The Ramsey Show - App - "I’m 50 With No Retirement Living Paycheck-to-Paycheck"

Starting point is 00:00:14 It's broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio. This is the Ramsey show alongside the Natalie attired George Camel, bringing out another beautiful winter shacket. Love seeing the shacket make an appearance. Just happy to be alongside my good friend George Camel. I'm Ken Coleman. have a fantastic studio audience today out in the lobby. I got to tell you, they just look like

Starting point is 00:00:48 they're excited to be alive and here. And so we're grateful to see you all as well. Handsome audience out there, George. Absolutely. Let's go to Ann, who starts us off in Cincinnati, Ohio. Ann, how can we help? So I am 50 years old. I have no retirement, no savings, nothing. I am not, I'll be honest, I'm not good with money growing up. I don't have a relationship with my family, never been taught how to manage money, how to budget. And I would like to start 2026 doing that, and I'm just overwhelmed with how to start, where to start. I know the snowball, the dead snowball. I just, you know, I also have health conditions where I was out of work for a month.

Starting point is 00:01:41 In October, I was in the hospital, and it's just, it's snowball, and I feel like I just can't catch my breath. And I don't know where to start or what to do. Okay. Well, you came to the right place, and we're going to start with two words. It's possible, because you understand the baby steps, but the idea of how to actually make it work for you seems like an absolute impossibility. True or false? That is true. Okay, great.

Starting point is 00:02:07 So we start with it's possible, all right? So, George, let's do our thing. Let's get into the details. Let's get some numbers. And the fact that you even decided this at 50 is amazing, because I know you think it's too late for you, but there's someone who's going to call in probably today who goes, hey, I'm 62, and I got nothing saved. So Ann's doing great. She's got a 12-year-a-head start. And so it very much is possible, and we're going to dig into the numbers here to give you a tactical plan. So are you working full-time right now?

Starting point is 00:02:36 Yes, I am. Okay. What do you make? What do you bring home every month? I bring home right about 1,400 a month. Okay. A pay period, which is every two weeks. So 28?

Starting point is 00:02:51 Yes. Great. And are you renting right now? I rent, yes. What's your rent? 15. Woo! Okay.

Starting point is 00:03:00 So there's, I'm just throwing up the flags. Flag number one, over half of your income is going towards rent. So there's one problem to solve. We'll put a pin in that. Now, tell me about your debt. How much debt do you have? My debt is medical bills, and then, again, one of the worst things you could possibly do is, like, payday advances with incredibly high interest rates. What's the balance of those?

Starting point is 00:03:27 Balance of those is 10. 10K total between the medical debt and payday? Yes. Okay. No, between the medical debt is right around 15, and then they cash advances in. 10. Okay. Any other debt? No, I do not have any credit cards. I don't have any of that. What do you do for a living? I work in a medical office building. Doing what?

Starting point is 00:03:51 I'm kind of like a patient advocate type thing, like receptionist. I work with patients. Are you hourly or is that your salary that we got from you? I am hourly. What is that rate? 2377. Okay. And then I'm curious about your physical. stuff that's going on. Are you on the other side of that? Is that going to be a lingering thing that will cause issues for you because you've mentioned it? That will be something that will linger. Does that affect your ability to work? No, there are times that I have to be off, but no.

Starting point is 00:04:27 Okay. But you're still pulling 40 hours a week and all that? Yes. Okay. Now, what other bills do you have because are you are you going you know kind of beyond the pale here into the red every month because you don't have enough money with the 2800 and so that's you're turning to payday loans to fund the gap yes okay because i have electric gas internet cable car insurance and a car payment okay are you doing any investing right now through a retirement plan none okay good because we got focus on this debt. Yeah, we didn't catch the car debt. All I heard was the payday loan and medical debt. What's the car debt? I apologize. The car, it's $450 a month, and it's right around $16. And what is it worth? It's a 2022. I would say it's probably worth it. I mean, I really haven't looked

Starting point is 00:05:26 it up. Hey, homework assignment number one, because if we can get out of this car, we just gave you over a $5,000 raise. Are you tracking with me, real numbers here, Ann? Okay. So I'm telling you, Kelly Blue Book is what we're looking for to sell this thing. And then you're going to get a, you know, cheap car. So let's say you've got, I'm hoping, what kind of car is this? A 2022 what? Kia K-5. Okay. And you owe 16 on it. So let's say you come away with four or five grand in equity. That's what you're doing. That's what you're putting towards another car. And now you've saved yourself $450 a month immediately. Okay. For your budget, it's huge. And George, I'm jumping in and getting ahead of the game here. Now, this is great. But what's your, what's your apartment situation?

Starting point is 00:06:19 Are you in a lease? When is that up? It's actually a home. It's a three-bedroom, one-bath home. It is up in April. Okay. You don't need a three-bedroom home. Yes. Unless you have two rooms. roommates. Okay, fantastic. That's where I was going. That'll cut you down to 500 bucks a month, wouldn't it? Your share? Yeah, around here, a one-bedroom is about 1,100,000 to 1100. What about some elderly couple or an elderly lady who's got a room over a garage? I just believe in most cities in America, you can get below $1,000 a month if you find something like that. Am I nuts? Tell me if I'm wrong. But the other thing is, so our parameter for your rent,

Starting point is 00:07:11 your mortgage is a quarter of your aftertax monthly income. And so for you, we're talking about 750 is really where you're going to max out in order to accomplish any financial goals. And so as long as you're in this lease, you're going to be stuck because you have no margin. As long as you have this car, you're going to be stuck because you have no margin. But see what we're doing, Ann, we're looking at all the things that you can actually control, even though it feels like they're immovable. objects. Well, I got to have a car. Yeah, but you don't need a 22 car. You could have a 2013 and I'm not even driving a 22. I got to have an apartment and they're expensive. Sure, but you have three bedrooms and you only need one. So let's get two roommates. Go on Facebook, find an area. You know,

Starting point is 00:07:52 if you're in Cincinnati, jump on. There's a Cincinnati roommate Facebook group and vet them, interview them, meet up with them for coffee and say, hey, I'm looking for a roommate. It's going to be $500 plus utilities. And all of a sudden, you just cut a thousand. You just cut a thousand. thousand dollars off your rent. And if you sell the car, you just cut $500 there. That's $1,500 extra a month you would have. You understand what we just did? Yes. And so you're $41,000 in debt. If you could throw $1,500 at the debt, you're done in 27 months. If you do nothing else. And I would cut cable yesterday because we're not going to be watching the latest season of Survivor. We've got to probably get a second job on top of that. And I want more work.

Starting point is 00:08:32 Nights and weekends. That's it. More income on top of all of this. George, what can we give her? Every dollar is a great start, and I'm going to give you my book Breaking Free from Broke. It'll walk you through the entire plan with tons of ideas to help create that margin. Hang on the line in. All right, next we go to Samantha, who's joining us in Knoxville, Tennessee. Samantha, how can we help today? Hi, thank you so much for having me. I really appreciate you taking the time to take my call. Sure. So my husband and I got married last year, and we're currently on Baby Step number two. Um, we're, I didn't think we had that much debt, and so I was like, oh, we can get this paid off quick.

Starting point is 00:09:38 It's going to be great. Well, when my husband graduated high school, he had an agreement with his mom that if he went to college, that she would pay for it, which is amazing. I thought she must have, like, paid it out of pocket or got a personal loan. But it wasn't until about three months ago when my husband checked his credit score to find his credit had dropped drastically. And that's when I learned his college. was paid through a federal student loan in his name, and his mom had stopped making the payment.

Starting point is 00:10:09 When he asked her about it, she said that she forgot about them, and she would start paying them again. Well, since then, she's continued to forget, and she told my husband that we need to call and ask for a lower payment plan so she can afford it. I want to just take over the payments ourselves, since it's his loan and pay the student loans off ourselves. but my mother-in-law wants to pay for it and she doesn't want us to pay them but she keeps like kind of forgetting and kind of ruining his credit score and we're hoping to build a house soon or buy a house but we can't do that with his credit being where it is although my credit is good I still worry how it will affect you know us getting any sort of loan and I'm also worried that if you know we pay them and tell her she could pay us back I'm worried it'll become one of those like, oh, borrowing money from family type situations and it'll put her strain on the relationship. Overall, it just feels like a very yucky situation.

Starting point is 00:11:11 So I was hoping to ask for some advice. Do you think in any way that your mother-in-law is playing some passive-aggressive game here? I don't want to say that. No. Oh, no, hold on, hold on, hold on. Hold on, hold it. Now, see, I've been doing this too long.

Starting point is 00:11:30 So now you just told me something without telling me something. I'm not saying that she is. I'm feeling that it's possible. And when I asked you if you think she's doing that, you went, well, I don't want to say that. But that to me says you think it's very possible. And I think it's possible. In other words, here's what's not computing for me. She keeps forgetting.

Starting point is 00:11:57 and then she reaches out and says, hey, can you call them and see if they can lower the payment? So a person who says, like, I don't think she's forgetting. And then I also don't buy the idea that when you said to her, well, we'll take over and we'll pay it. And she goes, no, no, no, no, I want to pay it. I don't think she wants to pay it. And I actually don't think, and George, you can come over the top ropes here. And Samantha, you can tell me I'm wrong. but I'm giving you my gut read here.

Starting point is 00:12:29 I think she wants you to forcefully take this thing. Like, I think she wants you to take it, but she feels shame. She's embarrassed. I think there's a lot of emotion going into this, and her resisting is really not resisting. She wants you to be, and when I say forceful, I don't mean ugly. I just mean, I think she wants you to go, no, listen, listen, it's okay. You've been great, blah, blah, blah, blah, we're going to take it. Mom, it's my loan.

Starting point is 00:12:54 We're going to do it. think she wants you to do that. I don't believe that if you were to do that, it's going to break the relationship at all. Sure. That's my take. Yeah, and that's what I was thinking too. I was thinking that, you know, if anything, it helps her out, obviously. A hundred percent. But I think there might be like a sense of pride there. A hundred percent. That's like, hey, no, I want to take care of my son. I know that it was a very hard transition for her when we got married. She had a really hard time with it. Whoa, whoa, whoa, whoa, whoa, whoa. Whoa. Whoa. She had a hard time when you guys got married?

Starting point is 00:13:28 Well, she just, not like a hard time. Like, I mean, we get along and I go over there every week, you know, we're great. We're very simple and all that. But she just kept telling my husband that it just felt like she lost him to me and all of this. And so it was very hard for me. There's something for stuff going on here. Now I know I'm right.

Starting point is 00:13:45 Now it's not a feeling. Everything I just said is completely fact. You could chisel it in stone. This is a passive-aggressive thing. and you guys have got to be the adults here and create the boundary. I'll shut up because I've now said my piece, George, but boy, do I know I'm right now? Let's put some tactical pieces on this. You need to take over these payments and go, well, we didn't know we're in debt, but we're in debt,

Starting point is 00:14:09 and that means we're not ready to buy a home, and that stinks. And you have every right to be angry and upset and frustrated with mom for her irresponsibility, frustrated with your husband for not knowing all these years that he had these debts in his name, which, by the way, if they're in his name, he's signed some paper. work. And so... Sure. Well, I think what it was is, you know, he went into college right after high school, and, you know, he was as a kid, basically. As we all were. And I mean, and it's fair to trust your parents, trust the people. I mean, I remember when I got my student loans, they were just like, yeah, sign here. You're good to go. And I was like, oh, okay. You know, and I did it because that was

Starting point is 00:14:42 just, you know, what they told me to do. Yeah. So I just think, you know, and I don't like that about student loans. We just sign, you know, basically everything away. Oh, I'm with you. You're preaching to the choir here, Samantha. There's a lot of, there's a lot of, A lot of predatory stuff going on there. That's for another day. But right now the issue is, mom can't pay, and you need to take this on because it's hurting your household. So now it's about protecting your household. Yeah. Absolutely. And so you don't need to have a blowup conversation with mom. You just need to say, hey, we're going to take over the payments. Thanks for what you've done so far. We got this. Yeah. Absolutely. And now how much do you have left? So I said to say,

Starting point is 00:15:18 I also have a student loans. He has $17,000, around $17,000 in student loans. I personally, only have $12,000 in student loans. Okay. And I, my student loans right now are in forbearance. They're in some sort of save plan, which some federal court, you know, hasn't decided on the payment plans. And so they are, every time I've called, they're like, no, no payments are necessary. I log into like my federal student loan account and whatnot.

Starting point is 00:15:47 And it says no payments are due until 2027. But I was looking at it the other day and I noticed that it's still in quite, firing, like a accruing interest. Yeah, forbearance accrues interest. I don't know. You miss that in the fine print, but that's the issue with these save plans. People think, oh, my gosh, thank you, government, as your balloon, your balance balloons, unbeknownst to you.

Starting point is 00:16:09 So that's like a very low payment, but it's our big, like, currently other than his student loans, that's our biggest debt. What other debts do you have? You got 17, 12, what else? So I've got, my vehicle has a little over $5,000 left on. it, which I plan to pay off in a couple of months. And then his has $9,000. And then I have a credit card that has right at $9,000.

Starting point is 00:16:34 And then we have furniture that we bought when we were freshly newlywed. I know it's kind of a stupid thing. How long you've been married? Now, we got married in May of 2025, so not only a year. Oh, my gosh. You guys are truly newlyweds. Yes, truly. We are.

Starting point is 00:16:52 And I'm trying to do it the right way and get every. What's your household income? Yeah, so we bring in $7,000 a month. Okay, good. So here's the deal. You're going to list all of these debts out. You're going to have a come to Jesus meeting tonight and list out all the debts, smallest to largest, break them out individually. Not 12,000 student loans, but hey, there's seven with all these different balances. I don't care who's debt it is. We're going to list them all smallest to largest balance, and then we're going to attack the little one. Do you guys have anything in savings right now? Yes, we have about $4,400 in savings at the moment. Great. So baby step $1,000 starter emergency fund, which means $3,400 can go towards knocking out a few of these debts.

Starting point is 00:17:31 Sure. And do you still have the credit card open? Is it in your wallet right now? Yes, but I don't use it. I have not used it. It's already cut up. Last year, I actually led a Ramsey class, and I taught a Ramsey class, and I put up my credit card in. Good. Okay. Have you guys made progress since then on these debts? Yes, we have. Okay. What's been your plan thus far? Like, are you doing the debt snowball? Are you doing an every dollar budget? Yeah, we're doing the debt snowball. My bank doesn't connect to the every dollar app for some reason. So, but I've been, I have a notes app and I check our transactions every single night and I take it out of each line item. Okay. Well, this was one of these, you know, you had a pile of debt and now we just added to it.

Starting point is 00:18:17 And so we just, it's just going to delay the debt-free journey, but at least you are clear. on where you stand. Absolutely. Yeah. I really appreciate your help. Yeah, thanks. Thanks for calling. And I was thinking as you were talking to her about the, you know, the government, trusting the delay. You're like, oh, thank you, government. Yeah. It reminded me the old phrase, politicians is the only people that when their hands are cold, they put their hands in your pocket. Oh, that's a good analogy right there. I love that. Sorry, I just had to get that out. That's just an equal opportunity,

Starting point is 00:18:48 offensive statement. I don't care what party you're in. They all, they just put their hands in your pocket. All right, George, we're going to your old neck of the woods, Boston, Massachusetts. Tiffany's waiting for us there. Tiffany, how can we help? Hey there. Hi. So, funny, we moved to Boston in 2022 from Charlotte, North Carolina, and we planned on staying here, you know, for the long haul. But we got calls that my job was being moved back to Charlotte, North Carolina, and my husband got offered a leadership role. with his group in Charlotte. Wow, that worked out.

Starting point is 00:19:48 What are the chances within the same day, within an hour, you know, let's sell the house, and move back to Boston. I mean, move back to Charlotte with our family and whatnot. So we're walking away with about probably close to a little over 300,000 from selling our home. And I'm torn on what to do next. We're limited in our buying pool because of school. my son's getting ready to answer middle school. We don't want to, you know, we'd rather bring him back to where he knows everybody and whatnot,

Starting point is 00:20:22 but I don't see myself or see us staying there after he graduates high school. So I was crunching some numbers over the last week or so, and I'm like, does it make sense to buy another house in Charlotte or to rent because, you know, can maybe invest or maybe buy a house that's maybe we see more long term or, you know, on the coast or whatnot. So I'm kind of torn on which direction we should take on our next chapter. So a couple quick clarifying questions. He's just starting middle schools or what are we saying? Five years, six years? Exactly. I'm thinking like six to seven years and then, okay, let's fast forward. Okay, great. Let's fast forward. It's his senior year,

Starting point is 00:21:07 final semester. And you guys are moving to wherever or you're in preparation of move wherever. How does that affect your jobs? Can you do those jobs remote or are you guys cashing out of that too? Yeah, so I guess it just depends on, so we make very good money. We'll be actually getting an increase when we move back to Charlotte and cost of living is drastically different there. What will your combined incomes be? Yeah, it will be about $350. Okay. All right, keep going. So, yeah, can you stay with this company or how's that work? Yeah, we can stay with the company. You know, work for major financial institutions.

Starting point is 00:21:49 They're all around, you know, the country. You know, my husband loves the job. So even we're okay with even staying in North Carolina, staying in Charlotte, but maybe just not that where we, you know. Where you would be for five to seven years? I totally understand. So you've got to stomach it for seven years so that he can go to the school you want him to go to. Right?

Starting point is 00:22:08 It's a good question. I'm going to defer. I've got an. opinion, but I'm going to defer to my financial guru buddy next to me. Here's how I'm thinking. You have a strong financial position. You guys have no debt and savings and you'll have 300 grand. Yep. I would buy a house and I would pay it off. You have a car loan. Yeah, we do have two cars. I would clean that up as soon as possible, probably before you sell the house with your fantastic income, just knock it out. And once you guys, you know, sell the house,

Starting point is 00:22:40 I would just move as soon as you could to buy a house. And you put $300,000 down. What is a house going to cost in that area? Yeah. So we were looking in like the $400 range, $400 to $500. Oh, okay. We didn't want to go anywhere crazy like here in Boston where we have, you know, we're in the 1.3.

Starting point is 00:23:00 We're looking at this up where I was like, no, I want to do that. Could you get a $550, $600,000 home that you love that you could see yourself in for a decade? Well, see, I don't like the houses that. No, I knew it. You've been in Boston. You hate, you're saying it's Boston. Let me say this, Tiffany, so you don't have to. We're doing this for a kiddo because of his friends, but she don't like that area very much.

Starting point is 00:23:26 What area is this? I'm just confused. You are. Yeah. No, don't buy. I would buy the cheapest house possible is what I was going to say. 100%. I'd go smaller and cheaper.

Starting point is 00:23:38 than you'd even think just because it's temporary, but I think it's long enough that buying does make sense. I would never rent that long. So I'm with George on that, but I was thinking, let's go as small and as cheap as you can stomach, because you're only doing this for- Tiffany's going to call back in two years and say, I hate this house. Get me out of here. No, she's focused. She's thinking about the next house. The other thing to think about is resale value of what is an area that actually is going to grow and appreciate so that this is a good financial decision as well. That's what concerns me. So I've been doing a lot of, I like the crunch numbers, and I was looking at the resale value right now, everyone in that area who purchased during the boom of 2019 are upside down on their homes.

Starting point is 00:24:22 So what is going on in this area? Then this is the area with a great, a great school that you want your kid to go to? I don't think it's a great school. It's just the school he knows. It is a good school. I'll call it a good school. It is a great school, highly rated. Wait a second. You can't call it good and great. I just feel like kids are resilient. If it's a wonderful neighborhood with a great school, he can flourish.

Starting point is 00:24:45 I'm playing with you, Tiffany. I'm having fun with you. I'm having a blast today. Here's the deal. Because of that, I believe that you should go smaller and cheaper. In other words, so let's say the top level houses are 400, right? Top level houses are probably closer to the 8th. I was thinking the four, that's the cheaper, the 450 is what I was thinking.

Starting point is 00:25:09 But I know, but you're saying those are the ones where people are under, they're underwater. Yeah, but I'm saying like, what, is it just you hubs and the kid? Yeah, we're small. We're three. I'm going to tell you something. I don't even want a big house. See, okay, listen, I'm going to tell you something. And this is me, and that's what Dave has trained us to do, is to answer these questions, obviously within our principles, but how we would do it.

Starting point is 00:25:32 And if I'm you, I would, because this is a limited amount of time, and your mind is already on the coast. I mean, you got the four S's in your head, I think, sun, sand, sea, and salt. Am I right? Yep. Come on. You're my kind of person. That's how I like to roll. That's why I moved to a cute little coastal town outside of Boston.

Starting point is 00:25:52 Yes. By the way, you're completely addicted. Once that seawater gets in your nose, you can't go inland. You can't go inland. So here's a deal. Because of that. George, Tiffany, if it were me, I'd be buying like a townhome in a decent area. And I'm going small, two bedroom.

Starting point is 00:26:14 If somebody wants to stay with us, kick the kid out, he can do an air mattress. I mean, that's me. And I know that that's, but if my wife were here, she'd be like, you're so intense on all your decisions. But I don't need four bedrooms. And that's what, it's so funny because we went from 4,000 square foot home in Charlotte. That's how they build them. They build them huge. We went to a cute little 2,000 square foot cape, and I told my husband, I'm like, I love it.

Starting point is 00:26:39 I love the cute little house. What does your husband think? We haven't brought him into the picture. Does he have opinions? Or is he like, whatever you want, honey? He's so easy. He's excited. We're going back to North Carolina.

Starting point is 00:26:48 We're closer to family. We're looking in the same neighborhood as his sister and their kids. So the kids are all going to be back together playing. That's all positive. It's just not where I've never felt Charlie. I'm from New York. never thought Charlotte. Right. But you're a good mom. There's no question. I think God's hand is all over this. I don't think

Starting point is 00:27:06 this is the universe. I'm just going to say that. And I think that because of this, if you take that $300,000, you need to pay the car off and whatever's left, get a cheaper house, smaller. Yeah. Good, a good real estate pro. Ramsey Solutions.com slash agents and get somebody who knows what you're trying to do. and I think you put a huge chunk down, knowing you're going to get all that back. I think you're going to get some appreciation in seven years, but there's no risk, and you've just lowered your payments. And with that combined $350,000 salary, George, they're socking money away like crazy.

Starting point is 00:27:43 And then she goes to the coast. Yeah. We're going from an $8,000 a month mortgage to probably when I was currently, it was like $2,800. Goodness, gracious. We're doing with that. We've never really, you know, It's interesting to go to the reverse cost. It ain't $2,800 if you buy what I'm telling you to buy.

Starting point is 00:28:04 You buy some $250,000 townhome or $300,000 townhome with $200,000 down. I'm stacking money for the coast. I'm like an animal for seven years. I'm thinking of the coast. I'm thinking of the coast and I'm stacking money like crazy. You stack $100,000 for seven years and invest that? You'll have over a million bucks to put towards this coastal home that you guys are dreaming of. So I think you're on the right track.

Starting point is 00:28:27 I would just say, let's go with some research and patience and a pro. All right, if you're working on the baby steps, the best way to do it is by using every dollar. Now, it's more than just a budgeting app. Now we've built the baby steps into the app and it has a coaching component. So it's a whole different product. Fantastic. You can track your progress, get personalized recommendations for your situation. And you can get coaching.

Starting point is 00:29:38 Did I tell you that? in the app. It's unbelievable. So it's like having one of us walk with you every day. I don't know what that would be like. Without having to hear us. I think I would probably be a lot more fun to walk with than George because he's just so neurotic. I feel like you have probably a mall walker's pace, which I think is a good pace. It is. If you're walking with me, you're going to be a little tired, but you're going to feel good about it afterwards. If you're walking with George, you're going to be reminded of all the things that could go wrong in the world. Is that fair? That's encouraging. Yeah, that's accurate. No, I'm kidding. I love George

Starting point is 00:30:08 Folks, it's just a joke, just sarcasm. We're actual friends. That's right. You can start every dollar for free today by downloading it in the app store or Google Play. Let's go to Madison who, oh, this is where George went to college, I believe. Mobile, Alabama. Madison, how can we help? Hey, guys, glad to talk to you.

Starting point is 00:30:28 So I have kind of a calculation question. How do you determine or calculate what is appropriate to spend on a vacation? and I'll add the caveat that this would be for our 15th anniversary. Hey. These are some of my favorite calls. I'm going to let George lead because there's a good chance I disagree with him. Well, let's check off a few boxes. Are you completely debt-free outside of a mortgage?

Starting point is 00:30:52 Yes. And do you have an emergency fund saved up? We do. Great. Okay. And how much are you planning to spend on this vacation? If you could just dream it up, how much would it cost? Well, that's a dangerous question because I'm both the nerd and nerd.

Starting point is 00:31:07 the spender, so their free spirit. Which means you've done the research. So let's not dream it up. Let's just think it. You've been thinking about it. What's the range that you think this is going to cost? So somewhere in the 5,500 to 8,000 range all in, like flights, food, food, coffee at the airport, like everything. How many days?

Starting point is 00:31:27 Seven whole because, you know, 15 years deserves a whole week. Well, let me tell you. Okay. And what's your income again? Did you tell us this already? No, I didn't. What's the combined income? We're about to have an income change, so I'll tell you kind of in a couple months where we'll be,

Starting point is 00:31:43 we will be at combined 135. Awesome. And when is this trip going to happen? October. Okay. And do you have the money now, or are you guys going to sort of save up with a sinking fund to get there? Kind of a both-a-and-so. So we're in babysat-4, we're investing 15%, everything extra,

Starting point is 00:32:05 is going to orthodontics or something comes up with the house. You know, we have the cash on hand to save up. So we've got a little bit of it saved up enough to get the tickets at this point. Great. So you can sort of start the cash flow and then continue saving for the actual kind of spending on the trip and all that. Yeah, yeah, absolutely. And there's no budgetary strain between now and October to save the rest of the money. It feels tight, but maybe it's just because it's a decision between, well, we don't have a lot

Starting point is 00:32:34 the 529. Do we put more there? We have five kids. So there's a, you definitely need the seven-day vacation. All right. The kids' teeth can be straightened out later. I got to tell you. That's kind of our thought. Madison, you're going on vacation. Oh, good, George. Yes, I say go. And don't think twice about it. The kids will be fine. Oh, I know they will. We're cashing in on the grandparent situation. So I know they'll be fine. I'm not worried about it. I don't feel any guilt or anything. It's more like, you know, I meant the 529 and all the things. You'll make up for long time. You can make up for that. This is huge. This is a big deal and, yeah. Okay. I'm excited for you guys. Well, that makes me feel better. Yeah, very good. Me too, man. I'm

Starting point is 00:33:16 counting down the days. By the way, where is this trip? Do we know? We're looking at St. Lucia. All you had to say was Caribbean for me. You could have started with that and Ken would have been like, I don't care or you're going. I'm telling you, I'm half pirate. I love the Caribbean. I love everything about it. If it's got a saint in front of it, count me in. Yeah, that's another thing. That's pretty much it. If you just say St. Something, I'm like, yeah, sure, I'll go there. Love it, love it, love it. Unless it's St. Louis. I guess I'm not looking forward to my 15th anniversary in St. Louis.

Starting point is 00:33:45 Now you went and offended everybody from St. Louis. Wonderful city, just not where I want to go for my 15th anniversary. I think that's fair. Fair point. You pulled that out of the ditch. Just want to make sure the good people of St. Louis. Nobody wants to go to the top of the arc and take a selfie for your 15th. I'm scared of heights, so no thank you.

Starting point is 00:34:00 Let's go to Gina in New York City. Gina, how can we help? Hi, guys. Thanks so much for taking my call. Sure. I'm just wondering what I should do with the $6,000 that I have saved. Should I save it for April because I know I'm going to have to pay my taxes? I'm an independent contractor.

Starting point is 00:34:20 Or should I apply some of it towards my $9,000 credit card? Do you have an idea what you're going to owe in taxes? So last year I made more. money than I ever made before, and this year I made more than that. And last year, April, I ended up having to pay $8,000. So that's why I'm like, maybe I just need to hold on to this and keep adding to it until I know exactly how much I'm going to have to pay in April. Smart. That is wise. Here's what you don't want to do, is you use all this money to pay off debt, and then tax time comes, and you go, I owe the IRS money and I don't have it. That's a dangerous

Starting point is 00:34:57 game to play. So I would wait. Do you do your own taxes, or do you work with the tax pro? I work with an accountant. Okay, great. So I would do that as soon as possible so that you know the exact number that will come out of that account on April 15th. And it sounds like common sense here that it's going to be closer to the $8,000, if not more, based on what you told us. Yeah, I'm just, you know, with these possible like overtime tax it right off that they're, you know, that going around, the rumors. My husband, my husband has a regular job, and he does overtime, and he does a lot of overtime. So I'm just wondering how that's going to factor into it. Well, let me just stop you right there. We don't base this on rumors. Unless it's legislation that's been signed, then we're just

Starting point is 00:35:45 fantasizing. And if it is, it's probably not for the previous tax year. Well, his employer actually sent him an email saying that in, you know, 2025, when you file taxes for this year for 2020, that there's some type of a tax benefit for a little overtime. Okay. I would just look into that with your accountant. Yeah, we just want to make sure. Okay. So homework is file your taxes with the accountant, find that number that you're going to owe,

Starting point is 00:36:15 make sure you have that, and anything above and beyond that, we can start attacking the credit card debt sooner. But yes, I would be just stacking cash right now and not use it all toward your debt. This is sort of a sinking fund to make sure that we are covered come tax time. All right. Thank you guys so much. Absolutely. You know, you just, and George, it's such a great reminder. We don't want to hear something from somebody or we read something that we're not quite sure about. And it involves taxes. We want to get on the phone today.

Starting point is 00:36:46 You don't have to have your tax statements or your withholding forms to call the accountant. So she should be on the phone. And, Gina, you're listening. You're calling your tax pro today to say, I've heard this. is this true? Based on this, and again, they can give you ballpark, you know, but if it's significantly more money you made last year, again, just the way I would take it, I would put more back,

Starting point is 00:37:12 I would be saving another couple grand minimum. Yeah, pretty darn soon. And a good reminder for anyone who is self-employed, 1099, you should be paying quarterly estimated payments on the IRS website to avoid this gigantic, scary bill that you can't afford, that's true. April. And so log in every quarter and work with your tax pro for use tax software. You can calculate how much you should be paying in taxes and to send the IRS some money ahead of time. Yeah, yeah.

Starting point is 00:37:39 Absolutely true. Stacey and I, before I came to Ramsey, we had our own company and our account and had us do that. We were paying quarterly taxes. Sometimes we'd get a little bit back if the estimate was a little bit too much, but you'd rather that. Yeah. Well, you could get hit with penalty and fees if you don't do that too. That's correct. You want to do it by the book. And if you guys want a great tax pro, a CPA enrolled agent. We vet them. We have a whole network of tax pros to connect you to that will help you just like Ramsey would so you can reach them at Ramsey Solutions.com slash tax pro and find one in your area. Don't wait. Don't be that person who's April 13th. I guess I should probably look into getting those taxes done. I like to get them done early.

Starting point is 00:38:16 And I don't know if you can tell just by my face. I'm a guy who's like, let's knock this out. Yeah. And this might shock you because I tend to be a little bit seat of the pants. I as well like to get the as soon as we get the stuff. Wow. They can get it right in. Get the paperwork. Yeah. We got a local tax pro. And I got the double whammy benefit. My Tax Pro works

Starting point is 00:38:37 in the office for my smart vester pro. Wow. So it's all in the same. Really keeping it in the family. I like one stop, folks. One stop. Take care of it all. Ken's dentist is also in there. That's wonderful. And I get a haircut there. We're looking for a masseuse

Starting point is 00:38:53 by the way. If you want, want to win with money in 2026, you can't keep living normal. Normal's broke. You need a plan. Get a personalized plan and start living like no one else by downloading our every dollar app today. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. I'm Ken Coleman alongside George Camel.

Starting point is 00:39:41 We're excited to be here for you today. The phone number to jump in, AAA 825-25-2-2-25-3-8-25-5. two, two, five. Tim is up next in Ann Arbor, Michigan. Tim, how can we help? Hi, thanks, checking my call. Sure. Back in, back in 2020, three, my wife and I did IVF,

Starting point is 00:40:03 and the IVF medical company we went through, didn't have the greatest billing department. They made some errors billing us for things we didn't get done, and we addressed it with them. And now it's two years later. and they have sent it to collections. We're getting calls and mail from a crushing company trying to get the money back. And we don't know, hey, it hasn't been resolved on there,

Starting point is 00:40:31 and we don't feel like we should pay this, some amount of money that's left over. So we kind of seem stuck. I mean, on one hand, yeah, we just pay and be done with it. But for me, no, no, no, no. No, no. Let me jump in to ask. When you, you said just now that you resolve this,

Starting point is 00:40:47 when you resolved it in the past, and somebody acknowledged that those were erroneous charges, do you have paper record, like electronic record of all of this? No, I'm sorry. What I meant was it wasn't resolved. Oh. And we had, so we paid what was supposed to pay, but for the erroneous billing, we haven't paid that yet. Who did you pay when you say you paid what you were supposed to pay? You paid the IVF clinic?

Starting point is 00:41:16 That's correct, yes. Okay, and then you got a separate bill from the IVF clinic or straight from collections? Because they should be, IVF clinic should have been sending you bills first. Correct, yes, they did. And we reached out to them saying, you know, this isn't correct. It needs to be rectified. They said, oh, we'll take care of a look into it, you know, months, months, months, went by pretty much years. And so now it's the first time we're hearing from those collection companies saying,

Starting point is 00:41:42 hey, these are sending bills from the company. Right. Now, my next question is, do you have? records of proof, can you prove that you never got these services? You never got the itemized bill. In other words, is there some paper trail between you and the clinic that would prove that you never got the services that they're billing you for? So in a sense, yes.

Starting point is 00:42:07 The code they put in for the services that we had, we never had done. So in a sense, yes, I have that. And maybe we could even ask the position. because we know him as a friend and he could say yes that was never done either but Tim. Tim, no, no,

Starting point is 00:42:23 no, no, no, no, no, no, Tim, this is like, dude, I would be talking to the doctor who's my friend. Well,

Starting point is 00:42:31 we actually have. Unfortunately, he doesn't work there anymore. Doesn't matter. And does it matter? Can he validate? Okay. Can he validate on the record that these,

Starting point is 00:42:45 he never treated you in the way that they build you? It's a yes or no question. What? I mean, I can ask him again. That's not, unfortunately, it's not his area, his expertise of billing. We can try again to ask him. No, no, no, no. Again, I'm going to, I'm a bulldog on this because you called for help.

Starting point is 00:43:09 Okay? So, George, back me off here if I need to back off. This guy is the doctor who treated you and your wife. Yes or no? Yes. Okay. and you have talked to him about this before to say they have charged us for services, and I'm not going to ask you to say what it is. It doesn't matter.

Starting point is 00:43:29 But you've talked to him about it and said they've charged us for this, and you didn't do that. Have you had that conversation with him? Yes. And what did he say? He agreed. Yes, I did not do that. It was more so it's not something that he has knowledge of as far as billing. I didn't say about billing. I'm saying they've charged you for something and he is acknowledged or can acknowledge that he did not treat you for that. Forget the billing part.

Starting point is 00:44:03 He can testify. Yeah. Yes or no? No. That hasn't happened. Okay. But my point is, is he could testify. He could do an affidavit.

Starting point is 00:44:15 He could do, I mean, if I was going to fight this, that's where I would be going. And I'm going, we know the doctor and the doctor said he didn't do this. and so if even I got to hire a lawyer, George, not a lot of hours, but just somebody who can say, we're going to fight this and here's how and we're going to tell the company to pound sand. We're not going to pay you for this. Have you been in contact with the collection company? I have. I'll let them know the erroneous bills.

Starting point is 00:44:42 They put it on pause. Okay. They came back to what's above like a month later saying, we reach out to this company, the IVF company, and here's what they say. You still owe it. So they're not really doing anything about that. No, you need to get a debt validation letter. Yes.

Starting point is 00:44:57 Okay. And then you need to get the itemized bill from the clinic that's correct. Yeah. And those two things, they should be in conflict where the itemized bill says one thing that says you don't owe. And then the collection company then has to get rid of the faulty debt. Let me tell you something else I would do. If this were me, Tim, I would literally go into the clinic and ask to meet with the office manager, whoever's in charge.

Starting point is 00:45:23 I mean, when can I get on your schedule? Like a retroactive coding audit from the billing department, and you just mentioned the word compliance, they're going to be like, oh, crap, we got to deal with this. And you mention the doctor and go,

Starting point is 00:45:33 I'm willing to ask our friend to go on the record. Like, we're just not playing around. They're at business in our area, and they're gone so I can't even go into the office now. The IVF, why wouldn't you lead with that, Tim? The place isn't even in business? So there's no billing.

Starting point is 00:45:51 department to deal with. Nationally, they are in other state, not in our state. Okay, so get in touch with the corporate billing department. Yeah. And say, hey, this location closed down. This is not difficult. I have this bad debt. I need a debt validation.

Starting point is 00:46:03 I need an itemized bill from you guys. I need a coding audit. Here's the account number. I feel like this is partially on you, Tim, because you've been letting this just fester for years. And you just gave up and went, well, I guess we'll just deal with that five years from now. And so you can definitely handle that. Like, Tim, honestly, if we were to have a doctor come in here and check my blood pressure versus yours, I'm more pissed off about this than you are for you. Like, this is, you are in the right.

Starting point is 00:46:34 Yes or no. Yes. Yes. Say it with some conviction, man. Like, fight. Fight. This is obnoxious because George, you're the expert on this. It's my belief that he does all these things.

Starting point is 00:46:50 everybody gets together, the powers that be get together and go, okay, this guy, Tim is right. And not only is Tim right, I'm waking up at 2 a.m. in the morning thinking about Tim. And I'm done. As I promise you, if this were me, this thing would be resolved fast. I would not let slumber to my eyes until this thing was handled. And so, Tim, this is where you've got to be the squeaky wheel. You've got to be contacting them so often. They've got your number, like they've got it listed.

Starting point is 00:47:19 Oh, Tim's calling again, who wants to handle this one. Yeah. And eventually you're going to get to the bottom of this. But the truth is, you just gave up too soon. Yeah. And nobody over there, by the way, over there being the clinic and the collection. Nobody over there cares about you. Sure.

Starting point is 00:47:37 And the health care system in general is full of incompetence. And so your job is to be so persistent to correct their competence that you win the game. That you flip it from they don't care about you to, they care deep. deeply about making this right so they never have to think of your name again. This is the level of intensity. The sword of righteousness. It's a fiery sword. And we are swinging it at everybody in our path because you're trying to screw me.

Starting point is 00:48:06 Ken just took us to church. The Ramsey Show question of the day is sponsored by why Refi if defaulted private student loans have taken over your life, why Refai can help you breathe again with a low fixed rate plan that fits your budget. Visit yrefi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey. Not available in all states. Today's question comes from Hunter in Arizona. My dad gave me an RV when I was 18. I'm now 24, married and have two little girls. It is a very nice RV and I'm very well accustomed to the RV life, but my wife refuses to live in, quote, something that doesn't have a foundation. The goal. We could sell our house. We could sell our house.

Starting point is 00:49:16 buy land with cash and live for free instead of paying our $1,500 mortgage every month. My wife would prefer to move into her parents and pay $8.50 a month for rent and utilities. It's a great deal, but I think owning land and having no payments other than utilities is much better, which is the better choice? I don't like any of these. Yeah, these all sound like... Because if I'm reading this right, George, one option is sell the current house, buy land with cash, and live in the RV. Am I reading that right?

Starting point is 00:49:44 It says and live for free. Which means the RV. Yeah, that's not a plan. But he already lays out that the wife's not doing that. And she counters with, let's move into our parents' house, her parents' house. None of these are good options. It sounds like to me, sounds like everybody's unhappy. The question is the $1,500 mortgage is that sinking them right now?

Starting point is 00:50:05 We have no other information about this. And so let's assume they can afford it. I think they just don't like paying it based on their framing. here we could sell our house and buy land with cash. Yeah, this guy wants to park the RV on the land. His wife's like, no chance. I'll say no and raise you. We move into my parents' house. Who wants to move into their in-laws house? Live with mom and dad or live like you're in breaking bad. Both of these are terrible options. I would rather you guys go rent somewhere if you can't afford this mortgage right now. If it's a really crisis situation, I'd sell the RV. Stay in the current house.

Starting point is 00:50:44 You said you're accustomed to the RV life. Your wife refuses. I don't think she even likes the RV life. I'm fairly certain she hates the very concept. I think it's okay to admit your life changed. And yes, it's sentimental because your dad gave it to when you were 18 and you'll grieve that. But it's just a thing going down in value. It's just a hunk of metal.

Starting point is 00:51:04 And so if you want an RV in the future, you can always buy one. But if you're in a pinch, I would sell it, pay off any debt you have, get to a better place financially. and then see, is this mortgage sustainable for the long-term future? The only RVI would ever buy would be the model from Christmas vacation. Oh, the exact replica? Well, yeah, if you could find that year, that model, that's probably a hot commodity. I don't think so. It's a piece of crap.

Starting point is 00:51:30 But then you could basically save it. It's just like it's nothing. And I would, this is cash. This is me. And I'm basically parking it somewhere until the day after Thanksgiving, at which point I create a Christmas display somewhere. with that. Charge five bucks a pop to walk in there and all of a sudden. Pays for Christmas. Billion dollar idea.

Starting point is 00:51:47 You were doing custom cocktails in the little RV. There's a guy in the lobby that's already ready to go. You've had worse ideas. And you know what it is? Everybody gets a moose glass. You see where everybody? It's like I'm going to charge you too much for the Christmas cocktail. But

Starting point is 00:52:03 you get the moose glass and you get your picture and I have a cousin Eddie guy standing out there in his robe. The whole thing. If this was Shark Tank, all the sharks would be chomping at the bit for this idea. I got to find me one of those RVs. Stacey's going to hate this. We'll look at the break for the record.

Starting point is 00:52:19 All right. Seth is up in Los Angeles. Seth, how can we help today? I'm in a contract on the house that I still have time to back out of. However, I'm realizing the solar lease is problematic because it's 22-year contract. And if I want to buy out the contract, it's $45,000. No, thank you. Why are we not making the seller buy it out as part of the deal? The seller in the contract that we're in escrow on said that the solar goes with the house.

Starting point is 00:52:56 So I haven't posed a new option. Sure, the solar stays on the house, but you should not be on the hook for this whole thing for his bad decision that he's now trying to get out of. Yeah. It's just not worth it, is it? Yeah. It might be a next-of-kin scenario to where they're just getting rid of the house and they don't want to pay into it at all. So I don't know the entirety of this situation, but I do, I think it might be a next-of-kin just trying to suck up as much money as they can on the sale.

Starting point is 00:53:26 100%. So this is 40. How much did you say? The buyout? The buyout. The house? The solar. The solar is 45,000.

Starting point is 00:53:35 Over 22 years. That's if I want to buy a. it is a, I think they call it a balloon lease to where every year it goes up by 3.5%. And so right now, my electric bill would be 145-ish. And by the end of year 22, it would be 316. I'm currently living alone and probably would not use that much electricity. So what made you agree to this? Yeah, why did you sign the contract? I didn't realize it. was that problematic at the time. Did your realtor not go, hey man, just FYI?

Starting point is 00:54:18 The contract was sent to me. The realtor did not realize it was a 22-year contract and the buyout. I had to do that digging myself to figure out what the buyout was because they did not give her that information either. Well, you know what? It doesn't matter because you're telling me you can get out of it, correct? Correct.

Starting point is 00:54:40 Walk away, man. Get out of this thing. Think about it. You're paying new system money for old panels. A new, a whole new system should be less than $45,000. Your 22-year lease kills any resale value because you're not going to be in there for 22 years. You're assuming all the risk for the solar, the maintenance, the roof issues, and there's zero upside. You didn't get the tax credit. You didn't choose the system. This was a terrible deal all around. So I would say, dodge the bullet and get out of this. Yeah. That is initially my thought process as well. The question also posed. is if it's about 25,000 below comps, and the seller is paying for all essential costs of realtor fees and inspection fees and those things. It's still not worth it. You're still on the road for this.

Starting point is 00:55:29 You're trying to talk yourself into this. I would go, hey, if you want to cover the buyout, I'm in. Otherwise, no deal. Okay. That's it. You play hardball now. Yeah. You've got walkaway power.

Starting point is 00:55:41 I hope. There's other houses that you can get a deal on that aren't stuck with this terrible debt attached to it. All right. So, hey, this is very simple for us. We walk away from this one. Turn your favorite walkaway song, whatever that is. And get it in your head before you call them up, you know, maybe walk on by you two. I don't know.

Starting point is 00:56:05 That's what I would choose. I'm going to call them, get fired up, pumped up, tell my realtor. I'm done. And then let's see what the negotiation looks like. then. By the way, one of our amazing teammates, Will Rudder just texted me. And the RV is a 1971 Ford Condor camper. I'm interested in buying anything with the name Condor. Okay. Strong. Do you know what I'm saying? Like that sucks me in a little bit. Are you seen any prices for those, George? I see one, the bid for the chance. What are we talking about? I need to know what the

Starting point is 00:56:41 market is. The one you said me will is right in the range. It's a pretty good beat up. And then I would hire an artist to make it look like the one in the movie. You know what I mean? They could probably do with it some type of sand blasting or something like that. It looked like it had a lot of rust on it. Are you coming up with anything? You're not the only one, Ken. I just found a forum where someone said I'm looking for the motor home like Cousin Eddie had in the movie. Oh yeah. You're not the first one to think of this. I never said I was. I think this guy wants to get to your business idea first. I don't know how many people are thinking about it turning into a seasonal bar. See, I'm thinking moneymaker.

Starting point is 00:57:16 This feels like a retirement dream because it's going to cost you money. I don't think it's going to make you money. I disagree. And talking your life into it. A cost is buying one of these things. All right, we'll stay with the research and see what the market is. Do you want to take a guess? What it would cost?

Starting point is 00:57:30 I'm going to say people are charging 50 grand or more for something like that. If they know what they got. Who doesn't know they have a condor? There might be some old guy out there who hadn't seen a movie since you know, 1968. I don't know. It's the greatest

Starting point is 00:57:42 Christmas movie of all time. I think if you got a condor, you know you got a condor. You know what you got. All right, Jeff is up next

Starting point is 00:58:36 in Minneapolis. Jeff, how can we help? Yeah, I just wonder if I could get some money advice or real estate advice, kind of both,

Starting point is 00:58:45 I guess. We will allow both of those today. We're feeling very generous. Awesome. Good. Go ahead. What's up?

Starting point is 00:58:54 Okay. Well, the real estate part of it is it's our daughter's house that I'm wondering about. She got divorced about a year ago. And she got the house, but she also got the mortgage with it. But there's plenty of, there's about half of it. She had good assets, you know, half the value. But she had to refinance it for half of it.

Starting point is 00:59:20 And she really can't afford it. So we've been helping her. And just wondering if we did the wrong thing. probably co-signing for that so she could qualify. Oh, you co-signed for the mortgage? We did, yes. For the refinance, yeah. And you're helping her.

Starting point is 00:59:37 Because she can't afford the payments right now. She's going to school and working part-time, yes. So how much are you guys giving her every month? Well, it varied. I mean, sometimes she'd come up with the full mortgage, got close to Christmas there. We didn't even see a payment for all men, because, so it's kind of, have been biting us a little bit there.

Starting point is 00:59:57 And she's working full-time? Part-time. And going to school for teaching right now, too. Okay, what is she doing for work? She's working in a school setting as a paraprofessional, they call them. Okay, so let's fast forward. She's done with school. She's a teacher making, I don't know, $50,000.

Starting point is 01:00:17 Is that? Yeah, maybe a little more up in this area. Can she afford her life on her own in this house at that time? Or is it still going to be tight? I guess time would tell. Let's ask you specifically, what's the mortgage payment? Mortgage is $1,700 a month. So there's your answer.

Starting point is 01:00:39 I don't think this is sustainable. No, I don't either. I think you need to have a hard conversation with her and say, hey, we're going to need to sell this house. It's not sustainable for you. It's not sustainable for us. And she can rent for the time being, right, while she's in school. Yeah, there are my area up here. There's not a lot of good areas, housing.

Starting point is 01:01:00 How old is she? She's 43. And we're kind of just looking out for the grandkids mostly. How old are they? 13 and 10. Kind of don't want to have to see them get taken out of the house right away. I know we don't, but I know we don't. But this is not sustainable, as George said.

Starting point is 01:01:20 This is, and you're a great father. by the way. Like, you are a phenomenal dad, but this isn't your burden. This is a forever. This could be, yeah, like she can. Because once she gets used to you floating two grand a month, why would she go, I don't want to take that anymore? Maybe at some point she gets on her feet, but that could be years and years from now. But she actually can get on her feet if you get her out of this pit. You know, that's what I say, but she could probably go put a good down payment somewhere cheaper and have a smaller payment for sure. Right, but that's my point.

Starting point is 01:01:52 So let's get out of this house. You guide her through this. Say, hey, we've been helping you this way, but it's actually not helping. We're just spinning our tires. And here's how we want to help you. We're going to guide you through this. Let's sell the house, get out from underneath this, get a lower payment if she needs to rent for a year or two until she gets the teacher salary. You know, the kids are going to be fine.

Starting point is 01:02:14 As long as the 10 and the 13-year-old are with her, their life, by the way, has already been wrecked. so it's not the house they need, they need her. And to be completely honestly, that house has got some trauma associated with it. So I could make the case that the best thing to do, not just financially, George, emotionally, I think this is the best thing to do. I'm thinking of an investment called such beautiful property. Again, you know what you keep doing, though? You keep trying to justify pouring money into this pit that she can. cannot get out of.

Starting point is 01:02:54 If something happens to you? She can sell it to you. She's, yeah. Let's put this way. I actually thought about that, but I don't know if I want to go that road. You know, I don't want to own a property in the country. You just told us it was a beautiful property and it's a great, it could be a great investment. So which one is it? It is a great investment, but I don't want to live here. Okay. Then we're not, then we need to get out of it.

Starting point is 01:03:18 There's a lot of beautiful properties that I don't want to own. And this isn't, this is one of them. So here's the deal. Are you guys in a good place financially? You're sitting okay. Yeah. You know, I'm retired. My wife's still working. Okay. I mean, what's your net worth? Maybe about $500,000. Okay. So you're not in a place to go buy property. You're not in a place to float your daughter, you know, a few grand a month. And I think you need to be honest with her. And just tell her, hey, we've been artificially propping this whole situation up. We love you. We want to help you, but we can't take this mortgage on and you can't either, and we need to face

Starting point is 01:03:58 the reality here. That's probably good advice. Do you guys have room in the house if she temporarily stayed with you? No, but there's another, she's involved with someone else, and she's barely at this house, actually, because she's at his house. Whoa, okay, so there's another man in the picture. Yeah, he's got a cabin, so they're up there all the time. You keep giving us more reasons to list this house this afternoon.

Starting point is 01:04:27 I agree, but I come up here and ski and I use it as kind of recreational property for me. Oh, so now, now. Papa's gotten some benefits here. Jeff enjoys this house. This isn't about her. No, maybe not. Oh, no, I'm going to remove the maybe. It's not about her.

Starting point is 01:04:48 She's in the cabin with the new dude, and you're the one that's, up there skiing and telling us how great a property it is, but I don't want to live here. And I got to say for a guy who co-signed on it, who needs more net worth, I would be unloading this house. And by the way, this is already messy. Who's going to get all the equity when you sell? She will. So you're not taking a dime from the proceeds of the house?

Starting point is 01:05:12 I'm hoping that she'd have enough where she could reimburse some of the money we've been throwing out there. Well, that's a whole new conversation. Have you guys talked about that and agreed to it when you co-sign the mortgage? is that, hey, you're going to reimburse us for what we've paid you? Because that'd be a shock to me if I was your son, and this was a big surprise at the end. Yeah, I mean, you know, she wasn't going to make the payment with her income of, you know, what she was making. I'm not so sure you didn't go, well, I really like the skiing up in this part of the woods,

Starting point is 01:05:46 and I could help my daughter out at the same time. I mean, can you not get a motel six near the ski slope? Yeah, I know. They tell me they leave the light on. It's actually more of the kids than me, I think, for me. Oh, no, you're all over the place, man. Are the kids staying there alone while she's at the cabin? How is this working?

Starting point is 01:06:05 Well, it was that you guys are both talking? I couldn't hear. I know. That's my fault. I was trying to be a smart aleck. Go ahead, George. I'm just confused. So it's about the kids now, but the kids are staying at the house.

Starting point is 01:06:14 She's at this other guy's house. I'm just confused by the whole situation. They're all, they all go to the other guy's house. You know, they split. You go there. They stay here. It's clear that. this house means not a lot to these kids anymore. They're already getting taken every which way

Starting point is 01:06:29 to different houses. So what's the difference? I would sell this and get out from under it, take all the risk out from under your feet, and then you can go rent a spot if you want to go ski anytime you want. And with the money you save from getting out of this dumpster fire, you can afford to go enjoy some skiing. Sorry, Jeff. I mean, we're for you. You called us. You talked yourself right into the corner. I kind of knew what you guys were going to say. I listen to you guys all the time. Well, that's good. I'm glad we didn't disappoint. That's always good.

Starting point is 01:06:59 But you're a good man, but hey. The key is, here's the principle underneath it. If you're going to help, it should be one, temporary, two, intentional, three, conditional. That's what you need. Not open-ended, not, well, it could be a good investment, and we're going to co-sign. There needs to be very clear boundaries. anytime you help someone. Yeah. And we never loan money,

Starting point is 01:07:23 so I like that you didn't do that. But if it's going to be a gift, it needs to be, hey, we're going to gift you this for the next six months, and here's what's going to happen after that. You're going to be out of school. You're going to have a job.

Starting point is 01:07:33 You're going to be taking this on. We will not be giving you another dime after that. And that's not callous. That's actually good for her. Because she's a grown woman and she needs to live her own life and not be propped up by mom and dad at this point. And he could take that savings,

Starting point is 01:07:46 maybe invest in me with my Christmas pop-up with the condor. Yeah, You want this to be a safety net, not a hammock, and it's quickly turning into the ladder. I'll just ship it up to the ski area. We'll just park it outside the lodge. Me and Jeff sitting out in our lawn chairs. Let go of the dream, Ken. I believe they call that a callback, James.

Starting point is 01:08:37 All right, folks, you know this. Buying or selling a home is a very, very big deal, and you don't want to mess that up. You want to go into it, clear-eyed, level-headed, ready to go, and you do that by using our Ramsey trusted program to find a top agent you can trust in your area to make this whole process, whether you're buying or selling a blessing, not a burden. You can find a local Ramsey Trusted Real Estate Pro for free by going to Ramsey Solutions.com slash agent, ramsysysolutions.com slash agent, or we have a link in the show notes. Let's go to my friend Ken. And I'm friends with all Ken, George. You've never met a Ken you didn't like.

Starting point is 01:09:16 It's a great name and just, you know, you just know it's a solid person. Ken is joining us in San Francisco. Ken, how can we help? Hi, Ken. Hi, George. Thanks for taking my call. You bet. What's going on? So my wife would like me to sell our truck and get a newer truck.

Starting point is 01:09:34 And I'm not sure if that's a great idea. And also, if I end up selling it, how much truck I could afford. Oh, this is one of George's favorite things to talk about. So hit us with the details. Let's get into it. It's a 2000 Ford Ranger. It's got low miles, and it's had a couple issues, but I'm able to work on a truck that old. And I like low registration and insurance payments, and I own it outright.

Starting point is 01:10:03 And can we say that's a fantastic truck, that little Ford Ranger? Oh, I missed those old ones. Yeah. Perfect side. That's the truck I would have if I was a truck guy. I was getting ready to say short guys like us, if we drive trucks, it's a Ford Ranger. No question. Okay, so your wife, what does she think about this?

Starting point is 01:10:19 She thinks it's a death trap? what is her reasoning for why you need a new truck? Yes, that's exactly it. She believes it's unsafe for the kids and also has bad paint fade. So I think she just also doesn't like driving it around. Just the curb appeal is off putting to her. She doesn't like the patina, huh? Now, where are you guys at financially?

Starting point is 01:10:40 Do you have any debt? So we have zero debt besides the house. And other than that, we have... We have high-yield savings account with approximately $125,000. Okay, buy a truck, dude. What are we doing here? Oh, no. There's no need to shout, George.

Starting point is 01:11:00 I'm not saying don't buy a brand-new truck, but could you get a new-to-you truck for, what's your household income? It's approximately $330,000. Oh, boy. Your wife has just got the patience of Job. Dude, this is like extreme cheapskates level. This is wild. And by the way, It takes one to no one.

Starting point is 01:11:21 When George says that, that means you've been diagnosed. Okay. So what truck would your wife like you to have, and what's the price point of said truck? So if I was to get a new truck, I was looking at a used Toyota Tacoma maybe in the 2020-year range, so approximately $30,000. I would do it yesterday. Wow. Wow, George. This is all green lights.

Starting point is 01:11:46 This is so fun. This is a rare truck guy. Most truck guys are broke with huge payments, and their truck payment is more than their mortgage. Ken, is your wife near you right now by any chance? Yeah, she is. Did she hear this call? She can, yes. Good.

Starting point is 01:12:03 I just want to make sure that she heard that George said, do it, you know? Buy the truck. And here's the parameter. Make sure that everything with wheels and motors in your life is no more than half of your annual income. Check. Pay cash. Check. Be debt free with an emergency fund.

Starting point is 01:12:18 Check. So you are all green lights. Make your wife happy. Check. You're not doing anything out of control. You should have a little party to say goodbye to this truck because I think it's fantastic. It's sentimental. You can frame a picture of it. Well, you know what? Actually, a quick question because I was thinking about this. How much is that, I don't know what a 2000 Ford Ranger would cost in that condition. Do you have any idea what you could get for it? I believe I could get around $6,000 for it. All right, can I throw something out, George? Sure.

Starting point is 01:12:51 Well, let me ask a question before I throw it out. Ken, do you need the $6,000 from the Ford Ranger? How much do you need that money to buy the truck that you want to get? Particularly need that. He doesn't need it. Okay. Can I suggest that because... You wanted to keep it, don't you?

Starting point is 01:13:07 He likes it a lot. You got room for an extra ugly truck around the house? Or does she not want to see it? We do have room for it. Yeah. probably keep it. That's an idea. Well, does she want it gone from her existence is what we're getting at? I think she just doesn't want to pick up the kids in school with it. Well, would you like to keep it, or was this just all financial, and it was the concept of how little money you were putting into it?

Starting point is 01:13:35 Or do you want to keep it? It drives great, so I wouldn't have a problem keeping it. I'm going to throw it out there. Well, here's the good news. You can go buy the truck tomorrow and not have to sell this one. And so it's not like an on-fire situation. That's why I'm, yeah. But my guess is your wife's about to call 1-800 got junk and get this thing out of the driveway. It's worth six grand. Yeah, but I'm just saying she wants it gone. And for those reasons, I eventually you have to let go of things. And so I think it's been high time. How long have you had it? I've had it approximately three years now. Oh, okay. So this is, it's a new truck to you. Yeah, it's, I had a commuter before in my you got short, so I got a truck.

Starting point is 01:14:20 Oh, man, Ken, you are special in a good way. The fact that you love that 2004 Ranger, Patina, the pains peeler off. Six figures in savings making $300,000. And we're arguing over. But this is the next door. This is the everyday, this is the millionaire that you don't see coming because he's rolling up in a 2004 Ranger. I love it.

Starting point is 01:14:43 Ken, do you mind asking what is your retirement portfolio? Right now I have a 4-5-7 with approximately 380,000 in it. Yeah. Fantastic. Yeah, he's rocking. What's your house worth? The house is between 900 and a million. And what do you owe on it?

Starting point is 01:15:04 We owe 315. Fantastic. So you guys are baby steps millionaires. Yeah. No question. Yeah, thanks to my dad listening to Dave back in the day. That's amazing. Well, here's the cool news.

Starting point is 01:15:17 I'm not saying you should do this, and I wouldn't, but you could buy a new car. Because we tell people, hey, if you're going to get a new car, you've got to wait until you've got a million-dollar net worth for a simple reason. It's too much of your world wrapped up in something going down in value before you hit that milestone. Okay. Yeah, I'm just, I like the cheap insurance and registration, but I hear you. And I'm sure you've done your research to find what trucks have the cheapest insurance. Oh, yeah. Oh, yeah.

Starting point is 01:15:42 This guy researches. You know, this guy could sub in for you. Absolutely. You two are wired. We can do a car segment. Exactly the same. Yeah, yeah, yeah. I'd swap this can for this can any day.

Starting point is 01:15:53 Well played. I love it. Thanks for the call. And I don't blame you. He's far more your kind of guy than me. I needed a win today. I was feeling like a real fuddy-duddy. And so it feels good to deliver some good news.

Starting point is 01:16:04 It does, doesn't it? Really important. By the way, I do think it's important. We have new people all the time. So I'm thinking new listener, new viewer. I want you to explain again a little bit more detailed as to why we do that formula of how much the car versus... I just think it's important to explain the why.

Starting point is 01:16:22 Easy math. If you have a household income of $100,000, then everything with wheels and motors in your life, that could be an RV, a boat, cars, should not add up to more than $50,000. Half. That's the top limit. And why? The reason is those things are going down in value.

Starting point is 01:16:38 So you've got a depreciating asset. And so if you have $80,000 worth of car and you make $100,000, that is so much of your... world that is literally tanking. And so you don't want to make these decisions, especially with debt, because here's what we see. They buy the $40,000 truck with a payment. So it costs them $50,000, and six years later, that thing is worth $20,000. So now you've got a real problem. You're underwater within a year on this truck, and you've paid way more than it's worth. And that puts people in a bind.

Starting point is 01:17:11 So the good news is you pay cash for a car. You can never be underwater. That's exactly right. Let's play that scenario out. Let's go, what you said, so if you have a million dollars in net worth or more and you buy a brand new car and something, you know, life-changing financially happens, where do you sit? Well, you're sitting with a paid-for car that you can unload. No debt with a sizable net worth, nest egg. So you can stomach the depreciation. It's all about ratios.

Starting point is 01:17:36 Right. And so you've got to go, well, this guy makes $300,000. So he can buy a $30,000 truck. The person calling in who makes $40,000, I'm going to tell them to sell that truck. if that's in their life. Yeah. And so it's not that, you know, expensive trucks equals bad. It's are you doing this from a place of financial strength

Starting point is 01:17:53 versus it really being a detriment to your financial future? Yeah. We should have told Ken, and if he's still listening, get steak dinner tonight, you know? Absolutely. Celebrate the fact that your wife is going to be so happy with this decision. Oh, eat it in the date night with the truck. In the new truck?

Starting point is 01:18:08 In the old truck. I like the old truck because you don't want to get the old grease on the new seats. If you want to win with money in 2026, You can't keep living normal. Normal's broke. You need a plan. Get a personalized plan and start living like no one else by downloading our every dollar app today. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio.

Starting point is 01:18:59 I'm Ken Coleman, George Camel joins me. All of a sudden, I can't talk. Sometimes it happens. I have that effect on people. Speechless. It's your cologne. It throws me off. I think more of it.

Starting point is 01:19:10 It's a musk. That's what it is. AAA 8255-225 is the number to join George and I. We're having fun today, as we always do, but we're going to help you in the process. Joe is up in Orlando, Florida. Joe, how can we help? Hello, how are you guys today? Oh, we're having a blast.

Starting point is 01:19:29 How are you? Good, good. Well, I'm hoping you guys can settle a disagreement between my husband and I about paying off our mortgage. Okay. I believe we should use a mutual fund that we have to pay it off right now, and he would rather do it with cash flow. Okay. Give us the numbers. How much to pay off the house?

Starting point is 01:19:57 The balance on the mortgage is about $29,000. Okay. And if we don't pay it out of the mutual fund, if we were to do husband's plan, what is the date? is he attaching a date by which it's paid off through your normal income? About six months to a year. Six months would be really aggressive, and a year would be a little less aggressive, of course. How much is that? It doesn't matter, but I'm just curious, how much is the house worth?

Starting point is 01:20:29 The house is worth about $700,000. And give us your retirement portfolio? We have about $850,000. in just retirement savings. And then non-retirement, what do you have? Well, we have the mutual fund that is worth about $37,000, and we have cash

Starting point is 01:20:53 about another $60,000 of other liquid cash between our bank accounts. Why not just use the cash? Because we've got some other large purchases that we need to make this summer. Okay, and what's the priority? Is it the large purchase?

Starting point is 01:21:11 this summer? Yes. Nothing's on fire with the mortgage. It's getting paid off. Let's say it's going to happen within the next six to 12 months no matter how we do it. Can we agree on that? Yes. Now everyone's happy already.

Starting point is 01:21:25 Yes. So now it's just what strategy and tactic are we going to use to get there, mutual fund, cash, putting extra through future income. And then these future purchases, is this going to drain the savings or do you have another emergency fund? It wouldn't drain the same. savings, no, we just have to buy another vehicle for my son who's become a driving age. Well, what are we looking at? What are we thinking about spending on that?

Starting point is 01:21:52 Well, he's going to get his brother's older car, and then we're going to replace that car. About a $25,000 purchase is what we're looking at. Okay, I'm just doing the math, so that leaves us 35, right? Right. Okay. And what's the other big? You said plural, purchases. We may have to replace our roof. Okay. What's that going to cost?

Starting point is 01:22:16 Well, probably about 15. Okay, so that gets us down to 20. And that's if we don't replenish it and put more money in there as we go. Correct. Okay. Do you have an emergency fund separate of this $60,000 in cash? No. Okay, well, what is a three to six month emergency fund for you?

Starting point is 01:22:36 What's that amount? About $30,000. thousand dollars. Perfect. So how about after these large purchases are complete, we replace the roof, we get the car, anything above the 30 goes toward the house, and then anything that's remaining on the mortgage we take from the mutual fund. Deal? Deal. Then we don't deplete the mutual fund, which, by the way, here's my rub with what you guys, here's what happened. Here's what went wrong. You were investing money with no purpose. Or there was a purpose, and now you decided I want a different purpose than he had in mind. It's a very old mutual fund. It's a mutual fund that I started

Starting point is 01:23:14 from a car accident money when I was quite young. So it's kind of just left over. So it's been there for quite some time. Okay. So this is just sort of bonus money that's been sitting around. Obviously, you're going to have some capital gains taxes, so I would look into that. I don't think that's why he didn't want to liquidate it, but that could be part of the reason. But I will tell you, I'm going to throw a different scenario out because you said if we got aggressive we could pay it off in six months if we didn't get aggressive normal cash flow this house is paid off in 12 months i don't like taking a tax hit to do this so i actually am in agreement with your husband because of these other expenses george i'm just going to stick to it you guys have been very aggressive i've been very committed to do

Starting point is 01:24:04 this i just wouldn't empty i wouldn't take any money out of the mutual fund, I think I'd pay this off in six to 12 months out of our normal cash flow and have the cash for all the other things that you got to do. Don't touch the emergency fund. That's just where I'm at. But that's only because, George, I don't disagree with your opinion. I just don't want to use that mutual fund money for those. That's why I asked them to calculate it, because it might not be as much as you think. If they're only taking out $5,000 and the capital gains was $2,000 and then you're paying 15% of $2,000, now we're talking a few hundred bucks. And so I don't think it's as scary

Starting point is 01:24:36 as hundreds of thousands being liquidated. But Joe, I think there's a good compromise here. I don't think either of you are wrong. You guys are being very intentional with even paying this mortgage off. Now, if he said, I never want to pay it off, then I would think we'd have a bigger problem here. But it's really just about tactics and semantics.

Starting point is 01:24:54 And so I think splitting the difference, I want you both to be a little bit, feel like we both kind of lost and we both kind of won. That's marriage. But a great situation to be in. So good for you guys. Congratulations. Baby steps, millionaires.

Starting point is 01:25:06 It's about to have a paid for house. So fun. It's a good life. Good problem to have. Steve is up in Virginia Beach, Virginia. Steve, how can we help? Hey, thank you so much for taking my call. Sure.

Starting point is 01:25:18 I'm 36 years old. My wife is 31. We're on baby step number seven. We're debt-free. Our house is paid off. All of our cars are paid off. But we're thinking about buying a bigger house, something that's going to put us about $500,000

Starting point is 01:25:35 in debt again. How much do you have the first time? So our house is worth about 350,000, and we're not sure if maybe renting it out to get a little bit of extra income. No, we're not going to have a mortgage on the other house and have this investment property over here. I would say just sell it, use all the proceeds

Starting point is 01:25:57 to put towards the next house. And you're talking about like a $750,000, $800,000 house? No, no, no, no. I was talking about a $500,000. $500,000, $550,000 house. Okay, well, if you put your 300,000 proceeds that you'll get from selling yours, now we're talking about a $200,000 mortgage. Right.

Starting point is 01:26:16 That you'll pay off how quickly? Well, my first mortgage was probably around $160, and I paid it off in seven years. Okay. Well, can you guys pay it off more aggressively in this case? Oh, yeah. Yeah, yeah, obviously 10 years ago, we were not making as much as we were we are now. Okay. And what's your take home pay every month as a household? Every month. So my yearly salary or combined yearly salaries about $150,000. Okay. Base salaries about $50,000 each,

Starting point is 01:26:51 and then we get commissions, tips, bonuses from our businesses. So a healthy six-figure income, you can easily afford a $200,000 mortgage and let's make a spit shake and go, hey, we're going to pay this thing off in three years. And that way you're not going back. backwards for a long period of time. It's not a sin to go from baby step seven back to six, but we don't want to hang out there for seven years either. So sell the house. Why the spit in the shake? I don't know. It just feels more official. That feels like a true bond. Coming from a germaphobe like you, I'm a little surprised. I would never do that. Just a good shape. If you kiss, you've already done it. I'm just saying. Oh, nice. All right, New York City is

Starting point is 01:27:56 where we're going next. Lee is joining us. Lee, how can we help? Hi, thank you guys for taking my call. So my question is, I live in my childhood home with my sister and my boyfriend. Last summer, we started renovation, and my sister decided to move out. So now I just want to know if she's still responsible for part of the renovation for the house. I mean, did we get her to sign anything? Did we sign anything? No. There was no agreement that, hey, yep, we're going to do these renovations.

Starting point is 01:28:30 Well, she knew we were going to, well, she was here when we started the renovation. Yeah, but was there, we know there was no sign thing, but was there a conversation around the breakfast table to say, this is going to cost about X amount of dollars, are you in? No. Is there any agreement about this co-ownership situation? No, she's just on the title. She's on the title of the house. It's our childhood house that we got from our parents.

Starting point is 01:29:02 Okay. Are these necessary repairs or are these like improvements upgrades? Yeah, improvement upgrades. And I have a sense that you were the one driving the train. You were the leader, the ideator, kind of executed. Yeah. Yeah. Here's the tough news. If there's nothing in writing, you can't force her to pay for these improvements and upgrades. It's like an elective surgery. That's right. So if there was a necessary, like, hey, the foundation's cracked and we both on this house, I think you'd have an argument to go, we're going to split this. But if it's, hey, I just want a new kitchen, and she was there when you started it, I don't think you're going to have a case here.

Starting point is 01:29:37 In which case, I would limit this if you can't afford it. Are you going into debt for this, or are you cash flowing it? No, no, no. No, we have cash on my just received a trust for my uncle about three years ago, so I'm using that. Okay. Here's what I might do, and I think is wise. You should drop an agreement saying, hey, I'm putting this much in upgrades. I'm going to get that much more out of the house when it sells.

Starting point is 01:30:01 Mm-hmm. That's fair. Okay. Have you already brought this up to her to say, hey, you were here, or are you just hitting this, kind of bouncing this off of us? No. Well, what I was going to do is I was going to wait until I have the whole total for the renovation, and then I was going to say, this is your cut.

Starting point is 01:30:19 So good. You haven't brought it up. So our point to you is you don't even have a common sense argument on this one. So don't burn any calories or create any tension with your sister on this. I think you bring it up in the form of what George said. Hey, I've decided to do this, as you know, and I think it's going to add this kind of value, but I'm going to get a realtors take on this. I'm not going to make up a number based on all my receipts.

Starting point is 01:30:44 And then I want to know if you're okay. When we sell this, I think George's advice is great. Or you go, or we could split this 50-50 and nothing changes. We'll both get the same amount when we sell it. But it makes no sense for her to benefit from the appreciation. you know, this house is going to be more expensive. That's right. I agree. Because of the renovations. And so therefore, she shouldn't get all the benefit when you floated all the money for it. But this is, it's part of the mess when you co-own a house, even with family. Right. It's just hard to not make it messy. So the other part is, what's the long-term game

Starting point is 01:31:20 plan with this house? Are you going to live in it forever? Is there a plan to sell it? Can you sell it without her writing off on it? No, actually, there's no long-term. My, my, my, my, my, daughter will probably inherit the house. How old's your daughter? 24. Okay. Has she said I would love to have this house when you're gone? For now, yeah.

Starting point is 01:31:44 She's not going to be able to afford a mortgage. Okay. My cost is almost paid off. Cool. Well, I would talk to your sister ASAP. I'd get all the numbers as soon as possible and go, here's what the total cost is. Keep it reasonable because there's a chance you don't ever get this money back.

Starting point is 01:31:59 And so I would limit what you're doing. It's easy to go crazy when you're doing renovations, and they're always more expensive than you thought they were going to be. Of course. And it always takes longer. Of course. All right. Best of luck.

Starting point is 01:32:14 Yeah, thanks, Lee. Thanks for the call. Let's go to Steve, who is in our backyard here of National Tennessee. Steve, how can we help? Hey, guys. Thanks for taking my call today. Sure. So my questions are all regarding just getting out of debt.

Starting point is 01:32:31 So I work full-time and have a business that I do as well. And over the last five years, I've accumulated about $4,34,368 of debt. For the business? No, that's my mortgage. It's all my debt. I had a mortgage before the business. Outside of the mortgage, how much debt do you have? It's 166,307.

Starting point is 01:33:02 Okay. And what is that comprised of? My vehicles, I have two vehicles, my watch card, my car, credit cards, and loans. What are you taken home from the business each year? Last year I ended up clearing $37,000. That's not great. How long have you been hard in this business? About five years.

Starting point is 01:33:30 Are you running any of your expenses through the business or you're only getting $37,000? Yeah, I'm running all my expenses that I can through my business. We had about $99,000 in revenue, but pay taxes on the $37. What's your household income? Is your wife working outside the home? She does. She works somewhat of a part-house. full-time. She's making about

Starting point is 01:34:01 $30,000 a year, and I'm clearing about another $80 at my job full-time. Oh, so you have a full-time job on top of that? Yes. Well, you buried the lead there. I was like, oh, my goodness, how are you guys surviving? So the 37 that you paid yourself as a side hustle? Yes. Okay. I feel a whole lot better. I was like,

Starting point is 01:34:20 this dude's been out of for five years full-time. I was about already tell you to shut the business down, man. It was going to get bleak fast. I'm sorry. So you guys are making $150,000 a year? That's before taxes. Sure. Yeah. Gross household income, $150,000.

Starting point is 01:34:36 Okay, what's your question? Well, my question is that I'm overextended here big time. You know, all my payments and everything, you know, it's more about how can I get this cleared up and start actually making, putting money towards, you know, our retirement and things as opposed to just paying all these loans. Well, it's answer simple. You're driving your retirement right now. Those cars were your retirement fund, but you decided I want a nice car instead. What's your combined car payment? It's 1752.

Starting point is 01:35:15 Goodness gracious. What are these cars worth? $1,700? Did I hear that right? Yes. Yes. Well, there's your answer. Yeah, I've got one.

Starting point is 01:35:30 a Jeep that I owe 56,000 on, and I've got a Honda, you know, another Honda car that owe 23,000 on. And both of them, you know, are combined at 1752. Yeah. So you've got about $80,000 in cars and you make $147. So that's a major problem. And the parameter is no more than half your annual income tied up with things of wheels and motors. And so you guys are over that. And even if you weren't, I would tell you to sell these.

Starting point is 01:35:57 you don't need a $56,000 Jeep right now to live your life, do you? No. Okay. So we're going to sell both of these cars. Are you underwater on either of them? The one Jeep I am, last time I hit Carvano with it, they were offering. Well, Carvana's going to give you pennies, dude, because they've got to make a profit now. Go to Kelly Blue Book, find the private party value, and sell this thing yourself.

Starting point is 01:36:22 Facebook Marketplace, Auto Trader, get these cars listed, and make sure that you. you have the difference in cash or a personal loan from your credit union, and then you're going to need a little bit of money to get some beater cars. But is your wife on board that you guys are about to be living a very different life for a short period of time? Yeah, and she's, you know, I've already talked to her, and yes, she's on board. She was, you know, the Honda's her car. I bought it in 24, and the car that we had, you know, it was paid. It was paid off, and she was like, I don't need a new car, you know. You just got excited and what you deserve one, babe.

Starting point is 01:37:02 No, there was a repair coming. Classic. It was a one-owner car. We bought it at Honda, took it down there to get it repaired. And they gave us a good deal on it and wanted to buy it. Great deal. Leaving you guys broke was a terrible deal, my friend. So you can clean this up.

Starting point is 01:37:22 Sell the cars, get aggressive, do the debts. snowball, and then we'll attack the mortgage later on. All right, folks, if you fly blind and just kind of willy-nilly through your taxes, boy, oh, boy, confusing, stressful, you don't want to get yourself in hot water with any type of legalities. But with the help of Ramsey's easy-to-digest tax resources, you can learn how to handle your taxes with ease and confidence. Go to ramsysolutions.com slash taxes. That's ramsysolutions.com slash taxis.

Starting point is 01:38:28 you're going to get a ton of great resources and tips and tricks to make your tax returns easy, guides on filing, excuse me, on filing, rather, if you're self-employed or a freelancer and other tools. So ramsysolutions.com slash taxes. Lynette joins us in Denver, Colorado. Lynette, how can we help? Hey, guys. Thank you for taking my car. I love the show.

Starting point is 01:38:53 I have paid off 37,015 months, thanks to y'all. Wow. I didn't do Jack Squat. Every day. You did, because you guys are encouraging. So I appreciate y'all. So now that I'm in Baby Steps 3, I'm trying to look at my emergency fund. After this last year, I made $115,000, but after everything comes out, that includes my retirement that I was doing,

Starting point is 01:39:19 it drops me down to about $74,000. And now I've upped my retirement to 9%. I do get a 6% match, so that brings me up to the 15%. I'm looking at doing $2,500 to $3,000 a month in emergency fund until now until December. Because I'm single and by myself, I'm just kind of wondering, is that about what I should be doing, 25% of my housing is about $1,400 a month, making sure if that's correct. And just trying to get, you know, feedback from you guys. I'm also getting $30,000 from my dad in inheritance.

Starting point is 01:39:57 I just opened up a fair-wins checking bundle that I heard about from you guys, but I haven't got the debit card yet, and that I plan on putting the 30 grand into a high-wield savings account with them until I get like $250,000 saved up for future housing. So just kind of want your guys' take. So you've got like 17 things going on. Let's clarify. I know. Do you have any savings right now?

Starting point is 01:40:23 About $2,500 because I just paid off that $37,000. Okay, so let's go over the baby steps because there are some parts I want to clarify for you. So baby step two, you obviously did debt snowball. You're completely debt free? Yes. Now baby step three is next, which means we are not investing yet. Oh, I thought we were for the emergency fund, no? The emergency fund is separate.

Starting point is 01:40:46 So emergency fund is three to six months of expenses in a high-yield savings account. And until you get that, we're not going to invest a dime. Even the match. I know that you're like, oh, my gosh. I can't give up the match, right? Right, right. But here's the thing. Doing seven things at once is not going to cause you to make progress.

Starting point is 01:41:05 And the good news is you're about to get $30K. Is that your emergency fund? Would that suffice? Yeah, I just was kind of hoping to put that towards a down payment because that's what my dad would have wanted, was to put it towards a house. Okay, but let's just look at it as a financial foundation. He wants you to be financially stable and free. That's the goal, right?

Starting point is 01:41:30 And so part of that is making sure we don't have all of our money in a house and no money in savings. Right, right, right. Because being a homeowner is one of the most expensive things you can get into. And so the proper steps, if you want to continue on with the plan, because it's been working for you, then put the 30 grand in that high-yield savings. That becomes your emergency fund. And then we can invest 15% of your income, which means the match doesn't. count. That is gravy on top. So you would ratchet up your retirement to 15% and you'd get the 6% match on top of that. Okay. That way you build the habit and consistency. And if you have a job one day

Starting point is 01:42:07 that doesn't have a match, it doesn't matter to you. You have the habit of investing 15% and living on the rest. Okay, perfect. I'm glad you clear. And then beyond that, you can save up for the down payment with any future money. Because now you have this foundation. No debt. Emergency funds saved up. You're investing for the future, and now you can begin saving. So how long would it take you if you did it that way to save up a down payment? What's the number? $250,000? Oh, well, because Colorado's crazy, expensive.

Starting point is 01:42:36 Most of the houses are $385,000 to $400,000 with just my income. I'm guessing I'm going to have to get like half of the down payment to be in my 25% of my pay. Okay, so how much could you save up each month if savings is covered and you're investing 15%? How much could you throw into a high-eal savings for the down payment? About 2,500 per month. Yeah. Okay. So doing the math on that, that's 30 grand a year, which means it's going to take you seven or eight years to get there?

Starting point is 01:43:06 Yeah. And therefore, we might need to go, all right, we need to up our income. We need to compromise on the type of house we were going to go for. Maybe it's a smaller house further out from the city for now to get our foot in the door, those kinds of things. Or you make peace with the fact that it's going to take you seven years to buy home. Right. And high yield is the best place to plant that. If it's going to take you seven years, I would say you can invest the money. Anything that's five plus years, you know, in the market, you're going to, you have a better chance of being in the positive the longer you're in the market.

Starting point is 01:43:40 But if it's one to two to three years, high yield savings is a much better bet. Got it. Okay. But you're doing great. You have an awesome income. You're debt free. I would just sort of refocus because we got off the beaten path with the plan as soon as we got out of business. debt. That's why I was calling you. I mean, I just paid it off, so. Good for you. And you got the 30,000 already from the inheritance? It's going to be in a couple months. Oh, in a couple months. Okay, well, in the meantime, any extra money you have is going toward that emergency fund, and I would pause your investing down to zero percent because it would light a fire under you and free up money

Starting point is 01:44:14 to put in that emergency fund. Okay, just until I get the emergency fund, and then I can go back to exactly. Okay. All right. You're doing great. I'm proud of you, Annette. It's awesome. And don't fall prey. Listen, Lynette, don't fall prey to your friends telling you it's crazy that you even think about waiting seven years to buy a house. Don't fall prey to that. Because again, what the advice George gave you, I know it's going to take seven years and that seems like forever. But you're still single right now. And how old are you? 38. Okay. That's okay. Listen.

Starting point is 01:44:44 Average homeowner is, what, 40 now? Yeah, and that sucks. The numbers changed. And by the way, that sucks, and I hate that. It's going to be way longer for me, but that's okay. It's okay. Ken is way older than 45, so he can attest, and he's a young buck still. Thank you. But you just confused the entire audience.

Starting point is 01:44:58 And I'm not way older. You think what constitutes way? To Annette, seven years is a lifetime. Right. I mean, it is. It's true. But I'm like, it is what it is. You know, I don't want to.

Starting point is 01:45:12 Here's a big picture. Your income is going to go up over time. You could meet someone and then have dual income. And so this is not like a life sentence. Life is going to change. Your dreams are going to change. Your city. change. But in the meantime, just stack as much cash as you can. That's right. That's right.

Starting point is 01:45:27 Big picture thinking, Lynette, all right? And let me tell you something. Let me tell you what you're dealing with. And I heard it in your voice. And I want to encourage you. Because this happens to all of us. Great expectations, right? And when the expectations that we had earlier in life don't pan out, it sucks, right? And here's what happens. And by the way, this happens. all of us, relationally, professionally, physically,

Starting point is 01:45:55 right? I think of couples that maybe want to have babies and it takes years and years and years. You know, there's just so many

Starting point is 01:46:01 examples of this. But, but it's okay to allow yourself to lament that, right? Okay. But,

Starting point is 01:46:11 thank you. Yeah, listen, it's okay, because I heard you go, I'm 38, you know? Well,

Starting point is 01:46:17 because, I mean, I understand. The first time I started doing retirement. I know, it's okay. I've only got like 30,

Starting point is 01:46:22 K in retirement. I know. Someone out there is 58, feeling like they're too late. Someone out there is 28 thinking, man, I wish I got this stuff sooner. So do not beat yourself up for that. That's what I'm trying to tell you, Lynette. I heard it and I want to encourage your heart. You're not, listen, yes, you need to adjust now. The expectations you had for your life in this particular area haven't been met,

Starting point is 01:46:43 but it doesn't mean that life in the future cannot still be really, really good. And so that's the mindset you've got to have, okay? Definitely. I'm just thankful to have the debt paid, honestly. Yes, ma'am. Listen, you're in great shape. You have much to be grateful for. Okay? Write down all the things that you're grateful for through this discipline of getting out of debt. Write all that stuff down tonight. And how proud. By the way, add a line, add a column of what your dad would be proud of. Okay? And focus on that. Yeah. Get your head up.

Starting point is 01:47:17 God bless you guys. You too. All right. Our scripture of the day comes from Proverbs 20. verse one, the wicked flee when no one pursues, but the righteous are bold as a lion. Our quote of the day from James Clear, the author of Atomic Habits, your success

Starting point is 01:48:11 depends on the risks you take. Your survival depends on the risks you avoid. All right, thank you, James. I'll chew on that. Anna is joining us in Knoxville, Tennessee. Anna, how can we help? Hey, thank you so much for taking my call so excited to talk to you guys. Well, we're excited to talk to you. What's going on? Well,

Starting point is 01:48:35 my husband and I are hoping to get our income up, and he's been looking to make a career change, just been struggling with kind of the steps to take on that. Does he know? I'm so sorry. Yeah, I interrupted you. So I was going to ask, does he know which path he wants to take? Right now we're kind of trying to narrow it down a little bit. but we're pretty sure that he would be good in the field of technology. Okay. And so when you say try to narrow it down, are we talking about specific types of roles within technology?

Starting point is 01:49:15 Yeah. He's applied for some positions with some companies and hasn't gone anywhere yet, because we were thinking that it would be best to just get some experience in the field and then kind of... What kind of tech jobs is he looking at? Because that's about the broadest category out there. So he's applied to some cell phone companies. Yeah, but again, I think we're asking, are we talking about programming? Are we talking about engineering? Are we talking about... Sales?

Starting point is 01:49:54 Yeah, like the... What kind of role in tech? So the last thing that he mentioned that he was interested in was coding. Okay. Has he taken a coding, has he taken a coding course, class, boot camp? He was looking into that. Well, I'm going to tell you, has he done anything professionally? Has he ever drawn any paycheck for coding?

Starting point is 01:50:19 No. Okay. So one of the first things I would do, and this will kind of pause on this after I say this, is what good coding boot camps, courses can he take that you can afford? And let's go get that because many times in those coding courses or co-ops or whatever, they have placement services. And so if he wants to get to coding, it might be a good idea to get qualified in coding and then see about the placement as opposed to I'm going to go get a job at a cell phone company

Starting point is 01:50:53 and then tinker around with coding. Now that would be one thing, but I want to pause here. What's your financial situation? Because you mentioned you guys need more income. So what's going on there? So we have a one and a half-year-old and a baby on the way, and so we're looking at just cost of living is going to be increasing. And so just I guess I should have asked the question.

Starting point is 01:51:25 His paycheck doesn't change all the time. Okay. Let me run you through a couple quick things here, so George can some plug in here. What is your combined income? Your income, his income. Give me both of those, actually. Oh, okay, yeah. So my husband's income right now is between like $2,700 and $3,500 a month.

Starting point is 01:51:53 It fluctuates a lot. Okay. And what does he do? Uh, he, he delivers pizzas. Full-time? Oh, that's his full-time job? It, it's never really been a full-time job. It's been between 30 and 40 hours a week, sometimes less.

Starting point is 01:52:16 Why is he not working more? He has had some medical, uh, some medical issues that have been a setback. Um, and we're working through that. It's been getting better. Okay. Are you, are you, are you, are you, you making any income? Right now I'm doing DoorDash. Okay. But I've had different jobs than having kids, so.

Starting point is 01:52:45 And do you guys have any debt? We have a little bit of medical debt. And that's it. How much is that? What's that? How much debt? It's a little under $3,000. Okay.

Starting point is 01:53:02 So we definitely have an income. And that's the primary reason for you calling is we've got to get her income up, and we do. But for him to get into tech, there is always a ladder, no matter the industry, right? And so with him not having any tech experience or at this point, he has no tech training, that's what I've been asking, right? So it's going to be very difficult for him to get on an actual tech ladder. He might go work for a tech company, not a bad idea, but maybe he's in the warehouse or, you know what I mean? he's adjacent, which is what sounds like he's been trying to do, but he's still going to have to get some basic training. So one exercise for both of you that you can do tonight is to get

Starting point is 01:53:46 online and in your area, you go on one of these job websites, there's national boards, or you can go look at companies, the local companies, at your tech companies, and you look at some roles. But what you're trying to do is, is research and see what is entry-level tech in coding look like? And then we could say, what is entry-level work in security, like data security or, you know, data analysts, you know, all the things. Get a good view of the landscape and always look for what is the lowest rung on the ladder because that's where he's going to enter with no experience. So then we step back further and we say, what qualifications does he need?

Starting point is 01:54:26 And we start with, does he need a college degree? And many times at these tech companies, you don't, but you do need some type of fundamental training. Okay. Sometimes we're seeing more and more where companies have their own training program. That might be an option. But you guys as a young couple with one little one and another one on the way and very little income and you guys are out schlupp and pizzas and delivering food and I appreciate the hustle. There's no shame in that. I don't dishonor to that. But I am saying you need more and you agree. It's why you called us. So this becomes an urgent research project. Are you with me so far? Anything that I said that you're not sure about? I'm with you. Okay, that's urgent. Like, we are urgently figuring out what the plan should be and what the plan could be. In the interim, I would like to see him get a little bit more aggressive, and I'm going to give him a couple of gifts. So we're going to give you my book, Find the Work You're Wired to do.

Starting point is 01:55:23 It has a career assessment in it, the Get Clear Assessment. 20 minutes, it's absolutely worth it. Yes, ma'am. It's got an AI component to it, and it'll spit out suggestions. and that'll help verify or give him some more ideas. Step one. I'm also going to give him the book, the Proximity Principle. And he needs to read the Proximity Principle.

Starting point is 01:55:43 By the end of Sunday night, he should be almost through with it. And this is about how to make good connections, because it is connections that open up and unlock jobs and opportunities. You're tracking with me? So those two books are my gift. But you guys need to do the research. George on the money piece, they still got some small debt here, I want to bring you in because we got to hustle through that.

Starting point is 01:56:04 Do you guys have anything in savings? Yeah, actually we do. We actually opened a high-ield savings account. We have, I think we have about $25,000. You have $25,000 in a savings account? I guess I should have asked that. You buried the lead there. That's like almost your yearly income.

Starting point is 01:56:31 How did you save that up? Um, well, I've been doing... I feel like you're not telling us the truth, Anna. The amount of pausing is giving me some pause. Yeah. What's going on? Well, I'm just trying to think through. Like, I've had a lot of different things that I've done to...

Starting point is 01:56:53 Okay, for the shortage of time, I'm going to interrupt, because George, tell them what they do with the $25,000. You're paying off the medical debt today. Any debt you have is going to get paid without savings, and anything left over is becoming your emergency fund. That gives you guys some financial cushion and some... financial peace as he explores these new options. And so that's your ramp to get into this new field while he's delivering pizzas and he needs to be working more if his health can support it. You need to be working more as well because this baby's coming and it is going to get more expensive but it's not hopeless. We need to get him the right steps and Ken's resources will do that.

Starting point is 01:57:27 Remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus. If you want to win with money in 2026, you can't keep living normal. Normal's broke. You need a plan. Get a personalized plan and start living like no one else by downloading our every dollar app today.

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