The Ramsey Show - Are You Ready To Go Scorched Earth on Your Debt?

Episode Date: January 17, 2025

💳 Share your thoughts and you could WIN a $500 Gift Card! 💸 Start taking control of your money in 2025 at our free livestream George Kamel & Dr. John Delony answer your questions and discuss: "My ex-husband is coercing our daughter into a $600,000 mortgage," "How do I start investing for retirement?" How the California wildfires impact everyone, "We think a bank employee is embezzling money from our bank account," "My parents bought whole life insurance for me as a child," "We regret purchasing a fixer-upper," "Borrow from my 401(k) to pay off debt?" Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp ◎ Get 10% off Byrna product bundles and more! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY 💸 Learn more about opening a high-yield savings account with Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📱 Listen to the full episode for free in the Ramsey Network app. 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 💵 Start your free budget today. Download the EveryDollar app! 💪 Invest with confidence! Get tickets to Investing Essentials 💰Watch 90-Day Money Makeover. 🏘️ Free Tools & Resources to Reach Your Home Goals Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Hey guys, if you're ready to get ahead with money and start building wealth this year, don't miss our free take control of your money live stream. It's on January 23rd and you could win $4,000 just for signing up. You got nothing to lose. Go sign up right now at ramsysolutions.com slash live stream. 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 Dr. John Deloney. We're taking your calls, triple 8, 825-5225. We'll do our best to give you the right next step for your life, your money, your mental health, your relationships, whatever is going on.

Shannon's going to kick us off in Phoenix. What's going on, Shannon? Yes, hello. Hey. What's up? Yes. Hello. Hey, what's up? Oh, um, okay. So I'm calling because, um, um, my ex husband and I bought a, um, town house for our children to live in during college. And then four months later I filed for divorced. Our divorce was final,

but in the divorce, they didn't split up the property because, um, my oldest daughter was on the title and the mortgage. So then after that I had to get a real estate attorney. And we're now at the point where we have a legal agreement for my ex to refinance the property and get my name off the property. Or, um, if he doesn't do that by March 1st, then we sell it. But this is being contentious. And my issue is for my

daughter. He's telling my daughter that she has to be on the refinance of the property. And I'm just want to give her the right information for her financial security for her life. If it's a good thing for her To be on the mortgage of this $600,000 property she in school

She is a junior and She also is a real estate agent and she is making about $50,000 a year. Yeah, that's not even the same plan. It is a $600,000 mortgage. So like, if- I know. She was artificially propped up with you and your ex paying the mortgage. Yeah, she shouldn't be on it.

Right. Yeah, no. I don't know why she would be on this. Right. It's just like y'all are paying for her dorm room. It just happens to be not a dorm room. It happens to be a condo that you as the parents decided to buy for yourselves. And that's, yeah. Cause what's going to happen is he's going to get mad or something's going to happen. He's going to quit paying and a 21 year old

college grad is going to have a gets foreclosed half million dollar mortgage. Yeah. She's going to get foreclosed on she can't afford that. Yes. And that's what I thought. But he's, um, he's citing to her and saying to her that we signed a legal agreement and that she has to be on the refinancing. She didn't sign anything, did she? She didn't. My attorney said that, here it is, he said she is not a part of the settlement agreement. No.

That her signature acknowledges that she's aware that it took place, but it doesn't bind her to any terms of the settlement agreement that her signature acknowledges that she's aware that it took place but it doesn't bind her to any terms. So whose name is on the deed and whose name is on the mortgage? All three of ours. Yikes. So the greatest gift you could give this young woman is to sit down with your daughter and say you need to go find yourself an apartment to live in and get out of this thing. And I think she can afford her own apartment. I think she's at the stage in her life where that's what she can do and wants to do, but her younger brother and sister

also want to live in this townhouse. That's between them and their dad. I know. I would get out of this. It has not been a blessing so far. It's not going to be a blessing a year from now. And by the way, why'd you file for divorce? Financial reasons. Because he's not a person of character? Yes, because he does things like this to me constantly and I've spent a whole, wasted a whole bunch of my

personal money, so that's the way I got out for financial things we kept getting into that I, me and my family had to pay to get us out of. So we call that financial infidelity here. And there's no reason to think he's gonna suddenly start acting with character and integrity on these exact same matters with other people. He's just looking for the next victim. You laughed. I agree.

And we have this legal agreement that he has to refinance by March 1st and December 15th. I got an email from a title company and he's now wants to assume the mortgage because I definitely know that he'll save a lot of money on the interest rate. But I haven't sent. Yeah, but you have to get off

in this young child's mortgage needs to get off. Yeah, I've spent $10,000. Can he even afford this if he assumes the mortgage and it's just on him, he's just gonna rent it out to a stranger off the street at market rent or what? What's his plan? Right. I don't know if he can actually qualify. I think that's why he needs our daughter to help qualify. Well, he can't force her into this.

Yeah, that's predatory. Tell your daughter, please don't do this. I know I tried, but it's, yeah, he's just very convincing. and he's had renters in and out but can't keep renters in there. And there was even one time when there was a renter who was an ex-con and he didn't do a background check living with my two children. I know, but listen, listen, you're looping on something you've already made a decision on. Yeah, I agree.

Like you just telling yourself the story again about one other time you screwed up and one other time you screwed up and one other time you screwed up is a choice for you to be miserable right here in the present. Don't do that anymore. What you can do is affect what happens tomorrow and you can sit down with your daughter and say this is a bad deal financially. You're going to be attached to a $600,000 mortgage. Your father who you love and is your dad. I'm not gonna talk bad about him But facts are he is not skilled in financial matters And so I'm gonna tell you as your mother, please do not attach yourself to a six hundred thousand dollar mortgage To somebody who especially with somebody who is pressuring you to do something that you can't afford

Here's the this is not a mom and dad This is a math problem. And he's using her as a pawn in this scheme. And if she chooses, knowing all of that, to still go through with this, that's on her to deal with. That's right. And he's going to have to deal with it when he realizes a 21-year-old cannot help pay this mortgage.

And you can tell her, you're a grown-up, you can do what you want to do, I will be with you, you can call me when this thing goes sideways and you can smile at her. Or you can say, you make 50 grand a year, go get an apartment. I know you're the mom and you love her and she's what, 20 now?

21 now. 21 now? So you're in that weird, awful, bum, slash really awesome transition where you get to stop telling her what to do and you get to just sit down across from her at a diner and say I'm gonna try to use a power of influence I love you and here's what I would do or here's the just here's the things I've done and it was wrong and so here we are yes and

that's exactly why I called you guys because I didn't know what else to do I kind of tried those things and her dad is just very convincing and she wants to help. I got it. She's a really good kid but. Well she's a kid who's grown up being a people pleaser because she had to. Yes. Yes.

And the only other thing I could tell you to do is to give her a, ask her to just run the numbers with you. Yes. And this is not going gonna be the last time she bails dad out if she goes down this path. And she's gonna learn the hard way and it'll probably destroy their relationship long-term. I don't see a world where this just ends up perfectly

and they're all happy with what happened financially. That's right. I agree, yeah. And let me just say this, George, to all the, not to you, but to all the parents out there. Yeah. If you ever, ever have to go tap the credit, pull a credit card out in your kid's name, sit them down and try to convince them

to use their success, their wealth as a pawn in some scheme you're running, you're a scumbag and you need to stop. It's your child. It's your kid. If you want to do stupid stuff with your money, if you want to do stupid stuff with your character, nobody can stop you. This is America and you're an adult unless you don't break the law.

Don't drag your kids into this stuff just because you have an ego. You can destroy them with you. Please don't watch some Instagram reel or TikTok where they're like, just buy a piece of property for your kid while they're in college. It's a wealth hack. Here's what happens on the other side of that. Relationships are broken. There's no wealth hack here. Don't do it.

Let your kid just live with seven roommates. That's how it should be in college. God bless. This is The Ramsey Show. OK, here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with. People are unknowingly putting money into tech giants and household brands that don't match up with their core values.

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If you're ready to get your finances in order once and for all in 2025, you've got to join us January 23rd for our free live stream. It's called Take Control of Your Money. It's hosted by Dave Ramsey and Jade Warshaw, so you know it's going to be good. You're going to learn how to stop living paycheck to paycheck, how to free up more breathing room so you can pay off debt fast,

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or click the link in the description if you're listening on YouTube or podcast. It's gonna be a good time. Amanda is out in Kansas City up next. What's going on, Amanda? Hey, how are you guys? Doing great, how are you? Doing good. I just had a question about investing.

I wanna know the best way to disperse the 15% each month. I recently just quit my job to be at home with my son. Congrats. Yes, yes, thank you so much. We are debt free as of last fall, finished off with a loan. Cut up credit cards, we have every dollar premium, so we're very much on a very strict budget,

but my husband invests 7% with his employer, and then both of us have... You broke up on me, both of you have what? Oh, we both have ROPs. Okay, great. That we contribute to. We're just not really sure where to go. We've been contributing to that for about five years, and then we opened up a custodian account and a 529 for my son.

So just trying to figure out the best way to do all of that kind of at the same time. Okay, so you're in this four, five, six land. We need 15% of our income going to retirement. That's the priority. We're gonna put our own mask on first. Anything beyond that can start going to kids college fund, beyond that toward extra on the mortgage. And so are you guys investing 15%

of your household income right now? We haven't like totally looked at it because what we had been doing is putting a little bit into our son's account, a little bit into the raw, because we just kind of started on this journey of obviously doing a one income family. So what is your household income? It is, we bring home about $3,600 a month and I also have a $10.99 work from home job, but it's very inconsistent.

I can make 300 one month, I can make a thousand one month. So, this is only a 30. So the take home pay is about 43 grand a year. What is his gross income? About 66. Okay, so 66 grand. So if we take that number, now we're gonna go, okay, 15% of that's 9900, which means every single month,

you guys should be investing $825. And here's the way to filter that. Use this strategy, match beats Roth beats traditional. Does he have a match through his employer? Yes. Great, and then beyond that, does he have a Roth option through his employer? I don't know, but we each have Roth

through our own financial advisor. Okay, so you have a Roth IRA, you have a spousal IRA now as a non-working spouse. So you can contribute to that. Does that need to be changed to a spousal one? I would check with your advisor on if the actual account needs to be changed, but just legally, I want all the stay-at-home spouses

to know that they still have an option to invest through an IRA as long as the other spouse has earned income. So it's kind of a cool hack there. But with your income, you're not gonna get super far. I mean, you know, 9900 bucks, that'll max out the IRA, one of them, and you'll get the match. You'll probably end there.

Okay, perfect. So we shouldn't worry about putting it into both accounts, the Roth IRAs. It doesn't really matter. You know, 5,000 in one Roth. Let's say you put 5,000 in one, 5,000 in the other. If you put 10,000 into one, you're going to have the same rate of return, same exact dollar amount if you're invested the same way. So it doesn't really matter strategically, you know, if we're going to fill this one

up versus this one. So beyond that, beyond the 15%, I like the idea of putting money away in the 529 account and then you guys have a mortgage? Yes. Okay. About a thousand a month. Okay. My guess is you probably don't have a ton of extra wiggle room beyond investing and paying

all your bills to then throw out the mortgage. Correct. Yes. Okay, so my goal for you guys would be how do we get our income up so that we have margin to throw more at college and more toward the mortgage payment? That's your next goal. Once you get that 15 dialed in,

and if you guys can't get to 15 and the bills are too tight, we need to cut some spending and increase income in order to get there. Okay, okay, got it. And then, hey, I wanna ask George a question on your behalf, is that okay? Yeah. So George, we often say on the show,

you need to do this, you need to do this. But sometimes I think people hear that as you need to do it all right this second. So tell me if I'm crazy, but it sounds like in this particular family situation, they've got this goal of paying off the house, they've got this goal of fully funding these 529s and they want to invest 15% and another family value that they've put on the table is we want to go to a single income, right? So might it be that over the course of this first year,

we're gonna just knuckle down and suck it up and we're not gonna have a ton of extra money, but the goal is mama and baby full-time at home, seeing how this thing plays out. And then we begin to maybe husband can work a shift or two extra, but then you start to get a sense of, this is our reality. And then you begin to say, okay,

I'm gonna pick up some other shifts or maybe when the baby turns two, then we can do some part-time stuff. But it feels like you don't have to do it all at the same time, especially when you're trying to navigate. We just brought a baby home to the house. Oh yeah, no, there's definitely a seasonality to this. And a lot of people might go,

hey, we're paying for daycare right now. We can't put extra on the mortgage. And that might be a reality for the next three or four years. But I think it's important to sit down and go, okay, if we don't, it's four years of no movement. Is that worth it to us? And if it is, four years of,

we can only go on one date a month. Or we can't go on vacation, but we're gonna fund retirement. Right, so this, and Lane Norton always says, everything is a trade, right? Everything's a trade. So it's really important that one person stay home. It's really important that we homeschool the kids.

Cool, is it more important than a vacation? Because if y'all make that intentional trade, you don't wake up in five years and go, we never go on vacations. You wake up in five years and say, we made some sacrifices because this stuff mattered to us. And I think it's that lack of intentionality and that lack of understanding.

There's just ceaseless to this thing. Absolutely. Right? Yeah. No, Amanda, how does that hit you? That's exactly kind of what we've been thinking. This obviously isn't forever and I'm gonna keep my license up so I can, not license, but my certification up so when I, when the kids are, you know, in school age then I go back to work and so yeah it's definitely just a season of life. I was just making sure that we weren't not saving as much as we could in a healthy way.

I love that, I love it. But 15% is that benchmark. And it's not a wet finger in the air. We found, Dave's been doing this for 30 plus years. If you're investing less than that, there's a risk that you might not have enough in retirement. If you're investing way more than that,

and the house isn't paid off, and the college isn't funded, your kid's gonna go into crippling student loan debt, and you're gonna have a mortgage for the next 30 years. So there's a balance to it, and we found that if you invest 15% of your income, for most people, until the house is paid off, you're gonna have at least a million, probably multi-millions, in that one nest egg.

And so it's a beautiful picture, especially for a young family like that. That's a great way to go. But you're right, John, this is a tough part of the Baby Steps. Once you get out of one through three, because we found Baby Step one, 30 days, boom. Baby Step two, get out of debt, 18 to 24 months. Baby Step three, get the emergency fund, six to 12 months.

That's great. You can knock all this out in two and a half years. Then Baby Steps four, five, six. You're like, this is a 17 year a half years then baby steps four five six forever This is a 17 year journey man It's like it's like the there's a great theologian who's once said the worst part of it being a Christian is that it's every single Day, right? It's like you can't ever like memorize all the whatever the book of Genesis and be like, I'm good

It's like cool Did you take care of the homeless on Monday, right? And did you take care of the least of these and serve the widows in your community on Tuesday? Right. It never stops. Or you, that guy cuts you off in traffic and you exhale and you pray and you say like, hope this guy gets to the hospital before his wife passes. And I didn't flip him off. And you're like, I'm becoming a better, then the next guy that flips you out, you got to do the whole thing over again.

Right. And so same thing with exercise, same thing with diet, same thing with being a good spouse, same thing with your money. There comes a moment when it's like, oh, this is every day for the rest of our life. And if that's frustrating, welcome, it is for all of us, for me, for George, for all of us. Welcome to humanity.

I think you get through baby step three, and there's this sense that, okay, now we don't have to think about it anymore. And it's like, no, you gotta think about it for the rest of your life. And it just sucks. But at least you're thinking about the future instead of paying for the past That's right. It's a different problem to have a better problem to have yes, but you always have to be intentional Absolutely, and that's where the budget comes into play You've got to get control once you get good at that budget after about 90 days you get it dialed in you start to breathe

A little easier because there's less unknowns floating around your head. This is the Ramsey Show. Self defense can be a complicated issue, but there's one solution that makes it a lot easier. A Berna launcher. Berna's look like firearms, but they're not. They're non-lethal self-defense tools. They shoot chemical irritant projectiles that stop a threat in its tracks without the fatal consequences of a gun. Berna launchers have been vetted by government agencies, police forces, and private security agencies worldwide, and no permits or background checks are required to buy or own one. Plus, Berna's are lightweight, easy to carry, and give you the power to protect yourself and

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Haley? I am doing pretty good today. Are you able to hear me pretty well? Yes. We gotcha. Perfect. All right then, perfect. What's your question? So I am wanting a great startup advice on how to start paying off my student loans. I am 25 years old and I am on the end of my road to become a licensed therapist and during between the ages of 21 to 20, 30, there was a lot of struggles, unfortunately, to where, to the point I was possibly stealing food or risk of homelessness.

the point I was possibly stealing food or risk of homelessness. And when I have found out about refund checks, I was accepting multiple loans just to live off of those refund checks from ranging up 4,000 to about $7,000. And now being 25, I have about $135,000 in student debt. I'm not out of college or graduate school yet, but I'm wanting to go ahead and start tackling this. Hmm. Yeah, that was a real common thing I used to see. They've kind of

curbed it over the last few years, but there used to be lines of students that come out and register for classes, get the loan check, and then cancel their classes, and it would just float them to the next semester and then float to the next semester. So here's the crummy part, you're not going to like our answer. You're going to have to work really hard and make a whole bunch of money to pay that stuff off. Okay. There's not, I mean, I know that sounds so annoying.

I remember one time in grad school, I asked a guy who came in and you've probably done this too, he was in a counseling class and I just, he was a professional, had a big successful practice and I said, Hey, how do you make six figures as a counselor in the room? Kind of gasped because you're not supposed to ask that question because it's supposed to be all altruistic and kind. And I do it for free. Yeah. And he looked at me and he said, you're not gonna like my answer. Just like I said to you. And I said, okay, go for it. And he said, you got to work really, really hard and you got to be really,

really good at being a counselor. And you got to take clients on Sundays. You got to take clients at six o'clock in the morning because that's the only time they can get in there before work. And you got to work really, really hard. And if you become very, very good at what you do, people will pay you to to come help them. I absolutely agree that is that is one thought I was having because unfortunately in the state of Tennessee a typical counselor salary is only about fifty to sixty thousand a year. So I'm in Tennessee. That's why I went. Here's what you have to choose. You have to choose to not be typical And so the typical

The typical counselor follows a particular track and those are my friends. That's my community. That's my world And so I don't I don't hate on that one bit But if you want to get your head out above the clouds You got to do some things that are gonna put your head out above the clouds Which means you got to do things differently you got to do groups You got to you got to do early mornings on Sundays and late nights on Saturday nights. And you got to do things that other people don't want to do or can't do. Probably other jobs in between your sessions.

That's exactly right. While you're building your client base, you got to do other jobs. And not have enough arrogance to say, well, I'm a licensed counselor. I don't do Uber. You have to have the ego to say, I'm about helping people and I can't help my clients if I'm worried about how I'm going to get my bills paid. And so I'm going to work like B-A-N-A-N-A-S all across the board and there's no job too small for me and I'm going to get it done. And then what you'll find is you become an amazing Therapist because you begin meeting clients where they are at six o'clock in the morning at five I used to see clients six o'clock in the morning That's the only time she could meet and so I was like cool. I'll be there

Absolutely do love that how much how much further do you have to finish this program I Will be done with my classes by May and then I'm starting my internship May 26 to November 2nd. And then you got several years of... Is that a paid internship or? No, this is unpaid internship but I already have a full-time job at another treatment center. When does that start? How much does it pay? Is that starting in November? No, so I'm currently working in full-time job right now,

but my unpaid internship starts May 26th. Okay. So you're gonna have a season where you're just gonna have to you're gonna have to scratch and claw and make it work because you're working full time you're doing a great thing and you got to get your internship hours just to graduate and then you're gonna have to do your 3 000 hours after that right after you pass your exams. Yes. So what are you making right now? I make roughly about 4242,000 a year. Good. And what will you be making at this new job? Do you know?

Um, roughly about just the same. Because right now for mental health technicians, that's just what I work as. It's about going to be about $22 an hour. So after all of this school, you're gonna make the same? Is that what you're telling me or am I hearing it wrong? Okay, so for a therapist, it would really depend ultimately on the agency to where hopefully I can try to make about $55,000 to $60,000. But that's all I dream to start off with.

Yeah, but that's only at the agency. You're gonna have to also see clients on Saturdays and Sundays and Monday mornings and Tuesday nights. Yeah. You owe $100,000. $135,000 making 50 grand is gonna take you a decade to pay off if you're lucky. Can't do that.

And that's not a plan. I wanna see you debt-free in a few years, not 10 or 12. So that means, like John said, getting that income way up and also not going further into debt. So here's the advice that you may be shocked to hear. I would not begin paying off your debt. Your goal should be to stop the bleeding and to not go into any more debt.

So have you already paid all the way through this program or do you still owe more? I have not paid all the way through this program or do you still owe more? I have not paid all the way through yet. How much is remaining? But I believe, oh gosh, it's still, you're talking about for my student loans itself. Well, you owe 135, are you gonna go take out more student loans to finish this program?

No. So you're done, we loans to finish this program? No. So you're done. We're done taking out debt. Yes. Are you using debt in any other area of your life? Do you have a credit card? No, I do not have. Well, the only credit card I do have is care credit

just for my dog to take him to his yearly debt appointments. Okay, and you don't have any other debt outside of the student loans? No car payment? I do have a car loan. How much is that? That is about... I have the exact number right here.

I have about $10,000 left on that. Okay. And what's the monthly payment? And then that is about $350 a month. All right. So when you're ready to pay off the debt, when you're through this program and you haven't taken on any more debt and you've got this down, then we can begin paying it off. And you're going to do this in order of smallest to largest balance, ignoring the interest rate. And I'm guessing all these student loans, you probably have like 11 or 12 student loans

if you broke them all out. Yes, correct. Okay, so don't do any consolidation here. Focus on attacking the smallest debt, whatever's next. If the next debt is a thousand bucks, let's attack that with all the extra margin we can get with our new found income from working extra. That's how you're gonna pay this thing off.

But again, it's gonna take a whole lot more income. Okay. And the good thing is that I also got, I don't really know though how to quite use it. I did get a life coach and spiritual coach certification to maybe open up another side business as well. That's what I'm talking about. You're gonna have to be a,

I love that you're getting the experience in the field at a treatment center. That's some of the best experience you could possibly get. I love it. Cause you're gonna be, you're gonna get to interact with wealthy clients and clients that don't have any money. You're gonna get to see everybody, right? You get to see how systems work and you're gonna get to work with top-notch physicians and psychologists and crummy counselor. You're gonna see everybody. That's fantastic. But yes, you're gonna have to use every hustle move you've got to see any kind of client all day every day. You're gonna be exhausted. But you've dug yourself a hundred and thirty thousand dollar hole. And so we're gonna

use all of your certificates, all of your extra things, and you're gonna meet clients where they are all across the board. and you're going to work, and you're going to work, and you're going to work, and you're going to become very, very good, and you're going to get this stuff paid off quick. Hang on the line, Haley. We're going to send you Financial Peace University. Watch all nine lessons. It's going to put a pep in your step and give you the financial literacy you need to actually

get through this. This is The Ramsey Show. This show is sponsored by BetterHelp. Hey folks, we all have stories. The family and cultural stories that we were born into, the stories of the things that have happened to us, both good and bad, and the stories that we constantly tell ourselves. And while we can't go back and change any of our old stories,

the world is waiting to see what you and I are going to write next. As we enter 2025, I want to encourage you to examine your old stories and be intentional about the new ones you're writing. And I'm not talking about goals that are going to be long gone by February. I'm talking about writing new stories that will change your life forever, for the better. And if you're like me, therapy can be a great place to explore the old stories, even heal from them, and begin to write new ones. And if you're thinking about starting therapy, I want you to consider my friends at BetterHelp. BetterHelp is 100% online therapy, and you can talk with a licensed therapist when it works for your schedule. You just fill out a short online survey to get matched with the

licensed therapist and you can switch therapists at any time for no extra cost. So start writing a new story this month with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp. H-E-L-P dot com slash Deloney. Welcome back to the Ramsey Show. I'm George Campbell joined by Dr. John Deloney. Open phones at triple eight, eight two five, five two two five. John, we'd be remiss not to talk about these fires in California and how they actually impact everyone.

So we wanted to hit some practical things, some financial pieces to think about, and even people who don't live there, it could affect you too. Yeah, and man, there's two big things here, and this is just me getting personal. One, I've got friends and colleagues out there in the affected areas, and not even directly in the areas.

I do have some friends there, but also in the peripheral, right? And so I'm somebody, I grew up in Houston where there was natural disasters and so anytime there's a natural disaster, I get, I just, it lights me up on the inside, right? I become a seven year old little boy who remembers 10 days with her cantalysia. We had to eat on a, on a camp stove. And I remember that. Just the helplessness and yeah. And the thought of being a dad and standing with my wife and my two kids and our house is burned.

Like it's just harrowing for me. That's number one. Number two, given the job that I have, the larger picture, man, is we have these challenges with regulators. We have these challenges with local ordin we have these challenges with local ordinances that you can't do all sorts of things that would make areas safer to live in,

and we're driving out insurance. And at the end of the day, and this is a hard pill for all of us to swallow, a bank's not gonna loan you money for a mortgage if it's not insured. They're not gonna loan you, we don't want people taking auto loans, but. They gotta protect their collateral. They gotta protect it, right? So if you take out a mortgage, the first thing they ask for is you gotta have the house insured,

right? And so this affects not only the people who have lost their homes, and it's just tragic. This affects all of us. And so just a couple days ago, I sent an email to you guys and to Dave, and like, hey, I'm worried about the state of the insurance market. Right? And so, man, I'm glad that you put this thing together, George, this is awesome. Just to walk people through, how do we, what's happening?

And then what do we, what can we do? Yeah. So like you mentioned, these increased claims from natural disasters that depletes funds, which leads to higher rates, even in low risk states like Maine and Vermont, and that broadens the financial burden beyond California. So there's a lot of factors that have compounded this,

like you mentioned, regulatory constraints that prevent insurers from raising rates to cover their increasing costs. There's already rising costs from inflation, reinsurance, natural disasters, and then the insurer's inability to remain profitable under current conditions. Remember, they're a business, they need to make money.

This is not in defense of the insurance companies, but if they get bankrupted by having to cover all these claims, they can no longer do business. And imagine if you had a cheeseburger stand and the cost of beef quadrupled on you and your local government said, you have to charge this for a burger. Well, then you can't sell, right?

So like, I never thought I would say this, but I've, I understand the business of insurance. If the government's saying you can't do this and the government's not doing the things for the infrastructure to support if there is a fire break that breaks out or whatever challenges, then you can't do business there, right? It's a mess. And it's got a lot of people looking at their own insurance and wondering, what does this cover?

As everybody should be doing, by the way. Yeah, this is a good time to check into that. So there's standard coverage limitations. So typical homeowners insurance covers events like fires and theft, but often excludes major natural disasters, these acts of God. And then there's supplemental policy.

So depending on your location and risk factors, you might need additional insurance like flood or earthquake coverage to ensure comprehensive protection. That's a big deal in California, earthquake coverage. Of course. Or if you're on the coast, right? If you're in Florida, you're in Texas, you're on the coast and there's an increase in frequency or an increase in intensity in storms,

yeah, you're gonna have to get additional riders if they'll even provide them, right? Exactly, and without the adequate catastrophe insurance, you could face substantial out-of-pocket expenses for repairs or rebuilding after a disaster, as many Californians are dealing with now. They didn't have the right coverage, they didn't have the right policies,

and they're left to foot the bills. It's scary. Or they had them, they got canceled on January 1, or whatever rumors are floating, I mean, just, it's a mess. So here's the tactical recommendations. Number one, like we said, review your current policy. Understand what is and isn't covered

under your existing homeowner's insurance. And call the hotline and check in with the customer service and go, can you explain to me what this actually means? And then number two, assess your risk. Consider the likelihood of various natural disasters in your area and determine the necessity of additional coverage. Can I say this?

We have a kind of an internal rule that we don't say I told you so. This is one of those moments when we beat the drum over and over again, don't have a house payment that's more than 25% of your take home because you never know when you're going to have to go get a new rider. You're like, dude, we are super exposed. We don't need to go get a fire rider. We need to get an additional policy to cover a flood.

Because these 500 year floods are happening every year now. If 50% of your take home is taken up in your house, you can't float that extra 600 bucks a month, or the extra 400 bucks a month, whatever it might be. And so that's why we always say, make it 25%, you might have to get a smaller house, but man, when these things pop up, you have some margin. You ride that margin. Wait, and think about this,

the mortgage doesn't go away just because your house did. No, no. You still owe the bank that money. Right, and you gotta find a new place to live. Exactly, so very, very scary. The third thing you can do, if you're in a good financial spot, you're out of baby step two and three,

you got no debt, you have the emergency fund, you can raise your deductible. And that will help lower your premiums. You're willing to take on a little more risk from the insurance company, and they reward you with a lower premium. Because you're gonna have to pay a little bit more before their part kicks in. Another one, take advantage of discounts. So some insurance providers have discounts on policies

with teenagers if they have good grades or a safe driving record. You can qualify for discounts by installing certain safety features like burglar alarms or if you combine your policies. And that's the next one, is bundling these policies can save you up to 25%, which is huge. And then of course, this is the big one, compare quotes, shop around with an independent insurance broker. I know you love your buddy from college who works at the name brand place,

but he's a captive agent, so he can only sell State Farm's insurance. And so I like to shop around from the top companies, I use an independent broker to do that. And if you guys wanna learn more about this, you want a Ramsey Trusted Insurance Pro that can tailor the coverage to your specific needs, we've got a site for broker to do that. And if you guys wanna learn more about this, you want a Ramsey Trusted Insurance Pro that can tailor the coverage to your specific needs, we've got a site for you to go to,

ramsysolutions.com slash insurance, and they'll help you figure out if you have the right coverage for your situation, and only giving you what you need, and making sure that you get the best price. And man, we were just in a meeting, George, you and I, and several other of our colleagues, and it actually made me,

it gave me a little bit of light at the end of the tunnel. They said that this particular service through Ramsey Solutions has been getting lit up. People are going back and checking their policies, and then they're calling Xander, they're calling some of these brokers and saying, can we get some help? And they're getting the help that they need.

So that's, that, phew. I guess there's some silver lining here that maybe this situation is causing people to get the right coverage. So that they're protected. That's the point of insurance is to protect. As you build wealth and you're playing offense, you've got to also think about the defense.

What are you doing to protect the wealth that you're building? Because all it takes is one emergency like this. Or if you don't have health insurance and you have a health crisis, it can bankrupt you. That's right. So you've got to make sure you have the right insurance in place across several areas.

And there's a lot of trash products in the insurance world that you also don't need. And our Ramsey Trusted Insurance Pros won't steer you to those products. They're only going to give you the stuff that Dave would talk about on air that everyone needs. So this is one of those things, I get pretty passionate.

It's simply, and I've said it at Nausium, so I won't continue to beat the drum too much, but I've just sat with people who have lost a spouse, and they're older, and they look at me, and there's a very particular hollow look in their eyes, and they'll say, I gotta go to work on Monday, or I don't know where anything is. And so I beat the drum about, you gotta have a will, you gotta have a will. Please hear me beating this new drum,

all of us beating this new drum, go check your insurance coverages today. Today. And get term life insurance. If you have anyone in your life that relies on your income, that means kids, a spouse, you need term life insurance. 10 to 12 times your income. And if you're a voting member of your community,

find out about infrastructure and resources. Do we have water? Do you control burns? Do we take care of some of these things when times are good so that not if, but when things go sideways, we're gonna be okay. Because man, you don't wanna find out, standing at the end of your block,

when the whole block, I mean, just. Another reminder, this is something you've railed on, John, is know your neighbor. Know your neighbor. Be friends with your neighbor. If something goes down, can you go over there, knock on the door, and they're like, oh, absolutely. And we're so disconnected in today's world

that you're lucky to see your neighbor, let alone know them, talk to them, have their number. And that's been a beautiful thing that's come out of this, is just the level of community and people coming out in droves. People have lost their homes or helping other people who have lost their homes, and so that is, in the darkest times, we also see

the most beautiful parts of humanity. That's right, and if you find yourself in a position where you're in Vermont, you're in Texas, you're in some place and your family's safe and y'all are doing well, see if you can get online, if you can find some places where you can give, and be in support of our brothers and sisters out there in California, just lost everything, man.

Generosity is a great way to feel connected to these things that feel out of our control. Put some skin back in the game, that's right. I love it. Good stuff, John. Thank you to the Booth folks, keeping the show afloat, and to you, America. It's what I call them.

It's as good as I can say. Nicest thing I can say about those guys. And we'll be back before you know it. This has been The Ramsey Show. The Ramsey Show annual survey is live so text SURVEY to 33-789 or go to ramsysolutions.com slash SURVEY and be entered to win a $500 gift card. That's Survey to 33-789. 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 the host of the Dr. John Delaney show, Dr. John Delaney himself. The number to call is 888-825-5225. If you want to join the conversation and get your question answered, that's the way to do it. April's going to kick us off in Gettysburg. What's going on, April? Well, hello.

First of all, I'd like to say thank you so much for having me on your show. I feel truly humbled by it. That means the world. Yeah, thank you so much for having me on your show. I feel truly humbled by it. That means the world. Yeah, thank you. Back before Thanksgiving, I discovered your show and I started listening actively. And I thought, you know, my whole setup of how I did money and business was very much off. And I thought, I got to start rearranging things and get on the baby step. My husband and I are on the baby steps. We secured the first step and we were also getting, I'm sending you some of your advice about having all of our accounts merged.

So we had put our savings and our check in account together in both names and my husband had had a separate account that he'd had for probably about 25 years. And I told him, I said, you should really put me on that account. This way we can, you know, put some money in that too. And it was a good thing. I started listening to your show because it really helped me discover really what was going on. I'd always been pretty active,

proactive with my own money as much as I could be, as much as I knew how to be. But on the second of December my husband had called about his other account which the longest time it had been pretty dormant I think he had exactly he had a hundred dollars and 26 cents in there for the longest time and the bank had told him that he was overdrawing three thousand,000. And he of course called me immediately and told me, how can this be? I said you need to call the bank back and ask what's going on here. So he called the bank

and they had told him that the teller or whatever had given out $3,000 and it got written off his account because his account was one number off from a customer that had it withdrawn from his account, which really made no sense to us. We couldn't understand how. You're telling me they like fat fingered the wrong account number and withdrew his account

by negative $3,000. $3,000, but it gets even crazier what we've been going through with it, because they said that this had happened back in May of 2024, and here we are in December, and they'd said, well, we closed your account in July, July 8th, and we were like, we never got notice of this. And my husband wasn't as proactive with this other account because he figured. Clearly. Oh, it's there. I don't have to worry about it.

And I just thought, oh no. So we'd gotten a letter from them saying, even a copy saying we're sorry, there was a mistake. And even showing us the teller's number and the individual's name of who got the money, but it didn't solve our problem. They said, the bank then told us they would send us a check for $100.26, which is what my husband had in the account, and he told them, I'm not doing business with you folks

because this is nuts. Okay. But they had put my husband into check systems and also gave him a negative credit report across the board and we were just like, I can't believe this is happening. I feel like you guys have been burning too many brain calories on this. Yeah, way too many. You take the check, you dispute it on the credit report and we move on with our life and we never do business with this bank again.

But you know, that's not all though because we got the check for hundred dollars and twenty six cents we thought okay it's over we're done they're gonna fix it that's not what happened then December 19th they sent us a check for two thousand eight hundred and ninety nine dollars and seventy four cent and we're like what's going on here and a paper saying that you know your stone-check systems you can deal with this with them and we're like what so I contacted an attorney no because it's bad the two thousand eight hundred ninety nine dollars and seventy four cents with a hundred dollars and twenty six cents you come to three thousand so

they were still making us look like we had a black eye my husband Okay, we were like what's going on here talk to the bank about that They they told us oh no we can come and eat will even come to your house and pick the checkup I said I've never heard of stuff like this before What is it a big is it a big big big bank? Is it a mom and pop? Now it's a big bag. Yes So here's exactly what's happening. I'd be willing to bet, my truck's not very nice, but I'd be willing to bet my truck this is what's happening.

They're a humongous bank. One teller either screwing with the system, but more than likely he made a mistake, he or she made a mistake. And they doled out 3000 bucks to the wrong account. Fine. There's no person at a humongous bank. It's all automated and I can almost guarantee you that whatever email address your husband signed up on that account 15 years ago, whatever, he's got emails from that bank that were

automated and just cranked out or he got letters that he just didn't open because he knew he had a hundred dollars in that account. Everything on those big banks is automated, automated, automated, automated, even the refund check that accidentally got automated to you guys. And so A, stop doing business with a big bank, that's why I like a bank, I was texting my banker today, right?

I like that, I like having their cell number. And I'm an old Luddite when it comes to that kind of stuff, but I like knowing the person to call. And like George said, you guys are wasting way too many brain calories on this You don't need to get an attorney you need to dispute it with the credit report We did and they did send them a letter and they said they're still gonna clear it with check system So we're waiting for that to happen. Yeah, they will it's all it's you're just dealing with a bunch of zeros and ones You're not dealing with people

But here's the thing. I'm gonna go back You're not dealing with people. But here's the thing, I'm going to go back. Companies make mistakes. Big, big systems make mistakes. That's why we tell everybody, check your stuff every month. Well, we had moved and we had given our new address, but nothing had ever come here. And the old address.

We are your husband says he did. He actually changed his address with the bank. I don't think he did. Yeah, not only usps, but did he change it with the bank? He says he did. Yeah. Yeah, but probably not right Always said he did I know I don't think this is worth fighting with him I don't think this is worth fighting about it, but you know what I mean? It certainly makes you feel a certain type of way. It's very jarring and shocking. That's right. This could happen.

$3,000, it's like, wow, how did this happen? It sat there for so long. It's just computer on computer and a humongous bank that's worth $2 trillion. They're just gonna write it off and go, it's not worth, it's not worth, they've done the actuarial table. It's not worth their time to mess with $3,000 They just peg your credit and they write it off and they move on none of this is malicious or personal

It was just someone who is inept. Yeah, it's a it's a it's a system Well, I can say I'm just glad that I did tap into your show Proactive with checking good and also don't I don't let money just sit around I want my money to have a goal and a purpose. And so if it's not your checking for bills, put it in a high yield savings account. Okay. Have you done that yet?

No, I haven't done that yet. Yeah, get paid on it. I'm just getting started. Like I said before, Thanksgiving. Just discovered your program and just getting started. So here's the deal. Can I flip this whole thing around for you? Sure.

You're awesome. Thank you for saying that. You're awesome. You started digging into some challenges and you drank the Ramsay Kool-Aid. Welcome to our cult. We're gonna hook you up with Financial Peace University. You and your husband can watch that.

We're gonna pay for it. And we'll hook you up with every dollar app that y'all can share together. And y'all can start keeping track with all of your money. So hang on the line here, we'll get you hooked up, but let's flip this whole thing around. Wow. Y'all caught a $3,000 error on the banks trying to fix it for you. That's amazing. That's awesome. You're getting back on the right track. So I'm glad y'all started digging into this stuff because now we're on the right path.

Focus on the future. This is the Ramsey show. Hey, what's up guys? It's Jade Warshaaw and I'm just going to cut to the chase. If anyone knows about paying off student loans, it's me. Okay, my husband and I had $460,000 of debt and $280,000 of it was student loans. So I know the pressure that you feel when you have that debt weighing you down. But I also know there's a way out because we did it and you can too. Getting out of student loan debt

starts with taking control of the situation and Laurel Road can help. Laurel Road offers a free 30 minute consultation with a student loan expert to go over your repayment options and help make a plan based on your specific situation to get your student loans paid off fast. Okay, truth be told, refinancing is not the move for everyone, and my advice is that you should only consider

it if you can get a lower rate or a shorter term. But if refinancing is your next move, I think it should be with Laurel Road. They offer low competitive rates and terms that could help you pay less over the lifetime of your loan. Plus, they offer interest rate incentives like an auto pay discount. So go to LaurelRoad.com slash Ramsey to find out more and schedule your free 30 minute

consultation. That's LaurelRoad.com slash Ramsey. Laurel Road is a brand of KeyBank National Association. Hey guys, what's up? It's Jade. Look, let's be real. With everything that's been going on. Staying on track with your money gets tough between bills, trying to pay off debt, saving

money. Honestly, it's a lot and I've been there. That's why I'm excited to tell you that Dave Ramsey and I are hosting a free live stream on January 23rd to help you take control of your money in 2025. Plus Rachel Cruz and George Campbell are also gonna join us for a live Q&A where you can finally get your money questions answered on the spot.

And check this out, you could win $4,000 in cash. It's a giveaway. Imagine what you could do with all that money. All you've got to do to enter the giveaway is to sign up for the live stream. That's it. So go to ramsysolutions.com slash live stream and sign up today.

Welcome back to the Ramsey Show. I'm George Campbell here with Dr. John Deloney. What up? AAA8255225. Don't be shy, give us a call and we'll talk about your life and your money. The call is toll free. Who needs tolls these days?

When's the last time you made a non-toll free call? We were at a meeting earlier and someone's like, who still says toll free? I don't think most of the people on this. Think if you're under 30, you don't even know what that means. Here's what it means, that I paid per text when it came out. Like you got this many texts a month

and if you sent one extra text, so you could get a text from somebody you're dating like, but do you love me? And then that next text costs you like $30 because you'd gone outside of your text. Or to call somebody not in your zip code, you had to pay for long distance. I had a long distance card.

I think we should go back to paying for texts and calls, especially calls, make those more expensive. No, especially texts. You call me, let's get off the phone as soon as possible. No, calls are free. Human to human connection, free. Text message, you have to pay $8 per text. Then we'd say, stop getting this.

Yo, what up, how are you? Emoji, George liked this text. Stop, I'm done with it. LOL. All right, here we go. The Ramsey Show question of the day is brought to you by Yreify. Student loan debt is a swamp

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the letter Y, r-e-f-y dot com slash ramsey may not be available in all states. All right today's question comes from Kimberly in Washington. When I was a child my parents stuck out a whole life insurance and a Gerber grow up insurance policy on me. Together they're worth about $50,000. I'm 28 now married married with no kids, and my father is handing off the insurance payments to me to assume now. Aw, what a great gift. Hey, I bought this thing for you.

Now you get to keep paying on it. Now that you're older, you don't have any kids, so you can pay. But now it's sentimental. You know, it's like, oh, but you had that when you were just a baby. It was Gerber. You'd hold your life insurance policy and play with it.

The squished up pears in a jar with your face on it. So insane. These monthly payments added together are around 40 bucks every month. I don't know what to do with these. My husband and I are currently on baby step two and easily able to afford these payments. I just don't know if they're worth it.

GK, what do you say? No, I'd get out of this. I know, but it's so, the warmth and the memories. But my dad took it out for me and I wanna honor his, no, stop, you're a grown adult. You're not a Gerber baby anymore. They're worth about 50K. If that's the cash value. You can chew now.

Opt out, hit the, you know, surrender the policy, take whatever cash value has built up, and then use that money for literally anything else. Invest it, pay off your debt, filter it through the baby steps, but I would not continue to pay this monthly premium built up and then use that money for literally anything else. Invest it, pay off your debt, filter it through the baby steps, but I would not continue to pay this monthly premium for a subpar product.

You can do way better on your own and instead take that money and if you don't have a term life insurance policy, start that. So get term life in place and then cancel the whole life policy and that term life policy will be way cheaper with better coverage than your whole life policy, and that term life policy will be way cheaper with better coverage than your whole life policy. I don't know how these work. Is there a diminishing, like, so if it's a $50,000 payout,

if she cancels it and takes whatever cash is in there. Well, you lose the death benefit, you know, the face value of the policy. So let's say the face value of the policy was $100,000, but the policy is worth 50K right now, cash value. That was built up over those 28 years So the face value doesn't change but the cash value will build up over time and it can deteriorate Because sometimes you know all the commissions and fees you have to pay can then eat into it

So they're gonna take your cash value to pay the premiums if you can't pay yes So there's no way out of this thing just surrender surrender it and realize that it was a very kind mistake. It was a well-intended mistake for your parents to take this policy out. And reminder, life insurance is not for babies. It's meant to replace your income to protect the people you love. So a baby doesn't need life insurance unless your baby is a prodigy actor that is the breadwinner for the family. Sure, you can get life insurance for your baby.

But anyone else, not for you. And also, I'm feeling more and more now, George, on my show, we got some data that this particular Christmas, jillions of people are canceling their families. So-and-so voted the wrong way, or so-and-so made me... Listen, that's a whole other show. But Kimberly, on behalf of your dad, I guarantee you that when your mom found out she was pregnant and told your dad, your dad got

excited and he wanted to think about your future and he went and talked to his insurance person, he went and talked to his retirement person, and that guy or that woman gave him this advice, and he did the best thing that he was told to do. So he's a good man trying to take care of you when you were born, that's awesome. And now that you've got more information, and you've got different advisors in a couple of knuckleheads on a podcast, now you know something different. So good for your dad for looking out for you when you were young.

I wish you'd gotten some different advice, but you didn't. And here we are, let's go make the next right move and high five your dad for loving you this far. Absolutely. And if anyone out there is interested in term life insurance, the people that I trust, the people that John trusts, they provide it for our families.

Go to zander.com and get term life in place 10 to 12 times your annual income. You can do a 15, 20, 25 year policy depending on your stage of life. But the goal is to be self-insured after that policy lapses. So 20 years from now, we're set. We've been following this Ramsey plan,

investing, getting the house paid off. So we have our own nest egg that replaces this insurance policy, but get it in place today. It's very affordable and a great product and Xander will shop the top companies for you. And one more double click. Yes, Xander's a sponsor of the show. More importantly than that, Xander's who take care of my family, my wife and kids, George's wife and kids.

Like this is who we use in our house. I trust these folks and I know them on a personal basis. And so I like standing behind them. Absolutely. good word. All right, let's go out to Sam in Charleston. What's going on, Sam? Hey, good afternoon, gentlemen. How are y'all today?

Doing great, how are you? Good, good, good. I do have a, I've got a question. It's in regards to my 401K. So I have a 401K from a previous employer with about, just a little bit shy of 500K in it. Haven't worked for them for you know about five years but my question is I'm thinking about

possibly rolling it into a Roth IRA to avoid the taxes when I retire and I'm just kind of wondering what kind of tax penalties am I looking at and is it even worth doing at this point? Well it's not it's not gonna be a penalty it would be a conversion and so you're gonna have to pay taxes on that five hundred thousand in order to convert it to Roth And so that would be the only time you would do that is once you're in baby step seven with a paid-for house Are you at that spot yet? No, sir. No, not yet. Okay. So what I would do though is roll it over do a direct roll over To it. Is it all the money traditional, 401K?

Well, it's kind of half and half. So I've got traditional 401K, and then the other half is straight company stock. So I mean, the return on that stock has actually been really good. Last year alone, I reaped a 25% increase in it, just because of the stock split that we've actually had. Okay, well I'm telling you right now,

it's actually really good. It's a risky plan and I'll tell you, the market overall did 24%. So you could do that across, if you just invested in the top 500 companies in America through an S&P 500 fund, you would have seen a 24% return. So I would move out of those single stocks. I don't know, are those inside of our retirement account

or is that just non-retirement stocks that you could cash out? No, I could definitely cash it out. Okay. That's fine. So the traditional 401k, do a direct rollover to a traditional IRA. That way you don't pay taxes on that. Okay.

But that way it's in your control. And I'll just have to pay taxes after, or when I get ready to retire, as I withdraw, correct? Exactly, or you can convert it before then and pay the taxes. You might do that strategically a little bit per year versus doing all 500,000, but that's up to you and your tax pro and financial advisor.

You can dig into the numbers and see when that would be worth it once you're in baby step seven, completely debt-free house and everything. But the single stocks I would cash out and know that you will pay taxes on that. Hey Sam, I'm going to ask George a question on your behalf. Is that cool? Sure.

So George, if you have $500,000 in a traditional and you're going to do a backdoor Roth and roll it, do they take that, the taxes out of that 500, or do I need to have a check that I can write the cash amount? Do you get what I'm saying? Oh, I see. Well, you're actually rolling it into another retirement account, so you would need to have the cash.

So that 500 is gonna go 500 to 500, but I'm gonna have to write a check for. The taxes out of that. Okay, so then I can just pull it. So the conversion, when you get to 500,000, you're gonna have to have a chunk of money. Yeah, you could do that with non-retirement because you're actually cashing it out,

turning it into dollars, so stocks into dollars. And so then you could take a portion of that to pay the taxes. So this is where, that's why it's a baby step seven thing where you need to have saved up all the cash to cover the tax bill. But they're not gonna pull it from what's being held.

Exactly, but it's a great question, Sam. You've done really well, man. Way to go. This is the Ramsey Show. question Sam you've done really well man way to go this is the Ramsey show statistics show that half of Americans don't have enough life insurance or they don't have any at all I don't understand this John why don't people want to take care of their family they think they're not gonna die or something well I used to be one of those guys I didn't even think about it and one of my buddies

said hey the only reason to not have life insurance is if you hate your wife and kids and I immediately went and got term life insurance That's a gut punch for decades Dave. I've sat across people who've lost a spouse They've lost somebody important to them me too. They don't know what to do next. You're gonna have a crisis here You know, you got two options while you're sitting and talking to a young widow She's concerned about how she's gonna invest all this money properly and not mess this up or she's concerned how she's gonna eat tomorrow. That's exactly right. These are the two options.

It's saying I love you to your family. Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander.com or call 800-356-4282. Hey guys, I've got a big announcement. George Campbell and I are bringing back Investing Essentials, our two-night virtual event, deep diving into investing and

real estate. Learn step-by-step how to get the most out of your 401k mutual funds and real estate investments, because there's no better time to get the most out of your 401k mutual funds and real estate investments because there's no better time to get the clarity you need to invest with confidence. Watch live on March 4th and 5th. Get tickets today at ramsysolutions.com slash events. Welcome back to the Ramsey Show. I'm George Campbell here with Dr. John Deloney. If you missed it, we announced our two-night virtual event, Investing Essentials, hosted by Dave Ramsey and yours truly, George Campbell. We know that investing can be overwhelming, it can be confusing, and a lot of you are getting your investing advice from a 60-second social

media post. Not the way to do it. So with this virtual event, we're going to walk you through how to maximize your retirement plans, how to choose the right mutual funds to get the most out of your money, how to invest with confidence. Plus Dave Ramsey will unpack his personal playbook on real estate investing, explaining how he made millions in property investments

and how he did it debt-free. And I'm telling you, this is stuff that he's never talked about on the show. It is straight nerdville. There's formulas, there's graphs, there's charts, there's ups and downs. Friends become enemies, enemies become friends. It's a beautiful story.

So check it all out. It's happening March 4th and 5th. It's completely virtual. You can watch from home two nights. Tickets start at 199 bucks. Get yours today at ramsysolutions.com slash events or click the link in the show notes if you're tuning in on podcast or YouTube.

Here's what I love about this. This is where America gets to meet the Dave that we know. And we know, and he would never say this, on the show, Dave's like, ah, you know. I'm just a hillbilly. Dave is like good will hunting. And Dave has explained- He solved the formula on the board.

To me how bond rates are to I remember I've been around academics my entire life some of the smartest minds on the planet about a singular sliver and I remember listening to one of his explanations on a whiteboard I was like I don't know what he's talking about so here's what I love about it everybody on the internet is just like you need to do this and this and this. And if you poke one centimeter into their bull crap, it just turns to ash, it turns to dust. Cause it's not real.

They have no substance behind what they say. It just sounds good, cause it gets clicks and views. That's exactly right. Dave has lived it. Dave's lived it, but not only that, he could show you how the math works and all the things he does, sounds like he's just ripping it off the cuff, he's not.

And so, unfortunately over the last 10 years, Dave's advice has kinda gotten dumped into, in certain platforms, into just another swipe up, right? Just another Instagrammer who's, this is him going, I call. I'm telling you exactly how I do it and why I do it, and here's the math, and it's astounding. Can I be honest, we had to pull teeth to get him to do this,

cause he said, nobody wants to know this stuff. It's so nerdy, like no, and then people went, no, we want to know. It's the biggest event we've ever done. We want you to go deeper, and so that's why we created this event. Awesome, I love it, I love it, I love it. Whether you're just getting started with investing,

or maybe you're at that step where you want to become a real estate mogul, you're going to get something out of this. So join us, go to ramsysolutions.com slash events and join us for investing essentials. Amanda is in Harrisburg, Pennsylvania up next. What's going on, Amanda? Hi, Dr. John.

Hey, George, I'm excited to pick your brains today. Pick it. All right, so I wanted to know what you guys would think of me going back part time after my maternity leave is over. I just had a baby last month. Wow, congratulations. How's it been? Thank you. Is it first kid? Oh, it's the best. Yes, third kid. IVF baby took us four years and we are so happy to have him. That's wonderful. So why do you need a couple of dude's advice on this? I just want to make sure that we are,

that you guys think we're financially okay. I watch want to make sure that we are, that you guys think we're financially okay. I watch you guys every single day and I was like, I'm going to call in the Ramsey and see what they think before I make this decision. So let me ask this, if money was no object, would you just stay home with baby and not work outside of the home?

Yeah. Okay. Yes. But you're saying, hey, I might have to work part-time in order to make the budget numbers work. Correct. And we are in baby step two, so I just wanted to run things by you guys, see what you thought, and I'm gonna take what you say and run with it.

Okay, before we give you the numbers, can I ask you one personal question? Of course. I'm gonna ask you a question that you're not allowed to answer, and so I'm gonna ask you to be brave on account of the millions of new moms who are listening to this too, okay?

Okay. Often there's an identity crisis when it comes to, I used to be a professional, I had this, I really, I had a great career, I found a lot of purpose in that career, but I really wanna have a family, I wanna have a baby, and then have this baby, and you tell yourself a story, I've gotta do this,

because I'm gonna really wanna do this, and then you have this baby, and you're at home for a few weeks and then the creeping or a few months or a few years and that creeping, I really found some purpose at work too. And then you get in this, there's this, there's an entire ecosystem designed for one thing, to make moms feel guilty so you have to buy stuff. But then you say or think the words,

I kind of want to go back to work, and then it's like, oh, well, if you were a good mom, you would stay at home all the time, or I can't believe you left your job. So tell me what you want to do. Forget the numbers for a second. If you could, would you just want to stay at home forever? I would love to stay at home with my baby.

Okay, so this is a... I also have a farm, so I would like to dedicate time, dedicate time to that right now I can't really help out with that dude. Yeah. Yeah. Oh, I get the farm. That's awesome. But so this is a math problem Yes, okay that that super helps me. All right, great. So let's play this out as if you're at home not working What is the income coming in every month? If I wasn't working my husband makes around 65 to 70 thousand. All right and what are your monthly expenses? $2,500. That's it? That

includes food, utilities, shelter, transportation, insurance, clothes. That's amazing. Yep. So why can't you guys do this today? We could, I guess I feel a little bit guilty. There it is doing the gazelle intensity. Since October of 2023, we've been able to pay $89,000 of debt off. Amazing. What's left? Everyone told me that Dave Ramsey was outdated, but I mean, it works. He is old, but he's not outdated. Yeah, it works.

Okay, so how much debt do you have left? We have $27,000 left. We are throwing another 10K. We're pulling it out of our stork mode that we did. So we're paying another 10K off next week. So then we would have $17,000 left. Okay. Yeah, we stork-mended for three months

and was able to save up $20,000. We've been going hard. So 17K, how quickly will you guys pay this off with you being home? With me being home, well- We're talking six months from now, you're debt free? It's actually, we're thinking by June, we could do it. Amazing, that sounds a lot like six months.

I nailed it. Okay. So six months from now you're debt free. Now we're working on the emergency fund. Can we save that up in another six months? Probably three and a half. Wow. Okay, so we're talking before the end of the year,

you guys are debt free with a fully funded emergency fund. You've freed up the debt payments, which was how much? What were you guys paying per month or currently? We were paying over $6,000 a month in debt. What? Using, yeah, I was working a lot, my husband was working extra. Okay, this is when you had two incomes. That makes more sense. I was like, that's more than your take home pay. Okay, great. So here's what I would do with your husband tonight.

Go to every dollar and craft a new budget just using his income, going, how is this gonna work? Do we have margin left over to save and invest and give on top of that once we're debt free? Great. And guess what? If it comes down to it and he goes, I need to work a little more in this season, that's fine.

Or if you need to work five hours a week because you want to and it's gonna help, that's fine. Or if you need to work five hours a week because you want to and it's gonna help, that's fine. You get to choose. But what I wouldn't do is give up the dream because of guilt or because you feel like. Do this out of your values. And if your values say, I wanna stay home with this baby, then figure out what must be true financially to do that

and then make the sacrifices necessary. And can I tell you, Amanda, unfortunately unfortunately you are in a moment in your life where there's not a move you can make where you're not going to feel guilty. Or that someone else won't judge you for it. That's the world you're in right now. And so if you can exhale like Georgia said and do what's best for y'all, and I want to high five you, you worked three years like maniacs to get to this exact moment when you know what you can do, whatever y'all want, whatever you want.

And just knowing, oh, if I go back to work part-time, I'm gonna feel guilty for leaving my baby. And if I stay at home, I'm gonna feel guilty that, quote unquote, I'm suddenly not a breadwinner, which is silly. I don't have marketplace value. Yeah, yeah, yeah. You have existential, like, your value is astounding but but you're gonna you're

gonna have a feeling about it and so you're gonna have to practice doing the next right thing for a season also pick up my buddy Nia Ruck RUCH she has a new book out called the power pause which is about this exact moment for when you're staying at home and you're crafting a career after that I haven't't read it yet, it's been sitting on my desk, but the reviews are astounding. It's called The Power Pause. Pick up that book and I might you might not feel so alone after reading through that, but I George... I'm gonna suggest one more John, because my wife stayed home and struggled with this Amanda. Read In Praise of Stay-at-Home Moms from Dr. Laura. That one

was very very comforting. Look at you shouting out Dr. Laura. That one was very, very comforting, very firm. Look at you shouting out Dr. Laura, the OG. The OG. The OG. So I hope that helps you. It's the right choice if it's the right choice for you. So just move forward, don't look back, don't think about what if, and crunch the numbers to make sure you can do it. But I'm telling you based on napkin math, it's possible.

This is the Ramsey Show. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsysolutions.com slash insurance.

Welcome back to the Ramsey Show. I'm George Campbell here with Dr. John Deloney. Call us up at 888-825-5225. Hey, the Ramsey Show Annual Listener Survey is now live and we wanna hear your favorite parts of the show, what you like, what you don't, what you wanna hear more about, whatever it is we wanna hear from you.

And there's two ways to participate. If you're willing to help us out, text the word survey to the number 33-789, that's 33-789, or visit ramsysolutions.com slash survey. If you're listening on podcasts or YouTube, just click the link in the description. And if you sign up today, you'll be entered to win a $500 gift card. So that's worth it.

You give us our opinion, you get to change the future of this show, and you might win a gift card. I'm gonna call that a win. And also, say nice stuff about us. Yeah, don't go in there just to trash John, all right? He gets enough of that. Or George. He's, he works hard on his hair, and so it's just not a good thing to fit in the survey.

If nothing else, there we go. Exactly. Let's go help out Christy in Houston, or as John calls it, H-Town. H-Town, what's up, Christy? You have to say it like that, apparently, Christy. How are you doing? Hi guys, how are you? I'm doing great. What's up, Christy? You have to say it like that apparently, Christy. How are you doing? Hi, guys. How are you?

I'm doing great. What's going on? Yeah. So I was hoping I could get your advice. My husband and I bought a home about two years ago, and we did not realize the extent of repairs that it needs and the area is a lot more unsafe than we anticipated. So we're planning on selling the home and moving to an apartment.

And so we just wanted to know if you guys think this is the best option for us right now. I hear no red flags. If you wanna move, you wanna move. You made a bad decision. It didn't end up working out. There's no harm in selling it and renting for now until you figure out what's next for you.

What would it sell for in its current condition? Our realtor says it could be hit or miss. He said a quick sale would be about 230. If we left it on, it could be 250 and upwards. We just won't know until we list. Okay, what's the urgency? Is it very livable now? Are you guys safe?

Can you stage it, market it, do all the right things to try to get the most bang for your buck? It is livable now, but maybe a couple months ago, we had to do some floor work ourselves in order to make it livable because of the rod in the foundation. So it's not completely fixed. There's areas of the house that I would probably avoid, but it's not unlivable. There's areas of the house that I would probably avoid,

but it's not unlivable. It's not unsafe. I mean, we could have listed and get a decent amount. What'd you pay for it? We only owe, we got 223, but it's a home for my father. So he gave us a gift of equity. So we owe 181 on it right now. Okay, so you'd probably walk out of this thing

with 20 to 40 grand if you're lucky, after fees? Correct. Okay. And you would just, do you guys have any debt right now? We have $1,000 left to pay, hopefully by the end of this month. Amazing. Do you have any savings?

We don't, so we would be starting, other than the $1,000, right? We would be starting our emergency fund. So you'd leapfrog to baby steps four, five and six, where you're debt free with a fully funded emergency fund. You'd rent and then beyond that, I'd begin saving up a down payment. And your next purchase is gonna be very different.

You're gonna do it out of a place of strength. You're gonna know what you're getting into before you get into it. You're gonna choose a better neighborhood. You're gonna choose a home with less problems. And so I feel good about you guys selling this thing. And do you have a good realtor? Do you trust them?

Yes, he's actually a family friend. So I've known him since he was about, since I was about 12 years old and I'm 30 now. Okay. Well, you can trust them and they can be a terrible realtor. Are they really good at their job? Are they gonna get you top dollar for this? I believe that he would do every effort.

Okay. To make sure that we did, yeah. Awesome. And we have a whole real estate home base. If you wanna check it out for more resources on this, you can jump on ramsysolutions.com slash real estate. And there we have articles, how-tos, calculators, courses, you name it to help you guys

through this home selling process. But it's a hard lesson to learn, Christy, but you guys are getting out of this thing mostly unscathed. I mean, you're safe, you're going to make a little bit of profit. I'm going to call that a win and a lesson learned. Yeah, and I guess to free you from any existential dread you have, if you had bought this house and it was the greatest move you ever made, it's still okay to sell it.

If you're all ready to move and you want to downsize, move to an apartment for a season, knock your lights out. So either way, I think there's a lot of emotion in it, George, and it's like, it feels like I'm quitting. We gave up on the dream. Nah, man, you learned, you learned. No one to quit. We thought we were gonna be house flippers and we hate this and so we wanna back that thing up

and get out of this, awesome, knock it out, go do it. Love it, all right, let's go out to Laura in New York up next. How's it going, Laura? Hi, thank you for taking my call. Sure, how can John and I help? So my husband and I are in credit card debt of about $60,000 and I wanted to know the best way to pay it off.

Woof. Do we, I don't know. What'd you spend the 60 grand on? It's just over years, over years of just. Living on more than you make. Exactly. So. How old are you two?

We're thinking 54 and 59. All right. Okay. And you wanna know how to get rid of the 60K? Yes. What were you thinking about doing? I have a feeling you had some ideas. Well, we were thinking, do we take out a consolidation loan? Do we transfer them to credit cards with a 0% interest?

No. Keep going. This is fun. I'm having a good time. No. So I don't know. I'm having a good time. No, so I don't really know, that's why I need to know. Don't do any of those things. So here's the deal, there's a few things you can't do, and I'll tell you what you can do. What you can't do is move the debt around, that's a consolidation loan.

The other thing you can't do is take out more debt to pay off your current debt. That sounds as insane as it is. So looking to a HELOC or borrowing from retirement, these are not options. So if you said these are off the table, what are my husband and I going to do to get rid of this debt with our current savings, things we can sell and our future income? That is the only way out of this thing instead of just feeling like you did something and creating more problems down the road.

Okay. So what's your household income? Monthly, it's, let me see, about 18,000 a month. It's amazing. Laura, 18,000 a month? So here's, you know what this tells me? You guys are living high on the hog right now.

You're spending 25,000 a month, even though you make 18. That's how we get into 60 grand in credit card debt. So here's what you're gonna have to do. You need to chop your lifestyle down to nothing. As in we put food on the table, we cover the utilities, you cover the mortgage. Do you guys have a gigantic mortgage? What's eating up 18 grand?

Um, well, our credit card bills and no, our mortgage I think is about 3,000. My husband has that information. So you have $15,000 non-mortgage income every month? Right. And it's disappearing into what? Because the credit card bills are how much? What's the minimum payments on 60 grand in credit card debt? So they're all different kind of cards.

I know, but you added up the payments. How much are you sending to the lender every month? Is it 800 bucks a month? 4,000 a month? I'm not sure. My husband pays the bills. I'm sorry, I didn't have all this information. So Laura, I can hear it in your Okay, you need to be able to have all this information. So Laura, I can hear it in your voice.

You need to be a part of this because your household is running without you, but you're responsible for the fear and the stress in that house. You get what I'm saying? So right before you do anything about HELOC, that kind of stuff, you got to sit down with your husband and say, as your wife, I am scared every night I go to bed because I don't know the state of things. And if he's a good New York husband, I'll say, I got it, it's under control, it's fine.

And you have to have the courage and hopefully he's got the courage and you have to say, I need to walk alongside this thing, I need to be with you. This is us, we're in this together. Do you guys have anything in savings or anything you could sell, any other property,

non-retirement accounts? No. Nothing. Do you have anything saved for retirement? Yes, in our 401Ks. Are you guys currently investing? Yes. Okay, so your husband's gonna need

to get on board with this, but if you guys paused all of your investing and you lived off of a very small portion of your 18 grand What if you could throw 10 or 12 grand of this debt every month? Guess what it would be gone in four months five months done Okay, that's the solution you don't owe anybody anything y'all are rich you don't need a consolidation loan a HELOC You don't need to borrow from retirement You need to just start using your income to your advantage and using it to knock out the debt. Sometimes people make this kind of money and they think they don't have to pay attention

and then you look up and say, you can out earn your stupidity for a long time. How do we earn 60,000? You gotta pay attention, right? You gotta pay attention. And this is literally a six month problem and it's all gone. It's all gone. But I think this is a relationship issue. I don't know that he has the same urgency as she does. It's all gone. And I think this is a relationship issue.

I don't know that he has the same urgency as she does. He's not feeling the same way. Correct. That's gonna be the tough part, not actually getting out of debt. Once you get them on board, this thing's gone. Hey, check out the rest of the show on the Ramsey Network app, go get it in the app store or click the link

in the description to keep enjoying more of the show. Hey, what's up guys? Episode two of 90 Day Money Makeover is available right now on YouTube. Hey, what's up guys? Episode 2 of 90 Day Money Makeover is available right now on YouTube. This series follows real people as they take on the challenge of transforming their finances and their lives in just 90 days. In this episode, watch as they face new obstacles, celebrate wins, and push forward on their journey.

And of course, I'll be walking alongside them every step of the way. Okay, now here's a little sneak peek of what the new episode is all about. -♪ Me and Dara, back in November, have a new son, a baby boy. We have $87,000 in debt. I've been in debt since I was like 18 years old.

-♪ I gave birth to him. I knew. I said, I cannot leave him with someone that I don't know. I don't care if we're eating rice and beans, Sean, I told him. There was no going back. When you guys called him to the Ramsay show, it was like, I think that we should push them harder. Baby Jonathan being born is a wake-up call for us to finally change. I can't go on another month. Wake-up call. You know, the next 20 years, it's important. You know, we gotta get this right.

You want to pay off your debt. You want to get your time back. You want to get your home. Nothing usurps those three.