The Ramsey Show - App - How Do I Start the Baby Steps? (Hour 1)

Episode Date: January 19, 2023

Kristina Ellis & George Kamel answer your questions and discuss: Pulling from mutual funds to pay off debt, from the blog: Should I Use My Investments to Pay Off Debt? "How do I get started on the Baby Steps?" from the blog: How to Win With Money in 7 Baby Steps An update on the Debt Ceiling and Student Loan Forgiveness, "I'm over $100k in debt. should I declare bankruptcy?" "Should I pay for my ex-husband's funeral?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio. It's the Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Christina Ellis, Ramsey Personality, joined today by my co-host, Ramsey Personality, George Campbell. We're taking your calls at 888-825-5225. Give us a call. We'd love to chat. Kicking off this hour is Ashley calling from Nashville, Tennessee. Hey, Ashley, welcome to the

show. Hey, how are you guys? Hey, we're doing great. How can we help? Um, so my husband and I have recently decided to be gazelle intense. We have read Total Money Makeover and we are on baby step two currently. Let's go. And so, so we finally put all of our debt together, including student loans, everything. And we're sitting at about $148,000. And my question today is, I have a small bit of mutual funds I was gifted from a family member. I think I might have an emotional attachment to it, but we're wondering if we should sell those and put those towards the debt or just leave them as is and forget about them. How much do you have in those mutual funds? It's only about three grand right now. You're emotionally attached to three grand worth of mutual funds?

I think what, and we talked about this after church the other day, and I think what is keeping me holding it in there is because my great grandfather worked really hard, bought them a very long time ago, and I feel like I'd be using his success to kind of help with my mistakes. And so, I don't know. We got to flip the script here. I think he would be honored that you're using this money to set yourself up for a better financial future. That's how I see it. Yeah, fair enough. How does that feel when you hear that? It feels good. I mean, I've always just wanted to make him proud. So I think looking at it that way is definitely helpful for sure. I think he would be proud of that. The fact that you are going gazelle intense and part of that is knocking out all debt, no

matter what it takes you going scorched earth. I think he would be so proud to see you going after it. Yeah, for sure. So cashing these out, there might be some tax implications on the gains that were made. So that's the only thing to consider, but I would absolutely cash these out and apply it towards your debt. Okay. What's your income? Household? Household is $65,000 right now. Okay. And what kind of debt's the $148,000? We have in student loans, $89,000. Our total credit card debt is $19,900. And then I have a car right now that's sitting at $39,000. And so we've been looking at selling it. The only problem, I guess this is kind of another question, is we owe more on it than it's worth. So we're trying to kind of figure out how to work that out also.

Yeah. So if you're underwater on the car loan, you're going to need to come up with the cash to cover the difference plus the amount to get a different car and so do you have any money in the bank right now just our emergency fund that we just finished saving is that a thousand dollars yes okay so you've got the three thousand and so your your first step here obviously in the debt snowball would be the credit cards but if you sold this car we need to come up with the difference. So do you know what the gap is? We owe $39,000, and Kelly Blue Book said it's worth $25,000 right now. Oh, gosh. How is that possible?

I don't know. We actually were thinking about getting a second opinion in person at a dealership. I mean, did you wreck the thing? How is it worth so much less than you owe? No, we haven't. It's actually a dealership. I mean, did you wreck the thing? How is it worth so much less than you owe? No, we haven't. It's actually a great vehicle. So I'm not sure if it's the mileage or what happened, but it's very intact and clean. Do you have another car as well? My husband has a paid off truck. It's a 97. He's had it since he was like 18. Awesome. Okay. Any other debt um just our mortgage okay

hey i'm curious you said your income's 65 and you know you and your husband are in this together what what are each of you making so right now i'm a teacher and i'm making most of that. He is unemployed but gets benefits from being retired from the military. He just had a job interview today, actually, and I had a job interview beginning of the week for a second job. Okay. Good, good. That's the biggest thing I'm seeing here on paper is we need to get this income up because you've got a mountain of debt comparatively to your income,

and it's going to be a slog to get through this making 65 so if we can make 100 or more now we're cooking with gas we can pay this thing off in two years how long has he been unemployed um he got out uh this summer i think july around july but he started school so he was getting the vah payments and then his veteran or his disability um so he brought in a little over two grand every month and i was bringing in about 3500 okay um is he done with school now he is he just graduated in december um and so now he's been applying at at places with his degree and whatnot what's his his degree in? Criminal justice, so he's looking at police work. Cool.

So he's bringing in two grand because of disability from the military, correct? Correct. And he's applying for jobs. I'm kind of wondering, I know that with police work, it can take a while sometimes to get a job, to get into a department. Can he do something in the meantime while he's applying for jobs just to bring in that extra income? We have one of our side hustles. It's kind of slow right now, but we've been doing Rover also. And so since he's been home during the day, he will take any

requests that we get for drop-ins and walks and things like that. Okay. What about some security guard work? Something that's kind of related to his field that could give him some experience while making, you know, 15, 20, 25 bucks an hour? Yeah, for sure. Definitely. He's done it in the past, so that's definitely an option. Yeah. And I mean, typically that's pretty flexible. You can find it in the evening if he needs to go on job interviews during the day. But I would bring in something right now, especially with that mountain of debt. Y'all can start tackling this. I mean, I know it's great to get that full time job and that's the goal. But in the meantime, I would be hustling like crazy.

And you said y'all are gazelle intense. So I think that's just part of it. Like, let's go. And one option, Ashley, is to go to your local credit union and just get a personal loan to cover the gap with you being underwater on that car. That's the only time we would, and you're technically going into debt, but really you're just lowering the balance so that you have less of a mountain to tackle there. And then your A1 would be getting a beater car for $5,000, $6,000. And, you know, I see you're in the Nashville area. I'm just on auto trader, sort low to high, go on Facebook marketplace.

They're out there. Are they pretty? No, they shouldn't be. Are they high mileage? Yes. Are you going to brag about it to your friends? No, but that's okay. Cause we've got bigger fish to fry than trying to impress our friends with a vehicle right now. So get you something that will go from A to B, get a pre-purchase inspection on it so that you know it's going to be reliable. And that will speed up this process infinitely. And you may want to just check to see what that car would sell for in the private marketplace because right now the used car industry has been nuts. Whenever we were buying a car, we were seeing such a huge difference between

what was on Kelley Blue Book and what was actually in the different dealerships. Yeah, get quotes from everywhere to get a full picture of what you could get for this car and private parties generally going to be your best bet. We're wishing you well, Ashley. Let's go. We're excited for you to tackle baby step two. This is The Ramsey Show. We'll be you next time. welcome back to the ramsey show i'm christina ellis joined today by my good friend george camel and we are taking your calls at 888-825-5225.

About this time of year, we get flooded with calls because everyone's looking for a fresh start with their money, especially after a tough couple of years. So if that's you, you can't wish for things to change and expect it to happen. You've got to do something different. You've got to have a plan. And we can teach you that plan in Financial Peace University. This is the course that will help you rethink how you manage your money. And you'll learn step by step how to pay off debt and build wealth. Guys, nearly 10 million people have taken FPU, followed this plan and changed their lives. It works. Don't try to reinvent this. And when

you intentionally follow this plan with focused intensity, this year, it'll be different. You will have more peace in your finances and in your life. So start Financial Peace University right now at ramseysolutions.com slash FPU. That's ramseysolutions.com slash FPU. Up next, we have Jim calling from Ottawa, Illinois. Hey, Jim. Welcome to the show. How are you doing? Oh, thank you.

I can't believe I finally got through. We can't believe it either, Jim. I tried to stop them, but they let you through anyways. How's it going? I don't blame you. Right before Christmas, I had bought the Ramsey everything, the kit that was marked down like 80%. All right. Some kind of bundle that had Financial Peace University in it? Right, right.

Okay. Yes, it had everything. How do I start with the ABCs? I mean, my wife and I are living paycheck to paycheck. We have tried. We're behind in a lot of finances right now. So is your goal right now just to kind of, we got to cover the bills and we want to get rid of some debt? Is that the A1 for you? That's the start of it.

Yeah. Okay. I mean, we've got a 19-year-old son. and we want to get rid of some debt? Is that the A1 for you? That's the start of it, yeah. Okay. I mean, we've got a 19-year-old son, so, you know, I mean, if something happens to us, we're in our 60s, we want to make sure that there, you know, is, you know, that he's not going to basically be left with nothing at all but our debt.

Sure. So what's your household income? Right around $50,000, $55,000, maybe a little bit more. Okay. And how much debt do you have total? Just consumer debt, not the mortgage? Right around, I would say $30,000. Two cars and a couple credit cards. Not $30,000, maybe about $25,000. Okay. How much do you owe on the cars?

We owe $12,000 on one and we owe $6,000 on another. Okay. So the way you would lay these out is using the debt snowball. But before we get to that in baby step two, you got to make sure that we are on a budget and we are covering our four walls. That's food, utilities, housing, and transportation. You were telling me earlier that you're having a hard time keeping up with bills. What bills are you having a hard time keeping up with? Rename it. I mean, utility bills, rent bills.

And is that due to not having enough money in the bank, or is it the planning side of going, wait, well, my paycheck comes in here, but then by the time the bill hits, it's already gone because it went out over here? That's the second part. Okay. Well, I don't know if you already have every dollar premium,

but we're going to gift it to you for one year just in case. And there's a new feature in there that I think will really help you called paycheck planning, where you list out your income and your expenses, and it will actually show you exactly when you would run out of money in the budget. And it helps you figure out if I need to move some bills around, hey, I need to call the utility provider and have that come out on the 15th instead of the 13th, for example. Okay. And I think that side will help you just get the logistics of the budget down. The other piece is

just paying attention to where your money's going, as well as increasing your income. So are both of you working right now? Yes, we're both working part-time jobs. We've both, I retired six months, six years ago from a 20 year job and she retired a year and a half ago. I say retired, but we didn't retire. We just left those jobs and went to part-time jobs. We had both put in 20 years at our couriers, and we had just seen the writing on the wall. So I'm wondering, you said rent is like a consistent issue every month. How much are you paying right now for rent? We're only paying $7.25. Luckily, we have a very

understandable landlord who used to be a member of our church. Okay. What about your groceries and your discretionary spending? How's that look right now? We don't go out to eat that much. We do eat at home. We both take our lunches to work. About how much do you spend a month on groceries? I'm going to say $500 to $700. Okay. Well, one of the first things I want you to do is figure that out for sure, because groceries, that's one of the top places that people spend and go over budget. And it's also one of the things you have the most control over. So right now I'm doing a no spend month and it's been a challenge, but my family of four is eating on $100 a week.

It's not necessarily easy and it takes planning, but that is a spot that I'm confident with just the two of you, you can get that down to $100 a week. It's not necessarily easy and it takes planning, but that is a spot that I'm confident with just the two of you, you can get that down to $100 a week. And with that, you're looking at another $300 a month, especially if it's the two of you, you could probably do around 50 to 100. So while we're in baby step two, while we're gazelle intense, I want you to look at cutting everything that you can. And I would start there. Well, we do go to Walmart. We do go to Aldi a lot. We've got a 19-year-old who lives with us full-time, so he likes to eat. He is paying us rent.

Oh, good. How much? To help. I mean, he's giving us $400 a month. Wow. We've got to talk to him about his insurance. Okay. Yeah, that could help with your expenses if he's working. And the other thing I would suggest is for a season, you might need to both work full-time to get this income from $55 to $75 while dialing in the budget.

Because really what you need right now is margin. And there's only two ways to get margin. Spend less and make more. And I suggest you do both right now because I want you guys to retire with dignity instead of going, we're retired, but it sure doesn't feel like the dream we once had of retirement, does it? No, not at all. It shouldn't be this stressful. It should be more fun. We should have more flexibility to do what we want to do. And you can get there. I mean, this 30K, this 25K in debt, making what you guys are making, you can pay this off in a year.

And so in 12 months from now, what kind of habits do we have to have in our life in order to get this debt out of our life? And that's going to free up a whole bunch of payments, isn't it? Sounds like a great idea. I mean, that's why we got the books. We finally put the money down and got the books because all the time we've always used the excuse we don't put the money down and got the books because all the time we've

always used the excuse, we don't have the money to buy them. We don't have the money to buy them. You took the first step, which is the hardest part, Jim, is just people going, all right, my plan ain't working. I'm ready for something different. And I love that. And now we've got to take the next step, which is actually the even harder part, which is doing the stuff, putting the actions into place. And so in the baby steps, we're going to get $1,000 in the bank. You may already have that. That's your starter emergency fund. Baby step two, list all of those debts you have, the credit cards, the car loans, from smallest to largest balance, regardless of the interest rate, and start attacking the little one first with all

the margin you can find with your son's rent, with cutting down the grocery bill, with the side jobs. And that will allow you to knock out that debt, free up a payment, and apply it to the next one and the next one and the next one. And so while you're doing that, you're making minimum payments on the rest of those debts until you're completely debt-free. And I know there can be this feeling of, hey, we're in retirement. We don't want to live like this. We don't want to live. We're trying to work less, not more. Right. But it's important to realize that this is just for a season. That's why we call it gazelle intense. You don't run that pace forever. This is not the rest of your life. You run that pace for a year or two so that you can get to that spot of freedom so that you can enjoy retirement without the stress, without the anxiety, without

the feeling like you are down to the last penny every single month. We want you to be able to breathe. We want you to feel financial freedom. And you're not far from that. This is just a season and you'll get through it. We'll be right back. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី Welcome back to The Ramsey Show. I'm Christina Ellis, joined today by my good friend George Camel. Give us a call at 888-825-5225. So there's been some interesting news today, George. And it involves ceilings.

Who knew? Who knew ceilings could be interesting? Well, I don't know if, I mean, it's scary. Interesting sounds like, oh, I'm intrigued by this. The debt ceiling of the U.S. We have apparently hit our credit limit, Christina, and there's a lot of fears of defaulting on this debt, and the Treasury has begun what they're calling extraordinary measures.

Whoa. Juicy stuff. So what's going on? Man, it's interesting. So it looks like we have hit this debt ceiling, and there's debates now. One side wants spending cuts. The other side doesn't want to budge.

Y'all, it feels a little bit like the government right now is like a drunk at the bar who ran out of their credit card limit. And people are saying, no, you can't spend anymore. And they found one more credit card in their pocket.

And they're like, hey, everyone, drinks on me. Oh, boy. Yeah. So the amount of time the department can continue taking steps to avoid defaulting on the debt unless the $31.381 trillion limit is raised is uncertain. And so if you're wondering what this refers to,

it's the maximum amount the U.S. government can spend on its existing obligations. So think things like Social Security, military salaries, food stamps, things like that. And they're voting to raise the debt ceiling. But the question, Christina, that you're raising is the Republicans are saying, hey, if you're going to raise this thing, you better cut the spending, bucko. And the Democrats are saying, no, no, no, hey, don't put strings attached on this. Let's just raise it, guys. Be cool. Be cool. I'm like, this is the opposite of a zero-based budget.

They're basically running on a negative budget. Oh, yeah. I'm like, can we go up to Washington and help them budget? Is that possible? If you ever want just a lot more anxiety in your life, you can go to usdebtclock.org, and it has running numbers for all of the debts, and nothing stresses you out like that.

So much red. Ugh. It's not pretty. So this is something the U.S. has never done, defaulting on its debt, which puts us in a really precarious situation globally because other countries are saying, hey, you guys said you were good for the money. And this is like defaulting on your student loan payment. You can't pay. This is scary. It's scary. And I want to kind of use this conversation. We were planning on doing

an update on student loans anyways. We've had a lot of people asking about forgiveness and what are the latest updates. And so I kind of want to use this conversation to go into student loan forgiveness. Okay. So right now it's supposed to go, the forgiveness plan is supposed to go before the Supreme Court on February 28th. The White House has said that borrowers will resume payments 60 days after the court cases have been resolved. And if the courts have not resolved the issue by June 30th, payments will resume 60 days after that. And I saw something really interesting in an article by Business Insider. It said Congress did not increase funding for the Federal Student Aid

Office in the latest spending bill, suggesting hurdles to come with implementation of these reforms. The administration said that the department is disappointed with the lack of funding and notes that it will present a challenge. So, summary, it's not looking good. It's not looking good. If you're hoping for student loan forgiveness, it sounds like it's going to be more uphill battles, more fighting, more standstill gridlock over at the White House and Congress. And I know that's stressful for a lot of people. You know, I have a lot of friends, a lot of people in my life who have been very excited for student loan forgiveness.

They have breathed major signs of relief over the last year. It was going to allow them to get debt free. So I'm not really rooting one way or another. You know, I think it's just frustrating in general that there's been so much drag in this. There's been so much political turmoil over this. And we just want to say that if you have student loan debt right now, it's really important that you start thinking through how you're going to pay this off. I would not count on this. The U.S. is saying right now that it's out of money. It's running at a deficit, you know, and it's not increasing the budget for student aid. So there's a lot of complications in this. I'm not saying it's impossible. I mean, obviously, it could technically

happen, they could get another debt extension, but I wouldn't count on it. I would not count on Washington and all of this mess going on right now to forgive your debt. I would start working and creating a plan yourself. Get control of your money. Don't wait until June 30th. Don't wait till September. Whenever these payments come back, just start thinking about it for the first time. And if anything, right now, start paying on it because there's not interest accruing. This is the best time to be paying off this debt. You are not accruing interest. So use this as motivation. Don't use this as fear. Use it as motivation to get in control of your finances, to take ownership of your money. Don't leave that control to people

who are literally running a negative budget. That is a scary situation, but you don't have to be scared. You can follow a budget. You can carve out room for your student loan payment. And not only that, you can carve out room to get ahead. Yeah. This whole situation feels like you're asking your broke friend who's about to go through bankruptcy to cover your tab, and the dude's got no money. And so with the U.S. defaulting on its debt, it makes it even more unlikely that they're going to have funding for this student loan forgiveness program. And if the government does default on this, it could cause the financial markets to tank, it could hurt 401ks, other investments, It could hurt the overall economy, the GDP of this country. And so it's definitely a scary situation. And the best thing to do is focus on what you can control. Because if the

dollar loses a little bit of its value, but I still have a bunch of money in the bank and I don't owe anyone anything, I can still sleep better at night. Right. When I see something like this, instead of being like, oh, gloom and doom, this is scary. Everything's going to poo. I'm like, what can I do with my family and my finances to tighten up? How can I save a little bit more aggressively? If you have debt, making sure you pay off that debt, use it as motivation to get even more gazelle intense to press in and control what you can control. Love it. All right. Up next, we have Tommy calling from San Diego, California.

Hey, Tommy, welcome to the show. Hi, thanks for having me. Yeah, thanks for calling. How can we help? So basically, what I have is $115,000 in unsecured debt, and I'm current on everything. It's mainly credit cards and sort of, you know, wondering whether or not I should do a bankruptcy or should stop paying and try to negotiate some of that debt over the coming month. Well, what kind of debt do you have? What's kind of the breakdown? Is it all credit cards? It's $105,000 in credit cards and $10,500 in a personal.

And what's your income? So lost a consistent job about two years ago, then spent a bunch of money starting a new business, and then recently just became employed again. So it's kind of unpredictable what it'll be. I do flip homes and some years I can have an additional $50,000, but on average, I do about $1,000 to $1,300 a year. Okay. Well, the good news is you do not have to declare bankruptcy. You can get out of this mess, and it's going to take some sacrifices, and bankruptcy right now feels like a shortcut to get rid of the pain that you're experiencing and the debt that you're in, but it's not going to change any of your behaviors. And so what was this 105 on credit cards? What was the majority

of that spending on? So I would say the majority of it was on a business that I have some assets associated with. I probably have, if I were to liquidate that business, which is not an option for me, I probably have about $35,000 in assets with that. What's the business? That was most of it. It's a mobile radio controlled shop and track. We do events like birthday parties, corporate events. And then we also sell products.

So I have inventory for that as well. How much does that business make? It's making me about $1,000 to $1,500 a week profit right now. Profit. So that's an extra 50 plus on top of you flipping houses? Right, which right now I won't be flipping any homes for at least another year or two until I handle this debt. Do you have any homes right now that you could sell? I don't. Well, I think we need to get a full-time job then if we're not going to be flipping houses in the meantime. Could you get something in your field? I did, and I'm now working 50, 60 hours a week, but it is unpredictable what exactly my

income will be this year. I'm assuming somewhere around 80 to 100. Okay. If you separated out these debts, how many separate debts are there? How many credit cards? Yeah. I would say there's about 20. Okay. So here's what you're going to do. List those all out from smallest to largest. You're going to go down to $1,000 in the bank.

Make sure you can still cover all your bills. Be on a budget. And start knocking away at those smallest credit cards and the next smallest one and the next smallest one. Hang on the line. We're going to send you Financial Peace University as well as Every Dollar Premium to walk you through the debt snowball to get you on that proven plan. But man, it sounds like you can create income when you want it. And it also sounds like we got to cut all the spending, cut up the cards, close the accounts. It's not your friend. These companies want to keep you in debt at 20 something percent interest. And I'm glad you're done with it.

And you got to go all in on this. We believe in you. We'll be right back. This is The Ramsey Show. I'm Christina Ellis, joined by George Camel. Give us a call at 888-825-5225. Hey, if you're a new listener, I know it can feel kind of overwhelming to know where to start, and you're probably ready to dive in, and we're ready to help you. Now, if you need help, we want you to go to ramseysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your current situation. So that's ramseSolutions.com and click on Get Started. All right, up next, we have Heather joining us from Flagstaff, Arizona. Hey, Heather, welcome to the show.

Hi, thank you for having me. Hey, thanks for calling. How can we help? Well, I'm in an interesting position where my ex-husband is dying of cancer. He just was notified last week that he maybe has about a month to live. So sorry, Heather. Yeah, thank you. So he and I, when we were married, we both got term life insurance policies. I'll speak directly into your phone, Heather.

We're having a hard time hearing you. I'm sorry. Is this any better? That's better. Thank you. Okay. I'm sorry. So we have term life insurance policies, and I am the beneficiary of his policy because

we do have two children together. And I guess my question is, when he passes, should I anticipate that I will pay for his funeral with that money, even if I'm not permitted to plan it because we're divorced? Or I guess I'm wondering, what should I maybe anticipate? Who else would be involved with the planning? His mom and dad. He's currently living with his mom and stepdad, so they'll probably head up the planning, but his dad and stepmom are also around and may be able to help pay for that.

I'm not sure. Do you know anything about their financial situation? I know that his mom and stepdad are not. They make a lot of money, but they spend it all. And his dad has been very good at saving and is worth probably a couple million dollars. Oh, wow. Okay, so what are your kids' ages?

They're six and nine. And how much is the term life insurance? It's for $750,000. Okay. Have you had any conversations with family and his parents regarding the funeral arrangements? Not yet. I've inquired with him as to his desires and thoughts on the matter, and he has yet to get back to me. But he's not doing well.

So his communication, his ability to communicate is limited. And so I'm just wanting to know that, I guess, get your opinion. Like if they come to me saying, well, he has his life insurance, why should we pay for it? That I kind of have an idea of how I should respond my best. Yeah. As far as your legal obligation, I don't think you have one. As far as the relational piece of this equation and emotionally and the kids being involved and the parents being involved, you know, the funeral would probably cost, how much do you think? $15,000? That's what I'm guessing. Yeah. Okay. It could be lower depending on the situation in

your area, but I would at least start to get a picture of what that looks like and start talking to family about it. You don't want any of this to be a surprise and have people angry when you're already grieving this wild loss. So my next step would be to at least, if you can't communicate with him, communicate with the family and say, hey, what would the next steps be? How do we want to handle this? Well, and for sure, starting with the conversation, it's a hard conversation to have, obviously. But then, you know, just kind of depending on how that conversation goes, I would settle in your own spirit beforehand that you may end up paying for it. And that's okay. Because I know a lot of times with funerals, emotions are high. I have heard of so many funeral situations where families get in

big fights over money and they end up not talking and it just gets really, really messy. And given that you do have the money, I would just settle if you do have to pay for it for the kids' sake, for your own peace of mind, I would just not allow the money behind the funeral to break things down. Okay. And another option is just to go, hey, can we all split this evenly with the immediate family? I want to use this money to help set the kids up for financial success, whether that's paying for college, paying off debts that we have as I continue raising them and so I don't think there's anything wrong with you stating those facts are you in a good financial

situation um mediocre I don't I have just a little bit of debt I'm trying to pay but um and you have a mortgage I don't we rent it's just me and my two kids and um I haven't had any financial support from him for a lot since we've been divorced so okay so there hasn't been any ongoing child support alimony no he hasn't been able to work yeah it's a messy situation but I mean I and this is just you know a lot of times when we're in these situations, it's like if I were in your shoes, I would protect the peace in my home at all costs. I mean, not at all costs. You have $750,000. But if it costs the funeral expenses, I would make sure that my peace of mind, the peace

of mind of my children is that they're protected. As someone who lost a father to cancer at seven years old, I know that having my mom be able to feel peace through that situation really helped my brother and I. And I think if there was huge turmoil among the family and there were a lot of arguments, that would have made it 10 times harder on us. So obviously we talk about money here. Money is important. Being strategic with your money is important, but this is also a highly emotional situation. And I would not allow this situation to break down the relationship with your children's grandparents. I wouldn't allow this situation to be something that causes a lot of strife and

discord and turmoil in the family. And make sure that there is a will that is in place, signed, that's up to date. Go over it with the family. It's not a fun thing to do, but it's going to prevent a lot of relational turmoil down the road. And if there's an executor of that will, that would be who would traditionally take care of the funeral arrangements and potentially pay for it. But again, there's no real hard in fact rule around that. So this is going to be some hard conversations and I'll be prepared to pay for it, like Christina said. And it's a small part of that life insurance. And it's one of the reasons we tell people to get it in place

because it takes the financial stress out of something that is already so difficult to deal with. Yeah, and it's just a good reminder for anyone listening to really think through those end of life situations. I know it's not a fun conversation to have. It's kind of scary. It's kind of sticky, but making sure you have term life insurance, making sure that you have a will done so that your family doesn't have to stress and go through a bunch of strife if you do pass. That's just good to handle.

Well, so sorry to hear about your situation, Heather. Wishing you guys the best. Yeah. Next up, we have Fernando calling from Corpus Christi, Texas. Hey, Fernando. Welcome to the show. Hey, guys, I made it. You made it. You made it. Get right to the question.

We're up against the clock. I want to make sure we can get to it. All righty. So my wife and I are getting ready to purchase our first home. We found the perfect house in the price range that we wanted it with the interest rate that gets our payment right where we want it. The thing is we are on a lease in a house that ends in July. There is a house that is finishing building in July 15th, perfect timeline. But there's another one in March that will be ready then and they can guarantee us a 5.5% rate on our loan.

So my question is, do I rush the move and move in March, or do I wait until July to finish my lease and gamble what the interest rate will be then? So when you say rush, what are the financial implications? Are you ready to make that purchase in March? I have my emergency fund ready. I am about $3,000 or $4,000 short right now, but by then, by March, I should have it. For the down payment? Yes, for the down payment. Okay. So what percentage would that down payment be if you had all of it?

5%. Oh, 5%. And that's on a 15-year fixed rate mortgage or 30? 30. Okay. Well, truthfully, Fernando, putting 5% down on a 30-year feels like you're not ready to step into home ownership. And so I would press pause,

and I'm not going to be as concerned about the interest rate if it's going to be a percent more, because if that whole thing sways your decision, then that scares me walking into that financial situation. So I would pause. I would try to get 10% down on a 15-year fixed rate where the payment's no more than a quarter of your take-home pay. And then you're ready to step into home ownership. Appreciate the question. Well, that puts this hour of The Ramsey Show in the books. Thanks to the guys in the booth. Thanks to you, America, for listening. We'll be back soon. This is The Ramsey Show. Hey, it's Christina Ellis. If you like what you heard in this episode

and want to know more about getting started on the Ramsey Baby Steps, go to ramseysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramseysolutions.com and click Get Started.