The Ramsey Show - App - Should We Lease a Horse? (Yes, a Horse)

Episode Date: April 29, 2022

Ken Coleman & George Kamel discuss: Deciding between two different health insurance plans, Buying a car when starting a new family, The foolishness of waiting for the government to forgive student loans, How compound interest works, Does it ever make sense to lease a horse? (Neigh, it does not) Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we talk about your life, your money, your work, and your relationships. 888-825-5225 is the toll-free number to jump in. I'm Ken Coleman. He's George Camel. And we are here for you this hour. Thrilled that you've joined us. 888-825-5225. George, you ready to go? You ready to help some people?

Always ready. Always a good day when it's with Ken Coleman. Oh, I appreciate that. I appreciate that. John joins us next in St. Louis, Missouri. John, how can we help? Hey, how's it going guys? Good to be talking to you. Good to talk to you. So listen, I got a new job recently that I'm really excited about,

moving to a new state, a huge pay bump. And I was going over the health care plan that they offer. They offer a core plan and a high-deductible plan with the HSA, which is a plan I currently have at my old company. But the difference is here at this company, they fully cover the premiums on both plans, which means nothing would come out of my paycheck every month. Awesome. So I'm relatively healthy. I'm kind of wondering if I should go with the core or the HSA since the premiums are covered. The flip side of that is that the company actually contributes about $1,400 a year towards the HSA. So that's also another thing to consider, but I'm just kind of wondering what would be the

better option in my case. So you're saying do both plans have an HSA? So there's a core plan? No, there's the core plan that's like normal, like a normal health care plan, and then there's the high deductible plan with the HSA. I like that option. Yeah. So what's keeping you from just sticking with that? Yeah, I was just wondering because since they cover the premiums on both plans 100%,

would it be better to go with the plan that has the lower deductible? Well, it sounds like the incentive to go with the high deductible plan is the extra $1,400 a year that's thrown into your HSA. Right. Okay, that's what I was kind of thinking too, but I was kind of wondering if that would be the smarter choice. Yeah, I mean, if you're saying you're a healthy guy, that's still going to be my choice, and the HSA has some amazing triple tax advantages. And you can also start investing in your HSA once you hit the threshold in that account. Okay, perfect. Yeah, I already have the HSA

at my current company. And I really like it there. I was just wondering, I've never had a company that pays 100% of the premium. So that's kind of a really cool benefit. Yeah, that's a great benefit. I love that. But I'm still going with the high deductible plan and the HSA. That's kind of a really cool benefit. That's a great benefit. I love that. But I'm still going with the high deductible plan and the HSA. That's going to be your best bet. You can cover all your healthcare expenses through that HSA, begin investing in that. It can actually be a cool tool in retirement at that point. So that's what I'm going with, man. Congrats. It's awesome. Love it. Appreciate the call, John. You're on your way. Let's go to JT, who joins us in Houston, Texas. JT, how can we help?

Well, Ken, George, very nice to hear from you all, and really appreciate what all you all do. Thank you, sir. How can we help? Well, sir, I am starting to look at starting a family with my wife, and the car buying industry right now in Texas has just been absolutely hot. Five-year-old Explorers are going for the same as MSRP when they were selling brand new, and new cars right now have $10,000 to $20,000 on top of them. If I'm looking for a paid-in-cash baby hauler, what exactly am I looking for?

What do you recommend? All right. Well, JTt you said you're looking to start a family so that means is is your wife pregnant or are we just getting excited about the trying process uh birth control is coming out next week okay and okay that's enough information for us yeah yeah we didn't need any more than that, but that does help us. So we don't need a baby hauler right now. What's the urgency?

I'm the nerd of the relationship. She's the free spirit. Okay. What are your two? I'm assuming you guys have two cars. Is that true? Yes, sir. Okay. What are you driving?

I have a 2020 Volkswagen Passat that I just paid off yesterday. Hey, congratulations. How about that? All right. What is she driving? She has a 2001 F-150. All right. Here's the great news about both of those cars. All right. If you have one baby and it is possible to have twins and triplets, I don't want to freak you out, but it's possible. All right. But if it's just one here a little bit, I know, dude, relax, take a deep breath, get a, get a brown paper bag, JT, keep it close by. Here's the thing, man. It's a good chance. It's just going to be one. And both of those cars fit one car seat. All right. I know you can look, look at me and listen to me and go, Ken's no baby expert. And you'd be right. But I do have three kids and they

were all babies, and I know that one car seat will fit in both of those cars. Here's the point I'm making. We've got time. We've got some time. We need to relax. You don't need a baby hauler. In fact, you already have two baby haulers.

You don't have eight kids. You don't need to go buy an Astrovan. I mean, I think there's more behind this. Are you nervous about having a kid? Of course he is. Everybody is. That would be an understatement. But I think that's really the underlying problem. It's not really a financial question. It's not, do I need a car now? He's just going, oh gosh, oh gosh, how is life going to be different once I have a kid? What does this mean for us? And I think those are fair questions to ask, but take a deep breath. It's going

to be okay. So do you have any debt right now, JT? You told me you just paid off the car. Anything else? Only thing we have, well, actually that's a story in and of itself. We sold my wife's 2019 RAV4 for two grand more than we bought it two years ago. And then used the 10 grand in positive equity to pay off my car and a good portion of credit card debt. So all that's left is about 12,000 in credit card debt and So all that's left is about $12,000 in credit card debt, and we're done, which is going to be in the next three to four months. Fantastic. Okay, so that's, I think, what's going to give you the piece,

is we're going to pay off all of our credit card debt. Then we can have a fully funded emergency fund and start saving up for a car if necessary. I truly don't think you need one in the next few years. I think unless you have multiple kids, I mean, a baby fits in a Passat. I never thought I'd have to say that on air, but it's true. Yeah. Now, JT, I don't want you to faint with this, but if you have twins, you can still put two kids and two car seats in a Passat and an F-150 if it's got the extended cab.

So you'll be okay. Until you actually feel the pinch where you go, oh, this car's too tight. We can't get, it's just too much. And over that, by then, you're going to be able to save up and pay cash for a bigger car. If you need the minivan, if you need the baby hauler, as you called it, you'll be able to do that with cash. I would not worry about the car market. Just buy the car that you can afford in cash. JT, what got you to this point of being close to being debt-free is going to keep you out of debt.

It's going to allow you to save up for any car that you need, I promise. Now, let me just speak practically to this. If for some reason you're thinking, well, my Passat or her F-150 isn't going to do it, I'm in the car market right now for my wife, number one, and number two, for a teenager who's about to be driving. I'm looking at cars all the time. If we're just calling it a baby hauler, there are plenty of good deals that you will be able to afford and pay cash that are serviceable. And they won't be brand new. And they may not be a couple years old. But they will get baby and mama and daddy from point A to point B. So appreciate the call, JT. And listen, I didn't know what I was doing when our kids were born. I still don't know what I'm doing as a dad of teenagers.

It's okay. You're going to be okay, man. You're a good dude. You're responsible, and it's going to be all right. And if you need car buying advice, I mean, if you're looking at SUVs and minivans later on, Toyota and Honda are solid, solid vehicles. I understand what a Honda is. What was that other brand?

Toyota. Okay, thank you. They always make fun of me. I say Toyota instead of Toy-o-da. Whatever you said, America was going, I've never heard of that car brand, George, and we trust you. America's got bigger problems, Ken, than how I pronounce Toyota. Oh, no, it's not a problem.

I just needed to clarify it. You did good. Hang in there, George. It's all good, man. We'll no, it's not a problem. I just needed to clarify it. You did good. Hang in there, George. It's all good, man. We'll get there. You're the man. Hey, don't move. More of your calls coming right up.

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Visit RamseySolutions.com slash long-term care to connect with one of our trusted ELPs. That's RamseySolutions.com slash long-term care. Welcome back, America. You are listening to The Ramsey Show, a conversation about your life, your money, your work, your relationships. George Campbell and I, Ken Coleman, join you to take your questions. 888-825-5225, 888-825-5225. Let's go to New York City, New York. Mike is there. Mike, how can we help?

Hey, guys. Thanks for taking my call. I love the show. Thank you, sir. How can we help you? So I graduated school in 2020 with about $47,000 in student loan debt. And over the past 18 months, I've been paying that down, even though it's been in forbearance. With everything going on in the news recently and talks of Biden writing off 10K of student loans,

it just so happens that I'm at about $10,000 left. So I'm just kind of wondering, should I just keep paying it down or potentially leave free money from the government on the table? Sorry, I'm not laughing at you. I'm laughing at that statement, free money from the government, a thing that doesn't exist, actually. It's always coming back to you one way or the other. And I could be wrong on this, and I'm hoping I'm wrong. But I don't see it happening. I think it's a campaign year. Midterm elections are coming up.

And I think this is something that gets dangled out there because it's a winning talking point in that a lot of people who have student loans are going, oh, that'd be great. It'd be great. It'd be great. But I just do not expect it to happen because quite frankly, student loans are big money business for the government, George. Yeah. I'm 100% with you, Ken. I was laughing at the idea of, well, in the news, there's been talks. Oh, a politician talking. Look at that. That's progress. And so I'm not banking on that. And like Ken's saying, what's happening here is approval ratings are low. Midterms are coming up. We got to make them look good to get real. So what's happening

here is they dangle the carrot to make people vote, and then they keep kicking the can down the road. And as we've seen, the student loan forgiveness stats are abysmal. One or two percent of the people that applied have been forgiven. And you've already done the hard work, Mike, to get down to $10,000 from 47. So how many more months is it going to take for you to pay off? It should be done in August. I'll tell you this much. By August, it will not have happened. I'm happy to be wrong, like Ken said, and you will not look back with regret. When you're debt-free and you don't have a payment in the world, just be happy for those that got their $10,000 paid off if it even ever happens, but I'm not holding my breath. And Mike, listen, you're a good dude. I mean, you're a high-character guy.

That's why you've already gone after it. You've already been paying it down, even though they were in forbearance. Smart. Listen, you took out the loan. It does not make you evil. It does not make you bad. You're not a criminal. You're not a person of low character.

But you signed up for that. You took it out and paying it back. And I just think that, you know, we've got to remember this, folks, that, you know, at the end of the day, I understand why emotionally, if you've been under the weight of these loans, that you're holding out for it. But I wouldn't hold out for it. Yeah. Well, people feel like they've been lied to when it comes to the entire student loan crisis and college and the promises. But at the end of the day, at what point do we go, well, we should extend this to credit card debt and all kinds of debt?

And the truth is, you signed up for the debt. You've got to pay it back. That's just how it works. You don't want to do that? Don't go into debt. So way to go, Mike. Keep paying it off. Call us back when you're debt-free.

We would love to celebrate with you. August is going to be here before you know it, Mike. Really proud of you, man. Keep on going. And it's going to be a challenge that you look at on the other side of this thing of being free of that student loan debt. You're going to look back and it's going to really build character. It's going to teach you a lot. It's going to remind you later on in life when you have another challenge that you can do it.

So there's nothing but positives by paying this off. Houston, Texas is where we go next. Mary Ann is on the line. Mary Ann, how can we help? Hi, my name is Mary Ann, and I am calling for another student debt question. Basically, I have a bachelor's degree and a degree that I haven't used. I finished it like over 10 years ago maybe 13 years ago now it was a communications degree and then i became a then i was a stay-at-home mom for a while

and um i our home is paid off um so we don't have debt um but there have been a couple months along the way as happens in some people's lives anyway long, long story short, I'm here, and I just had a baby about eight months ago. Oh, congratulations. But I have been thinking about going back to school. I had been working as a teacher. I mean, I was a stay-at-home mom, but then I went back to work as a teacher part-time at the preschool where my daughter was at, and then I went to doing that full-time.

Anyway, I had been taking prerequisite classes from the same school. Speak directly into your phone, Marianne. It sounds like we got some wind or something there. Oh, sure. So I had been taking the prerequisite classes just one at a time, you know, while I was working. And I finished them. I got into a state school. So the price is right. We saved up the money. We do have the money to pay for the school outright. But I'm like, I did apply for, you know, for the scholarships they had available. And I got, you know, like $4,000 in scholarships, which I was really proud of. And I was like, that's great. You know, that'll help. We have about maybe 40,000 saved. My husband makes about 40,000 a year. Um, and I just, I mean, there is like,

they do have this unsubsidized or they have a subsidized loan. It's just $5,500. Hey Marianne, let me ask you a question. Um, what are you getting a degree in? I didn't catch that. Why are we going back to school? Oh, I'm getting a degree in nursing. It's an accelerated 15-month program for nursing school. That way, I just wanted to be able to increase my income from being a preschool teacher. And I know I probably could do other things. Do you want to be a nurse? Or is this just a... I mean, well, let me ask it differently.

Do you want to be a nurse because you are a caregiver and you love the idea of that interaction, or do you want to be a nurse because benefits are great and the money is much better than a preschool teacher? I'd say it's a combination of both. Like, for a long time, after I had my first kid and even a little bit before that, I was really interested in, like, holistic and kind of, like, healing and preventative medicine and that kind of care. So as far as being a caregiver, I have that part down. So how much money would you have to – I'm sorry to interrupt. How much money are you going to have to borrow to pay for this nursing degree?

Because you don't have the cash. We do have the cash in our savings. So why are you considering a student loan if you have the cash to pay for it? Yeah, that's where I'm confused. I love that voice. Sorry. Well, I just thought maybe it would be free money, which you guys are the wrong people to talk to. What is free money? I'm so confused. Since when is a student loan free money? Well, because there's no interest being charged on it while I'm in school, and the interest only accrues until six

months after. So I figured like- Hold on. You just told me you have a paid for house. Did you guys get out of debt at some point? Sorry. Yeah, I do have a paid for house. Okay, nevermind. I'll hang up. I'm embarrassed. No, no, no. I'm not trying to embarrass you. I'm trying to show you the logic of you guys work so hard to get out of debt so that you don't have payments anymore. And so I don't want you to move backwards. When you guys have sacrificed, you know, you're a sharp couple, you have a great income. Like, let's just pay cash for this and be done with it. That's the reason you saved up $40,000, not for it to sit there, but for it to be put to use. Yeah. Marion, don't be embarrassed. I can't tell you how many people in my life would tell me

something like that. Oh, it's free money because of the interest. But the reality is the minute you get out of nursing school, the interest starts accruing, and now you've got this debt that you're working to pay off, and you said you wanted to make more money. So if you want to make more money, then go ahead and pay it. Use some of that savings. Get it done. It's a 15-month accelerated program. Now you hit the ground running, Marianne, and you're making really good money, and that

is going towards replenishing savings, walking these baby steps out, getting back into that. Now you're investing. You've got the money. Don't borrow it. Don't borrow it. It is not a good deal. It's not going to help you out. Yeah, I did not mean to shame Marianne in that call.

I just want to make that very clear. Well, George, you can't raise your voice at people. I'm sorry. You know how I get. I'm known for my anger and being loud and aggressive. It's great. No, listen, I think that is something a lot of people tell. I bet she's had people in her life that have told her that.

Hey, it's free money. Why would you use your own money? Borrow other people's money. OPM. That's how you get wealthy, Ken. Yeah, it's a trap. All right. Hey,. OPM. That's how you get wealthy, Ken. Yeah. Yeah, it's a trap. All right.

Hey, good stuff there. Thank you for the call, Marianne. Don't move. More of your calls coming up. This is The Ramsey Show. Welcome back, America. You are joining the conversation here on The Ramsey Show, talking about your life, your money, your work, your relationships. I'm Ken Coleman, joined by my colleague, George Camel,

and we're taking your calls this hour, 888-825-5225. Hey, when we get together as a team here at Ramsey Solutions, we're talking about our mission to change America's toxic culture in the area of money and working relationships. And it makes us mad to see in that money area so many people trapped by debt or to watch kids sign away their future for a student loan. For folks who work here, this isn't a J-O-B, it's a mission. If that sounds like something you could get excited about, you've got to check out all the exciting roles at Ramsey Solutions because we are looking to hire ASAP. So let's go. We need developers, UX designers,

and writers to help us build digital products that actually change people's lives. To see what it's like to do work that matters with us. Before you apply, follow us on Instagram and Facebook by searching Ramsey Careers. Apply for your dream job at ramseysolutions.com slash careers. That's ramseysolutions.com slash careers. All right, Sioux Falls, South Dakota is where we go next. Zachary's there. Zachary, how can we help?

How are you guys doing? We are having a blast. What's going on? I have a question about how a Roth IRA works. Because I know how Dave says you can invest $6,000 a year for 40 years. That's the max. And he said at 12% or something, it grows to 5.8 million. So I was just wondering how, I know those are rough numbers,

but how exactly does it multiply? Oh, good question. How old are you, Zachary? I'm 29, about to be 30 at the end of July. Okay. And have you been following the baby steps? We're about to start. I'm doing every dollar, trying to work out the kinks with that.

I love that app. But it's in the works. Do you have debt right now? We're trying to do it. Yeah, we have debt. We got We're trying to do it. Yeah, we have debt. We got, there are some old debts. There's like one large one that's with a collection agency that threatened to, they got a judgment on us, but nothing has ever happened with that.

It's mostly medical bills. There's two small credit cards in there that are, they're like both under a thousand. There was like credit one and capital one. Okay. Well, I asked just to find out where you guys are at in the, in your financial picture.

And I want you to use your income because it's your greatest wealth building tool to become wealthy. And it's hard to do that when you've got payments in your life. And so if you follow our plan, baby step one thousand $1,000 starter emergency fund, baby step two, pay off all of your consumer debt using the debt snowball, then we never touch debt again. Then we focus on the emergency fund, three to six months of expenses and a savings account. Then we can talk about investing. So I say all that to say, we're not quite ready. I love your question. I'm getting to that. But I want you to know where that falls in our plan so you don't jump ahead of yourself.

Yep, I'm very familiar. Okay, good. So the Roth IRA, when we talk about compound interest, which is what you're talking about, that works with any type of investment. So we talk about good growth stock mutual funds inside of your Roth IRA or Roth 401k. And compound growth is fairly simple. It's when your money makes money. And so if I've got $1,000 in there and I've got a 10%, 11%, 12% return, those are not numbers that we made up out of thin air. That is just tracking the S&P 500, the top 500 companies in the stock market. And that's what the numbers have been over the inception of it back in the 1930s. And so when you look at that and you go, okay,

my money can make me 10% to 12% in the market. Well, then that 10% to 12% gets compounded every single year because that $1,000 turned into $1,100. And now you get 12% on the $1,100 and that turns into $1,500, which turned into $3,000. So over time, your contribution is a small percentage of the actual number in that account. And so that's what happens over time. Okay. So what happens if someone just puts money into the Roth IRA

but does not use mutual funds? Does it grow at all? I mean, you've got to put something in there. You can't just have a shell of an account. You've got to actually fund that Roth IRA, fund that 401k with something. And so some people do mutual funds. That's what we recommend. You can do an index fund, which is similar.

You could do single stocks, which I don't recommend. But with single stocks, it's going to be a lot more volatile. That's right. If I just invest in Tesla, and if you've seen the news, Tesla is real volatile right now. Well, I'm freaking out. I'm losing sleep at night. But when I invest in a mutual fund, well, that one fund has a ton of different companies. And then when you diversify that and you have four different types of mutual funds, you're even more diversified, which lowers your risk. And so that's why we tell people to invest in those types of funds. And if you do that, you can become a millionaire. But you got to get out of debt, you got to have the savings, and then we can begin investing that 15% of our income into retirement. Thank you for the call, Zachary. Next, we go to

Raleigh, North Carolina. Rob is there. Rob, how can we help? Good afternoon, gentlemen. Happy Friday. Happy Friday to you, sir. What's up? So I have an interesting question for you guys. I am in Baby Steps 4, 5, and 6 with our family. Great. And I know the position that you all take with respect to leasing vehicles, and I'm not going to try to set any new precedent today, but I do have a question on the lease idea when it comes to horses.

My wife is really into horses, and so are my kids. When you're in baby step two, you don't get to enjoy that type of thing, but now we're in four, five, and six. They would like to get a horse or two, and apparently it's become popular in today's time to actually lease a horse. So basically you have the monthly payments and the upkeep, but you don't have to worry about, well, I guess it depends on your contract, but you don't have to worry about getting rid of it at the end of the day. Okay, hold on a second. All right, hold on, hold on. I've got to know more because this might shock you.

I know nothing about leasing horses. Is this like a boat thing where multiple people are using the same boat, multiple people using the same horse? You get Larry the horse Monday, Wednesday, Friday. I mean, what's the deal deal it is not a timeshare it is uh you're actually uh you got all so you it's only you and your family and larry nobody else rides larry that's it so you're just renting the horse essentially wow basically yeah okay well why would you why would you why would you think the reason i distinguish that from a vehicle right right, is because with a vehicle, at the end of the day, you can take it to another dealership and they might give you cash for it. A horse is much more difficult to get rid of.

You know what happens to poor Larry the horse when we get rid of him? It's awful. I don't think you can say that live. I'm not planning to. Two things everybody knows. Just because it's popular doesn't mean it's not a terrible idea. Eating Tide Pods became popular. Does it mean we should all start doing it?

No. So leasing a horse is no different. It's a horrible idea. If you can't pay cash for it, you can't afford a horse. How much does it cost to buy a horse? No, I don't think the issue is paying cash for it. I think the issue is once, you know, if you need to up and leave, if you need to move. You can sell the horse.

Okay. I mean, I guess you could. I guess you're assuming that there are willing buyers out there. You're a willing buyer, Rob. Can I remind you that you are willing to buy a horse? Rob thought he got me there in the corner. Do you not think there's other Robs out there who may want a horse? Yeah.

Who have little girls that want to ride a horse? I wouldn't plan on it being an appreciating asset. You've got to look at this thing as a liability. It's an expense. This is a hobby. But if you guys are debt-free and you want to pay cash for a horse and deal with all the maintenance because this is a dream of yours, I'm okay with that.

Okay. But do not fall for this horse leasing business this is awful i mean rob you're a good guy you're in baby steps four five and six like you didn't think we were going to be cool with this did you i didn't but it just seems different than a vehicle i mean it's just so let me remind you justification station here you're looking for any reason to get this horse at any cost. I got a little comeback, Rob. There was a time in the world where horses were the only vehicles.

Rob, quit horsing around. Let's pay cash for this time. There it is, folks. I was wondering if you were going to say that. I was there. George Campbell for the win, everybody. Here to save the day. James, would it have killed you to pull up a horse sound to take us out? Somebody in the booth's got to be thinking. There's a reason they don't let us use sound effects on this show.

Very good. All right. Hey, Rob. Babysets 4, 5, and 6 does not include leasing a horse. This is the Ramsey Show. Welcome back, America. This is The Ramsey Show. I'm Ken Coleman. I'm joined in studio by George Camel.

Our verse of the day comes from Ecclesiastes 5.3. For a dream comes with much business and a fool's voice with many words. Our quote from coach Mike Krzyzewski, recently retired from Duke basketball, my hunger is not for success, it is for excellence. Because when you attain excellence, success just naturally follows. And that is true. Fun last call there. Rob wanting to know if he should lease a horse and i missed the

the buzzer beater line ken when he asked should i lease a horse and i should have said nay you should not lease a horse oh yes the dad joke sometimes i say it's really good wow george never a dull day around here i'll tell you that much ken yeah i will tell you had you said that real time i would have been done. You would have been under the desk. You would have had to take us a break. That was just so good. Too many horse puns.

Too many. We're having a good time. We are. So glad you're with us. Let's get back to the phones. Philadelphia, Pennsylvania. Kitty is there. Kitty, how can we help?

Hi, George and Ken. How are you today? We are having a little too much fun, we're told. I hear it. We're having a horse in the rail today. I see that. Hey, there we go. Kitty for the win.

Kitty's in on it. So my question for you today is, and thank you for taking my call. Sure. My husband and I just got done F at CU about a month ago, which was a blessing because I had tried to get him to do that for over a year. But he finally caved in and actually enjoyed the class, and now he's on board with me. Awesome. So my question is, we took a 401k loan out, which we know is a big mistake now. And so we're trying to clear that up because really that's probably 90% of what's left for our value

because we're on Baby Step 2. We paid off about $40,000 already since we started the class. So thank you to Marketplace on Facebook because that was a big help. Awesome. Selling stuff on there? Yes, selling stuff on there and just getting rid of stuff we never use. And it was just, actually it was fun because we're watching numbers go down, but now we're stuck with this 401k loan and not sure what to do. So I made some calls today about getting a loan to pay off the 401k loan.

Hold on, hold on, Kitty. What are we doing here? You about getting a loan to pay off the 401k loan. Hold on, hold on, Kitty. What are we doing here? You're getting a loan to pay off a loan? Does that not sound backwards to you? It does sound backwards to me. And that's what we were afraid of, is that we just stick with the 401k loan, pay it off in the five years that, you know, it's recommended, or get a loan, pay it off now, and pay that loan off within two years. Now, we've got to focus on behavior here, because right now, we're just trying to solve a problem with another problem, instead of find the solution, which is work our butts off and pay this thing off with our cash flow, with our savings, and then never touch debt again. The HELOC, is that

what you're talking about, getting a HELOC? Yes, I believe that's what it is. A home equity line of credit. It's the equity in our home. So essentially, you're going to use a credit card to pay off debt to then pay off the credit card debt, leaving us back at square one. That's what I don't know because I'm not very good at what equity is in your home i'm not i'm just telling home equity line of credit using your home like a credit card and you're borrowing against your home you're putting your home at risk the heloc's not going to create

cash flow it's just debt it's just putting you further into debt and so you got to save up we got to pay cash and uh get this 401k loan paid off what's the 401k loan what's on there how much uh it's like 34. How much? It's like $34,500. Okay. And what's your income? $150,000. Okay. So what's stopping us from using our income plus more Facebook marketplace selling to get this 401k loan out of our life?

Nothing. Good. We just want to make sure. I guess it's the five-year mark that's getting me. We know we're not going to be able to pay it off. I don't understand why you would pay it off. You said earlier that it's five years if you just pay it out of the 401K, pay it off there, versus two years with the other loan.

I don't understand that math. I guess I'm thinking. I'm sorry, go ahead. Well, you're just moving one'm thinking i'm sorry go ahead well you're just moving one pile to it it's one pile to another pile it just makes no sense i'm gonna move this pile of rocks to this side of the yard you feel like you did something and nothing's happening here you you and your husband need to get down on a plan here and go okay look what can we sell we've already we've already seen great progress by selling things. George is right. You make $150,000, you're going to pay the $34,000 off within a year. I agree.

Okay. And that's it. There's no shortcuts here. There's no two years, no five years. I think here's the fun question for you and your husband. And I mean this. This is date night. What would it take for us to pay off that loan in one year?

What would it take? What would have to be true? It's a great exercise. You know what I mean? Because even if you can't get to a year, we might find that we can get there in a year and a half. But what would need to be true? That's a fun exercise. That's your homework. What's your take-home pay? $9,000? I'll take him. Um, two, four, six, eight, almost nine. Okay. So you're talking about three thousand dollars a month would get this thing knocked out can you live off of six thousand dollars a month

i think we absolutely can this thing's gone in a year and you'll come celebrate and do your debt free screen with us how's that sound i mean that's with no overtime my husband does work a lot let's get some overtime let's do it in eight months let's give give ourselves a stretch goal. Yeah, Kitty. We're not even talking about your prowess on Facebook marketplace. What else could you sell? That's what I'm going to do this weekend. Let's get to work and let's avoid these shortcut traps like HELOCs and consolidation. You got this. Yeah. Thank you for the call, Kitty. Come on. Michael's up next in Grand Rapids, Michigan. Michael, how can we help?

Hello, thank you for speaking with me today. You bet. What's up? So I just kind of had a quick question. It was really more, I mean, money is definitely part of it, but it's really, I think, more of a behavioral thing. So for a short context, me and my wife are both graduating undergrad here in a couple weeks.

And I have secured a post-college job. I've been working while I've been in college. We've been in college and been paying our bills that way. But throughout the whole time that we were in college, I haven't gotten her to be able to work. Also, like, I have been gotten her to be able to work um also like I have been helping her a lot with her school work along with doing my own um and I I guess my kind of question is how can I try to get her I guess bring her to the light a little bit and say like you know so everyone has to do something you know like I'm to be honest I'm burnt out we have two

children I've been doing most of the caretaking for them i've been doing all my schoolwork helping around heavily with hers working the entire time i have offers for the law school next year and i'm i'm just burnt out i really i'm just tired i like sometimes i don't know like how to keep fighting the fight or just accept that she's going to be lazy and just not do anything. Okay. So, number one, we can't answer this in the allotted time that we have. Number two, it's not even a behavior issue with her. This is a marriage issue first and foremost for you two to sit down with a counselor, and I mean, I would do it soon. And you've got to share this in, in the healthy professional space, because there's something going on here with her.

And, and, and then you are already to a place of resentment. Yeah, definitely. And listen, resentment will eat you up. It'll eat you alive. So this is what I would call a five-alarm marriage fire is what this is. And I'm sitting down with a counselor. It's where I can be honest. But we've got to dig and see what's going on. I will tell you this, not knowing your wife at all, I'd be willing to guarantee you she's not lazy. She's lost.

And I tell you that because I think that you've got to change the way you see your wife going into counseling. I understand why you think she's lazy, but I don't think she's lazy. I think she's lost. And I don't know what's causing her to feel lost in her identity and what's going on. That's what we've got to get to the bottom of. And you need help with a professional counselor to pull that out of her, to identify that. You may even know, and I'm not going to put you on the spot and ask you to do that, but I appreciate the call. And I will tell you that this is a cry for help and I'm glad you called, but let me just tell you,

you need to have some empathy and compassion towards your wife as you move into this counseling session. I'm heartbroken for you, Michael, but hang in there. Don't you dare quit. George Campbell, thank you, pal. Fun times. Always fun to be with you. Thanks to our entire team in the booth. Appreciate you all. I want to say thank you to America.

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