The Ramsey Show - App - Girlfriend Thinks I’m Dumb for Not Having a Credit Card (Hour 1)

Episode Date: February 15, 2022

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. George Campbell, Ramsey personality, host of The Fine Print, a podcast on Ramsey Networks, is my co-host today. We invite your calls about your life, about your relationships, your mental health, your boundaries, your career, your work, and your money. We talk about all of them here on The Ramsey Show. It's a free call, and some say the advice is worth exactly what you pay for it. The phone number is 888-825-5225.

That's 888-825-5225. Colton starts off this hour in Amarillo, Texas. Hey, Colton, how are you? I'm doing very well, Dave. How about yourself? Better than I deserve, sir. How can we help? So,

I actually just moved back to the United States from Australia, and my girlfriend is very adamant about me getting a credit card. She says I need it to survive in America, and she's worried that if I don't get one in the future, if we decide to get married, that it might bite us in the butt when it comes to getting a mortgage and all that. I don't want one. You actually helped my parents get out of credit card debt a few years ago, and I just don't know what to do about it. I just, I don't know how to

approach her about talking about that and explaining it without sounding like a jerk. What have the conversations been like when you say, hey, I don't want a credit card. I don't believe in going into debt. I think there's another way. What is her reaction? Well, she's kind of, how do I put it? She doesn't, I guess from my interpretation, she thinks that I don't understand what it is because as you know, everyone in America is living off of credit card debts and car payments. And she thinks that's a good thing. She thinks it's a necessary thing.

How old are you guys? We're both 22. Okay. How long have you been dating? About two years now. What other things is she condescending to you about um let's see i guess sometimes i'm i'm kind of uh when it comes to emotions i'm a very um emotional guy when it comes to showing love and stuff she's not always that kind of person.

I really don't know. How long did you say you've been dating again? About two years. Two years? Wow. And you've been back in the States for two years? No, I actually just moved back here in the very beginning of December. I actually threaded the needle getting out of Australia. So it was kind of a long-distance relationship up until the last few months.

So we actually met as missionaries overseas. I can't say exactly where, and then we started dating about a year after departing. Okay. This is going to be a conversation where you need to maybe show her some information, not to prove her wrong, but just to show her that there is another way. And so one of the easiest ways to do that, we did an episode on The Fine Print about this very topic called The Dirty Truth Behind Your Credit Score. We also did one on credit card rewards. So depending on what angle, it sounds like she's saying, well, you need debt to survive, and if you need debt, you need a high credit score, and therefore you need to use the credit card.

And so in a logical sense, we can show her that you don't need those things, and I've gotten a mortgage without a credit score, and so it can be done, but she's going to need to get some new information in order to maybe see that. What were you guys missionaries for, Bank of America? No, actually. Christian missionaries, right? Youth with a Mission.

Yeah, Youth with a Mission. Christian missionaries. So Bible-believing. Okay. Yes, sir. So let me help you with this, then. Let's maybe have this discussion through a different lens. Okay?

Okay. I would challenge either one of you, as I have people for decades, and you wouldn't be the first to, to find me one time in Scripture that God used debt to deliver his people or bless his people. Show me one positive reference to debt in Scripture. By the way, I'll help you with this. Here's a hack.

It's not there. It's not a sin listed in Scripture, but 100% of the time that debt is mentioned in the Bible is a negative reference. You're a fool. You're a slave. You're impulsive. These are the things that come around the word debt as you read through and study the Scriptures, and there's hundreds and hundreds of references to debt in the Scripture, and they're all negative. So if we're going to look at this through the lens of the Bible, which your founder, Lauren Cunningham, would tell you to have done at Youth with a Mission, very familiar with your ministry, and an admirer of the ministry, by the way. Thank you.

But if you look at this through the lens of Scripture, there's nothing in there that says that debt is the way to win. As a matter of fact, it says it's the way to lose. Now, it's not a salvation issue, and it's not a sin. It's just, biblically speaking, stupid. That's what it amounts to. And so maybe that's a way to have the discussion. And then you can also go at it with secular or mainstream information like George is talking about. Because here's the thing. You're 22 years old.

Okay. She's 22 years old. She does not have all the answers to the money equation. I can assure you of this, sir. As a matter of fact, she has almost none of the answers. And she's pretty condescending about the fact that she knows nothing. So here's the thing. You can get a mortgage without a credit score.

It's called manual underwriting. If you want to buy a car, you should pay cash if you want to become wealthy and build wealth. Yes, sir. That's actually one of the arguments that I have, and I haven't made it yet, because she's paying off a vehicle. Which was stupid. Now, I've been stupid, too. I've had car payments. I've had lots of payments. I did a lot of stupid stuff. That's what qualifies me to teach this, is I've got stupid a bunch of it in the rearview mirror. And so, I mean, I made it an art form for a while so i you

know her little car payment is not nearly as stupid as i've been but uh and then lastly is this that you know the thing as a a father of grown children which is an oxymoron as a father of grown-ups um uh the thing that concerns me the most about this conversation is how condescending she is towards you from a relationship standpoint as if you're a doofus and she has it all figured out which from my seat is kind of funny laughable except except that how it plays out in your relationship so i think that that needs to be addressed in your relationship going forward, that you guys can have a conversation where you have equal footing intellectually, spiritually, to have a calm, good, mature discussion about something instead of her going, well, you just don't know, little man. Well, you're freaking 22, lady. I mean, seriously, I got socks older than you.

So this is ingrained in their brains. Ridiculous, you know. But if it's a values thing, it may not work out long term. Yeah. I got socks older than you. This is ingrained in their brains. You know. But if it's a values thing, it may not work out long term. Yeah. Money fights, money problems, number one cause of divorce. So either you guys get on the same page or this may not be the right fit forever. Sorry.

Yeah. That's a possibility, too. It may be your signal. This is the Ramsey Show. for a lot of you last year was another year of just trying to survive but you don't have to live like that. You can have confidence in your money and your future. So if you're tired of being stressed out all the time, you can decide to make a change. You can follow a plan that works. For almost 30 years, Financial Peace University has helped millions of people take control of their money. You'll learn our proven plan to save money, pay off debt, build wealth, and give generously. Watch FPU on demand or get plugged into a class for encouragement and support from other people.

You don't have to face another year of stress and worry. You can have confidence in your money. FPU is only available with a Ramsey Plus membership. Start for free by visiting RamseySolutions.com slash FPU. That's RamseySolutions.com slash FPU. Well, guys, we are so excited. Smart Conference is back this fall, October 22nd. We're bringing this world-class event to Dallas, Texas. There'll be thousands of you there.

You'll spend the whole day getting the tools and inspiration you need to be smart. You go home believing you can meet your goals. You can build wealth. You can grow as a leader. You can have mental health and wellness. You can deal with your relationship struggles. You can get the job of your dreams. Yes wellness you can deal with your relationship struggles you can get the job of your dreams yes you can and you can have the marriage of your dreams too rachel cruz dr john deloney

ken coleman george camel christina ellis pedro latore and special guest craig and amy groeschel good friends of ours pastor of the largest church in america today lifechurch.tv over in oklahoma city they'll be speaking on marriage so it is quite a day you're going to leave smarter in every area of your life you know there's so much trash filth and nastiness going into people's brains out there george crap is everywhere going and if you put crap in your brain all day your brain will be crap you need to put something smart in your brain all day long on October 22nd in Dallas. This is going to be fun. It's like drinking from the fire hose. If you've ever wanted a taste of what we do here at Ramsey Solutions, this is the event for you.

We're going eight to five, nonstop. We cover all the areas of life that are looming in your brain that give you that anxiety, from money to relationships to career, and powerhouse speakers, of course, with all of our Ramsey personalities being there. And I've got to host this event for many, many years. And it truly is my favorite event that we do. And now you'll be one of the keynotes. And I get to speak for the very first time.

So that's one reason to go. Not a great one, but it's one. No, it's a great reason. We're going to have a great time. It's going to be an incredible talk. I've seen the outline. And a Texas crowd. I mean, there's nothing like it.

Yeah, game on, baby. I am ready for this. Yeah. I'm so excited to get back out here and get to be with human beings and everything. Yes. Man. This is a destination event. October 22nd.

Listen, the ticket prices went on sale. The tickets went on sale today. So the prices are at early bird specials. That means, oh, wait a minute. They're going to be gone real soon, like by the time I finish talking about this probably. But you better get on there and get it. RamseySolutions.com slash events.

Get your tickets October 22nd. We're going to be in Dallas. You're going to be smarter if you come. It's a smart conference. That's true. No one leaves dumber. I can tell you that much. I can tell you that.

I can tell you that. So, George, I think we need to go back for a second because I had, with our last caller, two youngsters, okay? But y'all kind of felt me rise up about that. I felt it. Yeah, yeah. And it wasn't caffeine. Here's the thing. this and people being condescending to other people who want to live a debt-free life and build wealth the shortest fastest possible way the way that actually works instead these other

people are stealing their hope and regardless of your age that condes that that that condescending attitude that i'm going to look down my nose and go, oh, you just don't understand. You poor little people, you just don't understand. And there's something about hope stealers, regardless of whether you're a sweet little 22-year-old girl or whether you're a crusty old 61-year-old jerk like me, if you're a hope stealer,'m gonna rise up on you that's what

i'm rising up on because that just that ticks me off yeah keeps people from you know and it's such a passive aggressive form of persuasion that and it keeps people from living a wonderful life. And the problem is that not only are they arrogant and condescending, these people that do these kinds of things, but they're wrong. That is true. Well, what it comes down to is they have a fixed mindset, and their brain says what I know to be true will always be true, and I don't have a different picture of what this life looks like. And because of my upbringing and my experience, what I know from culture, this is just how it has to go. And we're out here preaching every day to people saying,

there's a different way over here. Look, there's hope. You don't have to stay in debt forever. You can build wealth. The little man can get ahead. And so that's what we do every single day is trying to help people get that growth mindset to give them that hope give them actions they can take to change their life and those people just don't believe that they can change but you're just you know you're just such you and Rachel are just so much nicer about it than I well yeah I don't maybe it'll come with age I or maybe you'd 30 years and just get disgusted and I just because I just it's just because I can see this great young man who's been out there

serving God with Youth With A Mission coming home and having a wonderful life. But no, you don't understand. You don't know how life works, you poor little thing.

Which, she just came off the mission field too. Yeah. I mean, it's not like, like she'd been here learning something.

No. But what happens is the credit card becomes a gateway drug to all kinds of other types of debt. And you go, well, if I'm okay with payments over here, what's wrong with a car payment? And what's wrong with having debt over here and a personal loan and the mortgage? And so this starts to crush your financial life. And then you get upset because you don't have any money at the end of the month. See, when you say gateway drug in your nice voice it sounds so sweet so pleasant

when i say it it sounds like i just i just cut somebody's head off it's a gateway drug you know you're like it's a gateway drug dave listen i'm like dare okay that's me i'm trying to help the youth of america nice guy that's stay off of drugs that's a don't do drugs dare we're gonna start a dare program. We ingrain that into society, but when it comes to debt, we're not doing a great job because it's the parents telling the kids. Just say no. Just say no.

That was Nancy Reagan's thing, right? Just say no. Just say no to credit cards. Just say no to credit cards. There you go. That's the new campaign. You can take that one for free. You know what?

It's old enough. We could restart it with the 22-year-olds because they've never heard of it. It's vintage to them. It's amazing. It's like retro. Maybe I'm older than I thought. Oh, too fun. Oh, good stuff.

Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Pamela's with us in North Carolina. Hi, Pamela. Welcome to the Ramsey Show. Hello, sir. How are you doing today? Better than I deserve. What's up?

I'm glad to hear that. Yes. So what is going on with me? I'm on baby step two, and I have a beta car, and I've been using that to work my side hustle so I can snowball some money and pay off my debt. Just a couple days ago while I was on my side hustle, my car cut off. I couldn't cut it back on. So I got a tow, and I just received news from the mechanic that the head gasket is blown. And there's going to be thousands of dollars to repair, which I do not have. And I was just wondering if maybe you guys had a solution. Man, I'm sorry.

That just makes your stomach hurt. I've been there. And the stupid car breaks at exactly the wrong time, like it's a country song. Man, I'm sorry. That just makes your stomach hurt. I've been there. And the stupid car breaks at exactly the wrong time, like it's a country song. I mean, it's ridiculous. You know? Oh, my gosh. Yes, sir. That's unfortunate, Pamela.

So have you got a quote from anyone else? Is this a normal price people pay for head gaskets? Yeah. That's thousands? Yeah, it's gone. Well, it sounds like it's worth more than the car is. What is the car worth? I looked on Kelly Blue Book about a week or so ago,

and I believe it's between, I think, like $3,400 and like $5,000. The fair market value is around $4,000. It shouldn't cost thousands to do a head gasket, but it might cost a thousand. Well, that's what the mechanic was saying because I was anticipating thousands. And she mentioned that, yeah, they were talking about the labor and then labor was already was already at two thousand dollars yes well labor to do a head job on a four thousand dollar car i don't think so yes i don't think so where'd you take this the dealer um no sir um it's like i said it a beater. So I took it to my mechanic. I took it to AAA.

Yeah. I hope that was okay to say on live radio. It's fine. That's fine. They're not mechanics. They're just your insurance plan. Okay. I can't leave you on the side of the road going into a break with 15 seconds.

So we're going to take you up when we come right back and answer your questions. So hang on through this break. We'll be right back. George Campbell Ramsey personality is my co-host today. Pamela in Wilmington, North Carolina is on the line. We're talking with her going into the break. The head blew on her car. She's got to have a head gasket put on. They're quoting her $2,000 labor alone on a $3,000, $4,000 car, and so she's stuck. You were using the car, you said, for your side hustle.

How are you getting to work on your regular job? Well, I have a roommate, and she dropped me off the past couple days. Okay, and so that's your short-term plan. You have any money saved at all? Well, like I said, I'm on Baby Step 2. I did have the $1,000 saved. Okay. But we had another roommate and a huge water bill in the office,

and they were talking like cutting it off on Monday. So I took a portion of that emergency fund that paid for the water bill so we would still have water. I'm sorry. Okay, so what do you make? What do you make? What's your income? I make a little less than $32,000 a year. Okay.

All right. So what we've got, you're going to have to fix this with an uncomfortable short-term solution because you don't have a lot of options. And then you're going to have to work towards a better long-term solution. So it sounds like, okay, number one, I'd like to get another opinion on this car from somebody. If you can get someone else to give you a second opinion on a different price. This price sounds high.

It sounds high to me. Okay. And it depends. What kind of car is it? It's a 2000 Lexus. Okay. It just feels high, okay, for $2,000 labor alone for a head job. I could be wrong, but that feels high.

And you don't have it, so it doesn't matter. But if you can get a price that you could scratch up while you ride with your roommate to work and fix it, that'd be great. That's rule, that's thing one. Thing two is if that doesn't work, you're going to sell the car as is for a couple grand probably is all you're going to get for it. And you're going to take that $2,000 and whatever other money you can scratch together and buy you a garage sale car to get around in right now. That's your short-term solution. And then as fast as possible, run the side hustle as fast as possible.

Run as many hours as you can and move up out of that up into a $3,000 or $4,000 car all with cash. Please do not let this force you into a long-term problem which is called a car payment and a lot of people in your situation jump from the fire into the frying pan and um are from the frying pan into the fire whichever way we want to run that metaphor but um you know and that's what i don't want you to do here. So get a second opinion. If that confirms the pricing on the repair and I'm wrong, which I might be, then sell the car and buy a car for cash with whatever cash you can get in your hand. And that's going to be what we call a garage sale car. It's a car that's not much of a car.

It's worse than the one you're driving, except that it runs. It's hard to imagine. Except that it runs. And we're pausing the debt snowball while we try to pile this up. Pause everything until you can get yourself back into a decent car. By decent, I mean a $4,000 or $5,000 car here, move up, back up in car. You're in a situation where you cannot afford to have this kind of thing happen. And so you don't have any wiggle room any margin in the lobby of ramsey solutions on the debt free stage carl and robin are with us hey guys how are

you hey great dave welcome where do you guys live uh half hour north of detroit in northville michigan got it well welcome to nashville good to have I'm here to do a debt-free scream. How much have you paid off? Well, we started Financial Peace University class in 2015, and we had $399,000 in debt. Whoa. But in reality, we read your book in 2009 after the 2008 real estate crash, and we had a bunch of debt from rental properties and such, and it was about $685,000. That's where it worked down to. What year did you say you went through FPU then? 2015. 15. Yeah. Okay. And so you got seven years to pay off 400 grand, right? Right. Okay. Cool. What was your range of income during that time? Between $170 to $230.

Wow. What do you guys do for a living? We're both engineers at Ford. Oh, very good. Ford Transmissions. Very good. Good for you. The Blue Oval.

There you go. I love it. I love it. Sounds like you've been there a while. Yep. All right. Yep. Very good.

So you paid off all the rental debt, and then when you went through Financial Peace University, you decided to attack the rest of this. What kind of debt was the $400? Well, it was the rental debt, and then when you went through Financial Peace University, you decided to attack the rest of this. What kind of debt was the $400,000? Well, it was the rental debt. Actually, we didn't pay it off, but we did the Davis plan, I guess. Until then. Until then, yeah. So we weren't making enough progress, and we were looking for something else.

So then we took the class, and we we really you know got gazelle intense sold everything bought a bought a 1997 buick riviera whoa as our dave car you bought the enemy's car yes bought a general motors car and you work at ford yes yes but if you're going to drive a junker drive the enemies right it was comfortable and it was fast oh Oh, that car. I love it. Good. Okay, so then you work your way through this. Now, is this your home and everything now? Yes, sir. So we're looking at weird people.

You're 100% debt-free. Yep, 100% debt-free. It's Boyd and Gale News! I love it. That is so very cool. So what's this house worth? It's probably worth about $500, I think. Do you own some of the rental property still?

We sold two of them, and we still have one of them. That's paid for? That's paid for. And what's it worth? About $150. Okay. So you're probably also Baby Steps Millionaires simultaneously then? Yeah, we are.

Way to go, guys! That's amazing. Thank you. Yeah! Yeah. All right. That's incredible. I mean, they got $700,000 in Thank you. Yeah! Yeah. All right. That's incredible. I mean, they got $700,000 in real estate.

Yeah. You got to be close. And they're engineers, so I imagine they invested. Number one career field of millionaires, yes. Awesome, guys! Yeah, I love it. And they're both engineers. This is incredible.

So what kind of sacrifices were you guys making? Because you said you were Dave Ish, and then you went gazelle intense. What did that change look like um well we we just uh you know scratched and clawed and we we um you know we ate at home a lot and uh you know these boys really kicked in and helped with uh rental repairs and um car repairs and uh you know maintaining our home for us, you know, with the help of us. And, you know, they didn't want the best of the best. They didn't want the best shoes or, you know, even though we, you know, Northville is kind of a ritzy area, you know, in Michigan there.

And they really supported us. They live like no one else. Yeah. So they can live like no one else. How does it feel to be completely debt free? It one else. Yeah. So they can live like no one else. How does it feel to be completely debt free? It's wonderful. What do you tell people the key to getting out of debt is? It's kind of when you're going along with the plan,

you might feel like you've made mistakes or you might want to give up. And I just tell people to give yourself grace. No one's perfect. Still keep your eye on the plan and you can do it. Like have some faith in yourself and, you know, everybody makes mistakes and just keep going. Just keep doing it. It's worth it.

She's like a great mom. Can you tell? Yeah, I can tell. You can tell she's a great mom. I love it. The boys are all agreeing. You guys are awesome. This is very cool. Way to go, you guys. Way to. You guys are awesome. This is very cool.

Way to go, you guys. Way to go. So very awesome. Good stuff. All right. So, man, I'm telling you, this is amazing. So you went to Financial Peace University at your church. Yep.

And we want to thank Steve Cooper for running it for us. And, yeah, it was at St.ith catholic church in livonia michigan ah very good he's a very good teacher very good good stuff well it makes a difference it makes a big difference to be plugged in with other people while you're doing starting and doing the journey too for that matter oh yeah very good way to go guys we got a copy of baby steps millionaires to celebrate the fact that you are one yeah you'll read about people in there just like you yeah i like it well done very good and a copy of total money makeover for you to give away to someone and

get them moving and get them on their journey all right congratulations we're very proud of you all right and the boys names are uh calvin reed and albert all right here we go carl robin calvin reed and albert from the Michigan area. $400,000 paid off in seven years. House and everything making $170,000 to $230,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Yes, you are! Woo! Woo! Woo! Woo! Woo! I love it. Yeah, baby.

That's how it's done. This is the Ramsey Show. Thank you for joining us, America. George Campbell, Ramsey Personality, is my co-host today as we talk about your life and your money. Julia is with us in Portland, Maine. Hi, Julia. Welcome to The Ramsey Show. Thank you so much. It's an honor to speak with you both today. You too. What's up? So I am on Baby Step 6 and I have a rental property.

Do you recommend that I include 15% of my rental income in my retirement contribution? No. Okay, good. Because I want to throw everything at my mortgage. Yeah, not everything. But you have other income, don't you? Yes. Yes. I have a regular job.

So what does your regular job pay? What does it pay? So I'm a freelancer, and I make about $115,000 a year. Nice. So, Julia, the point is not the magic of 15 works but if you do 14 you're going to be poor i mean it's not it's not that precise the idea is to put a large chunk which 15 is but not so large that you can't get your other debts paid off on your house and that's where the 15 came from because when i first

started this i would have people doing they're putting 25 away or they're putting one percent or they're putting one percent away and so what i ended up doing was we were you know we got with the financial coaches that here on our staff and we ran a bunch of scenarios and said okay what if you were this income and you say 15 would you be okay and this age and what what if you were this income and you saved 15%? Would you be okay at this age? And what if you saved 12% and if you saved 17% and if you saved 10% or 20%? And we kind of went back and forth. And so what we've zoned in on is at most any age, at most any income, 15% is a good, healthy amount.

But it's not a magic number. It's not a magic number. You see what I'm saying? I'm going to stick it i'm gonna tell you to do 15 because it's worked and it's a proven plan that lots and lots of people have done yeah and julia once you do pay off that mortgage and you're in baby step seven you could increase that oh you're going to increase yeah you max out everything but right now we've got to get our priorities straight and paying off the house is a1 yeah that's a great question yeah that that's very good but the point on these guidelines of these process people is is a it's proven millions of people have done this and it worked and she wasn't trying to change it she just get clarification b um some of these things are just

based on some common sense principles and this this idea of baby step four being 15%. Baby step four is put a good healthy amount on your retirement, but not so much that you can't find some spillover to put on your house and get your house paid off, but not so little that you end up with nothing in your retirement and a paid-for house you have to dig the bushes up and eat them. Oh, yeah. Because you've got no money.

And saving for a kid's college, you know. Exactly. You want to be able to help out a junior. You've help out leave some money to spill over in the budget to five and six because five and six are baby steps five and six are simultaneous with baby step four and that's where the number comes from and then it's a bunch of case studies and a bunch of possible scenarios that we ran out and here's what's weird you take somebody make it twenty thousand dollars a year they say fifteen%, and they never get a raise. They're not going to be rich, but they never really made any money. They've been at the poverty level, and they still end up with a really nice nest egg. It's not about the amount of money.

It's how much time that has to grow. Exactly. And even a little bit amount over a long period of time, it's amazing what can happen with compound growth. Yeah, and of course we all know that where you are today is not your destiny, that life is a film strip. It's not a snapshot. And so you're going to get better, get worse in a lot of areas, your health, your relationships, your money, your income, your career. And so it's not a static. You never have a static situation either.

But we ran the scenarios on static just because it was the easiest set of variables to run. You never got an extra dime in your income. Are you still okay? Yes. You're still okay. All right. Jennifer is with us in Raleigh. Hi, Jennifer.

How are you? I'm doing fine, thanks. And how are you? Better than I deserve. What's up? So, question is about whether we have too much life insurance. We're in a unique situation in that we can't add life insurance once we drop it. My husband is uninsurable, and so what we have for life insurance was carried over from a previous employer,

and we just carried on paying it. But we're kind of wondering if now if it's more than what we really need and we could use those you know that money in a different place wow why is he uninsurable he had a heart transplant oh that'll do it yep yeah and we we checked and they confirmed yeah no can't. Yeah, that's a tough one there, yeah. So how's he doing? He's doing fantastic. How long ago was this?

We're coming up on four years ago. Awesome. How old is he? He is 50 years old. That's amazing. That's so powerful. Well, praise God. That's awesome.

Good. It was an amazing long journey, but we made it through, and he's doing fantastic. So we should not complain. That's just, wow. Okay, so why do you have too much life insurance? What do you mean by that? Well, I just mean that it's very expensive. So it's carried over from an old employer. So when we left, we had the opportunity to keep it. And we knew even

back then, which has been, oh gosh, that was like 2007, we knew it would be expensive, but we also knew we couldn't get it. And he generally, throughout his career, has not worked for large companies. So we kept it as our only option. So how much is it? How much is the coverage and how much is the premium? It's $480,000 in coverage, and right now, because we just hit 50, we're paying $720 a quarter. A quarter. Okay. That's $2,800 a year.

$2,900 a year. He's 50 years old. Okay, what's his income? His income, $150,000. What's the rest of your financial situation? I also work, so I make $75,000, so between the two of us, we're at $225,000. We have a mortgage that is our only debt. Our kids are grown and through college and on their own and off my payroll, which is fantastic.

Ding, ding. Yeah, huge ding, ding. We save 15% in our retirement. How much is in there? Somewhere between 1.2 and 1.8 million. So the question you ask yourself is this, and you answer it with math, by the way, not a feeling. If he died and you didn't have any life insurance on him and you had a million-two, no kids at home, and a house with a mortgage, and you make $75,000 a year, are you okay? And I think the answer is yes.

How old are you? 50. Okay. That's all okay none of this million two you can access to your 59 and a half right correct but if he died it'd be an inherited ira portions of it and you could access it that's the scenario we're running out not predicting because we're asking about life insurance, which is actually death insurance, right? Right. So, you know, can you make it on $100,000 a year in addition to your income and still get your mortgage paid off and still have a good life? I suspect you can, by the way.

Okay. All right, and there's one other thing it just dawned on me i also have insurance on him through my employer you know the max still allowed me to do without any kind of medical review so i think between that that yeah we we i would be okay right well that's that's what you need to run out and And if the answer is yes, I'm okay. You know, I'm a millionaire with a paid-for house or close to a paid-for house, I'm sorry, and the kids are grown and gone, am I okay if he leaves me no life insurance? Then that's when you are self-insured and you don't need it.

Now, if you want it, you want to keep it, you make enough money to pay $3,000 a year and keep this around for a few more years until you feel really good about that decision because you're right. Once you drop it, you're not getting any more. Yeah, and to Dave's point, it's not about how you feel about it.

Run the budget, see what your household expenses are. Could you make it by peeling off a percentage of what's in that inherited IRA? And I think the answer is yes, based on your current income and expenses and lifestyle. And so that's what we end up doing to call it self-insured. And it gives you some peace. And that's why we teach you to do these baby steps. And once the life insurance is out after 15, 20 years, you don't need it anymore if you follow our plan. Yeah. And, you know, just be real sure that you're really comfortable because you don't get a second shot at this in your situation.

So it's a good question. It's an absolute yes or no, though. You have to make a decision permanently. This is The Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.