The Ramsey Show - Financial Pain Creates Real Change

Episode Date: June 1, 2026

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So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. I'm George Camel, joined by Jade Warshaugh this hour, and we're taking your calls for free. AAA 825-5-2-2-25, and as Dave says, some say the advice is worth what you paid for it. A lovely riddle. We'll see how it goes today. Jonathan kicks us off in Orlando. Jonathan, welcome to the Ramsey Show.

How you doing? Doing well. A question, I had gotten myself in a... big mess where I'm actually, where I actually had to force, well, actually forced a credit card companies to sue me. You forced them to sue you. By not paying? Not paying.

Every time I sign the agreement and set up a payment plan, I changed my numbers and bank accounts and they never hear from me again. Why were you scamming like that? Well, it all started with American Express back in August, 2003, where I paid off all my American Express cards and requested my, close my account. And they did all except for one card. They returned the payment. They kept the minimum payment, and they told me I was no longer eligible to pay that card off. in full because they just jacked the interest rates up to 49% on them.

Okay. I'm struggling to find a question in here. How can we help today? So my question would be, because I try different lawyers and whatnot, and they all told me that Chapter 7 would probably be the best way out of it. How much credit card debt do you have? About $49,000. Okay. And I just want to make sure I understood you.

Did you say that American Express would not allow you to pay the full balance? Is that what I heard you say? Yes. They told me that this was right after when they declared a pandemic over. Okay. They jacked the interest up on all my cards to up above 49%. So I called them and I asked them why and see if I could get them back down to 19% where they was originally. And it was like they told me, no, that was a federal going rate.

Okay. Right. Okay. I understand they jacked the interest up, but I want clarity on the payment. You said that you couldn't pay it off. They would not allow you to pay it off. Is that simply because they made the interest so high you felt it was impossible? Or was there something, somebody was restricting you on the phone from making a payment?

No, I sent them the payment twice. The first time they sent it back, they kept the money. minimum payment and I had received the letters and they said they could not validate where my funds came from. So there is one of the reasons that that might happen would be if your account's been frozen or closed or if you're under fraud or review and or if there's suspicious activity. And if what you're saying is you were constantly changing your, you know, address and constantly, that might be a reason. I don't know. This was, this. This was, this. This was. This was after, after they return my payments, because it's been two years where the debt collector

has been coming after me. So where are you at in the lawsuit? Has there been a judgment against you? Not yet. They just filed, and the same debt collector just went and bought the other credit cards, and they're getting ready to file on the other seven. Okay. How much money do you make? I make roughly $70,000 a year. And do you have any assets or money to your name right now? No.

Is this the only debt? The $49,000? No, I got a house, got two cars. Those both have loans on them? Yeah. What are the loans on the cars? One's like $29,000. The other one is $7,000.

Do you need both cars? I need one. Could we sell the one that has a $29,000 loan on it? Actually, that one I can't sell. Are you upside down? It's not upside down at the time of purchase when I ordered the truck in 2023. Well, what's it worth today? You owe 29.

What's it worth today? Today, Kelly Blue Book value has it right at 195. So you're 10,000 underwater. Yeah. And that's it. There's no other personal loans, He locks, anything else that we should be privy to? No. Okay.

Is it just you? Or do you have a wife, kids? A wife. One of the biggest problems I've been trying to get, been trying to send them payments and all that to this debt collector, but the more I pay them, the greedier they get. Well, I don't think they're getting greedy. I think they want their money. And they don't get me wrong. They have horrible ways of showing that. But the truth is you owe this money. And all of the backstory and getting up to this point, I think if we spend too much time thinking about all of that,

it's just going to cloud our intentions going forward. So today, what we're looking at is $49,000 of credit card debt. The past, doesn't matter. We're looking at a $29,000 vehicle that were $10,000 upside down on and another $7,000 vehicle with $70,000 of income. Is your wife working at all? No, she's not working. We just got married in April and we haven't been able to get, we're waiting for the attorneys to file her adjustment of status. Is she not legally allowed to work in the States? Right, until the adjustment of status is done. Got you. Okay. How old are you guys? I'm 45. She's 44. Okay. So the solution to this problem isn't filing bankruptcy. The solution to this problem is you taking 100% control and responsibility for

what's gone on here over the past several years. The truth is you've lived a lifestyle that's above what you earn. You earn $70,000 a year and you've got car loans you can't afford. And you've got car loans. You can't afford for whatever reason you've racked up almost $50,000 of credit card debt. And that's the truth. So getting out of this is going to require you raising your income in multiple ways, and it's going to require you lowering your expenses in multiple ways, none of which are going to be comfortable or fun in any way, shape, or form. But it is going to be comfortable and fun once you're out of the debt. So the only way out of this is debt snowball it. And if the credit card debts are old enough eventually you might be able to settle for a little less than what's owed, but if you owe it

and you can pay it, let's just make a plan to get this done. I mean, going into 49 grand of credit card debt tells me there's been a couple of years of buying some toys, living high on the hog, and now it's time to face the numbers, face reality and get on a plan with your wife, even though she doesn't have an income right now. She's involved with this because some of the spending is going to be from both of you. And so this is going to take probably three to four years of some serious, serious sacrifice. Yeah, and we didn't ask you about your mortgage, but I can tell you if your mortgage is more than 25%

of that 4,800 take-home pay that you probably have, that's probably one of the first things on the chopping block. Yeah. And bankruptcy is not a quick fix. It will destroy your financial life, stay on your credit report for 10 years, make it hard to rent an apartment, get jobs, all of that. So I would not go down that path.

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personal insurance for over 25 years. I trust them and you can too. Visit zander.com. For instant online quotes or for a more personal touch, give them a call at 800-356-4282. Anna is in Nashville just down the road up next. What's going on, Anna? Are you with us? Yes. How you doing? Hi, I'm a single mom. Good. How are you? Good. I'm a single mom of two and I'm self-employed. And I have $28,000 in credit card debt right now. So all of the payments are current, but the interest in debt is really hard to manage. Is it your only debts? Is it 28K? Yes. Okay. What's your income? It varies because I'm self-employed, so some months it's quite good, and other months it's slower. So I'm creating some supplemental income. Through side work or what? Yeah.

Okay. Give me an average month. An average month this year has been really low because I've been taking some business courses and furthering my education. But some months I was making $3,000 a month, and other months I was making very little. So $3,000 is like the top end. Mm-hmm. What kind of work is it?

I'm a practitioner, so I started my own business to support women and children with anxiety. but I basically left an abuse of marriage, started my whole life over again, left the state. Okay. Cade off old bills. Like on the credit card, it's old bills he wouldn't pay, attorney's fees. Got it. And then rebuilding my life to create a business where I could work from home. Okay.

How old are the kids? They're now 13 and 16. Okay, so in school and you have full custody? I do have full custody now. Okay. I think the struggle is coming from the $3,000 a month, which it sounds like on many months, it's less than that. I think that's where a lot of the struggle is. You said you were doing some supplemental work.

What are you doing and earning from that work? I'm just starting to pick up more and more work because before, the reason why some of the early months were low is I was just in survival mode. Sure. You know, leaving that place and then trying to help my kids. And so I wasn't at my best capacity. Sure. So now going forward. How long ago was that?

I'm building and putting more out there. How long ago did you leave? I left four years ago. It took two years to get the divorce and I had no support for two years. Understood. So you're back on your feet. We'll say maybe two years back on your feet. But back to the other question, what is the supplemental work that you're doing and what are you earning from it?

I just started some of the supplemental work. So I'm doing, you know, like some of the supplemental work. So I'm doing, you know, like some dog walking, walking pet sitting on the side. Dog walking, pet sitting. I mean, you've just started. I realize that. And by the way, no one, we're just trying to get information. No shame in any game.

I did dog walking and pet sitting. I did all that too when I was getting out of debt. So don't feel bad about saying what it is and don't feel bad about saying the amounts. The more details you give us, the more it'll help us help you out. So just getting started on that, what are you able to bring in? on dog walking today, and what do you think you can get it to? I just started. So literally we have our first customer.

I try to pick something I could do with my kids. So, I mean, we're looking at, you know, four days. It's going to be a couple hundred dollars. Okay, great. But I can also work from home while I'm doing that. Okay, so you get a client for, if they're gone for a weekend, you think you can make $200 or $300 off of that. I love that.

I think it's a great thing to be able to do with the kids. I wonder, though, with 13 and 16-year-olds, do you need to do your job with the kids? I feel like the 16-year-old can stay home with the 13-year-old, and you might be able to do several side hustles that don't involve them being available to go with you. And that might free you up a little bit, fair? Exactly. And that's why I'm building my business right now. I'm able to, before I was doing one-on-ones with clients, and so now I'm broadening it. So it's a little more affordable for other people.

I help other people who went through trauma. Right. I want to challenge you on this, though. And I'm being your buddy right now. This is not me trying to jam you. This is me trying to be your buddy. What you're earning from this side hustle consistently from your business equates to a side hustle. It's not a full-time business yet.

I want you to keep doing it because you're clearly passionate about it and you have a point of view because you've lived it. But today, I would love to see you go out into the world and get a job that can. can earn you double that because I think that you're worth it and I think that you have that to offer. And it'll help you break free of this debt. Yeah, you need stability right now. And right now the business, it's great. But this feels like ministry that you could get paid for long term. But let's make that gravy on top when we're not working full time 40 hours a week.

Do you have health insurance right now? I have 10 care. Okay. So the focus is going to be, let's get this income up. because without that, it's going to be hard to even keep up with the credit card payments. What are the minimum payments every month on this 28K? So there's two separate cards and the minimum payments equal about $700. Okay.

So the goal is going to be, what is the smallest balance of the two cards? Roughly under $11,000. And then the other one is about $17? Yes. Okay. So our goal is going to be a chip away at that smaller $11,000 one. And, I mean, if you put $1,000 towards it, a month. month, you'd be done in around 11 months. So about a year. So that's just the napkin math to show you

how long it's going to take how fast you can move depending on how much margin you have. So that's the name of the game here. We're talking about your income. We're talking about your expenses. And the gap between that, hopefully there is one, is called your margin. And that's what's going to allow you to get out of this debt fast. Normally it takes people 18 to 24 months. It might be a slightly longer journey for you because you're a single mom. You're trying to go to school, which I wonder, Can we put pause on school right now because it's hurting your ability to produce income? Right. I mean, when I'm saying it was just continuing education.

And so I have everything that I need right now. Okay. It's just a matter of more visibility and getting myself out there more. That's true. But that's the clients, I do get really good money. The truth is, Anna, though, that there is a horizon on building that. For anybody who's starting a business, there is a horizon for creating a reasonable client base that's dependable that you know you're going to earn. And so for that reason, no one is saying don't do it.

No one is saying, you know, it's not worth it. We believe in that. We love that. However, a lot of times you have to do something full time while you're building the business. While my husband and I were building our entertainment business, I still had to go and do gigs and perform and do a lot of the things that I didn't really want to do, but that's where the steady money was. And so I had to do both at the same time for a while until the business that I really wanted to do took over and could earn me what we needed in order to pay off our debt and sustain our life. So I just really want you to hear that. I agree with George, and this is for the broader audience, when you are about the business of paying off debt, you need focused intensity, all right? You can't do a bunch of things

at once because something's going to suffer. You can't work on school, work on the business, pay three cards at the same time. You have to pick one goal and focus all of your intensity and all of your margin and all of your efforts at that one goal. Even if it feels silly to say, well, I'm just focused on paying $2,000 off on this credit card right now, you will be shocked. George, you know this, how quickly you will pay something off when you put all of your effort towards it. You got to get the blinders on. So Anna, there's a few moves to make here. I would pause school. I would try to go for a full-time job while you double down on these side gigs. And if you have clients currently, that's great.

And you can still try to find some more. But right now I would not be just so focused on growing the business because that's going to take your efforts away from debt payoff, side gigs on top of everything else you've got going on. And you're going to have to invest some of what you're earning back into that business to grow it. And now is not an investing time for you. So I hope this business grows. I hope you call us back a couple years from now and say, I'm debt free. The business is flourishing. Because to help others, you've got to do it from this place of strength.

And right now, you're in a tough spot. And I love this passion you have to help others who have been through the same situation. But Jay's right, you need to charge what you're worth. Right now, you can't just make it more affordable. That's generosity. And generosity takes abundance to be generous. It's an overflow. And so I hope you get there.

I love your heart for this. And we're hoping that you can knock out these two debts using the debt snowball method. I saw on the screen something about debt consolidation. Don't love that. Let's not make this into one giant mountain. to save 40 bucks a month on our payment. The factor in this is you. The margin you can create through your income,

through slashing your expenses, and maybe putting that 16-year-old to work too. Yes. That wouldn't hurt? Yes. A little work ethic? Hey, George Camel here. Let me pull back the curtain on something you may not know.

If you're in debt and collectors are threatening lawsuits, the worst thing you can do is ignore it. That's exactly what they're counting on. Because when you do nothing, they can take you to court. And if you don't respond, they can win by default and even get access to your bank account. And that's why I tell people about Guardian litigation group. Guardian litigation is not another debt relief company with some bait and switch tactic and empty promises. They're an actual law firm with real attorneys. And from day one,

you get an attorney who represents you. They step in when collectors are trying to push you around and they handle it. So instead of panicking, you've got a plan for peace of mind. So if you're backed into a corner and facing imminent legal action, don't stick your head in the sand. Ignoring it will make it worse. And Guardian litigation is who you contact when it gets worse. So go to Guardianlit.com slash Ramsey. That's GuardianL-I-T-com slash Ramsey. Attorney advertising. Results may vary and no specific outcomes guaranteed. Welcome back to the Ramsey Show. I'm George Campbell here with Jade Warshaw. Open phones at AAA 825-5-2-2-25. We were just talking about margin jade. And it's hard to find if you don't know where to look and you don't have a good app to help you along the way. And it's why I love

every dollar. It's more than just our budgeting app now. And here's a great quote from one of our fans. Love this app makes it super easy to budget with my husband. We've implemented this practice since our wedding day. We've had zero money fights because there's full transparency and we're on the same page. I love it. Still fights, but no money fights. Yes. That's a healthy marriage right there. If there's no fights, I question the marriage. I go, hmm, something's weird. You're not being real. Yeah. But money fights I could do without. That's fantastic. So if you want to check out every dollar, you can get it in the app store or Google Play. Download it today if you want to find that margin. Paula is in Boston up next. What's going on, Paula? Hi there. Thanks for taking my call. Sure. How can Jade and I help?

Okay. So I have two daughters. Well, my husband and I have two daughters. They are ages nine and 12, and we are in a really neat place where we're about to move from Baby Step 2 to Baby Step 7, which is the last one, right? Whoa. Oh, can I ask what happened? Well, it's kind of a mixed emotion. So we live in a very high-cost area, and my husband has a line of duty injury from the military and a line of duty injury from law enforcement here. So he's going to be getting double pension and then military retirement as well.

And because of the high cost of living here, we are actually selling our, what we're looking to sell our home here and then purchase in a lower cost of living area. And the home will be cash. Wow. That's a blessing. And thank you for his sacrifice and service. Thank you so much. He's right here. I'll pass it along to him. Wow. Okay. So baby step two to baby step seven, just like that. Yeah, a lot of work in between. But yeah, essentially, it'll happen pretty quickly, God willing, but we have two daughters. They're 9 and 11, and because of his veteran status, we're wondering whether to invest in a 529 for our daughters.

As a 100% disabled, as dependents of 100% disabled veterans, they're eligible for yellow ribbon schools and to use the remainder of his GI Bill. So sometimes it's half and half, sometimes it just depends on what the funding is, but it's very likely that many colleges within the United States, they could go to them for free. That's awesome. we don't yeah yeah so we just we want to make a wise decision and support them but we also you know want to enjoy

our money and not kind of put it away without necessity yeah i would this would weigh into my into how i invest for school i think knowing that this is there um i'm not sure what all would be covered does it include just tuition or is it room and board and all those other things do you know i believe it's just tuition okay um i might invest a reason like a smaller amount of money in a 529 knowing that okay if they go to a four year they're going to need books they're probably going to you know maybe they're going to want to live on campus that sort of thing a meal plan um i just wouldn't overly fund it and there's calculators out there that you can use but just something to keep in mind um the 529 whatever money that's left

in there not all but up to an up to 35 000 i believe per child can be rolled over into to a Roth IRA if they don't use it. So knowing that is kind of helpful, also knowing that that money could pass to other siblings or other family members is also, I don't know if you would have anybody or if you or your husband has any need to hire your education. But those are good things to kind of keep in mind as you fund that and what amount that you put into that. Okay. So if there's money left over, that amount can go into the Roth, but then what happens to the rest of it if it's not used. You can pass it on, change to a beneficiary any time to even grandkids, or, I mean, there's a worst case scenario where you can just use the money. There's

just a 10% penalty. Yeah. Oh, okay. So it's not like you can't touch it, just know anything beyond the 35,000, yeah, 10%, which is not fun, but at least you're getting to your money. So it's not going to just disappear. But I would do a lot of homework on this because there's still a little bit of a fingers crossed not knowing, you know, all the ins and outs to fine print of this. Because my understanding, the GI Bill can only be used at one time for one person or the benefit split, which means it's, you know, half a benefit each. So that's the part where I go, if you're still on the hook for the other half, well, now we need to make sure we have some savings to cover that.

Yeah, there's certain schools throughout the United States. Like I know Liberty University is 100, like it has a G. So it's a yellow ribbon school, so they pay 100% of the tuition. So anything that's left over for additional, so some schools will say 50% for yellow ribbon, the other 50% is the GI Bill. So we would just encourage them to go to a yellow ribbon school. Yeah. Understood. Okay.

And again, there's a fingers crossed there because you can you force your kid? I hope, but maybe they go, no, mom. I want to go across the country to X, Y, Z school because of this program or a boyfriend. And they're like, listen, okay, I have to speak on this because Paula, if that happens, the answer is no. You're on your own, kid. your own kid. Yeah, yeah, yeah, I agree. And that's where the conversation's happening early and often to where those kids know exactly where you guys stand. That's right. They know exactly how to go to school debt free if they so choose. And I hope they choose that. But again, the 529 plan is a great

backup plan to have because you can use it for so much more than just that tuition. And it's not going to hurt. You put, you know, 200 bucks a month in there from, you know, 11 to 18. You're going to have a nice buffer and not be worried about. And, you know, spill over a gap. Yeah. And just some nerdy things to keep in mind that ROT, that 529 needs to be open, needs to have been open for at least 15 years before you can start rolling it. And, you know, the annual Roth contribution rate still apply. So whether it's 8,500 or maybe by those years, it'll be like 11,000. Who knows what the amount will be. So if you open them now, the kids will be, you know, 24 and 26. Well, that's great. They just have a starter retirement plan right there if you

have two 529s for them. So I love that you guys are thinking about this. And it's an unfortunate circumstance in which you guys are leapfrogging the baby steps. But again, we're so grateful for your husband's service. So that that 529 rule was part of the Secure Act. Yeah, 2.0. And I got to believe, you know, I feel like 35,000 is kind of low. But I got to believe that that might come up over time possibly as Roth limits. Yeah, I do wonder. Do you know what I mean? You can only convert up to the amount of the Roth IRA. So this year, you know, $7,500.

So you can't do it all in one fell swoop. But it goes up every year. So you got to believe 15 years later, which is when the Roth would be eligible. Yeah. Yeah. That's the hope. You never know what the government, what they're going to do. They could revoke the whole thing. You never know.

I'm just glad there's an option because for so long, people were like, well, I don't want to do it because what if they don't go? Yeah. And I go, we have a student loan crisis upon us with about $1.7 trillion. Yes. I'm more worried they're going to go into crippling student loan debt than the wonderful problem of what if they don't go and I have a pile of money sitting here? Yep. That I can change to any beneficiary. And what's cool, I mean, this can become a generational. One hundred

college endowment fund when you think about it. By the time your kids have grandkids, you don't even have to add anything to it. It just grows. It'll just snowball into this massive pile of money. So I like that idea. I'm not like aiming for that, but if it happens, I'm not mad about it. That old grandpa George started a scholarship fund for his whole generation. Ken. I think that's what you call him. do do do do that's very Beverly Hills. What's weird to think about is I'm going to be somebody's ancestor. That's just weird to me.

It just, I don't want to think about it. I think that blew my mind a little bit. I don't want to think about it. But it's a good teaching on the baby steps here, Jada, of when to do this. Because some people, they love their kids so much, they forego investing in their own retirement to try to put away some money for June. Yeah. Yeah.

So let's talk about that. There's a time to begin investing. You've got to put your own mask on first. I've heard you say that. I think that's a really great analogy for it. over here we're going to teach you get your own house in alignment your personal business first that's you paying off your debt we teach a series of baby steps baby step one get a thousand dollars saved that's pretty quick most people do it in 30 days george baby step two we we talked about it earlier

in the show this is where your debt snowballing all of your debt everything except the house and then from there now we're going to start playing a little bit of uh offense is that a good way to say it yeah we're going to start saving up some money for ourselves three to six months of expenses. It's a barrier between you and life, making sure you no longer go into debt, making sure you're in a really good financial footing so that you can begin baby step four, which is investing. Now we're starting the process of investing. Baby step four, five, and six we do simultaneously. You know what that means at the same time. So baby step five, now's the five-29. You could do an ESA. There's limits there. I like a five-29. We just gave you the

details about it. Yeah. I do five-29 plans for both of my kids. A couple hundred bucks in there. from zero to 18, you'll have six figures in there, which is, by the way, what it's going to cost for a normal state school by then. So, God bless. Let's keep saving. If you're waiting for the perfect interest rate before you buy a home or refinance, that moment may never come. That's why people should talk to Churchill mortgage, because rates move every day.

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Alice is up next in San Antonio. Welcome to the show, Alice. Hi, thank you so much. My question was, what is the difference between being generous and enabling poor financial habits with family members? Oh, love this question, and also I'm sorry. How close are these family members? They're my husband, siblings, and mom. Oh.

Well, I think you said the difference in your explanation. I think the difference is poor financial habits. I think that is the difference between helping and enabling if somebody has really poor financial habits. And let me add this part, they're not. interested in changing them, that is the difference. Because I think all of us started out at a point where we had a lot to learn financially. And when the knowledge came, we were willing to receive it. We were willing to look at ourselves and go, okay, yeah, they're right. I need to change. But if these family members are not willing to do that, that's where it becomes, I believe,

enabling because it's no longer helping them. Yeah, if there's no movement toward independence and the direction is not toward freedom for themselves and autonomy, well, then we're just giving to give. And if they keep asking for more giving, it's not really giving at that point. It's entitlement. So is that where you guys are at? Are they every month going, hey, can we get $500? No, and it's not even that much.

And so maybe it's just in like my head. But we've been married for seven years now. So I would say over the course of seven years, it's probably been like every three months or so and it like rotates between them and then sometimes his friend also asks. Oh gosh. So what has been going around that you, it's Bank of Alice? Are you guys wealthy?

No. And we've also gone through like different job. Like we have two little kids at home and so I stay at home and work. I do some like side stuff. But like between us, you know, we probably are on track to make about 70 this year. But it's like, you know, up and down. So it's like it's not even like, you know, we're working six figures, you know, getting six figures. Why do they make the assumption that Alice and friends will be able to fit the bill?

Why do you think that is? Because you've given them money before? Yeah. And I'm not sure what he was doing like when he was single and stuff. But it just has been, you know, $25 here, $50 here. I need help covering my phone bill. It's never really been like, we can't put food. on the table. It's always been like, hey, this bill is here. So I don't know where it started and whatnot,

but I just like know that it just keeps, and it's still, you know, seven years later every once in while it comes up. So I, you know, I feel like I'm in a bad position because it's like we have $25. We could send them, but I just know it's going to come around again. Yeah. And so, and I don't want it to be 500 or a thousand in the future kind of thing. Are you guys debt free? Yes. Your debt free. What baby step are you on? I haven't really been following them.

Okay. But we just re-rent. We don't have any credit card debt. We had school loans when we got married, but we paid them off within the first year. And then we had some credit card debt, but then we paid it off. Do you have any savings? Yeah. We're working towards like three to six months of, you know, built up.

So I think we're about two months ahead on our budget. Okay. What is that equate two dollars wise? I think it's $3,800 a month. Okay, $3,800. You have $3,800 saved, or that's what you... So all in total, it sounds like crazy, but between all of our accounts, we probably have about $20,000. But I have it, like, all-eared marked for months or a car fund or stuff like that.

Okay, so the small tweak, and you didn't ask, but I'm just going to say this, the small tweak that I would make is, I would make sure to do the math and figure out what would be six months of expenses. With 70,000, I like the idea of you having a full six months of expenses. It sounds like only one of you is working, not both of you? Yeah, my husband is working full time, and then I do like contractor works every once in a while. Yeah, I'd love for it to be a full six months of expenses, and I might hold back on the funds, especially if it's not something that's really, really pertinent to the moment. I would hold back on doing the funds and get the six months settled, and then above and beyond, we could do the funds on top of that.

So back to the question at hand. Yeah, you just have to say no. Is your husband aligned on this, or are you the one who's like, hey, I don't like this pattern? He's like, well, it's just 25 bucks. It's fine. Or is he just as mad as you are? No, he sees it as like, it's only $25. And I see it as it's a pattern.

We need unification there. Yeah, and that's where I feel weird because I'm like, I enjoy being generous, and but it, like, it just... Are you generous in other areas? Like, do you guys have, is, do you, are you church people that you do tithe, or do you have foundations that you give to? Are you generous regularly in other ways? Yes, yeah. We do 10% to our church and then we set aside another 10% to just give to random things. Okay, and is this part of the 10% that you set aside to give to the random things? No, not typically. It's usually like structured organization. missionaries. Okay.

So that answers that question. That answers that kind of moral dilemma of, am I not a generous person? Clearly you are because you are giving, it sounds like, 10 to 20% of your income, which is very generous. So that answers that moral dilemma. Anything beyond that is this is the relational part of it, which is somewhere in his mind or upbringing, he kind of feels like, well, this is just what you do. do. You know, if your buddy asked for, if your buddy asked for 10 bucks, you give it to him. We're not hurting. So what's the big deal? Now, there is, I do want to, I think there's a, there's a

difference here. If my, if a friend of mine was like, hey, we're out to dinner. She forgot her wallet. Of course I'm spotting her the 25, but whatever it is. That's very different than, hey, man, you know, I'm just coming on some hard times. Can you, can you spot me? You know, I just got, I need something for my cell phone bill, right? That, it's a different feeling because it's like, well, what's causing this? So what you can do, a very amazing way to be generous if you have not already done this is you and your husband, number one, to George's point, you got to get on the same page. But when you do, you sit down with the mother-in-law, you sit down with the friend,

you sit down with the siblings and say, hey, here's what, and separately, not at the same time, here's what we're seeing. It just sounds like you guys, we love you guys, and it just sounds like you're going through a hard time. We'd love to show you the thing that helped us. we've been there and we started walking these baby steps. We thought it'd be a great idea. We'd love to gift you this and you can gift them every dollar. You can gift them Financial Peace University.

Matter of fact, before you leave, we'll give you the total money makeover. Put a bow on it and say, this is the best gift that we could give you because it's what helped us and we know it can help you too. And that, to me, is a subliminal way of saying, stop asking me for money. They'll get them out pretty quick. And it's okay to just say, hey, we're not able to do that. that. That's not in the budget for us, but we'd love to sit down and help you create a budget and help you avoid needing money for bills next month and the month after because we're seeing this pattern and we love you. And so it's not out of a place of, you know, you're better than them. It's out of a place of love, actually. And if they never feel the consequence, then they're never going to change the behavior. So you're not being cruel by stopping. You're actually letting the reality of their life do the teaching that you can't. And that's the hard thing to do with family, people that you love. Yeah. And then they feel a certain way about you and they go, wow, that's so stingy. Well, this is the part of money, this is the part of money that is emotional, which is it all

has to do with the way we were brought up. If you were brought up in a way that, you know, everybody just kind of, it's a pot of money and you just kind of throughout the family, mom gives to dad, brother gives to mom and dad, grandma, you know, and everybody just kind of reaches in. That's very different from probably the way that you grew up with money emotionally. And that's why the two of you, you and your husband, need to kind of sit down and have a meeting of the minds there because it's not necessarily that one is wrong or right. It's just your values and how you view it because, you know, some people might argue, hey, if the money doesn't bother you and you can do it, do it.

Some people might argue that. I would disagree with that. But it's just a, it's from a value standpoint. Got it. That makes sense. Not to rain on y'all's parade, but we did buy them budgeting books for Christmas. Good. Was it every dollar?

No, it was a different one, but maybe we'll let to throw it. Well, it's collecting. That's why it didn't work. I'm just joking. To be fair, I don't even know if they read it. Well, we'll give you every dollar because that's the one that'll actually work. And we'll also give you total money makeover. George, what about breaking free from broke?

Let's throw that one in there. Yeah, and I'll give you mine also, what no one tells you about. Well, there you go. So the key pieces here are guilt-based giving is not generosity. in enabling isn't love. And the sooner you can understand that and put the boundary up in love, the better your life is going to be,

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Check out Christian Healthcare Ministries. Right now, CHM is offering new members a 50% credit towards their first month of membership. Go to chmistries.org slash budget and use promo code Ramsey. That's chmistries.org slash budget and use promo code Ramsey. Welcome back to The Ramsey Show in the Fair Winds Credit Union Studio. I'm George Camel here with Jade Warshaw. Open phones at AAA 885-225. Danny is up next in Orlando, Florida.

Danny, how can we help today? Hi, thank you guys for taking my call. Sure. So a little background. Me and my husband have been married for about a year and a half. He immigrated here from Peru. He's been here for about five years now. He has a high possibility of being deported before our family case is approved.

Oh, wow. So that'll be, that decision will be made in. December. So we're we still have about 15,000 in credit card that we were working on paying off. But my question is, should we just keep the paying minimum payments and try and stack cash in this time since of the, you know, I don't know. If he, if he's deported, it'll be like two to five years before he'll be able to come back. Oh my goodness. So I'll be going with him, of course. Right. That was going to me my ask. And what are the financial implications if this does happen? Like come December, let's say he is deported. You go with him. How much money is this going to cost you guys

and what will your new life be like? It depends. He could be detained for a couple months before he's deported. And then it's kind of up to the government as to where they'll deport him to. Then we may have to pay for him for a flight to a new place that's a little safer for him. He's thinking about going to Spain. He has a buddy that lives there that could help him out with starting his life there. And you're just going to follow him wherever he goes. I would plan. Absolutely. Okay. What are you guys doing for work? That's my husband. Right now we both manage a kitchen. I make about $26 an hour and he makes $23 an hour. And then we also have a bunch of side jobs. So we're bringing in about $8,000 a month. Eight thousand a month. Okay. And do you, are you renters?

Do you have a house? Tell us about any assets you have. We have two paid off vehicles, one that has a loan on it, but it's not upside down. It's a wash if we sell it. So we have three vehicles. We're selling the one with debt on it to get that monthly payment out. We have monthly bills of about $1,000 in lawyer fees, and then the rest of our expenses are about three grand a month. So we'd be able to save a decent amount of money. But paying off all that credit card debt.

I think I'm not sure if it would be wise to do that given we might need it. Yeah, I'm calling this storm mode for you guys because it's a storm and you know what's coming. And so I would treat it that way, just like we would if there was a baby coming or if you knew you were being laid off, that sort of thing. Did you say that you're renting? Yes. Okay, you are renting. Okay, so if you were to go, let's pick Spain. If you were to go to Spain, I'm guessing you would sell the remainder two cars.

And how much would that give you? About 7,500 for both of them. Okay, that'd give you another 7,500. And then if you were to stop just pay minimum payments and stop debt snowballing, how much would you have saved by December to add to the 7,500? To get out of the apartment, it's 3 grand. making our lease. Okay.

And then after that, we could probably save up about $15,000. Another $15,000. Okay. What I would start doing is to try to, and I know that you don't know, you mentioned Spain. So I would just start there. I would just start gathering as much information as I can. I'd look at where his buddy lives in Spain. What's the cost of living over there?

What's it cost to get a two-room apartment or a one-room apartment? what type of job opportunities are transferable that you do here that you could do there. And I do the same thing for Peru, where whatever area of Peru his family is from, right? And just start to get as much knowledge and information as you can. I think that's going to give you more peace. Yeah. More money, more information will give more peace. Absolutely.

So it is wise to stop paying on the, well, just make minimum. on the credit cards. Yeah. And if this doesn't happen in December, well, now you have a pile of money, just knock out those credit cards instantly. Okay. But if you can approach this with like 25 grand in your pocket,

I think that's going to feel really, really good. And to kind of have a checklist of here's what we're going to do. We're going to sell the car. And then we're going to do the lease and then we're going to do this. And just kind of literally put down a plan of action, like document it and document what it would look like going to Spain, document what it would look like going to Peru, all of that. And I think that that's just going to help you feel Uber ready for this. And you can use the every dollar app, Danny, and plan all this out.

You can make a fake budget of like, here's what our new life could cost us. Here's what our current life costs us. And in the meantime, use that budget to create as much margin as you can. Now is not the time to go yolo and life's crazy, so let's eat out. Now it's how do we use as little of this money as possible to stack it up so that not only can we pay off the credit card debt, but we have an emergency fund. We have no debt now starting this new life. So that's the end goal is can we whatever happens, can we restart this process with no debt and an emergency fund? You guys will operate differently no matter what happens. Yeah. And spend some of the things to add to that list would be if you do go to Spain, you're going to likely need some sort of work visa as well and what's the

cost for that. So make sure you're factoring that in as well. That's a lot. That's a wild one, wishing you guys the best. All right. Daniel is in New Orleans up next. What's going on, Daniel? Hey, how's it going, guys? Thanks for taking my call. Yeah. So I got a question. So I've always used you guys as like some advice for my kids growing up. I lost my father when I was young and I've used the principles and teachings that you guys have had. Just getting to now adulthood, my oldest daughter graduated from flight attending school,

the same day she graduated from college debt-free with a bachelor's degree. And she's going to be doing some international travel with her new career. And I'm just trying to figure out how to navigate, you know, using a debit card during international travel and what kind of advice you guys can give me that I can pass along to her. I love that. That sounds like an adventure for her. Well, I mean, I can tell you what I did. My husband and I worked on cruise ships and went to over 92 countries. And I had a debit card. And a lot of times I would call them ahead of time and let them know I'll be out of the country. Here's where I'll be visiting. So my card would work in those different locations. I never had an issue with them thinking it was fraud. But also, Because I was traveling, they knew to be aware that there could be fraud. And I had all the same protections. And another key point here is international fees.

And you can avoid that. Our friends at Fairwinds, actually, they created a smart bundle for our fans that includes a Fairwin's debit card. And after watching my video that I did on this topic, they said, hey, let's get rid of international transaction fees for all of our users. So she can open up a Fairwin's account and sort of use that as her, international spending money and keep her home bank account separate and just sort of fund it with how much she needs each month from that and that'll help protect her you know son of OG account as well so that could be a great move for her and on top of that they will even waive 10 bucks a month and

ATM fees if you're international so a lot of cool features there not not intentionally a plug for fair wins they just it happens to be the thing that came to mind of how to solve this and for online purchases there's a great one called privacy dot com that allows you to create very very virtual debit card numbers. So that's another solution if she's making purchases abroad online. They even can do a physical card as well. But I think Fairwins would do the trick right now for her. And I'm less worried about fraud now with things like Apple Pay. Yes. And I try to use the local currency instead of converting because that'll actually cost you more to convert to USD. But, you know, do the research. Nowadays, it's easier with a smartphone. That's right. There's an app

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and they keep scanning and cleaning up your data year round. So take back control of your privacy. Go to join deleteme.com slash Ramsey and get 20% off your annual plan. That's joindeletme.com slash Ramsey. Jenna is in Seattle up next. Jenna, welcome to the Ramsey Show. Hi there.

So my question is, quick and to the point, should I allow my very generous boyfriend to pay off some additional debt of mine? Wow. Tell us more. What does additional mean? How much has he paid off so far? I have many questions. He paid off a personal loan that I had taken out to do some home repairs about a year

and a half or two, about a year and a half ago. And then about six months ago, he paid off my student loans. Oh, how much was the personal loan and how much was the student loans? The personal loan was maybe $15,000 And the student loan was probably 30 35,000 Oh my So he's paid off $50,000 worth of debt for you so far

Right How much more is there to go? Well, all I have is a car And a home loan That's the only other debt that I have Do you guys live in your home? We don't live together Okay

We maintain separate households. We've been together for about three years. He's widowed. Widowed? Any kids? We both have kids that are all college age. Okay. How old are you guys?

In our 50s. Okay. He's retired. He retired young. He and his late wife did everything right financially. And I'm divorced. And so that kind of messed up. my financial situation.

Are you going to marry him? I'm just getting cut into the chase. We've both decided we don't want to remarry, but we've found, you know, we're committed to each other. So you'll continue to live in separate households and hopefully be together forever in separate households. I don't know. We're still figuring that out. I'm going to tell you, Jenna, I think this question is more about you than it is about him,

because if you said to me, this is the one. Like I think we're getting married. I want to be with him. And I think it's happening. I think he's going to pop the question. I would feel less of the way I feel right now, which is, I don't think you need to be accepting these gifts from somebody that you don't think that you're going to be on the long haul with $50,000 is a lot of money. Well, I think we're going to be in the long haul.

we just don't necessarily want to get married. I was in a very abusive marriage. True that. He had a very long, happy marriage, but... True that, but you and I both know long haul doesn't exist without a committed, without commitment. And I didn't hear it. It's like, it could be, like, I care for him. I love him, but I don't know.

It was more like that. Is fair enough? I don't feel that way, but I can see how it comes across that way. That's my only thing. I don't hear me, because this is on all the radio and all the YouTube's and all the pocket. I think you're a great person. I don't think that you're in any way trying to scam this guy or anything like that. Yeah, you're not doing anything wrong.

It's on his volition if he wants to spend his money how he so chooses. He could give 50 grand to a charitable organization or a gamble in Vegas. It's his money. He's choosing to help somebody that he loves, which is a very noble thing. We can all agree on that. I just don't know that I would accept such a gift if there, if, if there wasn't a full commitment there because this is the type of thing

that could breed resentment later, I think. Mm-hmm. Right. Couldn't this hang over your head of, hey, I paid off 70 grand of your debt and this is how you, could that happen one day? I don't see that happening with him because he also pays for a week on a lot of vacations. And he pays for everything.

He doesn't let me pay for much of anything. He just, he has done well and he... Yeah, is he independently wealthy? Like he's obviously retired. He has a huge nest egg. If he's just willy-nilly paying off debts like this, it sounds like he's doing very well. He's a multi-millionaire, is my guess. Well, yes. We're very open about the financial situation, and it's very lock-sided. What's his, give me an estimate. What's his net worth versus your net worth? He's in the double-digit millions. Okay. And I'm in the less than half. a million. Okay. For you, for you and your placement in this relationship, I love the idea. I'm not saying that you need to go back and pay him back the $50,000. I'm not necessarily saying

that, but I don't want you to let him pay your car off. I want you to do that. Okay. I want you from this, if you take on debt, because you have said, hey, we're separate. We live in separate places. We have separate finances. And, anyone you're dating like you you guys have maintained your boundaries i actually love that for you since you're doing that i would do that in this area as well no it's my debt i want to pay it i think that allows you to maintain a certain amount of independence and i think it allows you to keep the if this were a marriage it'd be different but it's not so it allows you to keep the balance of power right where it should be which is there no one can say that this guy is taking care of me that

i'm mooching off of him that i'm living off of him that i need him that i need him him, you're still a very independent woman. And I want that for you. And I think it's a good thing for you. And I think it'll make you feel better in the relationship long term. What do you think? That's kind of how I, that's how I feel about it. Okay. Okay. He just, yeah. He's, he's just a nice guy. I can sense it. Like, I really is. Yeah. Oh, my gosh. And I think you're a nice lady too. And you're like, this is great. I think it's probably really great. I, I don't sense anything that's off here. I just, if I were in your shoes. It's not a problem to have. It's not. It's not. But listen, I'll take it a step further. I hope you guys do commit.

Like, I hope that you guys find the trust that you need and find the healing that you both need, because you both have been through it. I mean, you said he's a widower and you've been through an abusive time. Healing would have to take place in major ways, I think, for both of you to get there. but man, if you can, it's such a beautiful thing. Yeah, marriage is not the villain here. And I know it feels that way because of your past experience, but being married to this guy is going to be light years difference than your last one, right? Right.

I can already see that based on the way he's treating you and his generosity. So it's not that we're like, you better get married or else, Jenna. I just think it adds a different level of commitment. It adds a layer of protection on his part, even though he doesn't really need it financially. But the question ask yourself is this. Is this help accelerating your own independence or is it replacing it? That's the part that worries us more than anything. Because what if one day you guys break up? And now you were kind of needing him for his income and the lifestyle. And now you don't have that. You don't have your own retirement. So there's also some protections you don't have in that regard. George makes a good point. And I'll go further on that point, which is I love that the separation that you guys have created. because that's just what I think is a normal dating separation, and I think that that's good.

But I think if you tie your finances up too much in the way of, yeah, letting him pay major debts, there could develop, let's say in the future, you're starting to notice some things that you're like, man, I don't know if this guy's the one. When he's done so much for you, it could make you feel like you need to stay with him longer than maybe you would have if these things hadn't been done for you.

Does that make sense? It could just create a cloudy vision there that I wouldn't want for you. But I don't see that happening. I think it's going to be all good. But I just want to throw that out there for you. What is your income right now? From my primary job, I make about 150. And then I get some of my ex-husband's pension, which all goes toward my retirement.

And then I have a side gig. Yeah. So you're good. You got money. you've got your own thing over here. You can pay off this car in a couple of months, it sounds like. What's left on the loan? Right now, about 40. Okay. So if you took, let's say, four, five grand a month, you could be done with this in eight to ten months.

Potentially, yeah. See, there's my question. She's like, I'm not putting that much on it, George. If this was only on you, there's no urgency here. You're not changing any behavior that got us here. Well, we went out and bought a, you know, $50, $60,000. car and that's the part. I want you to be good on your own to where you don't need him. And I think it's going to change Jenna. If she pays off her own car loan, she's going to drive

that thing differently than if generous boyfriend swooped in to pay it off. Now she's going car shopping again, going, who what other debt can we get in? Let's play this game. This is fun. So I'm wishing you guys the best. I hope you have a long, wonderful life together. And yes, I hope you get married selfishly. Hey guys, George Camel here. Listen, we need to talk about your plan because for a lot of you, it's like a bad roommate. You know the one. Unpredictable moods, always asking for money, hard to get rid of. And they never do the dishes. And that's what the so-called big wireless carriers are like. They're counting on you overpaying forever. But Boost Mobile flipped the script. You can unlock up to $600 in savings per year over the big guys when you switch to

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Boost Mobile backs it up with a 30-day money-back guarantee, which means you can try it without feeling trapped. People kick the bad roommate out. Head to BoostMobile.com slash Ramsey to make the switch today. That's boostmobile.com slash Ramsey. based on average annual payment of AT&T, Verizon, and T-Mobile customers compared to 12 months on the Boost Mobile Unlimited plan as of January 2026. See website for full details. Buying or selling your home is a big deal, and you want an expert in your corner fighting for you to find the best deal for the right price.

And the Ramsey Trusted program is the only way to find a top agent you can trust who will help make your home a blessing instead of a burden. It's super easy. You compare agent profiles, interview them, and choose the right one to work with. And you can do that at Ramsey Solutions.com slash agent to connect. with a local Ramsey trusted real estate pro for free or click the link in the description if you're on YouTube or podcast. Katie is in Sacramento up next. Katie, what's going on? Hi, so I had a question. I am getting a about $75,000 workers comp settlement, and my parents want me to save all of it for a down payment on a house. And I was wondering if it's valid to

take five or ten thousand of that and spend it on my wedding for next year. Oh. Okay. Okay. What happened with the workers' comp situation? I got injured and yeah, I ended up getting an attorney and turned into this. Wow. Are you okay now? Are there any kind of ongoing health concerns? I'm getting better. Yeah, I have good private insurance. So, yeah, but I'm fully getting better now. I'm just doing a lot of different treatments. And you'll be able to work as you once did? Yes, correct. I start nursing school in the fall, actually. Okay. Cool, cool, cool. So you're getting married. Are your parents helping fund the wedding at all, or it's just you and your fiancé fitting the bill? So it's a little bit of both. So his parents are pitching in a little bit, minor pitching in a little bit, and then we're also

going to have to pay a little bit on our own. What's the total budget? I think we're looking at a very 15,000 and I'm thinking we're going to be splitting it three ways. Okay. Fifteen, you said? Yes. Okay. So you guys, collectively as a couple, would owe five grand? Yes.

Okay. And you want to take 5,000 of the 75 and that be your cut? Yes, correct. I mean, I don't see why not. Is there anything else to the equation we need to know about it? Do you have a bunch of debt laying around anywhere? It doesn't sound like you do. No, we have no debt. We have paid off vehicles and we currently are living in a trailer on my future in-laws property to save money. I don't, I have my bachelor's degree, but I don't have any student loans. I have all of it paid off.

How are you paying for a nursing school? It's only about $5,000 because it's through a community college. So my parents are offering to pay for it. They're paying for that. I mean, I think 5,000 of the 75 is a reasonable. amount. I think the $15,000 wedding in full is a reasonable amount. I'm honestly impressed you can do a wedding for that number in today's America. I agree. Yeah, definitely. I guess my second part to this question is what to do is the rest of the money to help it grow over time until I'm ready to buy a house. Yeah, how far away is that purchase, you think? Is it a year, two years, five years? About five years. I'm 21 right now. The magic number. say that they'll be a little bit more. Ding, ding, ding. So the way we look at this is five years is a long-term decision. And so you could invest this money. You could invest it in like a brokerage account, non-retirement, put it in some index funds and let it ride. And hopefully in five years, the reason five years is sort of this magic number is because over five years, you're likely to see some gain in that investment account versus a shorter time period, like two to three years. You could see some market dips and you go to pull out that money and it's a smaller amount than you

even put in. That's not the ideal scenario. So if that worries you at all, a high-yield savings account is still a great option. You can make over 3%. You know, you can jump on to fairwinds.org slash Ramsey and open one with the smart bundle. And that at least help your money grow and not get eaten up by inflation sitting in a checking account. Yeah. What would you do? George, would you do, would you invest it or would you hold it your temperament? At five, if I knew it was five years and I'm not going to get a little, you know, doom scrolling on Zillow and go, oh, really three years. then I would be comfortable investing it, and you can always contact a SmartVestor Pro on our website

to help you invest that wisely. But otherwise, a high-yield savings account, no one's going to be mad at you if you do that. Nope. Okay. All right. Sounds good. Well, thank you guys so much.

Yeah. Good luck with everything. It's a lot of life change. That is a lot. Nursing school, getting married, trying to buy a house. Especially at 21. Yeah. So much life left to live.

Babies, I tell you. Don't you wish you could go back and be 21 and debt-free? Oh. If I was. 21 in debt-free, I wouldn't know how to act. I don't even think I would know how to function. I don't think I can stay that way at 21 with my prefrontal cortex. I got to go get some debt. I'm itching for some debt. Listen, I think I needed to learn my lesson. Maybe it was good that I had a lot of some of us need to touch the hot stuff. Yeah, that's right. All right. Mike is in Portland up next. What's

going on, Mike? Hi, thank you for taking my call. I've got two questions. One is much more minor than the other one. So I'm going to lay down the sort of groundwork here. So I'm 29 years old. I am a nurse and I make pretty good money. I currently make about $2.50 a year

as a nurse. How? Travel? No, no. So luckily on the West Coast, I'm from Florida and we make crap money there and we get paid a whole lot more

here on the West Coast. That's That's one of the reasons I came out here. And I do work a good amount of overtime as well. So this isn't just New York. Is this a specific type of nursing? No, I'm just a nurse in the hospital. Every nurse in my hospital could make that much if they work. I mean, that's like doctor money.

I'm just impressed. Way to go. Well, see, that's actually part of the problem. I mean, it's a good problem to have, sure. But this is the reason I'm calling because I like being a nurse. It's great. but I don't want to do this forever. I do want to do more down the line.

So I also have been here for about a year and a half, and I've got just a little bit over 200K invested in my brokerage account. And it's been going well. And really, I went into nursing because I wanted to do something else down the line initially. It's basically something you can go back to school for, and you essentially are, you work in anesthesia. Those guys make much more money than even the 250 I make. It's closer to like 350, 375.

But it's a three-year school to go to. And most of those schools will either make you sign a contract saying you cannot work during that time. And even if they don't make you sign a contract, you really can't really work in that time. It's so intense. You're so busy. It's pretty intense. Yeah, you're really not going to be able to work very much. So initially when I worked in Florida, I was going to make about $60K a year.

So that was a pretty easy thing to pass up for three years to go to school and make a whole lot more money. But now it's so much more. To give up all this income. What would you be earning if you got the degree after three years? So pretty reasonably, anywhere between 350 and 375, that would be pretty reasonable. And what's this program cost? So that's the other thing. The cost of the program usually about 1 30 to 160, depending on the school, but you also have to live, right?

So you also, most people have to take loans out. It's very similar to medical school because most people go to medical school. They don't have a significant amount of money to even leave off of. Well, you've got the money invested to pay for the cost of the education, but you're not quite, the price. problem would be what would you live off of for three years? How much do you need to live for a year if you were just acting like a broke college student while you're in this program? So I pretty much live like that now. I invest my money very, very aggressively. Probably maybe like $3,000 a month. So you could live off, let's say $50,000 a year. You could live.

Oh, for sure. So you need $150,000. Plus the amount for the program, which is $300. You currently have 200. Here's a game plan. I would just work for another six to 12 months and save up another 100K. And then you've got a nice little parachute to not work for three years and cash flow this entire program. And you will likely be the only person to graduate from that program completely debt-free. So here's the other option. I think that's a, that is one of the ones that is one of the options I was thinking about. But the other option I thought about is why not just keep doing what I'm doing. And what I mean by that is, if I were to keep doing what I'm doing for about another five years, I would reasonably, I mean, you know, assuming the market goes okay,

I invest in very, very, like, very safe. We got five seconds, Mike. Spit it out. You want to retire early? What? No, I want to retire early. I would just like to work for five more years and have about a million bucks invested. And then instead of going the anesthesia route, just go be a nurse practitioner. Yeah. My brother does that. That's a great field as well. I think either way you're good. Follow your heart here. Do what you feel is right. The Ramsey Show question of the day is brought to you by Y-R-R-R-E-F-Y-F-Lones can make it feel like you're stuck financially. But Y-R-R-E-F-Y-F-Y explore refinancing with low fixed rates and payments that make sense for their budget. Visit Y-R-R-R-E-F-Y.com slash Ramsey to learn more. That's the letter Y-R-E-F-Y. May not be available in all states. Today's question comes from Travis in Maryland. He says, I'm debt-free and I've built a successful

career making over $150,000 at age 28. I will soon be marrying my fiance who is graduating from medical school with $475,000 in student loans. She seems flippant about this amount of debt when I bring it up. While the amount stresses me out, I've never had any debt because I paid for college vehicles and etc out of pocket how can i communicate to her the importance of getting this paid off once we're married once we're married oh oh oh oh yeah yeah yeah okay i wouldn't wait till then bud i know because i'd want to show and prove i'd be like show me that you agree with this sentiment by starting to pay off some of this debt on your own fiance yeah not being aligned on your values around money is one of the biggest red flag it's a red flag big flag you've got

to get that part dialed in before you get married. Yeah, the fact that she seems flippant about it specifically is what would give me a little bit of pause here. Which can we be honest, most people who went to medical school and went half a million dollars into debt are flippant because either they're in denial or it's monopoly money to them. Because they're like, well, it'll just take me a lifetime to pay this off. Yeah, I have a couple of questions. I wish you'd called in, Travis, because I want to know when is she graduating? And I want to know how much time. And I want to know how much time and when you're getting married so I can understand the time frame. What I think needs to happen is as much as she can begin starting to pay these off now while she's working. And then once,

again, I don't know the timeline. Yeah, she's graduating. We don't know when. We don't know when she'll have a job, what residency looks like, all of that. So this could be a long journey before she's making real money. And so if they're married, it's basically it's Travis's problem now. So he's worried understandably about taking on a half million dollars of debt. And if she's not on board with him going, you know, full force paying it off, it's going to be a problem. And he's like, we got to clean this up before we get a house. Well, there's going to be a lot of fights. They got to have this conversation.

This is a conversation that you're not going to want to have, but you need to have. And you have to have the conversation and not try to manipulate the outcome for it to be what you want, simply because you think you want to marry this person. and you need to go where the facts lead, my friend. And I would get to the bottom of why she's flipping about it and do it calmly. You don't need to be, you know, defensive and instigating and yelling, but just say, hey, I want to know, why are you so cavalier and nonchalant about this? Like, this is a lot of money.

Yeah. And you might need to help show her that with some math and what a monthly budget would look like trying to pay off half a million dollars in student loans. And she's going to go, oh, I'm making 60 in residency for five years. This is going to be a tight life. Yeah. And it's going to delay our ability to buy. a home and go on vacations and upgrade the cars and all the things you want to do once you're

married. That's true. So if you guys can at least get on the same page of here's the game plan once we're married, here's how we're going to attack this debt, then I would move forward. But I would not wait until you're married to have that discussion. I would not. And I want to, let's talk about this for a tad bit longer because I think this is important. So if you're dating someone and you want to start having the conversations about money, the first thing you're just trying to learn is what their philosophy is around debt and spending. And I think the best way, you're way to do that is to simply float a question out there and listen for the response. Don't start by saying your point of view because I think a lot of times if you're out with somebody, you like

them, you think there's a future. If you have a sense of what they believe, sometimes you can kind of veer your answer towards theirs. There's a little bit of fake it until you make it. A little bit. Yeah. And with this subject, you don't want that. So it would be as simple as me being like, so George, you know, so we've never talked about this before. Like, what's your philosophy fee on money. Like, what do you think about money? And you just, you're just quiet and you just listen. Really? What do you think about debt? Debt is fascinating to me. What do you think about it? And if he's like, well, you know, if you leverage it the right way, huh, you know, learn. And I would, that night, I would just, everything would be like, oh, that's so cool, huh,

you know, does he ask you the question back? Be way, like, these are all things. And does she shut down when you bring it up? And now it's something we got to dig into. Yes. What's behind that? And it might be something from her childhood or how her parents handled money. Who knows? Shame, guilt, baggage, but you got to deal with this stuff before you put that ring on it. Yeah, there's got to be like three levels that you got to get to. Number one is just you learning. Number two is, are they asking you? Are they interested in your opinions on the matter? And number three, maybe they shut down the first few times, but if you go in there for a third try, is it still lock and key? Or are you able to see a little bit more

light every time you ask? Because if you are, that's a good sign. And the bad stuff is just going to be amplified once you're married. Once you can really let your hair down. Yeah, it doesn't get easier simply because there's a ring on your finger. Yeah. Please. Good luck, Travis. Wish you the best.

Terry is in Boise up next. What's going on, Terry? I am calling to get you guys' opinion about what constitutes a valid emergency to go into safety funds. Oh. Do you guys disagree on this? vehemently. Oh, wow. What do you think constitutes as a financial emergency?

Things like, well, so I've been on a long-term job search, and so that's adding to my wife's stress about money. So that in and of itself is kind of an emergency, which I've tried to include in the conversation. her take-home pay is about $3,800 a month, and we have been using every dollar and been living on a very declared budget. And so when things like, you know, holes in the shoes or prescription contacts for our kids or a dentist or car repair, more like kind of preventative maintenance, car care a lot of times. She thinks that's an emergency. They put us over, they put us over the $3,800. And we even, I actually even know pretty much the exact amount that we should be supplementing the monthly income by about $300-ish because of how responsible we're being.

But she is just very fearful of the savings going away because of the savings going away. because the job search has taken so long. Are you guys living off of savings because of you not having income? No, no. No, we're living off of her income. So, okay. How much is in savings? 40,000.

Oh, wow. Yeah. And you guys don't have any debt? None. No, we just finished. We went back to Financial Peace University through our charge. church last year to get rid of medical bills and tax issues that I had from my company that has closed. Okay. Way to go. Well, you guys are in a better financial position than you think,

especially once you get some income in the door. How long have you been going without income on your side? Almost a year. Okay, what? That feels too long. Zero income, zero work, zero side gigs? I have been applied to everything. So I'm a sales engineer and industrial automation. There's not a lot of that here. A lot of the jobs that I've applied for at the nurseries or just kind of like retail jobs, they kind of don't understand what I'm doing there. They've actually made comments about like the jobs for high schoolers kind of thing.

Sure. Because it's gone so long. That's okay if they make these comments. I told them, I'm in the middle of a career change. It's fine. It's been confusing. It's been a little rough. Because you're saying 300 bucks would solve this per month.

Yes. Yeah. And we have the budget history to show that. So $4,100 is really what it should be. If she's taken home 38, she needs to be taken on 41. Or you guys need to be creating that level to cover all the bills. And so I'll say this. Here's what constitutes an emergency.

Is it unexpected? Is it urgent? Is it necessary? If it's not those things, then we know, all right, this really was just poor planning. Let's add a sinking fund line item in the budget for car maintenance for contact lenses because we know that's going to come up every few months. That will solve a lot of these problems. But I think she's really stressed because you haven't had a job in a year. Any job. Any job.

All the jobs. Make a job. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel, joined by Jade Warshaw. We've got open phones at AAA 825-5-2-2-25. You jump in, join the conversation about your life and your money. Doug is in Charleston, South Carolina up next. What's happening, Doug?

Doug, are you with us? Did we lose you? Yeah. No, I got you. Good. How can we help? Well, I'm 50 years old. You said 50?

Currently, yes, 50. Okay. That's right. And I'm retired early. I'm debt-free. I've got $2.2 million saved up, and I'm spending hard on a 72-T. Sorry, what was that last part? Your phone's breaking up on us.

Try speaking directly into it. So are you $2.2 million, and then what? I want to do a 72-T retirement plan. Okay. And what's your expenses every year? I don't have any bills, everything I got to paid for. I'm sorry, what? It would be like much.

Everything I have is paid for. You don't have any bills? No, sir. How does that work? Property tax and insurance. I mean, a cell phone and light bill and stuff like that, but not bills, bills. You know what I mean? No car payments, no.

Sure, but I'm talking about your life. I mean, you don't eat? Well, other than. that. Okay, because I'm thinking like health insurance, life insurance, car insurance, homeowners insurance, property taxes, groceries, eating out, subscriptions. You got none of that? Well, yes, we have that. I haven't figured that up exactly. I'm guessing around 4,000 a month. Okay. Maybe 5. So to run your house, 5 grand a month, 60 grand take home pay would cover you every year. Yes, I would think so.

Okay. Who else is involved in this picture? Just my wife. Okay. And is she working or is she retired? No, she's a stay-at-home mom. Okay. How old are the kids?

They're grown and gone. Oh. So she's no longer, she's a stay-at-home wife now? That's correct. Okay, okay, cool. I was like, wait, man, there's no kids here. This is a sweet gig. All right.

So you both want to. to retire, are you both good with this goal, or is there sort of an encore career on the horizon for you that you want to pursue? Well, I do some pressure wash on the side now that I would probably continue to pursue. And I guess one of the reasons why I'm calling is to kind of help clarify it for her and me where she's not nervous and I'm not nervous by doing it. Have you guys ever worked with a financial advisor? We do, yes, sir. Okay. Have you run these numbers by them to see? the projections and all of the what-if scenarios?

I have a team's meeting with my financial advisor Monday. But I wanted to get your opinion as well. I appreciate that. I figured the more opinions I get the better. I've listened to you all for years. I mean, you're in a great spot. If you're completely debt-free at 50 with $2.2 million and you have 60 grand and expenses every year, that tells me you're in good shape to do this.

that's why I was asking about those caveats. Are there any upcoming expenses? Do the kids need to save for college? You've got to pay it for house, all of that. Where is this $2.2 million sitting? Yeah, is it Roth or is it traditional funds? Most of it's in a 401K, but about seven years ago, they opened up a portion in our 401K to put it in Roth. And then I also have a Roth for me and for my wife outside of my 401K plan with my

financial advisor. How much do you guys have in cash? Two-point. Redly available cash, probably about 50. Okay. Have your financial advisor talked about having some cash reserves or bonds or a bond tent, something like that to help preserve your nest egg? No, so they haven't. Okay. That would be something I would ask about. Those are the kinds of things where I want to know every scenario. Let's say the market was down for three years. How would you

guys make it without depleting the nest egg at the worst time. Those kinds of scenarios. And if you can, you know, dot the eye and cross the T seven different ways, then I'm going, all right, green lights, go for it. Okay. And you can also try it for a year. And if you're like, hey, the portfolio can sustain this. We've enjoyed this. Then you kind of know. And if not, you're only 51 by then. And you're a smart guy. You can always go back to work and make some money, right? Well, yeah. Where I'm at is a rather large steel mill, and it's, I could probably end up getting a job back there eventually, but it's very hard on the body in the deep south in a steel mill in the summertime. So I don't know that I'd be wanting to go back there.

And I get what you're going to say next. You're going to say, you don't have to go back to a steel mill. You could find other things to do. And I understand that. But I'm just trying to travel, do some fun stuff now instead of work all the time. Sure. I mean, at the rate you're talking about to take out enough money, now you're going to pay taxes if it's on the traditional side. So the other pieces of homework I would talk to your advisor about is Roth conversions. And then also the other pile of money outside of your retirement, which is locked up. And again, you mentioned that they're 72T, which can be a tool to access that retirement fund early. But I would try to let that money grow and keep compounding before you access it. So if you have other money, you could use. And then, that might mean you work for a little bit longer, stack up some cash, maybe get a year of expenses under your belt and let that money grow for another year. But I think sitting with that financial

advisor and going, hey, I need a final gut check. Show me every projection possible to make me feel really good about this. But you're talking about, you know, maybe a three, three and a half percent withdrawal rate, which if you look at any, every financial planner would say, you're good. You're never going to run out of money if you do it that way. Okay. But the question is, long-term care, the crazy health stuff that could come up, big expenses that come up. That's the kind of stuff I want you to be ready for in case you go, man, I'd love to buy a car, but it feels like I shouldn't. I don't want you to have a sort of a limited retirement because you're scared to spend money because you're not sure if you're going to run out. And that's why I would have a lot of confidence going in.

Okay. Thank you, I appreciate it. You've done really well, man. As long as your lifestyle doesn't inflate like crazy, you got a green light for me. let us know how it goes. I wouldn't want to be in that steel mill for a single day, Jade. I don't think I'd make it. No.

I wouldn't make it through the audition. They'd pick up that Pete. No, he's done. They would just look at a photo of me and go, she's not. She can't do it. Well, you know, especially in the trades, it is, when a job is hard on your body, it's like you're in the NFL. Like, you can't do this for 30 years.

And so I totally understand. I also just go, I've seen a lot of people follow the fire movement, which is financial independence, retire early. And this is not a similar situation, but they stack up a lot of money aggressively over a shorter period of time. And they basically burn themselves out to the point of exhaustion and panic attacks

in order to retire early to do what? To do what? And so I always tell them, what are you retiring to instead of from? I think it's, Dave and I had this conversation the other day on the air. I think the word retire when you're that young, I think what you really want is work optional.

Much better phrase. Do you know what I mean? And that way it's like, I may not want to go to my nine to five job Monday through Friday, but if it's the right type of work and it's the right hours and it's on my terms, yeah, I'd be willing to do the thing I love and still make money from it. And I think that's probably what most people are after. I don't think most people just want to sit and do nothing. Yeah, retire feels like prices, right, reruns and bingo at the VFW hall.

Yes. And I think you just, that will lead to an early death if that's all you do. And trust me, I love bingo and prices right more than anybody. Options are what people want. They want the option to say not today. Freedom. That's what you're after. You spend hours researching before making a major purchase like a home or car,

but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car, home, or you're. any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at Ramsey Solutions.com slash insurance. Welcome back to the Ramsey show. Before the break, we were talking to Doug, and he was asking, can I retire early at 50 years old? I got 2.2 million in retirement accounts. I got 50K in cash. And he said he was going to use the 72 T rule to do it. So we just want to take a moment to his.

help our listening audience understand what that is because they're probably going, is this a life hack? Is this a loophole? What's going on? They're trying to bridge time because they've got time before they reach 59 and a half or maybe some people are trying to bridge time before they receive social security, all of that. And so it's how can I get at this money without being penalized for not being retirement age? Yes, because the IRS normally will charge you a 10% penalty if you pull money from that 401k or IRA before age 59 and a half. So section 70 due T of the tax. code is the exception and lets you avoid that penalty. But there's some caveats. Fine print red tape and stipulations. Oh, you love that. George, you love fine print,

George. I love the fine print. So you can only do this if you agree to take what is called substantially equal periodic payments, SEPP from the account. So think of it like you're making a deal with the IRS. They're saying, hey, you can have your money early, but you have to take a fixed amount on our schedule, not yours. And you're locked in for five years to that schedule. Yeah. It's five years or a 509 and a half, whichever is longer. So in Doug's case, you're talking nine and a half years of making sure that you can live off of this exact payment. And so that's part of the risk I was talking about where you got to make sure your eyes are dotted T's are crossed before you just go, oh, cool, there's a loophole. I can do it.

Well, where people get hung up sometimes as they know, okay, I won't be charged the 10% early withdrawal, but they forget that they're still going to have to pay income taxes on the money. Yeah, because it's traditional. And here's the crazy part. If you miss a, payment, take extra change the amount, modify the plan before the lock-in period ends, the 10% penalty applies retroactively to every single payment you've already taken, plus interest on all of it. The IRS does not forgive honest mistakes here. There's no, oh, my bad. Yeah. And so that's why I'm not a fan of this. It's kind of a last resort option, I would say. Yeah. And this is, so if you're wondering, okay, well, George, how can I access money earlier? How do I

retire before 59 and a half if I so choose. And the much better way is to create what's called a bridge account. Yes. So this is where you just open a non-retirement brokerage account. You can still invest in index funds and mutual funds within that. And there's no penalties. That's right. You'll pay taxes on the gains of that, either long term or short term, hopefully long term, because that'll be a whole lot cheaper. And that way you can access that money until you can access a retirement account. So think about if he had a million in a bridge account on top of his two million, well, now he's not even touching that retirement account. He's completely in control. It is just growing for 10 more years and he has this million dollar bridge account to live off

of in the meantime. And he'll pay some capital gains on that, but there's some really cool tax planning you can do to basically pay no taxes. Yeah. If you're married filing jointly, get the standard deduction. You can basically take out 130 grand tax free. I love that. So a lot of cool things there again. This is why you want to have a good financial advisor in your corner. And if you want to get connected to one, jump on to ramsysolutions.com, click on SmartVester Pro, and they will nerd out 10x what I could do on this show. That was a good time.

I hope you enjoyed that. If you didn't fall asleep at the wheel by now, hopefully. All right, Jade, ask Ramsey is our free AI tool that was built and trained on proven Ramsey principles. And we're going to break down some of the most ask questions of the week. We had a lot of questions. Look at this, around saving for retirement, paying off credit card debt, but the most asked question was around zero-based budgeting. My favorite. The main question, how do I create my very first zero-based budget, George? How do I do it?

This is great. So the core idea with the zero-based budget is that every dollar gets a job before the month begins. So if you brought in $5,000, we need to allocate every dollar of that $5,000. So even if you have $3,000 in bills, well, if you don't make a plan for that other $2,000, it will disdiscount. disappear into DoorDash and entertainment and whatever else is going on in your life. So you start by writing down your monthly take-home pay. You can enter this into every dollar in the income section, each paycheck, and start with what hits your bank account after taxes. Yeah, and we like to say after that, once you start and go through and start your expenses, let the first line item of the budget be giving. It just puts your heart in the right place, set aside 10% for church, charity, general giving, whatever it is. That's the first thing on your budget. And then, for you.

from there, go on to the most important four walls is what we call them, your food, your utilities, your shelter, your transportation. And I'd say in a close fourth and fifth, it's probably insurance and daycare. Yes. And then, of course, debt. If you've got some consumer debt, we're going to list that as the minimum payments. And it will actually break out the debt snowball for you inside of every dollar. It will break it out by smallest balance to largest balance. And then you're going to subtract until you hit zero. So if there's money left over, let's throw it at the debt if you got debt. if you're trying to save up the emergency fund, any leftover money goes to the emergency fund. Love that.

And, you know, some people might go, well, Jade, I'm in the red. That's okay. My expenses are $3,500, but I'm only taking in $3,000. Yeah, that's a learning experience there. And that's when it's time to start cutting back. You should say, glad I did a budget to figure this out, that I'm $500 in the hole every month. Yeah, and you can look for areas to cut back. For most of us, it's areas of subscriptions, going out to eat, self-care.

Those types of areas are the areas that we can cut back. And if you look and you go, there's no place for me to cut back. I am, then now we know we need to add a side hustle to the mix, which you can do. But just know, it takes about three months to really get in the flow of budgeting and to really create a budget that's going to work for you and your family. That's right. So check out Ask Ramsey. You can get started based on your specific income and expenses. It'll walk you through it just like we would on the show.

Go to Ramsey Solutions.com or click the link in the description if you're on podcast or YouTube. Kayana is in Seattle up next. to Kayana, did I get that right? Yes, sir. Crisis averted. How can I help today? Thanks for the call. Thanks for answering. So my boyfriend and I are trying to figure out a plan for finances so we both can be on the same page in the future. What can we do right now to set up for success and what would the

alternative be to building up credit? Great questions. How old are you two? I'm 18. He's 19. I'm almost 19. How long have you guys been together? Officially six months. Wow. But we've known each other for a while. Okay. And what have the money conversation's been like thus far?

It sounds like you guys have talked about this a little bit. Yeah, we're both a little over-planters, so we're just thinking and talking and trying to figure out just like how we would do things if we're going to be using credit cards or not because I was raised without, like, no credit cards are a bad thing. my parents and I my parents are both debt-free except for the house I still remember when they cut up the credit card I love that so is there some tension because he's like what that's crazy like you got to have a credit card actually there's no tension which is great so he's good he's like cool yeah I think credit cards are not a healthy tool either yeah he's not he thinks that they could possibly be used smart but um but we both don't have enough information to figure it out together. Well, I think there's two paths that we need to cover on this.

And one is, do you even need credit? Like, is credit necessary to your life? And then the other side of this is, and I'll probably start here and work backwards with George, which is, please, please, at no point. If you guys, even if you decide we don't care, we don't agree with what Ramsey says about not needing credit. Please never co-signed together. You're dating.

Who knows if you'll get married one day. But if he's thinking debt could be used in a good way sometimes, like maybe getting a car note. I cannot tell you how many times people call in here and they've co-signed alone with somebody that they were once dating. Because they wanted to help them. Because they wanted to help. They wanted to build credit.

They wanted to start their life together. And then it goes south. And he's looking for her to pay her into this car. that they've co-signed on, right? So the first part of the conversation is whatever you do, please don't co-sign. If there's a co-signer needed, it's because that person would not be approved for debt on their own because they're clearly broke. And you co-sign with somebody.

You know this. I'm saying it for those listening. If you co-sign with somebody, it goes the opposite way. You're on the hook for the entire balance. And never do it. The other piece of this, you're talking about how do we build credit without a credit card? Well, then I go, what are you trying to build credit for? For a car loan?

Well, I thought we agreed. We're not going to debt for a car. We're going to save up pay cash. So all the things that you think I need credit for that, I would question it and go, do you though? And I walk you through this in my book, Breaking Free from Broke. So I'm going to send this to you as a gift because if you guys read this together, you're going to be reading off the same sheet of music. You'll be totally aligned. You'll know how to communicate about it, how to navigate life without a credit card, without credit. And I walk you through every piece of it in the book and the credit score chapter. So hang on the line. We're going to send you breaking free from Broke. if you want the audiobook, just let our phone screener know. They'll get you that as well.

I wish you guys the best. Green flag so far with this relationship. Hey, George Camel here. We often talk about how being normal sucks when it comes to your money. But guess what? Normal isn't so great when it comes to your job either. Normal is staying in a job you hate, dreading Mondays, and working for people you don't even like. Sound familiar?

Well, the good news is you can break free from normal because Ramsey's Solutions is hiring, and we refuse to settle for the ordinary. In fact, we are anything but normal and we are proud of it. And right now we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. So head over to ramsysolutions.com slash careers and apply today. Welcome back to the Ramsey Show. We talk a lot about offense on this show, how to build wealth, but you also have to protect it as you build it. That's the defense side, and that's where insurance comes in.

The right insurance acts as a shield around your loved ones and your wealth if disaster strikes. and our free insurance coverage checkup helps you figure out if you have the right coverage by giving you a personalized action plan with clear next steps. So you can take it at ramsysolutions.com slash checkup for free. Get that covered checkup. Find out if you've got the protection you need. Mary is in Cincinnati up next. Mary, welcome to the show.

Hey, George and Jade. I'm so excited to talk to you guys. We're excited to talk to you. What's going on? So my question is, my husband and I would like some advice of what to do in our situation specifically about paying off our mortgage. So we are in the process of adopting a baby, and we would love to be completely debt-free before the baby comes.

We have no debt except $16,000 that's left on our mortgage. Wow. And we're wondering if when we, yes, we've been working so hard and listening to your show and just so inspired by all the callers, it's really motivated us to get to this place, and we're excited where we're at. but we're wondering if when we get down to the last $8,000 on the mortgage, if we can just use part of our emergency fund to pay it off because we're just itching. Would it be taking it from six months to three months?

It would. So we have $18,000 in an emergency fund currently. We have $36,000 in an adoption fund, which we think would cover the adoption plus time of may being off. but we're thinking of throwing a little bit extra towards that. We make about $75,000 a year combined, and our house is worth $275. Wow. What's the mortgage payment, the principal and interest part? So we owe about $1,000, $163 a month, and we're down to less than, I think, is like $39 in interest.

Wow. $300 towards escrow, and then the rest is on the more. mortgage. So you would free up just about $1,100 a month? It would, which is why we're so ready. Yeah, I feel that. Yeah, I would look at what will... We don't want to cut our savings too short. Yeah, what will your budget look like without a mortgage payment?

I would calculate that out for a month and then go minimum three months and knowing you're going to stack it right back up. So that free up mortgage payment is just going to move to the emergency fund until you're back to six months, which is probably the better move. as you adopt this sweet child. Yes, okay. How sure are you with the 36 grand will cover everything? That's my only question mark,

because I know these can always be more expensive than you intended them to be and kind of drag out longer. Yes, we've already paid some towards the fun or towards the adoption. So it would just be, if it would be extra, it would be cutting into like my time off of work. would be cut maybe a little bit shorter, but we are pretty confident that we'd have maybe like 10 to 12 still for me to have time off. Okay. So that's covering the gap in income without dipping into the emergency fund is what you're saying.

Correct. Oh, I love this. You guys are such planners. Way to go. So great. Thanks. My husband is. Oh, we lost you.

She was about to say my husband. I'm guessing she was going to say my husband's so excited. Yeah. They've done such a good job. Just know, I didn't hang up on you, Mary. That was on your own volition. On $75,000 a year to save $36,000 for an adoption, $18,000 for an emergency fund. Knock the mortgage down.

Rock stars. That is impressive. Don't tell me you can't do it because Mary just proved you wrong. Yeah, I'm inspired. She's making a salt look bad out here. And what a noble, you know what it is? They have a big why. Yeah, they do.

They want to adopt that baby. And that will, if you can put the blinders on and focus, You're like, I don't need all these other expenses and subscriptions and the vacations. I just want to bring that baby home. And man, if we can bring this baby into the world debt free, even better. That's a great why. But yeah, for the teaching on that, we always say you want three to six months in the emergency fund and people go, well, can I scale down the emergency fund? How do I know?

Yeah. Temporarily. So my gut is always, if you can at least keep three months in there, knowing you've got a new budget. You don't have a mortgage payment. So that also changes the numbers, how much you need in that emergency fund. Then I go, all right, go for it. Just know you want to make sure that you don't have an emergency as soon as that house is paid off. Right.

And on the bigger scheme of things, when people are deciding whether I should have three months or six months, is there a wrong or a right? You do want to look at certain factors that can help you determine that. Are there two incomes coming in or are there one? If you're a one income family, in my opinion, you got to have six months. Like there's just a little bit more risk there. Therefore, you want a little bit more of a cushion there. What's the health situation of everybody? are you guys healthy or are there ongoing health concerns? That's another one. If everybody's

healthy and there's two incomes, three months might be all right. But if, do you see what I'm saying? And the stability of the jobs and income. If you're a teacher and a UPS employee, well, that's pretty stable. If you're in commission sales and you're not sure what the income is going to be, I would lean towards six months. I got to tell you, ever since COVID-19, I almost am always on board with six months no matter what. It just makes me feel good to tell other people, hey, If you can get six months, just do it. Yeah, and here's the thing. Usually one spouse wants it to be more than the other, and I'm not going to stereotype,

but generally the women have the security gland flaring up going, hey, we need a little more security. And the guys are like, no, we're fine. We get $10 in the account. Let it right. I can make that work for another week. And so I always lean on the spouse that wants the bigger one. Go with that answer. You're never going to regret having six months instead of three, having more peace, more security.

And the honest truth is that baby step three is one of the hardest baby steps. It is a sleeper. People sleep on how difficult. Because you've come out a baby step two and you think that you're about to have like this major relief of life is going to get easy. And then you're like, oh, holy crap. This has got a level of challenge to it as well. You don't get the excitement of knocking out a debt, freeing up a payment. That's what it is.

The gazelle intensity. Like you still need the gazelle intensity without all of the fanfare. Well, it's what you described earlier, which is the why kind of gets hidden. When you're paying off the debt, the why is right in front of your face. You're like, I see you, Sally Mae, and I hate your face. And so you're ready to like make the debt payment. When you're saving money, you feel good about the fact that you're paying yourself, but it just doesn't have the same, you got to manufacture the tenacity. Well, it's like paying into an insurance plan. You're like, great. I'm glad this is helping to cover me in case of something happens, but this is not

exciting to pay for. I don't love this. Nobody's stoked to pay for their auto insurance for the year, but you're real happy you have it. Right. And once you do see that six months sitting in the account, you're like, this is, you become, what's the guy, Smeagle from Lord of the Rings? Oh yeah. What's his name? Spiegel. Ghalom. Isn't it like, what the S? Smigel? Gollum and Smigel. Okay. Nobody knows. My precious is what I'm getting at. Yeah, it's funny. It becomes your precious. Once you build it, you're like. What's the man's name? You guys know what it is in the audience. I think is it both? It's like pre and post. Smeagle versus Gollum. Okay, we got there. It's the same person. First of all, let's forget this conversation ever happened that I referenced

Lord and read this out because the nerds are going to come after you in the comments and flame you, as the kids say. You're going to get roasted. But it is true. Once you build the emergency fund, it's like you built that sandcastle and it took you forever and you're like, nobody touched this thing. Yeah. Nobody touch it. And even a real emergency, you're like, no, it's not an emergency. and you'll do everything you can to keep it. Well, what's funny is once you build it, you stop having the same level of emergencies. I agree with that.

They don't feel like emergencies. The flat tire is now just an inconvenience instead of a... Yeah, because at that point, I also think your money management skills have reached an all-time high, and so you've become such a better planner. You can look at life and go, I see this coming, and I'm going to plan for it.

I know it, right? And I think that all of that just comes with time and financial literacy. and you get better at maintaining the things you do have, which causes less emergencies. Yeah. So it's sort of a self-fulfilling prophecy. And most people go, I could cash flows to my budget this month. I don't need to tap into it.

All right, George, inquiring minds want to know. Uh-oh. Do you ever just have times where you're like, I just, I like, I feel good about keeping a little more than six months? Oh, 100%. Okay. And my wife is that way. Me too. Like, whatever my number is, she's like, double it.

Yeah. Yeah. Okay. Fine. And you know what? It's sort of like a life fund. Yes. If we want to buy something, a bigger purchase or an opportunity comes away or a generosity opportunity.

You have the money. We have the money. Just reach over. You have an emergency fund for your emergency fund. I love the feeling of that. Can't beat it. If you're a business owner who's serious about growth, you've got to be at Entree Leadership Summit 2027. Summit is our world-class leadership conference where you will learn from the people who have influenced the way we lead at Ramsey.

You'll also connect with like-minded business owners who are facing the same challenges as you. To get your tickets for May 27, go to Entreeleadership.com slash summit. Our scripture of the day, Galatians 110. Am I now trying to win the approval of human beings or of God? Or am I trying to please people? If I were still trying to please people, I would not be a servant of Christ. Amen to that. P.T. Barnum said,

Money in some respects is like fire. It is a very excellent servant, but a terrible master. Ooh. It's good. Said the circus guy. A lot of fire in circus. He knows a lot about that, yeah. Yeah, all right.

Erica is up next in Dallas. What's going on, Erica? Hey, guys. Thank you so much for taking my call. Sure. Okay, so I'll get right into it. My husband and I were both 31 and we've been married for three years. We're currently in Baby Step 2, and we're about $10,000 away from becoming debt-free.

So I know we're not quite ready to purchase our first home. We currently are living in my mother-in-law's house, and we only pay like the household bills. And last month, she told us that she will be selling her current house and moving back here, and she wants us to stay. And I know that over the years she has said that she wants to leave this house to my husband upon her passing. So I guess my question is, is it financially wise to stay in the house? house, although it's legally not ours, or would it be better for us to just save up and buy our own home once we're ready? I totally, I understand the, the allure of thinking, oh, we could just stay in this house. It's going to be his one day anyway, but the reality is you'd be living with the

mother-in-law. And I just think that something like that would drive a person crazy after a while. And the truth is that was never your goal. You never sat down with your husband and said, you know, it would be great. Let's live with your mother-in-law for maybe another 20 years until she passes and then we'll get the house. Like that wasn't the goal. The goal is let's save up and buy a house of our own. So I think that you should continue down the path of your original goal. And if circumstances change and she moves back in, that just means you've got to move out sooner.

And maybe you rent for a while someplace else. but don't let that affect what you initially set out to do. Okay. Yeah, we, I'm currently in nursing school and I should be graduating next May. And I already have a job lined up. So I know that we'll be able to start saving at least a year and a half after I graduate for us to buy our own house. So do you think while I'm still in school, we should just go ahead and move out? Because she'll be moving in by like the end of the summer.

I mean, go ahead, George. I'm just curious. So she's moving back into her house that you guys are living in, correct? Yes, yes. Okay. What would rent cost you if you moved to a reasonable place nearby? Yeah, so we do have two dogs and they're coming with us. So with the yard, I'm looking at anywhere between 21 to 25.

$2,500 a month? Yes. Okay, and what's the current household income with you in nursing school? My husband, he works two jobs and he brings in 65 a year. And I only work like three days out of the month, so I only bring in like a thousand. Okay, 65 a year. So is he taken home like 4K a month or so? With overtime, he can bring in five. Okay. So definitely not renting a $2,500 house. That's out of the picture. That's 50% of your take home pay. So the truth is, we might need a sacrifice for a little while longer.

and live with mother-in-law, unless there's some real issues here. Are there things where, like, I cannot do this? We need to figure something else out? No, she's like a second mom to me. I love her to death, and her being here doesn't bother me at all. It's just my husband, he doesn't want us to stay for a house. Like, he likes the idea of being able to live here and this home becoming his one day. So I guess that's like really where we're not seeing eye to eye, whereas I don't mind living here for the next five years, is that if we need a save up or whatever.

But if you want to stay there because you love it, that's one thing. But if you're staying there with the promise of one day this will be mine, I don't love that because there's so much life that can happen in between. And we've heard all those stories. Mom takes out a reverse mortgage because she ends up broke and retirement has a health crisis. and now this house is not what you thought. Now there's a giant loan attached to it. And so that's where I go. I wouldn't count my chickens before the, what is it?

Don't count the eggs before the chicken hatches, something like that. Don't count your chickens before their hatches. There we go. I don't like this idea either. And I'll say this and I'll let it ride. But I understand that sometimes culturally people have different ways of living and their like family generational living is more, more the norm, and I understand that. However, just from a marriage point of view, I, I tend to believe

that marriages need their space to grow and become what they're going to be. And it's just very hard to do that in a contained environment with mom there, especially when it's long term. I just think you guys are so, you're young, but you're old to be living with a parent, right? you're young in your marriage, but you're also 31. It's not like you're 21. So there's part of me that's like, hey, be 31 and use your income and understand that, hey, if we want to be able to have this type of an apartment, we're going to have to improve our income in this way and allow yourself to stand on your own two feet.

I think that would be my advice barring the cultural statement that I made earlier if that's part of this. And you're like, hey, this is just how we do it in my culture, then I'm not going to fight you on that. If you're going to stay, I would have an end goal in sight and make it stated among the group that we are gone by this time. And that helps add some clarity to the situation. John is in San Antonio up next. What's going on, John? Hey, hey guys. Thanks for taking my call. So I am finishing my internal medicine residency here in a year. So I'm thinking about, you know, where to move for my first real physician job.

I have some family in the Bay Area, and I'm thinking about going there, and I was just, you know, wondering if that would be a bad move financially, because it's pretty much the most expensive part of the country to go to. Well, do you want to go there? If you took the money off the table of taxes and all of that, are you like, man, I would love to live in the Bay Area, or is it, well, I could make more in the Bay Area, but it's going to cost me more to live? Yeah, I would say so that I do, you know, want to go there. Okay. Because nothing is set in stone. You could go there, try it out for two years, decide it's not for you, and then peace out. Yeah.

And so I like the idea, if this is really where you want to go and you're going, hey, I'm going to make, I don't know, I'm going to $300,000. Yeah, it's going to cost me a lot in rent. It's going to cost me a lot to live. But if anybody can make it work out there, it's a guy making $300,000. Yeah, okay. So if you were like, hey, I'm going to make 40 grand, I want to go live in the Bay Area, I'd go, hey, man, that's going to be a really tough life. Yeah. But with your income, do you know what it may be in the Bay Area?

Yeah. The jobs, the base rate pays like 320. Okay. So we'll just half that because Bay Area. And now you're bringing home 160. And look at rent. Yeah. Groceries, where you want to live, what that's really going to cost.

And that'll give you some clarity versus just vibes. Yeah, you have to think about your values and what it is that you're trying to accomplish financially. Are you going to want to be a homeowner one day? Are you going to want to have a wife one day that stays home? Like, what are the things that you believe that you want out of your life for the next 10 years? And would you be able to accomplish it living at that cost of living? Or would you be able to accomplish a level of that? And would you be happy with the level of life that it gives you?

And then you have your answer. Right, right. How old are you? I'm on the older end. I'm 35. I'll be 36 when I... You're on the older end. What's it mean for me?

What's this mean for me, John? I feel like... I'm done. I guess compared to my colleagues, you know, everyone. I basically, I think seven years off. But I mean, to become a doctor, it's like a 17-year journey. So you've got to be in your 30s by the time you finish it. So you're doing great, man.

And I would, if you want to pull the trigger on this, I would go for it after doing some homework. I would obviously go visit the area. That's a good start. And get a feel for like, all right, this is what my life would be like. Kind of pretend like you're living like a local and this is where my apartment would be. Here's the lifestyle. And then you can go for it. Because at 35, as a single guy, you can always change your mind at 37 and nobody's mad at you.

You're not uprooting too much. Best of luck. All right, that puts this hour of the Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.