The Ramsey Show - App - What Are You Willing To Give Up for Financial Freedom?

Episode Date: February 24, 2025

from the Ramsey Network it's the Ramsey show I'm Jade Warshaw next to me is George Campbell we are taking calls all afternoon about your life and your money. And if you'd like to get involved, it is a live call. You can call the numbers 888-825-5225. That will get you on the line. George, you ready to get this thing started? Game on. Let's do it. We got Chris. He's in Seattle, Washington. Chris, what's going on? Hey, guys. So happy to be on the show. Thanks for having me. You're welcome. My wife, for the last two years, has wanted to get a mommy makeover. And I haven't heard an answer to this question yet, so I figured I'd give you guys a shot. We collectively make about $180,000 a year. We have two businesses that we own and operate. And last year, we completed Financial Peace University, and we paid off $25,000 worth of debt that we had. We're currently...

Thank you. Let's see. We cut up all our credit cards, and we have a net worth of about $950,000. Wow. Awesome. Yeah. So it's been a hard road, but last year I decided to spend some of my free time working more and opened up a handyman business, and I added about $75,000 on top of our regular income last year. Way to go. So is that on top of the $180,000 or that's what you're at now?

That's on top of the $180,000. Wow, good job. So you upped it to $250,000. Is that sustainable? Do you want to continue doing that? You know, I turned 42 in March and I want to kind of work hard in my 40s, so hopefully it pays off and we can retire when we want to sell the businesses in our home and get out of Washington. Sure. What's your question today?

How much is the mommy makeover? It's somewhere between $28,000 and $35,000. And I have about $50,000 set aside on top of our emergency fund. Thank you. Okay. Is that what you earmarked it for, the $50,000? Is that what you guys said this money is for, or was it originally for something else? No, we've been putting it away for this,

as well as I have a daughter in college and our responsibility for her is about $14,000 per year. And we've been paying that, you know, in full in cash when it comes about. And, you know, my son just got braces and paid that in cash. So you're cash flowing everything. There's no worry about the future and retirement and kids' college. And you've got some extra money and you want to do the selective surgery for listen mom mom is getting a new lease on life yeah mom is getting mom is getting an upgrade she is amazing and um she has trouble spending money on herself and so like you know i told her

i've been putting this money aside and um i i want i want to pay for it for her. Does she want the surgery or do you want, does she want it or is this a you thing? No, she wants it. I'm happy with the way she is. She's just, she's been going through a, you know, a health thing and getting herself in shape and changing her diet and all this stuff. So this is kind of the icing on the cake for her. For the good of the group and knowing this is a family-friendly show, can you entail what this $35,000 includes?

It would be a tummy tuck and a lift. Okay, good. Got it. Good. Here's the thing. I think guys do more to their forerunners and spend more on that, so I got no problem with the selective surgery for all the guys, but I can't believe she spent all that.

Listen, bro, let's talk about that under-light LED kit you needed to have. Live like no one else so later you can live like no one else. That's what it's about. Right. You know, I want her to be happy with her body and happy with herself, and I think that she deserves this so much. Yeah. I think you can afford it. You guys have been really smart with your money.

Congratulations. You guys are young and you've done a lot. And yeah, well, my only question would be, are you guys done having babies? We are. Okay. No more babies for us. We got... And are you having the elective, an elective surgery?

No, I spend my money. My play money goes to cards. Got you. Okay. There we go. Yeah. All right. Well, you guys have done really well. You're doing it by the book.

You guys are debt-free with the emergency fund. You're cash-flowing everything in your life. You're on the verge of being a baby steps millionaire. And so this might be a shock to a lot of people listening. I can't believe they said that. Listen. Do it. We never said don't spend money.

You know, I'm a frugal guy, but once you've hit that different. Listen, we never said don't spend money. You know, I'm a frugal guy, but once you've hit that different place financially, they make a great income. It's a small part of their world and they're super young. Yeah, I love it for them. That's a really, really good treat that they get to enjoy because they've done everything right. All right, let's go to Kevin. He's in Spokane, Washington, the city I was born. What's up, Kevin? How can we help? Hi, this is Kevin. So I have a question about what to do for the future. I'm 18. I make around an average of $14,000 a month doing home improvement sales. And right now I'm saving about 96% of what I make and putting it between S&P 500 and some other funds just to pull cash out of really easily. I want to retire by the time I'm 26. I want to have the ability to retire,

maybe not stop working, but I want to have the ability through dividends and rent from my renters to retire. How would you best position myself to get to that position by 26. Have you determined how much money that is? Like, do you know what that amount needs to be in your portfolio where you'll be like, hey, I'm working because I want to at this point? I want to make $12,000 a month from properties and dividends. I'm not sure the exact amount I'll need, but I do know that I'll need quite a few properties and quite a bit of cash in my accounts in order to make that income. Okay. That was the other question. What part of it is you, is this, let me ask this clear question. Is this you really drawing the money out or is this a more of a theoretical, I could retire, but, or is this you really,

you're pulling the money out of the portfolio? Pulling the money out of the portfolio? I mean, I don't want to pull the money out. I just want to let it sit and give me money. So you really would be drawing out that money to live on, is what I'm saying. It's not just a theoretical feeling that I know I have it. Okay. George, you're looking at some numbers over there.

Number one, way to go. You're 18 and you're looking at some numbers over there. Yeah, I got two questions. Number one, way to go. You're 18 and you're making $14,000 a month legally? Right? Is that true? Yes, sir. Number two, who hurt you? Where did this idea come from that I got to have this all done by 26 or else? Where did this idea come from?

Well, when I was 14, I was watching a bunch of financial shows, including yours, and I realized what I really wanted was to have the ability to say F you to anyone when I reach 26, and I want want to make sure the motive is a healthy one because I get a lot of calls and questions from people who are in your shoes. They don't make the money you make, but they go, I need a million dollars by 26. And I go, why? You go, well, I just, I feel like I'll never be wealthy. And so there's this element of just chasing and this element of, I don't want to get burnt out. So I'd rather you sink your teeth into something that you love to do and continue to work. But the way you phrased it, you said, I just want to be able to let go of this. So here's the deal. 144 grand a year, that's 12 grand a month invested. Eight years of that at a 10% return, you'd have 1.6 million sitting in a taxable brokerage account. So that's one strategy. That's without any other rental income or anything.

That's just if it was spitting out 10% on average. I understand that's a crazy thing to say. It's not crazy, George. I'm right there with you. So that's one strategy. Okay, $1.6 million. If I could take out $100,000 a year, that would probably last me a long time. I don't know that you're going to retire off that forever, but that'll buy you some thinking time to figure out what you want to do for the rest of your life.

Yeah, I don't know that I would draw off that. I think I'd rather have it there knowing that I have given the middle finger and I'd be motivated to do other things in life. Just know the goalpost is always going to move, my friend. So stop chasing. This is The Ramsey Show. There's a time in your life and the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on. Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership

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you can click the link in the description. Get that book today. All right, George, let's go to Baltimore, Maryland. We've got Sam on the line. What's up, Sam? Hi, thanks for taking my call. New listener as of about a week ago. And my question is, should I be paying off all of my debt prior to starting to save for a down

payment? And if yes, should we just keep renting? I think my future fiance, we're going to be engaged soon, will be ready to kind of buy land or a house before I am if I do have to wait till I get all of my debt paid off because I have quite a bit. Awesome. Well, thanks for joining us. Glad you're a new listener. Yes and yes. So yes, you're going to wait until you have all of your debt paid off, you have a fully funded emergency fund before you begin saving up for the down payment. The answer is simple. You want to free up as much money as possible to get out of debt as quickly as possible. And so trying to do seven things at once means you're not going to accomplish any of it. You're going to stay in debt. You're never going to make progress on the down payment. So just aggressively attack the debt and keep renting

while you're at it. How much do you have left? So I'm just starting to pay it off because I just switched from a W-2 worker to a 1099, like consistent contract. Um, so I was making, I'm making enough, but like to make all my payments, everything's current. Um, but I just haven't been able to get out of it because I was living above my means for a little while. How much is it? I have 160 myself. He was debt free, but he just got a truck. So he's got about 50. He makes more than I do. I make 85 and he makes 138 a year, but he also does some side jobs. So that's kind of like his base. You said future fiance, you guys aren't engaged just yet? No, but we do live together and we split our rent and expenses pretty evenly. So one conversation, I mean, this is kind of aside from the point, but also very important

to it, is I would start having conversations now, since you do see that future of you guys getting married, I'd start having the conversation of what our philosophy is about debt and what do you think it will look like if you become a married couple? Because on the one side, I hear you saying, I'm working and fighting hard to pay off this debt. I want to know, should I pay that off before we buy a house? Which lets me know there's part of your brain that's like, debt is bad. I don't want to stay this way. But then you've got your future fiance who's just bought a $50,000 truck, right? So you guys need to align. Now's a good time to start having those

conversations is what I'm saying so we have had those conversations I'm kind of bullish on it's my debt like even though we're going to be married it's my problem to solve and you're right he's offered to like yeah he's offered to like um pay additional like money towards our rent to help me get more of my debt off my plate um and we're we are aligned but at the end of the day like if he wants a truck and he can afford it on his salary i don't want to like hold him back from that but once you get married and this is the question that you you should be asking when you get married are you going to view the finances as now we're one, or is this separate living going to continue? Because there's a reason that you're living separately now, and it makes sense. You're not married. It makes sense that you do your debt,

he does his debt, and you have your thing, he has his thing. That makes complete sense. But when you're married, the healthy way to do it is to become one and to come together on that. So that's kind of why I'm bringing that up because the truth is, who knows? I don't know what you guys' timeline is. If it's six months from now or a year and a half from now, but that $50,000 has the ability to become yours as well when you get married. So that's something for you guys to talk about here at Ramsey. We believe, we believe that marriage makes you one. So when you come into the relationship, it's our income, it's our debt. These are our assets.

And this is our bank account and our budget. We find that when people do that, not only do they have a happier marriage and the studies do show that they're happier, but they have a more successful marriage. They're able to build debt or I'm sorry, they're able to pay off debt faster and build wealth faster. And so there's a lot of positives that come to sharing your money, not just financial, but also in the relationship. Yeah, I come from separated parents, and that wasn't a great financial example.

So I'm trying to make sure if we do buy a house, I have skin in the game and like it's not just all on him so yeah uh it's just been um he's very good and we have healthy conversations about it I just feel like uh guilty about it hey before you get a lot in let's send her a copy of know yourself know your money that's Rachel Cruz's book I think it'll give you some insights on just how you feel about money and why you you know, why you spend the way you do, why you make the choices you make, why you're bent towards certain behaviors. I think that'll help you and your spouse to kind of see each other. Also, I want to give you both Financial Peace University. I think that'll be good just to get you guys on

the same page and get you started looking at things the same way. And that's really going to help you in the future. What do you think, George? Well, you know, when you mentioned, Sam, that he can afford the truck, by definition, if he couldn't pay for it in cash, he couldn't afford it. So what you're saying is he can afford the payment. That's fair. Right. And what I found to be true is that everyone can afford the payment until they can't. And until it steals from their paycheck, it steals from their future. And so if he really cares about this future dream of land and marriage, I would go, you know what? The truck is, I'm going to have some delayed gratification and buy the truck when I can afford it in cash and probably buy one that's a lot cheaper right now because I got, we got her debt to clean up

and I'm willing to make some sacrifices to get us to a better place financially. Do you feel a difference in that? Yeah, I'm actually selling my beloved car, so. So you're making sacrifices, right? Yeah, well and he he has offered he even said like let me sell the truck i'm just so i would feel really bad i would that's true love if a man is willing to sell his truck for you he might be the one why would you feel bad tell us more about that he's he's making a sacrifice that you've already admitted hey it's

it's not the best thing i mean it's fifty,000 of debt. Why would that make you feel bad? Because he'll have his paid off in like two years, maybe max, because he works a lot of overtime. But I'm going to probably be in this like three, four years if I'm lucky. What kind of debt is your 160? What does that make up? Student loans is 100. I have the car for 38, which I'm going to let go of. And, um, I have a consolidation loan for some credit cards cause I was living above my means for a little while. That's the rest of it. Okay. So you sell the car. Can you get 38 for it? Will you be able to break even or make profit? Uh, yeah. So I can sell it privately for $46,000 or $47,000, but again, I owe the bank $38,000. Great, and you'll use the difference?

Hopefully coming. Yeah, I'll put it towards that consolidation loan. But you'll need a car to still get around, right? Actually, no, because I work from home, so I can either borrow a car from my parents, which it's already paid off. It was my car before. It's in my name still. Or we have a... Would it be borrowing or they give it to you? Would they sell it to you just for not much that you could know that you have it?

No, it'd be fine to borrow. They don't need it. It just kind of is there for when they do. So I can use that or, you know, if he keeps his new truck, he does have a beater that he drives to and from work. Yeah. Oh, I just had him get rid of a car that was almost as old as me. Wow.

Listen, one thing I want to encourage you is I, you know, again, I don't know the timeframe that you guys have for this and I'm not trying to rush you, but I would not delay moving forward in a relationship because of debt. I would encourage having those conversations because the truth is a good, a good man and a good woman says, Hey, I love you despite your debt. And I'm coming alongside of you with that debt. And I get it. Like you do feel guilt.

You can feel shame about that. Those are very real emotions, but emotions are meant to go through you. It's when you stay there that they prevent you from moving forward. And so allow that to, you know, you can feel that and let it pass through, but let this good man or whoever's listening,

let you get that relationship that you want to have and you guys can tackle this together. For free tools and resources to help you reach your home goals, go to ramseysolutions.com slash real estate or click the link in the show notes. If you need health insurance for yourself or your family, you might be lost in a maze of confusing terms, overwhelming options, and questions about networks. Not to mention high costs and bad service from insurance companies that don't care about what you want.

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So get out of the maze by going to healthtrustfinancial.com today. healthtrustfinancial.com today, healthtrustfinancial.com. George, let's take it back to the phone lines. We've got Aiden, who's in Fayetteville, Arkansas. Aiden, you're on the line. How can we help? Hi, how are you guys doing? Doing great. What's up? So I'm a current University of Arkansas student, and I am basically on my own when it comes financially. I'm having to pay for my own rent and basically my necessities to get by. And I'm just really struggling trying to find a balance because obviously I want to focus on my academics, but the troubles with my finances have really put me under a lot of intense stress. And I could just use some help navigating that.

Are you working? Like, tell us about your working situation. Yeah, so I have two jobs right now. I do Amazon delivery, and I also am a brand ambassador for Anheuser-Busch. But the problem with those two jobs is that they aren't really on a set schedule necessarily. It's more of like they just come up with offers during the week and I pick them up. Got it. How much are you working? How many hours per week on average?

On average, I'd say about 25. And what are you making? I'd say weekly before my expenses, about $300 to $500. Okay. I'm wondering, could we find you a job that's maybe 15 to 20 hours, but pays as much, if not more more that is a little more consistent would that solve all of your problems it i'm not totally sure because i have well if you want to go through my expenses i have uh seven hundred dollars to pay for rent and then usually about $300 for groceries for the month and other various expenses for gas and things. Do you have a car now? No, I do not. Okay. So paid for a car. And you're cash flowing college right now. How are you paying for that tuition? Just my grandpa, before he passed away, he had set up a college fund for me.

So I've paid for my college so far, but that money has run out now. So now I only have two years left. I'm going to be forced to take out student loans. Can I ask about your parents, where they're at in this, or are you just kind of on your own at this point um they they want me to be more independent so they don't really like if i ask they might help me here and there but they really get annoyed by that and i don't like having to ask them for money i wonder if the context changed like i wonder if the context changed. Like, I wonder if the context changed from, hey, mom and dad, and I'm not saying that you did this, but if you said, hey, mom and dad,

I need money to go out and, you know, for food and clothes, like that has a different context possibly than mom and dad, this money from granddad is running out. I really don't want to go into debt because I know that debt is a bad thing. Is there any deal we can make where we're working together to pay this tuition in cash or we're cash flowing this? I'm willing to do what it takes. Like, I wonder if those are two different conversations. Do you think that they could value that second conversation? I think they possibly could, yeah.

Do they know the situation that grandpa's college money ran out? They do, yes. And they go, we don't give a rip, take out as many student loans as you need, bud. You're a grown man. Yeah, they don't really feel the same about debt as I do. They are like, take out student loans, and I really do not want to do that. But, you know, I'm going to have to end up doing what I have to do to be able to finish school. What degree are you pursuing?

I'm in finance. Okay, and you have two years left. What is the next semester going to cost you? Luckily, I'm not originally from Arkansas. I'm from Oklahoma, but I was able to get in-state residency. So I'm looking at about $6,000 a semester. Okay. Okay, that's not as bad.

And you have all summer to work, too, to try to cash flow that? Yes, I just got an internship as well that will be paying $20 an hour. And I'll be able to work lots of hours this summer. So that should be able to help a lot. Do you need to live on campus? Or are you close enough? Like, would your parents let you live at home and save that $700 a month that way

to go towards this tuition? My parents, they live in Tulsa, Oklahoma, and my school is in Fayetteville, Arkansas. So I wouldn't be able to live at my parents. Do you have roommates right now? I do, yes. How many? I have three other roommates. Oh, it's a party. So you're doing the most. And have you applied for all the scholarships and grants? Is that part of your part-time work? That is, yes. I do receive financial aid, and I have gotten the max Pell Grant for school, but I don't really have any excess from that.

And you have no savings? I do not, no. I'm really just trying to figure out how I can get at least a baby step one. Yeah. I mean, it's going to be a struggle when you're, you have a, you have a lot of expenses coming out every single month to cover your normal life plus school. And so, you know, it's going to take a full-time job just to cover this, which is going to make it really difficult. So you're going to need to find something that pays more, but you can work less and still cover all of your bills and create a little savings cushion to cashflow because your next payment is going to be in the fall. Are you paid up? Yes. Can I ask a question? I'm not trying to throw a huge wrench in this, but I want to make this happen for you because I do believe that you don't want student loan debt. Is there a

situation, have you looked in Tulsa to say, hey, I want to finish my degree there. I can live at home. I can do it less expensive. They'll take my credits. Have you explored that? Because getting the $700 back over the course of a year is going to make a big difference on all of that. I mean, it's almost $1,000 a month. Getting those expenses back is going to make, really could be the difference between making this possible and it not being possible? Yeah, the thing is, I just feel like I'm already so far into this school here. And the thing with going back home is there's only one four-year university there. And I don't know if I'd be able to get into it or not. But that's what I'm saying. I want you to look into it because transferring schools, it happens all the time.

Like, don't get me wrong. I get that you're comfortable. Comfort is a real thing. But transferring schools, as long as you know that they'll take your credits and you don't have to go back at all, then that's great. But if you look into that school and say, OK, here's where I am now. You know, you get in with their their admissions office and find out what it would look like. This is all research is what I'm asking for. Just so you can really see what your options are because a lot of times we paint ourselves into a corner and we're really not in a corner.

There's lots of options. So I would look into that. I'd also look into an online situation and see if there's a way that you can mitigate some of these costs and live elsewhere. What's the end goal with the finance degree? I'd like to become a financial advisor. Okay, here's the good news.

I'm going through a certified financial planning course right now, completely online, and it is not nearly what it costs for even one semester at Arkansas. So I'm telling you that to say there are other paths to the thing you want to do. And my friend Ken Coleman says it this way, is it the only way? Is it the best way? And right now you haven't explored all of those options. And so I believe it's called Boston Institute of Finance. I think that's the one. They've got an online course you can take for a few thousand bucks total. We'll get you through this whole thing. And so that might mean you don't need to spend another two years. You can go through this course in a year, get your foot in the door as a financial advisor and start getting some clients and get your experience hours. Yeah, I definitely would like to explore my options for sure.

I think the thing to take away here is you're going to have, there's, there's going to be a level of discomfort in the solution. Uh, from what you're saying, I don't think you're going to be able to go on as you have. And I think letting yourself know that, like just kind of taking a moment and standing in the mirror and going, okay, the way I thought this was going to happen is not going to be the way this is going to happen. It doesn't mean it's a bad thing. It doesn't mean I failed. It just means I've got to embrace a new solution. And if you can just get your mind on track with that, I think you're going to find that you have a lot of solutions. And to George's point, I think you're going to end up with a better solution that's faster and cheaper and gets you where you want to go. You know, that's the goal. Take that off the table, get creative,

do your homework, and you will be shocked at how much easier it is to just do it. Go to school debt-free as a finance major. I know, right? That's the guy I want to hire. I know, that's right. But it's so hard. You know, when we have a way where we thought things were going, it's kind of hard to deviate from that path. You feel like you failed.

Yeah. But you didn't. You just chose a better path. Mm-hmm. What does the future hold for business? Ask nine experts and you'll get ten different answers. Economic growth or a recession. Business taxes will go up or down.

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where we don't feel comfortable saying, I don't know, or I don't know what that means. And so instead of asking directly, we're like, oh, my friend wants to know what a 401k is, or my grandma was wondering what's the best place to keep her high yield savings account right when really you're the one who wants to know the answer and so asking for a friend what is today's what is a

reverse mortgage oh i like this all right this is one uh if you're my age maybe your parents or grandparents have fallen into yeah yeah it's a big one. You see commercials in between, I don't know, Snuggies and timeshares for this thing on late night TV from a washed up actor. Yes. So here's the definition here. A reverse mortgage is kind of what it sounds like. You're converting your home equity into money for you. So it lets homeowners that are 62 or older borrow against their home equity. So instead

of making payments, the bank will send you money either in monthly payments as a lump sum or through a line of credit, similar to a HELOC. So here's the deal. With the loan repayment side, there's no payments while you still live there, which is why people are like, oh my gosh, that sounds wonderful. But the loan plus interest has to be paid back when you move, sell, or you hit the old dusty trail and pass away. That sounds risky because you never know what the housing market's going to do. But then if I'm that person, you go, well, someone else's problem. Yeah. Yeah. That's the people you love. It's

going to be their problem. So here's the deal. As you borrow, your home's equity dwindles down. So let's say you start with a paid for home. It could end up where half of that is gone and you now owe $250,000 on a $500,000 home. Wow. Yeah. So you're eating up your biggest asset and you're leaving less for your future and your family. And by the way, they're super expensive. They're one of the worst financial products on the market because of high upfront costs, origination fees, closing costs, mortgage insurance, and then the interest keeps piling up, which by the way,

if you're getting this as a monthly payment or a line of credit, the interest is going to be variable. Oh, boo. Yeah, that's terrible. Which means the lender's passing on the risk of variable interest rates to you. And you're still on the hook, George, for taxes, insurance, property, you know, all HOAs. You still have to cover all that on your own. Home maintenance. You still have to pay for all that. And I mean, it's not on here, but you know, a lot of folks when they get older they think i don't have much retirement i'll use this and this will fund my lifestyle until i you know take the highway to heaven and then they end up living longer and they've eaten through all of this equity and then it's like okay now what so it's kind of there's a lot of risk there so here's here's the pros the pros that people fall for this

it's immediate cash i can get money during retirement because i didn't save there's no monthly payments i get a break from mortgage pay that's great and then flexible use i can spend it on whatever i want medical bills travel here's the cons here's where it gets real yeah super high cost like i mentioned loaded with fees then you're losing your home's equity bit by bit you have nothing to leave to your kids and they have to deal with this mess. And then there's foreclosure risk. These almost always end in foreclosure. Yeah.

You miss property taxes, insurance payments, and you could lose the house. These are for broke people and they think it's some shortcut that's going to let them live their best retirement life and it ends up just making things worse. Yeah. So here's better alternatives. If you're thinking about a reverse mortgage or someone that's in one, downsize. Sell the house, buy a smaller one, pocket the difference if you really need money. Investments or savings. Use retirement accounts for income instead of one of these terrible products. And then lastly, rent out part of your home. Oh, thank you for being a

friend. There you go. You can make it like a sitcom situation out of this. Just have someone living in there in a spare bedroom, giving you 500 bucks a month. That'll replace the payment without the risk. And that'll help you out. So reverse mortgages seem like a quick fix, but they have long-term risks that could wreck your financial future. So look at other options.

Stay debt-free. Make a commitment to do that and keep your home working for you, not the bank. And if you need help, if you're sitting on a mortgage that you're like, hey, maybe I do need to downsize, check out our real estate hub there. That's a good one. They'll put the note, the ticket to it in the show notes. There we go. The ticket also known as the link. There you go. We got the ticket for you. There it is. Oh boy. Let's go to the phone lines. Do you have more that you want to say? Like I needed a Tums after just reading all that about reverse mortgages. It's a bad pit in my stomach.

I know. Well, we've got Stephanie. She's in Charleston, West Virginia. What's up, Stephanie? Jen, I'm trying to be, first of all, I just wanted to say hi. Hi. And I have a question. My father is 80 years old. My mother passed away in December of 2020 from COVID. And during that transition, I realized how horrible their finances were. They make a lot of money. They were retired. They had a lot.

But my dad has since had a stroke and a heart attack. So I'm now a power of attorney. Yes. Now there are two children. There's me and my sister. I'm the oldest. I am the beneficiary on everything. And that is because my sister is an alcoholic.

She has never held a job for any reasonable length of time. Her kids and her have lived off of my parents forever. Now, everybody in this scenario is an adult. So there's going to be, when my dad passes away, there's about $350,000 that I am going to inherit. But I have made the promise to my dad to take care of my sister, to help her. And I want to know, with respect to his wishes, what is the fair thing to do? And how do you go about taking care of somebody who is an alcoholic? Because in my opinion, I cannot just give her half. Yeah, you can't give her half.

That really would be giving a drunk a drink. I mean, I hear Dave say all the time, dealing with folks who are in addiction, they don't get control over money, especially large sums of money. So in this case, you're putting just fuel on the fire of misbehavior by just throwing money at this. So what I would do is define what it means to help take care of sister. Does that mean we enable her for the rest of her life and fund her in whatever she wants to do? Or does it mean there's strings attached? Do we help her get on her own feet and cause her to be independent and have her go through rehab and put, you know, a certain dollar amount every month and increase it over time as she's able to stay sober.

You know, I think we can structure this in a way where it actually helps her instead of just makes the problem worse. Has she attempted to get help before or does she realize she has a problem? Tell us about that. She knows she has a problem. She's been forced to get help. I committed her one time for her alcoholism. But once you're past a certain date in treatment, you can check yourself out. And that's what she does. She has no desire to get help. And, you know, they've purchased everything for her, um, a house,

uh, cars. She, she had brand new car that she took a loan out on and got it repossessed. Um, and her kids have all had cars. They've had all their, everything they've ever done has been financed through my parents, me and my house and my children, we've never had anything, we've never received anything. We don't ask for anything. I make a, you know, we, my husband and I are retired. We make a great retirement every month.

Everything we have is paid for. How many children does your sister have? Well, she had three. One of them just passed away last April. So that took her into a terrible tailspin, as well as the other children. And their adult children? How old are they? Their adults, the youngest is going to be 19, and the other one is going to be 23 next month. Okay. And are they healthy? Are they reasonable and healthy and taking care of

themselves or no? Well, the daughter, the oldest takes care of herself, but she also has the drinks every day. So it's not a good option to give to her children. The other one, the youngest one is, oh, he's just a manipulative and has manipulated my father out of thousands. And when I say thousands, since my parents, my mom died, it's close to about 182, 185,000 that they have went through with nothing to show for it. Nothing. So you're going, I mean, you don't have a great option of who to give this money to instead of your sister-in-law that's directly related to your sister-in-law. You know, I would, if I were you, I'd probably hold on to that money and keep it somewhere and earmark it for if she's ever willing to get the help that she needs. That's something like that. It almost feels like she needs to hit her own rock bottom and be willing to change before we throw any money at this problem. It's just going to disappear into the

ether and then you're going to be more resentful. And so I don't think that honors your father's wishes either. Oh, this is a tough situation. It's not easy, but yeah, I'd hold onto the money. I mean, you're executor, so you have good reason why not to give that money. And I would just stand on business as far as that's concerned. We see you guys after this break. From the Ramsey Network, it's The Ramsey Show. I'm Jade Warshaw. Next to me, George Campbell, taking calls about your life and your money.

George. Hit me. You ready to get into it? Let's go. I'm always ready. Listen, I'm ready to get right into some calls. All right. Cindy in Kansas City, Missouri is on the line.

What's up, Cindy? I have a question concerning group life insurance to my company who now are having me pay the taxes on it, the yearly taxes on it. And it has just went up $300 since last year. And I have been trying to cancel this policy. Why, what's the problem with you canceling it? Like what happens when you don't, when you let it lapse or when you just say, I don't want it anymore. Well, first off it's there, I'm getting getting this you need to talk to your employer and then my employer says no you need to talk to the insurance company and they're sending me back

and forth i started this process in december of last year uh 24 um They ended up sending me a waiver paper to cancel the policy, and it is still not canceled. Did you re-up it for the new year? Because usually you have to go in there and opt in. Did you do that, or did you... No, I didn't do nothing with this policy. In fact, I just found this policy out last year. You didn't know you were paying for it? Excuse me? You didn't know you were paying for it? No. What does it cost every month or every paycheck? It costs, I don't know, they said it's being taken out to the other tax. And what do you mean by tax?

Are you talking about the premium for the life insurance? I don't understand what you mean by the taxes are going up. No, my employer is paying for the premium. Okay. So they're paying for it, not you. Not me. So what are you seeing on your pay stub? What's it being listed as? I was informed it comes out once a year that I have to pay the taxes on this policy because it is considered impunited wages.

And how much is that? Well, last year I paid $182,000 and this year i'm paying 180 or 485 so that's the so they're saying hey if we cover this this is your this is your fee for having full coverage for the entire year 182 essentially the the irs sees this as income from your employer because they're covering this expense for you. Exactly. But it's on you to pay the taxes. Okay, I understand that.

It's on me to pay the taxes. And it's going up, and it's now $485 a year. For the year. Do you know what the face value of the policy is? Yes, they just told me that today, matter of fact. They're saying that the face value... Hold on, I've got to get this paperwork back up. Is it $100,000 or is it $1,000,000? It's $84,500 for basic life and $42,250 for personal.

Okay. Do you have life insurance of your own? No, I do not. Are you self-insured? No, I am not. Does anyone rely on you? Because I have no one to pass anything on to. Okay, so nobody relies on your income.

If you were, God forbid, you were to pass away today, nobody's going, oh my goodness, what am I going to do? Nobody relies on my income. Okay. Except for my employer. Well, they don't even because they pay me. But I mean... Well, I mean, the truth is you paying for...

The truth is you might be able to... If you want to opt out of this, you 100% could and put that money into something else you could invest it. Or if you did want to have your own term life policy, you could do that. But my question is why, what are they telling you when you say, hey, I want to let this, I don't want this policy anymore. Is it something that's like some sort of a requirement? tell me what they're telling you okay what they're telling me is um it's not a requirement obviously um but they didn't let us know about this until here recently and who knows how long they've had this policy out on me

um well it's too late now. You're not going to get reimbursed for the years you paid for it. So I think we need to let go of that resentment. I can tell you're up in arms about this. I'd be frustrated too. And part of it is we weren't paying attention about what was happening with our paycheck. And so at least, you know, going forward, I'm going to be looking at exactly what's taken out of my paycheck. If something seems off, I'm going to go to HR. And so you need to look into your own policy. Look at the contract and look at the waiver and go, what do I need to do to make this go away? You are so right. And be the squeaky wheel.

I can tell. Cindy is the squeaky wheel, and the squeaky wheel is going to get that grease. Yeah. I'd be sitting in HR every day, just sitting there waiting. That's what they told me to do. They told me to go to HR. Now, HR is telling me I have to go through the insurance company to cancel it out. Well, have you?

Have you called them up and said, hey, I have this policy. I don't want it anymore. Oh, yes. Yes. I have called. Today was probably my fifth call in the last. OK, here's what you do. Keep a record of every single piece of communication, who you spoke to, what time, what they said,

what document they said you needed, and get a next step. Regardless of who you talk to, say, okay, what is the next step? Or what I do is I'd set up a meeting with someone from HR and in the meeting call the life insurance and say, I want you guys to figure this out because you're doing the Spider-Man thing where you all point at each other, And I want this figured out now. And you set up that kind of a, I don't know, a group call that you can kind of sit through and watch what's going on and give everybody permission to do what needs to be done on your behalf while you're sitting there. That's what I would do, George.

And I did that today. And what happened? And they said they're going to get back with me. I bet they will i'd be having i'd have a scheduled follow-up email every two days until they finally go okay we gotta get cindy off her back can someone just freaking cancel this policy yeah this sounds like something that is in set in place somebody in hr is like this has never happened before nobody's asked like we should have asked her how big her company was oh yeah nobody's actually canceled before so we don't know you gotta figure this out for the

first time yeah but the truth is i mean let's talk a little bit about these kind of work life insurance policies you know a lot of people when you ask them do you have life insurance they're like yes jade i have life insurance and it turns out they've got maybe 50 or a hundred thousand dollars through their work cindy she's got $80,000. That's not enough. No. You need 10 to 12 times your annual income. Yeah. And the purpose is for folks who do depend on your income.

If you've got kids, if you've got anybody that says, hey, if something happens to Jade Warshaw, these people were dependent on me making money. If that's you, then you need life insurance. And so, like George said, 10 to 12 times term life from Zander Insurance is what we would suggest. So if you don't have it, you need life insurance. And so like George said, 10 to 12 times term life from Zander insurance is what we would suggest. So if you don't have it, you need it today. And for the price that she's paying, if you're a healthy person, you could probably get the same, for the same amount, get way more coverage is what we're talking about. So if you haven't done that, you need to do that today. Life insurance for clarification is not a baby step. Okay. It's not something you say when

I'm at a baby step two, I'll do it. Or once I hit baby step four, life insurance is something that you get in place as soon as you find out about it, if you are someone who needs it. So that goes for everything across the board, right? Absolutely. So don't just rely on your workplace because guess what? You leave that job, you lose that measly insurance. You need insurance on your own separate of that. Jump onto Zander.com and get a quote. It's super easy and it's way more affordable than you even think. Yeah, way more affordable than you think. Get that today.

Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have, George. Sketchy and never trust them can get you the package you didn't order. Yes, I have. George, sketchy and never trust them. And that's why we recommend Delete Me. They help with that. Yeah, they do. Delete Me actually goes in and removes your information from data broker websites and it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your. And that means your info, like your email address, your home address, your kids' names, your name, everything is just out there for

scammers and spammers to find. That's right. And then once they remove your information, then they're going to send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far. Get this. They've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites and saved me 77 hours of time. It's incredible. Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindelete me.com slash Ramsey. That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindelete me.com

slash Ramsey. Make sure to check it out, you guys. All right, let's get into that Ramsey show question of the day. Today's Ramsey Show question of the day is brought to you by YRefi. When the payment on your defaulted private student loan is as much as some mortgages, it's hard to get ahead. Oh, I know that's right. That's when YRefi can help refinancing to a low fixed rate loan that's built just for you. Find out more at YRefi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey. May not be available in all states. Today's question comes from Isaac in Maryland. Should I purchase term life insurance even if my employer allows me to purchase voluntary life insurance up to $500,000? Would a combination of voluntary and term life insurance be wise? I'm 41, so if I'm going to get term life insurance, I would like to do it now for

20 years instead of waiting. It's a great question. We answered a very similar question just now. I know. So yes, I would absolutely purchase a term life insurance, even if your employer allows you to purchase one. Oftentimes, the employer one is very affordable. And so if you want to have that as a little bit of buffer gravy on top, that's fine. But I would definitely get your own term life insurance through Zander. You can jump onto zander.com and get that handled. And at 41, it should still be reasonably affordable. And you said you want it for 20 years. You can do a 20-year term policy on that and do a combination. You may not need the employer one on top of that. So you may just want to go 10 to 12 times your salary on your own and not pay

for the employer one, unless the employer one is just such an incredibly cheap deal. It's like five bucks a month or something. Yeah. And what would you recommend, George, for like a stay at home mom who says, hey, I don't I don't work, but I do provide value and people depend on me every single day. This is a big one. Yeah. At least half a million dollars. At least half a million. Because you think about, let's say $50,000 salary times 10. You're looking at half a million on the short side, especially now with how much childcare costs. That's right, exactly.

I mean, you got to hire Mary Poppins to do this thing. That's right. Daycare alone, you talk about all of the things they're running and doing and chauffeuring around and cooking and cleaning

and taking care of all the household pieces. Real monetary value. You need multiple people to fill that role. So you need to have at least half a million on a stay-at-home spouse. So, so good. All right. We've got Aisha in New Haven, Connecticut. What's going on, Aisha?

Hi, guys. Thank you for taking my call. So my question is two parts. I am on baby step two. I have $1,000 saved, and now I'm trying to pay off my debt through the debt snowball. However, I'm 41 and my husband is 57. And he has no retirement in place. And so I wanted to know if I should do the debt snowball and put away for retirement.

And the reason I say that is because by the time we pay off our debt, it'll be about four years. And so then I feel like I haven't put anything into his retirement. Okay. And then my second question, I have a second question. Sorry. My second question is, should I pay off my credit card, which is $5,000 with no interest for the first year, and then start the rest of the debt snowball from lowest to highest? Or just do the whole debt yeah so my credit card in situations like yours you feel desperate right like it's just like oh my gosh the time is ticking and the first instinct is let me let me get in here and we reweave this plan and make it better what you think is better for your situation um but the truth is i i would work it as is i what are your debts how much do you have so with everything about 50 okay is that between the two of you yeah so there's a couple of um uh hospitals and then so that's no interest with the hospital

how much is the only interest we total i mean I have, you know, maybe two, three, four, five, like 5,000 total. Okay. Three different deaths. So 5,000 from credit cards, 5,000 from medical. What else? No, from medical. So 5,000, yes, 5,000 for credit card with 0% interest for the first year right now. Now tell us the medical.

And then total, I'm sorry. Now tell us the medical. Go through and list them out. We don't care about the interest rates. Now tell us the medical. I'm sorry. Now tell us the medical. Go through and list them out. We don't care about the interest rates. Just tell us the amount. Okay. So, yes. So, roughly $5,000 total in health, medical, $5,000 in credit card, and then I have tax bills. So, $4,000. Yeah. We owe back taxes. Okay. So $4,000 to the IRS? That's one of them.

And then another $4,000 and then $7,000 and then $8,000 and then $13,000. Okay. $4,000, $7,000, $8,000 and $13,000 all to IRS. Yeah. And then it's $1,000, $2,000, $3,000 in medical, and then $4,000 in credit, which totals $50,000. And if I do it right, based on our income and snowballing it, I can knock this out in four years. Well, what's your household income? My husband would be like $50,000-something.

What's your household income between the two of you? And I want them separate. Can you tell me what you make every month, what you bring home in your paycheck and what your husband brings home in his paycheck? So I'm a stay-at-home mom, but my husband is self-employed. So we bring, monthly is about 6,000.

Okay. And how many kids do you guys have? Sorry, I'm going through this. I just want to make sure we have plenty of time to help you. So we're just getting the particulars. No, it's okay. We have one child, one year old. One year old.

Okay. Okay. So when we're talking about the debt snowball, let's go back to that right quick. These IRS debts have to go first, smallest to largest. Okay. They get a fast pass to the front of the line. They sure do as lickety split um the other the other issue here is okay so your husband makes six thousand dollars

self-employed how many hours is he working a week a lot um you know all day okay what kind of business is this what What is he doing? A contract in New York. Could he do contract work for someone else full time and make more? No, he's self-employed. I know. I'm saying could he make more working less for someone else versus on his own? I don't know.

I mean, he makes, I mean, we're not, I don't think we have an income to. Well, you do when you look at the debt. You do when you look at the debt, because if it was just, hey, 6,000 bucks a month, we're debt free. Our living expenses are fine. Then yeah. But in this case, we got to get this done and faster than four years is what George is in myself are getting at. Because to your point, you're on a timetable. Like you got to get this thing zoom zooming. Yeah, what you're saying is I can only throw a thousand bucks a month at the debt total. Yeah. What's your living? How much does it cost for where you rent or where you are you renters or buyers? Okay, so if I do, because I did all the math out. So if based off of one expensive sort of house is paid off

I can put yeah about 1100 to each debt so 11 so if I did the highest amount 13 000 then yeah I can put 11 75 can you go back Aisha did you say the house is paid off? No, no. What did you say? No. No, we owe a mortgage. Okay, what's the mortgage and what's your... $2,800. $2,800. So half of his income is going to the mortgage.

Yeah, just about, yeah. Yeah, because when you add in probably HOAs, taxes, insurance, everything like that. We don't have HOAs. No HOA, okay. Here's the deal. He doesn't have money to throw at retirement anyways. Total monthly is, insurance, everything like that. We don't have HOAs. No HOA. Okay. Here's the deal. He doesn't have money to throw at retirement anyways. Totally monthly is $2,800. Okay. You guys are paycheck to paycheck. No. And so throwing a little bit of some pennies into retirement is not going to solve this problem. What will help you retire with dignity one day is at least being debt-free and you having a lot more timeline to go back to work. You're

going to need to do that eventually unless he gets his income way up. Yeah. Well, my plan is to go back to work once he's a little older. How much? Five years from now. See, I don't think you guys can float a mortgage that's half of your income for five years and tackle the problem that you have here. Like your time frame is tight. Can you tell me how much the house is worth? Like if you were to sell it, would it bring anything? Yeah. It's up to five and we owe 300.

Okay. About 300,000. I don't know how to do it. So maybe if you sold it, you could take home 170 or somewhere in there. Yeah. I could knock out your debt and you could rent for a while. I might consider that. You could sell our house.

I would consider that because the truth is your timeline is really tight. Your husband is saying he's not going to want to work much longer, which I don't know how much I agree with that. I don't think it's a choice he has. He's going to have to work until his body says no. Yeah. And if you want to be a stay at home mom, that selling that house and getting it right side with your income is what you're going to need to do. George, budgeting is such a huge part of the foundation of everything we teach here, right? We teach the seven baby steps and a big part of that is saying, okay, you've got to get on a budget. And for a lot of folks, they start working out their budget and they run into a couple of

walls that they're not quite sure how to overcome, which is completely normal. And so one of my favorite things we do here are a budget breakdown where you send us your budget and we're able to kind of talk you through it. And so Tyler did that. He's from Tacoma, Washington. He sent us his budget and said, hey, can you guys help me out? Tyler, you're on the line. How's it going? It's going good. Thanks for sharing your budget with us. Of course. Okay. So I'll kind of, George has got your every dollar budget opened up and I'll kind of go down the line and we'll talk through it and you tell us if we've got it wrong or if there's something that we need to know.

But for right now, you're telling us you're 21 years old. You're in the Air Force. Yes, ma'am. Okay, cool. Married with two kids at 21. Wow. Yeah. How old are the kids? First one is 18 months, about to turn 19. And the other one just turned a month today. Oh, man, you're in the midst of it.

Wow. Yeah. So you're bringing home $63,000. That equates to $4,754 that you see in your paycheck every month. Is that consistent? Roughly, yeah. Oh, yeah. Pretty consistent as long as they don't have a government shutdown or nothing

like that yeah okay true that does that include like a housing allowance or do you get one um it does but it doesn't so the housing allowance uh is tax-free so it's it's roughly 52 000 or 5 500 a month because the uh housing allowance is not taxed. Okay. Okay. So, but that's not, obviously that's not, you said it's $5,200 a month? Yes. But so that's not included in the $4,754 you told us? Oh, well, yeah, I guess. I don't know. It's kind of hard to track down because it's, I was like, oh shoot, forgot to include the zero tax part for that. But what ends up in your bank account?

Is $47.54 every month? Roughly, yeah. Okay. Now, I see here that you don't have any debt. You've got about $5,000 in savings? Roughly. Okay. And I see if you can, I'm looking at the every dollar budget, you are 73 bucks over budget

every single month based on all of the expenses you laid out. So you are definitely living paycheck to paycheck. In fact, you're in the red a little bit. Does that sound right? Yeah. Yeah. It's pretty rough. Pretty right. So let's help you out here. What is your next goal? It looks like your savings is low because if you're in baby step three, we need to fully fund the emergency fund. Correct. Yeah. And if I see this right, you've got 200 going into savings, but you're in Baby Step 3, we need to fully fund the emergency fund. Correct, yeah. And if I see this right, you've got $200 going into savings, but you're also, you skipped to Baby Step 4, and you're investing $248 a month.

Is that true? Yeah, so what I was doing is that the military matches a Roth IRA, and I was just trying to get to the match. So pretty much since basic training, I've put all that money away and I've never really seen it. If I told you, you could be a multimillionaire at 21 if you just follow the baby steps, would you believe me? Probably, yeah. Okay. So what if we pause your investing to get you some financial foundation, because that'll free up 248 bucks that can now go toward that emergency fund, at this pace it's going to take you two years to get a fully funded emergency fund

that's too long right so that's some money right there we can free up so what i'm going to do is i'm going to move that to zero when investing and add it to your savings so that you now have was that 448 going to savings tracking. Now we still have to find some more room. We're still $73 over budget. So, Jade, look through the list here of the expenses. I assume your income can't change. You can't do anything overtime. You can't get side jobs. How much flexibility do we have on the income side? Actually, for my career, I can start doing like a, basically a extra thing. And, um, if I, so it's a called flying crew cheese, basically. Okay.

Cause that's what I am. I'm, I'm a mechanic on a big heavy aircraft, right? What can you make doing that? Um, in a 21 day trip, I can make roughly two grand in that. And how often can you do that? Um, as much as they need me, but I have to get to that point, if that makes sense. So I don't know exactly when that'll start, but that's something I could possibly do. Is it a month away or a year away?

Probably less than three months away. Okay. Okay. So just for this sake's budget, we're not going to include that, but that could be a game changer going forward for your next goal. Yeah, it could be because, honestly, when I look at your budget, the thing that stands out to me is your rent. And again, I'm not quite sure exactly how your housing allowance is working into this, but all I'm seeing is you're bringing in 47, but then your rent coming out is almost half of that at 23. And so that feels very, very high.

I don't know. Are you on base or what is that? Yeah, I'm on base housing. That's kind of a fixed thing. I can't fix that or I can't change that at all. And I kind of look at the pros and cons of living on base versus off. So like there's free security. I don't have that off base. And it's kind of a sketchy area to live off base.

Got you. Okay. That is an area that's going to be tough because when it's almost half your income, your margin is just so low at that point. So that's one area. What about gas? We're actually pretty good. We use probably $100 per vehicle.

So I have two vehicles, so $100 every two weeks. Per vehicle, so it's $400 a month? That's what's in the budget. And there's not much we can do there. Are you driving a lot or is it more your wife? It's not really driving a lot it's more um i got a uh a nasty truck where it's uh it's got a big old turbo on it and likes to drink fuel oh boy can we get rid of the truck uh yes we could but i'd rather not how much oh wait a minute now you just made jade angry no i'm not mad right i just uh

one of the things that you'll have to do we were talking about this in an earlier segment at some point you're going to have to look at this and go something has to give and it's not going to go if you want to get this budget right side up you're going to have to hold everything very loosely in order to do that so tell us more about this truck i'm gonna pull that string a little bit what's it worth what do you own on it um i don't uh so i put i bought it for four thousand dollars um back in what 2017 and uh now it's probably worth about 15 uh with everything to it but like i said there's a lot of work into it that i've done it's not like I brought it to a shop and did it. It's a very sentimental thing, if that makes sense. It was me and my dad's project.

Okay, I understand. All right, all right, all right. So we can't really move the income. We can't move the rent. But I see a bunch of bills here that can go. Who's watching all this cable? Yeah, that'd be my daughter. She likes to watch certain shows, and it kind of sucks because it's on multiple things, if that makes sense.

But I was also thinking about just dropping a couple of those. Well, you got $47 in subscriptions, too. So you got $88 going out in cable and subscriptions. Listen, they have Cocobelen on YouTube, and it's free. My daughter just watches old barney clips on youtube yeah so i'm that's a that's a much cheaper option yeah i would tonight got her into the old sesame street which is pretty good so yeah tonight i think cable and maybe keep one subscription just so you're not completely in the stone age but i drop that i mean that's that's

finding you almost 80 bucks right there. Right. And then the phone bill, you guys have two cell phones? Yes, we do. Are the phones kind of being financed through the plan? Because I see that it's- No, no, everything's paid off. There's no debt at all. Okay, who's the carrier?

Because you are overpaying for two phones. It is T-Mobile. All right, you're paying $65 a pop. I would switch to a budget-friendly carrier like Telo or Mint or Boost and reduce that down to, you could get that down to $50 easily. Right. Which would save you a good, what, $80? Just by doing that this month.

$80 a month freed up just by doing that. Greenish. So give me a sense of where we're at, Tyler. Now, if I cut your phone bill down to 50, right? And I cut, let's say we can cut cable and we just keep one of the subscriptions and we cut a few of the subscriptions. We get it down to 30 bucks for subscriptions. Now, instead of being 70 something bucks in the hole, you're 63 bucks in the black just by doing those few. Without changing your rent or your income. So I feel better about this already.

And on top of that, have you reshopped your insurance lately? Your renter's insurance? Your auto insurance? Yeah, I did. And I did find the cheapest one out of all the names. Okay. There's not a whole lot else

here, Jade. I mean i mean groceries you're feeding four people yeah that's like 800 bucks in today's world the only thing your wife could do is she could get together with maybe some other wives on base and say let's create some sort of a co-op that i take you guys as kids you take my kids and i go work and you go work and you figure out times she's actually going to school right now to become a teacher. So that's what we're working on. Okay, good. Listen, you guys, we're about two years out for that. You guys are young and you are in the thick of it right now. And I think the horizon for you guys is good. I think if you do what George said, you'll make a lot of changes, but this is going to be slow going for you guys. Just don't give up. Hey, you guys, I'm not a fan of the big banks and you probably already know which ones i mean

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Oh my goodness. Well, number one, I make it fun. And so I'm the proxy for the audience. Last time, just so you guys know, I got punched by Dave and he threw a chocolate chip cookie at me. I remember. So, you know, it sounds like nerdy and boring, but we really bring it to life. He was trying to get that gluten on you. That's right. I remember that. I miss me with that. But really, we answer your questions. So you could submit the questions live via email and I'm taking them live. We're sorting them and going, hey, this one's really going to help a lot of people out there. And so I'm getting a lot of these questions in my DMs. Hey, I don't even know where to get started.

Or hey, I'm in baby step four, but is there more? Or hey, I'm in baby step seven. What can I do beyond the baby steps? We go really deep, more than we ever have on this show. And it's a really good time. You're going to walk away with a lot of value for just less than 200 bucks to get, you know, five hours of coaching. I know that's right. And it's live. Like it's you guys in real time. It's not one of those canned things that they just air over and over, you know, how places will just air the same thing

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All right. Let's get back into your calls. But before we do, just remember, after this hour, if you want to keep watching the show, you'll have to go into our Ramsey Network app in order to finish it unless you're on radio. So if you're watching right now on podcast or watching on YouTube, just know that the Ramsey Network app is where you go if you want to watch the rest of the show. If you need that, you can just download it for free using the link in the show notes or you could just search Ramsey Network in your app store. And that's how you do it. Of course, if you're on radio, just stay where you're at. All right, let's go to the phones. Logan in Philadelphia,

Pennsylvania. What's up, Logan? Hey, how are you guys doing today? Doing good. How can we help you? Yeah, I just had a quick question. I'm currently, I'm only 19 years old though. I'm a real estate agent just right out of high school. Didn't bother with college. And last year I made just a little over 50 grand. This year, so far, as long as it keeps this pattern, I'm projected to make right around 80. And I've always been a frugal person throughout life. And I just wanted to see what you guys thought about taking a trip to Thailand. I've always wanted to go. It would cost right around 33,500 to $4,000. And, you know, just spending that much money on a vacation seems strange to me. Well, how'd the idea come about of Thailand? Thailand's great, by the way.

I've been. It's a bucket list place. How'd you land on that? I've had family go there. And they all love it. You know, I always see pictures online. People love it. I've had friends go.

So just kind of from word of mouth. I've been all over the Bahamas numerous times. It's just, I've never been anywhere in that part of the world. Well, let's see, can you afford it? I mean, you're making, the projection is $80,000 a year. What's your living situation? So my living, I'm actually currently still with my parents. So, you know, I don't have many expenses other than lifestyle. And you don't have any debt? I'm not in debt at all. No. Well, I do. My parents, they helped me invest in real estate. So I have a loan out with them. It's for

a duplex though. Their plan is they are like, I have a mortgage through them. They're going to forgive that instead of, usually for my siblings, they pay for college. They're just going to forget that in a couple of years once I move in. So I don't really consider that debt. I'm still paying on mortgage. You know, I have tenants in there that pay it. What would make them not forgive it? It sounds like there's a stipulation here. No, there's no stipulation. The reason why they have it so they'll pay it off just in a couple of years is because I'm not going to college. You know, they paid for all my siblings college. Okay. So they have the money to pay off this mortgage? Yes. Yep. Yep. They're very well off. Okay. So they basically bought you a house as a kind of a gift instead of funding college. They went, hey, if you want to get

into real estate, you're doing well. We'll just go ahead and still give you that money in a different way. That's cool. What's it worth? Yes. Let's see. I bought it well. I bought it at right around 240. And right now I could get it for sell it probably $330,000. Okay. And you would rent out one half and live in the other? Yes. Okay. How much money do you have in savings right now? Savings, right around $40,000. Whoa. Good. All right. And what's the plan to move out? The plan, currently I just have a girlfriend at the time right now, but most likely within the next 18 to 24 months. Okay. Why so long? You know, I just think I'm still young. I'm 19.

I have a few older brothers and, you know, they all still live at home. If you're old enough to buy a house, you're old enough to move out and live in a house, right? Yeah, no, that's right. Who's living in the duplex now? I just have tenants in there on both sides. Who's getting the money? I am. I'm cash flowing. I'm paying them a mortgage. They have it amortized over 30 years.

I'm still paying one, though they're just going to forgive the rest, whatever is remaining. So you're going to kick out a tenant to live in one of them? Eventually, yes. So, okay, let me, I'm just, sorry. We're going to answer the Thailand question, but I've got a lot of interest in one of them eventually yes so okay let me i'm just sorry we're going to answer the thailand question but i've got a lot of interest in what you're telling

me so right now there's two tenants in the duplex who has the short like who's let me ask you this like obviously if they're good tenants you're like i want to keep them in there but you're also paying for it so that doesn't leave a whole lot for you to go rent somewhere. Is that where the problem is? The problem is, I'm just, usually when I put money in the savings, like this 40 grand, I never touch it. So, you know, it's very strange to me just to pull out a few grand for a vacation when I'm so used to just stashing money away. Here's what solved this for me, Logan. Let me unlock this for you. You need to label your money. Right now, it's just labeled savings. It needs to be labeled emergency fund high yield savings, vacation fund high yield savings, car upgrade high yield

savings. And that way there's no guilt when it comes to what this money is for and should be spent on. You've got it labeled. So an emergency fund for you for six months right now doesn't even really make sense because you don't have a lot of expenses. But let's say it's 25 grand. That leaves 15 grand of money you can assign to whatever task you want. I would say, all right, we're going to take this $4,000 vacation. The other $9,000 we're going to put as a car upgrade fund or a home maintenance sinking fund for the duplex, whatever you want, but I would label them and put them in separate accounts to help solve this in the future. Okay. Yeah, that makes perfect sense.

Short answer, enjoy the vacation vacation you're doing very well for your age you've done a great job stay out of debt and i would move out as soon as you can because i think you have a maturity beyond a lot of older callers that i talk to yeah and there's a there's the kind of the comfort crisis vibe you know michael easter's book of if i'm in mommy and daddy's house and i'm living rent free and I'm making money for my tenants, what real benefit is there to ever move out? I know. Keep me here in my warm cocoon. Yeah. But he needs, he needs that, that, that feeling of rent is due. You know what I mean? You need that feeling of, I need to buy groceries. I need that urgency. Gotta go find some problems.

Yeah. And especially if he wants to be in real estate, I mean, have, have a time where you're a renter. So you know what it feels like, learn what that feels like. So I think that'd be good for him. He is the renter and the landlord, you know, it's going to be an awkward phone call when the HVAC goes out. Hello. Hello. But what he's talking about, I've heard from a lot of folks who are in the baby steps where it's like, okay, I finally got into baby step four, I finally got into baby step seven and they're just worried about, can I spend my money? Is this too crazy? Is this lifestyle creep? Am I going off the deep end? And so I felt that way as well. And so I kind of came up with five pillars that if you can check green on, chances are you can say yes. So number one, if you're a person who lives on a budget, like no matter what, even if you're in baby step six, you're still on a budget. You're still doing that.

Are you a person who's out of debt and staying out of debt? Right? Yes, I am. Do I carry the proper insurances? Am I doing my coverage checkup yearly? Yes, I'm doing that. Okay. Am I a person who's saving for the future? If I'm baby step four, I'm continuing that process. Yes, that's a green light. And is generosity a priority in my life? That month to month, I'm practicing that. Yes. Chances are, if you're hitting green on all those, when you're beyond baby step four and above, that is a green light to go, yeah, I can take this trip. I can do this fun thing. I can buy that couch. You're doing all the things that make you a financially responsible adult. And it's good to remind yourself of those things from time to time. All right, George Camel, here we are inside the Ramsey Network app. I'm Jade Warshaw. The show is still going. Get me out of here.

I make that joke every time I need to stop. We're still taking calls, though, about your life and money. Still giving folks the advice they need to make the next right next step. Sometimes it's not the advice they want to hear, but I got to sleep well at night, too. That's true. It's what I tell my grandma, my brother. It's what I would do.

It's what I have done. That's how we do it on this show. Listen, if I could make one request to the people, the people out there listening, it would be this. If we give you advice, you have to come in willing to...

Accept it. Accept it or at least do it as an experiment. That's a good idea. That's a good idea, right? So just come in. If you're coming to justify something you know, you know, like we can talk you off the ledge, but don't waste time going,

hey, I really want to do a dumb thing. Uh-huh. Can I just do the dumb thing? We will not give you permission. Yeah. We love you too much. Just try it as an experiment. And if you hate our advice, you can always go back to doing it your way.

All right. With that said, we got Beth, who's in Green Bay, Wisconsin. Beth, you are on the line. Hi, thank you for having me. What's up? Sorry to caveat you like that. No, that's okay. How can we help?

My daughter was just accepted to vet school. She was actually accepted a year earlier than we had originally anticipated. And we did not save money for college for her to go to vet school. So far, she has been able to cash flow her undergrad. But we don't have a large chunk of money. And we're wondering if it would be wise to purchase a house for her to be able to live in for the time that she is in school. And then we could sell the house when she is done with school. And that would be our portion of helping her with college funding. Wow, that took a turn I wasn't expecting.

I thought you were going to say something else. Do you guys have the money to do this? We would be okay as far as paying for a mortgage. We have enough money to put 20% down on a house. We just don't have enough to purchase the house completely outright. Got it. What's your personal home situation? Yeah, we're good. We're net worth millionaires, I guess. But all of ours is locked in retirement savings.

And your house is paid off? Yes. Okay. Way to go. And you've got some extra money to put down. What would be the problem with just paying her rent while she's in school and simplifying this instead of becoming kind of long-distance landlords and dealing with the sale and another sale and paying fees? Right. When I was looking at numbers, the cost of buying a house would not be much more than the cost of the rent in the location that she would be going at. And the other caveat is she has a dog she insists on taking with her

that would make it even harder to find a rental property. The rental market at that school is very difficult. People are on wait lists. So it would just avoid some of that. Okay. And so what's the plan? Where do you live? Are you near her? Or what's the mileage distance from where you are versus where this

property is going to be? The school is about two to two and a half hours away from us. Okay. And so is the plan that as soon as she graduates, the house goes up on the market and that's that? Or is she like thinking she'll stay there? Actually, the plan would be that when she graduates, my son is actually currently in college at a different school, but he would transfer to this school to finish a master's degree. So then he could live in the house while he finishes his master's degree, and then we would sell it. And that's a three-year play, or what is that, a three-year play or what is that? A four-year play? She would be in vet school for four years and then his master's would be done two years after that.

So we basically own the house for about six years. What I'm struggling with, I'm not saying no just yet, but what I'm struggling with is a lot has to go down in the right way for this to make sense. And it's a four to six year, a four year term for sure with your daughter. And then after that, it's like, hey, counting on the fact that if my son does this, aside from that, let's say your son ends up going on a different path for some reason. And it's kind of a shorter, you know, usually when I'm thinking about a house, I'm thinking, okay, like, I want you to be able to spend like five years, like a five-year term there. I'm just, I'm not sure. I don't know if

I love this plan. I'm wondering if the thought, like, if the thought is, hey, I want to put into something that's going to make money. you're just putting aside and possibly could rent it out and if she does move that down there um she could look at getting roommates which would also decrease the cost for us uh-huh i have a weird feeling she's gonna you know number one we don't know if she's gonna stay there for all four years life can happen we don't know if he's gonna end up showing up and then what if she decides i don't want to work in this area. I got a job in XYZ town over here. Now you guys are just stuck being landlords in this place two and a half hours away that you wouldn't have chosen otherwise. So it just- It could end up feeling like pressure

almost to stay. Yeah, on the kids. And then there's weird resentment because it's like, well, mom, that was a decision you made and I don't want to have to stay here. I want to... And then brother's like, I don't want to live with her roommates. I want my own thing. And so it just feels like there's a lot that could go wrong. And I feel like there might be a better way, a better use of this money to set her up. Is she going to be able to cash flow school on her own at this point? We're not sure. Okay. Because I would rather you guys help her get through debt free and help cover rent if that's part of the plan versus saying, well, we've got to cover the mortgage,

so that's where our money went. We've got nothing for you, sweetheart. Yeah. Because she could still go into debt to fund school if she doesn't have the money. She already is. She got her associate degree as a vet tech right out of high school. So she's definitely going into the field.

I believe that. I just don't know if this is the place for the next four years. Who knows? I had planned on going to school. I went for a year. I moved across the country a year later. So I just don't want her to feel tied to your plan at this point. I thought the same thing, George. I was thinking about mine and my husband's college path.

The other question I had for you, Beth, is what in your mind when you think about, hey, this takes place of us paying for school, what's the total amount of that gift in your mind? I guess I don't have a specific total amount. It's whatever we can do to help out and whatever the kids are willing to accept because they're kind of independent and want to do school on their own. Yeah. But you said you have cash sitting around that's non-retirement that you would use for this 20% down? Yeah.

How much is that? We currently have about, I think, 80 in our savings account. Okay. So you'd basically put 80 in. You'd have to cover maintenance, repairs, property taxes, insurance, all of that. Maybe get some rent money, depending if she may not want roommates. Who knows? And may not be able to get them.

So I'm just wondering, if you just had 80,000 sitting in an investment account and used the earnings and interest to give to her to cover rent and expenses, that might be a better deal. Yeah, because what happens if I don't know what the market does, but what happens when it's time to sell this? And I mean, what happens to what you earn? Do you guys split that? I feel like there's a lot of questions in this and there's a lot of variables that can affect it. I like George's plan to just put this money elsewhere, let it grow, decide ahead of time, what's the gift I'm trying to give? Number one, and have a clear picture of what that is. Am I trying to give 100,000?

Is my goal that I just want her to have a house when she's ready? Figure out what you clearly want to do and I think that'll inform your path forward as well. You're listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me, George Camel,

taking your calls about your life and your money. All right, George, I feel like we've just been knocking them, they're setting them up, we're knocking them down. I don't know if people like the advice, but we're giving it. We're giving it.

All right, let's go to Chris in Pensacola, Florida. What's up, Chris? Good afternoon. I got a pretty straightforward question. When paying debt off, should I focus on credit cards with a 0% interest rate, but a higher balance, or a higher interest rate with a lower balance? Ah. To do or not to do.

To interest or not to interest. That is the question. The age-old riddle. Hit him with it. Hit him with a lower balance. Ah, to do or not to do, to interest or not to interest, that is the question. The age-old riddle. Hit him with it, hit him with it, George. It's simple, but it's hard to grasp and to fully just take action on because the math says, why wouldn't you knock out the highest interest first because you're saving the most money, right? Right. What we have found is the people who actually successfully get out of debt once and for all, they do the debt snowball method, which is just smallest to largest balance. You can cross out the interest rate. Imagine it does not exist. 0%, 50%, just pay off the smallest balance first. What that does is it frees up a payment to apply to the next one, gets you out of debt faster.

It builds more momentum and actually lets you see the light at the end of the tunnel. So that's the benefits of the debt snowball. It's been proven not just by Dave Ramsey and the millions of people who have done it, but Time Magazine, Harvard Business Review, they all came out and said, Dave Ramsey was right. The debt snowball method is the best way to pay off debt if you actually want to succeed at it. Now, we can do math all day and go, well, you could save $200 by doing the avalanche method. But at the end of the day, it's what's going to get you out of debt. And that takes behavior change.

And the debt snowball method tackles behavior more than anything. Right. So how much debt do you have? Well, upwards of $220, but that's not including the house. And I only say that because I recently lost my dad, unfortunately. So sorry. Yeah, thank you. I had to go through probate, and all the life insurance that my dad had, I basically gave to the probate attorneys because it took a year and a half. Goodness gracious. Was it a complicated estate? What happened? It wasn't. It just, he didn't have a will and I have seven half siblings.

Oh my goodness. Right. So there's a $145,000 loan with $50,000 solar panels on the roof. So call that 200 basically. Um, but I say two 20 debt without the house because I'm not tied to the debt. So they put me as like an account holder, um, or a manager on the mortgage. So I live in the home. I pay the mortgage. It's 1200 bucks a month. I'm not legally binded to it, but I want me, my fiance, and my three babies that are under two years old to live in the house because we're not going to be able to find a home the size that it is in our area for $1,200 a month.

I see. 4.5% interest. For the lenders involved, is the debt due when you sell the house? What's the deal as it went through probate and the state has to pay all the liens, how does that work out? So I'm out of probate. I have a court order that the house is mine. Obviously there's still a note on it. There's a mutual agreement between me and the mortgage that as long as I'm paying the note, then it's, they're completely

fine. They're not going to come after me. If I obviously stopped paying on it, then they're going to come after me. I want to keep the home, but I'm not in a position to refinance the home and legally put it in my name right now. So as long as the notes getting paid for- But they just let you take over the note. Same with the solar? See the solar, I don't want to pay on because it's costing me $300 a month, whereas my power bill is only like $150 a month. But I mean, are they going to come after you and send it to collections and all of that? Because technically the estate owes that money. So they put a UCC lien on the property, which my lawyer, my probate attorney,

he's kind of fighting with them on it because I personally am not legally binded to it. But if I was to sell the property because of that UCC lien on it. Then it's due. Right, right. So it would come out of the proceeds of the property when and if you sell, you have to pay off the mortgage and the solar. Yes, sir.

Okay. What's the house worth? Last time it was appraised, it was about $300. Okay, so it's right side up, right? Right. All right. Okay, and so does that answer the question about your debt? How much consumer debt do you have?

Well, with credit cards, I'm upwards of 15. I have old business debt, not including taxes that are owed, but credit cards and like an SBA loan, 18. We have two vehicle payments that still owe about 80 on it. Oh, goodness. Tell us about those cars right quick. Right, right. So everything was going good. I was actually doing the snowball effect two years prior. And then we had a baby. Then I lost my dad. I was out of state.

I had to move to Florida from Georgia and deal with that. In the middle of it all, twins came in the factor as well. Wow. Wow. Yeah. So I have a $60,000 salary paying job. My fiance is a stay-at-home mom. God bless her soul because I couldn't do it. She's fantastic at it.

But you got $80,000 in cars? Make it $60,000? Let me restate that. You make $60,000 a year and you owe $80,000 in auto loans? Just recently, I had a career change. I did have my own business where I was able to take home $80,000. Still, you're driving your weight in vehicles. Yeah, both of these cars need to go today. Yeah, I definitely have buyer's remorse on one of them. Are they 40k a piece? What are they worth a piece? The minivan, I owe 30, but it's probably only worth 20.

Okay. And the Kia, I mean, it's unfortunately, it's brand new. I owe 52 and you drive it off the lot and there's 20 30 grand off yeah it's not 30 grand 30 grand how when'd you buy it well you say how's the interest on them no when when did you buy it oh I literally bought it in November because I had some serious vehicle problems and I was like just tired of having problems after problems private sale what's that because I mean November's not that long ago I mean mean, you're right. You do lose value instantly. But if you were to look at private sale, have you done that? I Kelly Blue Booked it. It said that it's down to 45, which I still owe about 53. 52 or 53? 53. Okay. So you're 83 in auto loan debt.

We'll add the three for fun. Man. Yeah. I wouldn't be arguing about what interest to pay off first on these credit cards, man. You got bigger issues. You are sinking because of these cars. What's the payment on that Kia? I just want to react.

I got it down to 757. Oh. Oh. And you thought, man, I'm taking them to the cleaners on this one. What a deal I got. I'm in pain. Yeah. Oh my goodness. Okay. Do you have any money saved anywhere? So I got the $1,000 that you guys want in baby steps. Good. Baby one step. Yeah. Okay. How can we get you making $80,000 tomorrow? So on the bright side, I do have a side hustle that I do on the weekends. I'm available and I'm able to bring about two, $3,000 extra and that's before tax.

My fiance, she does promote a hair care product line at which she's slowly getting some traction, making a couple hundred dollars, but it ain't. Is it costing her money because it's a multi-level marketing thing? I wouldn't say so because she does it from home and she doesn't leave the house. Hey, Google the disclosure statement for this company. It'll tell you exactly how many people don't make money or lose money doing this. They legally have to disclose that. And so my fear is she can spend her time doing something else that is actually going to guaranteed make money instead of buying a bunch of product hoping to sell it to friends yeah i don't think this is the way out for you guys you need real money now if i'm you my first order of business like numero uno is i need to come up with the

money that's going to close this gap on this Kia that I'm upside down, and I'm going to get out of this vehicle, or I'm doing a credit union. Yeah, to get out of that. I know it's going to stink paying rent because $1,200 is a steal for what you got, but man, you need to get out of this, and with your current income and a stay-at-home spouse, it's going to take forever if we don't do something drastic. It's not good. I've got to go take my tums after that one yeah you gotta get that kia is hurting me like it's hurting me bad i'd get out of that uh the van honestly isn't much better at 30 000 with the situation that you're

in so getting out of these vehicles is gonna come in clutch uh you gotta do it. This is The Ramsey Show. All right, George, you got yourself in a little bit of hot water, but I actually respect what you did because you're standing on business. That's a Monday for me, Jade. Yeah. So what I'm talking about is George posted on social media, really a standard teaching that we have around here that we truly believe. Can I read it? Well, yeah, let me put it on the screen okay we'll put on the screen i'll read it just so you hear it my voice so this is all it is it's an excerpt from my book breaking free from broke from the car loans chapter here's what it said on instagram after 60 months of payments you've got a paid for car paid off car

that you bought for forty thousand dollars that ended up costing you $50,000 thanks to interest, that's now only worth $16,000 thanks to depreciation. So as astronomically stupid as it is, why are people still buying new cars on payments, or worse, leasing them? You would think this is a benign, just a factual... It's a good question. Your boy is sourced. This is not me making up numbers. This is just based on the historical depreciationation you can look it up on edmunds or whatever your favorite car site is it's a good question four million views later 4200 comments later and most of them hate comments well you forced us to look at the man in the mirror you it's the truth is it is a great question and if we're not stopping in our lives to ask ourselves questions, then we'll keep doing

the same ridiculous things over and over. So yeah, if you have a car payment, it's your business to know what you paid for it, what it's now worth, and truly what it's costing you. Like that's just being a financially responsible adult is asking yourself those questions. And George, you asked a good one, but it made people. I done stepped in. And here's the deal. This is coming out of a call we just took where this guy had $83,000 in auto loan debt, making 60. How he got the loan, I'll never know.

And he's underwater deeply on both cars. You could never convince me that a car loan is a good idea or even worse, an investment. So here's what they said in the comments, Jade. Yeah, what are they saying? Well, George, it's's not an investment you can't look at it like that it's an expense and people should get to drive what they want here's the other one well it is an investment because it provides my income to transport me from a to b and therefore i should be able to spend 50 grand and not care about what it's costing me okay and then you have uh you have a car salesman i went to his profile he is in fact a manager at a car dealership who says they can't afford it you're assuming that

people that finance a car can't afford it worry about your own wallet wait a second my entire job is to worry about other people's wallets and uh i i am assuming they can't afford it because they financed it with idiots like you. Let me tell you something. Let me here. Here's what it equates to. Let's say you and I are friends and you listening. You and I are friends and we're we're hanging out together. And I see somebody who I know is about to jump you and mug you and put you in a headlock and beat you up.

I see them coming down the street. I'm going to warn you. I'm going to say, dude, like that cat right there that's coming towards us, like he's bad news. He's going to jump you. He's going to pull a knife. He's going to take you for all your worth. He's going to beat you down. I would be a bad friend to not tell you that knowing that that's coming if you continue down that path, right? That's all we're doing. We have no skin in the game other than to say, yo, these car payments are here to jack you. They're here to beat you up and leave you in the corner feeling some type of way. You can't tell me that what George has laid out here is not a true and real statement of the beating that you take when you get into a car

payment and it's funny to me george people get mad at us and i'm like we're it's not my car payment it's yours don't shoot the messenger help you yeah i mean the last caller said that he he he got him down to 750 a month for that one car and i'm going wait people also comment and say oh must be nice jade. Where am I going to get $700 a month to invest into a retirement account? Nobody has $700. Oh, you do. You're just wasting it, making lenders rich and driving your retirement into the ground. So let's be the true friend that we're telling you that we are. And let's tell you what we mean, because I think we hear the friction because they, and I can attest to this.

If you've never been around people who are driving paid for cars, if you've never seen that, which I come from that, I'm like, I never knew anybody who was driving a paid for car. It really feels impossible. And I will tell you of all the things walking through the baby steps with my husband and I,

of all the teachings that I heard, the one that I was most like, wait a minute now, is the car payment. I was like, I don't know if this is possible. I truly did not agree or didn't know that it was possible until you start going down that road. So George, let's explain the how to. Let's talk about a person who they're, you know, family of four. They've got two cars. Maybe one's not so expensive. Maybe it's like $20,000, and then they've got that expensive $50,000 vehicle or even a $40,000 vehicle. What does it look like practically when we say, hey, get out of these car payments,

start buying cars in cash? Let's give them step-by-step what that is. That's perfect. I'm going to say it's to this person who left this comment. How do you get to work without a car, George, riding a horse? I'd say sell that horse, man. That thing will buy you a nice car these days. You see what horses go for? So where do you start? No, I'm not telling people to walk. It's not either buy a $50,000 car or walk. If you have those options in your head, you got some loose screws up there. Here's the deal. Buy the car you can afford in cash. Now you're saying, well, George, I don't have any cash. I'm broke. I'm living paycheck to paycheck. Okay. Well, pause and stack up as much cash as you can. That might be $4,000. Well, let's go back even further. Let's say that person who

made that comment, let's say they have a $40,000 vehicle. They owe 40,000. Maybe it's only worth 34. So they're $6,000 upside down. They're like, hey, I'm already upside down in this. My car payment's $460 a month. What am I supposed to do? So what's step one? So if you're underwater on a car, you have one right now with an auto loan and you're going, all right, I'm willing to listen. I want to get a cash car. You could go to your local credit union. If you can't save up the difference, if you can't go to your local credit union and go, all right, hey, listen, I'm underwater. I need a loan for $10,000. Yeah. That'll get you out of that $6,000 you're upside down on

and give you $4,000 to go get a paid for used cash car. This is not going to be a pretty car. Compared to the one you were driving, it's going to be the crappiest car you've ever seen in your life. That's okay. I really don't care where you get the money. I'd rather have $6,000 of debt than $40,000 of debt. That's the teaching there is we're going down. That's the key. And then you drive that car for a little while. Maybe it's a year or two. You do the necessary repairs and also get a pre-purchase inspection. A lot of people skip this step and they go, well, Jade, it had $5,000 in repairs the first

year I had it. And that's why I only buy new. You got to pick a good one. That's on you. Choose a reliable make and model in a year. Do your research. All of it is out there. If you just Google instead of fall into the dealership lot going sell me your nicest car and here's the thing the truth is because i've only driven very

used vehicles you might have more repairs like that's the truth is you might have more but you're not paying eight hundred dollars a month in payments so if you do have a repair that's eight hundred dollars once every blue moon you're still800 once every blue moon, you're still coming out of head, right? Like you're still way better off than you were. But also don't think that you're going to have repairs every single month and this thing is a death trap on the road and you want to keep your family reliable and safe. You're blowing it way out of proportion. That is paranoia. And so buy the car you can afford in cash then upgrade over time Yeah, you you you went from having a 453 car note to now. Yeah, you have the six thousand dollar loan You pay that back really quickly. But now once that loan is gone

You've got that whole 453 payment that you were paying you can set that aside You can stash it away and you say okay when this gets to five thousand dollars or when it gets to four thousand dollars I'm going to upgrade my, I'm going to upgrade my current vehicle. Think about that. 500 bucks a month, six grand a year. So in two years you can buy a $12,000 car, three years, an $18,000 car. Yes.

And you keep doing that little by little. That's, that's how you do it. That's how my husband and I did it. That's how you break free from that cycle of car payments. And once you're out, you're out. Like once you're out, you're like, oh my gosh, I will never go back again. But the key is you do. I feel like this has been the theme of the whole show. You have to be willing to look at your life or your plan as it is and go, you know what? Yeah, I'm willing to make some changes and it's not going to be exactly

the way I thought it was going to be. But if you look at the question that George is asking here and, you know, why do we keep doing this? If we see how stupid it is, then you've got to say, am I fine with just closing my eyes and going, la, la, la, la, la, la, la, la. I'm fine with being that what he quote astronomically stupid. I'm going to put that quote on astronomically. That's an underused word. Well, you look and go, you know what? It could be worth it for me to consider what they're saying, because George and I have zero skin in the game. He gets paid nothing from that post. And by the way, I drive a 12 year old used car as a baby steps millionaire. So I live this out.

Listen, 2013. What is my 2013? Yeah. Yeah. I got a 20. I look at that. We're doing okay. And here I'm going to end on this comment from tommy everyone can't buy a used car someone has to start the purchase i responded don't let it be you that's it let someone else take the hit on depreciation and you benefit that's right so just to recap we're here to help you guys we we don't we're not trying to put you on blast we want you to be millionaires. All right, let's go through this Ramsey scripture and quote of the day. Suppose one of you wants to build a tower. Won't you first sit down and estimate the cost to see if you have enough money to complete it? That's Luke 1428. Then Jack Lew said, the budget is not just a collection of numbers, but an expression of our values and aspirations.

That'll preach. That will preach. Yeah, it's like a it's a map to get you to all your money goals. It's all it is. I like it. All right, George, I don't know if you knew this, but the money and relationships tour is coming. Oh, yeah, I'm pumped for it. That's Dave and Dr. John Deloney. Money and relationships are two of the most important parts of your life, but can also be the biggest sources of stress. I don't need to tell you that. If you're committed to learning how to navigate these conversations and grow your relationships, you don't want to miss the money and relationships tour. Okay. Like I said, Dave Ramsey and Dr. John Deloney are hitting the road for six amazing nights that are unfiltered, unscripted,

unpacked, and packed with wisdom that you can use to tackle the most important things in your life. George, they're tackling topics like, hit me with that. Ooh, raising money smart kids, how to fight fairly in marriage, finding contentment, building wealth. And it's cool because you guys as the audience get to choose what they talk about before the event. They're literally going to ask and and it will shape the night,

and it'll be kind of like improv with Dave and Dr. John. I like it. That's the unfiltered, unscripted part, which is going to make it very entertaining. Every night's going to be really unique and special. So join them. They're going to be live in Louisville on April 21st, Durham April 23rd, Atlanta April 25th, Phoenix on May 5th, Fort Worth on May 7th. And Kansas City on May 9th.

Love it. Get your tickets, ramseysolutions.com slash tour to join them in one of those cities. It's worth the drive. Coolio. All right. I love it. Let's get to those phone lines, George. We got Zaley in Salt Lake City, Utah.

What's going on, Zaley? Hi. Yes, you got my name right. Yay. Thank you for taking my call. My question and situation is we're in baby step two and we have paid off $45,000 in two years from $71,000. Wow. And my husband has a spending problem with part of addiction. So I'm at this point of considering just separating our finances to get through this. But I know I don't want to separate finances. And we've been doing so well.

Did something happen where he derailed? No, it's basically just he has a limit of $500 a month. And he keeps spending over one month out of the year. He'll get right on there, but most of the time it's way over. How is he spending over? How is he doing it? Yeah, so we've tried so many different ways from cash to debit card to even a credit card from before, but now we don't. But he's been spending,

and it's just on his addiction. So he just wants more money. So he keeps asking me every week for money. And I'm like, no, we got to stay on budget. And so it's just kind of that up and downhill as we go. So even the 500 that you're giving him, he's spending on the addiction, whether it's cash, whether it's a debit card. And what's the nature of his addiction? So he likes to drink beer and he smokes cigarettes as well. Has he gone through any, you know, rehab or counseling for that? Currently, we are going to marriage counseling right now. We are still talking about trying to get him to quit smoking. And right now, it's just kind of like that steady flow of like he wants to, but it's not quite getting there yet.

Is he in AA? Not currently, no. Is he willing to? I would hope so. But every time that we try to talk about it, he doesn't really want to say much about it. He doesn't really communicate that well with me, especially on those topics. I got to tell you, I would keep the money completely separate. And I wouldn't allow that person to have that kind of access to the money because they're dealing with something that is a health struggle for them. It's a mental struggle for them. And they're not in a place where they can handle money.

$500 is a lot of money. And especially if it's just like here, here's $500. There's no good that can come of that. Now, I do think that if you're in charge of the money, what a great thing to do would be, hey, let's sit down together. Here's what we make. Here's what we have.

Here's what I'm doing with the money. So he's got full transparency. He can see everything that's happening. But if you're handing a person who's addicted to alcohol $500 a month, they're going to spend it on alcohol. And that's the nature of the disease he's working through right now. Yeah. So when I am full control of the money and he's okay with that, I do, you know, we have conversations at least three times a month about it. I keep talking to him about it. So it's just trying to stay on that budget of making sure that it's there because it used to be way more. So right now we're just trying to make sure that we don't go over budget. So I think that might be the, just the problem

right now, instead of like the addiction problem. I know that's still a big problem. Well, you said you opened with, Hey, I gave him $500 and he's spending over it. And what he's spending over is on beer. So my question is, when you give him $500, what's the intent of that money? What are you thinking he's going to spend it on? Yeah, so I kind of did. I love finances. So I've gone through like the money aspect. So smokes of how many per week beer as well. And then there's that extra like 10 to $15 of, you know, snacks from 7-Eleven or something like that. So I kind of even it out through there each week. And so I give it to him each week and it's been going okay. It's just by the time it's about Friday or Thursday, he asked

for more and I'm like, no. And our therapist has said, don't give in to that. And sometimes it's just really hard to not do. So you know he's got a problem with alcohol, and yet it's still okay to fund him going to 7-Eleven to get alcohol as long as he stays in budget? That doesn't feel right. I really hate it. I know. I hate it. I think you've been putting up with this for too long.

But you're doing it. Yeah, I don't want to cut him off completely. Why not? Why not? Because that would be horrible. He's hurting himself. No, no, you're helping. He needs to agree to go to AA tomorrow.

Okay. And you need to cut off all ties. You need to make sure his credit is frozen. Give him no access to further money Until he shows that he can be trustworthy because there's a prerequisite to combining finances and that's communication Trust unity and alignment and he doesn't have those right now He can't have those because he's going through an addiction And so he needs to deal with that and right now it's going to be you hustling to try to pay off this debt while he

deals with his addiction. Because right now he's dragging this whole thing down until he deals with it. I agree that it's an addiction. So it's more like of a habit to him. But you know that it is. And here's the thing. And I think this is so true. You know when something has got a hold on you.

When the people who love you most are saying, you know, this is making me uncomfortable or this is really causing a problem in our relationship. And they can't stop. Like that's what even if it's just a couple of drinks. If you say, hey, this is important to me and it's making me uncomfortable, it's making me feel unsafe. It's making our finances in disarray. Even if it's two drinks a night, if a person is still struggling to get control over that, there is a problem there. I'm not saying they're like an all, you know, I'm not that person that can say that. But wouldn't you agree if you can't just say,

okay, yeah, I can stop that behavior or I can get a hold of that. That denotes that there is some sort of an issue there, a control issue that they're struggling with. And so if you see it, you've got the advantage of saying, I see that he doesn't see it but i see it and the counselor sees it i i cannot keep playing into that and keep feeding into that by giving him large sums of money like 500 a month is a lot of money no matter how you slice it out. Is he working full-time? Yes, he works full-time. I work full-time. I also have two jobs as well. Do you guys have kids? Yes, we have two toddlers. Oh my goodness. Have you sat down with him real seriously and went, listen, I care about this family. I don't want to see my kids lose their dad to this addiction. Are you willing to do what it

takes for our family? Yes. And he says, yes, ma'am. Well, he kind of just agrees with me. That's where it gets tense is he doesn't really know how to communicate with me. Yeah. Yeah. I mean, this is really tough until he gets into AA or somewhere where he can start walking through that rehabilitation. It's going to be tough. And for you, you've got to be able to just step in and say, okay, these are the things that I can control. These are the parts of the equation where I can keep us safe because it's, you're the adult now, you're the functioning adult in this relationship. So it's up to you to keep your family safe, your kids safe, your finances safe, keep the safety

in the home. And you have an opportunity to do that. And I your kids safe, your finances safe, keep the safety in the home. And you have an opportunity to do that. And I just want to validate that you should not feel bad for enforcing those boundaries because it's keeping everything safe. If you let him have control of that money, it's going to put you guys in a financially unsafe situation. So that's our take on it. Oh, sorry. You're going through that. Yeah. This is The Ramsey Show.