Wisdom Starts Where Debt Ends

[MUSIC] Brought to you by the EveryDollar app. Start budgeting for free today. [MUSIC] Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey network in the Fairwinds Credit Union studio, this is the Ramsey Show. I'm George Campbell joined by Rachel Prude. We're taking your calls in triple eight, eight, two, five, five, two, two, five. Isabella picks us off in Washington, D.C. Isabella, welcome to the show. [MUSIC] >> Hi, thank you so much. >> Absolutely. >> We are currently paying over $5,000 a month in bills in Hayden-Hell. And in a few months, we're going to be moving and then paying less than $1,000 in bills. And we're hoping that you guys have some advice on maybe budgeting better. We're going to see a significant drop in our bills, which leads to an increase. I guess our bank account. And I'm worried we're going to see that money and be like, wow, now we can buy all these things that we want and go out to dinner. And this is great, and we're 27, you know? So that's crazy. >> That's crazy. >> And we're going to want to spend it. >> What life hack did you find to cut your expenses down by 80%? >> In 2020, I bought a property, a two-bed two-bed condo, and the mortgage. I put over 60% down on it, and the mortgage is $300 a month. So we're moving into it. >> So it's the mortgage that you're basically giving up that $4,000? >> Yes, you have the rent in Washington, D.C., is insane. >> What's your household income? >> It's about 10 grand a month. >> Great, so you have five grand and expenses. So you should already have five grand left over. Life as it is. >> Yes, but then of course, Washington, D.C., is expensive, and it's groceries, and just life in general. >> So that doesn't count groceries. >> Are you guys moving out of D.C. then? >> We are, yeah, we're moving to Hilton, that island, which is really cool. >> Oh, gosh, well, that's wonderful. >> That sounds nice. >> Rachel's jealous. >> That sounds nice. >> Okay, so your income stays the same at $10,000, but your bare bones expenses go down to $1,000. >> Yes. >> And you're worried you're just going to spend the difference instead of do something smart with it. >> I am very worried, and then I'm questioning, do we try to pay off the rest of the house? I mean, we have $40,000 left on it, but if it's only $300 a month mortgage, is it smart to pay that off? I think at 3% interest, it's making more. >> So, if we put it in the stock market, I think it would make more of that, wouldn't it? >> Well, there's a lot of ifs here. Number one, you're not investing right now. Number two, we're hoping the market is up consistently, which over time, it's going to go up into the right, but there's going to be years where it could be down 20%. And so there's a guaranteed rate of return, which is paying down your mortgage systematically. And then there's the variable of we could make money in the market. So I want to make that part clear. >> Okay. >> So, the second part here, do you guys have any other debt outside of this mortgage? >> Nope, nothing. >> Amazing, and you guys have savings? >> Oh, yeah, we have over 100 savings. >> Oh, wow. >> A hundred grand, sorry, not $100, a hundred grand. >> A hundred thousand savings and no debt. So you could pay off the house today and still have 60 left over. >> Oh, absolutely. >> What's stopping you? >> It's just a question of, is that smart? >> I don't know. >> Where is that 100 grand? >> Look how the vehicle back and forth. >> Where is the 100 grand right now? >> Just in okay, so your point about making more is not really a point because that $100, and it's just in a regular savings account. It's making a little over 1%, even less than 1%. >> Is it in a high yield savings? >> Yeah. >> I have to ask him. >> I bet it's just in a traditional savings, yeah. >> Well, I'll tell you what I would do if I was in your shoes. It's besides the point from your question. But I would pay off the mortgage today. Be completely debt-free, housing everything. The piece you will feel is unimaginable. Your risk will go down. Your margin will go up, even if it's by 300 bucks. And now you guys are making 10K with $700 in expenses. That's pretty wild. So here's what I would do to force yourself to do the smart thing. To eat the vegetables first, as we say, is to auto-transfer that money somewhere where you can't touch it. And for you guys, since you'll be in what we call baby step seven with a paid four house, that could be two investments every month. And you're saying the 4,000. And margin that they're going to get. You would just, you would direct it too. >> Well, if you have 10 grand coming in and only 1,000 in expenses, you might go, we should upgrade our life in some ways. >> Yeah, I was going to say, I think you can do all the above Isabella, honestly. I would, if I woke up in your shoes, I would write a check. I'd be done with a mortgage. I mean, and if you hate us, you can take out another one later if you'd like. But I would pay it off. And then from there, really, I mean, the uptick on lifestyle, this is true if you're getting a lifestyle increase like you guys are, or if you're getting a massive raise or people that change jobs and they see this, it's good to be in a practice and a flow of three things of giving, saving, and spending. Okay, so when we're talking about the saving, you need, yeah, you guys need to be putting some away and savings. You need that rhythm in your life. And that will be for retirement investing. That will be for short term savings because you guys may want to upgrade things in the house in two years, right? And you'll just continue to take that, what would be, what, 60 grand in a savings account and just continue to up that, I mean, I would. And then increase your lifestyle a little bit. It's okay to spend some. It is okay to go out to eat at this point in your life, Isabella. So you're fine. You've earned it. And you guys are only 27. The amount of wealth you're going to build is astounding. So enjoy it. And then Isabella, I really would encourage you. You guys need to be giving. Have that. And a rhythm because as your income increases, you're going to see your spending will increase, your savings will increase. And if that giving element is not there in a rhythm, then life long term starts to become pretty dull and can become very self inward looking. And that's it. And that's a pretty empty life. And so that giving component is, I think it is, it's so big. Yeah. No, I definitely agree. So enjoy some of it, save some of it, give some of it. And I think you guys are going to, you guys are going to do great. Have you guys ever sat down and done a budget together? Well, we've kind of thrown it back and forth here and there, but we've never actually sat down, pen to paper. This is how much it goes here or type of thing. Okay, that'll make you feel better too. I think you don't even know how many thoughts and feelings you have around this. And once you put it into the budget, you're going to go, oh my gosh, I can't believe we've never done this before. I feel so much better. Just knowing where the dollars are going to go before the paycheck's hit. That's the key to preventing lifestyle creep is having a plan for that money before your emotions have a plan for the money, before companies have a plan for your money, before the Instagram ad has a plan for your money. Ouch. Sorry, that was personal. But you guys are doing great. If anything, it sounds like you need to let loose a little more. Yes. And I think your question is a good one just in the, in the, in the motivation of it, because for so many people that are listening, their money is such a question mark. I'm like, I don't know. I don't want, I'm fearful of this over here. I don't want to do this. I feel like that's too much. Is it okay to do this? It's all these questions. And honestly, Isabella, a detailed budget and working through it. It answers a lot of those for you where you feel, there's not questions because there's a plan. And so if you, if you hold in line, we'll give you every dollar. And we'll give you the premium version, even though you'll be fine. You can, I'm sure you can afford it, but I'm going to give it to you as a friend, because I do. I want you and your husband to sit down and do that budget because you will see in every dollar the first line item is giving the secondest savings and then all of your expenses underneath. And when you live your life in that order, especially at 27 on baby step seven, I mean, insane, insane. You're just putting good practices in place financially. You build these muscles now, nothing stop in you guys. We're so proud of you. Well done. What a good place to be. [Music] Hey guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. 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Chase is in Birmingham up next. Chase, what's going on? How are you doing? We're doing well. How can we help today? Thank you for taking my call. My wife is definitely not going to believe that I talked to you all today. Are you going to tell her? Is she going to find out? She is definitely going to find out. We've actually been going back and forth. She's like, "I'm going to call today." And she's just going to be so busy. No, but you beat her to it. Oh, see, Chase, here's what happens. The callers that call in, we tend to naturally side with them because they're the callers. We want to help them. So you've beat her to the punch so you're thinking there's a good chance you're going to win the arguments because you called in. But we're going to try to-- No. We're going to play fair. I don't think-- I think she's going to win the argument. And I feel like I kind of already know the answer. But you know, I just kind of-- I think it's just my flesh and kind of kind of ungreed that up in the woods. I wanted to call you now. Got biblical, real quick. All right. Get some knowledge at home, will you know? Because my wife's also and I want to respect her at least, you know, find her decisions as well. Okay, so lay out the argument. Okay, what's going on? All right. I will say, well, not really. Big argument. But anyway, so we've stopped greater to a bit or a bigger SUV because we just have to have a second child. Congratulations. She's going to be going-- Thank you. She's going to be going part-time. So of course, she's going to be having the little kiddos more often. So if I want to give her some space, more space. So anyway, I want to say we upgraded. We got a 2021 SUV for about $23,000, I believe. And kind of even going back before this. Our kind of arguments have been, hey, let's pay off this vehicle. Let's pay off this vehicle. And she's like, yes, and I might know. And that's kind of just being going back and forth. Thankfully, we did go ahead and pay off my truck. So we only have one car payment. And so kind of trying to decide what we want to do going forward given that she's going to be having a pay cut. And she is the one to swipe the debit card more often than me. It's a very nice way of putting it. And I know she's out on the show to defend herself. So that's all I'm going to say. Okay. She's probably the one buying one stuff for the house, too. We'll throw that out there. But so the only that you have is this $23,000 car SUV loan. Yeah, yeah, just alone. Okay. So what's the argument to how fast to pay it off? And we're to go ahead and pay it off. You have the money. Oh, okay. Yes, yes, yes. So yeah, how much do you have the? Well, the money. So currently, I don't we don't. And I kind of did this about four years ago. So I don't keep anything in our personal bank and savings. I kind of like all my money to grow for us. So I kind of, you know, I'll say Baker. I'm with the kind of like Edward Jones tight company. So everything is growing in the market. So currently that we have in savings is about a hundred and thirty thousand. Okay. And then additionally, we have two other. We got a two traditional two traditional counts of about twenty twenty five thousand dollars each. And of course, we have a couple of off the counts and everything told them right now to be about a hundred and nine. With mostly the hundred twenty five and savings. Okay. And you don't have anything in checking your savings except you're spending money for the month. So in savings just in our personal bank and I keep about about a five thousand dollar buffer. Okay. But if you had an emergency above that, you would have to sell off some of your stocks and mutual funds from Edward Jones to fund it. That's, that's, that's correct. Yes. Okay. Well, step one, I would encourage you to keep a full emergency fund outside of that in a high yield savings account. And the market could do better. But man, when you are, when you have an emergency, the market doesn't care about the timing. So if the market's down five percent and you have to withdraw that money, it's going to hurt. It's going to add insult to injury along with fees and taxes. So I would, I love that you want your money to grow, but I still would keep your emergency fund aside because it's not an investment. It is insurance against life. Sure. So once you do that, you have the money to pay the car, the car off and I would do it today. I don't know who's on one side. If your wife is saying, let's pay it off today and you're going, no, we got the money. What's the risk? It's a couple hundred bucks in a payment. We can stomach it. Is that your side? That's exactly my side. It comes out to about a three hundred and you know, seventy dollar a month payment. And would that be in our only, when we have a house payment and a medical payment? And that's the only debt that we have. How can your wife is going part time back to work? Is that because she wants to? So she's just a, and this is what I love about her. She's just such a, just a, a godly woman. And she wants to be there for her kids more than work and just mutual the kids at home or young. Well, here's my case, Chase. Would she want to be home full time? You know, and that, that is, that is a definitely going in mind. Definitely she would love to be home full time. Yes, I would agree with that. But you guys can't from a financial perspective though with it would be tight. I would say, I'm not going to say it'd be tight. It'd be, it'd be doable. But you know, like I just don't think, you know, I got a toddler as well. So we're kind of getting her to some extracurricular activities. You know, that's come up. You got a little bit of month, out day care payment. So, and then you get into the talk. So when she starts kindergarten, are we going to home school or private school? Sure. Yeah, you just want options. I get that. No, that's not, that's not bad. You can be a godly woman in a work part time too. So it's great. But she is a fantastic mother. So what I would do, honestly Chase, is for sure, I would be paying that I just paid this off. And I would move what George was saying some money, maybe three months. You may not need a ton, but I would up that $5,000. And have at least a three month emergency fund there. In case something happens, it's just, it's there. And you don't have to go through the hoops of taking out investments and selling and all of that. So that is, it's a clearest plan. And my question to you is, have you guys ever bought a car and cash? Or have you always taken out a loan and then eventually paid it off? Yes, no, it's always been a loan and just paid off, you know, as far as we can. It would be an interesting experiment. Because like you're saying, the 370, it's not going to, it's not going to kill you guys. But this is the part about money and debt specifically that you can't put into a calculator or an Excel sheet. Is the absolute freedom of just owning your stuff and not owing. And we actually have some great friends and they could easily afford the car payment. And they always kind of had, it's just kind of always what they've done. And then they paid off their cars and that he was laughing at me a little bit. 'Cause he knows what I do. I don't like, I don't like rub it in my friends' faces by any means. And he was like, man, I didn't really realize just how good that feels. Like not to, like it's our car, it's ours. And we're not attached to any loan department, any bank in it. And so there's an emotional piece to this chase that actually is going to free you guys up. And what that unleashes spiritually, I do wonder if it creates more. Creativity for you guys and your options in life. And does that free you all from a deeper level to be like, no, if she really desires to be home more, like do you figure out an easier way to get there, right? We're not just all math. There's something emotional about it. Yeah, you guys are speaking two different languages and you're missing each other because of that. You're a logic in math and she's emotion and freedom and risk and security. And because of that, I don't think you're going to find a compromise if you keep talking the way you guys are talking. Right. So here's what I did, because I've been in your shoes, Chase. My wife retired after nine years here at Ramsey. She now stays home with our kids. Come on, you say retired. She retired. I don't know. She's going to work again. My goal is that she never has to go to an office again. But Chase, part of that was we got the home paid off. And we didn't talk about, well, it's a three point. I could make more in the market if we put it there. We just went, we're going to have more options and more peace and more margin and more freedom if we just get rid of all of our debt. And that's what happened. And we just upgraded to the minivan life because we got two little ones. And it was some grieving on her part to get rid of that SUV. But I'll tell you, walking in there and just writing a check and just leaving with a 0% interest rate, $0 a month is the best feeling in the world. And I'll throw this out there, Chase, because you brought it up. So I'll go there. But when you look in Scripture, there is nothing positive about debt ever. And it's not a sin. It's not a salvation issue. There is nothing that points debt and wisdom in the same category. There's not. And so if you want to live a life with wisdom with your money and you want to follow, whether it's proverbs, the Old Testament, whatever, wherever you want to pull from, it says over and over that the borrowers slave to the lender and that there is wisdom and not owing people. But actually owning your own stuff. If you're serious about building a business, you need an easy way for customers to buy from you. Yeah, that sounds obvious. But a lot of business owners leave money on the table. Not because their product isn't good, but because the buying experience is broken or complicated. Shopify fixes that. With Shopify, you can build a professional storefront and get it in front of your customers fast. No coding, no technical headaches, and when your customers are ready to buy, Shopify's purple shop pay button is one of the best converting checkouts in the world, which means fewer abandoned carts and more sales. 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And if you file an extension, your tax situation is maybe a little more complicated or you feel overwhelmed. Get a prone your corner before October 15th. That way you're not battling the IRS on your own. You can make a game plan for your unique situation or business. And if you want to find CPAs and enrolled agents that have been vetted by our team, go to RamseySolutions.com/TaxPro. You can also get free checklists and guides that will help you file at RamseySolutions.com/TaxResources. And we will link all three of those down in the description of this episode. Tony is in West Palm Beach. Up next, Tony, welcome to the show. Good afternoon. How are you guys doing? We're doing well. How can we help? Um, so in February, I paid off my house. Awesome. And, um, as, as definitely you know, the big accomplishment and, but I just feel like, I thought it'd be more freedom than I have. How much can you pay off? And how quickly? I paid off, um, it was 110,000 in, about two and a half, three years. How close are the three years? Wow. Way to go. Good for you. Why do you do that? Um, actually, I listened to you guys about five years ago. I started listening to you guys. And, um, that was my start journey of like, I gotta get this together. And, um, I mean, I was, um, I bought my house back in, during the old nine. So my payment was never really that high. Um, and so I just kept, you know, once I heard you guys are putting more money toward it, I had a piece of property I bought when I was like 20 years old. And I used that also toward it to pay off my property. You sold that property? Yes, sold it. And, um, just try to pay off all the first, like you guys can say, pay off like the little bit, like the small spill and work your way. And once I got those first ones out of the way, I really started trying to put as much as I could toward the house. I was also with that property. I had found out using investment down the line, but I said, what's the best investment is my house? If I can have that paid off, you know, that's a big step. But, um, the house is paid off. And, um, I'm trying to invest. Um, I feel like I'm very, I'm 43 years old and I'm a little late. I have a pension at my job. But I'm kind of late. As far as like investing. You know, like a 457. I have an IRA outside of work. But I just feel like I'm down. When you hear people say, I have 300,000 and I have this much. I have like 60,000 in between all my accounts. So I get nervous thinking I'm 43, you know, we'll have enough time investing. I have $3 when I'm high school, when I'm middle school, when I'm elementary school. And it's like, um, you know, I haven't put any money really yet toward college. So I started getting like, you know, well, I'm worried about. So you're just overwhelmed in general, because you thought paying off the house would somehow solve all of the other problems. It would solve retirement. It would solve college funding. It would give you purpose. But all it did was it gave you freedom and peace and some extra margin. And so that's a step toward it. But it's not the whole picture. And so it's okay. What you're feeling is normal. And you're not behind. I know it feels like it, because there's someone else has more than you. But man, the good news is it's not a race where there's one million people running. It's just Tony's race. Gotcha. And there's going to be times where it's slow. And there's going to be times where it's fast. There's going to be seasons where it's crazy, because you're cash flow in college. And there's going to be seasons where you wish you had something to say for. Gotcha. Are you married? Yes. Okay. How much you guys make a year, Tony? Uh, 172,000. Okay. I mean, it sounds great. It should be able to, you know, put more money. I guess you'd be as, you know, just kind of stressed out about it. But it's still, you know, something like every, at least the house pair up that something always comes up. I'm trying to say, you know, you try to keep, I use a lot of my, saying personal savings also to pay the house off. So I was, I've been trying to, you know, how much do you have left in savings? About 12,000. So now I'm trying to, I'm trying to put, you know, were you investing, well, you have 60,000 invested, you said. So have you been investing in the, the last five years after you paid off your consumer debt, too? You've been putting money away. I was only putting like $200. I worked in like eight, I was putting about 800 a month. And then I went down because I said, my goal is I could see the light at the end of the tunnel here that I can get this house paid also. I stopped really putting too much. An investment investing inside the really pushed to get the house done. But then, you know, time, like they say time helps for investing. And I feel like I kind of cut myself short, but I guess I can try to make it up now. Well, you can. So at this point, now that you're on baby step seven, which is to build wealth and be generous. So if you invested, even if you went back to our 15%, which you can invest more, and say you have 60,000 saved now, say you put 2000 in a month, okay, which would be $24,000 a year. And you do that for 25 years, then that's going to be $4 million at retirement. With the paid off house, how much is the house worth today? About 700. Okay. Well, and in 25 years, you'll be gosh, close to probably have a $6 million net worth at that point. And that's less than 15% of your gross household income. Is the written numbers right? We'll just calculate it. And you only put in that. What would you do? 2,500 a month? Let's just have fun with this. Okay. It would be, let's see, 25, 8 divided by 12, 2150 would be exactly 15%. Oh, okay. I was close to orange. Yeah. I was just saying, I was saying right to being conservative. You're being a little conservative. Buy 100 dollars a month. Tony always being conservative. Let's do it. Okay. Hold on. Hold on. Let's just have it. Just for the fun of it. 2150. Okay. There we go. 4.2. All right. We're getting up there. I only put 2,500 right now. Yeah. You got it up that Tony. And you paid off your house, which is incredible. But that is one reason we talk about baby steps. 4, 5 and 6. We don't jump from paying off consumer debt straight to paying off the mortgage. Because you want to take care of retirement. And that's 15% of your income. So if you had been doing that over the last 15 years, or the last five years since listening, you would have more. Which is fine. I mean, you're growing to be okay. And kids college. We talk about that next. Like you need to be putting money away for kids college. And then throw us out the house. So if you had waited just in a different scenario, another four, five years to pay off the house. And instead did these other buckets. I do wonder if it would have felt less extreme. It would have probably felt a little bit more in rhythm with your life. Right. But it's not a bad thing, Tony. But I think I could see how you, if you go straight there, you pay everything off. And then you're like, oh my gosh, I have college and retirement. These two big buckets that are very legitimate. So that feeling you have is real. And I'm not negating that. But I also want to encourage you. Yes, if you fund. And again, baby step seven, you can invest more than 15% if you're income, right? So even if you went up to 20%. Yeah. Once the kids are all right. at a college and you've helped cover as much as you can from that, you'll be upping that to 30, 40% of your income. Yeah, you could put, you could throw so much in investment at that point. And then you have a paid off house too, Tony, at the end of this, right? Plus a pension. Plus social security. Yeah. And a lot of people going into retirement still have a mortgage. And that's a big thing that they try to take care of before retirement. And yeah, you're done with that at 43, which is pretty remarkable. Yeah. Just like you say, though, the stuff will just like if I would have done the other way around, it would have been a lot. At least those bases that cover up are still, I mean, some way, you know, yeah, but that's okay. It's okay. Yeah. Listen, you said 21 100 a month, 21 100 a month. Yes. To invest. Okay. And you can put that. That's a goal. Yeah. Roth IRAs. I don't know if Kim were who said he had 401k's work wise. But yeah, to find, to find some investments to put that in. And yeah, and you'll be great. You'll have. Just beating yourself up over what you could have done differently. You got the rest of your life ahead of you. The windshield is bigger than the rear view mirror for a reason. So you got this, Tony. Keep fighting the good fight. Let me tell you what I get asked all the time when should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people are surprised by how affordable term life really is. Even if you're not in perfect health, look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be. Not as standard insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates, and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote that's zander.com. If you're new to the Ramsey show, you here is talking about the baby steps quite a lot. And that's because they are the framework that we use to answer every single money question on this show and it works every time you work that plan. So if you want to learn more about the baby steps, you can learn more at the link in the description. We'll get you all the information you need to follow along. Isaac is in Montgomery, Alabama. Next, Isaac, welcome to the Ramsey show. >> Thank you, Rachel and Jordan for taking my call. >> Sure. >> How can I help? >> So I'll try to be concise and get to the point. So I'm recently married, I'm 27 years old, my wife is 26. I have a full-time job of career. I make take home about, say, 60 a year after taxes and all my benefits. She is still in graduate school but she's getting paid as a graduate assistant and then she has a second job that take home is about 3500. So combined, we're kind of in the eight range, I vary, do the overtime and minimum, I'm usually around mid fours but she's about to get a full-time job and at this point, I'm really excited about working in baby step two and killing all her student loan debt. We have about 100,000 just a little bit over combined. We have a little bit of credit card debt about I think 8,000 total and then 2,000 on the card that she drives. So we have a lot of kind of small student loans that I'm looking forward to getting paid off including the credit cards but I've had these conversations and I've kind of tried to show her a timeline and if we really work hard and use all this extra money that we're going to have after our expenses, that we can get rid of this debt within maybe three years is the time frame I'm looking at kind of generous and that we won't make as much as we think and we'll be spending more, just trying to be really give a lot. Is that about three grand a month toward the debt? Is that about three grand a month getting thrown toward the debt and the debt snowball? Yeah. To get it done for years. Okay. And having these conversations, there's just a bit of a split, a divide, she's very kind of concerned, she's not really been in this sort of situation before I managed, she finds it hard to believe that we're even going to be able to pay off the debt and I've tried to, you know, been like, hey, you know, we can do this, we're going to make the money for it. You know, I know we're not making the most but even with what we do and what we spend we'll be able to do it. It's going to take a little bit of time if we keep our noses down but we're, I'm trying to compromise, she wants to keep a credit card, we're going to get rid of about four credit cards and we're compromising on keeping one and then when it comes to the debt, we're compromising right now where we've talked about it where she wants to be putting about 10 or 15% of our surplus away towards either an increased emergency fund or like a house fund, something we're renting right now but we really do want to buy once we get rid of the student loans. And again, I've been like, hey, if we go hard at the student loans, we're going to make that up in the back end as long as we get one done than the next and then the next. It's going to be over probably $1,500 to $2,000 of extra money we'll have once we get rid of all that student loans. So Isaac, I'm curious from your perspective, why do you want to pay off debt? What goes on inside of you when you think about it that like what like name off a couple of emotions? Like is it like I don't want to put any words in your mouth but what does it feel like for you? It right now with it, it feels overbearing, you know, you've got this weight, I've got this weight on my shoulder and I see all this money every month going towards these steps and because of the minimum, I'm watching them. No, I hear you. I hear you. So you're going math again. Stay with me in the emotional room. That's your wife. I'm trying to get the women's perspective. Okay. So it feels overbearing. And what does that do to you throughout the day at night? How does that affect your life? It's just added stress as I can see the finish line and it makes me excited. I feel like when we get there, we'll be free and it'll be the freedom, the weight off our shoulders. I don't, again, we're recently married so we don't think it affects us too much. We have a good ability to talk to each other and right now it's just kind of, it's an added stress that I want to be able to get rid of that. And I can see the route and the path and that's like, that's my number one priority right now is let's follow the plan and make ourselves uncomfortable and really get rid of this so that we can be free and have a bit more, you know, air to breathe. Sure. No, I can't. Yeah. Totally. And I concur with what you're saying. I just think for her, probably she may feel a little overwhelmed because you're like, here's the, here's the timeline. This is what we're going to do. I see the finish line. Get on track. We're going to do this. Let's go. And she's like, whoa, whoa. I have other thoughts and other goals and other desires. Do you know what I mean to have an emergent like she has her own goals and the great thing is everything you've named off so far as a couple, all the goals are amazing. They're all great, right? Like you're, she's not saying, oh my gosh, I just want to go and spend a bunch and just go travel Europe for, you know, two months and do nothing and you know what I mean? Like she's not like a, a not realistic person. Like everything that she's wanting is realistic and so that's the great thing. And so the work is going to be for you guys to get aligned and I, I would want, I would want to make sure that she hears from you. I say, not just the numbers and the finish line and the charts and the calendarization of how you're going to do this in Excel, but she hears from her husband, who's from what I hear has a, has a weight on him that is so stressful. You feel a responsibility. I'm sure now that you're married and she's in grad school and you feel like you are the main source of income at this point and so much is on your shoulders. And when this debt is gone, there is that deep level of relief. But I want her to hear you explain it in a way that's more human than just like a human calculator. So I do wonder sitting down and having a heart to heart with her and you showing your, yeah, I mean, your push towards that, towards that, I think would be helpful. And then I'll throw out, this is probably a little bit more on the knowledge side, but again, her goals are within the baby steps. And we, this plan has been proven for over 30 years, the fastest way to build wealth and to have, you know, these massive goals achieved is in a very specific order. And that is from a mathematical, but also an emotional level. And so, so I would probably kind of push her on that in a sense that, you know, that this is, this isn't something that people just made up, right? It's been done for over three decades, and it is seen as the most efficient way to get to the goals she wants to get to as well. Yeah, I've got a couple of Ramsey company books. I've got the total money makeover that I've kind of encouraged her to read after I finish my reread of it. We use every dollar. I've gotten her on that tune I've showed her kind of how it works and how I like to use it. And we're, we've gotten a lot better at tracking our expenses and now that we're doing everything together, joint bank counts and all that, we've gotten better with making sure we know where our money's going. This is kind of that, that long term plan that. And I think you guys will get there too, guys. I would give you guys some grace. You're newly married. You've combined two adult lives. She's still in grad school. I mean, there's, yeah, I mean, so she's been hustling. You've been hustling. Now you're married and she's going, wait, I thought marriage was going to be like fun. And you're giving me like a running regimen for a marathon all of a sudden. So I think there needs to be some vision cast about, hey, where do you want to end up five years from now? Great. We both say we want to be dead free with savings in the bank and own a home. Great. Now it's just about what's the best path to get there that's surefire. And we know that's the Ramsey plan. So it might take, so you know, walking through financial peace university. Okay, Friday nights, we're going to watch a new lesson and we're going to talk about it. We're going to do our budget and check in. It's also dream. No romantic George. It's popcorn. Get some cake out. What an exciting Friday night. She really is going to be like, is this marriage to I don't care what's happening with the housewives. I just don't care. Oh my gosh. Here's something that keeps a lot of parents up at night. Kids are growing up with more access to information than ever before in history. But most of the content is calculated to keep them distracted, make them mad, and keep them scrolling, not help them think for themselves. Worldwatch exists to be the antidote to the algorithms. Worldwatch is a video news service built specifically for preteens and teens. They're daily 10 minute videos that explain what's happening in the world through a factual Christian worldview. No outrage, no noise, just clear reporting you can watch together and that your kids can actually understand so they can come to the dinner table engaged and curious instead of worked up or zoned out. And I love that Worldwatch doesn't talk at kids. It gives family something to talk about. Because when my kids are older, I want them to be able to think for themselves and separate news from noise. And right now you can try Worldwatch free for 30 days. Click the link in the description or go to worldwatch.News slash Ramsey and use promo code Ramsey to get started. The Ramsey offer includes your first full month free on top of the standard 7-8 trial. That's worldwatch.News slash Ramsey. Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm George Campbell. Here with Rachel Cruz taking your calls to triplate 825-5225. Lynn is in Peoria, Illinois. What's going on, Lynn? Well, my question is should I pay off my daughter's house? Wow. Well, that's exciting. Yeah. What brought this about? Well, I moved in with my daughter and she's a disabled veteran, so her income is full VA disability and full post-security disability, which comes to about time around 70,000. Okay. And I'm on post-security and a pension and mine comes about 30,000. She owes 104,000 on her house. And I have 100,500 in a 3% savings account. Not sure what to do with it. And I thought it would save a lot of money to pay off her house. And she would be paying me at least 2000 a month. And it would be, I'd have recovered my basic money within four years. So this is like a loan, because zero percent loan is really what you're talking about? Well, she's willing to pay interest, too. We both live easily within our budgets. I have almost no bills. So that's the case. Why doesn't she just pay her own mortgage or put extra onto it and pay it off in four or five years? Well, she has been putting some extra towards it, but I just thought that without putting extra towards it, it's going to, you know, more than double the cost by in interest. And why should the bank get it? Why shouldn't I get it? Oh, so you want to become the bank? Right. Is this all the retirement money you have? This 100k? Yes. Well, that scares me, too. What if you need it? And it's locked up and she's only paying you two grand a month and all the sudden. Well, I'm tried to think of, you know, what's the worst that can happen and what would I need it for? I mean, I have a supplementary Medicare, and I'm very healthy. In fact, I was just at the doctor. Everything is great. And I would not do this. I would not do this. No. No, for multiple reasons, the highest being you, you being your daughter's bank from a mathematical perspective, I can see how you can sort of make it work. But relationally, that's going to be a disaster. Well, we've had some experience with that because when she wasn't on this building, she at that time lived with my house, we just worked things out fine. And I helped her get her act together. And yeah, you just you just changed the relationship from mom to daughter to now lender and borrower. And and there's no way around it. I mean, can this come out totally fine? I mean, sure, but I don't think we would have jobs if that was the case. Like there's there's a disaster that happens that's looming there. And so keeping things separate where financially she is doing what she's doing. You're doing what you're doing and what scares me, Lynn is you have a hundred thousand dollars to your name, which is amazing. So well done. I mean, that's a great savings. But, but what are you going to do for a house? Right? You're going to pay off a home that's in her name. You have nothing else to your name. And what what if you want to move out? What if she wants you to move out in a year and a half or two years? You know, what what does life look like? It just starts to really limit options. And it puts a strain on a relationship because there's not much safe guarding you in that. Now, if you had a million dollars and you're like, Listen, I'm going to write a hundred, you know, in four thousand dollar check and just pay off my daughter's, you know, mortgage. She's disabled veteran. I mean, I would be like all day. Yes. What a what a blessing. What a blessing. But it's not a blessing when you become the bank. Well, I guess I just think that we're in an, you know, an unusual situation because I'm close with all my kids. My other kids think it might be a good idea. We want to keep it close. That's the issue. And if she has to evict her lender, that's about as awkward as it gets. Yeah, I guess because we have some history in, in having mingled finances, I just think it'll go okay. Okay. Well, I don't know. I don't think we can convince you otherwise. So I'll tell you, I would not do this my own mother. But that's what you're basing it on. It's just the, um, what there's a relational aspect of financial aspect and decades of, you know, here decades of hearing personal experiences from people. And Lynn, I'm going to say when you, when you owe family money, regardless of how you slice it, it changes the relationship. It just, it becomes odd when you, when you mingle finances and family. And again, if it is a gift and there's no strings attached, that's one thing. But when you start to wait for a payment from your daughter and, you know, things that can go sideways and you're going to spend all of your, I wouldn't even do this for, for you Lynn. I mean, I don't think it's smart. This is all the money to your name. Yeah, I don't think it's smart. In your financial situation, let alone adding in the idea of mingling debt and all of that with your daughter. I think that she can, um, I think if you have a, if you're set up well in life and you want to help her and you want to write a $30,000 check to help get the mortgage down for your daughter, that's a beautiful thing because currently you're not paying any rent. No, no, she pays all the bills. And is there ever been any talk of? Because you said the finances have been mingled. Are you paying for anything as part of this arrangement? I just pay for my supplementary Medicare and that's it. But no utility. Do you care for her from like a physical standpoint, her with her with her disability or or is she able to like are you are you a caretaker from like a physical sense for her? I don't know the extent of her. Yeah, just disability, somewhat. We just help each other out. Okay. I mean, I, my life has been intermingled with all of my children forever. I think that's great. My kids. If it's working for you, then just keep doing it. But I would not make it worse by becoming the lender. I think Lynn's gonna do it. Which is great. And I'm glad you called in. I really pray it all works out. I pray in four years, you recoup your money. Nothing else happens that you stay healthy and everything goes according to plan. I really do. I pray that that is the case because that's what she's gonna do. So we, I all good prayers and vibes and all the things that people send to me this way. I'm picturing Lynn's daughter calls in a year from now and says, Hey, so what can happen? I'm getting married and my mom was my lender. But she's also my tenant and I have to kick her out. Gary, my fiance. And she has no money because she gave it all to me to pay off the mortgage, but I owe her. So now she's demanding a lump sum in order for me to move out. And I don't have that. But it's in my name and Gary, the fiance. What's he gonna do? You know, I would much rather a hard conversation with Lynn now than the harder conversation with the daughter later. It is what it is. I'm pretty sure Lynn has made up her mind and she may have great relationship. It may be, I don't know. I don't know, George, you went some you lose some on the show. I love my mom so much that I would not take a dollar from her in debt. No. That's how much I love her because I want her to come over and make me grape leaves in Baklava and not say where's my money? Where's my money? It's not gonna be a fun conversation. [Music] If you're shopping online and these days, everybody does. Data brokers are out there right now buying and selling your personal information. Your phone number, your home address, your email, without your knowledge or consent. And that puts you at risk for spam calls, scam texts and fraud. Combined with AI, those scams are getting more sophisticated every day. And trying to get it under control yourself is basically impossible unless you have delete me. 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I am on disability and I make about $1,300 a month off of that and working with to help supplement that. Recently my daughter had some issues with mental health right now. Looking at roughly $400,000 in debt from mental health stays in different facilities and things like that and I'm just trying to figure out if I need a file bankruptcy or try to pay it off a little by a little. She's 14 so there's still another 40 years of hospital stays and other things coming our way and it's just going to be more and more and more. Wow. Gosh Jonathan, I'm so sorry. Oh, it's so hard. Are you married? I am not. I've got a fiance. She's been taking the last 10 months to take care of me for the hip. I've had some setbacks with it and probably going to have to have another surgery with it. Wow. So total income right now is 1,500? For me, for her, it's a little bit more. She's about two grand a month and that's her working part time. Yes. Okay. So total 3,500 and what are your bills every month right now, including your minimum debt payments? Right now, bills are together, rent, vehicles, all of that. It's about the $3,500. I've got nothing left in the tank. So just barely breaking even every month. Yeah. What other debt do you have outside of the $400,000? I've got about 50,000 or so in credit card from trying to keep both heads afloat from not bringing any income in. Cars are broken down. Things have broken in the house that just need to fix. Do you have car loans as well? About $10,000. Okay. So you got 60 between the credit cards and the car loans plus the $400. Yeah. Yeah. And nothing with her hospital stays. Insurance doesn't step in at any point in what you guys have done. No, unfortunately, because it's mental health. They didn't even really want to give her her diagnosis, but they finally did. That's one of those things are because all together, I've got four children. She can't even come over to my house right now because it's left with other three kids being there. And where is that she poses? Wow. Where is she? In almost two years. Does she, does she stay with her mom or is she in a facility during that time when she was in a facility? I'm just got kicked out of it. She was supposed to be there for about four months. She was there for a little over two weeks. Wow. So is she with her mom right now or is she staying with you? Yes, she actually just got home. So what are the doctors saying at this point is the best path? Basically, they just keep trying to get her into facilities and things like that. This last one was $60,000 for the two weeks day. And with her. Yeah. And with our custody agreement, I owe about 70% of anything that she incurs over $400. Wow. Well, is she on medications right now? Are things under control in any way or is it still just in flux? It's still just in flux. The medications seem to help with the things go downhill or try to out different things. And that's just been a whole series of events. Well, that I'm trying what I'm trying to do is get a handle on what the future looks like for medical bills because if we can sort of know what's coming down the pike, it helps to manage. But if it's just this unlimited black hole that we're going to just spend hundreds of thousands of dollars, it's going to be hard to climb out. Is this straight up medical debt? Yeah. Who's the debt through? It's from all the different hospitals that she's had stayed that she's had seven stays in the last eight months. Okay. Have you been up to date on the payments for these or collectors coming after you? Collectors are coming after because I just don't have anything left in the tank. Well, I'm just I can't imagine what you guys are walking through. That's so difficult and so heartbreaking to see your child suffer in that kind of way. But I'm just thinking moving forward, Jonathan, there's a couple of things that could be possibilities. Medical debt is one that can be very much negotiated. And so what that looks like going forward, probably not anytime soon, but if there was a way somehow of of working on the side, working from home, having any any amount of money that you can present to them once it's in collections that they may know like they're not going to get anything from you. You don't have anything, right? But if you have a little bit of something, it might be kind of a carrot to dangle. Now, $400,000 that that's kind of, you know, that's obviously up there. So that that's one route that I'm thinking. of. Also, when you guys are choosing, and I want to be careful even asking this because I don't want to come off offensive by any means, but when you're choosing these facilities, are you in such an urgent mode that you're like, sure, this one, just put her in and we need to make sure she's safe? Or have you, have you guys done you and her mom, done levels of research and talk to practitioners and talk to places of different options, right? And I know we want the best care for our kids, but when I hear $60,000 for two weeks, I'm like, oh, man, I wonder what other options are out there? Do you, do you, like, you have the bandwidth to do that research and have kind of that, those facts on your side? Um, yes, we've, her mom is actually in the medical field and we've done lots and lots of research and facilities and things like that. Um, or any of them nonprofits? Uh, no, because there's nothing near us that unfortunately will be a nonprofit. Uh, this one we actually had a center to Wisconsin for, uh, because unfortunately, well, she was on her psychiatrist office. She 23 extra strength, the Benadrill. Oh, my goodness. Wow. Well, I would be looking into, and it sounds like you've been doing this is the homework of looking into every financial assistance program available through these providers because with your income, my guess is they're going to go, all right, he can't pay the income is not going to be there to pay or it goes to collections and you end up settling for 10 to 30% of the total balance, which means you're not on the hook for 400 grand now. You're on the hook for 40 to 60. You see what I'm saying? Yeah. So that is a sort of best case scenario. We can hope for that. Yeah. And I wonder for you long term, Jonathan, $1,500 a month, cause how old are you? Um, 33. I, okay. I'm not in the disease. That's why I'm on disability. Okay. Well, I'm just wondering for the sustainability of your life, um, and obviously everything with your daughters, like a whole other level, but I'm just talking about just you and your fiance to sustain somewhat of, um, a manageable life, your income, it's going to have to come up. And I don't know if that's you and your fiance getting married and she works full time and, and she's the main breadwinner because of what you, you know, what you're dealing with personally. Or if there's things that, you know, um, even call centers, I'm like, I, if there's anything making 22 an hour, you know, and work in 30 hours a week to bring in something just to sustain your life, right? And then beyond that, obviously caring for your daughter, but, um, but I would be looking at some, some options in that scenario, just from a career standpoint, um, because you are still so young, you're 33. And I would want, um, you, you not to, to struggle and write inch by inch for the rest of your life, either. And so, because even if they are willing to settle with collections for 10% of the balance, you still need to come up with $40,000. Yeah. And that's going to take really upping the income. That's, that's the key variable here that we can control because there's so much out of your control. But, man, I, I hate that you're going through this, this sounds like it's not going to be an easy fight, but we are rooting for you, man. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business. We wasted too much time chasing information instead of making decisions. That's why we got Netsweet. Netsweet brings your financials, inventory, CRM and more together in one place, more than 44,000 businesses run on Netsweet, including Ramsey. And now they're taking the next step with Netsweet next, making it easier to put AI to work across your entire business. Netsweet next helps you make the most of your time, automating routine work like forecasting demand and following up on overdue accounts. With Netsweet next, AI is built into everything you do, so you can ask it questions just like when you're talking to a member of your team. And right now, you can try Netsweet next for free. If your revenue is at least seven figures, go to Netsweet.ai/ramsey. That's Netsweet.ai/ramsey. Zaden is in Salt Lake City up next. What's going on, Zaden? Hi, guys. I am calling today. I guess, basically, could call you and ask you to talk to me out of taking out student loans. Okay, let's see how good our persuasive sales pitch is here. We've been 50/50 so far on the show today, I think so. We can't always bat a thousand. We'll see what we can do. So what happened that you ran out of money here? I worked a summer job that I thought was going to cover my tuition and everything I needed this year as well, as long as I took a part-time job to start the fall. And so far, I just started my junior year. I'm 20 years old. And I cashflow college all the way up to now. The only thing I have is on a car. I own about 11,000 on the car. And I'm under water, so it's not helpful. But this morning, I just, I've run out of money and I've been struggling to find a part-time job since I got back from my summer job. I haven't found, the only job I found in working five hours a week as an assistant for a travel agency. And so I'm just not making enough to cover my expenses. I've been in interviews where the only thing that's helped people back, they've like handed me the compensation package. They're about to hire me. And then I told my school schedule, and I like, we just can't work around that. And so I'm like at the point where I don't have enough money to cover what I need. And I'm like, didn't wonder about the only thing I can see. Are you living on campus? I live with my parents. Okay. Is there any financial help from them? No, they, they make a lot of money, like almost 300,000 a year, but they have probably close to half a million dollars and consumer debt. And they can't afford anything. So, oh, wow. So how much is tuition a year or per semester, I should ask? Per semester. So I'm on a half tuition scholarship. My tuition for this semester was about 2000. Books was about another 200. So, 2000 bucks. Okay. So that's the gap. It's two grand. I already paid the tuition for this semester. I don't have money for like to pay my car payment, to pay my insurance. Yeah. How much is all that per month? How much would you need per month to to get by? Like as a college student, to scrape by a thousand bucks, a thousand dollars. Okay. Man, I'm like, I feel like somewhere you can make 300 bucks a week, you know? That's the ticket. Can you look in the side? Wait tables. I've applied for server jobs and not even gotten like, and I try calling them and they've been like, they just, they have an open application, but then I'm a little shocked because I, I know the service, yeah, the service industry though is strong, like they're looking for people. So have you walked in? Remember how the experience before I took off my summer job, I was working in the restaurant to the cook and I went to the manager for a minute and I just can't find anything. Yeah. Have you gone in person? To these places or just applied online? I can talk to them. And how many of you tried? John in person. About five different restaurants, but I've gone to my family when we've gone, but I, okay, I would, I would hustle a little bit. And I wonder too. I mean, Salt Lake is there, I mean, I'm thinking of, is there, a landscaping company you can pick up part time on the weekends? Is there, I don't know, I mean, it's just things in your neighborhood. If you live with your parents, man, there's people in my neighborhood making money because, you know, risk people are scared of these days. I think 300 bucks a week, I think you can do this. Do Instacart. I think I'm 20 years old and Instacart, like, well, one, I actually live just north of Salt Lake in an area where it's, there's too many drivers and I've tried Instacart door dash. They won't, they're waitlist of a year out. Right, Charles, not buying it. Really? I'm going to encourage you to look at other side hustles too. It doesn't have to be one of the app side hustles or you need the car and all that. But right now, I think the gap is so little. So like city airport and do Uber. I'm like, that, that place is packed all the time. I don't know. I'm trying to think if I drove it. I think I, maybe that was a new thing because when I drove Uber, I don't think I was 25 yet. But all that to say, well, there's, I think we're trying to help you. And I don't think, and I'm, and I'm hitting up five restaurants - No, you will be 18. - Oh, to ride alone, everyone, that says a rider. - Rachel's like, I'm gonna find the fine print on this one. - I am. - I am. - Okay, you got me 21. How old are you, 20? - 20. - Winter birthday, winter birthday. - Next July, we got some time. - Okay, I just feel like there's a rich person that needs their trees trimmed or something and then snow and salt lake and shovel sidewalks. I don't know, I just feel like. - Just use AI and make a little flyer and say, here's my services. - For $300 a week, I think you can do, I just believe in you. - What are you studying in school? - I'm in software engineering. - Okay, so you're a techie guy. - All right, tech talk to him about tech stuff. - Well, I'm just wondering if stuff you can even do online for people, if you're in software engineering. - Coding? - 'Cause nobody cares if you're 20 or 30, doing that kind of stuff. - Yeah, I don't think I've thought about it. I've struggled to find a market for it. Like, I've been reaching, I posted something on my Instagram a couple of weeks ago to see if people were interested in building a website for them or something. - How many followers do you have on Instagram? - A thousand. - Okay, so probably went to four people. I think we need to do a little more active, proactive marketing. You need to find the problems and go, hey, I can solve this for you, here's what I charge. - 'Cause, hey, and I'll say this, if you call and you're like, I need $15,000 for this semester's tuition, I'd be like, okay, we've got an uphill battle here. $2,000, I don't know. Or $1,000 a month is what you said you need. I don't know, I feel like you can figure this out. 'Cause would you take out student loans for your lifestyle? Would you use it for your car payment and everything? - I would mostly be using it to cover gas and stuff. 'Cause I'm at commuter school, it's, I'd tell you about 200 to 300 a month in gas. - Okay, so that's the end of the day. - Is there any jobs on campus you can do? 'Cause I did that on, when I was in college, and maybe, you know. - But I helped with the tuition too. - $12 an hour in the publicity office, writing up press releases or whatever. Is there any jobs on campus you can find? - I tried that too. It's crazy. I applied like two weeks before school started, right? I applied to every open job posting and we even called a couple of the offices that are full of the four schools. - I sport you played in high school. - I ran cross country. - Okay, I'm wondering if, 'cause I know in our area, people pay for college students to help train their little nine-year-olds and they pay 60 bucks an hour for baseball or something, right? I'm like, I'm like, I don't know. I'm not a cross-country runner. Can you teach a kid how to breathe properly enough? Right, the correct form when they're running? I don't know, I don't know. I don't know. Maybe someone insult like. I'll try to say is, the world is your oyster and you haven't explored enough. That's it. But you can close the gap without student loans. If you think student loans are going to be the answer, you're gonna take it every time. But if you said no student loan debt, I gotta get a $300 this week, what am I gonna do? And you just go try 17 things. And at 20, you have the benefit of being able to do that. It's such a luxury to be able to live with your parents. - You don't have a wife and a mom and kids and you're living at home. That's right, no rent. - There you go. - It's the time. This is the time. - I bet that car payment is putting a dent in his ability to save. - I bet you're right. - At the time, he was like, well, it's a small car payment. I need a car. You gotta get a car. - Not a big deal. Now it's that $300 a week. That's really chipping away. - Man, well we do have a side hustle quiz that I encourage you to check out. You can go to RamseySolutions.com/side hustle or use the link in the description. That's for anybody out there. And it'll help you figure out which ones make sense for you based on how much time you have, what kind of skills you have. - At home jobs versus in person jobs. - And I think more than ever, there's the quirkiest jobs people find side hustles. People that I've called and I wouldn't recommend this 'cause I don't know that much about it. But the baseball, we're the guy that called in and they have like $40,000 worth of baseball cards 'cause it's like a hobby and he knows how to collect, I don't know, and I'm like-- - I got nine year olds in my neighborhood that pick up dog poop. 20 bucks a visit. - 20 dollars a visit. - That's what I'm telling you. - They're booked dead. - And I know something like there's some nice areas. Some big houses, there's some wealthy people in that area. - Dress nice and go to the door and say, hey, I live down the street, here's my skill set. If you guys need any help, let me know. - Press your watch to drive away, you know? I don't know. I think you can do it though, I really believe in you. (upbeat music) (upbeat music) - Okay George, we hear from so many people that are trying to live out to the Ramsey plan, right? They're getting out of debt and everything. But the hard thing is, there's not many banks out there that actually support the way we teach people to handle money. - Yeah, most banks, they don't want you to win with money. So they charge a bunch of nuisance fees, there's all this fine print, and worst of all, they are pushing debt products at you, nonstop. - Yes, but the good thing is, is that fair winds isn't like most banks. - They're not like the other guys. Yeah, they are not pushing debt. And they actually want you to win with the baby steps. And so what's great too is they created the smart bundle for Ramsey fans, which includes a high yield savings account and no monthly fee checking. - Which is huge because it's rare to have a checking account tied to a high yield savings account. You can get all of that with fair winds. And for the nerds out there, you can have a 10 different high yield savings accounts for different goals. So you got your emergency fund, the car upgrade fund, the vacation fund, the world is your oyster. - So beautiful. And check out the debit card, the new one. The live like no one else debit card. - Oh, that's beautiful. - It's so beautiful, we love it. - That's a conversation starter. - It's so good, well, and when you swipe or you tap, you know, every time you take it out of your wallet, you're remembering that you are living like no one else and you're being intentional with your money. - I've been using fair winds for months and months now. I love their features, the app, the customer service. It is all so good and so aligned with the Ramsey principles. - Absolutely, so y'all, we both bank at fair winds and we love their commitment to Ramsey values. - So check it out, you can get that smart bundle. We're gonna drop a link in the description or you can go to fairwinds.org/ramsey today. - That's right, that's fairwinds.org/ramsey insured by the NCUA. (upbeat music) (upbeat music) - All right, Rachel, you know what time it is? It's question of the daytime. - Oh, yes. - Brought to you by YRIFI. Sometimes the hardest financial step is the one you've been avoiding. So if your private student loans are passed due, YRIFI can help you explore low fix rate refinancing options and payment plans tailored to your circumstances. Go to YRIFI.com/ramsey. - May not be available in all states. - Today's question is from Adam and Vermont. I've been working on the debt snowball and recently started a new job making $160,000 a year. I have $110,000 in student loans. 47 in IRS debt and 36,000 in credit cards. I have been paying about 3,200 per month towards my debt using the debt snowball methods. Small and slow are just at this pace. I won't be debt free until 2033, which feels very far away. Is there a way to do this faster? - Wow. - Well, you got a new job making $160,000. I mean, call me crazy, George. - I will. - Quick math, but I'm like, if, well, Vermont, I'm trying to figure out where he lives. I'm like, could just swing, make it, you know, acting like you make $60,000, throw 100 at this, I mean, I know it's after taxes and everything, but throw 100 at the student loan debt. You got 47, 36. I mean, man, two years, possibly, right? If you live on 60. - Yeah, there's, it's a margin problem. - It's a margin problem. - Two and a half years. - Yes, you are not throwing enough at the debt. You have a great income, making $160. - We said he recently started it, so I'm going to assume. - So let's reassess our debts snowball. - Yes, exactly. - And go, can we throw $5,000 a month? If we're bringing home 10, we live off five and send five to the debts. It's going to be done a lot faster. So that's the math here is just figuring out how much margin I can free up from cutting expenses down, increasing income that might mean you're working overtime or side houses on top of your 160 to clean this up in a reasonable amount of time. Because 2033, I mean, I don't know if the world's going to still be rotating on its axis by then. So let's get a game plan. - Who knows? - That means short-term sacrifice versus the next seven years of our life. - Yeah, but I think two and a half years, I bet he could do this by 2030. - That's less than four years. - Three? I like this plan. I mean, five grand a month, he's done in just over three years. - Yeah. - So that's what I would be aiming for is no more than three years. - And then that means that he's never gone, you know, that he doesn't get a raise in three years as you probably will, right? And you throw all the extra at it, so maybe even faster than that, so. - Yeah, and the best way to do this, the every dollar budgeting app is now far more than just budgeting will actually help you devise a plan to find more margin with personalized recommendations for your situation. So I wish you are on the line out of my give it to you, but since you're not, reach out if we can get access to your information, we'll send you one. But for everyone else, if you're like, I want margin, how do I get that? Every dollar will help you find it so that you can make more progress in your goals and work the plan even faster. We'll drop a link in the description as well. Judy is in South Bend, Indiana, up next. What's going on, Judy? >> Hi, guys, I wrote out what, you know, like a sentence, so it's a, I'm saying, I haven't been and I have been married for 50 years. >> For 50 years? >> Congratulations, Judy. >> Wow. >> Consecretively? >> Yeah. >> Yeah. >> That's impressive. >> Together? >> You got asked. >> Two each other. >> It's a long time. >> I've been in a mirror for 50 years. >> That's good. Okay. >> That's better than 50 years old yet. >> No. >> No, we're not. >> We're retired. >> Okay. >> We have no debt or financially secure. We don't need to leave it to our kids. They're doing quite well. I enjoy going to the casino with my best friend and a few times a month and my husband does not like it and we argue about it all the time. I just wanted to know what you had to say about that. >> Okay. What does financially secure mean? How much money do you guys have? >> What's your net worth? >> Probably 9 million. >> Wow. Fantastic job. >> And you're not going to leave any to your kids? >> Wow, we will, but- >> Okay. >> We're saying like that. >> Making. >> Yeah. They're doing well, which is amazing. >> Making. >> Yeah. >> Okay. >> What is your yearly income? Like, what do you guys live off of? >> About 120. >> Oh, wow. >> Judy, what's your friend's name that you like to go to the casino with? Will you drop her name or is that too personal? >> I'm Mary. >> Mary. Judy and Mary. All right. >> Love it. >> What's the- what's the game of choice at the casino for you? >> We play slides and we know that that's, you know. >> No, I'm not. >> No judgment here. >> But- >> No judgment here. >> Okay. How much do you spend in a given outing at the casino? >> About 200 bucks. >> And you do that how many times a month? >> A couple times. >> Like three. >> Like three? >> Five? >> Three. >> Three. >> Do you ever spend more than $600 in a given month at the casino? >> Yeah. >> Okay. What is the most you've spent at the casino? >> Probably a thousand. >> Okay. Was that discussed prior to going to the casino? >> No. >> I think this is the crux of the argument. It's not that you're going to the casino. It's that he doesn't know if you're going to go spend 200 or a thousand. >> It doesn't matter. >> Even if you have them. >> I have $9 million. >> But it's the- there's zero communication. >> About this. It's not in any budget. It's just you willy-nilly going spending as much as you feel like. What you can. >> Which is- >> But she's not spending like- I mean, I- I hear you, George. I hear you. But also- >> It's not about the dollar amounts. >> But ratios. >> But ratios. >> Yes. You guys are spending so little that your money- you're going to have $20 million sitting there. And he's going to go, I guess that casino money wasn't really that big of a deal. >> I don't think for him it's a- I think he just thinks it's stupid. Is that what he thinks? It's a waste? >> Yeah. >> You're throwing money down the floor. >> That's- that's a- >> Does he have any hobbies? >> Yeah. >> What does he do? >> Yeah. >> That you think is stupid. >> Is he a golfer? >> Yeah. No. He fishes. I don't think he does anything stupid. And if he did, I wouldn't care if he did it as long as it was, you know, safe and legal- >> Sure, sure. >> All those things. >> What's he- is he actually getting the fish? Is he bringing it home and cooking it or is he just- >> Yeah. >> Catching it. >> No. No. He- he brings out the walleye. >> Wonderful. >> Yeah. I'm perfectly fine with you and Mary going to the casino and spending a couple hundred bucks a month. Totally fine. >> Well, I said- >> So- >> When I said nine, I met like all our assets and everything. >> Well, sure. >> Yeah. >> Yeah. >> Yeah, that's fair. >> Yeah. >> You're real estate cash investments all the- >> I mean, how much cash do you guys have? >> Sure. >> I mean, yeah. To- to live off of cash-wise investment-wise, what would that be? That does not include real estate. >> Um, probably- >> Three. >> Okay. Yeah. >> I mean- >> This is where the- >> This is where the Ramsey personalities differ on the subject, which is fine, and Dave's out of town. >> So Rachel is going to speak about- >> So Rachel is going to speak about- >> Rachel is going to speak about- >> I would say- if you're having an experience and you're spending money- and again, it is reasonable- there's no- like- addiction that you're trying to like satisfy- right, like- there's nothing big happening, it's not big numbers, and you're having fun with it. I mean, that could be, you know, going to the mall and buying a couple shirts for 200 bucks, right? And instead of that, she's- she's going to go and play some slots. Listen, I- >> Rachel is going to play some slots. Listen, I- >> Now, that doesn't matter, that you didn't call to get my permission, but for you and your husbands, where you guys have to come to is- >> Yeah, I think you guys need to- to make a budget, honestly, and say, "Hey, for once a month, here's an amount of money that's going to be my fun money, that I'm going to enjoy." And again, you could use that money and go get your nails done, or go get a massage, or whatever. >> And you'll probably think that's stupid, too. >> Yeah, and he could, totally. >> Actually, I think it's stupid, because we've never been on a budget, and he's always wanted to be, and I poo poo it. >> Oh, Judy, Judy, all right, here's your end- here's your end with him. Say you'll do a budget, and you guys- and you have to agree, you get a vote in the budget, too. It's not just him making it and telling you what to do. You get a vote in a say, and hey, here's the amount of money per month that we spend, and here's where it's going to go. And Judy needs a line item. Mary and I's day away, right, or whatever it's going to be. That's the line item. And then he gets a line item for some of his fun money, and yeah, call it a day. So maybe that's your end with him, is that now you'll do a budget. >> How nice is his fishing boat? >> He actually goes with his brother, and he's got three of them. >> Oh, nice. >> That's intense. >> All right. >> Yeah. >> That's a lot of money. That's going down in value. >> But here's the key is, you guys financially could spend double what you're doing right now per year, and still never run out of money, and likely never touch the principal. >> That's right, absolutely. >> So this is not mathematical or financial. It's all emotional, and you guys need to get to the root of why he's frustrated with this, and come up with a compromise, and the budget is going to help. >> Hey guys, George Campbell here. There are a lot of things you probably shouldn't ignore. Your check engine light, that weird smell in your fridge, the smoke detector that's been beeping for six days, and maybe most importantly, your phone bill. The things we ignore have a funny way of costing us the most. And your phone carrier is counting on you, ignoring that overpriced bill month after month, so they can keep charging you more and more. But that's not the case with Boost Mobile. You don't need to keep overpaying when you can pay just 25 bucks a month for Boost Mobile's unlimited plan. And the best part is, you can bring your phone, keep your number, and pay just 25 bucks a month forever. That price will not go up. It is inflation proof. There's no contracts, there's no hidden fees, there's no catch. And since most smartphones have an e-sim these days, you can switch from the comfort of your home just like I did. So it's okay to notice when you're paying more than you should, but you shouldn't keep doing that. Stop overpaying for your phone service, go to boostmobile.com/ramzie and make the switch today. That's boostmobile.com/ramzie. $25 forever requires customers to remain active on Boost Mobile Unlimited Plan. Welcome back to the Ramzie Show and the Fairwinds Credit Union Studio. I'm George Campbell, here with Rachel Cruz, taking your calls at AAA8255225. Lisa is in Raleigh, North Carolina, up next. Lisa, how can we help today? Hi, I just wanted to see if I get some advice or some information. We were thinking about paying off my parents home and they are going to beat us to home right afterward. And there's going to be what your thoughts are on that and the tax implications. What's causing them to ask you to pay off their home? Oh, I don't think they're asking. We're just looking at pretty much looking at their state, how to finalize some of their states and that we just, they were going to, they didn't want to do a wheel and all of that. So we just thought, you know, free and clear, we'll just pay it off and you just beat it to us and we wouldn't have to worry about anything when they pass. Why didn't they want to do a wheel? I mean, we just found it the easiest way because you know, we're pretty financially stable. They beat quickest and easiest way to do it, you know, and then it's done. We don't have to worry about it after they pass. It's in our name already. I imagine they have other assets in their estate outside of this house, right? There's other accounts. Just bank accounts and we're not too concerned about that. They can, you know, do what they will with that. I think it's just a little bit easier with the home to go ahead and get it in our name that way, you know, when they pass, we don't have to go through. Well, I think if it occurs in courts, yeah. I want to say though, from a capital gains standpoint. Yeah, here's the big issue. You don't get to step up basis, right? Yeah, if they deed it to you while they're alive, it's one of the worst things you can do financially because it's considered a gift to not inheritance. And so the original cost basis would carry over. So if they pay $100,000 for this house and it's now worth $500,000, when you go to sell that house, you're going to owe on the difference. You got to pay taxes on 400. But if they just pass away, you inherit the house, then you get a step up in basis, meaning it's fair market value at the time of their death. starts at 500,000. So if it goes up 100,000 over five years or whatever, right? Then you sell it, you only have to pay taxes on that 100,000. - So basically, you could sell it without any taxes if you inherit it within, let's say, six months after they pass. But if you get it deeded over to you, you're gonna carry over what they paid for it at the basis. - Yeah. And I would say, even if you plan on keeping it Lisa, you're gonna have to pay those taxes over decades that they've owned this home. - Right, so wouldn't make a difference if we got an appraisal right afterwards. - It doesn't matter 'cause if they deed it to you while they're alive, it's considered a gift. It's not an inheritance. So no, the cheapest, smartest way to do this is that they create a will and the home goes to you all when they pass. - Even with the mortgage, still. - Yes. - Like if they haven't paid off the home. - Regardless of if you pay off the mortgage or not, that's what you have to do. - That's the value of the home. - It's the value of the home. So you'd rather have a value of $500,000 sitting with you after they've passed as an example, than having a $500,000 asset, but it's really appraised at $100,000. So when it sells your paying taxes on $400,000, then you could have just avoided by not deeding it to you. And a will is pretty simple Lisa. I mean, you may go through a little bit of probating stuff, but it's not very complicated. You can go to momabarelegalforms, momabarelegal.com and create a state-specific will for them. And if it's a very simple estate and it's a primary home or residence, some bank accounts, like what you're saying, it's really not difficult at all. You guys are actually choosing the more difficult route. - And in some states, I'm not sure what North Carolina law is, but if you can set up a transfer on death for that house, then it'll avoid probate. And same thing for any bank accounts. A bank account will be payable on death, POD. If you can set that up on the bank accounts, it avoids probate. And if there's anything that has a beneficiary designation, like life insurance or a retirement account, all of that can also avoid probate. So there's a lot of things you can do to keep it simple, but you still definitely need a will and a simple online will that state-specific will do the job. And we have a great partner with momabarelegalforms where you can do that very cheaply. Less than a couple hundred bucks and it's over. I didn't, less than 15 minutes for my own parents just a couple weeks ago. - Yeah, no, I didn't. I used it with my daughter once you went off to college. - Good. So what's left on the mortgage? - Interesting. About 50 grand. - And what's the house worth? - It's interesting. I'm probably about 200. I think they've bought the house at about 140, 150. - Okay, so it hasn't appreciated much. - Okay, okay, that's fair. - You can get them out. - And why? - That's the reason why. We talked to a couple of lawyers and CPAs and they seem to think this was the best route. And honestly, we're not sure. - Well, are they not doing well financially? Are they struggling? Is that why you're looking to pay it off? - Well, it's not bad. They're old. They're just living off so security. And this is just a burden that we were willing to take all of my husband and I. It wouldn't make a significant impact on us financially. So we thought this would just be quick and easy. - So you guys have an extra 50 grand cash laying around that you could set to this? - We do. - Oh. - Yeah, then I would, Lisa, I'd just pay it off, but I wouldn't worry about it being deeded over. I would just create the will that, upon their passing, you all get the house. - Gotcha. - And then look into that TOD, that transfer on death. - Okay, that's the simplest way to do it with the lease 'cause here's the deal. I don't know how much you love paying taxes. I wanna pay as little as I can legally. And so this is a good way to not have, their parents' hard earned money and their assets, getting taxed to oblivion by the government because you just made one wrong move. - Yeah, how old are they? - I'm about 75, 80 years old. - Okay, okay, great. And will they be living in this house? - They're trying to, probably, I mean, we don't, we don't have any plans on doing anything with it, they're out of it. - Sure, sure. Yeah, so I mean, that could be another 10 years of it appreciating, right? - Right. - So, yeah, that's how I would do it. - I still wouldn't have it deeded over to you while they're alive. But if you wanna pay it off to be nice, 'cause I think the house is gonna go to you either way. It sounds like. - Right, and you're absolutely right. We'd like to avoid the least amount of taxes possible. - Yeah, but if you didn't pay 50 grand and pay off their mortgage, would this house still be inherited by you? - Well, here's the concern. There's other parts to it. There's a multiple siblings that my parents just feel comfortable. - Do the siblings know about this arrangement? - Yes. - So they know. - So you feel a little bit more justified in the scenario which is like, well, we've paid it off, so-- - Like, where the ones who paid it off? - It helps, yeah, yeah, so we kind of have like skin in the game in this asset of mom debts. Oh, okay. - Oh, boy, that has a whole other layer of tension. - Well, yeah, for sure. But also it doesn't change the answer of what you would do from a will standpoint. But yes, that can, I can see how you're like, let us help it pay off the mortgage so that it creates less-- - Sort of guarantee you. - You're on the spot of the will. - Well, that, and it looks better to the siblings when they don't get the house 'cause at least they can be like, well, we pay for it. So, you know, so yeah, I get that too, so. - Have they had the conversation with other siblings about what they will or will not get? - Oh, yeah, absolutely. - Okay, good. That's where the will is the most important 'cause it just lays it out clearly and then it's their job to tell everybody who's involved in the will what's gonna happen. It should not be a surprise after they pass. And they're like, well, at least she's getting the house and now they're mad at you. It destroys the relationships, which it doesn't sound like there's a lot of function here, mostly dysfunction, but please do this the right way. - Welcome to families, though, you know? - Welcome to families. You don't get to choose which ones are functional. (upbeat music) (upbeat music) - All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at RamseySolutions.com/Agent. That's RamseySolutions.com/Agent. (upbeat music) (upbeat music) Ramsey is taking over an entire cruise ship. We're heading back out to the open seas. Seven nights in the Western Caribbean, Bahamas, Jamaica, Grand Cayman, Cosmell for the live like no one else cruise. March 14th through the 21st, 2027. And this is a full cruise takeover. It is only Ramsey fans and us personalities on the boat. And it was such a blast last year we did this. And so we're doing it again. - So fun. I mean, honestly, and it's a nice ship. - Very nice. - Beautiful. - Now you've been on a lot of cruises. This was like my first cruise as an adult, so I didn't know what to expect. - Oh yeah, okay, what'd you think? - I was blown away. - Yes. - And it's so nice, you don't have to think about, well how much does that cost. You sorted your show up. - It's all there together, yes. - And it's there. It's like you prepaid, you did it with cash. - I will say the Ramsey's growing up, they were cruise people. I feel like you're either a cruise person or you're not. And all the memories we made as a family on cruise is they are, they're so fun. And this is an again a nice ship 'cause we've been on like big ones really small with all the different types. This is the perfect size. - Happy medium. - Yes, and all the content. I mean, it's us. We're all hanging out. All the Ramsey personalities, they'll smart money, happy hour. - That's right, we do live tapings of your favorite Ramsey shows on there. World's largest debt-free scream, new wealth building teachings, new content from all of us personalities, which weirdly people want more of. I was like, I thought we were here to have a good time. I was like, no, tell us more about Rothfeier. - Oh my gosh, every session we did, it was like back down. - We do a ton of Q&A. - You all can make a Q&A time. - You guys can hang out, but they everyone wanted to learn. It was a great day. - It was fun. So if your baby stepped foreign up, meaning you're debt-free with the emergency fund, mark the moment, celebrate, live a little. Look, have something to look forward to in the budget. So secure your cabin, they are moving fast. You can go to RamseySolutions.com/events or click the link in the show notes. All right, Molly is in Oklahoma City, up next. What's going on Molly? - Hi, thank you for taking my call. Well, that's when I are expecting our first baby this January and-- - Oh, congratulations. - Thank you. I would like to stay home for the first one to two years, but we would be losing about five to $600 a month. We have 10,000 and checking 130,000 invested. And then our current take home is 5,800, but if I quit, it would drop to 4,300. I was just seeing if it would be okay in our situation if I stayed home. My husband, and then makes quarterly commission, which could make up for the shortfall, but we wouldn't be saving any money probably for two years. - So can you live off of $43,000? I am sorry, $43,000 a month? - No, 'cause we do, our biggest expenses are house. That's our only debt. And then we do tie it off of our gross amount and then insurance. - So how much will you be, what's your deficit each month if you just went to his income? - $5 to 600 short amounts. - Oh, okay. - I think we have like $130,000 invested. Like, is it okay to, you know, since it's such a short season, pull from that or use his commission check to make up for it? - Well, yeah, he could use the commission check for sure. I mean, he could just add that as an income, is your investment retirement? Is it like in 401Ks and Roth IRAs? Or is it in just index funds, mutual funds? Where is it? - So $100,000 is in stocks and then the rest is in retirement in 401K. - Okay. - I mean-- - I only have $2,000 in checking, but we'll throw everything else to that from now on. - Do you guys have consumer debt? - I don't, our only debt is our house. - Okay, so no credit card debt, student loans, card loans, nothing like that. - There's some mortgage payment every month. - It'll bump up to $2,000 next month. - Because of insurance or property taxes? - Property taxes. - Got it, okay. So that is a little less than half of your take home pay. That's the scarier part. This is just a big part of your financial world. - Yeah, you may not be able to afford to stay in the home and not work. - Even with that much saved up. - Yeah, because your current income, you guys can't support your lifestyle. - Even with you working full time, it's still about a third of your take home pay. And we recommend 25% of your after-tax monthly income going to mortgage, anything above that makes it really hard to then say for college, pay extra on the mortgage, save up for vacation. - You'll have no wiggle room at all in the budget. Yeah. So that's probably where I would be. Now, two years is a quick timeline, but now if you want to stock your non-retirement stocks, you said it's 30 grand. - No, 100 grand. - Well, 100, you said it's retirement? - 100 and stocks. - Is that in single stocks? - I'm not sure, actually. - Okay. - I just know it's invested in stocks and it, my husband kind of did all that. - Yeah. - What was the purpose of that investing? - Well, we really just, I mean, I've saved my whole life. I just have always had like this huge chunk of city in my checking, not doing anything. So we just moved all of that to invest in stocks. - Because without the baby and me working, we save about 1,500 a month. We live very frugal. - Yeah. - Yeah, I mean, you absolutely could pull some of that money and say, "Hey, we're gonna use 500 bucks a month." But I don't want that to be your long-term mindset, Molly, because I think what can be hard is, once you hold that baby in your home, there's always a chance, which is beautiful and wonderful, that you're like, "I just, I don't want to go back to work. "Nothing in me wants to go back to work," right? And when you're used to kind of taking this funnel and it's dripping out, eventually that runs out. And so the goal is to write size, lifestyle, and income so that you don't have to touch those investments. So if you guys did for a little bit, I wouldn't be mad about it by any means, but you definitely have to justify the choices you guys have made in order for you to say at home. And sometimes we can't have it all, do you know what I mean? - That might mean you changed where you live long-term so that we can lower the mortgage. - And, you know, and even, I don't know, George, I mean, even in, you know, you market two years, which would be why, so the baby will come in 27, 28, but like the January of 29 is the marker of either, hey, if his income hasn't come up and she wants to stay home, we have to move at that point 'cause we can't sustain this long-term. You guys will just have to have a pretty like solid stake in the grounds before that because we just see it enough, that people save and they start to live off that savings. And eventually that savings, it goes away. - And then it goes to credit cards. - And then it's like, oh my gosh, we got pregnant again. And in 18 months, we have baby number two, we got to upgrade the car. Well, let's dip into, like, right, it just starts to kind of snowball if you're not used to living below what you're making from an income perspective at this age, especially, right, as a young adult. - Yeah, that's a hard decision, wishing you guys the best. - I know, but good luck, and yes, that's exciting though, about the baby. - All right, let's go to Ashley in Bloomington, Indiana. What's going on, Ashley? - Hey, guys, how are you? - Doing well. What's your question? - I'm calling because my child's poor is about to go down $488 a month, because my ex-husband got a lower income job. And I'm on baby set number one, who are like the third done. And I have cut subscriptions, and I'm really trying to hone in on what else I can do, besides getting another job, because I have three children, two of them are disabled. It was really hard to find someone to watch the children, and part of that cost of having disabled children is that they go to therapy full time, and I work from home, so I have to take them to therapy in the morning, come back home, work, take my oldest daughter to work, 'cause she doesn't drive, 'cause she has her own mental health issues that don't allow that. And then I work out my car for three hours about a day, then I go pick up the kids and go back home. - What's the gap you need to cover in your budget? - Well, I would like at least five to $700. - Okay, so if you can make an extra 700 bucks between cutting expenses and increasing income, that would do it. - Right, I can't increase my income, because you're already maxed out. - If that's the case, and what you're doing right now, you need to get that core income up. So if you're making 20 bucks an hour, we need to get to 25 an hour. - Well, I can't make any more money though, because my kids are on Medicaid, and if I make any more money, then they'll get kicked off Medicaid. - This is a rock in a hard-play situation. So you're eating their shoes, we need to figure out how to make this work, if we're gonna stay on Medicaid, or I need to make enough that we can get out of the system entirely to make this sustainable. But either way, there's gonna be sacrifice, actually. (upbeat music) - Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems, and figure out what to do next. Now, you can get that same kind of help any time with Ask Ramsey. Ask your money question, and get answers, built on Ramsey principles we use on the show, whether you're making a decision, or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. (upbeat music) If you're enjoying the show, you're finding value in the conversations today. Pass it along, share the show with someone that you know, someone you love. It's one of the biggest ways you can help us grow. It's one of the best marketing engines we have is just you guys hitting the share button, or word of mouth, telling people along the way, playing it in the background, creating some curiosity, all of that help. So thank you for doing that. Stacey is in Springfield, Missouri, up next. What's going on, Stacey? - Hi Dave, thank you for taking my call. - I would love to be Dave. I appreciate that. - I am so sorry. - No, it's okay. I don't get it a lot, but when I do, it's an honor. - That's the George's biggest compliment. - That's okay, I am so sorry. - People do think Dave is my dad, which is hilarious. I'm like, no, not Rachel's brother. - Oh, is this John? - I'm George, and I got Rachel next to me here. Who is Dave's dog? So you do have like Ramsey DNA at the desk today. - Okay, okay, well that's good. - Oh, we got you. - My question is, my mom is 75, and she has given pretty much all her money away to my siblings. And she is almost basically, she's past bankrupt, she's in the hole. - Oh gosh, so she didn't have money to give. - She had thousands of dollars to give, and she gave them, and then she went in debt to take care of them. - So Mike, okay, so my question, so I now sit down every month with her and go over her budget. We've created a budget, we have mapped everything out. And I'm just curious if she needs to go back and start the baby steps, and that's gonna be the way that we get her out of debt. She's really making a lot of headway. And my other question is, she has a trauma, that is her beneficiary. And should we initiate a hatch, hatch pot clause on it, because she's treating what my siblings have already received as inheritance. So this is Rachel, by the way, Stacy. So did she, so what, she's given to your siblings is going to count against their inheritance, basically. Yes. But what does she have left? Because you said she, she has no more money. Is it her home? But what assets does she have? She does have her home. She still has on it. How much, how much is it worse? If she sold it, if she sold it, it would probably be worth 200,000. Okay. And how much does she owe on it? 75. Okay. What else, what else assets does she have to her name any, any investments for retirement, anything? She does have, she does have good retirement. She has, like, $30,000 annuity that she found that hadn't been liquidated. 30,000, okay? Yes. She has, she has good retirement. She also, she still received, my dad is deceased. And she still receives part of his retirement and his military retirement. Okay. How much is that per month? 6,300, okay, gotcha. But really, she has $125,000 of equity and $30,000. Yes. Okay. And this. That's her net worth. That's it. That's it. Without adding in all the debt. So how much debt does she have? Um, hang on, I've got that title right here. She has $145,000 in debt. You just considered that? Um, it's, yes, a lot of the consumer debt she went, my brother used her credit card, two different credit cards that they masked out. She took out a loan to remodel my brother's kitchen. She took out, and because she'd liquidated all, a lot of her investments, is she's deep in debt due to her taxes? Is she of sound mind? She is. Yes. How much does she owe in taxes? She of about 23,000, okay, yes. She, she about cried at the tax office. Yeah, I bet. It was very sad. I took her in and it was so sad. Yeah. So how can we help today? Because I, I can't solve years of family dysfunction and a call. I wish I could. But what can we specifically try to help? I'm working on it all my life. Um, so do I, okay, well, she's not going to have anything. I need to, all right. Sorry. I'm sorry. I did not mean to interrupt you. You keep going. She's external. So processing. No. So, I mean, like right, right now, as it is, I mean, my mom does very little and she does, she does understand that she did do a lot of this. And so she lives off of what is left after she pays these debts, which is very minimal. But my concern is, do I, do I need to probably, do I need to just start with the smallest amount and start knocking that down? She's got one very close to being paid off. One credit card is just about done. Yeah. I mean, I would, I would pause everything. Stacey and focus on the IRS debt because they can put a lien on your, I mean, yeah, they're, I, I wouldn't mess with that. So I would move that to the front. And so how much does she have left after she pays minimum payments to stay current on everything? And after she pays her bills, like her mortgage and lights and everything, do you know how much margin is left that she can throw extra at this tax bill a month? She pays extra. Oh, well, she pays a little extra on every bill every month. Okay. So I would not do that. I would take her down to all minimum payments. Okay. So do all minimum payments and then, and then anything extra after those minimum payments, I would throw at this tax bill. Is she on a payment plan with the IRS? Yes. Okay. So out of the 6,300, do you know ballpark what extra she has per month to throw at this? Like 3000 or 2000? No, when it, when it, I mean, like if you, well, if I would have to break down her minimum payments. Yeah. Because we've, she's, she wants to get out of that. So she's been adding extra to each one. Right. But if I came down to it, I would say she probably has somewhere around a grander. So I, I don't know, like when it comes down to it after she pays everything, she's like $200. Okay. Okay. So, but if we go down to the minimum, I think, oh, I'm sorry. Yeah, I could, yeah, maybe a grants, but that would be two years to pay off this tax bill is basically if you put everything to that. Well, she's paying, she's paying 1000 to state or 1200 to state in 500 to, I'm sorry, 1200 to federal and 500 to state for the tax payments. Yes. Okay. Wow. Well, are you the only sibling helping right now with her situation? Yes. I have an older sibling who kind of helps, but she just moved back in with my mom. So I don't know that that's going to be help. I mean, this is probably dysfunctional, Stacy, but did you go to your brother? No, no, no, did you go to your brother and say, Hey, pay mom back. She's $145,000 in debt because of your kitchen renovation. Yeah. I have talked about my siblings and I have tried to have family meetings where we can sit down and go over, you know, this. And I plan to still have one of those, but they're not much to understand. My brother has no, there's no way he can, he can pay. Yeah. Well, the biggest thing is to stop the bleeding. Have you, have you convinced your mom no more giving the kids anything? Yes. Close the credit cards. Absolutely. Have the credit card been closed? Have you frozen her credit? I would do that with all three bureaus because I don't trust these siblings as far as I can throw them. Truthfully. So I would phrase her credit, because this is boring on elder abuse. Well, and that is, and that is what I have told them. And there's elder abuse, there's elder law attorneys that you can contact to see what your options are. But this is such a bad situation where they've, they've leached off of your mom knowingly, and the mom, and to her, she let it happen. She let it happen. And she's, she's reaping the consequences. It's really sad at the end of the day. Just note, there is no inheritance that will be going around. You'll be lucky if her estate can pay the debts. I mean, I would, I would almost just cash out the 30,000 and take care of the IRS to get them off your back. You'll have 7,000 left and you just kind of start throwing at that small credit card, because she can live off the 6,300 that's coming in. But man, that's, that's tough. I don't know. That's, yeah. But I think I'd get the IRS out. Yeah, that would be a one. And a two is making sure that none of these kids get another dime and she doesn't let that happen. People ask me all the time, George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the every dollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back and save more money. How much money are we talking? Well, the average every dollar budgeter frees up $395 in their very first budget. And if you ask me, I think your way above average. So why are you still listening to me? Go download every dollar for free and start saving more money right now. Our scripture of the day, John 812. Jesus said, I am the light of the world. Whoever follows me will never walk in darkness, but will have the light of the world. Martin Luther King said, you don't have to see the whole staircase. Just take the first step. All right, let's go out to Morgan in Tampa up next. What's going on Morgan? Hi, how are you guys? We're doing great. How can we help here? So my question is, how do I navigate a super large amount of debt with also keeping up with my expenses, my mom and my late father's expenses as a three months after graduation full-time employee? Wow, that is a lot going on. Okay, so tell us about why you're covering your parents' expenses. So my mom, she's disabled and she can't work from like past like 15 years and a close family friend was helping before I was. And then while I've been in school. just taking out a large sum of debt to come to help with those coverages for my mom and then my late father. I'm covering his expenses that he's left behind. Everything was unexpected and he has an apartment. I'm trying to salvage this is been stuck for like a year on the market and so that would help a pretty good amount but it's yeah it's stagnant. Wow. What other expenses are you covering for him? So he has my family's from Romania and he has a property over there to cover which is pretty low. It's like property taxes. His apartment here in the states and oh gosh. There's a bunch of hidden fees like lawyer fees or he was in collection. There's like all kinds of all kinds of fees. And he's passed away. Is that what you said your late father? Yeah that's correct. These are charges that I've just stuck versus some that have just been wiped away. Well debt at death usually goes against the person's estate. So have you contacted a lawyer or anything to get this settled out because I don't want you paying debts so you don't have to pay. Yeah yeah you don't you don't know those. There's a state will so you do need to sell these properties and even if the one in Romania is low I probably would still sell it because you can't afford to keep all of this right now. Oh definitely. So if you if you liquidate the the property in Romania and if you like low balled-offer just to get this condo out of here what would you what would you walk away with? Do you know? I've been you know I've been working with the realtor and we've been going down and down on the prices and I feel like my my offer is pretty low. It's in a nice area. The problem is he has two or I have two step siblings that it would have to be split amongst us and the amount of loans that I've had to take out student loans. I should mention it's like 120,000 at like 17% interest rate. I haven't reconciledated anything so it's super large and a lot of that comes from me trying to keep up with my mom and his expenses so if I don't sell this apartment at like what it's worth then it's I'm like not even covering how many like loans I had had have to take out to pay for this apartment. Does that make sense? What would have happened if you didn't take out all the stat to cover the expenses? It would be foreclosed by the bank. All the properties would be taken. So why why have you taken all the burdens of the world onto your shoulders? Yeah you could have just as you can't afford to do any of this and now all the risk is on you because that those student loans all that debt is in your name. I thought I mean the apartment isn't worth nothing. I thought it would sell quickly and then I could help cover everything. I didn't think that I was going to be in such a big hole and also when I was in school taking these loans out to cover my expenses too. I didn't it just didn't dawn on me what 17% interest would do to that and I also didn't understand that it was incurring while I was in school. I thought it would start six, seven months. The majority is private and then there's like some federal too. Okay well a little bit of homework you can go to YRIFI.com/RAMZ that's our partner to help refinance these private student loans that are crushing you and they can likely get you much better terms. So that's one thing you can do to get a little breathing room but the overall thing is you can't keep covering everybody's expenses much as you want to. So mom is gonna have to figure it out. Is she on disability? What is her income sources right now? Disability that's it and how much is that? 800 a month. That's it. Is there any survivor benefits from your late father? No they weren't together at the time so it didn't apply. And she's living with you? What kind of disability does she have? More like I'm living with her and she's got a bunch of things. She broke her back like 10 years ago at a nursing home, Lupus, fibromyalgia, just like bone pain that kind of thing and I'm living with her covering her expenses and she's also a huge hoarder which I've tried to mitigate her spending but yeah. Well I think mitigate it we need a stronger word. I think we need to remove her ability to spend if you're the one covering her expenses. Yeah you have to take over it's almost like a parental. Yeah you're in charge of this business now and you need to make sure she doesn't get any access to anything. You're making sure her basic needs are covered and that's it. Yeah that's what I've been trying it's that. Are you working more harder? Yeah I have a full-time job. How much do you make? 72 after tax. 72 after tax is okay and that's with working overtime. How much debt do you have total? So 193 and then if I take on my mom's house which like the mortgage and stuff it'd be like 300? Yeah no no no don't take on her house. You're going to go into a vortex of debt. Yeah and it's not probably in a great state. A state of like cleanliness. Yeah okay so okay so because we have a few minutes here's what I would do Morgan I would probably move out of your mom's home and I would go rent an apartment somewhere. I want you to have a you have to set up stability for yourself because everything around you is not stable. Your mom has $800 a month coming in. I think you need to kind of figure out okay what's the minimum that she needs to survive. Not her spending habits or anything. What does she need for her for her mortgage to be paid so she doesn't give foreclosed on and reasonable food budget and all of it and I would manage that on the side and help her there and then with your income I would get this apartment sold. I would get the and even if it's I mean I wouldn't take a loss but even if it's like a you only make 30 grand or something off of like I mean you need to simplify all of this pretty quickly and out of that then you're going to have to work your way. Yeah out of this out of this debt and it's going to it's going to be a journey for sure but I think you've done really amazing things Morgan. I think you've tried to be the hero for so many people and I think you kind of have to take the cape off and say I don't have the ability financially to carry all this because you don't at all at all. And back. What this is going to turn into is just you going to mourn more debt than you're unable to cover your own expenses let alone someone else's. You have to stay afloat yourself before you can help people. What's the other 73 in debt you said you had 120 in the student loans 17% what's the other 73. Car the rest of the student loans that are federal my car credit cards. Yeah that's the one. Okay what's left on the car loan. Eight eight thousand and then 15 grand in credit cards. Are you still using the credit cards. Yeah I am. I would make a pact with yourself that you are done turning to debt to solve these problems because it's not solving anything even though it's it's temporarily putting a band-aid on it for a couple of days and then it's 26% APR and you're not going to be able to climb out of that the balloon the balances are going to balloon on all of this the student loans the credit cards so at 193 you're going to look up six months from now it's going to be 220. While you're still taking on more debt. So you've got to decide I'm done with debt I'm done covering everyone's expenses at some point adults need to figure this out for themselves and you can help your mom as much as you're able to and get the step siblings involved but please stop trying to carry this on your own. Yeah hold on line Morgan and Christian will pick up and we'll give you financial peace university it's just the bulk of everything from budgeting getting out of debt and wealth building and won't you just start that process. That puts this hour of the Ramsey show in the books. Remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace Christ Jesus.