The Ramsey Show - App - You Can’t Win with Money if You Keep Borrowing It

Episode Date: May 9, 2025

From Ramsay Network, this is The Ramsay Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by my good friend and Ramsay personality Jade Warshaw. We're taking your calls at triple 8 8 2 5 5 2 2 5. That's the only way to get on this show. I mean I guess you could email in but good luck. The pile is high. Take a bribe. Jade is apparently taking bribes. You can Venmo Jade to get your question to the front of the line. We kid but it's not a terrible idea. Amanda's going to kick us off in Calgary. What's going on, Amanda? How can we help today? Hi. Hi guys. How are you doing today? Doing great. Good. Yeah,

I'm calling to see my father passed away last July. And when I was backpacking about 15 years ago, we created a power of attorney to kind of protect me when I was traveling as I had one experience where all my stuff got stolen. What I didn't know was that over the last 15 years he had taken out about $520,000 worth of high-interest mortgages. In your name? In my name. Wow! That feels like fraud to me. Yeah, so yeah, I'm just kind of,

at first it was one of those things where I just didn't know if I should go to the courts for that because I was defensive and protecting my father. But since now it's been almost a year and it's not really been cleaned up at all and I'm kind of not sure what to do financially. Oh gosh, so have you, you have reported it or not yet? I haven't.

Okay. No. I think that's the first step, right? Is you can see this thing on your credit report. So kind of saying this, this wasn't me, this was my dad. And yeah, the fact he's, he's no longer with us. What are those next steps? Yeah. Sorry. When I did speak to one lawyer at the beginning

and he said because I had a power of attorney that my dad was legally able to do this on my behalf. That's kind of all the legal advice I've been given. Okay. Yeah, so, and I did sign it, but in 2011, I believe. So yeah, I'm kind of just not sure where to go now with that debt load. The good news is this is secure debt.

So there's properties attached to this that you could sell? They all have mortgages on them, yes. But unfortunately, all the evaluations are inflated. So the mortgages are actually worth more than the property. So you're underwater on each of these properties? Yes. Oh my gosh. How is that possible?

How did the mortgage companies let this happen? water on each of these properties? Yes. Oh my gosh. How is that possible? How did the mortgage companies let this happen? Private lenders. So was this some sketchy back-end deals that he used this money for something nefarious? I'm confused. Yeah, I'm not really too sure. It looks like there might have been a big master plan, but unfortunately he passed before he could fix it.

So I do believe there was a plan, but I'm not sure exactly what that was. But he had mortgages on properties to rebuild the home, to I believe sell his current home to clear all the debt, but he never made it there. Oh, goodness gracious. What happened to the, did he have any assets when he passed? He had his personal house. Unfortunately, that was, it did flood. And then I wasn't able because I have siblings. So legally I wasn't able to sell his personal house to pay off my personal debt, which wasn't my debt, but it was his debt. But legally it

wasn't in his name. Wow. So these mortgage companies are coming to you saying pay up or sell. Yeah, these are all private lenders that actually invested their RSP. So it doesn't actually show up on my credit at the moment, but they basically took collateral. Wow. Have you pulled your credit report to see if any other debts were taken out in your name or accounts? I have and nothing shows up.

Just these private lender mortgages, which I assume have terrible terms. Gotta be. Yeah, 30% interest. Oh, holy moly. Holy smokes. Okay. Oh gosh. Wow.

How upside down? That's the real question. How upside down are you on these? Are you at hundreds of thousands? Give us an example of one of the properties. What's it worth and what does that? Oh, for instance, one you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you,

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are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you,

are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, are you, two people on a show, but here's what I at least would do if I was in your shoes. I would let the mortgage lenders know in writing that number one, these loans were made without your consent and it was based on an abuse of the power of attorney authority and that you want to dispute the validity of the debt. And then you can ask for, give me copies

of the loan application, the signature pages, the notarized power of attorney that was used, I would make them give you everything they have. Yeah, I have all that. My signature was, it was signed on my behalf. And like I said before, they just used my power of attorney and said it was all legal.

And you've reported, have you reported this, like done a police report? I haven't done a police report yet, no. Well, was the power of attorney, and I'm not a lawyer here. So I'm just asking was the power of attorney that was granted in case you were unable to make financial decisions, right? Not in every case.

Yes. My stuff got stolen while I was in New Zealand. Exactly. It was kind of hard. Yeah, exactly. So I guess there was some clauses in there that maybe were put down that I didn't really fully understand. Like what?

Yeah. Well, it's just making there was actually the loan clause and other things like that. So I kind of. Here's the thing. And, and I, I hate this for you and I don't know. I'm just going based off of what you're saying. Unfortunately, it does sound like there was language in this that puts you on the hook for it.

And because of that, because it's a legal document, you might have trouble getting out of this. And I hate that for you. Let's pretend for the sake of the last few minutes of this call, let's pretend you can't get out of it. Let's pretend lawfully you're on the hook for it. Tell us about your financial situation and let's see if we can walk you through a way out of this. Yeah, okay, so I actually just finished,

I just went through flight school. So actually personally in the last two years took out a $90,000 student loan, which I just finished my training all last week. That loan I took out. Just, I wasn't making, I make maybe 40 K a year part time school. So yeah, I really, What do you make now that you've got your license? Yes. Oh, I haven't. I just graduated last week, so

I haven't actually got a job yet. Okay. When do you see, when do you see that happening and when that does happen, what will you be earning? I would say hopefully in the next few months and maybe up to 60 to 100 K. Okay. So we've got this, there's a possibility to make a hundred thousand dollars. So you've got the 90,000 of student loans. Have you totaled up all the debt? If you were to sell the properties, what would be the upside down amount for all these properties combined from your dad? Yeah, I would probably still owe about 250 to 300.

Oh my gosh. Okay, and your student loans is the only debt you have. No car loans, no credit cards, nothing like that. No, I have no credit card debt or cars. a blessing it's all been paid off okay and it's just you no kids significant other okay okay so man i hate this for you i i mean i just hate it but at the same time if you end up on the hook for this we want to make sure that you have a plan to get out of it and And it might do you own your own house? No, I actually just rent at the moment. I mean, my husband were actually hoping to buy last year, but we got kind of stuck in this.

Okay. And where's your mom? So I live about 5000 kilometers on the outside of the country and they're not together. My parents got it. Okay. So there's it's not like you can call her up and say, Hey, look, look, look what your husband did. Okay. Oh boy. Unfortunately, I hate to tell you, Amanda, you might have to walk the baby steps on this one and it's a clear path. It's worked for me. If it makes you feel any better. I paid off $460,000 of debt and it was terrible, but at least it was debt that I racked up. So for you, you're going to have a bitter taste in your mouth if you have to do this. But the good news is you can do it.

Ugh, I hope you can work with your attorney to work this out. Even if they foreclose on it and they waive your deficiency, that at least might get you out with all of this damage and years of cleaning the mess up. That's a best-case scenario. Worst case, it's going to be years of hard work. I'm so sorry you're going through this. Oh, wow, wow. case. It's going to be years of hard work. So sorry you're going through this. Wow. Welcome back to the show. 888-825-5225 is the number to call. Hey, are you staying on track with the Baby Steps? We created a quick quiz so you can check your progress and get a personalized

plan just for you. Simply head to the show notes, click on the link titled Are You On Track With The Baby Steps, and complete the quiz. Mike is up next in Philadelphia. What's going on, Mike? Hey guys, how are you today? Doing well. How can we help? So, pretty much I just kind of got hit with a baseball bat

the other day with my wife telling me we need to get a divorce. Oh my goodness. So sorry. We are, it's okay, I'm still processing it. How long are you guys married? We are 10 years. You got kids? Two kids, yeah.

So sorry. But to say the least we are in a significant mountain of debt and that includes our house and credit cards cars loans student loans And we just don't see that. I just don't see a light ahead of the tunnel Just trying to figure out you you know, with her wanting a divorce, what is the best scenario?

I mean, separate our finances, move forward, trying to pay off the debt and staying in the house until we can get some stuff taken care of. Yeah, I mean, right now, I probably probably now is the time to start separating things. If you haven't already, I'm guessing one of you is moving moving or has moved out of the house. No, not yet. No, right.

Right. Right now we're still in the house. I mean, I talked to a few people and people said, like, don't leave the house because I mean, that's at this point in time, that's our greatest asset. That's our greatest asset. We don't write There's some so much that we put into this house right now Uh-huh, and that's a pretty significant portion of the debt outside of our mortgage Oh personal loans how much So the HELOC is for 135, okay

Personal loan is 44. Okay. 44 okay, sorry 49 okay What about the cars? Cars Were at about I would say 120 whose is whose Like how much is yours? How much is hers? Mine 70 hers is about 40 so 110 And then how about the credit cards? How much of those?

How much in total? Individual or separate? Total for now. Total, or about 140. Okay, and then finally the student loans. Whose name are those in? Student loans. So most are hers, some are mine, I think I have about right now about 18 and then she

has close to 70 or 60 or 70. Okay. I didn't see the recent number yet. And the other debt is, did you guys kind of share this is your, are both of your names on all this stuff or both of your names on the mortgage, that kind of thing? Both of our names are, yeah, both of our names are on the mortgage. I think her just, I mean, she, her name is just on the car, my name is on the car, we do have individual credit

cards. Okay. But then there's some that are jointly together. And then, you know, this is your first marriage? It is. Yeah. Okay. So and were you both working or were you a primary breadwinner? Like, tell me more about how that happened. I mean, at this point in time, we're both working. So we total together, we make probably close to 350. OK, and that's probably the most frustrating part, because it's like when you hear that number.

Yeah, you think you'd be doing better. Better than what we are. Absolutely. I mean I'm not again I'm not an attorney here but just based off of what you're saying and what I hear likely it's just probably gonna get split down the middle in many in most ways. That you've been together a long time sounds like you were both working you were both contributing to the income, you were both contributing to the debt. So I would anticipate and I would fight for that sort of a split unless you know of a reason for it to be skewed in one direction or the other. Our biggest problem is, you know, just she told me that about a week and a half ago,

you know, we own our house, we're in our house right now that we have a mortgage on, but just we wanna keep the kids in the same school and rent mortgages any house at this point in this area, we're gonna be paying almost twice the amount. So you're saying for the person who moves out, that's gonna be their burden? Exactly, and it's gonna be, I think- I don't think either of you're gonna be able to keep this house though. Yeah, that's George be their burden. Exactly. And it's gonna be, I think- I don't think either of you are gonna be able to keep this house though.

Yeah, that's George's right. They're gonna have to refinance or one of you is gonna have to buy each other out. You don't have the money. With cash out refi, unless you have the money. And it sounds like you guys don't have any money. No, I mean, our accounts pretty much more times than not withdrawn.

Like, you know, I just did our monthly budget and we're at like 20,000 in, 20, thousand out a month. Is there any assets anywhere do you have any savings non-retirement anywhere? Not non-retirement no. Okay what is in your retirement I'm just curious. Probably about forty. Okay okay. What's left on the mortgage did I miss that? Four60. And what's the house worth? About 800. Okay. So that's the other problem too is that I think this probably contributes a part of the divorce but we are in the middle of a huge home renovation. Not anymore you're not. We can't even sell the house

as it is. I mean we have no kitchen right now. It's empty So you've spent 30 let's see you spent 35,000 pleasant. You've spent almost 200,000 and you're still not done with this Renault. I died I'm speechless as probably as much as you are because I don't understand how we've spent so much damn money in this because I don't understand how we've spent so much damn money in this foundation. Is there any hope for this marriage? Is there a chance that this can be resurrected? You guys go through some intensive marriage counseling and try to make this work? I suggested it. We tried and she was pretty much like, this isn't working. And it was all of a sudden out of the blue? Or was this a long time coming because based on the debt numbers

I'm like, yeah, I could see how this could not be a fun time. Mm-hmm well, I mean that's that's just the money problems alone part on top of all of this is Four years ago. We went through the randy baby steps. We were that free. Oh boy You accumulated this million dollars of debt in four years Moved into this 1800 year old house. Yep. So can I, can I, I'm going to step into a territory here. I don't, I don't know that I should,

but it's just what I sense. It almost sounds like there was already a lot going on in the marriage and this was kind of a way to start covering it up. Like let's, let's do a project. Let's move into this house. Let's do this. Let's do this. Let's do that.

And we find- Stay busy. Yeah, we find a lot of times that when hard things are happening, people spend money to cover it up and to cope. And it kind of feels like that's what was going on here because this didn't crop up out of the blue. You know, this sounds like it was a long way coming. There's definitely been some things happening, but it was never to the point

where I thought that we would be going down this road. I'm sorry this is happening. So on the income side of the 350, who makes what? I make about 200. OK, I'm a nurse. You know, there's always a lot of overtime available. And that's I mean, that's important time. I'm making that amount because I'm working

60, 70 hours a week. Yeah, so let's kind of pretend, let's go through and kind of total this up and go habsies on it. You said your student loans are the 18 or the 70. 18. Okay, so let's just pretend for a moment that this does get split in half and let's pretend

for it. I mean let's imagine worst case scenario George. Let's pretend she gets the house and she's allotted a certain amount of time before she has to buy you out because a lot of times they'll do that and let's pretend she's given several years before she has to buy you out. All right, so that kind of means hey you're out here on the street you got to get, you're the one who's going to be renting and you're also on the hook for half of this, this debt here. Let's talk about what that looks like for you. Is that fair? Yeah, that's fine. Okay. So you've got a great job. You've got overtime at your disposal. So if you're to move out, what we would tell you to do is try to find a place

that's no more than 25% of your take home. That's thing number one, so that you've actually got your margin to work through whatever debt snowball you're gonna have to work through, because chances are you're gonna be on the hook for half of this, right? Yeah, I would probably think so. Okay, so you're looking at, I don't know,

easily $225,000 you're gonna have to pay off. And that means that you're gonna have to live on less than you make, which is what we tell everybody. It means you're gonna have to increase your income as much as you can, great way that you can do that. And you're just listing these debts smallest to largest to pay them off when that time comes. I'm sorry.

Hang on the line, we're gonna send you a link to largest to pay them off when that time comes. I'm sorry. Hang on the line. We're gonna send you a link to our divorce checklist on how to prepare for divorce. So sorry going through this, Mike. Yeah. Our question of the day is brought to you by WhyRefi. If you've got defaulted private student loans and no one else will work with you, try WhyRefi.

They'll help you explore refinancing options with a low fixed rate and a payment plan based on your ability to pay. Go to yrefy.com slash ramsey to learn more. That's the letter Y R E F Y dot com slash ramsey may not be available in all states. Yep. Today's question comes from Rachel in Alaska. She says, how specific should a budget be? My husband and I have a budget category labeled household that anything we buy for the house ranging from ranging from dish soap to bed frames goes in that category. Should those be separated into different categories

such as groceries and house furnishings? So I, George, I have clear opinions on this and I'm not saying it's my way or the highway. It's just the way I think of it. But you know, when I teach budgeting, I say that budget should be three things detailed, realistic and flexible. And that first category detailed is really what we're talking about here.

And I, I'm a person who kind of likes to know exactly where every dollar is going. And I like to be able to look back and go, how much did we really spend on groceries? How much did we really spend on groceries? How much did we really spend specifically on going to restaurants? How much did I really spend specifically on furnishings for the house, right? And so with every dollar,

it does behoove you to separate these categories out if you're interested in that sort of thing. Now, on the flip side of that, if that causes some sort of contention or it makes it more frustrating for you. If you have 94 line items in the budget, it might get overwhelming. Yeah, that's right.

Especially for the spouse who's not the nerve. That's what I'm saying. So if it causes problems, like pull back a little bit, but to specifically answer your question about this household category, I'll tell you what I do. I have the whole heading of it is, I think lifestyle, I think is what it says on mine. And then underneath it, I have a groceries,

which is at the grocery store. Then I have a date night, which is specific. And then I have restaurants, which is not a date, just restaurants in general. And then underneath that, I do have household items. That's what you said, things like dish soap. And if I go to, you know, home goods or Target, something like that.

And then George, I have one that just says Amazon. That's diabolical. Yeah, I did that too. Because I was frustrated trying to parse things out and go, what is that? Well, part of it was for the home. Part of it was over here. So I just went, you know what? Amazon.

And then I can look at that and lament over it later. That's truth. Now my bigger question is, sorry, Jade, my squirrel brain went, how many bed frames are these people buying? Or this is a major issue. Six kids. Do I make a line item just for bed frames? Okay, you buy a bed frame once every few decades, I feel like.

So I would just create a sinking fund and go, you know, furniture or bed frame. If it's a one-time purchase, just put it in there in that month's budget. You can delete it from the next month's budget. But as far as dish soap and all that, you can't split it up into household essentials maybe for like paper towels and dish soap and all that stuff.

You could lump it into groceries if you're buying it all from the same store, if it makes it easier for you. But there is a line we have to go, this isn't really fitting in this category, let's split it out. And you'll notice those patterns as you keep budgeting. And I would say specifically, if it's a category that you do feel like you guys are having

a hard time sticking to. So for instance, yeah, food is one that people struggle with. It's the number one budget buster. Or maybe it's something like, I don't know, like kids or entertainment, something that's kind of an overarching target for a season. It could be a good idea to break it out so you can understand exactly where the problem is. If you break out right now, if you just have on your budget food and that covers anything you eat and you're like, man, why is this thing like messing with our budget? If you break it out, you'll realize, oh, specifically it's door dash and oh, specifically I noticed when I look at the transactions every Wednesday we stop because that's the day that the kids have taekwondo, right?

And then you start to see what your habits are. So not saying you have to do that forever, but it could be a way to identify where the trouble zones are. Yeah, and every dollar does let you parse things out. So if you had a hundred dollar grocery bill, but half of it was for household essentials, half was food, you can actually split that up in every dollar.

And so if you guys wanna learn more about that, we have free budgeting trainings ongoing this month that our team hosts. You'll learn step by step how to make and stick to a budget using EveryDollar. Plus you can get your biggest budgeting questions answered in a live Q&A. So spots are limited. Go sign up for free at everydollar.com slash webinar. Well done, George. Thank you. Thank you. Shannon is in Durham, North Carolina up next. How can we help Shannon? Thank you. Thank you. Shannon is in Durham, North Carolina. Up next, how can we help Shannon? Hey, I hope you're both well. I'm calling because I want to know if we are the exception to the baby steps order. The reason I'm asking is because we do not have a mortgage. We were super blessed to be gifted a home when a grandmother passed away. Wow. So zero mortgage, zero car loans.

We're driving beat up cars. We're living as college students, no lifestyle creeps, but we have a $65,000 HELOC and I've always just kind of viewed that as, you know, $450. We're only paying interest now, but a $450 home payment, you know, instead of a mortgage I'm kind of wondering if I can bump that more like step six because Well, they're dead. Yeah thousand dollar. Yeah a $1,000 emergency fund for a very old special home is Just killing us, you know $3,000. Well last year water heater braces breaks I feel like all these things are things

that we should be paying for and it just, it was painful. What's your household income? 90. Okay, well, I'll give you this. You can put it in Baby Step 6, but not for the reason you're wanting to. Generally, what we would say is if the HELOC is over half your annual income,

it can be tackled during baby step six. If it's less than half your income, put it in baby step two where it fits in the debt snowball. So that's the simplest answer. But what was the HELOC for? When we first moved into the home, we were actually on a renovation show. And- Wow, did they pay for the renovations?

We matched, we had to match it. So we actually took out 50 to match. And then we were surprised by our taxes the next year because it was considered a gift. So then we had to add on more to the HELOC to cover the taxes. So now the total is 65. When are you gonna be done?

When are you like, hey, I don't wanna take on another penny in debt? So we'd like to spend the next two years saving up six months of emergency fund just because our home is older. And that'll take about two years. And then- I'm starting to think this home

wasn't as much of a blessing as you let out on to be. It is, it is. How many 40 year olds have no mortgage? It was wonderful. It's just 125 years old. It's really special. It's a full-time job to keep up with this house

and renovate it. Yeah, but I feel like if we had a new home. And if you didn't have a mortgage, why'd you go into all this debt? Why weren't you guys able to cash flow all of these things? That was 10 years ago and just we're making different priority decisions. Well, it sounds like you're prioritizing the emergency fund over your debt payoff right now, right? How much debt do you have left outside of the HELOC? None. Oh, good.

Yeah. Okay, so the braces, the breaks, you cashflowed all of that? Yeah, we had to borrow last year from a family member, which also didn't feel good, but it was a lower interest rate, of course. Why are you borrowing? I have a big question.

I mean, I'm looking at you. Maybe I'm too dumb to answer this, I don't know. I'm looking at you, I'm like, this lady's got to pay it off. She's been gifted a house, they don't have any other debt. Why are you taking on debt? You have such a beautiful situation and here you are taking out HELOCs and borrowing from family members when you don't need to

with a fine income. It's because of that, yeah, the thousand dollars that we had in our emergency fund didn't cover those right, right, right. But it yes. But let me put this bug in your ear because I think this will help you going forward. So a you're right. A thousand dollars isn't enough to cover anything under the sun. It's not supposed to be.

But it is supposed to cause you to think critically about really what is an emergency and get a little bit more creative about how you solve that. And a lot of times that create creativity in your case, especially is kind of dip dipping into your cashflow in order to making it, to make it happen. Um, because like I said, your income is fine. And a lot of these things, they did not come out of the blue, like something like braces, you kind of know, like you're looking at, you know, Junior's teeth and thinking, okay, this can't be good. Right? So you kind of know. And there is, there's a timeframe on things

that sometimes they make, they make you feel like something's more urgent than it is. So I just want you to think about that before you borrow money again. Is this something that's completely necessary? Is it really something that I have to do right now? Like is it urgent and is it truly unexpected? Or did I know this was coming and I've just kind of been in denial thinking I'll just use debt when the time comes. So really filter it through that. I think it'll cause you to make better decisions going forward. I'd get the seal lock out of your life and don't put a penny more on it and no more excuses. You make 90 grand, your quote unquote mortgage is 450, you can cash flow everything in your life.

You got this. This is The Ramsey Show. ["The Ramsey Show"] Blake is up next in Lincoln, Nebraska. What's going on, Blake? Hey, thank you for taking my call. So I'm 24 years old. I'm a dental student here in Lincoln. So when I was 24 years old. I'm a dental student here in Lincoln.

So when I was eight days old, I had a heart transplant and I'm married. I'm gonna graduate in two years. But my question is to account for not being able to get life insurance, just because I've tried multiple different times. And because of that heart transplant, I can't get life insurance.

So what percentage of my income would you guys like recommend me setting aside just to be more prudent about the future and saving money for my family just in case something happens? How old are you today? I'm 24. 24 and are you healthy today? Yeah I was diagnosed with a just basically a little bit of heart disease last year but it's not like a death sentence but it will probably limit my life. So on the other hand, I just wanna be prepared for the future just in case that does limit my life, but so far I'm pretty healthy.

Are you married? Yep. And kids? Nope, not yet. Okay. What's your income? So I'm a dental student, so I don't make any money. My wife is a Spanish teacher here in Lincoln.

She makes around $36,000 a year after tax. Okay. Okay, so I'm thinking about what you're thinking about. Do you have any debt or are you guys, or do you have a clean slate? Tell me more about that. We have no debt. I'm gonna graduate dental school debt-free. Wow. I have folks that are paying for my dental school, so I'm very grateful

and fortunate to be in that situation at least. So I actually think that is one of the best things you could have done to set your family up for success is to avoid debt because now and George, you can come in and stop me, but now you've got your full income at your disposal at a very young age. And so in that way, I think that you've set yourself up because I mean, once you get three to six months saved, you're investing 15% and you're gonna do that for a while. And then depending on what you think your income will be, if you can, if I were in your shoes,

I'd wanna project out, okay, how quickly could I get to 10 to 12 times my, if I were in your shoes, I'd want to project out, okay, how quickly could I get to 10 to 12 times my income if I start investing? Like how long would that take by me doing 15%? And then I'd want to know how that jives with what my health is. And then if I feel like, okay, now I need something in addition to that, then yeah, I might be searching out

other options, but they're going to be expensive. And I almost would rather put that money into additional investing than in one of these policies that's like a no exam policy. Like a guaranteed issue life policy, which will only give you probably 25 or 50K max. Yeah. I'd rather put that in my own investment than, yeah, do some sort of simplified life or some sort of mortgage life insurance. I just don't see how it's gonna return for you. Yeah, I was just wondering too, if I should be like more aggressive with like my savings. And I didn't know what type of an account to like invest in.

Well, you will, yeah. And you will be naturally because, and I didn't do a good job explaining this. So because you're not in debt, you are in many ways, you've excelled through the baby steps faster, right? So you're not in debt, you're, you are in many ways, you've excelled through the baby steps faster, right? So you're going to be doing baby step four. At some point you guys are going to buy a house, but because you don't have any

debt, you'll be through that house lickety split. So that's thing one. And then once you get to baby step seven, you can invest whatever amount you want above the 15%. And so you're going to be doing that in your thirties when so you're gonna be doing that in your 30s When so many of us are doing that in our 50s because you're so ahead of the game. Does that make sense? Yeah, thank you. So you've got you've got time to build this George that that'd be my take on it What do you yeah, I mean the goal is for you to become self-insured And so that's just more important for you now because you can't even get life insurance So the faster you get through the baby steps, the better.

The faster you get a paid for home, the better. The faster you build up that nest egg, the better. So that if something were to happen to you, your future wife would be okay. Your kids would be okay. And so I would not be investing more than the 15%. I would keep following the baby steps, but I would have a little more intensity through them

than the average person because of your situation to get to baby step seven faster so that you can then stack up, max out retirement, use a taxable brokerage account and stack up even more money in there. And that kind of becomes your own life insurance plan in a sense. And so, yeah, so for even more clarity, I'll say this,

you know, when we talk about baby step six, paying off the house, a lot of times that's taking people, you know, 10, 12 years, that sort of thing. In your case, yeah, I would treat it like a baby step two. And I would kind of just, you know, clip my way through it. And that way, to George's point, you'll be set up to, to invest way more, way faster. Sure, thank you. Yeah, I'm hoping the best for you, man. I hope this is something you'll never actually need to use as you build it

and wishing you the best for your health and your future. But I love that you're thinking about this stuff of how to make sure that your family's protected. A lot of people don't think about it until it's too late. And so if y'all, if you're healthy and you can get life insurance, especially if you're young, get it today. Our friends at Xandr can help you out.

That's the company I have my term life policy through. And here's what you aim for, 10 to 12 times your annual income. And if you have a spouse, 10 to 12 times their annual income. If they're a stay at home spouse, they definitely need a policy. Yeah, like four to six times, like really make sure you're in there.

So aim for at least a half a million dollar policy and it's very affordable, especially if you're young and even if you're older, it's still gonna be a great buy comparatively to whole life insurance, which is a total ripoff. So stick to a level term policy, 10 to 12 times your annual income,

15 to 20 year term is the right choice for most people. So head to zander.com and get that taken care of. It doesn't take long to apply and knock it out. And what you said is really good to reinforce. The point is to get to the point of self-insured because a lot of people, they get weirded out by the fact that a term policy has an end term. What happens after 20 years, Jade?

Yeah. Then what? You're wealthy. I wasted all that money on a policy. You don't say that when you pay your homeowner's insurance and your house doesn't burn down. You're thankful. You're thankful. That you all that money on a policy. You don't say that when you pay your homeowners insurance and your house doesn't burn down. You're thank God. You're thankful.

That you didn't have to use it. So the point is not that you want to use it. The point is that it's there to protect you in case something happens. So you're transferring the risk to the insurance company because you can't handle that, right? Okay, here's a big question. So I know how I feel about this.

So we've said the point is to self-insure at some point you could let that policy go. I don't think I'll ever let mine go. I think I just would like having not. You're willing to keep renewing? Yeah. No matter the cost? I mean, it's a lot of money.

I think I just like it on there. Like as a cherry on top. It's JWI, Jade wants it. Jade wants it. What about you? What does Whitney say? I might, well, I'll be self-insured then. So that's my personal goal.

Is that the nest egg is enough. Well, of course you will be. Whitney, I think will be, she'll be fine. Cause she'll be happier when it's gone because she feels like maybe there's less of a chance of me dying if I don't have term life, I don't know. So it's like a jujube thing. She doesn't like to think about it whatsoever.

That's funny. But I don't want too much, you know what I mean? Cause then you're sleeping with one eye open. You're like, dang, he's worth more dead than alive. I don't like that. I don't like that feeling. So. That's interesting. But it's one of the things that comes I don't like that. I don't like that feeling. So. That's interesting.

But it's one of the things that comes out of my bank account. I pay it yearly to get the discount because it's me obviously. I know, I know. And when it comes out, I don't go, oh man, the payment came out. I go, thank God.

Thank goodness, yes. I'm covered for another year. My family's gonna be okay. It's just another way you tell your family you love them in the nerdiest way possible. That's right. And you do it today. And it's not expensive, especially if you're healthy.

That's why George said the younger you are, get it. And yes, you will be, your future self will thank you. And it really, I mean, it's a few hundred bucks a year. Yeah. Compared to a whole life, which we've taken these calls and they go, well, Jay, I've been paying $600 a month into this whole life policy. My cousin sold me, and it's got a cash value portion

that builds, and I'm going, never mix your insurance with investing never Ever ever if they're trying to sell you on how that it can do both. It does both poorly is what happens That's right. So term life for insurance Invest on your own through your retirement accounts and you'll be far far better off and Zander's the folks we trust and it's not Hard to get it like we were on it, so let's just keep talking about it. They have the no medical exam policies now. I believe under a million for a lot of policies

or a million or under, no medical exam needed. And if you do do a medical exam, it's easy. They come to your house, they take your blood. I lay on my couch, I'm comfortable. I think I did mine at work, it was great. Oh wow. Yeah, they'll come to the office. That's nice.

I wanna divert here for a minute. I'm on the clock. You're on the clock, you're like, I they'll come to the office. That's nice. But let's, I wanna divert here for a minute. I'm on the clock. You're on the clock, you're like, I get my insurance on the clock. I put money in my sleep. I think Dave can't get mad at that. I'm like, sorry, Dave, get my term life policy. What can you do? But here's another, you know, I say all the time,

you know, we walk the baby steps and a lot of people sacrifice and I say all the time, like, being on the baby steps is not an excuse to eat crap, right? And here's where it plays out because when it's time to do that medical, or it's time to get that insurance, you wanna make sure that you haven't been, you know,

stopping through the drive-thru and doing the ramen noodles, because you wanna get the cheapest policy possible, you wanna be as healthy as possible, so all of this stuff is intertwined, it all links together. I think I flexed my abs a little bit when they were taking blood, just to see if that helped it. I take a deep breath when they take your blood pressure. I'm like, I am calm.

I'm cool. I'm collected. I needed that A plus. I need that A plus rate. I need to save a couple of dollars here. I'm willing to get in shape if it means a discount. 100% I'm all for it. I'm on a couple of miles.

From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by bestselling author Jade Warshaw this hour. The number to call is 888-825-5225. Call us up and we'll do our best to help you out with your life and your money. Amy's going to kick us off in Fort Worth, Texas. Amy, welcome to The Ramsey Show.

Hi, thanks for taking my call. Sure, what's going on in your world? So my husband and I have been stuck in saving up a thousand dollar emergency fund for like three years. Like we save up the funds. It's a thousand days. And then we have an emergency and have to start over. That's a dollar a day if you could have just kept that away.

How much do you make? So we make, between the two of us right now, we make about $100,000 a year. But we also have an average of eight trips to the emergency room a year. Oh, okay. That makes more sense. Is it you or the kids? Is this chronic health issues? So I have chronic health issues.

My husband has chronic health issues. We have our oldest son has a diagnosed disability and our youngest son has developmental delays. Got it. So y'all should just like live at the hospital at this point, just rent a room. Yes. Oh my goodness, I'm so sorry.

And a parking spot. So you're hitting- You should get a sign made just for you guys. I think that's nice of them, reserve spot for Amy. So you're hitting your out of pocket max every year? For the last three years, is that basically what's happening? Yes.

So this year for my baby, we hit the out ofocket on January 15th. How much is that? 1300. Okay. And what's the family out-of-pocket max for the entire family? 37. Okay.

So that's the magic number right there. So the way I would look at this is I've got to have that. You know, when you have chronic illness like this, you have to be prepared for it. And if you have access to a high yield savings account, that's a great place to keep that money. If you don't, I'm just keeping it in a high yield savings account for when I need it.

This is not your emergency fund. This is health expenses in the budget. Mm-hmm. Because the emergency room for you guys is no longer an emergency. It's just a budget line item that's gonna happen a few times this month. So the best you can do to get ahead of it,

prepare for it, create a sinking fund where you just go, all right, we're gonna put 500 bucks a month away in this account so that we just constantly have at least 500 bucks a month to spend on this stuff. And do you guys have good health insurance? Is it through one of your employers? I do.

Yeah. Okay. And my company pays 80% of the premium for us. That's amazing. So that tells me there's more going on here because you're hitting the out of pocket max. It's not just the medical stuff that stopped you guys. What else has been going on in your life?

Has there been spending are we coping? accidents we've had home emergencies we had a slab leak on our house that displaced us for six weeks last year and the insurance the way the policy was written written, is they covered all of the refurbishing repairs from the water damage, but they wouldn't actually cover the plumbing repair. Let's see what else. What'd that cost you?

That was five grand that we ended up having to borrow because our emergency fund was only $1,000, so we paid $1,000 and, you know. But you guys are making, are you guys making six, seven grand a month? What's the take-home pay here? That's 7,500. Okay. Are you investing?

No. No, okay, good. So, go ahead, George. I'm just wondering, I just feel like there's some other money leaks happening here, because 7,500 a month take home is a great income. So where else is that disappearing to other than emergencies? Do you guys have a big mortgage?

Are there a lot of debt payments? We have, so our mortgage is, our mortgage currently is one third of our income. It didn't start out that way, but then we had some property tax nafus that we didn't understand. We also have- That's a piece of the problem. Two car payments.

Say it one more time. I said, yeah, that is a piece of the problem. Yeah, we also have two car payments. We're paying off some student loans and we got sucked into the solar scam, but I kind of want to say scam. So that's where, yeah. How much do those three, the the cars the student loans and the solar cost you every month in payments? 2900 there you go mama

Okay, I see I see it. I see the clear picture here plus the is it a $2,500 mortgage $2,800 mortgage there we go,800 mortgage. There we go. Plus feeding people and keeping the lights on, plus the emergencies, it just disappears every month. Yeah, and I have one in diapers and one that's working on being potty trained, but because of the disability that's taking forever. And then, you know, we've got formula cost and yeah.

Okay, so are you staying at home with them? Are you staying home? I work from home. You work from home. And yes I work from home and take care of our well so I take care of our one year old. Our three year old is in ADA therapy which my insurance covers most of but we are still paying about seventy five dollars a day for it. Okay. And what does your husband do for a living? What's his work? So he has an A2 act estimator. Can he do overtime? No, he's a salary exempt. Like overtime does nothing. So here, I'm going to tell you this and I'm going to say it with a sigh because

it's going to make you tired. The only, the only way to get out of this cycle is to do something that is going to infuse your monthly income in a major way. Do you see what I'm saying? You need that jolt of B12 into your income so that you can kind of leap over a few of these hurdles quickly so that when they pop up, it's not this thing that's taking you one step forward,

two steps back. So the thing that's taking you one step forward two steps back so The thing that I think is your husband because you're at home with the babies Even though you're working at home if you can pick up extra hours more power to you But if he can if he can say hey for a while on the weekends I'm going hard in the paint and you guys get together and say what is that goal? What do we need extra is it is it? $1,500 a month is it a thousand dollars a month and you guys just lock lock eyes and lock together and say, what is that goal? What do we need extra? Is it $1,500 a month? Is it $1,000 a month?

And you guys just lock eyes and lock arms and say, for 12 months, we are kicking it into high gear and we are going to be ships passing in the night, but we've got to get this 3,700 in the bank and we've got to make sure that we still have margin left to pay down some of these debts. Tell us about the cars because there might be something there that we can help you get that infusion. Oh well the cars are kind of a messy situation right now because

so we had two car payments and then my husband got into a car accident and his car got totaled but there were multiple cars involved and multiple insurance companies involved. And so they're working on basically trying to figure out who can, how they can get away without paying for anything. So we are actually effectively right now paying for three cars. Did you, your insurance didn't cover it? It was his fault?

So it was not his fault. So we were hoping that maybe the other insurance companies would, you know, take responsibility, but they have not. So we just started the process of getting our insurance to cover the cost of it. What are the cars worth that you do have? Once we have our worth 20, somewhere between 20 and 22 grand. Okay. And what do you owe on them?

That, cause we just got them. Cause we had to replace the one that got totaled. So you didn't have to get a $22,000 car. Yeah. And you're going to have some insurance money coming back from this. And you need to use that to go towards the debt since you've already replaced a $20,000 car. And I were you I'd try to get out of it and get something cheaper while you still can.

Hang on the line I feel for you Amy we're gonna send you every dollar premium to help you guys budget every single dollar coming in and hopefully we can get you through this plan. If you're enjoying the show or if you ever have, please subscribe, leave a review, share it with a friend. You guys are the best marketing tool we have and we appreciate all of you spreading the word, telling your family, your friends, and hey, if you want to get better with your money, you want a better life, check out this show.

It means the world. Thank you guys for doing that. Ashley is up next in Atlanta, Georgia. How can we help, Ashley? Hey, me and my husband are arguing a little bit. Ashley is up next in Atlanta, Georgia. How can we help Ashley? Hey, me and my husband are arguing a little bit. We are looking at purchasing a second home slash investment property at the beach. And we have a paid off, our primary residence is paid off. We don't have intentions of moving.

We have another investment property locally that is running and cash flowing, we both have good jobs, make good money. And my husband's viewpoint is we need 100% of the proceeds to buy the second home. And my view is we could just put 20% down. So we wanted a third opinion to weigh in on our discussion. Wow. Usually the person calling in is right, but this might be a rare moment where I'm agreeing with husband. A hundred percent. Yeah. Cause you're, well, you're saying, Hey, I want to go into debt for a toy essentially. This beach house is for you guys as a vacation property. Yeah, that would be rented as well.

Okay, but either way, the investment property you have, that has a mortgage on it as well? No, no, no. We're 100% debt free. So both properties are debt free? No debt, correct. Yeah, we have no debt at all. What's the beach house going to cost? Probably about a million. Okay, and how much do you guys have saved right now that you could use toward this?

We have about a hundred. And what's your household income? Our household income is about 350 to 375. Amazing. And how much of that could you save each year if you were like, hey, we're gonna do this cash. Here's how much we can set aside. Right now we're saving eight to seven or eight thousand a month. Okay, so let's say a hundred grand a year.

And we're maxing out our retirement account. So that is after that's just cash. Good. After taxes after everything. account so that is after that's just cash good after taxes after everything so at this rate it would take you nine years of just straight saving to get there now if you invested the money let's say hey in five years we're going to do this we're going to invest the money into the market let it grow for us you could probably do it in six or seven okay and how old are you two um i'm 30 he's 32. Oh, you guys are doing amazing.

Wow. Congrats. I thought you were like, well, we're near retirement. You work your butts off. And what I don't want you to do is take out an $800, $900,000 mortgage for a toy that maybe cash flows, maybe is a headache, maybe you get to use it, I don't know, but it's still a toy at the end of the day.

It's a luxury entertainment piece. And if you called in, Dave Ramsey was sitting in the seat, he'd be maybe less kind, I don't know, but he would say you gotta pay cash for it. What do you care more about having, the rental or the beach house? Like long term? You tell me.

I'm just trying to decide. I'm trying to decide if you really wanted this beach house, maybe it's worth you getting out of the rental in order to get it faster and then spending the time spending that seven years to save up for another rental. You know what I'm saying? Maybe you flip flop them in order of priority. Yeah, that's a decent thought. I just, I like having the one because it does, it cash flows very well. Yeah, but's a decent thought. I just I like having the one because it does it cash flows very well Yeah, but you guys also did you include that in your income? No, that's what I'm saying. You have a great income. It's not like your lifestyle is dependent on it

but if you're saying hey man I really see us using the speech house and living there and Enjoying it whereas the rental somebody else is living in it and enjoying it Maybe it is a situation where you get out of one in order to get the other. I Don't know. Yeah, it's just a thought. I'm not saying that that's the right move. It's just something to think about Mm-hmm. Yeah, no that would the the other Rental is probably 250 Would sell for about 250 pretty easily. What's your net worth as a couple?

about 1.3. Okay. Yeah, this beach house is a great dream, but it's a lot of your world to buy a million dollar beach house, that's about your entire net worth. Yeah, it is, it is. So I think we've done a great job. I think we're getting a little bit ahead of ourselves.

And I think you're going gonna get there faster than you think if you guys decide to take debt off the table and cashflow this whole thing. And also, you can still have a sweet beach rental that you just rent for a week or two whenever you wanna go. You could. You guys have the disposable income to do that.

Why not do that to scratch the itch until you can do it the right way? Listen, I'm really thinking about this now. Ashley, I think if I woke up tomorrow and I were in your shoes and I was talking to Sam and we were pulling up Zillow and looking at beach houses, I'd be like, okay, if we sold our rental and let's say we pocketed 200,000 from that rental,

we throw that in a brokerage, how quickly is that gonna multiply in order for us to do the million dollar beach house that we'll get benefit from, you know, and a lot faster of a timeframe than you guys starting from scratch, throwing money into a brokerage. That's that I think I veer more towards that. And then once we're we've got the debt free house, then we buy the beach house debt free. Now, if we want another rental that is just for somebody else to live in, we can save up and pay cash. That's like the 10 year horizon thing

that you can be a little bit more patient on. But yeah, George, how quickly could you do it? I just crushed the numbers, Ashley. Here's the proof. So you said how old, you're 30? 30, yes. Okay, so at 35, if you, let's say you take your 100, you do what Jade said, you sell the rental,

take the 200 proceeds from that, add it together in an investment account. That's 300, you tracking? Then you add eight grand a month to that at a 10% rate of return on average over those four years, you would have 1.1 million five years from now in that one account. In five years?

Five years. Okay, well let's. So this is not like a, well when I'm 60, we'll have this dream. I'm saying you could do this faster. You guys have an incredible income. You don't need the rental income. Whatever you guys are doing full time,

that's what's working for you. The rental is just gravy on top. And so I like that idea. If you're real gung ho about this and you wanna speed it up, you can sell the rental. And even if you didn't, it's probably only a few years beyond that to get one or two years to do it

without selling the rental. Or should we say my husband also threw out the idea of buying another rental in town that cash flows, but. I don't think you're gonna pull enough profit to do it faster than what George just suggested. And you need to pay cash for that, which would take up a lot of your capital. Right.

So I think to simplify, I don't know that you which would take up a lot of your capital. Right. So I think to simplify, I don't know that you're trying to be real estate moguls. I might just go, or I'm gonna park this in an S&P 500 index fund and let it ride for five years and just keep adding to it. That's personally what I would do if this was our goal, is to have a beach, paid for beach house. Can I ask where it is?

Near 30A. I was hoping you were gonna say that. Beautiful area. Great, can I ask where it is? Near 30A. Ah, I was hoping you were going to say that. Beautiful area. Great. Can I ask what part? Is it like Santa Rosa? Laguna Beach. It's on the end of Panama City. Great. Before you get to Santa Rosa. Nice.

I love the dream. But guess what? You guys could spend two weeks there and drop five grand and have a great time. Yeah. So actually, my husband said that before. But guess what? You guys could spend two weeks there and drop five grand and have a great time. Yep, actually Madison said that before. It's like great minds think alike. I love your husband, by the way. I think he's thinking through this

and you guys are thinking through this the right way. I can tell your excitement has gotten ahead of the reality of your finances. But the good news is this is not a pipe dream. This is not a 20 years from now maybe, this is, it's going to happen with some intentionality if you guys just buckle down and make a plan. And it sounds like you've already done that.

Okay. Sorry we didn't give you the answer you want. Were you hoping actually we were just gonna be like, go ahead, put 20% down. Your husband's being a fuddy duddy. Yeah, kinda. But yeah, he is the Dave Ramsey lover. And you're not?

So he told you to call in. There's no way. He was like, no, you call them, let them be the bad guy instead of me. Is that what happened? No, he said I wouldn't do it. And I was like, I think we can do it. Let's get Dave's opinion.

There's a lot of things you can do. There's not much you should do. And so you can go in, you guys will be okay at the end of the day. This is not gonna tank your financial world if you did it, but it's gonna give you a lot more peace, less regret to do it slower in cash. And you're not worried about trying to cover the spread.

And what if you don't wanna rent her? What if you realize, you know what? I don't want people messing with my stuff. I could not do that. Personally, I'm too OCD to have people going through my stuff, sitting on my couch, sleeping on my bed. Their feet in my shower? Exactly. Not happening. It ain't happening, George. I don't want to have to be vetting people's feet before they stay in my place. You find somebody else's hair on your on your you know burn it down burn it down not happening Welcome back to the Ramsey show it's that time of the show where we get to celebrate

Someone's debt-free journey in this special someone today is Jenna. How's it going? Good? How are you? Good? Where you from? I'm from Sioux Falls, South Dakota. Awesome, thanks for coming all the way to do your debt-free scream. How much did you pay off? I paid off $30,000 in seven months. Yay! Let's go. And what was the range of income during that time? It was $48,000 to $58,000. Awesome. Way to go, Jenna. What do you do for a living? I work on a dairy as a herdsman there. That is rock and roll. A herdsman? Is that the official title?

Yep, so I take care of cows and making sure they're healthy and everything. Do you ride horses? I have, but I don't have any. Good, good. That's how we like it. It's not herdswoman. That's not a... Yeah, a herdswoman.

A herdswoman. I just wanted to make sure. I didn't know. I'm not privy to the lingo in that world. That's a boss job. That's cool. I love it. Okay. What was the 30k in debt? It was my house. Hey

This is crazy Okay, can I ask how old you are? Cuz you seem very young to have accomplished all of this. I am 21 Wait a second Wait a minute Jenna. You can't just speed past that like you didn't just say what you just said You're just old enough to drink and you already paid off your house Yeah, my goal is to pay it off before I turn 21 and then I did that so Congratulations, what's the house worth? I bought it for 110,000. So then I had over 100 in the bank myself So then I had a 30k mortgage. Holy smokes and then yeah, have you been working since you were like seven?

How did you accomplish all of this? I've worked a lot in high school I've worked a lot of jobs that you know don't necessarily want to work, but she's a herdswoman. You're not scared to work Yeah, if you're out there Whoo, and Sioux Falls Wow milk and cows. I don't know what else they do to cows branding them Do you do that too? No, okay? That's good. That part would scare me. Oh my goodness So tell us a story seven months ago You had a thirty thousand dollar mortgage which tells me you put down a whole lot on this home when you bought it

Yeah, you had 80k in the bank and you went alright. I'm gonna buy this house a very reasonable house Yep, so I live in a really small town. That's rules So then like only 600 people in the town So then that's how the price was low because it's an older home But in good condition and then yeah get into the housing market when you can and that's what I did Wow on your own you did all this that's incredible. Okay, so seven months ago What clicked what got you on this sort of Ramsey plan of like I'm gonna get rid of this mortgage Well, I grew up on a dairy farm and then when I was 15, my parents went bankrupt. So we lost everything

We lost our farm the the land, everything. And yeah, ever since then, I knew I'm not gonna go through that and I'm gonna set myself up better than what I had to go through and I won't put myself or my future family through that again. Did that partially cause you to grow up fast? Oh, for sure.

Going through that as a kid? For sure, yep. Wow. Yep. I'm astounded. I truly am. You know, you said you're in a small town, but you're 21. You're not making small money. I mean, almost $60,000 a year.

Yep, I work a lot. I mean, in the egg industry, you don't get paid overtime, but that's just how it goes. So you just work a lot. Who's making all these egg profits then? That's what I want to know. My dairy farmers. That makes me feel better at least when I go to pay for eggs. You said ag or egg egg Oh, wow

You got it. You got to ask in this world. I know I just wanted to make sure okay. This is crazy So who was who was rooting for you? I'm sure your parents were on the sideline just baffled at what you've accomplished Yeah, so I had a lot of my family and my friends were super supportive I think some people thought I was really weird mm-hmm at what you've accomplished. Yep, so I had a lot of my family and my friends were super supportive. I think some people thought I was really weird. But no, I don't, I've had the same car since I was 15, so I don't really upgrade much,

and I'm pretty at cheap stakes, so. Wow, well I mean, most people's cars are worth more than your mortgage was. Oh, for sure. That's impressive. Yeah. And you still paid it off at an astounding rate. I mean, you were putting over four grand a month on average toward this, making 48 to 58.

How did you do that? Did you sell anything? Or was this all like you were living off of $700 a month and throwing the rest at the mortgage? Well, for the first five months, I had a renter in there. A flood hit our area, like right after I bought it. So then like a ton of people lost their homes. And then I had a family of immigrants

that needed a place to stay. So they lived there for like five months. So yeah, I charged some cheap rent so they covered my electric and utility cost and so I could throw everything at it You are incredible. Thank you astounding Be bragging in the streets, she's like, yeah, she's like, yeah, I have some immigrants I'm sure like this is amazing I held the door open for someone and I'm still like I did a good deed today. Wow, you're some immigrants. I make sure, like this is amazing. I held the door open for someone and I'm still like, I did a good deed today. Wow. You're incredible, Jenna.

This is amazing. What was the hardest part of this journey for you? Probably just staying on track and not getting sidetracked by everyone else. Like seeing, you know, other people get new cars, you know, fancy clothes, fancy jobs, but they work only 40 hours a week or I work 50 to 60 hours a week,

just like that kind of stuff and just staying on the track. But the budget really helped, every dollar, extremely helpful, so. You are the real deal, you know. I don't have anything to say other than she's the real, I feel like you've put a lot of people, you're putting a lot of people to shame in a good way right now.

Anybody who had excuses, it's like, look at Jenna. I have no excuses. Are you gonna loosen up now? Are you gonna finally upgrade some things, upgrade the car, enjoy life more, or are you still gonna keep at it? I'm trying to, it's pretty hard for me to loosen up, but I'm trying, but that's the next goal. I need people in my life to force me to loosen up,

like Jade and Ken. I try, I try with George. They're always trying to get my wallet a little looser. I'm hanging on tight. I got skinny jeans for that reason. Harder for money to fall out. So what's the next thing you're gonna do now that you're in baby step seven with a paid for house at 21?

Well, I wanna upgrade the car eventually and then I just wanna do some upgrades to the house, new carpet and flooring, just stuff like that. Just little things and then I wanna be able to give generously, so. I love it. Yeah, and you will. Can you paint us the picture of this,

your dream car that you're thinking of? Oh, I don't really have a dream car. I'm not much of a car person. There we go. I understand that. Do you need like a truck for the farm, or like, are you gonna get a modest sedan? What are we thinking?

Just probably like a small SUV or something. I have a niece and nephew I like to take around, so just a little bigger of the car than I do have for their car seats and stuff. What a good SUV or something. I have a niece and nephew I like to take around. So just a little bigger of the car than I do have for their car seats. That's all. Wow. She's car shopping with her niece and nephew in mind. All I can say is the gentleman that comes calling

later on trying to be Mr. Jenna, he better come correct. Cause you are not playing around. That's all I'm saying. It's hard out there. Yeah, I mean a town of 600 people, can you throw yourself a parade in the town? How does this work?

Not really. Do everyone know you in the area? Yeah, basically everyone knows everyone. Everyone send everyone's business, but. So they know you're on this journey. No, I don't like to broadcast that, but. Well, you just did. So modest. I know, I just want other people to see that they can do it.

I will personally get in touch with all 599 other people who live in your town and make them watch this video to celebrate, you are worth celebrating. Thank you. Thank you for joining us. We do have a parting gift for you. Two every dollar premium subscriptions good for a year. You can use those, you can pass them on

to maybe some of the people who said you were weird. Cause they're gonna be asking you for advice now. You're now a financial coach for the entire area. The entire county is now gonna be like, what is she doing? Because we gotta step up our game. Are there a lot of, I'm guessing the more rural you get, the less likely they are to go into debt

to impress people. It's kind of the opposite. I live in a very ag community where it's very expensive to buy land, very expensive to farm, very expensive to do anything basically. Oh, so they're all in crippling debt. Probably, yeah. But not necessarily to impress, it's just like, hey expensive to do anything. Oh, so they're all in crippling debt. Probably, yeah. But not necessarily to impress, it's just like,

hey, you want the farm equipment, we're gonna have to go into debt for it, and we gotta have a nice truck to do it, we're gonna have to go into debt for that. And you somehow have avoided all of that. I have, I just hate debt, I hate the stress, I hate the feeling it brings to your life, and yeah, you just have one wrong year

and everything can be gone, so. Yeah, well that money trauma growing up shaped you. Oh, for sure. To see your parents go through that bankruptcy. For sure. And now you're using it for good to change your own family tree because you're gonna put yourself in such a place

where bankruptcy is never gonna be on the table. That's the plan. Because you don't owe anyone anything. Yep. That's beautiful. Do you have dreams or aspirations of kind of like owning your own piece of land and farm one day?

I do, yep, I do. Instead of working for someone else? For sure, I definitely wanna buy my own place. That's a lot bigger and out of the town, but yeah. I think you'll get there. One day. By the time you're 23, you have accomplished that. You're like, all right, I'm here. What now?

We are so proud of you. Thank you. All right, let's get to the fun part. We've got Jenna from Sioux Falls, South Dakota $30,000 paid off. That's her mortgage did it in seven months making 48 to 58 K As a as a herdsman or herdswoman herdswoman herds lady count it down Jenna. Let's hear that debt-free scream three two one 2, 1, I'm Dad Free! Yeah, you are!

I think the cow is heard that way. That was pretty good. That was pretty good. She's impressive. Do you remember us at 21? We were knuckleheads. I'm still a knucklehead, but... I'm a knucklehead, I just mood on the radio.

I'm scared to see her at 41. She might own the entire town. She's made different. She's built different. That's all I can say. God bless. What an inspiration. It's possible.

You got to make some sacrifices. You got to have some skin in the game. But you can do this stuff. You can become debt free and join us on the stage. We will celebrate you all day long until the cows come home. We will celebrate you all day long until the cows come home. When you're tackling debt or building wealth, you can often forget about one important step to reaching those goals, which is insurance. Having the right coverage, whether not enough, too much, can impact how long it takes to

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Alien abduction insurance? That's a real one. You see the one where the atheists will, to the Christians, will say, hey, we'll take care of your dogs if the rapture happens. If you pay us a fee. Okay, George, aliens, yes or no? Real quick. Not the way we think of them. Are there living organisms? That's plausible. Okay. But I'm out on the alien, like the green, you know?

Yeah, I got you. Are they smarter than us? I don't know. Who's to say? Who's to say? What if it's like a raccoon? You know what I mean? Like they're not that intelligent. I'm done.

That's all I have to say about that. All right. Wesley is in Edmonton, Alberto. What's going on? Wesley, how can we help today? Hey, how are you guys doing today? Doing great. so my wife and I are starting to get into a business that I used to do for a bunch of years and I took time off and landscaping and

What I had known to work for me at that time is, was small scale, but she's looking to upscale it and get to a bigger place. And I respect that, but we seem to be having some key differences in how we're approaching that. And I just want to get on the same page with my wife on how we can work this together with her professionalism in this, and then my previous experience and what we've done. What does she want to do versus what you want to do? What are the differences?

So with what I do, how I was doing it before was a lot of in-person door knocking, very grindy. She wants to take it into obviously 2025 where there's a lot more pre-booking of these services, a lot more online, that sort of thing. Which is, it just in my experience hasn't worked as well. Well is it because that wasn't your level of expertise or is it because you tried working with an expert that could help you with your website and your SEO and it still didn't work?

I believe it was more with the former. So I was never skilled at that. I'm much more people oriented in person and she seems to have a lot more of a grasp in the online things. Could you do a combo of both? That's what I want to do. I just find that she discredits a lot of what I've done into where we are.

And I just want to be able to approach that conversation amicably. I understand. I'll be honest. It sounds like there's a little something else underneath this, not just a business thing. I'm not going to get too much into that. But I do think that it's probably a combo of both, especially starting out, because the truth is it does take money to get some of those other things off the ground. Do you guys have cash to invest in this?

No. Well, this is that's the thing is when I've been doing this is it's not about a major, this is working towards getting an investment into owning our own equipment. We do a bit of rental, uh, working at that way as opposed to dropping the thousands of dollars that are needed to have the machines ourselves. So right now are you do, are you going out there making money in the landscape business right now, or this is just you guys talking about revamping this thing? I I'm out there.

Usually I work a full-time job 10 to 12 hours a day. And then when I'm done my day, I go out and pursue the people who I've had leads from doing jobs. So both of you are working full-time in other jobs right now. She is not. Okay, is she at home with kids or what's she doing? No, no kids. Uh,

we have, we don't have children. She is, uh, just, she was working. She is in hasn't for about the last, I'd say six to eight months. And what did she do before? Was she in marketing retail? Okay. So, okay. Here's what I'm seeing. I'm seeing a couple dynamics here. One is you've done this before, and I don't know to what tune, I don't know how successful you were or you were not, but you have some experience here and you're relying heavily on that.

She also is probably like, I gotta turn this into something because I'm not working right now. So her motivation is probably like, we gotta go fast, we gotta do this thing. Let's take it to the website. Let's take it, do the SEO stuff. And so you're both kind of in your own worlds of what you think needs to happen. I mean, if you called in here, I'm going to tell you, it's probably a combination of both. I wouldn't go into

debt to do any of this. And it doesn't sound like you are. And from that perspective, I just ask her, I'd say, Hey, what stops us? Tell me in your mind, what stops us from doing both? Are you because one of them requires me door knocking and you know, hitting the pavement and one of them doesn't one of them is really an online play that doesn't require my time. So why can't I then still continue to put my extra time into, you know, enriching that by knocking on doors and talking to people face to face? What would she say to that? It's not a negative. I'm sure. No, no, I'm sure that would be probably be a lot better than how I've approached.

I'm going to do it like this and you can't stop me. Is that what you're doing? Well, it's well, it's just, I agree with what she says, but I also say like, this is where my experience lies. So if we can utilize mine and what I'm doing and get to that point where we're using both, it's, that's where my mindset has been. I think there's a great compromise. I think both paths have validity to them,

but I think we need to hear each other instead of just trying to get our point across the line and win the argument. I think both of you are probably guilty of this, right? She's gone, well, you don't understand. You don't know how the internet works. And you're going, well, I've done this stuff for years and you don't understand.

So that's not going to get us anywhere. I think it's wise for you to go first with humility and say, hey, I feel like I've really screwed the pooch on this one. Can we just reset? Can we create a vision for what this business is going to be together where you have as much input as I do? I think she would be like, oh my gosh, who is this guy? No, that sounds like definitely what I've wanted to say, just not wanting to approach that better. I'm just, I appreciate the knowledge you have.

Yeah, well it sounds like she's also on her own journey to finding some purpose. I mean, she wants something to sink her teeth into and every time she does, you're kind of swatting her away going, hey, this is my territory. I know how to do this. And so I think you need to let her, because you also don't have a lot of time.

I mean, I don't know how you're working 10 to 12 hours and doing this on top of that. With a lot of grit. And I think she doesn't want to see you burn out either, taking it all on your shoulders. Is there a vision to grow this thing? It sounds like she wants to scale it and you're like, well, no, I know how to do it right.

I don't want to delegate. I don't want to hire a team. Is this all on you? No, I definitely want to scale. I just want to do it properly. I know when I had done it before is when you work with people, you have to really trust who you're working with and then earn through with them. And that's definitely what I would like to do.

I know she has a larger vision in mind than what I've had. When you did it before, what were you earning off of it? I was doing anywhere between, again, just on my own time, between 100 to 150 a year. Yeah, I think that's great. I mean, that is a real you were making a real income on that. So I understand why you're kind of leaning on that. And I think you're right there. Again, it is a combination of what both of you are saying. And I think and George kind of touched on this. You guys want to accomplish the same thing. You have slightly different ways of going about it. And I think the important thing to remember is that you're on the same team, you have slightly different ways of going about it, and I think the important thing

to remember is that you're on the same team, and you're trying to do the same things. And I mean, I know, George, you're married, I'm married. Sometimes you forget that, and it's more about being right than about going, oh, we both want the same thing. I'm gonna agree with some of what you're saying, and you agree with some of what I'm saying, and we'll be good.

And you know exactly how to push each other's buttons buttons and you're tempted to push them all the time. Yeah. So I think we let's define the vision. Let's define the roles. Let's get on a whiteboard for a weekend and pretend like this is a real business and go, how are we going to dream this thing up? And maybe you go, I'm founder and CEO. You are the COO and CMO. So if it's marketing, that's her job. Yeah, you don't get involved. And I think making clear lines of who owns what is going to really help. And I want to send you Dave Ramsey's new book, Build a Business You Love. I think it's going to help you guys map that vision out and help you grow this thing to the place you want it to go. So hang on the line. We'll send that all the way across the border if we can make it through customs. We'll see. Customs. We'll see. From the Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Ramsey personality Jade Warshaw this hour. The number to call is

triple eight eight two five five two two five. Lydia is joining us up first in Portland, Oregon. What's going on, Lydia? Hi, I'm here to ask a question about my medical debt, which is 25,000 from three years ago. And I was just wondering if it's smarter to try to pay it off or wait the seven years because I'm planning to buy a house in the next couple of years. When you say wait the seven years, what does that mean? Until they like take it out from my credit, from my credit report because I can't seem to grow my credit with that on there. But you haven't paid it yet though, right?

Yes. I just paid the 3000, which was supposed to help me but it keeps going down my credit score. So I just stopped paying it. So okay, so you owe 25,000. Did you make any sort of settlement with it? No, I didn't. Okay. So that'd be my first move on George is I'd call him up. I'd say, hey, it's been three years. I don't have a lot of money, but I have, and maybe come up with a third or a quarter of it. If you even had, let's say $5,000,

I think they would settle. Yeah. And call it paid in full. That's better than waiting seven years doesn't actually cancel your debt. It may fall off your credit report, but you still owe that money. They can still come after you.

They could sue you for it. And so it's not just disappearing. And I don't even think it would fall off if it's still open. Like if you still owe it, it'd be one thing if you had all these delinquent payments, like that history would fall off if you paid it. But if it's still open, I don't even think that it would. I was hoping maybe because I just applied for asylum that time and I didn't know anything about this country's laws and stuff. I was hoping to have like a lawyer and then maybe settle with something maybe if they can like... How much money do you make? I make around $5,000 a month.

Okay. And are you single? Yes. Do you have any other debt? No debt, but I go to school out of pocket and then I also rent my apartment. Okay. So could you save up $5,000 and try to settle this medical debt in the next few months? I could.

How much money do you have in savings today? 5,000, but it's for school for the next semester. Oh, to cover your next semester's bills. Yeah. When are you done with school? I'm just going, I'm starting nursing school the coming semester. So you haven't started yet. You're about to start Yeah, two more years. Okay. Um

Yeah, I I wouldn't let this go on Any longer the good news is it sounds like you're single right? You know kids nothing like that No, so the good news is you're at a prime time to do some crazy work to get this done. For you, it's no big deal. I mean, if you spend a couple of weeks and you work weekends, you work 40 hours, plus you go to school, it's gonna be insanity.

But for you, you knock that out, no one else is gonna suffer but you. And at the end of it, you get this $5,000 and this is out of your life forever. Okay. And is it, you said it's in collections. Have you been in contact with them or have they been in contact with you? Um, yes.

I called a couple of times because there's supposed to be a new law about medical debt getting erased from collection and like my credit reporting. Okay. So I did contact them and they said it's still not applicable yet so I'm just waiting. I don't know that I'd wait seven years for something like that. I would see if you just said hey if I had $5,000 can you call it paid in full and get that in writing don't give them access to your checking account. You can do like a money order or prepaid debit card and see if they'll actually just settle and get it off completely

so that you're not still owing this money even if one day it does fall off the report. Okay. And chances are they'll take pennies on the dollar for it because they'd rather have something than nothing. So I'm wishing you the best. Medical debt is one of those things. Nobody's like, ooh, I'm gonna go

into a bunch of medical debt. Of course, of course. So I have the you the best medical debt is one of those things Nobody's like oh, I'm gonna go into a bunch of medical of course So I have the most empathy for medical debt out of all the types of consumer debt that are out there So I'm hoping they'll be willing to settle and get this out of your life It sounds like it's been living rent-free in your life for years now. It's not fun Austin is up next in Chattanooga, Tennessee. What's going on Austin? Hey guys, thanks for taking my call. Sure. How can we help? Yeah, so actually very similar, not super similar, but kind of with the caller earlier that just got done. So me and my wife are about 23. We

take home $5,800 a month after taxes and insurance. This year we decided to start doing the baby steps. We've paid off about $6,000 in credit card debt. I traded in my 2023 car for a 1996 Buick Regal. Heck yeah. There's that. No AC, it was pretty hot on that one today. Ooh, in Tennessee?

Gracious. Bless you. Yeah, Tennessee, yep. So we bought a house a couple months ago that kind of fits into the 25% rule as well. Monthly payment, $1480 of that $5800, so really close. My question is, we are, me and my wife are expecting our first child in September, praise the Lord. This child, unfortunately this child does have a defect, it's called gastroschisis and it'll need, it'll need surgery pretty much right after it's born.

So we have, we kind of looked into how much the surgery costs and thankfully, you know, we, as expensive as it is, we do have good insurance. They're my employer. The max out of pocket we can pay is $11,000 and we're kind of with this surgery we are expecting to to use that whole $11,000. The only debt in a couple of weeks we're we're gonna be done with credit cards we only have about a thousand dollars left praise the Lord on that too but the only other debt we have is our house and the $22,000 of student loans that I have. So my question is, shouldn't we save this money for the surgery

to be ahead of it and kind of put the student loans on the back burner, what's y'all's opinion? Yes. That was easy. Easy, yeah. You'd pause, you'd pause. You're in stork mode right now and storm mode because you know this is coming.

And so we would tell you to just pause the steps, pay minimum payments on your debts and stack up as much cash as you can until baby and mom are home. Okay. How much can you save between now and September? Yeah, so with the dollar app, I calculate we we can after all of our expenses, we can put roughly $2,800 to $3,000 a month. Great. Amazing. So you'll have more than $11k.

So I was just wondering what y'all are thinking. Save up as much as you can, even if it's above 11k, save up as much as you can during this time frame. And then after, like George said, after everybody's home and safe and secure and healthy, then whatever's left, yeah, you can put it towards the next smallest debt. And you know what, Austin, I'm gonna gift you every dollar premium since you guys are budgeting, you're doing the work. We want to cover that for you at least and wishing you guys the best. Yeah, prayers with you. With this baby and prayers that the surgery is very successful and you get a healthy baby on the other side. Frank is up next in Amarillo, Texas. What's going on Frank? Hey, how's it going? Great, how are you? I'm doing alright. Yeah, the question I have is, this last weekend, my wife and I took a trip to Lubbock and paid off all of our remaining debt. And now we're wondering, that's. But we were wondering what to do next

because from the little bit of research that I've done, you need to have at least one month or sorry, one year of house or rent payments. Correct. Sorry, I'm a little nervous. Like rental history? Yeah, in order to get a mortgage without a credit score. Yeah, it is part of it,

if you're talking about manual underwriting, yes. Right, and the issue there is I get free housing with the guy I'm working for, so I don't know exactly what the solution would be to that issue. Huh. Free housing, wow, that's, I mean, on the one hand, that's really great, on the other end,

I can see how it's... When are you looking to actually make the house purchase? We're hoping in a couple of years. Oh, so there's time. You got time. Yeah, yeah. We have time to save up for like a 20% down is what we were hoping to do.

And what's the long-term play with this free housing? Is this gonna go on for the next five years or are you guys gonna get your own place and rent? It would go on for as long as I wanted to, as long as I'm working for him. Wow. Well, I'm wondering, because all you really need is 12 months of documented on-time payments for some sort of rent, even if it was your parents. So what I'm wondering, could you set up an arrangement where you technically pay him rent, it's documented that you paid him rent, and he sets it aside. I'm sure we can work something like that out.

That's a pretty cool idea. Yeah, that's what I would do. And I would also do the homework ahead of time. And what you can do is contact Churchill Mortgage and say, hey, here's my situation. I wanna do a house. It's gonna be a no score loan. Here's my housing situation.

What is the proper way to do this so that when they go, the underwriter goes to manually underwrite it, they're not gonna have any red flags. They're gonna go, oh, okay, you did exactly what you needed to do. But I think they would be going, okay, yeah, as long as it's documented

that you paid them something, we can work with that. And yeah, and find out what would be a good number. Because then that's gonna help you out even more. You don't wanna pay them like 80 bucks. We can work with that. And yeah, and find out what would be a good number. Cause then that's gonna help you out even more. You don't want to pay them like 80 bucks. Yeah, $4 a month may not trade. And so they can help you figure that part out. The other pieces you'll need, verification of income, which you'll have.

And then a 12 month history of your bank statements, which you'll have. 100%. And then an alternative trade line, like a cell phone bill, insurance bill that you paid regularly. Oh cool, I have all that. Great.

Those are really all the pieces you need. I'm glad that you did the research, because a lot of people call and they go, well, I called one bank and they said they don't do that and now I need to go get a credit card. I'm glad you're actually doing the homework ahead of time. You have time ahead of you, this is not happening in the next three months.

So it's not an emergency. But I love that you've just opted out of the debt system and went, there's other ways to do this without the stress and headache. Yeah, we've been listening to y'all show for a long time. And I'm pretty sure Molex is gonna hear this. He has no idea I'm calling actually. How exciting.

Yeah. That's good. I love it. Well, you'll join the club, the no score mortgage club. Can I tell you, Frank, when I went through it and got the no score mortgage, I really thought there was going to be more like, you know, hoops to jump through. Honestly, yeah, I agree. It was surprisingly easy.

So unreachable, right? What's that? It seems unreachable. Like when I talk to my co-workers or friends, they often say I'm supposed to get a credit score because that's the only way to get a mortgage. And I listened to y'all for a long time, so now that can't be true. Yeah, they just don't know. I mean, you might as well be speaking Mandarin when you're talking about no score and manual underwriting. Like, what is this guy talking about?

It's 100% possible. And I mean, for those listening, I will say if you're self-employed, the last hoop to jump through is you do have to show your tax returns. But other than that, I mean, it's exactly- They wanna see consistent income. Yeah, they do. And so- Okay. But other than that, that's it.

It's a real thing. Wishing you the best of luck with this, Frank. Proud of you, man. That's an awesome place to be. All right, let's go on to Edward in Greensboro, North Carolina. What's going on Edward? Hey can you hear me? Yes. All right I'm trying to figure out the best way to set my kids up for success in college and I just I don't know whether it's better to keep the

money for them for savings like in a 529 or just a high-yield savings account. My son is a little bit older he's already 12 years old. My daughter savings account. My son is a little bit older. He's already 12 years old. My daughter is six, so she's got a little bit more time to let that money accrue. Okay. I love that you're thinking through this. The 12 year old has another six years until further education is on the horizon? Right, right. And how much money do you have currently or do you plan to start setting aside?

Total right now we have about $20,000 and we're trying to put a couple hundred a month and then kind of see what we get for our tax return and then put that back into their college savings account. Love it. Well, the 529 has more advantages to it and a lot of people do get worried of what if they don't to it. And a lot of people do get worried of what if they don't use it? Well, there's a new loophole in the secure 2.0 act, which you may have seen that you can roll 35,000 over

after a certain amount of time. Gotcha. You can roll that to a Roth IRA if they don't use it. So I would at least have that amount, but I'd rather have too much than not enough and go, hey, sorry, junior, I only have 50 grand. You're gonna go into student loan debt for the rest. I don't like that plan.

And so the high savings account, if you were like under the gun and they're about to go to college and you just wanted a place to park it that was liquid and you didn't have market fluctuations, that would be fine. Or maybe in their final year, if you wanna kind of protect it

cause you're not sure what's gonna happen. But I would, personally, I would do a 529 plan for both kids and just start dumping money in there, maybe more for the 12 year old right now. Right. And then you can catch up for the six years. Is that a long enough horizon for the fluctuations to kind of even out?

Six years, I think so. If it was under five, I might not do it. Okay. But five plus, if you look at most periods of time in the S&P 500, for example, most periods of time for five years, you're gonna see it go up and to the right. You're gonna see some sweet growth.

And then, you know, you also, the money's going in tax-free. It's gonna grow tax-free. You can withdraw it tax-free for education. Okay, awesome. So I like the 5.9 tax advantages over the high yield savings account because the income the high yield savings account creates is taxable. Oh yeah. Whereas the growth in the 529 is not and the 529 has a lot of advantages tied to it, whether

it's in an ESA or 529. I like that plan and you can supplement it from savings if there's not enough, but I would plan to just throw as much as you can to the 529 and you can supplement it from savings if there's not enough, but I would plan to just throw as much as you can to the 529. And you can also change the beneficiary. So if the 12 year old doesn't use it at 18 or doesn't use all of it, you can just change the beneficiary to your six year old.

Okay, all right, awesome. Love it. Oh, and one last thing that's interesting, Jade, that's a lot of people don't know about is you can pull money from the 529 against a scholarship. So if you get a $10,000 scholarship, well you can actually pull $10,000 out without penalty. That's correct, yeah, that is a good little loopy hole.

So that's fun, because you go, what if they get a full ride? Well, that's sweet, they can still take that money. So love the question, love that you're preparing for your kids' futures, and goodness gracious, I keep thinking of Borrowed Future, the documentary we did on the student loan crisis. Oh yes, yes.

If you guys need a little wake up call, watch this with your kids to help them understand what they're getting into. Because the truth is, if you're like most of us at 17 or 18, we're just starry-eyed hoping to get into a school. And the money's just like, well, don't worry, there's financial aid, quote unquote.

It's really just a bunch of subsidized loans from the government that you have to pay back. And so don't let your kid fall for the trap of student loan debt buried in 150 grand, 200 grand, 50 grand. And Jade, you had, between you and Sam, how many student loans do you guys have? Woo, 280,000.

Too much. That's crazy. 2AO. I had 36,000 and I thought I'll never pay this off. Yeah, terrible. It really is a trap and it really does hold you back. I mean, we're seeing it in society, George. You're absolutely right.

This is what's keeping people from having children. This is what's keeping people from buying their first home. It's what's making a lot of people feel trapped. And so if you can help your kids avoid that altogether, they're getting a head start in life. Absolutely. If you can do that one thing you have given them a leg up in society. Then they go oh we can actually afford a house one day. Yes. Because we're not going to spend the next five years trying to clean up a mess. That's right that's right and now on the other side of that if you do have

student loans there's still hope for you you can get out of them but I'm just saying. It's going to stunt your financial growth. That's right. There's one situation that is clearly better than the other. If I could go back in time, I wish it were different. You'd be in a different place, but you cleaned it up. I cleaned it up. That's right. It's possible, but you know, we can be the preventative medicine for our kids

instead of the emergency surgery. That's right. That's what we like. That's right. That's what we like. Welcome back to The Ramsey Show. I'm George Campbell joined by Jade Warshaw. Open phones at 888-825-5225. If you're buying or selling a home, it's a big deal and you want an expert in your corner fighting for you to find the best deal for the right price.

And the Ramsey Trusted Program is the only way to find a top agent you can trust who will help make your home a blessing, not a burden. It's super easy. Compare agent profiles, interview them, choose the right one to work with. You can find a local Ramsey Trusted Real Estate Pro for free at RamseySolutions.com or click the link in the description if you're listening on YouTube or podcast. Up next, we have Hayes in Jackson, Mississippi. What's going on Hayes?

Hey, how are y'all? Doing great. Doing good. This is surreal. So I'm just trying to figure out how I could possibly get my wife on board with following the baby steps. Ooh. Tell us what it's looked like so far. Not good.

You try giving her her favorite snack right before you have the conversation? Well, well, she's pregnant right now, which makes it all the more difficult. Oh, good luck, my friend. A sleeve of Oreos might do the trick. That's worked on my wife when she was pregnant. Please tell me, did you tell her to sell her car?

What did you tell her she needed to do? No, she actually has no car payment. Her car is paid off. Good. So what is she not on board with? Saving the money every month. So we have only about 70,000 in debt, but we're in the process of building the house.

So that's just not kicked over yet. So we're just not paying on it yet. Okay. What's this house going to cost? We're thinking probably around $385. Wait a minute. We should have sunk before we built it. Well, we have a contractor and he's trying to help us get it to the lowest possible number. But right now we're sitting at about 400,000. Hayes. But he's trying to get us

380. Hayes. You should have seen George's face when you when you said it because typically the way this goes is you set the budget first and the budget is the budget, and then you go from there versus working backwards and saying, hopefully we can get it to whatever a number is. So what is your budget? Is the budget 380? Well, we make good enough money to pay for it, but that's not the issue. The issue is,

yeah, I feel like it's gonna be too expensive, but we're already in this. You've been doing a lot of feeling and thinking. You gotta know, we gotta know these numbers. Yeah, I feel and think a lot. So let's try to help you with that. So let's pretend that it is 380, and your guy gets you to $380. Is there a land cost involved or it's just...

The land cost is going to be built into that, but we do know what we're going to be paying monthly if that helps at all. Well, it depends on what you spend on this because if you spend more... Did you take out a construction loan already? Yes. Okay, what's the construction loan? The construction loan was $420, $420, but they're trying to get it lower so the rest of it just goes towards the house. Because that will convert to a conventional mortgage when it's built.

Right. Okay. Trying to make that a lower amount. Yes. At $420, let's pretend everything goes awry. At 420, what percentage of your income will your mortgage be? Probably 25%.

Probably or? What's your take home pay as it stands? We make about 10,000 a month. Okay. Good. And the mortgage is gonna be what? About $2,500. Okay. Alright. And you have $70,000 in consumer debt. What type of debt is that? Um, car loans. Oh. Tell us about that. All car loans? Yes. So $35,000 Um, well, 11 and 50. Who drives the $50,000 car mama?

Uh, well, yeah. So she's got, she's got a Jeep that's paid off and then we've gotten Explorer and that one's, uh, and then I'm driving a 2015 Chevy Cruze. So I was right, you wanted to sell the Explorer. That's what's really holding this thing up. It's not gonna happen though. Why? She loves her car.

I mean, there's no me convincing that. I would love to. I would love to sell it. Women love a lot of things they can't afford, and so do men. You guys have $61,000 in car loan debt, and you make $100K, $120K? Something like that.

That's a lot of your world tied up as you bring a baby into this world and build a house and she's pregnant. How'd you frame it up? How'd you frame it up, Hayes? Because that matters. If we lead with what we're gonna be doing, we're gonna be getting out of debt,

and we're gonna do that by selling the cars, and we're gonna do that by cutting back, and if you lead with all those what things, for her, it's probably like, okay. This is the last thing on her list of things to think about. But if you could tie it to a why and a bigger reason, probably something that's wrapped around this little cuddly baby that's coming up, I think that's going to give you a lot more luck on kind of chipping away at the ice around her heart when it comes to this

Explorer. I think I used a Dave Ramsey video on YouTube. Oh no. You turned Dave against her man. Well I think Dave has good points. He does but you can't use a one-minute clip of him at his finest and I'll put that in quotes to convince her. What is the stated vision and goal you guys have as a couple? What is the thing both of you want? So what we both do want, not just to be you know millionaires in our 30s, but mainly to be free of debt. She wants that, but she doesn't want to take the steps to get there. She

doesn't want to give up the lifestyle that she has to be free from her debt. How would she define that lifestyle, quote unquote? She was very spoiled growing up, and so she liked getting her hair done, getting her nails done. Those are essentials. Getting clothes if she wants them, which she's cut back a little bit. Is that falling on you? In a sense, I mean, we have one joint bank account and then we have two of our personal

bank accounts, but I throw all of my money in the joint account to use to pay off loans and stuff like that. And then she can't get rid of, she wants $10,000 in the checking account at all times. Is that what you guys have right now? Yes. And then she can't get rid of, she wants $10,000 in the checking account at all times. Is that what you guys have right now? Yes. And then we both have money in our joint. Was this before she was even pregnant or was this a, she got pregnant and decided we need

to have some? Okay. I've been on Dave Ramsey kick for a while and she's not contributing. Okay. Well, both of you went into this car loan debt. Oh yeah. Well, yeah. Oh, well she had it before I married her but yeah, okay, so she's had this Explorer before you Yes. Oh, so she's been carrying this debt for a while. What's the payment? We've just been married since October. Oh Okay, okay. I'm starting to get a clearer picture now. So yeah, you guys come from two different worlds

You've got two different philosophies around money. And the truth is I'm not, I'm validating the idea or like the emotions around this, but I'm not validating the behavior. The truth is a lot of times when we throw the baby steps at people, it's very emotional for them because we're saying the lifestyle you're used to living, what you're used to eating, what you're used to buying,

how you're used to spending your money, we're telling you to do the exact opposite. And so people do hold on with a Kung Fu grip you're used to living, what you're used to eating, what you're used to buying, how you're used to spending your money, we're telling you to do the exact opposite. And so people do hold on with a Kung Fu grip because that's everything they know and love and makes them feel secure, right? You could understand that, right? So that's what she's, my guess is that's what she's doing.

Don't take this, these are all my comforts. These are my creature comforts and I've got this baby cooking inside me. Why are you trying to mess up my life right now? Uproot my life that I like. It's comfy in here. Yeah. But you have a stated goal. You guys said you want to be millionaires in your 30s. Both of you have said that out loud?

Yes. Yes. We both want that. I don't know any people who are millionaires in their 30s hanging on to a $50,000 car loan. I don't either but- You're spaking my mind. Right. But here's the thing though. She doesn't feel like anything's on fire to a $50,000 car loan. I don't either, but- You're spaking my mind, so. But here's the thing though, she doesn't feel like anything's on fire. So for her, we can meander,

we can walk at a mediocre pace to get there. Something's gonna have to happen for her to realize, hey, there's kind of, there's $70,000 of debt. This is a fire. It's not just a little something, something. Work on that, but for right now, really keep painting that picture of why I'm gonna gift you guys financial peace University if she can sit through that watch the lessons with you have a

Level-headed conversation after each lesson. I think that could change some things Well Sunday is Mother's Day. I hope I'm not the first one to let you know, but this might be a reminder to pick up a nice gift, make the reservation, get the flowers, get her favorite dessert. She is worth it. And with that, here's our scripture of the day, Proverbs 25, 26. She is clothed with strength and dignity, and she laughs without fear of the future. And when she speaks, her words are wise, and she gives instructions with kindness. Mitch Albom said, when you look into your mother's eyes,

you know that is the purest love you can find on this earth. Awe. Ain't that the truth? That's sweet, yeah, that's sweet. What are you doing for Whitney? Much love to all the mamas out there. I am doing the most by having her do nothing. That's the goal How can we have her do as little as possible? Yes, good. Well, I pick up the world on my shoulders to see what her life is like for just one day

I like that. That's good. How about you? Are they gonna celebrate you big? Uh, I I've dropped some hints a few you know breadcrum crumbs if you will. Jade's hints are very clear Yeah, yeah, I didn't say. She doesn't mince words. Yeah, I did there's a specific gift I want and I said it would really be nice. I've been looking at you know, you know those rings that track your fitness Oh, yeah, that's what I want. I don't need that kind of energy. You don't need that kind of that kind of accountability I know what's going on. Yeah. I take that.

I'd also take some, you know, a nice omelet in bed. Oh. Yeah, I'll take an omelet. Okay. Sam Warshaw, are you listening to the show, bud? Step up. Step it up. All right.

Ron is in Oklahoma City up next. What's going on, Ron? Yeah, I'm trying to do the best I can to protect my assets so when I die my kids and grandkids will get the most without losing at all the taxes. You're a good man and a good American. I love the way you're talking. Well, last year I talked to you and your advice, I have zero debt, the only bills I have are utilities. Great! Wow I have are utilities. Great. Wow, way to go.

You've done really well. What is your net worth? I'd say total assets, including my land and everything, is less than 500K. Okay. Less than 500K? Yes. Okay. So what's the land? 40 acres with a mobile on it. Uh-huh. And what do you think it'll be? What's the land? 40 acres with a mobile on it.

And what do you think it'll be? What's that worth? Less than 200k. Okay. And then what do you have in like 401ks? And is it traditional? Do you have IRAs? My IRA that's around 200k and about 100K savings.

I say savings, checking accounts, savings, everything, bank money, cash. And is the IRA traditional or Roth? Traditional. Okay. And what are you wanting to do? When you're saying you wanna pass it down with as little taxes as possible,

are they, do you have like transfer upon death on, listed on your accounts? Do you have listed beneficiaries on all of this? No, and that's why I'm not sure, because when my father died, I was already on his bank accounts as a whatever you would call it, not an owner, but you know what I mean, he put me on his bank accounts. So when he died, I was just able to go right checks, divide the money between me and my sisters. Do you have a written will?

No. Oh, wrong. That's what we need. There's your next piece of homework. That's what shame. That's no shame here. You can get it done easily with our friends at Mama Bear Legal Forum. So you can jump on there and make a simple will online

and it'll take you just a few minutes to knock that out and you'll feel a whole lot better for it. Cause that will state your wishes of what's going where. And you know, I don't think your assets are at the point where you're gonna need a fancy trust and all that. A simple will will do the trick for what you've got here. But you do wanna make sure that you've dotted your, you know, I's and crossed your T's.

And it might be wise to work with an estate planning attorney to make sure that you're doing all the things that you wanna do. Now with this traditional IRA, they will have to pay taxes on that. I've read that they would, if I did it to the grandkids, they would be taxed at their parents' tax rate. Yes, that sounds right.

It'll be an inherited IRA. There will be required minimum distributions if it's a traditional. Yeah, I'm 62, almost 63, so I don't have the mandatory, what is called withdrawals for another 10 years. Now, are you gonna need this money to retire with? No, I don't need anything. You're good. I have too much money.

Oh, okay, great. Do you have other accounts? How are you covering your expenses now? Just out of my check. I've got military retirement, disability. There we go. And social security. So you have other guaranteed. I make so much more money than I need.

I'm- You're a simple man. Right now I'm looking at buying a used car for my granddaughter. How old are you? So, 62. So, okay, let's pretend you're here for another 20, 25 years. What will that IRL write? No.

You don't wanna be? You think 82 is a pipe dream? You're ready to beam up? I saw my parents in their 80s and it wasn't a good thing. Well, I think it can be different for you. I think so too. You sound like you're in good health at 62.

Let's just- I ain't died yet. Let's pretend, Ron, that you're fit as a fiddle at 82. You've got, you're vibrant. You've got a great longevity for you. What'll this be, this 200 grand, you know, with what you're currently doing, what do you foresee it being?

Have you kind of sat and figured that out? No. I would. I'm really easy to please. I don't need a lot. So I'm trying to figure out how to do it for the progeny. Even for your heirs. I want the grandkids.

Yeah, for your heirs, I'd sit down, I'd sit down with a compound interest calculator. If there's more that you're adding to it regularly, I'd look and see what will this be? I mean, if you never touch it, a lump sum is usually gonna double every seven years, so you can use that for starters. But to kind of get your mind around what this is gonna be

when you do go on up to heaven, that'll be good, because when you're making your will, you can think through it from that lens versus what it is today, and it'll help you make some of those decisions in a more intentional way. Okay, because I've even had people suggest that I create 529s for the grandkids. I love that idea.

But that would still be taxable, right? Not for them. They would be able to,. But that would still be taxable, right? Not for them. They would be able to, that money's gonna grow tax free and as long as they pull it out for education purposes, they won't pay taxes on that money. That's a great vehicle. I would pay taxes as I bought the 529?

Is that how it would work? No, you would use after tax income to fund it, but other than that, there's no tax liabilities there. And then the other piece is this land, make sure that you let them inherit it. Don't give it to them while you're still alive. Don't give it to them early.

Let them inherit the land after you die because they'll get a step up in basis. Have you heard of that term? No, I have not, but I figured they're going to have to drag my body off of this place. They might bury you there if you got a nice plot there. I'd plan for that. But you got to put that in the will exactly but the the step-up basis is important because how much do you buy the land for 75 with the house and everything and now it's worth 200 yeah so the key was step up in basis when

they inherit it it's gonna say this is this is they got it at 200 and so if it grows to 250 they're only gonna have to pay taxes on the difference of 200 to 250 versus 75 to 250. You see that? Oh, okay. It wouldn't be considered like not a capital gain, but something like that from the initial. So it's a tax reset if they inherit it.

Now, if you gift it to them early, that's not the case. So there's some important estate planning pieces here. And for those reasons, I would get in touch with an estate planning attorney and get the will done. Make sure that you've got all of your wishes stated. Make sure you understand you have the right things set up for the beneficiaries, the transfer upon death

on every single bank account so that this is a seamless experience. And they are saying, thank you so much, Grandpa Ron, whatever your grandpa name is, for making this easy on us, or Dad, you know, he passed and we miss him, but goodness gracious, he didn't leave us on a scavenger hunt to pick up all the pieces

and figure out where 90 things were. Okay, it sounds to me like it's worth getting an estate planning attorney to take care of this rather than just going to the legal office on base. Yeah, I mean, you can check with them. They might have resources there. This is just, you know, when you talk about this kind of stuff, estate planning is what it leans to.

I don't know what their experience are. And if you have a base that has legal help that's cheap or free, I would definitely start there and take advantage of it. But I love that you're thinking through this stuff. This is- You're a good man, Ron. Yeah, I mean, what a legacy to leave. Yeah, I mean what a legacy to leave Yeah, that's excellent. That's the kind of legacy

I want to leave an inheritance to your children's children love that as the good book says What a great way to end on an inspiring note Thank you so much Ron. Thank you Jade for being a great co-host Thanks to all the all the folks in the booth all the mothers out there. Happy Mother's Day I hope you hear from a lot more people than just Jade and I, but that's a good start. This has been The Ramsey Show.