Build Your Foundation Before You Build Wealth

[MUSIC] Brought to you by the EveryDollar app. Start budgeting for free today. [MUSIC] >> Normal is broken, common sense is weird. So we're here to help you transform your life, your money, from the Ramsey Network and the Fairwinds Credit Union Studio. This is the Ramsey Show. I'm Jade Warsh on next to me. George Campbell taking your calls, triple 8-8-2-5-5-2-2-5 gets you on. Erica is on the line, she's up next in Cedar Rapids, Iowa. Hi Erica, how can George and I help out today? >> Hi, Jade and George. I am calling because my in-laws said that they set money aside for my boyfriend and his brother's wedding. However, they said that they're not going to pay for a destination wedding. So we're kind of caught in the middle of deciding, do we go destination or do we do what they want to stay in town, but maybe get some help with it? >> I mean, do you need the money? >> No, but it would be nice. I mean, what would the financially smart thing to do be? I mean, I know George got his wedding paid for. I would love that, but I mean-- >> I wish I could give that to you. Destination weddings are going to be more expensive, I imagine. Is that why they don't want to do it, or are there other reasons? >> You know what, actually, I think the destination wedding is going to be less expensive, but it's always priced out so far. >> It depends on how you're doing it. Are you fitting the bill for anyone flying out? Or is it just like the wedding is here? If you can make it great, if you can't, see you later. >> Great question. So if we pay for it, everyone else is going to fit the bill. It's going to be about 1,500 maximum per person to come out. However, if his parents said, "Hey, we've got this money, if I do what you want with it, we might be able to help the family members and the friends who maybe can't afford to pay for it all themselves." So what if you pitched an idea where you say, "Hey, guys, we also have some money saved, but we really want to do a destination wedding." What if our portion of the money goes? What if your portion of the money goes towards paying for the venue and the food and those things? But our portion goes towards flying out like key family members to make sure that they can go, or subsidizing it to a certain extent. >> Yes, we did try to pitch that already, and we got some pushback. So the issue is his dad has nine siblings and his mom has six. So we can't pay for everyone to come. And so I think they want an in-town wedding, so that way everyone can come. But we actually want a destination wedding, so we can get to talk to everyone and see everyone, and make sure that it's not just the days over it. Oh my gosh, we didn't see anyone. >> Can you just do it locally and limit it, and you guys just do a little getaway honeymoon situation? >> We could. >> Would that be a compromise? Because then you get a free wedding, plus the Salt Expenses Pay vacation. >> I would think that would be a compromise. The issue is if we do a local wedding, then the people who don't get invited might feel slided. >> Who's not getting invited? >> Yeah. >> You're saying because, now it's local, more people can come, but we're still limiting the invite list. >> I mean, the invite list is still nine siblings and all their kids, and six siblings and all their kids, and they're not even my family. >> Right. So what is his parents willing to cover financially? Is it a dollar amount? >> That's what they wouldn't give me a dollar amount. They said that if they give us a dollar amount, our Mexico trip might turn into an Italy trip. So it's probably significant. >> See, that's strange. >> Oh, wow. >> I don't know why they're being kind of like, not telling you the details. I think if I were you, I would talk to your fiance and say, can you please press your parents to get some actual facts so we can plan? It's not because we're trying to tell them what to do or because we're ungrateful. We just need to understand clearly our options so we can make a plan. Can you please ask them for the dollar amount if we do it local? That's all we need, and then we can make a decision. And then I wanted to ask you, Erica, how much do you guys have saved? >> Yeah, that's a good question. So I only have about 7,000 saved, but I could probably do another seven before the wedding. >> Okay. >> Now, my fiance, he has about 85 to 90,000 saved, but that was actually associated with a lot of it for a house. >> Yeah, that's a lot of money. >> Okay. >> We could spend money on a wedding, but if it could be free, that would be a fantastic deal, you know? >> So I think it sounds like the biggest value is not that it's a destination. It sounds like the biggest value is we get to choose who comes and we get to choose what we spend on it because we'd rather have more money going to other things, like a house or the honeymoon. Is that fair? >> Yeah, I do still really want the destination. I think if we do the destination, it'll limit the guest list without us having to limit the guest list. >> But that's the reason you're doing it then. It's to sort of force the issue and go, well, the guest list. >> The guest list. >> Because not everyone can come. >> So yeah, so to George's point, guest list is number, if we force rank these priorities, guest list is number one, destination is number two, not overspending is number three is what I'm hearing. >> Yeah, okay. >> So I think that what you and your fiancee need to do is do what you would like to do, and that's, it's your choice. If you want to do a destination wedding, do it and invite who you want. And the adults are going to decide if they can make it or if they can't. The best thing that you can do is give them a save the date pretty far in advance and let them know. Here's what it is, and here's what it's around what it's going to cost, and do what you want to do. It's your day. It's up to you. It's not your job, it's not your job to make sure everyone can attend. Let me say that. It's your job to create the wedding that you want. >> Yeah, and I really do want the destination wedding. The only other fear that I have is it kind of kicks the in-laws off when we said we want an destination wedding. >> That's all right. >> So do we need them to worry about that? >> I mean, you'll have to live with that. I don't know how long they'll hang it over your head for. But you're in it for the long haul, so they're going to have to learn to like you. >> Yeah, and they will, they will. There's always some drama. I'm thinking back in my own mind about my own wedding. There's always some kind of drama, and over time it goes away. It just solidifies all that does, Erica, honestly, is solidify what takes place when you get married, which is that bond going towards you and your husband, and you're kind of moving away from your mom and dad and your family, and kind of doing things the way they want you to do them, and you're moving towards you to being a unit and living your life the way you want to live your life. It's almost like the first foray into that lifestyle. >> Yeah, and you go to my shoe. What would you do? >> I would personally try to come up with a compromise where they feel honored, and that might be you guys do the destination wedding with a small group, but then at home, when you guys are back, there's a big celebration, and you kind of make a little your own wedding out of that. And that way all the people get to come, there's still a celebration, and who cares when the actual, you know, nuptials happened. That's the question. >> But then we both pay for it, like we would pay for the destination they would pay for them. >> Then you guys can talk about it. It might be you guys pay your own way to Mexico, to have your destination wedding that could cost you 15 grand, and then they might cover 40 grand for an in-person wedding back home. >> And I would say use your money that you have, and have the wedding that you would like to have give everybody a fair amount of notice, price some things out, and let that be that on that. >> I think you're wanting the cake and you want to eat it too. In this case, it's the wedding cake, but it's, I want to have my wedding my way, but also I want someone else to fund it. >> Yeah, you can't do that. >> Even if they have their own thoughts. If someone else's budget, they're going to have some level of say, I wish they said, carte blanche, here's a check for 40 grand, do what you want, Erica. That would have been the cool thing, right? >> Yeah, I think that's what Dave did, didn't he? >> I'll have to check in with Dave on his play, but here's what I did, our wedding that we won. >> Yeah. >> 50 people total, including bride, groom, bridal party. So we had to throw a second party just to have everyone we wanted to have. >> And so that was a compromise. >> And see, I had a destination wedding, and we invited 75 people, and I think 70 came, and I never did anything else back. >> That was that. >> That was that on that. >> If your business is making seven figures or more, you should be proud of that. But that growth probably brought a mess with it, systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem, and NetSuite has solved that problem for more than 44,000 businesses like yours. NetSuite brings financials, inventory, CRM, and more into one place. And their AI tool, NetSuite Next, builds AI into everything, automating busy work like forecasting demand and chasing down overdue accounts. It's not complicated to use, you just ask it questions like you're talking to a person. And you're not starting from scratch because NetSuite is built on leading practices from thousands of businesses, preloaded, and ready to go. Ramsey Solutions switched to NetSuite years ago. It helped us know our numbers, and we've never looked back. If you're revenue is at least seven figures, try NetSuite next for free at NetSuite.com/ramsy. That's NetSuite.com/ramsy, or click the link in the description. All right, back at the phone lines where we have Julie and West Palm Beach, Florida. Hi, Julie. What's up in your world? Hi, so I inherited a home and it has solar panels and it has a 25 year debt attached to the solar panels. And I've been on social media on Facebook and such, and I keep getting advertisements for canceling your solar debt. Is that possible to do? So how much of the home, how much are you paying every month in these solar panels, just in the solar panel bill? $300. $300 a month. Oh my gosh, okay. Are you telling me, like, when you contact the business, there's nothing there, or are they still in business? What's going on with the business? The people that installed the solar panels are out of business, and the automatic payments are coming out going to a whole other business. Okay, so that's what I was going to do. Have you separated, like, the lender, like, who actually holds the loan aside from the installer? Mm-hmm. Okay. And what are they saying? Well, I haven't spoken to them, but I'm getting these, you know, advertisements saying that if you had this installer, you can cancel your loan with this, and they're using the same companies that I'm paying. So that's why I don't want to click on it, you know, and then get on a whole bunch of other lists. Yeah, my fear is they charge you a hefty fee, and then it doesn't end up getting canceled, and you're still on the hook. Right. And you're just out more money. Right. Right. And I've gone through a financial peach university, and I'm 100% debt-free. Thank you. And so I don't, you know, I'm like, wait a minute. Now I have a house. Yeah, how did that work in the contract? I'm sure that came up when you bought the home, what was going to happen with the solar debt? Because it's in someone else's name. It's inherited. I inherited it from my father. Oh, from your father? So the debt is technically in his name still. But you legally owe it. You know, wouldn't he? Yes. Okay. Because he gave me the house in as well, and the house has the solar time. What's the total left on the loan? Forty something thousand. Ouch. That's a lot. Yeah. What's the interest rate on this? Three percent might have gone up by now. Yeah, I'm just wondering if this was part of the contract. I don't know that it's just going to go away. I don't know how the lender would just cancel the debt magically, just because it was inherited. Have you talked to an attorney about this? No. Should that be my next step? I might just be worth a consultation to see what your options are, because if you can get out of this unscathed, that's awesome. But I don't want you to go down a rabbit hole of clicking advertisements and people promising you things that aren't true. Right. Right. And I have learned not to do that, because I learned in my financial defense university. So, okay. Well, you answered my question, and I appreciate that. So much, and I appreciate the Ramsey Pollution. This is awesome. Absolutely. Yeah. I've been looking at all that fine print you signed to see what your options are when it comes to getting out of this thing. If you owe it in full, if there's any remedy here, I would at least do that much homework before deciding. All right. I'm just going to tack this thing like any other debt. I feel like she doesn't have a lot of options just because she legally signed for that when she got out. Yeah. This is part of it. Yeah. It's kind of part of it. That's tough. Try to avoid solar at all costs. That's the takeaway. Anything where someone shows up at my door, I'm usually like, this is probably not a good deal for me. Uh-huh. Uh-huh. I feel that. That's usually how it goes with solar. Then I'm promising you, hey, that electric bill's high. Wouldn't you love to pay 300 bucks a month to something else instead? I would not. I know. Thank you. Woof. Woof. Let's go to Caleb in Cincinnati, Ohio. Hey, Caleb. How can Jordan help? Hi. How are you guys doing? All right. I am in the process of, uh, closing on a new home, and I am going back on, back and forth on whether I should get a FHA or a conventional one. Do you qualify for the conventional loan? Yes. So what's the benefits for you going FHA? Just less money down? That would be one thing and, uh, the purchase of the new home is contingent on the sale of my current home. And how does the FHA help you in that situation, the contingency? It doesn't. Uh, there is a deadline on it. It's basically the FHA I can have, I would have a liquid cash right now to close that I need. Um, conventional, I will not have that liquid cash accessible until my house is sold. That kind of sounds like, uh, a protection for you, in my opinion, because if your house doesn't close and you needed that money to put down on the new house, you're going to have two mortgages that you're paying. Can you handle that? Correct. Yes. Yes, I can. Without, without a renter, just, I'm going to just carry two mortgages. Yes. Okay, then that really shapes why do the FHA loan if, if you've got the money that I'd be thinking, okay, let me put more down so that there's equity built in at close versus going the FHA route and putting less down. What I'm saying right now, I probably won't have the 10% to put down if I give the conventional until the house sells, once the house sells, I mean, you'll have to always be fine. Yes. Where are you afraid of, because having a contingency is a fair thing. Why are you afraid of waiting? Is it a build and you've got to get it like what's causing you to have to make that call right away and you can't wait? I mean, I can wait, I mean, now, I just, it's, it's something new for me. It's, it's a big move. It's out of my city and, um, I don't know, just attachment to the house most likely. Have you seen it in person? Yes. Okay. This isn't like sight unseen. Well, no problem with FHA. I'm sure you've heard of this as MIP. The mortgage insurance premium, it's about 1.75% up front of the loan and most people roll it into the loan because they can't afford it. And so that just becomes a bigger payment with less down. Correct. Because it's right. 3.5% is required. Yes. I can, I can afford that. Right. But you're going to be paying that long term. For 30 years and it's going to prove to over $40,000 more that I'm going to pay for the same exact home. I think you're in a rush and I think the rush is, and I understand there's a time crunch if you're moving, but can you rent for a while? Because I think that that time crunch is causing you Caleb to look at options that honestly aren't ideal for you and that are going to cause you to pay more out of pocket and fees long term and have a worse loan long term when we could go, okay, let's just put the current house on the market. Let's let it sell. Let's go move to the new location. Let's rent for a year, which is what we would suggest anyway. And then certainly in that amount of time, the current house is going to sell. You'll take the equity and then you'll be familiar with the new area and you'll buy a new house in the new area. Okay. Tell us the timeline so we can kind of help you a little bit more. My closing date is the 23rd of October. November, I'm sorry, November, so I have a 30th of November. And how long has the house been on the market? The house has been on the market for roughly three months. Not my house, the house that I'm buying, the house that I am, my home has been listed as of Friday last week and just updated today with the Fed is from the photographer that came in. Okay. So your house, your current house just went on the market and you're in the Cincinnati area. The tool on the real estate hub where you can actually type in your city. So if you were to put Cincinnati, Ohio and the real estate hub, which we're doing right now, average median days on market for you is 40 days on market. So if your house Caleb is in good shape, you've had a realtor, one of our realtor's look at it and they're saying, hey, yeah, you're good to go. I mean, I think that's a fair assumption to say, hey, this could take 40 to 50 days to sell. Okay. But the key here, I think the key for you is gathering all the information so that you can make the best choice instead of pushing yourself into a corner and saying, my only choice is, yeah, this is the biggest financial decision of your life. And so you just want to do it slowly and not out of a desperate situation, but instead walk with confidence, with patience, with options, that's how you're going to make a good long-term decision. (upbeat music) If you're shopping online and these days, everybody does, data brokers are out there right now buying and selling your personal information. Your phone number, your home address, your email, without your knowledge or consent. And that puts you at risk for spam calls, scam texts and fraud. Combined with AI, those scams are getting more sophisticated every day. And trying to get it under control yourself is basically impossible unless you have delete me. 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And agents who actually know what they're talking about are Ramsey trusted insurance pros are vetted and coached to make sure they're market experts who have your best interest at heart. So go to ramseysolutions.com/coverage to find the type of insurance that you're looking for and to connect with a Ramsey trusted agent. Do that today. Let's go to Jennifer who's in Los Angeles, California. Hi, Jennifer, how can George and I help out today? - Oh my god, I can't believe I'm talking to you guys. How are you? - We're doing good. Happy to talk to you too. - Okay, well, let's see, I deserve to be better, I think. - 100%. - 63, at 63, and so I plan on working probably another 10, 11 years, I'm in sales. - Okay. - And I have 15,000 in an emergency fund. My 401(k) sadly with a company match is at about 83,000. I forgot to tell the screener, I have another 50,000 in another 401(k) account that I had that I just kept there, let's say. So I have the 83 and the 50. And I'm just wondering at my age, how can I maximize this? Should I roll over my existing 401(k) with my current company into a broth? If that's something that I should do or so, really those are my questions. - Does your current employer offer a Roth option for 401(k)? - I think they do, it looks like they do on the website. I mean, I can tell you the name of the company. I mean, if they offer that, I would 100% go for that. And then if you have this old 401(k) is the old 401(k) with a different company? - Yeah, it's a different company. And it's with a financial advisor basically, a company that's been with my family. So it's with them. - But it's not a 401(k), isn't it, right? Did you roll it over to an IRA? - Right, it's a trial swab. - Okay, so you got an IRA with 50(k), 83(k) and your employer 401(k), you want to retire in 10 years. That's the goal, 11 years. Making up for a lost time. We're willing to work till 74, is that right? - Crazy, I could probably work till 80, but you know. - Okay, you sound great. It sounds like you're in great health. What do you want? - Well, you don't work only 'cause you must. - Yeah. - Yeah, well, I feel like I need, I must, because I never stayed in all my life. - Yeah, are you single? - So, no, I'm married, but, but we, I really don't want to talk about my husband because we do everything so separately. I'm just really concerned about this account for me. - So in retirement, you're only gonna have access to your own money. He said, don't touch my pot. You guys split every bill? - If my husband passes away, he is 11 years older than me, then I would have something I would have our house. - What does he have? - Can you tell us what he has in retirement just so we know what passes to you and if it passes to you? - I'm, say that again, I'm sorry. - Can you tell us what he has in his assets? Because if he does pass before you, we can have an idea of what would pass to you? - Yes, yes. I believe he has about 100,000, just that he does draw from monthly. He has a pension also that's separate. - Do you know how much it gets for the pension? - I think it's about 2,000, I want to say, plus social security. - And do you know if it's structured in a way, sometimes with school system, a pension can be structured in a way that you get more monthly, but when you die, it dies with you or it can be structured in the way that you get less monthly, but when you die, it can pass to a spouse. Do you know how his is structured? - No, we, yes, I do. No, it just goes with him monthly and then when he passes, that's it. - That's that. - So just 100,000 that he's drawing off in the pension. - Yes, no, from a separate account to kind of help end the date with the pension. - $100,000, plus the $2,000 a month, and what's the third thing? - Social security. - Okay. - And I think it's about 1,500, I believe. - Is his social security more than yours will be? - Mine will be close to 4,000. - Okay, so you'll keep yours? - I think it'll just 70, something, yes. - Okay, so we at least have that in the horizon, plus whatever you have saved. So what is your current income for the year you gross income? - It's about 130, give or take with a bonus commission. - Awesome. - And do you have any debt? - No. - No, no home mortgage? - No, my husband pays for that, he does that. - Okay, but if something happened to him, would you be on the hook for the mortgage? - Yes, because the house would go to me. - Is it close to being paid off? - I think it's about 400. - Okay, so no. What I'm trying to factor in is you need a whole lot less for a retirement if we're not needing a mortgage payment factored in there. So that's why I'm trying to figure out all the variables instead of just saying, yeah, you should be good. But based on your current income, we recommend investing 15% until the house is paid off, which would be 19,500 for you. And that's without a match. So every month, that would be 16.25 going out. So I'm gonna add that, I have our investment calculator up here. I'm gonna show you, and you can watch this back on YouTube or Spotify. You have 133 grand saved, we're adding 16.25 a month over the next 11 years. And I'm gonna go with a 10% average rate of return. So when I hit Calculate, it's showing me $785,000. How does that sound? - 10 years or so, that sounds amazing. - That's great, that's 11 years. - If you're living just off of the interest that that's generating, I mean, 70 grand a year that's not bad. Plus you've got your 4,000 social security. And what I would be talking to your spouse about, I understand, I may not agree with it, but I understand that you wanna keep the money separate. That's your business. However, the conversation that I would be having with him is we're both gonna be retiring, and there's things that affect both of us, that we both need to have a clear idea of and a clear plan for, and that's the house. Because that's gonna affect each of you, if you pass first, if he passes first. And so I would wanna know, are you guys going to create a plan together to get this mortgage paid off faster? Does he have a plan to do that? Is his plan, do you want to downsize? Start talking at least about that, because that does affect both of you, and for you it affects you greatly, if that house comes to you and you're used to living in it, and now you've got a mortgage, well now if you can't afford it, you've got to move, all of these things. And so you both deserve to have a really clear plan that makes you feel secure in retirement. - Right, right, okay. And George, right? - Yes. - So on the 1625, is that 15% of my income, that's what you calculated, that's where you thought that number? - Exactly, because 1,130,000, 15% of that is 19,500, divide it monthly, you get 1625, and that's without any match, and I've got the calculator up on the screen now, we finally figure that out. And so that's if your income doesn't grow. So if it grows, if you get a match, this number will be even bigger, and to give you some perspective, $785,000, if you, let's say you had a withdrawal rate of about 6% to 8%, you're talking $45,000 to $60,000 a year, is what you could withdraw from that. So, about 4,000 a month. So now if you tack that on with Social Security, okay, that's about $8,000 a month. Now we can figure out, is that enough to sustain our life and lifestyle, the mortgage, healthcare, all of that at that age? - Right. And if I said, oh, I want to retire in five years, of course, that number will be way less. Yeah. At that point, you have a very high likelihood of running out of money. And again, I don't know your lifestyle. I see you're in the Los Angeles area. I know you have the mortgage still. That's probably not going to get paid off in the next five years based on the current trajectory. And so that's where this conversation with your husband, even if you guys have separate finances and I wish I could convince you guys to build this thing together because it feels crazy. You're building two different rocket ships and you're both trying to land on the moon. Yeah. Let's just pool our efforts together. I know. Yeah. If you're the beneficiary, you're part of his financial plan, whether he likes it or not. Yeah. So I want to know, am I the beneficiary on all these accounts? Can we make sure our eyes are dotted, tees are crossed, because one of us is going to croak one day. Not to mention in a perfect world, there'd be life insurance on both of you so that if one of you passes away, there's a lump sum to carry. You know, at least cover costs for, you know, to pay off the mortgage and have a funeral call. Absolutely, so working together is the best bet. 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. Because most insurance companies make it more of a hassle than it needs to be. Not as standard 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 Zander for straight answers, competitive rates and coverage that actually protects your family. So 800-356-4282, or go to Zander.com for a quick and easy quote that's zander.com. So if you're new to the Ramsey Show, you'll hear us talk about the baby steps quite a bit. And that's because they are the framework that we use to answer every money question. You can learn more about that at the link below the seven baby steps, the key to a rich and satisfying life. All right. Let's go to Bryce who is in Winnipeg, Canada. What's going on, Bryce? How can we help today? Hello, hello. You can hear me clearly. For sure. Awesome. Awesome. Okay. So my wife and I recently welcomed our baby boy into the world about three months ago. So my wife has become a stay-at-home mother in that time. And so we're trying to navigate the transition to being a sole income. Last year, she had pulled in 60,000 and pulled in about 55. And so with her now going to be a come-of-state home mom, our income is getting cut in half. Yeah. So the next couple of months, she will be, what's it called, pulling in maternity leave, but that'll end like kind of like April until next year. And so I have a bit of a window. I just want to catch it early and try to get the ball rolling through, situate myself using the next couple of months to get a stereo foundation beneath us as possible. My income itself tends to be highly variable. So I kind of want to use the slow season ahead of me to hopefully get out like kind of what I can do to potentially fortify ourselves in the best way going forward. Bryce, did you guys plan for her to stay at home ahead of time and you knew this was coming? Or is this kind of like, we're figuring it out now as we go? It was like when we at first talked about having kids, she did note that she wanted to have multiple. And I said, if I can make this possible, like I would love to go up a step and a little being that's what provider that it's not. Like that, that would be an absolute blessing if I'm able to show those shoes for sure. I'm just kind of terrified that I won't be able to and we kind of put ourselves into a precarious ish. Maybe so financial situation. Has she already put in her notice at work? Yeah, she's been away from work the last three months, like she she they she's not coming back. Yeah, okay, that's what I'm trying to figure out if there's still an option for her to go back to work for a season until you guys can figure this out because right now you're bringing home like three grand a month. Right right now it's busy season so I'm actually closer bring home four grand a month. Okay, that is that is good for for what I'm doing and then obviously with her Matt Lee's and it's closer to about $6500 a month. And we are squirreling way every cent of her Matt Lee right now. Good. So you're figuring out how to live on your income alone. Yeah, pretty much is what we're trying to kind of figure out how to do have you put it in. I'm just have you put in a budget and seen what the differences like seen. Okay, if I make 4K a month and she brings in nothing, what is the difference? Are you in the red or are you in the green? There's just no margin. What is what are you finding? Right now it's as far as I can tell it should on paper be in the budget should be which should be $200 in the green, which isn't great, but at least we're in the green. What's your rent or mortgage payment? So in this we actually have three mortgages, which is why this gets kind of wonky. So our first mortgage payment for our primary income house is $950 a month. Okay, so we're good on that one. We're clear the other two mortgages we have are rental properties and they end up being net zero. So what they generate completely covers the cost. One of them is a seasonal cottage. It can only be rented over half the year. And so that's the reason that it's not zero. It brings in just enough to cover itself. So we're like, all right, cool. It's relatively space. Oh boy. And the other one. Yeah. What do you have in savings? How? Hold on before you go further. How much do you have in savings? I hope it's a lot. I have $20,000 like basically three months, emergency funds. But if I bought a note income from the rentals or from myself, we would be completely clear for minimum three months. Probably closer to four. Oh gosh. So why are you keeping net zero profit properties? Because it's kind of like a dream that we want to have with this cottage going to the future and it kind of just stumbled into a lot. I know it sounds passive, but. Well, it's not that it's just that I do think that some things have necessary endings and I think that in this case, there has been a lot of change. You now have a wife who's not bringing an income. That's a major change. You have a baby. That's another major change. You have three properties and you only have $200 of margin. That's that's really, really, really, really tight. And then you have two rentals that are net zero. And if for whatever reason, you don't you don't have a renter that month or that renter goes away and it takes you a while to re-wrap. A big repair. A big repair. You're up a creek without a paddle, my friend. I don't know how to feel. You're probably trying to say that. Well, it's not because I don't want you to it's not because I don't want you to have rentals and it's not because I don't want you to have your dream. What I really do want for you, Bryce and I know George feels the same way as we want you to feel secure. And we want you to feel peace and whenever you bring a baby into the world, that is invaluable to be able to lay your head on the pillow. Your priorities and dreams have changed right now. The priority is she needs to stay home at all costs. That is the goal. That's the dream, which means the other dreams need to go away for now. And that might mean you sell these properties, take the equity. You have a bigger emergency fund and long term, we need to get your income up to make this work. What are these rentals worth? What do you owe on them and what are they worth? Okay, so the first rental, the seasonal cottage is worth 200,000 and we currently owe remaining mortgage on its 150,000, so we have 50,000 equity in it. Okay. And then the other one is a condo, which is worth 65,000 and we owe 50 for it. And that one was actually unforeseen. I wasn't planning on having that much risk, but a family member of mine was at risk of going homeless. So my wife and I, we put her hand out, got the property to have that person put into it. Well, that's a problem because you have to evict them now if you sell this thing. What if you sold one and took the 50k and paid this one off the second one off? I'm quite tempted to do that for sure. Like it would bring more stability, which would be definitely nice. It's just obviously it's hard to like go like kind of like a dream. Well, you're not letting go of it. I want to reframe your mind. You're not letting go of it. You're reframing it and you're restructuring it towards more solid. Right now what you've built has a horrible foundation and we're saying, hey, we really like real estate. real estate. We love the fact that you're trying to help family member. We love the fact that you want to stay at home mom. We love that. Let's do it with a firm foundation. The best way to go about this, even if you just do this baby steps a little bit at a time. The first thing, let's sell this one rental that's earning you no money. Let's take the 50,000 and let's at least show up this other thing. I understand you don't want a homeless family member. Buy yourself some time, start having the conversation with the family member and say, hey, we have a life here that we have to live. We're gonna need you to start either paying rent or find another place to live. And then you can. - Nothing happens, that's the thing with regards to this other one is like that. - But it's just at cost. - It's cost. - Yeah, what are they paying for rent? - It's cover, right now it's what I'm trying to avoid, those are the charges from the rest of the time. - I'm sorry, it's a 900 that we're charging them. Because we're trying to show up getting the debt paid off and get that, so we're gonna be dropping the rent down. Two sticks, 50 can be at like the net zero cost, so that it's not, so we don't run into weird like that. - But here's the problem, Bryce, you're not in a place to be super generous like this. I hope one day you are, but right now you guys are tight. You just lost half your income and you're trying to make this life work while trying to be generous over here while trying to keep the dream alive with this cottage. And that baby changed things. I think we need to own that, that we can't have the cake and eat it too. And that's something's gotta give. And if they can afford 900 bucks and rent, let's try to find them somewhere else. They can rent for 900 bucks. That way you can sell this property, simplify your life and be able to afford your life with just your income. - Yeah, 'cause then what if you sold that property, you got the 65,000 and what if you threw it towards your mortgage? What do you owe on your mortgage? - Our current mortgage, we owe 175 bucks on it. - Oh my gosh, I mean, you're chopping that down hugely if you were to do something like that. So do you see what George and I are trying to do? We're trying to get you to some firm footing here. You're in the mud, my friend, and you're about to slip and fall. I don't think you see it the way we see it, but you've got so much risk on your hands right now. Gosh, please, think about clearing these properties. And I don't think that you're going to be able to make this work in a pleasing way for either of you with $200 of margin a month. Then you gotta start thinking long term about what that means for both of you. (upbeat music) (upbeat music) - When it comes to your health insurance, one of the biggest mistakes you can make is believing your stuck in a one-size-fits-all plan that costs too much and covers too little. That's why I recommend health trust financial. They're the only Ramsey trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you, whether you've changed jobs, welcome to new baby, or had some other life event health trust financial shops multiple top rated insurance carriers for you. Then they help you understand your options so you can make a smart decision instead of guessing. I've recommended health trust financial for more than 20 years because they work for you, not the insurance companies. So they offer unbiased advice. Visit healthtrustfinancial.com to connect with an advisor today. That's healthtrustfinancial.com. (upbeat music) - Welcome back to the Ramsey show here in the Fairwinds Credit Union studio. I'm still Jade and he is still George. And Aaron is on the line in Columbus, Ohio. Hey Aaron, how can we help today? - Either can you guys hear me out? - Absolutely. - Very good, thank you. My question is around emergency funds. So currently I have about half my emergency fund in a high yield savings account earning 3.8%. And then I have money just in regular checking account. I am wondering, what do you guys think about taking some of the money that is in my checking account and putting that into the 20-year treasury has a means of kind of holding some liquid cash. We're getting a better return on it. With the discounts, you know, the 20-year treasury is currently yielding about five and a half percent. So I'm just wondering if that is a good way to hold some extra money and get a little bit better rate of return on it but also keeping it kind of liquid in on hand. - How liquid is that? - You can buy and sell treasuries, I use Charles Schwab so you can buy and sell them pretty much instantly. You would just need to, of course, I would need to transfer money out of Charles Schwab into my regular checking if I needed it. - But why is it in checking if you don't need it? Why not just move that to high yield savings? - I could, but sort of part of the reason I'm calling. So I'm a little bit cautious with my money. I'm a father of four and my wife doesn't work. So I kind of keep maybe a little bit more cash on hand than I really need but it's just sort of a little bit of how I am. So I have about 21,000 in my high yield savings and about 40,000 in checking. So I know I probably have a little bit too much in just regular checking. What's that equal for you, how many months of savings is that 61,000? - You know, I actually don't know the exact amount of months that would last, but certainly more than six. - Okay. You know, if you-- - I just kind of go ahead. - If you wanted to drop that down to six months and not have any extra, you could take what's left and you could invest it. I wouldn't invest it in bonds, but you could take it in investment 'cause you don't need it in high yield, right? You don't need it in an emergency fund. But I'm gonna sell it. I guess there's worse things that you could do. - I don't think you're gonna lose a bunch of money. Now the price will fluctuate even though the lender's safe. It's the government. So you're good there. But the prices will fluctuate and there's a settlement window and you're gonna get less if you take it out before maturity. So it's not as liquid as I would like it to be if it's actually an emergency fund. And personally, I don't have any T-bills or anything like that. I just have a high yield savings account. I keep my six months in there and then I have my checking account for monthly spending with a little buffer. So for you, you might say, hey, I want a couple thousand as a buffer, everything above that is my monthly spending, anything beyond that. On the first, I'm gonna wipe away the high yield savings and just keep it that simple. - That's right. Yeah, I think with the bonds, I mean, I'm not looking at using that as a means of saving for retirement or anything, but just trying to get like a little bit better return on my money that's sort of on hand. And just, you know. - I think that's what you have to challenge right now. - I think that's what you have to challenge is what the money is being used for and what it's truly for with an emergency fund. The purpose of the money is to be there when you need it. You don't want any risk attached to it. You don't want it to dwindle, right? You certainly don't want it to go down and value in any way, shape, or form. So for that reason, I would keep it in the high yield savings and then when you have money that you have it and the purpose is for it to grow quickly and the purpose is for it to be invested and multiply and that's the money that I'd want invested well in good growth stock mutual funds. So I think just, it's placing it in your mind for what it actually is. And I think we can get hung up sometimes when we put the wrong purpose on what money is for when it's separated in our different accounts. - Okay, is that fair? - Yeah, and a good example, Aaron, is 1% spread. Let's say you could make 4.8 instead of 3.8 by getting the T-bills. On 20 grand sitting in there, you're talking about 200 bucks a year. So it's not nothing, but it's not something either. It's just a little over 10 bucks a month. 15 bucks a month is what you're gaining, but you're also losing some liquidity and it's a lot of mental calories to try to sell it off. Wait for the settlement window. Access it a couple of days later if there was an emergency. And for that reason, like fair winds is great because the high yield savings is tied to checking. So if I really needed the money, I could transfer to checking and then swipe my debit card. - Right away. - And I'm done. And in my every dollar budget, what I do is just have my monthly spending money accounted for. I like to be a month ahead. That's kind of a different approach, but if you have all of your bills ready to go, locked and loaded on, let's say October 1st, you just have a lot more peace of mind. And then I make sure it doesn't go below a floor. Let's say that's $2,000. If it goes below that, I'm going to refund it with savings. And if it goes above a certain amount, let's restock. So that just kind of simplifies it in my brain. - I like that. I like that a lot. All right, let's go to Ryan and Nashville, Tennessee. Hey Ryan, how can we help? - Hey guys, thank you for taking my call. I had a question about options. I'm very little late to the game as far as it comes to investing. And right now we are currently in Mexico with her 401K Roth at work. And then she's got a Roth and I've got a Roth and both of those are going to maxed out yearly as well. - We're talking 401Ks. - Well, her Roth 401K, she had a regular 401K and we switched that over to the Roth at work, 'cause that's what they offer. And then we're contributing the maximum to that. And then I think they give her 4%. So that one's doing well. And then she had a roll over from previous jobs. And then we converted that to a Roth. And then I traded that one. [BLANK_AUDIO] and I have my personal Roth that I trade. - Okay. - But now she has an option, she has an option to buy options. So we don't, I understand how they work. I just don't understand like the risk. You know, are you just betting the farm on how the company's gonna do or what you're opinion on buying options as an investment versus just maybe starting a new account and trading that? - Now you're, when you say options, you're talking about like an employee stock purchase program, or she can buy the shares at a discount, like 20% off. - That's correct. - Okay. - Yeah. - And what is this a publicly traded company? - It is not. - Okay. That. - That gives me a little bit of pause. - Yeah, that would give me some pause because I don't know what it's worth and what it will be worth. And you're still putting your hard-earned money there. Instead of, let's say a separate S&P 500 fund. - Okay. Now you're making a little money right off the top because you get a discount. So it feels like, wow, this is free money. Why wouldn't I take it? But depending on the company, it may not be a good deal. And I would sort of look at it as something outside of your 15% into retirement. If you want to put some fund money there, then you can just say, hey, we're gonna budget 500 bucks a month and buy up some of these employee stock purchase program. - When you guys max out the Roth IRAs and the 401Ks, does that meet your 15% of your gross income? Or is there still wiggle room there? Between everything, it's probably a little bit more than the 15% but we're pretty comfortable with that. But I guess, can she sell the stocks as soon as she buys them? Or is there a hold on that? - No, there's not a hold. Once you want, yeah, you can turn it on and sell them. I just believe you. - That might be something I'd be interested in. Is just buy it, get the discount, sell it, and then invest it on your own. Somewhere that's more diversified, like a mutual fund or an index fund. - That I would do. (upbeat music) - Here's something that keeps a lot of parents up at night. 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Click the link in the description or go to Worldwatch.News/Ramsey and use promo code Ramsey to get started. The Ramsey offer includes your first full month free on top of the standard 7-8 trial. That's Worldwatch.News/Ramsey. (upbeat music) Let's go back to the phone lines where we have Sophia in Houston, Texas. Hi, Sophia, George and I are here to help. - Hi, thank you for taking my call. - You bet. What's going on? - So I just want to know, we'll help with how do I slow down my elderly mother who lives with us from spending her money on charities and political organizations so that she has money to take care of herself as she ages. - Oh man. What is she spending on this like monthly ballpark it? - Well, in the last month, she spent about $1,100 on it just like checks, like 41 checks went out, $27 approximately a piece, I mean, averaging. - We're talking paper checks. - She's ranked checks. - Paper checks. - Hey, I have the check. - We didn't even, we didn't even, all right. I wish that would work, but we didn't even know how much money was going out. And then she's needing to order checks all the time. Like wait a minute, wait a minute, we can get checks, that's like 80 checks, what are you talking about? So we're trying to figure out what's going on. And is she all there mentally or faculties there? Like she's not just writing checks out of like a weird habit. - She is, she is forgetful, she is a little not right, but she's not so far gone that she doesn't know what she's doing. - Okay. - But she is getting more and more forgetful of over time. - How much money does she have? - She, she's got like, she sold her house because she couldn't afford the property tax. So she moved in with us with like a $400,000 check from the sale of her house. She had hardly anything in the bank before that. And then she, so it's been, and it's broken down into, thankfully more recently, we moved a bunch into a CD, but for about a $150,000 and she's got like a savings of $43,800 and she has a checking account with like about two grand in it. - Is there anything invested, the 400,000, whatever's not in the CD is it just in the LISA? - It's gone. - It's just gone. And I've told her like, mommy, you had 400,000. Oh no, I never had that. Like, you got it. - In what period of time, in what period of time Sofia did she blow through the most of the 400,000? - She, she moved in in 2022. So between then and now she went through like $200,000. - Oh my goodness. Okay, so yeah, this is a big deal and you're just now discovering it. - Well, we started realizing last year that she had, she had taken in between how she gets her money and she had taken in like $48,000 in deposits, but she had blown through $90,000 in withdrawals and we're like, we have. - Well, I'm more worried that there's scam, fraud, things happening here and even elder abuse where she's unaware of what's happening and thinking she's giving somewhere and she's not. - Right, well what happens is you know, they sell her name to everyone. They're like, oh, we've got a life one here. - Call her up, she'll write you a check. - You got it, you got it, Sofia, you got it, step in. You got it, you got it, step in, and so. - But I mean, it's like Dell's children hospital in this mission area and-- - I understand. - Well, I'm wondering if you get control of her bank account where you get financial power of attorney and if she needs to make a giving donation, and purchase, it goes through you. - Is that like a durable power of attorney, okay? - Exactly, and while she still has her faculties, I would get that signed over because in the event that she loses that, it's going to be real hard to get it. You're going to go through a judge. - Well, that's what I, okay, so I have been wanting to see a lawyer and they said I had to get her tested from a doctor in order to even see them because they were afraid that there would be repercussions and all that stuff, and I'm like, so I, I don't know. - Can you go to the bank account? - Is your name on any of her bank accounts right now? - No, it's all in a trust and it's a trust set up in California, so I don't even think it's legit out here in Texas. - Oh, boy. Well, I'm wondering if you can get to the bank statements and see where this money's actually going 'cause if she's writing checks, every one of those has a paper trail. - Right, we can get into her account 'cause she can't remember anything as far as like how to go in there and do all this stuff. - And that's all of the stuff that you drive in. - All of the Sofia is, and not that you're trying to build a case against her, but all of this is an indicator that it's probably time to do, that if she can't remember her passwords, it's not normal to go through $200,000 of savings that quickly and in that way. So all of that does point to the fact that it's time and I bet if you sat down with an attorney and you did the testing, you would be able to get that power of attorney. And in the meantime, I also take the money that's in the CD and I start to invest that because this dwindled so fast, we need to get a higher rate of return and make sure there's money here to take care of her because if she does end up needing memory care in the future, you wanna know that there's some money there to go towards that. - Okay. So that's my biggest concern. Like even if we just have to get somebody into the house to help because, I mean, I'm not young anymore either, but say, how old are you guys? Oh, she's 84. - She's 84, I'm 60, my husband's 63. I have MS, my husband has a bad back and we're like, okay, like, we'll have to get people in to help, I don't know. - So we've got to get a hold. You've got to be able to get access to whatever lump sums that she has, the $43,000, the $200,000, let's get it invested, let's get it making some money and getting a nice return so that, you know, in a couple of years, that money is there to help take care of her and help take some of the stress off of you guys. - Yeah, yeah. - And I would cancel all recurring gifts. So anything that's, is there anything that she signed up for that just taking money out of her account every month? - No, I mean, other than, I mean, she pays S rent. So she does, S rent. - Okay. - And she pays for the stupidest thing she pays for as a storage room. And, you know, and she helps with some stuff like her own phone and her insurance. She still drives. - Wow. - Which I'm not sure how long. - You know, I might be interested in setting up some new accounts for her only because she's written so many checks and her routing number, her account is just out there in so many different places. And to Georgia's point, if anybody is kind of going in there and pulling money out of her account and you guys aren't aware of it, maybe just starting fresh would be a good thing. We have not, we have not seen anything like that because she doesn't do anything online. It's all paper checks. - Okay. - So nobody's getting in there. So they have her for that. - 100%, they have her name, her address, her account number and her routing number. That's all they need. - That's true. - That's true. - Can you cut the solicitation pipeline out? Can you start unsubscribing, opting out of mailing lists, register her for the do not call list to try to limit the opportunities for her to give? - Well, is there anything that actually helps and subscribe people from mailing lists? Like is there an organization that will do that from mailing? - Yeah, the do not call list will help with that a lot. And so that'll stop a lot of the unsolicited marketing that she's getting. It sounds like at this point, it's solicited. She's reaching out to them, trying to donate to these causes, which is wonderful. - Well, yeah, they sent to her first. They sent to her first, and she replies, and then they apparently are selling her. - Yeah, and they are selling her. - Just intercept the mail. Just intercept the mail at this point. Just say, yeah, this is jungle, it didn't make it. But the other part of this is, maybe you set up an actual budget for her to give, and hey, mom, you get $100, $200 to give this month, where do you want to give? - Yeah, that's right, yeah. - And that way she doesn't lose all autonomy, and she's clearly a generous person, and she doesn't dwindle her money down in the thousands every month. - And it probably wouldn't hurt to sign up for a delete me or something like that, just to make sure she's not getting accessible information as an out there that's, you know what? Actually, we're gonna give that to you. Our friends at Delete Me will give her a premium one-year membership, so that she doesn't have to pay for it. One less thing coming out of her checking account, and that's our gift to you to help her with this. They'll actually go into the hundreds of these data broker sites, remove her personal info, keep monitoring it, and that'll definitely help a lot with all these solicitations she's getting. - It's really sad because they do, they pray on the elderly, they pray on older folks who just aren't looking as closely, right? - Low hanging fruit. - It's low hanging fruit. - Easy target. - And you do, when you'll ever you have older folks, you really need to make it your business to kind of get, sometimes you have to push your way in to get into their finances because they don't, they're grown and they don't want to show it to you, but it's for their own good, so, it's worth it. 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Check out the Fair Winds smart bundle, including the all new live like no one else debit card at fairwinds.org/ramsey. That's fairwinds.org/ramsey. Ensured by the NCUA. [MUSIC PLAYING] So, George, you have an amazing YouTube channel, the George Camelot YouTube channel, which is what it's called. Brilliant name, I know. I mean, but you guys do a lot on there. And a lot of your segments have been doing so well lately that we're crossing it over here to see what everybody likes it. So, of course, it's obvious it's going to like it too. Well, the main thing people are intrigued by is just talking about wealth and the tactical parts about what does it actually take to have money one day. Whether that's retirement, you want to be work optional one day. And so, we started calculating the value of a dollar based on how old you are. And it was so incredible to see how it changes over time. So, get this. If you're 25 years old, that dollar you invest is not worth a dollar. It's worth $51 later on in retirement. If you're 30 years old, the same dollar is not worth $51. It's worth $31 now. By the time you're 40 years old, it's down to $11. And by 50, amazingly four bucks. You got it. So think about it, vending machines. You put a dollar into that vending machine at $25. At $65, you hit the return button. You got $51 back. But you put a dollar in at $50. And at $65, you hit return to get four bucks back. Less time for it to grow and compound. Exactly. And less time contributing on top of that. So the age when you start investing matters because of compound growth. You want that on your side. And that's when your money makes money. That new pile of money makes money. So think about it. 10% of 100,000 is more than 10% of 10,000. Right. That's what compound growth is doing. And so a single dollar invested to age 25 with a 10% average annual return with zero additional contributions will grow to $51 by the time you're 65. You did nothing else. You just left the dollar sitting in there growing. So let's talk about what it takes to retire. Let's just use an easy round number of a million dollars. Yeah, because people call in at all stages of life. And we want them to retire with a million bucks. And before you jump in the comments section, go, "Oh, George, you can't retire off a million dollars." That's not the discussion. We're just saying if you have a million dollars 65, what does it take starting from nothing based on your age? So I'm going to use our investing calculator. We'll drop a link in the description if you guys want to check this out for yourselves. It's a free tool on a website. This is actually the retirement calculator. So this is, I have an end date in mind. So age 25 to 65, current retirement savings is zero. I'm going to contribute $159 a month. And we're going to go with an average rate of return of 10%. Perfect. Calculate. You'll see just over a million bucks. What's interesting, I only put in $76,000. The growth was $929,000. Free money. Because I was so young when I started. Compound growth did the heavy lifting. It's like when there's no more footprints in the sand. Compound growth. Carry this. Stop it. Here you go. Okay. Now let's move to age 30. What is it going to take to still have a million bucks at age 65? But now we have 35 years for it to grow instead of 40. Well, let's see, if I invest $264 a month, that gets me to, oh, I didn't crunch the numbers correctly. Let me go. 30 to 65. Look at those times going. There we go. Boom. So over a million bucks. Perfect. 30 to 65 investing 264 a month. So that's your number. So you're 35. You're just getting started. Nothing in retirement. We're going to change the age there and change the contribution. It's going to take $443 a month now consistently to get that million. You'll see here, the amount I'm putting in keeps growing because compound growth has less time to do the work. Right. It's more about my savings rate. Now let's bump it up to 40. Okay. You're 40. You're going, hey, I started late. Is there still hope for me? There's still hope. It's, but you're going to have to invest $750 every month, $754 would get us there. Let's find out. There it is. Million bucks. Now you're putting in 226 of your own money to get to that million and then 45. Let's up it. Now this is where it gets crazy. It would take $1,317 a month to get to that same million by 65 because you only have 20 years now. Yeah. So less time to contribute and less time for compound growth. Let's go to the Bitcoin Huna Jade 50 years old. What do you think it's going to take? I'm going to go with, what did you do before? It was at 45. You got to put in 1,300 bucks a month. I'm going to go with 1,600. Buckle up. 24, 3rd. Oh. I'm paying. Almost doubled. Pay for. $2,413 a month from 50 to 65 would get you to a million. Again, you only have a 15-year time horizon and you'll see the money you put in was $434 grand of that million. Yeah. That's the power. At 25, you put in 159 a month to get to a million by 50, you got to put in 2,413 a month. That is the power of compound growth and it's why we tell people to get started earlier. We've got a chart here if you're watching on YouTube or Spotify. So I always tell people the best time to plant the tree was 20 years ago. The next best time is today. So no matter who you are, this is not to shame you if you're in your forties wishing you learned this stuff earlier. this to tell you that the best time to start investing is today. Do not delay, don't wait, even if you're 50, with nothing safe or retirement, don't worry, you're not up a creek, you still have time. - Yeah, and what the fair thing about that is when you kind of go back and do the math and reverse because we always say invest 15% of your income. And so if you look back even at the highest number, that's 15% of basically $10,506,000 income. So there really is hope when you look at this, 'cause most of the folks that call in, they're kind of making around 80 to 100,000, that's what we see. And so there truly is hope. Obviously you do want to get started. - And once you pay off the mortgage, you can increase investing to 20, 30, 40% of your income. If you follow the Ramsey plan, you've got no debt, no mortgage payment, you can make some big catch up. - Oh show. - On that show. Love it. So go check it out, you can get the retirement calculator, investment calculator, in the show notes, and description of this episode. Go check it out and drop a comment. Let us know how old you were when you started investing in where you are today. That'll be a fun little social experiment. - I like it, love it. Let's go to Sarah, who's in Tallahassee, Florida. Hey Sarah, how can we help today? - Hi, yes, I'm thinking for taking my call. I am looking to buy a house, and I got into a situation where I've been negotiating with a new home builder, and tomorrow's the end of their fiscal year, so they're offering me just all these incentives and things that I just want to make sure that I'm making like a good decision and not just kind of an emotional decision to buy right now. - Okay, tell us more. - Well, the house they have agreed to take $15,000 off the asking price, give me $15,000 towards closing costs, and then add on some other stuff like gutters and washer and dryer, and then give me an interest rate of $5.56 rate on a conventional loan. - Are they the lender too? - Yes, they are. - Interesting, okay. - So yeah, I'm just nervous 'cause I'm like, with a lot of like 20% down's a lot of money to give, and all of those things, so I just want to make sure I kind of make sure. - Yeah, what will the payment be? Let's say you did all of this tomorrow, what would the mortgage payment be comparatively to your after-tax monthly income? - Is a principal and interest would be 1,500? - Okay. - And I make 130 queue a year. - Fantastic. So this would be less than 25% of your take-home pay? - Yeah, I mean, that's about like tax and insurance and all that stuff. - Okay, if you included the property tax's insurance, what would it turn into? - That would be 2,200. - Okay, and what's your monthly take-home again after tax? Is it about like 7,500? - 7,500? - Yeah, we're all around there. - That's reasonable. Nothing's on fire here. I assume your income will go up over time. Are you single? - I am. - Okay, this doesn't sound like a bad deal. If this is the house you're already wanting, is that the case that you would go through this, even if this was a month later? - Yes. - Do you have time to save because the full amount isn't due until the home is built? Or is this a spec home that's already ready to go? - It's a spec home and I have the cash. I just, I'm looking at my savings and I'm like, "Oh, it's so big right now." (laughs) - I felt that. - Way from it? - Yeah. - Well, did you earmark it for a house? - I'm sorry. - Is this money earmarked for a home anyways? - Yeah. - Okay, then don't feel guilty spending it. I know it hurts 'cause like, what could I do with that $500,000? But there's someone else out there going, "Man, I wish I could be in that home." So, and you for sure would have an emergency fund left over after the fact? - I would have, well, so I have, I have 28,000 left in saving, but I do have 8,000 of that earmarked to pay off a credit card, that's at zero percent interest. So I have that money, that's like earning money and like a, I say what's called high yield savings thing that I have to pay off. - And that credit card's your only debt? - I have a card as well, that 10,000. - Okay, here's my caveat. If you promise me in America and God that you'll pay off the credit card and the card today, then I would feel really good about this. Go into this thing debt-free with some savings of the bank that might mean you put a little bit less down to have some cushion as you move in, but I don't think this is a bad deal. I mean, if they're willing to throw some incentives, you might be on the bargaining end here and even ask for a little bit more before you sign the papers. (upbeat music) (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) All righty, let's go back to the phone lines. But before we do, I just want to correct a mistake I made. When we were talking about retiring at any age with a million dollars, the final number was contributing $2,413 a month, $2,413 a month. That's actually closer to making $200,000 a year. Let's be fair about that. - Wow, okay, from age 50 to 65. - Yep. - All right, thank you for that. - You're welcome, you know. I just like to keep things clean. - It's who she is. - It's who I am, good hygiene. Let's go to Stephanie, who's in Springfield, Illinois. Hey Stephanie, what's going on? I really, really appreciate this ministry that you guys have. So I have, we're on baby step number two. My husband and I have been doing it for about a year. We paid off quite a bit. We sell about $54,000 in debt. But I'm calling to kind of get an idea of how to justify 'cause we are sending our kids to private school. They are 11, 13 and 15 right now. It's a non-negotiable for us to do this, but it is also our largest monthly expense when we're doing our budget. It is, oh gosh, I had it written down. It's about $950 a month. - Oh, I thought it was gonna be way more. - Yeah, I thought you were gonna be like, it's $6,000 a month. - That's not even daycare for one kid. I'm just saying, you know. Well, our mortgage payment is only 800. I do have a $600 car payment right now. So it's our biggest expense. And I think I'm dealing more with the emotions of it. Like, that could be going towards our debt snowball, but I definitely don't want to skimp on their education 'cause they're thriving at the schools of their attending. So I guess maybe my question isn't so much financial as emotional. But the question is, how quickly are you able to tackle this debt, what's your income? Like, we need to know a little bit more before we can say if this is really off the rails or not. - Okay, yeah. So after taxes, we bring in about $9,000 a month. - Okay. - Are you guys doing any investing right now? - I think I've got like $400 coming out of my paycheck a month into a deferred comp. I work for the state, so I'm in the pension program, but my actual investing separately from that is only about $400 a month right now. - Would you be willing to pause that as a concession? - The 400? - Yeah. Like, pause all investing while you knock out the debt free up as much money as possible. 'Cause what I'm trying to figure out is if you can come up with an extra $9.50 a month, would you feel a whole lot better about this private school expense? - Yeah, so we are, you were using every dollar app. You know, we're doing our budgeting stuff and we are able to throw like $1,500 to $2,000 a month at our debt right now. - Okay. - So we're making progress. We paid off a lot. We paid off medical bills and, you know, the small ones, medical bills and credit cards and things. - What are minimum payments? Because I'm just looking at, I'm just doing napkin math here, but I'm like, okay, $9,000 a month, we take out the three biggest expenses. You're down to $6,650 a month. We take out groceries, - There should be more money left over. - There should be more money left over it for you to only have 1,500. I'm just wondering, is there more? - Okay, the minimums, we've got, the one credit card we have left, it's got like a $2,000 minimum. My mortgage, like I said, is 800, - The situations are right around 900. - Right, but you should have their payment 600. - Yep, and I counted for that. So that's what gets us to the $6,650. And then if I take out your margin around $2,000, that means there's $4,650 going towards variable things in your budget, minimums. Does that feel right? - We spend probably about $2,000 a month on groceries. - Okay, that's not high but it is high for what you're trying to do, you know, it's fair to say an average family of four spending a mediocre amount on food could easily spend 1,300. So $2,000 is high. I would try to get that down to 1,100% if you can. - And if you then stop investing too, you just rate up about 1,000 bucks right there that you didn't have. So that's the sort of budget audit I would be doing, 'cause I think you'll feel a lot better if instead of just sending $950 to private school every month, you're coming up with an extra 1,000 to throw out your debt on top of that. That way you're not losing progress, put that in quotes. And I would make a goal to say if we throw $2,400 a month, $2,500 a month we're done in, let's call this, less than two years, that's pretty impressive. - Okay, yeah, yeah. Okay, so we're trying to get to a $2,500 margin. - Exactly, 'cause $2,500 you divide that into, you know, $54,000, you said as your total debt, that's 21 months. So now we have something to aim at and we have a margin goal to aim at and now that becomes the thing we're all gunning towards regardless of what the private school's costing us. - So let's now project, now that George has given us basically a little less than a two year horizon, that also puts you with a 17, almost 18 year old, getting ready to go from private school to whatever next education. Have you guys started thinking about that in talking about what that would mean? - Yes, we obviously are not in a position to say right now, but our son is very bright. So we're aware of community college opportunities, scholarship opportunities. He actually worked his tail off to get a scholarship for the private school that he's attending for high school right now. - Right, great. - So he's very motivated and I am sure that whatever he can do on his end, he'll be able to. And then yeah, obviously if we've freed up some money, we'll have some money that we can pay cash flow out of saves, but yeah. - Think about once you're debt free and you have an emergency fund that same $2,500 can now go towards cash flow and college. - Right. - And if you choose an affordable school plus scholarships, grants, then working part time, I think this is a very doable process. - Just getting ahead of it and thinking out like you have been, I think it's so good. A lot of people get in Stephanie's situation and they're so focused on the debt they're not thinking about the next thing that's gonna be kind of banging on their door after that. - The next monster down the path. - But having that conversation with your kids early so that they know here's the expectation, mom and dad didn't get a chance to say for that. So we're doing scholarships, we're doing a community college, you're working and we're cash flowing. That's how this is gonna work. Very, very good question. You know what, George, I like to go to these social questions a little bit. - Sure. - These are some of my favorite. - The world is your oyster. - Yeah, I mentioned it before. We have some really great communities online. Obviously, George is social in my social. We also have a really great Ramsey baby steps community on Facebook that's got tons and tons of followers. - It's bumping in there. Sometimes I'll jump in just to create some chaos. - I like that. You jump in the comments? - I do. - I've done it before. - Sometimes I get tagged in there too and that makes it extra fun. - True that, yeah, hop in there. If you've never seen it. Well, anyway, Jason from the baby steps community said, if we can easily cash flow college tuition and expenses for our three teenagers, are we doing them an injustice by not allowing them to learn how to pay for it on their own? What a great question. - I don't think it's an injustice to cover your kids college. Now, if they have zero work ethic and they're just entitled brats, that is your fault. That is an injustice. You've done them dirty on that. But if they can learn how to pay for other things on their own that they just are wants. - Yeah. - I think that's fair. I'm totally good with covering education for my kids and it's a goal of mine. And as long as you raised them right, to go, "Hey, money doesn't just grow on the trees." - That's right. - You gotta go out there and hustle and work for it. And if you did it right, they've been doing this with other things in their life. Saving up for the video game when they're younger. Saving up for maybe they're paying half a car and you're paying the other half once they turn 16. - Listen, I agree wholeheartedly, there is part of me. I will say and it depends on the kid 'cause every child, every teenager is not the same. But some teenagers do need a little skin in the game so they feel like they've got something on it. I just remember my freshman year. There were a lot of people who didn't make it back to the sophomore year because they flunked out. - And it's like, you need a little skin, you need a lot of money and some hard work that you wanna make sure there's something to show for it. - You don't wanna unlimited like, Scrooge McDuck pile of money for them to blow through. - Right. - But I think covering tuition, room, board, that's fine. But I wouldn't fund their lifestyle on top of that toward they just can do whatever they want. I'm going, "Hey, you gotta work part time if you want some fun money to spend." - I saw a social media post and a guy was basically saying, "My wife and I saved up and we basically bought homes for our kids and covered this and that." And he said it was the worst thing they ever did because they're all brats and they're all like, not knowing how to take care of themselves. And so to your point, it's about- - They were brats before him. - Yes. - The home didn't do it. It's about the children that you raised, not the generosity that you gave them. - So then the other side of the spectrum is this, which is I'm gonna punish my child. They must learn. They have to cash low $100,000 a year, even though I have the money. - Listen to that to your kids. - Yeah, there's a generosity play here and if you can ensure that your kids enter the world without student loans, you have given them a leg up in society and they will be forever grateful for you if you raise them right. (upbeat music) - Hey, what's up guys? It's Jade Warshot. Now, I know a little something about saving money while my husband and I were paying off over $460,000 in debt, we went over every expense in our budget to find ways to cut back. Nothing got a free pass, including our phones and you need to be doing the same thing. And now with Boost Mobile, one of the easiest places for you to save money is your phone bill. Their unlimited plan is just $25 a month forever. With a price that nice, why would you ever go back to your old carrier? And with Boost Mobile, there's no contracts, no hidden fees and no surprises, which makes this a no-brainer when it comes to saving money. Best part, you can keep your phone and your number when you switch. So it's not like you're making some huge lifestyle change. Listen, you need a phone, but you don't need to be overpaying every month. So whether you're paying off debt or building wealth or you just wanna keep more of your money in your pocket, this is a win. 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. (upbeat music) - Welcome back to the Ramsey Show here in the Fairwind's Credit Union Studio. Continuing to take calls about your life and your money. George is next to me. I'm Jade and Matthew is on the line from Oklahoma City, Oklahoma. Hey Matthew, how can we help today? - Hi, how are you all guys? - Doing all right. What's the word? - So eventually I just want to know what I need to invest in too and what my monthly budget needs to be to become a millionaire. - Ah, we love this question. We were just talking about this earlier. - It's right. So what's your current status? Where are you at financially? - So financially, I have $4,000 in debt and it's on my truck. It's almost paid off and I bring home $100,000 a year. - Great, you have anything in savings right now? - I have about $5,000 in savings right now. - So you're telling me you could pay off the truck today and still have a thousand bucks left over? - Perfect. - Yes sir. - And free up that truck payment, which is how much? - It's only $437 a month. - I don't like only in front of any debt payment. So you free up $437 and then you can begin saving up a fully funded emergency fund of three to six months. That's baby step three in our plan. How long will that take you? Let's you free up the truck payment today. - It probably took me five weeks to save up $10,000. - Wow, that's impressive. - That is. - So you can save two grand a week? - Yes sir. - Wow. - How is that possible? There's 52 weeks. So you're telling me you can save up 100 grand a year but you make 100 grand. - Are you living at home? - So currently I'm on the road right now and I stay in a apartment here in Helena, Montana. - Okay. And so your expenses are low but they're not zero. So. - No, no, they're not zero. No, that's true. So each month is basically off of hours. So some months I make 10 grand some months and make 13 grand. - Got it, got it. Okay. - Okay. - I'm 21. Oh my gosh, this is fabulous. - You got this stuff early. I mean, think about that dead free at 21 with some savings in the bank. You're so far ahead of the curve. - Yeah, and making 100,000 if you're investing 15% once you save up that emergency fund, you're investing 15% that's 15,000 a year. And if we divide that by 12, that's $1,250 a month that you're putting aside. This is off of your growth. income. And that's just going to compound over the course of your life. George, are you plugging those numbers? I got it. I wish you could see the screen right now, Matthew, but you're about to have your mind blown. Because if you follow what we're teaching you, let's say by the end of the year, you have an emergency fund saved. Is that fair? Yes, sir. So we start 2027 investing 15% that's 1250 a month of your income. We're going to do that for 39 years. Let's say it'll bring it to 60. Is that fair? Yes, sir. Okay, with an average rate of turn of 10% that's because of compound growth. Totally fair. Because you're investing, not saving, you would have $7.1 million. Wow. Wow, I think that able. Which means you'll be a millionaire well before 60. It's just going to continue to compound until you get to the seven. And that's if your income never goes up. Yes, sir. So that's your commitment you're making to yourself is that I'm going to put 1250 away and learn to live on whatever's left. Yes, sir. How does that feel? That was awesome. I just wanted to talk to you guys. So y'all could talk and send them to my like talk to send them to me. Yeah, why do you think you need to kick in the pants here? Yeah, have you, what have you, I mean, obviously you had some debt on the truck, but you're just getting started. You haven't had a chance to mess up just yet. And that's another thing. It's so funny about this. I won't have a mortgage because my father and all actually gave me my wife a house. Wow. Congrats. And you're married. We didn't know that. What's she make? Yes. Uh, she is currently in college. Okay. So to George's point, that's paying off the student loans. Well, actually, we'll have any student loans. Her dad's just paying for college. That's excellent. So you add her income into the mix and you guys are going to be super wealthy, my friend. That's the, what's the goal? Now, do you have an employer retirement plan? Yes, sir. What is it? Uh, so it's a pension and annuity. And they take basically every hour that I work, they take what I make an hour and they put it into a pension and annuity. So basically, it's two of them. Is that required? Or is it optional? I think I really don't know. I just started working here in January. Okay. I just don't love. I mean, pensions and annuities just have crappy returns and you have no control over them. So I'm wondering, maybe you fully fund a Roth IRA on your own because you have earned income. You can do that outside of your employer. And that's $7,500 is the max for the year. So you could fund that thing and still, you know, invest in your own retirement plan. The pension annuity, is there any, are they matching what you contribute in any way? Or it's just a place for you to park the cash? I don't know if they're matching at all. I think they just take basically what I make an hour and the hours of the year I work, they put towards it. Okay. Yeah. I'm definitely with George. I like that. And I would love for you to just kind of get a little bit more well versed on our investment strategy. So you can go to ramsysolutions.com/smartvester and just kind of learn about the best way to do that. We suggest investing your money over four different types of mutual funds, growth, growth, and income, aggressive growth in international. And if you can start to do that and just start getting that ball rolling, gosh, like I said, with your wife included, once she gets out of college, you guys are going to be rolling, rolling, rolling. You're going to be calling us back one day saying, I've got a $10 million net worth. I know. What do I do now? That's crazy. You know, I think I actually feel like it's impossible for that to really sink in in a moment. Yeah. Well, it's hard to forecast 39 years for now. Sure. But the truth is, I mean, gosh, if the market continues to do what it has done since inception, basically, yeah, that's a true scenario, you know, hoping that the United States doesn't implode. It doesn't it all. It doesn't all come down like John Delbuti would say. It's all very optimistic when it comes to the US economy. It's somehow keeps going. It keeps hitting record highs. No matter what's happening in the world. Yeah. That's true. That's true. All right. Back to our Facebook community questions. Actually, I've got one here. Yeah. They're all from Facebook. So Dean said, is it okay for a single person to get insurance? My 28 year old son wants to get a policy that would cover his mortgage because he wants to provide for us if anything happens to him and to cover his funeral expenses. Is it wrong for him to do this? Wow. I mean, is he living with you? It's just a cover that would cover his mortgage. Now, I think it is wise to have enough life insurance. We say 10 to 12 times your income. Yeah. And so that would definitely cover the mortgage and then some and funeral expenses, but I wouldn't get it. I guess he's single. So yes, it is wise to do this while you're single because you are young and healthy and the turn life insurance you get is going to be cheaper. Yeah. Absolutely. In the next couple of years, you might meet someone nice and you don't know what your health is going to do either. And that's really more what it's for because you're thinking about people who depend on your income. That's one of the primary purposes of it. And so I like the idea of him getting it young when he can lock it in at a low rate. But the purpose of it is more so to your point, what is life is going to be in the future? Maybe there'll be that special somebody who's dependent on him, but not for the parents necessarily. No. And both both Jay and I have our life insurance through Zander. And so if you guys want to check that out and get a quote from them, go to zander.com 10 to 12 times your annual income on a 15 to 20 year term. That's what you're looking for. Because if you follow our plan, by that point, you're going to be self-insured when the insurance expires. You don't need this whole life or permanent life insurance craft. Get a good level term life policy through Zander. Hey guys, Dave Ramsey here. Every day on the show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help any time with ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show, whether you're making a decision or just want something explained, ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try ask Ramsey today. That's RamseySolutions.com. All right, well, let's go to our Ramsey show question of the day, which is brought to you by YRIFI. If your private student loans are in default, or you're not sure what to do next, YRIFI can help you explore refinancing with low fixed rates and a payment plan that's based on what you can actually afford. So go to YRIFI.com/Ramsey. Remember, that's the letter Y-R-E-F-Y.com/Ramsey. It may not be available in all states. Today's question comes from Todd in Alabama. Our eldest son is 16 years old with a new driver's license. He regularly drives one of our vehicles. My wife does not want to add him as a license driver on an insurance because she knows the rates will go up substantially. She states that our insurance agent said it would be fine, and if he gets in an accident, they'll just say he was using it that once. Oh, I fear this could have serious financial repercussions as I can't imagine a scenario where the insurance company buys the story and just pays up. Should I go along with this or insist that we add him to our policy? What in the world? Why is this even? Who is your insurance agent? So I guess it should be fine. Just say it was a one-time use. That's pretty bad. That's crazy work. I mean, yeah, I would definitely add them. It's just a fact of life that insurance for a 16-year-old is expensive, and it will go down over time. So budget for it, have them working part-time to help cover all or if not most of it, have some skin in the game because you drive differently when you're the one paying that insurance bill. And there's some things you can do to help it out a little bit. The color of the car batter is making sure it's a nice used model pay cash for it. Those are some little things that can maybe bring it down. Now's not the time to get a brand new red Civic. And the other part is there could be some discounts, good student drivers at discounts, higher deductibles if you got a solid emergency fund. There's a lot of things you can do to lower that premium. And so if you want a second opinion and I would get one because I don't know who this insurance agent is, I would jump on Ramesysolutions.com and you can find a Ramesy trusted insurance agent to help you find the right coverage of the best price and looking to all the discounts and premiums and levers there. I got to say that might be some of the worst like second-hand advice that I've ever risked at all on a 16-year-old. My goodness gracious. Just budget for it. My goodness. All right, let's go to Tony who's in Lexington, Kentucky. Hey Tony, you're on the line. Good afternoon. Well, let me give you a little bit of background before I get into my question. In the last two and a half, three months ago or so, my life I've had two accounts that have been hacked and we were to about $70,000. Oh, what kind of accounts were these? Well, the one was an interest-marrying check-in account that we had for a number of years. We moved into a new house about 1450. months ago, and we were using that account on our to pay on mortgage. Now, when you say hack, does that somebody there was fraud and they spent the money in the bank would not return it to you? Oh, no, I've gotten the money back. We've gotten the money back. Okay, good. We in June, we had sent in July's mortgage payment, and we've been adding to the principal, and that check was for just under $22,000. We found out that somehow that check was making through the mail. I'm not sure where it made it, but the bank used the term that the check was washed, and someone cashed took off the mortgage company's name, but somebody else's name on there and was able to cash it. Oh, my God. They can't trace it. Well, no, they traced it, it said it was cashed in in Dallas, Texas, according to the information that the bank gave us. We did get the money back, and we opened another account. We couldn't close that one entirely because we had some direct deposits going in there. What's your question, Tony? I want to make sure we have time to get to that. So you've got all the money back. You're not out of pocket. Yes. Okay. Well, in that new account in late August, that new account, someone got that account number, and they printed a check on that new account number. Accounting was two months old, and it was for $48,000. Did you get that money back? Yes. We got that money back as well. Okay. Good. Both of those instances caused me to think about the security of our money that we got in our A's and investments, and at one time to figure out at what point in our lives were 75 right now. At what point in our lives, should we begin looking at moving some of those funds into a, neither one of those are in high risk investments, but I'm assuming at some point in our lives, we want, they want to look at changing, moving some of those into less risky, whether it's, whether it's some CDs or whatever. Well, I hear two different things here, Tony. On the one hand, I hear we've dealt with our accounts just not being secure. They keep, you know, we keep getting our identity stolen. We keep having fraud and theft. And then on the other hand, I hear, well, the investments that we have, shit, at some point, do we want to move them into something that's out of you's your words less risky. So I think those are two different, two different ideas. The first one, let's talk about the identity theft. I would just sign up for Xander ID theft insurance. And they're going to help you stay ahead of these things. They're going to alert you when somebody has your information. If somebody does steal your information, they're going to go to bat for you. So I would check into that. You can go to ramseysolutions.com/insurance. It should be there, right? Yeah, Xander.com. You'll see it right there on the homepage. So you'll have financial protection up to $2 million through that. So that's one step to take. I would also make sure you got, you know, two factor authentication, all these accounts and good passwords and all that stuff. But this is crazy. That has happened that many times. And then to Jade's point, there's a different thing you're worried about, which is market risk, which is the market volatility. Yes. So how much money do you have in the between the IRAs? It's not a whole lot. We only got a little over $500,000. Our retirement income is fixed with four separate incomes at about $120,000 a year. Fantastic. So you don't even need the 500,000 number term? No, we haven't, since we've been retired, we haven't, we haven't done anything as far as getting anything out of those IRAs or investors. Good. Well, in that case, I would be investing more aggressively because you're not needing to touch it. And then whoever gets to inherit that one day, what a legacy you got to leave if that money doubles in the next seven years because it was invested well in good, gross, stock mutual funds instead of a bunch of CDs earning three or four percent. So if anything harder, invest more aggressively, not less aggressively, since you don't need the money. So you've got two pieces of homework, Tony. We want you to go to zander.com and pick up that ID theft protection. And then we want you to go to ramsie.com/smartvester and you'll find a smart investor pro who can help you invest this money just the way that George is teaching it. It's going to be somebody who has the heart of a teacher. They're going to send you several different pros and you're going to be able to vet and interview them and decide who's the best person for you to work with and order for you guys to do this. I like that plan. Go ahead. I was just wondering, Dave and I talked about this in our investing essentials virtual event because there's an asset allocation theory that he talks about and everyone goes, "Hey, you're 60. It's time to really get spooked and put half your money in bonds." Well, here's the problem. If you make it to 60, you have a good chance of making it to 70, 80, 90 if you're in decent health. And so that's a problem. For 30 years, you're missing out on market returns with half your portfolio. And that's why Dave sticks to 100 percent equities. Absolutely. And so that's my plan of retirement. And we're not saying have no money in the bank. You can have a year of expenses to help protect you in a market downturn. Even two years of expenses, socked away in a high yield savings account. That's liquid to help you there. So that would be my strategy and retirement. That's what I plan on doing. Keep the majority invested. Keep it in the same growth stock mutual funds you had up. But keep a nice portion. Whatever makes you feel good. So if the market's down 20 percent, that's the worst time to take money out, of course. So you can go to use your cash. Replan the shit once the market is back up. And remember, you're not taking all the money at once. You're just taking what you need to make it through that month through that year. Yeah. So don't get spooked by that. I love that strategy. And for anybody else listening, if you don't have Xander ID theft protection, you need to get it. It costs a couple of dollars a month, guys. It's really inexpensive. But the protection that you get is totally worth it, especially in today's day and age. Hey, it's Dave Ramsey. If you or someone you know owns a small business, listen up. What if you could build the kind of business you'd be proud to hand down to your kids? For 30 years, I've been able to build Ramsey Solutions into a business that's going to be a blessing for my kids. I'll show you how to do the same thing at Entry Leadership Master Series November 8th through the 13th. During this five day conference, you'll get my strategies for building a winning business that outlasts you. Visit RamseySolutions.com/MasterSeries for tickets or click the link in the show notes. Well, George, for the folks who filed an extension here in 2025 for their taxes, just know that October 15th deadline is coming up pretty quickly. It's right around the corner. In the good news is, you do have a couple of options on how you can handle this. Number one, if your taxes are pretty simple, pretty straightforward, you could just use our Ramsey Smart Tax. It makes filing simple, affordable, and there's built-in support if you need it. But if your taxes are a little bit more complex, if you're overwhelmed, then you probably need a tax pro. You need to help you make a plan. I mean, gosh, nobody wants to face the IRS without a backup plan. So go ahead and hire a tax pro. But if you're not sure what to choose, you can go ahead and take our tax quiz. You can find that out real quick by doing that and you can find that tax quiz at RamseySolutions.com/TaxQuiz. All right, let's go to Mandy, who's in Mill Walkie, Wisconsin. Hey, Mandy, how can we help today? Hey, thank you for taking my call. I'm excited to be on the show. Yes, ma'am. Thanks. So my question is, I've been sleeping on some debt. It's been on the back burner for about 15 years. We just had our last baby. I'm pretty sure. How many total of them? This was our third, our third girl. Fun. Wow, three girls. Yep. And she's a month old now. So, um, so yeah, I'm thinking about going back to work soon. I've got about six more weeks of my leave. And I think when I go back, it's going to be really time for me to get started on that debt. Is it just you or you and your husband? Oh, yes. I'm married. It's me and my husband. But the reason I say it like that is because the debt is technically my student debt. Okay. I know it's, it's both of ours, but I feel responsible for it. But are both of you going to pay it off or is it just your income that's going to attempt to do that? Yeah. And this is the one part that we're doing for Dave ish on is I think I'm going to try to start this off on my own. Mostly due to just a feeling of guilt and shame around the debt. That's never a good reason to do anything, is that I'm guilt and shame. What does your husband feel about this? If you talked to him about this and said, hey, once I'm done with leave, I really want to attack this debt. What would you say? I think he would do it with me, but I think it would be, I'm not sure if it would be something he's going to love to do. If I could do it myself, I would, and I just got my new job with a really great salary. Okay. What are you going to be making? Well, okay. When I say really great, I mean, for me, it's really great. It's about 90. That's excellent. Okay, and how much debt do you have total? 53,000. And that's all the student loans. It's all student loans. It's consolidated. Can I ask a quick question, though, before we move forward? So I hear what you're saying, the guilt, he might not like this, but do you guys combine your money? Do you combine it? Like, do you live off of combined funds and everybody, everybody's money, is everybody's money? Or how do you guys move? Yeah. Like I said, it's a little davish in this one way. I don't see where Dave is in any of this right now. What part of this is the Ramsey Plan? I know. I'm sorry. A joint checking that we use for, you know, all of our share and keep put some money in there. You put some money in there and then you keep the rest of your monies for whatever your purposes are. Yep. That's how we do it now. It could say. Okay. Before we go into this, I can't leave this alone. I would, do you want it to stay that way or do you want it to change? That's a good question. I never actually really thought about. Let's put that on your list of things to do tonight. Because I want you to decide what you want your life and relationship with money to look like with your husband. Because it does feel separate, you know, George said it and I'll say it too. It's really hard to accomplish goals together when you're money is separate. And just on another layer, I know you didn't ask for this but it's very hard for me to just walk on past this. There's clearly some element of trust that's not there. Because when you get married, you do, you want to become one and you want to have such levels of trust and transparency that what's yours is mine and what's mine is yours. You people have three babies together. So you have shared on a molecular level. And yet when it comes to the money, there's like this weird separation. Does that strike you as a little bit odd? Yeah. Yeah. And we do and I wonder if it's really because we haven't had a big reason to really put it together. Yeah. And, you know, I guess this could be a good reason for us to do that and get on the same team and it could be a conversation. Well, does he have any good? He doesn't have any dad. How do you know? He's had a few, well, he's had a few credit cards that he told me about that are paid off like store credit cards. And I never really dug into the questions on it because I trust. Well, that's true. But that's where I just want to call that out. That's where the layer lies. So when there's when there's transparency built in, it's just baked into the way we do our lives. And you don't have to be detectives. I can just see it. I don't have to ask my husband, do you have debt? Is it a store card? What did you buy? What did you do? I don't have to remind myself to ask questions or dig deeper. It's just right there. And so there's kind of like an easy button that you're inserting in your life. That's like, okay, now we can just see I don't have to be a detective. I don't have to grill him. We just have one account, right? And so it does. It does add a level of ease there. So anyway, just add that to your list of thoughts and things to think about and just know all levels set with you. This is probably if you do decide that you like this idea and you want to start combining, it's not going to be one quick conversation. It's probably going to be an ongoing conversation with him because you've been doing it like this for 15 years or however long you've been married. So just set it up. Okay. Back to the debt. Back to the napkin math here. So you make you're going to be making 90. How much could you realistically throw at the debt every month between the minimum payments and the extra? You know, we do have some expenses with the kids in daycare and rent. We're renters. I thought about it and I thought that the most I could do is, oh gosh, probably no more than 2000 a month. Okay. So that means it would take you if you did it that way and really committed to it, it would take you a little over two years. And that would be hard and that's just my, and that's me calculating on my income. Now let's pretend he's on board. What does he make? Well, that'd be different. Yeah. Well, he makes about 65,000. Okay. A year. And how much margin? Let's say you guys did a budget together and you said, hey, we're going to attack this debt with a vengeance, which means everything that's not an essential expense is going to go toward the debt. Could you guys put three grand toward the debt, four grand toward the debt? Yeah. Well, I didn't do that math problem, but I think we probably could. Imagine this. You guys have a great income, right? We can all agree, $150,000 is a fantastic income. If you could throw $4,500 this debt, it's done in less than a year. Oh my gosh. Instead of over two years, it's under one year when you combine your powers together. So that's where I'm trying to say, if you're saying, how do I commit to this? The hard part about commitment is the longer it takes, the less likely you are to finish. But if you just see the live at the end of the tunnel, 12 months from now, and you both are looking towards that, it's going to happen and it's going to actually make your marriage better. Wow. I love that. Yeah. Thank you for that advice. I'm giving you a marriage life hack here. I've never seen a couple who paid off the debt together, regardless of whose debt it was, who didn't walk out of that stronger as a couple, more bonded, more communicative. So that's what I'm saying. If you can get them on board, you don't just solve your debt problem faster, you solve a marriage problem. Yeah. Yeah. But I don't know where he stands on this. He might be, he might be going, oh, we're not combining. And then you can get to the bottom of it. He does think it's kind of dumb that I am in debt. And I think so too. Yeah. Fair enough. But the question is, you know, part of marriage is having that person who's there for you come hell or high water, you know, and that's kind of like part of the vows, like better or worse, you know, sickness and health. And probably somewhere in there, they should be saying, you know, debt or debt freedom, you know? And it's like, and it's true, you know, just to quote Dave Ramsey, he says it, you know, when you get married, he become French and everything becomes we we. And that includes the debt. But I understand where you're coming from when my husband and I got married, he had the majority of our debt. And he felt some type of way that I was having to take on that burden too, but I was happy to take it on because it's part of showing your commitment. It's part of showing your loyalty and your husband is probably anxious to show you his love and loyalty. You've heard from me and the Ramsey personalities for years, but nothing beats actually getting together in person. That's why we created the live like no one else crews. For seven days, we're vacationing with you and 2,500 Ramsey people in the Western Caribbean. With live shows, us, new content, us, and more. If you're on baby step four or beyond, come spend the week with us next March. Use your cabinet at RamseySolutions.com/events or click the link in the show notes. Well our Ramsey show scripture in quote of the day, Romans 152 says, "Our goal must be to empower others to do what is right and good for them and to bring them to spiritual maturity." Well that Ronald Reagan said, "When you can't make them see the light, make them feel the heat." Okay, that's spicy, Ron. Okay, Ronnie. Golly. Make them feel the heat. You don't want this smoke. Let's go to Jay who's in Houston, Texas. Hey Jay, how can we help today? You don't call him because I have some financial problems and some legal problems that are stressing me out and making you depressed. Maybe we can help alleviate some of that. Tell us what's going on. Okay, I had to put out a loan on my home to pay for the legal bills and hire an attorney because of ongoing problems I've had with my neighbors. Okay, so are you suing your neighbors? Am I doing well? Are you in a lawsuit with your neighbors? No, I'm not in any litigation. They filed some false charges against me and I had two hire an attorney to fight the case which was dismissed and I'm waiting for it to be externed and I'm not able to find employment until that is externed because when I look for employment opportunities, when they Google me or the employers who are background check is coming up. Gosh, so how much did you borrow to pay the attorneys? I borrowed $25,000 because that was the minimum but I had to pay the attorney $12,500. So you've still got another 12 or so that's sitting around. around or did that go to something else? - No, it's just fitting, it's 17, it's fitting. - 17,000, okay, and was that a home equity loan or a line of credit? - Yes, it was a home equity loan. - Okay. - Okay. - And this is still going on, it's been going off for 10 years with the neighbors. - 10 years? - 10 years, going on constant. - Just move at this point. - Yeah, why not? - I cannot afford to move at all, cannot. - Do you own the property? - Yes, I do. - Okay, and what's the property worth? Tell us more about that. - It's probably worth about close to 300,000. - Uh-huh, and what do you own it? - About 85 between 80 and 85. - And so there's not a scenario where you could sell it, take the equity and put it down on another house in another location? - I can't afford it because I don't have a job, so I would need to have employment to do all of that. - I understand for the moment you don't have a job, but I'm going to get to that, but I'm saying in a situation where you have a job and you're able to take that equity along with your income, 'cause that's a healthy down payment elsewhere. - Yes, but I have a very, very low mortgage and the interest rate is great. Over the market that it is, now I can't afford that, it would be too much. And I can't live in a senior, fitted for a facility because that's triple or quadruple the mortgage payment. - What were you making at work? - Around $20 an hour. - Okay, so about 40 grand a year. And is there anything you can do in the meantime, any kind of work, gig work, to supplement, to make 15 or 20 bucks an hour? - Everybody's doing the background check and that's still pending online. - Thank you. - What's the current timeline to get it expunged? Have they told you? - Well, they said October 19th, it should go before the judge because I found my own expungement paperwork 'cause I'm apparently going to suck how to know how to do that stuff. I have to wait for the judge to rule on that, whether they're gonna have it expunged, then it has to go through all of the entities that I listed that I want to be notified so that it won't appear on background checks and government websites and different things and groups and like that. - So I'm just in a holding pattern right now. When you're living off the extra 15 or 17 from the HELOC or from the home equity loan. - No, I just put that on my savings. I was able to get unemployment and I have a small social security. - So is that covering all of your bills right now? - Yeah, it does cover. - Okay, so you can continue to make your mortgage payment and cover your bills without touching that 17K? - Yes, I can. - Then I might turn around and pay that right back off. I might, if you don't need to touch that money, whatever you didn't spend, you only spent the $12,500. I'd probably take the 17, if that's your only debt, I'd throw it right back on that $25,000 loan, get a head start on paying that off because eventually you're gonna wanna do that. - Okay. - Now, I'll bring your debt down to $8,000. Is that all of your debt? - I have a student loan, but they haven't come after me for that yet. That's about 60,000. - 60? - 60, 60. - 60. Okay, yeah, I think you're right. I think you are in a holding pattern, at least making what you were making. But in the meantime, October 19th, I mean, if you can get out there and try to do something, come up with a gig or something that you can offer maybe yes, but it sounds like you've got at least your four walls covered, you've got money keeping this going. My biggest thing that I hear Jay is staying in a location that has caused you so much grief for so long, I actually, yeah, I actually, I mean, you called us and I'm here on the outside. I actually do think that you can move. I look at you and I go, okay, $300,000, how she only owes $85? Gosh, that's almost, you know, $200,000 of equity there for you. Let's take that. Let's go put it down on something else. Yes, the interest rate is gonna go up. We can't change that. But at one point, you were making money, you can make money again. You're making $20 an hour. Can we up the income in some way, right? So I don't think you're up against a corner in the way you think. I think we just need to expand our horizons a little bit and it is going to feel like a major change. I don't have any retirement. I'm sorry, I don't have any retirement savings. I'm gonna say that. How old are you? Very, it's quite sick. Almost 70. You're almost 70. Okay, let's roll back. 'Cause I was listening to you sound like you're 33. Okay, 70 years old. I think that but no. Okay. That's a good thing. Okay. So the neighbors are. Can you tell me a little bit more about this? Are they going anywhere anytime soon or have you guys just been feuding your whole lives? It's feuding. They're very wretched and ghetto. I don't know if you understand that. I understand wretched and ghetto. 100%. My friends are on my property lines. I had to hire a subversive surveyor. They're building a stance on my property lines. And back and forth with legal issues for 10 years. None of my friends want to come visit at all 'cause they get harassed and threatened by the neighbors and the police don't help. And that's the part, Jay, that I think about. I'm like, gosh, is that the way you want to live in your 70s? Or can you go somewhere else? Maybe you downsize a bit. And I know what I'm asking is big. But this is for you. Maybe you go to a condo or a townhouse. And you spend a little bit less. You put down a big down payment. And you still make sure that that payment is, you know, no more than 25% of your take home. At the very least homework for you, I would love for you to just look at what's out there. Use our calculator. We have a really great resource. It's our Ramsey mortgage calculator. And start plugging in some numbers because I think that you have, once you get work, I think you have more options than maybe you think. And it might be a good thing for you, too, to get access to some of that money and have liquidity. Maybe we can invest a chunk of it so that there's some money that's growing for you. But stay, I don't know, George Stan, where she's at feels. - Yeah, 'cause there's a long-term problem, too, of just how are you gonna retire? Regardless of what happens with this case. And I also think it's overblown what's happening with the background check because appending, you know, you didn't actually get arrested. And so, and even if you did, you weren't convicted of anything. - Right. - And so, if there's just a pending charge that shouldn't stop you from getting any job in the world, there's convicted criminals out there who are working and have gainful employment. So, I think you need to keep doing your homework on that side and they can't discriminate based on age. And so, there's work you can do and figure out what that is based on your current health, your ability to drive and do some of this gig work in the meantime, 'cause you can replace 20 bucks an hour pretty easily in today's economy. - Yeah, I think so. I mean, at 70 years old, it could be tough, but I think the biggest key is your money, your nest egg is in your home and you've pointed to your home being in a location that's an issue. So, maybe it's time to get access to that nest egg, let that money grow for you and get in a less expensive living situation, maybe a condo and that could be the answer. - One with less troublesome neighbors. - Yes, gosh, you know what, neighbors do affect your quality of life. You got to get next to some good ones. - And it's hard to choose them. - Yeah, you don't want riff raff as my parents used to call. You don't want to live next to riff raff. All right, guys, well, thanks for hanging out with us. Remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.