The Ramsey Show - Getting Your House In Order Is The First Step To Financial Success

Episode Date: February 4, 2025

📈 Are you on track with the Baby Steps? Get a Free Personalized Plan Ken Coleman & George Kamel answer your questions and discuss: "I hit a moose with my father-in-law's car" "My parent's house is being foreclosed on" "Should I get my ex's wages garnished?" "My husband thinks I should cash out my stock portfolio and pay off our mortgages". Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp ◎ Get 10% off Byrna product bundles and more! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY ⛨ Discover more with Health Trust Financial 💸 Learn more about opening a high-yield savings account with Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📱 Watch the full episode for free in the Ramsey Network app. 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 💼 Connect with a RamseyTrusted tax pro for help with payroll and more 💵 Start your free budget today. Download the EveryDollar app! ☂️ Get trusted insurance coverage that fits your budget. 🪑 Check out Front Row Seat with Ken Coleman! Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

This is the Ramsey Show where we help you win in your life, specifically win with your money, win in your profession, and win with your relationships. I'm excited to be with my pal, George Campbell. I'm Ken Coleman, and we're here for you today, America. The phone number is 888-825-5225, 888-825-5225. Let's start it off with Randall in Homer, Alaska. And Randall, we're here for you today. What's going on? Hey Ken, hey George

thanks for taking my call. Sure, what's up? Yeah so unfortunately I just wrecked wrecked my father-in-law's car by hitting a moose up here. Oh no, so much going on in that sentence. Is that like a Tuesday in Alaska? Like how often does this happen? We literally have a sign on the side of. Is that like a Tuesday in Alaska? Like how often does this happen? We literally have a sign on the side of the road that has a number counter saying how many times the moose has been hit. Right. Wow. You know, I have added a number to that. Okay. And did you kill the moose? I broke its leg and then the cops had to come, you know, put it down, unfortunately. That's how it goes up here. Terrible.

Alright. It's the last frontier that's for sure. Hey I gotta tell you George you may not know this about me but back when I was in my early twenties I worked on a Senate race in Alaska and spent a summer campaigning in Alaska. I did not know that. And so you would see moose at nighttime just chewing on people's trees in their front yard. Like we see deer. Are they a real nuisance over there Randall? Oh yeah. They really are actually. I had

four of them in my front yard the other day and somebody else hit one of them and totaled their car. So it happens on a regular occurrence. Well we're very sorry about that and I got to tell you that does the father-in-law know yet? Are we the first to know? Yes. Oh boy. Okay. He knows, but it's the insurance that's making things tricky. So tell me about this.

What's happened? What's the deal with insurance? This isn't the first car I total of his, but it was his car that he owned. I know, I'm a terrible son-in-law. Maybe you should stop driving his cars. Let's start with this car. You're the common denominator here. I'm not even blaming-in-law. Maybe you should stop driving his car. Let's start with this car. You're the common denominator here. I'm not even blaming the moose anymore.

I think you guys might be right, but this instance, it was a little tricky because two years ago he bought the car because he was going to come up and visit me and the wife and the kids. And he used it for two weeks and he hasn't been back in the last two years. And so he told us we could drive the car as long as I maintain it and I you know pay insurance on it. All right. But we put the car entitled it under my name and registered it in my name because I'm up here in the state and if anything were to happen I were to handle it. And so I have this insurance policy and I expected this clunky $3,500 car to only get

like a $3,000 payout, but for whatever reason, the insurance came back with a $10,000 payout. And so it's a lot higher than expected, but I don't know who that money should go to. I kind of want the money, but it's kind of my father-in-law's car. But at the same time, I'm the title holder and I'm the insurance policy holder. Which makes you, which yeah, you, this is sticky, but I mean, legally it's your car. That's what I, because he signed the title. What was the agreement when you guys made this deal? Was it, Hey, I'm going to pay you this much money eventually, or what?

It was, if I pay the insurance and maintain the vehicle, I can drive it. And then we just kind of laughed and went on with our way. We didn't really communicate about it. Well, wait a second. At some point, he had to sign the title over to you. Well, when he bought the vehicle, he never signed it over into his name. We just went to the DMV and signed it into my name. But he paid for it in full? Yes. What did he pay for it? 3,500 bucks. Okay. Alright, so what's the

conversation been with him now? Because I appreciate all this detail. Was this a loan? Did he say, hey I'm gonna need to need this money back, but you're going to pay the insurance, it'll be in your name? No, no, there's no loan. It was just essentially a gift. Unfortunately, he's not much of a communicator. He never said that it was ours and it was a gift, but he said we could use it. We've used it like it's ours and we've used it for two years and he's used it for two weeks. Yeah, but what is he saying now? We've established how this all happened. What is he saying now? Yeah, now he is saying that he's the owner of the vehicle

and if I wanted to pay out, then I should have bought the vehicle, but that's actually the scenario I tried proposing to him is let me just buy the vehicle from you right now. And this was before I knew what the insurance payout was. Let me just buy it from you and make it a digital. He is not entitled to the payout. If you wanna give him the 3,500 bucks that he put into it,

that's fine and let that be off your conscience. But I'm not gonna give him a check for 10 grand while you're out of the car. You're gonna be back in the situation again. That's kinda what I was thinking. He's gonna buy you a car that you're gonna have to maintain and own, yet he has these weird purse strings attached. I don't like this. Let me ruffle your feathers some more, George.

I'm ruffled. He started contacting the insurance agencies so that he could get updates and try to get the total amount disclosed to him behind my back, and he's the type that will, you know, cut off ties. Don't they have to like verify identity? How does he even have access to talk to your insurance folks? behind my back and he's the type that will cut off ties. Don't they have to verify identity? How does he even have access to talk to your insurance folks? I'm not 100% sure, but the insurance has been sending him emails and discussing this policy

with him, so I don't even know if this is kosher. First of all, this is a relationship mess. Right. And I've got to tell you, I'm very excited. George is ruffled, I'm fired up. And I'll tell you why. I always wanted to be one of those judges on TV. You know what I mean?

When people come in and it's Judge Ken. And this is a Judge Ken kind of dream scenario to try to figure out because you've got on one hand George the father-in-law does buy the car with his money. And I'm going to make this up, but in natural law that's his car. But he goes to the DMV and he literally lets Randall sign the title as though it's his. So legally, under the real law, it's Randall's car. Now, father-in-law wants the money. He sees a little windfall. This is my car. I'm letting you take care of it.

He was the best of both worlds. I'm a good father-in-law. I got my daughter sweet daughter It's like you buying a car for me as loser husband down the road. Oh gosh I don't want to think about that, but Randall you aren't a loser At all. I don't think Just kidding Randall. So so now you get the situation where he does his favor for you guys But he wants you to handle the insurance now Now he wants the money. This is manipulative in every sense of the word. And Randall, this is a problem, but I'm bringing all this up and kind of laying it out here because you have one response. This is not your car legally. You let me use it.

He's going to say, yeah, but you know what I did, and I bought it, and blah, blah, blah, blah, blah, blah. And so you're gonna have to come down to not what is right in the grand sense of the word, but what is right for your relationship going forward, unfortunately. And I think there's gotta be a median in the middle, George, in order to make Thanksgiving bearable.

That's where I think the compromise is, I'm gonna give him the money he paid in, that gets him out of this. Don't care what he feels like he's deserved. I agree. That's what I would do, Randall. But know that that's going to be ugly. What does Randall's wife think about this? Randall, what does your wife say?

Has she talked to him? She's too much like her father, and I told her she's not allowed to talk to her parents right now until I figure it out, because she might make the situation worse. You told her she's not allowed to talk to her parents right now until I figure it out because she might make the situation worse You told her she's not allowed to talk to her parents. Oh, yeah. This is a soap opera Until we figure it out. No, you don't tell your wife. She's not allowed to talk to her parents Well, I meant I meant about the about the situation. I'm not gonna refuse her from FaceTiming with grandma Well, that's kind of you. I'm kind.

Ay, yi, yi. We set our pace. This is The Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life

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Xander is the real deal and that's why they've handled all my personal insurance for over 25 years I trust them and you can too visit Xander.com For instant online quotes or for a more personal touch give them a call at 800-356-4282 Welcome back to the Ramsey show alongside George Campbell I'm Ken Coleman and George we were just talking about during the break. I'm very excited They're working on a new show format for some time and it's now out. It's called front row seat So pumped for you. And this is a conversation show. For those that have been around a long time,

if you've been in your 30s or 40s, 50s, you'd know the show inside the actor's studio. And you also know MTV, Unplugged. It's got that feel to it. Legendary. It's intimate. Intimate, we have an audience of 12 to 15 people that surround me and a guest. And we have a deep dive conversation designed to help you get better personally,

to move up professionally, and to lead effectively. And so that's what the show is all about. And so we're often running on YouTube and wherever you get your podcasts. So you can check it out. New episodes every Tuesday, again, on YouTube. It looks fantastic. The team did such a great job. You've seen the set, I have nothing to do with that at all. No credit to you there. None, none.

The content is also amazing. So it's front to back, soup to nuts. This thing is just perfect. Back to my roots, when I joined Ramsey 10 years ago, I was an interview specialist and for years hosted the Entree of Leadership podcast before I handed it off to you. That's right, I first saw you Ken, what, 13 years ago now, 14 years ago.

At a leadership event, yeah. And you, I've always said, Ken is the best interviewer, maybe on the face of the earth, I don't know. You're being a little too kind. That's too kind, but I appreciate it. But anyway, it's called Front Row Seat. Check it out on YouTube. Some great guests you've got that have already launched

that are coming up. Oh, we got some big names coming. We launched with Nikki Haley, former presidential candidate. Oh, yeah. And that was interesting. Not political conversation. Don't worry. Those of you who immediately got your accolades.

Oh, she did this and she said that. And look, when was the last time you sat down with somebody that you agreed with on everything? You didn't. You haven't. So we like to have conversations across the board designed again to help you get better. I mean you're bringing a better version of work so you can move up and for those that are moving up you're going to lead at

some point. So it's for professional development and growth. So go subscribe. Oh yeah go subscribe on YouTube and podcast Front Row Seat with Ken Coleman. All right, let's get to the phone. Steve is in Richmond, Virginia, my old stomping grounds, George. Steve, how can we help? Hey guys, thanks for taking the phone call today. Sure, what's up? So, I found out in the last week or so that my parents' house is in the process of getting

foreclosed on. And my question is, should I buy the mortgage out and find out some rental agreement for them to continue living there? I just think it would be easier twofold. One, it's a decent investment opportunity. And second off, I think it's an easier process as they're aging to stay in the house they've been in for 30 years almost,

and not worry about moving and then trying to find a place and everything else, they're comfortable where they're at. Well, what's going on with them financially to where their house is about to be foreclosed on? So that's another story I'm trying to unravel. I will say my dad has been plagued with identity fraud for the last three or four years. I mean, it's like he'll get a debit card in the mail and then within three or four days, he's got charges from California and Colorado and Mexico and everything else.

So something's weird going on. I know, you know, my sister had a boyfriend living in the house with them and then they, you know, allegedly he had hacked the system and put a virus in it. I don't know. I'm working with some specialty companies, trying to figure out if that's what's happening or. I don't know. They're just not making, haven't made

the best financial choices in their lives and they're getting, you know, they're both turning 65 this year so they can start collecting some security, which isn't much money, but it's something. Wow, George, I was already nervous. I was already nervous about you just buying a house. We would run the numbers and George will walk you through that as to, cause this is like buying another house. So that's- That you're going to lose money on because your tenants are broke and I don't think they could pay you rent this is a disaster waiting to happen for you so far the

disaster has evaded you right so I can say I've been very blessed um you know we my husband and I don't have any debt other than a small auto loan that I just had to buy and wasn't part of our investment portfolio. So we were able to pay cash for the remaining balance of the house, which is about $120,000. The house is worth about $350 to $380. It's in a decent neighborhood where I grew up. So what price would you pay for it? So you have no mortgage right now? Or do you?

I'm trying to figure out, George, do you have a mortgage? Because you said you were blessed and I didn't hear amazing blessing in the form of crazy numbers that would set you up to buy this house. Oh no, we don't have any debt except for an auto loan. We have no mortgage. We have another investment property that's paid off, or annual income's about 350,000 a year. Okay, now we're getting some numbers to reach.

All right, and you're saying you could afford to pay cash for this property. Yes. And buy it before they go into foreclosure? Hopefully. What could you buy for it? I'm not sure what stage they're at. My dad just sent me the payoff letter and like I said, there's about $113 left on the house and then late fees and taxes and all this other stuff, they rolled into the payoffs

of $120. But they're not going to sell it to you for $120. Why would they sell a $380,000 house for $120? No, actually both of them are very on board with doing this. They don't have money. They need the equity in the house What are they gonna do? Because now you own the house. They're gonna live for free is what's gonna happen Steve. They can't afford to pay rent. They have It's a lot, but there is

My my grandma passed away years ago. Um, and they got some money from her and the issue is they maybe could pay off the house with that, but then they have nothing to pay it live on. So I'm like, well, if I pay the house off, you have enough money to pay your, your electric bill, your insurance and everything else, along with the, for how long? I mean, they should have about $80,000. So I would hope they could live on that

plus social security and jobs and my dad. Let's play this through. Let's say they continue financial misbehavior and blow through the 80 grand that you left alone and now they're broke living off Security, barely enough to feed themselves. Are you okay not taking any rent and just floating their bills for the rest of their life? I'm okay with not taking any rent.

Okay, just know that you're not gonna evict your own parents if Bush comes to shove. And so I would rather just not get involved and say, hey, mom and dad, let's find you a place that you can afford to rent with the money that you do have. I don't wanna artificially prop up their life because that's gonna turn into entitlement on one side

where they just go, well, Steve is a nice guy, he's gonna cover our expenses forever. And so anytime we need something, we're just gonna go to Steve. It's now Bank of Steve. Yeah. Or it's resentment, more financial misbehavior. You resent them, you want them out,

you regret getting into this, and now you're stuck in a conundrum. Because now you're the landlord. Right. So when they don't take care of the house, it's on you to fix it all. And so if you're saying you're financially able to do that and willing to for your parents,

I got no problem with that. Just know that what you're getting into and don't couch it as, well, this is an investment. I agree. Sure, you'll get it one day. That's right. And on paper, George is right, Steve. I mean, this is a good investment for you.

You're a good son, but I'm afraid it is gonna turn into, because you bailed him out on this, you're gonna bail him out on other stuff. The bigger issue needs to be, I'll bail, like if, okay, I'll just say this, George. Steve, if I'm you, and I was wanting to do this, I wouldn't do it unless they allowed me, that's you, to get into their finances and once and for all,

put some type of protections in place so the fraud's not happening all the time. He's just being careless at best if What you're describing is happening all the time So I would at least put some protections in there for you To say this has got to stop I'll buy the house. It's an investment for me. You'll live rent-free until the day you die fine

But that's it and on top of that I got to know that this isn't going to happen anymore. Because I think George is right. I'm afraid Bank of Steve is like, I think that's a reality. And I don't think you want that, do you? No. I'd rather you help them sell this thing and help them downsize into a place with cash. Me too. And you stay out of it and teach them how to manage the money they do have coming in. That's the better scenario to help them live an independent life where they're

not reaching into your purge strings. This could really ruin your life. I'll just say this, I've never seen something like this work out great for all parties involved. Well he's trying, Steve's a good person, good son, but he's trying to fix a situation he can't fix and that's what I'm concerned about. It messes his life up. But hey, we've spoken. Quick break. We'll be right back. This is The Ramsey Show. Taking care of your health doesn't have to cost a fortune. That's why Field of Greens is in my house. Field of Greens is made from fruits and veggies selected by doctors to support your heart, liver, kidneys, and metabolism. And here's the best part, they're so confident your doctor will notice your improved health,

they offer a money back guarantee, no questions asked. Try today and get 15% off at www.fieldofgreens.com. Alongside George Campbell, I'm Ken Coleman. you've joined the Ramsey show where we help you win with your money winning your work and win in your relationships triple-8 8 to 5 5 2 to 5 triple-8 8 to 5 5 2 to 5 is the phone number let's go to Chris in San Francisco California Chris how can we help today? Yeah, hey guys, thanks for taking my call. I am coming into some inheritance. I've already gotten some.

Right now I have about $400,000. This next week I get another about $300,000 and then there's somewhere around 500 to 700 more coming down the line. Yeah so yay for me but I just I don't really have a good plan of what to do with the money. My only debt right now is a my my primary residents about 70,000 on a pretty good loan. It's only like 2.25 percent. So it's really not costing us a lot. So I haven't paid that off yet.

But I'm wondering, one, if I should pay that off with this next round of inheritance that comes in and then kind of what else to do with the money. All right. Who who passed away? Parents. comes in and then kind of what else to do with the money. All right, who passed away? Parents. Parents. Wow. Was this recent? This last year, my mom, yeah. Yeah, so sorry.

Thank you, it's all essentially coming from property sales. So multiple properties that'll. have you looked into any tax implications of the inheritance? As far as I understand from our accountant that was helping us before my mom even passed away, that there is, we're not getting like taxed on any of that, on any of it, which is very surprising to me, but yeah. That's a good place to start there. And then the first order of business is take a deep breath. This is a lot of money, and we wanna manage it wisely and steward it wisely.

And most people, you're not the type, but most people would go, ooh, windfall, time to go get some toys, give some money, buy're not the type, but most people would go, ooh, windfall, time to go get some toys, give some money, buy this, buy that, and just pausing for six months and just storing that money in a high-yield savings account, just let it sit for a little bit before you make any decisions is wise.

And then filtering it through the baby steps, your house sounds like it's next if that's your only debt remaining. And I know it's a low interest, but I don't think we're worried about interest rates at this point of our life. You're about to have so much wealth, you're going to free up a mortgage payment that you can now use to invest. And so it's going to be a wash, but the peace of mind will be totally worth getting rid

of that debt, regardless of the interest rate. Yeah. And we, you know, before the money, my wife and I, we have a pretty good income. We're pretty comfortable. Our first house, we made like almost $300,000 on, and when we moved, we got set up pretty comfortably with only having the, excuse me, the home loan. So- Yeah. What's your current net worth? pretty comfortably with only having the, excuse me, the home loan. What's your current net worth? Well, I guess with the house,

somewhere a little over a million right now, and that's, again, next week a house closes, that's somewhere around 300,000 that comes in maybe even like 325. Awesome. So you guys are already millionaires. So this is a lot of money. You're doubling your net worth overnight essentially. And so now we go, okay, what does the future look like as we want to build wealth and leave an inheritance to our children. And what kind of life do we wanna set up for ourselves? What does retirement look like one day? And what kind of work do we really wanna do now that money's not an issue? And so there's a lot of life changes

that could be happening. Are you both of you working right now? Yeah. Okay, do you guys have kids? Yeah, two. Okay, awesome. So, looking at this from a high level perspective, we wanna go, all right, we got a have kids? Yeah, two. Okay, awesome. So, you know, looking at this from a high level perspective, we wanna go,

all right, we got a primary home paid for, let's make sure that our retirements are fully funded, we're maxing out retirements. Now we're gonna go the kids college, let's fund that, let's put a portion of this in a 529 plan. Then it becomes, do we wanna invest in real estate or just mutual funds? And how do we look at giving?

Let's increase that. Let's increase our spending a little bit as well and enjoy some of this money. So a good way to look at it is just not getting a flat tire where you're hoarding all of it in savings or you gave it all away or you spent it all and didn't save any of it. And so it's a good way to just filter it through giving,

saving and spending goals. Yeah. Yeah, I don spending goals. Yeah. Yeah, I don't disagree. I think having a long-term plan, sitting with somebody and now, you guys actually have money, a lot of young couples, we would say as soon as you get out of debt

and you begin to move into baby step three, then 40, go, okay, you sit down and as you begin to invest every month, what's that long-term play? You guys are there. So let's get this money working for you like George said, and man, how exciting, what a blessing this is for you. I mean, you guys should be very, very wealthy

by the time you're 60, very. How old are you now? 44. Okay, I thought, you know what, I'll be honest with you, I thought you were a little younger than that. He sounds like in the early 20s, mid 20s. Yeah, he's about your age. Yeah, I'm a little older.

I'm being generous to Ken, but. Yeah, you're being very kind. But Chris, you're still gonna be very wealthy. You know what I mean? By investing this and getting this working for you now. So just leap frogs any goals you had and probably time to reassess and get a team of experts on your side.

If you don't already have a good financial advisor, jump on ramsaysolutions.com, same for a tax pro. You mentioned an accountant, if you like working with them, that's great. And a state attorney would be wise at this point, maybe a real estate expert, if you wanna get into real estate. And then make sure that you have the right coverage now,

cause you've a bigger target on your back if something were to happen. So I would reassess all of your insurance coverage. You definitely need an umbrella insurance if you don't already have that. And our friends at Xander can help out with all of that to make sure that you are maxed to the gills on your home insurance, your auto insurance. I would get all of the liability coverage way up. That's a great call. I love that. I would call our friends at Xander. I know Jeff personally, the guy's been around forever, a friend of Dave's.

They'll take very good care of you. That's why we recommend them. That's very smart. Yeah, as you gather and build wealth, you also need to protect the wealth that you're building. And that's where all the different insurance products come into play. The right ones, not the crappy ones. And that's where our friends at Xander will steward you correctly. All right, let's go to St. Paul, Minneapolis area. McKenna is there. McKenna, how can we help? Hi, thank you for taking my call.

Sure, what's up? So my husband and I have completed baby steps three last fall. We've been kind of cash flowing to weddings we've been going to since then and investing in retirement. And at the end of this month, we're going to get ready to start thinking about our next home. We have a mortgage on a townhome currently. So my question would be, at the end of this month, we're gonna start shelling out some money into a savings account.

We just don't really know if that's like a money market account, a high yield, or if that is investing in the market, if we're not planning on moving for another five years, if that's enough time to like ride out the market. Yeah, five years would be the minimum for me to be investing in the market versus a shorter term goal where you have your money parked

in a high yield savings account because you increase your chances of making money versus losing it, you know, when you start to extend the timeframes out. The bigger question is why not just pay extra on your mortgage and then sell the property, roll all the equity over to the next house? That's sort of a four seconds plan.

That was the other thing that we were thinking of. Yeah, what's the town home worth? We both have an amaterization schedule, so it's about worth probably 265 to 270. We have 239 remaining on it. And according to like an amaterization, it would be about seven years to pay it off. Okay, well, I'll tell you what my wife and I did.

We got a townhome at the time it was 300,000. The loan was, I think, 165. And we just aggressively attacked that and we got it paid off and rolled 100% of the equity into our next home. And we just kept doing that. And so I'd encourage you to do the same, to create a forced savings plan.

Because when you don't, here's what'll happen. You'll call back and say, hey, we're thinking about keeping this townhome as a rental and taking on an even bigger mortgage for the next home with very little down. That's the temptation that happens when you don't just force the savings plan into the mortgage. So that's the way I would do it.

Ken, any thoughts? I feel like you've taken that call before because you went into a head voice there. Oh, wow. I didn't realize that. You did an impersonation of what that call might be. Yeah, I just feel that. And you into a head voice there. Oh wow. I didn't realize that. You did an impersonation of what that call might be. Yeah. I just feel that.

You're a little whiny. A little whiny. They love the idea of keeping it as the rental. That's always the move. I know. I'm telling you. You had a little disdain in that. I just think there's a time and place for it.

I think you're right, by the way. Taking on two mortgages. I think you're right. Hiya. I just like how you went there. I think you've had that call one too many times. It haunts me in my sleep. It gives you a little indigestion. It lives rent-free in my head. You don't like it. I want to evict it. Do you cover that in your book, Breaking Free from Broke? I do actually. Get it wherever

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mutual funds distributed by Timothy Partners LTD, and ETFs distributed by Forsyth Fund Services LLC. Welcome back to The Ramsey Show. Alongside George Campbell, I'm Ken Coleman. Excited to have you with us. 888-825-5225 is the phone number. George and I are here for you. The Ramsey Show question of the day is brought to you by Why ReFi?

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in all states. Today's question comes from Hayden in Washington, D.C. When purchasing term life policy, the monthly premiums are affordable. However, while still paying off debt with gazelle-like intensity, it seems that those premiums should be used to get out of debt faster. Any advice on quote, adding a monthly cost in the form of a premium while also trying to get out of debt quickly? Yes, lots of advice here, namely, this is not an added cost,

this is insurance. And this protects you as you get out of debt. It protects you as you build wealth. So the same would go for your health insurance. We would never tell someone to forgo health insurance and auto insurance and homeowners insurance to get out of debt faster. These are prerequisites to life as an adult.

You need a will, you need term life, you need auto, you need home, you need health. All of these things are requirements and therefore here's what you do. You get the term life policy through Xander. Let's say it's $240 per year. You can set up a sinking fund line item in your budget of $20 per month that gets added in there

so that by month 12, you have $240 saved ready to pay that yearly premium if that's how you pay. That's how I do it for my family. And that's how I would recommend you do this as well. And I don't see insurance. I used to be very negative about insurance, Ken, when I was younger and go, oh my gosh, I gotta pay the insurance premium.

Now when I see that life insurance premium come through in particular, I just go, thank God. Thank God that my wife is gonna be okay. Because you got two special ladies in your life. Yes. And that's peace of mind. I remember the same thing. I remember every time I paid it or every time I would,

if I got a better rate, I was just, it wasn't about the money. It was about, I know that if something happens to me, Stacey and the kiddos are gonna be provided for. And that's what this is all about. Yeah. And if you want proof of how important this is, go listen to some of the Ramsey Show calls

where a spouse passes away without life insurance. Now they're really in alerts trying to pay off debt, losing that income. And so that's the goal of term life, to replace your income if something should happen to you for the people that you love. You want 10 to 12 times your income and that policy, 15 or 20 year term policy should do it

because if you follow the Ramsey plan, you'll be self-insured by then, paid for a house, you've been investing for 20 years, your family's going to be okay at that point. But in the meantime, you need to transfer that risk to the insurance company, and Xander is the folks we trust for all of those, so go to xander.com and get that done

and start your Every Dollar Budget and add it as a line item, and thank me later. I agree. The Every Dollar Budget right there will help you see, oh, all right, I can move money from somewhere else, but that is a non-negotiable. By the way, you can get every dollar in the App Store or Google Play or the link in our show notes.

Clifton is up in Raleigh, North Carolina. Clifton, how can we help? Hey, guys, first, thanks for taking my call. Sure. Been with you guys for about a year now, and me and my wife are completely on board with this. We've paid off about $230,000 in debt so far. Wow. Congratulations. That is no joke. How long has it taken to pay off $230,000?

18 months. Wow. What? Did you find gold? You sell some stuff? Did you strike oil? No, no, no. My uncle retired from the family-owned business in past ownership to me. The business has been in business since 1965 and we do really well and I've managed, just because I'm younger and can work harder, I've managed to triple the revenue from the last few years

that he's getting in. Congratulations. So, yeah, it's going really well. And my wife's a DNP, so she makes really good money too. Oh, wow. And we move fairly frugally. Yeah, you guys are just crushing it on all fronts. Right, but that does not get rid of the anxiety and stress I have with the debt that I have

left, which is the reason for my call. We built a house two years ago. I'm not really concerned about that We sold our old house and built this one on a property. We bought the business though I as soon as I took over the business. I reformed as an LLC got the selection So that I'm not taxed so heavily and I pay myself a salary from that business Which of course is taxed as personal I paid myself a salary from that business, which of course is taxed as personal income. There was a loan that my uncle made to me, basically gave me the

business but I had to buy the complete inventory and he was very, very nice to me and gave me that on a seven-year loan at two and a half percent interest. Okay. And I've paid that down to about 240,000 is what I have left owed on it. Okay. And five years left to pay on it. So this is my question though. I'm paying myself a salary. So I get that every week.

The rest of the money because we're in S, taxes in S is being kept in the business' retained earnings. And it's pretty significant that the business, I think, retained earnings this year alone was close to $200 in retained earnings. And this is the question I'm concerned about, just taking all of that money and paying the debt at once, because then I'm kind of missing that safety that a business needs for a few months of operating expenses that

things deploy. I'm kind of paranoid, right? Because I've had the business for two years and I'm concerned that at any moment work could dry up and I owe all this money, right? So Well, you got five years. Do you have any other debt? No, we've, we've, that other debt I told I told you I paid for we cut up our credit cards.

The sooner we started listening to you, we cut up our credit cards. We have no car now. It's the only thing we have. All right. Is the two-fourth. So. And the business debt. Okay. All right. So Clifton, question I have for you. So what are your quarters? Are you on a traditional

first quarter, second quarter or what? When is your first quarter done? As far as like for tax purposes? No, just in your business, like with your books, like your profits. Business starts January 1st each year. So of that retained earnings, it's currently $247,000. How often do you put money into that? Is it every month? I put all of the business money into that except for what I pay myself and our business

expenses. I know, but I'm saying do you do that on a monthly basis, a quarterly or annually? No, no. It's done, well I guess you could say it's done daily and maybe I'm not understanding the question but when they go to a savings account for retained earnings, after the bills are paid each month. Here's what I was asking it one way. I've confused you.

Let me come at this. What I would do if I were you, George, push back on this, but you've got $240,000 roughly in retained earnings. You don't want to empty it just to pay off the debt at once. And I agree with George. You got five years, but I think where I was trying to go with this is what if you right now starting today, the 240 or whatever it is you've go with this is, what if you, right now, starting today, the 240 or whatever it is you've got in retainer,

and it's what if every month or every day or every week as you're putting those in, from this point forward, I would put it all towards the debt. So in other words, or let me say this, if the amount, like what is a year's worth of operating expenses for you? Total expenses like what is a year's worth of operating expenses for you? Total expenses, what's a year's worth? Probably 500,000.

Okay. That's cost of goods sold and everything. Okay. My point is, you got a good chunk. Leave the big chunk in, but now instead of adding to the chunk, George, I'm saying he should start, now the retained earnings don't go to the account, they go straight to the debt. I like that. What's your household income that you're taking home?

I pay myself, well between me and my wife it's right at 200. Okay. So based on the 200 and you paying off 230 in 18 months, is there a similar trajectory? Could you pay off the 240 in less than 18 months? I think so. Well, okay. My wife has a very small part of the debt we've paid off already with student loans from when she went back to school to get her doctorate. And I think I have 21,000 left to pay on that, but it'll be paid within 30 to 60 days. Yeah, but that's personal. The question is, on this business debt.

Yeah, that's my question. There's is, on this business debt. That's my question. There's a difference here between personal expenses. I can begin taking the margin that we have in our personal budget and applying it to the debt I own the business to. Yeah, exactly. Plus, like Ken's saying, with your future profits coming in, instead of adding to the giant pile you have,

let's also add that to your debt. For instance, George, if he could put $20,000 a month towards the equipment line. Oh yeah. That's one year. That'll speed this thing up. He pays it off in a year. It's done.

That's the idea. Just put all of your debts in the debt snowball. It's all tied to your name. So there is no business debt versus personal debt. You're just gonna snowball this thing and be done in a year, year and a half. Good call, good hour, George Campbell. This is the Ramsey Show.

year and a half. Good call, good hour George Campbell. This is the Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession, business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning

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what's next. And speaking of what's next, download the CFO's guide to AI and machine learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. This is the Ramsey Show where we help you win in your life, win with your money, win in your profession and win with your relationships alongside the snappy, attired, and also witty, brained George Campbell. You're too kind. I'm Ken Coleman. I had to give you two compliments. All I keep thinking of is you used the word magnanimous earlier, and I can't stop thinking about it.

Oh, such a great word. It's a fun word. We should have a word of the hour. Maybe we'll kick that around in a program meeting. Probably will not get approved. Yeah, we'll do that. But nonetheless, we're here together for you. I'm Ken Coleman, he is George Campbell. George will coach you up on the money,

what to do with it. I'm gonna coach you up how to make more money. How about that? Make more money, keep more money. Those would be our names. That'll help you get through the baby steps. I think it will. So let's get started, shall we, George?

Seattle, Washington is where we go. Michaela is there. Michaela, how can George and I help today? Hi. It seems kind of silly, and I'll try to keep this short, but I'm a pretty long-winded talker. I know that. I am, too. My ex and I, I'm 28. We got married when I was 24. You know, we did all the right things. She got married. We bought a house. Do you got the toys to go along with it? Um, we had a daughter and she's really struggled with alcoholism and because of her safety, I ultimately decided to leave. Um,

he does not pay child support in our divorce. I said, you know, 200 bucks a month. I'll take care of it you know at that point I had been doing it by myself for so long that I was like you know it really doesn't matter. My main thought at that time was I try to give him I think more grace than he probably should. I wanted him to be able to get back on his feet. He was living with his mom and you know, the trucks that we had bought was $30,000. We got a loan, put five down, he owed 25 or we owned 25 or owed 25.

And I just got a statement from them. And this has been a couple of years now that there is still $25,000 left. And so what happens is he doesn't make any payments. They threatened to take it. He makes a big payment, you know, to give him off his back. And I talked to the lender and said, you know, what can I do? And they're basically saying nothing unless he refinances, which has no interest in doing. Um, so between the truck getting behind and then like he doesn't pay child

support. I think he's paid it once last December he paid me the $200. Who told him it was optional? Well, so we don't have it enforced. I haven't like gone through the child support division. We just put it on paper in our divorce but I can make the call today to do it. The courts actually said his child support would be about 800, but again Yeah, I was gonna say it sounds low like keep the truck payment current and you know We'll kind of go from there because the truck is in your name as well Yeah, and so I'm just kind of wondering like if there's anything I can do to kind of get off that and if I should

Call and get the child support, just taking out my fear is whenever I've got this up to him, he kind of withdraws and stops taking our daughter. And I just, I know it's not my responsibility to keep their relationship good. But I do feel, you know, an obligation because she's so young to at least buy some time for her to make the choice on father. How old is she? Progressive, she's two. Yeah. Is he stable?

Is he stable now, at least from unemployment and living on his own or is he still with mama? No, he's still with mom and he's actually never taken me off of the joint account we had. So I don't use it, but I can see it. I imagine there's some cash coming through that I don't see because I've never seen

a payment to his mom. I've never seen any sort of large withdrawal from the account. I mean, it's literally all, I'm sorry, it's alcohol. It's $30 at gas stations here and there, the occasional gas stop. Does he have a job? $100 at Walmart.

Yeah, yeah, he has a job. And from what I can see, he gets about $800 a week through that job. What is his job? But he doesn't help. I think he's working construction now, doing concrete. And he just, I mean, he doesn't do daycare. He sees her on Monday and Wednesdays for a couple hours. And then he sees her, he gets her for an overnight on Friday

And if he were to be paying you If he were be sorry to interrupt, but if he were to pay you $200 a month, would it make that much difference to you? Well, that's why I'm kind of like torn because I'm working through the baby steps on my own To just try to get ahead of that two credit cards that I mean my through the baby steps on my own to just try to get ahead. I've got two credit cards that, I mean, my debt's less than 5,000. My car I paid off when we sold our house. Like I'm doing okay.

And that's, I'm kind of like, is it even worse ruffling the feathers? But at the same time I'm like, it's been, you know, a year and a half and you haven't done anything and you're flaking on taking her all the time. So if you're not going to at least feel- Micaela, you're the sweetest person I've ever time. So if you're not gonna at least see her then you need to introduce her to you.

Micaela, you're the sweetest person I've ever talked to. You have spent your whole life trying to avoid feathers getting ruffled. You're very kind. At some point you can't let people walk all over you like this. What's that? Say that part again.

He's a good friend to his friends. He's a good, you know, but he's just not a good partner and he's not been a great dad up until, you know, the last few months. You can be a great drinking buddy and be a terrible husband. Yes. Well, I would say this.

Yeah, and that's kinda. If you were my sister, and that's how I'm gonna react to this. If you were my sister, I would be saying, I would be putting up strong boundary because my concern is the alcoholism and the time like my number one concern is not the $200 I'll get to that in a second my number one concern if you were my sister would be that's my niece That's your daughter and and I don't like her with an alcoholic father

I don't care how nice and sweet he is and how many stuffed animals he buys there needs to be a boundary there and he he needs to hit rock bottom. And as long as he's staying with mom and he gets to see your daughter, he's not hitting rock bottom. So I would be dealing with that. If it were just the $200, I would say forget it because it's not worth the fight. And I'm not sure it is. I'm still on that note of it's $2,400 a year. Sure, it'd be great for you to get it to George's point. He owes it. But George, I'm more concerned about the alcoholism, the custody, and I might use the $200. I might go to the court and go, I need some help with this. And you let him know, Give him some fair warning. Hey listen.

I'm very transparent with him. I sent him a long message last week. I said here's kind of where I'm at like I need you to think about this because we can't continue what we're doing. Did he respond? I do have solace. Yeah he just kind of says okay you know I'll see what I can do but I know nothing will come. I have comfort because he's looking at his mom and I know her mom and we have an okay relationship. So my daughter's at least safe while she's there because they're there. So I'm like, I have, part of me is like, don't move out of your house. Well, then I wouldn't mess around. I mean, George, what do you think? I just feel like,

did you go through the courts for this? Was there a decree? Yeah. So everything was actually finalized this month on the 18th. So why did the judge not finalize and say, hey, he's got to refinance, sell, or pay this car off and force it as part of the deal? So they did. So on paper, it does say that he is responsible for that because I gave him everything else in half for the truck loan, but the lender is saying, well, you signed the loan, so you're not off the hook.

Well, they need to force, the decree would then force a refinance in order to get your name off of it. And so you need to go, it's not gonna be fun. You gotta go back to the courts and say, here's everything on paper, which by the way, is now the law of what he has to do. And he's not doing it.

And as long as you keep letting him not do it, he's going to keep not doing it. And so I would not have as much grace as you. I'm going to fight this on behalf of my own family and my own financial future. If I were ever governor of a state, one of the first things I'd do is a deadbeat dad policy and I'd put them to hard work, hard labor until they shaped up. This is the Ramsey Show. This show is sponsored by BetterHelp.

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So go to ramseysolutions.com slash smart tax to take advantage of early bird pricing and stress free filing. That's ramseysolutions.com slash smart tax. Welcome to the Ramsey Show. I'm Ken Coleman. George Campbell is alongside. We're glad you are with us. 888-825-5225 is the phone number to jump in. Kristen is up in Billings, Montana.

Kristen, how can we help? Hi, thank you for taking my call. My husband and I have a slight disagreement. I have, most of what our income is is rental houses and in 2023 we purchased four new houses that puts us up to 24 and we've already paid one of them off we still have three outstanding mortgages and the total for all of them combined is right about a 420,000 and I have a stock portfolio that has $506,000 in it. His debt, his idea is that we go cash it out right now and go to pay off the

mortgages. I'm like, no, that's kind of my, that was my plan for retirement in case everything else went south. Um, the way things are sitting up, we're scheduled to have all three of these other mortgages paid off by the mid of 2028. And I don't see what would be the point of cashing out all of my stock portfolio to pay them off now if we're literally going

to have them paid off in the next couple of years. Well, I don't think anyone's in the wrong here. I don't think anything is on fire. I do think we might need to get to the motive and heart behind it. And then we can look at math and go, okay, what mathematically should and would happen if we pay off the mortgages, we free up those payments,

which we can now invest, right? So there's one side of it. It also reduces your risk, gives you more peace. We don't know what the next three years hold. I hope it's all sunshine and rainbows. The world is a wild place, right? We don't know what's gonna happen with the tenants and all of that.

And so it's gonna give you a little more peace, a little less risk. On the other side, you have the stock portfolio. Is this your entire nest egg? For the most part, it's literally, uh, that is mine aside from, uh, I only work 26 hours a week doing home health care. And so then I also manage our 24 rentals, but, uh, so I only have 7,000 in a 401k of my own, and then he has 22,000 in his 401k.

Okay. But other than that, that's really, is this stock portfolio non-retirement? 401k of my own, and then he has $22,000 in his 401k. But other than that, that's really the side of the stack. Is this stock portfolio non-retirement? Just in a taxable brokerage account? And what is it invested in? It's in a combination of mutual funds, independent stocks as well. I've had it managed by the same gentleman for the last 20, I'm 41.

And he's managed it and he gets somewhere between a 13, 14% every year return even when the market took a crash in 2023. Okay, so you trust this person? So I think he knows what he's doing, yes. And I just, I don't know if it would be worth pulling it out to pick because we bring in on a, if you average how, we always have one or two tenants who is either late or makes it a month, but we bring in about 21 and a half thousand every month on rent. So it's not like if we were to have to worry about, there's enough to cover.

And what are the total mortgage payments that you're making right now? The three of them combined, the minimums would be $3,800. We're putting $10,000 a month on the other one, on one of the three. So you take $3,800 a month and invest it instead, you're gonna be okay from 41 to 60, right? Do you see his point? I'm just trying to, I'm playing devil's advocate to show you the other side, on top of the interest savings of not paying interest

on these mortgages for the next three years, having them paid for. So again, I don't think there's anything wrong with following your plan and going, hey, I'm gonna just, we're gonna pay these off in the next three years. I think it's a great plan to have a fully paid off rental portfolio. You guys have done really well.

Nothing is on fire. Nothing's gonna put you in crazy risk, but I can see his point and I don't think it's as bad as you think. I know you want a nest egg portfolio. The rental properties are part of your nest egg. You have 24 paid for rental properties. If you need money, you know where to get it.

Either from the cashflow or you can sell one if worse comes to worse. What's the total worth? Did you get that number? What is the total? All 24, what's the value? Well, our market here has been absolutely nuts. So I have the tax valuation is 4.2 million. So I know it 4.2 million. I don't want the tax valuation. What like if you were to sell all 24 today a

modest projection on what you could get for them. Not a fire sale but you get market value. What is the worth of all 24 roughly? I would say it's probably closer to 5 million. Okay see that's the point George is making. I was kind of waiting to go who cares about the 22,000 over here and the 24 there? The five million is the number. And you can cash out of those at any time and invest that. You know what I mean? That's just a whole different ball game.

So I could see both sides as well. I really can. So is there a compromise where maybe we go, all right, once every year, I'm going to cash out enough to pay off one mortgage. Split the difference. That would be entirely doable. There we go.

I think that makes him feel a little better and it does reduce your risk. It causes you guys to make a little more progress than you would have, and it causes you to slowly deplete this portfolio, and remember, you're gonna free up a payment that you can now invest on your own volition as you please. That's right. And so, either way, this is a good problem to have. You guys are doing really well.

No, we're not wringing our hands for you guys. You guys are in really good shape. I am the least worried about this, but I do think just some compromise would get you guys to an agreement and cause you to move forward, because this is living in your head rent free right now. It doesn't need to. No, that's good.

Thanks for the properties to manage. Yeah, absolutely. Way to go, Kristen. That's incredible. Five million portfolio. Yeah, five million dollars. At 40 years old. You know, she's right.

She's talking about that area of Montana is going bananas. People wanting to get out there. You and I should have seen that craze. Should have done it. We should have went out there and bought ourselves. You and I, could you imagine when our big cowboy hats and boots. Living off the fat of the land. It's always been a dream of mine. I see one of us having a blister and the other a splinter. You know what really bothers me? Never see a cowboy with glasses on. What's going on? You know what you make a very good point. They all have 20-20

vision out there. I'm trying to think of the last major movie or television show that had cowboys in it where they were wearing glasses. Who said that you can't be a cool manly cowboy and have vision impairment? I'll tell you what I'm thinking. I'm thinking Jason Priestley's character, he's from 90210, you don't even know that show. You're dating yourself. He had a character in Tombstone and his character wore glasses, but he was a wimpy guy. There you go. That's just what I'm saying.

So I'm with you. I'm done with it. You know what? Hollywood needs to cast a cowboy with some glasses. And I'm available. You know, America's ready for it. You think so? Yeah. A Middle Eastern cowboy with glasses?

Hey, they call me the Costco cowboy, so I'm already halfway there. Who is they? The people. Is this a thing? Yeah. Has one person gotten in your DMs one time and called you the Costco cowboy? The amount of times people send me just Kirkland signature related content would blow your mind, Ken.

Well, you've made a big deal out of it. That's my fault. That is on me. So there it is. I love it. Can we get to a social question? Do we have time for them? Do you have yours?

I've got them ready. I was looking for one actually, as we were talking about you being a cowboy. Ooh, this is a great one for you, Ken. Go for it, go for it. Johnny from TikTok asks, during what point in the baby steps is it best to start a business? What say you?

Baby step. At what, during what point? Four. That's when you're debt free with an emergency fund. Yeah, we've got an emergency fund and now we're able, we have enough margin to do baby step four, which then tells me, all right,, we have enough margin to do baby stuff for, which then tells me, all right, I've got enough margin to start something on the side.

Now, the way the question was worded is, is when is it best? Is that correct? During what point is it best? Is it best? That's ideal. Ideal is you've got the financial foundation. I'm not going to get mad at somebody if they are able to start a side hustle, for instance, with very little cash,

capital outlay, and it helps pay off debt. In other words, I've talked about this, people have started trash can washing businesses, a lawn mowing business. It's okay if it's that to help us get through the baby steps faster, but something that's like I want to try to live on this and this is my future. I don't like you trying to do that during baby step two and three. And the more the startup costs, the more we say,

hey, you need to wait until you are dead three with an emergency fund, my friend. So baby step four is when it's time to start going, okay, what could this look like? Good question though. John from Johnny from Johnny, tick tock. You got to love. They also call me Johnny

tick-tock they call you that yeah nickname from high school I like I could combine those and call you the Costco cowboy Johnny tick-tock this is the Ramsey show we'll be right back with more of those dad jokes you shouldn't own a gun you're not willing to shoot. In moments of self-defense, a Berna launcher lets you protect yourself in a non-lethal way. That's exactly why Berna launchers were created. Everyone from parents and nurses to pastors and even special forces veterans rely on Berna to protect themselves and their families. I own several Berna's myself.

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And other Berna products like safety alarms, defense sprays, and body armor are also 10% off for our listeners. Just go to Berna.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave. People ask me all the time, George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget.

Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the Every Dollar Budgeting app a game changer. With Every Dollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back, and save more money. So how much money are we talking here? Well, the average Every Dollar budgeter frees up $395 in their first budget.

That's the hack. And if you ask me, I think you're way above average and you'll save even more. So what are you doing still listening to me? Go download the Every Dollar app for free and start saving more money right now. Welcome back to the Ramsey Show. I'm Ken Coleman and George Campbell is joining me this hour. Triple eight, eight, two, five, five, two, two225, 888-825-5225. You know, George, before we get to the phones, I thought it might be fun to talk nerdy. You know I love talking nerdy.

I mean, you talk nerdy about as well as anybody I know. Well, you know more big words than anyone I know, so we both relate in that way. And so this is a fun little segment where George nerds out on the fine print, if you will, as the former host of the fine print. Do you still do those? You don't do those.

No, I miss it. We kind of switched it up and did my YouTube channel, which is a version of the fine print podcast. You're doing the same thing. But it's the same thing. I wanna break down these money concepts that can feel overwhelming, complicated. I never fully understood it.

And I want to break it down quickly for the benefit of the people listening and watching. I can't wait. What is the topic today? Refinancing. Oh, so you've heard of financing. We're talking about re. We're refinancing. Coming back to the table. Booyah.

OK. And we're going to specifically focus on refinancing a mortgage. OK, so if you bought a home and interest rates were high, you may be wondering if refinancing might save you some money now that rates have dropped a little bit. Well, it can, but it also depends. So what is this? Mortgage refinancing, very simply,

it's when you replace your current mortgage with a new one. Why should you do it? Why do people do this? Well, number one, to get a lower interest rate, right? So you gotta make sure that refinancing will save you money in the long run more than it costs you. Number two, people do it to reduce the loan term and become debt-free faster. So you go from a 30-year mortgage

or an adjustable rate mortgage to a fixed rate, 15-year mortgage, for example, and that can get you a lower interest rate, shorter mortgage payoff, get your house paid off sooner, double win. Another reason people do it is to get rid of PMI, private mortgage insurance, and that's a great way to pay less on that monthly payment because you're not paying the lender anymore and it really just protects them in case you foreclose. And lastly, like I mentioned,

you're switching the loan type. A lot of people have an adjustable rate mortgage and maybe they want to go to a fixed rate mortgage. That would be a good time to refinance as well to avoid those rate fluctuations. So for everyone out there, here's the questions to ask yourself, how much will my interest rate go down? How much will it save me? And what will I pay in closing costs? And closing costs can run about two to 6% of the total amount you're borrowing,

depending on your situation, where you're at, all of that. So here's the deal, simply only refinance if it gives you a lower interest rate and saves you more money than it costs. So an example, if you save 2,500 bucks a year refinancing, but you have 10 grand in closing costs, it will take four years to break even before you start saving money. So refinancing is only a good idea

if you plan to stay put long enough to save money. So that's kind of where you got to weigh it and go, you know, we do plan on staying put long enough to save money. So that's kind of where you gotta weigh it and go, all right, you know, we do plan on staying here long enough to get the ROI on this. So it's that simple. Here's six steps. If you're ready to do this, crunch the numbers to see if it makes sense financially.

Number two, you've gotta shop around for the best interest rate. Three, you gotta choose a lender. Don't forget to ask about those closing costs, the fees, the prepayment penalties. A lot of them will lure you in and go, oh, we're gonna give you a great rate. But then they ding you with all these fees

on the back end to make up for it. Don't fall for that one. Little bait and switch. You love that term. I was looking for it, you helped me out. I got there faster, I'm quick to the draw. You are. Cowboy camel. That's it.

And number four, you gotta lock in the rate. Five, you go through the underwriting process, just like you did when you got the original mortgage. And then six, you gotta lock in the rate. Five, you'll go through the underwriting process, just like you did when you got the original mortgage. And then six, you close on the new mortgage. Good for you. So here's the deal. If you need help, you got questions with this about refinancing, do what I do.

Reach out to our Ramsey trusted friends at Churchill Mortgage. They are experts in this. And you can go to ramsysolutions.com slash mortgage or click the link in the description if you're listening on YouTube or podcast. Quick and painless, Ken. This is why I like when you talk nerdy.

I mean, we all need a little nerdy talk. Some people fell asleep at the wheel. I don't think so. In that segment. I think you laid it out beautifully. Some people were so riveted. Yeah. I loved it.

I thought it was very helpful. So there you go. And by the way, he mentioned it very briefly. I got a call back to it. This is why you want to go to George Campbell's YouTube channel. He's got all kinds of really fun and and It's made for you. We break it down. You break it down. You make it fun. You make it palatable No matter what it is. Yeah, we make it palatable. That is true Joseph is up next in Dallas, Texas Joseph. How can we help? Hey, how's it going? Good. How are you, sir?

Good. It's just a real privilege to be on the show. It's kind of surreal. So thank you very much. I feel very honored. Appreciate it. Well, we're honored to talk to you. What can we help with today? Well, so I just recently started a job about going up six months ago. I do enjoy my job and my bosses are great. It's a good company. I mean, I think they really do right by their patients. And the thing that trouble I'm having is I am making less than I was expecting when I started because I am on a pay per visit scale. So my base salary is 73,000, but what I was initially told was on average if I see a certain amount of patients a week, I would probably get around 85,000.

But over my time working here, I haven't been seeing that unfortunately. And it's not because of, it's not their fault. It's just external factors like pain, patient cancellations and such. What business are you in? Oh, so I guess I should have mentioned that I thought it is. I'm a physical therapist. Oh, okay. And so if I understood you correctly, the anticipated number of 83,000 that you got excited about when you signed on hasn't been met because you've not seen the amount of patients that they said you would need to see in order to hit that number.

Correct. And what is it that you think you should be making? Because you let off by going, I'm not making what I should be. So what is that number? Yeah, I mean, about 85,000 is what I anticipated making. Okay. Well, but you anticipated it based on them saying, you'll make roughly this if you see this many patients.

So what options do you have? Are there other physical therapy businesses that have a higher foot traffic? There certainly are uh... i chose this particular setting just because i would work with uh... the neuropopulation in it was uh... i like what the company was about for me as well i'm also just i have a lot of student loan debt and this you know i'm just trying to make sure I make the right

decision so... Well, the right decision right now at this point in your career, how old are you? I'm 27. Okay. At this point in your career with a lot of student loan debt, and do you have other debt outside of student loans? I do have a car payment, but that would be it. Okay.

So, what's your total amount of debt? It's $247,000. Oh yeah, okay. The answer is really easy. We're not staying at a place because we really like it. We need to make money. And you need to make as much money as you possibly can. Now this is doable. And George, you've coached a lot of people to do this, but if your call is, your question was, should I stay, is that what I'm getting at?

Yes, just because I've only been, I mean, I've only been there a short time. Doesn't matter. I eat. Doesn't matter. Can you get a job right now where you can get a 15, $20,000 bump? You think that's even possible? Oh, that's definitely possible. My man, we get the best paying job possible in order to attack this debt with everything

you have. And there's more than one great company in America, and so you will find it, but you need to be making six figures in order to pay this off in the foreseeable future, Joseph. And that might mean you get that new job and you take on a bunch of side hustles and work overtime and, and, and for the next three to four years in order to knock this out. What's the car loan? I agree, I agree. What's left on it?

7,000. Okay, so the majority of it was PT school? Yes, yes, just PT school. Do you have any savings? Yeah, I do have some savings and I did have a sign on both so I'm trying just not to use that. How much savings do you have? The majority of the savings.

Four thousand. George, tell him what he does. Well you got a bunch of loans out there, right? Probably fifteen to twenty different student loans? Mm-hmm. You're going to attack that smallest one and free up a little payment. What that's going to do is give you a little light at the end of this tunnel that you're actually gonna get out of this thing.

So the longer you hang on to all of the savings, it's gonna give you a false sense of relief. Because my friend, there's an avalanche on the other side and we have to start attacking that thing one bite at a time. That's the baby steps. So hang on, I'm gonna send you a copy of my book, Breaking Free from Broke, to give you the step-by-step plan, give you the motivation to climb out of this thing. And I'm also gonna send you Ken's book. Which one should we send him, Ken? What's gonna be most helpful to him? Uh, I think the proximity principle because he needs to be

leveraging relationships as much as he can to move up the ladder as quickly as he can to be able to take that income and do what you just told him to do. So hang on, we'll give you the proximity principle as well. All right, quick break. George has to gargle with salt water. And then I'll check on him, make sure he's okay, and we'll be back. This is the Ramsey Show. Hey guys, George Campbell here. Do you ever feel like insurance companies only care about your money and

not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more. And when you're ready to get the coverage you need,

you can connect with a Ramsey Trusted Insurance Pro who will only get you what you need at the best price. Go to ramsysolutions.com slash insurance, ramsysolutions.com slash insurance, ramsysolutions.com slash insurance. Welcome back to the Ramsey Show alongside George Campbell. I'm Ken Coleman, 888-825-5225 is the phone number to jump in. Oh boy, George, I was looking the other day at the calendar and I thought I got to give him my tax pro.

You were dreading it. Not dreading it but I just the very word of tax gives me a little anxiety. It's a what I like to call a Tums moment. Meanwhile I just scanned some some tax files did my upcoming appointment at the printer and I was stoked. Yeah Stacey is gathering all of our documents and I am Stacey in this situation. We will meet with our tax pro and anyway, nonetheless, hey, it's coming around the corner. And one of the best things you can do is to have a good tax pro in your corner.

And again, I'm telling you, I'm gonna say hi to David. He's local, he listens. So he'll hear this two days from now and I'll get an email from him. David, Stacy and I love you. We appreciate you, sir. He takes good care of us. He's our tax pro. I'm not kidding around. I sleep very, very well at night knowing David

is on the job. And so they help you. He helps us. I mean, he helps us think about so many different angles, deductions, life changes. Oh, he's the deduction king. He's amazing. Go to ramsayslucents.com slash tax pro to find a CPA and enrolled agents that have been vetted by our team at Ramsey. It's ramsysolutions.com slash tax pro. Do you do your own? No, I've got a tax pro because again, it's like getting my lawn. You don't do a shout out for your tax pro.

I love my tax pro more than you love your tax pro. Here's the thing, I don't want other people to find them and now they're booked up. I just did a first name only. I still don't, I got trust issues. They have a very unique name. All right. Can't give it away. Whoever George's tax pro is, I tried.

I tried. He's not willing to give you some love. I'm not giving it up. All right. Once you got a good one, you don't give it up. But you can find a trusted one in your area. That's right. At ramzesolutions.com slash tax pro.

And here's the deal, our tax pros aren't gonna be like, have you ever thought about getting a G-Wagon to write it off as a business? No, no, they aren't gonna be like, have you ever thought about getting a G wagon to ride it off as a business? No, no, they're not gonna give you trash. I've thought about getting a G wagon. Tax advice for some write off. Do you think I would look good driving a G wagon? Would you look good?

Yeah, who doesn't look good? You know? Well, I don't know. I mean, some people shouldn't probably drive a G wagon. Yeah, I did see a pink cyber truck the other day and I thought, wow, it could get uglier. I didn't think, and then so. I've not seen those. And that had to wow, it could get uglier. I didn't think, then so. I've not seen

those. And that had to be like some kind of Mary Kay situation. I don't know what was happening with that pink Cybertron. Oh, George. It's a dark time. You won't shout out your tax pro, but you'll give Mary Kay some love. That wasn't love. I'll tell you that much. You know me. Oh, we're having fun, folks. What are you waiting on? Levi's up in Las Vegas. Viva Las Vegas. Levi, how can we help? Hey Ken, hey George. Thanks so much for taking my call. Sure. So I'm getting ready for about a hundred thousand dollars in expenses at the same time that I'm going to be losing my income. My wife and I are getting ready for graduate school. We're both gonna be starting grad school this year

I'm gonna get a doctorate in physical therapy and she'll be getting her master's in dietetics administration And I mean eventually we'd love to start a business together where we can kind of help people improve their health through diet and exercise So we've known this has been coming for a long time We've been married for four years and we've been preparing since the moment we knew that we wanted to start this career. And so if I'm understanding, let me jump in real quick just for us and then the folks following along at home. So that's with you both going full time to grad school, that's why we're losing the $100,000

income. Yeah. So, well, I also, my current job, I take care of a kid with autism and he graduates in May. So it just happens to work out really nice that I don't, there's no more need for my job. So I lose my job and then the next two weeks later, I start school. But what was your plan to cover living expenses while you both are in grad school?

So we've been saving a lot of money. We've been blessed in so many different ways. So we have about $70,000 in a high-yield savings account. We're closing another investment account that's got about $30,000 in it, and we're going to transfer that money into our high-yield savings account. And then we've got about $20,000 in another investment account and about 20,000 in cash between our savings and checking accounts. Okay, so you have 140 that you will have liquid.

You need to cover, you use 100 to cover grad school for both of you, is that what you were saying? So my grad school will cost 90,000 and hers will cost 20,000 but her family has graciously offered to pay for her tuition. Wow, okay. Good for her. So good and at you.

Exactly, amazing. You'll have 40 grand left over after grad school's covered and you got a baby on the way, so let's keep a big portion of that saved up as an emergency fund. Do you guys have any debt? Yeah. No, we have zero debt.

We own a house and we've got three bedrooms and we rent out two of the bedrooms to friends and they pay 550 a month. And so really after taking all our living expenses and our rental income, we only have to pay about 12,000 a year for our housing expenses. Wow.

Okay, and you guys are living pretty frugally, it sounds like, that's good. So we've got most of this figured out. What's the question? So my big question is, we wanna be good parents. We didn't think that we'd be able to have a child, and now the due date is the week after my wife is supposed to start graduate school.

And so I'm worried that the money that we do have won't quite stretch far enough through grad school. And I'm also worried about how can we buy time with our child. We don't necessarily want to do daycare or anything like that. But how long is your program? Three years. So you won't be working for three years? So I'll be out of a job for three years and my wife will not be able to work for the first year her program is accelerated but we're also How is that money? You don't have the money.

You do not have the money right now to make it. You know that right? For three years. So I'll tell you what I would do. I'm gonna throw this at George because he's crunching the numbers over here. If it were me, I would have your wife continue to work and have her pause grad school. Her two-year program, well I didn't ask, hers is a lot less money and we know that. How long is it? It's one year. I would push hers and knock yours out so that you guys can again have some income coming in.

I know she's gonna have a baby, but, and what about health insurance? Yeah. Health insurance will be covered through my graduate school. Okay. I would, oh yeah. And Medicaid for me not having a job. George, do you, I, eww.

I just think we're trying to do a lot at once here. I almost wanna push his back another year. Yeah, what's the game plan? If you're not working for three years, she's gonna keep working, she's gonna take a maternity leave for a few months, I imagine. And then is she planning to go back to work because you said

you want to also have time with the baby. If she's not in grad school, if we do the plan that I'm suggesting where we wait for her to go to grad school after you're finished and she but she has the baby, what kind of income does she bring in? So if she doesn't go to grad school right now she's making well under $20,000. This year she made less than $10,000 this year. That's not even real money. That's like a part-time babysitting job. Yeah, she's a full-time student and president of lots of clubs at our university.

But if she gets her master's degree, then she could potentially be earning $70,000. Yeah, but you guys are going to starve. You called us and asked us what we thought. We don't think you got enough money to do this. So I would delay either her and she goes and gets a 40, $50,000 job at minimum to be able to make up the difference. And that means somebody's watching the baby

while she's working. I mean, you guys gotta figure this out. Or if I were you- She can't be a full-time mom at home with the baby and full-time at work pursuing this dream. You may have to push your grad degree off two years. You go get a good job. Push it off a couple years.

Have baby. I would have a come to Jesus reassess conversation with your wife tonight and go, hey, listen, we both had these dreams. They'll happen one day. Right now, we gotta delay one of these dreams so that we can eat and provide a home for this baby. I'm with you, George.

And Levi, I'm talking like I'm old enough to be your dad, so here you go. Plenty old enough. Thank you, George. The baby is the number one dream right now. And you've done very well to put that money away. And to stay debt free. You are not hurting your professional,

listen to me Levi, you are not hurting your professional chances and your potential by delaying this a year or two. Okay. Let's get the wife out of school, a part-time job or full-time mama, and you're working full-time. We'll keep stacking cash. Please take your time on this. Don't rush this. George, thoughts on that final word? No, I'm with Papa Ken over here. Thank you. This is the best thing for you and your family

and the careers. If they need to take a back seat for now, I'm okay with that. Yeah. That education will still be there. Trust me. Alright George, good hour. Good stuff. Appreciate all of you for listening. Thanks to our crew for keeping us on the air. This is the Ramsey Show. The right questions are the key to unlock personal and professional potential. That means if you're not where you want to be, you are not asking the right questions. I'm Ken Coleman and this is what my new show, Front Row Seat, is all about. Over my career, I've had the distinct privilege

to interview successful people from all walks of life and to coach over 10,000 professionals who wanted more. What sets successful people apart is a never-ending desire to learn and grow. Each week, I'll be joined by industry leaders and world-class experts to have a conversation about how to get better, move up, and lead well in work and life. But the best part of this show is you get to be a part of the conversation. Live in studio we'll have a group of professionals just like you who have the power to ask questions and

steer the discussion in real time. It's an opportunity to get real answers to real questions, like how to make the right decisions, have hard conversations, live a balanced life, and discover your next steps to grow. Join us every Tuesday for conversations that are guaranteed to surprise, challenge, and inspire you. Check out Front Row Seat wherever you get your podcasts.