The Ramsey Show - App - Never Take Life Advice From a TikTok Video

Episode Date: October 30, 2024

Welcome to the Ramsey Show, where we help you win in your life. Winning with your money, winning in your work, and winning with your relationships. That's the goal, because if one of those areas isn't winning, it's affecting the others. 888-825-5225 is the phone number. 888-825-5225. It's your show, so that's your phone number to jump in. Joining me today is George Campbell. I'm Ken Coleman, and we're here to coach you up. George will take all those money and budgeting questions, and I'm here to help out on that income side of things. You want to make more money to get through the baby steps faster. Feeling stuck, a little lack of meaning, want to start that business.

Anything related to winning your work, I'm going to jump in on those as well. So let's get right to it. You ready to go, George? Let's do this. You got your corduroy jacket. It's your favorite. Your fall, you're all festive and ready to go. It's the time, even though it's 80 degrees here in Nashville for some reason.

Yeah, well, it's nice and cool in the morning, so I like that choice today. You look fantastic. Thank you. Alan is up in Washington, D.C. Alan, how can we help? Yes. I would just like to discuss something with you. I'm on about Baby Step 11.

I do a lot of financial finagling, particularly with cards. I'm unfamiliar with Baby Step 11, and I guess most of our audience is. What is Baby Step 11? I understand that Dave and you are not very big at all on credit cards, but I think it is possible to pay them off and to make it work. I average about 5% on everything that I spend. Good for you. I'll bet you're getting some great rewards as well.

But I want to go back to the start of the call. What is Baby Step 11? How do you define that? Well, I guess it's what I'm saying is I've been through all the baby steps. So you're debt-free. You don't have a mortgage. I'm accumulating money from our grandkids now. Great.

In the legacy phase. And, you know, I'm fortunate enough to have uh more than i need i was a big saver and uh you know so what's your how old are you and what's your net worth i'm uh my net worth said eight figures uh i'm uh 82 wow Good for you. That's incredible. Eight figures. You're talking 10 million plus. Yeah, a little over that. Woo! How'd you do it, Alan?

I mean, it's not credit card rewards. Let's be honest. Well, I was a physician, and that sounds like I made a lot of money, but the most I ever made was, for about five years, I got $135,000. And you saved the majority of that? You invested it? I got about $80,000. But how do you actually get $10 million? Is it 20 years of investing? 30 years of investing? Yeah, I've certainly saved a lot, probably 25%, and I've invested it mostly in the stock market. I did have a bunch of rentals when I was younger, but I don't want to fool with that right now. Amazing. Well, we can all agree the reason you are where you are is because you lived on less than you made

and invested a big chunk for a long period of time. Yes. Yes. Okay. And you can certainly do quite well. All right, so what's your question? One of the things I do now, as much as I've heard you say that it would bother you to have a credit card because you just don't feel good about it, actually, I feel very good about having credit cards because I game them. Great for you. Alan, how can we help you today? Is there a question

here? Or is this a statement? Do you think there's a role for trying to save extra money with rewards. And you can also buy gift cards and get a substantial discount. Okay. All right. So there we go, George. I think we've got our question now. No, I understand. He's saying, I've done really well. What's wrong with this system of me gaming the credit card rewards? I get my rewards. I'm doing well for myself. And I would say it's a fool's errand. You can do it. Clearly, you've spent a lot of time over who knows how long.

You're 82 years old. If you've been doing this since you were in your 20s, we're talking 60 years, which is about when credit cards were invented. I mean, in my book, Breaking Free from Broke, I actually go through the history. And it wasn't until the 50s and 60s that the credit card was popularized. So he's been doing it before it was cool. And the key is, as Dave would say, no one has built wealth because of credit card awards. Can you build wealth and use your credit card and pay it off perfectly every single month?

Sure. But here's the deal, Ken. The stats show we have $1.28 trillion in credit card debt. Do you know how much we have in debit card debt? Zero dollars. And so when you look at the stats and where we're at as a country, I can't in good faith go tell anyone, hey, go pick up a credit card and be like Alan.

You'll be all right. Because they're going to be the next caller who racks up a bunch of credit card debt trying to play a stupid game. Yeah, he's a unicorn. You're the unicorn, Alan. Yeah. And I aspire to be you one day at 82 with an eight-figure net worth, but we can all agree that it wasn't because of the few thousand in credit card rewards. It didn't hurt. You clearly

have been gaming this thing very wisely, been very frugal, very shrewd, and those character traits are what caused you to become very wealthy, not because of the credit card companies blessing you. So I just don't want to conflate the two. And again, it's not a moral posture. You can look into where the credit card awards come from. It's not pretty. I cover that in the book as well.

But you're not a bad person, Alan, and I'm cheering you on to wealth build and build a legacy. Yeah, well, stay there. Where do those rewards come from? Well, the Fed, this is, again, not my opinion, not a Ramsey research study. The Federal Reserve did a study and found that $15 billion a year moves from the minority areas, from the less educated, from those in poverty to those that are wealthier, that are more educated. And so there's a clear wealth transfer happening. And again, this is not a political statement that has nothing to do with that.

It's just saying this is where the rewards actually come from. Meaning, explain that. Because those that are less educated, those that have less income are proportionately funding your rewards. How so? Because they're the ones going into debt, paying the 25% APR. That's right. And then the credit card companies give you 2% as a thank you. Right. Well, the credit card companies are not charities. They're not nonprofits. They're making billions a year. That's right. And so it's not entirely funded by those paying interest. I'm not trying to make that argument. But when you look at the actual profits of these companies, I broke down Capital One's profits and showed you exactly how much is coming from those that paid interest and fees versus merchant transaction fees.

And it was scarily in favor of the interest and fees is where they're making their money. Of course. And so I just, again, there's one angle is not feeling good about it. He said, hey, it doesn't feel good. It's not a tummy ache issue. That's just one more nail in the coffin for me to go not touching the thing. Not worth it. I'm going to use my own money. That's what's going to cause me to build wealth would you support legislation it's never going to happen but hypothetically i like this would you support legislation that would make credit cards illegal oh you know uh i personally would again it won't happen because we we do live in a

very debt-based society and the reason the economy is the way it is't happen because we do live in a very debt-based society. And the reason the economy is the way it is, is largely because of the debt floating around all around us. But do I think we'd all be in a better place if they just made it illegal to borrow money? Yes. Because I think you could make the case that it's predatory. Their credit cards are predatory. Absolutely. Well, and the gamification, the psychology they use, the marketing they use, it's really sick when you look at the experiments they run every year on customers. Over 10,000.

An ex-Capital One manager told me that, Ken. They're simply rats in a maze, and you think you won because you got to the cheese. Yeah. But really, you're just a rat in someone else's experiment. Something to think about. I think it was a worthy discussion. Alan got it started for us today. Remember, Alan is the minority.

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.

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888-825-5225. Heading into the fall, oh boy, we're not heading into it. I feel like we're here. My goodness. You know what tomorrow is, George? Halloweenlloween yeah it's your first big one as a dad isn't it's true are you taking the little one out i hope so you don't know how that she can't even walk you can't even eat candy yeah so i don't know how far we'll get but we're gonna have a good time but you dress her up for all the pictures 100 yeah what's she gonna go i'm not in charge of that couldn't tell you oh i'm interesting that's great i should probably know you probably should i'm in trouble. We'd love for you to join Rachel Cruz and the EveryDollar team for a free live training

coming up Monday, November 4th at 1 Eastern, 12 Central. That's to help you get clarity with your money. You can register for free at RamseySolutions.com slash webinar. RamseySolutions.com slash webinar. The number one way to eliminate debt is to budget. The number one way to build wealth is to budget. The number one way to get on the same page with your spouse eliminate debt is to budget. The number one way to build wealth is to budget. The number one way to get on the same page with your spouse about money is to budget.

The number one way to eliminate stress in your financial life is to budget. I'm seeing a theme here. Thank you for paying attention. RamseySolutions.com slash webinar. Rachel Cruz will be doing a free live training Monday, November 4th, 1 Eastern, 12 Central Time. Christine now is on the line in Dallas, Texas. Christine, how can we help? Hi, Ken, George. Thanks for having me. You bet. Boy, you are a bundle of sunshine. How can we help? Thank you. So my husband and I have a net worth close to $5 million. All right. All right. all right. And for the past 13 years, we've kept a spreadsheet charting every penny we've spent in various

categories so we know how much we need to live on once we retire. You're like George's favorite, Pete. This is amazing. I want to be Christine when I grow up. We have $200,000 to $300,000 in our bank account at all times, and when it builds too high, we transfer the cash to Fidelity Mutual Funds. We know where we spend money, philanthropy, travel, and wine, and if anything happens, we know where to cut back. We actually eat out less than we used to before we reached $1 million net worth. We buy used cars. My question is,

do you recommend a monthly budget for your baby step millionaire? I know that's looking out the front window and we've been looking out the back window. Interesting. I like this concept because I think you guys should be buying nicer cars and I think you should be going to really nice dinners on a regular basis. It sounds like you've been too frugal and there's a scarcity mindset here. Do you feel like you're spending enough and giving enough and saving enough? I just recently let us get business class tickets on the flight. Whoa, Christine. Take it easy.

Now slow down, see. That was huge. Pump the brakes here. Wow, I feel like you're throwing money away now. No, no, no, but we fly premium economy back. We're joking. We're actually joking, Christine. We're saying you've earned it. Yeah, I, no, but we fly premium economy back. We're joking. We're actually joking, Christine. We're saying you've earned it. Yeah, I think business class is okay. So you're asking,

should I do a budget? Yes, absolutely. Maybe you can switch the spreadsheet lifestyle to the every dollar lifestyle, and I think you're going to find it far less meticulous and far more freeing. Yeah. I think you know at this point what you're going to spend. And guess what? If times get tough, we'll get back to our spreadsheet and make sure that we're accounting for every penny here. But every dollar is going to help you do that just the same, just without the spreadsheet.

And so I want to know what you're doing with a $300,000. Why do you need that at all times in a checking account? Because I'm me. Is it a fear thing of if the stock market tanks and we need money or what? Because you guys aren't of retirement age yet, it sounds like. Well, because my husband's a lawyer, so we pay quarterly taxes, and each quarterly this year has been $48,000, so I have to be ready to write a $48,000 check every

quarter. So yeah, that's kind of the big thing, but he would have more like $100,000 in the account. It's me. I'm the one who wants... How old are you two? 56. Okay, 56. Now, once you're at retirement age, where you guys are maybe is work optional, then I would understand having you know a year or two of expenses tucked away in a high yield saving savings account but to have 300 grand right now it feels like you can make better use of that money by either investing it using it toward a goal that you guys have i'm assuming you guys have no debt no mortgages where our house is worth 1.8 whoo and it's paid for. Of course, that's the first thing

we did. You guys are incredible. So I would tone it down and go, okay, we know we need 50 grand once a quarter, but we don't need 300 grand all at once all year long. So let's tone it down to a six-month emergency fund and one high-yield savings. Let's have another high-yield savings that's accounting for the estimated quarterly taxes. Maybe it's a sinking fund where you put in however much you need. If it's, you know, every quarter you need 50 grand, then we're talking about 15 grand a month going into that sinking fund to the high yield savings. Yeah, because the draws are like 10,000 or even nothing one month and then 78,000 the next month. You've got big expenses, and that's where that sinking fund will come in handy. But it feels like you're leaning a little too far on the fear side right now of what if and what if.

The truth is you're going to have the money. We know the money is going to be there. You guys have the money in these accounts. Do you have money outside of retirement other than the $300,000, like a non-retirement investment account? Yeah, we have 1.8 in the 401k, 1.8 in the house, 820 invested in Fidelity Mutual. That's just non-retirement, the 820. Yeah.

Okay, so think about it. Worst case, you could liquidate some of that non-retirement money, and you'd probably have long-term capital gains of, you know, likely 15%, or I don't know. Your income sounds incredibly high. What is your household income? $550. $550 average. Amazing. Yeah, you guys are crushing it, and, you know, we get callers that are living more lavish lifestyles with far less with debt, and so you guys are doing great. I would encourage you to maybe increase the giving and spending arm because your savings arm, you've got the muscle there. You're right. You're right. So the every dollar budget will help you force you to do that. You can put a fun money line item for Christine and it sounds like you guys like to travel. You like wine. Let's increase

the experiences, upgrade the cars, do it all with cash. I don't think you guys are the type to go crazy. Well, I mean, just listening to her, I don't think you guys are the type to go crazy. Well, I mean, just listening to her, I can't even imagine times getting tough for them because no matter what would happen to them, she would be so prepared. There's a lot you can do here when you got a $1.8 million house, 1.8 in the 401k, 820 in the brokerage account.

I'm breathing easy. Oh yeah, but you get the feeling she's not. You have a feeling that at any time it could all come crashing down and we've got to be ready. I can't live in that apocalyptic mindset too long. Yeah, no. I'd go nuts, but way to go, Christine. And there's something, too, when a person has been tracking spending on a spreadsheet for that long. I mean, there's a deep emotion driving that.

And we didn't have time, nor was it really relevant, but to tie this into the rest of the audience going, I see myself in her, there is something in her past. There just is. The way that her parents treated money, talked about money, something happened. It created the scarcity oh yeah yeah because i i scarcity is one thing i mean it's almost like she has a a deep-seated fear that

things could go really bad really quickly and i've got to be ready i mean when you're talking about somebody who says at all times we have three hundred thousand dollars in our checking account we dip i mean i believe her. I think if she gets to 275, she goes, oh boy. And I think she feels a lump in her throat to get 25 grand more in there. I really believe that. And there's something there. And I think it's important for all of us to understand how we view money comes from something in our past. And if we're going to get out of debt and live like no one else, we also have to deal with some of those old patterns too. Because here she is.

She's winning on paper. Yeah. But she doesn't feel like she's winning. She's winning. Everyone listening is rolling their eyes going, oh my gosh, this is a real problem. I get it. But it's a real problem for Christine.

It is. Because there's emotion behind that. Right. She doesn't see the sheer numbers. I mean, most Americans, if we went on the street, did man on the street, and you went,

oh, that'd be fun. How would you feel if you had $300,000 at all times in your checking account? People would just start laughing hysterically. Yeah. I mean, that's lottery winner. I'm retiring today.

That's the kind of stuff you'd hear. Right. And she's going, I don't know if it's enough. Right. A lot of scenarios I got to account for. Yeah. But Rachel talks about this in her book, Know Yourself, Know Your Money, The Money Classroom. So it's a great book

for Christine. I'm going to send it to you, Christine. It might help you get to the root of this. Know Yourself, Know Your Money by our friend, Rachel Cruz. Hang on the line. Christian will pick up. We'll get that to you. Thanks for the call. All right, quick break. He's George Campbell. I'm Ken Coleman. You're listening to The Ramsey Show. There's a time in your life and in the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on. Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way,

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is alongside. I'm Ken Coleman. We're here for you. Today's Ramsey Show question of the day is sponsored by Y Refi. It's hard to make progress when you're trapped under an avalanche of defaulted private student loan debt. But Y Refi helps you dig out and get momentum with custom refinancing based on your ability to pay in a lump sum payoff option. You could qualify for after 24 months. Go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey may not be available

in all states. Today's question comes from Veronica in Texas. My husband and I were married a few months ago. Before the wedding, he told me he was a successful businessman and had a net worth of just under a million. He had stories about properties he owned, farm leases, and businesses he has invested in. We lived together before marriage, and he rarely helped with household bills, using the excuse that my income can handle the regular expenses, and he would cover the big stuff when it came up. Naturally. Uh-oh.

Now that we're legally married, he admitted his stories were lies. He doesn't have any assets and has over $150,000 in debt that he is behind on. I am freaking out. I made plans for my business based on his promises to contribute more into our shared expenses. I have some debt from our wedding and the slow months in my business. I'm not sure how I can keep supporting the whole household while he pays his debt off. Where do I go from here? I would go straight to counseling.

I don't know anywhere else to go. When your relationship was built on the throne of lies. I would go straight to the judge and I would get the marriage annulled. I think this is, it's a farce. This is a fraud. She has been defrauded. This is not a marriage problem where we want to work out some differences. This is straight up fraud. I hope, you know, I really don't care what the audience thinks,

if they think I'm wrong there. I really don't. As I think this is such a fraudulent deal. This is, she's been completely duped to the point of catfishing. The question is, was it intentionally him conning her? Yes. It sounds like that's the case. Based on what I'm reading. The thread and pattern of lies. I'm going the nuclear option.

The studio audience seems to be half with me on this one. I think this is not a counseling thing. This is a fraud. And this is, nope, we're done. And I go to the judge and I tell the judge and we get this thing annulled and then she moves on with her life. Now, give him the chance to get remarried if he fixes his life. But this was entered into on such deception. on with her life now give him the chance to get remarried if he fixes his life but this is this was entered into on such deception i just don't know how you go well we should go see a therapist

i'm not knocking your hand no i i just that was me being kind here to say i think i'm being outrageous i i don't know there's hope for this marriage i'll say that i don't think it's a marriage i don't think you can rebuild from that level of you know dishonesty and false pretenses so veronica if i mean james doesn't make these up these are real emails that we get people think ken that we make these up for great content this is just the state of america guys i don't know what to tell you dark stuff yeah i i wouldn't yeah this is done. Done immediately. The fact that she had no idea is also worrisome. There was no signs.

This guy was like, what is he doing all day? Well, I don't want to pile on. She's been lied to, but I think there were some signs. I knew where this was going. I didn't know where the email was going. But as soon as the old, he said he was worth this, but he didn't help out when we were living together because he was like, well, it's enough to live off yours. I'll handle the big stuff. I mean, the detector was going.

The farm leasing is a very specific lie. I don't know that I could even, that was not on my bingo card. Right. That he had a farm lease. This is a fraud. This is a complete charlatan fraud. This guy might need to go to jail. Maybe, but he's definitely going to the courthouse.

100%. Yikes. Mark is up in Greensboro, North Carolina. Mark, how can we help? Hey, guys. Thank you so much for what you do. I have a mostly career with a little bit of a spiritual twist to it. I am a pastor, and I also drive a truck.

I've been pastoring for almost three years. And when I came on, I was, I came on in a full-time position and unfortunately the church has not done well. The church has gone downhill and I had to go back to work driving a truck, which is what I did before I started pastoring, and bottom line is, neither one of them are really working out all that great, and I just don't know what to do, because the church is just continuing to struggle, and I'm at a point where I feel like I have to make a decision for my family, because working, and I'm blessed. I only have to work four days a week so far as driving a truck, but even doing four days a week

and trying to take care of the things at the church, I feel like I'm never at home and it's putting a lot of stress on my marriage and on my home. And so I'm in a place where I feel like I have to step down from the church, but then I feel like I'm losing all my purpose because I believe that I was called to be a pastor, and so I'm just really struggling with how to move forward. Yeah. Well, I'm sorry you're going through this. This is definitely tough. I'm glad you acknowledged the calling piece.

So a calling to ministry is clear. So you've got to honor that, or you really will feel miserable, and then that's a really destructive type situation. But you got your realities. How big was the church, and how were they doing when you came on board a few years ago? When I came on board, we probably had about 30 to 35 people. And I know that sounds really small, but the church is completely debt-free. And so with those 30, 35 people, we were able to sustain. We were able to pay my full-time salary. Which was what?

And at that point, it was $45,000. Okay. And what is the reason for the struggling, and what is struggling look like right now? Well, the reason for the initial, I call it the exodus. We had a bunch of people leave at once, and just to be completely honest, they chose religion over the Bible. So they didn't like your preaching. Tradition. Tradition. Right, So they didn't like your preaching? Tradition. Tradition.

Right, but they didn't... It wasn't that they didn't like my preaching. They didn't like some of my views that I began to be honest about and share what I thought was just a typical biblical view. I get it. No, that's what I'm saying. It didn't match up with their traditional view, so therefore they thought it was undepical. Right.

Exactly. They didn't like your preaching. That's not about style. They didn't like what you had to say. And you just don't, you know, when you've got 35 people and you lose a percentage, pick a percentage, you feel it. Right. So you've got to acknowledge that. You took a job that was not a good job to take.

I'm a pastor's son. My dad pastored small churches my whole life, and those are precarious situations because when you have such a small flock of people whose tithes and offerings pay your bills, when they leave, you're toast. And you didn't have a large group to pull from anyway. So I'm not knocking your decision as much as I'm just being honest with you. You took on a lot of risk when you decided to become a pastor of such a small church. That's the reality. So now we've got to survive. And the thing is going downhill. So you have two options. Your options are, one, you go all in on the church and you start trying to get people to come to that church, but that's a lot on you. And that's not the best way to grow churches.

However, you go out there and you act like a church plant. You get some support, maybe from some organizations that will take care of you for a year, and you try to build the thing back up, try to build it from scratch with people that want to hear your type of preaching. That's one option. The other option is you walk away from this knowing that you're not walking away from ministry. You're walking away from this particular situation. And you stay in the truck until you can make a transition,

or you go get another job that pays you $40,000 to $45,000 until you can make another transition and you join another church staff, a larger church staff, get some maturity in ministry, learn some more. I mean, those are your two options. You've got to take care of you and your family, and that's not you walking away from the call. That's you being a good steward, which the Bible is also clear about. But you've got to reset. I think those are your two options. So I appreciate the call.

That's tough stuff, George, right there. That's tough. I mean, if I'm him, I might go, can I be an associate pastor at another church that is thriving that can get me in a position to do this calling? That's right. He's got a lot of options within ministry, parachurch ministries, if he wants to do that. But that's like going to a new job.

Or he stays in the truck for a while, walks away now, but he's got to shore up his income. Or else now your ability to minister is affected. Can't give up both right now. So thanks for the call. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves

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help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to the Ramsey show. I'm Ken Coleman and George Campbell is alongside 888-825-5225 is the phone number. Let's go to Chris in Paducah, Kentucky.

Chris, how can we help? Hello. Hello, Chris. You're live on, Kentucky. Chris, how can we help? Hello, Chris. You're live on the Ramsey Show. How can we help? Hey, guys. Thanks for taking my call. You bet. I was wondering, my wife and I are building what she calls our toe-tag home. Your what home?

Toe-tag. Toe-tag? Okay. I'll be honest. I've never heard heard that before i didn't know if that was a kentucky thing right i didn't know what he was saying i don't know where she got it from but yeah she calls it's a little bit morbid but i like it's creative she yeah she's kind of that way yeah okay but anyway we're looking to spend or i I'm wondering, is $450,000 to build this house, is that appropriate in relation to our $1.2 million net worth? So your current net worth is $1.2 million?

Correct. Do you own a home now? Yes, that we're selling, yes. Okay, and what's that home worth, or what's your equity? I'm going to say about $350,000. We'll get out of it, I think. Okay. And you want to build a $450,000?

Correct. And what's the concern? Is it too much? No. She's fully retired. She's fully retired. I'm semi-retired, so... How old are you guys? I'mired. How old are you guys?

I'm sorry? How old are you two? She is 68 and I am 58. Oh, the older woman, huh? Nice. Oh, yeah. Okay. So your question is, as it relates to your net worth, there's no problems there. Really, the only parameter you're looking at when it comes to buying this home is can we handle the mortgage? Can it be 25% of our take-home pay on a 15-year fixed-rate mortgage? Is that going to be the case? No, I was looking to spend, just use all cash.

Oh, all cash. Yeah, he's getting no mortgage. Yeah, yeah, yeah. Okay, so there's no problems here. Yeah. And I'll tell you the stats on this, Chris. We did our millionaire study, over 10,000 of them. And just as a general ballpark, we found that the millionaires, their homes made up about a third of their net worth. And so you're right on track. Okay. And even if it was, hey, it's going to be 50% of our net worth, but our net worth is $5 million. Well, who cares? It's about can I retire with dignity?

Will I have the income from my assets and my investments to replace it in order to cover my expenses in retirement? And as long as you guys are on track with your retirement goals, get as much house as you'd like. Okay. Yeah, it's a yes. It's a yes for us, Chris. We love when it's all green lights on this show.

Yeah. Oh boy, that is fun. Usually we're trying to talk someone off the ledge and we're trying to tell Chris, go for it. Yeah, he wants to pay cash. That's amazing. We're not going to yell at him for that. And I would also say, if you're heading into retirement, your goal should be to not have a mortgage.

Yeah. That's going to really reduce how much you need to cover your expenses. Yeah. That's interesting. Good place to be. Joel is up next in Knoxville, Tennessee. Joel, how can we help? Yeah.

I am trying to figure out, you know, me and my wife have been listening to your show for a long time. We love it. Thank you. We've been here a long time, and we'd like to be doers, not just hearers only. Ooh. Uh-oh, dropping some scripture on us there. Did you see that? Doers of the word.

There we go. Oh, boy. But that being said, you know, we are on babyysit 2 and trying to figure out how much we should be budgeting to put towards our debt snowball every month. Well, the answer is simple, as much as possible. All right. Okay. Yeah. If we're talking grocery shopping, utilities, your housing, transportation, fuel, maybe insurance or any sinking funds for maintenance, repairs. So beyond that, how much can you throw at the debt every month? So that's a good question. So I guess let me give you a little more detail.

Even though we're on Babysit 2, we kind of just jumped into it. It's just I was able to pull $1,000 out to get past it. It was going pretty fast. So I did budget, get an $1 app, and I put everything in there. And from what it looks like initially, about $600 a month. However, I think there's more. I think there's stuff that we can shave off that we are spending right now monthly. I think so, too.

Inscriptions and things like that. What's your total debt? About $70,000, a little less than that, pretty close to it. And what's your household income? About $110,000, $105,000, somewhere around there. Okay. And we found that the average person that's following this Ramsey Baby Steps with gazelle intensity, so they're not fooling around, they're going scorched earth, only every dollar budget,

they pay off their debt between 18 and 24 months. So that's your good kind of ballpark to go, okay, based on what we're currently doing, if it's going to take three years, we've got a problem. We need to up our income, we need to cut our spending. But if you're telling me, you know, right now it's going to take 600 bucks a month at 70 grand, that sounds like it's going to take a decade. Yeah. So something's not adding up here. Okay. So making 110 a year, why is there only 600 a month left? That's a fantastic question. And that's what the budget will tell you that this is not a trick question. The budget will reflect, oh, we're spending $800 on eating out. We're spending $400 on Amazon.

And now we can go, all right, we need to cut this. We're both agreeing, you know, spit shake. We're not going to spend this money. Now, okay, so let me get to it. I think I can clear up that a little bit. So that goes back to what I mentioned. You know, I think there's more that we can shave off. So, you know, previous to this, we had certain allotments like, you know,

spending money, and so it was $200 apiece for me and my wife, so that's another $400 a month. We have way too many subscriptions, and I have them all listed out. I have to add them up to see the actual total. So I say that to say I have 600 that is currently not budgeted as far as based on what we spent last month. That's where these numbers are coming from. So I have work to do to cancel some of these things and stop paying for things we've been paying. Yes. And there's more you can do. Number one, are you guys doing any investing right now?

I think she's paying into her 401k. We're going to pause that. You're going to get a few hundred bucks back easily right there. Are you getting a refund every year on your taxes? No, it's basically a draw. Okay. Have you reshopped your insurance in the past year across the board? No. So you can go do that, ramsaysolutions.com slash coverage. We can help you save some money there and probably

get you better coverage than you have. A lot of people just don't realize they're overpaying. So there's a lot of things you can do on top of cutting subscriptions. We're not eating out. Cut the fun money down to the bare minimum. What do we need to just have a semblance of joy to get through the next month? It's probably not 200 bucks a month a piece. We can probably make this work with far less. So all of that combined on top of making more, which Ken can get into, is going to help you get out of debt way faster. And my goal for you guys would be two years or less. Sure. Yeah. So what can you do outside of your full-time jobs to make more? Overtime? Side hustles? Yeah, so I have been.

Actually, I've worked overtime the past six weeks, and the number I gave you was not counting overtime. So I have been getting overtime. I can't always get overtime, but when I can't, I fix computers. I buy and resell stuff that's broken. Yeah, you know what I would be doing? I'd be telling everybody that'll listen in your social groups, online, in social media, that you can do this, this, and this from a technology standpoint. You might be surprised how many small businesses might pick you up because they don't have a true tech person.

I mean, here's what you're doing when you start thinking through that. One of the things that I find works for me or worked for me when we were in this situation years ago was, okay, let me reverse engineer this thing and go, if I wanted to pay off all my debt in two years or one year, you just start playing with these numbers, what would I have to do? What would I have to make or put towards the debt? And so if you go, okay, that's $3,000 a month to get it paid off in two years, just making this up. That's real close. Now, is it close? It. Yeah. So it's like, okay, that to me is a much easier goal than 70,000 psychologically. Yes. I go, all right. If I, what do I got to do to put three grand a month towards debt? That to me, it gives me the intensity that I need and the intentionality

that I need, but it feels doable, George. Now, again, that's just in my weird brain. It puts it into facts and reality instead of, well, I don't know how long it's going to take or how. Yeah. I love that mentality. You know what happens, by the way? Then you start going, oh, if I put $4,000 one month away, that means I get there faster.

And oh, one month, we actually got five we put towards it. That's the kind of mentality that Stacey and I have. Most people, it's faster than they think once they get going that's exactly because they're willing to do whatever it takes uh what can we give joel to encourage them on the journey i'm going to give you breaking free from broke and along with that it's my book you'll get three months of every dollar premium to help you lay all this out read the margin is breathing room chapter it's got tons of ideas to help you spend less and make more specifically. He's coming across as George Claus, but he's George Camel.

And I'm Ken Coleman, and this is The Ramsey Show. Welcome to The Ramsey Show, where we help you win in your life. We want you to win in your money, win in your work, and win in your relationships. 888-825-5225 is the phone number.

If you'd like to jump in, I'm Ken Coleman. George Campbell is alongside. 888-825-5225. Let's go out to the West Coast. Nicole is there in the Los Angeles area. Nicole, how can we help today? Hi. So thanks for taking my call.

I'm basically a 26-year-old. I'm having relationship complications due to financial issues. I racked up, I have about 130 total in debt, about a hundred thousand of that student loans, a thousand of that credit card, about 21 of that is auto loan. And I just, I cannot get on my feet. I lived in Alaska for a bit and then I came down here with family and like, I just cannot service my payments. Like it is tech to tech. I live with family, so I don't have rent right now. Um, but I mean, I'm just struggling and it's putting strains on my life and I'm going to try not to get emotional about it, but, um, I really,

I really just need some help. Yeah. Well, listen, we got you. We're here for you, and it's going to be okay. And we've helped a lot of people in your situation. We really have. So, A, it's good for you to feel this, but you're going to be okay, and we're going to help. So, tell us about where you're at, Nicole. Are you working right now? Yeah, I'm working full-time. I have an interesting field in marine biology, so my field's kind of competitive for what it is. I am working full-time. My salary right now is about $44 a year. Is that normal for your area? That's about a good starting point for my area. You know, a lot of positions these days are calling for entry level. They want like your master's or PhD, which is like super unrealistic,

but that's the job market that everybody's in right now. So yeah, right now it's a great job for where I'm at right now, honestly. Okay. Well, I'll tell you this. Looking, just seeing these numbers, it feels like a lot of car for someone making $44,000. That's about half your income tied up in this car. Yeah, yeah. How much is the car worth? So they gave it to me at, well, not gave it to me. That'd be nice.

I got the car for, I it was 23 000 it's a 2018 super forester um they gave me a stupid interest rate because i had i was in a terrible relationship before and i of course just said here use whatever you need it for and destroyed my credit completely i got myself out of the things I had in collections. So recovering my credit has been like a huge part of this journey as well. What's your car payment? $488 a month. What's the car worth? Could you sell it today and get something out of it? I think I could get $18 for it is what I found locally.

Is that private party value? Yeah. Okay. How much do you have in savings, if anything? I have nothing. And are you behind on any of these payments? Absolutely. Almost every single one of them is about to hit a 30-day mark. So they're about to all go to collections? Student loans, the credit card, the car loan, everything?

Yeah. When I moved down here, I had about seven months of being jobless, and because I left Alaska due to my lease ending and I couldn't find more housing, I chose to be down here with family. I tried to find a job in my field. I couldn't collect unemployment because I technically chose to leave my job. At least I tried to find a job in my field. I couldn't collect

unemployment because I technically chose to leave my job. At least that's the way the government sees it. So I couldn't get any financial assistance from anything. I found a really great job, worked it for two months, and then they decided that they were going to downsize the company. So last hired, first fired. Have you looked into an income-driven repayment program for your student loans to get that payment lower? Yeah. So for my student loans, they just knocked me down to a payment of $386 a month for that. And then I've been keeping up with everything federally. So half my student loans are federal and then the other half is private.

The private is the one that I was able to negotiate. And for my federal, they currently have a $0 repayment plan just because of my financial situation. Okay. And you're living with family. Are they able to help at all? No. Okay. Here's the deal. Do you need a car to get to work right now? Are you a place where there's public transportation or you could get a ride? Yeah, I absolutely need the car. My work is actually about an hour and a half from home and there's not metro or bus transportation where it's at. There is that in L.A., but not where I work.

Okay. The glaring thing that you can do to get out of this hole is get rid of this car, but you're going to need the amount you're upside down on. That's $3,000. Now, it sounds like your credit's shot. So the chances of you going to your local credit union and getting a loan for, let's say, $8,000 and use $3,000 to get rid of the car, use $5,000 to get a beater car, I don't know that that's going to work out. But that's what I would attempt to do. If I was in your shoes. Because that'll get you out of the car payment, give you back $500 a month

to then help you climb out of these other ones. You can knock out the credit card debt real quick, that's $1,000, then all you have left are the student loans, right? Right. Yeah, this is really doable, Nicolele but i gotta tell you you know what the big thing is here you got to go get more income that is the am i right george i don't know where she can cut she's living with family well the math problem here is you you took a hundred thousand dollars in student loans to go make 40 and so it's just a mountain to climb yeah yeah it is and you know really, my parents were always the ones

who were like, you have to go to college to get a degree. And I did. And unfortunately, literally my four years was during COVID. So and I am not an online learner. And I mean, I tried and they were just like, well, take out another loan. You have to get through school, take out another loan. Oh, my gosh. Let me tell you, Nicole, it's not all your fault, but it is your responsibility. And I know it feels like, gosh, all life has happened to me that's led me here. But the part that you can take accountability for, the part that you can control, that's what's going to get you out of this. That's right. But, Nicole, I just want you to see something really quick.

Do you see if you added some more income and you got rid of that car payment that you would have some room to breathe? Yeah. Yeah. Okay. That's the first step. We got to get room to breathe because you're just feeling so much pressure and we get it. Okay. So room to breathe. That means more income right now for two, three, five, six, eight months. Super intense. Let's get the car situation gone. Get the payment out of your life. And George is right. The thousand dollar credit card, that's nothing either. You knock both of those out, that's going to bring real money. Now, it's a long haul for you on the hundred grand in the student loan debt, but it's very doable if that's the only thing you got

and you got more income, correct? Yeah. Okay then. So you came on this call overwhelmed and boy, oh boy, do we understand that George, but, but Nicole, this is doable, but you are going to have to make more money. I'm not saying walk away from your marine biology job, but at this stage of your life, uh, driving an hour and a half, I would change some things in my life in the short term. And, and it may be the job to make more money, multiple jobs, get this thing right size so you can breathe. George? Yeah, I mean, if you can go make $20 an hour once you get home from your job and do that for 20 hours, I mean, that would add another, what, 50% of your income back in there. $20 an hour full time, that's $40,000 a year, and that's what you're making right now with your core income. So Ken's right. We got to get the income up. There's only

so much more we can do to cut the expenses. But eventually, I'd love for you to move out and get closer to work if that's where you want to go. But right now, we got to clean up this little mess and get rid of the car. That's right. That's A1. Yeah. We're going to help you out. I'm going to send you every dollar premium to help you make a plan for your money along with my book, Breaking Free from Broke, to give you the path. We believe in you, Nicole. You got this. This is The Ramsey Show. Hey, you guys. I'm not a fan of the big banks, and you probably already know which ones I mean, but I do like credit unions because they're non-profit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously.

In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years, and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join, and Fairwinds partners with more than 5,000 credit union locations around the country so you can bank in person wherever you live. But if you prefer the online experience, you can log on to Fairwinds and do anything you could do at a physical location. So go to fairwinds.org slash Ramsey to learn more.

And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's Fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome back to the Ramsey Show. I'm Ken Coleman. George Campbell is alongside. 888-825-5225 is the number.

Anson is joining us in Wichita, Kansas. Anson, how can we help? Hey, my name is. How's it going? Good. How are you? Well, not too bad. So recently my grandfather passed away, and he worked for Boeing and NASA for about 35 years.

He was also in the United States Army. And when he passed away, when his will was read out, he left me and my two older brothers a very hefty sum of $3 million in his will, along with equal shares of his estate in Miami. Wow. $3 million each? $3 million each, yes. Wow. And I have absolutely no idea what to do with that kind of money. I think the biggest paycheck I've ever seen was like $2,500 for two weeks.

How long ago did you get it? I have no clue what to do with it i i got it uh back in july and i don't get to touch it until i'm 21 that was part of the agreement was when i turned 21 then i get full access to the fund how old are you now i have i'm 20 i turned 21 may okay wow and i want to know what to do with it i have no idea what to do i i want to know what to do with it. I have no idea what to do. I want to know, should I sit on it for, you know, 20 years and let it, you know, accumulate interest in a bank somewhere? You know, take some of it out and, you know, buy a house, you know, not something super huge or invest it. You know, put it in a rough IRA.

I mean, you know, what should be the next step for somebody who's 20 years old and just became a multimillionaire? Well, number one, I would, like you're doing, take great pause and care with this and go, okay, I want to make sure that I manage this wisely. This was a big legacy, a big responsibility put on my shoulders, and I want to be able to do the same thing for my grandkids one day versus squandering it. And your grandfather obviously did a great job to manage the investments wisely, allow it to grow. He's in real estate, he's in mutual funds, and I would encourage you to do the same over a long period of time. So I would make sure this sets you up

well for success. That might mean buying a reasonable house in cash and investing the rest. What do you want to do? Let's just assume for a moment that the inheritance isn't there. What were you on track to doing or at least thinking about doing with your life? So right now I'm a full-time diesel mechanic. I manage a diesel shop um close to where i live and about a year and a half ago i bought um a used early 2000s camper trailer that i towed behind my pickup and i was working in the oil field and then i switched over being diesel

mechanic just to be able to stay closer to one spot and i've been living in the trailer my rent's 500 bucks a month i own the trailer outright outright. Um, I have no vehicle payments. I bought a $2,500 beater pickup and I traded that for my current truck that I have now. Um, and so I have no, I have no other payments other than, you know, my internet and my phone bill and my rent. And I think I'm my total monthly expenses is maybe under two thousand dollars and i was on track to saving up to go to um welding trade school but since uh since uh about a month ago i've been more steering down the road to just getting uh going to college for my uh degree in diesel mechanics and getting actually a piece of paper that says yeah i know how to do this

and that was kind of the path i was going down. I have a personal savings before I got the inheritance of about $25,000, $26,000 that I've been putting into for about the last five years. I tell you this right now, Anson, I'm not worried about you squandering this money, not after the caricature you just kind of painted for us. That's fantastic. Let me ask you this. On the diesel mechanic thing, did you want to eventually open up your own shop and own your own business? Yeah, eventually. That would be kind of the long-term goal. I'd like to get some experience under somebody else's wing. I've been doing it. Love that. I mean, I got my first job at 14, and I was on a ranch working combines and trucks and stuff like that.

So it's something that I really like to do. I like working with my hands. Yeah, so let me ask you this. The goal is to, yeah, have a shop. You've got plenty of money if you want to go to college, but I just got to believe that there's a shorter way for you to get that certification that, hey, I know how to do this. Am I right? I'm assuming there's a trade school for diesel mechanics.

It's not a college. Yeah, and there is. But along with, and the only reason I were away from an actual trade school is along with, you know, getting a degree in, you know, I could take a major in, say, diesel mechanics or whatever, but I could also take a minor in business. Great. Go for it. So I can kind of knock out two birds with one stone. Go for it. So there's somewhere money right there. So based on the school that you want to go to and you get into and whatever that costs, there's a chunk

of change right there, George. So we now know kind of where he wants to go. I was trying to dig that out from you. I mean, education is a great next goal. And like Ken said, what's the best way to do that? And the most cost effective way. We don't need to go blow the money just because we have it. And then beyond that, you're going to have future goals. You don't need to go out and buy real estate just because you're 21 with a bunch of money. But when the time is right and you want to buy a home for yourself or maybe for you and someone you meet and you get married, that's a great next goal. And to do that with cash. And even if you spend $500,000, let's say, between the education and the home and you

get your life set up, that still leaves you with $2,000, let's say, between education and the home and you get your life set up, that still leaves you with $2.5 million, right? Right. Yeah, exactly. And so if you connect with a smart investor pro, ramsaysolutions.com, you need a trusted team to walk with you. One person is going to be that investment pro. Another one would be a trusted real estate agent. Another one would be a tax pro. And you can get connected with all three of those at ramsaysolutions.com and click on Trusted Services. But I crunched the numbers for you, Anson, to show you what this could turn into. From 21 to 61, you put $2.5 million in an account. Let's say it's growth stock mutual funds, whether it's retirement or not. At a 10% rate of return, which has been the average we've seen in the stock market, that would be $134 million

at 61 years old. Wow. Does that not blow your mind? Wow. Wow, I didn't even think about that. That's crazy. I feel like that's putting a smile on grandpa's face. And it's not because you're storing treasures on earth.

It's great for the right reason. Think about the impact you could have in your lifetime, on your family, your community, the country with 134 million. You would become what's known as a philanthropist with that kind of money. And so I want you, the part that's going to be difficult is starting to change your mindset while also keeping the same life you have. Like Ken mentioned, we're not going to go retire tomorrow. I want you to sink your teeth into something that really puts some pep in your step. And that might mean the job that pays you 80 grand. That's great. And let this money cook and let it do its thing. And when the time is right, and as you mature and get older, you're going to have different goals for generosity

and for spending. Well, and I would say too, if you talk with a smart investor pro, put some away for retirement, but put some away for being a benefactor.actor for instance let's say because you came into all this money that uh you invest some money in about 15 20 years from now it's a pretty large number and all of a sudden you start some type of a school for uh maybe underprivileged kids to who are good with their hands and like where their hands to go straight from high school right into the workforce and you have a local local training program that is attached to your business and i'm not trying to hang that on you i'm just saying like that that gets money you say that it's it's funny that you say that actually because the place that i work for actually does

that we take about five special needs kids a week um from one of the local school districts and we bring them in and we let them wrench on stuff and you said that because that was actually part of my you know if i ever did have a mechanic shop that was actually part of my, you know, if I ever did have a mechanic shop, I'd want to have a separate, you know, place to connect with one of the school districts, get some kids out here, you know, that are wanting to be mechanics or that just want to come around on a car for an afternoon. And that was kind of, you know, in the back of my mind.

And kind of go back on the whole spouse thing too. I've been dating the same woman for going on four years now since we were 16. And we met in high school. And I told her that I inherited some money, but I didn't tell her how much. And I'm holding out on that only for the sheer reason because, you know, I want to kind of have it and be sure that I have it, you know, before. I think that's wise. Yeah.

That'll skew the relationship when you go, oh, and by the way, I just inherited $3 million. So I think it's wise to wait even until you're married to go, hey, I told you I inherited some money. I wanted to do this the right way. Here's what this is. Here's what my plan is to do with this i'm managing this you know on behalf of someone else really yeah love that all right quick break we'll be right back he's george camel i'm ken coleman and this is the ramsey show welcome back to the ramsey show i'm Ken Coleman, and George Camel is alongside 888-825-5225. Well, George, we've been talking about this for a while,

and I feel like it's going to be here before we know it. I told you last time I hope you get your sunscreen. 70 SPF, I hope. I think I'm going to see if there's an 80 out there. If there's an 80, you're buying it. Got to protect this temple. I will tell you. Live like no one else.

Cruise. It's a thing. We're setting sail on the open seas, George. March 22 through 29, 2025. This is a premium Caribbean cruise. Turks and Caicos, Puerto Rico, St. Thomas, and the Bahamas all on the docket. Holland America's new Staten Dam ship is just absolutely beautiful. The food is great.

We've got all kinds of great content coming your way from the Ramsey personalities. Dave Ramsey, we've got special guest Stephen Curtis Chapman, comedian Trey Kennedy, world-class chef Manish Chauhan, and country music legend Deanna Carter. And don't forget, we've got the spa, fitness center, and pickleball courts where I will be daily hanging out, teaching people how to play if you want to be taught, and if you want to compete, I'll be there to compete as well.

And I wouldn't dare. I wouldn't darken the door of that court when Ken's on it. In fact, you will be out there because I recently, we played, we had a personality outing, and you got out there, and you improved. I improved, but you still crushed me like a bug. Did you enjoy the experience other than being crushed? Yes, I will admit it. All right.

It was fun. Coach Ken made it fun. RamseySolutions.com slash cruise, RamseySolutions.com slash cruise, or click the link in the description in the show notes if you're listening on YouTube, excuse me, watching on YouTube and listening via your favorite podcast. We have some folks in the lobby today watching. Are any of you going on the cruise? Any cruisers?

No. Any cruisers? Okay, no, no. Oh, alright, we got one. What, lady's thinking about it? She's going to talk to her husband? She's on the fence. She's trying to convince him. He doesn't look to be very enthused about it at all. At all. I don't think he's interested. She booked it as a surprise, probably. He just found out. There we go. Oh, that's awkward. Oh, boy. Well, we'll talk to them during

the commercial break and provide some counseling as well. 888-825-5225 is the phone number. Alexa is joining us now in Cleveland, Ohio. Alexa, how can we help? Hi. I am getting married in March, and I have some money saved up. I've been investing. I'm debt-free now. But my fiancé, he has some student loan debt, and I was just wondering if I should use the money that I've saved up to buy a house for us, or if I should just keep saving and then put it towards the debt after we get married. Do you want the fun answer or do you want the correct answer? Probably the correct answer is what I need to hear. The correct answer would be, let's keep saving knowing that we have this upcoming expense.

If you knew you had to cover a broken HVAC six months from now, we're probably not going to go blow it on a vacation. We're probably going to go, all right, let's save up knowing we got to cover this HVAC. It's on its way out. I would look at this debt the same way. You know you're getting married to this person. And here's the hard part. You have to grieve the dream that you were going to buy a house on this timeline. That, man, this time in 2024, I'm going to buy the house.

And now it's all right, let's clean up the mess that he made. And the house will be delayed by another six months or whatever it is. And do the math, because most likely with dual income, I assume he'll be working full time. You'll be working full time. Yes. Combining your incomes and then having no debt because you are able to help pay this off once you're married is going to then expedite the process to get the down payment in the emergency fund. Okay.

Have you done the math on that? I mean, yeah, we've done the math on how long it should take us to pay it off. How much debt does he have? And if we start it from ground zero. He has $130,000. That's nothing to shake a fist at. And what will his income be? His income's about $112,000. Okay. And what's your income? Mine's about $70,000. And how much do you have saved? I have about $45,000 right now. Okay. And that would be including your emergency fund? Yes.

How much do you think you'll have saved by March of 2025? Well, with wedding expenses, I'm hoping about $50,000. Okay. And is he going to work on paying these loans off before the wedding? He is working on it right now. He's putting extra money towards it. Good. Okay. So my guess is, you know, you guys are a young couple. I always advise renting for a year anyways. There's just a lot going on. The wedding alone is so stressful on top of home ownership and all the details and work that goes into that. I would just rent for a year, work on paying off the debt, save up a down payment,

and you'll be there in no time. All right. Well, thank you. Yeah, absolutely. Thank you for calling. No fun. The fun answer was going to be just go buy a house. Live your dreams. He can kick rocks. You'll deal with that later. That's not how marriage works. No, no.

But George, you're not here. I'm not here to give the fun answer. Unfortunately, be very different show. That would be. Yeah. Buy the Lamborghini. Life is short. Yeah.

Come on. The 401k. Who cares? Who needs to retire?. Life is short. Yeah, come on. Train the 401K. Who cares? Let's go. Who needs to retire? Leave it to chance. You only live once. Gosh, what a bizarro world that would be.

Yeah, but shockingly, probably popular. That's true. People want to hear what they want to hear. That's right. We have to be the bearers of bad news much of the time. Kristen is now joining us in San Antonio, Texas. Kristen, how can we help? Yes, sir. I have owned my own residential cleaning business probably for the past

six or seven years. And it's just myself as a sole proprietor. And I absolutely love it. It's my passion and I do very well. And I've just come across y'all's, you know, system of things and I have every dollar app, really serious about budgeting. But I am kind of a little scared. I'm about 43 years old and I do not have a 401k savings. And I'm not sure how I can do that as far as, I mean, if I expand my business or do I invest it? Just wanted to run it by and see what y'all think. Give us a little bit of the numbers there. So what are you paying yourself? And then how much leftover do you have if I'm assuming that you are paying yourself out of your business account? So what kind of savings do you have in the business and what are you paying yourself? So basically what I'm doing is I am taking out for my expenses and taxes, as well as my tithing, of course. And so after those expenses, I'm about $3,000 a month right now. Okay, so do you have anything stacked into your savings account for your business?

No, sir. What are you doing with the extra $3,000, or what have you been doing with it? It's just been going to bills, honestly. We have some debt. Oh, okay. I didn't realize you had some debt. Okay, maybe we should start there. And you said we. Is there a spouse involved? Yes, sir. Are they working full-time? Yes.

Okay, so what is the household income? When you file your tax return, what's that number? I would say a total of about $105,000. Okay. And how much of that was yours from your work? About $40,000. Okay. And do you guys have any debt?

Yes. What kind and how much? So we have some consumer debt that we have a debt soon and a house of about 250. Okay, so we'll leave the house for later, but if you're following these baby steps, your next step would not be to start investing, which I want you to do at 43, trust me, but we've got to clean up this mess so that we have the margin to then invest, so we're not trying to do 17 things at once. So making $105,000, if you really got on that every dollar budget and you went, all right, we're going to batten down the hatches, no fun spending, we're not going to eat out, how quickly could you pay off that, what is it, $44,000 in debt? I'm not 100% sure. I think our expenses are close to about $5,000 a month.

And you're bringing home how much? I'm bringing home about $3,000. And he brings home about, let's say, $5,000, probably $8,000. So there's probably a few grand left over that we need to start chunking at this debt. Because think about it, $2,000 a month, month, that's 24 grand a year. This thing's done in less than two years. And by 45, we're now investing 15% of our household income into retirement. And you can look into a solo 401k or a SEP IRA, and a SmartVestor Pro can help you with that. Jump on to ramseysolutions.com, click on Trusted Services when the time is right,

because you do have a lot of options to invest as a solopreneur. He is George Campbell, and I'm just thrilled to be next to him. I'm Ken. This is The Ramsey Show. I've been doing this show for over 30 years, and some of the saddest calls I've taken are from situations that are completely preventable. Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills in the middle of next week, in the middle of all that grief, like it's just it is it's terrible. So

life insurance is the one thing, especially as a mom with three little kids that I'm going to eat next week. Yeah, in the middle of all that grief. Like, it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza

to get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. Welcome back to the Ramsey show. I'm Ken Coleman. George Campbell is alongside. 888-825-5225 is the phone number. Today's Ramsey Network app question is from Sydney. My husband and I have been debt-free since 2019, and we work hard to be able to enjoy life and save for our future. However, my brother-in-law, his wife, and four children were evicted recently for the second time in three years. Ouch.

Their parents refused to let them stay in their home. Warning sign number two. Staying in our home is not an option either. I told my husband I was willing to pay for them a one-week stay in a hotel, but no more. He now wants us to go in half with their third brother to purchase a home so the evicted brother can move in and pay us rent. They are not respectful of property, have no steady income, and I could see this being a disaster. How do I convince my husband this is an unwise move?

By laying down some ground rules and be as firm as possible. Yeah, I assume you get a vote. You've got to have a vote in this marriage, and that vote is a hard no. Yeah, I feel like I'd go back and go, Dear husband, do you remember that point last week when I said I'd be willing to pay for a one-week stay at a hotel, no more, no less? Do you recall that conversation? To which point he goes, yes, and I'd start there.

This is insane. She's got her head completely on her shoulders the right way she knows exactly what's going on she needs to walk them through exactly what's going to happen the worst case scenario they're going to destroy the property not pay rent never pay rent and then stay there until one of the brothers gets sick of this and goes we have to evict them this is insanity that we're enabling the misbehavior yeah and now you've got yourselves into debt and now you've created potential more attention mortgage by the way the two brothers have to pay yeah so this is creating she's nailed it this is a disaster he's got to

wash his hands of this and i think there's other ways to help i want to see them help help them get on their feet to where they can sustain themselves instead of propping their life up. So I guess our advice is she has to tell him all of the realities and how they're going to play out. Not just a worst case scenario, because there's a strong chance that the worst case scenario is going to happen. There needs to be some boundaries put in place here. I mean, the parents of this kid, this adult who's acting like a kid, won't even take it. Mom and dad said, you're not coming near our house.

That tells you a lot. Yikes. And she knows this. They're not respectful of property. There's no steady income. She sees this being a disaster. I don't know how he doesn't see that at this point.

I don't either. He's choosing not to see it, is the truth. Oh, my goodness. Well, thank you for all of you that are in the app. The app is, the Ramsey Network app is, boy, it's just really, really taken off.

People are all over it. So I want to point out, if you're listening to the show right now on YouTube or podcast, this is your last segment. Those of you on radio will continue on. So you've got to head over to the Ramsey Network app to finish after this segment, because we've got more calls coming your way. So you can go get the app by clicking in the link to the show notes, however you're taking in the show.

And it's easy, easy, easy, and you can download it right now. So go do that. All right, back to the phones. Bijan in Grand Rapids, Michigan. How can we help? Yeah. Hey, how are you doing today? Doing well.

Okay. Yeah. Hey, how are you doing today? Doing well. Okay, so right now, the main problem, not a problem, but I have a house right now. It's worth about $400,000 to about $440,000. I want to say around that range, $400,000 to to 440,000. And I took out a home equity line of credit on the house for $50,000. Now I was, I watched this one video about if you put the 50,000 back in on the house, it will drop the, um, it will make it so that you pay more on the principal and less on the interest, which is somewhat true. I put about $40,000 back into the house, which paying like, it's basically only $100 difference that I save myself that goes towards principal versus the interest for the whole $50,000. Now, the $50,000 costs about $250 a month in interest. I have to pay about $250 a month on interest on the 50,000. And it only saved me a hundred dollars,

a hundred dollars more goes towards principal versus the interest. So in all, it's almost like I'm losing $150 for like no reason. So I'm kind of curious as to what y'all think about that, because I am thinking about kind of like, I don't see myself really paying back that $50,000 anytime soon. So I'm thinking about trying to sell the house. Bijan, here's how I'll tell you how I think about this.

Go back and watch this clip and just listen to yourself. You're going to go, what have i done this is madness i did all these backflips in order to try to pay down the house early when i could have just paid down the house early so what you're describing is called velocity banking and i know you saw like a guy on instagram being like here's what they don't want you to know here's how to pay off your house early take out a heloc and it's going to apply more to the print, right? You saw this one guy and you went, all right, I guess I'll take out a HELOC. Easy enough. And here we are spinning in circles, chasing our tail. What you could have done and what you should do

is just pay extra to the principal every single month. That's the simplest way and the least risky way to do this. What you've done now is added risk because that HELOC, if you don't pay it, they can take your house. Your house is collateral. And so your goal should be to knock out this HELOC and then just put extra toward the principal to do this the right way. And yes, on paper, does Velocity Banking, if you play it perfectly, can you technically save a little? Sure. But the juice ain't worth the squeeze, as they say.

We've got people working for you today. Oh, we've got someone else piping in here. We've got some commentators on. This is great. Is that your wife? No, no, dentist's office. Oh, there we go. Bijan's at the dentist. I'll tell you what, Bijan. He's a multitasker. I respect that we go he's at the dentist he's a multi-tasker i respect that this guy's in the chair he's about ready to go under the gas and he's getting in a quick call

for some advice getting a lot done today bijan i'm impressed but yes velocity banking it remains incredibly stupid especially when heloc rates are as high as they are. I mean, this could be nearly double your mortgage rate, and they're generally variable with the HELOC. So for a thousand reasons, I'm out on this whole velocity banking scheme where you take out debt to pay off other debt a little bit faster. Just, hey, if you want to pay off your mortgage, just apply extra to the principal. That's it. That's how I did it. It's how millions of others have done it. It remains to be the simplest way. And yet, Ken, as humans, we try to find the most complex way because it sounds smarter. Yes.

It feels like the more hoops we jump through, we're doing more. When in all honesty, we're just wasting time. You're burning calories. Chasing your tail. But you're not getting any further. But I got to respect the hustle from Bijan of the dentist. I like Bijan a lot. I got to tell you, I'm trying so hard not to get the church giggle.

I thought we were about 20 seconds from the dentist's hand being in his mouth while he's talking to you. I thought, well. Do you hear that? I thought it was his wife. He wants to pipe in and have some commentary. He goes, no, it's the dentist. And then we hear Bijan right before I put him on hold.

He does the cryptic, go ahead. I was waiting to hear the drill start. He's like, oh, I thought we were headed towards that before we knew it. You know? Guy's getting his fillings checked out. And you got to appreciate the hustle. That warmed my heart. And here's just another life lesson here.

Never take out a HELOC because you saw a 60-second video on TikTok. Just general life advice. Not a wise move. And Bijan, I hope you pay off this mortgage aggressively. I love the spirit behind it. But never think that using debt to pay off other debt faster is going to be a wise strategy. The only way to get rid of debt is to get rid of debt. And while we're on the life advice, glad he called us in the dentist chair before they gave him the laughing gas or whatever it is.

That would have been a much more interesting call. It really would have. Oh, that's the first time ever, James. First time ever that I recall taking a call on the Ramsey Show with someone who was at the dentist's office. That right there, that made my day. I'm not going to lie about that. I think that that's where we are today. I needed that this hour.

And if you want to catch the rest of the Ramsey Show, it's happening over on the Ramsey Network app. So go to your app store or go to the show notes. You can download the Ramsey Network app for free. There could be more dentist calls in hour three. Because we don't know. We could have somebody calling us from the zoo. We don't know.

You just don't know. It's a live show. This is The Ramsey Show. Welcome to The Ramsey Show, where we help you win with your money, win in your work, and win with your relationships. 888-825-5225 is the phone number. I'm Ken Coleman. George Campbell is joining me this hour.

Let's get right to it. Jen starts us off in Indianapolis. Jen, how can we help? Hi, I am calling about term life insurance. I currently do not have term life insurance, and so I'm just calling to see if it's really necessary for me at this point. Okay. What makes you think that you don't need it? Okay, I'm 51 years old. I have no debt. My house is paid for.

Everything's paid for. No debt. I have a son who is 16. I'm divorced from his dad. His dad makes substantially more money than I do, so I feel like if something happened to me that he would still be financially taken care of. So I don't know what kind of... I don't know what my son would use it for

if something happens to me. What happens if something happens to dad? I'm okay without dad's money. I don't know if dad has, I don't know if my ex-husband has life insurance or not. I have no idea. I would make sure he does. And I would get some in place for you as well. It shouldn't be that expensive. Are you healthy at 51? I am. I would at least look into it and get a quote from Zander.com and see what it would cost to get 10 to 12 times your annual income. What do you make a year? About $95,000. Okay. So you're likely looking at a million dollar policy. A lot of these you can do now with no medical exam, completely online, very streamlined, very easy. And so I would look into

it as a, just from a kind of managing risk, because as much as I want to hope that everything works out and that we don't want to think about if something did happen, but there is a piece of this where you go, I'm the caretaker of a 16 year old. And for the next few years, at least until, you know, they become an adult and get out on their own i want to make sure that if something happened they're taken care of because there's a part of you are you covering some of the expenses here yeah i mean he lives primarily with me okay yes he's primarily with me i mean he sees his dad yes and is there child support there is okay and is that for the foreseeable future when does that go until um i mean at least through high school i There is. um no okay do you have any other insurance i have i think i have something i work in education i

have something through the school system um but that would go away what you know unless i continue to pay those premiums once i retired but that would be a few years out yeah i would look into it it's uh super affordable the peace of mind is it. And there's still a level of risk when you go, all right, someone else does rely on my income for expenses. And I know that right now it doesn't feel that way, but there's a chance that, you know, dad's income could change. His circumstances could change. And I want to be prepared for anything. And that's what term life is for. It's for the things you never want to think about, the scenarios you never thought would happen. And then life happens and people call in and they go, I don't have term life. There's no insurance. What do I do? So would you still recommend getting it for the next 15 years?

Yeah, I would get a shorter term because of your age. You're going to be self-insured by the time you're in retirement. That's the hope, right? You already have a paid-for house. You've been investing diligently. And so 15 years from now, if you get a shorter term, it's going to be less expensive. And you'll know it. Hey, I'll be 66. I'll have this much in the nest egg. Yeah, he's a grown adult. We're going to be okay. At that point, there's no need to pay it. Some people get this whole life because they go, I want it for my whole life. Well, you don't need to replace the income of a 35-year-old grown man, you know? Right.

And so I think a 15-year term would be right for you. I would go online, and I think you'll be pleasantly surprised by what you find over at Zander.com. Okay. That's a great question, Jen. Thank you very much. Yeah, thanks for the call. Good mom.

I like that call. You just don't need to do it. Just easy. You just never know. And it's so affordable. And if you don't have term life and someone does rely on your income, get term life today. 10 to 12 times your annual income and 15, 20, maybe even a 25-year term will be plenty. Xander.com, our friends,

George and I both use them. I've been with them a very, very long time. They're the best in the business. Easy, easy, easy. They'll take great care of you. I'm always happy to pay that premium. When it comes through, I pay mine annually to get a little discount, Ken. And I go, this is the way I say I love you to my family. I got three teens and my wife. And listen, I feel like if anything happens, well, I know they're going to be fine and not have to worry about anything. And we made that decision a long time ago. And remember that the purpose of insurance is to transfer risk. That's right. That we couldn't carry.

And so when it comes to that, this is our income we're talking about. Yeah. I mean, I got so much on me, I got to kind of sleep with one eye open. Be careful. You know what I'm saying, George? Got to be careful. Stacey. She's a good woman.

She's out there. She's a good woman. Sue is up in Chicago. Sue, how can we help? Hi. Thanks for taking my call. I have a question about my 401K. I'll be retiring in the next three to five years.

We only have a mortgage. I was just wondering if we can take part of my 401K and apply it to the balance of the mortgage once I retire. What's left on the mortgage? $140,000. And what's the household income? $130,000. What's in 401k? What's projected to be in there when you retire? I'm hoping $600,000. $600,000? Yes. And is it just you or is there a bigger nest egg here? It's two of us, yes. And my husband's on disability,

actually. He can't work. So the combined nest egg for the whole family at retirement will be 600? Yes. And how will you fund your life and cover expenses in retirement? What's the game plan? Social security, basically. Have you calculated how much that's going to be? Because most of the time, we call it social insecurity because it's not nearly enough. It was not designed to replace your income. It was designed to replace 40%. Yeah, I will be receiving around $5,000 a month when I retire. And how much do you make now per month?

Per month, about $5,000. I bring home $5,000 a month. Okay. Here's the deal. I know that five years from now, life is going to be more expensive. And as you get older, you might have extra costs, health care, you know, what may be it. So as far as paying off the house with the 401k, it's not a big nest egg. And so it worries me to decimate it, you know, to take 140 out of 600. That's a pretty big chunk. If you're going to need the 401k to live in retirement. So I would see what I can do to knock down that mortgage while I'm still working for the next five years. Right. Okay. So is there a world where you guys can say, hey, we're going to throw $25,000 a year at this mortgage and get it knocked out by

the time I retire, which then reduces our expenses in retirement? Because what's your mortgage payment every month? Well, actually, it's $1,800, but I do pay an extra $500 a month. Okay. So now let's look at what would it take for us to throw a thousand or an extra, a whole mortgage payment extra month? What if we threw 3,600 at it? How much faster would it get paid off? My goal for you personally, Sue, would be to have that mortgage paid off by the time you enter retirement. And that way we're not touching the nest egg. It would double about every seven years based on the average historical return. So you don't touch it. Well, seven years from retirement age, you now have 1.2 million in that nest egg. I like that plan a whole lot better.

One man's opinion, Ken. No, it's two. It's two. Oh, hey. You did the heavy lifting. I'm jumping on there and taking a little bit of credit. Nerding out my numbers here. Yeah, well done, sir. All right, quick break. George and I'll be back before you know it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Camel is alongside. George, you were just talking to a caller about this very issue of when we're looking to shave expenses. One of the things we always have recommended is look at your insurance coverage. And you said it many times, we help people save money and even get better coverage. That's the goal. The way we help you do that is by the Ramsey Trusted Insurance Pros.

They shop the market, compare insurance quotes so you don't have to. They'll bundle the deals, no extra cost. They're just going to take care of you so that you're getting the right coverage at the right price. You can do all of this if you go to ramseysolutions.com slash coverage, ramseysolutions.com slash coverage. So there you go. It's always fun, by the way, when you do this, and Stacey does this almost every year. It's always fun when I get a text from her, she goes, we saved X amount of dollars. It's just, you know.

She's doing the legwork for you, and you look like a hero. Well, she's not. She's going to a Ramsey Trusted Pro. They're doing the legwork. She reports back to me. She sends one email a year and goes, hey, can you reshop? Make sure we're getting the best coverage. She does it.

And they go, yeah, we can actually save you 80 bucks a year by switching over to this. And you go, great. And I'm none the wiser. No clue. You're just happy as a clam. Just happy that we got some savings. There you go. If that doesn't describe the Coleman marriage, I don't know what does.

Well, you know, I take care of other things. Ken happily goes along with it. Stacey's really in charge. Yeah, as if that's any different in the Camel household. It's not. It just makes me happy that I'm not alone. Yeah. Now, on your budget, what's your budget meeting like with Whitney? I'm more nerdy than her so i'm more likely to pull out the spreadsheet and show her

the numbers is she checking out because she knows you're so conscientious about it i would call it neuroticism but yes i think you are just is a nicer word yeah no well you are i mean so it's got to be easy for whitney a budget meeting for her she might as well have a romance novel in her lap reading it she's got the popcorn out and we're talking through it, but largely she knows I've over thinked it. Oh, and there's no question about it. Yeah. You could squeeze something from a rock. What's the phrase? I knew where you're going with that. I ran out of time. It's not juice. I got on the end of the diving board with no dive. Blood from a rock. Is that it? Thank you, James. It feels like it got dark for no reason, but thank you to producer James. Well, that's what happens when you get off

script. The script says, go to the next call, Ken, and so I shall. Lewis is joining us in Birmingham, Alabama. Lewis, how can we help today? Hey, boys. Just calling to get some advice on what to do next in my career. Well, you've come to the right place, because we know a thing or two about that. What's going on? Well, me and my wife are in a very unique position because the gig economy is such a big deal.

And for the past 10 years or so, I've had a side hustle. E-commerce, I sell things online. And over the past five years, I've really been able to make my sales better. And I'm at the point now where I'm thinking about stepping away from my current job and just seeing if I could pursue my side hustle as a full-time gig. And really, it's kind of seeing if you guys have some wisdom going into that, things to think about. Sure.

And that's really it. All right, let's run through some numbers real quick. So what are you making in your day job? Okay, so currently I'm making about $3,800 a month with insurance. Okay, and what do you do for a living? What is that day job? I'm a high school teacher. I teach mainly 10th and 11th grade. Okay, good for you. I've been doing that for 10 years. 10 years, and at this point in my state, I can actually be vested for retirement that I've already built,

so that's kind of like a good time to maybe break away and see. That's kind of why we've been kicking the ball around with that. I like that. What will that give you per month if you take that option? I won't be able to get that until I'm 63. That's what I thought. So it would be there in the future, but at least I had those years, you know. Good for you.

That's great. You locked it in. That's great. All right, so what is the side hustle that you're considering going full-time, and then what are you making? Don't tell me what you're paying yourself yet. What is it, and what are you making per year? Okay, so for the past few years, I've been able to double my profit every year.

So last year I was able to make, with all of my ventures, $120,000 of sales. And what is it? What are you selling? I'm selling mainly vintage clothing, but also collectibles, other things that I find out in the community for cheap and sell them for, you know, people that need them. Yeah. So there's really not a lot of overhead and it's just you. Yeah. It's like you got to say, it's a debt free business. So I go out with some money, buy it, try to flip it. How much time is this taking you per week? I'd usually go about two hours a day as of right now. If it's just like sitting down and doing that,

it's probably another hour of like sourcing per day. And what about shipping and all of that? All in, how many hours are you spending? Yeah, that would be the first two hours. So like listing, shipping, all that would take me about two hours a day. So three hours a day is what you're putting in. How much money do you have in the bank account of the side hustle? Right now I got about, well, I think about $6,000.

I typically have like a slush fund of two grand, and I pay myself about four grand a month. Okay. So you have been paying yourself this entire, so when I heard 120,000 of gross profit, you have very little overhead and very little expenses because you just cash and flip. So then you're paying yourself four grand a month. Yes. And then my wife, she makes about $2,000 a month. She teaches Pilates, and she's been growing that business. If I go full-time, then she'd have more availability to probably pick up gigs there. Total income. Go ahead. I'm sorry. We have about three minutes. I wanted to be able to get to you

here with some advice. George, I have the same rule of thumb. I don't care who it is that calls with this question. And what I'd like to see, Lewis, is for you to have at minimum six months. My favorite is a year's worth of your salary. So I'm taking that number of $3,800, which is what you're bringing home in your teacher's salary. That's after taxes, correct? $3,800 a month. Yep, that's what I bring home. I'm going to round that up to $4,000, and that's $48,000. I would want $48,000 in a savings account

of your side hustle. We call that retained earnings when we talk about businesses. It's a good old-fashioned savings account for the business. I'd like to see $48,000 in that, George, before he walks. Because that way, Lewis, what we've got is we know we have at least a year's worth of your current day job, take-home salary. It's in the bank, and it just gives us some breathing room, and hopefully we don't have to touch it. Hopefully we keep this rhythm, and you're continuing to pay yourself four grand a month and you grow this business. Eventually you invest where you need to invest, depending on where this thing goes. You may turn this into something else, who knows? But my rule of thumb is six months at the minimum, okay, which would be six times four would be $24,000. I'd like to see between $24,000 and $48,000 in savings of the company's bank account

before you were to walk from the teaching job. That would be my rule of thumb, George. I like it. And are you paying taxes out of this, Lewis? Oh, yeah. I have a CPA. So part of that slush fund just goes to paying my CPA per month. I have other infrastructure.

So I make more than that per month. I have other infrastructure. So I make more than that per month. And I usually keep about, I said, like $2,000 just to be able to buy and then the rest of it to pay myself. Sure. It just seemed like if you're making $120,000, there should be some money left over, even beyond the $4,000, even beyond the $2,000. Because you're telling me you're bringing in about $10,000. That's before any expenses, taxes, paying yourself, and all that. So I wonder where the rest of the money is going. Have you been having fun and just spending some of this? Well, no.

A lot of it is I buy more than I can list. So there's some wasted inventory you're sitting on. Yeah. Well, it's more like dead stock. So going full-time would allow me to spend more time to list the stuff that I currently buy because I can only give so many hours per day. But in the summertime, see, I get a full, because I'm off in the summer, I get a full dose of what it could be like every summer.

You'll stack the cash. And that would be, George, you agree with that? Absolutely. And make sure you can cover your expenses. Yeah, I don't think that's too conservative when we're talking about leaving something stable to go work for ourselves. And losing benefits. You've got to pay for insurance out of pocket and marketplace. And you can contact our friends at Health Trust Financial.

They can help with that piece of it to get you marketplace insurance. But, I mean, you're so close. He's on the cusp. He's making enough to replace his income. We've just got to get the savings in place. Yeah, let's just put it in there so that we have no stress. We don't want the dream to turn into a nightmare. And it can very quickly if you do too much too soon.

All right, quick break. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. Thrilled to have you with us as we help you win with your money, win in your work, and win with your relationships. I'm Ken Coleman. George Campbell is with me. 888-825-5225.

Let's go to San Antonio, Texas. Andy is there. Andy, how can we help? Hi, guys. Hi, Ken. Hi, George. So, yeah, basically just, you know, wanted to ask, am I basically helping my ex-wife too much with our daughter of four years old? So she started a new job and I own

my own business in air conditioning. And so she had a schedule Tuesday through Saturday from 10 a.m. to 7 p.m. And it's now changed from Tuesday through Saturday from 6 a.m. to 2 p.m. So I was helping her pick up my daughter, which is kind of her responsibility right during the week, uh, picking up my daughter before the daycare closes at six, I would pick her up. And then, um, you know, she would come back for like at seven 30 or so, and she would get off work and, you know, she would take her to school the next day. And basically now that her schedule has flipped, um, she's kind of asking me to take over, uh, the night schedule and, you know, take my daughter to school in the mornings. And, you know, she'd pick her up from, from, uh, school after she gets off at 2 PM. And so, yeah, um, technically, you know, I'm just wondering if I'm, you know,

helping too much, helping, you know, more than I should, and now she's asking, you know, for more help. So I'm just, you know, wondering where I should draw the line or if I should draw the line at all. What are you thinking? Before we weigh in, you called us. What were you thinking? Before we weigh in, you called us. What were you leaning towards? Well, you know, I like, you know, helping my daughter, helping her with my daughter.

I like, you know, taking care of my daughter and, you know, feeding her and, you know, spending time with her. I see her more now this year than I did last school year. She's four years old, but she was in pre-K through last year. She's in pre-K four now this year. So to be honest with you, I just, you know, I don't know. I just feel like it's a little too much. Okay, what makes it feel like too much? Well, because, you know, it's going to be now that I have to, you know, be dropping off my daughter. And, you know, the thing, I guess, because I pay child support, you know, it's going to be now that I have to, you know, be dropping off my daughter.

And, you know, the thing, I guess, because I pay child support, you know, mainly the reason why. And, you know, there's a certain amount of time that was set on the child support as far as, like, you know, the time that I have my daughter as a non-custodial parent. Right. But here's what I'm trying to get to. I think I know the answer. You think that she's taking advantage of you. That's obvious. Well, I guess in a way. I know she probably may not be trying to.

Let me come at it a different way. Let me come at it a different way. Is this new schedule that she's asking you to do, is it in any way harming your ability to do your job yes I mean in a way and not not entirely not not I mean well okay but that to me is the only that to me that to me is question number one issue one is is it putting you in a tough position to actually make money, do what you have to do to be able to provide for the daughter?

That's number one. Number two, is it affecting your personal life in a negative way? And I mean not like something silly and immature. Is it in some way messing with what is a healthy rhythm in your life? Okay, if the answer is it's affecting you in those two ways in a negative way, okay, then I think that it's a problem. But if it's not, and you're actually getting a chance to spend more time with your daughter, I'm only answering this the way that I would handle it it and I want George to weigh in but George if if the answer is it's really not encroaching she's not taking advantage of him

and I don't think that's what he's saying then I'm going to take this opportunity to spend more time with my with my baby girl uh that's a no-brainer for me I get extra time with her uh that would be my position. Yeah, so Andy, no, I'm with that. I think, Andy, what you're wanting is to maybe revisit the custodial agreement to say, hey, here's what we said was going to happen. The circumstances have changed. I think we need to revisit this and adjust it

to whatever you think needs to be adjusted. If it's the amount of child support, if it's the time and custodial arrangement, I think you need to tweak that, otherwise you're going to become resentful. Is that fair? Yes, yes, that's fair. And I imagine they're going to go, okay, this makes sense.

Her work schedule has changed drastically, and that changes the schedule and agreement that was set forth, and we need to tweak that. Do you think your ex-wife would be agreeable to that? Yes, yes. And I mean, to be honest with you, it's just right now that it's only her training schedule as well. So this could shift. So I would leave this alone.

I'm not hearing anything that says— It's not a long-term problem either because she's going to be out of— Yeah. Unless I'm missing something, Andy and George, I'm not disagreeing with you as much as I don't think I'm hearing that to where he needs to talk about rearranging the parental agreement that creates lawyer potentials, money, attention, man. I got to tell you, uh, I am so, so grateful that, uh, I did not experience divorce. And, but if I, I. And I put myself in your shoes while you were talking. My heart would be jumping up and down doing somersaults to get extra time with

my four-year-old girl. That's the truth. And, yes, I do love that. And I guess I'm just, you know, kind of trying to prepare, get you guys input. You know, I respect you guys a lot. And as far as, you know, maybe in the future, kind of to get like, you know, some insight now if something else would happen down the line and, you know, just to kind of be more prepared for something else. Well, you're being very smart. We believe in boundaries. Okay. This just doesn't sound

like that to me. It sounds like this is temporary. It doesn't sound like she's manipulating you. If I'm hearing you. Yes. And if six months or a year from now or two years from now, you feel this pattern and you feel resentful like she is taking advantage of you, then you can take the next step. But right now, nothing is screaming because like you said to Ken, it's not really affecting your income or your life.

You're getting more time with your daughter, which is more than was agreed to, but you're happy about it, and you're still able to provide and have a great life. Yeah, absolutely. Thank you for the call, young man. I think you've got- It's a struggle. It's tough. My heart breaks for you. Man, that time with your daughter. George, you know, you got a little girl now. I cannot imagine. I got a 14-month-old. You would spend as much extra time as you could with her.

Absolutely. All right, let's go to Jim in Chicago right now. Jim, how can we help? Hello, Jim. Hey, so I've been making double mortgage payments for the past several years, and I've kind of paid down pretty good. I have a very favorable interest rate right now, but I am in a position at the end of this year to be able to pay it off. Awesome. Of about $85,000. My question is, is it smarter to put that $85,000 and pay off the mortgage or to apply it to my mutual funds, which are making $15,000 or better right now. Yes, this is a very common question we get in the age of people

hanging on to 2% or 3% mortgages, and the market has been outstanding, hitting record highs. And so in your heart, you go, oh my gosh, I could be making more versus paying off the mortgage. But here's the things to think about. Number one, paying off the mortgage is a forced savings plan. We don't know what the market's going to do. I hope it continues to go up and to the right, but in the short term, it could go down. And you're going to have more security, more peace of mind, and reminder, the cash flow of a freed up mortgage payment that you could then invest. And so in a world where everything is just robotic and on paper, you could make the case that investing would be the, quote,

wiser, smarter choice, but in the real world, this is what I did, Jim. I paid off my low-interest mortgage, and I have no regrets, and I think you're going to have a better quality of life. You're going to have plenty of time to invest on the other side. Would you say that you're going to be okay? I think so. Yeah. And so that's what I would do. It's what Dave would do. It's what many have done.

And I don't look at the interest rate. I go, what's going to give me the best financial future? Having no debt. And it's not going to be long before he's doing both. Anyway, he's going to have a paid off house and put in extra. Exactly. He's so close. It's a very luxurious problem to have. Good point. And he's going to build wealth regardless. We just want to give a very luxurious problem to have. Good point.

And he's going to build wealth regardless. We just want to give him his best path to peace in the meantime. Speaking of luxurious problems, we have to stop for just a few moments to get paid. Pay some bills around here with some ads. And then we'll be back to help more people. Can't wait. This is The Ramsey Show. The Ramsey Show continues.

Thrilled to have you with us. Our scripture of the day is Luke 12, 15, and he went on to say to them all, watch out and guard yourselves from every kind of greed because your true life is not made up of the things you own, no matter how rich you may be. Our quote today, Nathan W. Morris, I found that the less stuff I own, the less my stuff owns me.

How about that? The original minimalist, maybe? I love that the less stuff I own, the less my stuff owns me. How about that? The original minimalist, maybe? I love that. And an anti-debt message, because when you owe people money, that stuff owns you. Good stuff. Thomas is up in Atlanta, Georgia. Thomas, how can we help? Hey, guys.

Thanks for having me on. You bet. So, yeah, I am 24 years old and looking to get engaged within the next six months. And so I was just wondering if you all think it would be wise if I paused contributing to my investments and put more money towards being able to buy an engagement ring. How much do you think this ring is going to cost? So we went and looked, and the one that she favored the most was around $20,000. Hello.

Hello. Where did you go? Local place around here. Was that the most expensive ring there? Did she see a price tag and go, that's the one? Or did she just happen to choose it? No, we tried on a few, and the one that she kind of settled on was that,

but it's not set in stone. What do you make a year? So my salary is 82 000 now see i'm sitting here i've been married 26 years no idea what rings cost these days because i'm just i don't pay attention george just got flush i got it yeah that made me, whew. I mean, that's pretty good. How big is that ring? Just because I'm curious. And so is America. It's just over two carats. Oh, two carats on the first time? Riddle me this, Thomas.

What do you do at the 10th and the 25th anniversary if we start at two? What happens if you get her the, you know,.57 carat ring and you show up with that to the engagement? I can tell you. I can tell you. Is her answer still yes? Is it a... It's a muted yes. Wait, that's not the ring I wanted.

It's that and that. He already let her try on a $20,000 ring. You don't test drive the Lamborghini and then go, but we can afford the Civic. You know what I mean? This is a great one. The truth is, you can't afford a $20,000 ring. And even if you could, make an $80,000 and with this, that's a fourth of your income. That is way too much to spend on a ring.

Did you give her the impression that you were going to try to make that happen? Be honest. Well, we had been going back and forth between, because nowadays, like, lab-grown rings are a big deal. So I was erring more on the side of that, because those are about a third of the price, but she was kind of sticking towards not wanting a lab gown. That's a red flag to me. You didn't answer my question, which tells me what the answer is. What is it? She thinks she's getting that ring.

Yeah. An expectation has been set. And the reason we're asking you this is not to make you feel bad. We're trying to get to what you're really dealing with so we can give you some advice. And I had a sneaky suspicion that was the case. She walked out of there, her heart fluttering, George, because she saw a two-carat diamond on her finger. And it's not lamb grown.

It's real, whatever that means. Well, it's the blood diamond, Ken. She wants to sacrifice yeah but the truth is i don't i gotta look into this lab grown business this again is a new i've heard of it but i don't know much about well it's the ethical way and there's really no difference and you know blah blah blah okay so it's just the new well now we got a problem george because now he's got a relationship problem not Even if you called in saying, should I pause investing for six months to save up for the ring?

Even if you did that, there's no way you can save up 20 grand. And I wouldn't advise you to. Do you have any money saved at all? Yeah, so I have about 10K in my high-yield savings account. Yeah, but that's the only savings you have correct and you're a big boy now you got a job we gotta pay for a wedding we gotta you know have future goals and does she have any debt do you have any debt no so i have no debt um her parents are very um wealthy willing to well willing to you know pay for the wedding so here was my heart of hearts i went i bet she comes from money

and if you don't get it for her daddy will is it that kind of you know entitlement the way she grew up there's nothing wrong with that i gotta on, I've got to hear the answer. You're on to something. Is that the deal? She comes from a wealthy family? I mean, not like particularly overboard, but definitely more than how I grew up. Bro, you should run for Congress because your answers are just,

you are the spinmeister. If my wife tried on a $20,000 ring today, we would still laugh and leave the jewelry store and go, can you imagine dropping that kind of money on a ring? And George can actually afford it. And we still would go, it's a waste of money. And so my deeper worry here, Thomas, is that she cares about the wrong things. That she doesn't care about the financial future.

She cares about a flex. And let me tell you, maybe one day when you guys are 44, upgrading to the two-carat 20 grand ring is going to be like nothing. That'll be a fun anniversary gift. But right now, as you guys are getting started in your marriage and in your life, it just feels like an astronomical waste of money. With bad motives. And it's not that she doesn't care about the financial future she just comes from a different world than thomas comes from

and a lot of people there we go he now we got it now you hear that that's the clearest answer he's given so thomas i i think the conversation needs to to be you know what i've thought through this and i'm not your dad. I mean, this is a pretty big conversation. At this point, if you're already shopping, just go, here's the budget. Here's what I can actually afford. What is the $4,000 ring that would just make you light up if I proposed with this? And if her answer is there is no $4,000, then I think we need to have a, that's another red flag.

I think so. Thomas, I know you didn't call about this, I got some red flags and so does George and I hope we're wrong I I assume she's a wonderful gal and maybe it's just a mindset thing but she needs to understand Thomas ain't got 20 grand to spend on a ring and see you're responsible to her father and her mother if you make a bad financial decision to try to keep up with his standards and then you guys put yourself in a hole have you thought about it that way like i would never oh yeah that's the main thing that's been going through my head was if i just completely drained my savings like where are we going to be starting out and that's right

dude and then what are her expectations for a lifestyle beyond that? If you've got a two-carat ring, you're not driving a used car. See, I don't think she has any concept of money is my thing. And you do. See, you're winning, Thomas. You've done your training. You're a big boy. You're making $80,000.

You've probably got a ladder for growth professionally, right? Yeah. Yeah, you don't want to start off this relationship you're not even married draining everything you have to give her something that you don't have to give her either she's in this for you and the life you guys are going to build together or she loves the idea of being loved but it's got to come at a price. Ouch. That sounded really harsh. I agree. I guess we're just too old married, guys.

That's what it is, Ken. We're getting old and we're fuddy-duddies. But Thomas, we're just looking out for you, man. I hope this all works out. I hope we're wrong about a lot of our assumptions here, but from our conversation... All right, let's do something really quick before we go, because we have all of our percentages on mortgage versus income, car versus income.

Let's do the diamond versus income. Here's a kid that makes $80,000. Oh, yeah. Well, you know, the old saying is like, well, three months of salary. I think that's insane. Yeah, so I haven't thought about it. What do you think is the rule of thumb on a diamond? My gut says you pay cash and no more than one month of salary is a totally fair number.

I like that. See, I've never actually heard that. One month. One month salary. There you go. And even then, you don't have to spend that much. So he's making $80,000. So if he's bringing home $5,000, I go, that's the budget.

And have the conversation and shop with that in mind. And I do. I don't shop for a car with no budget and then go, all right, I guess we'll try to get the Lamborghini. I go, we got $10,000 to spend on a car. What are we buying? I kind of like this idea of going into the lab and go, grow me one of those. I don't even know how that works. Get a Moissanite or whatever.

There's so many options. I don't even know what you just said. All right. We're the old fuddy-duddies. I'm going to go to eat a Tums, Ken. Yeah, me too. This is The Ramsey Show.