The Ramsey Show - App - "I've Been Doing OnlyFans For 3 Years And Want Out"

Episode Date: January 20, 2026

❓⁠⁠⁠Have a money question? Ask Ramsey is here to help!⁠⁠⁠ George Kamel and Rachel Cruze answer your questions and discuss: "I'm burnt out from doing OnlyFans, how do I get out of this?" "My mom is resentful that they are still paying my student loans. Should I take on the payments?" "Should I buy a house to flip in order to pay off $40,000 of debt?" "What is extendable term-life insurance?" "My husband doesn't want to pay off our debt even though we have the money to do so". Next Steps: ✔️⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take this short survey.⁠⁠⁠⁠⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or⁠⁠⁠⁠⁠⁠ ⁠send us an email⁠⁠⁠⁠⁠⁠. 💵 ⁠⁠Think you're good with money? Take our free quiz!⁠⁠ 📲 ⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠ 🏠 ⁠Get organized and prepared to buy or sell a home⁠⁠⁠ 💻 ⁠Need help with your taxes? See who we trust.⁠ Connect With Our Sponsors: Get 10% off your first month of ⁠⁠⁠⁠⁠⁠BetterHelp⁠⁠⁠⁠⁠⁠ Go to ⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠ to switch today! Go to⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Casper Sleep⁠⁠⁠⁠⁠⁠ and use promo code RAMSEY to learn more If you want your car to keep going and going, trust ⁠⁠⁠⁠⁠⁠Christian Brothers Automotive⁠⁠⁠⁠⁠⁠. Find a local shop and get an exclusive Ramsey discount of 10% off Learn more about⁠⁠⁠⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠⁠⁠⁠ Get started today with⁠⁠⁠⁠⁠⁠ Churchill Mortgage⁠⁠⁠⁠⁠⁠ Get 20% off when you join ⁠⁠⁠⁠⁠⁠DeleteMe⁠⁠⁠⁠⁠⁠ Go to⁠⁠⁠⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠⁠⁠⁠ for an exclusive account bundle! Debt collectors hassling you? Take back control of your life at ⁠⁠⁠⁠⁠⁠Guardian Litigation Group⁠⁠⁠⁠⁠⁠ Find top health insurance plans at ⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠ Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠ Visit⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠ today to learn more Get started with ⁠⁠⁠⁠⁠⁠YRefy⁠⁠⁠⁠⁠⁠ or call 844-2-RAMSEY Visit⁠⁠⁠⁠⁠⁠ Zander Insurance⁠⁠⁠⁠⁠⁠ for your free instant quote today! Explore more from Ramsey Network: 💸 ⁠⁠⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠⁠⁠ 🧠 ⁠⁠⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠⁠⁠ 💡 ⁠⁠⁠⁠⁠⁠The Rachel Cruze Show⁠⁠⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠⁠⁠George Kamel⁠⁠⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠⁠

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. I'm George Camel, joined by my co-host, Rachel Cruz, also my co-host on Smart Money Happy Hour, which you can get on YouTube or podcast. You call us, AAA 825-5-225, and we'll help you take the right next step for your money and your life. Daisy kicks us off in Phoenix. Daisy, welcome to the show. Hey there, it's Daisy, and I've just been, I'm just in a little bit of, not with only fans. Oh. Yeah. I've been doing it for about three years now, and as of recently I've fallen pregnant

and would like to, you know, become a stay-at-home mom from that. Okay, so there's multiple pieces here. You've been doing this for three years, and you want out only now because you're trying to start a family? No, I have been wanting it out for a while now, but as of recently, I found out I'm pregnant, so it's like... This just gave you the kickstart to go. All right. Okay, Daisy, how old are you?

I'm 21. You're 21, okay. And who is the father of the baby? Is it someone you're dating? Is it... Are you married? Yeah. It's my boyfriend.

We've been together for about two and a half years. years now. Okay. Wonderful. Okay. And what is your current income, just you? Um, my current income is honestly about $1,000 a month right now because my boyfriend, he's the one that takes care of everything. Okay. How much does he make? He makes about $4,000. All right. And you guys have, you've combined finances already? Yes. Okay. And Daisy, I mean, is the $1,000 coming from Onlyfans? That's your income? Yes, it is. Okay. Okay. Okay. Well, the positive thing is you could replace that in a heartbeat doing anything else, right? I mean, it's so.

If he gets a $10,000 raise, he effectively replaced her income. Mm-hmm. What does he do for work? Him or you, Daisy. I mean, just for the time being, though. Do you know what I'm saying? Yeah. How far along are you?

I just found out last week, so I'm about five weeks. Oh, congrats. Okay, so early on. Thank you. That's good. How you feeling? Oh, I'm feeling great. Oh, you're good.

We've been trying for months now, so. Okay. Rachel meant like morning sickness and stuff. I meant like, yeah, the first trimester is always tough. Actually, none of that. Luckily, thankfully. Good. Okay.

So, Daisy, yeah. I mean, so to be able to replace this, I mean, you could do this, you know, doing Uber Eats, you know what I mean, a thousand bucks a month. 250 a week. Could be found. Yeah, yeah, it could be found super easy, which I'm, I'm thankful for because sometimes when people are looking to replace their income, and especially when you're in this like moral dilemma of how you're making your money.

Right. Sometimes you're trying to replace like 10,000 a month. Yeah, yeah, yeah. Like a crazy amount that would be hard to replace. This is easy. Yeah. So yeah. And luckily we're not in debt either at all.

So good. So no debt. You guys have anything in savings? We did have savings. But unfortunately that was taken from taxes and just a bunch of life things. So no, we don't have any emergency savings right now. But, however, we do have $20,000 savings from my mother. From your mother?

Yes, my mom. She's kept a savings for me. Okay. And do you have access to it now? Is this like a gift that she's given you? It's whenever, like, we're ready for a house, ready for marriage, any big things like that. Okay. Well, speaking of marriage, when is that going to come into the picture?

Hopefully soon. Hopefully soon. Like before the baby's here? Oh, yes. Ring possibly yes. Marriage, possibly no, because I'm under my mom's insurance right now. Okay, and you would lose that when you get married? I don't exactly know, but I'd have to recheck.

No, I think you can still, I mean, yeah, because your husband, if he has a benefit of insurance, I think he can opt in as an individual, and if you're under 25, I think you can still, right? Yeah. I would not get married because you think you may not have mom's insurance. So if I'm in your shoes, I'm going, hey, courthouse wedding. The time to do all this in order is long gone. Let's at least speed things up here. And so if he's the one, he's going to be the father, he's going to be in this baby's life. You're committed to each other. Let's go ahead and get married. We can have a party later on down the road. And I agree with that completely. Yeah. And that way, Daisy, you guys can start to combine your lives even more. more, right? I mean, it's not only from a legal standpoint when you get married, but also from a financial, because I would not be combining money with him until you guys are married. And so there does

have to be, because you are living together, you're going to have to figure out like a pay schedule, right, of, okay, he's going to be in charge of these things, I'm in charge of this, you know, whatever it looks like to run the household of how you guys are. But yeah, there's something about that marriage. And again, it is if he's the one. And I mean, he's going to be in your life. I mean, I assume regardless because you guys have a kid together, you know. But yeah, I think, yeah, I think stopping the income source right now from the only fans because... Are you done, done, like account shut down? No, I don't have the account shut down.

I've just been running it, but every time I go do it, I just have a complete breakdown and just cry about how much I don't want to do it. Wow. Yeah, Daisy, for your, I mean, for your sake. girl like it's it's not worth the money and your your mental health your emotional health your relationship there's there's there's something trapped in there for you that would be freed up from you I mean seriously when that gets closed down there is something a dignity that gets placed back into you and who you are and so this is not your identity it never was and I know it's it's hard to separate

that because this is what you've been doing and you've been getting attention and affirmation and money from this but this is not not healthy in any way, shape, or form. Correct, yes. And so I would shut it down today as a line in the sand to yourself. Does your boyfriend know about it? Yes, he's known about it, and we've just kind of made a goal to kind of push through it because we actually both to do it.

So he's okay with it? He's involved? We both do it. Oh, boy. Is that where he's making his money? No, no, no. He's an electrical apprentice, and that's where he makes his most money. That's an honorable position. Can he make more doing that? When is he done with the apprenticeship?

He's about to come up on his two years this year. Okay, like before the baby's here, he'll be done and have an upgrade and income? Possibly not. I don't think so, but we have been looking for possibly finding him a new electrical job, yes. Okay. And what are your household expenses right now? Have you guys actually sat down, done the math, you know kind of what it's going to take to run your house? Yes, correct. We kind of live in an apartment right now, and we're hoping to actually move into a house, though. Like rent a house or buy a house?

Depending on what the cards play out. Well, I can tell you the cards right now, you guys don't have the money to buy a house. That 20 grand is not down payment money. That is emergency fund money, especially with a baby on the way. We are not going to touch that. Okay. So, Daisy, you've got some hard choice. to make some hard conversations, but you can do this. If you want to be a stay-at-home mom,

you can do this. We've got to figure out how to live on his income alone, and the hardest part is just detaching from this life that you guys have been living. Correct. Yes, and I'd really love to, because I mean, like, you know, especially becoming parents, you know, you don't want that behind you. And Daisy, listen to your gut. Something's telling you to get out. And I, and I would, I would do some deep marriage premarital counseling work, because I don't like the guy you're marrying is okay with all of this either. I don't like that. That gives me serious pause. I'd find a good community, a good church home, and hopefully you can detach from this life you've been living. Best of luck. Shane is in Vegas up next. What's going on, Shane?

Hey, y'all. Thanks for having me on. It's an honor to be speaking to you today. Thank you. How can we help today? Yeah, so favorite topic for you guys, money and family. Long time ago when I was 18 took out student loans with the agreement with my father. that they would pay until the balance is zero. 35 now. Balance is still in the mid-70s to mid-70,000. Oh, my gosh. What was it originally?

Yeah. It was over 120, so they've been paying it down. They've been making minimum payments. Well, that's a problem. I agree with you. The issue I'm really having is that my dad is, he's totally fine paying it. He still makes the payments, but my mother constantly brings up the fact that they are paying for my student loans.

It feels like there's strings attached when at the very beginning there were never those agreements. And there was a clear agreement, hey, we're going to pay these off. We can't, we don't have the money to cover it, but take out the loan and we'll cover it. Is it in your name or their name or both? They're in my name. They have the money. I mean, right now they can snap their fingers and pay it off. But the way my father sees it is he can make more money in the stock market.

So he just chooses to, are your parents still together? Yeah, they're still together. Okay. Are you married? financially. I am married, yes. Okay. So when you guys are around your parents, how often is that? How often do you all see them?

I mean, we live on separate sides of the country, so once, twice a year. But even in some phone calls, the topic still comes up. And what does she say? Like, what are her comments? A lot of the times it's like revolved around, like, oh, you just bought a truck. Like, that could have gone to the student loans or you took a nice vacation.

Like, why is that money? But, you know, going back to what I said, that was never part of the agreement, so I'd never feel obligated. But then, you know, my father, he's like, yeah, I don't care. I'm still paying them. It's whatever. So, rather frustrating. Yeah. Do you push back on her at all?

I do. I try to keep it, you know, calm and light. But my wife is really the one that gets frustrated by it. That's why I was, as if you were married, because I feel like I would be like, oh, my gosh. See, this is the issue with the student loan stuff is these parents are, like, Sure, go take out whatever you want to go take out. And you're 18, Shane, right? And sure, you sign it.

I mean, yeah, you're 18, you're an adult. So yes, you have some responsibility in the sense of like you chose to make that decision. But you also had fully functioning adults in your life that said, yes, and we would pay for this. So I almost would have a very kind, but a very clear conversation with her around the boundaries of these comments. Because it starts to erode the relationship. I'm guessing it already has. doesn't sound like I mean that's why you're calling right

this is your yeah a lot of tension yes okay so yeah I mean I would I would tell her and I and I would be very kind but I'd be very very clear and just and to be honest with her and say you know mom

there have been multiple comments made I mean you could give her some examples and the truth is when I was 18 you all told me that you would take them out and you would pay for this and I'm holding you all to that word I mean, that's what was said. If something has changed and you and dad agree on a different plan,

I'm happy to have a discussion with you if that's the case. But that's not been the discussion. And so I need you to stop making these comments. They're passive aggressive and it's eroding our relationship. Can you do that, mom? And at that point, that's up to her. She's the adult that gets to make the decision if she wants to continue a very healthy relationship. Listen, I don't control y'all's money.

That's your decision. So this is now a marital problem they have of mom disagrees with how dad is handling a debt they agreed to pay. That's a good point too. So legally, yes, it's yours. They could stop paying today and it's going to come to you. Now, they haven't done that yet, and I'm glad that they're not intentionally trying to tank your life, but this might be another conversation with dad of saying, hey, listen, you have the money. I don't care how much you could make in the freaking stock market. This is eroding our relationship, which is way more important than some spread you could make. And so you can try to also influence him to, you know, sort of, this would solve everything,

wouldn't it? If dad just wrote the check, paid him off and went, dude, it's been 17 years. I don't know. Would your mom be mad at that? Yeah. Who knows? So she just doesn't want to even use any of their money anymore to pay for these loans? I'm sorry, can you say that again? She doesn't want any of their money to be used to pay for any more of your student loans. She's just done with this whole thing. It's hard to say. I know they're financially well off. Like they're, my mom is retired. My dad, he makes fairly decent living. And I know what their nest egg is and liquid and retirement. So I know like, this is not a big part of their world. It's not a big part of their world. And, you know, my wife and I, we make decent money.

So, like, the payment could, it would be totally fine for us to take on. It's just, like, I need to know if I need to start paying my $80,000. Do you guys have the money to write a check and pay this off today? Um, not in, like, liquid assets. I mean, uh, I could save a couple more months and it would be fine. But then it would just wipe out all of our liquid investments. So my wife doesn't want to do that one.

So it would probably just be. What I'm hearing is either way, someone's going to be angry. And so that's the thing we have to make peace with is who do we want to upset? And the truth is you can't control how they react or respond. All you can do is be a person of integrity and have the conversation. That's fair. So I was just saying if you wanted to, this is the other option, is you write a check and say, mom, I don't want this to come between us and destroy a relationship.

Here's the freaking check to pay off the loans. Yeah, that's the other. Yeah, it kind of pisses me off those because, yeah, because they've been, they freaking have had this for almost 20 years. Yes, the immaturity is on mom's side at this point. And dads for basically agreeing to pay it. And I'm sure they are exhausted, but yes, it's been two decades, man. When your, when your 18 year old wants to go and take out $120,000, you say no.

But no, they didn't. They said, yes, we will, we will do this and take this on. And so they're the ones that have been dragging their feet. It's not his, it's not your fault. I mean, you know what I mean to that degree? Because there was a deal. There was a deal. that was made.

Yeah. So I'm sorry. That's so frustrating. But I would. I mean, for your wife's sake, for your sake to like be in her presence and that passive aggressive comments constantly. Yeah.

I would, yeah, I would be clear and draw a boundary there. But again, kind but clear. And there might be in between. Yeah, there might be a compromise where you go, hey, listen, here's how much I'm willing to chip in to just.

And you're really trying to. bail the parents out, but they're fine. If they were on food stamps, like, I get that. No, they have the ability to. And so that's where I go, this is really between mom and dad, because they have a disagreement. Mom should be mad at dad, not the son. Because dad's been dragging his feet for 17 years. Can I remind you? No, they both have. Goodness gracious. And clearly mom doesn't have a vote when it comes to finances. I feel like we're getting more and more of these. I don't know why. I feel like we hear more and more parents. Resentment guilt calls. To adult children with

the student loan debacle in the mix of someone said they were going to pay, they're not paying, or they're paying and they're mad, but they're asking me for money again. This is the original deal. Yeah. I mean, it's just, it's so much. So can we talk about our parameters around family and money? I think it's a good reminder for everyone listening here, which is this, never loan money to family or friends. If you want to give money, make it a gift. And please don't go into debt for said gift. That's not really a gift. We've that with like, well, mom got me a car, has a loan on it. And so I, you know, I got to pay it. But she got me the car. Right. Yes. And so it's fine if you want to get money. And if the giving

ends up becoming a pattern of enabling bad behavior or irresponsibility, that's another stop. Right. We're not doing that. But the gets, because I mean, part of the show is about changing your family tree, right? Getting yourself in a position where you can change your life. You change your family's life. You change others' lives. Like the ripple effect is beautiful and wonderful. And we want that to be, but we also want the people on the other side that are receiving it to be in a healthy good spot themselves to have their own dignity as adults. So that and then the other thing, George, no co-signing. Ever. Please, please, no co-signing. We got a grandma who co-signed. That was last week on the show, I think.

I know. She was like 92. And this guy's like, yeah, my grandma co-signed. I was like, poor grandmother. He's broke. He's probably not going to be able to make the payment. Yeah, they require a co-signer because nobody trusts you to pay it off. And so what happens is you end up not paying it off and they go after poor grandma who thought you were going to make the payments perfectly. And she was just more of a, you know, more of it just like a nice thing. I'll sign it, but I won't ever have to deal with it. Right, right. Never think that.

It will destroy a relationship and cause resentment. And so it's so much easier to just either put the boundary up and to say no or give a one-time gift if it's going to be a blessing and you're not enabling. Not one-time though. You think just once for the rest of their love. Well, not like an ongoing, hey, I'm going to give you a thousand bucks. every month forever. The pattern. Yes. You know what I mean? If you reward bad behavior, that's when it turns into entitlement.

Agreed. I'm going to come back to Bank of Dad. Why would I go work harder? That's silly. This is The Ramsey Show. Trina is in Florida up next. Trina, welcome to the Ramsey Show. How can we help today? Hi. Hi. I'm so excited, you guys. We're excited as well. I'm glad you called Trina. We're excited to talk to you.

Okay, guys. I'm having this, like, issue. I always said I wanted to retire, but I'm almost 40. I am almost 40. Wow. It's an aggressive plan. My dad did it twice before he turned 40, and I'm just like, I got to get my husband. Hold on, he retired twice. What do you mean?

So he retired from the city, and then he retired from boxing. So he, like, got to retire twice before he was 40. You said boxing? Yeah. Like he was a professional boxer? Yeah, he was like semi-pro. That's pretty cool. That's legit.

Did he have to do it to earn money? Yes. Okay, so he didn't really like get to retire. He was semi-retired while semi-pro and then fully retired. Yeah. Okay. I'm just trying to relieve some pressure for you of like the reality. Is that where this idea came from then?

You're like, I want to be like dad. I want to retire by 40? Well, it inspired me, yes. Okay. I've always been like an overachiever. I'm like, yeah, an aggressive goal, you know, of something big that you're like, I want to work for that. I get that. Okay, okay.

Perfect. So, yeah, how can we help? So I ran into a financial situation. It's not a lot of debt. It's like $44,000 worth of debt and I make about $60. So I want to pay this debt off. What kind of debt is it? It's like $20,000 in a car, like $4,000.

thousand about in personal loans and like two thousand in my son's private school that I still owe oh credit card it's like 16,000 in credit cards. This doesn't feel like a recipe to early retirement. Like if I was trying to retire early, I'd probably go, hey, I'm going to make sure I don't owe people money and have money saved on top of that. And, um, so how long, how long has this been floating around? How long have you had this debt for? Um, so I filed a bankruptcy about two years ago. Um, this was when all of this started. So all of this debt was post bankruptcy or did it get, were you on a payment plan? What happened?

Um, so actually, the only debt that I don't take, like, I don't have to pay back, um, one of the personal loans, one of the credit cards and yeah because of the bankruptcy because of the bankruptcy. An issue is that I want to keep the relationship with that bank and I want to pay them their money back because I never wanted to put the items in bankruptcy. I was still paying it but they said that because I filed a chapter 7 that they had to put it What caused you to file bankruptcy two years ago? What were your numbers then? So then I was making about, it kind of flip-flopped.

I was making about 40, then I went back to 60. Then I think before that I made 80. So what happened was I was working for this company. I had moved. I was working for this company. Basically, I decided I wanted to open up my own company because we're under government contracts, we have a certain criteria that we have to meet.

When I said that I wanted to open up my company, the government's agency said that they had to take away all my clients. So basically I went from having, you know, a decent income to like having nothing the next day. Okay. And it was all because of this new business. Yes. So the new business never took off, but you took out loans to?

float the business for a bit and that's what caused the bankruptcy? No, so when they took one client, it took a while. It took about a year and a half for me to open up and to get clients. So I started having clients in September. I had like maybe 15. Now I have like 25. And that's all I need financially. Okay, yes.

Katrina, what caused the bankruptcy two years ago? Was it consumer debt? Was it business loans? What was it? So I had these student loans and I put them in an after-fair proceeding where I filed bankruptcy to get rid of the student loans while I was waiting for my agency to open. When the agency didn't take off right away, I started using my kids' college funds, my retirement. I started pulling everything out. Okay.

And so I started lifting and I started working with another company. But that company just didn't pay that much. Gotcha. Okay. So, Trina, I have a new goal for you. I think instead of retiring at 40, we are going to learn to live debt free. Which I usually do. Trina.

So far, it's been everyone else's fault and the government took your clients away. No, no. I'm not saying she's pushing on everyone's public. like, no, Trina, you kind of be able to say, like, yes, I'm used to living with debt, though, from student loans to where you are now, there's a pattern of you using debt. Can we say yes to that? Well, that makes sense, yeah. I wasn't looking at it. Sorry. No, you're great. No, I just want to make sure we're tracking. So I think in order to have a completely new mindset with money from where you've been of saying I'm living completely debt-free, debt's not an option.

debt is not an option. I'm going to save up and pay for things. I'm not going to be making unwise decisions about purchases and pulling money out of retirement or kids college or investments because that's not wise, right? That stuff is all for the future and I'm going to learn to live within my income and my means. And that means making hard decisions about lifestyle and about, you know, yeah, I mean, life choices and everything. And so, I mean, genuinely, I would make that the goal. I would make an aggressive goal to get out of debt in, I don't know what, two years, like make a, make a goal to, aggressive goal to get out of debt to save up a fully funded emergency fund. And freeze your credit.

That way it stops. Two and a half years is your plan? Oh, perfect. Okay. Okay, that's so great. We never even got to your question, Trina. I'm sorry. There's so much details to jump into.

What is your actual question we can help you with? Well, I wanted to basically flip this piece of property. They have a piece of land that's for sale. It hasn't been impacted it. I wanted to do like a creative finance to see if I can. No, no, we're off the path. Remember? We're on 10 seconds ago.

We're the new goal. Remember? Creative financing just means, hey, I'm going to do stupid. That's fair. That's fair. That was her question. That's fair. We made a new goal 10 seconds ago.

Yeah, okay. So how would you answer? How would you answer this now? Trina, answer your own question with your new goals in mind. So I am going to stick to my two and a half year budget that literally just looks like this month. Yes. And that's what we're talking about, Trina. See?

Be debt free after that. And then maybe save the money instead of getting out. Yes. Look at you. And how old are you, Trina? I'm 38. 38. Okay. Can I tell you if you don't retire by 40, you're not a failure.

I promise you that. If you don't retire by 60, you're not a failure. How about this? You're not a failure, period. There you go. That's the most encouraging thing I've said today. Rachel can attest to that. But the truth is, we have these aggressive goals and we need to create actions to get there and we can't hold ourselves to these goals because life is going to happen. And so it's okay to pivot the dream. But one thing we can't do is pivot and going backwards. and rob our future, rob our children's future. You are worth more than that. And so from today forward, you're a person who doesn't go into debt, who doesn't owe people money. And all your decisions can be based off of that value system, because that brings you freedom, Trina. There's no shortcut.

There's no like, okay, I can do this creative financing here and do this. And I'll make 20 grand just like that. And look at that. That doesn't work. That's not the real world. It is hard work. It is the long game. It is a marathon. It's not a sprint and it's just a different mindset you have to be in to get true financial freedom and true control over your money and so you do have to shift the way you've been doing it train if you keep doing what you've been doing you're going to keep getting what you've been getting and so um yeah I'm glad that trina uh answered her own question we got there we're not going to finance a piece of land to build a home to flip it uh we are going to work on getting out of debt de risk your life debt equals

risk more debt equals more risk and so this creative financing is just adding more risk to the puzzle and so be free yeah that's your best path to an early retirement you're awesome trina thanks for thanks for calling if you're working the baby steps the best and fastest way to do it is by using every dollar it's more than just our budgeting app now the plan is built right in you can track your progress plus get personalized recommendations and coaching for your situation that will help you free up more money and work the plan even faster it's like having one of us walking with you every day 24-7, showing you the next right step and holding you accountable. So start every dollar for free. You can download it in the app store or Google Play. Miriam is in New York City up next.

Miriam, how can we help? Hi, it's a pleasure to speak to both of you. Thank you for taking my call. Sure. My question is about life insurance. We pushed off getting life insurance way too long, and I thought it would pretty straightforward. I wanted to call that and insurance. My husband knew two people who kept bugging him that they wanted to sell him life insurance. So I said, okay, we need a 20-year term. And I think we got a little screwed by them because we ended up getting a policy, which they said it was 20-year, but it's expendable 20-year. Oh. So after the 20 years, you can re-up at the current premiums for your age, which is going to be two to five times higher probably? Something like that, but I think when we got the package, which was after, you know, we have 30 days to cancel or whatever, but it's past the 30 days. Either way, I'm going to replace it. But it goes up even before the 20 years, I think. Like there's a whole chart. It's hard to understand. I'm not really sure.

Who'd you get it through? What company? Northwestern? Oh, boy. Okay. You've said enough, Miriam. I would cancel yesterday. It's not a scam, and they're a company who does all kinds of financial products, but likely what happens. Here's what I've seen.

It's mostly young guys right out of college who want some sales experience, and they sell the scummiest life insurance products to unsuspecting victims like their family and friends. Right. That's what I've seen. That's accurate. So I'm not talking about company. Like, yep, that's exactly what happened. But that's my brother.

Same thing happened to my own brother, right? Some guy from college reaches out, hey, man, how you doing? And so I would get out of this and I would contact our friends at Zander because they're not going to sell you extendable term life insurance. Term life insurance by definition. I did already reach out to Zander. Okay. So I just wanted to know, like, basically, should I take 20 years?

Should I take 30 year? They said that Dave recommends a child writer, which I never heard on the show. Hold on, hold on. Northwestern said Dave recommends a child. No, no, no, no, no. Zander, for what reason? I don't know. I have four kids. That's why. I never heard it from him. That's why I called because I want that underhand. And then somebody else, I'm getting very overwhelmed, but somebody else told me that we should really do a disability rider.

I don't know. There's a lot of riders. And when you hear the word writer, just think gimmick. And so all you need is term life insurance. 20 years should be enough. And here's how to think about it. in 20 years time, you should be self-insured. If you follow the Ramsey plan, you become debt-free, stay debt-free, you have the emergency fund, you invest in retirement for 20 years, you pay the house off in 15 years, if you follow our parameters of a 15-year mortgage, and all of a sudden, you don't need the life insurance anymore once the term expires. So that's the goal.

And if you need 25 years to get there, then you get 25. Well, and that's what I'm asking. We're in Baby Step 3B. We live in New York, so that's taking a while. I have four kids, one on the way, and I'm not done. My husband and I are both very large families. So I'm thinking, my kids are not going to be out of the house in 20 years. Should I go longer?

Should I look for something in between? To add. Yeah, I mean, you could see how much it is, because are you guys in good health, would you say? Yes, yeah. Okay. Because that's the great thing about term life is it is so inexpensive. And then when it comes up for time for renewal, you can always, you know, go back through and recheck things and make different decisions, right?

You can always get additional policies, you know, in a few years. Now it's going to be more expensive as you age. So your best bet, likely, and they can help you run the math, is going, hey, let's do a 25 year because it's going to end up being cheaper than doing a 20 now and a 5 later. And so I would confer with them, get the math on it, and always stick to term, no matter what. Just term. And if it's 15, 20, 25, that's fine. And always get 10 to 12 times your annual income or your husband's annual income.

and both of you should have your own individual policies. Yes. And you're saying not 30, 25 should, I shouldn't go more than that. 30 feels aggressive. If the kids are still in the house at that point, that's on them, and you guys will be multi-millionaires by that. Yeah, I was going to say, because I mean, yes. You'll be self-insured.

In 25 years, yes, Merrim, if you guys are investing 15% of your income, if you guys are working to pay everything off, I'm like, it's just, that continues to build. That's where you build wealth. And in 25 years, what that's going to end up being is a lot of money. And so for the kids that are in the home, maybe it's one or two of them, they're going to have plenty of money. The others should be out living their own lives, you know, and not needing your financial support. I mean, you'll have a village at that point to take care of each other. So I'm less worried 25 years from now about what life looks like if you follow the plan.

Exactly. Okay. I can ask one more quick question? Sure. About when your income goes up, you're sort of 10 to 12 times your income. So then do you buy another plan in term for the difference? you can get a small policy for the difference. I wouldn't cancel the one you currently have and get a new one.

And how often would you look at that? Like in a year, if it goes up, every few years. It's a parameter. So if you get a $5,000 raise, you don't need to go out and get an extra policy. Right. But if you get a substantial raise

and your lifestyles change and your expenses have changed dramatically, that's when you go, all right, we need to relook at this. Yeah, it's about every four to five years I would relook. And in the, you know, the kid's situation too changes it. I mean, for me. Exactly. So yeah, but I'd say, yeah, every four to five years, I'm trying to think what Winston-on,

because we just re-uped our life insurance maybe like two years ago or something. Because we still get it. I don't know. I like having it, you know, even if we're debt-free and everything, there's a part of me that I'm like, we're young and healthy and it's cheap. And that's the great thing about term.

For what it costs, I mean, it's a great policy to have, especially due term. Yeah. Yeah, so anything fancy around it, any words you don't understand, Miriam usually is like a, that's a red flag to me. They're adding things on. If it's a young guy that's in the situation and it's all these weird terms again that they're selling you this package, probably not a great deal.

Like the simpler, the better. Just a 20 year, 25 year. And they always want to pray on your emotions and the what ifs and well a good parent would do this. You really want to take care of your kids. And kids don't need life insurance. Only you, you know, I mean, all of it. So it's meant to do one thing, which is replace income. That's it.

Yeah. Your two-year-old is not bringing, you know, money into the house here unless he's like a Gerber baby making bank. So you're asking really good questions, Miriam, and I love that you're taking care of your family in this way. Most people are going, what the heck are they talking about? I don't have any insurance. And so for everyone out there listening, you need term life insurance if anybody depends on you, a spouse or children. And it's very affordable. And you can call our friends at Zander and get this done today, 800, 356, 4282, or go to Xander.com.

They'll take care of you. Rachel and I both have our policies through Zander for our families, and it's well worth the money. And Zander's great because they go and shop. They're broker. Yeah, all different companies versus, again, like a Northwestern, right, to pick on them a little bit. But it's like, okay, it's just one or Affleck. It's just one.

You know what I mean? I guess their car. I don't know if they do life. They probably do it all these days. Yeah, probably. But yeah, it's not just the one company that you're getting the price from. What Zander does, they shop all the companies to get you the best price of what you're looking.

And a lot of these now have no medical exams. Like if you're under, I don't know, a million dollar policy. Really? Yeah. You don't have to go get the medical exam or, you know, so that's always nice. No, I have to get. Convenience. Have someone come to the house and get pricked and get your blood done or go somewhere

and get the blood work done. I love it. And it's a good idea to get healthy before you shop for life insurance. Cut the bad habits. Be thinking about your diet the night before your blood gets drawn. Yes. It's like cramming for a test. You're like, well, if I don't eat bad today.

Fast and drink a lot of water because I'm like Googling, how fast will my blood work be good if I cut sweets? I know, yeah. That's a good reminder. Yeah, and I think those are some of the saddest calls, George, of, you know, we'll get, you know, a widower or a widow calling that their spouse passed away and they have kids and they're trying to pick up the pieces. So, you know, whether they're trying to find a new job or starting to work because they were a stay-at-home parent or trying to figure out child care for the kids so they can go to work. I mean, it's just it, and if there is no life insurance, then they are, they have nothing. You know, they're stuck with what it is.

And so it is. And the sad part is a lot of people think they're covered because they're like, well, he has one through work. And I go, well, how much is that policy? They go, it's $50,000. I was like, well, great, we can get by for maybe six to 12 months. Yeah. But what about after that? And so the goal here is if you make $50,000 and you get a $500,000 policy, you could invest that money and it would be able to spit off $50,000 with the average return in the market. And so that's the goal of getting 10 to 12 times your income is because the stock market historically has done about $10,000. to 12%. And so that's the reason for life insurance. That's the mechanics of it. And it doesn't take long. I know it feels like, well, I'm going to die sooner if I get life insurance. No, you're going to

die regardless. Maybe tomorrow, maybe in 50 years. But either way, you need to sleep better, knowing that your family's protected. And our friends of Xander will hook you up. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Campbell, joined by bestselling author Rachel Cruz. You can call us at AAA 8255-225. That is the only way to get through and get your question answered. Joe is up next in Huntsville, Alabama. What's going on, Joe? Hi, guys.

I just want to thank y'all for taking my call. And before I get into it, I want to thank all of you for all the work that you do with Church of the Highlands in Alabama. Oh, thank you. Thank you. Good people over there. Yeah, thank y'all. Well, I'm just calling because I've got – I came into a marriage with about 30,000 and 60,000. student loans. And we now owe about 23 on it. We are not homeowners yet, but we have been blessed by

just gifts and what we both brought into the marriage of saving. And we have about 122,000 in saving. Nice. Good for y'all. Thank you. But it was not mostly us. We eloped. And so we got a great gift for... Oh, nice. Nice. Yes. So I would love to be able to write a check and get those. That's the only debt we have. Like I said, not homeowners yet. We rent. But I would love to write a check and get that debt out of our life. But we're not quite on the same page. My husband's not comfortable with that yet because we're not homeowners. And it just feels like a scary thing to do to just send that much money off, not knowing what the future might bring because I am a stay-at-home mom. so just, you know, want some advice. Okay, so his big hang up is he wants to keep a ton of savings and not pay off anything because of something possibly happening to something where income's not coming in

and he would rather have $122,000 saved than $100,000 in no debt. When you put it like that, essentially. Okay. Yeah, because that's, yeah, I mean, that's what it is when you break down. And he wants to be a homeowner first before he pays off the debt? I think he's most concerned about, like, having, once we pay off that debt, and then once we do, we're looking to buy a house, you know, in the next end of this year when our lease ends. So when we do end up putting that down payment on a home, where does that leave us?

I think that's his concern. You won't be able to afford the mortgage? Well, no, where does that leave our emergency fund? And where does that leave if he would lose his job? So are like three to six months of expenses. Yeah. So it's kind of, in my opinion, the dog's wagging the, wait, what is it? The tail wagging the dog.

The dog is always going to be wagging the tail. That's right. but he wants to do that big thing first before paying off debt and almost regardless of what's in the emergency fund and that's what's scaring him right so if you flipped it and said okay we need to get rid of the risk of the debt then have the emergency fund and then what's left is what we have for a down payment so that means if we don't have enough by the end of the year we may have to lease somewhere for six months and then we buy a home in this next summer versus at the end of this year when our lease is up, right? Essentially, I would say so. I think because say we put 50,000 down

on a home, we pay the 23 off in loans, that still leaves us, you know, pretty comfortable, I would say, with at least four to six months of expenses and saving. Yeah. Well, and that's if you guys do nothing for a year, right? I mean, he's working. Right. And you guys are putting more money on save, right? Like, I mean, how much margins do you guys have a month? month. So we live pretty comfortably on what he makes now. Like I said, I'm a stay-at-home mom, so we're not saving as much as we'd like. We don't invest because we're just kind of unfamiliar with all of it. You know, we're so new to all this. Sure. And like, but we have a money market account that we save about 200 a month, and then we have a money market that brings in about 150 a month. So what's your rent right now?

What's your rent right now? $1.50. Okay. So the question mark is, how much house can we actually afford and is this timeline even reasonable? Because I think what he's really saying is things are already tight and it's only going to get tighter if we pay off your debt. But really what it's doing is you're freeing up a payment and getting a better financial foundation. And if you can't buy a home when the lease is up, that's okay. This is a fake timeline we've made up that we have to be homeowners when the lease is up. And so you guys need to sit down and get some real numbers on this and not just well, I think and I'm not sure what's going to happen. We need to go, here's what is true today. here's what will be true 12 months from now.

Okay. So my proposal is that we, and this is like, you know, understandable. My proposal, we pay about 320 on the loan a month right now. And we also tithe 10%. So my proposal, and that still puts us comfortable. So we're like, we're pretty frugal. So if we were to free up that 320, that would put us saving more like 600 a month. That would like pretty much double the amount we saved.

100%. His fear is that we wouldn't actually save it, you know, which is understandable, but it would just take good discipline. So his fear, yeah, is that you guys aren't disciplined enough to follow through on the loan. Yeah, I think it would be good. Well, I believe we are. I think you guys are, too. I think he's using a lot of these while I'm scared, I'm fear. Well, you have fears too.

Scarcity mentality. How did he grow up with money? What was his childhood like? I mean pretty just middle like you know general middle class um and I don't believe that his family of origin spoke about money very often unless it was a tight season yes okay whereas you know this is the most money I've ever had in my entire life sure totally totally I grew up my mom and a single mom and so just different families of origin for sure yeah do you guys sit down and do a budget every month together We do. I track every dollar we spend and that's like, and then we sit down and we close the month

and I like kind of, I keep the spreadsheet because that's just kind of my thing. I'm good at that. But we sit down and look at it together and I say like, okay, this is where we spent and groceries and this is what we saved and things like that. So I know where every dollar goes. Yeah, y'all are amazing. I mean, well done. Okay. So what I would, what I might suggest is I don't know, there's something about hitting goals together as a couple that is so unifying. And I'm trying to figure out and think through, you know, what could be something that you guys do together that's going to make you both a little uncomfortable, but it's at least getting you towards what you're both wanting. So I'm throwing this out here. I don't even know if this would work.

I wonder if you guys sat down and just said, hey, what if we paid off half the money right now? And we just, and we wrote a check, 12 grand, and we just paid half of it off. Can we just see how we feel now? Because a lot of this is like the emotions are driving. His fear is driving a lot of this. I'm not to George's point to a fake timeline of buying a house that, you know. You're just moving a digital balance. And the truth is you owe people money.

And so the balance isn't really 122. It's 99. And so if you did it this way, he also sounds like he's not familiar with the plan. I would go watch Financial Peace University with him and go, hey, this is what I'm after. That's the financial piece I'm after. And as long as we have debt, I don't want to move forward. I don't want to become a homeowner. Life is only going to get more expensive.

Therefore, let's create more margin in our life. So I would pay it all off. You have 99 left, earmarked 30 for an emergency fund. That's 70 you have left for the down payment. And if you save over 600 bucks a month, you'll have another $8,000. So a year from now, you have 78,000 to put down on a house. How much house can we afford with that number? That's the kind of tactical homework you guys have to do tonight instead of just a lot of feelings.

Look at you. I know. And I went right into the feelings. I just, I'm just, I'm just a half off and just see how we all feel. I'm just a nerd. I'm like, enough. Let's use logic, people. But money is always emotional. Julia is in Denver up next. Julia, welcome to the Ramsey Show. Hi. It's so great to talk to hello. Can you hear me? Yes, you sound great. We're happy to talk to you.

Wonderful. I'm actually a huge fan of your guys' show. I actually try your mocktails on the regular. Oh, fun. Smart Money Happy Hour fan. We love to see it. Yes. You guys do talk with everyone else. talking about. That's our tagline. That's our tagline. Rachel is very relatable that way. Well, George, I've actually talked to you before when you and Dave were on the show.

And I was the one who was asking about my mom's student loans and stuff like that. I will say updates from them. I got a job, a full-time job. That isn't just BA work. Good. Which I'm not an Instagram influencer just to clarify. and my husband actually was able to get a part-time job. The reason he was able to get that job was because it was a seasonal job,

but now we're coming out of season. They're keeping him, praise the Lord, but it's not enough, and we're still struggling to get any other work from, you know, just applying. And so we're trying to use, what's his name, Ken Halman's strategy, the proximity principle. Yeah, okay. By using my company, because they have a position open, and my boss said that if we have them apply, he'll have a really high chance of getting that position.

The problem is he would need a car, and we're down to one car right now. Okay. So being in step two, I'm wondering, is it better to move on or hold off paying no debt and get out like a beater that'll just work for this job? Because we'll be making more money. Yeah, because how much of a raise would you get? go ahead, sorry. How much of a raise will he get with the job

versus what he's making now? So right now he's only making, like, it's really low hours. He was getting at most. He got 30 hours during seasonal, but now he's getting like 15 hours. And what does he get paid? Which is really hard for him because he's a manager and he lost his job because of some other stuff.

But so he's having a hard time wanting to ask for more hours knowing how little he is. I mean, he still is asking for more hours, but they can't really give him much. So it would, Raise him by about $2,000 more a month. Okay. So he's getting a $24,000 raise.

Yeah. Amazing. Okay. So, yeah, so if you guys stopped the debt snowball, saved up some cash for him to get a car and say you pause for 90 days and, you know, worked like crazy, did something, you know, did whatever you could. Yeah. Could you save $2,000 a month if you really went for it? Yes, we can. We just moved into a new apartment.

So last month, we had to move into just a better situation for our living. So we weren't able to get ahead with like debt or anything like that. But those expenses are no longer worried about. It's just like I don't have a good vision on how much we have. I mean, I have a budget and everything. And ideally what we should be making. We're still kind of figuring that out. So I can't say for sure that we can save about $2,000 a month.

But I think it's very doable. if we do a little extra Instacart. Okay. I have an ignorant question. If you guys work at the same company, why can't you carpool? So because it's not, so I'm a merchandiser

and I go, I have ten different store locations. So I'm traveling all day. It's not like an eight to five in the same building. You're moving all over the place. And he would be more of an eight to five in the building?

No, he would be doing something similar to what I'm doing. Oh, so he'd be traveling to different stores as well on his own. Right, exactly. Okay. Well, this is a solvable problem. I would pause right now and just stack up cash real fast. Now, this is not we're going to take a break for a year from paying off debt. Like Rachel said, this is like three months max. We're going to go really hard. And worst case, if you're not there yet and you need to rent a car for a month, do that. Borrow a car, whatever you need to do to do to get by as he takes on this new job, that's okay. But just please don't take out a car loan because you, quote, had to. I know you're better than that, Julia. I know, but that's the calls we can.

He needed a $40,000 truck because he got a new job. Yeah. Okay. So that's the game plan. How sure is it that he's going to get this job? They said that they don't have anyone applying for this position right now. So as soon as we apply, they'll get him. Yeah, that's awesome.

What will your total household income be at that point? So it increased by 2000. We'd be at 7K a month. The 7K total is what you'd be bringing home a month? Mm-hmm. Awesome. And then how much? How much debt do you have left?

So I did them ask, and it's actually more than we were expecting. We're in 60K right now. Okay, and what makes up the 60K? Okay, so 16,000 of it, 16,000 of it is his credit card, which I'm getting really nervous about because we haven't made any payments on it in a while. Yikes. And then we have my student loans, which is about 12K, and those are under my name. That's not the Parent Plus loan with my mom.

Okay. And then what you guys advised for me to wait to worry about that, so I'm not even including that in the parent plus loan? Yeah. Yeah, I wouldn't worry about that right now. And then there is just like a bunch of odd-end things. Like our last apartment, we ran into just some issues with the landlord. They didn't take our rent when we wanted to pay because we were behind a month and it was a whole thing. And so now we have $8,000 of dollars to go towards an apartment complex.

You owe them? in like back background? Okay. Are you guys done taking on debt? Because we tried. Are you guys done taking on debt? Are you still using credit cards or anything like that? No. We haven't used a credit card ever since we got married.

This was before I married my husband. Julia, are you guys done? If he gets this job, what time are you guys home at night? Like hour-wise? That's a great question because he could, The position that we're looking for, he could do later in the day, whereas I can work early in the morning, and that would help with the baby, because we do have an eight month at a home. Okay. Yeah.

So it'd probably be like I'd be working in the morning, and he'd be working at night. Okay. Yeah, yeah, yeah. So you guys would, but not, hopefully not too long term, because hopefully once you're out of this debt, you guys can, you know, factor in maybe daycare or something. I don't know. So you could at least get on the same schedule, so you're not missing each other for years, you know, in life. You don't want, that's not sustainable for your marriage, for sure. Here's the math on this, can you guys put three grand a month with this new income towards your debt?

Minimum payments plus extra. Can you do three grand a month? Like after we get the car and get this position? Yeah. Once you guys are settled and stable in this new life. Yeah, we should be able to. Okay, because that means 60K, three grand a month, you're done in 20 months. And that's if you don't do more than that.

Less than two years, yeah. If you guys go more aggressive, you can get it done in 18 months, 12 months. Yeah, that's why I was asking about the hours, because if you guys could keep up the Instacarting or something on the side and bring in. Yeah, don't stop the sidegag. That's the gazelle intensity that we talk about, maybe step two of you're, you guys are just crazy people, right? You're just doing anything and everything to earn income, cut lifestyle. I mean, it is like we are putting everything. Because every, if you think about it, every two, $300 that you can put that's not going out in lifestyle towards this debt, that's a, you know, a couple of hours that you're not working. You know, I mean, it's just that give and take. So it's like just deep, deep sacrifice. And again, if you do that, like George said, in less than two years, you guys could be out, which is just huge. Which how long have you been in debt?

My whole adult life. Don't you think you deserve better, Julia? I do. I think you do, too. So I think we make a plan tonight. We spit shake and say, hey, hubby, we're going to go hard in the paint until this thing is gone. we're both working like crazy. It's a competition of who can work more hours at this point.

We're very competitive, so that works out. Perfect. I mean, he has his own business, and it's, like, hard for him to invest in that with all the debt and everything. And so, and then I have, like, a ministry, and there's all this other stuff going on in our life that we want to do. You have a why. You have a great why. He wants to run this business. You want to be generous and run this ministry.

So all of these things will fuel. the journey when it gets really hard when you guys are both exhausted and instead of fighting each other you go good job today way to go thank you for providing for our family thank you for knocking out this debt we are worth being debt free and you guys will get there in no time are you guys using every dollar right now we are I just got this subscription in December good you are on the way Julia call us back and we will celebrate with you maybe 20 months from now worst case you got this is in Columbia, South Carolina up next. Robert, what's going on?

Hey, how are you today? We're doing great. How can Rachel and I help? Yeah, so I have a lot going on. First question that I have is where to start with everything that I have going on. I've recently, in the last month, I own a business. I've had a business now for going on three years. This will be my third year.

first year I did great second year I cut back and I had too many eggs in a basket and they went with a different contractor and so to speak I'm losing about 80% of my income. Oh gosh. So what was it and what is it now? So my income was 6,000 or really 4,000 and it's dropping down to about 2000. Okay. So you went from four to two? Well, really six to two, but I was putting money back in savings and using that for the business. Got it. But you were kind of taken from the business, you were taking six for your own personal goals? Yes, sir. Okay. Are you actively trying

to replace that since you know that it's going to be cut? I mean, are you? Yeah. Yes. Well, What's the plan for that? So I've been going and meeting with different owners, and I actually am looking at taking on more contracts than what I had before. Others don't have the contract signed right now. Oh, good. Okay. So in the pipeline, you've got some leads here. Yes, sir.

Good, good, good, good. But in the meantime, it sounds like there's other pieces here. Do you have debt? Yes, I do. to be completely honest, I'm behind on my taxes. In my personal life, I'm looking at doing a bankruptcy. I have enough money saved up right now to float me by for two months if something does not come through. And then after that, I will basically lose everything that I have built.

I have four children and I have a fiancé. Wow. Okay. How much debt do you have? So after the bankruptcy, it will basically Wait, have you filed? Give me, where are we at when you say after the bankruptcy? Is that in process?

I have, yeah, it is in process. So I have one more final payment before I'll have my court date. Okay, and can I ask why you filed? So I had a few judgments put on on me from a past, marriage that I had. Okay. I took all the debt from that and they reached out to me and put some judgments on me for some vehicles that we had. Okay. So you have coming out of that, and do you have, you know, you have no money personally saved for these upcoming months? Other than two months worth, that's correct. Two months. How much do you owe the IRS?

I would say about 26,000. And is that back taxes or is that, hey, I should have been making these estimated payments. It'll be due in April and I don't have it. Yeah, so that's back taxes. And then come April, we'll be for another tax year. And you don't have, that'll be another 26 or so, they'll owe? Yes. Yes.

Okay. So we basically owe, you know, 50 grand to the IRS. What other debts do you currently have? I have a truck that I've been working diligently to get paid off. I'm about $900 away from having that paid off. Okay. I also have a family vehicle that I've been working diligently. I'm about $600 from having that paid off.

So $1,500 and you free up both car payments? Yes, sir. I would dip into that savings you have and pay those off today. Okay. That lowers your expenses measurably. How much is each car payment? So combined, they're about 900 bucks. Okay.

Yeah, that. And then Robert, I'm like, I don't know, I'm just thinking out loud here, but if you know you're going to be going down to $2,000, and you know there's contracts in the pipeline, but they're not signed and there are no guarantee, go get another job. Can you go work? Yeah, so I'm actually, I'm looking at going into drill

and making about 10K a month. And the only thing that's holding me up from that is one of this. This is another issue I have. Me and my fiance disagree on finances quite a bit. And so this last half Sunday, I started up at FPU nine-week course. So I'm currently trying to have that conversation with her on cutting back and canceling out debt. to improve our financial life. So when you say you're not aligned, where is she at on all this financial situation?

Does she even know what's going on? Yes. So she does know what's going on, and she trusts me to provide. I've always provided. However, you know, we don't see eye to eye on things such as cutting out Spotify, cutting out all the things that are not necessities, to be able to cancel out debt and basically restores. aren't. And we don't see eye to eye on that. Does she work outside the home?

No. She currently, she's a stay-at-home mother with her four children. Okay. So does she understand the reality that, hey, we have $2,000 to cover all of our bills, and we can't afford that? So therefore, we don't have an option. But to cut, this isn't like a, hey, let's just really hunker down and get rid of the debt. You guys are in storm mode right now. are the kids? So I have a nine-year-old, a six-year-old, a four-year-old, and then a three-year-old. Okay. Yeah, I mean, I don't know.

In my head, this is like a little bit on fire, right? I mean, you're coming out of a bankruptcy. Yeah. You guys have $2,000 with tech that, you know, you have the IRS that's going to be freaking all of your business. You've got to focus on that before anything else. Yeah. And so for me, it's all hands on deck. So I need to be looking at what she can do to bring home money from being a stay-at-home mom.

If I'm, you, I'm looking at three different jobs or the drill, you know. Yeah, how sure is the drilling gig? And what do you need to do to actually get the job? It's for sure. I just have to go and do the paperwork in a different state and go for the training classes. How long does that take? Well, they paid me during training. I could probably have that secure within three weeks.

Go. $10,000 a month? Is she on board with this? I don't care. Because you're ditching the family for two weeks. It's going to be a problem and your business as well. They don't have money. Yes.

No, I'm making sure this is a reality. He can just go do this right now. I know. So the current situation with it is I'll have to be gone for three weeks. come back home for two weeks. So there's that. And then... Like ongoing.

There's also... Yeah, it's ongoing. Every month it would be that way. And then there's also the current talk of, should I give up on a business that in our first year, we made almost $200,000 and did fantastic. However, we did not financially save back from this. Yeah.

You know, it was kind of money that both of us... Yeah. Listen, if I'm you guys, I'm like, we have to have, we have to have some major changes in our lives because we have 50,000 dollars that we're going to owe to the IRS with both, you know, both years. You know, we were, I don't know, all. To me, I'm like, do what you have to do for six months and let's reevaluate in August. Like, go do the drilling thing. And put every X six months. Yes. I mean, that'll clear out the debts. You know, maybe you do it for a year and that's it. I mean, talk to, people that are deployed, right? I mean, they're gone from their families for six months at a time. So it is possible. I'm not saying it's the only option, but it's a very, very great option that's right in front of you. For a short season. For just a season, it doesn't be forever. And when you guys actually have your head above water and you actually have somewhat of stability, then we can look to see, okay, what do we want to do with this business and should we, you know, get it back going? But

if I'm y'all and I'm coming out of bankruptcy and my income's being shot, I'm I'm just looking anywhere to make money at this point. It's a feed four kids. And yes, your fiancé, I'm sorry, she needs to grow up and understand how math works. This is not like a, you don't get to live in a fantasy world. I want to keep up my lifestyle. You don't make $200,000 anymore. That's what she has to realize?

You don't. So what are you going to do? If you have a simple tax situation, like you haven't had any major life changes or big investments, check out Ramsey Smart Tax. It Ramsey Smart Tax is affordable. It keeps filing simple. Plus, it has built-in support. in case you need a little help.

Filing early means getting the best deals, and you get that tax stress off your shoulders. So as soon as you get all your tax documents, head to ramsysolutions.com slash smart tax and start filing. Matt is in Colorado Springs. What's going on, Matt? First thing I just want to say, is y'all are such a blessing to so many people.

Oh, thank you. I've listened for quite some time, and I'm just thankful for what y'all do. And now I find myself in a situation where I could use some advice. Yeah. Thank you, Matt. Yeah. So I guess the brass tax of the situation is I've got a pretty considerable amount of IRS debt.

I own two businesses and I've just kind of got myself in a little bit of a hole. And so the question is if there's any credibility to tax rates, release programs and things of that nature. Well, they're often marketed to people who are desperate and vulnerable, which is never a good sign, you know, when they're, that usually means they're predatory and they're promising, way over promising and under-delivering. So what they tell you to do is basically, hey, don't pay a dime, you pay us instead, and what's going to happen is tanks your credit, which with the IRS, not the people you want to

not pay. And so they then try to settle for you and save you money, which, by the way, you can do all of this yourself. And with the IRS, they can already set up a payment plan. So there's really no use for a tax relief program in this situation. Okay. They're just paid middlemen between you and the IRS. Right. And the other office that I contacted was more of like a tax attorney that talks more about the future plan for the taxes for the business to avoid this issue in the future, which may be beneficial. Yeah. But then his office was saying, you know, we don't recommend these tax relief programs

because they're over-promising under-delivering. Perfect. I'm in line with an attorney. That's a good day for me. Okay. So I guess the question is, if you were in this situation, what steps you might take. Yeah, how much do you make a year, Matt? It's kind of relative, probably somewhere around 100 or so.

Okay, and do you have anything in savings? Yeah, I typically try not to dip below 15 or 20 in savings. So you have 20? Yeah, about right there right now. Okay, yeah. The issue with my particular business is extremely seasonal with construction. So, you know, I kind of hunker down in the wintertime and, you know, rice and beans and they're just about nothing. But then in the busier season, it's easier to tackle some of these things.

What kind of construction? Outdoor, you know, fence and deck and a lot of carpentry point of stuff. Cool. Well, the good news is you can still work during that time and make money. and you can definitely pay this money back in a reasonable amount of time. Do you have any other debts that are holding you back from creating the margin to knock this out quick? Yeah, there's still about 20,000 remaining on a key lock. Okay.

And I already know that's a teeth grinding word for you probably. But that, you know, it's one of those situations where I'm sure I could pay that off, but then, you know, you have to worry about the bills right now. So if I were to pay it off, I would wait until the money's coming in more fluently. Okay. So you got 40 to the IRS, 20 on the HELOC. Anything else? That's about it.

I've paid off, I don't know, 20,000 something in credit cards. Great. Good for you. No car loan. Yeah, well, I would. This changes the debt snowball a little bit because IRS debt gets moved to the front. So even before the HELOC, I would be tackling this 40. and I would just make it an aggressive goal.

And again, I don't know if it's a payment plan that you contact the IRS with. I mean, I would try to have this all paid off in less than a year. Yeah. So I guess other pieces of the equation are I've got to file the last two years of taxes. I'm behind on that. So there will be probably another 10 to 15 after all the expenses and whatnot. So let's call it 60. Is that fair?

Sure. So if we call it 60, you know you owe 60, set up a payment plan with them, and maybe it's, hey, you're going to pay $1,000 a month or $2,000 a month. And then once you get down to that, you know, you got $15,000 left, I would use your savings to just knock it out. And then you can replenish the savings. Really, what you do is then attack the HELOC, then replenish the savings. So I guess the questions then become, you know,

I pay a considerable amount of additional principle on my home. Or does it make more sense to factor that into this equation? Yes. I would just pay your mortgage. I would make the minimum mortgage payment. Why are you paying extra on the principal of your home right now? Generally, just, you know, you look at the amateurization schedule and all of that, and over a course of time, it just makes sense. Yeah, and it does in the right order, but you want to get this stuff cleaned out.

So if you went down to just your mortgage payment, how much does that free up a month? Probably about another thousand or so. Oh, great. So how much could you reasonably put towards this IRS debt every month if you got aggressive? Well, this is where it gets tricky. because, you know, I listen to your show constantly, and people are like, well, I make this exact amount every month or every two weeks. And for me, I have months where it's 15,000, and I have months where it's... Sure. Some peaks and downs. But you've been doing this a while, so you probably

could look at a calendar and semi-guess. Like, this probably will be good months here, low months here. So, yeah, so you may be putting, you know, maybe, you know, 13, 1400 towards this on a low month, but a good month, you could be throwing 3,000 at it, right? Sure. So I would kind of just map it up that way. And I'm already set up on like their minimum amounts, 400 something a month. So I've been actively attacking it for a couple of years.

But it seems like every dollar that goes into, it's just paying off the occurring interest, you know. Right, right. You need to get way more aggressive on this, which means all focus is on this IRS debt, no extra on the mortgage. Your budget is bare bones. You are just covering four walls,

food, utility, shelter, transportation, insurance, anything else is going towards this. And try to make it to where there's no gap in income. Now, I understand you're going to have some really good months and some rough months, but I don't want you just sitting around going, well, there's no work to be done right now. Sure. So I guess in general, you wouldn't, you know, I mean, I could run the HELOC up more and pay that and it might be less percentage that I'm paying. We are not adding a cent to the HELOC. We're not going to keep going with this line of credit. We are done with that. So just keep. Keep it where it is. Keep up with the minimum payment.

And then all of your guns are pointed toward this IRS debt for the time being. Now, do you think it would make sense to sell off additional assets to try to do this? What do you have? Well, I've got a considerable number of vehicles and machinery that are mostly associated with the business. I mean, for all intents and purposes mine, but the business owns them. Yeah, would it decimate the business income if you sold these off? Yeah, do you need it, though, to run your business? Well, it's probably like a half and half kind of number.

I mean, you know, skid steers and tractors and things that are relatively essential. That you have one piece of machinery you're thinking of that you're like, okay, I could sell that and be okay. Doesn't get a lot of use, doesn't create a lot of revenue right now. Yeah, yeah. What could you get for that? I mean, probably somewhere between 15 and 20. Wow. Thousand?

Yeah. That period with your savings gets you out of the IRS debt like tomorrow. Yes. Yeah. I kind of figured you all would be on that boat. And you can always buy it later if you need it, right, with cash? Sure. Yeah.

And again, that's all saying that that's not affecting your business. I don't want you to have to turn business down. I don't want you to lose half your income because you sold this thing. Right, right, right. So you want to be smart about it. But if it's something that you're really not using a really need and you get 20 grand off of it, yeah. I'm doing that for sure. Yeah.

Yeah. I'm a huge advocate of not having car loans and I fix them all myself and whatnot. That's great. Yeah. Anything you have, Matt, I would. I would because I think if you had no IRS debt and no HELOC, how would you feel? Like I could scream? Like amazing.

Hi, I could scream. I'm dead free. Exactly. Yeah. So I'm like, yeah, whatever you could do to get to that level of peace and control is what we're after. And then later, when the business is doing great and you have all this freed up money because you don't have debt. you're able to save and if you need to go buy some equipment. Can you cash flow some equipment?

Then you can. I'm changing the Dave quote. Now it sells so much stuff the skid steer thinks it's next. Because it is, my friend. Good luck selling it. Hope you get a great buyer who's happy to pay you what it's worth. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. I'm George Campbell, joined by Rachel Cruz.

The number to call is AAA 825-5-225 if you want to join the conversation. John is in Jacksonville, Florida up next. John, welcome to the show. Hi, how are y'all? Doing great. How can we help? Yes. First of all, I'd like to say thank you all for everything y'all do. My wife and I are 36 years old, and by the time of 40, we are potentially going to be networked millionaires due to watch y'all teach on this show.

Oh, my gosh. That's incredible. Way to go. All the work you've guys done. We were just sitting here doing jack squat. You did the hard work, man. Proud of you. Well, thank you all.

much. It's definitely changed a family's trajectory. However, unfortunately, my mother and father are not in the same state. My father passed away on 12th January, and I'm my mother's financial power of attorney, and

they are in or she is in some pretty bad financial jeopardy. So I'm looking for y'all's advice. Oh, no. I'm sorry about your dad. You say it was just this January, like this month? This month, correct. Oh, I'm so sorry. Okay, so what, yeah, what did he leave your mom with?

So, we'll go ahead and set aside a $70,000 mortgage, but it's a total of $113,526 of $54 of debt. My mom is 61 years old. She's still currently working, but only net's $37,000 a year. Okay. What kind of debt is the $113,000? Yeah, so the $113,000 is $50,000 worth of IRA. debt. 23,000 is owed to collections.

Let's see. We have, you've got to get my stuff together here. Yeah, it's about 40,000 more somewhere. There's credit card debt. Right, right. Yeah, so let's see, $22,305. And that's different than the debt in collections, correct?

that is different than the debt in collections. The debt in collections? What is that? Is that medical debt? Is that credit cards? Well, it was a personal loan that he dealt with some dementia

later in his life. Oh. That personal loan he ended up forgetting to pay, forgetting to pay, forgetting to pay, forgetting to pay, it got passed off collections. Okay, got it.

And how much is, yeah, anymore? I'm sorry? Yeah, any more? Yeah, any more? debt? Yes, they have $14,755.75 in auto and personal loans, and then there's another $3,465 in a personal loan, and then there's another $3,465 in a personal loan as well. Okay. The $14,000, is that one car or two cars? So the 14,000, the auto loan is $2,634.74. The other part of that 14,000 is two personal loans.

Gosh, okay. What was he using all this personal loans for? What was he doing? Yeah, we don't even know why they were taken out. We really don't. Now, were these all in his name, or were they jointly held? No, so all three of these are in his name, but there's, one person loan in my mom's name, which is $3,4.465. Okay. Okay. Well, I just want to make sure that we

don't go paying debts that she doesn't legally owe if they're only in his name and not jointly held. Now, I'm assuming they did their taxes married filing jointly. Yeah, that's a good question. I actually think they get them separate, but I can't speak to that constantly. Yeah, because the IRS debt would be. Yeah, if they file jointly, then she's going to be responsible. But if not, she may not be. The estate would pay it, but not her personally. And if the, you know, so if the estate can't cover it, she may not owe it personally. That's where I want to get clear on this, and you may need to work with an estate attorney to kind of go through all this mess and figure out what was owed, whose name is on what,

what does she legally have to pay? Then we can get a real game plan of what we're going to do. I got you. I'm taking notes now. Because if, you know, 75% of the debt is wiped away, you know, you send a death certificate and they go, all right, we can't collect. It wasn't in her name. and that might really save her in that regard.

Because she can't pay $113,000. The IRS debt is definitely going to fall on her, I think, regardless of whether or not they fall jointly. Because for whatever reason, and she didn't know that she wasn't doing this, since 2014 at some point in time, there's something that changed to where she, her taxes were not getting with hell. so and his for whatever reason we're not getting withheld we don't know if he's over 10 years change that without her knowing um yeah so it since 2014 yeah now when she found out that that was an issue she got it changed but that wasn't until two years ago um that she found out that and he yeah because if her taxes were not being withheld then yes then some of the

IRS that might be in her name but i would that's where george is saying like to get clear on whose name, yes, is on this debt because that will make a significant difference. And things like collections, John, you guys can, I mean, and on her behalf, you can help with this. You can settle that kind of stuff so quickly. You need the money for it, but they may settle pennies on the dollar. You know, with this $23,000, and it's not been paid, it's not been paid.

They're not expecting to get their money. So you may be able to settle for, gosh. A couple grand? $5,000, yeah. Now you'll need the cash to do that and go through that process. But yeah, there's some hope in that. But with the credit cards and all the personal loans, contact the banks and figure out whose name is on the debt.

That's going to be really important. Yeah, I've already put all the legwork into whose name's on the debt. The tax question, I definitely need to get answered. Okay. So have you pulled his credit report? I have. Okay. So that's going to give you a pretty clear picture of what?

what is owed. And then you can check the tax records as well. Did he have retirement savings or anything? He had no savings at all. He had no savings. I will give you this. So we did get a sigh relief. And I know how Dave preaches against Whole Life Insurance. I guess in November, he took out two policies for Whole Life Insurance that nobody knew about. But whenever I started going on their statements, I found the payments. And one of them is 10K, the other one's 20K. and then we also just found out that he had a, from his retirement, he had a group term life that is still, that my mom's a beneficiary of for 29. Wow. So that's, there's like 60K sitting here to clean this up.

Right. We're working on trying to get my mom through the legwork of getting that stuff. But, you know, that's going to take some time. Right now they got a lot of payments coming out. And, you know, she gets paid on a weekly basis. Yeah. Can she make more? I don't know what she does, but at 61, she might still have, you know, another 15 years of work to go.

And so if she can go make 50 or 60, this changes her life dramatically. She currently works for the cities. And she's trying to work on that retirement. Now, she might be able to pick up a side gig because there is a retirement involved in her current job, but she may be able to look in and picking up a side gig. I'm not so certain that she'd be willing to leave. Yeah, it would be better for her to work hard and work uncomfortable hours,

honestly, to get some of those cleaned up while she's young. So that way, in four or five, six years, she could possibly scale back while still saving for retirement and hopefully maybe still have enough there. But, yeah, John, I'm so sorry. The Ramsey Show question of the day is brought to you by Y-R-R-R-R-R-E-Fy. You don't have to stay stuck in defaulted private student loans forever. Y-R-R-R-E-F-Berrers take back control with affordable refinancing options that actually work. Learn more at Y-ReFi.com slash Ramsey. That's Y-R-E-F-Y dot com slash Ramsey, not available in all states.

Today's question comes from Lucy in Oregon. She said, I'm concerned about being a target of deed fraud if we pay off our mortgage. If we keep our current mortgage, the bank would have to notify us if someone tried to take out a second mortgage to steal our equity. We're both in our 70s. I am retired and my husband plans to retire soon. The balance on the mortgage is $48,000 and we have the funds to take out of our 401K to pay it off. What should we do? Wow. Okay. Well, I mean, deed fraud, it does exist, but I'm not going to be so paranoid that I keep my mortgage to do it.

Right. because you can always, you know, if God forbid that happened, it's not super common. More when you're like, you know, buying homes, I can sure the deed's, you know, good. And I don't know. There's something you can do. We bought a home recently. We got owner's title insurance, which protects you against that. Yes.

So if you're worried about it, I would look into one of those policies. Yeah, to do that. And you can sign up with your county and get deed alerts as well. So that's also one way to protect against it. Yeah. And you can also, you know, if it did happen, God forbid, you're not going to be on the line for it because it's fraud. And so you can go through the bank and, you know, maybe some, I don't know, lawsuits. But at the end of the day, you're not going to have to owe it because it's fraud at that point.

Yeah. So I wouldn't be so worried that I avoid paying my house off. That's wild. You're in your 70s. There's a much more risk with this mortgage hanging around than there is that you guys experience deed fraud. Yeah. So I wouldn't worry about that. I would just pay it off and do your due diligence to stay protected.

You know, freeze your credit. check the records with your county regularly, get the owner title insurance if you can, all of that good stuff. But it's a good question, and it's a valid concern. So thank you for that. Alan is in Colorado up next. What's going on, Alan? Thank you for taking my call.

I have a question about a 529 account that my wife and I have for our son. When he is finished with college, which is just a couple of years down the road, there'll be approximately $120,000 left in a 529 account. Oh, wow. Way to go. I haven't. Yeah, yeah, it's pretty strong. I have an opinion of what to do with it, but I was just curious to get you all take. How old is the 529? When did you open it?

Oh, boy. Our son is 20. Let's say 20 years ago. Oh, great. I was going to say there's the, with the new Secure 2.0 Act, you can roll over up to 35 grand if it's been open for 15 years. You know, you can use that periodically. You can't do all 35 at one. but up to the Roth IRA limit, you can start funding that. So that's one option. Yeah, do you have other kids, Alan? No, we don't.

You don't? Okay, it's just this. Yeah. Well, if you do that, you know, that's 35 out. So you got about, what, 85 or so, 95% left. You said you had a plan already. I'm curious as to what you wanted to do. So my thought is, is keep it.

Keep the 539. We're the guardian of it. Put it in his name. He's an adult now. But don't let him touch it. Just have it be there, so it's generational. You know, when his kids are ready to go to college, that's going to be a pretty large sum. When his kids get ready to go to college, it'll be astronomical. It's something that you can really just leave. That's true. A lot of people don't think about that. It becomes like an endowment, basically, for your own family, generational wealth, that no one ever goes into debt for education. And that's personally what I'm doing. A lot of people go, well, I don't want to over. overfund it because what if they don't go to college? And I go, if I overfund it, they're going to

love old great-great-great-grandpa George for setting up this 529 many moons ago. And can I do some math for you? Your kid is 20, right? He's 20. So let's say he has a kid at what, 25? Is that fair? It's optimistic, but sure. Okay. Should we go 30? Is that more realistic? Yeah. Go 30. Plus 18 years. That kid then grows up. Yeah, so your son will be 48 when your grandson, granddaughter goes to college theoretically. How much would be in the account? So from 20 to 48, if you just left, let's say, 90 grand in there, right?

Didn't do anything. You never contribute another dime. You'd have $1.4 million when he's 48. I hope that's enough to cover college at that point. And something, too, I was thinking, even if his kids don't want to go or do go and there's extra, at 65, correct me if I'm wrong, you can start using that for his own retirement with no penalties.

Yeah, there's a lot of stipulations with the 529. And even if he used it in before then, you know, he'd pay the 10% penalty. But other than that, it's not like wasted money. Yeah, you'll pay some. Yeah. It's just thrown down the toilet. So I think you're being very wise with this. And I love the idea of creating generational wealth.

And a lot of people don't realize the definition of beneficiary family is pretty loose. And so siblings, nieces, nephews, future. your kids, yourself, your spouse, a grandchild. There's so many options here that you could bless someone with in your family. Agreed. That's right. So let's say you got a brother and they're like, hey, they didn't prepare, but the kid doesn't deserve to go into crippling debt just because of that. I'd love to transfer this to them. You can change beneficiaries at any time. At that point, yeah. Yeah, there's a lot of ways you can go with it. Yes, for sure. Well done, Alan. That's usually not, it's usually the opposite problem that we talk to people about. So,

Like a parent plus loan. This is the exact opposite. So I'm curious, how much money did it cost for your kid to go through school? So first off, something else, too, we owe it to Dave Ramsey from like 2005. You all have been a blessing to both my wife and I so much further. We actually taught many, many, a few classes. Thank you. So, yeah, you're welcome, you're welcome. So this 529 account, we actually showed him how compounding interest. works, we stopped investing in the 529 when he was a freshman in college at 150. That's about where it was at. He's gone through three years of school, and it's at 159. Wow. So you're telling me that it was growing faster than you were withdrawing? That's what I'm telling you. That's incredible. That's amazing. And it sounds like he went to a reasonably priced school and maybe even got some other scholarships.

Well, a few scholarships. He was in, you know, he was in Albert Einstein, but he was okay. And yeah, it was a state school,

so 20, 22, $23,000. Totally. That's incredible. Yeah. That's the dream, Alan. Well done. Well done.

Way to go. Just applaud you. I mean, honestly, that is... If you're in the family tree of Allen, you should be thankful right now.

That's pretty awesome. Thank you for the call. That's a cool kind of case study and what actually happens when you do it right. Yes. And so I always, I always recommend get started early on that 529,

even if it's $100, $200, $300, $300, $300, $500, $300, $500. Now you're talking six figures in there by the time they're 18. For sure. And the college conversation, I feel like, has been around a little bit changing, right? That college is changing. We don't know what it's going to look like. Are we all going to be YouTubers and AI is going to do all the work for us? Yeah, that's right.

Like, we don't know. But just remember, it's not stuck in there. To your point, it's not like you're, you know, it's an insane amount. If you were to pull it out, just say, like, God forbid, you're like, listen, we don't need this at all, but we need the cash, so we're going to take the penalty. Okay, so then you do that, right? And you pay some of the penalty, but then you have your cash. It's not like you lose it completely.

Absolutely. And people ask, well, what if I want to invest for my kid for something else other than school? I say, great, do the $529. Don't trade those dollars for investing over here. If you want to invest on top of that, you can just open a brokerage account in your name, a non-retirement account, and put money in there. I'm not a fan of putting the accounts in your kids' names because they legally then have access with the, you know, the UGMA or UTMA. At 18, this kid might have 120 grand that's legally

theirs. That's frightening. I don't know if you know or any 18-year-olds, most of them cannot be trusted with a $120,000 pile of money. Most adults can't be trusted with that. And so I like the idea of me being able to control how much to give to that child for a, you know, a wedding or a down payment or a car, whatever it is to help them get a leg up. Yeah, delayed gratification for a 45. five-year-old, 50-year-old, it's probably a little bit more embedded than an 18-year-old. Yes. They need to mature.

Their prefrontal cortex is not yet fully there. So that's personally what I'm doing for my kids. I got the 529s for each of them, and I've got the brokerage accounts. So they'll be very thankful one day when homes are $4 million. And your grandkids. And my grandkids. Great, great-great-un-un-un-un-old. That's so weird to think about.

But I think Grandpa George, I'm going to settle into that. I love it. I'm going to be cranky, senile. You're going to be like George Banks on, like, Steve Martin on Father of the Oh, that's a good one. I thought you were going George Bailey. A lot of good George's out there in movies. Oh, it's a wonderful life. That's a good one, too. Buying or selling your home is a big deal. And with all the clickbait headlines and conflicting data out there, it's hard to know what's really happening in the housing market. So we're here to make the latest trends easy to understand. Median home prices dipped to about 400 grand last month, which is typical for this time of year.

And mortgage rates also dip to 5.48% in December, down from 6.27% last January. January, giving buyers some breathing room. I just saw a 30-year mortgages dip down below 6% for the first time and a long time. So rates are unpredictable. We don't know what's going to happen. And the best time to buy is when you're financially ready, not when you hope home prices or rates drop. And if you want to learn more about the market trends and get free tools to help you buy or sell with confidence, go to ramsysolutions.com slash market or click the link in the show notes if you're listening on podcast or YouTube. All right, we've got Lonnie up next in Dayton, Ohio. Lonnie, you with us?

Yes, how you doing? Great. I see on my screen here that you were a baby steps millionaire. Is that true? That's correct. That is fantastic. Congratulations. Every now and then we like to highlight a real person who followed the plan, follows these principles, and has won with money doing it with a bunch of zeros on the end.

And you are that person today, so congratulations. Thank you. So tell us your age? I am 54. And what is your net worth? 1.86 million. Fantastic. And break the mix down for us.

I have a million in mutual funds that are scattered through my deferred compensation, a Roth IRA, a small annuity, and a few hundred thousand in a investment through my bank. Cool. What else? And I have $400,000 in my pension, which is a PERS, and that's the account value. If I were to quit, they would give me that amount. Or if I stick it through a couple more years, I would get the pension. Awesome.

And I have $500,000 in real estate. Fantastic. Is that your primary home? I have two homes. I have my primary home, which is just a modest. a couple hundred thousand dollar home and then I have a condo in Florida, which is another couple hundred thousand two. Awesome. Awesome. And they're paid off? Yes. Fantastic. Well done, Lonnie. What do you do for a living? I'm a manager for a municipality drinking water facility. Okay. Cool. So kind of public works,

utilities? Yes. Been there 30 years. Fantastic. Okay. And what was your worst year of income in this field and best year of income? I started out $11.25 an hour in 1996, and I thought it was great pay. That's still pretty decent, honestly. Yeah. And these last few years, we've been so short-handed. I've been doing a lot of overtime, so it's just these past couple years of this been tremendous. Six figures?

Yeah, easy, $150,000 a year. close. Awesome. Okay, did you inherit any of this money? No, I did not, but I would like to say my father, my dad, he did give me close to 10,000 when I was a young kid, a minor, and since I would get these statements from that money and I would see that grow and that just fascinated me, that this money would grow like that. and being a minor, of course, I couldn't touch it, but I could, you know, I still felt like it was mine.

Yeah. So once I became an adult, I just, it just made me want to save more. That's awesome. So did your dad teach you these financial principles? Yeah, he did. He was, he's, he's very, if I can say, tight with his money. And, you know, and I can understand why. So he taught me that. Yeah, that's awesome. you get a four-year degree? I have an associate's in mathematics, and yeah, I have an associate's degree. Awesome. Fantastic. Man, you've really been crushing it. Are you single? Yeah, single. No kids. That does,

that did help. Just help speed things up, less expenses, less people in the way as you are building well. That's good. What kind of car do you drive, Lonnie? I have a couple vehicles. you know, just the average truck and a car. I've never owned a new car. What's the year on those? My truck is a 2012, pretty low miles. Is it a Toyota? It is a GMC.

GMC, okay. We get a lot of Hondas and Toyotas on these calls, so I was curious. Those are good cars, yeah. What else you got? I have a Ford Crown Victoria. It's an old cop car that I've always. was able to buy. It's a heavy-duty car. Fantastic. Man, so what do you do with all the extra margin now? At 54, I mean, you could

retire if you wanted to, but it sounds like you love what you do. You know, that's a topic I wanted to talk about someday, you know, later on as I have this pension, and I, if I can wait two more years, I'll have my 32 years in. But, you know, just thinking about that. I just, God, I don't know if I can do it. You know, could I, could I retire in just a year? Is it worth waiting for that pension? What happens in two years with the pension? You get a big monthly payment? Yeah, in two years, once you get your 32 years, you qualify for your monthly pension. Which is how much? But, $8,200 a month. Woo! Nice. That's a sweet payday. Yeah, at 54, I'm waiting.

You're still a young buck at 56, my friend. And then you're a young buck at 56, my friend. and then you don't even have to touch your investments ever again. It'll just become like generational wealth. Yeah, right. Or you don't really have a lot of people, leave some, but also, Lonnie, go have some fun. Go do something crazy. What is the thing that you still want to do, that you're like, I want to do this thing, this is the big splurge for me? Yeah, what's like the big thing?

I just, I want to travel. I love traveling. Yes. What's the next trip that you're excited about that you want to book? I'd love to go to Norway. I've been to Europe a few times. I've been to Australia. It's just I love the idea of new places.

That's fantastic. I love that. Love it. Man, you're an inspiration, Lonnie. A lot of people want to be you when they grow up. And you've done a good job. You can tell these principles start early. You can make up for lost time.

if you're starting late at 40 or 50. But man, you've been working hard for 32 years, living on less than you make, putting money into the investment accounts day in, day out. Yeah, and his best year, he was saying was recently at $150,000, which is a lot, right? But also, it's not like he's making $500,000. Yeah, you don't have to make half a million dollars to do this, right? But it is that consistency over time that we see day in and day out with these net worth, you know, maybe subsmillionaires.

And it's awesome. It's encouraging. And that really is, these are the principles, guys. Here's the recipe if you're like, well, how am I going to become a millionaire or a multimillionaire, which, you know, he's on his way to. Here's the principle. Live on less than you make, invest the difference consistently and then just wait. And compound growth will eventually take over. And what you realize is you put $100,000 in over time, but now it's grown to a million dollars. So $900,000 might just be the compound growth. Yeah. Because you're $10,000 made a dollar. So now you have $11. Well, that made another $1.10. And so it keeps spiraling and adding up over time. And it's hard because you don't see it at first. At first you're like, this isn't even doing anything.

I'd rather enjoy this money. But if you just wait and hang on and you can type some numbers into our investment calculator on our website, it will blow your mind. And if you got kids, I mean, he said, I got this at 10 years old. Yes. And he didn't even have the internet back then to pop an investment calculator. To see what that would be. He had to do like math on paper. But that's a, what a testament to his dad, though.

His dad brought him in and showed him. And it worked. So to Lonnie's credit, like he, it stuck for him. But there's something about, you know, exposing your kids to this stuff to be like, hey, this is what can happen, right? You're giving them that knowledge. And that's a gift. Like what Lonnie's dad did, I'm like, yes.

That's huge. I love that we have our Ramsey Education Foundations and Personal Finance Curriculum and high schools all across the country. And we show them the comp, that's one of their favorite lessons. edition. So, yeah, so you can buy it for your kids at home. So ramsdaeducation.com, if you're like, hey, I want my kids to get this earlier than I did, or maybe you still need to learn. That's okay. Just lead and say, hey, I want to learn along with you. And that compound growth lesson will blow their mind. They're going to go, hey, maybe I shouldn't buy that toy.

I'm good to, I got enough toys. Mom, can you teach me how to like save this money, invest it? That's a cool lesson. Our scripture of the day, Psalm 94.19. When anxiety was great within me, Your consolation brought me joy. Jim Collins said, greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice and discipline. I like it.

Paul is up next in Phoenix, Arizona. What's going on, Paul? Hey, guys. For taking my call. Sure. I'm probably overthinking this. I know you guys, I listen to you pretty religiously, and you say pay off your house,

as soon as possible. We owe maybe 180 on our house. It's worth in the mid-400s. And we have the cash to do that, but my only concern, not a concern, is we refinanced in 2020 when the rates were 3%. Does it make sense at this point still to pay that off or use that money elsewhere?

We have IRAs, 401Ks, owner Ks, stuff like that, I'm going. And I didn't know if I should be putting more money in that or just pay the house off. Well, where are you guys at in the baby steps? Do you have any consumer debt? Credit cards. I have a work truck payment. I do home remodeling, a general contractor. How much do you owe on the truck? Like 40. Okay. And how much you own credit cards? None.

Oh, no credit cards. I'm sorry. And what else? Minimal student loans, I don't know. It's like, I shouldn't say minimal, $35,000 maybe. Okay. And how much do you have in savings? I want to say $350,000. Whoa. Why don't you pay off everything?

You could pay off all of your debt and your mortgage, like your consumer debt plus mortgage and still have money left over. Well, I'm looking at possibly buying a lot or two and building. a house. Like I said, I'm a general contractor. Building a new house? Yes. And still keeping the old one? Well, yeah. It would be for selling, buying a lot. We can build the house roughly for $200,000 with the lot, maybe $220, and sell it for $3.30.

Okay. Well, here's... Also not to live in. It's like a spec home that you just want to sell because you can do this stuff. Okay. Well, here's where that would fall in the baby steps. And this is the plan we teach. It's the one Rachel and I follow. And here it is.

You pay off all consumer debt. Then you get a fully funded emergency fund. Then you're investing 15% of your income into retirement, putting a little away for college. Anything else can go towards mortgage principle. And so if you follow that through, which you can do in one fell swoop, which is amazing, you would pay off consumer debt. That's 75 total? Roughly, yes. Okay.

And you said you had three. $350, right, in savings? Yes. So you pay off the $75 in consumer debt. Let's leave another, I don't know, $40 for your emergency fund. Is that fair? I would think so, yes. Okay, and then we're going to subtract your mortgage.

I think $180. Yeah, $180. So that leaves you with a cool $55,000 left over to then start. That's kind of your new fund to start on this house project. So what's the lot going to cost? The lots are $30. Okay. So you could buy the lot for now.

after doing all of this, and by the way, think about how much you have freed up. What is your truck payment? 800. And what's your student loan payment? I want to say 300, $3.25. And what's your mortgage payment? I pay more than the minimum. I don't remember the minimum, but I pay like $1,600 a month.

And that's with extra? Yes. So should we call it $1,200? You think you're putting a few hundred extra? I think it's in the $12, yes. Okay. So you would free up $2,300 a month, which means you could save $28,000 in one year just by freeing up the payments. That's by doing nothing else. That's without your extra. Which means you could probably cash flow this build. After I pay everything off. Yeah, exactly. And it reduces your risk. Think about that. Now you're not freaking out because you don't have a mortgage payment. You don't have any consumer debt. And you can cash flow this whole project. And then you're less worried and less desperate as you go through. with this. Okay. That puts you in baby step seven. So then the world is your oyster. You can invest more

than 15%. You can purchase real estate and cash. And that's exactly what you're going to be doing, right? You're not taking out any debt to do this lot or build? I wasn't planning on it with the cash I have currently. Plus, one of my 401k's is actually a money market, which I have like $130,000 in it. You're telling me you didn't invest the money? Was it ever invested? Well, some of it, like I said, that somewhere in Roth and traditional IRAs and a couple of one owner K. Okay. That's all through this market.

Yeah, but if you're 401K, if the money's in a money market account, that's not invested. So it's a separate amount. That's... Okay, so you do have a 401K that has investments? Correct. Okay. And then you just have a separate money market account.

I wouldn't touch any of those. I think you can cash flow this. It sounds like you have a great income, too. what do you make a year? Most years in the low to mid-200s. Fantastic. That's great. And so worst case,

this lot and build might be delayed a tiny bit, but man, the piece it's going to give you and the de-risking you're about to do by paying everything off, it's going to feel so good. And I've no doubt, you're going to be able to stack up

that savings account right back to where it was. And I know it's such a weird way of looking at real estate because people, you know, they don't have the cash. Paul like you do, right, to be able to go in and do something. But the beautiful thing, when you do it all with cash, and you know this being in real estate, I'm like, you know, even if the world goes up and a pandemic again or whatever and everyone kind of freaks out and I don't

know, there's just something about saying, okay, I don't owe a bank this money on this real estate. And if we have to sit on it for a little bit, we're in no rush. We don't owe anyone anything on it. So we can actually, we're not urgent to get rid of it because there's a payment and we're all stressed about it and you would actually possibly lose money in that way, we're going to just have the ability to have time on our side and all the control and all the power. And then when it does sell, and I'm praying it does. And you make 100 grand, that's an extra 100 grand just to you guys, right? There's nothing to pay back. So there's something so nice about it. And I know you said originally you were going to do that anyways. But I would encourage you too, because this plan,

the baby steps, it does cause a little bit more patience because you are going to have to save up to do where you think like, okay, but I could just do it today because I have the money. But doing it in this order, it's a little bit slower, but it has way more control and way more peace. And that's kind of, that's what we're solving for. Okay. All right. So the big question, everyone wants to know. Are you about to go pay off your consumer debts today?

We are going to plan it, yes. Yeah. That's a win. Man, I'm so proud of you, Paul. Dude, you're a stud. That's incredible. Well done. Because if you have the savings muscle to save up 350 grand, that tells me you were going to

build massive wealth. And so this debt is just a little, you know, it's an ankle biter at this point for him. That's right. That's right. Just get rid of it. Get rid of it. That truck drives different when it doesn't have a payment attached. And you can never be underwater on a paid for a truck. That's the beautiful thing. Yes, not having that payment. That is a controversial Ramsey principle is paying cash for investment real estate. It usually shuts. It's like we're dream killers. I know. Like Rachel, can I get a property? I want to be an investor and I want to have an Airbnb. And we're like, do you have money? To do that? No, I can do a nothing down program. I found on TikTok. I bought a course from Jared and he's

never trusted Jared with a course. It's so true. But again, our plan is not about, well, what is the fastest way to get a bunch of money quick? Yeah. You have to factor in risk. You have to factor in your own mental and emotional health when you have that payment you have to make every month and it has to work out and you have to get it booked on the Airbnb and you have to have to have a buyer for that spec home. Or it's coming out of your pocket and then the whole thing. It's just like, oh. And then there's a job loss or a spouse wants to stay at home or there's a health issue. Life happens. That's the thing. When everything's going perfectly, sure, on paper,

you might be able to make it work. But we plan for the things that are unplanned. Yes, because if or when life happens and all your plans go up and smoke, then that's where that's where the stress in life comes, right? And so if we can be avoiding that for, yeah, maybe not making the risky big moves, but over time, just like Lonnie, we talk to, you know, our babysubs millionaire, over time it works. That's the thing. Slow and love. Yes, it is. You've got to be a crockpot and a world full of microwaves.

And that is so difficult because our world is moving so fast. And if you just go on social media, you're like, I'm behind. It's too late. I need to do 17 things. Why don't I own 10 Airbnbs by the time I'm 30? I'm a total failure. That's how it feels if you just start scrolling the internet. And so you've got to unplug, get the blinders on going, I'm going to build well,

with peace instead of risk. That puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.