The Hard Road Leads to Freedom

[MUSIC] Brought to you by the EveryDollar app. Start budgeting for free today. [MUSIC] >> Normal is broke and common sense is weird. So we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio. This is the Ramsey Show. I'm Rachel Cruz hosting this hour with Jade Warshaw, and we are taking your calls about life and money. So give us a call at Triple 8, 825-5225. First step, we have Sarah in Cleveland, Ohio. Hi, Sarah, welcome to the show. >> Hi, how are you? >> Hi, we're doing great. How can we help today? >> So my question is whether or not chapter 13 bankruptcy is the only way or I guess the best way for my husband and I to get out of substantial debt? >> Okay, what's going on? What are your numbers? >> So over the last three to five years, we've basically accumulated a 62,000 of credit card debt, 28,000 in loans between house repairs and personal loans. We have a $210,000 mortgage balance. We have about $150,000 of student loans and car leases that are about $11,000 annually. >> Okay. >> Can you tell me the very first one you said in that list first, I didn't get that one written down? >> Credit card is about 62,000. >> 62, okay. Oh my goodness, what happened that you guys got to this extent? I mean, obviously the student loans speak for themselves, but the 62,000 in credit cards, the 28,000 in other personal loans, what happened? Did somebody lose a job? >> Well, the long story short is we had our son about three and a half years ago, and I had pretty bad post-partum depression. We moved back to with my parents and sold our house, and the plan was to save money and have help, but I was not emotionally feasible. So after about eight months, we bought the first house, and we could get an offer accepted on and pretty much put most of our savings down, which made our housing go more than double, so we had a beautiful COVID interest rate beforehand. So pretty much our expenses doubled from there, and then just things just getting out of hand in terms of the cost of living, and I wouldn't say keeping up with the Joneses, but I would just say living like we still had half the expenses. >> Okay, and you still have that house? You're still in that same house? >> Yes, we just bought it about two and a half, three years ago. What do you guys make of your Sarah? >> Our net income is 120,000. >> Okay, and what percentage of your take home pay is that mortgage? >> Our mortgage is about $1800 a month. >> Mm-hm, and you take home how much? >> After tax? >> Monthly, it's about $10,000 after tax. >> Okay, so that's not a problem. >> Yeah, that's not terrible. The mortgage is not the problem. Have you started the student loans? It's 150,000, are you paying on those, or have you not been touching those? >> We are on income driven repayment plans right now. We pay about 200 a month for those, and then the thing that's really killing us is about $2,800, $2,900 of minimum payments between all the credit cards and the personal loans. >> 2,100 minimums, okay. >> 2,999. >> 2,999, okay. >> Yeah, and are you guys doing anything extra on the side of this point? Are you working extra hours? Are you working overtime? Tell me about your free time. >> Currently, not really, we both work in business and finance, so about half the year my husband works probably 70 hours a week, so he's not able to take on extra work, and I commute to work about an hour, so there's time loss there. I started to do some bookkeeping on the side, but that's not really lucrative. >> Right, so here's-- >> And we do have a three-year-old one. >> Yeah, you do. Here's where I'm at. I'm at, you can take the journey here and really change who you all are, and who you are, and how you operate as a family at a core level and clean this up. And I think it would be good for you. What I'm hearing right now, Sarah, is, I understand how you got here. I'm not a fan of how you got here, but I understand how you got here. But I'm still hearing a lot of reasons why nothing can change. And I think that if you don't address that, that's going to be the hardest part for you. You've got to get to this point where you're like, I don't care what it takes, I'm going to fix this. I don't care if I'm exhausted. I don't care if I have to pick different side jobs that I hate because they make more. I don't care if we have to start looking for jobs. I don't care if we have to sell the house. I don't care. I just want to be free. And right now I feel like you're still, well, we can't do that because we have to. Well, we can't. And because of this. Yep. And the 150 student loans, are they government loans or are they private? They're federal. Okay. So they're not being corruptible. So you'd still have $150,000 of debt. And so I'm with Jade and I'm sitting next to somebody who paid off close to half a million. You guys are at about that $252.70 mark. And I mean, Sarah, it's going to take you guys. It's probably four to five years. It's going to take a long time to get out of this mess. But what Jade is saying is, I don't know, there's a level of, could you take the right, and I wouldn't say easy route because bankruptcy is hard. That's going to affect the rest of your life, right? If you end up doing that route, just take that and be done. Or do you take some level of responsibility of, it's been a hard road, and life has thrown at us a lot of things. But we also put our names on some of this, like we did walk into it, maybe for difficult reasons. But we did walk into this and choose this. And there's something that changes. And Jade, you can speak to this because you and Sam, I mean, walked this route completely of this amount of years, right? This isn't, you know, Sarah, unfortunately, it's not a 18 month journey, if I say, suck it up for a year. And you guys, I mean, this would be, this is a, this is a, this is a, this is a marathon. So what we want to do, have you ever, you know, have you ever played the game, Jinga? And you have to pull out the block and put it on top and you have to test the block first to see if it'll even move. I feel like what we need to do with this stack of debt is test and see which block we can even move to get out of the way. And I'm looking at these car leases. That's one block that I think has enough movement to get rid of it. And I'm looking at the mortgage. I wonder if it's better for you guys. I don't know if there's equity there. I wonder if it's better for you guys to sell and rent for a while, looking at what you're paying a month. There could be something there. Do you have equity? I think it's about 65,000, okay, and then tell me about the car leases. The car leases one is actually up in December, which if we were going to do bankruptcy, we were only going to file myself, like my half, I guess, first, I guess we're just scared that if we both do it then, if something works out, what debt is in your name, Sarah? About half of the credit card of personal loan. Yes, we are only doing on the mortgage and the one loan for the basement repair. And see that, even that, for me, feels like it's certainly not the right move because you're just not clearing enough. In my mind, you're not going to be able to clear enough of this debt. You're making a worse situation, and depending on income and everything, they may put you on a repayment plan. Some of this, depending on which bankruptcy chapter you guys pursue or that you're eligible for some of the time, you're back on a payment, but you're going to end up paying something at some point. You might as well pay to get out of debt and avoid bankruptcy. Yeah, I agree with that. So look at these car leases, if you have them and you can say, obviously the one you're out in December, that's good, do not go back in, start saving up for a cash card now, I would say. And then for the other one, figure out what it costs to just buy the car out and then turn around and get a loan for that and then turn around and sell that car and then save up cash for the next car. And even with the credit card, if some of it goes to collections, you can negotiate that too. That's right. That's right. But call us back, Sarah, if you need us. I'm so sorry. It's going to be a long road ahead, but it's going to be the best road. If you're already enrolled in a Medicare plan, you might think there's nothing else to do. You're good to go. Wrong. The fact is Medicare premiums, networks, prescription coverage and benefits can all change even if your health doesn't. So doing nothing could cost you hundreds or even thousands of dollars a year. 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I moved in about two years ago and our HOA is suing the builder due to building defects and the major issue that they're looking at is water intrusion, which is obviously a huge problem being here in Florida with all the rain and the hurricanes. I also only live in Florida because I want to be near my parents who are older and not in great health, but Florida in general is not my long-term plan. So my question is, I'm wondering if I should actually try to pay off my mortgage knowing that my house is probably rotting from the inside out and I'm also not going to be in Florida long-term anyways, want to get your thoughts on that. Is everyone experiencing the water intrusion? Is it just a few homes? Have you experienced any issue thus far? I have experienced some issues and it does seem to be a problem across everyone's home to different degrees, mine is more on the minor end, but still pretty serious. Just in general, we don't want any water intrusion, and it's probably going to be a couple of years before this litigation even ends where we could start getting funds to fix it. What does it take to fix it? Do you know what the solution is and what it costs at least for you? No, not yet because most of the issues seems to be the front of the, so we live in town home, so it's like the front, the siding underneath it, the water proofing, it's all been like nailed through, so it's basically like a whole overhaul of the front of all of the buildings and it would have to be done like at the community level because we're town. Wow. Wow. How much do you have left on the mortgage? So I have about 500 K left on the mortgage. I bought it two years ago for 65. OK, and you said that Florida is not going to be your long term, you know, home. Do you have a time frame on when you will probably move out? Will it be in like two years or like 10 years? I mean, I hate to say it this way, it's more dependent on how long my parents are going to get. Yeah, it's fair, I will know, but they're in their 70s. OK, so there's a good chance it could be in, it could be 10 plus years. Yeah, there's no real, like, definitive, you know, sure, yeah. So if that's the case, and if you think you're going to be probably not moving out of your current home, do you think you'll be there for 10 years? Um, honestly, like if I had to guess probably not, like maybe five-ish years, like, you know, yeah, because the ideal situation would be that the lawsuit goes through. They have to pay up the, you know, the builder to whatever degree to fix whatever issue is going on. So it's not coming out of your pocket. And then you've been paying down the mortgage. And then when you move, there's some equity there and it's a fixed home. It's a fixed town home, right? And that situation. So that's, that's the ideal. And, and there's still something about putting money into, um, a property like if you, I don't know, I'm kind of even thinking like, are you wanting to move right now? Like if you get water damage and, you know, I'm taking mold and like, who knows what else could grow in the meantime, like the problems could, do you feel good where you are? Well, the thing is, if I were to move, um, I probably would take a loss on the house. I know, you know, Zillow's not always the most accurate, but because it is a new community in his town homes, the most recent units just sold earlier this month. So I kind of have a benchmark already, um, but would be addition of the litigation and all the destructive testing that's happening. Um, it's probably not going to be easy to sell and let alone sell for at least what I paid for it. Yeah, tell us about the ones that did sell were those new construction that no one had lived in or were there people who had bought and were actually able to sell even with the water issue. No, so those were, um, the last few available units of the community, so you would be the first person trying to sell as an owner with the water damage. So the community has been open for like, I think three or four years, so there have been a couple units that have sold, but not before the, not after the litigation. Yeah, right. So now that everybody knows what the deal is, you'd have to disclose that and that would be part of it. Yeah. So if I were in your shoes, you know, I think Melody, I would kind of, I love that the HOA is going after this, but I think I would kind of own this as my own thing as well. Yeah. And I would have some people come out to my own townhouse and estimate, give me estimates. Let me know and just kind of gather your own information because there may be gathering it from the perspective of the whole, but there may be some things that you can do individually. I don't know, but there might be, and I'd want to know those numbers for myself. I'd want to know, maybe there is something I can do that it doesn't have to be the whole line of townhomes, right? I'd want that information and I'd want to know what that cost is. Yeah, and get all the HOA guidelines too, because sometimes with townhomes, depending on, I think the HOA of what you actually own and what you can actually work on, you know, depends on the unit, depends of the part of the neighborhood. I don't know. I would be very specific about your townhoming. Yes. Is there any work you can do to mitigate some of this that could happen and I would just want another person's professional opinion who's not in the middle of this because this isn't always the case, but sometimes HOAs are traumatic. Sometimes it's like, you don't even mean, and I'm not saying there's not a problem. I'm sure there is. There's been a lot of crappy builders, you know, that just throw up stuff and it's not good quality for sure. That could definitely be the case. But I would want to get an actual realistic perspective from an outside party who knows what they're talking about looking at my specific home, not what everybody else is talking about. You know what I mean? And it could be worse. It could be better. I don't know, but I think that news, then that information will be able to help you make some good decisions on what needs fixing and what you can do to protect your asset. So that when you do sell, whether that's after your parents, before your parents, whatever that situation is, at least you've done what you can control. I agree. Right. Yeah. Our HOA guidelines do say that the, basically, it's like the whole entire front and like top of the units are HOA managed. So I don't think I would be able to do anything independently. We do have engineers and construction folks hired by the HOA going around doing destructive testing on all the units. So I have had them at my unit and they did discover already some water damage that they're trying to like sort of mitigate in the interim period, but it's not a long-term solution right now. Yeah. I understand. Yeah. Another question, I would just keep paying the more, I mean, I would just keep paying the payments and honestly, what I might do with the extra money that you were going to put on the payment, I might stack it up for repairs knowing that I might be the one that has to come out of pocket in some capacity to handle this. And then I'd probably hold on to that until some sort of information is given. If they're not going to pay, then somebody's going to have to pay and it's probably going to be you guys to a certain extent. So I want that money ready to go to my house level. It's almost like upping that emergency fund enough that when, yeah, when it has to happen and it has to get fixed and if it's coming out of your pocket, you have the money for it. Oh, it's so frustrating, though. And that's the other part we say it all the time on the show, but it's true. Home ownership is expensive things happen and sometimes it's stuff you can't control. Because it is stuff that you control, but the the expense of owning a home, it is worth it in the long run and not that every house deals with every specific issue like melodies, but, but it's another plea that when you become a homeowner that you don't have debt that you have an emergency fund, like you're in a good financial position to have margin as a homeowner. So when things come up, because they will, that it's not a stress point that you know, you can take care of it and, I mean, that's that's always our big push with home ownership because it's a lot. 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This is really this like moment in time where you're trapped on a ship with all of your fun Ramsey people and there's a lot of learning and entertainments and enjoyment and great restaurants and coffee shops and bars and it is so much more than just you sailing individually on your own and just, you know, with your family and you're going solo. This becomes kind of this full community aspect and that is the fun, unique part of this cruise. You've paid off all of your debt but your house and you're on baby steps four and beyond or maybe you've even hit baby steps seven and you've paid off your house. This cruise is for you. So it's all inclusive pricing that starts at $2,105 per passenger so that's your cabin, your food, entertainment, taxes and tips and all of it. So this is such a unique week and we don't get to do it. We've only done one of these and it was so great that we are wanting to do it again. So there's a few cabins left but you guys make sure to sign up and go with us again. The dates are March 14 through the 21st. You can go to Ramsey Solutions dot com slash events. Get signed up. Book your cabin and join us on a wonderful, beautiful ship in March of 2027. All right. Let's go to Kevin and Mobile, Alabama. Hi, Kevin. Welcome to the show. Well, thank you. Thank you. Thank you for kicking my question. Absolutely. Well, my wife and I have a college freshman who just started in the fall. We had done a good job of preparing him for college. He's real responsible. He does not owe any college tuition. He did a great job, scholastically, got scholarships and so we're paying for living expenses. One of the issues I have and this is probably thanks to listening to your show. I had always assumed that it would be beneficial for young people to begin building credit history. So when he started in the fall, I thought, well, hey, I'll just add him as an authorized user on one of my credit card accounts and let him start charging just his minimal living expenses there on campus. But after listening to the show and recognizing the serious consequences that can arise with using credit cards, my question is am I doing him a disservice, teaching him to use a credit card to build credit and is credit building a credit file actually necessary to move forward in life? Well, I got to say, I love, I think you're a really good dad because I think that you're really thinking through what's best for him and it sounds like you're really open. And so Rachel, what I'm hearing is somebody who is wanting to build like good habits, good financial habits and if we take that as the through line and we go, okay, what's the most healthy financial habit? It's being able to live on less than you make. It's being able to delay gratification for the things that we want. It's being able to write kind of control, control our behavior and make sure that our money is behaving and not the opposite way around and our money controlling us. So I think that's what you're after. And if that's the case, then I would say that a credit card would not be even necessary for him if those things that we just discussed are in fact true about him because he would be able to use cash to do those things. And he does. He does have a debit card that he could use instead. Obviously, as I said earlier, I assume that using a debit card is not going to build any transactional credit history. But if that is something that is really unnecessary and not worth the risk, then I will encourage him to shred that card and just use cash. And to know Kevin, the reason that all of this whole debt product in the first place pushes messages like this, because that's a very normal way of thinking. A lot of people are having to build my credit. That's a very normal statement we hear. And as you look at the credit score and how it's actually calculated, it all has to do with debt. If you pay the debt on time, the types of debt you have, if you're accumulating new debt, it's that score and the main reason you use that score is to go into more debt, right? So he would need a score if he's going to go get car loans, if he's going to get personal loans, a small business loan. If he's going to go into a life of debts, then yes, that score wouldn't be necessary. But with Jade and I, with Jade laid out, it was beautiful to say, if you're choosing a debt-free life where you save up and pay for things, where you actually say no to the whole debt industry, even things like a car, then there's really no reason for that credit score. The mortgage is the one type of debt that we won't yell at you for, and so you can actually get a mortgage still without a credit score. It's called manual underwriting and you can go through that process and still own a home. And so really that credit score, man, it has been, it has been inflated so much of the importance of it, but if you kind of choose the weird path of life, like what we teach you on the Ramsey show and you choose a life without debt, you really, you don't need it. Now, there are moments, maybe employers or, you know, even with like cell phone companies, they may pull his credit report to see any history of how he has paid, but there just really won't be anything on that credit report. And it doesn't necessarily ding you. He may have to fill out an extra form or two, but that would be the only time that you kind of run into a situation outside of debt of why people, you know, try to have great credit history and all of that. So if anything, Kevin, you know, he could even freeze his credit. And so that, you know, make sure that no identity, you know, no one's taking debt out of his name and that, you know, even identity theft and all of that, that can take care of that. So that's, that's probably the card I would play with him is that yeah, why you don't need it? Explain it to him. And creating these habits in college is so healthy. Like for an 18 year old to be budgeting the money that he has and spending within his means is amazing. Absolutely. Yeah, Kevin. And I would just add one more layer to that because I think Rachel, I mean, what she's saying is exactly right. And even the fact that just reframing that a zero credit score or an indeterminable credit score in the market is just as effective as a high credit score. There's no negative to it. And Rachel talked about the home, but really there's kind of three key areas that most people think I need credit for this. Most people thought they needed credit to buy a home, which Rachel mentioned. A lot of people think they need it for a car and they think they need it for an apartment. And so just kind of getting ahead of those and being able to talk with them and just tell them, hey, when you go to your apartment, just know you might have to pay a little bit more down for a first and last month's rent. Just know that they're going to ask for other trade lines, your cell phones, maybe things like your insurance payments. So being ready to be able to show those types of things and just so he knows what to expect with a car, right? One of the big things about this is now we're saving up and we're paying cash for cars. And just by him doing that, Rachel, he will be so ahead of the average American never getting into that car loan cycle. So that's how this works. I think when people have that information ahead of time, it kind of just counteracts some of those things that we come up against when it's time to buy an apartment, it's time to buy a car. That's right. Just getting ahead of that. Yes, no absolutely because, you know, there is a life navigating without debt and the positive side of it too, even the numbers, like even, you know, Kevin running, if you go to Ramsey Solutions.com, we have an investment calculator and I'm like, just throw in with the average, you know, the average family owes, I think, right now $12,000 balance is on a credit card and it's like throw that in an investment calculator and instead of that being your reality, here's what your reality could be, you know, in, in 40 years and same with the car loan. I mean, the average car payment on a new car is up around $900 a month and if you just said, hey, what if you avoided that and debt was not part of your life and you invested a car payment every month instead of paying a car dealer or a bank, what you could be. So the, you know, the possibilities are endless. So Kevin, yeah, just like Jade said at the top of the call, you were such such a great dad and I think that's where parents can step in and it's not out of control or judgment with your kids, but teach them and show them like, hey, here is what this looks like and even your own mistakes, right? I mean, as parents, I'm like, man, that's what a wonderful humbling thing for your kids, but please learn this before because that's one line we get all the time as I wish I had known this stuff earlier. Absolutely. If you can get it, Kevin at your son's age, oh my gosh, to set him up for not only financially having peace, but also emotionally around money, that is such a gift. Okay, George, we hear from so many people that are trying to live out to the Ramsey plan, right? They're getting out of debt and everything, but the hard thing is there's not many banks out there that actually support the way we teach people to handle money. Yeah, most banks, they don't want you to win with money, so they charge a bunch of nuisance fees. There's all this fine print and worst of all, they are pushing debt products at you nonstop. Yes, but the good thing is that fair winds isn't like most banks because they're not like the other guys. They're not like the other guys. Yeah, they are not pushing debt and they actually want you to win with the baby steps. And so what's great too is they created the smart bundle for Ramsey fans, which includes a high yield savings account and no monthly fee checking, which is huge because it's rare to have a checking account tied to a high yield savings account. You can get all of that with fair winds. And for the nerds out there, you can have a 10 different high yield savings accounts for different goals. So you got your emergency fund, the car upgrade fund, the vacation fund, the world is your oyster. So beautiful. And check out the debit card, the new one, the live like no one else debit card. That's beautiful. It's so beautiful. We that's a conversation starter. It's so good. Well, and when you swipe or you tap, you know, every time you take it out of your wallet, you're remembering that you were living like no one else and you're being intentional with your money. I've been using fair winds for months and months now. I love their features, the app, the customer service. It is all so good and so aligned with the Ramsey principles. Absolutely. So y'all, we both bank at fair winds and we love their commitment to Ramsey values. So check it out. You can get that smart bundle. We're going to drop a link in the description or you can go to fair winds dot org slash Ramsey today. That's right. That's fair winds dot org slash Ramsey, insured by the NCUA. Well, if you're new here, like many of our listeners that have joined, even in the past couple of months, you know, when filter that we use to answer a lot of our money questions on this show is through the seven baby steps. And so this, these seven steps really take you from paycheck to paycheck living, broke no savings, debt, all of it to going through it for paying off debt, getting an emergency fund, a fully funded emergency fund, your funding retirement and kids college, your paying your house off early, like getting you through that money process is the seven baby steps. So if you want to check it out, make sure you do, there's, we'll put a link down below if you're listening on podcast or watching on YouTube because I mean, it's a pretty simple, you read them and you're like, all right, pretty simple to understand. Sometimes hard to do because it can be a long, it can be a long journey, but it really does have you get a grip on your money and actually have control over it, actually have a plan for your income. And the fastest way of building wealth long term, it's this. So check it out the Ramsey baby steps. All right, let's go to Lonnie and Austin, Texas. Hi, how are you doing? Thanks for taking my call. Absolutely. How can we help? So I've been a day based my whole life and I recently got busy with it and I have my thousand dollar emergency fund. Good. And I was tackling my snowballs and while I was doing that, I had a $17,000 on the credit card and the monthly payments got so bad that I just kind of stopped paying them. I figured I'd pay it later and I didn't touch with them. And so then when I did that, they put a lawsuit against me. They gave me to a debt collector and went to a law firm and they said that I had a lawsuit and they gave me all the pay for working everything. Somebody came and I said, he handed me the papers and so I called them and I got it settled down to $8,000. And I gave them all the numbers that they asked for, my routing information, all the stuff from my bank. Oh, no, no. And they removed. Like, you know, they're supposed to, you know, draft it out of my account, the $8,000 and it never moves. So then I called them, it's set there for like two weeks and I called them back and they said that I had a zero balance. And so I was like, okay, and then I got a receipt in the mail saying that I had a zero balance and they wouldn't go after the rest of the money that I owed because we had $8,000 agreement. So then it's set there for another two weeks, nothing happened and then they called me and telling me like I had never even spoke to them. They said that I had a lawsuit sending against me and I owed $17,000. Oh my gosh. They're just, I thought they're good. They're just idiots. Lonnie, they messed up. They clearly got you confused with somebody else. Unfortunately, it sounds like. Well, I do. I did have the $17,000 thing and they might have pulled somebody else's money out of their account. I'm not sure what happened, but it's still setting there and it's still saying that I will lawsuit and I gave them all the routing information again to draft it out of my account, still setting there. So my question is, should I like go take some of that money and go for a higher lawyer? I don't think so. It sounds like I just want to make sure I'm following your story. You got it settled for $8,000. You sent them your bank account for them to clear it. They didn't clear it, but they did send you something that said it was free and clear. Now they're coming back saying, oops, no, it's not free and clear. You actually still owe it. So what I would do is I would get on the phone and I would call several times until I feel like I'm speaking to somebody with a working brain. And when I feel like I am, then I'm going to send them probably a money order for the difference. Yeah, like cashier's chat. Do not give them anymore access to your bank account. Okay. And that way you've taken it into your own hands to make sure it's paid. And then I'd want written receipt again that it's been cleared with the new date on it when it was clear. And yeah. Yeah. So go renegotiate again back down to the 8,000 if you can. And sometimes they they are going to need you to have that amount of money to go ahead and just make the payment. But you said you still have in that account. So what I would do is actually get them to email you like a transcript of your conversation or at least in writing say yes, we are going to settle this for $8,000. So you have it on the front end and then send them the cashier's check and then ask them to make sure that they send you a receipt for after, you know, that they have collected your money. So that's what I would do. I forgot what I did whenever they when we said we settled the deal and asked from my account if it can you do this today? And I said no, not until you send me a piece of paper saying that this will be settled for the 8,000. They sent that. And then after they talked to them, they sent me a receipt saying they're all balanced. And then they're calling back and the guy that does handling my case or whatever is with real arrogant and act like I owe him money personally. Right. Right. Well, but they never took money out of your account. Right. So you haven't lost any money. Correct. Right. Right. So here's having to go back through the hoops again of renegotiating. Even send them a copy of that first, you know, saying, you know, the first deal that you made with them. Yeah, it is. It's an absolute roundabout situation. And it kind of ends up being your part time job, Lonnie, unfortunately, because it is your deal with. Yeah. Yep. So obnoxious. But you did the right thing. They screwed up on their end, which just means you're just going to have this a little bit longer till you fix it again and just keep trying. And honestly, by the end of it all, I bet that your debt, your bad debt has now been so it'll be sold to another company because that collection company is going to sell it off. So maybe you'll get it settled for a little cheaper. Yeah. It's just going to go round and around. And so until it's until it is a done deal, sadly, this is part of the gig of getting out of debt. But you know, I mean, because of your situation and because of what they've chosen to negotiate, what a great thing that 17 went down to eight. I mean, we'll take it, you know, that's a win. And when you do that cashier's check, keep that receipt that you know that you paid them because even if these are bozos, so they may never send you the receipt on their end, but at least you know you did it and you filed that away forever. That's right. All right. Let's go to Pete and Jacksonville, Florida. Hi, Pete. Welcome to the show. Hi, my husband had gone for a pleasure. So you get me. Oh perfect. What's your name I'm going to go with patty patty. Perfect. Thanks patty. How can we help? My husband and I are looking at buying a lake home second home. We are get free. We inherited a large sum of money and we're just wondering if we should pull to pay for the lake home out of that money or if we should borrow money to get a short-term mortgage as to keep our tax burden down. Interesting. How much is the amount that you received in the inheritance? 2.9 million. How much is the lake house? 850. That's okay. Great. So you all guys will have two million left. No, I mean two whole pile. That's just what we know. Oh, that was just the inheritance. Okay. How much does your net worth total? Five million. Good for you guys. And you're wanting to take the mortgage out so that you're not well, what was the thing about the tax bracket? What did you say? We're you would have to take the money out of our pile if our investments to pay for the home, which we can do. But we're just wondering it's going to boost this up into the 24 or more tax bracket. And we're just wondering if we take out a mortgage then maybe we could stay in a lower tax bracket and just pay it off over time. Yeah, well, the amount you would save on taxes is probably going to be smaller than the interest you're going to end up paying on a mortgage over time. Okay. So I mean, I would run those numbers, but no, I mean, I would tell you just pay for it, Patty. Just pay for it. Absolutely. And if you're in that, yeah, I mean, that's because you're going to have if you pull the money out of these investments at any point, you're going to have to pay taxes on them. And so yeah, it's probably going to be a lump sum of it and it's not going to feel great, but also, but also like it's it is what it is. Like there's a part of our life of you know, living in America that I'm like, it it is that that is the bracket and and to play the game with the government and the mortgage companies to try to get around it. Usually at the end of the day, the consumers, the one that ends up paying more. Yeah. Yeah. Well, don't don't. Here's the thing though. It is bittersweet, but it's also it's like mo money, mo problems. It's one of those things where it's like it's a blessing to have this problem because having this problem means you have a bunch of money. And so it's kind of all in the way you look at it. You don't want taxes to to to shield the fact that this is an incredible blessing that you can actually pull $850,000 out of an account and pay for a housing cash. That's the business right there, which is beautiful. Yeah. And just staying debt free the whole time, owning it's not messing with everything. I'm telling you in the long term, just buy it. Just buy the property. You guys have worked hard. You've done so well, Patty, as part of this was an inheritance, but also you guys had some of your own hard earned money, which is wonderful. And this is why you do it for moments like this. So just keep keep moving forward. Get the lake cows. Have fun. Enjoy it. And we all don't care for taxes. Hey, I want to talk to you for a second about love and not love like in Titanic or something. I mean responsible love. The kind of love that moves you to take care of the people closest to you. And one of the most important ways to show that kind of love is by having term life insurance. If you have anyone depending on you, a spouse, kids, anyone, you need term life insurance. Term life insurance gives your family real protection if the unthinkable happens so they can spend their time grieving and not worrying about how the bills are going to get paid. Zander is a broker who works for you, shopping the top companies to find the right coverage options for your needs and your budget. In many cases, there are options available with no medical exam and instant approval. My wife and I had term life insurance through Zander for years long before I worked at Ramsey because we trust them. Getting term life insurance is a way of saying I love you when you can no longer say it yourself. Go to zander.com or call 1-800-356-4282 to find the coverage that fits your family. Welcome back to the Ramsey Show and the Fair One's Credit Union Studio. I'm Rachel Cruz at hosting the salary trade workshop and we are taking your questions at Triple 8-825-225. First up, we have Jessica in New York City. Hi, Jessica. Welcome to the show. Hi guys. Thanks for having me. How are you? Hi, we're doing great. How can we help? Yeah, so I'm just calling. A lot of times I feel like people call and know what you're going to say, but I've gotten myself into a little bit of a pickle. I'll start out with what I'm looking for. Financial advice and how to get back up on my feet or even survive my current situation. So I've been in a four and a half year relationship with a man who makes about $900,000 in health care and I found out about five months ago that he was married. He's been married for seven years and I didn't know this. He claims that he has been afraid of the financial consequences of getting a divorce, but you know actively seeing his wife and then there was me. So he is now in the process of getting a divorce, which is costing him seven figures and alimony. So now I decided to give him a second chance and I'm just struggling with living with the situation, the betrayal and stuff, but also I'm struggling if I were to leave the situation too. I don't know how to get back up on my feet because I move cross country to be with him. I'm four months pregnant and I am taking care of his family and also I filed for bankruptcy last year because I didn't want to enter a marriage with a bunch of baggage and a lot of that debt was after my mom died. I had bought a timeshare and it's about $40,000 and less than learned. So I'm debating whether I should stay and see it through because now we're living paycheck to paycheck with this divorce and just the mental baggage of that and I'm also contemplating leaving the relationship, but where do I start? I used to make 150,000, now I make 30,000 after taxes. So I don't know, I just want some advice on any of the above. Where are you now? Are you still living together? What's the current today situation? So we are still living together as a couple and we have funded the day stuff, but this financial situation and it's not finalized with his previous ex yet through the legal system. So we're living a normal life. I take care of his family rental property. Help me understand that part. When you say you take care of his family, was that a health thing? What does that mean? So parents, siblings, aunts, and uncles, they have a lot of appointments and rental properties and I am the rental manager for seven properties and you work in the family business. And that's what earns you the 30,000? I do not for free. I make 30,000 at a remote job. So you manage seven properties for his family for free? Yes. Girlfriend. All my builder paid for, but yeah. So that's the exchange. If you manage these properties, you live with him and he'll pay for everything. Is that what I'm understanding? I'm not judging. I'm just trying to understand. That's the current situation. I pay my student loans and health insurance. Very small stuff myself, but Jessica, that's what I do. You endanger a girl. You got to get out of this. This is so unhealthy for you financially. It is so unsafe for you because everything hinges and you're feeling that. It's like the golden handcuffs of a relationship, right? That you've built these systems in place where he has so much control over you. And I think that's why you laid it out that way because you're right. It shouldn't stop you, but you are right. When you leave him, you are going to be starting over. That feels really scary. It does. It is, but it doesn't mean that you can't do it. You are a fully grown woman. You are smart. You're capable. There's no reason that you can't go into the world and increase your income from 30K up. You've just proven you can be a property manager. There's nothing capability-wise keeping you from going into the world, standing on your own two feet. Yeah, and I just feel like he, you know, there's this devil and my shoulder telling me that he is still willing to marry me and not sign a prenat, but I almost want to see that through and have him sign a prenat. He was deceptive. He proved that he could be a deceptive person for seven and a half years. That tells me something. He's shown you something about himself. Don't ignore that. even though you experienced it different from what is wife experienced. You had two separate experiences. It was geared towards you. Don't let that make you feel like you've won some prize here. He's been deceptive for seven years. - Yeah, I mean, I had a whole other life. And if you can function in that mentality for seven years for him, and he's not done anything different, right? Gone to Arizona to a rehab center for six months together. Or something, like something that there's, but it doesn't sound like, I mean, it sounds like he is the same person. So from the relational standpoint, I don't know how you trust someone after you find out that he had a wife and kids and stuff, you know? And so that's the relational side. And then Jessica, I mean, and then the baby, what a sweet baby. But man, that adds up for sure, Ellen. - It makes you feel like you have to stay in it. And all of this too. And so, and I don't know what the laws are, but you guys aren't married. And so it's not like there's gonna be necessarily, I think state by state, there may be different ways you can kind of pick through the law to see if there's anything from a common marriage perspective, right, 'cause you guys have been to get anything from him to help with the baby. That would be helpful. But yeah, I would be creating an independent solo life, Jessica, of how you would function out in the real world. And I would start those habits pretty soon, just to start before you actually, unless it's happening tomorrow, start building some skills around you for you to hold yourself up. Do you have family anywhere? - Bear across country. - Where are they? - They don't have them know what's going on. - Are you close in the Midwest? - Okay, are you close with them at all? - Yes, my dad and his side and my aunts and uncles. - Yeah, I call them a lot. - But they don't know about this. - Man, Jessica, I may be going home. - Yeah, I think you do. - With my baby, and I'm gonna start a life. I mean, and I'm very aware of Jay and I set behind this desk, and we say that, and you are where you are, and the consequences of what we say, and the life that you have to build, it takes year. I mean, that is a big ask from us to you of what we would advise you to do. - But I can't let this blind you from what's right. - From what's the reality of the financial comfort, blind you from what you know you have to do. - Yes, and I think Jessica, five years from now, has a better shot at creating a better life as she's dependent upon Jessica than a man who's lied to you for seven years and had another family. (upbeat music) - If you're waiting for rates to drop before you buy a home, here's what nobody tells you. When rates fall, every buyer who's been sitting on the sidelines makes their move at the same time you do. That means more competition, higher prices, bidding wars, all that. That's why I tell people to talk to Churchill Mortgage before they do anything else. Churchill gives you a strategy, so you're not at the mercy of the market. They can show you what you can afford, not just what the bank will approve, and with their certified home buyer program, your financing is completely secured before you shop, which means when rates drop and everyone rushes in, you're already ahead of the crowd. You're not scrambling for pre-approval while the house goes to someone else. My husband and I bought both of our homes with Churchill, and having a real strategy, not just a rate we were waiting for, made us ready when it really mattered. So start your search with Churchill. Click the link in the description or go to Churchill Mortgage.com/Ramsieoffer for an exclusive Ramsey audience offer. Churchill Mortgage.com/Ramsieoffer. (upbeat music) - Next up, we have Katie in Minneapolis. Hi Katie, welcome to the show. - Hi, thank you so much for having me. - Absolutely, how can we help? - I am curious if our family should focus on increasing our down payment enough to make a $550,000 home affordable, or if that would be stretching beyond what we can realistically afford. And I'm also wondering if there's some pride or lifestyle, inflation, influencing what I want versus what we actually need. - Oh, great questions, okay. So how much do you guys have saved for the home now? - Currently, we are working through baby step number two. - Okay. - But we are looking ahead, and it's kind of feeling like the light at the end of the tunnel is not as bright because now I'm looking at the numbers and I can't realistically afford what I actually want. - What do you want? What's the amount of the home that you think would fit your family? - So what I want is roughly a $550,000 home. And we do a lot of hosting. And we started our debt-free journey this past year like in January, we started and we downsize significantly. And I'm itching to get out now. And so my husband, we're a single income family home. And my husband brings home about 103,000 a year. - Okay. - And then- - What hits your account every month, Katie? - Yeah, what hits every month, just after tax number. - Okay, so he actually gets three large bonuses a year. And so we are 400, what, I'm sorry. We are $4,400 weekly. And then, but with his bonus, if I include his bonus amount, that's $8,650 a month. - Total. - Yes, total. - When does he get the bonuses? Is it at the end of the year or how are they paid out? Or do they pay out monthly? - No, they pay out in three large sums within the first six months of the year. - Understood, so you could essentially take that and disperse it throughout the year and kind of get ahead of it like that. Okay, I understand. So we're looking at- - We could do that. - We're looking at when the time comes, assuming his pay is just the same. We are looking for a payment that's no more than 25% of your take home. So if we take the 8,650 and we divide that by four, we don't want to spend any more than $2,162 on this mortgage. If that's the after tax amount. - Right. - Okay, so then- - And- - Go ahead. - I'm trying to see if we just keep our heads down and keep saving for a larger down payment so that we can get the mortgage at a more comfortable amount. If that's a good plan, or if I just really need to real it in. I think you may, I mean, it just depends on where you see your income going because I'm just running the numbers here and they want to pull it up. I've just got you in for a $550,000 mortgage. And right now I just guess I put in 300,000 down. Let's just pretend 15 year fixed. Let's keep it at 6.5 even though mortgage rates have been moving lately. And that puts you at everything all in. And this is just a guess on property taxes and homeowner insurance. But that puts them Rachel at 2,907. So we're already above where you want to be and we've already put 300,000 down. So there's part of me that it's not impossible. That's a very long stretch of time. I think I'd rather adjust my expectations to get into something. - Yes, I mean, on a $100,000 income, Katie, I mean, for what you can afford month to month, to enjoy life too. Like some of this is, yes, I'm making sure that there's enough other money to invest in all of it. But it's also just to be able to live comfortably and not stress every single month that you don't have any money to take the kids to target real quick to get something. - Yeah. - You know what I mean? Just to have like margin to live life. So yeah, I think the expectation of the house is sadly probably gonna have to come down. - But think about this as a trade. And this is what's probably either going to give you some peace about it or cause you to switch lanes. You have chosen that value for you is to be a stay at home mom. And so because of that, we've got one income coming in and in America right now, the cost of living is very high. And so when you made that choice to stay home, which is great, you made that your number one priority financially, that means that everything else kind of bows at that, do you see what I'm saying? And so, if you look at that guy. you go, "You know what, I'm getting what I really wanted out of life because of that, I'm happy to, you know, scale back my home dreams. You may be cool with that." Or it might cause you to re-look at that and go, "Okay, maybe I only want to stay at home for the first six years, and then I want to go back to work so that I can have a little bit of both of these." Or maybe you go, "Today, I want to go back to it," right? Looking at all of this together and looking at it through values and priorities will help you to know what's most important to you. Is this your first home? Katie? We previously sold a home, so we wouldn't qualify for first home buyer, anything like that. But my kids are next year, my youngest will be going to school full-time, so we're at a crossroads right now, and I want to go back to work, but I've also been out of the workforce for eight and a half years, so we're at a pivotal point right now, trying to figure out exactly where we're going and figuring out how old are you guys? My husband is 35 and I'm 28. 28, okay, how old are the kids? 8 and 4. Okay, so great. And we've paid off $50,000 this year, and we'll be out of debt in by July. Excellent. I think you were. We'll see $2,000 left. Well done, Katie, but see, listen, if you did $50,000 in a year, and if you guys did that for two years, saved $100,000, right, you could maybe find, I don't have the calculator in front of me right now, but you know, you could do a $450,000 house, right, with $100,000. I don't know, I just wonder if the amount you guys can save in three years, right, even $150,000. I don't know, I'm just wondering what you guys can continue to sacrifice. That's work. Because at home, you know, it is such a long-term play, so I almost would take another year extra of my timeline to save a big chunk for a down payment to make it work, right? Like that, to me, that would be, that would be worth it. Yeah, if you said what Rachel said, $350,000, or maybe a little bit more assuming you guys' income goes up, and you save $150,000, well, then you're right at it. And again, assuming that his income goes up, it sounds like he's got some trajectory. It could be a $400,000 house, you know. But it's tough. Yeah, our timeline is that we should have a $51,000 down payment by July of 2028. So if we keep our heads down, we could, we could really get a large chunk. I'm not sure if that's worth it, or if, like I said before, if it's like a pride thing, or I just need to really dial it in. I don't think you have a choice. Because you cannot do the $550,000 house. So that choice is made for you. You simply cannot afford it. So I think the choice is made for you. And I do think if you lower, slightly lower the expectation of the home, allow that over time, over the next three and a half years, as you save, his income is going to go up, possibly you'll go back to work already. That's looking a lot better for you, Kate, because you're going to be able to afford more home that way, both of those two things happening. So I would approach this as, okay, the next three to four years, that time is going to pass regardless. I'm going to do the best that I can with this time. We're going to save up as much money as we can, because the day is going to come. If you keep doing that, you're going to pile up money and pile up money, and the day is going to come when you're going to be able to buy something. And when you buy it, hopefully, you know, you have it for quite a while, right? And so that's it. It's like kind of that short term sacrifice to get what you want for a longer term is worth it to me. So I don't know if that helps, Katie, but oh, I'm, it's a frustrating, it's a frustrating time. We get it. But also, it's just adjusting expectations some and probably having to save a little bit longer. Hey, guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And healthcare is one of the biggest expenses in most family's budgets. And that is why I recommend that you check out Christian healthcare ministries. CHM isn't insurance. It's a health cost sharing ministry. That means members help pay one another's medical bills. And they've been serving Christians since 1981. CHM programs start at just a hundred and fifteen dollars a month. And here's why that matters. If you are paying more than you need to for healthcare, that money could be going toward paying off debt, building your emergency fund or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now, new members can receive a 50% credit towards their first month of membership. Go to CHministries.org/budget and use promo code Ramsey. That's CHministries.org/budget and promo code Ramsey. Everyone needs insurance, but it can be really hard to find a pro who isn't just looking to make money. And to find agents that actually know their stuff and so Ramsey trusted insurance pros are vetted and coached to make sure that they're market experts who have your best interest at heart. So make sure to RamseySolutions.com/coverage to find the type of insurance that you're looking for and connect with a Ramsey trusted agent there. All right, let's go to Joel and he's in Canada. Hi, Joel. Welcome to the show. Hey, how's your going today? Hi, you were doing great. How can we help? So, I run a concrete business and I've never took a loan in my life. I bought my house, Lado. I've never took a car. Wow. That's awesome. Well done. Thank you. My question though is right now, I have about $200,000 a year gross profit, but I know I could double that or more if I start playing a debt game and take a line of credit. So all these big jobs I financially can't do from paying my labors for six months plus sometimes and financing on materials. So do you think it's worth taking extra risk to expand my company and play that game? Do you think it's worth it? Personally, yes, but it's putting a lot of risk on top. Yeah. And I think that's the that's the biggest factor and obviously it's the unknown and the way we coach small businesses here through Entry Leadership is really walking through a process of where your business is, you know, where you own it outright and you're not having to play the debt game because when banks and payments and all of that enter into your life, Joel, you are you're playing a different game at that point and some people think it's worth it and they they they figure it out and that's what they want to do and and it's what they do and then other people try to play that game and their entire life is full of stress because they've out leveraged themselves. They jumped ahead and had some expectations that never really came through that they thought because they were supposed to and all the numbers worked and everything was supposed to work and the reality is it didn'ts and so now they've put themselves in a situation that they could have easily avoided by going slower and going slow for an entrepreneur is not a very fun thing. I know because you get energy from the growth and you're seeing all the success and all of it and you're like why not just magnify it and I mean the the moment you do is the moment suddenly your business is in a completely different game and and it's not one that we recommend people playing. There's just more peace and more control to go slower and move at the speed of cash that gives you a quality of life that is so much better and and it's not that you can't be successful it may take you a little bit longer but it's not saying that you can never get there and there may be some things you always will say no to and there's such a ramsie that we could go and buy this or whatever and it's like no if we don't have the money we're not we're not going to have to say no we have to figure out a different path a different way yeah I do wonder Joel what is it and let me see if I can answer this ask this question clearly what is the increase that you would need like monthly and operating costs to do what it is that you're trying to do it's hard to say the exact mouthpiece is different from jobs and jobs but a lot of these jobs if I'm quoting them I'd need to have to find that probably $200,000 so I'm wondering if this is something where we can go we need like a replenishable stash of money that is like kind of therefore when opportunities come we can go over there and say oh this job is worth it if we do it there's going to be such a gain from it and you're kind of so over the next however long it's takes you, you're working to kind of build up this money that's there to be able to go out and do other work. And if you're able to grow slowly doing it that way. Does that make sense? 'Cause it's almost like you're saving, it's almost like you have savings that's ready for when these great opportunities come up that you can go do them. And then when you do them, you're replenishing that money plus you've earned money, right? Something like that. Okay, so right now I got a good amount in the bank, but I always like to have a certain amount that's to have that comfort zone. - Right, how much is in the bank right now? - Around a hundred thousand. - And I'm saying, what if you went well above that and you had the money to do the work when it came? Like you had the money to explore different opportunities in cash when they come. - Yeah, that's definitely an option that this take me longer to build up to that point. - Exactly. And that's kind of what I wanted to like put legs to what Rachel was saying when we're saying build slowly. It's not to say that this is the business. It never changes, but you're saving up the money to be able to do more over time versus you just taking out the $200,000 loan to do it. Let's save up 200,000 over time in the business. Now we can afford to do more of these things that come our way as opportunities. - Yeah, and you know, the calls we get Jade on the show of small business loans and things that go awry. And it's like, you know, I got $200,000 in the business one under. I'm not saying it's gonna happen to you at all, but I mean, it's just this element of like, what are you gonna choose? Are you gonna choose a slower road? But that's full of peace and autonomy eventually of over what you need in the business. And if you need to make a pivot, you have the ability to because you own it all or is it that I have to be making payments and now I'm living a life where I'm attached to this banker and what is expected. And it's just a totally, it's a different game. And it's one that we teach people to get out of and steer away from then head right into. - Yeah, absolutely. And I mean, there's something to be said for. His whole life has been built on cash and look how successful he's been. - Yes. - When you see like best practices that are working for you, like keep doing that. - Yes, that's right, absolutely. Stay the course. All right, let's go to Christine and Connecticut. - Hi, welcome to the show. - Hi, Jaden Rachel, how are you? - We're doing great, how can we help? - So I remember that my parents never mentioned about having life insurance the minute we get married. But I recently, well, recently I got off from this life insurance because it seems too good to be true. But the problem is, I don't know if I did the right decision and there was the national life group that I was in, I am new to listening to Ramsey. So I'm like learning and I guess you can say I am a baby step two. I mean, I am trying to pay off all my loans 'cause I'm tired of it. - Good for you. What kind of insurance did you get? Do you say life, what kind of life insurance? Whole life? - Yeah, it's like the, what is it? Life insurance about the, when your spouse dies and all that, the death things, hold on. Yeah, 'cause they said that I got pre-approved for $250,000. But I kind of seem like it's. - Term life insurance, Christine, or is it like universal life or that is an index universal life? Okay, so it's a type of whole life policy. Okay, and so you got that and how much, how much are you paying per month for this? - So since I started with an Emma husband, we were doing 200 and 200, so it's 400 and total month. - Wow, that's a lot. - Yep, so what yes it is. - So, Christine, what this is is they basically pair some type of this investment element to the insurance, okay? So rule of thumb to remember is always keep your insurance and your investment's separate. The moment they combine them in a product like this, you get a crappy rate of return and you pay a lot for not a lot, I mean, not a lot of coverage. - 400 dollars in and you're only getting 250,000 dollars versus if you did term life, and let's say you got a 20 year policy, depending on your health and age and everything, it's very inexpensive. I mean, a fourth of what we're talking about here. - For way more coverage. - Way more coverage, 'cause it's just insurance. They're not trying to play this investment game on the side. - So, what I would do is, do you guys have kids? - No, we don't have kids. - Okay, so what I would do, Christine, is I would cancel the policy and you may have to pay some fees and all of it to get out of it, cancel it. And then I want you to go to Zander Insurance. So go to zander.com and look up a term, a term life insurance policy, okay? Term is your key 20 year and you can do that. Now, if you had kids, I'd say get the term first, then cancel the universal, but at this point, I wouldn't worry about it 'cause there's no kids involved. But I would do it all back to back. So get life insurance. You guys need life insurance. But man, get out of this whole life 'cause it is a crappy, crappy product. (upbeat music) - Hey guys, George Campbell here. There are a lot of things you probably shouldn't ignore. Your check engine light, that weird smell in your fridge, the smoke detector that's been beeping for six days, and maybe most importantly, your phone bill. The things we ignore have a funny way of costing us the most. And your phone carrier is counting on you, ignoring that overpriced bill month after month so they can keep charging you more and more. But that's not the case with Boost Mobile. You don't need to keep overpaying when you can pay just 25 bucks a month for Boost Mobile's unlimited plan. 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That's the letter Why-R-E-F-Y.com/ramsie may not be available in all states. - All right. Today's question comes from Gina in North Carolina. She says, at what point does it make financial sense to give up our 3% mortgage rate and move? We're considering moving because the cost of the HOA is $400 a month. It is doubled since we moved here five years ago and I anticipate it will continue to do so. We would be moving to a home with a new mortgage interest rate of over 6%. I know we're building equity if we stay, but I feel like we can never really pay off our house if we continue to live in our current neighborhood. - Okay, so this is a good question and I'm thinking about what you're thinking about Gina. HOAs, yeah, there is a unknown there and I feel you're paying on that. So it's gone up $250. It started at $250. Now you're at $400 or it started at $200. Now you're at $400. I would run some numbers on this though because if you move and now you're at 6%, you might be paying that same amount basically. Do you see what I'm saying? You're almost like just moving it from one area to another area, but either way, you're paying the $200. - And rates just went back, went up. - Yes, we did. - So we don't, yeah, so playing the rate game. - Yes. - And insurance could cause your payment to go up. - Like anything, that's right. - That's right. - All those things have the ability to adjust over time, which is why we're such sticklers about that 25% rule to give you breathing room to be able to absorb some of this. And the hope is that you're moving forward in the baby steps and you can absorb it in a better way as you go further throughout the baby steps as you're paying off your mortgage. - So I don't have all the details of our numbers, but just looking at this, I'm like, I would not move from 30% to 6% because of a $200 change in your budget. - That's right, that's right, 100%. Unless you were wanting to move anyways, and you had the money to do it with the new interest rate of the payment and you wanted to, don't wait up, like the best time to buy a home is when you are ready to buy a home. So if you guys are wanting to move and you have the money for it, but you're just like, oh man, I don't want to give up the rate, that's what a lot of people, that people are just like, I don't want to give up the rate, so I'm not going to move, which is fine, totally understandable. But if you have the ability to and you want to, that's the part of being wise with your money as you get to make these decisions. But if it's only because of the $200 HOA fee, at that point, I wouldn't. And you can also too look at things going on in your neighborhood that'll speak to why the rates may have gone up in that way and kind of projected, it's probably going to be like this for a while or do you know what I mean? You can sit down and if you dare attend one of the HOA meetings and find out it's going on over there. But unless for some reason the 3% house that you already have is like stretching you guys to the gills and you're like this just really threw it over the edge. But then you couldn't look for it is 6% anyway. So 100%. All right, let's go to Grace and Las Vegas, Nevada. Hi Grace, welcome to the show. Hi, thanks Rachel and Jade. Absolutely. This is Grace, right? Yes. Okay, perfect. Okay, good. Sorry, I think I may hit a different button. Sorry to the booth. Okay. Yeah, how can we help? So question about inheritance. So I don't know how direct I need to be with my dad and asking about our inheritance. And long story short, my dad has four kids. The three, you know, grew up in the household. I did not. You know, I grew up in a safe with my mom. So I've never been entitled to any of that stuff and it's fine, right? I've made my own way. I told the screener, I'm a baby step's millionaire. Thanks to you guys. Wow. Thank you. So I was only led to the leave. Sorry if I get emotional here. But it was hundreds of thousands of dollars, which I don't want to fight for, right? Like I don't want to fight for, you know, like 50k. It's not going to change my life. Anyway, I got a phone call this week and it might be more in the like the millions of dollars that this inheritance might be. And anyway, I'm just like feeling conflicted because, you know, two of my siblings are trying to get me out of the wheel. You know, my dad's starting to get dementia. But I guess as the little fans, I'm supposed to get the house and some money. So again, like I was always of the camp of I'm not fighting for this. Like it's not not something I expect. You know, at the time I said it's not going to change my life. But now that it's, I don't know, a life changing number. I don't know. Am I being greedy? Like should I pursue that? Like I just, I'm struggling. Like I couldn't even sleep last night trying to figure out what I should do next. You know, I do have any relationship with the siblings at all. I do with one. The oldest one has kind of been on my side of like, hey, this is about fairness. Like it doesn't matter that, you know, she's not like she's our sister. So, so anyway, yeah. So just with one, the other two, it's like, friendly, but, you know, I mean, they have put me in my place before of, you know, you're like that midlife and a stage. Gosh. See, and that's the past grace. I hate all of this for you so much. Like it sounds like there's a lot of emotions. It sounds like there's a lot of water under this bridge that has gone on. And I feel like that's what's clouding this discussion. And I get it. I'm not saying you wouldn't be clouded by that because that's, there's a lot there just in the few things that you've told us. But what I would want to keep first and foremost is what you said, which is you were going throughout life and you were fine with your baby steps millionaire doing your thing. And at the end of the day, whatever happens, I would just keep in mind. It's not yours nor your siblings money at this point. It's your dad's money and he's going to make a plan that he sees fit. Now, I do want to know whatever it is like these bits and pieces that you guys do know about the will. How do you know that is that from your dad's mouth? Was there at one point a reading of the will? Or is this just gibber jabber from the family? It's from my, my oldest sibling. So I got a call, like I said, and she was, sorry, I haven't getting emotional. But again, she said, so anyway, there's a lot of properties involved, right? And pretty much they're getting the lion's share. And it's basically how does she know? How does she know? Because she knows what all it's worth. She kind of had her hand in all these things. She helped him make the will. No, she, I mean, she is, she knows what's in it basically. She didn't make it, but she said, yes, basically, you know, you're supposed to get this worth home. Plus, you know, whatever is in the bank and they're trying to make it so you don't get the home. And, you know, it basically goes to the grandkids, which I don't hate that either, right? I just wouldn't bet on what she's saying. I think I would go straight to your dad. And I'd say dad talked to your health is going, and we all know that. But you need to, I would love if you would speak to us about what your final wishes are going to be with the property so that we're hearing it directly from you. And with the spirit of what you have in mind behind it, you know our family is messed up. And it's going to mean a lot to me to hear your wishes from you versus one of my siblings. That's all you can ask for. Okay. So I just addressed this straight on. How do you bring that conversation up, though? Without entitlement. Yeah, a lot of gratitude and humility. But just say, dad, this is, this is starting to weigh on me. And because it's because it's getting dragged so deeply and it's starting to feel really personal. And I don't want it to be, I hate that it is. But this is what I'm, this is what I'm feeling. And I just think it's going to be helpful and best for you dad. You've worked really hard. You have a lot to show for it. And I want your wishes to be what they are. And I think that it is, it's fair for all of us to hear those together. Just for your legacy to be able to be lived out the way you want it to be when you're not here anymore. And yeah, I mean, I feel like that, I feel like that is totally fair. And I would also say too grace at the end of the day. Does it, it feels, I think it's, yes, is the amount of money maybe becoming more motivating for you to be like, whoa, hold on. But also what can easily be attached to someone's value to an amount of money. And grace, regardless of if you get this money or not, it's right. You are valuable. That you're not some mistake, midlife mistake, like what they're naming. Because it can easily going to start to feel like if this money does not come to you, you have less value because of that. And I would detach that from a spiritual element as fast as possible because it's just not true. Will it be heartbreaking? Absolutely, but your value is still there. If you own a business, you know what a pain it is to find the right people. You don't just want a warm body who can fulfill the basic job requirements. You want to go get her who actually wants the job. Somebody bought in from day one, but finding that someone buried in your inbox with 500 other applications, that makes finding a needle in a haystack sound simple, which is why I love what Zipper Cruder is doing for small businesses. Zipper Cruder automatically puts the most qualified, most interested candidates at the top of your list with their new feature that lets candidates tell you in their own words why they want the role. So instead of playing resume roulette, you're interviewing the right people faster. And at Ramsey Solutions, we only hire people who believe in our mission because someone who's genuinely bought in doesn't just show up to collect a paycheck. They bring everything they've got every day. Zipper Cruder helps you find that person faster, and they make it easy for amazing candidates to get your attention. In fact, 4 out of 5 employers who post on Zipper Cruder get a quality candidate within the first day. So try it for free today at zipracruder.com/ramsey or click the link in the description that zipracruder.com/ramsey. Meet your match on Zipper Cruder. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. We're taking your calls at AAA8255225. Let's go to Rachel in Riverside, California. Hi, Rachel, welcome to the show. Hi. Um, are we just asking a question? Yes, yeah. What can we help you today? Okay, so I'm 54 years old and then I've been a little for about six years. Prior to my husband passing away, I was a Seattle mom for 17 years. So I immediately got a job and I inherited his IRA. I've been working but works really slowed up. So I'm trying to think about doing a 72T and start withdrawing some of the money that I have. Okay. And you're 54. Yeah. So not quite to that 59 and a half to avoid the penalty. So what are you doing for work now? Right now I'm still trying to do the real estate but I've taken some time off because it's just been really stressful. I jumped into work so quickly after he passed away and now I feel like it's hitting me a little harder. Yeah. Are you there Rachel kind of scared? Yeah, because I was kind of scared when he passed away. For sure. So I just immediately started working. Now I have a pretty big IRA. So yeah, why are you thinking you need to, I mean if you've got the job now, why are you thinking you need to start doing this? Okay, but what kind of work is it? Real estate. Okay. So I would go more along the lines of is there other work I can do versus trying to draw from this retirement earlier through a 72T? Well, I didn't have a lot of experience before we got married and then I didn't work for 17 years. How much is in that account? almost one point eight million one point eight okay and how How much are you needing to have per month to live on to feel good and secure? Just a couple thousand dollars a month and I have money in my savings but I need to deplete that. Is your savings, is it like in a high yield savings account or is it your IRA that you're talking about? How much is in there? About 200,000. Okay. Okay. Because listen Rich, I'm just trying to figure out. And I paid off my house. Oh my gosh. That's great. I'm just wondering how we can fill the next five years or so, yes. And if you, you know, I mean, like if you pulled two thousand out every, I guess it'd be every month is what you're saying that you need. Yeah. Yeah. So, I mean, I'm just thinking, because I mean if you did that and you pulled two thousand out, I mean, it's going to be over a hundred thousand will be gone from that savings. Which is not the end of the world, you got 1.8 cent in IRA that you can live off of too, right? So, it's not. Right. It's not the end of the world. I'm just wondering, can you supplement instead of paying, you know, pulling two thousand out of a month? Yeah, kind of screwed up. I had gotten some job offers and then I turned them down because real estate was really booming. Yeah. That's okay. And now it's like, well, do I try again and put it out, put it out there again and try to get back? Right. So, I think you are a lot more competent and marketable than you realize. I mean, you've been doing real estate in California. You're, I mean, I think you have a lot to offer to something and again, you're not needing this massive $300,000 here job that you're trying to look from corporate that you're trying to replace. Thank God. Because you've done so well with your money, though, that gives you the freedom to feel like, okay, I don't need to take this. I don't need to be looking for this needle in a haystack type job. I just need something that I enjoy. I mean, it'd be amazing like to find something that you love, Rachel, that you could plug into or an environment that you love. I don't know if there's, you know, a great church and you work part-time there, part-time somewhere else or maybe there's, I don't know, I'm just saying like a receptionist at a dentist office nearby. Right. And you know what I mean? Like, you find a group of good people somewhere that's, it's an uplifting environment for you. And you're not, you're not having to make too much money. It's just supplementing. No. Some of this. Yeah. It's just, I'm pulling from my pension that I had before. Okay. It's just a small amount, but I am able to pull on that from a job I had prior to getting married. How much it goes in a month for that? Just like $700. Oh, okay. Get it out. Get it out. But your need, you are going to need some money to, I mean, realistically, how much extra you said a couple of thousand, be more specific for me. Um, well, I, I am writing out of room. So I'm getting 1500 for that. And. Okay. So I figured my bills, because I don't have a mortgage. My bills are really minimal. I don't have any debt at all. Yeah. What does it cost you every month to just operate your life? About $3,400. $3,400. $3,400. And then three to four hundred dollars? No, Rachel. $3,400. $3,400. I was like, Rachel. Rachel. And so if you've got the 1500 from the room rental, the 700 from the pension, and then what, I mean, obviously real estate is slow. But I mean, could we close that gap pretty, I mean, you're more than halfway there. I could, but I just the stress of real estate has been so much for me. Yeah. I'm not saying it has to be real estate, but I do want to lay this out. Like, if you were to draw from this early, doing what you said, if you did do a 72T, it's not just I get to pick the amount that I want and I can do it for a limited time. The IRS is going to calculate, like the government's going to calculate what works for you and you're locked into that. You're going to be locked in for at least five years. So if something does change, you can't increase it, you can't decrease it, you're locked in. And if for some reason that calculation, something changes in your life and that calculation no longer works, you could, they could go back and say, well, actually there's a 10% penalty here. And actually that wasn't the right calculation. So it's kind of a precarious thing. So I would pull out of the high yield if you have to do anything. I would leave the IRA alone and the high yield is where I would pull some money if I need to. But I'm thinking about this too, Rachel, of just, you know, you're 54. I think just having a place to go, waking up in the morning, having a purpose, having something that you're going to is really good. It's like a very healthy thing. So I feel like you could find something and make $2000 a month, you know, doing that. And maybe it's, and it's part time. That's not a full time job. That's part time. But like two to three days a week, you got to place your going, you're making some money. And I just think that's a, I think that's a good mental health play for you. And then I'm totally okay if you look up in three years and you're like, you know what? I'm going to retire and go be with my kids over here or whatever, you know, and you got two years that you got to pull from the high yield savings count to that. You can do that. You have the margin to do it. But I just think it's good for you to, to go find something with purpose in your life. Yeah, I guess I'm just scared because I haven't worked outside of, you know, I haven't had much work experience. Do you have kids? They're older. They're all grown up. Okay. Where do they live? To live here. And then the other, um, most of me and the other live in Texas. Okay. Right. Yeah. I mean, well, what do you love to do, Rachel? What do you do? Do you have a hobby or something that you just love? I used to. I don't know anymore. Okay. I used to volunteer a lot, but I haven't really been doing that. Yeah. Yeah. I mean, honestly, two thousand, I'm like, you could work at the library, right? You don't even, honestly. Just just anything that you're out with people, you're, you're making some pro-activeness in your life and making some money. I think it's good. Um, you know, Rachel, if you hold on the line, Christian, it's going to pick up and we're going to send you King Coleman's book, find the work you're wired to do. And again, I'm not saying you have to have a full-time career by any means, but let something, let some creativity kind of jog your minds and, you know, there could be some great things in your area that you plug into. You get paid a little bit, which sustains your life and, and it's a beautiful thing. Yeah. Hey, it's Dave Ramsey. If you or someone you know owns a small business, listen up. Even if you could build the kind of business you'd be proud to hand down to your kids. Over 30 years, I've been able to build Ramsey Solutions into a business that's going to be a blessing for my kids. I'll show you how to do the same thing at Entry Leadership Master Series November 8th through the 13th. During this five-day conference, you'll get my strategies for building a winning business that outlasts you. Visit RamseySolutions.com/MasterSeries for tickets or click the link in the show notes. When it comes to looking at your money and your lifestyle, even just like with our last caller, knowing where your money is going is so crucial and every dollar is an amazing app to help you with that, not only is it a great budgeting tool in it, but also just your overall financial picture and the road map of how to get you to point A to point B. It is there to help you and so every dollar is, it's one of my go-to apps every day. I mean, I'm in there almost every day, tracking transactions and looking at everything and so it really does have an amazing way to walk right beside you when it comes to your money. If you want to find some hidden margin and take control of your money, make sure to check out every dollar for free in the App Store or Google Play. All right. We got Julian in Omaha, Nebraska. Hi. Welcome to the show. Hey. How's it going? Doing great. How can we help? Okay. Yeah. We're looking for some guidance about saving for college, first investing in a Roth IRA. Okay. Is it for you or for a family member? This is for me. So I'm 17 right now and turned 18 in two months. Okay. I just started working at a bank and basically they have a pretty good deal for me so that every six percent that I contribute to a Roth retirement account, they'll match it with for 5% and I'm immediately invested. I'm also going to be graduating in May with my associates here in business. And I want to go to college after that in state. I think I'll be able to get a lot of scholarships and my parents will help. So my goal is to graduate with little to zero debt, but I'm not really 100% sure about that and I will work during college. Do you know what college will cost each semester? So I was, yeah, a per semester, it was about 14,000 because per year is 28. Okay. Basically the figure price, I think we can probably work it down a lot from there. So 28 per year, that's 2,000 or so, a little over 2,000 a month. Do you see that? see a plan for that. Cash flowing out. Yeah, um, the FAFSA opens tomorrow, so I was going to fill out out. I think my main goal is to just work hard and get a lot of scholarships and I think my parents will cover maybe room and board. I'm not confirmed about that yet. Um, but I think I feel like with my ACT score in GPA and me going to like an instate college for only two years instead of four, I was just kind of thinking why like my student aid wouldn't need to be as much for my overall cost. Sure. Yeah, I mean, I think your your mindset is perfect in the sense of I'm going to be applying for scholarships and grants. One little asterisk though the FAFSA can be very confusing and some people are signing up for loans thinking their scholarships. I read the fine print, be extra extra careful. Okay. I would have you're such a mature kid. I'm like, oh my god. And I'm going to say kid, young man, very, mature. And I think your parents, I mean, they obviously know you well. You're you're their kid. And I think sitting down with them this weekend even and saying, hey, mom, that I'm planning out my college life. Yep. I would love to know. Just, um, and, you know, with zero expectation, but I just want to know the plan for college on your end if there is one just because I'm planning so that you know so that it's not kind of, I think they're going to do this. They may, they may not get a kind of a solid number from them. And then from there, start, yeah, filling out scholarships and grants, see what you get, you can work. And I think you at 100% can work your way through now. The prospect of of what the, the Roth is probably a Roth 401k at the bank. I'm assuming because they're doing a match. And that's a, that's a great deal. But I, I would not do any kind of long-term investment right now. I would be concentrating on investing in yourself. And that is getting yourself through college debt free. And there is plenty of time to invest and build wealth. I promise you, you are going to be fine. You know, if you didn't do this for two years, you are going to have millions and millions of dollars at retirement. I just have a feeling that you're going to start early and it's going to be wonderful. But I want you to get, I want your number one goal to be to get through school debt free because that will set you up then to be able to go straight into investing after college and not have to go backwards and pay off debt. Yeah, because to your point there is going to be the 28 per year. It's just face value there. You might need a car. You might need an apartment. There's going to be cost of living. And then right after school, what are you going to be getting into? You'll need to, you know, so having money, yeah, if you have extra money saving it, just in a high yield versus trying to invest it. So you've got that liquidity of getting to that money when you need it. Yeah, so I was going to ask like, so you think I should just get cash for college, not touch like the the rock match at all. And then still for my college savings account. Do you think I should save it all in like a high yield savings or right now everything and just like a basic savings. Yes, I would move it to a high yield savings. You can check out our friends at Fairwinds Credit Union. They have, you can do up to 10 high yield savings accounts with them and with the smart bundles. So check that out if you go to fairwinds.org/ramz. And open up that. I think that's a great starting place. And yeah, because if you put anything into a Roth like a 401k or an IRA, you can't touch it till 59 and a half anyways. So I want that cash to be available. And you'll get around, I mean, it should be around 3% now. Even a little, maybe I'm not sure I haven't checked rates, but even a little bit more this week, everything's kind of been crazy. So you'll get much more in a high yield, even 3% more, you know, then basically less than a percent in a traditional savings. Yeah. Okay. Well, perfect. That mainly answers my question. Awesome. Well done. Gosh. I love how he and his mind works. Smart cat. I know. Alright, we got a lane in Sacramento. Hi. Welcome to the show. Hi, Jayden Rachel. How are you doing today? We're doing great. How can we help? Good to hear. So I have a quick question. We, my wife and I, we are currently on baby step two and haven't mapped out to where we'll be paid off within 18 months. Great. Congratulations. We intend. Thank you so much. Shortly after that, we intend to list our home and then it's a three story count home. We have a kid and a large dog looking to expand the family so you want to move into a single story. And so our question is, as we're paying off our debt, are we closing our accounts if we intend on, you know, purchasing a home right around the same time that will be debt free or is that going to hurt us for them, you know, because we wouldn't be able to do the manual underwriting process at that time. That's a really good question. The credit cards, that's the end of all consumer debt. There's nothing else open. Correct. Yeah, we don't have, I mean, in the 18 months, we'll have paid off the student loan as well. It's just one single loan and I think it's totaling like six or seven thousand. Okay, and all accounts would be closed because what I'm getting at is what I'm getting at and we can work backwards is your credit score, it usually takes like six to eight months to roll the zero. And that is making sure every account is closed. There's no balance anywhere. If you have a random credit card open somewhere, it's not going to roll the zero. So that's kind of the game you're playing. You want to make sure that everything is closed so that that has the ability to happen. And then from there, you would be able to do manual underwriting. Yeah, because it has to be undetermined to that credit score. So they're basically the credit score can't exist. Like what you're saying, like you know this is because you mentioned it in the beginning of the call to do manual underwriting, but it takes it's going to take yeah, probably six to eight months to do that. So it may pause your plan to move for about six months. But at the end of the day, honestly, that is that is worth it. And it's going to probably take you guys a little bit to save up an emergency fund and down payment, you know, and you may have equity that you're rolling over to, but you could use that six months to pile up a lot of cash to have for a bigger down payment and an emergency fund. So by the time it all is said and done, with the baby steps, by the time you get to three B, you should be good to go. I mean, how much equity do you guys have in that condo? Um, I mean, at this time, the neighborhood that it we would break even if you know, okay, so you do need to say for a down payment. Well, in that, that affects what we're saying because I was, I don't know why I was thinking that you're renting right now. Your credit score is going to remain there because you have a mortgage attached to it. That's what I was, that's really where I was getting it. I was like, you know, we can close the account, no problem because it's not going to go to zero. I mean, yeah, yeah, yeah, it's not going to go to zero. So what I would do, just go ahead and pay off the cards. It's not going to, it's not going to take your credit in the way that you think because you have such a major asset on there, your mortgage that you're paying on time every month. Um, you should have no problem in the world moving from that. My husband and I had a mortgage. It was the only thing we had when we moved here. We got another mortgage. And so it was no problem. If you're paying your payment on time, you'll be fine. Yep. But congrats on the progress, you guys. Well done. Yeah. Yeah. Exciting. 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 every dollar budgeting app a game changer. With every dollar, 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 money are we talking? Well, the average every dollar 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 every dollar for free and start saving more money right now. So one thing we love to see is the comment section. Sometimes we venture in at Jade, sometimes we don't. At your own risk. At our own risk as the hosts of this show. But we do love to see you guys talk about it and talk through the calls and all of it. The engagement is part of the fun and all of this. So we love it. So make sure you're subscribing to the channels. Make sure you are commenting and yeah, get in there. Because I think it's a fun element of it can be the, it can be a negative part of the internet for sure. But it can also be a positive part. And where you're in and collars, we see some. You know, they're like cheering on other people. And it's great. So get in there and engage there on especially with YouTube. And even you can follow me and Jade on all social media's TikTok and Instagram and Facebook and all of it. And I'm definitely in those comments. We rest assured. We see those. We can see those. All right, let's go to Melissa in Tampa, Florida. Hi, Melissa, welcome to the show. Hi, thanks for having me. Absolutely. How can we help? I just wondered if you had any guidance or advice on how I can talk to my dad about planning for the future, specifically why he should put his assets into a trust versus just leaving me with a will. I've tried to have conversations a little time in the past, but I always, it always feels awkward, you know, and I kind of feel like, I don't want him to think that I feel entitled to it, or you know what I mean? I just feel like I'm comfortable talking to you. - For you, what's the difference? What do you see the push for a trust versus a will? Does he have a larger state? - Yeah, he does. I mean, in my mind, he does, like to me, he does. I don't exactly know the numbers. - What would you guess? - He has at least a couple of millions. I mean, I know his house alone is worth close to a million, and it's completely paid off. He has multiple multi-unit rental properties that he borrowed against his 401(k) when he was younger, and so those are now paid off. So he was able to retire, you know, in his early 60s, and it's our they know, he doesn't really have to touch his retirement. He just lives off of the income from the rentals. So, does he, you know, I'm an only child, okay? - I'm just literally child. - 'Cause a will can be sufficient enough. I'm curious why that's not good. Like, what you're seeing, is like, he really needs to do a trust versus a will. I'm just curious what you're seeing. - Yeah, I just heard like, I have a couple of financial advisors like in other parts of my family, and they're always just said, like, you don't wanna go through probate, and, you know, the government's gonna take, you know, 30% of the money of your money, and it's just a hassle, and it's just all these things. But then-- - I mean, if I were in your shoes, the thing I'd be worried about, for me, is if you had like a minor, like if you had a young child, and he was intending to leave a large sum that he would get at 18. Like, those are the things that I'd want to say, instead of just willing him this money, that he receives at 18. Can we do a trust where it pays out a more reasonable time? Those are the things I'd be thinking about. - Okay. - But if that's not part of this, honestly, I don't see why he couldn't have a will. I mean, yes, it will go through probate, but this state won't decide. The will will decide. It doesn't take 30%, where are they getting that number from? - Okay. - I don't know. - No, I don't think, Melissa, I don't think-- I don't think it's anywhere near 30%, I don't think so either. - Okay, so they're maybe just like exaggerating with me, but yeah, I think so. - Well, I mean, my concern, he does have a will now. I will say that, is that I've been trying to have this conversation with him for probably 10 years. Ever since I started working in healthcare, I saw a lot of things happen to my patients that I went to both of my parents who were separate and said, "Please get stuff in writing." And it took a really long time to get him to get a will. His third wife finally, they did that separate, but together. And my concern was that he was getting married multiple times, and that was my concern about having a will. But now he's divorced again. So I've just said, "Dad, if you get married again, "can you please get a preview?" - Yes, which would be smart on his ends. - Yes, going on the third wife, for sure. - But he's not married, so I guess the other side of me wanting him to get a trust or an LLC for his properties is that I'm worried about liability because for him it's something happens. I feel like we live in such a too happy world that I just have this horror story in my mind of like him getting into a car accident and somebody trying to, like if his properties are part of his personal assets and not protected by like a trust or an LLC that they would like try to take those things from him. - That's where he is. - That's fair enough. With the properties. - Yeah, that means a lot of real things. - If an LLC would probably be smart, just for him to set up, just for his own protection too. So if something happens at one of those properties that the renter or whoever can't sue him personally, they're gonna have to sell the LLC. So there's ways to do that, but that's from my understanding and I don't know floor to law specifically, but from my understanding it'd be more for his benefit while he's alive than even at his death. But yeah, I mean, setting that up would be smart. But no, and I think it's, I think on like a $2 million estate, I mean, maybe $50,000 or something through fees and different things through probate maybe, but it's so minimal, it will not be 30% by any means. Now, there may be in a state tax, but that's over like, you know, tens of millions of dollars at 15 million, I think is the, yeah. - Okay, the people that are the financial people that I know have just made it seem like it's gonna be so difficult for me to like do anything with his properties or manage them or it's gonna be such a long process to go through probate and all those types of things. But I'm not really, it's not about the money to me. Like I've even told him if you don't wanna leave it to me, leave it to my son, you wanna leave it to the next generation at the time he was married. So I was like, please just put it in writing, don't you? - Yeah, yeah, yeah. - Yeah, I will say if all the properties were in an LLC and through a trust or something, I think the people that are advising you, that is right, I think that would be a smoother transition, but it's not like it's that it's never gonna happen. It may be a longer process for sure, especially if there's multiple properties. So there will be some work on your ends, but I don't think it's not the end of the world. I would not lose sleep over it by any means. - No, okay, yeah. And I probably would just tell him to leave everything to your son, I think you wanna have more say in what's going on and how, if that's the case, 'cause you don't want your son to inherit $2,080, I mean, that's. - Yeah. - No, no, of course not, I mean, you know, but I was just kind of like trying to, you know, that uncomfortable feeling of talking about it and you don't want him to read into something that's not there. - Yeah, right, yes. - Yeah, yeah, or think that all you care about is his money, like I would trade more years with him for all the money in the world. - Absolutely, and he's known you his whole life, Melissa. He knows that's not true about you. He made you. - Yeah, I know, I just, it's just a, you know, it can be an uncomfortable conversation to have. He's so smart with money and he's sacrificed his entire life and now he's retired. And I'm the one encouraging him. I'm like, go send your money, enjoy yourself. - Totally. - It was a traveling, like, spend it all. You can't take it with you, you know, like, I try to encourage him to really let go and now enjoy it because a lot of his friends, his age, aren't, like, you know, physically able, health wise to enjoy the money, you know. - Absolutely. - So like, he's lucky and not fun. - Yes, well, you're a great daughter of Melissa. So yeah, I think the will is in place, that's really great. Yes, if the properties were in LLC, you know, and then that's in a trust, might be an easier process, but I think you're gonna be okay. - And if you wanna know more, you can take the Will's Quiz, RamseySolutions.com/Will'sQuiz will tell you if you need a will or if a trust is better. - Yeah, and you guys, listen to Melissa, though, for real, everybody needs a will. Everybody needs a will. And Mom and Bear Legal Forms is a great spot to do that for state-specific wills, but regardless of the amount that you have in your estate, everybody needs a will. (upbeat music) Hey, George Campbell 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 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 RamseySolutions 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 ramseysolutions.com/careers and apply today. (upbeat music) Now, our scripture of the day is Proverbs 14.25. A truthful witness saves lives. But one who breathes out lies is deceitful. And Frank said, "People can tell you to keep your mouth shut, "but that doesn't stop you from having your own opinion." Oh, true that, man, it's good. All right, let's go to Josie here in Nashville, Tennessee. Hi, Josie, welcome to the show. Hello. Thank you for having me. Absolutely, how can we help? I guess the biggest question that me and my husband can agree on is, how can we get over the fear of losing everything so that way we can ultimately have everything that we want? Oh, wow. Be a little more specific, what does that mean? Okay, so he had quite a jump in income this year, due to a job change, and now we're finding out do to a job change and now we're fine. finally able to pay our bills on time and not be underwater on everything or scrape by between groceries and with paycheck to paycheck. And it's definitely not changes completely, but now we have room to breathe and experience things that we want and be able to go out to dinner if we want to. Yeah. But we do have we have a little under right around $100,000 in debt. And we want to we want to be able to actually have everything that we want and set up our kids as well. Right. Okay. It's just I think it's just the fear of actually not having that extra money now. Well, how would have been used to it? What would be the main thing that you'd be sacrificing? I mean, I'm thinking about things like, yeah, going out to restaurants, maybe like entertainment things on the budget that you can cut back subscriptions. What are you? Is there something bigger and concrete that you're seeing yourself sacrifices at vehicles? What are you seeing? I don't know if it's necessarily anything concrete. I think it's just us actually having a cushion in our savings now, just in case. So it's not the savings. Okay. Okay. Yeah. Okay. So how much how much is he making a year now? So he's on a 1099. So and with the job that he does, he's a tour bus driver. So it somewhat take a day around $4,000. And then depending on how many tours he does, it could be around 12,000. Okay. So it's a pretty pretty big fluctuation. But it's now that we're able to save money, we're scared to get rid of it to put it towards our debt. What does it take just your minimum kind of bare bones normal month budget? What's it take for you guys to get by? Not $3,900. Okay. So we'll say 4,000. So just to start this thing off, because his income is so variable, like the first step I would take for you guys is to have like a peaks and valleys account, because there is so much variation. And with the baby steps, you're taking every bit of extra margin and throwing it at the debt. So on a month where he makes 12,000, right, you want to be able to have that extra to throw out the debt, but you're not going to feel comfortable to do that unless you have a peaks and valleys account that has another 4,000 in it. Right. So I would do that. And then I would go from there. I mean, how much do you guys have in savings right now? So we just recently opened a second checking account to put all of our like our bill money into our rent and our car payment, his motorcycle payment insurance and everything like that. And we we fully funded for October. And then in our separate savings, we have 800. Okay, gotcha. Okay. Do you work at all? I don't. We have two kids four and two. Okay. So work inside the house. Um, go ahead, Rachel. Well, I'm just thinking I'm trying to map out for you guys, um, because a hundred thousand dollars and it's at all, it's all consumers at right? So about 60,000 is student loans, which I'm still in school, I do online college. So I'll end around September of next year and my student loan should be around 60 grand. Okay. And then we have my car payment, which is around 8,000 is the total. And then his motorcycle is 14,000. And then we moved and we started renting this place and we didn't have any furniture and we got into one of those rent center payments. And now we owe on our furniture. Oh, and it's still rent a center. Yeah, it's like a local company that does it like that. And we pay on it weekly. So we don't lose our couch and our refrigerator, but you never own it, right? It's just rent to own like it's just rent. We do own it. We after we go hanging it, we will own it. And how much is that? Um, total is about 1500. Okay. And he doesn't have a car. He just has the motorcycle. There's not another vehicle. Yeah, correct. Just a car in my, my car and then the sugar motorcycle. Okay. So as do we get at 68, is there anything else 14 and 1500 anything else? So I have a car that was, it was a lemon and it was repossessed. And I plan to work something out with the bank a couple of years ago. Well, they finally, you know, they took me to civil court and all that. And I'm I'm paying on that monthly as well. And it's about 11,000. Okay. Okay. There it is. Okay. Um, so I mean, Josie, really, what it comes down to is I think you guys having that separate account is okay for now because his, his income fluctuates so much. So I'd get that 800 up to a thousand. And then from there, man, anything extra you can throw, like if he has a great month, you could throw eight grants and get, and get some of this stuff right down. Do you know what I mean? Like, you can make some big progress in some of these big months. And, and when you map it out, I mean, it may take you guys 18 months or so to kind of get all of this squared away, but it's not going to be forever. So just as quickly as this income changed, I almost would go back to the mindset, uh, knowing, emotionally though, there's a cushion because if something happens, the truth is, if something does happen now, an emergency, and you got a three grand thing, like crap, we got to pay for this, you have the money to do it, right? Like you could cash flow it through that month. If you had to, you could pause paying off the debt to cash flows. That's, that's the beautiful thing, is that the money is there. If you need it, right? With this great income, but still have the, the habits of how you guys were living paycheck to paycheck, so that anything extra on a month where nothing happens can be thrown at this debt. I mean, you guys should pay off that furniture. Gosh, super. Next month. Next month, you know? It's coming on. Just seriously, seriously, pay, like get some aggressive goals. And I think once you kind of start seeing that momentum and stuff starts getting checked off, yeah, it's going to feel great. So you're going to feel a lot of freedom. Does he have a guarantee on his pay? Like, is he guaranteed at least the 4,000 and then it can go from there or is there no guarantee? No, there is no guarantee at all. So it's really just, you know, if the company gets a client that runs out the truck, then the client will need the driver, they can go on that tour. Okay. So it's no guarantee. There could be a month, you know, like, because we were planning to try and go ahead, because he's on a really long tour right now where he's going to be making us some substantial amount, where we could find all the way through January for our monthly expenses. Okay. So we were going to try to do that just in case, you know, he doesn't have anything in, you know, in between the holidays from December to January. I wouldn't do that. And I was going to actually ask about that because there is such a fluctuation. I'm also thinking there's freed up time there too. So I feel like probably the third piece of advice in your list of homework would be, what can he do if he has a month that he's not doing all of those tours that equal up to 12 or $13,000, right? If he has a $4,000 month, what is he going to do with that time, or if there's an off season, what's he going to do with that time? And I think that's a really important part of this equation because if you don't, you are going to tie up a lot of money, kind of earmarking it for future months. And I don't want you to do that. I think if you have that peaks and values account, you get one month in that. And then if you're having a situation where there's multiple months of not making bank, then that means we need another secondary job or we need something else coming in regularly to supplement that income. Right. Yeah. I think the biggest thing was just we, we finally got comfortable for a second. And now we're scared to kind of start all over again. Even though we know in the long run, it's going to feel so great. We're just, we're scared to give it up right now. Yeah. I hear you. But also, there's a little bit of the false security because you still have all this debt. Like you guys still owe a hundred thousand dollars. Right. It's so scary. Yeah. I mean, you know, it was that much until I started adding enough. And I was like, how are we like? Holy crap. Oh my gosh. Yes. But I felt like a normal person like we've got my car payment, we've got this and that. And I was like, it can't be that much. And it is. It is. Yes. Once you actually see it. Yeah. So I think sometimes there's a weird false security. If people have a ton of cash on one side, but tons of payments because if something happens, those people still have to be paid. That's right. And so there's, there's an element to that that's very real. So I understand that it feels like, oh my gosh, we can take a breath. And that feels great. But listen, stay motivated to attack that debt. Josie. Stay motivated. Send her a copy of what no one tells you about money. Oh, yes. Jade's book. All right. Remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace. Christ Jesus.