The Ramsey Show - Discipline Today Can Rewrite Your Financial Future

Episode Date: February 17, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fear One's Credit Union Studio, this is the Ramsey Show. I'm Jade Warshaw next to me, Rachel Cruz, taking calls about your life and your money for the next couple hours. So if you want to, you can get involved by calling AAA 8255-2-2-25. In the meantime, go to the phone lines where we have Lisa, who's in Cincinnati, Ohio. Hey, Lisa.

Hi, thank you all so much for taking my question. So we have been served papers on an old debt that we now are having to either go to court and fight it or settle. And so we don't have the money for a lawyer. So we've been using chat AI to kind of guide us through. And so far it's worked. Like, you know, we've been able to prolong it a little bit. So, but now, you know, I need guidance. I need real guidance on what to do and where to go.

How long ago was this? I'm sorry. It's okay. Take a deep breath. I'm so sorry. That's okay. That's fine. I'm sorry.

I'm just nervous. And then it's just very emotional. Yeah. Stressful. Stress. Stress. Yeah. Okay. So the debt's from 2007, or we took the loan out in 2017 and then like around 2019, it's a so-fi loan. They gave us 50 grand. It was great. We reconciled debt. It didn't work. And so around 2019, I had a baby. And then right around the corner of 2020, all of a sudden I was home and had to quit my job. And so it was just my husband.

And we were kind of like we missed a couple of payments, but we would catch up and then right around the corner of 2020. Like they just sold it off like it didn't matter. And so we've been fighting it ever since. They served as papers December 16th, I think hoping. Like we only had 20 days to respond. And I think they were hoping that with the holidays, we wouldn't be able to find a lawyer. and we wouldn't know what to do. We just wouldn't respond.

But we did. We got it together. We put it in chat. Chat gave us some information. We sent it. They sent us back discovery. Most of it redacted. And so our next, like we were going to send another request for more discovery,

but instead we just sent them a pro se if they would settle and save costs for $7,500. What company owns the debt right now? Do you know the name of it? Yeah, LVNV. And what's the... LV-N-V? Yeah. Okay.

So, Lisa, I need you to just understand who you're dealing with because I do think that always helps the stress level, okay? When bad debts, whether it's loans, credit cards are sold, they sell them to a company. The company, you know, repackages them with other loans, sells it to another company. and it's been probably passed around, okay? So you're dealing with someone who's sitting in a cubicle who's been on the job for probably three weeks and we'll probably end up leaving in two months because the turnover rate with collectors is constant.

It's constant, okay? So it feels scary and it's a big number, right? So we're going to have to address it, but I do want to take some of the stress off of who it is. It's someone who honestly has probably the worst job on the plane. who is calling and serving people old debt. And again, the intimidation factor is so big, but the reality of it's not, Lisa. So we have to deal with it. So I'm not minimizing the situation.

But I do want you to just realize the person you're talking to or who even wrote the letter to serve it. It's probably not even going to be there in 60 days. It's going to go on to someone else. And then the company, envy or whatever. LNV, NV. It's, okay. Okay.

Okay. There you go. Yeah. You know what, Lisa, I used to, back in the day when the credit card companies used to call me and debt collectors used to call me, I used to just imagine that they probably had more debt than I did. Otherwise, they wouldn't be working there. And it made me feel a lot better. Like it just, it made the whole thing a lot less intimidating. Have you offered, so you have no money right now. Have you offered to do any sort of payment plan? So in the past, like the past couple of years, we did a payment plan for, like, they'll do one for like 12 months. And then after that amount of time, they'll hit you back up and they want the whole amount. Sure. So explain to us what's going on with your money now that over the course since 2017 and even 2020 on,

where we haven't been able to kind of stack together any money to make any sort of deal on this or keep the payment. plans going. Tell us what's going on now. So now we're doing better. Like our income is getting up there. In 2020, it just wasn't. What is it today? What's your income today? 204. Okay. And is this the only debt that you have or do you have other debts? Okay, tell us really quickly about the other debts so we can understand how this fits in. So we have 58,000 of like other debt and cars. Tell me the two. Tell me the cars. What do they each total?

One is 11 and one is 15. And then the other debt is I think there's two loans like small loans and then credit cards. And we've been paying it down. Like it was much worse than that. So there is a light, at the end of this tunnel. Like $58,000 sounds really, really bad.

And then we have a mortgage. And our mortgage is $175,000, but our house is worth like $450,000. Yeah. Okay. So I just, with the numbers you're telling me, I don't see a world where you're not setting up a payment plan. And in the meantime,

stacking up a bunch of cash to settle. I think a lot of your trauma and shame about this lives in the past. because it sounds like today you have the ability to start getting this cleaned up. Unless you tell me a reason that you don't see that hope. No, I do. Yeah. I mean, do you think that we should settle? Yes.

Yeah, you just have to have the amount of money to settle. And depending on how, I mean, how long it's been and how long, you know, considering this is a, you stopped really paying in 2020, it's been six years. So they're probably not expecting to really get paid, Lisa. I mean, at the end of the day, they're probably, they probably, they probably, they probably, probably assume you guys are broke. So if you could, 50% and settle this. Yes, that's what I was going to say. If you could get maybe 15,000, and that means you guys are going to have to limit your life. Like, you guys are going to have to be working extra. You're going to limit life sale. You're going to do whatever you can and you're going to get $15,000 as soon as possible. And if you can hold them off till then and then see if they will settle, if you can somewhat get maybe back on a payment plan and then have an amount of money and say, this is what we have. What are your cars worth? The one that's 15,000. if you were to sell it, what could you get for it? Maybe 20 or 22. You know what I'd do?

I'd sell one of these cars and be done with this today. Hypothetically. I'd sell one of these cars. If you can get 20 for it and you only owe 15. Go get a $5,000 car. Use the $15 to settle. Uh-huh. Is it paid off or I'm sorry?

Yeah, I would do that. I would clear that out, get more money per month, then I can add that up and then I can settle this debt very quickly. That's what I would do. It's going to be a major sacrifice. But the way you cried when you came on the line, this has been going on long enough, like far, far too long. And I would be going to great extents to make this better in the next,

I'd give myself 30 days to make this happen. And if that means selling cars and driving junkers, then that's what I'm going to do. This show is sponsored by BetterHelp. If you feel like you're the one holding everyone else, else together while you're slowly falling apart, I want you to hear me for a second. If you feel stuck or anxious or overwhelmed, yet you find yourself always saying, I have to take care of everybody else and I'll get to me later. That will work for a while until it doesn't. Talking with a licensed

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H-E-L-P dot com slash Ramsey. All right, let's go back to the phone lines where we have Marie, who's in Phoenix, Arizona. Hi, Marie. Hello. What's up?

Hi. I have a little bit of an issue that I need a solution to. Okay. I was scammed about 10 years ago. I lost all my money in my house. Like all my jewelry. Holy smokes.

Oh my gosh, Marie. Yeah, it was considerable. And that's why I'm still working. But when I came clean to my daughter, we decided on a plan. And we opened a joint chicken account, and she has taken all the money, my pay my Social Security every month, and gives me an allowance for food, gas, medication, etc. When the rent is due, she transfers that money, any kind of car repairs, insurance, she does an extra transfer. We had managed to save almost $200,000 during that time, which is remarkable.

Oh, my gosh. How much of that's yours and how much is hers? It's all mine, but it's all in her name. I don't have access to it. Okay, yeah. She doesn't send it. She sends me screenshot. It's all still there.

Good for you, Marie. Well done. But I want this arrangement to stop. I've asked for several times, and she's just... not inclined to do so. She still doesn't trust me understandable. But, you know, I would like to have available to me when I want it. Okay.

And I don't know. One time I contacted an agency for elder abuse in my area, and they told me to take her name off the account. Well, I didn't do that. I opened another account and had no money go there. She found out. She came. She was not very happy.

Make me close the account and transfer it back to the joint account. What is her, when that happens, what is she telling you? Because there was a reason that this arrangement was made. What is it that she's afraid that you're going to do? She's afraid that I'm going to get pulled back into that scenario. And she does not want me to be pennulous again. And I can understand it. The scenario where you were skil,

scammed? Yes. Are there things, Marie, that you want to do with your money right now that she's saying no to? Well, my lease had ended last March, and I wanted to buy a condo or townhouse, and she wasn't on board with that. She said the only, well, that would happen if the property was going to be put in her name, which I didn't have a problem with that, but it ended up I had to move to another place. and I have released now with an apartment. So, am I out of line to ask to be able to use my money,

or should I just pick it up and continue with our arrangement? You're not out of line to ask to use your money. There's another side to this that I want to know more about. Is she keeping you from, and here, I'm just going based on what you said. It sounds like something was so drastic that she was brought in. to help you. And she's probably looking at this. And I'm not saying that she's right.

I'm just trying to get both sides. She might be looking at this going, you know, the best predictor of the future is the past unless something has changed, right? So she might be looking at this going, I don't see why I would expect anything different if I let her have access over to this money again. So you might have to explain to her,

here's why this is different. Here's why this is not like it was before, because you said she's afraid I'll fall back into my old ways that got me scammed again. So if you know that, my thought would be I need to help her understand why this is not like that anymore. And if you feel like, if you genuinely feel like maybe you've changed or it's different, then have that conversation. And then if not, then I'd be talking with, I might have to bring a lawyer into it and say, hey, this person is not giving you a way to mind.

There's such a fine line, Marie, of loving, you know, someone in your family by helping them financially like this and then controlling them. And so I don't know from her sake if she was on the other line. Yeah, exactly. You know what do you mean? The story she would give us. Because my hope would be that it's out of love and care for you, Marie, that she says, did you, were you good? Were you good with money besides the scam that happened 10 years ago? When you were raising her, how was money?

I was born and raised in Germany. My husband was in his area. He's passed. And we've always lived frugally. Okay. Okay. So really, was it just this one scam that caused all of this? Yeah, but it was massive.

It was like $600,000. How did it happen? Well, I met this guy on Facebook. He pretended to be someone he was not. And it took almost three years. Oh, that happens more than... Yeah, it's very rampant and it's very sad. Yeah, I'm so sorry.

And I'm glad she did that to help me to protect me. And that was 10 years ago, Marie, 2016-ish? Yes, it happened. It started in 2015. So what I would do to probably keep the relationship good with your daughter, and again, I'm going to assume good in this call that she is doing this out of love and protection for you is I would sit down with her and I would have a roadmap to say, hey, this is what I desire.

At the end of this road, I want full access to my money. I want to be able to purchase a condo because rent keeps going up and up and up. And I want to be able to have a place to live that's modest that I own. And whatever that looks like for you, Marie, what the end of it looks like. And then I would bring her in and just say, hey, what steps need to be taken for you to rebuild trust? because it sounds like you guys have just been functioning in this and she may have decided already, I'm just going to do this until forever.

For the rest of my mom's life, I made that assumption. Yeah. So we want to break that for you. And some milestones, have a couple of milestones. And in the next 12 months, what are things that you can be doing that would give her the confidence? Because that feels reasonable to me.

And again, I'm assuming, Marie, this isn't, I'm saying all this, putting you in a good light, that you're being responsible, that you're not off to the side. You know what I mean? I don't even have access to online banking. She sends me screenshots,

and I keep a little bit cured. Yeah, so there's a point after 10 years, if there hasn't been other mistakes or other patterns. You should be moving forward. Yes. And for her sake, too, that she doesn't have to babysit you or, you know, rolls reverse, that she's your mom, right? For a season, I think that's really good.

But over time, You probably do want this deal to dissolve. But I would again, try to do it with her. And like, what's the roadmap to get there? And then I hate to say, but if she's unwilling to do any of that, I would be curious than her motivation at the end. That's my question. And I'd want to make sure that everything's above board.

Yes, on both sides. So then how do we rebuild the trust? That's what I would ask her. How do we build the trust? And how do you do it in a way that can still? preserve the relationship because if it really is there's like I said there's probably more to the story on her end more to the story on your end Marie but there probably is um reason for both of you to feel the way that you feel yes and so I like your idea of making that roadmap because I think in

the end that's going to be yeah if if the eight months or 12 months happens then you got to start pushing yeah and maybe there's a transition even for the adult daughter to say hey the next step would be that she does have access to her money, but your name's still on the account. So you can see it, see what's going on. Yeah, that she can actually log in to her own account, right? I'm like, that's fair. That's very fair.

So, like, what are small steps that we can take to create more independence on Marie's side versus just having this hard black and white wall of, like, either you do it or I do it? Yeah, yeah. It could be at both ends for a season two, you know? Yeah. But, yeah, that's hard. And I feel like, Marie, too, to your daughter's credit, like, we get the, calls, we get your daughter calling in and saying my mom has been scammed.

How does 600,000? Yes. What do I do? How do I step in? Because she feels gullible. She feels really vulnerable. I feel like she could fall into one of these again. And we probably would get for that advice. Sit down with your mom and say, Mom, I want to be able to help you. Yes.

You don't mean so. And probably what the daughter is thinking is, oh my gosh, if something like this happens again, I'll have to take care of you and I don't have the money to do that. So all of this is really being done out of just of abundance of caution for the future is what it sounds like. Yes, that's what I would hope. I'm going to assume the best here. Assume everything's on the up and up. Sorry that's happening, but thanks so much for the call. After the holidays, a lot of people start feeling budget pressure. And it's a wake-up call to get

intentional. So listen, don't fall for buy now, pay later, cell phone plans that drag you back into debt. Boost Mobile keeps it simple with no contracts and no non-stop. cents. Keep the phone you already own and pay just 25 bucks a month forever for unlimited data, talk and text. That's real long-term value and real peace of mind. So budget like you mean it, and go to boostmobile.com slash Ramsey today to make the switch. That's boostmobile.com slash Ramsey. Restrictions apply. See boostmobile.com slash Ramsey for details. All right, we have Sydney, who's in Omaha, Nebraska. Hey, Sydney, you're on the line.

Hey, guys. So my question today, and I know you've taken this call a million times, but how do I persuade, that's not really the right word, but how do I inform my husband is that we no longer need the whole life insurance policy that his parents took out for him as a child? Oh, okay. You don't need it because you think you should. should do term life or you don't need it because you guys are self-insured just in where you are financially.

We each have term life policies on one another. Oh, okay. So you'll have term life. Yeah. So we're good to go. What's his reason for keeping the whole life? So we actually talked about that recently. It just gives him like a peace of mind.

He will be 32 in April and the death benefit on this thing is like 17,000. Is he paying anything into it? No, it's just like growing or just sitting, I don't really know. And it's been growing since he was a kid and there's only $17,000 in it. If it's not costing you anything, what does it matter if it's just sitting there growing? Yeah, you know, that's a fabulous question, one that I have asked myself. I do know when he was a kid, his dad is in pharmaceuticals, and there was a handful of times where he would be out of work and things and they were on Medicaid.

And so I think it's just like that extra layer of security. Whereas I'm like, we could take the cash value, which isn't a ton. It's like $3,000 or $4,000. So here's. And use that. For what? Well, so I'm an ultimately paying off debt. I'm trying to win the war here rather than the battle.

But you do have that to pay off? We do. Yes, ma'am. Okay, that's more what I was getting at. Is it just like, why do we need this? We don't need to get rid of it. Or could you really use the cash? Well, here's what's frustrating, Sydney.

This is how bad of an investment whole life is. Okay, so let's just pretend that they opened it up when he was a baby. He's 32 now, okay? 32 years, it's grown to $17,000. If you put $17,000 into the market right now in 30 years, instead of it just becoming another $70,000, you would have $1.1 million. So that's how crappy of an investment. Like it's not even an investment.

Like it's not, it's horrible, horrible. So my motivation would be like, let's actually put our money in something that's working that will actually work for us and not grow at a snail's pace. And if something really were to happen to him, they're going to keep a lot of it. You know what I mean? You don't even get the full death benefit always. So it is, oh, it's such a bad, it's such a bad product. So from just the common sense perspective, I'd be like, wouldn't you want to move 17,000 over to a legitimate investment?

Absolutely. You know, not that you can because you're going to have to surrender the policy so you won't get that. But for me, I'm like, I just want to have things in my life financially that makes sense. Like this doesn't even make sense. So not only could you use the cash to start paying off debt, but also let's be smart with where we're putting our money and keeping, quote, unquote, $17,000 in a whole life policy. that's not growing, basically, is not wise. Well, what's the debt you're trying to pay off? Yeah, so a little bit of everything.

So, like I'm trying to win the war rather than the battle. So my husband, he would sleep better at night if we had a month's worth of expenses saved at all times. Is it because your regular income? No, no. It's just like, what if the furnace goes out kind of a thing? And getting rid of this whole life policy would allow us to basically share up the savings account and then immediately go towards paying extra towards our debt. How much still have in savings right now? In savings, we've got 4,400.

Okay. So go ahead. Well, I was going to ask, what's a month's worth of expenses for him? Oh, I know, six. Six. Okay. So you, in your mind, you're thinking, okay, if I cause him to get rid of this policy, which he doesn't, which he doesn't want to get rid of.

But if I take that money and give him what he wants, which is a month's worth of expenses, that's better than nothing at all. That's you winning the war. Okay. Well, winning the war would be him getting on track with the baby stuff. Right, right, right, right. And I think, I understand. I understand.

Okay. And then after you did that, and after that, he's like, now we can go Buck Wilde and pay off this debt. Is that what he's agreed to? More or less, yeah. what's the less um just like we're not obviously following the baby steps to a tea um you know that would be only having a thousand dollars in our savings but is there another is there another part that he's already said i'm not going to do that or was that really because if you're telling me this is the

only thing he asked of me jade he just this will make him feel better and then everything else we're off to the races i probably wouldn't argue much i'd be like hey do it and then maybe over time keep your crappy whole of policy because it makes you feel good but we're going to we're going to moving. Yeah. And if you told me that, I'd be like, great. But if you tell me, hey, actually, it's probably going to be, this was just one of many battles and I'm just trying to get over this hump, then I'd say we have more conversations to have. I love that you're trying to make progress. I'd probably go ahead and do, I'd probably make that deal. I'd be like, yes. If we, if we cancel this whole life policy and you want the one month there, I'm not going to fight that

battle today as long as we can go hard on this debt going forward. That might be just the peace offering you need to make in order to get this thing going. Yeah. How much debt do you guys have, to pay off? About 180. The bulk of that, my husband went to law school, so we've got about 110 there. We've got about 15 on a car, and then just shy of 14 on private loans

that he took to take the bar, and then my student loans are 37. Okay. How long ago, Sydney, did you start listening to the show and wanting to work, new financial plan, the baby steps. Yeah, last May I had heard of Dave in the personal finance class I took in high school,

and then a good friend of mine, her husband followed the baby steps, which is mind-boggling because they are Catholic missionaries. And I'm like, how? How did you, you know, do all of this? And essentially, they just followed the baby steps that helped it. Yeah. Yeah. Okay.

How old are you guys? I am, how old am I, I'll be 30 this year, and my husband will be 32. Okay, great. Can I ask another quick question? I'm just trying to get a sense of him. If you said to him tomorrow, hey, let's pretend you did the thing with the whole life policy and put the month aside. And then you said to him, hey, I've really been looking at our car. I think that, because I looked and found that if we sell it, we can make $5,000 and not have the payment anymore.

And then we can take that $5,000 and buy a junker car, right? another aspect of the baby steps. If you told him that, what would he say? So we've had that conversation before, and he's like absolutely done. So, Sydney, I hate to say it. And we don't have a lot of time, so I just feel like I got to like just say it to you. I think you guys have way of a bigger issue happening of being on the same page financially than a whole life insurance policy.

And I wish that was just it. But as we start peeling back on this, you guys aren't on the same page. and it's it's I don't want to say it's impossible it's just it'll take a long time hard for you to be the one sydney that pulls him through this process and that to make progress and so you guys need to sit down tonight and you need to tell him sidney how you're feeling and what's going on inside of you because it's not just a whole life policy that that would feel good if we if he just cashed that out that that's great you're you have 180 thousand dollars in debt like that's terrifying is that scary Oh, yeah.

Yes. Okay, so talk about that, Sunny. Talk about what you're feeling, the sleep that you're not able to get because you're stressed, you're scared if something happens to you. Do you guys have kids? We do. We have. She's almost two.

Okay. Yes. And so I'm like, the weight of this whole issue of just your entire financial picture is weighing on you. And you're trying, which I applaud you, to make a little progress here. there, but it's not going to do much, Sydney. It really won't unless you guys sit down together and say, hey, we are in a marriage and we've committed our lives to be a team together. And we're going to tackle every area of life together.

In-law issues, parenting issues, and our money issues. And we're going to be a team. The money is the problem. The debt out there is the problem. You're not the problem. Looking at him. And Sydney, you're not the problem. How do we tackle this together?

And you're really not going to make a ton of progress, Sydney, until that happens. And I would push and fight for that for you to be heard and in what you're wanting because it does not sound like he's going to do much in this process. Well, Dave, you know, on the show all the time we get calls about cars, used cars. What's one thing you want folks to know? Well, really a couple things. Number one is always buy used unless you got a million dollars. We don't buy new cars. And if you're going to buy used, number two, you want it to last. And that means regular, proper maintenance. Yeah, that's a big deal. I know when Sam and I moved from South Florida up to Tennessee, that's the first thing you're looking for. You need

somebody who can take care of your car. So when we found Christian Brothers automotive, it was a no-brainer and they've been absolutely great. We're excited to recognize Christian Brothers as the official auto repair partner of the Ramsey Show. Christian Brothers keeps things simple, honest, and transparent. Every repair is backed by their nationwide, nice difference warranty. Three years or 36,000 miles, whichever helps you more. Listen, Dave, I'm first to admit, I'm not into cars like you are, but The thing about Christian Brothers is I feel just as confident going in there, they're not trying to upsell me. I feel 100% confident that I'm going to get the service that I need. Hey, if you want your car to last and stay on track with the baby steps, trust Christian Brothers.

Go to CBAC.com slash Ramsey to find your local shop, schedule service, and get an exclusive Ramsey discount, 10% off your visit, up to $250. Yeah, that's CBAC.com slash Ramsey. See store for details. Well, tax season is upon us to get free checklists and guides that will help you file. Be sure to go to ramsysolutions.com slash taxes. All right, Caleb from Indianapolis, Indiana is on the line. Hey, Caleb. Hi there. Me and my wife are on Baby Step 4, debt free, and are looking at buying a house.

And we're having a disagreement about how much we should have as a down payment. Oh, well, congratulations for getting so far. Well done. I'm paying off dead and getting ready to buy a house. That's exciting. What are you looking to spend? So we have about 90 grand saving in a mutual fund, and a good starter house in the area is around 150 grand.

What she wants to do is to spend 50 grand. No, she wants to leave 50 grand in the mutual fund, and probably would have 30 grand as a down payment and 10 grand for closing cost. I want to use the full amount so we can have an 80 grand down payment. Okay. We do it her way. We're following your guys' rule.

The payments would be around. on 25% of our combined income on a 15-year fixed. What's the reason? The reason I'm wanting to do the full 80 grant is so that in the future we at least have the opportunity to live off a single income, and I feel like that would make it easier for a baby set six. Okay. I see what you're saying.

So you're wanting to put 80. She's wanting to put a total of 50. Did I understand that? She wants to leave 50 in, so it would be 30 grand as a down payment with 10 grand for closing cost and fees and all that. So me looking at this right quickly, your way, the payment's around 972. Her way, it's around $1,400? I believe so, yeah. Okay. And your thought is we can go to a one income household later on if we so choose. Or at least to have the opportunity of that. We don't have any kids yet, but we're wanting to start trying within the next couple of years.

Caleb, what is she wanting to do with the $50 grand and the mutual fund? She wants to leave it. What is that for for her? She just wants to leave it. She used a mutual fund as more of an investment. It feels like it would grow more there than it would in the house. She's very frugal and a large purchase is just uncomfortable for her. There's like an extra safety net for her in a way to have that available. I'm with you, Caleb.

I think that I would rather do that. I think there's more security. Once you have a home, it becomes the number one thing that you want to protect. if you ever hit hard times. And so I kind of like the idea of saying, hey, if we do this, our mortgage will be so low that even if only one of us were working, it would be okay. And that feels way more secure in my mind than having some money floating. Yeah, money just floating. How much do you guys make a year, Caleb?

Combined around 80 grand. I just got a promotion. Okay, great. How old are you all? I'm 26 and she's 22. Oh, wow. You guys are young. are so young. Okay. I always hate giving like a gray answer because I know people want like a black

and white like Jade said she would do your way. I would probably say I would lean your way to Caleb. Like if someone, we just got this question on money and marriage, they were gifted a big inheritance and they're like, should we just throw it all at the house or should we use some for investing? And we're like, yeah, just attack the house because you have all the time in the world to invest. Yes. You know, every single year you guys can open up a Roth. You can fund your Roth with work, you know, while you're working and you will be fine at retirement. So my caveats are, you sound very buttoned up, Caleb. You sound like you love running your Excel sheet and your numbers. And sometimes when we're so in the numbers and so in a formula, we forget about life.

And I'm just curious if she sees, like, we're going to have to replace a car soon. Like, we're going to have to do a couple of big purchases and having the cash available to help us do those things smoothly would be wise, right? Like, I don't know if that's the case, but if that's something that's in her head, that's good to know. Either way, either option, you guys are going to be fine, Caleb. I really do believe that. I think that you guys, you could follow the 5%, 20% down and be fine.

You could throw way more close to 50% of it and be fine. But at the end of the day, I would probably choose Team Caleb, just because I like having a lower payment and you guys just have so much time on your side to save and invest. And that and it does free up for, you know, $450 a month to save up way more quickly. So that if there was something like a vehicle or all of those things that it would be nice to have a chunk of cash for, you could do it. Yep. That's right. That's right. Yep. Or maybe you'll meet in the middle too, Caleb, you know, leave, I don't know, 25 in or something. I don't know, leave a little bit in just for her. to have a little bit of that security if she wants.

So yeah, y'all can meet in the middle and be great. But either side, I think you'll be fine. I mean, you guys are so young and you're so on target that I'm like, I think you guys, you're going to be fine. So final ruling, there's no wrong answer. But if we were forced to decide, we go with the lower payment, therefore higher down payment. Yep. Yep, that's it.

All right. I love it. Thanks for the call. That's a good one. Final answer. Final answer. All right, we've got Katie, who's in Billings, Montana. Hey, Katie. How are you? Good. How are you? Excellent. How can we help today?

Great. So I am so confused when it comes to the world of investing. My husband and I were not in debt, thankfully, and we have been able to save up about $500,000 in the bank. Wow. Well done. I contribute $500 monthly into a Roth. My husband does not have one. And the investing, I guess, you could say that we do is just in CDs in the bank at 3.75%. We have about 200,000 in that. But other than that, that's it because it feels safer to me. And is that foolish?

Well, let me make sure I understood this right. I thought you said you had 500,000 in the bank, but then you said 200,000 in CDs. So some of it's just sitting freely and some of it's in the CDs. or is that in addition to? Some of it's just in savings accounts. Got it. Okay. Wow.

Why are you guys averse to investing? What happened that made you feel squeamish? I guess nothing happened. It just, it's foreign to us. Yeah. And what you don't know can be scary. Exactly. And when it comes to retirement, like I said, I do put $500 a month from my paycheck into a Roth account for myself.

but you don't see that money until I'm close to 60 years old. Sure. A CD seems a little bit safer because it's a six-month, 12-month return. Yeah. Katie, how old are you guys? I'm 31 and my husband's 37. Okay. So just to do a little calculation for you, oh my gosh.

Are you ready for this? This is going to probably make you sick. I'm ready for it. Okay, so I just put really quickly in, if you just dropped $500,000 in the market, right? this and an average I put 12% rate of return so I'll get mad at that I'm gonna just do it for fun because it was way more than that the past couple years there's some down the years but the past couple years have been fantastic so I'm gonna put 12% average it's actually been more than that but I'm gonna just leave that and if you did that right now at 31 um by the time you're 67 if you just let this money grow

you would have 36 million dollars okay wow so if you kept it in now if you kept it in the which is averaging 1.7% interest right now. I'm going to bump it up to two because I'm feeling gracious to the CDs. You'd have one million. You'd have one million. Sure. So you're leaving $35 million on the table, Katie.

So what we have to realize is we need to understand this intimidating part of money, which is investing. And I get that. There's a lot of people use diversification, index funds, S&P 500. You know, you're like, what is all? Like, what does this all mean? So I would, because you guys have done so well, I mean, it's crazy.

It's crazy that you've saved this much. I mean, this is, it's amazing. You guys are incredible at 31 years old. I would sit down with a smart vester pro in your area. Okay. When we get off the phone, Christian will pick up and he can kind of direct you on the website, where to go. But I want to meet, Katie, meet with two or three smart vester pros in your area, okay? and I want you to get number one a feeling from them because these are the and these have all been vetted so these are great people but you're going to naturally connect and feel more comfortable probably with one or two over another right and that's really important this process because anyone that's going to help you kind of push the buttons and investing you want to feel really really good about and I would ask every question that you can think of don't feel like oh my gosh I feel stupid asking this I should know not a

that. And it actually start to get the basics and learn what does this mean. What does it look like if I invest in an index fund or a mutual fund? What types of funds are out there? I mean, there's so much you could be doing with this money to make you money. It may kind of feel risky, but at the same time, compared to what you would make on the other end? Absolutely. I think it's worth the risk that's not really even there. The ups and downs are real, but the overall picture is pretty bright. So that's what I would do, Katie. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian health care ministries is a great option to think about.

CHM is not health insurance. It's a health cost-sharing ministry, a biblical, community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital you want. That kind of freedom is big, especially if you're self-employed, between jobs, or you just need something that fits your budget better. CHM has been around for decades, faithfully serving the Christian community. And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well.

And right now, CHM's offering new members a 50% credit towards their first month of membership. Get started at CHMinistries.org slash budgets and use promo code Ramsey. That's CH Ministries.org slash budget and promo code Ramsey. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. It's still me, Jay Warshaw with Rachel Cruz, going straight to the phone lines where we got Jeff in Atlantic City, New Jersey. Hi, Jeff. Hey, Rachel, Jay, how are you? And I have to be on the show.

Awesome. We're glad to have you. I discovered the Ramsey show about six months ago. and I've been following a lot of your principles and just have a question. Got a question for you. Okay. So I'm 37 next month. My wife is 31 and we have been putting away money, investing in retirement,

investing in future growth for ourselves to live comfortably later on. And we, in our community, the children live next to the parents, relatively close next to the parents. and we have bought three residential, single-family residential homes for our children to be able to live next to us. We got three girls. Yeah, we bought three homes for our three. We want our girls to live next to us. So we bought the three residential homes so they can live a relatively walking distance to us. Okay.

How old are the girls? So the girls are eight, six, and four. Wow, you got started early with the purchases, I mean. Yeah, yeah, yeah. We definitely want to start early. and we got great interest rates. We bought it when the COVID rates were around, and the twos and then the threes.

So right now, we got tenants there that covered the rent until it's time to give it to them when we feel the time is right. And my question goes like this. My wife and I have had some hard discussions about these homes, and we've came to the conclusion that most likely the kids will not want to live because the area is changing

and most likely the kids will not live next to us. Sure, yeah. So what happens is we find ourselves an interesting position. Right now we have tenants that cover the mortgage, and we have a little bit of extra every month, like $2,200 extra from the three homes every month. And we've been doubting ourselves that this is the right path going forward

because we are thinking to cash out these three homes, sell them, cash out $1.65 million from, you know, basically the down payments we put in. Yeah, what you get out of equity, out of the three. The equity is 1.65. Take this 1.65 minus the taxes, we would have to pay on that, which is about, let's say, we'll end up with like 1-3 or something like that. Okay, yeah.

And put the 1-3 into an S&P merit fund where, let's say, 20 years down the line. I love this. Uh-huh. That grows to a huge number. Yes. And then if they want to live in X, Y, Z area, okay, here's a million dollars, go, by the house. A genius. A genius move. No, so my question is, is that the right move or should just let the house keep on being paid off by tenants? What do you guys own your, do you guys own your

house, Jeff, you and your wife, or do you still have a mortgage on it? No, we actually have a two percent rate. Yeah, we are, we own our house straight up. We actually have like 1.3 equity in our own home. Okay. And you don't owe anything on it? No, we do. It's worth about, What do you owe on it currently today? 368. But it's worth 1.3? No, no. It's worth about 1.8.

That's great. Holy smokes. Way to go. Good job. Good job. Maybe 1-9 even. You know what I would do? If you're offloading the three houses for the kids, I'd take a little of that money.

If you said the whole thing, you'll walk away with 1.3, I'd probably take some of that, and I'd pay off your house in full, and then I'd invest the other million. And you will be. And then invest your mortgage payment back in the money. to this fund for the girls. Uh-huh. Even though, now, I've been listening to Ramsey, I know you guys say you pay off that mortgage no matter what.

So my question is, I got a 2% rate with 15 years exactly to go. Even though it's 2%, pay that off? Yes, because you're the guy who would take the full mortgage payment that you were paying and you'll invest it in that, you'll invest it. I can tell that you would do it. You'd rather make 12% than 2%, yeah. Right, right. I hear that.

Yeah, and Jeff, too. But my question is, would you say, would you say, sell the three homes. That's my question. Yes, I would. You would. I would only because the reason that you said you purchased them was for your kids to live in them so that they could be close to you.

That was the number one reason. And that's the only reason I heard, by the way. And so much life. And when you told me their ages, four, six, and eight, so much can happen in that time. Number one, like you said, the neighborhood can go down. Number two, there are three different women who will have three different lives

that could go in any direction. I would never want this for you, Jeff, because I know how much you love them, but she may, she may meet a, meet a, meet a, me to, meet a, me to Mike. Yes. Moving with her husband. You don't know what I mean somewhere. Or you get a different job and you want to move. Like, there's so much life that can happen over the course of the next 18 years or so.

And so for that reason, I think you'd probably get a better bang for your buck and have more freedom with the type of investment that you were talking about. And when you told us the spreads on the rent, it wasn't all that great. Yeah, either. Right. No, like, no, we don't end up making money at the end of the year because here in HVAC breaks and your principles break even. Totally.

Your principles going down. Yes. Okay, so I have clarity on that. I have one more question. I'm sorry. I'll make it quick. No, go ahead. What is the right?

So again, I'm 37 next month. My wife is 31, 32 next month. So what is the right age to ride a will? Today. Really? Yeah, today. Because you've got, especially because you've got minor kids and there's a big part of the will that's going to decide what would happen to those kids of God forbid something happened to you and your wife. If you don't make a will today, the courts will decide that. And that is for that reason alone, there's many other reasons. But for that reason alone, I would be sitting with a lawyer today. It's a mess. Yeah. Jeff, one of the Ramsey person who I host to the show, George Camel, he has my favorite line. He's like, if you hate your family, don't do a will. because it's so it creates what would be a horrible situation your whole family trying to untangle your whole life and from the financial sense and try to figure out what what is happening financially what's happening with the girls I mean it just it can create so much stress but when it's all laid out

in a will if you go to mama bear legal forms Jeff you can do a state specific will with them your estate might be a little bit more complicated once you guys get into it because you own multiple properties and different things. So you may actually want to sit down with an estate attorney just to draft one up. But yes, I would do a will today. And I just want to applaud you, Jeff. This is such a success story, like what you and your wife have done, because we talk about changing your family tree. And that's in the way you view money, the way you handle money, the role that money plays. And when you're deeply in debt and you're living paycheck to paycheck and life is so stressful with money, that's the environment your kids grow up in.

But you guys, Jeff, have made such great decisions. Your girls not only are in an environment that's peaceful when it comes to money, but you're also going to literally live out changing their family trade. Like, if you bought your girls a home, and they never had a mortgage, and then they invested that mortgage payment for the rest of their life, and then their kids, that's generational wealth working for the good. Do you know what I just want to add one comment that, first of all, I wish I would have found the Ramsey show earlier, only found it six months ago.

but I will say that I grew up in such tremendous poverty and I'm the oldest of the family, oldest of eight. I come from the family of eight. I was the oldest of eight living in. I can't even tell you what kind of poverty I grew up in. So when I became an adult, it was such a drive to really, really, really. And when I discovered the Ramsey show, I'm like, oh, my gosh, there's a match made in heaven.

They told my life. I love that. I love that. You guys are so proud of you. Yep. And your kids, they're going to. be so much better for it. I can tell you're going to raise them to be able to actually be great stewards of this money and do exactly what you've done, which is continue that legacy for the family.

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You bet. So I make about $4,500 a month gross conservatively, monthly bills, including my car, around $3,200. And after recent divorce, I live with my parents paying $400 a month while I kind of stabilize my financial life. in that time I've lost over 180 pounds, had a major skin removal surgery. Oh, wow. I'm kind of getting back to a point where I'm feeling disciplined and focused. But my biggest concern is my daughters. So both of them have a genetic condition that's called Dicer 1 syndrome.

My youngest is clean so far, but my oldest has cysts in her lungs, kidneys, and brain. Oh, wow. I'm so sorry. And we happen to monitor that very closely. So I'm trying to find the balance where in the event of a very possible medical issue, I have a comfortable savings buffer beyond that base $1,000 emergency fund and where the balance is between how much should I have there just in case because we regularly go from Missoula to Seattle Children's Hospitals for the girls,

which is about eight hours each way. How often do you foresee going to do they have them removed every once in a while? Is that how it works? Or what's that going to look like for you long term medically? So right now it's just monitoring and making sure that they don't grow any more than they have. She's got one in her left kidney that has grown at a concerning rate. So they've got medical boards meeting on what's the best decision. I mean, you can operate with just one kidney.

But if we take one out and the other one, I've already got an issue. Yeah. How much, Chris, on average, do you think you guys are spending a month on this? Or is it every like four to five months something comes up or every eight months? What's the calendar like? It's about four times a year that we have to make this trip. And each trip is around probably $600 to $800.

Okay. So it doesn't, you don't hit your deductible. It's just straight out of everything comes straight out of pocket. So they are, so that's all travel expense in hotels. They're under Montana Medicaid. Okay, okay. They're taken care of that. Okay.

So what I would be. Yeah. So what I probably would do, because how much debt do you have? Including the car total sub 30,000. 30,000. Okay. And you're, I'm sorry, you're divorced? I am, yeah.

Okay. Is your wife, that's $6 to $800? Is that split between you? guys or is that what you're paying and then she's paying the same amount to what does that look like um i generally fund it i'm in a better financial position um and then she'll help with a hotel every other night kind of thing okay i gotcha okay um so what i would probably do because i mean jade and i are both moms and i'm like i would do anything for my kids they're they're number one paying off debt's amazing and we want you to be able to do that but taking care of our kids and making sure that's first yes

So what I would probably do is have a different account that would be kind of like the girls account, if you will. And I would make sure I have $800 in it. And then when you use it for a trip, I would pause the debt snowball, refill that, and then go back to the debt snowball. But I would have that 800 continuously in an account, even if that means pausing the debt snowball for a bit and throwing money at that to replenish that account. But that's the one I would keep consistent. And then if something changes, Chris, if you guys get a different diagnosis or you see she's going to have to have surgery and there's going to be more expenses either on the travel side or anything medical, that's when we would pause the baby. That's when we would pause baby step two and build back up a bigger emergency fund. That's probably what I would do just because it seems consistent.

Yeah. Tell me about the state paying for it. Is there an income that if you hit a certain? income the state will no longer pay? Yeah, I'm sure there is. And they go through their mom with that side of things. Okay. I was going to say that on your side. Okay. So your income can go up as much as you want and it won't affect their care. Yeah, then they still get consistent medical care with Montana. Okay, good. So on your end, I would then be doing secondary to what Rachel said, I'd be doing everything I can to blow my income up as far as I can. How long is this deal going to be going with your

parents, the $400 a month? They're very flexible, though I have it as long as I need it to get up on my feet. Okay. And what's your thought in your mind on that? I would really like to be out of there in two, three years at the absolute most. Okay, okay. And you guys just split custody of the girls? How does that work every?

50-50, yeah. So Sunday to Sunday, I have a week at a time and then they go back to mom. Okay. So I'd be looking for a side hustle or something. something that when that week that they're not with you that you can just go crazy on. Because I think for you having that fund for medical and then getting this debt paid off, that is going to relieve so much stress. Like there's enough stress with the diagnosis of this that getting the financial

side in order as quickly as possible is going to do a lot for your soul. You know? Yeah, absolutely. Yeah. Yeah, that's what I would do. That's what I would do. Yeah. I'm sorry, Chris, you guys are going through that.

It's horrible. So heartbreaking. Very tough. But you've got a plan now and that can do a lot, a lot of peace. And who you're going to be, even in the next two years, Chris, what you've done so far from a health perspective is unbelievable. Losing 180 pounds. Like you are amazing. Yes, it's amazing. So keep on the track because you're creating a whole new life for yourself, Chris. We're proud of you. So good. All right. Thanks for the call. We've got Jackson next in Boise, Idaho. Hi, Jackson. Thank you for the call. Hey, it's good to be on here. I kind of didn't expect to be on here, but this is awesome. Well, we're glad you're here.

How can we help today? Yeah, it's really cool. Yeah, so I'm getting out of the military. I'm 100% disabled, permanent in total, and so I get the VA health care for free. However, you know, I do want to have a family at some point, and I've heard a lot about like HSAs. And my kind of question is, should I kind of open up another counter,

open up, get other insurance for the sake of an HSA, or should I wait until kind of that bridge comes free? You don't have the family yet. You're not married or with kids yet? Yeah. I mean, are you just saying for the possible ability to invest in the HSA? Is that what you're talking about when you said you've heard of them? Yeah, I've heard a lot of like the tax advantages and stuff.

And so I kind of figured it'd be good thing investment-wise, but also like the health insurance thing. I mean, well, right now you're full. fully covered by VA, right? Yes. So you don't need the coverage, and your family is not here yet for them to need the coverage. And so then when you think about it from an investment point of view, it really is on down the line from other ways to invest. I would rather you invest money in a Roth IRA if you could or something like that before

I'd go to an HSA. It's kind of just like once you have it, it's very nice to have, but it's not something you have to seek out and go get for that purpose. So for that reason, I would say you're just fine as you are. Yeah, as is. Mm-hmm. Yeah. Yeah, it is a great option, like Jade said, if you're using it above health care for an investment.

But that's after you've maxed out, whether it's 401Ks, you know, Roth IRAs. I mean, all of it. It's just another investment vehicle. But at this point in life, I think you, yeah, I probably wouldn't, I probably wouldn't hassle with it because you have great health care with the VA. Okay, well, that makes sense. And answers the question. I appreciate you guys helping. Awesome.

Thank you so much for the call. It's a good question. Yeah, HSA is, you know, they're really great, like you said. They've got that triple tax advantage. And a lot of people, if you know you don't need to access the money for health, yeah, go ahead and invest it. Usually you can invest it. There's usually a minimum of like $1,000 that kind of has to stay liquid.

And then you can invest the rest. and over time, it'll just convert into a normal like IRA. You don't even have to use it for medical expenses, which is, it is nice to have that. But if an HSA is not the right, a high deductible plan is not right for you, I would not get the plan simply to have access to an HSA. That's right. Absolutely. Because saving and your emergency fund and stuff can cover some medical things that are out of pocket

where the HSA may step in and do that if you were using it for medical purposes. So there's ways around it for sure. It's great if you have it. It's just kind of another tool to invest in, but definitely not necessary and probably wouldn't move mountains for it. No, I definitely wouldn't move mountains for it. Thank you so much for the call. This is the Ramsey Show. Dave, we got a lot of calls on this show where life happens.

One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah. And that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die.

disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great. Take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money still showing up.

And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling. I've trusted Jeff Zander and Zander insurance for over 25 years, and so is my family. Don't wait. It's fast, it's easy, and it could make all the difference. Go to Zander.com or call 800, 356, 4282. Protect yourself, protect your income, protect your family. The truth is we wish that we could get to every call and every question here on the Ramsey show. But we can't. I mean, there's a limited amount of time. We have segments and we go to commercial

breaks. So if it ever seems like we cut you off, it's because you got to make that clock. But if you do have a question and you want an answer for your situation, you can always head over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. And you'll get an answer that really is the Ramsey way. So you don't have to worry about it. You know, if you go to, I don't know, like open AI, you could get a lot of things mixed in there. But if you go to Ask Ramsey, it will be Ramsey advice the way we would give it on the show. So ask your question today at Ramsey Solutions.com or just click the link in the description if you're listening on podcast or YouTube. Love that. All right. Next is Katie in

Columbus, Ohio. Hi, Katie. How can we help today? Hi, my name is Katie. I just wanted to see, I recently got a $2.6 million settlement. And I just wanted to figure out what I should kind of do with the money. Oh, wow. I have a mortgage, and I'm trying to figure out whether or not I should pay that off or not. Yeah. What was it from, the settlement? It's a lawsuit.

Is it like, but you're okay? There's nothing, is there anything we should know about you going forward, or you're all good? I'm all good. Okay. So no ongoing medical issues or anything out of it? No, not yet. Okay. Okay.

How much is your mortgage? My mortgage is $190,000. That's how much we have on the principal, and I'm at 2.75%. Okay. Is it just you, or do you have a family? I have a husband. I don't have any children. Okay.

And my husband is a student right now, and he's working on becoming an air traffic controller. Oh. How old are you guys? I am currently 30, and my husband is 31. Okay. And do you guys have any other consumer debt? Let me see. We have 105 from student loans for me. I'm a nurse. And then my husband, he's going to be about 150 total.

Okay. Great. And then, but no car payments, credit cards, anything? Cars is 25K for me. And then my husband, he only has 6K left on his. Okay. Credit cards? No credit cards. So my biggest question would be before we get to the $2.6 million. Let's pretend that $2.6 million, whatever happened to cause that to come your way, never happened. Were you already on the track to say, you know what, this debt is kind of crushing us? We need to do something about it. Had you already kind of been looking at that or kind of tell us how you arrived at calling the show?

Was it just the $2.6 million? Yeah, so, I mean, basically it's the 2.6, but in all reality, my husband, once he graduates from school, our plan was to immediately start attacking that as much as we possibly could. Okay. I've been working 60 hours a week currently, and I make about 120K annually right now. Okay, okay. So I just wanted to, before we started saying, you need to take this money and pay off the debt? I wanted to make sure, like, philosophically, we aligned on the idea that debt is no moving forward. If it gets paid off, that we're not going back into the habit of taking out debt for stuff we want.

Oh, absolutely not. No. Perfect. Perfect. Yeah. Because sometimes you can come in with a lawsuit like this or inheritance and just in one sweeping motion be completely debt-free even your mortgage, which is amazing. That's where we're going to guide you to. But it comes back.

But if that behavior, yes, hasn't been changed or the belief system hasn't been changed, you'll be right back. into debt, you know, and how quickly, I mean, $2.6 million is amazing. But yes, we just want to make sure that you can, yeah, sustain a lifestyle that still makes sense. So, yeah, Katie, I mean, what I would do is, yeah, it looks like you guys will have close to $200,000 in debts, not including the mortgage. If you include the mortgage, that's around $400,000 after all the student loans and everything. So I would pay everything off.

That would leave you $2.2 million. And yeah, there's really three things that you can do with money, and I would do all three at some capacity. You can give it. You can save it, and you can spend it. So I would look to see, you know, what are things that you and your husband really care about. I don't know if you are someone of, you know, that practices a certain faith or if there's things in the community that you guys, I mean, as a nurse, I'm sure you see a lot. So I don't know what that looks like for you, but any level of... Yeah, we go to church every Sunday.

Okay, yeah. So any level of generosity is going to be, I think, an important part of this picture just because the practice of that, I think, is just, it's an amazing thing. And it changes who you guys are. So I would be giving... I do have a question about that, actually. Yeah. And it's just because, like, and I don't mean to break you off, but basically, like, with

the other financial advisors, we talked to you, like, three years. different, but we're still trying to figure out who to kind of go with. Yeah. But everyone seems to have a different opinion on gifting money to family because they don't want it to turn into a transactional relationship and they don't want it to change the relationship dynamic. What is your opinion on that? Because my husband and I are both, you know, we both want a gift, but we want to make it

so that it's not like a reoccurring thing or an expectation with family. Yes. That's, I think it's great advice because you can easily, yes, get in. into that where it becomes a habit that Katie is suddenly so rich and we can just go to her when we need things. So is there something that you guys have pinpointed with your families, like maybe paying your parents' house off? Or like, is there a thing that you're thinking about? Or you just, okay, what is that? What are you guys thinking about? So my in-laws, my parents are unfortunately not around. But my in-laws, we were thinking about gifting them with a car.

Their car is on its last leg. Yes. And they need a new one. And they're so I was thinking about that. And then also getting, you know, giving my brother some money to, he's got some health issues going on as well. Yes. So.

Yeah. I would be okay with that with some very communicated boundaries around it. I think just the idea of it just happening, I probably be a little bit more intentional with it. So I probably would sit down with his parents and just say, hey, we've been put in a position that we're able to do some giving, and we would love to help replace your car. here is I almost would

this may be sound too controlling I almost would go ahead and just buy it 100% I was going to say instead of giving them cash and a very modest car yes but you know but a good car right like go spends some money on it do your family members know about the 2.6 million do they know this happened and that you got a large sum of money not at all and I don't plan on sharing that I think that's great

that's what I was going to say so I think you guys can kind of like sneakily come in and help them in that way. And then your brother, if he has outstanding medical bills and you guys want to pay some or all or whatever you decide, then again, if you can not just give cash, pay the bill, pay the bill, pay for the pay and get the actual car, you know, that kind of thing I think is helpful. But I think that's the way to do. I, yeah, that doesn't like freak me out.

It doesn't freak. I think you know the person. Yes, that's a big deal. Yes. of character that someone has where they maybe have the propensity to take advantage or they have the ability to, you know, you give them an inch and they take a mile. And if you know these aren't that sort of, this is not that sort of person, then I would do that in two seconds. Yep. And I think it's a great blessing. Yep. Really good. Yeah. And then. Thank you very much.

Yes. And then investing some to Katie and spend some. You know, if you guys need some upgrades on some things or you want to take a great trip. Yeah. Leave some room for that because you don't need to be work in 60 hours a week anymore. You know, I wouldn't change your work. I would still be contributing and still be going to work. I think that's just good in general for a person. Yeah, you don't want it to take away your sense of purpose. Yes, that's right. You know? Yep. So I could see spending a reasonable amount, like you said, on things that increase your day-to-day quality of life. Get Spotify premium if you haven't already. I mean, come on. Get some of the enjoyment of life. I think that's great. Set up some of your lifestyle a little bit.

Yeah, and just be really intentional, be aware. And then again, be sitting down with an investment professional that you guys feel good about and invest a good bit of this money because this will take you guys on into retirement. Yes, into retirement and completely change your life. So I hope that it helps, Katie. Our question of the day is brought to you by why refi. Defaulted private student loans don't go away by ignoring them. But you can face them with a plan.

Why refi helps you refinance into low fixed rate payments built around what you can afford so that you can take control and get back on the baby steps. So go to y-refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey may not be available in all states. Today's question comes from Daniel in California. He said I'm 28 years old and have $100,000 in student loans, car loans, credit card, and a 401k loan. My girlfriend and I have lived together for three years and recently got engaged.

Would it be better for us to elope and then save? for a formal wedding once my debt is paid off, or should I pay off my debt while she saves for the wedding? She has no debt. I'm currently working both full-time and part-time to knock out what I owe. Oh, man, this always hurts my heart. I was on the show with Ken because Ken is like, not anti-wedding, but he's like, just don't worry.

I know. It's fine. It's one day. It's one day. I love a great wedding. Like, so it always hurts my heart when I'm like, just go a lope. But I would. Daniel, after three years, go tie the knot.

And then you guys can save up and pay for a great wedding. So I would go down to the courthouse, make it what it is. And then you guys save up for a fun party. Yeah, I would do it. So I would go get married. But again, it kind of hurts my heart a little bit because I love a good wedding. I do too. She's going to be the one that feels this.

Yes, probably. You know? that but got a hundred that that's going to take a while even if you're working a part-time job and you know what I mean I'm like that's going to be another two and a half years possibly depending on what he makes so I wouldn't wait that long to get married I would go ahead and get married I wouldn't unless her idea okay I could talk about this a little bit more okay go um if her idea of a formal wedding can be done for a lot less than what I'm thinking in my head like you guys can cash 10 grand yeah what you think of 10 50 15? Yeah, I was, yeah, I was thinking 15, 20, but if you can, if you can cash flow it, both of you, and maybe it's like she, you know, with her job can contribute half and you contribute half, I might, I might could be okay for that. And you could do it in like six months or something. Yeah. Um, just because I just feel like she's going to be like, wait a second. I know, she's got to be bought in. You're telling me that I can't have my wedding because of your

debt. I agree, like sitting in this chair. I know. It's right. But, If Sam Warshaw came to me back in the day and was like, first of all, I have $100,000 in debt. And for that reason, we're just going to elope. It's so true. I'd be like, I'd take it off the ring. She'd say, nope. I don't know if I would. That's a good point, though.

I'd find for it. If you can cash flow this, but I wouldn't wait. I wouldn't wait longer than five to six months, though. I would do it quick. I would do this quick because you can't have a really nice party. It doesn't have to be in secret, I guess, is what I'm saying. Right. You can have a really nice party and then save up and do another really nice party later on.

Yes. So who is tough. If you can save for it quick, again, four to five months. Yeah. Then you can, yeah, do the wedding. But if you guys are just like, it's not a big deal to either one of you, then I would, yeah, then I would elope. And then you guys can, yep, put your incomes together, pay off that debt faster. And then, oh, man, that's hard.

It is hard. But, yeah, you heard, you heard our ideas. Yes. gave you two options. That's good. All right, we've got Richard, who's in Bowling Green, Kentucky on the line, right up the road. What's going on, Richard? Oh, doing good. Thanks for taking my call. Yeah, you bet. How can we help today? Okay. I found you guys about a year and a half ago. And just a year ago, I'm lucky enough, I guess, are thankful enough. I found me a really good job. I make 140 a year. Good. And we kind of made a boo-boo. We bought my 16-year-old at the time. a car and she's like, I'm going to work, I'm going to pay for it.

La-la-ba-blah. Well, she, after about six months, decided she wasn't going to work. Now the car is mine and the wife's name because she was 16 and can't take it alone. Sure. How much? And, well, at the time, it was 23 and now it's down to 14. We have paid it down to 14,000. Okay.

My question is, should I spell it or should I keep it and just finish pay it all? Because I'm in my debt snowball right now, and it's like the bill of, I'm working on right now, it's three more that's above that. And then I'll be putting all towards that car. How much are you and your wife's vehicles worth? What'd you spend on those? Well, I spent 20 on mine and it's paid off, and I spent like 28 on hers and it's paid off. Okay. And how old is your daughter now? Well, she just turned 18, two months ago. Okay. I mean, you're in the parameter, like for your income 140, we'd say no more than half.

of your annual income and vehicles. So you're right there, 20, 28, and 23. You're right at the cusp a little bit over. But since the others are paid off, I'm not going to be too much of a tyrant about it. You could keep it and pay it down. She's 18 now. Yeah, she just turned 18.

And have you guys talked to her about taking over the loan? Try to, but it's like talking to a brick wall. Ooh, I'm not liking when I'm hearing about this. She doesn't sound very grateful. Yeah. Right. Yeah, she's got this attitude that she's entitled to it. And I'm like, Oh, then sell it in two seconds. Right. She ain't put up with that. Well, and you put your daughter in debt, Richard. I don't like that either.

Right. So there's out of the principle. Yeah, if you guys were baby step seven, you had tons of money. I would say if you wanted just to pay for it and then say it's yours, whatever. I don't like the idea of you setting her up with debt. So I think you's, sit her down and say, sweetie, I'm so sorry. We messed up. We, you said, we had a boo-boo. Right. So you said at the beginning of the call. Right. Not only is the deal that we had made disintegrated, which I don't blame her in town. She's 16. Like the frontal part of her like brain isn't even formed yet. So you're putting a lot of responsibility on a 16-year-old, which was not very smart. How much is the car now? Right. It's right out $450 a month. That's a lot. How much could you sell it for? If you sold it, what would you get for it? Oh, I don't have no idea, to be honest with you. I mean, 100% I wouldn't know.

Like I said, it's... Yeah. So I would look it up. I owe 14 on it. Yeah. I mean, in a perfect world, it's not upside down. In a perfect world, you'd get 18 and you could buy her a $4,000 car and just call it like a, hey, we did this. But yeah, but I would say the two things. Number one, the deal that we made was a bad deal for you. And the deal we made now goes against the value system on which I think that you should live financially.

And because of that, in good faith, I can't keep you held to a loan because I don't think that that's the right way to live with your money. And so it's in our name. And we're going to sell it. But she is 18. So I don't even want to give her the choice to take it on. No, I would not transfer this over. Rachel makes a very good point. On the one hand, you guys were in the wrong for bestowing this life of debt in front of her.

We see that now. And we see that now. And then she also, it sounds like, I don't know, just deriving from what you've said, she's kind of hardheaded and is not really doing what you guys are hoping for in this moment. So I would not want to reward that behavior. I like what Rachel said about kind of going and saying, hey, you know what? We said this. That was our mistake, our bad.

However, you also haven't shown that you really want a vehicle. And because of how you're acting, it's very hard for us to even fund one the correct way, which is in cast for you at this stage. So I would kind of play both sides of that field. She's going to be mad, mad, mad, Richard. So listen, that's the thing about when you set up a boundary, you put up the boundary, and then regardless of what that person, how they react, what they say, that's on them at that point.

But you probably know from data points that it's not going to be great. But I really do believe in the long run for her. It's going to be better. It's going to be better. It's going to be better. and she is going to remember the lesson. If you, to me, there's something so big when a parent apologizes and it's like, I made a mistake and here's what I did.

I never should have done that. That sticks with a kid for a very, very long time. So she's going to remember the fact that my parents went into debt and they looked at it and realized it was the wrong thing. And I almost would be willing to take back my former thing about. not getting her a car because what I wouldn't want to happen is that that lesson getting lost in the part where she'd never longer has a car. Do you know what I mean?

So there's part of me that I'm like maybe I would give her the $5,000 car cash. Yeah, I probably would. And then she remembers the bigger lesson. And if she's real pissed, she can go get a car loan on her own and make her own decisions at that point. Yeah, that's true. That's a good one. Thank you for the call. Sorry, Richard.

I hope it goes well. We'll be praying for you. Welcome back to the Ramsey show. We're here in the Fair One's Credit Union Studio taking calls about your life and money. I'm still with Rachel Cruz. I'm still Jade Warshaw. We're doing it. We're still doing it.

All right, going back to Dominic, who's in Springfield, Massachusetts, I'm guessing. On the line. What's up, Dominic? Hello, Jade. How are you? I'm good. How can we help? Did I get it right?

Is MA Massachusetts? Yeah. Okay, perfect. Yeah, so I just have a quick question for you guys, not too long. So I have a lot of money investing. So like I'm a rookie when it comes to investing. I just started. I hired an investor back in September.

And I'm watching my investments go along the way. And it doesn't look like my investments are doing as great as I wish I could. And the other thing is too, like I think I want to like cash out my investments. And because like a couple years down the road, I'm trying to buy a house and move out of my parents' house. And I just don't know if I'm should I cash out the investments or just kind of hope. for the best. Are they retirement? Is it like IRA, Roth IRA type stuff? What's it invested? Well, no. So a lot of my, so yeah, no, I do have a 401k, but I wouldn't use that for the house. So I have a lot of my money in the S&P 500. Okay. I have $97,000 in what's called Riverbridge.

And then I have another $135,000 in another little fund that they have. It's like, it's called a structured note. Okay, and they're just tax, is just a taxable brokerage account? Yeah, one of them is like kind of like a brokerage account. And then the other one is, it's a, I guess like a, I'm not really so sure how to put it. The river bridge is what's, it's a Navidia and then Google, it's an investment and. Okay, so they're single stocks? Yeah, yeah.

So it's like not just, it's not a single stock. It's like a lot of them. Yeah. How many together? How many single stocks are in that fund? I think it's about like 10. I'm not entirely so sure to be honest. Okay.

Okay. So part of me, what I don't like about what I'm hearing is you're not sure about what you're invested in, which is always a red flag for me because you should understand it enough to be able to explain it back in a way that is clear. So part of me, and I think you understand facets of it, obviously. but there's obviously facets that maybe you're not sure of. So that's thing number one that I'm thinking about. Thing number two I'm thinking about is the fact that you said,

ultimately you're trying to buy a house, and I'm wondering what your timeline is for that, because that does play into whether or not I would keep this or what I would do with this money going forward. So what's your timeline for the house? Within like the next couple of years, I'm really interested in moving out of my parents' house, and I was thinking whether I should rent,

or buying. I am looking more towards the buying because I feel like I can afford it. I do have a good chunk of change. Yeah. Yeah. How much are you making a year? I mean, my full-time position, I make like 75K a year. Yeah.

How did you save up all this money? I mean, it's like almost $235,000. Yeah, no, I'm a really frugal person. I don't really spend my money. And before, too, I started working full-time. I had a, like, back in high school, I was working. little part-time job. I pretty much always saved money and never really spent. Good for you. Well, if you're thinking about there's two parts to this. So first off, based off of what you've said,

the way this money is invested, it's not invested the way we would tell you to do it here, the Ramsey way. It sounds like your 135 is probably mostly in bonds or something like that with the structured note that you have. And then the others in index funds, which is fine. We would teach you if you are going to invest your money to do it in mutual funds across four different types. And it doesn't sound like you have it invested that way. So I would think about rolling that money into the proper investments versus cashing it out, per se. Now, if you were ready to buy a house immediately, I would say you could go ahead and pull it out. But if you really are thinking, hey, this is two to three years down the line, what I'd be doing is I'd be

meeting with a smart vester pro and saying, hey, I have this money invested. the way, the reason that your return is not very great is it sounds like you have a lot of bonds with that 135 invested. That's why it's probably going very slowly. And I would say, I don't like the way this money is invested. I don't believe it's invested the money, the Ramsey way, and that it's getting me the best rate of return. And then I would have them roll it over into better funds. And then, yeah, I just let it sit and grow for the next however many years until you're ready and just understand that when money is invested for five years or less, you may or may not, You know what I mean?

That five-year point is kind of when we see like there is a locked-in, your money has grown. There's a higher rate that it will have grown by five years versus if it's less than five years. There's more fluctuation within that. So just know that. And even like the River Bridge account, like I would almost feel more okay with that if you said there were 50 individual stocks in there. But the 10 feels really limited, a lot of risk. To be honest with you, with the River Bridge, I think it is a lot. more stock. So I

hire, so I don't do this by myself. I hired a professional. He's really good. I like him a lot. And I, he answers all my questions when I ask him. But your returns aren't, your returns aren't what you said they should be. That's a red flag for me. Yeah. Yeah. I don't know if it's

really necessarily his fault. I guess it's just the stock market. Just what I'm, well, it depends on what you're invested in. That's the whole point. So if you're invested the way we say, like your bonds are going to move slower than anything else. That's kind of like what you transfer to when you're almost ready to retire. So you could stand to be more aggressive in your approach. That's just me high level looking at it

based on what you said. Yeah, looking at some funds that are, you know, aggressive growth type mutual funds, you probably would see more return. But also, you know, it is the long game. So I wouldn't, but I would make sure that, yeah, from an investment strategy perspective, like what you're saying, Jade, there's a right way to play that long game. I agree. I mean, don't get me wrong. If you love this guy and you think that you just need to spend more time with him to understand, great. I'm not going to tell you to divert, but. Yeah, it might even be that just not really giving it a fair chance because, like, I used to just do like CDs, which is like guaranteed. And then once you go to the stock market, you're like, whoa. You know what I mean? Totally. Yeah, yeah, that's a big jump. I'm just not really, yeah. Yeah, well, and I think, you know, over the next two to three years, Dominic, I would use majority of this to put as much down.

on a house as possible and then have that and then re-energize the the investment machine, if you will. So I think you're, yeah, I mean, I would look into it, but two to three years isn't going to make or break you because you're probably going to use this for the house. But I would just from a knowledge perspective, like what Jade's saying is sit down and really get a good grasp on what all this is. And check out our investment, you know, philosophy on the four types of mutual funds. And again, we're even okay with an index fund that's just over. you know, the broad scope if you just want to put your money in that too. But the diversification piece is really, is really big. So that's what I would ask him about that other fund. But I'd get

out of, I'd get out of the bond market personally. Yeah, I would too. It sounds like I was just kind of looking at it a little bit. And it just sounds like it's way more predictable. There's an income facet of it. There's a lot of protection against the downside of the market. So it sounds like this is just very, very conservative for you. And at your age, you probably don't need it. You don't need to be. Yeah, you got time, buddy. So get out there. Test the waters is what I would say.

I love that, Dominic, though. Keep the habits in place, though. The fact that you've saved that much is so impressive. We just wanted to go as far as possible for you. Yes, yes, absolutely. Thank you so much for the call. How many times have you started January saying, this is the year I'm finally going to get my money under control?

But then months go by and you still feel broke. You work too hard to keep. living like that. Look, there's only one way to move the needle on your finances this year. You've got to have a plan. So start by downloading every dollar. Every dollar is way more than our world-class budgeting app. In 15 minutes, we'll build you a personalized plan to free up extra margin in your budget and use it to beat debt and build wealth. You'll find thousands of dollars on average just the first day. And you'll get new steps and new lessons every day that help you stay on track and create unstoppable momentum.

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Hey, thanks for taking my call. So I'm kind of at a loss. The man I married, we've known each other four and a half years, and we got married four months before he passed away. Oh, my gosh, Susan. Anyway, I've always had a soft landing in my life, and there's always been somebody. This is the first time.

And again, there's a little bit of a soft landing. He left a little life insurance. I've sold a lot of assets that I have, and it's helped. I am self-employed. But what I found myself, and I went through a grief, support group thing. And one of the things they talked about was grief spending. I'm like, oh, that's not me.

Sure enough. It was about four weeks ago, I realized, oh, my gosh, I'm a grief spender. I mean, I was just going over my numbers. He passed in August. And since September, over my budget, I have spent $33,800. dollars. Now, some of that was on tires to the car and, you know, oil change and stuff. But the majority of that has just been on memberships, house cleaners, gardeners, handymen, and dog stuff and just stuff I don't need or didn't need to buy. And every time, and I just

empathize with myself, when I would click that little buy button on Amazon, it was Oh my gosh. Are you using the insurance money for this? Or is this something you're going into debt? No, fortunately, no. I'm not going into debt. So I currently right now in savings, I'm down to $20,000.

And three months ago, that was $57,000 in there. Okay. Some of that I've been using to live on. I need $2,000 a month to live on in my house. My business requires $2,000. And it's sustaining on that sound. So I'm not worried about that. but I do need my business to kick it up a notch so that it can support my business and me.

But that's going to take time because when he got sick, I did back off clientele, et cetera. The 2000 a month you live on, what's that cover? Do you live someplace where there's no mortgage or tell us more about that? It's a rent and that's utilities. Rent is 1450 and it's gas, lights, trash, water, and internet. Okay. And that's going to be gone in 10 months. Well, yeah, if I keep going in the way I'm going, yeah.

Yeah. I am getting more inheritance next week. There's another herentance check coming. How much? That'll boost that 20 up to 50,000. So it'll be 30,000. And then there is another probably 25,000 in assets that I need to sell. Okay.

That I haven't gotten to yet. I'm working on it. There's just, an awful lot to navigate. Yeah. And then there's another pension of his that I haven't applied for yet. And that's about $18,000. So when all said and done, if I spend no more out of the savings in about a month,

there should be $95,000 in that account. Okay. Yeah. So do you feel like the counseling is helping with the grief spending now that you've kind of pinpointed it? Because sometimes part of the problem is like realizing, oh, gosh, that's me. and then you identify it and you can kind of start to work through it. Yeah, I finished the grace counseling back in December,

and I didn't realize my problem until about three weeks ago. Okay. Now, back in September, a friend was booking a cruise. I said, sure, I'll book that cruise with you for February. So two weeks ago, I went on a one-week cruise. It was 500 bucks. I say it was only 500 bucks. Yeah, that's not bad for a nice, you know, balcony state room,

but I didn't calculate the $100 parking fee and the $400 I had to board my dogs. Yeah. Plus, I spent another probably $500 or $600 on luggage and clothes. Okay. None of that was in my purview back in September when I booked. Sure, sure. Yeah, they don't, yeah, they sneak up. No, Susan.

Go ahead. Well, I was going to say, first, give yourself some grace because I do think when you're in a season, especially of grief, our bodies, we're looking for a way to cope, right? And if we're not aware about or not intentional about it, it can go, we can start medicating sideways, right? Whether it's drinking, gambling, shopping, like whatever we're doing to have a level of stability, we search out for. So I don't want to fault you for that because I think, you know, that's a common. It's a very normal. Yes. So now I think the fact that you've realized that now we can put some things in place.

place to help with it, to actually create some friction between you and buying things. So I would do, you know, from a low level, I would delete Amazon Prime. I would not have my card saved on any website to make it an easy purchase. I would take off Apple Pay off of your phone. Like put some actual logistical friction between you and spending any money. Okay, that's like one thing you can do. another thing that when you're coming off of, and I wouldn't say that you're necessarily are addicted to spending, but a lot of people, especially in 12th step, they say to redirect where you would normally go and spend or normally go and get a drink. Instead, do something helpful, right?

When you feel the need to spend, go for a walk. When you feel the need to spend, have that friend that you call and you tell her. I'm going to call you every time I'm tempted, right? It's this redirection of your actions that actually can. be very helpful because you almost train yourself to have a new set of habits. So, yeah, those are a couple of just things I would probably start today. And then, of course, the budget and kind of the working with still, you know, yourself, I think is still big.

Yeah, I think in this call, I would tend to err on the side that what Rachel said is probably the bigger and the biggest part of this because until you can get that piece in alignment, anything else that we teach you is not going to hold, right? Because you need to have that self-control that's built in. But once you do have that, yeah, there's the practical side of making sure you are in a budget like every dollar and we'll make sure that you get that before we hang up this call. But I have it and I have created the budget. It's easy to pay my bills. Good. Good. Good. And then the discipline of learning how to be really detailed when new things pop up is something that is a muscle. I think that builds over time to just think through every

aspect of what you might spend money on. But my biggest question, besides these lump sums of money that's coming is, what's your month to month? How much money do you earn coming in month to month? Right now, I'm earning in my business about two grant just enough to cover the expenses of my business. So I've been living off of whatever he has, whatever he has. So it's not, it's not actually profit. It's having to be right, reinvested right back into the business. keep it going. So I would say that I'm concerned about that. And that would be, along with what Rachel said, creating the friction, my number two piece of homework for you would be figuring out what earning an income looks like for you. How long have you had this business? Five years.

And it was doing really well. What caused it to decline? My husband's sickness and me stopping, stepping back. Okay. Do you have a timeline, Susan, a realistic timeline and when you think it's going to start actually creating a profit? Is it going to be like another year? Is it going to be three months? It's actually starting to build back up again. What kind of business is it? I'm a transformational trauma coach. And I'm pretty elite in the area I live. So I'm pretty well known and it is lucrative. I mean. So it's getting a clientele back. But like 24. And I I had my husband's income as well. In 2024, we were doing close to $100,000 that year.

And we live in a small town. How much were you making out of that? About 52. Okay. So if you could get back clientele-wise to that 52, you could sustain on that. And I like that for you. In the meantime, honestly, I'd pick up a side hustle because when you have too much time to sit at home, I know when I'm at home, Rachel, and my eyes just look at the walls.

I go, oh, it'd be nice to get something new for that wall. Oh, I need a new bed spread. Oh, like when I'm not doing enough with my time, I tend to spend more money. And I think a lot of us are like that because you're bored and you're looking for release. You add grief on top of that. And I think it's just a recipe for overspending, which is what you've seen. And you need an income right now, too. Yeah.

So it's going to kill two birds with one stone to get out there, get a side hustle until this business is producing. And do what Rachel said. Put some friction in place. It's that time again, folks. Tax season is here. I know some of you would rather bury your head in the sand until April 15th than face your taxes. But here's a better idea. If your tax situation is complicated, get in touch with a Ramsey trusted tax pro today. That way they can take the stress off your shoulders once those tax forms come in and teach you how to keep your tax bill as low as possible. But don't wait. Ramsey trusted pros can book up fast. Go to ramsysolutions.com slash tax pro to find one who serves your area with excellence. That's ramsysolutions.com slash tax pro. One of our favorite things is when people share their stories of how they're winning, and we just got this amazing review of our every dollar app.

She says, I love this app. It makes it super easy to budget with my husband. We have implemented this practice since our wedding day, and we've had zero money fights because there is full transparency and we're on the same page. Love that. That's amazing. Hey, you can do it too. You can take control of your money and you can change your family tree.

You can live like no one else. Go download our every dollar budget app for free in the app store or Google Play. All righty then. Stephen is in Hartford, Connecticut. Hey, Stephen, how can we help today? Hi, I was doing the baby steps and I'm finally at that pay off a mortgage step. Yay. I found you guys last year through a guy at work.

Awesome. I've been messing up and I've been putting money towards my escrow. Is there a really good way to attack the mortgage? Because I love to be paid off in about five years. Yeah. Or sooner. I mean, the best way is to pay extra payments. So you pay your normal payment that's due, that satisfies the interest.

And then after that's free and clear, then you can go back and put extra payments and put them directly onto the principal. And that truly is the best way to do it over time. Okay. So when you do the, when you say pay on the principal, for the mortgage payment. Are you talking about like the lump sum I pay every month or is it actually like a certain mortgage payment? So your mortgage payment, the payment that you pay every month, it's probably comprised of a couple elements. There is the actual loan balance, what you owe for the home. And then you

probably have some insurance that's built in there, some taxes that are built in there. Right? HOA sometimes. Sometimes that's built in. So your payment is going to all those different places. is when you pay your monthly payment, interest, all of that. So after you've paid that monthly payment, you've satisfied the interest, you've satisfied the taxes, anything else that's built in. Now, any extra money that you apply, it's going to go directly to the loan balance, which we would call the principle. So it's going to go straight to that. And that way, it's like a pure, it's pure money. So if you pay $500, it's going to lower your balance by five, you know, it's going to lower it by that much because it's already, it's on top of your normal payment. And a lot of

That's what I thought I was doing, but it was actually just sitting in my escrow and then I got a check for the remainder. So what I would do is you can either call it in and tell them. I know on mine you could go in and you can actually decipher if it's going to be a normal payment or if it's going to be a principal only payment actually has the option. If yours doesn't have that, then I would call in and do it that way. And if you're doing it, you kind of have to make sure for the month you've already satisfied the payment for the month or else. it'll go towards your monthly, it'll go towards your normally monthly payment. Does that make sense? No, I have no problem with that. I usually pay a little early and then what I have at the end of the month is what I try to put on extra. Yeah. So after everything was like all my bills are set and paid, it's, I throw whatever I have left over just right in there. I kind of have like a free account type of thing. Yeah. After everything goes through the budget. Is there a good strategy on how to pay it? I try to do like two, three extra mortgage payments and try to kick it down? Or is it just a just,

just throw anything and any extra that you have at it. As much as you can within, you know, what makes reasonable sense for you. So we always teach that, you know, when you do the first three baby steps, you're very intense. Everything is as fast as possible. You sacrifice everything, you know, in order to do this quickly. But then when you move into baby steps four, five, and six, you're moving into a season of intentionality, which is I don't have to be like, you know, balls to the wall, but I do want to be thoughtful about am I intentionally putting extra towards this?

And that really is up to you. If you're in a season that you want to go really fast, that's fine. Or you know, what I find, Rachel, is that there are seasons where you're very, you know, gung-ho about it. And then there are seasons where you're like, you know what, I'm going to renovate that bathroom. And so maybe you pull back a little bit, but you're still putting something extra. And so it kind of ebbs and flows.

But the point is that you're always doing something and that you have a plan for what that looks like. it's not just kind of a haphazard thing, but it is an intentional behavior. And I'm sure you've run numbers, Stephen, right? I mean, people do like Excel forms or a mortgage calculator, and you can watch that as that principle goes down. I actually just learned about that from Dave. Okay, good, yes.

Like I said, I'm new to this. Yeah. I just did my mortgage calculator thing. Awesome. So I'm hoping to be paid. Like I said, I just refinanced for a 15 year. Oh, good for you. Yeah.

I had horrible credit and everything like that when I first did this. So my interest rate was high. Okay. Good. With doing everything, I was so scared because paying off everything, obviously my credit score dropped. So they had to do the underwriting thing that you guys talked about. But they did it. That's awesome.

Yeah. Well, I was done. A 15 year. And I just really want to pay it off. Yes. Well, for a lot of people, when you start to see those numbers and what's crazy is even, I don't remember the math, but we did this at a live event recently. It was like four extra mortgage payments a year and how quickly that takes off what it does on the principle and how. how much, I mean, how much interest you save, tens of thousands, if not even hundreds of thousands

of dollars of interest. Like, it is, it is wild. What even just a little bit will do, do you know what I mean? That's what's so encouraging about it is when you start plugging in your numbers, you're like, oh my gosh, like this goes a really long way. And a lot of people that are doing the baby steps, they pay their houses off in seven to 10 years. So yeah, you may be faster than that, or you may be right around that. But I think when you at least have the mindset that you want to pay off your house, it happens faster than just settling and saying, I'll have a mortgage for 30 years or 15 years. Yeah. So if you do what Rachel said, on a 30-year mortgage, just doing four extra principal payments, you could reduce it by 17 to 20 years. Yes. Just by doing four extra principal

payments. Is it say 15? On a 15 year, it could shrink it to around 10 to 11 years. Okay. So that is major. That's just five years. Yeah. Just a few extra mortgage payments. So if you did that six times a year, Right? Like it starts to just drink so quickly. That's what's wild about it. Yeah, it's really, really crazy. Yeah. If you, you know, spent the average right now, which is around 400,000 on a mortgage, the normal terms, yeah, on a 30 year, you would save potentially $200,000 in interest simply by doing that. Yeah. Yeah. So if you've not ever played around with these numbers, you can get your, like, you can go down a rabbit hole of just like, oh, like really realizing. And that's money back in your pocket. Hundreds of $1,000. that's not going to interest. It's for you. Yes, you save that. It's amazing. Can we just say that for a minute?

Sometimes when you're playing, when you're talking about numbers like this and they feel like they're out in the future, it can feel like it doesn't matter. But it does. These are real dollars that you are paying. Real dollars, $200,000 that will come from your money.

Yep. And so just really take some time and think about that. It can feel almost like it's not us. Real. Yes. But it is. It is real money. All right, very, very good. Let's go to Holly in Sacramento, California. Holly, you're up. How can we help today? Hi there. Thanks for taking my call. I have a two-part question. The first one, I'm a single teacher mom.

I make $114,000 a year. I have life insurance through work at $300,000. And I'm just wondering if I need extra term life insurance on top of that. Yes, I would. We say 10 to 12 times your annual income. So I would put more like a million, have a million dollar policy. Yeah. A million. Okay. Yes. And hopefully you can get it. Hopefully, you know, and you can supplement it. If you want to keep the work one, I'd be okay with that if you got a 700,000 term life. And it shouldn't be too expensive if you're, you know, healthy and all the things. So yeah, but that's what I would, I would have that to supplement. Yeah. And you can get that through Zander. You can hop on and they'll get you set up. It's really easy now. I mean, they'll even come to your house and everything like that. Yeah. Yeah. It's great.

Okay. And my other question is I recently paid off my car and one other large debt. Oh, congratulations. Thank you. I'm working on paying off my HELOC loan and it's at $20,000 right now. I'm paying $1,000 a month and I'm just curious, so, you know, what should my next steps be in order to continue to support my child? I have more than $1,000 in my emergency fund. I'm nervous about putting it down to a thousand. Yeah. How much is in your emergency fund?

I have $6,000 right now. $6,000, okay. And you're paying an extra $1,000. So on track, you know, a year and a half or so, you'll have that HELOC paid off. Yeah. Yes. Yeah, I mean, I would say if there's, I mean, that's a great,

I mean, to be a single mom working. Yeah, there's a different level of stress there. Yeah, you're doing, I think you're doing great, Holly. if there's anything extra that you can put towards it at any capacity, obviously, the faster, the better. But you're killing it, girl. Yeah, I think you're doing great. Yeah, I think you're going to feel the motivation on your own to find ways to get more and

more income going towards that. And it's going to be knocked out before you know it. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use.

Go to Ramsey Solutions.com and try Ask Ramsey today. That's ramsysolutions.com. All right, our Ramsey show a scripture unquote of the day. Proverbs 3 verses 5 through 6. Trust in the Lord with all your heart. And lean not to your own understanding and all your ways acknowledge him. He shall direct your paths. Dolly Parton said, if you don't like the road you're walking, start paving another one.

Oh, pretty good, pretty good. Classic. Man, I feel like I'm walking on air after James gave us that really nice encouragement, James. I don't know how to act. And then we got Dolly Parton and Proverbs. We're going to end the show well. I know. I wanted him to come on.

He didn't. All right. Curtis is in Richmond, Virginia. What's up, Curtis? Hi. How are you ladies doing this afternoon? Excellent. How can we help?

Well, let me start by... 2025 was a really bad year for me. I'm sorry. In May, I lost my wife. Oh, gosh. December, I lost my dad. I had been as caregiver for a few years. When I need to become as caregiver, I left my job because I was getting a stipend to help take care of him.

Plus, my wife had a very good job, and it was her idea for me to bring him into the house, help take care of him. do it need to be done because that's what I felt like I was led to do. Sure. As forward to now, the savings that I had between my wife's passing and now my dad's, has been eaten up by going back and forth to the hospital, the funeral expenses, trying to catch up on bills. And I have found myself to be about $13,000 in debt. And that's after paying down almost $70,000.

Wow. But I have no job now. And I'm trying to find one, but I have found it very difficult. Yeah. What's your field? Like, what's your expertise, Curtis? Well, I was military to begin with. And prior to that, I was in sales.

Okay. And how long were you out of the workforce, taking care of your dad? How many years? Eight years. Oh, okay. Wow. Okay. And how old are you?

49. 49. Okay. Okay. So there's no, just to get a better picture, there's no savings anywhere to speak of. Do you have anything that was put away while you were in the military? Anything like that? No, I've blown through all of it.

See, Dad ended up with dementia with Alzheimer's. Okay, I'm sorry. Sorry. And Trish, it was unexpected. She passed with a massive heart attack. Oh, my gosh, Curtis. Oh. Oh, I'm so sorry.

This is really tough. Yeah, it was a really hard year. I'm trying to stay positive. I'm trying to put it in God's hands. because that's what person and what we want me to do. It's also grieving the life that you thought you were going to have

for the next 30 years, you know? I mean, life looks completely different. And as Dr. John Deloney always says, it's almost like you close not even a chapter of a book, but a whole book. And you almost have to open up a whole new one and start rewriting your story.

And, you know, the hard thing is, is, you know, you're 49. and so it's hard because you have a long life ahead of you. And it's also a positive thing because I think you can make some incredible changes and start, you know, it's a new life that you have to look at, right? It's not even rebuilding the life that you had. It is it's looking ahead and saying there's going to be a new Curtis and what do I have to do now for myself to not only sustain, but what's good for me? and finding some positive small wins in the midst of this grief is not only going to help you financially, Curtis, but I also think in who you are and kind of going back to, yeah, finding a new purpose and how to contribute to the world.

And that's a hard thing to do. I do know at the end of the call, though, we will give you Ken Coleman's book, Find the Work You're Wired to do, because there's still a whole second chapter, Curtis, of your life to be written, you know. Yeah, I agree. This is kind of like a renaissance. This is like a rebirth for you. And in many ways, that can be scary and daunting. But in other ways, it can be really interesting and can be exciting after enough time passes and you can see it as an opportunity to start something fresh and new. And I actually think that that might end up being the case career-wise. So I'd be sitting some time, spending some time thinking about if I could do anything. And I know when King coaches people, he kind of starts with that. If I could do anything, what would it be? and then kind of just run that down. And that would kind of be, if I were in your shoes, I think that that would be a journal prompt for me every day is, if I could do anything I wanted to do today with my career, with my talents,

what would it be? And I would just spend time thinking about that because I think sometimes in life we don't give ourselves, there's always something going on and we do what we have to do. We do what we need to do. But very rarely do we always do the things that we want to do. So I think that that would be a really good exercise for you. And I think it's just going to take time. Yeah, absolutely.

Yeah, but anything that you can do today to start bringing in an income, and it, of course, won't be your dream job. But I think getting up, having a routine, having a schedule, having something that you're doing, I think does start to, you know, re-energize you. And there's a level of dignity that's there and getting a paycheck and actually start seeing progress in some part of life. And this would be the more financial side. part, but it can be powerful when you start actually getting up and doing something, because it

could be so easy just to not because you think there's so much. And don't hesitate to call us. Call us back if you feel like you're getting that traction and then you're saying, okay, I'm making this money. Now what do I do with it? The good news is 13,000 in debt, you know, once you start having any income come in, you're going to realize, oh, I can knock that out. That's right. That's right. Fairly, fairly quickly. And I have no doubt that you're going to do that. I just think the fog needs to clear a little bit more for you to get your bearings in this. Thank you for the call. All right. Let's go straight to Nicole in Louisville, Kentucky. Nicole, we're right up against the clock. How can we help today? Thank you so much for taking my call. I am in my early 40s and my husband

is in his early 50s. We've both grown up and lived our entire lives in the same location and we're really interested in starting a new adventure. We have found a place that we want to move to, but we want to rent there first before we sell our current home. We are debt-free except for that mortgage. We do have some older kids who are currently renting, and since we have family nearby who could also support them, we want to know if renting our house to them would be wise. Probably not, because you guys will probably sell it in a year, right, if you're wanting to keep it just for a short term until you find a house that you guys want to buy in the new location, right? If the new location is as much of a fit as we hope it,

is yes. Okay, but if it's not, you'll come back home and want to live in the house that you're in. Is that what you're saying? Yes. Okay. It's hard to give up the interest rate that we have until we know we have to. Oh, okay. Interesting. What type, I mean, what would you do for work? Are your jobs, you know, transferable? So we can, yes, we can do the exact same things we're doing now there. Okay. Would you guys be able to support the rents of the new place and then for some reason if something goes haywire with family I mean does that put you in a financial bind? I don't think so. We've tried to use the 25% of our income to say like what could we afford in rent plus covering the mortgage if we had to but of course you know anybody helping

cover the mortgage while we're gone would help. I normally am not a fan of that but since it's still a question mark of if you're going to stay in the new location, I would be okay with you keeping it and doing a one year, very clearly communicated, a one year rent agreement to people you know. Yes. Which means that I can go, hey, wire. That's why I want a lot of margin with you financially, because I don't want this to ruin any kind of relationship. And I get weird. But yep, if you have that one year and then you guys, if you want to stay in the new location, that house, you need to sell it. Nicole, I don't care what the interest rate is. You need to sell it and move your life to the new. Or if

the new location didn't work out, then you move back home. But I would just do it for one calendar year, and that's it. Yeah, I like that idea. And it's good that you have the kids because they seem like they'd be just the right person to rent the house. Thank you for the call. All right, guys, thanks for hanging out with us. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.