The Ramsey Show - App - My Wife Bought 5 Horses on Credit Cards (Hour 2)

Episode Date: February 22, 2023

Kristina Ellis & George Kamel answer your questions and discuss: "We rent from our in-laws and they may be evicted soon" Getting finances on track after a divorce, "My wife bought 5 horses on credit cards", plus an update on George's #HorseGate saga, "Should I cash out my 401(k) to pay off debt?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm your host, Christina Ellis, joined today by my co-host, George Campbell. And we're taking your calls at 888-825-5225. If you've got questions about student loan forgiveness, how to pay off debt, going to college debt free, anything that's on your mind, if you just need a second opinion, somebody to talk through it with, give us a call. Let's go to the phones. First up, we have Jessica calling from San Francisco, California.

Hey, Jessica, welcome to the show. Hi, thank you for taking my question. We're happy you're here. How can we help? So my husband and I are renting an in-unit house from family, but due to her drowning in debt, our utilities are constantly threatening to be shut off due to her not paying the bills. Should we stay and continue to take advantage of the great rent rate and save faster for a down payment or move and pay significantly more and

our savings get slowed and stalled drastically? Okay, tell us more about the situation. This sounds pretty dramatic. So have the lights been shut off yet? No, in the past, I would, since the beginning of the year, I would say we've had three different threats of either the PG&E and or water being shut off. What's your relationship like with this relative? She's my mother-in-law. Ooh. Yeah. That's tough. So then we've got a whole marriage dynamic, right? So how does your, yeah. How does your husband feel about this?

So my husband is a very loving soul and he wants to fix everyone's problems. Um, but we, we can't fix this problem for her. Um, so, I mean, we've come to her and said, you know, we're willing to pay a little bit more in rent, but our conditions are she has to get onto the Dave Ramsey plan and we're willing to help her with that, but she doesn't want to. What have the conversations been like when you say,

hey, we would love to, you know, have electricity and water. Could you, I don't know, keep know, have electricity and water. Could you, I don't know, keep up with your bills? How does she take that? Well, she feels insecure because the rules are reversed, right? Your parents are supposed to take care and mentor your kids, not the other way around. Well, she's not doing a good job taking care of her son in this case, if that's the attitude she has towards it. You know, both sides are struggling here. So what is she, does she not have the money? Is she just misbehaving when it comes to her spending?

What do you think the actual root of this is? So I think the root of it is, you know, recently she's been going through a pretty sticky divorce. And so that's been consuming a lot of money in attorney fees. She also doesn't have a job, and we've been trying to help her pursue that route because she needs more of an income, and she just is not willing to do it. So is your rent basically floating her life and covering her mortgage? Basically, so right now she's in a situation where the only thing she is responsible for are the utilities and her personal finances, because her ex-ish husband is still paying the mortgage. So luckily we don't have the mortgage as a threat, but...

So where does your rent payment go? That is an excellent question. I would love to know that myself. Because he's just paying, does he live there too? Who's living in this place? You said it's in unit? Yeah. So it's a large property. So there's the primary house that you would see from the street. And then in the back half of the property, there is a whole separate unit. That's like an in-unit, one bed, one bath. So that's what we live in. Who's in the primary? Just her.

So my mother-in-law and then her special needs son. So what's going to happen with this divorce with the property? She's going to lose it. Which would mean you guys are out too? So we're not out because I was smart enough to get a lease that protects us from that. But you're going to be leasing from her ex-husband at that point? Yes.

We'll just change who we pay from. I feel like that would change the dynamic with my landlord drastically yeah this this whole situation sounds a little jerry springer and not not very fun if i'm in your shoes i'm getting out like this this is pretty toxic as is and i think you know that but i'm sure it's complicated so if your husband this is his mom and you said he's the nicest soul, he wants to help her. When you've thrown out the idea of, hey, maybe we should move somewhere else, how does he take that? I think that his primary concern right now is that he really, really wants to leave, but he wants to do so. He wants to move into our first home is his thing.

But being in California in the Bay Area, that's tough to do without a sizable down payment. So that's kind of where we're stuck in between. So how much money do you guys have right now? So right now that we could pay comfortably in a down payment, we probably have like $35,000. Okay. And what's a home price you'd be looking at in that area? In this area, homes start at roughly $550,000. Okay. And what are you paying in rent right now to your mother-in-law? Right now, it's great. I pay about $1,000 a month. Okay. And you said it's a one-bedroom? Yeah. One bed, one bath. I mean, we couldn't find anything else better.

What's your household income our household income is about i would say probably 90 000 a year okay well living in the bay area i would assume you guys are going to have to up that income yeah before you even get out of there yeah and so that would be a one is let's up the income so that when we do get out and rent maybe double, we can still float it. So I don't think we're quite ready for home ownership. I would sign a lease for six to 12 months at the next place while you continue to save up the down payment and get the income up. I don't know that you're going to be able to make a leap immediately from this place into home ownership. That feels scary to take on, you know, four or $500,000 making 90. Well, and George, if you're in her shoes,

what would you do? Would you go ahead and just take higher rent and live somewhere else or stay? I would have an exit strategy. If we can't now, we don't, when is the divorce going to be settled? Do we know? I mean, it's been going on for four years, so. It could be another year. So when is your lease up? Yeah. My lease is up in a year and a half. Oh, wow. That's a long lease. Well, I would have an exit strategy so that if things keep going south, we can get out easily and hopefully you can get out of this lease, right? Are you stuck in this lease? Yes. I am not stuck in this lease. Well, and I'm assuming with the fact that they're literally having issues with their utilities, there's got to be some way to get out of it if they can't provide basic.

Yeah, why aren't the utilities in the ex-husband's name and he takes care of it if he's taking care of the mortgage? Because he didn't want to. I mean, he doesn't live there, and so he's like, I'll pay for the mortgage because he has a construction business on the back half of the property, so he still needs access to the property, but he doesn't want to pay for the utilities. I would have an emergency family meeting with everyone involved,

as messy as it may be, and go, listen, we're in the middle of this nightmare. We need a solution here. We need someone to pay the bills on time. Be adults. I know divorce is hard and messy, but you guys are in the middle of this thing too, and you have to take care of yourselves financially. So I'm getting an exit strategy and

getting out of there. And that means getting the income up and saying bye-bye to this weird ex-husband mortgage situation. I'm with you, George. We'll be right back. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours

take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to the Ramsey Show. We're taking your calls at 888-825-5225. All right, y'all. I know a lot of you guys have questions about taxes. It's tax season.

I know I can feel a lot of people breathing a little heavier just thinking about it. We get it. Taxes are confusing. But to help you get a better handle on them, let's unpack one of the questions that we got from one of our listeners. They wrote, what's the difference between a tax deduction and a tax credit? This is juicy stuff, Christina. The stuff they didn't teach you in high school. They were like Pythagorean theorem. Here's when the war of 1812 happened. Spoiler, 1812. But they didn't teach you about taxes. And so this is a common confusing point with taxes. What is the difference between a deduction and a credit? So let's go through this real quick.

A deduction lowers your taxable income. And so you simply subtract the deduction from your income. And that is what the government sees that you actually owe taxes on. Now, credit, on the other hand, is actually a dollar for dollar discount on what you owe. So let's say you do your taxes, your income was 70 grand. At the end of the tax return, you owe a thousand. Well, a $500 credit will slash your bill down to $500 left. And so the credits are awesome because it's discounting that final total. The deduction is lowering the taxable income. And there's tons of deductions and credits out there. On the deduction side, you've heard of the standard deduction, which is what most people do. It

doesn't make sense to itemize for a lot of people. Medical deductions, charitable deductions, business deductions, and then credits. You've heard this one because of the pandemic, the earned income tax credit, the child tax credit. There are some education credits, dependent care credits. And so those are all really good to look into. And if you want more tax tips like that and software that helps you file on your own with confidence. You can head to ramseysolutions.com slash smart tax. It's just $19.95 right now to file your federal return online. And there is no hidden fees like the other guys. There's no sneaky offers. They're going to put you into debt. Just go to ramseysolutions.com slash smart tax. That was a good explanation, George. And I think

it's so true. These are so many things that we wish we would have learned in high school, but you get out in the real world. And when you try to look up taxes, a lot of times the stuff is so confusing. Well, it takes you to the IRS website, which, bless them, not the simplest explanation a lot of the time. So we've tried to make it simple for regular people just trying to do their taxes and get through this season. All right, let's go back to the phones. Next up, we have Sam calling from Charlotte, North Carolina. Hey, Sam, welcome to the show. Hey, how you doing?

Hey, we're doing well. What's up? Well, I'm at a point where I'm kind of starting over. Went through a divorce a few years ago, and I feel like I'm kind of behind a little bit. I'm 39. I'm just of behind a little bit. Um, I'm 39. I'm just now starting to probably,

I would say make a pretty decent salary. And, but, uh, on the good side, I paid down a lot of my debt. I only have probably like five and maybe 6,000 dollars worth of debt. And, uh,

the company that I work for, they do give me a 401k on the BlackRock 401k plan. Okay. That I was listening to y'all to max it out. So I've been doing that. But where I'm stuck at is I'm renting an apartment right now of about $1,300 a month, but in about a few more months, my lease will be up, and I'm trying to decide, should I buy a home?

Like, it's just me. I don't have any kids or anything. It's just me. But should I still go in and get a home that I'm going to settle down in, something that I sort of like, just get started tackling on that mortgage or should I get a home that's more of an investment to build, I guess, wealth or income? How much money do you have in the bank right now? Well, actually in the bank right now I probably have probably about $5,000, but in my 401k I have probably about $5,000, but in my 401k, I have close to 50.

Okay. So we're not going to touch the 401k because you're going to get hammered with penalties as well as taxes on that. So we're going to ignore that. We're going to pretend that as money locked away until you actually retire. So aside from that, you have $5,000 to your name? Yeah. Okay. And you said you have $5,000 to your name? Yeah. Okay. And you said you have $6,000 in debt left? Yeah. And I'm going to get maybe like a $2,000 income tax return. Good. So that would leave you with about $7,000 in the bank? Yeah. Okay. And how much are you investing right now, percentage-wise, of your income? Well, the company I work for, Frito-Lay, right now their match to me is 4%, but I'm putting in like 12%. But on their website, it suggests that I should be putting in 15%.

Okay. Well, man, they must be following the Ramsey plan, encouraging people to invest 15%, which is what you should do once you are out of debt with a fully funded emergency fund. And so you are not quite there. You're close, man. Once you get that tax refund, you're going to be able to pay off all of your debt in one day. Right?

Yeah. Yeah. And I was thinking that, but I just felt like, you know, like, man, I'm 39. I'm supposed to already be, you know, $300,000 in the savings. I'm supposed to already have a house. You know what I'm saying? Man, you've got to run your own race, Sam. I know you feel like you're behind.

You've been through it, man. You got knocked down with that divorce. And that's okay. But the goal now is not to make it look like you're ahead. The goal is to actually get ahead. And that means getting out of debt and getting a fully funded emergency fund first. Well, and sometimes whenever we kind of feel that shame and we feel that frustration that we're not further along, we can be more likely to try to rush things when we're not quite ready. And you're not quite ready to buy a home. You're not far from it. You'll be there soon. But like George said, you know, we want to do this the right way. We want to build wealth that's really, really going

to last. So I know right now it's going to feel like we're asking you to kind of take a step backwards and, you know, pause investing, pay off that debt, get your fully funded emergency fund, and then invest. But this is just going to be for a brief season so that when you move forward with investing, you have a really strong foundation. And also when you buy that house, you know, you've got to get at least 5% down, hopefully closer to 20% down. You know, we want to buy the house the right way. So I would first kind of work through the emotions and, you know, just that feeling of I'm behind. I got to hurry. I got to hurry and get ahead because that can set you off course.

Sam, what's your income? I'm a truck driver, a local. I made, last time I made about $88,000. Awesome. We have a great income there. And so here's the plan. Pause investing for a season. You're going to go down to 0%. It's going to hurt, but it's going to light a fire under you, and it's going to give you more money in your bank account to get through these baby steps. So your next goal after that, you want $1,000 in the bank. You have that. Any other money, we're throwing it at that debt. It's going to be gone real soon, and then we will have no payments. We'll have $1,000 in the bank, and we're going to add to that with a three to six month emergency fund. What does that look like for you maybe 15 grand yeah honestly uh i have one other thing i wanted

to throw at you um i'll throw at you guys um i have a car and i owe um i haven't paid off earlier but i only owe 748 dollars left on it okay but I do got hot mileage on it, but it's an Infiniti, but I mean, it still runs great. But I guess what, you know, I was thinking like, you know,

don't tell me I didn't get another car payment. And then I'm, you know, I wanted a mortgage, but like in the Charlotte market, I mean, market, like you do feel the pressure to get something.

They make you feel like price is going to jump so much every month you wait. So that's why I was feeling the pressure. Well, the price doesn't matter if you're hanging on to that car, so why not just pay it off today and just drive it until the wheels fall off? Yeah. Who are you trying to impress? Myself.

Well, you know what? I'd be impressed if Sam gets out of debt and stays out of debt and starts to build for his new future for Sam, not for anyone else. And so I know it's going to take longer. You're behind other people, but you're further ahead than other people. And so the truth is, who gives a rat's you know what about this situation? You need to do what's right for you, Sam, and that is pause investing, get out of the debt, get the emergency fund. You know what to do, but it's hard to do it all with focused intensity. Well, and picture 10 years from now, Sam. Make that guy proud. Don't have that guy be calling

the show because he's got $20,000 left on his car loan and he's frustrated because he's not actually where he wants to go. This Sam has the potential to really be way further ahead in 10 years. So focus on that guy. We're rooting for you. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. We're taking your calls at 888-825-5225. All right, it's time for our question of the day. Today's question comes from Peter in Tennessee. My wife bought five horses using credit cards without my knowledge while I was out of the country. Uh-oh.

We reconciled after that rocky stage in our marriage, and we decided to sell the horses. She sold three of the horses, but now one of the two remaining horses is sick. She argues that we need to restore the horse's health so that we are able to sell it. She bought the horse for $5,000 and hopes to sell it for $2,000 if it's healthy. I would like to euthanize the horse, but my wife doesn't have a problem going into more debt to save it. How do we define a limit on expenses for the horse's recovery after which if he doesn't get well, we can just decide for euthanasia? Oh my goodness. George, are you sweating? I have a sordid past with horse-related questions on the show, Christina. If y'all know, I took a call a long while ago with rachel

and i told a girl to sell the horse that call is like legendary now yeah and so to get this is not a troll like someone actually sent this question in this is not trolling from the booth guys um and it listen i will say this horse people there's two kinds they're either very wealthy or they're broke and this is like an addiction level. Yeah. You know what I mean? If this was gambling, we would say you have a problem. So they're trying to get out of this mess.

Obviously, I am not a part of the equestrian community. I did look up options for this. And here's my take. I don't think they should sink money into this thing. And I don't think they should euthanize the horse. I think there's another option. Let's hear it, George. What they're saying is, don't think they should euthanize the horse i think there's another option let's hear it george because there's what they're saying is hey should we sink another five grand into the horse to get it back on its hooves

all to then sell it for two so either way they're losing a ton of money on this my option would be why don't we try to market the horse privately or look into horse rescues that would be willing to take this horse on and help it recover that That's good. Doesn't that feel like a better option? Yes, that's good. That's good. That's a good in-between spot where it's like no more debt, no more saving money. We can all agree euthanasia is a worst, worst last ditch option. Right. Not the option we want to go with if we can get the horse on its feet without sinking too much money into it. Well, George, you actually love animals. I feel like you got a lot of hate from HorseGate, but you actually have quite a strong relationship

and don't want the horse to die. Absolutely. So yes, if you're gung-ho about trying to help this horse recover, I would set a limit and say, listen, let's get an estimate from the vet. And if we're willing to do that and we're willing to cash flow it, meaning we're not going to go further into debt for this, then I would look into the recovery. But if you're going to have to go into more debt, we're getting rid of the horse and giving it to someone who can financially take care of it. That's good. I feel like that's a win win. That's a win win on that. And then I would also recommend y'all go through FPU again,

Financial Peace University, because it sounds like y'all worked through some of the marriage issues. You know, you sold horses and all of that, but that that desire to still go into debt is still there with your wife. She hasn't had that. I've had a moment, the fact that she's, you know, kind of immediately going to, oh, well, let's just, you know, spend money on a credit card to help heal the horse. Like that's just that's not a strong foundation. So I would work through that, maybe even consider going through some financial coaching, because, yeah, there's been a lot that's happened in your marriage. That trust that was breached is the most pressing matter in this whole situation. That's hard to repair.

Well, and it's hard to see once again. You know, you've been through so much with the fact that she went into debt for the horses to begin with. And now she's immediately going, hey, here's an issue. Let's go into debt again. Like that's got to kind of spark something on the inside. Yeah. But, George's an issue. Let's go into debt again. That's got to kind of spark something on the inside. Yeah. But George- Horse problems. I think that everybody needs a little bit of an update on horse game. Oh my goodness. Do I have an update for you? So we just did a building wealth event in Indianapolis and Katie, who is the person that called in with the horse call, who I told to sell her horse and

I said worse things, was at the event. She drove five hours to be at the event, and we're cool. We've messaged on Instagram. I love getting updates from her. She was awesome, and our social team was there, and they made a little clip, and so if you're listening on radio, it'll be hard to follow. I'm going to recap it after we're done, but let's check out that update on Horsegate. George! Listen, I want Katie to win. Yeah, she's here. Katie's here? She's here. Did she bring the horse? You were like trying to meet her and now you have to face her in person.

I'm excited, we're friends now. We like, we hang out on Instagram. All right, we're ready for the photo, finally. Look at George. He even looks like me. He has my email here from high school. Tell me this dog doesn't even know my name yes george the dog doesn't even know your name it hurts as much as i thought it would hurt

i can't go do anything without somebody saying what would george say i hope the question community go horses i hope they don't hate you i don't hate you that's all what I'm telling you. No, no, no, we're friends. You've been a firework. Oh, thank you so much. Wow. What an interaction. She stuck around. She came to the meet and greet. I signed her book. She gave me a picture of a new horse she got named Goose, and she nicknamed it George.

And this comes up with her friend group, as it does with mine. A week has not gone by without mentioning this situation. And I signed her book and I said, the horse does know your name. And so we had a beautiful full circle moment. And I got an update from her on where she's at with her debt-free journey. So when she called in, she was about $120,000 in debt, making about 36,000 working for the USDA full-time and couldn't find a side hustle in her rural community. The horse was bringing in 300 bucks a month. It was injured. She lost that side hustle. And so since then, she has paid $12,393 and she has a goal to pay off the remaining 113K in the next two years because she got a new side hustle painting interior houses.

So she's already made like five grand doing house painting and she enjoys it. It makes great money. And so there was a happy ending to this story. That's great. And I think that's important to note because you got a lot of hate for that. Well, here's why I went wrong. And I immediately regretted this after it came out of my mouth when I said the horse doesn't know your name. Because I know horses have like deep connection, soul level connections with their owners. And it's a beautiful thing. And no, the people were like, would you sell your dog?

And I was like, no, my dog doesn't need a farm. Now my dog was thousands of dollars because they're luxury designer dogs. That's just what we like. But no, I would not sell my dog. I mean, would you be sad if somebody said they didn't know your name? My dog for sure doesn't know my name.

My dogs are not the brightest. Horses are way smarter. I feel like that's a healthy relationship with your animal. It is. But I do stand by the fact that, I mean, she emailed into the show and she was like, this is a prize winning horse. It's worth $20,000. I was like, oh no, Katie, you're only making my point to sell the horse. And as we see, it's not an ethical, moral thing. If you sell a horse, it's fine. You're not a bad person if you sell a horse. But me telling someone to sell the horse was apparently where the line is. That's probably the way you said it.

The way I said it. But here's why. I cared more about Katie's future than I did her present day horse. That was the truth. I wanted to see Katie win. And looking at the numbers on paper, it hurt my heart because I'm going, oh my gosh, there's no way out of this thing. It's going to take a decade or more to get out of debt, which is not okay. And she's young, she's vibrant, she has a whole life ahead

of her. And that is why I gave her that advice. She did not take it. She sold, she did sell one of her horses that was kind of retired and bought this one, this newer one. Oh. So horse people, let me tell you, they are intense, they are diehard, and they're willing to spare no expense for their beloved horses. Man, well, and it's nice to see a full circle moment and to see her acknowledge like, hey, you know, that was good advice. But I think that this sort of reaction is pretty common whenever you're trying to get out of debt. And there's a lot of things you might be willing to sell. There's a lot of things that you're willing to part with,

but there are certain things, especially with guys and trucks, that seems to be like the, woo! Yeah. And you heard her at the end, she said, you lit a fire under my butt. And whenever I'm making a decision, my friends go, what would George say? And so I like that I got into her head in that way. Just going, what could you do? Get creative. What are you willing to sacrifice so that the next 20 years of your life don't suffer in mediocrity, that you can actually get to where you want to go and not have anything hold you back. So that was the heart of it. Katie, you're awesome. If you're watching out there, we are cheering you on this debt-free journey. And I can't wait for your debt-free scream. Please bring the horse. Please bring

the horse. That'll be a first. day we'll love that we're gonna need a cleanup crew on that day oh gosh we'll be right back this is the ramsey show welcome back to the ramsey show we're taking your calls at 888-825-5225. Up next on the line, we have Ellis calling from Jacksonville, Florida. Hey, Ellis, welcome to the show. Hi, thank you guys so much for taking my call. Thanks for calling. How's it going? Pretty good.

So I have a question that I was wondering if you guys are able to help me. So I'm currently trying to figure out what exactly would be the best option for me, at least in my situation. My former job, I had a 401k that I was contributing to as well as with an employer match. And I'm no longer at that job. So since I'm no longer at that job, I was having a conversation with a coworker at my new job. And they were saying that since I no longer work there, I'm eligible to take that money out of that 401k. So I was wondering if that would be a good idea for me to do to help pay off my debt. Who told you this and why? And do you trust them financially? Because I wouldn't.

Not necessarily trust them, but they do have like a lot more years of experience on me. And they said you can just take money from this 401k and do what you want with it? Well, they said that it's possible I could take it out. I know that it would be taxed if I did take it out just because I'm no longer at that job. Yeah, not only are you going to have to pay your income taxes on that, there's also going to be an early withdrawal penalty of 10%. Right. So not only is that a very expensive way to get money, you're also robbing the future growth of that money in retirement. Okay.

So this is a terrible idea. Yeah, bottom line, wouldn't do that. So let's look at other ideas that are better. So you have some debt you're looking to pay off, correct? Yes. How much? Yes. How much? Roughly around $43,000. Okay. What kind of debt is it? $2,000 is about in a car loan. I have $1,000 and some change in a personal loan,

around $8,000 credit cards, and the rest are my student loans. Okay. And what's your income? I take home, I get paid weekly. So probably monthly I take home maybe like 1,400 is my take home. Okay. And what are you doing for work? I work for like an IT staffing company. IT staffing. Okay. And what is the current timeline for you to pay this debt down if you just used your income? If I just used my income, probably in 2025, like early 2025, late 2024. Really? Yes. What did you, you said your income is $1,400 a week? Or what's your annual income? Well, every two weeks, but annually I'm

projected to make, not including bonuses, probably around like $45. Okay, that's where the math isn't adding up for me as to how you'd pay this off in under two years. I'm not sure. That's just what the calculator said when I put in the numbers. I do have a side business as well. So I do get a little bit of income off of that. So sometimes like I sell things online and then I have my own, like I make candles. So I have a candle business on the side as well. Awesome. So if we ramped both of those things up, how much more could you add to your yearly income? You went really hard doing that. I would say probably if I worked really, really hard, especially with the candles, because there's a lot of money to be made there. I said I could

probably add at least maybe this year alone, maybe at least five to 10,000. Awesome. And are you investing with your new employer? Not that I'm aware of, no. Okay. So I would encourage you to pause all investing and just focus on this debt and make that your one priority. How much money do you have in the bank? I do have my $1,000 emergency fund. I do have maybe about $500 extra because I'm also planning on moving out of the states. Okay.

Moving out of the states? Yes. Where to? Well, out of Florida. Moving out of Florida. Oh, moving out of Florida. I was thinking moving to Maryland. Okay. Is that of the States? Yes. Where to? Well, out of the Florida. Moving out of Florida. Oh, moving out of Florida. I was thinking of moving to Maryland. Okay. And is that...

Is that for a job? Yes, for a job. I currently stay with family, so I can't really, like, stay here forever. And he has kids, so I kind of need to think of my next step. So you're going to have to find a new job? My job is in Maryland, so I was more than likely going to see if I could just transfer. Okay, awesome. And do you want to move to Maryland? I do want to move out of Florida, but like Maryland just seemed like a nice alternative. I would just make sure, like as you think through that move, cost of living in Maryland may be quite

a bit more than Florida, so I would just run some numbers on that because you may want to wait a year or two until this debt is tackled. Granted, if you do want to move, especially if it's a raise, then that could be good. But just also make sure to factor in those extra things because you said with family, you got to move out. But you know, perhaps you could find somewhere in Florida on your own for the time being. But I will say, it's hard, George, because I've been getting this question quite a bit recently with the 401k option. A lot of people are getting tempted to pull it out. And it is tempting because, you know, with your income, you see that debt and it's like, man, I could have this debt wiped out quick. It looks like a shortcut. It looks like a shortcut. But in the

long run, especially when you factor in all the growth you would lose, it does not pay off. I know it's not fun thinking through, you know, paying this off and it taking two years. But in the long run, this will ROI so much more. So, Ellis, here's the math on this. You have $43,000 in debt. And let's say you're going to pay this off in two years or less. That means you need to throw $1,800 total at the debt. And you can do this using the debt snowball method, which is smallest

to largest, regardless of interest rate, attack the smallest one with everything you can throw at it, pay minimum payments on the rest. And so if you do that, and you start bringing in more income by selling stuff online, flipping stuff, any money you can scrounge up from the side hustles or selling stuff you have laying around the house, obviously getting a raise, maybe even switching jobs, that is going to help you do this faster. And then you can laying around the house, obviously getting a raise, maybe even switching jobs. That is going to help you do this faster. And then you can get to the fully funded emergency fund of three to six months. That is your next goal once we have the debt paid off.

And you may want to sit down with a SmartVestor Pro because you do have the 401k and you've left jobs. They can do a rollover for you and figure out how to invest that in the meantime. Yeah, is this a traditional 401k or is it a Roth? It should be a traditional 401k. Okay. So what you want to do is a direct rollover to a traditional IRA. That way there are no penalties. You never see the money. It just goes straight into another retirement account. And then you have options to invest way more than you would have in your 401k. Okay. How does that sit with you?

That's as well. Like, I did want to know just because, like, I knew that if I took it out, there would be, like, a lot of penalties. They were nice enough to at least explain to me all the penalties that I would have to pay. So the guy was like, yeah, do you want to do it now? I was just like, let me call you back, and I'll let me talk to some professionals. So who's the guy? Like, he's able to do this for you? I'm confused.

Was it your employer? No, he was just a coworker. He was just a coworker that was just talking. Okay. All right. Well, hey, I'm going to gift you one year of Financial Peace University and every dollar to walk you through this process. The videos are going to be super motivating.

Watch all nine lessons. Start that every dollar budget. Connect it to your bank account. Start tracking the transactions. You're going to start to feel the steam and it's going to get addictive. You're going to go, okay, we put a thousand on the debt this month. How do we put 1200 the next month and 1500 the next month? That's fun. That's fun. All right. Well, stay on the line. Austin will get you set up. And I just love that she heard that from the coworker. It sounds tempting, right? It sounds

like, ooh, like I can have my debt wiped wiped out but then she had that gut check and went you know what i'm gonna talk to somebody else about this because i think right now that we're in such a culture where you know there's tiktok people everywhere there's everybody reading financial articles there's so many things where it's easy for a lot of people to feel feel like they know a thing or two about money and it's like the more i've listened and talked to some people it's like the advice almost seems right but But then you're like, wait a minute. Well, it always sounds good at face value because it feels like a shortcut. The problem with shortcuts is it doesn't lead anywhere worth going to because you end up further into debt or staying

in debt longer. And so we're seeing a lot of this right now, Christina, people turning to HELOCs, they're turning to home equity loans, they're turning to 401k loans, 401k early withdrawals. These are all terrible options because we're not actually fixing the behavior that got us here. All we're doing is trying to pull under the rug and go, and it's gone, but it's not because now we've created new problems for ourselves. Right. And it's stealing from the future. When you get in some of those savings calculators and you see what you're losing in compound growth, it's like, man, that's just, it's not worth it. But it is so easy when your problem is right in front of your face and you're like, I've got this debt and I want it gone. It's easy to want to take a shortcut. And it's like, we want you to keep that anger and that

feeling of like, I want this gone immediately, but do it the right way. If you feel like that's your only option, you don't have enough options. Keep looking. That's good. That's good. Well, that puts this hour of the Ramsey Show in the books. We'll be back soon. This is the Ramsey Show. Hey, George Camel here.

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