The Ramsey Show - App - The Problem With Investing Culture Trends (Hour 1)

Episode Date: August 26, 2022

George Kamel & Rachel Cruze discuss: How to save for kids college, What to do after moving out of your parents' house, How sinking funds work, The danger of investing culture, Preparing for retirement early in life.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Девочка-пай From Ramsey Network, this is The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to living well. I'm George Campbell, your host, joined today by best-selling author, host of The Rachel Cruz Show, you guessed it, it's Rachel Cruze. And we are excited to take your calls about life and money at 888-825-5225. That's 888-825-5225. Nick joins us up first in Birmingham, Alabama. Nick, welcome to The Ramsey Show.

Hey, George and Rachel, how are you all doing today? We're doing great. How can we help? Good. Well, I, a little quick, I just wanted to say that my wife and I paid off all of our student loans last year. And, you know, that's created so much positive momentum for us. And we're going to be paying off the house within the next couple years, and so we don't regret it one bit. Nice, Nick. Congratulations. We love to hear it, Nick. Way to go, man. How can we help today?

Yeah, so kind of along the same lines, I have a couple young kids, and I have a 5-year-old and a 2-year-old, and I was just curious with these morons in Washington, people making these student loans and people keep on accepting them to contribute, when is enough enough, is college even going to make sense in 15 years? And just wanted to see if y'all had any feedback on that. Yeah, well, the college discussion, I mean, it's an interesting one, not just because of the news in the last 48 hours, but also I think that there was conversations before that happens on what is college going to be. I mean, the questions that you're asking, Nick, I think we all kind of are. I'm like, I don't know. The future of education.

My kids are exactly your kids' ages. And I'll tell you, my husband and I still contribute to a 529 for each of our three kids. We're still doing the path because at the end of the day, I'm like money invested in the apps. If they choose to go to college, it's going to be there. And we kind of will continue to check in on that throughout the years because it is going to be a lengthy process, right? Still 10, 15 years till that happens.

But I mean, there's a little bit of me. I'm like, it's a question mark of what education is going to look like, what it's going to be like, what the price is going price is going to do is it going to continue to go up or is there going to be a huge backlash from our culture and i mean what your kids will want to study and where they will want to go to school and honestly the trade route has become even more popular uh you know even if you want to get into you know coding and make great money you just got to go to code school and then you don't need a college degree so so it's just fascinating i feel like what the discussion is as a culture nick but i i can just tell you what i'm doing we are continuing to fund

a 529 for our kids because i do think at the end of the day um if there is a question i think having a college degree having higher education i think it is a great thing and if i can provide the financial assistance alongside my kids uh i am going to do that but i think it is a great thing. And if I can provide the financial assistance alongside my kids, I am going to do that. But I think it is, I mean, and all of us Ramsey personalities, even kind of different, various opinions, Ken would probably say, I would give a different answer than I would. And Deloney's got a different opinion on education. Yeah, what do you think, George? I just think we can prepare for the future without worrying about the future.

And a lot of people, they're doing both. And sometimes that means they're doing less preparing and more worrying. And so the fact that you're even calling and wondering about this with a 5- and 2-year-old makes me feel like, all right, Nick's got a game plan. You're on track to pay off your house. We're on track to save for college. Now, if you had a 17-year-old and you haven't even talked about college,

I'd be more worried right now. But the fact that you are getting ahead of this thing, and if you just contribute to this 529 and go, all right, our goal is to have $100,000 by the time they're 18. And let's see what things do as they get there over the next, you know, 12, 15 years. And at that point, we'll have a much better picture of what your kids are going to be going after. They may want to go into the trades and they can still use that money towards that. You can change the beneficiary in the 529 anytime. It can be used for anyone in the family.

So I'm less worried about overfunding it, and I'm more worried about underfunding it. So I think it's okay to lean towards the other side. Okay, awesome. Well, thank you so much for your help. Yeah, absolutely, man. Thanks for the call. Yeah, the best thing you can do as a parent, and in my eyes, Rachel, obviously you have kids,

and they're young, and so you're thinking about this stuff, but it's having the conversations early and helping them figure out what that path is. Because a lot of kids just wander into a degree they think sounds good, that they think will pay well with a job at the end of it without actually figuring out, well, what am I wired to do? What am I passionate about? What would fuel me versus what would put food on the table? That too. But also to be like a little bit against that I'm like at 18 how do you know you don't right like that's what's hard too is is you get a degree and I even have a great friend and she got an accounting degree so she's an accountant very successful but she hates it and she's like but I got a degree in this this is all I've done and so like it's just I do hate that I'm like as these

18 year olds you kind of get boxed in or the pressure of like you better have it all figured out at 18 I know but then also it's like yeah but getting a college degree in a lot of fields helps you you're gonna sink a lot of money and time to the next four years so it is it's a it's an interesting uh perspective to really look into in what what is the ROI of a college degree these days? And to your point, though, also, what are you passionate about? I mean, I know kids that are like, school's just not my thing. It's not my thing. And some parents force them to still go get a four-year degree. Oh, that's the worst.

I mean, it's just, it's a fascinating conversation. And then in the last 48 hours, too, it's kind of blown up. So the culture I grew up in was a Middle Eastern culture. And it's very much you're kind of pressured to go be an engineer or go be in medicine because those are good, respectable, reputable fields that pay well. And it ends up great for a lot of those people. But a lot of times you wake up after you get your degree and you go, I don't want to be an engineer. This is not what I was put on earth to do. And so there's both sides. We don't want to put too

much pressure on the kids, but we also don't want to just let them figure it out on their own. We can help them along the way. Exactly. Well said. Well said, George. Good stuff there, Rachel. All right, let's go to Sean in Chicago. Sean, welcome to the show. Hi. Hi, guys. Happy Friday.

You as well. How can we help? Yeah, so I had a quick question. So I'm 24 years old. I've been living at home with the parents, and I'm actually interested in moving out soon. I'm debt free. I have $13,000 saved for a move out budget. This was just like a cushion for rent in case I was going to go to rent. But I'm also now thinking about maybe putting that as a down payment on the condo. And I'm like teeter tottering on whether it would be better to like rent chicago's rent is ridiculously

expensive here and i've been thinking about like either you know renting or buying and i really do want to buy because i want to own some equity but tell me what you guys think is that your emergency fund too that 13 000 i don't know 13 000 is just for the move-out budget i have an additional uh 17 000 right thank you oh great and john do you see yourself in that area for $15,000 is just for the move-out budget. I have an additional $17,000 right now. Oh, great. And John, do you see yourself in that area for the foreseeable future? Definitely, yeah. Definitely around the Chicago area, yeah.

Yeah. Well, I can tell you the formula we kind of run the numbers through when it comes to getting a mortgage is that you, on a 15-year fixed rate mortgage, you put down, you know, if you're a new homeowner, it could be 5%, 10%. If you can hit that 20%,

that's great because you can avoid PMI and that your monthly payment is no more. Your mortgage payment is no more than a fourth of your take-home pay. So if you find something in that range, I would be totally fine if you decide to buy. I think that that's great. I think moving out of your parents' house too, Sean,

is great. I know people kind of, that's part of their story as they transition into real life. But I think you get a sense of like adulthood and dignity when you're like, okay, I'm on my own. And I think I encourage that greatly. So if you're not quite at that formula, renting is totally fine until you have enough money saved for a good down payment and making sure you get what you want. Yeah. Jump on our website, Sean. We've got a great mortgage calculator and you might need to rent for another year and stack up cash,

but that is the wise thing to do if that's what you got to do. Thanks for the call. This is The Ramsey Show. welcome back to the ramsey show this is your friendly reminder that you can come visit us and watch the show live. We just hung out with a bunch of the guests out there that came by to see us. We're just south of Nashville, Tennessee. We've got free baked goods, free coffee, a free mug. There's a timeline history wall, and you can watch the show on the glass, and we come out every hour.

So come hang out with us in Nashville if you're in the area. It's a free call, 888-825-5225. I'm George Campbell, joined today by Rachel Cruz. We're taking your calls on life and money. Annie joins us up next in Topeka, Kansas. Annie, welcome to the show. Hi. I was just wondering if, with my refund check from the government for student loans, if I should use it toward my mortgage or if I should use it to be generous or help somebody out. That's a very sweet question. Now, Annie, this is all conjecture, right? This is theoretical? If and when you get the refund?

Yes. Okay. I was like, did you already get the refund? Am I hearing things? Okay. I did talk to my loan provider and they were like, okay, we issued the refund. You should see it in your account. Wow. This is big news. Yeah. It's like, whoa. So you guys are in baby steps four, five, and six? Yes. Okay. How much is left on the mortgage? Two, a lot. We just bought the house. Okay. Cool, cool, cool. And you're wondering, should I be generous? What do I do with the money when I get it? Is your question? Right. Okay. Well, I would apply it to the baby steps. And if you want to give

a portion of that, I think it's a great thing to do if that's what your hearts are driving you towards. But definitely apply it to that mortgage. Do you know if it's going to be a certain amount? Is it 10? Yes. Okay, cool. Rachel, what are your thoughts on this? I think my husband is going to apply as well. And he's got, he would get another 10 there? Yes. Cool. Yeah, that's great. I mean, I would just keep throwing it. I would, yeah, you definitely can give some for sure. I mean, obviously there's never a negative when you're, when you're giving. And so using that, using the remainder though, to continue to whether you guys are saving up to replace a car, if that's in the, if that's in the equation, if there's any big

purchase coming up, you can obviously use it for that. Or yeah, just throw it there at the mortgage at baby step six would be very smart. That'll feel good to see that balance go down. Yes. Awesome. Well, thanks so much for the question, Annie. Appreciate it. Lois, is it Lois joins us in San Jose? Did I get that right? Yes, you did, George, and it's Lois that you've met before. Thank you for taking my call. Oh, wonderful. How are you doing today? How can we help? Yes, I was with you. I'm doing great. I was there June 10th for my debt-free screen. So my question, yes. So I am just about to complete Baby Step 3 and I am saving for a new car. As you know, the craziness in California, they are going to stop all the gas-powered cars. I want to get a reliable electric car.

So I am trying to save for that, and I wanted to know how the thinking funds work. That's my question today. Awesome. I've had Dave talk about it, but I am not very familiar with how it works. How close are you to finishing Baby Step 3 with the fully funded emergency fund? So I'm hoping by end of September and I wanted

to save for another maybe three months or four months for my car. Great. So by end of December, yeah. Do you have a number in mind of how much you're wanting to spend on that car? I want to spend $20,000. $20,000. Okay. What's your income? My income, and I just got a pay raise, thanks to God. I have luck with you guys. So it's going to be $230,000. Wow. That's awesome. Are you married? Yes, I'm married. Fantastic. Way to go. You guys are crushing through these baby steps, and I would say it's getting time for the upgrade in the car. And you've definitely decided electric, which you know Rachel and I are fans. Yep. We love a good plug-in car. It's great.

We do have. Rachel and I both, we are famously now Tesla owners because Dave rags on us on air every chance he gets that we drive batteries with wheels. As I plug in next to his truck. I was going to buy a Tesla a few years ago on credit until I met Dave and Rachel and everyone of you. Oh, thank goodness. We saved you. That's awesome. So good. So good. That's so great. Well, to answer your question, you know, how sinking funds work, it really is

just putting a specific number aside every month until you reach your goal. So I don't know if there's a, I know you said you kind of have a time frame, which is great, but it would just be backing out of that and saying, okay, you know, over the next. If you're going to put $4,000 a month in a savings account in five months, we'll have $20,000. Okay. Okay. So that's how it works. Yes, it's pretty simple. And some people,

I think, George, you might be one of these people, that opens up a separate account. I do like to have a separate savings account because you can do them online very easily. Just open a new savings account

and put it in there. That way, it's not in there with your emergency fund and with the Christmas fund and it gets a little jumbled. Yes, so that stresses George out. it gets a little jumbled. Yes. So that stresses George out.

So if you want a separate savings account for this, you totally can do that. Or if you just keep track of it and know, okay, I'm putting this money aside and I know I'm going to be writing a check for a new car in five months and it's going to be this amount and it's great. So it really is just planning ahead and saying I need to set aside a specific amount of money per month to reach my goal when my goal comes. I love it. Thanks so much for the question, Lois. And I wish you luck in finding a Tesla for $20,000. If you do, call us back. I will be very, very impressed. You may need to spend a little more than that, but with your income, you guys could swing it. It may mean waiting another month or two and spending $30,000, $35,000. Well, I saw the California, I don't know, I shouldn't speak on it because I don't know it that well but i saw it come through that yeah that they're wanting they're they don't want to sell gas powered cars i want to say wow

in the next like decade i think it's like in the 2035 thank you producer james so lois you have a little bit of time you got a little bit of time so even if you wanted you know, save over eight months and save some more money and get a different electric car. Depending on what stage of life that car is at. That's true. That's true. All right. Thanks for the call. Natalie joins us up next in Virginia Beach. Natalie, welcome to the show. Hi, thank you. So my question is, if my husband and I are, we have a chunk of change in our savings account, should we pay down our mortgage? Or if we're contemplating moving within the next three-ish years, should we continue to save up to put a bigger down payment on a future home, which will probably have a higher interest rate? Interesting. Well, I would tell you to put it towards the current mortgage. Yeah, because when you sell your current mortgage, you're going to have a higher interest rate. Interesting. Well, I would tell you to put it towards the current mortgage.

Yeah, because when you sell your current home to buy your new home, whatever it's the equity, you could use that as the down payment as well. Well, that's another snippet. We would like to keep this home and use it as a rental in the future. Gotcha. Okay. Well, that does change. That changes some of it because I would want that current home that you guys are in completely paid off. We don't want you to have two mortgages. Even if the interest rate is lower? Say again? Even if the interest rate would probably be significantly lower? Yes. Even if the interest rate is lower. Yeah. Having two mortgages is not ideal. So I either, if you guys want to

get in the real estate game, you could, again, put this extra money, the savings you have on your current mortgage, sell the house, use some of it for a down payment, and then even say, okay, let's save up. Or maybe you get the next house you have, you put 20% down on whatever's remaining that you, yeah. What am I trying to say you for a new for the investment property for the investment property just to pay with cash for the for the investment property so like basically if you want to kind of dip your toe into that world getting something even just like a condo i mean you could do something uh and pay cash for it because whenever you do uh investment real estate we always recommend doing it with cash and starting small.

So that could be the option that you guys want to do. But no, I would not keep your current home and buy a new home and have two mortgages because the rental idea, it sounds great. And a lot of people think like, oh, yeah, it's easy money. And it is. You're going to pay the mortgage for me, Rachel. It's great passive income. But then you don't realize, oh, wow, there's actual people that are living there and they may not pay. Or I have to find new renters. It ends up being almost like this part-time job.

Yeah, yeah. So just to give you guys some breathing room and margin and cushion, I would not have two mortgages. Yeah. I'd focus on one thing right now, and that is paying off your current mortgage as fast as you can. And I like doing it towards the current mortgage because it's a forced savings plan. It creates automatic discipline because the money's not floating out there and you can use it towards who knows what. But I love the spirit of the question and I hope you guys become real estate investors very, very soon. Thanks so much for the question. 888-825-5225. I'm George Camel. That's Rachel Cruz. We are here for you. Give us a call. This is The Ramsey Show. I'm George Campbell, host of the Fine Print and Entree Leadership Podcast,

joined today by Rachel Cruz, host of The Rachel Cruz Show. You can find all of those shows, including this one, The Ramsey Show, on The Ramsey Network and wherever you listen to podcasts. All right, Rachel, it's Friday. We like to have some fun, and that means reacting to videos on the Internet that James sends us. And the latest one is a fun one because it's Gary Vaynerchuk, who I find personally very entertaining. Yes. Generally insightful. He's got a potty mouth. So, you know,

luckily this clip is safe. Prepare your hearts. This clip is safe. It's radio friendly, guys. The FCC is not coming after us. But he's talking about investing. Now, he's a social media expert, entrepreneur, author, speaker, but he's big into the trendy investments of the day, including NFTs and crypto and all that stuff. It's very cool. So yes, he's very cool. We disagree on a lot of things in the financial space, but he had something interesting to say because he does have his finger on the pulse of the trends that are happening out there among the youth of America. So let's see what Gary has to say. The youth. If you go look at TikTok accounts of 15, 16, 17 year olds,

you have 16 year olds that have in their bio, investor. And I'm like, this is profound. What I'm seeing is a bigger combo. The rise of people saying,

I'm an investor too. And then the rise of what they want to invest in. So now you've got 15 to 30 year olds that think about investing, but they don't want to buy a one family bedroom

and make recurring revenue on rent. They want to buy a pair of Nikes that are going to go up 2x. They want to buy John Morant rookie cards. They want the NFT to put in their social media profile and they want it to go up. That's very different than buying 75 shares of Turner because investing is now more pop culture and fashion. Everyone now sees it as a viable cultural thing you do, and they just are going to do it in new stuff. So alternative investments, that is a big deal and it hasn't begun. Interesting. And it hasn't begun.

He's teasing it, Rachel. This is the future we're living in. It's no longer just Pokemon cards. But I feel like people always kind of did that kind of stuff though. I mean, not like NFTs, obviously, but I feel like... But now with social social media it's a different ball game because it's like a flex now yeah to have this facade of like i'm an investor like that's who i am it's such a funny word i knew a guy uh one of my cousin's friends and he would come to nash drive to nashville because we have a nike outlet in cool springs outside of nashville and he would come and like rack and he had an online store and he would sell shoes that Springs outside of Nashville and he would come and like rack up and he had an online store

and he would sell shoes. That was like his thing and he'd drive around but he also had like a full-time job but it was like this side thing. His side hustle.

But I feel like it paid pretty well so I'm like, I mean, great. That's awesome. Well, these people are passionate

about a certain little, you know, niche, whether it's shoes or NFTs and they kind of make it a side hustle and they might make

a little money and sometimes it turns into a full-time gig for some people. Yeah, and it's shoes or NFTs, and they kind of make it a side hustle and they might make a little money and sometimes it turns into a full-time gig for some people. Yeah, and it's not a bad thing, but it can't be your only thing. Like when you're still not, in my opinion, investing in the things that have a long track record that are predictable, that you know what's going to happen,

aka the market or 401ks, raw fire, especially with retirement, like that stuff for me is still a no brainer. And then once you've done that and you want to go dabble in something with some money, knowing it's kind of a gamble. I mean, that's your prerogative.

That's what you want to do. But, but it's fascinating that how it's trendy though, which I kind of appreciate. I'm like, I'm so glad money has become like being smart. It's cool to talk about now, which is fun. But there is a piece of this where anything, you, which I kind of appreciate. I'm like, I'm so glad money has become like being smart. It's cool to talk about now. Yes.

Which is fun. But there is a piece of this where anything, you know, I've said, if you follow the trends, you will fall for the traps. And that is my worry with what's happening is that these folks are falling into NFTs and they spend $2,000 on an NFT and they go to try to resell it and nobody wants it for $10. And that's what we're seeing. Which is happening. That whole industry. It's a reality that I was worried about.

Absolutely tanked. Absolutely tanked. So it's all a gamble. When you're doing something new and what's on trend, it's a gamble. You have to know that. So don't. So we're not mad at that stuff. Just to be clear, we're not like, no, those get off my lawn. It's just more of a, if you're following our baby steps, you're investing 15% of your income into retirement, meaning your 401ks, your IRAs, mutual funds, before we start going, all right, we're going to have some play money. We're going to invest in some shoes, some crypto. We're not mad at that.

But don't make that your investing plan overall. That is not a good strategy. Because honestly, the crypto and the nft the way it's gone is not good not good at all not good so i know someone rachel purse very personally who put their entire life savings stop it into dogecoin no no we're talking over four hundred thousand dollars george i'm right here james is right there i wish i could say it was james that make me it wouldn't make me happy i don't want, I don't wish that for James, but out of all the smart people in my life, that's not James. That 400 something thousand turned into 80,000 and now they are in debt to

fidelity for hundreds of thousands of dollars for margin calls. And it's greed is what it comes down to. Yeah. It's get rich quick. And it's what we rally against every day here at Ramsey Solutions. For 30 years, Dave has been rallying against this culture of Get Rich Quick and the trends change. It used to be zero down real estate and gold and buy this course and now it's sneakers.

Yeah. Who knew? Who knew? So it's part of what we do at our Building Wealth event, Rachel, which we didn't mean, this is not a pitch, but it's what we do

at this Building Wealth event we've been taking around the country. We've got four or five of these events this fall. And Dave does a great talk about what he's seen in 30 years when it comes to investing and get rich quick. And then we lay out the plan to get rich the right way. And it's usually a lot slower. It's slower and not as exciting. Can we say that, George? I feel like we would have a very exciting message. If we had a webinar or a seminar, we had all the youth in America there, and we were like, your 401k, guys, is going to get you. They're all going to stare at us and leave and go buy NFTs.

We're like, go fund your 401k. It's so great. And in 20 years, you'll be a millionaire. And then other people are like, this is awesome, this NFT, these sneakers, all of it. This is the future. This is what's happening. And it might, right?

I'm the humble opinion. Things may change. I'm not mad at anyone. But I need at least a long track record before I go and put my own money in it. Yes. And so that is the bigger issue. And these 16, 17 year old, 18 year olds, they're living with mom and dad probably. And some of them are amazing entrepreneurs. And I'm like,

these are the kids we're all going to be working for one day. These are really sharp, amazing kids. And what I want for them is to have a long-term success, not short-term success and flail out. And they're also trying to pay off their student loan debt because they wandered into that. And they also have credit card debt and a car loan because they're flexing for the gram. And so this is where it becomes you're doing too many things at once. You're never going to build wealth that way. That lasts.

Yep. So there's my soapbox for the day. It's a great soapbox. We did it. We did it. I think it's exciting and cool, George. Gary Vee, keep us up. The culture might not, but I think you're cool, George.

Wow. Clip that one out, guys. I'm going to save that. All right. Zach joins us in Birmingham. Zach, welcome to the show. Thank you, guys. I appreciate you guys taking my call sure um my i'm going to

preface this with i uh just drank the ramsey juice um my wife has been preaching this for a while um but i'm on board now so awesome um we are on baby step two um i just recently sat down and built a budget with every dollar and we have about $29,000 in student loans that I just finished my master's with and we have just a couple of thousand dollars in like medical bills from a recent birth of our child. My question to you is, is our, her parents have offered to give us the $30,000 for the student loan so it doesn't collect any money, any interest over the next couple of years. And our goal is to pay that off within the next year. Is this a loan from the parents? This is a loan, yes, from her parents just to pay it off. And so they don't collect interest.

And so our plan is to accept that. From my understanding, you may not suggest doing that, but my other question is those, the other couple of thousands and, um, debt is not, um, collecting interest. It's a medical bill. So it's just on a payment plan. Um, what do I still keep my 6% out of my, my match 401k. So do I completely not contribute to that since this money is not taxable or I'm not gaining interest or do I go ahead and contribute? Hey, Zach, how much do you make a year? Sure, I make $105,000 to $110,000 a year. Okay, awesome, Zach.

So no, do not take the loan from the parents. Suddenly you become in this entangled relationship where you owe them money and the borrower or slave to lender changes everything. You guys make great money. I would knock all of this out. Pause the 401k. Pause the 401k, knock all this debt out,

press play on the 401k a year from now once you're debt free and have a fully funded emergency fund. You guys can do this. You're trying to math your way out of it. Just focus, pay it off, and you guys get ahead on your own because you can. You can, Zach. You guys can do this. You're trying to math your way out of it. Just focus, pay it off, and you guys get ahead on your own. Because you can, you can, Zach. You guys got this. folks with the rising cost of everything these days a lot of people are worried about not having enough money in their bank accounts to get through the month. And the good news is no matter where you're at with your

money today, and no matter the state of the economy, you can get on a path to building wealth. At our Building Wealth live events, you'll learn simple common sense principles to build real lasting wealth. And this tour is, it's going swimmingly. We've already sold out two nights and the rest of these events are on track to sell out real soon. So if you're thinking about joining us, do not wait to get your tickets. Phoenix, September 12th, that's a new one we added, so you can get tickets to that because the next night, the 13th, is sold out. Sacramento, November 1st, sold out.

Minneapolis, November 10th, we've got a few tickets left, and San Antonio to finish out the season on November 15th. Passes start a few tickets left. And San Antonio to finish out the season on November 15th. Passes start at just $25, or you can get a four-pack starting at $60. Go to ramseysolutions.com slash events to reserve your seats now. Rachel Cruz will be there. I'll be there. Dave Ramsey, Ken Coleman, John Deloney, the whole gang. And it's a really, really fun time, and we love being out there meeting you all across the country. RamseySolutions.com slash events. Our question of the day comes from Blinds.com. Find out for yourself why they are the number one online retailer of custom window covering.

You get free samples, free shipping. And with the new promos they run every month, you'll save even more. Use promo code Ramsey to get the best deal. Today's question comes from David in North Dakota. My wife and I have been married for a few years and are discussing having children. Currently, we have individual medical plans through our employers since it's cheaper. My coverage is with a high deductible plan, which allows me to contribute to an HSA. My wife wants to be a stay-at-home mom,

so the entire family would be enrolled through my employer since children have significantly higher medical expenses do i individually than i do individually would it make more sense to stick with the high deductible plan and pay for larger medical expenses out of pocket or my hsa funds or should we switch to a high premium, lower deductible plan to cover the known large expenses? The old insurance questions. It's a classic. It's a classic. So this is something that my wife and I do currently here at Ramsey. We have the employer sponsored healthcare, high deductible healthcare plan with an HSA and we do it individually because we don't have kids. So it's actually cheaper. And so he's saying, hey, once we go, my wife stays at home. It's all on me. I'm on a family plan now. Do I stick with that HSA high deductible plan or switch to the higher premium, lower deductible plan? And we

usually say if you have a lot of known health issues, medical things going on, you're better off with a higher premium, lower deduct deductible but we just don't know yeah what life's going to look like these kids could be very healthy and you might be better off with the high high deductible yeah if you have the cash available and you guys especially aren't in a place where you're like yeah we have an emergency fund if something like huge happens uh i yeah i would tend to say the higher deductible and pay out of pocket so you're paying lower monthly um or or your health insurance for everything else is lower when you're paying for it. And you have the difference with whatever the premium

costs. It's going to be a lower premium. So you can take the difference and put that in the HSA as well. And the HSA is one of my favorite things, the health savings account, because it's triple tax benefit. It goes in tax-free, it grows tax, you withdraw it tax free. And you can invest the money once it's past a certain threshold, which is awesome. Yes. That can be part of retirement. It is. Yeah, totally. Yep. Use it. So that's what I would say. I would still stick with the high deductible, especially if you guys are in a good financial position. And you can always switch it later on if there's known medical issues that come up. It may make more sense to switch. But for now, I'm sticking with the high deductible plan with the HSA. That's my final answer.

Final answer. If this was who wants to be a millionaire. Love that show. 50-50, George. All right. Let's go to the phones. 888-825-5225. Marie joins us in Myrtle Beach.

Marie, welcome to The Ramsey Show. Yes. Thank you for taking my call. I am 65. I will reach the full retirement age early next year in April. I still work full time. I do have an emergency fund. I also still have a mortgage.

But I only have about $100,000 in retirement. So I'd like to get your advice on, I'm on business, and I'd like to, when I start doing Social Security next year, I'd like to cut back a little bit, and I'm not talking much, but maybe a third. Of how much time you're spending in the business? Yes. Which would lower your income? Because I'm kind of on burnout. Yeah, a little bit. What's your current income? Well, I'm sad to where I pay myself a very small salary through the business right now.

What did you report on your taxes last year? Well, my W-2 was like $40,000, so I paid myself a small, small amount. So let's say $40,000. That's how much I pay myself through W-2. What's left on the mortgage? $230,000. Okay.

$230,000. How much do you have in the business, Marie? You say you're paying yourself a small salary. I'm assuming everything else is... Are you investing it

back in the business? Like, is that other money else is, are you investing it back in the business? Like, is that other money being spent or are you, is it in a account for the business? Well, I have very low overhead in the business. So I leave all the, I mean, typically there's about $50,000 in cash in the business pretty much at all times. In a savings account? No, just in the business pretty much at all times. In a savings account? No, just in the checking account. Okay, cool. And you're asking us how can I retire with some dignity here,

knowing I have $100,000 to my name? Right, right. Well, yeah. I mean, I don't see myself ever just completely not working unless I can't for some reason. But, you know, I've really not done a good job, obviously, of, and I don't have any other debt except for my mortgage. And I'd just like some advice on how can I build that up. I'm throwing everything I can at the mortgage, the principal and the mortgage, each month to try to get that down. How much equity do you have in the house? So you said you owe $230,000 in the mortgage.

What's the house worth? I mean, probably right now I could get about $5,000 out of it. Okay. Do you live alone? I mean, probably right now I could get about five out of it. Okay. Do you live alone? Yes. Okay. I'm wondering, because this is a pretty massive mortgage to be heading into retirement, could you sell and buy something with cash with the remaining, let's call it, $230,000? Yeah, yeah. I mean, I've listened to Dave long enough that I knew that probably was going to be the one option at least. You know, the reason my mortgage is so high is because really a couple of years ago, the opportunity to be in my retirement home just kind of fell in my lap.

And I was like, okay, I'm just going to do this. Probably, maybe not the best decision, but, you know, so when I start thinking about that, I'm like, okay, do I, you know, do I give up what I considered to be my retirement home, which is down the coast, you know, happiness for retirement. You know what I mean? Well, you're not going to really be able to. But I know that is one option. Yes, because, I mean, this mortgage, Marie,

I mean, it's not going to allow you to really retire because it's going to take you a long time to pay it off and you don't have you know i mean you have a you know a hundred thousand dollars which is great that that's that's what you have but um in a case this house could be things stopping you to retire like if you could imagine yes living somewhere else but not having a mortgage suddenly what you have to earn per month to live significantly goes down when you don't have a mortgage payment that you have to worry about. It changes the scope of your retirement. I mean, it really does. And I think our homes, we get so emotionally attached to them because they are. I mean, they're a sacred place

in our lives. It's our homes. But what ends up happening is we put so much stock of our happiness in these four walls versus what you actually create in a home. And so I think I would love to see you be able to retire early with a sense that you don't have to worry about paying for a mortgage. And that would be including selling the house. Yeah. The theme here is that this house is not the dream you thought it would be because you're not going to be able to put food on the table and survive, but you get to live in this house.

So we're going to have to make some hard decisions here, but you can retire with dignity. We just have to make some sacrifices to get there. You got it, Marie. Thanks for the call. That puts this hour of The Ramsey Show in the books. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral?

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