The Ramsey Show - App - Stop Watching the Market—Start Building Wealth

Episode Date: April 4, 2025

This is the Ramsey Show where America hangs out and have a conversation about life, specifically money, your professional career, and your relationships. 888-825-5225 is the phone number, 888-825-5225. Currently holding his stock position and sitting alongside me is George Kamel. Welcome, pal. Can I be honest, kid? I haven't even looked at my 401k. I have no desire. It's a good decision. Good decision. I'm riding it out. I'm Ken Coleman. We'll be with you together. We always have a lot of fun together. George, we'll take the lead on your money questions. I'll take the lead on your income questions.

That's what we want you to do. And for heaven's sakes, let's address the elephant on the map. Not in the room, George. We just got to say, hold, hold, hold. Don't freak out, chill out. Don't look at your 401k. Don't look at the headlines today. Today's probably a good day to just play board games. You know who's having a good day? All of the news outlets who are getting a lot of views from you guys.

Very excited, very excited. All of your clicks and eyeballs going, oh my gosh, it's all coming down. Calm down. Calm down. It's gonna be okay. Calm down. You're not cashing out your retirement today. That's right. Leave it alone.

Just breathe. Go find a hobby. Yeah. Keep investing. It's gonna be okay. It's on sale. Look at it that way. It's been a while since it's been on sale

and it's on sale now. It's on sale. It's a good way of saying it. Next time you invest, those stocks are a lot cheaper. And I'm gonna bite my fingers until they're completely gone to not go on a rant today about what I think about these tariffs

But I will let that alone for today. I think let's go to Michael in Charleston, West Virginia Michael. How can we help? I'm having a little issue. I lost my husband in 2008 and got a settlement because he died in a work accident and had a family friend who was a trust officer at a regional bank and offered to help me walk through the whole process and drew up some trust for me and my kids and two years ago I found out that he stole all the money. Oh my goodness. Two years ago, I found out that he stole all the money. Oh my goodness.

Two years ago? Yeah, she had about $8 million in the accounts and there was nothing. So I just recently received a malpractice settlement for $531,000 and it took me two weeks to even put it in the bank because I was scared to let go of the check. Sure. So I've just got it in a money market account right now at 3.75 interest because I just needed it somewhere safe, but I need it to grow and I'm just scared to do anything with it now. Sure. Can we just ask what happened?

Did you report this to the law? Is there anything working on this? I have some attorneys that are working on it, but it looks like he has spent all of the money. I might possibly recover a couple hundred thousand dollars maybe. Wow. Is he in prison now? Where is this guy?

He's in Florida right now and we found out there's other widows he's done it to. Oh sure. Well I'm hoping that he's going to be arrested soon. Well that's the hope. Okay. In the meantime, we've got to help you with this $530-some-thousand dollars. Do you have any debt right now? I moved into a camper when I found out the money was gone because I panicked and didn't

want to be spending any more money. So I owe about $12 on the camper and I have a little bit on a credit card because that had kind of been my backup while I was figuring things out. Do you have a job? No, I still medically am not in a place that I can really get a job, but I do get workers' comp from my husband's accident. Okay, so what are your monthly expenses and then are you able to cover those with your medical?

Well, I just recently, the guy who took the money was giving me a paycheck, so I had Obamacare and when he took the paycheck, now I'm on Medicaid and then I just found out that because of the settlement, I'll probably lose Medicaid. So, just little things that are up in the air that I'm not sure what to do, but I don't have a lot of expenses. I get about 27.83 a month from workers' comp, and I have about $1,500 give or take.

I pay extra on the camper and medical bills and things like that. Do you have any family? Do you have kids? I have two grown children and I, actually my camper is on my mother's property. Okay, and where were you living before? I had an apartment.

I went straight from my mom and dad's house to my husband's house. I got an apartment and decided I would live in town and do that for a few. So what would it cost you to rent somewhere? Let's say you got rid of the camper. Everything I've looked at, the camper's better than what I would spend to rent. Well better is, I want to argue with that word.

I don't know that your quality of life is amazing right now, living in this camper on your mom's property. I think you need to stand on your own two feet and do some sort of work that you can do because I don't know that this is going to provide enough income for you to cover for the rest of your life. When does this workers' comp end? I get it until I'm 70. And how old are you now? 53. Okay, so you got another 17 years of this 2783, but that's not enough to cover your bills and have a life. No, that's why I need to know what to do with the money. Well you're going to need to invest the money.

You don't need a big portion of it right now other than paying off this debt, which I would just suggest selling this camper and getting rid of it. Are you underwater on the camper? No, I went very minimal on one. So you owe 12K, what is the camper worth? It's probably worth 20. Okay, so you could profit off of that and then what's the credit card balance?

It's like 5,500 right now. Okay. It's got medical stuff on it. So you could sell the camper, use the profits to pay off the credit cards, never touch debt again, build up an emergency fund with some of the settlement money and invest the rest.

Yes. That's what I would do. My husband and I did financial peace before he passed away. So I've just been in this situation now that I have a little bit of credit card debt in the hamper because of what happened. Well you're going to start a new chapter now. And it's been a long time and I think you've been stuck in this sort of fight or flight

and then all the grief of learning that this money's gone and the frustration, the resentment, the anger that you must be feeling. There's a lot going on here and I think we just need to move forward. And I hope that you can get some resolution. I don't think you're going to get all your money back. I do hope this guy gets what he deserves. But for now, you got to go find something you can do and create a life for yourself.

Yes. You're in survival mode. I am very much so. So what would it take for you to be able to do some sort of work? Is it physical therapy, rehab therapy? What would it take? It's all surgical. I just have a lot of internal issues now from all the surgeries.

Could you do something from home, customer service? You're talking to us. And so I feel like there's gotta be something out there you can do to create some income. Plausibly, I could do something from home. I guess it's probably a little lack of confidence too. I wasn't going to stay home long since I was 24. So. Well, you've got a good personality. Uh, you've got good common sense. Uh, your, your brain's working fine and you need to be working for momentum sake. It's not about a ton of money that you need, but it's about momentum across the board.

Your shoulders will go back a little bit more. Your head gets a little higher as you begin to see that I can take care of myself. And the good news is if you do what George told you to do, we also want you to go see a SmartVestor Pro in your area or two or three and have them explain how they're gonna help you invest that money and then your confidence begins to grow

and you can still climb back here. Thank you for calling. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, everybody listen up. You've heard me say this a million times and I'm gonna keep saying it. You are worth being well. And I know that's hard to believe.

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Good to have you here with us. So are you staying on track with the baby steps? You can take a quick quiz to check your progress and receive a personalized plan just for you. Simply head to the show notes, click on the link titled, are you on track with the baby steps and complete the quiz. You'll get a result and that'll help you get caught up with all of our content because we want you to hit the ground running no matter how fast that is. Sometimes you just gotta crawl before you walk,

remember that. And we're here along the way. Let's go to Detroit, Michigan next where Jill joins us. Jill, how can we help today? Hi, oh my gosh, I'm so nervous. Oh, well it's because George is on, he's very intimidating, but I'm gonna be here for you. Yeah, so I am currently in baby step two, I have only 9,000 left to go. I've been working like crazy seven

days a week and evenings and I'm exhausted, but I'm trying to figure out once I'm in baby step four how to invest 15% because I don't see the numbers working out and I'm wondering if I should pay off my mortgage like it's baby step two or if I need to just do side gigs for the next decade or so. Side gigs for a decade? I'd rather see you get your full-time income up. Let's dig into the numbers here to see what's actually going on. It's time for a budget ectimage.

Yeah. Okay, what is your income? Yeah. Your gross income? I make $57,800. I'm a teacher, so I also make about $3,500 gross in the summer. Great. So that's $60,000.

Mm-hmm. Great. So that's 60 grand. Okay. And you're saying you can't invest 15% once you're debt-free. You're not going to have the margin to do it? I mean, according to the numbers that I, according to the math that I did, my household expenses are around 3,000. Okay. And I think my net income, according to my paychecks,

is about 32.25 and then the summer, I mean divide that by 12 and add that to the income. So you're talking about investing $750 a month. That's what 15% is of your gross income. And so when you do your every dollar budget and you list out your take home pay, now it's coming out before it hits your bank account. You have a 403B through your employer?

I do, I'm not investing right now, but I get a four, a yeah, 4% match, so. Okay. So once you're there, you invest 15%, whatever's left becomes your take home pay that you're gonna pay all of your bills out of. Okay. So once you're there, you invest 15%, whatever's left becomes your take-home pay that you're gonna pay all of your bills out of. Okay. So it may not be as much of an issue as you think,

as long as you can live off the rest of that take-home pay. I'm just, like, when I look at my margin, it's like $475. So I mean, unless I'm missing something, I don't know. Well, that's on the net side. You're looking at your budget with your take-home pay. So, it would reduce your gross income by $750. So, if you were making $5,000, what's going to actually end up in your bank account is $42.50. You tracking?

Okay. So, I think so. Right now, I have 6% being taken out for my pension automatically. Okay. So, that's already, and I think you guys say to cut that in half. So right now I have 6% being taken out for my pension automatically. Okay. So that's already, and I think you guys say to cut that in half. Yes, we would count that as half of your 15%. So we would count it as three. You would still need to invest another 12.

Okay, and then I wanted to do the 4% for the match and then do the rest in a Roth IRA. And so that's why I was doing net income. Does that make sense? Yes. But I'm thinking here, what were your debt payments when you started this process? What were your total debt payments per month?

Not much, so I think only like a hundred bucks per month because most of it's due loans and I have a zero percent payment or a zero dollar payment right now. Okay. So what I would do is once you're debt free, you're gonna start doing your budget, I would ratchet it up to 15% and then see what the deficit is if there is one. I think the numbers are gonna work here.

I don't know what all the rest of your expenses are and what you can trim out of the budget, but there's two ways to find this margin, either spend less or make more. So before you go sign up for a side gig for the next decade, I'd rather see us work on spending less and reducing our bills so that you have the margin to do this. And by the way, there's still other baby steps.

You know, like you said, you wanna pay off the mortgage early. Do you have children? No. Okay, so we can skip baby step five and we're gonna move on to six, which is any extra income beyond the 15%, we can start throwing at the mortgage.

But no, you don't have to treat that like a baby step two item. We move from intensity to intentionality when we move out of baby step three into four. So that could be a seven to 10 year journey. You don't need to do this in three years. I think you need to enjoy life a little. Wouldn't it be cool to take summers off? As a teacher, would you want to take a summer off?

Or do you enjoy doing it? Well, I do get bored if I have taken summer off before and it does get boring, but I don't know. I just didn't see the numbers working out like I thought. Well, the every dollar budget will tell you, but I want you to just make sure you're looking at I don't know. I just didn't see the numbers working out like I thought. So. Well, the every dollar budget will tell you, but I want you to just make sure you're looking at the right numbers, gross versus net. Right. Because that'll be deducted from each paycheck. So I don't want you to get spooked by saying, well, I don't have the money in the every dollar budget because that's just your take on pay.

I doesn't, the Roth IRA though, doesn't the net, it doesn't come out of your net though. Roth IRA you would invest on your own. So that wouldn't come directly out of your paycheck. That's not through your employer. Do you have a Roth 403B through your employer? No, I don't. They don't offer a Roth option.

Okay. So yeah, you do match beats Roth beats traditional. So invest up to the match, that's 4%. Move on to your Roth options, which would be an IRA outside of your employer. And then if you still haven't hit 15%, you would move back. But it sounds like you will hit that with your employer so you won't need to move back to it.

Okay. You got this. Now do you believe Jill? I don't know, I guess. I mean, maybe when I get there it'll be different, but... I think so. And you'll make more money over time, right? Yeah, true. I mean, I'll move up to $61,000 next fall, or this fall.

I want to see you actually, I want you to look outside the teaching world. I really would like to see you try it. Just look at it. Just see where you could take your experience and skill set and make a sizable chunk more. And then I also think while you're looking at that, you ought to be looking at some good money earning opportunities in the summer. Let's see if we could keep that income going, doing something else during the summer. You've got to look. And Jill, I can hear it in your voice. You're one of those, you're the true doubting Thomas from the Bible. You know, you gotta see the scars. And George laid it out for you, so you're gonna have to try this

stuff so you can see what he's saying. Because even as he lays it out, you're having a hard time believing it's possible, but I've sat with him long enough to know he's right. But you're gonna have to try some of this stuff. So I'm really gonna push you in two other areas. I really do want you to see what you can some of this stuff. So I'm really gonna push you in two other areas. I really do want you to see what you can make in the summer. Let's see if we can max out the summer. Can we make $9,000 in the summer? Let's set a goal.

Let's look, could I transition from the traditional teaching world into a different role? Because I've counseled so many teachers, George, you know this, on my old show, the Ken Coleman show, where they didn't think they could do anything but teach. But you can. Those skill sets, you are an instructor at heart. And you are an instructor by trade.

That's really, really valuable. So if I were to just tell you to kick the tires on looking at corporate training, for instance, I think you should be making somewhere between 75 to $100,000. Wow. But you won't see it if you don't look for it. Well, I will say I don't, I do live in a smaller town. I'm not in Detroit, but, um, I have, I just do like, uh, department of natural

resources, summer gigs like that. That's what I've been doing. I know, but that's, that's bottom of the barrel. You're, you're summer gigs like that. That's what I've been doing. I know, but that's bottom of the barrel. You're worth more than that. I'm trying to get you fired up a little bit. I'm trying to be your cheerleader in the locker room. Because if you head out on the field acting like you are right now,

you're gonna get beat by 100. You gotta come out of that locker room like you're gonna destroy the other team. And you need to come out of this thing going, I'm gonna actually do what George told me to do and that's just the beginning and I'm gonna absolutely win. And if I gotta move, I'm gonna move.

But you need to happen to life, Jill. I think too much of life is happening to you. I guess I just don't know what to do in the summer then because that's kind of crazy to me that much. I know you don't, because you have to look for it. You have to look for it. You gotta get your head up. You gotta start looking.

You gotta start talking to everybody. Hey, I'm a teacher. This is the skill set I've got, George. I've done this for this many years. I'm looking for this kind of work here. And you gotta look for it. You cannot find it if you don't look for it. And looking for it means, I believe if I look for it, that I'll see it.

Come on, Jill, let's go. Happen to life a little bit here. Coach Ken. Man, I need to bang the locker on, Jill, let's go. Happen to life a little bit here. Coach Ken. Man, I need to bang the locker room, blow a whistle or something. Hey guys, I'm super excited to announce that two of the goats of sticking to a budget have finally teamed up.

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Lisa from Milwaukee is up next. Lisa, how can we help? Hi, George and Ken. Thank you so much for taking my call you've done my question a little bit of a background on i started a business in twenty twenty three and it took a little time to get it from ramped up so i didn't make that much in twenty twenty three onto the taxes that i paid were were relatively low uh... but in twenty twenty four i did uh... much better. Um, and I, as I was, uh, giving all my documents to my tax preparer, I said, Oh my gosh, I'm sick.

I can just imagine how much I'm going to have to pay in taxes. Is there anything I can do to reduce my tax bill? Um, I'm in real estate. And I said, aside from purchasing properties, I'm not in that, um, in that mode yet. Um, and he said that, um, I could, I have a Roth, a self-directed Roth IRA, but that won't reduce my tax bill. He said I could open a traditional IRA, a SEP, a simple IRA, or a self-directed 401k, but at this point, my only option is a traditional IRA

for 2024 tax benefits. Is it beneficial for somebody self-employed to open a traditional IRA for tax benefits. Is it beneficial for somebody's self-employed to open a traditional IRA for tax benefits? Well, I mean, you're just switching it up. So with the Roth side, you're paying taxes now and then never again. And so what you're saying is, well, I'd rather not pay the taxes now,

but one day when you go to withdraw that money, you're gonna pay taxes on it. So there's no way to really avoid the tax man. You're gonna do it on either side. And I would, if I'm in your shoes, I would just stick with the Roth. I don't like doing anything for the tax benefit. I know it stinks to pay taxes,

but it's just part of making an income in America today. And so I would do any other thing you can do to reduce your taxable income through deductions and credits, but I don't think it's worth switching to the traditional side, just to save a little bit on taxes. Should I have an additional retirement account besides the self-directed Roth IRA for any, because my expenses for my business, my startup expenses, I had some more, but now my expenses are very minimal. So the amount of deductions that I have

are very small. So the only thing that he said that could reduce is either purchasing real estate which again isn't my motive. You're out of options as far as tax advantage retirement accounts. Okay. Do you have a health insurance plan? Um I'm through marketplace. I was diagnosed with cancer four years ago, so my health insurance is astronomical. Is it a high deductible plan or is it PPO? Do you know what it is? I believe it's HMO, but based on my income,

it's $600 a month, essentially. Got it. I was asking because if you have a high deductible healthcare plan, you can do an HSA, which is a health savings account, and you can actually invest through there with tax advantages, So it kind of becomes a bonus retirement account in that way, you know, outside of your Roth IRA. Beyond that, beyond the HSA, a Roth IRA, if you have no other options that you can do, you could always go to a taxable brokerage account,

non-retirement and just dump money in there into some S&P index funds. Okay. And that would give me a tax advantage then? It wouldn't give you a tax advantage, but it's another way to invest if you're not hitting that 15%. Are you debt-free with an emergency fund currently? So for two years when I was healing cancer, I didn't work at all.

So I was living off of credit cards. So in 2023, I paid off about 10,000. And this past year, I paid off the remaining 50, off of credit cards. So in 2023, I paid off about 10,000. And this past year, I paid off the remaining 50,000 in credit cards. Wow, way to go. Well, I should feel great, right? But because my income is still unpredictable, it really took everything.

Besides, I had enough money. I didn't know how much I was gonna pay in taxes, but. Where are you at now? In terms of- Your debt. Debt. So no credit card. I do have about 17,000 remaining on a student loan,

which I was hoping to tackle this year. Okay. If I was in your shoes, and again, you called our show, this is the way we do it, I would pause all investing, you know this, and knock out the student loans, get an emergency fund, because right now you are skating on some thin ice.

All it takes is one more emergency and you're back to using the credit cards. It's gonna move you backwards and you're not gonna be able to build wealth because you're gonna be dealing with all these ankle biter things. And so getting rid of that debt, getting the emergency fund in place

should be your A1 before you get to investing. Okay. I thought you would say that, but I wanted confirmation. There you go. You got it, we are here for you, Lisa. We but I wanted confirmation. There you go. You got it. We are here for you, Lisa. We're rooting for you. He's consistent.

I'm telling you, the clock and George Campbell got the same consistency. I'm ticking. They're going to hit the mark. Speaking of taxes, you know, we are up against that favorite time of year for most Americans. Got to get those taxes in. And that sound right there in my hands, I've got some myths about taxes I wanna run by you, George. You ready?

Myth number one, a tax refund is free money. What say you, George? That's a real gear grinder for me, Ken. Oh, okay, you need a little Greece. I don't understand, people think, wow, the government blessed me with free money. That's not how it works. You just overpaid your taxes throughout the year

and the government says, hey, you overpaid, here's a little bit of money back. So here's what you should do instead. Adjust your withholdings to keep more of your earnings during the year. Get to as close to zero as possible. You don't want to owe too much. You don't want to get refunded too much. All right. Myth number two. Higher tax brackets are bad. Oh boy. This one's hilarious. People go, well, Ken, I don't wanna make, I don't wanna get a raise. I'm gonna owe more in taxes. I'm gonna get kicked into another bracket.

Dumbest thing I've ever heard. That's not how it actually works. Only the income within each bracket is taxed at that bracket's rate. So it's this much up to 10%, then the next batch is up to 12%. So you're not actually paying 22% on all of your money. That's right.

There's marginal and effective. So you gotta look at that. Earning more increases your income, not the overall tax rate. All right. Myth number three, keeping debt for tax deductions is beneficial. Oh boy.

You're just trying to rile me up. It burns your biscuits, doesn't it? Yeah, paying interest in order to gain a tax deduction is very counterproductive. Your tax advisor is suggesting you do this, you should fire them. It is way better to pay off your debt, save on the interest payments, and free up that income. Never do anything just for the tax deduction. All right. Myth number four. The team hates the

paper crinkle. They hate it so much. But I think the audience loves it. America said yes. They do. Pay by tax day or don't pay at all. That's a funny one. So they go, well, I can't pay what I owe, so I might as well just not file at all. Yeah. That's how you go to jail. That's not a good plan. So the penalty for not filing a return or filing late can be up to 10 times as much for the penalty

for not paying on time. So you still have to file the return by the regular deadline, pay as much as you can by the deadline, and then set up a payment plan with the IRS for the rest that you owe. But you gotta file by the deadline, and then set up a payment plan with the IRS for the rest that you owe. But you gotta file by the deadline. That's right, unless you look good in stripes, or orange. Hey, that's not me.

Okay, neither one of us. Not flatterers. Neither one of us. And finally, myth number five, you're not smart enough to do your own taxes. Now that one, the jury's out on that one. Well now I'm not. So in this situation, that would be reality, James. I would go to jail accidentally

because I'm just bad with details. That's fair. Well here's the good news. You're probably better off filing your own taxes if you have a simple tax situation. So if you're a normal W-2 employee to never have a lot of life changes this year, then it's fine.

You can use Ramsey Smart Tax and file on your own. But if you have a more complicated tax situation, you own a business, you bought a home, life changes this year, then it's fine. You can use Ramsey SmartTax and file on your own. But if you have a more complicated tax situation, you own a business, you bought a home, you had a baby, you're Ken Coleman, you wanna consider connecting with a tax professional. Yeah, that's right. Regardless of all this, you gotta file by April 15th. The deadline is upon us.

And if you're ready to file online, be sure to check out Ramsey SmartTax. It's tax software that's easy to navigate. It is foolproof. Even Ken Coleman could do it. That is true. Go to ramsysolutions.com slash smart tax or click the link in the description

if you're on YouTube or podcast. All right, so I'm glad we went through that. Painless. It is. And so many people make bad decisions around taxes. The one that kills me is the idea that I'm gonna go spend money in order to get a little tax relief. Oh. You know, we hear that one a lot. That didn't make the myths. But you know the idea is well, I've got a business.

We use a lot of business owners. So I'm going to go out and spend a bunch of money in order to look. So I can deduct it as an expense. Yeah. As opposed to saving it or investing it. It's not a dollar for dollar deduction. Doesn't that drive you crazy? Yeah. Well, because this stuff is all over TikTok and social media. That's why I bring it up. To let you just swat it. It's not a dollar for dollar. Doesn't that drive you crazy? Yeah. Well, that because and this stuff is all over TikTok and social media. That's why I bring it up to let you just swat it. They're going, hey, let me go buy it. Let me go buy a G wagon so that I can write it off. Right. As if the write-off is better than saving the money. Where does that come from? Where does this notion come from? Well, it gets a lot of clicks on social media and then people go, well, it makes sense. And then your tax pro is telling you the same thing because it's what you want to hear.

You want to go spend money? Great. Just write it off. It's not a dollar for dollar deduction and it's unwise to spend money that you don't need to be spending. That's not how a successful business is run. Amazing how that works. More money.

God, really. Who knew you'd rile me up about tax myths on a Friday? It's the lasting American needs right now. Well, it's to be fair George You're so even keel that most of Americans can't tell when you're raging versus when you're relaxing and I envy that my friend You're as steady as they come. Thank you. Steady Eddie. They would have called you back in the day I'll take that never heard that before. No, you know, it's like I'm not even back into the way back back every once in a while Yeah, I'm still in touch with the way back back every once in a while. Yeah, I'm still in touch with the 50s. Back when you can hit a vending machine and make

some pop just roll out. Pop? Yeah, that's what they call it. I'm gonna get you a can of pop. Thank you. Hey, when you're gazelle intense, you sell so much stuff the kids think they're next. But when you've gotten rid of all you can, save money by switching your cell phone plan to Boost Mobile. It's just $25 a month for unlimited talk, text, and data forever. Boost is a major nationwide network that offers reliable 5G service. And here's my favorite part, transparent pricing. There's no hidden fees, no contracts, and there's a 30-day money-back guarantee, which means no risk. Go to boostmobile.com slash Ramsey

to switch today. That's boostmobile.com slash Ramsey. Uche joins us next in Alexandria, Washington, it says here. All right, I'm familiar with the Virginia. I didn't know. All right, I'm familiar with the Virginia. I didn't know. All right, Uche, how can we help? Hi, so I was calling mostly because I needed some kind of coaching and advice. I've just been in this country since 2022, so I don't know much about the credit. That being said, I do have a credit card debt of $10,000 and I have my car loan that I'm still paying and I'm currently in school.

So I have about, I think, not I think, it's $8,000 on student loans. And right now I was working to see how I can manage it so it doesn't go out of hand because already it's quite a lot. I can make payments on my credit card. However, I came across national debt relief and after I heard, you know, spoke with one of their consultants, they said they can negotiate that and, um, bring it down to 50%. And obviously I'm going to have to pay their fees in total instead of paying

$5,000, I'm'm gonna pay $8,400. Now, it all sounds good, but I have no idea for anyone to tell me how that affects me. If I should just go ahead and pay off the card myself, or if I can work with them on that. You've got George. I'm so glad you called. You did not sign anything with these people, did you?

Not yet. Good. Please don't. Please run so far away that they can't see you anymore. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to.

You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to.

You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to.

You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. You don't have to. Here's what actually happens behind the scenes. They tell you to stop paying on all your debts, stop paying your creditors, let your accounts go to collections, which tanks your financial world. Then instead of sending your payments to the debtors, you send it to them, right? They put it in an account and they hold it for you

and they wait months, sometimes years, to negotiate a lower lump sum and they charge you for it. That's the fees you're talking about. So you pay thousands of dollars for someone else to attempt to fix your financial mess while tanking your financial world, right? Now the creditors, they don't have to do any of this. They can still sue you. They could take you to court. And even if they do settle a debt for less than you owe, the IRS considers the forgiven amount as taxable income. So you still have to pay taxes on that difference.

And so instead of doing the shortcut, I believe in Uche and your ability to pay off this debt on your own without this shortcut that's going to really harm you in the long run. So here's what you do instead. Pause everything you're doing in your financial world and cover your four walls. Can you cover your food, utilities, transportation,

housing with your current income? Well, yes. Yes, I can, I definitely can. Cause I already use their Everdollard account. The only part is I always feel like I'm on the edge of not being able to get other personal items or let's say I run out of something during the week and like, I don't know if I have enough for next.

So I was trying to see how I can not live on that edge. That's your four walls. So you need enough to cover the basics, nothing more. And then beyond that, we need to make the minimum payments on our debts. Can you do all of that right now? I can definitely work towards the minimum payments. Okay. And then do you have anything leftover

to throw at your smallest debt? No. Beyond your basic bill. So what is your income right now? I currently have $3,697 after taxes every month. Okay, are you doing any investing right now? I have not started it, but I started putting out about $21 to see if I can save with those.

I just have it in a savings account for now, just because I like said, I'm always leaving on the edge. So it's like, maybe I can just put whatever small I can find. So how much do you have in savings? Do you have $1,000 saved yet? No, I don't have a ton of savings. Okay, so that is your A1.

You're gonna cover your four walls, nothing more, cover all of your minimum payments, any extra dollars need to go to a savings account until you have a thousand. That's gonna help you cover those ankle biters like you're mentioning. Okay. Then once you have a thousand,

you're gonna move on to the debt snowball. That's baby step two, list out your smallest debt all the way to the largest debt and just attack the little one with a vengeance while you make minimum payments on the rest. So what is the smallest debt if you listed them all out? The smallest one would definitely be the credit card. It's supposed to be school loans, but they're not due yet.

And I'm still in school, I have 8,000. So I have not contacted them on how to pay it back. Okay. So whatever I have to pay right now is just my credit card. And it's one credit card that I... Are you still using that credit card? No, I have not used it in the last two months. Good.

I've been working with my own, cause I'm trying to see what is possible. And that's where I'm at right now. What is your relationship from the amount of hours you're working to schooling? Well, it's quite tight. I work full-time and I go to school full-time. I go to school online. Okay. And then I'm working full-time because I do not want to have to do everything on credit.

Sure. What are you going to school for? Well, bachelor's, semesters in psychology and trying to be a behavior analyst. Okay. How much more do you have schooling-wise? One and a half to two years, depending if I don't have any gap. I'm going to throw this out here because I want to hear what George's take is, and I'm not actually recommending this. I'm just wondering if we don't think about pausing school for a season to get through this. You're so tight right now and the degree will still be there and I just wonder if it's

not a good idea for you to spend, let's say you spent half the amount of time that you're in school working an extra job just for a short season to knock this debt out, get an emergency fund in place, and then finish. It just feels like you're trying to do a lot right now and you don't have to do the school. I know you'll want to and I'm not in any way trying to discourage that goal, but I think that there's a season for everything and it feels like trying to get out of debt and get your life set up financially and be in school full-time is not the best play. George, you just... Yeah, well you're making decent

money right now. What are you doing full-time? Well, I am a behavior therapist. So you're doing all of this for like a 10 grand raise? What's the upside at the end of this? Um, it will be about 20 grand raise. Well, that's the minimum 20 grand raise from what I already am. I would pause right now. I'm even more bullish on this idea. Yeah, would they help you cash flow this?

Your employer? Will they help? Well, no. The most they did was put me on salary because typically you get it hourly pay. So when I had reached out to them and I said, hey, this is what I'm doing, because it was my supervisor that I spoke to. Like I said, I came here very without information. So when I had thought about going to school, they were like, oh, you can go to school. I was like, I don't have the money. And they're like, Oh, you don't have to pay it right now. Usually you spend a lot of money and do this. So I was already in this and

I started understanding this system a little better. And I'm like, okay, now I need help with this because we threw it out there. Like that's just how, you know, it's that easy. Of course. If it's that easy, everybody would do it. Nothing about your life is easy right now. Nothing. I know. I know it's sincerely, I've thought about pausing school, but I was doing it before. Nothing about your life is easy right now. Nothing. I know. I know it's sincerely, I've thought about pausing school,

but I keep feeling that pressure in me. Like, what are you gonna do? You're not gonna lose the credits, right? No, no. Why do you wanna delay it? Can you pick up where you left off? Six months, a year from now? Yeah. Okay. Yes, you can. I know, I feel like it is,

cause like where I'm from, my culture, like going to school and becoming something. There's the real reason. But Uche. And I cannot. Uche, you are, I'm not saying drop out. I'm saying pause. The pressure you're feeling from the finances

is way more than the pressure you're gonna feel from back home or anything else. And you're not quitting. I'm not suggesting you quit. I'm saying pause. Do they pay your bills? No. Your family that's putting all the pressure on you? No. I don't think they get a vote at this point. They're not experiencing the stress that you are trying to balance all of this at once. Imagine, Uche, if I can cast vision, imagine getting this debt paid

off the way George instructed you and you do this, you press pause and then you get set up and you have a strong financial base, you're debt free, you gotta emergency fund and now we start cash flowing our way through school. Think about how much less stress you'll have in your life as you finish. That's the vision. You're actually gonna feel like you got a raise

because if you do it this way, on the track you're on, you're gonna be throwing your entire raise at more debt. Yeah. Because you're gonna keep racking it up. Yeah, George, I'm bullish on this idea. I'm for applausing. Yeah, I like that plan. And maybe if the car, I don't know how much the car is worth, but you may want to sell that to get out of it and downsize for now. If you got public transportation, you're in the DC area, so it may be possible. Yeah. Good hour here on The Ramsey Show. More coming up.

This is The Ramsey Show where America congregates to have a conversation about money, your work, and your relationships. 888-825-5225 is the phone number. 888-825-5225. I'm Ken Coleman. I'm joined by the Natalie attired Shack-It Man, George Campbell, ladies and gentlemen. Natalie? That's a word you don't hear a lot. I'm not sure it's a word. I'm gonna have to check that up. Check that out, rather. I said check that up. Is Natalie, it's Natty attire? Yeah, it means is stylish or tidy.

You like that. Nothing describes it means a stylish or tidy you like that Nothing describes you better than stylish and made that you're so happy right now Look at the smile on your face can't always teaches me a new word on this show I hope you guys are learning along with me. I try George is gonna lead out on coaching you on what to do with your money I'm gonna help coach you on how to make more of your Make more money rather so that you can win and win big. Let's go to Emily in Philadelphia. Emily, how can we help today? Hey guys, how's it going? Well, we're having a blast.

What's going on with you? Good. Well, I called in a few years ago, and at that time I was making about 30 grand a year, and it took me a little bit. But since then, I have taken Dave's advice and got a more advanced license in my field. So these days, I basically quadrupled my income.

Woo! Come on, Emily! Way to go! Let's go! Emily, the studio audience is clapping for you right now. You can't see this, but they're so excited for you. Oh, that's awesome. Well, I really appreciate it. It's been quite the journey, but I'm glad I'm here now. In addition to that, since then I've gotten married and my husband is a veteran.

He's currently in school for his undergraduate degree. So, of course, we get benefits that basically just cover our housing. We live in a pretty expensive area. So, um, all of his income basically goes to helping pay for the mortgage, which makes me, uh, the sole earner for all of the other things, especially since he's planning to go to law school once he finishes his undergrad. So we're in a place now where we're really eager to

have our first child within the next year or two, uh, which brings me to the issue. So the issue is that we currently have about 120,000 in non mortgage debt. Um, and I'm really torn between two things here. I don't know whether to just keep plugging away at the baby steps, um, and pay down my hour debt. It's debt that I brought into the relationship, but pay down our debt really aggressively or to start saving up for parental leave since I'm partly self-employed and partly employed

by a company that doesn't have a parental leave policy in place. So I just want to make sure that I can take time off without worrying too much about our finances. But I also wanna be smart about the debt. So we've just been talking about this a lot lately and I'm hoping you guys can help steer the direction here. Yeah, what do you make? I make about 128 a year.

Awesome. And what is the total take-home pay you guys are bringing in every month? It's right around 10,000. Okay. And what are your bills every month? I have about a thousand in personal loans, about 5,700 in credit card debt, $14,000 left on the car, and then just under $100,000 in student loans. And then our mortgage is about $2,400 a month.

So those are the big things. How much money would you need to have set aside or want to have set aside to offset the parental leave expenses? I think I would feel super comfortable if we had 20,000 set aside. That's what would make me feel really good to know that every bill that needs to be paid is getting paid. We've got a little bit extra for things that might pop up. Okay. You know, any unexpected medical bills. I do thankfully have health insurance, but-

Good. Babies are expensive, so just trying to cover all my bases. How much is left over right now? Once you cover all of your basic bills, minimum payments on the debts, how much extra is there? It winds up not feeling like a ton. I wanna say like a ballpark of maybe a thousand a month. You're telling me you guys

were spending $9,000 a month? I think so. And I think part of the, well, maybe not problem, but part of what we've been doing is paying down on previous personal loans that were really high. So we've been paying on those really aggressively. If we were to just stop paying all the extra on the debt,

that would be significantly less going out every month. I mean, I think we'd probably have four or 5,000 left over. Okay, that's good news. So here, if I'm in your shoes, here's what I would do. Once you're actually pregnant, it's fine to go into stork mode and just stack up cash. And two grand a month for the nine months of pregnancy, you'll have 18 grand sitting in that one account.

Okay. And so that'll get you by for those months. Yeah, that sounds easy. It's so easy when you say it. Yeah, that's just the basic math. What I wouldn't do is go, well, we don't know, so let's just start saving now and not paying on our debts and just make minimum payments. I would continue the debt't do is go, well, we don't know, so let's just start saving now and not paying on our debts and just make minimum payments.

I would continue the debt snowball until we go, all right, game on, nine months until baby. Then I would pause and stack up cash. Once you and baby are home safe, you're done with leave, you've got the money left over, start chunking out at the debt and push play on the debt snowball. Okay, yeah, I knew that.

Yeah, and real quick question, what is your hubs getting his degree in? He's studying sociology right now, although the plan again is for him to go to law school and then probably commission as an officer back into the military. Yeah, as a part of this plan I always like to throw something out for people to think about. I'm not suggesting that he do this or that you all do this, but I would sit down and talk about it. I would entertain what a gap could look like between his undergrad and law school. There is this drive in America. I don't see it anywhere else. It is such an American cultural pressure to, I got to knock

it all out as fast as I can, I'm gonna slog through it, I'm gonna come out on the other side with all these degrees, and then you're saying, he may actually go into the military. It didn't sound like he needs a law degree to do that. It doesn't, and so especially with that little wrinkle you threw at me, why not go work for a year or two, and again, kind of bring in some more income,

and let's fast forward our financial progress. And law school is always going to be there. The other thing that I would recommend is that he work really hard on getting a strong LSAT score because we know for a fact, I've proven this over and over again, you can do some research to check me on this because I'm right.

But there are a lot of smaller, lesser known law schools that will give your husband a full ride if he gets a very high LSAT score. So these are things to be thinking about as opposed to just going through the motions of what we're gonna grit our teeth and stay on one income, and especially if baby's there now, I would just have a conversation about that. That's all I'm suggesting. Yeah, yeah, I think that's really fair. And I appreciate all of the advice and your time. Thank you so much.

Yeah, you bet, appreciate the call. And look at the basic napkin math on this too, Emily. Five grand a month thrown at this debt, you're done in two years. Yeah. It's 120 grand, it's a lot, but you just told me you could free up four to five grand if you guys got intentional, got on a budget.

And so that's my goal for you guys is two years. Now this is aside from if you get pregnant. Even easier by the way, George, if his income goes up. Boom, now it's like 18 months. And that's why I'm presenting the idea of a pause between graduate school, especially when you're in debt. Get out of debt, George, is my play. Sometimes you gotta hit pause to move forward.

Yeah, yeah, I like that. Very good. Well, George and I will continue to talk that philosophy and, you know, very Socratic. So I like that, it's very good. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession?

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and control you need to make quick decisions. NetSuite's real-time insights and forecasting 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. All right, time for our question of the day,

brought to you by our friends at YRefi. A little tongue twister. YRefi, wow. Freudian slip there, I think. If you've got defaulted private student loans keeping you up at night, YRefi can help you lower your payments and your interest rate.

Visit yrefi.com slash Ramsey and start resting easier. That's the letter y-r-e-f-y.com slash Ramsey and start resting easier. That's the letter Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states. Today's question comes from Marissa in Oregon. My husband and I are working hard to pay off our debt. We set our budget each month and try to stay with it. Our problem is that we have way too many auto withdrawals coming out of our accounts.

I started a calendar to track our finances, but that doesn't seem to help. What advice do you have regarding budgeting for scheduled withdrawals coming out of our accounts. I started a calendar to track our finances, but that doesn't seem to help. What advice do you have regarding budgeting for scheduled withdrawals? Oh my goodness. I don't know that I've ever seen a question more teed up for you. I think Ken fell asleep while I was,

my second reference of withdrawals. He was like, I'm losing it. Okay, this is actually a good question. It's a really good question. It's very tactical, but I think this will help a lot of people out there who are also struggling with this. So when you have auto withdrawals, they're on auto pay,

the electric bill is gonna come out on the 17th every single month. So you say that you're setting your budget. I don't know what budgeting method you're using. You didn't mention that. I personally use the Every Dollar Budgeting app. You can jump on there and use that for free, get it in the app store.

And what I love about this is that you can set the due dates with each item in the budget, each transaction, and you can have reminders in there. And so one thing you can do is with the premium version, there's a paycheck planning tool where you can see exactly when you're gonna run out of money based on when those bills are coming out. And then the process would be call the utility company, get online,

and you can change the payment date within a certain window and to say, hey, I need this to come out on the 16th instead of the 14th, so that it can come after the next paycheck and not before. And that will help you over time. And it sounds like you guys are also, you're running it real tight right now. I would keep a buffer of a hundred bucks, 200 bucks,

300 bucks in your checking account, so that you're not running up to zero and overdrafting. That's what you want to avoid here. So doing all of that will help and over time it's going to get easier as you understand when these bills are coming out. But doing that every dollar budget is really going to help you understand paycheck one hits here, here's all the bills that come after it. Paycheck two hits here, here's all the bills that come after it. And over time, you'll get it dialed in and you'll start making that progress.

Speaking of... It's the only way to do it. ...every dollar, we have multiple free trainings. These are webinars that are absolutely free for you this month. You can live, excuse me, join in on a live webinar and we walk you through how to break that paycheck to paycheck cycle in 90 days step-by-step like George was talking through the Every Dollar Budget app. Over 160,000 people have signed up already. Join it. It's free. Go to everydollar.com slash webinar, everydollar.com slash webinar. Make in Georgia is where Alan is waiting for us. Alan, how can we help today?

Hi, I just had a question for you guys. I needed to know if my plan, I know nothing about really you guys, is just I'm an idiot or how much of it is I'm an idiot to try to get everything straightened out financially. Well, don't beat yourself up too much. You don't know us and yet you decided to call us. So somebody close to you said, Alan call these guys. Am I getting this right? Yes, you guys had been referenced to me before by a co-worker over a year ago. I wrote it off as nothing and then was like, oh boy, maybe there's something to it. That tells us actually how desperate you are. You're like, fine, a year later. A year later, I'm desperate, I'm going to call these clowns and see if they're going

to help me. We'll do our best, Alan. We will do our best. Give us a little bit more detail here on the real problem. All right, so me and my wife are pregnant. Well, I'm not, she is. Thanks for clarifying that. Pretty soon.

I talked to try to file bankruptcy that cost over two grand, so I didn't do it. They estimated me at about $12,000 in debt and that's including her car. I don't have one You try to file bankruptcy over 12 grand Yeah Now I told you I don't know what I'm doing how much of an idiot I am. I don't know. No, let's stop I'll tell you this bankruptcy is not your answer Yeah, you guys are the solution to this problem. And so we're gonna get you out of it. You're working full-time Yes, my hours vary and so does my paycheck.

It's highly inconsistent. What kind of work are you doing? Geotechnical field technician. That sounds really fancy. What does that mean? Summed up, construction needs testing done before they can build or any of that. I run a bunch of tests. But that's not a consistent 40-hour a week gig?

Sometimes it can be just below 40 hours. I'll make less than $500. Sometimes I'm working almost 60 hours, still make less than $800. I'm so confused. I never know what my check's going to be. Is it an hourly rate? Who's setting this? It's 15 an hour.

Okay, I think you need to be making more money doing something this. Yeah, better job, better job. So let's just check that off the list. My boss told me today, sorry, that he was looking to give me a raise soon, but has no idea how much or how little it'll be. Does that not like, that just makes my head hurt listening to that entire sentence. Right. But I'd come back to them because we had moved back up to Georgia from

Florida, cause that was a bust, uh, at every avenue. And they were the only place I could find a, to go back to work for. Um, I did get my real estate license in Florida and I got the paperwork printed out to transfer it up here. So my plan is to try to get what time I have not working because I could work through the weekend at a moment's notice. You get told at the end of the day whether you got to be at work. Hey, Allen, Allen, Allen, Allen, Allen, Allen. You're making too many excuses as to why you're stuck. This whole, I'm-

That's where my plan comes in is I wanna get into the real estate and find a secondary gig, put all my time into it. Dude, that is a luxury. You need money now. Yeah. Not, I hope to make a commission seven months from now to sell my first house. Yeah. I'd be working 60 hours a week doing retail and you'll make more. Yeah. That's absolutely right. You can be making $20 an hour stock and

shelves somewhere at this point. You've got to get really intentional. This whole I'm an idiot act, it's a function of, if I can be very straight with you, you're making a lot of excuses. And George is right, you presented us with $12,000, which in the grand scheme of things, my friend, is not a lot of money. And George is right, you presented us with $12,000, which in the grand scheme of things, my friend, is not a lot of money to pay off if you have intentionality. In other words, a much better paying job, and then you do what George tells you to do to pay it off. The debt mathematically is not your issue here. Absolutely. I understand. I just started getting real with these things like a wake up this week.

So I knew I had nothing together. All right. Well, listen to George here. I think here's how we pay for what happened. You got a baby on the way and it was a reality check. That's right. And you went, Oh my goodness, I got to be like an adult all of a sudden. Right. And your wife is feeling the stress too. Not so much. Is she currently working? She doesn't care about money. Your wife is feeling the stress too. Not so much. Is she currently working? She doesn't care about money.

She does when she doesn't have it and she can't feed her baby. She's got to start caring. Walking through how he gets out of this. Listen, Alan paid attention like you've never paid attention to anything else in your life. You need income ASAP. The debt, I'm guessing the minimum payment is a few hundred bucks? Yes, sir. Okay. And you owe 12 grand and it's a car? It's a couple of things. A credit card, her car, a lawyer from a previous divorce,

that's only two grand, didn't even use them. What's the car worth and what do you owe on it? I believe she said the car is worth like 20 something, 30. And she, it should be paid off next year. No, what do you owe on the car? I think like seven. You need to sell that car today. It's worth 30 grand and you owe seven? I think that's what she said last time I asked her about it.

So you can make 23 grand from this sale, use that to pay off the rest of your debts and still have money left over to buy another car used in cash. You hear that? You just solved the problem right there, Alan. And then the next step is let's get our income up and start stacking up cash that we have some

when the baby's here. You guys are gonna be debt free with an emergency fund by the time this baby arrives into this world. Mark my words. We're gonna send you Financial Peace University, you and your wife sit down, watch all nine lessons and then you will be on the Ramsey train on the path to building wealth. And Alan, let's change the label. You're not an idiot.

You're a good man. You're a husband. You're a father. You're a hustler. Pick a label, own it and go happen to this situation. George just gave you the game plan. I'll be listing that car in the next five minutes. Statistics show that half of Americans don't have enough life insurance, or they don't

have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys, I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance

is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them. Me too. And they don't know what to do next.

Terrifying. You're going to have a crisis here. You know, you got two options while to them, and they don't know what to do next. Terrifying. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. It's saying, I love you to your family. Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. In the lobby of our Ramsey Solutions headquarters here, just across the studio here,

through the glass on the debt-free stages. Rachel, welcome Rachel. Hi, thanks for having me. You bet, where are you from? I'm from Dallas, Texas. All right, and you're here to do your debt-free scream, I'm told? I am, yes. So exciting, okay, give us the data here.

How much debt did you pay off? I paid off $65,000. Okay, and how long? It took 14 months. All right, way to go. And what was your range of income during that time? It started at about 105, up to 115. Nice, what do you do for a living?

I'm a director of revenue for a hospitality management company. Oh nice, and was the bump due to side work or just a raise at your job? It was mostly from starting a side hustle at a gym. No, you started a gym? Oh no, no. Oh, okay.

I'm sorry. I work at a gym. Okay, I was gonna say, that's quite the side hustle. That's impressive. I was about ready to be blown away. On a whim, started a gym. Yeah, fun stuff. All right, so take us back to 14 months ago

when you started this journey. What led to this? I had been with my boyfriend for a while, seriously dating, and we started to have deeper conversations about what we wanted our future to look like, and I just started to realize that the path I was going down was going one way, and the path I said I wanted to go down was another way, and something path I said I wanted to go down was another way,

and something needed to bridge that together. So, decided to get serious about paying off debt. It was a good time, no spouse, no kids, just a good time to hustle and lay a good financial foundation. Now, how'd you hear about what we're doing here? Started with my parents giving me FPU. Okay.

Right after I left college with six figures of debt. Oh boy. Wow. Good luck to you sweetie. Yeah, I gotta ask, I don't wanna belabor it or stay here too long, but when you had this conversation with the boyfriend and you said, I realized I was going down one path, I wanted to go another path,

did he come along for the journey or was he out? Oh yeah, no, he was so excited and definitely on board. Obviously our finances are not combined, but we hustled together. So he's still around? Oh yes, very much. You left us on a cliffhanger there. I know, okay, so he was supportive.

Yes he is. Shout out to Ryan. Shout out to Ryan, your good boyfriend, sounds like to me. Yeah, so was he on the debt-free journey too, or did he not have debt? He is, yeah, he's still on the ride. But. You beat him to it, so that's good.

Yeah, yeah. So what kind of debt was the 65? Oh, it was the All-American Variety Pack. I had student loans, multiple credit cards, auto loan, personal loan, and medical debt. Wow, good for you. Little potpourri of debt there. So what did it look like intensity-wise for you

when you jumped all in to knock this debt out? What were you doing? What cuts did you make? Give us a sense of what the journey was like. I think the biggest piece was writing a budget for the first time in my adult life. So that was a huge game changer and then really learned to track where my spending was going

and cut out all of the non-essentials. And I think another big piece for me was initially doing the numbers and finding an end date that I could focus on. You know, like if I can just stay in tents for 14 months and that really kind of helped just to see where the finish line was. I love that. So it wasn't just a never-ending journey. There was a destination and you know where it was. And so it's like you're going on a road trip, you know, the ETA. Yeah. And that's what that did for you. Having that goal set and going for it.

And did you stay on track the whole time? Did you exceed your goal? I met my goal. It was to pay it off by December 31st of 2024. And I hit it. Boom. I got a feeling that that's not abnormal for you. Are you one of those people that sets a goal

and goes and gets it? You're like a super achiever. 100%, yes. I love that. Where does that come from do you think? Oh, I'd say both my parents. I would say my mom's the analytical one and my dad was the creative mind, but both of them goal-driven. Yeah, and I got to point out for our audience the viewing audience can see this on YouTube if we can lock in, but Rachel,

you've got some customized jeans, which I'll be honest, normally I'm a little bit worried about, but I think you nailed those. Walk us through what's happening there. Thank you. These are, in case I forget why I'm here, death-free pants.

And how did you go about doing this? Is that hand-stitched, is embroidered? Yep, I just went to Goodwill, bought some jeans, and then I cut up and sewed another pair on top of these. No way! Wow. Did it yourself? Yeah. Did you self-teach, or were you already taught in the art of sewing?

I was taught by my mother when I was growing up. Way to go, mom. I think this could be your next side hustle. Maybe. Making personal finance-themed clothing. How much did the jeans cost at Goodwill? Eight bucks. Eight dollars, Jordan, that's your kind of jeans cost at Goodwill? Eight bucks. Eight dollars, George, that's your kind of jeans

right there. That's thrifty. That is thrifty. Wow. I love this so much. So what's next for you now? You're debt free, you're still young, you got time on your side. Yeah, I'm just enjoying life.

Obviously coming here was a exciting opportunity and have a few trips planned later this year and really just continue to save for the future. And we think Ryan's gonna finish his race soon, yes? When is he expected to be debt free, do we know? Sometime this year. Oh boy.

Do we think he's gonna pop the question? What are we talking about? We'll see. You don't know? It's not that serious yet. I like putting pressure on the young man George because he's not here. What if he popped up behind the wall?

No, that would be epic. That'd be good television. Look at her, she's already hyperventilating. He's not here. He's not here, I promise. He's actually not there. Sorry, Ray. George, look what you did to her.

I'm sorry. All right, so one of the questions we love to ask those who step on that stage, who have finished this journey, is what was the key for your particular journey to get debt free? What would you say that is? I think that the budget just played such a big role assigning every dollar a place

so that it didn't just disappear. And then for me, a little bit more personally, I would say just not feeling the need. I'm a people pleaser. And so it was very difficult to feel like I was letting people down by saying I couldn't do certain things or attend certain, you know, important moments in other people's lives.

And that was, that was tough, but. The weddings, the birthday parties, the girls trips. It had to be, hey, I'm on a journey. You guys know I'm going to become debt-free. Yeah. And now they're going to be asking you questions going, hey, tell me more about that plan you did. Because we make like the same money and I got all this debt and if it worked for you, could it work for me? Have you been encouraging friends now? Yeah, that's been a really cool

piece to this as well as seeing others that I've inspired to start this journey as well. And yeah, now I get to cheer them on. Speaking of being cheered on we see mom over there besides mom who else were some big cheerleaders for you on this journey? Oh my family I have some siblings back home in San Antonio and people from work obviously my boyfriend Ryan and that's awesome so fun. We got a little gift for you, a parting gift to every dollar premium subscriptions good for a year. You can use those. You can pass them along to one of the friends you're encouraging. And that's our parting gift for you joining us here in Nashville. Amazing. Thank you. And I think you've modeled this. I want to remind people as they're listening to

your story. It's so much easier to say no on the debt free journey. No to all the friends, no to all the invitations when you've already said yes to getting out of debt and yes to this process. You make that decision first, the no's become a lot easier. I'm just saying that for all recovering people pleasers like myself. I mean, that's so key.

Love your story, Rachel, and it can be done. What would you say to young people who think maybe it's not possible to pay off, excuse me, 65,000 in 14 months? It absolutely can't be done if you stay intentional and really just fight for the life you deserve and can be easy to see social media or society trying to serve you up what you think is a good life,

but just knowing what you want and staying true to that. Well, you did. You knew what you wanted and you stayed true to it. We're so proud of you. Thanks for sharing your story. All right, the moment has come, Rachel. You've worked so hard for this. Rachel from the Dallas, Texas area.

She paid off $65,000 in 14 months making $105,000 all the way up to 115 thousand Rachel You know what to do. Take it away. It's time for your debt-free scream Three two one. I'm dead free Folks I love it. She is debt-free and Normally have Mel Gibson screaming from so we need you to do your best Very good George as good as it gets all you need is some blue face bear it is Better I don't know. I think you did it better George

I might trade in my skinny jeans for some of those right there I want to see my rock good will and get yourself a pair of jeans for less than 10 bucks. How about that? That's what I want. That's your homework assignment this weekend George. I'll leave the embroidery to Rachel. Good choice. Good choice. When you go through a job loss or job change and lose your employer-sponsored health insurance, there's no better time to try Christian healthcare ministries. That's right. There's another option besides Cobra to take care of your family during that time. Because if you didn't know, the cost of Cobra has gone up a lot in the past few years. And CHM is an affordable, biblically based alternative to health insurance. So do your own research.

The CHM is a great option that's potentially a third of the price of Cobra. It's a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of over 11 billion dollars in medical bills since 1981. And the support you get from CHM goes beyond helping you pay for medical bills. Members become part of a family that prays for them when they have a medical event. Try getting that with COBRA. So if you're going through a job loss, life change, or just want to explore other options to save on healthcare, CHM might be perfect for you. CHM programs start as low as $98 a month, so find out more at chministries.org slash budget at chministries.org slash budget. All right, let's get to Doug,

who is joining us here in Nashville. Doug, how can we help? Hey guys, thanks for taking my call. I've got a question. I'm a hundred percent stumped on what to do. I'm currently in about $7,500 a month worth of mortgage debt. It's two mortgages. The first one's about 3,000, the second one's7,500 a month worth of mortgage debt. It's two more mortgages. The first one's about $3,000. The second one's $4,500. I live in the one is my primary residence. The other one I'm

holding on to it's renting out, but it's losing money every month. So I don't know whether I hold the property and wait for it to appreciate and just weather the loss or and take the tax deduction from it every year from the interest or do I look to sell the property and I won't recover what I put into it so I'm not going to be recovering my closing costs or any of my down payment I basically break even if I sell it I bought it at the height of the market the market you are the violinist on a Titanic man you're going hey we're gonna play until the ship goes down. Get off the ship, man. Get off your bleeding money.

You're giving George blood pressure issues, Doug. Just setting that up, George is having a reaction over here. I know, I know. But I look at it and I say, hey, you know, I'm saving a little bit maybe from the taxes. You're not, you're drowning. It's called a sunk cost fallacy.

I put money into this, I was hoping it was gonna work, take what you can get out of it and call it a stupid tax and move on with your life. You took on a lot of risk and it didn't pan out and that's okay, we've all done stupid stuff. I'm not here to beat you up, but I'm telling you, man, now is the time to get out. So do my calculations matter on this?

Because I've basically looked at, if I hold onto this property at a three or three and a half percent appreciation over the next three years, I can pull my money out. I can get what I put back into it. You're going to be calling us back saying, I'm doing even worse now. I thought it was going to work out. None of the calculations make sense. This is a third grade math problem. You are bleeding money every single month.

Get out while you can. It's only gonna get worse. I don't do anything to hang on to a stupid interest rate and it's only going to harm you in the long run to stay in this thing. Okay. I know you'll be sad to lose your interest rate, but at least you won't be bleeding money out

because you're losing money. Even if it was breaking even, it would still be a bad idea, but you're losing money on this thing every single month. What's your income right now? Income right now. I make a decent income. I bring home about 220 net Amazing and so this is not money you even need even if it was working out It's still not well, and I mean I think yeah thing is, I think with my higher income, I feel like,

hey, it's not that big of a bleed every month. And if I can make up this money in the long run and then sell it and get some of that, you know, that cash back that I put into it, so it doesn't hurt as bad as it probably looks to you guys, which is why I needed a little bit of clarity on it. Cause I really feel like I want to hold onto it, but- Well, as Dave Ramsey would say,

you can out-earn your stupidity for a long time. And so I get that you don't feel it as much in your budget because you're going, well, I got margin, but you're not running a charity here. If you want to run a charity, go start a charity. But you got into the real estate business to make money. And it's not worth hanging onto the appreciation. It's not worth hanging onto it for the interest rate.

I would just get out and next time you buy real estate, do it in cash and do some due diligence to make sure that it will ROI for you. Okay. And you'll be able to do that fast. Okay. I mean, are you debt free outside of these mortgages? Well, I have, so I have the mortgage of the course.

I have a vehicle and other than that, no, I actually use the debt snowball, paid off all my credit cards, paid off all my medical debt, paid off all my student loans, probably paid off about $80,000 worth of debt. Great. What's left on the car? And that's relatively new. So the car has, the truck has $35,000 left on it.

Okay. How quickly can you pay that off once you get rid of this house? Well, if I look at it, you know, I'm, so I'm currently contributing, and this goes into another question, I'm contributing to my savings plan through work You know, they match up to a certain percentage. I'm putting away into a high interest High yield savings account every month I could take that money stop it could have it paid off in a year because as it currently sits I'm about three thousand a month cash positive. Can I be honest Doug? I have nothing to do with. For a guy who makes $220, your plan sucks.

It's gonna take you a year to pay off 35 grand making $220? Yeah, I mean my monthly. My monthly. You're making 15 grand a month aren't you? Right now I have about 10. What's that? Are you making like 15 grand a month? Take home?

Yeah, about 16, 16.5 a month roughly. I mean basic math says you can get rid of this thing in a few months. 35 grand throw seven, eight grand at this thing get your expenses low. I think you've been living high on the hog for a long time now. Yeah I mean the income is I have been but the income hasn't always been there so I'm making up for all the pain and suffering that I inflicted on myself earlier on. I finally, yeah, exactly. And I finally kind of realized it.

You could be making 300 a year from now, and then you'd still have debt hanging around. There's no reason a guy as successful as you are is hanging on to any level of debt. And you can get rid of this car debt fast. I would pause investing and saving. You're gonna do that for like three months. I'm telling you, three, four months, you can get rid of this truck debt, be completely debt pause investing and saving. You're gonna do that for like three months. I'm telling you, three or four months,

you can get rid of this truck debt, be completely debt-free, free up the payment, get back to, you have an emergency fund in place? So I do, I have my retirement investments, of course. I've got about 25,000 in cash. Amazing. So you could be debt-free even faster. Yeah, do I take that?

Okay. You could liquidate most of that savings, throw it at the car, that the truck, and be done in, let's say, two months. 60 days, this truck is gone. Between your savings and your cashflow and selling this other property, you're gonna be in a really good place

four or five months from now if you follow this plan. Okay. And then you can save up and buy real estate real quick, making 220 with no payments in the world other than your mortgage, which is reasonable considering your income. Is it a 3000 mortgage on your primary? No, the primary is the 4500.

So, you know, yeah. And just of course, given the market, I mean, you know how it is here. So it's difficult. That's a hefty mortgage for sure but it's doable if you continue this trajectory. It was all part of the school system so um okay. You got this Doug. Well I appreciate that. Yeah there you go I I hope he follows your advice I think Doug's on the fence I really do I think he's trying to make it all work. Yeah and I got I got riled up because he's

too successful to stay in this mess in Quagmire doing 17 things at once. No question. It makes really good money. Yeah. No need to play this out the way it played out. But again, this is what happens when we do calculator psychology. Do you know what I mean?

We start going, well, if I wait three years, if I hold on to it, then I get, you know, and you start trying to calculate and justify a thought. Yeah. To try to bail yourself out as opposed to actually bailing yourself out. Yeah. Like you can't, you know this, George, you write about this in your book, Breaking Free from Broke, but people get into messes because they're trying to shortcut wealth, and then they stay in messes longer because they're trying to shortcut their way out of it. It feels like we got too many shortcuts. And this was, as I was just sitting here listening,

he's trying to shortcut everything. Am I right? Yeah, I was getting riled up and Ken, thank you for just peeling back some layers. Somebody had to be the voice of reason over here. Speaking of, I got a clip I want you to react to real quick before this hour is up. I think you're gonna have a really good take on this. Can we play it James? Okay.

Here we go, let's go. Oh no. This is me and Jade at 80s night on the Ramsey cruise. This is a core memory for me now. I did not know this was... so now Jade and I are both attempting to warm up. You'll notice she's warmer than I am. I look very stiff and uncomfortable I'm it's kind of a weekend at Bernie's vibe you get going on It almost looks like a cadaver that's being I want you all to listen in you hear that cackling woman That's my wife. She thinks this is funny Audience of one now. This is all ad-lib watch this move. There goes the fish hook. There I am

Oh my goodness Jade has caught the tuna. Watch the slap. Oh man. If you weren't watching that on YouTube or wherever, you got to get that on video. You can't just listen. So I hope that convinces people to tune in. And I got to say, Ken, you have some moves and that's generous. I was going to say that's one way to describe them. There's no moves at all. I didn't want to encourage it, but I just thought this is too good. Well, I feel like I should give some context to this. I did not set out James for that to happen. To win a dance battle?

No, no. I was tagging along with Jade Warshaw and my wife Stacey. They were Thelma and Louise, and I'm just, you know, hanging around. And all of a sudden Michael Reddish, our dear friend, he's on the mic. He goes, all right we've got two Ramsey personalities here let's get Ken Coleman, Jade Warchild on the dance floor for a dance-off. At which point I was already defeated. Jade's got more soul in her pinky finger than I do in my entire body. Amen. I'm just glad that we were under maritime law because you could have gone to jail for what you did on that dance floor. By the way, that's a

shortened version of the video, the full video. I won it because, James, I dropped down and did three push-ups with a clap. So when I came up, I was able to clap, and that won the crowd over with my physical fitness. That's too hot for TV. We can't even air that. You doing a push-up. It's too much for the young ones to see.

Put the women and children to bed. This is The Ramsey Show, where America hangs out to talk about their life, their money, their profession, and their relationships. 888-825-5225 is the phone number. I'm Ken Coleman, joined by George Campbell. Thrilled to have you all with us. Michael's going to start us off in Phoenix, Arizona. Michael, how can we help today?

Hey, guys. Thanks for taking my call. I appreciate it. You bet. What's going on? So I was pretty fortunate at my last position, the last job I had, that by the time I left there, they had gifted me quite a bit of stock. At the time it wasn't too much, but over the last 10 years or so, it's been going up quite a bit. In the last three years, it's tripled in value. Whoa. It's to the point now that I could sell a significant portion of it and pay off my last remaining debt.

I'm on baby step number six. The only thing I have is my house. I could sell 70% of this to pay that off and become completely debt free, but over the last three years it's gone up so fast so much and I think it's going to continue. I still have friends that work for the company. Oh man, you should go to Vegas. They do a lot of that over there. We're on a hot streak, baby. Let's keep it going. I gotta ask you, have you looked at it the last couple days? So it's a privately held company, so it doesn't move with the market. So how much do you owe on your house?

About 300, 302. Uh-huh. And 70% of that would cover the 302 after capital gains taxes? Correct, after capital gains, after all the tax implications. Dude, I am doing this 1,000%. Is it long-term capital gains?

Yes, it's long-term. I've held it for years. Beautiful. I would do that too. I'd pay off the house, take the guarantee. What's your mortgage payment? What's the principle and interest? Interest is 1,400.

My payment's 21 and change. Interest is like 1,400. Okay, so you'd free up 2,100 bucks that you can now do whatever you want with. Like invest into the stock market and into something less volatile. Cause that single stock while it's been doing great is still a single stock.

And so I would diversify with your new found wealth building opportunity here, pay off the house, reduce your risk, increase your piece and you can build wealth, you're going to be just fine. What you shouldn't do is look back at what the stock does in the future and go, oh man, I should have held on to it. I could have had more. That's greed talking.

I'm going to cash in while the chips are good and be grateful. I think that's my whole fear right now is the FOMO, right? Well, what if it triples again by next year? Then they just wasted a million bucks or whatever. I did this on a very small scale, Michael, when I worked at Apple, I had stocks from Apple and I sold them to pay off my debt. And I never looked back to go,

oh my gosh, if I had just hung onto it, what it could have been, man, debt freedom is totally worth it. And I've been able to build wealth regardless of that. And so I would move forward and look at the future. You know, you got a real nice leapfrog there through the baby steps with this stock. I think, you know, Michael... I think that's what I've been telling myself and my friends have been telling myself.

I think I just, you know, I don't know. I am a gambler a little bit. I like to, you know, go and have fun. So maybe that part of me is telling me, you know, hold for one more hand or whatever, but I think you guys are probably right. Take the guarantee, is the way I would think about it. You're absolutely guaranteed if you cash this stock in to pay your house off and be in a completely different position.

That's a guarantee. There's no guarantee that that stock triples again. There's no guarantee that that stock triples again. There's no guarantee that something devastating wouldn't happen. And then you're left holding the entire bucket with nothing. So I would take the guarantee. And to boot, I still have 30% of it anyway. So if it does triple, Hey, that's still not a pretty good chunk of change. It's a nice outlook.

It's a nice outlook. Um, uh, that's one way of doing it. Is this a healthy company? I mean, they still going and blowing. Oh yeah. It's a nice outlook. That's one way of doing it. Is this a healthy company? I mean, they still going and blowing? Oh, yeah. They're a very healthy company. I see a lot of their revenue and their EBITDA and all of that. And it's growing fast and it's been growing fast for years and no signs of slowing down. I love it. Here's the good news. You can always go back into debt. Lenders will always let

you. And so if you hate it, you go take out a giant HELOC if you want, if you miss it. But I don't think you will, my friend. I don't, I haven't been in debt other than the mortgage for years and years and years, and I will never go back to that kind of life. I love it. Love that, thank you so much for the call on that.

That's a fun one there. I needed a win today, and Michael gave it to me. Thank you for that. You've been really riled up here. I had an energy drink, Ken, and it was a bad idea. I saw that. It's a lot of caffeine for a little guy. Me asking all those questions politely was my way of saying,

should you be putting that in your body? He's jacked up right now on caffeine, James. I mean, the drink that this kid just had was unbelievable. And then they tease me with a house payoff? You can't do that to me. I'm already on edge. Yeah, your nervous system is frayed. Let's see if Marvin helps it or hurts it. Marvin how can we help? Hey guys thanks for having me. You bet.

What's your question? Yeah so my question today involves the level of competition in the real state market in upstate New York. Just to give you guys some background my wife and I are first time home buyers with a budget of 400k. We anticipate to have 160k per year total income and we have we hope to spend about 100k on down payment in closing costs based on our savings. But as we talk to realtors and loan officers we heard that the market is very competitive. In the past five years houses are actually being listed at 100k below market value to encourage bidding wars. It seems to us that our only option to buy a house is if we want to get a cash guarantee loan, waive the home inspection, and participate

in a bidding war. Based on your experience, is this the level of competition, typical medium to high income neighborhoods across the country? And do you think it's a wise financial decision to purchase a home at this time? Have you heard of this George? The bidding wars? Yes, this happening all across the country. He's asking. I gotta tell you, we live in one of the hottest markets here. I've not heard of this. And I think this is an absolutely foolish idea.

This scares me to death. You George, this idea. Yeah, are you actually seeing this or is this what realtors are telling you? There's a difference. This is actually what we see. And where is this? In upstate New York? Upstate New York, Rochester, New York. Well, let me put the question back

to you. How does that sound or feel to you in your nervous system when you were first confronted with this is a possibility of what we'd have to do to buy a house? How'd that feel to you? Oh, this is terrifying. Okay then. Dude, this is an awful idea. Terrifying is the exact word. I have red flags all around me right now going, no, don't do that. And you guys currently are in Memphis? We're currently in Memphis.

And why are you moving to Rochester? Is it for a job or what? For a job. Okay, so you already have the job and you're just going, we're gonna live there regardless. We need to find a place to live. That's correct.

Can you rent for six months to a year, get a lay of the land and get a feel for things before you jump into a house? That's what we're trying to consider as well. That's what I would do personally. Yeah. Just to really figure out where you want to go, what the schools are like, the neighborhoods, get a feel for it. And then we can step in with from a place of strength instead of chaos, which it feels like it is right now.

And I would actually do your research, get the agents to bring some comps to you and say, okay, here's the actual sales to list price, here's what's actually closing, here's the price per square foot. Know all of your numbers better than the agents do so that you're not left going, well, if they say this is what we have to pay,

it's what we have to pay. But I have not seen any bidding wars happening with the current market. It's been stable. We've seen some good movement, but it has not been chaotic like it was, you know, and back in four or five years ago. Yeah. And what's interesting is that the, sorry, what's interesting is the appraisal value for these houses actually align with the final numbers. So it kind of all works out. Hmm. I'd keep looking. I would too. I'd get on the ground. I align with the final numbers, so it kind of all works out. Hmm.

I'd keep looking. I would too. I'd get on the ground. I'm with George. I love the idea of let's go rent, let's get on the ground, get an idea of what is really happening, how to navigate it, if in fact that is what's going on. Let's get a good realtor to help us. And I would not skip the inspection and appraisal.

Oh, never. I don't care how sweet of a deal it is. That freaked me out. We've had too many phone calls where people got really, really messed up. We got hosed on that. Yikes. Whew. All right, I'm going to get George's blood pressure medicine real quick.

Let's go to Lynn, who's joining us in Indianapolis. Lynn, how can we help today? Hi, for taking my call. You bet. I think I might have a silly question, but I would like for you to confirm if this is true. So, my husband is semi-retired. I continue to work full-time. We are debt-free, no mortgage, no loans. My husband has a small term life insurance policy that we continue to pay on every month. And I'm wondering, you know, if we,

I think we're at the point where we're probably self-insured, but there's still a little piece of both of us that says, well, let's just keep that policy just in case. What's your net worth? Right at two million. Awesome, and how much of that is in retirement accounts or investment accounts? 1.3.

Awesome. And what's the term life policy face value and what's it costing every month? It's $77 a month and it's only $150,000. Okay. So without that $150,000, you guys would still be okay. You'd be able to cover all your bills, something were to happen to him, God forbid.

You're gonna be able to pay all the bills. Even if you lost your job, the nest egg would continue to grow? Yes. Yeah. I mean, if it's worth it for your peace of mind, you wanna keep it, when does it run out?

Not until 2038. Okay. You know, this is one of those in-betweens where it's not going to hurt you to keep it and it's not going to be devastating if you got rid of it. It's kind of this in-between gray area. And for that, you guys make a decent income? We do. We do. Let's see, our net income is about 150,000 a year. Awesome. So out of that, you know, 10k a month or so you're bringing home, you're paying 77 out of your your budget line

item to cover term life insurance, I might just let it continue. And as your net worth continues to grow, you can reassess every year. And maybe once you hit a certain nest egg goal of, hey, once we have 2 million sitting in our retirement accounts, we're gonna feel real good about getting rid of this. But for now, for the 77 a month, let's hang on to it.

That's perfect. I think part of my thought process was, if he were to pass and there were Like unexpected medical expenses, you know right before he passed, you know that 150k could be used to pay for that and then I would still remain the same as I was, you know prior to his His death, but I think you're also telling me that at 2 million It probably doesn't it is not impactful. Yeah, if you think about what your investment me that at 2 million, it probably doesn't, it is not impactful. Yeah, if you think about what your investment accounts

are doing right now, obviously, not withstanding the current market, but in general, we're seeing the stock market double about every seven years. And so if you look at your current rates of return on your investment accounts, you might see in general, seven, eight, nine, 10, 11, 12%, depending on what's going on,

on average over a long period of time. And therefore, once you have 2 million in there at 10%, it's making 200 grand a year, which is more than your life insurance is worth. And so that's what I'm saying. There's not an exact number, but I just think for now I would hang on to it and just reassess every year.

And as you get more and more comfortable as your wealth grows, then you can cancel then. But is he in good health? He is, he's in perfect health. Awesome, love to hear that. Here's the best part, I hope you guys never have to use it. Yeah. Absolutely, well thank you so much.

Yeah, thank you. Is that a waste of money? Maybe I could use that 70s. No, and it wasn't, listen, it was not a silly question, it's actually a great question. You guys have done a really, really good job building wealth, becoming debt-free. You're able to work because you want to, not because you have to. So you were living out the Ramsey Plan.

Yeah, good question, Lynn. Glad you called. Let's go to Jason next in Kansas City. Jason, how can we help today? Hey, thanks for taking my call. Yeah, I'm just trying to set it up, and I noticed a lot of my subscriptions and insurance and things are on the yearly withdrawal. Trying to do it on the budget, I just didn't know if you guys would recommend dividing that between the 12 months and then setting that money into a separate account. Then when it comes to yearly, when they come out to do that, or how that is the best way in their budget. Well, there are a few things that my partner today enjoys discussing more than annual subscriptions.

Yes. So wow, this is George. What kind of subscriptions are we talking? Just out of a dark curiosity. Just insurance, Netflix, I've got like trash, everything just because you get a better rate when you do it. Yeah. It seems like sometimes and so they give you a little bit of a break so I just do it all

once in a year and so it just kind of makes it easy. And like all my insurance are like taxes on our mortgage. I don't have an escrow cause we paid off mortgage. Oh, I love it. These are good problems to have. And I assume you're going to give me the advice on how you do it. Sure. Yeah. The way I do it is in every dollar,

I just mark it as a sinking fund and I divide it by the number of months until it's paid up again. And so, you know, I just had Instacart come out for 80 bucks. So I divide that by 12. It's about six dollars and sixty six cents There's a line item for Instacart for six six sixty six and you can transfer it to savings I would do that for like the really big stuff like property taxes and set a reminder to transfer back to checking when that time comes But for the little ankle biter stuff that's like 100 bucks, it's gonna be sitting in checking. You'll have a buffer in there, set a reminder, you'll know what's coming out.

But for the little stuff, I would just keep it in checking. For the big stuff, I would transfer it to savings and move it back. But the sinking fund marker in every dollar has a little piggy bank next to it, is such a great feature. Cause it's just, you know, it's not the full amount I need to send every month,

it's just the monthly amount so that it adds up over time. Can I ask you a question without you making fun of me? I won't make fun of you ever. Okay. What do you get on Instacart? I don't even know. Instacart is the grocery delivery service. So you go on there.

Through Instagram? No. No, Instacart is the name of the service. I know. Yeah. I didn't know if that was a service of Instacart. the name of the service. I know. Yeah. I didn't know if that was a service of Instacart. I see. That's why I asked the question that way.

I'm not being an idiot right now. But no, you haven't heard of Instacart. I've heard of it, but I didn't know if it was attached to Instagram or not. Oh, no, no. It has nothing to do with it. It's just Insta became the fad of the day when they invented this company. Now you understand why I set the question up the way I did. And then you get groceries delivered through this?

Yeah. So you could choose, you know, I can get groceries delivered through Aldi via Instacart. So I go on Instacart, I click Aldi, and I can go find my groceries, add it to cart, and someone delivers. I actually did this, Ken, as a side hustle in December. You did? I drove for Instacart delivering groceries to people

just to see what the experience was like. And? Fascinating. A great lesson. Here's what I'm shocked by, in all honesty. That you're paying extra, because you're paying extra for the service as opposed to driving up in your electric car.

Agreed. And here's the truth. Why do you do that? I try not to use it because it hurts my soul a little bit. Oh, okay. Because they charge you a little bit more for many of the stores per item.

That's what I was wondering. Then there's a delivery. On top of that. There's that service charge and then you tip I gotta tell you I'm I'm not kidding. This was not a setup Ken knows how frugal I am. So he's legit shocked. I am be willing to Legitimately shocked. It's more for my amazing wife who's taking care of a toddler who can't always get to the store And so it's a it's a nice service It has nothing to do with your fear of public places. That too, but I actually enjoy going to grocery stores, but not when I'm shopping for other people.

Here's what I realized. What did you find? I'm just flabbergasted at what people purchase, the level of detail. I was going to a bulk bin at Sprouts collecting licorice, weighing it on a little old timey scale, trying to get it to exactly one pound at 9 p.m. at night, going, oh my goodness, this is hard work, man.

This is no joke. People have their idiosyncrasies. And then I delivered some really nice neighborhoods, Ken. Not great tips. Oh, so, okay, now this is another... So are you taking away from this that wealthier neighborhoods tip worse? I don't know that they tip worse. You don't have enough data.

I'm just a little perturbed at how little they tipped, knowing the value of their homes, what their incomes probably are. Did you, did anybody recognize you? When you showed up on their door. Here's what's funny though, I accidentally delivered to my neighbor, unknowingly. That sentence doesn't make sense to me.

Yeah. If it's your neighbor and you doesn't make sense to me. Yeah. If it's your neighbor and you didn't know you were in your neighborhood. Well, all you see is you see a name and like, okay, now deliver to this address. And I go, that address looks familiar. I drove, it's on a different street than my backyard neighbor.

I delivered it at their door and I went, oh my gosh, this is hilarious if they saw me. Did you do this for social media? No, I did it for my own edification. Really? Yeah. Just wanted to experience it. Well, I tell people all my own edification. Really? Yeah. Just wanted to experience it. Well, I tell people all the time, hey, go drive for Instacart, go do these side hustles,

and I want to see what it's really like as a social experiment. I always admired you, George, now, and all seriously, I really admire you. I put the work in. I made about a... No, I'm serious. That's actually very... I'm not being silly. Some people think I'm being silly right now.

I'm telling you, that's impressive that you did that. Thank you. You walked a few miles in the moccasins of people that you're trying to help. Man of the people. Mad props. You are. Well, I'm a man of the people. You're on your way.

Thank you. You've got a few more years of putting in your service. I aspire to get to Ken Coleman level. When you play pickleball on the cruise ship with hundreds of people for hours on end, then and only then, I take it back, can you be called a man of the people? I am unwilling to sweat for anyone. You are. We've got to talk about black liquors too.

You've got to be psychotic to eat that stuff. George, have you heard about Dave and John Delaney going out on the road? Have you heard about this? The money and relationships tour? I've heard big things about this. Lot of hype around this. Lot of cities too. Unbelievable. Where Where they going Louisville April 21

Durham April 23, Atlanta April 25 Phoenix May 5 Fort Worth May 7, Kansas City May 9 Ramsey solutions comm slash tour is where you can go get your ticket if you're On YouTube podcast with the Ramsey app, you can click on the link in the show notes. It's going to be fun. It's called the Money Relationships Tour. We're going to talk about everything from raising great kids to handling money fights, taking questions from the crowd, kind of an old school fire away and we'll answer your questions. Kind of an unfiltered improvisational version of the show with Dave and John on stage.

It's gonna be a good time. So there you go. Join them in those cities. Check it out, it's gonna be fun. George and I will be back here. Holding down the fort. Holding down the fort. It's called Working.

Yeah, Working. Ever heard of it? The Working Man. That's you and me, dude, the overalls. We need the Ramsey overalls, man. We're just here hard-hatting it. Put me in some denim. Let's go. Put me out in the field. Let's go. Christine Ramsey overalls, man. We're just here hard-hattin' it, you know? Put me in some denim. Let's go. Put me out in the field.

Let's go. Christine is up in Denver, Colorado. Christine, how can we help today? Hi. Yeah, I just started listening to you guys, and you guys are great. Thank you. I just had like, yeah, so I have this really big confusion on the how to do all of this. So I started listening, I started trying to do the baby steps. I really thinned out the budget, you know, only needs, not wants. And then I can pay off one of my credit cards in full right now, but I am deathly scared of losing that cushion. I'm afraid of all these unexpected, you know, incidents to happen. Like for instance, I bought a house,

I bought my house about a year ago, one month later, there was a hail storm, and I didn't realize my homeowner's insurance didn't really cover the hail damage. So then I had to dish out $9,000. So I'm like, I'm just really scared about these unexpected large amounts of things that will happen. So I'm just really nervous about just the large amounts of things that will happen. So I'm just really nervous about just the steps and the how. Sure.

Well, first of all, very good question and very normal to feel this way. You're not the first person who has felt this and asked us about this. So George Walker, through that fear of the cushion and the baby steps and how it all works. Yeah, and Christine, I'm gonna send you a copy of my book, Breaking Free from Broke,

because I actually break down the objections to paying off your card and getting rid of it. And there's eight sort of character archetypes, and you fall into two of them, the emergency shelter and the fear tranquilizer. So the first one is, I need my credit card in case of emergencies, right? That's what you're saying.

Well, that's what your emergency fund is for. And you have a thousand bucks buffer, that's baby step one. That'll cover the small ankle biter stuff. You have insurance to take on the big risk of the other calamities that could happen for health, for life, whatever it may be, home insurance. And then the other one is the fear tranquilizer of having a credit card just makes me feel more secure.

And the thing is that people don't realize is that it's a false sense of peace while adding on a real sense of stress and anxiety and risk. Because you're now gonna be paying for that emergency at 25% APR for the next six months, which does not increase your peace. It just puts you with more risk. Yeah.

And so what we found is that once you cut up the cards, you pay them off, you don't actually miss it. And the sooner you get to debt freedom, the sooner you get to that fully funded emergency fund, the sooner you're going to feel that real sense of relief going, you know what, I don't need this security blanket that I've been hanging on to in the form of plastic. I'm going to be able to control what I can control. I'm going to be able to cashflow the emergencies.

And that fully funded emergency fund will really help with that. So how far are you from getting rid of all of your debt? So with just the credit card debt, I owe about 20,000. I'm able to pay one of them in full about $4,000. Amazing. Yeah. What other debt do you have? I, so just bought the home.

I owe about $406,000 on it. And I bought a car a couple years ago. I still owe $20,000 on that. And what's your income? I make about $125,000 a year. And are you single? I am. I have a nine-year-old son. Okay. about $125 a year. And are you single? I am.

I have a nine-year-old son. OK. And what is the mortgage payment every month? About I did a rate buy down. So it should increase this month to $2,500 a month. OK. And what's your take-home pay every month? I would say probably maybe 5,900 cash, yeah.

I think that's the problem, is that's a lot of mortgage compared to your take-home pay. That's about 42% of your paychecks disappear into a mortgage. Right, right. And so unless you have a, is there a trajectory where you're gonna be making more money?

Just the yearly raises. Okay. Try to anticipate anything. Yeah. And that's on a 30-year mortgage? Correct, yeah. Okay. Yeah, I think that the credit cards, you know, we can get rid of those, the 20K.

You have the car loan, it's another 20K. The mortgage is still going to be there, eating up a big chunk of your income, but getting rid of the car loan and It's another 20k The mortgage is still going to be there eating up a big chunk of your income But getting rid of the car loan and credit cards will definitely help it'll free up a big chunk of payments that you were sending to lenders but the credit cards It makes me worried that you were having to use them for all of this to fund Are you able to cover all your bills without using the credit cards? Yes, and then I have maybe about $300 extra. Yeah.

That can go toward your debts? A credit card. Mm-hmm. Okay. Whew. This is going to be a journey. You're making really good money, but you got a big mortgage and a sizable level of debt, but this is definitely doable.

As you're saying, you got on the budget, you're cutting down your expenses, the next thing is to see how can we can make more if this is going to be sustainable. Because 400,000, that's a hefty mortgage. It is, and my mom actually, she gave me $200,000 for the down payment for the house, but the agreement was that I got the house to get that 200,000. So I did think about selling to just, you know, knock out the entire debt, but I don't, my mom kind of just gave me the mice specifically for the house.

Nothing's on fire there, but it's definitely something to watch out for because if your income doesn't go up over time to make that mortgage more manageable, it may just eat away at your ability to build wealth and accomplish your other goals. Okay. But that book is really going to help you to understand the whole Ramsey plan. I know you're new to this stuff, so we're throwing a lot at you, but this is doable. You have a great six figure income. This credit card debt's going to be gone using the debt snowball method.

The car loan's going to be next. You're going to be able to knock all of this out within, I'm going to say a year. You're completely debt free outside of the mortgage. Really? Oh yeah. If you're focused. I want to speak to the psychology because the way you opened up this call, you're so worried about what if something bad happens, right?

And by the way, things do happen and that's why we get that starter emergency fund of just $1,000. This covers most things like that, but you're gonna with your income and you really get this budgeting down there are times George I wanted you to kind of address there are times where we can cash flow some stuff as well You know even in the baby steps. It's like okay this happened. Let's say it's an HVAC and you gotta have it That's why we budget. That's why we go, okay, we can move back and forth. So you have control, Christine, when you know where every dollar is. That's the idea behind the name of the budget app, Every Dollar. So if you really take control of this thing, even when life throws the curve balls at you, and it will, and it will during this journey. But we're sitting on the other side

having coached tens and tens of thousands of people on the show. We've heard the stories. This process of momentum and this process of discipline when it comes together, you can weather all those storms. So you don't need to rely on that credit card. And you're talking to two guys who've had to do it. I mean we've had emergencies along the way as we started to do this stuff. And I remember cutting up my cards, Christine, and I felt that same like gut feeling of, oh my gosh, what am I doing?

What am I gonna do without this thing? And then I realized they were never a blessing in my life. It was just a false sense of security. And you're just so used to having cards. You're so used to having payments that it feels weird to not. But over time, you'll get used to it and you will like the feeling of not owing anyone anything,

not having to rely on Bank of America or Capital One. You're gonna rely on Bank of Christine. So that's where you're gonna end up. We're gonna gift you Breaking Free from Broke, my book, as well as every dollar premium to get you. You're due in the budget. We wanna help you get there with some awesome features. So hang on the line.

Kelly will pick up. We'll hook you up with all of that. We are rooting for you, Christine. And welcome aboard the USS financial piece. I love that. You like that? It's the day, I think I added too many S's. I was gonna say.

I did three S's. You got so excited. Well, I did make up the ship name, so might as well add as many S's as I'd like to. It's his ship. It's Captain George at the helm. Our scripture of the day comes from Proverbs 1 verse 7, the fear of the Lord is the beginning of knowledge, fools despise wisdom and instruction.

And our quote of the day from none other than the great American author Mark Twain, never argue with stupid people, they will drag you down to their level and then beat you with experience. Oh, one of my favorite quotes. If that doesn't explain the comment section on anywhere on the internet, social media, I don't know what does. That's similar to the old phrase, I don't know who's behind it.

Don't know if it's ever actually been claimed, but don't wrestle with pigs. You'll both get dirty, but the pigs enjoy it. Oh, I like that too. I've heard a different one, where it's onlookers may not be able to tell the difference. Never argue with an idiot. Onlookers may not be able to tell the difference. Very similar. That's good. Yeah, a lot of wisdom wrapped up there. Good wisdom. Do you know who Mark Twain is?

I do. Okay, good. I don't know him personally. Never got the chance to meet him in my time. That's correct. I just wanted to make sure, in case I needed to pull a dad card and tell you who he was. Now I'm a big fan, because he speaks in tweets. And my brain can understand that. Old school tweets.

Yes. Absolutely. He would have been huge on Twitter. No question about it. He would have crushed. Lauren is joining us now in Pittsburgh. Lauren, how can we help? Hi.

So my husband is self-employed and his work has kind of gone downhill over the past year, two years. What does he do? He's an electrician and there just hasn't been a lot of work opportunity. And he doesn't wanna work for anyone else. Why is that? He's a difficult personality to say that. He just, he doesn't like bosses. Well, George doesn't either, but he does a great job here. Thank you.

So, you know, George learns how to power through that. He's got to learn how to run a business successfully if he doesn't have bosses. Or he's going to have to work for somebody. Yeah. Yeah. Well, I mean, he's been doing what he's been doing for 20 years now. How much of a decline financially has it been in pain himself how much of a hit have you guys taken?

It's well his hours have basically reduced used to work Anywhere 15 years ago, he would be working 40 hours or more a week where now he's at maybe maybe eight. Whoa is that the only source of income you guys have? No no no no I basically pay the bills and everything. Okay all right so I've been asking a little bit of background information but I want to get to your specific question. How can we help? I don't...

I've tried having the Coming to Jesus talk with Him, and most recently the talk got Him to sign up for Uber so that He would be driving Uber in his spare time, which his spare time is almost all the time right now. But he doesn't want to have a consistent full-time job where he has to go somewhere and be somewhere at a specific time because he thinks if he gets a work call, then, you know, he wants to drop everything and go to that, you know, electrician call. But that's not happening. The calls aren't coming. Yeah. They're not coming in. And the other part that's a little frustrating is,

um, you know, with Uber, he's driving a Ford F 150, you know, it's driving a Ford F-150. You know, it's a gas-bubbling vehicle. Mm-hmm. Yeah, he's probably not making much even doing this. No. With the expenses and the gas. We have a bigger problem than the... And he's a skilled tradesman. He doesn't need to be driving Uber.

He needs to be finding more work in his field. And it's out there. I don't believe that the field dried up and nobody needs electrician work done anymore. I think he's lost his mojo. He's lost his ambition and drive. Yeah, well, we don't live in Pittsburgh. We live outskirts and everything, so.

Where is he getting his work from? How is he getting clients right now? Where is he getting his work from? How is he getting clients right now? Usually it's repeat clients or word of mouth. Does he know other electricians who are slammed with work who could give him some extra work? No. Yeah. Lauren, this is a therapy issue, a counseling issue.

This is marital counseling. And he better be driving enough to help pay for that because you're carrying the load. This is a guy who you presented to us, doesn't want to work for anybody because you said he's a very difficult personality and you chuckled. That means you put a lot, you dress that up.

And he's also a guy who doesn't want to do another job because he wants to be available to do the job that he doesn't have. There's a lot going on and I know you don't have time nor does it matter for you to really unpack this for us. But I've just been doing this long enough to know that there's a whole lot of issues here and the symptoms are what you're describing to us, but the problem is much, much deeper. And the, hey, bud, we're not gonna do marriage this way conversation, I'm glad it happened. It probably needs to happen again, but this time it needs to be,

we're gonna go see a professional who can meet us in the middle and help you and help me help you. Or if he didn't wanna do it with you, he needs to do it on his own and get some help. There's something deeper going on. And I know you've tried. I know. I mean, I've set up appointments for counselors and stuff and he doesn't show. Yeah. I am so sorry, Lauren. I wish I had something more to say.

But you've done all you can do at this point and And the resentment has built up on your side. I mean clearly you're you're fed up with this. It's why you're calling us Yeah, is he dragging you all into debt or is he staying out of the way there since you're them I mean what's going on on the rest of the financial picture? he's not he's not very good with financial picture. And like even with this truck, it was so frustrating because he only wanted the top of the line, best of the best. We ended up spending too much on it, but at the same time, he didn't understand.

I asked him to put as much cash down as possible. What's the payment on this truck? So the payment is 800 a month. And what is your take home? My take home is about 3,700. Yeah, the reason I asked that George is because his is so inconsistent right now, it's hard for us to even, you know.

Yeah, he wouldn't make his truck payment if it weren't for you. He wouldn't, no. This truck needs to go. Yeah, the truck needs to go. You're gonna need to convince him this truck is dragging you guys down financially, he needs to sell it,

and he can get an old work truck for the times where he's working. Is it still worth something? It is, but I've paid it down so much. We only owe 18 on it now. Only 18? What's it worth? Eight thousand.

I don't know where you're from, but 18,000 is still a lot of money. Yeah, but I think she's saying she's paid a big chunk of this thing off. That's good though, it means you have equity. So if you sell it, is it worth 30 grand? Probably, yeah. So you could sell it and get a $12,000 truck, free up 800 bucks in your budget. At the very least, you can make financial progress,

even if he's unwilling. But if it's his truck, he's probably gonna say, you're not touching my truck. Does he have any sense how stressed out you are and how hurt you are, Lauren? I mean, I told him. Yeah, but has he seen it? Because we're hearing it. We're hearing it. And we understand it, by the way. Has he seen? No, I mean, he really doesn't understand how much I carry. I don't think so. So, Lauren, the reason I ask that is I had a sense that that was the case. And the only advice I can give right now,

besides an ultimatum, is I think before ultimatum, I think he's gotta see this. You gotta let yourself show the emotion that he sees what you're really carrying. You're so strong and he doesn't have a clue and I hope it's the wake-up call that he needs. George, your thoughts? Yeah, you're gonna need to go to counseling on your own, Lauren. Make financial progress on your own until, and I hope, he gets on board and starts leading this family.

Yeah, the good news is, Lauren, you have agency and you've showed it. But I think you gotta tell him how you really feel and let him see it. The tears, the fear, all of it. And I think George is right. Start taking care of you financially, because you're the only one pulling the weight. So sorry you're going through this. We're rooting you on. This is The Ramsey Show.