The Ramsey Show - App - I Feel Like a Lost Cause (Hour 3)

Episode Date: November 10, 2023

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life by helping you win with your money, in your work, and in your relationships. I'm Ken Coleman. George Campbell joins me. The phone number is 888-825-5225.

That's toll-free America, 888-825-5225. Grand Rapids, Michigan is where we start this hour. Kate is there on the line. Kate, how can we help? Hi, thanks for taking my call. How are you doing? Well, we're having a blast. What can we help you with? I feel like I'm a lost cause and I'm possibly stuck where I'm at and what I'm doing. Well, let me start by saying, number one, you are not a lost cause, and you are not stuck. My guess is you've chosen to stay put because of fear and doubt.

How about that? Well, I've been let down a lot when I was debt free at one point. A few times actually, a hundred percent. Like my phone or not my phone, hello, sorry, my car, my student loan and everything, credit cards were all paid off. I'm good to go. Had cash to my name and I tried to get a house and all I heard was no and no and no. And I'm a single parent of two kids, and it's extremely hard to get out of the subsidized housing I've been in for 10 years about. And I'm tired of having to tell them when I get more money, when I don't get more money, and just the fluctuation, the paperwork,

and it's already hard raising two kids on my own, and no dads to help. I'm sorry. Well, George and I are going to help. We're going to help. I only work part-time as a parapro in a school for $16 an hour, and I feel like I really want to work full-time. I know you do. And I really want to, you know, bust it out and break free of this,

feel like a cell in my heart and in my home. I want to get somewhere, and I feel like I'm just, no one knows anything in my family about money, and I feel like all I knew was saving and debt. And I never knew about all this other stuff until I watched Dave lift up the screws to people. Well, listen. Which is nice, because I need that kick in the pants, listen. Which is nice because I need that kick in the pants too. Yeah. Well, let me tell you what you need. You need some confidence because I believe that you have what it takes to repeat the process of getting out of debt. You've done it before, so I know you can do it again.

I also know that you're up against it right now because you're just simply not bringing in enough income. No. I mean, it is were bringing in more income. I'm afraid if I get out of here, how am I going to make it? Well, so income. Okay. Income and a budget. All right. So let's talk about the income piece for a second. All right. So what would you need to make financially to be able to get out of subsidized housing and get a decent place to rent for you and the kiddos? What's that number?

Oh, I honestly don't know. Okay. What's keeping you? The subsidized is so low right now. It's like $107 for my rent, but that's feasible. But regular rent around here, it's anywhere between $1,200 and $1,500. All right. And I may be bringing up $1,500. There's a number. Kate, Kate. All right, you got rent around here, it's anywhere between $1,200 and $1,500. All right. There's a number.

Kate, Kate. All right, you've got to listen now, okay? You're making a lot of excuses, and I know you've been through a lot. I know. We can't make any more excuses. So you said you need somebody to kind of give you a little kick in the pants, and I'm going to do that as gently as I can. George is a lot nicer than I am, but I'm going to be nice. I'm good cop.

He's bad cop. Okay. No, but listen. We've got a number now. Let's take the highest number just because it's going to help us. George and I are going to do this together. Okay. Now, George is going to help out on the budgeting and all that kind of stuff in a second, but I want to get this income factor figured out. All right. So let's say $1,500 a month is something that that gets us a nice place to live. And oh my gosh, how happy would you be if you could easily afford a $1,200 to $1,500 apartment?

How happy would you be, Kate? Tell me. I honestly don't want to be in the apartment anymore, though. Okay. Where do you want to be? Kate, stop. No, hold on. I want to take the big leap of getting a house.

Kate. We've got to take a baby step for now. Kate, you've never played basketball and you want to dunk. It doesn't work that way. Stop that right now. Stop that. Okay, an apartment that is not government subsidized housing is the next goal. Yes or no?

You better say yes. Yes. You're only working. Okay, here's the deal, Kate. You're only working part-time as a parapro in a school making $16 an hour. You are not making enough money. You are a mama bear who has gotten put in a tough situation because of deadbeat dads. These guys, if they were in this studio right now, I'd get after them with a wiffle ball bat

because I couldn't hurt them bad enough to really put them in the hospital, but I'd sting them good. They're jerks. They're lowlifes. They're lazy. They're punks. All the words that I can say on the air. And I understand that. And it sucks. But you're the mama bear and you got to take care of those kiddos and you are worth way more than $16 an hour. So you've got to go work at Walmart or Kroger or somewhere or Target where they're paying a lot more than $16 an hour. They're paying health care benefits. They will even pay for your college education. Walmart has made this a national program. Kate, I'm giving you one idea.

I just got out of Walmart. I don't care. Go back. And it wasn't no $20. It was $14, and that was still part-time, and I had to be there one day a weekend, and I have no sitter to watch my kids. You've got to find somebody. You've got to find an old lady who goes to a church that you go to. You've got to stop making excuses and you've got to start making things happen. So income is what you have got to do. You have got to make more money. If it's two jobs, three jobs, and we find somebody to watch the kiddos, you can find a way. And then George, what has she got to do with that money? Well, we're going to put it to use in our budget, Kate, and I'm going to throw some things at you. We're going to gift you some stuff to help you take that right next step, because we only have a minute here on the air. But how much debt do you have?

I am whittling my last, or I'm plastic surgering my last Discover card at about $4,900. Okay. So once the $4,900 credit card bill is gone, you're completely debt-free? Completely. Good. Yet again. Do you have any money in the bank? I have a little problem with gambling and drinking. I have two addictions as well.

Are you seeking counseling and help for that? Yes, I am. Okay. Good. So we're going to get you on some good footing on that side, on top of getting you out of debt. Do you have any money in the bank? I keep that very minuscule, so basically no, just enough for my bills so I don't go and use my debit card for purchases I don't need to.

Okay, that's good. Well, what I'm going to do is I'm going to set you up with one of our Ramsey financial coaches on our team, and I'm going to gift that session to you so they can take some time, pour into the details, and walk you through this. On top of that, I'm going to gift you one year of every dollar premium. I'm going to gift you Financial Peace University. Watch all of those nine lessons. Begin to make a budget. Even if you don't have a lot of income, make the budget. Income, then your expenses. Then we know what the gap is. Then we can see what we need to do to get

out of this debt, to build the emergency fund, get on our feet, increase our income, like Ken said, and get out of this cycle. We believe you can do it. There's nothing that a mama bear wouldn't do for her kiddos, and you're going to have to choose those kiddos right now, and you're going to have to work like you've never worked before in your life. Is it going to be really hard? Yes. Is it doable? Yes. Are you the only single mom to ever have to do it?

No. You've got to choose. Today's the day to choose. Your babies and their future. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by George Camel, 888-825-5225, 888-825-5225. When you were growing up and you were in elementary school and your name was said in front of the class,

did you ever think anybody would say it the way I just said that? No, you hit that in a beautiful way with a lot of punch and gusto. That was not said by my third grade teacher. Yeah, I just want to make sure that you paid attention to that. Thank you. I appreciate the affirmation. All right, very good. It made me feel good, if nothing else. All right, Russell's up next in Phoenix, Arizona. Russell, how can we

help? Yes, thanks for taking my call. How are you guys doing? We're having a blast. What's up? Yeah, so my question is, my wife and I just recently got on board with starting the Baby Steps. And so we just got every dollar budget and created the budget. So this is going to be probably the first real month of budgeting and doing that kind of stuff on both of us together. And so by the end of this month, we should be doing Baby Step 1 of getting our $1,000. So I'm trying to prepare all of our debts for the debt snowball for baby step two. And the question I have for you guys is we

are in quite a bit of debt, um, almost $200,000 in consumer debt. And I have three car loans that we are upside down on all three. And that is the main question I'm calling about is I'm trying to make the plan for how to get rid of at least two of these cars. But at this point, I don't have the extra to cover what I'm under on them. And because of my credit and my being so low, I'm not able to get a personal loan for them. And, and, and because of my credit in my, you know, being so low, I'm not able to get a personal loan for them. So I would have to save up the, the, the extra. So that's where the kind of meat of the question is, is so I know I want to get rid of at least two of these cars. I know how much I would need to save in my debt snowball. Should I put the

amount I need to save further up in the debt snowball? Like if I need $5,000 to pay off one of the cars, should I put that $5,000 in that order? Because the car, I would owe $15,000. I would need $5,000 in order to sell it. So that's kind of my question. You're basically saying, should I just kind of pause my debt snowball, make minimum payments, while stacking up the cash needed to get out from under this thing? Well, either that or just pretend those cars are $5,000 and do my debt snowball.

But instead of my car being at $15,000 in the debt snowball, I put my car at $5,000 in the debt snowball. I think saving up as much cash quickly and getting out of this thing is going to be your best bet to gain some traction. So tell me, what are these cars, how far underwater, what do these loans add up to on these cars? Yes. Okay, so all three, so the smallest one is $15,000. Okay.

Then the next one is $27,000. And then the biggest one is $15,000. Okay. Then the next one is $27,000. And then the biggest one is $49,000. Okay, go through those again. $15,000, what is that car worth? Okay, so the $15,000 is worth the highest I could probably sell for on personal sale. It is about $10,000. That's if I can get like the max of it. Okay.

Then the next one is about $ grand. That's if I can get like the max of it. Then the next one is about 23, maybe about 22, 23,000. And the biggest one, unfortunately, I bought in the height of car prices during the pandemic. And that's only worth about 35 to 37,000. Okay. All right. What are the total payments payments between these three loans? Yeah.

So smallest is $424,000. Oof. Then $589,000. And then $1,033,000. Oh, boy. Where are the total? Over $2,000 in car payments. Wow.

Man. No wonder you can't breathe. And that's not even all of your debt. We still got no, what's the other debt? Yeah, so the other debt is student loans between my wife and I, maybe about 25 to 30,000. I have the numbers, but not in front of me, so I don't remember exactly. But it's about $2530 for student loans. Active credit cards, maybe about $5,000. And then I have a credit card in collections for about $9,000.

Okay, and that's everything? That doesn't feel like it adds up to $200,000. Yeah, I wish I had my every dollar budget. I just did it all in every dollar. Okay. It seems like there's a big, there's a gaping hole here where you got some other debt. So you only need, you said, you thought about.

Oh, solar loan, sorry. I have a solar loan for about $40,000. There we go. Oh, boy. Okay. Oh, boy. That's all right, yeah. Man, well, first of all, is there a spending addiction here as to how you got into it?

You kept buying all these cars you couldn't afford, and did you roll negative equity into the next one and the next one? So, that was part of it. A part of it was rolling negative equity into the new cars. The other part of it is a couple years back, my wife and I were in a bad spot in our marriage, and she was kind of desperate to find something to make her happy, and she bought a third car.

So there was relationship issues which caused spending, plus just rolling negative equity into some other vehicles. So it was a mixture of both. And for the last year, I've been trying to work with my wife to try to get back on track. And so finally, this last month, we both agreed it was harder to convince her, but she finally got on board. That's why I'm calling now is now I'm not. Okay. You're on board. We're ready. Yes. What's the household income? Household income, let's see, net bringing home is about right under $10,000.

$10,000 a month net? Yes. Oh, my. Okay, so in your budget, how much margin is left after making all your minimum payments, all $2,000 of car loans plus all the other debt? Is there anything left? Yeah, so we just did every dollar we reached the budget and for like this month we had a couple extra things to do this month like

getting tires for one of the cars but besides that our normal what we have left to throw a debt is between around eight to uh eight hundred to a thousand dollars month. If we cut back on spending, eating out, that kind of thing, there's about $800 to $1,000 a month. Okay. So I want to get to something really quick, George. He said he was worried that he couldn't sell the cars because he couldn't get a personal loan, but it doesn't seem like he's got bad credit. You're making payments on all these things. So you probably have a, you know, you could go get the, sell all three cars and then just consolidate the difference into one loan from like a local credit bureau. Well, yeah, where do you have all these loans through? Is it through one place, multiple places? Yeah, the car loans are multiple,

so, you know, you got Kia Finance and then you got Ally and then you have another one for the third one. I did already try, because I was already thinking about how to do this, and I did try already to get a personal loan. You need to walk in there and ask for the manager and say, listen, you guys have a bad loan on your hands, and here's what I'm asking you to do. Cover the difference and allow me to take that on as a personal loan, because right now, you have a loan out for $15,000, and the car's only worth $10,000. Okay. And so you need to be real clear with them that this thing's about to get repoed, or we could solve this if they're

willing to give you the difference so that you can get out from under it. You and your wife need to show up with the manager and talk through the situation and explain exactly what's going on with these numbers and say, listen, we want to get out of this thing. We want to give back this money. We need to get these personal loans done in order to crawl out from under these underwater cars. But outside of that, the only other way is to save up the difference and knock them out one by one. And that, to me, is going to be your A1 going forward. Let's save up $4,000. Let's get out from the $27,000.

Let's save up another $5,000. Let's get out from the $15,000. And so as you do that, you're going to free up $2,000 worth of payments that we can use to attack the other debt. I think you're working two and three jobs too. You need to up the income. Yeah. You've got to take what's the $800 you can throw towards debt and you've got to double that. You guys are selling everything, man. And cut up the cards today. I mean, you're working like crazy. No more cards. Debt is off the table. We're going to have to find out another way to do it. No more car loans.

No more credit cards. No more solar loans. No more living la vida loca. We had our fun and it about destroyed our marriage. Let's try something different. So hang on the line. I'm going to send you Financial Peace University and I'm going to send you EveryDollar Premium. Since you're already using EveryDollar, this will upgrade you.

You can track transactions, use paycheck planning, all kinds of features. But man, we hope you get out of this and I hope it's a beautiful redemption story. Ah, here's the Tums. And James brought in the Tums because Ken's antacid. Anytime I see more than a thousand dollar car payment. Two thousand in car payments alone. Oh, this is a fresh jar. I'm going to have to open this up on the commercial.

Oh, there it is. By the way, special bonus points if you can tell me who sang Live in La Vida Loca. Ricky Martin. Leather Pants. Final answer. Ricky Martin and Tums for the win. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman.

George Campbell joins me. The phone number for you to jump in is 888-825-5225. But before we take more calls, in the lobby of Ramsey Solutions standing on the debt-free stage Jackson and Hannah from the Lincoln Nebraska area welcome you two. Hey how you doing? All right you guys are here I guess to do a debt-free scream I presume. Yes. Awesome awesome awesome all right let's get the numbers here how much debt did you pay off? $26,131. All right. $26,000. And how long did that take? Eight months. Eight months. Okay. What was your range of income during that time? It was $77,000. And at the end, it was $81,000. Nice. And what do you guys do for a living? I'm a bank teller. Okay. And I am an engine

overhaul technician for airplane engines. Whoa. We thank you for your service, my friend. Thank you. You want that guy to be, you want him to be fresh on the job. Absolutely. Paying attention. All right. Very good. Okay. So eight months ago, you guys are a young couple. I think that's fair to say. How long have you been married? Two years. Okay. So what happened eight months ago where these newlyweds decide, let's get out of debt? So it was, we got married in 2021. And then a couple months later, we decided to buy a house in another state in Kansas. And so after we moved there, I was still working in Lincoln, Nebraska, and it was just getting really hard. We were using credit cards. I owed money on my truck. I owed money to family

members because we borrowed money from them to pay for the down payment for the house because we were broken. We couldn't afford it. And so several months passed by and I buy a camper so I can stay up in Nebraska in the camper because it's cheaper. I got a loan for that. And when I went to go pay the taxes for registering it, we didn't have any money. And I just, I kind of broke down because I had to put it on a credit card in order to even pay the taxes for it. And I decided then like something needs to change. And luckily we were able to sell the camper and that's why it's not included in the debt.

And I was just like, I got to get out of this. And I was mainly doing the finances, so I was kind of taking it all by myself. So did Hannah know about the stress that was happening? I really didn't have any clue. And my family, my dad always handled all the finances and my mom kind of really didn't know what was going on, just knew that everything was fine.

And you were following the same footsteps, it seems. Yeah, yeah. So when we got married, that was kind of like, oh, he's gonna take care of everything and it's gonna be fine. So you think, hey, our, it seems. Yeah, yeah. So when we got married, that was kind of like, oh, like he's going to take care of everything and it's going to be fine. So you think, hey, our life is fine. Yeah, until... This is all going very well. Yeah, until one day he comes to me and is like,

hey, our credit card bill is $5,000 and there's no way we can pay for it. And then it was kind of like, oh no, we need to do something now to get ourselves out of this. So what made up that 26K? What kind of debt was that? So it was a truck loan. It was money from family for the down payment for the house. It was like I owed money on my phone from my cell phone carrier,

different credit cards, just kind of the works. All the normal stuff. Normal stuff. Potpourri of payments. All right, so I want to go back to that moment. Okay, you find out that you guys are in debt five thousand dollars specifically on the credit card and you don't think you pay it what was the conversation what would you guys do next so i contacted my sister-in-law shout out to you emily um because i was going to do the zero percent intro balance transfer to the new card

and she had done that before on on one of her cards and so i was going to try that and she mentioned to me this debt snowball and i was like well what is that um you know paying the highest interest first would make more sense right uh so then she said it was from dave ramsey and i was like oh dave ramsey's just that rich snob who tells people to pay for things with cash because he's so rich he was here to hear that yeah he would love that he loves that i'm kind of glad he wasn't here for this one. He's heard it all. No, trust me. He actually loves that. It's weird.

But then that night, I was just sitting there, and I was thinking, you know what? Maybe we should try this. Maybe we should try this. So at work, I started listening to the podcast on Spotify, and I started doing the Dead Snowball, and then I'd come home, and I'd talk to her about it, and we just went game on from that moment. You and I, our plan hasn't been working. Let's listen to this rich snob apparently he's helped some people exactly that's incredible what was one of the big sacrifices you guys made as a young couple trying to start out your life trying to live this lifestyle what'd you have to cut out um well i love coffee i love going to you

know all the coffee shops and stuff and so you know that was like a big like okay we really need to cut out everything that's not necessary and coffee is not necessary did you go uncaffeinated or do you just make it at home brewed coffee at home yeah okay less exciting yeah did you go cheap coffee oh yeah for sure store brand like yeah yeah nothing makes you want to get out of debt like drinking generic brand coffee at home you're like i'm ready to get back to the lattes yeah we got rid of the uh subscriptions as well like netflix amazon and we actually were spending less on amazon after we got rid of prime there you go thank you for proving i always tell people listen i know prime hurts to cut but you're

gonna also spend less on top of saving on the subscription. It works. Yeah. Wow. I'm proud of you guys. That's a lot of sacrifice to make as a young couple who loves convenience and caffeine. Yeah. That's impressive.

Now, what was your support system through this? Who rather was your support system? Yeah. Our support system was pretty much both of our families and pretty much all of our friends. And even though they might not understand everything that we're doing, they're always like, go for it. You guys are doing awesome. Congratulations on being debt-free and everything. And so we got really lucky in both of our family. And some of my family members have started this journey as well. And I got them going on this too. So what led to the increase in income? I'm

always fascinated by this stat. It's almost a guarantee that when we have a debt-free couple or a person up there, that their income always increases. I'm curious what you guys did to see that pump. I got a second job that I absolutely hated working in retail. That's even better. Can you tell us the name of the retailer? George. I'm just curious.

You are curious, George. I'm a man of retail. I used to work a lot of retail. I didn't hate the company. yeah can you tell us the name of the retailer or george i'm just curious what you know you are curious i'm a man of retail i used to work a lot of retail so i didn't hate the company i just hated you know i had already was working 40 hours at my full-time job exhausted and it was always like right after my job at five five to nine so it was kind of like my my day was really long that's right yeah yeah was it worth it all oh yeah for sure the little bit of like my my day was really long that's right yeah yeah was it worth it all oh yeah for sure the little bit of extra money that i was able to to contribute towards our overall income just made me feel really good and he was putting in a lot of extra overtime hours luckily he was able to oh good have that flexibility with his job at the time so look let

me tell you something eight months okay that Okay. That's incredible. Wasn't a life sentence. I mean, you guys knocked us out in eight months. I understand it was 26,000, but still eight months, you guys got after it and now you're on the other side of it. So what would you say to maybe some other young couples that are early on in their marriage and they're staring at some debt? What's the key to getting out of debt from your journey? What would you say? Be on board with one another. I think we were really lucky that we were both like, okay, let's do this right away. We didn't have to convince the other one. And kind of just that unity of having the goal at the end of the finish line and being able to just,

you know, do the work that it's going to take because it's going to be hard, but it's 100% worth it. And sacrifice. You need to sacrifice. Sacrifice your time to be hard, but it's 100% worth it. Ed, sacrifice. You need to sacrifice. Sacrifice your time to work more, to make extra money. Sacrifice your subscriptions. Sacrifice eating out. It is worth it to go through this. And being on the other side of it, it is incredibly worth it to be debt-free. Well, there's freedom on the other side.

A lot of people think, come on, man. Jackson and I, YOLO. I got to enjoy my life. I got to eat out. And here you are with such freedom on the other side, with so many options, with so much margin to give, save, spend like no one else. What's your next big goal? So, you know, we're investing 15%.

We have our emergency fund. Another thing, you know, our starter went out a couple weeks ago and we didn't even worry about it because, you know, we have an emergency, and we were able to just fit that in the budget. But the next big thing definitely is cash flowing my flight school, and that's what I'm doing right now. So we're able to do that because we're debt-free. Did you say flight school? Flight school. Awesome.

Yeah, now that's expensive. It is very expensive. I want people to hear this. What is flight school going to set you back? Like $100,000. Okay, I want people to hear this. This is a young man who goes, all right, we're going to cashflow this. Absolutely. Because a lot of people would reckon themselves into, well, I reckon it's worth it if I take on the loan for that. Good for you. And you know what

it's like to wait on something and you're going to get there. You're still young. How long do you anticipate it's going to take you to save and finish? Probably five years or more, honestly. Yeah. But it's going to be worth it when you're up there in the friendly skies. Get free, baby. Yes. Hey, we've got the live and give box for you, and we'll make sure to get that to you with all the books and FPU and all that good stuff. You can give away total money makeover to someone, and then you're on your way to being a baby step millionaire. Great young couple. Here we go. Let's get to it. Jackson and Hannah, the Lincoln, Nebraska area, paid off $26,000 in eight months, making $77,000 up to $81,000. Let's hear your debt-free scream.

Eric, I know you're watching this. Pay off your car loan. All right, ready? Three, two, one. We're debt-free! Oh, watch out. Wow. That was electric.

Yeah, because he shouted out somebody. Hopefully he didn't have your volume up too high, but that'll put some pep in your step to get out of debt, America. I love it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me, and we've got to get to a couple things here, George. And we've got a fun announcement to make, but first our scripture of the day, 1 Corinthians 15, 58.

Therefore, my dear brothers and sisters, stand firm, let nothing move you, always give yourselves fully to the work of the Lord, because you know that your labor in the Lord is not in vain. And not sure how we got this quote. Not sure who picked this one, but it's from Ozzy Osbourne. You've got to try and take things

to the next level, or you'll just get stuck in a rut. I'm not going to lie. That quote was from a day that we thought Deloney was going to be on. Okay. That explains that one. That makes sense. Only Deloney would appreciate that quote. I'm not even sure what any of that means, but thank you, Ozzy.

I just think, all aboard. There it is. Ken, I want to call out real quick. Oh, yeah, big news, by the way. Veterans Day. Yeah. It's coming up, and the way. Veterans Day. Yeah. It's coming up. And in honor of Veterans Day, we are giving away Financial Peace University to 10,000

veterans totally free to honor them now through Monday, November 13th. So make sure if you've got a veteran in your life, most of us do, they want to take FPU for free, have them go to ramseysolutions.com slash veterans and fill out a real simple form. We appreciate them so much. We honor them. And I hope you all enjoy the holidays. We remember so much sacrifice all over the country happening daily.

We get the calls from many service members. Thanks to our veterans. Sacrificing, moving all over the country. And we appreciate them. And please, if you know a veteran, even if they're not in your family, please let them know about this. We really would love to extend this offer to those fine folks. Absolutely.

Real quick, before we go to the call, back to the calls, George. Big news in the financial world this week. I know it probably hit your little phone with all your little money alerts that you get. It's a normal-sized phone, Ken. I'm kidding. I'm kidding. Yeah, I didn't mean it that way, but now that you caught that, that's fantastic. In your little teeny tiny phone, you probably got an alert about Mint, which is a big budgeting service

owned by Intuit, I believe. Yeah, Mint is officially closing down, and it was the largest free budgeting app out there with 4 million budgeters, and at the end of the year, it's closing. Wow. And we've been in the personal finance space for decades now, and you don't want some fly-by-night budget that's here today and sold tomorrow that was also selling your data, by the way. That's how it was free, and they were pitching all these loans and credit card products. Budgets and loans just don't mix. Glad I didn't sign up for me.

Yeah, so I want to invite all of those who are using Mint to go use EveryDollar. You can use it for free. Go to EveryDollar.com, and we've got the premium version with all kinds of features, and we've got a killer deal going on right now. So go to EveryDollar.com, and you can go to EveryDollar.com slash George to get our deal that we just dropped. So if that's you and you're looking for that new budgeting financial platform, every dollar is going to be a game changer. So we welcome you guys with open arms. Very nice. And you have

your own URL. They gave one to me. And so I figured, let's use it. I want to give these people the best deal possible. You should call your mom. That's a big deal. She's very proud. She should be. And we're not selling their information. We don't sell your data. And I guarantee you, we'll never sell you debt products. So there's one bonus. Look at you. I'm telling you. All right, let's go to Daniel in Sacramento, California, who's patiently waiting. Daniel, how can we help?

Hey, guys. Thanks for taking my call. So my wife and I, we've been really blessed. We're currently in a situation where we have a lot in savings, and the only debt that we have left is our mortgage, which we owe about $164,000 on. And our savings as of today sits around $168,000. And it's just been kind of sitting there because we're not sure what to do next. And another thing that is kind of making our decision with what to do next a little more difficult is that our, our income recently changed and now, uh, we're taking in quite a bit less, uh, per month. And, um, what happened?

I was hoping to get, get your advice. Uh, my wife decided to stay at home. We had the, the, um, the, I guess financial security financial security to make that happen. She's staying at home with the kids and working part-time now. And so we have to take, we're both teachers, and so we're taking the teacher health insurance for our family, and it's really expensive. So technically our net is about $100,000,

but we take home about $5,700 a month. Okay. And what's the mortgage payment? That's $1,400. Okay. And you've got enough in savings that you could pay off the mortgage today, but you're a little nervous. Yes. And is that all of your savings that include your emergency fund or is this outside of the emergency fund that's everything okay if i'm in your shoes daniel and this is controversial advice but i would get up to where you have an emergency fund of let's say three months right now maybe

closer to six since you just dropped an income then once you hit that number i'm using the rest of that savings to clean out the mortgage. Be done with it. Okay. Wouldn't $1,400 back in your life make it easier to make this transition? Absolutely. Yeah. What's your other option? What were you considering doing? In the meantime, would it make sense to throw, until we build up that emergency fund, would it make sense to throw some money at the mortgage or just keep making the single payment every month? I mean, you can. If I'm in your shoes, I'm taking everything beyond six months and throw it at the mortgage. That's going to

take your balance down to almost nothing. And so the next few paychecks, you'll just knock out the mortgage with those next few paychecks. So either way, you're going to get there. Personally, I think using that money now to throw at the mortgage is going to be very freeing and it's going to get you real excited. You know, when you go from $164,000 mortgage to $150,000 mortgage, I mean, sorry, down to, you know, $15,000 mortgage, you're going to freak out at how close you are to that finish line. And this transition to where she's a stay-at-home mom becomes, it's a no-brainer. You're just like, oh, all right, we can live like that. You're going to get that $1,400 back, or at least most of it outside of your property taxes and homeowner's insurance. So Daniel, what George has laid out for you is forced momentum. You're just going to

be at the point where you're like, wow, that's all we have left and we have no house payment. And then to George's point, you go, we just gave ourselves a $1,400 raise. Now, the question is, does that make sense to you, A, and then, B, does it still make you nervous cutting a check that large? Yes, it does make sense to me, and I think I'd be less nervous once we have that emergency fund for three to six months. You have it. You've got $168,000, and is it sitting in a savings account, in a high-yield savings? It is in a savings account, but it is not in a high-yield savings. We have it with just a brick-and-mortar bank.

Boo. And it's getting about... Easy, George. I'm sorry. Well, it makes me sad for him because, I mean, right now, it's some of the best savings rates we've ever seen.

I'm kidding. And you could be getting 4% to 5%, which, again, the point is not to make money on this, but it'll at least make you feel better. Daniel, the point that George is making, and you already have your emergency fund, so whatever that number is, what's six months of expenses for you guys once you don't have a mortgage?

Right now, we're actually spending pretty close to what we're taking in. California is really expensive. But minus the mortgage payment, right? Oh, yeah, minus the mortgage payment. A little over $4,000 of expenses? Yeah, about $4,000. Okay, so let's call it $25,000 is your emergency fund out of that $164,000. The rest, let's throw out the mortgage.

Yes. See, that's what we're getting at. You don't have to wait. Right. So now you do it all in one fell swoop. You have a six-month emergency fund, three to six months, and then you have very little left on that mortgage. That brings your mortgage to 25 grand balance.

Wow. And then the next few paychecks, you're going to knock that thing out by the next, what, six months or so? Year? Yeah. You with us, Daniel? Yes. I love that.

And you know what? If you regret it, you can always go back into debt. We like to say that because it's a good reminder that debt will always be there to pretend to be your friend, but I don't think you're going to go back. I think it's going to feel real good to own your house free and clear in California. You know how rare that is, Daniel? Yeah. What will that house be worth? It's close to $500,000 right now. What's in your nest eggs? Oh boy. In retirement? Not much. I mean, we're still

pretty young, but I think about 60,000. Awesome. You're on your way, man. Babyset millionaires in your future. Dan, you feel good now, buddy? Yeah. I'm excited. I want to pay off Daniel's mortgage. I think you're a little more excited than he is, but we've got to give him a minute

to let it all soak in. We just hit him with a lot. That's a lot. And George, you practically yelled at him. Sorry. So we'll talk about that later. I get excited about being mortgage-free, Ken. What can I say? I have no life. I get it.

You are the man. Hey, always fun to be with you, partner. Good times. Great, great show today. I want to thank Captain James, old captain, our captain, and the guys in the booth. And you, America, for listening. This is your show. This is The Ramsey Show.