The Ramsey Show - Ditch Your Debt and Get Back to Peace

Episode Date: June 4, 2024

💵 Sign-up for EveryDollar today - The simplest way to budget for your life! Jade Warshaw & George Kamel answer your questions and discuss: "Should I stop my eBay customers from using BNPL to pay?" "How do I get into budgeting without getting overwhelmed?" Why you shouldn't take investing advice from social media, Why you should avoid a terrible new zero-down mortgage option, "Will I live paycheck-to-paycheck forever?" Support Our Sponsors: Zander Insurance Health Trust Financial Churchill Mortgage Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📖 Beat debt and build wealth with the new The Total Money Makeover Updated and Expanded 20th Anniversary Edition! 🏠 Find a Ramsey Trusted Real Estate Agent Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

From Ramsey Network, it's The Ramsey Show. I'm your host, Jade Warshaw. Next to me is George Camel on this show. We teach people to build wealth. We teach them to have awesome, amazing relationships and do work that they love. So if any of that applies to you, you can give us a call. The number is 888-825-5225. And we'll chop it up with you. We'll give you our best advice. Again, this is about your life, your money. And you know, when Ken is here, we can do that career stuff too, George.

That's true. We can try to help with that. We'll try to help. We'll do our best with that. We know a little something, something. We have careers. Do we? We got here somehow. Somehow. Started from the bottom. Now we're here.

All right. Let's go straight to the phone lines. We've got Aaron. He's in Des Moines, Iowa. What's going on, Aaron? Hey, guys. How's it going? Chilling.

How can we help? All right. So basically for the past couple of years, I've been selling shoes on like eBay and Go and stuff like that. And recently I had a buyer reach out to me on eBay saying, hey, can I pay with Klarna, which is, you know, buy now, pay later. And what came down to it, I made the sale. And that basically meant that I knowingly put someone into debt.

And I felt weird about that. You know, buying stuff, I mean, expensive Jordans with debt. And I just felt weird about it. So I just figured I'd reach out, you know, see what you I mean, expensive Jordans with debt. And I just felt weird about it. So I just figured I'd reach out, you know, see what you guys think on this. Do I have a moral obligation here? Obviously no legal obligation. But yeah, that's pretty much it. I mean, let me think.

You didn't do anything. I don't want you to take, like, they chose to purchase shoes on credit. Whether it was from you or someone else, they would have done it. And half the time you wouldn't have known if they had used a debit card or a credit card. Correct. Right. So there's that piece of it. It doesn't, it doesn't bother me.

I mean, I know here, I can say here at Ramsey Solutions, a lot of our products, you can, like, I think on every dollar. I just pulled up our policy online because we have a whole piece about that. Because people go, Dave accepts credit cards. I'm like, no, we don't. But sometimes we can't, the system can't tell what a debit or credit is. That's right. And so you're probably can sneakily find ways around it if you wanted to go into debt to buy something. Yeah. I don't think that's on you. I think you're trying to run your business and do your life. And if somebody says, Hey, I want to pay on Klarna

and you're like, Hey, you really should pay cash after that. It's like dust the dirt off your shoulders and move on. If it's bothering you personally, I mean, everybody's moral compass, I should say, is a little differently. If it's really bothering you, then next time if someone tells you that or reveals that information and you don't feel like you should take the sale, don't do it that's really all there is to it but there's a lot of people in sales roles that are wonderful people with high character yeah and they can't define how someone's going to make that purchase if you're in car sales you can be a great dude who wants to help people get the right car but you may not be on the finance side where you can be like hey you really shouldn't buy this car bro you make 40,000 you're about to buy a 50,000 car yeah We can't police people's decisions. Unless you're in the lending business and the debt

business, which you're not, I would still sleep well at night knowing that you haven't done anything wrong. Yeah. Does that help you? That makes sense. Yep. That's perfect. Thank you. Absolutely. That was a good call. And I know you love, you're big in the shoe game. You and Sam Warshaw, no stranger. I am not big in the shoe game. My husband is big in the shoe game, but he makes sure that the drip is dripping. Let me just say some of your shoes, Jade. They're worth my 401k. That's all I'm saying. There it is.

They can't see it. Stealth wealth. No, it's not worth your 401k, but everybody has their live like no one else. So later you can live like no one else. And shoes happens to be mine. Let's go to Julie. She's in Dayton, Ohio. What's going on, Julie? How can we help? Really, I called in for a question about my daughter. She's one month old. But to be honest, I've got other goals as well. And I was kind of curious about accounts that I could open up for

her in the future, like the 529 College or a custodial Roth, just some investment opportunities for her in the future that I didn't have an opportunity for when I was growing up. I love that question. Go ahead, George. You're wanting to leave a legacy, and there's a few options here. Number one, as you mentioned, the 529 plan, which is going to be for college expenses. And I think that's an account every parent should open when their child is born. That was one of the first things I did when my daughter was born nine months ago. So that's a great option. They're state specific, but you can choose any state, which is really cool. And so you can do some research on which one is the best for you. You can reach

out to a SmartVestor Pro through our website who can help you navigate that. Outside of college, the custodial Roth can be a great option as well, where they'd have access to it once they turn, you know, 18, that becomes their account, and you have 18 years of growth on that money. So what are your goals for her? What are you trying to do for her? Really, probably, you know, I don't know if she'll choose college, so it would be nice to have an account that she could get into as soon as she turns 18. So maybe that custodial Roth, it sounds like. Well, the good news is with the 529 plan and the new secure 2.0 Act,

you can actually roll over a portion of your 529 college funds into a Roth IRA. So if she doesn't use it for college, she's still able to use that money as she pleases in that retirement account. But remember, there's still going to be penalties if she withdraws it early. Okay. Before retirement. So this is really way future thinking. Yeah. And really where I'm at financially is like, I have a house.

I want to pay that off. I got married last year, got pregnant right away. So we're kind of in that new form of our life. I'm 34 years old. He's 32. But it's kind of ridiculous because combined we've got quite a bit in savings, and, you know, I've got, I think, a debt on my house of $317,000. He's got his house that he's got as a rental, and I think we owe $60,000 on it.

Cool. And so our combined. the baby, which we're maxing out our HSA this year, so I think it's $7,000. That's great. That would be it. Our total combined debt is $384,000. And then we've got $143,000 in savings, which is kind of silly because, yeah, it's not being invested or anything like that.

It's really grown quickly. If I were in your shoes, I'd probably hold back six months of expenses. And then whatever is left, you have a couple options with that. I mean, you've got these two houses, this rental. What would be six months of expenses for you? I'm just curious i think we spend maybe about we live off of maybe 3 500 a month i think okay so let's call it 4 000 a month for six months that's 24 000 so if you rounded it up and kept 25k kind of as your six month fund and then you

look at it 18 left you've got 118 left which gives you some options. I mean, you could put it towards your personal residence if you wanted to. If you guys really love this rental, you could pay it off in full and then put the rest towards your primary mortgage. You guys have some options here. Are you investing 15% of your gross incomes? Yeah, that was the next thing I was looking at. I think we're at 12% for each of us. so we could always increase that a little bit for sure. Yeah, bump it up to 15. And then here's what's really cool. You pay off that rental instantly. That still leaves you with $58,000 to play with to throw at your current primary mortgage. Now you're at $275,000 on that.

And now you've freed up the rental income as well, and now we can really make some headway on that primary mortgage. So that's what I would do if I was in your shoes, Julie. I would too. While putting some money in the 529, while investing 15%, whatever's left over that margin, plus the proceeds from your savings, let's knock out that mortgage. How's that hit you? And then my other thought is keeping the rental. We don't know if we want to keep it or not. It's in a good area. We've got a good renter right now, but he just moved out. I think it was, we started renting it in July of last year.

And I think you have to be like three out of five years living there. And then you kind of have to figure out if you're keeping it or selling it. Well, I'd pay it off. And after that, if it's still a hassle and you guys don't enjoy it anymore, just sell it. Absolutely. And you can invest the proceeds or use it toward a different piece of real estate. I like that plan. I like that plan too.

Good problems to have. They're doing it really well. They're great problems to have. For $60,000, I'm definitely keeping that rental around, especially when they have the cash to pay it off. Because I know some people are like, shouldn't they sell the rental and use the money to go towards their primary mortgage? Not necessarily in this case.

I'm telling people what I would do. This is The Ramsey Show. Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging

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A great one. What an honor. A banger, as they might say. All right, give us a call. The number's 888-255-225. We'll take calls all afternoon long about your financial situation. But in the meantime, let's talk about these Ramsey Trusted Program is the only way to find an agent that you can trust to keep you on track with what we teach here at Ramsey and get the best offer on your house or find the right house for you. We send some of the top agents in your area who we trust. You review their stats, you get to interview them, and you get to ultimately decide which one that you want to work with. So this is up to you. We do the vetting on our side and then you get to ultimately decide which one that you want to work with. So this is up to you. We do the vetting on our side and then you get to choose from all the people that we've vetted, which makes

it very, very convenient. Ramsey Trusted Agents have years of experience and will help you make wise decisions when it comes to pricing, marketing, and making or choosing the right offer. So find a Ramsey Trusted Real Estate Agent for free at ramseysolutions.com slash agent. And George, I can say like our Ramsey Trusted agent is amazing. She helped us move here. She helped our friends move. And it's so funny because in the midst of all the crazy things that can go on in the real estate world, like you know how you want to make an offer on a house, but if you already

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especially if you're navigating something like real estate, especially for the first time. So check that out. You can find a trusted real estate agent for free at ramseysolutions.com slash agent. So get into that. All right, let's go to Zachary in Indianapolis, Indiana. What's going on, Zachary?

Hi, how are you guys? Doing great. How can we help? So I am just wondering, what is the best way to get into budgeting without getting overwhelmed and giving up? Well, that's great. That's a great question. Are you saying that because it's already happened? Yes. I've tried two times. Both times that I tried, it was a really stressful time period for me and my now wife. And so it was really hard to get both on the same page. But I think now that the waters have kind of died down, we're willing to dive into it headfirst. And I just don't want the same mistake to happen again. What do you think was causing you to give up?

Was it just you were overwhelmed with other things to do and you forgot about it? So the first time that it happened that I wanted to get into budgeting, we just had a newborn baby that was born two months early. So he was spending a month in the NICU. Gotcha. And so I was really head on about it. Like I had just discovered you guys, like, a month prior,

and I was on this big kick, and she was just like, yeah, yeah, whatever, you know. I'm worried about this right now. Yeah, your mind was in crisis. Rightfully so, yeah. Not a great time to start a new financial habit when you're dealing with something scary like that. That's right. Yeah, definitely.

Thankfully, he's very healthy. He's been out for a couple months now right but um both times i've tried around like the middle of the month uh it starts getting a little overwhelming and i've kind of just given up looking at it and stuff and is it because do you think it's getting overwhelming because you're you're going over budget because so the hope is that did reality not match your plan where you went, oh my gosh, we spent $500 on groceries. We said it was going to be $200. What is causing that? Yeah. So a lot of it is mainly like when I go to list like all of our expenses and stuff,

halfway through the month, there's always stuff that keeps popping up that I didn't think about. So it's the unplanned pieces in the budget. And for that, you know, I love to have a miscellaneous line item that's sort of a little catch-all. You don't want it to be for sloppy behavior, but when there's that little thing, it doesn't throw you off the whole plan because you had a random 10, 20, $50 thing happen. Are you using every dollar? I am. Yeah. Okay. So when it comes to every dollar, you know, George is exactly right. I always tell people with every dollar, one of the three keys to staying focused and staying on it is you want the budget to be detailed. That's number one. So that's the first issue that you're facing is when that month begins, you're really going through and thinking of every possible thing that you could possibly spend money on.

I mean, that's everything from grandma's birthday to if your kids are signing up for sports and they need soccer cleats, right? Anything that you can think of that's out of the ordinary or that's going to be part of that monthly flow. And then the second thing is you got to be realistic, right? You know, now you're a family of three, so your grocery budget might change or there's certain things in your household that might change. Those numbers might go up a little bit. So really being realistic about the state of things. Inflation, right? Inflation, not inflation. I thought you just added another syllable. I was like, whoa, Jade Fancy.

Inflation, that's something that a lot of people are facing. And as much as we haven't wanted to, some of us have had to up those categories. And so detailed, realistic, and finally just accepting the flexibility of it. There are, every once in a while, gonna be things that pop up that you totally forgot about. It's your turn to bring treats to kindergarten class. Right. And so you

got to pop into Kroger or pop into Publix to get that. And that's totally fine. But I do think that if that's happening regularly and all the time, then you're you're missing out on number one, which is the be detailed part. So that's kind of the way it goes. And so I think, you know, once you're married, one way to really nail that is if you're sitting down with your spouse, because I know when I sit down with Sam, there's things that he thinks about and knows about that I wouldn't,

would have forgotten to put on the budget. There's plans I didn't know were happening this month. And my wife was like, oh yeah, I told you. Right. Remember one time for three, I real quick, I was in the back of the closet and I yelled, I'm like, oh yeah, I forgot we have to bring food for that thing. That's right. So that's how it goes in a marriage. So that's why communication is key. Sitting down and doing

the budget ahead of the month happening on paper, using the app and go, okay, what's everything we can think of as the month goes on, you can be flexible. You can make tweaks to the budget to account for things. And maybe we're going to, we spent less in this category, so we can add it to this category. And so it's a little game of Tetris. But the goal is to have margin to actually hit your financial goal. So what is your next financial goal? Getting out of debt. Perfect.

Love it. So the key is, hey, we said we were going to have an extra 500 bucks to throw at the debt. Is that true based on our current budget and based on how we're spending? So is that where you're getting thrown off where you're going, we don't have any money to throw at debt. It just disappeared. Um, more like, so we, we plan to, uh, put some extra money towards some of the debt and we'll, we'll get, we'll do like a little bit, but not as much as I originally planned. And then, um, when we, when we do plan to put a lot extra, we start getting worried about what if this comes up or what if this comes up,

you know, and. You know, I like overshooting. I think you guys are under, undercutting your numbers. I think that you need to do the opposite and kind of overshoot them a little bit. Like let's, and it can be small things like utilities. Maybe it's usually $78. Just go ahead and put it on there for 80 you know if you think that you might spend 325 on something go ahead and put it at 350 like overshoot it and i think for you guys that's going to help you um and then there it's it's better to look at the budget and go oh my gosh

i have a little bit left over than to say oh oh, man, like we went over in every category. And then does that make sense? Because it doesn't sound like you guys are. And George, help me out on this. It doesn't sound like you guys are just willy nilly spending. It almost sounds like there's an accuracy issue more than it is. You guys. I mean, am I wrong there?

We do have a little bit of problems with just spending carelessly. What are the categories you would say we busted on these categories? Is it Amazon? Is it Target? Is it groceries? It's mainly like for me, I

try to stick to it as much as I can. I mean, obviously, minus my guilty pleasures food. So is it eating out? Yeah. Yeah. Like, uh, working a long day and being like, I don't feel like cooking. Let's just grab something, you know? Um, for my wife, it is, uh, we have a three-year-old as well. And, um, she is really big about she wants her to have all the stuff that she never was able to have growing up.

So, like, when she wants something, she had a hard time telling her no or maybe next check or something. It's a three-year-old. They're going to have a tantrum regardless. That's right. And they won't remember mom saying no. But she will remember watching her parents not fight about money and having a peaceful, strong, healthy marriage. So that's what I would be aiming toward versus serving a three-year-old's tantrums. That's true.

And I mean, the other piece of grace on this, which y'all know I rarely offer the grace, is you guys are in a crazy time. Like you have a newborn, you have a three-year-old. There are more times where you don't want to cook. And let's just be honest about that. So again, being realistic on that budget, but still making headway and progress on the debt

is what you're looking for. There's no perfection here, only progress. This is The Ramsey Show. You've worked, saved, sacrificed, and been gazelle intense with your financial game plan. But do you have the right defense in place, like the right health insurance? Look, you can't walk past a doctor's office these days without getting a massive bill. And if you don't have health insurance, a major medical situation can undo all of your hard work. That's where my friends at Health Trust Financial can help.

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so make sure you're not overpaying. Go to healthtrustfinancial.com today. healthtrustfinancial.com You're listening to The Ramsey Show. I'm your host, Jade Warsharshaw your other host for the day is george camel author of breaking free from broke host of the george camel youtube show which is always popping off george we're having a good time over there you are i like when you guys invite me over it feels like we're unchaperoned and like in the parents basement just having a

good time it's a house party it really is kid and play a lot of jokes a lot of humor a lot of good information love it love it if you haven't checked it out so. It's on the YouTubes and you won't regret it. Let's go to Burlington, Vermont. We've got Allison on the line. What's up, Allison? Hi, Jade. Hi, George. It's an honor to talk to y'all. Thank you so much for taking my call. How are you guys doing? We're doing great. How can we help? Awesome. Yeah. So I've been with my boyfriend for about four years. We've lived together for three years, split our finances down the middle. That's worked pretty well. I did the bookkeeping end of it. Now we just found out we're 12 weeks pregnant, which is really exciting. Wow. That's cool. Okay. It's exciting. And we are

planning to get married, you know, in the next couple years with the original timeline. Hold up, hold up, hold up. Yeah, that was the idea. Why? Why are y'all waiting so long? You sound like you're a great couple. Yeah, I mean, we are. You know, he was originally going to propose, like, this summer was his idea,

and now that we're pregnant, he doesn't want to propose because I'm pregnant. What? I guess I get that. But like, how do you get that? Make it make sense. It just feels like, I don't know. I mean, obviously, I want to get married. And I've been telling him it's nice to be engaged before we announce we're pregnant.

But yeah, I'm just trying to figure out how we like keep our finances separate if we're going to have a baby and not be married. It's going to be hard, which is why George and I are, if you were watching on YouTube, why we have these looks on our faces. I am perplexed. We're flummoxed. Befuddled. What if you just got the, okay,

and I know this is not romantic, but what if you just got the piece of paper? So the legality and those protections are there. You don't tell anybody. And then when the time is right and he wants to propose and do all the romantic stuff, you still get to have that fun too. Okay. Yeah, I get that. So like we just get married and don't tell anybody, but then we have a baby and everyone thinks we're still separate.

Yeah. It's literally a piece of paper. Yeah. What I remember when my husband and I were engaged and you have to go down to the courthouse and have them sign the paper once that happened i was like wait a second like this is the real this is the real deal that everything else is the party and fun and nobody knows nobody even knew when we went and did that i mean everybody knows y'all already living together they're about to know you're having a baby so i don't think this marriage certificate is going to really be the thing that shocks them fair enough can i ask a follow-up question to all this then go for it so if we get end up getting married which i'm really hoping i can convince him or you know explain all this to him maybe play the episode for him um you know i've been living debt-free i've got a good rate 401k we've

got a four six month emergency fund i personally have had that saved up have an additional 24,000 set aside that i've been saving for a down payment on a home. Nice. Again, I'm debt-free. My boyfriend, however, he doesn't have a lot of savings. We have a combined savings account we've both been contributing to equally. What's in that? We did just get a lease on a truck in March, which I did not love.

It's a big amount of money. And I was worried when we... I think it was $55,000. Yikes. What does he make? He makes, what, like $50,000. Oh my goodness. Wow.

Was this before or after you were pregnant? This is before. Okay. Hey, how much is in that savings that you guys said that you had together? And I'm guessing that's separate then from your emergency fund correct yeah so the savings we have together is about uh 13 000 right now okay and then i have my private savings of 24 000 and then a six month expenses on top of that how much is the six month of expenses 24 000 as well okay good job, A. Have you guys had these conversations about your views on debt and managing money as a couple? We have. And when we were looking for a replacement truck for

him, I agreed he needed to get rid of the truck because it was having a lot of maintenance issues and it was time. He was upside down on it a little bit, but I haggled with the dealer and got them to offer us what it was worth at least or at least what the note was so we cleared that at least um but I just I was trying to get him to like not get a full-size truck because at the end of the day that was what was the big the big note but he did it anyway and why do you think he did it anyway and what was his kind of attitude towards you even though you were like no don't do it i think he just saw me as like trying to like take away his manhood which was not the goal

he is a child who's about to have a child this is a problem he needs to grow up he's about to be a dad he thinks it's like a great thing to have in case we need to tow something or you know just in case we have to tow something i'm about to tow him down to the courthouse for this wedding. Oh, boy. So if I get married, though, how do I get rid of this lease? Like, you can't just pay off a lease. There's three ways to get out of a lease. None of them are going to be fun.

There's early lease termination, which comes with a lot of fees. You have lease transfer, which is like trying to get someone else to buy your timeshare or someone else takes over the lease lease the last one is probably the most probable for you guys which is a lease buyout you pay the difference between the lease payoff amount and the current value of the car gotcha then you would sell it so you would do that and then sell it because a guy making 50 grand should not be driving a 55 000,000 car. Yeah. Is the math mathing for you? It's mathing. No, absolutely. You're very financially responsible. I'm hoping that you rub off on him. Well, that's my biggest concern, Allison. My concern is, and I'm not trying to put doubts

in your mind, but my concern is that based on what you said if you take George and I's advice like let's say you you get off the phone you think about what George and I said and you you go yeah like I want to get out of this lease especially if we're getting married my concern is that you'll bring that to him and it'll kind of completely get like ignored and that for me is I'm gonna call that a red flag for me because I finances is such a big part of marriage and don't get me wrong. It's something that you work at and get better at as, as a couple. It's not something that just clicks on like a light switch, but I do want you guys to start having

these conversations and I want you to make it very clear to him how important this is and where you hope to be in the future and that you want to be on the same page and not you say something and he ignores it and does it anyway fair enough yeah absolutely yeah i i felt differently about it when we did it because it was his note but now for like in a combined finances now that's gonna be my financial burden exactly and so here's the deal no longer will you guys make decisions where you're both not aligned if you're not fully alignment, you both don't agree it's the right move, then it doesn't happen. He doesn't get to veto your vote. Okay.

So that's the rule. How old are you two? We're both 28. Okay. Cool. The good news is, the good and bad news is, you guys have got money laying around

to get out of this lease, and I hate that it's probably going to cost you and you're going to end up with, you know, having to pay some stupid tax here, probably in more ways than one. But the good news is you do have the money to do that. And I would, I would do that and sell it off once you can get out and get something much, much cheaper. The rule of thumb here when it comes to cars is you don't want it to be more than half of your combined take-home pay. So he's at 50. What are you at? I'm at 80. Okay. So we don't want this to be, if we take 130 and think half of that, 65, that's where you're at. Total for all vehicles. So my truck's only worth 10 grand. So if we could

technically keep his truck, then if we were married, our combined vehicles are only 65. If you wanted to and pay it off, it's a though but here's the problem you're about to deplete your six-month emergency fund and your 24 000 for your down payment fund to reverse his stupid decision so the question is do you want to have an emergency fund and a home sooner or do you want to delay your adult life while trying to take care of a baby because he wanted his twuck? Right? That's the decision you're trying to grapple with here. Also known as a truck.

A twuck. Is it a big twuck? It's your big twuck. What color is the truck? Yeah. It's gray. Big way twuck. A big way twuck. Yeah.

That can tow things. Oh, my goodness. Well, Allison, you're super fun. I want to be able to help you guys out. So we're going to give you Financial Peace University for a year. And I want you guys to watch all nine lessons together. And I want you to have a conversation after each lesson and get aligned on what your future money goals are

and get aligned that debt is not going to be in your future. Because your life is too important. This baby's life is too precious to be playing kid games. That's true. And she knows what diligence will do. I mean, she's sitting here. She's got 24K saved. She had 24K starting her down payment.

She's debt free. We know that this way works. And in some way, you're going to have to explain this to your future spouse in a way that's not condescending. That's not you looking down on him. But in some way, you're going to have to go, I've been doing this thing and it's really been working for me. So your way hasn't worked as well. So there's some conversations that need to be had

and they won't necessarily be difficult, but they will be worth it. This is The Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success. So work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step. Learn more at churchillmortgage.com.

This is a paid advertisement. NMLS ID 1591. NMLSConsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. You are listening to The Ramsey Show. I'm Jade Warshaw. Today I'm hosting with George Camel. George Camel, it's never been better. Some call it a blessing.

Some call it, I call it a blessing. Some call it work. It's a little bit of work. But the two of us will be taking your calls all hour long. 888-825-5225 is the number. Give us a call and we will do our best to give you the best advice on your financial situation, your money,

whatever it is that you're going through your life and money. Give us a call and we'll hook you up. And can I just say our advice while I feel like is, is the wisest for your financial future. It can sometimes come across harsh. Yeah. And just know that we want the best for you. I have no bias.

I want you to live a great life. And I'm just telling you what I would do if I was in your shoes. And a lot of times that means doing really hard things that suck, that are not fun. That's facts. And I think you and I together, because you're kind of a no-nonsense. I'm a no-nonsense it might be you know you call it your own risk is all we're saying yeah i i mean i am very nonsensical yeah when it comes to your the advice i give you i'm going to tell you the truth as if

you were my best friend yeah well i think part of that george i think we're like that because we've walked through so many of the scenarios that people call in and are asking about. And so we're not just talking about it from head or book knowledge. We're talking about it from experience as well. And so there's a love there. We have done and would do what we're telling you to do. That's right. Jade has lived it. She paid off almost half a million dollars between her and her husband over seven years. A lot of sacrifices made having roommates while y'all were married. 10 out of 10 would not recommend. And there's some people who are single who are like, well, I don't want a roommate, Jade. I'm like, you're single. You're a 25 year old dude. Get a roommate. You know what? And that's what it is, George. I

think there is a low BS-ometer. Like we can sniff out the BS very quickly. And it's like, wait a minute. You just don't want to be uncomfortable or wait a minute. You're just scared or wait a minute. You're giving a lot of excuses right now. I think we can sniff it out because we've been just don't want to be uncomfortable or wait a minute you're just scared or wait a minute you're giving a lot of excuses right now i think we we can sniff it out because we've been there and we've had to work through those kind of mental hang-ups because there are i mean there is a level of discomfort that goes hand in hand with walking the baby steps but it's sacrifice now it's that temporary sacrifice so that long term but it's. Most people would rather be in a low level of pain for 25 years versus just doing something hard for a season.

I think it's just the fear. I think it's a fear of the unknown. Because think about it. If you, hopefully this analogy works out, but I'm going to go with it. Like if you go to the doctor's office and it turns out that you need a procedure in order to be healthy, right?

But you've never had the procedure before. The first thing you think about is what? Is it going to hurt? Yeah. Is it going to hurt? How long can I put this off for? How long can I put it off? And in many cases, people delay the care that they need because of fears about a pain that's

probably very temporary. And then after that, they can go on to live a healthy life. But they're so worried about that first initial, what's it going to be like if they put me under? What if I wake up? What if, you know, and it's like, you're just freaking yourself out. But it comes like, it turns out that we actually are very adaptable as human beings. And we have pain tolerances. And we can do hard things. And what doesn't kill you makes you stronger. What doesn't kill you makes you stronger. Yes, on the harmony. That's what I'm talking about.

Not great. I'll work on that. But yeah, I think comfort is the enemy of growth. And Michael Easter wrote a great book called The Comfort Crisis. Yes, George. And I think that's what America's come to. You hear these calls. You're like, how did this person make these crazy decisions?

Well, they wanted what felt good in the now. They wanted to be comfortable now. They wanted the lifestyle now instead of delayed gratification, which has now become a virtue that if you can get there, you're going to have the most wonderful life of abundance and joy and peace.

So just wanted to put that filter on. Don't call the show to justify your bad move. Don't try to bounce around ideas. We are telling you this because it's in your best interest and we have lived it and we would do the same thing

if we were you. That's right. And George just has a snarky personality. I can't help it. It's a defense mechanism. A sarcastic fellow. I'm working through it, guys. All right, Larry.

Enter at your own risk. Larry from Lubbock, Texas. What's going on, Larry? Actually, I need some honest opinion. Yes. I am struggling with the idea of staying at my current job, which would mean most likely taking over the foreman position from my current boss, or going back to my old job that has better benefits, better pay,

but has proven to not respect their employees. Oh, why would you ever go back to that? No amount of money is worth that. I mean, you're right, but there's... Who cares about a 401k match if there's a sole tax to be paid? Every day you walk in there, you sit in your car going, here we go. Were you the foreman at the old job? No, I was just a heavy equipment operator.

Why is it that becoming foreman at your current job is not giving you a pay increase? No, becoming foreman at my current job would probably give me a pay increase, but it would probably only give me about as much as I would be making going back to my old job, which is, I work for the county. I do, I do road construction. Okay. So foreman gives you the same pay as the old job. So tell me now, why would you not take it? What's the benefit in going back to the old job is what I'm saying. well it would require me taking the job from a guy that i mean i kind of respect but he's in way over his head and he's causing a lot of damage to this county and he doesn't even realize it at the old job no at the new job at the new job. So you're not, I didn't realize that.

So it's not you're being offered this. You're kind of, is this you stepping up and kind of saying, this guy doesn't know what he's doing? Is that what's happening? Yeah, this would require me stepping up and talking to basically the commissioner and saying, you know, I can improve this place, but you have to give me the help. A revolution.

Okay. Well, what's wrong with just having that conversation and seeing what happens? Nothing's necessarily wrong with it, but I don't really want to stir the pot if he's just going to kind of keep in the blind and keep with the current pace of things. You know, that would still require me morally to find somewhere

else to go who's between who's okay so he's the foreman you're at your job who's between you guys that you go to nobody and since i've gotten here he's i mean it's it's been obvious he's coming to me with every project every road that we work on like he. It's very obvious that he doesn't have the knowledge and he's relying on me. So he's out of his depth. Yeah, and I'm tired of doing his job and not getting the pay for it. So you're getting resentful.

You don't like the old job. It sounds like you're between a rock and a hard place here. You don't really want to do either of these things. I mean, no. My overall is to not do either of these things. So what is your goal? If I snap my fingers, what would be true? Would you have a totally different job? No, I'd still be doing this, but my own company. Oh. In private. So what would that look like? Tell us realistic steps that... Can you go work for another private company and learn the ropes? I mean, yes, and that's kind of what I'm doing here. The reason why I chose these is because it gives me the time off to be able to spend with my family.

Excuse me, it's been hard for me. It gives me time to be able to spend with my family after a hard divorce and trying to just start over. I think that plays into your decision. It's a bigger decision than just pay or a boss. You've got to think about what needs to be true five years from now to where this is a sustainable life. I enjoy what I do. My family's taken care of. Our goals are being met.

And that might mean... I could do that at either of these jobs. This is more of just a, I want to move up from here. I think that you're limiting your options between this job or that job, the old job or the current job. When there's a whole world, you're in construction, or the current job, when there's a whole world, you're in construction, right? Yeah. Okay. There's a whole world out there. Are there more than two construction companies in the area? Yes, but like I was about to say, most of the construction or contracting crews around here, they require that you work six, seven days a week. You're working

12 hours a day. Okay, I see. time with my family is really important to me. So there's a sacrifice to be made there where you may not be able to do that kind of work if this is a priority for you to be working, you know, 45, 50 hours a week instead of 70. Suppose you treated that like a short-term deal and said, I'm going to go and work for one of these companies. It's short-term because ultimately you're going out on your own and then you're going to start your own client base. I think if we look at this and realize nothing here is for life and nothing is long-term, then you can choose the right setup to get you where you're wanting to go quicker. So you can kind of pull the dock, the boat close to the dock and make that leap

into kind of being your own man on this. And I think it's very possible you're just gonna have to zone into one of those options. This is The Ramsey Show. From the Ramsey Network, this is The Ramsey Show. I'm Jade Warshaw, joined by George Campbell. We're gonna be your hosts for this hour. We're gonna take your calls about your life and your money. If you wanna talk to us, give us a call. The number is 888-825-5225, and we will take your question.

Actually, your call will be screened first for quality assurance. For all of our safety. That's right. And then it will trickle down to us, and we'll talk to you on air. So if you want to do that again, the number is 888-825-5225. Let's go straight into the phone lines. We got Jackie, who's in Green Bay. What's up, Jackie? Are you there? Let's try again on. Let's see if we can get her back. Jackie, what's up?

Can you hear me? Yes. I picked up the wrong line. I'm sorry. You bet. How can we help? Okay. So I'm sorry. I'm really nervous. That's okay. take your time my call is um kind of regarding my teenager he's going to be 14 next week and he's going to start working um and he's got a really great mindset and he knows he wants to be that free and he sees um my husband and i start going through the process of dave ramsey and the steps and everything so his plan right now is he's been telling me he wants to spend 10%, give 10%, and then save 80%. So we kind of talked about opening up a bank account. And he says that he would rather open up his green light or cash app account and then work through investing and like investing into stocks and stuff. Because that's kind of what he sees his YouTube friends and stars doing that he idolizes.

So I don't really know how to have this conversation with him, but I don't feel like that's the best place for a 14 year old's money to go. But I don't really have any other ideas for him cause he wants to build money with, you know, and invest in what he's got kind of grow his wealth. So I guess I'm just looking for some advice on how to have this conversation with him and what ideas to give him. Well, he does have a great mindset. He just has poor execution on this.

It's great that he wants to build wealth at an early age, but he's seen a lot of people get a little starry-eyed over investing in what you could do. And is he wanting to invest in single stocks? What has he told you he's actually wanting to invest in? He just says that he wants to invest in stocks. I know Cash App and his Greenlight account both have the options to invest. Greenlight, you have to do it through a parent, but you have to pay a monthly subscription to then invest in it, which just seems strange to me.

Well, that's the part that I wanted to highlight is, I mean, at 14, he can't invest in stocks on his own. You have to be there to say yes to that. So at the basis, it's just you saying, no, we're not going to do that. There's a way to do this and this is not the way. You almost have to treat it like anything else that a kid might want to do that you know is not good for him and it's just like no but you got to say no without like to george's point without um squashing their spirit because there's a part of this that's really great um and i think that you have to find a way to nourish the good part of it which is like yeah there is something to be said

about investing you want to make good financial choices for the future. And I think this is the opportunity for you to teach that. I don't think that this should be viewed negatively. Let's view it as a time to say, yes, investing is so awesome. Here's the way to do that. And here's the steps we're going to take. And here's what that looks like. And you guys have the ability to step in and be the authority on that as opposed to the TikTok bros. And the way I would do that is I would set up a custodial Roth IRA. If he's excited about that, it's something you would manage until he's an adult, 18 or 21, depending on what the law is in Wisconsin. And that at least allows a buffer for him to avoid making terrible mistakes, which I don't know if you've opened up

an app. They're not exactly wonderful for good decisions. They're designed to take your money, not make you money. So you did. And so that's what I cover this in my book, Breaking Free from Broke in the Investment Traps chapter. Would he read my book if I sent it to you? Yeah, he would. Okay. If you said this is a prerequisite for you investing, you're going to read this book and you're going to write me a little book report on what you learned about wealth and investing. A book report, George? That's what I'm... Hey. You've done that before. Book report is where it's at. You got to make sure they retain the knowledge.

Okay. I'm learning. So if you hang on the line after we're done, I'll send you that book. But I wrote it with the younger generation in mind to help them avoid some of these traps that we're seeing on social media that make it look so easy. Because here's the problem, Jackie. I'm out there on YouTube. I'm trying to do the dang thing, trying to help people build wealth. But nobody likes my advice when I'm like, hey, if you invest consistently for 30 years, you'll become a multimillionaire. He probably wants to make money now. That's what it is. He has the attention span of a gnat. He's been watching Cocoa Melon. Yeah. Yeah. It's TikTok, social media. the hard part with that is you know obviously george myself and

people who really know what they were talking about are on there but then there's a bunch of folks who are there they maybe they personally had a good experience and so they teach it like it's bible and so really even helping him navigate that social media landscape and how to pick and choose who you're following and who you're listening to. It can't just be some guy in their basement. It's got to be someone who's got a track record, who's got like reputable content behind them. And, you know, even those moments are, I think, a really good teaching moment for this moving forward, not just the money, but the social media side of it all. And the big key with all of this is you need

to teach them that investing equals long term. Otherwise, it's betting. If you're trying to make money quickly in one, two years or even a day, if you're a day trader, that's dangerous. And there's a lot of people who have lost their butts on that. And there's all kinds of stories on the Internet. They're much more quiet about it when they lose money. But when they gain it, they're making all kinds of videos. And those are the ones that are experts. Yeah. Yeah. yeah so tread with caution those are the people he sees for sure of course that's who i want to follow the guys who are like bro i'll teach you how to win standing here's what else you can teach him there's usually vested interest here they have a course to sell you they're making money off of you they're trying to lead you into something

where they're trying to get your money because they've convinced you that if you invest their way with them, which is different than Ramsey, I don't actually sell investments. And so I'm not here telling you, hey, bro, I'll make you 10x your return if you give me your money. I would never do that. That's a really good differential really for anybody listening is we're never going to, I mean, you guys just did a really great investing essentials two night event, the live stream and dave dave ramsey really did talk about this because a lot of people say dave just tell us tell us the codes like just tell us what you're invested in yeah what's the ticker symbols and we never do that because at the end of the day we don't want you to just do anything because we told you to we want you to understand

what you're investing in you understand it for for yourself. You've chose for yourself. It's not just, well, if Dave said it or if George said it or, you know, John said it, I'm going to do it. That's really what we're trying to protect and guard against. And so, yeah. And he's going to be just fine. Even if he didn't start investing until he was out of high school and he's in college, with this mindset, he's going to be a multimillionaire if he can do it avoiding debt. And so that's definitely his mindset.

Instilling the actual principles, the disciplines is more important than getting into the stock market at 14. So I hope that helps you, Jackie. I'll make sure to send you a copy of Breaking Free from Broke, specifically the investment traps chapter and the wealth is patience chapter, which comes later, which is the right way to build wealth. And Jade, I talk about the three stooges of wealth building in the book. Let's hear it.

It's fear, greed, and pride. Oh, yeah. Behind every bad financial move when it comes to wealth building are one of those three emotions. Fear, greed, and pride. You were scared, so you bought gold or put this money here out of fear.

You were starry-eyed about how much money you could make and greed set in. You were prideful and thought you're gonna be the smarter investor and choose the right stock on the right day at the right time, and you try to time the market, and you get burned. That's a day at the right time. And you try to time the market and you get burned. That's a good word, George.

So if you can avoid the three stooges, what's the opposite of fear? Well, we need some confidence in our plan. We don't want to be scared. Power. Fear is a terrible financial advisor. Instead of pride, let's have some humility and work with a pro and realize we don't have all the answers. Instead of that, what's the last one? Pride. Pride. Well, pride and then fear and greed greed so with greed let's be more generous let's be more open-handed let's not try to get rich

quick let's try to let's try to raise all the ships pride comes before the fall that's right you don't want that you don't want that financially getting biblical out here pride cometh before the fall a haughty spirit that's right a haughty spirit. That's right. A haughty spirit. This is The Ramsey Show. You are listening to The Ramsey Show, part of Ramsey Network. I'm Jade Warshaw. This is George Camel to my right,

taking calls all afternoon, 888-825-5225. This is a caller-driven show, which means you call in, we answer your questions live. Every aspect of this show is live and in person. So I think that's very cool. Get involved by calling the number. We got Ryan, who is on the line from Cleveland, Ohio. What's up, Ryan?

Hey, how are you guys doing today? We're doing good. How can we help? Question. My wife and I have been working through the baby steps, and we both work remotely from home. But recently, my company provided me with a company vehicle that I use to travel. I do have to go out to locations. Okay.

And then we have two personal vehicles. One of them is paid for. And then the other one is my largest debt left in my snowball. And I just was wondering if it would be wise, since we don't drive as much to get rid of, to sell that vehicle to pay off a huge, you know, to get rid of approximately half my debt and then just use our own personal vehicle. And then my company vehicle as needed if it comes up. Yeah. So there's three cars. One's paid off, one has a note and one's the company vehicle. Correct. So the one that has the note, what do you owe on it and what's it worth?

Oh, 23,000 and it's worth approximately $28,000. Nice. So we get a little something-something on that action. Which means, and since you don't need another car to purchase, you could use that $5,000 in profits to throw at your debts. Absolutely. So not only do you free up a payment and get rid of half your debt, you also start to knock out even more debt instantly. Yeah, why not do that deal? I'm doing that all day.

What other debt do you have? We have approximately $2,500 left on a credit card, $3,600 on a student loan, and $14,000 on a personal loan. Okay. So with the 5K, obviously the credit cards are done and a good portion of the student loan is done. Any other cash laying around?

Small amount of savings. How much? We've been working through $15,000. $15,000? A small amount? That's all your debt, Stu. I don't know where you come from. That's a lot of money from my neighborhood.

I'm very conservative. Help us understand. Well, you said you're working through the baby steps. You're working through Ryan's steps right now. Because you know the baby steps would say, let's use 14 of that 15 and knock out this debt. Which looks oddly like that personal loan. Which means, oddly enough, you could be debt free in like a month if you do all this. I could.

I'm just nervous making big moves and trading my savings. How conservative are you considering the fact you went 40 grand into debt? Yeah, we got to put holes in that. You can't be fiscally conservative while going into debt. I understand. You're right. You're absolutely right.

I say to people all the time, Ryan, that it has to be balanced reasoning. You can't say, well, I'm very conservative and I avoid risk on, you know, when it's time to hold on to the savings because where was that reasoning when it was time to go into debt? And so that's kind of where that's that's where we have to question and go, OK, what are we really saying here? What we're really saying here is we just like the feeling of being able to say I have fifteen

thousand dollars in the bank. It's kind of like, you know, that's really what it is. And once you realize that and go, OK, suddenly the logic that I had kind of falls apart when we look at this thing as a whole. Now, you know, now you just have to ask yourself simply, do I want to be debt free or not? And how quickly do I truly want this to happen? Let me show you how quickly you'll get back to peace. So how much money do you guys make a year? 190. You make 190 grand.

And what are your total debt payments add up to every month right now? Right now they add up to approximately $1,300 per month. Okay. So lay this out with me. Let's say you're completely debt-free in a month because you followed all the advice we just gave you. You make 190 grand plus you freed up another 1,300 a month, which means you freed up 15 grand a year plus all of the margin from your income, which doesn't have to go to debt payments. How quickly could you get $15,000 back in that savings account? Three months.

Three months. So if you play this whole thing out, in about three months, you're back to where you are, except you're completely debt-free with this savings. No, you're right. Sometimes you just got to hear it from somebody else. That's right. Yeah, good. I mean, this is such a solvable problem. It makes you excited for you. Most people that call in, their car's underwater, they don't have any money in savings. And so you have a lot of great things going for you. We were just doing a few things at once instead of focused intensity. And you'll never have to touch debt again, making $190 with no payments. Listen, just had to shift the old mindset there, which,

you know, sometimes you do get locked in. People do get locked into the feeling of having that savings. It's kind of a security. It's almost like, you know how the last segment, you said the three stooges of the bad investing. It's almost like some of that kind of exists with savings too. It's like you get hung up on fear and security. Like I would love for you to do a word play on that, George. That seems right up your alley. It's like a little blankie. It's like a little security blankie. That's also, it's a, it's one of those heated blankets that's plugged in and all it takes a little bit of rain and all of a sudden that becomes an electric blanket. Oh, I was about to get zapped. I thought this was good. I was about to say, cause I love a heated blanket. Get me out of those. I don't

want to get electrocuted. All right. Today's question of the day comes from Tom in Nevada. He says, I received a monetary gift from a sibling and his wife 20 years ago, which was under the amount that required anyone to pay taxes. They offered it to me without my asking. And I was told numerous times by my sibling, this is a gift. Our relationship has changed over the years, and my sibling has told me to repay him and his wife back. If they were in need, I would do all I could to help them as they did me, but that is far from the case. Paying them back would not destroy my financial

situation, but it would make a much greater impact on my situation than theirs. What advice can you give me in regard to this? Where's Judge Judy when you need her? I know. Okay, so let me recap here. A sibling gave you the gift, and now they're like, I want my monies back. And you're saying, what he's really saying is they're loaded. They don't actually need this money. Our relationship has changed, aka things went south. We're not on good terms. And this is a weapon that he's now using against me. Uh-huh. And just for the listener, so if it's under the amount that's required by anyone to pay taxes,

that means it's probably below $16,000. Like that's the limit on gifts and gift taxing. Yeah, it doesn't go toward your inheritance gift tax amount. So this could be kind of a substantial amount. This could be like $10,000. This could be $5,000. Or it could be like $500. We don't really know.

She doesn't say how much it is, but I mean, it sounds like this relationship was over anyways. He has no real recourse legally. I mean, this was a gift and there's no way he can go back and say, he owes me this money legally. He wants to come after you.

If I'm in your shoes, I'm going to say thanks for the gift. It was a gift. I'm in your shoes, I'm going to say, thanks for the gift. It was a gift. I'm not able to pay this back. And I hope you have a great life. Yeah. And you don't have to feel negative about that. You don't have to. She doesn't have to lose a wink of sleep. This is the second question of the day in a very short period of time that at least I've read where a family member has given another family member a gift and then then decided for multiple reasons to say it's not a gift anymore and that's just well they use it to hold it over your head

later in life then it's not a gift no and let's okay so if you're on the receiving end let's talk about it from this um point of view george if you're on the receiving end of someone who wants to give you a gift you do need to not get all starry-eyed and get all like, yes, or I needed this money or great. You really do need to kind of think about if you want to accept the gift because you don't have to. There's a part of that that you can go, you know, is this the type of person who might hold it over my head later? Is this the type of person who might want something in return even though they say it's a gift? Is this the type of person who might want something in return, even though they say it's a gift? Is this the type of person who might, you know, make me feel some type of way or make it seem like I owe them? So there is a bit of vetting that the receivee should do on the

front end before they become the receiver. Yeah. I love the quote, choose guilt over resentment. And right now, I think what's going to happen is one of two things. Either he gives the money back and then Tom here is resentful that he had to give this money back, already ruined the relationship. Or he doesn't and instead he feels a little bit guilty about it. Like that. Versus resentful, which is a little more, that's a poison you drink. Yeah, I can get over some guilt.

And truthfully, this relationship has been over. I don't know what changed over the years. We don't know the story there. Yeah. But it doesn't sound like in any case, the relationship will be solved and magical and healthy again. Yeah. If the money is given back.

I don't I don't think Thanksgiving dinner is going to be any better. Yeah. I just need people to stop trying to control other people. You can't control people. And a lot of times we use money as the tool where we think we're gonna gift a financial gift is one of the most disgusting things a human being can yeah yeah this is this is bad bad i'm sorry yeah i'm grieving the loss of the relationship more than this money situation that's a bummer with a sibling yeah this is The Ramsey Show.

What's going on, everybody? You're listening to The Ramsey Show. Hey, we're glad you're here. I'm Jade Warshaw. Next to me is George Camel, and we are taking your calls. If you've been listening to the show and you like what you hear, make sure you are liking.

Make sure you're subscribing. And more importantly, and I'll say equally importantly, make sure you're sharing it with somebody who you think can benefit from what you're hearing on a daily basis. Because the truth is, this is life changing content. Once you get your money in order, it's a big deal, George. I always say there's three things that are probably the best choices that I've made. Number one, choosing to follow Jesus Christ. That goes without saying. That's number one. Number two, marrying the right person.

Sam Warshaw, shout out, best choice ever made. And number three, choosing a financial path that allows me to pay off debt, allowed our family to be on good financial footing. Those are top three for me. Like money follows you everywhere. Like you can't avoid it. So I really place it up high.

And so the content that you're hearing on shows like the Ramsey Show, if you listen to George Camel, you know, on YouTube, if you listen to Smart Money Happy Hour, The Dr. John Deloney Show, Ken Coleman, all of that content, man, it is so, so important. So if it has changed your life in any way, pass it on. Pay it forward. Share the show. It's completely free and you can choose to change somebody else's life by doing so. So off my soapbox, if you want to give us a call, the number is 888-825-5225 and we'll chop it up with you. We got Kayla, Las Vegas, my favorite city.

What's going on, Kayla? How's it going? Going well. What's going on in Las Vegas? Thanks for taking my call. Yeah. Yeah. Very hot.

And we're struggling out here. Oh, man. Tell us my call. Yeah. Yeah. Very hot. And we're struggling out here. Oh, man. Tell us about it. Yeah. So just kind of long story short, essentially, we're in a really like drowning in debt. We've got about 50 grand in credit card debt, which we were like getting ourselves out of. And then eventually it just turned into couldn't get ourselves out anymore. And then living off credit card, trying to put food on the table for our babies and then um about 60k in

student loans we're in a hole with our um two of our jeeps we owe we're just uh one is a 900 payment one's a 400 payment what's the full amount of the first jeep um 40k on that and we would be it's worth about 31. Yikes. So we were in a bad car position and that was what they were willing to swap us out for and essentially just really bad situation. I'm a stay-at-home mom. My husband's a teacher. I'm going back to work in August to be a teacher but we wanted to move out of state, and we were almost to the point of wanting to just sell our house and take all our equity and put it in to pay off all the debt. Well, let's look at it.

So we feel like, yeah. So Jeep number one is $40,000, but it's worth $31,000. What about Jeep number two? Jeep number two, I think we have about, it was $45,000, and I've had that for a long time. We have, oh, about 17 on it. Okay, 17. What's it worth? And then what was that, sorry?

What's it worth? I think that one's only worth about maybe 50 we got last time. Okay, so that's not as bad upside down. Yeah. Then you said, so it's credit card, student loans, two Jeeps. Then what do you, tell us about your mortgage. So our mortgage, that was the other problem. We moved about two years ago into this house,

and we thought we were going to be at one interest rate, and then right before we closed, interest rates went up, and we're at a $3,200 mortgage. What's your take-home pay? My husband makes $90,000. He makes about $5,500, $400 a month.

That's where the problem is. A big problem. Last summer, we literally were to a point where we were going to buy Costco groceries and then next day we'd have to go return our food because we had to pay bills. And so we turned to like a debt relief program. And I feel like ever since then,

it's gotten even double worse because now our credit is so bad and we can't do anything. Looks like we don't see a light at the end of the tunnel. Yeah, you're in a hard spot right now. There's always light though, and there's always hope. So I don't want you to think that all hope is gone because it's not. It's just going to take some time and some, a little bit of pain possibly, and some discomfort to get out of this, but I promise it'll be worth it. So looking at, looking at all of this, tell us about your income. So with the 5,400 a month he makes right now, when I go back in August, I was staying at home because what we would pay in child care would have,

I mean, it wouldn't have made sense. But now with the pay raise we'll be getting as teachers, I'll be making about $70,000. And then we'll be spending about half my check towards child care. So I'll be taking home a little extra. How much do you think? Probably about $2,000. Okay, so that brings us up to $7,400, which helps this mortgage look a little better.

It helps give us a margin to pay off the debt. Because right now, what are your total credit card payments? Oh, well, we put a lot of them in a program, and then now ever since we've worked, yeah, yeah. So we, but I mean, one of them we're being, I don't even know if I'm allowed to say the word, but sued for. Yeah, so we just don't know what to do. Do we pull them all out of the program?

Well, they're not all in the program, just half of them are. What is this program doing? Do they tell you, hey, don't know what to do do we pull them all out of the program well they're not all in the program just half of them are what is this program doing do they tell you hey don't make any payments let it trash your credit we'll negotiate exactly oh gosh exactly and that's why we got sued because we weren't like responding and we thought it was being handled and then it was yeah these companies are scummy they're just as bad as the credit card companies, if not worse. Yeah. And we're just scared. We have a four-year-old and two-year-old and we know we're taking blame, but we just don't know who to turn to, essentially. We're kind of silently struggling right now. Okay. So for me, the big glaring problem, this mortgage is really eating your lunch. 60% of your take-home pay is going to the mortgage. 25% of your take-home pay is going toward these just-a-car loan payments, which is 85% of your take-home pay, which leaves 15%.

And you still got to pay your student loans, the credit cards, put food on the table, cover insurance, utilities. So are you guys continually going into debt to cover the gap? Yeah. Yeah. Well, yes and no. We don't use any credit cards right now my mom helps us she helps us a couple hundred bucks a month where she can um and then other than that we've really

just tried to cut out almost everything and we've been trying to sell like some stuff around the house and that kind of thing what do you owe on the house and what's it worth? So we purchased price was like $616 actually I think and we owe about $460 and I think we just looked into selling and they said we could probably list it for around $630.

Okay, that's good. So after fees you might net like $140 out of that. Yes. Which would clear all of your debt almost, or at least give you enough to get rid of the cars, get different beater cars, get rid of the credit cards and student loans.

Have you priced out what it might be for you guys to rent a two-bedroom apartment? Well, we have not because we have five dogs, and most places don't allow it. Five dogs? Goodness gracious. Okay. What would it cost to rent a house? Probably about, I think they said we could get about $3,000 a month to rent it. That's not changing much for you guys.

No. I mean, that's a $200 difference. Could we buy another house with that credit or is that not possible? You can't afford to buy a house. You have to have a down payment to buy a house with that credit or is that not possible you can't but you can't you can't afford to buy a house you have to have a down payment to buy a house and you need to have three to six months of expenses to buy a house your debt to income ratio is out of whack and so you're not going to be able to just go over you need to put pause on home ownership and we need to clean up all this debt and and i'm gonna say something highly controversial and highly you might just

be like jade forget you don't let these dogs keep you from doing what you need to do for your family if you need to rehome these dogs to a wonderful family who'd be psyched to have them and can take care of them and you can visit them but do not let these dogs keep you from getting in the living situation i'm talking about dogs are eating and you can't eat because you got to return your groceries to costco we got our priorities out of whack five dogs is a lot of dogs for somebody who can't who's struggling to afford groceries yeah and i hate to say that because we love our pets but in this case a dog to every one of your family members for the next year until you clean it up and see what's next

yeah so we have about 10k in savings we start, should we put those towards all credit cards? That helps. Well, it's almost the amount you're underwater on in the car, which could get you out of the car. So I might just save up until I can buy a beater car, use that money, savings plus that newest savings amount, and get out of this car situation. That's good. Free up payments. Yeah, that'll give you a little breathing room there.

But not much. That right there is excellent, but it doesn't take the place of the living situation, which is A1. I think we still got to get rid of this house. Yeah, unfortunately. So sorry, Kayla. This is tough. No matter what's next, it's not going to be fun. But I want to get you to peace as fast as possible.

This is The Ramsey Show. You're listening to The Ramsey Show. You're listening to The Ramsey Show, and I'm Jade Warshaw. Next to me is George Campbell. Taking your calls, 888-255-225 if you want to get on the line. George, the housing market, the way things have been has got people feeling some type of way. It do be like that. And I feel like we've moved, and don't get me wrong it's crazy out there it's truly bananas no matter where you are in the country and i think it's

taken people to a new level of desperation that we're seeing it's like i gotta get a house i gotta get a house and some some crazy trends are popping back up that we really haven't seen the likes of since 07 088, the types of things that brought us into that busted the bubble, you know what I'm saying? Back in the Great Recession. We say the word house poor a lot on the show. And what that means is too much of your income is being taken up by your housing expense. And so if you make five grand a month take home and your mortgage is $3,500, you're going to have a really hard time eating, building wealth, paying off debt, getting an emergency fund, going on vacation. And that's why we tell people, hey, 25% is the limit.

Now, what that means is sacrifices must be made. We can't live in this area. We have to get a condo instead of a single family home. We have to get a roommate or two. But these are the sacrifices that you have to make in order to still accomplish your financial goals. And that 25% is all in. I mean, that's everything. Taxes, insurance, HOA. We're talking about everything that could be comprised in there because sometimes people try to separate it out. And I'm like, no, it's everything in there. Yeah. And this applies for renting too. Yeah. If you rent, like this guy called in yesterday, he's rents $2,100. He brings home four grand and he was wondering why he couldn't figure out, he didn't have any margin. I went over half your income is going to pay rent. So get her. He's a

young single guy. Get a roommate. Anyways, let's talk about the scariest latest trend in the mortgage world. Zero down payment mortgages return. The return of the zero down payment mortgage amid high housing costs. George, I wanted to jump out of my skin when I saw this. United, here it is. United Wholesale Mortgage. It's UWM. It's like a billionaire.

There's a billionaire at the helm of this company. And so he's launched a new zero percent down mortgage program. And I'm going to read this as it is, but just know, I don't think that this is good, but they make it sound good. This program allows qualified buyers to finance 97 percent of their home's value with a first mortgage. The remaining three percent up to 15,000 is covered by a secondary mortgage so you start out with two mortgages that carry no interest but and this is a big old booty must be repaid in full when the home is sold or the mortgage is paid or the mortgage is paid off or you refinance that's a lot that's some handcuffs right this is a tiny prison that you are paying to live in.

That's what's happening here. So here's an example. Purchasing a home at 300 grand would entail a $9,000 no interest loan for your down payment. To qualify for the maximum 15 grand, your house would be 500,000. So the maximum you could get is 15,000, which means the maximum home price would be 500 grand. But can we just talk about the big elephant in the room, which is you want to get a half a million dollar mortgage. If you, do you really think you should be getting a half a million dollar mortgage if

you can't put up any cash for a down payment? Most people doing these are broke, which means they have no savings. They have no emergency fund. One emergency pops up, they're going further into debt on credit cards and trying to keep up with a massive mortgage. Yeah, massive. And I'm just, you know, this is steps away. I don't even think it's steps away. I think it is a catfish of a subprime mortgage. The only difference here is that you do have to have a 700 credit score or higher.

So there's that. And there's a threshold if you earn up to 80% of the area's median income that you could qualify with a lower score of 620. 620 or higher. Yeah. And I love the quote from the CEO here, this billionaire. He's like, it's going to change the game this purchase season. No other wholesale lender in the country offers this. This is the equivalent of saying, hey, what a blessing it is to get a 0% car loan that you overpaid for. It's someone who makes $40,000 by a $60,000 car.

That's the equivalent here. And I believe I read somewhere that, I believe it, you can look it up for yourself, but I believe I read that with the zero down, the mortgage rate is slightly higher as well. I imagine they screw not getting fees. Yeah, you're winning here. There's a reason he's a billionaire. He's not doing this to be generous. That is so true.

But, you know, I have to say Americans, we have a short memory. We really do. We we come upon hard times when it was 2007, 2008. It was like I've learned my lesson you know and everybody kind of learned their lesson and then we acted stupid just a few short years later and then covet happened and it's like i'm drawing a line in the sand and then you know coven money started coming and we started acting stupid again and now here we are again and it's like you know we get desperate and dave says all the time after you get, pretty soon you're getting stupid. And we're seeing zero down mortgages and we're seeing a comeback of things

like 40 year mortgages. And I read George that 15 year in the last two to three weeks, we've seen a 15% increase in adjustable rate mortgages as a way for people to get in and be like, I'm going to lock in this rate for five years. And then at the right time, it's like you're on the one hand, you're making a very short sighted choice because you're saying I'm going to get an adjustable rate mortgage and I'll refinance later. But then you're also trying to predict the future by saying that you'll have the ability to refinance at a lower rate and the market will be exactly what you want it to be. And all of this- Basically people justify their way into these terrible situations and get starry-eyed about what the future will be on paper. And here's the real

risks. The main risk is that you start with no equity since you're not putting any money down. You're 100% financing this, which means you're probably going to be underwater on your home if the market changes at all. 100%. It's a scary place to be. Another issue, if you need to sell quickly due to unforeseen circumstances, which happens, in that case, you still need to repay the second mortgage. You owe it all in full at once. Even if you're underwater and don't have the money. Which means you're coming out of pocket or you're coming out into more debt to do it. Ooh, that's scary. And if you want to refinance, well, you need to have the funds because you got to cover that 15 grand you borrowed. Yeah, you can't even refinance. So let to have the funds because you got to cover that 15 grand you borrowed yeah you can't even refinance so let's say you jump into this mortgage and let's say rates do go down

let's say in the next i mean we can't predict this but let's say by january we go into a new year new election cycle you know election cycle's over and let's say interest rates go down but you've already gotten nice and cushy in this zero down mortgage and you can't even refinance because you have to come $10,000 out of pocket to do it or $13,000 out of pocket to do it. And you can't. Now you're stuck. Like these are the things that, it just, it bothers me. It makes my heart hurt. It makes me turn into a little curmudgeon. You know, I'm just like, why? You were already a curmudgeon. I was already there. This is not helping anything.

So please do not fall for these mortgage traps. If you listen to the show, I pray that you are smarter than falling for traps like this. Yeah, back when this stuff was popular. That prey on people. Back when this stuff was popular, George, you know, 07, 08,

back when arms were popular, back when most of those, I read a stat that said one out of eight ended in foreclosure because people who couldn't afford something were just trying to hustle and get in line to afford something they couldn't afford. Meanwhile, what's the harm in renting? Can we talk about that? What's the harm in you just going, listen, I can't afford it. Well, I'm not building equity, Jade. I'm throwing money away every month.

Are you? Or are you just buying time to where you can afford something and actually have it with peace? George, I tell the story. I'll tell it again because somebody probably hasn't heard it. You know, my husband and I, we rented for 11 years, 11. And for one of those years, the year that goes down in infamy, we had roommates. As a married couple. As a married couple. And, you know, I don't take it back. It gave us time to pay off our debt. It gave us time to save up our three to six months.

It gave us time to save up a down payment. We saved up a little bit of extra money because the house that we moved into was, needed some work, needed a lot of work. And we were able to do a little bit of it to move in. But it's worth the time to do things right. Baby, you can do it. Take your time. Do it right. Do you know that song? Thank you for that. You know, I wish I could. It's do it. Take your time. Do it right.

Do you know that song? Thank you for that. You know, I wish I could. It's a lyric. I'm not as hip as you. I think it's chic. But anyway, take your time and do it right. That's all I'm saying. That's good. Yeah. And it's hard to go, I got to wait to buy a house. I know home ownership is an amazing goal. It's an amazing dream to have. But this American dream that we're going to own a home one day, it's become a nightmare for so many families that fall for traps like this. It's an amazing dream to have. But this American dream that we're going to own a home one day,

it's become a nightmare for so many families that fall for traps like this. It is. And you can hear it almost every call. They go, our mortgage is 50, 60%

of our take-home pay and we can't breathe. And now we're considering selling our house. Don't let that be you. That's even worse. You know, you think about how emotionally

invested you are when you buy a house, then you have to turn around and sell it. That's why. Wait until you're debt-free. Wait until you have the emergency fund you are when you buy a house. Then you have to turn around and sell it. That's why. Wait until you're debt free. Wait until you have the emergency fund. Wait until you have a solid down payment so this house is a blessing, not a burden.

Hope this helps somebody make the right decision. This is The Ramsey Show. From Ramsey Network, this is The Ramsey Show. I'm your host, Jude Horshaw, joined by George Campbell. We're taking your calls all hour long, 888-825-5225, if you want to talk. Let's head straight to the phone lines, George. I'm ready to get into it. How about you?

I'm ready. All right, we got Hannah from New York City, New York. What's going on, Hannah? Hi. I'm just wondering what you do when you sort of reach a point of being stagnant in your finances. We've paid off all of our debt, but we have two young kids. And, you know, we have an emergency fund. We have three months of savings, but now we're just paycheck to paycheck paying for daycare. And it's just we have the potential to send our daughter for another year to daycare because she's like so close to the cutoff date that she really needs another year before going to public kindergarten. But we, I just like can't deal with the fact that we are barely making ends

meet and we're just hanging on and can't meet any savings goals. So it sounds like you were able to do all the debt-free, all the savings before the kids came along, right? And before they went to daycare. Yeah, we were very lucky that our parents set us up with like very little debt. So we didn't have that far to go in terms of paying off the debt. So it was mostly saving. We saved for a house. We bought a house. Okay.

And then we saved and we had three months of savings, which we had to add to when we had kids because our expenses went up. But, you know, after that, that's it. We basically haven't saved since we had kids. Got it. And what's you guys' income? We make about $132,000 combined after taxes. Okay. In New York, New York.

Okay. In like a super expensive area. How much are you paying for daycare, can I ask? Yeah. We pay about $2,500 a month for both kids and it's going to go up next year to be like closer to $3,000, which is like the cheapest you can find in the area. Yeah, that's about right. No, I'm not. I'm not faulting you on that. And how many more years of daycare will you be paying for? So my oldest would need one more year if we were to hold her back. And then my other one, because she also is right up against the cutoff,

because we got pregnant just at the perfect time. Great timing, Hannah. She would need another three years. Okay. So you'll free up one of them after a year, but then you still have another two years after that. Right, exactly, for my younger one. Well, you know, life happens in seasons.

And if you're unable to make giant headway on baby steps five and six until those seasons are over, that's okay. It's not ideal. But the key is, are you able to still invest 15%? Well, we can't do 15% right now. We're just doing whatever our company matches. We're just meeting with the company match. So for me, I invest 6%, they match 6%. And for my husband, it's 4% and they match 4%. Well, what's the trajectory look like for your careers? I mean, my income has gone up like 40% in the past three years. Um, it'll probably go up

more, but I think I'm kind of reaching a little bit of a peak, um, there. Um, um, my husband is in line for a promotion next year. Um, so we're hoping to see his income go up by 15% or so next year. And, you know, there's no necessary like cap. We're mid-level right now. So we could excel more. What about your housing expenses? Our mortgage, including property taxes, is to about $2,200 a month. Okay. That's reasonable for your income.

That's not bad. We bought like a tiny, tiny, tiny house, um, at a below 3% mortgage. So we're lucky in that regard. Uh, we just have really high property taxes. Is there anything else that's standing out? I mean, obviously- You guys are bringing home 11 grand a month obviously 2500 toward daycare 2200 for the mortgage but there's still a good amount of wiggle room here is it lifestyle on medical expenses um this year we had a ton of emergency medical expenses one of my kids is high needs so she gets like a lot of private therapy what's that cost a month? It could be $800 to $1,500. Okay.

Okay. So it's significant. Okay, still working down the $11,000. I'm trying to figure out what's the high-ticket item. Here's the key. We're trying to help you find some margins so you can invest that 15%, have some money left over to enjoy life. And part of that is figuring out ways you can spend less

and figuring out ways to make more. Those are the only two ways to enjoy life. And part of that is figuring out ways you can spend less and figuring out ways to make more. Those are the only two ways to create margin. So you can do this exercise on your own with your spouse and lay out that every dollar budget. We'll gift it to you, the premium version with all the fancy features. But as you list it out, the question you want to ask is, do we need this? And can we do better? Even if that's insurance. I helped a friend here at work. She has had crappy insurance from Progressive for the last 10 years. And I went, hey, reshop it with Xander. She saved $80 a month instantly with better coverage.

And so things like that you may not be thinking about. Or if you get a big tax refund every year, change your withholdings to get more in your paycheck. Right. Well, part of it is we were under withheld this year. So you owe taxes? Well, we paid it from our savings okay because but we it was about seven thousand dollars so that came out of your emergency fund that came out of our yeah of our three months you know did you replenish it no that's what I was like I'm struggling to to find that room to replenish it and I'm nervous

um yeah I think George is right I think this is you guys going through uh because you do make a good income and yeah you have a couple of your mortgages in a really good spot but plenty of people have you know two kids in daycare and with you guys's income you should be able to make this happen I think it's you guys going through and seeing what are we spending money on what can what can we cut back on and George said it earlier it's very true sometimes you're just in an expensive season and you guys get to decide if you want to and I just can't accept it well I do think I do think that if you go through your budget you're going to be able to find some money I really do think that um and it's going to be able to find some money.

I really do think that. And it's going to be up to you guys saying, is this a necessity? Do we need this right now? Can we cut back? And then it's up to you guys if you want to decide, is there a way that we can bring in some supplementary income? And if we do, are we willing to do that for the next year until one of these kids graduates up to kindergarten?

Right. Okay. It's just tough. But I do think with your income, you're going to find that money. It's going to take doing some research in every category, even with your child, you know, needing that therapy. Are there more affordable alternatives that we can look into through our health insurance? There's a telehealth. Are there other things that we can do? And that's going to take some digging, but I feel like you do, you know, six or seven things and it all adds up and you go, oh my gosh, we freed up a thousand bucks. Now we can invest 15% and live off the rest and still attack our goals. And I just know

seasons can turn into patterns and it turns into, this is just our life. And I don't want you guys to end up there five years from now where nothing's changed. Yeah, I agree. I agree. And again, once you're debt free, it really does take away all of those kind of ankle biters that eat away at your margin. And so for most of us, it's our rent and our mortgage. That's number one. If you have daycare costs, that's easily number two. And a ultra high cost of living area like New York City. They're in a very high cost of living area. You have to make high six figures in order to live in these areas. Yeah. It's just a part of it. Yeah. And so I just wonder what else is, what else could be eating away that's kind of maybe normal to them. But if they go over it with a fine tooth comb, they'll go, oh, maybe this isn't so. And I'm such a nerd.

I find it fun, but I have no hobbies. And so I don't encourage that. Okay, George. Jay has has no comment there I don't know what to say there's an honest moment from George and I regret it this is the Ramsey show hey you're listening to the Ramsey show I'm Jade Warshaw joined by George Camel author of Breaking Free from Broke I should say best-selling author because that's very very important well we gotta throw that in there you know you're you're in there too jade money's not a math problem we launched around the same time listen george i'm gonna give props where props are due yours is like a full-size large orange book it's very aggressive mine's a little floppier but you know it's about the content it's about the content all i'm saying

is get your copy today breaking free from broke it's popping off or you can watch george on his world-renowned youtube channel we are having a good time yeah you guys are doing children of all ages and even adults of all ages adults of all ages anybody can enjoy it it doesn't matter your station in life it's there i know that because the boomers comment and they let me know we don't appreciate the boomer jokes. And I go, this is the problem. You're only making me want to make more boomer jokes. Let me have some fun. They're setting

them up. You're knocking them down. I love it. Well, hey, if you want us to answer your questions about your life and your money, you can give us a call. The number is 888-825-5225 and we'll help you out. We got Jim. He's in San Antonio, Texas. What's going on, Jim? Hey there, George.

How are y'all? Doing good. Good, good. Where I am, I'm a boomer. I'm over 60. I am currently renting. Annual income is $140,000. I have five vehicles, two of which are paid off.

Hey, Jim, can you do us a favor and talk directly into your phone? We're having a hard time hearing you. It's a little crusty. I'm sorry. I thought I was. Is it better now? A little bit. Good enough for government work.

We'll keep it moving. Tell us again. So you've got five vehicles. I'm a boomer, 60 plus, and I make $140 a year. I have five vehicles, three of which I'll be getting rid of. Currently, one vehicle has $35,000 I owe. One is, and the other two are paid off that I'm going to be getting rid of. And I'm on the plus side on everything except for the one that I'm going to keep.

And that's $65,000 I owe on it. I just got it in December. $65,000 you owe on it? Yikes. What about the fifth one? I got four here. Yeah. Oh, it's an RV, actually.

And I'm kind of half and half on that. I might owe a couple of thousand after it sells. Okay. So it's no big deal. I have it. I have it. So what I want to do is buy a house in the next nine months to a year tops. So what should I do? Should I go with a current structure, you know, an already built, or should I go with new construction? Which would be best in my scenario of being a boomer over 60. I don't know what you being a boomer has to do with it.

Do you want a brand new build that's going to be a part-time job to keep up with and managing, or do you want to just be able to move in when you want to move? I'm going to move in when I move at my discretion. The thing is, I'm scared of new builds just because the quality isn't there like they don't make them like they used to and i mean you don't get as much for your money i mean when you're buying brand new so much of what you're spending is on the fact that it's brand new you know where you could get a something that's pre-existing and get a little bit more square footage and you know it might have a little bit more years on it, but it really just depends on what you want.

There's pros and cons with each. And you've gotten more negotiating power with an existing house. The new build, the pros there are the new build, you'll have a one-year home builder's warranty, which is nice. That's nice to have. And you have built-in time to save up. So if you say, I'm going to start building now, well, with a traditional build in a neighborhood,

you can have the money when you're ready to close. And so it kind of gives you a fixed price you lock in and some time to save. So there's some pros on the new build side. I don't think one is better than the other, but I think for your situation, I would just buy an existing home. Are you going to buy in the San Antonio area? Well, it'll be not in the city.

I do not want to live in the city Antonio area? Well, it'll be not in the city. I do not want to live in the city. Loud and clear. I hear you. I want to be on the fat, living off the fat of the land. What are you thinking of spending? $250,000 maybe. I want to keep my mortgage payments under $2,000. Okay. What do you plan on putting down? $20,000 down. Okay. And let's go back real quick to these cars because, I mean, you almost had $100,000 in cars. So you said you had two of them were paid off.

What are they worth combined? Okay. One of them is a motorcycle. It's worth about $8,000. Okay. Okay, one of them is a motorcycle. It's worth about $8,000. I have a Dually, F-450 Dually. It's worth about $75,000 and I owe about $35,000. Okay, it's worth $75,000. Okay. So, the funny thing is I'm keeping the one that's probably not, I'm probably upside down in, but it's a specialty car and I'm going to hang on to it. Okay. So do you have a plan to pay off any remaining balances that exist?

I'll do that as quick as I can. You know, I've got to wait for the money to get there before I spend it. I know that much. How much do you... So you make $140,000. My concern is you're not going to be ready to buy in nine months because here's the prerequisites to buying a house. You're going to need to get rid of all of your debt, which right now is over $100,000.

All right. And then you need a fully funded emergency fund, which looks like three to six months of savings. Then you need to save up a solid down payment. I have $16,000 in here right now.

You got $16,000 aside from the $40,000, right? $40,000. For the down payment? You said you're going to save up the $40,000 to put down? Yeah, but once I sell the vehicles and acquire what I have over, like for the truck, I'll have about $25,000. So George is saying, what George is saying-

But you still need to pay off the other car loan, the $35K, the $65K for the RV. You've got to clean up the debt first, and then we kind of have a better foundation. Okay. So— Yeah, I mean, yeah, I wouldn't mind going that route, too. I agree. I agree. I want you to just have some freedom as you, you know, enter some golden years here and

not be weighed down by a big mortgage and all these debts that hadn't been cleaned up. You have a great income. Let's use it to clean up this debt fast, sell everything that you don't need, which is pretty much everything in your life right now, and just start fresh. Debt-free, emergency fund. And if it takes you another year and a half before you have debt freedom with an emergency fund and a down payment, I'm okay with that. I wouldn't be in such a rush to buy this house. And the insurance on all those vehicles is really killing me. Yeah, I bet. What do you actually need? Can you just live with one vehicle? Can you get rid of the RV, get rid of the motorcycle, get rid of all the cars except for one?

Yeah, the motorcycle's been paid off. I have another truck that my daughter is driving that is also paid off so you know the ones that are not paid off i have possession of so and but i do plan on getting rid of all of those it just feels like it's eating away your income whether they're paid off or not it is it is okay are you upside down and and all of them that aren't paid off it's because you said that the one that's 35k what's the situation on that what can you sell it for i can that's the uh duly that i can sell for well over 70 okay oh okay okay and then okay i see 35,000 on it i see i see well our parameter around you know things with motors and wheels is that shouldn't be more than half of your annual income.

Right now, you are way above that with this RV and the motorcycle and the truck. And so that's why I'm saying if you want to keep just the truck and sell everything else, the motorcycle, the RV, whatever, then it would be okay to keep the truck. Otherwise, this truck has got to go. That's a lot of truck. And you can downgrade it. What are you hauling around over there with your dually?

What's your line of business? I'm sorry? I am a construction quality manager. So are you using this for work or do you have a different vehicle for work? No, I have a company vehicle. So technically I have six vehicles.

So you don't need this dually? This is just robbing you of your... No, no, I plan to sell the dually, y'all. Okay, good, good, good. Yes. Oh, absolutely. I don't need it anymore. So what are you going to keep out of your five cars?

Tell us which one you're keeping. You're keeping the $65,000 one, right? I'm keeping the Mustang Dark Horse. Yes, I am. And you're selling the RV? It's the old man in his sports car routine. Yes. There we go.

What color is it? It's blue ember. It is beautiful. I'll look out for you on the outskirts of San Antonio if I see a guy going over the speed limit. At the red light? That's Jim. He did it.

He paid off the debt. He's in that house. Oh, I love it. He's driving like no one else. Six vehicles. That's just that house. Oh, I love it. He's driving like no one else. Six vehicles. That's just a lot to keep track of. I've had a hard time keeping track of all of them. If I got six kids, I won't remember their name.

Let alone the cars and the insurance. Oh my gosh. And the payments and what you owe on it versus what it's worth. It's just a lot. And it was draining his income. Everything's bigger in Texas. You know, even the car payments. I'd have to get a ladder to climb up into his dually.

Tell you that much. This is The Ramsey Show. I'd pay good money for that. You're listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw, joined by George Camel. We are taking your calls. We've been having a good time this show. So give us a call, 888-8, two, five, five, two, two, five.

Let's get in to it. George, the 20th anniversary. It's here. Of what? Total money makeover. Can you believe it? We got to get it an anniversary gift. I know we do.

What are you going to get it? What's the 20th anniversary? Like, you know, I was like metal paper. It's like silver. Is it silver? Somebody knows. Put it in the comments. I'm Googling. I know you have to. It like metal paper it's like silver is it silver somebody knows put it in the comments i'm googling i know you have to it's like maybe it's bronze it's pretty serious but anyway the total money makeover it's helped over 10 million people pay off debt and build

wealth i'm one of those people george you're one of those people that's right it's the simplest most effective most straightforward proven plan to change your finances. You can solve your hardest problem with the least complicated money book you've ever read. And it's so true. It's not complex. Anybody can read this and go, oh, I get it. Like, you don't have to be a financial person or a math nerd. It is for regular, everyday people.

You will understand it. There's not a bunch of lingo or jargon inside of it. An everyday person who doesn't know anything about money can read it and take next steps and feel very, very confident. The Total Money Makeover has updated and expanded the statistics because those change over time. Advice on mortgages, car loans, investing for retirement, paying for college, buy now, pay later. So it's updated in today's terms with today's stats and everything like that. And here's the thing that I'm most excited about. If you like audio books, Dave himself, the big eagle himself has re-recorded

the Total Money Makeover audio book. So it's fresh. Love it. Plus every book includes three months of every dollar premium for free. If you don't know what every dollar is, you've been under a rock. It's the best budgeting app that's out there. So you get three months free with that. So go to RamseySolutions.com slash store to get the Total Money Makeover 20th Anniversary Edition so you can become one of the millions who've said goodbye to debt and who've built wealth.

20 years worth of success stories, George. That's amazing. That's what's cheering you on. I love it. Also, I found out the gift for 20th anniversary. What is it? A traditional gift is China. Contemporary gift is platinum.

China. Platinum. The gemstone is emerald. So I know what to get Dave now. An emerald ring? Just emerald the color. Yeah. Like what?

Like a polo shirt? A gemstone emerald. Oh, like in a ring? Is that what you're getting? I guess I'll Like a polo shirt? A gemstone emerald. Oh, like in a ring? Is that what you're getting? I guess I'll get Dave a ring. I don't know if he's a jewelry guy. He's not gonna wear it. But we'll see. You know. We'll see. I'm proud of him. That's amazing. What a legacy to leave. I am proud of him. That book is just still like, it stays at the

top of the charts year after year. And it's because the content is truly transformational. Yeah, still hits. So give it to someone if you've read it and it's changed your life. Yes, which is almost all of us. All right, Willie in Denver, Colorado. What's going on, buddy? Hi, how are you doing today?

Doing good. How can we help? Yeah, so I recently won a truck for, they said the truck's value is $42,000. And so I'm trying to make the decision on what I should do with the truck. Whenever I go to sell it, the best price I can get for a cash offer is $31,000. What? It's brand new? Yes.

How'd you win it? Tell us more. On a game show? So I do remodel. No, I do remodel for work. And one of my suppliers opened a new store, and they were giving away a truck if you showed up and we showed up and we won wow what kind of truck is it tell us it's a 2024 chevy colorado lt um the kicker to it is is that it's only a two-wheel drive so that's kind of why we're getting like these low ball offers as far as you know not getting close to the full value. But bright red only had 25 miles on it when we picked it up.

Wow. Yeah, the truck's great. So our debate is, should we keep it forever and not worry about the depreciation on the truck? My wife, she needs to pay more. Did you have to pay taxes on the winnings? Yeah, so we got to pay $8,000. And that's why we thought about, you know,

getting rid of that $8,000 buy, trying to get an EV vehicle. But basically, long story short, for an EV vehicle that qualifies for the tax credits, we end up having to finance $10,000 in her car that she has already paid off. And we're not really too hot on financing. So you don't want the truck. You want to sell it. It's really worth $31,000. You have to pay $8,000. And so your really net out of this thing might be around $23,000. Exactly. So the way I look at it is we were blessed with $23,000 in cash.

Yeah, that's free money. What vehicles do you have now? So right now I have a 2004 um f-150 i use for work we owe 10 000 on it um she has a mazda 3 it probably has about six months to a year of life left in it okay so that's kind of why we're like should we just keep this truck forever and because i mean we're not really a new truck kind of people anyway you know well take the 23 that you get after you know selling it paying, and get her something. What's your household income?

So together, we're probably going to make this year around $125,000, $135,000 before they put the value on the truck on it. Okay. And then you have $10,000 on the F-150. Any other debt? No, debt-free. Oh, wow. So let's use the 23. We'll pay off the truck. That's 10K.

You have 13 left. And get her something that she wants with that 13K. Okay, that's a great idea. Sell the Mazda 3. The Mazda 3 is worth what? A few thousand bucks? Yeah, and that's what we're thinking about selling the Mazda anyways. We're thinking about getting something new.

Not new, but used, new to us. Yeah, here's the rule. thinking about getting something new, not new, but, you know, used, new to us. Yeah. Here's the rule. You're going to pay cash for whatever the car is. Don't put 13 down and let them finance the other 10 or 20. We're not playing that game. And didn't you say, you said your truck's a 2004, right? Yes, sir. Okay. How much life does it have left in it? I got you. How much life does it? It only has 50,000 miles on it, so I got over a pretty good deal. Wow. So, I mean, I'm going to try to make double payments on it this year.

The goal is to try to pay it off this year anyway. Well, you will because you're going to use that 23 after selling to cover it. So you'll be debt-free like that. And then whatever money you have left over after she buys a car goes toward your emergency fund, and let's start building that up. Okay. But that sets you building that up. Okay. But that sets you up in a beautiful way. So congrats on the win.

Yeah. Thanks for the call. That's great. I got to look into more truck giveaways. I know. I didn't know it was like that. I'm thinking he won the prices right or something. I've never won anything, George.

Really? Well, to be truthful, you don't make effort. Wait, what? Yeah. How many giveaways have you entered, Jade? You don't just like, you don't just wake up one yeah how many giveaways have you entered jade you don't just like you don't just wake up one day and go i won a thing no but i mean like he showed up he showed up at the store to win a contest is a big deal i mean i've done scratch offs before back in the day never won i won things i win things all the time because i put in the effort it takes

research yeah you gotta get in the game tell them the story about your Jerry Seinfeld tickets. I told it to Ken on air because you were razzing me about it. And long story short, instead of paying over MSRP for these tickets for 300 bucks or 400 bucks on StubHub, I ended up getting under face value for 11th row center. These are $300 tickets. I paid 120 bucks. I've been trying to convince George that he needs to live a little bit and loosen the purse strings.

It's not about loosing the purse strings. I want to have an amazing experience and know that I got a good deal. There's no greater dopamine rush when those two things combine. I saw some of the sketchy sites you were looking at in order to secure these tickets and some of the sleazy looking folks you were looking at. I know how to find a Twitter scam. You know, it's fine. When Ticketmaster was two words in the screenshot, I was like, block. This is not real. That's real talk.

You got to watch out. So don't let your moms do this because they don't have a keen eye for spotting the scams. I guess I don't either. I just, at this point in life, I think I spent so many years, George, at this point, I'm just chopping it up. I think I spent so many years

scrimping and saving and coupon cutting and like doing all of that stuff that now i'm like i don't i just don't have the the patience well i'm for these kinds of deals like i'll spend good money to get my dogs the dietary food they need yes and i do that without batting an eyelash but when it comes to your own entertainment yes that's where i go I go. That's where you draw the line. I got to find a deal. I'm strange. Okay.

So what about restaurants? Restaurants. Will you spend money on a good meal? I will, but I'll also go, the appetizers probably aren't worth it. You know. And see, I feel that way about a cocktail. Cocktail, it's got to be really worth it. It's really got to be worth it.

Because Nashville, y'all, you don't know this. There's a 15% liquor tax on top of the sales tax. So that $14 cocktail after tax, liquor tax tip easily turns into 20 bucks. Yeah. And that was like the cost of my entree. Yeah. That's where the margins are for the restaurant. So unless it's like a cocktail bar, I know it's going to be an elevated experience. If I'm not sure about it, I just get a glass of wine. Or I get a club soda with lime and I'm like, it's, you know,

three bucks. Recently, I went to one of those places where you float in the tank. I've done one of those. That? Okay, that's something. Sensory deprivation tank.

That's worth it. I'm adding that to my budget. That was, I felt like I left reality but no one touched you. Yeah, well. George, that's the second time

you've stumped me just right before the clock goes I'm like Jay let me just throw this curveball at you I know this is the Ramsey show you're listening to the Ramsey show our scripture and quote of the day Psalms 119 66 says this teach me knowledge and good judgment for I

trust your commands then Mark me knowledge and good judgment, for I trust your commands. Then Mark Twain said, Good judgment comes from experience, and a lot of that comes from bad judgment. Look at that. Sometimes I feel like if you just say something in a complex way, It sounds hip. It becomes a quote. It becomes wisdom and wit.

An instant quote, yeah. Twain, the man just had it. He had a knack for the tweet. He did. He knew how to frame it. There it is. Alright, if you want to talk to us, you can call us in. It's 888-825-5225 and we'll get to your call. In the meantime, we've got Phil

who's in Boston, Massachusetts. What's going on, Phil? Hey, guys. Thank you for taking my call. You betcha. I have two homes. My first home, it was my primary home before. I paid that off, purchased a second home that still has a remaining mortgage on it. That's the only debt I have. My question is would it be beneficial for me to take a HELOC on the paid off home that is the rental and pay off my mortgage

and move my HELOC in first position. Feels like a lot of moving of debt. You're just moving risk from one place to another. That HELOC is going to put your home at risk. You said your primary home was paid off. How much are we talking about? So the mortgage list, $197. Okay. On the second home, and the first one's paid off. Yeah. So how did you pay off the first home? Baby steps.

I followed up the baby steps. Okay, then. Hear me out. What if you did the same thing on the second home? Wow. Groundbreaking. I am trying to do that. What you're trying to do is shortcut your way by creating a more risky situation, and you're just moving the debt around.

I don't understand how it helps you to create a HELOC payment that has a variable interest rate, but now this one's paid off. It's just whack-a-mole. The baby steps worked for you, dude. It was successful. It did, it did. I'm trying to get a little faster. There it is.

I can throw in more to the principal compared to the mortgage, right? During the draw period, I can throw in more money at that principal and get that principal down faster than I would if I could just pay the mortgage and pay the high interest on that mortgage. What's your income? Combined, the wife and I, we make about $180,000. Okay. So let's do some math. You guys are debt

free outside of this second home mortgage? Correct. You have an emergency fund? Seven months, yes. Wow. Do you have any money outside of that that you could use? There's some. There's some money outside, yeah. Okay. How much? Are we talking $10,000 or $50,000? About $20,000. Okay. So let's say you use the $20,000. That brings your second home mortgage down to $167,000? Yeah. Now you make $180,000. How much could you throw at the second mortgage extra on top of the principal making $180,000? I would probably throw a couple of thousand. Okay, there's one more detail.

We're going to be having a baby coming in October. Okay, that's great. Thank you. We are going to be having a baby coming in October. Okay, that's great. We are saving also for that. How much are you trying to save up? Too much money on that. Well, you've got seven months of expenses. You have good health insurance, I assume? I do.

So as long as you have the out-of-pocket deductible, you'll be able to cash flow anything that comes your way. Is there something else regarding the baby that you were trying to save for? Because you basically have the money already. No. I'm not that guy who likes to save too much money and to predict for the unpredictable of the unpredictable.

Then if you're that guy, all the more reason to use cash money to pay off this mortgage. If you like to plan and predict for the unpredictable, because debt is the unpredictable. It is adding risk to the equation. So use that same logic on this side of it. Was this second home an investment property? So the first home was my primary home. Once I paid that off,

there was a second home that I really liked that came up in my market and I purchased that one. That's the one that became my primary home and the first home that I really liked that came up in my market, and I purchased that one. That's the one that became my primary home, and the first home became the rental. Oh, so you're renting out your old primary. You're living in the second one that has the mortgage. Correct.

Got it. So make it $180,000. You said you can throw, what, $3,000 a month at the second mortgage? Yeah, we could throw about $2,000, $3,000 a year. Okay, so that's $36,000 a year. So you take your $167,000, because you're going to use the $20,000 to help pay it down, divide it by $36,000. You're talking about four years this thing's paid off.

Yeah. I don't think you would move much faster by doing the HELOC move, because you're just now trying to pay off a debt over here instead of a debt over here. It's not going to lower the amount of debt. So I would focus over four years, you'll make more money too, right? Your incomes will increase. I think you just hate the fact that

the renter is living in the paid off house. Like that would make me feel some type of way as well to know that where I'm laying my head down has a mortgage on it. And this guy over here gets to, you know, sleep in the paid for house. That would make me feel some type of way. So here's the deal. If you hate the debt and you want it gone faster, put more towards it.

And that might mean working more. It might mean slashing some expenses. Because if you can put four grand a month toward it, that's 48,000 a year. Well, now we're talking because that means with the payment, you're done in three years. So I would set a goal and I would try to stick to it and get your wife on board. Say, hey, once this baby's here, we're going to really start attacking this mortgage because I want to create a different legacy for our family. I don't want this baby to no debt. I love that. Thanks for the call. You'll be there in no time. You're doing great, Phil.

Thanks for the call. That's a good one. Yeah, that would bother me. I'm like, this guy over here gets to be in the paid for house while I'm over here in the mortgage. But they made that choice. People fall for the trap of going, well, we'll pay off the home. And now we want to keep it instead of selling and just removing the equity. And so you just go back into debt. Yeah. Let's see if we can help Mark out real quick.

He's in Portland, Oregon. We're against the clock a little bit, Mark. What's going on? It is a dream come true to be able to ask a question live on the Ramsey Show. Wow. I am so honored to talk to you both. We are honored to have you, Mark. So the situation is this. My wife and I just became debt free except for our house. It's taken 20 years to do this. Wow. Wow. How much did you

pay off real quick? Oh, probably over $100,000 over 20 years. Wow. Okay. That's a story right there. That's a story. And here's another one. So our furnace is about 18 years old and it's certainly starting to show its age. Sometimes it'll come on and it won't go off until we flip the breaker. Last summer, we were really straining to keep the temperature in the house at a reasonable level. So you need to replace it? Probably in the next year or so. So we are debt-free, and we don't want to go back into debt. But according to our research, it's going to cost about $12,000 to replace this thing.

What do we do? Have you got multiple bids on it? Oh, yes. Okay. So by research, I mean, did you actually ask local folks who would fix it? Yeah, we've had three or four companies come in and it's all around the same price. 12K. Okay. Yeah. You got a year to save up, right? Hope so. How much can you save up every month now that you're debt free?

How much margin do you guys have? We don't have much of a margin at all. We have a small business that we make about $44,000 a year. That's it? Between the two of you? Between the two of us. Okay. And that's, okay, that's net? That's net. Okay.

All right. What is the small business? Bookkeeping. Okay. And how long have you guys been doing this? 18 years. And you've made 44K between the two of you for all those years? Well, not all the years.

So it's grown over the years. And then recently we purchased another bookkeeping business that's jumped from 80 clients to over 200. Okay. 200 clients and it's only making 44 net? What's happening? Yeah. Well, it's making over $100,000 a year,

but the net is bringing it down to about $45,000. That's what you pay yourselves. Correct. So essentially, you're telling us each of you make $22,000 a year net. Something's not adding up with that. I'm wondering if one of you or both of you go just work as a bookkeeper somewhere or get a full-time job somewhere and make more because the income is the problem here. It's just hard to live in

your area making that much even debt-free. And so here's the key with the furnace. We need to save up and pay cash for this when the time comes. And I'd rather have the money sooner than later, which means we got to put away a thousand bucks a month for 12 months, which means we need to have that kind of margin, which means we got to put away a thousand bucks a month for 12 months, which means we need to have that kind of margin, which means we need to get our income up. Yeah. After 20 years, I want you to guys have to have made more than 44,000,

22,000 a piece. Make that much. You really do. And honestly, I'm just going to say for the client list that you said, something's off in those numbers. I don't know where the money, how it's getting shifted.

You need to charge more. You might need a bookkeeper to help you with your books. I hope not. All right. That does it for this hour. This is The Ramsey Show. If you're a leader, your personal growth matters for your organization because whatever you lead can only grow as much as you do. I know from experience.

I've been CEO of Ramsey Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership Podcast. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One episode could change your business. Check it out on Apple, Spotify, YouTube, or on the Ramsey Network app.