The Ramsey Show - App - What Do I Do With This Extra Money? (Hour 3)

Episode Date: October 7, 2022

George Kamel & Ken Coleman discuss: Paying an employer back moving expenses, What to do with inherited money, The right type of auto insurance, When you can afford to cut back on work hours, What to do with extra money. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the POTS Moving and Storage Studios, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined this hour by my friend, Ken Coleman, and we are here for you to take your calls, to give you some hope in all kinds of areas of life. Maybe it's money, maybe it's your career, a toxic work situation, a bad debt situation. We want to help. The number to call is 888-825-5225. John kicks us off in Pensacola. John, welcome to the show.

Hey, how are y'all doing? We are doing great. What's going on with you? Well, I was working for a previous employer for approximately four to five months. They gave me a pretty good starting bonus package, and I worked there for a while, but it wasn't a great work environment. I didn't really enjoy it, and I thought I'd be better at my previous job. So I decided to leave. I understood I was going to have to pay back my starting package, which I was more than willing to do. But they've kind of tacked on a whole lot of other fees, which I feel are really exorbitant. And now I'm kind of stuck paying back my previous employer with way more than what they gave me in the starting bonus package.

Was this all in writing, what you would have to pay back? I did have to sign a contract saying that I would have to pay back some of the moving fees and stuff like that at the very beginning, but it was way, way, way more than what I thought it was going to be. Okay, but what I'm getting at is, is it laid out very clearly in that agreement to where what they're asking you to pay back is clearly, by the letter of the agreement, not included? Or is it just, it's included, but you just thought it would be less money? That's what I'm trying to get to i gotcha in the original agreement it really just kind of said that you're going to pay back the money that we gave you plus the moving expenses and uh things of that nature it doesn't really give out a outlined amount or anything like that okay so so the expenses that they are now wanting you to pay back they fall within the categories written very clearly in the agreement uh i would say yes but

they're they're way way more they're like almost twice as much okay is it listed out so you have receipts of what you actually so my point is you have financial records to be able to dispute that what they're asking is more than they actually paid you? Yeah, kind of. I guess I put it this way. They gave me a starting bonus. I'll give you the numbers if you don't mind. Sure. Yeah, they gave me a starting bonus of like $16,000.

I was like, okay, cool. They moved me from North Alabama down to Florida, where I am now. I left the company, like I said, after about five months. Now they're trying to say i didn't pay them back thirty four thousand dollars and i was you know kind of flabbergasted at that number i thought i was going to pay back maybe 16 plus moving costs of like maybe maybe twenty thousand dollars altogether but they're talking about thirty five thousand dollars what was the signing bonus so yeah that yeah 16k and then the relocation costs

the relocation costs is what I think is kind of crazy there because I'm looking at the numbers now. They're saying that it costs about $7,000 to move from North Alabama down to Florida, Pensacola, Florida, which is not even down to the panhandle near Miami. It's close to Alabama. Yes. So did they pay you $7,000? Did that end up in your bank account? No, sir. That was just how much they say it cost to move that far.

So they paid it directly with the moving company? Correct. Having moved from Georgia to Tennessee, it doesn't sound like it's off much. But again, you need to be asking for receipts. So the 16 in the signing bonus, the 7 in relocation, where's the rest of this 34 coming from? Yeah, and the rest, I'm looking at the thing here.

They had me in temporary lodging for a little while before I found an apartment down here. They're saying that the temporary lodging was $5,000 for just one month. And let me see here. I mean, that sounds fair for temporary if that's, you know, I'm doing the math. Corporate rents or corporate lodging is more expensive than a traditional rent. Yeah. That's $166 a night.

Okay. I just stayed in the basic hotel you know so i was just yeah i mean you gotta ask them you gotta ask them to show you all the receipts of this stuff if they will i mean if you're gonna dispute it you you gotta have some facts i gotcha and what was the agreement was if you stayed a certain amount of time you don't have to pay it back exactly it was like i want to say two years or one i can't remember if it's one or two years but it's one or two years yeah it sounds like there you didn't do your due diligence and homework and reading all the fine print and figuring it out and they're

covering all these expenses and it's not up to you to do the research and make sure that it's affordable you were just kind of like all right they're covering the costs um but at the same time you sign an agreement saying if you leave under those two years, you owe us all the money back. Yeah. So it stinks. I would put this under, I would file it under stupid tax. And it may be one of those money mistakes where you go, man, that sucked. I have to pay that back. I mean, you can try to fight it and do civil lawsuit. I just don't think you have much of a, much ground to stand on if they've got all their receipts, which I assume they do.

Yeah, I got you. I actually did hire a lawyer to see if they can kind of dispute this for like a $1,000 retainer, and he's kind of helped me out here. But, you know, I don't know if I can get the amount much lower. You might be able to settle with them and pay a smaller amount. That's probably best-case scenario. Yeah, because I'm willing to pay, of course, the $16,000 and something else, of course, on top of that, but I just didn't want to pay the full $34,000, to be honest with you. Well, I agree with George.

I would propose a settlement, but based on the numbers that you've given us so far, it doesn't sound like you're getting gouged here. It sounds like they're listing out every single expense and they probably have receipts because they're a legitimate company. And so at that point, there's not much to fight. Yeah. You got there.

Yeah, I mean, it sucks. I'm not trying to belittle that. This really is not a fun situation. And I'm rooting for John, but at this point it's one of those dang it should have read that fine print should have asked more questions should have asked them where they're lodging me because i don't know if this is going to work out over the next but it sounds like to me they gave you a detailed printout they gave you a detailed layout of the 34 000 it all equals up

to 34 000 correct that's correct i'm looking at it. Man, I mean, that's what I'd be asking for, and you got it. So, you know, unless you can somehow prove that they're price gouging. It kind of feels like a medical bill where, like, you don't know what the procedure is costing and what insurance is. And then all of a sudden you're like, oh, my gosh, I have a $34,000 medical bill. Yeah, that's about what it feels like, too. And that's kind of what I'm looking at, too, because I've personally moved across the country before, and it cost me $2,500 with all my stuff to move that's john doing it john's way with john's research and john choosing the company this is a company who

is flush with cash that's probably also some movers that are wearing weight belts instead of proper back support oh yeah oh yeah you know like they rented a truck that's not even, I mean, $2,500 to move across country. That might have been 30 years ago. Oh, yeah. Boy, oh boy, it's expensive to move these days. John, that stinks. And for those listening who are entering into a situation like that, do your due diligence and think about what if this doesn't go to plan? Maybe I should have this money set aside until those two years are over in case this thing goes south.

And that just puts you in a better financial spot than where we find our friend John. By the way, that's why you should also be using pods moving in storage. Great call. Our friends at pods. They're not going to cost you an arm and a leg. They're not going to do you dirty. They're going to take... That's a saying, Ken.

Is it? I got to teach Ken some lingo. I haven't heard that one. I'm sorry. Hey, more of that lingo coming up right here on The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer,

and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them

when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. folks the stock market has been rough lately and if you've been watching your investments take a hit it sucks i get it but if you're freaking out don't market dips don't mean you have to retire broke you've got to keep a long-term perspective. And remember that investing is a marathon, not a sprint. So look at the facts. If you invest $120 a month from age 25 to 65, you could have over a million dollars for retirement. No, it's not too good to be true. That's based on the long-term average return of the S&P 500, which is the top 500 American companies. Now, if you're not 25, you're a

little older than that. That's okay. It's not too late. You got to get started though. No matter what age you start investing, you'll be happy you did when it's time to retire. In fact, a huge predictor of investing success is that you actually invest. Shocker, I know. And you keep investing consistently. So get a pro in your corner to help you get started. To find one who can help you invest with confidence, just go to ramseysolutions.com slash smartvestor, and we'll connect you with smartvestor pros in your area who can help you make a plan for your goals and guide you through the ups and downs of the market. Again, ramseysolutions.com slash smartvestor. Jack joins us up next in Montana. Jack, welcome to the show.

Thank you. Thank you. What's going on? Taking my call. Well, I inherited $95,000. I'm 58 years old. My wife is 63. We bought a house and I want to get it paid off. We bought it for $280,000. We owe $195, Um, we have $36,595 and 60 cents in the bank. That's not towards any bills. We have no credit card debt. We haven't had any debt for years. Um, I'll go back to my story on, so you can get a little, just 17 years ago, or actually 20 years ago, I got divorced. I had $50,000 in debt. I'm focused on that. And now I'm sitting with the money in the bank, $280,000 in a 401k. And the only debt I have is $195,000 on my house.

Cool. My question is, I would like to take that $95,000 and just put it down on my house. And that gets me down to $100,000. With what we've been doing, our house will be paid off in five years, without a doubt. I got other people saying, no, don't do that, because I'll have to pay $12,000 in taxes if I take that money out for income taxes. If you take what money out? If you take the inherited money out? The inherited, yes.

I take that inherited money, I'm going to have to pay income tax on that inherited money. Okay. Which is roughly about $12,000. Other people are saying, and I talked to a financial advisor, I can invest it on a 13-month CD or whatever at like 4% interest. Well, of course a financial advisor is going to want you to invest it on a 13-month CD or whatever at like 4% interest. Well, of course a financial advisor is going to want you to invest it

instead of paying your house down. So that's not a reputable source in that regard. I'm paying the taxes on it and putting it on the house. And that puts you closer to what, 112 on the mortgage? Yeah. And let's still make it a goal to pay it off in five years. And that money in the bank that you have, is that your emergency fund with a little more? Yeah. Yeah. And let's still make it a goal to pay it off in five years. And that money in the bank that you have,

is that your emergency fund with a little more? Yeah. Yep, a little more. And we drive, that's the other thing is we drive old cars. I haven't bought a car.

We can't go out of town. We don't go out of town much. If I do go on a trip, I just rent a car. I figure it's smarter than having that payment every month if you borrowed money. I could it's smarter than having that payment every month. If you borrowed money, I could take the $36,000. And we thought about this because my wife is 63.

Like I said, I'm 58. With the car prices today, we do need a new car. So when we retire, we will have a vehicle. And we've thought about taking $20,000 of that $36,000 and buying a car that we can rely on. What's your household income? What is it? I got it written down here. $95,000. Okay, great. My wife is retired. That's $95,000 before I put 15% in a 401k.

We put $250 in a savings. We keep adding to that money. Okay. I would separate your emergency fund. So separate your emergency fund, have your three to six months, and then have a different savings account for your car upgrade and buy a reasonable used car with cash. And I'm paying this house down and I'm going to make that a goal because it's going to be hard to retire with a mortgage hanging over your head. And you got 280 in your 401k, you're going to need more than that to live on. And so at least without a house payment, you can limit your expenses. And so

you don't need much to live on in retirement. So that's what I would do if I was in your shoes. And I would ignore those other people because other people are broke and everyone's got an opinion, but this is your money and your life and having no mortgage payment changes everything. So appreciate the call. All right. Up next, we are going to Charlotte, North Carolina. Brandon joins us there. Brandon, welcome to the show. Hey, thanks for having me guys. Sure. What's going on? Yeah. So I just, we just moved to North Carolina actually, and we are in the process of trying to figure out what auto insurance to use. And I'm just not super familiar. Should we do full coverage, liability?

Obviously, there's tons even in within that. So I would love just to hear some of your thoughts on auto coverage. Yeah. I mean, you definitely want liability. You're going to want comprehensive, and you're going to want collision. And uninsured motorists is very important too. That one can tank some people. And a really easy way to do this.

What's that? I said I worked with one of your ELPs, and they had just kind of given me two quotes, one with full coverage and one with limited liability. And I was like, hmm, I don't know which one to pick. Yeah, I mean, I would go with the full coverage because these situations can put people in a real pickle when they are underinsured. And I've been there. This was about, I don't know, eight, nine years ago, I got in a car wreck and I didn't have great coverage. I was still on my parents' insurance and I was underinsured and we ended up getting sued. And luckily I didn't have to

pay anything out of pocket, but this was three years of nightmares hanging over my head going, am I going to have to go out of pocket for this? And she ended up getting 50 grand between the two insurance companies, her own and mine. And so that was a scary moment. And from then on, I made sure that I had as much coverage as I could get. That made sense for me. So did they walk you through the options of what it looks like to have full coverage versus limited liability? Not really.

He just kind of sent the two. I mean, it's broken down in terms of what it covers and how much and those kinds of things, but we never really talked about it. He just sent it over. So I wasn't sure because I was like, man, we drive two hoopties, if you will. And well, my wife's car is less of a hoopty, but I was like, the cars aren't worth that much. So it's really about just other people's medicals then.

Versus replacing your car. Yeah. Yeah. Well, I mean, when you have liability, collision, and comprehensive, that's what full coverage is. And I would recommend all three. So if you can swing it, can you cover the expense? What's the difference between them? Yeah, we're talking like $117 versus like $71, so it's not like a huge difference.

We're really getting up in the pace of going, like both of us getting on the same page and feeling like, I don't know, it just was like a small thing that I was just like, ah, but that's like an extra 40 bucks. I can go somewhere kind of thing. Yeah. Cause in this process, we're going to, we're starting, starting a company, we're starting a business. And so that's been fun. And, but you know, there's just expenses there. So I feel like we're cutting in all these spots. So I just wouldn't cut there. You don't want to cut there. I'd rather cut a subscription than cutting into my insurance. That's right.

So if you can get a good rate on full coverage, I'm going for it, and that sounds very reasonable. Sweet. Okay. And you can get a second opinion on that, but I've got full coverage and I sleep better at night, and that's worth the extra, you know, 20, 30 bucks. And you don't sleep well as it is i terrible sleep issues but one thing i don't worry about is insurance and there are so many

types of insurance can i know you your brain just melts a little bit having to talk about insurance for too long here we go hit people with the types of crazy insurance george you love this and actually i love it too because it's quite entertaining it's like a it could have been a top 10 list on Letterman. Yeah, we covered this. What do we got? I did a TikTok on this, Ken. There was something about aliens? There was alien abduction insurance. Alien abduction insurance. My personal favorite.

My favorite is the pet rapture insurance where atheists will take care of your pets if you die and you're a Christian and you get raptured. The atheist said, hey, for the low price of $10 a month, I'll make sure Fido's covered. See, it's this kind of crap that makes Christians look bad.

That's true. That's just ridiculous. Well, Ken, I did a five-day video series that's completely free to help folks get more confidence in their coverage. You can go sign up for that at ramsaysolutions.com slash confidence. You'll get an email every day with a quick three-minute video. And by the end, you're going to be a pro. Even Ken can do this stuff. Thanks to you. Yeah. I'm here for you, Ken. And don't buy alien abduction insurance. No, we don't recommend that goes

down. We got bigger problems. All right. More of your calls coming up on The Ramsey show I'm Ramsey Show. I'm Ramsey personality George Campbell, Ken Coleman, co-hosting today. This is your show, America. Give us a call, 888-825-5225. Laura joins us up next in Knoxville, Tennessee. Laura, welcome to the show. Hi, guys. Thanks for talking to me.

Absolutely. How can we help today? So my husband passed away in December of last year. Sorry. I took a little bit of time off from work. Thank you. I took a little time off from work after that, and I returned to work, but at reduced hours. So I had been working a regular 40-hour week. I'm now working a 32-hour

week. So, of course, my annual salary is adjusted for that. And I'm just curious if that's something that I can afford to do long-term. You know, planning for the future now is quite a bit different than it was this time last year. So I'm a little stumped on how to proceed from here. Sure. Well, we can walk through some of these numbers and give you some peace about that. But I just want to say I'm so sorry for your loss. How old was he? He was 47, and I'm 41. Oh, my goodness.

Much too young. Yes. Well, let's walk through some of these numbers. So what are you making right now with that 32 hours a week? Right now I'm at $51,000 per year. You said 61 or 51? 51. Okay.

And is that enough to cover your bills? Oh, yeah, definitely. Okay. So you have some margins still. I'm pretty frugal. That's good. Do you have any debt? I have a car loan that I owe about $8,500 on that's going to be paid off this month. Oh, good. Okay. And that's it for debt? And that's it. Nothing else.

How much do you have in the bank, liquid cash? I've got about $45,000 in retirement, 403B. I've got $35,000 in a mutual fund. I've got about $40,000 in a savings account, and I'm working on selling about somewhere between $75,000 and $100,000 worth of assets, gold and some things like that. Yeah, and is that mutual fund? Is that just in a taxable brokerage account that's non-retirement?

Correct, non-retirement account. What would you think about cashing that out? I don't know. I only recently opened it, so I don't know how it's performing or anything just yet. I think I've had it open for maybe three months. Okay, and then George, let me just ask a quick question here. The margin on your 32 hours when you get paid, how much margin do you have? I know you're frugal. How much do you have left over after all the bills? Well, I automatically will put half of my paycheck in the savings account,

and half of it covers everything that I need to pay plus some. I usually add a little extra at the end of the week. Okay, so that's what I thought. And the reason that I asked that is really to address your initial question, which is, you know, how long can you afford to keep working 32 hours a week, if I understood you correctly? Yeah. And the answer is you can afford to do it now.

You're comfortable. My goodness. I mean, you get $40,000 in savings. I know what George is going to tell you about paying off that car today. Yes. Well, that's sort of the plan. As I've been selling things, that savings account jumped up really, really quickly. I think you can afford to work 32 hours a week as long as you choose to. Okay. You're not silly. You're in great financial

position, wouldn't you say, George? Oh, yeah. You said you're 41? Yes. Okay. So we've got an investment calculator over at ramseysolutions.com. I want you to play with that and then get in touch with a SmartVestor Pro to help you create a retirement goal. Because crunching the numbers here, you're 41 at 61. You said you have $45,000 in retirement. And let's say we were able to add, you think you could add $800 a month to that? Oh, easily. Yeah. Okay. So at a 9% return over that 20 years, it'll become $800,000. Now, my goal for you would be to have over a million so that you can retire fairly comfortably without a house payment. Do you have a mortgage right now? No, house is paid for. Wow, what's that worth? That's awesome. In this market, it's probably worth about $275,000. Okay, yeah, you're in great shape. So if you've got no payments

in the world after you pay off this car today, which I'm so excited for you to do as soon as you get off the phone, Laura, right? Yes, okay. You know what we should do? We should do it sometime. We phone in the lender. Right now, we do another line. We call the lender right now, and you pay it over the phone, and we celebrate. We couldn't do that because we wouldn't want to reveal her bank account info, but that would be fun. That's true. It would be fun to pay it off on the air.

James, we've got to figure out how to do that sometime. Yeah, he's on it. He's on it. He's working on it. So, Laura, if you did, let's say, $900 a month and you worked until 63, you would have over a million. And that's with a 9% return, which is reasonable. And so I have a lot of faith that you can retire with a lot of dignity, especially because you don't have a house payment. Without question.

And your income is only going to go up over 20 years, right? Yeah. Even if you remain at 32 hours. And so you're in great shape, and you've got $35 in the mutual fund. You're going to go up over 20 years, right? Yeah. Even if you remain to 32 hours. And so you're in great shape and you've got 35 in the mutual fund. You're going to sell off these assets. You can invest that money once you sell those assets as well since you already have a paid-for house. Your next goal is just to continue to build wealth, be generous, and also spend some money and enjoy your life. I know you're frugal, which tells me you probably don't have a lot of, quote, fun.

No, I do. What do you do for fun that costs money? That costs money? I have a travel buddy that she and I take long weekend trips, and we go to concerts, and we do things like that. That's nice. When's the last time you did that? A couple of months ago. Okay, awesome. Look at George trying to spend your money, Laura. I'm trying to have some fun. I got your back over here. I'm not going to let him get crazy with your money. Well, I'm excited for the future, Laura. I know the past has been dark for you, but I'm hoping for brighter things ahead and a great retirement. So thank you so much for the call. Proud of her. Yeah. I mean, no, let's just, I want to pause here and just point out that Laura

having financial peace to the level that she does certainly helps when you lose a spouse. Oh, yeah. That is so devastating. It's hard enough on its own, but then to add on to that financial stress of how am I going to pay the bills? Yeah. She's going to be fine. And I love that she's traveling and getting back out there and doing life. Wow, tough stuff. Forty-five. It's heavy. Too soon. All right.

We're going to take a quick one from Amanda here. Amanda, get straight to your question. How can we help today? Yeah, so my husband and I are coming into about $20,000 here in the next few days, and we're just wondering how to best apply it to our baby steps. We're on baby step two but we've had some recent vehicle trouble and so we're not sure exactly what we need to do are the vehicles in the shop well they're not in the shop they're so we have the vehicle situation

actually under control right now but there's one that still needs a little bit of work. But they're both very much hoopties. One's a 2008 Dodge Caravan, the other one's a 2001 Lexus RX300. Okay. And how much debt do you have? We have about $32,000 left. What kind of debt is it? It is some student loans, the rest of our timeshare that I don't want to talk about it, and a little bit on a credit card. Okay. I would continue doing the debt snowball. How much do you guys have in the bank in cash? We have our $1,000 emergency fund, and I mean, I just got paid today, so we have a little bit more than that, I suppose, but that's for the monthly bills and stuff. Okay. Well, you can create a sinking fund in your budget for these car repairs, but I would not go out and buy a $10,000 car tomorrow because you're worried about what could happen with these cars. So I would create a sinking fund where you say, all right, we're going to put $100 away every month into a savings account to cover this car repair because a year from now, we're probably going to have a $1,000 repair on our hands. And if you do have a repair, pause the debt snowball, cash flow it, work side jobs, whatever

you got to do to cash flow it, and then get back on the wagon and continue that debt snowball. But pay them off smallest to largest with that $20,000, and don't let it derail you with these car troubles. All right. Well, thank you. Absolutely. Thanks so much for the call. More of your calls coming up. Give us one. 888-825-5225. I'm George Camel. He's Ken Coleman.

This is The Ramsey Show. 1 Timothy 1.5. The aim of our charge is love that issues from a pure heart and a good conscience and a sincere faith. Abraham Lincoln said, Perhaps a man's character is like a tree, and his reputation like its shadow. The shadow is what we think of it. The tree is the real thing. I'm George Campbell, joined by Ken Coleman, The Sour. Open phones at 888-825-5225.

Jane joins us up next in Houston, Texas. Jane, welcome to the show. Hey, guys. Thanks so much for having me. I appreciate it. Absolutely. How can Ken and I help? So a couple months ago, my husband's car was stolen from out front of our house in central Houston.

Wow. It's a real bummer because car prices have gone up significantly since we bought the car. Luckily, he was really diligent in finding comps. And so insurance paid us properly in my opinion. Um, given that we had a $10,000 note on the car at the time it was stolen. And so now we've taken away 26,000 from insurance. Um, the loans paid off and we have 26,000 sitting in the bank. We can't buy the same car with that 26,000. I don't really want to take on more debt. Currently, we're a one-car family and it's kind of weighing on us. We both work really long hours,

but different schedules kind of. I mean, really the same schedule, but we both just, depending on our days at work, have different hours, basically. I might have to work till eight o'clock at night. He will get done at 6.30 or vice versa, just depending on the day. So it's been a lot of Uber, a lot of Ubering. Basically, my question is, do we just buy a junker? Hold on, Jane. The difference from a junker to a $30,000 car is very large. There's a spectrum there. Yeah. Why not buy a $20,000 car? Is that a junker to you? Well, I guess I don't know. I don't really know what we could find for $20,000. Their answer is no. A $20,000 car, what's your income? Combined, we make about $310,000.

Okay. And so for y'all, a $20,000 car is a junker because you make that much money. I am on. And I feel bad because I have a really nice car. So I would feel bad. Where is your money going, Jane, that you can't afford to cash flow a thirty thousand dollar car um well we can afford a thirty thousand dollar car but we can't afford i guess like we couldn't afford to replace him his car with the tahoe that he had before yeah but we're not doing that we're not doing that we're what george is saying is i mean but i i okay first of all you got to go to go to a basic car website, Facebook marketplace, and just look in your area in a budget range of $20,000, just through $20,000 or $15,000.

I mean, depending on what your financial goals are. Do you guys have a lot of debt, Jane? We have student loans, yeah. How much? About $97,000. Yeah, but look at a ten thousand dollar car a 15 if you're trying to cut back and use some of that cash to go to the student loans but you gotta have i guess that's what i was asking is should we buy like a ten thousand dollar car and put the rest of it towards the student loan yes or should we love that plan yes because that car is not your forever

car that might be a one-year car and you sell it and you upgrade once you're completely debt-free with an emergency fund and you can easily cash flow a $35,000 car making 310 once you have no debt right yeah that's we could save up for one at least why don't you go on again go online and just search cars between $7,000 and $10,000 and just see what's out there. You don't even know. Trust me, I know. The reason I know is I've got a kid who needs a car, a teenager, and so I've been looking. I'm looking all the time.

You'd be surprised what you can get that's highly functional. George, you pulled up something. Like a sedan style? Yeah. george you pulled up something style yeah i'm pulling up just tahos and seeing in my area what i can get for twenty thousand dollars for example but we're not doing 20 george we've already got her down to 10 well even down to 15 you can get a 2013 tahoe so i think the problem is expectations versus reality you just don't know and that's not being negative you just have it look you gotta look but you guys had a brand new Tahoe pretty much.

What was the year on it? It was a 2016. Okay. So 2016 going down to a 2013 feels like a downgrade, and that's hard emotionally for you guys to process. Yeah, but she's looking at a sedan. I'm telling you. My thing, Jane, is I think you guys need to take control of your income

and go, where's this $310,000 going? Because if we can clean up this debt... We've been cash flowing a different project recently. And so that's kind of where some of it's been going. And we're able to shift back now to our debts. But we're just trying to figure out what do we do with this pile of cash? Do we buy a car? Do we stay a one car family? I think you need the two cars. You need a car. You spent the first two minutes in distress over the one car. It's not worth it.

You guys make $310,000. Get a reasonable car for now. Pay off the debt. Get the emergency fund. And then we can upgrade the car. Yeah. Okay. That's it.

Simple, simple, simple, simple. And yes, it's going to take some swallowing of the pride to go, I don't really love this car. It's okay. It's a car. It gets from, I don't really love this car. It's okay. It's a car. It gets from A to B without having to do Uber. That's it. Yeah.

So, but that stinks about the stolen vehicle. That's a tough situation for sure. That really is tough. Oof. Glad insurance took care of them. All right. You're the insurance guru. I love insurance.

And Lynn's up next in Cincinnati. Lynn, how are you? Hi. I'm good. Thank you. What's going on with you? Yes. So my question is, I have about $10,000 in a life insurance policy. I have been packed away in 2020 and I have a parent plus loan. Thank you. I have a parent plus loan that I owe $12,000 on. And so my question is, I need a new vehicle,

but I've decided to wait. I put a little bit of money, like $1,500 of that pen, into just getting the car up to par and hoping to get me through two or three years. Should I put the rest of that money down on the Parent PLUS loan? I do have about $1,000 a month set aside in my budget to put towards the Parent PLUS loan.

I just started this whole budget thing with you guys. Oh, that's awesome. Yes. Welcome to the weirdos who budget. Right. Yes, I'm excited. Okay. So you're doing the right things.

Do you have any other debt other than the Parent PLUS loan? My mortgage, which is $80,000. I had to sell my home that we were living in and I bought a new home that's something I could afford myself. Okay. So $1,500 is going to... Everything I got on that house, I could... That's great. Well, we're going to worry about I got on that house, I could... That's great. Well, we're going to worry about that later on in what we call Baby Step 6. Yes. And so right now, Baby Step 2, we're paying off the debt, which is the Parent PLUS loan. You said you're going to put $1,500 into the repairs to get the car functional for the next few years.

Yes. And then $8,500 towards the Parent PLUS loan, which gets it down to $3,500? Yes. And then putting $3,500? Yes. And then putting $1,000 a month, is that on top of the minimum payment? That includes the minimum payment. Okay. So in the next four months, you're completely debt-free, if you follow this plan.

And then you can start building your emergency fund, which is three to six months of expenses. Do you know what that would add up to? Yes. fund, which is three to six months of expenses. Do you know what that would add up to? Yes, I think it was about, I added it up once before and I think it was close to like maybe 12,000. Perfect. And so that's our next goal. And that thousand you were spending on the Parent Plus loan can now go towards the emergency fund. And so I would love for you to have that emergency fund within six months. What's your income? That would be great. So I bring home about $1,360 every two weeks. Okay. Great. And so with

that, you know, $2,600 a month, we're going to try to limit our expenses as much as we can. If you can do any overtime or work on the side to increase that, I want to get you that financial foundation as soon as possible so that you can begin investing. Are you investing right now? Not really. I mean, I work for a school system, and so my retirement is set up through them, and I'm 52 years old.

I'm about ready to retire. I can retire now, but because of all that's happened in the last two years, I'm not retiring yet. Oh, I understand. Well, we want to get you to a great financial spot. So what I'm going to do is gift you one year of Financial Peace University, as well as EveryDollar, our budgeting tool, because you've already got started on that. And we want to walk with you over the next year as you build that foundation. So sorry for your loss, and we're wishing you the best on this journey. Thanks so much for the call. That puts this hour of the Ramsey Show in the books.

My thanks to my co-host, Mr. Ken Coleman and all the folks in the booth. We've got Austin and James and Andrew and Zach, the whole gang's in there. And you, America, we thank you for listening in. We'll be back with you before you know it. Until then, spend wisely, save intentionally, and give generously. Good show. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from the Ramsey Show on YouTube.

Go watch and subscribe to the Ramsey Show channel on YouTube.