The Ramsey Show - App - Money Is a Tool To Create a Life You Love

Episode Date: February 21, 2025

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing experiences. I am Rachel Cruz, hosting this hour with my good friend and bestselling author, George Camel, and co-host of the Smart Money Happy Hour. That's right. We do another podcast together. And so we are here to answer your questions. So give us a call at 888-825-5225, and we'll be talking about your life and your money.

So kicking us off this hour is Marissa in St. Louis. Hey, Marissa. welcome to the show. Hi, happy to be on it. Love smart money happy hour. Thank you. Got your two favorite hosts then. My question is, should we get a high deductible, high premium health insurance plan or a traditional health insurance plan? My husband and I are on baby steps four, five, six, and we just had our third baby in November. Oh, congratulations. So exciting.

Thank you. Are you guys relatively healthy people, would you say? For the most part, yes. Our two older kids have both had to have tubes in their ears twice. So that's not fun expense to have to pay. But other than that, we're mostly healthy. Okay. Okay.

Yeah, because I feel like for me, George, that's kind of how we've decided it overall. Health of the family. Yeah. I mean, that's kind of the way we've dictated it. I mean, I don't know about you, but... Yeah, there's kind of like a spectrum, almost a bell curve if you think about it and you go, all right, if there's a ton of health issues in the family, the high deductible health plan could be good

because you'll hit your out-of-pocket max and it's going to be 100% covered. And if there's very little health issues in the family, it could also be good. And if you're somewhere in between, you might want to go with a traditional plan. Now, I have chosen to go with a high deductible health plan. I love the low premium.

You guys are in Baby Steps 456. You can take on a little more risk from the insurance company by having that higher deductible. And I love the fact that you get the health savings account with many of these high deductible health plans. And that's a really cool health savings tool, but also kind of a life hack retirement option as well, because you can invest inside of that. And it's triple tax advantage. So I'm just a big fan of the high deductible health plan, but again, it's a very personal decision based on the health

of your family. Have you guys priced out both, Marissa? Yes, we have. And the reason why we're going through all this is because with the third kid, we decided I wasn't going back to work, and so we're going from everyone being on my health insurance plan to now all of us being on my husband's. Got it. And what would be the out-of-pocket max on his plan now for the whole family? Oh, gosh. I believe it is $16,000.

$16,000. Okay. And how much do you have in the emergency fund? We currently have $17,000, but with me not going back to work, we're about to up it to $25,000. Yeah, I think that'll give you some peace. And again, you can price it out. You can even talk to Healthcare Insurance Pro through RamseySolutions.com to help you kind of navigate some of this, and you can crunch the numbers. I personally wouldn't burn too many brain calories over it. You can kind of look at what you guys have spent on healthcare in the past, what the premiums are, what the

deductibles are, the out-of-pocket max. Those are really the main things you want to look at to decide. But the main thing is you got good coverage, you know what the in-network care is, and you're not going outside of that. And do I have good care with the network S that I've chosen? And so when it comes to the Ramsey plan, I go, what's the cheapest option I can pay for that still covers my family? Because really you want for the big catastrophic stuff. That's right. A little ankle biter stuff.

I'm like, whatever. Well, because yeah, you got three kids. So you're going to be going, you know, you're going to go to the pediatrician during the winter, probably one or two times. But if you're getting, you know, tubes and surgeries, that's where you want to go. All right.

I want to know this is my max out of pocket. Yes, exactly. That gives me some peace knowing that's in the emergency fund. That's a worst case scenario. Good to go, all right, I want to know this is my max out of pocket. Yes, exactly. That gives me some peace knowing that's in the emergency fund. That's a worst case scenario. Good to go. All right, let's go to Holly in San Antonio. Hey, Holly, welcome to the show.

Hey, thank you so much for having me. I appreciate it. Absolutely. How can we help? Well, I got started with you guys late. I am debt free now with the exception of my mortgage. Oh, great. But I didn't start investing until about age 55.

I'm 58 and a half now. I fully maxed out my Roth as much as I can. I have another mutual fund investment that I put my 15% in every month. But what I have is years um, years ago, I got into an annuity and I had about 27,000 sitting there. I stopped contributing to that and started contributing more to my mutuals and the Roth and everything. My question is I have, if I pull it out early, so basically a year early, there's a 10% penalty on that. Would it be valuable for me to just pull that out now, roll that into my mutual funds, or should I wait for a year and then pull it out when I hit that

59 and a half? What is the 10% penalty amount to? What's the dollar amount? I have about $27,000 in there, so it's about $2,700. Okay. And what would you pay to keep it going for the next year until you can cash it out without penalty? It's nothing. I'm not putting anything into it or anything at all. It's just sitting there. Then, I mean, I'm doing the math on this going, all right, I could pony up $2,700 or just leave it for a year.

That's not a long amount of time at this stage of the game. So it might just be worth waiting. Okay. Yeah, is it a variable? What type of annuity is it, Holly? Like a variable or a fixed? I got to be honest. I believe so.

It's been sitting there. It's not earning anything at all. Totally, yeah. Yeah, they do not have good returns. And I'm sorry that you even fell into this trap. Annuities make sense for almost nobody. And the only one that would even be okay in the Ramsey world, if you really wanted to do it, is a variable annuity. But even then, you're better off investing. These are used to prey upon people who are scared of the stock market, who want the stability, but they don't realize they're missing out. And there is actually more

risk in missing out on the returns. And so I would just let it sit. You know, the damage is done. You're going to be okay. Do you have a good nest egg? Are you going to be able to retire when you want to? You know, I would probably, you know, I would love to retire at 65, but I'm also of the mindset that if I'm still doing good and enjoying what I do, I'm just going to keep going. So. Absolutely. Yeah, that's great. I'm working on building as much as I can. I don't, I mean, I'll get a teacher pension as well.

So that'll help. But I want to work as long as I can to build it up as much as I can. Yeah, if you continue to max out retirement accounts from, you know, you said you're 58 and a half for the next seven years or so, well, also your investments are going to double in that amount of time if it gets an average 10% rate of return. So you should be hopefully in good shape with the pension and everything you've got going on, but I wouldn't let my foot off the gas for sure. No, absolutely not. But I thank you guys for all your help because you've helped get me to this spot and I can't

thank you enough. That means the world. You did all the hard work. Yeah, you did it. So yeah, for sure. Wait a year so you don't have to pay that 10%, but then I would take it out and invest in, like George said, kind of that seven-year mark. It's always just an easy math, Holly, too, if you're like, okay. Because if you pulled out and put in a mutual fund, you're going to get 55 grand or so. Yeah. You know, just sitting there. Way more than you have in the annuity.

Tons. I mean, it's crazy. These ann annuities rachel they're being peddled more well it's because of the advisors yeah and it's because of the fear element that people are i mean and especially after an election year when they house a mark when the housing market even feels like oh my gosh it just everything just feels big and scary out there and it feels safer to put your money in something like an annuity because you don't have the risk of everything. But yet your money's just, it's not making the return it could. And they're so expensive. The amount of fees and commissions built into these. I was going to say, they make a lot, right? The financial. I mean, it's why they push whole life in annuities instead of telling you, hey, just go invest in your 401k. You'll be,

they got to make their money. And so i don't like these quote-unquote wealth strategists and advisors that are really just insurance salespeople not george not i'm sorry rachel really just coming in coming in hot today coming in hot with high deductible health care plans and annuities it's a hot show it's a crazy show out there this is the ramsey show show. Welcome back. Going to the phones. We have Sarah in Riverside, California. Hi, Sarah. Welcome to the show. Hi, thank you for having me. Absolutely. How can we help? So I have some guilt and pride around using child support money. So I was in an abusive relationship. And by the grace of God, I was able to leave when my son was about three weeks old. Oh my gosh, Sarah.

I met my now husband when my son was six months old, and he's now 12. My husband and I had sat and talked and said, we don't want any money. We don't want anything. We want nothing to do with him. Well, the judge made the decision that it's not our choice and it's not our money. Um, it's for our son. So we were just putting all that money in an account. Um, we had some debt and, um, in 2021, I lost my job and we needed four walls. So we dipped into that account. As of January of 2025, we are officially done with Baby Step 2. We are completely debt free. Oh, congratulations.

Thank you. It's very exciting. I'm really happy to be there. But I have about $4,000 from that child support money that we said we'd never use. And I'm wondering if I should just pay it back like a debt and just keep going like if we were on baby step two, or the connotation of the child support money in the first place just kills me, and I don't know what to do about it. So this guilt, Sarah, I'm just double checking that the

facts are correct. You didn't use this money immorally. It was more of a conviction that you personally had with it because of who it came from. And you just, the thought of using it just feels gross and you had to use it at one point. But from a legal standpoint, you used it exactly how anyone else would use it, right? To help run the household because you're taking care of a child and that other parent is helping with that, correct? Exactly. Yeah. And what was the court order? How much and for how long? It was, originally it was until he was 18 and it was supposed to be $430. Um,

the only money that I've actually seen from that is the COVID money. Um, I was able to get his COVID check. I didn't know that it was coming. Um, my husband, um, adopted our son when he was four years old, everything finalized.

So that's when the child support stopped, but there's so much arrears that, I mean, I will still randomly get like a $12 check. Okay, so it's over essentially. You're not getting future payments. You just have this kind of savings sitting here and you feel like, I don't want to touch this money because it feels weird. Yeah, how much is in that account? In the account right now is $2,000 and i used four of it four of it and what are

you going to play what are you going to do with it eventually are you going to give it to him when he's 18 or or help pay for a car when he's 16 or college or what do you think that's what we were thinking um just a car or something like that um like i said my son my husband's been around since my son was six months old so my son doesn't know. He doesn't know any different as of right now. And eventually we're going to tell him. I mean, we have to tell him, but we're just not there yet. And he's not emotionally mature enough to be there yet. Sure.

Okay. So what I'll speak to, I'll speak to the money side of it, Sarah, from the sense that, no, this is not a debt that you need to pay. I mean, you use the money essentially how the system works and you use it exactly appropriately. And I know that doesn't sit well with you because of who it's coming from. And that totally makes sense to me. But I think kind of the quote unquote debt going forward, which is not a debt, but is to say, okay, how can we best set up my son to have a life where he, from a financial standpoint, understands money, doesn't have to walk through this debt-free journey, and we're setting him up in order to do that. And that looks like things like maybe college or helping with his first car, you know, whatever

that may look like for you guys. And for me, I wouldn't hold on to that emotional $4,000 anymore because I think you need to release that. But I think going forward, the motivation now is to pass a great legacy onto your son, regardless of $4,000 or not. So I totally understand how that can feel like, oh my gosh, we use this money and it feels so gross. And I hate it because I don't, he's a terrible person. But on, but you know, you, you guys were in a pinch at the time and that's what that money's for is to help take care of your son. And that's what you guys did. So I would, I would let go of that because emotionally, I think it, I think it is holding onto you so deeply.

Yeah. So in the filing cabinet of your brain, we need to refile this instead of child support money from an abusive awful relationship this is changing my family tree money to set up my child for a better life than the one i experienced yeah and sarah too you know give yourself a little bit of grace you know if this was a sixty thousand dollar you know thing or something and you're like oh my gosh you're supposed to use it for a down payment on a house or you know what i mean like a mag like i feel like I feel like a lot of this magnitude and weight from a dollar standpoint, I feel like we could go at it a different way

because I could see, you know, the more money it is, the more weight it feels, right? So with this 4,000, yeah, I want you to release it for you, Sarah. Again, it's not about the dollars at that point. To me, it's that emotional attachment that's still there to him. And I want that release from you. So whatever that looks like with your own work.

I would have a goal for this money instead of letting it just sit there. It's only going to reopen the wound. So I would put it in a 529 plan for college. I would put it in a savings account for a car fund one day because that day is going to come and these things cost money and this is it's part of the deal and you know it's a shared burden because that person was a parent and this is what the court ordered and so I would it's hard to just say release the guilt Sarah you're doing great but that's the truth of it it's it's that hard and it's that simple to just go all right it happened that was the past and I'm going to make a better future for my kid now and And it sounds like you guys are thriving, and this child is so lucky to have you two.

Yeah, he's definitely blessed. My husband is literally a godsend, and he took him on like his own. And like I said, nobody knows. There's a couple people like family knows, but he doesn't know, and my husband stepped up in more ways than I could ever even pray for. Well, and give yourself to so much credit, Sarah, because we talked to so many people on this show,

and women specifically, they're in a situation and they don't feel like there's a way out. And whether from its financial type abuse where a husband's withholding and not allowing. Controlling. Yes, to physical, emotional. I mean, you can fill in the gaps. The spectrum is wide. And to break that cycle is so, so difficult. And as Dr. John Deloney says, who works with so many people in this area,

says that it's rare to have someone actually break it. So when you do, it is a- Something to be celebrated. It's an applause. I mean, it really is, Sarah. So when you do, it is a- Something to be celebrated. It's an applause. I mean, it really is, Sarah. So, I mean, I just commend you for that. I know that was 12 years ago, but that's incredible. Absolutely incredible.

Yeah, George, when we think about part of the baby steps and what she said, I loved because, yeah, it's baby step. They're past baby step two. They're moving on for that fully funded emergency fund and so forth. And there is something so freeing from the sense of, yes, the dollars and cents are there, right? We're being wise with our actual tactical money. That's, you know, very important. But it's so much bigger than that. It is like the place where money sits in our lives, the value of which we give it. And when you are out of debt, you have that emergency fund. You don't have to be obsessed with it.

You don't have to stress about it because you're setting yourself up so well and what that speaks to your kids and a household is everything. To me, that's part of changing the family tree. It's not just from a monetary standpoint, but from an emotional standpoint that money doesn't have to be a stress point in our lives

because we have control over it. Yeah, and there's a lot of belief there. People think there's some sort of like financial DNA that you're born with because of the environment and place and parents. But we're proving it with Sarah that you can break chains. You might be the first one in your family to become debt-free,

to create a better life for your kid, for your kid to go to college debt-free, for you to have a home that you own free and clear, for you to become a millionaire. And it's something you get to choose and it's a daily choice. And it's one of the hardest patterns to break because of all the shame and guilt from the past

and your belief system is so tied up. And you talk about this and know yourself, know your money, the different money classrooms you grew up in, it really shapes you. And you have to really try to break all of the bad stuff to get to the good stuff. Totally, yeah. Yeah, and as parents, you know,

whatever you can do, you know, we always say more is caught than taught. But from again, that standpoint of money, we're going to get in control of our money because yes, from a monetary standpoint, we need to know where our money's going. We want to be debt free. We want to start, you know, investing and letting the math work for us, like all of that. But more importantly, realizing that money's a tool. It is a tool to create a life that you love. Like that's what it is. It is not good. It is not bad. It doesn't have morals. And so how can that lesson and where money is placed in your life and in your heart and your identity, what your kids see, that speaks louder than words. This is The Ramsey

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$199 and it's hosted by Dave Ramsey and George Camel. Don't call it a comeback. And you guys have done this event before and it sold so well and people loved it because you guys are really diving into the tactical side of investing and like, hey, what does this really look like? And it's everything from stocks and mutual funds to retirement, to real estate, I mean, all the areas of it. Even beyond the baby steps.

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Can't call it a comeback, but it is. It kind of like a comeback. So get your tickets today at ramsaysolutions.com slash events, or click the link in the show notes if you're listening on podcasts or YouTube. All right, let's go to the phones and we have Zach in Albany, New York. Hi, Zach. Welcome to the show. Hey guys, how are you? Thanks for having me on the show. Absolutely. How can we help? So my wife and I are having a debate. We're on Baby Step four, five, and six, and we're having a debate as to whether to pay our house off or to buy a new vehicle. All right. So tell me about the car. What car do you want to replace? We want to replace her car. It's a smaller SUV, and it gets a little crammed with the baby seat in there

and we may be expecting a second one. So she would like to upgrade in vehicle so we're not crammed into her car. Okay, so it's more of a convenience upgrade, if you will, not that the car has fallen apart and we have to replace it. So not urgent, but more just out of like, yeah, the convenience of life. Stupid question. Could you get like a slimmer baby seat and solve all of this?

I don't know if they make those, but I guess I could look. Oh, they do. I've done my baby seat research, my friend. But anyways, let's talk more about this. What is that car going to cost us she wants? She's looking at a GMC Yukon. We would buy used, not new. Um, how big is your baby, man?

What's that? How big is your baby that you need a Yukon? Well, we already have one and we would like that, you know, we may have maybe having a second one soon. So just, just comfort, you know? Okay. Yeah. Okay.

It would be in the price range of like be nice to zach 50 000 yeah 50 to 60 000 um we are on baby steps four five and six we are baby steps millionaires how much you guys make a year uh we make we made 290 this year and we're on track to make about 315 this year incredible good for you guys track to make about $315,000 this year. Incredible. Good for you guys. Good for you guys. What's left on the mortgage? The mortgage is $186,000, and we would be paying cash from a brokerage account that's

non-retirement that we've been saving up for land, but we put a kibosh on that idea since we may be having a second baby now. Okay. So how much is in there? Priorities have shifted. Yeah. How much is in the brokerage account? About 80,000. Okay. So either way, we're not going to pay off the house with this lump sum, but you're saying, should we take that 80 and put it toward the mortgage or toward the car? Correct. So my thought was I'm more of the saver. My wife's a little bit more of the spender. My thought was if we took the entire brokerage account, put it on the house, we could pay it off in about a year and a half and then take the mortgage payment and everything else and save up for a car. Okay. Yes. I mean, so yeah, either way, Zach, let me say this. Routes A or B would work. Okay. So

I always like to find, I don't know, road C. Like, is there like a third option in there that feels good to both of you? Meaning you're running the numbers in the math. You're seeing, oh my gosh, if we put 80 grand towards this house, you know, you're putting it towards the principal. Like you're not going to, like you're seeing the seeing the math like really You know, it's on your side majorly in that way zach. So that totally makes sense um, so i'm i'm just wondering if you know, you guys don't have a second kid and I think what you both need to say Because you haven't really said it on this call and I think I just need to hear it from you That you guys do not need this car that people function with two babies and camrys all the time. And is it squished? Absolutely.

But like, you guys would be okay. Can we just, can we say that out loud? I 100% agree. I'm trying to be a good husband and do right by my wife because I am the money nerd. Making the... And I know this is something she wants. I hear you.

I hear you. Hard for our money. Totally. No, no, I hear you. And the car is not bad. Getting a Yukon is not bad, Zach, at all. But I want to make sure, because this is where lifestyle creep a little bit starts to play in. And I think if you both said, yes, we do not need this, like, we would be fine.

We could have two babies in the car that we have now. It's a small SUV. We would be fine. But I would love a great SUV. Thank you. SUV. That's what I would love. I would love it. Rachel said what I said just in a nicer way. And America loves her. I want her and I want you guys to be on the same page of why you're buying it because I don't want her to be like, no, no, no. It's like, I have to have this. Everything is just too small and I can't do it. Because if that starts to be the the mindset what's going to end up happening again it's lifestyle creep your life just starts you

spend more and more and more and more and what we need versus what we want starts to really blur so I think I would feel better if I knew Zach that both of you were like yes we do not need this car we would like this car listen Zach I have a minivan would love a yukon like that like i get it right i would want one i don't need one but i would i the car i would want one so second caveat she's not pregnant uh well she is we just haven't told anyone yet oh we're the first oh my gosh such an honor okay that changes aunt ray ray we are the first to know the news. Because it was kind of like, well, we might have one. Like, okay, well, might is different than she is pregnant.

And so there is an actual timeline now of, all right, nine months from now, we would want a bigger car. So here's my, and this is coming from Mr. Frugality, who was like, I'm going to pay off the house before I upgrade my car. Now, we didn't have a kid then, so it's different. But I'm going, hey, let's cash out the brokerage. We're going to pay some taxes on it. Let's buy her and set a budget, $50,000. We're going to get her a Yukon. Whatever's left, we're going to throw at the house. And then we're going to be gung-ho getting rid of this mortgage. Would that be a fair game plan? I think that's a great plan. Yeah, that's a great option. Yeah. With your income, the house is paid off within a year or two right yeah you guys are going to be fine especially because of your income right if

you if you guys were making a hundred grand uh i think i would slow all of this way down but you say you're buying too much car but you guys make three hundred thousand dollars my question answered zach do you think your wife does she will she would she emotionally say yes this is a complete want it's not like a need like we absolutely have to have it she acknowled yes, this is a complete want? It's not like a need, like we absolutely have to have it. She acknowledges that it is a complete want. Okay, that's great. And we're both, I mean, I'm more of the saver, but we're both pretty frugal. Yeah.

And so when she wants something, it's really not too often. And so I'm just trying to make that happen for her. Totally. No, I hear you. Yes, you're a great husband, Zach. So yeah, I would move forward. I would buy it. And again, especially that since you guys for sure are having to.

And from an income standpoint, what you guys have left on the mortgage and all of it, I think, yeah, I think you guys will be in a great position. And you guys are Baby Steps millionaires. So I'm just curious, are you going to buy new or slightly used? No, he said used. He said used. It would be certified. Certified pre-owned.

Lower mileage. Good move. Good move. Good man. Let someone else take that first hit on depreciation. Yeah, you guys are doing it by the book. I'm proud of you guys. There's no wrong answer here, but I would defer to the pregnant woman because I'm scared of them.

Me too. You don't want to mess with them, man. I'm just saying. It's a sensitive line there, huh? And this is a very similar situation because my wife wanted the bougie mom SUV and it hurt my soul because I can do math. But life isn't math. She wanted the car. We saved up.

We paid cash for it. And she loves it. And it's fine. And it was her dream. I don't need to make everything my dream. I will say babies can make everything very emotional, though. So I'm glad that Zach's sticking to the facts and the numbers, and the numbers look great. So present permission to spin, Zach.

A Yukon can hold two seven-pound babies, at least, bare minimum. Bare minimum. And congrats, Zach. We are excited for you. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves

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It's free at netsuite.com slash Ramsey. It's free at NetSuite dot com slash Ramsey. Today's question of the day is brought to you by YRefi. If you are struggling with defaulted private student loans, YRefi offers a great solution to get you back on track. For a low fixed rate and more flexibility, go to YRefi.com slash Ramsey today. That is the letter Y, R-E-F-Y.com slash Ramsey. May not be available in all states. Today's question comes from Alexis in Tennessee. We recently received credit cards in the mail from my son and daughter, who are both under the age of 12. When I showed them to my husband, he responded that he had taken them out in our children's names to help them establish a credit score before they became adults. We have followed

your principles for years, so I was shocked that he did this without talking to me about it. How should I handle this situation? This feels like there's a tinge of financial infidelity here. Behind her back, opened up credit cards in the kids' names. So weird to, yes not and not mention it and the way that you're when you said you know we've followed the principles from year for years if i'm assuming that means you guys are on the same page you're talking about money i mean there's some couples that you know they don't know what the other one's doing but if you are following a level of ramsey and that means you are you know connected and you're talking about money so the

fact that he didn't bring it up that feels that feels very off to me very off yeah and the fact he opened up credit cards in your kids names well i'm guessing he it's in his name they got cards with their names on it as authorized users yeah because if you take out a yeah a line of credit for a child right i mean you it's a trend because of these tiktok videos where they go hey parents here's a life hack for you add your kids as authorized users and they can take your credit score when they're 18 and have great credit so they can go get some more debt yeah well what we've heard too is people calling the show saying yeah my parents took out debt in my name to build up a good credit score and then they ended, destroyed the credit because they couldn't handle it.

And so you're just like, oh, it's, yeah. And it gets to be a fine line too of identity theft. I'm like, if you're, you know what I mean? Like it's kind of to a point of like- There was no consent here. I mean, yeah. So it's, I don't like it. I don't like playing the game.

And so, yeah, but a lot of, it is a TikTok trend. Yeah, there's, we have an article here related to this. Parents are gaming their kids' credit scores. And it's around the same idea of stories of people who had their parents add them as authorized users. There's some horror stories in there. There's some explanation, but it says many are taking advantage of these tools. A 2019 poll commissioned by creditcards.com, that's perfect, 8% of roughly 1,500 American parents surveyed said that at least one of their minor children had a credit card, presumably through authorized usership, because kids under 18 can't get their own card. And TransUnion data showed that nearly 700,000 22 to 24-year-olds had authorized user accounts. Oh, dang, yeah.

So, and here's the thing. I don't think these are terrible people. They're just well-meaning parents who have fallen for the system. Who go, well, this is the path. They got to have the credit score because otherwise, how are they going to rent an apartment? And how are they going to travel? And they can't book airlines with that. And I'm going, have you ever tried a different route?

You don't need to do all this gyration to live your financial life. Yes. There's so much more freedom, you guys, when you're chasing the credit score. You can live life without a credit score. You can do everything you just said without a credit score. It is possible. You can even get a house through manual underwriting

without a credit score. And so, yeah, I think like you said, it's good intentions. I'm going in saying, I'm gonna try to set my kids up, but you're falling right into the system that gets so many people, millions of people stuck and in that wheel of debt. And it's like, it's not worth it it's

not worth playing the game and then let alone having any level of risk for another human being of their financial well-being that if you screw this up it doesn't just hurt you it's hurting your kids then at that point i mean so it's just it's a mess it is absolutely bonkers and i cover this in my book breaking free from broke i have a whole chapter on credit scores a whole chapter on credit cards, and I unpack how to live life outside of the system. And it's not as complicated or as difficult as people would have you believe. Yes.

In fact, it's way more peaceful. It's way more simple. I don't have 16 cards to manage to try to get the rotating cashback rewards. I have a debit card and I use it and it has my money on it. And when that money's gone, it is gone. You know, it's funny, George. I feel like when things are less complicated, they feel less sophisticated, right? Everyone's like, oh, but that's so boring. It can't be the smartest way.

Yeah. Yeah. There's got to be so many other hoops to jump through. And you can live your life that way financially. You can, but you're going to be exhausted. You're going to be exhausted again with a system that is set up to screw you. Like that's what it is. It's not there to free you and for you to be financially free they want you in the system because they make so much money off of you but when you exit out of the system and you're like you know what i'm gonna live with a debt with a debit card with cash we're gonna save up and pay for things and we're not gonna sit here and try to play the industry's games over and over and over and over and over and over what is sophisticated as beast it is'm like, there's just that level there

that it is so much worth it than the mental dance and gymnastics that you have to play to play the game. Here's a wild concept. What if as a parent, you taught your kids how to manage money instead of managing debt? That's all a credit score is,

is how well you've managed debt. Doesn't reflect how much money you have in the bank. Doesn't reflect your income. It just reflects your relationship with the lender. And so that's how I'm aiming with my kid i'm going they're not gonna they're gonna look at people with credit scores and credit cards going why are they doing all that work dad and i'm like i don't know america's it's crazy lost her minds it's crazy out there oh man yeah parents don't uh take credit cards out and don't be an authorized user you follow our principles for years while you still clearly have credit cards you You don't get to pick and choose. This isn't a

buffet. This isn't a buffet. Get out of here. Get out of here. All right. Let's go to Shane in St. Paul. Hi, Shane. Welcome to the show. Thanks, Rachel, for taking my call. How are you today? We are doing great. Glad you called in. How can we help? Thank you. Well, I'm a relatively new listener. We're on baby step number two. And my question is, we have probably about $17,500 in credit card debt and a couple of other small loans. And we have some money set aside and i was wondering is there any way that you can deviate from that snowball plan uh tell me yeah why would you want to what's what are the numbers you're seeing shang they usually comes down to numbers okay um basically uh the biggest one we have is we have a credit card with a high interest rate

that has a balance of about 10 000 okay how much what's the interest rate on that uh it's like 18.5 percent i think okay and then we have another credit card with the balance of 7,500 and that interest rate is, is 9.9%. And then we have a, um, kind of like a small, um, home improvement loan with the balance of like $350 that you have to pay off. And then, um, I have a work loan, um, that I got through my work with 0% interest. And I have a balance of like $800 on that. Okay. And how much do you guys have saved? Well, we just got our taxes back.

And so we have about $14,500. Amazing. Oh, my gosh. So the math doesn't matter that much because you've just knocked out all the debts but the last credit card. Yeah. In this scenario. Right. So I guess my question is, you know, would it make sense to pay off the highest one, the $10,000 first,

and then pay the two small loans and then whatever's left, pay it on that last credit card? No. I mean, listen, if you're doing the math, I understand what you're saying because of the interest rate. And what we always talk about on this show, Shane, and what you're going to start to realize

is that personal finance and winning with money is so much more about your behavior than it is about math. And so if we were all chasing math, we wouldn't be in debt in the first place, right? So it's not a math problem. It really is us winning. And so the fact that you do have a bulk of money, which is absolutely amazing, what that does to me, that just that jump starts. I mean, tonight you could have that $800 paid off, that 350. I mean, those are just like ankle biters, right? You're just like, you just need to get in there and just get them done with.

And then to pay off a $7,500 credit card in full and it be completely done. And knock the next debt down to probably around six grand or four grand. Yes, that's right, that's right, the extra. You'd have almost six grand to throw at the 10K debt. So you'd be down to about $4,000 left. So the 18% interest,

the way you're going to attack this thing, it's not going to amount to much. Because you're not going to be in debt, Shane, that much longer. I mean, when you're looking from a math standpoint,

you guys could take on extra jobs and get that paid off in two months. Yeah, you throw $1,000 a month at this thing, it's gone in four months. Yeah, so it's going to be so quick that the math at that point doesn't matter. But I'm excited for you. You said a thousand bucks a month at this thing, it's gone in four months. So it's going to be so quick that the math at that point

doesn't matter. But I'm excited for you. You said you're a new caller, so I'm so glad that you're joining in. And using that refund for good instead of a vacation because you deserved it.

Well done, Shane. Well done. Well, thanks to all the men and women in the booth making this show happen. George, thank you. Thanks to our great audience here in Nashville, Tennessee.

And thank you, America. This is The Ramsey Show. Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with bestselling author and my co-host of Smart Money Happy Hour, George Hamill. And so give us a call at 888-825-5225. And we're answering your questions on life, money, relationships, the pursuit of happiness, anything and everything. So give us a call. To kick us off this hour, we have Jeff in Oklahoma City. Hi, Jeff. Welcome to the show. Hello. How are you today? We are doing great.

How can we help? Well, my question is, we are looking to take what I would consider an extravagant vacation this summer. Ooh, my favorite thing in the world, Jeff. That is so exciting. Call the right person. She's going to say yes. Well, then let's just get the yes and move on. Basically kind of looking for confirmation that it's something that would be okay to do.

So here's, I'll tell you a little bit of the history, and then we'll get into the numbers. My wife and I were early to mid-40s. We've got three kids at home. One of them graduates next year, and we'll have to report to school sometime summer of next year for sports. So this is kind of the last year to be able to take a family vacation and have that oldest one go with us. All in, we're looking at like $9, hundred dollars it is seven days two days is travel okay uh oceanfront all-inclusive resort um and going to the caribbean and about four thousand of that 92 is flight oh. It's so expensive. Getting out of the Midwest is horrible. Yeah, it's terrible.

And that includes, you know, vehicle rental when we get there, excursions, you know, going out to eat a little bit, even though it is all inclusive, you know, trying some of the local food. You've done your due diligence, Jeff. You've traveled plan like no one else. You have detailed it out. Okay, so where are you guys financially? Do you guys have debt? Do you have a you travel plan like no one else you have you have detailed it out okay so where are you guys financially do you guys have debt do you have savings so this I'll run through all the numbers here household income gross is 335 to 370 depending on bonuses which you know happens every year so probably close closer to that 370 number. The only debt that we have is our house.

We owe 273 on it, purchased it in 2021, 3% fixed, bought it for 370, valuation is 620. How much in savings? IRA, we've got 396. They're just your normal cash savings, like emergency fund plus whatever else. So the emergency fund, we've got $53,600, which a six-month emergency is 24-5. All right, Jeff. Jeff, this was the voice. I'd hit the buzzer, I'd spin my chair. Jeff, I want you to upgrade your room and spend

a little bit more. I'm a little miffed. You're only spending nine grand. I know. Go upgrade you and your wife to first class. Spend a little more, Jeff. I'm not kidding. You are 100% okay.

And if anything, you got some wiggle room, Jeff. I mean, okay, that was fun. And your anything, yeah, you got some wiggle room, Jeff. I mean, yeah, okay, that was fun. And your IRA, $396,000 is what you said. What do you guys have in your 401k? So in the E-Trade account, we've got 27.5. 401k is horrible, but we're now putting 15% in, so it'll be caught up very quickly.

246 between the both of us um and then outside of the emergency fund of 53.6 just in another savings account we've got 53 000 and then you know around 15 000 in the bank account i've lost track of how much money you guys have you have that much you're doing great is your wife the same way as you? Yeah, yeah. Does she have fun? Do you all have fun? We've got three kids, so. Yeah. You know, so we're always chasing them around. Sure, sure. I'm messing with you, Jeff.

I'm messing with you, yes. We don't live extravagant or anything. Vehicles are paid off. They are, you know, a few years older, but, you know, few years older but you know there's no sense in buying a new vehicle when you can get one a few years older that's low miles for half the cost so jeff you're you're a jewel of a human being you're my spirit animal jeff i appreciate you george wants to be you when he grows up is basically can't wait that's a good

seven years from now this is what i have to look forward to. My wife convincing me. I'd much rather have more than 246 and the 401k. I think you will be totally fine. And I'm really excited for you, Jeff. I've talked about this a lot on the show because I think it was like one of these moments that I heard this and I thought,

that is so good. Arthur Brooks talks about there's five things you can do with money. Four will actually buy you happiness. Like your brain, scientifically, has a level of happiness in it. One thing you can do with money

that has no happiness. The first one is to give. Be generous. You actually can buy some happiness doing that. A saving actually creates a level of happiness because there's progress being made. And in our psychology, it's good for us to see progress. There's one about buying your time back. So having someone mow the lawn, right? And you use that time to go. We do that. Yeah. Yeah. Hang

with a friend. And then the fourth one, Jeff, you ready? The fourth way to literally buy happiness is to buy experiences with the people you love. So that can be a great dinner out. That can be a vacation. So I'm saying, oh, and then the fifth thing that does not buy happiness is buying stuff. You get a temporary hit and then no long-term happiness through that. So you are doing this very wisely. And this is something that you you we always say you want to

give you want to save you want to spend and this is your spend and i want you to spend it in this way because i think it's going to be such a fun week for you and your family and yes you have our full permission and you have my permission to upgrade you and your wife to first class so just just take that take that little night rachel said could. And then when you get back from the trip, everyone gets a $1,000 shopping spree. Stop. Stop. Here we go. Stop.

No, because then you're buying stuff, George. He's not going to get happiness doing that. I'm just saying. I feel like the kids would really like you for that. Yeah, no. It's great. Well, the kids, I will say the kids do not want for anything, but they also have got reasonable expectations as well, because we've tried to, you know, raise them to not want what everybody else

has. So good. You've raised some great kids. I'm just surprised they want to go on vacation with you guys at this stage of their life. That's the best part. They raise kids who like you. Yeah. Well, you know, the oldest one, the 17 year old, you know, it depends on the day, but the other two, you know, they're under 12. So mom and dad are still pretty awesome. This is going to be, this is going to be so fun. And, you know, I'm kind of, I'm kind of messing with you, but honestly, one of the most powerful financial principles is contentment. And Jeff, you just sound like such a content guy like your priorities are so in line and when you live like no one else we always say you get to live and give

like no one else and Jeff they're gonna be living like no one else in the Caribbean that's right paid for vacation making great money and I mean and just doing it it's it's awesome Jeff will be tracking it in his excel spreadsheet. Jeff will be. He's the dad who had the map quest printed out, ready to go for the trip. Like, this is the dad I aspire to be. A hundred percent. I love it. Jeff's going to know.

And they make such a great income. I am not worried for a second about their retirement. No, no. And it's $9,000, right? It's not $29,000 or something. We're not talking about that. They're already baby steps millionaires. They're very close to it in their early 40s. right it's not 29 000 or something you know we're not we're not talking about that so someone said they're already baby steps millionaires are very close to it in their early 40s jeff i really am

i'm so excited for you and your family enjoy that caribbean vacation it's gonna be so fun send us a picture when you come back rachel do you ever get these sketchy text messages that are like hey you need to update your address and verify so we can get you the package you didn't order. Yes, I have, George. Sketchy and never trust them. And that's why we recommend Delete.me. They help with that. Yeah, they do. Delete.me actually goes in and removes your information from data broker websites. And it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your kids' names, your name,

everything is just out there for scammers and spammers to find. That's right. And then once they remove your information, then they're going to send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far, get this, they've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites, and saved me 77 hours of time. It's incredible. Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindeleteeme.com slash Ramsey. That comes out to less than nine bucks a month.

Super affordable. It's amazing. So again, that's joindeleteeme.com slash Ramsey. Make sure to check it out, you guys. Well, if you are a business owner or you know someone who is, you know that running a business is hard. It's a lot of work. A lot of energy goes into that. And as you look back at the challenges that you face when it comes to building a business the right way, Dave Ramsey really kind of took a moment and said, yeah, I've been through this journey and I want to put some of these principles and what I've learned about building a business into a book. And so he

has a new book out called Build a Business You Love. You can pre-order it now for $29.99 and get over $315 of free bonus items. My gosh, which is early access to the ebook and enhanced audio book and instant access to the Entree Leadership Hiring Playbook. So you can order today at ramseysolutions.com slash store. Or if you're watching on YouTube or listening on podcasts, we'll put the link down in the description. All right, let's go to Claire in San Diego. Hi, Claire. Welcome to the show. Hi, guys. Thank you for having me on. Absolutely. How can we help? So my question is surrounding dating and finances. I'm kind of looking for advice you have on dating debt and things to think about for the future. I have a boyfriend who's a little older than me. He has a really

stable job. He lives down here in San Diego, and we've been talking about moving forward in our relationship. Everything's really good. All our values align, our faith aligns. There's really good companionship, but it's come out that he has about 70K in debt. And just the background that I come from, I'm not sure how comfortable I am committing to taking on that debt with some of the habits I've seen. He wants to be in a better place with his finances, but he does like to shop and go out and do a lot of things. And he's put about four years to be able to pay off that debt, but I feel like it could maybe be a little sooner. I'm not sure if I have the full picture. So I'm wondering what kind of questions would be good to bring into a conversation,

what things to look for, what actions need to be taken, or, yeah, any advice you guys have. All right. Yeah, it's a great question. Do you, this $70,000, was it, do you feel like he hid that in any way and it's just come out recently or was it a sense that you guys just kind of started talking about the subject and he just happened to say oh yeah and I'm yeah yeah I'm dead 70,000 worth um like was it more just so yeah was it more secretive or was it no we just ended up talking about the subject and then he told me

no it was more talking about the subject he had told me earlier in our dating relationship and just the timing of it I I didn't pry for numbers or anything so now that we've been talking a little more seriously I'm trying for numbers and it's uh around 50k of student loans and then about 20 to 30 um in car payment okay okay um so. So yeah, I mean, I always, you know, I always think when it comes to relationships and debt, it's not always the debt that scares me. I mean, if you guys ended up going long term, yeah, you would be helping pay the 70 grand off for sure if you guys got married. But again, the debt, it's, I mean, couples have tackled more than that, you know, coming into a relationship. So I would not not marry someone because of that personally.

But it's more the value system, kind of what you were speaking about earlier, that can raise some red flags. So I'm trying to get clear from you because knowing that opposites attract and that is so normal. OK, so Winston would probably describe me the way you describe town, that she likes to shop and she likes to spend money and Winston would save till the day is long and that's all we know um and and so so there's going to be savers there's going to be spenders there's going to be that the person in the relationship that loves knowing every single number of everything and they have excel sheets and they have the every dollar app and they I mean they're doing everything possible where the other one's like oh oh yeah, we're on track. We're good.

I don't need to know every single little detail. You know, that's the free spirit. So there is going to be a give and take and a personality tendency with money. So I'm trying to get a check from you. Is it just a different tendency and he just spends because he probably is more of a spender or do you feel like, no, it's bigger than that?

Like there's a problem, there's an issue here. And that's what I'm trying to gauge from you. What do you think? I think that's what I'm trying to figure out. I come from a family that's all savers. So I feel like I haven't really experienced the opposite of that. I feel like it's a little bit sometimes like,

oh, that little instant gratification of, I just got this little knickknack, but then sometimes it's experiences. He takes, I mean, dating, he's taken me out to do some really fun things as well. So he has value on both of those things. And I'm just trying to figure out from him in a way that's healthy. Yeah, totally. So for a dating relationship, what that habit is. Yeah, for sure. So I think some questions I would ask is, is that value standpoint that you don't want to be having someone that's going into debt to do these things, right? That you want the baselines covered and that's, you know, a level of wisdom and, and, you know, being out of debt, having an emergency fund, having savings, like all of that, that is wisdom.

And we want all of those first and foremost. And then if there's some extra that, yeah, we can spend on top of that. But making sure with him, like, hey, is living with debt in that lifestyle, you know, what does that look like for you? What's that value system? And if he really is like, oh, yeah, I don't want to, you know, I want to be able to get out and I don't want to live with credit cards and debt and all of that, then that's a checkpoint, right? It's like, okay, that's good. And then you can even ask them, because all spenders, I think, understanding our motivation,

or I would say savers too, understanding the motivation of why you do things gets to the heart of it. And so the motivation in that, and for spenders, you know, sometimes the motivation is fine. And it's like, yeah, it's just kind of a thing I wanted. I saved up. I have the cash for it. I'm not under some illusion that this purchase is somehow going to make me happy for the rest of my life.

You know, I'm not bought into this illusion of marketing and all of that. Like, I just wanted the thing and it's great. But then sometimes, Claire, you know, as a spender, and I can speak for myself, I ask my question a lot of, okay, Rachel, why are you buying this? And if I can be as honest as possible, it's like, I'm kind of bored and I want some excitement and that's why I'm doing it. Or I always ask myself, if nobody sees this purchase, do I still want it? How much of my motivation of having and buying something is for other people and not even myself, right? So getting to more of the heart of the why behind it, I think may help you see either, oh yeah,

that gives me some peace. If he can have some level of awareness of why, because the way we spend our money always is going to tell a story about ourselves. So understanding that. Or maybe, Claire, you find out some things and you're like, that feels like a slippery slope. So I think through some of those conversations will be interesting, i will say for you it's going to be a little bit difficult so give him some grace because you are coming from like you said you're a saver you're raised by savers and you're like i don't even know what this alien which is a spender looks like like how do they function and are they okay i mean um so give him some grace there but i think have some discernment around it i think is important.

Would he be willing to go through Financial Peace University with you and go, hey, I understand, like I grew up in a different context. I have, you know, I grew up learning about how to manage money. It may be something he just didn't have. And if he's willing to learn and willing to get on a plan, that's a green flag. But if he goes, nah, I'm good. I'm going to do my thing. That would be a red flag to pause moving forward in this relationship okay yeah i bought it up once and it was not brushed off i was like

oh yeah that would be cool so maybe it's something i bring back up okay how much do you know how much he makes he makes about 140 a year okay so he makes great money which tells me in san diego though in san diego it doesn't go as far. Yeah. I was just wondering, is this on fire? Does he need to get rid of the car yesterday? Has he sort of had any sense of urgency when you talk to him? He has two cars.

No, he has two cars. His family history doesn't seem crazy great with money, from what I've seen. Yeah. It's kind of like a little bit of living in excess and you don't really have the means to do so yes yeah um that's a good observation he's just kind of doing what he sees and what he knows yeah him on that the second car he's said in the past that it's something he could easily sell if he wanted to and not have to make the car payment. He has two car payments and one of, like, it's just kind of toys for him. Exactly.

And one's paid off. One's not. Yeah. So, yeah, I mean. The second one's just a toy. I mean, again, I'm not trying to defend him by any means because, again, it could just be a mess, Claire, and you may be like, oh, my gosh. But, you know, like you said, he may be just doing what he has seen and doesn't know a difference. So then another, you know, bucket I would put, not to vilify his family by any means, but to be like, hey, what are things that your family does

with money that you like? And what are things that you don't like? You know, and ask them open ended questions and then seek his humility. Is he willing to learn and do something different? If he's stubborn in something in a way, you know, again, that's more of the yellow red flag. So there's some digging there. But just because he's a spender, Claire. I hope he's willing to change because Claire is worth it. She is. You are worth it, Claire. This is The Ramsey Show. Hey, guys, I'm Jade Warshaw, and I want to talk to you for a quick second about student loan refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out,

refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today at laurelroad.com slash Ramsey. There, you'll find helpful resources like a student loan rate table, a refinancing calculator, and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5%. And you can get your interest rate even lower if you sign up for auto pay. But if your situation is more complex, sign up for a free 30-minute consultation with one of their student

loan refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan, so make sure you run the numbers. But for some people, it is the right move. Learn more at laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Going to the phones, we have Paul in Washington, D.C. Hey, Paul.

Welcome to the show. Hey, thanks, guys. This is such an honor. And you guys have been such a blessing to my wife and I as we got through Financial Peace University. So thank you so much. Amazing. Yes, absolutely. Well, thanks for doing it.

Thanks for being a listener. How can we help? Yeah, so here's our situation. So my brother and sister-in-law surprised us by opening a 529 for our newborn son. And at first we were, yeah, at first we were appreciative. But when we asked how it works, since we didn't really know much about the logistics of 529, they revealed to us that we can't contribute since the 529 is under their name and that we would have to ask for permission, their permission, for how the money is going to be later deployed. Now, for us, it doesn't really feel right going to my older brother to ask for money for my son's college, let alone getting their decisions for our son's education.

Yeah, 100%. 100%. This is crazy, Paul. Why would they do that? Like, I don't understand why they wouldn't just open it up in the child's name and then hand you guys over the account. Why do they want control over that? That's kind of a part of the question that we're talking about today is number one understanding 529 but also just um more or less handling family logistics of this now just to add context i do

work in family business specifically for my brother right okay so um we're even now we are planning on changing jobs eventually now um of course we're thinking that we're creating a situation where the 529 almost creates a financial dependency on them that might create future tensions down the road. So ultimately, we want to know your guys' thoughts about family members opening 529 for their relatives, in this case, their nephew, and what you think we should do. So yeah, because we're trying to, all these are great people right this is our family we love them but we want to make sure that we're doing the doing the right thing too with setting up for our son so that he has the liberty and us as parents the responsibility

to help him 100 so yeah that's our contact yeah i mean no your line of thinking is spot on. Again, I go back to, it's so interesting to me that they want that level of control because you can open up a 529 in a child's name and you give all the rights to the parents and then the parents just handle the account over there, right? I mean, that does happen. Family members do that. So I don't understand why they still want control over it. Yeah, because we did have a conversation with them uh first thanking them and we did ask them if they were able to switch it over from their name into our name so that we would just uh take control from

there on out kind of like give the keys to the car to us which they declined that and they insisted that this was their gift and they wanted that but it. But are you telling me, is your child the beneficiary on that account? Our child is the beneficiary. That's correct. Okay, got it. Because you said they opened it in their name, and I went, wait, what? Are they putting themselves as the beneficiary? But no, your child is the beneficiary, but they are the owner of the account.

And that's the part that gives you pause. So here's what I would do. I wouldn't count on it. I just wouldn accept it yeah you they anyone can open an account for anyone and so that's the thing is like you just go hey i'm gonna ignore it if there's money there and they choose to give it to your son wonderful but i would plan for your own child's college and act like this is gravy on top if it ever comes to fruition sure okay okay yeah ultimately yeah sorry you go ahead first no well yeah i mean it's it's so um you know the it's paul gosh the strings attached element that's what i'm trying to get at is the element when it comes to families and giving gifts right we talk to a lot of people

on the show and there's a fine line between enabling some people call and they're like oh my gosh my sister still needs money because she can't hold a job. Am I enabling her or am I helping her? You know, like that's the conversation. But when it's over here with just a gift and they say, yeah, we just, we want to be able to help our nephew. The healthiest way to do that is no strings attached that I am giving this to you. I don't need control over that anymore because it's a gift. is now yours and because it's in your child's name you as the parent should be responsible for that right so you're uh you're knee-jerk in this and you're exactly right that gets very messy especially if they are wanting a say over how he's gonna use it when he's 18 and what happens

if he goes to a college they don't like or gets a degree they disagree with? Now it's awkward. And they're not the parents. I wouldn't worry about it. You can have multiple 529s in a child's name, so I would open one up that you guys control, and I would fund that. And if people want to gift money, have it funded in there. And if they want to put money in this account

and they want to give it to your kid one day, that's great. But again, I wouldn't count on it, but I also wouldn't be like, I would let go of the resentment over this. And unless you think there's malicious intent, it might just be them going, hey, we want control over this if we dump the money in. I understand.

Now, one other aspect to this is, should we have a mature conversation with them and decline the 529 offering now? Just because I don't want this thing to turn into a mess later where it grows up to maybe a good size, which then they become resentful that they put in all this work and effort for their nephew. Right. Only to have the parents later. Well, here's the thing.

You can change the beneficiary at any time. So if your kid doesn't use it or they have whatever kids they have grandkids other nephews they want to change it to that's their right as the owners of the account and so it's nothing for you to decline if they offer it and you don't want it then that's on you okay you wouldn't have a conversation george see this if it was my older brother i'd be like hey man this just feels yeah i would sit down and have the conversation paul i would would. And just say, hey, yeah, this, it just, it's, I, and put it on you, right? It's not, oh, well, you're doing this. I don't feel comfortable as Paul the dad. Just, I don't feel, yeah, I don't feel 100% comfortable because I don't know what the next 18 years is going to look like for my child. And I just want

to be able to know that, number one, college is funded and that as parents, like, we're going to look like for my child. And I just want to be able to know that number one, college is funded and that as parents, like we're going to be able to do that. And we're going to do that on the side. And depending on what he wants to do with that money, I want us as a family unit to be able to make those decisions together and not involve you guys in all of them. And so that's really what we're setting up for our family. Thank you so much for the offer. If you guys want to continue to put money in there or it just sits over there, that's totally fine. And maybe at 18, he may use it. He also may not. I don't want to tie my son to this either.

So if you guys emotionally are great with it, have an empty hand and say exactly what George said, that if he doesn't end up using in this account, you can actually move actually $35,000 over to a Roth IRA. There's an option there. Or move it to another child in the family. There's an option there or move it to another child in the family. That's an option. But I want all of this just to be said out loud as we start this. And that's what we're feeling and thinking. But thank you so much. I mean,

that's so kind of you guys to even offer. But yeah, but I'm not 100% comfortable with every element of that deal. Yeah, you guys are the best. This was extremely helpful and gave a lot of clarity to a hopefully not complicated family situation. Yeah. Thank you so much, guys. Yeah, absolutely. Absolutely.

Yeah, that's an interesting one. Yeah, I just, I want to know what's underneath all of this. Is there any kind of like sibling, you know, he's in a family business with his brother. And so there might be more to this that we can, probably need to unpack in a therapy session versus the Ramsey brother and so there might be more to this that we can probably need to unpack in a therapy session versus the ramsey show but there might be more to this yeah there could be a hundred percent yeah i mean we get but best case it

wasn't malicious and they just go well we're funding it so i feel like we should have a say and that's okay to say no we're not we're we're not comfortable with that feels so weird though george if you if i can imagine saying that to a niece or nephew like i'm funding this like my brother loves our daughter william and lydia but i want to say over what lydia's gonna do i don't know like that feels so i don't know that feels so odd to me yeah if my brother opened an account for my daughter and said well you don't get a say and i i get to control where this money gets used and how i'd be like no then, then we're, we're good. I mean, yeah. And especially a 529, cause it's, it's for education. It's not like it's this big trust fund and it's like, Hey, I want to make sure the 18 year old is like semi mature before they get this money. But from a character standpoint, it can only be used for education.

So I'm like, I don't know. There's not much you can like screw up there. Yeah. Unless Paul's, you know, I'm kidding, Paul. paul i was gonna say unless the brother is like oh uncle paul you know he's not good with money but i think you are paul so i just want to know we need the brother online to go well she's gonna he's gonna go to liberal arts college i'm not gonna give you we should start a new show the family conflict show hey paul we got your brother online that would be amazing the surprise come on Come on out. You are the uncle. That's a little too Maury for me. Maury.

Maury. It has a little bit of that feel to it. Oh, man. Good times. Paul, I hope that helps, and I hope, like George said, that it's... Open up your own... Here's what I say, Rachel. Go fund yourself.

You like that? That's as edgy as I get on a family-friendly show. You're crazy, George. Go fund your own kids 529 and not worry about what everyone else is doing. All right, let's go to Savannah, Georgia, and we've got Blake on the line. Hi, Blake. Welcome to the show. Hey, thank you guys so much.

I'm so excited to talk with you guys. Thank you. Oh, I'm so glad to talk with you guys. Thank you. Oh, so glad you called. How can we help? Yeah. So I'm calling you guys today because I really need a little bit of guidance with, you know, this part of our lives. I've been married for seven years. We got a daughter. She's about five years old. And we were living as missionaries in South America. And unfortunately, we had to come off the field around July last year. And so we've been readjusting to life here in the States, which when we were gone and came back to the States, we were kind of blown away at some of the prices

because they weren't the same as they were years ago, right? Whenever we decided that it was finally time to, you know, we got readjusted. We both got jobs. My wife makes about $31,000 a year. I'm making about, a little embarrassed about it, but I'm making about $1,600 to $1,800 a month. And so the only, the debt that we have, including our vehicle right now, is under $15,000. And we did the every dollar budget as well. But the only hope I have of, I mean, right now, the only hope that I currently see, if I stay at my current job, which is as a custodian, you know, in December, I'll have

an opportunity to adjust all of our benefits. And when I cancel everything out, I'll be receiving about $580 extra a month. So we'll get around to the $2,200 to $2,400 a month for me. My wife will stay about $2,100 a month. And so the only other options I have right now is to sub as a substitute. And the only thing I've been doing extra so far is to, I've been trying my hand at door dashing. And sometimes, you know, that's not been the very best ideas, but I'm not really sure what to do because the only degrees I have are, you know, from my Bible college. So we've got a master's in ministry, you know. How old are you guys, Blake guys i'm 34 and my wife

is 29 okay so great well let me first just say don't i would not be embarrassed by that amount i think that you're you're doing hard work and you guys are just shifting what life has looked like i mean up until this point yeah you guys were living one life. You're coming back and doing something else, right? And so that does not speak to who you are as a person. And so much in our world, our salaries and our income and our net worth becomes our self-worth, right? That is such an American mindset. And so I understand it feels defeating because you're like, I'm working defeating um because you're like I'm working really hard and I feel like I'm not making enough to support my family so all of that that tension I'm so glad to hear because also like we get calls on the show and they're like

my husband won't go to work and we're we don't have enough to make ends meet you know and you're like they won't swallow their pride yeah they won't swallow their pride and just do what you're doing so like there's so much upside for you but like even from just the attitude of how you're approaching all of this. So just hear hear us say that first and foremost. And who you are in your character, honestly, is what takes you far in life. It's usually not a college degree in which you got your degree in, quote unquote, because half the people don't even use their degree. And so, yeah, so I think there's a lot of upside.

So I'm curious, Blake, for you, you know, you're 34. Like what would you want to be doing at 40? Like what is a job? What is a career path? What is a line of work that gets you excited? Right. So the thing I've always been excited about was when I was 15, man, that's for us, like God's been a big part of our lives and he saved me when I was 15. And the most exciting thing in the world was seeing missionaries come by our church. And I'm like, man, I answered that call to go. Well, when we had to come off through a lot of tears and stuff, like we couldn't go back. And so I don't think right now that's an option,

but I would love to be in ministry regardless of what we're making. But the only thing that I've ever done that I've enjoyed was, you know was putting what I've learned into other people. I guess that would be called mentoring. But I'm not really sure work-wise what the answer to that would be. I'm sorry. No, no. You don't have to be sorry at all. We're going to give you a resource to help with that.

Before we leave the call, our phone screener is going to pick up and give you Ken Coleman's book, Find the Work You're Wired to Do. It comes with a Get Clear Career Assessment. I want you and your wife to take that because I just think you guys can do better. You need to do better for your family. And that's going to mean finding a career you can sink your teeth into instead of just odd jobs. And let me also tell you this,

any job can be a ministry. And I know that you can work within the church system and that can be a real blessing. But man, there is so much ministry to be done outside of the church, too, and I want you to know that there is immense purpose regardless of where the Lord takes you. And I hope that it just encourages you to look beyond the scope of just, well, if I'm not a missionary, who am I? What am I going to do? Right. Yeah, thank you for that. I'd love to take the assessment. Yeah. Have you guys, you said you did your every dollar budget. I'm curious, how much does it take to run your household each

month? So I know we're about, the last time I looked at it about three weeks ago is the first time that I did it. And that's how I got connected with you guys. We're about $734 in the red. Okay. And so if we're bringing home about $3,800 a month, then we're in a hole about, I guess, about $4,500 from where we're renting right now. How much is your rent? So the rent's $1,375. And this was the cheapest thing we could find in our area.

Yeah. I mean, it's not expensive. Yeah. So I'm curious, Blake, is there anything in the area. Yeah, I mean, it's not expensive. Yeah. So I'm curious, Blake, is there anything in the area that for the meantime, that instead of trying to pair, because you could, you could pair two or three side hustles together, it's just going to be exhausting. And that's not sustainable long term. So I'm just wondering from your primary income, is there anything out there that's paying,

you know, because right now you're making what, $27,000? You're making $20,000 a year right now, which is about $10 an hour. After taxes. Yes, sir. So I'm wondering, you know, anything working at Walmart, you're going to make more than that. I mean, but is there anything in your area that, yeah, that you're able to make $40,000, $50,000? So I've been looking for, you know, ever since july and i've been trying to find that answer the only things that we've got for entry level work is about 1650 an hour and right now we're getting about 1675 um because we we put into benefits unfortunately at the school and

that won't change till next year we can cancel cancel those. All the entry-level work is about $1,550 to $1,650 unless you specialize or have a degree in something or have prior experience to it. Yeah, and I'm even wondering if there's people in your area that, yeah, because Ken Coleman talks about this a lot, that so much of our work and getting that next step or that next job is more about the people you know. It's not about the application.

And so, yeah, in your realm of people, just thinking— Maybe your church community even, asking around there. Yeah, if there's a business owner and they need admin work, right? I mean, like anything like that, or even some remote jobs, Blake, which might drive you nuts being in the house all day, I don't know because you're probably an active guy. But yeah, if there's anything within your community, I think that's going to be your best bet, Blake, between now and the next year instead of putting together, which you can and you're going to have to do something soon

because you can't be in the red for long. Can you guys cut your expenses? It still feels like there's a lot. I mean, you still have thousands more in expenses every month, even beyond your rent. Sure. So when we went to it, we actually adjusted it to what would be the most ideal situation for us. And we completely cut out every extra spending that we were doing. How much is the car payment a month? So that one is $275,000. We owe about $8,300 more on it. And I don't think we could even, that was another lesson learned,

but I don't know that we could sell it for enough. You're underwater on it. Yeah, that was underwater. Yeah. Is that the only debt you guys have? Other than that, we just have four credit cards. So since we started your budget, we paid off my lowest one, about 500 something. We paid half of my wife's lowest one after that. So we're doing the snowball. Okay. That's great. You guys are making progress. Okay. Yeah, that's great. I mean, yeah, in between, you know, now and March, I probably would be doing some side hustle stuff. And if there's anything that you can do that goes straight to the consumer, we always find that you're going to make more doing that. So even if that's tutoring, you said that you're, you know, a substitute teacher.

So if you can even tutor, doing something like that for the meantime, but looking for that main income to go up is going to be the key. And kind of getting you on that right path, we're going to give you Ken Coleman's career assessment. So make sure to do that, Blake. And if anyone else is new like Blake and you want to know where you are with the baby steps, make sure to go and check your progress and receive a personalized plan. And you can click the link in the show notes, which is titled Are You On Track With The Baby Steps and complete that quiz. And this hour is up, George. Good times. And we'll see all of you guys live on radio

and in the Ramsey app coming next. Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend, bestselling author, George Camel. We also host the Smart Money Happy Hour together, co-host on that podcast and show. Good times. We just had our spouses on and it's

an all-time best already. They love a tell-all with Winston and Whitney. That's right. That's the latest episode. You can check that out. And we're here to answer your questions. So give us a call at 888-825-5225. Talk about your life and your money. Up next, or up first, I should say this hour, we have Jennifer in Raleigh. Hi, Jennifer. Welcome to the show. Hi, Rachel.

Hi, George. I'm so excited to talk to you guys. Oh, thank you. It's an honor to talk to you. How can we help? Well, thank you for taking my call. My question is whether or not I need life insurance, and I could give you a little backstory on that. I'm 43. I'm single. I don't have any children or anyone that relies on my income. I'm in baby step two, and I'm not sure if I need life insurance or not. I mean, yeah, I would say as of right now, from what you're telling me, no,

because you really just need life insurance if someone is dependent upon your income. So if you were to pass away and someone needed your income to survive off of, then you would need life insurance. But it doesn't sound like that. Is there any other family members or anyone you're helping financially by any chance? I mean, at this time, I'm not helping out anything financially. I was just thinking if I did need to get life insurance if it would help a family member? I was thinking my young nephews, but their mom and their dad helped them out just fine. I do have a couple of health conditions, so that was also my other question because of my health condition. Yeah, it might be more expensive or hard to even get. Is that what you're thinking?

Yeah, that's right. It was definitely a little higher than I was expecting. Sure. I wouldn't worry about it right now. I would focus on just getting rid of your debt and sort of becoming self-insured to where over time you may not need it. And if you do ever get married or someone does rely on your income in the future, then I would immediately get it or get what you can, even if that might be a guaranteed issue policy or something like that, if you don't qualify for term. But you're right in that the only reason you could get one if you wanted to, to get a small one, is to cover final expenses. But other than that, you're in good shape right now. How close are you to getting rid of the debt?

Well, I still have about $50,000 left to go. Okay. How much have you paid off so far? Uh, I would say in the past, uh, maybe six months I've paid, uh, $10,000 off so far. Way to go. So you're tracking like $20,000 a year right now on debt payoff? Yeah. And hopefully more than that really soon. I love it. Yeah. I'd stay the course. And for anyone else listening, life insurance, as Rachel said, is for those that have someone who relies on your income. So spouse, kids immediately get term life insurance, 10 to 12 times your income and a 15 or 20 year term

policy will do the trick. Don't fall for whole life. It's a really crappy product. It's super expensive and it really just makes the insurance people more money. Term life is all you need. It's super expensive, and it really just makes the insurance people more money. Term life is all you need. It's a fraction of the cost. So head to Zander.com. That's the folks that we trust and have trusted for decades. That's who I have my term life policy through. And if you have a stay-at-home spouse, this is really important. They need a policy too.

You would need to hire Mary Poppins to fulfill all the roles. And so at least get a half-million-dollar policy on that person. And again, it's going to be very affordable and give you peace of mind. All right. Let's go to Ted next in Grand Rapids. Hi, Ted. Welcome to the show. Hi.

Thank you so much for what you do. I'm really, really grateful. Oh, thank you. Thanks for calling in. How can we help? Yeah. So my parents passed away in 2021, very unexpectedly. And I have one sister.

We are both beneficiaries of their trust. I am the trustee of the trust. And my sister, my family has never been real great with money. My wife and I are super frugal, and we've done fine. But my sister just went through a really contentious divorce. She is now a single mom of two. And it sounds like, I don't know all the numbers, but she's gotten herself in a reasonable amount of financial trouble, especially given her salary. So I guess my question for you is, which we have not cashed out the trust, and

I'm sure there's questions that why we haven't done that yet. But anyway, whether it would be prudent to take some of the money from the trust to help my sister start new, I would say up front that this is not a new pattern of behavior, but it's my sister. I love her. And there's kids involved. I mean, that's hard. Yeah. How much was in the trust? How much was in the trust, Ted?

What was the right way to do it? How much was in it originally? So my sister's portion would be roughly about $700,000. Okay. And when you guys... And I guess I should say that's probably her retirement, too. I don't think she has any retirement. Sure, sure.

And this was allotted to her, right? I mean, like it stated... Legally, it's her money. It's her money,? I mean, like it's stated. Legally, it's her money. It's her money, the $700,000. It is. And did you... Everything has to be divided. Okay, and what has caused you guys

not to cash out the trust yet? Has she asked? What's those conversations been? I think it's a personal thing for both of us that we still have my parents' home, and so we've been using the trust to pay for that. And we grew up in a really tiny town. Our family's been there for 90 years.

Neither of us lived there and I live close. But I think we both feel like the day we sell the house, we never have a reason to go home. And we were, we've been really, we were always really, really close to our family. So it's more sentimental.

It's the emotional side of it. What's the house being used for? I guess I use it as a vacation home. Okay. But there's no one living there. It's not income producing. Who's going to get the house? It's not income producing.

We still have assets in the house. Okay. Are you guys wanting to keep the house and the family? My sister's kids are very young. My oldest is 16. We have five, and my oldest is 16. So there's nobody in the pipeline to take the house. Okay.

Okay, so for your sister, I would ask her if she trusts you. I don't know what kind of relationship you guys have, but I think if you go in, is she your younger sister? She's my younger sister, and we weren't close before, but I think we've lost our parents in a really tragic way. Sorry. Yeah.

So that's bonded you guys in a sense. Yeah. And so I'm more than willing to help her. My wife and I are firm Dave Ramsey devotees. We're more than willing to help her i my wife and i are firm dave ramsey devotees we're more than willing to help her i just want to get her out if we're going to do this yes keep her out of it you don't want to enable her yeah so i mean i would probably sit down with her ted and um and just express exactly kind of what you're telling us is like i see you're you're you're in a rough spot and And if she's willing to even

share numbers with you, like you would be a great person to bounce ideas off of because we always tell people, you know, if you're single, have someone in your life who's good with money to sit down and do that, right? So she's not asking you to be in that role. So you can't force it. But offer that, right? If you are willing, Ted, but I would offer that as a hey, as a big brother, like I want to be able to help you. She knows the amount, right? She knows the $700,000? Yeah.

We file quarterly statements. I send her annual accountings every year. I would just tell her I have a little bit of fear with this because of the pattern of how you've handled money. It's no shame on her, but you want this money to be such a gift and a blessing to her. And how can we use this money?

If we put it in a mutual fund, here's how much it would grow to. If we took some of it and paid off your debt, like it's kind of start walking her through it and even, you know, offering Financial Peace University, you know, to go through that course. Teach her to fish and walk alongside her and go, hey, want to help you manage money for the future? Not just this situation. Welcome back to The Ramsey Show. Up next, we have Christy in San Diego.

Hi, Christy. Welcome to the show. Hi, thank you for taking my call. Absolutely. I've been listening to you for a couple of years now. Oh, Christy. Welcome to the show. Hi, thank you for taking my call. Absolutely. I've been listening to you for a couple years now. Oh, thank you. Thank you, thank you. I'm glad you called in. How can we help? Well, I'm wondering about keeping my house. Okay. So, I'm a recent widow. I lost my husband in 2023.

Oh, I'm so sorry, Christy. How old was he? He was only 62. I'm so sorry. How old was he? He was only 62 and he wasn't retired yet, almost retired, but got very sick. And there was a little bit of life insurance, but he's retired military, so I was not married to him when he retired, but after he retired, we got married and had a child. So he was able to add child survivor benefits, but not spousal survivor benefits. So where are you at today financially? Well, right now I'm living off of the— I was a stay-at-home mom before he passed away. So I'm living off the survivor benefits, the Social Security and the military survivor

benefits that, until my daughter's 18, which she'll be 18 next year in 2026. Okay. So what is your income as it stands today every month? Well, the benefits are about $4,500 a month, and then I did get a part-time job making about $2,500 a month. Oh, great. Okay. So you're making a total of $7,000 a month right now. Take home? Yes. Great. Okay. And what are your expenses every month? Are you able to cover all of your bills? Yes. Yeah, the mortgage is the hard one. It's $3,800 a month. Ooh. Yeah. That's a lot of mortgage, even with your income. Right.

You're calling because you want to stay in the house. I do want to stay in the house. What's the house worth? $1.5 million. And what is owed on it? About $325,000. Okay. What happened with that money? I haven't touched it yet. It's still sitting in a high yield. Okay. And how much money will you be losing, Christy, next year when your daughter turns 18? If the $7,000... How much?

Well, about $4,400 a month. That's the survivor benefits that will stop when she turns 18. And then, you know, I'm only working part-time now, so I'm trying to... I'll be working full-time when she turns 18. I'll get closer to full-time. So your income is going to go basically down to just your part-time work. Right. You're going to lose all of that. So that's a scary place to be when you have a $3,800 mortgage. I know. And well, I did get a roommate also. She pays another $800. Okay. And how much much was in his retirement did he have any yeah there's about um about 200 000 in ira's

retirement that got switched over to my name but he we were living off you know his military pension was paying the mortgage which is gone now so yeah and what's the reason obviously sentimental value with the house but if you had to downsize are you able to do that and pay cash for something you could afford in in full i could but san diego it wouldn't be the same neighborhood which is near my family and it would be a different neighborhood and it it would be a condo or something. Because I'm looking at the numbers going. If you sold and paid off the mortgage, you'd walk away with probably $1.1 million that you could then pay cash for something.

It may not be in the same exact neighborhood, but I don't think it would be a dump either. Well, I mean, the 1.5 value is Zillow, and it's probably kind of high. I don't know. And then the real estate fees and the... Yeah. So I think the hard reality, Christy, is that from a mathematical standpoint, especially next year,

you won't even be able to make enough to even just pay the mortgage, let alone eat. And so I do think there's probably a reality coming unless something happens with your career or something, right? Or a job change. Just from a math standpoint, you won't even be able to float the mortgage, right? Well, if I double my income and make about $5,000 a month. That's still most of your paychecks are just going to barely cover the mortgage. You're not going to be able to eat. Yeah.

And I think the goal, Christy, that I would want for you if I was your daughter is I would want you to have peace in your life. I would want you to have margin. I would want you to be able to work part-time and that be enough to cover what you need. But so much of when tragedy hits, we want to hold on to the life that we had. And for a lot of people, the house represents that, right? I'm like, it's excruciating to think that this piece of my life has been let go by losing your husband. And then the next thing that feels the closest, right, with memories and everything is this house. And Dr. John Deloney always says, it's not even like it's a different chapter. You're kind of writing a whole new book

right from this point forward. There's just a new life. And I think instead of keeping and holding on to something that you think is gonna give you peace like a house, it's gonna end up being a huge burden and it's gonna weigh on you and it's gonna be very, very difficult to get by by holding on to

that versus saying I have a whole new life ahead of me there's something that things that have to change and how do I create the most peace and from a financial standpoint it probably would be George saying it and and you said it but I'm like you know you're um you know it's just you your daughter she'll be you know 18 next year next year and she'll have plans into adulthood. And so the reality is you don't need a ton of space. The reality is a condo, a townhome, not even a single family home. And if you can get to a point, Christy, where you even can pay cash for something, even a little bit less, because I'm looking at this money even into retirement, and you have his life insurance and some of his retirement, but even investing

that, because I want you to get to a point when you're 68, 70 that you're going to be able to retire. And if you don't have a house payment, if there's no mortgage, your means to keep your life afloat month to month goes significantly down because the mortgage, your housing from rent and a mortgage is always the highest line item in everyone's monthly budget. And if you were in a case where you would be able to remove that, it would create so much peace. And so my fear for you is that, yeah, from a mathematical standpoint, I don't. Unless you're going to be making, you know, $10,000, $12,000, a $4,000 mortgage payment. And if you do that, then that's great, right? That's great. But I don't know.

Well, I don't. I will get his Social Security again in six years. When I'm 60. I'm not quite 60 yet. I have to wait until I'm 60 to get this. So I only get it while I have a minor child and then after 60. Do you have other children besides your 18-year-old? I have a son, yeah.

From a previous marriage oh you do grown oh but he's grown okay okay i would just rather you handle this house on your terms versus it not being on your terms and being foreclosed on and you have to leave instead of you leaving on and i yeah and i and i don't want you taking you know this life insurance money and other things to try to pay the mortgage either because it's just going to be going down, down, down, down, down. And even then, upkeep, property taxes, insurance, there's still a lot of costs with a home this expensive. And that just worries me for the long term when you have to work instead of I work because I want to versus my body saying no and I have to because I don't have any money. But now that you see this money invested, the IRA, the life insurance versus using it to pay down the house, which doesn't solve the long-term problem. That's right. Yeah. I think chasing peace,

what is going to give me the most peace at the end of the day, even though it's painful and it's hard, what's going to give me peace is what you're looking for. So Christy, I'm so sorry. And I hope that helps. Money and relationships are two of the most important parts of your life, but they also can cause some of the most stress. So if you're committed to learning how to continue to grow in these conversations in your life, don't miss the money and relationships tour. Dave Ramsey and Dr. John Delaney are hitting the road for six nights. It is unscripted. It is unfiltered. And it's going to be packed with some really great entertainment and great content because they're really going to tackle these important issues in life. And so the audience in each of these cities kind of gets to decide what is going to be said. It's going to be really fun.

And so they're going to talk about everything from raising kids, how to fight fairly in marriage, how to find contentment. So they're going to be live in Louisville on April 21st, Durham, April 23rd, Atlanta, April 25th, Phoenix, May 5th, Fort Worth, May 7th, and Kansas City, May 5th, Fort Worth May 7th, and Kansas City May 9th. So get your tickets to see Dave and John live at ramsaysolutions.com slash tour. If you're tuning in on YouTube or podcast, make sure to click the link in the show notes. All right, up next we have Ryan in Chicago. Hi, Ryan. Welcome to the show. Hi, thanks for taking my call.

My question is, I have a very high potential of losing my job. I currently have about $90,000 in savings, and I was wondering if it would be a good idea to go ahead and tap into about half of that to pay my house off. What's left on the mortgage? About $42,000. Oh. And what would be a six-month emergency fund for you to cover all of your expenses

if you remove the mortgage payment out of that, the principal and interest? If I remove that? Well, right now we pay $1,700 a month. Okay, so you'd free that up. So here's the bigger question. You have $90,000. You pay off the $42,000 mortgage. It frees up your mortgage payment, leaves you with $48,000 in your emergency fund.

Is $48,000 enough to get by for six months? Yes, I would say so. Okay. Because what it sounds like, you're not using the emergency fund to pay off the mortgage. You have just overfunded the emergency so. Okay. Because what it sounds like, you're not using the emergency fund to pay off the mortgage. You have just overfunded the emergency fund. Okay. Now, would... I also have some rental properties,

but would refinancing one of those rental properties be a wise choice? Well, I think as a worst-case scenario, you could sell a property if you've gotten some really dire times, but I don't think refinancing solves your problem right now. What's the deal with the job loss? How imminent is this, and what's the reason?

Well, I don't want to go into it, but it's federal service. Okay. So part of the government, kind of scary, they're just gutting all of the jobs out there, and you might be part of that. Correct. Correct. Yeah. Well, having no mortgage payment and having $48,000 sitting in the bank puts you in a really strong position. The other thing you could do is, I mean, I would pay off the mortgage personally just because you've overfunded the emergency fund.

I would do it regardless of your job situation. Yeah. How quickly, the field you're in, Ryan, how quickly do you think you can get something else if you did lose it? Oh, I feel like I would be able to get a job pretty quickly, not in the same line of work. I probably had to go back to the electrician. Okay. Yeah, totally. Well, at least, yeah, yeah, you have the ability, you have a skill that, you know, trisha okay yeah totally well at least yeah yeah you have the ability you have a skill that you know can transfer pretty easily so i'm i'm with george on this one i would pay it

off and you still have your emergency fund which is great and if that job loss happens then i think you still will be able to find some great work yeah Yeah. This is a good situation to be in. Awesome. All things considered. For sure. Thanks, Ryan. Next, we have Chad in Los Angeles. Hi, Chad. Welcome to the show. Hi, thank you guys for taking my call. Absolutely. I mean, part of the question here is we finally became debt-free over the past month. I had a trucking business and a house, and I paid off everything. No mortgage, completely debt-free. Oh, my gosh. Way to go. So baby steps seven all the way, Chad.

Well done. Right. So right after we did that, about two weeks, I got into a head-on collision. Thank God I'm okay. The other driver's okay. Oh, my gosh. But that was my business, and now that business has been taken out from under me. It was my own little now that business has been taken out from under me. Uh, it was my own little,

you know, commercial business I had. And we have a few other side businesses that provide enough money to where I can make it out here debt free. Um, and we really want to get out of California for the longest time. And now we're debt free. I finally everything and the job isn't keeping me here anymore. That was one of the main reasons we were staying. But since it kind of got taken out from under me, I would probably have to go back into debt to go back into that line of work out here, which we don't want to do. I don't understand. So you were using the vehicle for your work. The vehicle is totaled. So was totaled? Yeah, it was a trucking business. So was there insurance?

Yes, it is. But what they'll give me for insurance and what it would cost to get it, I mean, I could dip into my savings, but the main thing is we went out of California. So let's say you sell your home in California. How much could you sell your house for if you guys moved? Even though it's California,

it's probably only worth $500,000 because it's a cheaper part of California. And my main question was, do I try to stay debt free? Do I rent if I go somewhere else or do I put a big chunk down? And that was our biggest issue. I didn't know what would be the best option. We deal with our other side businesses. We make about $100,000 year. Oh, good. Without me working. Okay. So do you know, I have five kids though. Chad, do you know where you guys want to go? Yes.

We want to go to Idaho. Okay. Do you know the area? Well, yes. The houses that are comparable. It's a, okay. Basically you have to downgrade, which is something we're thinking about but yeah especially with interest rates and everything so what i would say is whenever you move to a new place especially a

new state you know i even say this with newlyweds you know if they're moving somewhere and just got married to maybe rent just for a year and make sure you know the area unless you guys are unless you guys have family there and you've you know you know the area really well um but i yeah so renting for a year or so just to get your footing is not bad right so you could you could put this 500k and just a high yield savings just let it sit move there kind of get your footing and then really look for a home and say okay this is what we want to do but as yeah as much as you staying debt-free and using that to, gosh, to buy another house in cash would be unbelievable. And are you wanting to restart the same business in Idaho? No, we're just, I have a few online businesses.

And now that I don't have this other full-time work, I really want to dump my energy into that. And I think bringing me up here, I can make that the full-time thing and really get that growing. Yeah. There's no reason for debt then. Just cash flow it. Move at the speed of cash with these online businesses. You don't need to invest and go into debt to grow them. You're really good at this. And I would aim to pay cash for a house once you're there. But if you took on a small mortgage and paid it off quickly, that's fine too. Okay. Awesome. I appreciate it. But I like the plan of just renting and getting some footing before you, you know, you make a big choice like that.

Yeah, that's what we were thinking, but I wanted to get some, uh, some advice before I, I decided on my own. I appreciate it. Absolutely. Yeah, absolutely, Chad. Thanks for the call. And you can even go to, uh, ramsey.com, ramseysolutions.com slash real estate. And we have our really real estate hub there. And it's going to show you live tracking from market trends to articles. There's a podcast, videos, agents, even in your area that we trust. Our Ramsey trusted real estate agents are all over the country. And so you can find them on the site as well. But again, that's ramseysolutions.com slash real estate. And it's just a great place to go because when you're looking to buy or sell your home, having the right people and the right knowledge

in your corner is huge. Absolutely. But that's the beauty of Baby Step 7. You got options, you got flexibility. Oh my gosh. People take it for granted when they're just out there going, oh, that was Ramsey people. They're so conservative. I'm like, well, then life happens. Your business falls apart, but you're okay because you have a paid for house. Yeah. You got money in the bank. You have an emergency fund. And so that's, it's part of the plan is life is going to hit you. The question is, are you going to be ready for it? Or are you just going to scramble and look for the nearest shortcut, which is going to be debt? Yeah, that's right. So it's, and it gives you, yeah, the options and the freedom that you're like, oh my gosh, we don't want to have to restart this business.

And we don't have to, right? I mean, number one, they have other sources of income, which is very helpful. You're not desperate. Yeah. You're moving from a place of strength. That's right. Yep, absolutely. So Chad, you've put your family in a great, great position.

Thanks for the call. Our scripture of the day comes from Philippians 4.13. I can do all things through Christ who strengthens me. Jen Cicero says, you can have excuses or you can have success. You can't have both. Oh. All right. What do you think, George? I think you needed that motivation today, Rachel.

I can have some excuses. I actually don't know that I've ever heard you have an excuse. Oh, really? That's good. You're not really like a complainer like me. Yeah, you're more of a complainer like me. You can't. Yeah, you're more of a complainer than me for sure. So is Deloney.

But it's more out of entertainment, not because we're making excuses. You know what I mean? Yeah, that's right. No, no, no. It's a difference. Yeah, your Debbie Downer-ness is super fun and entertaining. Thank you. We love that about you, George.

I send sarcasm. Oh, man. All right, let's go. I'm moving my seat further away. Hey, look, I love when we take Nashville calls Can I say that? I don't know why I just feel like they're outside the building right now

They're not But we have Randy here in Nashville, Tennessee Hi Randy, welcome to the show Good afternoon That's one of my favorite verses also by the way Thank you for taking my call Absolutely How can we help Randy today?

My wife has become a recent avid listener to this show. Uh-oh. Uh-oh, Randy. That can't be good. All right. What do you think? What's your beef with us, Randy? It's okay.

We can take it. Well, I just wanted maybe some clarification or more customized advice maybe. She has been listening to your advice, which I heard some just on hold about paying off your home. And we have 11 years left on our note at two and a quarter percent. There's no problem on the ability to pay it. Let's say the payments, including taxes and insurance, is about $3,600. I've got about $1,500 or $1,600 that will be coming in per month guaranteed, and she is in the business, but she has a little bit more than that come in.

How much does she make a month, Randy? Probably just a little over 20. Okay. So you guys are bringing in $35,000 a month? Roughly. It's the second marriage for both of us. Okay. And neither one of us ended up with any equity in our home after selling the houses, you know, as a result of the divorce.

Gotcha. Kind of started from scratch. Right. So basically, if you look at our checking accounts plus a brokerage account that mainly has some just government reserves, plus it has some pretty safe dividend stocks, then we basically have enough money to pay off everything, or I guess also we could make a go to do that. But my thought is that 2.25%, I'd rather just pay as I go. So I wanted your thoughts.

Yeah, you're saying, hey, I can make a spread on my investments. They're making more than 2.25%. Why would I pay off this low-interest loan? Yes. What's low-interest loan? Yes. What's left on the loan? It's $363,000. Okay. And what's your retirement plan?

Do you guys have a nest egg separate of that? We do. So I have, like I said, my retirement that comes in, plus I have about close to $700 in deferred money, and she's still working, but she has about $130. Okay, awesome. So I just want to make it clear, you guys are okay for retirement's sake. If we use all this money to pay down the house, you're still going to be okay. Right. Okay, and how old are you two? 67 and 58. 67 and 58?

Yes. Okay. Yeah, I mean, so here's the math on paper. You could make the argument, well, we got this lump sum, it's making more, why here's the math on paper. You could make the argument, well, we got this lump sum. It's making more. Why pay off the mortgage? I would counteract that with life is more than math.

And there's a piece that is indescribable. When you own your house free and clear, no one can take it from you. It reduces risk. And you're freeing up close to over three grand a month that you can now do what you want with. Invest, be more generous, spend. Yeah, and when you reverse engineer it, Randy, sometimes it makes it kind of in a different perspective. So I would ask you, if you guys had a paid-off house, would you borrow on it to invest? No, and I didn't mention, I believe the long-term capital gain, just looking at it real quick,

it would probably be $10,000 to $12,000 in long-term capital gain that would be owed. That's what you owe in taxes. That's not bad considering the amount you have in there. That's a small price to pay for freedom that you would eventually have to pay anyways. At some point, you're going to cash it out. Obviously, all at once, we'll bring you up in the the brackets but that's not a concern with you guys you guys make incredible money and so my thing is you guys will replace this you know brokerage account you could do that within a few years because you stack up your 35 grand plus this three grand a

month you just freed up if you just put that mortgage payment in a brokerage account, you'd have $40,000 a year right there with compound growth working for you. Right. I've been saving two a month anyway. That's amazing. And this is your only debt, right? Right. And I just spent, like, say, when we bought a car recently, spent cash on that. If I had to finance it, I would have had to pay significantly more than 2.25% of course for it.

Yeah. Well, here's the deal. The best part is you can pay off the house, and if you want to go into debt later again, you can always do it. The lenders are always happy to take your money or give you money that you will owe back with interest. So I would say give it a shot. And if your life is less peaceful, if there's somehow more risk and you go, man, I really miss having that mortgage payment. You can always go get another one and borrow against your house. But I doubt you will. You have figured it out, Randy. You guys make incredible money. You've been making great decisions. There's nothing wrong with keeping it around. It's not a sin, but

man, you guys have the money sitting right there. I'd want to be free today. Yeah. I think the ultimate goal is getting to that place where you have complete autonomy over your life and over your money, and there's not banks involved and mortgage lenders and all of it. And there's just something to be said that when you get to next month and there's no mortgage payment and you own your house free and clear and regardless of what happens in life, they can't take the house. Like, it is there, right? But Rachel, you got to pay property taxes.

So technically you never... Okay. You kind of sound like me. All right, relax. I did think about that. I'm exhausted by those people. It is... I love all that in me, George.

You don't technically like own the full... Right? You have to pay property taxes or they will take it. But I think Randy's going to pay property taxes. I think Randy's going to pay property taxes. There's no lien against your house. How that's right no bank is gonna come and foreclose and take the house because of that pay your property taxes it's like any other bill

pay your light bill that's right pay the property taxes um but yeah i and it's such a um which i so appreciate randy calling because if this is your first time hearing it it is a little it goes against math right because what he's saying is exactly right. I have all this money in investments and it's making money every month. Why would I pull the plug on that and pay something off? And that is, it's where the emotional side of money really comes into play. And his wife may be feeling it more than him where she's like, oh my gosh, what if we just had no risk? No risk and no mortgage payment. then again that reverse engineering you guys I think is really important to hear that if you have money saved and you still have debt it is kind of this

question of okay you kind of are borrowing in a sense right to keep this to keep this um this debt around so for him it's like yeah if you had to pay for house would you ever go back into debt would you borrow on the house to be, you know what I mean, to pay off that debt or to have more debt? And if the answer is yes, I would ask, why? Where is this weird kind of greed coming from that, like, well, I got to make a spread. You know, we're looking at multi-millionaires here with an incredible income. There's just no reason to keep it around at this point. He's going to have no problem making money. That's right.

And I think these are scenarios too, George, that they don't make or break this scenario. There's some callers that we get and it is like, you have to sell this car

or I can say a lady we had earlier this hour, you know, her mortgage payment, like there's no point you don't have the money to pay that, right? And there's some

really drastic moves that have to be made. This is one, Randy, you know, you guys are going to be fine. You've done incredible, but it's kind of that extra last step of getting that ultimate piece and autonomy of your money, which no amount of spread can add up to that. So thanks for the call. Thanks to everyone in the booth helping out this hour. Thank you, George, for being a great co-host.

And to everyone here in the lobby in Nashville watching the show. And thank you, America. Remember to take control of your money and create a life you love. We'll see you next time.