Make a Plan for the Life You Want

brought to you by the every dollar app start budgeting for free today normal is broken common sense is weird so we're here to help you transform your life from the ramsey network and the fairwinds credit union studio this is the ramsey show i'm george campbell joined by jade warshaw it's a free call at 888-825-5225 you guys are the content you are helping so many people out there with your situation and we are honored to take your calls so call us up brad kicks us off in philadelphia what's going on brad hey guys how's it going thanks for taking my call absolutely how can we help yeah so um yeah i have just absolute tremendous respect for you guys i mean you guys have helped me and i'm sure millions of people get out of financial trouble like get rid of destructive debt shoot take control over their lives you know um but you know i'm 33 years old um i work a lot i'm very heavily invested in my career and currently i'm sitting at about two and a half million dollars in debt and i just kind of wanted to get your guys opinion with the best way of managing debt being in the situation that i'm in and seeing what you guys had to say please tell me it's real estate debt what kind of debt is it so two hundred and thirty thousand dollars is in um a condo loan that my business operates out of um my business currently has two million dollars on the loan um i have a hundred and fifty thousand dollars in student loan debt what kind of business is this so i own a dental practice a dental practice a dental practice yeah okay so when you say you do the business out of the condo are you doing dental work out of the condo yeah so my dental practice operates out of the condo that i own and then the practice itself has two million of debt yes was that for equipment startup costs it wasn't a startup i acquired the practice back in 2024 um you know that's just that's the valuation of the dental practice when it was scaled up to that point are there any other partners or it's just you it's just me okay what um is this what you planned for or is the practice not performing well or when were you supposed to break even i guess is my question yeah so i it that's totally what i planned for um you know we practice was valued at 2.12 million dollars when i purchased it i've been able to scale it up and grow the revenue from 2.7 million dollars per year to about 3.3 million dollars annualized for 2026 but how much profit what's the net profit on that so my all my tax returns i do about a million dollars a year personally okay with my take-home being about sixty thousand dollars a month okay is there a way so with that with that planned in that way when did you or did you ever plan to have the business out of the condo practice pay down the debt like what was the plan for the debt just to kind of keep it revolving or what was your plan just as long as it's manageable and it seems like it's been pretty manageable but i just i just kind of again i wanted to get your guys's opinion with if the way that i'm managing it is the best way of managing it or if i should just adopt a different philosophy i mean i can tell you sitting here i'm stressed out just sitting here in this chair because i'm just feeling two million dollars on my chest and i know as a business a former business owner uh my husband is runs our business today but the feeling and the choices that i would make if i knew there were two million dollars in debt on our names would have the ability to to change the way that i'd like to do business if that makes sense yeah and i think i think i i i think i was in very good company with that with that mindset really early on you know i think i was in very good company with that with that mindset really early on you know i think i i think i was in very good company with that with that mindset really before i got into ownership you know when i finished up undergraduate and dental school and i was working for someone else but then i i kind of realized there's there's like that opportunity cost of if i don't you know if i if i don't pay off my student loans aggressively on the way out of immediately out of dental school you know and instead you know build a little bit of liquidity there and be able to meet the liquidity standards to finance a large cash flowing asset you know once i kind of had i think i had that mindset i was like oh my god mindset i think it was just a fundamental shift there you know and i'm just curious if that's so well how much let's stop talking philosophy let's talk hard numbers here how much are you actually living off of and how much are you throwing at the debt so my so the debt on the condo is eighteen hundred dollars a month the debt on the practice loan is nineteen thousand dollars a month um the debt on my student loans is nine hundred dollars a month over 30 years okay so about 21k gets you minimum payments then how much do you need to live um personally rice and beans beans and rice i'm about forty thousand dollars a year thirty five thousand dollars a year for real you're telling me you can live off like three or four grand a month just for your expenses yeah no family it's just you no it's just me i'm not married no no wife no kids no it's just me but you're telling me now you're saying could you take home more than a million is that like an owner's draw or could you take on more for your three is the net profit higher than a million i pay myself a straight salary as an employee of my practice and then i have the rest of it run through a schedule k on my returns but could you pay yourself let's say a hundred thousand dollars a month um sustainably no i mean there are some months where i could so give me a number that feels good that's sustainable sustainable sixty thousand dollars a month okay and your expenses you just told us take home 25 26 is your actual bare bones expenses and then you're like okay i'm gonna pay myself a million dollars a month which means mathematically you could throw like thirty five thousand dollars extra on these debts per month i could but then it's like you know if i if i paid the debt off early which i certainly could then i'm subject to a prepayment penalty on what part on the practice loan and on the condo loan what is it what's that what is the penalty penalty um it's it's truncated based off of how early i pay off so let's pretend you paid it off in five thousand dollars a month three years four years what would the penalty be i'll have it right in front of me is probably five five or six percent of the outstanding loan balance okay so let's say it was down because my guess is if you let's say you could really throw 55 000 bucks a month towards your debts between the minimum payments plus the extra that would mean you could pay it off in about 44 months now let's give or take interest let's call it four years would that be a good goal for you to be completely debt-free in four years yeah so like that regardless of penalties yeah that's definitely math yeah that's definitely mathematically feasible but you know i feel like in the in in the short and midterm what that will be doing is that be reducing the ability of me to grow and expand my practice you don't need to go and spend it you're making killer money right now let's focus on the cancer that's growing instead of what could be because i think you're a super sharp guy you can expand this thing into oblivion if you wanted to but right now what you're telling me is i would rather stay in debt probably maybe even take on more debt to expand i don't know what that takes in a practice versus knocking out the mess on this side that you could knock out in less than four years and that's insane that you could knock out 2.4 million dollars in less than four years that's what i would be aiming at otherwise this is going to be a slog to get through over a decade of trying to navigate prepayment penalties and scaling the business i would be focused on one thing and that is debt freedom if i'm in your shoes imagine that making 60 grand a month with no payments in the world that is mind-blowing brad and the fact you can get there in less than four years is even more mind-blowing so you get to decide we can't decide for you we gave you the path it's what we would do if we are in your shoes that's the only way we can answer it best of luck you getting my identity stolen was one of the most nerve-wracking experiences of my life i thought strong passwords and two-factor authentication made me pretty hard to scam but it didn't and that was more than 10 years ago before ai made scams even trickier now criminals can fake websites clone voices and run scams in ways that are harder to detect making you more vulnerable than ever before now thankfully when my identity was stolen i was able i had zander id theft protection in my corner they already had great tools to monitor things i would have never thought to watch like my home title and any bank or retirement accounts i wasn't keeping my eye on and their protection plan went way beyond just alerts they had a dedicated recovery advocate that did all the work of restoring my identity which would have taken me so much time and a lot of headache so i went from feeling panicked to feeling protected so don't wait until you're dealing with identity theft to get protection in place get it done today go to zander.com to protect yourself that's zander.com Click the link in the description. Andrew is in Des Moines up next. Andrew, welcome to The Ramsey Show. Hey, thanks for taking my call, guys. Really appreciate everything that you guys do. Thank you. How can Jade and I help today? Yeah, we had a question about whether to sell our home or stay put. And the situation we're in, we live on eight acres. We love our house. We love where we live. A couple months ago, we were kind of shocked to hear rumors of maybe a data center being built across the road from us. Did some digging into it and found there's at least some truth to the rumors. Nothing certain at this point. The question we have, we love our home. We love the area. But if a data center does go up directly across the road from us, we would not want to live there long term. So we're struggling with the timing of do we move and get out ahead of this if it is true or do we stay put and see what happens? And if one is put in, would it kill the future sale of our home? When will you know for sure that it's not a rumor, that it's actually true this is happening? I. I can't answer that directly. I have talked to some neighbors that are in talks with selling their farmland and they have at least been offered. I've tried to gather more information from supervisors, different things like that. And everybody's pretty hush hush about it, which what I've looked into is pretty typical for data centers moving in. They kind of keep it on the low down until it's finalized. Well, I definitely keep looking into the timeline on that. And I'll just be honest with you, and this is just my personal opinion. Data center or not, you get to choose what you want to live next to a personal story. When I bought my house, there was a field behind it that was cattle. And now the city has just bought that field and it's going to be developed into a park and soccer fields and all this. And I don't want to live next to that. So I'll probably be moving. So I understand that feeling. And I think that's totally fine if you have the money and financially you're able to make that move. The timing of it, obviously, is going to depend on when you think this is actually taking place, how far ahead of it you actually want to get out. And is there any negative financial implication for you? That's more of my question. Are you able to move? Are you financially set up to do that and it not be a burden to you? Right. And I think we could make that move. We're debt free. We're working on paying our house down. So with the sale of. This property, we could make the move. And right now we just are unsure, you know, would it kill the sale of our current home if a data center did move in next door? I think the word kill is doing a lot of heavy lifting here. So I pulled up some actual data. I'm tragically unemotional. And so I always look at the facts. It's a burden in my life and on my wife. But here's what the actual data tells us so far. Obviously, this is a newer trend that's happening, but there have been studies. So this one's from a 2026 Berkeley, Harvard. Paper homes within three miles of a data center following the announcement of a large data center are worth an average of about 3% less over the following five years versus comparable homes. If it's in within one mile instead of three, the estimated difference was 7.2%. So that's the part when you say across the street, when you're talking eight acres, this could be five miles away, right? From what I have gathered, it's probably within that mile range is what I've heard. Okay. And what's your current property worth? Probably $300,000 to $350,000. Okay. So if you did the math on that and you went, all right, $350,000, let's go on the really high side and say it was that 7.2%. So you're talking $25,000. Now let's look at the other side. Selling your property with fees, moving costs, buying a new property with fees, you might be going, all right, well, either way, we're going to lose $25,000. So we might as well stay put and ride this thing out. It might be a nothing burger, and it might not even show up. And all of a sudden, you lost out. You lost out on your dream of having all this wonderful acreage, living on the land. And so that's where I go. I wouldn't be dramatic about it. And you're not being dramatic. But when we're using words like it's going to kill the home value, it's going to be 10 feet away from our house, that's where I go. Let's peel back and look at the facts. So I personally, if I'm in your shoes, I wouldn't be making a move until I knew a whole lot more. And the other side of this is if there's already announcement, the next person is going to know who's buying your property anyways. It's less about the value of the home. It's more about where do you want to live? If you do find out they're building this, do you want to live next to it or don't you? And if you don't, then you got to move. And if you do and you don't mind it, then none of this matters. Do you see what I'm saying? I personally think it's far less to do with the property value. Will the value go up or go down? Will the people care? And it's more about what do you want to live next to? It's your acres, and it's your life, and it's what you're doing life around every single day. And how is that going to affect you? That's what my decision would be based on. Finding out is this real or is it just a rumor? And Andrew, there are some other studies. I'll throw you one from Realtor.com. Again, 2026. In 43 zip codes where large data centers opened, researchers found no measurable difference in home prices compared to similar zip codes. So there's another piece. And even another one, 2026 Northern Virginia study, homes within a half a mile. So that's what you're talking about. Let's say it's within a half a mile of an announced data center sold for approximately 2.8% less than similar homes slightly further away. So again, I'm. I don't think any of this is catastrophic. And I think I appreciate that. Putting some real numbers to it of the percentages kind of helps with if in our situation, worst case scenario, one does go next door. It's not going to be. You're not going to lose $100,000, right? It might be OK. We can sell it for 10 to 20 grand less than we had hoped for previously. Are we OK with that? And I think at that point you can make a more logical decision. And obviously it's not. I'm not trying to take the emotion out because I would be frustrated if this was happening, too. So I empathize with you. But I think we're going to be seeing a whole lot more of this college aid. And the hard part is we just don't know. It's still a newer thing. The midterms just happened. You know, the Democrats might slap down all the data centers and all of a sudden they don't get built. Who knows? So I don't have the crystal ball to tell you one way or another. But I wouldn't make a rash decision and a big financial decision based on what could be. So hope that helps. Ashley's in Salt Lake City up next. What's going on? Ashley. Hi. I am wondering, do I stop all of my investments and save up for a house or should I do those simultaneously? Oh, that's exciting. Baby step three B conundrum of you're out of consumer debt. You've got the emergency fund. And now you're going, I want to buy a house, but I also would love to build wealth. Yes, that's exactly the problem. So we we spent the last few years. We got ourselves into like one hundred and thirty five thousand dollars of debt. We spent a couple of years. We spent a couple of years digging ourselves out of it and saved up an emergency fund. And now we're finding ourselves with high rent. But also, like, do we stop and stop all the investments to save up for a down payment? Because especially because we're going to need a more significant down payment. How much have like how much down payment? How much down payment are you needing to save? Probably a hundred thousand would be. How much do you have right now for that? Are you at zero? We're yeah, we I mean, we have our emergency fund, but we have and we have stuff in in investments that we could like pull out for that. But I just not from 401k, but from like ETS and stuff. How much? Probably like twenty thousand. OK, so my first order of business is I wouldn't guess at how much of a down payment you'd need. I'd actually do the research and I'd look out there in your area or where you think you might want. To live and I take that number and say, OK, in my area, if the median home price is gosh, you guys are in Salt Lake City. You can hop on our Ramsey Solutions real estate hub and see. But let's say it's four hundred thousand dollars. Go ahead. Yeah, I would say we've we've looked it up and kind of calculated. And my husband loves crunching the numbers. But it's we have four kids and a dog. So we like could get probably like a condo or a townhome. But we we kind of want to. Wait until we can actually get a house and yeah, it would be looking around five hundred thousand dollars of the like probably lower end. OK, and so how long would it take to save up one hundred K if you invested 15 percent? If we still invested 15 percent. Yeah, probably five years. And if you went down to zero, how long would it take? Probably like two years. Boom. So now you have an actual spectrum you can go between and go, OK, two to five years. We'd love to make it three. OK, maybe we invest up to the employer match and throw the rest of the down payment. So you guys sit down tonight and figure out both sides and then where you want to land. Baby step three B is a choose your own adventure. Now, if it's going to take more than two years, I would begin investing. But if you're saying, hey, we can focus for two years and go down to nothing and knock this out, I would definitely do that. I would definitely do that. When was the last time you felt confident walking into an auto repair shop? I mean, in the first place, you're stressed because your car is acting janky. And then you hand over your keys and hope you can trust the person who's fixing it. You deserve to feel confident that your car is going to get fixed right and at a fair price. That's why I'm a big fan of Christian Brothers Automotive. You never have to wonder if the repairs are legit. With their digital vehicle inspection, you see exactly what their technicians see. So you get the honest info you need to make smart decisions. And every repair they make is backed by their Nice Difference Warranty. That's three years or 36,000 miles, whichever benefits you most. I take my car to Christian Brothers because I don't feel stressed. I feel taken care of. And that gives me a lot of confidence when I get back on the road. So schedule your service today and get 10% off your visit at CBAC.com. slash Ramsey or click the link in the description. That's CBAC.com slash Ramsey. 10% off up to a $250 value. See store for details. If you're wondering why we keep mentioning the baby steps, it's because they're the foundation of everything we teach. It's how we filter every call in the show. So if you're new here, start there. We'll drop a link about those seven baby steps in the description of this episode. Jonathan is in Fort Myers up next. Jonathan, welcome to the show. Thank you. Thanks for having me. Absolutely. You hear me okay? Yeah, you sound great. Awesome. I've had the question about baby steps and taxes. So we're in baby step two and paying off debt. And next year I kind of am thinking ahead and planning ahead of what tax you're going to look like and, I have gazelle intensity and my wife and I have been married for about two years. I'm 32, she's 26 and we have four jobs between the two of us. We got the income up. We're paying off debt really fast and it's going good, but I see taxes coming soon and that's April of next year. But I see how much we're making now and I know we're in a new tax bracket and it kind of scares me a little bit because the percentages are a little higher than we'd like. And I don't know how to navigate the debt payoff. I don't know how to navigate the debt payoff with taxes and also staying motivated to kind of switch and flip flop between things while giving them a break when it comes to paying things off and then switching the gears to taxes and paying off those taxes when they're about to come and saving up for that. So you know you're going to owe a hefty chunk currently. Yeah. Are you doing 1099 work or what is it that? No, it's all W2 work. It's not like it's anything expensive and I'm freaked out. It's just, I know it's a lot higher than we're used to. It's a lot higher than we're used to. Did you not change your withholding? It is. I did and I have the withholdings via a certain percentage each time I get my paychecks out. I just know it's going to be I have to pay something and I'm not used to paying anything. I've been in school so I've always gotten money back so I've never had it. So based on your actual math using, you know, let's say the IRS calculator or working with a pro, how much will you owe on April 15th? Between $6,000 and $14,000 potentially. Okay. Okay, on the high end, $14,000. Yeah. Okay. So there's a couple things you can do. Number one, I would just set up a sinking fund to set aside money. You can also, you know, withhold more from each paycheck. That's one way to solve some of this. That way you'll, you know, because you have a six month runway pretty much between now and when you need to have that bill come out of your bank account. So I would attempt to get as close as possible by withholding more or setting aside that money. You can also make an estimated payment on the IRS website. That'll help you sleep better at night. But the simplest way to do this is to withhold more or just set up a sinking fund and set aside money knowing that you're going to, you may have a tax bill. Yeah. And just know in the coming year, I'd want to set that, make sure that withholding is right because the goal is not to owe and the goal is also not to get this big refund. You want it to be kind of in that sweet spot. Maybe it's a hundred bucks you owe, right? As close to zero as you can get it, which is very difficult to do. Okay. So you just manipulate your funds based off your job first and then sinking fund on the bank. Yeah. And if you change your withholdings, what's going to happen is less is going to end up in your bank account, right? So that might slow down your debt payoff by a little bit, but it'll get you clean come tax time. Yeah. It'll be an accurate number. So that's what I would be doing. Or like I mentioned, you can set up a sinking fund and set aside, you know, let's say a thousand bucks a month for six months. Now you've got six grand ready to pay that bill if and when it does show up. Right. And can I give you guys an outlook of like our baby step two and like payoffs and all that stuff? Yeah. What's that looking like right now? How long? We've paid off. I sold one of my cars. Like you guys said, I've been talking or not talking, but listening to you guys since January and sold one of my cars. We have one, we used the payments from one car to buy electric scooters. So she's taking an electric scooter to work in the morning that she goes to two jobs. So part time early in the morning, four 30 in the morning, then streets to the next one. I was doing that at my other job, I picked up three jobs and I dropped one because it was just too much. Two salaries is just a bit much. So I've got two jobs, one side gig, one main, um, I'm making about a pocketing 89,000. Um, and then my other job side is about 35,000 and then she makes about 18 at both part time jobs that she works between those two. And then our total debts are car of 18,000 that we're using that I have to go across a toll bridge. Cause I can't ride. I'm a scooter across the toll bridge. And then we have no mortgage or nothing we're renting right now cause we're paying off debt. And then, um, we have one credit card at 21,000 and we have a best egg personal loan at 18,000. I paid off her credit card already, which was 14,000. The car was at 12. That's gone. We paid off another credit card, which was four. That's gone. So I think that. So you got the personal loan, credit card debt. You got the car loan left. Those are the three. And student loans. How much are those? Which is the bulk. I have 89 and she has 20,000. And you're bringing in around one 50 about one 50. Yeah. Somewhere around there. Okay. Uh, so are you wanting us to project this for you or kind of help you find some more areas? What's your question? Is it about 170 grand total in consumer debt left? Uh, yeah, with the student loans and everything. Okay. So you got one 50, you got one 70 pay down. How much are you actually throwing at this stuff for a year? Um, so I did the budget app and so now each month it says we're making now about, since I dropped the other job, um, they went from 15,000 a month down to about 9,500 a month. And I have about three, 4,000 that I'm putting to one card. So 4,000 is my goal every month that I'm pushing to my main. And that's the car next. Because it's, it's the next. So realistically, are you guys done in less than three years from now? Hopefully. Yeah. I haven't made any payments on a student loans over another beast, but well, it's just debt snowballing from here on out. So smallest balance gets all the special treatment, focused intensity, the rest get minimum payments. And if you do that, I mean, 60 grand a year thrown at 170 total, you're done in less than three years. So that's five grand a month you need to find in that budget to throw at the debts total. Motivation wise. People motivated and what drove you to stay motivated during this time? I mean, you're going to have to figure out what that picture of what your life is going to look like, what that why is for you and keep that in front of you. And I would say for you guys, since you do have a little bit of a journey here, come up with some milestones and ways that you know that you're going to celebrate. For instance, you said once this car is gone, uh, let's see, car is next. So I would say once the car is gone, that'd be like, okay, after this, we need to figure out how we're going to celebrate. Yeah. How are we going to celebrate that? Or once the credit cards are gone, how are we going to celebrate that? And I think that that kind of just keeps you motivated. You mentioned something earlier, you had a job, you hated it. You know, if you have a side hustle, you end up hating it, quit that one, swap it out for a new one. Just find ways to keep it fresh. Okay. Cause that side hustle, it's, I mean, three years is a long time to do a side hustle that you hate. So six months, I'm like, you can stomach anything for six months, but three years, find what you're good at, use the skills you already have, and that way it's not going to fail. It's going to feel like a chore and you'll actually grow from it. I mean, a lot of times people get better jobs or get promotions because they've been hustling over here on the side, learning new skills and new things, staying sharp. So all of that's going to help you, Jonathan, but I love what Jade said of keeping that Y front and center. Don't do this because you heard being debt free is cool or good. Do it because you have freedom on the other side that you've been chasing and it's worth that. And it's gotta be something that's, it can't just be a dollars thing. It can't just be, well, I'm getting debt free because when I'm debt free, I'll be debt free. Like there's gotta be something. There's gotta be something else to it. What do you see your life looking like? How does it change your relationships? What does it feel like when you get out of bed in the morning? What options does it give you? All of those things, um, they paint a picture of how life is going to look and feel and how you'll operate. And I just think that that has more motivation than just like, well, the number of the balance will be zero. Yeah. You know? Well, and debt can be, it's a lot of baggage. It's a lot of shame. It's a lot of looking inward, being stressed out. And when you're out of debt, you can look up, you can look out. And there's so much opportunity there. So I would start dreaming now about what's on the other side. Three years from now, we're going to be, you know, coming up on what? that's pretty wild to think about. Okay, 2030, who are we going to be? What kind of people are we going to be? What do we want to be doing? We want to take this vacation. We want to be buying this type of car. Our incomes are probably going to end up here. And so that really gets you excited for that future ahead of you. And I'm a visual person. So write it down, put it on the bathroom mirror, keep that reminder front and center. And if you're married, which sounds like you are, you're going to need to keep each other on the path. And sometimes you're carrying one through the mud and other days you're the one who needs to be carried. And so that's one of the most beautiful parts of marriage is that it's not 50-50. It's, listen, I can only give 10 today. I need you to carry the 90. And that's a beautiful thing to need that and to have that in a relationship. So keep on the path, Jonathan. Call us back when you're debt-free. If your business is making seven figures or more, you should be proud of that. But that growth probably brought a mess with it. Systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem. And Net Suite has solved that problem for more than 44,000 businesses like yours. Net Suite brings financials, inventory, CRM, and more into one place. And their AI tool, Net Suite Next, builds AI into everything, automating busy work like forecasting demand and chasing down 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 Net Suite is built on leading practices from thousands of businesses preloaded and ready to go. Ramsey Solutions switched to Net Suite years ago. It helped us know our numbers and we've never looked back. If your revenue is at least seven figures, try Net Suite Next for free at netsuite.com slash Ramsey. That's netsuite.com slash Ramsey. Or click the link in the description. Jonathan is in Cincinnati up next. Jonathan, what's going on? Are you with us? Hey, how are you doing? Doing great. Yes. That's good. That's good. Just a little bit about me. I'm 28. I'm engaged right now. I have two young boys. And I bring in approximately $63,000 annually between my CEO job and my VA disability benefits. And on paper, it feels like. We should be doing better than we currently are. So we're trying to figure out exactly how to get out of this paycheck-to-paycheck cycle that we've been in. Is your wife able. Or your fiancé? Or the. Is it your wife? She's my fiancé. Fiancé. Okay. Does she. Is she able to work at all? Or is she home with the boys? She's been home with the boys full-time. Okay. All right. So usually when people are feeling that paycheck-to-paycheck feeling, it's one of two things. They're spending more than they make, or there's just not enough money coming in even to meet kind of like those four walls in that basic budget. So when you guys open up your budget, what do you think it is? Is it there's just not enough money? We're overspending? Or do you think it's a combination of both? I think it's definitely a combination of both. But more than anything, I feel like maybe everything that we have set in place for like when bills come out or whatnot isn't lining up how it should be. So it's almost like. Is that a timing issue? You know, too much is coming out at once. Yeah, that's what I'm thinking. We can help with that. Our EveryDollar budgeting app, they created a really cool feature called Paycheck Planning, and it will lay out when your bills are coming out based on the due dates and show you at what point you will run out of money. And that way you know, oh, I got to move these bills around. I'm going to call up the utilities company and see if they can move it to this date. And so that helps you know why that's happening, and it gives you a way to stop it. So that's one mechanism. And we'll hook you up with EveryDollar, Jonathan, at the end of this call to make sure that you have that plan in place looking on paper. Sometimes that's the first and hardest step is it's right now it's rattling around in your head. Like, you know kind of your expenses, you know what you're taking home, but then at the end of the month, there's nothing to show for it. Right, right. Instead of having a plan to go, all right, if we do this right, there's gonna be 500 bucks left over to attack debt. So how much debt do you guys have? I'd say approximately 8,000 minus the mortgage and whatnot. Okay, so 8,000. 8,000 in consumer debt. What type of debt is that? It's mainly credit cards and a little bit is like borrowing apps here and there. Are those apps still on your phone? No, I've deleted them since we've been knocking them out, you know, paycheck by paycheck, month by month, as best as we can. Good. And you're not using the credit cards anymore? Have those been cut up and accounts closed? We've been attempting to not to, but at the end of the month, we usually end up having to start using them again. Well, hear this out. You're trying to get out of debt, but we're going into debt. And so right now, we got like a leak in the boat. We're dumping the water out, but we're also pouring more water in. And so this is the hardest part, truthfully, is the stop borrowing baby step zero, where you decide we are not borrowing a cent. And if we can't afford, we're going to cover the four walls, cover insurance, try to cover the minimums. But if there's not enough left over, so be it. We're not going to go borrow. Yes. Definitely. So how much is your monthly take-home pay right now? Do you have that exact number? Yeah. So the monthly, it's roughly each paycheck every two weeks from my main job, about $1,500. And then I usually have $2,436 that comes in from the military at the end of the month. Okay. So you got $3,000 plus the $2,436. So you got $5,436 coming in in a given 30-day window. Fair? Yes, sir. How much are you paying on housing? What's your rent or mortgage? The mortgage right now, it's sitting at right over $1,700 a month. Okay. Fair enough. So if I'm looking at this, and again, if your wife is home with the boys, there's no daycare because usually that comes pretty close after the rent or mortgage. I mean, I'm looking at this, I'm going, gosh, hopefully somewhere you can find $1,000 a month to throw out this thing. If you really- If you really tighten the budget and you can pay off this $8,000 in credit card debt super fast, don't you think? Yeah, I definitely think so. The key is you have to work backwards. You have to set the goal and decide what it is that you want for your life. And then you have to figure out what must be true in order to make that happen. So if you tell me, hey, the only debt I have is $8,000, I'm thinking, okay, I want to get out of debt lickety split. That means eight months max. And if I can do it faster, that'd be great. So then my next goal is how can I find $1,000 a month? Well, if I'm you, I'm checking my every dollar budget. I'm squeezing every life out of this $5,436 paycheck. And then if there's still a gap there, I'm looking at myself or I'm looking at my wife and I'm going, which one of us is going to close the $200, $300 gap? And what are we going to do to do that? And so that's the mindset that you have to have versus letting the debt decide for you, letting the default budget decide for you. You get to get out there and decide how quickly this is going to happen. That's definitely right. Yeah, I get you. So there's your commitment right there. We're not going to use the credit cards anymore. I would cut them up and close the accounts. You can still pay on them after that. And then you're going to do the every dollar budget with your wife because you both need to be on the same page here, understanding what's coming in, what's going out. That way there's no surprises. You're going to know all the expenses that are in her mind and that are in your mind. And then you decide, all right, we got to get this to 4,400. So boom, the mortgage is gone. 1,700 gone. We got 2,700 left to cover everything else. How are we going to make that work? And if you do it that way, if you pretend like you make 4,400, what's going to happen is $1,000 will magically be there ready to fight the debt for you at the end of the month. But you see how you pre-decided before the month begins all of that? It can't just be a hope and an afterthought and a wish. Right, right. Because then you'll never pay off debt. If it's just, well, if I have money left over, it'd be nice to pay off my debt. No, you got to be angry at this, man. And you should be, right? You got kids, you got a fiance, you got a whole life to live, and we're sitting here stressed over eight grand. You can knock that out in six months if you get serious. Yes, sir. That's right. That's right. So hang on the line. We'll hook you up with every dollar, and you call us back once you make that plan. If you need anything else, we're here for you, dude. Sue is in Minneapolis up next. Sue, what's going on? Sue? Hello? Hey. Hello? Yes. How you doing? Hello? Can you hear us? I think Sue has us on mute. This is a first. Okay. I'm sorry. You're good. Sorry. How can we help today, Sue? So my parents are 84 and 89, and they still have a mortgage. They only have about $23,000 left in their retirement savings. Their mortgage is $1,151 a month. They have fixed expenses of $2,300 a month, so basically living on Social Security of $3,786 a month, and their medicals have been flushed out. So they're still living on Social Security of $3,786 It's fluctuating quite a bit and, uh, so. And they're considering a reverse mortgage. I've been working with them for about four years. They had just under $10,000 of debt and credit cards and things. And I worked with them, got that all taken care of. But recently, the last several months, they're moving credit cards, moving money back and forth from an HYSA, which they have under $1,000 in a line of credit. They have been able to keep paying it off every month once they get their Social Security. But the medicals and everything went pretty high. It was almost $1,000 this month. And so we took the money out of their retirement. And it's just I foresee that we're going down that road of the back and forth. They brought up a reverse mortgage. I looked into it a little bit. I'm not that familiar with it, but wondering if that's a viable option. Well, instead of paying down the mortgage, the mortgage balance. It goes up and then they get a check. And so it's just it's just adding to their debt load, which is not a great solution. And it's a terrible product. That's very expensive. Right. So it's it solves a monthly payment problem, but it creates a growing debt against their home and creates another mess on the other side. So it's not something that I've ever recommended. I mean, there's a reason why these are late night TV commercials with a washed up TV actor pitching it. So we need to find a more sustainable solution. Because you might find that even after that, they don't have enough. Yeah. Tell us about their home, though. Tell us what it's worth and what they still owe on it. Yeah. One level town home about 350 and they owe about 150. OK. Yeah. Could they sell and downsize and pay cash for something? Probably not in this area. It might end up being a condo, though. It may not even be a home. And I think that that's a bet. A better choice all day long. Sell something and downsize to something smaller rather than taking out a loan against the mortgage, which is exactly what a reverse first mortgage is. The sad truth is they don't really have a choice. They got themselves in this position. And the best way out is to not go into more debt, but to stay out. I love a good sale. I also love the holidays. But if you're like me, sometimes those two don't mix well. Because six promo codes and a commercial later, it's so easy to convince yourself that you need just one more scented candle or a waffle maker shaped like a Christmas tree and some flannel pajamas. The temptation to spend more than you budgeted for is real. That's why I love having a bank that keeps my free spirit in check. And for me, that's Fairwinds Credit Union. With their smart bundle, you can choose a Ramsey-themed debit card that says live like no one else. It's a great reminder to stick to your goals and what you want. It's a great reminder to stick to your goals and what you're working toward, especially in a season that wants you to spend instead of save. You get a no monthly fee checking account and a high-yield savings account. You can even open up additional savings accounts, like a holiday fund for gifts, so you can finally pull the trigger on that waffle maker. Because staying on track for the holidays doesn't mean giving up your free spirit. It just means being smart about it. So get your live like no one else debit card by opening a smart bundle today at fairwinds.org slash Ramsey. That's Fairwinds.org. Fairwinds.org slash Ramsey. Insured by the NCUA. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel here with Jade Warshaw, taking your calls at 888-825-5225. We are live from 1 to 4 p.m. Central Time every weekday. That is the time to call in, and you can always leave a voicemail outside of that time. Our team will get back to you. Douglas is in Raleigh up next. What's going on, Doug? Hey, how you doing, sir? Good, how are you? Not bad, not bad. So right now I am 17 years old. I'm about to graduate high school. Awesome. I'm trying to buy a 1965 Ford Mustang. It's my dream car. It's always been my dream car. Always? You just learned what a car was four years ago, dude. What do you mean always? My dad started out as an aircraft mechanic for the Air Force, and he's always. I've always been around cars. Okay. So this has been on your mind for a while. What's that cost? Yeah. Just curious. I usually see them for $20,000, but I usually overshoot, and I'll say $30,000. Oh, wow. That's expensive. I hope you make some good money. What do you make? $14 an hour, but my friend's dad is hooking me up with a job that'll pay $30 an hour. Like right now? Yeah. What are you doing at $30 an hour at 17? Photography. Photography. And how many hours would you be working? Because you're in school, right? Yeah. I usually do. I work at a grocery store chain right now, so I usually only work weekends. Okay. But with the photography stuff, it works better to my schedule. Uh-huh. So instead of doing 20 hours, I can do like 30, 32. And be in school and do your homework and all that kind of stuff? Yeah. This year's been really easy. I have a bunch of filler classes. Now with photography, is it guaranteed hours or is it, hey, as work comes in and as I need you, I'll pay you and I'll pay you $30 an hour when I need you? It is guaranteed hours. Okay. Okay. So I'm going to shoot you straight for a second because I love the idea of having a dream car. I think that that's a really cool thing to shoot for. The truth is you don't earn the money right now to be able to afford a car that costs $30,000. That's the truth. Yeah, I'm not expecting to buy it right here, right now. I'm really just trying to get help to like set up a financial plan. And I don't know that it's the next financial goal for you either because I'm seeing a 17-year-old and I'm going, okay, I'm looking at what's your further education when you turn 18. Are you going off to college? Are you going to trade school? Are you, what's the plan there? Do we need to fund that? I'm going to college and I have a full ride. Where are you going? Uh. I have two full ride offers from ECU and then one from William Peace. And do you plan on working while you're in college? Yes. Okay. Doing the photography? Uh, that or doing, um, going to what I did first, which was, uh, I built computers. Okay. What do your parents think about this? They think it's dumb because my, um, actually my dad loves the idea, but my mom is like, you need to. You need to settle down and start making good, not good financial decisions, but I need to start prepping for a family and all that, which I don't think that that's a terrible idea. And that's definitely. What does that mean? Prepping for a family at 17? I know that it always seems like it's really far away. Is she just saying like, Hey, you should be doing a lot more adult stuff before you go out and buy a toy. Yeah. Okay. Yeah. That tracks. But here's the math. Okay. Let's pretend you do 30 hours a week for, uh, $30 an hour for 30 weeks for 30. Oh my gosh. Hours a week. And you make 3,600 bucks a month, right? So you're taking home 43,000 a year, assuming that you're going to do this much work. I actually think it's a little bit wishful thinking, but what do I know? You're going to say, Hey, I'm going to buy a $30,000 car making 43,000. There's just no way in the world. I would suggest that to you. Yeah. Which. Yeah, I totally am hearing that now, but I have, um, throughout my entire high school thing, uh, like career I've set up, I have a decent money market account and decent. Um, I've invested in S E S E C is a lot. So how much do you have about overall and everything? 10 grand. Okay. Do you have a car at all? Or this would be your first car? Uh, this, it'll be my third car. Your third car. Okay. You currently have two other cars. We currently have a Toyota F J Ford that my dad and I are restoring. And I have a 2004 Acura MDX. Is that your daily driver? My daily. Okay. Yes, sir. So this would be on top of the daily driver. You'd have this car that would be kind of a, for fun weekend ride. Yes. So you'd have two cars at 17, uh, the Acura, what's it worth? Uh, we bought it for 2,400. I think I can. I think I can do a little work and get $3,600 out of it. Okay. Yeah, I just, I'm sorry, Douglas, you're just not going to convince me that this is a good idea. Just for the value alone, for the opportunity cost, for the season of life you're in, and for the price of the car, for me, they're all red Xs. None of them are green check marks for me. And it's just a not now. Now once you're, let's say you're out of school, you're working full time, now you have, you know, you're making $60,000 to $70,000 and you go want to buy a $20,000 toy, fine. Now we can understand opportunity costs there of, oh, I also wanted a down payment and an engagement ring and I want a cash flow wedding and, and, and. So life will only get more complicated. There's going to be more goals ahead of you and right now it feels like, well, what else am I going to spend money on? Life is going to get real expensive real quick once you're out of school. once we sort of have these places light spinning. And I mean, just for fun, we talk about opportunity costs, which is just what else could you do with that money? Let's pretend you came up with the $30,000 to buy this car. You're 17. Let's pretend that by age 18, you're like, hey, Jade, I did it. I did the work. I sold off the non-retirement stock I have, and I got the $30,000. Let's pretend instead of buying the car, you say, you know what? I'm just going to drop that in an index fund. And keep driving my paid for Acura. I'm 18 years old, and I'm going to drop it in there until age 38. Actually, I'm going to go age 40. That's the median age that people are first-time homebuyers at this point. And you just let it sit. Let's pretend you add nothing to it. And you just calculate that. Well, my friend, that's $333,000. Just you letting it sit, doing nothing. And then when you're 40 years old, now you got a down payment on a house, because who knows how much houses will cost by then. But do you see what I'm saying? This is a. Yeah. It's not just the money today. It's what it could be tomorrow and what it could mean for you on down the line. And I think your 40-year-old self is going to look back and go, gosh, I'm really glad I didn't drop $30,000 on a 1965 Ford Mustang at 17 years old. I think if you do that, you'll look back on that and go, who let me do that? I called in a finance show. My parents told me it was silly. And I can't believe I did it anyway. Did your parents tell you to call us? No. I love watching the Ramsey show. Oh, wonderful. Well, I mean, you've got a great head on your shoulders. Let me say that. As much as we're razzing you, you're a super sharp guy at 17. I'm jealous. I wish I was as smart and successful as you are at your age. And I think you have. That's why. We think your future is so bright that you shouldn't blow $30,000 on a depreciating asset just to enjoy life right now. You can enjoy life in a lot of other ways. And also insurance on that thing at 17. That's a car payment right there. But do take that photography job because the pay is nice. Stack up cash. You'll never regret that. This is an ad from BetterHelp. Have you ever had a thought or a moment that replays over and over and over in your head? Maybe it's a worry that wakes you up every morning at 2am. Or you keep thinking about that awkward interaction you had with a coworker last week and the week before that. Or maybe it's some painful or embarrassing thing that happened to you years ago that you just can't seem to let go and move past. We've all been there. I've been there. There's so much stuff. So many stories taking up space in our brain. I've been there. I've been there. I've been that we wish we could just turn it all off. 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And in the last couple of years, we've been spending so much money on fixing these older cars. And I just was wondering if there's any recommendations on perhaps leasing now, if that just makes more sense. I don't think leasing is the option because that's one of the most expensive ways to operate a vehicle, right? And it's debt because you're paying payments to somebody. So debt is money that you owe to anyone for any reason. And in this case, it's like rental debt because you don't even get the thing in the end, right? So I would not suggest that. It sounds like you're in the baby steps. What baby step are you in? Oh, no. No. But we're not in baby steps. We paid off, boy, in the early 2000s, we paid off a house. So why are you still, why are you driving older vehicles that aren't able to sustain you driving them on the road? It sounds like you're driving beaters. Well, I mean, no, no, no, we're not driving. I mean, they're not. The last vehicle that we purchased was a 2020. Okay. I mean, they weren't that old. I mean, I mean, older, not, not newer vehicles, I should say, right. But it just seems like there's so much more, you know, there's so much more that gets into them. I mean, my husband used to be able to fix most things himself. Now he can't do that anymore because they're all, you know, what kind of cars are we talking about? What are you buying? Issues, right? Because 2020, I don't feel like a 2020 is an old car. Am I wrong audience out there? They're shaking their heads to lean like, we didn't know 2020 was old. Okay. Okay. So, so, so, so by, by newer cars, but don't buy them, you know, brand new, uh, so that they don't depreciate. Is that what the recommendation would be for $50,000 a year? And we've got a little bit left to paying off this other house that we bought. Um, but, but not roughly about nine years left on the, um, on the mortgage, but we're paying extra. Sure. So what you said is exactly right. I mean, at this phase, you should be buying newer, newer, nicer vehicles. Right. With what you earn and where you are in the baby steps and selection does matter. Right. Um, I'm not a car guru, but there are certain brands that tend to do better on the road than other brands. I'm not probably going to buy a Jeep. I'm probably going to, you know, I want to know what kind of cars you guys have been driving that like, cause we want to know not to buy these cars if they're just riddled with issues as a 2020. Well, I mean, I mean, I mean, some of them are older than 2022. I mean, my, my, my, both my kids, um, we've got, you know, we've got, you know, we've got a lot of cars that are older than 2022. We've got them in vehicles, but like I said, we've been buying older cars. You've got four vehicles. Is that right? Yeah, we've got four. Okay. So, well, one of them, one, one of them, no, no three altogether. One of them is my company car. So it doesn't cost us anything. Let's also level set and know that the more cars you have on the road, the more cars you have on the road, which means there's going to be more repairs. And there is just part of a normal budget, normal wear and tear. Making sure you're ahead of the wear and tear that does make sure the car runs better. And so I don't know, are you guys, the people who are making sure you're doing the oil change, you're bringing it in and making sure you're doing all the different checks. I feel like every, every quarter, my husband's like, I got to take your car and Jade and make sure it's got the this, this, and that, right. There's just part of that, that I wonder if that's just normal maintenance. It just seems like it's so much more expensive. It might be more expensive, they're not going to cover every single little thing, even on a lease car. They're, they're, they're making their money. They're profiting. And so they're not just giving you free maintenance because out of the goodness of their hearts, you're prepaying all the depreciation, making those payments. There's also a lot of, uh, red tape along with that and fine print of, you can't go over this mileage and you could get fined if there's more wear and tear than they like on that thing. And so you really are just renting a car expensively. And so you're and you guys have done so well. So what is your car budget? If I was going to say to lean, go get you a good car. What would that be? I don't know. What's the make and model? I guess maybe we should be paying more. Okay. So how much do you guys make total? You said one 50, about $250,000 a year. And all we have is our mortgage. Okay. So you could have like a hundred thousand dollars worth of car in your driveway and it wouldn't violate any of our principles if they were paid for in cash. Yeah. You could both have $40,000 cars and your daughter could have a $40,000 car. You know, $40,000 car. So what's your net worth? It is. And I'm not saying that you have to by any means. I'm just saying that that's kind of the threshold you have if you wanted to use it. Right. But so is paying 600 bucks a month on a lease that you have to give back three years from now. Well, I've looked into leases a little bit and really I would have never considered it until now. And you can get some for about $350 a month. That's what we were leaning towards. It goes beyond that. It's an identity shift. If you decide, Hey, I'm going to be, I'm going to go get this lease. You're, you're deciding that I'm becoming a different person financially. It's not just as simple as that. And now, and now you open up your world to debt in a way that it was closed before. So honestly, Talene, that bothers me for you a little bit more than the lease or the payment or that whole thing does. It's like, gosh, you worked so hard to establish this lifestyle. Don't let something that can be solved either by budgeting for it, or by simply, simply purchasing better car brands. Uh, don't, don't let, wrong thing take you off the right path do you see what i'm saying yeah i just was thinking that maybe because of the shift of how vehicles you know get repaired now people were considering a different way to approach this so because they're more electronic well that's what i'm curious what make and model you were driving and all these issues they used to be what what is the make and model sorry um well we've got three of them we've got uh one toyota rav4 uh we just recently bought uh a land rover that we found out ding ding ding even i was like fingers crossed it's a land rover i know nothing about cars but even i know that a land rover is not one that you want to get yeah yeah no no not not not good for repairs but i mean even the other ones i mean we've just been sinking so much money into repairs lately i know that a land rover is not one that you want to get yeah yeah no no not not not good for repairs i thought maybe going what's the third one something had changed it feels like something's changed and um and you know there's so much inflation parts the technology the electronics all of that will affect it but leasing a car doesn't change that because you'd be leasing a car it it's not going to change that you're going to be operating at a higher cost and now you're paying this cost per month versus paid for cars that you had so you had the rav4 the land rover what's the third car um it's a mavda i can't remember an x something um it's it's a very small suv all right folks mazda where does it fall is it i mean we're in the beginning they're okay they're not too bad i've had some mazdas in my day um but to lean if it's really concerned for you i would just do more research this time if you're going to go use get a pre-purchase inspection on that thing get a vehicle history report from a company like bumper all of that can help you make an informed decision i'm a nerd i have like a consumer report subscription and i'll check the year make and model of whatever car i'm driving and see the ratings and everything and i'll check the year make and model of whatever car i'm driving on that see the recalls see the issues people have had and you know any mechanic will tell you like oh don't buy that year that cvt engine will kill you don't buy that nissan and if you have christian brothers near you i i use christian brothers automotive my all of our cars are used and you can actually if you're looking at a car if you can get the dealer to say hey i'd love my mechanic to look at it christian brothers will give it a once over and they'll tell you hey this is a good one or hey this is a lemon don't do it or here's what we foresee is already wrong and so that's a lot of peace of mind and whenever you do buy a used car uh i bring it in there because they're going to make sure it stays on the road they're going to make sure it runs right everything's good they're not going to have you fixing things that you don't need to be fixing because a lot of this too i wonder your mechanic are they giving you a laundry list of things that need to be done and maybe that is really not that pertinent or doesn't need to be done right now so i think there's a lot to this equation leasing is not the answer debt is not going to be the answer debt is not going to be the answer debt is going to be the answer and so i think that's just going to cause you to throw away your biggest wealth building tool which is your income every single month instead of making a repair periodically okay so that doesn't make sense on any on any plane and even new cars can have issues and we're dealing with that now with my wife's car right even my tesla as low maintenance as it is electronics can go bad and you got to take it in for that so that's why we say don't sink a lot of your money into cars because they're just toys going down in value drive something you enjoy sure but pay care cash if you're in a really bad debt situation i know how scary that is you might be getting harassed by debt collectors every day threatened with lawsuits and maybe you think bankruptcy is the only way out i've been there i remember for a long time i've been there i've been there for a long so scared i couldn't breathe but it's not too late to get out of this mess contact guardian litigation group guardian is not a call center they're a real law firm you get a real attorney assigned to you so if a creditor sues you're protected from day one not scrambling to find legal representation when you're already in the middle of it and guardian only gets paid when your debt is negotiated and you accept the settlement guardian has helped over 55 000 people settle more than 600 million dollars in debt that's why i trust them and send people their way the longer you wait the fewer options you have the more expensive it gets but it doesn't have to end that way guardian can defend you go to guardian lit.com slash ramsey that's guardian lit.com slash ramsey or click the link in the description attorney advertising results may vary and no specific outcome is guaranteed our question of the day is brought to you by ask ramsey your free ai money tool that provides personalized money answers based on ramsey principles visit ramsey solutions.com slash ask ramsey okay today's question comes from carlos in utah he says the monthly payment for a house i want to buy fits the 25 percent of my take-home pay for a house i want to buy fits the 25 percent of pay rule but when they add in taxes pmi and insurance the payment would be about 400 more not including utilities should i wait until i find a home where the entire payment would be 25 percent of my income before purchasing a house so carlos what you're saying uh actually the way that we say it it does need to include those things so the 25 percent rule for those of you who need to know this let's be very clear george and i were talking about this early it's 25 percent of your take-home pay your take-home pay is the money that you net in after taxes that's it it doesn't include uh well let me add back in the money from retirement let me add back the money in from my insurance no it's just the money after taxes so if you do have those things that are taken out of your account uh and they're taken out automatically and you see that number on the budget yeah you have to add those back in so you know what your actual budgeting money is take-home pay means money after taxes just clarifying that so that the people know that will help your 25 percent parameter it'll help you because you might need to do some manual math because what you're seeing in your bank account isn't necessarily what we're talking about when we talk about the 25 percent parameter right a lot of people 15 plus you're paying health care that could be an extra 1700 bucks a month yes that can be factored into your picture yes so so so so important there and then the payment when we talk about the mortgage payment that is everything included that is everything that is included that is everything that is the payment that is taxes that is pmi that is insurance all of that all together has to be 25 percent so if you say hey when i add that in it's 400 more now i go to myself i say well it depends on kind of where your budget is right because all the time people are like hey my payment's kind of like it's 28 or it's 27 and i'm not going to split hairs over that george in this case if the 400 i don't know how tight your budget is but if for some reason that 400 is really just making it super tight and you can't make it then yeah you got to cut it loose but if 400 is making or breaking this deal my guess is that it's not the deal that you need to make yeah well that's a good reminder piti principal interest your taxes with property taxes and your homeowner's insurance those are the things to factor in plus pmi if it's applicable if you put less than 20 percent down you're going to have that private mortgage insurance at least until you get to that 20 percent equity threshold so i hope that helps and again it's not to be legalistic the whole point of this is that you're not house poor because if you listen to the show long enough you know people call in going hey my house is 48 of my take-home pay what do i do yeah i'm looking at this unless he lives because if you just look at this for a second if you've got if he's got pmi that means he didn't even put 20 down true which means his payment could be on the high side but my thought is like if 400 is making or breaking you my guess is he's got a higher income and he's just being a nerd yeah so i don't know what's going on there let us know carlos call we can talk through it jack is in green bay up next what's going on jack hey how you guys doing we're doing great how are you i'm good thank you appreciate you guys having me absolutely um so my wife and i recently got married in august um and we are trying to figure out the best way to tackle some of the student debt that i have um we got a good chunk of money in savings but i think the thought of putting that money that we have into our student loans um is a bit scary for us how much do you have in savings we have about 25 000 in savings awesome how much do you have in total debt uh so we in loans i have 20 800 and then we just bought a house as well okay so you got a mortgage on top of that so the 20 800 you're saying hey i could pay it off today and go down to four grand you'd also free up that student loan payment and then you'd immediately restock your emergency fund and you'd be completely debt free consumer debt free but that scares you because you've worked hard to save up the 25 000 or what are you scared there's going to be a ten thousand dollar emergency the day after you pay off your loans what's the real fear yeah i think the real fear is that is that second part the having the an emergency afterwards and so we kind of have it all like broken up into different funds um so with the house with the vehicles just got a dog um so we have everything kind of broken up in that aspect and i think pulling out of there and only looking at you know four thousand dollars if something were to go wrong in the house will play out what would go wrong i mean if i were you i'd go okay there's there's a couple of things true here number one there's only so many things that could go wrong that would exceed the four thousand dollars Especially in one day, we're like, I need to make this payment immediately. Immediately. And then you still have your paycheck and you have the money saved from the student loan payment. So how much do you guys bring home every single month? We bring home just north of $7,000, so $7,015. And how much margin is there after, you know, bare bones budget, how much margin is left over? I believe it's about including the student payment or not including it? Including it. Including it, probably about $3,000, $4,000. So that means on any given month, if let's say the month that you pay off that student loan with the savings, and then suddenly, I don't know, the AC goes out and you're like, oh my gosh, AC, we need to get it fixed. Suddenly you say, okay, well, let's go to our bare bones budget. We have $3,000 of margin there. And then we've got $4,000 in savings. You're telling me $7,000 couldn't bail you out until the next month when you have another $3,000? Yeah, I guess that's a good point. Never thought about it that way. And think about your student loan payments. What do those add up to in a month? In what aspect? What are all the minimum payments? So right now I'm in deferment. I just graduated in May. So I have a couple months left. And then we're also fortunate enough to not pay health insurance because we're both under the age of 26. Okay. Well, right now is the time, man, because life's only going to get more expensive. And if you guys have kids, you're paying your own health insurance. There's only going to be more. There's only going to be more bills. And so now is a great time to just clear the decks, become debt-free. You just told us, even without the student loan payment included, you're going to have $4,000 left over. So you could save up in five months, you'd have $20,000. So if you paid off your student loans today, you're down to $4,000. We start stacking up. And every month, think about that. You're in a better position every single month by throwing an extra $4,000 towards savings. I kind of like the feeling of being a little bit uncomfortable. I think part of the reason America is the way it is today financially is because we got a little too comfortable. Yeah. With borrowing, with keeping up with payments. And man, when you feel that, man, I only got $4,000 to my name. You want to get there faster, don't you? Right. And so it tells me the other side is you're going to pay off your student loans slower because you have a little bit of cushion and comfort in this emergency fund right now. Yeah. But that's actually a detriment to your own goals and your own success by doing that. So, man, you're in such a great position to knock this out. Some people have to sacrifice for two years, three years to knock out the amount of student loans you have. You can do it today. Right. Restart with a dual income. No kids. This is the time. Yeah. Are you going to do it? America wants to know. I think we're going to. We're going to try to do it. That's weak. I think we're going to try to do it for sure. We're going to try. I got to talk to the wife, but I think we're going to do it. Here's the thing. Here's the thing. Can you can you meet me in the middle? Could you at least guarantee that, Jade, I'll take half of it and I'll pay half of the student loan? Can you at least guarantee that? And I can guarantee. OK. And then if that feels great, can then can then. Can you take the other half of the student loan payment and pay it off? Can you go half at a time? We can go. There you go. Wow. We met in the middle. That's a good compromise, Jade. You know, sometimes I'm a little too. This is like good cop, bad cop. Yeah. We're all or nothing people around here. I mean, I've certainly am an all or nothing personality. But every once in a while, you get you just got to give somebody a little bit of leeway. And then they go, oh, yeah, I can do that. Sometimes when you have to tiptoe into the pool, you're like, oh, it's too cold. When you jump in, you're like, all right, we're here. I'm in now. I'm so. Smoked. Listen, sometimes. Too late to go back. I don't know, George. Sometimes you do just go. It's the water's too cold. Jade's not doing it. But it's an interesting principle. For those that don't know, what we recommend in baby step one is a thousand dollar starter emergency fund and then everything else going toward debt, which means if you have twenty thousand dollars, we literally recommend you take 19 of those twenty thousand dollars and throw it at your debt, leaving you with a thousand. And it's for two reasons. Number one, it actually creates momentum fast, which is kind of what you need to get out of debt because it's all about behavior, way less about math. And number two, it lights a fire under you to get to that point where you can build back the emergency fund. It's a two parter. It goes in tandem. And when you get too comfortable, you've got a bunch of money on this side. It's just harder to have any motivation. It is. It is. And so do the hard thing now. Just rip the bandaid off. Pay it off. I promise you, if you hate it, you can always go back into debt. But very few people are borrowing against themselves just to have some savings. when i hear the words open enrollment i'm immediately stressed out and the same goes when i hear deductible and premium you probably feel this way too choosing the best most affordable health care for your family can be overwhelming will my premiums go up is the doctor i want even in my network can i even afford this well the good news is there's a different option christian healthcare ministries. CHM isn't insurance. It's a health cost-sharing ministry where members share each other's eligible medical bills. So instead of premiums, you make a monthly contribution with programs starting at just $115 a month. And here's something you don't hear often. They're not raising their prices this year. Guys, this is huge. And you also get to choose your own healthcare provider. No network limits. And unlike traditional insurance, you can join at any time. There's no enrollment window. And best of all, you don't have to choose between your health and saving money. With CHM, you can have both. It's why Ramsey has trusted them for over 15 years. Visit chministries.org slash budget and use promo code Ramsey to get a 50% credit towards your first month of membership. our christmas deals are here you can get life-changing gifts for every age and stage of prices that make holiday shopping a little bit easier that includes 13 best-selling hardcovers including rachel cruz's kids books 22 career assessments 12 questions for humans decks eight dollar audiobooks and ebooks and more check it out go to ramsey solutions.com store if you're on youtube or podcast or spotify just click the link in the description we'll take you right there. Sean is in St. Louis up next. What's going on, Sean? Hey, how are you? We're doing great. How can we help? So basically I'm 21 years old. I currently travel for work and I'm really wanting to, I'm trying to decide if I need to pay off my wife's car and then basically take a job at home, paying less of being able to be home with my family. So the travel job pays more. What are you doing for work i'm a welder okay what do you make now um after taxes probably about 11 000 a month whoa you're killing it dude at 21 yeah that's unbelievable okay what would you make if you uh stayed local well um i would be going down to roughly 4 000 a month but my wife would also go back to work she's an rn so she would also be making that we'd make about 8 000 oh okay 8 000 total if you went back home so really you'd have a net drop of 3k a month for you to be home with family yes and honestly i feel like the net drop is even less than that just because being gone i spend probably a decent amount on hotels and life on the road eating and everything yes It feels like a little bit of a no-brainer. Were you thinking about paying off the wife's car first? I think I heard you say that. Yes, I'm more or less just nervous about the amount, which we have a decent amount saved up, so I think we'll be okay. How much is saved? I just wanted. We're checking in savings, roughly $70,000. Wow. Oh, and how much is your wife's car? To pay it off, it'd be about $30,000. And any other debt? um other than our house no i've recently paid off my truck is there i mean unless you just would like to do the job longer i don't see why you would continue to do the job because you have the money that if you wanted to reach over and pay your car off totally you could and still have 40 000 saved your wife goes back to work and now your budget's fine i mean in your to your point uh the three thousand dollars maybe it's more like fifteen hundred after you take out all of your travel expenses have you sat down and actually done that budget to see what the net loss actually would be yes and i roughly i think it is about one to two thousand dollars okay and i really don't think it'd make that much think about that you're dead free at that point what was the car payment uh it's about six hundred dollars a month so that's not going to be there so that frees up some money in your budget. So now we're going, okay, can we make it work on $8,000 or $9,000 or $10,000 a month with no debt and an emergency fund? The answer is yes. Yeah. Go do it today. Yeah. Okay. Way to go, man. Yeah, because I think that puts us, I've been looking into the baby steps, is Effectively today, you could begin putting 15% of your gross income, investing that, and then when your wife starts working, 15% of her gross income, and that's the way it works. Put it in an employee-sponsored account. You could start with a 401k, especially if it's a Roth or if they have a match. And if they don't have a match, you could start with an IRA, a Roth IRA, and do it like that. But yeah, that's the key. Because you guys are going to be grossing over 100k, so that's at least $15,000 a year. That's two fully-funded Roth IRAs right there. Yeah. That's pretty cool. Yeah. At 21, mind you. Yeah, I think the main worry is all that money leaving at one time. Because currently, I do have it in a, I forget what it's called, but the high savings. High-yield savings, uh-huh. Yes, ma'am. Well, here's the thing. You have to turn that fear around because I think it's a very fair thing to feel. The last caller kind of had a similar thing. They didn't want to take the money to pay off the student loans. But you kind of have to. You kind of have to reverse engineer it and look at it both ways. Because the truth is, as long as you have debt in your life, there's a level of risk. And you sense it more when your situation changes. If you were to lose your job today, would you feel better knowing that you have no debt and $40,000 saved? Or would you feel better knowing, okay, I have to make this payment. I still have to pay $600 and whatever many dollars a month out of my savings when I could be using that to eat on. Like, there's just something that shifts when you have debt. And you have insecurity. And so that's one thing. And then the other thing is, gosh, if you were feeling this trepidation about, oh, I just want to make sure my money is secure. I want to make sure my money is secure. You never would have taken out the debt to begin with. Right? So just flip that. And we're trying to make sure that you have the most solid foundation possible. And the way that you do that, you clear out the debt. You stack up three to six months. And then you start building that wealth and investing. So you're going off on the right track. You will be totally, totally fine. To George's point, you know, what could really happen, you know, when you've got all this margin sitting there waiting for you? You're now at zero. And what $40,000 emergency have you experienced? You got the car payment back. Yeah, I did. So you already have a fully funded emergency fund. That's great. Now you're just building wealth for the future. And at 21, I'm telling you, man, if this is your new identity is I'm a guy who lives debt-free, who doesn't borrow money, who pays cash for everything in his life, who lives on less than he makes. Who builds wealth for the future. Show him what he wins. I just crunched some numbers here on our investment calculator. And if you're watching on video, we can pull this up. But if you just invest your $1,250 a month, so that's $15,000 a year, right? You guys never make more. You just stay at this level for 40 years, from 21 to 61, at a 10% average rate of return in the stock market, you would have $7.9 million. Yeah. That'll do. Yeah. So if you just stay on the path, that's what the future could look like. And I think you're going to get there. You're a guy who works really hard. You want to take care of your family. So I would highly recommend paying off the car, staying out of debt, buy your next car with cash. And it's going to be so easy to stack up that kind of cash to go buy a $30,000 car 7, 10 years from now. Yeah. Absolutely. And there's no way, I'm just going to say this, there's no way it just sunk in to his mind that $7.7 million. That's hard to imagine. You can't go out and buy lottery tickets to win that money. And we basically said, hey, you're going to have this. All you have to do is do what we just told you and just ride the train. And the problem is debt robs people's ability to build wealth. If I went on the street and asked people, hey, why aren't you investing? Most of them would say, well, I can't, I don't have the money. And I'd say, how much are your debt payments? They'd tell me, I got $1,000 worth of debt payments. Well, if you just had invested that, there's your money. You could add some wealth. But instead, people decide to give it away to lenders, which just breaks my heart that you're making them rich instead of your own family. But if you can understand that, the earlier, the better. I mean, gosh, because in his situation, they are going to be just sickeningly wealthy. Everyone listening and watching is like, what I wouldn't give to go back and be 21 years old. Me! Completely debt free. Yes! Making what they're making, investing what he's about to be investing. It's shocking. And I've talked about this on the show before, but the power of a dollar based on age is so mind-blowing. And I wish I could shake every 20-year-old and say, that dollar you invest is not a dollar. It's $73. At the age of 65. That's what it turns into. But if you invest that same dollar at age 55, it's worth $4 at 65. That's the power of compound growth that's hard to put on paper. Yeah. And it's also hard because they go, well, cool. I want to live in the meantime. He's living just fine in the meantime. He'll be just fine. He'll be making $8,000 a month. He'll be doing a job he actually wants to do, spending time with his family. And he'll have the peace of knowing, with my income, I was a financially responsible adult. And here's what I was able to do with it. There's so much shame that people feel around their money because they know it. And we all know it. You go to work every single day, eight hours or more a day. You're grinding. You're sacrificing your sleep, your time, your sanity, your time with your family. And when you look up and you don't feel like you have anything to show for it, that creates a lot of shame. But how good does it feel to look up and go, I actually did the right things with my money. And here's what it got me. You can't put a dollar amount on that feeling. It's pretty incredible. Yeah, that income can help you survive. But you've got to do something with it. The discretionary income, the margin you create, that's what's going to help you thrive. And that's where investing comes into play. And a great reminder, trade school, guys, look at how well this guy is doing at 21 with no student loans, going to trade school, becoming a welder, providing a need that AI cannot replace. So tell your kids, don't go out and get $200,000 in student loan for a degree they're not sure they'll even be able to use once they graduate. That's a recipe for disaster. So way to go, Sean. We're so proud of you, man. I've got a question regarding basically the use of my assets. So I currently have a job as a ship captain, and I am potentially being offered a new job with a different company. However, there's a three-year apprenticeship program. And for those three years, I would see my income reduced by upwards of 65% to 75% of what I'm currently making now. So the end of the apprenticeship is financial freedom completely. But I'm trying to figure out, once you get through the program, the financial aspect of the new job is pretty significant. In what way? Tell us real numbers. Like, are you tripling your income, or is there like a guaranteed retirement package? 900 plus with the new gig. Yeah. But you just have to endure the three years of a 65% drop. What would that give you? Give us real numbers. So your income would go from what to what? I'm around 285 right now, and I'd be looking at about 90. Okay. Could you do any work outside of that, or is it pretty comprehensive where you're stuck? No, it's your work in every single day for almost three years. Okay. What's your family dynamic like? Are you married, kids? Married, two kids. They have a great life. Life doesn't work. And so I don't really want to, like, directly affect their lives. I don't want to affect their lives too much. I want to try to find a way to, you know, be. You want to keep things afloat, if you will, Captain. Exactly. Okay. Because also, yeah, because I'm going to be gone for a long, you know, I'm not going to be around a lot, so I don't, you know, that's going to be tough enough for them as it is. Yeah. How old are you? I'm 33. Wow. Okay. So what is the plan then? Because can you guys live off 90K, or have you created sort of a lifestyle around the 280? Yeah. Yeah, we have. I would say that our expenses are probably $12,000 a month. How much of that could shift? Let's say you had to get flexible, not go, you know, survival mode. I think I can shave $2,000 to $3,000 a month off of that. Is this an opportunity that has to happen now, or could you do it. Yes. Could you say, I want to take a year and prepare and then do it a year from now? No, it's a now or never type thing. Why? Because the company I want to work for, they offer you the position, and you can either take it or you can't. I understand. So it's not like a certification. It is a job offer. Okay. Okay. Yeah. So tell us about your bigger financial picture. Do you guys have debt? Do you have savings? Do you have other assets? So we only have a car payment and a mortgage. I do have a rental property as well that I have a mortgage on, but it is covered. I make about $500 a month. That's off profit off the rental property, but that just goes into its own account for. Okay. What's that property worth versus what you owe? $420. I owe like $250 on it. Interesting. You could net like $150 or so off that? Possibly. I just don't. I'm afraid. Number one, I don't actually know what. So it's leased out through the end of next summer. It's a long-term lease, so I don't really know what the ramifications are of having to push anyone. out of there um or how that works i would look into it i would look into it too not that i want to do that but i'd look and see are there any loopholes uh yeah or any maybe it's as simple as a conversation maybe they're looking for a way out too you never know i mean i hate i hate to keep making puns but this thing's a life raft for you man that's 50k a year for three years to supplement your 90 all of a sudden now you're okay i just always looked at that as uh two college educations for the kids at some point it was kind of like my thinking when it was right but you wouldn't need it you wouldn't need it if you're making 900 000 a year jack 500 bucks a month is spit for what you're going to be making and so college is going to be just fine you could save up for college every single year if you wanted to tell me again uh when is the lease up in the next year in the next summer so um august of 28 back this past of 27 of 27 so that's not that far away i wonder if you could float it yeah if you could float the 90 until then and then you have this influx of cash and you're you're golden at that point how much do you have in savings um we used to have a lot more and then i took a bunch of time off unfortunately last year for the birth of my second kid so we have about 50 right now and what's left on the car loan uh 22 with a 700 a month payment okay so you could knock out the car today be left with almost 30k and then how much could you stack up before this opportunity with the apprenticeship like 40 if i'm lucky that's great so now you you start this apprenticeship completely debt free no consumer debt 60k in the bank and you're you can offload this rental to help cover the gap i mean that's personally you just told me this is the biggest opportunity of your life you can always go buy another rental property when you make a million dollars a year absolutely yeah the priority in the plan you can't say i want to go do this really cool opportunity but while i do it i want to stick to the plan that i had before this really cool opportunity yeah right that's true so you've got to be willing to shift to make i mean like you said this is pretty sweet i'd be willing to rearrange major things in my life in order to make this happen because the upside is so high is 90 or gross with the apprenticeship or is that net uh gross okay so if you think about this 90 plus 50 from if you just take each year you take 50 from that rental income when you sell it that's 140 now let's say even after taxes let's take you know 28 out it's 100k so now you have 100k of net income to use which is close to you know nine plus grand a month so now now you and your wife can do a budget and say okay what would this new life look like if we're making nine plus grand a month could we make this work for three years so that we have this amazing life changing opportunity on the other side and who knows maybe there is a way your wife can contribute to that income too it depends on how much money you're making and how much money you're making doesn't have to be her going to work full-time but even if she did some part-time work and brought in a thousand bucks a month i mean that's so meaningful in the in the big picture of all of this definitely definitely i think that's the game plan do you have any other ideas of how to pull this off well so my kind of the i guess the secondary question was where i was thinking was um a heloc versus we can't even entertain this this is going in the wrong direction my friend you're not desperate here's the thing i was thinking of either a 401k loan stop thinking of it stop thinking of it stop thinking of it because here's what i want to tell you you are not desperate that the ideas you're suggesting are the ideas of a stupid desperate man and you're neither of those things you're in such a good position you just you're in a fabulous position you just didn't see it coming see this coming and you're having kind of to to readjust that's solely what's going on there's a readjustment you're not in a bad position if you do everything that uh george and i said you'd have sixty thousand dollars in the bank no debt no debt freeing up that car payment you're freeing up the car payment you're only doing that for a year a year and a half and then you're offloading this property and then you got a hundred fifty thousand dollars cash that you're going to draw off of and live on your old lifestyle so you're only living on 90k for a year and a half and if your wife goes back to work she brings in a thousand dollars you know does a little side hustle you guys can do this i would go create that fake budget tonight and go okay what do we got to do to live off nine grand max a month i think you can find that money especially without that car payment i'm rooting for you man this is a life-changing opportunity i'm going to invite curiously through you and i would also like a ride on one of the ships one day it sounds fun you well the christmas season is upon us and most of us are out there stocking up on socks and mugs and candles and i love those as much as the next guy but what if you got something that could truly change someone's life well i've got the deal for you we've got best-selling hard covers for 13 bucks that can actually help you and the people you love with money career relationships the important stuff and that beats another santa mug any day so get your money and your life headed in the right direction and i'll see you next time at ramsay solutions.com store that's ramsay solutions.com store all right jay we just took a call from a ship captain making 285 has an opportunity to make 900 plus but it requires a pay cut down to 90k for three years during an apprenticeship he had a rental that he could sell to help keep things afloat for the family pun intended there yeah and we were talking just offline after the call people always want to know what happens after the call we debrief well it was interesting because towards the end he started bringing up what i'm just going to go out and say terrible ideas he started considering debt to make this happen and i i got to thinking about it during the break i'm like why would he suggest a heloc or 401k loan and i thought it's because he doesn't want to exit his comfort zone in any way and if he's still listening you know he he's got this lifestyle where they're making you know he's got this lifestyle where they're making you know uh what were they making 285 285 and you know that's a significant amount of money he's making twelve thousand dollars a month and he's like oh we could shave this back but they he really didn't want to upset that budget even for an opportunity of a lifetime to make almost a million bucks a year and so i got to thinking i'm like you know the things that we teach all the time the seven baby steps usually we're talking about sacrifice we're talking about leaving the comfort zone in pursuit of righting wrongs right you made all these mistakes you got to make it right it's worth the sacrifice but conversely in the other area it's also true when you have an opportunity of a lifetime uh you have a job you have a big break it that too also you have to leave the comfort zone you got to leave the nest when i got this job i was like wow what a great opportunity but i'm gonna have to pick up my whole entire life move it from south florida here to tennessee my husband's gonna have to flex my kids are gonna have to flex i'm gonna have to flex like wherever there's opportunity trust and believe you're going to have to get uncomfortable my friends that's just part of it and so don't try to get out of that and certainly don't try to get out of it with debt or other tools to try to make it easier it's a good thing that's that's part of the process but it's an identity shift just to go all right i'm taking debt off the table like what's funny is in my mind i never once even thought hmm i wonder if we could take a heloc i just went what are the current things in your life that you could move it around offload sell how much could you make how much less could you spend those are the only variables in my life because that was an identity shift for me yes 13 years ago you take it off the table who doesn't borrow money i will find another way and if i can't that's probably god telling me nope don't do it young man that's an unwise decision the borrower is slave to the lender as we know so uh but i'm i'm wishing him the best he's got he's in a great situation i think he can pull this thing off without ever needing to touch debt or his retirement account all right let's go out to terry in san francisco what's going on terry all right please appreciate you taking the call on so many good calls today i uh had an opportunity well i'm 68 years old i'm a contractor four years ago and had an opportunity to buy three acres with three houses which i did and now i'm trying to figure out how i can retire i've got some savings again but um i have a mortgage payment too okay so what are your total what's your current net worth um a current net worth not counting the properties you can count the properties that's part of your net worth all assets minus all liabilities what you own minus what you owe so count the equity a million probably okay and how much do you need to retire have you done the math on that well it all depends if i sell the property it would change everything so what are you making off of these three properties i'm bringing in seven grand a month and paying out five grand a month in taxes and insurance so you're netting like 20 grand a year off of these things yeah okay but also there's maintenance sure so it's probably even less after that if you factor in all expenses and do you have social security coming in have you opted into that two grand a month so you got 2k a month any other sources of income outside of let's say you stop contracting you would have the rental income at 20k a year plus your 2k a month from social security so another 20k correct how much do you need per month to make it i mean if i stayed here uh jeez probably no more than a thousand but you know i would i got an old truck that a thousand a month Is that a quality of life for you at $1,000 a month? Because didn't you say you have a mortgage as well? Yeah, but that's covered with the rentals. Okay. What do you have saved? I got $70 in cash, and I got $140 in the market, and I got about $60 in gold and silver. Okay. And what could you sell these houses for? What would you net? Let's say you sold all the properties, paid off all the mortgages. What would you net after all fees? The appraiser about three weeks ago said like $1,700,000, and I owe $600,000, so I would come out with $1,100,000. So you could net about a million bucks off of this. If I sold, yeah. Is it all connected, or can you sell off two and maybe keep one if there is just a piece that you really liked and wanted to keep? Yeah, it's all connected in there. Really, the county is not very good about splitting stuff, and then I could try, though. Do you live in one of the three houses, or are there all three separate? I live in the back, yeah. Okay, so you'd have to keep at least one of them? Yeah. I mean, yeah, if I'm going to stay, yeah. Where else would you go? Let's say you sold all three. Where would you go, and how much would that cost you to either rent or buy? That's the problem. I mean, rents in California is like probably $2,000. $2,000 or $3,000 a month anyway. So could you sell two of the properties and stay on the last one? It's all one property. It's all kind of connected. I mean, what's the distance between the houses? I'm just wondering if you parceled it out and just kept your little piece, sold the other two pieces maybe to one buyer. I feel like there's options here. Well, that's a possibility. Yeah. To break one off. I just feel like the ROI sucks right now because you've got $1.7 million of properties making $20 million. $20 grand a year. If you just put a million bucks in the market, you would have made six figures this year. Really? So that's where I'm going. If you just sold all the properties and you put a million bucks into an investment account along with your $140K that's already in there, plus let's say you sold the gold, put that in there too, that's $1.2 million that could be working for you in the stock market. And if you got even, let's say an 8% average rate of return, that's pretty impressive. Yeah. Yeah. $1.2 million a year. So let's crunch the numbers for you right here. That's 8% would be, get this, $96,000 on average in a year versus the $20 you're currently getting. Wow. So that's what I would be personally considering. It sounds like also you don't really want to be dealing with landlord issues in retirement. You'd rather just kind of have some truly passive income and not deal with maintenance, repairs, tenants, all of that. I think so. And I like the idea of looking into spreading because I do. I love where I live. Yeah. And I think that'd be totally fine as well. If you said, hey, I'm going to keep this section for me. And then ideally you sold the other pieces of land to one buyer and, you know, they're doing their thing there. I mean, they're going to be your neighbors, so make it a good choice. But I think that'd be fabulous. You'd still get a nice chunk of cash to invest, like George said. Have you ever worked with a financial advisor? I haven't done that yet. I've been thinking about it, but the expense of that seems like. A lot to me, but. Well, if it helps you retire, I would say it's worth the expense. And, you know, there's a lot of different types out there. You can jump on RamseySolutions.com and just interview a couple of SmartVestor pros. So click on SmartVestor there and start to play out these different scenarios of what could be. Because right now you have a very clear goal of retiring. And so I don't want, you know, just good to get in the way of better or best in order to get you to where you want to go. Well, thank you so much. You've worked really hard. And so I'd love to see this dream happen for you. And I think there's a lot of ways you could do this. I'm just doing some napkin math to go. If you just invested this money at an average rate of return, here's what could be. But I think it's possible with your Social Security plus, you know, you netting six figures off of your investment accounts. You could make this last a long, long while. So thank you for the call. Great question. You know, Jay, there's a thing with real estate. So Dave Ramsey famously has a lot of real estate and a lot of mutual funds. He kept it that simple. And Dave loves real estate. But he also got it at a really good buy. That's where the deal actually, that's where you make your money is on the buy, not necessarily on the cash flow. And so a lot of times I don't have any real estate. I don't plan on owning any real estate. I just like to be in the market, make some truly passive income there. And so it's a good reminder. Everyone thinks, well, I got to get into real estate. No, you don't. You can invest, too, and be just as wealthy. It's really depending on what are you into? What are you passionate about? And there can be great ROI on both. But it's interesting to just plug in the same numbers. If your equity in those homes, if you invested it, here's what could be. Yeah, and for him, it just didn't make sense to have all that money tied up for the money that it was actually spitting off monthly. For two grand a month. Yeah, he actually needed the cash, the equity. Thanks for the question. We're taking over an entire cruise ship, and I want you to join us seven days with me and the Ramsey personalities in the Caribbean for a week of new Ramsey teachings, live shows and more. The live like no one else cruise set sail March 2027. All inclusive pricing starts at twenty one hundred and five dollars per passenger. That means your cabin, food, entertainment, taxes and tips are. All taken care of. Reserve your cabin today with a six hundred dollar deposit at Ramsey solutions dot com slash events or click the link in the show notes. We talk a lot about the Ramsey plan here on the show, the seven baby steps, your income is your greatest wealth. Building to live on less than you may get out of debt. And sometimes we like to show you the results of that instead of just talking hypothetically about how you could do it. Right. So in the lobby of Ramsey Solutions, we are honored to have Hector and Rachel here to do their debt free scream. Welcome, guys. Hi, guys. Thank you. Where are you from? We are from Casterbury, Florida, right outside of Orlando. Wonderful. Here to do your debt free scream. How much did you pay off? We paid a total of sixty eight thousand. Eight hundred and forty three dollars. Awesome. How long did that take? It took us a year and eight months. Fantastic. And what was your range of income during that time? Our starting income was ninety four thousand five hundred and ninety eight. And our ending income was one hundred and eighteen thousand six hundred and four dollars. I knew you were going to you knew it down to the dollar. That is the most impressive part. This man knows his number. Every dollar counts. That's right. I know that's right. What kind of debt was the sixty eight thousand eight hundred and forty three dollars? Well, George, as you would say, we have our shark. We had a charcuterie of debt, credit cards mostly. But we also had auto loan, personal loan, medical debt, dental debt, 401k loan and taxes. That's a buffet. It would have been shorter to ask which debts you didn't have. Exactly. A little of this, a little of that. OK, so take us back to a year and eight months ago when you guys were starting this plan. What was the why behind this? How'd you get started? How'd you get connected to this whole thing? I had just paid off my car and I was so excited. And then quickly I was no longer excited because I realized I still have other debt. What am I excited about? I still had credit cards to pay. I still had the loan. And I started panicking because I'm like, well, how am I going to pay all this off? Payments every month can't catch up. So I started freaking out and I really didn't know what was going on with Hector either. Of course, our finances were not combined. So we had been married for four years. Four years at the time. I didn't know what was going on with him. I knew he had debt too. So I really didn't know what to do. So I started to do some research and found The Ramsey Show and started listening like an addict. And finally started to ask Hector to listen too. And he was a little reluctant at first, but then he started to see that I was serious about it. And then I listened to George's book. Yes! And had Hector listen to your book as well. And that was like around October. And then we came to Nashville and Jade was there with Rachel and we went on the show. I mean, not the show, but we were listening and we were able to meet you guys. And after that, I think I saw the spark in Hector and we just hit the ground running. It became real. So that's when you started. That's when you combined the accounts. No, actually, we didn't combine until like January. Tell us about that. How did that? So you're already on the debt-free journey sort of separately at that point? Yeah, I was. It was very hard. Yeah, it was tough because we were doing it separate. So it's like almost we're married, but roommates. So your income is going to your debts, her income is going to her debts, and you're both cheering each other on. Yeah, we had separate banks accounts, all of that. So it took me a little while, but once I listened to the podcast and we came together, it made more sense to come together. And it just made everything that we have done so far so much easier. Tell us about the barriers. that kept that from happening. Because I mean, what you guys are talking about. We get that call every day, multiple times a day, and it's really hard for people to make that transformation. So what was the unlock for you guys? So again, I was listening to the show every day and every time I heard somebody talking about their husband being over there and they're trying to like combine their finances, I was like, yes, it's very hard to do that when you're trying to be organized. I downloaded every dollar and I was just plugging it in, but it didn't make sense because I didn't really know the whole picture. So I really needed him to lock in, but it was prayer. I just prayed and just, I knew that through repetition and listening to it out loud, I knew something would sink in and it did. Hector, what'd that look like for you? For me, I was so used to doing things on my own that I just left it alone. Everything was getting paid. So for me, it just seemed normal. Like nothing was off, nothing, we weren't behind on anything. So I just treated it as a normal day. But then finally sitting down, talking about it and realizing that it's better for us to each know what's coming in as one, it made it so much easier. Oh, I'm proud of you guys. That, I mean, it's, it's not an easy transformation to make. And you guys made that, that's going to inspire so many people. Love that. What's life like now on the other side, debt-free combined finances on the same page, like walk us through that transformation. It's unbelievable. It's so much peace. Um, this is, this is all we, we knew that this would happen. Once we paid off the debt, but because we were paying off the debt and working so hard, we didn't know when it would come, but we knew that if we kept going, it would come. And then when it did, we were just like, we don't have a payment. It worked. We just, our money is actually going to go to savings now and it just worked. It was just inevitable, but we just kept going every day and going to work. And, um, we both worked two jobs, so it was hard, but it worked. What were some of those bigger sacrifices you guys maybe both made or individually made to make this happen? Was it the third, second or third job? Was it cutting out this thing out of the budget? Sleep for both of us sleep because I get up early in the morning and she works two jobs and our schedules are so, so different. So sleep, spending time with each other and spending time with friends or even going out to do fun things. You know, we got to cut back on things. You were just two ships passing in the night. Jade said that one episode. She was just like, y'all are just gonna have to be two ships passing. That's right. It was 20 months out of your, you know, 50 year marriage. Like that's crazy. It's such a small amount of time, but it feels like this is going to be forever unless you get serious about it. And the math starts giving you hope. Yeah. Did you guys have a plan to do it in 20 months or was it more aggressive, less aggressive? It was our goal. Um, our goal was to do it within two years. And so doing it in little four months shy of that was just incredible. Um, we also said we were going to come back here in two years and next or six days from now, the 12th will be two years. Wow. Um, today it's been two years since we started the plan. Wow. So it's like a lot of, a lot of milestones. The time, the time passes anyway. And for anybody who's not watching, uh, on YouTube, they showed a picture and it had you the morning, you and the evening, you and the morning you, you were at your corporate job. What do you do for a living? I schedule surgeries. I work at a hospital. Okay. And then the evening you was working at Publix. Yeah. I still work there and still making it happen. Yeah. And that's the way it looks. Hector, what were you doing? She said you have two jobs too. Yeah. I work for white cap, uh, construction supply company as a truck driver, a dispatcher. Um, I go in at three in the morning and get off. Once I get off, then I go do my mobile mechanic. I'm trying to get that business going. You guys are doing exactly what it is that we tell people to do. It's what we did ourselves, which is you are going to work crazy. You are going to be working day and night like Michael Jackson. But if you do it, it pays off the time. The two years is going to pass. You started, you were in one place like, man, paying off the car. Isn't enough. We're not having our money together. And then you just walk step by step. You do the journey in two years later, you stand on the stage. You're completely transformed. Your marriage is transformed. Your money's transformed. I mean, I just want to add that it's because of the Ramsey plan that we were able to start this business because we had to think we had to be creative. Yes. So we're like, babe, you got to get to back to mechanic. You got to go ahead and grind. And he did. And now he's going to eventually make that. He can do that full time. That's incredible. And that that's another thing that is a byproduct. You start to look around and go, okay, what can I do to make some extra money? The smart people look at what am I, what am I already passionate about? What can I already do? How can I serve people? You start getting into that, realizing, oh, I can make a lot more money doing this before, you know, you started your own business. What a beautiful picture of what can happen when you come together and follow a plan. Guys, we're so proud of you. We got two, every dollar one year subscriptions for you. You can use those. You can give them away. But now the moment we've all been waiting for, we've got Hector and Rachel from the Orlando area, $68,843 paid off in one year and eight months, making 94 all the way up to 118,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt free. Even their pitch rose simultaneously. That's how on the same page they are. Yes. Grab hands, shout, say it with your chest. It just warms my heart. I mean, getting debt-free is one thing, but transforming your marriage in the process, transforming your careers in the process, that's a beautiful byproduct of just committing. They went all in. There was no ish there. Waking up at 3:00 AM, you can't be ish. You're all in at that point. Way to go guys. Well done. It's the holiday season. So here comes all the excuses for not sticking to a budget. It's just this one time. It was on sale. And how about this one? I'll start fresh in January. Yeah, right. Money's not a math problem. It's a plan problem. And without one, your paycheck will disappear on you so fast. That's why we built EveryDollar. It helps you give EveryDollar a job before it's spent. So you're telling your money where to go instead of wondering where it went. EveryDollar is backed by the same proven plan that millions of everyday people have used for over 30 years to beat debt and build wealth. Get on a money plan now so you can get into the new year already making progress, not excuses. Start EveryDollar for free. Download it in the app store or Google Play today. Our scripture and quote of the day. We've got Isaiah 48:17. "I am the Lord, your God, who teaches you what is best for you, who directs you in the way, you should go." Mother Teresa said, "Some people come into your life as blessings. Other people come into your life as lessons." Wow. What do you think I am for you, George? Currently a blessing. Thank God. Just wanted to check. Currently. I want to make that very clear. Time will tell. Oh, boy. Well, it's everyone's favorite time of year. It's open enrollment period for health insurance. It has just begun. And if OEP sounds like alphabet soup to you, we're going to break it down. Health insurance is the most important thing in your life. It's the most important thing in your life. Health insurance's open enrollment period or OEP is from November 1st through January 15th. So whether you're self-employed and need help navigating the market or you're unhappy with the health insurance your employer provides, you've got options. So feel confident in your health coverage choices by going to ramsaysolutions.com/health-coverage. There you go. Very well done. We'll also drop a link in the description of this episode. All right. Talia is in Los Angeles up next. Talia, did I get that pronunciation right? Hi. Yes. Talia. Talia, wonderful. Great to talk to you. How can we help today? So I'm a 20-year-old college student and I'm nanny. I max out my Roth every year. I invest about $2,000 a month just for my income. And I get paid to go to school with my Pell and Promise program grant. Nice. My parents are, they don't make a lot of money. But I do have a $70,000 dollar share that my grandma set up for me when I was born. And I'm not touching it since I'm getting paid to go to college. And so I was thinking, even though I know I will get taxed from taking that money out if I'm not using it for college, I wanted to use it to hopefully buy some real estate, maybe a triplex. The college fund, how is it invested? Is it in a 529? Is it just money that she gave you? No. So it's in a ScholarShare account. ScholarShare. Okay. I thought I heard you say college fund. And so, no. Yeah. So it's in a ScholarShare. So I'll get taxed, but I don't use it for college. And so, no. Yeah. No. Yeah. But I'm not going to use it for college. And I'll get taxed about. Approximately, I'll be able to take out after taxes about $60,000. So it'll cost you 10K to pull this money out. Is it just taxes? Or are there penalties as well if you don't use it for education? I believe that's combined with taxes and penalties. Okay. And there's nothing else you can do with it. So I'm familiar with 529s. I know this one is California specific, but it is a 529, it looks like. It's just called ScholarShare 529. Okay. Okay. So there's a couple things you can do with this. I personally wouldn't use this for a rental property. It sounds like you're trying to create some. I'm going to put this in air quotes that you can't but passive income. Is that correct? Um, not necessarily. I was going to use any of the money on top of what I made from the rentals to just funnel it back into the mortgage to pay it off and hopefully 10 to 15 years. I was looking about buying a property about 135,000 out of state since California is so expensive and putting about 40,000 down. So would you move? Um, not necessarily. I live with my parents, so I own my car outright. I don't have any bills and I would just probably, um, you'd be an out-of-state realtor. So you're not, you're not going to live in the triplex. You would rent it out out of state, be an out-of-state landlord. Oh boy. This feels messy. And all of that at a 10% penalty plus the taxes on this money. Yeah. So, I mean, I'm open to other ideas of what to do with the money, but since I already, like with my own personal income, I'm able to max out my Roth and invest money. I was thinking since it's going to take me so long to get that money for a down payment. Why not roll it over to a Roth IRA over time? Once you've hit the 15 year account rule, because you can roll up to 35 grand over time. And so that money set up at your age is going to be huge in retirement. And you can also take money out against scholarships. So you mentioned you got a bunch of scholarships. Um, yeah. So the money that I get from scholarships, um, I just invest immediately. Right. But you can, pull out of the 529, a match against that. And you can do that without penalty. Now you will pay taxes on that, but you won't have the penalty involved. So if you've got a $10,000 scholarship, you can take out $10,000 from that 529 without the penalty. So that's one way to get some money out, uh, that, you know, won't incur that penalty. Cause it sounds like if it is a 529 plan, you will have that penalty if you just take it out and use it on a rental property. But that being said, if I pulled it out, uh, I would not do this rental deal in another state. I just don't think you're, I think there's several issues with that. Number one, it's out of state. Number two, it'd be your first experience in real estate and you're doing it from such a long distance. Um, and I don't recommend anybody buying a house for rental if they've never bought and lived in a house themselves to understand what it takes to actually take care of a property. Okay. So there's a couple of things here. I think in your future, if you want to take care of a property, you're going to have to take care of a property. So if you want to, you know, do the real estate thing and do it within proximity, I think that's a fantastic idea doing it with cash. I just don't think it's the move for you today. It's not the move for you today, but you've got a great options with that 529 to roll over 30 up to 35 K over to a Roth IRA, taking out money against scholarships, and then use that to fuel the next couple of years of your life. Instead of using it for real estate investments, you're probably going to want a place of your own one day. You might want to upgrade the car. thinking of is like running that out and paying off that mortgage and then selling that property once it appreciates value in the next 15 years to eventually use as a down payment for my own property you could just invest a portion of money and make that happen outside of retirement yeah without the hassle of being a long-distance landlord how much money did you how much money did you receive in scholarships um well i get like a monthly check and it's kind of different from every every month like this month i got like four thousand dollars or not every month every quarter okay so this quarter i got four thousand dollars last quarter i got about 800 it just depends kind of depends okay all right well you've got options there i wouldn't do the real estate deal now it sounds like that's something you're excited about for the future but i'm with jade that i would work on getting my own property first and down the line you got plenty of time and you can invest in the meantime without needing to create a whole mess out of state but i appreciate the question dalton is in pittsburgh up next dalton welcome to the show hi happy to be on um well my wife and i we uh are recent college graduates and we just paid off our loans i graduated in may of 25 and since then we've paid off 98 000 in loans wow that's incredible in a year and a half so yes excellent excellent thank you um but with that um we're starting to work towards our emergency fund and now um we're going to be working on our emergency fund and now um we're going to be working on our emergency fund and now um we're going to be working on our emergency fund and now um we're going to be working on our emergency fund and now um we're looking at um what we can do next to start investing and um we are both teachers so we do not get a 401k match or really anything that we can control so we were just kind of lost in the world of iras roth iras and all the numbers and all the letters and we were trying to see if you guys could give us any advice on that so what do you get 403bs um well we have a state-ran uh retirement plan it's like do pennsylvania state uh educators is it more of like a pension situation or deferred comp versus a traditional retirement plan yeah it's more of a pension than does it have okay so they automatically are pulling money out yep and i can't put more or less or i think it's five-ish percent okay so i would consider that kind of gravy on the biscuit and it would be my goal to invest 15 of you guys's gross income i'd start with roth iras and then from there you know you said you can't do any more than the five percent so you can't look back and say hey i want to fund this any further no it's set uh like we can't touch it really okay then from there i'd be looking and say hey maybe i can get uh access to an hsa with a high deductible insurance plan if i have access there i'd invest some money there and then i'd probably go to a brokerage account and start there okay so the simple filter here dalton we're walking you through is match beats roth beats traditional beats a taxable account so those are the sort of the four options you have if you don't have a match let's move to roth options once we funded all the roth options we have access to then traditional options if we don't have any more of that we still haven't hit 15 then we can go outside of retirement and just invest in a taxable brokerage account so you've got great options what's your household income going to be or currently is um so currently we are at a gross about 130 awesome that so that's two fully funded roth iras and then a little more yeah and then um every year that's going to go up a little bit more every year so i love that um we'll stay on the path and get the emergency fund set up too three to six months of expenses i know we're excited about building wealth we got to create this cushion to make sure we never have to go into debt again that's what the emergency fund will do that puts this hour of the ramsey show in the books remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus so i hope you enjoyed this video and i'll see you in the next one bye