The Ramsey Show - App - “My Financial Advisor Told Us To Take Out A HELOC For A Tax Write-Off”

Episode Date: November 20, 2025

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Normal is broke, and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Ken Coleman, Rachel Cruz, joins me, and we're here for you. Triple-8-8-25-5-2-25-2-25-2-25 is the number to jump in, and we would love to coach you up today. We start off with Dan in Grand Rapids. Dan, how can we help you today? My wife and I are preparing to retire. As a matter of fact, her last day of work is tomorrow.

Oh, wow. My will be the beginning of February, so 40 years of effort towards this. Dan, how are you? Dan, I got to ask you this. I mean, we men have to unite because we don't do this well. And we got Rachel here to help us on this before we dive in. What is the plan when she finishes the day tomorrow and she wraps it up and comes home? Do you got something planned?

You know, we don't. It actually came on pretty quick. We both had this date in February picked, and then her department dissolved, and they said you can either take a bio or you can transfer to another department. So this all happened for her in the last three weeks. Okay, but presumably she's excited about this? Oh, absolutely, yes. Dan, listen, I don't want to spend too much time on this.

Rachel's here to back me up. This is where you've got to step up. I mean, you've got to do something special. She comes home, maybe a little surprise. If she hates surprises, plan a little something. At least a nice dinner, a gift, 40 years, babe. You're wrapping it up. We've got to celebrate her, is my point.

I don't want to, and I'm glad I said this, Dan, because you might have blown it had I not brought this up. You're very much. I appreciate that. She works from home, but I will bring some home and make it monumental. She works her home. Okay. Rachel, what does he do in that situation? I feel like this is your category. Champagne. Pop the bottle. Right outside the door. Neither one of us drink. Oh, man. We are striking out, Dan. We're striking out.

The grape juice, sparkling grape juice. Okay. No, just do something special. All right. So we've now helped you there. That's the help you didn't know you needed. Now, keep going. That's point plus your marriage we got by. We work very hard to get where we're at, and we're very comfortable with what we're planning for retirement. We're very comfortable with our financial advisor. But I have one concern that he's got me, a plan that he's got for me. And we are going to put an addition on our house next spring.

So we're planning to spend about $100 to $120,000 to do that. Now, my plan was just kind of take that off the top of our 401K and our savings and make that, do the addition. What he's suggesting, and he gave me, I guess, good reasons, is he's suggesting that I take out like a HELOC or a home equity loan to do this project. And he said, well, chunk it away pretty quick, but he said there's reasons for that. First of all, I'll be paying a lower interest rate than he can make me, and that's arguable. The second thing he said was it is definitely a tax write off.

And the third thing was the fact that it'll save me 20. plus $1,000 next year in taxes because of the tax bracket that he's aligning us with. And it just, it's very hard for me to think about going into debt immediately as I retire. Well, yeah, 100% because is he, where is he planning on having you guys pay off the HELOC? When he said you can throw a bunch of, like a bunch of money at it, is he thinking just a little bit every year so that you don't mess up the taxes and all of it? Yeah, he's saying, well, chunk it away. And I don't know how relevant chunk of the way is if it's a year or five years. but he said, well, just make a monthly payment on it. And again, that it'll give us a tax advantage.

It'll save us taxes and all this, which all kind of makes sense. But dang, you know, I just got myself 40 years of work to get out of debt and retire. And then just thinking about going back to the debt just kind of scares me. Well, some financial advisors are so stupid. They don't even think about your values and what you want out of life. And clearly, living a debt-free life has a price tag for you. You know, you can't put a price on it. But, you know, it's a value of.

of yours that he's not putting into any consideration. And so as he goes around, but so Michael, yeah, so no, I would not do this. I would 100% just cash flow it. And if the cash flow comes out of, I don't know if it's the 401k, if you guys have money elsewhere, but you have the ability to cash flow, right, Dan? Yeah, yeah. We got a set amount that we're going into retirement with that we're comfortable with and it's going to last this long beyond our retirement. Yeah. And just thinking of taking 100 or 120 right off the top of that and doing the addition was my plan. Yes.

Well, let's just put your plan. He's offered a suggestion. Yeah. I want to put your plan to the test, not his suggestion. We hate his suggestion. We hate it. So let's put your plan to the test. Let's assume that you didn't get this advice at all.

Yes. And you just went ahead and pulled the trigger on your plan. How do you feel emotionally about your plan? Any stress? No, I don't think so. We have kind of intentionally, we have this 403B that we've been carrying for a long time, and I've been very aggressive with it, and I took it from $20,000 to it's about $170 right now. So my thought was that is just some play money we've been actually not planning on

that we've accumulated that would do this project for. What's the addition for? Well, we raised seven kids in our house, and it was fine with nine people, but now what we find is with adult children. Instead of nine people every day, we have 29, people, you know, 10 times a year. So we want to double our kitchen and our living here. Sure. How much, how much do you guys have in retirement total? Just about two million. Okay. Golly. See, and he's going through all these hoops and stuff,

about this and then and that. You guys have $2 million. Do you know what I mean? And you want to take 100,000 of it. And if you go and burn that amount in the middle of the room, like you're not going to have any emotion towards it because it's such a small percentage of your net worth. So that's where the peace of mind of your value system overrides his snaking and maneuvering through where it's going to be not even that much money at the end of the day. Do you know what I'm saying? I agree. I mean, Dan, you answered your own question. I asked it that way just simply for you to hear yourself say his plan gives me a little bit of heartburn, enough that the Pepsid AC's not working and you called us today. Right?

It did, yeah. I think I knew where you were going to take me, but I just kind of wanted to hear it. Yeah, and I appreciate that, and we're happy to be here for you. But you, sir, are the ultimate arbiter on this. Your body, your heart, your head. And, man, you're just like, man, if I can put this edition on, and I'm paying cash for it for my grandkids to be there. Yeah, and I would run the numbers too, because I am curious because the helix, like the rates go up and down.

Like, it really is very dependent upon what's going on. No, don't run the rates at all. I don't want you to be tempted. No, no, it's not a temptation, but it's that versus what, you know what I mean? Like, that versus the taxes that you're going to pay on a hundred. Like what I'm saying is, I think it ends up being closer to a wash than what you realize. I think that the guy, I think he's like nitpicking every little thing to say, I'm making this number up, but I haven't done the calculations, but to save 10 great, whatever the thing is.

And that's pennies to you guys. So I'm like, the peace of mind is worth that so much more. Yeah, just listening to you describe everything he told you versus your plan. Yours is simple. Boom. We're done. We're done. And do you have much, the sort of think he said kind of makes sense.

Do you have money elsewhere, Dan, where to his point, do you have money sitting in a high-yield savings or something where you wouldn't necessarily have to pay taxes if you use that cash? We have about a $40,000 savings account. And then 401K, I have a lump sum pension and a 403B. Okay, gotcha, gotcha. Nope, that's great. Yeah, no, I would not go borrow on my house to do an addition when I freaking have the money for it. Yeah. That's the bottom line. trust your gut, Dan. There's a whole bunch of science on this that trusting the gut is not this

mysterious thing. It's actually the brain sending physical signals to the body and it we feel it in our body. That's a real thing. It has the same validity as the logic. Listen to your heart. Listen to your body. You were right. Thanks for calling. Tell the financial advisor, thanks, no thanks. All right, we're going to Baltimore where Julia is waiting. Julia, how can we help today? Hi, thank you so much for taking my call. I'm curious, how much should I have my children pay when they break things? recently my 10-year-old broke a $400 window and a glass table that is thousands of dollars to replace.

Well, what happened? The 10-year-old is. Is this a boy or a girl? Boy? It's a boy. I was like, I can answer that. Hey, take it easy on the boys. What was he doing? Was he just being a boy? Yeah. Like jump it. What was he doing? With the window, he was throwing the baseball. Oh, classic. And we had told him not to do this. But he thought it was only that we were telling him that the glass door, like the storm door was going to break, he didn't realize the little door next to the door could break, too. Wait a second.

He was upset about himself about that. Did he throw the ball directly at it, or was he playing with a friend or a sibling, and somebody missed it? It could have been someone missed it, because, yeah, they usually throw the ball toward the door, and they keep the batter right in front of the door, and they know not to. But they've been told not to. many many many times okay all right this is great i'm gathering information here i haven't ruled yet uh what now the second the glass table what happened with that one um okay so the glass table

you know you could stand up like on your own using your own body strength or you could push off of the table and push push up so that's what he did i i guess and somebody else is pushing up at the same time. And it shattered. And the whole, the whole side of the table like snapped. So we actually are just using a fragment of what used to be the table. Is that safe, given that it's a glass table? Yes, we turned the jagged edge towards the wall and we put tape on it.

And no one sits over there. Julia, I got to tell you, I am no. It's a life with a boy. No one's ever going to confuse me with an OSHA inspector, but I'd probably get the glass table out of the living room. Okay, very easy ruling for me. He felt bad on both instances, correct? Yes. Okay.

And how long has it been since these two instances? The window was over the summer, and the glass table was within the last month or two. Well, I would have, I mean, okay. It's not going to change my ruling, but I think you should have acted a little quick. but yeah I think you should sit him down and go hey I told you a thousand times not to play baseball in front of the door you did it and by the way this is why I told you it's not mom trying to cramp your baseball style I'm sure that's your favorite spot totally get it but I knew this was a possibility to happen so I know you feel bad but you know what you didn't

really learn the lesson and so that cost us X amount of dollars and then the glass table probably you didn't want to not go ahead you wouldn't have him paid for any of that window I would talk to him I would 100% have him pay for it but I would sit down I would have done it like within the first 48 hours uh we guys I told him he needs to pay a hundred of the four well then you've already told him so Ken's advice doesn't count anymore I mean you're not going to go if you need to follow through moving forward because he's not going to stop breaking stuff So I'm curious now that I'm a Dave Ramsey subscriber, I'd like to know what to do. Well, what the deal is is that I think he learns his lesson.

So if you told, I missed that somehow that you said you're going to pay $100. I love that. I probably would have made him pay for the whole thing. Not a 10 years old, y'all. You get a ruling. I'm having my ruling. Okay. My ruling is you told him a thousand times.

And he still did it. I'd make him pay for the full 400. Now, on the glass table, I wouldn't make him pay the $1,000 because there was no, hey, don't, the way you described what happened, I don't even know if it makes any sense. I'd have a little bit more grace on that, but I'd still have him pay something, but not $1,000. But yeah, he's got to start to respect your stuff. So, sure, I love the idea of making him go do real work, by the way, not like chores around the house that you pay for, no, he's got to go get a lawnmower out or whatever. I started cutting lawns at 11. Don't anybody freak, don't at me.

He needs to do real work for somebody and get some money back. I love this, actually, because you're not mad at him or yelling at him, and you're going, look, Sparky, there's consequences. And I love that. You wouldn't make him pay anything. I think it was not intentional. There was no ill will, because I think there's some kids who are. There was disobedience.

Yeah, but it's not intentional. He was not saying, I want to go break that. Like, there are some kids that I think are destructive and they're doing things on purpose to rile at their parents. And then, you know what I mean? that there's an ill spirit to it and that correction I would much

yes I would have them pay but he Julia I don't know why I just I'm like there's a part of me I'm like you're you have a boy like Charles's already throw I mean and he's five

but I'm like I already see things and we do tell him hey don't do don't do but if he breaks the the thing the big light fixture we have because he's all into this like foam basketball thing and he's trying to I don't know part of me if it breaks I'm like which granted he's five

I don't think I would I don't know if I would make him pay for it again I don't have any judgment. I don't know. For those of us, let's tell you a real story. I mean, Ken, you have two boys. Yeah. And you have older boys. I'll tell you real story. I haven't gotten there yet as a parent with a boy. I see glimpses of it. But I kind of like it too. I know this is terrible, Julia. You're confusing me. You said you were okay with her making him pay $100 on the door. No, no, I didn't. If he was being, if he was being destructive on purpose, that there are some kids that are very destructive on purpose to roll up their parents. I just want

to be clear. You don't think he would be in disobedient. Yes or no. He was disobeying his mom. Disobedience and intentional destruction are two different things to me. Both are punishable. Because his disobedience was not, he was more a round of sport that then affected the window. It wasn't the window itself. I'd love if you were my mom. I got to tell you, no consequences here because my heart was good.

No, he disobeyed his mom. Julia, did he disobey you in your mind? Julia's still pissed. You didn't let her, you didn't let her face? y'all are both pissed i'm not pissed i'm as happy as i can be so my kid not my problem i'm just weighing in on it julia did he disobey you yes he knew he was disobeying you based on how many times you told him don't stand here and play baseball yes or no yes you're a good mom you're a good mom did he disobey you at all with the table was there any warnings around the table or was that just

a pure accident yes i tell them not to push in the table all the time dad gum it don't mean on it. Don't put your elbows on it. Then he's got to pay. I said it's glass. He's got to pay that too. He's got to pay a big portion of that one. He's got to learn his lesson. He might need to take a heelock out.

Get some of the glass guy's retirement. Yeah. I mean, I'll say this. The kid is in debt to you because he broke your glass table. I know. And I got to say, I'm going to circle back to this one. I must be getting older. I don't like the shard of glass turned towards the wall with the tape on it.

I'm going to bring that one back up. I feel like I'll sleep better at night telling you I get the table out of there. But yeah, he needs to pay. I do have bulk trash scheduled for pickup. So we are getting it out. There you go. I just care about because this kid's going to run around the corner. And God forbid he runs into the jagged edge.

I know. And I just like that he's like playing. You know, some kids will be like watching an iPad. and he's, I know. Listen, because what happens when he breaks something that's way more expensive? How many kids do you have, Julia? Three. I have a daughter and then two boys. And then the two boys. I think it's the double boy thing that really gets that, you know, the patients get slower maybe. How old is, is it a 10-year-old, year oldest?

He's my youngest. Oh. And he is the most distracted. My 12-year-old just broke a glass part of a picture thing because he threw a ball in the house, even though he knows not to. And I did these things. Go ahead. My daughter who's 16 is really not destructive at all. Well, no, because she's a female. They call her. That's what little girls are.

Yeah, she's 16. All little boy's brains are on fire. I know. You know, and that's just part of being a boy. And by the way, I did all of those things you described, except for the glass table. We couldn't afford a glass table. But I will say that, I think, your good mom. And I think this is a great way to teach a lesson without, you know, that's

enough punishment. Just to kind of go, here's the consequences. He needs to feel a little something. Yeah. An effect of what his actions are. So I get that. I know. I'm just, I don't know. Thank you. Yeah. Thanks for calling. Wow. You are such a softie. I think maybe honestly, because I have two girls and you see that. And yeah, they're doing the girl thing and dancing and seeing the high school musical. And then you got a little Charles with a little ball. Pardon me. He's like, you play with that ball. And Charles is a cutie. But let Charles. Let Charles shatter a really important window

After you've told him not to We'll see how lovingly you handle that All right Next up we're going to go to a video call And we've got Valentina Who is joining us from New York City Valentina, good afternoon. How are you? Good afternoon. I'm doing well. How are you?

Good afternoon. I'm doing well. How are you? Well, we're doing well. What's going on with you today? How can we help? A lot is going on. So my husband and I went from a family of two to seven and under five years. How'd that happen? Well, we have a five-year-old. We have a three-year-old. We have a one-year-old and a four-month-old. I'm actually wrapping up with my maternity leave. Oh, my gosh. All babies.

You look fabulous, given how little sleep you must get. I mean, I'm exhausted. Listen to that. Yes, exactly. But it's unfortunate that we're drowning in dead. We are drowning. And it all again escalated within the last five years. And my question is, how can we navigate this terrible mess that we're in with all the dead that we have accumulated?

And obviously, we have a large family. So we have four kids, and then my mom lives with us, thankfully, but we are at a negative every month, and we don't know how to go about this. Okay, let's run through some numbers real quick, okay? And then Rachel, we'll dive in and we'll start pulling up a plan here for you, okay? So let's start with your combined income. Before taxes is $240,000, and after taxes, $162. Okay.

Okay. And give us the debt, go smallest to largest, and let's keep the mortgage out of it at first. Okay, let's just see what that list looks like. Okay, so I will try my best. So the smallest debt is, so we have a credit card debt. We have personal loan. So credit card debt altogether is 90. Actually, that's not the smallest, but combined between my husband and I. Okay, so the personal loan. is 28,000. Okay. Credit card debt is 98,000. How many cards equal that 98? So my husband has five, and I do have five as well. So that's a total of 10 credit cards.

Ten credit cards. Are they all average-ish around that, like, nine? I'm being conservative. I think it's above that. Okay. I'm just around into the nearest, yes. Okay. But that's conservative.

Okay. Okay. So credit card, I'm telling you, we've been relying on credit cards. Yeah. Yeah. And my student loan is 132. Okay. And I think that's it. Okay. Oh, no, no, no. I'm sorry, 401K. We borrowed, so it's a total of $43,000. So $43,000 in the 401k loan? Yes. Okay. All right. How much is going out to payments each month? Are you paying no? Minimum payments on everything? We're paying minimum payments and everything.

And it's, I would say, about 3,000 or so. Okay. So all of that. Are any of the credit cards in default? Not yet. Gone to collections at all? No. No.

You're current. I keep them afloat. Okay. Okay. Everything is current. And do I understand that with all of this stuff plus whatever's going on in your life, you guys aren't, there's no money. You don't have enough money left over, and that's why you've been using credit cards.

Exactly, because my husband has been having to cash out all of whatever stocks he had and all of that. So anything extra we had, any savings, anything like that has been going into stuff that he had prior to us getting married. All of that has been going on to a stad. So what happened is that with maternity leave, my income significantly decreases. I have two full-time jobs, and that goes down to basically 25% of the money. of what I make. And then we had major repairs to do to the house and things have broken our cars because we drive all cars. So a lot of things, we started off well, but then the debt just kept accumulating. And property taxes went up twice, the first year that we bought the house.

So things just kept coming up and it was just a snowball from there. How much is your mortgage? So we have to, my husband had a property prior to getting married and we have our property together after getting married. So our home is about 4,500, and the other property is about 1,200. Okay. What is the other property? Where is that? So it's close by to where we live, but that's where my husband used to live.

It's a double unit. Yeah, what are you all doing with it? What are we doing with it? So thank you for saying that because we are currently trying to sell it. Good. so that we can pay some of the debt, and I'm scared of death, because I feel like that's not going to be enough, and we do have a little bit of income coming from there as well. So right now, that property is being sold.

Right now, there is $116,000 owed, and we're selling it for $380,000. Oh, wow, yeah. That'll make a huge chunk. Nothing to be afraid of there. Yeah. It may not, it's not going to get it all, but it's right, right. So let me ask you this. How much are you over every month? In other words, bills versus what we got. How much are we in the red? On an average month? On an average month, a couple of thousands, I would say. Are you on a budget? We try to. We're not in a consistent budget. Yeah, because you guys are bringing in, around 12,000 a month, would you say? Hits your account.

Yes. Yeah. And then the two big things, the debt payments, which is $3,000, and then you have your mortgage, which is four. Mm-hmm. And so my question is, yeah, where is the rest of it going? Oh, let me tell you. Yeah. Food, schooling, daycare, insurances, utilities, transportation.

We do have a couple of medical bills. And then we support, this is very minimal, but we do support our families back home. And that helps them a little bit. But if we add all that up, honestly, we're always on the red. And we're trying to minimize as much as we can. How much are you paying for the families? It's like a couple hundred dollars, three to four hundred dollars a month. Three to four hundred.

Okay. And how much is the kids' school? It's about 1,300 a month. Okay. Okay. Yeah. Is that daycare? Daycare about 800 a month.

Well, what's the 1,300? Is that private school? Yes, and we are grateful to get financial aid, but that's sort of the balance. How old are the children that are in private school? Five and three. May I push on something? Rachel will kind of walk you through what to do here, but I'll just quickly say, I think you have to have a conversation about the two kids, five and three, being in private school, to the tune of $1,300 a month.

Private school is still going to... No, $1,300 a year. Oh, a year. A year. I didn't catch that. So that's significantly less than. Okay, never mind. I thought it was $1,300 a month.

So it's just like a few hundred dollars. I mean, yeah, so it's not a ton. Oh, I'm sorry. I'm sorry. $1,300 a month. That's correct. I'm so sorry. It's $1,300 a month.

So you're right. I don't want to block down on this. I want to give it to Rachel here, but I'm going to challenge you that private school will always be there and they really don't need it that much as much as much as you need $1,300 a month back in this thing called a budget, which you aren't doing. but we just found $1,300 that you desperately need. Rachel, I'll hand that one to you. That's just my opinion.

Yeah, and, you know, there's going to be seasons, and there has to be some changes, some significant changes, right? Because if there's not, you guys will keep in the cycle of where you've been. And so I think that is the hard reality is that you want to be able to do everything, but you mathematically can't, right? You guys keep running into that. I mean, you can't keep doing everything. And so you're either going to get behind,

on bills. You're going to get behind on a mortgage. You're going to get behind on things. And I'm scared you're going to get behind on the wrong items. And so I think you guys are going to have to have a really, really hard conversation. And it's not forever, not forever. But for the next two to three years, our lifestyle has to change. And you guys really are at the point where even $400 makes a significant difference. And so to be able to say, okay, what are the things that if we that are not necessity food shelter utilities transportation that's it we have to be paying for daycare there's no other option school there's another option to your point that doesn't have to be private school like what are the things that we don't have to have to literally survive yeah

and i'm curious what that number is and that's going to hurt that's going to hurt when you see that number and to think oh my gosh if we eliminate these things that we want to do that are good things two things that we can't afford it just for the sake of time two things i want to give her i want to give her a session with one of our coaches and free every dollar for a year. Let's get those things in play and you can dig out of this. Yes. All right, let's go to Antoine in Austin, Texas. Antoine, how can we help today? So I just wanted a question, like, if it's worth getting a loan for school.

So this is, like, the scenario that I'm going to go ahead and tell you right now. So my parents want me to go to this local school that's a lot cheaper, the financial aid. They pay me around 1,000 to go to the school because of the financial aid. And then the school that I want to go to, it's a ministry school. and it's been what I want to do and I feel like that I'm called to do and it's ministry itself and that school I do have to pay

around 2,000 a semester Okay, well 2,000 a semester is not bad I mean, that's over like five months You could go and make that in a month doing a side hustle Yeah You could cash flow it And they were talking to me

And they're just like really like bribing me with basically a good amount of stuff just to stay with that school because they think that that school is so good. And I just, I don't really see the hype in it. And it doesn't teach what I'm wanting to actually learn. Sure. They think that, I guess in a sense, they're different believers as I am and they don't think that getting a ministry degree is like a real thing. Like, they don't think that it's like a legit thing to do as a career. Right. Okay. So, yeah, it is a legit thing, for sure. I do think it is going, usually, it is on the lower end of a salary perspective. So they may be looking and thinking, Antoine, go get a business degree and maybe go

into ministry, you know, part time and volunteer and go create a, you know, a life financially that's bigger. And then I hear you saying, no, this is kind of, this is what I want to do. I'd rather go down this route, which again is not a bad route. I would not, I would, I would I would caution you to not just say, okay, well, if I'm going to do this ministry and it's $2,000 a semester, I'm going to have to borrow money and all the things. But if you cash flow it through

and get the degree you want, the ministry degree, I mean, I guess is this specific school? Is it like a very specific type of ministry? It's like theology, Christian ministries. Okay. It's a, in a sense, it's a lot better for me to do because it's one of the cheapest schools out there because it's online. So I'd be at the comfort of my own home.

Gotcha. Well, this local school that I'm currently going to, I'm currently going to it right now. Okay. It's just, I'm not learning what I would actually learn in the industry itself because it's not a ministry class that they have here. Sure. So you're wanting to be a past, like you're wanting to get into a position, yeah, that you have to have a, yeah, you know. Yeah, I think this is so clear cut. This is very simple.

Do you feel called to this? or not? Yes or no? Yes. And if you don't do this, do you think that you will sense a holy, and I'm using that word on purpose, a holy disrest, that you will regret that spiritually? In a sense, I don't believe so. Like, I feel like it's like you're, when you're called to something, like, that you don't burn out. That's what I'm getting at. I'm saying if you don't you misunderstood me if you don't do this if you don't answer the call do you believe that you'll suffer distress meaning i've lost you all together let me let me put it another way do you feel called you said yes and i think that if you don't do this that your soul won't be whole

that's what i think and i also yeah you're with me now and i also think yeah i'm with you now there you go And I also think that you'll resent your parents if you don't do this. And you, if you bow to their wishes and their pressure. It's a problem. Yeah, and I don't have a problem with it because it's a very reasonable situation. Now, we do get calls from people that want to go be missionaries and they want to go get a $60,000 a year degree from a private Christian college. And you're like, that makes absolutely no sense. But $2,000 a semester, you're like, yeah, you can, again, you can do.

That's waiting tables in a month. Yeah. So you could, you know, you have to go into debt for it. No, not at all. And you shouldn't. Yeah. Or ask them for help, especially given this situation. Yeah, well, they said they weren't going to help me at all if I go to this school.

Right. That kind of sucks because, I mean, but I mean, at the same time, like, they, in a sense, the main reason as well is that they think that I'm not going to, like, stick through it. And I've, like, in a sense, when it came to church, like, I'm trying to get, like, more involved and more involved. And that's what I've been doing. Like, I've been going to school. and just trying to be, like, as most involved as I possibly can.

And, well, in a sense, I put them wrong with several things. They think, like, when I went to go get, like, baptized, they thought, okay, no, like, I don't think you should do it, like, right then and there. Like, this is barely a new thing. And in a sense, they made me wait until I was 18, which wasn't that long. It took about, like, half a year. Yeah, they're just, yeah, they're cautious. They're cautious.

And maybe in their background spiritually, they got burned. a few places, you know what you mean? And so they're just like, whoa, just, you know, so that's, that's fine. Honor your parents, but you don't have to do what they say. Now, there's a, there's attention there for some people, but how old are you, Antoine? I'm 18. 18, okay. And how long's the school? Sorry, Ken. Yeah, how long's the school? It's four years. It's four years. Okay. Yeah, so I would, I would make a plan to cash flow it, talk to, and again, this is not a school or a degree that's going to put you in a really narrow place. No. ideologically, right?

No. You can use it. It basically gets you anywhere. Okay, perfect. I think that's another thing. I would have a red flag because there are some of these, you know, where it's a very specific niche within Christianity even, and you can't really use it a lot of places. So I think the broad sense is helpful.

I think it's great. Yeah. I want to finish this point because I do hear your heart. And your parents are very influential as they should be. and you're 18 years of age and parents do things like this all the time I'm not immune to it Rachel's not immune to it

where a parent's fear turns into what they think is practical advice and it's not practical advice it's them projecting their fear I think that's what's going on so Antoine you've got to honor them that I think they want the best for you

and I just think they're human beings who have fear and I just wanted to make that point because I think it's important when you go through this and we're giving you advice to go, yeah, go do this, go cash flow. Don't worry about what mom and dad say on this because you believe you're called to this. And then this is just part of growing up. So it's tough. I just wanted to acknowledge the tension.

Because I think we have a large audience are going, what do you say? And I'm not saying it's going to be easy, but I do think the choice is simple. And I would rather disappoint them early so I don't resent them later. So tough stuff there. Let's go to Trent in Tulsa, Oklahoma. Trent, how can we help? Hello, my wife and I are both 35 years old, and the only outstanding debt we have is our mortgage, which is going to be paid off next year.

Nice. After we pay off our mortgage, we were thinking to build up a $529 with a couple hundred thousand in it for our daughter and or a career emergency. So the idea is that my wife and I's career field feels a bit unstable right now. So if we ever get laid off, we want to be able to use that $529 to send me my life back to school to build new skills. And if we never use it, then we wanted to go to our daughter when she starts college. Is this a viable plan? And it's so what risk do you see? I would say it's a viable plan for your daughter. We espouse that. What careers are you in that you guys feel

like you're really on thin ice? So my wife is in tech. She's like a data analyst and I would be an untinured professor. Yeah, yours is a little bit more sketchy than hers. I think, you know, she can upskill in the tech space without going back to school. So I'm just going to push back against the thought that this 529 is either for our daughter or for my wife or for me if we need to get more skills down the line. And I think in your particular careers to pivot, I don't think another degree is the answer. I really don't.

Could be, but I'll give you a quick litmus test on that. is a degree the only way to do what you want to do or is it the best way to do what you want to do? If that's the case, then you could use it. But don't just make that assumption, especially for her in the technology space where upskilling now is not going to require any kind of degree. There's going to be boot camps. There's going to be classes, courses. Google just announced a whole other array, Rachel, of a six-month program where you're going to see more and more big companies over the next few years start to train the people that they want. You as a professor?

Who knows? Yeah. Now, I would say, for 529, it's an investment. So you're wanting to sit there for at least five years. And you guys are probably going to want to go back sooner than that. So I would just cash flow your wives. Set your daughter up for the 529. And then if you guys needed it for you guys, I would just cash flow it.

No matter what you want to do with your money, you need a budget. Start budgeting for free today with the Every Dollar app, the easiest way to budget. Track your expenses and reach your goals faster. Go to Everydollar.com today. Welcome back to the Ramsey Show coming to you from the Fair Winds Credit Union Studio. Well, I'm side Rachel Cruz. I'm Ken Coleman. So excited to be with you today. And we want to coach you up. AAA 825-2-225 Antoinette is joining us now in Fort Worth, Texas. Antoinette. How can we help?

Well, I'm going to be 62 next month, and I don't have anything safe for retirement. And I want to become a first-time homeowner. And I don't know if that's stupid and ridiculous or if it's possible. Well, I don't think it's stupid or ridiculous. let's focus on the possible part. Give us a picture of your financial situation, given that you have zero retirement or very little retirement. I have no retirement, and I have no money for a down payment. So I would have to go USDA or set by, sent it with a zero down. And so that would make my payments even higher. No, you don't have to do that. You don't have to do that. Do you

have any debt? Yes, I have some, but not unmanageable, and I'm getting it paid off really quick. Okay, how much that do you have? I think credit card must have. I had about $8,000 or something like that. I just paid off $600 worth of two of my accounts in the last month. Is the $8,000 credit cards or personal loans? What is it? Let's see, I paid off the personal loan, and so one of them is my car,

and the rest of them are credit cards. I've got, I think, four credit cards. How much is in your car? how do you owe on your car? Oh, gosh, I can't remember. I'm really bad with money, I mean, numbers. And so I just know that I just got it two months ago, and I had to trade in my other car because it was a 2019.

It was convertible, and it didn't convert anymore. And mechanically, it was sound, but everything else on it was falling apart. So I had to get rid of it, and I was upside down on it because last year it was worth $17,000. And then this year it was worth $5,000. And so I was real upside down on it. And so I owe more on the – I had to get a minivan because I'm so popular.

I can't have a little convertible. So I owe more on my minivan than really I should. Wow. And did you roll over the negative equity on the convertible? Yes. Into the minivan. Okay, so how much do you owe on the minivan? I don't know.

you don't know, Antoinette, you signed a loan. You don't, you don't know how much the total is. That's right. All right, all right. And she had to go to credit karma on the other thing. So one of our problems, Antoin, is you don't have a firm grasp of your numbers. Yes, she already said she's bad with them, but it's not okay. I can't remember numbers.

Oh, but it's not about that. It's about, do you have a file in your house somewhere where we got the car information? Yes, but I'm a truck driver. So my house is like 2,000 miles away. Why do you need a minivan if you're driving a truck all the time? I go home sometimes. And you're popular, so you and the ladies are hopping in the minivan. Okay, all right, I'm trying to catch up here.

Okay. Because I'm trying to figure out, honestly, if we can sell the minivan. What year's the minivan? What year? Well, I had to go for a, let's see here, a 2003, I think. Okay. All right. And with the negative, I mean, this could change your runs.

I mean, this could be $30,000, $40,000. I mean, so, okay, so Antoinette, I want to paint you a picture yesterday on the show. We had a truck driver, Christopher. He paid off all of his debt, and he has hundreds, I mean, tens of thousands of dollars. I mean, he's just absolutely killing it, and he's a truck driver.

He was telling us he had a Subaru brand new, ended up selling it, had to take out a small loan because it had gone down and he was upside down a little bit. about an $8,000 Lexus. The Lexus gets hit. He gets a check from the insurance company for $9,000. He ends up buying a $2,000 car,

takes the rest of that, and throws it at the debt, right? So there's a way to do this, and even someone in your industry, we literally just talked to him. He did his debt free screen yesterday. Here's the thing, into my, okay, so the excuse that I am bad with numbers can't be an excuse anymore. Okay,

you are an adult, you are smart, you are capable, and we have to get this under control. So the first thing I need you to do when we hang up is I need you to call the dealership or the credit, wherever you got the loan for the van. I want you to pull up the credit card again and know exactly, exactly which credit cards are out there and know exactly what you owe on them in companies. I want you to write a list down, and then take your phone and take a picture of it. So you have it documented, even if you're out and about, you have it documented.

And then the plan is going to be, home ownership is going to be down the line, okay, for you. But I think the goal here is to get yourself out of debt. And Antoinette, you're more than likely going to have to sell the minivan, okay? And you're going to get a beater $2,000 car because I want you to be out of this debt so that you can start saving for retirement. I don't want you driving, you know, have to be a truck driver for the rest of your life. I want you to be able to have a great retirement. And that's not going to be possible with the habits that you've been in, not only just financially, actually, but the way you're going about it and your attitude about it.

You've got to make the turn. And it's going to be difficult and hard, but you need to get as much facts in front of you as possible because you don't know what you don't know. Are you an independent contractor, in other words, work for yourself, or do you work for a company? I'm a company driver. I'm not kidding about having a bad memory, and I update all of my bills every other month. I have a piece of paper that tells me I keep it on a book. I look at every one of them. I see how much interest up they're charging me.

I see how much my balance is, and then I tally up my total debt. I also look at credit karma a few times a week. I just have a bad memory, and had I known that you're going to be asking me this question, I would have had this stuff. You called a money show, my friend. You know what do you mean? And so we're trying to help. We really are. And so my encouragement to you is that when there is something, a big, big, missing piece,

and the car loan is that for me right now, that I need to, I need you to know what it is because I may need you to make a really quick decision to sell it because you know how much the payment is each month? Yes, the payment is 900. $95. Okay, almost $1,000. How much money do you get paid once a month per month? What are you making? Probably about $7,500. Okay. And let me do a quick follow-up, Antoinette, because I didn't hear you. That's my fault. Did you say you're independent? And the reason I'm asking this, did you say you're an independent? No, she works for a company. Okay, do they have a 401K or some type of retirement program that you can be contributing to? Yes, but I don't, because what's the point of that? at my age.

Because you have nothing. So we can run these numbers, but, I mean, the baby steps as we teach them is $1,000 in savings just for basic emergencies. Baby step two is to pay off your debt, smallest to largest. That's why Rachel leaned in there. We want to get the debt out of your life

because we just learned that that could save us $900 a month. A $1,000 that could be going towards retirement. And so... Why would I want a $2,000 meter card? She's going to break down all the time. And $2,000 a beater card doesn't always break down all the time. You can ask Christopher

yesterday. He literally had a picture of his, and it runs great. And I'm talking to a person who's super popular, your own words. Have the ladies pick you up when you're not in the truck. I don't want to be your car. I want to get all of my family together and take them places. I hear your heart in it. I want a Lamborghini. I don't need to

I want to dunk a basketball. But some things are not going to happen because I'm 5'8 and can't jump. You know, if I want to retire with dignity, I've got to start saving money. And I can't save money if I'm in debt. Hey, Antoine, I want you to keep listening to the Ramsey show for real. I want you to listen every single day for the next six months. Make that

be your goal. Just as you're driving, listen to this show because I want this knowledge to soak in and this way of thinking and the way of life when it comes to money. I got to say, even though she got a little upset at us, I love Antonette, I love her spirit. And I think, you know, what I want to touch on real quick, Rachel, is I got her frustration. I felt it. And that's what it's like when you wake up like she did one day, 61, no retirement, no house. And it feels as though she's at the base of a mountain that's impossible to climb. However, we know, and as you pointed out, in talking to a truck driver just recently on this show, it is possible.

But the frustration is real. And I guess the thing is that it's like, hey, this is going to be hard. There's going to be some tradeoffs. Yes. And they're going to be painful. Yeah. It's about choices. We have to make choices.

And, you know, we talk to people that are on baby steps four or five and six. They've gotten out of debt in their emergency fund. And they had to make a choice to work extra. they have to make a choice to cut expenses in order to put extra money to pay off debt. They had to make choices, really hard choices, but the outcome of what they were doing was worth it. And so I think that is it.

There has to be this level of reality of to say the outcome that I want, and in her case, whether it's a home, whether it's retirement, these sacrifices that I have to make in order to get what I want are worth it. And, you know, Ken, I think there are some people in life. They're not worth it.

it for them, you know, and, you know, they live their life the way they want to live their life. But it is about choices. We have to make choices. Everyone does. You know, we don't have an infant amount of get to do whatever we want all the time. Yeah. And that is. That's difficult. So true. Hey, folks, at a few weeks, we're going to be doing our annual special giving edition of the Ramsey Show. What do we do? If you're not aware of this, it's really fun. We ask you all, and we're asking you now to share stories with us about how you have given generously, or maybe you've been the benefactor of somebody really giving generously and whether that's maybe a surprise tip or maybe you bought Thanksgiving dinner for somebody.

This is just about celebrating generosity. And we get so many great stories every year, whether, again, you've been on the receiving end of an unbelievable gift or you've been blessed by giving others. That's what we're looking for. And we'd like to hear those stories so we could feature them on the show. go to ramsysolutions.com slash ask ramsysolutions.com slash ask

and put giving in the subject line and share your story. We do this every year at Christmas time and it's really, really special. And that's coming up on December 18th. So those of you who are regular listeners or love the special type shows, mark your calendar

because we're going to celebrate living like no one else you can give like no one else. Speaking of giving, Rachel, This is where Santa Dave I think he's out of control and I may have to have a meeting with him the Black Friday deals which we're already offering

do you realize this now? How great they are. But now everybody's doing Black Friday deals before Black Friday and I'm irritated about it and we're on the train people and I'm not happy about it all right but it is what it is

you should be happy you know why $12 for best selling hard covers $12 Question for humans. $6.99 for audiobooks and e-books. $15 for our assessments and more. I mean, Dave, you're getting on the farm away. Just deals on deals on deals.

I'm not going to win that battle, folks. But you win ramsysolutions.com slash store. Ramsey Solutions.com slash store. That's where you get all the great deals. All right, let's go to Greenville, South Carolina, and Nicole is waiting. Nicole, how can we help? Yes. I am very nervous about a change that's coming to.

us and how to raise my children through this. My husband is just selling a partial of his business, a little less than 50%, and he's getting a large sum of money just before the end of the year, which leads to another question of how do we have to scramble to figure out exactly where to place this before the end of the year comes. Okay, what is a substantial amount of money? What does that mean? Six million.

Okay. Hello. That's great. Nicole, you sound like someone gave you a bill for six million. Well, I know, because I'm kind of, I don't want to act like I got the lottery. No, no, but my goodness, I hope, I hope that maybe you get yourself a light blue box, you know, with some jewelry. Come on, Nicole, let's go. Get a little something from Nicole.

I wanted to get that out of the way, all right? That's the best advice you're going to hear on this call. Nicole, wait. Seriously, hey, congratulations, you and your husband. Yeah. This is a pretty cool deal, and I just don't want to fly by that. Yeah. Now, you've got the perfect person today to, no, I'm serious.

She's very, very gracious and very humble, but I think you are really perfect to talk about she doesn't want this to change their life, the kid's life and all this. you have tremendous insight on on a couple of things so get to that but first talk about the end of the year scramble yeah i mean you guys you guys will have to pay taxes on it and so i understand you know that's going to happen and i know we want to give part of that as well sure but i'm like you know there my my husband's went and talked to someone and he's like well you know not he's he plans to go back within the next couple of weeks you know once he gets i guess more of the contract in hand.

It's like, you know, obviously he's like, well, I'm not going to get, you know, that investor pro or he's like, well, you know, I guess they're like, you know, here's your free service, but I'm there, I'm not going to tell you everything you need to know, right? Who's saying that? Well, someone that my husband had found to get advice from a business tax pro on advice like this, I guess. Okay. Okay. So. I'm so confused. It wasn't necessarily one of like they, a day ran because. No, it doesn't sound like it. So. Yeah. Well, and I'm, I mean, they, I have spoken to one of those before in the past. Yes. Okay. But then this all went down and I'm like, well, I can't really make

his changes right now. And I'm getting my husband involved because he's having to deal with this mess. And I mean, not mess, but like he's had, you know, he's got a lot of this on his shoulders. Okay. So what I would do, I wouldn't do anything. I wouldn't do anything. I wouldn't do anything. I think there's a lot of heightened emotion. There's a lot of fog. It's a lot of decision making. Don't do anything, okay? Just now in the back of your minds,

you're going to have to be taxes on this. So just that's the only, I want you to think about. So, Nicole, that's the only thing I want you to think about, okay? So just breathe, okay? So nothing big has to change. I would interview and find a great tax pro in your corner to make sure that everything is buttoned up.

I would do that. And we have some wonderful people, you know, that are affiliated with Ramsey. if you go to ramsaysolutions.com, you can, you know, interview one of them or find your own. I don't care. But nothing sketchy, nothing weird.

I mean, whatever that language was, that was weird. So that's different than an investment. Yes. Yeah, yeah, yeah, yeah. So you're, now, now a financial planner will be able to talk to you about taxes as well, but I would want to make sure that you have a great CPA that's saying, hey, here's exactly what you need to do

in file because we don't want to mess this up. Then I would go sit down with a smart fester pro and to say, hey, here is this amount of money. And before that, though, I would want you and your husband to sit down and say, okay, what are the things that we want out of this, meaning the generosity portion, let's talk through that. What does that look like? How do we want to do that? What are some things? Because you probably don't want to give, you know, 10% all to one thing. It'd probably be good to get a couple of things. And just to say, you know, as a family, how can we give out of this? I want you to look at, do you guys have a mortgage or any debt? we have like a hundred and seventy five on our house and then really all the um all the other debt is like vehicles with the business we we purchased the business property you know about seven years ago i mean but i would i would be sure so i would write a check pay everything off and then i do want you to remember that money magnifies who you are and so the way you guys have dealt with money

before the $6 million, it's going to be amplified. And do you like how you guys have handled money? You've dabbled in the debt stuff, all of it. And my fear is that the $6 million kind of creates this, oh gosh, well, we could get into this real estate thing. We could do this. And it's going to be taken up really quick if you guys aren't careful.

So I would make it a value statement of no debt. We're going to get completely out of debt. And then we're going to look at our retirement and say, okay, what do we need to put away for it to have, you know, a wonderful, which is going to be, fabulous retirement. And then what percentage are we going to spend? So to your point, Ken, I would not change anything with the kids. I think they need to be working, doing chores.

They need to believe nothing has changed. There's no benefit to knowing that you guys change. Maybe you go on a nicer vacation, and that's all they know. But I wouldn't change much with the kids. Go ahead and fund their college. Like, use this money well and have fun with it. You guys. Jury.

Earmarks. Get you some jury. Upgrade the cars. Do some stuff that, yeah, you guys enjoy. But remember, you give it, you save it, you spend it. Regardless of the amount. That's the three things you want to do. Today's question is sponsored by our friends at YREFI.

Hey, if you've tried everything to fix your defaulted private student loans and nothing's worked. Why Refi can help they build custom fixed rate plans based on what you can actually afford. Learn more at Yerefi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. It's not available in all states. Today's question comes from Kelsey in Texas. We are debt-free except for our mortgage, and my husband's income is not enough to help get our home paid off. He is a musician, and he dabbles in real estate. The musician world that he loves does not bring in any substantial income, and I earn $35,000. year. This year, he estimates that he will earn a total of $32,000 a year. How should I communicate with him about the lack of income? I understand this is his passion, his life, and a part of who he is, but we are really struggling. Okay, Kelsey, this is hard. So I want to acknowledge that you're his wife and you're going to come to him and you're rightfully going to say,

hey, 85K, which I bring home, plus your 32, which your estimate is just not enough for where we could be, where we should be, where we need to be. And let's lay that out. Let's make a numbers case. Say, hey, we need more money. And here's how I've come up with this number. I'm not pulling it from the sky. And I'm making this up to answer the question. But if you determined that we needed an additional $75,000 to knock out debt, catch up on investments, all of these things, then we present that number. And all of this is non-emotional. This is just, hey, I'm digging in the numbers.

I know you love music, and I don't want you to give it up. This is how we lead, Rachel. Do not want you to give up music. However, dabbling in real estate, can we go from dabbling to all-in? And keep the music going at night. Keep the music, find a gig here and there. Don't give up on the music. but the music is not the focus.

It is an outlet. It's creative, keeps his soul alive. It's a good thing. Yeah. But for this season, we've got to go all in on something. And since we're dabbling in real estate, if one goes from dabbling to really focusing, you can win. And I would have him go talk to my friends at the Bafini company.

Brian Bafini is the number one real estate trainer in the world. And I do everything Brian tells you. do and you'll crush it so this is a tough conversation but we have to lead with real numbers vision you don't have to give up your dream and your creative outlet but I need your help and we have got to lock arms yeah and go at this now that's the male perspective yeah what would you change what would you add to the messaging there so I think if I'm in the situation as the wife yeah I'm looking to say okay we have these goals out there that all ultimately lead to a life that I'm longing for.

I want the house paid off. I don't want to have to worry about that. I want to know that we're going to be taking care of in retirement. You know, there are these benchmarks that I would feel safe and good to know that we are at least on track of hitting. And the fact that we're nowhere near it makes me fearful. And I don't like that. And so that's me. But us as a team, I want us heading towards the benchmarks together.

And if I feel like I have to be dragging you. The whole way, that's not a fun marriage. You know what I mean? Like, that's not fun. And so there's something along the lines of starting with what is going on inside of, you, Kelsey. And then also the team aspect of marriage more and more. Ken, I don't know if it's because we've just hosted this show and we get so many

relationship calls. But there is a game changer in the health of your marriage and the piece of your marriage when you are a team on these kind of things. And money is one of the big components, right? they say in-laws, raising kids, sex, religion, money. Like, it is, and when you are aligned on these things, again, you're going to be different in them. I'm a spender, you're a saver, you may be more chill, not as goal.

Like, we're all going to still be ourselves in it, but we at least are heading in the same direction. When you're fighting against those directions constantly, that's exhausting, you know? And so I think the team aspect more and more for me for marriages, I think, is as big. So let alone just the career path, it's more, I want us to be on. on the same page of where we're going financially and how do we get there and that may mean sacrifices on one side or the other but at least we're heading in that direction right and you don't have to give up the fun creative dream or outlet you just keep it where it's supposed to be for this time

yes yes which this is just a side thing that we mess around only when we have time that's the key on those deals we're not giving it up all right let's go to armando in los angeles armando how can we help today. Hi, thank you for having me on the call. I just wanted to say I love your guys this show. Thank you. I want to purpose this with saying this is a conversation me and my mom have been having for a bit now and we're kind of trying to decide and we figured, you know, you guys are probably the best people to ask. So I'm trying to decide basically between where they're staying at my full-time job where I'm a manager at a gym. I make about $4,000 a month after tax with bonuses, or going to my passion, which is starting my window cleaning business,

that's currently producing about $3,000 a month, and I only do that on the weekends. And so I'm at a point where I personally feel like I could start generating more doing the, if I had more than a weekend to, you know, during the week to produce more. Well, let me jump in. Let's jump in right there. Are you already getting calls and leads? In other words, people are going, hey, Armando, I'd love for you to come clean my windows and you're having to push them out a few weekends just because of time. Is that already happening? Yeah, I've had that a few times already. We're actually, and that's without even, we're just getting the website and everything set up this month.

I've only had the business for about 10 months. Where are you getting your leads? A lot of them are referrals and door to door. Bro, first of all, let me just say you will not lose. I love that your answer is referrals. That means you're doing a good job for people. And door to door, that means you hustle and you're not afraid to know. Armando, that right there is the success formula for entrepreneurs.

So I love that. Do you have any personal debt? I have no debt. I am debt-free. All right. And then we call savings in a business retained earnings in your business account, and I'm assuming you have one, yes or no? I do not. So you're just taking the money you're making from the window cleaning and running it through your personal finances?

I just put it in a savings account. Oh, okay. Good. Yeah, and just in a big account currently saved up because I paid off a bunch of debt recently. So I now have $8,500 saved up. Okay, so you have $8,500. Now, is that in the savings account that's just the window cleaning business, or is that a combination savings? Combination savings, spending money to kind of go and play around with,

I always keep in my checkings about a thousand. That's great. But here's a deal. So, you know, we teach a three to six month emergency fund after we pay off debt. Do you have a, what's your, so your three to six months expenses is what? What's three months? Yeah, I only, three months really is only about, I believe it's $4,000. My expenses right now are only $1,200 a month.

I have very blessed, very blessed and I have to pay. All right. So I want to move quickly, but I want to get Rachel in real quick. What would you think is a good amount on the emergency fund just personally? Yeah. I mean, where you're at right now, I mean, maybe... $5,000? Yeah, I was going to say not that much. It may change if you're a living situation changes, but for now that. So, Armando, I'm going to recommend that you get a separate savings account for the window cleaning business. And for this example, I'm going to call it window cleaning. Armando's window cleaning, okay? You need a separate bank account for that because my advice to everybody, in this question, which is, when do I know that it's okay to leave my full-time job to go into my side hustle? And I want to see six to 12 months. I'm pretty conservative. I'd like to see six to 12 months of your salary saved in window cleaning bank account. All right? So that's just me. And the

reason is, is because when you leave that full-time job, I don't want you thinking about the next six to 12 months of a payday. You got low, low cost of living now anyway, but that's my advice. And when you get that number saved up, whatever that number is, and let's just say it's 25,000. And you've got a pipeline stacked up. Then I would say, see you later to my full-time job. I'd like to see you have six to 12 months expenses in the window cleaning company, saved, and then make the move. Rachel, I... Congrats, though. Armada. That's awesome. Thoughts on that real quick. Final word. I love it. I think it's awesome. And I think you'll get there

faster than what you expect and you're going to kill it in the window cleaning. Love it. Great job. Thanks for the call. And folks, it is truly way more than just our world-class budgeting app. I've been talking about this on the show. I got a meeting with the team, and I said, show me all the, just take me in the thing. Give me a tour. And it's amazing. It's literally like a digital version of us on the show for those who call in.

The first 15 minutes of answering the questions that the team provides you in this app, they're going to help you find thousands of dollars immediately in savings. we're seeing this in an average of people who use it. You can start every dollar for free by going to the app store or Google Play. Tons of advanced features, it's not just budgeting. Now, that's amazing. But the fact that you've got a digital coach, mentor, accountability partner, whatever you want to call it, all those facets are in there.

Fantastic. So you've got to go check it out and give it a world. It's free. And I'm going to tell you, you're going to love it. Donna is up next in West Virginia. Donna, how can we help? Hi, Ken. Rachel. I love all the personalities, but Ken, I'm really glad you're there today. I love the way

you spend a tale. You really make me chuckle. And I love your story from a few weeks ago about the welfare chicken. I grew up on a farm and can relate to that. Thank you. Yes. Thank you. The welfare chicken. You didn't get in trouble for telling them to sell the chicken. I think I was on there with you during that. I did not get in trouble. And I had forgotten about that, Donna. So thank you. That's really fun. Thank you. Your sweet lady. By the way, I have to ask, where in West Virginia are you? Oh, geez, Romney. Do you know that town?

I think I've heard of it. Do you know Point Pleasant by any chance? That's way far away. We're in the panhandle between Winchester, Virginia and Cumberland, Maryland. Yes, yes, yes, yes. Okay. I was born in that little teeny town of Point Pleasant West Virginia. 5,000 people.

Well, I've been there. Well, I'm going to tell you, not many people have. Yeah, that's right. It's across the state. All right, Donna. My sister from another mister here in West Virginia, how can we help today? Well, I'm 69, and my husband is almost 71, and we started our careers in the 70s, and at that time, people were saying, oh, you're so lucky, you have a pension, you'll have

Social Security, you don't have to worry about retirement, so we didn't, and we're doing fine now with our pension and our Social Security, but we haven't saved a lot of money, and we had to put my mother in a nursing home last year, an extended care nursing home, and it really scared me and shocked me at the cost per month for that stay. And what my question is today, and I've been having friends tell me, you know, you need to sign your house over to your kids to save it from being taken and all of this. And I know Dave says that you shouldn't do that. I haven't heard him talk a lot about that, but I have heard him say that. And I was just wondering what the pros and cons are to that.

And if there's no pros, what can we do or is there something we can do to save our house? Well, let's go back a step. What are we afraid that's going to happen that would even allow us to consider that advice? What are you afraid it's going to happen? oh for the signing your house over yeah oh well there's i guess a lot of things i mean i've been listening to the store i shoot uh show long enough that uh i know if you have kids if anything happens to your kids then then that can if they're in an accident or uh anything like that uh yeah but you're talking about you but you're talking about your house i'm talking about my house

yes and your house that my husband and i own sure and you're worried you're going to lose it to who or why? Oh, Medicare. I mean, if you can't pay, if you go into a nursing home Oh, Medicaid is going to look at, they're going to be looking at your, okay, I hear you. Now we're caught up. Sorry, we weren't 100% sure. And the reason we do, we say that is because a little bit, it feels like you're hiding assets when you just sign it over. I wonder. I mean, I don't. I know. So, yeah, not a great, not a great thing because you're basically lying to the government that you don't have an asset when you really do. So, um, Okay, do you have long-term care insurance, Donna?

We do, but I got it. It's been probably before I realized the cost. My father-in-law went into just an assistant living, and his was about $3,500, $4,000 a month. So when we got our long-term care, it was very expensive anyway because I have some health issues, so it was high. Sure. And ours is only $3,000 a month.

Okay. And then my mom's came up, and it was $14,500 a month. And I'm like, I was just in shock that it was that expensive. Well, okay, so a couple of things to think about that we don't know yet. Because how old are you guys? I'm 69. My husband's 71. So a lot of different things.

Number one, you don't know if you guys are going to need a nursing home anyways. Number two, if you did get to a point of a nursing home, you know, there are things you can do. You can sell the house and use that to fund if you need to. there's also what what are you guys doing with your pension and all of that what do you have coming in um per month you mean what we have we have uh and it's like 9,942 dollars okay so I mean it's it's decent and we did just start two years ago we have started putting some away we both bought I bought us and my husband a spouse I'm still working a little bit Okay.

And I made enough money to be able to max out both a Roth for me and a spousal Roth for my husband. I did that when we got, we got one of your pros. Good, great. And he said to get one. We got him in April, and he said, oh, hurry up and get a Roth before April 15th. For the taxes, yeah, that's right. So we did that. And then when we finally sat down with him, we had enough money saved to do another one for 2025.

So what do you have? So we started. What do you guys have total? We have 32,000 in Ross right now. And then we were playing around just during the years, and we have about 50 that our financial advisor is rolling over, about 50,000, that he's rolling over into IRAs now that we're still in with the companies that we retired. Okay. So just below 100,000. And then what is your house worth?

about 400,000 Okay Yeah so it would be one of these things If you guys did get into that Situation whether it's the insurance Some savings You know whatever you can put together To get into a nursing home

And I'll be honest on it This sounds horrible But there is a stat that once you enter into a nursing home On average There's not that long of a stay usually Sometimes it is Sometimes it's not either So it is kind of one of the last steps that family members will take

if they're not able to care for their family member. And so that would be kind of that last step, if you will. So if I was in your shoes, I may ask about upping the long-term care. I'm just curious what other options are out there for you guys. I would be looking at that because that's going to be very helpful type of insurance for you all if the time comes that you need in-house care, nursing home, all of it. And you guys also are sitting on a great asset. And you know what I mean?

If something were to happen to either you or your husband and you did get to a point that you guys didn't have the money to cash flow it and yet there was a nursing home that you knew they needed to be in, you know, him or yourself, there's always the possibility of selling the house, you know, and figuring out what to do there. Don, I'm going to give you something. Rachel made a great point. I looked it up. The average length of staying a nursing home is 485 days.

Now, of course, this varies. averages do play out. So you're looking at about, you know, a year, three, four months. So, you know, it's horrible to, but that's the reality. And we're talking about that. So, you know, between the pension and everything, I mean, Rachel, you make a very good point. It's not like you've got to fund this crazy amount for five years, you know. So, um, I think you guys are doing everything you can. What, how much longer do you think you're going to work? Um, as long as I can. I love it. Okay. Do you work full-time? No, no. I do occasionally. I'm a teacher, and sometimes I'll take a long-term sub job,

and sometimes right now I'm just doing day-to-day, and I've... I'll bet the kids love when Donna shows up to be the sub. You seem like a really nice sub. I hope so. I hope they do. They always say they do, but you know. Yeah. Well, that's good, and what about your husband? Is he officially done working or still working? Yes. No, he's officially done. He's a golfer. he's fallen into the golf I love it as much as he's paying.

Well, at least there's a little bit of a foreshadowing of watching your mom and how expensive it has been or your mom or your dad that you guys can start planning that if that time we come how would we be able to cash flow that? So thanks for the call, Donna.

Do we know if people can search welfare chickens on Spotify or YouTube and find that rant? Do we know? We don't know. Sure, you could try. But they can't.

Oh, you all missed it. It was really great. Donna said so. No matter what you want to do with your money, you need a budget. Start budgeting for free today with the Every Dollar app, the easiest way to budget. Track your expenses and reach your goals faster. Go to Everydollar.com today. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio, alongside Rachel

Cruz. I'm Ken Coleman. Thanks for being with us. We're here for you. AAA 825-5-225 is the phone number. Let's go to Caitlin, who joins us in Charlotte, North Carolina. Caitlin, how can we help? Hi, good afternoon. I'm a recent college graduate from West Virginia University, and I will start paying student loan debt come January, and I want to know what is the best and effective way to go about that. How much student loans do you have? They will be around $26,000.

And is it multiple loans? Yes. Okay, so what's the smallest amount? The smallest amount, I believe, is about $5,000. Okay. All right, so is that the only debt you have? Yes, so it's the only debt I have. All right.

Rachel Walker through the baby steps. Are you working? Yes, ma'am. I work a full-time job. Great. How much do you make a month? How much do you bring in? About a month, maybe $15 to $1,800 a month. A month. Okay. What are you doing? I work at a boutique. A boutique. What kind of boutique?

A women's boutique, just a locally owned. Like a spa? No, like a clothing store. Women's clothing. Oh, sorry, a little slow on that one. I didn't know what I take on. Well, there's lots of different boutiques. There's like boutique hotels.

Fair. Boutique spas. Sorry. Fair. None of this matters. Why do you, I have a question on your income. Yeah. That is not a lot.

For a college grad, that is way below what your expectations were, I'm guessing. Yes or no? Yes. So I've had this job for about two years. I worked this job throughout college, and that is the job I'm still currently at. Okay, what did you get your degree in? Business and marketing. So what do you want to do?

I'm not going to put you under pressure here on a show live, but give me a general idea. It doesn't have to be a company and a title, but describe the work that you went to school for that you would love to have if I could just wave my pencil in the air and give it to you. Well, the work I would be interested in is going into law school. Okay. So we went for business and marketing and we're like, this is not what I want to do, but I'm just going to finish it. And then somewhere along the way we discovered, I want to be a lawyer and a specific type of lawyer? Corporate law, sir. Corporate law.

Okay. So a tie-in to the business and marketing? Yes. Okay. What's law school going to cost you? Law school is probably going to cost me around probably $100,000. And where are you going? I have not yet made my decision, but I'll be taking the LSAT soon.

Okay, great. I want to make a quick commercial, and I'll hand it to Rachel. But you've got to get your two things. Number one, you need to get your income up, right? You should be making double. I don't even care what you're doing. At this point, you need a target of $40,000 to $50,000. Let's just put it out there.

I don't want to limit you to that, but you just need to get out there and find something because more cash, the better. Now, and Rachel will tell you what to do with that cash. But I just want to make a point on the LSAT. years ago I interviewed a law school expert on this and this is a fact by the way there are certain schools you're going to have to do your homework on this but you can figure it out easily that based on your LSAT score Rachel if you get a high enough LSAT score they will give you a full ride and the reason is these aren't the prolific ones let me just go ahead and tell you this isn't Harvard yeah it's not

the big-time schools these are the schools who nobody wants to go to their law school, so therefore they're trying to get people into their law school because they want lawyers out there, and they will give full rights. So these are going to be smaller schools, not as well known, but they have legit law schools. And let me just make my pitch on this. Nobody cares where you got your law degree from. And so the tradeoff is, Caitlin, you have to pay for the LSAT. And if you need to take the LSAT five times, take it. If we're aiming for, and we feel like the tutors will tell you, we can get you to the score, which is you a free ride. So that's my commercial. Yeah, it's worth investing, you know, five, six

grand or, like, honestly, when you think about it. Totally. With tutors and everything. And I don't know what the current LSEC cost is. To get a hundred thousand dollar degree for free. So that's what you need more money for. Yes. Plus we got to pay off these loans. So Rachel, tell her how we pay off these loans. And that needs to be your way to law school, Caitlin. I really want you to see that because you're going to be $126,000 in debt if you don't. So we want to. really work hard to avoid all those student loans. Yeah, so it's getting your income up, Caitlin. So, I mean, I really hate to say it, but I mean, I would probably be looking for another job. I think it was a great thing to get you through college. But now that you're a college grad,

you know, you made that investment for a reason. And so now we need to go ROI it. And we need to go, you know, get a job. Like Ken said, making $40,000 a year. And I would limit all my expenses. I would live on nothing. And I would make it a goal to get this paid off in 18 months, 16 months, 14 months, you know. And so, I really think you can. If you, do you have rent? Are you living at home? What's your living status? I live at home. Okay. Okay. So no rent. So I would take full advantage and make a really, really aggressive goal of getting this paid off and then at the same time be looking at the LSAT stuff and make that also a part-time job. So I don't know if it's a, I don't know right now if it's a full-time

job that you go and find, you know, a receptionist. I mean, Anything. Like just go and answer phones. I mean, do something. Or if you do the boutique during the day and you wait tables at night and you're doing a two day, you know, two job a day kind of thing to double this income. But this income needs to be doubled, Caitlin. You're a college grad. And I think that you have, you have things to offer. And again, it's kind of back to this college degree conversation that you got your degree for a reason to go and create a career. And so taking that knowledge and going and do. doing that and upping this income is going to be your number one goal. Because Caitlin, here's the deal. You are young enough and this debt is small enough that you could pay this off in a year. But you've got to make more income where you're putting $2,000 a month away. So like Rachel said, what must be true for me to be able to sock $2,500 a month away at the $26,000 loan? Knock that out and get it out of the way before the interest starts hurting you.

Okay, because I know people that have your amount of loan debt, and they're paying it for 15, 20 years because they're never catching up because of the interest payment. So you want to get this out of your life, and I just, I'm telling you, if you trust me and you do your research, you can go to law school for free or for a very reduced amount that you can cash flow. And most people don't know that, and please do that, because you're going to just be so much more at peace. So there's your homework assignment. Pretty straightforward, but you've got to hustle. Yep. So thanks for the call. You know, Rachel, that is, I love when we get that call.

And I'll be honest, I've not interviewed people in other lanes, but I would almost bet you there's other professional lanes like that, that where certain schools are going, you know, like med schools are going, we want to get people in here. And the sticker price on Vanderbilt, which is in the shadow of our campus here, versus a small school. Totally, yes. And it's an ego play to go to it. If someone's like, hey, where are you going to law school? And it's a Harvard law. Or you're going to one that no one's ever heard of. And you've got to have some humility to it.

But you're doing it in a wise way. You know what I mean? And so there's something so smart about it. But it just rarely comes up. Your clients aren't going to go, hey, I've heard rumors that you got your law degree from Greenbrier State. Is that true? Vet school, law school, med school. I bet George Camel, when he took his dogs into the vet, he didn't say, let me see your degree before.

He said, save my dogs. That was all last week. That poor guy. That poor guy in his dogs. It's like a soap hop around here, folks. We don't have time to cover it. We'll have him cover it, George, if he hosts here in the next week. Buying or selling your home is a big deal, folks.

And with all the clickbait headlines and all of the social media, traps and all of the little hacks and all the things. It can be confusing and a lot of conflicting data. And so we're here, as always, to give you the real real and tell you about the latest trends. So let's just take a quick snapshot. Median home prices have continued to hold steady around $424,000. In October, about one in five houses saw a price cut, which means buyers might have more room this winter to negotiate to get a better price. Mortgage rates dip slightly to 5.49% in October, giving some buyers breathing room, but rates are unpredictable.

The best time to buy is when you're financially ready, not when they drop. So if you'd like to learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to ramsysolutions.com slash market. That's ramsysolutions.com slash market. Or if you're on YouTube or podcast, click the link in the show. notes. Nick is up in Detroit, Michigan. Nick, how can we help? Hey, hello, guys. Thanks. I'm grateful for the time, by the way. Appreciate it. Sure. Yeah, so I own a business. I've owned about 10 years now. I've grown it from, you know,

grossing maybe like 80K a year to now we're about 1.5 million a year. Congrats. What kind of business? Well, we are mortuary transport, so we move the deceased. Oh, is that right? I'm sure you guys get that a lot. Well, no, and that, and so I just think this is interesting. So 10 seconds on this, is that, we're not talking about the hearse, we're talking about to the, to the funeral home from the hospital or from people's home. Yeah, precisely. Yeah, actually, it's everything. The hearse is included. Oh, you do that as well? You do the funeral. It gets rented. Yep. Got it. Okay. Fantastic. So, so, so cold storage all of it. Oh, wow, wow. Okay, great. So keep going. Yeah, so the issue is,

like, growth is awesome. It went well. I was always on top of it, but it maybe was a little too quick. And I know they would hate me for it. Maybe all you guys would, but I have loans. a lot of them. And so it's about 580,000. And so the main question is, my goal is to try to pay that off as quick as possible. But people that I, you know, admire when they're very intelligent people, don't think that I have the funds, like, readily available for emergencies to do that, and that I shouldn't do that. Well, just give us your picture. So, so we know you have $580,000 in loans just for the business, correct? Correct. And what is the monthly payment to service that debt? So it's about $18,000 a month. Okay. And then give me a picture, well, are you planning,

you expect you to do $1.5 million this year, 2025? I am, yep. And that's top. We were doing 2.2. So we got kind of hit kind of hard. It came down. But yeah, that's definitely sticking around. Okay. So 1.5 top line, that's your gross. Yep. Okay. What kind of retained earnings do you have? Do you have any savings in the business? Yeah. So, yeah, some of the stats are probably helpful is that like it varies from about maybe like one one 10,000 to about 150,000 a month and the profits can range from negative 10,000 to about positive 30,000. That's a snapshot from this year. It's in like pretty average. How many months? Okay, but how many out of the 12 months were you in the negative? Um, once a negative 2,000 and once negative 5,000. Okay. And then

your best, and that includes paying it off. Gotcha. And your best month is 30,000 profit or actual net profit. And how much are you bringing home? I pay myself like 40,000. I'm just trying to build something. Okay. Okay. Yeah, I don't spend money in my personal life or do much, but like a really cool way, though, you know. Sure. Yeah. How much, how many people do you have working for you? I got 25 employees. Okay. Because I'm just trying to think where you can be lean on the expenses side, because that's the way you're going to be getting, obviously. What's the debt vehicles? There's about maybe 200 vehicles.

I had to take 200 out for taxes that weren't paid. So that was a big hit. So I'm just paying back payroll taxes. Did we learn our lesson on that? We did. I hired a new CPA. Not that I should be looking at it too. It's my fault.

Right, right. That's okay. Not judging, but just want to make sure that we've now adjusted for that, and we're never going to have that surprise again. So that's good news. Of course. Well, I think your friends are wrong if they're saying they shouldn't pay it off. Yeah, I only have 50K in reserve, and so their concern was, like, if you have a couple

bad months in a row, then you'd be done. And it's not an unwarranted concern, but five years or two years, it just seems really appealing. To keep... To be debt-free, like instead of five years. I think you can do it, but again, it's the same advice we give other people, Rachel. tell them to just go, I mean, it's a baby step process, right? We say smallest or largest when we're talking to personal debt. And so in your case, you're just chipping away at it.

And so you've got to come up with a business budget too that goes, all right, I'm going to have some variable numbers here. It's just the nature of the business. So it's really locking in. Rachel, start to correct me when I get wrong here, but you're looking every month at the books. And when the books are cleared that month, we know, okay, this month, we cleared $5,000 net. That's after paying you and everybody else. Okay, well, then that's going to change how much we're going to put towards the debt. But then we got a big month of $30,000, we can put more. And so it's just being really disciplined and looking each month to do what you can.

And as you grow, knock this thing out. Yeah. Is it seasonal, Nick at all for you, the ups and downs? No, it's pretty, pretty. steady. Maybe winter's a little busier, but not enough to be like, you know, season will work. Can I ask a really dumb question? Sure. I understand it's about people dying, but aside from that,

what causes it to drop from 2.1 whatever million you said, forgive me for forgetting, to 1.5? In my case, it was a client. Aha, a client that was, I don't know how to say it. Because we, you know, we work for, you know, all the funeral homes or, you know, we're the counties, the medical examiners, colleges, gets of life. So a client dropped off. Correct. Okay.

Yeah, big one. So are you in the process of replacing them? I mean, that's the goal. I mean, I'm sure every business has its challenges, but in this industry, it's just super slow to change. If you have a director of a funeral home, they use a service for 30 years. Right. Unless there's the reason to change. Yeah, you've got to really.

I just kind of be there, be ready. Yeah, it's so relational. I get creative other ways. Okay. All right. I was just curious about that. So, I mean, this is a, Rachel, thoughts on that. I mean, this is just a...

And I was just trying to run some quick math, yeah. Do you think to, like, 50,000 in the bank as far as, like, maybe, like, that just being the reserve amount, is that comfortable, you would think, with 50,000 payroll a month? I would probably do three months. Three months, yeah. I would do three months. So, 150,000. I mean, so for me to say that much, that might be a year or two, right?

That's correct. So I would probably lower that. Yeah, because always, Nick, too, if you guys, because if you're being aggressive on the debt and you have two bad months and you only have one left, you could pause the aggression on the debt, stockpile some money, pause that for about three months to pile up some money, and then press play back on getting out of debt. But, yeah, I mean, I would have a goal to try to do all of this, and gosh,

I mean, if you stayed focused. I can be focused. What, yeah. I mean, give yourself two years. I don't know. What you can do to be very aggressive. business, if you have a bang-up year, like just phenomenal growth or just a great year, $2 million year.

Yeah, look at this point, any growth is majorly profit, you know, so a majority of process, I'm at that line, right? So after you get the three months of retained earnings in there to be able to cover payroll, every nickel of the operation, what do you think you could put away in a year towards debt? Towards debt? Yeah, I mean, I don't think two years is out of the question. I think that could be done. I mean, if I'm paying $18,000 right now in that debt and I have some months where I'm making $10 or $20,000, yeah, of course.

I think you're going to feel, listen, that's the point you're going to love not having any debt on this business. Can you imagine, can you imagine just for a second not having $18,000 a month going out to service that debt? Yeah, that's why I feel like, you know, sometimes I'm like, oh, man, my business is not doing well, but I'm like, no, it's healthy. It just needs to come through. It just needs to make it through this. It's a moment. Yeah, I would probably make a two-year goal and just say, you know what I mean, especially if you lowered what you have, that's going to throw a big chunk at it, which is really

great, and get the IRS debt paid off first, the 200 that you had the IRS, and then everything else, yeah, start chipping away at it. But I think if you stay focused and diligent, Nick, honestly, I think you're going to see a lot of progress and throwing that extra at it. Yeah, I think it's great, you know, business is business. I don't know, we need, I guess we need next business. Everybody's dying. It's horrible.

I'm trying not to make any jokes. It's a very serious topic. But it's just like I wanted to know what was affected his business. He's like, well, it's a little busier in the winter. I'm like, oh, boy. All right. All right. It's time for a fun.

fun call here was Stephen, who is a Baby Steps Millionaries in Minnesota. Let's bring him on here. Stephen, how are you today? I'm just fine and dandy. I'll bet you are, sir, as a Baby Steps Millionaire. You don't have a whole lot of gripes, do you? Not too much. All right.

I could gripe and whine, but nobody's going to listen to me anyway. You know what, Stephen, I appreciate that, because for a second, I thought you were going to give me a few, and I thought, oh, I opened up a can of worms here. But, hey, we are so excited to talk to you. tell us how old you are Stephen I'm 72 72 okay and what is your net worth net worth is around 4.7 million 4.7 million what is that made up of multiple things land I'm a farmer retired farmer I call it unemployed but no retired land I've invested in some

apartment complexes, IRAs, stocks. Yeah, that's awesome. What was the, from an income perspective, Stephen, what was the lowest you've ever made in your life? The lowest I've ever made, probably lost about $20,000 or $30,000. Oh, a negative. Okay, that's good. A negative.

that's one of the problems with farming is it doesn't always it's not always profitable sure you can have a real bad year yeah what was the best year you ever had the best year i've ever had probably between two 250,000 great well done it all depends on crop yields and market prices and what was your uh what was your specialty was it crops? It raised corn and soybeans, and I also raised hogs later on, started out with a cow herd. Nice. Very nice. You did a little bit of everything.

All right. Now, the question we love to ask our babysat millionaires is, did you inherit any of the $4.7 million? Yes, I did. I inherited probably about $800,000 in land from my dad when he passed away. Okay. Which was about, I'm thinking about 18 years ago. Okay. But you made $4 million on your own.

It's very impressive. Yeah, between me and my wife, yeah. Yes, yes. Yeah, as a family. Can't forget her. That's awesome. Now, was she active in the business, the farming business? She was actually a registered nurse.

Oh, okay, gotcha. Very nice. Put it bluntly, she probably worked. to support my farming habit. That's a good lady. That's awesome. Okay, do you have a degree? Yes, I do.

I have a degree in animal science. Nice. And what was your GPA? 2.004. Yes. That's my kind of guy right there. I'm not even sure I sniffed 2.0, Rachel, in college. Squeaked out.

It was probably in that range. Yes. Well, my college years, I had an elbow problem. It went from the table to my mouth. It got into, I've always claimed that I've only been drunk once in my life. It just lasted five and a half years. You like the beer? Did you, Stephen?

A little too much. Well, that explains. He enjoyed his college. He did. And you know what? He got through 2.0, and now he's lived to tell about it. I appreciate the honesty, Stephen. The honesty's good.

You're a hero all across America, I'm sure. Fantastic stuff. All right. The other thing is it did take me 17 and a half years to get that degree. That's right. Oh, really? Taking classes here and there all over the place and getting married and having kids. Just stuck it out.

You know, I've never heard of the 17-and-a-half-year plan. That's really fun. Not much of a plan. No, not at all, but you've done well. Okay, so do you drive brand new cars? No, not very often. I did buy my wife. The last car I bought, I actually bought her a new one.

Good. What kind of car? It's a Kia Sorrento. Oh, great, the Kia's. And did you pay cash? Yes. Okay. We've been paying cash for our vehicles for a long time.

one of the things that we have done is my dad was very good about teaching me some different things about finance that line up with the financial peace program one of the things that he taught me was is that if you borrow money it's easy to borrow money but it's a bugger to pay it back well said But even in spite of that, he also said, don't use your own money. Use somebody else's. Well, that doesn't make sense. No, it doesn't. I was going to say, not sure that aligns with the show, but you just wanted to tell us what he said anyway, which is great.

So is there any advice you would give to your 25-year-old self or 25-year-olds that are maybe drinking a little too hard in college right now? and they want to win financially, what would you tell them? Just keep working. My wife and I both. It's, I mean, you guys always preach the best way to get out of debt and get wealth is to work hard and increase your income. Even though my wife is a registered nurse, I mean, she worked multiple jobs. She's got her own little sewing business where she designs, digitizes designs,

which she actually sells over the Internet all over the world. And then she sows them out for people, too. And she played organ at the church. She actually taught college. Oh, my gosh. Two different colleges, taught nursing programs at two different colleges for a while. Wow. Well-rounded lady.

Yeah, I kind of out-kicked my coverage with her. How long have you guys been married? Well, you'd have to ask her. She's listening in, but she'll tell you 51, but I say 50 good years. Okay. I feel like there's... A couple days here, a couple days there where it wasn't so good. It was usually my fault.

Now, okay, now I'm catching up. I'm going to use that one myself, Stephen, if you don't mind. That's good. So she would say, I like that. 50, though, congratulations. 51. That's amazing. That's awesome.

Yeah, give some... Actually, we've been... We were high school. Heart, so I've been hanging around with that woman for almost 55 years, 56 years. God bless her, man. Okay, what marriage advice do you have, Stephen? Being married 50 years, what would you say to someone? That's newlywed.

Love this. Maintained communication. Keep talking to each other. That's the important thing. And I mean, that's one of the biggest things in our finances, too, is that we're always talking to each other. just constantly letting each other know where we're at, what we need, what we want, can we do this, can we do not do that, and be willing to be honest and sometimes say,

no, we can't do that. Yeah, yeah, and be on the same page with it. Yep. Love that. That's great, Stephen. Well, Stephen, thank you so much for sharing your Baby Steps Millionaire story. it's always fun, Rachel, to walk through the journey of these folks, you know, whether they be 41, 51, 61, 71, 71, 71, whether they, you know.

He had some Goodwin liners in there, Ken, and so did you. May I quote you, Ken? Yes. When he asked what kind of car, his wife, he bought his wife, Akia Sorrenta, and you said, oh, the Kia's, like they're a family. You know, I hear good things about the Kia's. I've never owned one. It literally sounds like.

family. I don't know why. He just chuckle in. It made Kelly laugh too. Oh, the Kiyas. Well, you know, it's a relatively new car brand in the U.S. I don't know much about it. Quick poll in the audience. Thumbs up on the Kias or thumbs down

in the audience? Oh, we're getting mixed reviews. Wow. No, no. No mix. It's like 90% thumbs down. Stephen, you may not have picked a great car for the wife. I don't know. I got to go get consumer reports. This will be The Hondas or the Toyota's.

We know Hondas and Toyotas have lasted a long time. Oh, the Kias. Oh, the Kias. Oh, the Kias. Our scripture of the day is Jeremiah 923. This is what the Lord says, let not the wise boast of their wisdom or the strong boast of their strength or the rich boast of their rich boast of their rich. or the rich boast of their riches. Our quote today from Thomas Soul,

we all enter the world knowing nothing, but by the time we're teenagers, we know it all. Sometimes it's decades later before we know enough to realize how little we know. Ooh, that's good. Boy, I'm living that right now. I agree with that.

I got a 16, 17, and 20, and you'd think I was a village idiot. Like, I'm surprised dad knows how to get to work and get back home. Is it raining? Is dad out there standing in the middle of? the rain. Dad, come on, dad.

They just think you are just stupid. Is that it? It's coming. It's coming. I know. You got three. Because they think we are just. Right now, you're heroes.

I meant, yeah, yeah, yeah. You are the sun, the moon, the stars. Yes, yes. And then it turns. Middle school, it starts to turn. And then full-blown teenager, you've lost your mind. You just think. It's a miracle mom can dress herself.

It's unbelievable. It's that kind of thing. It's just part of it. Oh, my gosh. Keeps you humble. And then you realize, oh, oh, they do know. something. And then you realize in your own life, wow, I may not know as much as I thought. Maybe the world is bigger than what I was even thinking, you know?

That's right. You start thinking. Yeah. Oh, man. So goes life. It's hard to come to work every day and give advice on the radio when you feel like an idiot all the time at home. I'm in a state of confusion all the time. Anyway, it's part of it, folks. Welcome to parenting teenagers. Whatever, your kids love you. We had dinner. We had lunch with love with, love with Thai. They could love an idiot. I know we had lunch with some of our team in Thai. We did in Chicago. Yes. He like, love.

I love to shoot kids. It's great. But, you know, they still think you're stupid. Gary is up next in Austin, Texas. Gary, how can we help? Hey, Ken and Rachel, thanks for taking my call. My wife and I, we've been married. We got our, we had our 20-year anniversary back in January, and we realized. Congratulations. Oh, thank you. We should be further along financially than we are. I think we're doing okay, but we could be doing way better. And basically, my debt right now, We have $12,000 we owe on one car, and we owe $7,000 on our three teenagers orthodontic bill. Oh, yeah. Boy, I've got post-traumatic on that, dude.

That's brutal. Yeah, so other than that, we have no other debt. I do have a beneficiary IRA that I got back in 2010 when my grandpa passed away. Okay. It had $24,000 at the time. I've taken the minimum distribution out every year, and now it's about $70,000. And, of course, every day with the market right now, it's kind of fluctuating. Sure.

But my question, and plus my teenagers, we have two cars at home, and we're looking to potentially get a third car because they want to go out and work, but it's hard because I have four kids. Well, I also have a four-year-old, by the way. So it's a crazy dynamic. But my teenagers want to go work, but it's hard because we have to shift the car around because we only have the two, and it becomes because both my boys now can drive. How old are they?

So we want to have a little, maybe $8,000. in cash to buy a car. So basically my question is, if I took out, say, 20 or 25,000 from that beneficiary IRA, I know I'd have tax implications, but would it be worth it to pay off my orthodontist in my car? So we have two cars owned out right in cash, and then we could potentially buy a third car in cash, and then that way I can move on to the baby steps from there.

No, I really wouldn't. I don't think I would unplug that IRA. I mean, I just feel like that's invested. I think there's a part of that that, yeah, you would pay taxes on it for sure. But there's a part of me that wonders, okay, how much money do you guys make? About influx rates of overtime, but somewhere around 180 a year. A hundred and eighty a year? Okay. Yeah. Yeah, why don't we live on 90 and do all of this? Yeah, I mean, if I heard, live on 90 for a year. Seven thousand in dental, 12,000 in a car, yes correct that's it that's the only debt yes and whose car is the 12,000 on it's my wife well both cars are ours or our teenagers primarily use the one car my wife and I use the other I have a

work vehicle that I can take that I use most of my day for work but I can't use it when I'm yeah Gary just cash flow this I mean part of the baby steps is a level of changing sacrifice you know if you cash out this IRA nothing in your life has to change you're just plug in in money and fixing your problems and you're unplugging something that actually is going to be able to go up in value so quickly over time. And because how much is in the IRA? That particular one is 70,000. 70. Yeah, I don't think I would do it. I would lower, I would lower lifestyle. Gary, I would live. I would have you guys be on a really, really tight budget for one year and get all this

knocked out. So we've been doing the every dollar. app since our anniversary last January, and we have been making progress at it. I guess my thoughts are I really want to get to, I'm 43 years old, and I do have two Roth IRAs now, but they're just not as much. I started when I was 18, and I'm just disappointed that it's only worth, mine's only worth $100,000 in my life since like $60,000. I'm like, gosh, I thought by this point in my life I'd have more, because I haven't been able to contribute as much, or I should say, I haven't contributed as much. So basically my thought is if I just took this out, deal with the tax, and then I could start really hitting that 15% amount to my retirement and kind of loading it

earlier. I understand your reasoning. I understand your reasoning. But I'm with Rachel on this, and I would tell you to channel the thought, the emotion you just gave us, which is, gosh, I only have 160 and I wish I had more. And you don't want to touch that because that's, that's, that's that's working for you. And so I would take that angst, that frustration, and I'd figure out how to make more money. I'd figure out how to sell some stuff. I'd figure out a way for the two high schoolers to get to their jobs in other ways or whatever, whatever, whatever. And I would knock these debts out. 19,000 on your income is very, very doable. You know, we're talking about, and you don't have to answer this on the air, but this is the homework assignment. What would need to change?

or what would you all need to do? I'm talking about you and your wife, collectively as a team. What do you need to do to be able to put $2,000 a month towards the $19,000? And I just think if you frame it that way, you might be surprised about how doable that is, and now we're doing this in less than a year. Okay. And now you're building the emergency fund. Do you guys have savings at all anywhere else?

Um, a little. I mean, I say if we have a school account, our kids are, have been homeschooled, and so we have, it's actually more expensive than, it's not crazy expensive, but it's, you know, $3,000 a semester, probably we pay for them. So we have a money for that. That's really allocated for that. Sure, sure. But anything else in savings? Just a thousand dollars. We recently brought it down to $1,000 to help pay down the car. Okay, gotcha. Here's a crazy thing. Real quick, let's just run through this super fast. The $12,000 car, what's it worth if you were to sell at private sale? Probably mid-20s. All right. Since we're being uncomfortable, and we're telling you to be uncomfortable, and Rachel's right. I'm going to take what I would do. Now, I'm extreme

on this, Rachel, you tell me if you think this is too extreme on this one, but I'd sell the car and knock that debt out. What's that monthly payment? The minimum is, like just under $400. So here's what happens. If it's worth $22 and you owe 12, if I'm doing the math, right, you're going to have somewhere in the $8 to $10,000 range off the sale of that. You go get an $8,000 to $10,000 car, and it is what it is. We're in a season right now of rebuilding and you're jump-starting the rest of your life.

So we're going to make a sacrifice. What we just did there is we paid for the car, the secondary, you know, we're paying for another car cash, and we just freed up $400 a month. that's what I would do. Is that too extreme? No, not Sarah, because I know there's only 12 left and I know that's why, but you know.

Yeah, I mean, you guys can make some moves, Gary. To Ken's points to get this cleaned up. I mean, you really could. Now you only got seven grand left. Yeah. And $400 extra to put towards that. I mean, if I wanted to get it out of the way quickly, that's what I would do

and not take the easy button and pay taxes. And I don't want to mess with my investments right now at 43 years of age. I don't want to touch that. I need that to be growing. Well, my other thing is, I'm like, it's $180,000 income, you know? I'm like, I think you guys could really do this in a year. I really do. So I think there's something about the discipline, which you guys have.

You started, you know, the $1,000 and you're throwing the rest of the debt. It's amazing. But I just don't think I wouldn't touch IRAs. I really wouldn't. Yeah, I agree with you. All right, folks, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.