The Ramsey Show - App - Are These Money-Saving Tips Tacky or Hacky? (Hour 2)

Episode Date: February 5, 2024

Девочка-пай Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jay Warshaw, and this is your show, America. So call us up at 888-825-5225. We will do our best to give you advice, and it's worth what you paid for it. Remember that if you don't like it. And don't call in if you don't. If you already know what we're going to say and you don't want to take it, don't waste the air time.

But if you need that confirmation to push you over the fence because you know what you need to do, we're happy to give you a little pep in your step. Some people need to be a little firm. They need to be handled firmly. There we go. And that's what Jade's here for. She's the muscle.

I'm just the eye candy that gets us through it all. Michael is up first in Wilmington, North Carolina. Michael, welcome to the show. Hey, thanks, y'all. Thanks for having me. I've been listening to y'all for a few years now. I'm just looking for some advice. Um, my wife and I bought a bunch of my friends and family have said that, um, you know, the only way to be able to, um, take the loan over would be to refinance. Um, and I found out through our mortgage company that they do have, um, assumption of the loan,

um, process. And I was just curious which way might be best for me to go. That way I could get the mortgage and everything solely in my name. Yeah, well, that's great that your lender has those options. A lot of them, the only way to do it is refinance. But again, it's always worth asking your lender to see if they can do a loan modification or the loan assumption. And it sounds like, have you looked into the terms of that? It sounds like it'll be the cheaper route for you to do a loan assumption if you can afford it and take on that risk on your own.

Sure. They literally just sent over the email today. And that works. I kind of went through it a little bit. And just even the numbers from that, you know, like you said, it can be kind of went through it a little bit. Um, and just even the numbers from that, um, you know, like you said, it can be kind of pricey. Um, and so I wasn't quite sure what the refinance is. We haven't touched any of the equity in it or anything. So that's part of the reason why I was hoping that, you know, before I found out about their assumption details might've been able to refinance and maybe use that equity for the stuff to refinance it. But when... What is she owed in this deal?

What? Have you guys gone through the process? Well, that's what I wanted to ask. Are there lawyers? Is she going to get a piece of this home and the equity? Mm-hmm. I don't know. It's not like I'm trying to do all this behind her back or shady. I'm just trying to figure out the best option for me because I want to stay in the house. My father has just been put on hospice and he lives with me. I'm trying to keep the house. I just want to know, did you guys say, hey, we're just going to figure this

out ourselves? Or are there any lawyers involved that are saying and kind of mediating this for you and saying, okay, here's the deal. Here's what it's going to be. I just don't want you to get ahead of yourself and this not be the terms of the actual divorce. If you go through all this and then it turns out you have to sell the house or do a cash out refinance to pay her portion anyways. And so now you've got two refinances. So that we're just trying to make sure you know what the next steps are before you make a big financial move like this. Sure, sure. No, we have not gone through anything just yet as far as lawyers or any type of agreement. I've been trying to work with her as far as some type of agreement. How long were you married?

The end of February will be two years. Okay. So depending on the, I mean, the judge is who's going to decide what's fair and equitable here. And so there may be a situation where he goes, listen, you guys weren't married enough to split this half and half. Here's what she gets. Here's what you get. You get to keep the house. Who knows how it's going to shake down. But I would absolutely work with an attorney, even if it's one in just mediation between you two, to get all this down on paper before we make a decision on what's next. Yeah, I definitely don't pull the trigger on any of this yet. Okay. Yeah, no, I appreciate it. I just wasn't sure if regardless of however,

um, certain ways went about it, there was a better way, um, to, to handle it if I was able to assume or if refinancing was the better option. How much equity do you have in the house? Um, I'm, I'm not sure, honestly. Um, normally I was the one just out working and putting the money in the account and I let her handle paying it. Have you guys separated bank accounts yet? Not, well, we have one joint account and we had one for the house and then we each had our own individual. Okay. I would separate finances to keep things clean right now. Okay. And it sounds like you're going to be paying the mortgage on your own. Yes. Well, I have been. And how much is the mortgage compared to your 50 a month and i bring home give or take four a month oh wow that's tight

tight tight like a tiger oh it's almost half your income going towards this and if here's the thing if if let's say she gets a portion of the equity and you have to do a cash out refinance yeah well that's going to make your mortgage payment go up and so i don't know that you're going to make your mortgage payment go up. And so I don't know that you're going to be able to stay in this house based on how much equity you have and what this new mortgage will be. I mean, you already kind of can't, even if that weren't a factor. Yeah, sure. Well, I, um, like I said, I've been the one who's been paying for the house ever since we moved in. Um, I work a full time and I, I try and pick up some side jobs here and there too. Uh, but that was with her income too, right? Was she contributing

financially? Um, no, not, not to, um, not to the house. So you guys were just really scraping by this. Well, what I tried to do was I tried to be the one that went out and worked to cover the bills so that way she could stay home and focus on the baby and focus on school and not have to work. So when you one kid together. Yeah. Yeah. We just had a son seven months ago. I'm sorry. So when you go out and work, you said, you know, you kind of close that gap when you go out and do other jobs. What type of jobs are you doing and what are you bringing home in addition to your four thousand a month? Well, it's not consistent, but I go out and I do mechanical services on the side. So I could bring in anywhere from, I don't know, an extra grand to extra three grand a month.

Here's where I'm at. Listening to what you're saying and kind of what it's been and what you're bringing in and the consistency or inconsistency of it all, with what George is saying, as it is, I think that your mortgage was already too high, assuming she wasn't contributing much financially there. And then like George said, if you do this cash out refi, it is going to cause your monthly payment to go up. I don't think that you can handle that. You're going to sit and you're going to talk with a lawyer and you guys are going to figure this out. But if it were me, I'd probably try to walk away from this

a clean break and get into something that you can afford monthly. That's 25% of your take home and is not contingent. One thing you don't want to do, and this is not just for you, but anybody, you don't want to have to side hustle to pay your mortgage. If you're side hustling to make sure that you can afford your mortgage payment, something's wrong and you're out of balance. It's not sustainable. Yeah. Side hustling is to do extra things like pay off debt and save for things, not to make sure you can clear your mortgage. Hang on the line. We're going to send you a link to our divorce checklist from our friend Dr. John Deloney on the Ramsey blog.

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So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. This is The Ramsey Show. I'm George Camel, joined by Jade Warshaw. Friendly reminder, because we just went out during the break to the lobby and met some wonderful people from all over the country. You can come visit us and watch the show live. If that's your form of entertainment, is to watch people through glass, sit at a desk, and do a show that you could listen to on podcast, we'd love to have you you and people travel from all over just to hang out with us we got two birthdays in the crowd today jade this is how they wanted to celebrate and george gives out hugs to every single person

that's all i joke that if you hug me i'll break like i'm that weak and sensitive so be careful i go down easy well jade we both love food do. And we both talk about money. And so we thought, what if we did a fun little segment on this show called Tacky or Hacky? Yes. And this is where I throw out something that people do, maybe that we've done, and you got to give your take if it's tacky or if it's kind of a money hack. I'm ready. So this is restaurant edition today. Restaurant edition. You ready for this? Okay. And you guys at home,

if you're listening wherever and you're with someone or you want to talk to yourself, you let us know. Is this tacky or hacky? Taking extra stuff from restaurants for your house. Napkins, condiments, plastic utensils. What do you think?

I'm going to mostly go with tacky. I think there's a line here all right uh mine is were they given to me yes or am i just grabbing a whole handful of condiments for the road right i was at chipotle yesterday i'm not taking we i only needed one fork i'm not taking five because they have they have the nice plastic forks i will say chipotle's utensil game on point it's sturdy right and i didn't take i will say sometimes i take a few extra napkins for the car not for my home yeah but i'm willing to admit that that's a tacky i i don't like chipotle's napkins gonna be honest like the brown cardboardy napkins the brown we can do better even for a car car situation. So, tacky. So, I'm going to go mostly tacky, and it's hacky if it was given to you or if you're

taking a reasonable amount. Now, I will save the chopsticks from- I do that, too. Because they usually give you maybe one extra one, and it's nice to keep it in the drawer just in case one time you order and they forget. That's fair. That's hacky. We've got that.

All right. Next up, ordering your drink with no ice, I'm assuming in order to get more liquid. I'm going to go hacky on that one. Hacky. Been there, done that. That's not tacky at all. And it avoids it from just getting super watered down if it takes you a while to drink it. Now, this depends on the kind of drink. I mean, some people, I feel like with a fountain drink, you need some ice in there. It's just strange without it. And you can always refill it. You know what I mean? so it depends on the beverage well let's add an outlier here because

there people go to extremes i might know someone in my family who would save a cup and bring it in the next day for a free refill and get a free refill that to me is tacky that's beyond the the moral line for me personally so are you calling my family members tacky i'm not gonna report them i'm just saying if i did that my wife would be like really oh most definitely there'd be some eye rolls yeah that's extended family by the way not sam warshaw okay next up kids meals for older kids slash teenagers i'm going i'm going hacky i'm gonna go hacky because i mean smaller portion cheaper price probably the correct portion what about if the menu says like 12 and 12 and below it doesn't matter even if the menu says 12 or below i like here's the thing i still to this day i'll go to

chick-fil-a and i'll order a kid's meal and not one time have they been like sir is there children in the vehicle with you does it but i don't think it says that on their menu but if you go to Chick-fil-A and I'll order a kid's meal. And not one time have they been like, sir, is there children in the vehicle with you? Does it? But I don't think it says that on their menu. But if you go to a restaurant, it'll say on the kid's menu, like 12 and below. Now, the fancier the restaurant, the less likely I am to do this. You know what I mean? Yeah. But if I don't need, I mean, some of these portions, Jade, you've seen them. Gargantuan. I'm like, yo, we're eating for three over here. You know, I got a little physique. I don't need that much. Wow, okay. So I think it's hacky in most situations. But again, if they say, hey, kids only, I go, all right, no big deal.

I'm not gonna put up a stink about it. What about, okay, again, sorry. I'm going rogue a little bit, James, because it's making me think of like trifling things that I've seen people do who shall remain nameless. All right, you go to the Mexican restaurant. They bring chips to the table that are usually free it comes with a meal yeah and you're really done with the chips but you're like i'll order another basket and i'll take those home oh the

to-go chips scenario all right i'll go hacky on that one is that hacky i think i would say tacky on that i i don't i wouldn't do it just to take it to go. I would get the chips and be like, all right, I'm really done with the chips here. My entree's here. And these chips are going to go to waste. You know they're going to throw them out. One would hope. So you're saying it's the motivation behind it.

If you didn't know there was going to be leftovers, you take them. But you don't order it knowing you're not going to eat them. They don't recycle the chips off the table, do they? Yes, they do. Yes. I got trust issues now. I used to work on a cruise ship. Let me throw this out here.

I used to work on a cruise ship. You know, you go out at any restaurant and they give you a basket of bread. Yeah. If you can, and you know, you rifle through it to pick the piece of bread you want. They will 100% save that bread and put it in somebody else's basket.

You're welcome. Now. It's gross, I know. Is that just cruise ship? I'm going to go with that's an everyday life, George. I feel like the restaurants that I frequent, they wouldn't do that. They're too classy.

And there's OSHA violations. There's too many issues that could go wrong. Sam and I went to a restaurant a couple of weeks ago and it was fairly nice. And when they brought out the bread basket, I could tell it had a lot of crumbs in it there was a piece that looked like it had been broken off of the lavash i was like uh i'm not getting a good vibe about this bread basket well to be fair i told you guys don't go

to applebee's after 10 p.m and you did it anyway you did it well played george camel okay let's keep going on this well all right next up splitting meals hacky or tacky okay i do this so i think it's hacky it's hacky you here's where it gets hacky and tacky don't tell them you're gonna split it because some restaurants they'll charge you they'll charge you plate so don't tell them just eat it off each other's plate yeah well i like to get an entree my wife will get an entree and then we'll kind of eat half and switch or something hacky and some restaurants i mean like we'll get fajitas at one of these local Mexican places.

It's tons of food in a fajita for one. Yeah. And my wife and I split that and we have a great time. So I don't think there's anything wrong with that. I'm not doing anything immoral. Okay, but what about this? An alcoholic beverage, if you will, splitting one of those.

I mean, that's strange. strange cocktails are expensive at a restaurant yeah i wouldn't split i'm trying to think of you know i wouldn't split a soda maybe a glass well the one thing i have free refills though so you could split one yeah but then the server that's too tacky that's tacky that's tacky splitting a soda so you get free refills and then you each can have your fill of because you're trying to avoid paying another three bucks for your soda but i think a cocktail is fine because those are wildly expensive there's no free refills on cocktails and some people might not want to handle a full drink okay so that one's fair if it's alcoholic if it's not i think it's a little

tacky well tacky all right next up ordering an appetizer or dessert only hacky yeah i don't know what's wrong with that money now here's the thing the real hack is skip the apps and dessert and get the entree here's what i do well here's where the motivation part of it comes in like what was your motivation going in so when you're getting out of debt right and you're like i'm not going to spend a lot of money and your friends are going out but you're like i'm not going to go out and spend money i'll just go for the company there's always a friend that feels bad and it like, you know, I got yours. I'll get yours.

So if you say yes and you're like, I'm just going to get the soup or I'll just get the side salad. Or I'll get a water and then you're dipping your little grubby hands into those fries that we got. Oh, hey, that's tacky. There's another move. I think if you're just honestly like I'm going out, this is all I want. Definitely hacky. But if you have a motivation. You know what's tacky though?

And I've been in this situation is people go, well, let's just split it all evenly. It'll be easier. And then I'm like, whoa, I didn't get the appetizer or the three cocktails. I got water and one entree. I'm like, hold up. We're not splitting this evenly. I know. That's right.

It's tacky to be the person who says, let's just split it evenly when you got the most. That's because it's always the Michael Jordans and the LeBrons that say that. And I'm over here, the sixth man. I may not make what they make. I'm Muggsy Bogues out here. Okay. You know what I mean? The sixth man does not make what the point guard, the starting point guard makes.

And so when you're out to dinner with your friends, you got to think about that before you say, you say hey let's just all split it and you go and order the filet mignon george like you did i'm just kidding that's fair okay last one getting soda at the soda fountain when you didn't order a soda so you get the cup for water that's legit stealing that's tacky that's tacky but you know what i have done is the right to the water, there's a soda button. There's no syrup. It's just soda water. All right. I'll do that with a cup of water.

It's still water. Listen. No syrup. I didn't cost the company any money with their paying for syrup. For the OGs, you already know. You order water and lemons. And go ahead and put your own sugar in there. I make my own little LaCroix.

Like Chipotle, get the soda water. I squeeze a lime in there. You got a lime LaCroix for free. Okay. There's your Chipotle hack. Listen, I think that it's tacky, but... Thank you, Jade. This has been Tacky or Hacky Restaurant Edition.

Hope you guys enjoyed that and budget for it, whether it is tacky or hacky. You're listening to The Ramsey Show. I george camel joined by jade warshaw the phone number to call is 888-825-5225 david is up next in burlington vermont david welcome to the show hey guys thank you so much for having me sure how can we help today so i have a small problem it seems like compared to some of the other callers. But I run a small auto glass business here in Vermont. It is new. It's about seven months old. And I'm looking to get a little bit of money back in taxes, or I'm getting money back, about $2,000 worth.

The problem is I do have some credit card debt. I have about $2,800 in credit card debt. Um, and so I'm assuming what you're going to tell me is to just pay the credit card debt, but I do have an opportunity to invest the money into, um, the business for the calibration systems that I need to do or need to use in the industry. Um, so I just don't know if I should just pay off the debt immediately or if I should invest it into the industry. So I just don't know if I should just pay off the debt immediately or if I should invest it into the business. Well, you're right. You may not like our answer, but do you have 800 bucks in savings as well, cash in the bank? I don't. Okay. I've pretty much thrown every bit

of money I have into the business at this point. Well, to me, that's the more glaring problem is that you are on thin ice already, my friend, as far as this business and your cash flow and your personal financial world. And so before you put another dime into this business, we've got to become debt-free and then cash flow once we're debt-free, once we have an emergency fund to then grow this business. How long can you get by without the calibration systems? Well, that's the thing. So right now I'm subbing the calibrations out to other shops. I'm not essentially losing money, but it's money I could be making. Right now I'm getting by. The issue isn't getting by, it's just making more profit, seeing the potential to make more profit. Are you working full-time at this business? I am, yes.

Okay. Are you able to take on a side hustle while it gets off the ground to bring in some more income right now? What is this bringing in for you, net? I'm not saying it's... To be completely honest, I haven't even tracked it.

I know I'm making enough to pay the bills, and that's it. Okay. Is this just you? It is, yes. Okay. Okay. Okay. You said seven months old. Are you putting aside, since you're not really taking inventory, are you putting aside for quarterlies and for taxes? Yeah. So the taxes are handled. I actually just had a huge scare with the state. And they thought I owed $ six thousand dollars and we're able to resolve that luckily but yeah so right now that the tax isn't the issue okay good

um i listen i'm with george um i would a start getting a handle on what you are making because you you got to understand if your business is doing well and what it's doing because then you might look at the numbers and go, I should be able to pay for this out of the business and not my tax return, you know, but I do think that you should pay off this credit card debt first. Okay. Even though the credit card debt is more personal versus the business. Everything's personal, man. Guess who signed those business documents? David. Gotcha. Okay. So yeah, there's really no such thing as business. It's all in your name and therefore you owe it all. And so I want you to have as little risk as possible,

run this business debt-free. I love that you're wanting to cashflow these systems, but you'll get there once we have more financial footing and foundation underneath us. Good. Gotcha. Okay. Thank you so much. Yeah. I would pause on this, even though you could be making money, any opportunity to do something that puts you at risk is not an opportunity. And whether that's going into debt or investing in the business when you have debt, it's all the same. And you've got to get that emergency fund in place ASAP. But I am glad you get a refund instead of owing $26,000. That is quite the scare.

And I know it's tax season. A lot of people out there, Jade, are now filing and getting their documents together. I want to let them know we have a great free resource at ramseysolutions.com slash tax. And on that site, you'll see my pretty face along with Dave's extra pretty face. And we'll help you figure out, number one,

is it worth filing with a pro or can you do it on your own with tax software? We also have some really great free resources. I use these every year. I go to the site and I download the personal checklist for taxes and it has every single document I could need. I love that. So I go through that and I pull it online, log into the site and I can knock it out in a real short amount of time. There's also a really great beginner's guide to taxes that is super helpful. How do income taxes work? What do you need to know for the 2024 tax season? How to file? What about deductions and credits? How to choose a tax advisor? Filing an extension? The truth about tax refunds? It's all right there.

I can't believe it's free, Jade. And so go to ramseysolutions.com slash tax to get all of those resources. I promise you it's going to help you burn so go to ramsaysolutions.com slash tax to get all of those resources. I promise you it's going to give you, it's going to help you burn less brain calories this tax season. That's so true. Have you filed yet? Have you done it? I got my appointment to file and I've got all my documents ready on my computer in a folder. Everything's labeled perfectly. My wife is like, how do you know all this? I'm like, I don't know. I'm just a giant nerd. There was a glimmer in your eye just now when you were talking about it. I'm not going to lie.

Like spending three hours on a Saturday doing that was somehow invigorating. It was like cleaning out a closet. You know what I mean? It just feels good once you're done. I get that. All right. There we go.

We're moving on to Philadelphia. Matt joins us there. What's going on, Matt? Hi. How you guys doing? Great. How are you? Good.

So I just started listening to the program about six months ago or so. And I have a general question on finances and then another question on potentially getting married. So I'm following the program, not perfectly, but I'm trying. I have down about $3,000 in credit card debt. My biggest debt is actually I have to pay back. I'm visually impaired, and I have to pay back Social Security. A substantial amount, about $80,000, but that debt is actually interest-free. So I've been just paying the agreed payment, basically,

and attacking my credit card and my mortgage, which is down to about $73,000. Kind of in paying them both. I know that's not the exact way to do it. I'm just about to get rid of the credit card debt. But my main question was with all that, I'm still investing through work 6% because they match the 6%. Should I be stopping that completely until the debt is gone? Yeah. You know, you said you listen to what we teach and you're not doing it perfectly. I don't think you're really doing it at all in our way.

I think that you have in your mind that you want to pay down your debt. But the way that we would teach to do this is very different than what you're doing. So I'd like to kind of call out the major differences. But I think you know what they are. What's your income? I guess it's just 64K.

Okay. I mean, right now you're paying off your mortgage along with your other debts, which we would tell you that's further on down the line. Baby step one, you get $1,000 saved first. And then baby step two, you pay off all your consumer debt, everything except the mortgage. So you're really flip-flopping it. Do you have the $1,000 saved, by the way? Yes.

How much do you have saved? Around $4,000. So you can knock out the credit card debt today. I want to call out the fact that you're really not doing our plan at all even a little bit my main concern was i have to have like a some some housework done like a roof on the garage okay i want to save a little cash to potentially pay the person to do it in cash rather than okay so it's like a sinking fund that's my that's my safety now i guess at this point that's the only reason i haven't done it. How urgent is that roof over the garage? Is it, like, falling apart?

It's not falling apart. It's got a slow leak. I mean, if you had to say, what's the timeline on this thing? I need to get it done soon. I was kind of waiting for the winter to get over, but probably in the next month or two. Okay. What's it going to cost?

That's a good question. I'm not really sure. I'm thinking somewhere around $1,500 to $2,000. Okay. So, okay. What's it going to cost? That's a good question. I'm not really sure. I'm thinking somewhere around $1,500 to $2,000. Okay. Okay. So you've got a little extra there. Find out exactly what it is because this is money, all this money, when you just kind of keep it around and hoard, it's not to say that you have lots of it, but it's money that could be going to work for you. So if this thing is only going to cost $1,500 or $1,100, you've got another $1,300 here that could be helping you right now. So let's get a clear estimate on that. I want you to stop investing. I understand that you're getting 6%, but that's a lot of money that could be back in your pocket for you to be paying off these credit cards and really paying off this social security. I'm not sure. You probably don't have to go into it, but I'm not sure how that happened. But $80,000 is a lot of money. Regardless of its interest free, it is a weight on your body. And I want you to get that paid off. So I want you to stop on the mortgage, wait until baby step six, which is when you're supposed to do that. And right now, I really just want you focused on paying off this debt using the debt snowball.

And that's how you're going to do this. That's how we teach to do it. So if you want to do our plan, that's the way it goes. And freeing up that investment, that's $3,840 a year. That's $320 a month. That'll make you feel some progress instead of doing 17 things at once without making any. So we hope you follow our plan all the way, man. That's the only way it works.

This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. And while you're enjoying this show, if you could do us a tiny but huge favor for us, hit the share button. Hit the follow button. Hit the subscribe button. Leave a review. Leave a kind comment. Send a link to your mom and say, hey, mom, I thought you'd enjoy this show. I know my mom's watching right now. She fills me in.

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are the marketing plan and it's free to you. This is a free show for you and we appreciate you being here. Bill is in Boston up next. Bill, what's going on? Hi guys. Thanks so much for taking my call. I'm 51 years old, single. I'm a homeowner with $50,000 left in the mortgage, a value of $750,000 in the house. I had a retirement of $157,000. I started all over 12 years ago when I got divorced. I've got about $10,000 for savings, no credit card debt, no car payment. And I have a Vanguard target retirement of a 2040 fund as well. You said 240? 240, yes. It's a target date fund that goes until 2040. Oh,

2040. I'm sorry. I misunderstood you. Okay. Okay. All right. What's your question today? Should I be doing anything else? The past few years, I've put about $18,000 into my 401k. I just want to get ready. I'm working hard not to have debt. I don't do much. Do you have anything except the mortgage as far as debt? No, sir. Great. And so if you're following the Ramsey plan, this would put you at,

I know you found us, so let me lay it out for you. Baby step one, $1,000 emergency fund. You're through that. Baby step two, pay off all consumer non-mortgage debt. You're through that. Baby step three is three to six months of expenses. Do you have that with the 10,000 or do you need more than that? My guess is more. If you added up six months of your expenses to run your house, is that going to be- Yeah, I don't have six months. Would that be closer to 20 or 25 for you? run your house. Is that going to be... Yeah, I don't have six months.

Would that be closer to 20 or 25 for you? Yeah, it'd be closer to 25, yeah. Okay. So that's a good goal for you in the savings. And then beyond that, once you have that 25 saved, then we can move on to investing 15% of your income into retirement. How much are you investing now percentage-wise? 20. Okay. So you could dial that back to 15, and then whatever's left over, you can throw at the mortgage and get that knocked out.

Yeah, I wasn't sure. I had a feeling you were going to ask me to back it off a lot just to bang out the mortgage. Well, you're 51. My goal for you, and I think your best path to wealth and being secure in retirement, is to have no mortgage payment, no debt whatsoever, and have that nest egg building. And so that's going to also decrease your biggest fixed expense. What's your mortgage payment?

It's not much. It's just $500. Well, without taxes, just mortgage alone is 500 okay plus taxes and insurance so you'll free up 500 bucks once you get rid of the mortgage which will be helpful in retirement okay so and the good news is at over 50 you're going to have some catch-up contributions and so once the mortgage is paid off you can increase investing to 30 40 percent of your, be maxing out everything. Oh, I didn't know that.

So you're able to contribute additional money that I'm not able to at 34 years old. But once you're over 50, you can contribute more to that 401k, more to the IRA. And so that's going to help you to build up that nest egg faster as you race toward retirement. What can you max out at your 401k at 51? Let me see the 2024. They just upped it. Let me check on that for you with my handy dandy laptop here. Here we go.

Okay, I am seeing... Well, George looks for that. I'm just kind of curious, what set you on this path to start paying off your mortgage and doing all of this? I see on here that you just kind of curious what set you on this path to start paying off your mortgage and doing all of this if you I see on here that you're kind of new to Ramsey so what was it just you realizing I want to start over uh I just never liked that I got divorced um I uh I carried a lot of debt after that and asked past, I'd say, four or five years is when I, it took me about seven years to really finally get out of it.

And now I'm able to do the 20% for my 401k. You know, I want a future. Absolutely. You've got a taste of the freedom on the other side, getting rid of all that debt, too. Right. And I don't, you know, I mean, I don't do any, I like to fish. I like to hunt. You know, I know a little bit of money goes to that,

but that's just a few thousand dollars a year. That's my thing. Yeah, you don't sound like you're living a crazy, frivolous lifestyle here. You're doing a lot of the right things. And I found the contribution limit for 2024, it's $23,000. And then you get to contribute an additional $7,500 on top of that. That's significant. So that's pretty serious.

You're putting over $30K in that 401K as you get in your later years working. What's your income? Depending on overtime, I would say I average about $85. Okay. And we've got a great investment calculator on our website that's free, Bill. You can jump on there, RamseySolutions.com, and you can start punching in these numbers and going, all right, I have 157 saved right now. If that just grows and I keep contributing, you know, 500 bucks a month, 1,000 bucks a month, you can see exactly what you'd have over time. And I think that will be an encouragement to you to go, oh, okay, I'm going to be okay. Another 10 years of compound growth and investing with no house payment. You could have a pretty decent little nest egg there. And I imagine you're going to be able to work in your later years. Do you have a goal in mind? I would love to be 65. But my social security, I went down to the office two weeks ago, and it's 67 for me. So if that's it, so be it.

But they told me 67 at my age right now is when I would be able to retire. Well, I just popped in some numbers for you, Bill. You're 51 at 65. If you keep contributing to this 157 with 10% return on average, you'd have 1.3 million sitting in that nest egg is that okay what is that with what is what is it that i'm contributing every year to make that happen that's at 1875 a month i just put on a random number in there that's 22.5 so that's even below the current limit without your catch-up contributions? So at $22,500, now until $65,000.

Now until $65,000. Now until $65,000, $22,500, that would be how much? $1.1 million? $1.3 million, my friend. So start dreaming. A lot can happen in 14 years with a little bit of consistency and you keep staying on this plan and you get rid of that mortgage. But again, you got to do these things in an order because a lot of people, Bill, what they do is they try to do 17 things at once. And the beauty of the baby steps is it's focused. And so while you're going to be investing 15% while paying off the mortgage, as soon as that thing's knocked out, you can weigh up that investment. And you remember, you also freed up 500 bucks from that mortgage. Right. Would you suggest that I just stop my 401k for two years, pay off my mortgage,

and then get back on it? No, that's two years of compound growth you'd lose. The one thing that I would do, you may want to pause temporarily to get that emergency fund in place because getting 20% of your income back to save up that 25K, that's going to protect you. Because a lot of times what happens, Bill, is people have one of these emergencies later in life, and it might be a $12,000 emergency. You don't have $12,000. So what do you do? You go into debt, moving you backwards, and it halts your wealth building journey. Okay. And that's baby step three to have six months exactly All right, and bill i'm going to send you a copy of my new book breaking free from broke It'll walk you through all these baby steps. It'll talk about wealth. It'll talk about investing

In mortgages all of that stuff is in there and I hope it gives you some Confidence for your retirement, but I feel good just looking at a calculator Sometimes the numbers is exactly what you need. It is. You know, I think about that statistic. It says 52% of Americans feel that they're not prepared for retirement or that they don't have enough saved. And I sometimes think that that fear and that anxiety could be remedied if people just looked at the actual numbers instead of assuming they don't have it or assuming they can't do it. When you start plugging real numbers into that calculator, it can give you peace and it can help you see what you need to be doing

so that you can have the retirement that you want. That's a good word. Knowledge is power. And listen, it's not too late for you, America. If you're 51 and you only have 100 grand in retirement, it's not too late. Look at Bill. He's already about a millionaire, and he's going to be doing just fine 10, 15 years from now when he retires. That puts this hour of The Ramsey Show in the books. I'll see you next time.