The Ramsey Show - App - Don’t Rob From Your Future To Make Today Easier

Episode Date: March 29, 2022

George Kamel & Ken Coleman discuss: Feeling defeated in your career, How much to put in your HSA, Saving up for a house, Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined today by Ken Coleman, bestselling author and host of the ken coleman show and we are taking your calls america if you've got a question you need some validation affirmation confirmation motivation education we are here for you and ken specifically focuses on career your work your purpose what you were born to do and he's going to help you map out a plan to get you there and i can help you with all things money. And generally, Ken, they're intertwined.

It's amazing how that works because work creates income. To separate them, yeah. Yeah, and income creates impact. Income means you can get your financial goals accomplished, and so we are here for you. Open phones this hour, 888-825-5225. Joe kicks us off. He's in Logan, Utah. Joe, welcome to The Ramsey Show.

Hi, how are you? Great. How can we help? I'm just looking for some advice on how to move forward a little bit with my life and with my family. As quick of a background as I can real quick. So I'm an apprentice electrician. It's a four-year program, and I'm done with the schooling for the fourth year. I just need to take the test. But over the last few years, I had a company that they just kind of

changed their business model. They didn't need another apprentice anymore. So they let me go, and so I went on to another job in a cabinet shop and kind of worked out a thing with the owner there that, you know, potentially I could buy him out when he retired. And after about a week of that, he realized that he doesn't have any of the big equipment to move the big sheets that they use. And they're like 80 to 90 pounds and eight feet long and really awkward.

And I'm not a big guy. So he had to let me go just because I wasn't as big as him. Joe, you sound defeated. Have you been kind of beat down at every turn you feel like? Yeah. I've got a wife and two beautiful little girls, and I feel like I've worked really hard and tried to do everything right, and I don't feel like I can provide for them.

Okay, so let me go back just a bit. You're about ready to finish up your four-year apprenticeship to be an electrician. When do you finish that up? Yes. And do you want to be an electrician? Because it seems like that's a great way to provide right now. Well, I'm just waiting on some. I can't get a hold of them.

I'm trying to get some paperwork from my previous employer for what um and so that i can go and take the state licensing test and then i'll i'll be set okay so i'll have my journeyman's license great and what kind of money i'm sorry go ahead um anyways after that cabinet job i started with another company and they I just feel like I got kind of burned there and stabbed in the back a little bit by some people that I trusted and I got asked to to look for another job there as well and so I just don't that was kind of the straw that broke the camel's back for me. I have no desire to stay in the electrical field anymore. My dad's an electrician, and while he's done okay,

he also jokingly, half-jokingly, says all the time he's still trying to decide what he wants to be when he grows up. Okay, I see. So he doesn't have a passion for it, and you're realizing that you don't necessarily have a passion for it either? You just kind of fell into it? Yeah. So what are we doing to pay the bills let's start

there let's let's get stable because it sounds to me like you're that you're just beat down you're scared you feel like a big failure none of which is true you're not a failure and there's nothing to be scared about if you get busy so what do we have for employment right now are you currently employed yes i am i'm working right now okay great are you are? Yes, I am. I'm working right now. Okay, great. Are you bringing in enough to take care of everybody? For right now, we ended up selling our house. We had moved to Idaho for one of these jobs, and when that ended, we figured there wasn't anything that was keeping us there. So we sold our house and moved back to Utah, and we're just staying with my parents while we're kind of on the in-between,

trying to figure things out. Okay, so the point is you got everything. We're not in a storm right now. We're just in some confusion. Is that about right? Yeah, that's about right. So what do you want to do, Joe? I know you've got an idea in your head, and if you're insecure about it,

I want you to shake all that off and just tell me what is it that you would like to do joe you've had to wonder about it with all those crappy electrician experiences and cabinet making none of which you wanted to do what do you want to do joe um well i do pretty i feel like i do pretty well with people and and public speaking kind of things but so i'd like to work with people a little bit, and I love the outdoors, so I'd like to be in the outdoors industry in some way, going to either working or owning an archery shop or working for a bigger outdoors company and going to trade shows for them. Joe, Joe, I like it.

Now we're moving somewhere. Now, this doesn't mean that this is the thing, but I'm jumping in really quick because our time is limited with you, and I want you to hear what I just heard. You're really good with people. You like to connect with people, so you want to do people-type work, but you also love being outdoors and you like the outdoor environment. Did I hear this correctly?

Yes, sir. Fantastic. I love the idea. I would put it on the list. and you like the outdoor environment. Did I hear this correctly? Yes, sir. Fantastic. I love the idea. I would put it on the list. All right, so right now it's almost like we get out that old school poster board. George doesn't know what this is because he's a millennial, but George back in the day would get a poster board.

He could buy it in your grocery store, and you'd get out a marker, and you'd just kind of ideate on it. And I think one of the ideas ideas joe is working for a large outdoor retailer and you could be in sales or you could be in customer service maybe you could eventually get into training all of those are people focused work true or false true and you'd do pretty good at those things wouldn't you just those three ideas true or false I think I could do all right. Come on, Joe. Joe, you told me you were good with people. Could you excel in those three types of positions if you put your mind to it? Yes or no? Yeah. Of course you could. So I like that idea. Maybe you go to work for a large company like that. You get yourself, you get your confidence

up. You see a company like that where you can grow. You move up the ladder. You got good benefits. You save some money. Maybe you start a little expedition side hustle where you're taking people on guided hunting or fishing trips or whatever. Am I starting to say things you like, Joe? Yeah, a lot of

ideas that I've played with. All right, Joe. Stop playing. Stop playing and start doing. Stop playing. Stop playing and start doing. Stop playing with the ideas and start doing. You understand? So we're looking for a job that will allow you, let's keep this simple, because this is what you're looking for in job descriptions, Joe. I'm looking for a job where I'm very people-facing.

I'm spending most of my day communicating with people, maybe in a sales role, customer service role, maybe some type of training role, but I'm just communicating with people. And if I'm connected to the outdoors or I'm doing that in the outdoors, all right, now we got some juice. And now we build on that, Joe. Hang on the line. I want to give him a copy of my bestselling book, From Paycheck to Purpose, which will help solidify this process that we just got started. Joe, hang on. We're going to get that to you.

I'm excited for you, Joe. More Breakthrough coming up right here on The Ramsey Show. Did you know, statistically, when it comes to life insurance and protecting your family, that women are more likely to be uninsured or underinsured than men. This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day. This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men.

Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance. They shop the top term life companies to find the lowest rates available. You can compare rates online at Zander.com or call 800-356-4282. This is something every family has to deal with. That's Zander.com or 800-356-4282. Welcome back to The Ramsey Show. I'm George Camel, joined today by Ken Coleman. And we are taking your calls, work, money, relationships, you name it. It's your life, and we are here to talk about it in front of all of America,

and it's a good time. Nate is joining us up next. He is in Las Vegas, Nevada. Nate, welcome to The Ramsey Show. Hey, George Camel with the K and not just Mr. Coleman. You were listening to Ken yesterday, weren't you? Yes, I think so. I was.

Thank you for that. Yeah, I appreciate the Mr., but call me Ken the rest of the time. All right. What's going on with you, Nate? How can we help? Hey, so I've been listening for about three years, and I just want to tell you guys thanks for the great job you guys do. And me and my wife, we got out of debt and everything's

improved. Our marriage has improved finances, you know, everything. So that's awesome. The whole shebang. Fantastic. So, but my question is, and I haven't heard about this before, um, where would you guys put, um, a health savings account in your baby steps? Is that part of your emergency fund, your full fund, or that's considered part of an investment thing? This would be somewhere in between. It's not really an emergency because if your HVAC goes out, we're not going to go dip into the HSA to pay for that. And it can be an investment. Not HVAC, health savings account. Oh, yeah, yeah. I heard you say HSA, but that's a health savings account. And so you said,

is this concerned with the emergency fund? And there's just too many other emergencies outside of health. So we don't want to put it there. And the HSA is going to be a separate account. And where in the baby steps do you contribute? That's your question, right? Yes. So what Baby Step are you guys on currently? So we're on 4, 5, 6, and we're currently doing 15%. I guess that's another question in the question. We maxed out two Roths.

We're both self-employed, and so the remainder over the top of that, I don't know if I should put it in a SEP IRA or a solo 401k. Yeah, those are both great options if you're self-employed. They have real high contribution limits. So I would get in touch with a SmartVestor Pro to figure out what option is best for you based on your business and your income and all that stuff. But you guys are doing great. So let's talk about this HSA. Have you guys been contributing? Obviously, you have one. You have a high deductible health care plan? Yeah, that's correct. Yeah, we contributed and maxed it out last year. And we're planning on doing the same thing this year. I just don't know where, you know.

Well, we tell people to, I want you to have enough to cover your annual deductibles in Baby Step 4 through 6. I personally wouldn't be maxing it out until you're in Baby Step 7 with a paid-for house because all that extra money needs to be going towards the house. Once you're in Baby Step 7, you can go hog wild and max it out. Yeah, so I guess we're in 3B, 4, 5, 6. We're saving for a down

payment, but we're not pausing the retirement. Okay. So your HSA, is it maxed out right now? You've got enough in there to cover your medical expenses for the year, deductibles, all that? I think we're close to what our year for an individual would be, but not for the family. Are you guys pretty healthy? Yeah.

Yeah, we're a young family of two little kids. Okay. Well, I would dial back on the HSA. I wouldn't max it out. I want you guys to get that down payment. I want you to make sure you're investing 15%, make sure we're saving for college. Make sure we're getting the house paid off. And once you're through all of that, you're in the house, the house is paid for, then I would be focusing on maxing out the HSA as part of my retirement investing strategy because there's some great,

great tax advantages there. But right now it feels premature to be maxing it out while saving for the down payment. And then you're going to want to pay off the house. So we just have too many goals going on at once right now. Okay. So I would dial it back. Make sure you have enough to cover your deductibles. Beyond that, let's throw it at the down payment. Okay. Sweet. And so, yeah, after we start doing the HSA, because once you get a certain amount in there, you can put those into limited investments. Would you recommend doing that as well? Oh, absolutely, yeah. Find some good growth stock mutual funds with a proven track record in there,

and that's a great retirement solution because of the tax advantages in there. So that's a great part of your portfolio long term. So I love you doing that, but right now we have some other goals too. So, yes, invest the money once it's past that threshold. Beyond that, let's get the down payment in place. Thanks so much for the call, Nate. Appreciate you. Moving on, we are going all the way to Boston, Massachusetts, my hometown.

Alex joins us there. Alex, welcome to the show. Hey, how's it going, guys? Great. How can we help? So I'm 25, and I just started my career. I'm on the pace to make about $120,000 this year. I have $16,000 in debt and $15,000 in savings. I'm in a spot where my monthly expenses are about

$1,200 to $1,400, but it's not the nicest neighborhood. How long should I stay here and how much money should I have before I start looking to buy a home? Great questions, man. 25 making $120,000 in Boston. Way to go. You have 15K and saving 16 in debt. So my question is, how quickly can you save up? Let's see. If you put 1,000 aside, that gives you 14, so you need 2K more. How quickly could you get 2K saved up and just pay all this debt off? This 30 actually should get about just about that.

Great. Well, our plan is the fastest, surest way to build wealth. So if you're following our plan, baby step one, $1,000 emergency fund, you have that. That leaves you with 14. I would throw all 14 at the 16K of debt, leaving you with 2K left. And you're probably going to free up some payments along the way, right? What kind of debt is this? It's a car and credit cards. Okay. So this is going to free up some payments, which is going to help you get that debt out of your life even faster. Then I want you to build back up your fully funded emergency fund, which is three to six months of expenses.

You just told me they're about $1,400? That's correct. Okay. So you're looking at what? Let's call it $10,000 to be safe? Correct. Now we have $10,000 to be safe? Sure. Now we have $10,000, then we can focus on 3B, which is where we'd save up for the house down payment. And in Boston, that's going to be tough, right? I mean, what are places going around your area that you'd want to live?

Let's say four to six. Okay. So if we're talking $400, I would want you to save up 10%, 20% as ideal to avoid the private mortgage insurance, PMI. But let's say you save up 10%. How quickly could you then save up $40,000, make $120,000 a year with not a payment in the world and a fully funded emergency fund? Probably by the end of the year. Boom. Yeah. You feel the progress, Alex?

Yeah. I like this, but I – and Alex, George has just beautifully walked you through the answer to your question, but I have to know, why do you feel like you need to get a house anytime soon? Didn't you say you're a young guy? 20? Yeah. It's not the safest neighborhood.

What neighborhood is it? It's in Lowell. Okay. Well, you can move. Do you work around there? I do, yeah. So let me ask it another way. Are you in a serious relationship?

I mean, you plan to be married in the next two to three years? No, no. Not at the moment. Well, my point is I'd rent with all these new savings that george just walked you through i'd i'd i'd rent in a nicer area and i would stay renting until i knew that i was ready to plant by by buying a house i'm not against a single person buying a house sure i'm just saying until you know because here's my point you could buy a house for you and then you meet the you know the person of your dreams and then they got an opinion all of a sudden.

That's true. I just would. I'd hold tight. I think you could save the money like George is talking about, but I wouldn't be in any kind of hurry to buy. I would just keep going along and just building wealth. Get the emergency fund in place before you lose. How much more would rent be in a safer area?

Looking at around $2,000 a month. Compared to what? What are you paying now? Right around $750. Oh, wow. That's a big jump. Do you have roommates? I don't, no.

Wow, $750 in the Boston area is impressive for rent. If I'm a single dude, I'm getting a roommate. Yeah, would you be opposed to getting a roommate? I've lived alone for about a year now. I'm kind of liking it. I don't know. Sure, you like it, but $2,000 is a lot for you to be forking over to rent. Right, right.

That's my predicament. So there's a tradeoff there. I don't want your rent to be more than 25% of your take-home pay. You don't have the money for it to be able to buy a house. And you're looking at a 30-year. And I don't want you in debt for 30 years, man. You're a young dude. I want you to be financially successful, to build wealth. 15-year fixed rate mortgage, 10% to 20% down, where the payment is no more

than a quarter of your take-home pay. When it comes to rent, I want it to be the same, no more than a quarter of your take-home pay, because you've got financial goals. And I want you to hit all of those. And so we've got to do this the smart way. You're going to be all right. We'll get you out of that sketchy area in no time. Follow the plan, man.'re going to be all right. We'll get you out of that sketchy area in no time. Follow the plan, man. This is The Ramsey Show. I'm George Camel, joined today by Ken Coleman.

And on the debt-free stage in the lobby of Ramsey Solutions, Chris and Sarah join us. How are you guys? Good. Where are you coming from today? Richmond, Virginia. Wow. All the way to do a debt-free scream, huh? Yep. How much debt did you guys pay off? About $26,600. Wonderful. And how long did that take? About 38 months. Wonderful. And what was the range of income during that time? We started out about $42,000, got up to about $76,000, and I think right now we're set to make about $65,000 this year.

Awesome. What do you guys do? So I'm currently an RN at VCU Medical Center, and then Sarah works at Montessori Kids Universe as a teacher. Wonderful. Well, thank you for both of your public service. That's fantastic. Now, tell us about this debt, $26,600.

What was that comprised of? Mostly student loans and debt to my parents, personal debt. Oh, personal loan. That always makes things interesting at Thanksgiving. Right. All right. So we have the student loan and the personal loan. And you guys decided 38 months ago that you just didn't want to have these hanging around your neck anymore. What happened 38 months ago? So we had just gotten back from our honeymoon. We had found a church we wanted to go to. My wife had heard that they were going to do Financial Peace University at the church we were attending.

And she said, hey, I think we should do this. And I was like, okay. I feel like I was pretty good with money. But I was like, you know, it won't hurt. We can always try to learn something. Yeah, I felt like, because I grew up in a house with similar principles to Ramsey. And I was like, when we got back and spent, I don't remember how much, it was a lot for groceries. I was like, this is, we're not doing something wrong here.

So you gave Chris the nudge of like, hey, hey, what if we went to Financial Peace University? That could be fun. At the time, I didn't know it was a Dave Ramsey thing. I'm just like, oh, it has to do with finances. We can use something to know about finances. And Chris, you were kind of hesitant about this? I mean, I was willing to do it, but it was just a matter of like, oh, I feel like I do money pretty well. So you thought you were crushing it with money. You're like, I'm good. I think I can teach this class. Maybe not that good, but good enough. But you guys went through it, and it clearly got you on the path.

What was the journey like? What were the sacrifices along the way, the hardest parts, the fun parts? I think at first the biggest thing was just like, hey, we need to cut back on groceries because our first grocery bill was like $500 for the weekend. Yeah, we just wanted to save that money up. There was definitely some road bumps along the way, to say the least. Yeah. Shortly after we started the journey,

we had put our emergency fund into this online account, but it wasn't very reachable. And we were trying at the time to sell some furniture and the bank we were at at the time uh it was uh some fraudulent checks and they decided to shut all our uh all of our accounts down and they froze them yes they froze them yeah so it was like all of our money was in limbo. And they basically told us, hey, you got to leave. You know, we can't let you bank here anymore. Wow, you get kicked out of your own bank.

Yeah. They just say we don't trust them anymore, not to give away any names. Right. Right. What does it rhyme with? Trust. It's in trust. There we go.

There we go. Oh, boy. Okay, so I've got to learn about your shirts. They say you're going to want to give up. Don't. What's that mean? It was just shirts that the church provided for us for Financial Peace University. So I think it's just a saying that's like basically you're going to have some tough times.

You're going to want to give up, quit, walk away from it. But the payoff is bigger than the sacrifice you have to make in the here and now. What was the hardest part for you guys? Probably just limiting ourselves. When we started out, they were saying, the person who led it was like, you probably should have a little bit of money to kind of spend on yourself, just a tiny amount.

And so we set it to be like 40 a month you know for like a movie or just to go out to eat once a month or something like that so that was kind of hard because every now and then it's like oh it'd be nice to just go to subway and it's like oh we already spent that money yeah and i think also um just uh um getting oh i forgot what I was going to say to the point where we were just not spending as much

and getting we started off Dave-ish and we wanted to continue our 401ks and still had our credit cards but probably before probably about week 5 or 6

in the class we were like if we're going to do this we got to do it right. All in. Dave Ish gets you Ish results. That's not impressive. Well you guys did this stuff. What do you tell people the key to getting out of debt is? Just sticking to it like our budget doesn't change much month to

month we keep it pretty much the same and just kind of providing encouragement for each other whenever we need it yeah and not giving up and i also think um trusting god to provide because i know there was a few times where it was really tight, and we were like, where's this money coming from when we get an unexpected check? The stimulus checks definitely helped us out, too. Okay. Well, you know what? Finally, a stimulus check.

Come on. It's something good. There we go. That's good. I assume you had a why in this picture, and I can hear her in the background. Yes. You brought her with us today. Of course.

What's her name and age? Aria, and she's 10 months old. Precious. Well, she's here. She's kicking. She's screaming. She's ready to go. I think she's ready to go.

She is. To do this debt-free scream. You guys have worked for it. We are so proud of you guys. You're heroes. Love the shirts. Great encouragement. You're going to want to give up.

Don't. Nope. It's that simple, and it's that hard. that hard i love it all right let's get to it chris and sarah and aria from richmond virginia 26 600 paid off in 38 months making 42 up to 76 back to 65 count it down let's hear a debt-free scream. Three, two, one. We're debt-free! That is how you do it. A family tree change. Yeah. Just like that. Absolutely. Sacrifice, diligence, intentionality. Yep. All those words come to mind. Way to go, Chris and Sarah. All right, guys. If you're wondering whether to buy or sell a home this year I've got some answers you can expect the market to be a lot like last year with prices still on the rise but interest rates are expected to go up to this year so what can you make of all this

well if you're buying a home you might be up against some heavy competition and some hefty price tags we're seeing that all over the country. So if you want to sell your home, chances are it will sell quickly and for top dollar, which is great. Of course, that all depends on where you are because every real estate market is different. But to win in any market, you really have to know what you're doing. This is not amateur hour. You've got to work with someone who knows what they're doing, not your brother-in-law who just got his real estate license who's never sold a house. We have experienced real estate agents at your fingertips through our endorsed local provider program. These are called Ramsey Trusted Pros, and they care about your values, and they care about keeping more money in your pocket. They're going to do right by you, and they are the pros that we trust

to help you buy or sell a home. So check out RamseySolutions.com slash agent to connect with a Ramsey Trusted Pro who can help you navigate your local market. That's RamseySolutions.com slash agent. Wow. The housing market, Ken, it's a stressful one for a lot of people. Yeah, it really is. A lot of FOMO out there,

a lot of people looking to sell, but then they got to turn around and buy, and they go, well, they could get us out of debt. And so there's a lot of reasons to sell these days. But at the top of the market, you got to turn around and buy at the top. A lot of reasons to stay, though, for that very reason. You might sell at the top, but then you're going to overpay for something. So, you know, be patient. Really think this kind of stuff through. And I also think, I mean, you're going to have certain areas of the United States that are going to stay really, really hot. I mean, we saw that

through past recessions. But I think you're going to have certain areas of the United States that are going to stay really, really hot. I mean, we saw that through past recessions. But I think you're going to see a resetting. Remember, there's been a kind of a pause, a moratorium, if you will, on delinquent house payments and renters. That's going away soon. Watch out. It's going to be a lot of pain. Mark his words. I'm telling you, it's just a fact.

It's coming. Yeah, well, do it the right way and work with a pro. Again, this is not amateur hour. Work with a pro who knows what you're doing. They can help you make the right financial decision. Because let me remind you, it's the biggest financial decision you will ever make. Don't go it alone. Check out our agents, ramsaysolutions.com slash agent to find one in your area.

This is The Ramsey Show. I'm George Campbell, Ramsey personality and host of the Fine Print and Entree Leadership Podcast. Joined today by my good friend Ken Coleman, best-selling author and host of The Ken Coleman Show. You can find all those shows, including this one, on the Ramsey Network and wherever you listen to podcasts. Barbara joins us up next. She's in Virginia Beach. Barbara, welcome to The Ramsey Show. Hi. Thanks for taking my call. I really appreciate it. Oh, absolutely. We're happy to help. What's going on?

So I have two beautiful adult children, a son 33 and a daughter 31. My son is nice and stable, married, and I'm waiting for grandkids. But my daughter just celebrated her one year of sobriety. Oh, that's wonderful. I'm thrilled about that. It's wonderful. She's in a great program. But I'm asking, my concern is that I have not a lot, but some 401k money, some beneficiary money through my pension plan. And when she was, you know, drinking, I didn't give her any of the beneficiary, any of the money. I gave it all to my son and we discussed the fact

that he might be able to be like a keeper of the money, so to speak, if I were to pass and his sister was still drinking. But now that she's sober, I'm wondering, should I put her back at 50%, which was my original plan? And just a little caveat here, they both inherited money from their grandmother when she passed. My son put his back into a 401k. My daughter spent all of hers, as you can probably figure somewhat of it, on alcohol. So with a year sober under her belt,

should I take that chance? Should I keep it at maybe 25% and then hope that my son follows through or just go 50-50 and take a chance. What's the conversation been like with her about what she would get if and when you passed? I haven't actually discussed it with her. Okay. Just my son. Is there some reason that you, because you said something a minute ago, you said, should I trust that my son will follow through?

Is there any reason to believe that he wouldn't follow through on your wishes? No, it's just that I'm thinking if I pass and she's back to drinking, he would hopefully keep that money for her, but, you know, there's no guarantee what's going to happen. Otherwise, he is very trustworthy, though, and he's very responsible. So I think he would, but it's a lot to ask him for to be the keeper of his sister's inheritance. I think he's up to it. I really do.

You haven't given me any evidence to believe that he wouldn't be able to do it. You had the conversation with him, obviously, correct? Yes. And he understood it totally? Was he in agreement? Did he have questions that makes you think he doubts that it's the right thing? No, he was fine with it. We didn't go into a lot of detail. So I think at that point he figured, yeah, if she's drinking,

he doesn't want her to blow through the money like he did with her grandma's. But I just, you know, he is 33. He's an adult, but at the same time, it's a lot of responsibility. So, I mean, so the other idea was thinking, should I put it into a trust for her instead with the caveat of she's got to be, you know, X number of years sober for her to touch it? Or I don't even know if I can do that, actually. You can do whatever you want in a trust. Yeah, you can.

It's incredible what you can do there. So, Barbara, how old are you? I'm 63. Okay. So you've got a long ways to go here. What I might do, I would have an honest conversation with both of them and say, hey, listen, I want to leave you both the 401ks, all of this, when I pass. I want to stair-step into this.

I love that you're sober. I'm so proud of you. But I want to make sure that I never become an enabler for you or cause you to do any harm to yourself. So here's what I want to do. Every year, I'm going to increase the beneficiary amount until it gets to 50% every year that you're sober. And so that way there's some incentive, not that this is what's keeping her from drinking, obviously. I mean, she's sober on her own volition and I love that. But it could be a way to say, hey, every year we're going to stair-step this into it,

and in five years' time, we're going to get to that 50% where she gets half. That's one way to do it. That's a great idea. Okay. Yeah, and George, and I have a question. I'm kind of saying you're the money guy. I like the idea of her putting it in a trust because then that takes the responsibility off of the brother and the son so that she's not, you know what I mean, where it's now it's your wishes and you legislated it through the trust. And the trustee is the one that makes the decision based on your wishes, and it takes that off of him.

That might be a good way to go. There's a relational component here where it puts them in an awkward position. And I don't know what they would get in a quarrel if she gets this percent and he gets this percent. off of him, that might be a good way to go. There's a relational component here where it puts them in an awkward position, and I don't know whether they would get in a quarrel if she gets this percent and he gets this percent. I don't know what their relationship is. Yeah, it's tentative just because they're estranged. She's on the West Coast, he's on the East Coast, and so they don't have a lot of communication,

but I'm hoping that will change now that she's sober and productive. Well, you're under no obligation to do anything with this money. You could give it to a stranger on the street if you want. So anything they do get is an absolute blessing from you. And there's nothing that goes, well, you're my mom, so you have to give me the money. There's none of that. If there's that level of entitlement, then they're not getting it. So I think having the honest conversation with them is key, though. Don't let this happen where they find out after you pass and now it's a huge fight. That's not the legacy you want to leave. So I would have the conversation as soon as possible and let them know where things stand.

Okay, perfect. Thank you so much. I really appreciate you guys. Thanks so much for the call, Barbara. Awesome. All right, let's move on to Dan. He's in Portland, Maine. Dan, welcome to The Ramsey Show. Hey, thank you very much for taking my call. Absolutely. Yeah. So I'm a little

late to the old baby start plan or the baby steps. You're right on time, man. Never too late. All right. Well, I got the emergency fund taken care of. I got the focus on the debts. Everything's paid off except for the house. But I happen to have two kids in college. So step five kind of snuck up the list on me. And I took out a HELOC loan to kind of be a safety net to cover the college tuition cost. Well, hear me out here, please. HELOC loan to kind of be a safety net to cover the college tuition cost. Well, hear me out here, please. So I took that out just to basically have money to pay for school because I had been working on paying down everything. And I didn't have an adequate emergency fund to send big checks off to colleges. But so now that you already said oh no once,

I'm sure you're going to say it even louder this next time, but I just want to hear your thoughts on it. So I'm thinking about where the HELOC is an adjustable interest rate, and it's probably going to start ratcheting up. And I'm looking at my 401K, and it is underperforming currently after having a good previous year. And I'm thinking about taking out a loan to wipe out the deal. Oh, no.

Damn. Damn. Come on, dude. I was rooting for you. You had me in the first half. What's going on here? You're robbing Peter to pay Paul. You're talking about a safety net.

Debt is a terrible safety net. When you owe people money, you don't have safety. True. Would it not be better just to owe myself? No, you're robbing from your future, dude. You're 53. I want you to retire with dignity. Your kids are going to have to take care of you after you, you know, died on the sword to help pay for their college so that you could go into debt. This is a terrible sacrifice. Okay, so... I want you to put your own mask on first, and that means we're going to get you out of debt, we're going to get

Dan investing 15% of his household income, and they can be on their own for college. You're under no moral obligation to foot the bill. I know you want to, and you can help be on the 15% after you're investing 15%. This is after we pay off the debt, which means we are not investing until this HELOC's paid off.

And then we're going to start investing 15%. And you can do catch-up contributions as well at your age to help you get on the right foot for retirement. So how much do you have in retirement right now? About $400,000. Okay, that's comforting. I was hoping you would have a number that had a few zeros on it so that's good but we need to get that number a little higher so that you can retire and not be freaking out about how you're going to pay the bills yeah so the kids are on their own right now

and that's okay have the honest conversation with them say hey kids I want you to become debt-free stay debt-free, but right now dad's got to take care of his debt. He's got to take care of his own retirement so that I'm not a burden to you in 10 years, in 15 years, in 20 years. Any thoughts on the fact that basically I have a seven-year college span and this is year five. Basically the oldest boy has already completely paid off. Well, you guys need to make a plan together, and that looks like scholarships and part-time work and a lot of hustle.

But at the end of the day, it's on them, the decisions they make. Wishing the best for you, Dan. Stick to the plan. Don't do Dan's plan. Do Dave's plan. It's worked for millions of people for 30 years. That puts this hour of The Ramsey Show in the books. My thanks to Ken Coleman, all the folks in the booth making the show happen, and you, America. We'll be back with you before you know it.

Hey, folks. Ken Coleman here. Did you know The Ramsey Show is one of the most popular podcasts in the world? Get your daily dose of advice on life and money. Check out all of our shows from the Ramsey Network wherever you listen to podcasts.