The Ramsey Show - App - He's Behind On His Bills and Wanting to File For Bankruptcy

Episode Date: November 12, 2025

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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm George Camel, joined by Ramsey Personality, Jade Warshaw, and it's open phones at AAA 825-5-225. John is going to kick us off in Indianapolis. What's going on, John? Hey, how you doing?

My name is John. And I'm calling me, because I want, I'm sorry, I want to know, should I file bankruptcy? And if not, how do I get out of debt? Wow. John, tell us, tell us what's got you feeling like bankruptcy is your only option. Tell me, tell us your debt. Tell us your income. So the debt, they're where that me and my wife is in is $30,000.

My income is close to $3,500 a month. My wife's income is close to $2,000 a month. she just now started back working okay good so you're bringing in 5,500 a month that's your take-home pay yes okay good so is it is it possible if you said she's just started back working is it because she just had a baby yes of course okay so I'm feeling like you might have been in a really really tight season because she wasn't working and bringing in the money and now she's back to working so has it has there been a little bit more breathing room since she's been back working yes it has it really has. Okay, that's good. So the good news is, you know, I was expecting you to say we have,

you know, $290,000 of debt or $490, you know, but the $30,000, when I hear that, I go, oh, we can do that, George. This is a solvable math problem. Yeah. What kind of debt is the 30? Break it down for us. All right. So most of it is personal loans being brought up or been gotten the time that you wasn't working. And also, because I have two of the, the children on child I'm on child support okay so the time when I have them um it was tough I didn't want my my kid that I have with my wife looking nice and you know being able to do nice things and with them not being able to of course there's more personal loans my child support went up within a year so I'm paying the 746 a month um I was not I took out another loan to pay a lawyer

so I would be able to get visitation rights. How much did that cost? $4,500. Okay, so $4,500 on visitation. Is all the $30,000 personal loans and credit cards? Yes. No cars, no student loans. One vehicle, $18,000.

Well, that's a big part of it. That's half. Is that on top of the 30, or is that part of it? Part of it. Okay. So 30 in total. What's the car worth? The car is worth about 10,000.

So there are 8,000 underwater on it? Yes. When was the last time you checked that? Was that private sale? Was that what the dealer will give you? Did you only go to one dealer? Tell us about your due diligence on that? So I checked that last night when I was looking at at Credit Karma.

Okay. So what I want you to do, your homework is let's go on Kelly Blue Book and let's see what it would do if it was a private sale. because chances are you're going to get more for it than that for private sale. And I would be interested in knowing a little bit more about that to make the next decision. What I want to know from you, John, is you guys have a fine income, $5,500. Yeah, 746 goes to child support. That's fine. How much are you paying for rent or mortgage if you own your home?

So my mortgage is $11.75. Okay, that's not bad. is there another big expense that we should know about that's eating your lunch? No, that's mainly it, you know, besides utilities and gas in my truck. What's the total of all of your debt payments? Just make minimum payments. What does that add up to for the month? For the car, the personal loan.

So, and that's the thing. I haven't even been able to make a payment yet. know what I have, I just haven't done it. So maybe. Do you know what I think, John? I think that you would really benefit from a budget, a digital budget, that you can put your income in at the top, the $5,500. And then in the budget, you will list out everything that you spend money on. And the every dollar, which is what I'm going to give you the best budget out there, it's going to keep a running tabulation of how much money you can spend. So you'll put in, I make $5,500, me and my wife combined, and then you'll list everything out, okay, here's what we spend on

groceries. Here's what we spend on rent. Here's what we spend on gas, utilities, everything for the month. And then after all of those things that are necessity for you to spend money on, then at the end, you're going to see, okay, how much is left? Now with what's left, you've got a couple of choices, John. You can say, okay, with the $2,300 that's left, we can either squander that on DoorDash and takeout and Target and Amazon Prime, or we can take that extra money and we can use it to start knocking down this 30,000. But what happens is if you don't give that, that margin, that extra money, an assignment, it just poof. It just goes away, right, George? Exactly. So if you can learn to live off, you know, let's say $4,000 out of the $5,500, if I said, hey, come hell or high water,

you guys got to figure this out. Could you make that work? Yes, yes, we can. Because guess what? That means you got $1,500 left over, which means you're debt free in less than two years. Wow. So bankruptcy at this point, it feels like my back is against the wall, and this is a great shortcut, get out of jail free card. But the truth is bankruptcy is going to, number one, implode your financial world for the next seven to ten years on your record, which is going to hurt your ability to do pretty much anything. And then on top of that, we didn't change the behavior that got John into this mess. And so the best way to get out of this is to avoid bankruptcy and just do the debt snowball method. And this is real clear.

Just pay off the smallest balance first. and ignore the interest rates. So what's your smallest balanced debt right now? $400. Perfect. So next paycheck, you could knock that out. If you paid that off before you did anything else, you could knock out $400, right? Yes, I can.

So then you free up the payment that you were making on that $400, right? So we roll that into the next debt. So what's the next smallest balance? The next smallest balance, I think it's $7.48. You could probably knock that one out, too, with the next paycheck. Yep, in one month. So one month, you've already cleared two debts. Did you see the progress and momentum of the debt snowball gives you?

Yes, yes, I do. So that's the math part of it, which works every single time if you do it. But I'm going to tell you the emotional side what's going to happen to you later this month. When that check comes and you've paid the things like the rent and the utilities, you've gone and gotten groceries, you've put gas in the car. You're going to see that money sitting there and you're going to see Olive Garden. And you're going to want to go out to Olive Garden. And there's going to be a movie that came out and you're going to go see

movie and the kids want to go and you've got them and you want to impress them you want to show them your love the boys want to have drinks the boys want to go have drinks that's what's going to happen and then you're going to go to yourself you're going to say well i work hard for this money shouldn't i get to spend it the way i want to spend it can't i start this next week can't i start it next month well my wife right and it's going to all the excuses and all the emotions are going to start setting in am i wrong no you're definitely right right so now that we've shed light on it now that we've told you this is coming, you'll be, your awareness will be heightened and you'll say, man, it's happening. That thing that George and Jay told me about is happening. I have a choice

to make. I am at a crossroads. Critical, John, because the time is going to pass anyway. And you can look up in two years and like George said, you can be completely debt-free. Or you can let your emotions control you and you can look up two years and you can be calling us back in the exact same situation. You're going to knock this out real fast, John. My guess, 18 months. If you and your wife get on that budget and hang on the line, Christian's going to pick up, we're going to gift you every dollar to make it super easy. Download the app, get on the same page, list income and expenses, and then make a plan to create as much margin as possible to get out of debt as quickly as possible.

next welcome to the ramsie show carly thank you for having me how are y'all doing doing great good how can we help um so my so my question is how can i pay off my credit card debt so that i can create a savings but after i get paid and i pay all of my bills i literally have nothing left over well that's a that's a math problem that's an income problem carly um which i'm going to be honest with you because I we've been doing the show for a long time I'd rather you have an income problem where you can just go out and work more create some margin and now we solve the problem versus you having to cut everything out of your budget because you've already done that that's the good news you've already cut everything down haven't you yes so what do you make and what are you

spending okay so I'm a teacher and I only bring home $3,800 a month all right what's your rent My mortgage is $2,100 a month. I have a $5.50 car payment, and daycare is about $700 a month. And I do want to say I am a single mom of five, so I'm doing this on my own. So it's really hard to save when I have all kids. Goodness gracious. I paid everything, like my utility cell phone bill, car insurance, I have nothing left over. No, you don't.

I've been having to use... And there's no child support coming in? no he is not involved at all i mean legally i feel like he should be i agree um i don't know where he is and when we were together we known each other since high school and when we were together he was on again off again with jobs i've always been the sole provider so even if a judge was going to make him pay nobody can find him to make him pay is that what you're telling me correct yeah okay so I'm going to point out two major problems. And I'm just warning you right now, this is going to be a lot. Number one thing is with your $3,800, your rent is more than 50% of your take home. And it is extremely, it's almost impossible, Carly, to make that happen, especially when you have another high bill, something like insurance or a high car payment. So that right there must change. The second thing is, well, I'm sorry, I just bought this. home in January. I understand. That's why I said this is going to be very, very tough.

Because no one, home is security, right? Home equals security. No one wants to be told that their home is too expensive. No one wants to be told that they might possibly have to sell, right? That's the worst thing I could have said to you emotionally. I understand that, but I'm just, right now I'm telling you the math. Math doesn't have emotions. That's the math. 50% over 50% almost impossible unless you see a world where your income is going to double because that's the next problem is your income is quite it's on the low side for a single mom with five kids and I'm not I'm just telling you the facts so we've got to solve for these very tough problems does that make sense yes when did you get the car well my car I've had since 2019 but it's and I had to refinance

one time. So it's going to actually be paid out in June. Okay. Just based on your current payment? Yeah, what do you owe? A little bit over $4,000. Okay, so it's almost done. All right. So just based off you making the payments, you should be done in June July, I like that. But it doesn't, that's going to give you some breathing room. But at this point, the only way you're making it to June July is if you're putting it on credit cards, which is what you said. So how can we bring in some more money? us, is there any margin of time? Is there anything you could do that is work from home? That is something you can do on the internet when the kids are asleep. Is there any margin of time there? After school tutoring, something?

I have looked into all that and with it just being me, we have no family here. I have to pick up my kids at a certain time. And I'm telling you by the time I get home after dealing with high schoolers all day, I'm exhausted and then I have to come home and be mom. Okay, yeah. And I have looked online to do, like, online tutoring and things like that. But, like, by the time I get my own kids situated, like, it's too late to do anything else. Where's your family? Like, your extended family.

They were about three states away. Okay. What caused you to come to South Carolina? Because the cost of living was cheaper. Okay. And your family, you said three states away. Where are they? Virginia.

Okay. Okay, got it. I want to know about, here's what I'm talking about. You're in a place, it sounds like you're a little isolated where there's not folks you can reach out to that might be able to help you, be able to free up a little margin to be able to work more. That's one thought that I'm having. Other thought is, like I said, this house is too expensive. Is there a place where we can move and teach and maybe make more as a teacher and be able to have a lesser rent? These are the problems that we have to solve because I think you and I can both agree.

we can't keep going as it is, right? Right. So something has to change. I'm sorry, what did you say? What's your total debt right now? $7,000 on a credit card with the interest rate of 23%. Plus the $4,000 on the car? Yes.

So we're at $11,000 total. Yes. Okay, that's all the debt. Okay, well, the good news is as far as debt goes, that's one of the lower numbers we've heard on the show. but the problem right now is you're underwater every month and there's no hope that the income's going to go up or the expenses are going to go down at least until the car is paid off. So have you stopped going into debt? Are you able to float the bills right now and just get by?

Or are you going swiping that credit card every month? I'm able to pay my bills with my income. What I'm putting on the card is groceries, gas, and like toiletries, household items, stuff like that. Yeah, you're not going out doing the most. having fun on credit cards you're just surviving correct and that that's the part yeah so yeah when june july comes and you're able to uh get the 550 back that is going to help right because how much every single month are you putting on credit cards do you know the exact number oh my gosh um groceries alone is like at least about eight hundred dollars a month and then if i'm having to get gas because I drive an SUV, that could be like $3.3.20 a month. And then like toilet trees and things like that,

maybe another two. Yeah. So $1,300 a month burn rate, it's too much. Because if you keep doing that until June, July, you're going to look up. And instead of having, yeah. So I'm saying that I don't want to scare you. I'm not trying to, I'm trying to give you hope to see, hey, if we can shake this loose, you can get to a better situation, but it can't stay like this. We got to look at housing that's less expensive. We've got to look, start looking tonight. My homework for you tonight is let's look at teacher's salary in other states. Let's look at the ways to increase your teacher's salary.

Let's look at those sorts of things and start getting some ideas of how you can make a little bit more money there on the side. Then I want you to look at, okay, where are some people, where is my family? let me look at cost of rent over there. Let me see what it would take to get a three-bedroom apartment or what would it look like to have a two-bedroom apartment for a season and have three kids in the room and two kids in the living room on a pull-out couch. Like there is going to be a level of sacrifice here that you're not going to like.

And I'm just keeping it 100 with you. Fair enough? Yeah. Yes. And I'm saying it because I love you. No part of this, no part of what it's going to take in this. this next season is going to be fun. What is going to be fun is when you finally get out of debt,

when you can finally sleep at night because the bills are paid, the groceries are bought, the gas is bought, and none of it was on a credit card. That's going to feel, it's going to feel so good it'll make all the sacrifices worth it. Right. What's the age range of the kids? They are 17, 11, 9, 5, and 2.

Okay, what's the 17-year-old doing? She's in school. She's a junior high school. Is she working part-time? She's actually about to start next week. She got a job at Burger King, actually. Okay, good. This might be a hard conversation as she enters adulthood and, you know, let her know what's going on. Because if she can help out during this time, even covering her own stuff and say, hey, I've got to cover the young kids. If you can cover your own bills, that's going to really help mom out as she tries to climb out of this hole and get out of debt. that's going to be a tough conversation but as the kids get older hopefully they're out of daycare

this is a season it's going to be longer than you want it to be but it's a season if you can get rid of that car payment and daycare's off the books and maybe we move to renting long term or we get the income up then we can breathe so we've got a lot of variables to solve here we're rooting for you welcome back to the Ramsey show. I'm George Camel here with Jade Warshaw. If you're enjoying the show or any other Ramsey show, hit the like button, hit the subscribe button, hit the share button wherever you're watching or listening. It means the world to us and it helps spread the word

and get this into more ears and hopefully help change the people's lives. Tim is in Detroit up next. What's going on, Tim? Hey guys. Thanks for having me on. Absolutely. That's your question. So I've recently run into, I guess, a tough conversation with my wife. She got together with some friends and kind of talking about our financial situation. I pretty much run the show. I don't rain earn too much or anything, but I've been accused now of being kind of financially manipulative or controlling. And I'm hoping for maybe a diagnosis from you guys or some advice on how to navigate this. Well, I love that you're bringing this up and saying, I want help. I think that alone lets me know that there's a lot of hope here if what's being

said is true. I will say based on the first words that you said, like, you know, I kind of run the show. That does make me think, okay, one person is carrying way more of this load than they should. Now, I will say, it's one thing if you have said, honey, I got this, I'll do it. Matter of fact, I don't really need your involvement. And it's been like that. And it's another story if she's kind of been like fine with you doing it. She's been fine with you handling it. She has not shown an interest in it. It takes two to tango on that part, right?

So tell me how it's been and be honest. Has it been more of the latter or more of the first scenario? You know, we're a very good team. The finance in general tends to make her a little bit nervous. So this kind of happened out of necessity. We both came into our marriage with basically nothing. a little bit of debt on both sides, worked our way out of it. We're basically on baby step six. And the system that's kind of evolved is she has one debit card, access to one account

and just kind of does her daily spending on that. I'm paying all the bills and making sure money goes into all the IRAs, paying the mortgage. Does she have the passwords to all the other stuff? she has passwords to maybe about half of it. She doesn't have passwords to like the retirement stuff only because she has really no input. I give her kind of a, you know, a check-in maybe every six months or so. But if she asked for it, if she asked for it and said,

Tim, can you send me the passwords to everything? Would you have a problem with giving them to her? No, absolutely not. Okay. And in the past, she ran her own IRA and stuff, and I would, you know, have to remind her to kind of, hey, go in, reinvest your dividends and stuff like that. So where do you think this is coming from with her friends?

She was comfortable handing off, but now, you know, it's been kind of called into question. Has she come to you with this before she spilled the tea with her friends? No. This all kind of happened organically, the system that we have, and now that she's revealed it to her friend group, they've said, hey, that's messed up. So they were like, hey, red flags, and then your wife came to you and said, hey, I was talking to my friends, and they're seeing some red flags with the way you're managing our money. Yeah, basically they're saying, hey, she should have, yeah, she should have more input, more say.

And she should. I would like to say, too, I don't restrict her spending in any way. She has the same sort of freedoms that I do. Yeah, Tim. You have similar spending patterns. I don't think this is an indictment on you. There's packages. Yeah.

I don't think this is an indictment on you. Based on what you're saying, I think, like you said, this kind of has happened organically. I think out of necessity, like you said, you kind of took the wheel on things and it just ended up this way.

I think her friends may have heard her say something without full context, and maybe they were like, oh, girl, you got to change this, right? Whatever. What I'm hearing is what happens, I think, in a lot of relationships

where one spouse, money's not really there, bag they don't really care a whole lot about it so they're fine with letting the other spouse do it the problem with that is what we're seeing now which is something happens and there feels like a bit of a loss of control suddenly they're feeling like maybe i don't know what's going on and i should know what's going on the truth is it's on both of you guys um how this has happened and i i really think it's probably pretty simple to get it back on track i think it's you telling her what you just told me which is you know what honey this has happened and it's just as much on me

I should have pulled you in more and I should have made sure that and let you know that it's really important for me for you to be an equal part in this. And for that part, I'm sorry. Going forward, I do, I think both of us should have a handle on what's going on. I am happy to show all the passwords. I'm happy to log into everything. I want full transparency. But I also need from you going forward to demonstrate interest in this so that it can be both of us on this what do you think she'd say to that it's i i think she'd probably like to hear that you know like i said the finances have caused her a lot of anxiety in the past why we ended up here i think even wait go back why why anxiety um when when we got together and when we got married

i had a tiny bit of debt but you know a couple of bucks she was in more death than I was and, you know, kind of caused a little bit of shame and we dunk her out of that and everything. And I think maybe to date she still kind of holds some of that. And, um, but we've done really well. And it's been, you know, she, she works, I work. And, um, uh, it's all, it's all been okay. But I'm not sure really what she would do with that information or if she would even go in and check it. I mean, yeah, I would never deny her any of those things. So if I were you, I mean, we're talking numbers. We started talking numbers, but it does sound like it's an emotional conversation to me.

And I'd start there. That's where I would start with the conversation. I'd say, hey, I've really been thinking about what you said. And numbers, account information aside, rest assured, we can share all that. I just want to understand how long have you guys been married? I want to, you know, how has the last 15 years made you feel? I'm thinking about when we came in this relationship with debt, it felt like you were carrying some shame, I want to know about that. I want to talk about that. Like, start from that

place because then you're going to understand why she says everything else that she says going forward and vice versa. Yeah, I appreciate that. I can do that. You know, because she might be thinking, if she's still carrying that shame, I mean, the thing you got to understand with financial shame is it's not just something I did. It's an identity that I now am. I'm the one who who was bad with money. I'm the one who slowed us down. I'm the one who wrecked everything, right? I don't deserve a vote in this marriage when it comes to money. Yes. And that turns into, when you just heard gabbing with the gals, oh my gosh, he's so controlling. He doesn't let you have a say. And now she's going to have an existential crisis. And so I think this is, this is between you two.

I don't like that it's even gotten this far where it's turned into like a gossip mill and her friends are involved. This is just a marriage issue where we go, hey, we have not been on the same page communicating. We've done well in spite of all of that. We're doing good financially, and I need to bring you into it, and I need you to care so that this doesn't turn into you saying, well, I never, I never knew. You never told me. And so, again, to Jay's point, she needs to be interested and curious, and you need to be forthcoming, and then we need to be aligned. If we played the newlywed game, and I said, hey, what's y'all's net worth? What's your next financial goal? How much are you investing? What kinds of things are you invested in? I want her to have the same answers as you.

yeah yeah and that's that's probably the difference because she i don't think could really answer any of those questions you know and right it's probably because like it feels overwhelming she feels shame she's not the type of person who understands all of this stuff and so what you can do really well is put the cookies on the bottom shelf and just help her understand what you're doing in a non-patronizing way and say we're a team we're building this thing together and i want to make sure you know where we're going so that you're not upset when we get there understood yeah I think you guys will get on the same page I love that this happened for you I think this is going to be a catalyst for a much more open a much more trusting much more transparent relationship

not just with money but the two of you as people um you want to know what I'm going to send you my book what no one tells you about money it's not going to come until later because it's still on pre-order but we're going to write your name down we're going to send it to you and your wife so you can read it because the emotional part of money is the part that nobody talks about and a of times it holds people back like we've seen tim with you and your wife but no longer i'm going to help you fix it well jade a lot of the calls so far this hour are less about the math and the money and more about the emotions behind it absolutely i'm scared because i can't make ends meet and i'm continually going to debt. I have shame because of my past financial mistakes and now I don't trust myself to

even be involved when it comes to money in my marriage. And I love what you talk about in your new book what no one tells you about money because you're finally telling us. The emotional fight is real and you've got to be aware of it. That's right. I mean, we've all been guilty of it. We're looking for, we know there's a problem and we're looking for the fix and there is a solve, right? There's a proven plan. We know the baby steps work if you work it. But we forget to talk about the person in the mirror who has the ability to steer the whole thing off course, right? And it's because our emotions, I mean, just in the last 45 minutes, George, we had to tell somebody to sell their house. We've had to tell people to have difficult relationship with conversations with their

spouse. That is not easy. That is, that has nothing to do with dollars and cents. That has to do with how are you feeling? That has to do with giving up a piece of you that you've worked so hard for. That has to do with dealing with past mistakes. That is all emotional. has nothing to do with the debt snowball. You see what I'm saying? And so you need both. And so that's why I wrote this book because I mean, I...

You've been there. I know how it feels like George to, you know, stand in the mirror and you're just crying because your life is not what you thought it would be at this point. And you wish someone told you.

So here's Jade telling you. So go get the book. It's on pre-order right now. For 2499, you get over 100 bucks and free bonuses like the enhanced audio book, early access to the e-book, instant access to a Jade video,

your financial checkup, and a book exclusive three-week online book club with a live Q&A with Jade. So go check it out, ramesysolutions.com slash store. If you're watching on YouTube or podcast, just click the link in the description. Michael is in Columbia, South Carolina up next. Welcome to the show, Michael. How can we help? Hi, guys. Thanks for taking my call. First off, I want to say I started taking FPU in January of this year, and it has completely changed the way.

I look at my finances has really helped me crush a lot of my debt. the class is highly worth it. I love to hear that. Yeah, in January, when I put all my debts down on paper, a total of 10 credit cards and two vehicle payments, two vehicle notes. I was around $90,000 in debt. I've brought that down to 65-5 in the past 10 months. Good.

I cut up seven of the 10 credit cards. There's three that are still open that have a balance on them, and then the two vehicles are the majority. of that balance. Okay. So my question is, anytime I've got an extra income, I've put it towards the debt snowball. I'm trying to get out of Baby Step 2 as fast as possible. I have a unique situation and I have, my stepson is 19.

Our child is 9. Back in 2019, I had a little bit of extra income. I put it into a 529 account for both of them, about 4,000 each. That has gone up when my 19 year old graduated high. high school in 2024. He went to a local community college totaling about $3,000 for both semesters, which is very affordable. After the semester ended last year, he came to us, said, I'm not interested in college. I don't want to go. So I was told the people that would manage the 529 account, I can just roll his amount into my younger son's amount. My question is,

between their two 529 accounts, it's about $11,500. I have roughly eight to nine years before my youngest even will go to college. I know I get penalized for taking money out of the 529 account for you, if I'm not using it for school. That's right. Is it worth it taking that money out now, getting penalized and putting it towards my debts, and then, you know, building it back up for my younger son after I'm debt-free, or is it better to keep it in those accounts for?

the time being until he goes to school eight, nine years from now, if he goes to school, eight or nine years from now. I have some thoughts in my head about it. Can you tell me more about these cars, though, before I tell you my thoughts? Yeah, I'm sure it's not the Dave Ramsey way, but these were purchased. We moved to South Carolina three years ago, and we drove Hoopty's for a long time. So in 2022, right after we moved, I did end up buying my wife a more reliable vehicle. I bought her a 2020, that had, uh, 22 Hyundai that has about 15,000 left on it. 15,000. What's it worth if you sold it? Just curious, uh, that I don't have a stop my head. I do not know. Do you think you're upside down? No, no, honestly, I, one of the things

when I took FPU, the reason I took it was that I was like, I make good money. My wife makes okay money. So like, how do we just never have money? And when I looked at stuff, I was like, oh, we're paying for this. We're paying for this. So I feel like the last 10 months we've really turned our life around financially where I handle the finances solely. Not that I don't keep my wife involved. It was just when we got together, she's like, I'm not into finances. Did you hear the last call? I did. And I was actually the last thing during it because it's the exact same thing. I tell my wife all of our financial stuff, but she just is not, she doesn't want to pay the bills. She lets me handle that. And that was even before we got married. When we got engaged, she's like, I'm going to have you handle the finances.

Interesting. We'll talk more about that later. Tell us about car number two. Car number two is a vehicle that I bought for myself. It's a it was a 2024 that I bought in a Toyota truck. The vehicle I had before it, I drove literally until the wheel. I don't want to hear about this car because what you're doing is you're qualifying it before you tell us and we don't care. We don't care. I don't care if the engine blew up on the last one and so you went to the dealership and you guys, they suckered you in. We want you to be done. We want you to be get free. And we're not going to let you excuse yourself out of it. We want you to hit your goals. So tell us about car number two, this 2024 truck. Yeah, car number two, I planned on,

at the time, this before FPU, I planned on buying a used vehicle. When I went to the dealership, the used vehicle, this was not that much more expensive than the used vehicle at the time. Tell us the amount, please. Oh, it was, it was 54 out of the $1,000 out the door. Okay. What do you Oh, now. What I have 30 on it. Okay. So you've been paying it down. Yeah.

And I know you're talking about emotional spending. I did get a nice bonus that year, like a very large bonus. So that was like, I'm going to spoil myself with a new vehicle. Instead of paying off the other debt, you're like, you know what? Let's still go into debt. This is, but yeah, this is pre-FPU before I knew all this stuff. Sure. But common sense would say, let's maybe try to get out of the hole before we dig a new one.

It would. And I'm taking my glasses off because. yet again, George, this is all, it is all emotional. All your caveats, all of the things that you were trying to qualify, it's emotional. And I get that. I want you to hear me all day. You were tired. You were tired. You were frustrated. You wanted to feel like your income was being spent on the things that you enjoy, right? Am I wrong? You were tired of driving hoopties. You're a man. You want your wife to feel like she's, you know, that you love her and you want to spoil her a little bit. I see it. I hear it. I have felt it. I understand. And you called in trying to figure out how to get

out of debt faster. True? Yeah. Yeah. So the plan, the, you know, the debt snowball is working for me, but I'm any extra money I'm having come in, I'm trying to throw at that. I just want to get that debt down as fast as possible. What's your income? After tax, I make about seven, 72 a year. That's with your wife? No, no. My wife makes probably about, hers is kind of up in the air

because when we move, she doesn't work full time. So she kind of has the luxury of... What's a normal month? She work full-time? Yes, she's actually in the past two, three months. She has started working more hours.

Okay, because right now we don't have the luxury of working part-time. Correct. We both need to be working full-time plus. So between the two of us, pre-tax, we're probably closer to 120 a year. Okay. And so what, like $7,000 a month, $7,500 a month?

Yeah, just around, yeah, I'd say that's the sweet spot right there. Oh, go ahead, George. I just want to make sure we answer your question. I would not crack open my child's piggy bank to essentially make my truck payment. No. And so I would be selling that truck. And the truth is you're going to pay income tax on that college money. You're going to pay a 10% penalty.

So that $11,000 quickly turns into $7,000. And you're unplugging the growth. Yeah. Which that's going to, you know, double triple by the time your kid's in college. And that's if you do nothing to it. So I don't want to unplug the growth. I don't want to pay all these taxes and penalties while this money's growing tax-free. And for that reason, I would sacrifice for my own life before hurting the kid's future. So that's what I personally would do is sell the truck, work extra. I would not touch the 529. Yeah. I agree. And for other reasons, too, it's too much of your world to have this much tied up in vehicles that are going down in value.

Yeah, that is very true. You've got some nice cars in that driveway. I'd rather see you guys building wealth instead of driving a truck that's going down in value every day. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel, joined by best-selling author Jade Warshaw. Open phones at AAA 825-225. Joseph is in Pittsburgh up next. What's going on, Joseph?

Yes. What's happening? What's going on? How are you? Good. What's your question today? My girlfriend going to be fiancé and I are going to be building a house costing around $700,000, and we want to know if we're way over our heads or if this is actually feasible. Numbers aside, you're in way over your heads. There's not even a ring on the finger, and you're going to sign up for a mortgage and put

your name's on a deed together? No, by the time that the deed is there, there would be a ring on the finger. So this is going to be a new build, and you're just hoping that all the plans work out perfectly? Yes. We do have the ability to live with either of our parents, rent-free. Obviously, that's not ideal, but we're going to have to do that. While the house is being built? Why do we have to do any of this? Let me lay out a different path to you tell me why it doesn't work for you guys.

Why not, get engaged, get married, rent together, save up on your own, and then purchase a house or build when you're financially ready. Yeah, what's the rush? So we would like to start a family early around 2028, 27, and our initial thoughts are renting is putting money into a place that doesn't, build us wealth, so we might as well put it towards a house that's going to be building us wealth. And if we have to live with our parents for a year or two, we're perfectly fine with that because we do have stable jobs that we're able to... How much money do you guys have right now? Right now, we have about $60,000 in savings and then a little bit more in checking. How much do you plan on

putting down on this $700,000 house? So we are looking to put down around between 100 and 130,000 down the house and then her parents are extremely wealthy and they were planning on matching whatever We've ended up putting down So 260? Yes Yes

Okay And why do you need a $700,000 home as newlyweds In Pittsburgh? We are looking to have kids So it's in the suburbs and we're going to be building So that we don't have as many maintenance house issues simply put

we're trying to set ourselves up for the future where we don't have to move we don't have to do all these other things we're just on that path of get a house and live there what's your incomes not a custom build our income we are both around 32 to 35,000 a month

a month yes and that is not including commission so you both are not a thousand three two hundred goodness I was about to say holy smokes so you're like well yeah you guys are making a million dollars okay so you're making like 70 grand and you're how are you going to afford a $5,000 a month mortgage yeah that's what I'm doing because I just we both did the math

that's funny George so we also she has commission that she is an insurance agent so she has commission coming back for her I also own my own company that brings in two to three thousand as well on top of that a month. So you're at 10,000 a month? About that, yeah. So we're already setting ourselves up where half of our take-home pay goes toward the mortgage. Yeah.

You're still at half. Before you were even worse, but even with the 10,000, what I'm seeing on here, 4,500, for the mortgage, if you put down 260 on a $700,000 house, your house poor. Right. right and you're fine with that no we're not fine with that at all we're obviously going to be expanding our our income we're trying to see if this is feasible now because we do have career projections going forward that it won't be anywhere close to that as well as my business and her commission are projected to a double everything you're saying joseph i'm with you i love dreams

I love a good dream. I love to plan. I love goals. But you're setting yourself up in a situation where everything must go as planned for this to work out. And even if it does go as planned, you're still setting yourself up for several years of a situation where your house is 50 percent, where your house poor for several years. So even if everything is perfect, you're still setting that up, which is not good. I truly, truly would love for you to slow down a little bit. on this and say, okay, let's do all of this, but let's just do it in the right order and at the right time. Let's get married. Then if you want to live with your parents, that's your prerogative. I wouldn't do it. But if you want to live with the parents to save more money faster, like that's y'all's

choice if you want to do that. And then save up, make sure when you do buy a house, when it's time, that it's the right percentage of your take home, make it to where you're not house poor. you have this amazing deal where your in-laws are going to match that amount that's awesome milk it for all it's worth and make sure you get to a point where you can get this thing to 25% okay then you're in a situation i'm fine with you guys doing this thing believing that this is going to be the only house you ever buy for the next 20 years if you want to believe that that's okay but let's can we just do it right can we pump the brakes just a little so it's all done in the right time yeah is this a thing where we need to increase our incomes first or a savings and emergency fund kind of deal.

I think it's both and you said that there's a path where both of you guys earn more and it's as you do that, you're saving up more too, right? Because I'm also looking at this on a 15 year fixed. My guess is that you were looking at it on a 30 year. Am I right? I have both in front of me, but yes, I was looking at a 30 year fix. And again, all that, you're doing that because you're trying to go fast. I want to go fast. Why? You have your whole life together.

I get it. I know. How old are you to? So we are both 21. Who told you it's too late? Who told you you have to rush into this or else and you've got to do this by this time and we're going to make this much? I just think there's something else going on here where you're wanting to rush the process and leapfrog into a lifestyle that you just can't afford yet. No, we've been dating for about four years.

going to be graduating this upcoming May from college. I'm working around 50 to 60 hours a week. She's working 30, going to be 40, this upcoming semester. It was just one of those things where we were looking at it. Yes, we were dreaming big, and we saw that we could afford it, and we would still have extra income coming up to back in. It's already artificially propped up with the in-laws money. And so I would go with what you guys can afford,

And if you can get a $400,000 three bedroom, I would do that and have a small mortgage that you can knock out quickly and you can upgrade over time. Because the truth is, you're going to hate your house five years from now for whatever reason and you're going to move. It's okay to move six years from now as your life changes. But we don't need to plan for, well, one day we're going to have five kids. So we might as well get the five bedroom now and just get ahead of it. We don't even have a ring on the finger. So I would just do things in order. And I love how excited you are.

You're a planner. You're futuristic. I have a lot of that in me, but I know I fall flat on my face when I make too many plans and one domino doesn't work out. What if she stays home once you guys have kids and you go, oh my gosh, well, we projected that her income would be 100,000 by now. This totally screws up our plan. So I would move real slow and realize you don't need the lifestyle that her parents have today at 21 years old. It's okay for it to take a while. That's actually healthy. Gabby is in Springfield, Missouri up next.

Welcome to the show, Gabby. How can we help? Hi, guys. I'm grateful to be talking with you. I listen to the show all the time. I also want to shout out my husband and my anniversary is today, so shout out to him, lucky honey. The heart of my question, thank you.

The heart of my question is, in working the debt snowball, should I skip to the next biggest debt with the intention for the military to pay off my student loans. How much of a guarantee is this and how long of a journey is it going to be? Great question. So we are currently in baby step two and working off our debt. We've paid off about 20,000 of our 100,000 so far over the past several months. And we have about 25,000 in student loans. That's the next step in tackling the debt snowball. I serve in the Army National Guard, but I'm a nurse on the civilian side. And my next Army contract begins. in May of 2027.

When signing a new contract, I basically have two options. Either a $10,000 lump sum that's heavily taxed, so it equivalates to about $7,500 or for the government to pay towards my student loans up to $2,000 a month. So in theory, they would pay towards all of it over the course of a three-year contract. So $2,000 a month for the entire time? Yes, correct, for the three-year contract.

But it doesn't even start until 2027. Correct. Yeah. With the last contract that I signed, not all of the options were presented to me. So I took the $10,000 lump sum, and it equilitated to about $7,500. And we put that towards debt, but we got stupid again. So we, you know, accrued more debt. So I don't know approximately how much of that, you know, actually made a dent towards it. But if you do it this way, you're not done until 2030. Correct. Yeah, that's the thing. So if we continued to pay the minimums on student loans, we would still be paying about $6,500 in the time that it would take to get to May of 27 until my contract renews. But mathematically, they would be paying off $25,000 in student loans for the sacrifices, you know, paying the minimums in $6,500. So you have to ask yourself, is the $15,000, because let me just make sure it's a lump sum of $10 or it's pay this off, it'll take until 2030. So you have to ask yourself, is the $15,000 difference, is it worth the next five to six years of your life? Right, yeah.

And that's kind of why I'm conflicted and asking you, because if it's, you know, then paying towards it and that's, you know, basically free money. If this wasn't on the table, would you still sign this contract? Or as part of it just like, well, it's a good benefit. Yeah, I mean, it's an amazing benefit. But, yeah, I would still find the contract for the fact that the reason we have awesome insurance through the military. My husband's a type 1 diabetic and civilian side insurance is crazy expensive for him. What's your household income? Yeah.

So together we make about 182,000. I bring in about 4,800 a month. My husband brings in about 4,000 a month. But I have, I'm working three jobs right now, including my military job, my civilian job. And then I also pick up shifts at the hospital since I'm in our civilian side. Wow. You guys have kids? So picking up extras.

We do, and we have one on the way. That's another piece of the puzzle. Well, that's why I'm going, like, are you going to be able to keep this up for three years? So my civilian job is very flexible with the timing. So, like I'm staying at home with my daughter today, we just have the one and she's two, but we do have one on the way. And I'm just like the kind of person that just, like, grinds and grinds and works. And so, yes, realistically, I probably won't. be able to pick up many shifts at the hospital the later I get into my pregnancy. But yeah,

ideally like after the baby comes and we get all settled and I'll be able to pick up like one shift a week, maybe two. How long do you plan on it taking? So you said there was, let me go back, there was $90,000 of debt. You've already paid off 20, right? Or 100? Did you start with 100? It was more like 120 to start off with. So as it currently stands where we have about 100,000 in debt. So you have 100,000 to go. What else is there other than the 25 in student loans? Sure. Let me break it down. So we've got about 20,000 in consumer debt. That's like credit cards and things. My husband's car, we owe about 11,000. We replaced our HVAC system earlier this year when it went out, which cost a pretty penny. That one's about 11,000. My car is where we got silly

and we got a new car whenever my last car got totaled. We stole about $32,000 on it. I'd already Kelly Blue booked it, and it was appraising for $25,000 to $29,000. And that's a private sale. Okay. Yeah. Is anything else or that was it?

And then the $25,000 in student loans. So it all equilates to about $100,000 right now. What's your projection for paying off this other $75? Like, how long do you guys see this taking you? Yeah. Right now, with our budget, we can, with me picking up extra shifts and getting an extra 2K a month, we have about 3,000 to 3,500 in margin a month, maybe a little bit extra that we can throw at debt. So like this month alone, we paid off three of our smaller debts, which is like a big ego boost, I guess, to keep on going.

So hopefully we can pay off all of our debt in the next 18 months. and I can't remember if the way I calculated it included the $25,000 in student loans or not. Is that what you got, George? I doubt it because there's $75,000, $3,500 a month. That's 21 months. That's without the student loans. Okay. And I think that that was just me being like, let me get super aggressive and pick up an extra shift a week or so.

I just know as a dad of a newborn, it's just life is going to have to slow down a little bit. And so I don't know that you can keep at the same pace in this season. And for those reasons, I feel like you guys could just get aggressive right now and start to really tackle this. I mean, you could delay the student loans and do the contract in May of 27. I don't think that, like, it's going to be on fire. But you guys have such an amazing income that this whole thing could be done in two years. I kind of like that idea of what George is saying. Even on your own.

I just, it's not that big of a, it's not like they're paying off $150,000 of student loan debt. It's a $15,000 swing if you look at it. Yeah. And you guys make $180,000. So in the grand scheme of life, you could do that in three months on your own dime and be done with it. Because if you still, still, if you decide to sign the contract in 2020, boy, 2027, there's still the 10K that they could offer as a lump sum. And when that comes, you can do with it, what the baby, whatever baby step you're on or whatever life calls for that moment. So it's not like, it's not an all or nothing thing per se. There's still money on the table that you can have in 2027 if it feels right to sign that contract. But, I like the freedom of in the openness of just being able to take control of your situation and be done with it when you're ready to be done. Yeah.

Yeah. I would agree. That's what my father-in-law is swaying towards. But, you know, the military personnel that I trust, their advice, they're swaying in my direction, which is like just continue to pay the minimums and let the military pay for your stuff. Yeah. And I get it. It's free money, like, in essence.

But when you factor in your time and your emotion and. and your choice in the matter, that also has a cost in this equation, and we want to not leave that out. Do you guys have savings right now? We are really following the Ramsey plan, so we diminished our savings down to the 1,000. But my husband, you know, with me being pregnant, he's getting a little bit more cautious,

so we're kind of doing Ramsey-ish as a compromise. Well, we'll tell you, let me give you permission to be Ramsey-ish and go just stork mode, is what we call it. So it's okay to pause the debt snowball right now and just stack up cash because we just don't know what's going to happen until baby and mom are home safe. So when is baby due? That's true. June of 26.

Okay, awesome. Yeah, I mean, there could be a great scenario where you got to just stack up a bunch of cash and then you're good. The insurance paid most of it. And now we hit play on the baby steps and we have a big pile of cash to throw at these debts. That's true. So I think that would give you some peace of mind during an already pretty stressful time where you're working multiple jobs, pregnant, trying to handle all of this $100,000 of debt,

it's okay for it to not be at, you know, break-neck pace. Okay, yeah, thank you. I just needed that extra reassurance that everyone tells me to slow down, but I'm just like in that mentality of life is on fire. We need to go while we're young. Go, go, go. Well, it serves you well when it comes to the debt-free journey. That's right.

But, you know, that stress can take a toll on, you and the baby. So I'm just looking out for your health as well during this time. The baby steps, it's a great framework, but life is going to happen. It's okay to hit pause for a moment when you want to be intentional and make sure that you're also protecting your family. So thank you for the call. Thank you for your service, especially coming on the heels of Veterans Day. So this is The Ramsey Show. Are you staying on track with the baby steps? You can take a quick quiz to check your progress

and receive a personalized plan made just for you. Simply head to the show notes and click on the link titled Are You on Track with the Baby Steps and complete the quiz? Aaron is in Charlotte, North Carolina. What's going on, Aaron? Hey, George. Hey, my wife and I are kind of batting around the idea of moving back to Raleigh, North Carolina,

from a small town in South Carolina. Carolina just about two hours south and just kind of curious how we balanced the desire so we got married in October of 21 moved down here in May of 22 and you know wanted to be closer to my wife's family with us being newlyweds and wanting to have kids and we've had some issues with infertility but you know just kind of curious I really have been the one that you know wants to push to go back to that area. I've been a remote and just feeling a bit stir-crazy. And we're in Baby Step 7.

Our income is about $173,000. So just kind of curious what your thoughts are on balancing those desires between my wife wanting to be close to her family versus, you know, wanting to be in person for work and just a little bit more to do and getting back into our old gyms and routines and things of that nature. So it's not a financial conundrum. It's a quality of life for you guys. Yeah, quality of life, and it sort of feels like a financial piece because, you know, going from no mortgage to, you know, maybe renting for a year into our house sales and buying

a more expensive house in that area. You know, so it becomes a little bit of a concern, you know, we've been debt-free fully with the house and everything since last September. so it's a little bit of both. What's the house worth? Right around 360 to 370. Okay, and what would the house cost in the new area? In Raleigh, maybe $450 on the low end, up to $600. Okay, do you guys have any money saved?

For something $450 to $500. Yeah, around $30,000. Okay, and then what's the urgency around this? Is this, we want to make this happen in two months or two years? Yeah, so we've been talking about it. Actually, the new job that I took is based out of that area, but they let me stay remote because we had some uncertainty about wanting to move. That's convenient.

You know, we were actually supposed to move back in May, but they let me stay remote. So are you stir crazy, meaning I want to be in an office? And would that solve this if we got you in office? That's what I'm feeling, yeah. just being around the house all day. Because we can solve that. You can go get an office in your area now.

Yeah, that's less about Raleigh and more about just finding you a job where you can be around people. Yeah, so I was in person. There's pretty much one main employer in this area. I'd have to drive an hour and a half to Charlotte or an hour to Florence. So there's just not really any opportunities we're in a pretty rural area. And I was working whenever we came down here with a local employer. but I left after about two and a half years. They're just poor management and they were doing a lot of fraud

and just wasn't comfortable with it. So I started looking for a new opportunity. Erin, help me understand. I just want to make sure your wife wants to move or your wife is not sure. Unsure. So she does want to be close to family if we are able to have kids. You know, she likes the idea of being able to be near her family here. Is your family in Raleigh?

She does also miss the gym. My family is in that area. Okay. it's not just the gym and creature comforts your family is there so there's family in each spot okay yeah not as much of a concern for me being you're the family you know we're pretty independent does she like your family like are they are you guys yeah really great relationship with her with your family yeah i think so i think it's um i don't think she would be as comfortable like if we had kids with my mom and dad you know just their house can

be a little bit chaotic versus her home or her family is a little bit more put together in that sense. I think that's a fear from her side for sure. Yeah, I go back to what we said before. I'm not sure that Raleigh is, I'm trying to kind of prioritize what you're saying. It sounds like, I feel like I heard you say being in office or, you know, being around people was the number one thing. Then for you, it sounded like the number one thing. Did you say like being able to go back to our gym is did i hear you say that yeah just like lifestyle more to do actually having like a gym to go to and more things to live in a society like restaurants and okay so is it she used always love going to home goods and stuff like that you know so we kind of miss we both miss that

piece for sure got it got it got it um i mean for me the house thing i think if you guys really want to do this it's just a matter of saying okay we make a good salary now can we save up uh a good portion of this to where if we do take out a mortgage is really, really small, and then we're committed to knocking it out pretty quickly. I don't think there's anything wrong with this. It's, you know, if you call Dave, you'd say, well, it's ideal if you did 100% cash, that'd be awesome. But it's not, we're not going to yell at you for taking out a 15 year, knocking it out early. You're going to do that regardless. So I know it feels like you're moving backwards, but if your quality of life increases, that's a win. So my take is,

I would do it, make it an adventure, and you can always undo it. If it's just terrible and Raleigh, and this was not what you thought it was. I do think it's wise to rent. I know it feels like you're throwing away money, but if you just rent for even six months to a year and get your bearings, figure out what area you want to live in, figure out what area has the right schools and how close to family you want to be, all of that is going to play into it. Yeah, and don't buy anything until this old one sells, please. Yeah, you don't want two mortgages on your hands. You won't have a mortgage on this one. And you can still time that. I mean, And it's very much possible and you can make it contingent.

But you're going to be easier if you already have your home sold and now you have all that cash sitting there. You're going to be able to be more nimble and have more negotiating power because those sellers love when someone doesn't have a contingency on a home sale. Yeah. Yeah, my biggest thing was just kind of the weight of, you know, those different values like my wife with being close to her family versus, you know, some of those lifestyle choices. Like I said, it wasn't as big of a concern being your my family.

she's got to be on board like I could move to Tennessee or Georgia you know but it's not a financial thing on our end your wife's just got to be on board with it I think that's more of I think that's the biggest question I hear is is she 100% with you on man we just we got to get out of here we got to go to Raleigh she might be saying things like oh I wish there was a home goods or I wish there's things but does she actually want to move um sit down tonight like you guys go on a date this weekend or do something where you're really like laying this thing out, make sure you're on the same page about it. It's not a financial problem. I can tell you that. It's just you guys deciding. And you guys aren't pregnant yet. And there's hope that you could be in the next few months. What's the timeline there? Yeah, we've been battling infertility for the last two years. So it's still a work in progress there. Yeah. I mean, that's its own journey. And so the question is, do we want to, you know, keep this up for a few more years before we make a big decision to move because, you know, if you guys get pregnant and I hope you do, well, now we have at least some concrete next steps. There's something happening that sort

of starts this, the catalyst. And in the meantime, if you want to get out of the house, get out of the house and go find somewhere to work, maybe even lease a spot that's cheap, somewhere you can rent out a little office to get away. That might be a nice stopgap for now until you guys make that next decision. But good luck, man. There's a lot going on. I don't think there's any bad moves here? The only bad way is if you drag her through this and she's kicking and screaming and you're like, we said this is going to be awesome. So that's the tough part is the relational aspect of just getting aligned on, hey, we said we're doing this. Now we got to make peace with that decision. And it is a big one. But again, it's nothing's fatal here. So I wish you

the best of luck. Quality of life, George, is a big, you know, we can't forget about that. All the time we're asking people to sacrifice to win. And there's a time in place for that. You know you might have a season where you work a job you don't really like to get the paycheck so you can pay off the debt right but the overarching picture the biggest piece of life yeah you should be doing work that you enjoy you should be in a community and in an environment that you that you enjoy if family is close to you yeah like we want that for you quality of life matters and that's why the baby steps matter even more in these cases because if you're a financial peace you got options but if you're in crippling debt and you don't have the income to support it you're out of options and so I love

that they're doing this the right way. Baby Step 7, no mortgage. And they're going, yeah, we could do it either way financially. It's the emotional part we've got to wrestle with. And that part can be even more difficult sometimes. So best of luck to you guys. Open enrollment period for health insurance has just begun. I know you're all celebrating at home. And if OEP sounds like alphabet soup to you, we're going to break it down. Health insurance's open enrollment period is from November 1st through January 15th. Whether you're self-employed and need help navigating the market or you're unhappy with the health insurance your employer provides, health trust financial can walk you through your options.

Not only is health trust financial Ramsey trusted, but there's never any charge to speak with them, and they're committed to finding the plan that's right for you. So feel confident in your health coverage choices by going to ramsysolutions.com slash health-dash-eastern. coverage or just use the link in the description if you're listening on youtube or podcast dan is in dc up next what's going on dan hey guys how are you great how can we help today awesome so um a couple things i'll give you the quick synopsis of it um look and find the best way to invest a million dollars um this hypothetical or real it's real it's actually crazy. So what happened was my wife, she's a, she works for a big box retailer. She makes

about 200. I own my own business. I make about 75. We own a home. It's, we bought it at about 365,000. We owe 260 on it right now, but the interest rate is 3%. And we have a son who's 13. We've got a 529 for him. There's about 30. thousand in it right now. My wife's got a 401k that has about 315,000 in it. She puts in 7% of her pay and the company matches 5%. There's stock options as well with her. And what happened was my business that I owned. We came into a very lucrative deal. We considered it's probably going to be a one-time shot unless something else happens again. But we're considered a one-time shot. It was a $2 million gross business, and we netted just over a million dollars from that.

Wow. From the deal, is it a full buyout? It was not a buyout. No, I still own the company. We just got a very, really awesome opportunity. We took it, and it worked out really well. Okay. So basically, right, we had 130,000 in debt when we've started Ramsey's baby steps about five years ago. And that was just from Carr's student loan credit card debt. So that is paid off. I'm super happy with that. Our house, again, we owe 260.

It's only 3% loan on it right now. But my thought is, you know, we don't. need the million dollars. We're in a different situation, right? My wife makes really good money. We make money. We're fine. Do we put this in different investments? Should I throw a hundred thousand into my kids five to nine and just let it sit there? So that way that is covered. Should I utilize like a personal advisor? We went to a couple different like banks or or folks just in general, you know, they want fairly decent amount of money to manage our money. So personal advisors, they want around 1.2% robo advisors online, they're much cheaper.

I just got done a conversation with the Vanguard and they want 0.3% and they give because of the amount of money that we have available to invest, they'll give us a, you know, a real person. so that's already kind of the winner on it in my mind and we're looking to hopefully retire faster now so we're both 40 and it would be great if we could retire say 55 maybe a little bit earlier if the investment strategies are right yeah but um there are a lot of good things on the table here so you're saying you're going to net a million million net income lands in a savings account. What do you do today? Yep, it's there in the money market. Okay. I can tell you're really good at numbers. You know your stuff, which is very impressive, and that bodes well for you. I would,

here's what I would do personally. I would pay off the mortgage today, and I know you're going to say, well, it's 3%. It's 3. Why would I pay off a 3% mortgage? I would do it for the peace of mind, for the risk factor, and for the fact that you can now invest what was your mortgage payment. And that's going to really free you guys up to retire earlier when you have not. no mortgage left. And then you're still going to have a ton of money left over. So I would put maybe 40 or 50K into that 529 and front load it. Yeah, I would do that. You don't want to overfund it because if you put 100K in there and that money doubles in the next seven years as your kid heads off to college, there could be, you know, $250,000. That might be reasonable for what

college costs seven years from now. So if you wanted to just front load it and then never put another dime in, you'll probably have $200,000 plus $1,000 in there by the time college rolls around. I would also enjoy some of it. So I would do something fun, plan a trip. You guys have no other consumer debt, right? You already paid all that off? We have no other debt. No, just the house. Great. Wow, that's great. So you've got some spending goals. Let's do something fun and enjoy the fruits of our labor. Let's have some giving goals. Let's give generously and do something that blows our mind that we thought we would never be able to do. And then let's have some saving and investing goals. and part of that is

getting rid of the mortgage to then free up money to build wealth because now that really increases your net worth so there's a few things you could do I think all of it's good if you feel comfortable handling the investment side on your own or through Vanguard that's fine you can park it in an index fund for now

and it'll be in a good spot and you know it can start simple you know if you're happy with what you're invested in in your 401ks that's a great place to start like those same funds or similar funds that's a great place to start, especially if they're well diversified and you're split between growth and income and aggressive growth and international and all of that. I feel like that's a great place to start and yeah. I would also max out all of your tax advantage of retirement options first.

And so her 401K, maybe she goes in and ratches it up that contribution through the end of the year to max it out if she hasn't already. I don't think she has based on 7% of her 200,000 salary. So you could do that to start. You could do some. some backdoor Roth IRAs if you guys don't qualify for Roth IRAs because of your income and you can max out an HSA if you have access to a health savings account. So there's a lot of things you can do that are tax advantage. And for that reason, that would be the reason I work with a financial advisor, not because of, well, this one charges this fee, this one charges this fee. You want someone who's actually going to look at your whole financial picture and give you estate

planning, tax strategy, optimal money moves, more than just choosing a fund and taking a commission for it. okay so i would sit down with your wife tonight and just kind of have a little dream date and go here's all the things we could do let's prioritize from this million dollars what's the first thing we're going to do pay off the mortgage what's the next thing we're going to do fund the front load the 529 next thing we're going to do max out the 401ks and backdoor Roths and whatever other options we have then whatever's left i would just park in an index fund for an hour even a high-yield savings account until you know what you want to do next okay all right well i appreciate it yeah

We were looking at maxing out the IRAs, maxing out like an HSA and trying to do that. I have a small 401k that I started the business about five years ago that we took some money out just to just to start it. And so luckily she makes enough that I can play with this business and it worked out. That's so awesome. Way to go. I'm super pumped for you guys. That's fantastic.

And the good news is this extra money that's laying around. on the index fund, that can kind of become a bridge account for you guys to make it from, you know, 55 years old to a 59 and a half to where you can access retirement without penalty. So it's a great strategy if you want to be work optional. My guess is a guy like you is probably going to be like a serial entrepreneur and just jump back into another new exciting thing. Yeah, he seems like that. And so this is really a best case scenario.

Yeah. I love getting a call like this. I know. These are fun calls. It's a fun money. What do I do with a million? Because usually if someone says that, it's a 23-year-old who's a hypothetical. Yeah.

How do I get a million? What do I do with a million? I'm like, well, how much do you have? I got $4,000. I'm like, okay. Well, call us back when you have the money, but I can tell you what I would do with it. This is the real deal. Very, very good.

Exciting. And that's a tough one, Jade, with a 3% mortgage because I hear a lot of these. People are hanging on to these low-interest mortgages going, well, I can make more in a savings account. So why would I? Yeah. And it's so much more than just a math process. problem. It's so much more than arbitrage and spread and leverage. It is risk. It's peace of mind. And talk to people who paid off their mortgage. I haven't talked to someone who said,

dang it, I regret that. I lost my 3% mortgage because you know what my interest rate is on my mortgage? Zero. It doesn't exist. So I'll take that over 3% anything. And they're going to build wealth just fine without the spread. So congratulations, guys. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel flying solo this hour, taking your calls at AAA 825-5-2-25. You call up. I'll try to help you take the right next step for your life and your money. Janine is with us in Newark, New Jersey.

What's going on, Janine? Hi. So there's some discrepancies between how my husband and I think about finances. We've been married. And it'll be 31 years next week. And just today, we were looking at some cash and we were going to pay to have some work done. Anyway, he left me a note saying he left $1,300. He doesn't have any more.

He'd have to go to the bank. And I know for fact that there was $2,200 in an envelope. and so I know he lied and I also had a discussion earlier with him about tithing and the fact that that has not been something that is consistent with him because he is in control of finances and he said that he would he can't talk about the past but he can just do better in the future but I've heard that before because I've had this conversation about the tithing before. So how am I supposed to trust him with, you know, the past history in tithing and the fact that, you know, I believe he lied about the cash that was in the house?

I think we can agree on that. Did you confront him and say there was $2,200? Why is there 13? Where did the $900 go? No, he did say he left some to. for some spending money, and he had set the money in a safe, but I have the code to the safe because he's, you know, for your protection, if you need to get in here to use. And was there $900 in there?

Well, I looked the other day, and it was the $2,200, and then I looked again today after I received that text about the $1,300, and I looked, and I didn't count it, but there was more. It was more than just some spending money. So you think he's clearly lying to you, and do you think there is something going on here, an addiction, an affair, that reason why he's withholding this information? No. I just think it's a controlling, I think it's a controlling, I think it's a controlling thing. It can be both. You can be controlling because you're trying to hide the vice or addiction. Yeah. I don't want you.

to see it. I don't think there is. I just don't understand. Yeah, I just don't understand the deceit. And if you bring it up with him, he just gets defensive and says, well, I'll just try to do better, because that's not good enough. That was regarding the tithing. And so he controls the accounts. I have access to them. And that's why I was able to look through. So what do you mean by control? He takes care of all the bills. He pays all of the bills. He always has. When we first got married, he had money saved. I did not because I was a spender. I had no debt, but I had no savings. So you relegated it to him to handle it. Yeah, and he pretty much, you know, based on the fact that he's a saver, kind of took over the... How much money do you guys have saved?

So right now, so this is, I know this won't be agreed upon, but we have a joint savings. There's like 35 in that. 35,000 or 100? Thousand. But we also inherited some money a few years back. And so between the money that we inherited, his tax deferred, my tax deferred, there's like 1.3 mil in there. okay um and so i've even wanted to pay off the mortgage there's only about 60 or 70,000 left on the mortgage and how old are you too? And um I'm 59 he's mid 60s okay how long has your marriage over these

31 years lacked communication and trust oh most of them okay that's what I was getting at this has been going on a long time, which makes you an accomplice to the crime. Because you've been sitting back allowing it to happen to you. Right. And so there needs to be come to Jesus meeting and some marriage counseling to go, we're not on the same page. We haven't been on the same page. We have money in spite of our lack of alignment, lack of values, lack of just transparency when it comes to money. You can say, I have access to the accounts, but we are not on the same page. And I want to know exactly where this money's going and what else is going on here in order to rebuild trust. And if he can't straight up tell you, if he starts to get nervous and defensive, that's a sign that this marriage

has not been a marriage for a long time. It's been a transactional partnership. Yes. And that's going to be the sad truth that you have to face, is that we sort of played house as two people who live together, but we are miles apart. Yep. Yeah, it's just been, that has been difficult. I've asked, there's no budget to speak of as long as the bills get paid, you know, the credit card gets paid every month, then, you know, we're doing good. And the rest of the money disappears into where he ever, wherever he wants it to go.

Yeah, but it's not really disappearing. it was, you know, private school, tuition, college. So I... Kids are out of the house now? They're all in their 20s, but three out of the four remain. In the house? Mm-hmm. Okay. I think we need to have a come to Jesus to go, hey, we're in the last quarter here of this marriage. I want to make this great. It hasn't been great, and I want to know if

you're on the same team. I think if you come at it attacking, he's just going to get defensive again. But if you come at it and say, listen, I haven't done a great job being involved. And that part's on me. But you have not done a great job communicating where our money's going. And it's left me wondering, is there something else going on? Why can't you be honest with me about where this cash is? Why is it all just smoke and mirrors and defense? And if he can't get there, you definitely need marriage counseling yesterday. I don't know that he's willing to go. Do you think he would do that? That's been a struggle. over the years, me always asking, and it's never helped, so why try it again?

You need to go solo then until he's on board. Would you go by yourself? I am. I'm currently. Okay. And what's come of that? We're just getting into some of the stuff. So, you know, I think I'm at a realization of really, you know, been unhappy for 20 years or more. And do I want to finish the last 20 of my life continuing to be unhappy? So that's my, that's kind of what's been rolling around in my head for the last few days and especially after today. Yeah. Well, it's going to take time and consistency and honesty and transparency, which means we're doing a budget every month. All our accounts are combined. There's no just loose cash, you know, fluttering away every month. I don't know that he's

willing to do that. And at that point, you're going to have to make a hard call. Do I want to continue down this route of misery and lack of trust, or do I need to just create my own last chapter of my life? I can't make that decision for you, but I hope that you guys come to a conclusion and you don't let this drag on for another 20 or 30 years. I'm so sorry, Janine. The Ramsey Show Question of the day is brought to you by Y-Refi. When your private student loans are in default, it's easy to feel ashamed or stuck. But Y-R-R-R-R-R-R-FI won't judge you. They'll help you rebuild, refinance, and regain control.

Visit Y-R-R-R-R-E-F-Y.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey, not available in all states. Today's question comes from Erica in Oregon. We've been listening to the show for about six months. We're in our early 50s and our debt-free. Our net worth is $1.5 million, including our paid-off home. Our income is $275,000 a year. Our HSA and retirement investments are maxed out for the year, but then there's our, quote, tin can. We have about $260,000 in savings accounts and CDs. We both grew up in homes with parents who didn't talk. about finances. Is that too much of a safety net? How much is too much? Great question here. So the

real question is, how much should you have in savings before you go? We should probably move this elsewhere. Now, I do like that it's not literally in a tin can because we've gotten that call before, where it's just cash buried in the backyard, which is at physical risk and it's at risk of just being eaten away by inflation. So if you think about money, let's think about an ice cube, right? If you put an ice cube in the microwave, it's going to melt fast. That's kind of like just keeping a lot of cash on hand because it's not even keeping up with the rate of inflation. Now, let's call it room temperature. You have ice out at room temp if it's sitting on the counter and that's really your CDs, your savings accounts. It's keeping up. It's slowly melting,

but you're at least keeping up. And so what I would rather you do is keep that in the deep. freezer, which is investing your money into the market beyond what you're going to need for an emergency fund. So you guys make $2.75 a year. I would sit down and look at your actual expenses for the year in your early 50s and go, all right, we actually spend $100,000 a year. So six months of that would be $50,000. Now, if you want to go a little bit higher, maybe you guys plan on retiring early and you want to have a few years in case there's a down market or you need to pull from that cash or you have some big upcoming expenses, you can keep that in savings as well. But I think beyond 100,000, we're getting into, like, paranoid apocalyptic territory.

And the truth is, your money is safe. If it's in a bank account that is FDIC insured or NCUA insured, if it's with a credit union, your money is safe. It's not going anywhere. If everybody's money disappeared, we're definitely going to be an apocalyptic state. And that's just not realistic. And even your money in the stock market. If you think your money's going to go to zero in the stock market in an index fund or mutual fund with hundreds of companies, what you're really saying is I think the top 500 companies in America are all going to go to zero,

go completely bankrupt. And that's why I have this money in cash. And again, in that scenario, we have an apocalyptic situation that's beyond money. We're going to be fighting for food and ammo at that point. So how much is too much? Anything beyond six months, unless you have a real strong case, a real strong goal for why you need more than that or why you have a separate savings account, I would rather you park it in the market, making on average 10 to 12% versus 3 or 4%. So, Eric, I hope that helps. Congratulations. You guys have done really well. No debt making 275. You're going to make up for a lot of lost time and retire multimillionaires. So I think this is a nothing burger, but I appreciate the question. Trey is in Atlanta up next. What's

going on, Trey? You with us, Trey? Hey, how you doing? Great. Love your Energy, coming in hot. What's going on? So I got my first job a year ago, and I over a year and a half ago, and I saved $47,000. And my only debt is my stool loan debt, which is $10,000 at a 4% interest rate. Now, my goal is next year to be married, and I want to purchase a multi-unit home to kind of house hack the other side. But I've read Dave Ramsey's book, and he talks about, you know, I was getting out of a debt. And we spoke with multiple financial advisors and they say, hey, since there's only $10,000 at 4% in this rate, don't worry about it. Just keep your cash so you could get that

home. And I wanted to hear your take on that. Well, here's the thing. Financial advisors are incentivized to keep you invested. Would you agree? Yeah, I would agree with that. So if they're managing your 47 and then you take it down to 37 to pay off your debt, they make less money. They weren't my managers. I'm sorry. They were one-off conversations I've had with them seek out advice, but they weren't working with me by no means. Yeah. Same principle applies.

Financial advisors in general. Now, the good ones and the ones that I recommend you work with are the ones that are going to look at your picture holistically. And we tell, you know, the people that we recommend, we're like, hey, we're doing the Ramsey plan here. So we're not going to hang on to a whole bunch of debt in order to invest. That's insane. That's like borrowing money in order to invest. invest, which you wouldn't do. And the truth of the matter is you got the money to pay it off. So why not just pay it off, be free of the payment, and you're completely debt-free at that

point? Yeah, I'll be completely debt-free at that point. And then that 37, is that your emergency fund plus some? That'd be my entire income. Your entire income? Yeah, no, I'm saying all my, yeah, emergency funding, like all my savings, sorry. Got it. Okay. So I would keep three to six months of expenses saved, which is how much for you. Is that 20 grand? 15 grand, 30 grand? My rent is like 800 bucks a month. So probably my living in Christmas, about like $2,000, about $1,500 a month. So it would be somewhere like $7,000 to $8,000. Okay. I would go minimum $10. I would leave $15 in there. And if you want to invest some of the rest, that's great. But I'm a little nervous about your house hacking idea

because I'm scared you felt for like a TikTok that they were like, it's so great, man. They paid the mortgage for you, especially when you got a lady in the mix. You like this lady? You're going to propose to her? Yeah, yeah. I'm going to propose and probably have a courthouse wed next year. Okay. I would let her be a part of this decision because I don't want her stuck being a landlord and you got, you know, the renter downstairs. That's going to make an awkward predicament for a newlywed. And so I'm not a huge fan of the house hacking idea. I would rather see you guys have a primary home that you guys live in. And if you want to do investment properties later on with cash, you can do that. But I would just pump the brakes and go a little slower here

and just follow through with the baby steps, which is let's have a thousand bucks saved. You have that. Let's knock out all of our consumer debt. You're about to do that today. Let's get our emergency fund in place. You're about to do that today because you already have it. Now we can move on to building wealth and building for the future instead of paying for the past. Okay. Do you have a ring already? No, I know. I wanted to do some of engagement counseling. Engagement counseling? Like pre-marital counseling? Yeah, pre-marital counseling. Yeah. Okay, so this thing's headed toward engagement, but we're not quite there yet. Yeah, no, sir. Okay. Well, I would earmark some of that money for a ring, a wedding. I know you wanted to do the courthouse thing, but let's just say she wants a little celebration. You have the money to do that.

Gotcha. So would you say my first step should be getting a pain that's due loan debt off first? Yeah, today. All right. Have you ever been debt free in your adult life? No, this be my first time. I'm 26. Dude, imagine not having to think about making a debt payment. Yeah, it will be nice. And that's a piece of mind is what I've been wanting. But after talking to those advisors, they were, you know, so I was like, dang. Well, because here's what they're saying, man, you could make more in the market.

You should just do that and leave the loan sitting there. it's fine. You'll get to it. And the truth is, when you are looking at it through that lens, what you're really saying is, I am willing to borrow $10,000 in student loan debt in order to invest in the market. So when you look at it that way, you go, no, who would do that? That's insane. And so regardless of the interest rate, I'm telling you to pay it off. Gotcha. Okay. All right, I'm going to get on that. If you regret it, you can go get more debt later, but I hope you don't, Tray.

because you've got a bright future ahead of you. There is a lady on the line. She wants to marry you, hopefully. Your future's too bright to stay in debt or go further into debt. Yes, sir. Thank you so much. Absolutely. And I'm going to gift you something, Trey.

It's called Financial Peace University. I think it's some of the best premarital counseling out there when it comes to finances. Because if you guys get aligned with your values, your goals, the principles, you both agree, hey, the kind of people we want to be is the people who don't owe people money. That's really going to set you guys up for success. We want to have money in the bank, not owe people money, build wealth for the future, and that's honestly one of the big reasons people get divorced is money fights and money problems. And you're about to avoid that. And I think it's the most attractive thing a man can be is debt free with money in the bank, you know? Because even if you got a five in the face, if you got 10K in the bank, it goes a long way, my man. Ask me how I know. This is The Ramsey Show. All right. about 4,000 messages about the 50-year mortgage that was announced via Truth Social from President Trump. So I thought, I guess we need to talk about it. Let's talk about the 50-year elephant in the

room, shall we? So over the weekend, here's the actual truth of what happened. President Trump shared a photo that's now making headlines, and it showed FDR, the president who helped create the 30-year mortgage after World War II, next to Trump, and it said great presidents as the headline. And his modern version was the 50-year mortgage under Trump's face. And the idea reportedly came from a meeting at Marlago where Bill Pulte, who's now the head of the federal housing finance agency, presented the proposal on a poster board. So he made a little arts and crafts. He shows it to the president. He liked it enough to post it on truth social. And now the FHFA says they're, quote, working on it. That's all it takes, guys. You bring him a poster board with a nice

picture. He goes, let's do that. That sounds fun. And what am I having? for dessert at Mar-a-Lago. So the stated goal here is to make housing more affordable, in quotes. That's not what this does. The 50-year mortgage does not make homes cheaper. In fact, it makes the housing crisis into a dumpster fire. And let's walk through the reasons why this is. Number one, the math doesn't work here. Let's look at the numbers that have been thrown out there. We're going to take a $450,000 home as the example. A 30-year mortgage at 6.25 percent, about $2,700 a month total interest paid over those 30 years, $547,000. Not great, remember, on a $450,000 home. But now let's look at a 50-year mortgage. And to keep it apples to apples, I'll even give you

the same exact interest rate at 6.25, which is not going to happen because this is a much riskier loan, so banks are going to charge more for it. But let's just say it's the same interest rate. Well, your payment now becomes $24.50 a month. So you're saving $300 at best with this loan. Total interest, this is the kicker, over a million dollars in interest alone on a $450,000 house. Do you understand how insane that is? Now, in reality, lenders would charge that higher rate on a 50 year because it's riskier, at least 1% more, which means the savings aren't even going to be there in your monthly payment, and the interest is going to be even more than that million. So that 7.25%, let's keep it there. That's $2,600 versus $2,000.

$2,700. So whoopty-do, you saved $100 a month, all to pay $1.18 million in interest for that home. That is insane. That is not affordability. It's a financial illusion that's going to keep people broke until they die. Because we know the average first-time homebuyer is now 40 years old. So let's walk this out. You're going to die statistically before you pay off your mortgage. So I guess generational wealth is going to turn into generational debt. That's what you're doing if you take this on. reason number two you are not building equity you're just renting from the bank instead of your landlord so here's what really happens under the hood you see mortgage are front loaded with interest so when you look at your amortization schedule that's the nerdy sheet that shows you how much is going to principal

versus interest at first every single dollar almost every dollar is going to the bank not toward your house so let's share some examples here on a 15 year mortgage you start paying more principal than interest around year eight that's when you sort of tip the scales on a third 30 year takes about 12 years. On a 50-year mortgage, it takes almost 40 years before you're paying more of your payment to the principal than to interest, which means the average homeowner keeps their home for about 11 years and they're moving on. By 11 years in, you've paid that $450,000 mortgage down to about $380,000. Do you not see how insane that is? You have built almost no equity in almost a decade by taking on this kind of loan. So that's problem number two.

Problem number three, it makes the housing crisis worse, not better. You see, stretching debt doesn't make homes more affordable. It's just going to make home prices go up. And we see this with the car market, right? We're introducing seven-year car loans. Well, what happens? Everyone just goes, cool, we'll just keep raising the prices. College tuition.

We saw something very similar happen because they realized people would just take on a bunch of debt and the government was going to back it. That's what's going to happen with these mortgages. So when buyers can afford a slightly higher payment, builders and sellers are going to respond by raising prices. because now we have more demand. It's a classic supply and demand curve here. So that's problem number three. Problem number four, it's going to add massive risk for homeowners. Here's why. Borrowers would pay roughly 400 to 500 grand more in interest on that medium-priced home

if it's stretched out from 30 to 50 years. And when it takes three to four decades just to pay down half of your principal, even a small decline in housing values could wipe out all of your equity. That is frightening. And that's not including just closing costs and realtor fees that would eat into what you would have built up in equity. That's frightening. So this is a debt treadmill where you never catch up. If you move to the next home a decade later, you're just going to make a lateral move. You've built almost no equity. Number five, it is a legal and financial nightmare. To make this work, regulators would have to rewrite rules and convince investors to buy these ultra-long loans. And I don't know if you know how banks and investors work. They want money like sooner rather than later.

So what they're going to do to compensate is higher rates, more baked in fees, because it's already a fragile system as it is. So this is a financial time bomb. Which brings us to problem number six, this doesn't benefit the American people at all. It only benefits banks, builders, and Wall Street. Here's why. Let's be clear about who wins here. Banks get 20 extra years of guaranteed interest, which means if they actually play this out, they're going to get double what they would have in that 30-year mortgage. Then you've got builders. Builders. get to sell higher priced homes because monthly payments look more affordable. And then you've got investors who get 50 years of cash flow from your paycheck on Wall Street. So the only loser in this

setup is you, the homeowner. And there's been a lot of people, a lot of backlash toward this, even from the Republican Party. Marjorie Taylor Green even said that. It rewards the banks, mortgage lenders, and home builders while people pay far more in interest over time and die before they ever pay off their home. This is coming from a staunch Republican. So this is a system designed to keep you in debt for life. Now, the proponents of this, and this is what I've seen on social media, when I posted about it, when everyone posts about it, well, people would just refinance. Well, people would just pay extra, and so it's no big deal. Listen, I don't know if you've met humans, but we are emotional creatures. And the stats show that a very, very small percentage

of people's, about 7% or 9% systematically actually pay extra on their mortgage. So left to their own devices, humans are just going to do the bare minimum. They're going to just make the minimum payment. And by the way, people who are going to take on a 50-year mortgage probably are going to do it with very little down and very little margin in their budget. This is a desperate move that's targeted at broke people. So if you do it the Ramsey way, you're going to go for a 15-year, which means you're going to pay a fraction of that interest, likely about little over six figures,

160 grand in interest instead of a million in interest. Oh, and by the way, you're debt-free in 15 years. So even if you took on that home at 40, you're debt-free. 555 instead of 90 years old, maybe making your last payment from the old folks home if you're lucky, if the Lord willing in the creek don't rise. And this is what I love. The old French word mortgage literally means death pledge. And America has finally, we've taken this on. And we're saying, you know what, make it a death pledge literally, please. Because for 50 years, I'm deciding I'm going to be a slave to the lender. Proverbs says that.

was 227, the borrower to slave to the lender, the rich rule over the poor. So is this the fix for housing? No. Do I believe that there could be a better economic climate and economy that could be more beneficial to the American people? Absolutely. We could build more homes to increase supply. We can try to stop corporations and hedge funds from buying up all the single family homes. We could maybe let homeowners transfer their low mortgage interest rate when they move, which would unlock some inventory because right now people are sitting with golden handcuffs. We could even raise the capital gains exclusion so that long-term owners can sell without losing equity to taxes. That would be a cool solution. But here's the thing. I have very little faith

in any policy taking place that's going to make it easier for the American people to buy a home. In fact, as we've seen, it's only going to become harder. So what's my take on this? Don't wait on a policy to fix your life, to allow you to become a homeowner. Bet on yourself instead of the government, instead of on a housing market that's a moving goalpost. So what's the real way? You get out of debt. You build up an emergency fund and you get a down payment saved up and that might go slow. It might be 40 years old before you can take on that home. But when you do it the Ramsey way and it's no more than a quarter of your take home pay, you're not going to be an alert. You're not going to be paying off that mortgage until you're in the old folks home. You're going to be debt-free owning that home outright instead of it owning you, which is exactly what this 50-year loan is designed to do. And by the way, what did Trump think about it? He said, it's not that of a deal. You don't pay our bills, Mr. President. It is a big deal to lock someone in a death pledge for the rest of their life. So to that, I say no thank you, Mr. President. I will hard pass on a 50-year loan.

Our scripture of the day, 1. Peter 315. But in your hearts, revere Christ as Lord. Always be prepared to give an answer to everyone who asks you to give the reason for the hope that you have. But do this with gentleness and respect. Theodore Roosevelt said there is only one quality worse than hardness of heart and that is softness of head. That'll preach. That's a timeless one right there. Well guys, the all new every dollar is here. You've heard us mention it on the show as we help people try to find that margin to pay off debt. And now it's way more than just a world-class budgeting app. There's a ton of advanced features to help you make faster progress with your money. The average person finds thousands in margin in just the first

15 minutes of using it. So start every dollar for free today. You can get it in the app store or Google Play. Sheila is in Cincinnati up next. What's going on, Sheila? Hi, I was calling to find out some information suggestions about investing a little bit of money for some income. Okay. So my husband and I followed the Dave Ramsey plan for years. And we were in a good situation and looking forward to retirement, tracking a couple, 30 years down the road.

and he unexpectedly passed away in July. Oh, my goodness. I'm so sorry. So I'm trying to figure out suddenly all-income stopped. His disability stopped, his Social Security stopped. I won't see that again for another four years. Wow. So it was 150,000 insurance policy, life insurance policy.

and I'm trying to figure out what's the best thing to do with that to generate a little bit of income to make up for the loss of income. Yeah, what was he making? He just varied from year to year. But this year, he was, well, last year, because he didn't work at all this year. Last year he was on track to probably break 100.

thousand. Okay. What are your monthly expenses right now? Let's just talk about the right next thing to do, which is cover your four walls, your food, your utilities, your housing, and transportation. So what does all of that cost you? $800. We're debt-free. We don't have any car payment or house payment or anything. Amazing. $800 just pays the bills and buys the food. That puts food on the table, keeps the lights on. Does that pay insurance bills as well? Yeah, these life insurance and property taxes. Okay, so let's call it $1,000. I'm sorry, car insurance, house insurance.

Okay, but $1,000 all in gets your expenses covered for the month. Yeah. So we're really looking at we need $12,000 a year right now just to survive? Yeah, maybe. Okay. Well, I'll share some math with you, and we can try to solve this. problem together. So if you just parked that $150,000 in a high-yield savings account, you would make about $5,000 or $6,000 a year. The bank right now told me to put it in a money market, so that's just

where it is right now. That's probably a similar rate. I would check on the rate, but right now you should be at about 3.5% on the savings account rates, especially high-yield money market. So check the rate there. That's a good starting point, but you might need to invest this money if you want to make it last for a long time. Right. Because as you start to, that I don't understand. Yeah, as you start to withdraw the money, it's going to deplete it. And so what is the next income point that you're going to hit? Is that Social Security in four years? There will be a pension that will start a little bit. Okay, what's that amount? It should start sometime this month. Should be about 2000. Amazing. So this month, you will have $2,000 coming in? Right. So that leaves me from what we had

calculated before he was going to retire, and what we looked to think that we would need like $4,000 a month to live on after retirement. And that's what he was working towards. So $4,000 was the goal for both of you to have a comfortable retirement. Right. Okay. So now I'm about $2,000 short on that yes but that was for both of you in this you know kind of cushy retirement dream right so we'll need to sort of have a new picture of what the future looks like for Sheila in this this chapter as you are still grieving I mean it's only been a few months so I can't imagine the fog that you're in right now but as that fog starts to clear and as you figure out the right next steps you're gonna have to figure out what those expenses really look like for you to not just survive but also to

enjoy life because you're still young you got a lot of life ahead of you how old are you 56 okay and then when will social security kick in when i'm 60 which is be four years and that's taking a cut it doesn't fully come in until i'm 67 sure yeah and you can delay that a little bit maybe you split the difference and take it at 62 you know take it when you need it but if you don't need it you can let it ride a little bit longer and then the other piece of this this 150 000 you could invest it. And if you invest it, on average, you could see anywhere from 9, 10, 11, even 12% return on average over a long period of time over the next 20 or 30 years. That's what I need to know is where and how does one invest money to be able to pull off of

it for living. Well, what you want to focus on are mutual funds and index funds. These are basically giant groups of stocks and companies. So instead of putting all of your eggs in one basket. It's in a basket that has 200 different companies that are all weighted. And so that's what I would recommend. And if you want help with that, I would connect with a SmartVestor Pro. You can do that at Ramsey Solutions.com. Click on SmartVestor Pro. And they'll guide you through this process because we always tell people, only invest in things you understand, and you stay in the driver's seat when it comes to your investments. So you're not going to relinquish control. You're going to stay in control and actually learn, okay, here's what my money is doing. Here's where it's going. Here's what the

return is. And if you do that, this 150 grand could give you about 10 or 15 grand a year. So it's not going to be like a life-changing amount of money, but it could help float the gap that you're looking for. It could give you an extra, let's say, thousand bucks a month on average on top of your two from the pension. Now, now we're working with $3,000 and our expenses are one. Could you live a decent life in retirement off of that? I don't know. Are you working full-time currently? No.

Are you able to work? Maybe down the road. Okay. As you enter the new year, I would also look at what opportunities you have to do some meaningful work. Number one, because it will give you some purpose in this next season and allow you to continue this legacy. And number two, because truthfully, the money just isn't there. We need to create some income to fund the gap right now, to invest, to invest, to, put aside. Do you have anything in savings outside of the 150? Yeah. That's what I've been

living off of the past three months. How much is in there now? Outside of the money market, about six, seven thousand now. Okay. So that's quickly getting depleted. And I would love for you to keep that as an emergency fund to cover you when life inevitably happens. Now, obviously you've been in a state of grief, and so I have no shame, no guilt for you using this money to fund your life right now as you navigate this process, but I would love for you to keep that emergency fund set aside for those emergencies down the line. And that means maybe we get to work, we invest this money, we get that pension coming in, and then we get on a budget. Have you created a budget on your own before?

Yes, I'm following the budget. Okay. Do you have every dollar? Yeah. Great. I'm going to cover it for the next year for you. So hang on the line and Christian will pick up. We'll make sure to gift that to you because it'll connect to your bank account and make it really easy to track your transactions, plus a lot of other cool features to help you create margin. And you might see that, hey, this gave me four ideas I can do to create an extra $300 of margin. And in your world, that could be life-changing. Okay. Are you getting any counseling to help you heal and move through this?

Um, I, a little bit. Do you have anybody in your, in your corner, community around you? No, we do. Okay. Good. Well, Sheila, I'm so sorry. This is not the picture anybody has as they head into their retirement phase. I'm so sorry for your loss.

But I hope the numbers encourage you that you can not only survive, but I hope that soon you can thrive in this next chapter. That puts this hour of the Ramsey Show in the books. Remember, there's ultimately only one way to find you. financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.