The Ramsey Show - App - Focused People Build Wealth—Distracted People Stay Broke

Episode Date: May 14, 2025

Live from Ramsey headquarters, it's the Ramsey Show where we help people build wealth, do work that they love and create amazing relationships. I'm Rachel Cruz hosting this hour with my good friend and co-host of Smart Money Happy Hour, George Camel. And we will be answering your questions. So give us a call at 888-825-5225. And we'll be answering your questions about your life, your money, relationships, career, anything and everything.

Give us a call. At first in Miami, we have Sally on the line. Hi Sally, welcome to the show. Hi, thanks so much for taking my call. I'll try to be quick with my question. My husband does well financially, but he tends to be a bit controlling with money. He's always taken the inheritance I've received each year and invested it in the stock market. Recently I received about $50K, which will probably be the last bit of inheritance

for a while. Since I'm a stay at home mom with no allowance, I'd like to keep this money in a separate savings account in my name only, but he's adamantly against this and wants me to give him the money to invest. He said he'll give me the monthly dividends as an allowance. But I'll help you with more freedom than that. Oh, geez, Sally.

I don't like the word allowance used when it's not with your own child. Right, right, right. Is this how it's been your whole marriage? Yeah, and sometimes I get an allowance and sometimes I don't. Based on your behavior? Did you clean up your toys?

I don't understand. Do you have access to y'all's checking account? Just to go, do you have like a debit card to go and spend? I do. I use the credit card that's both of ours for gassing groceries. But if I need to like get a haircut or something, I use my debit card and I have money in there

that I usually, I get money from my mom sometimes. Why are you getting money from your mom? Because what he's giving you isn't enough to cover the things that you want or need. Right. Sally, how long have y'all been married? 15 years. Okay. Does this feel weird to you? 15 years. Okay. Does this feel weird to you? Now that I say it out loud, it is. Okay. Because it's very weird. It's just financial abuse. Well, it's gotten worse since we had our child. I have a six-year-old and I'm not able to put him in like swim lessons and stuff. And he does really well financially. We have about a $5 million net worth.

He makes about 400K a month or not a month, 400K a year. I don't know if I can convince him. And he says that I'm selfish to keep the money in a savings account and that I'll lose money to inflation. Have you shown that you're financially irresponsible? Where did all of this come from? He probably thinks I am, but I'm not. I shop at Ollie's bargain basement. You know, I don't spend a lot of money. Okay, I don't, okay, so when you come to him and you say, I, we need to, have you ever asked,

have you guys ever breached the conversation of, hey, we're gonna have a budget and I'm gonna put in exactly what I need to spend that stays within what you make, that we're not going crazy, we're not going deep into debt, we're not doing any of that, we're gonna live within our means, and I have full access to our money,

and that this is what we're gonna agree on, and that you have a full say in it. Has there ever been any kind of conversation around those lines? Kind of, I've asked for an allowance before, and he's done it for a couple months, but then, you know, it's just not very much. It's like four to $500 a month.

And where's the, do you have access to see where he's spending money? Yeah, I mean, I could look, he's very frugal. He just golfs a lot and does like small sports gambling, like a couple dollars here and there. Are you sure it's just a couple of dollars? I don't know. I mean, he hates to spend money.

So. Okay. Well, there's some serious dysfunction in this, Sally. And is he controlling in other areas as well? Kind of. Yeah. Yeah. function in this, Sally? And is he controlling in other areas as well? Kind of. Yeah. Yeah. Has he been abusive? No, not physically, no. Not physically, but verbally? Yeah, a bit manipulative and kind of condescending. What are some of the words that he would use when he's kind of like in a fit when it comes to money? What kind of stuff does he say to you?

He says that I don't understand money, and he just kind of like yells and clenches his fists and he's like, just says that I don't understand and if I just put the money in a savings account, I'll just be like everyone else. And he said, then I'll spend all the money. And then he said, I'll come back to him and need more money. He thinks that I'm just going to blow through this 50 grand and then come back to him asking for money. So there's a clear, he does not trust you when it comes to finances. And he thinks that you're not smart enough

to even understand it. Right, which I- And there's a lot of gaslighting where he makes you think you're the crazy one. Yeah, yeah, Sally, no. So right now, from what you've given us in this call I would have my own account and have your own money in and then that that's that's a very reasonable step for you and Then beyond that Sally what we see constantly is that money is a window into the relationship, right?

That that this really isn't a money issue. This is that you have You have a jerk of a husband who treats you, which sounds horrible, unlike a team, right, that a healthy marriage would represent, that we are in this together, and I trust you, you trust me, and we're gonna win, and we're gonna be excited about this. It is a downplaying and manipulating,

and yeah, downright abusive, you know what I mean, of how he's controlling money and all of that. Like this is not, you're not in a healthy place, right, with your marriage at all. And so that's what I would start to target, Sally. The money is gonna be there for you as a tool if you need it, if you need to get out of this marriage.

But what I would be pushing him towards is we need to go to marriage counseling ASAP. Because I can't function like this anymore as a human being in this marriage. You know what I mean? It's horrible, Sally. You're in a really bad situation and I want you to feel the weight of that. That you're not crazy. You're not crazy. Thank you. I can't see the forest or the trees. It's been so long, but I appreciate that. Do you have community around you, Sally?

Friends, family, people that you can confide in? Out of state I do. So I'll be spending time with them this summer. So that will be nice just with my son and I. So we'll have some time away for a little bit. This inheritance, this is just yours, right? He has no legal right to this. Correct.

Okay. Yeah. Except he's my husband. I would keep it separate and I would use that to get some counseling just for yourself right now. I don't know that he's willing. I hope he is one day. And if he's not, Sally, this is a marriage that doesn't survive. I wouldn't want you, I wouldn't want my sister to be in this kind of marriage long-term. If he's not willing to do any work and to change what he's doing,

this is, this is not a good setup for your life, Sally. You're being held financially captive. Yeah, you are. It was exactly right. Yeah. And so normally when we talk about, you know, money, we want to combine everything when we're married, but when there is, and we say this all the time, if there's any level of abuse, mistrust, addiction, anything that feels like you need safety, you need to create that for yourself and Sally, this is it.

And I would, again, this is to protect you, that's not the real issue. The real issue is that your marriage is not in a good spot and you need to figure that out quickly for you and your son's sake up next we have Jake in Grand Rapids hi Jake welcome to the show hi how are you doing we're doing great how can we help hi there yes so I'm fresh out of high school. I don't have any debt.

I've never taken out any loans. And I'm curious that when I start to go look for a house 10 years down the line or whenever, how will I be able to get a mortgage without having any credit? Oh, Jake, you were speaking my language. This is one of my favorite questions because it feels like a magic trick. You know, when people ask this question, they go, I need to build a credit and I can go

through how to rent a car without a credit score, renting an apartment, all the things. But the house is the one that gets people. So that tells me you already know there's a way to do it. Yeah. So what have you found out in your research so far about how to buy a house without a credit score? So I've heard different things and it doesn't really make sense to me. Someone brought up a manual underwrite

and I'm not really sure what that is. I don't really understand what they're talking about. Perfect, so when you think about the credit score, this was invented in the 90s, and all it did was make it easier for lenders to kind of do a vibe check on the people they were lending money to, right? So Jake has a high score, great.

He's a reliable borrower. We know Jake's probably gonna pay back. Well, back before credit scores existed, instead of automated underwriting through computers and AI and credit scores, there was something called manual underwriting, where a real person like me sits down looks at Jake's tax returns his pay stubs his previous payment history on his rent and utility bills and insurance and go oh okay Jake's a reliable person

he's gonna pay back the money he borrowed and so that's all manual underwriting is is instead of relying on a credit score it relies on a real person to look at your financial documentation. Yeah, versus like a computer or technology doing it. It's a person, so manual versus not. And a lot of mortgage companies, because they're truthfully just lazy, go, no, we don't do that.

So people think, wow, I can't get a mortgage without a credit score. But there's a lot of companies that will do it. And the main one that specializes in this is called Churchill Mortgage. They've been a partner of the Ramsey Show for over three decades now. And that's who I went through to get my last mortgage

without a credit score. And they made it real easy. You'll have to supply things like, you know, 12 month history of your savings and bank accounts, tax return for verification of income, rental payment history. So if you've rented an apartment or even from your family and you have an on-time payment documented

every single month, that counts. And then, you know, an alternative trade line like a cell phone bill or insurance bill that you paid regularly. So if you have all of that, plus you got a solid down payment, you're gonna be in good shape. It's gonna be a kind of a nothing burger.

Gotcha, all right. Yeah, that makes a lot of sense. Absolutely. So great, and you know what, Jake, I'll throw in, George, I want to give away one of your books to Jake, Breaking Free from Broke, because he has a whole chapter or multiple maybe even. A whole chapter on credit scores specifically. On this specifically. But Jake, you're at a great age though to how to take these principles and actually apply it to your life because you're starting adulthood. I mean, like you're

in it. And so this book is gonna be probably the best guide to help you continue to live debt free. What does it look like to honestly build wealth in a really healthy, solid way, not in like all these like shortcut ways that I feel like so many people are talking about. And just avoiding the noise and confusion and traps out there.

And Jake, you've done such a great job. I wanna applaud you. If you just continue down this path, you're gonna have so much money that credit scores will become irrelevant because you don't need to go borrow done such a great job. I want to applaud you. If you just continue down this path, you're going to have so much money that credit scores will become irrelevant because you don't need to go borrow money for a car loan. Right? You're going to be able to pay cash for a used car.

Yeah. So keep it up, man. Yeah, that's great. That's my encouragement to you. You're doing things the right way. Hang on the line. And Emily will pick up. We'll get you that book.

All right. Up next, we have Derek in Salt Lake City. Hi, Derek. Welcome to the show. Hi. Thanks for taking my call today. Yeah absolutely. So my question is kind of regarding my girlfriend and her desire to work or not work really. Give you guys a little bit of background. So she's 26 still in college working on her bachelor's degree, and her parents have a deal with all of their kids that as long as they're in school, they'll pay for all of their college and all of their living expenses until they either graduate

or get married. That's a wild situation. Well, she's working on her bachelor's degree and she's 26. Has she been in since she's 18? So she did take an 18-month service mission for her church, but other than that, she's been full-time school through summer. And just getting a bachelor's still. This isn't like a master's or anything.

Nope, this is just her bachelor's degree. Is she just stretching it out because she's got mommy and daddy's bank attached? I'm like, sweet, why ever leave school? I'll be in school till I'm dead. Is this so? That's kind of my fear. So she does, she has two older brothers in the same situation who are 31 and 29.

And they're still in school? Also still working on, yeah, also still in school. Never worked. Hey parents, let this be your memo. Derek. Don't do this ever. Derek, does she feel like a winner to you? That's, no, not at this particular moment. Yeah, I don't know how long this relationship's gonna last

cause man. So that's kind of where I didn't know how bad the situation was. I didn't know their work history or anything, just recently found out that none of them have worked. Talked to her about that. That's so wild. We've been dating a year, so we started talking about marriage and finances and this is when it all started to come up of okay what's the plan and what's

her plan and for now it sounds like as soon as she gets married her either me or future husband is taking care of all expenses while she finishes school. Yeah. I would get some clarity around all of this. Have you shared with her, your concern of saying, Hey, I'm kind of worried that you're just going to stay in school forever because your life's being funded. Have you kind of been honest with her? Yeah, I've been honest with her. And that's why I reached out to you guys because we were talking about this and I work full time.

I have a very stable job and been doing that for a while debt-free kind of whole nine yards there but I asked her to get a part-time job during the summer next next semester to kind of get some financial freedom away from from her parents. But if you're in her shoes why would you have because hopefully you have the character to say I'm an adult and I'm gonna start making that was your test adult like decisions and now it's showing that her character isn't there yeah that was my tester to see if she was willing to put in some effort because I want to make things work but

if if I'm expected to take a hundred percent of the financial burden for the next 50 years I don't I don't know if I can handle that. Right. And it's not even like a situation, Derek, where, you know, she's working and she's like, hey, but when I become a mom, I want to be full-time at home and that I want my job to be that, right? I want to transfer home and be a full-time mom. But there's no initiative at all in who she is. And what always that fear is to me is that it starts to bleed into other areas of her life. You know what I mean of like this procrastination?

Just apathy. Apathy or laziness. Lack of purpose. Or like, I don't know what it is, but I'm like, man. Yeah, it's just not a very, it's not a lot of attractive qualities that come out of that. And I'm not saying that she needs to like, go be some corporate woman climbing the ladder and working 80 hours a week.

It's not even that, but it's just like, yeah, I want the dignity to have my own money. I'm 26, I'm 26. And I've been in school for what? Eight years. I don't even know how you drag out a bachelor's degree for eight years. That's what I'm saying, even if it was a master's. That's honestly impressive.

Is she just taking like part-time classes or like flunking every time? She's had to retake a lot of classes where she's... Failed? She wants to get into like a master's PhD program. Yikes, dude. Yeah, Derek. For those reasons, I'm out.

I mean, I'm sure she's a wonderful person, but this is not someone I want to continue down the path with personally based on what you told me. Because what's so hard, Derek, when you get to this point of a relationship, and like, and George knows this, he's married, and so am I, but it's like, you have the romantic side, right? You fall in love, they're attractive, you know, you have chemistry, like all that stuff is great.

But then what ends up kinda where, like, the rubber meets the road is when real life happens. And it's like, I've chosen someone in my life to- You wanna partner in this life. Yeah, to walk life with, and life isn't easy. And it's like, I've chosen someone in my life. You want a partner in this life. Yeah, to walk life with and life isn't easy. And so there's a level of resilience you want in a partner. And- Little grit. Yeah, and none of that is coming through right now.

And I don't want to blame her for her brothers, but the whole family says- A lot of dysfunction happening here. That a 31 year old man is still in school. Like that's her brother. And that's who you're marrying into too, Derek. Who's hiring this guy? I see on your resume here,

you've been in school for 13 years and have yet to get a bachelor's degree. Sure, you get the job. Oh man, Derek. I'm so sorry, Derek. What do you think? What do you think? What's your next step?

So that's my next step was to allow her some time to get a job. and if she wasn't willing to work You know 15 20 hours a week. It was kind of the end. I think I think that's fair I yeah, I don't think that's unreasonable when you're not, you know Looking for her to make a hundred, you know, it's like oh, well, she's not making a hundred thousand a year She's not you know, it's nothing to do with that It's just the effort as a human and an adult in the world today. Go hit play on boys to men, end of the road and grieve this relationship.

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So you can sign up for free at everydollar.com slash webinar spots are limited. So make sure to check that out. All right, let's go to John in Aspen. Hey John, welcome to the show. How's it going? Good, I feel like I have so many dumb and dumber jokes right now, I could start.

That's mostly what's happening in Rachel's brain is dumb and dumber quotes. I know, but how can we help? So I have a two part question. I'm gearing up to buy my first home at 25. Have very little debt. I have a $330 truck payment, and then I owe a little less than $3,000 on credit cards,

and I have a total of $15,000 available to me. So I'm in a good position. My girlfriend is moving to where I'm at here in October, and I'm curious on if I should a wait to rent a little bit see how we live together and then buy a house and then also how do I know when I found the correct mortgage you know or at least home loan lender where do we start where do we start what's the truck loan what's actually left on the loan 16 $16,000.

Okay. And you say $30,000 in credit card? What did you say? $3,000, right? $3,000. Yeah. Okay, so you got $19,000 in consumer debt. Yes.

And you have $15,000 in savings. No, I have $15,000 available for credit, like available credit cards. So about 20% I'm% is my total credit usage. Okay, so you have no money. No, I have about $2,000 saved up. So you have no money. Okay. Right?

Because you have all this debt, so you know what I mean? Your liquid savings compared to your debt. Yeah, it's a negative net worth with your debt. So that worries me, is that you think you're in a great place financially, and really we have some work to do. We've seen a lot worse. You can clean this up pretty quick. What do you make a year?

About 52,000, and then at the end of the year, we get bonuses. And I do own a LLC, just side business, that typically brings in about $1,000 per job. Okay, what do you make from that per year, what'd you say? So just started it up, haven't even been a full year. So I would say this year, I mean, I'd be lucky if I hit 10,000.

Okay, so you'd probably bring in about 60,000 this year, give or take? Yeah, I would say plus, you know, somewhere in that range. Okay, so number one, I would focus on building some financial foundation before you even think about home ownership. And here's what that looks like. Getting completely consumer debt free.

So paying off the truck completely, paying off the credit cards completely, not going into any more debt, and then building an emergency fund of three to six months of expenses. That might take you a year to do all of that. Yep. And so there's a prere to do all of that. Yep. And so there's a prerequisite there. Then once we have that foundation, we can begin

saving up for the down payment on top of that in a separate savings account. Yeah. And the reason why we do that, John, is because what we find is home ownership is extremely expensive, right? So when the heating and air goes out, you have to take care of the yard. I mean, there's so much that goes into owning a home and it's very expensive And so when broke people go and buy homes, they become broker happens. They get in a really stressful spot. And so putting yourself in a position where you have such this like Zero risk lots of money in the bank. So when things come up, it's like oh that broke I'll just fix it here out of this cash that we have.

We're not having to go deeper into debt for things that happen. We have the ability to be autonomous with our money and that is a very stress-free way to live versus the opposite. And the opposite would be what many people do, John, they're in your situation and then they go and get a mortgage and get a home

and they're dating someone, they buy a house with the person they're dating and then they look up and three years, they have no money, a relationship that's broken off, but the other person still is on the deed of the home and like all of it and it's an absolute mess and they end up calling our show. So I'm glad you called when you did

because we want this to be way smoother than what we see a lot of people do. So doing those first two steps like what George said is key and then saving up at least a 5% down payment, if not more, that would be great. And then walk him through George, just kind of our formula when it comes to homeownership because he's asking about his mortgage.

Yeah, you said what's the best mortgage to get for this. You wanna focus on getting conventional fixed rate mortgage. There's a lot of crappy mortgages out there. Conventional fixed rate is the way to go. And then you've heard of a 30 year mortgage, right? Yeah. And then there's a 15 year mortgage.

And so that's going to increase the payment, but it gets you out of debt 15 years faster while saving you potentially six figures of interest based on home prices and the interest rates we're seeing out there. And so people go, well, I can't afford that. Well, that might mean you need more of a down payment. You need a bigger down payment. It might be a 10, 20, 30% down payment, which could take longer. And it also might mean we don't need the McMansion when we're a single guy or we just got married.

Maybe that's a town home or it's further out of the city. If you're in Aspen proper, I imagine home prices there are insane. Very expensive. Oh yeah, definitely. So this is gonna take a while. And there's no rule of law that says you have to own a home by 26 or else you're a failure. So if this takes you three years to save up the down payment, that's okay. But you wanna make this house a blessing

instead of a burden. And too many people rush into it because they think I don't wanna waste money on rent. And so they just jump into a house at all costs. So that's one thing to avoid, stick to a 15 year fixed rate conventional mortgage where the payment is no more than a quarter of your after tax income.

So think about your gross income, subtract the taxes, but then don't put in the other deductions like healthcare and 401k, that doesn't count in that 25%. Just after tax income, keep that to around a quarter of your income so that you have margin to continue the other baby steps and have money to go on vacation

and save up to upgrade things and pay off the mortgage early. Oh yeah. So pretty much just keep on working and keep on just trucking along and save up a good amount so I can actually be comfortable. Exactly. And then just changing the mindset of, well, it's just a little bit of debt.

Any single piece of debt in your life is stealing from your future. It's stealing from your paycheck. So I want you to look at debt like the villain and get rid of it, cut up the cards, and stick to using your own money. It changed how I handled money, John. Back in the day when I got out of debt,

I cut up that card. I started spending way less. I realized the credit card was causing me to overspend because I was using someone else's money and paying it back later. Okay. Yeah, well- Well, thank you very much for the advice.

I appreciate it. Yep, for sure, John. Thanks so much. Thanks for the call. Yeah, I think that's what's hard. George's- I feel like the fuddy duddy sometimes. Don't you ever just want to grant someone their dreams

and go, go for it? You know what, John and Aspen, you go buy that house right now. Add to cart with that house, go for it. You know what, John and Aspen, you go buy that house right now. Add to cart with that house and go for it. But I care about John. A lot of people, they just want to tell John what he wants to hear. For sure, yeah.

Which is, you deserve it. You work hard. That's not a lot of truck payment. You could still afford a mortgage on top of that. And it's just, we get the calls when they thought life was going to work out perfectly and now they're drowning in payments or they moved in with the girlfriend and now the girlfriend is no longer the girlfriend.

Well, that was the call that Ken and I think Jade took earlier this week maybe. They were telling us that, yeah, deed to a house and they ended up breaking up and he stopped paying. Oh, I was on that one. The mortgage. Was that you? Okay. Yep.

I remember it very fondly. Yes. So, I mean, it's just those situations and- Yeah, she moved out, but her name was on the deed and the mortgage, and they're no longer together, and it's getting foreclosed on now. That's right. Because he stopped paying. That's it.

And we're like, this is it. Yeah, it's so hard. And she's like, well, we don't communicate. I'm like, well, you're gonna have to start to, because you guys got into this business transaction together. I was together. The most expensive financial decision of your life. I know, and what's always so funny is that, that the advice we give, we joke that we're weird.

Yes. Because, you know, for John and his situation, like that is so normal, just to have a car payment, have some credit cards. I haven't hit the credit card limit. I'm way under. So I'm being responsible. Right in his head. He's like, I'm being responsible. Having access to $15,000 of other people's money is different than having $15,000. Yes, and yeah, and not a big savings, you know, all this, like that is normal. And that's why our advice usually on the show

is the complete opposite situation of what people are doing. But, and it does, it gets back to just this common sense approach, but it's the one that works that we see time and time again. So I'm glad, I'm glad he called. Yes. I don't want John to be average.

I don't want him to settle for that. Average sucks in America. The average 401k balance sucks. The average car payment sucks. You can do better and escape average and break free from broke if you're just willing to do some hard things for a short season. He's not far off from being completely debt free with a fully funded emergency fund. 12 months of changing some habits, changing his mindset. He can do this stuff.

Our question of the day is brought to you by WhyRefi. When life happens and those private student loans go into default, WhyREFY offers real responsibilities, not judgment. YREFY will help you explore low fixed rate based loans on your unique situation, based on your unique situation. So go to yrefy.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 Mason in Michigan.

Is Dave Stantz to only buy a cell phone in cash or is he okay with putting it on an installment plan with a cell phone provider over two or three years? Couldn't tell you Dave Stantz. I could guess Dave Stantz, but we can give you George and Rachel Stantz at least. I don't want to put words in the guy's mouth. He's not here to defend himself. But the simple answer is yes, only buy a cell phone in cash. An installment plan is effectively debt

because you have to finish paying off the phone before you actually own it. And you're also locked into this contract for two or three years. So if anything happens, you want to switch, you want to change phones, well, you're kind of stuck in these handcuffs with that cell phone provider. And so I always recommend buying a phone in cash.

And if you can't afford the brand new iPhone 16 Pro Max with 512 gigabytes, then don't buy it. You can buy a used phone. In fact, I just sold a used phone online. Oh, you did? Within a day. I got great money for it. Nice.

And you were laughing at some guy's phone in the lobby. It was like an iPhone 6. It was so vintage. Oh, you did? Within a day. I got great money for it. Nice. And you were laughing at some guy's phone in the lobby. It was like an iPhone 6. It was so vintage. It had the one lonely little lens. We were taking pictures and George, I never even noticed that stuff. George is like the Apple guy.

And he's like, hey, is that the iPhone model 4? This is from a former Apple store employee, as you can tell. I know. And listen, and the guy in the lobby with the phone, he's doing great. He's thriving. He's living a great life. Thriving. He's fine. So you can buy a cheaper phone if you need to. All's going to be okay. I feel like these installment plans also have caused like cell phone inflation because the cell phone companies like we can charge whatever

they'll just put it on payments. Yes. So it's part of the problem and it causes you to get into a cycle where it's like a gateway drug to other payments. If you're okay with this payment, why not buy now, pay later? Right, right. They promise 0% too. Well, and the thing always is, when you get stuck in a system where you're locked in and you cannot get out, that's not fun.

Like that's not what you wanna do. So that's essentially what debt is and essentially what these kinds of plans are. That's the simplest answer. Good question. I hope he's buying an iPhone. Don't be an Android guy. Oh, come on, George.

I'm not an elitist. Such a judgmental. Do you know I had an Android? Did you? Yeah, I had a BlackBerry. This is back on 2007 or something, but it was a BlackBerry. That doesn't count, does it?

And then an Android. That's not an Android. No, it's an Android. That's not an Android. No, then an Android. I'm giving you my cell phone. I was a Nokia user and then a Blackberry and then an Android for two years and I swear I would never get an iPhone. I don't know why, I didn't like them.

I didn't like the people that had them. There we go, that's the real answer. That was in like 2010. And now you've changed, now you are that person. Now I'm that person and I've been that person for a while. I kid, I like to upset the Android people with their green bubbles. I don't need you in the group chat, all right?

That's all I'm saying. So Drew, let's go to Lauren in Kansas City. Hi Lauren, welcome to the show. Well, hello everybody. Hello, how can we help? Okay, so my question is, should I take money out of my savings to start a small business,

to hopefully make more money, to save more money? Because at this point, I think I'm on a baby step six. I just own a three bedroom condo, technically in Branson, Missouri, and I'm trying to pay that off as quickly as possible, but I'm literally working 80 hours a week to try to get ahead and I'm killing myself.

Oh girl. What are you doing for work and what do you make? Well, I am a property manager at a choice hotel and well, I make 20 an hour, but so that's not even 40 grand a year. And my front desk agent at the Hilton and that's 16 an hour. So I probably make about 34 a year if I'm lucky after taxes. And you're legitimately working two full-time jobs?

Yes. That's exhausting. Right now I'm at the Choice Hotel and then I leave here at 2.30 to work 3 to 11. What does the growth track look like in the hospitality world where you can make 75K a year? Well, you're wanting to start a small business is what. You wanna leave this industry completely?

Maybe not completely. I wanna do the, if the business got busy enough, I would leave the hotel business, but if not, I just wanna add extra income. Sure. If I'm more passionate about events and entertainment and mainly party planning. So pitch us your small business idea.

How much is it gonna cost and what's it gonna be? Okay, so I wanna rent out photo backdrops, you know, like the florals, like the pretty stuff people stand in front of to take pictures at like bridal showers, baby showers, weddings, Mother's Day. And I do have a couple of connections like with the Hilton and the convention center in town and there's a lot of weddings and events

Have you done these before Lauren? Yeah, I have but it's just like I have two backdrops that I own personally Okay, and I'm bringing them out a handful of times and how expensive how much money can you make by doing that? Like if an event rents out one of your backdrops, how much are you making? Well, I'm depending on the backdrop I mean a hundred well two hundred dollars for the most basic one and like up to four hundred dollars depending on how fancy the backdrop is but my issue is only have two and they're not fancy so if I invested in a more backdrop it's gonna cost me anywhere from three grand to five grand just to have a handful of backdrops. Okay and how much do you have in your savings? 30,000. 30,000. Nice. Are you single kids? Yes. No children.

No man. Yeah so is $25,000 a good emergency fund for you? Do you feel comfortable with that? It feels like a lot. Oh yeah. Yeah for sure. And I was just trying to, because I only owe 54,000 on my condo. So I was trying to just get up to 60, pay it completely off. And then my 5,000 would be my emergency fund. But it was like, should I try to do the side gig or the side project, the business, to make more money quicker without killing myself? How much of this can you do on your own without hiring other people? project, business, to make more money quicker without killing myself. Yeah.

How much of this can you do on your own without hiring other people? Cause you're kind of stuck trading your time, right? You gotta bring the backdrop, set up the backdrop, break down the backdrop. You gotta keep it local to where it's drivable, right? Exactly. For the most part, I can do it all by myself.

Now, in addition to the backdrop, I also do balloon arches, and those can be anywhere from $100 to $300, depending on how much time it takes and how many balloons it takes. Yeah. Well, I mean, if you had a great backdrop, Lauren, you could charge $600, and you did one of those a week. I don't know how many parties are out there.

That's $2,400 a month. Yeah, that's $2400 bucks a month. It'll be more popular during special events and holidays like Christmas, New Year's Eve. Sure, sure. Because ideally you could get to the place where this replaces the front desk job that you're making 30 for. And if you could do this instead,

maybe still keep the other one, but replace at least one of these so that you're just working a few hours versus till 11 every night at the front desk. That seems worth it to me. And it seems like it's been somewhat proven out, the fact that you have to. You got connections, you've done this before,

you've made money. So I would, yeah, if you're gonna spend cash on this and go with a small investment upfront with three to five grand, I would go for it and see where you can take this thing and see how, you might end up needing to hire someone out because you're working and can't be at every single event in all places at one time, but maybe you pay them,

you know, 15, 20 bucks an hour to go set it up and break it down and you still make profit. And that way you don't have to be everywhere. Yeah, exactly. And it doesn't take long. I mean, they're heavy and kind of annoying, but it literally takes me like not even 30 minutes to set it up and get it in place.

And then 30 minutes to break it down and put it in my car. But also drive a Prius. I was gonna say, I feel like you're gonna need a pretty big car to carry all these backdrops. So what I don't want you to do is go, I had to finance a $50,000 van to transport the backdrops. So just be smart about it. I think my car has been paid off for nine years.

So I'm gonna let it die on me. Lauren, you've been very smart. You don't have any consumer debt. You have a lot of savings. You're taking your time. You're working to pay off the condom. I mean, you're doing your your gut so far is correct, what you've been doing.

So yeah, I trust you. I trust you. And maybe I'd say I'd work on saving up and cash flowing a SUV or van so that you can use it for business and increase your income that way too. Yeah, cause I also wanted to like, not just do the backdrop, but you know, make it pretty,

you know, purchase a few like benches, well to have a couple, but you know, make it pretty, you know? Yeah. Purchase a few, like benches. Well, I have a couple, but they're like fold up benches. I can fit in the Prius. I love it. I can't get couches and stuff. Yeah, that's a lot. Too much. For sure. Just go slow and be smart about it.

Use profits to reinvest in the business and start to grow this thing and see where it goes. Yeah. I'm for it. People love a balloon arch these days, Lauren. Ladies love a balloon arch these days, Lauren. Ladies love a balloon arch. You're in a great business. The men could do without them. Live from Ramsey Solutions, it's The Ramsey Show where we help people build wealth, do

work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend and best-selling author George Campbell. You can also hear us on our other show Smart Money Happy Hour so make sure to check that one out. And we are taking your calls at 888-825-5225 talking about your money, your life, relationships, career. Just give us a call and we are here to answer your questions. First up we have Ray in New Jersey. Hi Ray, welcome to the show. Hi, thank you for having me. Yes.

My question for you today is how do I convince my teenage son that day trading isn't really a good way to make money? Ooh. What got him into day trading, like an app or something? Yeah. So he, as a kind of a background, he was talking to me recently about Cash App and the stocks in there. And so he actually has $42 in Cash App and he's trying to convince me how this is a great idea to make lots of money

and if he had hundreds of dollars that could turn into thousands and just trying to. And how old is he? When you say teenage, is it like 13 or 18? He's 17 turning 18. Well, he knows everything. What good are you at this point? Correct.

Correct. I'll tell you this much, the best teacher that convinced me was my own stupidity when I was that age. So that might be the key to solving this is you just let him keep doing it until he either becomes a multimillionaire and buys you a house or goes completely broke, which at 17 he didn't have much to begin with. And he learns that the stove is hot. Let's not touch stoves anymore.

That might be my strategy, just seeing, I cover it in my book, Breaking Free from Broke, I have a whole chapter on investment traps, and I cover day trading because people see it as a tool to create wealth. And as I looked into day trading, here's what I found. One study found that 97% of day traders who persisted for more than 300 days lost money.

So if he hasn't lost money yet, just give it time and he will figure it out. And if he thinks I'm gonna be the 3% mom, his risk meter is broken. He doesn't have bills to pay. So why would he be concerned about losing the 50 bucks that he had? You know what I mean?

And so I think part of this is just him experiencing a little bit of pain and that's hard to do as a parent. Of course you don't wanna see your kid experience pain or do something stupid, but as long as he's not leveraging money and borrowing a bunch of money, if he's just using his own fun money, and this is what he wants to do, you know, it might be a good financial sort of learning

to go, all right, I'm learning about how investments work, I'm learning about the risks of day trading, and eventually, hopefully he goes, been there, done that, I'm learning about how investments work. I'm learning about the risks of day trading. And eventually, hopefully he goes, been there, done that. I'm going to invest in something a little more proven, a little less volatile. That's my take. Rachel. Yeah. I mean, there's only so much, I think, Ray, at this point, you know, you can tell him

all that you can, right? And then he's either going to have to choose to listen or not, because the truth is, too, he's about to be 18, so he's going to be off on his own. So for the fact of you trying to like- You can take away his phone and say, I pay the phone bill and you're not gonna get on these apps. But I think that's only going to cause him to want to- Yeah, and I think that's not gonna like give him the tools

in life that he's gonna need here in a few months when he goes off on his own. So, so yeah, I think it's, you know, showing him the facts and then running even like if you go to ramsesolutions.com and our investment calculator and just say, hey, instead of day trading this money, what if you just put it in a mutual funds at a pretty much a guarantee rate of return of 10, 11%.

And over the course of years, you gotta just like kind of let it go, but what it'll grow to. So there's ways to build wealth that are pretty guaranteed. But that involves patience and delayed gratification, which is something no 17 year old has. Yeah, I was gonna say this kind of, this is exactly what I think they prey on people

that love quick results, high risk. And some people are just wired that way. I mean, they really are. And so it does take a level of maturity and discipline to say, you know what, if I'm gonna build wealth the right way, that's gonna sustain me long-term, it's not these risky type of investments. And so, yeah, I think he may just kind of have to

learn that, right? I hate to say it. But- You can play some calls from the Ramsey Show. We've taken them where people lost 30,000, 150,000, even $300,000 day trading. And you know, and with him, I'm not a mom of teenagers. My oldest is 10.

So you are way on the further train of this, Ray, than I am as a parent. But it is funny, even my kids, you know, you see parts of them and their personality, which if directed the right way is wonderful. So like his tenacity and his, the thought that he even wants to like make money doing something.

We took a call of someone who's 31 years old and still in school trying to get their bachelor's degree 10 years later. And you're like, oh my God, will you please get a job? Like, and his curiosity actually bodes well for him. If it's directed in the right way, the negative way, which I probably would tell him, is you need to have a lot of caution around this because this is the same type of mentality that gets into gambling. You know, I mean?

It gets, it can get into a lot because you can get in over your head really, really fast thinking, oh, just another hundred bucks and I promise I can remake it, right? It's that feeling. And then the sudden cost fallacy of, well, I'm really far down and I need to get back up.

Yes, yes. So that's the negative side of all of this that I would as a parent probably just say, this is what I see. And this can be directed in a really healthy, amazing way. We just need to direct it the right way. Direct it toward, hey, let's open you a Roth IRA and get you working and throw some income in there.

Yeah. And that can be a healthy way to channel this energy of him wanting to learn and grow and build wealth without losing his hard-earned money. Well, you know what? I mean, honestly, right? Even a high-yield savings, something that maybe he can get to, you know, Roth isn't a bad idea by any means, but you can't touch that till you're 59 and a half,

but maybe something that he can like see a little bit of growth. Tangible. I don't know, yeah. That he can kind of play with, I think is great. But again, it's low risk. It's not great reward because usually low risk is longer periods of time of patience.

So you're not gonna get this quick hit of stuff. But I don't know. Think about what apps are designed to do. They're designed to get you to open them back up. And so that's what Cash App is doing. They're just like Robinhood and M1 and all these flashy apps. They're getting young people to try to

have a little notification that says, hey, come back and make a trade. You can make some serious money. Hey, we'll give you a little discount. We'll give you a free trade. And all of that is enticing young people to make really risky financial decisions under the guise of entertainment.

Right, right. That's the scariest part. So Ray, I'm gonna send you a copy of my book, Breaking Free from Broke, to give to him. And if he'd prefer the audio book, let our team know we can get that to him. And just have him read the investment traps chapter and have a conversation about it. You don't need to be heavy handed here.. Just say hey, would you read this and let me know what you think?

Yeah, he might say this guy's an idiot. I know what I'm doing and I've listen He wouldn't be the first one. That's that George camel. That's a Tuesday for me He doesn't know what he's talking about But I'm just not interested in losing money at the stage of my life And I think you kind of need responsibility and bills to feel that a little more. Right, yes. Versus being under mom and dad's roof. I was spending every dollar I made

when I lived with my parents. Oh, sure, yes, yeah, yeah, yeah. And I wasn't as smart as her son. That's right. I don't like that. It's fine music, you know. I know, and I think that's it too. I mean, I even remember me as a kid, mom and dad,

that is one place that they did well. They let us make mistakes with money. I mean, and by that meaning like spending on stupid stuff. I think they- Not going into crippling debt, but just- No, gosh, no, no. And they were never- Like helicopter controlling-

Overly controlling parents with that. I mean, they really did. And then, I mean, I was the one that always spent everything. It'd be like the 18th of the month. And I was like, hi, I need some more money for the rest of the month. And they were like, well, that's what your job is for. Go make some money, Rachel.

But you just kind of learned, it's like a trial and error, especially your teenage years, you know? And I think that's a gift to give our kids. I do think one of the mistakes with parenting recently is they are such either helicopter parents controlling every move or the snowplow parenting. Or they smooth it out. Smooth it out so that there's no bumps in the road.

You have no hardship. You don't feel any pain. Life is easy and beautiful. And that's what I want as a parent for you. And that is damaging too. So it is a hard balance, but Ray, he sounds like he has some good tenacity, so we'll just channel it, channel it the right way,

and he'll be great. That's right. The growth of The Ramsey Show has been incredible over the last really two years on podcast and YouTube and of course those of you listening live on the radio. And so we appreciate that so much because so much of that growth comes from you guys sharing the show with friends, with family. So keep that up for us because we want to continue to grow this show so that people learn how to handle their money.

Money is one of the most stressful parts of people's lives. So if you can have a solution and some instruction and guidance around this, that's why we do this show is for people to learn and understand how much their behavior change causes them to win, but also the head knowledge of what to actually do. And so we want that hope for so many people out there and even more that are that are just listening today. So make sure to share if there's a great clip or an episode that you love. Make sure to share it with a friend. Also leave a review hit subscribe to because that helps us as well. So we really appreciate your support you guys.

We we are here for y'all. So thanks so much for listening and watching. All right, let's go to Kwan in Tallahassee, Florida. Hey, welcome to the show. Hello. Hey, good afternoon. I'm so glad I made it on the line with you guys. Oh, I'm so glad you called. How are you? I'm doing well.

44. I am in the process of getting a divorce. I have three boys, put your seatbelt on. I'm sorry. And, um, no, it's all good. It's a happy occasion. Um, I need all hands on deck though. I am in a lot of debt, um, about in a lot of debt about in total about $38,000 and consumer debt 74,000 student loan debt we have our marital home that's got a mortgage on it and a $250,000

mortgage remaining and it's about worth about 405 if you sell it. We have a pre-marital home a townhouse that we had rented it is got a $104,000 $104,000 mortgage on it and their market value about $257. And we also have a P lock on the Merrill home $24,000. So there are a few curve balls here though. Both mortgages, my name is on both mortgages. Our names are on both seats. Another curve ball is we just had mold in that townhouse in the rental. Oh shoot. So the tenants have vacated and I and the Florida insurance company has refused to pay for the mold so I am paying for that now. So I am paying for that now. Um, so I had to pay for mold remediation at the hand.

I'll be doing that until January, 2026 monthly. They worked with me, but wow, this is loaded. Yeah. Um, I left my narrow home January 1st and I got an apartment or a rental, $18.25 a month with me and my three boys. My husband is refusing to sell the marital home which would give us money in our pocket. Who's going to live there? He has been saying he wants to stay there. So he's going to take over the mortgage? He's going to refinance it into his name solely?

Yeah. No, we went through all of that. He can't. He does not have a portable. Then he can't keep this house? Yes. So he's saying, no, I'm not going to sell it. And yes, you're going to stay in the mortgage even after we're divorced?

That's insane. It is insane. You're going to need a judge to tell him he can't do that. Yeah. Have you guys gone through the divorce process already? No. Okay. We're in it.

We're about to go to mediation next month. Okay. And so yes, I told my attorney to please rush the sale of that house because another curve ball, um, my first mortgage company or whatever, what a part of the service there. They anyway, it's headed to foreclosure. And so the company that has taken over the mortgage now within the

past month or so, they have offered a loan modification agreement. And as long as he pays, uh, what's it? 24 16 monthly for the next three months, then they'll be able to draw up a real modification agreement. And he's saying, Oh, I can do it. I can do it, I can do it. Well the problem is his income is inconsistent or sketchy, that he is a food truck operator and owner. What's your income?

Mine, I'm netting about $8,100 a month. Great. Or, yeah, so it's good. You know, but I just haven't been able to enjoy the fruits of mine. Right, right. There's been a lot of stress and yep. In quite a long time.

Yep. Well, I do wonder, once this goes to court, the divorce, I mean, they're gonna have to split your assets. And so the house, yeah, I mean, there's gonna, it's gonna have to come down to either him paying you the remaining amounts. He's gonna have to split your assets. And so the house, yeah, I mean, there's gonna, it's gonna have to come down to either him paying you the remaining amounts. He's gonna have to buy you out. Yeah, he'll buy you out,

but I don't think he has the money to do that. Which will then force the sale. It's gonna force the sale of the home. Yeah, so I do wonder your- No, he's tax compliant, so that's another curve ball. What was that? He's not tax compliant? Right, for the last three years.

That's a nice way to say he hasn't been paying his taxes? Correct. Okay, how much does he owe an IRS debt? I'm not really sure when I left. And is this your debt too? No. So you guys weren't filing jointly? We were going to, but we didn't.

We had delayed the taxes. And so now when I left, I did go ahead and do my taxes on my own and I filed separately. Okay. Okay. Whew. Man. A lot going on here. Yeah.

I can tell you what I would do in your shoes, Kwan. I would sell both properties at all costs. I have one more caveat. Okay. One more. Okay, so the tenants are out. Good. The mold is gone.

The room is messed up. The room in the bathroom, they have, you know, it's good. And I have already sent a letter to my, um, apartments. I'm breaking my lease. Um, I'm thinking it's best to move back into that townhouse. So I don't have this 18, 25 a month rental to pay for. Also, I don't have a functioning car. Um, I wrote out my 2004 Honda Accord until it just quit on me and now I'm renting

a vehicle for my aunt for 190 a month. It's doing its job for the moment but I do need a vehicle. Okay. Okay. Well the four walls, if we look at just the basics for you, is food, shelter, utilities, transportation. So we need these four just to get you some stability. So the home, yeah, I would probably move back into the condo that you own. So you're, you know, I mean, that's great. If you want to do that. What's the payment on that?

15, 15, 15.80 a month. And you're paying what right now? Right now I'm 18..25 and a rental. So it's cheaper. Okay. A little cheaper, but what if you just sold that rental? You could net $135 grand off of that. Well, his name's on the deed. Okay, but we're gonna force the sale of that in the divorce because he can't afford that.

Yeah, so both these properties, Colin, would need to sell, is what George is saying. That's going to simplify your life. You're going to net about 270 grand if you sell both of these properties, which will clean up your debt and still give you 130 grand on the other side. But it's split in half, right? He'll take half of that. Yeah, whatever the court decides is equitable here, because if it's a premmarital asset, I don't know how they're gonna view the rental. Mm-hmm But if his name is on the deed that will change things. So again, I'm not your lawyer I would work with them to figure out how this is all gonna go down

But until then it's just a lot of speculation and gyrations So to Rachel's point focus on stability right now those four walls, and try to just liquidate everything you can to get to some stability and get rid of this debt. Yeah, and Gwen, if you hold on the line, Emily's gonna pick up, and we'll get you a financial coach for free on us, just to walk through, hopefully, the early parts of this,

you know, divorce settlement, to be able to get you in the place that you need to get. So Emily or Kelly are gonna pick up, and we'll help get you connected to a financial coach. I'm so sorry you're going through this, Gwen. Well, one of the ups and downs of the financial world, George, in the past recent years has been the housing market. Yep. Man, it's been the elephant in been- It's the elephant in the room.

I should say ups and downs. It's kind of just been up, I guess. Just been like a stagnant scummy pond of just like make something happen. Let's see some movement here. It's so hard, I know. So an article from USA Today came out and it says, is it finally a buyer's market?

What to know about home prices outlook? Here we go. Prices surged during the pandemic up roughly 50% over the last five years and mortgage rates hit rock bottom. Americans reconsidered where they wanted to live during that time. Well, all these gains have had consequences. Homeowners are sitting on record levels of home equity,

but it's increasingly challenging for buyers, especially the first time home buyers, to break into the market. But now prices, as they say, are falling back to earth and may continue to do so. So this is not a crash, but we're sort of getting back to reality instead of the inflated prices that we've seen.

So the Mortgage Bankers Association expects prices to rise only 1.3% in 2025, and Fannie Mae Economist forecast a 4% price gain. So it's worth noting many analysts have predicted a similar trend in the past only to see a sharp imbalance between demand and available supply, keeping prices elevated. So I think that's kind of what's been happening is people are now just, they're like, all right, fine.

We're ready to list our house. And so the market does have more supply than it used to. But there's not quite demand meeting it, which would cause prices to fall. That's right. Well, realtor.com, their data shows that in April, there were 959,251 listings that were active, and that is 30% higher than April of last year.

So 30% more houses sitting on the market, which again, for buyers out there, that means you actually can negotiate. Cause for a while, I know at least in our area, George, people were bidding to buy a house. Like they were one of 20 people sitting there being like, we all want this house, who's gonna take the highest offer.

And now there is- And you just got to sit back and watch all these offers roll in. And now you're like, will someone maybe wanna look at our house in the next week? Yeah, that's right. Anyone wanna make an offer?

So what's happening is you list the house and then a month in you go, all right, we gotta lower the price by $10,000, $20,000 until finally you have a buyer. And so they're saying it's too soon to call this a buyer's market and experts like HEP caution that the national housing market is in fact increasingly local,

which is a great reminder of, well, this happened in my town. Well, your town might be a real hot area where this is happening, and some towns may not be experiencing this at all. So it's hard to say across the board, it's a buyer's market. But, realtor.com data.

Yeah, they're only rising, again, 1.3%, where in past years it's been 4.3%. So. Yeah. There's railtor.com data showing that more sellers are making price cuts, which is a signal that we're heading towards a buyer's market. There you go. Well, if you are looking to buy or sell a home,

make sure to check out one of our Ramsey Trusted Pros because they can help you when it comes to buying and selling because all of that's a really big deal. And there's a lot of clickbait headlines out there and confusing data. And so again, we're seeing though, it's interesting, the median home prices went up slightly last month to $430,000.

That's the median price of a home. So right in the middle, smallest to largest in the list. In America, that's right. So if you wanna know more about the housing market trends and to even get connected with an agent and some other free tools around real estate, go to ramsysolutions.com slash market.

And we have tons of information there for you because again, buying and selling a home, it's one of the largest purchases or sells that you make in your life. And so making sure that you do that well with a lot of knowledge. So speaking of homes, we're gonna go to Nick in Champaign, Illinois.

Hi Nick, welcome to the show. Thank you so much for taking my call. Yes, absolutely. How can we help? So here's my situation and my question. I wanna know if I should buy a house in Williamson County, Tennessee. The background is I, um, currently own a home that's worth about $500,000.

I owe $90,000 still on it. I have $60,000 in the bank that I could put towards that if I wanted to. My salary is $292,000 a year. And that's all the debt that I have. So I'm currently on baby step number six, number six. However, I'm wanting to get out of Illinois and move to a better state. And I'm considering Williamson County where I've had a job offer as a physician, but in my wife and I's research, we found that these houses are extremely expensive. Many of them 950,000 to 1.1 million.

And I don't know what to do. Would that be a silly idea to take out a mortgage for $450,000 or $500,000 to move to a better location? Well, let's see with the... George, you have... I got the calculator pulled up. So you've got a $500,000 home, you owe 90 on it. So you could roll all the proceeds into the new home, which would likely be, let's say after fees, like $375, is that fair? Yes, sir. And you also have $60,000 in the bank. Plus your 60, that's $435 down.

And let's say the home is $935, is that fair? Yes, sir. That would give you a $500,000 mortgage on a 15-year fixed rate with the current interest rate. You're looking at about a $5,000 mortgage? Yes. And how much do you bring home a month? After taxes right now, I bring home $14,000 a month.

Would your income go up when you move or it would be the same? It would stay about the same. I would make less, but with you guys having a better tax situation, it would be about a break even. Or a lack of income tax. That's what's up in Tennessee. Yeah. I mean, we are in for the record for everyone listening, we are in Williamson County, the Ramsey Solutions headquarters. So we know this area well, and it's about a million dollars is the average home price right now, which is a lot. People think, well, it's Tennessee. I'm sure they just got double wides over there. No, no, no. This is one of the wealthiest counties in the nation and we think we're worth

that. So can you make this move? I mean, 14 grand, let's see the mortgage. I'm, I'm spitting out here is about 4750. And so with our rule of 25% of take home now is that after tax, but before other deductions like healthcare, 401k, all of that. That is after all of that. I, I,, 401k, all of that? That is after all of that. After 401k, after insurance, everything, I get $14,000 a month. This will help your numbers.

So when we say after taxed, a quarter of your take home pay, what we're really saying is just after tax, but before other deductions. So put back in your 401k contribution, put back in the healthcare contribution, that should help your numbers. That would essentially make your take home, your after tax income, probably more like 16,000.

Okay, yes sir. So then you take a quarter of that. Well, now we're looking at $4,000 mortgage. Yeah. And so, and the 25% rule, it's just a parameter. Nick, it's not like a, well, I'm at 26%, so Ramsey said no. The idea here is you don't want too much of your income tied up in that mortgage to where you can't accomplish

the rest of the baby steps. Yeah, but you're right there. I mean, you're right, yeah. I would say you're real close to making this happen. Yeah, I think you could. And especially if your income does go up over time in the next year, two years, three years, just a natural raise, then for sure it's sure, it'll give you even more cushion.

But yeah, I mean, if you're trying to hit around a $4,000 mortgage would be ideal for your situation. What would the mortgage be, did you say? About 4,700 bucks. Okay, yeah. And that's on a 15-year fixed rate, which is gonna put you in a really strong position. And so if I was your financial coach,

I'd say, let's start home shopping, probably in the $900,000 range and continue saving. How urgent or imminent is this move? Well, it has to be done pretty soon. I've got four kids, which were funding their college. And I want them to, if we move, I wanna do it by school year. So August-ish.

Okay. I love it. Yeah, I think you're good, Nick. Yeah, around a $900,000 house is fine. So if I just, just to clarify guys, if my mortgage was around $4,000 or so, you guys think that that's financially responsible still? Yes. 100%. 100%.

Okay. Yeah. Thank you so much. I really appreciate your expertise. Oh, absolutely, Nick. And if you want to reach out to a great real estate pro, you can do that at ramsaysolutions.com for the folks that we trust.

And good luck on the home search. I think right now is actually, like we just talked about, Nick, it's a good time to buy because you could probably get a deal, quote unquote, where if the listing is 9.50, if you offered 9.20, they'd probably take it right now. And so you can actually do some great home shopping

and that Real Estate Pro will help you figure out the right strategy to make that offer. And I'm really confident in these numbers, Nick, because we say it a lot around here, but it's just true. Like our formula to buy a home is on the very conservative end on how most people, most people would be comfortable with 35% of their, you know, 35, 40, yeah, 35, 40% of their take home pay go into their mortgage on a 30 year.

So this is a 15 year at 25%. So it's pretty conservative and you're fitting right in those numbers. So yeah, so you guys will be good and hope you come to Williamson County, Nick. Party. George and I will say hey to you. I love that. Come hang out at the Ramsey Solutions. I could use a primary care physician, Nick, if you're offering.

Oh, that's right. It's perfect. Actually, we have some shortage of those. Ken Coleman doesn't have one either, George. Uh-oh. We're both on the hunt. If you're wondering if you're staying on track with the Baby Steps as we talk about this whole plan

here on the show with callers, you could take a quick quiz just to check your progress and receive a personalized plan that's just for you. Just go and click the show notes and click the link titled, Are You On Track With The Baby Steps? You can do a quick quiz just to see where you are. All right, let's go to Lane in Palm Beach, Florida.

Hi, Lane, welcome to the show. Thank Palm Beach, Florida. Hi, Lane. Welcome to the show. Well, thank you for having me. How are you all doing? We are doing great. How can we help? Okay. Complicated question. I've been basically living without a budget for my last, you know, my whole adult life. And I've had the ability to make it all happen just because I've worked like a crazy man. But the problem that I'm having now is I have four daughters and they don't want to work like I do.

You know, they want to enjoy their lives. They want to have a little balance and they want to know where their money is, you know, how it can work for them, what it can do. How can I help them? Okay. Are you, how it can work for them, what it can do. Okay. How can I help them? Okay, are you, how old are your daughters? The oldest is 24 and the youngest is 15. Okay. Are they coming to you for financial wisdom?

They don't come to me for anything other than financial help. Ah, there we go. It's just bank of lane is what they're coming to you for. You know, those girls, we can be expensive, you know? Yeah, okay. So they're not asking to be taught. They're just asking for a handout essentially,

which is how I would be if I was a teenager too. Sure. Correct, so how can I trick them and give them a little bit of help? Do I have to watch them fail? No, I mean, there's a lot of things you can do to get them excited about financial literacy. I think the best way is to listen to them. What are their goals?

What are their dreams? And then, alongside that, hey, what's the reality of what those goals and dreams are going to cost? Well, let's figure out a plan to help them get there. Now they're excited about their own life instead of just dad going, back in my day, we worked 70 hours a week uphill both ways. That's kind of what they hear when you're doling out financial advice. So instead be interested in their life

and then find out what they're really after. Why do they want this money? What are their money goals for the 15 year old that might be just buying a car? For the 24 year old, it's, hey, I gotta get an apartment of my own. And so they all have different stages of life they're in and I would try to hone in on that. Yeah, what's a 24 year old that's, hey, I got to get an apartment of my own. And so they all have different stages of life they're in and I would try to hone in on that. Yeah, what's a 24 year old doing, Lane?

Is she working or what is she doing? They're all, they're all working, which is very good. Luckily, they have good discipline like that. But the problem is, is, you know, one moved up north. So I had to basically help her move because she didn't have the $4,000 to move. So I basically, you know, took a week off of work and helped her move and They've all received a car except the one she has not received the car But unfortunately, I think I kind of spoiled them, you know

I gave them each like a 25 to 30 thousand dollar car that was paid out right for them. Yeah. Wow Yeah, I think I kind of screwed that up No, you didn't. I would drop the shame. You're you're an amazing dad. I think any girl would be lucky to have you as a dad. Yeah. And I think it's just you raise great girls. Yeah. Going especially to the older ones, not as much maybe the 15 year old,

but the 24 year old or so and just be like, I don't know, I have a conversation with her and just say, I'm so sorry. Like I have realized now that I have not taught you guys anything when it comes to money and personal finance. And I want to be able to help you because knowledge is what's going to take you the furthest in life. And I want to be able to do that. Do you, do you have any ideas or any questions for me on how we can do that? You know, and kind of start that conversation with her. And then even lane, if you want to give her, we can give you some stuff at the end of this call, you know, some books, if you think she would read or listen to like an audio book

or a financial piece university or every dollar, our budgeting app, you know, some tools to kind of start integrating in their lives and maybe as a gift from you to them, especially the older ones, you know, giving them some of that. Because sometimes too, Lane, youane, we find with adult kids that having a third party speak into their life with money is easier. So like maybe if she listens to the Ramsey show or Smart Money Happy Hour.

The other podcast. Rachel's like the cool older sister on Smart Money Happy Hour. They go, wow, I wanna be like Rachel one day. Well, Rachel budgets. So maybe I should try that out. But you know, having- I have tried that. I have tried that.

I've tried that technique. Okay. It worked for one, but the other one, you know, when I purchased her a car, and three years later she wants a new car, and I'm going like, well, let's think about this. You know, there's better ways, you're buying a depreciating asset,

why don't you think about saving when you guys want to purchase a house? Because they've seen me purchase houses and they've seen me work to get to that point. And I've even told them, it's like principal reduction is your friend, compound interest is your enemy. It's like trying not to have the credit cards, but yet I'm the one that rings 10,000 a month on credit cards, even though I pay them, you know, it's like I'm not listening to what you guys are saying either.

Right. So you're not living it out either, right? Is what you're saying. No, I'm not living it. Hence you wanting to start budgeting. Yeah. Because, I mean, you basically said you've out earned your stupidity for your entire adult life.

And you're just unable to work really hard and go, well, I'll be able to make all the bills. But you're wanting to be financially responsible, not just for your daughters, because we know more is caught than taught, but for your own financial future. Yes, sir. Yes, sir. What if you guys, how many are living with you?

Just one. You know, they've all moved out on their own. Okay. Which is, I mean, that's all I could hope. So the youngest one you have the most influence on right now because they're under your roof. The other ones, how often do you see them? Is it a phone call here, a FaceTime there, a holiday?

Three were local, but now one moved up to Maryland. So it's, and plus I don't think that they respect what I did, they just thought that that was my job and I was supposed to do it Yeah, well, I mean a job as a parent is to take care of them at the extent that you took care of them was a Very nice extent. So you want them to be grateful to be like, oh my gosh, I got you like too good care of them Yeah, that's right. Yeah, so like I need a new car. Mine's bad now. It's like an iPhone, you know I think three years. Yeah, and I think for the older ones, Lane, there's a lot of having to learn

just in the real world, right? If they're not choosing to make right decisions right now, you can't force that. You can't control that, especially with the older ones that are out of the house. And so again, I think a conversation is totally doable of just saying, here's what you're saying. You're trying to create better habits in your own life but it's hard and you know telling them

yeah I get it it is hard because you know Lane you're even struggling with it right we all do to an extent like it you know this money stuff it's not always easy but I do think for them they're gonna have to start to learn from their mistakes you asked that at the very beginning of the call and now that I know kind of the situation more, yeah, there may be a case where they do learn and that's hard. And you don't, as a parent,

you don't want to see your kids suffer or struggle, but sometimes it's one of the best gifts. And if they can do that at 24 versus 44, when you finally let go or something, right? Like that's it, that's good. That's a great thing. And that's where you're leading with humility is the key here.

It's not you saying, hey, I wanna teach you guys some things cause I've done it all right. It's you saying, hey, I've screwed up and I tried to give you guys a good life. Here's where I went wrong. I would love for you guys to avoid those mistakes so that you can leapfrog me

and get to this point way ahead of me. What if we got a plan to do that? And maybe that's you guys reading a book together, an audio book, a family Zoom call. I don't know what the vibe of your family is. Figure out what works for you. Maybe you incentivize it and say, hey, I'm gonna give you guys a hundred bucks

if you read Rachel's book. But she's 24. But she's 24. They're grown adults. So this is not like a cutesy thing. You have to be like a friend now versus the parent. That's what I'm saying is I'm like, I think you have the conversation,

but then I think the adults have to be adults too, right? I mean, there's a lot of people that listen to this show and their parents were horrible with money and never taught them about money, but they've had to figure it out too, right? Sometimes that's the best motivation is to do the opposite of what your parents did. And clearly you're, I mean, you've done really well, Lane.

You're not this like just basket case of financial ruin where they're like, oh my gosh, my dad was terrible with money. He was able to buy us cars and help us fund moves and college and all kinds of things. So I don't think it's as bad as you think, but I do think your approach needs to change to a friend versus a chaperone.

Okay, and because I've never budgeted myself because I get paid, so it's a very odd thing. I work as a electrical contractor. I get paid maybe it's a very odd thing. I work as a electrical contractor. I get paid maybe five times a year, but they're big jobs. So I never know when the money's coming in. So I have to have basically a year. You need kind of a peaks and valleys fund

to where you set aside the money knowing you need that to cover the next three months. Correct. Yes. And we're gonna give to you every dollar premium as our gift so that we can actually walk with you in the budgeting and I'll also send you my book Breaking Free from Broke. I have a whole chapter called Budgeting is Freedom where I walk with you through it, give you my best tips.

I think those things paired together will help you get on the plan and maybe your girls will be inspired and go, oh my gosh, look at Dad. Look at him. Yeah, and just know that budgeting, it takes about three months to get it right. So give yourself some grace, get through the summer, try budgeting through the summer. Don't give up if the first budget doesn't work.

But hold the line, Kelly will pick up and we'll get that gift to you. Live from Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour of the show with my friend and bestselling author, George Campbell, and we also host the Smart Money Happy Hour

each week together as well, so you can check that out on the Ramsey Network. I'm biased, but I think it's a pretty good show. It is. We have fun. Rachel brings out the best of me, and I think it's a pretty good show. It is. We have fun. Rachel brings out the best of me and I bring out the worst in her and that makes it entertaining. A lot of laughs, a lot of laughs. But you can give us a call here on this show at 888-825-5225 and we'd love to answer your questions about your life, your money and relationships and career.

All right, up first we have Brian in Birmingham. Hi Brian, welcome to the show. Hey, thanks for having me. Absolutely, how can we help? Yeah, I was just calling, me and my wife just found out that we're eight weeks pregnant. Oh, congratulations. Thank you, thank you.

And we started the process with trying to become debt free. We're doing the debt snowball. Great. And with the due date of right around Christmas, my wife's going to have like two months of not working right after that because she's part time working and full time student at the moment and we have about $20,000 in debt outside of our house. How much? $20,000 did you say?

Yeah just a little under $20,000. Okay perfect. And we are just wanting to I'm just trying to figure out what's the best process and plan for preparing to be parents. Yeah. Well, how much do you make a year? So our household income is about 115 to 125. Oh, that's great. Okay, perfect. And is your wife going to continue to work part time and go to school come the new year after the baby's born and everything, or will she slow one of those down?

So currently that is the plan to do both school and work part-time. Okay, that's great. She's just gonna cut back some hours. Okay, yeah, that's great. Well, whenever we're expecting, we're, I guess we are not, I hope I'm not, but you are expecting a baby,

we always say to go into stork mode is what we call it. And so that just simply means that you're gonna pause the baby steps and pile up cash. So instead of working to pay this off, just I want you to act like you're gonna be paying off the debt, have that same level of intensity, but you're gonna just be putting it in a fund. You can just open up a high yield savings account

or something like that and just keeping everything in there. And then once baby comes home, mom comes home from the hospital, everyone's good in December, press play. And hopefully by then you'll definitely have $20,000 saved. And then you guys can become completely debt-free come December 26th, 2025 or whatever it is. Do you guys have anything saved now? So we just have a little over a thousand dollars

in an emergency fund. Perfect. That's great. Okay. Yeah, you guys can definitely, I mean with that amazing income through the end of the year, you'll have more than 20,000 saved, right? How much could you save? How much do you guys bring home a month? So bring home is right around about five to six. That feels awfully low. That's like a 50% tax rate plus deductions there. Are you guys doing any investing right now? So currently it's just like $75 a month in an IRA.

Okay, I would pause all investing so that every single free dollar can go towards this stork mode and even after that all the money going towards the debt. And so there's a time and a place for investing and it's once you're debt free with a fully funded emergency fund. And so I would continue just to save, pause all investing, create as much margin as possible every month so that you can get through this as fast as possible. But to George's point, Brian,

I wanna make sure to look at that, what you bring home, that you're not getting this massive tax bill or something because you should, you guys should be bringing home closer to 8,000. Yeah, maybe seven to eight would be more accurate. Yeah, so just double check on that, but maybe that is because of some of the investing you guys are doing.

But if you guys were- And it could be because of overtime hours, so it fluctuates, so that could be where my math is off. Oh, okay, okay, that's great. Are you guys doing a monthly budget right now? We just started. Okay, I think that'll help. How much would you say, Brian, out of just

like after you take out mortgage, electricity, bills, cell phone, like food, some of your basics, how much margin do you think you guys have per month? I would say it was at least a thousand if not fifteen hundred. Okay. So what I would do, I would do, I would probably try to make it a goal just to kind of stretch you guys to see if you can cut anything else. And then you mentioned overtime and just doing some overtime because the most, if you guys can do a lot here in the next, what is that six months,

by the end of the year, if you guys can do a ton of stuff and probably more you Brian, cause once she hits third trimester, she's probably going to be exhausted. So, but, but if you guys can put in the work now, I'm telling you you Brian, because once she hits third trimester, she's probably gonna be exhausted. So, but if you guys can put in the work now, I'm telling you Brian, it's gonna be so much easier than you trying to do overtime with a little baby at home that you wanna go and see, right? So like whatever you can do now to earn extra money,

so make it a goal to try to bring home 2,000, 2,500 a month. And then that's gonna get you guys to this 20, I mean, you're gonna be able to chip down a lot, which would be fantastic. I would set that kind of BHAG, big hairy audacious goal, that's about 3,300 bucks a month for six months, would get you to 20 grand, which would mean fully paying off your debt once baby and mom are home safe,

barring any emergencies we need to cover. And so that would be my personal goal. I'm gonna work like a madman until then. Yes, and cut everything. Because once baby and mom are home safe, barring any emergencies we need to cover. And so that would be my personal goal. I'm gonna work like a madman until then. Because once baby's here, you need to be there for mom and be around. And so I'd rather you make sacrifices now than later. And think Brian too, like you guys sit down and look at the budget, look at your expenses

from the past couple of months and say, okay, our grocery bill was this, could we cut it by $200 by shopping at Aldi, right? And having inexpensive groceries. Could we cut every subscription? What if we don't go out to eat? Let's add up how much we spent on restaurants last month. If we didn't go out to eat, how much would that save?

You can really start adding some of these numbers up. And that's honestly from a lifestyle perspective, when we hear people that become debt-free, when they cut those expenses, I heard someone say this, they're like, we just saw that as the hours I don't have to work. Like, you know what I mean? Where it's like, okay, that equals.

The trade less time for that. Yes, so that we're gonna cut that and then we're gonna add extra work just to add some fuel to that fire. But to do this, so I, yeah, I think it's exciting. And again, you're not paying on the debt. I want this all to go to a big fund. Just make minimum payments.

Yes. What kind of debt is it? I'm just curious. It's cars and one medical. Okay, what's left on the car loans and what are they worth? So my car has about 7,000 left and it's worth 12. And then hers has about 14,000 left and it's worth about 18.

Ah ha. So you got about- Oh, interesting. So you could, if you sold both cars, you could net five on yours and four on hers. Now I'm not saying you should do that, that your cars are not the major issue here, but if you really wanted to speed this up,

maybe you sell your car and buy a $5,000 car in cash, which could cut your debt pay off time. Yeah, that's so true. By months and months and months. Yeah, because think about it. If you sold yours for 12 and you owe seven, you could just go buy a car for the difference. Yeah.

And that takes you guys down to 13,000 in debt. It's not gonna be pretty. And then pay that off. And then you just need 2,000 a month to pay that off by December. I don't know, there's something, it's those things that you guys can talk through. You're gonna have to sacrifice on one side or another, but I would rather sacrifice

and drive a beater car for a few months. Amen. I would too. Then have to work overtime for the next six. Yeah, and then just have a plan to upgrade after baby comes and all is good. But there's some ways you guys can do this, but I really think you can get to these numbers, Brian.

We believe in you. And a plan is gonna give you guys something to shoot for, which is really unifying. And in those sleepless nights, you can be looking for a new car, you know? I love it. Go car shopping. Up next, we have Kevin in New Haven, Connecticut. Hi, Kevin.

Welcome to the show. Hey, Rachel. Hey, George. Thanks for taking my call. Absolutely. How can we help? My daughter is planning to go to college next year. We read that free degree together and we planned as a family to cash flow her going to college

with two options, community college, which is free in Connecticut for two years, and then transfer to a school of her liking, or a four-year state school. Both these options include living at home and commuting. After being accepted as a four-year state school, I thought we were ready to go, and my daughter informed me that she was waiting for another application at another four-year school that she can live at. We're not aware of this and considering this option, it costs 20,000 plus more dollars a year for room and board.

We can't afford this. We discussed it and I asked her how she would pay the difference. Sadly, she said she would take out loans. I've been a rambly guy for over four years now. Loans are an option in my opinion and explained her that this would be a mistake and I don't support that option. What can I do to make her stop from making this bad decision? Gosh, Kevin.

That's right. And she'll go around the Parent plus loan. Will she just apply for it on her own or is she going to need your signature? Well, I won't sign anything as far as a parent plus loan. You're my ex-wife. So that much we have covered. Otherwise, I don't know how she'll get loans. I guess I'm not really versed in the background and how I guess I'm not really versed in the background and how individuals, especially 17 year olds, get student loans. Yeah, I mean, they usually want an adult

to be a co-signer on it. I don't know all the options, George, if it's a pretty common thing, but majority of them, I know, end up being more of the parent plus route. So she may not even qualify for anything if you're not willing, if someone's not willing to co-sign it, there's a good chance

she won't even be accepted, they won't even accept it. I don't know, George, what do you see? Well, I'm just wondering, have you got to the bottom of this of why she applied to this other school without your knowledge and what is the heart behind fleeing home and going, I wanna get out, and just trying to get to what she's actually, what her emotions are right now,

instead of just going, we said we're not doing it with student loans, and you know, I don't think that's gonna help anything at this point, because she's, you know, heading into adulthood, she can make her own decisions, unfortunately, and sign up for as much debt as she wants. So I think getting to the emotion underneath it, and then showing her the reality of the situation,

and setting that boundary, and saying, we told you, we're not signing for any debt, and then showing her the reality of the situation and setting that boundary and saying, we told you we're not signing for any debt, and here's what's gonna happen if you do take out this debt. Here's what your adult future is gonna look like, and you're welcome to do that. You're an adult, we can't stop you, but this is going to really harm your financial future. And she already read the book.

Yeah, she knows. She knows. Yeah, she knows. You hit it on the head when you use the word feelings She went and visited a friend on a way college we know we and they had nice landscaping and a Beautiful pool and water slides and a Michelin star cafeteria She had so much fun hanging out, you know

So to your point, no, I definitely am not gonna sign any loans. I have gone through with her the steps of what it would cost, the cost. I actually said to her, I said, how would you feel if somebody robbed 60 or $80,000 from you? And she goes, I wouldn't like that. I said, well, it's gonna happen if you go to school.

What is she planning on studying? What's the end goal of this other than a cool experience? She wants to be a teacher. Okay does she know what teachers make? Has she googled? She has yes. Okay so she's planning on paying back at least $80,000 of student loans making $38,000 a year. Yeah, I think, I don't think she's absolutely comprehended the gravity of that money. Yeah, I don't think she knows the reality of it. I know I didn't when I took out student loans.

I wasn't thinking about that. But I wish someone had just shown me the reality with love and truth of here's what your life's gonna look like as a teacher, as your stated goal. So the goal for me would be, how do I do this as affordably as possible so that I can maximize adulthood on the other side?

And she's social, she wants a life and she wants to have fun. That's what you said caused her in the first place to look at this one college, because she had so much fun. So I do wonder what other options are in state or even what that community college looks like. Because I guess she what other options are in state or even what that community college looks like because I guess she'll be living at home though right is what you're saying Kevin. Yeah she'll be living with me. I actually

have the four-year state school is manageable. We have the 529 and like I said her mom and myself will be able to supplement the difference on the state school and or if she went to the community college that would be even better. And you know what, Kevin, and you guys could even make it a goal to see and talk to her about, hey, what would it look like maybe your sophomore or junior year where you move out and maybe you pay half rent so that you live on your own and you can at least like get this feeling of independence, right? That gives a little bit more of that college life, if you will, if that's what she's craving. Like she's kind of craving that college life. So how do we create that environment

at a fraction, at 1% of the price? At an $80,000 off discount. Yeah, that's right. That's right. Like I do like splitting the difference of can she have this independence in state and have a few roommates and have a great life. Yeah, cause that's, I mean, that's part of it. And I get that probably being like a social person that I am like that was the fun part of college. Just tell her Rachel Cruz went to an in-state school and thrived.

But I also lived like, you know, in a dorm with all my friends. Yeah, I mean, yeah. So there was a level of like independence that you do feel, which is fun. And I lived in a house with four other roommates at one point and I don't know, it is. There's something really fun about that experience.

So I understand that that's what she's craving. I totally get that. But the problem also is just cause we feel and want something, part of maturity is realizing we don't always get it when we want it, if the money's not there. So I wanna balance it out, Kevin, with totally emphasizing of like, I get it.

And what could we maybe do to maybe help create that environment for her that's more inexpensive than like going to a different school. But then also in the same breath, saying like, this kind of is kind of the sucky part about being an adult is like, I would love right now to leave right now, George, leave you on the show and go fly

and go to Florida for two weeks, right? Like that's what I wanna do, but I can't, I'm an adult, right? I have a schedule, I have responsibilities. And so there's just part of learning that element of life that is as important and I don't know, that's it though. Like there's a part that you just gotta, I'm gonna go George, I'm gonna go to Florida.

Yeah, she's gone, she's dead set on that. And I do think redirecting this energy. Thank you, Kevin. Getting to the root of it. And if it is that independence, well, let's show her a path I do think redirecting this energy. Thank you, Kevin. Getting to the root of it. And if it is that independence, well, let's show her a path to do that in a healthier way that doesn't involve going into crippling debt, all to be a teacher. That's right.

Which is a wonderful profession, but she's not going to go make six figures being a teacher. Yeah. So I think that's how you can get there is not just the like, here's the chart and why you're being stupid, but it's like, hey, what you're wanting and the avenue at what you're wanting is not a smart avenue. What you're wanting is not wrong or bad, but let's get what you're wanting in a smarter way.

And that might mean you gotta- I think you hit the notes on the head by delaying satisfaction for maybe two years and then getting into the moving out in two years, that'd be a good idea. Yeah. And what's so hard is when you were 17, two years feels like two decades, right? But at our age, it's like two years just goes by.

So we're already talking about 2027 with stuff, right? I mean, like, it's just like stuff is just right here. Like we just know it's gonna be here any minute. But for her, it's gonna feel like a lot. So it's totally understandable. Have you guys watched the borrowed future documentary with her? I did watch it.

She did not. I think that's a good one. Maybe instead of the book, you get to actually hear real stories and see the emotion and hear people talk about this and be inspired by those who were able to do it debt free. And then she might go, you know what? I'm gonna apply for some scholarships and grants.

I'm gonna work part-time. I'm gonna do whatever it takes to accomplish that dream and do it debt-free. And I hope she turns a corner, Kevin. It's hard when she goes and sees, gets starry-eyed on another campus. I get it. That's all the marketing of the colleges.

Look how wonderful the experience is gonna be. They don't show you the textbooks you're gonna buy. That's not fun. I don't think you buy textbooks you're gonna buy. That's not fun. I don't think you buy textbooks anymore, George. So much is online. What do you do? You just rent them? A lot of them do it on their computer. You're like a boomer now.

I know, that's what I hear. Wow. That's what I hear. She's a good kid and I think in the end she'll end up making the right decision. Totally. It's just been a stressful time. I hope so. I know, I'm sorry, Kevin. And you know what? I'll pray that she doesn't get into that school.

Yeah, that's right. Maybe that's it too. Maybe she'll be accepted. All this does, I'm sorry. But also she's not weird or crazy. To be 17 and go have a great college experience, like that is so normal. That is so normal. So I don't want to fault her for that.

But how we do that in a wise way is like, that's the sign of growing up, which is not always fun, but it's the reality. Thanks Kevin for the call. Good luck to you, Dad. Good luck. When tackling debt or building wealth, people can often forget about one important step

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All right, up next we have Angela in Cincinnati. Hi Angela, welcome to the show. Hi, hi, thank you. Hi, yes, welcome, welcome. How can we help? So I wanted to know the safest move to invest about $60,000. I'm going to get from my husband's life insurance. Um, at my age, um, I'm 56. So I'm not really interested in, um, you know,

aggressive stock market investments because I'm more interested in security where my, I've got money when I want money. So we had thought about taking, um, like laddering CDs, um, $10,000 CDs. So that when I am a single income and, um, you know, I'm, I'm elderly, I can't go get another job that I will have access to money monthly, or I can roll it back over into another CD, but at least I know my money's secure and I didn't lose it.

Is that the right thing for us to do with that money? I guess it's what we're trying to figure out. Okay, has your husband passed already? No, but he's in the late stages of cancer. Yeah. Oh, Angela, I'm so sorry. Thanks. Oh man. It's probably before the end of the year.

And he's doing everything he can to prepare me to be alone. Oh my gosh, Angela. Wow. Are you working full-time right now? I do, yes. What's your income? About 85,000 a year. Do you guys have any debt?

We have none. No mortgage or anything? No mortgage, no card, no credit card. And what are your monthly expenses? About $1,500 a month for just utilities, food, gas, things like that. Wow. So that's a really great scenario because you have low expenses and a great income, so you don't need this $60,000 at all. You just want to kind of keep it safe. Wow, so that's a really great scenario because you have low expenses and a great income.

So you don't need this 60,000 at all. You just wanna kind of keep it safe. No, how long do you wanna work till? So I work for a state school, so I'll get a pension. And I need to work to 65 to be able to qualify for Medicare insurance. And I probably won't collect my pension until I'm 67 so that I'll get about $4,000 a month from my pension.

Okay. Plus about, then I'll also have Social Security, which is in a large number, maybe $1,500 from that and maybe $5 from his railroad pension. But I need to work till I'm 65. Okay and are you planning on doing that? Is that you know that's that's your plan? Okay. Yeah that's my plan. Okay and you guys have any money anywhere else saved? Yeah so we have a $50,000 emergency fund that's liquid that I can get. He has from his railroad investments, he's got a five-year CD, which will be about $100,000 in four years.

It's at 78 right now. Then another one that's 31. I have another CD that's 31. Okay. I have another CD that's 20. So y'all love CDs? Cause that was your other option for the 60. Yes. Yeah, I think I understand you wanting to be conservative, but you guys are in such a strong place financially

that I would rather invest this money because what we've seen is this thing called the rule of 72. Essentially every, if you get a 10% rate of return, your money would double every 7.2 years. And you already told me you're gonna work another nine years. So think about the current balance of all those CDs in your savings, that 60K that you're planning on putting in another CD ladder.

What if you put that into the stock market, into like an S&P 500 index fund even? Well, that would be double seven years from now. So 200 grand would turn into 400 grand if you just let it ride. Because you told us you don't need the money, you already have your emergency fund, keep that liquid in a high yield savings account,

and the rest I would invest. And we're not talking about single stocks, we're talking about 90 to 200 stocks sitting in one fund. Is that like mutual funds or is it something else? Yeah, mutual fund or index fund, very similar. They're just a giant group of stocks that we're all rooting for. And I would sit down with a financial planner

to help you understand this stuff because I don't want you to invest in things you don't understand. And especially when you're on your own, you need some pros in your corner. So you can jump on to ramsysolutions.com and click on SmartVestor and start to form a relationship with a financial planner that you trust

to help you with all of this. Okay. Yeah, so I think, so when we're looking at, but I'm looking at these numbers, Angela, especially you continuing to work and make what you're making, you're gonna be totally fine financially. So honestly, if you wanted just to leave everything

in CDs and all of it, you're gonna be making around six grand a month just through pensions, Social Security, and the railroad pension, right? So you'll be making six grand. So you're gonna be fine. I feel like that's an important thing to say. You're gonna be fine. You're not gonna go broke,

you're gonna be able to cover your expenses because you've done such a good job of living less than you make and having no debt. But if you do want this money to grow more and not a very aggressive, again, it's a little bit, you can feel like a risk because it is the market, but over the course of 10, 15, 20, 30, 40 years, it really,

the trajectory continues to go up. There's some dips sometimes and you see it all over the news, and it's all scary. But what George is saying is you are gonna earn a whole lot more doing that versus just leaving them in CDs. Yeah, my dad always just jokes. He's like, CDs are certificates of depreciation. He was like, they don't move a lot,

but they feel safe, because they are. But hear me say, Angela too, what you're going through right now, I can't even imagine. Like it has to be one of the most, you know, grief stricken things is watching this with your husband. So for you, if it feels safe to have them in CDs,

I would be okay with that. Like I really would. But I just want you to hear you would be safe doing something else if you wanna make more on that money. And, but I understand why you wouldn't right now because there's just so much emotion and so much that is. It's okay to just not do anything for the next year

and see what happens, see where you're at and then invest. You're still young, hopefully you're healthy. You got a long life ahead of you, but it's going to be figuring out what the next chapter is for Angela beyond money. Yeah, and I do think too, Angela, if you guys, I don't know what his, how he is day to day, but it would be, I think, a really great idea

if you guys could sit down with a SmartVestor Pro, find one that you like, and have them, they can just walk you through some of these numbers and scenarios, and they have a heart of a teacher, and you can even interview a couple over the phone. And that may be a good thing for you guys to do maybe this summer is just sit down and run some numbers with somebody

that's in this day in and day out and just get your comfort level. You don't have to do anything, but just kind of start to like dip your toe in the water in that world just to see how you're feeling. Again, that doesn't mean you have to do anything with it, but I think that's probably a next smart step, because I think they're gonna be able to lay out

a great plan and kind of show you what we're talking about here more theoretically, they're gonna be able to show you with actual very detailed numbers. So that's probably what I would do if I were you guys. Last question, does he have a will in place? Yeah. Okay, good.

You guys have done a really good job. I know you have. I mean, nobody sees this one coming, and we're wishing him the best through this journey and you as well. Yes, I'm so sorry, Angela. But at least you're not worried about money in the sense that you're broke and you have all this debt to pay off. Such a gift, yes.

So you guys have set yourself up for a peaceful life to be able to grieve what's going on. That's right. That's what we find a lot is when tragedy strikes for a lot of people, they're trying to pick up the financial piece along with the grief. And when you have the finances covered, because you've done smart things like Angela and her husband, it allows you to have the capacity just to just to be sad. I mean, just to grieve completely grieve and not be stressing about the money. So that is such a gift that you guys have given to each other, Angela. So we're praying for you guys. Thanks for the call. Our scripture of the day comes from Luke 6, 27 through 28.

Love your enemies, do good to those who hate you, bless those who curse you, pray for those who mistreat you. Mother Teresa said, some people come into your life as blessings. Other people come into your life as lessons. Wow. Beautiful. Well said. I'm not sure which one you are yet, Rachel. We'll see. Jury's still out on that one. The friendship is still. You've been both to me. You've taught me many lessons and you've been a blessing a mother Teresa way to say that it's the difficult people in your life that you just you know It's the people that don't bring the good stuff and you're like, you know I'm gonna see this as a lesson for myself. What a beautiful window to see life through man. That's the

That's the type of energy we need more of George. My version of that is monetize the haters. You know, just use it for good. So you can make money. Exactly. George what, George what? All right, let's go to Kurt in Champaign, Illinois. Hi Kurt, welcome to the show. Good afternoon, thanks for taking my call.

Absolutely, how can we help? Well, I'm a 75 year old retired teacher, um, a live alone and American. I'm full of a nice pension and some social security. And after paying off a whole lot of debts and that I had from my previous marriage and, um, I finally paid off everything. I own nothing. I have a brand new car, which I know I shouldn't have bought,

but I did anyway. It's the first one I've ever owned. I'm going to have it for 10 years. So it's not that terrible. Anyway, I have a good income and I'm right now looking at about $2,000 to $3,000 a month of expendable income. I've got money in a wealth front savings account at 4%, a wealth front savings account at 4%, 55,000 in that. And no mortgage, nothing like that. The two to 3000 a month, I'm just using like if I want to buy a new car or I bought a new lawnmower last year, you know, whatever comes up, I live rather frugally. Um, about to eat a couple of times a week. I don't know what to do with this two or $3,000 other than put it in with the rest of the savings account at 4% because a,

I know nothing about investment and B, I think that ties up my money. If I wanted to get to it, it would be more difficult to, and I've got a daughter and two granddaughters who are extremely well off. So they're never going to need my money. So I don't know if I should invest thinking, make as much money as you can before you die, or just enjoy what I've got. Hmm. And you've got guaranteed income for the rest of your life?

Yes. And it's plenty enough to cover you? Somewhere around $6,500 a month. Amazing. And this $55,000, is that essentially your emergency fund plus some? Yes. In this high-yield savings? Correct. Okay.

Yeah, I mean, there's only three things you can do with money, and this is very freeing to realize, is just give it, save it, spend it. You've been spending it, which is good. You've been enjoying some of it, so it's not just like, I'm living frugally for no reason. You went out and you got the toys and you got the nice stuff. You can take trips if you want to. And then are you doing any generosity and giving right now or anything that you're passionate about that you want to give more to? I do. I have four or five different charities, all that are animal related that I donate

to pretty much every month. Beautiful. And then the other side is saving and investing and building some wealth. And so you could invest it in like a taxable brokerage account. I mean, the money, you know, if you don't want it locked up, you don't want to pay penalties, the taxable brokerage account, you'll have capital gains on the money you do make on that.

But if you did, you know, I'll just give you a ballpark here of 2,500 bucks a month, starting from zero and you invested from age 75, let's say age 80. Is that fair? Yes. Five years from now, that would turn into $200,000. Which is great and wonderful, and at 80, what would I do with it? Exactly.

There's a legacy piece to this where you go, I've got to leave it to somebody, and that might be to your kids, your grandkids, your grandkids, grandkids. You could set up college funds and do all sorts of fun stuff. And so I think really at the heart of this is you've got to have some creativity, soul searching to go,

what could I do with the wealth I've created? Yeah, and maybe you cut that in half because you're getting around two to 3000. You said that what you need to do with and you're already doing the giving. So maybe you cut that in half, Kurt, and say half of this, I'm going to just spend and. So maybe you cut that in half, Kurt, and say, half of this I'm gonna just spend and enjoy my life.

Because that's part of it, right? Increase your lifestyle. Yeah, and just have fun, go on a trip, take a road trip. I don't know, do what you want with it. And then I do think there's an idea still of just putting some money away. And maybe it's half of this money. Maybe it's only a fourth of this money.

I don't know, something that's kind of growing or you're just leasing, because you also don't know what's coming in the future, and for some reason, if you did need some money, whether it's because of a medical event or something happens, just having some money there is just a big safety net for you, and I think, you know, is that- I just had major surgery Friday, so I'm not putting any more money away until I get, you know, is that- I just had major surgery Friday, so. Oh, well there you go.

I'm not putting any more money away until I get that paid off, but I've got really good insurance. Sure, yeah. It could be less than $5,000. Even like long-term care, like the cost of a nursing home stay, even for two years, could be hundreds of thousands of dollars.

And so right now- Well, I do understand that, and I've looked into it, but that stuff's expensive. Exactly, and that's why I would say, let's build wealth because we simply don't know the future. I would be investing a portion of that to build up a little nest egg of two or 300 grand so that it's not gonna be a burden on your family

to cover that expense. Okay, so say take half of my expendable and put it in maybe an index fund and half of it keep putting into the savings account? Yeah, I mean, you could keep adding to savings and get the 4%, but I think over time, if you're fairly healthy and you expect to live into your 80s and 90s,

then I think investing it would be a wise move. Yeah, what I was saying, Kurt, sorry, is that you could take half of it and spend it and enjoy and then the other half invest it. But I think, I think the 55,000 that you have and just kind of more of a just a traditional savings account is good. I probably wouldn't put any more to that because that's a fully funded emergency fund. I would start any other money that you have that you want to put aside for the future, I would invest that. And here's, here's an example for you from 75 to 85. If you invest 1500, you take half of it. Like Rachel said I would invest that. And so. Here's an example for you. From 75 to 85, if you invest 1500, you take half of it, like Rachel said.

You invest that for that 10 years, you would have over 300 grand with a 10% rate of return. And your contributions would have been 180. And so that's 120 grand of compound growth right there. So, best recommendation, S&P index fund? Sure, yeah, you can just go on a taxable brokerage account So, best recommendation, S&P index fund? Sure, yeah, you can just go on a taxable brokerage account and S&P 500 index fund to keep it fully liquid.

It's not in any kind of retirement account. There's no real tax advantages other than capital gains tax rate, but that's still a wise move to kind of create your own little nest egg because at 85, we don't know what life's gonna be like. And if there was a nursing home stay for two or three years, that could easily eat up 300 grand.

Yeah. Okay, how do I find out how to do that? Invest in an index fund. There's a lot of resources out there. Have you worked with a financial advisor before? No. Okay, that would be a good step, because the key here is you wanna understand

what you're investing in and not just click a button or have an advisor do it for you. And SmartVestor pros are the folks we trust to help on the investing side and you can reach out to one at ramsysolutions.com and click on SmartVestor. And I would definitely have that at your stage of the game. I would have someone in my corner looking at this 30,000 foot view of my entire financial picture.

And it's not just helping you choose an index fund. That's like 1% of what they do. There is tax planning, estate planning, tax loss harvesting, all kinds of fancy shmancy things that they can help you understand to protect all the wealth you've built. Okay, my next step is smartvester.com. Go to ramsysolutions.com and click on-

Ramsysolutions. Yeah, SmartVester. On to the Trust Your Expert section. Yeah, great question, Kurt. You've done really well. You've helped a lot. I really appreciate your help. Absolutely, Kurt.

What a great problem to have. That's so great. I know. I was gonna say you can Venmo at George. That would be great. You have extra money. You don't know what to do. Yeah, just 1500.

That just floats into this Venmo account for George. This is, I mean, he's just lived very conservatively, got rid of his debt, 75, and just living his life. It's amazing, yeah. And I think, you know, it is an interesting conversation always to have at this point, which not everyone is in Kurt's position. They're looking at like,

I'm not gonna have enough for retirement. But if you have enough, you know, and there's excess, it's like, you know, how much of it do I just enjoy? And how much of it do I continue to save for the future? And I think the answer is both. There is a point that just saving to save, what are you gonna do? Then you die and you live, yeah,

and you leave all this money to your kid and you're like, you didn't live the life you wanted to live or do the things you wanted to do. We talked about the like die with zero concept. Or it's the opposite. You spend so much and then you have to get into a nursing home and you don't have the money for it either. And then, I mean, that's stressful.

So you want to make sure that you're being wise about it all. But also you guys, those of you that have built wealth and have listened to the show for a long time, don't just hoard a bunch of money and just keep saving, saving, saving. Enjoy it. You live like no one else. So later you get to live and give like no one else.

George, thanks for a great show. Thanks to everyone in the booth. Thanks to our great audience out here in Nashville, Tennessee. And thank you, America. And remember, take control of your money and create a life you love.