The Ramsey Show - It’s Time To Cut Debt out of Your Life!

Episode Date: March 14, 2025

📈 Are you on track with the Baby Steps? Get a Free Personalized Plan George Kamel & Ken Coleman answer your questions and discuss: "I feel like we'll never catch up on our retirement savings," "Will cutting up my card get me in trouble?" "Is it greedy to counter-offer a promotion?" "I can't morally invest in the S&P 500," "How do I break down annual/semi-annual insurance payments into a monthly budget?" "My car was repossessed this morning..." Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp 🏥 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 ⛨ Find top Health Insurance Plans at Health Trust Financial 💸 To find out more about student loan refinancing, check out Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 💰 Learn more about creating a sinking fund in EveryDollar 📱 Watch the full episode for free in the Ramsey Network app. 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 🏠 Find a Ramsey Trusted Real Estate Agent 🤓 File your taxes with 100% accurate software that’s 20% of the price. 💵 Start your free budget today. Download the EveryDollar app! 🛒 Preorder Build a Business You Love Now at Ramsey Solutions 💻 Sign up for a free training with our EveryDollar team! Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Hey guys, Dave Ramsey here. Me and Dr. John Delaney are coming to a city near you on the Money and Relationships Tour. It's happening soon, so don't wait. Get your tickets at ramsysolutions.com slash tour. This is the Ramsey Show where America hangs out to have a conversation about their money, their work, and their relationships. The phone number to jump in is 888-825-5225. Alongside the incomparable, the always Natalie attire, George Camel. I'm Ken Coleman and it's gonna be a fun show today and I can tell you the audience out in the studio I can just tell these people got the juice George. They're

excited. I met some of them before the show. They are riled up. Well they're a live wire. And a particularly good-looking group if I might if I might observe and We've been called by many people the the root beer float of the Ramsey show George thinks he's the root beer I'll stay with the vanilla ice cream. That's fine. I'm lucky to be a vessel I'm just happy to be in in the discussion I'd be the I'd be the paper straw in that you would float if I could be so we're gonna have a good time today George is gonna help you with budgeting

the money, saving the money, getting out of debt, investing money, and I'm going to help you making more money. That's my play here at the Ramsey Show. So we do that together and we have a lot of fun. You ready to go, friend? I'm pumped. All right, let's do this. Christina starts us off in San Bernardino. One of my favorite places to stay. Not stay, George, but to say San Bernardino. That's a fun, fun place. Let's get to Christina.

How can we help today? Hi, thank you for taking my call. You bet. What's going on? So my husband and I are on baby step two. We've paid off $39,000 since November, which we're very proud of. You should be. Congratulations.

You got the moat. Thank you. Thank you. However, we still have $126,000 of student loan debt, a car loan, and we have not yet purchased our first home. And I'm almost 40, and I recently listened to a show that addressed retirement, and I'm feeling so discouraged that we'll never catch up since we're starting this journey so late. We gross 200,000 a year, and my question is, is it still possible for us to become Baby Step Millionaires? Yes, let's get that out of the way.

Now George is gonna tell you how. He's gonna show you the specifics, but let's start there. Because if you don't believe it, Christina, you're not gonna receive it, you feel me? Ooh, that was good. Yes. Put that on a Stitch pillow or something.

There it is. I'm already in the Hallmark category and we've only been on the show three minutes. This is unbelievable. I should probably quit while I'm ahead. George, explain it now. She believes it. Yeah, so we can walk through,

if you follow the Ramsey plan, here's what would happen. So you guys have crushed it, paying off 39K already. How much longer until you're completely debt-free if you're doing this with gazelle intensity? We're hoping 18 to 24 months. Okay, so another 18 months you'll be debt-free. That'll put you at still about 40 years old? Well, I turned 40 in June.

Woo, okay, let's say 41 once you have the emergency fund. How's that? Okay. If you started investing and you guys make $200,000, which is incredible, that's a great income, that would mean you're investing $30,000 a year once you're in Baby Step 4. Are you tracking with me?

Okay. So I'm just trying to show you some math to show you what would happen. That's $2,500 a month, household going into retirement accounts. We're gonna assume a 10% return. You have nothing in retirement right now? Oh, I have a teacher, so I do have a pension that has about $89,000 in it.

All right. That's not nothing. And I'm going to try to plug in and see if we can get it on the screen for you just to help our viewers out there. Okay, yeah. So George is plugging in new 10,000. So I'm just showing you 42 to 67, right? Let's say you work a little bit longer to catch up. That would still give you $3.3 million in that one account. There we go.

Will that do? Christina, how does she do? I feel like she just won a game show. There it is on the screen for those of you watching on YouTube. And let's say even by 62. So that's a 20 year investment period. If you even, I'm calculating from zero, Christina.

Zero dollars in any retirement account, 42 to 62, 2,500 bucks a month. That means you guys never get a raise over 20 years, which we all know is not gonna be the case. You're still gonna have 1.9 million. Wow. And guess what? Only 30% of that was your contribution.

The other 70% is just compound growth. Now we can all look back and go, oh my gosh, if I had started at 25, I could, listen, the past is the past. Don't shoot all over yourself. That's right. Don't do it. Don't do it, lady on the front row.

Should have invested sooner. Lady on the front row is like, what did he say? We should have avoided this debt. I get it. Don't do it, don't do it. But listen, at this speed and intensity in which you're going, I have no fear that you guys are gonna be multimillionaires

and retire with dignity, and then you can work because you want to and not because you have to. Yeah. Thank you so much. So Christina, we're gonna flip the question on you. Are you ready to answer it? Yes.

Okay, Christina, is it too late for you and your husband to retire with dignity and lots of freedom? It is not too late. Come on. There it is. Come on. Gosh, I love when a calculator can give you hope. It is not too late. Come on. There it is. Come on. Gosh, I love when a calculator can give you hope. It does. That's special right there.

And you're good at it. It's Christina. You guys worked your tail off to make $200,000 a year, get out of this debt. And the good news is once you're out of this debt, you will never go back. So now this was the win that you needed in your sales. It was. I know. Now, this was the win that you needed in your sales.

It was. I know. I've been feeling, with every celebration, I feel so much just shame and guilt and worry. So this was what I needed. Thank you so much. Here's your phrase, okay? Here's your phrase for today and the rest of this weekend. I want you to just say it to yourself or say it out loud if you don't mind being cheesy like me.

You ready? Okay, yes. There is no shame in my game say it There it is George By the way James I got a point out I want to I want to brag on my colleague here for a second I like when you throw the investment calculator on the screen for people that are watching via YouTube I think you could be the John King of the Ram for people that are watching via YouTube. I think you could be the John King of the Ramsey show. Wow, that's high praise. I want to get you out of that chair, James. I want to see, can we get him on a board behind me where he's like, he's like, now let's go over here. I'd like to say, I think you could do,

let's see what's going on in this County over here. If we zoom in, yeah. And I'm talking about, for people to know what I'm talking about real quick reference that's John King on CNN. He really made the election night screen where he does the touch screen and he goes in and he goes back and forth and now every network has their own John King. But I think he's the OG and it's not a political statement for those of you that hate the network that he's on. You gotta qualify everything these days. I know. But he's good on that big board. No, that's true true. I wanna see, we gotta figure out how to do that. Well, the thing is- I'll brainstorm next time we have a meeting with James.

I think the visual helps to actually just see it in front of your eyes and go, here's the math that will overcome your emotion that you're feeling right now. All right, let's do a quick, cause a lot of people are watching and listening right now that absolutely, they resonate with Christine and her husband.

So I wanna go back to the start of that call and I want you to break down the psychology there of what really happened in those few minutes with her. Well you heard her say it at the end, at the root of all this was just shame and guilt. It was oh my gosh look at the mess we're in we're never gonna be able to retire, of course you screwed it up, you're almost 40 and you still have your life together, you don't own a home. You should be ashamed of yourself." And then we go, let's look at the reality of what we're doing. Do you hear her reaction though?

Yeah, that's how she started it. It sounded like she won the Price is Right. She literally, yes, it was a high pitched reaction, which was really guttural in the sense of, what? I mean, it was almost one of those deals. I might as well have given her a Bil Hill dinette set at that point. And that's the excitement she had. I loved it. Nice reference on the broil Hill dinette set. It lives rent free in my head. But the reality is I don't think people realize how quickly and how effectively

compound interest works. And you just demonstrated it. And the debt snowball. I mean, you heard it 18 to 24 months is the average for people to get out of debt using the Ramsey it. In the debt snowball. I mean, you heard it. 18 to 24 months is the average for people to get out of debt using the Ramsey plan, using the debt snowball. Two years is going to happen. 24 months of hustle for a lifetime of freedom. For 24 years of freedom. Wow.

Are you willing to trade that? That's the question. Good question. It's not easy. Most people would rather live in mediocrity for 24 years. Wow. Not Christina. Oh, I love it.

Great way to start the show today. Okay, we gotta take a quick break. During the break, George and I will talk about our favorite dinette sets, and then we'll be back to take more of your calls. Roy Hiller-Prest. This is The Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving

families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life insurance world like that whole life crap posing as an investment opportunity. What you need is level term life insurance usually 10 to 12 times your income which is the smartest most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander

Insurance are all about. They shop the term life companies to find you the best options and they've been around for over 95 years so you know they'll be there when you need them. Zander is the real deal and that's why they've handled all my personal insurance for over 25 years. I trust them and you can too Visit zander.com for instant online quotes or for a more personal touch give them a call at 800 356 42 82 The Ramsey show continues thrilled to have you with us. I'm Ken Coleman My pal George camel is with me today. It's the law firm of Coleman and Camel. You've

seen us on bus stop benches. That's exactly right. It's 888255225 is the phone number. Kyle is up next in Kansas City, Missouri. Kyle, how can we help today? Hey Ken and George. Hey, thanks so much for taking my call. It's an honor to speak with both of you. So thank you. you well the honors are sir what's happening yeah i'd i'd get quick question for you guys i i have one credit card i have no debt except my mortgage at this point i have heard you guys obviously just evangelize cutting up the use of

cutting up these credit cards i'd just some nervous that if i do it you know what like will the lender be after me? What if I have to refinance in the future? Like I just, for some reason, the thought of cutting up my credit card here is making me nervous. You guys have sold me on the arguments of cutting it up. I just get them just calling for last minute reassurance. All right. Well, this is great. You couldn't come to a better place. I'm going to warn you.

When you cut up your credit card with scissors, there is an automatic beacon that is sent to the credit card companies. And a very burly gentleman with large shoulders will call you. He will speak to you in very unfriendly tones. He will threaten you. And it's a thing. So you got to be willing to deal with that. But if you're willing to deal with that, then it's fine.

Okay. Kyle, I'm joking. Kyle, I tried really hard to be sarcastic. Did you catch that at all? Did it miss the mark? The studio audience got it. I'm generally scared over here, man. Oh, I'm sorry. So here's the deal. He really thought dog the bounty hunter and the SWAT team was about to show up. I was kind of trying. No so here's the deal. In all seriousness nothing's going to happen. In fact the only thing that will happen is that you will feel completely free now because there's something about cutting

credit cards and I don't know if you know this, but for years, Dave would have people cut their credit cards on the air. People would send Dave artwork. In this building to this day, we have artwork of framed credit cards. In fact, we just took a picture with a guy who had a credit card cut up in multiple pieces during the last commercial break and framed it. So nothing is going to happen to you, Kyle. You can close the account completely on top of cutting it up. You don't have a balance on it, correct? No, no balance. And you're not gonna need it.

Tell him why he's never gonna need it. Yeah, you're not gonna need it. Your mortgage will continue to keep up a healthy score. And so if you ever needed to refinance or do anything else, you can do that just fine. Even once you pay it off the house, without a credit score, you're gonna be fine. And so either way,

there's no reason to keep around this card. I know it feels like a security blanket at this point. You've had it so long and credit card companies are so good at marketing to you to where you think, I need them. They're doing me a solid by being there for me and my time of need. But Kyle, you don't need them anymore.

You have money. And by the way, they're not even gonna know that you cut it either. I think you are scared. I I love your honesty. So here's what we're gonna do We're gonna give you the opportunity to cut this card right now on the whole you have it with you. Do you have some scissors? I I don't have any scissors next to me. No, where are you? Now I'm in my car. That's unfortunate. Is it Is it like titanium or can you bend it and break it? Maybe I can rip it with my teeth. I don't know.

I gotta say, America wants to hear that. If you can rip it with your teeth and get the cell phone right up to the mouth, you have an emergency fund to cover the dental bill after that one? You know, I do have an emergency fund, thanks to you guys. So thanks again for that. Way to go. That's why you don't need these credit card companies. Yeah.

And so I'd cut it up, get rid of the account and move on with your life. You can do something fun with it. You can shoot it with a gun. We've had people do that. We've had people, I think somebody put it once in a wood chipper. That's what I'm talking about.

Oh, that was fun. I do remember that. Very Fargo. But you need to have fun with this because the credit card company is not gonna know. They're not gonna know. There's no impulse that's sent. I was joking.

It was a horrible joke. What company is it? Can I ask? He really believed that. Did you hear him? He was like, oh man, I don't want to tell. Yeah, I have it with Capital One. Oh perfect.

All right, I'll let him know that Kyle. I'll tell you who gets an email. It's Jennifer Garner. She's very sweet. She's gonna lose it. She's gonna be very upset in Hollywood. Somewhere in Hollywood, she's gonna get a little email. Oh, I love it.

Hey, Ken and George, can I ask one more quick question while I have you? Sure. Hold on a second, will we allow it? I'll allow it. All right, George allows it. Go ahead. If I have to refinance,

do I just need to go through a different lender to manual underwrite, like you guys say? Only if you had paid off the mortgage, but in that case, you wouldn't have nothing to refinance. Okay. So your mortgage is a debt. And so it's reported on your credit report. It will create a credit score. It will keep that credit score until you pay off the mortgage. And then six to 12 months later, after you pay off the mortgage, your credit score will disappear for good. And you won't need debt anymore. So there's the good news. There it is. That was a fun call. I enjoyed that. Now you and I are under the gun. We're gonna have that big burly guy calling us for what we just told you. Yeah, I can't wait to call

Capital One. Kyle told me he'd cut up his card. We should rat him out. Nark. That's what we'll do. Let's go to Orlando, Florida, the home of the happiest place on earth apparently. Ella is there. Ella, how can we help? Hey, good morning George, thanks for taking the call. You bet, what's up? So I recently got an offer for a new vault by company. It's a promotion and an internal transfer, but it's a large bump in pay and I wanna know if it's greedy or not to counter offer

since they can see my salary. So make sure I understood you. You just got a really nice offer. It's an internal transfer, same company. Yes, correct. And it's a really nice bump. How much of a bump for you? So I'm at 65 right now a year

and the offer was 84, so 19 more a year. And what are you thinking to counter and why? I'm thinking of countering for 90,000 because I've talked to people in that role and that's kind of where they've come in around. The only difference is that I'm about a year away from getting my engineering degree where these people already have their degree.

All right, well there's the piece of information that I needed. I wanna see what George says. Because you don't have the engineering degree that these other people have that are at that higher rate, I don't think I would counter here. We're also talking about $6,000 and I've got my... $500. The ultimate expert of amortization beside me here.

You're the ambassador of amortization. I thought the title anyone is going to gas the hell I want to die on, but I appreciate that. That's a nice title for somebody as nerdy as you are. You have a segment called Talk Nerdy to Me. That's true. And all of a sudden you're too cool for ambassador of amortization. You're right. All right. So 500 bucks in gross pay. It's 500 bucks. So George, I say I would not counter, and Ella, I love your confidence, but again you got to understand the risk of why I think that's not so wise. It's one thing if you say, I've got the engineering degree, and you cite that in your counter. You go, would you be willing to get me to 90? Here's why. I've done the market research, and now you got some proof.

All you have to stand on is, I'm a year out. And I just, you don't want to counter when you don't have a good case. And in this situation, George, I don't think she has a good case. What do you think? I think the employers would probably come back to her and say, well, here's why 90 was the starting salary over here because they have more experience

with this degree, more education. So the question, Ella, is does the employer know that these salaries are public? Are these out there or is this like I talk to my coworkers? It's public on like the internal site. Okay, so if this is a company wide thing that salaries are public, I think you have more right to just bring it up and say,

hey, when I was doing research, I found on their company site, here's the listed salaries. I'm curious what the gap is and what is the path to growth to get there? I think that's a much more, it's a less combative stance versus here's my counter. Now, but I like that, George. But I would only add to that, Ella,

I think I like that a lot, actually, George. But I would add in there, is there a path for growth to that? Because I'm a year out from having the engineering degree. Would that then put me in line to get me up to 90? Just getting clarity for what it would take. That's a very different posture, because you're asking a very thoughtful question you're not countering.

So I actually am going to go my yes, I'm going to yes and myself and say that I like how George came in there. I think that's the tactic. Because it at least opens the conversation. They realize they know where your head is at. You've done the market research. It's valid. I think that's a really good setup. Congratulations. Yeah, let's celebrate that. You got to be celebrating the big bump. I am. I am. All right. Really

proud of you. That's super exciting stuff. Don't spend it all. George lifestyle creep is real. There it is. You got George sitting on your shoulder. I'm watching. I'm always watching. Always watching. A little George on your shoulder. A little George. You get a little, she can get a little treat. Just don't go crazy. That's exactly right. All right.

Coming up, we got a little break. And during the break, George and I are going to talk about his favorite gluten-free treats. That could take a while. And then we'll be back. This is The Ramsey show. As an investor and a person of faith, when your mutual funds and ETFs put your money into the dark side, you might feel a disturbance. Well, good news. Timothy Plan offers investments for people who want to be intentional

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know it's amazing when you think about this show and the footprint it has around the world and here in the United States over 30 years the show has been going and it started on a card table. Before there was a show there was a business idea that Dave Ramsey had and he and Sharon's living room and now it is a business north of 250 million dollars and as we've said decades of worldwide influence. And so this is really fun because Dave has not written a book in a while, but his new book is now available to pre-order.

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Build a Business You Love by Dave Ramsey. All right, Jeff is up in Atlanta, Georgia. Jeff, how can we help today? Hello, so my question is, first of all, thanks for having me on the show. You bet. I have a question that I don't think has been asked before, but so I want to, I can't invest in the S&P 500

and other similar ETFs because of religion reasons, so should I create my own diversified portfolio? Okay, I have questions. Okay. What is the, and I don't want to, I want to be very sensitive in how I ask this question, what is the spiritual or religious, and actually it's not spiritual, I'm gonna call it, what is the religious reason that you cannot invest in the S&P 500? So the reason is I'm Muslim and I'm not allowed to invest in any companies that involve alcohol,

gambling, adult entertainment, all those things. Totally caught up now, okay, because I had not heard that before, but that makes, I get it. So tell us what you're thinking. I want George to be able to hear this. What would be your diversified stock strategy? So first I found like a,

I found another ETF that pretty much, it's like pulls from the S&P 500, but excludes the company that do the gambling and alcohol and all that stuff. But the problem with that is the expense ratio is so much more higher than it would be for investing in an S&P 500. Is this in a retirement account?

No, this is personal. Are you investing in retirement currently? Yes, but through work like 401k and stuff like that. Okay, so those funds likely have companies that are against your beliefs, correct? Yes. But you're just, it's the options that you have. Yes.

And are you investing 15% into those retirement accounts? And are you investing 15% into those retirement accounts? I believe it's 6% match, and I'm doing 100% of whatever 6% is. Okay. I would encourage you to use those tax advantaged accounts first. It sounds like you don't need to be investing beyond retirement right now,

unless that 15% gets you maxing out every tax advantaged account where you need to go to these non-retirement taxable brokerage accounts. Is that the case? I don't understand what you mean by that. So what is your income? So I make about 80k before bonus. Okay and you have a company 401k?

Yes. Is there a Roth version of that that they offer? Yes. I put in, I contributed one time but then I stopped. Okay. But I really wanted to take advantage of like the tax deduction. Okay. Well the thing is with the Roth account, you're just using after tax money.

You don't get the deduction, but then it's gonna grow tax free and you'll withdraw it tax free in retirement. And especially with your income, I would recommend you go with the Roth option. It's not worth it for the tax deduction when you see the growth and the tax free withdrawals later on.

So in that regard, here's my question to you. Why is it okay to invest in the 401k in these funds, but not outside of the 401k? What's the difference? Well, really the 401k is something that I was contributing to already unknowingly. And I just realized how much I had in it, right? I still haven't made a decision

whether I wanna stop contributing and like go full on the other direction, but right now I know since it's my only option at work and it was already automatically being contributed, that's not something that would be hold against me religiously. Yeah, and I have looked into this. There are Halal investing funds that are compliant. Have you looked into those? Do they all have high expense ratios?

Yes, they start at like 2.5 or 2.0, it's really high. Man, that is brutal. Well, here's the deal. There's going to have to be a compromise here. If this is part of your beliefs and this is something you feel really strongly about, you're just gonna have to pay that expense ratio for the pleasure of following your values.

Well, do you think if I decided pretty much to actively, so I create like my own portfolio that operates as a passive ETF kind of thing, right? I only pull from the companies that I do align with from the S&P 500, NASDAQ and all that. I mean, you're talking about investing in 400 something different companies likely. Well, I would only pick-

That's gonna get real complicated, real fast. I would only pick enough to have my portfolio diversified. I wouldn't go all the way into like, presenting those 1% companies and stuff like that. I would worry about the top 10 and then the ones that come underneath. But like when it gets to like that company that's like 0.5% of the SMT 500,

I won't worry too much about it. I mean, you can do that. I still think the tax advantage of these retirement accounts outweighs all of this to where I would just choose the best options you have in the 401k and it's the options you have. You have no control over that. And I would stick to those retirement accounts

for the foreseeable future until you get to the point where you're maxing out your retirement accounts or you paid off your house and you wanna increase your investing. But I wouldn't just mess with a taxable brokerage account and picking single stocks. I just wouldn't personally do it. mess with a taxable brokerage account and picking single stocks.

I just wouldn't personally do it. Even if I'm picking the stocks, not based on what I believe are best good investments, but based on what the S&P 500 is picking up. I'm telling you you can do that. It's gonna be a really complicated portfolio and get messy real quick when you're trying to auto invest in 400,

whatever the top companies are. And the less companies you have, the less diversified you are, which adds a lot of risk. So if you said, hey man, I'm gonna go in Tesla because it's compliant. Have you seen Tesla lately? This is why you wanna be diversified amongst hundreds and hundreds of companies.

And so I don't know, I would talk to other folks who are in the same boat as you, that are part of your faith community and find out what the options are and then just choose the best that you can. That's all you can do. And I hope that- Or you gotta pay the additional-

Or pay the extra, you know, for the normal expense ratio is under 1%, you're paying two and a half. Look, it's basically a tax you're paying to follow your religious beliefs. Jeff, I've been listening in here, George, I think has given you terrific advice here and you keep pushing back.

You keep, you know, and it's like, look, if you want to take that on, George think that that's a lot and I would assume because it's so much, it also has a lot of risk involved with it. That's what I'm hearing from you. So my pushback on this to you, Jeff, is you can't have your cake and eat it too is an old phrase and I think it applies here. You know, I really respect anybody that that lives their life on a set of religious beliefs and what that really is about conviction. But in order to live a life of conviction, there will have to be sacrifice. There is no, I don't

care what religion it is, you could take the entire world's religion and all of it requires sacrifice to follow it. So you're already violating your religious beliefs and your 401k, those are your words, not ours. So as I listen to this, listen to George, I mean, I think I would take those other funds. What'd you call it? The...

Oh, the Halal compliant funds. I think that's the sacrifice you have to George. I mean, I think I would take those other funds. What'd you call it? The, the, Oh, the Halal compliant funds. I think that's the sacrifice you have to make. And they're going to be more expensive because they're actively managed. But that's the sacrifice. Exactly. And so that's just my take, Jeff, because I'm actually honoring what you're saying. And I think you got to follow that fully or not at all. I don't think there's a midway there. This is the Ramsey show.

All right, Dave, you have some strong opinions. Or not at all. I don't think there's a midway there. This is the Ramsey Show. All right, Dave, you have some strong opinions. Possibly, yeah. I think so. Okay, because you really prefer credit unions over big banks. So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. And what's more important than that though is the fact that the customer is the owner changes the spirit on the credit

union. So I find very few credit unions that aren't very customer centric. Yes. Well, and I think we have found one that is incredible and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer. You know, that's why we're partnering with them because they've got a scope to be able to handle the Ramsey audience and they're the right kind of people with the right kind of values. And they've done a really, really good job

with customer service and the deals that they're offering, the Ramsey Tribe is incredible. Yeah, absolutely. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account. And I'm not kidding, it took less than five minutes. It was so user friendly, like the step-by-step approach was unbelievable.

And then the next day my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience and I so, so appreciate that. So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds,

again, they make it so easy. Plus anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app, and you'll have free access to over 33,000 ATMs. Hey, you guys know how much I hate banks in general, and so for me to do this is a big deal. Talk to our friends at Fair Wins and check out the combined checking and savings bundle that they created just for the Ramsey tribe.

You guys, it's incredible. Yeah, you guys, it's so easy to join Fair Wins no matter where you live. So go to fairwins.org slash Ramsey to learn more. That's F-A-I-R-W-I-N-D-S dot org slash Ramsey to learn more. That's f-a-i-r-w-i-n-d-s dot org slash Ramsey. Welcome back to The Ramsey Show. Alongside George Kamel, I'm Ken Coleman. So excited to have you with us. Great studio audience today. It's packed on this Friday. I gotta tell you, if you ever want to get to the Nashville area, we're in a suburb, Franklin, Tennessee, you can come watch the show, three hours, and we've got this just beautiful,

beautiful studio, free coffee, cold beverages, baked goods. I mean, it's just fantastic. We love meeting folks. So great studio audience today. Big thanks to them. All right, it's time for our question of the day here on the Ramsey Show. It's brought to you by YREFY with YREFY. You can take control of your defaulted private student loans with a plan that works with your monthly budget. Visit yrefy.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey. It may not be available in all states. Today's question comes from Nate in Colorado. How do I break down annual

slash semi-annual insurance payments like car insurance into a monthly budget so I'm ready when the bill comes due? Oh, love this question. And it all comes down to this magical term, sinking fund. Oh, I love when you talk nerdy, George. I feel like this was an accidental talk nerdy to me. It's a bonus one for Kevin. It's a bonus talk nerdy segment. So the idea here, it's just a strategic way to save money by setting aside a little bit each month so that you're ready when the time come. So for easy numbers, Ken, let's say there's an annual

insurance bill for $1,200. Okay, 1,200 bucks. That's what I owe. Every January. That's what I owe, perfect. Every year. Every January, 1,200 bucks comes out of your account. Okay.

How do you budget for this? It's random. Right. Well, you can create a sinking fund inside of every dollar and mark it as a sinking fund and say, I'm going to set aside a hundred dollars in every month's budget. Goes right into that. Into the sinking fund. I love it. Now, this is digital on every dollar. So you actually have to set aside this money in your checking account or in a savings account. Now, how do I not screw that up? Because you know, I struggle with details. So how do I do this? That's the thing.

For some people it's better if they transfer that money to a savings account and then set a reminder to transfer it back once January hits so they have the $1,200 ready. I feel like that's a good move for me. Would you agree? Yes. You know me well. Some people like to just stack it up in their checking account. So $100 becomes $200, becomes $300.

Come January we're sitting at $1,200. It's just there. But again, you have to know that this is allocated for that piece of- What do you do? Well, I know that you told me what I should do. What do you do? I'm a fan of the savings account.

Cause I also like to have that money grow a little bit for me with some interest. And so I'll transfer it to savings, but I'm a nerd when it comes to reminders. And every dollar also has reminders you can set up inside of here. So I'll tell you- So come next January, I get a little alert.

Yes. So I have mine under insurance and taxes in my budget, and I have them all listed as sinking funds. You can see right, I'm showing Ken. This is very, very exciting. I have never felt so VIP in my life. So this is- I just looked inside George's EveryDollar.

It's homeowners insurance. Wow. Which- You really are a nerd. I have auto and umbrella on one policy. I have property taxes. Yeah. Then I have my wife's life insurance policy

and my life insurance policy. Yeah. Every single one of those has its own line item and there's whatever it is, I divide it out. Yeah. And then I have that as a sinking fund. What's that, is that, did I see, is that gifts for Ken? Did I see that?

That actually has a whole category. Okay, good, okay. Just hangouts with Ken, gifts for Ken. It's a little awkward that I saw that, but boy, am I excited. Well, hope you like a new pickleball paddle. I know you're wearing yours out. Now you're speaking my love language.

Pickleball equipment, I'm in. There you go. All right, very good question, by the way. We have a great article on this, so I'm gonna make sure that it is linked in the show notes. So hit the description and show notes of today's episode. And there's a great article on our website from Rachel Cruz called, What is a Sinking Fund

and How Do You Create One? It'll walk you through all of this. And I think it's really gonna help everyone out there struggling with these things that aren't- Oh look at that, it was on the screen there. Oh that was my screen, was that? Yeah. Oh look at that. Good timing, guys.

So George is actually showing the article right there. I'm telling you- I like a little show and tell. I'm telling you, I'm trying to make you the John King of the Ramsey Show. It's like a, it's a crusade for me now. I love when you do it. It wasn't a life goal, but I aspire to it now. I think you've got the gift.

I do. All right, good question there, really fun. By the way, I want to make a quick mention. Anytime we mention any resource, article, a product, anything on the show, it is always linked in the show notes. So you can come back to it. That's a huge thing for me. Treasure trove.

Some call it a gateway drug to financial freedom. That's what happens in the show notes. Wow, I love that. That feels very Friday to me. We're talking gateway drugs to financial freedom. Hello. All right, Jennifer's up next in Buffalo. Jennifer, how can we help?

Hi guys. Thank you so much for having me. You bet. Thank you so much for what you do. Thank you. My husband and I have quite high credit card debt. And we were wondering if we should do a home equity loan to pay this credit card debt off.

Because of the lower interest rate? Yes, that's the main thing that I hear you say, don't borrow to pay, you know, credit cards. And I'm just, I'm wondering if that is alright. This is your moment. You got George right here, George. Oh, boy. What are you gonna say, George? Well, I gotta wait. I got indigestion after just hearing that. Survey says, we needed Tums. It's a no for me. Oh, okay. It's a no for me.

And here's why. It's partially the math on it of like, it sounds crazy, cause it is crazy that I'm gonna use debt to pay off other debt to go into a different kind of debt and hopefully pay that debt off. And if I don't, I'll just get a consolidation loan to pay off the HELAW.

Do you see where this is going? This is where most people find themselves, just playing a shell game of debt. Okay. And instead, what I like to do, use that interest rate to make you so angry that you pay off that credit card so fast that it doesn't know what hit it

and you never go into debt again. Okay. So how much is left on the credit card debt? $60,000 across several credit cards. Okay, and what did you use that money on? It's been over several years, so I'm not even sure I would say I just that maybe vacation maybe Just places that we wouldn't normally use our bank card because we're nervous About the security.

Okay, you say we, is there a husband who's an accomplice to these financial crimes? Yeah, there is. Good, good, good. Wow, financial crimes. I like to make it really add some drama to it. George is skippy. Well, you guys, I just feel like you guys

worked too hard to be this broke to go 60 grand in credit card debt instead of just saving up and paying for things you can afford. What's your combined income? $260,000. Oh, listen, I got to tell you something, Jennifer. Several people in our live studio audience were a little put out by that information. They were like, come on, Jennifer.

This is the next question America's asking. Why does someone making $260,000 needing to fund their life on a credit card? Where is your actual income going? Oh boy. So we do have a little bit of money in the bank, but this is a new, so we made probably $120,000 maybe last year, and about the same the year before. So this is a newer-

You've over doubled your income. Okay, this is great. This is great. Think about this. Great. You guys could be debt-. Okay, this is great. This is great. Think about this. This is great. You guys could be debt-free before the year's over. You're now bringing home what? 15, $16,000 a month?

She doesn't believe you, George. Tell her hell. I can hear it. I can hear the disbelief. Okay, we are currently in March, 2025 year of our Lord. Agree? Agree. Okay, so let's say nine months.

60,000 divided by nine months is 6,600 bucks. I love when you do, man. So 6,600 bucks out of your 16 needs to go to this debt to get done by December 31st. You with me? Okay, I'm with you. So now here's the deal. Can you guys live off $10,000 a month?

Can you? I hope so. I hope you guys live off $10,000 a month? Whew. Can you? I hope so. I hope you guys can scrape by. Well, that's why, forget your mind. Don't rely on the human mind. It's fragile and feeble. The mind can tell you some crazy things. Not since the fall of man have we been able to trust the mind.

And so here's what you do. Do a budget with your husband and say, this is what our paychecks came in as. These are all of our expenses. And if we follow this plan, we're gonna have seven, eight, $9,000 we can throw at this credit card debt. Because here's the truth,

I think you guys can do better than end of the year. I think six months this thing could be done. Whoa, slow down, George. Jennifer's gonna faint. 10 grand a month for six months. Get angry and aggressive about it. Don't do a HELOC to try to move this over or to give yourself some comfort to slow down your progress.

Get so angry at the 25% APR on these cards to where you go every single cent is gonna go to these credit cards. Are you guys angry yet? I'm angry for you. We are angry. I'm angry for this. I've never seen him this angry, Jennifer.

I am livid. I'm not kidding you. That's about as high test as George gets, all right? The guy is, he's just very chill. He's very angry. I could punch a hole in some soft drywall right now. All right, you're starting to worry me. I feel like I'm pouring fuel on the flame here.

Relax a little bit. All right, I apologize. But Jennifer, you know what to do. You guys got this. You can do this, Jennifer. Get aggressive. No more debt. Debt is not the answer to your problems. You guys got this. You can do this, Jennifer. Get aggressive. No more debt. Debt is not the answer to your problems. You are the answer.

Oh, wow. Thank you guys so much. You bet. Well, great hour. Uh, George, I gotta say you were on fire. The nitro cold brew hit at just the right moment. Is that what it is? I think so. Okay. Do you have any kind of prescription anxiety meds that you take? Just nitro cold brew. That's all I need. Let's get another cold brew in here. Somebody. I don't feel safe. This is The Ramsey Show. You spent years trying to get everything just right for your family. Now you need an easy way to make sure your important financial documents are as organized as the rest of your house.

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to have a conversation about your money, your work and your relationships. I'm Ken Coleman, George Campbell is with me. The phone number to jump in is triple eight, eight two five, five two two five, triple eight, eight two five, five two two five. George, you ready to go another hour? You got your V8, cold brew how'd you know

I mix them together you did it's it's quite a concoction what it means is great financial advice I gotta tell you that from the best beard in all financial shows worth it for five bucks on Venmo to get Ken to say that about me Roberts gonna start us off this hour in Auburn Robert how can we help? I'm doing great. I'm head just spinning a little bit. I woke up this morning and the car wasn't in my parking spot. What? We could guess, yes. What? No. I felt behind on pavement. Hold on,

Robert. Hold on, Robert. Look clearly into your phone. We're having a hard time hearing you, like maybe you're muffled. Let's try a different angle. I was about to say, can you hear me now? That's a little bit better. So you woke up this morning and you look outside and the car is not there. Yes. Was this a shock to you? Was this shocking or did you expect this? It was very shocking.

So there was zero communication beforehand that, hey, you on payments you don't catch up here's what's gonna happen. Yeah they didn't tell me that I was behind but I knew I was behind for sure but I didn't know they were just gonna come and take it. How long have you been behind on payments? They said about 94 days. Okay well I mean they can come take your car at any time once your loan becomes delinquent so it's's not a giant shock, if I'm going to be honest, that you stop making payments. You don't own the car. They do. And so the good news is this just happened today? Yes. Okay. So there's still some moves you can make to get this back, but we got to make

sure that you have the money to do it. It sounds like you are beyond paycheck to paycheck. How much money do you have? Right now, currently? Yes. My 500. Okay. Now, was there any personal items in the car? For sure, yes. Okay. You can get your personal property back and they can't charge you for recovering your

stuff. Okay. So, do you know where the car went? I called the finance company that I got the loan with and they told me, they gave me the number and the location I could pick it up. Okay. And then they had a request for me and so I can get those items.

Okay, so the next step, other than getting your items, if you can do this, this is the best move, is to reinstate or pay off the loan. Obviously you can't pay off the loan. But to reinstate it, you would have to pay the past due amount on the car plus any fees. Which would be around 3,000. Okay, so now we know it's $3,000.

And here's the deal, you usually have about 10 to 15 days to do this, to catch up. Otherwise, they're gonna sell your car at auction to get what they can for it, and then you'll owe the difference. Okay. What was left on the loan? 16 bucks.

Okay. And if they sell it at auction, it's not gonna be market value, and so you likely will have a pretty big gap that you'll owe. So I'd rather you try to get this thing reinstated in the next 15 days, but that means you gotta come up with another 2,500 bucks in 10 days

Sounds good does it How much do you make in a week what do you what's doable look like how are we gonna come up with that? Can you share that I'd like to know? No, I'm just being optimistic. I mean Make $25 hour, you know. Can you work overtime? Can you do side gigs? I mean, this is like, we won't see the bed. We're gonna be at work so much. Speaking of the bed, I might sell the bed. Yeah, can you sell anything in your life? I'm sure I can. If things are in the trunk, the I-Devs can get rid of it. Okay, and I'm talking, I'm calling family members, cousins, uncles.

You got some patio furniture you want to get rid of? I'll sell it. I'd be flipping stuff. I can't hear you at all, Robert. You sound like you're inside of a roll of toilet paper to me. It's what it sounds like. No, my fiance won't let me sell the furniture. Uh oh, there's a fiance involved. What does your fiance think about all this? This would honestly give me some hesitation as my provider gets his transportation taken away. She can't be happy right now. Not at all. She's not happy. She's kind of never been in this situation either before, so it's the first of both of us. Is she broke too? You say what happened? Is she broke too? Not as what happened? Is she broke too?

Not as much as me not right now. All right, but I don't mean this in the way It's gonna sound but we got to forget about her for a moment and what she owns We're talking about what you own and what you can sell because you got to come up with more than 2,500 because the 500 you got isn't gonna stretch very far for what else is going on in your life. I got a feeling Is there another option besides reinstating this car? No. That's it. I mean you still owe the money. My guess is your credit shot and so if you went to a local credit union and said hey I need 2,500 bucks to reinstate my my repo I don't know that they'd give it to you. That would be a last-ditch effort I would try. What about a cash card? No. What do you mean? My car from cash was $1000.

Well that doesn't fix your repo problem. You're going to owe all of this money unless you get the car back, get current on payments, and then you're at least, the ball's in your court, you could sell it private party and get way more for it and get out from under it. But my guess is you're underwater on this car. You owe $16. What is the car worth? $4000.

There you go. Oh boy. Therein lies the problem, my friend. I see what you're saying. You're just trying to, yeah, you're still gonna be stuck with this debt. But again, even if we play this out with your logic and your question, you still don't have any cash. If you buy a car for $500, that's like Fred Flintstone's car.

All right? You know what I'm saying? Like that's not a car. You're better off getting a bicycle. Right. How are you getting to and from work? Using my car from early. I know but starting today. But you don't have a car. Right. But we're on spring break so I have like four days until I go back to work. Well there's your next thing. You got four days off? You don't have a spring break. You need to be working today.

No, PTO, we put in vacation and PTO for these days, but yeah. I'd cash out that PTO. Yeah, I would too. I wouldn't be taking any vacation time. That's the last thing you need to be doing right now. I mean, you need cash. You don't need to be breaking.

There are no breaks for you. I would be door to door offering to mow lawns, pick up leaves. I'd be doing anything I could to make $2,500 in 10 days. That's $250 a day. Can you do that? $25 an hour, 10 hours a day. That's what it's going to take to get the car.

What was the payment on the car? $600. Oh. And what are you make in every month? About $2400 each every two weeks, about $4,800, $4,200 around there. $4,200 a month? Yes. And what are your monthly bills to cover all your expenses, including the minimum payments

on your debts? All combined, probably a good $1,, besides the cost, around $2000. So you're telling me you make $4200 and you only have $2000 in bills. That means there should be two grand left over every month. How did you get behind on payments? God bless you. A budget probably is missing. A lot of things. Yeah, but where did that money go? What were you spending it on? He doesn't know, George.

Yeah, I was going to say, it's Mr. Lane's thing, everything is- I'll tell you how we find out. Go look at your bank statement. It's gonna give you a little book about why you're broke. It's gonna tell you exactly where your money went. Oh, Robert, man, this is not gonna be fun. It's doable.

It is, but you gotta work- It's a Hail Mary. You gotta work like crazy. And we told you that for two minutes, and you hit us with, I'm on a four day spring break. No, bro, this is a, you gotta change your whole intensity right now. You are working like crazy.

You are selling everything. I'm not kidding when I call Uncle Larry and go, Uncle Larry, you got any patio furniture you don't want? I might sell her engagement ring to get out of this, to be honest. We'll get her another one later. Whoa, George, with the heat seeking missile. I'm just saying, it's what I would do.

You know what? You actually would do it. And if she loved me, she'd go, all right, this is what we got to do. Oh boy. He's got no car. And if you keep this up, George, he's going to have no fiance. This is the Ramsey Show. Hey, you guys, health insurance costs are only moving one way, and that way isn't down.

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have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling, they're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at RamseySolutions.com. That's RamseySolutions.com. Welcome back to the Ramsey Show. I'm Ken Cohen, George Campbell is with me. The phone number for you, America is triple eight,

eight two five, five two two five, triple eight, eight two five, five two two five. So, you know, we always tell you call that number and we're gonna get to one of these in a second here. We've got a sorry we missed your call where people can leave a voicemail. So I want you to know that if you call sometime and you can't get through and you leave a voicemail,

we like to take some of those calls. But first it is tax time, George. And got my meeting coming up and I'm all set. Love my tax pro. Feeling good about it? Yeah, cause I just, I cannot be trusted. I would agree. I cannot be trusted even with...

You're not a man of minutia. I'm not. So digging into all the numbers, let someone else figure it out. Now you and a lot of our listeners can be trusted with Ramsey's Smart Tax. This is 100% accurate tax software that saves you up to 80% compared to other popular software that's powered by TaxSlayer. So I mean, it's a big time. It's legit. Yeah. Big time. They've been around for 50 years. Yeah. And they've been there forever. But I just gotta be honest, it's not for me because I gotta have a tax pro.

So you got these options, but for those who like to save even more and they just know you got a world class software. Simple. Simple. And you can do it. And it really does walk you through it in a way where even Ken Coleman could do it if he so chose. If I chose, this is built for me. RamseySolutions.com slash SmartTax,

RamseySolutions.com slash SmartTax. Okay, let's get to, this is really fun. Sorry we missed your call. Hello, my name is Chris. I'm currently putting into a Roth IRA right now or a 401k. And I just wanted to know the difference between the pre-tax and the after-tax contributions to see if there's any benefits of the pre-tax and the non-pre-tax. And I just wanted to see if I could get some answers on that. Thank you and have a good day. All right. Thank you, Chris. I love it.

I appreciate that. All right. What do you say, George? Well, first of all, I love that Chris could have Googled this, but instead he called us. That really means a lot in a world that's going very digital, very AI. He went analog. He said, let's get some humans to answer this. You know, I'm that kind of guy. I don't want to look it up. I want somebody to tell me. Just tell me. Just tell me. So here's the conversation, pre-tax versus after-tax. So when you think about this,

here's the way that makes it easy. When you see something like a traditional IRA, traditional 401k, just think pre-tax. That's right. Another way to say that is tax deferred. And let's explain that. I'm deferring the taxes. The money is coming out and going into the 401k account

before you've taken the taxes. Exactly. So that's why that is a benefit and that's how that works. So that's a tax deferred account like a 401k. So what's the benefit of going with the Roth option, like a Roth IRA, Roth 401k, Roth 403b. If you see the word Roth, that means after tax. So in that case, think tax free,

because I've already paid the taxes on that money upfront, Uncle Sam doesn't need to get paid again. We're not gonna double dip. So the benefit of that is that when you take that money out in retirement, let's say there's $2 million in a Roth 401k, imagine that's $2 million of net income that you've already paid taxes on.

That's what happens. So that's the beautiful benefit. Now all things considered, if the tax rate stays exactly the same from right now until your retirement, it would be a wash. So if you have a 401k that's traditional, you take money out, you're gonna pay income taxes on that. But you got a tax deduction when you put the money in.

Now with the Roth side, you already paid taxes on it upfront, so you're losing out on that end because you're not getting a tax deduction, but you take the money out tax free. So the big discussion is, well, what if the tax rates change and we don't know? And so I don't like to wonder. I think tax rates will go up over time, not down. And so I'd rather pay the taxes now and just know that money is tax free for the rest of my life.

There are some other benefits of the Roth side. You can avoid required minimum distributions, RMDs. The reason they do this is because the government says, hey, Ken, you're 72. We gotta get some of this tax money. You gotta cash out your 401k to give us the money. But when you do the Roth side, Uncle Sam already got his cut. So there's no RMDs on that side.

And if you leave an inheritance to your children, they're not gonna have to pay taxes on that because it's already been paid. So a lot of great benefits. We are Team Roth over here, but either way, I love this question because it means he's interested and he's investing. I love that, appreciate.

That's a little bonus Talk Nerdy to me, I feel like. It is, but let's be honest, you're only a quick pivot in any call from Talking Nerdy. You're true. I can make it, I could just pivot at any moment. Yeah, I mean, that's just, that's your nickname. George Talk Nerdy, Timmy Camel. Amortization King.

No, ambassador of amortization. Oh, thank you. You gotta have the alliteration going on. Assistant to the regional manager. That's right, exactly right. There's a time in your life and in the baby steps for renting, but you don't wanna do it forever because when you rent, you're still paying for a mortgage just somebody

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Welcome back to the Ramsey Show alongside George Campbell. I'm Ken Coleman. The phone number to jump in is 888-825-5225. And I'm told that Kristen is on the line in Erie, Pennsylvania, and she's a Baby Steps millionaire caller. We love these. Kristen, how are you today? Hey guys, can you hear me okay? Loud and clear. Do I have the facts straight?

Are you a Baby Steps millionaire? All right, tell us, what's your net worth? It's approximately 1.25 million. Nice, and can I ask you how old you are? It's approximately $1.25 million. Nice. And can I ask you how old you are? It's not polite to ask a lady how old you are unless it's this kind of format, but I'm still going to ask. Well, I'm at an age that I don't care anymore.

I'm 55 and my husband's 58. Come on. Love it. Love it. So we got a 55-year-old millionaire. Okay, fantastic. Very fun. Can you give us the breakdown of the 1.25?

Sure. I have approximately $689,200 in retirement and that is broken up into a 403B, two Roth IRAs, and two traditional IRAs. Awesomeate and what else uh... i have a non retirement brokerage account with about fifty thousand dollars uh... checking account is about a thousand uh... i call it savings account very liquid number one is forty four hundred dollars and uh... savings account number two which is the high yield savings account

which is about high-yield savings account, which is about $51,000. Our primary home is worth about $2.25. That's paid off? Yes. Okay, nice. Awesome. Everything's paid off. Yeah.

Let's see. I'm in the process of getting rid of my whole life policy, and once I do that, that will add in another $13,000. That's cash value. Good for you. Wow. Way to go, and you guys have a couple cars, I imagine? Yeah.

And those are paid off? What are those worth? Those are paid off. We have an 09 Hyundai Sonata that's probably worth about maybe $2,000 if I'm lucky. Yep. And I have a 2015 Jeep Patriot. I'm just gonna guess around $8,000. So it sounds like the next step for you guys might be upgrading in vehicles because boy you did not sound excited and I can't blame you, you know? That Sonata gives you bad feelings.

I love my Sonata. It has 198,000 miles on it and it runs real good. Oh, all right, well you acted differently, so I don't know. All right, hey, what's your household income? What was your worst year as a couple and best year? Okay, let's see. Worst year was $22,600.

Okay. And then our best year, which was in 2024, was 126,000. Awesome. And any of this money was inherited? Let's see. I did inherit my parents' home, which is worth 230,000, but we inherited it after we became millionaires. Oh, very nice.

So it did not cause you to become a millionaire? That is correct. Cool. And degrees, you guys have degrees? Yeah, I have a bachelor's in education and a bachelor's in biology and my husband has a bachelor's in computer science. Nice. How about that? And you guys both working in those fields still? My husband never got into the field of computer science. He actually worked for an insurance agency. Cool. And how about you? I am actually using

both degrees. I spent about 23 years working as a medical technologist in a hospital laboratory and the medical technology school that I attended, I later became an instructor for. Oh, nice. So I kind of did both. And in 2018, I managed to land a management position that required my expertise. Very nice. And you're both doing, you're doing that now full-time? Yes.

Way to go. Love it. So what would you attribute this wealth to? How'd you guys do it before you hit 60? So basically I was thinking about the answer to this question and basically you have to have the right mindset first. You have to not care what anybody else thinks. You have to work hard. You have to have discipline. That's the first thing, you gotta get your mindset first. And then the second step is gonna be the KISS principle.

Keep it simple, stupid. Pay yourself first, save first, save often, and save early. Love it. So how long have you guys been following the Ramsey Plan now? Actually, funny story, well, not funny story, but back in 2017, my husband was diagnosed with partial seizure disorder and he had to turn in his driver's license. So that was the same year my daughter went off to college. So I was the only driver in the family, so we would

carpool obviously to work and to doctor's appointments and everything. And, um, you know, it's boring sitting in a parking lot, waiting for someone to come out of work. So, um, I started flipping the radio station and lo and behold, I heard Dave on one of his rams and I'm like, this is cool. So, um, I listened to the show and podcast for about six months and then we jumped on the plan, and then about a year later after the circus came to town during that famous year, I joined Every Dollar to tighten everything up.

So basically, we were already almost there. We kind of did Dave Twisted instead of Dave It. Yeah, you've been following some of the principles, and you went, oh, I like what this guy has to say. I align with a lot of this. We should just go all in on this plan. Did you say Dave twisted? Yes.

Oh, I like that. Because we. It's like the twisted. You did some things out of order? Yeah. Yes. Yeah, it's a. We'll forgive you.

It's not your best beverage. Well, way to go. You guys are impressive. Interesting, really, really fun. I love the story here. Really love the story. All right, can it be done? That's the question. Some young people out there, a young Kristen's listening in. Why can it still be done? Well, you just have to have a mindset and it doesn't matter how much you're saving as long as you start early and put anything in, whatever you can save.

And I do have to add a little bit to my story. 14 years, I was part time. Most of my career I was part time. And we paid for private school for our daughter, preschool through college, we cash flowed a wedding. We did all that and our average salary, I calculated it because I'm a math nerd, sorry. Our average salary was like $69,000 throughout our life. Well, you're proving it because our millionaire study

found that one out of three millionaires out of the 10,000 of them never made six figures in their working career. Yeah, we never made six figures until 2019. Wow. Way to go. So anybody out there listening, you can't tell me you can't do it. Because if I can do it with all that stuff and all those circumstances, then you have

no excuse. Yeah, a lot of life happened in between. And you guys cashflowed things, you just kept investing, got everything paid off and not having debt. I mean, that changes the net worth equation. Assets minus liabilities. If you got no liabilities, you're all in the game. Oh, correct. Yep.

Way to go, Kristen. Really thank you for sharing your story with us. I'll tell you what she just said there at the end would make TikTok melt. You know what I mean? Because I see so much of these young people just literally freaking out because six figures isn't enough to live on.

And so if I can't live on that isn't enough to live on. And so if I can't live on that, no one can live on it, then woe is me, the sky is falling. And here she is saying, you don't even need to make six figures. So that's a very counter social media message, but it happens to be the truth. And you heard the mindset shift. If you can get this early on, not caring what other people think is a superpower in today's culture. I think it's a superpower in today's culture. I think it's a superpower of any time.

And yeah, they got it early. So the earlier you understand that, the less you care about what people think, the more you run your own race, building wealth at your pace instead of trying to run, get rich quick, impress your friends with the car you drive. Listen, nobody's impressed rolling up in the 09 Hyundai Sonata.

It's worth $2,000, but who cares? She said it drives great. I got no problems with it. I'd rather put my money elsewhere She's not bragging about her car, but she's also sleeping really well at night. You know, I'll take that so how about that? There you go a real baby steps millionaire. They're out there folks. Are you the next one? I hope so by the way I got to come back to something you said you You dropped a dime on us, and it needs it. What was it? It bears repeating. I think you said, run your own race, build wealth at your pace. Oh! I don't know. You might have dropped a bar, I think the kids said. You do inspire me. Just by proximity principle.

Uh-huh. I gain bars. That's all I'm gonna say. Good stuff. Quick break, we'll be right back. This is the Ramsey Show. Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes. But thankfully, you don't have to dread filing when you've got Ramsey Smart Tax. It comes packed with everything you need to file online before the big deadline. That means all major federal forms and deductions are covered with no hidden fees.

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ramsaysolutions.com slash store. ramsysolutions.com slash store. Pre-order today. Welcome back to the Ramsey Show. So glad you are with us. I'm Ken Coleman, George Campbell. Joins me. 888-825-5225 is the phone number. Hey, are you staying on track with the Baby Steps? If you want to know, take a quick quiz to check your progress and receive a personalized plan just for you. All you got to do is head to the show notes, click on the link titled, Are You On Track With The Baby Steps? And you can complete the quiz. That's a great little prompt and helper for you.

All right, back to the phones we go. George is in Cincinnati, Ohio. George, how can we help? Hey, how are you guys? Good. What's going on today? I'm a fourth year medical student. I'm going to graduate medical school in a couple of months. Um, and I have about $250,000 worth of student debt on me. Um, and I wanted to know if you think it would be a good idea. Um, you know, I need to move to a residency. Um, I'm starting residency in July. I need to move. And I was wondering

if you'd recommend buying a house instead of renting. What are you going to be making in residency? So I'm getting married. So my fiance will be making about $150, dollars a year and I'll be making around sixty thousand dollars a year So 210 when you get married? This May Okay, so we call it 210 combined income soon enough and does she have any debt? No, that's the only debt we have that's our all our combined debt is the 250. What's the payment on that gonna be? all are combined debt. Is the 250. What's the payment on that gonna be?

It's kind of up in there right now because there are federal loans and it's unclear if they're gonna, if income-based repayment is gonna be an option. But if let's say we did the 25-year repayment plan at the year-round, $2,000 a month. 25 years? Dude, you're gonna be geriatric by then.

Yeah, that's true. I mean, the 10-year repayment plan is, I think, $3,300. Okay, well here's the deal. Are you new to the program, new to the show? I've been with them for the past couple of weeks. Okay. So relatively new, yes. Awesome. So there's a time and place

where we recommend buying a house and only then. And that's when you're completely debt-free with an emergency fund and a solid down payment. And even then the parameter would be 25% of your take home pay going toward that mortgage on a 15 year fixed rate loan. So would I recommend a guy who has a quarter million in debt go into more debt and become a homeowner as he becomes a newlywed and leaves med school and to residency, no.

But the good news is you guys are gonna be making great money and the trajectory is so high that you're gonna be a homeowner before you know it. But I would rent for a few years, think about this, could you out of the 210, could you throw 100,000 of that, live like you're broke, throw it at the student loan debt?

I probably could, yeah. If you rented cheaply as newlyweds, this is the greatest phase, because nobody cares that you're broke when you're newlyweds. And if you do that, you'll be debt-free in two and a half years without your income going up. See, that's exciting, George.

So then a year later, you have an emergency fund and a down payment. And what are you projected to make? After residency. After, so it's a five year training program and starting around 400 to 450. Alright, imagine that timeline, George's timeline that he just gave you and then you come into making 400 G's. I mean that's, how's that feel? Yeah.

No, I didn't. How does it feel? Have you actually, like think about that for a second. I, yeah, yeah. As opposed to the 25 year plan. I mean, the only reason I think about the 25 year plan is just to lower interest rates. I know why you did it. You're trying to lower the monthly payment.

I get it. But my point is, is George just gave you a two year plan. Yeah, that's true. So here's the deal. All of your friends around you are gonna think you're crazy for aggressively paying off your student loans. They're gonna go, hey, I'm just gonna die with this

or hey, I'm gonna make great money one day. Not really worried about the loans, I wanna live my life. I've been in med school for too long, I'm in residence, I'm a doc now, I wanna get a nice house, I wanna get a nice car. You're gonna see that all around you, this lifestyle creep that happens in the medical world,

and let me tell you, my whole family's in the medical world, and so this happens. And if you're not careful, you will be like the other doctors, broke, stressed out, going, man, I make 400 grand, I don't know where any of it goes. It just disappears every single month. Or you could go against the grain,

aggressively pay off your debt, buy a house, pay that off aggressively, and then be making half a million dollar household income with zero payments. And when you're burnt out one day, you just retire, I'm done I'm gonna do something else I'm gonna go volunteer I'm gonna go do some overseas you know dock work and that I think will free you if you follow that plan instead of do what everyone else is doing. And I understand that's controversial. Yeah I love it I think that's great let's uh

let's see we get Alexander in here in Colorado Springs. Alexander, how can we help? Hi, how are you doing today? Good, how are you, sir? I'm alive and healthy, so just working on the wealthy. Hey! Alright, alright. That was good. You pulled that one out. It was a little melancholy, and then you gave me some positivity at the end and rescued that. That was great. What's your question? We've got that was great. What's your question? We've got about we got about three minutes What's our what's your question?

Okay, so I'm indent in debt and I want to get out of debt and I have options I'm currently in the life insurance industry and I have two jobs that I can choose from because I'm looking at changing industries Okay, I was just wondering which one is the smarter way to go to help me get okay. Give me a and B so A is working with my father. So my dad works and he's a very successful person. And if you're working for him as an employee, I'd be getting $2,500 at first in draws. I'd be a sales rep.

I don't like that option too much because I don't want to owe my dad money. All right, well let's stop talking about it. What's B? B is going in doing door-to-door pest control sales. I used to do it for a lot, a long time. And I stopped last year and then I was considering getting back in because I was offered a good opportunity. So you've got an opportunity on the table, an offer to get back into that. Yep.

What are you going to make or what can you make in that role? So my first year with a worse offer, I made $40,000 in four months. At this offer, if I, if being realistic, I think I can make at least $45,000 to $50,000 in four months. It's just hard work, obviously. Now why is it only four months? That's just how the, obviously. Now, why is it only four months? That's just how the pest control industry works. You go and work and knock doors for four, five months at most.

And then you go home and they pay you all your money. OK, but what are you doing the rest of the eight months a year? For the eight months of the year, that's what I was considering. I could either continue and work and recruit and build my team, or I could get another job in that time and That's kind of how it would go. Okay, how much debt do you have? So I actually have a written out here. I did take time to do that. I have about 14,000 in debt

Well, I think this is pretty straightforward George Alexander you give us two options. You don't even like option A so I automatically usually lean with with the person because there's good reasons you don't know you don't like the job doesn't seem like it's gonna pay as much as option B the pest control is that true as well? To an extent so to be super clear about what it would be with my dad I'd be kind of starting something new with him it It's selling life insurance again, but corporate life insurance. So the payout really just depends on how I perform, but I don't know how I would perform in that and it could be anywhere between six months to a year before I

get my first sale. Oh well. Yikes. I'm gonna take option B. Let's go option B. I feel great about that. I'm gonna use that four months to get aggressive to build yourself a financial foundation. So if you make 45? Yeah, I feel great about that. I'm gonna use that four months to get aggressive, to build yourself a financial foundation. So if you make 45. But in those other eight months. Yeah, I'd get rid of the debt, get an emergency fund. Once this four months is up,

you've got a great financial foundation. You need to find like a career. And so I'm gonna give you Ken's book, if that's okay with Ken. It is. Find the work you're wired to do. Find the work you're wired to do. It's got an assessment in it.

I want you to take the assessment and then read the book. It's only 45 minute read. It tells you what to do with your assessments because you need to be figuring out in the short term what to do in those other eight months. I like what you threw out there. When I hear someone say I want to build my team, I like that. I like the sound of that if that means mo money for you. But let's also be thinking, anybody who likes going door to door, selling pest control services, my man, you're a freak.

And I mean that in a good way, because that is somebody who can handle rejection, George, and that person is unstoppable. So I got to say, Alexander, you figure out what you really want to be selling, a product or a service that you can get fired up about. And my man, you're going to be very wealthy with that ability to handle rejection like you can. I mean, you're something else. So get after it, young man.

Get after it. I love it. All right, George Campbell, great hour. Always fun to be with you. I want to thank James Childs, our fearless leader and our hearty, hearty crew of men behind the glass that keep us on the air. Thank you, America. This is The Ramsey Show.