When Money Gets Complicated, Clarity and Wisdom Matter Most

[MUSIC] Brought to you by the EveryDollar app. Start budgeting for free today. [MUSIC] >> Normal is broken, common sense is weird. So we're here to help you transform your life from the Ramsey network in the Fairwinds Credit Union studio. This is the Ramsey Show. I'm Jade Warshaw next to me. George Campbell taking your calls. Go into the phone lines where we have Heather, an Indianapolis Indiana, Heather. What's up? >> Hi, how are you guys? >> Doing good, how can we help? >> Long story short, I got married in August, and once we combined some finances, I found out that my husband had a lot of gambling debt. I had a baby in October, and my husband tore his Achilles in May. So he's currently not working, and I just went back to work from having my baby. Basically, I found out in December that he's got 150 K in debt. Most of it is from gambling, and he didn't think he was going to be alive to face the consequences that led up to this debt, unfortunately, but he met me and we got married and had a baby and things have changed. >> Wow. >> So you quite literally saved his life? >> Correct, yeah, we kind of both saved each other, and you know what? >> I fell in love with him, I guess. >> Wow, so do you know about this gambling issue before you got married? >> I knew he gambled, right? Like when we won 25,000 in Vegas, it's great. >> Sure. >> When he lost 16,000 in one day, it's not. So I knew about it, as I just didn't know how bad it was until after the fact, right? I started asking more questions once I knew about it. >> Yeah, how long of a process was this that he went into all this debt? Before you were married and during? >> No, it stopped as soon as we got together, but he gambled like seven years maybe. >> So over the course of seven years, it's accumulated at 150,000? >> Correct, he's got two payday loans, he's got some 401K, and then just whatever on the app, you can like take money, I'm not a big gambler. >> Is he still currently, because you just said he's not accumulated since you got married? >> So he hasn't continued to gamble since we got married, but he hasn't paid any of his debt. >> Are you sure that he's not? How do you know? >> If he's stuck at home all day since May, and he hasn't opened a gambling app or went to a website, I would be shocked if he's not going to gamblers anonymous. >> Well, we did get into therapy and did some couples counseling, but I control the finances. So I mean, unless he's doing something behind my back and taking out additional loans, there's nothing to my knowledge. >> I would be pulling his credit report to get a full picture and freeze his credit. Have you done that? >> I haven't freeze his credit, but I did pull up and found out like all the creditors that he has. >> So he was withholding this information. This wasn't just like, well, he did let me know, you found this out. >> Correct, it kind of got like breadcrumbed along, right? And then once I knew my spot, I was like, what's happening? Where's all your money going? What's, how do we get in a situation? >> Okay. >> It's opening on us, right? That's how I got help and took control. >> Okay, so you guys, it sounds like you've turned the corner. This is no longer happening. You've got control of the money. You've done all the due diligence there. So how can we help today? How do I pay this off? Is that just the biggest question? >> Yeah, I want to know how we approach a judgment this large. Is the snowball method realistic in the situation? Should we consider bankruptcy or are there other options? >> Is this the only debt of all the 150? >> Yeah, 153. The house is in my name. The cars are in my name. I don't really, I only have like 4,000 maybe credit card debt. It's all his debt. >> Okay, the cars are paid off? >> No. >> Okay, so tell me all the debt. My 120, 7,000 on my house, we have about 4,000 left on my car to pay. He might have 11,000 left in his truck to pay. We got a $53,000 judgment on the one creditor, 19,000, the other one, and then he took all of his 401(k) out. >> Okay. Okay, so what's you guys' income? I mean, I guess he's not working yet. Will he go back to work? Tell me more about that. >> So we toured the key lease and he's currently ceiling. I hope and pray he can go back to work. He's got a physical job at UPS. >> No. >> So he does have a good job and makes good money. But right now he's not working. Only I am and I make $68,000 a year. >> Okay. And what did he make when he was working? >> He's a little different depending on overtime but at least six figures. If he's not like 95 to 110 depending on the bonuses and how many hours we get. >> Is there any disability income coming in or workers comp, anything like that? >> He was on workman's comp but they cut him off. They only gave him six months and then they stopped. So it's all in limbo right now. We're waiting for his IME and what to do. >> Yeah, super able to walk on it. What is his current status? >> He's in physical therapy so he just got into a shoe in December and he can't really do a lot of steps. He cannot drive like going from the gas pedal to the brake. So he's still at some healing to do and it's kind of all on me. >> Yeah, well that's really stopping you guys from being able to crush through the stat. Right now you're just in survival mode until we get his income back in place. Is there anything else he can do that isn't physical to bring in some income? >> No, he can't walk or drive. So I don't know what I'm saying. >> I'm saying any other job. If he can't work right now he needs to do something even from home. Can he do customer service? >> His mind is not broken. His Achilles is broken. >> Correct. But he's watching the baby so then we would have to figure out child care right now and I just picked up a second job. >> Is there any family around that could help with that? Do you have a local church? Is there anybody that you can reach out to? Even if it's part time. Right? Because the baby sleeps at night. So even if he's doing some sort of night customer service, right? >> Yeah, like we can look into that but with workman's comp it would definitely like I don't want to commit fraud on that. >> He's not getting paid anymore. >> I have said it stopped. >> Yeah. >> Yeah, I don't know how any of this works. >> Okay. >> I've done it in a situation like that before. >> So here's what I want. I want you to be open to solutions because I think that you're kind of camped out on mate. We'll just file bankruptcy. But I want you to be open to the solutions that George and I give and I just want to be upfront and saying they're going to all suck. Like none of them are going to be fun and none of them are going to be things that you want to do with your time. They're going to be things that feel like impositions because they are. They're going to be very uncomfortable. It's going to require him to do jobs and work that he doesn't want to do at times that he doesn't want to do it. Get night when most of us are watching Netflix. It's going to cause you to be doing things that are uncomfortable like calling workmen's comp whoever that is and figuring out what does it mean? Are we getting any more money? Will there be any repercussions if we go ahead and work since the payment stopped, right? These are all the things that you guys are going to have to do. The challenge for you beyond the finance of this, Heather is going to be not feeling resentful towards him for having piled up all this debt and now you're having to sort through it. You're having to have this discomfort in your lives because of it. I would not file bankruptcy, you know, just yet, George, I would work through this. You're going to have a timeline on your horizon, but he heard us Achilles. He's not. He didn't have heart surgery. So he's going to recover. He's going to go back to work. It's just really hard right now. Correct. I'm sorry. I had to get you off for the clock. But I really, really, really want you to understand that this is something you can work through. I would do the debt snowball, which is what you asked. Smallest to largest minimum payments. And right now, if all you can do is the four walls, that's okay until he gets back in working. I love entrepreneurs. Don't forget guys. I started my company on a car table myself. So I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paycheck, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did. We got NetSuite. That was years ago. And we've never looked back. See, NetSuite isn't just for tech giants. It's built for growing businesses like yours. Over 43,000 businesses already run on NetSuite, including a lot that started just like you. And now with built-in AI, NetSuite is helping them even more. It's one system connected to every part of your business for real time insights. Not guesswork. sweet AI flags inventory issues cash flow risks, even supplier delays before they become problems. So you can trust the data, stop wasting time, and make the right decisions faster. Take a free product tour today at netsuite.com/ramzie. That's netsuite.com/ramzie. All right, back to the phone lines we go. We've got Maggie who's in Atlanta, Georgia. Hey Maggie. Hi, yes. I'm trying to find out if the way my husband is treating me financially is considered abusive or if it's acceptable and what I should do. Totally. Tell us more. I'm in my mid 40s, so at T. And we have six kids and I have been financially dependent on him for 20 years. Well, more than our entire marriage. I don't work and I've never worked. Last year he artificially reduced the amount of money and our family income so that it was below how much we needed to have just sufficient funds. And so over the course of the year we basically blew through all of the extra savings that were in that account. And then towards the end of the year there were some medical problems with our family and we really tipped the budget over the top. We did not go into debt because he's putting aside money somewhere else also. Where do you know? He's putting it into savings accounts. I used to be able to see them but I can't see them anymore because he hid them. I don't because I'm dependent and I'm not really that into the finances stuff like I could see them through a budgeting app but now I can't. And that was all your attention. And he's doing this to punish you? Yes. So he sent me a text saying that since I wasn't ready to talk to him he just went ahead and made decisions himself and so he cut me off from the family credit card which was in his name right? It was a card for him. And he told me that he had reduced the amount in our family budget more substantially and that he told me to use a credit card that two months before then he had asked me to open in my own name. And I didn't like I didn't know that that was going to be a problem but now he wants me to use that. And obviously that makes me financially responsible but he said he was he threatened to ruin my credit and not to pay anything that went over. So now I feel really nervous to use that credit card at all because I'm not the only one drawing from this account like he draws from the account. And so he's controlling what amount is even in the account for you to spend on the family? Yes. So can you use a debit card attached to that bank account? I don't yet have a debit card but if that's a good option then I could go down. So your name isn't even on the bank account? It is. My name is on the bank account. So you should be able to get access to a card tied to that account. You can go down to the bank and ask for one. Okay. I would do that today. And that way you don't need to use this credit card. You don't need to even have the chance of racking up any debt. And then it becomes an issue of hey we don't have enough to cover the bills and I don't even know what we need to cover because you have access to everything and won't let me even see it. And so you guys have some deep marriage issues and the financial part is just a symptom. Yeah. It's a major problem. For me this has nothing to do with finances. I mean obviously what George said is important just for the here and now but this guy is 100% controlling and that's 100% a financially abusive situation. So tell me I guarantee you this is not the only place that he's asserting control. Guaranteed. Well I've recently been walking out of that with a therapist because I've just started to assert my own autonomy. Okay. What does that mean? I stopped presenting things to him as a can I do this or whatever and just doing what I need to do. Like I'm not doing anything stupid. I'm running a house and like what does that work? Well sort of he's not happy about it. Yeah he's not like like the only escalation is him. I don't I guess you could call it like berating or that kind of thing not. He's not like physical or anything but and you're okay with that. Well I do believe that he will get better. Well makes you believe that. The Lord told me. Hmm how long have you been married? Over 20 years. How long has he been asserting this berating behavior? Since before we got married but I was also part of that. Can I ask you a question really like that? Can I ask you just a you went there so I'm going to go there with you. Do you think that you have to be in the house for him to get better or do you think you could be somewhere safe and he could get better? You think you think you have to be there for him to berate you or do you think that you could be somewhere safe him not berate you and get better? So that's kind of like what caused this whole thing is that I basically refused to sit there and listen to him berate me and I told him that I wanted to have conversations by email. So that's why he said that I wasn't talking to him. Understood. But you're still living in the house now? Yes. Okay. And most of the days are peaceful. It's just you know he has some growing to do for sure. Understood. Okay. Well, I have one other question about money. We got Christmas gifts that were like a check. I got one in my name. He got one in his name. And I mentioned putting mine in my own private account. He didn't like that. He said that that needed a lot more conversation. So I was really wanting to know if it's wise or foolish of me to put this large cash sum into person. You're protecting yourself because I don't know if this marriage is going to survive. And so at this point, you have to then go, I need to create my own bubble over here because this person isn't safe. Yeah. I would 100% say that. Okay. So that is actually wise to do in this moment. And I know God told you, but it doesn't mean that this marriage survives. Sometimes he maybe it takes this marriage not working for him to get better. I don't know. I hope this marriage survives. But I'm also not I'm not a betting man, but I'm betting he's not going to change tomorrow. And just go, wow, I had a revelation. I've decided to give you full access to the accounts and be transparent for the rest of my life. Right. I'm also thinking about your safety and security. You're just not in a financially safe or secure environment. Therefore your kids are not either. So there's part of me that is I'm way more concerned with that. Obviously, you called this show. Then I am with his comfort at this point at all. Because there's kids involved and if you can't have access, if you're home taking care of the kids, but you're not allowed access to money that it takes to do such work, then what are we even what are we doing here? Right. So I'm concerned about that. I'm with George. I have a concern. There's also something more nefarious happening. Some financial infidelity on his part of why he's hiding this. If you are correct in that there is no wild overspending happening, then he's hiding this for a different reason that maybe beyond just control because he doesn't trust you. So that is also something to consider here. I would demand transparency. I would demand that you have equal access to the money and that you have an equal vote in this marriage. If that doesn't happen, then you guys need to go to counseling. If he's unwilling to go to counseling, you go alone and then you'll have to make your own decisions whether this is safe and healthy. Does he go to counseling or is he willing to go? We've tried in the past, but yeah, he left it. I didn't want to do it anymore. Uh-huh. Yeah, Maggie. So do you think that it's wrong if he made the decision unilaterally not to put his entire income into the account? Yeah, I think that's wrong. Yes. I think that's very good. Listen, Maggie, my wife stays at home. She has full access and transparency into everything that we do. There are no hidden accounts. There's no mind in hers. She sees the budget. I see the budget. She can check the savings account at any moment. How does a healthy marriage and any other picture is going to lead to unhealthy behaviors and an unhealthy marriage? And so we can't continue on this way and pretend like it's going to all going to work out. There has to be a come to Jesus moment and that means him going to counseling as a last ditch effort to go, "Hey, if this is going to work, you're coming with me and we're going to figure this out." Yeah, I think Maggie, from where you sit, you called about a financial issue, but, you know, George and I both know money touches everything and it's never just compartmentalized. It's never just money. These characteristics float into all the other areas of our life and I know based on what you said, what you're experiencing is not just happening with the bank account. There's a control issue here and the fact that this other person is not interested in bettering themselves, whether it be through counseling or through changes of behavior, that's a big red flag and I know you've devoted 20 years to this thing, but man, oh man, please, please, keep yourself and your kids safe and do what you need to do to do that. 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This is a paid advertisement in the MSID 1591 in the MS Consumer Access dot org Ego Housing Lender. I'm listening to the Ramsey show. What's up, Lily? Hi, I think so. How about you? I'm also. So I have to hold myself on in baby step two and a thousand more emergency savings fund. And then my dad and mom collectively have about $150,000 of parent plus loans in my name or not in my name. They're legally theirs. Right. They took them out from me to go to college. And as Georgia say, it's kind of like a spit-shaped agreement that I'd paid them back. That was about 10 years ago. So the expectation is that I pay for them. And they recently changed it, changed the payment so that I am technically able to afford it. But that was almost cut what I'm paying my loans off in half and drastically increase the amount of time that it takes for me to pay my loans back. And also they're making. They've chronically made poor financial decisions. And I don't want to be enabling them. For example, they just bought a car that's going to cost them $60,000 by the time they pay it back. So I don't want to make a lot of sacrifices in my life if they're not willing to change their lifestyle and these loans are easily in their name. Are you when you pay it, are you logging on and making the payment yourself or are you giving them the money? I'm logging on. I'm able to log on and pay the money myself from my bank account. OK, help me understand the last part of your argument, which is the agreement was, yeah, you pay these things off. You know that you're not arguing that point. If you pay off the $150, what's the problem with that? What's that got to do with them and their lifestyle, basically? Because so right now, if I were to not pay the loans at all, like, no one's going to come after me, they're really in my parents' name. Right, but you didn't need to pay them back. Yeah, but so I just, my thought was if I am like more, like worry about myself first and focus on paying off my things first and then helping them. But you did, well, you're not helping them. Hold up. You're not helping them. You told us that 10 years ago it was from the beginning that it was, we'll take these loans, you'll pay them back. They were not, it wasn't a bait and switch. You knew that going in. So you, at that point, you signing up for these loans is no different from you signing up for a credit card or a card note in my mind because you agreed. OK. And this is my debt. Morely and relationally. Legally, you're right. It's in their name. Yeah. This is just as much their problem if you decide to not pay. It's on them. But at this point, the relationship is soured because you're not, you know, Thanksgiving looks different now when they're like, you're looking at their car in the driveway going, you shouldn't about that. You could have paid off a bunch of my student loans with that kind of money. Right. And they're looking at you going, homegirl took out 200 grand and loans and isn't paying back after she said she would. Right? OK. What is your degree in? I can't call engineering. Great. I think 91,500 a year. Great. And how much do you have in your name? I have just under 20,000. That's your all student loans. So, 13,000 are in our federal loans and then the other 7,000 is a private loan. OK. And that's it. No other debt to your name. No other debt. I paid off all my credit cards and I'm not going to credit cards today. No car loan. No, I own my car. Great. Great. So the parent plus loans, I'm assuming those are also broken up into probably at least four by semester, right? I actually have three, but yeah. OK. So what I would do is I take off all the loans, all the individual loans, the three parent plus loans, the federal loans, however they're broken up and the private loan, however it's broken up. And I would debt snowball it. Smallest to largest, minimum payments and knock out the smallest one first and put these $150,000 a parent plus loans right in there wherever they fall, smallest to largest and just knock it out. This has gone on for 10 years. Aren't you know? You let this hang those parent plus loans have a higher interest rate. And so the longer you wait on this step, it's going to balloon to 175,000 if we just fight over this for the next few years. So, um, OK, so the, the, the, the, the next no one is make minimum payments. So my loans are lower than their. So I would be paying off my loans first, but at the same time making minimum payments on there that, so you make, you make minimum payments on all of your money. You're debt regardless of what the minimum payment is. And then whatever the smallest loan is, um, maybe it's one of the federal loans or maybe it's one of the parent plus loans, whatever the smallest balance is, not, not by monthly payment by balance, whatever the smallest balance is, that's the one you put all the extra money on. And that's the one that you're going to knock out first. And so, and then the idea is you start feeling the momentum off of this and then you feel good and you do the next, you put all the money on the next smallest debt. And that one's paid off. You have all that freed up money and then you put it on the next smallest debt. And that's how this works. Um, just, that's a good clarification, a good clarifier when you're doing the debt snowball, it is by balance, not by monthly payment. So that's a, that's a good thing to remember going forward. Thank you for the call. We've got Janay, who's a Baltimore, Maryland. Janay, you're on the line, my friend. Hi. So I, I'm 22 years old and I'm currently back in college. I took around like a break for, for a bid. However, the college that I go to right now, it's like a private, um, Christian college. And I opened around like $36,000. Um, they've been allowing me to push the balance off for the past three semesters. But they're saying that I need to get that balance down to $1,000 by the next semester. So essentially, I would have to be able to pay 35,000 by closer to the end of all case. What is it? Is it because it's a Christian school? Is it because it's like, are you borrowing directly from the school or something that it's not allowing you to wait until you've graduated to pay these things back? Um, no. So when I first went to college, I kind of messed up with my grades and things like that. And so when it came down to me doing my financial aid, again, when I finally decided to get serious about school, that's for just getting covered the full amount. Okay. Um, so is this a payment plan directly with the school? Um, it's not technically alone. It's just a balance that you haven't paid yet. Yes. Okay. So it's just a balance. Are you currently going to that school? Yes, I know. Okay. So what's likely going to happen is they're not going to let you continue going to the school after the six months if you don't pay it. Did you get clarity on what happens then? Because at this point, it may be moot for you to even go to class right now. You might need to take a gap and solve this. So they essentially told me that if I can't get it down to $1,000 on its own, then I just won't be able to register for exactly. And so you can't afford six grand a month right now. Are you working? Yes, I am. How much do you make a month? Um, I have two jobs, one through the school and one throughout this, um, outside of school, um, the job that I work outside of school and maybe can bring. like 3000 possibly 4000 um sorry possibly 2000 2500 a month and my school maybe maybe like 500 six five to 600 a month. So you got 3000 a month total. Do you have any money saved anywhere? No. Okay so my family wouldn't do a rough patch. So I've been given them pretty much and there's money and here's the thing today. You need to work with their office and just be clear with them. I don't have this money. I can't pay. I don't make $6,000 a month. I got to cover my own bills and so that might mean you can't go to school right now. You need to get to work full-time over time, pay what you owe and then maybe go to a different school that you can actually afford because clearly this private Christian one is costing a lot of money that you don't have. [Music] You know every year I hear the same excuses for why people don't get the life insurance they need to protect their families. So this year let's clear the air and look at the facts. Having 10 to 12 times your income on a 15 or 20 year plan is in many cases just plain cheap. That amount of coverage lets your family keep the lights on and keep food on the table while they're grieving. Second life insurance through your work is not enough especially since these plans go away if you change jobs. You need to have your own policy so you're not without protection when your family really needs it. Third, stay at home parents need life insurance especially those with young kids. People don't realize how quickly the call sat up without someone at home taking care of things so no more excuses folks get the protection your family needs. Go to zander.com or call 800-356-4282. They've been my choice for all my insurance for over 25 years and are the only people I trust. Alright you guys ask for it and we listen to the live like no one else crews is back by popular demand. This is your moment to celebrate your debt freedom with Dave and the Ramsey personalities and the western Caribbean. You can share your story with Dave swap jokes with George or Singh karaoke with me apparently and more so if you're on baby step 4 or higher this is your chance to join us the crew is going to be March 14th through the 21st 2027 and if you register and booked by February 1st you can save up to $300 this week only okay so save up to $300 this week only when you booked by February 1st so guys remember cabins are limited lock in your spot you only need a $600 deposit to lock in your spot so do that all you have to do is click the link in the show notes or go to ramsey solutions.com/events in order to learn more I hope I see you guys out there it was a fun time. Just seeing that ship brought me back good memories. Watch back to the Caribbean. All right Jessica who was far from the Caribbean is in Phoenix, Arizona hey Jessica. Hi what's up how can we help? So I'm sure you'll ask questions on more specifics but my essential question is I'm 44 Mary no kids and completely debt free with a paid off home unfortunately my dad did pass away about a year ago he did own his home free and clear I have two additional sisters the home is worth about 700,000 my mom who is not married to my father and is financially set with about a million in retirement and own her home free and clear is considering selling it and moving it to Arizona and our question is should we gift this house to my mom obviously I can get into specifics about our finances so see if that's a good idea but I just kind of want to know the pros and cons of that and any potential pitfalls of that decision. So let me just make sure you set all that very quickly so you're doing fine mom is doing fine and then you have this home with your other three sisters other two sisters yeah other two sisters do they want to sell it or do they want to gift it to to your mom do they both so my my older sister and I are both very financially well off we sold the business we each have about eight million dollars invested in the market and homes that are over 1.5 million in debt free and earn about 250 a year okay my younger sister does well but she's not in the exact same position so our thought was my mom pays her 250,000 for the house molison i for go receiving that money from my mom that way she can upgrade the house and do anything she wants and still be within her budget and then she finally gets to live out hope within the next 30 years actually living because she's worked her butt off her entire life and provided for us and an incredible mom and she's never done anything for her so where's the problem but I don't know if there's good that's what I wanted to hear that was my hope that I didn't know if you were like huge red flag take that I mean relation if everyone's good with this if everyone's happy with the decision and mom does mom actually want this house if she can redo it how she wants and yes can she and she can afford to redo it how she wants you're not going to fund that as well absolutely because we're not having her pay us each the 200 that x or 400 will allow to do exactly what she wants okay so she's getting a free house plus 400 grand correct that's a pretty sweet deal well the one thing to think about is the step up and basis so when you inherit at the home you get a step up in value but when you gift it you know that's a different situation and so what is the house worth today about 700 and my dad passed away about a year ago so I think the basis you know step up is limited but obviously when we go to sell the house eventually when my mom passes if it remains in the trust or even not with her will then we would have that amount to pay I mean I would definitely work within a state attorney on this and a CPA to make sure that you know dot the eyes and cross the T's here but there's no big red flags other than understanding the financial components obviously your dad let this you know and let you guys inherit the home I don't know what the relationship was with your mom and if there's any bad blood there and if that's odd or awkward for her but as far as the money part relationship okay everyone's happy I love the idea I don't see why there's any problem in it I think that you guys are good daughters especially the $400,000 cash part that's pretty that's a good place these are good problems to have very good already have ten million dollars yeah exactly we needed the win thank you Jessica for the call we needed that one we got Jimmy who's in Salt Lake City Utah hey Jimmy how can we help today hey can you hear me I can awesome so I just want to say I'm a great fan of what you guys do for people and everything so I unexpectedly received the largest bonus of my life this week and I wanted to tell that were to go before my wife decided on on how to burn through it okay how much is the bonus we have to know well the four taxes we're talking like 7300 is also probably after we're like a three grand or something okay well way to go it's your largest bonus today congratulations yes and so I had a couple places that I itemize that it should possibly go and I needed help with making the right decision but one we have about a an emergency fund that would last me till about Tuesday of next week so wondering if we should do that to create creator non-existent emergency fund okay too we got married over a decade ago at the time you know we had a lot of young kids and stuff and we decided to you know go for cheap and we haven't gone on our honeymoon yet we I promised or we would go at 10 years 10 years has come and went this year and we're still not you know we still don't have the money saved up for that so the possibility to spend that to take her on a honeymoon or my third option was to use it to buy the IPO of SpaceX when it releases oh boy you guys have any debt yes yes we do we've no more we've no more can through it's it's just home loans multiple no it's one we do have a helac we use to purchase another property but we'll be all the way through paying that off within the next two years okay we'll be down to our mortgage only which right now we're sitting it like a $220,000 balance I think it's worth about six how how much is the helac that you took out well it ended up getting out of hand and I think it got all the way up to 80 but I think we're down to owing like 40 on it now oh and how much is your income which is our income oh that's a loaded question probably about 90 90 thousand a piece maybe okay you guys make 180 yeah so this helac we would put in baby step two which means bad news bud the vacation's gonna wait yeah you need to you need to do what you said which is stock up that emergency fund to a thousand bucks because getting you to Tuesday isn't gonna work and then yeah the other two or three thousand needs to go towards baby step two my guy. - Okay. - And I would let the honeymoon. I'd let the honeymoon be the why to kick it into gear, to get this heat lock paid off, this 40,000, if that's all the debt you have to your name, and then let that be the way you celebrate, is we're doing an amazing honeymoon once we pay the step off because we owe it to ourselves. - Okay, I like that plan a lot. - Thank you. - I do too. - You guys worked really hard, you have a great income, so the fact that it's been a decade, and we have almost nothing in the emergency fund, we're taking out the heat lock, it just tells me there's some other behavior things we gotta fix, and you guys can fix it really fast with this income. That's the good news, you'll knock out the heat lock real fast if you put all of your attention toward it, you'll get the emergency fund on real fast if you really focus on it, and then the vacation will be really fun instead of a sinking feeling, like, oh, why are we here? We have a heat lock on our back. We don't have anything in savings, why did we do this? - Yeah, that's right. So George, why don't you explain how you arrived at putting their heat lock in baby steps six versus baby step two? - Yeah, so when it comes to heat locks, if the heat lock balance is more than half of your annual income, we would make it a baby step six item. - Yes. - It's large enough that it feels like another mortgage in your world, and if it's less than half your annual income, put it in baby step two inside of the dead snowball, and knock it out, 'cause that tells me it can get rolled up in there, and it'll get knocked out fast. It's not gonna take seven years. - That's right, yeah, they were right at the line with the 80,000. Just under the line to put it at baby step two, I'm sure they were excited about that. - No, that stinks, but you know, you throw four grand a month at it, it's done in 10 months. If you can throw more than that, it's done even faster, and so 12 months from now, I think you guys could be in a place where you go, let's book this trip. - Yeah, absolutely, absolutely. And that's the thing, guys, when you set out to do baby step two, you set out to pay off your debt, you have to have a really great why, almost like that carrot dangling in front of you so that you know why you're going after this. In their case, having a honeymoon after 10 years, that's a pretty good reason why. Maybe yours is a trip that you wanna take, maybe it's to pay for your kids' college, maybe it's to have your dream house, whatever it is, your why should be so strong, because that's gonna be your ultimate motivator. (upbeat music) - When you've saved up and paid cash for a reliable used car, you want that thing to last. And the best way to keep it running for the long haul is to take care of it with people you trust. That's why I'm proud to welcome Christian Brothers Automotive as the official auto repair partner of the Ramsey Show. At Christian Brothers, they treat you like family. You'll get digital vehicle inspections so you can see exactly what your technician sees, a complimentary shuttle to keep you moving, and every repair is backed by their nationwide nice difference warranty. They've even been ranked number one by JD Power for customer satisfaction among aftermarket, full service maintenance and repair providers, six years in a row. Visit JDpower.com/awards for the details. So if you want your paid for car to keep going and going, trust Christian Brothers Automotive, visit CBAC.com/ramsey to find your local shop and get an exclusive Ramsey discount of 10% off your visit. 10% off up to a $250 value. See store for details. (upbeat music) - All right, welcome back to the Ramsey Show. We're here in the Fair Ones Credit Union studio taking your calls. George, what do we say? We go back to the phone lines. - I'm down. - We've got one here in our neck of the woods. Robert is in Nashville, Tennessee. Hey, Robert, how are you? - Hey guys, I'm fine. How are you today? - Excellent. How can we help out? - Okay, I'll tell you my question first, and then I'll give you all the particulars if you want 'em. - Okay. - I'm looking at retiring at the end of the year. And I'm looking at all the indicators. Gold's high, dollars down, one but it's moved a bunch of cash. Has the biggest cash position ever. Should I take part of my 401K and move it into my cash mutual fund for now? - How much money do you have? What's your total nest egg? - Okay, total nest egg. My wife and I have 400K and a 401K in Roth. We have 100,000 in the high yield savings account. We plan on using that interest drop it yearly for part of our retirement living. My annual rate of return of my mutual funds is 10.89% over the last 23 years. - Way to go, that's exactly what we tell people. - That's where you should be. - So you've been doing it right. So you're heavy in equities. You don't have a lot of bonds right now? What's the split? - It's probably, I've been very aggressive 'cause I found data later in life. So I've been very aggressive. I probably nine beat, I'm probably 93% in stocks right now. - Dave Ramsey would like it. So here's the deal. Dave is not a fan of the asset allocation theory of let's move you to 60% bonds because we're spooked, because the truth is you're missing out on a whole lot of returns 'cause you could live another 30 years, right? How old are you? - Well, I'm 70. My wife plans to be 100, but I'm gonna die first. - Well, she'll outlive you out of sheer will. That's how the women are. - She fights me, yes. - So you're saying you wanna pull it into cash? - No, no, I have a money market fund within my Roth and with it with him. - Yeah, you wanna pull it out of the market. It would be basically a high yield savings account at that point. - Yes. - I would not do that. And is it because you're spooked by the indicators? - Spooked by the indicators. I've lived through these corrections before. But now I'm 11 months from retirement. - Yeah. - Well, here's a good one. - You guys have some cash. And so if the market was way down, what would you do? You would cut way down on your spending for a little bit and maybe dip into your high yield savings and try to not touch retirement, right? - Correct. - Which means you can weather the storm. 'Cause here's the truth. If you ignored headlines for the rest of your life, I'd guarantee you, you would be twice as wealthy. Then the person who goes, well, I'm spooked. I'm gonna jump out, let me jump back in. I always say time in the market beats timing the market. And right now you think you have the crystal ball and so does everyone else, but I'm telling you, put away the crystal ball and just keep it right in. - But Robert, you also have the gift of time, which means you have the gift of knowledge. And think back, 'cause you said you survived it all, think back on those times where there was a dip and think how quickly the market corrected itself. What was it, a year, two years? - Yeah, that's true, 'cause I jumped out when COVID hit. - And what happened? It spiked back up, didn't it? - It did. - And do you regret that? - I did because I missed a big part of that roller coaster. - You're living proof. Most of the best days happen right after the worst days. And nobody knows how long the worst days are gonna be, but usually you stick around in cash sitting on the sidelines way longer than you should. And then you jump back in way later when the market's already back up and so if I'm you, I'm just gonna let it sit there and let it grow. And again, if there is a market correction, not a crash, if there's a dip, you'll be able to ride it out. - Okay, I just need somebody to talk me off the cliff. - Yeah, we're happy too. - I hope I did. And you're right, there are indicators that are freaking people out right now and a lot of people are taking advantage of that. And it gets clicks, it gets views, it gets you to buy their crypto and their course and their gold and silver. But man, I would not adjust anything you're doing right now. - I wouldn't either. And like I said, somebody like Robert who's had 70 years to watch this all play out, he knows better than you and I. Me and my 30s and you and your 40s, that was a joke George. - Thank you. - I am an old soul. I'm a 70 year old. - I'm in my 40s. But the point is, he's seen this happen and he knows better than all of us that the recovery is real. And usually in a couple of years, you're right back, actually in a better position than you were before the negative downturn. So remember that Robert. - Whether you're 25 or 75, heed that advice, time in the market, beats timing the market. - Yes. All right, we've got time to take Josh who's in Minneapolis, Minnesota. What up Josh? - Hi, how are you? - Doing good, how can we help today? - Yeah, so I'm 26 with a network of about 800,000. - Nice. - Thank you. And I'm just trying, I put my job two years ago. I'm deciding whether or not I should return to that high-paying job, which I do not like or use my savings of the runway to transition into a different career more aligned with my interest. - Why would you go back to a job that you quit, that you don't like when you have an $800,000 net worth and you can use it as a runway to get to the job. - Yeah, this is like running back to the toxic ex. - Yeah. - I think it's because, I mean, to be more specific, I wanna build a career as a musician. And I understand that the odds of that pain off are low. - It depends on what you mean by that. If you wanna be the next Bruno Mars, maybe the odds are low, but if you wanna make a career in the many, many, many ways that people work in the music industry, I'm sure there's plenty of opportunities. - Jay has lived it. Yeah. - Yeah, I mean, I'd love to like make music and like spend time developing marketable skills like content creation, advertising and running campaigns where if it doesn't work out as an artist, I'd be able to find a job more aligned in that industry. I just trying to make sure I'm making our financially responsible decision and have enough runway, you know. - Well, I wouldn't drain your savings just because you're trying to pursue music. You can go do marketing for a full-time job and you got plenty of time nights and weekends at 26 to do the music. And try to get that off the ground. - What kind of artist are you trying to be? - It was like pop, rap a little bit. - Okay, how old are you? - 26. - 26. How long have you been pursuing music or is you're just getting started at 26? - I've been making music for maybe about 10 years but I haven't, I've been releasing. - I've been releasing. - I've been releasing, I just haven't been putting any effort really into content creation or advertising or, you know, ad management or anything like that. - Interesting. - What's all that you talk about ad management? This feels very separate. Are you wanting to be in marketing and you're sort of like, well, I have these skills I can fall back on in case the music doesn't work out. - Or are you using that to get discovered? - I'd like to have the skills like to fall back on in case the music doesn't work out. - Okay. - Well, I could tell you this, you know, and this is an unpopular opinion, but when it comes to wanting to be an artist, those folks who really make it, they don't have a fallback plan. They go hard into it. - It's all they think about. And so I'm just gonna level with you right here. I'm not trying to shoot a dream down, but the way you're talking doesn't sound like the person who's gonna go all in on this and really go get it. - I mean, having you had two years on the sidelines should be working on it. What happened? - I was traveling and learning Spanish in Argentina. - I just walked down the duo Lingo, bro. Don't tell me you have this dream of being a musician and you didn't do it with this two-year gap you've just had. - You might be a free spirit and I do hear that. And for that reason alone, I would not go back to this old job, but I don't hear the go get it factor of sacrificing it all to be the next Bruno Mars. If, I mean, otherwise, send us in your tape and we'll tell you the real truth. (upbeat music) (upbeat music) - I used to be that guy who bragged about running on no sleep and then I realized being tired all the time is not a flex. To show up as the best George Camelike and B, I need real rest. And that's why I got Casper mattresses in my home. The experts at Casper designed their mattresses to help you sleep deeper, cooler and more comfortably. And they've been top ranked in both the foam and inner spring mattress categories by consumer reports. You and your entire family deserve great sleep. So go to Casper.com/Ramsey and use CodeRamsey for 25% off mattresses and 10% off everything else. That gives you up to 1200 bucks off the Snowmax mattress, which is the exact one I sleep on. That's Casper.com/Ramsey. CodeRamsey. (upbeat music) All right, to the phone lines, we've got Kevin, who's in telehassy Florida. Kevin, you're up. - All righty. Hey guys, I just had a quick question. I really wanna be able to get my finances in order to help my new wife be able to transition as a state home mom, but I'm not really sure how to go about that. - Well, I love that you're thinking about that and thinking ahead, the first place to start is is it an affordable thing for you today to move that direction? So, George and I can help you with that. What are you making with her working and what would you be making if she stayed home? - So right now with the both of us working, we make, it's about 8,000 a month. - Okay. - That would put without her working, that brings us to about, sorry. - That's okay, I hear carries. - I think it's about 4,000. - Okay, so about half. - It'll have the income. - Ooh, that's a big jump. The question is, can you afford to do this? So obviously the first questions that I have are do you guys have debt? - So, when we got married, she came in with no debt and I came in with all the debt. We just have, at this point, I just have a $4,000 auto loan. I do have some credit cards that we're taking to collection about two or three years ago, along with a lease card that went into repo. - How much are the credit cards? - It was two of them. One was $1,000 and one was $3,000. - Okay. - So, they were $4,000 balance on that? Or are there more penalties and fees? - As far as I've seen, it was just a $4,000. - Okay, what's the deficit on this repo that you still owe? - So, they said that when they took the car, that I would just be free and clear and that it would just take the seven years for it to fall off my credit. - Really? They didn't come after you for the difference? - No. - Positive. - So far they haven't. How long ago did that happen? - About it in February in 2025. - I would double, I would just look into that. I would hate for that to come back as like a zombie debt that you thought was gone and next thing you know, you owe like a $10,000 deficit or something. - You get served a lawsuit over this thing 'cause you didn't pay and one guy on the phone told you, "Now you're good man." - Yeah, I'd want whatever it is in writing that I owe nothing and I would keep that paper that was laminated and like under glass for life. Okay, so that will be your homework getting off this call. So you got 8,000 bucks in debt, nothing else to speak of, no student loans, nothing else. - No student loans, nothing currently no more. - Okay. - Do you have any money and savings? - I currently have $1,000 in an emergency fund. I just got that in there. - Congrats. - Is she pregnant right now or are you guys looking to start a family? - No. - We're looking to start a family. - Great. - Okay. - You got lots of runway. - We're expecting to start trying within a year to be able to make this transition happen. - Okay, so I mean, it looks like you're familiar with the baby steps you've already got, the $1,000 saved. So next on the list is let's pay off this 8,000 and here's a fun experiment. Let's pretend like we only live on the 4,000. - Oh, I like that. - And that way we can take 4,000 this month and 4,000 next month throw it towards the debt, debts gone and in the meantime we got to experience running our household on $4,000 a month to see how does that feel. Do you like that experiment? - And then continue putting the 4,000 and savings and five, six months later you've got a fully funded emergency fund, now we're investing for the future and we've experimented for months living off of your one income. - I like that. - So that's really the baron. It's can we cover all of our expenses from my one income and still accomplish our financial goals, which means we gotta be investing 15% of our income and for that baby we have to have a little leftover to put towards college and pay off the house eventually. Are you guys renting right now? - We are currently. - Okay, great. So the next step after that might be we wanna save up a down payment. Once babies here, once we're investing, that might be a longer term goal, but that's really the math on it and I hope your income continues to go up. I found that once, you know, mom staying at home, the husband's like, all right, I gotta go grind a little bit and maybe that means you're gonna get a promotion and kind of move up in your career as well. What do you do for work? - So right now I'm a correctional officer for the state. - Okay, what's the sort of ladder in your field to move up? - Well, right now, we're actually looking at getting a pay raise from $23 an hour to $28. - No, that's excellent. That's like 10 grand a year. - Yeah, that's, it would be super exciting. - Yeah, that's wonderful. - If we get it. But, and then we can always promote up and make a little bit more, but I'm actually looking at doing a career change for possible and even higher. - Yeah, what do you wanna get into? - I kinda wanna get into being a paramedic firefighter. - Oh, no, that's cool. Yeah, the main thing to be thinking about, thinking about, I love these career changing discussions. I love the fact that you're thinking about the wife being a stay at home mom. Number one thing is just to make sure whatever you do, you have savings built up because that's a bridge that you're coming up against and to have money saved is going to help you be able to do that. And then also, yeah, just making sure you're thinking ahead, especially with things like home buying, making sure that on the $4,000 you guys feel good about it, you don't bite off more than you can chew, especially knowing that you might have a career change coming up. I'm not sure which is gonna come first, if you're thinking about the career change or if you're thinking about maybe one day buying a house and getting that down payment ready, but as much money as you can have set aside, on hand, ready to make this transition and the most research that you can do ahead of time, kinda like what you're doing now, getting all the answers as many answers as you can anyway, is really gonna set you up for success. - And you may wanna make that career change before babies here, 'cause it's harder if there's a gap in income. and babies here and it's solo income, that's gonna be a lot harder. And so I would really work your way through these baby steps fast, knowing I wanna make this career change. - Yeah, that's good. - I like that advice, Jade. You wanna make sure that any money move you make is from a place of stability and strength, not from desperation and weakness. - Well, yeah, then you know you're really doing what it is that you wanna do, and you can kind of take your time in the way that is appropriate in order to do that. So, very, very good question. Thank you for the question. George, let's do one of these social questions. We haven't done one of these in a while, and I like them. - I like it. - All right, this is Keith from the Ramsey baby steps community. He says, "How do you get through years of the boring gazelle intensity grind?" - Wow. Listen, if it's boring, you're doing it wrong. You're not sitting on the couch. - Right, yes. - Like, you don't have time to be bored. - That's true, but I think he's saying, it just feels like a slog. - Yeah, I mean, if you've got the average person when they do baby step two, it's really a two year deal, right? That's what we're seeing on that. - 18 to 24 months is the average. - Yeah, and so, but there, I mean, there's plenty of you who call in and it took you three years or four years. It took my husband and I seven and a half years. What was your time? - Mine was, I mean, mine was pretty fast. I had a smaller amount of debt, 18 months, to have 40,000. - Oh, yeah, right on. Right on. And so, no matter where you are, there is going to be some moment. Even if you're one of the 18 monthers, who is like, I don't feel like going to my side hustle today, or I don't, for the love of God, can I just order a pizza? You know, whatever it is that it is that you want to do, that's going to pop up and I think it's so important, George, to have that reason why, number one, 'cause that's kind of like the North Star on this whole thing is, why do I want to do this? The reason why can't just be 'cause I want to get out of debt, or because I want more money. - Dave's not a good idea. - Yeah. - Don't let Dave be your wife. - It's not deep enough. - He's going to be proud of you, but don't let that be your wife. - You need something more. - Maybe baby step three is awesome. Now one is boring. Baby step three is way less exciting than two when you're paying off debt, 'cause three, you're just like, all right, I got to stack some cash over here. I'm not seeing much progress as far as paying off debt and freeing up the payment. You're just sort of building your little, you know, a quorns for the winter. - Baby step three is a sleeper, I will say, in many ways, and I know it's hard to believe, but I actually think that that might be the hardest of the baby steps, the toughest. - I agree. - 'Cause you thought, after two, like the hard part was over, you ran a marathon, and you're like, wait, there's a 5K after this? I got a run. - Oh my God, you got to start warming up again. - You can't catch a break. - You know, I think the big thing as far as answering the question and how to stay in 10s through years of the grind, for me, the unlock has been finding ways to reward myself throughout the journey, whether you're on two, whether you're on three, whether you're on four, five, and six, and baby step two, it's little things. Like after I pay off this amount of debt, I am ordering the pizza, and baby step three, it might be a small thing that, another, but then as you move on, it's okay, I'm gonna buy the new couch. Okay, we're gonna take the vacation. Okay, we're gonna upgrade the cars. So make sure that you're rewarding yourself throughout the process. Nothing that could throw you off track, but just enough to keep you going until the next step. (upbeat music) (upbeat music) Hey guys, George here. Listen, just because it's 2026 now, doesn't mean 2025's ideas all go away. Some things are timeless. Like if you wanna win with money, it's still the same playbook. Budget like your money depends on it, avoid debt like $10 lattes, and build wealth on purpose. But here's the truth almost nobody tells you. Most banks make money when you lose yours. They want you swiping, over drafting, and racking up fees, because that's how they stay rich while you stay broke. And that's why I tell people to go with Fairwind's credit union instead. They actually want you to win with money and become debt free. And their smart bundle gives you a no fee checking account, a high yield savings account, and my favorite, the new Ramsey branded debit card that says, debt is normal, be weird, right on the front. It's not just a piece of plastic with your money attached, it is a declaration. It says, you're not buying the line anymore. You're taking control of your money for real. So this year, forget the gimmicks from the big banks, forget so-called rewards that keep you broke, and instead, partner with a credit union that actually backs you working the baby steps. Go to fairwinds.org/ramsey to get started. That's fairwinds.org/ramsey. Ensured by the NCEUA. (upbeat music) All right, tax time is just around the corner. 2026 taxes, don't worry, George, and I have you covered with everything that you need to know. George, this feels like a talk nerdy to me segment. - It is. - That's what we had to brand it so that people would listen in. - Yeah, so talk nerdy to me about tax day, which this year is gonna be April 15th. It's always April 15th, 2026. Extension deadline, October 15th, 2026. Tell us everything we need to know. - Okay, this is the important parts. These are the changes for 2026. And the big highlights are tax brackets have been adjusted for inflation. - Ooh. - Ooh, ah. And tax rates stay the same. That's 10% to 37%. So those tax rates for the bracket stay the same. The income thresholds have increased. - Yeah, get nerdy or tell me more. - If you're watching on YouTuber Spotify, we have the visuals up. So you can see the table because this is one of the most confusing things about taxes. - People get it twisted. - People say, "Well, Jade, I don't wanna make a dollar moral "cause it'll push me into the next bracket." - Yeah, and I can't see-- - I'm assuming the wrong thing. - Only that new dollar is taxed at the new rate. So you gotta understand that. So let me go over the numbers. So 10% bracket is up to 12,400 of your single. 24,800 if you're married filing jointly. Then from that number, up to 50,400 of your single, 12% bracket. And for married filing jointly, $100,800. And then we move to the 22% bracket, which is from that 50 grand up to 105,700 of your single. And up to 211,400 if you're married filing jointly. If you're doing the math at home, it doubles. - For those married filing jointly. - Keeps it simple. And then 37%, which is the highest bracket. Any money you make over $640,600 if your single will be taxed at 37%, and married filing jointly. Any dollar you make over $768,700 will be taxed at 37%. Have you fallen asleep yet? - I wanted to, but I forced myself to stay awake in order to say the words, yes, paying taxes sucks, but making money is always going to feel nicer. - Yes, so you need to think about what the marginal tax rate is versus effective. So effective meaning, yes, you got up into that 22% tax rate, but when you average it all out, it was really 15%. - Yeah. - Is what you paid on your total income. So there you go. That's the federal brackets with the adjusted thresholds. What about standard deduction increases, George? - Don't get me started on the standard deduction. - Why did up? Let's go. - So this is, most people will benefit from taking the standard deduction. And so this is probably you if you're listening. The standard deduction lowers your taxable income and is now higher again for 2026, which is good news. So standard deduction, if your single is $16,100. So the IRS basically says, we didn't see that money. It's a freebie. The rest we're going to touch, but that part we won't. Married filing jointly, $32,200. - That ain't bad. - And head of household, $24,150. - So for all of you saving up every single receipt, thinking that maybe you can outdo it. (laughing) You're probably not going to. - Yeah. So unless you're a business owner, you got a very complex schedule. - That's right. - That's right. - You're a self-employed. Some people are $10.99. Sometimes it makes sense to itemize. And you can check with a CPA or tax pro on that. - Now there's a lot surrounding the one big beautiful bill act. - What a. - And I know people, I know one big, beautiful bill. There's a lot of questions around that. How's it going to affect us this tax term? George, what do you have to say about that? - So for anyone that makes tips, you're happy about this. No tax on most tips, which is a first for many workers. - I know that. I have to say, I think that's great. - They're hustling out there. - Yeah. - Let them have it. And then you've got overtime paid deduction for hourly workers. So that's nice as well if you do overtime. And then senior, shout out to the AARP members out there. You get a deduction. A new $6,000 deduction. Available whether you go standard or itemized for taxpayers age 65 plus subject to income limits. - Okay. - So. - You know what those are? - Dave Ramsey, sorry. - Yeah, you ain't getting it. - He hits the age, but not the income. - Not the income, that's okay. He'll be fine. - He will survive. - That's good. - All right, I love that. So just a couple of smart tax tips going forward. Make sure that you're gathering up your documents early guys. Don't wait till the last minute. You're gonna need your W2s, your 1099s, any receipts. Start gathering that stuff now. Put it in a folder because they're gonna need it. Also, you need to decide whether you're gonna do this thing yourself or whether you're gonna hire a tax pro again. If it's simple, just your basic W2, you probably can handle it yourself. But if it's a little bit more complex, you're probably gonna need a pro. If needed, make sure to file your extension, okay? File the extension, but you still gotta pay April 15th. - Yes. - Don't get it to a standard. - It's illegal to not pay in time. It's not illegal to file the extension. - That's right. - So it's okay if you don't file in time, file the extension, but you gotta pay what you owe. And you can use tax planning to reduce surprises next year. I always ask my tax guy, hey, what can I do better next year? - That's right, that's saying. I wanna always improve and pay the government a little bit less if I can. And so the bottom line for 2026, higher deductions and inflation-adjusted brackets may lower your tax burden, but deadlines and planning still matter. So be proactive to keep more of your income and avoid stress. - That's right. And Jordan, thank you. good tax planning isn't about the loopholes, although we might be finding some of those. It's about being intentional. You work really hard. Don't give more than you need to to the IRS. - Which is what refunders, by the way. - If you get a refund this year, just know you overpaid the government as a blessing to them and they said, no, we can't take that legally, you can have it back. - That's right, that's what your refund is. - That's what you're referring to. You could be putting towards whatever baby step you're on, so take a closer look at that. But for any questions around how to file taxes or if you need to work with one of our pros, go ahead and head to ramsysolutions.com/taxes. That's ramsysolutions.com/taxes. All right, George. - We did it. - I feel good, that was very, very nerdy. That might be the nerdiest we've ever gotten. - No insults, no injuries. We all learned something. - Hi, we love it. - Use that at your next trivia night. - Woo, all right, let's go back to the phone lines. Taylor and Chattanooga, take us back down to Earth. What's up? - Yeah, so me and my wife have accumulated about $92,000 in consumer debt. And we have a plan to get out in the next 24 months. But I just wanna make sure it's the right plan. - Yeah, tell us, is it the Ramsey plan? (laughing) Tell us what your plan is. - Well, well, so it's actually kinda complicated. So we owe in bills about $3,000 a month that we're just trying to survive on at the moment. But we also wanna take anything extra and throw it at bills and we don't have $1,000 emergency funds. We just can't afford to do that. And I'm 100% commission based real estate agent. So checks don't always come. - But how do you say, you're gonna afford to pay off 92,024 months, but you can't afford $1,000 emergency fund? Not at this moment. - Why? What does that mean? Explain why you feel that way. - So basically my wife is a full-time student and she's a full-time worker and she makes just enough to cover the bills. My checks are kinda foreign, foreign, they have a lot of space in between them at times. - Okay. - So when we do make the money, we just started this plan. - That is. - This is the first month. So the money that we just had, we wanted to make sure we were good for the next couple months because there's that really ways on me. - What kind of debt does it have on me? - Can you break down the 92,000? - Yeah, so about $45,000 is her core and we're upside down on that one. It's probably worth about 33, so we're upside down about 13. 17 is my core. 17 is a personal loan and then the rest is credit courts. - Okay, how much is the credit card? So I don't have to do the math. - I'd probably say about eight to 9,000. - Okay. - Maybe 10. - So my first order of business, I really would be trying to get out of this $45,000 car. It's worth it to get the $13,000 loan and figure out a way to just get a cash beater, spend four or five thousand. I think that's gonna be worth it to you. And at the end of the day, you're more like 18,000 in on a car versus 45,000 in on a car. Have you tried that? - We have not. We've lived into a lot of options and getting out of the car, but at this point, we just kind of gave up on trying to get out and just more trying to pay it off. What did you look into? - Selling it and trying to get something super cheap, but we don't have cash saved up. We're actually like, you know, free at times or $100. - So what you would need to do? - What you'd need to do is you'd have to get a loan for the difference. Since you don't have it, you wouldn't be able to sell this car for 45,000 because it's not worth that. What you would need to do is go down to a credit union, go to a bank. I don't care how you get the loan. Anything's gonna be better than this $45,000. And then from there, you have an irregular income. It doesn't mean you can't contribute. It just means that you need a peaks and dollars fund over to the side and use your income to build that up. So you always have a month's worth of income there. That way you feel the freedom to actually use your monthly cash flow towards the debt and towards an active budget. - And I'd get two jobs in between these checks coming in to keep some stability, to get you guys moving on this plan. (upbeat music) - If you missed open enrollment, don't panic. Most health plans lock you out for the year if you didn't sign up by December, but Christian healthcare ministries let you join anytime. C.A. Jim offers a simple, flexible and budget-friendly alternative to health insurance. And you can join anytime. That's right, no open enrollment deadlines. C.A. Jim is perfect if you're self-employed, starting a business or in-between jobs, because it gives you options without those out-of-control co-bure costs. And C.A. Jim is an insurance. It's a community of believers coming together to share medical bills and pray for one another. That's real peace of mind. You're not just sharing costs, you are sharing community. And families have trusted C.A. Jim since 1981 with billions of dollars in medical bills shared. You can see any doctor or hospital you want with no network restrictions. And members say that they often save hundreds of dollars a month compared to traditional insurance. So make a change that fits your budget and your values. Check out chministries.org/budget to learn more that chministries.org/budget. [MUSIC PLAYING] Back to the phone lines, we've got Saber and Atlanta Georgia. That's a strong name. I like it. What's up, Saber? This is a five-day day in Georgia. I have a quick question. My husband and I are disagreeing on Dubai or not to buy a house. To buy or not to buy, that is the question. Tell us both sides of the equation. So he is 68 and I am 57. And I feel like I don't want to take on that risk because he's older. OK. So I don't know. So I have a fear factor of doing that. Now, the fear factor of him being older is it we'll get this house. We won't pay it off in time. There's not enough money there. And I'll be left if he passes with this huge mortgage. Is that what you're saying? Yes. OK. Tell us about you guys' net worth. And so we have our baby step three. We have our fully funded emergency fund. OK. We have about $20,000 in savings. And we have about $100,000 in investment. OK. $100,000 in retirement investments? Correct. And that's all you've got? Yes. OK. Now, when you said the $20,000 saved, that's the emergency fund or was that above the emergency fund? About the emergency fund. Above. OK. You both work in full time? Yes. OK. What do you guys make as a household? We bring home about 120-ish. OK. And what's the plan for the house purchase and the down payment and the price, all of that? Well, that's what we're kind of having an issue, because I want to put all the extra money into retirement funds. And he wants to not do that and get a chance for a down payment. Yeah. I do think at this age, you're going to want to do that simultaneously. Because with no debt, you're going to want to take advantage of that 15% as much as you can at age 57 and 68. How much of the $120,000 income is his and how much of it is yours? And how long does he plan to continue working? We make about the same right now. If he plans on working at least until 75, probably-- OK. Yeah, because I don't think he has a choice. OK, good. You guys have any debt? No. OK. That's good news. So if you look at the baby steps, you guys are square and baby step four, which means you're investing 15% of your household income. So that's step number one. We want to at least be doing that. So for you guys at 120, that's 18,000 a year going into retirement accounts. Then anything above and beyond that, we can now put in a separate account for a down payment. So based on that, how long will it take you to have a solid down payment? And then have a mortgage payment that you guys can actually afford based on your take home pay? That's the big question mark. What is a house cost that you guys are looking at? Probably about 350. OK. And we're starting from zero here where they're down payment. So what is your down payment goal? Have you guys crunching those numbers to go, hey, we'd like to have $50,000 to put down? Well, I hear Dave all the time say 20%. I would like to have a little more. I'd like to have $60,000 to $75,000 to put down. Yeah, I think for you guys' equation, the way you have to look at it these days is what you have to put down to get it to where it's no more than 25% of your take home. And at this point, it usually is going to be more than that 20% rule that kind of got squeezed out with the housing market. So I would be looking in a calculator and say, OK, what do we need to put down? What do we need to solve for in order to have that take home pay where it's no more than-- I'm sorry to have that mortgage where it's no more than 25% of our take-home pay after taxes. And so that's what I'd be looking for. What's your monthly take-home pay? - In my every dollar, we do about 6,000 average a month. - Okay, and that's just after taxes. - But it feels really low. - But we've already had money taken out for the investment that's just that point. - Okay, so what you want to do is find out the number that's just the after tax number. It's probably closer to 8,000. - We put 2,800 a month into retirement. - Oh, you guys are really socking it away. - Oh wow, okay. - So you may want to ratchet that down, and otherwise it's going to take you seven years to save up a down payment. Do you see how we need to split the difference here? - Ratchet down to 18,000. - Now it's 1,500 going into retirement, which just freed up 1,300 to go into savings. You see what we did there? - Yes. - And now we can start saving more measurably to go, hey, we can have 20 grand a year. So in three years we'll have the down payment to put down, and that might get you close. Right now on my calculator, I'm seeing about 2,500 bucks a month for that mortgage with the numbers you just gave me on a 15 year. - Okay. - Which means we either need to save a little more, rates need to come down a little more, the home value, we need to maybe look at a $300,000 home. So there's going to be some compromises here. Or we go make more, and we speed up this whole process and we can increase the amount of mortgage we can take on. But we need to also understand seven years from now, he's not going to be working anymore. Well now you need to be able to cover that mortgage off of whatever income you have, social security, you continuing to work, all of that. - Right. So I think those are the problems, or they're not problems, there are equations that you need to solve for, in order to go into this with a peaceful state. I'm all for you guys having a place of your own, and going into retirement with something that you can call yours as opposed to an renters position. I think that the mortgage is the biggest line item on your budget, and you want to go into retirement having control over that. So what George said is just right, it's going to take some time for you to sit down and think of this, but the advice that I want you to take away from us, and that I want you to share with your husband so you guys can discuss is, you got to do the investing and the saving for the down payment simultaneously. And it's really going to help you do that by keeping the investment at its proper amount at 15%. And if you try to do more than that, it's really going to make this thing lopsided, and it's going to be harder for you guys to do the things that you need to do to put you in the safest position in the right amount of time. So that's my final word on that. - Yeah, I'm going, if you could do 1,500 to retirement and throw 3,000 into the down payment fund, that's 36 grand a year, you got your down payment two years while investing, I like that plan. - Yeah, I like that plan too, and let's kind of zoom out on this a little bit, because I do think that this is something that people ask us a lot. Even if it's somebody who was in baby step two, maybe it took them a really long time to do baby step two, maybe they're already in their 40s or something like that, and they're thinking about buying a house. Once you get into baby steps 45 and 6, you really guys don't want to delay, you don't want to delay the down payment really any more than two to three years, delay it by your investing if that makes sense. So if you think that it's going to take you more than two to three years to save your down payment, you should probably go ahead and start investing beyond that two years, 'cause we really don't want you to miss out any more time in the market is basically what that boils down to. And that's why I suggested what I suggested with them is because they're already 57 and 68 years old. They don't have the time to waste, to be honest. - I'll be projecting, hey, based on the real numbers of our social security, what I'll be making, can we afford to cover this mortgage payment without his current income? - Yeah, that's the big number that you're going to want to know, because the truth is they're probably not going to have time to pay off a mortgage before he retires. - Yeah, I mean, that's seven years from now. - Yeah. - And if they get the house in two years, we've got five years to knock out this entire mortgage, with that income, it's not going to happen. - Which, - So we need to look at reality. - Yes, and another good reason for 15-year mortgage versus the 30-year mortgage, because that's going to give her a lot more security. - She'll pay it off in her lifetime. - Exactly, exactly. So there's a lot of reasons, there's a lot of methods to the madness of what we teach George and a lot of it has to do with setting you up to really be in the most secure position that you could possibly be in. It's very conservative, but at the end of the day, you're not going to be worried about your house. 15-year mortgage, you're not going to be worried about if you have enough in retirement, if you do the things that we teach in the order that we teach it, so it's super, super important. - And remember this, retirement is not an age, it's a financial number. So I don't care if you go, "Well, I'm 67, it's time to retire. "Not if you're broke." - That's right. - So you don't just get to because it's time for everyone to go live in, they're 55 plus community, you get to retire when you can afford to cover all of your expenses from the investments you have and maybe Social Security is gravy on top, but never rely on that. Especially the younger generations, we all see the writing on the wall, all right? - We know, Social Security, I mean, it has the ability, I've been reading articles that say that it could be depleted as early as 2034. - Uncle Sam is not doing great financially. - We're like $38 trillion in debt. - Sure, yeah. - They're running out of money left and right, and so we gotta look at the cards and go, we gotta invest for ourselves. We can't rely on any government program to save us in retirement. You gotta create your own ship here, build your own arc. - And of course, you'd wanna do that anyway, because the way they're investing that money, obviously, there's not enough of it to go around anymore, so. - It was never meant to replace a hundred percent of your income. - That's right, yeah, exactly. So let this be a word to the wise, do your own investing, think ahead, and be proactive guys, work these baby steps. (upbeat music) (upbeat music) - All right, welcome back to the Ramsey Show. We're here in the Fairwinds, Credit Union Studio, George Campbell, Jay Warshaw. You ready to get to these phones? - I'm your hype, man, let's go. - I'm ready. - Keegan's ready, he's in Cincinnati, Ohio, what's up Keegan? - Hi, I was going in, 'cause we live in a hotel, then we just told her that we use for InstaR, how do we recover from one part? - The hotel, all three? - All three, yeah. - Okay, so you wanna get out of the hotel? - We wanna get out of it, first we need to get a new car. Second, we wanna get out of this hotel, 'cause she's pregnant, and. - How long have you been in the hotel? - And why? - Since, why? Because some family things with her family, and I kind of, we lived up in Columbus, and she had some stuff going on with her family, and we decided to move. - Okay, so you did not have your own place prior to this. You were living with family? - I was living with my parents. - How old are you guys? - I'm 21, she's 24. - Okay, so you're in the hotel, how long have you been in the hotel? - Since about July. - Oh boy. - What's the rate to stay there? - It's like, it's expensive, it's like 1,400 a month or something. - Okay, 1,400 a month, and what's your income? I mean, I know the car got told, but what are you earning? - So, we were earning about like $800 a week. - Was that both of you doing Instacar or what? - How was both of us doing it together? - In one car? - In one car. - Yeah. - Okay. Can I ask why is one of you not working outside of the car, basically? - So, I was, but then I just had to quit my job because I wasn't getting paid well enough for us to like kind of survive off of it. And Instacar was just better for both of us, 'cause situations we really couldn't control. But I wasn't getting paid overtime and I was working so much, but they didn't pay me overtime for it, so. - And what kind of job were you working? - I was working for marketing firm. - Okay. And so you would get a marketing job today if you could. - Yeah, I would. - Okay, and how about her? - She would probably do something server related. - Okay. And can you do that as we speak? Can you work at this hotel? That would probably be a better bet right now. - Like, what do you mean? Oh no, I tried, but they said they don't have anything. - What about cleaning rooms? - I have, they have someone who does that. - Okay. - Did you not have insurance? - I did, but we only had liability. - Okay, so it's on you. - Okay, so. - Yeah. - What must happen? I mean, this is as quickly as you can. Instacar is not an option either, clearly. So both of you have got to, I don't care if it's walking down to the nearest fast food place or walking over to Walmart or Target. You gotta get something somewhere that's within walking distance or bus riding distance. - Yeah, I can, we can Uber some places, but that just gets expensive. - How much money do you guys have? - That's why I said bus riding. - Not enough to keep us afloat for another week maybe. - Do you have a few hundred bucks? - Yeah. - Okay, and do you have any debt? - Yeah, we both personally do. I have like five, six grand in credit card, and she has like four. - So all credit cards, about 10 grand total? - Yeah. - Okay. And there was no car loan to speak of? - No, no, we paid the car in cash. - Okay, that's good, that's good. - Yeah, that's good. - Do you guys have any friends or family that you can lean on right now? A church community, anything? - Not, I mean, honestly, no. - Okay. Well, you're gonna need to find something 'cause this hotel is about to kick you out. - Yeah. - Mm-hmm. - Yeah, I've talked to them before and we kind of talked to them. So like I was hoping maybe they could help us out just by a little bit of time But I don't know that really realistic or not. How often are they having you pay? Is it every week? Is it how often do you have to make the payment? I'm usually weekly, but sometimes they let me get like I'll be up They let me get a little behind and they at that if I need to okay. Yeah, I'd be requesting I let them know what happened Number one and say yeah, I know I've been paying you weekly. Can I pay you? You know at the end of the month can we make this more of a monthly deal? Because right now you guys are kind of like This is desperate. Can you get a bicycle off Facebook marketplace for $40 and make it somewhere and work What is the closest retail options by the hotel? They're Kroger. Perfect. There's like a Kroger. How close? Is it walkable? Then likable? Yeah, within like a mile. Okay. That's what I want you to do That's your homework. Both of you are getting a job at Kroger today. Yeah, make after this call literally right after Talk to your girlfriend and you guys sit down and make a list of everything that's in a two to three mile radius Waffle a waffle house Kroger McDonald's everything and I want you guys. That's your field trip this afternoon and tomorrow You're gonna apply at every one of those locations until you get a job This is the gap between you guys in homelessness. You understand how on fire. Yeah, exactly in Central Like you don't even have a car to sleep in at this point. Yeah, no exactly That's what made it like scary today is because like we've at least had options like okay this this So I'm sure if I like It's just scary because like I don't we don't know where with the next plan is essentially like I hope we they can help I'm sure that I know the owner and the manager pretty well here and I'm we're pretty like Close to each other. That's good. But that's not gonna last you long until you stop paying. Yeah, so do that Exactly. They say like don't only laugh me maybe two weeks. Yeah, do that homework that I just gave you And then the second piece of homework is I want you to find a local church and I want you to walk up in there after you've Applied at all these places and I want you to walk up in there and say here's the deal And I want you to tell them exactly what you just told George or scared or borderline homelessness or just or we're good people We just want to find some promise work and I'll say I We can we serve and and get a wage is there something that we can do to earn some money We really need help and we're willing to work in order to have it. Okay, so those are the two things that I want you to do Okay, I say there's like because we Gone to a church over here a couple of times and there was a Catholic church. I kind of hope if that was right like not the the past month So like there's people that I think may help but I just don't know if we should ask the church the same Catholic church again and be like hey If you're willing to work, I would I would say I'm not just asking for like benevolence Can I work is there something I can do can I you know help with parking in the morning? Can I help with this or that do you need something out of store like whatever it is I would be willing to work and whatever I mean go to a couple and say we're just trying to get back on our feet And we're willing to work and serve to do that Um, and I think this is you guys can pull yourself out of this at one point you were making $3200 a month, right? So I want you to remember that and you worked at a marketing firm And so I would be looking for that next gig so that you can afford to get a car that might mean we start with the bicycle And then we upgrade to the mo pet and then we upgrade to the beater car and then we go from there But you just need the next right thing to get you to survive another day right now and then long term We need to figure out a life plan because whatever got us here ain't it And I heard a lot of well we had to and then this thing happened in the family at some point We have to just look in the mirror and go dude. I can only control the guy in the mirror And everything can't just happen to us you have to start happening to your life. Otherwise you're gonna be right back here next week True. Yeah, so that's that's current order of business just to recap You're you're making a top 10 list of everything in a three mile radius and you're going there You guys are literally hitting the pavement and going to apply everywhere Then you're hitting up these churches then you're circling back I would wait after you've done those three thing those two things then I'd circle back to the hotel and say Here's what's happened to us and here's what I did to data correct it But just so you know, it's probably gonna take a couple of weeks for this to pan out Can I pay you the rent at the end of the month instead of at the end of this week? And that's you know, hopefully gonna be your savings grace here guys. I best of luck to you truly truly stay warm Stay fed four walls man. That's all you need to cover right now. Don't worry about the credit cards right now. We'll get there When you're tired of feeling stuck with money There's just one solution to get different results you have to do something different No one accidentally wins with money you have to have a game plan and that begins with our get started assessment Go to ramsy solutions.com/start Answer some questions and we'll show you what steps to take next Don't stay stuck take control of your money starting today go with ramsy solutions.com/start So if you're working the baby steps the best and the fastest way to do it is by using every dollar It's more than just a budgeting app now. It's a plan that's built right in the ramsy plan is built And baked into the app people you can track your progress get personalized recommendations and coaching Specifically for your situation that's gonna help you free up more money and work the plan even faster It's like having one of us walking with you every single day in your pocket showing you the next right step and holding you accountable So start every debt every dollar for free by downloading it in the app store or Google Play today Alrighty then let's go to Gwen who's in Lynchburg Virginia. Gwen you're up Um, so my question is about medical debt and who I can contact to Potential and get this taken care of what kind of medical debt like how long is how old is it? So um our son turned to in October I just worn on premature What's the total medical debt Um Sorry, you're breaking up on us one from Can you speak clearly into your phone Can you hear me yes Okay, so um we have two different totals from the same hospital. Okay, the first one is almost $6,000 in the second one is right at 17,000 Okay, wow my goodness you guys have insurance We do um and we had it ever since he was born Which is my confusion Okay, so you're saying it didn't get run through insurance properly or what happened Yes And the hospital won't meet with us To figure out where the confusion happened and It's been over a year So this technically isn't there responsible it They've sent it to collections have you have you tried resubmitting the claims through your insurance? I have um, but we're running into the issue of it being over a year old Well at what point did you try resubmitting the claims? Because they come in pretty soon after the fact Well, we were in the NICU for um over three months Okay, well they didn't bill any of it until after we were out of the NICU And we didn't start receiving like The itemized bills until Probably October Which was close to that year mark already Okay from all the office bills because it took them a while to run everything well Even if it's in collections you can still dispute it. It's not stuck at that charge And so you have the right to dispute it You can send a certified dispute letter to the collection agency not just a hospital And when it's formally disputed you actually write them a letter They have to stop collection activity until they can verify it Okay, so that's your next piece of homework is you write this dispute letter send it to the collection agency And after verification then you can negotiate and you can ask for the patient advocate or the billing supervisor Those are the people you want to get in touch with the front desk people cannot help you And so you need to keep pushing to get in touch with them You don't need to physically sit down with them But you need to get in touch with them pester them until they go I got to get going off my back They're calling she's calling me four times a day trying to get in touch Yeah Because it sounds like it truly sounds like some of these didn't even run through insurance or be submitted And maybe you didn't realize that but if that kind of statute of limitations has run out Then that's what I'd be trying to Make right is say I didn't even receive these in time to dispute them To resubmit the claim At that point you can go ahead and eat an itemized bill and let's rerun that through insurance And then you'll get a final total and then you can dispute that with collections And they can adjust the charge and you can then settle and pay it off Yeah Which is I'm sorry that you're going through that that's probably the last thing that you want to be going through You know you got a pre-meet to take care of that's tough And that whole world is just filled with incompetence And errors and some of them are malicious and some of them are just people not paying attention Yeah, super frustrated. Sorry you're going through that Gwen, but thank you for the call. Mark is in San Diego, California. Hey, Mark, how can we help today? Hi, how you doing? I'm just trying to figure out if me and my wife are able to buy a house out here in San Diego for some background information. We've already been here three years, we're both military, so we'll be here in another three years. But the past three years we've been staying in apartments and paying about $3,000 a month in rent. And together we make monthly about 13,000 together. Okay. What kind of money do you have saved? Yeah, so that's the thing. We only have like $8,000 saved right now. Okay. I'm not sure where all of our money is going. I mean, we do a budget, but I feel like our lifestyle is maybe like increased or something because it's called lifestyle creep. The more you make, the more you spend. Yeah, you got $10,000 going somewhere. Do you have any kids? We don't. It's just me here. Oh, man, y'all are living. When you say we do a budget, what does that actually mean? We actually sit down and we go over together. I think maybe most of our money is going like to sinking funds. Maybe I'm paranoid about that. For car maintenance and registration over time. But I just want to example, and then maybe savings, like as in like trips or I don't know something. Okay. Do you guys have any debt right now? We have zero debt. Okay. So your next order of business is stocking up the savings account. You can keep the savings, the sinking funds that make sense. You don't need 17 of them. But if you want to have a car maintenance and repair fund with a reasonable amount in there, that's fine. But I suspect if I took a look at your bank statement, it would tell a different story of a lot of eating out, a lot of shopping, a lot of just kind of sloppiness around. All around. Yeah. But if you got control of this, you could guess, could stack up cash so fast. I mean, what would it cost? Well, what do you, the properties or the condos that you're looking at? What do they cost? Yeah. So our, well, our lease actually ends in May, which is why I'm kind of like looking at this now because I'm trying to figure out whether to, you know, for another year, stand as a apartment or move out. I'm looking about $750,000 about. Where else out here? Yeah. Okay. Move out of our apartment. So here's into a house. Here's a tough part with that. With your timeline, you told me you've got three more years in this location. It's hard. And then a year of that's going to be spent saving for this down payment, which puts you kind of at a two year horizon. I'm not sure that I would get into that situation that you're going to have to turn around and move right back out and try to sell that place. Is it guaranteed that in three years you're moving? Or you'll be relocated? It's not guaranteed because like I said, we can get another three years here probably if we like, if we really work to get it, we could probably honestly get it. And I feel like the past three years I've been throwing my life away with just paying rent. And I feel like I'm understanding that. You're not throwing anything away. You're buying patients here, Mark, because here's the truth. How are you going to afford a $750,000 home four months from now? Well, I see on the screen, it says VA loan. Well, is that your question? Oh, were you going to try to play nothing down? Correct. Exactly. Okay, let's play that out. Nothing down. I'll put let's say $5,000 down. Your payment would be about $7,300 a month. Now rent looks like a deal, doesn't it? That's true. So you're not throwing the way money on rent. It's actually a better deal for you right now because of your where you're living and how much money you guys have to just stay put and renew that lease and keep getting the income up, keep stacking cash away. The truth is, for your first home to buy an $800,000 home, it doesn't make sense. No, that's your level jumping. And you would need like $400,000 down to make it make sense even with your incredible incomes. Now let me ask you this because in many ways, the idea of being relocating could be a blessing for you guys, you could get to a less expensive area. Would your pay remain the same? Let's pretend you got stationed elsewhere, maybe somewhere up north, maybe a little less expensive cost of living. No, it would probably decrease thriftically. And then that's where we would like bring out the house or sell it because everyone down here is all about you know. If I were you, I would spend this time, you've got three years with a great income, you've got an extra $10,000 a month after you've paid rent. If you guys really get on a true budget, we'll make sure you get on an every dollar budget. This could be the time that you guys are stacking up so that if and when you do get relocated, then you'll be ready to actually put down some roots and buy something that makes sense. That's within your price range. If you've been paying off debt, working the plan and have reached baby step four or beyond, you've done the hardest part. Now it's time to celebrate. The live like no one else crews is back. March 14 through 21, 20, 27. Join all the Ramsey personalities and me as we sail to Half Moon Key, Cosamail, Jamaica and Grand Cayman. Cabin sold out last time and they will again. Lock in yours with a $600 deposit at RamseySolutions.com/events. That's RamseySolutions.com/events. All right, the Ramsey Show. Question of the day is brought to you by YRIFI. If your private student loans are in default, it's time for a plan. YRIFI helps you refinance defaulted private student loans into a low fixed rate payment so you can get back on the baby steps and start making progress. So go to YRIFI.com/RAMsey. That's the letter YRIFI.com/RAMsey. Remember, it may not be available in all states. Today's question comes from Bobby in New Mexico. My wife and I are in our 70s and we are retired. We have no debt. We have a little over 300,000 in retirement funds and our home is worth about $450,000. Between Social Security and Investment Income, we make about 70 grand per year. I'm trying to eliminate as many expenses as possible from our budget and my question is regarding our term life policies. We are paying $225 per month for two policies with $250 grand and $500,000 payouts. I want to cancel them but my wife wants to keep them. Our kids are all doing well and don't need any financial help. What should we do? I wonder how much is left on the term? That's a good question. Is it like one year left or is there 10 years left? But $225 a month, that's sizeable and term life, it's going to get more expensive as you take out a policy of 60. It's a lot more expensive than if you did it at 30. So the point of term life insurance is to replace your income if something were to happen to you to cover those that are dependent on you. So the fact that you guys have Social Security and Investment Income that covers you without needing to work, that gives me a little bit of peace if you wanted to cancel them. That's true. Now is this thing burning a hole in your pocket at $200 a month? It's not the thing that's tanking you. If it's not a big part of your budget and helps your wife sleep better at night knowing that she's covered, I hope you have the bigger policy and she would get a $500,000 payout and you're in your 70s and so it's no joke that there's not a whole lot of time left. Hopefully you live to be in your 90s but Lord only knows when you could go. If it gives her peace, how much time is left? That's the big crux on this. Because I'd be inclined to keep it because at 70,000 a year with no payments, I can't see $225 breaking you. Yeah, to grand out of that to cover these policies is not a huge deal breaker. So I would personally hold off on canceling them. It's a good deal right now for you as far as the payout versus what you're paying per year and in your 70s, I would also look at your health and go, "Hey, realistically, how long do you think we'll live barring any kind of crazy accident?" God forbid. So I'm glad you guys have term life. That's awesome. I would definitely pause on this because your wife wants to keep it and because of your age and because of how small of a portion it is of your life as it stands. Yeah, and I could see with only 300,000 in retirement, her wanting the extra 500,000 if something should happen to him, I could see that being a safety valve for sure. Yeah. You know, I'd probably say the same thing. Keep it. Yeah, I actually was just looking at I was on Zander's website getting quotes today to add another policy and it was shocking how affordable it is, especially as you're younger. I'm, you know, 36. Yeah. And I was looking, I was just clicking around and I went, "Okay, let's say you wanted a million dollar policy." Well, for a 10-year-million-dollar policy, it was like 26 bucks. You bumped up to 15. It goes up a little bit and the longer you go, the more expensive, obviously, because they averaged it out over the course of those 30 years. Obviously it would be, it would be more expensive later on. So they just take the average and go, "Your payment is this." That's a level term life policy and we always recommend if anyone depends on your income, you need a term life policy that's worth 10 to 12 times your annual income. So you make $100,000, you need them. a million to 1.2 million in term life, and a 15 to 20 year term is what you're looking at, especially because you're following the baby steps. - That's right. - So your house is gonna be paid off by then, you've been investing for years. So if you need a policy, you probably do go to zander.com, or you can call 800-356-4282. - Yeah, and to be sure, the point is to get to the point where yourself insured, and you don't need these anymore, like I said in their case, they seem like they're on the line with the $300,000 nest egg. I would love if they had-- - 3 million. - Yeah. Listen, if they had 700, I'd feel a lot better about them canceling that. So that's what your, that's the whole picture of this guys. All right, let's go to the next thing. We've got Patricia. She's in Jacksonville, Florida. Hi, Patricia. Patricia? Are you there? - There's a good effort. - It was a good effort. - Was she on mute, maybe? I always wonder. - I'll come back to you later, Patricia. - Okay, we'll get there. - All right, instead, let's go to John. He's in Los Angeles, California. John, are you there? - Yep, I'm here. - What's up, John? How can we help? - Guy, I'm looking to get a new car. My car's getting older and I'm having a lot of issues with the engine and stuff. So I've been spending a lot of money to keep it running. I drive a lot for work, and I'm trying to rationalize getting a car for 30,000 versus getting one for 15. But I feel like I'm in my car a lot, so I want to love what I drive and financially I've been preparing for this moment for a long time, so I think I can. - So you have the cash for 30,000? You have 30,000 cash? - Yeah, I can put 30,000 up. - Interesting. What do you earn? What's your income? - I make 85,000 a year, but I'm very meticulous with how I spend my money, where it's going, and I have my emergency funds, investments, so I think if I can get to that number, that would be okay. - Yeah, but I wanted to. - And you have no debt? - No debt. - Man, why do I love how old are you? - 26. - Goodness Christ. - Good job. - I'm very impressed. - I tell you what, we have some folks calling in at 26, and I'm praying for him, but here, literally, have I greenlit a 26-year-old buying a $30,000 car, and you, sir, I have checked all my boxes. You're paying cash. It's no more than half your annual income, and you've got no debt, and an emergency fund in place, you're investing for the future. And so here's what you need to know about buying a $30,000 car that you use for work. You are going to drive this thing into the ground, and depreciation is gonna hit it so hard. This car is gonna be worth 15 grand two years from now. That's what you need to be prepared for, and that's okay, 'cause you're paying cash, you can't be underwater on a car you paid cash for. Just know that you need to ride this thing out. The longer you drive it, the better of a deal it is. - Yeah, that's the plan. I mean, it's a Honda Civic Hybrid, so I mean-- - Yes, my man. That is a fiscally responsible 26-year-old. - Yeah, it is. Good for you, my guy. - I love it. - I have nothing more to add. I mean, I would go drop that cash today. - Maybe an upgrade to the Accord, a little roomier. Who knows? - Ford? - I don't know. There's a Honda Accord person. It's not me. I'm not a car person. I don't feel, this is controversial. You can drop it in the comments. I don't feel safe in a car. I think I've always been in an SUV, and so when I get in a car, I'm like, number one, I feel so close to the ground, and it feels so small. I just feel like if somebody hits me, it's curtains for me. - Oh, wow. That's hard. - I will say, my dream car, this is during COVID, and I wanted to upgrade from my own nine Civic, and I was looking at an Accord hybrid. That was like a 2018. This is during COVID. It's been two years old, three years old. I could not find one for under $30,000, 'cause I remember how expensive cars were. - That's right. Use cars particularly. - And so I gave up. I gave up on car shopping for a little bit, and then I fell into a very old Tesla. That's, I still have on my person. - It gets the job done. - Oh, my goodness gracious. He's thinking hybrid, fuel efficiency, no issues. - I love that. - That's a smart man. - I love that. Okay, going back to our questions from social media, I like this. It says, let's see, let's go to Michael. Let's do that. Let's go to Sarah from Facebook. Our six-tune-year-old son just graduated college and has his first job. He's too young for their 401K, so what would be some good options for him to invest in other than high yield savings? - Wow, what an impressive man. He's so young, he can't even contribute to the 401K. - Well, the fact that a 16-year-old has a job at a place with a 401K, tells me he's a big boy stuff. - Doogie-houser. - So here's the good news. You can always invest into a raw-fi array as long as he has earned income. He can put up to that much in a raw-fi array. In the limits this year, I believe, or $7,500. - That's a lot of money. - Yeah. - And so if he makes at least $7,500 this year, he can put $7,500 into a raw-fi array, which means after tax money, he's not gonna get a deduction for it, but then it grows tax-free for the rest of his life. And let me tell you, you can pop this into an investment calculator. 16 years old, $7,500, one time at 66, it would blow your mind. How many hundreds of thousands of dollars that turns into without you lifting a fairer? - That's right. Man, this kid's a genius. 16 years old graduating from college with his first job in a 401K. - You raised him right. - Woo! - That's how you that much. Gosh, I'm feeling behind in life. (upbeat music) (upbeat music) - Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about. And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com/realestate. That's ramseysolutions.com/realestate. (upbeat music) (upbeat music) - Our scripture in quote of the day, "Cleasy Asties 4-9-10. "To or better than one, because they have a good return "for their work. "If either of them falls down, one can help the other up. "But pity anyone who falls and has no one to help them." Mm, mm, mm. Henry Ford said, "Opsicles are those things you see "when you take your eyes off the goal." Interesting. Man, I was on that at Cleasy Asties. I pity somebody who's still-- - I wanted to get you. - I pity the fool. - I pity the fool. That's Mr. T reference for anybody who doesn't know about that. - Throwback. - All right, Stephen and Los Angeles, California. I bet he knows who Mr. T is. What's up, Stephen? (laughing) - Hey, good afternoon guys. What's going on? - I'm not gonna help you, Stephen. - Yeah, my question is, you know, I'm in the process of selling my business. And just at the same time, a wife got a, well, the company that she worked for pull out of California. And she's trying to get us to relocate to Texas. - Oh. - I own my business here for a couple of years and I support my parents here. I owe both the house and my parents and our primary resident in California. So my main question is, you know, I do watch her for a few and I, and about you guys' opinion, should I, should we stay and take the severance or should we just pursue, you know, for some of life and pursue a career, which seems to be in a pretty good, awkward trajectory. - Interesting. So are you excited about it? - Well, we just don't know what to do. And it's a big dilemma for us 'cause we have all our roots and family here and kind of one A.O.B. Pretty hard to leave everything and just move to another state. - Is there a big, is there anything financially that would make it a really great move? - You know, I don't think so. I'm invested in that was young. I'm about to turn 40. So I have pretty healthy savings account. It's more of a, whether you wanna just, 'cause I have no plans after I sell my business. And I don't wanna say like, I wanna think kind of because of a letter. - Do I plan on selling it soon? - Yeah, it's already, it's already in process. - Oh, okay. What are you gonna make from that? - Probably like 1.5 million. - Okay, and what do you already have saved? - I, you know, I get that I started young investing. So I probably have about four million in my savings account. - Dude, way to go. - Yeah, excellent. This gives you flexibility. - So stock 401k, IRA, Roth, you name it. (mimics clicking) - And you're not sure what you'll do after this. Like you don't have your eye on the next thing. - I have no plans. - Okay, so. - I'm not even 40 and I don't wanna just like quit and do nothing. - Sure. - You have too much to contribute to society with a guy Sharper is you. So I hope you, I'm sure you will move on to something awesome next. But the big question is, you know, the family part. You know, is she gonna make more, there's gonna be more stability, long-term opportunity, [BLANK_AUDIO] or cost of living all of that better quality of life? Is that gonna be true in Texas? - I don't know. That's the part I was kinda figure out. She's a very career-oriented person. Like, you know, for filming of life, comes with having to go career. - Well, I'm sure they're gonna cover relocation costs, right? - Oh, absolutely. - And what's her pay raise gonna be? - She makes about 150 right now. And she's probably gonna make around 170, but with no state income tax in Texas. - Have you ever been to Texas? - Just, you know, passing through, not really living there. - I would before, I mean, have you lived your whole life in California? - No, I moved around all over the place. - Oh, okay. - Oh, okay, good, good, good, good. Okay, that's good 'cause I was gonna say, part of moving is just new culture, just everything feels different. So if you have the opportunity to spend more time in the place that you're thinking of moving, I would just to see, do we like this place? Do we get a feel for it? Maybe take a vacation to the area that part of town where she might be working that you might be moving to. And just see, do we like it here? Do we get a good vibe? It seems like you have the money and the flexibility to do something like that and just get a sense of where it might be. - Financially, you can afford to do pretty much anything. You're not gonna be spooked by, oh, the property taxes are higher. You guys can stomach anything financially and I'm guessing it's actually gonna lower your expenses while raising your income. - Absolutely. - And so that part I'm not concerned about, it's more the lifestyle and quality of life. So I would go there, visit, look at the houses, look at where you would likely live and get a sense of what life would be like there. Are there kids in the mix? - Yeah, we got two kids. - How old are they? There's three and seven. - Okay, so they're portable. They're not locked in anywhere. What did you mean before when you said you're supporting your family, like extended family? - My parents, my parents, they're older. The house that they live in is, I pay for it. That basically just pay for their living expenses until they're a sort of security exam. - Okay, and do you foresee needing to be close by or is it literally you're just writing checks? - Well, they express that if we move, they wanna move with us. - Okay. - Not on the thing house, but they probably gonna sell their house and they don't like it. - Okay. - So now the whole family thing, they're portable too. - Yeah, that's the thing. - It's just so much they'll have to deal with by moving, you know, uprooting the whole family there. - Yeah. - I just don't know if it's worth it. - Your money's gonna go so much further though in Texas. - That's why the company's moving out there. - Yeah. - So. - Oh yeah. - They're even in droves. - Yeah. - I'm just wondering, what is the alternative here? Let's say she takes the severance and then what? And then she just looks for a new gift. - That's where my money got here. - Locally. - Okay, well here's the truth. She could do that and you guys would also be fine. - There's no wrong answer. - And so I would really rely on her own excitement because everyone can be moved and there's nothing that can't be reversed. Let's say she hates it with a burning undying passion and you guys all go with this is terrible. Well you could pack up and move back. And yeah, there's gonna be a little cost and like emotionally it's gonna be a little exhausting. You could go back to California three years from now and it'll still be there. - Just keep that all the more expensive. - Yeah, I mean, if you wanna keep it with your finances I don't love the idea of being a long-term landlord but if you're like, hey, let's try it out before we sell the house. - This is trial. - You can pay cash for the house in Texas, leave yours there and still be okay. And long-term if Texas is it, sell the house in California. - So personally I want team do the adventure. - Yeah. - Yeah. - 'Cause you can't do it like the kids are in high school and other matches. - You can be the fact that it's sorry I was talking over you but it can be the fact that it's like 75 year of the rest of the country is freezing right now. - True that. Now that's why I said about visiting and maybe it's like when you go look at a house you see it in the sunlight but you also wanna look at it on a rainy day, you wanna go to the neighborhood with this dark outside. You wanna see it at its worst. So if I were you, I'd love George's idea of kinda doing a trial run, go down there for a period of time first off just to even see. And then if you're like, "Oh, maybe we could do this." Maybe she accepts the job, you guys go down there, you rent a place, you keep the place in California, you keep the parents in California for now. - Yeah, it's rent a sweet house in Texas for six months or a year and that way it gives you some buying time instead of going, "Oh my gosh, we just got into this house." - Yeah, I really like that idea. So if that doesn't fire you up, then that would kinda make me think maybe we don't wanna do this because to be able to try something and that still might be like, "Oh, well I'd rather, here's my thing, I'd rather regret doing it and saying we tried than not doing it and her gone, man, what, would that have been like if I just stayed with the company? I have all of this built up in this company. I get to move, I get this upgrade and pay, we get this new adventure for the kids. Kids are very resilient. - Kids are very resilient. I would have, before when it sounded like he had been rooted in California for longer and I was like, "Oh man, this could be tough." But after he said he traveled around a lot, that does create kind of just a feeling of, "Oh, I can go anywhere, I can make friends, like home is where the heart is." But if you're a person who's lived in the same place for maybe 15 or 20 years, moving can actually be very tough 'cause it's communities, it's creature comforts, all that stuff. - Oh, that's the level of net worth and income. I mean, they could charter a private jet to go visit California five times a year and still be okay. - I think good. - That's right, they totally good. And living in Texas, like I said before, that money's gonna duplicate itself. Their cost of living is gonna allow them to have way more for their money, which is definitely something to think about. - Yeah, he can take the kids to California and wife can work for a week or two and he can just take the kids and take a little trip. - I don't know, she might be like, "Hello out there, you left me." - Come back and get me. - That's so fun. - Oh gosh, when Sam and I moved from South Florida here to Tennessee, it was like, "It's not easy. It's an adventure for sure. You have to have a spirit of adventure, which I think is a good thing because that's where opportunity is. - Amen. - It's out there in the adventure people. All right, thanks for hanging out with us. George and I, hey, remember, there's ultimately one way to financial peace and that's to walk daily with the Prince of Peace. Christ Jesus. [BLANK_AUDIO]