The episode emphasizes the transformative power of budgeting in improving financial health and family relationships. Dave’s story highlights how introducing a budget after 20 years of unstructured spending caused his wife to react with fear, but framing the budget as a tool for freedom and control helped both of them embrace it. The host explains that the 50% rule for car value and 25% rule for mortgages are not rigid limits but strategic tools to maintain financial flexibility. Dave’s high income and large emergency fund (around $95,000) make paying off a $68,000 car loan feasible, with the potential to grow savings quickly. Other callers discuss key financial decisions: Doug’s 26-year-old son’s wealth needs protection through life planning, not prenups, and living independently builds better judgment in relationships. Henry, a retired military woman, considers relocating but is reassured that her current 25% mortgage ratio is manageable, and that saving $100,000 in three years is achievable. Isabel’s concern about 33% mortgage costs is reduced when adjusted for taxes and other deductions, suggesting a more realistic 25% threshold. Mike, a 58-year-old, credits budgeting with saving $3,000 annually, and emphasizes allocating money to experiences and family over retirement alone. Josh considers moving to lower-cost areas like Las Vegas to save for homeownership, while Chad’s family plans to distribute an inheritance to support his mother’s retirement, using a two-year guaranteed savings fund before investing the rest. The show promotes using budgeting tools like EveryDollar and financial apps to gain control, and highlights the importance of giving, experiences, and long-term planning over materialism. Ultimately, the message is clear: financial freedom comes from intentional planning, not fear, and every dollar spent—on goals, family, or joy—matters.
Just sticking with your existing Medicare plan could be an expensive decision. Let chapter review your options for free. Learn more at askchapter.org/ramsie. Brought to you by the EveryDollar app, start budgeting for free today. Normal is broken, common sense is weird, so we're here to help you transform your life and your money from the Ramsey Network here in the FairWinds Credit Union Studio. This is the Ramsey Show. I'm Jade Worshaw next to me. George Campbell chopping it up for the next couple of hours about your money. And by the way, if you have questions about your money, we want you to call in. You guys make this show go around. So give us a call. Maybe you've never called in before, and it'll be your first time. The number is triple 8-825-225. I can't wait to hear from you. Let's go to Dave, who's in Miami, Florida. Hey Dave, welcome to the show. Hi there. Thanks for taking my call. Yes, sir. How can we help? Well, funny enough, I just started down this Ramsey highway about three months ago. My wife and I've been married for many, many years, and I totally freaked her out with the stuff I've been throwing at her. Oh boy. What freaked her out? Yeah, what you've been throwing? Well, budget that I didn't realize that was going to trigger her. We've never had a budget ever. That can sound like a customer. How many years have you been married? We've been married for 20 years. Well, she's like, who is this talking about a budget? Oh, she's like freaking it. So we were, we were high income earners. And I, we have one paid off car, and I wanted to just pay my car off, and she kind of kind of bought that that. And then I guess we were kind of a little confused as well about 50% for wheels and engines, 25% with the mortgage. That's like 75% and only leaves 25% for bills and other things. So I just wondered if you can walk me through that your rationale behind that and maybe help us with making the decision to just pay off our car loan. Yeah, so let's go back to the budget because I think it's worth noting this. You've been married 20 years, and you're like a new man coming home. She's like, where is, who are you and what have you done with Dave, right? And, you know, as a high income earner, I'm sure she's used to some level of kind of spending without end, and nobody's asking her, and she's not telling anybody anything, right? And for a lot of people, when you introduce a budget for the first time, they're first encounter with it. It feels restrictive to them. It feels like some sort of a punishment for them. And you really do have to introduce the budget as a form of freedom. It's just the spending plan. It's not handcuffs. It's not something that's going to take away all your fun. It's not a punishment. So the way that you frame that up is going to be really important in the types of phrases that you use going forward regarding the budget is going to be really important. And not associating the budget with no or negative, but instead associating the budget with this is us being in control. We have a plan. We said we're going to do this. The budget lets us do this. It's going to let us have this, right? And just starting that conversation and starting that vocabulary off on the right track is really going to help both you and her with this new lifestyle. So why are you starting a budget after 20 years? Well, I've just kind of been feeling like all the money we make every month, I don't know where it goes. Have you said that to her? Yes. And what did she say? She's, I think she's slowly kind of feeling that way too. Because you said she balked at the idea of paying off the car. You sounds like you have the savings to do it. What scared her about that? I think she was worried that if there's upcoming things like taxes or, you know, other expenses that where we haven't really been thinking of. Is she right? Will you guys still have an emergency fund and still have enough to pay taxes? We would have, well, with as much money as we make, we should be able to, if we pay off the car, we should be able to really sock that away and recreate that emergency fund pretty quickly. So how much cash do you have now in that emergency fund? So the liquid cash is about 95,000. Okay. And what do you owe on the last vehicle? The payoff is about 68,000. Okay. And is the car the only debt that you guys have? Are there any credit cards? Are there any home equity loans? Anything else out there? No, we have a mortgage, but otherwise no other consumer debt. We still use credit cards, but literally since we've had them forever, we pay them off every month. So that was another shock to our system. And what's your income? Transitioning from that. About 727,000. Fantastic. Wow. And we're concerned about reaching over and paying off this $68,000 car when you're bringing in so much money per month. That's like one month of your growth income. Yeah, come on now. You can save that back up real quick. I agree. And we have significant, we have about 6 million in retirement. You realize, I mean, this is what Ken Coleman would refer to as a nothing burger. That's how I feel. It's more emotion than facts is what we're trying to get at. And so you're trying to show her the facts of, hey, we're free of a car payment. We'll stack back up the savings in no time. But because this is new to her, seeing $70,000 leaving account at once instead of it siphoned away into car payments is scary for her, right? Yes. Yes, 100%. You could have written a check at the front and just bought this car and cash, right? That also would have been scary for her, because just a giant amount of money leaving the account. And that's a normal human thing to experience is we saved, we worked hard for this money and now it's gone. Now it's not technically gone. It's sitting within the car going down in value, but it's still a thing you guys wanted. Who's car is it? Well, I guess technically it's ours, but it's mine. I'm the one that uses it primarily. Okay, so you have a new value. It sounds like in your life, which is, hey, I'm getting older. I want to be just having, I haven't a plan for my money. I don't want to owe people money. I'd like to get out of debt. And this is kind of new information for her as a family value. It sounds like. Yes. So let's cover the parameters before you go. The 50% when it comes to cars is not about payments. It's about the value. So we would say no car payment is the goal. Zero dollars in payments, but 50% is the value of all things with wheels and motors in your household of your annual income. So you make 700,000. That doesn't mean you need to go get $350,000 in car. We can agree. Yes, 100%. Great. So that's that parameter. So it's not too much of your world going down in value. That's the whole goal there. The 25% with the mortgage is to make sure you're not house poor. Because if your mortgage is 50% of your take on pay, you're going to have a hard time investing 15%. Saving for the kids college, paying off the house early, saving up for vacations, the car upgrades, all of that. And I'm fairly certain that's not the case for you either, is it? Correct. We have our daughter's education paid for and everything's pretty much fantastic. Well, you know what the good news is in the budget? What you should show her is all the margin. That's the part that will get her excited. Say, hey, look, this is our household expenses, $10,000. We still have another $20,000 to allocate. What if me and you came up with a plan for that money instead of letting life decide? That's all you're doing in the budget. Yeah, we're trying with, I do have every dollar app and the FPU and the boardbook and I'm doing that crazy. Fantastic. I'm going to get my wife on board. We'll make it more of a dream meeting than a, you know, come to Jesus meeting where it's, hey, your spending's been out of control. It's time we get on a budget. Yeah, maybe we make the meeting less about getting on a budget and paying off debt and make it more about being able to be generous, more about being able to spend money in ways that make you guys feel energized and give you joy. And all of that is a process of the budget. It's not just for paying off debt. It helps you accomplish whatever your money goes on. Maybe that car payment turns in her fund money. That's an interesting idea. She probably loved that. 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. 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Start your search with Churchill, click the link in the description or go to ChurchillMorgage.com/RamseyOffer for an exclusive Ramsey Audience offer. ChurchillMorgage.com/RamseyOffer. Let's head back to the phone lines. We have Doug, who's in Bismarck, North Dakota on the line. Hey, Doug, welcome to the show. Hi, welcome. How are you doing? I'm doing all right. How can George and I help? I have a 26 year old Depp son, or he'll be 26 in January. Great young man, and came into my life about eight years, when he was eight years old. Anyways, he's got a ton of money saved up. He's got a, he's an RN, works his tail off, and he's got, he just showed me the other week. He's got 280,000 of his personal money. Wow. He's living at, he's living at home. He's still here. Everybody gets along great, you know, great. He's got 100, 100 and some and 401. What I'm looking at is, how do you protect that money down the road? Let's say, currently he's not dating, but if he would, let's say he gets a girlfriend, they get married, two years ago, self. Oh boy, you've really played this thing out. Why such a negative, why such a negative spin on, on the next two years versus the positive outlook? Oh no, I hope it's all, it would all be positive. What I'm stating is, that's a whole lot of work we've stuck into this young man. And I hate to see it, I'd hate to see him lose half of it. Yeah, I mean, on the one hand, so let's level set a little bit, when you, when you ran out his numbers, I thought, man, yeah, you're right. He's doing an excellent job. He's done a great savings. And in my mind, I thought, this cat needs to move out and use this cash and buy himself a place and cash. What a great idea. That was my first thought. And if he meets somebody, my guess is, they'll date for a while, they get engaged, they get married, and show want to move into a new house, and they'll sell that property and move into something else, right? That's kind of, if you ask me to play out the scenario, that's the advice I'd give him, and that's probably what I'd see happening. And let's pretend, over time, his relationship did go south, heaven forbid. Well, then they'd be, you know, they'd be held to whatever the divorce laws are of their state, which it tends to be a 50/50 split in that case. But if you're insinuating that he needs to do a prenup, I don't know that I would suggest that at this point. Who knows who he's going to marry. What if she has all the wealth? Right. Now she needs to be protected from him. Good point George. Well, I thought of, yes, I've thought of that also, but it's just the way the world goes nowadays, you hate to lose the lifetime worth of work. I know he's young, but it's, it's a lot of sacrifice by myself and the wife, you know, to get him. He's a good great listener. He's very proud of him. I think he'll pick a good lady, then it sounds like you've raised him well. That's going to be the biggest factor on his shoulders. Who does he choose? Is he aligned with money, values, and principles, and goals with this person? So regardless of how much wealth they have, they're going to build a whole lot more together than whatever he brings into the marriage. Right? So if he's, if someone's going to marry him just for the money, sure, that's a problem, but you would hope that this guy's got a head on his shoulders or he can sniff that out pretty quick. And so there are tools. I mean, there is pre-nubs where you can set one up if there's a specific gap in wealth, but it's not a bridge I would cross until we get there and he's got $7 million and she's broke. Okay, that might be a scenario, or there's some crazy family involved and let's protect everybody involved here. But it's not something where I would pre-plan for him to go, "Hey, it's going to happen eventually. Might as well protect yourself." And if I were to give a piece of advice for the situation, it's probably Doug not what you called into here, but my number one piece of advice would be, he's 26, he's got plenty of money, he's got an excellent job. One of the ways that you can set him up for success is to push him out into the world, push him out to live on his own because that's where he's really going to learn kind of the street smarts to take care of himself, to be able to judge people's character pretty quickly and say, "Hey, this is a good choice. This is not a good choice. This person is on my side. This person is not on my side. I can judge red flags and orange flags and green flags when I see him." And so a lot of that comes from having some experience out on the own and not having mom and dad kind of in your ear the moment you get home from work. I hear some interesting advice for dads especially, is you have three roles as a dad over the time they're from kids to adults and the D first D is direct. So you're directing a child. The A is for advice as they get older. Now you're advising them. And then when they become adults, it's discussed. And so it's just a discussion, you're almost like you're a friend who's giving advice versus a dad. And so that's the hard part about is letting go realizing he can make his own choices. He's a grown man. I can't tell him who he can and can't date. And especially if he's on his own, I think that's the hardest part. Doug's having a hard time with and I'm going to be in the same boat is letting go realizing I want to have control over the future. Make sure that he's okay. And that's the hard part about living is it's a fallen world. Yeah. And you can't save him from every mistake. That's just part of it. I say that with a six and a eight year old. What do I know? Let's go to Henry who's in Raleigh, North Carolina. Hey, Marie, how can we help today? Hello, thank you both for taking my call. My question is should I relocate to another home and stay where I am. Well, lay us out. Stay or should I go now? Okay. So I'm retired military, but I did some stupid stuff. I took my retirement. If it's not in a half and upgraded my home, travel a little bit until you off all the debt we had. My husband died January 20, 25 over the pension and my military pension, my income is $10,994 a month. My margin is $6,834. I do spend 1,500 investments of that. I have 144,000 invested so far, 50,000 emergency fund. I'm totally debt free. Thank you. And you know your numbers, Marie, come on now. I'm not hearing a lot of stupid in here. I got to keep up. My pen is smoke is coming off my pen. So you want to save up to move? You have a paid off home. What's the new home going to cost? $300 and I said I'm going to set it at $3,030. But I don't have a great big retirement fund because I spent it all up. But my home is worth $2,208,000. So I'm asking you guys, if you were me, would you move after you save up to $100,000 or would you stay? I was married here with my husband for 24 years and I kind of want to start new. Yeah, I think I think you have it because the pension is not going anywhere, right? So you're making the 11,000 bucks a month and you've only got to save up another hundred to make this to 300,000. How quickly can you do that? About three years. You just told us your margin was $6,800 a month with zero debt. Yeah, that's 81 grand a year. That's awfully close to $100,000 in a year you could save. I bet if we gave you an every dollar budget, you could lock in that margin even more and make sure all of those dollars are going towards saving up that down payment. Well, I do have every dollar. I'll go back and look at it and change some of the rounds, but I do have every dollar. Plus you're investing, plus you're investing 15% right? Right at 1500 right now, I was doing 2000 because I want to stay for home. I went from 2000 down to 1500 and I'm fine with that for a two year period. I think that that's okay for you to do. But I don't I have no problems with this plan. I think it's a good plan. I think it's a fresh start for you after such a tough loss, which by the way, I'm so sorry to hear that. That's really hard to move on from, but I think that this will help you have a newness in your routine for sure. And even if you wanted to do it today, let's say you took on a small mortgage of $90,000 and you did this today, you'd still be okay. It is off the table. I love staying debt free as much as anybody, but I'm just saying if this was a three year thing, you're like, I really want to move this year. You'd still be well within our parameters. You'd be doing great. Absolutely. And of course, you know our 25% rule. We want to make sure that you're taking out a 15 year fixed rate mortgage. That's what we suggest here. One where the payment is no more than 25% of your take home. That's kind of the sweet spot where we find people have still have the room in their budget to do the things they need to do with money. You're still able to save for retirement. You're still able to live your life. And that way the house is a blessing and not a burden. I like this stretch goal. Can we save a hundred grand in a year? I think she can do it. A woman who knows her numbers like that. That was crazy. I had to keep up. She was spitting bars.
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So go to boostmobile.com/ramsie and make the switch today. That's boostmobile.com/ramsie or click the link in the description. $25 forever requires customers to remain active on boost mobile and limited plan. George, do you remember when every dollar came out, I think it was like 2016? I think it was 2014. 2014? Yeah. Was it that early? I had just started here like a year ago when it came out. And I remember being in the lobby the moment they announced it. I remember I was so excited because I was always, you know, used to doing my paper. I had like a Dave calls him a legal pad, but like, you know, like a pad of paper and same and I would do our budget on that. And we had just paid off my car, which was a Jeep Liberty, doing like the old school budget system. But I could not wait to use every dollar because I was like, once I have the power of the computer, we'll be able to go have like light speed. And truly ever since then, I've been using every dollar and it did. It made paying off debt so much easier. Number one, both of us could see it. So we went from having this legal pad and like the checkbook ledger that we each had, yeah. But we each had to write in the little checkbook ledger and you know that was a problem because Sam's handwriting is an issue. And so really dating yourself now. I know I am, but just the very first iteration of both of us being able to just log in. And then like over time now it's on your smartphone and all these things, it has made managing our money so much easier. We were able to pay off all of our debt, $460,000 of debt we paid off. But then being able to see that margin every month, now you're rolling it into baby step three and it's just easier to stack up the three to six months of expenses and just seeing that number grow every time when you do your emergency fund. All of those things, I try to tell people that it's, it's the ticket. Like if you start walking the baby steps and you're not using every dollar, you're like cutting off your own legs. Yeah. It's actually so empowering to use a budgeting app like every dollar to achieve your money goals versus it just floating around in your head and hoping it happens. The budget is where it actually comes true. It's where it actually comes true and it's so motivating. There's just something motivating about every month, plugging in when you're going to get paid every month and then plugging in your expenses and being in control of the plan. I think sometimes out there with affordability and everything that's going on in people's finances, it kind of feels like the world is taking over. What do you want to do in a budget? Yeah. But knowing, hey, every month before the month begins, I'm a person who kind of starts looking ahead at like the 20th, the 20th is kind of what I'm like, okay, I need to start. 10 days ahead, Jade is like, let's plan for the start. Well, Wendy, you start. I guess I'm a late planner. Are you? Wendy, what are you? As it, I'm like the two or three days ahead. Okay. I start talking to my wife going, hey, what's coming up for December that we got a plan for for expenses? I mean, we get the birthday party. Let's add that. Yeah. So I start to kind of, it percolates. It percolates. But I look, I look forward to it. It's just, I don't know, it becomes kind of one of those rhythms and a routine in your life. And I'm the person in my house that kind of starts the conversation. I like to fill in the numbers and then I'm the one bringing salmon. Are you the? Yeah, I'm the presenter. You're the presenter. Yes. I'm the presenter as well. I like to get it dialed in. Then I show her and we go through it. Yeah. But anyway, if you guys, if you haven't tried every dollar, please, I think you'll love it. If you just try it for free and you can jump in there, you can download it today for free. I think you'll really love it. Maybe what's the word that it's into it into it into it? You're friendly, into it. Yes. I'm not a tech person. And so I actually really like every dollar because I don't have to use my brain. It just works the way I need it to work. Anyway. Beautifully said. Thank you. Isabel is in Charlotte, North Carolina. Hey, Isabel, how can we help today? Hey, so my question is, so we have a house and I'm, I'm realizing we're pretty house for and I wasn't, we kind of went off by, you know, the bank approved us for this much and we didn't want to and pay that much, but that was the only option that was available. It seemed like to us in August of 2024. So that's taken up like when I'm calculating a 33% of our income. So we're thinking that we want to move out like by next year when my fund is done with elementary school. Okay. But I'm 33% feels like a drastic move. I wonder if there's other things that are also tugging at your budget. That's making it feel really tight. If it was 25% would you still have the this tug to move? We could probably wait. Here's another thing. Well, we did a five-year arm and that makes it hard. Now there we go. We didn't know. We didn't know it was a big deal. And then we have, we want paying attention to the student loans, they weren't determined forever because I bought into that whole, hey, some of them are going to start being forgiven. Anyway, we're not doing that anymore. I paid like 20,000 toward them this year. So that's what you're feeling. Okay. It's the arm. It's the consumer debt. And the mortgage is just one more thing glaring at you saying, why'd you do this? Yeah. And like I said, I wasn't really like paying attention to all this stuff. I was playing everything on a credit card paying off at the end of the month, like all the things that you say don't do. Well, what if we clear the deck and then reassessed with this house stuff? What if you just waited, paid off your consumer debt, and maybe you can refinance down the line and get out of this arm? Would that solve a lot of this? And Ian, we got your mortgage down a little bit, but 33% is not so out of whack that I'm going to tell someone to sell their home. Especially if you factor in, are you guys, do you have any other deductions coming out of your paychecks before it lands in your bank? Like healthcare premiums? Anything like that? Yeah. The 33% that I'm counting, calculating that with just, you know, what we're getting in our checking account. Okay. Because our 25% parameter is really just after taxes, but before other deductions. Because someone might be investing 15% and paying healthcare premiums. So that's going to make their take home look drastically different, even though they have a fantastic income that can support it. So I think if you redid the math based on that, it would actually be much closer to 25%. Um, I did factor in the, like our HSA, like that's in this amount in our income. I didn't count, you know, the, yeah, I was only counting the, the taxes, like you said. Okay. And right now we did pause and best thing because we're trying to cut, we, we're trying, at least to know if they're really like eating how much are the students? How much is the total of the student loans and then how much are you putting towards it every month? So right now it's 58,000. And the payment that we did some extended payment of 342, but then I'm taking them down, like, like big chunks paying off the little ones, you know, like, yes. What are you putting towards that snowball? Uh, we'll, let's see, right, the minimum payment is 342 and then back in May, I paid off like, uh, 20,000 toward the student loans, so you're saving up chunks and paying it off in chunks. Yeah. How much could you do per month per month is just the three, four, two, I'm not putting anything right now. But how much could you put toward it? Oh, I don't know because, um, we've already started a budget. So what, uh, what allowed you to put, what allowed you to put the $20,000 chunk? Was that a bonus you received? How were you able to have that stack of money? Like, I pulled it from a savings account, okay, we had to fold the house in the past and we still had some leftover money and I thought, well, it's sitting there. I need to like, you know, um, and also because they were trying to hit me with like, oh, you need to pay seven hundred a month as you know, as I said, I can't do that. Okay. So let's give you a plan that'll help you to have some sustainability, help you to feel like you're making progress every single month. And first off, I would say if you have any other savings laying around, we need to know about it because that's going to help. Do you have any other savings laying around? There's quite like 10,000. I was kind of geeking that for emergency. I know you'd say a thousand, but I felt like a thousand is not going to do anything for me. Okay. So here's, here's my challenge to you. Listen, selling your house out of fear and fire is going to cost you more than the 10,000 that you're hanging on to right now. It is. Okay. I really, I want you to spend some time thinking about this because you're going to go away from this call today and you're going to, you know, get back into life and things are going to, you know, crowd your day out and you're going to forget about this call in many, in many ways. But the thing I want you to take away from is you know what we teach, don't you? Hey, I'm, I do know. You do know. So here's the thing.
you gotta decide, Isabelle, what it's gonna be. You've gotta decide, am I gonna follow this plan? I'm listening to them. I hear what they're saying. Something about a distracting accord with me 'cause I'm listening and I'm even calling in, which by the way, thank you so much for the call. But that's not enough at some point. You have to decide, am I gonna go all in on this? Because kind of skating around the outskirts, Isabelle, you'll kick this can down the road for a while. But if you go all in on the thing that George and I teach, which by the way, we don't just teach it, both of us have done it. George has paid off over $40,000 of debt. I've paid off almost $500,000 of debt, doing this plan. So we can tell you it works. But at some point, you're gonna have to go, I'm all in, which means I'm taking this $10,000. And I'm gonna bring it down to 1,000, baby step one. I'm gonna put the other $9,000 on the debt. I'm gonna get on an every dollar budget like they've been telling me to do. And I'm gonna put all of the margin towards my smallest debt and work this debt snowball, just like they've been telling me to do. And then I'm gonna turn around and save three to six months of expenses like they've been telling me to do. (upbeat music) - Statistics show that half of Americans don't have enough life insurance. Or they don't have any at all. I don't understand this, John. Why don't people wanna take care of their family? They think they're gonna die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, "Hey, the only reason to not have life insurance is if you hate your wife and kids." And I immediately went and got term life insurance. - That's a gut punch. - Oh, you're telling me, for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. - Me too. - And they don't know what to do next. - Me too. - You're gonna have a crisis here. And you got two options while you're sitting and talking to a young widow. She's concerned about how she's gonna invest all this money properly and not mess this up. Or she's concerned how she's gonna eat tomorrow. - That's exactly right. - These are the two options. - And take care of your dad-gump family. - And term life insurance can replace income if dad's cover funeral expenses. So your family can actually have the opportunity to just be sad to just miss you. That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance, Jeff Zander and the team of the Zander insurance makes it easy and affordable. I've used them personally for 25 years of the only people I trust. Go to Zander.com or call 800-356-4282. (upbeat music) - Let's head back to the phone lines where we have Mike who's in the city I was born in Spokane, Washington. Hey, Mike, how can we help out today? - Well, thank you so much for taking my call. - Yes sir. - You were born in Spokane, Washington. - How cool is it? - Yes, I was. How can we help today? - Mike, I'm 58 years old. Don't want to work forever. And I just kind of wanted to reach out and talk to you guys and get that first off. Thank you so much for all the advice things you do. I feel like I've met some of the parameters here. My house is paid off. I've got a traditional that's cleared the 1,000,000 mark. And now I change on my investments to 401K Roth. - Nice. - Which I hope to max out this year. And then I'm looking through my every dollar, which that didn't have saved me about three grand of my finances annually. - Whoa, you're saying just doing an every dollar budget saved you $3,000 and just sort of sloppiness that you cleaned up? - Probably close to that. - Wow, that's amazing. It's like 300 bucks a month, you just found. - Yeah, the phone they went to from 140 to 53 with the boost mobile, the X-Bin and the X-Bin and my son was paying for it in my basement. So we were both paying the same things. So I walked out for 85 and then I took the advice on the whole life policy, which was 400 a month. So yeah, you're taking all the advice. And it's working out for you. So you're 58, you don't want to work forever. Do you have a number in mind or an age in mind? - I was looking at the same percentages and what I was looking at is, you know, I had a single stamp in my passport and there's no life we never took our case to Disneyland. I could turn this and say, okay, I'm going to turn this one into two before I return. Two into four spin one, leave one to each of my kids. I mean, that's sort of, but if I do that, I'm just going to keep. - You'll just keep saving into oblivion and then never enjoy life. - Not experiencing it. So you're trying to balance this out. - What I'm saying is, what should you post? It's not a post goal because I'm still always, I always have goals, but. - I think there's a way to balance that though. - You made it to this mark, you know, this being said, which I'm reading on the book and towards the end, it really just helped me kind of do this a little bit, but what, I mean, what should you spend on yourself? - Well, it sounds like you're a guy who just rarely spends on himself in your whole life. It's been, I gotta put away money. It's for other people's for the family. So I would set aside some money in your every dollar budget just for Mike, just some fun money for Mike that is guilt-free spending. And then also set aside a sinking fund for a vacation. And that way when that money builds up in that sinking fund, you don't have to feel guilty 'cause it could have gone towards retirement. You told it, hey, no, you're Disney money. - Yeah, and I love it. - You're not investing money. - You mentioned some kids, grandkids, how many kids do you have? - Grown adults. - I got three. And grandkids. - They're all old though. They're all 30 there. Let's see if I can have them. Do I see it for college educations? I mean, that's-- - Well, that's what I'm getting ready to ask you, are there grandkids, too? - Yeah. - How old are the grandkids? - Oh, here's mine and ours, probably 15 to 0, 15 to 1. - Okay. - So what I'd be sitting down and thinking is, I love that initially you were saying, you know, I can double this money. I can triple or quadruple this money and leave a million dollars each. I love that. But what are some things that you can invest in to have experiences with them while you're still here with them? And that way that money is not only being earmarked for when you're gone, but there's money being earmarked that you can bless them with while you're here and that you can share in that blessing, too. So whether it's a trip to Disney, like you said, or it's one of the kids is getting ready to move. Maybe I can help with the down payment or one of the kids is getting ready to take off to college. How can I help there? And I'd really sit down and start writing down where I think those moments are that I can intersect their life and start using some of what you've built. - Do you call that you're giving? Because I do. I don't go to church, but I just pay for some of it. I mean, I pay for a lot of different things here. - It's generosity for sure. - I don't mind other people's birthdays. And yeah, I'm kind of that person. - I think it's 100% generosity. I mean, I think there's different ways to do that. Obviously, there's the local church, right? 10% there. If that's your belief system, if it's not, well, then yeah, it's gonna look a lot different. And I think that's okay based off of who you are and what your belief system is. - I can put that at 10%. You know what I mean? - Yeah. - For real long wheels and the necessary thing that I believe in. - Yeah. - Well, there should be for percentages for enjoyment. - Well, there's no set percentage because it really depends on your lifestyle. And if you make a million dollars, the percentages may not scale appropriately, but you can just decide, hey, I'm going to invest 15% of my income 'cause I want a retired dignity. All right, there's gonna be margin left over after the bills are paid. What is a reasonable amount that I feel comfortable spending in this season of my life? And you might find it's 2,000 bucks a month or you wanna go on a $10,000 trip and take the kids or the grandkids. Those are all wonderful things to do. And more and more, the research is coming out that the best use of your money instead of leaving it to your kids one day when they're 60 and they don't even need it is to give now. And that can be through experiences with people you love, which Dr. Arthur Brooks says is the, one of the best uses of your money that actually brings joy is spending it on experiences with people you love on top of generosity, one of the best ways to use your money on top of investing in savings. That has a legitimate brain dopamine hit that you get from building for the future versus just buying stuff. - Yeah. - Which is the one that doesn't actually produce long-term joy. - And it requires just as much intentionality, right? When we say to invest, it requires the intentionality to find that margin to make sure it's coming out every month to invest for the future right retirement and legacy and all those things. But now we can see it takes a certain amount of intentionality also to figure out how am I going to use some of this now to your point, George. While I'm still here, while they're still young, while I can still make an impact and it's still, they can feel it and it can affect their foundation as they grow. That takes a lot of intentionality too. So if I were you, Mike, I would sit down and write out those different areas that you wanna intersect their life and that is a form of generosity. Thanks for the call. Let's go to Josh in Los Angeles, California. Hey, Josh, how can George and I help out? - Hi guys, thanks so much for taking my call. - Mm-hmm. - So I'm 30 years old. The life is living in the greater LA area and I'm currently debt free. My biggest goals right now are to invest aggressively so that I can retire early and eventually purchase a home so that I can raise a family. What I'm struggling with right now is whether those things are attainable in the California area. So I wanna ask you guys, should I consider moving back home with my parents to save until I'm able to buy a home or move to a lower cost of living state? - What about your job if you were to move to another state with your job transition with you? - So unfortunately, I won't be able to transition,
with my job I work in the medical device industry so I think I can find some work making it comparable compensation if I go to another state it probably would be a little bit lower though. What do you make right now? Right now I make around 130,000. Okay where would you be considering moving to? I'm considering maybe Las Vegas or Arizona that way I wouldn't be too far from my family in California. Okay, so I'm using our cost of living calculator ramsayslutions.com and I popped in your live in LA you want to live in Vegas your salaries 130 grand and it says based on your current salary and lifestyle your Vegas salary would need to be about $82,000 which is 37% below that California cost of living so that just gives you a number to go you could take a pay cut and still make this work by moving. So can you do it absolutely can you still live in California and have a great life? Yes, I think you can. I mean your other option was moving on with the parents there's a part of that that I don't love because I think the time frame that you would be doing it would not be enough to accomplish what you're trying to accomplish because ideally you do something like that maybe a year I would hate to see you have to do that for two years and I just don't know that you would accomplish all that you want in a year's time on 130,000 plus your 30 years old now's the time you want to be out if you meet a young lady you want to be able to say hey here's where I live would you can I can you come over can I make you dinner she's me mom and dad pretty quickly yeah if you're living at home so that's something to consider is you sit your end goal is I want to be a homeowner with a family well you can do that now and bypass this whole kind of fire movement I want to work aggressively and live at home if you want to just go start a family go start a family and the homeownership will come along with that as you stay out of debt save for the future you'll be able to do that one day and the average homeowner age is now what 38 years old less that's all I think it was 40 like the median age of homeowners so it's not that that's supposed to be like yay but at least it gives you hope that you're not behind if you're 30 and you don't own a home yet just because you're 26 year old friend has one yeah that's true and just because you live in the Las Vegas area for a while and you get your footing and you start growing financially maybe one day you do move back to the California area where your family is so just because you create a plan does it mean it has to be that way forever it might be the thing to steer step you to where you want to be long term if you're in a really bad debt situation I know how scary that is you might be getting harassed by debt collectors every day threatened with lawsuits and maybe you think bankruptcy is the only way out I've been there I remember feeling so scared I couldn't breathe but it's not too late to get out of this mess contact guardian litigation group guardian is not a call center they're a real law firm you get a real attorney assigned to you so if a creditor sues you're protected from day one not scrambling to find legal representation when you're already in the middle of it and guardian only gets paid when your debt is negotiated and you accept the settlement guardian has helped over 55 thousand people settle more than 600 million dollars in debt that's why I trust them and send people their way the longer you wait the fewer options you have the more expensive it gets but it doesn't have to end that way guardian can defend you go to guardianlit dot com slash Ramsey that's guardian l_i_t dot com slash Ramsey or click the link in the description attorney advertising results may vary in no specific outcome is guaranteed welcome back to the Ramsey show here in the fair winds credit union studio give us a call the numbers triple eight eight two five five two two five we would love to hear from you and answer your question about money personally let's go to Chad who's in Savannah Georgia hey Chad thanks for joining me how are y'all today we're doing great your accent is making my day already I appreciate it very much thank you listen it it is a pleasure to speak with George camel and jade war show my my 18 year old since august of my oldest is going to flip no offense jade but that I got to talk to George camel yes this is this is it's George world I was called at the youth think I'm cool I just living a very very frequently I am getting clips from facebook youtube of your shorts so yeah fantastic y'all's ministry is awesome I am I'm 44 I'm a second generation Christian but my family had the principles growing up and so my son when he was in his early when you 17 roughly you really got turned on the y'all and and so when he turned 18 in august he a week before he turned 18 it already spoken with one of the brands and financial advisors wow and was ready to set up went through the whole process of getting desire he set up and he's gonna get you a real nice nursing home one day so you did well Joe yes but he was on the phone he said let's get you set up C.A. and so he told him as age he's a year you're 17 he said yeah he said I want to get it ready for next week when I turn 18 of my birthday oh my gosh and and so I attribute a lot of that to y'all since sincerely thank you for the ministry I know as to y'all may think of the job but for folks I hear the real world it is also ministry and so I thank y'all very much for we're daily listeners so grateful for you guys thank you so much how can help so Jimmy here's the question yep so my dad who's my hero my spiritual giant my life passed away in June very unexpected so but my dad thought the world of him again I am a Christian and the foundation principles I have is called my parents and so my dad was not much of a planner though he really didn't plan the future didn't have a lot of a lot of savings financially and so when he passed it was just me and my brother and a little sister and so mom is she she's 71 she's been a home-make all-of-a-life homeschool me my brother my little sister and so they didn't have a lot of debt but they didn't have she doesn't have everything for retirement so whenever he passed kind of just laying a quick groundwork when he passed I made sure she's she totally debt-free now and has a little bit of cash not a ton but here's where we're sitting so my grandpa who is my mom's father just passed away about three weeks ago he's 95 had a very blessed life Lord been good doing so in his will everything was left to my mom and me my siblings it's going to wind up being after we saw the house and sell a few things it's going to wind up being roughly somewhere I'm thinking between four and five hundred thousand cash each or total excuse me each or total total yes total so that would have been divided between my mom myself and my brother my little sister was adopted 20 years roughly now 20 years old so she was you know where my grandparents are already up in age when she was adopted so the wheel was between me my my my mother and me and my brother so can we assume 150k each I would think yes sir that's what I would think yes sir okay and so my brother my brother and I have decided and we both agreed that we're giving our portion the Lord has been good to me my brother's a pastor in North Carolina we've decided agreed we're giving our portion to my mom for her retirement for the rest of her life until she 71 so we're good with that we have no problems with that I've been speaking with again just a just a trusted Ramsey pro and what we're coming up with and I just really want to pick y'all y'all's mind about this is whenever we sell the house we're going to have again 24 and 500,000 cash to maybe part roughly three hundred three hundred fifty thousand in just a good you know brokerage account the S&P someone that keep roughly 50 to 100,000 out for her to live on for she again what she gets between social security and she we've already figured 4500 a month is going to be perfect for her that's what she needs so what social security and me so social security is fifteen hundred a month so we're only talking about three thousand a month okay so 36 grand a year out of that three hundred fifty thousand dollar pot is what we're talking that's what we're that's what we're in the game if we wind it with 400,000 cash that's kind of been my mind what I'm thinking the low numbers going to be I believe and so in my mind if we if if and again talking with the financial advisor and even get 19 road involved he's enjoying these talks um it's it's kind of like a puzzle fitting it together to make sure my mom again is taking care for the rest of her life uh we figured we would take out 50 to 75,000 of the the the chunk of it when we get it all in the house sales put that into a high yield savings something that will be guaranteed for two years for her to live on and then take the remaining big chunk of the money and just put it into an S&P put it into a get a brokerage account that will just sit there and accumulate the interest until she needs it in two years to start drawing on yearly okay that that realistic do y'all have a better plan a better idea just kind of want me through this from y'all's perspective I'm just curious what caused you to choose the two years kind of arbitrarily for the for her to live off the savings and then go to the brokerage no no yeah no reason at all I was just giving it more time for the brokerage to just sit there and to just I guess just um just for the interest to grow untouched for two years I understand obviously markets some years you know it's a little bit down most years it's up and so I was just thinking you know for if we could take out the
you know, as I said, 50 to 75,000, that would be a guaranteed amount for two years. We wouldn't have to worry about what the market's doing. We already had this set over, this set over here, we're 300 to 350 to send in their growing in the market. We don't even have to worry about. So the plan would be she lives off of this money in checking and when it gets down below a certain threshold, you'd replenish it by selling more shares off from the brokerage account. Just enough. That would be for the following six months or a year. Okay. I mean, that's reasonable. If you met with a financial planner, they'd probably steer you in this direction of have enough money sitting outside of the market to live off of for a year or two. That way, if the market is down, you're not having to pull peel off of that at the worst time. And then just replenish it as you hit a threshold. I think that's a reasonable general strategy. Now, how long will that last? Based on how the market does and what she's invested in, those are the variables I'd want to nail. And for that, I would meet with an advisor to lay out a plan of if I invest this way, here's how long it would likely last, because could she live to be 95 at this stage? Oh, there's a very, she's 71, but going on 55, so I'm, yeah, mom, again, her, my grandpa, her dad was 95 and was an excellent help up to the past six months. His mother was 93. So she has very good genetics again. My mom is very youthful for 71 and the other part to think about is long term care. And I hope she never needs it. But if she does, that could wipe out her brokerage account pretty quickly at six figures a year. And so that's the thing I would caution against is this being the whole plan and nothing but the plan. You may want to supplement for now and let the brokerage grow and maybe you and your brother even chip in a little bit per month to help her stay afloat and not need to peel off as much because half a million dollars is amazing, especially at 71, but we don't know what the next 25 years holds with inflation, with health care. And so that's the part that I'd want to sit down with an advisor and map it all out. Give me every worst case scenario, best case scenario and help me make a plan that will survive. But thanks for the question, Chad. You're a good man. Yeah. I love a good sale. I also love the holidays, but if you're like me, sometimes those two don't mix well because six promo codes and a commercial later, it's so easy to convince yourself that you need just one more scented candle or a waffle maker, shapes like a Christmas tree, and some flannel pajamas. The temptation to spend more than you budgeted for is real. That's why I love having a bank that keeps my free spirit in check. And for me, that's Fairwind's Credit Union. With their smart bundle, you can choose a Ramsay-themed debit card that says live like no one else. It's a great reminder to stick to your goals and what you're working toward, especially in a season that wants you to spend instead of save. You get a no monthly fee checking account and a high yield savings account. You can even open up additional savings accounts like a holiday fund for gifts so you can finally pull the trigger on that waffle maker. Because staying on track for the holidays doesn't mean giving up your free spirit. It just means being smart about it. So get your live like no one else debit card by opening a Smart Bundle today at fairwinds.org/ramsy. That's fairwinds.org/ramsy. Ensured by the NCUA. All right, George. One of my favorite segments of the year is coming up. I guess favorite shows of the year and in a few weeks we're going to be doing a special giving edition of the Ramsay Show. I love when we do this. We want to hear stories from you about how you've given generously this season. Maybe you've tipped away Tris $100 or bought Thanksgiving dinner for a family who couldn't afford one. Or maybe you've even blessed someone with a vehicle. I think that'd be very, very cool to hear those stories. Maybe you've been on the receiving end and you've had your life changed by someone who's given generously to you. Either way, we want to hear from you. You can do so by going to ramsysolutions.com/ask and put giving in the subject line. We do this every year at Christmas time and it is definitely one of our most popular shows. It's one of my favorite shows and it's going to be coming up on December 17th. So start standing in your stories of giving today and let's start celebrating living like no one else so that later you can live and give like no one else. I love it. Let's go to Mary who's in Dallas, Texas. Hey, Mary. You're on the show. Welcome. Mary? Oh, Mary, are you sure she is? Yes. My bad. I picked up the wrong line, girl friend. Oh, okay. You're good. You're good. No, I've had a question. My daughter is headed into college next fall and my husband and I had talked about buying a rental property in the town where she's going for her to live in, roommates, all that stuff. But we don't have cash to pay that like in full. We'd have to take out a mortgage and so we were like, yep, we're not going to do that. But then I started looking at how much it's actually going to cost her to live there over four years. And yeah, that just seems like a lot of money to spend with no return on investment. So I guess what y'all's thought on that? Well, I mean, she's going to college, going to college alone, definitely I would not buy a house because after college, what happens? Right. Or she transfers and then you keep it as a rental by default in another state and now you're like, well, how did we get here? What are we doing? What's wrong with living on campus? Is there campus apartments or? Yes. I mean, there's absolutely nothing wrong with living on campus. I just, when I started seeing how much it's like 10,000 a year is what we're looking at and I'm like, go over four years, that's 40 grand. That's a lot of money to just spend and not have any return on it. But why does it have to have a return? Yeah. Everything's not an investment. The education is the, because we think about it this way, you're paying $800 for rent. That's cheap. And most places in America to pay $800 for rent is a deal. And so that's how I see it. As you're investing in her future by covering her rent, if you so choose, can she also work part-time to help cover some of the cost? Oh, yeah, for sure. And she has enough between 529 savings and scholarships. She, she has enough to cover her, all of her expenses. Oh, great. I did. I just, I just was, I just needed somebody else to tell me it's okay just to spend money and rent before you. Yes. That's totally normal. It's part of the education. And I think that's the way to think of it. This is not, her education is not your investment opportunity, not that you were thinking that way. But we get calls all the time where people go down that route and they get caught up and they buy a house, thinking, oh, her and her friends or him and his friends can live in it. And somebody drops out or somebody moves on or somebody doesn't want to come back the next semester. Somebody doesn't pay the rent. Now you're like trying to collect at the door and your daughter's like, you're making it weird, Mom. And then it's hard to sell the house off because it's right next to university and nobody wants to buy it. So, yes, Mary, just letter, rent an apartment or a letter at Lewand Campus. That is the easiest way. Lisa's in Jacksonville, Florida. Hey, Lisa. Welcome to the show. Hello. Hello. Can you hear me? Yes, ma'am. Okay. I just am trying to convince my husband to pay off both of our vehicles today. And I wrote out a budget and I just wanted to see if it makes sense to you guys to convince him because he's not really on the plan. You want to pay off the cars today or you want to convince him today to pay off the vehicles? Do you have the money to pay it off? Yes. You have the money to pay it off but I have to convince him to know that that's a good idea to do that. Have you ever been able to convince him of anything? Oh, yes. How'd you do it? What's your strategy? I have my charm. She can't say that. There you go. She can't say that on air, George. I'm just saying I think your charm is going to go a longer way than hour like math. So let's just put that out there first. But lay out the math for us. What's owed on the cars and how much is in savings? Okay, I have a whole layout for you guys, so I'm going to give you all the information. We currently have 48,400 in savings. We bring in 12,300 per month between him and I. I have 10K left on my car. He has 21K left on his car. So if we were to pay off both vehicles, that would leave us with 17,400 dollars left in our savings, but then we would gain $2,824 from all of the car notes and all the money that we've been putting forward. Wow. Yes. Okay. So now, after all of our bills, we are usually left. So all of our bills total about $8,664. So we're left with $3,686 left. That's our margin. But once we pay off the vehicle, our new margin would be $6,460. Wow. So. That's incredible. Once we start, yes. And once we start putting back the money that we're throwing towards the vehicles now, by February, we'll be up to $1,500.
to $25,872, and then we'll file taxes like we normally do, which we usually get back up really nice tax refund, which should bring us back up to about $36,872 in our count by. I'm convinced. April. You have me convinced. And I know George is convinced, but that's not the problem. That's where I was asking, is he convinced by numbers? Yes. Number's guy. The math is the math. It's pretty convincing that you guys number one, you're going to be okay. What would he be worried about? If you paid off the cars today, you had 17 grand left over, you have some newfound margin. What would be the rub with that for him? I think for him, so put back story, we had a six-figure savings account just a few years ago, and we were living abroad, and then when we moved back, he wanted to pay both vehicles straight out, but I had never seen that much money in our savings before and I was against it. Oh, so the tables turn, so well, then help me out here because if he wanted to do that before shouldn't it be a shoe in for you to present this and say, hey, I wasn't ready then, but I've looked at the numbers. We should have done this then when you said it, but I'm sorry about that. I'm ready to do it now. Would that be enough? It would be if our savings was back up to where it was, but because we've depleted it over the years, I think now it's a lot different seeing 48,000 in the savings versus over 100K in the savings. So I think that is what it's going to be. Right, but then your cars, I'm sure back then it would have taken more to pay your cars and all the debt off. I got to believe it's less now, right? Yes, it's definitely only debt that we have. So we live very comfortable lives, so once we pay off the vehicles, life will be really sweet. Yes, I will. You'll have it in less than five months, you'll be back to where you are today, but without any car payments for the rest of your life, given yourself a 34 grand raise. The question remains, when you say this to him, it's got to be in his money-love language. And if his money-love language is numbers, great, then this is fine, no notes. But if his money-love language is security or it's being able to travel or whatever the thing is that lights him up financially, you got to speak that language. So if his thing is that you mentioned you live abroad, if his thing is, I just want to make sure I'm being able to travel and go see the world and this, then we need to frame this in a way that he understands it'll let him do more of that. If his thing is feeling secure, then your goal is, I've got to make him feel secure in my whole pitch and make him show how this is creating more and more security for us, right? So what's his, what language do you need to speak for him? He is not a traveler, so we're a military, which is why we live abroad. And he is a very simple guy. We are both very simple people. I mean, we don't need to speak so much to make us happy. What a great pitch. We are very simple. Hey, I want us to have simpler, more peaceful lives. And these car payments are just living on our heads rent-free. We could knock them out today, free up so much margin. We never have to think of it again. Oh, nobody, anything. Oh, much for agreeing to the plan. I really appreciate that. Yeah, and you know, if you want, you could play this for him because that way you're not the one who has to, all you have to do to set it up is say, you know, I don't know your husband's name. But hey, Bob, I was thinking about how a couple of years ago you were saying we needed to pay the debt off. And I was kind of-- You were right. I was scared. I called in today. And it turns out you were right. I need you to hear this. It was the best part of my day. Play it for him. And then let us do a talk. I just don't hear that a lot, so that's going to be magic. Yeah, you know, Bob, you know what you need to do. Reach over and pay off those cars today. Right now, you've got the opportunity to do two of the best things at the same time. Be outrageously generous and keep more of your money away from the IRS. It's called the education freedom tax credit. Right now, there are kids all over the country who can't get the education they deserve because their families can't afford it. It's just not OK. But when you contribute through ACE scholarships, you'll give a kid a real shot at a better education. And in exchange, you'll get a federal tax credit up to $1,700 for individuals or $3,400 for married couples filing jointly, meaning it could end up costing you nothing to help. They've given over 120,000 scholarships to families almost $400 million. Because this is a no-brainer. Learn more about ACE and this amazing opportunity at educationfreedom.org. That's educationfreedom.org. You're a question of the day is brought to you by Ask Ramsay, your free AI money tool that provides personalized money answers based on Ramsay principles, visit ramsysolutions.com/askramsy. All right. Today's question comes from Rick and West Virginia, George. Let's see what we got. He says, "Am I crazy for considering getting a person alone to get rid of two of my three auto loans? One of them can't be driven, so selling it isn't an option. I currently owe around $44,000 on all of them. I know you say no new debt, but my thought was that I could get a person alone to cover the balances on two of them and have a lower interest rate on the third as well to save some money monthly to pay off that loan quicker. I already paid off 30 grand of credit card debt this year, so now I'm trying to get rid of these quote-dumb butt auto loans. Is this a good plan? Well, I don't know how many times on this show taking on debt to pay off other debt has been recommended. The only case I can think of is the old person alone to get rid of the underwater amount on a car to sell it, but he's saying it can't even be sold. It's not drivable, which tells me, can it be fixed and sold? I'd want to get some money out of that thing if I can, but getting a person alone to just to lower the interest rate, it's not the worst decision you could make. It sounds like he's already on the path. He's really taken this seriously, paying off 30 grand of credit card debt, so that tells me he's pretty gazelle intense. That's always a bigger factor to me. Is how intense are you versus I'm doing this to feel better about the debt? I agree. I think there's something that happens, though, and I think you and I may have had a call like this recently where I love to hear people who are really intense about getting rid of their debt. They're looking everywhere where they can squeeze money, squeeze quarters to try to pay this thing off faster. I think, unfortunately, sometimes it goes a little too far and you start looking for things that won't necessarily help. In this case, I think, gosh, can we just snowball it in, do it that way, versus taking out another personal loan? I'm also wondering why we're not selling there's three other loans. The third one. The third one. How many cars do we have? Can we sell some of those? Maybe get a personal loan to cover the difference? That would be my recommendation instead of just getting a personal loan and keeping the car. I don't know what's going on in the family dynamic. It sounds like they probably need these cars, but that would be my preference before I went out and took a personal loan to swap the auto loan out. Then there's also the other part where whenever you're consolidating loans together, if you have something to pay off, it does make the snowball a little bit tougher when you have those big chunks versus smaller amounts. Instead of $2,000, $2,000, $1,000, $1,000, $1,000 debt. You don't get that progress as fast. That's fast. How's that health, Rick? I do too. Let's go to Jonathan. He's in Riverside, California. Hi, Jonathan. Welcome to the show. Hey, how's it going? Yeah, how's it going, guys? Just to cut to the chase, I'm 21 years old living here in Southern California. I've been listening to guys for about four years, so it's been a blessing and you guys are doing God's work for sure. But my question is, my parents ask me if I'd be interested in buying a house with them and that would be co-signing and living with them right now. We are renting, but they have asked me if I'd be interested in buying a house and co-signing and putting the down payment with them and living with them ultimately. Can you say you've been listening to this show for four years, Jonathan? Yeah. Yeah. What's the answer? Yeah. For sure. The reason is that they would, it's not for me, I mean, it's not for themselves, but they say it's like, you know, it'd be for me and my brother. Explain how this, how does this benefit you? So pretty much their idea was me and my brother would get into market as soon as possible and that grew up by the time they retired, they would be, they wouldn't live here anymore, they would do an El Salvador. But what if, okay, let's play this out because a lot of times when people are thinking about these types of solutions, I'm putting solutions in air quotes, they're, they're only thinking about the upside, they're not thinking about the likely downside that is likely to occur simply because of life, not even anything bad happening. So let's play this out. You guys co-sign on this loan and for the time being, it's you, your brother and your mom and dad living in the house, is that correct? Correct, yeah. And then your mom and dad, they move, they move out and then suddenly, what if you and your brother can't handle the mortgage on your own? What happens then? What happens when your brother meets a little sweetie and decides, I'm going to go and get married and now you're left in the house who covers the mortgage? Or your job or life changes, you want to go buy a home elsewhere, you can't, your debt to income ratio is crazy high because this mortgage is on your record. Yeah, who covers that? And your parents.
- Parents want to keep the house, but you're ready to move on. - So they need you in order to make this house work. Is that the idea? Because of bad credit, low income, low savings. What's the deal there? Why can't they afford a home on the road? - Yeah, right on the mail. Pretty much, they've never, they've always earned good money, but it's been inconsistent. My mom's shooting sales and my dad's a truck driver. So it's always been inconsistent. And now that I have a good career and trajectory, they thought it would be a good idea and by the time they retire, I'd be making decent money. Parents are the counsel here. - Right, but do you see that all the negative downside is on you? Don't get me wrong. I think your parents are fine people. I don't think that they're intending to do something negative or bad to you, but this is a really negative bad thing and it will inflict negative and bad things on your finances. And at 21, you do not need to be taking the weight of a mortgage onto your back. 'Cause it sounds like if their income is inconsistent, there could be months where they can't pay. - Yes. - Now all of a sudden they're going, "Hey, can you spot us, bud? "We can't pay this month. "We'll get you back next month." Well, you get the house anyways as an inheritance. So I feel like, do we even need to pay? - And now you have the pressure of, oh my gosh, I gotta quickly go out and I'm supporting everybody. This mortgage lives and dies with me, right? - Now you and your brother are fighting 'cause you disagree on how to handle it. And so I've only seen it hurt relationships. I've never seen a cosine agreement where the relationships are flourishing afterwards. So if you love your parents, you tell them, mom and dad, I love you guys, I can't cosine. - This is not the answer. - You're on your own. - Okay, for sure, yeah. - And if that's the case, are you, and they're all renting right now, what's going on? - Yeah, yeah, so pretty much we're renting right now. - And there's nothing wrong with that. - Are you gonna move out eventually? - I was, and the reason why they're asking you right now is because I was engaged, but due to a lesser consensus, called off the wedding and whatnot. So my idea was that I was gonna live on my own with my ex fiance, but now that that's not happening, they kind of, you know, propose an idea that we could do something together instead. - Where's your brother living? - That kind of, my brother is, he's living with us as well. - Okay, why don't you guys go get a place together? Could you afford rent on your own? The two of you? - I think so, with how much I'm earning right now, I think it'd be, it'd be possible. - Are you guys chipping in on rent with your parents right now? - Yes, sir. - So what happens if you two move out? Can they afford this place on their own? - They would just, yeah, they can, they can. - Okay. - I would do that. I would move out of the parent's house. I think moving out of there is going to help them understand what they need to do for themselves financially. They can't continue to depend on you and your brother because you guys are going in the opposite direction. You're going in the direction of going away from them, which is a natural phase of life. And they're gonna have to figure out what that means for them, which is their natural phase of life right now. And I think it's totally fine if you and your brother want to rent together for a little while. But again, even with your brother, I would not think of buying anything with them. Even if you weren't co-signing on the house, this idea of we're all gonna live together and we'll do that so that we can all do the payment. There's something about that that it kind of traps you in 'cause it's like, well, what if you get a job over here and you want to move over there? What if you're, do you see what I'm saying? - Now I'm putting them out. Now there's just a lot there. - So it's, this financial co-dependencies, what we're trying to avoid. And it's not because anyone's a bad person, but the fact that they're relying on you in this way, financially as a grown adult is the scary part. And so you're not moving out to punish them. You're moving out to create some of your own financial independence and get away from this co-dependency. - Yeah, that's the tough part. So guys, time and time again, let's talk about co-signing real quick because we see it in many shapes and forms. And the truth is co-signing is among the worst things that you can do with money. Because once you've co-signed, you've then gotten to bed with somebody that even the banks have said, we don't believe this person will pay. We don't believe this person has the money to pay. We don't believe this person has the security to pay ongoing. We're not going to sign them. The only way we'll do it is if they can figure out someone who will carry the weight when they default. And that's when they come knocking on your door and say, hey, will you co-sign? If you say yes to that, you are 100% signing up for their payments in the long term. - That relationship has changed forever. - Forever. (upbeat music) (upbeat music) - If you have an aging parent who's been diagnosed with a chronic illness, you know how overwhelming navigating the medical system can be. Coordinating with doctors and insurance and trying to understand systems that were built to confuse you, all while still running a household, working a job and raising your own kids, it all feels impossible. Helping people in this situation is why solace exists. Solace pairs you with a health advocate who steps in and takes on the logistics, the appointments, the insurance questions, the medical billing questions, the frustration of, what does any of this even mean? So you can focus on being present for your family. And solace is covered by Medicare and insurance nationwide, making it accessible for people everywhere. Look, your only role in this season should be just being a son or a daughter, not a healthcare expert. If you've been carrying the weight of a chronically ill parent and you need help navigating the medical system, check out solace. See if you qualify by going to solacehealth.com/ramsy, that's solacehealth.com/ramsy, or click the link in the description. (upbeat music) All right, guys, you know what time it is? Open enrollment time, that's right, it's open enrollment period for health insurance and it's just begun. And if open enrollment or OEP sounds like alphabet soup to you, we're gonna break it down for you. Health insurance is open enrollment period or OEP is from November 1st to January 15th. So whether you're self-employed and need help navigating the market, or you're unhappy with the health insurance that your employer provides, you've got options, okay? Feel confident in the health coverage choices that you have by going to RamseySolutions.com/health-coverage. I'll say it again. RamseySolutions.com/health-coverage. Morgan is in Fort Lauderdale, Florida. Hey Morgan, welcome to the show. - Hello, hi, how are you? - Doing all right, how can we help today? - I was just hoping that you guys could clarify some of this HSA information for me. I'm looking at it looks like craziness between my husband's job and my job and all of these numbers and just trying to figure out, do we bring everyone onto my insurance? Do my husband keep the kids on his? 'Cause his insurance will not cover me anymore now that I don't qualify for insurance through my jobs. - Okay, so his won't cover you, but you have your own. - So you're wondering, should you go with a single plan on your own and he does the family plan? - Yeah, that's what, so it looks like, yeah, pretty much. Do I keep the kids with him on his? 'Cause it's looking like it may be $62, around $62 a month, but he'll get like a $250 credit per month. If we decline his insurance and or they would, if we end up just doing an HSA through his company, they'll credit $1,000 into the HSA for us. - So that's a benefit. Okay, let's look first, let's look first at the coverage and then we'll save the HSA as an afterthought. So, have you run the numbers out and said, okay, here's the options, if him plus the kids go on his insurance, it costs X amount of dollars plus my private policy. Here's what it costs a month and then have you run it out and said, okay, here's what it would be. If he was alone on the policy, me and the kids did separate policies and he got his $250 credit. - I have and, you know, to have everyone on my insurance with the best, you know, premium plan, you've got three kids. So it definitely ups it with an HSA plan, it brings it to around $1,100 a month. - $1,100 a month for everyone on my insurance. If it's just me on my insurance, it's $215 a month and then 62 would be on his. - That feels like a no-brainer. Where's your hold up? - Just mind would be much better in insurance. - Okay, much better as far as like you have access to the providers you want, is it a better out of pocket Macs, lower deductible? - Lower at a pocket Macs, lower deductibles. - How much lower are we talking? - Oh, okay.
for the family for mine, it'd be $1,500, and his is for the family, $13,000. And what would be yours for the family? Because yours also would have an individual in a family. Individual is $750, and family is $1,500. Okay, out of pocket packs or deductible, or is it the same? It looks like that's my deductible, it's not really telling me like an out of pocket max. I would search for that and make sure, sometimes the numbers the same, sometimes it's different. And then the question I'd be asking is, are you guys healthy? I mean, are you just going to, you know, your yearly check-ins and that sort of thing or is anybody having kind of a chronic situation where they're regularly going to the doctor and you know you're going to hit the deductibles? I mean, I had surgery this year, so I hit my deductible. You know, we do pay a lot for like private medicine. So, you know, my husband- It doesn't go through insurance? That does not go through- So you're paying for that anyways. So here's, my math says you would save 10 grand a year by doing the second option, which is you cover yourself, he covers the rest, right? Plus, you're the one with the health concern of the ongoing that you, you're the one that needs the lower deductible. So now you have a, you have a guaranteed side with 10,000 in savings, right? Because you're going to have lower premiums. And then you have the variable of what if we do need care and we start to bud up against this deductible or out of pocket max? So those are the two things that I'm currently weighing and personally, depending on your tolerance and health and family situation, I would be going, I'd rather have a guaranteed savings of 10 grand a year and have the emergency fund ready to go or HSA ready to go to cover some of this deductible in that pocket. Because this, does the HSA is it on top of the insurance? It's just, it sounds like it's a benefit that he has. If you guys want to stock my money away in an HSA and you filter, filter your, filter any of your medical costs through that. There's a tax savings there. It's tax-free money and it sounds like they're willing to give him a credit of $1,000 because you can also put, I think this year is eight, not two. It's 9,000 for 2027 for family plan and 4,500 individually. If you have a high deductible health plan, then you have access to the health savings account and it's a great way to stock away money, triple tax advantage money goes in tax-free. It grows tax-free when it's invested and then you can take it out tax-free for qualified medical expenses. So it's a really, it's an awesome tool that you have access to with that high deductible health plan. And the investing portion of it, that's kind of a baby step four and beyond action. But just, if you want to filter the costs through there, that's a wonderful way to save on that. Yeah. All right. But that helps. And a five minute call to help you navigate such a difficult and overwhelming and complicated process, which is open enrollment. I feel your struggle. The kids are going to need braces coming up. Is that covered? Does he have dental included? I don't think braces are going to be covered either way. It does show that I think that you're going to have to look for separate policies if you want dental. If his includes it, I think that's great. Either way, I still think Georgia's plan is the right way because with that $10,000 savings, all of that is going to help you to save up for those things on down the line braces being one of them. And unless one of these kids, you know, is going through similar health struggles where they're in and out of the doctor lot and you know you would benefit from a much lower deductible. I think having the kids on his plan and you do them your own separately. To me, that's almost a no-brainer. Yeah, it makes the most sense. But for everyone after listening, an easy way to think about how to choose healthcare. Again, it's so dependent on your family situation, but estimate your yearly medical spend. This is a difficult thing to do, but you can kind of go back and go, all right, our general spend on healthcare expenses is $5,000 a year. Okay, cool. Now let's add up the real cost of each plan, which is going to be your premiums. That's what you pay every month for the pleasure of having the coverage. And then the deductible, which is the part that you're going to pay in before any health insurance company kicks in and starts paying as well. And then check your out-of-pocket max. She mentioned there's a really high out-of-pocket max of 13 grand as the most you'll pay and then insurance takes over from there. For the family. Exactly. And then make sure your doctors are in network. And so if you need care from a specific provider or hospital, you need to make sure that that's covered in out-of-network because those medical bills will start racking up. And so those are all the pieces, the four pieces you want to look into before selecting a plan. You don't just want to choose the cheapest one. Please don't. Now if you're healthy and you can just go with a high deductible health plan, lowest premium highest deductible, that's going to be the best for cost savings. But you've got to think about your own health care, your family's health care, and what's going on that year with your kids. If you're going to have a kid, like we're going through this right now, but if you're going to have another kid, you got to select a plan that has your hospital in network. That's right. That's right. So there's a lot of variables to consider. And it's great. The HR would love to talk about this with you by the way. They don't get talked to a lot. So ask your HR folks about their health plans and how to navigate that. And if you're self-employed, yeah. If you're self-employed, you can check out health trust financial that'll help you shop different health plans in your, you know, that you're looking for the help shop them around. Or you can visit RamseySolutions.com/health-coverage. I mentioned that earlier. That's another good resource out there. And remember, open enrollment period is now November 1st through January 15th. So if you're working, you probably got the email. I know I got it, George. Time is ticking. And I was like, all right, let me look at this. Breathing down my neck to make my selections. I know. I made my selection and I already did something wrong. They emailed me. They're like, I don't think he meant to do this. So just know it's one of those things, guys. Even Jade can screw it up and she's perfect. Even I. Welcome back to the Ramsey Show here in the Fairwinds Credit Union Studio. Still taking calls about your life, still taking calls about your money, the numbers, triple eight, eight to five, five, two to five. We'd sure love to hear your call. Rachel's called in. She's in Colorado Springs, Colorado. Hey, Rachel. How can George and I help today? Hi, Jade. Hi, George. I just have kind of a quick question here about paying off debt. So my husband and I are currently in the step of our debt snowball. And our next lowest balance is my auto loan. And I'm wondering in regards to making those payments, is it better to set aside all of our margin throughout the month in kind of ear market in a separate area and then make one lump sum payment every month? Or is it okay to make multiple small payments every month using that extra margin or money from side hustles? And the question kind of comes from the fact that our auto loans accrue interest every day. And I don't really know if it makes a difference. I love the micro payment idea. I like the idea of you, you meet the minimum, right? So you pay the minimum payment. And then as money comes, you're just forking it out there as you get it. I like that on many ways. If the balance is if interest accruing ever, if interest is accruing every day, well, there's your benefit there. And also psychologically, I just think that it causes you to feel more motivated. When you're making payments every day, you feel like you're attacking this debt every single day. And then there's the idea of you're making sure that money is going where it was intended for people who really struggle with sticking to their budget. You can say, okay, by the end of the month, we should have $300 earmarked for this. And then they look up and they go, oh, we must have gone over budget somewhere. Suddenly that $300 is little down to $150, right? But if you're doing it as you get the money, you're forcing yourself to stick to that budget. You're making that the priority. I love that, George. I've seen this trend on social media. They started talking about micro payments. Come on now. Gen Z will come up with a cool neighborhood. Sam and I did that. I thought it was just paying the debt off early. Well, a lot of people are now kind of doing these side hustles like Rachel's doing where they get income in different ways and random days. It's not like two pay checks a month. So Rachel, how often are you getting extra money at this point? It's actually my husband. He does some side hustles and I would say it comes in maybe two to four times a month just depending on how often he can do it. Great. So if that's the rhythm, you might look up and say, all right, once a week, every Friday night to celebrate, we're going to make a micro payment against that auto loan with whatever margin we found. Yeah, I love that. I didn't even know that there was a term for it. Yeah. Again, Gen Z has come up with everything even though we're like, we came up with that before you. They came up with a cooler name. They've better marketing. That's the truth. I love it because it really is an exciting way to stay on top of the debt and it's motivating because when you get money and you're like, hey, it's 18 bucks, but I'm throwing it here or it's $70, but I'm throwing it. It motivates you. You start looking around. You're like, can I sell something today? You get to the point where you're used to doing something, you know, whether it's every day or every third day, and now you're going, well, gosh, can I sell my bath mats? Can I do something to get some money and make a payment? And so I love that. Anything that keeps you motivated, I think you should do it. And yes, I did sell my bath mats. Wow. I got $5 for it. That's a fun exercise for anyone listening. Imagine you could create $30 of newfound money every day selling stuff on Facebook. What can I find around the house to sell for $30 total on Facebook marketplace? That's $1000 in a month. There you go. You do that every day. That's a great challenge. Where am I going to find a thousand bucks? You probably have a thousand bucks worth of crap laying in your house. What's in the house?
go in the attic, go in the closet, find clothes, have the tags still on it. Yep, I did that this weekend. I went through my closet, I was switching out into the winter clothes, and sadly, there were clothes with tags on it that I wasn't going to keep, and I was like, I should probably go on one of those sites, like, vintage or somewhere, and so on. So my wife used one called Threadup, where you just put it all in a box and just ship it off, and they just send you a check for whatever they sold. You don't even have to. They can donate the rest. Really? I need to do that. So inside a good well, nothing wrong with good well, but yeah, you should just get a check for like 300 bucks and that becomes new money to buy more wardrobe that will end up in a box somewhere. So that's fun. I put it all in a box and sent it to my sister. She'll get to deal with it. That's so nice. Well, if she doesn't like it, she's going to be like, why'd you send me this crap? Jade's fashion is on point, so she got some swag in there. Lucas is in Atlanta, California, and where's that GA? It says CA. I think we mean at Atlanta, Georgia. I don't think there's, Lucas is there in Atlanta in California as well? No, no, I'm in, I'm in Georgia. That's what I thought. Not sure about California. So I've taken Ramsey's courses back in college, and so it was free, like, chip for the card, and he had a lot of mutual funds. He talked a lot about mutual funds, and I just like, I tried to get my toes in it. I just, it's really hectic. I don't know what's the right, like indicators for a good mutual fund. Well, you got George Campbell on the show, and this is his bag, capital B. So nerdy. So nerdy. So you know the four types that we teach, right? No. Let's walk through it for you and everyone listening. So for over 30 years now, Dave has recommended these four types of mutual funds. It's the same types he invests in. Now, we've never recommended a specific mutual fund, a ticker symbol, because we don't want you investing in something because Jade or Georgia, Dave or Rachel said, go invest in this as a great fund. So what you can do is start the research process, which again, this doesn't have to be a long-winded process. Do you have an employer-sponsored retirement plan right now? Yeah, I have a matter for a one case. Great. So how, look, go look at the funds that are in there. There's probably like what, 20 funds or something. I think so. So now by process of elimination, you can remove anything that isn't Ramsey. So if you see the word bond fund or target date fund, you can remove those. That's not what we're looking for. We want good growth stock mutual funds across these four types. Number one is going to be growth and income. So these are large. They sometimes call them blue chip companies. They're steady. They're not moving. They're not very exciting, but they are steady. Then you have your growth funds. That's sort of your mid cap. They're not the biggest companies in the world. They're not the smallest, most aggressive. Then you're going to put 25% into aggressive growth, which is sort of the wild child. You might see some high highs and low lows. Then finally, we end cap it with international for your last 25%, which is companies that are based outside of the U.S. And so if you just split four types across 25%, you're going to do just fine because you're diversifying on top of diversifying because that each fund has 90 to 200 plus company stocks within them. In Georgetown, why does he, I'm throwing you the softball, why does he want to do those bond or those target date funds? Lucas, how old are you? Twenty six. You're twenty six. So target date funds, what they do is they move you over time to more conservative investments. And what happens is instead of getting the market right now is up over 10% year to date. Instead of seeing that 10% over time, you're going to be 60% bonds, 40% in stocks in the stock market. So all of a sudden, your returns are going to turn from 10 or 12% down to six or 7%. And you're going to look up and say, "Whoa, where's my return?" Because of things diminishing, why? And so bonds are meant to, for people who want that stability, but we are looking for the long-term and we stay 100% equities. Even Dave Ramsey, to this day, is 100% in equities, not in bonds. And that's because we want to see that long-term growth forever. And so if you just do it that way, and even a good S&P 500 index fund, we'll cover a lot of what we just talked about. But you can beat the market with the mutual funds. If you think about this way, a single stock is like betting on a single horse. Instead, a mutual fund is betting on the entire racetrack. So that's the way to think about it. No matter which horse wins, I'm going to win today. And so that's the value of a mutual fund or an index fund. They're very similar. Index funds are just passively managed. It's just going to say, here's the top 500. A mutual fund is a some actual advisor saying, "We're going to hand pick what companies we think will beat the market and invest in that." And so that's why we recommend those over the last 35 years. Go to ramseyslutions.com/guide. You'll get our free investing guide. We'll also drop a link in the description of this episode. Great question. It's the holiday season. So here comes all the excuses for not sticking to a budget. It's just this one time. It was on sale. And how about this one? I'll start fresh in January. Yeah, right. Money's not a math problem. It's a plan problem. And without one, your paycheck will disappear on you so fast. That's why we built every dollar. It helps you give every dollar a job before it's spent. So you're telling your money where to go instead of wondering where it went. Every dollar is backed by the same proven plan that millions of everyday people have used for over 30 years to beat debt and build wealth. Get on a money plan now so you can get into the new year already making progress, not excuses. Start every dollar for free. Download it in the App Store or Google Play today. Well, guys, we want to hear from you. You guys are the listeners. You guys are what make this show go round. We love when you call in. Keep doing that. Triple eight, eight, two, five, two, two, five, but we also want you to jump in the comments. So if you're watching on YouTube, if you're watching on Spotify, tell us what connected with you, what you resonated with on today's show. We want to hear from you guys. Keep that conversation going. Next up, we have Zander who's in Memphis, Tennessee. What's up, Zander? Hey, how are you doing today? We're doing all right. How can we help? Yeah. So I had just gotten laid off of my job. The rents do kind of low on money. And I got to offer for a pretty high paying job out of town. And she doesn't really like it whenever I go out of town for anything. I'm just wondering if I should take it. Oh, my, my girlfriend soon to be out beyond today. Oh, okay. So she's like, stay home with me. It doesn't matter that this rent is due. Yeah. She's working so time. She is. Yes. Okay. So are you guys splitting rent? How does that work? We are. We are splitting rent. We have roommates. And we all together, we pay 1,700 a month. So give or take, I pay around $600. She does as well. Okay. Okay. So tell us about this job out of town. Yeah. So I'm sure that you know about the big old data center Booms about just building, they're always building them. I had, I got a job offer for one. It's for Fiberpool and Fiber and, you know, laying it down. It's $28 an hour, $120 per dime, and seven hours with 12 hour shifts. Now I already did the math. That comes out weekly to $3,000 a week, almost $190,000 a year. If I, if I was to stay there for the whole year, you know, granted you have to take it. Obviously, I'm not going to do that. Where is it when you say stay there? Where is it? It's an Alabama, Montgomery, Alabama. Okay. Uh, quickly. How is that a drive's distance from Memphis? How long is that drive wise? Not too too far. It's give her take, it's give her take six hours. Okay. Give her take six hours. So what are you thinking? I'll come home on the weekends. Like what are you thinking your plan is, or she'll come up to visit you? What's your? Right. I told her she could do that because if I did want to make this, you know, a real thing because after Alabama, I have to go to New Mexico for another data center that I have to do. Okay. So you're setting them up all over the globe is the idea. We're all in the country. Montgomery's just first. Okay. So you're going to have a life on the road. You basically won't be. How much? How old are you? I'm 18. How long you been dating this girl? Today with our one year anniversary. All right. Can I, um, I'm going to be your big sister right now. And I have two, I have two brothers. I have one brother that's seven years younger than me. And I have a brother that's four years older than me. So I'm going to treat you like my brother that seven years younger than me. And I would put him in a headlock like a playful headlock. And I would tell him what's what? Which is your 18 and you're trying to get your life started. You can't hold yourself back at this stage in life. You're not even engaged yet. You got to go, you got to go where life takes you and you got to go try things. And I would encourage her to do the same thing. By the way, if she were calling in and she's like, man, I got this opportunity. This is interesting to me. I'm interested in doing this. But my boyfriend doesn't want me to go. I would tell her, go anyway and go do your thing. And
They'll be waiting for you if it's right on when it's over right that's my that's my take on this is the job It's self-interesting to you or is it just the money? Is there more to this because I like this as an opportunity for you Yeah, so I really do I like doing the kind of work that are they're hiring me for I would rather do Pipe fitting and welding the stuff that I actually have Certifications for whenever I was learning it, you know, I really liked it, but why can't you get into high fitting and welding? There's good money there - really good right? Well, they're they're list for that kind of that kind of trade over it where I want to go their list is always just full So I just kind of had to get in while I fit in But later down the road that is what I am going to go into once I just show myself But are there any other local jobs you could do using those skills that keep you home? There are, but they they just don't pay as much, you know, what do they pay? They're paying probably $20 an hour. They're not paying for doom I probably say I'd pull in You know 750 bucks a week and I'm just tired of having that kind of pay, you know I want something so what are your actual goals here financially? Yeah, what would you do when you see a hundred ninety thousand a year tell us Here's what I could do with that money guys. Here's my plan. Tell us what that looks like for you I'm honestly if you want me to be honest, I'm real simple-minded. I she already knows this I mean, I just want to have enough money to set myself up in the future to where if anything happens You know whenever we have kids, you know, they're taking care of Stuff like that. I'm really simple-minded. I don't need much All I really need is a vehicle to drive and make sure that I'm fed and a place to live and I'm good And you know, this is the woman you're gonna marry 18. Yes, I do. Yes, what she do She's a server. She works full-time so she can can she travel? Were you travel if she's a server? Well, I told I did tell her I said, you know, look if you know, I'm gonna I'm going to be making pretty good money if anything happens I want you to stay for a couple of months just over there in our hometown where we're living at And if I really like what I'm doing and I know that this is safe I want you to come with me and she said hey, I have no problem with that But I just think that those first couple of months are gonna be harder. Yeah, well What's her aspirations? What she want to do ultimately because I know she doesn't want to be a server ultimately What she studying or working to become? She She really wants to be a stay at home mom But if anything she she wants to just keep on serving because she I mean she likes it She makes pretty decent money off of it She's pulling in probably around $50,000 a year, but for a server. That's not even really too terrible I kind of feel like for those reasons I would pursue this I think and I would do what exactly what you said, which is let me try it See if we see if I like it and if I do yeah, where she is willing to go on that journey You can go stack up six figures real quick in a year You can survive anything for a year 100 percent people getting out of debt. Don't see their families much for a year So at 18 you can definitely survive this and go see if you like it and try it out And if it's wearing and tearing on the relationship go find some local work and welding You always have that. That's what you really want to do But for the meantime at 18 this is the only time you have energy and time agree I think you got to do this and I think that you guys can figure it out Relationally, and it would be different. I think it would be a different conversation if she were also Trying to pursue something that was keeping her Stationary, but it's not so there is an opportunity that if the time comes for you to go to New Mexico Why can't she go over there? She can continue to serve there do the the type of work she likes and if ultimately she's wanting to be a stay at home mom Then at least short term. I think this does work out for you well Right, and I'm not always going to be making $28 an hour at the end of November I'm going over to New Mexico. I'm first going to Alabama But if then November I'm going to New Mexico and they're paying me $40 an hour with more per deal So this goes higher and higher yeah See where it takes you. I mean that's gonna be valuable experience with where Jobs are headed. This is gonna be invaluable for you at 18 to have this kind of experience on the resume Absolutely, and I'm also thinking about You know what you said earlier, which is I really want to be able to set us up if I were you I'd be sitting down and I'd be writing kind of a detailed plan of how I want this to look That way I'm entering into this season with a lot of intentionality with what I know I want to do with that money Because one thing that can happen zander is when you start making more money than you then you've ever made You can start to look at it and you see all these cool things you can do with it that are more lifestyle type things And for what you're talking about I would be so focused on number one Making sure I get this woman a very nice engagement ring when the time comes I'd be focused on making sure we're saving up together Money that's gonna be spent on our wedding and then the the next thing I'd be focused on is okay You know if we're doing this thing we're getting married and this is happening within the next six months to a year Next thing I'm thinking about saving a down payment for a house, right? And if you're gonna be making 40 bucks an hour That's gonna be my number one goal some down payment money not cool car money and please not cool car money Do not have a baby before you're married. I am begging you if you want this relationship to last You want this family to be successful wait until you're married to have a baby I would say moved in together, but we're already there. Yeah, do not have a baby or else you ain't going to North New Mexico. You're going home You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best If you're ready to learn how to make your money work for you check out the smart vester program Smart vester can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies and more Whatever your goals your pro will take the time to explain your options So you never have to invest in anything you don't understand head to ramsy solutions dot com slash smart vester the get connected Ramsey solutions is a paid non client promoter of participating pros learn more at ramsey solutions dot com slash smart vester Well, I'm so excited because dr john delonies building the marriage you want is available for pre order right now Nobody gets married planning to become roommates. That's the truth But life does get full full of kids work packed schedules and one day you just kind of look up and realize man This is what's happened. I don't even know the person that I'm getting in the bed with every single night That's why john wrote building the marriage you want He explains why marriage can feel so hard, but why yours still matters and what you can do to make it great again Giving couples practical tools to reconnect and build a stronger marriage So if that's you you can pre order now today for 2499 and lock in 100 dollars actually more than a hundred bucks And free bonus items you'll get things like the enhanced audio book you'll get early access to the ebook Which means you'll get that delivered two weeks early Plus you'll get instant access to his exclusive video dr john delonie on connected communication is what it's called so get your copy now at ramsey solutions dot com slash store Or if you're watching on youtuber podcast go ahead and click that link in the description to pre order to pre order your copy Today All right Ralph is in Columbus, Ohio. Hey Ralph. Welcome to the show Thank you very much, Jason George. I appreciate you some expert advice from you My wife and I are in our 60s and retired and we want to give a substantial gift of money to each of our three kids It started out with one of them wanting to buy a house and I thought you know maybe up to a hundred thousand dollars through each of them and I just want to make sure that I'm doing it right and I'm not overwhelming them and the youngest is 24 and um Each and I is changing jobs every couple years I don't know whether to give the money to now to them or There's a side for later Are you thinking about just giving them Cash Disbursements or are you wanting to do something like hey, I'll match your down payment or I'll kick in for the wedding How are or you just want to give them cash I'm simple just give them the cash they need it now and If I give it one I give the other two equal amounts Okay, so you got three kids the youngest is 24 You're saying I don't care what they use this money on it. You just want to help their adult life. No I want to help them. Yes, I would definitely want to Have some say hmm not some say but Influence a little bit in what they do. I know the oldest one Will use it wise. What's really wise?
So what is wisely in your eyes because they might see that differently of whatever their goals are. So do each of them rent right now and you want them to buy a home? The oldest ones are home and they'll either invest or make some, you know, try to pay off their debt. I know they would do it wisely. The middle one would use it for a down payment if I suggested that way. And the youngest I'm sure he's okay with money, but just when they go buy a Corvette, is that your fear? I really doubt that, but yes, that's a fear. I've just they go blow it on toys and experiences and then it's gone within a month. Sure. Well, it's okay to set conditions and structure and timing to all of this. It doesn't mean you have to give them all $100,000 on the same day for the same thing. It might be situational, you might wire the money directly to the title company for that down payment. And so you can set it up in a way where it goes directly to the thing you want to help with. And that's up to you. If you're worried about the money disappearing or what they're going to do with it, will they actually pay down debt? Are they going to invest it instead of paying off the mortgage? That's the part that if you're worried about controlling, you can control those things. And I think that's a helpful thing to be able to do, especially with the 24-year-old. I think ultimately having a little bit of, you know, you're in your 60s, you've got a little bit of wisdom in the areas that they're still acquiring it. And so if you can direct that wisdom along with those funds, I think that that's actually a really helpful thing to do. It's not about being controlling so much as it is about saying, "This is a wise thing to do with money. I know that." And it's not going to harm you in any way if you do this. And I think that's totally fine to do that. I would have a solo conversation privately with each of them talking about where they're at in life, what their goals are. Do you have that anyways? That's a good idea. Because then you can find out the 24-year-old, what they're really, they might have never shared this with you. Because you never really asked. And you can get them to open up and say, "Well, really, I want to start this business here and I want to pay off my debt." And now you know the exact things that you could give to that would make the most impact. And so I would personally be doing that. If I was in your shoes, I'd be talking to each kid having those conversations and then figuring out, "Okay, I want to help with that exact thing. I can wire the money." When you're closing on the house, you've got a hundred grand right there. That's right. You want to wire over to the title company. I love that. They're really going to get the full value out of every single dollar that you're being generous with. Thanks for the call. Next up, we've got Ashley, who's on Boise, Idaho. Hey, Ashley. Welcome to the show. Hi there. Hi. Okay. So my question is, should I sell my company stock that I have to pay down, either pay down my house or to max out retirement for the year? Because I haven't done that yet this year. Wow. So total, I have about 175,000, but out of that, only 95, little over 95,000 is available right now. It's fully vested. Yeah. Fully vested. This is stock that was just gifted. Okay. What are the tax implications of you? Let's see you sold off all 95,000 today. Well, that's, so I haven't actually looked. I was actually going to ask that question to you guys, too, is where I, if I do do that, or would I start to figure out what the taxes would be? Well, you're going to look at your basis, which is what you paid for it, and then you're going to look at the appreciation and the gain, the realized gain you would have. And then you're going to be looking at either short-term capital gains or long-term capital gains, depending on how long you've held that asset. So longer than a year, it's going to be long-term capital gains. That's your best-case scenario. Short-term capital gains is tax to your ordinary income tax rate. Long-term capital gains, depending on your situation, could be zero to 15%. And so I definitely would offload the company stock anyways, regardless, just because of diversification. Okay. Yeah, it's a significant amount, and then the company is, it's a volatile industry, and so it goes up and down. How much is your mortgage? So we owe $380 on the house right now. Okay. And you're married? Yes. What's your total household income? And combined, we're about $220. Fantastic. Okay. So you said the other option was to finish maxing out your 401k, but on 220k, wouldn't you max that out anyway, just doing 15%? So that was, we're not quite up to the 15% yet. We just finished paying off debt at the end, beginning of this year, and so we're ramping up to the 15%. Do you have your emergency fund in place? We do actually, and then I was also going to ask, I have got a decent bonus this year that put us about 30,000 over our emergency fund, what we need, so there's also that as well. So I like the idea. I mean, you're walking the baby steps. I would do, I would start, I would turn up your investing all the way to 15% if it's not there. If you don't max out the account this year because you started later in the year, that's okay. If I would just turn on the 15%, I'd set it and forget it, and at this point, you're on baby step 45 and 6, which means once you've turned it on to 15%, the rest of the money can go towards paying off the house in whatever amount that you see fit, right? So if you're like, hey, I've got this extra 30,000, let's put 15 to the mortgage and let's, you know, I don't know, take the trip that we were planning on taking. I think that's fine too. Maybe set aside some of that to pay the taxes on the stock. Yeah, there you go. That's a great idea. So I like this plane either way of, the baby steps are baby step 4 and invest 15%. If you've got kids, let's put some away for the college funds in a 529 plan and then anything else, let's attack that mortgage. You bring that thing down to 280 from 380, you're going to get a pep in your step. And you're going to want to go fast, fast and the next coming year for sure. I like that. Every year, just sell off the stock and throw it at the mortgage. I like that plane. So that's a great plan. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show, whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. Ramsey shows scripture and quote of the day, "First Corinthians 2.9, it is written. What no eye is seen, no ear has heard and no human mind has conceived. The things God has prepared for those who love Him." See as Lewis said, "Hard ships often prepare ordinary people for an extraordinary life in destiny." I added life in there. He just said destiny. I thought he was going somewhere else. Sort of poetic creative license there, Jay. I know. You know how you read something and you're like, "I know where they're going." And your mind just went there, jumped ahead. Oh boy, sorry about that. Becky is in Boise, Idaho. Hey, Becky. Welcome to the show. Thank you so much. Yes, ma'am. How can we help? Right now I'm paying an extra $833 a month or about 10 grand a year on my mortgage and I'm wondering what you think about buying gold as collateral and having that to potentially pay off my house if I needed to, you know, something that's going to have, you know, probably a much higher return on my investment, on the money, I guess. So the goal is to pay off the house and you're wondering if you should use gold in order to do it, accumulate the gold and then sell it off? Well, I would like to pay off the house, $10,000 is kind of a compromise right now with my husband. Our interest rate is 3.375, which is very low. And with inflation, he kind of thinks it's, you know, kind of crazy to pay it off because it's very cheap money. So he's agreed to be used extra $10,000. I'm wondering if I had convinced him to put more away if I said I was going to buy gold and then that would be the collateral and would be a higher return, does that make sense? It does. I think you guys are investing in like a mutual fund and a brokerage account saying, hey, we're just going to invest instead because we can make more in the market and then we'll sell it all off and pay off the mortgage. I just don't think that the argument he's making, I don't see him ever actually selling off, whatever it is that you invest in to actually pay off the mortgage. That's my thing here, whether it were stock, whether it were gold, whatever it is, I think he'd always want to hold on to that because of the interest rate on the mortgage. Is that fair? Is that the guy that you're describing? Yeah, he likes to take calculated risk and yeah, probably.
So you think that's-- Well, I say that to say, I think we have to approach him in the right way. Because if you're telling me, hey, he doesn't want to put more money on the house because of the interest rate he'd rather invest that money, then that's telling me something about him, which means we've got to come at this. If your goal is to pay off this house, we need to come at this another way, that's going to convince him to do it fair enough. And you don't think it will be gold. OK. I mean, I wouldn't recommend buying gold anyways, no matter what it is. And you're paying above spot to buy it. You're going to sell below it. You still owe the bank. You've got to turn the gold back into money. And again, as you accumulate all this gold, you're going to go, I don't know that I want to sell it off. That's right. He's going to like that. Whereas the mortgage payment you pay off every single month, that's a four savings plan. And so you're taking the human discipline part out of the equation by just going, I'm just going to pay down the mortgage. I know it's quote unquote cheap debt. But man, it's going to feel good to have that thing paid off. How old are you to our forty seven and forty eight. But we just built the house three years ago. And it's it's a big mortgage that we built a $1.1 million home and we owe six sixty three. And OK, so this is a this is a bit of a journey to get this thing paid off. So you're going to what's the point? It's $10,000 a year. We're barely going to make a dent. Is it just feel like too big of a mountain to climb? Well, he has a lot of we have a lot of extra at the end of the month. But he is kind of wanting to get into other things. He wants to buy a build a shop. He's raising beef. He's retired military and he never actually spent any money before. And now suddenly he wants to do all these projects. And I kind of want to let him, you know, sure. Is it on a 15 year fix? Or is it on a 30 year? It's on a 30 year. OK, so what I'm hearing, I'm hearing a couple of things here. So when I'm thinking about paying off a mortgage, my brain goes from investing mode to safety, security, what I want my life to feel like mode. Peace mode. There are certain things that we do with our money. The purpose behind it is not to make money. The purpose behind it is not to gain interest or anything like that. If I go shopping and I see an outfit I like, I buy it because I like it. I like the way I feel and I like the way I look at it. I just like it. It feels great to me, right? And there's some things that we do like that with our money. And in many ways, when it comes to paying down a mortgage, that's part of the equation is, I just want to feel good in my house. I want to be debt-free. I want the feeling of not owing anybody anything. And that's what I want to buy with this purchase. Does that make sense? Yeah. And so that's kind of what this is like. And that's the argument that you're going to bring to a table with a spreadsheet guy or with a nerd guy is, I don't like the feeling of debt. And at some point, it's not going to be today. And it might not even be in the next three to four years. But I want to know that we're making strides to getting this thing paid off. We're going to continue to invest. We're going to continue to build our nest egg that goes without saying. But I also want to know that we're taking strides to get this out of our life because I don't want this here for the next 30 years. Do you? Right. And that's kind of the, that's the communication path that I would take. Because if you just take this extra money and instead of throwing it at the mortgage, you buy up gold, you're going to turn around. He's not going to want to sell that gold off. OK. And if I know he wants to make more money, but also go look at your amortization schedule and that mortgage and see how much went to interest this month, you'll throw up. A lot. So have a throw up bucket next to you. Because what's your mortgage payment? 32 or five. 32 or five. So the majority of that is going to interest right now. Since you guys just bought this house. And so the sooner you pay it off, you can show them the interest savings. If you think the math will convince them, you can show them the fact that we're going to need to retire one day. And right now on a 30 year fixed rate mortgage, we're looking at 77 years old. Maybe we'll have the mortgage paid off. And the amount of interest you will have paid throughout that time frame is to George's point sickening. It'll probably more than you paid for the house. By the time it's all said and done. So that's where I'm going. Let's set a game plan. Let's have him pursue his hobbies and fun. Let's also set aside an intentional goal to have this mortgage paid off before we retire in maybe 11 years. That's about 60K a year going toward the mortgage between your payment plus extra. So what if we doubled the mortgage payment? That'd be pretty cool. Yeah. 6400 a month going towards that mortgage. That'll get knocked out and save a whole bunch of interest and you still will have money left over. Absolutely. I like this plan. I do too. Thanks for the call. Let's take Caleb. Caleb, you're against the clock. Thanks to your question quick, okay? Okay. Sounds good. How are you guys doing? Good. How can we help? So I'm 20 years old and I wanted to build my credit and so I got a $22,000 car loan and I'm just trying to figure out what's the best way for me to pay it all off as quick as possible. So did you just decide that this whole business of building your credit is for the birds? Yes, because you did it and now you're getting out of it immediately. Yeah. Well, so I started listening to you guys in a bunch of other podcasts about money and I really just wanted to take it in my own hands to get rid of the set. Yeah. What do you make of your debt? So gross, I probably make $66,000. And what's the car worth? Have you looked at the trade-in value and at the private sale value? It could be anywhere from 18 to 22. Okay. I love that. I think there's a simple explanation right here in front of you and it's to sell the car and I try to sell it for what it's worth, 21, 22. And in the meantime, while I have it for sale, I'd be taking all the margin that I have Caleb and I'd be stacking it up because once I sell this car, I'm going to have to buy myself something and cash. Do you have any money saved anywhere? I have about 3,000 into investments and then I have probably 6,000 just saved in a high yield savings account. Is that 3K investments? Is that like in a Robinhood app or one of those? It is, yeah. How did I know? Okay. Is it like a single stock or something? What's invested in? So I have ETFs and then I have a little bit of Bitcoin and then I have S&P 500. Okay. Well, if you just found your car, you just, I mean, that's nine grand right there. You could allocate toward a car. Yeah. So here's the deal. If you're going to pay it off aggressively, you could keep the car. But man, this is weighing on you and it's a jade's point. You could reverse this decision pretty easily and pay a very small stupid tax that one day you'll laugh about. But if I'm in your shoes, I want to get my life back at your age, making good money. And then you can begin investing once you have a fully funded emergency fund. And just forget this idea that you need credit. Absolutely. Well, thank you so much for the call and thank you for listening today. Thanks to the folks on the booth and remember, ultimately there's only one way to financial piece. And that's to walk daily with the Prince of Peace, Christ Jesus.
Podcast Summary
Key Points:
Introducing a budget can feel restrictive, but framing it as a tool for control and freedom helps both partners accept it, especially after years of unmanaged spending.
A zero car payment goal is achievable for high-income households, with the 50% "wheels and motors" rule focusing on value, not payments, and the 25% mortgage rule ensuring financial flexibility.
Emotional reactions to budgeting stem from fears of losing control of money, but facts—like surplus cash and emergency fund growth—can help ease those fears.
Moving to a new home should be a deliberate decision, not a reaction to debt or loss, and financial planning with a 25% mortgage rule ensures long-term affordability.
Budgeting apps like EveryDollar help users track expenses, build emergency funds, and pay off debt systematically, increasing financial clarity and motivation.
Protecting wealth through prenups is rarely necessary unless there’s a massive wealth gap; instead, character and shared values are stronger predictors of marital success.
It’s crucial to prepare for life events like divorce or unexpected expenses—financial strategies like emergency funds and diversified investments provide stability.
Experiences and generosity—like spending on family or vacations—are more impactful than material purchases and should be prioritized in a balanced financial plan.
Summary:
The episode emphasizes the transformative power of budgeting in improving financial health and family relationships. Dave’s story highlights how introducing a budget after 20 years of unstructured spending caused his wife to react with fear, but framing the budget as a tool for freedom and control helped both of them embrace it. The host explains that the 50% rule for car value and 25% rule for mortgages are not rigid limits but strategic tools to maintain financial flexibility.
Dave’s high income and large emergency fund (around $95,000) make paying off a $68,000 car loan feasible, with the potential to grow savings quickly. Other callers discuss key financial decisions: Doug’s 26-year-old son’s wealth needs protection through life planning, not prenups, and living independently builds better judgment in relationships. Henry, a retired military woman, considers relocating but is reassured that her current 25% mortgage ratio is manageable, and that saving $100,000 in three years is achievable.
Isabel’s concern about 33% mortgage costs is reduced when adjusted for taxes and other deductions, suggesting a more realistic 25% threshold. Mike, a 58-year-old, credits budgeting with saving $3,000 annually, and emphasizes allocating money to experiences and family over retirement alone. Josh considers moving to lower-cost areas like Las Vegas to save for homeownership, while Chad’s family plans to distribute an inheritance to support his mother’s retirement, using a two-year guaranteed savings fund before investing the rest.
The show promotes using budgeting tools like EveryDollar and financial apps to gain control, and highlights the importance of giving, experiences, and long-term planning over materialism. Ultimately, the message is clear: financial freedom comes from intentional planning, not fear, and every dollar spent—on goals, family, or joy—matters.
FAQs
The 50-25-25 rule suggests allocating 50% of income to needs (like housing and car value), 25% to savings and debt repayment, and 25% to discretionary spending. Regarding cars, the 50% refers to the value of vehicles, not monthly payments, encouraging zero car payments while ensuring the car doesn't consume too much of household income.
Yes, it can be wise, especially with a high income. A car payment is typically a small fraction of total income, and eliminating it frees up cash for savings or debt reduction. The key is ensuring the household still maintains a healthy emergency fund and financial flexibility.
Introducing a budget as a tool for freedom and control—rather than restriction—can reduce fear. Framing it as a plan to live intentionally and enjoy life together helps both partners feel empowered, reduces anxiety, and builds shared financial goals.
It depends on your goals. Moving to a lower-cost area can reduce expenses, but may delay your ability to buy a home in your desired location. A better strategy might be to save aggressively in your current location while maintaining financial flexibility and enjoying the lifestyle you value.
Even with high income, emergency savings are essential. A household can use budgeting to redirect a large portion of income toward savings—like a $100,000 emergency fund—without sacrificing long-term goals, especially when facing unexpected expenses like tax changes or home purchases.
A prenup can be useful if there's a significant wealth gap, but it's not necessary for most people. More important is building a strong financial foundation through shared values and communication. A prenup should be considered only after a clear understanding of financial goals and risks.
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