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Just sticking with your existing Medicare plan could be an expensive decision. Let chapter review your options for free. Learn more at askchapter.org/ramsie. Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broken, common sense is weird, so we're here to help you transform your life and your money from the Ramsey Network here in the Fear Ones Credit Union Studio. This is the Ramsey Show. I'm Jade Warshot, next to me. My good buddy, George Campbell, taking calls about, again, your life and your money. If you want to get on the phone, the number's triple 8-8-2-5-2-2-5. So call us. The lines aren't moving. Let's go to Brittany in Minneapolis, Minnesota. Brittany, how can we help today? Hey, thanks for taking my call. So yeah, I guess my question is, at what point does a bad spending habit turn into an addiction? And at what point does that kind of addiction need to, you know, like, how do you decide to take away access to money when that kind of thing? I have background if you want it. Well, yeah, tell us a little bit about what it looks like. It sounds like you're starting to think this is an addiction. So tell us what you're noticing and how long it's been going on. Yeah. So I have been married to my husband for about four years now. And this, you know, the whole time that we've been married, it's been pretty difficult to stick to a budget. We've paid off or I've paid off for about $25,000 in debt, fully funded emergency fund, but the majority of that has just been me. Whenever we try to get on a budget, he ends up impulse purchasing things that we don't need, especially like games, technology. Yeah, that kind of stuff. What kind of money is he spending on games and technology? You know, the individual items can range anywhere from like 10, 20 to $100 over all over the last few years. It's been $5,000, probably if we added it all up. When you say thousands and I need specifics, because if you say he spent $2,000 in the last four years, I'm like, okay, big deal. But if you say like every month he's spending like $1,000 on this thing or he's spending $800 and we just don't have it, tell us like month to month what that looks like. Yeah, month to month. We're probably looking at a couple $100 and sometimes more, sometimes less and I know that sounds super crazy, but it's, you know, probably more than that, actually maybe like three to 400, but when. How much do you guys earn? We are now taking home about $5,540 a month. And that could go up soon in the future. For a while, he did not have a job. He's had a few months where he was unemployed and we were just living off of my income and that doesn't really leave us any room in our budget for any fund spending and he was still spending it at that point. Who's working full time now? Yeah, he is working full time. He just started his new job. It's $2,000 a month plus commission. No, we don't know what that commission's going to look like quite yet. What kind of job is this? He's doing marketing. Okay, is that what he was doing before? Like is he in a career field or is he just just hop in from whatever to whatever? He's been doing sales pretty consistently. This is a new type of sale for him. Previously was more like technology sales. Okay, and you guys have kids? We do not, but we are hoping to wanting to wait until we have a house. And we're trying to save up for that right now. I mean, it sounds like you're trying to save up for that right now. I don't think he has any aspirations to do this. I wonder, I'm not convinced yet. And I want, I want you to convince me. So of the $5,540 you're making a month. There's no more debt is he's not going into debt to do the spending. He's just saying, Hey, there's money there. I'd like to have it. I'm curious. Do you guys have now that you've got the emergency fund? And I realized he wasn't helpful up to this point. But now that you have the emergency fund and you're kind of on baby step four or five and six, do you have a lot of fun money for each other in the budget? We do, yep, I set that at $180 a month for each of us. And what did he say to that when you said it? He said that that sounded good. And honestly, there's been some communication stuff in the past and just some frustrations on my end. And they requested that he took at least one or two months to just, you know, not make any purchases like that any game technology, especially since, you know, there's just so much that he can't play at all, can't use it all. And he agrees and then two days later, you know, he makes a purchase like that. Even with the 180, you didn't want him to buy those sorts of things or be on the 180. Because what I'm trying to get to is what let me just ask a clear question. So of the 180, now that that's on the budget, how much over the 180 is he spending consistently? About probably like, it depends on the month, but anywhere from 100 to like 300 of them. Okay. And let me just ask this question. Is it that because you're right, he's going over the budget, you guys shook on it. He's not sticking to it. I'm sensing two things. He's not really involved in the money period and he, for whatever reason, he doesn't care about it the same way you do. So it's aligning on that. And then the other thing I'm sensing is, and this is neither here nor there, but Brittany, I just don't think you like the things that he spends his money on. I think in your mind, it's kind of silly. At least that's the way it sounds. And it's kind of like, why are you spending money on that? Why wouldn't you kind of feels childish to you? Maybe I don't know, but I think those are two things going on. I don't mind that kind of stuff. It's just the volume and the broken promises. There's been times that we've like gone into the red. I had to pull from savings in order to cover deficits like that. I never need debt. But yeah. And really, it's a lot about the language that he uses. Like he says that, you know, he makes purchases on impulse and his brain just turns off. He doesn't even think about it until afterwards and he realizes what he's done. And it's just like, you know, no thoughts in the moment. He does have addictive tendencies. He said, you know, other things, not substance. Has he ever been diagnosed or treated by professional? No, he is diagnosed with ADHD and anxiety. And I think that's a large part of the financial. Well, it sounds like you're tired of being the mom. Because right now you do have a kid and it's your husband and it's a problem. And you're starting to resent him for it understandably. Because you're like, how long do I have to be the adult in this relationship while he just frolics over here and I want to own a home and have kids? And he has no intentions of building a future with me. Is that accurate? It's definitely felt like that. I do believe him when he says that he wants those things. I just, you know, I'm concerned because he says that he wants it. And then like I said, he says his brain turns off. But is his therapist giving him any tools? Is he being given tools that he can use to combat the ADHD in those moments where he's wanting to spend and to his point? Oh, my brain just shuts off. I don't even realize. Is his therapist helping him? Because what I do feel like is in a situation like this, if he's been working with the same therapist and he doesn't feel like he has tools, maybe he needs somebody else to help him through this. And you guys should go together. Yes. Because yeah, you can limit access. That's just a band-aid on a much deeper problem. Right. Which is a marriage that is miles and miles apart. You guys need to get aligned on your goals, your values, and a byproduct of that will be aligning on the budget and living this out. I agree. [Music] You know what's scarier than a life-size skeleton on your neighbor's front porch? A stranger from the internet showing up on your digital front porch because they found your address online. It is so easy for creepy data brokers to get a hold of your information these days. They're out there right now buying and selling your personal data without your knowledge or consent. That is all trick, no treat, my friends. And I don't know about you, but when it comes to my personal data, I prefer to be a ghost online. And that's why I've had to leave me for years. They don't just remove your personal data once. They keep monitoring and removing it for you just in case it pops back up like your middle school crush, who just won't let go. And although I love a game of hide and seek with my toddler, I don't want to play it with my data online. 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Or would you stay in my situation in Florida, right? I have three kids. I live with my girlfriend. We've lived together for five years. We basically coat mingled everything. I know you guys are super against that. I'm definitely looking forward to marrying and I need to take that step for sure. It's just, it's been a lot. These past, well, this past year I've, we have three kids underneath two. We just had twins and we're just, we're by ourselves out here in Florida. We moved out here in January thinking that my girlfriend's mother would be here and would be a lot of help and stuff like that. But things just always don't work out like that. I was just thinking in my situation, do I keep on fighting and risk exhaustion? In order to get a house out here by ourselves or do I move back home, get reset and kind of get a little bit of help with the kids with my parents and save money. - Explain what the problem is. I mean, obviously you have two kids. You're sleep deprived. That's taking a toll on you. But what's the other side of this is income low. Give us some insight as to what's making it feel so stressful beyond the kids. - I'm not sure if income low, you could, you guys could probably judge that better than me. I make a take home is about 3,600 a month. - Okay. - I work 50 hours a week. I work at Amazon, get paid 22 an hour. My girlfriend is, she is at home taking care of the kids, of course. And what do you guys pay for rent? - A rent here, we don't pay bad. Our monthly expenses are about 2,200. That's not including groceries and everything. If it is including groceries, it would be about, give a take about 28. - But you said you're not paying rent? - I am paying rent. - How much of that is rent? How much of the 2,200 is rent? - Rent is about 1,300 a month. - Okay, so a third of your income is, more than a third of your income is going towards rent. So you're gonna feel the pinch there. Obviously, your girlfriend, she's not working, so you're feeling a pinch there. What else is going on? Is it just robbing Peter to pay Paul pay check to pay check? You're just tired of barely keeping your head above water? - I'm actually not pay check to pay check. I actually, not me, but because of you guys, you guys actually sent me up in a situation where we have everything paid, we have extra money, I have a gap about like $800 a month. - Right. - I kind of put away. - Where is that going currently? - Right now, we are putting that away. - In like a high-end savings account? - No, I'm pretty much, I'm trying to get debt free by the end of the year. I got about $2,000 left on my student loans. - And that's it. You'll have no more debt? - All my debt, yeah, that's all my debt. - Oh, that's incredible. - So why move to Florida? What's in, or I'm sorry, why move back in with the parents? What's that getting, what's that giving you? - That's my problem. We've been in two apartments ever since we've been in Florida. They're both, they look very well, we toward them. And then once we get here about three to six months after, we start seeing roaches coming out of the wall. And man, it's been a roller coaster just because my wife, she was pregnant with twins as soon as we, when we came down, we had to move again after we got our first apartment, we stayed there three months and then had to move. And I made it all happen, we're by ourselves. We just keep, we keep pushing and pushing. But I'm just wondering if. - So roaches keep continuing to be the problem? Like you move into a place where's roaches, we move again, there's roaches? - I mean, like I said, I can't say every place is roaches. Maybe it's the price, but the past, the last apartment was actually more expensive than I had a better rating. And I had the same problem there, but I was just, I was a, I was a maintenance man for four years. So I do know how to maintain, not maintain. Of course, you can't maintain roaches, but I taught my best to kind of. - Not in a apartment building, I mean. - Have you let them know about it? Are they doing anything to remedy it? - Yeah, yes, I have a lot of thought about it. - 'Cause I don't want you moving across the country just 'cause of roaches. - Yeah, I feel like this is choosing the right places and making sure that maintenance is dealing with it to George's point. - I think there's more to this and I'm trying to get there. You moving across the country to George's point to avoid roaches, doesn't feel right. Art, is it that, hey, we can move back into the parents? We're not paying anything, we can stack up money. Like, what's the goal here? We're trying to get in with your goal. - Are you getting with your goal? - Like full, free childcare and she's gonna go to work full time and you're gonna reduce your expenses and now we're gonna save up 50 grand in a year. Like give me the real game plan. - Yes, I feel like if we do move, we will have that, but there's also negatives on that side as well. Like you guys said, there's two sides to each situation. I know my dad's house of North and Massachusetts is very toxic as well and it could be worse for us as well. So I just, I don't know what you're talking about. - Let's not do that. We're trading a roach problem for another problem. And so, I think the real problem here, Jay, is you're realizing you need more income to support your growing family. Agreed? - Yes. - And 45K is solid income, but man, you got a lot of mouths to feed and so we got to up that. So that means here, what if we could solve this by finding you a real career where you're making a good salary, you've doubled your income, you're doing work that you enjoy and you have enough margin to hit your goals. And maybe eventually we'll get a house, but that's not gonna solve your problems right now. - Yes, I would love that. - So have you ever worked a salary job? - I have not, I know Amazon pays for school as well, so whatever you guys, I'm here to listen, whatever you guys have. - I think we can set you up with Ken Coleman's book, Find the Work Your Wire to Do. I think that's a great place for you to start. It'll just get your wheels turning on what you're good at, what fires you up, what you're passionate about. And so you'll take an assessment that's part of that. And then after you get the results from the assessment, the book will walk you through what different opportunities there are. We'll also send you the book from paycheck to purpose, which is just gonna help you, all of that is going to help you figure out what you're wired to do and figure out how to actually put yourself out there in the job market. And I think, George, I think you're exactly right. I think getting your income up is going to be the key to this. Then you can start looking at some nicer places that maybe hopefully don't have a road to problem. I mean, you are in Florida. Those palm metal bugs. - Yeah, that's what I, that's what I'm hearing. - Yeah, what's keeping you in Florida? - Specifically. - Really nothing. 'Cause it was her mom, but we now realize she's not much help. So why don't we just go to a cheaper cost of living area, not moving with dad and increase our income? - That's what the problem could be 'cause we came from Kansas City. Kansas City, Missouri, and it was amazing. - Yes, what's wrong with that? - Like I said, the rent was super cheap over there and-- - No roaches. - I had it, yeah, yeah. - Your wife's own anyways. So we don't need the help with childcare as much. She's not going to work full time. That would be a good temporary solution, but getting free childcare from family is probably not a sustainable solution to the problem. I love the idea of you guys moving to a cheaper cost living area, plus increasing your income. I think that solves it all without putting yourselves in a toxic situation. - Yeah. - Usually if someone's living, moving back in with their family and parents with three kids, I'm like, how soon can we get you out? - Yes, and it better be like the most Brady bunch look in situation ever that you can tolerate each other. It's kumbaya, you're doing it for a limited period of time. But if you're telling me, if the first words out of your mouth as well, that's toxic. And that's-- - Well, once we can afford a house, we'll move out of here. Well, then it's going to be 10 years. - Yeah. - You've got to figure out how to live independently and not co-dependently, especially when you're married. By the way, you got to get married. You've got three kids with this woman. - Yes. - It's time. You don't need to be in a different financial place. You are committed to her. You're committed to these kids. Let's go ahead and get married. - Yeah, that's going to bring some peace to this whole situation as well. (upbeat music) (upbeat music) If you're waiting for rates to drop before you buy a home, here's what nobody tells you. When rates fall, every buyer who's been sitting on the sidelines makes their move at the same time you do. That means more competition, higher prices, bidding wars, all that. That's why I tell people to talk to Churchill mortgage before they do anything else. Churchill gives you a strategy so you're not at the mercy of the market. They can show you what you can afford, not just what the bank will approve. And with their certified home buyer program, your financing is completely secured before you shop, which means when rates drop and everyone rushes in, you're already ahead of the crowd. You're not scrambling for pre-approval while the house goes to someone else. My husband and I bought both of our homes with Churchill and having a real strategy, not just to rate we were waiting for, made us ready when it really mattered. So start your search with Churchill. Click the link in the description or go to ChurchillMorgge.com/RamseyOffer for an exclusive Ramsey audience offer. ChurchillMorgge.com/RamseyOffer All righty, here's the deal, my friends, everyone, everyone needs insurance, but it can be hard to find pros who aren't just looking to make a buck off you, all right? You need an agent who knows their stuff. Ramsey trusted insurance pros are vetted and coached to make sure that they're experts who have your best interest at heart. So if you need one, which you do, go to ramseysolutions.com/coverage to find the type of insurance you're looking for and to connect with a Ramsey trusted agent. Do that today. Let's go to Crystal, who's in Chicago, Shytown, Illinois, what's up Crystal? Hi guys, thanks so much for taking my call. Yeah, welcome to the show. Thanks. I'm a huge fan and I'm actually calling on behalf of my parents this time, so they, my mom has retired and she invested all of her pension in a fixed immunity and she didn't really know what it was and so it was about 450,000 about five years ago and so she's paying like huge amounts of fees, the money's not growing and I, she thought it was an investment. She thought what she would to meet with them is an investment firm and instead it's a life insurance company and so I think they only just realized that we won't be just realized that this is an investment company and again, like the money's not growing so we're just trying to figure out if there's a way that we can like switch up these investments there to your contract, fixed contracts but she's like locked in for like 12 years paying fees so it's just a ballpark is like she retired you know 30 years of the nurse and is that all of her income? Yeah, it's basically all of my mom's income. So what's the guaranteed payment? The guaranteed payment is 87.5% at the end of the contract value. The minimum guaranteed contract value is 87.5% of the premium. Have you checked to find out what the surrender charge is for her to surrender? Yeah, her under charge is 11 is 11% of $450,000. Yeah, so I mean, you can't stay in this though. I mean, there is, there is something to be, there is what we call stupid tax around here and stupid tax is what takes place when you make a choice without having all the information and then you learn all the information and you learn later, oh gosh, that was a stupid choice. I wish I hadn't of them that. And so there is, I'm just preparing you and preparing her hearts that gosh, you are going to pay for this. But if you move the money into a better invested account, you're going to make up for that stupid tax and then some as she keeps that money invested for a 15-year term and longer in good solid investments. Okay. The good news is, I know it's not going to be fun, we're ripping this band-aid off. But the good news is if she had just invested that into an index fund, I mean the S&P 500 is up almost 13% this year on 450 grand, that would have paid for her surrender fee already. And so if you can help her understand that, does she understand this because I want to make sure she's only making financial moves from now on out of a place of strength and confidence and not just well, a guy told me. Right, because even you crystal, you can't be the next person who told her to do something that she doesn't understand, otherwise you're keeping that cycle going, she's got to make sure she understands it. And if the market goes down, she's going to go pull the money out, it went down, you told me it wouldn't. Well, like, no mom, that's not how this works, but she was sold to annuity probably because they preyed on her fears of market volatility, right? That's how these things get pitched. I go, you don't want to deal with the market volatility. I got you. How about a guaranteed payment for life and they go, sign me up. I don't care how much it costs. This guy said I can't lose money, but the problem is she's probably making what, 5% or less on this. The returns on these. Right now it's like the return, the return is negative right now on these particular annuity. Is it a fixed annuity? Yeah, it's a fixed annuity. Okay. Wow. Well, I would be working with an actual credible financial advisor and not an insurance agent. So I would connect with them to actually get into the details of what this policy is, how structured, what the fees are, and then we can figure out what's the cleanest way out of this with the least amount of damage. Right. Okay. How would be contacting the Smart Vestor Pro? If you jump on ramesysolutions.com, click on Smart Vestor Pro. Have them look into her actual policy and figure out the best way to get out of it based on all the fine print that she unfortunately signed up for. Hmm. Sorry, Crystal, that you're going through that. Thanks for the call and don't worry, a Smart Vestor Pro is going to help you. All right. Let's get to Kristen or I'm sorry, Kirsten, who's in Dallas, Texas. Hi, Kirsten. How can we help? Hey, y'all. Thank you all so much for taking my call. I'm excited to talk to y'all for sure how well you help. So my husband and I are on baby set seven. We were kind of like newly on baby set seven and the water under the bridge that we kind of did it backwards or kind of like mismatch. So we're here now and I am, you know, trying to look ahead, you know, we've had these goals of like getting all of our things paid off and now I want to really focus in on the future. And what my question is, if we have a goal that's like 10 years away, would that be, would it be better to go ahead and just throw it in a high old or like in a brokerage and kind of have that earmark inside of our brokerage? You said the savings goal is 10 years away. Yeah, so like specifically like vehicles for our kids who are right now four and six months old. So, you know, we want to be able to get them we, I said my idea is Dallas, but we're actually out in the oilfield. And so like, you know, a corolla or a camera is not diverse out here with the kind of that we have. And so really just trying to get a good nest egg for a larger publicly like a truck. So you're saying like 12 years from now, that four year old, we want to be able to buy a truck, a used truck in cash. Absolutely. Well, how much is this $20,000? If that, I mean, maybe even less enough, you know, that would be just to probably have like in high school, maybe first year in college, if they go to a big city and they need something that's not a gas. I love that idea. I'm going to go from there. Okay. I think that's 100. I mean, honestly, Kirsten, that's what Sam and I do. We have a brokerage account that we set money aside for for the kids, exactly things like that. And I would definitely do that. I mean, you guys are in baby step seven. You've got this incredible margin. You're free to invest beyond the 15% into retirement. You're free to invest into brokerage accounts for kids, family, whatever it is that you're doing next to those different savings goals. That makes a lot of sense. If she was saying that the horizon was five years, three years. It was a 14 year old. It'd be a different story. But anything beyond five year time horizon, I'm very comfortable investing into index funds and a taxable brokerage account. It's exactly what I do. Yeah, Kirsten. So I've got a three year old and one year old. So similar ages as you and I've started investing into this account. I call it like a launch gifts account because I want to help them launch into adulthood well. And that means a cash car paying for a reasonable wedding, maybe even a down payment or an all-catch house one day. That would be pretty cool because who knows what houses will cost 20 years from now when you're 24 year old is out there looking for a home. So these are great things to do instead of leaving millions of dollars when your kid is 68 and you're 90. Pretty cool to say I helped them launch into adulthood well and now they're debt free living their best life all the way up until retirement. So how much do you plan on putting aside every month, Kirsten, let's do some fun math. Honestly, we're looking right now at a. Right now, like, maybe $500 into the brokerage, we have, and that's like after our thinking funds, of funding all of our retirement funding, their 529. And so I'm kind of trying to see if I can pick from our thinking funds, those are going into high yield savings. If I can kind of pull from those and then throw into the brokerage and earmark them a little bit different on our budget. - Yeah, so-- - Because it is such a far goal. - I mean, gosh, if you started at zero today, and you just threw 500 bucks a month in there for 12 years at a 10 to 11 percent rate of return, I mean, that's $148,000. That's just sitting there. And so it's really fun to look at those numbers, gosh, what would it be if you made it 700? All of those things are so important. And to George's point, you start with the car. If you want to keep going, now you're looking at weddings, now you're thinking about funding things like, I mean-- - You have a couple hundred grand in there to start covering all of this stuff. You guys are going to be parents of the year. A way to go leaving a legacy. (upbeat music) - It's almost annual enrollment time, and you wish you could save money on healthcare costs, but every year it's the same story. Premiums go up again, and yet you can't even control your choice of doctors. CHM is not insurance. It's a health cost-sharing ministry where members literally share each other's medical bills instead of paying into a big, uncaring system. CHM programs started just $115 a month, and while insurance premiums keep climbing, CHM isn't raising their prices this year, and you're not locked into an enrollment window either. So you can sign up right now before you watch your premiums jump again. Yalt Ramsey has trusted CHM for over 15 years because their mission is simple. Christians helping Christians cover their medical bills. Visit CHministries.org/budget and use promo code Ramsey for 50% credit towards your first month's membership. CHministries.org/budget or click the link in the description. (upbeat music) Well, if you're new to the Ramsey show, Yolk Harris talk a lot about the baby steps because they are the framework that we use to answer just about every question about money, and if you want to learn more about that, you can click the link below. Let's go to John, who's in Milwaukee, Wisconsin. Hey, John, how can George and I help out today? Hey, I have a pretty deep and sized question if you want to bear with me. For sure. So I restore houses for living. My wife and I are 30 years old and we've been married one year and have a six month old baby named Thomas. And we are currently living in an apartment for $2,000 a month. And my wife works full time and makes $60,000 a year after taxed. So we have a rental property, which is only a rental because we were unable to sell it this winter. And we needed the money out of it to buy the next flip. So now we're actually in a situation where we have more debt than we intended to have. And we're a little bit, a little bit fatter than we want to be, as you say. So how many mortgages do you have right now? Just one, technically, but I own my father. Right, so we have a mortgage on the rental for $2,100 and that's covered by the $3,100 payment that the tenants make. And my father is kind enough to have purchased and cash this home that I'm working on currently to live in with my wife, come February when our apartment leads. And so my question is a few things, but one of them is definitely, do I just try and sell the rental this upcoming season when the tenants move out? Pay off that mortgage and take the hundred and so in change equity we have to give to my father. And then come February when the house is lendable. Take out a mortgage for $150 and just pay that down. But then that would kind of leave me in a situation where I'm unable to get lending for a new project to kind of continue my job or my partner in this. So you're just a solo practitioner here. You're just buying fixer uppers, fixin' them and then selling them. But you're doing it by being leverage. We're doing it myself, yeah, but we don't have the cash to purchase it all and do the renovations. So we're just, it's our third year doing it and it's our third house. So the first house, we cleared 200 grand, did great, paid off a bunch of debt and put all of that into what is now the rental property. - I mean, I love that you're thinking about ways to earn money. I think I love that you're thinking about ways to build wealth. What I don't like about this is currently you've leveraged debt to do it and you've put your personal residents and your family kind of in the thick of this risk. And now that's, I mean, that's the problem you're calling with today. So I would, I would, the rental that you have now, it's got how much 100 and what equity in it? - Probably a buck 50, maybe 120 after taxes. - Okay, and how much do you owe your dad for the primary residence that you're gonna be moving into? - About 250, probably 300 after the rest of the renovation. - Yeah, I mean, I would do that because you got to put your family first, right? You've got this baby, you've got this new marriage and right now it's a house of cards literally. There's so much stress on the marriage. I would sell the rental, I would take the 150, like you said, I put it towards the house and I do a traditional mortgage on the rest, 15 year fixed rate conventional rate mortgage, just like that. And then can we slow down a little bit and do the next flip in cash? Is there a way that we can do this without leveraging that? - That's the way it is. And that's the thing is, like, do I just stop, do I just stop flipping for myself and maybe just go to a contract or write it and try and do other people's products? - Are you qualified to be a general contractor? - I do have my general contracting license in the council and I am a business owner with the state of Wisconsin and I do that. - Okay. I mean, you can make good money doing that. - I could not provide, I definitely am not opposed to it. I've never done it before, so I would be a learning curve just to do the sales and considering it's easy. I just show up on my own. I work, you know, 14, 16 hour days and then every two years, I get paid, you know. - The con is, the con is, everything's gotta go just as planned because, you know, you're leveraged to your eyeballs on this debt. - The risk is on you and you don't have income until the project's done and the thing's sold and it all works out perfectly. - And that's kind of killing me, is because we bought this house for four. It's gonna be worth eight and all spent a year on it. I mean, we'll make whatever for an equity this year, but I can't make a monthly payment. - Exactly. - It's such a weird feeling. - So to get out of that cycle, you're gonna have to pause and find other income to stack cash to then get your first flip in cash. That's the goal. - And that's what I think is like, just sell the flip, get my dad out of this. - Pay off your own house. - Pay off your own mortgage and then do I just go, put on a hard hat on a road crew for two years, pay this mortgage off, and then I go back to what I'm doing. - Can you be a general contractor doing renovations? - Yeah, but I mean, just for something super stable, like I could just have a nine to five, for 40 bucks an hour. - Sure, I mean, if you're qualified, you can stack all that cash. Could you learn to live off of just your wife's income when you have this new mortgage? - Yeah, but she would love to not be away from this baby. - Yeah, she doesn't want to keep you company. - She wants to stay home. So we're gonna have to find a way for you and Redwood. - Right, and if we do pay off $150,000, our mortgage then we're debt-free in a basically $850 house. - Yeah, I love that. - But with like no income. So then it's like, do I just go to the- - But no, because you're gonna go out and do general contract work or construction work, I think the plan is simple. I think it's just different than what you were thinking. I think you guys had this whole idea of flipping houses and that's how we're gonna make money. And then life started happening and you started feeling, oh gosh, this is what it feels like to be married. This is what it feels like to have a new level of responsibility. We need that stability. We don't want this risk in our life. So the homework is simple for you. Step one, yeah, as soon as the lease is up with these renters, we're gonna put the rental house on the market. We're gonna take that equity. We're going to pay back dad and we're going to get a mortgage for the remaining amount. And then you're gonna pick up stable work, working as a general contractor, working continue. Instruction and the ideas if we get this mortgage paid off quickly now your wife has you all have both earned the right for her to stay home And you're working construction and over time you save up money for the next flip and I I like that for you I think that's a really stable way for you guys to go about this dream and by the way That's what we would tell anybody in real estate, you know I think that obviously there's a lot out there teaching people how to do real estate leveraging debt and I mean gosh This whole place was built on Dave doing that the wrong way and learning from that and so don't get me wrong There's plenty of people who do leverage debt, but around here our identity is we we value peace and we value a debt-free lifestyle And it sounds like you do too John. It sounds like that's gonna be what's gonna give you guys the ultimate Peace yes, and people will think you're crazy trying to save up and pay cash They're gonna do just leverage it. I think they're crazy for not having no financial peace Yeah, and then life happens and you want your wife to be able to stay home and you go I can't I mean everything is riding on this flip and the leverage working out You're gonna be so stressed out trying to make this all work. It's just not gonna be worth it So yes, it'll take a little bit to save up and do a cash and this might be three years from now You're basically restarting this flip business, and I think there's something to be said to George for What your mindset is when you're single like when you're single you're like I'll try it I'll take on the dead. I'll you know, he's like you're anything could happen, right? And then you get married and it's like the risk level goes down a little bit more and then you have that first kid And it's like dude. I can't be out in these streets. I gotta get formula and diaper stuff You want that stability and so that's when you're a young single man You're like I could live off link cuisines and nothing in a sleeping bag in a car for a while if I had to I can make it happen But once that baby enters a picture It's like hold up and then your wife. She's looking at you like you're crazy. Yeah, because you are To leverage your own house No, you couldn't pay me enough to do it. You certainly couldn't pay me enough to do it. 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That's zander.com Welcome back to the Ramsey show here in the fair one's credit union studio Sarah is in Vancouver Canada. Hey, Sarah. How can George and I help today? Hi. Hi, Jade. Thank you for taking my call. Yes, ma'am So I am pursuing a midlife career change I applied to a very competitive Program in speech language pathology Last fall and then I just found out In July that I got accepted. Nice. Yeah. Yeah, it's exciting. The only thing is I just got on to the Ramsey program in February of this year and I didn't get really intentional about it until May but since then I I Started to get cold feet about the amount of debt that I'd be taking on to do this program. So Because I was accepted so late and we had one month Until classes started and I don't actually have right in Vancouver. It's about an hour and a half commute each way So I actually deferred to next year, but now I'm questioning whether it's actually the Why is this choice for me at the stage of my life? How much is it going to cost? The tuition itself is is actually really reasonable. It's only about 15,000 footy entire two years Your master's program, but the real cost is that I wouldn't be able to work for two years And Vancouver is very expensive Single. Yes, I am. Yeah, I'm 46 years old. Yeah. Well, there was something that caused you to pursue this to begin with Knowing, I mean you knew all of that when you kind of took this on what changed? What is it just the Well, yeah, so prior to what's the mean to the show and getting on to the Ramsey baby steps I didn't have a budget and I had just kind of accepted my debt payments as just a regular part of life And then since then I took on a second job in the summer. I paid down $6,000 in debt And now I'm actually pretty angry when I think about all the debt payments that I've put out over the years That could have gone to word Investments instead like just how much do you have left? So how much did you have left? I have about $12,000 left to pay off Okay, and you've already deferred the program till next year When it when next year would it begin September September so I'm kind of viewing this as you have until September to pay off the 12,000 plus pay Plus save up. I'm guessing seven grand. I mean how much do you have to put down upfront start this or This this speech pathology program Yeah, so the first term would be Yeah, about 7,000 that's just the tuition, but then there's the Class of the living Um, that's the bigger concern and you're not able to do any work No, yeah, it's a really intensive program Do they not allow it or is it just you just sort of going hey? I'm gonna be in doing schoolwork 12 hours a day Oh, yeah, so there's like nine classes that you take at once. They're not all full credit But they basically tell you don't expect to have much of a life or work during the program What what I mean nine classes is that nine hours? Let's let's I want to dig more into this to find out if that's Really the facts if it's a suggestion if it's just kind of a you know how sometimes it can be exaggerated It's like man, you're not gonna have a life and it's like okay. Well, what does that mean? I would like to do work as a server three hours and yes Yeah, um, I'm not sure yet because I'm asserted, but yeah, I'm thinking maybe I could do like I don't know What do you do now for work? I'm not sure. I work in insurance. How much do you make? I make 74,000 gross, but I only net about 46,000 after tax of my pension and union dues come out Okay, and it would likely be similar if you were a speech path you'd make a little bit more I'd actually make quite a bit more so that's one of the incentives But I'd make starting out a hundred grand, but it can easily go up to about 140 And it opens a lot of other doors or where I could live and you're sure about that That it's like guaranteed $100,000 as soon as you graduate Because I'm not seeing that in my research. I'm seeing closer to 85 to 90 Okay, but that's just a guy googling all right I'm just saying I just don't want you to get starry eyed and go man I'm only making a couple grand more than I was and there's still Canadian taxes and so Is there a path where you could pay off your debt and cover your expenses for the year in a savings account as a buffer What would that look like if you live very frugally you worked your tail off over the next 11 months Could you knock out the 12 and then save up another let's say I don't know 40 30 Um, I'm on a really good track to knock out the debt um Uh, and I'm trying to pick up the second draw. I had one over the summer. I'm trying to pick up another sidehouse. We're right now. What about a room? Yeah, are you in a one bedroom apartment? I am. Yeah, so I would need to move to do that. Would you need to move for school anyways or is it close by? Yes, okay. No, I need to move. It's not really a doable commute because I'm just trying to think through if you could sort of map out what your expenses Would be once you're in this program and said hey, it's gonna be four grand It's gonna take 24 months. All right, there that gives me my number and part of it you might be able to cash flow part of it My need to come from some savings But I would not do this if it's gonna require you to go into debt And I'd add to that I want to go back and find out what caused you to choose this specifically You kind of said you're like I just did a midlife career change. What? and why did we land on speech pathology specifically? Because I wanna make sure that if you're doing this, it's 'cause you know that you know you wanna do this. Especially if you're not even gonna get the benefit of the career of the income boost that George was talking about. Like if you don't, if we do this and we're only seeing a $10,000 bump, do you still care about it to that extent? Like I would do some soul searching on that. That'd be part of my homework for you. The other part of my homework for you, so we're gonna do some soul searching to figure out why did we choose this and do we still, or we still locked in on it? I think the second part of that homework is let's go and research and find out, is it possible for me to work or is that just something that people are saying with quotes around it? Then I'm gonna do some math. I'm gonna actually get out the numbers and do what George is saying and saying, can I save up, can I save up what I'm gonna need to supplement my income to some extent if I do this program and let's actually run some numbers out this weekend and lock yourself in a room and do that. And then I'm gonna start researching a roommate and figuring out is it worth it? When I move, can I find somebody that we can both share the rent together and is that gonna cause a big enough impact for me to do that? And I think if you get your head around those four things, you're gonna walk out with some real clarity around this. - Yeah, those are great questions. So my background is in linguistics and speech pathology is like, it's a natural next step in the progression of that field. But to be honest with you, I'm glad you brought that up. I was debating between either that or becoming a teacher. - Oh, well that's something else that you can weigh out. Listen, I want you to go back to the drawing board and I want you to weigh all of that out this weekend. That's part of your soul searching to make sure, hey, is it this or is it a teacher? Can I go somewhere and be a professor of linguistics and kill it and will that make me feel fulfilled? But I think if you do those four things, you'll be the kind of homework. So we're prepping you for school already. - For sure. (upbeat music) (upbeat music) - This episode is brought to you by BetterHelp. Every year you tell yourself you're going to handle the holidays differently. You're gonna stay calmer, you're gonna feel more peace and then it's the same old pattern, the same family tension and you're cranky and you're tired and you find yourself snapping at people that you love. Listen, you still have time to get ahead of everything and understand what's behind your reactions. Therapy can help you build a healthier plan before you actually need it. When you're ready to have that conversation, I recommend BetterHelp. BetterHelp is an online therapy platform with more than 30,000 licensed therapists across its network. If your first therapist isn't the right fit, you can switch at any time for no extra cost. And get this, if you've thought about trying therapy with BetterHelp, insurance options may now be available nationwide through participating providers. And eligible members have an average copay of just 23 bucks a session. Listen, you know what's coming this holiday season. This year, you have time to make a plan before the holiday chaos by preparing differently. Go to BetterHelp.com/RAMSI to check out your payment options. That's BetterHelp, H-E-L-P.com/RAMSI or click the link in the description. (upbeat music) (upbeat music) Well, George, you have a knack of explaining topics that some people think are a little bit top shelf and you have a knack of bringing them down to the bottom shelf to where all of us can understand it and feel confident about it. - I appreciate that. I attempt to make the boring, interesting and the complex simple. - Yeah, you do. - And I've got one for you today that we get a lot of questions on. We throw a lot of verbiage out around on the show and you see it on social media too. People are always throwing around words like S&P 500 and index and weighted and you're like, what does this mean? So I wanted to just take a minute to talk about this and give you a snapshot. So the S&P 500, when we say that, what is it? Well, S&P stands for Standard and Pores. They're a financial data company and essentially their team is selecting which companies are making it to this 500 list. Think of like Forbes 500. So it's essentially the largest 500 US companies and it's weighted, meaning Apple and Meta and all Amazon, those are gonna have more weight to them than a smaller company. - Right. - So they're not all equal when you look at, when you're buying a share of the S&P 500, you're not buying equal shares of all 500 companies. So that is an index and what that means is those 500 companies are the benchmark for the US stock market. When we talk about the US stock market, we're generally talking about the S&P 500 as a whole. Now, those aren't all the companies, there's thousands of companies on the US stock market the New York stock exchange, for example. And so the average return of the S&P 500, all 500 companies, that swaps of what companies are making it as technology changes and healthcare, has been around 10 to 12%. And I actually pulled the numbers for you 'cause people go, where are you getting 10 to 12% from? That's the next big question. - I know, that's the number one question. - I'm only getting 5%. And I'm like, what are you invested in? Oh, well, I'm in a bunch of bonds and target date funds and CDs, I'm like, oh, yeah, no wonder you're not getting the returns of the stock market 'cause you're not invested in the stock market. So we're talking about equities here versus bonds. So the average returns from the inception, this is the biggest day that we have. 1926 has been 10 and a half percent. And from 1951 to today, 11 and a half percent. 1976 to today, that's 50 years, 12.1%. 2001 to 2026, that's a 25 year gap, 9%. Obviously we had the dot com bubble in there in 2008. From 2016 to 2026, 15%. And since 2021, the last five years, 14.8% return on average. That's pretty incredible. So when you're talking about beating inflation, which, you know, two, three, four, five, six percent, you wanna make sure that you're at least beating that so that your investments are compounding. Meaning your money is making more money, that new pile of money also made 10%, the next new pile of money also made 10%. Because we're reinvesting any dividends that come through those accounts. And so all of that is what causes compound growth to occur. So when we punch in the numbers using our investment calculator, and you can use it here as an example, if you say we're gonna invest $150 a month. Now most people can find that if they try. They go, where are you getting that? I mean, that's really not a lot of money considering we recommend 15% of your income and the average household salary is 80 grand. So 150 a month from age 25 to 65. Okay, so 40 years. Let's see what 10% would become. If you got an average rate of 10% rate of return. So starting with zero, 40 years to grow, calculate that. Yep, 1.2 million. Not too shabby. Now you might be saying 1.2 million is not enough. Okay, invest more, work longer. Like there's variables we can control here. And what's really nice is people get scared of the market. I'm more scared of not being invested heavily enough and being in a CD or a high old savings, making nothing. Absolutely. And so since 1928, here's the good news. The S&P 500 has had 72 years where it was up, and only 26 years where it was down. So three out of four years on average, it's gonna be up. You made money. And then when you think about the years that it was down, my next mind goes to, okay, well when it was down, how quickly did it recover? Because it's faster than you might think. Yes, it's not gonna take five, six years. Now, barring some great depression or 2008 crisis, it's likely recovering within a couple of years. It's back to record highs. That's right. That's why we always tell people, don't jump off the roller coaster. Stay locked down. You didn't actually lose money unless you pulled the money out while it was down. If you just left it in, which I hope people do, you're gonna be okay. And also you're not pulling out all of your retirement at once to live. If you have a million dollars, you might pull off 50,000 that year. So some good teachings here to let you know that it is wise to invest for the future. It is unwise to stay on the sidelines, worrying about the market, worrying about the economy. Even in the midst of the chaos of this year, this stock market has hit record highs. Yeah, even with the wars and whatever, the economy and the politics, the US stock market just simply doesn't care. It's always gonna come back. And so it will always recover. Don't try and predict the dips and pull out all your funds. And here's the quote, time in the market beats timing the market. Every time. That's it. And when we talk about mutual funds versus index funds, they're very similar. It's a giant group of stocks in one fund. And when we say mutual funds, we're generally talking about actively managed mutual funds, which means financial advisors that there's a team of advisors who are actually choosing manually, which companies are gonna make it to the list. Versus just, hey, the top 500, that's what the list is. Right, because they're hoping to beat the S&P 500. They're thinking, hey, we think we can beat this 10 or 11%. That's the goal. And if we can move this around the right way, we can make it happen. So if you can make 13 or 14%, then even then, it's worth it. To even if there's assets under management fee to get these mutual funds, it can be worth it. And if all of this has sparked your interest in investing, I'm very glad. And if you want more info, it's always worth working with a pro so that you can be confident in the decisions you're making. Now you stay in the driver's seat, but at least you have a professional kind of holding your hand so that you don't screw it up. There's a lot of zeros on the end here. and they do so much more than helping you choose a final. You want someone in your corner who's walking through tax planning strategy, insurance planning, cash flow planning, debt pay-off strategies. All of that matters in your wealth building journey. So if you want to get connected with a smart investor pro, you can jump on ramsysolutions.com. And I hope that was your nerdy little teaching on S&P 500 for today. I thought that was great. Well done if I had one of those like applause buttons, I would push it, but we don't really do stuff like that anymore. No, I don't get much applause. Very good, George. All right. Let's go to Jason who's in St. Paul, Minnesota. I almost said St. Paul Minneapolis. That would be wrong. I don't think that's a way. Minnesota, my bad Jason, I almost got it wrong. Good to have you on the show. Thank you. How can we help? I just have a question. Recently started my own business, it's doing fairly well, but for the last 25 years I've been a union pipe better and just working through knowing that they got a good retirement. And in the meantime, I had been buying and fixing rental properties. And so now my new business, I'm not putting into my pension. And I don't know if I should start my own retirement fund or if I should just work on paying off the mortgages on the rental properties because all the rental properties have mortgages. How many rental properties total do you have? I have four single family homes and one commercial building. Okay. And have you put anything in traditional retirement accounts? No, I have nothing in traditional. My wife has, I think, $100,000 or so in 401k. Wow. And what does she have in them? What is the total value of the single property, the single families and the commercial? Like, what's the equity you have in all of that? The equity is probably around $1,000,000 maybe. And then my own home is probably another 400. Yeah, I mean, I love diversification. I would love for you to have some money invested. And so that would be something really important to me. I would at least be investing 15% off of your gross every single month into a 401k, a Roth IRA, making that a priority. And then in the meantime, if you do want to start to systematically pay some of these off, maybe you can sell a couple in order to pay a few off. The ones that aren't maybe cash flowing as well. And that way we can start finding a better cash position here and start investing more of that money. How old are you? 44. Yeah. Do you have any consumer debt? Not really. We don't really run credit cards other than Marlon. No car loans, no student loans, and all that. Well, my wife has a business. She runs her own business and she has a car loan. Okay, I would make sure to get rid of-- I mean, that's tied to her name. She signed for it. So I'd get rid of your consumer debt, make sure you guys have an emergency fund, and you have access to a Roth IRA outside of any employer. And if you wanted to set your own up, you can look into something called a solo 401k if it's just you or you and your wife in this business. And you can have way higher contribution limits in that regard. So you can look into that with a financial advisor when you're ready. [ Music ] I love a good sale. I also love the holidays. But if you're like me, sometimes those two don't mix well. Because six promo codes and a commercial later, it's so easy to convince yourself that you need just one more scented candle. Or a waffle maker, shapes like a Christmas tree, and some flannel pajamas. The temptation to spend more than you budgeted for is real. That's why I love having a bank that keeps my free spirit in check. And for me, that's Fairwind's Credit Union. 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Our every dollar budget app helps you find extra money every month and it builds you a personalized plan to beat death and build wealth. In just 15 minutes you'll find thousands in hidden margin and you actually feel like you got to raise. So don't live normal when you can live like no one else. Start every dollar for free in the App Store or Google Play. Today, let's go to Nia who's in St. Louis, Missouri. Welcome to the show. Nia, how can we help? Hi, so I'm nervous. I'm sorry, but this is a background. I'm 38. I have no savings, no retirement. And I never, it never was important to me until I started having kids a couple years ago. So now I've been thinking about their future, my future, and I'm really worried about my retirement because I have nothing in retirement. I found you guys about a month and a half ago when the same time I got my new job, so I have a lot of debt also. And listening to you guys, you say don't contribute to your 401k while you're paying off debt. But in my case, if I have nothing and retirement debt, get me a little tonight, be contributing anything. So my question is, should I be contributing since I'm starting so late to my 401k while I'm trying to pay down my debt? I mean, it's a fair question and you're not the only one that feels that way. So I want to start by validating that. You're looking at your life and you're looking at, okay, if I'm retiring in my 60s, do I have enough time? That's the question that you want to answer. And the answer is you do have time, but all of that is going to depend on how quickly we get the debt paid off. So how much debt do you have and how much are you earning from your job at this point? My debt, so like with my credit cards and loans, that is 62,534. Okay. I take home like a little over 2,500 every two weeks. Okay. So around 5,000 a month. Can you list out those debts for us because we're going to try to help you find a way to pay off, pay them off fastest and like what's what to tackle first and kind of help you find some breathing room really quickly? So I have true maybe federal credit court. One of them is 9,913 dollars. The other one is 3,144 dollars. I have a personal loan, 959 dollars. I have a capital one court for 5,734 dollars. I have a credit one court for 1,958. And a credit one for 2,123. And then my court, I owe 38,700. Goodness gracious. Wow. That car. There's a. What kind of car is this? Is that a hybrid or Intel? When did you get it? I got it about a year ago and I know I shouldn't have, but I know I need a core in. Well, the good news is we all need a car. We all don't need a $38,000 car when we're making 60 grand facts. I know. And how much is it worth today? I looked it up on Kelly Bullbook because I was like under the grid of it. And it's worth like 31 miles. We'll have it. Okay, so we're about 7,000 upside down, which means you've got to come up with $7,000 plus a little bit more to get you another car. If I were in your shoes, Naya, that would be my number one goal because if you can knock out this $38,000 debt and knock it down to maybe a $7,000 or $10,000 debt, that is a huge win. Two-thirds of your debt. How much is the payment on that? It's $7,000, $23,000. Plus the hefty insurance. So if you threw all of that towards your debts instead, you'd be debt-free so much faster considering you'd only have like what 23K left. Now you're investing by your 40th birthday. I know. Because you told me I'm just reiterating your stated goals. You want to retire with dignity. You don't want to live with debt the rest of your life. Let's rewind that back even further. there because I think a lot of people, including yourself, you kind of get hung up on the paying off the debt first and you want to go ahead and invest, but what happens now is if you don't pay off this debt and you begin investing, well now you have to invest even more because you're going to enter into retirement with debt payments. And nothing is worse than having to pull out of your hard earned retirement money and use that money to pay debt payments. That is, I can't imagine anything worse. You want to take that money and live your life and enjoy. And so part of entering into retirement is making sure I have as little expenses as possible. That means no debt. That means almost no mortgage. No mortgage is what I'd love for you. So all of that is super important to be ready for retirement. It's not just a nest egg amount. And so to George's point, if we get rid of this car, you're going to be investing by your 40th birthday. You're making how much $5,000 a month, let's pretend. That's your take home, right? That's my take home. Fantastic. Let's pretend. Let's just run some quick numbers here just to see what that looks like. Let's pretend. That's probably more like 80K gross salary. It's $40.50 an hour. Okay, that's 80 grand. So 15% of that, once you get to babies step four, once you're out of debt, you've got the emergency fund. That's 12 grand a year you'd be investing. $1,000 a month. Are you tracking with me? So I'm pulling up our investment calculator right now to show you this. You can watch this back on YouTube. But if you start from $0 and you put in a $1,000 a month for 25 years, so from your 40th birthday to your 65th birthday, if you just do a $1,000, you never get a raise. You just continue that at a return rate of 11%, which if you just heard the last segment we talked about, the S&P 500, you would have $1.5 million. It's not too late. So I don't know who told you it's too late. I think that's the negative Nancy inside of Nia's telling her it's too late. You're 38. What do you do and get your act together? But there's a 58 that we'll probably talk to today who's saying it's too late for me. There's a 28-year-old who's going to call and saying it's too late for me. So we all wish we knew this stuff sooner. The best thing you can do is start planning the trade today. And part of that, and we made all of that argument so that you can understand how important it is for you to get rid of this car. Because that is really the crux of you being able to start investing at 40, which is what George calculated. If you don't pay off this car, that's adding months, maybe even another year onto this journey, which is another year that you're not investing. Okay, so what I would do is your credit tank, or is it all right? If they won't give it to you, what I would do is it would be my number one goal to stack up 7,000 bucks as fast as I can. And then once I get the 7,000, I'm going to stack up another 3,000. So I'm looking at 10,000 dollars. I'm going to sell off this car, and then I'm going to take $3,000 and I'm going to buy it like the most beater, beater car that I can find. And it's just going to be temporary. And then you're going to have all this money freed up to start tackling this debt. And then you're going to have more and more payments freed up that if you do need to upgrade car slightly, you can save for two months. I'm going to save up this extra $1,000 a month. I've just saved, and I'm going to go to a $5,000 car. Do you see what I'm saying? That's how this works. That's how my husband and I did it. That's how millions of people do it. That's how you get out of the car payment cycle. And if you can get out of the car payment cycle, you have completely moved from middle class to wealthy car payments is what keep people middle class is what keeps people broke. Because they're sacri, I mean, you're sacrificing almost $1,000 a month in car that you can't afford. It could have been invested. That's your investing money. Are you single? I am single. I just have a boyfriend. Okay, but there's no child support or anything coming in for the kids on top of your income. No, but when we met together, so I'm here for the kid. Okay. And does he have a vehicle that's reliable? He does, yes. Okay, so you can feel at least for the time being somewhat confident in saying, you know, I'm going to go down to like a $3,000 to $5,000 beater. There's another car in the household that will help us get around if we need it if I have to go a super long distance. But the name of the game here is deep sacrifice. If you sacrifice deeply for a short period of time, you will come out winning. I mean, we ran the numbers. This is not us guessing. This is actual mathematical facts. You are going to win if you do what we teach. If you've listened to this show for five minutes, you have heard us say everybody needs a will. But you keep finding reasons to wait because the decisions can be hard. Like who gets your stuff? Who takes care of your kids? But here's the problem. Avoiding the questions don't make them go away. It just means the people you love will have to guess at the worst possible time. And that's why Mama Bear Legal Forms is worth the 20 minutes it takes to complete your will online. It's built by real attorneys and tailored to your state. So you know it'll hold up and the step-by-step process means you don't need a law degree to get this right. In fact, it's the exact process I used with my own family. Mama and Papa Camel recently visited me here at the Ramsey headquarters and I helped them update their will and even arrange for a notary to meet them in the lobby to knock it out and get it done. So if you don't have a will, don't wait. Go to Mama Bear Legal Forms.com and use promo code Ramsey for 20% off. That's Mama Bear Legal Forms.com promo code Ramsey for 20% off. Alrighty, our question of the day is brought to you by Ask Ramsey. Ask Ramsey is your free AI money tool that provides personalized money answers based on Ramsey principles. So visit Ramsey solutions dot com slash ask Ramsey. All right. Today's question comes from Gary in West Virginia. I'm curious about your views on using credit cards only at a gas pump. I've stopped using mine everywhere else, but I'm scared of card skimmers at gas pumps. If someone steals my card info at the pump, they can't get my money if I use a credit card and I could report the fraudulent charge without having my actual money depleted. What are your thoughts on this habit? Oh, Gary, we got thoughts. Yeah, I got thoughts. Okay. Well, there's a lot of ways around this if you're truly scared of card skimmers. And number one is just to use like your tap to pay. That solves it because it encrypts your card information. Nothing is passed through. They're not going to steal your card when you use a tap to pay. You could do prepaid gift cards. If you wanted to, you can have a separate debit card that you just use for gas and you load it up with your gas budget. There's so many ways besides a credit card. I just simply wouldn't continue using the card at the gas pump out of fear of fraudulent transactions because you can make that case anywhere. Well, my card could be used fraudulently anywhere. Well, number one, you've got zero liability protection. If your card has Visa or Mastercard on it, that debit card, you're protected. And so, you know, make sure you're banking with a quality bank that will actually give you the money back quickly and help you out with this versus make you the villain. And be aware of where you're at, your surroundings. And all of that on top of Apple Pay. I sleep well at night. Have you ever had your card skim debt a gas station? No. Me neither. Been pumping gas all my life now. All my life. You know what? I kind of stopped pumping gas when I got married. Sam usually does that. As a gentleman should. That's a rule in our house. It had been a long time. And I found myself at a gas station. And I was like, I have to remember how to do this. I haven't done it in a long time. Come on gentlemen. Step it up guys. That's what we're talking about. Use debit when you do it. Yes. Like a real man. Tap it. Let's go to Michael who's in Milwaukee, Wisconsin. Hey Michael, you're on the line. Hey there. I've wanted to run this by you. So I'm 38. I have three kids, 13, 12 and nine. We're a single income family. My wife and I are single income family. I currently make about 270,000 a year doing IT. The division of my company that I work for is wrapping down wrapping up. So in the early part of 2028, I won't have a job anymore. When we're done with that, I'll be in baby step number six. And recently I've been getting the call of the void to, you know, go into full-time ministry work. But it's a bit intimidating and scary to go from the income I have to like, I don't know, 85 or 90,000 in ministry work. I just wanted to get your thoughts, opinions. How should I think about this? And am I missing something? Interesting. My question is, if you weren't, if this job wasn't going to be winding down for you, would you still be considering moving on? Sort of, yes. What kind of? By taking this job and kind of seeing them through the wind down like there's retention bonuses that get me zoomed through some big baby steps, like four and five, two, six. So that kind of put me in a position to where this is feasible if that makes sense. Yes. I mean, when you say zooming you through four and five, that's kind of an interesting statement because four and five are ongoing. It's not kind of like a, I'm done with baby step four. I guess I was maybe not for, but maybe, uh, maybe based at five, like, my kids college would be all said what about the house? How far will you be into your mortgage? Um, well, our mortgage right now is about 175,000 and we'll have probably 70 or 80,000 in cash by the end of the, I mean, not counting our emergency fund, but like, we have about 70 or 80,000 in cash. So we could try to put that towards the mortgage or just. You know, save it. Those kinds of things. Okay. So when you talk about ministry, what are we talking here? What's the end goal? What's your title role? I'd be a pastor, a pastor at a church. So our local church, uh, I'd be a pastor there. No, I'd be, uh, just a staff pastor and they make $90,000 a year. This role would, wow. So you know that for a fact, it's not like, uh, yeah. Okay. I'm just shocked. I just, I don't think many pastors are making that kind of money. Let alone staff pastor versus lead. I mean, it sounds like it's a larger ministry. Uh, listen, I'm never gonna, if you tell me what your passion and life is and you want to go after it, I'm not going to stop you. Obviously, I'm going to look at the financials and help you find the smartest way to do it. And I think only you know if you want to become a pastor or not going from IT to making that jump because that's, it feels like a completely different way of life. And I mean, I can't knock you. I changed careers too. So if that sounds like what you want to do, cool. Let's see if the numbers work. I mean, when you make this change, you said you'll have an additional $80,000 saved. That's on top of your emergency fund. So essentially take that, knock the mortgage down to 90. Yeah. Okay. And then now you're making 90,000 single income and you've got a $90,000 mortgage and we're chunking away at that. True. I think the big things I worry about is like, so a lot of our, I mean, we didn't really, as we made more money through the years, we didn't do the lifestyle creep thing and we've been doing Ramsey. We've been doing a big box in the mail. So we've been doing Ramsey for a very long time. But ultimately, like what that's led to is money's just been pretty free flowing in terms of we don't, you know, we, we don't spend extravagantly. If we want to go on a vacation, we just get up and go. And so it's almost a little. And you know, what we have about 550,000 retirement. I have like no concept or bearing of it. If that's enough or not, I just know what I'm doing 38. Yeah. You know, part of me is also like my kids are teenagers. You know, am I going to be giving up a lot of freedom? Am I going to be giving up a lot of experiences with them? I mean, true enough. You're not going to have the margin you used to have. I mean, vacations will look different. It'll look different. It's going to take you longer to save up to do the vacations that you once did. So there is a reality to. I say, were you making 270? Yeah. Okay. Yeah. There's a huge reality to going from 270 to 90 and you are going to feel it. There's no if Anne's or butts about it. If I were you, one of the exercises I would do is I would get together with my wife this weekend. And I would do a mock budget. And then to go to the next sixth extent, I wouldn't just do the mock budget. I would challenge yourselves to live on it next month. In November, let's see what it feels like to live on 90,000. And if you're like, oh my gosh, I don't like it. You might make a different choice. And maybe you can kind of be, you know, maybe there's an option where you can be part time on staff and you can do some IT work. So I don't necessarily and I don't want to try to tell you what to do career wise, but I would say don't paint yourself into a corner just yet. There may be an option where you can do a little of both. Maybe you can volunteer time. You can work part time as a pastor. I just wonder if there's more to it than that. But ultimately that's between you and your wife numbers wise. If you go, hey, we can live off five to six grand take home pay instead of, you know, 15, then sure green life. This is what you want to do. And it lights you up. You guys have done a great job financially by following the principles and one of the benefits and byproducts of that is you have options. And so it's what you've done a wonderful job. It's just a question mark of is your whole family okay to change their lifestyle as well? What's your wife say? She's all for it. And, you know, the kids are a little bit less, I think, of course, at their age they don't sure, you know. They'll be okay. They're being like, well, you know, now it's lights become road trips. I don't want to do that. Well, I mean, to your point, obviously money is not everything. Money doesn't equate to happiness, especially career happiness, but it does buy you options. And those are the things that you're used to. You're just used to the niceties that come with having that extra margin. And it will be, I mean, it'll be a change. I won't lie to you. But I don't think it's going to be just suffering for the next 20 years either. So I think we can have a clear picture if we just all live on that budget. Get some clarity on, okay, 2028. Is that role actually going to be available when I leave that IT job? Can I do IT consulting on the side? Can this be part time and I keep the IT job? Those are all the things I'd explore before making a final decision. This is part of the live like no one else. So later you can live like no one else. And I think a lot of times we say that statement and we view it as taking the vacation, I'm putting the pool in, I'm buying the Versace, like whatever the thing is. But in this case for him, it's the opportunity to pursue a career path that pays less money. Taking a 200% pay cut. Yes. And he's earned the right to do that financially on paper. And so to that, I say congratulations. Good on you, man. Welcome back to the Ramsey show here and the Fair One's Credit Union studio. Hey guys, we love hearing from you. Your questions are exactly what make the Ramsey show happen. There is no show without you. So we're really, really grateful. And we want you to keep calling in. I know you can use ask Ramsey, but we want to give you advice too. So call in. Give us a call. The number is triple A8255225. Or you can submit your question using the link that's in the description. We'll drop that down there. So make sure you give us a call. I personally would love to talk to you. I don't know about George here. I can't. I'm not going to plead the fifth. Let's see if Jonathan will talk to us. Jonathan's in Hartford, Connecticut. Hey, Jonathan, you're on the line. Hey, how are you guys doing all right? How can we help? So I know that you guys are big supporters of Roth contributions. And so for the past year and a half, I've been doing entirely Roth. Recently, I landed a job that places me in a higher tax bracket. So I'm wondering if Roth is still the move or if it would be beneficial for me to switch over to a traditional. I mean, I'm going to tell you all day, Roth is always the move because I'm thinking about it a long term planning. I mean, if you think about when you get down the road to retirement age, if you have Roth, you're not going to have those required minimum distributions. So if you have money that you don't need to touch, it can continue to grow. You don't have to pull it out, which is fabulous. Then when you think about your errors, money that you might leave to, you know, the next generation, they're going to be able to pull out that money. And they're not paying taxes on it because you've already paid the tax bill, which is fabulous. And it's growing tax-free. So that's kind of where I lie with it. I know that for you, you're thinking, well, gosh, maybe if I do traditional, I can lower my, you know, taxable income for the year. But I think the long, the better term play for you is Roth. How much are you making? Well, that I'm making around growth 18,000 a month. Goodness gracious. What are you doing? I'm an aerospace technician, so I build jet engines. How old are you? 19. Whoa, hold the phone. Look at this. How did you do this? Are you just a prodigy? He's like, Sheldon. No, no, I went to trade school for high school. So I was lucky enough to get into a program that had an aviation maintenance class. So I did that for about five years. I got my AMP certification and everything is just kind of fallen into place perfectly. Way to go, man. Slow clap. I mean, I would say luck is like seven percent of this. You have worked your tail off to get here. They don't just hand 19 year olds 18 K a month for fun. You really know what you're doing. Thank you. Congrats. So let's talk through this. So you're saying should I switch over to Roth because my effective tax rate right now is crazy high. And later on, it will likely be lower. Is that sort of the bet you're making? Right, because I was thinking about the possibility of early retirement, like early 50s. And so my biggest concern right now is paying more in taxes right now than I would be paying once I retire. And there are a lot of variables. And we again, I wish we had a crystal ball and we knew exactly what tax rates would do and what age you're going to retire and how much income you're going to have and what you're going to live off of. There are a lot of variables there. I don't think you're going to shoot yourself in the foot if you go traditional right now with your high income. But there's also an assumption that your income is going to go down. And what if it doesn't? What if it stays high? And now we're trying to figure out one to do these Roth conversions later in life, which is going to add a different stressor. Good problem to have. Let's be honest, but still to Jade's point, there is something nice about just going, all right, it's tax-free. I don't have to worry about conversions. If something were to happen, my errors will inherit this. and not have to pay taxes on this. And so there's a nice piece of the puzzle where you just go all-roth and don't think about it, even though you could lower your taxable income slightly. It might save you a couple grand. I mean, have you done the math on your effective tax rate? - I have not. - Okay, I would figure that out first. I mean, you might find that it's kind of a wash when you look at the future variables right now. You're making over 200 grand a year, which is amazing. But it might be right on the bubble of what it's going to be in the future with variable tax rates. So I would, if you wanna connect with a smart investor pro and crunch some real numbers on this, they can help with all the math on what could be and what is currently and how much you'd actually save in taxes. But I wouldn't worry about it right now at 19. I would see where your income goes and if it's like, I'm gonna be making half a million dollars for the next 20 years, then I would consider switching over to traditional. And then there's part of it too. I mean, you're making so much that you're kind of right up against it. But in the calendar year, you would be able to max out a full Roth 401k. You'd be able to max out a Roth IRA and you'd still have some money left over that if you wanted to put some money in a traditional IRA, you could do that too. And it's just another place that you could go 'cause you've got the money in the year that's going to cover all of those accounts 'cause you're doing so well. - Do you have any debt? - I don't have any debt. Why did I go? I'm guessing you have some money saved. - Yeah, I've got about 60,000 right now. - Fantastic. Yeah, where's all the money going right now? Is it a young 19 year old? How are you spending $18,000 a month? - I don't spend any of it. I pretty much invest everything I make aside from rent and groceries. So my, I'm doing a Roth 401k right now that is entirely maxed out. My Roth IRA is maxed out. And I'm left with about $7,500 a month that I put into a personal brokerage. - Yeah, very good. - Fantastic. - Love that for you. Listen, I don't think it gets any better than that. I don't know. - I have no news stories. - Just stay living like this. No debt, keep the income up. I mean, you'll have the ability to be work optional probably by your late 20s at this point. - Yeah, which is why I like the brokerage account for you too 'cause you'll have some money you can get to if you need it. But I think this guy is so smart. He's gonna go from one thing to another. He'll be work optional, but he'll definitely be contributing in some way because-- - And one note for him, because he's making such incredible income, his income is too high to contribute to a Roth IRA. So you'll need to do something called a backdoor Roth IRA. And so for everyone listening out there, looks like currently it's about 150,000,000 to 168,000 for singles, it phases out the ability to do that. So what you do is you contribute to a traditional IRA. So you just fund it with $7,500, don't invest it yet. Then you convert it once the money settles over to Roth IRA. Then you can invest the money and there's a form you just fill out at tax time. I think it's form 8606, don't quote me on that, Jade. - I think you're correct. - I will quote you. - You just do that saying it's a non-deductible contribution to the IRA. - Love that. - That's it, but it's that simple and this man is gonna be, I mean, well, I'll be working for him one day. - I know, our whole universe was in a hot state. - I won't keep going, but I'm just saying that cat was smart. - All right, let's go to our Ramsey Baby Steps community for a question. Let's see, Jamie from the Ramsey Baby Steps community says, what's the easiest expense you've ever cut from your budget, George? - Wow, well, if I cut it, it was there for a reason. - I don't think it's ever easy to cut. No one likes to trim the budget. - Probably it was an expense of my wife's. - Probably someone was like, "Hey." - For sure. - I'm thinking about cutting this. I mean, probably a gym membership for me 'cause I wasn't using it. So that one was a super easy one. I was like, "What are we doing here?" It was an aspirational membership. You have some of those in your life? I'll become this kind of person if I just pay for this membership. - I do. I recently started taking piano lessons and I'm like classical. - Wow. - And I've taken a couple of weeks off. I don't know if I'll go back. - You're not, you're not itching to get to those old libraries. - I mean, I like it, but it's like, every time I walk by my piano, I'm like, "It's reminding me that I haven't practiced." - Oh, it's during the guilt phase of the journey. - Yes, and then I'm thinking it's on my budget. I could just remove it. - Just cut it and that's maybe a nail salon visit? Who knows? - I know. I do my own nails now. - Maybe you can switch over. - That's why. - Let someone else do it. - That's true. (upbeat music) (upbeat music) - You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the Smart Vester program. Smart Vester can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals your pro will take the time to explain your options so you never have to invest in anything you don't understand. Head to ramsysolutions.com/smartvester to get connected. - Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramsysolutions.com/smartvester. (upbeat music) (upbeat music) - Alrighty, George, you know, it's about that time. We've got a cruise vacation coming up. They live like no one else. - I'm packing the bags. - Every day I pack one more thing. That way I'm not stressed when the cruise comes. - So you're packing one thing a day until March 14 through 21st, 2027. - I'm a heavy packer. - Wow. - A lot of toiletries. - It's called a sinking fund for packing, but if you've worked hard to get out of debt, the question then becomes, what do I do with the freedom I've created? Well, George is taking his freedom. He's going on the live like no one else cruise along with myself, Rachel Cruz, Dr. John Deloni, Dave Ramsey himself, and hopefully you, we're gonna unpack what comes next on the live like no one else cruise, which is a week long getaway where you're gonna have an incredible vacation. You're gonna hear brand new teachings again from the entire team. We're gonna be talking about setting new goals after beating debt. We'll talk about ways to continue building wealth. We'll talk about creating a legacy that lasts well beyond you. Plus, you'll get to experience live show tapings. We'll do the world's largest debt-free scream, and you'll have time with all the Ramsey personalities, if that's your bag. - That's right. Well, hang, we'll do, we also do a bunch of fun Q and A's and some pop-up experiences. I think me and you are, I think we got roped into karaoke. - What? - See, no one tells, they don't tell me. I don't know. Listen, we gotta figure it out or do what? - I get knocked down. - There we go. - I always go for chumble one, but that's the best one. - Give me something that isn't technically singing. - All right. - That I can nail it. - Yeah, but you know more than words is, that's our thing. - That is those harmonies. - Well, anyway, if you're on Baby Step 4 Beyond, join us March 14th through 21st, 2027. Book your cabin at RamseySolutions.com/events. We're almost sold out, so get on there and get your lock down. All right, let's go to Chad, who's in Houston, Texas. Hey, Chad, how can we help out today? - Hey, how are you doing? - Doing good. - Hey, I just have a question. I'm in my 40s approaching 50s. I just decided to get serious on this thing. Baby Step 1 is done. Baby Step 2 is in the process the last three months. We've knocked out 20 grand, but I consumer debt. But I think I can skip ahead and like close out, Baby Step 4, but I just don't know if it's what I should do because-- - What do you mean, close it out? Like, be done with all my debt and-- - Oh, Baby Step 2. I heard you say four. - Yeah, sorry, two, I meant two, not four. - God. - Okay, so you're saying you wanna, you would just wanna be done with the debt payoff journey. - Right. - What's left to go? - So I have the potential to, of not, the bill is roughly 50 minus the land and the house. - Okay, what's the 50? - It's 150. - It's 150. - It's 50 is $20,000 of a personal loan and $23,000 on a car and the rest some all credit cards. - Okay, and what's your game plan currently? - Well, I've been doing the debt so well. I currently have like $8,000 left on the credit cards and I'm eating them up quickly. - Good. - Wanna pay off the car, personal loan. - What's your household income? - 130 to 150 at various. - Is that just you? - Me and my wife. - Okay, you both of you working full time? - Yes. - All right, so based on this, if you just continued on, how long would it take you to become completely debt free? Consumer. - Consumer debt, if I don't add the land in to the picture, 28. - So it's gonna take you over a year? - Yes. - Okay. - I've been aggressive but I can get even more aggressive. I can be done in another three months if I just really got aggressive. - Yeah, where's that money coming from? - My own land, I run cattle. - Okay, how much land do you own? - I have 25 acres. - Okay. - So you're saying you would sell off some of it? Um, what I had in my mind is we've been building a house on the property that we already have a home on But selling everything cattle all the land that has home Everything and get aggressive in that you're not doing that just to pay off the debt. Yeah, cuz that would bring far more than the debt you have No, I want to possibly buy but I thought to buy something smaller and really attack my retirement Because I've only got like 30k between our two retirements right now. How old are you guys? I'm in my late 40s and my wife is at her early 40s. Okay, so I'll call you 45 combined um Tell us okay, so the land how much is the 25 acres of land worth? Roughly right now 300,000 and then how much is your mortgage? You said you have a home on the property Mortgage 0124 on the mortgage and the tax roll is at 175 They they have my other home that I'm building been building cash money Um on the tax roll at 240 And what about the land itself that you owe money on The land 098 on and it's like 300 So it sounds like I'm trying to separate the debt journey with this Dream or letting go of the dream. It sounds like you just want out from this land and cattle and the hoe the house is just too much you want to simplify your life We want a simple having to always raise cows and all that but My end goal is take care of my family So if you were debt free would you still do this is what I'm trying to get at When I still run cattle would you would you sell off the land and the house and all that if you were debt free today Um, no not if I was debt free Okay, so let's see if we can find a way to preserve the life that you enjoy doing But also get you debt free and make sure that you're Ready for retirement because I think that we can do this without selling off Everything that you own which by the way, how much is the cattle worth? I've probably got $80,000 in total. Okay, so I'm looking at this you you say you have 30,000 in in retirement. That's all you have Uh, I just want to run back the numbers and make sure there's nothing else 30,000 personal loans 23,000 in a car and 8,000 on credit cards. That's the only consumer debt Thank you. Okay, and you're making a good living. So why can't we Attack this debt and then from there on why can't we go ahead and start doing our baby step four We're investing 15% of your income you have a great income you guys are making 150,000 If we run those numbers, I know you're gonna have enough to retire with plenty of dignity And then in the meantime, we're just walking the baby steps like anybody else would We're going to be intentional about throwing extra on the mortgage and extra about throwing throwing extra on the land because Combined it's not unreasonable 124,000 that you owe on the mortgage and 98 that you owe on this land Is there any other debt? No, that's it. I found my car Got my truck on my farm equipment out right all of that. This is it. I mean, you can't go out and buy something cheaper than that No, I need like I've been building the house out of cash. I need about 130 more to finish the house So I've just been doing it slowly. Yeah, so I guess you get to get a place to live, right? No rush on that No, yeah, I don't think there's anything on fire I just I think you just need a methodical plan of what we're gonna do next what comes after that What comes after that? And I think that if you're willing to take each baby step There's no reason that you have to sell all the cattle sell all the land sell all the This and that if you want to that's fine I don't need to I would sell the car if you're looking to make a sacrifice somewhere to speed this up What's that car work? The car is only worth about 20 But we have a large family we started over so we have three grown kids, but we have Three small kids and we also are foster parents. So we have six kids in the house six kids So when you do your every dollar when you do your every dollar budget, how much margin do you see left? Um right now I'm at about two thousand dollars in margin Okay So I'm looking at your 50 grand. I mean if if you put four grand a month towards the debts That's 48 grand in a year Yeah, and you said you'd be debt-free by about a year from now So how is the math working on that is two thousand going to the debts and you're saying you have an extra two to throw at it No, that's the two that I'm throwing at the best right now Because that's going to take a couple of years at that point So that's where I would do the math and go listen if I can't do this in under two years or so Then something's got to give and that's where I start making sacrifices But the home and the land all of that would be the last thing I give up as a last ditch effort if you're up against a wall Which you're not maybe we sell off some of the cattle first and and use that to pay off this debt John Deloney might be willing to buy some Listen guys I've heard just about every excuse for why folks think they can't get ahead with money So let's go ahead and settle this right now you get the final say on what happens with your money That's why you have to start telling your money where to go so you can stop wondering where it went So if you're gonna start winning with money you have to get on a budget and the easiest way to get started and stick to it is with the every dollar budget app It'll help you make a plan for every single dollar coming in and every single dollar going out every single month And guess what it's free so no excuses download every dollar in the app store or Google Play today Well, if you're new to the show you may not know that we have a studio here on campus We have two giant buildings and we have several studios here that we broadcast the show from And inside the lobby you can actually come and watch the show right on the glass We have folks here every day that we're filming and we actually have a debt-free stage that people come So that they can stand on the stage and actually do their debt-free scream and tell their story And that's one of my most favorite things that we do around here and so today We have Aaron and Sarah all the way from Arizona to do their debt-free scream guys welcome. I'm so glad you're here Great. Thank you. Thanks for having us. Yeah, absolutely And I hear that you guys are kind of special because not only are you here to do your debt-free scream But you used smart dollar which is one of our favorite products to Like accomplish all of this so your employer took that on as a financial wellness benefit to hand over to the employees And you guys jumped into that. Is that what happened? Yep. Yep. So I work for you all and a couple years ago I got an email and they said hey, we offer these services Go ahead and take it out and I said okay. Sure. I've never heard of Dave Ramsey really I mean I've heard the name, but I didn't really know what he talked about. This was really your first introduction to the really what I said The videos the budget all of that Baked in and got you guys fired up. Yep. Yep. Wow. We got all signed up and we started figuring out how to use every dollar as the budget and watching all the videos and all the informationals on smart dollar and Of and here we are a lot of being bought a boom. Yeah, and so how much debt are we talking about how much did you pay off? We paid a thousand and five years and five years now Incredible. Well, I won't get into your income since you've told us that you're basically part of the team here All the U-Haul co-workers are watching. I was like who are all these people in a lot of it's the smart dollar team They're so excited. Oh, that's so exciting. That's fantastic. So what kind of debt was the 101? Mostly student loans and car loans. Ah, yep, and one ac loan What an ac loan. Wow. I love that. You know like fact will get you. It will especially in Arizona So you're at work you get the smart dollar benefit and you're like ready to go. I mean gosh Sarah you're kind of like what what are you talking about? What is this how do you present this to you? Um, he came home from work one day and was just like hey, they have this school new program this cool thing We should check it out. We both had actually just finished school and so um, we weren't making a lot We were you know and our new entry jobs and so it was kind of a perfect opportunity for us to be like Okay, let's get our lives on the straight right path get what we get it all together So it actually just ended up working really well together. Wow And so good timing. Yeah, it was good timing And so what did that look like for you guys? Was this working extra hours? What was what did that process look like? Yeah, I mean Sarah was the biggest proponent of it. Um, it wasn't hard to get her sold on it Uh, I basically made everything to keep us afloat And she worked part-time and then she even picked up some extra hobbies and some side gigs To really help push us to the point where we were hitting all of our goals ahead of time and to be able to pay off And I'll let you tell us about that because everyone goes okay, what side hustles are. I'm not gonna go drive Uber What kind of stuff were you doing and what were you doing? again paid for these. - It was actually a tender mercy blessing that I kind of fell into at our church. I performed a special musical number and one of the members of the congregation came up and like, "Hey, my daughter wants to learn violin. "Will you teach her?" - Wow. - And then it's kind of turned into just kind of a word of mouth thing. And so I built kind of a little studio off to the side. And then I worked part time as a behavior therapist. And yeah. And then we just had some like survey opportunities that we did too. And so just kind of random eclectic things around all over the place that kind of just gave us that extra push to finish it out. - Yeah, I love that. You're using the skills that you have. You're accessing people who are around you. I mean, that's how it happens. Violin lessons. - That's the real deal, that's fantastic. So this was over a five year journey. Now that's longer than the traditional 18 to 24 months. How did you guys maintain the momentum along the journey? I mean, five years of sacrifices a long time. - Yeah, it was definitely a grind. Little things always come up and some big things. We had most of our kids during that time. - Wow. - And we cashloaded all of them. We didn't have to go in any debt for that. But mostly it was just staying focused. We had each other. We had our friends and family and our community that really helped us when we had to go down the budget and decide what to cut. You know, it wasn't too hard because we had other people who really supported us. We started doing babysitting swaps with other couples. - Oh wow. - Genius. So no one had to pay for babysitters. - Yeah, exactly. - You guys take it on one night. They take it on another night. - Yeah, wow, exactly. - Have a community. That's a big part of this. - Your ability. - Wish you luck. - So you had supporters. It wasn't just you guys kind of in your lonely room making this happen. You had cheerleaders. - Yeah. - Were there any naysayers people who just didn't get it? - I mean, we got a couple questions here and there on like, oh, you know, but for the most part, everyone was pretty supportive, which was really good on our end. - Wow. - Yeah, that's great. What was the hardest part of that five-year journey? Do you remember a moment or a thing you had to sacrifice or cut? - Yeah, well. - That still sticks with you? Left a scar? - Well, the biggest moment is the AC loan. It was the smallest loan that we had taken out, but it was the one that made us really realize, like this is not how we want to live. Like we already had two car payments. We were trying to pay off student loan. And then our AC goes out. And in Arizona, that's a necessity. - Oh, yeah. - And it always happens. And we're like, we can't afford this. And what do we do here? And it was really scary. And so we were like, you know what, we need to get really intentional with this. Let's start, let's put the hard work in. And let's make a new life of something that we would actually be proud about. And it's come down to this, yeah. - That's really cool. So the timing of, you had the benefit there that you could kind of go through FPU, do, you know, use that benefit. But the AC is what really triggered you into, like we need to like pop into action and actually do this. - Like we're grown adults and we can't cover this emergency. Like what's going on here? - Exactly. - You can do better. - Yeah. And so that really aligned our like gazelle intensity. So before we were like kind of following the steps, but then we were like, we have to step it up and we need to make this happen. - I love that. - So having that clear why is so important. So what next, like what's on the docket for you guys? - Next is the house. I think we wanna get our forever home. So start saving up for down payment on that and then really be able to invest and be prepared in the future. We both did some missionary work when we were younger and we'd like to continue to do that in the future. And it's just things like that that help keep us focused. - I love that. Well you guys are rock stars. Tell us about your kids. Like you said, you had babies during this time? - Yeah. So when we started the process, our oldest was just a couple months old. She's six now and then we have a five year old and a three year old. - Well, they're never gonna experience the stress of death. - They probably won't remember the sacrifice, but they will reap the benefits of your sacrifice for the rest of your life. - For sure. Yeah, and it's really nice that we did it while they were young. 'Cause they don't need a whole lot to be entertained at this point. Most of the time they played more with the box that the toy came in than the actual toy. - And yeah, it's really nice to be able to set that foundation while they're this young so that we can have more fun in the future when they're older. - Absolutely. Well, well done. You guys are absolute rock stars. I mean, you're the epitome of what it looks like to walk the steps and do it the right way. And so you've earned this moment to count it down. And let's do that. We've got Aaron and Sarah from Arizona. They paid off $101,000 in five years count it down. Let's hear your debt-free scream. - Three, two, one. - We're debt-free! - Yeah! - Yeah! - That's what I'm talking about. I just, I can't think of an HR benefit that leads to that kind of life change. - That's incredible. - Yes, it's like, yeah, you got your PTO and this and that, but this is life changing. - Well, what's interesting is that, you know, it's one of those things where you can never make an account. You can never log in. You can never watch the videos. You can never make a budget. And that's fine, and people will do that. But if you just decide, you know what, I'm actually gonna engage with this thing. I'm actually gonna see what's inside of this. And you watch those videos, you do the budget. It's hard to not experience some behavior change. The gears start clicking, you go, how soon could we become debt-free? - Exactly. - Is this actually possible? Well, they told us, the average is 24 a month. I mean, it took us a little bit longer, but that's okay. It's worth it. - Five years is gonna pass. So you decide, do you wanna be debt-free, paying off six figures? Or do you wanna be just right where you are, still struggling to pay the bills? - And that's the thing. He felt they felt that it's comfort. We don't wanna live like this, and they didn't ignore it. They said there's something that we can do about this. We can actually change our life. And I think that's the thing. If you're feeling paycheck to paycheck, if you're feeling up against it, the stress and burden of debt, you don't have to continue that way. You can change your life just like Sarah and Aaron did. - Way to go. (upbeat music) - I finally get to announce that my brand new book, "Building the Marriage You Want" is available for pre-order. If you and your spouse have been feeling like roommates lately, like maybe this thing called our marriage has just run its course, like this is just the way marriage is, I get it. This book is me sitting at the table with you and you and your spouse helping you both take the next right step towards the marriage you both want. Marriage is still worth it. Order now for $24.99 and get over $100 and pre-order bonus items at RamseySolutions.com/store. (upbeat music) - All right, your Ramsey shows scripture and quote of the day Psalm 100 verse four. Enter his gates with thanksgiving and his courts with praise, give thanks to him and praise his name. Well, Ayanny said, "Be thankful for what you have. Your life is someone else's fairy tale." I know that's right, I like that. All right, let's go to Lauren, who's in Lubbock, Texas. Hey Lauren, you're on the line, welcome to the show. - Hi. What's up? - Hi, it's so good to talk to you guys. So my husband and I are wondering how we can encourage his grandparents to contribute to our daughter's 529 instead of a Trump account. - Oh, what's the conversation been like with them? - Well, it started with, you know, you guys should get a Trump account and we're like, "Well, we will." Well, if we've listened to George say take the free money. So we're doing that, we're gonna take the free money from the Trump account. And we have a 529 already set up that we're contributing to. The agreement was we would all, you know, discuss this separately, even though my husband and I had already done that. And so today I get a text from his grandmother saying, "Can we have your daughter's social?" - Oh boy. - And I said, she said, "We want to open an account for her." I said, "What type of account?" And the reply was, "It's the Trump account. No need to punish the baby for us, like for her not having it." She said, "We don't want to hear from friends when she's in high school that they have an account." And then she comes home and asks why she doesn't. Which if that's the worst thing that I have to have. - It's not a LaBoubou, it's an investment account. I don't think it's people are gonna be, you know, jealous here. - I think that's what the weird thing for me, the statements that are surrounding this are what's making it very strange. - But can you just say, "Hey, appreciate that. I'll open the account on my own and send you a link to contribute." - Yeah. - It's that simple. - Yeah. And, well, I guess, should we be trying to get them to contribute more to the 529 then to the Trump account though? Or if they really are set on it being the Trump account, should we just let them? - I mean, it's their generosity. So they get to call the shots on how they want to give. And I'm, these are two good things, right? We just have separate goals here. The 529 plan is for their education, which is obviously coming up sooner, right? That's 18 to 22 versus the Trump account is an investment account that we're considering retirement. Now, the compound growth from however old your kids are [BLANK_AUDIO] plus is incredible. So there are benefits there, but you also have a much sooner goal of, we got to pay for college and that's going to be, could be hundreds of thousands of dollars, right? Right. And I guess she said that she should have close to $500,000 when ever she graduated, like through the Trump account. I don't know if that's her considering, I don't think it'll be a graduation. It's the stat was that at retirement. If you take the $3,000 and you just let it ride all the way to 60, it could be half a million dollars. So that may be what they were talking about. So they might have saw a stat, you know, personally, I do it all. I'm funding the $5.29 plan. Nobody in my family wants, my parents give to that. Those are the only people that are willing to, I tried to pull out the QR code at the kids birthday party. Nobody was excited about that. They wanted to give the toys. That's just how people are. So I would take it and say that's very generous. Will open the Trump account. You can donate there. And maybe you can explain. Hey, listen, that the goal of education is coming up a whole lot sooner because how old are your kids? She's nine months. Nine months. Bless it. This baby has, has some incredible parents and grandparents. She's already set up for retirement. She's set up for college. So I would just kind of map it out. Okay. We might have to fund college. I mean, are they giving a whole lot to this? How much are they donating? I would imagine. So yeah, like are they going to max out a Trump account every year for your kids? It wouldn't surprise me. So they got some money. We're talking five grand per child. Is the max contribution currently? Yeah, they could do that. I mean, it's not a horrible thing. I mean, I understand that you have a preference and you're thinking $5.29 first, but the truth is this baby is young enough, you have enough time to make sure there's plenty of money in a $5.29 if the kid even goes to college. So I would let if somebody is being generous, generous, don't block the blessing, even though they're saying some weird side comments on the side, just say thank you and move on. And I really don't think there's, I think it's a good problem to have. Yes, that's where I'm kind of like, if that's our biggest argument as a family, we're pretty functional. Yeah, we're doing all right. So it's a good reminder. When we talk about the Trump account, it's a new investment account they launched on Independence Day of this year. And if your child was born 2025, 26, 27 or 28, you get $3,000 seed money from the government, which is pretty cool. Yeah. And then Michael Dell of Dell computers, him and his wife have donated $250 to any kid who didn't get the thousand if they live in certain income zip codes. My daughter, my son actually got my daughter. She got the $250. Wow. And we got the thousand bucks from my son. And so compound growth from age one or age three to age 60 is pretty mind blowing, even if you don't contribute another dime. So it's a pretty cool, it's a little bit gimmicky from the government, but I'll take it when you're letting you don't need to earn income like you do with a custodial Roth IRA. So I'm all for it. I've maxed my kids out for the year because I want to see them retire multi-millionaires and have as much impact as they can. Yep. And with that, they will. Let's go to Amber who's in Atlanta, Georgia. Hey, Amber, how can Georgia and I help out? Hi. How are you guys today? We're doing good. How about you? Good. Good. I'm calling because my husband and I, we bought our home about two years ago. And our mortgage was about 25% of our take home pay. But over the last two years, each year when the property tax assessments have come in, they have risen our mortgage and escrow payment by about now a total of $1,000 a month. So it's getting, cutting into the margins. And I was just wondering like do we need to move or are there other ways to go about fixing this problem? I guess. So it's gone up $1,000. So now what percentage of your take home pay is it? About 30. Okay. Okay. Nothing on fire, but it is frustrating. And property taxes and insurance will always go up over time. Do you know why it went up so significantly? I think they, they've looked at other houses around ours that have sold for a lot more than our house would sell for. Our house is not renovated. We haven't put any money into it. So I know if we were to sell it, we would not get even close to what they're valuing it for. But everyone's for being and selling houses around us for probably three to four hundred thousand more than we would probably get. So I think they're just popping everyone's values. Okay. And yeah, $1,000 is a, that's a big squeeze to feel over a short period of time relatively. I mean, two years is not that long. I mean, that's a big jump. So the question is, what baby step are you guys on? Because how you experience this is, is going to be different in baby step two versus baby step six, right? Right. So my, I am all about the baby step, but my husband is, I just got him on board with budgeting. And so this is kind of where I'm discovering it. I'm a stay home mom. So I used to kind of, he would say, this is how much you have to spend for like kids and food and all that. And he was covering the rest of it. And his mind said it was just save as much as possible, always. So we're in a decent spot. We have about 16,000 in debt between windows that we got a couple years ago and students and loans. Okay. But we have enough money to pay it off today. He just doesn't, he's not, he's not there yet. How much do you have in savings total? Between cash and investment account that is in his name from his dad and regular savings, we have about 112. Well, what's the cash? 80. 80. And then do you have like stocks, like single stocks? I'm not sure what the, what the, the investment account, what it's in, I think it might be stocks. Well, to answer your question, I would not move. You know, 25% up to 30 is not drastic enough to make that move. If you're feeling the squeeze, my guess is it's likely because of this debt. And I would, I would reach over and I would take from that 80,000 and I would pay off the debt today. And you're going to feel like you got to raise when you do that. You're going to feel like you have breathing room. That combined with working a budget is going to be life changing for you. Now you do need to get on the same page with your money. It does sound like he's kind of doing his thing and you're doing your thing. And it hasn't all come together yet. But if you start working together, I think that you guys can make that headway. Well, guys, thanks for hanging out with us today. Thanks for everybody in the booth. And remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace, Christ Jesus.