The Ramsey Show - App - What You Need Is Some Financial Breathing Room

Episode Date: May 13, 2022

George Kamel & Ken Coleman discuss: Opening a Roth for a grandchild, Getting a spouse on board with the plan, How 1099 employees should plan for taxes, Should you rent out your house? Why some employees are freaking out over going back to the office, The best way to become financially secure. 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

I'm out. From Ramsey Network, this is The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to being well. I'm George Campbell, joined today by Ken Coleman, and we're here for you, America, here to help you take the right next step with your money, your life, your career,

your relationships. So give us a call. 888-825-5225 is the number. That's 888-825-5225. If you need some confirmation, affirmation, motivation, education, inspiration, that's what Ken is here for. Wow. I'm just the eye candy. I'm going to tell

you, it's like you prepared to say that. I know you like words. I do. That is. You're a smith of the words. Big promise. Oh, I see what you did there. Thank you.

Uh-huh. Colleen joins us to kick off this hour. She's in Springfield, Illinois. Colleen, welcome to the show. Hi. Thank you for taking my call. Absolutely. I have a granddaughter who's nearly 17. She's worked a

part-time job since last August. And I would like to start a Roth IRA for maybe invest in some mutual funds. But I've been talking it over with her mom and dad, and her mom seems to think I-bonds are better. And all I know is that they are tied to inflation, but I don't know very much about them, and I was just wondering what your thoughts are on those. Well, Colleen, that's a great question, and you're very wise. Very wise. So here's the thing. I-bonds are going to lock your money up,

and there's a lot of fine print when it comes to these I-bonds. A lot of people have been asking us about them. Should they be doing it? And there's just better options when it comes to investing. It's kind of this awkward. It's not great for short term and it's not amazing for long term. And so it's this weird in between. And so I'm not a huge fan of the I bonds, but I do love the idea of opening up a Roth IRA for your granddaughter. Now, this would be a custodial IRA, right? Right. Okay. And she does have earned income. Yes, she does. Okay. I'm a fan of that side. I mean, have you looked into other options for her? What is the savings for? What's the goal here? Just for her retirement. Okay, retirement. Not college, not a car, just retirement. No. Yeah. Wow. Just get her

started so that maybe when she gets out of college, she might contribute to it, and I'll probably put a little bit in when I can, and by the time she's 75 years old, why, she'll have a good-sized chunk. Oh, Colleen, you're the best grandmother ever. Like, ever. Will you be my grandma? Yeah, George and I would like you to be our grandmother as well. How old are you, Colleen? 75. Wow. So you're thinking, how do I create a legacy for my children's children? That's a really cool one. That's right. Do you have money? What's your retirement look like? Well, I've got about a million and a half. Yes. This is awesome. And Kelly, this is the fun part about this call. So you're right. Your daughter's wrong. And you get to tell her, well, I'm still right after all these years.

I called this guy, George, and he told me that I bought it. Yeah are... Yeah, the Roth is absolutely the smart play. It's not just... I've always wanted to go with, and there's three other grandchildren younger than the one that's 17, so I'm just waiting for all of them to get a job before I can start a Roth IRA. If you tell them, hey, as soon as you get a job,

we're opening this custodial Roth IRA, and you show them some numbers of what that money can turn into, their eyes are going to light up and go, I'm going to get a job tomorrow, Grandpa. Yeah, absolutely. That's awesome. So the reason I asked about what is this for is if it's for retirement, I'm good with that. But if they needed to access the money earlier, I was going to mention something like the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, the UGMA or the UTMA. Not fun to say. No, they won't really need it for college. They've got 529 accounts.

Oh, great. These kids are set up. Yeah. That's incredible. Yeah, I hope they're not too spoiled. No, well, hey, that's what grandmas are for. Colleen, we're so proud of you. Yes.

Way to go. Yes. And I would definitely go with that custodial Roth IRA. Awesome. All right, we're moving on to John. He's in Chattanooga custodial Roth IRA. Awesome. All right. We're moving on to John. He's in Chattanooga, Tennessee. John, welcome to the show. Hi there. Thank you guys. Sure. How can we help?

So my question, I'm pretty new to Ramsey and baby steps and all that. I have the book, The Total Money Makeover on order. So I'm going to get that and freshen up on it but i'm curious about getting my spouse on board i've kind of started to talk to her when i started talking gazelle intense and this and that i kind of got a little roll of the eyes and i'm just wondering if there's some good bullet points to toss her away well uh did you lead with gazelle intensity is that the first thing that came out of your mouth associated with all no no no okay definitely not okay because that one that'll freak some people out right um so george i way in here so this would be my john this is how i would do this is that instead of talking about all the sacrifices all the gazelle intensity all the budgeting all the things that you must do to win

in the baby steps i would first start with the end result, the destination. You know, we call it financial peace university for a reason, because on the other side of this is financial peace. And then not just the emotion of that financial peace, John, but also the freedom to truly live whatever dream you have. Dave says you're new to this, but Dave has said for many, many decades, if you live like no one else, later you can live and give like no one else. And so I would start with, here's where we are now, babe, do you like how it feels now around money? And what do you think she's going to say?

It's not ideal. It's not ideal. It's not ideal. So we get her there, right? And we go, she acknowledges, you acknowledge, we're on the same page. Things aren't ideal. They certainly could be better. And they certainly, we'd like for them to be great. And so she's going, okay, I'm with you on that one.

And you show her what the end result could look like. Retirement accounts, trips, whatever, whatever, whatever. that one and you show her what the end result could look like retirement accounts trips whatever whatever whatever you two dream together for a little bit before you try to walk her through all these uh baby steps where it's going to be really really hard so here's my point when you get her bought in to a desired future well then there's no convincing her anymore. George? Oh, yeah. I love the idea of having that vision, Ken, and having those shared goals. Before we have shared language, we have to have those shared goals. So sit down with her, John. Maybe you guys go on a little date night and say, hey, here's my goals. Here's my heart behind wanting to do this. Are you on

board? Will you go on this journey with me? And if she says yes to that, and you guys come up with those shared goals, and you start getting excited about that future, then you're going to be willing to do what it takes to get to that future. That's right. And so I'm going to gift to you Financial Peace University, because you said you got the book, but you don't have FPU, right? No, what is FPU? So FPU is our proven plan, our video courses, nine lessons, our flagship product to get people on the path. And I think going through that with her, she's got to be on board with you, watching these videos, having conversations. I think that will get people excited.

That's one of the best tools we found to get people on board. And when you hear the debt-free screams, a common denominator is we went through FPU, and that was the catalyst that started everything. And here's the great part, John. Dave does all the hard work, right? He's going to be the bad guy. You just sit there and go, I think he makes some sense. Let Dave and George and Rachel be the bad people here because they're going to make it really, really palatable.

So hang on the line. So hang on the line. Kelly will get you that. That's part of Ramsey Plus, which includes EveryDollarPlus, our premium budgeting tool. Once you guys get on a budget because it's tied to that shared goal and that amazing vision, man, you guys are going to be unstoppable. So good luck with that. I know it's a tough conversation. A lot of people struggle with getting the spouse on board, but when you do, you will create some amazing, amazing momentum. This is The Ramsey Show. I just saw a study that really made me sad. It showed that families owning life insurance in the U.S. was at its lowest point

since the 1970s. After what we've been through the past few years, I'm just lost on how people don't make this more of a priority. How are you going to make sure your family needs are met if something happens to you? This is why getting term life is an absolute necessity. Rates have never been cheaper and the whole process to apply is pretty simple with many companies not even requiring an exam anymore. This is why I send you to Zander Insurance and I have for almost 25 years. They'll make sure you get the right protection at the lowest cost possible and they're there for you and your family every day. I challenge all of you to make sure your families are protected.

It needs to be a top priority. Call Zander at 800-356-4282 or visit zander.com. That's 800-356-4282 or zander.com. Welcome back to The Ramsey Show. I'm George Campbell, joined today by Ken Coleman, and we are taking your calls. The number is 888-825-5225. If you need some push in the right direction, a right next step for your work, your money, your life, whatever it is, we are here for you. 888-825-5225. Mark joins us up next. He's in Tampa, Florida. Mark, welcome to the show. Hey, how you guys doing?

Great. How are you? I'm doing fantastic. Just had a question for you. I'm trying to plan for taxes next year. So as of today, me and my wife just completed baby step number three. Awesome. Yes, I'm feeling great there. But this year I got a new job and I'm 1099. And so all that money we used that I got, we put towards the student loans to finish them off this year. So now that's done, and now I've saved up, you know, three to six months' worth of expenses.

I'm just trying to think, you know, how do I plan ahead for these taxes? And also, you know, we have a third child on the way, so we're looking to get into a bigger house at some point in the next two years or so. I'm just trying to think of how do I save while also making sure I'm covering my taxes. Yeah. Well, the way I look at it, so you're not paying taxes right now as a 1099 employee, and so the onus is on you. Yep. And so I look at that as I don't actually have all of this money. It has a name and it's Uncle Sam. It's the IRS. And so don't treat it like it's just money coming into your budget. Treat it as if, okay, we have 70% of this and the other 30% we're going to sock away in a savings account

so that we can do our estimated quarterly taxes. Are you doing that currently? Kind of mentally. Really, I'm just throwing everything into a savings account now. I'm going to tell the IRS, I mentally paid my taxes this year. That's good enough, right? I want to try that one as well. What do you mean mentally? You mean your entire paycheck is in one savings account?

Yeah, so my wife works as well, and so that's pretty much covering our our mortgage and our monthly utilities and all that so really everything i get is just going straight to savings wow but it's more so a house savings account yeah i haven't really separated out just for taxes what tax bracket are you in or do you think you will be in based on this new job and income um me and my wife combined, we'd probably be right around $300,000 for the year. Right, so you know what your percentage is?

Yeah, 35%. I think that's the safe play. You're obviously saving 100% right now, but to George's point, you need to put a name on it, not just all in the new house fund. So the Uncle Sam Fund, I'll go with George's very witty advice there. The Uncle Sam fund is at least 35. I mean, I'd probably make it 35%.

Yeah, I think that's a safe bet. And anything left over, if you go, oh, all right, taxes were less. That's great news. You've got some extra money to put towards your next goal. But what I would do is start to calculate, okay, what's my taxable income going to be this year? What's the tax burden going to be? And then divide that into quarterly payments and make sure that you're logging into the IRS website and making those estimated payments every single quarter. That's what's going to help you avoid any penalties and fees and fines later down the road.

Okay. And the quarterly payments? Quarterly payments, yeah. But I would also seek out one of our tax advisors. Yes. You know, one of our endorsed local providers at RamseySolutions.com, because a good tax advisor is going to give you not just general advice we gave you, but some very specific things that you can do.

To minimize your tax burden. To minimize your tax burden. You're keeping records, things you're able to write off. I mean, there's a tremendous amount of benefits to a 1099 income if you have the discipline and you do. I mean, my goodness, you're already socking the entire check away. So discipline's not the issue for you. It's strategy. So I'd go see a good tax advisor, somebody who you trust and everything they explain makes total sense to you to where you wouldn't even really need them after that initial advising part. And that's how you'll make those quarterly payments and you won't end up paying too much. And you can obviously look for tax benefits and tax savings.

Good stuff. All right. Thanks for the call, Mark. Appreciate it. We're moving on to Brittany. She's in Denver. Brittany, welcome to the show. Hi, thank you so much for this opportunity. This has been a debate from my husband and I for about seven months. Glad to step in the middle of it. Is he on the phone, too, or is he not around? No, he's with the baby in another room. I told him to go away. That's good. How can we help?

So we do not know if we should keep our home that we're living in right now, and we have an opportunity to buy a house in Oregon, another state away, for a flip. So, we don't know if we should keep it and rent out this house, or if we should sell it, and yeah, if we should sell it or rent it out because we eventually want to move back here and be in this house or be in this area and have it as a rental and we move back. So are you planning on moving to Oregon? Yes, for a couple years. So you're going to buy this house, move to Oregon, and then eventually you want to come back to Denver? Correct. Oof. Well, do you have the money to pay for this new house in cash? We do not. Okay. So we're talking double mortgages here because your current house is not. We owe $230,000. And we do have an opportunity for, we have somebody in line to rent it. We actually have a studio that we rent above our garage, and then the house would be separate, and we would get $3,000 total for the rent. And my mortgage is $1,740.

What's the new house cost in Oregon? So it costs $440. We are selling our business here when we move, and we will get $100,000 for that. $100,000 for the business. So we will drop that down. What would the house sell for that you're currently in? About $550. Okay, so that would leave you, I'm guessing after closing, probably around $300,000 you'd net from the house sale if you sold it?

Correct, yep. And then $100,000 from the business. You could almost pay for this Oregon house in cash. Do you have any money in savings? We have $32,000. Okay, but that's your emergency fund and everything. No, my emergency fund is $16,000. Oh, fantastic. Wow.

Well, here's an idea. We're on baby step five. Go ahead. We are not fans of becoming real estate gurus before your current home is paid off. We're not fans of having multiple mortgages because it increases your risk, decreases your financial peace. So if I woke up in your shoes, I'm selling this house. I'm going to take that $300 plus the $100 from the business plus my savings,

and I'm probably going to scratch up the other $8 and pay for this Oregon house in cash, which means you don't have a payment in the world. Right. So you're going from having two mortgages to now no mortgage. And then how fast could we save up to buy another house in cash, and then we can get into real estate investing once we have our current home paid off. And let me just add to George's brilliance here on this. He's saying, what he's saying is right, because you're looking at making, if I heard you correctly, about $1,300 a month if you were to rent your current house, right?

And that's if nothing ever goes wrong. That's right. That doesn't include expenses to keep the house up, because you've got a house, I mean, a room over the garage plus a full house that you were the landlord on. And you're a long-distance landlord. And you're long-distance. Thank you. And so if you look at the numbers, I don't know which side of the debate you're on, but if you look at the numbers for renting, it doesn't even come close to the money you're going to stack away by doing what George told you, by not having a mortgage.

Down the road. Yeah, like immediately. Like as soon as you move to Oregon, you start stacking up money because you don't have a house payment. The real question is, whose side are you on? Is your husband in favor of selling the house or does he want to keep it? No, we both are. We figured you would say sell it, but we were hoping we could get away with renting it.

Listen, you can get away with it. Who wants to were hoping we could get away with renting it. Listen, you can get away with it. Who wants to live a life of getting away with something? You have permission to do what you want, Brittany. And you know what the truth is? Right. You're not going to die from either decision. But I'm here to help you create, build wealth as fast as possible the right way. And to me, that's to reduce the risk.

And with this mentality, you go, well, we should go get another place with very little down and rent that out. And you start to get starry-eyed at all of the upside while removing all the downside, removing all the risk. And what if the tenant doesn't pay? And what if the HVAC goes out? We've got two mortgages. We're stressed out of our eyeballs, and we're trying to do it all long distance. I'm not stressed out. I'm already stressed.

I'm stressed out thinking about it, Brittany. So that's our plan. You can do with it what you will the advice is free and some say it's worth what you pay for it Ken there you go this is the Ramsey Show We'll see you next time. Welcome back to The Ramsey Show. I'm George Campbell, joined by the effervescent Ken Coleman, host of The Ken Coleman Show. Ken, you came hot off The Ken Coleman Show right before this show. How do you do it?

Well, it's just, you know, you've got a job to do. And what I do is I walk out from that studio to 15 feet over to this studio. Wow. That must have been why I was effervescent. What a sacrifice. I'm just trying to shock you with big words, Ken. Well, you didn't shock me. That's a word I like to use. But it was well placed. I'm not sure it's true, but I liked it.

I'll keep trying. Thank you. Well, Ken, we are headed out on the road next week. Oh, I can't wait. We had a great time in Vegas. Amazing crowd. Boy, what an electric crowd. That's the only word we can use to describe it. Yeah. Pure electricity. And we hope to recreate it in Orlando. So we're going to be in Orlando next week. We've got a few more stops planned for the fall, but this is it for our spring tour of Building Wealth Live. And as you all know, there's so much crazy stuff going on right now. People are looking for direction on how to handle their finances day to day, but they're also struggling to see how it's even possible to build wealth in today's economy, in today's environment.

So we're going to walk you through all the crazy and teach you the steps to build wealth in today's economy, in today's environment. So we're going to walk you through all the crazy and teach you the steps to build real lasting wealth. Financial principles that we teach are the only principles that work in prosperous times and in hard times. And no matter where you are with your money today, you can get on the path to building wealth. That's what this event's all about. So we're headed to Orlando May 19th. And this fall, we're headed to Phoenix September 13th, Sacramento on November 1st, Minneapolis November 10th, San Antonio November 15th. And it's Rachel Cruz, myself, Dr. John Deloney, Ken Coleman, Dave Ramsey, the whole gang is going to be there. It's going to be a great time. So go get your tickets today because they are selling fast.

People are excited to just get out of the house and go to an affordable event. Tickets start at just $25. Bring your friends. It's going to be amazing. Go to ramseysolutions.com slash events and reserve your seats now. All right, Ken, so on your show, you talk about work and career and purpose, and with that comes all the trending news of remote work,

and now the shift from remote work to hey guys we're coming back to the office oh boy and it's created a big stir hasn't it oh man i mean you have people that are up in arms about this you know there's data out there that says that uh nearly 60 percent of people said that they'll quit their job if they have to return to the office people that are remote workers i mean they have really jumped into the whole sweatsuits and Rocky Road ice cream. It's amazing because just a few years ago, remote work was a rare concept. There wasn't a ton of full-time career remote jobs out there. Yeah, more and more people were doing it,

but we're talking about a small percentage of the American workforce. Then the pandemic hits, and, of course, everybody goes home for a while, right? And so you get some people that go, man, this is my jam. And by the way, fine, until you potentially hurt your professional possibilities and your income. Yes. So I want to show everyone an example of the kind of stuff we're talking about, the stances people are taking. And of course, we're going back to TikTok, Ken's favorite social media platform. I love to be on the talk. And so this one's about why are remote workers being forced back in the office?

Check out this video. I still find it very hard to believe that a lot of corporations are forcing their employees to come into the office after working from home for two years. It's very obvious that you do not need to sit and look at them all day long. Now, I'm not naive. I know that many of these corporations have these big buildings and major real estate investments. They just simply just can't go under.

So they need to get the employees back in the building and they need them to use the building. Otherwise, they'll have to renegotiate these leases, get out of these contracts that they're in, and they probably just don't want to do that. And it may not be financially beneficial for them to do so. So I get that, but it's just always a situation of choosing business over employee well-being. Because if employees want to stay home and they did a great job working remotely when they were forced to, and now they want to stay at home full time, why are you forcing these hybrid models or them to just come back to the office? Oh, there it is.

All right. So this is a common sentiment. This is not an aberration. This is not something out of left field. This lady is expressing what millions of americans believe um i take issue with the fact that corporations are asking people to come back in a hybrid model i'll break that down in a second but corporations aren't asking people to come back because they need to use the building you know that's that is not the issue okay they if if they don't want to use the building

and they wanted to to go all remote they could get out of those leases. They could sell those buildings. Yeah, we've got an example of this right down the road here from Ramsey is a health care company. Yeah. That has been empty. Empty. Completely empty. So it's not about usage.

It's not like a country club and we've got a bunch of workout machines that are going to get rusty if people are on them. That is not what corporations are doing. What they want is they want more teamwork, collaboration, and a better culture. I mean, I'm reading these headlines every day. And you see these CEOs that are saying, we want a return to work to a hybrid model. And it's for reasons of, we believe we need that connectivity. And we as human beings are relational. Now, here's the thing. For all these folks that like this lady who are so against it, there are millions of people who are going, I'm lonely. I'm disconnected. It's created depression, a lack of productivity because you're just always in the same environment. There's no boundaries between your home life and your work life. So there's a lot of negatives to this

work from home, this idea of flexibility. And then I want to just comment on hybrid. So hybrid is, I mean, it's letting people work from home a couple days a week or three days a week in the office two or three days a week. And this is becoming widely adopted to the point that I think a couple of years from now, I think it will probably be the most common form of work environment that we see as a hybrid model. I just think that's where we're headed. But my goodness, you're willing to not go back to work. You're willing to change jobs, to quit, to start over, to maybe put yourself in a position where you've got to scramble all because you don't want to leave the house i i think you

have to be cautious with that you know but you do what you do you uh but i would not make this a line in the sand yeah not when they're offering you the hybrid model and to be clear we are not against people working remotely now at ramsey we all work in the building and that's something you know when you sign up for this place. This is how we operate. Right. But the idea of we were in person, then we went remote, and now we refuse to go back and they're forcing us. I just don't believe in this narrative. Well, this is a very good point, George.

The word forcing. Are they forcing you? There's no armed guard showing up at your house telling you you have to go in. They're saying, if you want to work here, we need you in the office. You have free will. This is America. You can say, pound sand, I'm out. You know, if that's what you want to do, do that.

Don't gripe and act like the evil corporate man wants me back in the office because he needs to see his cubes filled. This is nonsensical snowflakery. I just made that up. That's a great word. I like that. Yeah, so what it comes down to, Ken, is you're not entitled to anything because you're an employee and you work remote.

You are entitled to your opinion, and you are entitled to your choices. Ooh. That's what you're entitled to. Here's the takeaway. Outside of that, you're not. If you want to work remote, go find a job that allows you to work remote. Fantastic. Is that it? That's the summary? We solved it? Yeah. Wow. They should put us in charge of something. But here's the deal. This is good. Listen, this has always been a money show. It's always going to be money

focused. What I'm cautioning is, is that you were to take a step backwards professionally and financially all because you feel you have the right to work in your conditions all the time and the company has no opinion about it's it's nonsense so don't hurt yourself over this get over it yeah i i gotta tell you i don't see what the big deal is i really don't the office uh the hybrid model i i can see if you love remote work and you can get full-time remote work go for it i'm all for it be remote be i i can't be away from people that long i got deep problems you love me too much i love george i need to be around george you know what i'm saying said no one ever but what's the problem with a little bit of work in the office for some collaboration, some culture? It's like we're ignoring the fact that

we're humans and that we're relational. Yeah. Well, one thing's for sure. Work has got a lot more complicated and you've got to start figuring out where are my values? What do I want for myself and for my family? Where do we want to live? And the beautiful thing is you get to decide. You have free will. You have agency over your life. You control your destiny. And the beautiful thing is you get to decide. You have free will. You have agency over your life. You control your destiny. And the moment you think it's in the hands of the employer, the evil greedy crooks, I got to just back up and say, hey, hey, hey, you have choices. Remember that. Take control. This is The Ramsey Show. Thank you. I'm George Camel. Next to me, my friend Ken Coleman.

And this is The Ramsey Show. We're taking your calls this hour. 888-825-5225 is the Ramsey Show. We're taking your calls this hour. 888-825-5225 is the number. David joins us up next in Columbia, South Carolina. David, welcome to the show. Hey, thanks a lot, guys. Absolutely. What's going on with you? I hear y'all talk a lot to these people who are like in their 20s and they think they got it tough. And I'm thinking you guys got decades ago. I'm 51, so I just want a little bit of hope here, I guess, because I feel like 51 is the new 91 or something.

51's the new 30, man. You got to twist it. So we're not anywhere remotely where my wife and I were. We want to be in everything. But again, I'm 51. I'll just say a little younger than you. I won't get her age. I'm not stupid. But, you know, we really don't have anything built up yet. Now we're not in dire straits. We're not one of these people that have, you know, $50,000 in debt

or anything, but, you know, we want to be somewhere. We have twins that are eight years old now. So, you know, we've got a ways to go before they're off on their own and everything. And so kind of the main thing I'm wanting for some hope here and some direction, I guess. Okay. Well, what's your financial picture look like? Do you have any debt? I would say my estimate is around $8,000 between credit cards and some medical bills. Okay.

And I have a car note. I do have a car note. And a car loan. Okay. And that all adds up to $8,000? Well, no. The car is another about $10,000. Okay. Don't lie to me. Come on. I'm trying to help you. Okay, so how much money do you guys have to your name in liquid savings, cash, all that?

Oh, let's see, about $3,200. $3,200 to your name. And have you started investing for retirement? Where are you guys at on that front? I did. I started a 401k a few years ago and also some 529 plans for our daughters. And then a friend of mine made a good point. He's like, stop investing right now until you have everything paid off, and then go back to investing. And I said, you know, I don't want to do that because I got some good momentum doing it,

and I didn't want to lose that because I was proud of myself. But he said, don't keep putting that money in the retirement. Right now, get off the debt, and then you can. This is a wise friend. I didn't want to lose that time. I'm with your friend on this. You're feeling the pinch, David, because you're 51. You're going, well, I want to retire with dignity, and so I've got to be investing.

But then you're trying to clean up a mess over here, and so you've got a lot going on right now, and so I want to simplify it for you by helping you focus on the baby steps. This is the path to financial peace, and your friend is right. We've got to clean up this debt and use those payments you were making to now help you build wealth. You see where he's coming from there? I do, and he actually teaches financial peace at his church, so I know he's a wise person. Good. So as far as the hope side know he's a wise person. Good.

So as far as the hope side, it's not too late for you. You can still retire with dignity. You may not have $20 million in the bank, but you absolutely can do this. You can get out of debt, get the emergency fund in place, start investing, pay off the house. The kids are going to be okay for college. They'll figure it out. They've got 10 years before we nail that. And so just take it one step at a time, one day at a time, but focus your efforts on one thing at a time.

And right now, that is getting out of debt. And so $1,000 is your starter emergency fund. Beyond that, the rest of the money is going towards this $18,000 of debt. Yeah, and another thing I should probably mention is we live in a very small house that I actually lived in by myself, and I'm married and have now two children, and this is not at one. We absolutely have to move to a bigger home. That, of course, now is going to cost a lot more, and we'll clear a little bit on this house, not very much, but we have to move to a bigger home just because we've got four of us now instead of one. So that's something we have to do. Now, if you sold the house, how much would you net?

About $20,000. You'd net $20,000. Could you rent for a while if you did that in the Columbia area? I would probably pay more in rent than I would in a house. How many rooms, how many square feet? That we have now? Yeah. 1,100 square feet, two bedroom, one bath.

And it's just the twins, just the eight-year-olds? Right, just the twins and my wife and I. Two boys, two girls, boy and a girl? Two girls, two girls. So why is there not enough room? I don't think you have to leave. I got to tell you, I'm going to push you on this. Okay.

Tell me why you have to leave. The two girls can share a room. You got two rooms. And they do. And they don't have a complaint about it. They don't ever, you know, voice complaints about being with sister. But I just feel like we need the space. We need that and us to be in a nicer part of town than where we are.

Wait, wait, wait. I'm not saying that those are good desires. I'm not saying that those aren't good goals. I'm questioning whether or not they fall in the category of have to. Right, right. Are they in the want to? No question. And I'm not, listen, I'm trying to challenge you

because if you can hang on for another year in that house, George, how does that change the picture? Well, if one year from now, picture this. You're out of debt and you have a fully funded emergency fund. You can breathe. You don't need physical breathing room right now. You need financial breathing room. Oh. Tweet that.

Very nice, George. So, David, what's your household income? Right at 98. I'll call it even 100. Oh, my goodness. Yes. Between the two of you? I'm sitting tight, George. I'm sitting in this house. Okay. What we need to do is get control of this fantastic income you have, because clearly it's not working for you right now. Where's all this money going? Are you guys on a tight budget?

No, that's one thing. We really need to to sit down and we're not good. I'll be honest. We're pretty poor about, we don't communicate. When she writes a check and I write a check or I spend money on something, we don't really communicate a lot. And I do have a side hustle that makes about $4,000 a year. So it's very variable, but on average about $4,000 that I do. Okay. Well, step one is you guys getting on the same page and getting on a budget. And I'm going to help kickstart that for you as a gift. I'm going to gift you Financial Peace University, our nine-lesson video course, and EveryDollarPlus, our premium budgeting tool.

It's all part of Ramsey Plus, so hang on the line. Kelly's going to pick up, and we'll make sure you get that code and get signed up for that. What I want you to do, though, sit down with your wife and create what might be your very first actual budget with every dollar. List out all of your income, list out all of your expenses and actually track what you're spending and go, hey, you know what? We're spending $900 on food. We could trim that down. We can cut the subscription for a temporary time. Hey, what if we sold this? Start to get on a game plan, get excited, get creative, and you're going to start to feel that momentum, especially when you watch all the videos with her in Financial Peace University.

That's going to light a fire under you guys when you have that shared goal and you go, we're getting rid of this debt, and we have a number on it. It's going to be 19 months for us to be completely out of this, and then we have our vision for this new house. But right now you're floating through life just wishing and hoping. Yeah, yeah. I appreciate the help because i just feel like i had to hope being you know i hear these kids are under 24 and like you got

you got decades ago and 51 i feel like i don't have that much no you're fine you're fine walk out the baby steps yeah listen stay in that house please your eight your eight-year-old twins don't even care they don't even know. This is you and your wife getting over your long-term desire, knowing that it's not as far out as you think it is if you do what George told you to do. Yeah, I'm not worrying about investing in 529s right now. Let's worry about that another day. Right now, let's get out of debt. Let's get on a budget. Let's get the emergency fund in place so that we can breathe. And there's a 100% chance you will have to retire.

There's a 50-50 chance the kids go to college. And so let's worry about that later. Maybe they can get scholarships. They can work part-time. But what happens is people in your shoes, they end up being a burden to their kids because they retire broke, and now the kids have to take care of them. I can't tell you how many calls we get like that,

and I don't want that for your future or your kids' future. Okay, thank you. So have a long-term mindset, David. Think about what the 10-year picture looks like. Man, in 10 years, we're going to be completely out of debt with a paid-for home and investing for retirement. We're going to be able to retire with dignity because we have very little expenses. Yeah. That's what I want.

Yeah, yeah. You know, this have to versus want to, this is a real— It's a dangerous word, this have to versus want to. This is a real – It's a dangerous word, the have to. I'm telling you, you've got to really lock in on that and go, wait a second, do I want this or do I have to do – you know, it's like is there an emergency that's pushing a reaction or is it just, oh, I really want this? It's just human nature. You know what? I'll tell you why I love to give that particular piece of advice to someone in that situation.

Years ago, I went back to the house that me and my brother lived in with my mom and dad when I was in high school. I couldn't believe how small it was. It looked like you could put a matchbox car in it comfortably. Like it was that small. But I was like, I never, I had this little teeny tiny room. I didn't know. Kids don't care. I'm in the same boat.

One tiny bathroom for the four of us. My room barely fit the bed. And I'm a little guy. But, hey, this is the kind of sacrifice you've got to make if you want to win long term. You've got to have a long term mindset. No more have tos. No more had tos. Let's get to work.

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