The Ramsey Show - How to Escape Living Paycheck to Paycheck

Episode Date: December 11, 2024

📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 📱 Listen to the full episode for free in the Ramsey Network app. Watch United States of Anxiety exclusively on the free Ramsey Network app! Dave Ramsey & George Kamel answer your questions and discuss: "Should I fix my car or buy another one?" "Living paycheck-to-paycheck on $600K a year," "How do I get my wife on board with the plan?" "How does compound interest work on multiple accounts?" "Should I get my fiancé to sign a prenup?" "How much house can I afford?" "My parents are kicking me out for failing college?" 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 💤 Visit Helix Sleep for special offers! 💻 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 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 💵 Start your free budget today. Download the EveryDollar app! 🎟️ Get Tickets to the Money & Relationships Tour 🎄Hurry—Your chance to win $5k is almost over! Enter the Ramsey Cash Giveaway today! 🎁 Our 50 days of Christmas deals are ending soon! Get 30% off meaningful gifts. Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. show we help people build wealth do work that they love and create actual amazing relationships I'm Dave Ramsey your host George Campbell number one best-selling author host of the George Campbell show on YouTube is Ramsey personality is my co-host today the phone number here is triple eight eight two five five two two five Tony is in Chicago. Hi Tony, welcome to the Ramsey Show. Hey guys, thanks for taking my call. Sure, what's up? Hey, so I manage a special needs trust for my mother who's 67 and currently the money

in that account is about $170,000 and it's all sitting in cash. And I got a call from the bank today asking if I, you know, they're trying to encourage me to invest it in different ways. And I recently saw a video of you talking about the risks of bonds. And I wanted to call and ask your opinion on how I should best feel about this. Yeah, I would not do any bonds for sure. Your mom is in a special needs trust. What's her? What's her? Yes? She has multiple sclerosis has had it for 30 years and is in a nursing home. Oh wow, okay, and the 170 is all the money she has in the world

Plus about a ten thousand and checking the count, but yes, okay And how much are you using? Is there a burn rate on it? Are you using it for her care? I have not touched a cent of it in the few years it's been active since I established it. How is she being cared for? Medicaid. Okay. Alright, cool. Alright, so to the extent we can leave it alone, we can invest it in something that has a longer time horizon to be safe.

So just like a good growth stock mutual fund, if you leave that alone five years, you're pretty safe. So I certainly wouldn't put all of it there. I'd be looking for a mix between high-yield savings for a big chunk of this and then the other chunk I might do something as simple as an S&P 500 or sit down with a SmartVestor Pro and just pick out some very very calm growth and income type funds but all of those funds would be you know in the last year they would have paid 20 percent, but the last year the market was up 30, which is crazy. That's not normal. But in an average,

they would probably pay out 10 where the market's paying out 12 where a high yield savings is paying out 4. So, you know, I'm going to invest some of it, not all of it. I'm going to invest some of it, not all of it to the extent I'm comfortable I can leave my not all of it. I'm gonna invest some of it, not all of it, to the extent I'm comfortable I can leave my hands off of it. Okay. What does the next one to two years look like as far as short-term costs? I really don't know how to answer that question.

I don't foresee any major costs, but you know, like for example, she just had a bunch of dental work done that wasn't covered but we were able to pay that without having to dip into this special needs trust so things like that maybe but otherwise I'm not sure. Okay yeah I mean if it was me I'm probably putting like a hundred in some mutual funds with a SmartVestor Pro that have a very low volatility, very calm funds, okay, and then I'm gonna put the other like 70 into just high-yield

savings, but that will at least change your income. Instead of making $4,000 on that hundred, you might make $12,000 on that hundred. That kind of thing. I understand, okay, outstanding. But you want to be able to, you know, you want to be able to access it when she needs it because that's the primary thing it's for. So yeah, click on at Ramsey Solutions, just click on SmartVestor Pro and find one near you that you like and sit down with them and they can teach you some things you can do. Bryce is in Dallas. Hey Bryce, what's up? Hey guys, thank you so much for answering my call. Sure, how can we help? Well I ran into a recent situation, let me just get into it, but basically I've driven a 2018

Ford F-150 for about seven years. We ran into an engine issue to where the second engine, the second cylinder within the engine busted. Um, after taking it to two mechanics, I got the same verdict that it's going to cost about $15,000. It's going to require a whole brand new engine replacement. Um, and so just considering my options, these two top things have been entering my mind either one, I paid a $15,000 to go ahead and get the engine replaced. Uh, this is an F one that has has about a hundred twenty seven thousand miles on it or I can go toward

getting a new vehicle and the one that I'm currently let me maybe I have a lot of numbers that I've just been working through but let me just give some details but it's the exact same vehicle exact same model the only difference is it's a brand new year. Considering the down payment that I would make and the vehicle trade in value that I got from a dealership, um, comes out to about $25,000 going in. Uh, the vehicle price. Um, it is at quoted at is about $40,000. Um, and the current APR rate is 1.9% over 60 months. So ballpark. That's $15,000.

You want to go buy a brand new truck is that what you said? Yeah I'm considering either buying a brand new truck versus getting into it. Dude you're broke. You don't go buy a brand new truck when you're broke? No. Okay. Okay this this this 2018 if it was running is worth what? 2018 I mean if it was worth running I mean it's if it was running it's ten thousand eleven thousand ballpark. Yeah so that's what you get. You got a twenty thousand dollar or ten thousand dollar truck. You got notes on this truck right? For pay paid off. Okay. And so you want to use this as an excuse to do something stupid and go in debt and buy a truck you can't afford. No!

How much money do you have saved up? About $20,000 saved up. And what's your income? $95,000 a year. Okay. And does that $20,000 you have saved, does that include your emergency fund or is this just your car savings fund is 20 grand? That's emergency fund 20,000. Buying a new car is not an emergency, honey. By definition, it's a Bryce wants a new truck is what this is. That is true.

There's no emergency here. All right, so let's let's backtrack a little bit. If you get a different car, you need to get about a $10,000 car that you can pay cash for. Okay? That's the wise thing to do in your situation because car payments are a mathematical ball and chain that will 100% cause you to not build wealth and stay middle class the rest of your life. If you invest into a good mutual fund, what you were getting ready to put into that truck, you'll be wealthy. Okay. That's what I want you to do. I'm not against truck. I got a nice truck. I drove a nice truck to work today. Yeah. Yeah. I know. Yeah. That's not the point. Now let's backtrack on one other thing too. $15,000 for a new engine in that truck is

S and 9. Somebody's running you up a flag. So you need to look at a couple of other things. Number one, I want you to hit two more good mechanics and I want you to consider two possibilities to fix the truck before you make the decision to get rid of it number one possibility is by a salvage engine from a junkyard on a truck that was totaled but the engines perfect

and the engine has ten thousand fifteen thousand miles on it you can buy that from pennies of what you're talking about or do something like a factory rebuilt motor not a brand new motor like a Jasper Brand as an example they rebuild them and it's half of what you're talking about So you do not need a brand new engine in a 2018. That's asinine fix. That's a bad repair So you need a used engine or a rebuilt engine in the 2018 then you decide if you're gonna keep it or not No new trucks Bryce if you want to be rich. This is the Ramsey Show.

You know I love when I get to talk about this each year during the holidays. As in years past, this December, Xander is donating 25% of all ID theft protection sales to Team Rubicon, an amazing veteran-led disaster relief organization that brings assistance across the country after major disasters and storms. These guys do incredible work on the ground helping those in immediate need and have a huge impact in helping people get on the road to recovery. Xander has contributed over a half a million dollars to worthy causes like this every December. Listen, ID theft is a reality and being protected has just become a necessity, even for our

kids. Their plan bundles together all the protections you need while being the best value out there. It's the only plan I've ever recommended and you can give it as a gift. Visit zander.com or call 800-356-4282. There's no better way to protect yourself, your family, while helping others in serious need. That's zander.com or 800-356-4282. George Campbell Ramsey personality is my co-host today. Bill is with us in San Diego. Hi Bill, how are you? Bill?

Hello Bill. Hey, how are you? How can we help? I'm good. How are you? Good. How can we help today sir? All right, so my wife and I combined we make about five to six hundred thousand dollars a year But we still somehow are unable to save as much as I believe they should save. So that's my problem. Our monthly expenses are about $30,000 a month. And then add taxes to that. So we pretty much even out every year. And I believe when we make $500,000 to $600,000 a year, we should be able to save one.

I agree. I think the $30,000 a month expense is your clue. How much of that is debt payments? Well, it's on two properties. One is primary residence and one is an investment property. And the debt payments on the mortgage are added to about $12,000 a month. Yeah Why do you need $18,000 a month to run your household? Well about eight to nine thousand dollars go to charity For a good cause and then the rest like I would say about ten thousand dollars is for groceries Utilities like I would say about $10,000 is for groceries, utilities, for the car payment and a little bit for you know towards the... Why do you have car payments when you make $600,000 a year? Say that again? Why would you have a car payment when you make $600,000 a year?

Well we, one of the car is paid off or the other one, it's a lease. So we make about $750 a month for that one. We have a bigger family, five people. So, you know, it's a relatively bigger SUV. Well, which you could have written a check and purchased and should have instead of leasing and renting your car for $700 a month. Okay. So, yeah, you're giving away $100,000 a year in that $30,000 a month budget. You said $8,000 to $10,000. So there's where $100,000 of it goes right yeah yeah it could be more than that hundred to hundred twenty yeah mm-hmm okay and um you know and you've got a car payment

yes which we would not have and what do you guys do for a living? I own a business and my wife works with a company. She makes about $100,000 and the rest of my income. And I own a service based business. Okay. All right. The way you're discussing this, the language you're using is very general. It's not precise about the numbers, which tells me you're kind of just throwing this over there and you're just shocked that it disappeared. So if I woke up in your shoes, you've got a level of disgust. So this is not okay is what you're saying. We make this kind

of money, we shouldn't have no money, we should know a car payment when we make 600 grand, we should have just bought the car, then what I would do is simply do a detailed budget with your spouse and come into agreement of what we want to give what we want to save and what we want to spend and what we want to spend it on and every month before the month begins every dollar has an assignment exactly but it kind of feels like bill I went through a period of time in my life where I thought I could out earn my stupidity my lackity, my lack of organization, my lack of detail, and you can't. If you had a person working in your business that was managing a section of your business

as poorly as you are managing your finances, you would fire them for incompetence. And so you've got to kind of treat it that way from an emotional standpoint and do a detailed budget. And it's funny Dave, as people make more, especially people who are good at making money, like Bill's good at making money, you're good at making money, you think you can just solve the problem by, well I'll just make more money, as long as we don't overdraft, we're doing okay. But when you do that budget, you realize if this was a business, you go, we are wasting a lot of money in this business, we could be doing a lot better if we cut the spending, get out of this debt, we might need to sell

this investment property, it's not a blessing right now, might need to downshift some of our giving a little bit until we get back on track. So that's the kinds of things, the levers you'd be pulling if this was a business, you need to treat your household the same way. Every, you know, you need to detail it out and then stick to it and both of you, you and your wife have an agreement.

You're both looking at it. You're not bringing it in, slapping it down on the table and declaring, I have done a budget, you people will live on it. That won't work. Now you get your wife involved in the disgust. It's not okay that we make this much money and we have no money.

It's not okay that we make this much money and we don't invest. So generosity is awesome. Investing is amazing. Enjoying money, yes, you should. All three things. But very, very, very, very, very, very intentional and right now you're not intentional. You're kind of throwing a bale of dollars over the fence and then coming back to see what's left later and after the family devours it. And so it may be your down shift you're giving. Your giving is pretty heavy. I'm not against generosity in any form.

I tell folks to do it all the time. But if you're doing zero investing and you're giving 20%, you may need to adjust that, at least temporarily. But I think you got some lifestyle issues and I think you guys just kind of walk around and do whatever you want because you make enough money. And I think if you'll just actually pay attention and say, no, we're not doing that. No, that's crazy. That's a, we're spending what on that?

Yeah. That's crazy. That's a that's a we're spinning what on that? Yeah, yeah, and you start actually telling the money what to do You'll very naturally Tighten this up a little bit Dane is in Houston, Texas. Hi Dane. How are you? Hey, I'm doing good. Mr. Angie. How about yourself better than I deserve? What's up? All right. So you my wife. I'm the only one that works out of the family. We've got two kids. The only debt we have is our house. We owe about $141,000 on it.

And we were going to continue paying towards the house and paying it off sooner, but we were wondering, should we sell the house and move farther inland away from Galveston Bay so our insurance ain't so expensive? My flood insurance is about $3,000 a year. Homeowners with fire is about $2,000 and my windstorm is around $1,500. Should we sell the house that we have a 2.7% interest on and move farther in for a more expensive house with a higher interest rate or stay? Well, in a sense you have a high interest rate now because you have a

hurricane tax. That's true. In a sense. Because of the location of the property. Yes sir. You know, it's causing you pain, which is causing you to ask the question. I mean the only thing wrong with moving is that you're not going to get the same rate next time. Well, whoop-de-doop-dey, when rates come down, you can refinance. We marry the house, we date the rate. So rates are temporary. Yes, sir.

And if you're going to pay this thing off in the next few years, if it's at $140 and you go, we're going to aggressively get this thing down to zero in the next five years, the interest rate's not going to matter that much. Right. Yeah, we planned on paying the house off that we're in now within the next five to ten years. Yeah, and if you bought one the similar price range, you could do the same thing, but you didn't have all the insurance cost. Right.

So I wouldn't go just upgrading the house and get a way more expensive house and get a way bigger mortgage just to get out of this tax and insurance situation. It's not necessary. Yeah, buy a similar price range. If your payment goes up a little, so what? But I'd buy a similar price range and make the move. Here's the way, the best way to handle this sometimes is look out 10 years, 20 years,

and say, where do I wanna be? Okay, if you have this house paid for 20 years from now What is that insurance cost going to do it's gonna go up every year? Yes, sir, or it's even gonna be worse. It's gonna be like Florida. It's gonna be hard to get at all right And this and the house is gonna go on up in value There's no question about that, but you live in this constant constant you're in a storm zone is what it amounts to so 10 years from now if you move inland and you pay it off you're gonna have more normal taxes more normal insurance and

you're gonna see a appreciation just as well so where do you want to live 10 years from today with a paid-for house that'll answer your question this is the Ramsey show with a paid for house. gun. A less lethal option that protects you in more ways than one. A Berna is effective self-defense when you need it. It also helps protect your assets from lawsuits if you have no choice but to use force. Because a Berna pistol immobilizes attackers without fatal harm. I have several Berna pistols and I love them. In fact I had a Berna before they started advertising with us. They're easy to use with no recoil and no noise reduction needed.

They're legal in all 50 states with no permits required and because they're not firearms, they can be shipped right to your door and you can train with a Berna right in your backyard. Plus our listeners can get the Ramsey Berna bundle for 10% off which includes a Berna pistol, CO2 cartridges and ammo and other Berna products like safety alarms, defense sprays and body armor are also 10% off for Ramsey fans. See why Berna has more than 15,000 five-star reviews just go to Berna.com slash Dave to learn more that's B-Y-R-N-A dot com slash Dave. George Campbell Ramsey personality is my co-host Abby is in Des Moines Iowa. Hi Abby welcome to the Ramsey show.

Hi happy to be here. Good to have you. How can we help? Well, I'm need help with this credit card situation that's a part of a bigger problem. But my husband and I separated about three months ago. Two months ago, we stopped paying credit cards. And I just found out that before they go into collections that we might want to start paying them. Again, we just owe so much.

We just have been overwhelmed and have not had good advice. So that's why I called you. You're currently still separated Yes Well We were Working together and his construction business and let's just say like everything came crashing down his anger and my not feeling safe from like past drama all happened at once I moved out to my cousin's house and when I came back

home he had moved back to his home state and we're talking we're having weekly finance meetings and I believe God will restore our marriage but we've got a lot to work through a big part of it he shot his construction business down and moved away well we were at the end of a really long project from not heaven. He shut his construction business down and moved away. Yeah. And how are you working? Um, I am now. Yes.

What do you make? Well, I'm working three part-time jobs now, just got offered a full-time job. So right now I'm making like Maybe two thousand a month and I'll be making like five Five or six years in January good good for you Okay. Thank you and um Hmm and so you're gonna get your own place you're currently living with your cousin but you're gonna art is that right I'm kind of couch surfing yeah but I mean if you're making five grand a month you're not anymore right well the thing is is my credit just went from like seven fifty then the five hundred

so I don't even think I can get a place no I think you can like a rental you think so? Sure. Okay. You're making five grand a month. Yeah, and you need to. Well, in January I will. You need to.

You don't need to be homeless and divorcing and broke. We need to get a stabilized situation where you're safe and you have a home of some sort, a little one bedroombedroom studio apartment it doesn't have to be anything fancy but get some stability and then you've got five grand minus rent minus electricity minus

food to work with towards your debt and now we've got a now we've got a thing we can project into the future does that make sense mm-hmm couch surfing doesn't project into the future yeah that's what I'm saying so how much couch surfing doesn't project into the future. No. That's what I'm saying.

So how much credit card debt do you have? Let me look at my spreadsheets. And is your name on all the cards along with him? Yep, 42,000. 42,000. And what's the plan for you guys to pay this off since you're separated right now? Have you talked about that?

Is it equal split payments or what? Yeah, we're talking about it and the talks have been like 50-50, but the other major debt is owing subcontractors and so that's where we struggled. Like who do we pay first or how do we even like make a plan. So when he closed his construction company he was not profitable? Well if he didn't pay his subcontractors honey he wasn't making a profit. Okay. Unless he has a pile of cash somewhere. No. Okay. If he has no money and he still has bills outstanding that means he lost money on the deal right? Right. Yeah. Did he just blow the money and never paid his crew? How much do you know how much

does he owe subs? He owes subs $30,000. Mm-hmm. All right, so here's what you need to do. Do you have a car payment also? I do, but my car just, I owe five, it's worth five, the repair is seven, and where I'm considering moving I can get everywhere on a bike because it's warm enough all year, so I'm like I might sell it Wait a minute. Where would you move this warm if you have a five thousand dollar a month job starting next month? So that's where I would be moving to the job. Why would you consider you are doing it? You don't have to consider moving you're going

Thank you. No, I mean you take the $5,000 job where is it? North Carolina. Okay. Coastal. Why would you not do this? I am. I just, this weekend I visited I just got the offer talking more details this week I've just been. Yeah okay. Yeah. It's not really considering I mean you're couchsurfing working three part-time jobs you have another option to move to North Carolina and have a five thousand dollar a month job yeah you're going you're broke so you got to get your life back you got to get control you have control of no variables right now so this has got to

be you the anxiety the stress must be horrendous for you, honey Yeah Okay, so here's what we're gonna do we're not gonna worry about the subs and we're not worried about the credit cards right now You need to get moved and you need to get into an apartment a little one-bedroom studio of some kind something basic and You need to figure out your transportation when you you've got food, shelter, clothing, transportation, and utilities covered, then we can talk about how to settle these credit cards. But you don't need to start making payments on them. You're broke and homeless and divorcing. We've got to fix some of those things before we worry about stupid credit card, okay?

So just put those on the back shelf right now. They're not going anywhere. They'll definitely take money when you call them back six months from now or four months from now. Then you decide what's going, you and your husband start talking and decide what's going to happen with the marriage. If there is a divorce, you'll have to split these bills up some way or another. I don't know what. And the divorce decree, the divorce judge will approve your all's plan or tell you what the real plan is if

he doesn't like yours and then you can go in and start working your way through this debt and you can probably settle it for pennies on the dollar at that point you're going to be six months behind but you don't need to be paying these bills while he sits at his cousin's house doing nothing and while you're couch surfing no no I wouldn't pay any of these bills until it's in an agreement of us getting back together or in an agreement of the divorce how the divorce is gonna go down yeah we're kind of in a storm mode and there's a lot of unknowns until you have an agreement one way or the other,

on this, you don't pay it, because you're gonna be the only one paying it. He's not. Yeah, you're not gonna make much progress trying to do this on your own in the midst of this storm. Exactly. So just pause until you got the next step. Whew.

Yeah, that's exactly how it works. Well folks, we just launched a brand new tour. Dave Ramsey, that's me, and Dr. John Delaney are hitting the road, coming to a brand new tour. Dave Ramsey, that's me, and Dr. John Deloney are hitting the road coming to a city near you. It's the Money and Relationships Tour. We're putting a new twist on these events. Before the event starts, you're going to tell us the subjects you want us to talk about and we're going to talk about those subjects that night. We're going to custom build each one of these. Louisville, Kentucky, April 21. Durham April 23, Atlanta 25, Phoenix May 5, Fort Worth May 7, and Kansas

City May 9. You're going to laugh, you're going to learn, you're going to cry, you're going to change your life. Come to one of these events, they're going to be a lot of fun. It is the Money and Relationships Tour. Dr. John Delaney and me, Dave Ramsey, ramsysolutions.com slash tour. Check it out or if you're on YouTube or a podcast, click the link in the show notes and make sure you get out there.

These are gonna be really, really fun. They're selling like crazy by the way. Tickets are not super expensive. If you want something for a stocking stuffer for Christmas, just order this and print off the ticket and stick it in the stocking and that'll be a nice thing. Hey honey, look what we're doing. And it's a gift that keeps on giving because then you go, oh my gosh, I forgot we bought

tickets to the event. Six months later, let's go. Yeah. Yeah. And they're selling really, really fast. So if you want to go, you probably need to go and get your tickets or you'll get that other thing called FOMO. This is the Ramsey Show. the Ramsey Show. Okay here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with. People are unknowingly putting money into tech giants and household brands that don't match up with their core values.

But here's good news. Timothy Plan is at the forefront of biblically responsible investing. That means Timothy Plan uses a strategy that lets investors chase competitive returns while staying rock solid in their beliefs. So if you're ready to invest with a clean conscience, it's time to check out Timothy Plan. Request information at timothyplan.com to learn more or contact your financial advisor today to see if Timothy Plan is right for you. TimothyPlan.com. before investing mutual funds distributed by timothy partners ltd and etfs distributed by fourside fund services llc George camel ramsey personality is my co-host today today's ramsey show question of the day is sponsored by why

refi When you're trapped in a maze of defaulted private When you're trapped in a maze of defaulted private student loan debt, it's hard to find your way out. But Yreify can offer you a lifeline with custom refinancing based on your ability to pay and a lump sum payoff option that you could qualify for at a discount after 24 months. Go to yreify.com slash Ramsey. That's the letter y-r-e-f-y dot com slash Ramsey.

Might not be in all states. Today's question comes from Carl in Wisconsin. That's the letter Y, R-E-F-Y dot com slash Ramsey. Might not be in all states. Today's question comes from Carl in Wisconsin. My wife and I are looking for guidance on how to best allocate our investment funds. I'm 50 and self-employed. She's 35, currently a stay-at-home mom, and has an IRA that was rolled over from her previous employer. We're wondering if it makes sense to max out both of our IRAs or if we should just focus

on my IRA and invest the rest in a non-retirement account. Could you give us some advice on the best strategy to balance our retirement planning in other investment goals? A lot more details I'd love to know here, but I guess we can assume they're in baby step four. They don't have debt and they have an emergency fund.

Fair assumption here? Fair assumption. Okay, so they both have access to the IRA. I would love for them to be investing on the Roth side and 15% of your gross household income is what you wanna be investing. So if it's a hundred grand household, we would be investing $15,000 total.

So she's got an IRA, you've got an IRA, he's saying, well, should we just focus on mine and do the rest in a non-retirement? I would rather you take advantage of those retirement accounts, which means maxing out both IRAs, if you can, before moving to a non-retirement taxable account. And then focus on getting your house paid off.

So that by the time you hit retirement and she hasn't, you know, you're 50, so you got nine and a half years, 59 and a half, right, to start withdrawals without any penalties. By the time you get there nine and a half years from now you have a paid-for house and somewhere along the line you might look up and do some non retirement but right now you need to be putting 15% in Roths. That's simple and good growth stock mutual funds. I agree George. So people say Dave you know well Dave is it 15% of my income and 15% of her income? How do you go about splitting what goes where?

Absolutely. Is it just, you know, we both do 15%? Yeah. And that becomes 15% of our household? Well, it's 15% of the whole household. Yeah. So you add everybody's income up, times 15%, and somewhere that number has to go. So in your case, it's like, in this case, she case she's stay at home mom, so it's one household, one

income. And she can do a spousal Roth IRA. Yeah. So go ahead and fund that. You can fully fund two individual Roths, but if you're working and you've got a Roth 401K2, whatever you've got to do to get to 15%. If you can't get to 15% and you've maxed out everything, then you would do some non-retirement, because it's your only other option but do we not take advantage of a Roth and do some

non-retirement option because this age differentiation no no absolutely not wouldn't do that Jamal is with us in Washington DC hey Jamal what's up hey hey Dave how you doing better than I deserve man how can I help? I'm new to the country I'm 25 married when my wife she's 22 very young I came two years and a half ago from Italy and between things that happened throughout like our engagement business and that and like my lawyer payment for the green card we wrecked up around $10,000 in debt she has her student loan that will not kick in until like 2026, which is like around 30,000.

Um, I'm a very hard working and I hate debt. I just picked up your book. I'm already on page 40. So I just wanted to know how to get out of the situation to start like bumping more cash flow into our pockets and, uh, make sure that everything goes well from now on. Is she also from Italy? No, she's an American citizen. She's born here in D.C.

Okay. I think I would just begin a marriage conversation about what our dream is. What's our dream? We have that. We have that and she came from money and her ideas like people have debt she never got like very educated on money so it was all given to her so like people have that it's normal that will be fine and I just hate that idea I don't want to owe anybody anything I didn't stop stop stop stop stop that's not a dream people always have debt and I'll always have debt. That's not a dream That's a hopeless person that's not a dreaming person

Exactly. I hate that and I try all that's not the idea Why is it you hate that you hate that because you don't want to steal your life because you want to be able to build Wealth so you can be outrageously generous and have a wonderful life Yes, that's the dream Not we're always gonna have a car payment. That's not a dream. That's a surrender. My dream honestly is to give my kids what I didn't have. Yeah, but you led the conversation with your young wife, your young self by saying I hate debt. That was your dream. That's not a dream either. I hate debt because it steals my dream. Now what is your dream? I want to be a multi-millionaire and I want to be outrageously generous. And I want to be able to change our family tree. I came

to this country, the country of opportunity for that reason. I want to go big. That's my dream. Not I hate debt. You see the difference? Yeah. She says, debt's always going to be here. You say, I hate debt. And this is what you discussed when you're trying to have a dream. That's not a dream. Neither one of those are a dream. And you're not going to get very far with just saying, I hate debt. And so, like Dave said. The point is, it's not persuasive. You need to cast a vision, and that's what Dave's saying you need to do for your own marriage.

Sit down with her, maybe a dream date, and go, here's where we wanna be. We wanna be debt-free, millionaires, I'm an immigrant, I want a different future for our kids. Is that what you want? Well, you know, we're 20. When I'm 35, I wanna be worth $2 million, have no debt, and be able to give money away

and change our family tree and send our kids to school with zero debt. Because you're sitting here with looking at $30,000 worth of debt because your family didn't have a big dream. They had a crummy vision. I don't want to live like that. I want to live big. And get our own board with that.

Then you say, okay, how do we get to be 35 and a multi-millionaire? Oh, we get out of debt. Oh, we increase our income. Oh, we watch our spending. Oh We're generous in our current world all of that. That's how it works. Jordan is in Salem, Oregon. Hi Jordan. How are you? Hi, I'm well, thank you Thank you for taking my call sure how can we help I Thank you for taking my call sure how can we help I?

Was wondering if Compound interest bill works the same across multiple accounts as it does in one account Exactly the same if they're invested the same then yes Okay, if you're earning here you can do the math if you're earning ten percent and you have $100,000 10% would be $10,000 does that sound right? Yeah, if you had a single account that was only ten thousand dollars, and you had ten of those Ten percent on ten thousand dollars would be one thousand dollars does that sound right? Yes. If there were 10 of those that'd be $10,000 right? Yes. It's exactly the same as if it was one lump.

Okay. You see how I did that? I do. I like to hear that. Some people call him a genius. I call him my boss. I saw that video where if you have a hundred thousand dollars it starts to grow exponentially. So then I was like, oh we're really close to that, but it's all spread out. So does that still apply to us? Absolutely. Now George, George's point earlier makes a lot of difference. That's assuming they're all invested at exactly the same rate.

So if it's spread out on a bunch of different mutual funds and some of them are underperforming, then that's a problem. But that's not a compound interest equation problem, that's an investing problem. An allocation issue. Yeah, so if I've got 10 different mutual funds and they all earn, they all grow at a 10% rate,

that's the same as having one mutual fund that grows at a 10% rate, to George's point earlier. But if you add it all up in one nest egg and everything's invested equally, it's gonna grow at the same rate. Exactly, exact same rate. So yes, if you got 100,000 total across a bunch of accounts, you got 100,000 growing for you, that's awesome.

Yeah, very good for you. Good question. You're gonna be great. And by the way, rule of 72 tells us if you divide an interest rate into the number 72, it tells you how many years it takes for it to double for a lump sum. So $100,000 at 10%, 10 into 72 would be 7.2 years to double. So if you got 100,000 bucks and you're invested at 10%, in 7 years you'll have 200,000. In 14 years you'll have 200,000 and 14 years you'll have 400,000 in 21 years

you'll have 800,000 in 28 years I'm doing this quickly you'll have what 1.6. 1.6 yeah I told you he's a genius. 30 years from now so that that that's how you can start to run the numbers out in your head pretty quick ago yes this is all worth doing, boys and girls. And very little of that money was the money you put in. Compound growth did the heavy lifting. And 90% of what's in your account at retirement, if you start now, boys and girls, will be growth, not money you put in.

This is The Ramsey Show. Remember the good old days of the internet before it was a privacy nightmare filled with spammers, scammers, hackers, and fraudsters? Simpler times. Now I don't have a time machine but I do have the next best thing, DeleteMe. Think of DeleteMe as your online bodyguard helping to protect you from the risks of online scams and data breaches. Here's how they do it. They scour the web to find and remove your data from these sketchy data broker websites and this includes your name, your phone number, your email, your address and more. And Delete Me will send you a detailed report of what they did and how much time they've

saved you. And they've saved me 66 hours so far, which is more time I can spend trying to nail the wordle of the day on the first try. Delete Me has been around for over a decade and they now have over a hundred million data removals, which explains why they have a mountain of rave reviews and an A plus rating from the Better Business Bureau. It's been great for my family and I love getting fewer targeted ads, fewer spam texts, and fewer creepy robo calls.

So this holiday season, share a piece of mine by gifting a Delete Me subscription to someone you love or even just like. Their individual plans start at just $9 a month and you can sign up today at JoinDeleteMe.com slash Ramsey for 20% off. That's Joindeleteme.com slash Ramsey for 20% off. That's joindeleteme.com slash Ramsey. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbellel Ramsey

personality number one best-selling author of Breaking Free from Broke, host of the George Camel show on YouTube, the Ramsey Networks and of course Ramsey personality. He's my co-host today. Christopher is in Richmond, Virginia. Hi Christopher how are you? Hello Mr. Ramsey,. Thanks for taking my call sure. What's up? I I've heard you yell at quite a few people about whole life policies I Have a universal life policy and when I started hearing how terrible the whole life's where I looked into it And I don't think it has all the same Bad things to it their whole life does like the cash value

doesn't go away when I die it was yes it does with the policy yes it does I called I called the company and asked them they said no it does not yes it does well they sometimes will claim they can set it up in such a way in a very universal B or a what I don't know if it's a or b okay a B you're sure universal be works like this you pay let's say about a hundred thousand dollar policy and you build up a twenty thousand dollar cash value okay universal be charges you

for one hundred and twenty thousand dollars the face value plus the cash value worth of insurance so you're purchasing extra insurance that makes it look like you get the cash value upon death but you don't you're just buying more insurance and be it's all that you're doing the equivalent of the cash value amount the cash value amount in 100% of universal policies disappears at death 100% of the time. Okay. Always. The other thing was that whole is 20 times as expensive. What? The other thing you said was that whole is 20 times as expensive and I

just did some comp shopping and my universal policy is about the same as that the non it would cost me to get term get term right now I've had it for a while but well there's one of two possibilities that run there one is you did your comp shopping with the same stupid company that sold you the universal and they generally have very expensive term if you go to Zander insurance and comp shop you'll probably find it to be a lot less because they're shopping among a bunch of different companies that specialize in term and it's much, much cheaper. The other possibility is universal life works like this. The portion of your premium that

you're paying monthly that buys your life insurance goes up every year. Your premium stays the same. But let's say that, let's just make up a number. Let's say your premium is $100 and the first year you bought it you were 26 and of the $100, $10 went to insurance cost and $90 went to the investment. Later on as you get older, the amount going towards insurance goes up, okay? Because every year you're older, you're more likely to die. And so what can happen with a universal policy that's worse than whole life even is the lines can cross and actually the insurance cost becomes more than

the premium and they'll start using part of your cash value to cover the insurance cost because you're upside down in the policy. And then that thing will actually disappear, it will actually deteriorate and kill itself. It turns in on itself mathematically. So what's happening is that you were doing more investing in the old days and now almost all of your premium is simply buying insurance. Now in the term insurance world, Christopher, there's a thing, there's term life insurance, which means the length of the term. So you can buy a one-year term, a five-year term, a ten-year term, a fifteen, a twenty, a thirty-year term, and if it's level term, the premium stays level throughout that period of time, which is an average of

all the years before. Pure insurance, technically speaking, would be annually renewable. Once a year, the insurance premium goes up because you get older and every year you're older you're more likely to die percentage wise. Does that make sense? So an ART is what that's called, an annual renewable term and the cost of insurance goes up every single year, it's not level, when you buy an ART and that's what's built into the universal policy, is an ART and so the universal go the cost of insurance more of your premium is going to insurance

every single year thereby less is going to the investment and that may if you've had it for many years now you're just buying insurance you're not putting anything into investment or worse you're not even covering the cost of the insurance and they're using up some of your investment to cover the difference because you've the you've crossed the lines on it and if that's the case then that would also explain why you find term insurance to be about the same cost because really all you've got now honey is term insurance because the ART has rate raised in price every year and caught up with the actual premium that you've been paying. is term insurance. Because the ART has raised in price every year

and caught up with the actual premium that you've been paying. Whew. I'm dizzy. It's exhausting. And here's the thing, most, I've never heard of someone who isn't selling insurance, say that whole life, or Universal is good. It's only coming from the salespeople.

And so the people that get swindled by this, it's usually from a friend who explained to them, the wealthy do this, they invest through their insurance policy and you can borrow against your own money tax free and they explain all these crazy loophole quote unquote advantages. So in the financial planning realm, fee based financial planners, investment advisors like our SmartFest or pros, anywhere you go to for financial planning help, the only people that tell you to buy cash value insurance are people that sell it. No one else tells you to do it. No one in the entire, the rest of the financial world looks at it and goes buy

inexpensive term insurance, 10, 15, 20 year level term and do your investing anywhere else. Don't put it in this crap because of what ends up happening. See let's go back and revisit the barrel of fish hooks I just unpacked a minute because it's frustrating as crud. When you were 26 and you bought that hundred dollar premium I was talking about a minute ago, I made that number up, okay? You bought that because you wanted some insurance and because you wanted some investments. And the irony is that the rising cost of insurance through the years eats up all of your premium so that the very reason you bought it instead of buying term was to have an investment and it doesn't occur.

The longer you hang on to it, the higher chance it will implode on itself. Yeah, it eats itself out. Oh yeah. And so the very reason that you did it is systematically annually disappearing. That's the irony of how bad this is. It just sucks. And with Universal, there's flexible premiums. But here's the thing, if it's not enough to cover the insurance, they take it from your cash value.

Yeah. So you're not winning. They always win. And again, the insurance is going to go up every single year because it's the equivalent of an ART built in. Now the truth is, on a 15-year fixed level payment, right, you're paying more in the early days than you would for an ART. Because all the 15-year is is the average of the ART, but less because ARTs have low

persistence. Very few people keep them. And they drop them because they go up every year and they get, oh, God, I've got to get out of this thing. But they keep the 15 so it's cheaper for the insurance company to run the 15 so they give you a break. So it's less than the average of 15 ARTs. And it's simpler to manage. There's no investments in cash value to deal with. But you're still paying it. You're still paying for the coverage. This is the Ramsey Show. Knockbox is a complete home organization system and estate planning tool that helps you organize all of your accounts, personal history, wills, estate planning documents, and all other info

in one place. Inside each kit are 15 categories covering everything from life insurance policies and funeral plans to your dog's vet and the code for your storage unit across town. And the best thing about your knockbox is the checklist that tell you everything to add to each folder so your loved ones won't have to guess where things are. So if you have a household you need a knockbox and you can get organized in time for the holidays by visiting knockbox.com slash Ramsey. That's nokbox.com slash Ramsey. Hey guys, it's Rachel Cruz and guess what? It's my favorite time of year. The lights, the music, the decorations,

I mean, I love it all and as a natural spender like myself, it's really easy to overspend and I want to do all the things and give my family the kind of holidays they'll always remember. And at the same time, I don't want to look back at my bank account in January and think, oh, what did I do? So that's why I use the Every Dollar Budgeting app. It helps me plan for all of my spending. And that's what a budget is.

Then once I have my plan in place, I don't have to worry about overspending. I am free to spend guilt free and have fun doing it. Plus with EveryDollar, you can customize your budget however you want. So whether it's buying gifts, hosting dinners, or even turning your living room into a winter wonderland, EveryDollar helps you plan for it all. So you guys go out and create some great holiday memories

with your family without the stress of overspending. Download the Every Dollar app for free today. Go download it today. Well Christmas is right around the corner and if you're shopping for yourself or you're looking for the perfect gift to help someone get their money in order now is the time to shop and get up to 30% off on our best-selling products. The total money makeover is 30% off. Building a non-anxious life is 30% off and Georgia's number one bestseller, Breaking Free from Broke, is even on sale. So check it out including the classic

questions for humans card decks from Dr. John Delaney for couples, friends and parents 12 bucks, all at ramsesolutions.com slash store or click the link in the description on YouTube or podcast. Nicole is with us in Denver. Hi, Nicole. Welcome to the Ramsey Show. Hi, good afternoon. I wanted to ask you about prenups. I'm very recently engaged and I'm walking into this marriage with about a $400,000 Schwab investment account. Hmm. Okay. How old are you?

30. How long y'all been dating? Three years. Okay. My fiance and I are in very different financial situations. He doesn't have much of a savings account. And the reason I have this investment account, my father passed away, left me quite a bit of money,

and my mother has helped grow this account to a significant amount. So, I don't know if that's something. By adding to it and investing and things like that. Well, my money that she has invested, very smart lady, but you don't know what I should do with that account or if I should bring it to the marriage or not. When I first started doing this show 35 years ago, I told someone that if you need a prenup, you don't need to get married. If you can't trust them with $400,000,

you don't need to trust them with your life. Right, and I don't want to come into this marriage feeling as though I'm harboring a resentment or being perceived as non-committal or anything like that. The reason I ask you, two reasons, I feel like this account is not mine. I think it would be set up for me in case of an emergency. I have a significant health condition that may run in the- Why is it not yours?

You told me it was yours. It is, but because my mother has grown it so significantly. Are you going to stay married to your mother or are you gonna marry him? No, I'm marrying him. Okay, then maybe it's time to be married to him and not your mother. And you and him manage your health condition and your future and your money

for the good of you and him and the next 40 years of your life, 50 years of your life. We're managing that together. It's very sweet that mom has been helpful, but her days of controlling your life at 30 years old, you're a grown woman, are over. Sure. So now that changes it. So I would want to share every bit of my life. If you're going to get married, you got to go all in. Okay. Okay. And that's what you asked. That's my opinion and that's my opinion.

I would tell you to do that. The only time I tell someone to get a prenup is if there is an extreme amount of wealth on one side and 400k is not extreme. But if you had if you had 15 million dollars and he had not a nickel then I tell you to get a prenup then because not not because of him, but because of his crazy relatives. The crazy relatives come out of the woodwork when you marry a rich woman, you know? And it's like, and so you control them with a prenup, you go, well, I can't do anything about it.

I mean, it's not, I don't have any access to it, the prenup, and it just shuts down the crazy relatives and sends them back to the cave they came out of and so That's the only reason I do that is it gives you some Relationship management stuff and I'm trying to keep someone from getting just conned completely But I don't think you're being conned you've got three years in this in this relationship. You're 30 years old You're not a baby child and you're not been you know, we go, you're 30 years old, you're not a baby child, and you're not been, you know, I met him in Las Vegas two weeks ago,

and well, that's a whole different story, right? That's not you, you're very precise, you're very wise, you're very even, you're very careful. Does he know about this account? He does, he doesn't know the exact amount that's in it. And I was also thinking maybe we would reserve this account for our children in the event that we did get a divorce. Well, let's talk about it. Sure. Let's talk about it. Let's say, hey, if something ever happened, I'm going to claim that I

brought this money into the marriage if you divorce me and I'm gonna try to keep it. I'm gonna make sure you don't get it. But you don't need a prenup to do that in most states. In most states it was assets you own when you came in. But I think there's something to be said here for, it makes you think about, okay, are there parts of the way he handles money that you don't respect? Well, see, that's a red flag.

That's something to be handled in a pre-marriage. I see your point. Not at all, just we have different finances. So I don't know how to combine or not combine things. I want to be smart. Well, when you say different, you don't mean he's irresponsible and you're responsible. No. He has quite a bit of student loans left. He just entered the workforce after being in the military and getting his doctorate degree. So he hasn't been working. Cool, a doctorate in what? He's a chiropractor. Okay, so he's getting ready to start making some money and

he's got $200,000 in stinking student loans. Yes. Yeah. Well, I would not want to use the 400 to pay those in the next 30 seconds, but four or five years from now I might use some of it to knock the rest of that out if you haven't knocked it out. But I think you guys need to roll up your sleeves and knock it out and then leave the 400 alone. That'd be a plan. That's a good plan.

But hopefully you can do that. But if he's saying, oh, I'm going to be in debt for the next 30 years just because that's the way it is if you're a chiropractor, that's a different discussion. That's not a pre-nup discussion. That's a I don't get married discussion. Yeah, if your financial responsibility gets him to be lazy or entitled, that's a whole different discussion. He doesn't sound like lazy or entitled though.

He goes for it. He went and got his dad gum doctorate. He's been working his tail off. So I hope I'd go into this with arms wide open right now unless you have reason not to be yep Yep, I was wide open and arms wide open. Yeah, just like Creed said all in all in all in All in leave it all on the field. All right Danielle's in Columbus, Ohio. Hi Danielle. How are you? Hello Dave, so I

Am just stepping into the Ramsey way. I'm about to start my budgeting. And I now have a stable income of $42,000 which includes my housing and my food for at least half the year. I have side hustles which I haven't calculated. It's going to be at least $15,000. is gonna be at least 15,000. I have 16,000 in credit card debt, seven in my car, and 35,000 in school loans. My question is, now that I have this new job,

previous this I was on Medicaid insurance, and they're offering me health insurance, but I really don't wanna do it. It just seems too expensive I'm 31 years old I'm healthy I just you don't qualify for Medicaid honey if you're working Medicaid is welfare yeah I know so that's what I was before but now you can't you can't get it now exactly so you have to have health insurance I have to yeah you'll go bankrupt okay you have to have health insurance. I have to. Yeah. You'll go bankrupt.

You have your appendix out and you know, you're going to get a $62,000 bill. It'll bankrupt you. So I mean, it's just like car insurance. Just because you haven't had a wreck doesn't mean someone else is going to hit you. You can be a great driver. So you need health insurance now and always. And do you know how much it's going to be? Is it $600 a month?

Yeah, something like that. We have, they're offering us United Healthcare. I mean, you can shop around with our friends at Health Trust Financial and see what the marketplace insurance would be versus the employers and see what's the better deal for ya. But it's a non-negotiable one. It just has to go in your budget. And if other things have to be sacrificed because of that, then that's what you'll have to do for now.

If they have four or five different plans under United and they probably do, just take the cheap one and the higher deductible and all that kind of stuff. That's all fine, but because I'm not worried about a $5,000 or a $4,000 deductible I'm worried about a $62,000 problem. The number one cause of bankruptcy in America is medical bills. So you have to guard against it. So look for that HDHP. That's a high deductible health plan that will come with an

HSA which is a great way to save for those health expenses. And that'll be your best bet, keep the premium low, but it'll transfer a little bit more risk to you with the deductible. Yep. This is The Ramsey Show. Hey guys, Dave Ramsey here. I'm coming to a city near you with Dr. John Deloney on the Money and Relationships Tour. This is a brand new event where you the audience will get to vote live from your seats and choose the things you want me and John to talk about. You'll be picking from over 20 topics that impact your life like saving for the future, leaving a legacy, money stress and marriage and so much more. We're getting real and

digging in deep on the things that are important to you, and you never know what might happen when me and John get candid. It's an event unlike anything we've ever done before, and it's going to be a whole lot of fun. We'll be kicking it off in Louisville on April 21, 2025, and then stopping in Durham, Atlanta, Kansas City, Fort Worth, and Phoenix in April and May. Prices are the lowest they'll ever be right now. So don't wait, grab your tickets at ramsysolutions.com slash tour. That's ramsysolutions.com slash tour. Coming up December the 18th, one your favorite shows our annual giving show. We take calls from folks who are proud of some giving that they did and want to

tell us the story or they are proud of some receiving that they did. Tell us then they're going to tell stories that make our eyes leak. December the 18th, our annual giving show. Don't miss it. Also, coming up at the end of this segment, we will jump the show over to the Ramsey Network app for the remaining portion of today's show. And the Ramsey Network app is a free download. You can do that there anytime you want. And you'll get the entire show there plus audio video of everything and you can search the show you can send us emails in there you can search the show by subject so you don't listen to 26 hours to find out what we say about whole life life insurance or whatever it is that we're harping on that day so check it out and if you're

on radio of course stay tuned wherever we on radio, we're still there on radio. And Thomas is in New York City. Hi, Thomas, how are you? Hello, gentlemen. Great. Thank you so much for taking the call. I just have a quick question. I don't know if I have to get into a lot of detail. I'll answer questions. My mother's financial advisor has been trying to persuade her to buy something called structured notes, uh, invest. And I've looked into it, but I wanted to get your opinion on how that, if that's a good investment product versus, you know, buying a five or 10 year structured note or just taking that same amount of money and putting it into a, you know, a mutual fund that tracks

the S and P 500 or something along those lines. Is that something you're familiar with and you have an opinion on it though? Thank you. Yeah, don't do it Don't do it. Okay, and I'm real. How old is your mother? My mother is 81 Okay, all right, here's the thing structured note is a bond propped up with a derivative

Okay, and the Here's the way bonds work. If you buy a bond and the interest rate on the face of the bond, you buy a $10,000 bond and it pays 3%, okay? When interest rates go up above 3% to 6%, the $10,000 bond becomes worth less. Does that make sense? Yes, it does. And when the interest rates go down the $10,000 bond becomes worth more than $10,000. So in a rising or high interest rate environment, you have a good chance of losing money on bonds. They are not safer. The financial world has, I'll be kind, has mistakenly said that bonds are safer than equities and in general they're not, particularly in an interest rate environment that's as volatile as the one we're in right now.

We don't know what interest rates are going to do in the next 12 months with a change in administration, with a change in move in the economy. I hope they come down which would make her bonds in this case worth more. But the derivative portion of this is a high-risk play and why in the world he's putting her in a volatile instrument at 81 years old with a high-risk play. It just sounds weird to me. I think that's irresponsible. Well my best guess it's high costs and fees that go to the financial advisor. Yeah. That's why I would choose that product if I was this guy.

I'd go, well, I'm going to make more money off this one than putting her in a simple mutual fund. Right. That's my understanding that there is a high fee involved with that particular product. Okay. Probably. I mean, we're not positive. We don't know which product he's got in front of her, but How long has he been taking care of her in quotes?

God a long time third a twenty some odd years. Yeah, and what is she invested in now? Do we know? Well, she has a 401k that she and I don't know What that is exactly and she's just mutual funds and I don't know exactly what the mutual funds are she's got mutual funds that you purchase through UBS and she's got mutual funds that she has in her 401k she's got a combined net worth in about $400,000. Yeah I think I would just stay right where she is. Just stay where she is just stay with the mutual funds yeah. I might not stay with the financial advisor but I'd stay right where she is. Yeah yeah I know I

know I yeah I know I was thinking about that myself. Okay, thank you. Thank you, Thomas. We appreciate you calling. Open phones at 888-825-5225. Jill's in Dallas. Hi, Jill. How are you? Hi, I'm good. How are you guys? Better than I deserve. What's up? Okay, I just have a question because I'm new to managing money. I was married for 15 years and, um, recently finalized a divorce. Um, I'd love your opinion.

I don't know how much house I can afford or what would be wise to spend on a home. Are you out of debt? Yes, sir. Good. Okay. How old are you? I'm 40. How long were you married? 15 years. I'm sorry. It's a hard time of year with a broken heart. Well it's all good. I just, it was a long time coming. You're surviving but it's not all good. But yeah, okay. I'm sorry you've

been through this. Thank you. All right. I mean, we teach folks to get their home paid off as fast as possible. And in that vein, we have a standardized guideline that we use, which is super conservative for house payment. Okay? Well, I have cash is what I'm wondering. Oh, how much cash do you have? So I have 1.2 million in mutual funds. You buried the lead seven years will be $18,500. Was there a family property that sold? When we got divorced, I got money instead of property. Okay, good. Yeah, you did.

And you'll be making over 200 grand a year. Yes. And you'll pay cash to this house. Assuming he pays the bill this is alimony and child support. Alimony is yes is the 18.5 but I do have the 1.2 and the 7.50. Yeah and is he in good shape financially can we count on this 18.5? Yes. Are you going to develop a career or what's your plan well seventeen of that is alimony I make a tiny bit just a part-time job I have two kids how old are your kids they are fourteen and eleven okay so what are you going to do with the next 10 years of your life? I really don't know. I'm a teacher by trade in Oklahoma. It doesn't make any money.

So... Well, it doesn't mean you don't get the alimony if you went into this classroom, right? Right, no. Just as a part of your healing, I want you to have the dignity of making some money somewhere down the line. You don't need it, but it's going to be good for you to feel that you are sustaining yourself in addition to all this money, okay?

Okay. Now, how much of the 1.2 are you thinking about spending on a house? Well, I don't know. I don't know what's wise. No, I the 1.2 are you thinking about spending on a house? Well, I don't know. I don't know what's wise. No, I ask you. You've been thinking about it. This isn't your first rodeo. I mean, some days I think like 300,000 would be very modest and it'd be enough space for

us. But then I get kind of starry-eyed and there's pretty homes for 800,000. So I don't really know. My thing is I don't want to put myself in a predicament down the road that I think oh my gosh I bought too much house I shouldn't have done that. Well too much house would be a payment you can't afford and that's not a problem. Okay. The house is going to go up in value and if you ever want to sell it usually you can sell a house if it's a decent house, right? You're not stuck in it.

So if you pay cash for a $700,000 house and you wake up a few years later with regret, you can sell it. And then you still have $500,000 left over plus $700,000 in a 401k plus 18,000 hours a month right? It feels to me that's very safe to be in the 700 range. Okay. That's very safe. Okay. Thank you. I value your opinion a lot. Well I mean you need to work that math out and feel very safe about it. Not just because Dave said so.

And work with a good agent. Jump on ramsaysolutions.com slash agent and start shopping around and see what you can get for that amount and if you're happy with it. Yeah get a real estate one of our Ramsey trusted real estate agents there that'll help you they'll do a good job helping you work through the decision making on this as well. This is the Ramsey Show. Folks the Ramsey Christmas cash giveaway is here and you could win big. We're giving away $500 prizes each week and one grand prize of $5,000. Enter daily for your chance to win at ramsesolutions.com slash giveaway.

It's that easy. Plus our 50 days of Christmas deals is on right now. Get up to 30% off bestsellers and life changing gifts that won't break the holiday budget. Ramsesolutions.com slash store. If you like this show help us out by sharing it, following us, subscribing, whatever the format is your listening allows you to do. Oh and also you could leave a nice five-star review I mean come on be generous we need your help it helps spread the word by the way when you do all of those things and you

guys are spreading the word and we really really appreciate you telling people is a tip telling people about us especially when you tell people nice things about us thank you Elliot is in Denver. Hi, Elliot. Welcome to the Ramsey show. Hello. Um, so I'm in a bit of a predicament with my kind of housing after the end of the year. Um, I've been going to school or going to college on and off, um, for the last like 18 months or so, uh, for meteorology. Um, but in between that I, uh, worked as a, uh, for meteorology. Um, but in between there, I, uh, worked as a, uh, aircraft ramp agent. So like a, a baggage handler, um, at the airport here in Denver for six months at a airline that had high turnover.

So I actually worked my way up all the way to where I was a supervisor, but I liked you to work, but I liked the work environment or not the things that I would do with the job working with the, with the planes and stuff, but I didn't like the, uh, kind of business corporate environment of it. And so I decided to go back to school and that didn't quite work out, um, as well as it, uh, as I thought it would. And so, um, now I am no longer getting any financial support for school from my parents, which was previously the, they were paying for my school.

And now I'm being kind of told that I am expected to move out of their house at the, at around the end of the year. And I don't really know what to do right now. I have like... Wait a minute, things didn't work out at school. What does that mean? I wasn't able to pass a math class that I was taking. Why?

Because I wasn't good at kind of managing time with the mainly like the homework assignments and I honestly probably... Do you have a learning disability? No, I have like ADHD but I don't... I'm not sure if that's a learning disability or not but... That wouldn't keep you from passing a math class. Yeah. Why did you not do your lessons? It's kinda getting distracted by things that I should realize when you're looking back now I shouldn't have and

you're so vague. Stuff like. I have no idea what the crap you're talking about. Are you telling me you've been drinking and smoking dope and partying and you're flunked out of school so your parents are throwing you out? I've never been that kid. It's just, you know, finding it hard motivationally sometimes to just like do work that... But I just... I have decided that like I'm not going back to school and... Okay, and you're moving out. So how can we help you? back to school and you're moving out so how can we help you so was there was there an agreement with your parents where they said here's the deal we're gonna pay for school and you're gonna go to class and pass and that will allow

you to live here and we will pay for school if not here's what happens if not and now we're at the if not sounds like you agreed to this now you're moving. How can we help you? So I just am not sure like in terms of like with work like getting a job here is I'm able to do that but it's none of the jobs that I see that I can get would really pay for the cost of living in Denver is so high that sounds like you can't afford to live in Denver what were you making on the ramp job I was making 2250 an hour you can get a roommate in an apartment in Denver out on the out on the edges of Denver towards the airport which is not anywhere near Denver but

yeah yeah move out of town get an apartment with a roommate and make it three or four grand a month right and then crank your and then crank your hours up and work your butt off you can make it okay but you need to you need can you get back on over there um I think I could try or another similar operation like that yeah jump in jump in man. For sure. Because that's a known quantity. I'm not saying you need to be doing that when you're 35, but for right now that'll get some money coming in and let you get stabilized and get yourself established as an adult working

on their own, paying their own bills, which is what your parents are demanding. And then you can reset and say, okay, while I'm doing this, what do I want to study and how can I study it? And start taking some night classes to go be something else. But I would get my feet on the ground over there at the ramp, start throwing some bags, making some money, and I'd be working like 60, 80 hours a week

because I'd be scared I'd be hungry. And you're gonna have to deal with this underlying problem of time management and responsibility. Being hungry is a motivator. You don't have to worry about being motivated. Being hungry is a motivator. You don't have to worry about being motivated. Being homeless is a motivator. You want to pay rent, you want to pay, having the lights cut off and it gets cold in that apartment because you didn't go to work, that's a motivator.

You will suddenly be motivated. You don't need to look for motivation at that point. It'll be finding you. It's called survival, dude. It's called sustainability and You know you don't have the option of not being motivated when you need to eat and keep the lights on and not be homeless And so that's that's what you're set up for and that's gonna be good for you You're gonna let you're gonna learn some good things about Elliot that Elliot can work and Elliot can stay on the job and Elliott can

Keep focused and Elliott can push through what because Elliot freaking has to now and I think it's gonna be wonderful for you. It's gonna be the best thing ever happened to you. Maybe I kind of like your parents I Think I think they're pushing you out of the nest and saying fly little eagle Otherwise like Dave says you become a turkey Yeah, if you stay in the nest too long Eagles become turkeyskeys but the science I can't explain it is science it's definitely it's evolution you know. Is it de-evolution? It's de-evolution de-escalation yeah fly a little turkey fly I mean fly little eagle fly you're gonna be fine but you're gonna have to get your button gear like yesterday. And if you can't get more

than 40 hours at the airport, next door there's a place called UPS and they'll let you throw boxes. It's Christmas time. They desperately need your help over there. The Amazon warehouse that's out there in the middle of nowhere, this looming beacon of light for Americans purchasing things, will hire you in a heartbeat to work in their warehouse right now. They are stepping and fetching. It's Christmas time. And so you're not gonna have time to worry about motivation

because you're gonna be at work all the time. That helps. I found that when I'm distracted by work, I'm rarely bored. And I'm rarely broke. That's a good combination. My grandmother used to say, there's a great place to go when you're broke.

Toe work. So So it's wisdom. Ah No, here's the thing This could be the best thing that ever happened to you in your whole life if you decide it is And you know, no excuses. No excuses. Go get it. Go get it open phones at triple 8 8 2 5 5 2 2 5 Diane is in Phoenix. Hi Diane, welcome to the Ramsey Show. I'm short on time. Go straight to your question. I hear you. I hear you Dave. Thank you. I hope you guys are having a blessed day. I have an annuity question. My mother recently passed away. I'm the

executive of the estate. The annuity, the beneficiary with my sister, not a problem there. However, my question is, my mother, when the contract, the annuity came mature last fall, and my 91-year-old mother had no idea what to do or what they were talking about or what they were asking her for, had to make a choice of taking a lump sum or monthly payments for the next ten years doesn't matter and doesn't matter she died when she does the beneficiary gets a lump sum you well that's not what they're telling me and that's why i'm calling are going to get a lump sum oh no no they they don't have a choice they're trying to

con you absolutely they do not have a choice they're trying to get you can they let you can elect to take payments but you are not forced to stick with her contract she died the beneficiary gets a lump sum okay what is my next step is there just tell me there's nothing i can do tell them there is something i can do i'm going to the insurance commission file a complaint on you crooks there you go

that's what i needed to know dav and I'm walking into my lawyer's office right now as well to talk about this same subject. So yeah thank you. Absolutely bogus dad gum insurance people. So they love to get you on payments rather than giving out the money. They don't want the money to leave them their control and so they're like presenting two options and acting like you only have one Nope now they will offer you payment option a contract again as a beneficiary But never you're not forced to take it and never take it time to get out of Dodge For your sister anyway, take that lump sum and invest it. Yeah, don't do something good with it. That's not leaving it with them

This is the Ramsey Show. What's up, what's up? It's Dr. John Delaney from The Dr. John Delaney Show with some amazing news. The latest episode of United States of Anxiety is available right now exclusively on the Ramsey Network app. This docuseries follows real people from my show as they embark on a 90 day journey to transform their lives and I personally walk alongside them every step of the way. Ok, now here's a sneak peek of what the new episode is all about. And don't forget to click the link in the show notes to download the app.

What's up, Kelsey? So I've lived with crippling anxiety for as long as I can remember. How do I stop it from constantly coming up in different areas of my life? What does crippling anxiety mean? Paint me a picture of that. All right, so you ready to jump in? I'm ready to jump in. We're gonna check in with Kelsey,

30 days, 60 days, 90 days. I cannot even function because I'm just crying. My mom left us when I was four. I truly felt like for a while I had no family. She's experiencing things that really hurt a long time ago. Tell me about this boy. He triggers me a lot. Scared of losing Paul, scared of doing the wrong thing,

scared of not being enough. It just feels like it would be exhausting to be Kelsey. It is. Whenever somebody's playing whack-a-mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay. How do I get my inner child out of this relationship? Because I feel like she's running the show.

One of two people that's supposed to never leave took off. I was just, I was just burdened. You burdened, that's right. To the one person who should carry it, all of it. Did you ever tell that little girl that it wasn't her fault? I don't know what to do. You either have to choose to let this guy love you, or you got to choose to let this guy go.