The Ramsey Show - App - "I'm 49 With Nothing Saved For Retirement"

Episode Date: November 13, 2025

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Normal is broken. Normal is broken. Common sense is weird, so we're here to help you transform your life from the Ramsey Network in the Fair Wins Credit Union Studio. This is the Ramsey show. Excited to be with you today. I'm Ken Coleman alongside George Campbell. The phone number to jump in. Triple-8-8-8-25-2-25-2-5-2-5-2-5-2-5. Let's go to Kate here in Nashville, Tennessee.

Kate, how can we help? Hey, guys. How are y'all doing? We're having a blast. What's going on in your world? Okay, so I am, I think I'll just throw stuff out, and then y'all can ask questions. I'm 49.

I'm divorced five years, and I have been renting, and I have nothing in savings. I am on Baby Step 2 and will be debt-free at the end of this month. Awesome. And I'll be going into, of course, Baby Step 3 and hopefully into Baby Step 3 be really quickly. I believe what I'm looking for is some encouragement. or and or advice on, you know, if I need to make some changes, if I need to do more. So, yeah. Wow. So how long ago was this divorce? Is it finalized?

It was five years ago. Okay. And did you walk away with anything? Any assets? Very little. Okay. And no alimony or anything like that? No, unfortunately not. Okay. What do you make? make? Well, it, I hate it when people say this. It varies. I own a residential and commercial cleaning company that fluctuates. And so this year, I kind of tick like a rest year. I had surgery in January and I was burnout at the end of last year. But I'm still making and bringing in pretty good money. I'm bringing in right now around between $9,000 and $10,000, you know, my take home.

Fantastic. Good for you. So you've got a whole team that's running the show and you took a break as far as you're not, you know, physically doing any of the work? Well, I, for until May and then I had to get back out there. I am one who needs to be moving. If not, I get depressed and eat. This is not a good situation. So I am out there with my employees, yes. Hey, a real quick question. I don't want to spend a lot of time on this, but I just feel like I'm supposed to ask. What's going on in your personal life? Are you trying to date? Are you getting back out there? It's been five years. You know, are you experiencing loneliness, isolation? I just want to know where you stand on that.

I am pretty peaceful at the moment. I did do some dating, and it was just trash. So I'm not in that scene right now. I think I'm focused more on getting my life back in order or getting it in order, period. Great. What about friends, though? What kind of friendships do you have? I have some friendship, you know, I have great friends at church

and Bible studies and things like that. Perfect. Okay. I just wanted to make sure you weren't trying to do this alone. You've done some great stuff. But when I hear burnout, the business, I just want to make sure that you can. got community around you because the baby steps alone, George, are hard enough and you've done so

well. Now, you set us up, but what's your specific question? Where can we most equip you or encourage you today? I think my concern is my retirement. You know, with me renting at the moment, no money in saving. I've got my emergency fund and that's it. How long has it been since you You've got the emergency fund funded? It's not the fully, it's not the, I'm just the baby step two, but I guess. Okay, I apologize. All right. So let's let's bring George in here because you're in the middle of baby step two, your mindset doesn't need to be focused on retirement, George.

Yeah, so six months from now, will you have that fully funded emergency fund in place? You'll be debt free with that savings? Okay. Yes, I do have the Every Dollar app, and it is phenomenal, phenomenal, by the way, I love it. And it gives me a really good hope for my future, but, you know, I just want to hear what you guys have to say about it. Well, yeah, I can show you the math, because that's the best way to show you the reality. And if you don't like it, you can make some changes. So we recommend 15% of your household income going into retirement once you're debt-free with the emergency fund.

So let's say by summertime, will you be 50 by then? I will be 50 in February, yes. Perfect. Okay, so let's say you're starting at 50 with nothing in retirement. Mm-hmm. And your household income gross, like on your tax return, what is that going to show that you made? $150,000, $150,000?

No, I don't think it's going to be that. I don't know, I'd say probably around $100. Well, you told us your take-home pay is $9 or $10,000 a month. month. That's what I'm bringing in right now. It fluctuates, so I really don't, you know, and I wasn't working in the front of this year. That's okay. I like a conservative number. 100,000. It's a good number for this exercise. So that's 15,000 a year you'd be investing. Are you tracking with me? 15%. Yes. So per month, that means 1250 is going to be going into investment accounts of some sort. From age 50 to 67, if you did that, you would have,

three quarters of a million dollars by 67. That's not a terrible nest egg considering you're starting from scratch at 50. Now, that's assuming your income never goes up. That's assuming you never get a home and pay it off. And so that gives me some hope that you can't create a little nest egg for yourself. Now, I don't know what kind of lifestyle you're looking to live in a retirement. I assume you want to live pretty comfortably. And that means we've got to get the income up. We might need to work longer. You know, we can start to tweak some of these variables if you want to see a bigger number in that retirement account. Yeah. How does that hit you?

It sounds like you are completely deflated. Yeah. No, no, no, I'm thinking. Okay. Let me throw something out there, okay? It's not part of the Ramsey plan here, but I've held my tongue a few times recently, George, when we've had calls like this. I'm going to throw it out there. Okay.

All right? I'm not scared. And Kate, this is coming from like the friend, the brother. you know, we're close to the same age. Yeah. I like that you're in a place of peace and you're getting your financial house in order. But I'm going to tell you something. Get further healing coming out of that divorce.

Get yourself out there because what George just gave you from a number standpoint doesn't take into account a really good man out there who has his financial house in order and we combine finances and we live a really great life. So you're not in this alone. That's assuming it's a solo journey forever. And Ken is believing more for you. I am. not putting pressure on you i'm not i'm not i'm not giving love advice come on okay good so you are

hopeful for it yeah i mean good well listen you got listen you got to put yourself out there and again that's a variable that completely changes changes all of this we meet some guy who who equally has been hurt and he or he's never been married whatever whatever whatever and uh i believe that you can find that guy i believe that and uh we get on the same page with money and this this whole picture changes Just putting it out there. Just remember this, Kate. It's not too late. The best time to plant the tree was 20 years ago.

The next best time is today. And today is here. And you've got a great income. You've got a bright future ahead of you. And I fully believe you're going to retire with dignity if you follow this plan. I got to say my inspiring advice probably has to do with I walked through the living room last night. My wife and daughter were watching The Golden Bachelor. Oh, there you.

I was wondering. I was like, Ken's really wanting this to happen. So my daughter says to me, Dad, sit down and watch the finale. I was like, oh, how do I say no to her? And you loved it. too much. No, I didn't. All right, Patricia is up next, and she is waiting for us in Ohio. Patricia, how can we help today?

Hi. I have found this past year that in order to pay the quarterly taxes on my investments, I had to borrow from the investments to pay those taxes, which generated more tax liability for the following year. And I just realized this and decided it has to stop, and immediately. And I've taken some steps to stop it and try to, I'm trying to use the Nancy plan, but I need to know if I'm taking the correct steps and if it needs tweaking or anything. Okay, so give us a picture here. So you have a tax bill come up and you go, well, I don't have the money.

I'm going to dip into my 401K and borrow against it. What have you been doing? Well, in 2015, when my mother died, I inherited stocks, and I, He brought them to a broker and everything, and he's played with the portfolio, and it has doubled. It's gone from mid-300,000 to $756,000. Is this in a retirement account, or is it outside of retirement? Outside of retirement. Okay.

Isn't you're paying capital gains taxes when you withdraw? Is that the issue? Is that why you're saying you're getting taxed again? Yes. Well, I think let's go back. Let's go back a step. What are the quarterly taxes on? Are you self-employed?

And it's a two-part question. Why quarterly taxes? What's going on? And why is it that you're not setting that money aside that you're not able to pay it? Give us a better picture. Well, I have always been able to pay it until, I think, this year. What has changed? they became bigger than I could handle.

What became bigger? Before, I had sold a house, and I had $15,000 profit from that, and I thought, well, I'll give that to the broker, and he'll grow it for me, so when I'm ready to buy a car, I can buy the car. So I did that, but not realizing that I would have to, pay you didn't set aside you didn't so you're getting my here's why i'm digging into this patricia so that we can help you one doesn't have to pay taxes unless one is bringing in income and revenue so you're

clearly bringing in a a certain amount of income and revenue and taxes are due on that and for some reason you're unable to pay them now in this situation sounds like you sold a house you didn't set aside any taxes uh on that capital gains and you just gave it all to investor and you didn't set some aside so then the tax bill came back and you're so low on cash. Is that a proper representation of what I heard? No, I'm sure I paid the taxes on the sale of the house, although I don't remember the particulars right now. Well, forget the sale of the house.

Let's talk about your business. So you're self-employed? Okay. No. Let me give you some details. I'm 70 years old. So I'm retired. and I'm living off of Social Security and a pension.

My income is $52,000 a year. From those two things? Yeah. Okay. From those two things. And my tax man, quite a few years ago, started to give me these slips of paper for the IRS and for the state. It said I had to make four payments

to cover the taxes for the following year so that I wouldn't be surprised when I handed in my tax bill that there's like a $5,000 amount that I have to pay. So I paid ahead of time and for installments. Well, this year, when I got those,

they're over $2,000, like $2,200, each time, I went to see if I had that kind of a cash that I could pay it out of my own funds, and I didn't. So I borrowed from, I went to my broker and said, I need money to pay these bills, and I was given money. And it wasn't until the fall that I realized, oh, my goodness, because what I did when I borrowed the money. When you say borrow the money, I'm confused.

Are you just selling off a portion of your investments? Yeah, yeah. Because borrow means you're taking a loan against it, but that's not what you're doing. You're just withdrawing from the investment account. Yeah, I withdrew from the investment account. But then I realized, all of a sudden I realized, okay, I made all these withdrawals this year to pay 2025 taxes. and those withdrawals will come do, I'll have to pay taxes on them in $2.20.

Yeah, every time you take money out of that investment account, know that you should set aside 30% of that in a savings account. That's going to be the easiest way to do this, is if you take $10,000 out of your investments, put $3,000 of that in a savings account. And then when tax time comes around, you transfer it from savings to checking, and you pay the tax man. That's what I, just the easiest way to do it is just set aside,

just call it 30% if you overestimate, I'd rather that than underestimate. Okay. Well, anyway, what happened was I found out I asked how much was taken out this year. And my broker had said he wanted to charge a flat fee for the year a certain percentage. And he wanted, and he split my accounts into stocks. in one area and in mutual funds in another. Why are you in single stocks anyways?

Why does your broker have you in those? Well, that's what I started with. I started with all stocks and he's moving them over to mutual funds. He's slowly converting them to mutual funds. Okay. I think two things, George. I would love for you to give Patricia just a basic, let's get on a budget and so that she's not lacking cash.

She has, I think, Patricia, I'm guessing you have. plenty of income through your benefits to be able to pay your bills and you have some margin is this true or false you don't have enough money coming in no what are you this is what I've done so far I'll tell you I transferred my investments to a bank to get them away from this guy because he insists that he is going to work with us and and every time he sell something and move something, it generates a tax liability for me. And I need to be away from that for a while until I am able to pay for it myself. Do you not trust the broker?

Because they're just doing what you tell them to do. And no matter who you work with, even if it's on your own, you're going to owe taxes when you sell off these investments. But Patricia, let's go quickly. We don't have much time with you, and I want to get you with a financial coach. We're going to give you a session with one of our financial coaches because this is an onion that's got a lot of layers. But I just need a yes or no question. Based on the pension, the Social Security payments that you told us your income, are you telling me that if you didn't have tax payments, are you saying that even with those benefits that you don't have enough money to pay your household bills, your utilities, groceries, all those things?

I have stood down to their minimum and put myself on a budget so I have $1,500 a month to go toward paying those things and that's what I'm going to say. Yeah, okay, all right, so I think we're about to the end of our time and our ability to help you and what you need is, and we're not going to leave you hanging. So hang on the line, Patricia. Chris is going to get you set up with one of our financial coaches, and they can walk through all of this, get it all out, help you with the budget, they'll help point you to a tax pro who can explain, hey, here's how much your income is, here's how much is taxable, here's how much you need to set aside. We just need to get some of these details ironed out so that you're not stuck in this cycle for the rest of your life. Sorry, you're going through this. All right, we go to Aiden, who is in Michigan next, and Aiden, we're here for you.

How can we help? Hey, guys. Thanks for taking my call. You bet. What's going on? So in about six months, I'll be turning 18, and I'll be gaining access to a portfolio about $90,000 in stocks, and on top of that, I'll have like $13,000 in a CD, $5,000 in a money market. What strategies would you guys recommend to help me grow these funds?

Where's the money coming from? So when I was born, my grandfather put money into the stock market, and it's just been growing ever since. Wow. So it's all been in your name this whole time, but you're turning 18 and have access to it because of that? So it's a custodian account, so it's in his name until I'm 18. Got it.

So it's like a UTMA or UGMA, one of those? Yeah. Okay. What do you call grandfather? What's his name? What do you call him? I call him Gordon. That's very formal.

That's his actual name? Yeah, yeah. You don't call him Pops or Granddaddy? Yeah, I do, but that's his name. No, so it was a bad question. What's his grandfather name? What do you call him? Well, I call him Papa, but yeah, his name Gordon.

Papa, I know, we established the Gordon. All right, all that wasted time for me to say, you need to thank Papa. Papa's a good man. He set you up. The moment's lost. We lost the whole thing, in translation. Gordon. I call him Gordon.

of it. Gordon. That's strong. It's a strong name. So the question, how can I grow the money? We can answer that in two seconds. The better question is, what is the best use of this money for your future? For the short term and the long term, which then we got 17 other questions. Like, what does the future look like for you as you graduate high school? Are you going to go to college? You're going to go into the trades, workforce? I plan on going to college for finance, and I plan on using some of this money for college, but I just want to grow it safely so that I have that money when I'm older.

Okay, well, the next question is, how much is college going to cost? Because if it's going to cost $100,000, we're not going to go put this money into the stock market. Yeah, so I plan on going to MSU. So that's probably going to be around $130,000. Okay, so you just let the cat out of the bag. we're not going to invest this money.

We're going to park it in a high-yield savings account to cash flow our college experience. Agreed? Yeah. Because you invest that money, now you're going to go take out $130,000 in student loans. Would you agree? Yeah. So that's why I cautioned against, I want this money to grow too, but that's not the purpose of this money. This purpose is to fund your education if that's your next step.

Because the whole goal here is to avoid debt. Do you have any debt currently? No. Can we keep it that way and use this seed money to help. help you avoid debt for the rest of your life? Yes, sir. So that would be like a reasonable used cash car covering your college expenses to get you through the next four years.

We're going to graduate in four years. It's not going to take six. Things like that. So if you can make that promise to yourself and to Papa, then we're on to something. Because now at 22, you graduate debt free, you got a degree in finance, you're making $60,000 out of college. Now we can begin to go, how can I use my income as a wealth building tool instead of this money. How close do you live to Lansing, the main campus?

It's probably about like a two-hour drive for me. All right. Why MSU in particular? They have a good business class and just high acceptance rate, honestly. So that just go for the lowest bar possible. Here's what I'm thinking. Can we get a finance degree for 50 grand total instead of 130 grand total? Because I can tell you this, the employer doesn't care how good the business class was. that's where I'm going. I just, my heart sank when you told me it was going to be 130 for Michigan State or state school. I went and looked at what the in-state tuition is and a lot, you know,

half of that cost is housing and all the other junk. That's why I asked how close you are. And the whole point is, I'm with George. How can you use some of this money to cash flow college and still have some money left over for the very point that George just made? Yeah, can you imagine graduating with no debt and $30,000 in the bank and another $25 for a down payment. That's a cool future at 22. You're way ahead of America at that point. That's what we want for you. And so what that requires is, you know, what's your GPA right now?

Did you graduate or are you about to? No, next year I'll be graduating. So what's your GPA as a junior in high school right now? My GPA currently is a 3.5. Not bad, my friend. I never even sniffed 3.5, so that's impressive. So have you taken any pre-A-T-S-A-T score, any tests? Actually, today I have SAT-P prep class.

Great. I'm going to tell you something. Just a little tip here. You need to your own homework on this as it relates to business schools in the state of Michigan. I'd start there in-state tuition. Obviously, it's going to be better. And George, you know I'm a big fan of this. I got a kid right now.

I got a high school senior who's going through this and he's crushing it. I have told him I'll pay for as many. by the way, I paid for George a tutor for these tests. They're specifically for these standardized tests. My son's got a 4-0, but he's not a wonderful test taker, and neither was I. And so it's like we got special prep for that. So, Aiden, you know, if your parents are willing to pay that, you can pay it. I would get a tutor to prep you for these exams.

Two, take them as many times as you need to if you're cash flow on it, because every time you go up, my son, by the way, is taking the ACT. twice and he's crushing it. He's measurable difference between the second time. He says to me the other day, dad, should I take it a third time? I went, how much money could we save? That's true. Because it's like, I'll pay for the test if he's saving five grand. You got a $10,000 scholarship. Then it was worth paying the tutor 500 bucks. 100%. So, Aidan, I'm speaking real time here. And so you're a junior, so you still have some time. But bringing this back home where George and I are, you need to discover all of the schools in

Michigan that have a good, a decent business program. It doesn't need to be top-notch. And if we can go for half, what an accomplishment. Think about this. You spend 65 on school instead of 130 and at 22 you invest that other 65. Can I tell you the numbers, Adam? Tell him, George. $3.5 million at 62. That's if you never put another dime in. Aiden, did you hear that? I heard it loud and clear. So it's not too boomers, you know, hating on college. Like, we're trying to make the most of that money for you. And that's why it's very important to go, how little of this money can I use to cash flow college

and how much can I get from scholarships, part-time work, bust in my tail, so that I can have this kind of wealth on the other side. Love it. So if you just make a plan, I'm taking debt off the table, no debt. I'm going to use as little of this money as possible. And then once I graduate and have my income, now we can make some more adult decisions

because the future's a little more clear. And right now there's just too many variables for me to tell you, just go park it in the market aid and you'll be fine uh let me see here where do you live uh right now i'm in st joseph michigan small town give me an idea how far away from Detroit greater Detroit that is uh that's probably going to be like three hours okay great let me let me just i just did a quick search um Oakland University my cousin very successful marketing executive went to Oakland University. It's right in the suburbs of Detroit. They offer free tuition for qualifying residents. So look into that. It's financial and residency requirements.

I don't know. I'm not saying you're going to get free tuition, but this is just a quick search. It's doing all the research instead of gone, well, this is the school I want. Yeah. Yeah. And well, here's what your answer was. And by the way, no judgment, Aidan. I appreciate it, but I want to encourage you. Your answer to George is, why Michigan State? You went, well, honestly, because, well, they've got a good business program. Someone told you that. Who really cares?

Nobody. And then you said, ultimately, it's a high percentage, the acceptance rate. And you're in this stage, and you've been conditioned by this country, parents, principals, teachers. You've been conditioned that college is the best way to success. And it's no longer true. By the way, never was true. but we were told it was true and so at this point

I'm just really driving this home my homework assignment for you is to look at the most affordable colleges in Michigan look up their business programs how are they rated do some research on that as well and let's see how much money we can knock off a tuition

so that we keep Gordo's investment for you I like this plan this is like the prodigal son you don't want to just spend all the money the inheritance instantly and then come back and go, well, it's gone. I'm eating with the pigs now. I want to see you really live, man, live with some freedom. And that means using this money very wisely to protect the legacy that your grandfather just handed down to you.

Hey, George, guess what? What? The all-new every dollar is here. You're aware of this? set up, Ken. I thought you really had something for it. I know. I kind of like to do that. I almost said chicken butt, to be honest. They refrained. Wow. But yet you said it anyway. Yeah. So there you go. So I met with the team the other day. The new every dollar is amazing. You hear this and I go, I'll be the judge of that. Yeah. Do you know what I mean? I'm a little bit of a, not a true cynic. But you're like you want to see it to believe it. I would like to arrive at my own conclusion, not have a marketer tell me. So I had a meaning with you. the every dollar folks you know i was blown away by what's that the uh 12 to 15 minutes of questions when you initially get in there and i said to them i go this is literally a more robust version of someone calling in the show and getting our coaching you're going to get

eight minutes eight nine minutes with us 24 seven in your pocket is with 24 seven and then i found out that for now and i told the people the other day i don't know how long dave's going to let this one Co. But you also can get a 10-minute call with a real live financial coach. That's right. In addition to the articles, the here's what you need to do. So I'm just telling you, when I say it's no longer a budgeting app, I mean it. It really is. So interactive. Personal coaching. That's some of the best features in there. It's a digital financial coach that, oh, by the way, has a phenomenal budgeting functionality to it. That's my take. What do you say? I actually just came from a lunch with those guys and they were showing me what they're working on.

mind blown. Oh boy. The functionality, we're moving just past it being budgeting and more like, how do we track all the pieces of your financial life so you get a real holistic picture and you know what to do next. That's where this thing is heading and you can come along for the ride and check it out now. People where they get it. Go get it in the app store or Google Play. Just search every dollar. The average person finds thousands of dollars in margin in just the first 15 minutes like Ken mentioned. You got nothing to lose except maybe your stress. Oh, well played. I see what you did there. Adam is up in Dallas, Texas. Adam, how can we help? Hi, how are you guys doing? Thanks for taking my call. We're doing great. What's going on

with you? So my wife is an avid listener to your show. Oh, well, of course she is. You married a good woman. Tell her we said thank you. All right. I did. I did. I will. I honestly, just being honest, I don't listen to it very much unless she's in the car with me, but I have... Okay, let's put Adam on hold. Who's next? Who do we have next? I'm kidding, Adam. I'm kidding. Go ahead. But I have listened to the Audible book, Money Makeover, and let me just say 95% of the things in there, I 100% agree with. It's preaching to the choir. But there's one thing that you guys preach that my wife agrees with, and I don't. Oh, I love it. What is it? That is paying off your mortgage. I'll give you a little...

What a silly idea. Right? No. So we have a $327,478 and $50.50 mortgage right now with a 3.625 interest rate. And I have been very adamantly against paying that off for the last several years because if we invest our money very conservatively, very safely, high yield savings account, money market account, it's been at four and a half to five percent for the last several years. Just recently it got down to 3.8. And my question to you is, why, oh, why would I pay off my mortgage when I can make more having it in conservative, basically guaranteed money, versus at 3.8 versus, you know, getting back 3.65 by paying it off. Adam, would you believe, would you believe, 2.2,000 a year? Right. Now, would you believe you're the first person to ever hit us with that?

I figured I wasn't, but again, I... Here's the question. You are not the first person. You are correct, sir. George Tell them why. Do you have $327,000 sitting in that savings account? It's not a savings. So we've got in money market account right now, we have enough to pay off our house.

That's what I'm saying. So you have the money to pay it off. Oh, yes, sir. But you like to see it grow at 3.8%. Which, by the way, you owe taxes on all the money you're making from that. You understand that. So it's not apples to apples already. The interest can be right.

written off taxes why so. The mortgage interest is what you're saying, because you guys itemize every year? Correct. Okay. So I can give you the logical math answer and that's where you're going to want to spar, but it's so far beyond that.

And what your wife is getting at, it's just not about the math. She does not care if you guys could make a thousand and you didn't that year because you paid off the mortgage. Because the other part you're not taking into account is once you free up that mortgage payment, number one, you can invest that amount

and you'll likely be back to where you were, pretty quickly. I assume you guys have a great income the way you're talking. Pretty good, yes, sir. Okay. So can we agree that you could save up 300,000 bucks pretty quickly with your income if you had zero debt? Yeah, absolutely. Okay. Next question. Are you going to be broke in retirement if you pay off your mortgage and liquidate that investment account? No, absolutely not. So the argument is, do I want $5.6 million in retirement when I am 63, or will it be 5.3 but with a paid for a mortgage. Can we agree that's kind of what we're, it's kind of like both scenarios are pretty great.

We can agree there. Yeah. The other question, are you both working full time right now? Yes. Now let's play this out. What if somebody lost their job had a health situation? There was a recession. All of the factors that can happen in life to where now you go, oh, gosh, I'd rather not have a mortgage when life comes at me.

So that's why I have the money in things where I'm not going to lose. I'm not going to put this money in the S&P 500 or one of the markets that can fluctuate day by day. This isn't something that is safe, like I was talking about, either high-yield savings accounts or the money market to where I can take that money out any time. If we did lose our job, or let's say the money market or high-yield savings accounts got down to 3.5, I could just take that money and pay off the mortgage that day. Okay. Well, have fun having a disagreement in your marriage for the rest of your life.

Oh, I'm kidding. Oh, George, that's not fair. Her security glance flaring up. It's not because of Ramsey. It's because there's something in her that knows that peace is more than just the spread. And that's what she's after. Nobody can come after your house. You own it free and clear. If life happens, you're going to be okay. And the truth is, you're probably going to be okay either way. And so paying it off, do you really think you'd sit there and go, gosh, I could have made $5,000 this year off that savings account. Or are you going to go, man, it feels good tonight of a mortgage, and the flexibility we now have, the options we now have, the freedom we now have,

was well worth it. Yeah, and I agree. I think it's a little bit of both. I think nobody's ever going to regret not having a mortgage. Nobody's going to say, man, I wish I had my mortgage back. But, you know, part of me had always been like, ah, gosh, just $2,000 this year I could have bought a new mouth. How much do you guys make? something you know um i do about 14150 a year and she does uh probably 200 250 okay so

two thousand dollars is a drop in the bucket we can but it's like kind of saying i'm doing the credit card game for the rewards i like it in two grand free and i know it's not a big amount but it just feels nice right yeah you know i'm sitting here listening i by the way i'm always on the side like either i'm on with dave or i'm on with a money personality and this call comes in and i'm always just sitting here you know it's like letting them do it. and I'm like, and I'm just listening for what's really going on. And I think there's two things. I heard you say a minute ago, and George started talking, he talked over.

He was so rude. So I didn't pick up what you said. But I thought you said about the $2,000 and then she's like, I could have about a mountain bike. Did you say that? Or am I hearing things? Yeah, I was just kidding around. But yeah, it could be anything. But, see, you weren't.

I'm not a money expert, but I can tell you this. I've coached over 15,000 people live before. for i'm an expert at hearing things and seeing things and when i heard that i went that's not a joke and i'm going to tell you what i think's going on with this thing between you and your wife because george has explained it beautifully so i have nothing to add to that but let me tell you what i think's going on your wife is looking at this emotionally and you're looking at this logically and i think you look at all money things as logic nothing wrong with that at all you're a smart guy you're not a goofball you're not a loser. You've been very wise with money. I just think you're going to have to decide

in this situation, how important is it to me to make the $2,000 every year and either bank it or buy the mountain bike off of my interest and I feel so good about my logical choice, or do I want to meet my wife where she is and where she is emotionally and help her feel safe? I think that's the choice. That's my read. And I think that's you just look at totally different than she does. I think you need to walk a mile on her shoes for a little bit. The question is, is it worth paying $12,000 an interest to make $12,000 in a savings account? Basic math tells me, it's a wash, dude.

I'm just going to pay it off and get some peace in my life. And happy wife. I'll take that as a bonus. Welcome back to the Ramsey show coming to you from the Fairwinds Credit Union Studio. Dan joins us next in Mesa, Arizona. Dan, how can we help you today? Yes, sir. Thank you for taking their call.

I've been suffering in poverty for all my life, pretty much, and I have a plan, and there's some details around that, but that's my question. Okay, tell us more. How do I get out of this poverty? Am I on the right track, and what can I do that? Well, okay, let's start with where you are. What is your income? Right now I have income of about 1,400.

with Social Security disability, and I have a part-time labor job for about 100 a week. My income last year on taxes was about just under 21K, which is impossible to live on, of course. Now, I'm curious about the disability, because you're working part-time. What is the part-time job? The part-time job is working at the grocery store as a courtesy cart-bagging grocery. lifting water, pushing the old lady carts out for them. I try to make people feel good and have a blessing on the last face they see before they walk up. Dan, you're a good man.

But what is your, what is your disability and how does it limit you from working more? Well, I'm, it's like psychiatric. I've had a deep trauma in childhood. And I've been in recovery from alcoholism for 28 years coming up December 4th. There's a lot of these underlying issues and problems, which have really prevented me from thinking clearly about money, making clear good choices, and, you know, making bad decisions like that. So the disabilities, I can't really function that good in a workplace and a lot of depression and personality problems. Well, how are you doing at the grocery store? Well, I do excellent at the grocery store.

And why do you think that is? Because I started doing a special therapy for trauma called EMDR in March, and it took me from staring at the wall for a year and a half to working, feeling good, and taking a, I took a training and got a certificate in Google Data Analytics from March until now. Way to go. I'm looking to up level. I'm trying to up level. What the thing is, I'm going to get off Social Security for the first time since 2000, which is somewhat terrifying. I think that's the root of this. I do too. And Dan, I want to tell you, keep at it. And I would ask your therapist, get a professional opinion on whether or not she or he feels like you can go to full-time work. Let's take some baby steps to this. And let's move into, if we can, full-time at the grocery store because you're psychologically safe there right now. Sounds like.

Well, the problem, I can't do full-time at the grocery store, which is a complex thing about the way they do their positions. I tried that in March, which didn't turn out. So that's what made me turn back towards tech because I went to graduate school for research methods in the 90s. And I've got all the statistical background, and now we've got all this new technology, AI company data analytics is hot. I'm all for you going full blast on the technology side, but what I was suggesting is that might take a little bit of time to get that job. And you're already in recovery and you're doing some work. And so I think getting some wins here is super important. You would agree with that, correct?

Not just financial wins, but psychological and mental and emotional wins. So here's where I'm going. Dan, I would have never guessed, nor would anybody in this vast audience would have ever guessed. The trauma, we still don't know, it's none of our business. But we wouldn't have guessed any of that based on how you described, how you treat people, and what you do at the grocery store. So I'm going to tell you something, man. I wish I could reach through the phone and give you a hug and say that I think you're stronger than you think you are.

And I just, as a stranger who's heard thousands upon thousands of calls, I heard a man who is full of joy. And not only full of joy, but like gives joy. I got goosebumps when you described that you want to be the last face they see as they go to their car. I mean, there's a guy who's been through so much pain and has made it through just enough to be able to give joy when you've had very little joy. So there's my locker room speech, Dan, but here's where I'm going.

If the grocery store won't move you to full time, what about Target? What about Walmart? What about any other big box stores who need somebody like you who's going to show up broken yes joyful yes and you're going to give yourself away I'd like to see you take that step and let's see if we can get full-time pay

and some benefits at one of those bigger stores and share some of your story don't share all the darkness don't share that but just go hey I've been through a lot I'm 28 years sober I hear that from somebody and I go rock on baby

I have mad respect for you, Dan. So I want you to carry that. And let's see if we can get to one of those roles, get more income in, and get off of Social Security while we are making the inroads and connecting. And I'm going to give you my book, The Proximity Principle is my gift to help you make connections to get into technology. Now, that's my little speech, but I'm in every word of it. I appreciate you. That was amazing. That really helps me a lot. You're amazing. It's my heart.

Well, good. Because I think your head and your heart need to get on the same page. Yes, sir. You've lost trust in Dan, and we're telling you he's worth trusting in again. It's worth betting on yourself. I stand with Dan. I'd call every store in Mesa, and I'd vouch for you. Because there's nobody among us today that doesn't have some brokenness.

So I think you're going to have to step up a ladder on this. The way out of this is income. And the good news is if you make so much working that you lose SSDI, good. That's great. That's exactly what you wanted, isn't it? Because that's the only path out of this is making enough that you can lose it and not miss it. George, and cover your bills. George, take two minutes and walk him through step by step. Let's assume he's gotten that money now. Walk him through setting up a budget and trusting himself that he doesn't need Social Security. Yeah, right now you're going, well, budget what money? You know, you don't have enough coming in. But once you have $3,000, $4,000 coming in and your expenses stay where they are, I'm assuming $2,000 a month, how much you're living off of right now?

$1,800. $1,800. So can you imagine having an extra $1,000 or $2,000 left over after your bills are covered? What kind of life that could provide for you, your ability to save, to invest, to give, because I can tell you're a generous guy who has a heart for that. It's going to change everything. So you list out your income, you list out your expenses, and the good news, there's going to be money left over. when you believe in yourself and go, I'm going to do the kind of work that I was made to do. And I don't think you're passionate about groceries.

You're passionate about serving people. And that could be through analytics. That could be at Target. It doesn't matter. The key is you're worth more than $100 a week. Can we agree on that? Yes, sir. Dan, I'm going to tell you, those tears are not a sign of weakness, man.

Well, these jobs, you know, they started $100K, these jobs. Yeah. I've been on disability since 2000. And if I got a $6,000 take-home check, I'd be on my knees. I'd be walking home. No, I'll tell you what you're going to do. You're going to get yourself a ticket, and you're going to come to Nashville, and you're going to wait to meet George and I in the lobby.

We're going to come out, and we're going to give you a big bear hug, and we're going to have the whole lobby just cheer. Dan, Dan, Dan, let me tell you something, the Dan we're talking to today, who's here today and made the call today has got enough strength to be the Dan that you want to be. You better believe that, my man. Hang on the line. We're going to get you the proximity principle. That is your homework assignment to get that $100,000 a year job. Miguel joins us in Los Angeles, California, Miguel. How can we help?

Hello, guys. First of all, thank you for taking my car. I really appreciate it. Yeah, you bet. What's going on? Yeah, well, it simply just need help figuring out what to do with my home and debt situation. If I me give you a brief background, my wife and I bring home about $11,000 a month, including $1,000 from an ADU that we rent out. But our mortgage has a balance of $182,000. It's a 15-year loan with 2.5% and we make a payment about 1950. but we also have a HELOC with the high balance of $160,000 at around 9% that we're paying $1,200 of interest every month. Now, aside from that, we have about $27,000 in other debt.

So my question is, should I refinance my existing mortgage and HELOC together to make one payment even though I've moved a 2.5% rate? What did you take out the HELOC for? Well, it was before I knew about you guys, but I had about $30,000 in credit card debt that I paid off and could build that ADU that I built for my mom to live in. So 30,000 turned into 160? Well, $30,000 of credit card debt and then $130 for the ADU. Got it. Okay. I would not roll this into one giant loan.

Number one, it doesn't change the behavior. And number two, it's not going to change the numbers all that much. Now, your HELOC being at 160 and your annual income, what's your gross household income? Are we talking like 175, 180? Yeah, around 170, 175. Okay. So because the HELOC is over half your annual income, you can kind of lump it into Baby Step 6, which means you're focused on paying off that other 27,000 right now.

And once that's knocked out, we'll just tackle the 160 with your fantastic income, which is going to go pretty fast. And let that interest fuel your anger towards this and towards the mistakes to go, never again. I'm not going to put myself in this position. Now, George, even though we bring those $11,000 a month, and in the past, before I knew about you guys, we would only saving about $1,500 per month. So I want to know what are the Ransi-approved things that we are allowed to pay each month, like utilities, insurance, and what else should go to debt? I'm curious about that. Well, you cover your four walls, food, utilities, housing, transportation, you're going to cover your insurance, and you're going to cover all of your minimum debt payments. Outside of that, zero spending.

We're not eating out. We're not upgrading things for fun. We're not buying furniture. It is survival mode. and then you have 11,000, if we can cut your spending down to 4,000, there's $7,000 left to throw at the debt. You see how the math works on this? Yeah, I can see it going away pretty quick.

Yeah, well, your 27,000 is gone in just a few months. Less than four months, you'd clear that if you can live off of four and throw the other seven at debt. So I don't know what your expenses are. You're going to have to make a budget tonight with your wife. You can use every dollar to do that and go, all right, we make 11. Our bare-bones expenses to get by is $5,000. Well, that means you got $6,000 left to throw at your smallest debt, which means it's getting knocked out quick.

And once you knock out the $27, you freed out a bunch of payments, right? Yeah, yeah, for sure. I wouldn't have any other... And do you guys have any savings? Well, we had about $20,000 in savings that I used to pay additionally about the $27,000 in debt that we had, some car loans, and some other medical bills. Oh, so you liquidated savings to pay off debt,

and so now you're back to how much in there? It's only a thousand. Okay. So once you're done with this consumer debt, the 27, I would go through that Baby Step 3 process and save up three to six months and then kind of put that HELOC in that Baby Step 6 territory, and that way, because it's going to take a little while,

and so if we lump it in kind of next to that mortgage, it'll wait a little while to get there, and that interest, it'll get knocked out quicker than you think, when you guys have 11 grand with a lot of margin left to throw at it. You can be done with this thing, and probably, my guess, if we do the math on this, could you throw $6 grand at that HELOC at that point? I mean, if it's available, yeah, I wouldn't mind both my wife and I are locked into getting this paid office as much possible.

Then we're talking two years. Oh, nice. And so instead of hanging on to this HELOC forever, rolling it into a giant loan that you then take 15 years to pay off, you can knock it out in two. keep it separate. Awesome. So that's what I would do, man. Thanks, Miguel.

Appreciate the call. You got this. Let's go to Tracy in New Hampshire. Tracy, how can we help? Hi. I'm calling because my husband recently lost his job, and we're currently looking at health insurance through my employer, and we're looking at a high deductible plan, and I'm wondering if we should put money in the HSA that will be attached to that plan, or if we

should put that money into savings or if we should apply it towards debt. Great question. Do you know of any kind of upcoming medical expenses you might need to cover? Yeah. So I have pushed off an MRI that I'm going to need on my knee and so that's been scheduled for January. So that will be about $1,300 and depending on how that comes out, I will either need a surgery or that that's where where my doctor thinks that we're going to end up, and maybe physical therapy, if not. Okay. In that case, I would fund the HSA with as much as you're going to need. And so you kind of run it through there. You can kind of use it as a sinking fund. I wouldn't overfund it right now in Baby Step 2, but if you know you're going to have $2,000 worth of medical expenses,

let's at least fund $2,000 worth of HSA in there for the year. Okay, so my employer will put in about $1,400 for the year. um just by signing up for that plan we don't have to get anything into the hsa so you would yeah that part is like really great and that was one of the reasons why we were really considering that as the plan to go with um so um so since we know that we're going to have to pay for the MRI um the deductible for one individual it's going to it's 5500 um so initially i was looking at putting $7,000 for the year into that. You're not going to need $7,000 in there. Okay. So you wouldn't be maxing it out. I wouldn't be overfunding it. You can, you're going to

get $1,400 from your employer. You can then set up kind of a sinking fund style where you go, hey, I'm going to take out $200 from each paycheck. That way there's $2,400 in there after 12 months. And that'll sort of cover the ongoing medical expenses you have or dental, vision work for the family, anything like that going on. So you're just kind of using it to run your medical expenses through as a filter for the tax savings, but we're not going to use it as a separate emergency fund or an investment account right now. Okay. Once you're in baby step four, you can look at maxing that out outside of your 15% retirement.

Okay, baby step four. And then, so for right now, should we be taking any extra money? So my husband literally last week lost his job. So should we be taking any extra money and just putting that into savings until he gets another full-time job? Or what would you recommend for that? Yeah, you guys are in storm mode right now. So I would be living on a bare-bones budget, just cover the essentials, food, housing, utilities, transportation, insurance. Do you have your debt, so make your minimum debt payments, but you may want to pause on the debt snowball until we have some stability.

What was his income? he made his base income was 4,800 per month and then he made quarterly commissions on top of that okay and did he get any kind of severance no but he will qualify for unemployment but that won't kick in for a few more weeks but we don't we don't want that we do not want that I'm going to tell you what I'm going to tell you this right now and is this wife I'm glad you're on the call research has shown that losing a job, whether you're laid off, fire doesn't matter. It's the emotional equivalent of losing a loved one. He's in a really tough spot right now. And I'm going to tell you, one of the best things he can do is to actually just go get a job. I know it's an interim,

right? But just some type of work just to be staying active. He's still contributing. Is it going to be as much as he was making? Maybe, maybe not. But I would go get a job while he's looking for the next right job that's super important I would encourage him you can tell him I said that but let's get some more money coming and we don't want to go to unemployment actually joining us now in San Francisco California Ashley how can we help hi thank you for having me you bet what's going on I am I am a small business owner, I've been in business for about five years, and I've been doing pretty well financially for the last four years until January hit. And now a lot of the current administration's policies have hit about every single section of my job.

What business are you? Tell me about your business. So I'm a consulting firm that helps to support humanitarian initiatives with corporations, colleges, and school districts. So, essentially, they bring me in as a consultant to repurpose their furniture and fixed assets with charities around the world. Okay. And I'm just curious, not trying to get into a political rabbit hole, but how are the current policies affecting your income? So, first off, we're women-owned certified small business. So the DEI initiative, we took a pretty hard hit with that in January. the grants for the university is being revoked that caused some cash crunches for some of the programs

and some of the projects that they do traditionally over the summer. Gotcha. You know, funding for the public schools, you know, obviously if they don't, if programs are being let go or, you know, Department of Education is, you know, being restructured all those things. School districts are downsizing themselves and kind of wondering how they're going to have the programs that they need to take care of their students. And then obviously the tariffs, which we all know that's a subject in and of itself. But all those factors combined.

Okay. All right. So bottom line is, is that money has dried up. What was coming in freely to pay for your consulting services have dried up? Yeah. And where I'm at right now is, like, I've done, you know, I knew that this was coming. So, you know, as each hit kept coming into play, you know, I kept restructuring, kept trying to shift things. you know I started laying people off I you know I changed insurance plans for benefits

for the employees I still had you know try to reduce costs across the board but now I'm at a situation where my husband got sick and he was hospitalized for two months and he's also my business partner so we're at a point right now where I'm starting to get work in queue for next spring like heavy in for next spring and potentially next summer right but obviously that is not going to help me now. Because I still have, I have some pretty good-sized bills that I still owe. And how many full-time team members do you have? What does your payroll look like? Right now it's just me. Okay. So it's just you. What kind of debt do you have? So basically I've got one vendor right now that I'm about 140 days overdue that I owe him

$60,000. What's that debt for? Um, it's, so basically in, I work with third party vendors at times, um, some entities that I work with one and all in, in, they want an all inclusive cost for my service. So, um, there is some of my works that I do sub, subcontract out. So, um, I'm still confused how you just, you just, you did, you get paid and then you kept it and didn't pay the vendor. Basically, what I ended up happening was over the course of this summer. I had to let all of my employees go and so basically in order to do that I had to pay out all of their medical expenses their insurance, their vacation time and all of that

so by the time everything was all said and done so that I didn't have the IRS on my back it was either pay them or basically pay my vendor is ultimately what it came down to so I'm in a situation right now where I need to pay them the money that's rightly owed them

and also So, credit card debt and all of that. My total debt right now is $250,000. $250,000. Where's the rest of this debt? So I've got, right now I have, so $60,000 for that. I have a couple of vehicles on the company, which are about, which equal to about $90,000. I've got credit card debt for about $80,000.

I have an office lease here for about $5,000. and insurance and all that other stuff. Okay. This is a highly leveraged business. Yeah, this is crazy. Just a practical question. How much money do you, have you laid it out, how much money you've got to bring in to cover the basics? Yeah, I mean, I have that figured out.

I mean, up until this year, I was bringing in over, I was grossing, last year I grossed 2.5 million. And this year I'll be lucky to. No, no, I get it. I'm just saying, do you, are you going to be able to take care of you and your husband? Can you make all of your payments and cover all your bills right now as it stands? And that's why I'm calling you guys. It's because right now I'm trying, I'm at a point right now where I am realizing that... So there's zero income coming in this month? Yes or no? We're not getting a straight answer from you. There is income coming in, yes. But it's, what I'm looking for is I'm at a point right now where I'm just realizing that, I'm not realizing, but there's expenses or there's bills that.

I know that I'm going to need to pay that I need to cover between now and April of next year. So, and you don't have any contracts coming in. So how are you... I do get contracts when we get a different job. And is your husband working now? Is he back to... My husband is back. I do have contracts.

But as a small business owner, the contracts that are confirmed that are over 100,000 don't hit until next spring. I understand that. I understand that. I'm not talking about next April. I'm talking to a lady who's absolutely drown. in debt. And I'm wondering how you and your husband are going to pay your bills. I haven't heard anything on this call about how you make money between now and April. And that's why I'm calling you guys is to say, what are my potential options? I know, but I got to get a straight. I can start

with this. We can sell the $90,000 worth of cars we have. Sell the cars. I'm guessing you're underwater on both of them. Go get a job. What are the cars worth? The cars, the cars are they're a lease right now. They're a lease? Yes, they're leased. Then what's, where's the 90,000 in car loan debt? Um, because that's, when the leases run out, that's how much the leases are for right now for the contract. Goodness gracious. Why do you need luxury cars to run a humanitarian consulting firm? They're not luxury cars. They're used for transportation. Like vans? They're business, yes. Yes, they're for business use. Okay. And right now we live in California. It's not, It's not cheap living here.

Yeah. Well, that's my next question. Do we need to move out? You're living in one of the highest cost cities in America. So can you do this business from elsewhere? Where am I going to go? Because anywhere that I go, I'm going to have to provide three times my income. I'm a small business owner to booth.

I agree. I appreciate, George. That's not the right question. The question that we've got to answer and you keep saying, well, that's why I called you guys, and I got bad news for you, we don't make money for people. I can tell you... I'm not looking to make money. What I'm saying is...

You should be. I don't want to go out right now and get a loan and end up with something like the gentleman who had mentioned that he had an ridiculous interest rate. Yeah, we're never going to suggest you get a loan. What I'm saying is maybe this business needs to pause right now if you can't get contracts and both of you need to get full-time jobs doing other things or four side jobs each in order to cover the bills during the storm.

Sell everything. which would be great, except that my husband is in rehab right now. You just told me he was back to work. He's back to work part-time, yes, but he's in a rehabilitation facility. Okay, so then it's on you. Yes, it's on me. That's what we're trying to say. We're not mad at you, but we're sort of frustrated for you to go, Ashley, the fix here is you've got to bring in some income now in the short term or this whole thing falls.

And it may not be from your business if that's not a viable solution, which means. it isn't. Use your skills to go do something else right now to float you until those contracts come in. Then we can write the ship. But right now, you built a house of cards with all of this debt that's mounted. So there's pressure. And while we're at it, while we're throwing a lot of advice at you, because we, but you got to get on the phone with this vendor and go, let me tell you my story. Here's what I had to do. Your story is the best policy, the truth. And I owe you, and I'm going to pay you. And I got this much coming in in April. But you have got to batten down the hatches. It's an old phrase to get ready for the storm because you were in the middle

of it. The winds are howling. And what we're telling you is you got to go get some income in for you and your husband first and foremost. It's just you as the employee now. So we're not worried about that. And I'd go to the vendor and I'd explain what's going on and come up with a plan. But I mean, we're talking about urgency. And that's all we got for you. You might need to pivot this business. If the grant money's all dried up and nobody's coming for you for the contracts. We're going to have to figure it out another way to make this work long term. Open enrollment period for health insurance has just begun. And if OEP sounds like alphabet soup

to you, we're going to break it down. Health insurance, open enrollment period, or OEP is from November 1 to January 15. So whether you're self-employed, or you're going to need some help navigating the market or you're unhappy with the health insurance. Your employer provides health trust financial can walk you through your options. Not only is health trust financial Ramsey trusted, but there's never any charge to speak with them.

And they're going to commit to finding a plan that's right for you. Feel confident in your health coverage choices by going to ramsysolutions.com slash health dash coverage. Now I'm going to say that again because between the hash and the dash, I'd want somebody to say it again for me. And so I'm a man of the people. So I'm going to say it. It's Ramsey Solutions.com slash health dash coverage.

The dash symbol. That's important. Or honestly, if you're like me and you never will remember that, go to the show notes. Because it's just a link in the show notes. And so don't make Ken type things out. He will fat finger it. And I have narrow fingers, by the way. 404 user error.

That's what Ken gets. Well played, George. Tom is up in Dallas, Texas. Tom, how can we help? Yes, sir. Good afternoon. I'm nervous about retiring. I don't know what to do.

I'm of the age, and my situation would allow it. I'm just too used to getting up at 3 a.m. and going to work and working 10, 12 hours a day. Wow. I think this is actually a really real. fun, a problem. I don't even think you have a problem, and I'm really excited to walk you through this. Let's get some of the details. You are how old, Tom? I'll be 70 here right quick. Fantastic. And how much money do you have in retirement accounts?

About 500,000. 500,000. Okay. And because you said I'm of the age and of the means where I can walk away. So is it just you? Are you married? yes and married okay and does your wife have any retirement accounts no uh there's a 19 year spread between us she's still working still enjoying what she's doing all right way to go tom with the younger lady very impressive sir um so uh your social security if you walked away today what would that be i had my fiduciary has talked me in the collecting now instead of waiting to get the extra $300. So right now, after the taxes, I'm having them pull out now, is $3,400 a month.

And you have any other source of income, pensions, anything else, rental income? Yeah, a very small pension. Okay, so it's basically your $3,400 a month of Social Security plus your $500,000 that you could withdraw from, correct? Yeah, and you're saying that's enough. And what is your... $800 pension. What's your wife's income? About 30,000 a year.

Okay. So do I understand you to say that if, and I'm not saying you want to, but if you were to retire today and walk away, do you feel financially like you'd be very comfortable? That's the question. I've never had a budget. I've only started listening to you guys lately. Everything I have, motorcycle, bass boats, house, everything is paid for. Good. I owe no one nothing.

So your monthly expenses, between her 30,000 and your 4,000, if you didn't even touch the retirement accounts, you could live off of that just fine. Oh, yeah. Okay. And so really now it becomes a, I'm just used to working for the last 40 plus years and getting up early. You can still get up early. Nobody's going to stop you from doing that. And you can still work. It just doesn't have to be, obviously, in the job you've been at for 40 years. So now you go, okay, I've got a lot of skill that I have accumulated overall. these years working. I've got a lot of experience. So it's not just skill, but it's just know how to use the skill. You know what you enjoy doing after all these years. So if it were me, Tom, and I actually

preach this all the time, you know, if you want to keep getting up at 3 a.m., find something to do between 3 a.m. and, you know, whatever time you would go to work. But I like you still working on some level. Do you have to work 40 hours a week? No. So those 10, 12-hour days, you don't have to do that anymore, but you can do something you really enjoy that actually produces a result that you care about. And I think that's what you're looking for at this stage of life. If financially, it's the right move. Yeah, not every month is only about $900 to $1,000.

Yeah, just the four walls, if you're saying your total expenses are $1,000 a month. yeah water electric all of that stuff that's great news that's great you guys are very frugal yeah is the house paid for yeah yes sir wow tom way to go you could have retired off much less my friend you could have retired 10 years ago i mean the reality is tom when i look at this just on on paper you're you've got a lot of margin just on your social security check oh and i and i realize that what I'm having an issue with is how to not come in and sit on a bulldozer all day because I really enjoy it. You do enjoy sitting on the bulldozer?

Yeah. Get you a little bulldozer in the backyard and you just go out there and sit. You just enjoy the weather. You know what? That's not a bad idea. But no, you know what, Tom, let's ask it this way. What would walking away from that job, would there be anything about that you would go, that's a relief, or I'm kind of glad I'm not doing that?

Yeah, my bosses are all the same age as my oldest kids, and I guess this is not the industry I came to work in. Okay. Let me ask you this. Is it worth it to you to look around and see if there's any older guys that have a small business, and they need somebody reliable, and they're pulling their hair out because they've been trying to get, like, 22-year-olds to show up and be dependable.

and everything else, and you come along, they go, you're kidding me. You've been doing this for 40 years, and you want to continue to drive a bulldozer, and you go, I do, sir, and he's going to go, how much you want to get paid. I think that's possible, don't you? Yeah, it'd take some investigation, yeah, yeah. I think that's what I would look to. Somebody out there, Tom, is probably closer to your age or a little bit different culture, what you're looking for, and they need some.

somebody like you that knows how to operate a large machine. And I think that's there. They don't care how old you are. I think you've got some homework to do. You've had this laid out in front of you where you just go, well, I got to wake up and go to work. And now it's time for you to dream again, and that's the scary part. So I would sit down and write down all the things you could do, want to do, want to try, write down a schedule of what your life would look like, and then go try it.

Take a week off and go, I'm going to try this out and see if I like it. And if you don't, change it up. That's right. And maybe your wife is scared that you're going to be laying around the house bothering her. Is that part of the deal? Oh, no. This guy doesn't lay around. I have too many hobbies and too many hobbies.

What's the hobby you wish you had more time for right now? Fishing, working in my shop. You could spend all day doing that. What would you make in the shop? I've worked down there. everything but a submarine and the satellite, and that's because they can't get them to me. Wow. I love Tom. No, Tom, I appreciate the funny answer. No one loves having more fun on the show than me, but give me an answer. Well, it would be something that you would make in the shop. If you were

focused on one thing, you're like, I could actually fix this or make this and somebody would buy it. What would come to mind? Automobile parts. I build everything I drive. I build it from the ground up. I just wonder, Tom, if you don't just start a little fun mechanic business or whatever that is, Tom's breaks and routers. Yeah, you're talking to the two wrong guys to classify that. But we know what you're saying. I just wonder if you don't start that on the side for a bit and see how that goes. You know?

Yeah, I did years ago and was good at it. and customers thought they own me, so I kind of backpedaled out of it. Well, now it's on your terms. Yeah. You know your way around a clutch pack piston, Tom? What are you talking about? I just wanted to see. I wanted to test his knowledge.

Tom, is that a thing? Well, yeah. Yeah, that's a thing. Oh, well done. I don't buy it from the store. I just build it. That's right. Builds it.

Like a real American show. Tom, I think you start your own business today in your head and start doing it. Start customizing Tom stuff. No customer owns you. I wish I had a Tom in my neighborhood. He could really help me out. I put Tom to work. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio.

I'm Ken Coleman, George Campbell, joins me, and we're going to talk to Stephanie here in Las Vegas. Stephanie, how can we help today? Hi, thank you so much for taking my call. Sure, what's going on? So my husband and I can't agree on a budget. for buying a house. How can I convince him to up our budget? Oh, you see. I have the down there. So if you want it. Well, yeah, you got to lay the case out. You got to pretend like George and I are

Supreme Court judges and we got to hear the facts because we don't know who's right, who's wrong. And you're telling us, I want help making the case to up the spend on the house. So break it down for us. Okay, we're currently a single income military family, but my husband will be retiring in the next two to three years, and that's when we'll be buying a house. After my husband retires, we'll have dual income, plus we'll have his retirement check, so we'll be making a lot more money than we're currently making. And over the last 18 years, we saved a good amount of money because we're frugal,

both of us, and we've earmarked about $300,000 as like a down payment. My husband wants to buy a house basically all in cash and is only concerned about the price. So he doesn't care about the area that we live in, or that with that budget, the house is most likely going to be a fixer-upper. I, on the other hand, would like to put as much money as we can as a down payment, but I'm opening to having a larger mortgage of about $150,000 with the mindset that we paid off as quickly as we can because we're frugal and we'll have that additional income.

The math comes out that our mortgage would be less than 25% of our take-home pay at that time, and my concern is that I want a good school district for my kids in a good area for us to live in. And I'd prefer a house that we don't need to put a lot of work into because we've lived in some crummy places being in the military the last 18 years. And so I just want to settle down and have a nice house that we can relax and enjoy. That all sounded so reasonable. So where is he coming from that he is frightened by the idea of, I don't know, a $1,500 mortgage? I don't know. We as adult, like our whole adult life since we've been married, we've never had any debt at all. We've never bought a car and took a loan on it,

like any of that stuff. So I don't know if it's just that we'd be taking a large loan and we've never owed money before. When you say large loan, you mean the $150,000? Yes, the $150,000. I mean, that's large. And what would the payment be? You've done the math. Is it about $1,500 on a 15-year-fixed? It would be $1,500, yes. Okay. And then your take-home pay would be $6,000, $8,000? a month? Yeah, our take-only pay would be a little over $8,000 a month. Okay, so this is all very reasonable. It's all green flags as far as the Ramsey parameters. And I think the part we need to compromise on is you going, hey, we're going to have an aggressive plan to pay this thing off early. So if you said, hey, we're taking on this 150, we're going to knock it out in two years.

Would he say, okay, great? I don't know. I know that he's just very concerned about that amount of money and I don't know if it's from growing up like childhood money issues or if it's just such a large amount. Sure. Well, this is not a consumer debt. So we're not going to put it in the category of this is stupid. We're always going to encourage 100% down if you can. But if this is something where, hey, three years from now, we need to buy a house. If you want to wait a year and just keep stacking cash and get even closer, that might be a good compromise too. But I don't like this idea that unless we have the cash, we're not going to do this at all, or we're going to get a fixer-upper. Okay. Yeah, you're on my side. So, yeah, I'm on your team. The question is,

he needs to be willing to come to your side a little bit. Okay. There needs to be a little bit negotiation so he can feel like, all right, I want a little bit. And that's the part I want to address. So, Stephanie, based on what, you know, you talk with George, what do you think is the emotional hold up. In other words, what do we need to address with him to where he goes, oh, I'm not giving into my wife. I actually see it the way she sees it. There's something that's holding him back.

What is it specifically? I think that he likes to be in control with money and just like in general being like the leader of the house. I don't know. And so like having no control, I like feeling of not having control because we owe this money. I think that's part of his like hang up that. But can I tell you what's behind that? Fear. Fear. Right. And have you guys had a conversation about this where it got tense or has it all been pretty chill? Oh no. I mean, we've talked about this for probably two years now and we literally

cannot agree. So this has been a two year. Is it tense? Discussion in our household. Um, no, he just shuts down the conversation basically. Well, that's tense. Yeah. I was going to say when the other part of the marriage shuts the other one down, that's tense. I don't care how it's done. It's still tense. I think you're going to have to sit with him and go, hey, I want to understand. I'm not trying to convince you anymore. We've gone round and round and round. But I do want to understand. I want to understand. And you can blame George and I. You called us up if you don't think that's going to upset him because it's not like, three again. What it can't sound like is three against one. Well, I told him I was calling you guys. And how did he say, how did he feel about that? He said, okay. He said hopefully they take my side. Okay, great. Well, here's what you can say. Here's what George said. And then you could say Ken took your side. But Ken didn't take your money side. Ken took your emotional side. Okay. And I mean this. And here's where I'm going. He is allowed to be

fearful. He is allowed to, because there's something in his past that shapes the way he views money and where he institutes control. And I don't, and I appreciate what you said, like he's got to be the man of the house. That's not what it is. It comes across probably as bravado, but that's not what it is. He's a scared little boy, and I'm not insulting him. I'm telling you as a guy who's had to deal with control issues, once I got to the fact that that it was about fear of something, and then I had to dig deeper and go, what was I afraid of? And it goes way, way, way back. And so on some level, he has that. So the reason I'm telling you that is not to judge him or belittle him, but for you to have some empathy for him

and then compassion toward his point of view. And when you sit with him and walk through his point of view as the counter to all your points of view, and you go, I totally understand that. what if I told you that this, you know, and you, then you take George's layout. George, I want you to come and tie a bow on this, but that's what I'm hearing. Yeah, I feel that. I definitely validate his feelings and I go, oh, you're crazy. That's not going to help anything. Are you guys living for free right now?

Well, we have like BAH, so we pay rent out of military money. How much is the rent? The rent right now is $3,000. And he's okay with that? I mean, no, but we're in a high cost of living. place and our BAH is exactly $3,000. So it's basically us just paying what the military gives us for housing. But basically we're trading $3,000 in rent for, you know, $1,500 mortgage that you're actually going to own. Right. So I think that's part of the math. The other part of the math is

home prices are a moving target. If you waited, you were like, it's 2019. We should wait until 2022 to buy home. Good luck. That house is now 50% more. And so the longer you wait, the more expensive this decision is going to become, which is why I tell people, when you're financially ready, which you are, you're following the Ramsey plan to a T, go ahead and get the house and then pay it off aggressively. Throw $4,000 a month at it if you want, knock it out in less than three years. You guys set the plan, set the goal. I've got a homework assignment. Christian, I'm going to put her on hold. Christian, guide her on how she can get to YouTube and pull this segment up, and I think they need to watch it together. Watch it together. Because we

got no skin in the game. We're actually for you guys figuring this out in a very good way, because I think it is a good move. The Ramsey Show Question of the Day is brought to you by Y Refi when your private student loans are in default. It's easy to feel ashamed or stuck. Why Refi won't judge you. They'll help you rebuild, refinance, and regain control. Visit yrefi.com slash Ramsey. That's Y-R-E-F-Y.com slash Ramsey. Not available in all states. Today's question comes from Carly in Washington. She says, my husband is 55 and I'm 42. He's the breadwinner of the family and would like to retire in the next five to seven years. Does it still make sense to focus on paying off her house while still investing only the recommended 15%?

It seems like your advice is great for younger people. but not people at the end of their careers looking to retire and enjoy life before they die. Please help me understand why investing more now instead of paying off our house is a bad idea. Well, number one, I don't remember where in our plan it said you should just only enjoy life when you're close to death. I don't remember. That's not maybe step eight. We recommend 15% in retirement than anything beyond that. Let's start chunking it at the mortgage because here's the deal. Paying off your house is a huge part of your ability to be able to be able to to retire. You get rid of that mortgage payment. You get rid of that biggest line item in your

budget. Well, now we need less to retire. Would you not agree? If you've got rid of that $2,000 mortgage payment, you need $24,000 less of net income in order to live. So I think it's a huge part of your wealth building. And I think if you get aggressive at knocking out that house, you can increase investing to 30, 40, 50% of your income and make up for a lot of lost time. And she's 42. My guess is she's going to continue to work for the next, you know, 15, 20 years, which is going to help support this plan as well. So that's my take on why you shouldn't invest more now, because you go into retirement with a bunch of debt, but you were able to invest. I don't know that that was a winning plan either. Yeah. Listen, the plan works. You know, it is curious to me

the statement, it seems like your advice is great for younger people, but not people at the end of their careers. My guess is they got a late start on investing, and so they're going, well, we need to really make up for lost time. Well, that's what it is. Therefore, why pay down this mortgage? She's just looking for, you know, well, we're just going to go invest, invest, invest, and not pay off the house.

It sounds like he may not be able to retire in the next five years if the math doesn't math. And I don't know that investing a little more is going to get you guys there with that short of a time horizon. That's right. It's the long game, the long game, the long game. That's what the baby steps are about, and it pays off. Ryan is joining us now in Phoenix, Arizona.

Ryan, how can we help? Hi. I just wanted to know how me and my wife can survive keeping her home. Our current income is probably about 4,400. I'm in the middle of purchasing a business to help up that income a bit. um i would need to be taking out a loan on uh to purchase the business um we have that would up potentially potential for it after the expenses uh of the business to up that income to 5300 a month um and we have a total of 30 or sorry 344000 in debt without having that

business as the debt is that including your mortgage yes okay take the mortgage out What is your consumer debt, everything but the mortgage? $21,000. Okay, what debt is the $21? So $16 will be from credit cards, and $5,000 is a car. Okay. And what's this business going to cost? Business is going to be $40,000.

So you're going to go into debt $40,000 to increase your income by $900? Yes. But I'm also going to be keeping my wife home at that point. And that would take care of her. It would up that income and subset her from having more. I don't know how adding more debt to the picture, adding more risk, adding another payment allows her to stay home. That feels like some backwards math. So I would figure out if we want to buy this business, do it in cash.

I don't think the ROI is there in this business currently. It sounds like it's overvalued. So, if after paying all the expenses, which their expenses were about, it would, the debt payment would be... That's not counting the payment on the loan that you need to make. No, that is, including. So the payment on loan plus expense of the business, I mean, I just... It would give me $3,000 a month profit. Number one, I'd never recommend anybody going to debt for any business, whether it's your own, buying a different business.

And the cash flow, just, it's not that impressive overall. bucks is in the difference. So the truth is, your wife might need to work until we clean up this other debt. I don't think the 21,000 in debt is what's stopping you at this point from her working or not working. But I would at least clean that up, get an emergency fund in place, and then do the math to figure out, can we do this without going into debt again? We have about 10,000 in savings that we are just, we've been holding back on like paying off the credit cards because the majority of the credit card debt is on a zero percent interest credit card at the moment. We're just making the minimum payments on it. You're not selling me with your

0% interest rates, man. I know. I know. Knock out the car loan today. What's the car payment? Car payment's 100 a month. Okay. So you get 100 bucks a month back in your life by knocking out the car. You can throw another four credit card debt. You'll knock out a card out of that. What's left? Is that a bunch of cards or one? It's, I have like three or four, and they all have like a couple thousand each on them. You've done balance transfers to 0%. I've no I didn't do a balance transfer zero percent I uh the 9,000 was for a school like purchase for um really trying to learn real estate and so on and so forth on that is that your business no my business is a pool business in phoenix here okay and you're buying another

pool business no this is I'm purchasing the business for the pool the pool business is the one that I'm purchasing. Got it. So what's the, what are the deal points of the purchase? So, um, I'm technically, I did some research on the pricing of the business. Um, I'm actually getting from every source that I've looked at, I'm getting a 20% wholesale value of the business currently. The business is currently, um, currently worth about, uh, 60,000, but I'm being sold to it at 40,000,

which is just basically what I'm doing is I'm purchasing all of the customers that are on, and I'm also purchasing the equipment that was used. And who's the current owner? It's my brother-in-law. I mean, I've got to say, I've never had anybody ask me advice on buying a business that's worth $60,000, but I don't think that's a great idea. You're calling about debt and paycheck-to-paycheck living, and I'm sitting here the whole time going, how are we going to make this guy some more money?

And you're getting wrapped up in buying a business from your brother-in-law that's grossing $60,000. That's not a lot. And I'm not trying to pop your bubble, but is this a wise decision? My main goal is to grow the business and be able to make this my full-time job because it is a very hot market here in Phoenix, being it's so hot in so many pools. and I've been doing my Why not just drum up new business, find new customers and make it a sweat equity deal instead

instead of you going into debt, where you give him a portion of the profits until he's paid out? The big problem is he's racked up a lot of credit card debt himself. Yeah, see, that doesn't mean you should help him out. This is a fire set. Yeah, I know. Well, if you know.

He moved out of state completely, and that's why he was going to sell it to either someone else or he was going to sell it to me. So it was either one or the two, and he was going to give me a discount and he wasn't. Can I tell you something else? I don't know who else he's going to sell that to. I think I'd renegotiate and no cash. I would say you're going to give it to me for free and I'll give you 50% of the profits for a year and then we're done. That's fair.

I like those deal points. He's desperate. Yeah. I mean, if you make 60 grand of revenue and net profits, are, you know, 40 grand, he gets 20 grand out of the deal for doing nothing. I wouldn't go into it with the terms. I am not in favor of you doing it under the current terms. I think that's a bad deal and you're going to regret that and you might resent your

brother-in-law. That's my concern. And you got to make more money. I got into that whole deal just trying to dig around to go, man, you got to make money. So, you know, George, we talk about cutting, cutting, cutting. But, man, when your paycheck to paycheck, yes, you cut. But you better start bringing in more money. Yeah, adding to the debt doesn't help getting out of that paycheck-to-paycheck cycle.

Christmas deals. I like a deal and I like Christmas. So I'm not going to go against that. I love a good Christmas deal. But I don't know anybody that loves a deal more than you. I don't care if it's an Easter deal, a Halloween deal. Well, I just, I don't like paying full price for anything. That's for the truth of it. Well, you, this is a, I could call this a George Camel sale. That would have been a better name. I'm going to be honest. This is our unbelievable Christmas deals that we bring out every year. Santa Dave has dug deep in the bag. We're going to have. have bestselling hard covers, all the personalities, hardcover bestsellers, only 13 bucks. Questions for humans decks. Deloni's got 703 of versions of those. All of those are $12.

Audio books and e-books, only $7.99. Are we losing money? I'm starting to wonder. That's cheaper than a Chipotle Bowl. And then all the different assessments, the disc assessment, the get clear career assessment, $20. I don't remember approving. that. These are unbelievable deals, so much more. Go to Ramsey Solutions.com slash store. Ramsey Solutions com slash store. Or if you're watching on YouTube listening podcast, in the old show notes, they just have links. Anthony is joining us now in Seattle, Washington. Anthony, how can we help today? Hello, Ken. Hi. I'm George. Hope you guys are doing well. We are. My name is Anthony Pink. I'm over here in Seattle. Love and Life. Great. Found Dave Ramsey, 23.

F.P.U graduate. I joked to myself. I thought Chef Ramsey was good with finances, and I found out of a different person. Disappointing. Disappointing. No, it was positive. We've been following the babysat my wife and I, and I had a general question about tithing on 401K interest in traditional investment. Do you guys do that? Is that suggested by Ramsey? What's the lowdown on that? Well, we're never legalistic about this, but there's a good methodology to think about it to go, okay, the tithe traditionally is on the increase. So your profits, what you actually take home. So if my investment grows, but I never saw the money because it's just still sitting in an investment account, I'm not going to tithe on that. But if I sell $10,000 worth

of investments and I took that home, that's on my tax return, then sure, you can tithe on that as this is income we brought above and beyond. So is that what you're talking about here with investment growth? That's correct. Yeah. So it's all the money analogy, I think, that hits a note. Well, the technical term is a realized gain. So an unrealized gain is, hey, it made money in the investment account, but I haven't

actually sold it. The money never went through my fingers. So if the money goes through your bank account, you can count it as income, and you are free to give on that. I like it. Is that simple enough? Simple enough. All right.

Great question. Thanks for the call. I don't know if there was more there. But that's my, that's one man's take. Yeah. From a math and theological standpoint, I hope it wasn't heresy. But here's the thing. If you want to give more, you're not going to, you know, no one's feelings are going to be hurt.

If you want to tithe more, be more generous. But from a biblical standpoint, when I look at the tithe, I go, this is all about the realized gains, the things that you took home. That's right. So, well, if I didn't see the money, I'm not going to tithe on it. I agree. And I think that, again, without going too deep on this, there was no heresy there. But I would say, again, it's tithing. If you dive into it, biblically, is about the first fruits, right?

And so something that you receive, to your point, if it's actual income, however you get it, again, that's for your interpretation. You know, that's between you and God. Scripture is clear on tithing and 10% of first fruits. So that's kind of why we're not super legalistic on it, but we lay out the theology on that, and you do what you want with that. Stephanie is up in Los Angeles, California. Stephanie, how can we help?

Stephanie Wow She waited all this time Just to not make it on air We'll try to get her back Nate is up in New York Nate how can we help Hi

How's it going guys Good how are you sir I'm doing good So I'm 19 and I'm starting my first year of college In January And my first year is paid for I have a benefactor who is going to take care of all the stuff for that, except for housing and food.

And I'm just trying to figure out the best way to save and to budget and to have enough for my second year of college. Love it. How much is that going to cost? So it's projected to be about $11,000 a year. Okay. And are there any scholarships or grants or anything available that can lower that amount, or is that included? That's not that I can get a hold of. And like I said, I'd like to stay out of any government grants or government loans or anything like that.

Well, sure. Do not take out debt. That's not what we're talking about here. But if you can get free money, I would do that. And if not, now we've got to figure out how to save up $11,000 by whenever the payment is due. So is that December of 2026? January of 27? Yes. Yeah, December of 26. So we'll call it a year. So basic math says, let's save up a thousand bucks a month to get there. Can you do that right now working part time? I should be able to. So right now I'm starting a job. I'm starting a job at noon tomorrow. That'll be paying $16 an hour. And then when I move out there, I have a job for, 1550 an hour. Nice. How many hours? And that'll be 20 hours, like starting out. I'm going to try and get a little bit more. But they have promised me a full-time job with a pay raise during the summer. Wow. So you can make up for lost time there. That's exactly what I would do. Because even if you just stuck to the part-time job, you would likely have the perfect amount to cash flow the

following year. But if you really ratchet it up in the summer, you'll have the 11 grand plus some. And I would just park it in a high-ield savings account all year long and pretend it does not exist. Yeah. Okay. This is a great plan, man. I'm proudy. And you can continue that for the following, you know, the last two years? I should be able to. And I got a pretty good situation. I'm living for $5.50 a month. That'll be rent. And And then, you know, food, I can live for $50 or $100 a week. I love it. Live like a broke college kid because you are.

That's the way to do it, man. I'm proud of you. Keep that up. Yeah, I love that. Great discipline there. You know, live like a broke college kid. You know, there's something to that. And I love that you said this because this is real.

So I've got to set this up. Got to be careful. Of course, I don't read the comments. So I guess I don't need to be careful. Yeah. You read the comments. They will roast you. and you'll tell me they love you can um there are a lot of young people naturally so coming out of

college and it's tough to get a job that your degree said you were going to be able to get that's real cost of living is very high tough to buy a house in those first couple three years that those days are seemingly gone for a lot of people and and yet we forget that when you come out of college even though you're out, it's not a bad idea to live like a broke college kid for a little while, just to get some stability. I guess my point is, is I'm saying, I want you to have as much as you can get, but at the same time, a little bit of patience, a little bit of having to live like my grandparents used to live, which is on way less than I actually make. And I think that that attitude is not very prevalent right now. Am I right or am I wrong?

A hundred percent right. The problem is, you know, social media and expectations and friends make you want to live a lifestyle you just can't afford yet. And you go, I have been in school for 22 years. I want to finally live. I deserve the nice car. I want to live in a nice place. And all of that leads to being broke. So the longer you can suppress your lifestyle, the better off you're going to be, the more you can amplify your long-term wealth building. And that's the rub. The people who do that, like our friend here, he's going to be just fine. It's going to be great. It's the ones who go, I'll take as much monopoly money from Sally Mae as possible. Oh, and by the way, I want to the fanciest apartment in town and I want to have a fancy car and you go dude you can't afford

this life now it's going to delay your other dreams so don't complain when you can't buy a house because you're in crippling debt that's not going to help so that's the key live like a broke college kid live like no one else so later you can live and give like no one else speaking of which real quick on hot seat your favorite broke college kid meal oh gosh i mean ramen is hard to beat if you have access to hot water you've got access to a great meal. Add some saracha in there. I'm going to go with you. Chef's Kiss. And I'm much older than you. Back in my day, you could buy 10 ramen noodle packs for it for $10. 10 bucks? So a dollar a pack? I thought it was cheaper. It was like 10 cents a pack.

Our scripture of the day comes from Isaiah 29, verse 24. Those who are confused, will gain understanding, and those who grumble will accept instruction. Our quote of the day from Booker T. Washington, success always leaves footprints. That's a nice, short, like, bomb of a quote. Like, phenomenal. Just boom. I like the brevity. Go do your homework. Follow the footsteps.

Stephanie's up in Los Angeles. Stephanie, how can we help? Yeah, hey, guys. I appreciate you taking the call. Sure. Um, my husband and I own our home here in, uh, actually Napa, California. And we have been, uh, talking about doing an addition to our home. Uh, we had to buy it at, um, a kind of a rundown, um, or a rundown look of it so that we could afford a place here. And so it needed a lot of attention. And now we're at a point that we're looking to, um, add a little bit of square footage to a kitchen and living room. And at the moment, we've been talking about doing a second on our home in order to have the cash flow. We do have some money set aside in a savings account.

I just am hesitant to want to use the money in a savings account versus the second. Versus putting your home on the block at risk as collateral with a second mortgage and adding a payment. That sounds more exciting to you than liquidating the savings that you had earmarked for this specific thing. Yeah, and maybe that's me being a little nervous and intimidated on letting cash out of my hands. No, what that does, it gives you the reality of what you're actually about to do. That's a good thing. That's your body saying, hey, a home addition is expensive. You sure you want to do this?

And when you take out a second mortgage, it's like, woo, free money. When really you're just borrowing against your home, moving back. backwards, adding stress and payments to your life and risk on top of that. So I would never recommend anyone taking out a second mortgage to do an addition. I would tell you to just cash flow it. So you have the money to do the whole thing right now in cash? Yes. So my husband and I both work for the fire department. We do all right. We roughly make about $300,000 a year. In the last two and a half years, we've done six rounds of IVF, so that was very expensive for it. Yeah, and you were able to cash flow that?

We were, and that's the almost the struggle part to it is that, you know, it's in the last two and a half years, we've spent about $200,000 on IVF. And so we, you know, we know the expense and we know how much it didn't set us completely back. However, it definitely was a lot out of pocket. And then so we are looking to obviously expand our family because of the IVF that we've gone through, and hence the reason why we needed or wanted to expand the house. So what's the current status with the IVF process? Where are you guys at?

Yeah, so the last round was the most embryos that we've actually received. Awesome. We have four embryos at the moment. Our son was an IVF baby on our first round, and it was a success. We've now done five additional, and up until just the last two, we hadn't gotten anything. We hadn't even gotten tested quality embryos. So we were struggling with that for a little bit there. And then this last year in 2025, we paid.

$50,000 up front to do two rounds of IVF back to back. And in that two rounds of IVF, we actually have received for quality embryos. Okay. Well, at least you guys have the ability to save up and you're putting your money where it matters. So I'm really proud of you guys and I'm hoping for the best there. What is the addition going to cost? So in my heart, I want it to cost $100,000. I have about, I think maybe $120,000 is, you know, my margin of error. And my husband and I have about $250,000 in savings at the moment. Oh, amazing. Just cash flow and get it done.

It's been loom. It's living rent-free in your head at this point. Your peace of mind is worth something. I would spend it and not look back and have no regrets and you'll have a beautiful house. You guys are doing it the right way. no need to add risk and stress to your life by taking out a second mortgage. Okay. All right.

And hey, the last thing you need in this process is any stress, right? Yeah, exactly. I mean, you know that. You're a pro with this. So, you know, that's just one more reason. I would be the peace of mind, the joy in your heart, that all goes into this deal. You know that. Yeah.

So. Yeah, absolutely. Okay. Well, I think it's maybe that simple. maybe because I have you guys one maybe last question with the money that I have in the savings account that we have in the savings account minus now maybe the addition so let's just say we have roughly about $100 to $150,000 left in a savings account what is your guys's best advice for investing it well does that include your emergency fund

As of right now, in hand that we own, we have $250,000 in the bank. Okay. We did use it to do the house addition, you know, minus the 100, 120, maybe 150, God forbid. So I would separate that out and go, okay, we're going to keep 40 or 50 as our emergency fund and the rest we could invest. Let's say that's $50,000. You could use that to front load some college accounts. If the kids are in the picture, you could use that. to fully fund some backdoor Roth IRAs for the year for some tax-free growth on that.

You could invest outside of retirement as sort of a bridge account, maybe for future spending for the kids, you know, to just leave money growing for you. And so there's a lot of things you could do. And then just life along the way. You can enjoy some of it. Sounds like you guys have been through a lot. Maybe you take a vacation. Maybe you give some. And maybe you cover IVF for another family who's going through it. There's so much you can do. with that, but it comes into three categories of you can give it, save it, and spend it. I would encourage you to do all three. Okay.

Yeah, thanks for the call. We're rooting for you. Yeah. Let's go to, you feel like we can get to this one, George? We can try. I think we're already here. Let's go. Let's go, Rachel, get right to the question.

Rachel and Tulsa, we've got a couple minutes. What's your question? Hi, I am married. I'm currently disabled. I have some medical issues going on. I'm trying to figure out with my medical bills. They won't let me make a smaller monthly payment. I'm trying to figure out if I should put all money that I was putting towards my student loans

towards my medical bills or if it's okay to let them go to collections. Are you want a payment plan currently or is a minimum payment you need to make? No, the payment plan, they say the lowest payment plan I can get on is about $500 a month. How much is the medical debt? do that. The medical debt is about 7,000 and it's a couple different accounts. And so the $500 a month is a couple different payment plans. Wow. Have you looked into financial assistance programs through the hospital, charity care, sliding scale? Yes, I have. And my husband makes too much money. Okay. So how quickly could you knock it out? Because it sounds like you guys could make the $500

payment. Let's say that is the minimum, and then you just knock out your other debt's a little slower. The thing is we can't do $500 a month, even that. How much does he make? He makes like $83,000 a year, which is great, but I still have about like $700 a month in medical expenses besides bills. Would they take a cash lump sum if you offered them $5,000 instead of $7? They said if we offered them $4,000, my biggest bill, they would take $1,000 off. But the only way we could get that lump sum is through parents, and I didn't want to borrow money for my parents. Yeah, I agree. But I think the question is, can we continue the debt snowball?

Maybe we make minimum payments on the debts and try to save up that $4,000 to try to get that discount. I would try to do everything you can. I would look at the medical billing and coding and have them re-review it. I just did this yesterday with ChatGPT, and it gave me a script for what I need to say on the phone to lower the bill. Love that, so I would upload your bill and seriously use that to try to lower it, then negotiate it, get real resourceful. And I think you can knock this out without it going to collections and damaging your credit. We believe in you, Rachel. You've got it. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

You know,