Build Habits That Build Wealth

[MUSIC] Brought to you by the Everydoller app. Start budgeting for free today. [MUSIC] Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show. And I'm Rachel Cruz hosting this hour with Jade Worshaw and we're going to be answering your questions. So give us a call at triple eight, eight, two, five, five, two, two, five. Starting us off is Robbie in Oklahoma City. Hi Robbie, welcome to the show. [MUSIC] Hey, thank you so much for having me. I really appreciate it. You know, I appreciate you giving me the time to kind of run some things by you. Yeah, absolutely. Yeah, so currently I'm running into some issues from a budgetary standpoint. You know, it really comes down to budget discipline at the end of the day with my wife. It's been a constant pain point for us throughout our marriage. We've been married over 10 years. Got several kids. And while I would say that we're not necessarily in a difficult position financially, the budget just keeps getting blown up. Meaning, you know, we have really, you know, high, you know, important priority things that were putting money towards and that money gets spent on other things. Okay. In particular, we were putting our kids through private school and, you know, that's, you know, to the tune of about $2,000 a month to do that for us. And, you know, the money that we set aside for that ends up getting repurposed for more material things. Wow. And so we've gone through counseling. We've had many sit downs over the years. And we just kind of go through this crazy cycle, you know, where I feel like we're on the same page. And then, you know, here we are again, doing the same issues. Okay. So, basically, a point where I'm not sure what to do next. Hence, you know, kind of turning to you all day to get some wisdom, hopefully. How much, I'm just curious to know, how much margin you guys have in your budget or is it pretty tight, like with, with private school, is it down to the wire? And there's not much more room to do anything else. So, I would say we have, we have the margin if we're disciplined. How much margin? Now, I would say we have, you know, about an additional $2,000 a month of wiggle room there. But, you know, that's getting eaten up. Okay. And what is she, what is she spending the money on? Furniture, decor, clothes, you know, vendors for parties that she likes to throw. That's a lot of stuff. Okay. Those would be the higher spend. Do you guys have categories in the budget now for clothing, posting, you know what I mean? Like the things that she enjoys to do. Is there any money allotted to those things in the budget? You know, that's a fair question. So, to take a step back, you know, my income is designated for all, you know, necessary expenditures, you know, mortgage utilities, like everything that is necessary. And then also goes towards building our retirement and savings. And what she brings to the table is basically everything else. So, that would be contributed to, you know, how much is that? So, she nuts around $60,000 a year. Are you guys operating out of one account? No, multiple. Okay. But the funds are shared. Is it like a shared situation? And it's just easier for your brain to think of it like that? Because it is kind of strange. I know. I don't like the separation. I like it. Like the ideal would be, yeah, we have this much in our housing, this much, this much. And regardless of whose dollars it's being pulled from. Right. We're all functioning out of one account, if that makes sense. Yeah. Yeah. She is at 60. What do you net? 50. Okay. And can I just ask? Because I don't want to make any assumptions. What percentage are you investing every single month for retirement? What's the percentage number? Or percentage number? Yeah. So, that's a good question. The percentage. I'm a little fuzzy on that. Yes. I'm 750 in my 401k every month. Oh, per check. And then that, no, no, no, monthly. So I get paid by, uh, by weekly. And then that gets matched, um, by my company. Okay. And you said you net 250,000 a year. Correct. And she's at 60. So you guys are a 310 household. And you're only putting in 750 a month. Uh, 750 a month. And then, uh, I put in another. So the 401k aside, I put in some into a brokerage account. Separately. Okay. So let me get, let me get to my point. My point is, I want to make sure that your ratios are correct. So we actually see the margin here. Because if you're telling me making $310,000 a year, and you're paying to K a month for private school, that's not crazy. That's less than daycare in some circumstances. And there's only $2,000 left a month. I have a head scratch moment on that. So, because my point is, where's the money? Where's the money? I'm sorry, I should have been more clear on my side. And that's the problem. Okay. So Robbie, so yes, I don't have this ability. So here's what I would say, Robbie. And I wish she was on the phone, because I know there's two sides to every story in this. And it's obviously been a, it's been an issue, because you guys have been to counseling for it and all of it. So on one, on one end of the spectrum, she's, you know, a shopaholic. She has an issue. She can't stop herself. It's compulsive. It's an addiction, right? Like, that's one side. The other side is that you guys are on completely separate pages. You really don't know what's going on. She actually has the ability to spend a little bit of money every month and to you, you're freaking out because everything is designated in this. Well, she can only spend off of her paycheck margin. Of her paycheck and it's all separate. It's just, it's a little strange. So, if the middle ground, I may be leaning more to the ladder for a second. So, what I would want, what I would suggest, you called us, I would sit down with her and I would say, we make X amount a month. Regardless of who brings it in, this is what we have per month. Now, out of what we have per month, we are going to go down a detailed budget. And we're going to talk about how much do you need for groceries? Is if she's the grocery shopper, she's going to know. If you haven't stepped foot in a grocery store in five years, you're not going to know. So, she's going to know this is how much we need for groceries. This is how much we X, Y, and Z, and you go down the list. And she has a clothing line item. She all of this because you guys are not, you're not, you don't have a ton of consumer debt I'm assuming. No, we don't own any of our vehicles. The only thing we really own is our mortgage. I mean, my wife has $1,000, $5,000, like, personal, you know, loan that she took. She took, she's a real turn and took it out for some reasons that. Okay, so I would have an issue. Yeah, so I think you guys, Robbie, Y'all are all over the place a little bit. There's no cohesiveness to this. It's her doing this. I'm doing that. My paycheck here, hers there. And I think that's the root problem. You guys are not working as a team. You're working as two business partners trying to make a household work. And it doesn't work that way. So tonight, if I were you, I would sit down. I would download every dollar. And you guys together create a household budget. And together, what are your debts? The $5,000 loan is as much yours as it is hers. I mean, you guys own all of this together and agree on where your money's going. If you're behind on your bills, doing more of the same isn't going to fix it. You need a different plan. And that's why I tell people about guardian litigation group. If you've missed payments, if collectors are calling non-stop, or if you're getting letters about legal action, that's your signal. And it's where a lot of people wait too long. Because the longer you wait, the fewer options you usually have. And once it turns into a lawsuit, things can get more expensive and more complicated fast. Guardian litigation is a law firm, not a call center. From day one, you are assigned an attorney who represents you. So if a creditor moves forward, you're not caught off guard. And you're not hit with surprised legal fees. Guardian litigation only gets paid when the debt isn't negotiated and the client accepts the settlement offer. This is about stepping in early while you still have leverage. Don't ignore the problem. Take control of it. Go to guardian. That's GuardianLIT dot com slash Ramsey right now, that's guardian LIT dot com slash Ramsey attorney advertising results may vary in no specific outcome is guaranteed. Next up we have Sherry and Orlando. Hi Sherry. Welcome to the show. Hi, I'm a little nervous. Oh, you're good. Don't be nervous. I'm 70 and I've been told by my son and so if I feel last week that my IRA is women only going to ask me about seven years. So he wants me to lower my distribution and raise the amount that's in the market. And you could just be getting a job. Well, I would love to get a job, but I'm on high flow oxygen. Oh, and I go, I go through a tank about every hour and a half. What about? And no, it's going to harm me. Yeah, I feel fine. I just can't breathe. Yeah. How much is in your IRA? 130,000. And how much do you pull from it? How much have you been pulling from it every year, every month? Well, I've been pulling out 2000 a month over the last few years. Okay. I waited. I had alimony until I was 69, so I waited. And so I've lowered my distribution to 1500 because my only other source of income is social 30. And how much is that? It's 1700 a month. On that amount, the 1500 and the 700. Does that cover your bills or tell us how much you're in the red? It's 1700 a month. And right now it covers all my bills. My son pays my mortgage. How much is the mortgage? 1700 months also. Okay, so he takes care of that. So you're, so you have the 1500 that you're still taking out. And then the 1700 basically covers all your bills. Yeah, okay. And I have an expensive illness, so I have to have Medicare, regular Medicare and a supplement. Yes, yes. And that's where the 1500s going. A lot of it, you know, and then AP away and stuff like that. What's your house? What do you own it and what's it worth? I bought it for $260 and it's down to you 200. Okay. What's it worth? It's probably worth 300 now at this point. And so when you talk to your financial advisor, was he saying you're going to run out in seven years if you continue to take the 3000 before you cut that in half? Well, I was taking 2000. Yeah. And so even when I told him that I go down and with the goal of going down to $1,000 a month in distribution, he still said, well, that's still too much. And I'm trying like FB and I'm trying ebay and I still and I'm trying that. But I've just guarded at it. It's going to take a while to build that up. What about customer service from home on the telephone? I could probably do that. I'm just not sure where to look for it. I haven't had many next block on some of the sites. I would look into that. I think that if you're able to, you know, have a conversation like this with us on the phone that probably be a great place to start. And I would just, yeah, I'd, you know, get on the internet and look for, you know, at the different job postings and see that. I've said on here before and again, this is not something that we endorse or anything. It's just something I did back in the day. There's a company called a rise that you can go on and do different customer service jobs. There's basically a whole posting of them and you can just choose which one you want. And you just need a headset and a computer and you can go from there and it's not amazing money. It's something you probably make a couple of thousand bucks a month doing that. That's all I need. I mean, I really live very frizzily. Right. Right. Yeah. Because if you got to the point, Sherry, where you don't touch this money, let's just say for seven years, which I know may feel like a long time. Then it doubles. Right. So you got them 260 sitting there. And, and because you're withdrawing about 10%, which is, which is high because the market in some years is doing great. So he's probably running a very conservative estimate, which most investment professionals do when you're starting to withdraw money. And we actually probably take more of a lenient case. But even if you were taking out 6%, you probably would be okay. But then that gets you around to a thousand dollars. And that's just basically just trying not to touch that 130 and you're just living off of the growth, which again, past years was 22% at one point. Right. Which means your 130 would grow, even if you were taking that 10%. So it's probably kind of playing that game. He may be a little aggressive on the seven years of you running out in seven. I don't think that's going to happen. But Sherry, if you can supplement your income and not touch this for even five years and find that extra thousand bucks a month somewhere else, that would be a game changer for you. Now, also he wants me to increase what I have in the market right now is 30% and he wants me to increase that to 40. Do you think that's reasonable? How can you, where is the money coming from? Well, I mean, the amount right now is the majority of it is in bond. Oh, oh, in your IRA. Oh, no, I would go all market. I didn't realize that. I didn't realize you had investment in bonds. Probably where a lot of your problem is. Yeah, because your bonds are probably only yielding 3% Sherry where you could be making the numbers I was using was assumption that you had money invested in the market. And that's at, you know, 22% one year. I think we're at 11% this year. You're going to get triple if not more by investing in the market. So Sherry, I. I would I know that probably makes you uncomfortable. I would at least go 80 20. Even if it's even if it wasn't at this age, even though I'm 70 years old. Yes, because you're having to live off of the return of what's happening. Now, I know that probably does for you out, but you you would have to write out right if there is a down year, too. But when you look, when you look historically, even over the last 10 years, your gains would be triple than what you have now. I would say you actually should be in the market more at your age, at it to have more of an aggressive growth pattern. You don't have the luxury of being a sitting in bonds. If you're trying to live off this money, right? Yeah. So I. Yeah. So he suggested to you 70% what was he? Because he's probably he's probably being. Did he say 40? Is that what you said? Yeah, 40. I'd go I'd go 60 because you're going to you're going to make so much more in the market. Maybe the one that put you in the bonds to begin with or were you working with someone and then switch to him or how did this happen? We'll then buy and got elected. I moved everything out. You did it. Okay. And then we got elected. I saved that. And I talked to my son at Christmas and he was telling me yes, mom, you need to be a little more aggressive. Yep. So I up I up to 30% and right now my return is only 8.5%. Yeah. So I think what's happened is you've allowed the market to spook you in different and the economies of the world. And really truly the way the way to build wealth while you're investing is you truly do. You have to set it and forget it once you commit to a strategy and we'll tell you what ours is. Once you commit to it, you set it and forget it. It doesn't matter who's in a presidential office. It doesn't matter what's going on. You are going to ride different waves. That is just part of it. So we're not going to sit here and tell you that there's never going to be a bump in the road. There is. But if you keep it invested, you don't lock in any losses. If you keep it invested, you continue to ride the wave and whatever dip occurs, you ride the wave until now we're back up again and above. So what I would do is what Rachel and I do, I would invest it across four different types of mutual funds. And if you don't, I think that the guy you're using is probably okay. But if you need somebody, you know, you can check out a smart investor pro and they can walk you through this. But you're looking for mutual funds that are outperforming the market really. And that's where Rachel got that number of over 10% is what you should be looking for annualized, right? Obviously in the previous years we've done way more than that. But yeah, growth, growth and income, aggressive growth and international is where you want this money. And at this stage in the game, I'm with Rachel like 80/20 fuels fair. Yes. So I just ran some numbers real quick, Sherry. So if you're 70, let's just give you 10 more years at 80. If you put that 130 and didn't touch it at an 11% return, that turns into $388,000. If you kept it in those bonds and they're getting a 3% return, it only goes to $175,000. So the difference there is astronomical. Now that's over a 10 year period, which I know is a long time. But if you just cut that in half right five years. So yes, Sherry, I'm with your financial advisor and your son. I would be more aggressive of putting more in so that you can actually be taking some money out and you're not tapping into that nest egg because you're not outpacing inflation even at this point. If you want to free up margin in your budget, one of the first things you should do is take a hard look at your monthly bills. Because every dollar you overpay is another dollar you don't have for reaching your financial goals. If you're overpaying for your phone bill, well that makes zero sense. And it's why I recommend Boost Mobile. Their unlimited plan is just $25 a month forever. No contracts, no hidden fees, no surprise price hikes. If you already have a phone you love, you can keep it and keep your number when you switch. And if you're skeptical, Boost Mobile offers a 30-day money back guarantee so you can try it risk-free. Listen, your phone bill should fit your budget not the other way around. Reaching your financial goals is easier when you can pay less for the same service. Switching to Boost Mobile now is just a smart money move. Go to boostmobile.com/ramsy and make the switch today that's boostmobile.com/ramsy. $25 forever requires customers to remain active on Boost Mobile and Limited Plan. The 2027 Ramsey goal planner is here and it's now available at the lowest price that we're going to offer at $35.97. So this planner is more practical than ever, hearing it brand new contents from Jade Rorschach, myself and Dr. John Zaloni, plus goal setting guidance and really clear action steps to keep your momentum going all year long. So do not wait. Grab it by August 23rd for just $35.97. This is the lowest it's going to get you guys. Even Black Friday pricing will not beat this. So go ahead and get your 2027 Ramsey goal planner. You can go to ramseysolutions.com/store or if you're watching on YouTube or podcast, you can click the link in the description. All right. Let's go to Keisha in Atlanta. Hi Keisha. Welcome to the show. Hi Jade. Hi Rachel. Hello. Hello. Welcome. Welcome. Welcome. How can we help? All right. I'm so excited. I just want to say thank you all so much for the advice that I'll give for being so transparent with, you know, with what y'all have been through and for giving the practical advice it. Anybody can follow. It has really changed my life. So thank you so much today. Thank you. So I want my question now because I always hear people say I've never said that so I'm just sorry. All right. So here it is. So my fiance is 57 years old. He makes about 58,000 years. He has about 60 Ks in retirement. And the only thing he has is a 50 K in a car. He owns his home that he owes roughly about 100,000 on. Me. I'm 46. I make 120 K a year. I have 88 K in retirement through my job. I have 50 K in mutual funds and I highly afraid of the counts I have 20 K. I have a rental that I owe about 46 K on and no other debt. I'm on baby still to 45 and six. I currently live in air property that will sell when I get married and moved to where he is. So we'll sell that and we'll also sell here's house and buy one together. So my question is he has the 50 K in the car, should we or should we have a wedding that's budgeted at 5,000 or less in July of 2027 or does he really, really need to focus on getting rid of that car loan before the wedding or to up the budget of the wedding. What's the point? I'm just trying to find out if you know, should we or is it financial rights for us to have a wedding although he's in debt. Yes. He's only going to be 5 K. No, you can. Yeah. I have the wedding but I wouldn't have a $50,000 car if I make $58,000 a year. That's the problem. Yeah. He needs to get rid of his car. When I talk about that and also tell me how, tell me about this $5,000 wedding, inquiring might want to know how you're about to do this. One of my good friends has a fabulous home and we always, I want to have an outside wedding. So that's always been something I want. But they've allowed us to have the wedding at their house and open up to us. Catering is really the only thing that we should have to pay for, that should be the most big. And address in a honeymoon. Oh, I am super simple. So my dress will be a standard, but basically, you got to have it on lock. Okay. Yes. So yes. To answer your question, I'm great with you spending $5,000 on your wedding, Qisha. So yes. Yes. The $50,000 car. I don't like it. I don't like it. It's bothersome. My heart says, oh, the car is actually paid, the total cost was $80, so the heart dropped. When I said a car is it? It's a 2024 Ford Mustang. Okay. And for $80, that was not going to be a car. You know, my driver, when he added some extra stuff, he had all the insurance, here's the girls in the room for them. So here's the question, Qisha. Are you guys, now hear me because everybody kind of has their wake up moment at a different point. Do you guys align on your philosophy on money, on debt, on wealth building? Because if you're looking at this car, the way Rachel and I are, and you're like, oh, this is wild behavior. He looks at it and goes, this is so smart. I love this purchase. I'm not giving it up. And I would do it all over again. You guys are going to butt heads down the road financially, and it's going to be tough for you. So have you spoken about this and gotten a glimpse of what you're about to walk into because you're financially, you're doing better than he is on paper, right? So yeah, I am curious your thoughts towards his financial ex. We actually, we actually talked about that over the weekend. And he says he's on board, like I said, he doesn't have any other debt, he doesn't have any credit cards. On board what? Well, there was a financial plan. So I told him about living debt free and building wealth, and look, my idea is, and what I would like to do, as far as I was building together, and no more stupid purchases, of course. And he said, we wouldn't make any decisions without talking to each other about it first. Okay. That's a good start, I think, but I think keep having the lines of communication open because it's very different to say, do you want to build wealth? Yes, I want to build wealth too. Do you want to have financial peace? Yes, I do too. But it's the how of how it's done, that, you know, because the truth is, a big part of this is, well, one thing that we have to do if we want to build wealth is we can't have toys that are going down in value that are this big of a piece of our world. And so getting, I think you're at the point where you can start specifying the conversations even more and saying, here's what I mean by that, it could mean us not driving $50,000 cars unless they're paid for, like that sort of thing. Absolutely. Absolutely. And I've gone through, and I've taught them FPU, and so before we get married, like I'm looking at any September, let's go on through FPU together so that he really understands how to have a care picture of where I want to go. Well, you've done, you've done an incredible job. Yeah, we'll give you the FPU, by the way. Yes, that'll be our wedding gift to you, yeah, and I think continuing to have those conversations because Jade's exactly right, it's the high level picture of things that is so, so important that you're like, we agree on that. And then when you start to actually get into the details of life and you actually have to go through with the actions, it's like, well, if it means that, then I don't want this, so that can be, that can be tough, so thanks for the call, though, Kitchen, and congratulations. Yes. All right, let's go to Mandy in St. Louis. Hi, Mandy, welcome to the show. Mandy, are you there? Yes, I am. How are you guys? I am Rachel. We're doing great. Thanks for calling in. How can we help? First of all, I just have to say that when you two host, and I'm listening on my earbuds, I have to see what you guys are dressed and look like because you guys are like classic, and simple, and it's like, it's like inspiring, so it's, I'm a long-term listener, and super excited to talk to you, ladies, so I'm 44, my husband and I are in baby steps six. We have a 12-year-old and a nine-year-old, and we make about a little over $200,000 a year. And I had wonderful parents, but I was raised with no financial knowledge, and they're wonderful people, but they're living off of Social Security, and a small pension, and they have no nested. So, we have the midst, and we're 15%, and we're doing well, but when I started to clean up my finances, I started looking at their stuff, and they had kittens, account, and money, and piggy banks and stuff like that, so we took their money, and put it in some index funds with our financial planner, and every year, our financial planner, they go with us to our financial planning meeting, and he turns the computer around, and he shows them, this is how much money you guys made this year, this is what you're invested in, and I just want to know, am I doing right by my kids? Is it too much for their age? It's very age-appropriate conversation to answer your silly little questions and things like that, but I just want to know am I doing stuff too early for them? - That's a great question. I'm not mad about that. I don't want that to be the only isolated conversation and interaction they have with their own money. I want them to also have some money that they can cash, right? Or that's on like a green light card or something that they can spend and use and save and give. Like I would want real life interaction with money for them, even more than the index funds. But if you do both, I think that's great. My parents did that. We had mutual funds and I want to say we were probably 13ish, maybe a little older than yours. And we would look at it and they would pull it. Now that was when it was mailed to you and like a big packet. So I think you're doing a great job, Mandy. I would keep doing that. I wouldn't change that part. I would just add in more interaction and their hands on their own money. - Yes, so that they're giving some of their money that they work for, they're saving some of it, they're spending some, I want them to feel the day-to-day interaction with money, not just the investment side. But no, I think we're both. - I agree. - Yeah, well done, Mandy. - Great job. (upbeat music) Hey guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And healthcare is one of the biggest expenses in most family's budgets. And that is why I recommend that you check out Christian healthcare ministries. CHM isn't insurance, it's a health cost-sharing ministry. That means members help pay one another's medical bills and they've been serving Christians since 1981. CHM programs start at just $115 a month. And here's why that matters. If you are paying more than you need to for healthcare, that money could be going toward paying off debt, building your emergency fund, or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now, new members can receive a 50% credit towards their first month of membership. Go to CHministries.org/budget and use promo code Ramsey. That's CHministries.org/budget and promo code Ramsey. (upbeat music) Next up, we have Terry and Orlando. Florida. Hi, Terry. Welcome to the show. Terry, are you there? Terry. Maybe she'll come back. Yes, yes, yes, yes, yes, yes, yes, yes. Oh, there he is. Hi, Terry. How are you? I'm doing good. How are you guys doing? I'm going to be on the show. Oh, thank you. How can we help? Long story short, my wife is having series talks about the fortunate because of my bad financial habits. Oh, no. Okay. Gosh. Yeah. How long have you been married? Two years. Two years. Two years. Two years. Okay. So tell us about your bad financial habits. Long story short, I don't really initiate when it comes to financial meetings. We'll put each other. I don't really talk about our finance too much. That's really on her side of things. Like, I'll make the money. Or, you know, my half or my share. And I'll just like share a count. I'll just like leave it there. And wherever the gist of it. I'll kind of, you know, do here and there. Like if there's something needs to be paid. I'll do it. But I don't really know too much about our finances. And then there are most recent situation that caused the voice talks. Is that there was like again, like she'll show process most of the payments. So, you know, and then three months ago, I-- What is she asking for from you? What is it that she wants you to do that you have been unable to do in her eyes? Um, like I said, initiate a process of certain payments. They don't have certain payments. I just got my car repote. And there's three months of late fees. And I just paid off all those together. And it got repote. Did it get repote because you simply were not on a payment? Yeah, you just didn't pay the payment or you didn't have the money to pay the payment. Which one? Wait, I didn't pay the payment. That's it. We had the money to pay the payment. And can I ask why? Just you forgot? Or you thought she was going to do like what was the reasoning behind that? Um, it was more just not to get too angry. I just avoided it. Okay. How old are you, Terry? 29. 29. And how old your wife? Uh, she's 27. 27. Okay. Before you guys got married, did you pay your own bills or what was the, how did things get done before you got married? Or was it just a state of mess? Out of the teenager. Not before you got married. You're 29. You've only been married two years. We've been together for almost eight years. Ten. So she's always, what you're saying is she's always taking care of that? Is that what you're saying? Not always. I'll do it here and there, but for most part, yes. Okay. And I screwed up and I avoided it. And that's the part what I'm trying to change. Uh-huh. Okay. And do you understand? Do you know yourself well enough to know why? What, what, what, what fear comes up in you that you're like, I have to push this thought aside to even pay a car payment. I don't even want to, that's, yeah, I don't want to engage that at all. Do, where does that come from? I was just, um, I don't think it's fear. Well, maybe fear is somewhere that I don't understand, but I would just say. Is it just pure lazy? I feel just lazy. I think, I think there's something else there too. Um, because you go to work. If you were a lazy person, you wouldn't get up and go to work. If you were all that lazy, you probably wouldn't be calling the show. I feel like there's clearly in certain areas, a level of intentionality that you have the ability to have. And so that's why I have a hard time just with, no, you're just a lazy guy. Yeah. How did you, how did you grow up with money, Terry? What was your home situation like with money? I came for a Caribbean family and it, like, that's already a story in itself. You came from what? Caribbean family. Oh, okay. Okay. Yeah. And I didn't really, like, think of what it is. You have support, but you don't have the same time. Yeah. And it really is like, if you mess up, it's strictly on you. Yeah. That's kind of how I've been. And, well, I say lazy to chalk it up because, uh, because I just, I mean, I, I only have a catabilly trick. And like, hey, I've been there so too. Do you have a baby, Terry? Yes, I do. You do. Okay. How old is the baby? Uh, he is a first week, two months. Two months. Okay. Sweet thing. Okay. Can you tell me, um, because I'm trying to get a sense because don't get me wrong. This is a big deal. And it's a frustrating thing. I want to know if there's some other things that are pushing harder on the divorce conversation than just who pays the car payment. Um, are you working regularly? Does the laziness show itself in other areas of life? Like, are you not working regularly? Are you not helping out around the house? Are there other things that are going on that's not money related that this is really just one of the many things? Or is this the only thing and you're like, okay. I got to get this one thing right. Just be honest. Um, I mean, to keep it in space, you know, I would say, you know, but, like, you know what, let me just have multiple things. But I would say it shows itself up in other ways or something like so. She said, you know, it's accumulation of these thoughts, bad financial habits. And I have been trying to change, but it just, it, it just keeps. Every time in the state, like the repo should bring up the worse. And like, the last time my car got reposed, she bought the worse. So I don't think this is, I'm going to be honest with you. I don't think this is a money issue. I think this is, I think you have some marriage issues. And I think you have some personal issues. And I think she wants you to step up, Terry. I'm going to be honest. I think I'd be pissed if I just had a baby. And my husband can't even pay his own car payment. Like, I mean, a little bit of me, Terry, he's like, you got to be able to do the minimum. You have to be a minimum of basics. Yes, you have to step up. And so there's, and I know you know that or you wouldn't have called. So you know what you have to do. But something is blocking you to go and do it. And I think that that is, that's work you've got to do, Terry. You've got to figure out what is going on. And in the meantime, you just have to have action. And you're going to have to rebuild some trust with her. Because I think she's just pissed. I think she's been doing this on her own. And she's been taking care of the money. Because you even said, I made the money and I put in the account. And she, that's her thing. She's tired. She wants, she wants a part. Yeah, she wants a teammate with her. And to be a husband that loves her, serves her. And what Jade is pointing out is exactly right. When you actually start fixing some of these issues and I will use money as the main one. Because that's why you called. And you actually start being so selfless. And you, you're like literally saying, this is what I'm saying. I want to do, but I know that's probably not the right thing, so I'm going to engage in this process that makes me so uncomfortable, but I'm going to choose to do it for the betterment of my marriage. And you do that, it's going to trickle through all the other areas of your marriage when you start to change in one area, because it changes you, Terry. And I think part of it is you figuring out what is that mental block for you. And if I were you, I would spend, you know, a couple hundred bucks a month and go find a counselor or a therapist, and I would, I do think money can be such an embarrassment, shame, fuel, guilt-ridden topic, and you're not feeling much relief at home, because you're right, threatening to leave, but to, to, you got to, yeah, you've got to work some of this stuff out of what is holding you back, because there's something there. And in the meantime, I do want to be clear, in my opinion, you still have to make some steps moving forward to take care of this baby. As that baby cried in the phone, I was like, oh my gosh, they got a new baby in the house. Like, like, you have a lot of responsibility, and you, and you're, it's doable, Terry, because the money's sitting there. It's not like you can't hold a job, and you don't have money. It's just following through with a couple of things. If you have to make a checklist or have reminders on your phone, it's due today, pay it. Whatever it is to put into place some actions, that's why, that's why I think it's got to be deeper than that, because those things, the logistics of it, is quite easy. I set the alarm, it rings, or I put it on auto draft. What about that? That's right. You're not even thinking about it at all, Terry. Well, you know, actually, the thing is like, when it came to the car payment, I really, and this is, I have to emphasize, I thought I did put it on auto pay. Okay. But what stops you? Let me stop. What stops you from right now, the moment you get off this phone, I realized it wasn't on auto pay. Therefore, I'm going to put it on auto pay this second, then I'm going to show it to my wife and say, "Hey, I realized I messed up the last one, but I put it on auto pay, I just want to show you that I did that is going to come out every month on the 15." And I would ask her, "What do you need from me?" In this such ask your wife that, "What do you need to see from me to help start making some steps towards rebuilding this trust?" Yeah. Because fight for this marriage, Terry. I've been with her all this time. And I don't want you to lose this. To me, this can be solved, and for the sake of that baby and everyone, do not let this Terry marriage apart, fight for it and do what you have to do to rebuild that trust. If you're waiting for the perfect interest rate before you buy a home or refinance, that moment may never come. 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In a MSID 1591, in a MS Consumer Access dot org, Equal Housing Lender, 1749, Mathery Vain, Sweet 100, Brent Wentona Z, 37027. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruz with Jade Warshaw, and we're answering your questions about life and money. So give us a call at AAA8255225. We have a Cambria in Virginia Beach up next. Hi, welcome to the show. Hey, how are you? Hi, we're doing great. How can we help? I'm wanting to know if I'm being selfish, wanting to go on a family really expensive and once in a lifetime family vacation. Oh, I like to pay. I like this question, too. Okay, what's the situation? So we've been that free. We've been doing Bay Ramsey for about 15 years. We used to teach it. We actually came out to the studio about 10 years ago and met Dave. And we're in a really good financial situation that my husband is retiring from the military in March. And next June, my dad wants to go to Sweden, that's our heritage and he's always wanted to take this trip. He's turning 80 and he wants to do a 12-day cruise that's about 5 grand, not including you know, anything, authorship, excursions or anything. He wants to stay a week afterwards. And he's going to take care of the Airbnb or whatever we stay in after. But it's still going to be, you know, a good like 12,000 trip. Yeah, I would say, I would, yeah, I'd aim high, 15,000, I would say, yeah, so where's the time? Well, with my husband retiring, not knowing what job he's going to get, what, how much money, you know, he'll be making, how much time off he's going to be able to have, you know, four months after starting a new job. And, you know, I really want to take this cruise. He's willing to do the week after. And so I guess my question is, do I, like he said, we can try and, you know, make it work to the best of our own? Well, you've been debt free 10 years. So tell us about the other money that you have. I mean, when somebody tells me that I'm waiting to hear of some, you know, several hundred grants laying around in different places. So we've actually, we've been debt free 15 years and we have over half a million in our rough IRA. We have, you know, several different investments on the side. We have about 30,000 that we've gained in, like we have, that we have, we keep our, our car funds in, oh, my gosh, it's okay. Just tell me how much, how much liquid cash do you have? Probably 60,000, okay, so 60,000 of liquid cash and we'll just say that includes sinking funds, emergency funds. Is that fair enough? Yes. Okay. And then you've got, you said the 500 and your Roth IRAs, any other money laying around? I don't think so. I might see some here and there and, like, crypto and whatnot that we, is the, where you guys out with your house. We are about 175, okay, and how much do you guys bring in a year, um, now, 105, maybe 150? And is he the only one working? Yes. I'm a singer. So I get here and there, but it's not, you know, it's, it's just so he's making 150. Well, he had to get anything with retirement when he, when he retires, um, he'll have about 5,000 a month to wake up. Okay. Okay. Okay. So, I mean, this is, I think I heard you say this is next year, like June of 2027, right? Yes. Yes. Is there the ability to save up the way you've done for your other sinking funds and have this off to the side? I mean, you've got a year to do it. Yes. Um, it's kind of harder because in April, we started, we decided to, we didn't know about this trip. Um, in April, we started remodeling part of our house because we decided we're going to stay here. We're going to, you know, we're getting all the military were staying here. We love our house. We've been here 10 years. You know, how much does a remodel cost? Um, we've spent almost 20,000 so far and we're trying to cashflow as much of it as possible. How much to go? And, um, probably another 40. Okay. So the good news is we know you guys can stack up money to, you know, to spend $60,000 on something at will. Like, so, so every month we, we put stuff in different funds every month and if we stopped doing that, there's probably, you know, there's probably about 2000 to 2500 that we could. There isn't $1,000 of like discretionary money that, that we choose every month where we want it to go. The other money I would seek to do this, I would seek to do this without touching. If you're going to do this, my goal would be, let's cashflow it. Um, let's do the remodel and we have to put a bow on that first. But let's look ahead and see what our money is looking like. When will we be done cash flowing the remodel? And then on, will we have enough money to do? and put the 15,000 aside for this. Part of that conversation also is what's he gonna do after he retires? And that's been part of this. - And part of his onboarding package for his new job could be slotted, "Hey, I do have a three week vacation that's been planned and it's paid for." So as I start my job, part of my contract of starting this new employment can be that this can't take away from any PTO. You know what I mean? Like you can negotiate some of that as with a new employer. - And we did talk about that. - Yeah, so no, yes, I think you go. - You have the ability to go. - You kinda, listen to me, I'm such a spender. I'm like, "Come on." - You have to go. I mean, your dad's a baby. - Yes. - Yes, I mean, seriously. - These are the things you cannot miss out on. - You know what's crazy is Winston's family. My husband's family, his grandmother came from Sweden from Stockholm and we did a, it's weird. As you're talking, I was like, this is me. We did a cruise with my family around the state, probably the same Baltic Sea type cruise. And we went to the cemetery, we're all of here. - Oh yeah. - Yes, we're, his great grandparents. I mean, it was amazing and beautiful. And like, such a, what it does. It feels like kind of a, Winston a lifetime tiding. And with your dad, who's 80, you won't regret going. So yes, figure out a way to do it. And this sounds terrible. Maybe I've been married too long. But I'm like, if he didn't want to do the cruise, he doesn't have to go. - If he didn't have to go, meet us over there. - Honestly, yes, that's not bad. - I mean, seriously, like, yeah. - And if his work can't, hold, he'll be okay. He's not crazy about going to Sweden, it sounds like. So I don't know, I would just, I would just go. Go with your parents. - He'll be going with Adam. - But when you've done, when you've done what you have to do and you've been debt-free for 10, 15 years, this is precisely the thing that you should be doing. - Yes, absolutely. - Exactly. - Money is a tool to use, to create a life that you love. And part of that is with your family creating memories. And it's not, you're not out of control. - You guys have half a million in retirement. Your debt for, I mean, like, it all checks off in my book. So I'm a green light, but I'm with Jay. You got a cash flow with it. You guys need to be disciplines and start saving, but you got a year, which is great. - It's really a time. - You're gonna be fine. (upbeat music) - A lot of banks are happy to hold your money, but Fairwind's Credit Union helps you make progress. Most people spend years focusing on their financial goals and never stop to ask whether their bank is helping them get there or just holding onto their money. The real goal is building an emergency fund, paying cash for your next car, saving for a home, looking at your finances and actually feeling some peace. That's why I love Fairwinds. Their smart bundle gives you up to 10 free, high-yield savings accounts to help you stay organized as you say for different goals. Plus, early direct deposit and no monthly fees. And you get support from real people who want to help you win with money. You can even get the Ramsey debt is normal, be weird debit card, which is linked to your free Fairwind spend smart checking account. To tell the world, you think differently about money. So look, if you're working the baby steps, your bank should be helping you move toward financial freedom, not just park your cash. Go to Fairwinds.org/Ramsey to open your smart bundle and start making progress today. That's Fairwinds.org/Ramsey, ensured by the NCEUA. (upbeat music) - Today's question of the day is brought to you by Why Refi. When private student loan payments start getting away from you, it can feel like you're paying for decisions you made years ago. Why Refi helps borrowers explore low, fixed rate, refinancing options and payments designed around your current situation. So go visit whyrefi.com/ramsey may not be available in all states. - Okay, today's question comes from Camilla in Illinois. She says, I often hear the advice that you need one million in your retirement fund or some other arbitrary number. Does that amount apply to a married couple or does each individual need to have that amount invested? I assume it's combined because it's a married couple. You're combining other finances. But what happens when spouses are different ages and retire at different stages? So I like this question Camilla. So first let me start out by saying the number that you need to retire comfortably is different for everybody. There is not one number that is a one size fits all. Now you do hear the number one million because obviously that's the first layer of the millions. And it's like if you can hit a million dollars. Yeah, that's an amazing milestone. So I think that's why people park there a lot. And you hear a lot on social media or even in the media that it is a million dollars enough to retire. Does a million dollars get you as far as it used to? I just think those are buzz. It's just a buzzy number. So that being said, what you're really looking for when you retire, just big picture, is you want enough in your nest egg that you can live off the interest without really having to touch the nest egg. That's kind of what you're shooting for. Obviously you want to be able to account for inflation in that equation. And that allows you to leave money to your children's children, right? That's the whole point of being able to build that sort of wealth. And some people are able to do that and some people aren't. They learn this later on and they have a nest egg and they draw on the nest egg and they draw it down, right? So what I would suggest is working with the Smart Vester Pro and figuring out what that number is for you. Around here, we've kind of figured out that 15%. If you invest that annually or monthly out of your gross income, that's kind of the magic number that should help you hit the number that you need for retirement. That's why we teach that. But the number truly is a real different for everybody. It is, yeah. And depending on your lifestyle and what you want in retirement age, some people want to go more simplistic. And they're like, I want to just, I want to downsize, they want to go, some people go to the opposite way and they're like, I want to travel more. So you kind of want to picture as much as you can what you want to do, but that 15% is the rule of thumb. And how's your family going? - Having no dead. - That's right. And if you have a paid for house and everything like it, that's the way to go. So yeah, the million dollars in retirement, yep, that will depend on your lifestyle and how much you're planning on taking out of that fund. I guess we can talk about, she also mentioned it being together or separate. - Oh, yes. So you do want separate retirement accounts because you want to get that tax advantage as much as possible. So individually, you both should have Roth IRAs individually, 401(k)s if your company has it or 403(b)s or accept, but if both of you have those going, yes, one of you will be able to draw out of there's tax free, you're at 59.5, if it's a Roth, before the other. And then maybe you guys live on that and the other ones decides to keep working or maybe they stop working 'cause you got enough there for the 59.5 year old to take enough out to sustain the lifestyle you want. So yeah, definitely different accounts, but from the mindset that we're still working out of one, we're seeing it still as ours. - Yes, it's ours together, but to your point, you can take advantage of more money going into those accounts, 7,500 each in the Roth or whatever your limit is for your 401(k)s, that sort of thing. - All right, let's go to James and Iowa City. Iowa, hi James, welcome to the show. - Hello, how are you? - Hi, we're doing great, how can we help? - So I have a question on behalf of my great grandma. She is debt-free, lived on a farm, has a home, has a cell tower on the farm that pays her monthly. I think it's like $1800 a month that she gets for having a cell tower on her farm. They came to her with three different offers, a one-time lump sum payment of $355,000 for 20 years, or a second option of $390,000 over installments, over five years, or the third option of $428,000 over 10-year installments. - What happens to the deal, if for some reason, over that period of time, whether it's the 510 or 20, and she moves what happens to the deal? - She will not be moving. - But I'm just saying, we need to know. I think it would go to the person who. - It would have to be part of the lease, part of the contract of the new sale of the home. Or even if she passes away, James, and you guys sell the property to someone else, I guess is that part of the language that if there's a new owner automatically, they have to assume this tower for X amount of years. - Yes. - Okay, gotcha. How much money does she have? - She has, right now, I think, like $50,000 in cash, but she also gets social security and she has a retirement. And I think her husband had something that she gets, he's passed away and she still gets something. I thought, no, if it was a military benefit. - Okay. - Do you know what the retirement is, I guess? - What, like, meaning what she has in retirement? I. I think it's just the $50,000. - Okay, and so she-- - Actually, no, I know. I don't know what's in her retirement account actually, 'cause she does have something saved that is in addition to social splitting, but I know it's not very much. - Okay, I mean, my knee jerk, James, I'll be curious what James has to say, is I always like a lump sum, because she can turn around and invest that, and make a great return. I think she'll get probably the most banged for her buck doing it that way, even though it's a lesser amount, I think she will make from a return perspective more, getting it within five years versus 20 years. - Yeah, I mean, that's basically what we would say with even a pinch in or something like that, if you can have a lump sum and reinvest it. - Or the lottery. - Or the lottery. (laughing) Go ahead and take it all. So that's-- - She's 82. - Okay. So she has been living her whole life off of what she gets at monthly. So this is something completely foreign to her. She's never heard of anything like this. - Sure. - The tire, my grandpa, handled it all. And he just wanted an amount of his face, basically, and they were paying him $500 a month. Now, her son, my uncle, who has passed away, got them up to $1,800 and now it goes up, I think 5% every five years. So if we did not take the lump sum, it would go up 5% every five years after the 20 years it would have gone up. - Yeah, I think she could make, yeah, I think she could still make more in the market, having a lump sum, and put, 'cause if it's every five years, would you say every five years it goes up 5% or every year? - Yes. Every five years. - Yeah, I think, I lean towards taking the lump sum of in five years. - I lean towards that too. Yeah, I think it's a no-brainer, honestly. - And have her sit down with, and you probably will help her James, 'cause you're kind of an advocate, for her, even in this call, sit down with a Smart Vester Pro. You can find one on RamseySolutions.com and figure out the best way from even a tax perspective of if she invests this money, 'cause it sounds like she's pretty low maintenance. She's probably not gonna use, if any of it, but from a generational perspective, what a beautiful thing, right, to be passed down one or two generations, to be able to help out family, right, with what this money could be. And so I would sit down with an investment professional and just figure out from a trust standpoint, or even a will, the taxes. I would want someone looking at this amount of money and just seeing how can we make this go the furthest. - Yeah, the best way. - The best way possible for her. And if she needs any of it, it is hers. I'm not just like, I'm not tagging that it sounds like she doesn't hardly. - She doesn't, it doesn't sound like she cares for, I mean, she's like, I'm good, I'm good, which is amazing. But man, what a crazy thing. - That's pretty cool. - Pretty wild. - Yeah, so great. 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So use promo code date night and you get four months of your annual membership for free. Come on, President Reagan had to negotiate with Gorbachev to get a deal this good. You just need a promo code. That's angel.com/ramsie to become a premium member of the Angel Guild, use code date night. Angel.com/ramsie promo code date night. (upbeat music) (upbeat music) Up next, we have Michelle in Spokane, Washington. Hi, Michelle, welcome to the show. - Hi, thank you for taking my call. You're welcome, how can we help? - I'm a 56-year-old divorced woman with no retirement saved in a mountain of debt. Baby step two. And my question is once I finally get to baby step four because I have no retirement, should I stick with the 15% of my take home to invest or should I maybe consider increasing that while I'm working on paying off my home? - Well, let's tackle one thing at a time because you got a mountain in front of you. So let's just once have a time. So tell us about the debt that you have, the consumer debt. Well, the consumer debt is, I owe my mom $1,500. I owe the IRS, $5,600. I have about $14,624 in credit cards. - Okay. - Did you say that number again? - Credit. - 14,624 in credit cards, a $23,976 car loan. And this is the scary one, $50,603 in personal loans. - Okay. Michelle, what's been going on? Did all this kind of escalate after the divorce? Or it's just been years. I spent a lot of almost 30 years paying off student loans. - Okay. - Sorry. - No, you're okay. - It's a lot. - How fresh is the divorce? - Oh, it's been years. I've been by myself with kids for many years. - Okay, okay. How many kids do you have? - I have three, the youngest just graduated. Nobody has student loan debt if I've done anything. - Good, that's great. - How much do you make a year, Michelle? - About 84,000. - Okay. - Okay, perfect. - How much do you see every month in your month to month? - Take home? - Mm-hmm. - Yeah. I take home about 7,000. I pay myself a, I'm self-employed, so I pay myself a wage that nets down to about 5,000. And I try to take another 2,000 from the business each month. - Okay. And you're not investing right now, right? - I'm not investing at all. I've been seven months into baby step two, so I am making progress. - Good for you. - Very good. - How much debt do you have being thrown at? I'm sorry, how much cash per month is going towards paying off debt, 2003? - I just got to the point where I can put 2,500 towards the debt. - Good, okay. Fabulous. - I'm free. I have freeed up $500 to move. - Yes. - I started with about 2,800, so. - That's perfect. - I'm moving forward. - Okay, so within three months, the IRS and the $1,500 loan should be close to paid off. - What's my plan? - Perfect. - Okay, great. - What kind of work do you do? Are you able to do extra work? Side hustle, add more to this? - I hate to say what I do for a living. I'm a bookkeeper and a accountant. - That's okay. - Okay, listen. - I'm going to change it to that one, but you're fine. - Yeah. - Yeah. - I know, but I should account in so the ones that make it. - Right, no, you're fine. You are fine. - So, can you? - I haven't been saying, I haven't been saying no to work. I've been working myself quite a bit. I don't see the need at this point to get a side hustle because I have the potential to bring in more doing work. - Okay. - So, I would quantify that because sometimes you can take on more work, but you may not see the dollar side of it as soon as you want to, so I would really put a goal around how much do I need to earn per month to hit this goal and how many clients does that amount to so that you are very intentional about going after that money. And then like Rachel said, just keep going smallest to largest by balance. And that's how you do the debt snowball. And like she said, in three months, once you've paid off your mom and the IRS, now whatever those minimum payments were, if you were making those, that's now going to go on to these credit cards. Is it one credit card or several smaller ones? - It's two. I've paid off all the little ones. Everything's closed. - Okay, good. - So, I think if my math is right, Michelle, and again, if you throw on some extra money, I think in two and a half years, this could all be gone. And my hope is too, with this car, and that includes possibly selling this car. Do you know how much you could get for it? - Maybe 27,000. - Oh, okay, that's great. - You owe 23, right? - Almost 24. - Okay, I would get a couple of thousand bucks, Michelle. Sell it, put that together and go get an $8,000 car. Because that's going to speed up this process so fast for you. Because I think the urgency of retirement savings is on your heels. And so. - If you can wake up call, ladies. - Yes, for sure, but if you can be out of debt, let's say by 59, okay, for the sake of our discussion, and you start throwing, I'm using our retirement calculator right here, and I'm gonna say, do you have anything in retirement right now? - Nothing. - Nothing. - Okay, let's just, I'm gonna go big here, just for the sake of all of it, okay? So let's say you start investing at 59, retirement age is 67, and let's say you put three grand in a month, like you are just throwing money in this account. - Oh right, okay. - And you're saying a number that I've been thinking in my head, and at least my time is matching what the two of you are proposing. - Well you're just taking what you were putting on debt, and now you're turning around and investing it. And what you're gonna have, you're gonna have 458,000 dollars. - At that point. - By six. - By six is by 67, yep. That's pretty wild. That you go from negative to positive, to almost half a million dollars in the show. - So stay with the 15% then and just continue to work on the house and investing, okay. - Yep. - Tell us about your mortgage. I'm just curious. - Oh, I owe 217,000 dollars. My house payment is 1,610 a month. - Okay, okay. - Yeah. - Yeah, I probably was a little aggressive on the three grand a month, 'cause you do wanna throw some of that at the house. So maybe a little less than that with a paid off house. I got too excited for him. - Well, it's still my. - I needed to hear that. I needed to hear that. - I just need to know that there's, yeah, and you get to make the decision what you want. You find the fastest way is to get the house paid off and on, but with your age, if you said I am gonna throw more at retirement and keep my low house payments, that could be your decision. I'm not saying to do that, but I'm just thinking if you're aggressively throwing some money and investments, I think that that, I think there is hope. Let's just say that. However, you kind of slice the pie. I think you're gonna be good. - Thank you. - Yes. - Thank you. You're really overwhelmed and fearful. So thank you, ladies, both. - Yes, and you're a good mom, Michelle. I mean, even the fact that you were like fighting hard for these kids not to have student loans, 'cause you said you took so long to pay yours off, and you're like, I don't know, I can't do that. And there is a wake-up call. And everyone has that moment, Michelle. We kind of call it the I've had a moment where you look up and you're like, I'm 56. I've worked so hard. I've started my own business. I put my kids to college, but like, what about me? You know, you get to this point and it makes you mad, but that anger kind of creates that grit to get out of this. But it's, this is doable, right? I don't see you in consumer debt for six years, right? I mean, you could really make a lot of progress. And I think you're feeling that. So thanks for the call, Michelle. We appreciate it. Us. - It's gonna take a lot of intentionality, but I think with what we teach, there's always a measure of hope and there's always a measure of increase that can be gained, right? - Yes. - She may not have a million dollars, but it's better to have 458, that's right, right? Then zero dollars. So there's always a better measure of hope that can come from doing this. - Yes, and that is a pro to owning your own business. I mean, that is one thing because you can kind of, you can set your schedule. And even, you know, I mean, I know plenty of people in their seventies and they're still killing it. - Yes. - You know what I mean? Or if you choose to. - Yes, yes. And you can kind of create this environment that you need in order to create, you know, have income on the side and you're not just dependent upon those investments at 67, too, right? That could be an option. So it is tough. I think it's a, it's probably a wake up call for a lot of people to Michelle to realize, like, yes, the day is coming. Like it's happening. And the sooner you start, the better off you're gonna be. (upbeat music) As a dad of young kids, I'm starting to think a lot more about the world that growing up in and how I'll help them make sense of it as they get older. And that's why I like WorldWatch, a video new service for preteens and teens. Because one thing I know for sure, if you don't teach your kids how to understand the world, somebody else will. And these days, that could be TikTok, YouTube, Instagram influencers, or whoever happens to show up in their social media feed. WorldWatch is 10 minute videos, help young people understand what's happening in the world through a Christian worldview without all the outrage, negativity, and noise that is everywhere these days. The reporting is factual, engaging, and designed specifically for preteens and teens. And WorldWatch creates opportunities for something every family needs more of, meaningful conversations. Instead of just reacting to headlines, kids learn how to think about what's happening in the world, and parents get a chance to keep those conversations going at home. Because when my kids are old enough, I want them informed, not overwhelmed. And right now, you can get a 30 day free trial. Just go to worldwatch.news/ramsie or use promo code Ramsey to get started. That's worldwatch.news/ramsie. (upbeat music) - Well, we wish we could get to every call and question on the show. But if you have a money question and you want an answer for your situation, head over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained on Ramsey Principles so you can get an answer the same way that we would answer on the show. And I use the CODAJ for something I was looking at and they continue to update it. Like they are really iterating this, like to make it as good as possible. And they'll ask you some questions to get a better insight into your situation. And I was like, that's what I want to ask to learn without that. As the question comes up for me, I was like, that's probably what I would ask on the show. So it really is, it is amazing. So go and ask your question today at RamseySolutions.com or click the link in the description if you're listening on podcast or watching on YouTube. All right, so let's go to Luke and Billings Montana. Hi Luke, welcome to the show. - Hi, how's it going? Thanks for taking my call. - Absolutely, how can we help today? - So we, my wife and I are in baby steps six. And I'm having a hard time convincing her to cut up all the credit cards and let the FICO score go to zero because she's nervous when and if we go to refire house for a lower interest rate because we use our FICO score basically to get our house original. - So it sounds like she's missing a piece of information, I think, because in her mind, she's thinking if we have a zero credit score, we won't be able to get as good of an interest rate. - Yup. - Yeah, and I determine it's like, yeah, that they just can't pull up the information 'cause you've been out of debt and closed all the accounts and that only takes about nine to 12 months. It's not that long. - That, and that's what I've told her and the whole manual underwriting or whatever it's called. - Why does she believe it? Has she said, this is the reason why I don't believe that that you're telling me the truth or that that fact is real? She just says, we use it to get our house originally and it took so long to get it to a good score and I just don't wanna close it. And I'm trying to explain it to her a few times and. - I think you guys are on baby steps. It's how much further do you guys have to pay off your house? - We just bought it like six months ago. So we owe like five, 20 on it. - And she thinks that you guys are gonna refinance because she have a belief that it's gonna go back down to two percent interest rate because it's not. - Yeah, right now we're at six. - Yeah, and that's pretty normal. I mean, from what everything that the Fed is doing and all that, for the foreseeable future, nobody is saying that it's gonna go down significantly. It's probably gonna stay pretty steady for a long time 'cause remember two loops that the two percent that we were living at was an unheard war. - It was a result of. - Yes, all this other bargain that was happening and so it's corrected itself. And so six percent actually in the grand scheme of mortgages is not pretty good. - That bad, right? It's bad for us 'cause we've been used to two percent. But it's probably, I mean, most real estate experts are saying it's probably never gonna go back to two percent. - Uh-huh, gotcha. - But I do wanna challenge you and I don't. I think it's intellectually fair to do this in a marriage that when you're talking about something, if one person is talking about it from a perspective of facts and the other person kind of refuses to do their side of the work of the argument which is, if you're doing your side which is here's the information I found, she needs to do her side which is I need to read the information or I need to see it can't just be on a vibe but needs to be on. have a fair intellectual conversation. And I would challenge her on that. I'd say, honey, I've looked into both sides of this. I understand the credit score side of it. And I understand the manual underwriting side. I think you're only looking at one side and I would really love for you to just read up on this and see that I'm not making this up. This is really here. There's two options to inform your ability to borrow money and you're stuck on one. And there's a whole other option here that's actually better for our lifestyle. And I think that's okay to do and just challenge her. (laughs) - That was a good idea. - Yeah, so that. - Yeah, I got pretty much, I mean, I've been listening to you guys to show for a little while now and the more I dig, the more I see the more I'm ready to cut them up. - Yeah. - But she's not ready. - Does she use it on a monthly basis and pays it off? - No, they're all paid off, they're all at zero. We have our emergency fund and everything. - Okay, so we invest it. - She needs to know though, that score will go down if you're not actively using debt. - Yeah, it will. - They will penalize you to that. - Yeah. - So if she's going her plan, it's gonna slow, it's gonna go, it's gonna die a slow death versus just, you know, taking care of it now and then it's all fine in about nine to 12 months. - Yeah, that's another really good point, Rachel, because she's got, if she wants to do the credit route, she's got to know, hey, it's not just having one line of credit open, right? It's, they're looking at the different types of credit you have, how long you've had the credit, what utilization of the credit, right? There's all these different markers that they're measuring. So that's a really good point, Rachel just made. - Yeah, and she's more of like the use it for, use it for a tank of fuel, pay it off. - You know what I think? I think it's a comfort mechanism. - I think it's just a comfort thing. It's not based on any facts, it's not based on math or, you know, it's just, this is what she feels comfortable with. And I would challenge that. - Yeah, and she has even said before, you know, what if, what if we need it for something then? It's like, we got 40K in the bank. I think we're probably fine. - Yeah, when you're used to this like false safety net, which is what debt is, right? I mean, this is what banks and credit card companies pray for. - They love being in someone's wallet for the just in case, because the just in case happens. And so this is what they're wanting. And I think, you know, when you said you've been listening for a while, part of my frustration with that whole industry is they take advantage of people. They sit there and market themselves like they're helping you and they're not, because the people that actually cannot pay their credit card bills. And that now it's gone up to $1.4 trillion in credit card debt. And Americans that are really struggling and really are living paycheck to paycheck. Everyone else gets to take advantage of that with the points and whatever. And then we've been brainwashed with this whole idea of the FICO score and the credit score. And yeah, do you have to jump through a few more hoops to do something different? Yeah, 'cause you're not playing their game, but it still can be done. Like, we both have great, incredible lives. - I know. - And it's fine. Like you really can live without this, you guys. You really can and have complete autonomy. And MasterCard isn't the thing that catches your emergencies. It's you that you have built up a system within your family that no one has a say in. And it's beautiful. - Yeah, I always say, it's, I mean, to your point, your brainwashed hearing this, seeing the commercials. And so, you know, that's the grace that I have for her is we all grew up that way, you know. - That's right, that's right. - Never leave home without it, right? - And the truth about that is there's so much money and revenue and profit tied to that style of borrowing money for a mortgage, is usually what people are thinking of. But you don't have commercials about manual underwriting. Like nobody's talking about it, except us. And so for her, she's thinking, I've never heard what you're saying. But I hear, you know, the majority of the world, the majority of the noise is talking about it in this way. And I think sometimes you do, you have to be willing to go against the grain, do your research, not let it be, oh, 'cause so and so set up, but actually look into it and look into the facts and dig in and know what the heck it is that you're talking about. - That's right. - And not just make stuff up. - Yeah, so if you, if you do get out of debt, which is our baby step two, where you get out of all consumer debt, and then baby step three is you save up a fully funded emergency fund. And then you want to go buy a home you guys for your first time home buyers. That's baby step three B, and we say to save at least a five to 20% down payment. And if you have been out of debt and you've closed your accounts, okay, you've closed all your accounts. Now, if you have a mortgage, it's a different story 'cause it's gonna be there. - Sure, it's gonna stay open. - It's gonna be there. But if you don't have any debt within nine to 12 months, you guys, your credit score goes to what's called undetermined. They cannot determine your credit score because they don't have any debt information on you because there is no history to that point for them of how far they go back. And so they do a process called manual underwriting, and you have to be current on a job for two years, you have to show proof of paying bills on time like your cell phone insurance for two years. - Yes, mine. - Yes, and so there's some, there's elements of this that you get some paperwork, but you can still get a mortgage, even without a FICO score. (upbeat music) - Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people are surprised by how affordable term life really is. Even if you're not in perfect health. Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be, not as under insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Xander for straight answers, competitive rates, and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote, that's zander.com. (upbeat music) - Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. I am Rachel Cruz with Jade Warshaw, and we are answering your questions about life and money. So give us the call at triple 8-825-225. All right, let's go to Macon, Georgia, and we have Poncho on the line. Hi Poncho, welcome to the show. - Hey, how you doing, man? Thank you all for taking my call. - Yeah, absolutely. How can we help today? - Yes, man. So long story short, and I keep it brief. I've got a, I'm basically retired from two careers. I'm 41, so I feel like I've won in life, but I'm gonna go back to school. I figured out something I wanna do when I grow up, and I've got, I've got really no debt. I've been working on the baby steps. I got my emergency fund fully funded in the high yield savings, but I have some chunks of money from some pensions and a 457, it was a public safety, 457. So I don't have any penalties. So my question for y'all is the only real debt I have is my mortgage, and I just wanna know what should I invest, should I pay it off? What do y'all think? - Well, I wanna know, I mean, you said you've retired from this job, what will be your income moving forward? Will you be receiving some sort of retirement income from these jobs, or tell me more about what your income is gonna be, and that'll help us. - No, I'm okay, absolutely. So I am retired military, so I do have a pension I'll get for the rest of my life. - Okay, how much is that? - It's just under 50 grand a year. - Okay. - And I do some part-time stuff now. Actually, I just retired a couple months ago. I wanna go back to school through the VA, either I'm gonna learn a trade. So I'm just re-inventing myself, but the advice I got was I'll take all this money and put it in an annuity, and I'm like, I don't think Miss Ramsay's a big fan of a new annuity. - No, I wouldn't do that, but I would be interested in investing on my own, and really, you're to that point, if you've got three to six months in an emergency fund, what you did say you had some money, I would double check and try to get it, you know, six months is a great place to start, and then from there, yeah, I'd be investing 15% off the gross, so off the 50,000 a year, that's around $625, and I would start with a Roth IRA. I'd, you know, max one of those out, and then from there, you know, go on to the next thing. If by that point you do have a job that is offering a 401K, that's a great place to go. If they have a match, I'd even go there first, and do your best to spread this investment around until you get to the 15%, the $625, but that's not an annuity. That's invested through mutual funds in the market. -Yes, ma'am, yeah. So I have some money from a pension. I have some money parked in an IRA now. But I just got different chunks of money in different spots. And I listened to this whole spiel about annuities. And I said, wait a minute. I said, I'm a follower of Dave Ramsey. -They didn't like that, probably. -Oh, no. And they're like, oh, well, you know, the annuities, the old ones had a stigma. And I'm just like, oh, I just think passing the smell test. -Yeah, well, the problem with it is you get, especially like a fixed annuity. You get stuck in a situation that has low interest. It's low risk. But it's just your money could be doing so much more. There's usually a lot of fees attached to annuities. In some cases, some good commission for the guy selling it. -Of course. -And so, yeah, there's just probably more. Okay, so I am curious. You said you got money in different places. So you got. You have your pension coming in. You have your emergency fund and a high-yield savings account. How much is in there? -Just under 12 grand. -12 grand, perfect. Okay. And then what else do you have? What's in your IRA? -Well, so it's being moved from the county side. I want to say it's just under 48 or 50 grand. -Okay. And what's that invested in right now? Do you know? -No, ma'am. I just put it in a rough kind of like a holding pattern. -Okay. -I have a 457. I've got. Geez, I got about 95 grand in there. -Okay. -Which I have access to. I mean, there's all pre-tax. There's tax deferred. But there's not going to be a penalty. -What's that invested in, do you know? Do you know what you're making on that? -I want to say my ROI last year was about 19%. -Okay, that's great. Yeah, so I almost would just park it. I mean, it's doing great. If it's invested in something long term that you're not happy with, like, you know, mutual funds or an index fund, you could always cash it out and move it. But then you may. And you said there's no penalties or taxes with that. -Well, there is taxes, unfortunately. So that, you know, if I were to just cash that out and put it toward my wallet. -Yeah, you're going to be paying. Okay. -I would probably leave that because that feels like it's doing well. Okay, what else? -Let's see. And I have a couple small issues that I'll get. But not till, you know, 55. -Okay. -So those are your four big buckets, really. The retirement coming from the military, your IRA, the 95,000 sitting. And then the emergency fund. Okay, well, I think you're doing good, Ponch. I think if you can cash flow school, if you can go work. Or no, no, it's going to be paid for because of the military. So, yeah, go get. I think go get a degree. You just have to be able to live. I mean, my goal would be not for you to touch these investments because you are 41 and able to hopefully live off maybe this. Whatever, 47,000. 47,000 that comes to you monthly or maybe get a job while you're in school, right? And find a trade and kind of create the next season of your life, the next chapter of your life. -This, man. I was talking about a true, true blessing because I was, you know, I was pretty freaking poor, my dull life. And I'm like, man, I've been given this golden opportunity and I worked my tail off, but. -Yeah. -I'm not the sit at home and do nothing type of guy, but I also. All these chunks of money, I don't want to squander it. -No, no. -You're doing better than you think you are. And the truth is you should have a couple of chunks of money. Like, the way you have this divided is just right. Everyone should have an emergency fund in a high yield savings. You've got that. Everyone should have some sort of retirement nest egg, whether it's an IRA or Roth IRA. Most people have some sort of a 401k or a 403b in your case of 457. And then it's just a blessing, you know, that you're receiving some retirement off of it, you know. -Yeah. -Early too much. -So, you're exactly right. -Where you should be. -Yes, ma'am. -Yep. Great job. Well, you know, we're going to send you King Coleman's book, Find the Work Your Wire to Do, because there's a great assessment in the back. And it may just help narrow down some ideas for this next chapter poncho. But I think the next step for you is college or degree or trade school. You know, whatever you choose, that next step in education to get the next job. And then when you have that next job, like Jade's saying, invest 15% of that active income coming in and be paying off the house if you have your house. And yeah. And then that's what that's it. -So, it's not that much complicated. I know it probably feels like a lot. -Simple. -And well done. Thank you for your service and everything you did for this country poncho. We so appreciate it. And it's amazing that you can go from what do you say. I was just so poor. -Just broke. -Broke. -To what you've got now. It's very, very impressive. So keep doing what you've been doing. Yeah, nothing's wrong. I would stay away from the annuities. So I'm glad you called in. [ Music ] -Hey guys, Rachel Cruz here. And I love summer. There is more fun on the calendar, more time with your people. And way more chances to make memories. But you know what else there's more of? Spending. Oh, between the extra groceries and gas and camp fees and family trips. It all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the EveryDollar budget app. Because it helps you plan your money, track your spending and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the EveryDollar app in the App Store or Google Play and start for free today. [ Music ] Are you sick and tired of working so hard and having nothing to show for it? Well, that is normal. A normal is broke, but you don't have to live that way. Our EveryDollar budget app helps you find extra money every month and build you a personalized plan to beat debt and build wealth. And in just 15 minutes, you'll find thousands of dollars of hidden margin and it's going to feel like you got to raise. So don't live normal when you can live like no one else. So start EveryDollar for free in the App Store or Google Play. All right. Let's go to Tony and Cincinnati. Hi, Tony. Welcome to the show. Hey, guys. Thanks for taking the time. Take my call. Absolutely. How can we help? I have a question for you. I'm 55. My wife is 52. And right now we pay extra on her house every month. And we're on track to have it paid off in about eight years. The mortgage is a 2.75. I have interest rate. And I'm wondering if I should not be paying the extra and instead using a portion of it to invest. Oh, yeah. It's the common question that we get. Yes, the classic, the classic question when it comes to paying your house off early. I mean, the truth is paying off your house early is more than just a math question, right? You do want to go into reach retirement without a mortgage and that's a big piece of this. And I will say this, there are worse things that you could do, right? You could say, yeah, I just want to do this and invest money. But you also want to have a pay for mortgage in eight years. And so I do believe that a major part of wealth building is not just money and retirement, but also having the peace and security of having a paid off house. And so I would stay the course and I would put the extra pay off the house in eight years. And then after that, you can go hog wild on investing if you want to. Well, I've been just, I just had my head down. I continued to plow forward. And then I recently started thinking and I actually doing the right thing. Sure, paying this little mortgage rate off early. Right. Yeah. And if you look at it from just a math perspective, Tony, sure. You're going to make the spread of 10% in the market. If you have a 2% on your home on interest that you're paying versus 12% you could be making, right? And just like round numbers. So from a math perspective, that is true. But what what is not calculated in the Excel sheets that you create is peace of mind. It really is that it's that it is this idea of having complete autonomy over your life and your money. That if whatever happens, they can't take your house. The bank doesn't own you anymore. There is something about that freedom that I promise. But almost everyone we talk to that pays off their house does not regret it. They don't want to go back in and we used to make the joke all the time. You know, if you hate having a paid for house, you can go get a second, you know, go get another mortgage. mortgage. If you wanted to, I know that would be it. Now, 6%, so I know that argument doesn't last as much anymore, but there's just, yeah, there's an emotional spiritual side of money and debt that we talk about that a lot of people don't. Again, you can't factor that into your calculations because it's not there. But yeah, I would say stay the course, I think, having that paid off home, and then you could go back and reinvest your mortgage payment every month for the rest of, you know, retirement if you want to do that. But yet, having that paid off house is a game changer. Just having something that's truly yours. It's yours. No one can take it from you. Yes. All right. Let's go to Cody in Wichita, Kansas. Hi, Cody. Welcome to the show. Thank you for taking time to answer my call. I appreciate you. Absolutely. Yeah, so I am 23, I own a fencing business, and I'm getting married in about three months from now, and I congratulate him. Congratulations. Living. Thank you. I need somewhere to live, and I can't run my fencing business just out of any place to rent. I can't find anything. I'm just wondering, would it be stupid to go borrow about 200 to 250,000 to build a house? I would not. I would pause just from a couple of things you said kind of gave me like a head tilt. When you say there's no rentals that I can have to run my business out of, when you make big statements like that, it shows to me that you may not have done all your research. And when you start to limit your options because of a belief system, then you pin yourself in a corner where you're like the only thing I can do is build a home to make my life what I need it to be. So I would push against that philosophy, I would implore you to be a little more creative in it. That's thing one. Thing two, I would not build a house my first year of marriage. There are so many decisions, so many things that change in life. You guys just need to enjoy, enjoy life as a newlywed at 23 years old, you're running your own business. You're stressed on your Cody already. I would get creative, find a rental. I don't know if you even have to rent somewhere else to run the company out of. I don't know what that looks like for you, but I would do that for a year. And then if you guys look up in a year and say, hey, we want to make a move, then that's when I would start talking about doing something. And then Cody, let's even talk about since I agree 100% with Rachel, but there is going to come a time when you do want to buy a house and you want to be ready and prepared to do that the right way. And there is a good, better and best way to do that and we'll tell you the best way, which is honestly to be out of debt to have three to six months of expenses. Do you guys have that right now? Are you guys at that step by chance? No, I am not out of debt, so right now I am actually in debt quite a ways with your fairly good asset, I own a piece of property, I own about $430,000 on it, it's worth about $700. What kind of property? It's just pasture land, I live on a farm, it's 168 acres, so I have cows that I obviously run on that that helped me make my payment, but I also would like to pay it off. Then I have one vehicle note for I think $30,000 or something like that. What about your wife to be? She doesn't have any vehicle loans at all, she is never dead at all. Okay, so yeah, I'll be honest with you, if I were looking at this, the first order of business I'd pay off the car debt, and then this land could be the difference between you guys having a house sooner than later, unless you're thinking you were going to build something on that land, what was the plan? Yes, so actually my dad has a bunch of land as well, and he'd deeded me over just 10 acres to my name, if we were wanting to build a house, he would deed that over to me. Okay, and that'd be separate, that'd be separate than the pasture that you told us about? Yes dad, so I would have $107,000 again. Yeah, I love the idea, because you've got this business that you're building that apparently needs a special space for it. I might love the idea of at the right time offloading this pasture land, because that might be the money that you need to build something. Hard of it. Yeah, how many acres is it, Cody? 168 acres. So I mean, yeah, going forward, it's a great asset that you have. So I would make it a goal to pay off the car, because how much will you guys be making a year together? A year together, I think, the business is only about two years old and this year I'm projected to make about 150 to 200,000 good job. And then I, she was at a bank, but getting ready for the wedding and stuff like that. I don't know, yeah, she's not, she's quitting her job, but I'm sure she'll start. So I would guess we'd be making around $200,000 or something like that. 200. Okay, amazing. So yeah, I would make it a goal, Cody, to pay off the truck. You guys get a fully funded emergency fund of three to six months of expenses. And I would, I would start saving on the, after that, a check on money, because I do think, you know, building on that land, I think that's great. If your dad deeds over some, I mean, that's a, that's a gift for sure. But I would not, I would do this in maybe two years. And then part of, if you need more money, pass the savings, which you will, I might consider selling some of the acreage of the property to help build this. And then you guys are going to have a massive loan of $430,000 that you're going to have to work to pay off. I mean, that's, that's a, that's a lot of risk, Cody, I'll just throw it out there. I know it's working out right now, but I'm just telling you, that's a lot of money to pay off. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at ramseysolutions.com/agent. If this show has helped you think differently about money, will you share it with somebody in your life? One of the best ways to spread the word about the show is honestly you guys, it's the word of mouth of how it's helped you, because we do, we want to get as many people as possible to a place where they have financial peace. So make sure to share the show with your friends and family, we would greatly appreciate it. All right, let's go to Anne and Colorado Springs. Hi Anne. Hi. Thanks so much for taking my question. Yes, absolutely. What's up? Well, mine's a little bit different. I'm not calling from a personal standpoint. I'm calling on behalf of my job. I am an executive director of a small nonprofit in rural Colorado. There's a little bit of a backstory that may be help understand things. We had to purchase a new facility five years ago, so we could open a free medical clinic. And prior to that, we did not have a mortgage whatsoever. And we only bought the new building with a promise from a grant funder that after a year, they would pay off the remainder of the mortgage. So we went into it not thinking we were going to have a mortgage for very long. And within that year, when I approached him again, my previous position as I was a fundraiser, it was when Roe v Wade had failed and they no longer supported pregnancy resource centers, which is what we were. So now we got stuck with a mortgage. Oh, no. The grant didn't go through. Oh, man. Yeah, man. And the original mortgage was only for five years and it was a great interest rate. It's for 10 years total, but the first five years was like 3% interest. We did not realize that at five years that it was a variable interest mortgage and it jumped into 6.7%. Shoot. Shoot. Yes. So that leads to where we are now. I took over as director two years ago and inherited $50,000 of debt for the center for the nonprofit. And by the grace of God, we have eliminated all of that debt. And for the first time in 40 years, we actually reached our first goal of having a six month operating buffer. Oh, my God. and well done you balance that budget on white I like your style. Oh I balanced it. She's like I'm getting there. This is a new problem for the board and myself to have because we've never had anything over like we were we were nervous to pay the electric every month and now we have a full six month operating cost which to me I hate that but I also hate living in fear that we're not going to be able to provide our services and pay bills. So with all that done does it make the mortgage manageable or tell us where the problem is? Well the mortgage is manageable because I've I've shifted some things and I've actually rented out space in our building that pays for the mortgage but it has a balloon payment due in five years. Can it be refinanced? Well and that's the step that we are right now so that's that's my big question is we are we looked into refinancing we found an amazing Christian company that's going to help us refinance it will drop our mortgage rate by $200 a month. Great and there's no more variable rate which is the biggest. There's no more variable rate and in fact we can revisit it every I think we have that for every three years that if the rate is lower we can reamitize it. Okay that's fabulous so where's the problem? The problem is is we have kind of a split opinion on my board of directors and that split is is to not because we owe 220,000 on our building and they think the the part that is disagreeing with the plan right now thinks that we should put every penny that we have directly to the mortgage. Including the six months of buffer? Yes and how much is in there? We have 157,000 right now in our buffer. Okay. Okay. Technically about seven and a half months. Yeah. I have no problem throwing anything over the six months at the mortgage and try to get it paid off as quickly as possible but I'm really nervous not to have that buffer. So what you have to win votes is that the situation you need to you need to be lobbying for votes. We want to make sure that we're doing the right thing. I mean I'm sure this is the first problem for us that we've ever had. Uh-huh. We want to make sure that we are honoring God and being good stewards because we depend on our donors and one of the point of view is it's not honoring toward donors to have anything in savings but I'm like to me that's being a good steward to make so that we can keep going, you know, beyond today. So should we keep our six month buffer and throw anything over that at the mortgage so we can try to remove that debt as quick as possible or should we throw every penny at it to try to erase the debt? No. I could even see a split and personally. If you went down to three months, I wonder if you guys could get some agreements because there's a nonprofit that we support and I remember we looked over the books at one point and they did have a ton of savings and even me, you know, Ramsey Solutions, I even kind of was like, okay, well they can be using some of this money elsewhere, right? So I do wonder, I think that it's a great goal to have eventually again. But I do wonder if there's a little bit of a compromise and that if you guys are like, hey, let's go down to four months or three months. This is kind of even just using the rule of thumb of just even the baby steps from a consumer side, not running a business, you know, of that three to six month. But even Ramsey, I mean, yeah, retained earnings for six months, that's pretty conservative, you know what I mean? I think you could take it down a little bit to throw some cash at this mortgage again. And part of it is to get everybody on board and part of it is I think that that's an okay move. I would not take it down to zero. That does feel unwise to do that, yes, to be at zero, no savings, no retained earnings, there's no, yeah, and you don't get taxed on retain earnings for nonprofit, correct? Correct. Yeah. Okay. So that's great. We have our six month buffer and four separate investment accounts that we can access at any time in case there's an emergency. And we have those maturing every six months, we have two six month ones and one and two one year ones. I always want maturing every six month. Okay. I'm trying to keep it liquid. Besides not getting that grant because I would consider that an emergency, that's like a wow change of plans. Have you guys run into any big emergencies that you've had to use that fund for in the last 24 months? Well, we've also been very blessed in the last 24 months that we've been able to do all of our major maintenance and improvements and upgrades. We repaired our roof. We replaced our HVAC system. Okay. So there's nothing really moving out there that you wouldn't be. Yeah. I mean, I would be okay. I would be okay taking it down. I'd take it down. I would be okay, taking it down to three. And I would because I think you guys can, because again, when this balloon is due, do you say in five years? Yeah. And so we're in the process of refinancing it now. That's right. You are going to refinance. Okay. And if you've been able to cash flow all of those major projects, if you take this down to three months, like Rachel is suggesting and I agree with her, and then you commit to cash flowing the rest with the same margin that you were using to do those projects, this mortgage is going to be gone in no time. Yep. Yeah. I would hope so. I hate that. I mean, how do I know? How quickly did you pay off the 50,000? It took 18 months. Okay. So really? So if you threw it 80 years and then another additional six months to get everything else taking care of. So we've done a ton of work in two years. Yeah. It's amazing. Problem to have. For sure. Yeah. Because if you look at it, if you took 80, right? And maybe through it, you know, you'd be down to 160. And you said, took about 18 months to do 50. Like you, you pan it out. And I'm like, yeah, and probably four years, you guys could get this building paid off. It's pretty amazing. Yeah. That would be the best thing. So because I want to throw everything, my personal goal is to have every penny that we possibly can to go to helping our clients. Yes. I know. Absolutely. Absolutely. And if we have a mortgage, that's that's money that we're not being able to totally. Yes. Well, you're, you're incredible yet. I mean, you, you took, you took that organization by the way, you just said, here's what we're doing and looking at all of it because to have someone like you in that nonprofit world with that business mind to even look to refinance so you're not stuck with this horrible, adjustable rate. More, even those, those moves are so wise, so, so wise. So well done, Anne. Hey guys, George Campbell here. 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We're taking my call today. Yes, absolutely. How can we help? So, I got a couple of issues or things going on in a complicated situation. So, first one is me and my husband were about $120,000 in debt. We're 28 and about to be 29. I'm finishing college, so that's a lot of it is student loans, some in collections, a car, and right now we make enough money on paper, but we're stuck in this daily paying cycle that our job offers, where we're able to cash out our earnings every day, and so it's really detracting from our paychecks, and we're just stuck in this vicious cycle every day. You can take part of your day. Oh, wow. Yes. Do you get charged fee or entry? I mean, anything, or is it just, that's how you're getting paid? It's like $1.99 or $2.99 every time you can cash out. Okay. And cash out up to twice a day. What do you guys do for a living? So, we work for the same company. My husband works from home in a different department, and then I basically customer service, and then I work in the back office, in office. What do you guys work? Where I'm sorry. What do you guys earn? collectively? 85 to 95,000. He's on 32 to 40 hours flex weeks. So it can range between the 85 to 95 all together. Okay. What do you do you guys have kids? I'm making 40. We have one two-year-old daughter and two-year-old. Okay. And what are you going back to school for? I'm in school for psychology and I plan on getting my master's degree. Okay. I'm not going to pay for that. As of right now, no. We might stop and pause school to cash flow once we get into a better spot, but now we've been taken out loans. How much longer do you have to graduate? I have one semester left until I'm done with my bachelor's degree. And how much of the 120 student loans? About 50. It'll be 60 after everything. Okay. How much do you guys own the car? 24,000. Okay. And what's in collections right now? Is it credit cards? A couple personal loans and some credit cards. What does that add up to? About $50,000. 50,000. And those are all in collections. Yeah, about $40,000 in collections. Most of it's on my husband's side. Give you some larger credit cards. And he had the larger personal loan. And then we have about $8,000 of active credit cards. We just decided that we were going to stop using them all together. Good. How long have those bills been in collections? How long has it been sitting there? A couple of years now. Okay. So the good news on that is we should be able to settle that and make some deals on that for a significantly cheaper than the 50,000. And that would be something that I would make it probably my full-time job. I'd start with the smallest one kind of snowball it. And whenever you guys compile up some money, I'd try to settle it for maybe a quarter on the dollar and do it that way. I just want to go back. I want to make sure I understood you. I thought I heard you say you make 90,000. Then I thought you said I heard you say plus 40. Did I hear that or it's 90,000 total? No. It's about 40 each of us 45 each of you got it. Okay. So a little bit more than me, but he makes less hours. Once you get the ability for over time. Once you get the degree, you have one semester left. What's your income going to go up to? Hopefully for me alone somewhere in the 90,000 to 100,000 range. Once I have my masters, but just with this degree, nothing, because it doesn't, I don't think it adds value to your current job, right? No, not really. I can become like a case manager, something like that for about what I'm making now. Yeah. Okay. All right. So the the degrees a little bit of a wash and we're not going to go deeper and debt to get the masters to hopefully make them 100. Yeah. So we are. Okay. Um, so I mean, that the number one goal would be to get you guys your head above water just in your current day-to-day bills. So you're not having to have this daily pay. Yes. Yeah. I want you on a rhythm. And so what this usually means is you kind of have to like shock the system, which is going to mean working weekends, working nights somewhere. Um, and it's going to probably take, I would think a good 60 days of another job when I had to to get some cash flow in so that you guys have enough in your account that you don't have to, um, be waiting on that next paycheck, if that makes sense that there's enough in there to pay what you guys need for the next one. And so I, I did something stupid too. I cashed out my 401k. There wasn't much in it. It was 13, it was $1,600 before taxes. Um, so I have that on the way to just give us a buffer of something so that we can get out of the cycle. So that was the only reason why I did it. Do you know, let's pretend today that you were current and you weren't behind on anything. Do you know what the amount of money that you bring in every month are it in your minimum payments? Are you in the red or are you in the green assuming making of money on paper? Yeah. Okay. So when you do your every dollar budget and you plug in, you know, the 90,000, how much is that per month for you guys? Um, so it's about, I think after everything that gives us a surplus of like, no, no, just the amount of your paychecks like 6,000 ish probably hit your account. Would you say, um, should be or 1200 per check. I get paid by weekly and then he gets paid around 900. Okay. And nobody's investing, right? No. Okay. Uh, so here's what I would say. Do the budget and do it with, I want to know exactly what that margin is going to be. And then the other number I want to know is exactly how much you are behind on today. Like what's the deficit for this month right now? We're in August. So we're not even midway through yet. So are you already operating at a deficit or tell me how this current month looks? Well, when I did the every dollar budget, it said that we have about $400 extra at the end of the month. But I think it's more of a timing issue. We have heavier bills in the second half of the month. Okay. Good to know. So let's do this on every dollar. There's a paycheck planning feature because what you're highlighting, uh, Linnea is really important. It's the first step to budgeting is deciding how much we're going to spend, right? And assigning the line items. But the second part of budgeting that a lot of people miss is now we have to decide when we can spend it. And sometimes it's as simple Linnea as calling in and saying, my mortgage is due on the, on the first, it might be easier if it's due on the 15th. And you can call in and make those changes a lot of times there's flexibility as long as you're paying it that month, right? And moving things around so that you know, when I get the first check on the 30th, that's when I pill, that's when I pay, you know, bills one through three. And then on the set, the 15th check, that's when I pay the majority of the other bills, right? I pay the three biggest ones with the first check. And then I pay all the little ankle bitters with the second check. And so it's a little bit of a puzzle sometimes to figure out what bills you can pay with what check. But let that be your homework tonight because I actually think that that's the solution here is knowing, okay, when I get paid that first check on the 30th, even though my entire grocery budget might be $600. But I can only spend $250 of that grocery budget on the first check. And then when the second check comes, now I can spend the other 600, you see what I'm saying? And so that's the puzzle that you guys need to sit down and figure out because I think you're right. There is enough money there at least to hit the minimums. And then when you get on that rhythm, like Rachel said, now we can feel really confident about taking the $400 in margin and chucking it away at, you know, whatever credit card or the smallest debt is, Lenan. Do you know what you could sell your car for? Carbana says $19,000. That was my second part of my question is, I'm having a hard time convincing my husband to let go of it. We just got it in January. It's a 2024 and he's really attached to it. Yeah, well, I think if you guys can sell this, if you guys can do, if you guys can sell that, maybe get $12,000 for the collections and you start doing it, I think in three and a half years, your life looks different. Yes. All right, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace Christ Jesus.