The Ramsey Show - App - You Can Only Control Yourself, Not Anyone Else (Hour 2)

Episode Date: December 2, 2022

George Kamel & Rachel Cruze discuss: How to know if you're ready to buy a house, Helping parents who keep getting scammed, 10 Question in 10 Minutes on Instagram live, Pausing investing to pay off debt. 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

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined by best-selling author and host of The Rachel Cruze Show, you guessed it, it's Rachel Cruze herself. And we are taking your calls at 888-825-5225. You jump in, we'll talk about whatever is going on in your life, budgeting, paying off debt, paying off the house, investing, building wealth, avoiding the traps, saving up that emergency fund. We are here for you, America. And Pearson is kicking us off this hour in Sioux Falls, South Dakota. Pearson, welcome to the show. Hey, how's it going?

Going great. How can we help today? Hey, so I'm 24 years old. I'm currently living with my parents. I've been saving up money for a house for about five years now. One thing is, one, am I ready to buy a house? And two, if I am, should I wait until the market cools down or go right away? Those are my questions. Awesome. So you've been saving for five years. How much do you have saved?

Got about $60,000 in cash. Way to go. do you have saved? Got about $60,000 in cash. Way to go. Got retirement set up. Got about $40,000 in retirement. You're crushing it. What do you do for work? HVAC. Commercial HVAC. Very good. Do you have any debt? Zero debt. Awesome. And does that $60,000 include your emergency fund, or do you have money outside of that?

It includes the emergency fund. Okay. So most of that can go towards this down payment for the house, and you're wondering, am I ready to do it? Am I ready to move out? Have you looked at homes in that area? Are you wanting to stay in Sioux Falls? Yes. I mean, prices are pretty outrageous right now. Give me a number of like a single family or a condo, an apartment. What are we talking? What am I looking to pay for? Yeah, are you wanting a single family home?

Yeah, a single family home. Okay. I'm looking to spend about $250 if I can, but I mean anything like worth living in is above $300 right now. So I'm wondering do i need to just raise my price or should i wait you know yeah how much you make a year so for the last five years i've been making about 46 to 50 okay and i just bumped up to making $110. Whoa. Doing what? The same thing?

Same exact thing. I was just kind of just getting my foot in the door at first, and I switched to a different job. Wow, Pearson. Congratulations. At the same different company? Yes, it's a different company. I commute to Minneapolis for the week, but it's all paid for. But that's where the money is, so I'm willing to travel forward.

Good for you. How long have you been in that job? Just three months now. Okay, that's awesome. Because what I was going to say is with that income, I mean, yeah, you more than doubled, which is awesome. So, I mean, yeah, looking at, looking at your numbers, I mean, I mean, you'd have 50 K to put down for a, for a down payment, which is that good 20%

down for, for a $250,000 house. Um, but that does leave you 10 grand for as an emergency fund. So, um, I mean, and making sure, yeah, you're that everything's no more, your mortgage is no more than 25% of your take-home pay once you do your budget and everything. But, I mean, the numbers you're giving us, Pearson, I mean, they look great. If you want to save some more for that emergency fund, have a little bit more than that $10,000, you could do that just to have some buffer. And making sure that it's, yeah, more around that six-month mark becausemonth mark because there's no urgency to buy this house. So I would have a really great emergency fund. And then I think you're definitely to the point about moving out. Are you wanting to stay in the Sioux Falls area, do you think?

Yeah. Okay. I want to stay around the west side of Sioux Falls. So that $110,000, that's just kind of what I'm on pace to make right now it's it just that's getting 60 hours I mean 20 hours of overtime as well so I don't know what should I should I calculate it as just 40 hours and just anything overtime is extra or if it's not sustainable and you don't see yourself doing this extra overtime forever, I would calculate it based on that number minus the overtime to give you a more

realistic number so that you don't have shell shock when you get into this house. But one thing you might consider since you have this income right now is, hey, what if over the next six months since I'm living with my parents, I have no bills. I'm just stacking up cash. Could I take that 60,000 up to 100,000 in the next six months? And now I can get that 300,000 home, still have over 20% down. And we say that we want you to get a 15-year fixed rate mortgage where the payment's no more than a quarter of your take-home pay. So that helps you figure out how much house I can afford today. Yeah. And I would say too, Pearson, because of, you know, you're single, right? I didn't hear you say. Yeah. You may not need that, but you know what I mean? Depending on what you, you know, just

because you qualify for a certain level of mortgage or even what our- Oh, the bank's always happy to give you more money. Yes. Yes. And even our formula, if you look and say, okay, yeah, but I don't need that. I'm great with just starting with a condo and living here for a few years, maybe upgrading later. So really too, it's what you need in the moment, what you can afford, what's wise. I mean, all of that comes into play. And yeah, I have a timeline and the idea of living at home is great because you're saving that money. So that's the but there is something too Pearson about about being on your own like there is just this I don't know this growing up that ends up happening when you're the one that comes home and has to look in the refrigerator and say oh man we're out of milk I'm out of milk I need to go to the grocery store yeah and paying bills

I mean there's just this level of growing up um and dignity that's placed in you that that is different so I mean again you could go rent for a year somewhere if you wanted to. You have enough money here, though. I just feel like, you know, buying a home is totally good, you know, again, if these numbers all work out. Yeah, you've done the hard work, man. I mean, you've got out of debt, if you had any to begin with. You've got a bunch of money in the bank.

You're a very wise, mature 24-year-old. Oh, it's all my dad has been watching Dave Ramsey, and I've been watching it growing up, and I got to give all the credit to him for getting me set up. That's nice. Well, you did it too. So you're saying that $100,000 mark, I'll be able to get that $300,000 house? Well, again, it all depends. You can use the mortgage calculator at RamseySolutions.com. It's free. And you can type your numbers in and say, if I got a $300,000 house, I put $100,000 down,

what kind of payment would that be on that 15-year fix? And if that's about a quarter of your take-home pay, so you're after tax but before any other deductions like investing and retirement. And minus your overtime. And minus the overtime. You budget around just that 40-hour a week. So if you're bringing home four grand a month, the payment comes out to a thousand. You're like, all right, great. That's the sweet spot. I'm ready to do this. Or you say, all right, I'm going to compromise. I'm going to get a condo for now because I can get one for 200

grand. And that's really going to set me up for success. And I can always upgrade to the single family later on down the road when I'm married and need five bedrooms. But you bedrooms. Yeah. But you're doing this with a lot of wisdom, man. I'm proud of you. Great job, Pearson. You're doing great. This is inspiring, Rachel. Can we just have more Pearsons in the world who are willing to do the hard work? Yes, and amen.

He's not trying to shortcut this thing and go, hey, I got a huge pile of debt, but I want to be a homeowner. And it's that perseverance. And this guy saved up 60 grand for a down payment on a home and has no other debt. And I'm like, that's the perseverance. That's the longevity of the attitude and spirit that you end up winning financially and building wealth and keeping it. Because it's not this flash in the pan. I got a shortcut.

I mean, he's doing it the right way. And he's working in the trades. And I've got mad respect for all of you in the trades. Oh, yes. And you probably don't have fancy four-year degrees with hundreds of thousands of dollars in debt to show for it. This is The Ramsey Show. welcome back to the ramsey show i'm george camel joined this hour by rachel cruz and the phone lines are open and they are waiting for you, America. So call us up at 888-825-5225. Well, this hour, we've got a special segment coming up at 2.30 Central Time.

That's 3.30 Eastern, and it's a new segment we've been trying called 10 in 10, and this is where we go live on Instagram while live on The Ramsey Show show when we take Instagram viewer questions from the chat and we try to answer 10 questions in under 10 minutes and Rachel you are you're new to this Ken and I have been doing this on the air have you nervous uh no I feel like there's a challenge you should be nervous wait you got to answer quick though like we don't get to just chat it up no that's the thing it's quick yeah lightning round responses I I'm great at that. I'm going to ace this test. You'll do way better than Ken. No, you and Ken are both great off the cuff.

So I have no... Now, Deloney, I would be worried about because he can tend to be longer winded when it comes to his responses. We don't know what's going to come out of his mouth. We don't know what's going to happen. So yeah, I'm the safe bet, George. You are.

If you were to win a contest right now of 10 money questions to be answered in 10 minutes, I think I'm your gal. Well, the only thing you win is the hearts of America. That is the grand prize, and I hope you get it today. So here's the deal. You've got to tune in to Rachel's Instagram at 2.30 Central Time. She's going live at Rachel Cruz on Instagram,

and we will be taking questions from the chat, not from the phone lines, just for that one segment at 2.30 Central Time coming up. So don't miss that. But for now, let's go to the trusty phone lines. Amy joins us in Tampa, Florida. Amy, welcome to The Ramsey Show. Thank you. Thanks for taking my call. Sure. How can we help? Okay. Well, my parents are 75 and 77 and they live in Kansas City. Um, also my sister, she's, um, she lives there with her 10 year old daughter. My sister is disabled and has a lot of health problems. So there's several things going on, but one is that my dad has this coin collection and I think he's running them into a lot of debt,

collecting the coins. And my sister has a credit card. She just uses, you know, for whatever fast food, whatever. And, um,

my mom keeps getting scammed. I don't know what to do. I don't know what to do. I don't know what to do to help them. I mean, and the house is overflowing with stuff. It sounds like the average Americans. So what are they hoarders? Like for real, it's a... What are they buying?

I mean, I think they kind of are hoarders. I mean, it's not like the episodes of hoarders where the house is filthy and stuff. There's just stuff everywhere. It's like clothes and toys. So, Amy, your heart for your family is so great, right? You don't want to see people you love making bad decisions. You don't want to see people you love in pain. You don't want to see them you love making bad decisions. You don't want to see people you love in pain. You don't want to see them, you know, in situations. But first and foremost, you have to

know it's not your responsibility. I know. Okay. I want that burden off of you. Even though your heart longs for something, at the end of the day, they are all adults and it is not your responsibility. Now, can you have a conversation with them? Sure. And I think there's ways that you can do it better than other ways. And we can kind of talk about that. But at the end of the day, you have to. It took me a lot of therapy sessions just to realize you can't control people. You can't.

And as much as you want something the outcome is not dependent upon you it is it is on them and so there is a level of this that you have to like oh I hear the concern and I hear the stress in your voice and so um while you don't want to see people you love in pain there is is a level that you do have to let go of that control because you can't control them. Well, last Christmas when I went home, they had fallen for one of these, we're going to help you get out of debt schemes. And they have allowed these people to charge $8,500 to their credit card. So luckily, I just happened to be there at the right time that we were,

we disputed it and the credit card company gave them their money back, but it messed up their credit score. And I'm afraid they're going to be doing the same thing again because my mom said, oh, somebody sent us a letter and they're going to help us get out of debt. And I talked to the gal the other day and she's going to call me back tomorrow. And I'm like, oh, no, not again. What do you say in that? Do you say, hey, Mom, do you remember what happened last time? And, like, ask her questions and let her come to a level of an epiphany.

I mean, we've talked about it throughout the year she i don't know if she forgets or or what i mean i think they're so desperate with the debt that they want that quick easy answer sure sure but i i don't i don't know i don't i don't know if I need to step in and try to take over the finances. I hate to do that. I don't know if they would let you do that. Probably not. And my mom handles all of the bill paying and all that. My dad doesn't even know how to. He never has. So it's kind of all on my mom. Yeah. I think the next conversation with mom is, mom, I don't want you guys getting taken advantage of. And there's a lot of scams going around, especially with folks that are older and none of them are real. And so here's what I want you to do. Don't answer the phone from people you don't know. Never give them money. Never give them

access to your account. Never give them your credit card number. And if something does come up, let me know and I can help figure it out. And that way, there's no condescension. It's just you coming around them to help them from getting taken advantage of. Would that be a different conversation? I've had that conversation with them except for the, you know, let me know and I'll help you figure it out part. I think that you're a great resource for them. You know, I mean, and I'll help you figure it out part. I think that you're, I think that you're a great resource for them. You know, I mean, when I was saying letting go of control, just knowing that you can't control them, but also you're in a position that you're like, okay,

have you been following our plan? Do you, you know, are you, are you familiar with, with the Ramsey? Yeah. Okay. So what you could say too is, Hey mom, dad, this has really helped me a lot and almost using a third party us, by the way, me and George can be your, be your bad cops and say, yeah, there's like this great podcast that I love. Um, we can even, if you hold on the line, Amy Austin will pick up and we will gift them financial peace university so that they can go together through it. And you can give them that as a gift from us and just say, hey, mom and dad, I think you guys should watch these videos.

I'm here to help. I would love to help you guys set up your first budget because with that, Every Dollar Plus will be there, our budgeting app. And you can kind of be the one that says you can't push it, you know, like you can't force it, but that you're so available to help because you are concerned. And sometimes, again, the the third party us being the ones explaining things and talking about things and all that sometimes parents it or for anyone it's it's an easier pill to swallow than their daughter preaching at them right if that makes

sense so so if that helps as well um i think that's a great idea Okay I will try that Just take it one day at a time I'm going up at Christmas Oh good yes so I think I mean if I were in your shoes and I don't know the Exact relationship you have with them but But enough of like yeah if my parents Were involved in stuff that I'm like gosh

That is just not wise I mean I would I have such a big mouth so I would Have to probably say something and just But out of the heart of like here stuff that I'm like, gosh, that is just not wise. I mean, I would, I have such a big mouth, so I would have to probably say something and just, but out of the heart of like, here's what I'm seeing. And again, it may not be any of my business, but this is what I'm picking up. And I feel like you guys are stressed. And I just, if I can be a resource to help guide any of this, I really want to be here because it's helped me in my life. You know, and you kind of tell your story of where you're at with money.

And that's the best testimony right there. And for your sister, who's using the credit card, along with whatever gift you're getting her, you can give her the total money makeover and say, hey, this book really helped me. The principles in here have allowed me to just have like a freedom with money. And I know life's tough for you with the disabled 10 year old. Like that's a really stressful place to be. So not having to stress about money, I think could be a huge help. And I hope you'll read this and got what I got out of it. We'll throw that in too, Amy. So awesome. We'll throw in a TMMO book too for your sister. Yep. Merry Christmas. Thank you. Yes. Thank you so much for the call, Amy. Wishing you the best. What a giant heart Amy has to help her family. I know. I mean, it's so hard. It's so hard. I can't control people. I can't change people. I wish I had the magic family. I know. I mean, it's so hard. It's so hard. I can't control people. I can't change people. I wish I had

the magic wand. I know. All you can do is be a resource for them and live your life in such a way they go, wow, Rachel seemed just happy and stress-free. What is she doing with her life? What's happening there? Oh, good stuff. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី Welcome back to The Ramsey Show. If you've been listening for a little bit now,

you know that we are going live with a very exciting segment called 10 in 10, where we go live on Instagram while on the Ramsey show and take questions from the Instagram chat. And currently we are live on Rachel Cruz's Instagram. So go check that out at Rachel Cruz on Instagram. Jump into the live chat with your questions. Here we go, Rachel. See, I know. Okay. You ready? Do you scroll? Do I scroll? It's a free for all. It's just happening. And it all starts right now. Okay, let's go. First question. Who are we going to answer?

Let's answer the last one. How many credit cards do you guys have, honestly? I know. Zero. A big fat zero. I get that sometimes. People are like, I mean, but really? Like, you have at least one.

It's like they really don't understand that you can live without one. I genuinely don't. I really don't. Amazing. Let's see what we have here. You can scroll as well, Rachel. What's the best way to carry cash? Oh, that's an interesting one. There's a little softball pitch. I'd say the Rachel Cruz wallet. That's the best way to carry. There we go. No, but really having cash, it's the envelope system. So you take your budget and look at the categories that you tend to overspend and cash those out, especially if you're new to budgeting. Carrying cash, it's so helpful.

Not only do you spend less, studies show, but you're accountable. You know exactly how much is left in that category in your budget, and it helps you. All right. Rafa.ie said, what do you guys think about major banks' financial advisors like Chase, Bank of America, and Wells Fargo? It's a big, fat thumbs down from me on that one, Rachel. I don't trust them because they have a vested interest

in selling you all the products from that specific bank which is all going to be debt products and loans. When it's attached to a bank that's usually what they're looking for.

So, yeah, not a fan. No thanks on that one. Okay, what else? Oh, this is a fun one for you, Rachel. E. Rogers said, what do I teach my four-year-old about money?

Oh, I mean at four four I would start with like maybe one or two chores that you help them with and say hey yeah let's and you pay them a little something and then do that maybe over a week and then take them to a store buy a little something and it probably won't be big but they kind of slowly start to grasp that money comes from work. It just doesn't come from mom and dad's back pocket. And so you can do that at four. You'll help them along the way. Very age appropriate, but yeah. Love it. Deanna Beth says, if I'm investing over 15%, should I feel guilty about spending on myself slash fun? No, Deanna. Number one, only be investing 15% until you have a paid for house. But no,

do not be guilty about spending, especially if it was in the budget. That means you did it with intentionality. That's right. That's right. On purpose. Rachel, you'll love this one. Yes. How should the budget change when expecting a baby? Oh, okay. So yeah, it will change. I mean, you'll have line items in there that you normally don't have and so what are some that got added for you and until the baby actually comes i had like a it was almost just like i mean stuff to get before baby comes so yeah you want to make sure you're stocked up on diapers you have the clothes you're going to do the nursery so you want to price out a crib you're going to price out if you get a changing table or a dresser. So there's some upfront expenses. Yeah, yeah, yeah. And then ongoing line items. Yes. And that can be a range. You can go like

really expensive on all of this or really inexpensive. So again, there's a range. All right. Miss Kania said, what do you think about online banking? I'm a big fan of online banking. We both have high yield savings accounts that are with online banks. But I also have a brick and mortar local bank. And so I like to have both. I want to make sure I can go talk to someone in person when I need to. And it's big value in having like a local credit union as well. Yeah. Our emergency fund and kind of above savings that isn't retirement is with an online bank ally we use. And then we have a local bank that has like our checking and everything. All right. We got some love from

the Netherlands. Thank you. When is a live event coming to miami florida i don't think we're going near miami anytime soon we need to go we should welcome to miami can you tell dave dave if you're listening let's go to miami all right let's see what else we got here have you guys ever been denied something because you don't have a credit card that's an interesting one our hardest one which we've somehow gotten around it but but a rental car that's the one that we kind of always run into i feel like but for us we use i mean i guess it's okay to yeah we we use a company i guess we can yeah sure enterprise i mean that's the one we use i've had great experiences with yeah we just have an account so every time we yeah every time we've

gone um to rent a car like at the beach or something, we've never had trouble. We've used that. But I feel like early on, we were having to look around and ask that question. So rental car was the only thing. Airport ones can be dicier. Make sure to check the policy of wherever you're renting a car from about their debit card policy. But Enterprise, usually it's like a $200 hold, and it comes back once you return the car. It's not that big of a deal.

This is a go-to from Marty. Should I be contributing to a matching 401k while in debt? No. No contributions. No investing at all until we are out of consumer debt. And one big reason is you're probably investing a few percent points now. You're going to be up to 15% once you're out of debt. And you need every dime you can free up to get gazelle intense about that debt.

That's right. Get out of debt as quickly as possible. That's a fun one. Are you watching the World Cup? I'm not. I've got to be honest. Shoot, I'm not either, but I see it everywhere, and I kind of feel like...

I feel like I'd be a bandwagon fan. I know our board engineer, Will, is a big soccer fan. I'm sure he's staying tuned, but... USA... Go America? Still in. Okay, good. USA. We're still in it.

Okay. Is there a good strategy for paying for high student debt? It's the same strategy we use for any kind of consumer debt. That's right. The debt snowball. List them out smallest to largest regardless of the interest rate. Attack the smaller one with a vengeance with all the margin you can muster up while making minimum payments on the rest.

And then you keep rolling that snowball as you free up the payments. That's right. Well done. That simple. How long should you save in Baby Step 3B? Ooh, this is a hot debate. It's not a time. I mean, for me, I'm like, it's not a major time limit.

It's more the amount I have to buy a house. But I know people want to start investing so you can actually split it up we do say that sometimes it's like yeah if you want to go 50 50 50 you know you're you're using some money to start investing if it's going to be a long time while saving up for the down payment just take you longer for the down payment but yeah that's a good one is it okay to have a credit card with a low limit? No. No. Low, boo. Just use your debit card.

I don't understand the obsession with using other people's money. Because everyone feels like- You get your rewards. Yeah, you're getting stuff. But here's the deal. How are you getting stuff? Well, the bank's giving it to you because other people are paying fees and interest. So you're actually getting the free stuff because other people are not handling their money well

and are struggling. And so it's a gross system. Just pay cash, you guys. It's not worth it. I saw, I think it was Jade, our newest Ramsey personality. She said, oh gosh, what was the quote?

Oh man, I don't want to butcher it. But it was like, you can be mathematically correct with also being wise. Oh, Jade's listening right now going rachel you were so close i'll come back next time because it's really good because it's like yeah does that all make sense math math like sure but that doesn't make that doesn't mean that you have peace that's a good way it's something like that all right this is a fun one for you rachel someone just started watching instead of listening and they're asking rachel, are you left-handed? Oh yeah, I am. Wow. Are you left-handed? No. Doesn't that mean you're

smarter or something? Isn't there a thing with left-handed? You're supposed to be more creative, but that is not the case at all. I think Rachel just shut that argument down. Let's see here. Rachel, where can I get a signed book? How do people get a signed book? We do them at a lot of events. Who is it? LeButlerJr. LeButlerJr. DM me and I'll look for your DM and send me your address. I'll send you one. You're about to get a thousand DMs now. No, just for him.

Okay, just you. Or her. I don't know who it was. LeButlerJr. Yeah, okay. Okay. Does a mortgage count as debt? Yes. Mortgage does count as debt, but it doesn't count as consumer debt in Baby Step 2. And so save that for what we call baby step six. Once you're out of debt, you have the emergency fund, you're investing 15%, saving some for kids' college, then start attacking that mortgage.

But it is absolutely debt. Try not paying and see what happens. Well, actually, don't try that because they will take away your home. Not a fun experiment. Not a fun experiment. All right. Oh, budgeting for private school. What are your thoughts on that, Rachel?

Yeah. From Minnesota Mom Life. Yeah. If it's in your budget and you're able to afford it, then yeah. And I know some people, they sacrifice part of their lifestyle in order to send their kids to private school, depending on where they live. We live in a great area, so our kids go to public. But I know people have thoughts about that.

And some people don't live in great areas where the public schools are not great. And you want your kids to have a better education than what that can provide. So that's all a values conversation. But you want to have the money for it. You don't want to stress your family out. All right. I think we have time for one last one. Stephanie, do you recommend IUL?

That is Indexed Universal Life Insurance. No, it is a scam meant to make the insurance salespeople money. Stay away from that. Stick to term life insurance only. James, how many questions did we hit? I lost count after 15, so y'all blow. That's a record, Rachel. That is a record.

Way to go. Thank you all for tuning in to Rachel's Instagram Live with your questions in the chat. We'll be back to the phones in the next segment, so give us a call at 888-825-5225. Way to go, Rachel. Great job, George. This is The Ramsey Show.

Well, folks, the Cyber Monday sale that we've had ends this weekend, and this is your chance to give some meaningful gifts this Christmas without spending money that you don't have. So go to RamseySolutions.com and shop our best-selling books and tools for under $10. You can still find some great deals on Christmas gifts for everyone on your list and have them delivered in time. Here's some of my favorites. We've got some quick-read books like Dave's new one, The Momentum Theorem, Dr. John Deloney's

Redefining Anxiety, all for under 10 bucks. And of course, the new 2023 Ramsey Goal Planner with Rachel Cruz, myself, Dr. John Deloney, and Rachel Cruz's new wallet in red, great color there, for the amazing women in your life. I'm going to get one for my mom. Hopefully she's not listening. And for the guys, we've got something for you too. We have some new Ramsey apparel. You might have seen me rock some here on the show. T-shirts, crew necks, hoodies with some of your favorite Ramsey sayings on them. I've been waiting a long time for the Ramsey swag.

And I'm hoping for a better than I deserve sweatshirt, Rachel, in case you're trying to shop for me. Oh, man. I got you, George. I got you. She's writing it down, folks. And for all your family, friends, co-workers, we have questions for humans conversation cards that are super fun, hilarious. They'll spark some great convos and select decks are on sale for only 10 bucks. So, guys, are you living and giving

generously this season? These deals are a great way for you to pass on what you've learned from our books and tools to others who might be struggling with money, relationships, or career, and it could give them the same hope that changed your life. So go check out our Cyber Monday sale before it ends at ramseysolutions.com. Let's go to the phones this hour. I'm George Campbell, joined by Rachel Cruz, and we're about to be joined by our new friend, Robert, in Atlanta, Georgia. Robert, welcome to the show. Hey, thank you. What's going on with you? Well, I'm turning 59 soon, and my wife and I have realized that retirement age is coming

up very quickly, and how poorly that we think we plan for it. I rediscovered the Ramsey Show here in Atlanta just recently and started doing our own calculations of how we are in the steps. Our order is kind of mixed up, and I'm trying to figure out now, okay, to get me to where I want to be and retire in a few years, how should I do that? Yeah, that's a great question, Robert. So how much debt do you guys have? We have about $3,000 on a car, which we're about to pay off,

and then about $15,000 on just a personal loan. Okay. And then a $200,000 mortgage. Okay. And then the mortgage. And then how much do you guys have saved in retirement? I have $140,000 in a 401k. And my wife, we've only been married for about two and a half years.

So she has about $370,000 in one, is it a 403B I think it's called? And then another retirement account, I think it's about $90,000. Okay. What kind of cash do you guys have on hand? We have about $20,000. $20,000. A little more. And then no other investments? That's not retirement or anything else? Well, I have a pension that will start when I retire.

It would be $3,000 a month if I do the whole thing, but she'll probably outlive me. So I'm sure we'll stretch it out so she'll get an at least smaller amount. Okay. What's your current household income? $240,000. Oh, that's great news. Yeah. Well, this bodes well if we can hang on to that income for a few more years. Yeah, that couldn't be a problem.

Well, the good news, Robert, is you have the cash in the bank to just be consumer debt-free today. Pay off the car loan, pay off the personal loan. Does that scare you to have only $3,000 in the bank? It would probably shock my wife, yeah. What else would shock her is not having payments next month and how quickly you guys are going to rebuild that savings, making $240,000 with no consumer debt. I mean, how long would that take?

A few months at max? Yeah, well, we're still paying for one kid through college, so that's the other. You know, we got his rent and all that. I forgot to mention that. Sure. But even with the car loan payment and the personal loan payment freed up on top of the margin you guys have with that 240 income, you should be able to save up $20,000. You know, that's another 17. So you'll be down to three if you paid off your debt today

and you could save up 17 in the next few months. Yeah. Okay. And now we're on track to continue investing in retirement, 15% of your incomes, and then start paying off the mortgage. That's my other question, because we're both investing the max, what is that, $52,000 a year into our 401k should I cut that back to just 15% and pay the rest towards the mortgage or continue you know putting in the max no I would pull it back to that 15% yes, and throw the rest at the mortgage. But I would also, you know, run out the numbers. You know, that may mean, Robert, working maybe another year, two, three years. Because once you have no mortgage payment and a paid for house,

then you guys have really freed up your income to throw a lot more towards retirement and then other investing if you want to do that as well. If you've already maxed out your Roth, do you guys have any Roth IRAs open? Yes, I do. I put 6% into the 401k and then 17 into the Roth, which I need to bump up a little bit, probably. Okay. So let me give you a vision of what this could look like if you follow the advice that we're laying out here. Today, you could be consumer debt-free with $3,000 in the bank left over. We're going to rebuild to a three to six months emergency fund. Let's call that $20,000. You do that in a few months. Now you're making 240K and all you have left is a $200,000

mortgage. What if you could pay that off in a few years? Maybe throw $75,000, $100,000 at it each year with that great income. Well, now, two years from now, three years from now, you have no payments in the world and now you can really start stacking up for retirement. Do you see how that kind of creates a domino effect, creates a momentum? Yeah. And so that's what I think your best plan is to retire with dignity, going into retirement with no payments in the world and a giant pile of cash. And this money is going to continue to grow for you in retirement. So you're on track. You're closer than you think. Nice. Doesn't seem that way.

I mean, I have hope just looking at these numbers because of your income. Now, if you weren't making much and it was going to take you a long time to pay off this debt, it would be a different situation. But if you can continue making this $240,000, you're going to be done cash flow in college pretty soon. The mortgage is going to be done in a few years. That really frees up your income. And Robert, and I would really encourage you and your wife to get on a budget and to do that month to month

because there may be part of this too that you guys have kind of just been living and you're like, I mean, kind of know where your money's going, kind of not, you're just enjoying it. And now that you're sucked into this plan to go really hardcore and to be budgeting and you know exactly what you're spending

on each category and you know what's going on that in and of itself is going to actually probably get you some more money you're going to feel like you got a raise is what a lot of people say when they first start budgeting because you didn't realize how much you guys were just spending and so that focused knowledge as well i think it's going to help your fear because when george said you're doing great robert's like doesn't like it. It's because a lot of stuff of that is in your head, Robert. There's a lot of things going on. You have a lot of thoughts. And it's like, your numbers are up here. But when you start getting facts on paper, it's amazing what happens. And by doing that, that's the budget. And I think that's really going to help you guys

have a game plan month to month. You're going to start feeling in control of your money. And then you're going to be able to actually see the margin to throw at not just this consumer debt, but even your house. Yeah. And if you're not already working with a great financial advisor, we have them at ramsay solutions.com. Click on Ramsey recommends, get in touch with a smart investor pro. It's not just about where to invest. It's someone to give you a holistic strategy for your money, for your retirement, to talk you off the ledge of bad decisions, to help you understand this stuff. And so I would highly recommend getting one of those in your corner as well. But anyone who's older, it is not too late for you to retire with dignity. No matter what has happened

in your past, you can make progress. You can do this stuff, but it's going to take some hard work, some sacrifice, some diligence. That puts this hour of The Ramsey Show in the books. I'm George Campbell. She's Rachel Cruz. This has been The Ramsey Show. Hey, it's Rachel Cruz, co-host on The Ramsey Show. If you want to do your debt-free scream live on the show, visit ramseysolutions.com slash debt-free scream. We'd love for you to come to Nashville and tell Dave your story. That's ramseysolutions.com slash debt-free scream.