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. From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Campbell, my co-host today, Dr. John Deloni, taking your calls at AAA 825-225. Kylie kicks us off in Sacramento. What's going on, Kylie? Hi there. Okay. How can we help? So, I reached out because I am in crippling, overwhelming debt. I've read the book, told me makeover, and I was really inspired. But I'm just trying to crunch the numbers myself, and I feel like even implementing Ramsey Solutions, I feel like I'm going to be in debt for the rest of my life. Wow. So even after reading the book, you're going, there's no hope for me. That's how it feels. What does your math tell you? So, my math tells me, I mean, that we just don't have enough left over at the end of all of our bills. Even though we have a high income, it just looks like we've made a lot of bad choices, and it's going to be really hard to rebound back from that. If I were to put $2,000, you know, a month on this debt extra, I still feel like I would be paying off the debt into my 50s and 60s. Is that what the math actually says, though? You said I feel like it'll take me to my 50s. Well, it's hard for me to actually do the math, the math, as accurately as I'd like to, because, you know, of course the interest is just eating me alive. Sure. Even if I'm putting extra $2,000 hard for me to like-- Okay, so give us the numbers. Maybe we can help with this. How much debt do you have? So, I can break it down. I have $411,000 due loans between myself and my husband. That'll do. Okay. Okay. Anything else? Can we have $36,000 for a loan? Sure. If that has the word loan in it, it for sure counts. Okay. So, we have a $36,000 for a loan. All right. I have a $15,000 car loan. Okay. And then we have about $80,000 in credit card debt. Wow. What do you all do for a living? So, I have two jobs. I work for the state of California, and I also have a business. And my husband, he works for an investment bank. What were the degrees in? Believe it or not, it's finance accounting. We both have MBAs. Okay. So, what's your total take home on an annual basis? So, my total take home--oh, I don't have a broken out on an annual. It's $96,50 a month. Is that for both of you? That's for both of us and for business. And that's because, you know, the 401(k) loan is pulling out at $60 a month. Okay. Is the 401(k) loan you're saying? Yeah. So, we don't get to take that money home. It's like automatically pulling out that at $60 a month. Are you guys doing any investing right now? My husband has a 401(k), and I don't have anything going towards your time. I'm in my 30s. How much has your husband make? He makes about $100,000 a year, but he brings home only $4,600 a month. Tell me about that. I know you're in California, but you're talking like 60% in taxes. I mean, he's got taxes, and the 401(k) loan is $860. So, he's got what he's putting towards his 401(k), his--what he's pulling out for, like, the childcare reimbursement, you know, which is probably another 400 a month, and then this gigantic 401(k) loan. What are the minimums on all of your debts between the student loans, the 401(k), car loan, credit card, all of that? Just to give money on this. I mean, it's about 4,000 a month. Like, because we've got $860 on the 401(k) loan, we've got $2,000 minimum and credit card payments, and then our student loan payments, like with our income-based repayment, it's actually down to about between 600 and 800. We're still working on getting into repayment on our student loans. Yeah, but if you're paying that small of an amount, it's growing faster than you're paying it. You got like a thousand interest while you're making 600 payments. What do you live? What's your housing situation? So, we rent. Okay. How much is your rent? $2,800. So, let me ask you this. Can we ask just some more probing questions, is that cool? Of course. Yeah, yeah. Trying to get a picture, and some of these questions might sound like their indictments, and they're not, okay? Okay. Tell me about a guy who's got a degree in finance and an MBA that is. I'm saying this in quotation marks right, is only making $100 grand. Why is any out making $250 or $300? I think that the problem that he's having right now is he's working in more of an analyst rule for this investment bank and doesn't have like a lot of management experience, and he doesn't work directly on investments in like portfolios. So, it just doesn't seem like he has a lot of transferable skills. We thought the MBA would get him to that next level of his career promotion and we just don't have a guarantee of any of that. No, I think that's one of the big myths of the MBA is that it's some kind of golden Willy Wonka ticket. I'm not going to let you. I'm not going to hire you to manage my portfolio unless you've got experience managing portfolios, right? I don't care what your education is. So, he's likely overqualified for a lot of the roles and underqualified for the ones he actually wants. Yeah, absolutely. What steps is he taking on nights and weekends to get that experience so that he can begin getting pieces of these giant portfolios? That's just not his lane. He's working on back office. He's working with managing projects and working on international teams, but he's not doing any actual portfolio managing or working as a director. What about you? What's your day job? So, my day job is I'm working as an auditor and I use my CPA to get that job basically from working in public accounting. So, my business does accounting and finance. What do you bring home in that? Sounds like you bring home about 50 or 60? So, my state job and bringing home about 70. I'm not bringing home. That's like my growth. So, in California, you bring home about 40 of that 70? Yeah, I mean, like it's only 3,000 a month after my pension. Yeah, 35 of that 30. God almighty. Yeah. The solvable problem for me right now is you two are very credentialed and very qualified and you're not making nearly enough money for all of the investment you've put in the car. So, basically another way to say this is you all went and bought a really, really fancy, fancy, fast car and put the most premium gas and all the greatest additives into it and you're driving in first gear. And that means complete disruption of the stability of a state job, complete disruption of he's comfortable and he gets to say cool things like international clients. And like that kind of stuff for we've got to go max, we've got to get a way, way bigger shovel to fill this giant hole that we dug for ourselves. You know what I'm saying? And that might mean leaving one of the most expensive overtaxed places in the United States, if not the. Because your debt stays the same no matter where you live, but if you can get your double your income and go to a cheaper cost living area and then throw 10 grand a month of your debt, now we have a fighting chance to get this done less than five years. But you're right, this is a huge math problem. The only way out is increasing your income. It's the only variable we can control right now. Yeah, so let's I'm trying to grow my business and my my job, my day job doesn't pay like as much as I wish it did, but I do have the flexibility to be able to work and grow my business and do my marketing. But I have done saying you don't have the luxury of flexibility right now because like you're y'all make a good a good income, but and I say this lovingly y'all broke, you don't have enough money to pay the bills that you'll have already incurred. Hang on the line, Kyle, we're going to send you every dollar the premium version. You said you were struggling to figure out the debt snowball piece and all the interest. That will lay it all out for you and show you the true numbers and hopefully that gives you a semblance of hope as you guys get radical. If you've ever thought I don't even know where to start with life insurance, you're not alone. And that's exactly why I recommend Xander insurance because the insurance world will throw everything at you, confusing words and add-ons like writers, whole life crap called an investment, return of premium and it's all total junk. And most of that confusion you feel is by design. When you're confused, you make bad decisions, expensive decisions, but Xander doesn't play that game. They cut through the noise and help you get simple, affordable term life insurance that actually does what it's supposed to do, protect your family. 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Stop worrying and get it handled the right way. Call 800-356-4282 or go to zander.com. That's zander.com. (upbeat music) - Michael is in Miami up next. Michael, welcome to the Ramsey Show. - Thank you very much. - Sure, for taking my call. - Absolutely, what's going on? What's up, brother? - Hey, how are you? So today I'm calling because I find myself in a bit of a head of my life. I have about $35,000 in debt, about $33,000 in private so-fi loans and about $2,000 in credit cards. Right now my annual working income is about $38,000 on the low end and I have two jobs currently. Retail associate full-time and I'm an Army reservist part-time. - Okay, what are you doing in retail? - Hi, it's Felgund. - Okay, did you get a degree? Was there any education? - Right now I am currently taking about a classes semester towards my business degree and I'm also doing a minor in data analysis. - What are you gonna do with those? - I plan on getting further into firearms industry more on the administrative side so I can earn more income. - Okay, so that's the goal. Is you wanna stay in the firearms world but work in a corporate sort of environment? - Exactly. - Is there a different path in the one you have right now which is just working retail? - Is there a different path? I, but potentially becoming an officer in the military after I get my bachelor's degree, most likely on the reserves are national guard side so I can continue that full time 'cause I do enjoy that quite a bit. It's a good get away from everything else. But I'm currently a single bad. I'm a wife and I, we separated almost a year ago. So right now a lot of things are going on and I'm kinda pulling up my bootstraps and I'm putting my army help it on and just trying to keep me praying to have faith. - So George is gonna walk you through a plan, okay? But I want you to hear me say this. I remember back in the day when I used to train Jiu Jitsu with a bunch of dudes and we used to have a drill which was essentially your stuck. Your stuck for the rest of this round, the rest of this time period and the drill was literally protect yourself until this thing is over, until the bell rings and you can reset. And you probably run drills, I've never been in the military but you've probably run drills where you are under fire and you simply have to survive until they run out of bullets. - Fair? - Fair. - Okay, I want you to keep that mindset right now 'cause you haven't been beaten, you haven't lost, you're just in a bad season and it's winter right now. You got the coats out, you got long johns on and your heat's out, it's miserable but spring is coming, okay? - Absolutely. - I don't want you to remember George and I tell you, there's a light coming and it's not a train, man. You worked too hard, you're too smart, you got a vision for your future and you're doing what I think is the most important thing which is putting your kid at the top of your priority list. That tells me you're a good man, okay? - Thank you. - Same team? - Same team, absolutely, just trying to do my best. - All right. - So are you doing a monthly budget right now? What's actually coming in every month? Is it $2,500? - About $2,500 to about $2,800 at the moment, maybe a little bit more with my army income and I make a tiny bit of commission for my current job. So most of it's going towards my current credit cards. I'm using the death snowball at the moment. I have about, I've already made my savings, my emergency fund and-- - You got only $2,000 credit card. - What's your custody arrangement? - Custody arrangement, we do not have one. We are not officially legally separated. We are simply on sort of a break, essentially. - So who's keeping the kid? - We're both in the same house. We just played in separate rooms. We have separate finances and that sort of thing. - Okay, I'm going to be willing to bet all the money I have that is the epicenter of the chaos and it just radiates from there. - It does, it does. - Listen, listen, you have to have the courage to take whatever the next right step there is. - Absolutely. - Because you're living, your situation's not good. It's not good for you, it's especially not good for that kid. It's not good for your wife, it's not good for anybody. - No. - We have to make some grown-up decisions and not just keep punting the ball down the street, but we've got to make some grown-up decisions about what are we going to do? Well, we're going to legally separate, whether we're going to get divorced, we're going to be adults about this and we're going to take care of this kid because what you need is some margin and some space and you can only get that if you have peace. - Absolutely. - Okay. - I agree. - Are you cash flowing school? How are you paying for that? - Right now I'm using army tuition assistance and I am also, I also have some federal loans that are getting paid off by loan repayment to the military as well. I had originally joined the military to fulfill a lifelong dream of mine of serving in uniform and also to pay off those so-fi loans, which were originally selling me loans. I refinanced to get my parents off. We had originally co-signed together and I refinanced as a courtesy to them so that their credit wouldn't be impacted by those loans. - Well those so-fi loans are probably killing you. What's the interest rate on those? - The interest rate is about 9% right now so it's pretty rough. - So do you have any money left over at the end of the month if you got real serious and looked at every single dollar or are you just barely making it by? - I'm barely making it by right now. At the moment. - What's your rent? - Or mortgage. - My rent at the moment is about 776 personally. - What was that? - Yeah, what's your wife put into this deal? - The same, we're essentially roommates with a kid. - Okay. - Okay. - Man, well the one variable that can change your income and so my question is can you go do something full time that pays you more even if you keep this military stuff on the side? - I am working towards. I very much prefer not to leave my current job. I enjoy it quite a bit. My solution was to probably find a third job that's a little bit more flexible. - What does it pay the retail one? - The retail one, it's 19 per hour plus commission. - Okay. And can you make any more income on the side with the hours you have? - I have, with the hours that I have, yes. I worked 10 hour days, four days a week, and so I have those, I have three days that I could potentially currently working on getting a third job that I'm just finding flexibility to do so that's, it's a little bit different when you have a kid unfortunately. - It is, but Michael, I'm hearing you, brother, I get you love the job and I get that you like the industry, but I feel like I'm reaching my hand out to pull up a guy out of the water who's drowning and he's like, no, no, no, no, no, no, no, no, no, I like the temperature. - Right, let me check. - And if, for 18 months, for 24 months, you got out of there and you were an assistant manager at Starbucks and doubled your income, like future you would think you for stepping out of this for a minute and getting back into it. And by the way, that time won't be wasted either, right? Or going to work with a construction crew and making 25 bucks, I don't know what the thing is for you, I just know you're drowning and the water feels warm and so you don't want to get out and you're talking to two guys, you're listening to you, you're a good man and you work hard, but you're trapped by circumstances. Unfortunately that you directly are choosing. - You got him saying that way. - So enjoyment right now is the luxury. That's for future Michael one day when he has some peace, when he's got some margin right now, it is sacrifice, it's hustle. And so even if that means you pause school for a season to clean this up, I'm okay with that. 'Cause I don't know at the end of, you know, you getting the degree that they're magically gonna hand you a corporate job in the firearms industry. - And you're trying to do a bunch of things all at once. You're trying to like figure out a, a, a, a, a, a, a marriage and an ash, you're trying to figure out how to be a, a, potentially a single dad, plus go to school, plus be in the reserves, plus work a full-time job, like you're trying to do everything all at the same time. And so picking one or two or three things that you can do and just get after it, man. (laughing) - That's all I know how to do is get after it, but, - I know, but you're getting after it but you're swimming in circles, right? - If I waved a magic wand, how long would it take for you to get dead free? - To get dead free at the moment. - Two years? - No, no, it would probably take me a lot longer. - I'm saying if I could wave the magic wand, if you're like, man, I wanna get dead at a debt in this amount of time. - No, I would like to be at a debt in the next two years. - Boom. Okay, now we have a number. See how much closer we got to facts? Now we have a goal. 35,000 paid off in 24 months. That's about 1500 a month. Now you have a number to go after. If I can make an extra 1500 a month by working my tail off, I throw all of that to the debt I'm done in two years. - Or quitting my current job and getting a new one, or working Friday, Saturday, Sunday, whatever you gotta do there. - So that's what you're, you're gonna solve for. Instead of just, man, I don't know how to squeeze more out of the budget. You can't. You need to make more and then throw all of that extra at the debt. And John's right, this is gonna be so much harder to do when you're going through a life crisis in a storm right now. So we've gotta take the right next step there, get the income up, and I hope you're that free in two years, my friend.
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That's guardianlit.com/ramsy or click the link in the description. It's any advertising. Results may vary. Go to guardianlit. Big week around here at Ramsey Solutions, John Delone's brand new book Building the Marriage You Want is officially available for pre-order. You can get it. John's book addresses one of the biggest myths couples believe that if your marriage feels hard, it must be broken, and that is a lie. And so we wrote this book, Building the Marriage You Want, explains why marriage can feel so hard, why yours still matters, and what you can do to make it great. And John, as much as he is theoretical and up in the clouds, he's so practical too. He's going to give you practical tools to help you reconnect and build a stronger marriage. And John, you guys threw in a whole lot in here. You can get the enhanced audio book with the pre-order for free, Early Access to the eBook delivered two weeks early, and an exclusive video, Dr. John Delone on Connected Communication, all for $24.99, and it is read by the author if you're wondering, that audio book. Here's the truth about pre-orders. Pre-orders are quite honestly you helping me out. It helps the publishing industry, it helps the retailers, it helps a whole bunch of things, and I understand right now, like, hey, send me $25, and in a few months I'm going to mail your book. So I get that, I get the ask, I get the, I don't have time for that, it's not in the bunch, I get all that. But it is a gift for folks to pre-order because it just helps so much more gas in the engine that is getting the book out to as many people as possible. And if you're going to get it anyway, you can get it and have it there. We'll send you a downloadable thing that you can print out and wrap for Christmas or whatever so you can let somebody know. And then the book will come in January, and then you'll basically get credit for two gifts. It's kind of awesome. Got. Thank you for that. All right. You can get it ramsyslution.com/store building, the marriage you want. Miguel is in Los Angeles up next. Miguel, welcome to the show. Hi. How are you? Very good. We're doing great. What's going on with you? All right. Perfect. So my question is, let me go from up and trying to discern the future. And so my question for you guys is, should I propose and get married before finishing baby step two or after finishing baby step two? I want to ask you about this, discerning the future. So deep. Do you have like a crystal ball? What are y'all doing this? Prayer. Um, we're asking the Lord for guidance and then talking to different people and seeing what the Lord is saying. Sounds like he sent you to two random podcast. I love it. You're lucky day. You're lucky day. Miguel, you're lucky day. So how long has been together? I have been together 13 months now. Okay. You were debt-free today. Would you go ahead and propose? Oh, definitely. You do it. What are you doing? You already have the ring? I do not have the ring yet. No. Okay. What's that going to cost? How fancy is she? Uh, she's not super super fast. We have a place to go. Um, she is. She went ring shopping and the ring she wanted. I think cost about maybe like 1500. Listen, girls don't even like rings anymore. They like high fives. Give her a, uh, actually I'm looking at terrible advice. She is, I'm blinded by how big her ring is. So I was wrong on that ago. So how much money do you have right now? Uh, saved up, yeah, uh, just the 1000, um, maybe step one emergency fund. Okay. How long would it take you to save up another 1500? Um, I can probably do it, um, no more than three months, but even less. I just started, um, over each this week. On top of your full time job? Yes. 9,000. 9,000. What kind of debt is that? A car. Okay. What's the car worth? Uh, probably like 5,000 or less. Okay. Well, you're telling me you have about 500 bucks in margin right now every month without your extra. Uh, job. Yeah. Yeah. My minimum of my car is 450 and I have about 500 in margin every month. Okay. So my math on that, even if you get this ring beyond that, it's still going to take you 18 months to knock out nine grand in debt. That kind of sucks, right? Yeah. So if we can up this income, knock out the debt before we're married, that'd be a cool goal and cash flow of the wedding. Are you guys going to be paying for the wedding yourselves? Um, most likely, though, we haven't had that conversation with, um, mom and dad yet on either side. Okay. I've either right now we're planning ourselves, nothing super fancy. We, I think we talked about briefly with maybe a $10,000 or even less. I do work at a church so that helps significantly. Hey, all right. How much do you make of this church, McGill? Um, before taxes, uh, I think my farm raster is at 45 after taxes make 40 or a little less. And how old are you two? I am 30. She is 23. Okay. What does she do for work? Uh, she does, um, um, ABA, she works with children and autism. Awesome. Cool. And she's going to be the breadwinner for a while if y'all keep married. For a little bit of it, yes, yes, yes. Are you living on your own right now? I am not living on my own. Um, I currently live with my parents and my client was through, I just had the guy that left him without, but now I'm looking into the possibility of marriage and just going straight into that. Okay. Have you done a budget to see if you guys can actually live together once you're married and rent somewhere if it's expensive in your area? Yeah. Actually, two weeks ago, um, we decided every month, we're going to start looking at our monthly expenses to kind of compare and see what we're at. So two weeks ago, we had like a mock budget of, as if we were married, um, and it, it, it, it is a, a little hard, um, but I know we can cut on things. I know a big thing that I personally been working on, I just, like eating out, um, I've been struggling a lot with just, um, being overweight, I've lost 61 pounds, so I'm trying to cut on eating out. Excellent. And I know that plays a lot. Thank you. Thank you. Um, yeah. I know that plays a big part in, um, money spending and also, but also my health. Can I challenge you because I love you McGill? Yeah. I want to see you get fanatical. I'm going to say this, I'm going to say, I'm saying it harsh on purpose just to be provocative, is that cool? Yeah. Okay. You're a 30 year old man living with his mom, making $40,000 a year in California, in California. Yeah. I would, I would have a hard conversation with my daughter if she told me that she was going to marry, um, says nothing about your character, but it tells me a lot about drive, it tells me a lot about, um, priorities, okay? Now, I know you're being a minister and I know you're taking a significant pay cut to do that because it's a, it's a values latent thing. I totally get that, but I want to see you get fanatical about getting under your own two feet. You've lost 61 pounds, bro. That means you've been keeping your promises to yourself for a long time and I'm so proud of you. I would hug you if you were sitting here, okay? But I want you to step outside of the little cocoon you've built for yourself, which is I can, I can work here and I love this place. It's comfortable. I know everybody and they're going to pay me barely, barely enough to eat in California and to do so. I'm going to be a 30 year old man living with his mom. I want to see you transform in front of the mirror as you transform physically, which you spiritually transform in front of the mirror and stand up and say, I'm going to be a guy's guy's own place who's making enough to provide for myself and if my new wife wants to stay at home one day, I'm going to be able to provide. I want you to get fanatical about that vision of yourself, you know what I'm saying, because right now you're thinking small ball, which is how do I scrape together enough nickels to get a $15 ring, which is awesome. I love rings that aren't crazy expensive and how do I pay off $9,000 over a year and a half or two years? I want you to think bigger than that. Yes. I know exactly what you're saying. Okay. I mean, you've proven it to yourself. You can light the fire and get going. I want to see you get fanatical about the kind of man you're going to become and create this world for this wife of yours to co-create with you once you're married. Do you think you can make us a promise that if you go and save up for this ring, you're not going to eat out until after you're dead free?
I can make that promise. - Whoa. - Dude, that's a, you just promised you front of America. If you eat out, even go to RVs, you're gonna stroke my lightning. Probably not, but I just made that up, but there you go. - But that, I like a little bit of a dangling carrot there. And I think if you go, man, this is that important to me that I'm willing to sacrifice over here to get this other thing that I want, which is marrying this wonderful woman. I'm willing to sacrifice financially and willing to sacrifice to lose weight and hit my other goals. I think you're gonna hit it 'cause you're a guy who, once he sets a goal, he's gonna stick to it. - I have to sacrifice the current comfortable job I have. I have to sacrifice my current vision for my life and this job I want to have as a minister one day because I dug myself a hole. And so I'm gonna get fanatical about getting out of it. And we're gonna go from there. 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If your revenue is at least seven figures, try NetSuite Next for free at NetSuite.com/rams. Or click the link in the description. Ramsey Solution asked you what's going on, Alex? Hey guys, thanks so much for taking a few minutes of your day for me today. My question is basically, I was affected by a corporate layoff after about a decade at my company. And I'm scared. And I don't really know where to go from here. And I just want to make sure I'm doing the right things to help ensure that my life and I future is not tremendously derailed because of this. We'll talk about the finance part, but I want to shout you out and tell you I'm proud of you for saying the words I'm scared. Most men don't have the courage and the strength to say that. Thank you. It's awesome. That actually will help you regulate what you do next, which is important. And also, there's some psychological data out about the type of job loss you've had that you've experienced. Your body feels it as though it's a death. That's how heavy the grief is. And so I don't want you just to blow by this. I lost my job and I got to move on. Like, this is a heavy, heavy loss. Probably feel betrayal, probably feel angry, probably feel all sorts of things. All those things are right and good, man. Okay. I think that what lasts through all five stages of grief, six times a day I found out. Well, you'll find it coming out later when you get a new job and you're doing better than you were, but then your supervisor says, "Hey, I want to meet with you at four o'clock and all of a sudden your body will go to Defcon 1," right? And like, you'll process this for years. And that's okay. That's normal and that's natural. What matters is you being able to say the words, "I'm scared. I'm going to get some support and some help from people and then I'm going to go do the next right thing." Man, that's the path, brother. So I'm proud of you. So what's your financial situation right now? Abs. And you get a severance package. Like, what's your debt load? Tell us, give me a painting picture here. Yes, sir. So all things considered. I do consider myself pretty fortunate. Because of longevity at the company, my severance is about six or seven months. They are offering career coaching in the bike, which I've already started to engage with those resources. My wife and I are in a pretty good spot. In terms of debt could be better, could be worse. I have about 10,000 student loans. She has about the same. Other than that, our lane monthly liabilities outside of our mortgage are her car payment and standard utilities and carceries and things like that. What's her car loan? What's left on it? It's a lease. It's about 300 a month. And it's got another year on it. That's our primary vehicle. It's, you know, she's got a longer commute to work. And, you know, living in this area, you need something that can handle all weather. Because doing green will throw every season at you in a single week. Well, isn't at least the worst way to do that? Because they'll nickel and dime you for going over your mileage. She's got a long commute. Yeah, we, you know, I've listened to the show enough to know how you guys feel about leases, how I'm not too surprised to hear you say that. I'm just saying, if it's further weather, I don't buy that. I think we just wanted a nicer car to have a nicer car. And byproduct, it'll get her through that commute. But not they're here and over there. But I am from that area. So I feel you. It is some rough terrain out there. So you've got the car loan, the two student loans. How much do you guys currently have in savings? We probably have about 70 to 80,000. And then it could liquidate a little bit more. Why do you have 80 grand in savings? I mean, not in savings. I mean, some of that's in like money market CDs and stuff like that. But you're saying it's liquid. It's not retirement money. Correct retirement savings would be a much bigger number. So what is three to six months of expenses for you guys? Three to six months. I'm actually looking at my little spreadsheet here that we keep to keep track of these things. 36 months of our expenses will do the high end of that. Would be about 50,000. So we have that emergency funds. And then we've got that, you know, a little bit of extra cushion. So you could pay off all of the student loans today and probably buy out the lease and still have a full emergency fund left over. And then a six months. Half a year salary check coming your way. It's paid out as continual. And is your wife working? She is, yes. So technically you could double dip for six months. That's the ideal. That's why I'm sitting here looking at job postings and working on my resume while I was waiting to talk to you guys. I would love to see you getting on the phone and talking to real people and having cups of coffee with folks. Yeah. I've got networking conversations lined up with former colleagues and various connections over the next couple of weeks. Excellent. I'm not, I'm not one to rest on my laurels. Yeah, I got that. I got that. I just don't want often people sit down and they make a fancy resume and they use one of the AI tools, LLM tools and they make a fancy resume and they send it out to a million people and they never hear back and then they're like, oh, nobody wants me. I applied to 4,000 jobs. Right. Nobody, nobody hires like that. Almost every job is, do you know somebody that will vouch for you? And so, yeah, getting on the phone and going out and having more cups of coffee than your digestive system can handle. That's the path. Right. But George, tell me if I'm wrong, rather you're in the best possible situation, I can imagine a guy in your situation finding himself. Like you keep saying you're fortunate. I want to say you've planned for this exact moment. So, consciously, it seems like it. Yeah. What was the 7080 grand earmarked for? It's just that fund that savings. It just sort of kind of built up over time and we both had been saving for our time and separately and it just kind of happened. We're both pretty attentive to what we're bringing in and how our finances look. But what was the plan for the student loans and the lease when you have all this money on the sidelines? I'll take that as there was no plan. I mean, you know, not specifically, you know, let me ask you something. What are you extra at them? But what are you earning on your CD? That one is a pretty existing one from Hershey. I think it's just a couple of percent. We'd have to double check on that. And what are you paying out on your student loans? My student loans are the industry.
right? Yeah. Yeah. Highest interest rate that I have on mine is about four and a half percent. Okay. There's no way you're making that on the CD. And so every every every month, every minute that that money sits in the CD, you're actually your net worth is go you're losing not say your net worth is going down, but you're losing money. Yeah. So regardless of the job loss, if you just called in and said, Hey, I've got 20,000 student loans. I've got this car lease and I have 80 grand. We would tell you, dude, pay off the loans yesterday and maybe even do a buyout on the lease if she likes the car. And it's a reasonable part of your income. It sounds like you guys had a great household income. Was it six figures? Yeah. Okay. And tell me about the 16 grand of month, 17 grand a month on expenses. I think that was maybe you might have missed heard on that. But the monthly expenses were about 8,000 a month. Okay. Oh, six months. My bad. I thought you said three months. That's my fault. Yeah. Okay. So 8,000 bucks a month times six is about 50. Got you. Okay. Had how much does she bring home a month? Her monthly net is about 6,000 and before I lost my job, mine was 75 hundred. Fantastic. So you only need two grand of your severance each month to float the bills. Because you said expenses are 8, she brings home six. Yeah. And if you get rid of those two loans, that gives you even more cushion, doesn't it? Yeah. Actually, I guess this kind of gets to my to another question that I had because I know a lot of times I hear you guys and gave and Rachel say, you know, when an emergency hits or when something like this happens, you know, hold on to your good storm mode your savings. Yeah. Go to store. Well, you're beyond storm mode. Most people in baby step two are doing it the Ramsey way and they got a thousand bucks to their name. You got $80,000 plus a seven month severance plus a second income plus a full emergency. You're not going to get permission from me to hang on to this debt any longer. Let this be a wake-up call that if you want true peace in your life, whatever comes your way, don't know anyone money and have money in the bank and be building wealth of the future and live on less new make. And you guys have done a great job, but I would just finish the job and get rid of these loans once and for all and never lease a car again. If you're living like no one else with your money, you're probably being smart with your entertainment choices too. And the truth is finding entertainment that's high quality and the lines with their values is not easy. That's where Angel comes in. They make movies that check all the boxes, values driven, quality, and as I'll get to in a minute, affordable. And it's why I'm excited to see Angel's latest movie Angel in the Bad Man in theaters now. It's a classic western with a big name cast. 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Thank you for taking my call a long time. Listener, I appreciate the show a lot. So yeah, I'm just right now I'm in 1.1 million in debt. Whoa. Just looking for some advice to see how to get through. Is this business debt? No, it's two mortgages. Okay. No consumer debt. Yeah, kind of standing under water. No, so one of the houses was my childhood house, which I, after a long series of messy 2025, I ended up becoming the owner of. You bought it off or did you just acquire the mortgage and refinance? I acquired the mortgage and refinance. So there's a half a million on that home. That money went towards paying off the original HELOC on it of a 147. My mother ended up surprising me with some credit card debt and a personal loan totaling about 103,000. Wait, that was in your name? No, I heard my mother's name. Well, how did you get surprised with it? What does that have to do with you? She never told me about it. It's like a cultural aspect where we have to take care of our parents and. No, I'm calling BS on that. I don't throw 103 grand at my kid and say, "Well, it's in the Bible, bud. You know our culture." Man. That's crazy. So what's this house worth? About eight. Okay. Why isn't it on the market right now? It's my childhood home and the original plan that I wanted to have for was because it's a two-family home. My mother currently lives in it, but she'll be moving in with me and my wife soon. That's just the other mortgage. That's the primary residence from my wife and I, which is another two-family home, which currently generates us 3,000 in rent every month from our tenants. So you've already got this figured out. How can we help, man? I'm just trying to see if I can get to saw so many any advice. I mean, the advice I would give you, George, if I'm wrong is I would sell your childhood home and who is living in it? Right now, my mother who's going to be living with us. Yeah, so she's about to move in with you. Then you put her on the market. What's wrong with that? And then I would take, didn't I would leave you with $500,000 left in mortgage debt and then I would take the 200 that you just cleared and I would put that towards your house and suddenly you went from 1.1 to $300,000 a regular mortgage. Actually a great mortgage for New York and then you're off to the races. That's out there. Or I would sell my primary home and move into my childhood. What's the goal with this childhood home? Are you going to keep it for just sentimental value? So I primarily, but then also I wanted to keep it because it generates about, it has the ability to generate $7,000 a month. So I wanted to keep that and grow a financial portfolio of my wife, which was our original plan when we first got married. But you're saying you're stressed about this debt because you still have to service $1.1 million in debt every single month. So what does that cost? There's a $4,000 and 64, so about 10K a month. Okay. And what do you make outside of this real estate? 80. 80K a month? Sorry, a month about four. Okay. So you make four K a month and does your wife work outside the home? Yes. Okay. How much does she bring in? About 130. So is that take home pay like six grand? Roughly maybe. Yeah. Okay. So you're bracely bringing home 10K a month and just the mortgages alone are 10K a month if no one's renting is where you're telling me. Yeah. That's a lot of risk. All it takes is some vacancy, a repair issue, a bad tenant who won't pay and all of a sudden you're going to get four closed on. Yeah. So you're not in a position to be a real estate guru quite yet. Why isn't somebody living in the other side of their your dual family home that your mom's in? So in the two family home there is somebody currently living there which we get about 3,000 a month from. Okay. And my mother is the other occupant of that home. What about your home? Is somebody else sharing your home? Yeah. My wife and I have one unit and we're currently renting out the other unit. But then mom's about to move into that one? Yeah. So you're not going to make anything from that one? No, no, sorry. She's not moving into the other unit. She's moving in the same unit with my wife and I. Got it. Okay. And you'll continue to rent the other side for three grand, correct, which brings your take home paid is somewhere around 12 or something. Yeah. Okay. I would crunch the numbers to make sure you guys are clear on on what this budget is going to take each month. But I still would not keep the child at home. Because first it was well, it's my child at home. Then it became well, it'll cashflow seven grand a month while strangers destroy it. So it can't be both. It can't be sentimental and also it's a money making scheme. Not to mention the air you got two air conditioners. She got multiple bathrooms. You've got like two ovens, two kitchens. It's only going to get more expensive. Yeah, man. If you came to being said, I got I got 500 grand and I can buy right to check for duplex here in New York and cat. I'd be I'll be all for it. I go for it. I mean, imagine waking up tomorrow and all you have is three or four hundred thousand dollars left on your primary mortgage. Yeah. And you still have your
You're 12k coming in between what your other side rents forward and both of your incomes. That feels a lot more peaceful to me. I'm just saying, if I was in your shoes, I would sell that other home. It sounds like you're not wanting to do that. You're wanting a different scheme to pay these off. I don't know. - What's your plan? I mean, you know who we are. I mean, you knew we were going to say this. What's your plan? - So originally my entire thought process was I would, so I refinanced my childhood home and got 500,000 from it, mainly because I needed to have my mom's death so she can come into my home with my wife and I 'cause we're trying to have children. So she'd be deaf for you. I wouldn't have to deal with that. - How was your mom going to live? Do you have to fund her life? - No, no. - She has her own income. - We don't have her. - She has her own income and then she's gonna retire in about a year or so and she'll be living off of her self-security. - That's enough. 'Cause it sounds like she went 100 grand into debt while working. - Yeah, I had a long conversation with her and we went through a plan of how I'd be monitoring her finances and she's cutting up every credit card once it's paid off. - How big is this two family home that you can have your mom move in plus start having kids? - So it's a two bedroom with an unfinished basement which we're gonna currently convert into like an in-law suite. - With all the money. - How much do you have kind of savings? - So right now I have about 100 and 3000 sitting in a brokerage account. - And you're gonna cast side out to do the remodel? - No, no, and I also have 20,000 in my savings which is what I was gonna use for some heavy renovations on the basement and some rental in the childhood home. - 20 grand, I don't think it's gonna get you. - I think you're gonna have to cash out part of this brokerage to make it happen. - Guarantee, you've got all of it. - You got so much flying around right now with mom moving in and you wanna have a kid create some peace in your life and simplicity. Get rid of the childhood home, use the equity user savings to create some actual foundation that you can stand on. (upbeat music) - When you take your car to the shop, you're probably thinking two things. How much is this going to cost me and is it going to get done right? What you need is a mechanic who will give you transparent information so you can make the best decision for your car and your wallet. Christian Brothers Automotive is the official auto repair shop of the Ramsey show because you can trust them to take care of your vehicle the right way. Their digital vehicle inspections let you see exactly what their technicians see giving you confidence on which repairs are urgent and which ones can wait. Plus every repair is backed by their nice difference warranty. Three years or 36,000 miles with a guarantee like that you can walk away knowing that your car and your wallet are taken care of. Schedule your service today and get 10% off your visit at cbac.com/ramsey or click the link in the description. That's cbac.com/ramsey. 10% off up to a $250 value, see store for details. (upbeat music) - Edgar's up next in Boston, Massachusetts. What's going on, Edgar? - Hey, how you guys doing? - Doing great, how can we help you? - So I got a quick question and I'm just, and I just kind of want some advice for it. I was wondering if I should stop retirement contributions to see for a down payment a little faster than what I'm doing now. - Great question, man. - I love it. So you're in baby step three B, you're out of debt. You've got the emergency fund and you're sort of going, do I save, how much should I invest? Do you have an employer match? - I do not, but I do have a pension. - Okay, how much are you currently investing per month? - About 1200. - Okay, and how soon is this house purchase going to happen? Play it out if you keep investing. When would you have the down payment? If you stopped all investing, when would you have the down payment? That gives us sort of the spectrum. 22 months if I keep investing around 16 months if I stop. - Okay, cool. So that helps us get some facts instead of just the emotions around it. And are you married? - Yep. - Okay, what does your spouse think about this? Do they have more urgency toward getting into a house? - Yeah, yeah, she wants out of the apartment. - When's your lease up? - Well, right now we live with her parents in a in-law. Okay, the lease is never up. It might end abruptly, you never know. Okay, so that makes sense why she wants out urgently. I'm with you on that. Are you guys going to be on track for retirement if you pause investing for a couple months to get this down payment saved? - I did, I did the retirement calculator on the website and I did it two years from now. So I think it's like 27 years and it was on track at 10%. I was a little like 3.4 million. - That'll do. - I think we're 60. - That's fantastic. - So I was just thinking I was like maybe you know, 18 months without retirement I think would not be that bad. - Okay, so if you pause investing it'll take you 16 months and then you can get back to investing 15% for the rest of your lives. That's what you're telling me. - Yep, yep. - I like this plan. You know what I believe in? - Okay, cool. - If you said, hey, let's do a stretch goal. I like a goal that scares me a little bit. So what if you said 12 months from now, we're gonna have enough and that might mean cutting the budget way down. I mean, if you're living with family, I'm guessing your expenses aren't that high. - No, it's about like 50, 400 a month. - For your total defense. - Yeah, yeah. And that's including food, gas, for the cars, everything. - And what do you guys take home? 12, 1200 a month. - Fantastic. And so if you cut down investing, you take even more home and you'd suck all of that away in a high yield savings account. - Yep, yep. - Wonderful. What's the total down payment? I'm curious. What's the goal? - 100,000 for around this area. - Awesome. - What's the house cost? - Probably $5,600,000. - Okay, so about a half million dollar house? - Yeah, probably. - Okay. - What kind of, what area of Massachusetts is this? - Around East Coast, so like up near the Hampshire. - Okay, cool. - It's a kind of North Shore area. All right, yeah, I like this plan. You guys have crushed it. You have a great income. You've kept your expenses low. You're gonna be on track for retirement. So that's the kind of thought process I go through is getting all the numbers down on paper to go. Okay, it's 22 months versus 16 months. We're gonna be okay. Posing investing for those six months. - Okay, all right. - Way to go, man. That's fantastic. - Thank you, I appreciate it. - And for whatever it's worth, brother, I did this exact thing. - Yep. - It's a struggle for people who want to do good, they're both really good things. They're both awesome goals. And you're like, oh, the power of compound growth. Ah, home ownership. - Yeah, I just got home and haven't looked back. So get out of your parents' house. You're in-laws' house and it's quick as possible. - And a good reminder, you're in that babysept 3B zone. We always say, if it's gonna take you longer than two years to save the down payment, you can go ahead and invest some. You don't wanna go without investing for years. - Maybe just take the match. - Yeah, maybe some people go just take the match, three or four or five percent. But you can really go any from zero to 15% while you're saving up the down payment. And so that's what I was walking Edgar through is, just look at the timeline and go, yeah, that one feels a lot better. I'd rather be in a home 16 months from now and I can forego investing for a short period of time and get back at it. Great question. Mark is in New York up next. Mark, welcome to the show. - Hey, how's it going? Glad to be here. - We're happy to talk to you. - What's up? - So I'm in a bit of a pickle here. I don't know if I should quit my job or if I should continue doing what I'm doing as in working the full time job and my side thing that I do fixing cars. - Wow. Okay, how much have you made fixing cars in the last 12 months? - Or this year. - I would say this year, I would say somewhere around $67,000. - Total? - Yeah. - Okay. - Around there. - What do you make of your full time job? - Monthly, on average, I make around 3,600 after taxes. - Okay, and you're saying you would want to quit your job and go all in on fixing cars? - Well, my full time job is also fixing cars. - Oh. - So you want to like open your own shop? - Yeah, well, I would do mobile repair now. - Okay. - Is what I'm doing right now. But the reason why is because so much of my time goes to the full time job and I'm only making 3,600 and if I feel like, I feel like,
if I had more time to do the side business, I would probably be able to get more customers and also do a lot more repairs. - Does the idea of being HR and accounting and the guy doing the work, does that excite you for it to all fall in your shoulders? - It scares me, but it doesn't sound impossible. - Here's what I want you to make sure you don't do. I don't want you to do something based on a feeling. And you saying, "I feel like I could dot, dot, dot." I love it when people work in side hustles and the side hustle overwhelms their day job. - Well, you almost have to quit your day job. - Right, you're not at that position yet. I mean, you've brought 'em $7,000. And so even if you tripled it, you're at $21,000 for a year, right? You can't feed yourself with that. And so you're looking at having to five, six, seven, eight, X, your business. And so I would want to see you get to where every minute you get off of the, as soon as you clock out, you're driving to somebody's house and beginning this process. And maybe you're not doing full repairs, mobile repairs, but you're doing mobile oil changes. You're doing mobile tire changes. And you can, that way you can get in and out with customers quicker. And then you're all day Saturday, all day Sunday, and do that for a year, brother, before then you make this jump. Because you've got to learn about the business side of it, the marketing side, the customer review side, the person whose fender falls off after you fix it. And then they come, not after your boss, they come after you for like all that insurance, all that stuff, that's what you're walking into, saying I want to be a small business owner, which I'm a huge fan of. I just don't want to see you buy it off more than you can chew and end up right back in the same shop, just underwater, $50,000. - Yeah. - Well, do you have any debt right now? - Yeah, I do. That's what I was about to say. I have around $60, $400. - What kind of debt is that? - A couple of credit cards between me and my lady. - Is that a girlfriend? - We have a kid together. But yeah, I intend to marry her before the end of the year. - Okay. Is she working as well? - No. - Okay, so she's at home with the kiddo? - Yeah, with our son and my stepson. - Okay, so that puts even a little bit more pause. - Yeah, you 100% can't quit. You have two kids. - So you need some stability right now. 'Cause it's gonna add some pressure when didn't get many clients this month and one didn't pay and it's all on you. - And kid needs to go to the doctor. You might consider getting a job in another shop. - Yeah, I had a second job and wasn't in the best situation. And that's where they couldn't do a job. It just got a little risky. - Sure, no. - I'm saying maybe your primary job that sounds like it only pays you what, 48 or $50,000 a year. Is there another automotive shop? You could go ahead and do a job at 65 or 70 in and then do the side hustle and the side too. Maybe not, man, I'm just spitballing here. - Right now your side business brings in about 500 a month on average. We need to get that thing way closer to 3,600 before we jump ship completely. But I think you can do it over the long haul. I just wouldn't do it today. (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
[email protected]/RAMSI or click the link in the description. (upbeat music) - Paul is in Philadelphia up next. Paul, welcome to the RAMSI show. - Hi guys, thanks for taking a look all, I appreciate it. - Sure. - So, a little bit of a predicament, I guess maybe emotional and potentially, my in-laws have graciously gifted my wife and I $100,000 with the wishes that we, yes, very, very kind of. - What are the strings? - The wishes are that we install about 80 to $90,000 of solar panels on our roof to offset our utilities cost. - So they're buying you solar? - Exactly. - Okay. - Yeah. - What do they want after that? - And, that's it. And in the note that they discharging our solar panels and the solar panels, the solar panels, the solar panels and the solar panels, and in the note that they discharging with us was, obviously we don't have to uphold their wishes, but that's why the money was given to us. And so they said, "You do what you do with what we love to see you guys install." - Well, what is the obsession with you getting solar? - So they think it's all coming down? - Maybe. Possibly they have solar. And I think they, without getting political, they are, they want, they believe in renewable energy. - Sure, anyway. - Okay, that's what I was going to say. If this is there, like, "Hey, we'd love for you guys to sort of like live by these principles that we live by." - Or not even that. Like if my in-laws gave me said, "Hey, we want to buy all solar panels, I'd take that." - Yeah. - But my in-laws are awesome too. And they wouldn't then come back next week and be like, "Well, you know, since we gave you this." - What would you guys do with the money? - Well, that's where the, you know, I've been following y'all for a while, and I would love to put it towards, all towards our mortgage. - How much is left on the mortgage? - 700,000. - Woof. - That's a big mortgage. - Yeah. - You guys must have a fantastic income though. - Yeah, we make about 450. - Heck yeah. - Man. - And so it's, it's, we're obviously in a, we're, we're very lucky. And so I just want to do the right thing at the same time. I don't want to throw over $100,000 away. And so I'm, I'm looking for advice on. - Do I know them better than we do? - I'm more concerned about the, not that they, 'cause take it for what it is, they didn't give you $100,000. They offered to buy you solar panels for your big, fancy house. That's what they offered to do. I think the question before you is what, what relational strings are gonna come attached to this? That's my bigger concern. There are certain people in my family that I would not take a dime from because it would cost me my soul on the back end. And there's people in my family. I'd take a ton of money from 'cause they're awesome and generous and great, you know what I mean? And so, what relational cost will this incur? - Yeah, they're amazing. I don't, I think if we had a hard conversation with them, they would listen. I just, you know, there's so many other things I would, we could put towards our $5.29 we could. You know, solar panels would be 10 on the list, 12 on the list, you know? - Yeah, but you'll make half a million dollars a year. It's not like you're having to make big hard choices about, you know, what you're gonna, how y'all gonna eat, right? - No, we don't. Would this change the answer if we have to refinance in six years? Because we did a 15 year arm. - Oh, geez. - I don't know that it wouldn't matter all that much. I mean, with the money you guys are making, and are you throwing an extra at the mortgage right now? - Yeah, we are, about 1,500 extra a month. - Nice, so, you know, yeah. - Yeah, I mean, in the baby steps, if you're like, hey, I could attack baby step six or I could get solar, I would go mortgage. But again, it's Thanksgiving gonna be awkward when they went, hey, so what did you guys do with the money? We knocked, put a dent in our mortgage. - Yeah, now we only owe 600,000 instead of 700. - Right. - Hey, how are you only putting 1,500 bucks a month extra towards your mortgage when you make 450 grand a year? - We're also putting into other investments. Outside of retirement. - Outside of retirement. - Outside of retirement, yes, that's good. - So like 5.29s, a taxable brokerage account, all that stuff. - Mm-hmm, yep. - What else are you investing in? - The 5.29s, we have a brokerage account that we monthly deposit into, and then they allocate for us. - Our first day. - Our first day, 401K, Edward Jones. - Oh, okay. - How much is in that brokerage account? - 400.
Whoa, is that like a retire early fund? What's that about? Yes, I think so. Some of it we've been reserved on continuing investing in the 529s in part because maybe kids don't want to go to school. They know where we're going to be in 10 years and so we can do some of those funds today for sort of a flexible account that can cover any gaps and potentially help you guys, you know, create a bridge account if you wanted to retire early. So tell me if I'm nuts George. Paul, if I'm in your exact seat right this second, I would withdraw 100% of that brokerage account. Well, I wouldn't refund into my house actually because the rates are so ridiculous right now. But I would take all that money as soon as I could put it towards my house and get my mortgage. What I have, the balance so obnoxiously low and I would take my in-laws gift and get them with my life. Like you're over like complicating your world. You make a half a million dollars. You all make too much money to be this dress. You sound like his wife. But here's why I asked you what you're investing in. And dude, I am so like, like, I'm a jerk for how I'm judging you right now. You sound like a guy with schemes. And I was waiting for you to say, I've got money in crypto and I've got a closet full of beanie babies also. Like you sound like a guy who's like, you know, listen, listen, listen, like that guy. No, I'm very, like I said before I follow you guys with them. I'm very by the book. Okay. So I was wrong in my judgment. And I will apologize in front of America. I was wrong there. Okay. Okay. So if we're doing it by the book, you guys are investing 15% of your household income. And we're funding the retirement accounts first. We've run out of options there. Then we can move to non-retirement. That's 67 grand a year. Correct? Yeah. To beyond that, any extra money, let's put some of the kids 529s might be a couple hundred bucks a month. Then beyond that, let's put any extra toward the mortgage. And I would count that windfall of the hundred grand towards that. And maybe in the future, you guys get solar. But who knows how long you're going to live there? Yeah. Because you're not getting all that money back out of the house when you move. Solar is not going to ROI like that. So that's the other factor. Do you think George, if the grid goes down, this is going to be so much more value. It takes a long time to ROI on solar. Yeah. Even when you pay cash, 10 or 11 years. And so you might just say, hey, we don't know how long we're to be in this house. I don't know if I did a break even analysis. I don't know if it's going to make sense. So right now we're just focused on paying off the mortgage. Wait, hold on. I want to hear something you just said, would you say about 10 or 11 years, Paul? That's the break you've been for the solar. Oh, solar. Okay. Okay. You put 90 and you got it back out through savings. And now every dollar after that, you're sort of making the money. You guys are reading the wrong Reddit thread. You don't understand what's actually going on out there. You didn't listen to the guy who was selling the solar. You need to listen to darker podcasts, man. So for that reason, Paul, I would just say, hey, I appreciate it. And you might just straight up tell him, hey, we're going to use this on the mortgage for these reasons. We love the idea of solar. Right now it just doesn't make sense for our family and our goals. I'm going to disagree with George on this. John's doing solar. I would take the gift for what it was intended unless here's the big and less. If you could sit down with your father-in-law and your mother-in-law and say, look, I've got this money in a brokerage account with this 100 grand. I can pay my mortgage off. Yeah, that's not a bad idea. And if I gave you 100 grand and if I gave my daughter and her husband 100 grand because I wanted them to get solar panels because I never wanted them to have electric bill again. If I did that and they sat down and said, we were so grateful for this gift, but we could be completely 100% mortgage debt free. Then I would be like, dude, I'm in on that. I'm in on that. And that's only if there's no relational strengths to this deal. That's the part. We just can't know until we do it. I kind of like the excitement of it. Of them using it toward the mortgage and then just see how Thanksgiving goes. I just like having electricity when it all goes down. It's almost annual enrollment time and you wish you could save money on health care 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. Y'all 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. Our question of the day is brought to you by Ask Ramsey, your free AI money tool that provides personalized money answers based on Ramsey principles. Visit ramseysolutions.com/askramsey to check it out. All right. Today's question comes from Robin in the great state of Texas. Robin asks, "What's the best way to show our four adult children how to become millionaires? They're all independent, work, and they have their own homes. I sent them a link to the Ramsey investment calculator, but I don't know if they have tried it yet." Okay. When they visit us for Thanksgiving, I thought I could demonstrate the calculator for them and show how they can become millionaires by retirement. I've been accused of being too intrusive about their finances. Is there a better way to bring up this topic? That's an interesting one. I mean, as much as I love that calculator, I have not sent it unsolicited. I know. You all couldn't hear this, but George was whispering, "I wish this was my mom." Truly. I mean, she's a great mom, clearly. She wants a good thing and she's going about it in a way that is off-putting to them. Yes. Because they said, "Mom, we didn't ask you for financial advice. We just helped you fix your Wi-Fi and get back into your Netflix account, and now you're telling us how we can retire millionaires." So there's one issue. Is that it's unsolicited? That's some of the hardest advice to give. Well, if I back all the way out of this, I got to make some suppositions here because Robinson on the phone with us. But if you're the kind of mom that's going to take time during Thanksgiving with your adult kids who don't live with you, when they come to have a meal and you're going to pull a sheet down in the living room and be like, "Let me show you this." I've got a presentation. I've got a presentation for you. I can, my guess is they've lived with this their whole life. So yet again, you're coming to them saying, "You should be and you should be and y'all need to and why aren't y'all?" I can prove it. I can prove it. I can prove it. I can prove it. What the data says, there's some great research on this that if somebody is convicted about a thing and they don't like you and you come at them with facts, it weirdly actually emboldens their conviction in the wrong thing, right? So to me, the path here is show it to them. Be somebody that they would feel comfortable sitting down and talking about money with and versus trying to continually up the anti-enforce freedom, this information. Or to put another way when it comes to my friends or family and I've learned this the hard way because dude, I was the worst. I only answer questions that I'm asked and people know what I do for living. They, they like, I only answer questions that are asked because I've ruined too many dinner parties. I've made family events too uncomfortable. You try to interject. Oh God, I was the dude. I was the worst. Like, "Oh yeah, we y'all need to be." But I've had way more impact and my relationships have gotten deeper by just keeping my stupid mouth shut. And when somebody asks, they know I'm going to tell them the truth. I'll tell you what I think. But that to me seems like the path here. And Robin, it sounds like your heart and spirit are great. It sounds like they're awesome. But the point John's making, create an environment where they actually just naturally want to share and ask these questions. And they might start with you sharing your own story and asking questions. But just straight up telling them, "Hey, you should go do this thing." I think that's where it's going south. Here's what would be more convicting to me more so than a spreadsheet is somebody sitting down and saying, "Hey, I want to tell you what my life feels like at 65, 65, 65, however old Robin is. I don't have any pills, I don't have any payments, and I'm watching my friends struggle with their [BLANK_AUDIO]
I'm watching my friends struggle with job layoffs. I'm watching my friends struggle with the adoption of AI. And I want you to know I've got peace that like, and so if you ever are interested in that, like I would love to pass along to you. Like give me a embodied experience, not just a bunch of numbers, right? - And part of that might be, hey, I wanna give to the kids college funds. For all my kids, I wanna, every grain kid's gonna get 500 bucks in their 529 plan at Christmas. You show that example and now they wanna follow-- - Here's what you get to do with, like, yeah, 'cause like the finish line there, I wanna be a millionaire. - They may not care, that's not a goal they might have. - Not a goal for them, yeah. - It's a good question, a good discussion Robin, and I think your heart is in the right place. Wish you the best with that. Rebecca is in Houston, Texas, up next. Rebecca, welcome to town. - Hey, town. - What's up? - Hi there, thank you so much for making time for me. My question is, I feel like just kind of dumb. - You met me in George? - No dumb questions, only dumb answers. - We promise we're the dumbest people in this call. You're good, you're good. - Okay, well, just wait, okay, so back in 22, 22, I stopped paying all my credit cards. I haven't looked into it until right now. I think one of them was charged off to just zero. I don't know what that means. So my question was, I don't know what to do, and where a long time I thought, I'll just do chapter seven, but I don't know. How much do you owe? - It's just 17,000. - How much do you make? - It's hard to say 'cause I do freelance work, so it ranges from, let's say-- - What did you report on your taxes last year? - The, like, 35. - Okay, nothing like that. - Can I challenge a word you used? It's my trigger word. Just, it's just 17,000. - Okay. - I let you to feel like I'm 17,000 in debt, and I haven't even looked at it in four years, and it's in collections, and I'm getting mail. People are coming after me for this money. I want you to feel some urgency versus, yeah, I might start looking into it. 'Cause I'm not because I care about the credit card companies, but I care about Rebecca. And I think you have that same lack of urgency towards life, I'm guessing. - Yeah, that's the thing that happened there. - So what happened during this phase? It was happened in 2020. I just kind of stopped caring about a lot of things, including-- - So why do you care now? - Looking into the future might need my credit maybe in two years, so-- - For what? - I've been buying everything cash. I suppose buying land or a home or something like that. - Are you single? - I am dating my boyfriend, but we are not married. - Okay, so your goal is to buy land, or buy a home one day? - Yeah, ideally I wanted, obviously, to be with someone that could just do it. And I tag along, you know, like a man that has enough money. - Oh, okay, like a sugar daddy situation, where you're just along for the ride and they fund your land. That's what you said. - Not like that, I just, why did I mean it like that? I just meant like I hope that they had their life together, which I mean, he does, but-- - But all of the things you've told me, Rebecca, and I think this is what George is getting to, all the things you told me are that you have this kind of vague sense of how you kind of hope things might work out. - Yeah, for sure. - And what I want you to do is get a crystal clear, like 4K picture of what you want your life to be, where you want to live, what you want to be doing, when you wake up in the morning, what do you want the evenings to feel like, and reverse engineer that picture, and go get it. - Okay. - 'Cause I mean, George and I, we've spent years sitting with people having these conversations. I'm promising you right now that at the lack of intentionality with which you're approaching your money, your relationship, your home maybe, or land, or something, and I hope that you're gonna end up in a place you don't want to be. Or you're gonna end up saying, what I think is one of the most dreaded statements in the English language, this is just the way this is gonna be. - Yeah. - I want to give you agency to stand up and fight for your life. - Okay. - 'Cause it's yours. - Mm-hmm. - There's a zig-ziggled quote I love. He said, "If you aim at nothing, you'll hit it every time." And currently, our aim is pretty loose. It's sort of just toward the sky. And so, here's some homework for you that will help you crystalize this, like John said. Number one, jump onto this website, annualcreditreport.com, and pull your credit report from all three bureaus. That is the best way to get a clear picture on how much debt is owed, what is out there, what's in collections, then you can begin to make a plan. And the plan's gonna be, what debts are currently out there that aren't in collections. Okay, let's make sure we're current on those and we're working a plan to attack those. Then, all the ones that have been charged off that are in collections, let's make a plan to settle those and come up with a lump sum that we can throw at it. Let's say you owe seven grand on one of the cards, and you go, hey, I got three grand in cash. Will you take that and call it paid in full? And don't give them direct access to your checking account. So that's the process to take, to actually get out of this mess, but I don't want you to do all of this just to up your credit score. I want you to do it because you're done lacking intentionality in your life and you wanna start controlling it. You wanna start happening to your life instead of it happening to you. Hang on a line, I'm gonna send you a copy of my book Breaking Free from Broke. I hope you and your boyfriend read this thing and start making plans for the future that are crystal clear. (upbeat music) (upbeat music) Welcome back to the Ramsey show in the fair winds credit union studio. I'm George Campbell. Co-host is John Deloney. We're taking your calls at AAA825525. Michael is up next in New York City. What's going on Michael? - Hey John and George, thanks for taking my call. - Absolutely. What's up man? - Hey, so I just got to give you a little background. So I got married last year. My wife is from out of state. She has a property there and she's also a co-signer on a family member's loans or mom mortgage sorry for a mom's house. We got married, came to my state. We have a baby on the way and I'd like to purchase property but I don't wanna be on the hook for three mortgages. So I didn't know there was a way to separate those mortgages from each other. She has two and then I have mine. Does that make sense? - I'm confused while we're keeping all these properties. - I am too when we've talked about it but they don't seem to be going anywhere. - So her mom lives in a different city and your wife is on that mortgage and she's gonna stay on it? - Correct. - Okay and then you currently have a mortgage? - I do not. She has a property that she bought prior to us getting married. - Where is that? - It's currently being rented out out of state in Rhode Island. - And you guys are definitely keeping that? - I don't want to. She wants to. It's her first house. I think there's kind of an emotional attachment there. - It's not a first kiss. It's just a house. I mean, we're gonna be long distance landlords by default. - Correct. - So here's the thing, you already married? - Yes. - All right, so you've signed up for this. I would not as a husband or as a wife. I would not engage in another mortgage while this mess is going on. - Okay. - Because and George, if I'm wrong, do you know this way better than me? If she is just on the deed of her mom's house, that's one thing. If she co-signed for the mortgage, she's on the hook, brother. And if she had to co-sign, I mean, mom couldn't afford this house. - Right. - Which means she can't refinance out of it 'cause mom can't afford it on her own. - So either they have to sell that house and mom has to be realistic about her financial situation or she's gonna have to be prepared when mom can't make the payments that she's gonna have to cover the payments. - I got to. So, I mean, it's kind of like a standstill, I guess I would have to wait until that changes to. - Well, it's just, I mean, think about the, you can do whatever you want, you're a grown man, okay? I, the metric I use in my home is my wife and I solve for peace. And peace for me is having a whole bunch of guitars and hunting gear. That does not bring my wife peace. And so there's gonna be times we, like take one for the team, right? And that's all well and good. This is a big deal. And what I don't want you to do is to think I had this dream of buying a house and so I can just do away with math 'cause you're gonna have a very stressed out wife living in your home that y'all owe a mortgage on. - Yeah, yeah, no, I hear you. - And so if she's drawing a line and saying, that house is mine, not ours, it's mine, it will always be mine, I will never sell it. Okay, and you choose to live in that, you choose to choose to marry or you choose to be a product. Okay, cool, that's a choice you made. So any other anger, frustration, resentment you choose to have towards that decision you made is a choice for you to be miserable. Cool, then you get to say moving forward, I'm not comfortable engaging in a third mortgage with one or in or both of us in this house. And so we're gonna rent. And again, I want you to own that choice. Is her mom currently paying the mortgage on her own? - She is because it's so low, the mortgage rate. I think it was during COVID time where the interest rates were very low. - You're saying the payment is low? - The payment with, yes sir. - So why couldn't she qualify on her own with her income? - I think she got a low interest rate because my wife co-signed. If she didn't co-signed, I don't think she would have the same interest rate. - Okay, well my fear is mom can't pay for some reason. There's vacancy or the tenant stops paying in the other home. And now there's real stress in this marriage because I'm guessing at some point your money's combined. - That's the plan. - So you're kind of on the hook for these other mortgages even if your name isn't on it. - Right. - If it's our income. So that's the part I'm not sure your wife is seeing clearly is that you're getting dragged into this mess. What's her net profit on the property in Rhode Island each month? - I'm not sure each month. - Here's my bigger concern for you because she's on the phone. You're already married and you're saying like, yeah, I hope to get here one day. Like I want you to know everything about the household finances. And I want your wife to know everything about the household finances. Will she not participate with you? Does she have her life and she wants you to have yours and then y'all can have this little shared sliver in the middle of this Venn diagram? - I mean, that's how it's been playing out because of this right with the property and just other things. That's kind of how it's been playing out. So did she tell you before you guys got married? Hey, this is my house. So if I ever sell it, it's my money. What's that conversation been like? - No, no, it wasn't. I mean, I think there was more of a willingness to be open to it, to selling it. But after we got married and we spoke about it, it kind of changed. - Well, I think you guys need to come to Jesus' conversation not just about mortgages in real estate but just about our values with money as a family. - And combining our lives together. Are we gonna be two people who are roommates who run side by side and Venn know each other for dinner or are we gonna be a couple who builds this amazing thing together? We co-create this world. - Shared goals, shared wealth, shared vision. - Shared laughter, shared warmth, shared silliness, shared grief when one of your family members passes away. It's all about doing this thing called marriage together. And I've seen people start to have what I call proxy wars about, well, that's mine and that's this and I need my account. And I've seen that kind of ice cube melt when somebody says, I wanna do life with you. And that would be the place to start. People get stuck in the spreadsheets and they get stuck in the mine and yours and what really people wanna know is I wanna connect with you. That would be my move if I was in your case, brother. But I can't in good faith, George, you might disagree with me. I can't tell you to go get another mortgage with the opportunity that your household not you specifically, but your household would be responsible for the potential of three mortgages at the same time. That would not bring me peace in my home. - Sorry, man. - Sorry, I'm a man. - There's gonna be a conversation. I hope out of that, the byproduct is you know what? We do want simplicity. We do want some unity here. And then the byproduct is, all right, we gotta sell one or both of these properties. - And ask your wife this question. Tell me about what the home means to you. Tell me about your reluctance to sell it. I wanna learn more about you and get to know you as my wife. And you might uncover a deeper story there. (upbeat music) - People ask me all the time. George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the every dollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average every dollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download every dollar for free and start saving more money right now. (upbeat music) Everyone needs insurance, but it can be hard trying to find pros if you weren't just looking to make a buck and agents who know their stuff. Ramsey trusted insurance pros are vetted and coached to make sure they're market experts who have your best interests at heart. So check it out, go to ramseysolutions.com/coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent. Kelly is in Danbury, Connecticut. What's going on, Kelly? - Hi guys. I was one, I'm between baby step three and four. And I was wondering if I should pause baby step four to update my home. - Wow, are these needed updates? Or do you just kind of want? - I will say some of them are needed in the very near future and a lot of want because my home hasn't been updated in the '80s, I think. - Wow, okay, what is this going to cost? - You just said the '80s, that's my childhood. You just said the '80s, like it was a thousand years ago. - I know. - There's like cave dwelling drawings on the wall or something. - He hasn't been touched since, I don't know, God, the '80s. - It's got an old wood stove that we make all the food. - Exactly. - Are you married? - I am. - What's your household income? - It's about 200,000. - Fantastic. And where are you guys at with your emergency fund? Is it fully funded yet? - It's, I will say it's about four months. - Okay. And now you're saying, hey, before we move on to baby step four and invest 15%, should we instead use that cash to cash flow these home renovations? - Yes. - What does it look like to invest 15% and cash flow them? How much that slay down? - It would, it would take a long time to do the updates that we would like. - How much is it gonna cost total? - I haven't got an exact numbers, but I'm estimating maybe 20 to 30,000. - Okay. - Begin with. - And you guys make $200,000 with no debt to begin with. That was good. I'm just wondering, even if you did 15%, why would this take years to save up $20,000? - I think that we are enjoying the extra money right now. - Uh-huh. - So that's why we've been causing baby step four. - But you'd rather sacrifice retirement than the current enjoyment to do these renovations. - It feels like we haven't, we've put it on hold for so long and it just feels like now it seems like a good time. - What was the, how much debt did you pay off? - Throughout the year, probably 40,000. - Okay, and how old are you now? - 45. - 45, okay. So I, 1000% understand your frustration. I want you to consider the fun y'all really want to be having right now. Y'all had it in bits and pieces. You dripped it out over a period of years. - Yes. - And if you think of it in that way, my concern is that 65-year-old you looking back at 45-year-old you is going to do the exact same thing. Is going to choose a kitchen now, which by the way, a new kitchen is amazing and awesome and great and I hope you get one. Over 65-year-old you being able to pay your medical bills. - Yeah, yeah, that's my concern. - And y'all, you and your spouse have a history of, let's just do it now.
Let's do whatever the thing is, whether it's going out to E, going on vacation, whatever, let's just, by the car, let's just do it now and we'll pay for it later. And now you're about to, that problem is magnifying too. Let's just spend, and by the way, in a contractor can't sneeze at your house for $20,000. Like the rug will cost, not well, it shouldn't cost $20,000, unless you're in Georgia's house. But like the, like you're gonna spend 30, 40, 50 grand on this Renault, when you're all said and done, if not more, I want you to have done that and taking care of 65 year old you and your husband in the process. And it does, it slows it way down, and that stinks, man. - But you guys make an incredible income. So what are your monthly household expenses to cover everything? - Well, I was afraid you were gonna ask that, George. I have, we haven't been very good at budgeting. Like we used to be super good when we were paying down debt, but now lately, it's just, we haven't been. So if I looked at your bank account, I would show, it would show that you guys have been spending like 20, 30% more than before without really paying attention. - Probably. - 'Cause I'm worried, if you invested 15%, even after taxes and healthcare premiums, could you take home about 10 grand a month? That's my math. - So, can you say that again? - After, if you invest 15% of your income, your take home pay would be around 10 grand a month. Does that sound about right? - So, one five percent of our income would be, see, you know what, I don't know the numbers. - Well, that's what I want. 'Cause can I show you that I'll just give you some napkin math here to help you out. If you guys take home 10 grand a month and your monthly expenses are five grand, that means you could set aside $5,000 a month into a high yield savings account and have these renovations paid for in less than six months. - We probably could. - You just told me earlier, it's gonna take you years to do these renovations. - We're gonna be living like this forever. We're always gonna have cave drawings on our walls. - Have you ever heard that the phrase Kelly, if they wanted to, they would? I think if you wanted to invest 15%, you would. If you wanted to cash all these renovations, you would. Something is holding you guys back where you're going, you know what, that's just not a priority for us right now. And until you make it a priority, it's just simply not gonna happen. - And let me give you some peace here. Like the intensity of baby steps one, two, and three, it's hard, man. And over a long enough period of time, I'll even go as far as say it's a nightmare. It's really tough. And you're not crazy or snuffing wrong with you that y'all crossed that finish line. And you've seen marathon runners do this on ESPN, like on the clips, they just fall across the finish line and they lay on the ground. And they just roll around for a while. That's what y'all been doing, it's fine. But now it's time to get up and be intentional. It doesn't mean you have to go caustic like you were. That just means we gotta be thoughtful about where we're spending money and what we're spending it on. You'll make a great income, but not that much. If you made $2 million, all right, y'all can be silly. But you'll make 200 grand, which is amazing and awesome. And you have paid off all this debt, amazing and awesome. Now we're gonna do some big kid stuff. We're gonna renovate this whole house and make it hours. That's awesome. I love that. Just don't forget about 65 year old you in the process. And for you that doesn't mean work in Saturdays and Sundays, it just means being intentional. Yeah, what I'm so excited about is there's so much hope here based on your income. And the fact that you guys don't have any debt payments. So what's your mortgage payment? 2000. Amazing. It's less than 25% of your take on pay. So let's say you bring home 10. Two grand has gone for the mortgage. You still have $8,000 to cover everything else. But currently if that sits and checking, it's gonna disappear, isn't it? Yes, it will. So instead, let's make a plan before the month begins with your husband and say, listen, we're allocating five grand, which means we have five grand to do the rest of life. Two grand on the mortgage, three grand to cover food, utilities, all that good stuff. Could you do that? Yeah, we could do that. Open a high yield savings account today. Go to fairwinds.com and open a high yield savings account with them and move, is that their address? Fairwinds.org/ramsy. I was wrong there. Fairwinds.org/ramsy and open up a high yield savings account and just commit when that check deposits, we're moving $5,000 over, we're paying our mortgage and then we're gonna live off the rest. Y'all can for sure do that. So the priority is we're gonna set aside 15%. You don't even see that. It disappears before it hits your paycheck. That's why I love a retirement plan to an employer. Then the first 5,000, we're gonna allocate the savings. 'Cause we know we have enough to cover the bills. The bills have to get paid. Then if there's money left over to get the pedicures or to go out to eat great and the budget will tell you exactly what could be if you followed the plan. So hang on the line. I'm gonna gift you guys every dollar premium, not because you can't afford it because I think this is the kick you need to finally pay attention to this amazing income you have and get it all done. Future you will be thankful, current you will be thankful, and past you will go, wow, look at you, Kelly. Look at you go. (upbeat music) Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. (upbeat music) If this show helped you think differently about money, share with somebody else. Let us know your thoughts in the comments. All of that is super helpful in spreading the word and helping our team know what you like. Tim is in Chicago up next. Tim, what's going on? - Hi John and George. My wife and I are looking for you to settle a little bit of a debate here. - Yes, we love doing this. - Okay, I'm on your wife's side. - I'm on your side, let's do this. - Uh oh, well, so I'm 29 and my wife and I were already in the live and give like no one else pays and we're so blessed. So we're doing some planning around a state and future and the word debating, one, how much money to give our kids and then secondly, do we make our kids sign a prenup to one, protect the assets, but that's one side of the equation and then the other is do we let them make that decision for their own marriage and sort of the lead and cleave principle. - How much wealth are we talking here? - It's probably gonna get up there. We already are at a couple million dollar net worth and I mean, projections, 50 million, 30 years down the road, but yeah, we're so blessed. - Way to go, do you guys have kids currently? - Yeah, we do. - How old are they? - They're very young, like one, three and five of three of them. - Great, so we're making decisions that are like 20 years out currently, at least. - Right, but if we establish an irrevocable trust, I mean, that's when we kinda have to make some decisions now. - What's your goal with the irrevocable trust for tax savings? - That and I would rather pass down values, right? Biblical values and values of hard work that sort of is how we got here today to our kids rather than money necessarily, right? - Okay, do you wanna help them with their adult life like launch gifts, car wedding, down payment or even a home and cash? - Yeah, all those, yep. And the Ramsey principles, yeah, cool, I'll be above. - It feels to me like y'all are trying to solve, like one of my working definitions is not a clinical and one of my working definitions of anxiety is, is projecting out future issues and dragging them way into the present to solve them today. - I'm more concerned, and I don't remember, it's been a minute since I did set down with my state of turning into the whole trust thing. Can you not change this once you're in it? - You can for a living trust, a revocable one, but not an irrevocable one. So that's where the dilemmas and why this is at the forefront. - I don't see a need for an irrevocable trust at this stage. - Yeah, I'm not smart enough on this. So teach me, why are you choosing an irrevocable trust? - To basically put money into it and grow, and there's IRS limits on the max lifetime gift that you can give your kids before you get taxed heavily. So it's partially from that standpoint. - It's currently, it's 30 million, if you're right. - Yep, and I'm trying to be wise, 20 years down the road and establish that, and the pre-nup discussion came up and rammed to me.
listening to your show, you always advocate for them when it's, you're in the circumstance, but I'm debating if it's a future circumstance, right? If we've had a hard time, we're good, man. We take a different stance on some of these things, and for instance, she's not here to say this story, so I'm going to just do partial, what she said on air. But Dave, putting Rachel Cruz, his daughter Rachel in the will, didn't make her sign a prenup that Winston is cut out, you know what I'm saying? Yeah. I see what you're saying. And so the, like, because Dave doesn't want that his money to divide a brand new marriage. And so it was a matter of bringing the spouses into this conversation, not making sure that the kid is protected in case the spouse screws something out, which means the investment is going to have to be heavily relational, right? Right. That's what I'm getting at, and my wife is on the other side a little bit here. And I'll also say, James Sexton, the New York divorce attorney, he changed my personal mind on prenups through this one statement. Everyone has a prenup. Every single person who gets married has one, and it's whatever the government in your community or state says it is. And so do you want one or do you want the, do you want to have one that you craft when y'all still like each other or do you want the government to decide plus a couple of hired gun attorneys to decide down the road? That was a, that made me think through something, through think, think through things differently. And so yeah, if you're, if the potential beneficiary, I hope you live a long, you and your wife live a long, long life, the potential beneficiary of your kids, and they get married in 20 years. I hope it's years later that, and they've grown together and they have a family and whatever, you get what I'm saying? Yep. That's exactly what we want it to be a blessing for generations to come. Okay. And you can do that with a trust that isn't irrevocable and you can have it staggered payouts based on milestones. That's the way mine is. Based on your work in full time and when they're 35, they get 25%, when they're 45, they get another 25%. So you can do it in all kinds of ways. But I personally wouldn't have that conversation until we're crossing the bridge when they're older. And even then, I would not set up an irrevocable trust unless you have a real good reason of why you must have one right now because it's irrevocable. So we're a vocable living trust allows you to do a whole lot and yes, you're not moving money out of your estate by doing that like a irrevocable. But I would say it's wise to just hold off. You guys have done so well. I can tell you're very future thinking and I'm the same exact way where I'm looking out 20 years from now trying to make decisions. But I found that I just already have too much anxiety about the present to be worrying about 20 years from now problems that might be. And I'll tell you, I am not a huge fan of legislating from the grave for me and which means I have to have an incredible executor and I've got to be really clear about the staggered payouts and what that money's going to be used for. But man, I just don't know what the world's going to look like in 20 years. I don't know what the world's going to look like in 40 years. You know what I mean? What if they all marry billionaires? Yeah. And they're like, oh, how cute Tim's little little pittance right? Who knows? Do you have a will in place currently? That's what we're working on right now, hence why these questions are coming out. Okay. What's your state journey saying? It can say it's sort of up to us and in our state, it's putting it into a trust, protects it from expouses, rights, but and it's only the income that could be considered in Alimony. So it's a pretty minimal risk, but I just don't want someone coming into our family getting served legal paperwork to join our family. I want to give them big hug, take them fishing and welcome them to our family. Yeah. There's some there's some truth to that and some, some like you know, there's some naivety there, right? Things to get messy, right? And I think if you have a $50 million state having like more than fishing conversations is important, right? The Dave's children, the spouses are all involved in the annual conversation to discuss the estate. It's important, I think, because they're going to be a part of the entire family. I think the bigger question you and your wife need to wrestle with, not just now, but over the next 20 years, is anytime I'm going to mandate something from my kids in exchange for dot, dot, dot, I'm already shifting the nature of our relationship. Right, and that's ruling from the grave. It's kind of a conditional gift rather than an unconditional gift in a way. It's let it's an ethos more than it is a principle. Yeah. Yeah. That makes sense. And so I, there are certain things and my kids are younger, my kids are 10 and 16. There are things I say you have to do this if you want this. You get to choose, right? And so, but I like, man, I like to use that as sparingly as I can. I want to walk alongside and model this, what this is going to look like through relationship and through investment and time and boredom and frustration and conversations over a long arc, then I have so much more peace, handing over my wealth when I pass away. I wouldn't worry too much about it. Get the basics in place, get that will done, your healthcare directive, your financial power of attorney, guardian, get all that chosen. We can worry about those other problems way on later down the road. I finally get to announce that my brand new book, Building the Marriage You Want is available for preorder. 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 preorder bonus items at RamseySolutions.com/store Our scripture of the day, Philippians 2, 3, and 4. Do nothing out of selfish ambition or vain conceit, rather in humility value others above yourselves not looking to your own interests, but each of you to the interests of others. Meatloaf John one said, "I know you're looking for a ruby in a mountain of rocks, but there ain't no coop deviled at the bottom of a cracker jack box." I'll tell you, of all of the adventures I've had in this crazy little job I have, hanging out with Meatloaf for an hour, one night, that'll do it, takes the cake. I'll remember that forever, forever. Yeah, I was really sad to see him go man, he was a character, it was a great time. That quote is a great example of that character, wonderful. Niko's in Raleigh, North Carolina, what's going on Niko? Hey, how you guys doing today? Great, how can we help? Hey, so I'm a 21 year old over the Royal Truck Driver and I'm about $30,000 in debt, 33 is my car, $6,000 is my CDO tuition, my CDO school, and I have about $2,000 in credit card debt. I should be debt-free at the end of this year, so I live in my mom when I'm not working, so I don't have that much expenses of my car right now, so I was just wondering, what should I do to save it for a house, should I put it in index funds, or should I put it in aggressive mutual funds over the course of five to six years when I'm ready to buy a house and pull? Man, you're really thinking ahead here, how are you going to pay off $30 grand in two months? So I make $17,50 a week, and so I was going to pay off my car, I have $10,000 saved, I was going to just buy it in full and then just sell that for about $20,000 and then put the rest to my debt and keep the rest from my emergency fund. So you're going to sell your car? Yeah, I don't use it right now. And you don't need anything to get around? No, I don't. So that gets rid of the car debt, what's the car worth? If you sold it to CarMax, I would do your due diligence to see where you can get the most money for it. It might be a private party, and I would also get a bid from all those, the big guys like Carvana, CarMax, local dealership, all that. Yeah, you might be able to get pretty close to even Stephen on that one, because my guess is private party you could sell it for $23,000 or $25,000. Yeah. in your sleep.
saying future income plus the rest of the savings you can knock out the rest of the debt by Christmas. - Yeah. - Then we need an emergency fund of three to six months of expenses. I know you have very little expenses now, but I would still have you save a minimum of 10 grand before you save up a dime for a house down payment. - That's a plan, yep. - Okay, so how much are you gonna save for this house? What's the goal? - I'd probably want to save 400 grand. - Whoa. - For a down payment? - No, not for a down payment, just to buy it in full. I don't want to, I don't want to- - Oh, you want to, okay. So this is, are we talking like 10 years out? - I'm thinking five to six years. I make around 80 grand right now. And I always think about just stashing around 65 to 70 a year 'cause I don't need that much to live on right now. - What about taxes? Are you saying that's your take home pay? - Well, 65 would be after taxes. It kind of depends on the truck industry. So I make a little bit more than 1750, different than the miles I get. But- - And the plan would be to live with mom until you're 27? - Yeah, well, I don't live there now, but I'm only there once a month when I'm on home time. So it's not like I'm there a lot. - Okay, and you're gonna continue to over the road for the foreseeable future. - Yes, exactly. - But 60 times seven is what? - I don't get you there. - Yeah, I guess that's true. If you can live on an annual income of $5,000, that'd be pretty impressive, brother. What happened? - I could do that. - I know what happens if you need somebody. - It was a little bit hard to meet somebody when you're over the road a lot. So that's not really in the cars for me right now. - So the plans to stay single during this time and get you a nice whole house for yourself. - Yeah, I was thinking about- - That you'll be in one day of my- - Why buy a house if you're never gonna be home? - No, I was thinking about buying a house 'cause I don't wanna be in the truck industry for 20 years. I was thinking about doing it for five to six years. To have cash for a house and then buy it in cash. And then I probably just probably- I wanna go into sales in the future. That's all my career. - Crazy idea, Nico. Why not go into sales now? - Shut out, George. I never thought about that, but- - The cool thing about sales is you can just go do sales and if you're good at it, you get to keep your job. - Yeah, exactly. - What do you want to sell? - Well, I was thinking about a medical device sales. I don't know the big lot of money, but it's hard to get into. - So you're gonna go from one job that you hated for the money to another job you hated for a little bit more money. - Well, I don't hate the job, but it just makes me a lot of money now. And I was just thinking about spending all that money that I'm making now into a house and that I can get a little bit riskier about my career once I have the house in full. - Well, I mean, if you're just doing it backwards from how I would do it, which is find work you enjoy doing, then you'll make good money doing it. Then you can get the house instead of save up like a maniac for five years pay cash so that you can go do something you don't really enjoy, but then get more money for. It just seems backwards to me. - I would love to see you, brother. I know you've already invested in your CDL school and all that, but man, I would love to see you get really fired up about sales at 21 years old and go have some friends, go on some dates, go experience relationships so that when you turn 30 and you're crushing it as a salesman, and you've found a special somebody to spend the rest of your life with or you got a gang of people in your life that are friends that like, you're talking about a full, a whole full life. And all the data I've looked at, man, from that longitudinal study that Harvard put out over however many decades to just the marriage material I've been looking at over the last couple years, the thing that matters is relationships, man. And I'd hate to see you wake up after burning almost a decade in your mom's house with this single focused obsession as I gotta get a house, gotta get a house so that I can get another job, start from the ground up in that new job at 27, 28. Learn how to do that just so I can make some money so that then I can start doing the things that are actually gonna make my life rich and full and good and whole. Man, I just hate to see a young man just burn his 20s like this. - Okay, yeah, I get that. - So I think you have some great goals. I just want to have the right motives behind it and do it in the right order. So to answer your question to make sure we at least hit that, if you're going to be, if this is a five plus year goal, it's fine to invest that money in some index funds and a taxable brokerage account. But if this is gonna happen in less than five years, that's where I go. I might put it in a high yield savings rates are great right now and that way you're a little more flexible. But it sounds like this is a five plus year goal. And there's nothing wrong with taking on a small mortgage and knocking it out 'cause it's a moving goal post. That $400,000 house today, six years from now is probably gonna be $600,000. We don't know. So that's another piece of the puzzle to look at. - Or if it all comes down, George, maybe a hundred thousand. - Let's see if we have another 2008. I'm not hedging my bets on that. - I'm not either. - Nico, I think you're a really sharp guy. You've got a ton of drive. I'm seeing like a younger version of myself and I just want to give you a hug and say, dude, do the thing now that you want to do. Now you can take risks. Your home once a month, you don't really have expenses. You have moms place to fall back on. If you want to go into sales, just go into sales and try it. You might find out you hate sales 'cause it sounds like the only reason you want to go into sales 'cause you found out you can make a lot of money, right? - Yeah. - So instead of taking all that time, just find the thing you want to do. And I'll send you a copy of our friend Ken's book, Find the Work You're Wired to Do. It comes with a Get Clear Career Assessment. Take that and just take a beat. Take a step back and go, if money was no object, what would I do? That would actually fill my cup and not just give me a big paycheck. - But in the meantime, be debt-free by Christmas. Deal? - Yes, sir. - And then no more debt ever again after that. - Deal? - That's a plan. - I'm proud he got it. - Man, you're a hard worker brother. You're a hustler, it's good to talk to you. - Can't believe you got this stuff at 21. Took me way longer. - I'm still figuring out what he was talking about. - Just now. - Way to go, Nico. That puts this hour of the reigns we show in the books. Remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus. (upbeat music)
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