The Ramsey Show - App - Controlling Your Own Behavior Is Half the Battle to Building Wealth

Episode Date: October 28, 2024

from the Ramsey Network app it's the Ramsey show I'm your host Jade Warshaw next to me is George Campbell and we are who you got for the next couple hours taking calls about your life and your money. If you want to get involved, it's an easy call. You can call 1-888-825-5225 and we'll hook you up with the best advice that we could possibly come up with. Isn't that right, George? Call us now for your free financial rating. All right, here we go. Let's go straight to the phone lines.

We got Vinny in Atlanta, GA. What's going on, Vinny? Hey, how you guys doing? We're doing good. How can we help today? Hey, so I am 24 years old. I live in Atlanta. I am doing my dream job. I'm a Bible teacher at a Christian school, and I want to kind of figure out how I can either up my income, do something to allow my wife to stay home. I'm getting a lump sum of $50,000 in November on my birthday. So I want to know if there's something I can do to use that money to be able to up my income or if I'm able to use that in some sort of way to allow my wife to stay home. What's the 50K for? Why are you getting that? Yeah, so I've actually gotten,

there was a lawsuit from my family from years ago. I've actually gotten, it was, there was a lawsuit from like my family from years ago. So I've actually gotten $50,000 before. This will be my last payout, but I've gotten that before. So I actually don't have any, me and my wife, we don't have any student loans, any card debt, anything like that. What'd you use the last lump sum for? All my, it was all school, my wife's school and everything. So i'm we have i have money in my like my uh roth ira we just bought a house good in december so okay good so no debt a lot of the old money okay good no debt you guys are paying for school in cash um do you have money saved anywhere um i got about uh thirty thousand dollars in my r IRA. Okay. Do you have any liquid money saved, like non-retirement?

Yeah, we have about $12,000 in our safety and our emergency fund. Okay, cool. And what's your income that you make off of the job that you have? It's about $32,000 after taxes. A year? Yes, ma'am. And is this the long, you said this is the dream job. Is there any upward mobility?

Is there a ladder in this world? Can you teach at a college, or what are your options here? Because $32,000 is going to be tough to live on as a household, as a Bible teacher. That's for sure. Yeah, that's why I'm calling you guys. So, yeah, that, I don't really know. I don't want to, you know you know teach college I kind of like teaching like the like the little kids I teach fifth grade through ninth grade and so I love

the people that I'm around and everything so I would like to work at the school that I'm at you know I love the people I'm with it's kind of affiliated with my church in some sort of way so I like to stay there and do something else I've looked at you know real estate or doing with my money. Is it 40 hours a week? Are you working 40 hours a week? Or tell us more about your schedule. Yeah, I'm working 40 hours a week. It's a full-time school. Okay. Yeah, I'm with George. The glaring issue here is your core income is not enough. And there's not, I mean, it doesn't sound like you're going to go jump careers to a 40-hour a week job and then do Bible teaching on the weekends for ministry. Yeah.

How much of that do you take home? Like, what's your take home every month, just to put it in real terms? It is $1,300. Okay. And then how much is your rent or your mortgage? You said you have a house. Our mortgage, yeah, it's $2,500. I mean, my wife, she's a teacher, too.

She gets $60,000 a year. Okay. Okay. And didn't I hear you say at the beginning you're trying to get to the point to where she's a stay-at-home mom? Yes, ma'am. You tell me how it works because the math is not math in where I'm sitting. No, it doesn't. Yeah, I know.

That's why I'm hoping to use this $50,000 to help me do something. So I'm kind of calling you guys for... But $50,000 is not going to replace $60,000 of income yearly. Yeah. You know, so the problem is it's not going to get you very far. Now, you could, you know, pay off the mortgage and that's going to reduce your expenses. There's only two ways to get this margin is either make more or spend less. And you guys will likely have to do both. But the really hard truth you're going to have to have the conversation have with your wife is, I don't know that I can continue doing this full time if this is our new dream. Yeah. What's the time, what's the timeframe on this? I mean, is she pregnant? Tell us more about

what you, what the timeline is. She's not pregnant, but, uh, you know, I, I would like her to be, so we, we talk about it and everything. Uh, but you know, people always say the Lord will ride, but I don't want to put the Lord, my God to test. Sometimes he provides by making us get up off the couch and go work our butts off. That's a good word, George. He gave us the ability to work. And so that's my challenge to you. I'm not saying you need to leave your profession, but if you're saying this is what we want and this is God's will for our life, that might mean I need to total career switch and go, I'm still going to do Bible teaching for fun. I'm going to be very involved with my church. But what I do Monday

through Friday, 40 hours a week is going to be completely different because I need to go make 65 to 90 grand to make this life work. Yeah. What's the total mortgage? Tell us that picture because let's see if we can lower your expenses. Yeah. So we got a 7.5 interest rate, the house of $300,000, and we put 8% down or something like that. But the mortgage is for $300,000? Yeah, yes. And I was kind of assuming you guys were, it was $2,500,000, and I was kind of assuming you guys were going to tell me this,

which is okay, that I need to go get a different job. I'm totally fine with doing that, doing this on the side. I just kind of needed to know that somebody, you know, with the name Ramsey, like on the title, would give me the okay to kind of do this. Well, here's the thing. It's already tight. Just if right now, if your wife said, hey, I'm not going to work anymore, with just the two of you guys, this would be almost impossible.

But now let's add kids to it and it becomes 100% impossible. And I just, I don't think that you want to enter into that and thinking, OK, God will just carry me. I think that that's going to be a fool's errand if you do that. I think that you need to look at this and go, OK, let me count the cost before I build this tower and let's find out how this works. And the truth is, the math that you're doing right now does not work. And so you're going to have to say, okay, what, what must I make in order to allow my wife to stay home with at least a little bit of comfort? Because what will happen is if you, if she's staying home with no margin, that means I'm home with two, one or two kids, or I don't know how many kids you guys

are planning on having. And she doesn't have any place to go. And right there I can tell you that's a tough recipe uh when she's because she's going to feel that more than anything because she's if she's staying at home she's probably the one doing the grocery run she's the one having to look for things for the kids to do all day so if anybody's going to feel that um lack of margin it will be her that makes sense yeah totally I agree I'm going to send you a great resource vinny it's ken coleman's find the work your wire to do it comes with a get clear career assessment i want you to read it take the assessment it's going to help you figure out what are the underlying skills clearly you love to be working with youth you're a great teacher educator let's use those underlying

skills to find you some core income that's enough to sustain the life that you want. And right now you're between a rock and a hard place. You're saying, I love what I do, but we also have this other dream here. Well, one of them is going to have to shift. Yeah. You know, George, I love the idea of a stay at home parent. I mean, I love it. My wife now stays at home. Exactly. It's amazing. But how would you feel? I mean, the stress that the blessing that that can be, but also the stress that can come from that if it's not the right time or if the finances are not there to support it. That's the part that we get that call very often. You know, she stays at home. I make 40 grand. We've got three kids. We're drowning. What do we do? Well, he's got the blessing right now of kind of foresight. It would be foolish for him to do this

having heard what we've just said. Yes. They have two incomes. They don't have a kid yet. There's some planning we can do here. Yeah. So this isn't a giant shock to our financial future. Yeah, because a lot of the calls we get, they're already on that side of it. And it's really hard to get the ship upright at that point because time is limited. Resources are limited because now the kids are already part of the equation. So if on this side of it, if you can say, OK, what needs to happen? And the point is, on any choice, there is going to be a measure of sacrifice and you really can't get past that. That's just life. Very rarely do we get to make a list of wants and just jump into all of them with little to no sacrifice.

There is a cost associated with anything you want. That's right. You got to choose. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's

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CFO's Guide to AI and Machine Learning at netsuite.com slash ramsey. It's free at netsuite.com slash Ramsey. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is a best-selling author, George Campbell. We're taking your calls this hour, so if you want to get involved, it's easy to do. Call the number 888-825-5225. We'll get you on. All right. Let us go to the phone lines where we've got Lori in Orlando, Florida, my neck of the woods. What's going on, Lori? Oh, hello. Thank you so much for taking my call. I appreciate it. Okay. So I noticed that we recently signed a lease for a place. And then at the end, there's a calculator that shows you like a mortgage rate and it's the mortgage rate is a lot lower than the rent. So would you recommend, um,

we're following Dave Ramsey's plan and we were trying to save up for the baby, the emergency fund. Um, even though we're not in a position to buy now, um, I'm thinking why would the mortgage, I mean, the mortgage seems lower. So what would your advice be? Follow the steps and become ready to buy a home or because it's better to rent? So I'm just kind of wondering about that. Yeah, I mean, the truth is, over time, it's always going to be a better choice for you to buy over rent. But the biggest deciding factor in whether you buy or rent for the moment is what you can afford. And so... And we have a very specific definition of what that looks like. Because guess what? The bank is going to loan you way more than should be legal.

And you'll go, oh my gosh, the bank thinks we can spend $2,800 a month on our mortgage. I guess we can, even though we make four grand. They'll take you up to 40%. So here's the parameter to keep you in line here. It's 25% of your after-tax income. So this is after taxes, but before other deductions, like your 401k investing or healthcare, you want it to be 25% of your income. And we only recommend a 15-year mortgage. And then there's parameters before that. Also, Lori, we want to know, we want it to be a blessing for you. Like

we never want somebody to get into a house and then the house has them. Right. And so for you and not just for you, but for everybody, we want to make sure that you're out of debt. Right. Because we don't want you having a bunch of payments. We want to make sure that you have three to six months of expenses saved because the worst thing ever is to buy a $500,000 house. And then the $5,000 AC goes out and you can't afford to fix it, right? Oh, that's not going to work, yes. That's what people don't factor in is the extra cost of home maintenance, repairs. The risk is on you.

The homeowner's insurance is more expensive. Property taxes can and will go up. HOA fees can and will go up. And so that's why we want you to be debt-free, emergency fund in place, have a strong down payment, try to avoid that PMI, private fund in place, have a strong down payment, try to avoid that PMI, private mortgage insurance. And then you can use our mortgage calculator. You can go to ramsaysolutions.com slash real estate.

We've got tons of tools and resources for you there. And so I know it looks like, oh, we might as well just spend that money on the mortgage, but that could be on a 30-year high interest rate, all of these things, and you may not be quite ready to jump into homeownership. Yeah, good question. Thanks for the call. All right, let's go to Nilly in Hartford, Connecticut.

What's going on, Nilly? Hello. Hi. How's it going? Going good. How can we help? I'm good. I've been running my own business for a little over two and a half years now

I've been having trouble finding services that give me good information I've called all the biggest accounting firms and stuff like that What kind of information are you trying to find? I'm trying to see if I should incorporate as an S corporation

I see all these TikTok videos and if you do this and you have this board of directors. And they told you to write off a G wagon and go spend 150 grand? No, I'm definitely not doing any of that sort of stuff. Is it just for liability protection? Well, liability as well,

because I've been working this business seven days a week since I opened it. I haven't hired anyone yet, but I am going to be looking to hire someone. I do have a lawyer who's very good. What kind of business is it? I do trading cards. Trading cards?

Magic the Gathering. Okay. Do you have an LLC right now? No, I'm a sole proprietorship. Okay. And why do you feel like you've outgrown that? I started this business with like $3,000 in my pocket. And I'm slated to make close to in sales a million dollars this year.

Nice. So I just the thing is I paid like it was like over $50,000 in taxes last year. So what are you doing right now? You're just doing business as whatever. Yeah. Okay. I mean, yeah, I would sit down with an accountant and say, what makes sense for me to do? I mean, my husband and I, we did an S-Corp, but an accountant's going to be able to say, what's the best for your tax purposes, for your business type, for your liability. They're going to be able to decide what makes most sense for you. But congratulations, a million dollars is pretty sweet. Yeah, I've called like all the biggest accounting firms in the area. You don't need to call the big accounting firms.

I would get with a Ramsey Trusted Tax Pro. Go to ramseysolutions.com, click on Trusted Services. I'd get their opinion first before making any moves. And I think they're going to look at your actual number. Something we can't do on air right now is unpack your entire business and give you very specific tax advice. That would be unwise. We're not experts in that field, but I would contact one of our Ramsey trusted pros to walk you through this. And they might go, yeah, you're at the point where this makes sense. Here's how much money you'll save. Here's the reason you're doing this.

Only work with someone that is willing to teach you, who's willing to educate you on the next move instead of just go, just trust source. Trust me, bro. I got this. Good call. It's a good thought. Thanks for the call, Nellie. Let's go to Zach. He's in Indianapolis, Indiana. We're just working, George. Let's go. What's going on, Zach? Hi, how are y'all today? Doing great. How can we help today? So I'm in the process of looking at purchasing a new home. I kind of have some scares with the market the way it is. Just at least in my area, it seems like a lot of homes or prices are valued a lot more than what the home really is worth. And I'm actually in the process of trying to sell my home and trying to be fairly fair about it,

but again, trying to buy something at some of the prices is making it a little difficult for me to sell mine. But the biggest question is my situation has kind of recently changed. My wife and I have no biological kids, but we decided to foster and ended up adopting three of the kids. Wow. So my wife and I, I'm a trade plumber, done it for years, almost 10 years, went through the UA and stuff. And I actually recently got out, took a maintenance position just to have more time at home with the kids to help my wife because never having kids before, I'll be honest,

we didn't really realize what we were doing. What are their ages? Not that I don't love every minute of it, but we're trying to figure it out. We've been doing it a little over a year now and it's been up and down. But aside from that, we're wanting to buy a bigger home. We're in a two bedroom and three kids and plus the dogs. And it's just not ideal. It was a perfect house for just my wife and I, but it's not practical anymore. But what would you get if you sold it for what you're wanting?

What would be the net profit after the mortgage is paid off, fees are paid, all that? Well, I really wouldn't be walking away with anything beyond what would pay my down payment on the new home. Which would be what? I'm wanting to arrive around $15,000, $15,000, $20,000. So you'd net $15,000 and and then you turn around and put that down on the new home correct so there is more profit coming from the home but i want to use that to

pay off a couple things just to help balance out do you have other debt what a mortgage payment would be um not a ton um my debt right now i'm right under under $100,000. That's a lot. I owe $64,000 on my home. I have a one-car loan. That's $30,000 a used car. My wife's income as well as mine together, we bring about $115,000 a year. So the $100,000 that you mentioned, that's including the current mortgage of $64,000? That is correct. Okay, so we'd clear that out, and then after that, you'd only have

the $30,000 car? Correct, because I'd be paying the rest off. Do you have any savings? I do have a motorcycle loan. Yeah, we do have some savings, not a whole lot. We've got roughly right about $8,000, and the big reason for that is because we didn't know about this until after we had adopted the kids, but we received benefits for them, which we'll only get until they're 18. But I kind of feel greedy taking it, but we try to use that money to help pay off debts as well. And we do use it on the kids. You shouldn't feel bad for taking that money because it's there to help you take care of the kids and they're now part of your household.

You paying off debt is helping you take care of the kids and they're now part of your household. You paying off debt is helping you take care of the kids. But here's the bad news, Zach. I would not move forward with this. Not because you're not in a good spot to buy a home with the market, but because you got some work to do. Clean up the debt, get an emergency fund, get a bigger down payment. I would rent for a year in a house that makes sense for you guys and then make the purchase once you're in a better spot. Yeah, I agree 100%. It's going to feel like more of a blessing. If you do this house right now, it has the ability to bring a lot of chaos financially into your life. So I agree with George. This is The Ramsey Show. For free tools and resources to help you reach your home goals, go to ramseysolutions.com slash real estate, or click the link in the show notes.

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All right, thanks for hanging out with us on The Ramsey Show. I'm Jade Warshaw. Next to me is George Camel. Hey, we're heading into fall and it's time to get your money on point. I don't know about you, George, but I feel like the holidays just hit. It's going to be Halloween here in a minute, which means in a minute it's going to be Thanksgiving and then it's going to be Christmas. And before you know it, it's going to be the new year. And most of us are going to look up and go, oh my gosh, I have made a real mess of my finances. Your brain just turns into pumpkin pie and you just go spend and spend and spend and go, well, what are you going to do?

It's the holidays. Yeah, man. And everybody's demanding time and money of you around this season, right? It's like, aren't you going to, are you going to bring the kids for Thanksgiving? And people are giving you their Christmas list. And you've got to buy the costumes.

Remember that party? You've got to buy a thing for that. And yeah, hosting the parties, going to the parties. What side are you going to bring to the party? There's just so much going on with your life and your money but let's try to get ahead of it before it gets worse it might be bad but it doesn't have to get worse all right and I can help you with that I'm doing a free live training uh here coming up Tuesday October 29th it's going to be at 1 p.m eastern time time, 12 p.m. Central time. This is your lunch break. Okay.

And it's on Zoom. So no one has to see your face. If you're still in bed, that's fine. I don't care if you're in your pajamas. I don't care if you're sitting in your car on your lunch break. You can get involved. You can register for free at ramseysolutions.com slash, wow, www.ramseysolutions.com slash webinar is where you're going to register.

And now here's the thing. If you can't make it in real time, still register because you can watch the link later. We'll email it to you and you can watch it later. But the point is over 100,000 people have signed up for this webinar series. And I've gotten to sit on there and help with you guys' questions, help you put together your budget for the first time, help you find margin, help you stop living paycheck to paycheck. That's what this is all about. And we can talk about goals, how to reach those goals. But the point is a budget is the number one way to eliminate debt. A budget is the number one way to build wealth. We know

that we've seen that. And a budget is the number one way to get on the same page as your spouse. So if that has anything to do with you, you need to sign up for this. And oh, did I mention a budget is the number one way to achieve financial peace. We know what we've seen it time after time. So it's the holiday season. Enjoy the holidays, but don't let it get crazy. And this is your way to get it all under control and make sure that you have a plan going into the holidays and going into the new year. Again, live training, October 29 29th ramsay solutions.com slash webinars where you want to go to register all right bridget is on the line she's in omaha

nebraska bridget how can we help oh my gosh hi friends i'm so excited to talk to you guys okay moral of the story i'm in a 23 grand in student loan debt and i'm living in delusion slash trying to get back to reality i recently got my identity stolen, and what that entailed was two cashier's checks taken out, and they closed my account, and I've only gotten back $358.59 out of the three grand. So I'm in this delusion land of when I finally get my money back, I don't want to keep screwing myself over, moral of the story. And I just don't want to see your guys' recommendation because I have $1,300 saved up in cash for the emergency fund.

So I'm trying to do the baby steps. I have an acorn value. Do I pull out the two grand? And then I just don't know what to do. So you bought some, is this single stocks, crypto? What's in the Acorn account? Single stock or the EECs or, sorry, the Invest Later or, oh shoot, I'm going to pull it up right now.

I should have been better prepared, sorry. But yes, they're non-retirement funds. I would cash them out and use that toward your debt payoff. Okay. Who's helping you with the stolen ID? Is this just you tracking this down yourself? Yes, kind of, but I do file the police report, and then the detective is just not getting back to me.

He hasn't responded since October 10th. So of the $3,000 stolen, you said how much is recovered? I've only gotten a check from the bank for 358 dollars and 59 cents and that was me being absolutely insane to the bank like going in every single day being like no figure it out because i noticed within 40 minutes that i went on to go get gas and then it said car decline like there's no way there's no way and then so have they told you the timeline is it under investigation what's the status? I'm under investigation, but the detective hasn't even got back to me. Okay.

And I've even gone down to the precinct, and I sat there for two hours. I'm like, I'm not leaving until he talks to me. And then he finally talked to me. He's like, I'll look into it. Okay. Yeah, you've got to be the squeaky wheel here. Have you put a fraud alert on all of your credit accounts and frozen your credit with all the bureaus? Yes. She also tried to open that day um two different credit cards and i put it since i noticed it so yeah okay so you acted quickly and to kind of mitigate this to keep it from spreading which is really really good

have you pulled your credit report to see if there's anything else that's been opened um it just said she tried to but it once she did it, it was already flat. Okay. Nothing got pulled. I would pull it just to make sure that whatever's on there is accurate, and you can do that at annualcreditreport.com. You can pull all three for free and just verify that there's nothing TBGB on there. You can also file a report with the FTC, the Federal Trade Commission, as well.

Yep, I did that. Okay. Good, good. You've done all the right things. On top of that, I would, for the future, the Federal Trade Commission, as well? Yep, I did that. Okay. Good, good. You've done all the right things. On top of that, I would, for the future, have ID theft protection, and I've got mine covered through Zander. You can go to zander.com to get that set up. This is for anyone listening as well, because I went through the same thing, Bridget, back when I was broke in 2013. I had just started at Ramsey, $36,000 in student loan debt, and they opened up these cell phone accounts in my name, racked up debt. I had collectors calling me. It's scary. That is scary. You feel just so exposed.

You lose just trust of humanity. It's not a fun time. So I'm sorry that you went through that. But it sounds like you've done all the, you've done the hard work to climb out of this. And now the next step is let's follow the baby steps. So you're working on the student loans. Is that the only debt you have? Yes. All right. Because I paid off, which I did. Oh, do you know how long? So I stopped paying my car payment, learned that the hard way, and then I was going to get repossessed. And then I was like, what are you doing? I was just being depressed, a little girly. And so then I just paid it all

off at once. I don't know if that was a stupid mistake or because now it's saying on my credit report that um they closed they oh she wouldn't say um they just did as a write-off and i'm like no but i paid you guys what do you mean was it in collections before um and no just went to collections once i'm not on my credit report oh well the the debt's completely cleared now you've paid it off completely yes listen i would i tried it i i wouldn't worry about it and then i wouldn't worry about it too much because you're about to pay off these student loans and your credit report's going to go to zero anyway okay so that's the way that works next let's list the student loans smallest to largest we'll make minimum payments on all of them but put any and all extra money on the smallest debt that's how

it works oh gosh let's take another call brian in baltimore we're up against the clock what you got going on brian hi how's it going thanks for taking my call um my main question was should i hold off on paying my student loans until i'm making more money well how much are you making now and how much are your student loans so right now i'm making about 70. Well, how much are you making now and how much are your student loans? So right now I'm making about $70,000. I'm currently a resident in training. Right now I have about $220,000 or so in student loans.

Is it your only debt? $300,000. I have about $3,000 in consumer debt, which I plan to pay off by the end of the year. Okay. Well, if I were you, I'd start, I mean, it's never too soon to start working the baby steps.

And so if I were you, I would do that. I'd set $1,000 of savings aside as soon as you get it. Do you have any money saved? Yeah, currently I already have my $1,000 emergency loan fund. I'm just working on paying off the consumer debt. Okay. Yeah. To answer your question, would I wait? If the $3,000 is the smallest debt, yeah, I'm going to pay that one off first. So in that way, yes, I would wait. But then when it comes to these student loans, is it all one lump sum or do you have it divided into a bunch of little loans? I have it divided into a bunch of little loans. going to do is we're going to look at all of the debt, including the consumer debt, and we're going to list it smallest to largest. Now with the student loans, some of them might be grouped together in a payment, and that's fine because we're going to make minimum payments on everything. But as far as what you have left after you've made minimum payments, you're going to put it at whatever the smallest debt is, whether it's a student loan, a credit card, a medical debt,

whatever it is, you're going to knock that thing out. And then that's going to free up money to go towards the next smallest debt. And so that's really the way this works. Is there any way to do some side hustling on the side? You said residency, right? Correct. Yeah, right now, not too much time to do any side hustling. How much margin do you have each month to throw at the debt? If I were not paying the debt, I would have about $700 in margin or so.

Okay. Yeah, if I had $700 a month and you said, what should I do with it? I'd go, let's start tackling this debt because it's going to be there. And so let's not be the ostrich in the sand. Let's be already attacking it and then just increase momentum once we make more money. Yeah, and if these are federal student loans, this might be a good time to kind of utilize one of those systems where it's lowering the minimum payment. So that way you have more margin available to throw out whatever the smallest debt is. But I want you moving with intensity if you choose to use that method. This is The Ramsey Show.

There's a time in your life and in the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget.

Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of home ownership today at churchhillmortgage.com. That's churchhillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumer access.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. All right. Thank you for listening to The Ramsey Show. I'm Jade Warshaw. George Camel is next to me, host of The George Camel Show on YouTube. Today's Ramsey Show question of the day is sponsored by YRefi. Hey, it's hard to make progress when you're trapped under an avalanche

of defaulted private student loan debt. I know for a fact, but YRefi helps you dig out and get momentum with custom refinancing based on your ability to pay and a lump sum payoff option you could qualify for after 24 months. Go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. May not be available in all states. Today's question comes from Sam in Pennsylvania. My fiance and I are considering a new home build in the $500,000 range in our dream community. Together, we earn about $120,000 a year. We have a child and no debt other than my current mortgage, which doesn't have a lot of

equity. We're cash flowing our February wedding. We'll be putting down $25,000 to reserve the lot and another $25,000 for an additional down payment before closing. Are we moving too fast considering everything going on in our lives? On one hand, this is a phenomenal opportunity that gives us exactly what we want and can afford. But with the wedding planning and moving costs on top of everything, we're still on the fence. Please give us permission or a swift slap in the face. Wow, I got aggressive real quick. I think she knows that they might need a little bit of a slap. Yeah, this is, I mean, they say they can afford, but Jay, I'm out here crunching the numbers and I'm going, okay, $500,000, they're putting about $50,000 down to 10% with the interest rates where they're at, private mortgage insurance, because they're not putting

20% or more down, property taxes, homeowner's insurance, potentially HOA. What are we looking at? We're talking $4,700 a month. Didn't she say they make $120 a year? They make $120 a year. And so the question is, what are they taking home? Because I doubt it's more than $8,000 or so. And so you're talking a $5,000 mortgage with an $8,000 take-home pay. Wrong answer.

Unless there's something we don't know about, this sounds like a horrible idea. This house in the dream community is about to become a nightmare if they do it right now. So the fallacy is, if we don't do it now, we're always going to look back and go, oh, the one that got away, why didn't we? Now that home is $700,000 in our dream community. Yeah, but you're not coming into it broke, calling in the show going, Jade, we made a mistake. We did a lot at

once we had the wedding we bought the house we couldn't afford and we need to sell now and we're gonna lose money on this oh my gosh that's what i see in their future in my crystal ball yeah plus i'm listen they're not even married yet we always say it's a good idea unless one of the people already owns a house of their own you know he said he owns one but he's got no equity so he's gonna he's probably gonna break even break even on the sale here. That's fine, but they could live there for a little while. Or if he's going to sell it and they break even, whatever, go rent for a while.

I would not rush into a buy. This reminds me, George, when my husband and I first got married, there was a community. Jackson Valley was the community. Sounds ritzy. My point is, if you go in that community now i'm like why did i care about this so much back then you know what i mean what were did i have nice amenities

at the time they were kind of like uh craft uh craftsman style yeah that craftsman style and i just thought this is amazing and now i go and look at it i'm like they're old just like you know they're 20 years old you know what i'm saying And so the idea that you won't love something else. The shininess wears off quickly. There's always going to be something that's the dream. You know, there will always be a great opportunity. And we always recommend, listen, if you're about to just get married, get to know each other. Rent for a while.

That's what I'm saying. Like home ownership and building a new home. It is a part to full-time job to be doing that. Yeah, to build too as you're, that's a lot. A lot of decisions to be made, a lot of chaperoning to be done on that project. So I would just rent for a year, keep saving up, and then we'll see where we're at. Maybe you have a hundred or 200 down a few years from now. Now we can step into this with peace. So would you call this a swift slap in the face? I'm not going to slap. I'm not slapping anybody, but I'm going to, I can't give you permission and I will say not now. This is a wait. I like that. Not no, just not now. No violence.

Yeah. All right. Let's go to Matt. He's in Toledo, Ohio. What's going on, Matt? How can we help you out? Hey, thanks for taking my call. How are you doing? Uh-huh. We're good. How can we help? Uh, yeah. So, uh, just got a letter in the mail today from the local courts with a judgment against my name for a total debt from a credit card company, the amount of $2,380 for a card that I did not open. Oh, that sounds like fraud then, does it not? Yeah. Have you ever done business with this company? Did you ever have any accounts or apply for a card or anything like that?

No, I did not. It's actually a Spirit Airlines credit card. Oh, no. Insult to injury. Okay. Have you contacted Spirit's credit card department and said, Hey, this was opened fraudulently and I need proof and here's the statements and you know all of that to get to the bottom of it no i have not i literally just got this letter in the mail probably 45 minutes to an hour the other question are you

sure it's legitimate there's a lot of scams out there where they make you think it's a collector and they say hey if you pay us this then we'll call it good that's a good point and so i would be seeing what the name of the company is and then research that company elsewhere. Don't contact them through anything on that paper. Look them up online. Yeah, on the summons from the court, the company that filed is LVNV Funds, LLC. Okay.

Is it showing on your credit report? If you pull up your credit report, are you seeing that this credit card is part of it? I have not pulled that up yet. Go to annualcreditreport.com and pull your credit report from all three bureaus and see if it's reflected on there. If it's not reflected on there, it's likely a scam. And the other thing you can do is contact the actual court and go,

hey, I got this in the mail. I know there's a lot of scams going around. Is this legit? Because I didn't open this, and I know there's a lot of things going around right now before i you know people get freaked out and their goal is to freak you out and say but if you just pay us a little bit of money we'll make it go away yeah yeah yeah i would do my due diligence on this when i get off this call that'd be my next move would be to check the credit report if it is on the credit report i'm gonna freeze it and i going to drill down on this and make sure the the right parties know that this is fraudulent um but i agree with george i would not

deal off of that paper in front of you and then document everything document your call with spirit what happened what they say what was the name of the agent what time all of that so you have all the info okay and the other thing that says on here is it was filed. The judgment was filed on August 30th. Okay. Which is, what, two months from pretty much Thursday or Wednesday. So I don't know if that's, I don't know why it took so long to get the paper to me. Listen, we can't answer these questions until you drill down a little bit further because. You got some phone calls to make.

I'd be calling the courts. I'd be calling Spirit. And I'd get to the bottom of it. But just know, I mean, don't pay this. Don't pay anyone a dime for anything. That's the bottom line here. And then make sure you freeze all of your accounts with all the credit bureaus. So you got your day ahead of you, man.

And this is another opportunity for that ID theft protection. I mean, this is the second one in the last hour, George, where we're seeing this. Yes, it's happening more and more. Yeah. And Xander is where you want to go. They're going to make sure that you're protected. And here's the thing. What I love about Xander is they're going to fight the fight for you.

Because when you have identity theft, the amount of hours that you have to put into tracking people down, trying to recover the money, trying to explain your case, trying to tell them what happened. Ain't nobody got time for that. But if you have ID theft protection, they're going to do all of that for you. And it's so cheap. George, I think- Yeah, we're talking the cost of a pizza. Six, 12 bucks. It's not a lot. I know for my whole family, I don't think we pay more than $12 a month. And so if you don't have it, this is a good time for you to look into that because you never know. And especially around this time of year, George, coming up in the new year when people are doing their tax returns and they're waiting for that refund check to come

through, that is where people experience a lot of theft. And so there's a lot going on. So you want to know, A, if it's real. I had a text come through the other day from a bank saying, somebody's been using your card. Scam. Wow. Was it your bank? Did they say it was your bank? Yeah, it was Ally.

And what I do is I usually, if it's a phone call, if it's a text, I'll usually Google the number. And a lot of times if it's a scammy number, it'll show you as a scam. Yeah. But what I never do is I never contact directly through the text through the email through the letter i'll usually say okay if it's ally let me just contact ally from with the info on their website yeah or you can even spoof numbers and emails now so it looks like it's coming from legitimately

that website yeah it's not but if you contact them through that same email, it'll actually go to Ally. So you got to be real careful. And I know like the elderly, they're very highly targeted with these because they're not as savvy as the youngsters, but this affects everyone. So go to Xander.com, get their ID theft protection. Every single team member at Ramsey, Dave covers it because it's that important to us. Yeah. And if you've been working our plan and your credit score is rolled to zero, make sure you've frozen your credit because there's no reason for you to access it. And when you freeze it, it makes sure that nobody else is getting to it either. All right. That does it for this hour of the show. Thanks for hanging out with George and I. Stay tuned because we'll be right back with another hour.

From the Ramsey Network, it's The Ramsey Show. I'm Jade Warshaw. Next to me is George Camel. We are your hosts for this afternoon. We're talking about your life, your money, your relationships, your career. If you have something that's burning in your spirit that you need help with, you have a question that you need the answer to, George and I will do our best.

We'll put our heads together and come up with a solution for you. If you want to call in, the number is easy, 888-825-5225. Kelly will pick up, screen your call, get you on the line. That's how it works. All right, let's get into it, George. We've got Cash, very ironic, from Columbia, South Carolina. What's going on, Cash? Hey, guys, how's it going?

Thanks for taking the call. You bet. How can we help? Yeah, so recently I've been in contact with the bank looking to see if I shouldn't do a cash out refi and the goal to try to pay off my mom's house. Interesting. What's going on that you feel the rush to pay off your mom's house? I mean, she's not getting any younger. And there's been some recent health scares. So looking to kind of simplify for her

and just kind of make sure that, you know, however long we have her, she has, you know, just a rock star rest of her. And over many days, she's got left, you know. Listen, I love your spirit of generosity. I think that's great. Generosity is one of those things. I always want to make sure that we're in the position to be able to offer it without detriment to ourselves.

So tell us a little bit more about your financial situation to see if you're in a position to help. Maybe not with a cash out refi, but in another way. Let's see. Tell us about your debt, your income. Yeah. So income is currently $60,000 a year. Don't have any debt paid off, car, everything. The only debt that I have is the home that I'm in right now that I would be cash out refining, which is purchase price is $135. Current evaluation is $180. Okay.

What do you owe on it? $90. Okay, so you're going to do a cash-out refi on your own home and then take that money to pay off mom's mortgage? Yes, sir. What's left on her mortgage? $90. Which is all the equity you have, if you're lucky. Yes, sir.

What's her income situation? She makes about $20 an hour. I'm not sure what that breaks down to. Does she work 40 hours a week? 30 hours now since the diagnosis um that's the diagnosis what's the diagnosis um uh diabetes okay and um how old is she um 60 60 did she just become diagnosed with diabetes or is it something that's progressed and it's gotten? It's something that's progressed. Okay.

You're breaking up on us, Cash. Sorry, speak directly into your phone. Yeah. Here's the bottom line. It's something that's progressed. Here's the bottom line, Cash. Doing this is the equivalent to you going out and taking out a $90,000 loan at 7% interest in order to help mom out. So now you're going to have an $180,000 mortgage, which is going to be

a lot for you to handle making 60K, all so that mom's going to be okay. I just think there's better ways to help. That might mean a stipend every month to help support her if she's low on cash or whatever it may be. Maybe she moves in with you eventually if she needs more care and can't afford the mortgage. But I would not do this good deed that puts you way behind. It's moving you backwards financially. And I want to see you have your own mask on first. I'm 100% along with that. I think it's great that you have no debt.

And I think it's great that you're looking for ways to help. I think paying off the mortgage causing you to go into debt is not the method. I like Georgia's idea of maybe it's a stipend. Maybe you're coming alongside her and really asking her, hey, mom, what is your need? Because she's making money. What other information do you have about her financial picture? Has she let you know, hey, this is tough for me. I'm having trouble making ends meet. What has she said to you? It's nothing too clear. Just the general sense. You can feel it when somebody's got some anxiousness and the washing machine goes up. And that's where I'd love for you to be able to step in. If you've got a bunch of savings, go, hey, I'm going to get the washing machine fixed. Don't worry about that. There's ways you can be generous

without making this giant financial move. And on top of that, I would sit down with her and make a budget with her and say, hey, mom, what are your actual expenses? How much are you actually bringing home a month? What does this look like for the foreseeable future when you factor in, you know, maybe social security? And are we going to be able to make this work? Does she want a sustainable solution? Yeah. I mean, I know we're asking you a lot of questions about somebody else's financial picture, so you may not have these numbers, but do you know, does she have a nest egg of any type? You broke up on us, Cash. We're losing them. Are you there? Yeah. Do you know, does she have a nest egg at all i don't believe so okay well you know

to george's point you're gonna need to sit down with her i don't know sometimes it's hard to get parents to uh divulge the information that we want right powdered butts yes that's how i'm looking for i don't want to i don't want your financial advice exactly so that's a tough one but the fact that she's 60 and she's working um and she's got a health concern and she's still working through that does does point to a little bit of a that's a green flag that there's probably a financial strain going on and i love his heart to want to help with that but the truth is i mean you do not have to set yourself on fire to keep somebody else warm oh i, I like that. You know what I'm saying? I got that from Viola Davis.

That's a very good quote. But the truth is, we feel guilt. If you're in that situation, here you are looking at your parents. They've taken care of you their whole life, right? And you see a situation where, okay, they could use somebody to help them out. There is part of us on the inside that feels like, okay, this is my duty to step in. And sometimes we'll do it at a fault. When we've got our own kids, we've got our own family that we could possibly put them in a worse situation

by stepping in when we're really not equipped to do so. That's tough. That's tough. And again, it's gonna be carried on generationally if you keep going backwards instead of moving forwards. That's tough. That's tough. And again, it's going to be carried on generationally if you go keep going backwards instead of moving forwards. That is true. All right. Let's take a couple of social questions. Yvette says this. Hey, do you have any tips for a stay at home mom to make income while she's at home? George, I feel like you could speak to this. You got to stay at home

mom at home. Yes. There's a lot of things you can do from home, but you have to understand that unless you have experience and skills that can, you and skills that you can work a remote job making serious money, a lot of them are just not worth your time on like, I'm going to do surveys or one of those, or I'm going to do multi-level marketing and build up a business. Those things I do not recommend. So what I would do is find things with your skill set, with your experience that might be customer support roles. Virtual assisting is a great one to do. I love that. You can make 20, 30, 40 bucks an hour doing this remotely. Yeah. From home and sometimes on your own schedule. I said it the other week and I'll say it again. The other day I ordered two recliners from Wayfair. They came

and they were not what I expected. And so I needed to send them back and I had issues with sending them back and I hopped on the customer service. It was all via text. Oh yeah. And I thought to myself, whoever has this job, like this person calls into the Ramsey show all the time. They're looking for something that's work from home. Maybe there's a disability that's limiting what they can do.

But I'm like, if you can do a customer service job that is texting, which means nobody has to see your face, nobody has to hear your voice. Like there is, there are options out there. No matter who you are, stay at home, mom, if you've got some limitations, there's a lot. And you can go check out our free side hustle quiz, ramsaysolutions.com slash side hustle. Our team created a quiz that walks you through, hey, how much time do you have? What are your talents? What is your target? Here's some ideas to get you started. Perfect.

Perfect, George. Coming in clutch. This is The Ramsey Show. I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly

and they don't have life insurance. When you have to think through how am I going to pay my bills? How am I going to eat next week? Yeah, in the middle of all that grief. It's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get

because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza to get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com.

You are listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me is George Camel. Hey, let me tell you, this weekend here at ramsey was a really amazing weekend we had our money in marriage uh getaway event it was our second one that we've done here on campus in person and it was incredible george and i were both part of that but dr john deloney and rachel cruz were kind of heading that whole thing up it was great we had 500 couples from all across america here on campus they spent the weekend here with their spouse, and it was pretty freaking awesome, George, if I do say so myself. It was. I can vouch for it. And it was so good that they wanted to do this

for people who maybe can't visit Nashville. Yes, which I like that. And so we're doing a brand new virtual event called Money in Marriage Date Night. And this is one you don't have to worry about the flights and the hotels and all of the expenses that come along with that. So grab a virtual ticket and you can tune in tomorrow night from anywhere, even your couch. John and Rachel will be ready to guide you and your spouse through this one night refresh for your connection and communication. So you can head into this busy season as a team. Tickets cost just 49 bucks. You can get yours at ramsaysolutions.com

slash events or click the link in the description if you're listening on YouTube or podcast. Love it. Meeting people where they're at, be there or be square. All right, let's go to LaDonna. Houston, Texas is where she's at. What's going on, LaDonna? Hey, how are y'all doing? I'm doing good. How can we help? Well, I'm 74 years old and I'm trying to get my estate in order i have four hundred thousand dollars in cash that i need to know what to do with it to protect it so that my two sons get it and that it doesn't go through probate and also that it's accessible and available in case I need it for care. Do I put it in a trust? I have a trust set up.

You do? Do I put it in CDs? Do I invest it? Do I buy real estate? What do I need to do? What? Right now, it's just in CDs. You've already got, what kind of trust is it that you have set up?

Just a plain, a revocable living truck perfect okay so you could put it within the trust and then name the kids as beneficiaries and that will simplify the distribution process but okay is that the best thing to do yeah i mean and then that'll give you the most control over what happens with it i mean if you have them listed as beneficiaries on the bank account they're going to get the money. Right. Was there something you wanted to do with the money in the meantime? Well, there shouldn't be taxes. I'm sorry?

There shouldn't be taxes on this inheritance, and you're likely not going to have an estate that's going to trigger taxes that's beyond the amount. We're talking millions and millions and millions. So I'm not worried about this, but I would also make sure that you're working with a good estate planning attorney, walking through all of these different things and setting this all up in a way that suits your wishes. Okay. Are you doing this alone? Well, no, my trust and attorney set up my trust. Okay. But this money was separate from that.

I would ask them. I would just say, hey, I want to make sure that it gets split between them with very much an easy process to distribute this, and I want both of them on this at this age or when this event happens, and they can make sure that you do it in the best way possible. That's their job. And I'd be looking for a way, too, that it can grow over the time between now and then. You live to 94 and for the next 20 years, the 400K is just sitting there making nothing. Well, I'm at a point in my life, everything is paid for. I don't need any more money. I don't

want any more problems. I don't want anything else to have to take care of. She really said, no money, no problems. She said, I'm not trying to make more. That's more problems on my hands. I'm at the point in life where I want to just be simple. I want to put it up where they get it if something happens. Is it in a high-yield savings account? No, it's in a CD.

Oh, okay. What's the CD making right now? Is it like a 4.5% or 5%? Yes. Okay. That's fine for now. Once the CD, you know, matures, you're going to have to do something else with it, right? Right. Because you might need this money. Is that true? Or do you have other money that you can use to live and cover any of your expenses? Well, I do. I don't have to touch this. I have my retirement and my social security and it's enough for me to live on okay yeah i mean after after the cd matures i i talk with a smart investor

pro and see if there's another way that you can invest this something that you understand that's easy to be managed and that way at least it's growing from now until the day that your your kids get their hands on it and the other idea is you could gift it to them while you're alive yeah i mean you can do up to what 17 grand per year without triggering any of the gift tax uh pieces that's a good idea and you know i like the idea of helping them giving them a leg up yeah while they're while they're still younger the biggest part of this the biggest part of this i think is to make sure that they know what's coming to them whether it's yearly like you're talking about um or if it's something that's going to be a lump sum kind of letting them

know here's the money that's coming and just letting them know uh so it's not a surprise dave always talks about that which i think is a good a good idea love it all right thanks for the call good subject matter there let Let's go to Mark. He's in Kansas City, Missouri. What's going on, Mark? Thank you for taking my call. You're welcome. How can we help? Well, my wife and I are both 60 and we're living on my disability check because I have a terminal illness and we've racked up some consumer debt. Prior to that, we were completely debt free, just things that I wanted to go out and buy. But now we're in a position where the roof on our house was not installed correctly seven years ago, and we have severe water damage, rot, and water coming into the house.

Okay. And so I need to get the roof done, and I'm questioning whether we should finance that, possibly put the consumer debt and the repair together. I know you don't like debt. You're talking about doing a debt consolidation loan? What do you mean putting? Oh, a HELOC. Tell us more about what are you getting every month from disability? Tell us more about the rest of your financial snapshot. Okay.

I get $3,060 a month. Is your wife on disability too? She is not. In fact, she's never worked. She stayed at home and homeschooled our children. Is she able to work now? No. She is physically not able to. Okay. But not on disability?

But not on disability. Okay. Do you have anything in savings? We have $750 in our emergency fund. Anything in retirement accounts? No. Okay. Nothing. Okay. And I don't know, you know, when you deal with disability and Medicare and Medicaid, They like to tightly control your amount that you can save. And so there's really no way for me to save this up without hiding it away somehow. How much is it going to cost? What's it going to cost to get the repairs you need on this roof? We have $14,000 in consumer debt, and the quote on the roof is just over $14,000.

Okay. Have you gotten multiple quotes? Yes. Have you contacted your homeowner's insurance? We did, and went through them, went to the people who put it on. They only offered a two-year guarantee on their labor. But you're saying they installed it incorrectly? They did, yes. That feels beyond the scope of, well, I'll guarantee it for two years. I would see if you can fight this between your homeowner's insurance and the company that installed it. Truthfully, Mark, this is your

only option. And then you're going to have to start looking around at maybe whatever you can sell. What are your vehicles? Tell us about. Oh, probably around $1,500. Okay. The tough part here is, listen, we're never going to tell you to go out into debt to solve a problem. There's a lot here. And you may need to reach out to some other places for help. But I'm with you. I'm going to fight this because if i'm dealing with the fact that i got a new roof seven years ago and it was not installed correctly there's no way i'm paying full i'd be contacting an attorney yeah this is the ramsey show hey you guys i'm not a fan of the big banks and you probably already know which ones i mean

but i do like credit unions because they're non-profit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years, and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join, and Fairwinds partners with more than 5,000 credit union locations around the country. So you can bank in person wherever you live. But if you prefer

the online experience, you can log on to Fairwinds and do anything you could do at a physical location. So go to fairwinds.org slash Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. You're listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me is George Campbell.

If you want to get in on the conversation, the number is 888-825-5225. George! It's time, Jade. It's time. For our long-running segment, Talk Nerdy to Me. Hit me with that jingle.

Here is the nerd topic of the day that I'm going to break down in less than two minutes to help people out there understand it. These $10 words out there that bother me when they're thrown out like jargon, but they're important, all right? Today's word or phrase, dollar cost averaging. The old DCA, as they call it in the biz. No one calls it that but nerds. I just want you to know that.

Yeah, Instagram nerds. Dollar cost averaging is an investment strategy to save for retirement. And it's this simple. It means you're making regular investments over time, regardless of what the stock market is doing. Yeah. I don't feel like it even needs a term. Why do we need a fancy name for that? It's focused on the consistent dollar amount you invest. As opposed to dropping a lump sum every once in a while. Yeah, irregular amounts or a lump sum once a year. So we recommend dollar cost averaging for your long-term investing because the longer your money stays in one place, the more it's going to grow.

And investing consistently over time in one place, that's how you beat the market fluctuations. So if you're scared of the roller coaster, this one's for you. I also think it helps build a nice habit, right? You're building the habit of investing when you say, okay, every month this is automatically coming out. I know what the amount is. I mean, we say 15%. And then you live on less. When you know 500 bucks is going out of your account, you just tend to live. After a while you don't think about it. Yeah, exactly. Out of sight, out of mind. So if you put, let's say 500 bucks a month into your 401k or an IRA every month, you're essentially buying shares of the mutual funds. That's what you're doing with that $500. But remember, the value of those funds could go up or down each month. So sometimes, some months, that $500 goes a long way. It goes farther

because the prices are down. Stock goes down, that means you're buying it on sale. Think of it that way. Price goes up, you're buying it at a more expensive rate. But again, you're dollar cost averaging. So think of it like your gas tank. Some months, your 200 bucks you budgeted for fuel gets you 60 gallons. But the price per gallon drops, the same 200 stretches further, you get an extra 10 gallons, you get 70. And so if the price goes up, that's great too, because your shares are worth more. So it's a very glass half full kind of mentality here. And look at the numbers here. 40 years of investing, 500 a month at a 10% average rate of return. It would have grown over to over 2.6 million thanks to compound interest. Yeah. Wow. And of that amount, get this, you only contributed, you only put your own money, 240 grand is what you put in. It turned into 2.6 million.

The power of time. So it over-intensified. You made over 2.4 million of free money because of the power of compound growth because you did dollar cost averaging and here's the great news for you we surveyed millionaires over 10 000 of them investment consistency was one of the most important factors in building their million dollar portfolio they were actually average investors they weren't great they weren't prodigies they just put the same amount away every single month for a long time i love that if you want to learn more, go to ramseysolutions.com slash invest. We've got a free complete guide to investing, or you can click the link in the description. If you're listening on YouTube or podcast, this guide is going to teach you everything you need

to know, including how to develop a personal investing strategy, how to pick the right investments using the Ramsey principles. I love that. There you go. It was painful, Jade. Painless. Oh, you're right. I don't know why. It was painful for me. Was it? Yeah. Well, let's take it a step further. So, I mean, somebody out here is like, yes, George, thank you for that because I didn't know. But how do they know when they're ready to

start dollar cost averaging their way to millionaire status? Oh, good question. A lot of people go, I want to start now. There's a time and place for that now. And it's when you are out of consumer debt, you have three to six months of expenses saved in that emergency fund. And that really becomes you're never going to debt again insurance. Yeah. Now we're ready to invest because we have our income back in our hands. Before we were giving it out to lenders every month. There you go. And the big question there is, George, why do I need to wait? It would be nice to wait. You're saying it's so important to start early. Yeah. Why wouldn't I want to start now? Tell us more. Well, because when you do 17 things at once, you never really get anywhere.

And that's most of America. If you've heard the calls, they go, well, I'm broke. And I go, why? You make a great income. Well, we were trying to pay off debt, trying to save for the kids college, trying to go on vacation. And that's why the baby steps are so powerful. It's focused intensity. For the one through three, getting out of debt, get an emergency fund, focus intensity. Then we move toward intentionality

in four through seven. Yeah, because if you're investing the amount that we suggest, 15%, if you have debt, most people would not have that kind of income at their disposal until they paid off their debt, which is-

That's the other thing I get in the comment section. Where does this guy think we're going to be able to invest 15% of our income? And I go, go hey what's your car payment yeah well that's that's 600 bucks what's your student loan payment well that's 400 bucks well that looks oddly like a thousand bucks that you could be invested right right there it is which is 15 of an 80 000 salary which is the household you know median income now so okay it's possible but you got to decide is

our debt payments going to be normal or is debt free living and investing for the future going to be normal? Okay. So now you've convinced the person with debt to pay off their debt before they begin this journey. What about the person who's like, okay, I paid off my debt. Why do I need to save up three to six months before I start? That's the kicker. Because you get thrown off the horse at every little ankle bite or emergency. You go, well, I kept my savings low because I want to invest. Well, the problem is life's going to happen in the meantime. And the goal is we don't touch the emergency fund unless we need to. Yeah. And if you don't have an emergency fund, if you don't have an emergency fund, your investments become your emergency fund. Or Capital One's credit card becomes your

emergency fund at 25% APR. Yeah. How can you really build wealth when you've got that counteracting anything you might be building? It's dragging you down. Okay, so what you're telling us, George, is there's method to the madness. You got me all riled up, Jade. I'm sorry. I wanted to. I like when I get George's nerdy wheels turning. George is one of the smartest people I know.

All right. You need to hang out with more people, Jade. That's sad, but thank you. You're welcome, George. All right, let's go to Luke in Montgomery, Alabama. What's going on, Luke? Good afternoon, guys. How are y'all doing? We're doing great. Good. Hey, I was just calling. I've been struggling with this for a while. I have been working in finance and banking my entire adult career. And I have been really good at it too, which means that I have gotten a lot of people

into a lot of debt. I mean, we've even done equity lines and everything, and it puts more money in my pocket. But over the last few years, me listening to, you know, all of your financial advice and everything, it's starting to kind of become a little bit of a conundrum to me to continue working in this field. The retirement's great. The income is great. And I do my best to help people. Some people come in saying, I need this, I need this, I need this. But I tell them, well, you think you need this, but here's really what you probably would benefit more from. And only recently I had helped somebody with an equity line and they came back in after paying off what they paid off with their equity line and it was all swiped right back up. And I was like, this doesn't feel good anymore. You don't want to sell them

dead anymore. You're getting a front row seat to people's misbehavior and you feel like you're a part of it. Absolutely. You helped them sign the dotted line. So that's understandable. And let me say that it's not evil or immoral to work in the banking industry. You can do good work and serve people and help people, but you have a personal value, a personal value, a principle line that you've drawn, and I think it's eating away at your soul.

And that's what tells me, okay, how can we shift your skills? Because your skills are not getting people into debt. Your skills are helping people with their needs and serving people. And so how do we shift that to a different type of role and maybe a different sales role in a different industry or selling a different product that you can sleep well at night for? Yeah. What do you think? Yeah. It's just a weird thing. You know. As I've gone through more intense, like intensifying my own budget and getting out of debt and increasing my own investments and things like that, I start to want to share that with other people. Interesting. But in my own industry here, they don't want that.

I assume you're heavily incentivized and commissioned to sell these debt products. Sure, sure. And so that's where I go. Is there a job where you could be on salary and your job is not to push loan products, but you could actually help people make the right financial decisions? Maybe that's the mortgage industry where you help steer them toward the 15-year mortgage and you help them do it the right way to where you can sleep better at night, but you're still in the financial industry. It sounds like you enjoy being in the overall industry, but this specific niche of getting them lines of credit and equity, not fun for you. Listen, I dig into this further because the fact, and I don't say this in a negative way,

but the fact that you're calling us lets me know that this is really kind of bothering you. And rightfully so. I think there's moments in all of our lives, to George's point, you're not bad, you're not evil, you're not nothing like that. But each of us kind of comes up on these moments in life where we decide that something maybe that once was for us is not for us anymore. Like there's there's certain shows I probably at this point, I'm like, I'm not watching this anymore. It's total crap. For me, I would feel a sense of guilt spending my time watching certain things on television or eating certain foods. It's like I've outgrown it or I've realized the error in my way or whatever that could be. And I just call that maturity. I think it's a great thing.

I think it's a great thing to explore. If I were you, I'd be like, all right, Lord, what you want me to do with this? This is The Ramsey Show. Thank you for hanging out with us on The Ramsey Show. I'm Jade Warshaw. Next to me is George Campbell. Hey, if you want to get on the line, we'd love to hear from you. 888-825-5225 is how you get involved. Robert is involved. He's in Fort Worth, Texas. Come on, Robert. What's going on? Well, first of all, let me say it's an honor to speak to both of you guys.

My question is, what is the difference between a high-yield savings account and a money market account? And then where would I open one? And which one's the best one to put the money in when I'm building my step number three, you know, the three to six month emergency fund. I love that you're even asking these questions. It's a good question. So largely, as far as the actual definition goes, there's not much of a difference anymore. There's two things of note with a money market account that is different from a high yield savings. Number one is that money market accounts, many of them include a debit card and check writing privileges, which high yield savings account, they don't have that. The other one

that's a downside for the money market accounts is a lot of them have required minimum deposits and balances. Whereas a high yield savings account, many of them have gone away from that. Now there are money market accounts out there that may have no minimum balances, but that's largely the biggest differences you'll see. They're both going to have a competitive interest rate. I found that high-yield savings accounts have been edging out many of the money market accounts as far as interest goes. They may have withdrawal transfer limits on both, so there's that caveat there, and they both should be insured by the FDIC or the NCUA if it's through a credit union. Okay, and then would that be through a

bank or a financial institution like that? Yes. High-yield savings accounts are generally going to be with online banks. They have less overhead and they can pass on the savings to the consumers. But you can go to your local credit union. They'll have one. You can do one online. And I personally have an online high-yield savings account through Laurel Road and they've been a great partner for our YouTube channel here. We have a new partner, Fairwinds, that's great as well. Jade's got one through what? Ally. And I have Marcus by Goldman Sachs. So there we go. There's a lot of them out there and you know you can a lot of people Jade want to just hop as soon as one interest rate is a little higher than the other and I'm like you're talking 0.2 percent

on your $10,000 emergency fund. That's right. I don't know that it's worth doing all the legwork for the extra $10 you're going to get over the course of the year. But if you've got, you're saving up for a house and a high yield savings, you've got a hundred thousand and it's 4% or four and a half percent. Okay. Yeah. I mean, when I switched to Marcus, it was because you were like, oh, that's right. They're at 5%. I think mine was at like 4.25. And I thought, well, I could make the switch. Yes.

So depending on where you're at. Now, some people, here's the key. Whether it's money market or high yield savings, that's great. But some people have their money in a regular old savings account with their bank. It's costing them money and it's like 0.001% interest. You can do better. And remember, the point of the emergency fund, Robert, and everyone listening, is not to make money. It is insurance, not an investment.

That's the key to remember. So I don't look at this as a money-making scheme. I just want it to be growing if I can versus losing money with inflation. And I like the fact, I think that if you have savings and you've got check writing and you've got debit cards and you can easily transfer the money, I feel like in many ways, depending on your personality type, let me talk to the Jade personality types because I'm the type, if I see the money, I want to get to it. And if I have easy access to it, I want to get to it. And so I learned early on, I got to put the money away so that I don't touch it. And so I want an account that I'm going to have to work to get to the money.

And that was just me understanding my personality type. You might be the type that George is looking at me like I'm weird. So maybe. No, not at all. George, am I weird? No. But if you do want to check out the new Ramsey partner we have, Fairwinds Credit Union, you can go to fairwinds.org slash Ramsey.

And they won't try to remarket with debt products. They've got a custom account bundled just for Ramsey fans, so be sure to check them out. Like it. All right, let's talk to Mac real quick in Austin, Texas. What's going on, Mac? Hi, I hope you guys are doing better than you deserve. We are. Good, good. So I'm a debt-free 25-year-old living in Austin, Texas, and I'm looking to buy a house in the next year. And really what I'm looking for is guidance on setting my budget. Ooh, okay.

Well, let's talk your financial picture. How much do you have saved? So I will be buying the house probably next July, and per kind of the way I'm paid, I will probably have about 200 to 250K saved. Wow. Amazing. And how much are you looking to spend outright?

Well, that's kind of where I'm calling in for guidance because I could kind of buy a three-bedroom house, probably be good for the next five to seven years, and come close to paying cash. Or I could go to take out a loan, buy kind of like a four to five bedroom house and probably be good for the next 10 plus years. I mean, there's part of this, it's choose your own adventure. You said you're single, right? Correct. Okay. Whoever is next in your life is going to hate your house probably. So just know that they're going to want something different.

And so I wouldn't make a 10-year bet on a house. I would go, what's the right house for me right now? And if you can get paid cash, that's great. If you take on a 15-year mortgage that you knock out in a few years, that's great too. So I don't want you to feel it's an awesome goal to have and you might be able to do it. But I also know Austin area housing is similar to Nashville and that it'd be cray. Yeah. At the end of the day, you want something that's no more than 25% of your take-home

pay. And that's with HOAs, insurance taxes, all of it included. That's what you're looking for. And if you can put, I mean, you're going to be well above this, but if you can put 20% down or more, which will be you, you're winning. So regardless of which route you go, as long as you hit those marks, you're doing well. But I like what George said, and I think he's exactly right. That's a hefty down payment, and I would use it as a down payment. I would put down as much as you can. All right. Today's Ramsey Network app question of the day is from Brian. By the way, Ramsey Network

does have an app, and we do the third hour there. So if you're listening on radio, stay where you're at. But if you're watching on podcast or on YouTube, you'll have to head over to the app to enjoy the next hour. But our question of the day is from Brian. He says, Dave recently took a call from a whole life insurance agent and said something I was hoping to get clarification on. I bought $100,000 whole life policy 20 years ago, and it has a cash balance of $17,000. Oh my gosh. Did I understand correctly that when I die, my family will get the $100,000, but the $17,000 is gone? Yes, you did. And here's the deal, Jade. I see the whole life people in the comments and they're going, Dave's lying. It's not true. Listen, with almost every policy you see out there,

this is the case. What Dave said. Can you set up the policy in such a way that you do get the cash value? Yes, there are scenarios. But what a terrible investment that over 20 years, that investment portion only made $17,000. That's a crock right there. I know. Tell you, Jade. Well, you got to let it cook, Jade. It's going to take many, many years for that account balance to grow because the first

five years, you're just paying commissions to the guy who sold it to you. So it's being eaten up by all the fees. But yes, this is how it works. And they're often pitched to you by these folks that are, they sell themselves as like wealth strategists, like tax-free wealth strategists. They're like really disgusting, creepy names. And what they do is they lock you in for years of high costs and commissions. And if you stop paying, your cash value that you've built up in the insurance vanish. And with most policies, your family won't get the cash value like Dave said when you die. It goes to the insurance company.

It's a little parting gift. Because they go, hey, you're getting your face value. That's what you paid for, Jade. And while you're alive, you can use the cash value. Well, meanwhile, on my 20-year term life insurance that costs you a fraction a fraction where if something god forbid happens to me forget a hundred thousand dollars my my family is going to be nice and covered yeah the whole life policies i mean you're getting a hundred thousand two hundred thousand we're talking about millions

10 to 12 times your income so if you're making 50k you should have 500k yes 700 and if you make a hundred thousand you should have a million dollars minimum minimum and it's not that expensive you go a million dollars that sounds no you're not paying a million you're paying 30 40 bucks a month for this coverage yes and get it sooner than later because obviously when you're healthy those prices go down and so yeah 15 year 20 year term yeah the way it works is they they go, hey, we know the average lifespan. We're going to take the total cost it costs to insure you and then divide it out over the years as a term. That's right. As a level policy rate. So it's

that simple. You're going to pay the same 20 bucks for the next 20 years. And when it's done, it's done and you'll be self-insured. Yeah. And I'd rather take the money that I'm saving because, again, we talked about it with term life insurance, you're paying less for the policy. And so you've got this extra money allotted to you. You could be investing that money. And instead of making a three or four percent return, you invest it in the S&P 500 or you're making a 10 to 12 percent return. That's easy math. This guy, George, I don't have my calculator pulled up, but if he had done that over the 20 year term. Your calculator would blow up if you did this. It would blow up.

Make sure if you guys don't have term life in place or you have whole life, cancel it. Get term life. Go to zander.com. They're the folks we trust. It's who I have my term life through. Jade, Dave, the whole gang. We trust them that much to protect our families.

And hey, don't forget, if you want to finish the show out, we've got another hour. We're going to do it inside the Ramsey Network app. We've got some great calls coming up. Jeremiah from Dallas, Texas. He says, how much is a reasonable investment to start a side hustle? We've got John coming up.

He wants to know how to get a financial advisor. All this and more on the Ramsey Network app. Live from the Ramsey Network, it's the Ramsey Show. I'm Jade Warshaw. Next to me is bestselling author George Camel, and we are your hosts with the most for the next hour. If you want to get involved, well, you need to be listening on the Ramsey Network app, which you are, but if you want to call in the show, it's 888-825-5225.

Calls must be about your life and your money. We'll also talk about relationships a little bit and maybe even some career stuff. We'll try our hand at that. But if you want to get involved, that's what you've got to do. Jeremiah is on the line. He's in Dallas, Texas. What's going on, Jeremiah? Hi, you two. Thanks for having me on. It's an honor. You bet. Happy to have you. Thank you. My wife and I are on Baby Steps 456. We've been followers for a while. Super inspired by your entire team. So my basketball cards, and it's a passion of mine I've had for decades. I'm wondering if I want to start selling them as like a side business, just, you know, something to do, make a little income. I'm not looking to make huge strides here,

but what's a reasonable amount that I could invest into being able to do this from home. So, you know, I would need things like a printer, a label printer for addresses, shipping containers, and then, of course, a stock of very nice sports cards. How many do you have now? I probably have hundreds of cards, but probably in the value of about $3,000 of cards. Okay. And you want to buy high dollar stuff? Probably more quantity than the super high dollar. I want to be at low because there's a lot of more, more of the money is in the low end because more people can afford to purchase low end cards than they can the high end stuff. Okay.

And when you talk about investing, are you talking about investing, are you talking about investing cash that you already have or do you want to, are you talking about investing cash that you already have, or are you thinking about taking out debt to invest? Oh, never debt. No, no, no. I'm four, five, six, whatever, going backwards. Okay. Just checking. Listen, I got to check just to make sure. I see this right now as sort of a hobby, a toy. And so what I would do is go, if I put a thousand bucks into this and I burn this amount of money on the kitchen table, would I lose my crap over it? And I think the answer for you is no. So I would make it a reasonable amount. Don't go crazy. You don't

need $10,000 to go get the fanciest of fancy cards. Just move at the speed of cash. And what that does, number one, is it forces you to get good at it. You sort of buy your way into the business when you just buy the nicest cards and you resell it and go, look, why if I broke even? It's so great. But I would love to see you go, you know what? I started this thing with 500 bucks just buying the basic printer, the containers, whatever I need, and then I worked my way up. And I only then use profits to reinvest in the business and buy more cards. So what do you think you'll start with? What would it take just to sell a few? To get a few out, off, get the printer, do what you need to do?

It would probably take me to really set up really well and be comfortable. Probably about $3,000. And is that like chump change in your world? I mean, yeah. You know, I'm not this... Yes, we're doing pretty well. My wife and I... That's not you going into the emergency fund, right? No way.

No way. We're not doing any of that. Good. Not that crazy. And if you lost the three grand, let's just say worst case scenario, it doesn't pan out. You can't sell a thing. You don't believe in Jeremiah, George? I just want him to look at the, here's the worst case scenario.

You have to look at your wife and go, hey, I spent three grand on this idea. It didn't work out. Are you guys going to be okay? We'll be okay. And to further, so I walked into a local card shop that does it very well in the Dallas area. And I said, hey, I'm available because I'm retired. Can I just work for you for free streaming so I can learn? And they have been very gracious and they allowed me, you know, they don't pay me. I know they don't pay me i said don't pay me just teach me and uh i have been able to learn and i know the ropes and i do streaming already now but this will be for me for myself because i'm doing it for them okay um they're good men of

faith they're awesome uh great coaches teaching me how to buy things teaching me how to buy the correct way so okay i love that you three,000 bucks. I love you did the Ken Coleman. I was like, so five or 10 grand, 20 grand. I would set a limit and I'd talk about it with your wife and say, hey, here's what I'm- And I would actually make an Excel spreadsheet going, okay, the printer's going to cost this much. Here's what this container is going to cost me. I got to buy a few cards to start.

Here's what this is actually going to cost. You and your wife agree and go, all right, here's the budget. Here's the startup costs. Let's go do it. And then have a timeline and go, hey, in six months, here's what the ROI needs to be. Here's where the business needs to be for me to continue. Otherwise, just let it be a hobby. Yeah. Be diligent about tracking those numbers so you can actually see if you're making a profit. I once ran a snack bar at Ramsey. So we used to in the old building, Jade, you wouldn't understand this. You've got this fancy headquarters here. I know. I don't know about a snack bar. The cafeteria. It's got its own staff. Back in the day. Back in my day. What happened in your day, George? This was probably

2016. I was running a snack bar on the third floor of Ramsey, which was largely the creative team, the writers, all of that. Okay. And what were the offerings? I had all the usual suspects. You had your sodas, your snacks, your candies. I started getting to novelty, like vintage and nostalgic, you know, talking gushers, big league chew, that kind of stuff. And so I would sell it for a profit. And I had a little spreadsheet that was going, all right, here's what it cost me to buy this at Costco or wherever.

Here's what I'm making per item. Here's what the net profit was. And I probably spent more time tracking than was worth my time. I will say that. I gave it up because it was a lot of work. And Ramsey team members, they're pretty frugal. They ain't paying more than 75 cents for a can. It's like they want 1950s pricing out here. Well, the good news is once you kind of figure out your upfront costs, especially if it's the same thing that you're going to offer over and over and over, you've kind of done the hard part already. And then at that point, you just know, okay, how many do I have to sell

in order to make what I say I want to make? It was the same thing back in the day. Jade bakes for you. Some people know about that. Back in the day, I was baking cupcakes and cakes and biscuits and muffins. And that was one of the side hustles I had when Sam and I were getting out of debt. And you can make some decent margin on that especially if you can um you know sell a whole a whole you know couple dozen cupcakes or if you like do a wedding cake or something like that you can make but count the cost that's the important part a lot of people think well i'm passionate about it i'm good at it i should turn this into a business some things should stay a hobby and you enjoy it more because once you're making cupcakes at scale and it's when

you get home from work and now it just feels like work it's the time what am i actually making per hour with the time and money i'm investing into this and for me at that point it was like you're so right george time is a big factor of it and for me i had to i had to think would i rather be someplace else at somebody else's warehouse at somebody else's headquarters making money there or would I rather be in the privacy of my own home I got Gilmore Girls on while I'm baking the cupcakes that works for me so if it's a side if it's truly a side hustle you have the time figured out you have the margin figured out I I love that you know and it looks like in his case uh he's got his wife who's out there pulling in some big bucks and he's got the he's got this encore career going on that's a great place to be and you heard us say and you heard him say... He's got this encore career going on. That's a great place to be.

And you heard us say, and you heard him say, I don't want to touch debt. A lot of the times with our business ideas that we want to get off the ground, we go, well, it's an investment in my future, Jade. Why wouldn't I go out and take a loan to do this or put it on the credit card? I'm going to ROI.

It changes the way you handle the money and it changes the decisions you make when you have debt. You get desperate and salesy with your customers when you've got 10 grand to pay on the credit card. Yeah, you feel that. So start slow, start at the speed of cash. And if that means you got 10 bucks to start this thing, that's going to be a great story one day when you built this million dollar empire. Let me tell you, that's so true. And you end up passing the stress of that debt to your customer. Recently, we worked with a guy who came to seal our driveway. You know how they'll seal it before the winter so it doesn't crack and when we went to pay he wanted us to pay the merchant fee

for for swiping your card and that for me was like such a red flag i was like if you're talking to me about the merchant fee you're in debt you know what i'm saying like i can feel that i'm like i'm not paying your merchant fee that That is the cost of doing business. That's why I go, hey, will you take three percent off if I stroke a check? And I go, yeah, all right, I'll do it. I'm not paying the merchant. She's not doing it. This is the Ramsey show.

Thank you for listening to the Ramsey show. Next to me is George Camel. I am Jade Warshaw, and we are your hosts for today, taking calls about your life and your money. I'm having a good time hosting with you today, George. You say it like it's a surprise. We always do. We always do quite well. But you said it like I usually don't. But today I'm having a good time.

Today is all right, if I do say so myself. I appreciate that. I always enjoy hosting with you. You bring the energy. I try. I try. You know, I told you I was a little- Well, you ran a marathon this weekend, like a literal marathon.

I did. The body is here. The mind is a little... The mind is weak. A little cloudy. So, anyway, if I say a lot of ums and ahs, that's why. Let's get to the phone line. We got Grace in Huntington Beach, California.

I could use more Grace. What's going on, Grace? What's going on, Grace? Hi, good day. I forget, what about you guys? What's going on, Grace? Yeah, what's going on, Grace? Hi, good day. I forget, what about you guys? Where are you guys talking from? Nashville, Tennessee. Oh, fine, fine.

Well, out here in sunny California, I'm up against a situation. I've always been in ministry all my life, and that's where I met my husband, and we wanted to minister marriage etc but um with me I've been working with inner city kids and my heartbeat is always about raising up leaders and my little lingo with two kids it's not where you start your race it's how you finish and but um within the midst of me working in a field that I have um I've, well, there's a whole longer story, but I became disabled due to a car accident. And I have not let that stop me from being me. And I've become a motivational speaker along with me continuing working with kids.

And then I've gotten married and got a kid. And now she's 10 and thriving and um but with me working in the field i did i um i one of the kids opened up and shared some stories and and i um wanted to get more equipped in in abuse and knowing how to report it and knowing what and how to do so how can we help you how can we help you today well um where i'm at now is um the red flags that I have learned about, I was seeing in my own home. And so I am. Wait, let me clarify that. Hold on.

Hold on. You've said a lot. Let me clarify what you just said. Did you say that the red flags that you were learning about, you're seeing in your own home? Correct. Meaning that I am in an emotional, verbal abusive relationship. And I've been working with counselors and have an attorney. But why I need you guys or how you guys can help me create a safety plan is I

don't want to go into debt, and this is why I'm still where I'm at. And I've looked at Dave Ramsey's shows and how he's helped abusive people, and he's saying have a sense of urgency, you know, get out. And I know all those things i'm working with counselors and i have an education in this are you in counseling with your husband is it your husband that we're talking about who well yes no but it's um no tell me who's who's the abusive person in the relationship because i'm assuming it's a husband wife yes him and what have your counselors told you as far as getting out of the house, getting your daughter out of there, all of that? It is, I need to leave.

And, but the thing is, my complicated situation is, is that I'm disabled and with shelters, if I was in a rental shelter, which I've been to before when she was nine months, is that they're not wheelchair accessible. And now after COVID, they're filled. Okay. So the wheelchair is where your limitation is. Correct. But then finally, over spring break, my best friend, she just said,

you know, Gina, Scrooge is trying to get into shelters. You've been doing this for so darn long. Just use your money that you have saved in a cd for emergency medical emergency i don't know what you define emergency but this is it every time the damn phone rings my whole family is yeah in kins and needles not knowing if you're safe or not here's the thing here's the thing let me break let me break in real quick because we got to get some some more facts around this yeah you're on disability but what are you earning every month and tell us how old your your baby is uh she's not a baby she'll always be a baby but

she's 10 10 okay 10 years old and how much are you bringing in well i have social security which is um about a little more than a thousand a month but then i also got one of my other friends told me i could get her on social security. No, what are you bringing in? Let's just, just your income. Yeah. So I get, so I get $1,300 Social Security. Plus I work at a maker grocery store. I don't want to disclose everything, but they, so I get about $500 there a month.

I'm only working, I'm only working part-time. I have a master's degree, but I'm not utilizing it because when I'm off, I'm off when I'm there. Are you able to work full-time? Is your daughter in school during the day? Well, my daughter's in school during the day, although because I've had pressure sores, like bed sores, my doctor says that he doesn't want me in my wheelchair that much because I've had, like, on my upper thigh area, bottom area. Okay, so how many hours did he say you can do medically? He said 25.

But then, which, you know, I'm learning all this stuff from my own experience, Social Security told me I can't make more than $1,500 a month. You know, and my father says, you know, well, screw Social Security. That's right. Just get your good job. If you can make three grand a month, then you don't need the Social Security disability. That's right. But the thing is, I figured out that I'm getting 72 hours worth of Social Security.

I'm getting 72 hours without me, you know, without me even working. Yes, but it's not a living wage for you. And it's not a quality of life that's sustainable. And what you're talking about, let's go back to the first issue here, which is if you're an abusive relationship, you've got to be able to get out of that environment. And a lot of times when you're in a situation like you're in, you are relying on your friends and your family and your local church quite a bit because your safety comes first. And then hopefully... This is another catch-22, though. I've kind of wrestled all these things that you guys are talking about, and I'm not afraid to let go and whatever.

Okay, but hold on, hold on. Before you go into the next realm, because I want to make sure we check things off the list as we go so we don't create a lot of chaos in the conversation. First thing is, is there someone in your family that you can go to? Because if you're telling me I'm in a dangerous, abusive relationship with a child, I want to know that you can go, okay, you know, my pastors talk to somebody and I'm going there. Or we have a house, you know, that we're to, or my sister-in-law, whoever, is there a place that you can go to get safe? Well, I've, I've already maxed out all these things. You know, I've not a part, not a problems. Like the thing is, you know,

like let's just pretend you're my sister or you're my best friend and you say, okay, come sit on my couch. I don't care about giving up junk. I've worked in the inner city. I don't, I am not a big, not living large. But the thing is, like my attorney says, this could take six months to a year to file. That's right. But my point is, if you can,

my point is if you can get out of that situation into a safe place, then that clears up your mental space to go, okay, now what can I do to earn money? And what, how much money do i need to earn right now my my sister lives has on the second floor 17 stairs up so i can't live with her okay then my my parents that's a whole nother dysfunctional situation there i mean and then i i begged i pleaded that i just got it. Grace, here's the TLDR. I want to give you this park notes because we're running out of time.

You don't have an option but to find some options. And if that means talking to your local community, your church, family, friends, shelters, you've got to go do something instead of going, well, I can't do that because of this, and then this part's over here. You need to get out now, and you need to set up your own bank accounts and take as much as you legally can to make sure that you're going to be okay. And I thought you said early on that you were involved in ministry through your church. I want to find out where these people are at and tell them to put their money where their mouth is because if you've

truly formed the community that you seemed like you had, yeah, somebody's going to take you in because I know I'm not going to sit and let somebody be in that type of situation financially support you to where you can afford rent for now until we get this whole thing cleared up yeah you need to talk to them about this find out about what their benevolence programs are because you need to be able to get to a safe place um and you need to be able to get into counseling because you're just spinning out here and i i can hear it george can hear it and i think it's because you're in a really stressful situation you've got this child you've got some limitations that you're just spinning out here. And I can hear it, George can hear it. And I think it's because you're in a really stressful situation. You've got this child, you've got some limitations that you're dealing with, and you've just, you know, come out of an abusive home. So I hate that that's happening to you. But for anyone listening,

you know, George and I, we can give you money advice. But when you're going through these things, you've got to seek out help with a counselor, because they're ultimately going to be able to dig in with you and help you. They know the local resources. Yeah, yeah, yeah. Oh, my goodness. And if you're listening to this and you are in similar shoes, please let this be your sign. It's time to get out.

You deserve a better life. Yeah. This is The Ramsey Show. You're listening to The Ramsey Show. I'm Jade W warshaw next to me is the very funny george camel he makes me laugh regularly here on this show even when you're not trying to i was not trying i was actually complaining and you found it entertaining which is hurtful i'm watching him over here trying to get his receipts together his people think i just like fumble with receipts for fun. Yeah. It was work related. Yeah, it was work related. I'm on the clock. It was funny. Okay. Here's what else is

work related. Ramsey Trusted Pros. Okay. You hear us talk about this a lot. Ramsey Trusted Pros will help you shop the market and compare insurance quotes so you don't have to. And when you say that, that's all I need because I don't know about you, George, but insurance, I don't love dealing with it. I'm not going to lie. I want somebody to do the hard part for me. And that's what the pros do. Your pro will compare quotes. They'll do discounts and bundle deals for you at no extra cost. Ramsey Trusted Pros will make sure you have all the coverage you need and nothing that you don't. Again, these are things I don't want to deal with myself. And so having somebody do it for me is such a value. Ramsey Trusted Pros are interviewed, they're vetted and coached to make sure they're experts who have your interest at heart and that will help you do things the Ramsey way. That's really what this is about.

They're not going to sell you insurance that Dave would never recommend. They do it our way and they don't give you stuff you don't need. They make sure you have the right coverage. And Jade, I recently helped a friend do this. They were complaining about how expensive their auto insurance was. And I said, how expensive is it? And how long have you had this coverage? And they go, well, I've had it since I was in college with State Farm or whatever. And I go, hey, reshop it through our friends over here, the Ramsey Trusted Pros. I saved them 80 bucks a month while getting them way better coverage. Yes. And they were very thankful. I was like, this is the nerdery. That's the kind of friend I am. I mean, what, once a year go through and do this? Yeah.

I would say I would. And not to mention, this is kind of a sidebar, but it's worth noting when we're coaching people of how to find margin in their budget. This is one of the top three things we tell them to do. We say, OK, are you investing? If you are, let's pause that for a minute. Are you getting a tax refund? If you are, let's get that straight. And let's take a look at your insurance. Let's do this insurance coverage checkup to see if we can save you money. And a lot of times that's where a lot of margin lies. So if you haven't done it, shop the right coverage based on your individual needs. You can do that today. Go to ramseysolutions.com slash coverage. Again, ramseysolutions.coverage, or you can click the link in the description if you happen to be on YouTube or podcast. So that's

how this works. Very good. All right, let's go straight to the phone lines. We've got a local John who's in Clarksville, Tennessee. What's going on, John? Hey, Jane. Hey, how are y'all doing we're doing good how can we help today all right uh so the question i had is um yeah i'm i'm 42 um household income is around 180 000 um just recently got out of baby step two about halfway through baby step three right now um and uh kind of went out of out of Baby Step 2 about halfway through Baby Step 3 right now. And kind of went out of sequence a little bit with Baby Steps before I learned about the actual Baby Step program. Okay. I've got about 250 in 401K and Roth IRA. Okay.

I'm not mad at you. Right. Okay. I appreciate that. So my question is, I have a financial advisor or a retirement account through one of the big name investment firms. Fidelity, Schwab, Vanguard? Yeah, well, Edward Jones. Okay. All right, yeah, so I have a financial advisor through Edward Jones. My question is, I have a fairly decent understanding of investing, especially through after reading collar guy, is it necessary for me to have a financial advisor if I can invest in

the growth and aggressive growth and income mutual funds through my 401k and through an investment account of my own? Yeah, I mean, would it make more sense to have that? Right now, if all you're doing is you're in your 401k and you're saying, okay, I'm going to just choose the funds that I want in there. At this point, maybe not. And you feel very confident about what you're selecting. But down the line, you're probably going to want to talk to someone because you're going to want to talk about when it's the best time to retire, how to set yourself up for retirement. If you're planning on retiring early, what do you need to have in place in order to have

that? Whether or not you have enough in Roth versus traditional, all of those things are going to pop up. And so I'm not telling you that today you have to get someone on board, but I think that on down the line, you're going to want that person to give you a little bit more direction and to teach you and help you to navigate that time period of life a little bit clearly, more clearly. Yeah. So, John, if you're just using a financial advisor to choose a few funds, you probably don't need one if you feel comfortable doing it on your

own. But there's a lot more complexity that comes with life when you're talking about multiple investments, high income streams, businesses, you're nearing retirement, you need specialized advice, you have major life events, maybe you switch jobs and you got an old 401k and you want to roll it over, you know, things like that. You have a kid and you want to set up a college savings account. Maybe there's more estate and tax planning things that you may not be thinking through. And so you don't need one as soon as you hit baby step four, but eventually you're going to need one. And generally you'll know because you'll go, oh boy, I need to run this by somebody. This feels a little too complex for me. And by the way, when that time comes,

just like we talked about with the insurance coverage checkup, I would use a SmartVestor Pro because I know that they've been vetted by Ramsey folk. And so there's part of that that I want. I want to work with people who kind of know the financial path I'm on. They understand financially how I do things, and they're not going to tell me to do something that's off that path. And so get set up with a SmartVestor Pro. You can do that by going to RamseySolutions.com slash SmartVestor when the time comes. That's a very good question. I like that one.

All right, let's go to Kevin. He's in Fargo, North Carolina. I'm sorry, North Dakota. What's going on, Kevin? Thanks for having me. How are you all doing? We're good. The question I have is my wife and I, I'm 47, she's 45,

and our last two of the four kids have just graduated from high school. They're kind of venturing off on their own. But we have some debt. Most of the time, I haven't done much with a lot of the debt. We've paid some off, but we have a lot of debt that's been old and not taken care of. And we just started investing through our companies we work for in like a 401k. Anyway, but I need to know what are my options. I really don't even know where to start. Okay. Well, let's give you a crash course on the baby steps. I think that's going to kind of give you a good place to start

because here we teach a series of baby steps. And you walk through those baby steps that is the quickest uh path to financial peace and you're going to encounter less risk along the way okay so that's why we teach it that way um the first step is you just need a thousand dollars saved the purpose of that is so that you're not going back to credit cards that you're getting a little breathing room between you and what's going on with life so do you have any money saved not going back to credit cards, that you're getting a little breathing room between you and what's going on with life. So do you have any money saved? We have about 500 bucks. Okay.

Halfway there. Halfway there. So the goal is to get $1,000. Most people are able to do it in 30 days or less. And they do it by selling stuff. They do it by picking up a side hustle. And they just kind of go, you know. Cut every expense out of your life that doesn't, you know, lead to your survival. That's right.

So like food, utilities, housing, transportation, insurance, anything beyond that, it's gone, even eating out. And by the way, investing. So you said how to start. The best way to start is to stop because pausing that investing is going to give you money back in your budget to get through these baby steps faster and you'll get back to investing in no time. And instead of investing however much you are now, 3%, you're going to be investing 15%, five times the rate. Yeah. So that's the first step. And by the way, if you happen to be getting a large tax refund every year, another good place to start is by changing your withholding so that that money is coming back into your monthly budget. And so those are a couple of just

practical ways to find that margin. Then the next step for you, Kevin, is now we're listing out the debts smallest to largest by balance. OK, not anything else. And we're going to pay minimum payments on everything and put any money left over on the smallest debt. And again, finding that money to put on the smallest debt goes again back to side hustling. It goes back to cutting down our budget to zero. We're going to get you hooked up with an every dollar budget. Kelly's going to pick up on the line. We'll give you a couple of months for free so you can get that habit started. But budgeting is the crux of all of this, okay? And getting your income up is going to be the tool that actually makes this happen. And we'll make sure you have all the information on the baby steps so you can keep

walking forward. This is The Ramsey Show. You're listening to The Ramsey Show. George Campbell, Jade Warshaw are your hosts today. Scripture and quote of the day. Philippians 4.13 says, I can do all things through Christ who strengthens me. That is the truth. And Ayn Rand said, The question isn't who is going to let me. It's who is going to stop me. I know that's right, Ayn.

Ayn. Ayn. Who knows? Who knows? I Googled it to try to help you out. Still don't know. That's true. Let's go with Ayn.

I like that. I feel like that's, it help you out. Still don't know. That's true. Let's go with Ayn. I like that. I feel like that's, it sounds philosophical. Put respect on her name. Yeah. Yes, I will, Ayn. All right, let's go to Lisa. She's in Des Moines, Iowa. What's going on, Lisa?

Well, I'm calling today because we are in a situation where my husband is going to be quitting his job to go operate the family farm. And this is a huge change for us in that both of us have always worked and had jobs. And we've been together a very long time and we've always been very good about saving and our money. But this would be a pretty significant move. We're going from two incomes to one income. So he wouldn't be making money running the farm? Eventually.

I mean, I think there will probably be a couple of years where we're operating in the red. Wait, doesn't the farm make money now? I think it is maybe breaking even. I don't know that I want to take over a failing business. Yeah. Can we ask more questions around that? Is your husband kind of like an expert in farming and he's the one that's going to turn this thing around?

Yes. Got it. And when did he become an expert if you guys were running these two other jobs for your basically for your whole life together? I mean, that's where, you know, he grew up there and worked on it up until, you know, we got together. How long ago was that? And that was a good 20 years ago. What was the most he made when he was working the farm? I mean, he helped out.

He wasn't necessarily bringing in an income, but we're in a situation where there isn't necessarily, like this is something that he has wanted to do for a really long time and the opportunity has presented itself. let's let's run out let's run out the opera let's run out the opportunity and see if it makes sense so tell me tell me where you're at now you both have an income what are you bringing in combined and tell me about any5 okay good um we have no consumer debt we have been good savers um the only debt that we have is our home okay what do you have saved uh like in investments yeah give me the give me the full rundown i just want to see how much

you have in cash savings and then how much do you have in a nest egg in retirement accounts? We have about 45 in cash savings and then other investments being like retirement accounts, IRAs, 529s. We have about 1.1 million. Nice. 1.1 million. And how many kids do you have? We have three. How old are they? High school, middle school, and elementary. Okay.

What does this mean for them? I was going to say, how much of that 1.1 million is education cost? About 140. Okay. Okay. So that's not a huge deal in the whole scheme of things. How old are you guys, you and your husband? In our late 40s. Okay. We're talking about uprooting your life and moving to the farm? Yes, eventually. I mean, I think we would transition over a couple years. It wouldn't necessarily happen right away. So you keep your home. Family will still live there.

He'll go there as his workplace. How far away is it? It's a couple hours away. Oh. That's different. So he would stay there maybe a couple of days a week and come home? Ooh, that's tough. Does he have help on this farm, or do you be hiring people? Who's currently running it? So he would stay there maybe a couple of days a week and come home? Yeah. Ooh, that's tough.

Does he have help on this farm, or do you be hiring people? Who's currently running it? It would be him and then one other person right now. Okay. So if eventually, I'm guessing the eventual maybe has to do with kids going off to college possibly, but how much of the two hundred thousand dollar income will you be losing how much is yours basically about 115 so you'll keep mine you'll keep 115,000 for in the interim but how much does he need to be making for you guys to make this full transition

in your mind because my unless you tell me differently, I'm guessing that when you make that move, you won't be doing the same job or is your job remote? My job could be remote. Oh, I will be doing my same job. Okay. That's better. That's good. And then what are the initial costs to take over this farm? I would say it's a couple hundred thousand in expenses. Okay. But you guys don't have that. Well, we do in investment. Well, it's in retirement.

My question would be... You're in your 40s, so you're saying you're basically going to borrow at 35% interest to liquidate these retirement investments. No, it's not in retirement. It's in an investment that's not retirement. Oh, in a brokerage account. We've got a brokerage account. You're basically going to borrow at 35% interest to liquidate these retirement investments. No, it's not in retirement. It's in an investment that's not retirement. Oh, in a brokerage account. We've got a brokerage account. What's in there?

Yeah. About 600. Oh, wow. So what was the purpose of this? Was it knowing that we wanted to have this farm dream one day? No, it's part of it. So is the 600 in addition to the 1.1 million or it's part of it? It's part of it. Okay. And then my next question is when you guys make the move onto the farm,

you'll sell your existing house, I'm guessing. What would it bring? If we sold it today, I would think that we would have about 300 in equity. Okay. I think there's a world where this can happen and it not be the end. You know what I'm saying? I think you have to be very careful here. I don't think that I would, out of 1.1 million in your late 40s, almost 50s, I don't think I would liquidate 600,000 to put into this. I can tell you that I wouldn't, especially if the track record is that this is a failing business. And what really gives me pause is your husband hasn't done farming in over 20 years. And do you see what I'm saying? There's a couple of red flags here that really bother me. I think financially, you could find a way to make this work at the speed of cash and

not like investing a bunch of money, not going into debt. But the expertise to turn this business around, I would be asking the sorts of questions, what are we doing differently? What's the factor that's going to make this business suddenly profitable? So it's really a business case more than it is your personal finance case. George, what do you think? I think this is a very emotional decision, obviously, for him. This is the family farm. He grew up here. He wants to resurrect it, keep keep it going and so i just don't want the this sort of like the dream of this happening the emotions of it to then decimate your financial picture yeah and lisa it sounds like you're calling in because you're a little hesitant too yeah what are your fears

i i mean immediately my my most immediate fear is um things like health insurance and um losing traction on what we've done to be where we are listen I I share that fear the only thing that made me feel a little bit better is if you were able to continue your work and bring in $115,000, you don't have any debt. I would sit down with my husband and I would come up with a couple of non-negotiables and say, number one, we do not go in debt in any way, shape, or form. We do not pull money out of retirement for this, for like, sit down and say, this is what I'm willing to do. This is what I'm not willing to do, because I agree with you. You guys have worked really hard for what you have. And now is not the time at this stage in the game to do risky things that could sacrifice it. Decide how much are we willing to put into this? And let's decide that free and clear of what the business needs. Let's just us say, what would we be willing to put into this? And then if it's not enough to make the farm run, then you have to say, I can't do it.

Because even though it's family property, you cannot sacrifice your family's well-being to save something that might not be able to be saved. And I would create an every dollar budget just with your income and go, OK, if we went down just my income for the next three years, could we make this work? And if the answer is no, we got to figure something out. Yeah, I think you've got to spend more time running numbers on this and definitely don't jump in. It doesn't sound like you are. I think you're trying to be wise. That's not an easy decision to make. That does it for this hour of the Ramsey Show. Catch us next time. We'll see you tomorrow. Thank you.