The Ramsey Show - It’s Time to Face Your Financial Reality

Starting point is 00:00:04 Brought to you by the Every Dollar app. Start budgeting for free today. It's broke and common sense is weird, so we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio. It's The Ramsey Show. I'm Jade Warshot next to meet Rachel Cruz, taking your calls about your life and your money. So give us a call. Jennifer has done that. Jennifer is in Las Vegas, Nevada on the line right now.

Starting point is 00:00:32 Hey, Jennifer. How can we help today? Hi. Thank you for taking my call. You bet. Okay, so basically I wanted to get some advice. I thought I was doing pretty good financially. I don't follow the baby steps or do any of that.

Starting point is 00:00:50 But I watch you guys, and I know it's good, solid advice that you guys give. But now that I'm getting older, I realize that I don't know. I don't know if I'm ever going to be able to retire. How old are you? I am 53 years old, and my husband is about same. He's 52, almost 53. And we bought a house probably five years ago, and, you know, that was our dream. And we had a lot of debt, but we've been plugging away and we were almost there.

Starting point is 00:01:29 Like, to me, I was like, hey, I'm almost there. I have, you know, I have a little bit left. I like six more months left on a car payment. I have maybe one credit card that I have like a couple hundred bucks on. So that's like almost done. And then just recently my husband had an issue with his teeth. Like we've always known that he, I mean, he's always had like kind of issues with his teeth. But we just kind of put it off, put it off.

Starting point is 00:01:59 And so finally it was really bothering him. He went to the dentist. They're like, sorry, buddy. We've got to get rid of them. All of them? All of them. Oh, my gosh. How much of that cost?

Starting point is 00:02:11 So it was about 40 grand. With like root canals and like the whole deal. No, no. No, no. They just took all his teeth out. So $40,000. Was that your wake-up call financially of realizing? Oh, my gosh.

Starting point is 00:02:26 Yeah. Yeah. And the hard part is you're 53 and it's like the hourglass sands. You're seeing them running out. Yeah. Yeah, yeah. You know, and I mean, like, to me, health is sometimes it's a little bit more important than just how many things you have and collected, you know? Sure. Yes. And so we thought about it for a while. And we kind of knew it was coming, but we kept putting it off, you know? Well, I mean, let's be honest.

Starting point is 00:02:56 The dental thing and the health part of this, you're right. Like there are certain things that take precedent and it's like if it's health, you want to lean all the way in. But that wasn't the cause of what you're feeling now. That was one of the many dominoes that started tipping over. And when you have, you know, 10 or 12 dominoes in a row, you feel the weight of all of those tipping over on you. And so I think that's what's taken place. And to your own point, it sounds like it's kind of just been years, maybe even decades of. of kind of knowing what you need to do, but not leaning into it.

Starting point is 00:03:27 And I think that's what you're feeling right now. Yeah, I feel that, you know, because, and the thing is, I've always been the one in the marriage who's taking care of all the financial stuff, you know, paying the bills, you know, all that kind of stuff. And we've always been on the same page. It's not. But where is it left you? Where are you guys today?

Starting point is 00:03:47 Like, what's the picture? Yeah, how much do you have in retirement? Okay. So this is the sad part. I have an IRA and I have a Roth and I have a savings account. All of them all together are about 24,000. Okay. And that's it.

Starting point is 00:04:04 What about him? He has a, where he works, he just, he just been there for five years. He just hit his five year mark where he's been working. And so he is eligible for the pension. Okay. But I don't, I don't know what that's going to be. You know what I mean? Like, from what he tells me.

Starting point is 00:04:25 So, but basically what you're telling me is he got saved by this pension because there's nothing else there. That's what I took away from what you just said. Yeah, because we've always put everything together. So like, yeah, the IRA and I mean, yeah, the retirement, it's like, it's under my name, but it's both of ours. You know what I mean? The total is 24,000 for all of you between, for the both of you between IRA Roth and savings.

Starting point is 00:04:48 Okay, so how much do you guys make a year, Jennifer? So he just got a raise. So now between the both of us, we both make the same amount, about $50,000 a year. Okay, so $100,000 total. And how much consumer debt do you have? Other than like my car and this new loan. Everything. Everything.

Starting point is 00:05:12 I'm going to say it's about, let's see. Jennifer, I want to call out something here because this is going to help you off of this call. What you're doing on this call is I think what you've done for the last, for your working career from age 20, probably when you got your first major job until now age 52, 53 is you look at something and your first instinct is, oh, this might be kind of bad. And so instead of looking at what it is, you kind of say, oh, well, it's not that bad. We just did this. And you kind of cover up the negative thing with the most recent positive. Oh, it's not that I mean, after all, we did just go out to eat last night. Oh, that's not that bad. After all, I did just get a raise. Oh, that's not, right? And so even with the questions that Rachel and I are trying to get you to answer, we can't get the answers because you're trying to cover it up. Now's the time, like, put the chips on the table so we can help you. How much is the debt? Let's just say it. Well, now it's about $43,000. Okay. And that's between car, credit card, dental loan, anything else, student loan, He lock, anything else?

Starting point is 00:06:21 No. So you used some money that you had saved for the dental procedure because you told us that was $40,000. Now that it was told that was all in. $40,000. That's how much the dentist quoted us. That's how much the loan was for. Yes. Okay. No, we didn't we didn't tap into our savings account. Okay. So how do you have $43,000 of debt? Well, it's $40 for the dentist. It's $3,000 for another dental bill for me. And then I have consumer debt. It's about $1,000. What about the car? What are on the card cards?

Starting point is 00:06:59 Oh, the car. I'm sorry. The car is $3,000 for the car. Okay. What about the credit cards? No, that's it. The credit cards, I owe $700 on one, and I owe $300 on another. Okay.

Starting point is 00:07:12 So let's really, really. Can we just, can we level set for a second? Level set it right now. That what you've been doing is not worked. Do you agree? I mean, we're not like homeless, but yeah, I understand. Hold on, hold on, hold on. Stop right there. Is the standard because the standard is not homelessness. That's not the bar that we're trying to be in life. The bar that we're trying to be is your best self. And feeling like when you go to work nine to five and sacrifice all that time and effort that you're actually building something.

Starting point is 00:07:43 I kind of want to just, I love you, Jennifer. If you're in front of me, I think I would just grab your shoulders and shake you and be like, Jennifer, you got you got about. You've got a solid 15 years left. Let's move. Let's do some stuff, right? Let's do some stuff. And don't sugarcoat it. Don't sugarcoat this anymore. You know, we're not here to judge you.

Starting point is 00:08:03 We're here to be your friend. We got to put you on a plan to get you out of mediocrity into a thriving situation financially, where you're not having to cover up anything. That it's like, this is what it is. And I'm proud of my situation. So, Jennifer, if you stay on the line, is going to pick up. We're going to give you total money makeover the book because what we're going to start to do is we're going to start to pay off this debt. Starting with the credit card, the car, you're going to go down the list. We're going to save some of this money.

Starting point is 00:08:30 Some of this money and savings that you have that's not invested. It's going to be thrown at the debt and you're going to go through the baby steps. At the beginning of the call, she said, I don't really do the baby steps. Well, now you do. I kind of feel like you should, you know? Just try something new, Jennifer. Try something new. Like sands through the hourglass. It is, right? So are the days of our lives. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business. We wasted too much time chasing information instead of making decisions. That's why we got NetSuite. NetSuite brings your financials, inventory, CRM, and more together in one place.

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Starting point is 00:10:52 And so I want to have a conversation with him about it, but I don't know how to go about it. What are the habits you're seeing that you're concerned about? What's he doing? So just to give some context My mom is like no longer around So he For example he does not cook for himself He orders out a lot

Starting point is 00:11:12 He eats lunch Like he buys lunch every day He buys dinner every day And sometimes it's takeout Sometimes it's delivery It's just a lot of money on food overall On top of you know he's got a mortgage He's got

Starting point is 00:11:29 other expenses as well. Do you know how much he makes? Andre, do you have a pretty good grasp of what's going on? Or it's just more of a feeling and you're seeing a pattern happen that you're nervous about? Well, I know he can sustain himself. I just think that maybe the money that he makes can be allocated towards other places as well. But I think for the average person, he's spending like a little more than the ideal. out. Is it mostly the money that's bothering you, or is it just the unhealthfulness of kind of the way

Starting point is 00:12:05 his lifestyle is looking? Or is it both? It's a bit of both, actually. And how old are you? I'm 23. 23. Okay. And are you living with him? Are you home or are you on your own? Yeah, I live at home with him. Yeah. And this is new, is this new behavior? You said your mom's not in the picture. Did they get divorced? Like, did something trigger this behavior that you're like, man, this is new. This is unhealthy. This is not good for his money. No, she passed away coming on five years now in December. I'm sorry.

Starting point is 00:12:37 Thank you. You know, so I guess to him, it's like, well, I have no one to cook for me, so my only option is to, you know, buy food. Yeah, and how much does he make a year? Do you know? Maybe

Starting point is 00:12:52 like 100, 110. Okay. And has he complained about money to you in general about not being able to do X, Y, and Z, and I don't have enough for retirement or anything? Is there any other, anything that he's worried about? He has mentioned about, like, money streams before. So he's got the mortgage. He's got a car payment on a car that he rarely uses, which even to this day, I'm still asked myself, like, why'd you buy that car if you don't even use it?

Starting point is 00:13:25 Yeah. Okay. So, yeah, so it's these small. habits that you feel like are adding up and you want his money to be best used for him not being wasted basically is that is that your main question yeah that's kind of about it you know when I hear what you're saying I think there's a lot of grief that's at work and what you're seeing it sounds like oh you know mom is gone she used to cook the meals and he never figured out how to start doing that on his own and you're there like watching firsthand like dude this is draining your money very very quickly there's a car that nobody's using anymore, but we haven't sold it, we haven't gotten rid of it, those sorts of things. I might, Andre, approach this from that side of it more so than the financial side of it and just say, gosh, Dad, I'm noticing some things.

Starting point is 00:14:13 And you know what would really make me happy? I miss mom cooking. And I feel like I would love for us to just make some meals together a couple of times a week. And it would make me feel a lot better. Would you do that with me? And I think that that's something that both of you can. benefit from without attacking this from like, hey, dad, you're spending too much money on going out to eat. Because I really don't think that's the root of this problem. I think it's a grief thing and a gender rolls thing that he's just missing his wife cooking the meals. Yeah. And there's a bigger picture to it too of, you know, it's not the delivery food stuff that's going to probably like take them out. Probably, probably not. But long term of you saying to him, dad, I want to see you thrive. I mean, you're coming up on, how old is he? Is he in his 60s?

Starting point is 00:15:03 He's 58. 58, okay. He says he wants to retire within the next few years. He's a business. Okay, great. So I think you can just say, hey, dad, I know that this is coming up timeline-wise. And I would love for, and you could say, I'm happy to do it with you. I would love just to look at some of your expenses because I just wonder if you can actually

Starting point is 00:15:22 put a little bit more away every month, that would really accelerate where you want to be in five years and we can look at some expenses and what those could be, right? And I'm sure food will be a glaring option. The car payment will be a glaring option, right? And so it's more of a discussion and a suggestion for something bigger, right? As Jade's talking, let's solve and let's press into the grief. Let's solve for in five years, right? If you kind of just nitpick every little thing for him, especially as his son, he's probably going to be like, what are you talking about? Yeah, the powdered butt syndrome. Yeah. Yes, that's right. That's right. So I would go at it more from those angles than,

Starting point is 00:16:02 Dad, you're spending too much on Uber Eats. How do you think he would respond to that, what Rachel said? I have tried bringing it up to him, but I think since I'm the youngest of his three kids, he kind of looks at me like, I mean, I'm sure he respects me as an adult, but I think he, I have two older brothers, so I think he would take it better from them, but I want to get better of having those conversations with him.

Starting point is 00:16:26 I mean, there is a piece of this, Andre, we touched on. We said it quickly, but like that powdered butt syndrome, that just that feeling of, hey, I was here when you came out of the womb, I changed your diapers, you don't know more than me about this. That really, and it's not even a pride thing. It's just like a. It is what it is. It is what it is. And so don't take that personally. You'll probably feel the same way with your kids when the time comes.

Starting point is 00:16:50 I just think it's very hard to bridge that gap and do what it is that you're trying to do. I think that if you can just say things to him that are more curious instead of you trying to say you need to do this, that could help, that could help you open up the conversation, not so much that he'll have the conversation with you, but you never know what he'll go back and think about and, you know, start putting in place. So if you're, if you just say out of curiosity dead, are you still planning to retire in the next five years? Oh, okay. I was just thinking about making, you know, I was just thinking about it, you know, I was just thinking about it, you know, making sure that you have everything ready, oh, okay, cool, you know, and just say things out of curiosity, not telling him, that could really help. And part of becoming an adult is realizing that you can't change people. So you may get to the end of all of this, which is a very real reality that he's just not going to listen. And so you have to be okay with that as well, right? That you that you saying these things is out of your own concern for him. And it can't be hung on the hat of like, this is going to change him. And if I say it this way, then he'll for sure get it all of it.

Starting point is 00:18:04 Right. Like, I think there's wise ways to go about it. But at the end of the day, too, I mean, and this is true for for adult kids to parents, parents to kids, friends to friends. I mean, all of it. That you just, if you have an opinion about something. Yes. And you see someone who may be hurting, right? And you're like, I want to be able to help them. And you present them with what you think is the solution. God willing, they hear it. And what a gift that would be that you change course. But then there's also that really harsh reality that at the end of the day, they may not. And it's not up to you to save them either. Like, you know, at the end of the day, too. So it's, it gets so, it gets so messy. But I so appreciate, Andre, your, your heart for your dad.

Starting point is 00:18:48 You know, you see, you see them. And you're like, man, that's so bad. And I think you're right too, Jade, it goes deeper than just the food delivery. It's like he's hurting. He's probably hurting. Yeah, I think there's some grief there. And I think in those moments, the best thing you can do is kind of lead by example. Like I said, whether it's the meals being like, man, I really miss mom's cooking. I would love to cook some of the food that she used to cook for us.

Starting point is 00:19:08 Like, I feel like that'd be really good for me if you do that with me. Even, you know, I feel a little stuck in a couple areas ever since mom died. I think I'm going to start seeing somebody. You know. Yes. Saying those things out loud. instead of keeping them to ourselves. It really does help the people around us go, oh gosh, okay, that's not so bad that I'm feeling that way.

Starting point is 00:19:29 Or maybe I need to speak to somebody. There's some healing in it. Yeah, there really, really is. So anyway, we're pulling for you, Andre. Like, this is something that's going to take some time and you're a good kid. But to Rachel's point, we can't always change the people we love. That's only something they can do. If you are someone you love is dealing with a complex health issue,

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Starting point is 00:22:07 We have a limited time. So if you do have a question, a money question, and you want an answer for your specific situation, go ahead and head over to our website and use the Ask Ramsey tool. Now, Ask Ramsey is our free AI tool and just know that it's built and trained on proven Ramsey principles. So you will get an answer the exact same way that you would get it if you were to call into the show. Go ahead and ask your question today at ramsysolutions.com, or you can just click the link in the description if you're listening on podcast or YouTube. All right, Candy is in Arkansas. Hey, Candy, how can we help today? Hey, so we recently sold our farm and our cows, and it's a good bit of money, you know, for us.

Starting point is 00:22:53 And we actually closed on the land next week, but we sold our cows. and I have my 401K with Edward Jones, so we went to the guy that I used for that, and we opened up a money market account. And we talked about when we closed next week, you know, putting that money in the money market account. And because I told you, I really don't know that much about, you know, the market, so I don't want to put our money somewhere we're going to lose it. Are you planning on using that money for anything in the, in the near future to buy more land or to...

Starting point is 00:23:31 Yes, we're going to use part of it to buy land and build another house. We built our last house. We just had it black again. We did the rest of it. So that's what we plan to do again. But he was talking about putting money in several different banks and CDs and staggering, you know, the maturity of them. And I just want to make sure that the land we sold whole.

Starting point is 00:23:58 1.6 million and we sold our cows for 100 in 2000 so 1.7 million. How much of that will you use for the new land and the build? I would guess probably 500,000 because we're just going to buy a little bit of land because we had so much land. It was just too much. Okay, gotcha. So you'll have 1.2 left after of that project's complete. Right. Okay. And how old are you, Candy?

Starting point is 00:24:34 I'm 60. My husband's 65. 60. I'm going to work my last year and a half, you know, so I can retire at 62. Yep. That's great. And how much do you guys have in retirement now? I have like 60,000 in my 401K.

Starting point is 00:24:51 He doesn't have a 401K or anything. Nothing for retirement. So this is, would this be your retirement? you say 1.2, which you guys will live off of? Yes, and he draws Social Security, I think, like $1,200 a month. Okay. And then he draws an annuity for $700 a month because he has a kidney disease. And so when we put it over into that, he'll draw it for a lifetime until he passes away.

Starting point is 00:25:22 But it won't continue after he passes. You won't receive that benefit? No. No, I would. In the first, first 20 years, if he passes away, you know, I'll do it up to 20 years and then after that it will stop. Understood. But he'll draw it for his lifetime. Okay. I want to go back to something you said that I thought was interesting.

Starting point is 00:25:40 So you have the money from the sale of all of this and you were saying that your accountant or is it an accountant, your tax professional? Who is this person that is separating all this money for you? He's the guy that we, that I use for my 401K here where I work. He works at Edward Jones. Okay. So we just went to him. Now, why did he say that he was putting in all that, those different accounts?

Starting point is 00:26:04 Is he trying to, like, make sure you've got FDIC coverage? So he's just, like, limiting it at 250 per account. Is that what he's doing? Yes. Okay. And what's the horizon on buying the new place, the new land in the new house? I don't know. It's kind of, we've been looking for land, and it's kind of hard.

Starting point is 00:26:28 To find it, yeah. The house that we've built that we sold, we're going to rent it from him for like $200 a month for the first year, $500 a month for the second year. And then it will go to regular rent if we're still there the third year. So, you know, we're not just like in a rush to have to do it. Sure, sure, which is good. I think that's smart to have some patience for sure. So, Candy, if I were you, I mean, yeah, you're 60,

Starting point is 00:27:01 a husband 65, I understand you're a little nervous about putting money in the market. I would not put any money in the market that you're going to use to buy this land and build this home. So I would not touch 500,000 of it. I mean, I would keep that where you want to. If you want to do CDs, you can,

Starting point is 00:27:17 or a high-yield savings account of a money market account. But the rest of the 1.2, I would highly consider what your options are. here and the fear of the market, I would want you to research. I want you to do this yourself, because we can sit here and tell you and talk through it. But I want you to look at how the market has performed and you will see some down months in 2026. You're going to see some up months. You're going to see it all. But it's around the average right now is probably 14% in 2026. Uh-huh. Let me check it. And so when you look, and again, when you

Starting point is 00:27:57 you invest, you want it to be for five years or longer so that it can, the ups and downs can, you know, equal out and then hopefully it's continuing to grow. And so just the power of the interest rate is really important. If you keep this money, 1.2 million in CDs, it's going to grow at about 4%. Okay. So in five years, that'll be that 1.2 really just grows to about 1.4. But if you have invested it and not in like a single stock, okay, when I say investment, I'm talking about a mutual fund or an index fund. And so it's spread out over 90 to 200 companies or if it's the S&P 500, it's 500 companies, right? Like it's, you're putting your money in a lot, okay? Not just a single stock in hundreds of stocks, literally. And on and I just plugged it in. So at 11%, which again,

Starting point is 00:28:47 the past couple of years have been way higher than that. Not every year will be like that. But 11% for the past couple years is a little bit of a conservative number to use. It would grow to over two million dollars. Oh, wow. So that would be in five years? In five years. And then if you just want to do rough math, that money will double every seven years.

Starting point is 00:29:07 So if you didn't touch it, which I know you might, because that's what you guys are going to live off of, but in seven years, that 1.2 is 2.4, and then so on and so forth. So the growth that you guys can get and live off of

Starting point is 00:29:19 is something that I would highly, highly consider. And CDs and, you know, things like a, annuities and all of that. They're just very conservative. I mean, I would say quote unquote safe, but they suck as an investment. Like your money could be doing so much more. And I know that probably isn't going to change your mind completely, but I want you to talk to your advisor. And if he continues to tell you to put in CDs, I would look for a smart vester pro. You can find one of those on

Starting point is 00:29:47 Ramsey Solutions.com because these are trusted people that are in this world of investing. and there's something powerful about saying, yeah, you're a young 60. Candy, young 60. You're a young 60. You're not 85. If you were 85 and you're like, I'm scared to death, I'm like, girl, do what you got to do to sleep well and, you know, right off into the sunset. But you still got some years ahead of you. A lot of years.

Starting point is 00:30:11 That this money could be working for you and for it just to sit in CDs. Yeah. And I mean, I feel like, go ahead, Candy. I think the reason he suggested CDs was because of us. We were like, you know, we're not ready to put it into anything because we don't really know what we want to do or put it in, you know, was just unsure. So that's the reason he suggested. And that would be the right thing to do. I mean, he shouldn't invest you in something you've said no to or don't understand.

Starting point is 00:30:40 And so I think I can respect why he did that. But let this be the jumping off point for you guys to really dig in and even sit down with him or like we said, another smart vester pro and just say, help me understand because I do know that I'm. missing out on returns and I don't want to keep missing out but I want to understand it. I don't want to just get in because the people that I listened to the radio told me to or because, you know, whatever his name is because Bob told you to. And it is scary. I mean, if you're watching the news and, you know, bomb Iran and it's like, oh my gosh, the market's got, right? I mean, like, it's just like it can, it can seem scary. And that's the frustrating thing is if you're, if your investment advice is coming from the news, either side of the aisle. Yeah, absolutely.

Starting point is 00:31:20 You're not getting the wins. They don't promote that because it doesn't give ratings. What gives ratings is scare, doom and gloom moments that they can point the finger and blame the person across the aisle. So you have to really look at the facts when it comes to this. And it is so much more positive than I think you realize candy. But I want you to do that research and figure it out and ask good questions. And hopefully he has the heart of a teacher. As a frugal guy, I am always looking for entertainment that is worth what I pay for it.

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Starting point is 00:33:40 teach. All right, Tyler is in Minneapolis, Minnesota. What's up, Tyler? Hey guys, how's it going? My aunt and uncle have offered to do a contract for Gide with me for their house. And I can't tell if this is with my income and debt, if this is something that I should consider or if I should just kind of pass on that opportunity. Tell us more about your income and your debt. So I make about $23 an hour. And then I graduated college with about $75,000 in debt. I've paid, I have roughly 35 grand left on that. That's great. Yeah, good job.

Starting point is 00:34:25 So 35 grand left in student loans, any other debt that we should know about? Nope, that's everything. And how much money do you have saved? That's kind of where I feel like I'm looking for help is because I've been kind of throwing everything that I've had. I graduated four years ago. And so everything has gone towards the debt. I haven't really saved up anything. And then I feel like, you know, without health insurance or, you know, something comes up with my car of just like, I have about four grand probably between savings and checking. Okay. And you feel like it's a good idea to be a homeowner? Well, so I moved back in with my

Starting point is 00:35:07 parents and back to my hometown. And so I just don't know. To me, it seems pointless to go and rent when my parents' house is an option. And then on top of that, my aunt and uncle who are offering me the house, they go to Texas every year for the winter. And so I've actually been living there on and off for the last four years, just taking care of that property. What's the value of the property? Like, what would the terms be? Yeah. So I would say that if If they were just to sell it on the market, it'd probably be $450,000 to $500,000 in that area. Now, I would say that they're set up pretty good. So I don't know if they'd necessarily be looking to make like a whole lot off of me, you know, as I pay into it.

Starting point is 00:35:56 So if there's no deal. There's no deal. They're doing this for market price? Well, I haven't like talked to the details of what that contract for deed would look like. I would assume that it would probably be as low as possible. Or I just, if that was the route I go, like what would I be kind of looking for in that deal? So, Tyler, what happens when the HVAC system goes out after you've bought this home? And it's going to cost you $8,000.

Starting point is 00:36:31 And then there's some mold in the basement. That's another five. What happens? Yep. that's a great question yes so i mean the the point i want to make is that you're you're broke you don't you don't have any money and so people who are broke that buy homes become broker and it's not it's not a good thing it actually adds to a lot more stress and a lot more debt because you can't keep up a home i mean one of the cheapest days of a homeowner is the day you

Starting point is 00:37:01 buy the house and everything else the rest of the next couple of years is you put putting money into it. And when you don't have the money for it, there's no emergency fund. You still have this debt. You're just not at a financial place. And I say all this because I want you to become a homeowner. And it sounds like you have some good living situations that you can live there for a little bit and take care of it. Like, I mean, there's time. There's no, there's no rush. I mean, you're what, 26? 25. 25, yeah. So I would, I would highly suggest continued to do what you've been doing. You've paid off $40,000, which is amazing, Tyler. So I wonder if there's a way you can up it because you still have 35 left, and I don't want that to take you another

Starting point is 00:37:46 four years, right? So I'm wondering if you can do some extra work, do something on the property. You know, they pay you. I don't know what it is, but if there's some extra flexibility in your time to get this debt paid off ASAP, I mean, an extra, you know, $1,000 a month, you know, you're getting this paid off in more like two years. Yeah. Two and a half years versus four years. And if you do an extra, you know, if you do $2,000 a month, like you can start to see it actually, you know, see a lot of progress.

Starting point is 00:38:16 But it's going to take you changing and being a little bit more intense because after that then saving up some money, you know, for an emergency fund, having some money set aside for a down payment, at least 5%. Like all of that is the order at which I would do it, which is going to take you probably all of that, another four years. years before you had a owner, but that's okay because you'll be 29 and there's no there's no rush. I mean, I think you would regret this decision a whole lot faster. And then the whole thing with the deed is, is that like a like the seller financing is what it's saying. So they would

Starting point is 00:38:51 become the bank, which I would not do that either. I'm just curious, do you have money saved that you were even considering this? Do you have a chunk of money at all? $4,000, right? So, yeah, and they've kind of just proposed that to me as we're coming into them leaving again down to Texas. And so I would probably try to save up whatever I could throughout the winter and then. Yeah, but just to put this in, just to put this in fair terms, what you're talking about, if anybody on the streets were going out to buy a $450,000 to $500,000 house. And let's just say they gave you a deal and they did it for median list priced, what median listing prices right now. let's say they did it for $424,000. Most people, in order to get that payment at a fair part of their take-home pay,

Starting point is 00:39:38 they'd be putting down like 50% of their income. In your case, making 23 an hour, you'd be putting down like 63% in order to make this a fair amount. And we haven't even talked about do they own this property free and clear or not, because if they still owe money on it, depending on their interest rate, they're at least going to want to cover that. Do you see what I'm saying? so what they're going to be able to offer you would be limited anyway.

Starting point is 00:40:04 I do know that they own it 100%. And we also know that's good that they own it 100%, but we also know that you don't have any money to buy this. 100%. And honestly, I was kind of hesitant about it. It just seems like such a good deal. And not that they would be mad if I turned it down or anything like that. I just wanted to look into it fully.

Starting point is 00:40:27 Yeah. No, that's totally fair. No, I so appreciate you calling and asking the question because families do this a lot. We get this call a lot that, you know, a grandmother or an aunt and uncle, a parent, and they have this home and they want to, they want their child, their niece or nephew, their granddaughter to buy it. And, you know, and again, I think it's because it's that family tie. It feels like, okay, I'll get a better deal with this family. And just because it's a good deal doesn't mean it's a good deal for you, you know? And so you really do have to separate and take the.

Starting point is 00:40:58 emotion out of it to think, Holly, am I going to miss out? There's going to be other deals. There's going to be other houses that you can buy. And that may not even be the house you want. Well, that's what I was going to say is like, that's the whole thing is if they had not come to him and said, hey, we might have a deal for you. I don't think that he was like, you want to know what? One day I want to buy a house. You know whose house would be great? My aunt and uncles, that's the house I want to buy. That probably wasn't on his list of things to do. It just presented itself. And it was like, oh, this is in front of me, maybe I'll do that, you know? That's right, exactly.

Starting point is 00:41:31 And that's how these deals happen. And for a lot of people, they walk right into them. And then they get two years in, and they're like, oh, my gosh, I have no money. And then if you're the seller financing and you lose your job, then you can't pay the mortgage that month. And then you have to go to aunt and uncle and say, sorry, you know, and if they had a bad situation, which doesn't sound like they do. I mean, it just can be a domino effect that's not clean.

Starting point is 00:41:53 And the cleaner something is, the more peace, there's going to be, the, there's going to be, there's going to be more control because we do want you to own a home. Like that is part of the baby steps. Like we want you in the in the market, but not when you're broke. And you have no money. Broke people don't need to be owning homes because, oh my gosh, like it is so expensive. It is so expensive to keep up with it. And there's time. You know, I think the most recent data said that people are not buying homes until their 40s. Like that's when they're making that first purchase. And so I think that's okay. You know, it's very different from what we're used to because real estate's just more expensive now. It's more expensive for people. But I think it's okay. You know, I tell people

Starting point is 00:42:31 all the time, Sam and I waited 10 years to buy our first house and we're still here. And you're going to be okay. Yes. We're going to be okay. Nothing's going to happen. And the house doesn't fix your problem. So if you really are paycheck to paycheck, you don't have savings. You have a lot of debt. Owning a home is not going to make your situation better. No, it's not. It's really, really not. And so have the patience, have the patience. It may take you longer than it did six years ago, but it is so worth it to have that peace of mind. Hey, George Camel here. A few years ago, someone stole my identity. And let me tell you, that is not a quick fix. It takes hours on the phone, piles of paperwork, and a whole lot of

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Starting point is 00:43:55 your money, and your peace of mind. So go to zander.com to enroll today or call 800, 335,000, 5-6, 4282. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. We're going to go right back to the phone lines where we have Nicole, who's in Portland, Oregon. Hey, Nicole, how can Rachel and I help today? Hi, I have spent like the last minute just jot and down notes and stuff because I know that I'm going to be a jumble mouth. But right now, the biggest thing that I am going crazy about is my husband and I, last year, he was making over $100,000. And we lived, you know, a somewhat cushiony life.

Starting point is 00:44:39 Like we had our finances, you know, we lived within our means. Like if we wanted to buy something, we could go buy it. So up until February last year, he had lost that job. And I was a stay-at-home mom. And so I remember I was in Tennessee at the moment visiting my parents. And so I had went back to work, which is fine. Like, although it's hard with a child, you have to do it. You have to do it.

Starting point is 00:45:05 So I did that. He got a job as a car salesman. He is only making about $3,000 a month, which is not really that great. The way they do things there is just so weird how they pay. But they basically essentially pay you to sell eight cars. And after eight cars is when you start getting like the commission. Okay. And I was making like $3,000 a month as well.

Starting point is 00:45:30 But we, so I don't live in Portland. I live in a suite home, which is an hour and 40 minutes. from there and it's a very small town. I don't have family here and we have a child and I had someone watching my son but that babysitter had to be dropped and so now I'm working and I'm making $1,000 a month. I am trying to find ways to like clean people's houses and stuff. I guess my biggest thing that I'm slowly, I think I'm learning is like our monthly income right now is $4,800.

Starting point is 00:45:59 Our total bills are $3,900. and although that isn't what we, you know, used to have because we have a cushioning life, but I'm, I think I'm worrying about stuff that is out of my control right now is what I think I'm realizing. And it's taking a toll on my marriage, like the financial piece. My husband and I, we just can't see eye to eye. It's not that we're fighting, but I'm just like top tier stress. What are the biggest stressors that you're feeling, just not having the margin?

Starting point is 00:46:28 Are you stressed that you're having to work? Are you stressed that you don't like his job? What's the number one thing that's eating your lunch? So I think the biggest thing right now is because we only have my husband's family to rely on. And child care is, it's really hard, especially with the location that we're in. And I am afraid at some point it's going to be like, okay, like we have no other people to watch your child and I will have to be a stay-home mom. But I am choosing, this is one thing I did learn. I am choosing to deal with that when we get there.

Starting point is 00:46:58 So as of right now, we do have child care. But it doesn't give you the hours that you need to be able to work. It's limited. Right. Okay. And tell me again, is that because the town is so small and there's just no one to rely on? Or is it strictly, are you strictly going to family for child care? So I'm strictly going to his family.

Starting point is 00:47:20 I don't have family here. I don't want to say too much, but we did just have a babysitter. But found things out about her, please not involved. And so this town is just not a good place to find just random people off Facebook. Well, maybe, maybe let's not go straight to that. And I think that could be, I want to say this, you have a bad experience. It will put a horrible taste in your mouth. But I don't want that to turn into the first girl that we used ended up being bad.

Starting point is 00:47:49 That means everybody in this town is bad. I don't want it to go to that because now you're putting yourself in a corner and you're really limiting your options. How old is the child that needs childcare? Three. Okay, three. And I just wonder, I'm wondering about his job, Nicole. Yes. How long has he been doing this?

Starting point is 00:48:10 He has been doing this for about five months now. There was a couple months where he did bring in like a $3,600 paycheck alone. Okay. Which was nice. Well, maybe I wonder if that's part of it too, of you guys agree. on kind of a timeline to say, hey, can we reevaluate, you know, give them nine months, or I'm making up a time frame, nine months in this role to really get the cycle and to, and to know how to do it well, right? He needs some reps. You don't want to just like pull the

Starting point is 00:48:42 plug 90 days in. But I wonder if you both could agree because your uneasiness is that your income is having to supplement what he was making. And I think a goal of yours, I'm assuming I may be putting words in your mouth is that he would bring in an income that was to stay in the household and you don't have to work and you don't have to worry about child care or anything that would be like the ideal situation right right yeah so i do wonder on on his end of hey can we reevaluate our situation every every couple of months just to give you an outlet to for you to reevaluate to and to say okay it's been 90 days and we've done this we've survived like what is working is working right now we're okay

Starting point is 00:49:27 nothing's on fire or for you to have a place to be like, no, no, no. This is not working. It's horrible. It was horrible. And you don't mean, like, I don't know, for him to be able to have an out to in this specific job, if there's something else that he could plug into, he may not make $100 grand again. I don't know. Was he in sales when he was making $100,000?

Starting point is 00:49:47 What was he doing? He was a supervisor for, like, Georgia Pacific. What's Georgia Pacific? Is that trucking? No, it's in Halls. it's in the holiday Oregon. It's going to sound so funny, but it's where they make toilet paper and paper towels and they wait for Costco and all that. Like a factory. Manufacturing. Manufacture. Is there, have you guys considered looking outside of your area? Because it feels like, just from listening to you, it feels like you're in a very small bubble and you're limiting your options because of this bubble. Can he look for management jobs at manufacturers across the country? And can you guys open up your scope? And if you say, oh, well, what about child care? There's child care everywhere.

Starting point is 00:50:31 Or family. Do you guys want to be near a family? So right now we own our own home. So we can't, I mean, we can't just pack up and move. Sure, you can. The job thing for him, one thing that I think is the biggest problem for me right now, it's like it's just been nothing but like excuse efforts. She's like, oh, I don't want to go back to manufacturing jobs.

Starting point is 00:50:54 Oh, I don't want to do physical labor. Oh, I don't want this. Oh, I don't want that. And so it puts me in a spot of like, okay, well, I'm just going to say it out flat. But it puts me in the headspace of like, okay, well, you just want things handed to you. That is probably the biggest thing right now. So he didn't like the job that he was doing. He doesn't want to go back to that.

Starting point is 00:51:09 That's good to know. Does he like this current job? Does he like it? He loves it. And I love that for him. Like, I love that he has found a job that he really loves. So explain the handed to him part. He loves this job.

Starting point is 00:51:22 Do you feel like he loves it, but he doesn't work hard at it? What do you feel like is happening there? I feel like in a point in time in life, and although maybe he doesn't see our finances the way I do, and maybe he's not freaking out about it, because honestly, it's not really that big of a deal. But for him, like, I'm sorry, what was your question? What part of it you said he just wants things handed to him? And I said, you said that he really loves his job. Does he love his job?

Starting point is 00:51:46 He's lazy at his job? Is that what you're sensing? Or does he love his job and he's working really hard? He's just hitting a salary cap. Like, what's happening? I mean, he loves his job a lot. I would say that I know the people he works with and he's been working hard. I mean, there has been months where he's sold 14 cars.

Starting point is 00:52:04 Then I think there's something else at play. I think you're perceiving something that may not be true because you don't like the situation. I think that's it. I think she won't say out. Yeah. Yeah. And I think that's fair. I think you're feeling like, hey, I didn't sign up for a situation where I was going to have to leave my kid with a sitter in work.

Starting point is 00:52:25 But yet, that's where you find yourself. you find yourself. That's the reality for now. And so that's why I think some check-ins periodically so that you can, you don't hold it in, Nicole, and that resentment builds on your end, right? And to have a place, even if it's a counselor, you know, a therapist, a place to be able to talk about this freely, I think it's going to be really unifying for you guys. Most people spend years changing their money habits, but never think twice about how their bank probably works against their values with nuisance fees. and endless debt products.

Starting point is 00:53:10 If you're being weird by sticking to the baby steps, you deserve a bank that helps with that. That's why Ramsey partnered with Fair Wins Credit Union. They built the smart bundle specifically for Ramsey listeners, not for everybody else. And it includes up to 10 high-yield savings accounts so you can set up different funds for different needs and goals. And now they've introduced the Live Like No One Else

Starting point is 00:53:37 debit card. The original debt is normal, be weird debit card, is still available too. And every time you reach into your wallet, your card is a daily reminder that you follow a different path. Listen, if you're living like no one else, your bank should back you up. Check out the Fair Winds Smart bundle, including the all-new Live Like No One Else debit card at fairwins.org slash Ramsey. That's fairwins.com slash Ramsey. That's fairwins.org slash ramsey. Ramsey, insured by the NCUA. So you've probably noticed that in the majority of the calls, we love the solution of every dollar because it's the budgeting app that we created here at Ramsey Solutions. And it's the best way to work the plan that we talk about.

Starting point is 00:54:36 It's the best way to work the baby steps. You have to have a budget in order to work the baby steps. And so it's for you. If you have been listening and you have not downloaded every dollar, you need to start for free today. You don't have to live paycheck to paycheck. you don't have to live feeling broke. Our every dollar budget app helps you find extra money. It helps you every month. It helps you build a personalized plan that's just for you so that you can beat debt and build wealth. It takes 15 minutes. You'll find thousands. I'm telling you in hidden margin, you'll feel like you got to raise.

Starting point is 00:55:05 Don't live normal when you can live like no one else. Start every dollar for free in the app store or Google Play today. All right. Diane is in Raleigh, North Carolina. Hey, Diane. How can Rachel and I help today? Hi, thank you for taking my call. I have been following Dave's program since 2019. I'm out of debt, got good retirement. I've had an old car that I'm trying to hang on to a bit longer. I'm trying to get it, wait to get another car until I'm closer to retirement, and hopefully it'll be about 200,000 miles.

Starting point is 00:55:35 It's about 127,000 miles on it now. It's a 2019. But this year, when it hit 120,000 miles, it has gotten expensive between maintenance, repair, and I got some really good new tires. I have spent $8,000 on this car. Oh, gosh. But I should have kept it this long.

Starting point is 00:55:54 What's it worth? What's that car worth? Probably around 9 or 10,000. Mm-hmm. Until Subaru and until 120,000 miles, I was pretty happy with it. Do you have money saved up? Do you have money saved up that you can just upgrade car? Well, I do.

Starting point is 00:56:13 It would kind of wipe out my savings on my emergency fund. and I'm going to have to have to get a new route from my house here sometime soon. What's your margin every month? Pardon? What's your margin after you guys pay your bills? What's the margin that you have available? Oh, I have lots left over. I'm making double payments on my house right now because I owe less than $11,000 on my house.

Starting point is 00:56:35 So could you just slow it down a little bit and start stacking a couple of thousand? It sounds like you got a lot. I don't know how much a lot is. But if you could put half of that aside for, a car and in six months trade up? Does that, is that workable? I probably could, like I'm trying to get like another used car and I was looking at. Yeah, definitely.

Starting point is 00:56:56 The same car with only 50,000 miles on it would still be like around $20,000. Yeah, but if you sell this, if you sell this for 10, can you save up another 10? Mm-hmm. Can you save $2,000 a month? If you slow down on the house, if you just make your mortgage payment for five months, could you save $10,000? Yeah, I could do. Yeah.

Starting point is 00:57:16 I could do that, which actually I could take $10,000 on my account and still have my emergency fund. That's what we're saying. Do that. I probably could still do that. I think you're just like going fast. You're like, I got to get this mortgage paid off. This is like cramping my style right now. I don't want to deal with it.

Starting point is 00:57:31 So close to, and I'm doing better my retirement than I originally had thought I was doing and so I'd like to reward myself too, which was another question I wanted to ask, but not this time. But so my car, though, because it isn't a good car. It's just, it's costing all right now. It's too much. It's worth $9,000 and you've put $8,000 in it this year, and the year's not even finished. It's time to upgrade. And you have the ability to, so I would. And sell it while it's all fixed. Yes. You know, for the $8,000 that you've put in with the new tires and everything. Before something else happens. I mean, seriously, I probably would. Because if something else breaks, you're going to have to be like, oh, my gosh, that's going to cost $2,000. Is it worth putting $2,000? You know, you're back to the same conversation. So while it's going well, go ahead and sell it and get as much as you can.

Starting point is 00:58:16 can out of it because you've put a good investment into it. Yes. That's one good thing to highlight. You know, here we do teach a lot of people's potential is lying in their vehicles when people are trying to get out of debt. We're telling them to sell off their cars and drive a beater. We don't like car payments. We want you to own your car scot-free. But there is a moment where you can transition out of driving like that beater car. And she's definitely at the point where it's like, I can upgrade my vehicle. it's at no detriment. If you're making double and triple mortgage payments, heck yeah, it's time. Yes, absolutely. Yeah, it is time. Yeah, we don't want you driving a crappy car for the rest of your life

Starting point is 00:58:54 people. That is for a season while you're getting yourself in a place where Diane is. Diane, Diane, upgrade the car. You're good. Do it. All right, thank you so much for the call, Dan. Let's go to Marie, who's in Los Angeles, California again. Hey, Marie. How's everything out in Cali? Hi, Jade and Rachel. It's actually starting to finally cool. down. But I'm 27 years old as of today. Happy birthday. Happy birthday. Thank you so much.

Starting point is 00:59:23 I work full time and I'm going to school part-time. I'm in baby step four and five, but technically I'm not saving for my kids' college. I'm saving for my own. And so I'm preparing to cash flow veterinary school in about three years. Wow. So my question is, where do I store the cash while I'm saving for the three years? Well, a good place to always keep short-term money. That's not, you know, less than five years is in a good high-yield savings account.

Starting point is 00:59:53 You'll get probably maybe close to 3%. So you're not trying to make a ton on it because you're going to be using it. And you want enough time that if you had invested it, there may not be enough time for it to have the ups and the downs of the market to actually get some pretty good gains. So really anything less than four to five years, a high-yield savings account. is great. And Fairwinds, credit union, we've been partnering with them, and they're amazing. There's something called the smart bundle. If you go to fairwins.org slash Ramsey and you can get a no-fee monthly checking account and then up to 10 high-yield savings accounts. Not that you're going to need 10, but one of those can be earmarked for vet school. And then if there's any other savings

Starting point is 01:00:32 you're doing, like to upgrade a car or something else, you can open up more. But yeah, to answer your question simply, a high-yield savings account is where I would go. Okay. And do you recommend putting any money in the 529 or just everything in the high yield. Yeah, I mean, at this point for a 529, I don't think it's probably going to be worth it because it's only three years and you're waiting for that growth

Starting point is 01:00:55 again, that money will be invested in the 529. And so back to that, you know, point that it's I don't know, there's just, there's some risk there if it's that short term in the market, that if something does go down and genuinely, I think about election time. Like, you know what I mean? Like

Starting point is 01:01:11 these years, like they can get a little and stable. And if you needed some of that money and the market was down and you feel like, oh my gosh, you know, it's going to feel like you lost some money if you have to pull it out there. So, yeah, so 529s are really good for long term planning for college. But for this short term three years, I think I would just do a high yield savings. Yeah, I think that's a really good question. And I think that's one that the broader audience wants to know about, you know, it's like, when's a good time to throw the money in a high yield versus investing it? And that five year mark really is, You know, the way it's calculated is from inception, if you take a snapshot at any five-year point,

Starting point is 01:01:48 it doesn't necessarily have to be consecutive like these specific years. But if you take any five-year snapshot, you can see that there was enough time for the market if it dropped to fully recover and then some. So that's kind of where that comes from. And I think that that's a really good, smart rule of thumb. Yes, yes. And I say all this. And then, you know, Marie, if you do look at the market, the last three years have been amazing.

Starting point is 01:02:12 It's like, oh my gosh, I could have taken advantage of that, but you just don't know. You don't know. So leaving some time is usually wise because the worst thing is putting money in and having to take it out in two years. And, you know, and it's at a low. And, you know, and you're thinking, oh, my gosh, I'm going to, it's going to, I am losing money. If you pull money out at that point, you really are. Yeah. So, yeah, have it.

Starting point is 01:02:33 Have it ride right out. I love it. Love it so much. All right. A couple of questions. You guys sometimes send us questions from Facebook, from the Baby Steps community. keep doing that because we like to get them. This one is Tim from Instagram.

Starting point is 01:02:45 We have a team that will be driving soon. What are your recommended car brands that we should look at that will provide safety and still be economical? Oh, that's a good question. I'm going to be honest. I'm not very knowledgeable on every car brand and safety feature and everything. But yeah, I would say obviously a used car. Yes. And if there's anything that they can contribute, financial.

Starting point is 01:03:10 It's always a good thing, especially for a car because they are so invested in their car at 16. So that's a good place for them to be putting some money. So they feel some of that purchase and responsibility. Yeah. But yeah, anything used, I mean, at that point. And I'm looking at what's been on the road. I'm like, when I look out on the horizon, give me a Toyota, a Honda. Yes.

Starting point is 01:03:32 Give me a Toyota, a Honda. I don't see a lot of Jeep compasses anymore. You know what I mean? Like there's certain cars is like, don't get that. Yes, yes. Do not get that. Do not get. Oh, gosh.

Starting point is 01:03:47 There's a lot of them. I guess I can't think of them because they don't exist anymore. They didn't stand the test of time. They didn't. Hey, guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And health care is one of the biggest expenses in most family's budgets. And that is why I recommend that you check out Christian health care ministries.

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Starting point is 01:05:13 Go to CHMinestries.org slash budget and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. If you are a listener of the show, we would love it if you would like, subscribe, and share this episode or really any episode that is your favorite. And go ahead and join the conversation in the comments. We would love to hear from you. Okay, guys, Cindy is in Louisville, Kentucky. She's on the line next.

Starting point is 01:05:52 Hey, Cindy, how can we help today? I don't know if you can, but I figure if anybody can, it's you guys. We'll do our best. I own my house outright. Okay. And I have no debt whatsoever. All right. I've never had credit cards.

Starting point is 01:06:14 I don't believe in them. If I can't pay, buy something, I don't buy it. My problem is I want to get equity out of my house to put on a new roof and to do some floors in my house. I adopt senior dogs and cats and my carpets are shot. I've only been here two and a half years. I came from Maryland. I've only been in my house two and a half years, but my carpets are shot and I want to get hard with floors. How much does that cost?

Starting point is 01:06:49 I figure about $30,000. Okay. Total for everything. All right. I have no credit. I don't have good credit. I don't have bad credit. I have zero credit.

Starting point is 01:07:01 Good. So Cindy, you said, nobody will give me money. Well, you mentioned that you're in Baby Step 7. You have a fully paid off home. You said you've never had. had debt. You've never done it. What have you done with your money? Haven't you saved it up somewhere or invested it somewhere? No, because my husband was very sick for 30 years. He got sick very, very young. And we live, hand them out our whole lives. And so we weren't able to save money.

Starting point is 01:07:35 when I sold my house in Maryland to move here, I put it right back into a house. So there was no money to save. We lived on his social security, disability, our whole lives. What are you living on now? Social security. Okay. And how much is that every month? And 1780.

Starting point is 01:08:02 Okay. And I pay my bills. Everything's automatic. because I don't want to, you know, I don't want to forget anything. But it's... But there's no nest egg, no savings anywhere, no cash. No, no. There's a couple few thousand dollars, that's it.

Starting point is 01:08:21 How much is a couple few thousand dollars and where is it? It's in a savings account. It's like $3,000. Okay. And that's, you know, that's it. And I, what I did was, I got a home. I have a home warranty. So that God forbid of something that'll pay to fix anything.

Starting point is 01:08:44 Okay. Could you use that for the roof? No, no, no, no. It's just something breaks, you know, the furnace, the dishwasher, the washing machine. Oh, for appliances. Okay. Okay. Yeah, plumb.

Starting point is 01:08:59 No, it covers my plumbing. So if you just moved, though, two years ago. how much equity is in the home if you just went from, I don't know, a $300,000 house to that? My husband paid off 100%. No, I know, I know. But I'm saying if you, how much is your house? How much is it worth? 240.

Starting point is 01:09:18 Okay, so you had $2.40 in Maryland. You took the $2.40, bought a house here. So then for two years. Yeah, my house was worth a little bit more in Maryland. But the problem was I had to pay to move. Right. But we're saying how much. I'm just saying, do you have a lot of equity?

Starting point is 01:09:35 in the home to pull from in the first place. Yes, but nobody will give me the money because I have no credit. How much equity is in the home? 240. The house is 100% paid off. Okay, okay, I got you. I got you, I got you, I got you. Yep, yep.

Starting point is 01:09:55 So I bought the house with cash. Yes. And you're like, hey, I just want to get out some of this 240,000. So you have $240,000 of equity and you're trying to get some of that to. I'm trying to get $30,000. thousand dollars to put a roof on because my root i'm not sure how old my roof is the the people i bought it from were flippers and they didn't know how old the roof was i'm a little before i have a problem before i have a problem i just don't want to have a problem Cindy here's what i'm here's what i'm

Starting point is 01:10:25 thinking i'm a little concerned at with your situation because to your point you've just got the social security you can't afford home repairs you can't afford if the law if someone something happens in your yard, a tree falls. You can't afford that. I wonder if a better purchase. No, I have no trees. No, I have one second. One second. I wonder if a better purchase for you would have been a smaller condo where there's other things. No, because I couldn't buy a condo. I had to buy a house because I adopt, I adopt senior dogs and cats. Okay. So let me, let me speak to that because there's a lot that's true here. You've got senior dogs and cats. You want to provide a sanctuary for them, that is, that tail is wagging the dog. And that's where the problem is, because

Starting point is 01:11:13 the math here, I mean, that was a pretty good pun. That was a good pun. The math doesn't lie here. You don't have any money. And I'm not saying that in any judgment against you whatsoever, it's simply true. And the longer you live in that house, there are things that are going to come up that need maintenance. The AC is going to go out at some point. It's going to need maintenance. The roof, at some point, is going to need to be repaired. And you don't have the, the, the, monthly income coming in to take care of those things. I realize you just purchased this house, but if I were you, Cindy, I'd be thinking about a condo. Or a town home. Or a town home. Yes, that's that's 1 75. Yes. And you know, you bank, you know, 75,000 on this other side. Yes, you need to. You have to.

Starting point is 01:11:53 Yeah, to have some buffer because you're very, it's all real estate heavy at this point and that's not a great plan long term. You need cash for things that are legitimate. Like you're saying a roof and everything. And so if you go to ramsholutions.com and check out our trusted pros and find a great real estate agent and have them run some comps in the area. And hopefully you get, you know, 240 out of it or maybe a little bit more. If you've been there two years, maybe it's gone up 4%. I don't know. A little equity to pay the commissions on all of it and find something that would fit your situation, like what you're talking about. And a townhome usually is probably going to be the best bet, but it's going to be smaller.

Starting point is 01:12:33 But that's okay because you will have margin financially that I think is going to cause way less stress and that you're not strapped for cash where you're having to go pull equity out of your home. And that's the really hard part about this conversation. I want to pull that out. No one is saying that we don't care about pets. We're not saying that we don't care about the things that you want. But the truth is sometimes there's forced priorities on our list. And for you, cash and having a little bit of diversity, which is what Rachel was talking about, not everything in real estate. is a number one priority for you, whether you like it or not, it is the best thing for you to be, have a better foundation going into your later years. Yeah, and you got to think, Cindy, if you're going to be doing this with all these pets, more carpet is going to be destroyed. So you have to replace it again in 18 months, and you need cash to do that, right? So if you want to cash flow this lifestyle, which is fine, it just has to be realistic to

Starting point is 01:13:28 your numbers and it's not been. And maybe you can go volunteer at a shelter. Like find other ways to scratch that itch if you end up living somewhere where you can't have as many pets. I just there's more than one way. Oh gosh, I almost did it again. There's more than one way to skin a cat. Oh, no. That's wrong, isn't it?

Starting point is 01:13:46 That's not right. My pet. Tail wagging the dog. Skinned cats over here. I know. I'm doing the best I can. We love you. We love you.

Starting point is 01:13:57 We're pulling for you. And the best thing is, with all. of it, Cindy, is that you do have a paid-out house. Your hard work and diligence has allowed you to maybe make a different move where you have cash in the bank and you own you own something still, right? Yes, yes. So that's a positive where you're at. It's not a mortgage. You know, that's what I was thinking in my head. As I was trying to pull up the equity. I'm like, you can have equity. There is no mortgage. So yeah, you are free and clear, which is, that's a gift. So use that to your advantage. And you've lived a long life with a sick spouse and, you know,

Starting point is 01:14:30 that month-to-month feeling, you're used to that. But we're saying, change it up, do something different where you do have some buffer. I think it's going to give you a lot of peace in the long run. Yeah. Well, thank you so much for the call. And what she's accomplished truly is it's a part of what we teach. We want people to go into the later years of their life. We want you owning your home for most of us. That line item, the rent or mortgage is the biggest line item on our budget. And if you can have that solidified by having a paid off mortgage, it's one of the number one things that you can do to really solidify your financial future. And she's done that. Yeah. And with retirements along, saving for retirement. That may be set 4, 15%. So you're having both in tandem. So you're not in a situation where all your assets are in one thing and there's no cash. Absolutely. This show is sponsored by BetterHelp. I know a lot of you out there are trying to keep it together all the time. You show up to work. You pay the bills. You sell. smile at the right times, but then no one sees you snap at your spouse or lie awake all night

Starting point is 01:15:41 running through everything you'd wish you'd done differently during the day. Just because you're functioning doesn't mean you're okay. Talking to someone else is a great way to process what's happening in your life and get to the root of your challenges. That's where BetterHelp comes in. BetterHelp matches you with one of their 30,000 licensed therapist, someone you can be real with and finally put down some of the weight you've been carrying and come up with a plan for getting. well. They can help you get perspective and see the other side of your situation and help you with a plan for moving forward. BetterHelp therapists all follow a strict code of ethics and if the first therapist isn't the right fit, you can switch for no extra cost. Asking for help before you hit a wall

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Starting point is 01:16:55 Hello. How are you? I'm good, thank you. You bet. I've got a problem with my home. I've had it on the market since the first of the year. I've actually gone through two realtors on it. The home is worth $265, of course.

Starting point is 01:17:13 I will owe $0.15. 77. The other ones wrong for pricing I've had listed on it. Problem is, nobody's biting. Nobody's made an offer anything, and we moved out of it before we put it on the market. We were suggested to move out. We were told if we moved out, it would sell faster, so my wife decided to move us out. I still pay the mortgage, still pay the water and electricity.

Starting point is 01:17:41 I still pay a yard guy to go by there every two weeks. It's a nice subdivision. I don't know what to do with it. I'm paying on it and nobody lives there. It's in a subdivision. Are the other houses in the subdivision selling? They are here and there. They've been kind of running to the same problem I have been

Starting point is 01:18:03 with them being on the market for a long time. Do you know the average days on market in your area? Your realtor should know that. I was told me 90, 90 to 110 days. Yeah, national average median right now, I should say, is 60 days on the market. That's nationally. So, you know, depending on where you are, that could be different. So for Jackson, Mississippi, could be 90.

Starting point is 01:18:28 But not nine months. Yeah, it's been on the market for about, yeah, eight and a half months. Okay. So in your area, we just pulled it up. It's actually 70 days on market in Jackson, Mississippi. So that, I'll be honest, Alan, that's telling me that there is something. It's either the price. It's either the location, what it's next to, what's in the backyard.

Starting point is 01:18:53 The house itself, condition lives. If you had to be brutally honest. Or you have a terrible realtors and you're just getting, you know, people. I would go to ramsysolutions.com and check out our trusted agents because these are really high-driven individuals that we recommend. So I would look and probably interview one or two of those in Jackson. And I would switch realtors to it. If there's nothing glaring, that's super obvious, that something's wrong, like what Jade's saying. No, and the only feedback that I've gotten, because my first realtor, yeah, I didn't do a great communication job.

Starting point is 01:19:30 So I just kind of cut that one loose and just moved on. And we went back to the realtor we used when we bought the house to begin with. But if the only feedback you got was to empty the house out, my next thought would be. Let me finish. The biggest feedback I've got is nobody likes that all the bedrooms are upstairs. That is the biggest complaint I'm seeing. They like it. They love it.

Starting point is 01:19:56 You know, price is great. It's not, you know, because my price is not astronomical. I'm not looking to make it kill it. I don't even have a list for what it's worth. Well, I really. I think that. I like the bedrooms upstairs. What Rachel said, I think, is the exact thing.

Starting point is 01:20:09 that you need to do. I think you need to talk with one of our real estate pros, and they're going to be able to crack the code for you. Because there's plenty of houses I know that all the bedrooms are upstairs, right? And so, and I get that may not be everyone's preferences, but also I'd want to know how many showings. I mean, I bet out of 50 people, you're not getting 50 of those comments. No. Right? I mean, so, yeah, there's something's going on. There's not enough activity happening is what I would say, and they can help you actually pull some comps because maybe in the area, I don't know, of Jackson, It's maybe values have stayed, you know, consistent and you need to drop it a little bit. I don't know.

Starting point is 01:20:42 So, yeah, they'll be able to pull some comments and help you. Absolutely. Thank you for the call, Alan. Let's go to Allison, who's in Harrisburg, Pennsylvania. Hey, Allison, how can we help today? Hi. I was a public school teacher for 10 years. I've since left the field to raise our kids.

Starting point is 01:21:01 We'll be homeschooling them. Don't feel like I will ever be going back into. public school teaching, but I have a pension that's sitting there and wondering if I should pull that. I'm only 42, so I would get, you know, dinged in that area. But if I should pull it to reinvest it in our retirement that we have, which would get a better rate of return or use it to pay off our house. I'm just kind of wondering if the ding that I would get would be worth, you know, the value of those things. I would not use it to pay off the house, since, it's retirement money.

Starting point is 01:21:38 I am interested if you pulled the lump sum to reinvest. Did a 10% penalty? What's the penalty? I think it's 10%. I don't know the exact number. I didn't look that up. Okay. Yeah.

Starting point is 01:21:52 So I would look at that. I always hesitate to pull out long-term investments that have that penalty because, but pensions, depending on where your investments are within the pension, is going to make a difference. because sometimes some, you know, districts, they do it great. Yeah. And it's well invested. Yeah, and it's fine.

Starting point is 01:22:11 But if you pull the numbers and see the investments and think, oh, my gosh, I could be getting so much more because they put you in a really conservative type of investment that's not making a ton. And you run the numbers because you are so young that that ding now, you could make up for it, you know, in the market. Or if it's doing fine, a part of me would say you could leave it and then pull it all if you have that option. at retirement age and reinvest it then. Do you know what the return on it is? They target 7%. Oh, yeah, that's not great. And like I said, I'm not playing.

Starting point is 01:22:49 It's just kind of like sitting there. We're not contributing to it since I'm not working. Right, right. And I don't plan on going back. And we have other retirement investments that we have on the side through my husband's work. And then private things that I had invested in the 403B. we had rolled over to an IRA.

Starting point is 01:23:07 What's the lump sum of it right now that you would receive? It's 65 right now. I don't know what the penalty would be on it, but that's what's sitting in the new counter. You know, I might sit down with a smart vester pro to see what their thoughts are on it because I agree with Rachel. 7%.

Starting point is 01:23:23 I'm kind of like, I don't know. If you pulled that out, you would take a tax hit, the 10% penalty, I'm sorry. But then after that, you'd be invested in making 10, 11%. And so you would make back the loss, you know, pretty quickly. I think I'd want to sit down with somebody who knows more of the ends and outs on that. But that's what I'm leaning towards. I can tell you I would not pull out that money and put it towards paying off my house

Starting point is 01:23:50 because the truth is that money is earmarked for retirement. And that would be like us telling somebody to cash out there 401K to pay off their home. And we just wouldn't recommend that. You need that diversification going back to one of our previous calls. You want that money there. Yeah. That's a very good question. Was there anything else? No, that was it. All right. And we love you guys. We love listening to you guys. You guys have helped us out mentally. So thank you.

Starting point is 01:24:15 Oh, I love it. Thanks, Allison. Thank you so much for the call. I love that. All right. Let's take one last one. Renee is in Nashville, Tennessee. Hey, Renee, we're a little against the clock, but I think we can do it. Hello? Hey. Hey. So my question was if If me and my husband takes a $89,000 heloog on our home and use $45,000 of it to pay me and his debt off, does it make sense? And we have like $23,000 in our savings, but we didn't want to touch our savings. The total debt that you guys both have is $45,000?

Starting point is 01:25:02 Yeah. So why would you take out an $89,000 heat lock? What's the rest of that money going towards? So I didn't want to do another he lock. So the plan is to pay the debt off and eventually pay down on the $45,000 debt on the he lock, but still have the extra money because we want to eventually rent our current home in Nashville out and move to Dallas and buy another home and use some of that. he likes to put on a down payment.

Starting point is 01:25:35 Oh, gosh. Oh, Renee, you guys are doing way too much. And I think if you do that, it's actually going to cause you to go backwards. If I were in your shoes today and I've been in your shoes with $460,000 of debt, I would take the $23,000 that you have saved. I take 22 of it and I would throw it at the debt. Cut it in half. And then you and your husband, if you work like crazy people for the next year,

Starting point is 01:26:00 you can have the rest of that $20 some on $1,000. paid off and you'll be completely debt-free and you will have not borrowed against your equity. Yeah, the problem with that, Renee, is you start to move, when you move debt around, you feel like you've done something and you have it. And then sell your home in Nashville, okay? Use that money then to buy something in Dallas. Rent in Dallas for a year. Sell your home in Nashville.

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Starting point is 01:27:54 I'm here, Jade Gorshaw next to George Camel. If you were listening, I was with Rachel, but now I'm with George. Some call it an upgrade, some call it a downgrade. I'll let you choose. I'll call it a comeback. Let's go to Violet, who's in Arlington, Virginia. Hello, Violet. How are you today?

Starting point is 01:28:09 Hello, I'm on Baby Step 2. First of all, thank you for taking my call. Yes, ma'am. I'm on Babysip 2. I started in December 2025, and I am, I've got 37,000 paid. I'm now almost done with all my consumer debt except for my student loans. Wow. Yeah.

Starting point is 01:28:31 That's awesome, by the way. Yeah, I'm really excited. But my student loans are really big. There's a lot. And but I'm ready to face the music and I have a plan and it's going to take me a number of years, but I can do it. And I had some questions around it. My balance right now is $225,000. Okay.

Starting point is 01:28:52 The balance had balloons because I had it in forbearance for, 20 years. So it's really my fault that this happened. But I'm ready to face the music. I've been listening to this show. I heard your story, Jade. I know this is possible. I can do this. So I am going to start repayment next month. Way to go, Violet. Thanks. I'm really proud of you. Just that alone. I really am proud of you because a lot of people would stuff their head in the sand and kind of ostrich this situation. But you're like, you want to know what? It's time to go. It's go time. So I'm really proud of you. So $225,000 in student loans. Tell us about where did the loans come from?

Starting point is 01:29:28 Like, are you in your degree? Are you earning a good income? Tell us about it. 33. Now I'm a single mom. So I am working for myself. I am earning in my degree. Like I'm a consultant in the work in the field that I've completed.

Starting point is 01:29:45 So I have been burying my head in the sand, but I am able now to pay $3,750 a month on this. And I think I can get a. done in five years. But my questions are that the first one is that I have been hearing a lot from others online that their repayments or their payments have been lost by their loan servicer. And so I wanted to ask if like you experienced any of that or what kind of like best practices did you engage in when you were making payments just to track all your payments and make sure that they were all counted. I've not experienced that. The areas where I've found people experience that were on public service loan forgiveness where certain payments didn't count or the payments

Starting point is 01:30:32 were lost in that way. Like, hey, I thought I made this amount of, I thought I made 100 payments, but it's showing that I only made 70, so 30 payments were lost. Like, I've heard it in that framework, but I've not heard it in just my normal month-to-month bills. I'm making payments, and they're just not being applied. I have not heard that. However, I do think that with what you're doing, you're not just paying minimums, you're actively paying well above the interest and you're hitting that principle. You should be able to calculate and see that math actually happening in real time. And so I think that gives you the advantage to just be, you know, hitting it with an onslaught of payments and just, yeah, continue to track it.

Starting point is 01:31:17 Well, that leads to my second question. So the $225,000 is comprised of nine separate student loans, and I'm going to debt snowball all of that. Great. The first four are between 10 and 14,000 each. So I know this sounds maybe against the principles of like the baby steps and the debt snowball, but I wondered if it would make sense for me to save up like, you know, over two to three months to like make a lump sum payment and just pay that entire 10,000 or 14,000 just for those first four loans. I guess I'm worried that my payment.

Starting point is 01:31:54 are going to get lost. I just don't want to pay this thing twice. They're not going to get lost. You have bank statements showing that money leaving your account. So that on top of just save the PDF from your loan servicer each month, showing that your payment history, and you can always request a payment history as well from the servicer via email. So I think it's a, I think it's, I'm not going to call paranoia, but I don't think it's the real issue here. I don't want you to kick the can down the road any further based on, well, what if the payment doesn't count. Let's just start throwing as much as we can every month instead of saving up lump sum and then hoping that we actually throw it at the debt. Yeah. And I mean, you can, again,

Starting point is 01:32:32 to combat this, when you make your initial payment, make your initial payment first that satisfies the interest and whatever a little bit goes towards the principal and then make a separate principal only payment within that same pay, within that same statement period. And that way you can physically see the loan lower by that amount. And like George said with your statements, you're totally covered. I think that you are, I don't know, but I think that you're looking at this mountain and you're like, how can I tackle this? And it's like, part of your brain is creating an excuse and the other part of your brain is like, I'll feel better if I just pay off a couple of lump sums at once. I think you're just trying to find a way to like deal with this

Starting point is 01:33:12 in your mind is what it sounds like. And honestly, just minimum payments on everything attack the small. What is the smallest loan right now? You said between 10 and 14, but what's the smallest loan? The smallest is around 10,000. It's 10,500. Okay. So you're going to be done with that in three months. And you're going to be cutting into the next smallest one. I mean, that's really, really cool. And what you can start to do, Violet, is just these little mile markers that celebrate those small wins. And I think you probably already have it like this because I can tell by your personality, but have it tracked out ahead of time. So you know, okay, the first loan is going to be. done, when are we, September, October. It's going to be done in November. In November, I already

Starting point is 01:33:54 have on the books that I'm going out with my buddy and she's going to buy us both a cocktail and we're going to celebrate that and then have it tracked for the next one. And those are things that you can do to really fire yourself up and get excited about this because that momentum is what's going to carry you through because five years is a long time. And George, let's talk about this for a minute because it's worth saying, you know, most of the people who do the baby steps, they're through baby step two. It's like a year and a half to two year deal for most people. That's the average. But and when you're doing that in two years, a year and a half, yes, you're balls to the wall. You're cutting. You're cutting everything out of your budget. You're living scorched earth.

Starting point is 01:34:33 It's totally possible to do that. When you start creeping up on five and six years, you have to be strategic because you can't live in that state of mind for five years. It's very, very difficult. So maybe you do this violet and you're like, I'm going to do. do a one and a half two year sprint and I'm going to like sprint just run it all off, leave it all on the court. And then after two years, I'm going to, you know, do something for myself. Maybe it's something that you need to upgrade. Maybe it's something that you need to do to just kind of feel your income a little bit. And then you do another year sprint. And then you kind of take a little bit of a breather. But five years of scorched earth, it will take a toll on you. So you need to be

Starting point is 01:35:14 thoughtful and set those milestones ahead of time. And you tend to speed up on. the tail end. Oh yeah. So know that just because right now on paper, this is what it looks like, you're probably going to make more money. You're probably going to find ways to sacrifice deeper. And so all of that can speed it up. So I would go, okay, what does a four-year plan look like? Well, that's 4680 a month going toward these loans. What does a, let's say I wanted to do it in 36 months, three years, 6250. So now you're going, well, I bring home 10. Can I live off of 3750 if I really got intense? I think you might find the answer is yes. And the short of the sacrifice, You know, the more likely you are to finish this thing.

Starting point is 01:35:50 Also true. Yeah, that's so good. Anything that you can do to shorten this, if there's opportunities that come up, if you're like, you want to know what? Maybe my rent could go down or maybe. Take those opportunities because to George's point, if you can shrink this thing by a year and a half to two years, that's everything. Get your life back. People ask me all the time. George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the every dollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average every dollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download.

Starting point is 01:37:15 every dollar for free and start saving more money right now. Well, George, you already know this, but the people need to know that Ramsey is taking over an entire cruise ship. It sounds violent when you put it that way. I know. It's like we're pirates. It's a mutiny. It's not.

Starting point is 01:37:43 We're not pirates. We're just taking a cruise together. It's called the Live Like No One Else Cruise. It's going to be so much fun, guys. March 14 through 21st. Next year, it's seven nights in the Western Caribbean. We're going to the Bahamas, Jamaica, Grand Cayman. Kazumel, so much fun. It is a full Ramsey takeover. This cruise is going to have everybody on board,

Starting point is 01:38:03 myself, Dave Ramsey, all the Ramsey personalities, George Camel, George Campbell's wife. It's going to be a party. My husband. Who isn't going to be there? It's a shorter list. I know. What's fun is there's no strangers on the boat. It's all like friends we just haven't met yet. Yeah. We've all got many similar things in common. But we're going to do the largest debt-free Scream, which that was one of my favorite things that we did on the last cruise. Obviously, guys, there's going to be lots of great content there. Dave's going to be doing some new wealth building content. There's going to be live tapings of your favorite Ramsey shows. So much more. Remember, guys, this is the only place that you're going to be able to experience this level of

Starting point is 01:38:41 Ramsey. So if you're a super fan. This is the most Ramsey you can get. It really is. And remember, it's a limited. How can I say? Like, it's an exclusive party. Yeah, not all in our Are you invited. Yeah, this is the negative cell. This is not for you. If you still have debt, you don't have your emergency fund. But if you were consumer debt free, you just have the mortgage left, you're in Baby Steps 4, 5, 6, 7, you are welcome. We want to celebrate the hard work that you've put in, the milestone. Let's mark the moment. A lot of people don't get to do that. Yes. You pay off the mortgage and then you go, all right, get some back to work tomorrow. Oh, we don't like that. You need to celebrate with a cruise. And for those of you who are on Baby Step 2, let this be aspirational for you to go the next year or the year after that. But if you're interested, go to Ramsey Solutions.com slash events to book your cabin. All you need is a $600 deposit to secure your slot. All right, let's go to Elena in Harrisburg, Pennsylvania. Hi, Elena. How can Georgia and I help today? Hi. My father-in-law established a trust for our son when he was young, and we know very little about it, except that it's for his college education. My father-in-law is very private with his money, and he hasn't given us any details on it. My son is in 11th grade now, and he does not know about the trust, and we don't know when we should tell him about it, and also we don't know what all we should know about the trust. at this point. Well, George, I'm sure you guys covered so much of this in investing essentials. I feel like you're the one to knock this home. Setting up a trust is a pretty aggressive move to say for a kid's college. So why did he set it up in the first place? Did he talk to you and say, hey, I'm going to

Starting point is 01:40:26 set this up for college and this was back when he was a baby? Pretty much, yes. Yeah, he was two years old. He just basically told us that's what he was going to do. And we know that he did set it up. And that's all we know. So no clue how much is in it. What's even in there? Is it cash? Is it investments? Like, we have no idea. Exactly. And if you talk to him and just said, hey, dad, he's a junior now. We're looking at colleges. We want to make a game plan to make sure that he goes debt free. Can you let us know what's in the trust and how we access it? He would say, none of your business. No, if he would say that, I think it would be a very awkward conversation just because he's so

Starting point is 01:41:10 private. He doesn't like to share. But he made the trust for your son. And that's the part that I would push on because this is your boy and you kind of have a right to know about something that has the potential. I don't know, but it seems like it has the potential to have a major impact on him because you don't know how much is in the trust. You don't know when he would have access to the money.

Starting point is 01:41:30 If it's 18, you need to know those things. And I also don't like that your son would be blindsided because if there's, I mean, I don't even know if you can guess Elena, but are we talking hundreds of thousands? Are we talking million? Like, how much wealth does your father-in-law have? He's very well off. He definitely can afford to do a trust. If I had to guess, I would I would guess around 100,000, but I really have no number to. go off of. But the part that worries me is that you're scared to even ask him about this. Yeah, I mean. And why isn't your husband asking? The conversation, well, yeah, it would be, it would be, we would both go to him and ask him. And we could. Just say, hey, we're starting to look at colleges. We know you set up a trust for his education. We're, we, can you get us a copy of the trust document? Can you tell us who the trustee is? Can you tell us any, if there's

Starting point is 01:42:32 distribution triggers, anything we need to know as we make plans. Then you can also pick a school. You can pick a school that he can afford. Everything is predicated on knowing what's in the trust. Because if there's $10 in it, well, we got to make a plan for ourselves. And if there's a million dollars in it, that changes the type of schools we look at. Absolutely. Okay.

Starting point is 01:42:50 So I would just, I mean, he set this up for your son. So there's no, this is private. You involved, he involves your son. Yes. So this is your business. Okay. And the time is of the essence here because your son is about to be looking at the colleges. Right.

Starting point is 01:43:09 And I don't, that's the other thing. I don't know when to tell her son. I don't want it to dictate whether or not he goes to college. I would wait until you know more info about the trust because you don't want false promises of, hey, granddad has a trust for you. Everything's going to be great. Yeah, that's the order. Yeah, let's talk about that order of events.

Starting point is 01:43:26 I think George is right. The first thing is you guys need to get the information. And the truth is, regardless of that information, we kind of need to treat that as like, if it's here, great, if it's not great, because we don't know anything about it. But it shouldn't stop the conversations that you guys are having with your son regarding further education, whatever that may be. You do need to have, I mean, you said he's 11th grade. So hopefully the conversation has already opened up about, hey, if you are choosing to go to a university, here's what the options are. You know, here's what your mom and, what mom and dad have.

Starting point is 01:44:00 here's what we expect from you. We expect that you have a part-time job and that you'll contribute, you know, a certain percentage of what you make. We're expecting you to start applying for scholarship. Like, whatever those expectations that you guys have for him, we're going to do community college for the first two years. You guys need to start saying that to him now. We can't wait until it's time to start applying for schools and then him be like, well, he gets into the dream school and realizes we don't have the money. So I would, I mean, if he's a beneficiary, the trust, he should have a legal right to the basic information of the trust. And so if your dad is unwilling to talk about it, say, hey, is there a trustee or an estate planning attorney we can talk to about this if you are uncomfortable for some reason? Because we need to get to the bottom of this before we can make our plans for college. Okay. Have you guys saved up on your own, or were you all banking on this being his education funding? We have not saved up. Like I said, my father-in-law is definitely capable of creating this trust for him to cover his college. So, and that's, that is a little scary for us because we don't know. And that's, that's why we went to start

Starting point is 01:45:15 the conversation now, which is hopefully not too late. But if we do need to give money to it, then we know. Yeah. That's what you want. You just want the basic facts we can move forward. That's all you're asking of him. Now, is your son, I mean, he's in the 11th grade, might know this by now, maybe not. Is he the college type? Are you seeing him as the type who will go to university? Or is he more of an entrepreneurial, more of a trade school? What do you think? At this point, he doesn't know, and he kind of goes back and forth between talking about going to college and not. And I think he's leaning more towards not going to college. And those are some of the other things that I'd want you to be able to talk about with the father-in-law, which is if little

Starting point is 01:45:59 Jimmy decides that he doesn't want to go to college, what are his options? Because we don't want him to feel pressured to go a route that he wasn't going to go or to feel like this is the only, does that make sense? Those are all questions that you guys are. And they're just questions. They're not you trying to tell him what to do with his money, the father-in-law. It's just, hey, we just want, we just want to know what's going on. This is crazy. This is some chaos he's created. It is. I mean, we talk about all the time. I know Dave says all the time, when you're estate planning, you have to bring the others into the conversation. You don't want anything to be sprung on them.

Starting point is 01:46:33 It's unfair. And then it's kind of like everybody's left to figure it out and you're having a nice sleep. Yeah, we're not asking for like private information about your life. That's fine if you want to remain a mystery man. But you don't set something up for a kid with him as a beneficiary and then keep it in the dark until the very last second. That's not fun.

Starting point is 01:47:23 Hey guys, Rachel Cruz here. And I'm so excited to tell you that the brand new 2027 Ramsey goal planner is available now. Guys, this is the only planner with exclusive monthly content from John Deloney, Jade Warshaw, and me to help you set clear goals and actually stick to them all year. But here's the thing. These sell out every single year. So don't wait. Order your new 2027 Ramsey Goal Planner for 4997 at Ramsey Solutions.com slash store. That's ramsysolutions.com slash store. All righty.

Starting point is 01:48:09 Our Ramsey show question of the day is brought to you by Y-ReFi. Sometimes the hardest financial step is the one you've been avoiding. If your private student loans are past due, Y-ReFi can help you explore a low fixed-rate refinancing option and payment plans that are tailored to your circumstances. Go to whyrefi.com slash Ramsey. Remember, it may not be available in all states. Today's question comes from Dylan in Delaware. I'm 25 years old and my income is commission-based.

Starting point is 01:48:37 year I should earn close to $350,000. I have roughly $100 grand in student debt, about $5 grand in credit card debt, and my girlfriend has roughly $11,000 in student loans and credit card debt. She wants to get engaged soon, but as financially unstable as we are, it doesn't make sense to me to take that step yet. Should we wait until we're debt free to get married or get married and pay our debt off together? Goodness gracious, this is hilarious.

Starting point is 01:49:03 It's a quondering. Making $350 grand and you're unstable? I know. average Americans would like to have a word with you, sir. I know that's right. At 25 years old. He's killing it. That's why I said,

Starting point is 01:49:13 Cheching earlier. Can I be honest? I don't think he wants to marry this girl. He might not. He's maybe looking at her going. He's making excuses. Because the truth is he could knock out all of his debt in a year. Making $350 and he's got, what, $105,000 in debt?

Starting point is 01:49:27 Yeah. That's gone in a year. Yeah. And his girlfriend's debt is gone if they get married. You know, if they go ahead, let's say they do want to get married. They get engaged. They get married. Her debt is gone.

Starting point is 01:49:37 in two seconds as well. He's going to burp $11,000 and pay off this debt once they're married. So yes, if you want to get married to her, get married, get engaged, get a ring, you'll do that next paycheck. Yeah. And get engaged and get married. And by that time, honestly, you'll be debt free. And the day you come back from the honeymoon, you can knock out her debt. So let's discuss that for a minute, because I think, especially he's young, and I think if there's people listening who are, you know, in their early 20s and they're like, I love Ramsey Solutions. And they haven't found that special person yet. Some people sometimes think that we're very, if this person has debt, don't marry them, or if you both have debt, you need to wait to get married. And it's actually, that couldn't be further from the truth.

Starting point is 01:50:17 I think the bigger thing to think about when you're dating someone and you have a very clear financial perspective is to get to know what their financial perspective is. Yeah. It's very telling, honestly, if the other person has debt and it's starting to change your mind, now I get if it's hundreds of thousands and you're like, I know what I'm signing up for. but it's beautiful when you meet a couple in the debt-free stage and they said, yeah, we got married and you know, she came in with all this debt and we just attacked it together. Yes. I'm like, great, that couple is going to make it through anything. Yes. If you are willing to take on your spouse's burdens financially, what aren't you willing to do for them? Yeah. That's such a big thing to do. Absolutely. But if you don't have the conversation and you're just thinking, oh, we'll get married,

Starting point is 01:50:59 I'll pay off her debt. And you never found out that he or she was a princess to begin with. And Now you're fighting the fact that they just keep spending and spending and spending. It's like, well, you never got to know their financial philosophy. Yeah, you've got to make sure you're on the same page beforehand. Too many people go, we've been married for three years and I guess we're talking about money now for the first time. Yeah. Like this is a huge problem. Talk about it beforehand because those values are hard to align after you're married.

Starting point is 01:51:25 Yeah, we say it all the time. Religion is a big one. You want to know, like, what do you think? Like, what guides your life? That's a big one. kids. How do you see parenting? Do you want them? How many do you want? Do you want them? How do you view parenting roles and things like that?

Starting point is 01:51:42 Money is a big one. Am I leaving anything out? Family in-laws? Gosh, maybe today's world, maybe politics. I mean, that's where if you think about most of the calls where there's dysfunction, they're around some of those things. Yeah, absolutely. I love it. All right, let's go to Rose, who's in Washington, D.C. All right, Rose, you're on the line. How can we help? Hi, guys. Okay, so I

Starting point is 01:52:04 recently purchased a very expensive home. I rushed into it as an emotional process. I didn't have the best agents and I got a little bit of awful advice, but also I should have been a little bit more patient. And so, but anyway, I'm in this expensive house that I can afford. And I, um, I have wondering if I do I kind of cut my losses and sell this house in two years, stay in there for a little while? Why two years? Because I just moved in a few months ago. It hasn't even been in here.

Starting point is 01:52:54 It hasn't even been six months. Okay. And I'm now discovering that there are these very expensive repairs that you can done. in the house that you just bought? In the house that I just purchased. Tell us the numbers. Tell us what you paid for the house.

Starting point is 01:53:11 Tell us what your mortgage is every month. House $750. Okay. My mortgage is $5,200. And what's the mortgage balance? $750. You didn't put any money down? I did, I did.

Starting point is 01:53:28 I lied. I'm sorry, $7.7.12. Oh, yeah. you put the bare minimum down. So the mortgage is 712? The more, what I owe, I put,

Starting point is 01:53:39 I put about $66,000 down. Where is that money? I own, I have, I have, okay, so part of it was just money that I saved,

Starting point is 01:53:49 and then I took about $33,000. I borrowed $33,000 out of my retirement, which I'm paying back right now. Okay, but if you're telling me you put $60,000 down on a $750,000,

Starting point is 01:54:03 house. I'm expecting the mortgage to be less than $700,000. No. Well, my mortgage is $52. I'm talking about the full loan. Not the monthly payment. The balance compared to what you paid for the house. So sales price versus mortgage balance. That's what we're talking about.

Starting point is 01:54:22 Right, right, right. I thought it was about $7. Oh, maybe it's a little under seven. A little under seven. Got it. That's your mortgage balance. Okay. What do you make every month? What is your after-tax monthly income? So I'm averaging about $16,000 a month. I am commission-based. I'm in sales.

Starting point is 01:54:42 Okay. Okay. That's good. So I don't make anything under $200, $225,000 a year. So ideally you'd be making $20,000 a year for this to feel. Or $20,000 a month. I'm sorry, $20,000 a month. Thank you. And again, here's what I want to check. Is this after-tax only? Or are you doing after-taxas? after health care premiums? Yes. When you get to that 16,000 number that you gave us? After taxes, after insurance, after the little bit of retirement that I'm putting away right now.

Starting point is 01:55:17 So if we add back in your insurance premium, if we add back in what you're putting aside for investing every month, not quarterly but by month, what will that turn that $16,000 into? Um, probably about 18? 18. Right. Okay. So now this is not, nothing's on fire. Yes, there were mistakes made. You're frustrated with yourself.

Starting point is 01:55:45 You rushed into it. The agent was looking for a commission. You didn't do your due deal and saw inspection repairs. Let's put that in the past and just look toward the future and go, what's the next step? So do you have savings right now? I do. How much? I do.

Starting point is 01:56:00 I have a pretty. good, like I have six months. Well, because I'm in sales, I was like, that was my priority. Good. Good job. So I have six months worth of, um, of my mortgage saved up. Wow. Just of the mortgage. Okay. So you got like 30 grand sitting in savings? Yes. Okay. What are the repairs going to cost? Have you got estimates on that? Oh my goodness. Different bids? So yes. Yes. Yes. So I got, um, uh, anywhere between seven and a half to eight thousand. Great. So you could write a check today and get the repairs done. Okay. That's a pretty, I mean, I feel like you are real hard on yourself.

Starting point is 01:56:38 You have the money to pay for repairs. Yes, the mortgage is a lot. I'd like it. I'd like to be slightly less, your income slightly more. But you don't have to rush into selling this thing off. And I don't know that you need to sell it off if you like the house. I don't know and tell me if I'm wrong, Rose. My guess is this is the most expensive house you've purchased.

Starting point is 01:56:59 This is the first time you've had a mortgage that's this high. and you're like freaking out because you're like this this doesn't feel right to have a mortgage that's $5,000 but you're taking home almost $20,000 a month like that's your that's your pay and so ratio-wise

Starting point is 01:57:14 it's a fair amount if we're close to the 1819 that we think we are ratio-wise it's a totally fair amount I think you're just feeling like oh my gosh what if something changes in my situation what if my job changes

Starting point is 01:57:27 what if yes I think that's what you're feeling and if you are feeling that And you reevaluate in two years, like you said, and you're like, you want to know what? I would feel more peace if I just downsize. I think that that's a totally fair place to be. Or just aggressively pay it off over the next seven years. Yeah, that'll give you some piece too. Whether you're a small business owner or an individual, doing your taxes is not fun.

Starting point is 01:58:06 It's like an algebra test where if you get anything wrong, the IRS can make you pay with actual money. But if you work with a Ramsey trusted tax pro, you don't have to be a tax whiz because they are. They know taxes like the back of their hand, which makes filing super easy. So work with a Ramsey trusted tax pro and get back to doing what you love, which probably isn't taxes. Visit ramsysolutions.com slash tax pro and fill out the referral form to get connected to a Ramsey trusted tax pro today. All right, back to the phone lines. We go. We've got Carson, who's in Dallas, Texas on the line next.

Starting point is 01:58:50 Hey Dallas, George and I are here. How can we help? So I am a freshman in college. and my brother is a software engineer in favor. I'm actually from Arkansas, but Dallas is the closest major city. But my brother is a software engineer in Fayville, Arkansas, and we want to start a Christmas site installation business, and I was wanting y'all's opinion on it.

Starting point is 01:59:22 Okay, why Christmas lights? So this past summer, I pressure washed and I made a lot of, I played football in college and I needed some money to save up to come down here. And I pressure washed this summer. And I made a lot more money than I was expecting to make. And I really enjoyed it. What did you do with the money? Saved it. Nice.

Starting point is 01:59:51 How much you got in savings? Not much now. I think I have like $1,300 left. Okay, so what happened to the rest of it? I mean, I saw like books for school, then traveling. I live. It's like four hours from home, so when I actually do go home, gas, and then food, all the living expenses. Okay. So do you have any debt right now? No, I don't. Fantastic.

Starting point is 02:00:25 And so you want to start this business with your brother, who's a software engineer. How does that play into the Christmas lights? You gave him this idea, and he was like, yeah, I'm in. We'll install these together. So we wanted to start something for quite a while, and we've researched a lot of different things and talked about a lot of different things. And Christmas lights was something that came up because we were talking about pressure washings because I would go up there and visit with him in the summer.

Starting point is 02:00:53 summer and we would talk about how much money I'm making and like what I'm doing. Yeah, why not pressure washing? What made you land on Christmas lights? Yeah, because it's not all like the business for pressure washing is a lot, is down a lot in the winter time. And so that's when Christmas lights are up the most from like October to. So would it be both? Would you do one, is it seasonal?

Starting point is 02:01:19 We do pressure washing on the other part of the year and then the Christmas lights on the other part? Yes, yes, yeah. Got it. Okay. Now, we would do both. What does it cost? Because I mean, I kind of have in mind what I'm thinking. I have a couple of thoughts here. Why do it together? Why not one of you just say, hey, I'm, why wouldn't you just say, hey, yeah, I think I want to start opening up this business. And it'd be cool if my brother wants to work with me or work for me on it for a while versus it's got to be a partnership. We've got to do this deal together. Like, what's the benefit to you of linking up with him on this? Um, so I would have somewhere to live. I would stay with him. And also, he would also keep his job for as long as he can. And depending on how much we scale the business,

Starting point is 02:02:11 um, is whether he's going to just completely drop his job income. You do know Christmas lights is like a one to two month gig. Mm-hmm. So I wouldn't be dropping a full-time job for a one-month to two-month situation. What if you just started out? What if you just moved up there and you started with the pressure washing? And you just said, hey, can I stay with you while I start seeing how many pressure-washing clients I can get? And you just make it your full-time job that I'm going to get as many pressure-washing clients.

Starting point is 02:02:43 And I'm going to just build slowly using the cash that I have. I'm going to start with the pressure washer I have. And once I get enough clients and I can save up a little bit more money, you know, and just go very, very slowly. And then as the pressure washing part starts to take off, now you have cash flow. Now you can start saving up for whatever infrastructure you need to do the Christmas lights. And I would largely be doing this on my own.

Starting point is 02:03:06 I wouldn't hitch my, what is it, hitch my wagon to someone else's cart. Is that right? Cart to the wagon. I wouldn't hitch myself up with someone else if I don't need to. And I don't think you do. I think partnerships make this get really muddy, really quickly. Because what happens when he wants out? because he's tired of it

Starting point is 02:03:24 or would rather focus on software engineering or gets a promotion or moves. Yeah, because it's two people you have to be paying. Buy him out. So that's the part where you really need to look at forming a partnership agreement if you're going to do this, so you're both on the same page

Starting point is 02:03:36 with all the what ifs. Yes. And then what must be true to start this business? How much is it? We're looking into it to start it. It would only be around like $4,000 to $5,000. Okay, where is that money going to come from? he has he has money saved up he has like he has that money but after that so now how does this work

Starting point is 02:04:01 he put in all the money and you didn't Carson I got to be honest with you I got to be honest with you I feel and I'm not trying to point a finger but I feel like you're kind of leaning on him for your deal you're like I got to I got to move up there where he lives I got to move into the house with him so I'll have a place to live he's got the money to do this so it kind of feels like like, hold on a second, it just kind of feels like you're too leaned on him for something you're trying to do with your own life. And he's got a job. He's software engineer. Yeah, sounds like he's doing fine. He's going to have to leave his thing to do. Does that make sense? I just don't feel like this is set up. The foundation of this doesn't feel set up in a fair

Starting point is 02:04:44 sense. And I feel like you're too leaned on what he can do for you versus you going out and doing something for yourself. Is that fair enough? Yeah, I understand where you're getting to, but where I am right now, I am in a town of 2,000 people in the closest place is Pine Bluff, which is an hour and a half away.

Starting point is 02:05:05 Okay. And there's 30 people there. So why are you out there? What are you studying? I'm studying finance, and I play football down here. And the reason I came is because I get a large amount of schools. paid for. Okay. So I think then let's let's tackle one thing at a time. If you're there to go to school,

Starting point is 02:05:27 go to school. Like, play your sport, do that thing. Pressure washing is not going anywhere. If you want to do some side hustles like that, but I wouldn't go just starting a business willy-nilly. I would just make it a side hustle, try out a few people's Christmas lights if you want this winter, get a feel for it. And then if you love it and the margins are there and you're like, I can scale this thing, do it with your own cash before you bring brother into it as the sort of financier. Yeah, I agree. It's just going to get, we've seen it get messy too often. And make sure you do it properly if you're going to do it. You need to form an LLC. You need general liability insurance because you're up on ladders. You're messing with people's gutters, on houses. You need to

Starting point is 02:06:05 make sure you're protected. Yeah, absolutely. And I tend to say, I'm sure there's plenty of partnerships out there that are doing just fine. But honestly, if you can just do this on your own, it's your first business, do it on your terms. That way, everything is operating according to your values. You're not having, because what if your brother is like gets this grand idea that requires debt and you're like, I don't want to use debt? And now you guys, do you see what I'm saying? Everything has to go through each other. So. And it's, well, Carson's doing all the work. Brothers not getting on the roof. He just wants to be part of the business. And so now it's like, well, I'm putting in all the hours and you're just doing some accounting on the back end or whatever it is. It's going to feel

Starting point is 02:06:44 unfair at some point. Rarely does it feel like we're both putting in 50-50. Generally, each partner thinks they're pulling the other's weight. That's a very good point. And that's where it gets messy and resentment bubbles. But it sounded like a great idea up front. Like, this will be fun. It's a way for us to bond. I'd rather you bond over going golfing or something. Absolutely. Cleanliness is what we're after. A nice, clean plan. Well, let me go back and read the scripture and quote of the day because I opened up hour for George without doing it. People were wondering. I know. I broke the, I broke the chain. here. I hope there's no bad luck or something in that. It's fine. God is a gracious God.

Starting point is 02:07:20 He's a gracious God. As a matter of fact, Psalm 1832 says, it is God who arms me with strength and keeps my way secure in spite of the fact that I did this incorrectly. And then Sarah Blakely said, I think failure is nothing more than life's way of nudging you that you are off course. And so I have just been nudged that I did go off course. You've been humbled. I have been. I love it. Oh my goodness gracious.

Starting point is 02:07:48 All right, George, I love these quick questions from social. They're just a quick way to say something, you know, just a little shout out. What's the recommended dollar amount percentage of take home pay that you can budget for fun money after you complete baby step three? Oh, I'd make it reasonable. I'd be in agreement with my spouse. And you know. You know.

Starting point is 02:08:07 You get the feeling. If it's $1,000 out of your $3,000 take home pay, that's bad. Yeah. It's not a percentage. It's a vibe. Exactly. All right, guys, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

The Ramsey Show - It’s Time to Face Your Financial Reality

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