, I can say with full certainty, I was a financially responsible adult with my money, and that itself feels good. And the bank doesn't run my house anymore. I do. And if you want to use that mortgage power calculator, we'll drop a link in the description of this episode for you to crunch your own numbers. If you're looking for extra cash in your budget to knock out the baby steps faster, start with your bills that are on auto pay like your phone plan. If you haven't looked at your phone bill in a while, you're probably paying a hundred bucks or more every month when you could be paying just 25. That's why I want you to switch to boost mobile. You get unlimited wireless for 25 dollars a month and that price is locked in forever with no contracts and no hidden fees. How much would that save you every month? How much faster could you get through your next baby step plus with boost mobile? You get to keep your phone and your number. So nothing else has to change except how much you're paying. Switching to boost mobile is a no-brainer because it's one of the easiest ways to free up money in your budget. Go to boostmobile.com/ramsy and make the switch today. That's boostmobile.com/ramsy or click the link in the description. 25 dollars forever requires customers to remain active on boost mobile and limited plan. Sarah is in Lincoln, Nebraska. Next, Sarah, welcome to the Ramsey show. Hi, thanks for taking my call. I'll say I'd enjoy a long time with Merrim. I'm so excited to be on full nervous. Oh, we got you. We're happy to talk to you. I think first I have a question about my marriage and my husband and I will say I already ordered Dr. Valoni's marriage kit. I look forward to that. Just a tip back, sorry. My husband and I have been married for 10 years. We did financial peace university when we were newlywed but I'm definitely the excel sheet planner map out person in our relationship. My specific question today is I need some help on how to communicate with my husband about what is a money issue but really the heart of the matter involves some broken trust. I feel like whenever I bring up this money issue, it's almost a masculine to him that it's about the money when really it's about a promise he made to me. To some extent I could care less about the money and I just I'm looking for some advice how to marry those two things together. So what broke the trust? What was the situation? Yeah, so we had some available funds. We basically live on our salaries and my work is two times a year I get large distributions from my business and so I do that. We live on the biscuits and the gravy is what helps us meet our goals. We live below our salary means and so we had some extra cash in my husband has a keen eye for buying equipment and you can turn around and make a profit on it. He had a large piece of equipment that he bought for one or two times for 45,000 so not chump change, right? And he knew that he could resell it for 90. He didn't want his business to buy it because he'd have to split the profit with a business partner. Rather he wanted us to personally be able to recoup those funds and this was after we talked to a financial advisor about our goals. So this particular truck was bought in January. I am a lawyer. He said I'll sign a contract that I'll get this truck's gold in six feet a days and I said you're my husband I'm not making you sign a contract. I can trust you. And the truck that was bought in January and the truck is still sitting. It's never been listed for sale. Why? There's no movement. I would love to have the answer. Is it sent him out to him? Why is he hung on to it? Right it's just it's a piece of equipment kind of in his industry so I said does the business want to buy it? Why don't you want to sell it? For the longest time it came from California. So we had to do some work to it to take off some special mission things. So we put five thousand into it in like June or July. Like I need once a month I ask what's going on? Do we need it? And what does he say? So in June or July he got that fixed and it was finally ready for sale and then nothing. I guess there may have been a buyer but then the buyer didn't get to him and I said well didn't just list it. But if you asked him today and said hey I mean it's been it's pretty soon we're gonna look up in its January. What's what's the story on this truck? What would he say today? So just a couple weeks ago he said well I'll just have the business by it. I'll just go get a loan for it and said that would be great. I just like to move on. I just make it and I ask them, I said, "Have you gone to the bank yet?" No. So I fear I'm on this three more months of not going to the bank. What do you think is behind this? You know I'm better than clearly, George and I. What do you think is behind all this? For you, I'm guessing you want the 45,000 back to, I don't know, throw whatever your next goal is. But you've kind of got some skin in the game on your end. What do you think is behind him not selling this truck? Do you think from the very beginning he never planned to sell it? I mean, what's your gut telling you? You know, I did. I asked him, I said, "Is there something I'm missing?" But you need to tell me, you know, is there a problem with a truck? I mean, I asked him that very openly and nothing. I think it's literally a lack of motivation and I think that's what's really. So could you just go list it and sell it? Yeah, I guess I could, yes. What's stopping you? Yeah, what have you said? I'll take care of it. It seems like you got a lot going on and I want to get it sold and I don't want to keep nagging you about it. I'm just going to take this over and get it done that way. Right now it's causing too much drama and I don't think it needs to be all that. I'll just, I'll handle it. What about that? Yeah, I tried that, I tried that all except for I'd do it by myself. I said, "Hey, I'll write the listing for a new title. I'll do it. You're busy." No, I'll take care of it. It's like this brick wall and yeah, I mean, I could list it but it is specialized enough piece of equipment that I don't, I mean, other than that I don't know how to handle it. And if he has the knowledge about it, is that he kind of, he's the expert on this equipment? Yeah. Okay, so how's that feeding into, is that part of a bigger story or is that, is that the story? How do we solve this thing? You know, how do we solve this thing? I have a big amount coming to me at the end of the year because of my business. I have a good idea of what it is and I think he's just at least six figures that that will be our gravy. Do you guys have combined finances? Yes. Oh, all of that. 100 percent. Okay. So there's no other areas in your marriage or finances where this has been an issue. It's just about this truck. Right. And I feel like it was a big leap of faith to invest that much of our, you know, family money into something like this. And this, he makes about 50,000 of year. So this was a personal him and I investment and something that, that's what he'd bring home. So what's the 45 need to go towards what, what explain the urgency on your side, which is like, I need this 45 back in our budget because we have to do XYZ. What's that thing that you feel the family needs the money for? Yeah. Praise God. We're on baby set five. So, but we did have a financial bill of, we set up 529s for our boys and I'd love to put 19 in each of those to make that this annual tax year. Okay. And then, and then I can do 19 again next year. And basically, I'm just going to let my, our kids are under 10. Does he know that, does he know that that's the goal? Oh, yeah. Okay. Yes. I will just do this thing together this weekend, say, Hey, I know it's been slow going on this. We're just going to do this thing together and knock it out one hour. We're going to get together, list it, take the pictures, whatever needs to be done, just get it done. Because at that point, it's out there. And now there's going to be people who are, you know, inquiring and it'll eventually sell at that point, right? How long do you think it'll take? I mean, he could get a, he could get a loan next week from the business for it to pay us and make a bit of a problem. But why is this business going into debt to buy this to like artificially get it off the book? So that's the part I'm confused about. I know. It doesn't seem like a good deal because that business loan is tied to his name. Yeah. So it's like. Well, let's take a, let's take a, let's take a boundary, let's take a page out of Dr. John's book, right? Because the truth is you can't make him do anything. And that's the frustrating part. You want him to do an action, you can't make him do the action. You can nag and nag and nag clearly that hasn't worked. So you're going to have to come up with a strategy of either finding a way to communicate what's really going on or figuring out who you're going to be in the midst of this, I think. So Dr. John might say, you know, walk up to him and say something like, the story I'm telling myself is that you're not aligned with our goals anymore. You're not aligned with our values anymore. And I don't want to believe that's true. But that's kind of what I've been telling myself because for whatever reason, you won't sell this truck and I feel like you're stonewalling me and it's just causing me, I feel like it's causing me to spin out and believe things that I hope are not true, right? Talk to him in that way and if that doesn't work, I might start to come up with some, uh, if you don't do this, then I'm going to do this language and I'd be using that language a lot. And that's from the Jade Warshall book, which is, if you don't get yourself in order, I'm going to tell you what I'm going to do next and you're not going to like it, sir. And maybe you start asserting a little bit of your, I can do whatever I want because he's doing a little of that. Do you see what I'm saying, and maybe you need to stop walking around these eggshells? But my point is eggshells is not getting you anywhere. So maybe you say, Hey, if you don't get this done, I'm going to do it and I don't think you want me to do that, but stand on business. I will do it. Welcome back to the Ramsey show in the Fairwinds credit union studio. I'm George Campbell. My co-host is sour as Jade Warshall and we're taking your calls about life and money at this number, triple eight, eight, two, five, five, two, two, five, join the conversation. Scott is in St. Louis. Up next. Scott, welcome to the show. Thank you. Thank you for taking my call. You're so welcome, Jade. I'm really excited to talk to you guys. Well, I love the energy. Yeah. I'm ready to snap into a slim Jim. Thanks a lot. So okay, I've been listening a couple months, you know, I accidentally found Dave Ramsey on YouTube, you know, I don't remember the question I was putting it, but anyway, I accidentally found Dave and I'll never forget the day. My life has completely changed. You know, so I started doing the debt snowball, started attacking all the little debts, I paid off my phone, I paid off the chiver practor, I paid off the diamond ring for my fiance. Now this is where I'm really hoping you guys can help me out, okay? So the only two debts I have left are my cheap and my primary residence, but yeah, yes. Way to go. Okay. Thank you. Thank you, Jade. And it gets better. I have a rental property in Las Vegas and I have three hundred and hopefully three hundred and ten thousand equity in it. So from listening to Dave, I've decided I want to sell that rental because it's always going wacko on me anyway, you know, and I'm going to pay off my house. Wow. Fantastic. Well, I'll be good. Yes. I'm just so excited, you know, and I got to say paying off them little debts. That was the funnest thing I've ever did financially. I mean, I was making little payments. It was really fun. Yeah. That's no balls rewarding. It really was fun, you know, but okay, here's my, here's where I need some help. Okay. So I got the sale of the Vegas house right around the horizon in 2027 and December is my best month of the year. It's usually 20,000. I'm a garbage man, I pick up a rich town. So I get a lot of lots of tips, you know, thank you. Nice. That's awesome. Yes. Yeah. You know, thankful to God for that, you know, but, but yeah, so the 20,000, okay, this is where I need to reach out to you guys and we're, you know, and because I got that on the horizon, I have, I have not fully stopped investing, like I brought my 401k down to 6% just to get that match. I was doing the snowball because I, you know, I do listen to Suzy Orman a little bit. You know, I'm kind of tossed in between two. I love the, the Ramsey, I love everything about the two finance, you know, I mean, if you're going to sell this rental right away, it's the months that you pause is going to be negligible. Why would you wait until 20, how later are you waiting to sell this house? I mean, are you going to list it in January or what's the, I got a tenant in there. I got a tenant in the house and the lease is up four months from today. It's up March, March 3rd. Okay. Great. So you'll sell it in the spring. It's a great time to sell a house. And you're saying in the meantime, why pause retirement if you're going to take that money and put it on the dead? Is that your question? Yeah, I'm really not feeling like I want to just like a, like I did with the dead snowball with the middle ones. The cheap, what's left on the Jeep finance it? What's that George? What's left on the balance on the Jeep? 32. Okay. What do you make here? I make 95. Fantastic. And your singles. still engaged. Engaged and I got a wedding on the horizon, yeah, thanks a lot. Maybe set aside some of that equity money for for some wedding in honeymoon. Yeah, and we can't make the cruise this time, but eventually if you don't forget me, I'll look for you. Absolutely. We'll do another one and I'll see. I'll meet you on there. You'll bring some fun energy. So you got 32k. What's left in savings right now? How much do you have? Do you just have a thousand bucks or more? I have the thousand. I just got my get my bear wins card in the mail. Okay, so a thousand a thousand dollars saved, but you're also going to get another 20,000 in December and how much margin do you have left over from the month in November? I got about 5,000 in savings right now. 5,000. That's for my mortgage. You know, I don't do a budget. You know, I really need to tighten that up. You know, but yeah, you do because here's a thing. Here's what I think. Hold on for a second because here's what I think. I think that if you pulled your pulled things tight and said for November because November is not done yet, we're just getting started. If I pulled my margin for November, I pulled my margin from December because I know I'm making bank at least 20,000. Like you said, you're a single guy for now getting married soon. And then in January, took my margin there, I think you could have that Jeep paid off and out of the picture before the tenant's gone. Exactly. In that way, when you do sell the house, I mean, you named off 25 without even blinking. Okay. But hear me out. Hear me out. Hear me out. Even if you're not right on the nose, my point is you're going to pay off the majority of that Jeep. And the truth is, should you pause your investing? Yes, you should. The amount of time is going to be very negligible for the 6%. That's the truth. And I would suggest that you do it. But if you don't, nothing's going to catch on fire, you should do it. But I think that you're probably not. And my point is, you're going to pay off that Jeep really, really fast either way because you're going to either sell the equity or you're going to use your cash flow to do it. But I wouldn't just pause any extra payments until this thing is paid off because who knows when that's going to be? Who knows what's going to come from it? So instead, I would just keep on with the debt snowball attacking it. I would encourage you to pause investing because it's going to light a fire under you to get back to investing, which means the car is getting paid off faster. You're going to stick to that budget when investing is on the line. And so I think all of these are married together. The Ramsey plan is a package deal. And it's not an all-ah-cart buffet. And so when you go all in, the plan works even better. And you know, we've shown you that the debt snowball works. That this plan really works when you work it. And I'm telling you, man, if you do it that way, you'll be debt-free before this house is sold. And then you're going to have extra money after paying off the mortgage. Yeah. That's a good way to start off your marriage right here. And it's a great way. Well, let's walk through this because a lot of people get it twisted. They're doing it out of order. So baby step one, we talk about this $1,000, no more. And I starter emergency fund. It is not meant to be enough to cover all emergencies. It is meant to be a buffer to get you through baby step two. And if an emergency happens, you can pause baby step two, cover the emergency, and then hit play on baby step two. So baby step two, knock out all the consumer debt, everything but the mortgage, using the debt snowball that Scott was talking about, that smallest, the largest balance, ignore the interest rates or going from a momentum here, not interest savings. Then baby step three, once you're debt free, let's save up a fully funded emergency fund three to six months expenses. That might be 15, 20, 25K for some of you. Then once we have that, we can start building for the future instead of paying for the past. That's investing 15% into retirement accounts. Once we have that going, we can save for our children's college if you have kids, pay off the house early, and if you do it our way, 15 year fixed rate mortgage, worst case scenario. If you do nothing extra, you're done in 15 years. That's great. And then you get to baby step seven, which is the mountain top. You get to live and give like no one else and just continue building wealth and live in life on your terms. And for most people, that first three baby steps happens in a couple of years. One month for baby step one, 18 to 24 months on average for baby step two, six to 12 months for baby step three. Think about that, where you might be two to three years from now. If you just trust us, I feel like Aladdin on the balcony. Do you trust me? Just trust me, bro. This plan works. Listen, if you go all in on the plan and it doesn't work, come talk to me because I think you did it wrong. Use your error on that one. Good news. Everything is 100% off if you don't buy it. Bad news. It's the biggest spending season of the year and your money's being pulled in a hundred directions. Like there's a bill do and matching tattoos with Nana would be by one get one tempting, but money doesn't make decisions. You do. So decide ahead of time with a focus plan for your money before it's even spent. My wife and I use the every dollar app to do exactly that. It plans every dollar coming in and going out. It shows you where margins hiding too. That's extra money to put toward your biggest goals one at a time and hit them faster. Whether it's paying off debt, saving for a trip, or getting tatted up with Nana, get focused with every dollar of this holiday season and start for free. Download every dollar in the app store or Google Play today. Our question of the day is brought to you by Ask Ramsey. Your free AI money tool that provides personalized money answers based on Ramsey principles. Visit Ramsey Solutions dot com slash Ask Ramsey. Alright, today's question comes from Grace in Massachusetts. She says we've been meeting with an insurance agent and he recommends rolling our IRA investments over to a whole life policy. He says doing this and then borrowing from the insurance to purchase multiple rental properties is the best way to generate income for our retirement years. Is this sound like a good idea for him? I don't know how else to say this grace, but you need to run for your life. You endanger a girl like this is terrible. This is horrible advice. Yikes. And I mean, obviously it's from an insurance agent. It's not from investing advice for your insurance agent. Yeah. This is terrible. Oh boy. So here's what he's looking for, Grace. Let me just cut to the chase. This guy's looking for a big fat commission. That's what he's going to get from that big fat whole life policy that you help him fund. I'm going to be ashamed of myself from this insurance. Okay. This idea that you can, this is the big thing on social media. Jade is you can borrow from your whole life policy tax free. Yeah. All debt is tax-free. You know, you know, what is going on here? And they're like, well, you just pay yourself interest. Okay. Life hack. You get to pay yourself back interest. You can do that without taking on debt. Merry Christmas. And then the purchase multiple rental properties, part of it is. So highly leverage a bunch of rental properties to hopefully get some cash flow from your tenants so that you have your time and income. Or just keep the IRAs invested. Yeah. What about that? And keep earning your 10, 12% that you've been earning and you just build wealth. Please fire your insurance agent. And if you need a good one, you can jump on ramesisolutions.com and whatever insurance you're looking for, look for that thing specifically. Don't look for investing advice through an insurance policy. Never mix the two. It's always a scam. It's always good for the person selling you that insurance and bad for the person buying it. Yes. Let's just remember that insurance doesn't involve investing. Period. They start pitching you on it. So I need to remember there's a cash value portion that can build over time. Just run. Just run. That guy messed around and made me angry. I hope grace. Here's this. That's the scary part. I know. But all right. Everyone tell grace. Tell if your grace, if your name is grace, you live in Massachusetts. This is for you. All right. Bree is in Atlanta, Georgia up next. What's going on, Bree? Hey, oh my gosh. Oh, this is so cool. I think it's cool too. Thank you. So I just have a question. I have four boys as six to two months old. And we are looking at kind of like our six year old is starting to want to like help around the house and kind of, you know, in school, learning about money and like different things. And we're kind of trying to find the line between, like I know, Davis talked about like commissions before I've heard and say that. And like the line between what we pay our child for and what is like normal household chores. And we don't have a pet. So there's no like pet thing there. He's not old enough to really like mow the lawn or or any like our tools type of thing. But we really want to set our kids up to be really good stewards of money. And I come for family that was not. And so I really just want to, you know, prepare them for the future. And I know it starts really young. And I just, I wasn't sure what, if you all had any suggestions, one kind of how to balance that. Yeah. I love that question. I mean, I have a six year old. My kids are six and eight. And we started them on earning, earning unallowance at about five years old. That was kind of when they were wanting things that we did not want to purchase them and kind of started thinking they need to have their own money. And now's a good time. So I agree with you. I do think that there are chores that they need to do. The way I say it in my family is, you're part of a society. And when you're part of a society, there's certain things that you just have to do. That's your responsibility. You don't get paid to do it. And so for our kids, that's anything that involves their room or their things. Their room and their things in our society is their responsibility. So yes, you have to clean up your room. You don't get paid for that. If I ask you to bring some of your laundry downstairs for it to get washed, you don't get paid for that, right? If I ask you to pick up your toys that are around my house, you don't get paid for that. Brushing your teeth, not get paid for that. But there are things that you can get paid for. And so for my kids, my six-year-old, she has to unload the silverware part of the dishwasher. And my eight-year-old son has to unload the plates and everything like that of the dishwasher. My six-year-old, we have a shoe closet that we put all our shoes and when we walk in the house, she has to make sure that's straight, she has to sweep it out, make sure it's clean, make sure everything's organized. That's part of some of her tasks that she has to do. Another task she has is after my husband has cleaned the dishes, she has to sweep up the floor and make sure the floor is clean, right? So there are things that are age-appropriate and they've got a chart on the refrigerator and it's their responsibility to mark off their chore. If you don't mark it off, you don't get paid. So there's multiple layers of responsibility in there. And the amount that I pay them, that Sam and I pay them, we kind of worked it backwards of how much money do we want them to have in their hands at this age? Because at this age, the whole point is they're going to want to spend it, right? And so you kind of have to be strategic, otherwise they're going to be out here buying too much. And so a couple of the things are only worth 50 bucks a day. Yeah. I think for her to do the shoe closet is a 50 cent chore, right? And to do the other thing is a 50 cent chore. I think she has a total of maybe, I think it's something like eight or 12 dollars that she can make. It's the max. Yeah, it's the max. So be thinking like that and the other thing, I could probably go on and on about this. But the other thing that's really a big thing in our house is the day that they get paid. So they get paid once a month, but they are not allowed to spend their money the day they get paid. They have to be telling us what you're thinking about buying. And then the day they get paid, they don't get to, they can research it, but they don't get to buy that day. They have to wait at least one day before they purchase it and be sure that that's the thing they want to buy. Is that something that you put in a budget like as a line item that you're paying them? Yeah, because we would we would add that in. Yeah, I put it in the budget because if they mess around and do all their chores for the month, it can actually like, we'll feel it. So it's like, okay. Once you have four kids that can make, you know, 20 bucks a week or something, you're like, okay, that's actually a decent amount of money. Yeah, setting aside here. Yeah. And then sometimes I'm not going to lie. Sometimes I'm like, I hope they don't make it. Because it's a line item on the budget. More money I get to keep. But do you have things in your mind that would make sense in these categories, Bri, where you go, okay, making your bed, that's, I'm not paying you for that. But if you go pull the weeds in the flower bed, you go pick up, you know, rake a pile of leaves, I'll pay you for that. Yeah, I'm like, I have them doing chores like they have a little chore thing on the the two, the six children and three year old do. And it's like, I have my three year old do this to silverware. But like, I don't know, like, I was like, I'm not going to pay you for that. You eat off these things. So like, you're going to clean it too, right? Like, that's cool. And that's where, like, I really, I really struggle with like, what do I pay? Because like, they're not old enough to be doing extra stuff, right? And like, I'm like, Oh, well, you're close. Well, you wear your clothes. Like, you should put your clothes away, right? Like, so I just, I don't know, like, at this age, for the six year old, I really, I, it's really a struggle for me for us to like figure out without damaging like, Oh, well, I'm just going to do these household chores at all time. I'm going to get paid. And it's like, that's not how life works either. Well, it's certainly not a one-size-fits-all, you know, parents can suggest things that work for them and work in their house. And not all six year olds are created equal. That's true. But I do think that it does create a bit of a delineation because it gives them responsibility over their own things to say, Hey, the things that are yours, you don't get paid for that. So if I'm asking you to do anything that has to do with your things, your put your books away, put your backpack on the hook, put your, you know, put your laundry in the, in the drawer, that's your stuff. I'm not paying you for that cleanup, your room. But if it has to do with the rest of the society of the home, then yeah, you can get paid for that because that's kind of like being in the real world. Once I contribute to the real world, I can get paid for it through my job. No, that may, no, that actually makes sense. I didn't really, I didn't really think about it in that way of like contributing like in a real world. Yeah. And so it can kind of follow them as they get older, which is like, okay, you're making a contribution to the greater good. That's the type of thing that you get that that you get paid for. And the key is like, what is the underlying thing we're trying to teach them? Money comes from work and that you can't just be entitled and expect us to just hand you money for existing. If you want to go buy a toy, you're going to have to go earn that at a certain age. And it's good for them to learn that. It actually gives them a sense of independence. It's good for their growth. So hang on the line, Brian. I'm going to send you Rachel Cruz and Dave Ramsey's book Smart Money, Smart Kids. He walks through how to handle this based on their age and what's age appropriate. I think it'll really help you navigate this, but you're doing a great job way to go just handle in those four boys. I talk to couples all the time who want to be more intentional about their marriage, but they don't know where to start. That's why I created The Marriage Kit to give couples a roadmap for working toward a better marriage all year. You'll start the year by getting on the same page with an annual planning retreat. Then I'll walk with you every month as you make it happen together. We only have a very limited supply. So order yours now for $84.99 at RamseySolutions.com/store. The Live Like No One Else Cruz is almost full. Don't miss your chance to join us March 14th through the 21st of 2027. It's an all-inclusive Caribbean vacation. Seven days of Ramsey entertainment, including time with Dave Ramsey and all of us Ramsey personalities, all new wealth building teachings, the world's largest debt-free screen, live tapings of your favorite Ramsey shows, including the Ramsey show, Smart Money Happy Hour, and more. Right now you can bring more of your favorite people along, because we got a limited time offer. Third and fourth passengers, sale free. Wow. Plus you can unlock a free cabin upgrade with code, sale with Dave, no spaces, sale with Dave. Why wasn't it sale with Jade? I don't know. That's fine. Dave wishes time. Doesn't have the same ring. We'll get the offer details in Booker Cabin at RamseySolutions.com/events. Hope to see some of you on board. Abby is in Booker Tawn. Up next. What's going on, Abby? Hi, how are you? Doing well. What's going on? Okay. Here's my question. I've been following the baby steps and we're a couple around 70 years older, both retired, and we don't have life insurance anymore. We had term insurance that expired, and we don't have any long-term care policy in place. We're being told that a good solution would be to buy an nudity for about $250,000 to cover the both of us, and so long-term care needs that would turn into a life insurance policy if they long-term care part isn't used. And that would go to our kids. We have no debt, and we're living both of our savings and social security. How much savings do you recommend? We have about a million dollars in CDs and about 500,000 individual IRAs. Okay. The one million in CDs, can you tell us more about why why that and why that choice versus investing it in the market? Because that's the proceeds of the house that we sold when we retired, and my husband was very risk-versed, and so he wanted to keep it safe and not put in the market. The individual IRA is in the market. Okay. So his risk of verseness explains the interest in the nudity, I think. Right. No, actually, the interest in the nudity is mine. He's averse to that too. Mostly because he's afraid to invest any of what we have. Okay. Well, you said we've been told. Who told you? Who's trying to sell you on this annuity? A good friend, a very close friend who is very highly insured with annuities can do this for a living. Oh, they sell annuities for a living. Are they insured for a living and they're highly invested in nudity? And they do well. How do you think they've done so well? Well, they're doing well in the monies that they're getting from their nudities. Okay. So they've they've they're eating their own product here. Yeah. I would imagine they're also doing well because they've sold people annuities and got some sweet commissions for it, right? That might be part of it. Okay. I liked your husband on this. So I'm not a fan of annuities. They're sold people, you know, they're sort of like fear mom. of hey, you don't want to lose money in the market, do you? No, of course not. What about a guaranteed payment? $250,000 is a lot of money to give up, to potentially cover some long-term care, to maybe get some death benefit. It's kind of like that old lottery kind of question. Like, would you rather have a million dollars or would you rather have a thousand dollars a month forever? And somebody's going to take the thousand dollars a month for it. You know what I mean? It's like that mindset that's like, hey, you're guaranteeing me something, but just because it's guaranteed doesn't mean it's better than investing the money. Does that make sense? Yes, but my question is, if you don't have long-term care insurance, and there is a family history on one of our families as a venture, and I'm very concerned about the cost of care. Absolutely. So there's part of this, and I don't know that you're going to do this, because like you said, your husband's very risk-averse, but you're at the point where you can be self-insured, because you've got this million dollars, but what concerns me is that it's not in a position to really grow for you guys and become the stability that I'd want for it to be in a CD. Right. But even still, you've got 1.5 million. So you can cover it, and here's the other part. Why not buy long-term care insurance? Because I understand that it's very expensive at all age. Well, 250 grand is expensive for an annuity, don't you think? Paying a couple grand a month, it would take you a long time to get to 250 grand paid into that. So I would look into that. A little bit of a difference is that a long-term care policy would be used to lose it, and this would be something that could go over to become a life insurance policy for our kids. Well, your kids don't need it, right? They're not relying on your income. No, they're not. And that's the only purpose of life insurance is to replace income of something or to happen to you. So they're going to be just fine. They're going to inherit whatever is left over out of your nest egg, right? So we don't need to create another account for them over here while giving this guy a bunch of commissions. So it's trying to do a lot of things at once that you can do separately. So if you wanted a life insurance policy, which again, you don't need, so let's just take it off the table. You could go buy life insurance. If you want long-term care, go buy long-term care insurance. Because right now, they're trying to bundle it in a way that sounds super appealing, and then you can't lose. But you're locking up 250K with very poor returns and high fees. I'd rather you see you invest that 250,000 because I'm doing the math right here. If you guys live in other 10 years, which are you both in decent health? Yeah. Okay, let's say you lived in other 10 years at least and you invested that money, 250 grand, and you just put it all into the stock market for 10 years. If there was an average rate of return of 10%, which is what we've seen over the last 100 years, you would have ready for it $676,000 in that account. Wow. Which we can agree would cover both of you in a long-term care situation. And more. And so that's personally what I would do, and that way you're not paying all these fees. The money's flexible. You can invest it. It's on your terms. No one's getting a big commission for it. And I would encourage you and your husband to sit down with a good financial plan or not an insurance agent to map this all out. To go, we can do better than a million dollars in CDs. Because guess what, if he's risk averse, there's risk and inflation eating away your money. Absolutely. That's a bigger risk at your age than the money disappearing into the abyss. And if you invest it wisely into index funds and mutual funds, you're diversifying across hundreds of companies. I mean, the market is up 12%, 13%, this year already. Even in the midst of chaos and uncertainty and headlines. So I don't want you guys to mess up. Mutual funds. They're essentially the same thing. It's just a giant group of stocks. So we're not talking about when your husband says I'm scared of the stock market. What he's really thinking of is one single company going way up and way down. So to smooth that out, index funds and mutual funds pool together, you know, 90 to 200 or more stocks inside of one fund. And then we even recommend diversifying across four different funds. One that's more aggressive, one that's sort of mildly aggressive, one that's a lot more stable, and then international funds. So we call that growth, growth in income, aggressive growth in international. And a good financial planner can walk you through all of that and actually help you understand it and give you perspective in the market so that you're not spooked by it and fall into a trap like this annuity. Okay, I have one other question. Sure. Okay. I'm living right now, retired with $4,000 a month coming in from social security. Okay. And you know how much we have put away. Mm-hmm. And we spend approximately $100 to $125,000 a year or have been spending about that much. Okay. Are we in a position to continue to spend that amount by using just the interest that comes off of these investments and our social security? If it's invested well. So if your investments are fully in the stock market and not, you know, 60% in bonds, then it would be much more feasible. Because if you, let's say you had, you said you have one and a half million basically-- Yes, one million in CDs and the $500,000 is invested. So that's one and a half million right there. Right. Plus there's another couple hundred thousand dollars that was invested in real estate. Perfect. So even if you peeled off, let's say six percent a year out of that $1.5 million, that's 90 grand a year. Plus your 50 that you're taking from social security. But the key is that money has to be invested. But it needs to be invested well. The key is that money. What George just said to you, that's barring that money is invested and earning at least 10% where it is now sitting in a CD. What is it? Four and a half. You're not going to be able to peel off six. So it needs to be invested well. Go to RamseySolutions.com. Click on Smart Vester for more help with that. [music] Medicare is confusing for everyone. Doesn't matter whether you're a teacher, rocket scientist, or one of the politicians who came up with it. This stuff is complicated. And nobody should have to untangle it by themselves. And that's why we created a webinar where the Ramsey Trusted Partner chapter. Co-founder, Ari Parker, and myself answer your toughest questions about Medicare so you can tackle the process confidently and get the right plan. So go to RamseySolutions.com/chapter to learn more. That's RamseySolutions.com/chapter. [music] Our scripture of the day, Psalm 145, verses 16 and 17, you open your hand, you satisfy the desire of every living thing. The Lord is righteous in all his ways, and kind in his works. Stephen Covey said, "Our most important financial asset is our own capacity to earn." Facts? That sounds a lot like your income as your greatest wealth building tool. Full show. That's good. All right. Henry is in Oklahoma City up next. What's going on, Henry? Hey, Jade. I'm in George. Thank you guys for taking my call. I have two main questions. Do I need a file for bankruptcy? And then my second question is, how do I save while drowning in a deficit? I fully liquidated my retirement and the state of my life style. I was living. And so, and right now, I'm really struggling, and so I'm just trying to figure out a way out of this. Did I hear you say you broke up a little bit? Did I hear you say you liquidated your retirement? Yes. Was it trying to avoid the bankruptcy? What happened? No. So I ended up being impacted in a layoff, and so I was out of work for about two, three months. I was making 90,000, and now I'm making 50,000, due to my field significantly shrinking, due to automation and AI. Okay. And so I currently am around like 45,000 in debt, and so one of my paychecks every month is going entirely to pay in debt. And so I'm truly just drowning. So there's a deficit. How are you covering the gap right now? You know, Robin Peter Paypal, to be honest. How much is the deficit? Do you know the exact number that you're in the red every month? I mean, on average, like 100 to 200, I've like shrunk my expenses down to like the nitty gritty. Like I'm not able to really like have a life. Like I can no longer just go to Starbucks or whatnot. And so for me, it's hard. That is hard. Everybody wants to feel like they can enjoy some form of a lifestyle from the work that they're doing. So that makes total sense. So $45,000 in debt. You're down from making 90 to 50. Are you working 40 hours a week? Like how many hours a week is your job? Yes, around 40. So at 40 hours, and I'm assuming it's just you, or is there a kid's wife? It's just you. So what would if I woke up and I found out like, man, I'm making less, making 40 hours by making less. And I've got this $100 to $200 deficit. My first thought would be like, let me go get a side hustle until I can find a full-time gig that pays more. Right? Yeah. So what prohibits you from doing that? Transparent, I'm going to be starting in school soon. Like I've never went to college. I think without I would be able to like expand, I guess, my horizon and my career, but right now I'm. And what way. And so what do you mean by that? What are you going to school to do? It's it's going to be in like logistics. Okay, so that's the career field you want to get into? Yes, and currently I'm in the HR technology field. Okay, so what makes up the 45,000 in debt? I have a car loan of 26,000. I have almost 4,000 in credit card debt and then in personal loans. I have almost 15,000. Okay. Have you cut up the credit cards? I have not. Are you still using them? Yes. Do you think that's part of the problem? Yes. What if we did something drastic and we said I'm not turning to debt for any reason? It's just off the table. I'm going to pay my bills in order of four walls. That's food utility, shelter transportation. I'm going to cover my insurance bills and I'm going to cover the minimums on the debts and if there's anything left over it's going to go toward extra on the debt. But that way you stop the bleeding because it's really hard to get out of debt when you're still even temporarily going into it month over month. Okay, so if you do that that's the more piece number one is cutting up the credit cards. You can still pay them off even if you close them and cut them up. So that's the good news. Then the side hustle J talked about if you can come up with even let's say a hundred bucks a week in a side hustle That's $400 a month. You would have a surplus for the first time in a long time. And then the next piece of this is let's talk about this car the $26,000 car. Do you know how much it's worth if you were to sell it or looked it up on Kelly blue book? I actually just put it on like car knocks and I would get around 25 5 for it. I love that. That means you've got some options here. You could trade it in. If you really needed to get offload this very quickly or you could do what I would do, which is let's list it private sale and see if we can collect a couple more thousand dollars because if you can get a little bit more plus add some cash to this. Not only can you sell this vehicle get rid of the car payment, but now you can buy something in cash. How how quickly if you did the things George said you cut up the credit cards. You picked up a side hustle. How quickly could we save up a couple of maybe two to three grand and then sell this car off. And now you don't have a car payment because how much were you paying a month for the car? 63 oh large plus the insurance imagine that payment gone that yeah, and it's it's a lot of your world right now. It's over half your income tied up in this car. Yeah, that's scary. So that's one. I mean that'll really speed up this debt-free process to get you back to some freedom and peace. And so once you do all that, you cut up the cards. You get the side hustle. Let's get this car sold. Get as much as we can for it. I would get quotes from everywhere you can. Not just CarMax, Carvana, local dealerships everywhere to see just who what is the highest number you can get if you got rid of it today. That'll help you sort of find the floor. How far away from work do you live? That's funny mentioned that I will be Transition to remote job leader this month, and I love that because do you want to know what I might do and this is extreme. I might be like, hey, I'm on public transit for a minute because that's going to light the fire under my butt to do all of this. If I sell my vehicle, and I go, it's up to me to now figure out the rest. I'm going to be working from home. I'm going to be saving up every dollar I have. That means if I want to go somewhere, I have to take an Uber. I don't want to do that. Walmart plus grocery delivery. Yep, or I'm I'm walking. I'm using my bike. I'm using my feet. That I don't know if you'll do it, but that could be an extreme measure that might. Serious sacrifice push some sense into you. Okay, and last piece, how are you going to pay for school? I got accepted for like FAFSA. So it like the government can pay for it for now. And then I will just pay on it later on. Wait, that's called a loan. Yeah, be careful because FAFSA doesn't necessarily just because you fill out the form. Doesn't mean that what you're offered is is aid. Sometimes it's in the form of a loan. So be careful. Is it aid or is it alone? I want to say it is the loan. Okay, we don't need any more debt. You called us because the problem is debt, right? You can't solve a problem while simultaneously creating it. So the same way that George told you, hey, with the credit cards, you've got to cut it off. You've got to stop the behavior. That goes with debt across the board. And I'm saying this not just to you, Henry, but to anybody watching. If debt is your problem, the very first step before you start the baby steps before you start the budget, the first thing you must do, it's it's the invisible baby step, George, it's the thing you do on the inside where you go, I'm not borrowing any money anymore. None from anybody for any reason. It's an identity shift. It's I'm a person who doesn't borrow money. I take that off the table because I want to own my future. I want to have all the options in the world. And I don't want you going to college to get that job to now all of a sudden have another 40k to pay off. You just restarted the process. I do have one final question. So one of the loans, which I recently did take out, it's on a 35% interest rate. Oh, did I go back to my credit union, which I actually just did a debt consolidation with less than two months ago. Should I go back to them and say, can we close out both of these final two cards and combine everything into just one loan or just like power through from here. What was the 35% interest? Why did you get such a terrible interest rate? It was through one of the bigger like financial institutions that just give out loans versus your credit union. Correct. Oh boy. I mean, I don't think consolidation is the answer because you've already done that. And so we're sort of just trying to fix a problem with another problem. But if you can get a lower interest rate and clear that other debt with a local credit union, I'd rather you owe them at a lower interest rate. So you can go see what they're willing to offer you to get you in a better position to fight the debt. But just know that's not that's not the solution. If you were out here doing everything it takes and that's just one of the many things that you're doing, that's fine, but that should not be your first course of action. First course of action is let's cut up the credit cards. Let's get three jobs and let's sell the car. You need to be doing those three things first because those are actually going to move the needle for you. And I'll send you my book breaking free from broke Henry. So hang on the line. We'll get you audiobook or ebook. That puts this hour of the ramesy show in the books. Remember, there's ultimately only one way to financial piece and that's to walk daily with the Prince of Peace. Christ Jesus.