Temporary Sacrifice Can Change Your Future

brought to you by the every dollar app start budgeting for free today normal is broke and common sense is weird so we're here to help you transform your life and your money from the ramsey network here in the fairwinds credit union studio this is the ramsey show i'm jade warshaw next to me george camel call them gk take in your calls about your life triple eight eight two five five two two five we'll get you on the line call in we'd love to hear your call we've got travis who's in west virginia on the line first hey travis what's going on in your world hey how are you today we're doing good what's up great great it's a pleasure um so basically i'm living paycheck to paycheck and just not really sure what to do all right well tell us what's going on is it uh do you feel like it's a thing where you guys are overspending or is it a you you're just not taking home enough money um i feel like it's not taking home enough money um i have my monthly budget here and it's one thousand seven hundred and six dollars and 21 cents and my monthly net is let's see uh two thousand sixteen dollars okay and that's what you're bringing in or that's what you're spending um that is my bring home monthly is two thousand sixteen dollars okay are you single um i am engaged i do live with my fiance and is she bringing in any money we actually work at the same place and we make the same amount of money so total about four thousand dollars coming in between the two of you if you are married in combined finances um combined finances her budget is going to be roughly about the same so we would just need to double it this was just my monthly budget so four thousand thirty two or give or take between the two of you and then the seventeen in expenses double that as well yes yes ma'am okay okay okay so i mean there's there's a couple of things going on here george alluded to the fact that it it is strange that you're already combining income we would not suggest to you know combine income with somebody that you're not married to uh i'm not going to hang out there too too long but the next part is okay how much is you guys's rent because that tends to be one of the biggest areas where we see encroachment on margin yeah so we actually have a mortgage um that was my fiance's mortgage and then whenever i moved in with her um so we we don't actually have any rent just a mortgage how much is that a month it is 979 okay are you on the mortgage i am not no sir so you're just donating to her equity right now yes pretty much and i i pay the um the other bills such as power water um all the other stuff how come why is that on you i just feel like it might be helping you know do my part where i you know live here and whatnot okay when is the wedding just curious um august of next year okay so what i'm finding is it seems like based on what you're saying there should be around six hundred dollars of margin if we're uh taking home four thousand expenses are thirty four hundred including the mortgage are you seeing are you guys experiencing that six hundred dollars of margin um i just feel like everything is really tight like no wiggle room at all um you're seeing zero dollars you're like man there's nothing left at the end of the month yes pretty much as far as on my end yes do you have any debt much um yes my consumer debt is um total um with all credit cards student loans and everything is two thousand eight hundred and forty seven dollars and was that included in the thirty four hundred and forty seven dollars of expenses? It was not. Oh, well, there's our problem. You're in the red. Are you talking about, do you have three grand of consumer debt total? Yes, it's total. So monthly it's $271.03. Okay. And the $271, was the $271 included in the $3,400 of expenses? Yes, it was. Okay. So here's what I think is happening. I don't know. You can tell me if I'm wrong or right, but I think that people a lot of times think that they're budgeting their money. And what happens is they go, I am planning for all of my most important expenses, my rent, my car payment, my bills, and they budget that money. But then when the margin happens, that's kind of just falls in a treat yourself category and they don't budget for the margin. And as a result, it kind of gets swept away. And it's like, what happened to the margin? Because there was no plan for that money. And so my guess is if we give you every dollar, because you're not using every dollar currently, are you? No, I just do pen and paper budget. And there it is. And I love that you had the thought to try to create a budget. But George and I will tell you all day, doing a budget on pen and paper, there's so much room for things to fall through the cracks, obviously in the ways that I just laid out. But also in being able to track your transactions, because something tells me every time you go to the store, every time you come in the house after you've spent money, you're not running to your notepad and writing it down and balancing the ledger like we used to do in the 90s. It's probably just like, hopefully this works out. And then you just balance it at the end of the month. And you realize, oh, crap, I went over. Yeah, yeah, I definitely feel like you're right with that, for sure. You might be budgeting $300 for food, but in reality, your bank account says you spent $478. So that's the gap we're trying to, we're trying to find that margin that's in the couch cushions right now. And all it takes is some intentionality. And that'll be one part of it, because freeing up that $300 or $600 is great, and that'll help. But we have another issue here, which is getting this income up. So what are you doing for work right now? Um, so I work at a factory. We just do small manufacturing. I do, I just make $1710. I'm really not sure what I want to do career-wise. I live in a very rural area. What's keeping you there? Mainly just the money aspect and family. Well, it's not the money. It can't be the money. Like not being able to have enough income to be able to move. I apologize. Oh, okay. So we're saying, what if you move to another area? Where there's more opportunity to make more money. And that way you're kind of, the tail is not wagging the dog, but you're actually letting the job denote where you go because there's opportunity there. Yeah, I could explore that possibility for sure. And, um, see what other areas around would, um, What's your degree in? Um, I actually don't have a degree at all. What were you pursuing? Business. Okay. What kind of business were you looking to get into? Accounting. Okay. What happened there? Um, I just haven't been able to, I was looking at the student loan aspect and it was going to be way more student loans than I was hoping to take out. Okay. So did you finish out, how many credits did you get or did you finish a semester or two and then drop out? Um, just one semester. Yeah. Um, I did finish the one semester. Because I think education is a, is a key, might be a key factor for you, even if that's getting a certification, an associate's degree, going to your local community college. And finishing some education, because I think that's going to give you a boost you need in the marketplace to go, okay, I can actually go do an accounting job. I can run the books for a small business, for example. And so it's, it's not that it's, you're living a terrible life right now. There's just not a lot of upside. As you mentioned, you're in a rural area. This is one of the only, you know, gigs in town, it sounds like. And so your opportunity to go make 20 bucks an hour is even tight, right? Yeah. Yes, sir. I actually drive 50 minutes one way to work. So, um, gas is a very, uh, big part of that budget as well. Wow. So you're way out there. Yes. The factory's like in the big city. Yes. It's in a bigger, bigger city. I actually, across state lines to get to that factory job. Well, then I really liked George's idea. I'd be researching some online options and I'd at least start pricing it out because so much of the journey is creating a plan and saying, okay, I've got the numbers. Now that I've got the numbers, let's work backwards. How can I begin to save for this program? How can I begin to stack up some money so I can start to take some courses? And nothing that George and I are suggesting is going to happen overnight or even in the next year. But if you start making those small strides towards it, you're going to look up in five years, maybe you'll have your degree and maybe you'll be doing your first accounting job. And that's really exciting. Right now, you've got the opportunity to do two of the best things at the same time, be outrageously generous and keep more of your money away from the IRS. It's called the education freedom tax credit. Right now, there are kids all over the country who can't get the education they deserve because their families are not getting the education they deserve. all right back to the phone lines where we have peter who's in kansas city kansas hi peter you're on the line hey george and jade thanks for taking my call absolutely how can we help today my question is about the ramsey rules for when you can buy a new car versus used car given that it feels like the car market has changed in the last few years our family is in the market for a minivan because we've got a child number three on the way and it seems like cars are keeping their value more than they used to be in the past so the old adage of you buy a new car and you drive it off the road and you buy a new car and you buy a new car and it seems like that's not always the case nowadays in particular the toyota sienna that we're looking at seems to be only losing five or ten percent of its value after a couple years so i'm just wondering if ramsey principles have changed at all in regard to changes in the new versus used car market or things are still the same as they traditionally were well i mean don't get me wrong i do think certain models do hold their value better than some models for example an escalate is going to hold more value than i don't know gosh a kia sorento thank you and so there is some truth around that honestly i don't know a whole lot about a toyota sienna uh that being said the principles haven't changed tell us a little bit more about what it is that you're trying to do with your situation and we can why does new matter so much more to you versus getting a 2018 sienna for example um well my understanding is that if you're buying a new car and you're buying a new car and you're buying a new car and you buy three to five years old that's sort of the sweet spot where you've gotten most of the depreciation out of the way um and you still have a vehicle that uh in theory won't have too many miles on it where the um repairs will not be uh too costly and you know if it's the case that sometimes the the new vehicle that you're buying really is not depreciating that much at all and i think conversations online where a couple years later it's actually increased appreciation a little bit specifically you know again that might be an exception um i guess wouldn't it be worth it then to buy new even if you don't have a million dollar net worth uh even if it's a little bit more of a percentage of your annual income so what how much is your annual income um as a family we're around 300 000 okay you guys have a fantastic income and what's your current car's worth uh i haven't done kelly blue book but i would say close to nothing okay so they're old it's time for an upgrade so making 300 grand how much do you guys have saved for a car we could buy it in cash right now the new siena's are anywhere between 50 and 60 depending on the model which really seems crazy but again they're they're holding their value at least but you have that cash you have the 60 000 in addition to your emergency fund we do yes okay and what's your net worth i'm just my guess is it's on the million side am i wrong uh probably a little just just a little bit under that okay how much how much under like 10 grand or like 100 grand uh i'll ballpark anywhere between 800 and a million okay so truthfully on paper you would be well within your bounds to buy this brand new um for a couple of reasons uh the first rule and i think you know this we say that things with wheels and motors should not be any more than half of your annual income and that wouldn't be the case here obviously at 60 000 you make 300 000 it's not even you could get two and you'd still be all right uh the next part of it is to buy a brand new vehicle yeah we want you to have a net worth of a million dollars and i think you understand why otherwise you wouldn't have asked your question and the idea is let's pretend the depreciation let's pretend george and i are right about depreciation on most vehicles which i believe we are uh the stats would tell you that after one minute you know you could use you could literally lose nine to eleven percent of your annual income and that's not going to happen that's not going to happen in the long run you're not going to be able to do that you're not going to be able to drive it off the lot and then of course within year one it could be up to twenty percent and after year five it could be somewhere up to like forty and fifty percent and some would say sixty percent so we know that it's going to depreciate over time and the idea is hey with a new vehicle knowing that that's going to happen would you feel comfortable in your case if we're talking about eleven percent would you feel comfortable with six or eight grand being in the middle of the floor and you just burn it and say hey i'm okay with that as long as i get to have this sienna so i'm going to buy a new vehicle and i'm going to buy a new one and i'm going to buy a new sienna and the truth is yeah you would i can tell you love this car you've done a lot of research on it and the money backs up that argument for you that six or eight thousand dollars is not going to change your world yeah i agree with that um but you still would say that you know even if depreciation is a little bit less we should still have a million dollars first i would yeah i would suggest that to people because to your point it really could change depending on the model and let's say you put a bunch of miles on it and you put a bunch of miles on it and you put a bunch of miles on it so it's it's more about the the principle of it and about the opportunity of that cost for that person for you because your net worth is so high again the opportunity cost for you for that six grand is a lot different from somebody who has maybe uh four hundred thousand in net worth do you see what i'm saying suddenly the opportunity cost for them is a lot steeper because they're still trying to build their wealth yeah i totally see what you're saying and peter i won't bear the lead i drive a sienna i was gonna say george when are you gonna tell him i didn't want to admit i didn't want to admit that i'm a minivan dad but it was for my wife we switched over from the suv world and i'll tell you this peter this was our first car in our whole life we bought brand new and it scared the crap out of me but i was like all right it's time and guess where that car is right now is it in the parking lot it's in the shop right now bud tell them the story it's been unlocked my wife had to crawl through the car and it's now with the shop they've never seen it before and now they got it for a week waiting on parts so i say all that to say the idea that well if i buy new it'll never have any issues it's just not true so if i was in your shoes with your net worth and i waited long after i was a net worth millionaire to even buy a new car because i just can't stomach depreciation it still hurts my soul if i if i could tell you hey man you can get 20 off if you just buy the model that's two years older which by the way they really don't change all that much from year to year and if it's a toyota you know it's going to be reliable and so get a good detail on it get a good pre-purchase inspection get a vehicle history report from a company like bumper you'll be good to go and so for that reason i would be looking for the deal because the problem is when you go searching for a new car you'll find one every time and they'll add on every bell and whistle and warranty they can throw at you and because you're so starry-eyed you just go for it and all of a sudden you paid for the eight hundred dollar paint protection crap they threw on it without even trying to negotiate and be intentional with it so if i'm in your shoes i'm still going to go with the 2023 model and again you've done your research as did i and let me tell you it was at some point jade you just give up on the research like all right i've researched enough i know exactly the trim levels and what's yes what's going on with each of them and this one has a fridge this one has the heads-up display it's just a car at the end of the day things will go wrong you're just hauling around kids they're going to throw cheetos in it so don't be too precious about it either that's the other thing buying used you don't feel as bad when it gets a nick when your kid that's right bumps the door opened and someone else's car the cheetos get all stuck to the carpet you go huh all right it was already used yeah i can tell you i've never had a 100 brand new vehicle it's always been used to some extent for that reason i just feel like i can't stomach knowing that i would be the one taking the depreciation loss on that first year and i can't stomach knowing that first scratch i it's like i just i just can't do it maybe one day i'll do it but but he's right i mean if you cherry pick the car you're going to find that some of them do hold their value and absolutely a situation like we find ourselves in with today's economy you might see some cars hold their value really well that's electric cars have now gone up in value if you're a tesla you might hold your value because the gas prices are so high people are willing to pay more it's all about supply and demand and even my tesla that i have now i bought used one owner 4 000 miles and i got over 20 off wow just for doing that just for driving for a little while and then buy it i'm happy to save 20 if i can absolutely and i mean at the end of the day you and i we just can't ignore the calls that we get every single day when people have bought a vehicle i mean it's so normal it's 2026 now if we tell peter go ahead and buy it the next guy listening is going to say well they told peter you can go buy well it's not just that it's that the calls that we get coming in they're saying oh i bought my car in 2024 and already they're upside down on it and it's like what happened i mean that is the majority of car calls that we get or when we start buying a car we're like oh my god i bought my car in 2024 and it's like oh my god i bought my car in 2024 and it's like oh my god i bought my car in 2024 and we start going through people's debt when they say hey help me get out of this it's always in the car and we're always having to explain to them how to get out of an upside down vehicle and in many cases they've had the vehicle for less than five years and so there is a depreciation hit on most vehicles and i can say that pretty confidently if you do that with debt it's even worse absolutely can't be underwater on a car you paid cash for that's the beauty of it so i think that's the beauty of it so i think that's the beauty of it so i think that's the beauty If you've ever thought, I don't even know where to start with life insurance, you're not alone. 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Well, if you're new to the Ramsey Show, you'll notice that every single answer that we give is formatted around our plan here and our principles. We have seven baby steps that we teach. We know that it's the shortest path to building wealth, and it's the easiest path to building peace around your money. And so if you want a little bit more information on that, you can, usually there's a little thing there that you can look at in the show notes, but you'll get a lot more of that out of every episode if you know what those are. All right, let's go to Frank, who's in St. Louis, Missouri. Hey, Frank, what's up? Hey, thanks for taking my call. I appreciate you guys. My wife actually called last year, and we are now debt-free. Awesome. I live in the mortgage, of course, so we really appreciate you guys. Way to go. How much did you pay off? Just curious. So we really didn't have that much. It was, I mean, I know everyone says that, but so we had $25,000, and we did that in about seven months. Wow, that's impressive. Way to go. Oh, yeah, it was right. We got married, and we just got motivated, and we're like, we're not doing this. We're just going to stay debt-free, so it's been great. Love it. Well, so my question is, we currently, we have, we think it's like a small-town bank, and there's no high-yield savings or anything like that, so there's no plans there, and I always hear of you guys advertising for fair ones, and here recently, I've been listening a lot more again, and the biggest thing that really drew my attention is you can have like multiple high-yield accounts, and so I'm just wondering, like we have a $10,000 emergency fund and a couple like smaller funds just for like little things that come up. Would it be worth switching to fair ones, do you guys think, versus trying to, like there are a few banks that have. Listen, we're going to tell you to go to fair ones all day, because we know that it's a good product. I mean, George, I know you've, you do the bundle where you've got all the different ones, because for you, if you have a lot of different sinking funds, it's excellent, because now you can have it separated versus some of the other ones where maybe they kind of bucketed on your view, but the actual account is not bucketed, and I actually like the difference that all the, all the different accounts are there. You can save in the different accounts for whatever it is that you're saving for, and it's really clean and easy, and there's a good, you know, nice little rate of return there on the, on the interest. Yeah, you could even just add it to the mix right now, because I know it can be a hassle to go, okay, what are all the things tied to my bank account that are coming out? So, you can just go set up an account, it's got checking and savings, you can throw your emergency fund into the high yield portion, and then throw as much as you want into checking, and use that with the Ramsey themed debit card, and then if you love it, over time, you can just make the switch. But there's nothing wrong with having a, you know, a local bank. What's cool about Fairwinds, and they let us know about this, they have 5,500 plus partner credit union branches, so there's probably one around you where you can basically bank using your Fairwinds account locally. And so, you can jump onto their website and find all the locations around you, but I would definitely add it to the mix, let your money at least grow to keep up with inflation, if not beat it, and again, the customer service is great, the product's great, I've been using it for a long time now, and having access to checking and high yield together in the online world is unheard of. Yeah, that's nice. So, it's cool that they've combined those with the option slash Ramsey is the place to go, Frank, for you or anyone else listening. Awesome. Thanks for the call. Next up, we have Brenda, who's in New York City, New York. Hey, Brenda, how can we help today? I'm good. Thank you so much. Thank you so much, Jade and George, for taking my call. For sure. I have two adults, well, young adult children, 19 and 21 years old, and I am fortunate enough to be on baby step six, just chipping away at my mortgage. So I have some extra funds in my account at the end of each month. They each have a Roth IRA, which is invested into SBF 500, and I contribute about $250 a month per kid into those accounts. Now, the question is, is that a wise thing to be doing? Because they won't be able to access that money until they're into their 60s. And also, they do also have brokerage accounts, and they both have a high yield. savings account. Do you think I should switch it over? Should I switch it over to the high yield savings? Because, you know, what if they need money for a house? What if they need something comes up, they can't really pull from that IRA, and they kind of have time on their side. So I just, I don't know if it's silly for me to be putting money into a Roth IRA, because it's 40 years from now. I don't think it's silly at all. Remind me of their ages again. 19 and 21. Well, number one, do they have earned income? Well, they're both in college. Okay. So they have like part-time jobs. You can invest in a Roth IRA up to your earned income. Yeah, like, right. So like, they had like, you know, dog walking and babysitting. So I was able to, they were able to open up those Roth IRAs. But they're both in college now. And you know, the 529 is secure. So that's all paid for. They won't have any student loans. So I'm just trying to set them up. You know, God forbid something happens to me. I mean, I like what you're thinking, because here's the truth. There are things coming up that are going to need money that's liquid. For instance, weddings. Do you want to help with the down payment for their first home? So there are a lot of things that are going to pop up before 59 and a half that you're going to want to fund. And the truth is, they have their entire working life to get prepared for retirement, but they don't have their entire working life to prepare for, you know, needing a car when they graduate. And all of these things that are kind of big expenses, but things that you could really help contribute to and help set them up in their life. And it's not wrong. Like there's nothing negative about putting towards their retirement. But I honestly think the bigger help for them would be those other things, because they're big ticket items. And if you can help contribute to those, gosh, that's really going to set them up into their young adulthood and into their later years. Okay. Yeah, that's what I was thinking. Because like when I'm like, you know, what good is this money to them at 60 when they thought they might need it for a house? So they might need it for, you know, the life events or whatever it is. Well, I'll tell you what I do. Obviously, I got younger kids, three and one, but I focus right now on priority is education, is making sure that I'm funding a 529 plan. It sounds like they're going to graduate college debt free already. Yeah, I mean, as soon as they had a social security number, I opened up a 529 for them. So amazing. That's awesome. What a great mom. Yeah, I was able to like blink and, you know, all of a sudden they're in college. And luckily, you know, it was there. It was it was unbelievable. So they're blessed to have you. Anybody. So that's the second thing I do. Outside of education, the next thing I would do is fund a taxable brokerage account in your name. And the reason I like that is because you retain control. You know, there's these things called UTMAs and UGMAs, and it's a custodial investment account, but they get access to it when they're at, you know, mature adult age, 18 or 21, depending on the state. And so therefore, you might hand over $100,000 to an 18 year old. That's not that's legally theirs. And so investing in my name and my own account lets me earmark it for them. But then I can retain control. And at 25, let's say they get married, I can use a portion of those funds to cover the wedding. Or at 18, I can use a portion to cover the car or whatever. It may be a down payment when they, you know, after they get married, I can help with that. And so doing it in your name is a good way to just retain that control. And if you just do a taxable brokerage account in your name, that's non-retirement. It sounds like you've already got that open. Yeah, well, they do. They both have accounts with Charles Schwab. And they're funding their name. Well, you know, it's Christmas money. It's birthday money. It's grandma money that I throw in there. Okay. Are they doing any investing on their own? Because so far, it sounds like you've been doing all the investing. Well, they're in college. They're full-time college students. So their job now is to get educated. That's right. Get through college debt-free. I love that. Yeah. And once they graduate, they'll start funding it. But the key is to start building the muscle for them as well and teaching them, here's why I'm doing what I'm doing. Here's what this money could turn into and help them think through this so it doesn't feel like a big surprise when they find out, whoa, mom's got 100 grand. I mean- What could I do with that? I know. Absolutely. But I mean, it brings me back to the teaching we did a couple weeks back, George, about the power of time and compounding interest. And they're set up perfectly. I mean, from the moment- they start to work, they're that prime example of if you can invest $500 a month for the next 30, 40 years, I mean, you've got it locked in. So I think Brenda set them up really well to understand the power of investing and if they continue to use that muscle and she's helping them with those kind of milestone moments, gosh, they're going to be loaded. Yeah. I remember I covered a chart here on the show of the power of a dollar based on age invested. And at the age of 20, a single dollar invested will become $73 at retirement. But when you wait until your 40s, 50s, then that power of that dollar becomes $3, $4. And so you can really see visually the impact of investing early, even though it feels like it's so far away, it'll never be here. You'll be real glad when it shows up. I know that's right. And you 73 extra money. Pretty impressive. 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're working toward, especially in a season that's going to be a little bit more expensive. That's Fairwinds.org slash Ramsey. 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. Insured by the NCUA. Our plan. And so a lot of other budgets out there, they don't have a point of view. They're just, you're kind of on your own. Plug your numbers in, do your thing and good luck to you. But over here, we're like, no, we want to walk with you. We want to make sure that your money is going to the right places. We want to help you accomplish your goals. And the truth is every dollar truthfully is the fastest way to accomplish your money goals. It's going to keep you intense. It's going to keep you locked in. Download it, start it for free today. Let's go to Kirby who's in Mississippi. Hey, Kirby, how you doing? Hey, thank you for taking my call. You're welcome. How can we help? Um, just want to make sure I'm doing everything right on my financial side. Um, so I'm 18 years old. I'm working on a farm. So, um, yeah, I just started a Roth IRA about three days ago and, uh, currently, well, actually I've never had any debt and, uh, yeah, I just want to, um, make sure I'm doing everything right. So cool. So you got no debt. Do you have any savings? I have about $13,000 and $9,000. Way to go. That's great. $13,000 in a money market. And I've got seven, I just put $7,500 in, in the Roth IRA. You fully funded it. I've gotten, yep. My God, this is impressive. You're real sharp at 18, man. I wish I knew this stuff at your age and had the means to actually do it. You're a hard worker. Yep. So what's your question? Um, so I'm a pilot, uh, yeah, so I fly and, uh, I would really like to go and get a paramotor, like a, with a net, I mean, with a, uh, you know, a wing across you with a fan on your back. Is this a plane? Start doing that. Wait, say it again. You want to do what now? Paramotor. Oh, wow. I'm looking at pictures right now, Jade. This thing looks intense. Oh gosh. Maybe the people, maybe the booth can put a picture on the screen, because you don't know what this is until you see it. Kirby, Kirby, I apologize for my, you know, idiotic, ignorant approach. It looks like you're hang gliding with wheels, like a go-kart that hang glides. What did you call it? A paramotor? Paramotor. Yes. Paramotor glider. I'm, listen, is this safe? Because it looks very, it looks very precarious. You're an adventurous man, Kirby. Oh man. So how much does a paramotor cost? So I'm looking at one right now. Um, one of my buddies has it. It's about, I'm guessing it's about $7,000 to get into it, but just want to make sure I can afford it before I take off and do something like that. And is it strictly for fun or are you trying to like create a business where other people can ride it? It's just strictly for, you know, it's just strictly for fun. Okay. So the problem is I, I fly already. I have my own airplane, but, um, yeah, I don't know. I, you know, I do that. Kirby, you're an anomaly. You're 18 years old. You're a farmer. You're a pilot. You have your own airplane. You have money in the bank. You have money in a Roth IRA. Do you understand, like, what a cool guy. So what is the current value of all the things with wheels and motors in your life? So I have a truck. I paid 22.5 for it. Um, insurance, I think I run about $500 a year, maybe on it. And, um, Wow, that's cheap. So, and then also I've got a third partnership in an airplane that's about $11,000. Okay. How much do you make a year? Um, about $45,000. Okay. Man. Well, you're doing great. Can you actually afford it? Yes. Is it a lot of your world tied up in some toys right now, including the truck and part of the plane making 45? It is. Yeah. Now clearly you'll, you're frugal, you'll survive it, but that truck alone is half your income. Yeah. Yeah, that's right. So what does it look like to get your income up just so that things going down in value aren't such a big part of your yearly income? So I don't know that it's, I mean, I would imagine my income would go up within the next year or two, but, um, yeah, so I'm, you know, in the future I might be buying a house and, you know, maybe go off into the mission field too. So I'm not sure that it is a smart idea. I just want to, And that's kind of what I was thinking, you know, uh, the $45,000 income is definitely an extremely valid point. But the other thought I had is the opportunity costs on the 7,000. I'm looking at an 18 year old. I don't think you're living on your own, are you? I am living. I mean, no, no, no, I'm living with my parents. Okay. So my next thought for you is gosh, the next big step is you getting out there on your own. Uh, I would suggest renting someplace first, not necessarily immediately going into buying, but even that has expenses first last month's rent. Obviously you want to make sure you've got a nice liquid six months emergency fund. So those are the things that I'd be looking at with that money. Um, I don't think this is very far off. I don't think it's going to be that easy. I don't think this is very far off into your future. I think you're going to be there before you know it, but I do tend to agree with George. It's a lot of toys. And if you're talking about going off on the mission field, gosh, they're just going to be sitting there in the hangar with nobody to use them unless you sell them off before you go. Yeah. Yeah. That's kind of my thought. Can you rent one of these? I could probably use my buddies, but I don't know. It'd probably be better for me to buy one if I did do it, but yeah. Hmm. Okay. I'm just thinking it through if there's any other option for you still enjoy this thing without needing to own it. Yeah. All right. But based on your goals, I'm like, man, $7,000 with your income. How long would that take to save up currently? If you started from scratch, how long to save up seven grand? Oh, I don't know. I mean, I bring in probably 4,500 a month. And if I did real good at it, I could probably spend $200 a month on my necessities. Goodness gracious. Well, you're saying insurance and everything. 200 bucks a month is your living expenses. Yeah. I don't know. Just go 300 for safe. That is wild. So you could put away 2,200 bucks a month is what you're telling me. I mean, he's at home. Probably so. Mom's cooking. So you're like, all right, I'm not paying for that. That's nice. That's right. Yeah. I mean, it would take you four months or so to save up that seven grand. So that's kind of what the opportunity cost is here based on your future goals, the home that you want to buy, going on the mission field. I would just take all of that into consideration before buying one. And if you were going to do it anytime soon, I would look for a used one that you can get a good deal on and negotiate versus buying a fancy brand new one. Yeah, I agree with that wholeheartedly. All right. Interesting question. It's so interesting. So many twists and turns. Let's go to Abdul, who's in Buffalo, New York. Hey, Abdul. Oh, hey. How are you guys doing? I'm a huge fan of the show. I just wanted some advice. So I wanted to know whether I should buy a home in cash or continue to invest in my index funds. So I've been at like a crossroads. Wow. How much is in there? So right now I have $500,000 in a brokerage in index funds, and I have like about $70,000 in like my 401k plus Roth total. Okay. What was the brokerage? What was that brokerage for? What was that 500K earmarked for? Just in my personal investment brokerage, like just to, I wanted to think about maybe FIRE. Okay. Financial Independence Retire Early. So that's, I always ask, what were you investing for? Because that tells me a lot. Because now if you use it on a house, you're going to feel bad because that was your early retirement money. How old are you? Right. I'm 28. Oh, wow. You're young. Okay. So you really did go into this FIRE deal. What's causing you all of a sudden to think about buying a house with this money that, to George's point and your own point, was earmarked for retirement? Yeah, that's a good question. I think for me, it's like a somewhat of a scarcity mindset. You know, you hear a lot on the news about like less houses on the market. And like, I always think if like, if I get a good deal, that'd be really good in terms of like securing, you know, a safe haven. So the way I look, I'll get it. Are you single? Go ahead. Sorry. That's okay. One at a time. Okay. Debt? No, I don't have any debt. Awesome. And you're single? Yes, I'm single. Okay. And what would this house cost in your area? A one that you'd actually want to stay in for a long time? Yeah, I was looking at it on Zillow. I saw some houses like for 300. That's like for kind of like the minimum to 350, 400. Okay. So you'd have to cash out probably 400 from this brokerage to make that happen? Mm-hmm. Yeah. And you still have 100 left and then you just rebuild from there into the brokerage account and kind of restart the fire journey? I mean, I don't live like extremely frugally. I live within my needs, I would say. Yeah. But I also feel melted. And don't get it twisted. A home is a form of an investment. This is probably not going to be your forever home. So this is going to be something that you're building equity in until maybe you stair step into that next property. Maybe by then you're married. And so this is a forced savings account, if you will. Yeah. And it's going to help you make further strides in the real estate market. Yeah. With no rent or mortgage payment, think about how much more you could invest. Absolutely. So I love this idea of paying cash for a home if that's your goal. I think a guy as sharp as you, trust me, you're going to retire earlier than most of America. I love the idea of a 28-year-old having no mortgage payment for the rest of his life. Absolutely. That's right, with Boost Mobile, you get unlimited wireless for $25 a month to help you save money for other more important things. And that $25 price is locked in forever. No hidden fees, no surprise charges like customer proprietary network information notification costs. Nope, not happening with Boost Mobile. Plus, with Boost Mobile, you get to keep your phone and your number with no long-term contracts. Guys, switching to Boost Mobile is the smart move because it's one of the best ways to get more out of your budget. So go to BoostMobile.com slash Ramsey and make the switch today. That's BoostMobile.com slash Ramsey or click the link in the description. $25 forever requires customers to remain active on Boost Mobile Unlimited plan. Welcome back to the Ramsey Show here in the Fair Ones Credit Union studio. We're headed back to the phone lines where we have Ashley who's in Charlotte, North Carolina. Hi, Ashley. How you doing? Blessing. Way better than I deserve. How are you? I love to hear it. Thanks for calling in. How can we help today? I'm calling you today because I have the most amazing parents. They gifted me FPU a while ago when I was in my first marriage in debt. FPU helped me navigate divorce. I've been debt-free, well since then, remarried. Stayed debt-free, we took care of the house and building wealth. And it's because of their support. They've given me financial guidance and they've introduced me to FPU and this wonderful group, the Ramsey Team. That's cool. My dad called me and said, Hey, have you looked into Trump accounts? I was like, no, that's not something we have for the kids. We have the 529. I looked at a little one when they came out and I talked a little bit about it on the show. And it's just not a financial vehicle that we're contributing the 529s. And he said, well, if you open one, you get all these. It's freebies and our kids don't qualify for them because of when they were born and our income. So I'm kind of missing the boat on what the freebie part was. And then when were your kids born? 2017, 2019. Okay. Yeah. So they don't qualify for the seed money from the government, but there's still, there's, there's still saying, Hey, it's still a worthy account to invest into. Yeah. Like just such a great deal. Um, and he says, well, if you open one, then, you know, we will contribute. We'll contribute 5k a year for the next several years. And I'm like, okay. So research it in my head. I'm like, okay. Was that a hard, we'll only contribute 5k to the kids. If it's in this account, um, we have well-established 529 accounts. So I'm kind of doing the math of like, Hey, compound interest. Does it make sense? And, and looking at the, the Trump account, I'm kind of struggling with the, I mean, it's kind of like a mashup of, you know, stuff that's already out. There between 529, what you can do there and other accounts. So I'm missing like the benefit of the specific account. For you, is it an either or is it, I only have so much money and I can either do it in a 529 or a Trump, or are you open to doing both? I'm just curious. Yeah, I think for me, um, if it, so that's where the struggle is, like, if it's me personally, I don't think I, you know, we wouldn't go out and necessarily open it, but if it's the, Hey, if grandparents want to get it. And the only way they're going to gift is into this account. I would not decline it. If I had, if I had. It sounds like you're just a little, you're miffed because you're like, well, this could go to their education, which is happening a lot sooner than their retirement. So you just have a preference, but so do they. Well, and I, and my question on 529 though is, I understand this is where I, you know, fact check with you guys is that you can, I thought you could roll over some of that into retirement. Up to 35,000, you can roll over into a Roth IRA. Um, so there is that possibility and, you know, obviously you do have the flexibility of moving it from child to child. It can be used for different levels of education. So there's a lot of flexibility with the 529. And again, to George's point, you have the ability to use some, use these dollars for an event that's happening earlier in life than retirement. Whereas obviously with the Trump account, you know, it's earmarked for that person. It's in the child. It's in the child's name. And again, it's a retirement fund. So the way I tend to look at it and George might have something different to say about it, but if you have somebody who's gifting you and you're saying, Hey, I would prefer it to be in a 529. And they're kind of like, you can handle the 529. We would like to do this. There's no negative to it. There's, there's, there's not a downside to having money saved for their retirement. I think it's all positive, honestly, in my book. Um, but if you have a preference, there's nothing wrong with letting your family. Member know, Hey, if you're open to our preference, preference, we'd really like for the money to go towards their education since that's happening first. Yeah. And with the converting the, you mentioned the dollars from the 529 into a Roth and I like at 18, they could convert the Trump account into a Roth as well. Correct. Like that would both be like work and tax the same in both those scenarios. Well, the Trump account has worse tax treatment. There's more tax advantages with the 529 plan. When used for education, but personally, Ashley, I'm funding Trump accounts for my kids. I got a three-year-old and one-year-old cause I did math and I went, okay, if I just contribute this, convert it, they can convert it. You know, I'll, I'll be happy to pay the taxes on it when they're in their early twenties, after they graduate college, they're filing taxes on their own. That way you can avoid the kiddie tax. If they try to convert at 18, uh, it might convert it. You're the parents tax rate. And so I like the idea of waiting, converting at 22 and that money growing. Let's say there's a hundred thousand dollars in there by the time they're in their early twenties. Imagine that compounding from 22 to 62. For sure. They're going to have like $15 million in that one account. So that's a pretty cool way to build wealth for pretty small upfront investment. So if your parents are saying, Hey, we'd rather give their, I'm not going to block the blessing. I'm going to take that every time. And you sounds like you got college covered. That's the goal. Yeah, that's the goal. And it will be the goal, however much is in there. That's the college. That is the college budget working part-time scholarships, school choice, all of that matters. But I would take it. I know. I don't know the motive from your parents, if it's a political thing for them or not, but it's free $5,000 with compound growth every year. That's pretty sweet. Generational wealth. Yeah. It seems like there's a little, um, we need to demystify these Trump accounts a little bit, because I think this might've been the second or third call I've gotten to this tune with you, George, where it's kind of like, Hey, do I do the five 29? Or the Trump account. And I, you know, the way that we suggest investing is, you know, you kind of put on your mask first, if you're the adult. So of course in baby step four, you're investing 15% into your. employee sponsored accounts, or if you're, you know, self-employed, some sort of simple 401k, that sort of thing, right? So you're putting your mask on first. And then after that, obviously, we want you to start investing, doing four, five, and six at the same time. So you can invest in your child's college fund. Again, 529 is what we would suggest. The next thing after that is we're going to try to pay off the mortgage. And then beyond that, if you still have money that you can put in different investments, I love an HSA. You know, if you have that as part of a high deductible insurance plan, that's a great place to invest money. You can use it for healthcare, or there's that investing portion there. But I think probably right next to it, and possibly even, you know, before it, if you don't need the extra money, is I love a Trump account. I think that's a great place to park 5,000 bucks a year. And the huge advantage of this compared to any other investment account is that your child does not need earned income. So with a custodial Roth IRA, they can only fund it if they have legitimate earned income, whereas my one-year-old can start building wealth. Immediately. And so we know compound growth is the secret to building wealth. So I got the calculator up right here, Jade. If you invest 417 a month, that'll fund a $5,000 account. You do that for 11 years at a 10% rate of return. It's about $99,600. So let's call that 100 grand. So now the kids, let's say they went from 12 to 22, you know, or 11 to 22. Now from 22 to 62, we're going to give that 40 years to grow, no more money invested. Just leave the 100 grand sitting for 40 years, same 10% rate of return. So I'm going, okay, for how much you put in there? Think about that. It's an easy, yes. Five grand for 10, 11 years. It's a no brainer. That's pretty wild to turn 50 grand into $5 million. And if someone wants to do that for you, don't block them. Because here's the thing, 529, it has a limit on it, right? It's like, yeah, what do I want? $60,000 for college, whatever that number is. But this has the potential to grow. You don't have to move it. You can set it and forget it. It doesn't have to convert to a Roth IRA because, somebody didn't go to school or go to college. This is kind of a no brainer if you have the option. So if you have an aging parent, who's been diagnosed, diagnosed with a chronic illness, you know how overwhelming navigating the medical system can be. Coordinating with doctors and insurance and trying to understand systems that were built to confuse you all while still running a household, working a job and raising your own kids. It all feels impossible. Helping people in this situation is why solace exists. Solace pairs you with a health advocate who steps in and takes on the logistics, the appointments, the insurance questions, the medical billing questions, the frustration of what does any of this even mean? So you can focus on being present for your family. And solace is covered by Medicare and insurance nationwide, making it accessible for people everywhere. Look, your only role in this season should be just being a son or a daughter, not a healthcare expert. If you've been carrying the weight of a chronically ill parent and you need help navigating the medical system, check out solace. See if you qualify by going to solace health.com slash Ramsey. That's solace health.com slash Ramsey, or click the link in the description. All righty, let's head back to the phone lines where we have Adam, who's in New York city, New York. Hey, Adam, how you doing? Hey, what's going on guys? I'm doing all right. Thank you for taking the call. No problem. I'm 25. I make 65 a year and my partner's 22, finishing college. We're expecting our first baby in May next year. Wow. And planning to get married before the baby arrives. I recently became credit card debt free and my father has offered to help pay off a loan for a little bit of my student loans, which is, uh, around 50,000. Okay. Um, and he also offered us to live with him, um, until we are financially strong enough to move out, um, which is pretty generous. Um, we could save, we could save between 3000 to 3,500 a month if we do that. Okay. We would be sacrificing some privacy and some comfort between, my partner and I and our upcoming family. So I guess my dilemma here is like, um, my part, as I said, my partner and I are, um, we'll be sacrificing privacy and comfort, especially with a baby on the way. How long would you do it? Um, so my partner was deciding to stay with the baby after giving birth for approximately a year, um, until she, uh, she decides to go back to work. So I was thinking around an additional year. So one year with dad, a year and a half, I would say. So from now until the baby's been on this earth for a year. Yes. Okay. And how much would you save? Let's do the math on that. Maybe you've already done the math on that. So my take home is around 3,600. I'm also, uh, about possibly getting a second job that might not give me the same amount, but it's something additional on the side. But, um, I would say like to focus on the primary income, which is I make 3,600 a month. But you said you'd save 3,500 a month by living with him? Yes. How does that work? Um, not 35 technically. That's why I said between 3,000 to 35, because my bills accumulated is not a lot actually before moving out. I don't have a lot of bills to pay. It's mostly just car insurance and subscriptions here and there. And your student loan payments. And my student loan payment, which is, uh, my father has offered to take care of it until we move out and we are financially stable. Then why would you ever move out? Until you move out. So if he's taking care of your life and covering your debts, what gives you any incentive to get out of there? He'd just be paying the monthly payment or he would help you. Cause obviously if you're just paying the monthly payment, it's going to go on forever. Or is he saying, Hey, I'll try to pay these things off for you. Um, yeah, just, uh, just a monthly payment on the student loans. Okay. So here's what I'd be wondering about. I have a couple of negotiations because I'm looking at this going, what would be the most benefit to you? It sounds like he's very willing to be generous in unique ways. And so I'd be sitting down with my partner and I'd be saying, okay, what is it that would really, really benefit us the most right now? And I'd wonder, I'd say, okay, there's 50,000 in student loans. I don't know what the deal was on, that if he'd be willing to cover those, I'd be like, you know what, moving in, we don't want to encroach on your space, but we do like the idea of trying to get ahead in certain ways. You mentioned paying the bill. Would you be willing to cover that? Take the whole student loans? That would be my question. That way you're staying in your own space, but getting out of this debt does still give you a significant push. And it allows you to start saving for a down payment on a house or whatever that next thing is with the full power of your income. Yeah. From a financial standpoint, I do agree with you that it would give us a push start to stay with parents and save as much as possible. As I said, it comes with the cost. No, no, no. I was saying not do that. I was saying instead of moving in, say, hey, this is an encroachment on our privacy, your privacy. I'm not sure this is a wonderful idea, but it sounds like you wanted to be generous. What would you think about just taking on those student loans for us? So he pays off your student loans and you move out. That would be the deal. Which is, it sounds great. And my guess, my, my question is that isn't it to, to what would be from a financial standpoint better is to, even though he's doing that and he's offering us to stay with him, is it better to just suck it up for a year, save as much as possible to speed up our saving process or sacrifice some saving time and move out? Saving for what? I don't think so. A down payment, but here's why. Because even though he's paying, let's, let's go with the first thought you move in. He just covers the student loan bill, the monthly payment, and you guys start socking away, you know, 3000 a month. The thing is that debt is still going to be sitting there after a year and a half. That 50,000 debt is probably going to look suspiciously the same. It's going to look a lot like $50,000 still. So my thing is while you have debt, we can't save for a down payment on a house. The next logical step to being a financially responsible adult is I've got to pay off this debt first. So the $63,000 you hypothetically would have saved in the year and a half is going to go right to the student loans and you're going to be back at square one saving for a down payment for a house. Do you see what I'm saying? Yes. Which is not a bad thing. Like that's, that's fine. But if I'm looking at it, I'm going, okay, how can I get this debt paid off? That's what I'd be wondering is, can dad reach over and pay off this debt? And then we can stay where we're at and we can immediately start saving for the down payment. I see. Are you in New York, - Are you working in New York City? I'm a New Jersey resident. Okay. I'm just trying to think through this. Let's say that your then-wife decides, you know what? It's been a year. I don't want to go back to work. I want to be home with this baby. How are you going to survive making $65,000 on your own working in New York City? Most likely just living within our means. We probably won't be able to get a nice apartment. It will have to be an average or below-average apartment for now. I'm just trying to paint a realistic picture, and I'm with Jade. Rarely on the show have I found someone who said, hey, we're going to live at home with my parents and save money. We've had one where they called in. They were $15,000 further into debt because comfort usually doesn't then require extra sacrifice. When someone else is covering all your bills, you're like, oh, we can go out to eat tonight. You just start living. We're fine. We can save a little bit less this month. I don't know. I can't tell from this call just how disciplined of a person you are, but I know human nature. And human nature says if everyone's covering my bills and my debt payments, I'm going to get fairly comfortable. And that's why I like Jade's plan of he pays off the debt as an act of generosity, and you go start your life independently, and his generosity then doesn't stunt your growth. It actually propels you. Yeah, I like that idea. And I also wonder about why we would stay in the city. If there's a way to get outside and get someplace a little less expensive, that might be a route to still near family but not in the thick of it. Yeah, that is tough. I mean, he's in New Jersey commuting into New York City. But even then, New Jersey, depending on where you're at, can be very expensive. Well, my thought is, you know, for a $65,000 job, you can work that job in a lot of places that aren't quite as expensive. So there's a lot to sort through there. There's definitely a lot. But it's also tough with the baby on the way. We're not married yet. We're trying to figure this out. Like, they kind of need some help right now. Yeah, and it brings up that topic because we've heard this a lot, whether it's because a new baby's on the way, whether it's because of student loans, whether it's just the affordability crisis in general. A lot of young folks, people 20-somethings, they are considering living at home for longer periods of time. I mean, we're already seeing that. And I particularly don't have a problem with it if there are very, very clear boundaries around it. I'm more for it if it's a single person. Like, if you're, you know, it's just you and you're like, hey, I'd love to be able to pay off these student loans. I'm 22 years old. If I live with my mom and dad for a year, I can have the student loans paid off. I don't have a problem with that. But it does change shape when you're married, because obviously there's things about being married that's like, I mean, to his point, like, let me have my privacy. And. Especially when you have a kid. Now there's a child, right? So they're kind of adding many layers to that. And I think it could get very dicey and very messy very quick, but. I just don't want them calling back going, hey, we've lived with my parents for three years. Everyone's miserable. My wife's resentful of me. Yeah. It's a really tough way to live. And we can't afford it because life got more expensive over the last three years, not less. And that's the problem. There's got to be a very clear time parameter. There's got to be a very clear dollar amount of this is the amount that we're saving. We're doing it in this frame of time. And when that happens, we are hitting the road. And if you can add some form of accountability in there. If I'm dad, I'm going, I want to see that $3,000 transfer to savings every month. Yes, every time. And I'm kicking you out regardless at the year and a half point. I like that plan. If your business is making seven figures or more, you should be proud of that. But that growth probably brought a mess with it. 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All righty, our Ramsey Show question of the day is brought to you by AskRamsey, your free AI money tool that provides personalized money answers based on Ramsey principles. Go ahead and visit ramsesolutions.com slash askramsey. Today's question comes from Stella in Maryland. My husband and I are in the process of combining our finances. He has a lot of credit card debt, but we agreed to do the debt snowball and can pay it off in less than two years. What stresses me out is that multiple calls will have interest accruing as we knock them out one by one. I have offers for balance transfers at 0% APR for up to 15 months. On top of paying zero interest, the debt would be where I will see it regularly. We'll pay it off faster if I have to look at it in my account. I know that consolidating debt is a no-no when you're following the Ramsey method, but would this be a situation where it might make sense? Well, let's talk about these balance transfers. Number one, why would a credit card company bestow such a generous offering to you? I wonder why. Try to win you over. Try to win you back. Well, number one, they make money when you do it. It costs you money to do a balance transfer, 3% to 5% of the balance. And then 0% APR up to 15 months. What do they know about consumers who have credit card debt? They have a hard time paying it off. So what happens when you don't pay it off? All that interest gets hit. So I don't like this for a couple reasons. Number one, you are consolidating it. So it's actually harder to pay off versus knocking them out one by one with a debt snowball if you're moving multiple debts into one. Number two, it's shorter than your timeline. 0% in 15 months, you said it's going to take you two years or so, which means you're going to run out of runway pretty fast and it's going to stress you out. And the third thing is, not that I want anyone to pay more interest than they have to, but that interest is actually the fuel that's keeping you going on this journey for those two years. That's making you angry at this debt. That's a good point. And it's probably, it's going to be kind of negligible by the time it's all said and done. I think if I had to weigh the interest that would accumulate next to the momentum and the intensity that you get from being able to check one off the list at a time, I think I'd rather go for, I'll take the interest versus having one big clump of payment. That is not motivating. Take it from someone who's paid off $460,000. That's not motivating. And you can still look at the account. You don't, you need to do this to be able to look at it and feel it. You can see all of these debts, list them out in every dollar. Small to large balance, attack the small one with a vengeance, minimum payments on the rest. And both of you looking at this together, seeing the interest rates and ignoring them and just attacking the balance is what's going to actually cause you to get out of debt, not a balance transfer. Yeah. And I'll also call out, you know, I'm actually not mad though, George, at that mindset because this is somebody who's looking at their debt. They're probably looking at every single place where they think they can save money. And this, it looks like, oh, this is a place I can save money. Why wouldn't I do that? And so it's, it's Stella. Nobody's mad at you. We're not saying, how could you? We're just saying, honestly, it's easier to do it. Uh, debt snowball style. And to George's point, those fees can get you. Let's go to Justin. Who's in Nashville, Tennessee. Hey, Justin, how can we help today? Hey there. Hey there guys. Thanks for taking my call. Yeah, no problem. What's up? Hey there. I kind of have a two part question here. It's a, should I go with a financial firm? To manage all of my money and, or should I max out my 401k? If I plan on retiring early rather than just a regular brokerage account. Okay. It sounds like you're dealing. I don't know. It sounds like you're dealing with either a high income or some nice net worth going on. Um, how much do you earn every year? I earn about 89,000 right now. Okay. And how much do you have invested? Uh, right now I have, I just opened up my, my Roth IRA. So I have about 3000 in there and then I have about 8,000 in a regular brokerage account. And then I actually have about a 50,000 in precious metals that I currently own. Okay. And is it's, it's your goal to retire before 59 and a half and you're thinking, Hey, I want to have money in a brokerage that's there for me when I'm ready. Yes. And how old are you now? I'm 23. I just graduated college. Oh, cool. Congrats. So currently still, thank you. And I'm still in, in college as well, doing my master's with an MBA online. Fantastic. And making 90 grand at 23. That's a fantastic income. So what's got you wanting to work with an investment firm? Uh, I've been listening to you guys here, uh, quite a bit. And right now I'm just pretty busy with work along with school, doing it full time and just trying to figure out what the best place is to put my money for them to be able to do the right research for, the correct mutual funds that I should be investing in at such an early age. I mean, the truth is the first place, especially for where you're at, the first place that you're going to want to go is your employee sponsored account. If you have a 401k through your job with a match, or even if it doesn't have a match, that's the first place where you're going to want to invest. And truthfully, at that beginning phase, you don't necessarily need a company to help you do that other than HR at the company where you work to help you get it set up. Right. They can't even manage it for you. Exactly. They can help you pick some funds inside of there, but they're not actually going to manage that portfolio. They could manage your Roth IRA in a brokerage account, but at your stage, it doesn't sound like you're needing a financial advisor necessarily. You might need one just temporarily to help you choose some funds, but they don't need to manage your portfolio. Okay. I've been doing kind of my own research for mutual funds and been able to try to figure out what I want to allocate all of my Roth IRA into. And I know here, the match doesn't start until I start working for an entire year. But right now, it just automatically started to where it's just 3% pulling it out. I didn't know whether if I should just do that. And I know I should at least get the match for them. And then after that, I didn't know if it was better off to just go to a brokerage account or that 401k. Do you have a Roth 401k option there, or is it just traditional? I'm not entirely sure if it is. I haven't talked to the individual yet. She's actually coming in on Monday so I can discuss. Okay. You broke up on us. But the key here is just remember these three things. Match beats Roth beats traditional. So you just told us you don't access the match until you've hit a year. So next up, let's go to any Roth options we have. If you've got a Roth 401k, you can just do all of your investing there. And if you haven't hit 15%- I just need to try to get set up there with her. Well, the Roth IRA, you could set up on your own. You would not do that through your employer. But if your 401k has a Roth option, that you would do through your employer. You can just begin all future investing into that Roth portion. But at your stage, do you have any debt right now? Right now, all I have is $5,000 from a student loan that I already have $3,000 saved up for at the end of the year. I'm going to pay it off. Okay. And then I just rest through weekly payments. And then I also have about an $11,000 grant, but it's not occurring any interest until 2028. So next year- When you say grant, you mean debt, right? Yeah. It was weird. If I worked in the state, then it would get kind of canceled out. But it's at a 0% interest until 2028. So all of next year, I'm going to- Have it to where I have it completely paid off before any interest does occur. Okay. Well, I would slow my roll on investing until I got this debt paid off. Even though you're sort of kicking the can down the road with the 0% interest, we would recommend not investing a dime until you're debt-free. And at 23, making $90,000, man, you could attack this debt in no time and be done with it. You have $3,000 to your name right now? What was that? You said you have a couple grand in savings. Is that all the savings you have in cash? In cash funds, I have probably about another $3,000 just floating in my checkings accounts right now. Can I throw a crazy idea at you? And I don't think you're going to do this, but what if you sold off some of these precious metals and became debt-free today? See, I've thought about that, but it's also a part of it is I earned some money through high school to where that money is kind of in the back of my head to where it's kind of like I don't own it now. It's kind of just sitting there. The precious metals? Yeah. So who owns it? You own it. The only thing is you're treating it that way so that it continues to kind of be an asset that you don't touch, but you need to touch that so you can get debt-free. Listen, if 50 grand is going to get you through an apocalypse, then I think 40 grand will too. You might as well just be debt-free today. I would sell off some of those precious metals, be debt-free, and then power on through investing 15% instead of a measly three. Five X you're investing, man. You're going to live your holidays differently. You're going to stay calmer. You're going to feel more peace. And then it's the same old pattern, the same family tension, and you're cranky and you're tired and you find yourself snapping at people that you love. Listen, you still have time to get ahead of everything and understand what's behind your reactions. Therapy can help you build a healthier plan before you actually need it. When you're ready to have that conversation, I recommend BetterHelp. BetterHelp is an online therapy platform with more than 30,000 licensed therapists across its network. If your first therapist isn't the right fit, you can switch at any time for no extra cost. And get this, if you've thought about trying therapy with BetterHelp, insurance options may now be available nationwide through participating providers. And eligible members have an average copay of just 23 bucks a session. Listen, you know what's coming this holiday season. This year, you have time to make a plan before the holiday chaos by preparing differently. Go to BetterHelp.com/Ramsay to check out your payment options. That's BetterHelp, H-E-L-P.com/Ramsay or click the link in the description. All right, GK, you know what time it is? I have no clue. It is Ramsay Christmas cash giveaway time. That I knew. That's what I'm talking about. I'm excited about that. It's official. The time is here. Someone, somebody out there, I don't know who it is, is going to win $10,000 in cash this Christmas. Why can't it be you? That's what I want to know. Why not you? Plus, we're also giving away $500 every single week. Up until then, you can enter to win every single day from now until December 20th to increase your chances to win, which is pretty amazing. So if you want to get involved, which I think you should, go to RamsaySolutions.com/giveaway now to enter. No purchase is necessary to win. I love it. My favorite time of year. It's beginning to look a lot like Christmas. I love it. Thank you. That was a mouth trumpet for you. Trying to support. I appreciate that every time. Let's go to David in Milwaukee, Wisconsin. Hey, David, how can we help out today? Hi, how are you doing? So I'm just getting off of the big Guru get win, so I'm very happy on that. But basically, I'm 20 years old. I'm currently homeless. I am just trying to find how I can make my money go into basically getting my apartment up here in Wisconsin. It's going to get cold soon. So I'm just trying to just see my options for that. David, what happened? So I'm 20. Basically, long story short, with me only being 20, from 18 to 20 itself, it's just been a lot. My family, me and my mom didn't really have good eyesight. So we just, of course, we had to find ways with that. I was blessed enough to be with someone else for a little bit. And then, like I said, it just got me to me being homeless. Currently, right now, I have a job, a really good, okay, okay. It's an okay paying job for my age. I am blessed enough, thanks to God, to like have to sleep there sometimes. I get to sleep there. So I'm not. Do they know you're sleeping there? They do not. I have access to the building itself, so that's not an option, like an issue, but the sleeping itself, they don't know about. Okay. And it's like, I got to get out of there because if they find out I'm sleeping here, I'm going to lose this good job that I have, right? Exactly. But also, it's like, man, I don't want to be out there. And so, yes. Okay. And I'm guessing since, I mean, let's be honest, it's pretty extreme to be sleeping at your office. So my guess is you don't have any community, any friends, no family who you could say, "Hey, I'm going through a hard time. Can I pull up the couch?" I don't. And I don't have that. And I am very, very close to being okay in life, being by myself. That is, of course, the good and bad thing with me being so young that I don't have a support system right now. Yeah, you need it. Exactly. So that's why I watch you guys a lot. I'm blessed enough to have this to be able to want to change. So that's why I'm kind of crying for the help of, you know, I need some help. Okay. What are you making right now? So, okay, guys. So I started in March, okay? And since March, I have an app that I have, ADP. It says, "Year to date, I've made $26,180." Okay. Monthly, it's a fully commissioned job. So it's not a net pay. So the last couple of months, October, I made $4,400. September, I made $4,600. And August, I made $3,200. And where does that money go? Because where's it been going? So the money goes, since a year and a half ago, I had bought a car, which my life is totally different. You guys are going to kill me, but I was young and I know. It's a 29 percent interest rate. I pay $650 a month. Still? The only good. Yes, yes. Okay. So the only good thing about this loan itself, I love it, but it's a Lexus. So there's nothing good about this loan. There's nothing good about it. You're homeless driving a Lexus. Do you know how insane that is? Yes, I did. Yes. I know at the time I, at the time that I had got the car, I was not in this. Right. But now we are. So that's going to be the number one thing on our list that George and I are going to help you get rid of. So start saying goodbye because we cannot have this car. So $650 a month and let's keep it current to right now because we only have a limited time and I really want to be able to help you. So the $3,800, for instance, that you made this last month, tell me exactly where that money is going because $650 is going to the car. What else? So majority of it, to spend a lot of money in gas, I do door-to-door sales. So we go in Wisconsin, different, you know, different cities. So I do a lot of gas. And then I have been just fixing big purchase with like a radio. I'm like mislaying your stuff. That's been big. But also real quick, I've been attacking my debt. No, no, no, no, no, no, no, no, no. Stop, stop. Go back to what I was saying, which is the $3,800. You don't have a house or a place to live. Where is that money going? Which means you don't have utilities. You don't have, right? We need to know where that money's going. So I look, I've been, like I said, that I've been paying off. And I also like miscellaneous, like, like gas, like gas is a really big, I don't think you're spending $3,000 a month on gas. What are the other debts? Let's see if we can help you. What are the other debts you're paying? So I've been trying to just, I'm thinking in ketchup. That's why it's been like, I'm not really having that money just to sit. Yeah. What debts? So I've been, so it's been my phone. I've been paying off my phone, like bills that I've been passed on. Okay. What bills? My collection. It was like my phone, like my phone bill. I was like two months past on that. So you're passed on the phone bill. What else? It was my collections that I paid off. Okay. I was spending about $1,000 a month on gas. Okay. And then like other like miscellaneous things, like I say, like, food, clothes, like stuff like that. Okay. So the only bill, the only bill you've been paying that's over is the phone bill. And then there's some collections things. Let's forget about collections for now, because they're already in collections. They're already probably primed to sue you for whatever reason. So let's, let's not put any more of your money going forward towards collections right now. Let's not even put any more money going towards cell phone. If you use your phone for work, they need to be paying for it. So you honestly don't even need a personal line because you use your phone for work. Okay. You don't even have a, you don't have a home. So we've got to put the, the number one thing, first things first, which is you've got to get yourself into a place that's not the office because you cannot lose this job. Fair enough? Yes. Okay. So what, what is stopping you from resetting this life and going, all right, I make four grand a month. Why can't you go rent somewhere for a thousand bucks, even if it's with a roommate or two? Which I am a thousand percent, I will. And, um, I basically, most of our guys I know looks bad now. What I've been trying to do is I've been trying to do is I've been trying to do is clean up my mess. So now going forward these next couple of months, I'm okay. Cause my only fixed expense now is my car. Yes, but you're putting it in the wrong order. We're telling you, you need four walls first, which is housing, transportation, food, and utilities. You cover that before anything else. So then should I, would you guys say, uh, say get my emergency fund first? No, you don't. No, no, no. Four walls first. Exactly what George said. Go find housing and make sure you're current on that. Cover your, cover your gas and basic food. No eating out. No eating out. You don't need clothing right now. It sounds like you got plenty and your utility bills that come along with that. That's all you actually need to cover. Then if there's money left over, which there should be, we can make minimum payments on our debts. If there's extra money beyond that, let's throw extra at the debts. If you do it in that order, you'll actually have a place to live and you can fight this thing. Yeah. When do you get your next paycheck? I get, it's a good thing. I get paid every week. So it's a consistent pay. Okay. What day? When is it? Every Friday. Friday. So do you get paid today? I did get paid today. Okay. How much did you get? About $1,100 today. Okay. So $1,100. Don't spend that money. Do not give it to the phone bills. Do not give it to collections. Do not give it to your dad. Do not give it to anybody else. And let's see what we can go out there and find first and last month's rent and say, okay, let me see if I can find some place. And then by next Friday, when I have $2,200, can I get myself into four walls with some heat or AC? That's what I, that's your number one goal. What would stop you from doing that? Really nothing. But I'm asking you guys a question real quick. My only thing I'm thinking of is the only dilemma is because I'm so young, my credit score is only 480. That's fine. So that's the only thing. Your credit's a wash, but you need to find a place where that's not their main thing. That's why I said, let's do some research because you might find somebody who's renting a room. You might find something. That's not as corporate run. And also the more cash that you have in hand for first and last month's rent, that's going to look a lot better for you. Okay. Now, correct me if I'm wrong. Now, real quick, since I know it's commissioning and it's good and bad for that, I would think I need emergency funds so I can feel comfortable enough to be able to live. First things first, my friend, you're putting the cart before the horse. The very first thing you need is four walls. And then, and then once you get in there, then we can put a thousand dollars aside. You're correct. Then a thousand dollars. Then after that, we can start getting current on what's behind. And then after that, we can start getting current on what's behind. We can start actually making some payments above the minimums to try to start paying off whatever you might have. Maybe you have some debt that you did not mention here, but that's the order. The only debt I have other than a car, only that I have is a $1,500 credit card. That's it. Okay. And we're not touching that right now. So just remember off the phone, four walls. I'm looking for an apartment by next Friday. I ought to have something. And then from there, yes, stash away a thousand dollars and do the step-by-step call us back if you need anything. And I mean that. We'll be right back. We've got Charles in Corpus Christi, Texas on the line up next. Hey, Charles, how you doing? Doing wonderful. Thank you for taking my call. Yes. Just a quick question. My son's 23 years old. He'll be graduating this fall with his master's and he's got $34,000 left over in a UTMA account that we set up for him to pay for his college. And it's still in a managed, it's a fidelity balance. That's fine. But I just wanted to know, would you recommend, he has started a Roth IRA on the side as well. Would you recommend rolling over some of that into that? Or what would you recommend he do with that money going forward? Where's he at in life? What are sort of his next goals as a 23-year-old? Is he working full-time? Is he renting? Is he married? So he's single. He just got his first job. He did one interview and got his job. He's a wildlife biologist and the ranch that he's working on provides housing. He gets a two-bedroom, two-bath house. So all of his utilities and everything are covered. So he has no debt. His car is paid for and no debt at all. I love that. I mean, there's part of me that likes the $34,000. Does he have an emergency fund of any type? I'm just curious before I go much further. I couldn't answer that. He likes to hunt and fish, so he spends a lot of money on that. Well, there's part of me that goes, he's got this really cool job now where housing is provided. But on down the line, there may be a situation where housing is not provided and he's kind of out there like the rest of us and has to decide if he wants to buy a house and put a down payment on. So I kind of like the idea of maybe letting the money grow for a while knowing that there's going to be some real-world purchases that might require a hefty down payment. in the future. So I don't know if I would move it over to retirement funds. Okay. So would you leave it in like a balanced fund like it is or move it into mutual funds, index funds? When you say balanced, it makes me think there's a bunch of bonds in this. Yeah, how's it invested? Yeah, it's the Fidelity Balanced Fund. That's what it's been in since day one when he was one year old when we started it. Okay. Yeah, I'm not sure the exact investment's inside of that, but I would want to see him in 100% equities at 23. I mean, he's got a lot of life ahead of him, and if you want the full upside of the stock market, you've got to be exposed to all of it. And so it'd be wise to move him into the Ramsey-recommended mutual funds across four types. You've got growth, growth in income, aggressive growth, and international. And so having that diversification, all in equities will help that money grow for him over time. And then it's his money now legally, so when he decides, all right, I could take 50K out as a down payment, that's great. That's exactly why you set this account up, right? To help him with his adult life? Yes, yeah. It's set up to pay for their college, and then they were shown the amount that was in there and basically whatever was left they get, which gave them some incentive to do well and apply for scholarships. And the stock market's done so well, he's actually going to have $34,000 left when he gets his master's. That's great. So yeah, I mean, if he's debt-free with an emergency, fund, then he's at baby step four where he can be investing 15% of his income and he could fully fund a Roth IRA for the year. He could set aside some for an upgrade for a car one day. He can set aside some for a down payment. These are all really good goals to have as an adult, and you've done a great job setting them up for success. I love that. I would talk to him and have him make the decision. That's a good point, George. So sit down and say, hey, you got 34 grand left after your master's is over. What do you think is the best use of it? And talk him through that so he understands the critical thinking behind money and what's the best use of it. Yeah. And it does also point to another side of this where whenever you're investing money, guys, make sure that you're taking the time to look at it, looking at exactly how it's invested and making sure to check that the rate of return is somewhere between 10 and 11 percent at the very least annualized, because that's how you know, hey, it's in active equities like this thing is it's not invested in bonds. It hasn't been very, very conservatively invested to where you're barely doing better than a high yield savings account. Right. Make sure you're checking that. It's 35 percent. 35 percent bonds. Oh, so from, you know, when he was young to now, 35 percent of that was in bonds which weren't performing. No, not at all. The U.S. stock market was. So that's something to look into now. It's, you know, water under the bridge. You did well, all things considered. Absolutely. But it's just something, you know, you want you want to get the most bang for your buck. You're investing this money. Go ahead and go full in. Jump into it. All right. Let's go to Lori, who's in Phoenix, Arizona. Lori's up next. What's up? How you doing? Hi. Doing pretty good. Yeah. How can we help? So my basic question is, is I am going to have a lot of medical bills coming up. Unfortunately, I only have about eighty five hundred dollars in a emergency fund. OK. And I have sixty five thousand in a Roth IRA. I just want to. My question is, is what's the best way to attack medical bills that are going to be start public? I'm just telling up real quick. Well, what's your deductible? So. I believe we just signed up for the insurance. I actually just got married two weeks ago so I can get on my husband's insurance and it is a. I believe zero deductible, but we pay 20 percent. Oh, OK. And do you know what the out-of-pocket max is for the year? I want to say sixty eight hundred. OK. So that would then be my my goal. Do you think these bills are going to. Exceed sixty eight hundred? Absolutely. They are already. So I had Affordable Care Act insurance before I got good insurance two weeks ago. So the stuff that's already coming through, like my PET scans, my MRI, my ultrasound, all that stuff is already adding up and probably about six thousand right now where I'm not. And that's not even scratching the surface of what's going to come. OK, so you guys will see you'll have the 20 percent copay. You'll have the. 20 split copay. And then you're on the hook for up to sixty eight hundred dollars for that for that year. And you said you have eighty five hundred saved. I have eighty five hundred in the money market account. Yes, I've been using or saving as my emergency fund. OK. Are you guys combining your finances now that you're married? We are in the process of doing that. It's just been two weeks. And so we've been just processing this diagnosis and. Doing all the appointments and. And getting all the stuff on board. He's still in the process of moving in as well. So it's been a busy couple of weeks. But it's tough. That's a lot. What is the what's the future look like as far as this diagnosis? Are these going to be just ongoing medical costs that we need to factor in every single month? No, no, no. I'll be OK. It's actually a reoccurrence of breast cancer that I have. And this time I will have to do some radiation. That should be it. So after the surgery, which is November 16th and then. Four to six weeks of radiation after that, which means I'll be out of work for four to six weeks just for recovery from the surgery. But then after that, I should be able to go back to work. OK, I'm going to call this storm mode, which means we're pausing the baby steps. Let's use the emergency fund if we have to and then cash flow the rest. So let's get ahead of it and say, hey, our future paychecks are this much. We need to set aside this much a month inside of the savings because we don't know when this storm is going to be over and how much it's going to be and what the damage will be. The goal is to avoid the medical debt if we do. If you have medical bills to pay, we'll deal with that and try to negotiate and settle on down the road. But right now you focus on you and your health. We're praying for the best prayers for you. People ask me all the time, George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back and save more money. How much? How much money are we talking? Well, the average EveryDollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download EveryDollar for free and start saving more money right now. Well, if you've worked hard to get out of debt, the question now becomes, what do I do with all this? Freedom I've created. Well, we're going to unpack what comes next live on the Live Like No One Else Cruise. But you've got to be there to experience. This is your week to get away, to have an incredible vacation and hear completely brand new teachings from Dave Ramsey and myself, George Campbell, Rachel Cruz, Dr. John Deloney. All of us are going to be there. We'll be talking about things like setting new goals after getting out of debt, ways to continue building wealth, creating a legacy that lasts long beyond you, and a lot more than that. Plus, you'll get a chance to learn more about every day. You'll get to experience live show tapings. Smart Money Happy Hour, is that going to be? Oh, yeah. We're doing two of those. Yeah. And I think we're, are we doing a Ramsey show? Ramsey show live a couple of times as well. A little Deloney After Dark. That's a late, I'll be asleep by then, but a lot of people stay up. That one's packed out. Deloney After Dark. I don't know. What does that mean? I don't know. You'd have to be there to experience. I don't know if I'm old enough to get in. There might be a, you know. Adult style. Yeah. Also, we'll be doing the world's largest debt-free screen, which if I'm honest, that was my favorite thing that we did on the cruise last time. And of course, just a really fun time sailing and visiting all the different locations in the Western Caribbean. So if you're on Baby Step 4, guys, or beyond, join us. It's going to be March 14th through 21st, 2027. Cabins are almost gone. So please be sure to lock yours in. Book your cabin at ramseysolutions.com slash events. All right. Let's go to Miranda, who's in Athens, Georgia. Hey, Miranda. Welcome to the show. Hey. Hey. How are you? Doing all right. How can we help? So I had a quick question. We, me and my husband recently bought a house a year ago. It's our first house. We put 5% down. So we were planning on refinancing the home once we got like a large commission check that, you know, we just got. But interest rates are going up. I didn't know if there was another way to pay money towards, we want to get rid of PMI, but it would have been nice to also lower the payment. Is there another way to do that? Or not really. Like we're just stuck with the payment that we have because interest rates are so high. I don't know if that makes sense. You're not stuck. You'd have to throw money at the principal to lower that, that ratio in order to get rid of the PMI. Do you know how much the amount is? Um, like the PMI we pay each month is like 225 or something. And what's your, your ratio of equity? So we put five. So we put 5% down. We bought that. We bought the house for, it was 395 was the sell price. We put 5% down and I think it appraised at 415. I don't know. And what's left on the loan? Um, I, I looked the other day, it was like 370 something cause we've only lived in it for a year. Okay. So you guys aren't quite there yet. Now what's your, what's the amount you could throw at the principal right now? Um, right now this, like we could do 40,000 now, but next quarter we'll be looking at close to 60,000. Okay. I don't know that we're going to do it all. Oh, that's good. I mean, yeah. That ought to get you there, right? Because 20% would have avoided the PMI on the 395 house. 20% would have been 79,000. So if we can get to that, that ought to clear you of the $225. If you get that mortgage to like 310, 315, just throw it all at it. You can recast it and then you can get that PMI removed. And would that also lower the monthly payment or no? Yeah, the recast would. So it'll, it'll keep all of your terms, but it will calculate it based off the current balance. Okay. And so because your loan's a lot smaller, it'll lower the payment as well. Okay. So would we just contact like a mortgage broker to do that? Yeah, you can contact your, the lender you have right now. Okay. And say, Hey, we're, we're looking to throw a lump sum at it, recast it and get rid of the PMI and they can walk you through that process. It shouldn't cost much. Some recast maybe cost 500 bucks. Is this mortgage a lot of your world right now? Like what's the take home pay and what's the mortgage? What's the mortgage amount every month? No. Well, it's a caveat. So we get large, um, you know, quarterly, um. whatever it's called uh commissions but our take-home pay is based off basically a base salary of 125 so it it can sometimes feel tight until those bonuses come in and then you're like okay we're good now and do you set that money aside to cover the weaker months so this is honestly the first time so our financial situation has changed slightly we've made the same amount each year but i've just stopped working my husband got a new job he makes more commissions so this is really the first time we're seeing this larger commission check and i just stopped working at the beginning of october so this is all really like new we almost we basically don't really know what it's quite going to look like it's going to be fine we know that but we don't know like the month to month i guess how that's going to feel yet which is part of why we wanted to lower our payment if we could so if you if you do if you do this and you get rid of the 225 a month in pmi what percentage will the mortgage be of your of your take home on that basis um let's see probably nearly 30 i would say after insurance and all that's taken out okay then i i i feel more confident in that but i think it's going to be i mean it has the propensity to be pretty tight until that happens but i would contact your lender because every lender varies and ask about the process for removing pmi and what that's going to take and once you have the loan to value can they just remove it or can they just remove it and then they can just remove it and then they can just remove it and then they can just remove it and then they can just remove it or does it require you know recast refinance so those are good homework points to get and if you want a second opinion on this you can always contact our friends at churchill mortgage and they can walk you through that thanks for the call next up we have dimitri who's in albany new york hi dimitri you're on the line hey how are you thank you guys so much for taking my call absolutely um so yeah my question is i'm currently twenty four thousand dollars in debt and i am not i assume i'm not going to be able to get my mortgage back i'm not going to be able to get my mortgage back i'm not going to be in debt and i am not i assume i know the answer but i want to see if i should stop like all investing including my 401k and pay off that debt as aggressively as possible or if i should just continue investing and then like pay off the debt while also investing i assume i know the right answer but i just wanted to double check you guys well george and i are so confident i think we can count to three and say it at the same time oh boy now i'm nervous one two three stop investing look at this i just want to make sure and that includes everything like every single dollar and how does it make you feel dimitri be honest it's a little scary because i've just invested my entire life pretty much does it frustrate you a little bit yeah it does but it does but does that mean you'll get out of debt faster because now you're mad i kind of i just think anger is a part of the process it's like you need the five stages of grief with debt and anger needs to be there and i'm angry that i'm not able to invest every single dime because i got these payments over here so think about on the other side of this how quickly will you pay off your debt if you got fully focused paused investing and just went 100 in on the ramsey plan how quickly um i would like to say within two years two to three years okay so you're telling me you can throw at max a thousand bucks a month toward your minimum payments and extra um i would like to say within two years two to three years okay so you're telling me you can throw at max a thousand bucks a month toward your minimum payments and extra yes probably could you do better i'm very frugal i i it probably how much do you make a month uh a month i i'm not too sure what it comes out to but i make eighty four thousand dollars pre-tax that's a great income so if you pause investing how much are you investing right now what percentage twenty twenty percent going to my 401k wow so that's seventeen thousand dollars a year you're going to get back that's like three over three quarters of a million dollars a year that's like three over three quarters of a million dollars a year right there just by pausing investing so now how fast you're going to get out of debt if you actually pause investing right it could be a year less than a year that's right that's nothing plus what do you already have invested how much is already there i have i have ten thousand in one of my like robin hood or brokerage accounts and then i have eighteen thousand in my 401k okay and then i have uh eight thousand in my roth and then i have eighteen thousand in my 401k and then i have okay so let's call that all together thirty six thousand dollars and how old are you i'm 25 well 24 okay you're 24 so let's just pretend from age 25 since it's going to take you a year to get out of your debt to age 65 uh and let's pretend with the 36 000 in there and i just have this plugged into our ramsey solutions investment calculator and let's just pretend you were only investing 15 from age 25 to 65 with what's already there if i calculate that gosh do you see the number on my screen you can't see it 12 million dollars 11.9 million dollars because you're so young you have a good income and you'll be taking advantage of time in the market gosh you have nothing to worry about no debt payments the rest of your life get the emergency fund in place and just keep investing and nothing's going to stop you when you don't have any payments you hey george camel here we often talk about how being normal sucks when it comes to your money but guess what normal isn't so great when it comes to your job either normal is not so great when it comes to your job either normal is not so great when it comes to your staying in a job you hate dreading mondays and working for people you don't even like sound familiar well the good news is you can break free from normal because ramsey solutions is hiring and we refuse to settle for the ordinary in fact we are anything but normal and we are proud of it and right now we're hiring for technology sales marketing writing copy editing and creative roles so head over to ramsey solutions.com slash careers and apply today well george we talk all the time about how the seven baby steps are the fastest way to achieve financial peace in your life the easiest way to build wealth the fastest way to wealth and peace and one of my favorite things is celebrating the people who have actually done it it actually worked for them and a lot of you may not know this but uh in the in the buildings that we work in here there's two very nice sized buildings and a lot of you may not know this but uh in the in the lobby of the first building we have a debt-free scream stage where you can actually come here and tell us a story of how you use the baby steps to pay off debt and today we have cladelia from dallas texas on that debt-free stage good to see you cladelia thank you jade and george i am thrilled beyond imagination to be here oh well we can't wait to hear your story so let's get into it how much debt did you pay off 397 000 that's a that's a that's a lot of money that's a lot okay how long did it take you to pay it off uh it took us 46 months 46 months okay and earning what kind of income uh started at 180 and ended at 285 wow fantastic excellent i love that okay well tell us the story how in the world did you look back and go okay i've got 397 000 of debt let's get it let's let's pay it off how did that happen yeah well it started out not so not so nice and just a lot of debt from that and we were just trying to make ends meet while we were going through the process um but then we got through that bought a house and so biggest part of that debt most all of it was paying off the house whoa so yes no mortgage no mortgage oh lord that is wild hold on you so you keep saying we you paid off the mortgage who else was involved in this well my kiddos because they they learned a lot of sacrifice along the way and we had to cut costs a lot a lot along the way and so we were in it together but this is all your income yes sir what do you do for work i'm an engineer electrical engineer fantastic field and the 397 was all mortgage yes sir oh my gosh in four years i mean we're talking like almost a hundred grand a year getting thrown at this you were angry at this thing yeah i was so we we paid off that legal debt and i was like we're not stopping god bless the new house we're going to just get it all done how much was the legal debt it was like thirteen thousand okay and how many kids do you have we i have two amazing kiddos wow i love it and what are their ages they are 14 we had a set of 14 year old twins oh my gosh okay so 14 is old enough to have an opinion and a strong opinion what did they think about this because i know they felt the sacrifice oh well one they were like we don't want to hear anything else about ramsey please turn it off mom please turn it off and then they they would love to go out to eat and i was like no we're we are cracking down we had mcdonald's at home that's right we learned how to love eating at home mom knows how to cook yes sir that's incredible so tell us what was the hardest thing to give up i mean we talk about things like going out to eat we talked about the 14 year old twins what was the part that was like i will be so glad when this part right here is over whether it's i'll be happy when i never eat another tuna fish sandwich again what was that thing that was just like oh it was just having some margin because i mean every penny we were just throwing at it just to just to be done and so just being able to breathe and say like okay we can go over our hundred dollar grocery budget or we can take a little trip just not feeling the constraint so just being able to breathe a little bit enjoy some time with family it felt great that's amazing what's the house worth uh right now it's worth like 453 somewhere along those last time i checked and what do you have in retirement oh retirement we're about 700k we're talking to a bona fide baby steps millionaire i love it when she stepped up there i said she's got a million dollar smile but she has a million dollar net worth to go along with it wow you should have let out without that would have been my first thing i'm a millionaire that's exciting how old are you i'm 46 46 man that's what i'm talking about wow so how much did you free up with the principal and interest that you don't have to pay ever again yeah that was a four thousand three hundred twenty nine thousand dollar mortgage payment a month oh my goodness we did a 15 year mortgage and so you know so you're telling me you freed up forty three hundred and twenty nine thousand dollar mortgage payment a month so you're telling me you freed up forty three hundred bucks a month yes sir for the rest of your life for the rest of my life we are fifty grand a year that can now go towards building wealth giving enjoying life that's right what's the thing that you want to do now that you you're completely debt free i want to help single moms um we are we're excited we're gonna be upgrading in cars i want to be able to give that car to a single mom just i love that just give generously we have been blessed to be a blessing so what what car are you driving like what's your dave get out of debt car it's a 2013 ford flex and what are you going to upgrade into ma'am we're looking at a 2023 uh lexus rx 350 premium plus i love it now that's a real flex right there yeah i love over ford flex that's a baby step seven see dave is upset because everyone calls it my dave car no it needs to be my dave car it's the baby step seven car that's the rice and beans car up up front that's amazing yeah flip the script on that and i know you're going to be taking some trips so what are you going to do to celebrate beyond i mean are you going to take the kids somewhere what are you guys going to do ramsay cruise just throw that idea that's a great idea we're already set for that are you oh yes oh my gosh god willing we will be at the ramsay cruise this call just keeps getting better and better i don't i don't know how it could get any better than this so maybe you'll blow our minds with something else what else do you have to share i don't think i have anything else well who was cheering you on through this whole journey so my family has been fantastic my mom and i have a twin sister as well as twin kiddos okay and my twin sister joined and she traveled with me here today um and so we're going to do something to celebrate too she's going to be at the cruise with us too oh my gosh it's a family affair okay so i want to know because people have a hard time talking about the the ramsay journey publicly because it doesn't always land well people see it as a threat they see it at they get it's too extreme yeah have you told people about this in your life and what was the reaction yeah so so we started a group with family and friends about a year ago it's called on fire for finances and it's family and my twin sister my mom chat yeah wow we meet once a month virtually and we are just like pushing each other to do this and so i think that helps to eliminate the the jealousy because god did it for us he'd do the same thing for you he has no respect for persons wow you guys are impressive as a family you're impressive because that just shows hey if i'm doing it i want to share it with everybody and everybody's open to learn and that is just the healthiest family group chat i've ever heard of we're a great family a functional family no fighting in the group chat i love supporting each other so of course i got to ask what role did the budget play in all of this oh it was i mean from the very beginning it was two two through three tell us what that is write the vision make it plain so that he who has it will run and will not delay come on it was the budget it was our one-year goals our three-year goals our five-year goals just just is the vision and that's what god put in our heart and that's what we ran for well we're definitely going to hook you up with a couple of free subscriptions to every dollar that you can share with maybe another single mom share with one of the people in your group chat one of the family members in the group leave that in the ford flex when you donate it to that single mom oh that's great i put something in there for you i love that well let's get ready to do your debt free scream do you have do you want to bring your sister up yes this is my twin sister corvise my roommate my ride or die roommate that's fantastic my roommate is amazing that is so look at you guys beautiful twins yes i love it both million now two million dollar smiles that's great two million dollars and i see says my twin and me we're debt free that's right so she's debt free as well she is also debt free is that twin competition what's going on there twin inspiration i love it this might be one of my favorite debt-free screams ever i know i say that every time but gosh i love this one so we've got cladelia from dallas texas she paid off 397 000 suspiciously close to 400 000 and you guessed it it was her house she did it in just under four years making an income of 180 to 285 000 just out here and becoming a baby steps millionaire along the way in the process let's hear your debt-free scream count it down three two one praise jesus we are i think the angels in heaven are singing right now man i need like a gospel choir going right now that was inspirational i mean just the joy the faith it's infectious that was the smile all of it was infectious the momentum that was my favorite debt-free scream i've seen in a while i'm glad i got to be part of it if you heard that and it didn't ignite something on the inside of you you better check your pulse because these are real people winning with real people winning with real people winning with real people winning with real money doing the real baby steps it is not a myth people this is real life in action well the christmas season is upon us and most of us are out there stocking up on socks and mugs 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 hardcovers 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 at ramsey solutions.com store that's ramsey solutions.com store here at ramsey shows scripture and quote of the day one of my favorites isaiah 54 17 when god is for you no weapon formed against you will prosper henry ford said when everything seems to be going against you remember that the airplane takes off against the wind not with it oh love that that's great inspiration let's go to emily who's in fort worth texas hey emily how can you help me george and i help hi my question is can i afford to move from texas to california all right lay it out let's see if we can help you out so i have two kids they're 13 and 15 they currently live in the san jose area with their dad um they i allow them to move there about two years ago with him because he has a really restrictive schedule with his job he was forced to move there because they got rid of his job here um and my job is very flexible so i'm able to go and visit them right now every other month okay um but he's been having some trouble and he's having trouble getting them to school with transportation and things like that because of his demanding job so he's asked if i can move out there but when i started looking at it i was like okay i'm gonna move to california i'm gonna move to texas but i can't move to texas i'm gonna move to texas i'm gonna move to texas i'm gonna move to texas i'm gonna move to texas i make 125 000 a year okay solid income and how flexible is your job how easy would it be to transfer over to california could you do that today or do you need a different job completely no i can do that today i work from home and we can work from any state in the u.s that's great okay and what would custody look like if you did move over there i would get them on the weekends okay so you need a place big enough to at least have them stay over for for the weekends yeah so i i priced places in a small suburb outside of san jose um and i could get a two-bedroom for around three thousand a month can i ask um obviously the the new part of this equation is he's struggling with the transportation but what caused you to not move out there sooner if if the job wasn't the problem just the cost the sheer cost of living yes i'd i would never um if it wasn't for my kids i would never even consider looking at california because of how high the cost of living is but because on top of the rent you got taxes as well so have you done the budget to see what your paychecks would look like i did yeah so my checks would be essentially around 400 to 500 less per month okay so what would that look like in a given month how much would come through after taxes um about a little over seven thousand okay and you're saying three thousand alone would be your rent and that's the most affordable spot you can find currently? As far as yes, being in a safe area that has everything that we need. That's been the most affordable that I can find. Now, can I just ask, I'm not trying to blow up this whole thing, but what does he earn? So I, a lot more than I do. I don't know the exact number, but he, he currently stays, you know, close. He stays in the Bay area and he's in a $2 million house. Okay. And he asked you, would you move out here to help with the kids? Is that what, what happened? Yes. I wonder, I don't know. And I don't know what you guys' relationship is. So this could be a really, really bad idea. Is he willing to supplement this in any way? Cause it's almost as, as any form of like co-parenting, is he willing to supplement this? To be with the kids and help logistically. So I don't know what, you know, child support, alimony, or even just on the side, if he goes, Hey, I'm willing to help out, throw a thousand bucks to help you cover all the bills and help with the kids. He has not offered. He does pay me child support currently. I get $343 a month from him. Would that increase if you were actually with the kids more though? I don't think so. I mean, I, we would have to probably go back to the court. I don't think he would voluntarily offer to pay any additional money. Okay. I mean the, the big elephant in the game is, you know, you have to be almost half of your income and that's a really scary place to be. And unless you can tell me something where we can find a way to bring in more income, does your, does your work from home job allow you to pick up side work, extra work? Could you do something on the side to kind of balance this out a little more? Yes. Yes, I could. Okay. Well, that's good. And then another question I have is, do you have debt? Is there something that we can work on paying off so we can free up even more margin? Debt. Um, I have a total of about 30,000, a little over $30,000 in debt. Okay. What kind of debt is that? Um, so the bulk of it is student loans. There's $17,000 in, uh, student loans. And then I do have a car loan that's at 10,543.25. Okay. So that's 27. And then the other three is at credit cards. So the only thing that I have in my credit card is basically what I spent this week for the car that I, uh, got when I visited my children this week. Uh, so there's about $155 on a credit card. Um, and then the other debts that I have are, um, collections that I've been paying down to have about $2,000 left, 2,194 left. Okay. Okay. So there's part of this, I, I, I'm not, I'm not going to lie. I don't know how urgent this is, urgent this is. Obviously I want you to be with your kids, but that hasn't seemed to be urgent up until this point. And I just wonder if could really crack down while you're still in Texas and get some of this debt paid off and then make that move and be in a better financial situation. Just, just have more security so that when you are in a spot where, you know, rent is 50%, it's not quite so tight because it's going to take you a while to pick up a side job, I'm guessing, and get settled. Right. Yeah. So my lease in Texas is up, uh, November the 25th. So I literally have, um, you know, not, you might need to renew for another six months, knock out the debt, build an emergency fund and get real aggressive with it so that you can make this move sooner rather than later. But I'm, I'm with you that this move is important and I would want to do anything I could to be near my kids. And so part of that is I need to see what I can do to work on my career. I mean, you make an amazing income. You are not struggling, but by California standards, when rent is three grand, it would help to make 160 instead of 120. And so I'd be looking at ways I can do that through my through a new job, potentially. What skills do you need? What certifications? How do you move up that ladder so that this feels doable in the longterm? Yeah, absolutely. I couldn't agree more. Well, thank you for the call, Emily. Call us back if you need any more help. Next up, we have Heather, who's in Fort Myers, Florida. Hey, Heather, how could Georgia and I help? Hi, how are you? Good. Um, so I have, I have, um, I had called earlier this year and I had called in to ask if I was doing enough to secure my financial future since restarting my life over after a 30 year marriage ending. Um, I had explained to Dave and, um, Ken that, um, that I was 55 years old. Um, I'm a, I make 90 K a year as a RN. Um, I have no debt. Um, I contribute, um, to my 403B that has just over a hundred thousand in there. I contribute 20 and my work and then I have in a high yield savings account, I have, um, 185,000 in my high yield. Okay. Wow. Great. And so Dave recommended investing eventually in a permanent home. Once I decided what state I was going to live in, cause I used to live in East Tennessee and now I'm in Florida. Heather, if you can get to your question fast, cause we're right up against the end of the show and I want to be able to help you. Okay. I'm sorry. Okay. Um, so it's, it's, it's getting towards the end of this year and the lease is up and I'm still unsure where I'm going to live. So my question, should I continue, should I renew my lease and continue to build my high yield savings account for another year? Or should I invest a portion in addition to my 403B? Invest a portion of the 185? Cause you're trying to catch up on retirement and you want to buy a house. There's two conflicting goals here. Yes. Well, it sounds like the, the house is pretty urgent to you right now in the next year or two versus retirement, which could be, you know, five, 10 years out. So I would rather you use all that money toward your down payment and you can scale down investing for now to 15% and try to just put as much money you can toward that house. And that way you get into that house. You can knock out that mortgage faster because the more you put down the smaller the mortgage, the easier it is to knock out. Once it's paid off, you can start investing 30, 40, 50% if you want to catch up after that. And that'll happen just a couple of years from now. So I'm not sure if that's a good idea. So years from now with this income of yours and the key is in the meantime, do whatever you can to even supplement that income because every dollar is going to count. All right. That does it for today's show. Thank you to everyone in the booth, George. It's been a pleasure as always. Remember, ultimately there's only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.