The Ramsey Show - App - There Are No Shortcuts to Financial Responsibility (Hour 1)

Episode Date: April 22, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warshaw. I am joined by best-selling author, George Camel, in the house.

Tonight we're, today, also this afternoon, we'll be taking calls about your life and your money. So give us a call. The number is 888-825-5225 and we will chop it up together. We'll help you find a solution. Let's go straight to the phone lines where we've got Jerry in Denver. I'm sorry, where we've got Ashley in Jacksonville, Florida. What's going on, Ashley? Hi. Oh, my God.

I don't know whether I was just thinking this. I don't know if I should be excited that I'm on this show or if I should be just disappointed, but here we are. Yeah, I know. Thank you guys for taking my call. I really appreciate it. I am stuck in a little bit of a pickle, and I've come up, since I've stuck in a little bit of a pickle and I just,

you know, I've come up since I've put in the request to be on the show, I've come up with a couple of different options for myself, but, um, I just want to kind of get y'all's opinion and see what the best option would be. But basically my husband makes about 85,000 base salary a year. I made about 50,000 base salary. Well, he gets commissioned, so sometimes it's a little bit higher, maybe like up into the $110,000, but we've learned not to rely on any bonuses, so we go off of the base salary. Yes, that's right. Right, and then so we, last year, we realized, you know, we had a two-year-old, and I took a year off. I was suffering severely from postpartum depression, and we

accidentally kind of racked up a lot of money on our credit cards during that time. Okay. So now we're stuck at $35,000 on credit cards and the interest is all the way up to 27% on a couple of them. Yipes. Okay. Yeah. Okay. So I had a plan and you know what they say when you have a plan, right? Like it, throw it out the window. Cause that is not what's going to happen. Let me just say, cause we owned our home. We bought our home in 2021. We had about $75,000 of equity in it. So we put it on the market three months ago and we sold it and we got the $75,000. And I thought we were going to be, you know, pay off the credit cards and we're good now. What did you do? What did I do? I didn't do anything. Um, so, you know, it would happen for a reason. And I believe that God had me, um, I've been married for five years.

I've been with my husband for eight. And tell us what happened. He accidentally gambled a lot of money and we lost a lot of money um how much all of it uh 25 000 he lost so now you got so now well we've paid i paid off so as i didn't know that it's march madness i didn't know that it was going on um he was in a really bad spot mentally he's doing a lot better he He's in therapy. He's doing everything to fix this. He feels absolutely terrible about it. Of course, everything. Regardless, I was also terminated from my job last month. Oh, boy. Okay. So let me recap right quick. In case. Let me just recap. So you were you went back to work, you're still making 50. Now you've been let go from that

position or laid off so that 50,000 is gone were you able to take any of the money from the sale of the house and pay off the 35,000 of credit cards unfortunately I was trying to get it consolidated before I paid it off so I was literally calling debt I mean the collection I just want to know did you get any of it paid off? No. Okay. And have you acquired more debt since then? I want to have a full picture of this. So all the only debt in the world that you have is these credit cards for $35,000. Is that correct? And $11,000 of student loans.

And $11,000 of student loans. Any cars? We have a lease ending next year, but we own our other vehicle. Okay. I want to caution you from this point on. I heard the word accidentally two times. We accidentally, I had the baby, was feeling postpartum depression. We accidentally ran up $35,000 on a credit card.

My husband accidentally gambled away $25,000. Okay. These are things that are not accidents. I wouldn't away $25,000. Okay? These are things that... Are not accidents. I wouldn't call them accidents, George. He intentionally gambled this amount of money. For sure. He lost control.

Oh, absolutely. I mean, it was 10 days after I lost my job, and his brother and him really talked about, oh, I made $3,500 a night, and he was looking at it like maybe I can recoup some of her losses and that that right there that's the problem because you you you guys looked at this that you keep finding quick ways out you're like we have $35,000 of debt let's sell the house we'll take that equity but wait before we do that let's try to

consolidate it and before we do that let's try to gamble and see if we can get some money back. I feel like you guys are trying to take a shortcut. And each time it's ending in like major disaster. Like this is a... And so far, I'm not feeling a lot of responsibility taking on your part or your husband's part. It's been like, well, we had a plan, but then life... No, you chose to do the consolidation. You chose to get that lease.

You chose to gamble away $25,000. And I'm not doing this as a judgment because I want to beat you up. I'm saying this because we have to own our decisions and realize that life isn't happening to us. We're going to start happening to it. That's right. So are we done making excuses? Are we done with the bad decisions? Oh, absolutely. And that's, I mean, I definitely, you know, this is why I called him. My husband instantly said, he goes, you know that they're mean, right? And I said, great. We're financially abusing our credit cards.

We're financially irresponsible. We have no budget. We have no sense of direction. I need help. We need to click y'all's heads together. Y'all are treating yourselves way worse than we could ever treat you. That's true. We care about your financial future more than you do.

We want to see you win. And there's a way out of this. Number one, is he in Gamblers Anonymous right now? He's in therapy. He hasn't started any support groups just yet. Is it helping? I mean, you said that he was gambling March Madness, so it's only been, what, a month?

Yeah. But this is not the first time this man has gambled. It isn't, but it's always been, like, maybe $200, $300, and it's always been, like two three hundred dollars and it's always been like with me or like of my knowledge but this time he did it as far as you know it was a huge yeah it was a huge betrayal um we're marriage counseling we're in individual therapy we've been it's been it's i'm at this point now because of how long it's been i've had the time to go through all of the emotions so i think think now, instead of being like, oh, you know, taking ownership of this because I didn't have a play in that aspect of it, I messed up. I was,

you know, I, women can't win. We stay home with our babies and we can't afford it. You can win. You can win. You can win. I don't want you making any more excuses. What I want you from this point on, I want you to take, take responsibility, like George said, and we're going to give you a plan to walk out of this. Right now, your A1 is you're looking for new employment. Whatever you were doing before, let's look in that market and see if you can make $50,000 again or higher. Take this as an opportunity to bring in more income.

With your husband, he needs to be, if $85,000 is the base salary, he needs to be going bananas to get those bonuses. That's right. And at this point, you guys are walking through the baby steps. We teach it here all the time. Baby step one, put a thousand dollars aside. Do you guys have any money saved anywhere besides the 50,000? 15,000. That's it. That's all we have left. 15 or 50? 15. 15. Okay. So we're taking that. We're putting a thousand dollars aside. That's your emergency fund. And then you're taking the rest. You're paying off that student loan today.

Today you're paying it off. And then you're taking whatever's left and we're going to start knocking out these credit cards little by little. We don't need to consolidate it. We don't need to call anybody to do anything for us. You guys need to methodically take that margin every single month and put it towards that credit card. We're going to get you set up with every dollar so that you can budget as effectively as possible. And listen, today's the day they draw a line in the San George. Life's not going to just happen to you anymore. You're going to happen to it.

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Hey, the Live Like No One Else cruise is back. call it don't call it a comeback don't i'm calling it a comeback george it's it came all the way back from 2020 some of you remember we tried to do this back in the day and uh the virus had another plan and now you know we can't keep you can't keep a good cruise down george keep us at bay literally hey that's good that's good they should have used that in the marketing. They should have. Listen, this is your chance. Don't miss the boat.

How about that one? Oh, just saying. All right. Join Dave and all the Ramsey personalities. I'm talking about you, George, me,

the big Eagle himself, Rachel Cruz, Ken Coleman, John Deloney. Did I get her? Get everybody. We're all going to be at sea March 22nd to 29th. The Live Like No One Else cruise.

This is what it is. And so for those of you who are on Baby Step 4 or above, this is the ultimate debt-free celebration. And I stress, George, Baby Step 4 or above, because if you're on Baby Step 2, we don't want to see you on this cruise because we want you paying off your debt instead. Is that right?

Yeah, this is honor system. We have no way to officially pull your credit report to make sure you don't have debt i'll be there doing that yeah that would be fun i'll be checking everybody on board but this is gonna be we got some special guests man we've got some cool friends steven curtis chapman uh steven bargazzi nate bargazzi's dad doing magic and comedy dina carter carolyn xavier another great comedian, Wynn and Phil, songwriters of some of the biggest country hits you've ever heard, the behind the scenes guys.

So this is gonna, Manit Chauhan as well. I love Manit. I love anything cooking related. Food Network star and wonderful chef. Yeah, apparently she'll be doing some food demonstrations.

That's great. That's where I'm going. Listen, I'm going because of the locations. We're going to Turks and Caicos, St. Thomas, San Juan, the Bahamas. Listen, you do not want to miss this. Man, the tickets are going so, so fast. We started posting about this last week, and the tickets started just zoom-zooming.

Again, we tried to do this in 2020, and it sold out in a couple of weeks. And so now that we're bringing it back, these cabins are getting booked up with the quickness. Well, there's more demand. Think about it. In the last five years, how many people have gotten out of debt, got the emergency fund, began investing? So there's even more demand now. People saying, I wanted to go, now I can go. That's a very good point. So just know VIP upgrades are already sold out and the suites are almost sold out too. So trust me, as someone who worked on cruise ships for 10 years, you need to get these tickets because you want to get the good, good, get you a room with a balcony, with a window. You know what I'm saying, George? That's what you need. Get that good room. Book your cabin

at ramseysolutions.com slash cruise. That's ramseysolutions.com slash cruise. Do it today. Oh, I'm excited. Let's go straight to the phone lines where we've got Jerry in San Jose, California. By the way, if you want to call us, the number is 888-825-5225, and we'll hook you up. Jerry, what's going on, buddy? Well, Sir George and Madam Jade, thank you for taking my call. I appreciate it. You bet. Thank you. Of course. So here's the deal. My wife and I, we are having a difficult time trying to decide between living close to our aging parents, even though it means that we kind of have limited income opportunities and even more expensive housing versus moving further away to kind of improve our income and maybe even find better housing opportunities. Okay. Where do your parents live? Sorry, go ahead.

Where do your parents live that it's more expensive and less opportunity housing-wise? Well, so Central Valley of California, I'm sure you're probably already aware, housing is somewhat expensive in the state,

and we do okay, but we're getting to the point where we're having a tough time making the ends meet. Okay. So you're already there. Yes, ma'am. So it's a matter of staying there versus moving somewhere that makes more economical sense for you.

That is correct. Is this both sets of parents? No, sir. My set of parents are really my mother. She does not live in California, so that makes it easier. Where does she live? And she'll get to you then. Are you trying to, is the other option moving by where she is?

That's what I'm trying to clarify. I see. Well, the option we're considering is either A, living kind of halfway between her parents and my mother, or just moving where we could get the best income. Where does your mother live? My mother, she lives in Denver, Colorado. Oh, boy. Two very high markets.

Okay. I don't know if this is even a possibility, but I'm throwing it out there. Can they move closer to wherever you land? Well, that is actually, that's a great question. So my mother has expressed the possibility of doing that. She's even said, she said, wherever you guys end up, I'll come and move next to you guys. I think the challenge is with my wife's parents, they're not quite as willing to move, and that's where the rub lies, yeah.

What is the nature of their care? Are they actually in poor health right now? No, no, no. They're doing great. They are in their 80s, but they're in very good shape for being in their 80s. I don't see why you couldn't just move further away and visit when you need to. And if things take a turn, you can always reassess.

Yeah. Yeah. I think that's kind of where we are leading. I guess for me, the concern was, you know, let's say we, you know, we take off, we do our thing and then, you know, her, you know, we take off, we do our thing, and then, you know, her, you know, mom or dad starts going downhill. And so there's the possibility that, you know, my wife might be living, you know, months, hopefully not over a year, but, you know, just taking care of them while I'm holding down the sport. Is that the plan that as they get older, you guys would be primary care providers? I think so. That's kind of the assumption. It's kind of like, yeah, what we thought we would be doing. Well, I would definitely, instead of assuming that, I would definitely speak with them because and find out what they have in place. They might have long-term care insurance. They might have something in place or have an alternate plan since, you know, they're the people that are in question here so i

would definitely speak with them and find out and that way you guys can make a plan together that makes sense um and honestly as the caretaker you guys are um i'm trying to say this delicately it's your time and resource and effort so in many ways it might make sense for them to come where you are so that you can afford to take care of them. Because living in, you know, Central Valley and also having to take time off from work, these are all things that you guys are going to have to consider in order to make this work that's also kind of what's been coming up in the conversations between my wife and I she's actually not too far away from me and and she's she is confirming she's saying that is the expectation of her parents okay kind of be there for them so then then I think the next set of conversations and George you can jump in here I think the next set of conversations is you getting with them and saying, here's where

we're at. You know, the assumption is that we're going to take care of you guys as you continue to age. And we're happy to do that. But in order for us to do that, it's got to work out for us financially so that when the time comes for us to retire, we're also, you know, in an advantageous position. Yeah, that's the big caveat here is I don't want you guys to have your financial goals held back because you're

taking care of the parents and then one day you wake up and go, oh crap, we're still broke. And we had nothing to show for all of our hard work. So if they have a big nest egg, I'd rather see them get quality in-home care if that's the option, but at least roll out all the options, put the conversation, put all the cards on the table, and then make a decision when the time comes versus what could be five years from now. Absolutely. Either way, I think that you guys have to get to a place that is sustainable for your lifestyle, for you to be able to live and have a home and take care of yourselves. That's a big, big piece of this puzzle. Yeah, I absolutely agree. And I think that's, you know, like you said, it's just becoming more and more apparent that that has to be our focus if we want to, you know, make anything of ourselves and for our future generations.

How old are you, Jerry? 39. 39. Okay. And what's you guys' financial outlook? Do you have debt? Are you doing well? So we do have debt. Actually, it's so funny. We were doing pretty good on the Ramsey program, but I got a little dumb and I got a car loan. You said this was funny, Jerry. Listen, from here on now, I want you guys working the baby steps. Yes, mom and dad, you need to think about what the future holds for them. But A1, Jerry, is you and your wife getting your financial situation in order. And that means paying off this debt and, hey, never get a car loan again. No more car loans. Put your financial mask on first, buddy.

I know that's right. Yes, that's a good analogy, George. And give me a better punchline next time. That was not that funny. This is The Ramsey Show. Hey, you're listening to The Ramsey Show. I'm your host, Jade Warshaw. I'm joined by your other host today. His name is George Camel. He is a best-selling author of Break Free From Broke. Breaking Free From Broke.

I should say it the right way. It's active, I guess. It's active. We're Breaking Free From Broke. It's a great book. You should pick one up if you haven't. And if you want to give us a call, the number is 888-825-5225. We'd be happy to take calls and discuss your life and your money. That's what this show is all about.

And with that, we're going to go straight to the phone line and talk to Chase, who's in Orlando, Florida. What's going on, Chase? Hey, guys. So how are you doing today? We're doing great. How can we help? Yes. So I just, well, finished up baby step number three, which is I did one year of a fully

funded emergency fund just because I'm a little bit paranoid. Okay. So basically, I'm still step four, step five, done, working on. But what I'm struggling with is step six, paying off my home early. So essentially, I have $500 a month to play with. I only owe $107,000 left on my mortgage. And to me, I think that I'm ready to build wealth and start investing that $500 versus paying down my home's equity. So I'm just calling in to kind of get a little insight on what I should do. And you're already investing your 15%, correct, off your gross?

Correct, into my employer's 401k. So tell us why you're struggling with doing all three simultaneously. Because we found that people who walk the baby steps, when they embrace this method, most people pay off their home within 7 to 10 years. And we've done the largest study of millionaires that there are. And we have found that most millionaires, 67% of millionaires have paid for homes that they paid off. And it makes up about a third of their investment portfolio as a whole. The other two thirds goes towards, you know, their employer based retirement accounts, or if they have Roth

IRAs, that sort of thing. Gotcha. I guess my big thing is I know my house isn't going to be, it's kind of that it's max equity in my opinion, because it's not in the nicest area or anything like that. So paying that off quickly versus having the money invested, I feel like the money invested, I get a bigger ROI in my investment long-term. What's your mortgage rate? My mortgage rate is 3.25%. Okay. And you're saying I'd rather invest that extra 500 bucks instead of paying down this 3.25% mortgage? Correct. And what would you invest in it?

My mortgage payment right now is only $800 a month, and that's including escrow. And what's your income? My income is about $65,000 to $70,000 a year, depending on commissions. And how old are you? Sorry, one more question. 27. So the truth is you're going to become a millionaire regardless of what you do if you just consistently invest and never go into debt again. So what you're trying to do here is you're saying, I want to build wealth faster in the short term,

maybe, because you're also speculating that your investment will make more than your forced pay down of 3.25%. Right. So what would you invest it into? Some kind of mutual fund that's tracking the top companies. Okay okay and how long would you leave that money in there uh since i'm only 27 probably till i'm in retirement age okay well the other piece is what if we could free up that mortgage payment you're making or at least most of it aside from property taxes and insurance. How much is actually going to principal and interest out of that payment? So the payment's $880 a month. $700 of it is going to principal and interest.

So the other $180 goes to my insurance and taxes. That feels real low. But okay. So let's imagine you freed up $700 in the next few years by aggressively paying down the mortgage. That's $1,200 you could be investing. That's serious. Right. And you're also not taking into account that the mutual fund could go up and down over time,

and you're going to be watching that money, and you're counting on this spread to happen. And so at the end of the day, you might make some money, you might not, but I would rather see you be free psychologically emotionally and financially by paying off the mortgage yeah that's a big part of this that i think we it's you can't factor into an equation is the peace that you feel when you pay off a mortgage you just told me you were paranoid to the fact that you have a year of emergency fund but you're not paranoid about owing 107 000 to a lender who could take away your home if something happened. I can see how that's contradicting for sure.

So if I'm you, if you're truly paranoid, then I would want to see you pay off your house super fast. And if you hated the way it felt, then you could always borrow against it and get a mortgage again. But no one ever does because they love living in a paid for home yeah definitely just got to get over the fact that i'm no longer seeing any type of account grow because what i liked about the emergency fund is i'm seeing that account grow you are seeing 15 grow you are seeing it grow i think people forget like with when every time you pay off your mortgage that's money back in your pocket every time you make payments it's money back in your pockets it's you're not losing that equity and it's equity and even if you're not in a great area you still could build another 107 000 in equity your house isn't going down in value no unless

you live in a mobile home do you right i do actually yes then your house is going down and going down in value you should have listen You should have told us that from the jump, Chase. Let's re-talk about this because, yeah, I don't necessarily like the idea of you staying in a home, in quotes, that's going down in value. Regardless of pay it off early or not, you need to get out of this mobile home. And the good news is you've got a bunch of money sitting there. You've got six months of savings that you don't necessarily need. You could put that towards a down payment if you wanted to, since you over-saved. Yeah. And in my opinion, I'm on a good size lot, so I could probably sell it for like $225, $230. So you would walk away with $100,000 in equity? Oh yeah, about that or

more. And that's the move. If I'm you, by the way, what do you have saved? Tell me how much you had. In my emergency savings, I have $20,000. But in my retirement accounts, I have $70,000. So the $20,000, that's your one year of saved expenses? Yeah, because my expenses just total $1,500 a month. Okay. Times 12 is only $18,000.

Then I changed my advice. I changed my advice. I would not touch that because I think wherever you're moving to next, 20K is probably going to cover you for three to six months. But I would get out of this mobile home and I would try to recoup whatever you can and get as much value out of it while you still can. But you're right. Staying in it, you're just losing money hand over fist. I've never seen a millionaire say the key to becoming wealthy was I got in a mobile home and the payment I would have paid, I put into investments. I think you're going to be wealthy and I don't think this strategy is going to have anything to do with it. And then I think

you're going to feel way better about paying off said mortgage because it's actually going to be a mortgage that actually does go up in value and you can buy in a better neighborhood. Now, what you were saying makes a lot more sense for george and i but i think that's definitely going to be the move going forward oh that was different we got there all right let's try to talk to let's see sarah real quick she's in charleston south carolina what's going on sarah hi i'm doing good um i had a question about whether or not we should save for a house in about two years and buy or if we should just invest that into our IRA. Okay. Well, let's find out if you're in the position to do either. Do you guys have any debt? No. So we're on baby step four-ish. Perfect. We have no debt at all. We have two fully paid off cars.

We have $70K in CDs and sorts with a high APY. Okay. We have $5K in our checking. We have $55K in our savings. We have $14K in a Roth IRA for myself and then my husband's IRA, his work is matching. We have 48K. Okay. And we were doing 10% and I wanted to increase that to 15%. Yeah. So technically you guys are on baby step 3B or baby step 4. It's up to you. You can do one before the other. Like if you say, you know what, for now we're going to stop investing and we're just going to save up our down payment. You can do that. If

you think that you can save the down payment in two to three years, you could make that move. If you think it's going to take longer than two and a half, three years, then I would say start to invest some so that you don't lose out on that time. But you know, you've got 70,000 in CDs. When do they mature? In between a year and 10. Some of them are 12 months. Some of them are five. Some of them are two. Well, then I would... I think the longest one was 10.

Okay. Well, that gives you a little bit more time to save up to see what you can afford. Use the calculator on ramseysolutions.com, how much house can I afford, and start running those numbers to see what you need. And I think at this point, it's really just truly up to you guys. Yeah, the key is how urgent is this home purchase? You can invest anywhere from zero to 15% while you save up that down payment quickly. That's how to think about it. Love it. This is the Ramsey show if you've got questions about your money we've got answers I'm Jade Warshaw your host George Camel is your host today as well and if you have a call if you

have a question you can call in the number is 888-825-5225 and a nice gentleman will pick up and screen your call and if he sees fit you will make it to the airwaves. That's how this works. We're going to go to the phone lines. We've got Ashley in Fort Worth, Tejas. What's going on, Ashley? Hello. Thank you all so much. I'm so excited and nervous all at the same time.

Us too. Don't worry. We won't hurt you. Okay. I hope not. It's embarrassing a little bit. Some of the stuff I'm going to tell you. But I've been listening to the show for like 30 days and I finished reading Total Money Makeover. My husband and I are both high earners, but I've made a lot of really stupid decisions with the money that we've been blessed to make up to this point. So since I've been listening, I've paid off about $40,000 in debt, which is my student

loan and then a small equity line that we had on our home, which was really kind of silly that we had it, but it was just this little pet, as y'all said, that we just kept there because it was a low payment and didn't really seem like much of anything, but we've paid that off. We don't really have any other debt other than our vehicles and our home what are the vehicles so we both owe about 50 000 on our car so 100 total 102 driving some nice whips you know yeah we've and we've made you know we've bought new cars every couple years we've just rolled a bunch of negative you know if it's over 50k it's a whip, Jade. I learned that. Yeah, okay. I'm with it.

I'm with it. So you said you're high earners. Can I just know what you guys earn combined a year? Yeah. After we pay the IRS their pound of flesh, about $750 would be our combined. Mamacita. What do you guys do for a living? We're both work and sales and leadership positions.

Very cool. Well, you're crushing it. You guys are rock stars in that regard. We're hustling. And the good news is you can get rid of these cars probably like today. How much do you have in savings? We have about $300. We just struck the IRS with that check.

So $300 after that. Wow. And that's non-retirement, right? That's non-retirement. That's non-retirement. That's non-retirement. Sweet. What are y'all saving for, an apocalypse? Listen, George, anything can happen.

I guess. Wouldn't shock me in Texas. They're always prepared over there. Well, why don't we pay off the cars today? Yeah, what's stopping you? I guess just the fear of not having the cash sitting there. I don't know. You'll have $200,000 left over and

you'll make another $200,000 in the next few months. I know. Where's this fear come from? I think we need to address that. Well, let's see. What's your monthly budget? Like what's it take to make your lifestyle tick each month? That's been the fun part about this whole thing is we never really had a budget and we had credit know, we would just pay them off every month without really even looking at it, you know, which is silly now that I've listened to y'all. But we've gotten rid of all of our credit cards and we actually sat down and made a budget together. And with investing, savings and giving combined, we can live really, really well for about $28,000 a month, which if you do the math on our... I would hope so.

Yeah, I mean, that's investing 15% in addition to what the company matches for my husband and is already taking out and all of that. What's your mortgage payment? It's $3,200. Oh, that's nothing. And that has our taxes rolled into it, yeah. We have a 2.7% interest rate, so super low.

Is it a 15-year or 30-year? It's a 30-year. Okay. So honestly, with your mortgage, that's very frugal for what you're earning. If I were you, my goals would be, like George said, I'm paying off these vehicles today, paying off these whips today, like George said.

Thank you, Jay. Yes, you're welcome. And then, yeah, keep doing your investing, your 15% plus plus. And then my next goal is what do you owe on the house? So that was another question I had. We owe about $460,000, $462,000 if I'm being exact. But we could sell it for $1,00050,000. So we have really great equity sitting in this home. That's awesome. Do you want to sell it? A little bit of a remodel. I mean, I love to move, but I don't know that that's always the best choice. Well, it's not about best. I mean, you guys make great money. You can stay in this house. I don't want to do it just because there's equity there. I want you to move because you want to move and it's the right thing for you guys. So you're going to sell it, you get a million, you take

the equity from that, you'd roll it over to the next house. Is that the goal? And you want to stay in Texas? Well, that would be my thing is we could pay cash for a new home and have absolutely zero debt. Sure. But you could also, if we're going to be real, you could pay off your mortgage this year. That's also true. So to me, that's not the deal breaker of we could pay cash. Well, you could pay it off in the next year making $750,000. So I'm not concerned either way, but if you're going to filter this through the baby steps, we pay off the cars. You still have $200,000.

That's plenty of emergency fund. Continue to invest 15% of your amazing income. You'd probably run out of spots to do it and go to a brokerage account eventually that's right and then anything left over let's just attack the house with do you have kids i do we have two kids two kids okay yep yeah i mean two kids four and and um 14 and we have you know college funds set up for them and then um just little like custodial brokerage accounts set up for them. Listen, I love George's plan. And I endorse that. I co-sign that plan.

I think for you guys, the hardest part is you make so much money. It could be easy to get sloppy because it's like it feels like it's easy to clean up a mess because there's a lot of extra cash sitting there. So I think for you guys, the discipline is going to be, we are on a budget. No matter what, we get to decide what the budget says, but we follow a budget. And we create a plan for our money. 10 grand of fun money and a line item for you guys. Yeah. Who knows? But without making that budget, you're going to wake up and go,

where did all of our money go? We spent $60,000 on a credit card this month and that's why i love you cut up the cards you're sticking to your own money you're making the budget and then you can have your fun in the plan that's right it's freedom to spend freedom to spend all right real quick let's go to tommy he's right here local in nashville tennessee what's going on tommy hi there um i have two quick questions for you guys. They're not quick, but they could be quick. Well, we'll make them quick. We got about three or four minutes. But long story short, I have done the baby steps and I kind of fell off the wagon.

So I did the first three and we have no debt and we're a single income household. So the issue kind of is during baby step two and three, where I have side jobs, my wife's home with the kids and, you know, hustling to make it happen. Now that that has happened, I kind of, and I stopped contributing to my retirement account during that time. It's been a few years now. And now we kind of just spend, we're kind of at a set point of our budget. We don't really have extra to go back to that. We've had two more children since then. And you know, just life is just there. So I'm not just counting on a bonus and a raise in the future, which I am counting on the next year. What's your income? I'm not counting on that. About 100 to 105. Okay. Are the kids in daycare?

No, they're all at home with mommy. Okay. And what are you investing right now, 15%? No, so we're not right now. You can't financially? So when I do, I have every dollar. So I'm doing all right. But when I am putting all the apps,

putting everything into an envelope, I have about $500 or $600, which would be about there, but then that always gets consumed. I end up transferring it back from savings at some point. But if you're investing, that's coming out of your check before you ever see it. No, no, I'm not investing. He had paused it to pay off the debt, and now they're realizing they don't feel like they have the margin. There's something eating up this $100,000.

What's your mortgage payment every month? About $1,900 something, so $2,000. So $2,000? That shouldn't be it. You have some massive expense in your budget that we don't know about. Because if you don't have daycare... Yeah, we have no debt debt, no daycare. I think the mortgage is the biggest one, but we're going to sit down, get back... You're probably bringing home, what, six grand a month?

About six grand, yeah. So where does the other $4,000 go? Even food and insurance, utilities, all that? Probably close to $800,000 to $1,000. We're not even halfway there. When you went through your budget, what was the biggest line item besides rent? Because for most people, it's daycare or school tuition. If you don't have that, what was your second biggest line item?

You should know that off the top of your head. And if you don't, that's where the problem is. Here's the thing, folks. You got to know how much money you make, and you got to know at least off the top, the top three most expensive line items in your budget. If you don't know that, that's your homework for tonight. You should know it's rent, it's daycare, and then it's my, you know, if it's your car payment or whatever that next thing is. That way you know where your money's going. Those are those top three things. Make sure you do your homework tonight, folks. This is The Ramsey Show.