The Ramsey Show - App - How Can We Budget More Effectively? (Hour 1)

Episode Date: April 2, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's The Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. My co-host today here on the air, on The Dave Ramsey Show, Rachel Cruz, Ramsey personality, number one best-selling author, also my daughter. We'll be taking your calls about your life and your money. It's a free call, and some say the advice is worth exactly what you pay for it. Open phones at 888-825-5225.

That's 888-825-5225. Chris starts us off in Columbia, South Carolina. Hi, Chris. Welcome to the Dave Ramsey Show. Hi, Dave. Hi, Rachel. How are you? Great.

How can we help? Well, I have two kids, age 9 and 7, and I'm interested in starting a custodial brokerage account for them. Would that be something you recommend? Well, any time an account is open in a kid's name, it is a custodial brokerage account for them. Would that be something you recommend? Well, anytime an account is open in a kid's name, it is a custodial account because until you're 18, you cannot legally enter into a contract in the United States. And so a parent or someone does it on behalf of a child, and that is a custodial account. So if you open up a savings account, if you open up a mutual fund, if you open up a 529,

if you open up anything in the kid's name, it is a custodial account. That's the nature of it, okay? Now, having said that, why do you want a brokerage account for a kid? Well, we have savings accounts for them, but every other day they want me to go to the bank and draw money so they can spend it. I figure in a brokerage account, they can't get access at a brokerage account they can't get access to it. Well, they can't get access to it anyway unless you let them. Yeah, I guess so.

I guess that's the point. But they're all, because they go to the bank to put money in, and they always want to go and buy something. And they just bug me about it. It's not a bugging, but, you know, they just ask about it. And I figure if I put it at a brokerage account, that's probably at least a growing interest rate, I guess. Yeah, but I mean, the convenience aspect is what's bothering you

because you're having to go to the bank to get the money out. Where they're 11 and 9, is that what you said? They're 9 and 7. 9 and 7, so even younger. So, yeah, I mean, at this, this is like basic level teaching kids about money. I mean, all they really need to be doing is giving a little, saving a little, spending a little. I mean, it's not going to be anything insane. And so, I mean, not even having, you could put some of their savings in the bank,

and it's more long-term for them, like, hey, in the next month or two, if we want to save up and get something. But I would just keep cash at the house at that young of age, depending on how much it is. I mean, if they're getting like big chunks of like birthday money or Christmas money, yeah, you can put it in the account, the savings account. But anything else I would have at home, because especially for your, you know, especially your seven-year-old, but your nine-year-old as well, like when they have cash at home.

They could do the envelopes. They could have their own envelope, right? Yes, or the banks. That's what I was thinking about. Yeah. Yeah. So let's do this. Or the bank. They could have their own envelope, right? Yes, or the banks is what I was thinking about. Yeah. Yeah. So let's do this.

Let us give you the Junior's Adventure Pack, which is the Financial Peace Junior for teaching kids how to, little kids how to handle money. Rachel and I wrote, and we'll also give you a copy of Smart Money, Smart Kids, which is what Rachel and I wrote about parents teaching their kids about money, because that's really what this question comes down to. Okay? Now, what we teach is the kids need to learn four things and rachel touched on this they need to learn to work which

is where money comes from they need to learn to give to spend wisely and under the parents direction and uh and of course to save and so the difference is instead of opening a brokerage account to keep them from bugging you i will put them on a system that says kids my job is to help you as your dad learn how to handle money so when you're old you're not one of those old broke people okay like all our freaking friends right so uh you know and so then they get when our kids would earn some money, in quotes, for doing a chore, like feeding the dog or something really difficult like that, which you hardly break a sweat doing, right? But they would earn money for doing a chore. Then we would divide the chore money.

We called it commissions. You're not on allowance. You're on commissions. You're not, you work, you get paid. You don't work, you don't get paid. Then we would divide that up into those three envelopes. And the kit I'm going to send you has three envelopes. It has a giving envelope, a saving envelope, and a spending envelope.

And so if they get ready to say, I want to spend some money, do you have it in your spending envelope? Because we put some in there from when you worked. And then you can have the discussion of, oh, there's not enough money. Well, you're going to have to wait and work some more. Or you can have the discussion of, you can buy that cheap one if you want to buy it, but it'll be broken by Friday. Or you can wait a little bit and buy a good one that will last you, and you can pass it down to your grandkids. And we had lots of value discussions about purchases. Rachel generally just bought it.

Daniel was very purposeful and goal-driven about his purchases. Rachel generally just bought it. Daniel was very purposeful and goal-driven about his purchases. And Denise was, what, compliant? I don't know. Didn't even spend money. Yeah, she didn't spend money. She's a saver. But you need to make kids, coach kids in all four areas. Not working is not an option.

Not being generous is not an option. Not working is not an option. Not being generous is not an option. Not saving is not an option. Not spending money wisely is not an option. So you can't be only saving. Or sometimes sweet little kids, they want to give all their money away. Well, no, I don't want to teach you that way. I want to encourage you in your generosity, your outlandish generosity, but you always should have some saved,

and you should always have some to spend as well. Yeah, because, I mean, as an adult, primarily, those are the three things you do with money. I mean, obviously, your saving can be more complicated and investing and all that, but basically, that's what you do with money. You give, save, and spend, and so teaching those boundaries is huge. And then, I mean, and Chris, if they're not doing, like, just work around the house, simple stuff, earning that money,

I mean, it's, and again, it's very age appropriate. But man, the award is amazing. Amelia, I'll even tell you this. Papa Dave, you'll be so proud. Okay, I'm ready. She did some chores. She what? She did some chores.

What did she do? She actually swept the kitchen. I didn't even ask her to. But she was like, Mom, can I sweep to earn a dollar? I was like, sure, let's just do it, because we have like ten bucks and ones in our little junk drawer, so that's what I gave it to her. So she did that, carried plates to the sink. I mean,

she just turned five, so it's like, it's lowball stuff. Well, you don't send the five-year-old to the salt mines. No, so you do. So we did six, and we went on Amazon. She bought a Polly Pocket for $6.99. I paid the tax. I was like, you know what? I'm going to be a graceful mother and just your five.

So I was like I'll pay the tax because she saw the six on Amazon. She was like it's six mom it's six and I have six dollars. And I was like yeah you're great. Yes that's great. But then she got very confused that the money was still there even though the Polly Pocket arrived. But I took her money and so the whole process of buying online is very complicated

for kids. They don't quite understand it. So it probably would have been a little bit more beneficial to put on the masks and go to Target and buy, but I was a little too lazy. So I was like, we're just going to Amazon it and have to walk through. But hey, that's a modern day. Still, you did it. No.

You did it. Because what most parents do is nothing. Well, and the story wasn't about me doing it, but what I was going to say is the effects of what happened. She made me take a video of her to send it to a girl that babysits for us. She was like, tell Maggie that I bought my own Polly Pocket. I was like, okay, so we did it. The dignity. She was, oh, it was amazing.

She just could not, I mean, talked about it for three days. So anyways, it works. Anyone who works and earns gains dignity as well as money it's true not working does not give you dignity and so it's good that amelia is sweeping the kitchen she actually did pretty good hey i bet i bet she would yeah all right so we've got a copy of smart money smart kids and an adventure pack to send from junior to junior's teaching age, Financial Peace Junior, to teach the kids how to do that stuff, to work, to give, to save, and to spend wisely. This is The Ramsey Show. You've got a lot on your plate.

A job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. That's chministries.org slash budget. Rachel Cruz, Ramsey personality, number one best-selling author.

My daughter is my co-host this hour. Open phones at 888-825-5225. Ann is in Austin, Texas. Hi, Ann. How are you? Hi, I'm doing well. It is a pleasure to speak with you both today. Thank you for taking my call. Our pleasure. How can we help?

Well, my husband and I, we owe about $197,000 on our home. We should have enough to pay it off in March of next year, but there's a good 60-75% chance that we will move once our kids get out of elementary school, which is in about three and a half to four years. So I'm wondering, do we go ahead and pay off our current home or do we sit on that money until we figure out whether or not we're going to move in the next three to four years? Okay. Do you guys have, do you have your fully funded emergency fund in place, Ann? Yes. Okay. Well, if I were you guys. 36,000. Okay. Yeah. So you'll be moving in four to five years, but you can pay it off next year. Correct.

Yeah, I'd go ahead and pay it off. And then as you guys start walking down the process of realizing, yeah, we're probably going to want to move once the kids are out of elementary school, and then back down and say, okay, you know, we'll save up some cash for a down payment on the home. But having a paid-for house at this point in your life. Yeah. Feels really good. Yeah, if you have the ability to do it because something there could be something happen like a pandemic or something right and then you'd have like a paid-for house and you wouldn't be worried

about anything so yeah it's a different world to sit in a different kind of peace when your house is paid for that you have um and and you know it's not like you're losing the money when you sell it they'll give you a check for all of it right and your rate of return is actually the mortgage interest rate which is higher than they pay on cds yes that's very true yeah so you're actually it's actually technically financially correct too but this is more about um just having it paid for being done with it the money doesn't accidentally go and buy a lake house or a bass boat or something it's stuck in the house you can't get it out and it's a it's a really really good move on a lot of fronts to go

ahead and knock it out so i'd knock it out and and certainly the house will sell when you get ready to leave and uh you'll get all your money out, and you'll be just fine. Thanks for the call. Open phones at 888-825-5225. Cynthia's in Philadelphia. Hi, Cynthia. How are you? Hi, Dave.

Oh, my God. I can't believe I'm actually speaking with you. You too. I'm 60 years old, and to be honest, I'm not sure if I'll ever be able to retire. I, I was working a second job, but last year I had some health issues. So I'm not able to work a second job and or like 400 a month. And it's going to take me until next year, end of next year, just to save my emergency fund, which should be about 9,300. I just don't know what else to do. And I'm doing the budget. I just don't know what else to do. What do you make? I make $7,600. I bring home like $1,900 of pay.

I live in Philadelphia, so they take out the municipality taxes. I'm sorry, you make $76,000 a year? $7,600 a month? No, $1,900 a day. What was the 76? That's a year. $76,900 a day. What was the 76? That's a year. $76,000 a year. But it's $1,900 a paycheck, which is, what, $3,800 a month?

I have a mortgage. Yeah, that's, like, way off. That's $46,000 a year. You don't make 76 and have 30 in taxes. I live in Philadelphia. I know you live in philadelphia even philadelphia is not that communist well i pay okay we i have a pension they so they take out money for your pension i have money go to a disability and i pay my health insurance and um And, um... Oh, no, Cynthia. And her phone bill.

Oh, my gosh. Lost her. Oh, no. Okay, well, keep going, though. If other people are listening that are 60... Well, $4,000 a month, 1,900 times 2, is $48 a year. Okay? And $48 a year is not take-home pay from a $76,000 gross.

Unless she's... Oh, good. You got her back. That was quick. Good. Are you there, Cynthia? Cynthia. Pick her up again.

We'll just keep working on this until we get it. Hey, are you there? I'm here. Okay. Your call dropped out. Sorry. Okay, so anyway, we need to really dig into this take-home pay because how much is your health insurance? It's like $20 a pay.

Okay, how much is your pension deduction? How much are they taking out for the pension? It's like $170, $173. Okay, I haven't found it yet. I need something that's over a thousand i'm telling you work with me let me give you a couple numbers okay your take-home pay is under 48 000 you're said your pay is $76,000. That means we have $30,000 missing. $2,500 a month. $2,500 a month.

So far, you gave me about $300 worth of stuff. I still can't find the $2,000. But taxes, Cynthia, is what you're saying. $76,000. Are you getting a huge tax refund? Last year, I got, it was like $900. Okay. Not it either.

Your federal income taxes aren't that high. Philadelphia does have some weird taxes, but they should not amount to 30% of your income. As a matter of fact, I know they don't, okay? And so I'll tell you what. I'm going to have you get with one of our financial coaches that have been through the training because the numbers aren't adding up, and you really need to get to the bottom of it. You need to find out where your money's going. And I can't find it.

I haven't found it in this conversation yet. So you need to get to the bottom of that because someone that's making $76,000 should be able to save a lot more than $400 a month when you don't have any debt anymore. There ought to be wiggle room. So, Rachel, the ratio that we always use is three to six months of expenses. And so your expenses, you know, taking her to $9,300, she said, was her ideal emergency fund. That's not that far off.

But the point being 9,300 as a percentage of your expenses are somewhat related to your income. Sure, sure. And so if you have a goal of a $10,000 emergency fund and you make $76,000, you should be able to do that in six to nine months, somewhere in there, if you don't have any payments but a house payment. And it shouldn't be $400. In other words, it ought to be $1,000. months somewhere in there right if you don't have any payments but a house payment and that's where it shouldn't be four hundred dollars in other words i'll be a thousand dollars and then you

be there very quickly and so you very seldom do you look at a situation you or i homework sitting down with someone's budget where they cannot do their baby step three in um six to nine months six months right correct yep because it's it is three to six months of expenses, and it's somewhat related to your income, even though your expenses should be lower than your income. It's not three to six months of your income, but it is related enough that it ends up being a short period of time. Yes. But for Cynthia, six years old, she doesn't think she'll be able to retire.

She's having a tough time funding that baby step three. And this is where we say you're still gazelle intense. As you're paying off debt, you have that mentality of sacrifice and extra jobs,

doing it all. That goes in and bleeds into baby step three. And so even though, I know she said COVID took away that second job, but any other income you can bring in

just to beef this up, walking alongside, figuring out where the money's going. But let's pretend that we found $1,500 of the missing $2,500 a minute ago. We get into it and we find that. That's $18,000 a year. Okay? That finishes her emergency fund in six months.

Ta-da. Almost like I've done this before. And then you start saving $1,500 a month, $18,000 a year. You're not going to retire broke. If you work seven more years, that's going to be $150,000 to $200,000 plus growth. So, you know, you're going to be okay. But you've got to find the missing money. That's what causes you.

The point of getting out of debt is not to be out of debt. It is. But the big point about being out of debt is not to be out of debt. It is. But the big point about being out of debt is then you use what you used to pay the stupid bank so you become rich or wealthy or more secure or more generous or all of the above. This is The Ramsey Show. We'll be right back. Number one best-selling author a couple times over, Ramsey personality, and my daughter, Rachel Cruz, is my co-host today on The Ramsey Show, answering your questions about your life and your money. Open phones at 888-825-5225. Eric's in New York.

Hi, Eric. Welcome to the show. Hi, Dave. Hi, Rachel. Thank you so much for taking my call. Sure. What's up? All right.

So I'm 21 years old. I'm debt-free, and I have $13,000 in the bank. And I want to know, should I be investing this money at this point, or should I just hold on to it for now as an emergency fund? And if I should be investing, what should I invest it into, and how much? Dude, are you engaged? No. Because you're a fairly rare find.

You're what's known as an eligible bachelor. You actually know how to work, make money, save money, and not be in debt to your freaking eyeballs. You're an awesome young man. Thank you. I thought you were about to give him, like, love advice or something else. No, I don't give him love advice. I'm an old fart where is this going yeah so eric

you're what we teach is after paying off all of your debt which you've done obviously you don't have debt is to get that emergency fund in place you could you could square away that 13 grand is it 13 000 is that what you said 21 no he said 13 though 13, though. 13, right, Eric? I'm 21 years old and I have $13,000. Yes, that's it. Perfect. I got it backwards. OK, so for that 13, that could be your emergency fund.

So being in New York, obviously your expenses are extremely high. You know, I really don't have that many expenses right now, though, because I'm at home and i i'm going to college but i was very fortunate my grandparents were able to um save up and pay for that for me okay so i don't i i okay i would not invest it i would just hold the 13 as an insurance policy to ensure you finish school with no debt i know your grandparents got covered, but I don't want any excuses between now and graduation for you to have any debt. And you are the best investment you can make until you graduate from school. What are you studying? I'm a psychology major and a minor in business administration.

Cool. What are you planning to do? That's a whole other question. I'm not entirely sure what I want to do with that yet. I've been thinking about going into human resource management. Good. Okay. Yet another reason to have a little bit of cash pad rather than have the money invested. How did you get this money?

Just saving up and just working part-time jobs, you know, throughout college and the summer. I'd say I'm a natural saver. Yeah, you're a natural saver and you're self-disciplined, and you got your eye on the prize. I want you to continue to build that. I don't care if it gets to $50,000, and if it's just sitting there in your savings account, I know that sounds mathematically unpalatable, but Eric getting his degree is a better rate of return on that money than a mutual fund will give you. All right. Because if you'll apply the knowledge that you're getting to a good career track, where you make some good money as a result of having gone to college

then and and then and then on top of that having done so debt-free with mainly your grandparents but also your frugality and and being careful then you get out it's boring everybody wants to say oh go do a mutual fund with a roth ira you can do that if you want but if you run into a bump in the road then you have to cash it out or you'd have to borrow a student loan. And I'm not going to tell you to do either one of those. Well, that and after you graduate college, that transition from college to the real world, if you decide to move out to L.A. or something, you know, moving costs, getting your life started as an adult. It takes it takes some cash to be able to kind of like prop yourself up and say, OK, this is what I'm going to do. And having that cash in the bank allows you to have options.

So you can maybe go move to a place that maybe you couldn't have afforded if you didn't have that $13,000 just liquid right there. Absolutely. Bill's in Boise. Hi, Bill. How are you? Hi, Dave and Rachel. How are you? It's an honor to talk to you.

You too, sir. How can we help? So I have a question of, do I have enough in retirement that I could slow down my contribution to retirement and put it on my mortgage? I'm currently, my wife and I are currently debt-free except for the mortgage. We have our emergency fund. But recently we got a good-sized chunk of money, but it's all in retirement. So our net worth is about $2.3 million, but almost all of it is retirement. I'm putting 15% of my income into retirement now.

What do you owe on your home? About $175,000. How old are you? 51. Okay, and you got a chunk. So you got an inherited IRA or something? It was actually the company I worked for was an ESOP, and they recently sold, so all my ESOP shares were given out and moved it to an IRA.

And what's your household income? About $120 a year. Oh, you've done so well. Congratulations. Thank you. Very well done. Obviously, mathematically, if you never touch this again, if you never add a dime to $2.2 million, it'll double roughly every seven years.

So, you know, when you're 60, you said you're early 50s, right? Yes. So when you're 60, this is going to be worth $5 million, and when you're 65, it's going to be worth $10 million, and that's without adding a thing to it. So can you stop and concentrate on the mortgage and not add anything to it? Uh-huh. Yeah, you can.

And if I could find it, you don't have any money anywhere except in retirement. Except for emergency fund and about $15,000 cash in the bank. I mean, you are retirement plan poor. Yeah. You've done no side investing. You don't have any assets of any kind that are no money, no mutual funds, nothing except retirement. That's correct.

Yeah, we just got out of debt recently, and so we were working on that and didn't have any assets. And then this ESOP money came in. How much of the 2.2 was the ESOP? About 1.8. Oh, my goodness. Yeah. Okay. Yeah, that's like you hit the lottery, but it's all stuck in that.

Okay. Wow. Yeah, I you're you're good i'd stop and concentrate on the mortgage it's highly unusual i mean how many times you hear me not i was like what's he gonna say i was not gonna do the baby steps but i just yeah you're done dude i mean good it's a very unusual set of mathematics um highly unusual and congratulations i'm so glad that you've won at that level man our question of the day rachel find from is from blinds.com find out for yourself why blinds.com is the number one online retailer custom window coverings you get samples that are free shipping that is free new promos all the time Always use the magic word, the promo code Ramsey. And that's blinds.com.

Question? Yes. This question comes from Allie in Nevada. My husband and I just started our baby steps in May. We have about $48,000 left in debts. Both of our incomes are 100% commission as we both own our own businesses. So the amount is never guaranteed and neither is a paycheck. The last three months, the way I've been budgeting is taking money we have as we both own our own businesses, so the amount is never guaranteed, and neither is a paycheck.

The last three months, the way I've been budgeting is taking money we have on the first and allotting it out, and then any paychecks we get during the month, we reserve for the next month. We're moving into our slow season soon, and since we used all of our reserve to pay off debt, I'm having a hard time emotionally. It's unnerving not to know that we may not have rent in December because we're giving every dollar a purpose. What are your suggestions? Well, we always say to cover your four walls. So the idea of not having rent, I understand. So rent, food, utilities, and transportation are the things that you want covered first and foremost. So before anything else, Sally, that's where your money needs to go. And considering you are 100% commission, you do have to plan for that. So when you have

months that come that are bigger than normal, you need to put some of that aside for savings in addition to your emergency funds. So when the months get low, you just kind of bring it out of that. So you do kind of have to tiptoe your way through it and be very, very diligent to making sure those four walls are covered. Second thing is you've got a while between now and December. If you know that's your slow season, let's think about a different product line or some other things you can add to the business that are go-go during December. Lots of direct-to-consumer retail stuff is zoom-zoom in December. This is the Dave Ramsey Show. We'll be right back. Rachel Cruz Ramsey personality is my co-host today. Open phones at 888-825-5225.

Erin is in Tacoma, Washington. Hey, Erin, how are you? Hi, I'm doing well. How about you? Better than I deserve. What's up? Yeah, I just found you on Black Friday, and I have dove into yours and Rachel's books and been listening like crazy. Wow, thank you. But, yeah, I'm still finishing Baby Step 1 on my four walls.

We're required to re-roof. However, as I'm approaching Baby Step 2, I have a possible funeral and burial in the near future. My estranged father has placed me as executor. I don't know how much these things cost, and I know there won't be any cash in his estate until life insurance is paid out. So how much does that cost? And I would assume that I need to start saving for that before I jump into baby step two. Where is he?

He actually was in hospice in California, but one of my brothers picked him up and brought him back to Washington. Okay. Call the funeral home in the town that he's in. Okay. And just tell them you have two problems. Number one, you have an estate that is going to be formed soon. He's in hospice. And there's not much money in the estate.

So this sounds awful, but I'm going to say it out loud, okay? It's what I would do if I were in your shoes. I'm going to call the funeral home and go, I need the budget funeral. What's the bottom line? And you're probably going to find $5,000 to $7,000, okay? Okay. As long as you're not in some kind of major metro area and you get a hold of some kind of crazy funeral home. But most of them have a budget process, budget process for families that don't have any money. Okay.

You can explore all kinds of different options, cremation or whatever, it's up to you, and look into those things. But gather up the dollars associated with the three best options, and then you can think about the three best options, okay? Okay. And that's your first thing, and then you know what your target is. Then the second thing is ask them if they will accept, tell them there's a life insurance policy involved but there's no cash in the estate,

will they accept an assignment of the life insurance proceeds up to the cost of the funeral? Most funeral homes do that. Okay. An assignment of life insurance? You would just say, okay, look here, who's the beneficiary, the estate or you? I am. Okay. So you can take them policy and show them, I am the beneficiary on this policy,

and it pays X number of dollars, a lot more than you're going to need for the funeral, right? Okay? Yes. And you go, I'm willing to assign, let's just call it, if the funeral was $6,300, okay, I'm just making this up, but I'm willing to assign the first $6,300 out of this and have it paid directly from the insurance company or just give you an agreement, a written agreement that the money, as soon as it comes to me, will go to you. But they will work with you because you can usually collect that money

with most insurance companies within six weeks. Okay. And so they're used to having to do that. It's not that unusual at all because a lot of families don't have the cash. But do have life insurance. Two things. One is gather up the information, and then two. But the problem is it's icky to talk about. It's awkward. Even just you and me talking about it, it's awkward, right? Sure, yes. Absolutely.

It's your dad. He's estranged. That's icky. You being having to fix this and take care of all of it when there's not much relationships. Icky again. And now we're talking about the cost of funerals, you know, but it's just like it's just life. I mean, right. And so we're just going. what's the least expensive way we can take care of his final remains in a way that you, 20 years from now, are proud you did it that way.

You know? Yeah. I mean, up until I found you, I was just going to put it on a credit card. So I definitely want to plan that I don't do that. Well, they may ask you to do that, but I would just say that's not an option. Push back on them. Okay. Again, they're used to working with families that have access to the cash,

but they've got to get it out of the estate somehow. That's a fairly normal transaction because most people don't do good planning, and most people don't have any money. Well, and I would assume, too, that in that part of business as well, there's different levels. There's ways you can probably spend a lot. Oh, yeah. So making those choices, I think, is important to be smart and to have the dignity and respect, of course, of your dad. Like you said, I like that advice, though.

Like from 20 years from now, you don't want to regret stuff. You you know a lot of people have really strong opinions about their uh final resting place and so if you're listening right now and you haven't really planned that and you care a lot um you can go to a funeral home and pre-plan we do not suggest you pre-play pre-pay don't pre-pay for your funeral but you can sit down and go look i don't want the freaking Bentley. I want the Chevrolet. Or I want the Bentley. I'm not going to care at this point what color the thing is. It's not going to be that color for but about six months anyway.

So it doesn't matter, you know. And so, you know, you may have different, you know, we have wicked sense of humor in the Round the Ramseys. But, yeah, I mean, you can decide all that for yourself and then your heirs don't have to uh because you know you're uh you know rachel probably would like spend a lot of money to make sure her dad rested beautifully and you know daniel would put me like in a box so i probably ought to go plan this so that I get what I want out of this. Oh, man. I'm going to be in heaven, so I'm not worried about what the box looks like.

So I'm not sweating it. But it's such a weird discussion. And I think, too, Aaron, she's smart to be thinking all of this ahead of time. Yes. Because when a passing does happen, estranged or not, the grief comes. I mean, they're right. There's just the human spirit and emotion that goes through when you lose someone.

And when as many decisions can be made ahead of time, it's better. That's why we talk about a will. That's why we talk about having a legacy drawer so everything's in there. To limit as much as you can on the tactical side for your family is a way to say I love you as well. Yep, yep.

So we have always said don't prepay, but always preplan. And how much detail you want to go to on preplanning actually causes your wishes. If you would be aghast that your children spent $20,000 on the casket and the vault, then go over there and pick out the $4,000 one and tell them that's what you got. You know, that's all I want. Or vice versa. Yes. You'd be aghast that they put you in the $4,000 and little cheapskates.

Instead, I wanted to be in the $20,000, you know? I mean. Okay, so another way of looking at this, too, I feel like we, I've heard you say this before, that in order to have life insurance, the reason you need life insurance is if someone is dependent upon your income. But if you don't have money, is there a reason to have life insurance, a small amount for burial costs? That would be a reason to get life insurance as well if there's no one. If you can. But that's a $10,000 policy.

Right. No, no, totally, totally. You can get it with your checking account. It's not a big, expensive item. But the idea of pre-planning through anything that's highly emotional, certainly having your will, life insurance, funeral plans, all those kinds of things, it's a gift to your family, folks, for you to do that. And it's end of the year. Go on mamabearlegalforms.com, and you can get your will done in just a few minutes.

It's very easy to do if you don't have a will or you haven't updated it. You need a will. And, you know, if you go ahead and do it like this week, then when everybody's around next week, you can tell them if they're in the will or not. Okay. Sit down and have a discussion. Go ahead and do a reading of the will while you're alive. If you want to piss them off, do it while you're living while you're living yeah okay no but we say to do that though right yeah i would do so to do that conversation though don't surprise everybody about it but for real

talk about the stuff we uh we have a meeting once a year yes with the ramses we call it the when dave dies meeting and it's like when something happens to dad or mom or both, here's what it is. But as a grown adult child, I'm so thankful that you guys talk about it and communicate about it. So it is a gift. It really is.

It's my Monty Python meeting. I'm feeling much better. It's just a flesh wound. This is The Ramsey Show. Hey, guys. Hey guys, this is Kelly, associate producer for The Ramsey Show. Did you know that over 16 million people listen to The Ramsey Show every week? And a lot of those people listen on one of our 600 plus radio stations across the country. To find a station near you, head to DaveRamsey.com slash show.