The Ramsey Show - If You Live Fake Rich, You Will Become Real Broke!

Episode Date: January 31, 2025

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Live from Ramsey Solutions, this is the Ramsey Show where we help people build wealth, do work they love, and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend and fellow cohost of the Smart Money Happy Hour, George Campbell. Different vibe on this show, but still fun. Still fun, yeah, we don't have a cocktail on this show, but we are answering your questions, America.

So give us a call at triple eight, eight two five, five two two five, and we'll help you out. And say anything from your career, your money, your life, relationships, anything and everything. And we're gonna start off this hour with Alex in Cleveland, Ohio. Hi Alex, welcome to the show. Hi, thanks.

How are you guys doing today? We're doing great. How can we help? So I am 23 years old. I roughly have about 90,000 in debt. 47 of that is a car loan. My payment per month is $1,200. When I bought the car, I was making roughly 150 per year, lost both those jobs and now I make about 60 per year. And just wondering should I voluntarily surrender my car? I really can't afford it anymore between rent and cost of living. I have 47 on the car, about 37 in student loans and 6,000 on credit cards.

I did complete Baby Step number one, working on number two. My mom also mentioned that she thinks I should file for bankruptcy. I'm not sure if that's the best solution, but I just wanted to get your guys' thoughts on that. No, on the bankruptcy side. I'll just say that, yeah, first and foremost. We're not there, we're not even close. So there's some good news for you.

I think mom wants you to get a clean slate and she's kind of wanting you to just shortcut this and be free from the pain, but there's better options here. And so let's talk about the car. Instead of a voluntary repo, could you sell it and come up with the amount you're underwater on? The car's only worth about 25. Did you roll negative equity?

I might be able to, but I'm so. No, did you? From a previous car? How do you owe 50 grand to the the cars worth less than half of that? It the eight the percent interest on it is 25 percent When I bought the car it was during coven I needed a new car didn't have much credit and they would only approve me for a brand new car. I could not get approved for a used car. And you said, sure, 25% sounds good.

That's reasonable. Let's go. I need this $50,000 car. And when you're making $150, this is the problem. You feel like, okay, well, I can afford the payments. And if I can afford the payment, everything's fine. And that's the backwards way of going into when it comes to buying a car. But that's what a lot of people do. I can afford the payments. So regardless of how much interest it is, I can afford it.

And then life happens as you've experienced. Okay, job wise, Alex, what were you doing before? You said you had two jobs that you lost. What were those? I was a payroll manager for an IT company and then I was an assistant manager for every retail store. Okay. And what happened to those jobs? The retail store ended up closing down and I wasn't able to get relocated and the IT firm also shut down. Oh, okay. So both companies closed. What are you doing now? I work in IT still on like the administrative side.

Okay, okay. Single? Family, kids? Single? Okay. Where are you living? Cleveland. Okay, are you living alone? Family kids? Single? Okay. Where are you living? Cleveland. Okay, are you living alone? Renting? With a roommate, 1300 split between the two of us. Okay, that's good. Okay, so yeah, I mean, getting the car out,

the 25,000 that it's worth, where did you pull that number from? From a dealership or from like Kelly Blue Book? Kelly Blue Book and a couple other like just like browsing, seeing like what similar. But it's not trade in value, that's private party value? Yes, private party. Oh man. Yeah.

Because the problem is you need to come up with the difference. Even if you do a voluntary repossession, they're gonna sell it at auction for way less than it's even worth, and you're still gonna owe the difference. Yeah. So it doesn't really, it doesn't solve all of your problems

to even do the voluntary repo. That's why we're trying to find another solution where you come up with the difference. I'd rather you be 25 grand in debt driving a beater than 47 grand in debt. Yeah, and that's kind of my thought process too. Trust me, I know this was probably the worst financial decision I've ever made.

But yeah, I'd rather drive a hoopty at this point than, you know, drive the- Are you able to keep current with your other bills, Alex, right now, making 60? Yes, this is the making 60? You are. So this credit card debt is not ongoing to keep lights on and everything? No, I'm slowly paying that off, thankfully.

I mean, honestly, Alex, if I were in your shoes, I mean, I would figure out a way. I mean, it's about 18K for the difference of the car, and you're probably not gonna be able to get a loan for the difference. Well, you said you're probably not gonna be able to get a loan for the difference. Well, you said you owe 47 on the car? 43. Yeah. Oh, 47, oh, I wrote 43.

43, yeah. Okay. So you're 22 under. 22,000. So, I mean, ideally we'd say, hey, go to your local credit union, get a loan for the difference, maybe 25 grand, and spend three of that on a beater car, but I don't know that they'd even grant you that loan at this point.

Have you tried? No, I haven't tried. I kind of wanted to search all my options beforehand. Sure. That's the least harmful of the options is to go to a credit union and see if you can get the difference in a loan and maybe a little bit more in order to get a beater car,

get rid of this payment, and then you'll be climbing your way out of this. And then hopefully in the meantime, we can get your income back up to six figures. Because clearly you're skilled enough and you're willing to do the work. Yeah, for sure. Yeah, if you can get that 60 up for a full-time job

and find something 75 or 80, right, in like a perfect world. And then the side hustle is, I mean, that's what I would be doing, Alex. And I'm like, if you can make, I mean, you'd have to make 3000 extra a month. I mean, I'm trying to do the math of how to do this within a year

to get to even save the amount for the difference, right? So best bet, you can take a loan for the difference. And like George said earlier, a local credit union is gonna be your best bet versus a bank. They're the ones that are probably actually gonna sit down with you and run more numbers and look. But so that would be my first option.

And then if not, that's probably what I would do. I would probably try to get out of this car before anything else, even before the- It solves half your problems. Yep. Yeah, if you can get out of that. And then now the second half, at least it's bearable and you can climb out of that pretty quickly,

even making what you make. It's a solvable problem, but I do think income is the biggest part and then your lifestyle is gonna have to get cut down to nothing for probably the next 18 months. Yeah, no one had ever done that. And so this is no eating out. This is, hey, the roommate wants, sorry, I can't hang out.

I'm working three jobs. It's not gonna be a fun journey, but the good news is you're young enough that you have a lot of time to make up for this. And so all hope is not lost. You don't need to go file for bankruptcy. George, would you, if you were him, would you save the 25,000 first,

get the car out, and then do the debt snowball, or would you start? Ideally. I know. I just don't know how quickly he's gonna save up 25. How fast that is, because I do wonder, Alex, too, if you paid off the six credit cards and did just the traditional debt snowball how much payments monthly will be freed up because those are paid off so even just working down the debt snowball but knowing you have a

freaking $1,200 car payment till you get to it to pay off is not fun But in the meantime, I almost would just work the debt snowball till you get there, but yeah Thanks for the call Alex. Good luck to you. We learn from our mistakes George. We learn from our mistakes. Listen people, what you call organized chaos is still chaos. This year build some room in your budget to get your life really organized. One tool that I recommend is a knockbox, as in next of kin. Knockbox is a complete system that helps you organize important documents, accounts, IDs, tax returns, insurance policies, estate plans, and other personal history in one secure place. The 15 categories

in your knockbox cover everything from health history and investments to your ancestry and even collectibles. So cut the clutter with a knockbox. Start slash Ramsey. Welcome back to the Ramsey show. If you have jobs like us out into the internet, one of the things that, you know, it's just kind of a known thing. You just don't read the comments. You just kind of let people feel what they're feeling and you just move on about your life. But George, on the other hand, reads all the comments. I live for the comments. George is always in the comments. I gotta find my joy somewhere and the comment section is so entertaining to me. And we keep getting a consistent comment. Here it is. A lot. Where's Dave? Question mark, question mark,

question mark, question mark. One question mark would suffice. Yes. So can you clear the air? Yes, Dave is okay. Dave is fine. Dave is living like no one else. He's in Cabo Wabo mode. Dave and they are, I mean, you know, I don't know George. He's left us to run the ship. The grandparents are, they're gone. You know, the kids are asking where they are and you know.

I didn't think about that. Your children are like, where's Quinn Patton? They're just living it up, which good for them. Good for them. So if all of you want to know, he is totally fine. He's alive. This is not a weekend at Bernie situation. Actually doing great.

And yeah, George, we have to fill the shoes of the goat. Let me just tell you. Yeah, so no, he will be back, we promise. He is better than he deserves right now. Yeah, he- He's tan and happy. He's doing great. That golf swings really.

Looking good. All right, we're next, we're gonna go to Tammy in Milwaukee. Hey Tammy, welcome to the show. Hi guys, thanks for taking my call. Absolutely. I am 34 and I have had a couple of houses. I went through a nasty divorce a couple of years ago, bought a house, sold it and bought this one. And this is where I'm in a little bit of trouble.

I bought this house debt free. So I had a paid off car. I did put 20% down. I thought it was in good shape. Yeah. Until one thing after another kind of broke and I was fixing things. And now that I've been watching you guys for the last six months, I know that I should not have

taken this large of a mortgage because it's about half of my income. Come on. Have you take home pay? Yes. Oh. So what do you make and what's the mortgage? Sure, so I have a few jobs now.

So my first income is about $4,000 a month. That's my primary job. And I see that keep going up and I'm trying to get promotions and doing well. And then I also bartend on the side. So that helps. And then I'm about to start doing taxes on the side. So coming up here, I'll hopefully kind of increase my income as well. How much do you make bartending a month, would you say?

About $400, $500. I try to be conservative with that number. A month? Okay. Yeah. Okay, perfect. And what's your mortgage payment every month? $2,000.

All right. Got it. OK, so how can we best help you today? I'm wondering if I should sell my house because it's a lot. Or if I just keep hustling because what it did was it put me into debt. I was also paying for school, and I made the mistake of putting that on my credit card.

So. How much other debt do you have? 37,000. Okay. Is that all credit cards? Is it credit cards? One is a personal loan, and the rest is credit cards. Okay. I mean, yes, Tammy, the only reason I would say and kind of get to that answer pretty quickly with the house is that you would have to basically double

your income for this to make sense. And you are saying that you see your income going up. But what I would want is the side hustle income not be part of the equation for your mortgage because I want to get you to a point in your financial journey that you're not having to make have a side hustle to keep your mortgage right sustainable yeah you want just like yeah your regular income to be able to support your main four walls and and more so tell me how long have you been in the house? I just hit two years last summer, so I'm good on the capital gain side. Yeah. Okay.

How much do you owe on it and what could you sell it for? I owe $2.75 and I think I could probably get $4.10. $4.10? Yeah. Oh, wow. It went up a lot in two years. It did. I live in a crazy area.

Okay. So I'm more in the suburbs. Yeah. But it definitely did. And I put a lot down, and I think that might have been another. Yeah, that's true. That's fair. Yeah, yeah, yeah.

That's fair. So if you sold it after fees, you would net probably $,000 or so, maybe 120 if you're lucky. Yeah, I kind of assumed it'd be around that 100 because of real interest fees. And then you could then pay off your 37,000 in debt, leaving you with another 60 plus to then begin a new down payment fund while you rent. Did you have kids, Tammy, when you divorced or no kids?

No. Okay, so it's just you. No kids, just me and a dog. Okay, no, that's great. So yeah, I mean, kids, Tammy, when you divorced or no kids? No. Okay, so it's just you. No kids, just me and a dog. Okay, no, that's great. So yeah, I mean, honestly, Tammy, you know, our goal when, at least when I'm giving this advice and George would be the same, is it's ultimately leading you to have a level of control

over your money that ultimately then gives you peace. That's what we want, right? I mean, if you build wealth and do all of this, that's later in the baby steps and that is so doable for people. But the biggest component here is peace. And Tammy, I don't feel like you have a lot of peace when half your income is going to just the mortgage

and you have $37,000 of other debt that you're having to pay and you're having to keep up the house. I mean, there's just not, it doesn't sound like a lot of peace. Would that be true? Yeah, I mean, I've paid off like five thousand in the last six months ever since falling your baby steps.

Oh great. Which is great, but I don't know if it's enough. Right, right. And I don't want to work 80 hours a week. Yes, totally, totally. At that pace it's going to take you another 40 months to get rid of the debt you took on on top of covering your mortgage which is already consuming a lot of your take home pay so I can feel the stress of all of that.

Yes. Making things worse. Yeah, so I think like a good goal to shoot for Tammy is I probably would, I would sell the house. I would use some of that money to pay off your debts. I would use some of it for an emergency fund. And then I would quickly get back into a house or into real estate in general.

Cause I don't, I think you can put yourself in a position where you're not a renter forever, but it may even look like a townhome or a condo or something, right? It may not be even a single family home, or if it is, it's smaller and it's way more doable. Cause I do think, you know, prices with homes, they continue to go up.

So I don't want people on the sideline for too long, but a move like this, I think will open up so much margin for you. And you'll be able to have kind of a clear head to go and purchase something again. Cause I do think you'll be in a position soon to buy something. Yeah, it's not quitting on home ownership.

It's just getting your head above water to do it with a little more peace on the next go around. Cause this just feels like, I mean, you can give it six months and see if you can get your income way up, like Rachel said, before you sell. It's not like an on fire sell today, but it just feels like if there's no end in sight where this is gonna get easier

and you're gonna continue to go into debt, then I think the writing's on the wall that it's wise to sell. Yeah, and then I'll follow your plan of 21st 5% of my income, that would be nice. That's right, that's right, I know. And again, it's not a fundamentally, you gotta do 20. It's just that when it's 50%, life is hard.

When it's 25%, you always have margin. If it was a thousand dollars right now, right? Compared to your income, that changes. I mean, that's a thousand dollars freed up right there. And if you work hard and bartend and maybe do double what you're doing, that's $2,000 coming in an extra month to pay off this other debt, right?

It just kind of ends up working so much more in your favor in that way. Is there a growth plan for you to make five, six, seven grand a month in your current role? That's complicated. Our company is going through a lot of changes, so I'm not sure. Is it time to look for another company? I have started looking. I'm a loyalist though, we'll see. But maybe it is time. Maybe I need to

dig into that further. I mean for your skill sets would you say you could ROI better out in somewhere else and you're staying because you love this company or do you think no like I'm worth this amount, even if I transferred to another company? No, I just graduated. So I think I could leverage that. Okay. Yeah, for sure. Yeah, Tammy, it feels like there's some big moves coming up in the future, which is all positive though.

That's it. I'm like, it's freeing you up more and more, giving you more peace and control. And I think it's going to be an incredible thing. I really do. Renting is not a waste of money if it's going to buy you peace. That's right. For a period of time for sure.

And then you can save up and get for a down payment on your next property and you just keep that ball rolling. Thanks for the call, Tammy. This is the Ramsey Show. Self defense can be a complicated issue, but there's one solution that makes it a lot easier. A Berna launcher. Bernas look like firearms, but they're not. They're non-lethal self-defense tools.

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which includes a burner pistol, CO2 cartridges, and ammo. 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. ["Berna Pistol and Ammo"] Well, one way to take control of your money and honestly get the most out of your paycheck is by creating and sticking to a monthly budget.

And every dollar is the best budgeting app to do that because you're able to build out your budget, track your expenses, save for what matters most, plan your spending, all of it. And it's a really easy to use app that fits in your busy lifestyle. It's right there on your phone and if you're married your spouse can have the same account so you guys as you make changes it shows up on both and you just get this pulse of where your money's going and gives you that level of control and to hit the goals that you that you want. So you can download every

dollar for free in the App Store or Google Play or click the link in the show notes or the link down below if you're listening on YouTube or podcast. All right, George, we had a Smart Money, Happy Hour episode. You know, we have some that just, you can tell, have hit a nerve with the world in a good way. And we did one recently on things that scream,

I'm pretending to be upper class. Because living a higher lifestyle than maybe what you can afford keeps you broke. I mean, when you are living beyond your means and trying to, in a way, kind of keep up with what everyone else is doing will constantly lead you back to this idea of spending money that you don't need to spend.

And sometimes you're spending money you don't even have to keep up this lifestyle. And you talk about comparisons a lot. So this segment hopefully will help you fight those comparisons and FOMO you feel amongst your friends. So here's some signs, some things that your friends may be doing, people out there on Instagram

that may show they're faking their upper class status. Number one, flashy designer logos. This is a big one. Most luxury items like a cashmere sweater never have logos all over them. We've talked about stealth wealth. Yes. It's a new trend.

It's called quiet luxury, stealth wealth. People that are actually really wealthy, you wouldn't really know it. They don't really have all the flashy stuff that you just look at and you know exactly, oh, that hat, that jacket, those shoes. Like you know exactly where everything's from. A lot kind of go under the radar.

If you know, you know. If you know, you know. Yeah, yeah, yeah, yeah. Secret society. Yeah, it's kind of that. That's like the new vibe where everything's from. A lot kind of go under the radar. If you know, you know. If you know, you know. Yeah, yeah, yeah, yeah. Secret society. Yeah, it's kind of that, that's like the new vibe, which is great, I think it's great. So yeah, that's number one. Number two is ordering expensive wine

when everyone knows that you're on a beer budget. Ooh, hey, some of these beers now are crazy expensive, but yes, the wine does, that one feels like a ripoff to me personally. You know this, my stains. I do know this. I will not order wine at a restaurant. But if someone else buys a bottle, hey, I'm happy to share.

Oh, I'm sure you are. I'll chip in. Take a glass from someone. Glasses of wine and cocktails can go for $20 a pop versus a beer, or even better, just a water. What happened to just drinking water with a meal? Why do we get to add more calories to the mix? And more money.

And more money. See, that's not fun though. I do like an appetizer. I'll just have a water. Rachel's like, I'll have three appetizers and let's try a bunch of- I do. I love going out to eat. Rachel lives a little.

I do. I do. Number three is talking about money too much. So it's like, oh, I'm leveraging this debt for all this real estate. I think those are like some of the funniest Instagram reels that come up on my feed sometimes where people are like, I'm $6.2 million in debt and we are loving it. And it's like showing all their VRBOs

that they've bought in debt and all this stuff. And you're just like, oh no, no. It's exhausting. And then you've got the crypto bros who are very loud right now and all this stuff and you're just like, no, no. It's exhausting. And then you've got the crypto bros who are very loud right now because crypto is worth $14 billion for the moment. And so all these people talking loudly about money

is usually a red flag to me. Maybe they don't actually have a lot. Yep. Next is flaunting wealth on social media. So this is an interesting one because I do think you can, like use vacations for an example. You could see somebody at the same destination

on social media, but the way they present themselves, again, kind of back to that self-wealth, I'm like, oh yeah, we're just like, maybe I'm showing you some of the stuff, but it's more of what we're doing, or like, you know, the kids in the pool, I don't know, whatever.

And then there's those that are like, oh, no, I'm going to take you around the suite that we have rented for the week. You know, or, you know, we're going to it feels it just feels like I want to show you this amazing life that I live. And that's and then the kicker, they're like, and by the way, it was totally free with their credit card points. Sign up for my course if you wanna, I'm like, oh my gosh, get outta here.

It's true, it's true. Get out of town. Here's another one. Leasing luxury cars. Oh yes. If you're a dude and you've ever posed in front of any vehicle, it's a hard no for me. Your dad didn't hug you enough and I'm sorry.

That's just the truth. But this is a status symbol that's usually draining their wallet. We just took a call earlier. It is. Guy's got a $1,200 car payment. Yeah, he may look like he's driving great when you see him, but behind the scenes, not doing so well.

And leasing cars. You know the number one city, I read this somewhere. So don't, I don't want everyone in Dallas to hate me. Number one city. Did that, I've leased cars. Dallas. Dallas, Texas. That makes sense. Number one. A lot of young br leased cars? Dallas. Dallas, Texas. That makes sense. Number one.

A lot of young bros who are doing well for themselves. I guess, got those, you know, you're always leasing like a Beamer Mercedes. It's always like a nice car. Where are the guys who are leasing like the Honda Civic, you know, a used Honda? Does that exist? No, I don't think so.

I don't think they make money off that, George. Okay. And then number six, overorizing flashy nails expensive watches Loud hair or loud loud hair makeup Meaning I don't know just a lot. Yeah, no and this you know obviously the watches leans more the dudes But the women the flashy nails a loud hair and makeup we could tone it down. You know I know My thing with this limit. I know here's my thing with I'm all for accessorizing. Here's my thing with this. There's a limit. I know, here's my thing with this though, is,

I mean, I do that, I get my nails done. Well, you follow a lot of the influencer moms, and some of them are very sweet and authentic and being themselves, and then some fall into the category of this is a lot. Yeah. You're trying to portray a certain life. I would agree with that.

Like they wake up and they have full makeup. I'm like, who's believing this? This isn't real, this isn't real. So yeah, so all of these things, you know, can, again, scream I'm pretending to be upper class. So here's the thing, you guys, not to be faking upper class, how do we get there and be wise?

Because again, none of these things in of themselves, I wouldn't say, right, if you like order wine at dinner, if you do have a nice designer purse, like none of these things in of themselves are bad. But when it becomes your whole persona and it's the only thing you're shooting for in life. And again, that you will put yourself in a financial position that's not wise

in order to achieve these things. Like that's where the caution flight, the caution lights come on. And if you're doing it with debt, it is a facade. It is a house of cards. You're artificially propping this up. So here's my, you can tweet this if you're listening out there, whatever it is called, whatever platform you're on,

whatever free speech platform you choose. Here it is, Rachel. You ready for this? If you live fake rich, you'll become real broke. Eventually you will be calling the show and life was great and now something happened and you're going, I'm in a real pickle because of my financial decisions. And so we just don't want that for you. Yep, let it be real. And yeah, doing things again, doing a budget, living within your means, saving up for an emergency fund, getting out of debt so you free up payments

so that you can actually use your money to give, to invest, to buy a house that's actually reasonable for your income. You're doing all these things, and again, it's not gonna be like this flashy, beautiful, wonderful lifestyle 24-7. It's not gonna look like that, but there's gonna be this steadiness

and this firmness of a foundation under you, and it's not all just shaky and built on other people's money. That's right. Normalize the 10-year-old used minivan. That's practical. Yes, an amen. A paid four car, that's still real flex. Okay, so the minivan, and everyone knows, I love my minivan. That's practical. Yes, an amen. A paid four car, that's still real flex. Okay, so yeah, so the minivan, and everyone knows,

I love my minivan. We know your feelings about minivans. Yes, I do love, I love my minivan. I think it's great, it is wonderful. But I will say, the plastic on the side of the seats have popped off. Oh. So two now are, so when you get in my van,

there's like wires and. Have your kids been vandalizing this vehicle? I feel like that's a personal problem. I don't think that's on Honda. You know what I mean? We can't blame the good people at Honda for that. I know, but I'm like, oh my gosh, this like, yeah. I'm blaming Chuck Cruz.

He's been working out too much, just ripping pieces of this van apart. Oh, but it's, you know, but it's paid for. That's what matters. So that's what's great stressful You know what I hit my garage the other day big old scrape on my car. You know what I said? Yeah It's 12 years old. It's fine. Who am I trying to impress Rachel Cruz? She's not impressed There's a big old scrape on my car so good hit my garage

All right If you are watching on YouTube comment below because we want to know some of your, you know, things that you see out and you're like, huh, are these people trying to be upper class and they're not? Yeah, we'll share your stories. The lifestyle, fitness that's out there. And I would say a good bit of it's probably on social media.

Can we be honest with that? It helps to just get off of there. I realize I stopped caring what other people think when I'm not looking for reasons to be angry and upset and jealous and envious. Just get off and live your life. George, if we could all be as wise and as disciplined as you. I'm the most humble guy you know.

All of it. But you can check out our Smart Money Happy Hour episode as well on YouTube and podcasts where we dive into this conversation even more. This is the Ramsey Show. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John.

Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys, I didn't even think about it. And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch.

For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. And they don't know what to do next. Terrifying. You're going to have a crisis here. You know, you got two options

while you're sitting and talking to a young widow. She's concerned about how she's gonna invest all this money properly and not mess this up, or she's concerned how she's gonna eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family. Term life insurance.

Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander.com or call 800-356-4282. The employee benefit research Institute recently did a study asking people, uh, really have a million or asking how many people really have a million dollars saved for retirement.

And according to the research, only 3.2, I'm sorry, 3.2% of Americans have a million dollars or more in their tax advantage accounts like a 401k or an individual retirement account and IRA. 58% of Americans have less than $10,000 saved in their retirement. So as a Ramsey Show listener, the question is, are you on track with the Baby Steps to reach your financial goal? If you want to know that, make sure to take our quick quiz to check your progress and receive a personalized plan that's just for you. So you can head to the show notes and click the link titled, Are You On Track With The Baby Steps? and complete the quiz for free. All right, let's go to the phones and let's talk to Lee in San Antonio. Hi Lee, welcome to the show. Hi, how are you all

today? We're doing great, how can we help? So I have a question. I just got turned on to your show about a month ago and I've been coming at it. I kind of learned about the baby steps several years ago from a friend of mine and it really burned a hole in me. So just this week I paid off my vehicle. I paid off all my personal loan except for my house. Oh my gosh, Lee, well done. Did you have all this money sitting around

and you just weren't willing to part with it? Yeah, kind of. I paid off all the credit card student loan. I took a lot of extra gigs as a contract nurse and stuff. So, doing all of it. Wow, awesome. That's a big step. You're really, you drank the Kool-Aid.

Way to go. I did, I did. So, my question. I am married. We've been married for 30 years. My husband is terrible with money. He has almost put us in the poor house three times. So, about when I got turned on to this a couple of years

ago, we I've separated our finances completely. Um, because you know, you give him a debit card, he has money, if he had checks, he had money. Um, so we, we have never agreed on money. Um, he doesn't make as much as I do, but he is definitely not hurting as far as that. His credit sucks. He can't go anywhere. Sorry for the word. We've heard worse today. So he, I just found out that he did put all his stuff into like one of those credit consumer people. He didn't talk to me about it. So when I was out on, I've always done our income tax. When I was out on the COVID run, he did one income tax return and he forgot to tell me he had spent or took

money out of his 401k. So anyway, that's a $9,000 bill. I told him he has to pay it because that was his mistake. He didn't say anything about it. He didn't report it. And now he gets to pay it. So going back a couple weeks I was listening on one, to your show and I heard, I know I heard you all talk about the Bitcoin and also at whatever, but I do remember him mentioning something and I haven't been able to find the show about if you had stock like SQL stock. So when I worked in the hospital I used to buy stock from them and it wasn't much but when I checked on it the other day, it's worth 35 grand. My question is, do I

want to sell it and then pay some of that IRS because I'm in Texas, so everything's community property here. I owe half of he defuncts or do I take that money and do a Roth IRA for last year and then put the rest into my six month emergency fund? Or should I just leave it and let it go still? Okay, so you have the $35,000, the tax bill is how much in your husband's name? Nine grand. Nine grand.

Like they're not both our names, but it was his mistake because he took the money out of his 401k and got the taxes and penalties and all that. Yep. What did he use that money for? He didn't report it. I was gone. So I was on their encoded.

You have no idea what he spent it on? Does he have an addiction? Frivolous. He likes to cook. He likes to buy junk. People don't rob their 401k to buy junk. Well, I cut them off from myself. Like I said, if I, he buys junk, believe me, he likes clothes, he likes junk.

He does. Okay. So what's the total debt? Is it just the 9,000 or is there more where this came from? Well, here's what I know of that I'm on is the 9,000. He did not tell me how much he has put into that thing. That was his credit cards, whatever. He is not on mine. The house is in my name.

My car is in my name. Everything's in my name. Okay. So from a practical standpoint, Lee, I would probably pay it off because it's in your name. I mean, it's for you guys guys which sucks that it's his mistake And I say sucks that it's his mistake because of the way you guys have been living Yeah, so I would do that. I would do you have money saved? Or you on baby step one?

No my net were already have my I have my thousand dollars in a separate account I have paid all my accounts off and I might my net worth, I already have my $1000 in a separate account. I have paid all my accounts off and my net worth with all my IRAs and investments, cause I put money in investments when I was doing the COVID thing also and paying off loans and also my net worth according to my quick in account or whatever that is, or whatever was on my computer, cause I'm not a really good money savvy person is about $ hundred and seventy thousand. Way to go. That's great. My house only owns I only owe a hundred and seventy two on my house right now. Okay. Okay. So you've been doing this essentially. You're

just like whatever you do you I'm going to manage my money and not go into debt and get my goals and yes you're not dragging me down. So the question to if you sell, and the stock is in what again? It's in a hospital stock, in a big corporate hospital. Okay, okay. Yeah, I mean I- So when I bought it years ago, it was only like from payroll deduction

and I've just kind of like left it on the back burner. Sure, and it's grown. It was 25, 50 bucks when I bought it and now it's worth like $35,000, that's what I found out. That's amazing. So you'll probably, what's your, do you file single or married filing jointly at this point? I always still do married filing jointly

just because it's cheaper that way. And what was your income last year? Last year was 94, but this year I got about 97. Okay. So it'll likely fall into like a 15% capital gains tax on those stocks since you've owned them for longer than a year. It's going to be long-term capital gains tax and it'll likely be 15%.

I would talk to your tax pro about what that number actually would turn into. Cause you'll need to have that, you know, be able to pay the taxes on that come tax time. But I would definitely sell these stocks, pay off that 9,000, and then fully fund your emergency fund. And then be putting the rest in your Roth 401k, or I'm sorry, your Roth IRA that you were saying,

and just be putting the- Well, because I just found out yesterday when I called my HR benefits and stuff, we do have Roth IRAs available here at my job. I mean a Roth 401k. I have just 401k, I'm sorry, yes. Yes, right.

Okay. So that and your Roth IRA are gonna be your friends because the great thing is when you take the money out, like versus this stock where you're having to pay capital gains, you wouldn't pay anything and you could just cash it out and it would be all 35,000 of yours. The only difference is you won't get the tax deduction

come tax time because it's on the Roth side. Yeah, that's right. But that's worth it because of how much you're gonna be making an interest over time. So I would do that. And then, and then Lee, I mean, that's the- Should I put it into this year's IRA? Like go ahead and put it in, like if I sell it,

I get it before I file my income taxes. Put that into the seven, like 7,000 into my IRA for last year's, and then I can worry about the taxes on the long-term capital gains for this year. Yeah, I mean, that's one way to do it. Before tax time, you can fund last year's Roth IRA and HSA and all that stuff. So that would be a good thing to do. Just make sure you have your fully funded emergency fund

set up before that. Yeah. And if you have enough, you can fund the rest in that IRA. But the bigger glaring issue here is this marriage, Lee. It's like the elephant in the room. How long have you guys been married? Well, 30 years. So I did talk to an attorney

and basically he was like, it's cheaper to keep him. Because you're gonna have to split your assets and all that. Yes. I also want to think about the quality of your life and not just about the dollar signs, but I just feel for you. I mean, has it been 30 years of this?

I mean, the way he handles money and the way he approaches money is the same as how he approaches life, correct? Yes. I mean, he's very, I mean, he's not a, I don't even know how to say it. It's he's an oxymoron on his whole world. I mean, he's. So the kids need him for something. He's there. He's never been not there. Yeah. He did have an infidelity issue years ago. I don't think that's a problem. It hasn't been a problem anymore.

Okay. Well, I would say this Lee too, just for the wholeness of who you are as a person, what George is saying is, you know, making sure that you're a whole person and how you can do that best, you know, is your decision for sure. But I would keep my money separate at this point because he's not proven otherwise and I don't trust him. So I hope that helps Lee and good luck to you. Well done on all the progress. Thanks to all the guys in the booth and Kelly, the lady in there.

Oh yeah, Taylor, we have some ladies in the booth and you George is a great cohost. This is the Ramsey Show. Hey guys, this is Jade Warsha. Listen, I get it. The student loan situation is bananas, but it's time to make progress, not excuses. So if your payment and interest rate have you treading water,

refinancing could be the solution for you. Look, if I were in your shoes, I would contact Laurel Road today and get a free 30 minute consultation. You'll work with a student loan expert and you'll go over your refinancing options. Hey, for refinancing to make sense, you've got to check certain boxes, like making a good income. And bottom line, Ramsey's advice is that you only refinance if you can get a lower rate or a shorter term. Remember, the point is to pay off debt faster. Maybe you just need to keep rocking

the debt snowball. But if refinancing does make sense for you, Laurel Road offers low competitive rates and interest rate discounts are available for stuff like auto pay. Listen, you can't mess around with student loans. If you want them gone, you got to go hard. So go to laurelroad.com slash Ramsey to find out more and schedule your free 30 minute consultation. That's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

I am Rachel Cruz, hosting this hour with my good friend, best-selling author and co-host of our other podcast, Smart Money Happy Hour, and George Campbell, that's you. That's me. I didn't introduce you, I just gave you all the titles. I appreciate that. I'll take the accolades. You don't need to mention my name. And we are answering your questions this hour at 888-825-5225. And to start us off, we have Dustin in Palm Springs, California. Very nice area. Hey, Dustin, welcome to the show. Hey, thank you. So my wife and I were in our mid-30s and we are so close to baby step seven we can feel it.

But we have one small hurdle that we got to jump over to get there and differing opinions kind of on how to resolve it and hoping to get some advice and maybe you guys can break a tie for us. Perfect. Can't wait. What is it? What's going on? Alright, so we've knocked out all of our debt using the baby steps. We paid off about $350,000 worth over about two and a half years. Wow. $350,000 you guys paid off?

Yeah, well, not all paid off. We sold stuff. I mean, we had everything under the sun. Wow, well done. Automobiles and campers, and I don't even like camping. So all we have left now is our primary home, and we do have a vacation home. And what we want to do is sell our primary home and move into the vacation

home, which we like better anyways. Um, and basically the net proceeds from selling our main house will pay off our vacation home, which will become our primary residence. Yeah. So we're ready to go. The problem is I bought the vacation home prior to our marriage and I unfortunately bought it from a friend. He's carrying the note. And when I kind of brought up to him, you know, excited that, hey, I'm going to have a big, big check for you, he kind of pushed back. And, you know, he's kind of saying he wants to spread his capital gains tax over the 10 year note that we'd agreed upon at the 4% interest rate and

kind of just, you know, park his money in that investment. So my question is, how do I, how do I do this? I don't want to burn a friendship. My wife wants me to just slap a check on his desk, but she doesn't have to play golf with him on Saturday morning. So I'm not really sure how to approach this conversation without, you know, um, so he basically kept the mortgage in his name and you just pay him the mortgage payment and he pays for it. No, we did it all legit. We went through a title and escrow company and we drafted up a purchase agreement.

And basically it's just a loan from him. Basically, you know, I did a 20 percent down payment with him and I do pay him, you know, basically as the bank. But I am on the title, the deed all that stuff. Okay Okay, so you're so it is your home Correct. I mean, yeah, it's your home and he's just the bank is what that is. Just seller financing. Yes Correct, and I wish I didn't do this because now I'm in this situation But yeah, basically when I brought up to him that you know, you know I owe him about five hundred thousand and you know I have the ability, well, will,

once we sell this primary home to pay him off, but he just doesn't sound very excited about it. He wants to just go per the terms of our agreement, pay it off over 10 years so he can expense that capital gains over the 10 years rather than all at once. Has he actually talked to a tax pro to see if this loan repayment counts as income? Well, he said that was for, yeah, so, well, it does because he has to pay tax on the interest portion of it, I think, and then, you know, on the principal,

he's, you know, it's capital gains rate, I believe, because it was paid off, you know, for him. He, yeah, so to answer your question, yes, he said he talked to the CPA, and basically, if I pay it off, he will have to pay capital gains on the proceeds, yes. Is there anything in the contract that you signed with him that would prohibit you from just paying it off, he will have to pay capital gains on the proceeds, yes. Is there anything in the contract that you signed with him that would prohibit you from just paying it off?

And that's the issue. There's not, I've read over it a hundred times and it's like legally and all that, I can go pay it off. Yeah, so boo hoo friends, here's your 500,000. You're gonna have to pay taxes on it, sorry. Did he not make money off of this? Did he not benefit from this whole thing? No, yeah, he's gonna're gonna have to pay taxes on it. Sorry. Did he not make money off of this? Did he not benefit from this whole thing? No, yeah.

He's gonna make a lot of money off of it. He bought it 25 years ago. So he's gonna make quite a bit. I guess my worry is that I'm either gonna upset my wife or my friend, right? Because it's like, she wants this to be done. Or your life, Justin, or your life. You guys have freaking paid off $350,000.

You guys are on a plan together for your life and you did this side deal with a friend and your life has changed and your priorities and your goals have changed. And so, sorry friend, it's not like you're putting your friend in debt, boo hoo, he gets $500,000 and he's gonna have to pay some taxes on it. Like-

You can wipe his tears with $100 bills. Like, sorry dude, right? And I'm being very insensitive. If I were you, I would feel much worse cause it is a good friend. I don't have a lot of empathy for the friend. I mean, yeah, Dustin, like the writing's on the wall. You have to do what's best for you and your family.

It'd be very unwise to make an unwise financial decision for you and your family because of the feelings of a friend. And so I guess that's going to be a hard conversation I need to have with him and say, listen, this is our- 100%. And I think you can give him some time and say, hey, I'm not doing this tomorrow. You know, our goal is to do this in 12 months

or whatever the goal is for you guys. When you sell your primary home, all of that. Like if you can kind of map out a timeline, give him some time and space and just say, hey, yeah, this isn't happening tomorrow, but it will be happening in the next year. And I looked over the agreement that we signed and I'm sorry, I know it's not ideal in your situation, but like this is, this is our values and our priorities with our families to be

completely debt free. And and yeah, this is what we're deciding to do. And again, Destiny, you're not like completely screwing the guy. Like it's, you know what I mean? Like you're not paying you the debt back. Yeah. Sorry. Yeah. That's a little older and that was part of it too, is he's like, well, you know, and he gave me a great

interest rate at 4%. It's like, well, you know, I can kind of guarantee to make my 4% of that money where any legacy is a little older and reality, he can just go park that in a high yield and make that. That was exactly the point I was trying to bring up to him. And he just didn't seem jazzed about it. And it put me in a weird situation where I'm like, man, I don't want to like burn a friendship with a guy that I've had a long friendship with, but at the same time, it's not matching up with the goal. And I'll be honest too, if you're a friend, I'm like trying to put myself in his position, right? If I ever was in that deal. And I had a young guy come to

me and be like, you know, oh my gosh, we're able to get out of this deal because we have the cash, we have the money, we're so excited, we're gonna be debt free. Like you would hope that it doesn't burn a friendship, that in fact, he celebrates with you. And you know what I mean, which I know like this way of thinking is different to celebrate being debt free. And be thankful a friend paid me back,

which is very rare in today's world. And the other thing Dustin, is that when he loaned you this money, the relationship already changed. It turned into a business partnership transaction and it moved away from friendship. And so this is what happens with friendship. So the truth is, if you pay it off

and he decides to not be your friend, was he really your friend? Yes, George. He sure. There's a piece of it though. I know what you're saying. I know what you're saying. I would never burn a friendship over them paying me back. Yeah, yeah, that's it. So like, if he really, Dustin, is not your friend anymore after this,

then like, to George's point, then he's looking to make money off of you. You know what I mean? Like, it feels weird if he is going to cut ties with you as a friend because of this move, that's weird. Yeah, that would be weird. I don't think that would happen. It's just, I guess I'm, you know, I hate to even say this. I guess I'm kind of just being a sissy about having the conversation because of the vibe I got when I brought it up, you know, a couple of times over. And I even told, you know, my thought was just let's just park our money that we make

from the primary home in a high yield and just pay him off. And then I kind of, you know, we're quote unquote, we feel debt free ish because the money's there. But my wife says, you know, she's so excited because we did so good on the first, you know, six steps call it that she's ready to just get finished, quote unquote, finish the journey and be done. Yes. Listen to your wife, Dustin. My wife, her vote counts 1000 times more than any of my friends. And I love my friends. And you have a little bit of that people pleaser in you,

Dustin. I hear it. And so yeah, this is grown up stuff. And be a man, suck it up, and talk to him. And again, if he is weird after this because of this whole thing, that's a weird guy anyway. I'm going to add this to one more reason to not borrow money from friends. That's the new book and family

Yes, all of it. This is the Ramsey show This show is sponsored by better help Hey everyone, listen We all have stories the family and cultural stories that we were born into the stories of the things that have happened to us both the good stuff and the challenging stuff and we have those stories that we were born into, the stories of the things that have happened to us, both the good stuff and the challenging stuff. And we have those stories that we constantly tell ourselves. And none of us can go back and change any of our old stories, but the world is waiting to see what each of us is going to write next. As we enter 2025, I encourage you to examine your old stories and be intentional about the new stories that you're going to write. And I'm not talking about making goals that are going to be long gone by February. I'm talking

about writing new stories that will change your life and the lives of those you love for the better forever. If you're like me, therapy can be a great place to explore the old stories and heal from them and begin writing new ones. If you're thinking about starting therapy, I want you to consider my friends at BetterHelp. BetterHelp is a hundred percent online therapy and you can talk with your therapist when it works for your schedule. You just fill out a short online survey to get matched with the licensed therapist and you can switch at any time for no extra cost. So start writing a new story this month with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Deloney.

I still remember 10 years ago, 23 years old, I was frustrated, anxious, and flat broke. I had followed all the ways that toxic money culture had led me down from well-meaning parents and misguided guidance counselors, and it left me with a pile of debt. But I'm telling you, it doesn't have to stay that way. Over a decade, I went from broke to millionaire,

and I break it all down in my new book, Breaking Free from Broke. I'm gonna show you just how toxic this money system is and how you can break free from credit scores and credit cards and student loans and auto loans and investing traps and finally live a life that you're not exhausted by a life with more margin, more options and more peace. If you want to check out the book, go to ramsesolutions.com slash store to get your copy of Breaking Free from Broke. That's ramsesolutions.com slash

store. Welcome back to the Ramsey show. Up next we have Ethan. Oh, we have Mike. Sorry, Mike in Asheville, North Carolina. Hi, Mike. Welcome to the show. Hey, how are you all doing? I got a good one for you. Okay, perfect. So we COVID hit, we did a big remodel. It was about $100,000 that we've invested to create home offices. As a result, we kind of credit carded everything and we've been living paycheck to paycheck for a while. And I just lost my job this week. We were trying to do a refinance and that fell through. And so long story short, we went from about $195K in about 65 and looking for advice and we cannot sell the

house because it's under remodel we're not allowed to sell it for at least a year and the remodel is not quite finished. Oh boy okay. Is that more than just getting the two home offices during COVID, y'all done more remodeling? Yeah, it was expensive. We kind of expanded the second floor and just with the goal of ultimately selling, but it's obviously when I lost my job, it was kind of a deal where it kind of put the brakes on everything even more, you know, after a little paycheck to paycheck.

And so we're obviously doing it the wrong way. So looking for advice on how to get out of this. How much more debt do you have? What's the total amount and break it down for us? Okay, so the mortgage is 202 and we have things like cars and credit cards and a lot of that is just due to the remodel but it's a 210,000

and other non mortgage debt. Oh my goodness. Well we can sell the cars. What do the cars have to do with the remodel? They don't. Yeah so the cars were paying one of them is $3.94 the other one is $3.80 a month. How much are they are they how much do you owe on the cars? How much debt's on them? Approximately, yeah, approximately 28 in total. Okay, break them down. What's the each one?

Each, well, so the one of them is about 13.5, the other one's 15. Okay. I'm confused. You said you had 210 and other debt and only 28 of that is cars. You're saying the rest of that is credit card debt? Well, unfortunately, we had like a foundation loan, a bunch of its credit card,

of a student loan at about 20,000. And I think, yes, the rest of it is either small loans like through Home Depot, or credit cards, correct. And what were you doing for work where you guys were making about 200K? Software developer. Okay, and what are you doing now? I am looking forward,

but I'm gonna work on some certifications. I took a job that wasn't ideal for obviously my career and skills skill set and so that's something I'm going to be working on is some probably Azure certifications. Are they going to cost money? A little. The test, the actual certification exam is only $165. But then you need to, is there some kind of online education you need to get that will

cost money? Or can you just do a certification test? I can. There are some sample tests and some certification videos that are very helpful, but it's minimal charges, if any. And how quickly do you think you could get a job making six figures as a software developer? could get a job making six figures as a software developer? Well, I've applied for a bunch of jobs already, but it's a matter of finding the right fit. I would like to focus on the skillset to some extent,

but probably in two weeks, I would be able to pass that certification. Okay. If I was in your shoes, Mike, right fit would be a luxury and a privilege. Right now I'm going, who is willing to pay me $100,000 to write some code? If I was in your shoes Mike, right fit is a would be a luxury and a privilege right now I'm going who is willing to pay me a hundred thousand dollars to write some code and I'm gonna do that so I can survive Because right now I don't see a way out of this with your monthly payments and your income

You guys are gonna continually go into debt. Is your wife working Mike? Yes, okay, is she making the 65? Yes, okay. So if you made a hundred, then you guys can get back up to 165. You know, I was at 130, but yes. Okay. Yeah. So I mean, ideally replacing that completely like what you're saying. And then, yeah, I mean, and then from there, Mike, it's just a complete overhaul and mindset shift and change on how you guys have been viewing money. The way you, and you said it at the beginning of the call,

so I'm not telling you anything you don't know, but the way you've been doing it, it has to be the complete opposite. So this is cutting up credit cards. This is, I mean, if any of your cars have equity in them, I would just sell them and get a $5,000 car. I mean, I would do the complete opposite of everything I've been doing up into this point

because that's where you're actually gonna start to see some progress. And I really feel like, Mike, you guys need some quick wins in here. Yes, the income is number one, but I would be cutting up credit cards tonight. I mean, no more, no more. Like you guys are not in a place to even have them around

because so much of this is credit card debt. And I know it was all in, you know, because of the remodel, but the whole mindset, yeah, of going in when you don't have the money, it just, that can't be it anymore. And then, you know, walking through the debt snowball of paying off and breaking all these out too. So when you say, yeah, some of these are credit cards, breaking each specific credit card out.

So you guys may have a long list of debts, but as you start knocking these out, that's where that momentum starts. Are you guys able to stay current on payments right now? Well, we had a small severance but it was only $5,000 and so our current just our debt load is like a little over $6,200 for the month and so the money we got you know in hand will you know in my last month. Yeah I mean you guys are you're on the edge of running out and going back into more debt.

And so can you do, go do three side jobs this week? Yes. Doesn't have to be software. It could be Instacart, Shipt, Uber, Handyman, whatever skills you have, go do it to bring in something while you look for that work. I had one job where I picked up some work to do some light remodeling for a lady and that was $530. So you're pretty handy? I've collected about half of that. Yeah, I mean I'm doing the remodel myself so yeah.

Okay, well today we start Mike's Handyman business and you're gonna charge 50, 60, 70 bucks an hour and put it on your neighborhood Facebook group and just hand out some flyers and go, I'm doing good work and I show up on time and get referrals word of mouth and get this business going and do as much of it as you can until you get that next software developer job.

Mm-hmm, okay. That's what I would be doing if I had your skill set. Yeah, and I think what's hard, Mike, is there's a level of deep humility that you're gonna have to have in this process because between now and getting your new job, making anything and doing work that maybe you never thought you would be doing

is what's necessary right now, right? Because I don't want you guys, like what George was saying, to get behind. So bringing in 1,000, 2 a thousand, 2000, 3000 a month on numerous things that you're pairing together and you're working late. I mean, do you guys have kids at home? Yes, two.

How old are they? Yeah, so 14 and 17. Okay. Do they know about any of this? I'm sorry? Do they know about any of this? I'm sorry? Do they know about your financial situation at all? To some extent, yes, high level. Okay, it might be good to sit down with them

and have a hard conversation and say, listen, the next year or two, it's gonna look different for our family. We used to go do stuff and eat out and do all these sports. And right now we gotta really tighten up and get out of this financial mess. Here's what that's gonna look like. Yeah, and even if your wife can work overtime, Mike too,

I mean, I would be doing, I mean, again, income is gonna be your best bet and then cutting lifestyle, which George is saying. And it's gonna be, yeah, I mean, if you guys, if you get back up to that 195, I would be living like I made 80 because the 65,000 is covering the bills basically per month, right? I mean, I mean, living on seriously on nothing. And that's you could, you could really turn this around if you could throw, which sounds

wild, wild numbers here. But if you could throw 100 grand a year, that non-mortgage debt in two years. Yeah, I mean, seriously, I mean, there's some big changes. And sell the cars. Yeah, selling the cars, getting rid of what you can, selling stuff too, Mike. Go around your house, sell all the crap that you have, doing what you can. But if you hold on the line, Taylor's going to pick up and we're going to give you Financial Peace University.

It's our nine lesson course and you and your wife sit down together and even your kids and watch this. You guys binge that this weekend because yep life's gonna look different in the household and that's exciting Mike because that means you're gonna be winning. 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.

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So go to ramsysolutions.com slash smart tax to take advantage of early bird pricing and stress-free filing. That's ramsysolutions.com slash smart tax. Today's question of the day is brought to you by Why ReFi? Now we don't recommend refinancing on everything, but for distressed private student loans, there's Why ReFi? And we trust Why ReFi because they help you with a low fixed rate, interest rate, that

you really couldn't get anywhere else. And it's going to help you stick to your budget and get out of debt. So learn more at whyrefi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey may not be available in all states. Today's question comes from Matthew in Idaho. My wife and I are millionaires after years of working through the baby steps.

In the beginning, it was exciting. The baby steps happened fast and our children learned to have Christmas on a budget. But once we got to the point where we had an emergency fund, the house was paid off and we were building wealth, everything just started to seem very routine and boring. How do we keep the excitement going in our financial lives? If there was ever a Rachel Cruz question, this would be it. You were made for this question. George. You were so good about keeping your financial life excited. Yeah. Because you're

the spender. You're like, I've got some ideas. And they're like, he's like me. He's like, well, I like a financial goal. We saved the thing, we invested the thing, but now what? Goals. Now you have to actually figure out like who you are and find hobbies. That's right.

Okay, so I always go back to this cause it's so spot on and I agree with it a hundred percent and it's science, but Arthur Brooks talks about what you can do with money five things and four bring happiness and one does not so this is what I would say to him to Matthew you can give which brings happiness you can save which actually brings happiness because it shows progress you can buy experiences with people you love and that brings happiness you can buy your time back and then use your time well spent. Right?

So if you have someone mow your lawn, have them mow the lawn, but you get time back, but go work out or like go do something productive. And then number five, you can spend money on stuff, but that does not, that does not produce joy. And then Ramsey, we always talk about you can give, save and spend. Right? So kind of using that framework if I were you Mike I mean if there isn't a big goal out there, and I would say Winston

I we've kind of gotten to this place our house was a massive goal That was in 2019 and then we made it a goal for a pool, and we actually were finished. We're not now I know so that what we took I mean it took us probably five years to save for that And so now we're at this point when we were planning our 2025 of like, okay, we don't really have a big financial goal in place. And I would say that for a time period, I think that's okay because we shifted the excitement and like, hey, what's the next thing

to some of those things Arthur Brooks talks about. So like plan a fun trip with your family, like have some experiences with them. Give someone a trip, right? If you have the money, like are there people in your life that you could bless them of like, Oh gosh, this couple really helped us walk through some hard times and we want to give them a weekend away, right? And like, like what are things you can do? And then the giving aspect,

which once and I even changed some of our giving goals this year. Um, and we are, we like have a percentage now in our every dollar budget that is above our tithe above everything else we do. And it's spontaneous giving and we're going to force ourselves every month to do it and to say, yeah, we're like, where can we give spontaneously to someone throughout the month? If we hear a story, if we experience someone, you know, at a restaurant, a waiter or waitress, like give an insane tip, like what are ways we can do that? And that fueled my excitement, George.

Like when we planned all this out a few weeks ago, as we were kind of talking through the year, it was like, okay, we don't have a big goal, quote unquote, we're saving for. There's no baby step eight. Yeah, yeah. But we're being more creative with our giving, which does make it more exciting.

We are gonna travel some this year, so we put that in the budget. So yeah, so like leaning in on these things that actually will bring you joy. And I'll probably, you know, buy some shirts from Abercrombie, you know, it's just what I do. But overall, like where do we put our time and our energy and our money? Put it in the stuff that's going to bring you joy and excitement. And for me, that's giving and experiences.

But that's probably just my personality. No, you nailed it. I think there's usually a flat tire situation when you're really good at saving and investing. And then the giving side usually is a little lackluster. And you have a hard time just spending for fun because it feels frivolous after everything you've been through. Are you speaking out of your experience, George?

This is me. This is me. I'm working on my flat tire, Rachel, trying to spend more, enjoy life a little more. But I relate to Matthew's situation because the baby steps are so great because it gives you a very exact process. If you do this thing, you'll hit this goal.

And then you get to baby step seven and it's a choose your own adventure of live and give like no one else. Yes. Yeah. And so that's where he has to figure that out for himself. And maybe that is we need to find some hobbies. Maybe I'm going to try golfing or I want to get back into this thing that I used to love as a child.

And I really need to pick back up piano lessons. Yes, that's great. Whatever the thing is for you and your family, and go, hey, this is something we never thought we would do, or back in the day, we were like, nope, we can't do that. What can you say yes to now that was a no five years ago? Yes, that's good.

That's really good. Make that list, yeah, of what are things that we, yeah, what should we do? Dream date. And you and Winston just did your annual dream date recently. Yes, that's what I was talking about, yeah, of what are things that we, yeah, we should be able to do. Dream date. And you got, you and Winston just did your annual dream date recently. Yes, that's what I was talking about, yeah. And we had the, we had every dollar for our monthly

budget up and then we had Excel and Winston has all these crazy formulas of like implementing taxes. He has all this, like, he does it all in a, I don't get it. I gotta get that spreadsheet from Winston. I know, you should, you should. I need some new formulas in my life. Yeah, and that's the interesting thing is people

really do, on the show we talk about, for a lot of listeners and for those of you that are new to the baby steps, a lot of people are starting out on baby step one, they're just trying to get that thousand dollars and pay off debt, right? But this long journey of money, I always want you guys to hear from us on this show

that the goal of building wealth and being in a really secure place in baby step seven, where you don't even have a house payment, your house is paid for, retirement's being funded, like all of that. It's not just to continue just to get more and more and more and more and more and more and more and more. There is an outflow that needs to happen.

You need to do things with your family, give to others, give others great experiences in life. There is something about using money as a tool. It's not something to hoard and to others, give others great experiences in life. Like there is something about using money as a tool. It's not something to hoard and to keep, but you're doing this to leave a mark on the world. I mean, there's something beautiful about that, but I think is really innate, um, and how we're created. And so leaning into some of that, because I do think there can be this mindset, maybe early on, you know, maybe baby steps, like four or five, six, where

there's like, my goal is just to like get money, get money, get money, get money, which right, you're funding retirement, you're wanting stability. But there's been listeners here that have been with us for eight, nine, 10 plus years that are Baby Steps millionaires. And they're like, yeah, and they're on the other side. And the ones we talk to that have this joy about them, this countenance about them that we meet,

it's because they've been able to do some cool stuff and every now and then they'll drop their story to us, you know, the things they get to do. But I don't know. There's something about this whole idea of building wealth. It's not just to build wealth. It is what you do with that wealth that brings you a level of joy and happiness and how we're created. Beautifully said, Rachel.

Gosh, no notes, no notes, no notes. No notes, so Matthew, spend some money. What a great trip and be a generous giver. Go find things that bring you joy with giving because that's the best. All right, George, there are some social questions that we get all the time. I love a social question.

Yeah, when it comes to, I do too. I don't, oh, I don't see them out here. Do you have your- They did not give, we are missing our social question. Oh, no. I got one, I'm just kidding. You got one? All right, here we go.

You ready for this one? Yeah, shoot. Zach from TikTok asks, how much is enough or normal to spend on an engagement ring? I want Rachel's opinion on this so badly. I don't think I've ever talked to you about this. Isn't like the jewelry people out there, don't they say three months and we say one?

Generally we'd say one month salary is like a top limit. Sorry, one month salary, that's what I meant, yeah. But three months out there, I think like Zales and you know. I think they usually say a three month salary. Every kiss begins with K, came up with like, it should be 17 months of your salary. I think it was the diamond company, like the people that did the diamonds decades ago.

De Beers or whatever? De Beers, that's it. I was like, I don't wanna mispronounce it, but I think they came up with the three month salary rule and we'd say, pull that back a little bit, a month. I think a month is great. But let's, yeah, the weddings, engagements, rings, it is expensive, George. I'm glad that I'm out of...

Out of that season. Because nowadays, like what people are spending to be in weddings, to go to all the stuff. I mean, it is... And then the comparisons. Can I just be honest? It's the women on women comparisons of, oh, let me see the ring, oh, that's cute.

You know what I mean? Like the guys don't care. No man has ever cared. No. It's just like, we don't want the woman to be upset. That's how we go. Are they gonna know it's from the lab and not a blood diamond?

Ooh, yeah, what do you think about, yeah. I could give a rat's toot about where the, like if that's what you're basing this marriage on, well, was it, did they work hard for the diamond or did a laboratory, don't care. Get a moissanite, it's about the beauty of the ring and does it match her personality? And does it make sense financially? Because that is an industry that you can spend so much on. My wife's ring was not that expensive.

There you go. It's not a blood diamond. I'm not even sure it's a real diamond, Rachel. I don't even like you saying that. It was just a beautiful ring. That's what they call them. I don't know what else to call them. Lab-grown versus nature found? Real. Right? I mean it's like an actual jewel. Producer Kelly is, she's showing her ring going real. That's the, that's the one you're looking for. This is The Ramsey Show. Hey Dave Ramsey here. Dr. John Delaney and I are coming to a city near you on the Money and Relationships Tour. You, the audience, will vote to choose the topics

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So one of the best things that you can do for your finances is to get a tax pro that you trust in your corner. They'll help you advise you when it comes to the best moves for your situation, especially if you own a small business or you've had big life changes in the past year. So you can go to ramsysolutions.com slash tax pro to find CPAs and enrolled agents that have been vetted by the Ramsey team. Tax season is upon us.

It is happening as we speak. I got my appointment. Do you have your appointment? There you go. You know, that's the free spirit in Rachel Winston really takes. I'm sure it's coming. I get usually the email of the like invite and all the things.

Oh, that's nice that he at least invites you. He does. You're on the calendar invite. Yes. I do the same, but for Whitney. Oh, see, there you go. There you go. It's great.

But you can go to RamseySolutions.com slash tax bro to get someone in your corner today. All right. Next up we have Morgan in Kansas City. Hey Morgan, welcome to the show. Hi Rachel, hi George, thank you for taking my call. Absolutely, how can we help? Well I like some guidance today on how to navigate my brother-in-law with tragedy. Excuse me if I get emotional. On January 14th my sister-in-law passed away unexpectedly. Oh my gosh, Morgan. That was just what two weeks ago?

That was two weeks ago. She's 38 and they have three children and it's been pretty tough. I'm so sorry. Oh, thank you. That's heartbreaking. So what, how are they doing? As good as they can do for right now. They have three children, 15, five, and two. The 15 year old is from a previous relationship, so I think financially her father is able to provide a lot. But to be honest, they weren't prepared. I mean, nobody is, but he's kind of in a financial mess. So I have a few numbers. I don't have all the details because it's still very fresh, but I've gathered a few things. To my knowledge, they don't have very, I don't think they have any savings. Bought their house two years ago for $170,000. I believe their mortgage is

$1,400 a month. I think he makes, they both worked for a trucking company. I think he's in like the 70 to 80 range. And I believe she was about 60 to 70. So he's losing half of her income. And also she was getting $1,700 a month in veteran benefits. They did not pay for the survivor benefit. No survivor benefit. So she lost that too. Did she have any life insurance on her? I think she had a small policy through her work, maybe $20,000. No will. They have $15,000 in credit card debt. Two cars. One has a small loan, I believe it's her car, and she may have a small 401k. She may.

My question is, she might, I'm not sure. Is that him wondering if he does, or is it you just saying she might? It's me wondering, because my wife and I have been following the Dave steps for years, so we're on four, five, and six, so my brain automatically went to right up the baby steps. So I was just trying to gather everything I have. So that is kind of a high level overview. So I don't know if he should take her life insurance and just try to walk up the baby steps.

I don't know if credit cards that are only in her name, if I should tell him to stop paying because autopsy results are pending. And so we may not get the death certificate for about two months. So I don't know if he can do much of anything until we get a death certificate. Yeah. Oh, Morgan, I'm so sorry. So in these kind of situations when there's something so unexpected and so tragic, we usually advise the families not to do anything major

for probably about 12 months because there is. And that's why I haven't asked these questions yet. This is just kind of what I've gathered because this is, I mean, this is so heavy. It's just pure grief. Right, right. Well, and he doesn't, I mean, he can't even probably, you know, put together a thought.

And so for you just to kind of be a side support, right? And at least be able to gather and do some level of work for him is such a gift, Morgan. I mean, honestly, you're giving them such a gift by even kind of navigating this part of their lives because everything, yeah, I mean, I just, I can't even imagine. So I wouldn't do anything again, big,

from a decision standpoint, unless they get to a point where there is something big, right, if they get six months into this and he can't pay the mortgage and they're, you know, there's foreclosures pending or like something like, really big, right, then we have to make some big decisions. But whatever I think he can do to the degree of staying somewhat afloat for a year,

maybe some small things and we can maybe talk to you about those here on this call. But overall, I wouldn't make any big, big decisions. So I think because again, the emotion, you just can't see straight, you know. She handled all the finances, so he's trying to just open bills. What accounts do we have? I mean, he's starting from scratch. So it's just tough all around. So that's kind of where

he's starting. Like he said, you know, I'm going to Verizon today to get my name on all the accounts. He's on a scavenger hunt while graving. I mean, that's the hardest, yeah. That's the hardest part is that life continues on right in the middle of all this. And you're like, I have to be a grownup and like- And the kids still need food.

Do this, yeah. I mean, oh, oh, so terrible. Okay. So yes, I think, you know, your gut on starting to kind of just like put the baby steps in place. That plan I think is, is a good one. Um, again, I would, I would take, you know, find the life insurance. I would get as much concrete information as you can,

cause that's going to help you guys navigate this. But for him, um, I mean he, to get him to live on 70K and be comfortable there probably will mean offloading some of this debt so that they don't have all these payments and I would have Helm look through every account possible to see if there's any savings. And I would probably start working on, you know,

paying off maybe these smaller debts if they do have credit card debt. And sell her a car and get rid of that loan. In the meantime, that's a short-term thing that could relieve some pressure here. And then with the credit card debt. Are there credit cards only in her name? Yeah, if they're only in her name,

he may not be liable for them. Just depends on how things are set up and will the estate pay it out of her assets and there's his name on that. And so that's, I can't tell you for sure. Like if her name's on the mortgage, they can, I mean, technically, they can come after those things, right?

They're not gonna go after like the mortgage or her retirement accounts, but if she has any other assets that can be used to pay this down, they will use that. But I would not be in a rush to pay off this credit card debt and I would not let the creditors pressure him and lie to him and say, no, you need to pay this down, they will use that. But I would not be in a rush to pay off this credit card debt and I would not let the creditors pressure him and lie to him and say, no, you need to pay this today.

Do send a copy of the death certificate to the credit card companies once you get those. Get a bunch of copies, probably 10 copies minimum to send to all the creditors involved. So these credit cards are in just, some of them are just in her name. Is that what you're saying, Morgan? I think they might be.

I think a handful might be. And I would pull her credit report and his just to verify and make sure that, yeah, that that information's correct. Get a lay of the land. And you can do that for free. You can have them go to this website, annualcreditreport.com, I believe is the site and you can pull them.

Don't ever pay to get this pulled. Perfect. Yep, there it is. Annualcreditreport.com. You can pull from all't ever pay to get this pulled. Perfect. Yep, there it is. Annualcreditreport.com. You can pull from all three bureaus and get a real picture of, here's the reality of where we're at and now we know the next steps

and he's lucky to have you to help and clean up the pieces. And if we can help in any other way, let us know. But this is just one of those reminders to everyone else listening, get a will in place today. It's not gonna cause you to die any sooner, but it will cause your family to just grieve your loss

instead of also lead you on a scavenger hunt and guess. Yeah. And have the government decide what happens to your stuff. May I address your listeners for just one minute? Please. Excuse me for getting emotional. Get this done guys. Because instead of just being able to grieve, take three months off work, six months off work, take the children on a trip,

he's in a financial mess. So on top of grief, there's headache, frustration and stress. So please, this stuff happens every day. I know, excuse me, none of us think it's going to happen to us until it does. So if anything, just get enough life insurance to cover these things while you clean up the baby stuff. Well said, Morgan. I know. Thank you so much for, it's not easy to go on radio like this and share. I'm so sorry. Everyone listening including us, we're thinking of them and praying for them. Yeah. Wishing them the best. And just to continue on what Morgan's saying, we believe in this so much you guys to get your wills done.

Zander Insurance for life insurance. Get 10 to 12 times your annual income if you're a stay-at-home mom. You need half a million at least on you. Get life insurance today. Morgan, we're praying for you guys. George million at least on you. Get life insurance today. Morgan, we're praying for you guys. George, thanks for the hour. Thanks to everyone in the booth that's making it happen. And thank you, America. We'll be back. 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.