The Ramsey Show - App - It’s Time To Go Scorched Earth on Your Debt!

Episode Date: November 11, 2024

Live from Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by Jade Warshaw, bestselling author, and we are here to help you take the right next step for your life and your money. So give us a call at 888-825-5225, and we'll try to get you the help and hope that you need. Jackie's going to kick us off in New York City. What's going on, Jackie? Hi there. Hi, everyone. What's going on?

Well, I would love to be able to help my sister obtain a mortgage. Since the death of my mom in August, she finds herself in a position of needing a place to live. I want her to move very close to me in the same town, hopefully. And unfortunately, because she was my mother's caretaker for the last six years, she did not have an income. My husband does not want to co-sign on a mortgage for her. Why not? I'm having a hard time with that. When he told you that, what did he tell you? He told me I'm 62 years old. We just

paid off our own home. I do not want my name on another mortgage for the rest of my life. I'm having a hard time with that as a reason because it most likely would be a temporary situation. What do you mean temporary? Well, I would assume that once my sister is settled and with a job, that she would be able to take over the mortgage. I guess refinancing and, I guess, getting his name off of that mortgage. How old is your sister? No.

You're 62. How old is she? I am actually 60. She is going to be 62 in February. Got you. Does she have income now? She has a very small pension that she's collecting on. She started that early because of leaving her latest job. Does she have any money to her name? No. Jackie, do you see the writing on the wall that your husband sees?

You are taking on this mortgage for yourself. It's going to stifle your ability to retire because you're going to have to pay this entire mortgage. Yeah. Jackie, first off, I'm sorry that you lost your mom. It says on the screen that you live in New York. What does it cost? I'm just trying to get my head around the numbers. I'm sorry.

I actually don't live in New York. New York would be the biggest, closest to me. That was the question. So where you live, where you live, what is Jersey? Okay. And what does, what you're looking at, what does it cost? As far as for her to buy a home well i mean for her to live in a house that she needs or wants to i mean you're the one saying that you should buy or something so i'm just trying to see what you guys have looked at that would suit her needs her her buying a home would be contingent upon selling the selling of my mom's house sure and what would you guys get for that? And I would say that, um, approximately between 80 and $90,000, I am one of seven. So, um, we are all on the deep, so it's one seventh of, of the entire sale. And, um, I have also agreed

because I'm not in the, can I clarify is the 90 90,000 one-seventh or is it the 90,000 split seven ways? I'm sorry. No, 90,000 would be one-seventh. All of us would probably collect. Okay, got it. Possibly, yes. Okay. So we're trying to sell the home now.

So in other words, her obtaining a home close to me would be contingent upon the sale of my mom's house. Sure. I have also agreed because I'm in a position where I don't work. Um, I, I don't have to, um, we're well set. Can I ask a question? Sure. If you want your sister to live very closely to you, because that's in one hand, and then you've got your husband who gets a vote saying, I do not want to sign and co-sign for a house, which by the way, I agree with.

I'm pretty sure George 100% agrees with too. What would it look like if she, could she stay with you guys for a while until she, could you guys set a limit of time and say, hey, we want you to live here or we want you to guys set a limit of time and say hey we want you to live here uh or we want you to live on this side of town or on this side of the country whatever it is uh what if you stayed with us for four months or whatever you guys decide talk to your husband and until you get a job on this side of town and then when you get a job the house sales

you'll move into your own place what would something like that look like? Probably not doable simply because of the pet situation. There are two dogs and a cat. One being my mom's pet and my sister's dog as well. Can she afford to take care of these pets? She can. I mean, are you asking me if she would give them up? I'm not asking that. I'm saying it sounds like she's broke, and then these pets are adding an extra expense, and now she's going to jump into home ownership. I'm wondering if she can rent somewhere instead.

Why does it have to be she needs to buy her own house or else? Well, unfortunately, from what I understand about rentals, you're having to meet so much criteria of having a job for the past six months. Well, there's way more. Let me tell you this. There's way more criteria needed to buy a home than to rent a home. To rent a home, I want to make sure basically that you can afford the rent and that way if you have debt to pay off or other things to get in place you have the time to do that whereas if you're going to buy

there's really quite a bit that needs to be in line first and based on what you're saying it doesn't sound like she has that in line at the least, being able to put a down payment. It sounds like she's quite far from that. And so... Here's what I would do. I would take her 90 and park it in a high yield savings account, let her rent for a year in something that's, you know, an apartment, maybe a small home if it's reasonable in your area. And then once she has income and has proven that she can make all these on-time payments, maybe then you at least help her buy the home, not financially, but just from a support standpoint, walking through all the pieces of it.

But I would not intertwine your finances. If you want to gift her some money to do this, that's fine. But do not sign any piece of paper. Because the truth is, think about, and I'm not saying this in any negative tone, but she hasn't worked for quite a while. And she's 62 years old, and she's moving to a new area of town and has to find not just a part-time job, but a job that is going to support her as a single woman. And that could take some time. Do you know, does she have any other debt,

or do you know anything else about her financial situation? No, I mean, she has no other major debt. She might have like maybe $300 in credit card debt grieve the life that she had as a caretaker and go all right i gotta do this on my own now and i gotta pay my own bills and that means i'm gonna have to go to work foreseeably who for no who knows how long she might have to work into her 70s at this point and it's not fair to your husband either because the truth is you guys have built a life together and it's allowed you to get to this point and it's okay if he says and he is smart for saying I'm 60 I'm 62 I don't want to put my name on somebody else's debt it's not smart to co-sign for someone else's debt and that's really what this comes down to he knows you guys are gonna have to pay that bill

for the rest of your lives or eventually sell it it's going to cause more relational turmoil so we need to figure out a way for her to do this on her own. Thanks for the call. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite, and you should too. Whether your company's earning

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download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw, open phones at 888-825-5225. Well, today is 11-11. Woo! Also known as Singles Day. Do you know why? I'm going to guess the single digits. That's right.

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in the description. Dennis is up next in New York. New York, what's going on, Dennis? Hey, hi, George. Hi, Jade. How are you guys doing? Great. How are you guys doing? Great. How are you? I'm doing good. I'm new to the program. I'm up to baby step three. I'm raising my two to six months emergency fund. Awesome.

And my question is for the next, as I move forward, do I put the rest of the money I want to save for a down payment, do I put that in a high-yield savings, or can I put that in a low-risk investment like SPY or something to let it grow? What's your time horizon for this purchase? Are you looking at buying a home in the next two years or six years? No, at least five years minimum. Okay. If you're looking at a five-year- plus time horizon, you can invest it in something like an index fund, mutual fund, to help that money grow at a much higher rate than a high

yield savings account. And the reason for that time horizon is if you're below that, if you're talking a year, two year, three years, there's a much higher chance you could lose money right before you go to make that purchase. So five years plus, we've seen in the market, you're likely going to make money. And so that's a great move. You're talking five years out. How much are you looking to save up? Here in New York, it's quite expensive for a house, like 600 minimum. So I don't know, I didn't map it out exactly, but- You're probably looking at a six-figure down payment. Yeah.

How much can you save each year based on your current income? Current income? About $13,000, $14,000. A year? Yeah. Okay. So if you get aggressive, could you save $20,000 a year for five years?

With that invested, you'll have a healthy six-figure down payment. Yeah. That'll get you there. Yeah, I'm going to have to up my income a little bit and then... Over five years, I think so. I mean, right now... I would hope your income goes up.

What do you do for work? I'm in financial health care services. Awesome. What do you make? Finance for health care. Right now, about $65. $65? $ make? Finance. Right now, about $65,000. $65,000?

Okay. Yeah, I mean, that's a great income, but for New York City, that's tough. It's an ultra-high cost of living area, and so I would try to up your income. That would be my goal, to get that core income up over these next five years while I aggressively try to save as much of my income as possible. All right. That's the goal, man. That's the goal. I hope that helps. Not easy in New York City, Jade. I mean, people call from California or New York and they go, hey, your housing parameters don't work. And we go, the math isn't broken. The math of your reality is broken where you want to buy a $600,000 home, but you make 60K. Yeah. I'm hoping he lives outside the city and somewhere, you know. Yeah. I mean, I got a lot of friends out there and they live in the, you know,

suburb of New Jersey and they commute in. And, you know, it's a good life. If you want to be a homeowner, that's kind of the game you have to play. 100%. And yeah, especially making sure that that payment is no more than 25%. That's a key, key piece of this. Because if you make four grand a month and your payment is $2,500 a month, you're not going to be able to survive and pay for anything else. Tom is in Seattle up next. What's going on, Tom? Hi. Hey, thanks for taking my call. I just need your opinion and if you can give me some guidance on the following. Come on, Tom. Huh? I said, come on, let's hear it.

She was excited. I'm excited. Okay, good. I'm 61 years old. I'm going to retire in four years. Our son graduated with a degree in chemistry two years ago. His company has told him that he needs a degree in engineering, which he wants to pursue.

So it's going to be two years full time. And I know he can do it. But my question is, you know, my wife and I paid for everything on the first degree. I'm close to retirement. How much assistance do we give him? It's up to you. You don't have to give them any. And that's the thing I want you to walk away from this from. If you guys have it to give and it makes sense with the plan that you've created, yeah, you can decide what that is. But

paying for education, especially paying for it in full, really is a privilege and it's something that you get to decide if you want to do it or if you don't want to do it. And there's no guilt if you say, I don't want to do this, but you do need to have that conversation. It needs to be really clear. And I would be very forthcoming on ways that he could pay for it himself so that he doesn't go into debt. And I think that's the most important thing that you could do is say, debt is not on the table and it shouldn't be on the table for you. However, your mother and I are only going to pay for X percent or zero percent or whatever you guys decide. What are you thinking about?

You know, I'm just, I'm kind of lost because he just, he kind of sprung this on us. Yeah. You know, I think, think you know we've got we're debt-free house is paid for uh we got six about 600 in iris and 401ks another 450 in cash mutual funds what's your house worth uh house is worth about 300 to to $320. Okay. And household income right now is about $185. Wow, great job.

If you wanted to do this, could you cash flow it as part of your budget versus taking money out of your investments or savings? Yeah, I think so. With my work, it's a draw against commission. So I get four big settlements a year. Okay. What's it going to cost? I am thinking $40,000 to $50,000. And when you say he just sprung this on you, what does that mean?

When did he say it? Oh, like two weeks ago. Listen. He'd had a talk with his boss who just kind of waited on the line for him. Well, can I be honest? I think it's ridiculous that the employer's not paying for this.

If Dave Ramsey said, hey, we want you to do this job. It's going to require this degree. Go get it, son. Go pay 50 grand. I'm not doing that. Usually if the employer wants you to do it, they're going to foot the bill for it. That's a really good point.

There's another point that I'm thinking of, which is I'm trying to put this in a delicate way because if it was sprung on him then i can see why he's springing it on you but there's also a part of it that uh to just be like hey i need fifty thousand dollars makes me feel like maybe he doesn't understand just how much money that is and it might be good for him to pay for a good chunk of this and feel that so that it's not just oh i can just up and get the degrees I need. You know what I'm saying? Like, I don't know your son, you do, but there's part of that that I do want him to understand. This is a lot of money.

It's like our parents told us, money doesn't grow on trees. Like, you have to go out and harvest it yourself. What happens if he tells the boss, hey, I can't afford $50,000 for this degree? What's going to happen? Well, okay, the way they put it to him is that his career, his future with the company of progressing is limited without a degree in engineering. Okay. Did he know that when he stepped into this role? No, he did not.

And he has been, the company he works for is a very well-known worldwide electronics manufacturer. Got you. Okay. I mean, it might be time for a career change where the latter is higher while keeping his chemistry degree. I don't know. But I would not just foot the bill for this without doing a lot more research and pushing back. So there's some conversations to be had with his boss and then he with you. And we've got to figure out if we're going to do this. And if we're going to do it, his boss and then he with you. And we got

to figure out if we're going to do this. And if we're going to do it, we got to do it debt free. Thanks for the call, Tom. This is the Ramsey Show. Hey, you guys, I'm not a fan of the big banks and you probably already know which ones I mean, but I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join and Fairwinds

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Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. Before we get to the phones, today's question of the day is brought to you by YRefi. YRefi refinances defaulted private student loans. Defaulted meaning when the borrower can't make the required payment. So if that describes you and you've got private student loans, contact YRefi. They can offer you a low fixed rate loan built for you to help you get out of this. Go to YRefi.com slash Ramsey today. That's the letter Y, R-E-F-Y.com slash Ramsey. May not be available in all states. All righty. Today's question comes from Antonio in Washington, D.C. He says, I'm 26, finally graduated as an electrical engineer,

and I'm about to start working in 2025, so I'm trying to plan out what happens in the next year. One of those concerns is leaving my parents home and finding my own place. Good for you. My worry, however, is that I am not sure if I should do this by renting or by buying a space. I know the consensus is never rent,

but I see it as a stepping stone of sorts, a place of your own while not being able to comfortably purchase a property yet. Very smart. This is considering the mortgage, the maintenance, taxes, et cetera. My idea is to rent for one to three years while I build my career and income streams

and then consider buying a small property to call home. Is this the correct way of thinking or are there things I'm not thinking of? Antonio, I think you hit the nail on the head. You're a smart dude. He thinks he's the crazy one when in reality, everyone else is crazy for telling you that renting is a waste of money. You should buy, buy, buy, buy, buy. Buy, buy, buy. Full NSYNC on this one. I know. Thank you, George, for the setup. He's spoken like a true electrical engineer. He's like, I don't know the mathematics. They're not computing. You're like, you're right. You're right, Antonio.

You don't need to buy a house just because you're out of mom and dad's. Rent for a while, get out of debt, get the emergency fund in place, get a nice healthy down payment. And then once you feel ready,

financially and emotionally, go ahead and buy a small property to call home, as he says. Very good. And here's the other thing. You don't know

what's going to happen with relationships in the meantime. Very good. And here's the other thing. You don't know what's going to happen with relationships in the meantime. You might get married and she decides, I hate this little house that you bought. Uh-oh. I wouldn't have done it if I were you. So I think it's wise to wait and see a little bit as, you know, there's nothing wrong with buying a house at 29 instead of 26 or even 35 instead of 30. Well, the good news is we've got a real estate home base for him waiting on him when he's ready. And it's waiting on you too. If you're thinking about pulling the trigger on a home, we've got a wonderful real estate home base. You can find it at ramseysolutions.com slash real estate. They can actually help you if you're buying or selling

whatever your real estate needs are. It's a nice little hub there that has everything you're looking for. That's right. Including, you know, there's tools, resources, calculators, articles. But I also did a course, Jade. Yeah. On for first-time homebuyers. Tell me more. Check that out. Well, there's, I walk through, you know, little quick videos

to help you understand what it's going to take, what all the pieces of the process are. Oh, I love a video. It's the course I wish I had before I bought my first home. I love a video. It's different when you hear somebody saying it versus trying to read it. I don't know why when it comes to things that have those that many details. Oh yeah. Our team did a great job making it visual, making it clear, helping you understand all the,

what the heck is escrow? What's going on there? We break it down for you. Go to ramseysolutions.com slash real estate to get access to all of those resources. You probably made it funny too. We tried. There was a men in Black reference that I'm very proud of in that, including VHS tapes. So, you know, I gotta make it fun. If I'm involved, I want to pigeonhole myself as a guy who cannot be boring.

Good job. That's what I try to do. All right, let's go to the phones. Matt is in Baltimore. How can we help, Matt? Hi, guys. Big fan. Great to be on with you.

You as well. So, I'm currently debt-free myself, and I'm working on paying off about $41,000 of my wife's debt. Okay. Now, we split everything down the middle, making minimum payments, but I am a disabled veteran, and I work part-time. So I have a little extra money in my pocket, about 12,000, I'm sorry, 1200 a month, which I spread load between my son's college fund, a down payment on a house and building my emergency fund.

Okay. So my question is whether you think it's smarter to spread loan my extra unspoken for income across different savings accounts, or if you think I should attack each thing individually? Well, first off, it's Veterans Day. So thank you for your service every day of the year. We're appreciative of that. What you said, I know you have another question there, but what you said about you and your wife kind of threw me off from the very beginning, to be quite honest, when you said that you're debt-free, but your wife isn't. That was kind of like my signals went off. Because here, we really, really believe in combining money

and doing that if you're a married couple. So my question is, how long have you and your wife been married? So me and my wife have been married about four years. Okay. And that problem kind of became twofold. One of which is she wasn't really handling her finances very well and she hid debt from me until very recently. Okay.

And we don't share one bank account. We just combine it for all the household bills. So you pay half of her minimum payments? Yes. And then she pays half of all household bills, you pay half? Yes. Do you guys make the exact same amount of money? So I make more with my benefits. Okay try to i try to help out with a majority of it doesn't that feel unfair though if she doesn't make the same exact amount but you're splitting things equally i feel like if i'm her i'm going hey this isn't fair i'm paying two grand out of my three you're paying two grand out of your four you know do you see how like there could be some relational problems with that some resentment

yeah so we she has she has you know we have the household bills she has her personal car that's 16 000 then she uh had to consult get a consolidation loan to cover 25 000 so she's paying for her car and i'm paying the insurance and I'm paying half of her debt. When you told me earlier that she was hiding, I actually have two questions for you. When you told me earlier that she was hiding debt from you, I want to know how much she hid and how long that went on. Then I want to know what you guys have done to rebuild trust because what I don't want is, depending on what you tell me, there could be a situation where I understand that you guys have, if you've been working with

a counselor, maybe there's a separation going on. But I also want to know what you guys are doing to rebuild that trust. So she had, you know, various credit cards for buying product, as well as lifestyle payments, like just regular payments that she was putting all on a credit card and then just paying the minimum payment. And how much was that to the tune of? What type of debt did that rack up? That ended up racking up about $25,000. Okay, and that's the consolidation?

To get all that consolidated and pay off all her cards. How did you find out about it? Did she tell you or you discovered it? So a little bit of both. Basically what had happened was, you know, the rent goes up, the daycare goes up, things like that. And she came to me saying she couldn't pay her half anymore. So I went over her finances to see where the trouble was or what we could cut out. And I realized she had about, you know, $300 a month payment spread across like four different cards.

Got you. And so what'd you guys do? You went to counseling? No. I took the consolidation loan out to pay everything off to make her solvent. And then splitting that it's about 400 change a month cuts her half down to about 200 a month okay she's paying that off

so she's putting extra but you're not listen that's great i if you notice i i have veered completely away from your monetary questions because i care mostly about your marriage and it bothers me that what this is telling me is you still don't trust her because this thing happened, which is a big deal, by the way. I'm not minimizing that at all. But it's caused you to say, oh, my gosh, you did this without me knowing. You're not good with your finances. I don't really trust you. So we're going to keep it separate.

I'm going to control my half. You control your half. And I'll also chip in. Right. So there's this. This is not a good way going forward. And my my encouragement to you is don't let it go on like this you guys need to get with a counselor and figure out how to mend this

so that you can be back on the same page again because it's very hard to accomplish a singular goal when you're on two different paths and i want you guys on the same path so that you can combine you can support each other there's no kind of like animosity. There's no resentment. There's no, on her end, there's no guilt because once she said, hey, I did this. I'm sorry. Please forgive me. She's not going to be, you guys aren't going to be able to move forward until she knows, okay, this guy, we're back on the same page. There's trust there again, and I'm not saying that that's going to happen overnight, but I want you to work towards that. Marriages are either growing together or they're growing apart. And I want to see more unity. I want to see you make progress with your marriage and your money. And that's going to take

unity. That's going to take one bank account, one budget. We're getting out of our debt. This is we, not us and you and me. That's how to do it right. Thanks for the call. Happy Veterans Day. This is The Ramsey Show. There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly

budget. Plus, when your home is paid off, that was your largest expense. Now, it's extra money in your pocket and an asset towards turning you into a Baby Steps millionaire. So get started on the American dream of home ownership today at churchhillmortgage.com. That's churchhillmortgage.com. This is a paid advertisement. An MLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. RentWin Tennessee 37027. Welcome back to The Ramsey Show. I'm George. She's Jade. We're here to help you with your life and your money. Call us at 888-825-5225. Linda is up next in Madison, Wisconsin. Linda, how can we help? Hi, thanks. I'm glad to be able to get some really good advice. I have a pretty difficult

situation. My question is, what is the best strategy for me to pay off my debts given my current circumstances. What are your, what are they? Yeah. So I'm 58 and I was diagnosed with cancer two years ago. Oh my goodness. What kind? Yeah, I'm doing well, praise God. Uterine cancer came, you know, blindsided, of course. So I was making really good money as a veterinarian and, you know, working on trying to save a nest egg when all this happened. And because of everything, I decided to take an early retirement and I was fast-tracked onto full social security disability in 2022.

So, but unfortunately I hadn't saved a large nest egg, you know, by this time for retirement. What did you have? Well, well right now this is, this is where I'm at. I, I own a house, my home, no mortgage. It's a brand new construction house. So I literally just moved in. Nice. What's it worth? That's another story. I haven't had it appraised, but I'm thinking I could probably get $250 for it. And you live alone? I live alone, no kids. I own my car. So are you debt-free completely? No. So this is, no, this is my fear is I do have approximately $35,000 in debt right now, of which $24,000 is on a credit card that I had used where I went

over budget on the house. About $3,900 is for special medical care and supplements on a credit card. Neither of those credit cards are, they're interest free right now. Okay. But, but that will end next June. The medical, the credit card that you're putting the medical stuff on, is that an ongoing expense that you're using that for? Or was it kind of a one-time deal? One-time deal. Okay. So I'm done with that. And then I, unfortunately I had to have a high deductible insurance in 2024. So now I'm going to have a total of right now I'm at 7,100 of medical bills that are going to be coming due next year. And my complete and entire life savings is $97,500. And so my question is, what strategy would you recommend I use to pay off this debt and rebuild savings or work on that?

How much do you have in savings? Where's the $97,000 stored? I have it in a high-yield savings account at 4.8% interest. So you could pay off all of your debt today using that money? Correct. It would just leave you with less in savings. That would still be a fully funded emergency fund? Correct. And are you doing with your living expenses for? Well, my living expenses are quite low except for, I actually spend a lot on groceries and supplements because I have to buy, you know, organic food and grass. What's your SSDI income? What is your total income each month? $3,117.

And what are your monthly bills? If you exclude the debt payments you need to make, let's say you were debt-free today, how much would your total expenses be per month? So my total expenses are coming out around $2,500. Okay, good. That's without the debt? Without the debt. So let's say you took your $97 in savings, you subtracted your $35 in debt, you were debt-free tomorrow, less stress, better for your health. That leaves you with $62,000 for your emergency fund, correct? Yeah. And then you'd be able to cover all your bills with about $600 left over. What's your out-of-pocket max every year for your insurance? Well, starting on January 1st, I'm going to be on Medicare.

Okay. So I have a very, that'll help. And it's only, it'll be $255 a month and they cover a lot I mean I'm gonna still have some co-pays and things but that'll be life-changing I should that is part of that $2,500 okay good so if if I was in your shoes truthfully I would get rid of this debt today today using your savings I know it's going to knock it down. I know it's your life savings, but that's also going to free up $600 you could put in a savings account to add to that,

to start to cover some of these expenses. That's what I was wondering. And the risk here is you've got to live off of $3,100 for the rest of your life, right? Do they have a cost of living increase each year with that? They do. You know, it's based on the government, but they do have a cost of living increase. I mean, technically I could. I'm trying to make it work. I could get a part-time job or something. I mean, I'm not completely disabled, but I'm trying not to do that because one, it's just more stress on me. And two, if I don't have long, I would be focusing on your health right now for sure.

What is the prognosis? You know, is there a way you beat this? What does the doctor say? Well, originally, um, it was bad. I mean, I was like, I was bad. You know, we're talking about grade three, stage four. Wow. So I was an overachiever right out the gate. But I am on immunotherapy, which has been just a game changer, a lifesaver. I'm in complete remission and I'm doing everything. Like I'm doing all the naturopathic stuff that you can

imagine. Yeah. We're so glad to hear that. That's great. And I truly think that debt has a physical weight on our bodies. And I think when you pay this off today, you are going to feel so much better emotionally, physically, mentally, spiritually, all of it. And then your job is to get on an every dollar budget. I was worried that you were going to say, oh my gosh, you like failed epically. No. I'm so far behind. Linda, there's always a measure of peace

that can be achieved, always. Always. And you've got actually, you know, you have the money to do exactly what george said you can be debt free you've got a paid for house to be able to say that is amazing you've got paid for cars you've actually accomplished quite a bit you may have done it in a roundabout way but the most important thing is you're healthy and you've got your life back exactly and beyond that now we got to make sure we're living on less than we make. We're on a written budget. We have margin left over instead of being right to

the line every month. And that's what's going to happen when you pay off this debt. And that extra 600 bucks, we need to just keep living like that didn't exist. Let's pile away into savings, maybe even investing long term. You can jump on ramseysolutions.com and get in touch with a smart investor pro who can teach you how to invest this money. So instead of a 4% rate of return in your savings, you could get 12%. I mean, this year, we've seen 38% returns in the market, Linda. So your money could grow for you. I mean, if you continue to live a healthy life 30 years from now, I want to see this money grow for you to have an even better retirement than you thought possible. And based you know, based on what you said, I probably would encourage you

to start working part-time again. That's definitely not going to hurt you financially. It's going to help you financially. And if you're healthy enough to do it, it'll give you some great purpose as well. So. Yeah. Yeah. I, I, um, I'm just trying to enjoy every day right now and I am enjoying everything. Yeah. That'll change your perspective. I just really needed this advice. I'm so glad I got to talk to you because it's been weighing on me like, you know, all these different ways I could go about it, but I've been watching your shows and learning a lot. And I, you know, I've got my written budget. I've got, I've got things down to the penny, you know. I know exactly what's going on. Well, Linda, hang on the line.

We're going to send you a whole year of every dollar so that you can budget the Ramsey way and get over this. As soon as you're out of debt today, it's going to feel so good. Man, Linda, what a lady. That's the gift I'd be giving myself, going through what she's going through and has gone through. I want a life of freedom. Okay. Get rid of those brain calories and replace them with something much better. Going through what she's going through and has gone through. I want a life of freedom. Get rid of those brain calories and replace them with something much better.

Linda, we are cheering for you. We hope you continue to have good health and call us back if you need any help. This is The Ramsey Show. From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Jade Warshaw, and we're taking your calls at 888-825-5225. If you want to talk about your life and your money, this is the show for you. If you're looking for something else, I don't know why you're here, but we're glad you're here. Glad you're here.

Stick around. Maybe you'll enjoy it. Mackenzie kicks us off in Pittsburgh. How can we help today? Hi, how's it going? Great. How are you? I'm well, thank you. So I had a quick question. My husband and I, we bought a house in 2020 for an extremely low price and we got a really good interest rate on it, 3%. It's not in the area that we would like to stay long-term, but we are in debt, so we're not planning on moving right now. My question is, would it be wise to sell our house, and because of the market and the work that we've done to it, we would make a significant amount of money off of it? How much? We bought it for $70,,000 and we're estimating 140,000 selling it. And we owe 65 on it currently.

Okay. Uh, what kind of debt? Um, so we have, um, obviously the $65,000 mortgage. We owe $27,000 on one car, 11,000 on another and 70 on our student loans combined. What's your household income? 166,000 on another, and 70 owner-student loans combined. What's your household income? $166,000. That is new. That started happening in September. Awesome. Great income. So let's walk through two scenarios. One is you stay in the house and you aggressively pay off the debt. How quickly, making $166,000, could you pay off

$100,000 in debt? I mean, pretty quickly. Two years off $100,000 in debt? I mean, pretty quickly. Two years? $50,000 a year? Yeah, I would say that's definitely possible. Okay. The other part of that is my parents are moving, and they are looking to rent out their house now that they're currently living in,

and they're moving into another. So I was thinking, what if we rented my parents' home and then use the income from our home to pay off almost everything? We would just have a little bit of student loans left and we can get that paid off in like a few months. Do you like the house? Do you like your house that you live in? I like our house, but I don't particularly like the area. We live in town and I want to be somewhere more secluded. So in the future, we do plan on moving. Okay. I'm going to ask a question. I know it's going to be hard to answer, but just try your best. If you didn't

have this debt, right? If there was no $109,000 of debt, would you be so pressed to leave or rent right now to get out of that area? No, but we would definitely be looking for a house. You'd be looking. Okay. I'm trying to, what I'm trying to assess is if this is feeling like a way to get out of debt quickly and kind of avoid pain but possibly at the expense of i mean you've got some nice equity in this house and doing things that you wouldn't normally do like rent because in your situation you shouldn't necessarily have to rent again um if you wanted to move to a different house that's just what i'm looking at um if you sell the house you're probably going to get about 60k after paying off the mortgage and realtor fees and closing.

Okay. So you're going to knock out a little over half the debt, which is great, and you'll knock out the rest of the debt in a year. So really what we're talking about here is one-year difference. If you stay in the house, it's going to take you a year longer. If you sell the house, it's going to take you one year shorter. So it's up to you. This is not an on-fire situation where I go, you got to sell the house. That's a drastic last ditch effort to get out of a bad situation. Nothing is on fire

here. Your mortgage payment is probably not that large compared to your amazing income. Yeah. I probably wouldn't do it if I were in your shoes. I think that the idea to get out of that area, I think that good and i think it's in your head um but i don't i'm with george i don't think it's on fire and i like when people walk through this process especially when we're talking about cars that we can't afford it's it's just a good lesson in okay this is what it really costs me i can actually feel the cost of 27 and 11 and 70 thousand dollars it's an insurance policy to never go into debt again when you sacrifice to pay it off over two years. And honestly, one year after that, you could pay off the mortgage if you continue down that path. So now we're talking

about three years from now, we'll be completely debt free, including the house. That gives us a lot of options when we move. And your motives just change. I mean, truly, we don't realize how much debt kind of pushes our motives forward. And then when it's gone, it's like, oh, wait a minute, things look different now. And so there's part of that that I'd like for you to experience, because I really think that right now, even this debt is clouding your motives slightly. But George is right. Sitting on a paid for house makes you think of the whole thing a lot differently. And so I'd like for you to be able to experience the situation that you're in debt free. And I'd also love for you to build up the habits to keep it that way by paying this off.

What are you guys paying for your mortgage right now? $590 a month. America is mad at you right now. I just want to let you know. We're not happy. Way to go. What would your parents charge rent if you moved to their place? I mean, I don't know the exact number. I'm guessing because of the area, it'd probably be about $1,200 a month. So you're paying way less now.

Yeah. So I don't think the juice is worth the squeeze on this one just to get you out of debt a little bit faster. I would use that amazing income, live on little of it as you can to cover the bills and throw the rest of the debt. I mean, with a $590 mortgage, you guys should have a lot of this money up for grabs. That's a lot of margin left over with that $166,000. Yeah, and we've been paying off debt. We had about like $12,000 in credit card debt that we paid off. And we're starting to work on and like attack

these things but i got a little excited thinking we could expedite it it is exciting to when you look at all the ways you could get out of debt faster but selling the house that's a big one with a lot of numbers on the end can i take you to task a minute how long did it take you to pay off the 12 000 in credit card debt so it was kind of. We actually, we have a one-year-old, and we initially were going to go like gazelle intensity, and then I found out I was pregnant, and I was not going to get a paid maternity leave. So we paused, decided to save for my maternity leave. So I would say it took us maybe like four months to pay off her credit card. But this was after the baby?

Yes, yes. Okay, because she's one years old. My point is, and like I said, I'm taking you to task. My point is, I don't think you guys have, I truly don't think you've been willing to embrace what it will take to pay this off. You have a great income. And I want you to see that it's going to cause a level of discomfort to do this. And I think before you were searching for a way that it wouldn't be discomfort. It's like, okay, we can sell this house. Oh, it's moving my parents' house. That'll be better.

And so I don't want you to search from place to place to find how this is going to be the most, how it will give you the most comfort to do this because you may end up putting yourself in a worse situation trying to do that. Like paying double for rent than you are for a mortgage that can be paid off in a year. So that's kind of what I want to leave you with is you will feel this. I would just stay put where you are, Mackenzie. I mean, you guys are bringing home probably 10 grand a month. Yeah. So will feel this. I would just stay put where you are, Mackenzie. I mean, you guys are bringing home probably $10,000 a month. Yeah, about. So think about this.

If you can live off of $5,000 and put the other $5,000 toward debt, that's $60,000 a year in debt payoff. You're done in less than two years. That's some napkin math to get you excited about this. And that's no side hustles. Yeah, that's without doing anything extra. I could live off $5,000. We could do this.

So that's what my goal is. Sit down live off five grand. We could do this. So that's what my goal is. Sit down with your husband tonight, do an every dollar budget and go, okay, we make 10 grand. It's disappearing right now into a little bit of laziness, a little bit of comfort. Let's really get on this thing and be done in 18 months.

Let's get a big, hairy, audacious goal so that we can move on with our life and have our home and our dream location one day. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours

take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. Well, tax day isn't until April, but there are some really important moves you can make

before the end of the year that will affect what you owe. And we're all about trying to help you pay the government less legally. I feel like I have to put my spectacles on for this. We're about to get nerdy. So we got seven quick tips. We're going to make this painless, and you might even learn something. So what's tip number one, Jade? All right. Number one, check your paycheck withholding. That's a good one. The goal is to not have a big refund. That just means you're overpaying to the government, right? Every single month you're

giving them too much. So you need to adjust your withholding to get as close to zero as possible. And again, I'm saying that you do not want a tax refund every year. That's what we're talking about here. Forget like we get our three grand refund every year. You just gave the government an interest-free loan. That should be coming back into your paycheck every month to the tune of almost 300 bucks a month. Next tip, income is taxed only in the year you receive it. So if you can defer any income until January 1st or later to save on this year's tax bill. So you might be self-employed and you've got vendors that are paying you. You might say, hey, can you pay me January 1st?

And that way I have less income this year that will be taxed. That's one way to do it if your employer allows that. Caveat, consider whether that extra income will push you into a higher tax bracket next year. So if you kind of know what next year is looking like, you can figure out what's going to happen there. It's good to note though, that the way the tax brackets work, if you are pushed into a higher tax bracket, your whole income is not going to be taxed at that rate. Just the amount that places you into that bracket, if that makes sense. So if you hit the 22% bracket, well, you're not paying 22% on the entire amount. That's right. It's just on an amount over a certain. So that's a helpful

tip. People think, I don't want to make more, Jade. I'm scared. I'm like, no, you're not paying that much more in taxes. Making more money is a good thing. Yes. Please. Okay. Keep going. What's the next one? All right. Number three, let's save by contributing more to tax advantage retirement accounts. You know what I'm talking about? 401ks,, 403Bs, IRAs, that could be traditional. You want to do traditional 401Ks and traditional IRAs that are funded with pre-tax dollars, okay, so that you can write off the contributions as a deduction. That's right. You can't deduct like a Roth 401K contribution.

You've already paid taxes on it. But the pre-tax stuff, the traditional side, you can save some money there in your taxes. Next one, if you're 73 or older, you need to withdraw from traditional retirement accounts to avoid penalty. True that. So these are required minimum distributions, RMDs, as they call it in the biz. And there's a minimum you have to withdraw every year. And here's why, the government wants their piece. So if you've got these traditional accounts that have been sitting there, the government's like, hey, when are you going to take money out to pay us taxes? Yeah, they want that tax money. Best believe it.

Another reason why I love the Roth, you already paid the taxes. So there's no RMDs on that. Yeah. I had somebody, this is a sidebar. I had somebody on social media, George, that was like, hey, my plan is I do all traditional and I'm just, just before I retire, I'm going to go back through and convert it all to Roth. And I was like, wait, and I was like wait wait wait you're gonna have the biggest tax bill of all time yeah of all time yeah it was a scary thing I hope she read my comment yeah would not recommend oh boy okay what's the next one all right the next one is let's use gift tax the gift tax exclusion to avoid filing a gift tax return. For instance, if your gift is greater than the gift tax exclusion amount, the remainder goes towards lifetime gift exclusion. So I believe it's like,

I don't know, 17 grand per person, per child or whatever. So you can really move a lot of money around and gift it without ever needing to file for that gift exclusion lifetime, which is millions and millions of dollars. That's right. This really does not apply to a whole lot of people out there. All right, next one, take advantage of tax deductions and credits. Now, we've all heard about deductions and credits, but you can really reduce your taxable income by doing a bunch of things. So, for example, paying property tax in full by December 31st, you could write off property taxes when you file. If you pay your January mortgage bill early before December 31st, you can deduct the interest portion of that payment, making charitable contributions to receive deductions. Keep that list there. There's EV tax credits you can file

for, energy efficient home upgrades. So a lot of things you can do, but this is really for those that itemize, which because of the 2017 Trump tax cuts, the standard deduction almost doubled for everyone. So it made way more sense for people to do standard deduction versus itemize. So less and less people are doing that. Are you tax deduction or credits? I like a credit. Oh, well, you know, I feel like the deduction will lower your taxable income. The credit is taking some money off the bill.

Yeah, I kind of like that. It feels better to get the money taken off the back end of the bill. It feels like a coupon. Yeah. Or like some sort of a deal. I don't know why. But I'm not eligible for a lot of credits these days. Me neither.

You know, so it's fine. All right, number seven. Should I go to this? Okay, we just talked about this. Converting retirement accounts to Roth has its tax advantages. You'll get tax-free growth on your retirement savings, which we talked about, and tax-free withdrawals at retirement. The thing is, when you're going to do this,

we really say this should be like a baby step seven activity. Because again, you're paying a tax bill. It'll cost you money. Yeah. And depending on how much you had in traditional accounts that you're converting over, it could be decent. Definitely something to plan for. Yeah. So you're better off using that money toward getting the home paid off and all that. That's why it's a baby step seven thing to do. And that's why you need to do a healthy mix throughout the years. That's right. And one final bonus tip for you, connect with a Ramsey Trusted Tax Pro. These are the folks that can help you do things the Ramsey way. They're not going to tell you to do stupid stuff like go buy a hundred thousand dollar car because it's a

write-off. Our Ramsey Trusted Tax Pros are not going to steer you in do stupid stuff like go buy a hundred thousand dollar car because it's a write-off our ramsey trusted tax pros are not going to steer you in a bad direction they're going to help you save the most money and do it by the book and take out all the jargon and confusion and stress out of the taxes so if you have questions reach out to a tax pro ramsey solutions.com slash taxes they'll help you save money on taxes now and in the future all right was that quick and painless? I felt a little discomfort. Yeah, it wasn't fun, but it wasn't painful either. That's right. No pain.

Some weirdo out there enjoyed that. Some accountant, some spreadsheet-loving guy was like, yeah, let's go. All right. Let's go to Fort Worth, Texas up next. Kara joins us there. What's going on, Kara? Hi. My husband and I just found out recently that my parents are in a bit of debt and don't have really any savings,

and both of them are living on a fixed income due to medical diagnosis that leave them on disability and Social Security for their income. And just wanted to know the best way to help them out of that. We found out just recently that that debt had been enrolled in a debt relief program. Oh, boy. So it was almost $40,000 that was enrolled last year. And year to date now, I think of the seven different debts, three of them are settled and payments made. Two of them have reached an agreement and are in progress on making those payments. But unfortunately, the last two are the largest totaling almost $25,000

less better in advanced negotiations and I believe a lawsuit has been filed for that. What is their income? So income with so they're both on Social Security due to disability, and there's also some long-term disability coming in that totals about $5,500 a month. Okay. So that's their fixed income. And what are their monthly expenses? So they do still have a mortgage that's about $1,650 a month. They're currently making payments to the debt relief program of about,650 a month. They're currently making payments to the debt relief program of about $650 a month,

and then everything else, bills and food, comes out to total, including the mortgage and the debt relief program, comes out to about right at the $5,500, it comes pretty close every month. Okay. Have you had a conversation with them? Which is part of the... Saying, hey, mom and dad, you're broke. Here's like, let's look at the numbers. Do you see the reality of your situation? Have you had that conversation?

Yeah. So that's where the conversation started is, I mean, my parents are scared. Are you guys in a place to help them financially? Like if you were to cover the $25,000 they owe to get out of this lawsuit, could you just gift that to them? We do have money available that is sitting in a non-retirement investment account that could be used to essentially pay that off. I don't know the process. What baby step?

I was going to ask her what baby step she's on, but that's okay. We're getting to the line. This is a tough one. If you want to gift it to help them out of the situation and then say, you're never going to debt again, there's going to be some strings attached if we do this. But otherwise, they're going to have to do this on their own and use their income to do it which means lowering their lifestyle and potentially trying to do some part-time work which might be difficult with their situation no easy answers here that's for sure oh this is the ramsey show

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check it out, you guys. Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw. And from time to time, we have some guests that want to celebrate their debt-free journey. They come visit us here at our headquarters in Nashville, Tennessee. And Brooks and Shannon have chosen to do that. Welcome, guys. Thanks for having us. Thank you. This is exciting. Where are you from? Dillsburg, Pennsylvania. Just outside of Harrisburg, state capital. Awesome. And how much debt did you pay off? We paid $145,000. Whoa.

Tell us more because I have a feeling. This is great news. All right. How long did this take? Six months. Six months. And what was your range of income during that time? $62,000 to $144,000.

Okay. I got a lot of questions here. That is a lot to pay off in six months. Yeah. What did you pay off? six months yeah what did you pay off well there's about thirty five thousand dollars uh for the food truck for the business nice and then you're looking at weird people let's go you paid off the house wow wait can i set this up for the listening audience right quick because the truth is you

guys came up to me on the break and they're like hey jade i don't know if you remember this but you and rachel were hosting and it was kind of a help us decide what we should do i think we call it this or that yeah pick a side whatever and it was between paying off your house or like remodeling your backyard correct and based on what you laid out i think rachel and i were like do the backyard and it was gonna because you're like we could do the backyard or it'll take us two years to pay off the house i feel like you told us correct and or it'll take us two years to pay off the house, I feel like you told us. Correct.

And now it hadn't been two years. So what happened? We just started playing around with the calculator and realized, because I was a photographer for 10 years. And I said, if I retire and go back to work, I'm an actual tech writer. And I'm like, if I go back to work and we put everything. And just go after it. And, you know, the first goal was, well, what does it look like if we can pay off the house by the time our oldest is graduated from high school? Okay, we can do this. Well, what about the youngest once he graduates? Okay. And then boom, boom, boom. And then we found like, what if we do this in six months? If we do this, we do this, we do this. And let's just go

after it and, you know, just be tenacious with it. And we didn't go gazelle tents. We went scorched earth. Can you walk me through this? Cause I'm like trying to do the math and it's, it's hurting my brain as to how you paid off 145 grand in six months making 144. So the 35 was from retained earnings from the business. I had the cash on hand, but I was reluctant to spend it just because that's that safety net, just in case anything happens. And, you know, like you all say, just, just pay it off and it's better off for it. And we are, um, and thankfully we just sold it last week. We closed on it. So are you done with the food truck business? It just didn't work out. What kind of food was it? Uh, just, you know, pub, pub food, you know, burgers, uh,

fries, things like that. It just, tough industry. We own and operate a craft brewery. So that was just a addition to it. And it's a tough industry to live and work in. And so we just decided to move on because it wasn't working. So focus on other food that was much more profitable and mainly less stress for me. Yeah, absolutely. What's in your hand? That would be our Lucky lucky lobster. This is our hazy double IPA. Wow. This is good marketing. I was wondering, I was like, is this guy drinking on the clock here? Not yet. Okay. I think we'll have the first. That's for after the debt-free screen. You got it. Absolutely. I love it. So you paid off the 35, the food truck with retained

earnings. What about the mortgage? How'd you knock that out in six months? So like I said, I went back to work in the corporate world world i also got a part-time job and then i also work at our tap room so a lot of it was on my shoulders it was but we knew it was for work because we're going we're going big wow this was all you this was all cash flowed through income yes you didn't sell anything to get rid of this you didn't have saving you just went we're going to put every dime we can from our income

and live off of very little. All the tips we earned from the tap room, everything. I mean, we were scouring the couch cushions just to get a couple

quarters here. We have a goal and we're going to be tenacious at it and we're going to get after it and mission accomplished. That,

I mean, I'm just tripping because you guys, you went from a two year horizon to six months. Yeah. Yeah. Just by crunching some numbers and going, we could do better.

We could do better. It's all about the budget. Yeah. All about the budget. And now we don't have a payment in the world. No. No, we don't. So what's next?

How do you celebrate that? Well, I mean, mama needs a new car, first and foremost. We've been driving Hoopties. I mean, my entire life I've been driving paycheck cars. Okay. I kind of like them because you don't have to worry about getting them damaged. Facts. You know, the first thing that you do when you buy a new car is someone scratches up against it in the parking lot.

Yeah, you got to park in the back. You know, with the new house we have, you know, we haven't completely finished the basement off, so the bar is going to go down there. And then possibly Europe as well, too. Wow. So no backyard. what happened to the pool uh there was never a pool but uh it just you know you put different priorities on things and which is the most most important nothing wrong with that yeah and the basement bar has clearly been the priority well you know it's well and getting back to you know to the to the new house so we lost our original home. So the home we paid off, we lost in a fire.

Oh, my goodness. January of 2023. Holy moly. No way. We got a photo of it. Oh, my goodness. So that's 15 minutes after I called. Wow.

9-1-1. That's the day after. Were you in the house? We were at home at night. At night? Yes. It was 10 o'clock at night. Thankfully, we were up watching TV.

Just before we went home. And long story short, it started in our garage. And we had a door with a doorbell. And we had no notice of the fire except the doorbell ring. The doorbell rang. We got up to see what's going on. We thought, you know, who's at our door? Door at 10 o'clock at night on a Monday night.

We walked to the back door where the doorbell would have been. And we heard something weird. He opened the garage door. And the garage was completely in flames. Who rang the doorbell would have been and we heard something weird he opened the garage door and the complete the garage was completely who rang the doorbell nobody the lord the lord holy in my head i was like please tell me there was nobody at the door because that would be a literal miracle and the next day the fire marshal you know asked what did you see smell here and um we're like we had no idea the house was on fire until the doorbell rang. Is that a feature on the doorbells now?

Or if there's like smoke and fire, they ring? That was the hand of the Lord. Maybe that's something we need to look into for business. Wow. Okay. So what happened after that? Does the insurance company write you a big check? They did.

So we had the choice whether we wanted to sell off the land and then buy a house somewhere else or rebuild a new to us house. And we got to design the house of our dreams within budget. And it's the house we live in. You know, we often say, you know, we paid off the old house. The current house, which we live in is the gift the Lord gifted to us and will propel us to do marvelous things in the future. And actually one thing Shannon left out, as we were walking away from the fire, to this day I can still remember her saying to our boys, something good will come from this.

That's right. Something good will come from this. And it really has put us into a financial position to do a lot of a lot of good things within our community because our community i can't say enough about we can't say enough about them loved us they we don't close us they how i mean we literally only had our you lost everything we lost everything i mean you can go from living high on the hog life is great to being homeless in a matter of an hour and not having anything. It will change your perspective. What perspective did that give you?

Because few people will experience that. Yeah. So honestly, that became our why. How our community responded floored us. And we're like, we need to give back even more now. And so that motivated the why. And honestly, it was just stuff. Yeah.

Our boys, we got out our boys can all be replaced the four things that needed to get out of the house got out without any harm we can replace other other things we can replace the cars we can replace this replace that it doesn't matter it really doesn't matter and and i want to tell people who are listening we did not use insurance money to pay off no the mortgage the insurance money went to rebuild the house. This was hard work. A lot of sacrifice. The long days, long nights working every Friday night, Saturday night, Sunday, just to reach

our goal and just to go after it. All four of you, because I see the boys there, you guys are incredible people. An incredible family. And you give new meaning to the word scorched earth, which you used i want to just point out the irony is rich here let's get let's get the boys up here what's going on guys names and ages so this is colin we call him tank he's 14 here when you go by mom and this is uh

ian we call him e or biggie so he's 12 uh tank. Wow. And these young men got a front row seat to a lot of sacrifice, a lot of life change, some trauma. But here they are, resilient, persevering. And they're going to live lives of debt freedom thanks to mom and dad's hard work. Absolutely. All right. Count it down. We've got Brooks and Shannon, Colin and Ian from the Harrisburg, Pennsylvania area.

$145,000 paid off in six months. House and everything after it burned down and they rebuilt, making $62,000, $145,000 paid off in six months, house and everything, after it burned down and they rebuilt, making $62,000 to $144,000. Count it down, guys. Let's hear a debt-free scream. Let's go, guys. Ready? Three, two, one.

We're debt-free! We're debt-free! There's a lot of firsts in this debt-free screen. Wow, wow, wow. And cracking the can, that's a first for me. It might become a tradition. Listen, he should have got a can for all of us. Wow, that was incredible. Inspiring, guys.

This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. I've got to mention, we just met our debt-free screamers out there, and Shannon is an Air Force vet. So I wanted to say a very happy Veterans Day, very thankful for the service and sacrifice of so many today. Indeed. And not to be outdone, Jade, there is a much lesser holiday. It is Singles Day. Ooh, tell me more.

That rests in the shadows of Veterans Day. Apparently 11-11, 1-1-1-1, all single, I guess the same single digits. So for all of our single friends out there, I see some hands being raised in the booth from our friend Will. But it has nothing to do with relationship status. It does.

Oh, it does. It has almost everything to do. Tell me more. That's it. It's the largest shopping day in the world, apparently. what i'm told again and we love any excuse to give our folks a great deal whether you're single or not these deals apply so it's not about the digits i don't know i'm not in charge you think they put me in charge of the holidays i don't know i national pizza day i'm not in charge of that but today only we figured you know what fine let's give the people a great deal. So today only, we've got deals as low as $11 in the Ramsey Solutions store.

Popular questions for Human's Thanksgiving Edition, Total Money Makeover, Baby Steps Millionaires, Building an Unanxious Life from our friend Dr. John Deloney, Ken Coleman's Get Clear, Career Assessment. So many deals, just $11. So today's a great day to just go ahead and start stocking up before the holidays. Is your book $11? I don't think we're there yet. I think mine is. Maybe we'll get there. Yeah. Okay. Check it out. One day. You'll have to see for yourself. I don't know what they put in there. Again, they don't put me in charge of this stuff. RamseySolutions.com slash store. Find out for yourself. Or if you're listening on YouTube

and podcasts, click the link in the description. All right. Tate joins us up next in Seattle, Washington. How can we help, Tate? Hey, guys. Just want to say I'm a really big fan. I appreciate that. So I'll try to make this quick. So backstory, I recently graduated college six months ago and got a really good job and just became debt-free and just maxed out me and my wife on our Roth RAs. Way to go. Yeah, we're soon to do our HSA and in January, we'll max out both our Roth RAs for 2025 and doing our 401k and everything. You guys are crushing it. Yeah, yeah. Thank you. All the baby steps work. Yeah, you're, our 401k and everything. You guys are crushing it. Yeah, yeah.

Thank you. All the baby steps work. Yeah, you're doing much better than I was after graduation. I'm impressed. I want to be like you when I grow up. Okay, so what's your question today? So we want to buy a house, but we're kind of just, we're kind of, just the market's not good.

So it's not looking good. And we don't know what to do. Like we plan on saving up about 50 grand this year. Okay. And I don't know if that's even enough to put for a down payment for where we live. What are you looking at? How much do the houses cost that you're looking at? About for a small house of 1,000 square feet that was built like, like you know like in the 70s um it's

about four hundred thousand dollars and there's only probably about a handful out there and this is the seattle area uh it's actually in uh bellingham washington my company's office is that yeah okay which is which is a pretty you know high cost of living area some big companies over there have you done the have you done the? We've got a really great calculator of basically how much home can I afford? And you can plug the numbers in and see, okay, what do I need to put down? And basically you can work backwards to say, how do I get this payment to where it's only 25% or less of my take home? Have you done anything like that yet? Yes, we have. It would take us like two years. Okay, and what's the amount? Hold on, is that a long time for you, Tate?

I guess, yeah. I feel like I'm behind in life. How old are you? Tate, you just graduated. Yeah. Okay, how old? I just turned 27 a week ago. Can I tell you a secret that's not even a secret, but it might make you feel better? Sure. What if I told you that my husband and I rented a secret but it might make you feel better sure what if I told

you that my husband and I rented for 10 years before we bought a house and we didn't explode or burst into flames just letting you know because you got to be able to afford it right yeah but you don't think we're missing out no building equity no I mean I could put like 30,000 in my equity. Well, you know what? I wish... Let's build a time machine. Let's go back in time, buy a house when it was $14,000 in order to build more equity.

There's a lot of things we wish we could do, right? The best time to plant a tree was 20 years ago. The next best time is today. But that doesn't mean that you should get impatient and entitled and go, we got to get it in now because we're throwing away money on rent. Learn to have patience. You're 27. Go talk to a 60-year-old and you'll see there's a level of, I guess, maturity that happens when you go, okay, not everything's going to happen on my timeline.

And I remember at 27 feeling like, time's running out. I have one year to do this in my career and hit this financial goal or else. And then five years goes by in an instant. You're like, oh, okay. I have more patience than I thought. Plus there's the whole thought here of if you buy this house before you can really afford it, you're not going to be thinking about equity. You're going to be focused on making the payment every month because it's going to be eating you alive if you even get to keep the house. Right. So you have to run this equation for what it is. And the truth is, you could buy a house before you can afford it, but it'll be a

problem for you. So it makes sense to wait. In two years, in the grand scheme of things, is a drop in the bucket. And if you don't want a crappy house, like you're kind of talking about, this thousand square foot, it's super old, then don't. Then wait, save up more, get a bigger down payment, and that will lower your monthly payment. So that's what I would do if I was in your shoes. And if you don't like the timeline, we got to figure out a way to make more and spend less to create more margin to save up faster. And so I would just turn this into a math equation that puts some fuel on the fire versus a woe is me shaking our fist at the sky gods. You know, renting is a funny thing. I think that you can really enjoy your renting experience while you're renting.

You know what I mean? Like there's more to life in an instant than whether or not you're renting or buying. And I think it's really easy in a moment to kind of base your whole life and like whether or not you deem yourself successful in a moment or not, right? It's like you're 27 years old. You got so much time ahead of you and you're gonna look back on this and go, oh my gosh, it was so funny that I was so rushed at 27 to have a home

because a lot of times we're compared, like without even realizing it subconsciously, we're comparing ourselves to something else we've seen. It's not even really just our race that we're running. We're thinking about what our friends have. We're thinking about what our cousin did or what the people on social media did. And yeah, you got blinders on. Yeah. If you couldn't see any of that, if all you saw was the race that you have to run in front of you, you wouldn't be so sidetracked by that. If we said the average person takes seven years to buy their first home, you'd be like, oh, wow, I'm doing great, right? So I think we need to look at this glass half full situation and go, man, what a blessing it is to be 27, no debt, maxing out

Roth IRAs, maxing out HSAs, and be able to buy a house two years from now in a very expensive area. Yeah, I suppose you're right. Yeah, that's a pretty good way to think about it. Perspective, man. It's a wild thing when you can change your mindset. But you'll be there in no time. What's the household income? After we put our 401k up and...

Just the gross household income? $150 net. Amazing. Oh, gross. $150 gross. Okay, gross. Oh, gross. $150 gross. Okay, good. That's great.

And how long have you been married? We just celebrated our one-year anniversary a few months ago. Yeah, you guys are doing great. You need to just take a chill pill. I'm mad that Tate is upset. Take a chill pill. You're doing great. Yeah, you're doing great, Tate.

This is a lesson in patience. What do you think that is, George? i feel like more and more we get calls and if i had to sum it up it's just like this race to get a house and be you know have wealth and like it's just this well it's the 19 year olds calling and saying i need a million dollars by 25 and i go why and they go i don't know i just i i feel like i have i need to or else i'm behind i'm like behind on have you listened to the calls on this show like people are happy to have a million bucks in a nest egg by the time they retire who told you that time is running out and that if you're renting you're throwing away money and it's probably a mix of society parents

and tiktok at this point yeah and don't get me wrong. I think it's great if you enter into your adult life, you've largely avoided debt, or if you did have it, you paid it off quickly. I think it's great when you're able to walk through the baby steps and get further at a younger age. I think that's amazing. I mean, that's the whole goal. The sooner

the better. But if you're just this rush to kind of like check these boxes, I just want to remind people to like life is a journey life is a highway it's a highway i can't sing anymore because i think we'll get taken off the air but enjoy the ride put the top down speaking of the ride it's almost over here if you're listening on youtube or podcast so if you want to finish the show head over to the ramsey network app for a distraction free experience you can download it in the app store of your choosing

or click the link in the show notes to check it out. But this ride's over, Jade. I'm sad to say. It's been fun. I am sad. And so if you're on radio, hang tight. We'll be here. But if you're on YouTube or podcast, go jump onto the app.

We'll see you for a whole other hour of The Ramsey Show. Live from Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw, and we're taking your calls this hour at 888-825-5225. That is your way to jump into the conversation, and Christy has chosen to do so in Austin, Texas, to kick us off. Welcome to The Ramsey Show, Christy. Hi, thanks for having me. Absolutely. My husband and I are fans of the show. We've been following kind of the steps really on our own, just got exposed to Ramsey a few months ago. We love listening to the podcast. However, my husband and I are debt free, but our youngest son approached us

yesterday. He's 23. He's been out of college about a year and a half saying he wanted to talk to us about some debt that he's accrued. Now, just about a year ago, when he was graduating from college, he had opened up a credit card or two and had about 5,000 in debt. At that time, he said, this is a one-time, we'll give you a $5,000 loan. We didn't really even expect to get it back, which is fine. Now we're a year and a half later, and he's got about $10,000 in debt. Okay. So there was no strings attached saying, hey, if we give you this money, you have to cut up the card and never use it again. You just went, all right, we'll cover it and keep living your life. Well, he showed us that they were zeroed out. And so we

thought all was good. But I was worried too at the time that, you know, we've been listening to a lot. I mean, if you don't change the habits, right, you're not going to change the outcome. Yeah. So unfortunately, I think his habits have stayed the same. And then as he got buried into it, you know, he's got about four credit cards when he couldn't open another one of those. Now he's got some of these, I don't know, crazy loans that take the money right as soon as the money gets put in from his paycheck. Oh, gosh. Does he have a job? He does have a job. He's got a pretty good wealth paying job. What's he make? Like I said, he makes about $4 4200 a month okay where does he live

he lives though in kind of downtown dallas by himself or with a roommate he does have a roommate now but so his fixed expenses are around 1700 listen about food i don't know if i'm way off base here my kids are young but in my I'm like, you're on your own. You're in your life. You're 23. You have a job. You live by yourself. This is your debt.

Am I way off base here? The people in the audience are shaking their heads saying, no, Jade, you're not way off base. So what makes you want to step in and pay this, Christy? No, no, no, we don't. So here's what he came to us. And he even said, he goes, look, I'm not asking for any money. He goes, but I just don't. But he no, we don't. So here's what he came to us and he even said, he goes, look, I'm not asking for any money. He goes, but I just don't, but he said, I don't know what to do. He goes, what I'm thinking of doing, he's got a car. He goes, I can sell my car. And he looked it up

and even through like a Carvana, he can get about 14 grand. Okay. What's that going to do for him? Well, that'll pay off all the debt. However, then he's going to be kind of in downtown Dallas without a car. Yeah, he needs to be able to do something. Listen, I'm all for downsizing if it makes sense, but he needs to be able to drive something. So maybe the idea is save up some money for the car first, then offload it. I mean, what's his payment every month? He doesn't have a car payment.

Oh, so it's just paid off. So it's not actually increasing his monthly income. Here's my problem with all this, Christy. He's still not changing any habits. Right. Even selling the car. There's some sacrifice, but it's not a habit change. Right.

And that's where he knows, and that's where I struggle looking for advice from y'all. Well, I would go, what are you spending money on? Show me your bank statement and I can help you because I guarantee you there's some sort of spending addiction here. If he has $2,500 in margin every month, because you said his bills are $1,700, he makes $42,000, and then he's still going into debt on top of that, that tells me his lifestyle is out of control.

It is, and he eats out all the time. He likes to go out with friends. So there's your answer. When he says, mom, what do I do? Say, stop spending money. Live on less than you make. Let me do a budget with you. And you're going to stick to this and we can meet once a week and talk through it. And over 90 days, we're going to get him to a place where he's on a budget, living on less than he makes. And I want him to pay this off on his own aggressively. I think he needs some, a 180 transformation where he goes, all right,

I'm not eating out for the next month because I need to feel the pain of my actions. And the truth is, let me just throw this in here because I think it's worth saying, there's different personality types out there. Like some people, they get a hint that they're going in the wrong direction and it's enough for them to change course other of us have to be like beaten into submission it's like i have to hit rock bottom before i realize all right jade it's time to

what you're doing is not working and so he could be one of those people that he's gonna have to hit a bit of a brick wall to go oh i feel it now i get it now i get it um and you as a parent sometimes you just have to sit there and be like all right i'm trying to keep you from this brick wall but there's only so much you can do and i think if you do what george said and he still doesn't get it then you just kind of have to go okay i said my piece i told you all the things you're you're a grown man and you're gonna learn this you give him the plan the the advice, but you don't give him another dollar. And this is going to be difficult. I was more broke than he was at 23. So he's doing better than I am at that age. But it just, like Jade said, people have different thresholds for what it's going to take to change. And right now he's

focusing on shortcuts and he needs to focus on those long-term habits which is i make 4200 i need to make sure i spend less than 4200 right but what about selling this car tomorrow because that's not the solution it's there's no that's these accounts that take it right out of his account so he gets paid on wednesday it'll drop him down to zero but then his rent's due this friday what what what does he have set up what's taking is it just direct bill pay like what when you say that what what are you talking about that he has it coming out of his some kind of um loan system like a cash advance payday loan situation like a chime something like that yeah but there's like four of them. And they're crazy interest on these. They're crazy interest. I mean, so that, I mean,

that's why I think he was finally at his rock bottom when he came and told us because he realizes that with this paycheck, it's going to be zero, but then his rent's due on Friday or Saturday. Now, again, he didn't ask us to pay it, but he said his only solution is to sell the car, you know, and then, then he's going to be in doubt now he can walk to work it's like a 30 minute walk oh my goodness again like it gotta hit hard you know and then he's gonna have to save back up to get a car he's not gonna be

able to do that he's gonna take out a car loan yeah i really don't think selling the car is the solution i want to find more out about because you told me he has ten thousand dollars in credit card debt i want to understand what he's locked because you told me he has $10,000 in credit card debt. I want to understand what he's locked into that's taking money out of his account. Like, real... It's those loans that George was talking about where they just take it out. Just a payday loan? Yeah, like a cash advance payday loan against your future income.

And so it direct, you know, debits it out of your account automatically to pay it. So he needs to get ahead of those first. That would be my A1 to focus on. And if that means he needs to delay. It might be a side hustle. Yeah, side hustling, sell other stuff. If he needs to delay payment, talk to the landlord, whatever it is, talk to the roommate. And if you guys need to help him get out of this tiny bind, you can.

But just know we're not actually helping him change the habits. I want him to feel this where he goes, never again will I put myself in that position. Never again will I use one of these apps. I really think he's 23. I think that he's got a lot of time on his hands because he doesn't have a wife or kids. And I think that he needs to side hustle his butt off to get out of this. I really think mom and dad don't need to reach in with any cash. As Dave would say, he doesn't need to see the inside of a restaurant unless he works there. And so you need to be firm. You sound like an amazing mom, but this is the like come to Jesus conversation saying

you got yourself in a real pickle. I want to help you out, but I'm not going to give you any financial help. What any of the rancid stuff that would be the best for him to read that would really Absolutely. I got just the book for you. I'm going to send you a copy of Breaking Free from Broke. That's my best-selling book I wrote for people in that shoe, because I was in that shoe. I remember it not feeling good, and it's going to show him a path out, and it's going to give him three months

of every dollar as well to get on that budget. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Give us a call at 888-825-5225. Phil's up next in Green Bay, Wisconsin. Phil, welcome to the show. Hey, how's it going, guys? Thanks for taking my call. Absolutely.

How can we help? All right, so my wife and I are on baby step two. We got about 20 grand left. We should be done by March. And we got a baby on the way coming end of May. Oh, wow. Congrats. Is it your first? We're excited. Nope. Second born. I've got a two-year-old. So yeah, we're really excited. Yeah. Okay.

So I'd like to just keep going with the baby steps because we do have $10,000 in savings. So since I'm going to have the debt cleaned up anyway, I mean, we've got the $10,000 for, you know, paying your max out-of-pocket when the baby's born. So you think I'm good there as far as that goes? Yeah, I mean, we talk about stork mode, which is pausing the baby steps when you're in baby steps 1 through 3 for baby. And you're saying, I kind of already did it. We did stack up cash. We have up to our out-of-pocket max, so we shouldn't have any outside expenses. So should I just keep on keeping on? Right. Yeah. I would. I see no problems here. Yeah. I don't see any problems. That's the whole point of it is to have that savings, the maximum that it could possibly cost you, and you've got that there.

And you'll pay it off by March and baby's here in May. So you'll still have two months of debt freedom to stack up even more, right? Right, right. Yeah, about six grand more. Yeah. I put the pedal to the metal. Okay, cool. That's kind of what I was thinking, but I wanted to get your take on it.

Yeah. Most people would have $1,000 saved while doing Baby Step 2. So you're in a situation where it was kind of a little bit out of order. You had some money saved. You didn't put it toward the debt. And so, therefore, we just tell you to keep on. You've already done that work. Stack up cash. Yeah. Okay. All right. Good question.

And then I had one more quick question. I'd heard a couple weeks ago, I heard Jade say something about, there was a question about how much buffer you should have in your checking account, and I think you said like 200 to 300. So I guess what do you mean by that? Do you mean like if we make $8,500 a month rough income, should you have like $8,700 in the checking at all times? What do you mean by that?

The full conversation of that, just to put it into context, is zero-based budgeting doesn't mean $0 in your account. And so a lot of us, we go through on our every dollar budget and we're spending every single dollar, which is a good thing, but we're forgetting to put a line item for a cushion or miscellaneous or something like that. So it's more about your expenses. If you have four grand on expenses, don't just have four grand exactly sitting and checking because you are likely to overdraw incurring fees. So having that cushion and buffer saying, okay, our new floor is really 500 bucks. We're not going to go below 500 and checking. We're going to budget based off of that 4,500. Yeah. And the delineation there is you kind of have to, I mean, it's an honor system there because you know what your income is.

And for people who are in, like, there's a lot of things to filter here. If you're in baby step two, it doesn't make sense to have $1,000 sitting there. Again, your cushion is not your emergency fund. It's just a cushion. And so I like to filter it through. Okay. The same way we kind of filtered through. Okay. When is it okay

to stop stork mode it's when I have enough to cover what it might cost to have this baby it's the same thing with the cushion how much do I need to have there it's it needs to be enough to cover what might happen so what could that really be I don't know your Amazon subscription comes through and you forgot about it and so what is that 120 bucks oh and then grandma's birthday you know you got 25 gift there so this is not something that you're having thousands of dollars there it's for a cushion in case something happens that you forget about you don't want to overdraw something comes out automatically and so in your case yeah you know maybe george says it three or four hundred dollars might be it it might be a little bit less it you know once you're out of debt you might have a different floor where you go,

I don't want to ever have less than $1,000. Then you can go and get crazy. You guys are doing it the right way, man. I just want to ask because I got quite a bit more buffer than a couple hundred. What do you have?

I don't know. We usually have about $10,000 in checking. $10,000 in checking? What are your actual monthly expenses? What actually needs to be debited from your account to pay bills? I'd have to look at the every dollar again because I enter it manually. I'd say around $500. That's a lot.

For a guy, for a family who's in Baby Step 2, that's real money that could have been paying off real good. And you're frugal. Yeah. Yeah. Okay. Are you doing it manually for fun? Is that the way you like to budget? No, no.

I just got a small town bank, so I don't think it'll hook up to my bank. Okay. Yeah. That's all. So the way here is if it's emergency fund savings, put it in another account. Throw it in another account, throw it in a high yield savings account. That's a great place for it.

If it's cushion, if it truly is that couple of hundred bucks of cushion, yeah, keep it in your checking account. That's what it's there for. And if you have anything above and beyond, depending on your baby step, throw it out whatever baby step you're on. That's the entire point of it. So that's a good word. All right.

We're moving on to $10,000 in a checking account. That's a lot. Nathan's in Kansas City. Let's see what Nathan has to say. How can we help? Hey guys, thanks for taking my call. I appreciate it. Sure. What's going on? So I make $134,000 a year. I'm 25 years old. My bonus on top of the $134,000 is based upon quarter earnings, self-pharmaceuticals, that additional, let's say $40,000. So on target earnings is $170,000. I have $110,000 in Roth IRA and 401k Roth money. Um, my expenses are pretty low, about $2,040 for my apartment and $215. I have a company vehicle, so I have to pay $215 a paycheck, but it covers the car,

the maintenance, the gas, the insurance, everything is in the company's name. Right. I, uh, I was soon to be fiance. She's a speech-language pathologist and just got her master's degree from Baylor University. She makes $65,000 a year. So my base salary plus her base salary is about $180,000. She's $156,000 in debt. That's a lot. So, uh-huh. My question to you is, as of right now, she's living at home with her parents, throwing everything she's got. The wedding

is in 10 months. So, by that time, she should only be $100,000 in student loans. My question to you is... Who's paying for the wedding? Our parents are. Got it. Okay. So she pays off $56,000 in 10 months is what you're saying?

It'll be 16 months because she graduated in August. Got you. Okay. Wedding plus. So by the time you're married, let's say she has $100,000? Yes, sir. Okay. And your question? wedding plus so by the time you're married let's say she has a hundred grand yes sir okay and your question what's your question are you there we lost him okay well let's just tell him what to do because we know what to do yeah so the i think he was saying how do i take on her debt as we get married she's gonna have 100k so yeah and you know this is

happening i would begin to sock away this money and it's aggressively piling away money as if i was in debt 100 and if if she's working on paying off the debt he should be also saving up some money treat it as savings right now because they're not actually married it sounds like he's debt-free with an emergency fund based on how he was talking yeah Yeah. So he could continue to, if he's on baby step four, he could continue that, but also save up extra cash if he wanted to. Anything beyond the 15% of his income going to investing, I would be saving up in a high yield savings account, ready to pay off debt. And then when they get married, they rolled a baby step two, he pauses his investing and whatever's left, they pay it off together. with $180,000, they should be out

of debt in less than a year. Oh, yeah. With his incredible income and how he sounds like he's pretty frugal considering his amazing income. Now we're bringing in her income on top of that. So we're talking, I mean, $170,000, he said, was his full comp. Plus her $65,000. I didn't even add her $65,000 in. $235,000 talking 235 with 100 left. We're done. We are done with this in less than a year and we're moving on to building wealth together. Easy peasy. So that's what I'd be doing. I would just stack up as much cash as I can. And I love his mentality. It sounded like he was wanting to go ahead and help her pay this off because it's we. And that's the hardest part. When you get married, it is now our debt. That's right. It's not, well,

I'm helping pay off her debt. It's we got debt to pay off. We got it. It's the hardest part. When you get married, it is now our debt. That's right. It's not, well, I'm helping pay off her debt. It's, we got debt to pay off. We got it. It's a different mentality. Our money, our debt, our wealth. That's it. Period. It's simple, but it's so hard to grasp in a society that says,

I want my independence, Jade. You don't get to tell me. I want my own bank account. Well, don't get married. If you want to live with a roommate just live with a roommate but if sam warshaw tried it you'd never see him again he wouldn't dare he wouldn't dare i wouldn't dare either i hope he likes camping because he'd be sleeping in the backyard with that mentality with bootsy our dog this to the Ramsey show. I'm George Campbell joined by Jade Warshaw. We just launched a brand new tour. Dave Ramsey and Dr. John Deloney are hitting the road and they're coming to a city

near you. It's the money and relationships tour. And there's a fun twist on this event. Tell us you as the audience shape the conversation each night. So is this like a lock in your votes? I think it's like the voice. I think Dave will spin around in a chair. No, I wish that would be amazing. I guess they get to select topics somehow. There's some kind of voting mechanism. So, you know, maybe they'll say,

all right, 40% want budgeting. We're going to talk about budgeting. The next 30% want relationship dynamics. We'll talk about that. Okay. I hope it's high tech and not like a raising of the hands. That's true. We can, I don't, they don't. Again, Jade, they tell me nothing. Here I am. I don't even get to go to these events. You just read the paper. I want to travel on a tour bus with these guys. Louisville, April 21st. They're coming to you. Durham on April 23rd. Atlanta, April 25th.

Phoenix on May 5th. Fort Worth, May 7th. And Kansas City on May 9th. Join Dave Ramsey and Dr. John Deloney live in person. You will laugh. You will learn. You might change your life. Who knows? Go get your tickets to the Money and Relationships Tour, ramsaysolutions.com slash tour,

or you can always click the link in the show notes if you're on YouTube or podcast. Do you want to know what's next? Tell me. Singles Day. Oh, 1111. 1111. Lots of ones.

You could call it single digits. It could have to do with that. Or it could have to do with the fact that if you're single, maybe you have more money to spend and you want to buy people gifts. I don't know. All I know is it's Singles Day. And so we're having a sale today only. You can shop deals for as low as $11. You guessed it.

That's right. Our popular questions for humans Thanksgiving edition. It's here and it's at its lowest price of the season. That's $11. You guessed it. That's right. Our popular questions for humans Thanksgiving edition. It's here and it's at its lowest price of the season. That's $11. George, imagine the joy. Why not make it 11.11? Why not the extra 11 cents? Just like my OCD is a little upset.

$11.11? Yeah. It's 11.11. Everything's 11.11 in the store. All right. That's the processing fee. You know what? We're letting them save even more.

Yeah. 11.11. 11.11. I like that. It's a nice round round number it is not an unlucky number as some of you might think imagine the joy and laughter that you will bring to your holiday gatherings if you buy dr john deloney's questions for humans cards at 11 or you could get other you know bangers we got the total money makeover baby steps millionaires building a non-anxious life by dr john deloney as well and ken coleman's get clear career assessment let me just, let me hang out here with Ken for a moment. Some of you, you've been listening to the show and you're like, man,

I would do the things that they're telling me to do, but I got to get my income up. Get this career assessment so that in the year 2025, you can get your income up and do the things that we're talking about. Okay. You can get it for $11. These deals are only here for today. Today only November 11th because it's 1111. Shop all these gifts and so much more at ramseysolutions.com slash store. Or if you're listening on YouTube or podcast, you can click the link right there in the description. So much going on in that description. Go click around. All right. Lee is in Memphis. How can we help Lee? Hey, good afternoon. Thank you for taking my call. Sure. How can we help? My step-granddaughter, she is nine years old, and she has inherited $8.5 million. Whoa. I'm sorry, Lee. I got to get on the floor to pick up my jaw.

What? Intarnation? $8.5 million? From who? Yes. Her grandfather. Wow. Was this all to her, or is there other money laying around? There is a little bit of extra money laying around.

Wow. Her dad is going to get a little bit of it. When does she get it? As a matter of fact, well, I don't exactly know because he just passed away this past Friday. Oh, wow. This is quite fresh. Okay.

Did you know him? Yeah. So, no, I did not know him. Okay. All I know is he owns some restaurants up in the Sacramento area, and that's how he got so much money. What a legacy. Okay.

Well, what's your question today? Yeah. We'll see if we can even help. I think we need to know what to do with this money, where to put it, should we tell her about it what kind of limitation she would put on it when she turned 18 are you the caretaker the guardian no who is no i'm just her well it would be her mom and her dad my mom and dad are separated her mom her parents are separated did they ask you for advice on how to handle this?

Yes. Who's the executor? Like, who's running all this out? Is that the trustee? Yes, trustee is. And who is that? Her grandparents. Her great-grandfather is the one that passed away,

so it would be her grandparents that are taking care of it. Okay. My guess is there's probably pretty clear stipulations around how this is going to play out. And this is just a guess, and you can tell me if I'm dead wrong, but my guess is that she's not going to just up and get $8.5 million at age 18. It's probably... There's periodic distributions you can set up within the trust to restrict access. Let's say, you know, she turns 18, she's going to get $100,000. She turns 21, she'll get $250,000. So I don't know how it's set up. So there may be things that

you don't get to decide because it's already been decided in the trust. And likely so. As far as anybody knows, it has not been set up yet so how is she getting the money because it's it's in something if there's a trustee there's got to be a trust right but uh as far as far as i know and her parents know all they just know that when the great-grandfather passed away she she was to inherit this money. Now, how it's set up, nobody really knows yet. And you'll find out. That's a big part of it.

My guess is, again, this is a guess, but I'd put money on that she's not going to get a lump sum at age 18. I mean, that would just be folly. That would be detrimental. And, you know, who has access to that is it just in her name and the parents can't touch it yes so that's that there's a lot of homework and questions to be uh you know searched and i think i would start with the trustee and a good estate planning attorney who was involved with this process but in the meantime everybody anybody

who's an adult in that family especially especially the people who have managed their money well, it's you guys' job to teach her from now until when she gets that first dispensation. Yes, nine years to teach her how to handle money so that when she gets some, she doesn't screw it up. Right. So a book like Smart Money, Smart Kids is a great start. We can send that to you if that would be beneficial to start to go okay what can we teach a nine-year-old about money so that when she's 13 she's doing this by 15 she's doing this she gets her first job my goal would be to make as much impact as i can with this money and to protect the granddaughter from the vultures that will inevitably come for her that was the next big thing in the family

because if i'm cousin ricky and i didn't get a dime i'm upset all right cousin boo-boos are going to come out of the woodwork looking for their share i'm entitled to this and well i babysat her when she was seven i feel like i should get a piece and you know i don't know what the parents are like hopefully they've got good heads on their shoulders do they relatively they're not they're not money, but they've relatively got good heads on their shoulders. And she's the only granddaughter. That's why a majority is left to her. There's a fear here, and we see this with lottery winners, that no matter what the amount is, they blow it. Within a few years, it's completely gone. And so if I'm you, I'm going to try to assemble a dream team,

especially a financial advisor and a tax pro, to make sure that we protect this money and use as little of it as possible. That would be my goal until she's much older and much more mature and can decide for herself the best way to do it. Yeah, because there's a piece of this, and I don't want to overstep, but a good man leaves an inheritance to his children's children and so there's a part of this where if you are blessed enough to receive an inheritance you also have to be smart enough and uh thoughtful enough to say and I should be leaving

a portion of this to my generation as well so there should never be a situation of all right we made it we hit it big now you know and spend it all. And then it's like, wow, you just cut the chain right there. We see no matter what the amount is, Lee, that by the second or third generation, that money's gone. Right. And, you know, we can't control the future and what the next generation does, but we can do our best to raise them up to where they are able to handle the weight of this amount of money. And as far as investing it, you know, good mutual funds, it's going to double every seven years.

That's right. And so, you know, putting in mutual funds and real estate, that would be the only two things I would be doing with this amount of money other than wild generosity as well. So thank you for calling in. This is a big question. We don't have all the answers, but I hope that homework helps you get to the right next step and that you can protect this little girl and hopefully she can be a philanthropist one day. That would be incredible. That would be. Change your community, change the world. It's a lot of money. That kind of money. Doubling every seven years?

When she's 60, this could be life-changing for a lot of people. This is The Ramsey Show. Welcome back to The Ramsey Show. Our scripture of the day, Proverbs 426. Watch the path of your feet and all your ways will be established. Lily Tomlin said, the road to success is always under construction. That's quippy. All right. All right. All right. Listen, I'm wondering about the first version of that verse. Watch the path of your feet. Watch where you're going. Okay. I don't know. I don't know what version that one is. I don't know. We need a pastor to call in now. Help us break that down. Break it down, pastor. I'm probably wrong. I guarantee it. All right, let's go. All right. Kaylin is up next in Jacksonville, Florida. Kaylin, how can we help? Hi. Sorry, I can't add anything to what that

means. So I'm in the same boat as you guys right now. We feel better. We're all human. Yeah, exactly. So my question is also an inheritance question. Um, my dad co-owns a cabin with his five siblings and, um, he's told me that the plan to pass it down to my generation is that each person's share will just go to their heirs. So I'm my dad's sole heir. So like I will get his one fifth stake in the cabin. Um, but my uncle has like four daughters so they will divide that his one-fifth stake amongst the four of them so there's gonna be like 20 people owning this for the next generation oh gosh well so that's like and i know it's not my like i can't dictate anything that they want to do i'm just trying to figure out is there a better way to go about this because

the other thing that they've said is um that my dad and his siblings have said is they don't want it to be that anyone can like if you want out of the cabin you can't sell your share you just basically are giving it back to like the rest of the family okay so it becomes you know one one fourth instead of a fifth if one person opts out. Yeah, yeah, exactly. And so I know, like, hopefully this is way in the future that anything would happen with this. Um, but I just don't know. Like, I think, you know, we're all probably in different financial situations. Some people might not want anything to do with the cabin. Um, I just, I wonder about like the ongoing, it's minimally, minimally, or sorry, the costs

are minimal to care for it. But you know, like the taxes and there's like a lot of, you know, repair work and stuff like that to be done. So I didn't know if you guys had any ideas about a different way to go about this. I mean, literally during the break, George and I were talking about this type of situation. And we were saying like, these calls are always so frustrating because so many people are involved. And it almost always, always inevitably ends with, you know, my brother's been living in there rent free, and how do we get him out? And, you know, we all could use the money. And the way you're describing this, like this has the potential to multiply owners very, very quickly.

And get messy, like a timeshare. They're like, well, I only went once this year, so I shouldn't have to pay my share of property taxes. Y'all went a whole bunch more than me. And so we need very clear stipulations in the will or wherever this is held of all the different pieces of it. It might be that we say we're going to force the sale of this once all the siblings pass.

Or if they want to keep it in the family, just gift it to one person. And that's just that person's inheritance and the other person, the other people get, you know, other assets. But I think when you're dividing it is in this case over more than five people, you know, a fifth is divided amongst four different. I mean, that just gets wild. Do you guys all use it together? How big is this cabin?

It is not big, and it is like a true cabin. Like, it's... So this is not like a special piece of property other than sentimental value. Yeah, exactly. What's it worth?

I would say that that's right. You know, I don't know what it would be worth. I don't think it would be worth much because, like I said, it's, you know, we don't have running water and we don't have. So this is like 20 grand.

Are we talking? It's maybe more than that. For the land that it's on? Like where it is. Yeah. The hard part is this isn't, it's not yours and it's not yours to give or even to decide what to do with it. So us telling you this, I mean, I don't know if you take this to your your grandfather and say here's what

we are or take to your dad and say here's what we all talked about um i'd have him work with an estate planning attorney who can give him some ideas of what they've done in the past what's worked what doesn't work some you know minds to avoid but really this it's going to only get messier with each generation and it doesn't feel special enough to like maintain you know the this level of intensity toward it unless i like the idea of saying hey if you opt out you're not getting anything if you want to opt out of your share which at that point why even opt out just never use the cabin don't touch it yeah i guess your name's on it yeah but you know and i don't know what is there a limit to how many people can be on a deed it feels like it'd

be real complicated from a real estate standpoint to have 20 people on there. You know what? I'm like, leave it to the person who has the biggest sentimental connection, who you know is going to keep it and use it, and that's their gift. Like, why? I don't know. It's not mine, though. If this was a $5 million property, I'd feel differently. But it's a cabin that won't sell for much other than land

on it. And how often do you guys use it in your family? Well, so I live across the country. We're going to move back hopefully in a couple of years, but like all together, we probably go up once a year, like for 4th of July. my dad and his siblings are up there a lot more. Okay. And I'm guessing there's one sibling that this is really sentimental to them. They're the ones that are there the most? Well, I think with my dad's generation, I mean, there's maybe one who uses it less, but the other four are pretty dedicated to it. Okay. I mean, I would talk to dad and say, Dad, this is only going to get more complicated. Here's how this is all going to split up.

We need to figure out a way to avoid relational tension and chaos. Yeah. And honestly, if he doesn't do that, I might opt out. I'd be like, well, just... I would opt out. I think I don't want to get caught up in that. That's, yeah, that's what my mom said. And I'm sure you can still visit whenever you want.

Yeah. Yeah. All right, great. Well, still visit whenever you want. Yeah. Yeah. All right, great. Thank you guys so much. I really appreciate it. That's a wild situation right there. You ever stayed in a cabin like that? No running water?

Look at me, George. No, you're a city slicker. I wouldn't say a city slicker, but I like running water. I just like my indoor plumbing is all I'm saying. I've done it. I could survive about two days out there. Really? I do pretty good. Have you seen that

show on Netflix, Outlast? No. Similar? These people are living in the wilderness. Yeah, survival. Good for them. I'm impressed. Christy's in Houston to finish us off here. Christy, what's going on? Christy? Christy.

We were so close. Oh, there we go. How can we were so close. Can you hear me? Oh, there we go. Oh, you're there. Yay. Yeah. How can we help? Get right to your question. I mean, sir, so I have been a foster parent for almost three years,

and my goal was just to foster and not adopt, but God had different plans. So I will be adopting them. They are 10 through 15, and when you adopt, the siphon goes down. It gets cut a little bit more than in half. And I'm a little bit nervous because all three braces and the Medicaid does not cover the braces. They say that it is considered cosmetic. And braces are pretty expensive. I know you say never to borrow money.

Is it okay to borrow money when it's for like a medical reason? I wouldn't borrow money, especially if they're telling you that it's cosmetic and that it's not necessarily medical. So the state says that all braces are cosmetic because they don't want to pay for it. So Medicaid will not pay for braces. They need them. I mean, yes, they can talk and eat their food. What are they going to cost? It's like $8,000 for the two of them.

And then one of them will be even more because she's got to have surgery and have certain teeth pulled. And they won't even cover pulling those teeth because her teeth are overcrowded because they said she can eat and speak. Oh, my God. As long as they can eat and speak, it, definitely get a second opinion on that because I wore braces and I went to several different dentists. The first dentist said I had to pull four teeth. No, I don't want to do that. Then I go to another dentist. They said, you only have to pull two teeth. Then I went to another dentist. They said, you don't need to pull any teeth. We can just move them around. You have enough space. So make sure you're getting lots of second opinions and in third and fourth opinions and let me just put out here because this is just the what the family i come from if the kids don't

get braces they will survive and when i was growing up probably a doctor a dentist would have looked at my mouth and said these kids she needs braces but my kid my parents couldn't afford braces or they weren't going to spend money on that. And here I am just fine in life. You can do them later in life. The ones that are true, like this is an emergency, I would make sure to do anything I can to attempt to cash flow that over time. The other ones that aren't an emergency, we'll get to you when we can. So that's what I'd be doing on top of trying to get income up. And find a dentist who's going to shoot you straight because some dentists will act like everything's an emergency and it's not. And then others will understand what's going on and they'll shoot you straight. And so make sure you find somebody like that. And I know like Dave, I know that you say

not to worry about what other people think. How do you, how do you help the kids get that? Because like they get made fun of because of their, how do I help them? Well, you show them that to have a self-esteem and confidence that can take down the bullies. I mean, I look them? Well, you show them that, to have a self-esteem and confidence that can take down the bullies. I mean, look at my face. I got issues, but I'm out here. We're doing it. Thanks for the call.

This is The Ramsey Show. We'll see you next time.