The Ramsey Show - App - How Do I Get My Wife To Stop Using Credit Cards? (Hour 2)

Episode Date: July 24, 2024

Welcome, America. This is the Ramsey Show, where we help you win with your money, win in your work, and win in your money. Win in your work and win in your relationships. The phone number to jump in is 888-825-5225. I'm Ken Coleman. George Campbell is with me. George will be our money expert today. And as always, I am your work and income expert. And that's why we are here for you. We want you making more money, saving more money, investing more money, ultimately so you can live the way you want to live. I'm going to tease this. Coming up in just a couple of segments this hour, I got the green light from the powers that be, George. They're taking the governor off of me, you know? Like, you know, a governor keeps the golf cart from going too fast.

Oh. And then we're going to talk a little politics. We're going to take on one single issue that I believe every American can get united around. And that we should be talking about. And we need to be talking about more. And in light of the presidential race and as wacky as it's been, holy moly, July's been a month. Feels like a year. It's been the longest month. So that's coming

up. You do not want to miss it. Trust me. And for those of you that are getting squeamish, don't be. We're not going to take on that. I don't think you can be offended by this. In fact, I would challenge you to try to be offended by what I'm going to say. How about that? So we'll see.

That's coming up. But first, we go to New Haven, Connecticut. And that's where Charles is joining us. Charles, how can we help? Ken, George, it is great to be able to talk to you guys today. So quick question. My wife won't let us let go of the last credit card, and I just need your help convincing her. What is her reason? She kind of likes the buffer of it. You know, just pay it off at the end of the month. She kind of likes the thought

of the safety and the travel. My friend's gotten stranded before and all he had was a debit card, so he wasn't able to rent a car to get home. All right, question for you, Charles. Question. Yeah. What's the limit on this one card that you guys have? What's the max you could charge on it? Oh, I don't know, about $5,000 or so. I got an idea.

I'd come up with $5,000 and say, Babe, I have replaced the comfort of the credit card with the absolute max that we could borrow. And so I've got an additional five grand in our emergency fund. That's why the emergency fund exists anyway. But I just, George, I've long since wanted to answer this question this way, and I haven't had an opportunity to. It hit me not too long ago.

So if it's about the actual security, let's go put the cash of the max amount that you could borrow, and then I would close the account, and I wouldn't ask permission. Okay. I'd cut the card off and close the account. There's some really simple workarounds, Charles, and I could hit you with, here's what you could do, here's what you could do. The truth is, this is emotional for her. It's been a security blanket for a long time. That's right.

And she's not yet convinced herself that she has become the bank. You guys are in a place where you have the money to cover an emergency, right? So if I told you, well, have your account, let's say you can open a separate checking account. Like for example, Charles Schwab has one that's like the investor checking. It has a debit card. You can use it internationally. There's no fees. And you could just use that fund for travel and never touch your actual bank checking account.

You see where I'm going with this? Yeah. Use as much as you need for travel, and you have your checking account separate in case there was fraud for backup. That's a solution. What would she say to that? I think that she might go for that. And let me tell you the reason that it's only maybe is she can't stand the Ramsey plan. There it is.

Ding, ding, ding. See, and that's exactly. By the way, what I was doing, Charles, was being a little sneaky by addressing what she's presenting as the problem. And then when we provide a solution to that problem, we find out what's really going on. And this would reveal that, George. Both your idea and my idea would reveal, oh, it's something else. I just don't like those people.

So why doesn't she – what really ticks her off about the Ramsey plan? It's probably you. Actually, that would track. No, actually, George is who got me into the Ramsey plan. I didn't like that first either. George really, he's a real good salesman. I know. I know.

I was just thinking that maybe your wife, I thought maybe your wife didn't like you. I was trying to come up with some. Well, maybe your wife would like Rachel. Is that a good, you know, Rachel's inoffensive. Everyone loves Rachel. Yeah, exactly. Yeah. So why do you feel like it's restrictive the Ramsey plan is for broke people.

Well, that hurts my feelings. It is for broke people. It is. And it's for rich people. Well, they become rich. Right. Luckily, we skipped Baby Steps 1, 2, and 3 when we found Ramsey, and she just feels like it isn't for us.

Oh, because you were already technically in our Baby Step 4 when you found us? That's correct. Okay. So what is your household income? We didn't have to claw through 1, 2, and 3. Right now it's $120. Okay. Are you guys exactly where you want to be financially?

Do you think you could be doing any better? Or is she like, hey, we are crushing it. Don't mess with it. It ain't broke. She doesn't actually, I feel like she doesn't understand how well off we are. Is she also financially responsible? Or did you kind of? She is extremely financially responsible.

I'm actually, I'm the nerd and I'm the recluse. So what are the chances that she would not pay off the credit card balance every month? I would say zero, but it actually happened a couple months ago on her own card. See? So she got bit by the snake and she says, no, no, no, the snake is still my friend. Yeah. Well, it was my fault. We're best buds.

I mean, it's not the snake's fault. I picked it up. Right. It wasn't a full bite. It was just it snapped and barely missed her. It was only like a $10 balance or something she forgot. You know, it wasn't big enough to really leave a mark. So here's the deal.

Charles, I'm going to send you a copy of Breaking Free from Broke, and in there I want her to read the credit card chapter specifically. In the credit card chapter, I cover the eight archetypes that I found of credit card people. The perfect spender, which is the person who says, I pay it off in full every month. I use it just like a debit card, right? The rewards redeemer, which I never pay for flights and hotels. I love it. I think she's more of the fraud protector.

So number one, she says credit cards are safer. So it's really smart. On top of the world traveler, what if we're traveling and it's just more convenient? And what if, what if, what if I need to rent a car? Which by the way, you can do with a debit card. Then there's the emergency shelter, which she's also this person. I need my card in case of emergencies. What if something happens and we need to put it on the card? Well, that's kind of a non-starter with me when you guys already have an emergency fund, right? How much do you have in savings? Right now, we have a $10,000 emergency fund, and then we have on top of that around $17,000. Oh my goodness. And she still thinks this is the path. Is there more is is it a fear thing

because another one's the fear tranquilizer who says having a credit card makes me feel more secure it i feel like um part of it we had a lot of fraud on one of our bank accounts so sometimes she brings up oh she doesn't like the bank we have. Switch banks. But, yeah, I feel like that'd be a... Put a freeze on all of your credit. Switch banks. Yeah, but here's the thing. We've got to address this. And the problem's solved.

We've got to address the relationship piece. So you're going to have to patiently and methodically address all of these concerns for her. Or else you guys are going to still be at odds over this. This is not, you know, I said this earlier and I was being glib and I need to retract it. You know, for your marriage, I wouldn't just go behind her back and turn it off. I want to make sure I was kidding around about that. And I wanted to correct that. And because here's the reality, this is about vision casting and you're going to have

to just walk her through these fears. Hang on, we'll get you George's book, Breaking Free from Broke. Hey, you guys, health insurance costs are only moving one way and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values

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picking up my call uh i'm a new ramsey i guess a member here i just started listening like about two weeks ago well awesome wow you're like the hot now sign at Krispy Kreme. I mean, fresh. I love it. Yeah. Pretty brand new to all this. My question is, I have a spreadsheet of mine and my wife's budget, and I put all of our bills and all of that stuff into it.

This was probably about two or three months ago. And my mortgage comes out to about 48% of what we bring home every month. That'll leave a mark. Hold on, George. I'll get the Tums for you. I actually got some heartburn. You got some, yeah, a little heartburn. All right. So what is the mortgage and what is your after-tax monthly income? The mortgage is $180,000. It's $1,428 a month. My wife, she brings home about $2,000 a month, and I bring home about $29,000 to $3,000. Okay.

So altogether, we're talking $5,000 and the mortgage is $1,500. Okay. So altogether, we're talking five grand and the mortgage is $1,500. Yeah. For 1428. What do you guys do for a living? She works for the state of Texas and I'm an electrician. I don't know if the number's right here, but what you just told me would mean your mortgage is 28%. The mortgage is 1428. You guys are bringing home five. Did I miss something? Oh, well, maybe, maybe I looked in my, or maybe I have a wrong calculation in my spreadsheet, but I guess that leads to my question is like, uh, we don't really have much debt. We have about $1,500. We have about three months of our expenses saved up.

And I was just basically trying to figure out, like, it feels like we're not saving anything any month. But I don't know if that's because of us or... What kind of debt do you have? We have like $1,500 in credit card. Both of our vehicles are paid off. We have about an $800 medical debt that we're paying off. Okay, so if you paid off the medical, you have savings right now? You said you have three months of expenses saved?

Yes. What's in savings? We have $16,000 in our savings right now. That's fantastic. As well as... What are you doing hanging on to the debt? Why not just pay off? I mean, you got $2,300 in debt.

You have $16,000. Yeah. Pay it off today. I guess it's just kind of scary watching that money go away. It's scary watching your money go to lenders every month. Yeah. Yeah, that's true. And you're actually wasting money making these payments when you actually can get rid of it right away. Yeah, 22% interest on that credit card.

That scares me. And just for information here, how much are you saving on a given month? I mean, it really depends on if... Give me an average. Come on, man. Your last three months, give me an average. What do you think? Saving from just our income, probably basically zero. Well, then how did you get the $16,000 saved up? We actually saved it up probably a few years ago, and we've been dipping into it. It was actually more than that.

So you're telling me right now you guys are paycheck to paycheck as far as expenses. You have nothing left over when you pay everything. We aren't necessarily paycheck to paycheck after everything is paid, but I mean, after like all the bills and groceries and stuff come out, we probably have anywhere between $100 and $400 a week. Well, $400 a week, that's $1,600 a month you could be saving. So I think what's happened is you're new to the plan. You guys are just new to paying attention to where your money's going and you're going, we're making pretty good money, but it's disappearing. And that's where the budget

comes into play. So I'm going to gift you every dollar. I prefer that over a spreadsheet because I don't know what your wife is like. My wife ain't looking at Excel. But if we have every dollar and we're both logged into it, now we're talking. We can get on the same page. So I'll gift you that. But the other piece I want Ken to speak to is the income. Is your wife working full-time? Yes, she is. Why is she only bringing home two grand a month? Because she works for the state.

Well, see, a lot of the money in her paycheck goes towards insurance for us and our kids. What's her gross income and what position is she in? I don't really know what you would call the position. She works in child support, but her gross is probably around $38,000. Yeah, and so she's just kind of capped. There's not a lot of room for promotion. And even with a promotion in that, it's just not that much money from a state job. So she's what I would call George, a little bit capped. What I'm curious is, is Craig, what's been your income? Give me the last two years as an electrician, what you've

made gross. Anywhere from mid thirties to I'm in the 40s now. Okay, Craig, I'm going to ask a question, and I'm shocked. Are you early on in the trade, and are you not seeing that there's massive opportunities for electricians now all across the country, but certainly in Texas? I'm about three years in, but we live in a pretty rural area. We're not actually in Dallas. Oh, I see. Okay. But you feel like you've got your best option right now? There's no upward mobility or, dare I say, you picking up 20 hours of side jobs for people and making some money there. I understand you're in a very small rural area, but are you capped out as an electrician where you are? With where I'm at right now, I think I'm on the upper end of it with where we live.

Are you married to staying in this rural, remote location? We're pretty invested here. We're right next to all of our family. We grew up in this area, and we bought our house here, and our kids will go to school right across the road. I get it. So here's the deal. The only way you make more income is if you actually start doing some stuff on the side. Yeah. So that's a viable option here, to get ahead. You don't have to do this forever, but if you want to get ahead, more income into a budget that George is telling you to. So here's what we're getting at. Discipline budget, and let's bring in some more income.

If we can bring in an additional $20,000 a year, that's significant, is it not? Yeah, for sure. Well, that's less than two grand a month for a guy who's a working electrician. I don't think I'm painting too high of a goal, am I? No, I don't think so. All right, so let's get a bigger goal. So if the number's 30 or 40 or 50, using George's discipline in the budget here, you guys are going to be in great shape. And you need to prioritize savings. It's not, well, if there's something left over, that'd be nice. It's, nope, we're putting, we're covering our four walls,

food, utilities, housing, transportation, insurance. Beyond that, we are putting money away in savings. We're going to invest it in a Roth IRA. If she has an employer retirement program, we're going to put money away there. And part of this is just also deciding we're never going to go into debt again because it's robbing from our future and we're trying to build for the future. And so that's one line in the sand on top of the budget, on top of getting the income up and making savings a priority. I don't think this house is what's killing you guys. I agree. Okay. Well, that's definitely a plus because we really love where we live

and we're going to try to make it work how we can. Yeah. So, and by the way, the numbers you gave George were correct, not the numbers in your spreadsheet. Is that right? Yes. Okay. Then so he ran the numbers. You're fine on that. And Excel lied to you. So go check out EveryDollar. It's going to be much easier to use. You type in your income at the top for the month. You lay out all of your expenses for the month. It'll show you if it's an every dollar budget, meaning income minus expenses equals zero. You want to give every dollar a job. And that includes the savings goals, the giving goals, the spending goals. And I think you guys can make this work in a rural area. It doesn't sound like you're living a lavish lifestyle out of control. We just need to dial a few things in. And again, this is a great example of

some people who, and by the way, I love this, you know, they go, this is where we want to be. So when you're in a smaller rural area, you are limiting your income possibilities. So then you're going to have to deal with that. And maybe you have to do some things different for a short season, but that is a reality. So, you know, at that point, you got to be very, very creative, but I think the budget and they're going to be okay. I really do. They were able to save up money before they can do it again. All right. Thank you for the call, Craig. All right. Don't move. When we come back, the one issue that every American should come together on and vote for this November. I'll unpack it next. This show is sponsored by BetterHelp. All right,

so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you want to call yourself. We all have to have a community and a support system to do life with. It's time to shift the focus from doing it all by ourselves to knowing that we can only be well and whole when we ask for help.

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and so here we go. We are in a... We have some international folks with us today, by the way. We have some folks from Israel, Australia, and Scotland. And so I'm sure they're paying attention to the unbelievable headlines that we've seen come out of our political coverage. I mean, what a month July has been. Hello. An assassination attempt.

And then a sitting president deciding to bow out of a re-election race. You just don't see those headlines. And it's been crazy. And so obviously the election is coming in November, George. And I think there's one singular issue that the Ramsey show needs to be addressing. I think there's one singular issue that Americans on the left, Americans on the right, Americans in the middle, all parties, all faiths, all creeds, I think this one issue should be the dominant issue in this election. And George, I'm sad, and I am a bit worried that it's not. And so we're going to unpack it today. What a tease, can I just say. That was, well, let me

tell you something. It is a growing problem and it is growing by the second. The issue that I believe that the American people should unite on is the national debt. Here we are at Ramsey Solutions where for decades we have helped people get out of debt. And we talk about it through Scripture. We talk about it through Grandma's Common Sense Ways. We talk about it through the baby steps. And it is such a freeing thing for individuals. When we talk to them, George, across the studio and into the lobby on the debt-free stage, and we hear their stories, and they culminate their story of getting out of

debt by screaming, I'm debt-free. And we talk to people and say, what does it feel like? And it just is such an unbelievable part of our show. So we must discuss the national debt, and we have a massive audience. And so i'm asking this audience to hang with us for a few minutes here as i discuss the national debt and actually why it should be bothering you because there are five specific outcomes that would affect you and me and George if we were to default on the national debt. Which we've come dangerously close to, by the way. This is not like a thing that, oh, it'll never happen. Yeah.

We've been on the precipice multiple times. We have. And we've also seen the national debt explode. I asked the team, as we speak, the national debt is growing. So we're going to throw it on the screen for our listening audience. Get the national debt is growing so we're going to throw it on the screen for our listening audience national debt calculator we are right now george at 34 trillion 960 billion dollars in debt and it continues to go up they're literally if you're watching right now you can see it on the screen if you're listening uh this is out there they have this at bus stops in washington

dc by the way where it's literally going it's a ticker this is like the opposite of xanax this is out there. They have this at bus stops in Washington, D.C., by the way, where it's literally going and it's a ticker. This is like the opposite of Xanax. This is very anxiety-inducing to just see those numbers grow at that alarming rate. We are just... And we owe money to a lot of people. 100%. Which puts us in a precarious position. Right. So before I break down the five factors, the five ways this will affect you, I want you to understand something. The reason that we, the people, you, me, George, we just don't pay attention to this is because we somehow think the federal government's got this ultimate insurance policy or that they're all going to come together at the last moment of crisis and figure it out. But folks, if you pay attention to the headlines,

year in and year out, we see Congress deal with what we call raising the debt ceiling. They aren't doing anything about it. It's like raising your credit card limit every year because you can't get your spending under control. So here we are on the doorstep of $35 trillion. Now, some of you think this is not an issue, Ken. You're being a little dramatic because it's the Ramsey Show. No, I'm not. Here we go.

Five very personal outcomes. If the American people don't do something, say something, and I'm going to tell you at the end, by the way, what we can do. There is a very practical way to deal with this. But first, how would it affect you, George? Number one, interest rates would spike through the roof. The reason for this is because investors, hello, countries that have loaned us money, effectively investing in the American economy, would demand higher returns because of the risk, because of the default. So the cost to borrow goes way up. For everybody and everything. You think interest rates are uncomfortable now?

We're talking about double-digit interest rates overnight. So credit card interest rates and mortgage interest rates, student loan interest rates, car loans, everything. Number two, the stock market would probably experience a significant volatility. Think, am I saying crash? I can't guarantee this. Massive decline in the stock market. What does that mean to you? Tell them, George. What does that mean to them? Well, when people get spooked, including the big-time investors, they sell off their equities. And when they sell it off, the stock price goes down. But how does it affect the average American person? Well, you look at your 401k and we all remember the 2008 crisis or whatever. We saw this just a few years ago. My retirement just

got cut in half because of what just happened with the market. Right. Number three, you think inflation has been bad over the last couple of years. If we default on the national debt, inflation skyrockets. Everything skyrockets. It's nasty. It's ugly. You're talking about depression era issues. Really, really ugly. You're talking about Depression-era issues. Really, really ugly. Really, really scary. Number four, government services. The default could force the government to cut spending. Some of you go, yeah, it's about time.

Until you think of the social unrest of government entitlements and government programs being slashed. Social security. And not being able to be delivered. That's exactly right. So you just think about that. And then the fifth factor is unemployment. Now you're talking about depression era stuff where literally people could not get jobs. There were not jobs to be had.

So am I painting a bleak picture? Sure. But it is a picture that must be painted for us to understand that while we here at the Ramsey Show are saying, hey, control what you can control and get rid of your debt. Let me just tell you something. George and I are debt free and we would be affected dramatically by our government defaulting on its debt. We are racing towards $40 and $50 trillion of debt, folks, and all it takes is one major country who we have a lot of debt with to call the debt in. And the very story that draws people to Dave Ramsey could happen to this country. This is not a joke. So why do I bring it

up? Because we have a massive audience and we have a massive responsibility. In this election year, George, I am proposing that the issue that the American people get behind is removing the national debt, eliminating the debt, and going a step further. So how do we do this? George Aspey says, so what do we do? Well, many states in the country have in their state constitution a requirement for a balanced budget. So I grew up in Virginia. That is one state where in the actual constitution of the state, the Commonwealth of Virginia, you have to balance the budget. A.K.A. you can't spend more than you're making as a state. This ticker the team just put up here where we're barreling towards $35 trillion can't happen. And so how would we do this if we the people to Congress, to our senators, demanded a balanced budget amendment? Because it would take that kind of support. The

American people would have to be in absolute unity in massive numbers, and then you can get an amendment to the Constitution. I won't do a whole discourse on how to do that. So we need like a national rice and beans type diet here to spend less than we make, which we joke about Congress, you know, spending like crazy, writing new bills. That's right. I think we the people need to say, you know what,

instead of fighting over social issues and fighting over, you know, insults and accusations, we ought to go, you know what, the thing that threatens us the most is the actual national debt. And we need an amendment to the Constitution. Well, for people, Ken, going, you guys, this is far more complicated than you're giving credit to. It really is this simple. We are spending more than we're taking in. That's how we got here. I could take Mr. Camel to Washington, and I could have George in a room with all of the bean counters in the federal government, and George could actually balance the budget. I know you could. We could take every dollar

and hand it over to our bureaucrats. I think every dollar would break if we put $35 trillion into our debt category. So there it is, folks. I bring this up because I think we should be paying attention to this. A balanced budget amendment to the U.S. Constitution would, in fact, force the politicians to get our country debt-free. That would let us all sleep well at night. Why don't we think about it? Let's think about it. Tell us what you think. One more thing.

I yield my time. I think I already made you yield it, whether you wanted to or not. This is The ramsey show welcome back to the ramsey show america my fellow americans i did i forgot to say that to start off the rant in the last segment i was hoping you even constituents well i can't it's one of my favorites oh instead of listeners yeah it's ay. Hey, let's get to the phones. 888-825-5225. He's George Campbell. I'm Ken Coleman. Thrilled to have you with us.

Daniel starts us off in this segment in Houston, Texas. Daniel, how can we help? Hey, thank you for taking my call. You bet. The dilemma I have right now is that me and my girlfriend are looking to buy a house within the next year, probably starting summer 2025. And we're debating whether to go the conventional route or go the FHA route that Grant Cardone and many other real estate gurus preach. Yeah, you had me at Grant Cardone.

Guru. Okay, what is causing you to want to buy a house when you don't have any money? I'm sorry? What is causing you to want to buy a house when you don't have any money? I'm sorry? What is causing you to jump into this? Because FHA loans are first-time homebuyers who are broke. My girlfriend's going to graduate from college around May of next year, May 2025, and depending where she gets a job, that's where we'll be looking to buy a house and settle down. Okay.

And what's the urgency to buy a house versus rent until you have enough money to do this with a little bit more peace and equity? The fear of, I guess, throwing money down the drain. Let me paint you a different picture of fear. You move into this house with an FHA loan, meaning you have to borrow the rest of the money because you're putting basically nothing down with these loans. That's right. Now you have a giant mortgage that you can't afford. That's 64% of your take-home pay, and you don't have money to pay the rest of your bills.

Do you see that side of the fear? I do. I do. And the problem is you get, your risk meter gets broken when you follow these gurus out there who are saying, bro, here's how you can get, you get this house and you're going to rent it out. You're going to buy 10 more houses. By the time you're 30, you'll have a hundred houses and you're going to, that's pretty much what they're saying out there. Am I correct? Yes, sir. Okay. So we got to turn off those inputs because they are not there to. Okay. So we got to turn off those inputs because they are not there to bless us. They're there to, they want you to buy a course and go to the 10X event where you're going to 10X your mindset and all this crap, right?

So that you can have a yacht too. It's important to point that out. So that aside, here's my beef with the FHA loan. So this is a federal housing administration loan. It allows people who don't qualify for a conventional mortgage to still become homeowners. So you can put as little as three and a half percent down and they have more leaning credit requirements and allow a higher debt to income ratio. Here's the problem. Those borrowers are required to pay an upfront mortgage insurance premium, MIP, of 1.75% and an annual premium of anywhere from 0.15% upwards of 0.75% for the life of the loan. The only way to remove that is to put more than 10% down, even then you still have it for 11 years. And so there's a lot of downsides here. And most

people that are trying to do these loans are simply not in a place financially to make home ownership a blessing instead of a burden. And I want you to do this the right way. And another way you're going to do it the right way is with not buying a house with someone you're not married to. We have seen too many times, Daniel, on this show where people call in and say, hey, I bought a house with my girlfriend. It didn't work out. And now it's super messy because it's like, who gets to keep the house and how much equity? Because I put this much down and she didn't do you see where this could go south yes absolutely and so number one i would rent i'm not going to comment on your situation but until you're married i would not buy a house together okay can you promise me that for the for the good of the

group okay and number two don't buy a house until you're debt-free with an emergency fund and a solid down payment. I'm not saying you have to have 20%, but you have to have enough that you've got some skin in the game to where you're not

underwater on this house when you move in. Okay. Now, I do have a follow-up. What, and I understand you just said not 20%, but at least enough. What is the fine,

the sweet spot, at which point you're not, you know, I'm not missing out on the cost of opportunity on taking extra money and investing it in the S&P 500, or et cetera, a list of other... Do you have any debt? I have about $20,000 of student debt. Okay.

How much money do you have saved? $50,000. Great. Why aren't we paying off the student loans today? Because. Let me guess, the opportunity cost of investing that in the market. Yes, sir. What's the interest on your student loans?

About 4.6%. Okay. And the $50,000 is in a savings account making 4.7%? No, it's in the market. Then you don't have $50,000 saved. You're playing with $50,000. If the market goes down 20% this year, you don't have $50,000. Okay.

So that alone frightens me that you have nothing in liquid cash. So here's what I would do if I was in your shoes. This is one man's opinion, but this is the Ramsey plan that millions have followed to a path of peace instead of a path of 10Xing your mindset. Here's what you're going to do. You're going to sell enough investments to pay off the student loans. You're going to sell enough investments to give you a three to six month emergency fund. And then whatever's left becomes your home down payment fund. And you're going to move that into a high yield savings account because you told me a house is not a five plus year goal it's like a one plus year goal right that's right let's play this out

elections coming up everyone freaks out stock market takes a dip your 50 turned into 30 temporarily but still you want to buy a house next year now you're you thought your down payment was going to be 50 now it's 30 that sucks doesn't it yes it does and so i'm trying to give you a path of peace where you're moving slower but you're actually going to get to where you want to go without falling flat on your face so i know i sound like the old guy in the room daniel i think you're a real sharp guy the fact that you're you've come this far you've saved this much you're investing i love that you want to grow your wealth, but there's a few prerequisites here that I think you should knock out.

Yeah. And Daniel, I'll just add this. George said it, but I just want to drive this point home. By keeping the student loan out there and just keeping it like it's a pet, and then putting all that money in the stock market, you know you've doubled your risk. You've not removed any risk. You're not playing the smart. You've actually doubled your risk because you could lose that money, as George said. Some money, any money to me is so ridiculously risky, and you still have the student loan hanging on to you, dragging it around for years and years and years. So I would just really implore you to think through that. Because that's not what you're hearing on TikTok and Instagram. Because by the way, we're not selling you a course to tell you that. We're telling you now. And I just think

it's really important not to get wrapped up in that. You're looking at the short-term gain, you're not looking at the long-term play. And the long-term play is you're going to be wealthy if you get rid of all the debt in your life. And you got a house that's an appreciating asset. And there's no risk in any of those moves. None. So I hope you understand that. I really do. Because I know that's counter-cultural, is what we're saying. I understand. I understand. All right.

I'm going to send you a copy of my book, Breaking Free from Broke Daniel. In there, I unpack credit scores, credit cards, student loans, mortgages, including the FHA loan and all of that. And then I'll show you that path that I'm talking about. And I hope that I convince you to go down that path. Because I don't want you calling back saying, I bought a house with my girlfriend. It was an FHA loan. We're underwater on this thing. We're breaking up. What the heck do I do? And we're probably going to take that call in the next hour. So this is not a crazy land. This is going to happen. This is a reality that we face, and I just want more for you than that. So if anyone out there, they want to buy a home the right way, you want to make this a blessing and not a burden,

go to ramseysolutions.com slash real estate. Our team has created a hub with tons of free tools, tons of free resources to help you reach your home goals. Whether you're wanting to buy, you have a home you're wanting to sell, you wanted to buy investment property, you want to find a real estate agent, we have it all in one place for you, including some great calculators as well. So be sure to check that out, ramsaysolutions.com slash real estate. You know, it just occurs to me, because I think he was absolutely, you know, processing what we're telling him. Don't know if he'll do it. Don't know if he agrees with us. He was processing it. But it is so not fun compared to what he presented us with. What he has heard up to this point is so much more exciting. It's not sexy. And fun. And it's like, ooh, ooh, ooh. But it is not a great long-term play. And it is rife with risk. And yet

it's being packaged as, you're an idiot if you don't do this. And that's what's really tricky about this stuff. There's a lot of ways to go about this, but we found this way actually works. No matter who you are, what your income is, but you've got to get your risk meter back intact. There you go. Good hour, George Campbell. I'm Ken Coleman. This is The Ramsey Show. Thank you.