The Ramsey Show - Smart Financial Decisions Beat Big Risks

Episode Date: October 9, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Campbell. My co-hosts today, Jade Warshaw, and we're taking your calls at AAA 825-5-225. That's how you jump into the conversation.

Dan is in Charlotte to kick us off. Dan, how can we help? It's great talking to you all. Thank you for taking my call. Absolutely. So I'm in a situation where my son has consistently been in and out of debt. At one time I had him come home and live with us so we could help him clear out his debt. I paid about half his debt off. And so now he's back in the same situation again.

He has some relationship problems. I think he struggles with depression and anxiety. And right now he is flat broke. He crashed his car while doing deliveries, so he doesn't have a car to make any money. And we got him through this month's rent, but we don't know how the next month's going to look in thereafter. So my question is, you know, I don't want to throw money away and not have him make any progress, but he does need help too. And I don't know, he doesn't seem to be able to find help on his own. And the advice I give him, sometimes he takes, sometimes he doesn't.

So it's kind of a mess. I'm not sure where to go with this. You said that he needs help. You mentioned anxiety and depression. I wonder, is he getting the mental health that he needs? The mental help that he needs. Is he seeing anybody? Is he doing anything on that side of the equation?

because the way it sounded, it kind of feels like that's kind of affecting this entire situation? I think it is. He's been to a few therapy sessions that he had to pay for himself. He doesn't have any health insurance, and so he's not able to go to those anymore. I tried to get him to seek public assistance to be able to do those things. But it just doesn't seem like he knows how to navigate the system. He's out in California. I'm here in North Carolina, so it's very hard to help him to manage that situation. How old is he?

35. Oh, wow. Has this been going on his whole adult life since he graduated high school? Yes. He's been in and out of jobs. From my understanding, he's a very hard worker, but he just can't maintain a good working environment. What happens? What takes place? I think he just gets overwhelmed. He's a loner type of person, and I think he gets overwhelmed with a lot of people around him. He's been doing like DoorDash deliveries, and he's doing pretty well at that because, you know, he's his own boss,

and he doesn't have to interact with a lot of people. So I think that's probably the way he needs to go. But I do think he has probably some – he has an own-and-off relationship. And it's off now. And I think that contributed to a lot of things recently. Wow. I mean, I'm not sure, but a lot of what you're saying, Dan, is leading me to believe that this is not at the core a money issue. I think at the core, it sounds like more of a personal issue, more of a mental health issue.

However, going back to your initial question, which is, you know, you gave him the money to pay off the debt, he's right back in. How much money did you give him the first time? or that you used to pay off the debt? It was probably around between $7,000,000, something like that. And how much does he have now? He goes over $10,000. $10,000. So what's his, if you could describe his lowest low, what's his lowest low been?

I mean, has he been homeless? Has he been, what's that look like? Um, Lois Lowe is, um, um, probably now he's got, um, very, um, sketchy living situation. I guess have shelter, um, but, um, is it dangerous? Um, you say sketchy. Are there drugs involved? Like what, what level, if I looked into his life, what would I, what would be my synops? It's not up to, um, residential standards. It's like a commercial refit that's not zone for residential. Okay. Do you think there's any substances involved or what do you think?

I don't think so. Okay. If I were in your shoes, if this were my kid, I mean, this is real hard for me to say, and I'm sure George has some opinions, I think I'd be invested in making sure that he stays someplace livable at the very least. What I hear that my concern would be is that his mental health would cause him to end up in a homelessness situation. And I would, I would try to help prevent that. But at the same time, you've got to be clear on your boundaries because I just wonder if some of this is allowing him to feel some of that pain to kind of shake him up. But I also don't know to what extent the mental side of this is going. So I say that very lightly because there

may be some real things that are impending, you know, impending his ability to make good choices. Has he asked for help, or is this you kind of stepping in, checking in? Well, he did ask for help, and we actually, I got him on a budget about a little over a month ago, and he was doing deliveries and starting to make headway, although he wouldn't always work, maybe because he, you know, gotten into depression that day or something relationally happened that threw him off kill. filter. We weren't making progress, but then just recently when he backed his car, then that kind of sunk him. And there was no insurance?

No. The wreck was his fault, and so he didn't have collision. It's just liability. Yeah, I mean, I got to tell you, Dan, the way you're describing this, and I know this is a very short call. I want to start by saying that. But the way you're describing him, I'm not picturing a 35-year-old man. It almost sounds like you're talking about somebody who's 18 or 16, or I'm not getting that sense of... His growth was stunted at some point. I'm not sure what happened or, you know, was he fine through high school?

Well, so we had him tested as a child, and he was never diagnosed as being on the spectrum, but he has those tendencies. Yeah. It's like socially, the soft skills aren't there? Yeah. Yeah. Well, I'll tell you this, Dan, I wish I had a magic wand could fix it. I'll tell you this.

If you can use money to help him survive, your money cannot help him thrive. And so that would be the goal is to make sure that he isn't homeless, that he has safe, he has shelter. And as much as you can, I would put your money directly towards those things versus giving him the money. Or even mental health care, putting it directly towards that. If he can commit to going, hey, I'm going to go once a week to see this therapist locally and see a doctor. anything you can do to help him with his health and help him get a career, those are the two best uses of your time and money versus just trying to fund the misbehavior, clean up the debt before it comes back. That's just going to be a game of whackable until we can get his health and his career under control. Because right now DoorDash, here's the problem with DoorDash.

If he doesn't feel like it, he's not going to do it and therefore no income. I'd rather where there is some expectation, dude, you got to wake up, shower, and be there by 8 a.m. or else you lose the job. I think he needs some structure in his life right now more than anything. So that's the part you can encourage him as a dad if you have influence in his life. If he has friends, think about those kinds of people. Who can talk some sense into him, be a mentor for him, be a coach for him? That's what he needs right now more than a paycheck. I wish you the best of luck.

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Anthony is in Virginia Beach up next. Anthony, welcome to the show. You with us? Yes, sir. Hello? Good, good, good. How are you doing? I'm doing well. How are you? Fantastic. How can Jade and I help? So basically, I make $150,000 a year plus sometimes. Last year I made it just under two.

Nice. I made a significant amount of debt. I just financially just kind of, I guess, stupid. I have to get the confidence to kind of call you guys. I mean, I'm just trying to find out where I should go or what I should do and maybe a little bit of financial advice. I've been watching Dave for about six months now. Nice. How old are you?

But I'm 34. Cool. Are you single? Married? I actually just got divorced last year in August. Sorry to hear that. Was that part of the sort of unbridled spending? Or part of the divorce agreement? No, so unfortunately, I mean, I grew up with not a lot of, like, guidance in my life as far as financial. So, but I am the first person in my family to actually make like a substantial amount of money.

My family's always been on the poorer side. And then when I started making money, I was making just irresponsible financial decisions when, you know, buying things that I shouldn't have been buying. And we just racked up a bunch of debt and it got to a point where it put a lot of financial strain on our marriage, which caused the divorce. I'm sorry. And then, yeah. So this is your wake-up call. I'm sorry? The marriage blew up, and this is your wake-up call, going, what am I doing?

I make $150 to $200,000 a year, and I got nothing to show for it. Nothing. And I'm living paycheck-to-paycheck, so. Yeah. You're not alone. You're not alone. If it makes you feel better, it's not a great bar to set, but a third of people making six figures are paycheck-to-paycheck.

And I just pick up on a lot of shame in your voice. I can tell that you look back on that, and you, feel a lot of remorse and wish that it had been different. But this is the turning point. I mean, the truth is everybody has that point that kind of fork in the road where they go, all right, what I was doing is not working. And you get to choose if you're going to make a change or not. And it sounds like you are willing to make a change, which is really all that matters at this point, is leaving what you did back there, learning from it and going forward in a new direction. And I think that George and I can help you do that if you're open to it.

100% yeah i mean i the main reason i wanted to reach out is unfortunately i did have a family member passed away uh relatively recently a few months ago and i wasn't expecting anything but he had left me inheritance so i mean i just i also wanted to i don't know anything about investing or i have no retirement i have no 401k you know i just i was just stupid you know i was childish and immature and like looking back at it now i really regret it um how much was the inheritance but i just It's going to be for 160,000. How much debt do you have? I have about, well, I've just paid off 18,000, but I still have another, I believe, 60.

60. Not anymore. I know it. You've got to have zero debt with $100,000 left over. Do you see my math on that? It was a magic trick I just did. Yeah. I mean, this family member just gave you an amazing blessing.

You got like a get out of jail free card. So the question is, are you going to squander it or are you going to use it to catapult you to better decisions in wealth building? Exactly. And that's why I wanted to, you know, reach out to you guys. I don't want to end up in the same position. I'm in now. I want to leave something from my children.

I have two girls. How old are they? Two-time cancer survivors, nine and 13. So this kind of boils down to, I think from here, the biggest play is to what we said earlier, looking back and going, okay, I know what I did. Let's spend a little bit more time thinking. about why you behaved in that way so that you can recognize that going forward because George is right. You got to get out of Jill Free card. This debt is gone. But if you don't understand

what caused you to behave the way you did in the past, you're going to turn around and do it again. So make sure you spend some real time thinking about that. I'm going to give you a copy of my book what no one tells you about money because I talk about that a lot in the book. And you're not going to be able to go forward until you kind of start that process of trusting yourself with money and kind of forgiving yourself for what you did in the past and just forming a new mindset. on how you're viewing money going forward. And it's all about the choices that you make. So number one, you've got to start to get on a budget. My guess is you've never used a budget before. Am I right? No, ma'am. I've never, I've never, I mean, I thought about using budget apps and

stuff like that. When I was married, my wife did all the pay the bill. So now, from now one, it's on you. It's on you. And as my colleague, Dr. John Deloney would say, we can't build from the past, we got to start something brand new. So starting today, we're building something brand new. What's in the past is left back there. We're going to start the behaviors that we know work. So budgeting will make sure to give you every dollar for free. Budgeting is a huge one. That is you making a plan on paper, Anthony, before the month begins. So we are just about to go, well, we just hit October. So tonight, let's start planning for October with the money that you make from your paycheck, writing down everything that you can

spend your money on, all your expenses, rent, car payments, everything that you might have, plus things like groceries and out to eat, things with your kids. Everything goes on there. And let's just get a baseline for what does it look to spend in a month. And then November's budget is going to be even more dialed in. December's budget is going to be even more locked in. That's the number one thing you can do. The number two thing you can do is today, like inside of your brain, inside of your heart,

you have to decide that you're not borrowing money anymore. Those are two things you can do that cost you nothing. You can start those behaviors today. and it will change the whole outlook of how you handle your money going forward if you stick to those two principles and then the rest will start to fall into place. Okay.

I agree 100%. That's what I want to do. I mean, I told myself I'm not going to be loaning anything if I don't have cash to buy it. I'm not buying it. Yes. So are you willing to do some drastic measures

to sort of put some guardrails around this? Of course. Okay. So you're willing to pay off the debt today? Are you willing to stroke the checks and make a payment and be done with all the debt today with that inheritance? I don't have the inheritance yet. It's coming in in a month. Okay.

It's just getting, finishing up with probate, but that's why I wanted to be prepared for it when it does come in. I want to know what to do and how to do it. Can we pretend like that money is not yours? That money is $60K is allocated to the lenders, right? And let's call, I don't know, six months of expenses for you. Is that $30K? Roughly, I spend in bills or months. with child support around 5 grand. Okay, perfect. I was right on the money.

So 30K is not for Anthony. That's for Anthony's emergencies. Right? Perfect. So out of the 160, we were down to 100 after debt payoff. Now we're down to 70 after the emergency fund. Now you're a guy who has no debt, a fully funded emergency fund, and $70,000 to his name. That's pretty cool.

Yeah. So that is not spending money. That is future Anthony money. So do you have a retirement plan? through your employer? I just transferred jobs because I'm going to be moving at the end of October back near my dad. Not with my dad, but near my dad in Fredericksburg.

Are you going to be renting? The current job that I'm, yeah, I'm going to be renting because my credit's honestly really bad right now. It's in the low fives. Do you want to be a homeowner again one day? Of course, yeah. I mean, I want to build my own home. Like I said, I had all these goals when I was married.

things just kind of waterfall. I just got myself into a hole. I just don't even know how I got there. Well, we're looking at future Anthony now. There's a new chapter here. So what I don't want you to do is make decisions trying to impress future Anthony or fix the past. And so building that home because that was your goal five years ago,

you don't need to do that. So do what makes sense for you, where you are currently. So that's 70 grand left over. That might just go in a high-yield savings account and become your down payment fund for future home. Yeah. So you see we just did there? We just earmarked all of the money so that you don't touch it.

Yeah. You walked out of here, Anthony, with five really clear steps, and I'm going to say them again for you so that you don't forget them and so that you can listen back to this episode and really have it lock in your brain. First thing you're doing is you're budgeting. We're sending you that budget for free. Second thing you're doing is you're stopping borrowing money for good. You need to spend some time really thinking about what that means for you and just reowning that as your new identity. The next thing is you're going to take the money from the 160.

you're going to pay off your debt. And then you're going to take $30,000. You're going to save that in a high-yield savings account. That's your emergency fund. And then you're going to take the other 70, and you're going to park it in a high-yield savings account, someplace where you're not getting to it. You're not touching it.

You're not ideating on ways that you might spend it. You can add a side out of mind. Jump on a fair ones. Dot org slash Ramsey. You can have the 10 high-yield savings accounts there, and that'll be separate from your bank so that it won't be easy to access. And on top of that, cut up the credit cards,

close the accounts, and freeze your credit with all three, bureaus because now you're a guy who doesn't go into debt. That's who Anthony is. That's his identity. Not past Anthony who made some mistakes and had life happened to him. Hey, this is Dr. John Deloney. I take my sleep seriously because better sleep means better health. And if you've been losing sleep or waking up sore because you've got some old, thin, gross mattress that wasn't designed with you in mind, it's time to make a change. I love Helix mattresses. They make mattresses for real individual people. Whether you're a side sleeper, a back sleeper,

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We wish we could get to every call and question here on the show, but alas, we don't have all the time in the world. So if you have a money question, you want an answer for your situation, head over to our website and use Ask Ramsey. It's our free AI tool that is built and trained on proven Ramsey principles and the results have been amazing. I love hearing from people even on the show. They say, hey, I actually used Ask Ramsey for this and I wanted to get your opinion on it and usually Ask Ramsey is smarter and more accurate than us. That's just the nature of the business. But it's trained on all of our stuff. So you know you're going to get a Ramsey answer, not just a random one from Google. And you can ask your question today. Just go to Ramsey Solutions.com.

click the link in the description if you're on podcast or YouTube and check out Ask Ramsey. Samantha is in Stanford, Connecticut up next. Samantha, welcome to the show. Hi, thank you so much for taking my call. I really appreciate it. Absolutely. My question is around the retirement of the 15%. My spouse and I are kind of in between baby step four and five, running them in tandem.

And I think we're just struggling with the moral balancing, I guess, of possibly postponing some of those family vacations and memories that we would make with our two young children and planning for a future that we may never get to. So I'm just curious of your thoughts around that and how to balance that as a family. How young are your children? How old are they? They are three and one. Okay. Are they in daycare? They are not. I actually work from home and we have some help coming in to help us through that. So help us understand my screen says retirement is keeping you from doing these. Help me understand what's going on with the budget that there's not enough margin to kind of start setting aside to take a few vacations here and there.

Yeah, I think that we've had our heads down and we've been trying to follow the Ramsey plan for now three years. And collectively we've paid off 80 grand of debt. Great. And we're like at this crossroad of, okay, can we start to breathe or can, is there some flexibility in this 15%? Like we just feel like we are, we are just constantly focused on the future, future, and sometimes these day-to-day moments of planning these vacations are put on the back burner. So that feels more like a priority statement than it sounds like a money statement because what's your income? gross as a family it's around 2.30. Yes, ma'am. This is 100% of priorities discussion. Unless you sit up here and tell me that your

mortgage is super high, a super high percentage of your take home, it sounds like something that you guys have to prioritize. What is your mortgage? Our mortgage is $2,700 a month. You know, we live in an area that has really high taxes and we get tax on everything. That's less than $25,000. That's not the problem. Because, I mean, you guys are bringing home like $14,000 a month? Well, we're only netting about $10.5 because of all the money going into retirement and taxes and all that. Okay.

So we got $10.5 to work with. $2,700 goes to the mortgage, and you've got over $7 left. And you're saying out of that you couldn't save, like, let's say, $500 a month put away in a savings account for a vacation. A thousand bucks a month. A thousand. If you want to go to Disney World, it's going to cost that. Right. We can always go to Branson.

What's stopping you? Because I was expecting, usually when I hear this question, I'll be honest, Samantha. Usually it's a time of life thing where we've got kids in daycare. We've just started investing. And basically with kids in daycare, you're basically paying for college, right? It costs the same thing. And so it's just a tight season. But if you're telling me, no, I work from home.

There's no daycare bill. And also we make $2.30. Oh, and also. we bring home 10,000 a month? There's got to be some major expenses here that we haven't accounted for yet. If I look to your every dollar budget right now, what would I see that I go, whoa? Probably, like, probably food and leisure, like things that we account for. Okay.

That are, like, weekly treats, quote-unquote treats for the family. Like what? And I'm not saying this because it's a bad thing, because it's not. I just want to know what you mean by that. Yeah, I think. by that, I think it's for us, we really prioritize the family model. So it's just like weekly spending a trip to like, for example, to do or to a museum or to go out to dinner. Like, that's all part of our budget. Yes. As it should be. Maybe we should start pulling some of that

back and putting it towards a vacation. I just, I think that it's exactly that. If you tell me, if you say, because again, and I stand on this because I think it's true, there is nothing wrong with the things that you just said. I, I'm with you. I think that you've worked hard to get this point where you can spend money in those ways. And you clearly value family experiences. So what you can say is that, okay, some of the family experiences I value are the ones that are close to home when we can go to the zoo and go to the museum and go see the movie that just came out and go do this.

But then you can also start to say, in addition to that, I'm going to put a line item on the budget or I'm going to split this line item and say part of it's going to be spent on close to home experiences and some of are going to be spent on out of town experiences by us going to travel and just knowing that those are things that you tend to need a sinking fund for versus I'm going to be able to fund this in one or two shots. And I think that truly is what it is. You don't need to pull back from retirement, but there probably are some things on your month-to-month budget that can pull back. And it might be that you pull back on going out to eat because I do think, and George, this needs to be said. I think that a lot of times,

when we hit a certain threshold with income, it kind of becomes like, oh, I can do what I want to do. And it's not that you're reckless in the way that you're not making a budget, but you're reckless in the way that you let certain areas of the budget just inflate, inflate, and pretty soon you can start to feel like, oh, gosh, I thought I'd be able to do more with my money. And it's like, you are doing more, you're just eating it, or you're just, you know what I'm saying? So I think that's what's happening. Here's a fun exercise, Samantha. If I said, hey, you have to put a vacation line item for $1,000 a month in that budget,

what would you then cut or add to make that happen? If I said you have to get rid of something, maybe you need to add some income, what would you guys do? Probably it would be like a grocery out-to-eat-eat budget. We would pull back on it. Probably the out-to-eat-e as a family budget. So you could cut that one down? Anything else? Could you cut some subscriptions?

Are there any luxuries that you could go without? out for a season to get kind of used to this savings muscle being built? I mean, you might have to talk to my spouse about the NFL Sunday ticket, but I could go out of it. See? See, you're not the only, uh, yeah, complicit. I think you have really fun things built into your life. Again, I think your income allows for that. You just have to sometimes make some tradeoffs and go, hey, we might not do the season tickets because we want to do the trip to Disney or we might not do, you know, and it's just

pulling back on those things. And the hard part. it is, it's kind of like first class. Once you, and I, I don't fly first class, but once you do, good luck on going back. Yeah. So you've introduced some things into your lifestyle that you really, really like, and it's going to be hard to trade those things off because you're going to feel it a little bit to do some of these other things. But your money's not infinite. It does have, it's a very good income, but it's not infinite. Do you guys get a big tax refund every year? Not really. Okay. It just still seems like you guys are withholding, there's, There's too much being deducted right now to be coming home with 10 grand out of 230.

So that's what I'm looking. If you can kind of look at a bunch of things like reshopping your insurance, looking at the paychecks, cutting some subscriptions. I think this doesn't have to be one thing is out of the budget completely. It might just be we're going to give 10 things a haircut. And now all of a sudden you can find 500 to a thousand bucks. And again, I would on paper say, what is this vacation going to cost and when do we want to go? Have you done that part yet? Yes, I mean, at high level

Because I think all the young kids Want to go to Disney World So at a high level, yes The one-year-old has stated they want to go to Disney? Well, our three-year-old And we were trying to get there before the one-year-old would be charged Listen, can I give you a piece of advice? Don't go yet.

I know you didn't ask me, but oh my gosh Samantha, say that as a guy who is getting roped into going to Disney World with a three-year-old and one-year-old It's too soon. Go a little bit later when they can. It's going to be a great time but the memories are not for the kids at this point. It's for you guys, and it's okay to call that out.

But also, you are giving these kids an incredible life. I want you to know that. It's not about a vacation. They're going to remember those trips to the zoo more than a flash-in-the-pan weekend traveling. And so as they get older, I think your income's going to go up. You're going to dial in the budget more. It's going to become a rhythm to save for these things. And ongoing, just keep that $500 or $1,000 going to that sinking fund in the vacation

over to a high-yield savings account. And magically, you can afford. afford a vacation every year. So just plan ahead for it, make the sacrifices needed, and I promise you the kids are going to be okay. They won't go to therapy over this. If your business is making seven figures or more, you should be proud of that. But that growth probably brought a mess with it. Systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem. And NetSuite has solved that problem for more than 44,000 businesses like yours. NetSuite brings financials, inventory, CRM, and more into one place.

And their AI tool, NetSuite Next, builds AI into everything, automating busy work like forecasting demand and chasing down overdue accounts. It's not complicated to use. You just ask it questions like you're talking to a person. And you're not starting from scratch because NetSuite is built on leading practices from thousands of businesses preloaded and ready to go. Ramsey's solution switched to NetSuite years ago. It helped us know our numbers and we've never looked back. If your revenue is at least seven figures, try NetSuite next for free at netsuite. com slash Ramsey. That's netsuite.com slash Ramsey or click the link in the description. If you've heard us talk about the baby steps on this show, that's because they're the

foundation of everything we teach. So if you're new to the show, start there. We're going to drop a link in the description to the seven baby steps that are the framework for every single call in the description of this episode. Check it out. Stephen is in Grand Rapids, Michigan. Stephen, what's going on? Hey there, guys. Thanks for taking my call. How are you guys doing? We're doing great. How can we help? I have a question. Me and my wife bought 40 acres where you live out in the country in 2021, and we do at our own house, our homestead there. We have two kids, two girls, and everything's going well. Our mortgage is $1,800 a month, and I was just wondering if it would be a smart move to

sell some acres to wipe off some debt, or if I should keep it, because I got it for a pretty good price or what I should do with, if that'll be a smart move or not. How much debt do you have? $240,000 right now. Is that the mortgage? or is that consumer debt? That's the mortgage.

Oh, that's it. You only have the mortgage. Oh, no, I have a truck payment, which I bought a used truck. It is, right now I owe like $27,000 on it, which is like $416 bucks a month. Okay. And that's not part of the $2.40? No. No, that's separate.

Okay. So it would be about $270 total with the truck, and that's all I have. Got it. All right, what's your household income? it's right at 92,000 a year. Okay. You know, if you wanted to, you could, but I don't see why you can't take this $92,000 income, pay off this truck, lickety split, and then beyond baby step six, like everybody else

would do and just make big chunks at this mortgage when it makes sense for you guys and just make a regular rhythm of paying extra on it until it's gone. It's not astronomical, especially when you look at median home prices. Right, right. So you got a few levers to pull. I did get it. What was that? You got a few levers to pull.

I mean, selling the acreage is one idea. We're just trying to show you, hey, if you can pay this truck off in the next 18 months and you love the truck and you love the acreage, nothing's broken here. Yeah. So do you just have too much acreage? You're like, I could do without some of this. It's fine.

I could parcel it off. I'm not going to lie. It's beautiful. It's a nice piece of property. I love it. The one downfall is when I got the, loan. I got it through a financial financial institution that does not like lock

in interest rates. Oh, is it adjustable? It's like a hard money loan? No, it's and I got this financial out of Pennsylvania. So they're kind of a conservative group. They have their own investors. They're kind of their own group. And they only loan money to like

conservative people. It's kind of a different thing. Never heard about this. So what's your rate? So it's right now it's like six and a quarter, which is not terrible. And the cool part about it, it can only fluctuate like a half percent per quarter, which amongst a 2% a year. And it was at three and three and three quarter when I got the loan in. So is it just an adjustable rate mortgage?

Sounds like it. Yeah. No, it goes up and down with the, I mean, with the, I mean, with the economy, I guess. There's, yeah. Yeah, it can only go up two percent annually, but it can also only come down two percent annually. I mean, you keep saying only. That's a lot. That's a lot of money.

That's a big deal. I want to get it. So how many acres would you have to sell if you said, you know what? I want to do this. How many acres would you have to sell in order to pay off the mortgage? I think you can cash flow the truck, but let's just play with this for a second. To do the mortgage, how many? I talked to a realtor, and in reality, I would have to sell probably about 30 out of the 40.

Oh, gosh. Like completely, I'm going to wipe all the debt. You know, and that's also, I'm not sure how the capital gains. things works, but, you know, paying for a grand an acre, you know, and now it's worth probably more like eight. And I'm not sure, like, how much of that would go into capital gains or how much a government would want from that. And then that would also play an effect of how much I would actually put out of the debt. Have you thought about just refinancing to a different loan, just a normal, conventional, 15-year fixed rate? That's the hard thing about it.

Back when I was, I actually did most of the process, and by the time I got through, the interest rates was 8%. So I chose not to, which at this point I'm glad I didn't lock it in because I'm still below that. But interest rates are still fairly high, aren't they? I mean, you should be able to... Six and a half on a 15 year? Yeah, in your area. Okay.

Plus, you have, you do have the benefit. You have, I think you have a lot more options than we, you realize, because what you could also do, you could say, hey, I'm going to sell, I'm not going to sell 30 acres, but maybe I'll sell 15 acres. I'll take that chunk of money and when I refinance it. I'll throw it on the loan and I'll, like, knock it down majorly. There's so many things that you could do. What I see in this that feels drastic to me, I'm going to tell you the two problems that I see that I'd want to nullify very quickly. Number one, I don't like the adjustable rate mortgage. I think that's taking away your piece. It's taking away mine. So I'd want to do what I need to do to fix that. And we just gave

you an options, a couple of options, what you can do there. The second thing that's a glaring thing to me is the truck payment. I think you're in a situation that you don't need to borrow money anymore going forward. And I think that I would get this truck paid off really quickly. And if you do those two things, I think it's going to make the level of peace in your life rise to a very great level. I don't think that you have to push to pay off the mortgage immediately by selling off all of this acreage. I don't think that's the thing on fire. The problem is the adjustable rate mortgage.

Okay. Yeah. No, that's not the extent. I did, I consider doing that. Even just, like you said, just getting the mortgage down, you know, even $100,000 off of $2.40, that's almost half. Yes. You know, I mean, yeah, I went from $1,200 a month in 2012,

$1,000 being my payment to $1,800. And that's $600 every month. That's just going into interest. And it just stinks, you know? Unfortunately. It was never my intention to buy that much, but if it could become available, I'm like 160,000 for 40 acres out in the country. I don't regret it, you know, because I'm still ahead at this point, even if I'd sell it. You know, I didn't pay that much in interest of, you know, the amount that went up.

But you love the land. You've said that you love it. Basically, nothing's on fire now is just let's get you out of this adjustable rate mortgage and let's have a plan to actually pay off this truck. So how much margin do you have every month right now? Extra money you could throw at the debt. I can probably do somewhere between 800 and $800 would probably be comfortable. Okay, so this is how long that will take you. Can I do the math with you? $27,000 loan, that would take you almost three years to pay off that car loan.

Can we agree that kind of sucks when you make almost six figures? Yeah. So what if we could throw $1,500? Could you find that in your budget if you guys tighten things up? I mean, we've done with, I got hurt at work two years ago, and we, done with almost nothing. I have an awesome wife. She spends no money, like literally. So it's all on me. So yeah, I mean, we can we can do with a lot less and if that's what it takes and that's what I happen. I would do a budget tonight and go, hey, we have a game plan where we don't have to sell any acreage right now and I'm going to cash flow and pay off this truck in 18 months.

Are you game? My guess is she goes, okay. Sounds like you're the spender here, so you can control this a lot more. And you guys probably, when you bring home six grand a month, what do you bring at home. Yeah, 6 to 7, yeah. Okay, wonderful. And your mortgage is 18,00. That's only going to go up until we refinance. So now, between paying for everything else, let's go find that 1,500 and say 18 months from now, this truck loan is gone, and we get to keep all this beautiful acreage. And then you always have sort of like a parachute here of selling some acreage if push comes to shove, but I wouldn't do that quite yet. Okay, okay. And I didn't know what the market being up, you know, it is worth, you know, substantially more than it was if, you know, at some point

it could, but real estate, honestly, out in the country, it probably is never going to go back down to where it was. I mean, that might be a bad assumption, but... Yeah, I think you bought this land, though, because you love it. I think you bought it because there's something about it. You want to do the whole homestead thing. And I think that you just have to remain kind of focused on what it is that you're trying to do. And I truly, truly, truly do think that the problem was the risk or like that feeling of uncertainty is the adjustable rate. It's not knowing like what's my payment going to be. Is it going to go up? Is it going to go down? And just whenever you have that layer of risk in your life, it does. It affects just your

day to day. It's kind of like, you know, when you have your computer and there's all the things running in the background, you have all the tabs open. And it's just slowing down your performance. It's just making things cloudy. And I think that clearing that up is going to help you a lot. close the tabs Stephen close the tabs yeah all that emotion and excitement

will drive you to make decisions you probably wouldn't have made in hindsight but that dream was too exciting when you saw that beautiful land and you pictured the homestead lifestyle yeah but you know like we said

there's nothing on fire he can keep the grass yeah don't sell the horse quite yet you're not there hey George Camel here a few years ago someone stole my identity and let me tell you that is not a quick fix

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So go to zander.com to enroll today or call 800356-4282. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel. Co-hosts today is Jade Warshaw. Open phones at AAA 8255-225. William is in St. Louis up next. What's going on, William? Hey, guys. I'm very happy to be with you. You as well.

I just have a quick question, and I'm kind of nervous. So I got laid off on Friday, and I would like to kind of go into business for myself, but that'll take time to build the income up if it builds at all. And I'm just wondering if I'm in a position to do that, or if I should go look for a regular job. Man, what happened with the job? I just didn't bid enough work, and they actually lit off about 50 guys before me. Wow. And then the, yeah, then I got my call.

What kind of work is this? Now I'm at home. I'm a welder. Okay. What were you making? So at that point, I was making 36 an hour. Nice. Okay.

And what would the business be? So, well, I would like to do art. I like sculpting. The main business would be just regular welding and fabrication, but then also I would pursue the art on the side in a similar fashion to how I've been doing it for the past couple years. But I'm just not sure, like, the money. So the business is welding. You do your own welding business. And as a hobby on the side that could make money one day, you would want to do sculpting. Yes. Okay. Metal sculptures. So they do tie in together. How quickly can you start getting welding work and have you kind of looked at how many clients you need or what do you need in order to kind of make what you were making at the old job? How long do you think that would take realistically to get back there? I think it would take probably 18 months to get back to maybe 12 to 18 months to get back to that working. independently. But I don't know, there's also a lot. I would imagine there's lots of insurance and liability things that need to be covered there that I haven't looked into. But I've kind of I mean, I like the idea of you, you have a trade that you could easily turn into your own business. If you have a business sense, I don't know that you do just yet. But already you saying,

hey, this is at least a year to year and a half build. In my mind, I would go, let me get another job right now. And then while I'm working the current job, just bringing in some money to make ends meet, right? Just continuing to feed my family. Hopefully I can get another welding job making what I was. But while I do that job, I'm going to start doing the legwork for putting this business together. I'm going to start figuring out what insurances I need. I'm going to start figuring out, you know, all the kind of nuts and bolts, all the foundational things. And then I'm going to start building. I'm going to start taking some clients. I'm going to start doing some things on the side and building that up. And then when I,

I can pull that boat close enough, George. I'm jumping right in it. You're like stepping gently instead of just hoping you can make it without hitting the water. So that's the goal here. And in the meantime, you might just need another job to get by until you can sort of build up your book of business. And the sculpting will remain a hobby for now. Let's put that in the back burner unless you're like, oh, I've already sold multiple pieces for thousands of dollars. What did you bring home every month when you were welding?

Uh, pre-ta or post-tax was 4 grandish. Okay, 4,000. I did a lot in my, I put a lot in my 401k and stuff like that, so it, it was lower than it needed to be. What was it? What was it just after taxes, not after investing, but what was it after taxes? Um, I don't have that number, hold on. I want that number because that's our goal. So whenever you're looking, it's that or higher, right?

So as you're looking for jobs out there, because what you might find, and I don't know you could speak to this, but you might find that if you get a job welding, they might say, well, you can't do a welding business on the side. That is, you know, a conflict of interest. So you might have to pick something that's not welding that can make you for $4,000 a month so that you can go ahead and build this welding business and start building up your client base without it being a conflict. But at least we know how much you need to earn, and that's kind of the goal. Yeah, so pretext I was 1440 and then with deductions of 4662.15, I was netting 978785. And I'd have to go through and do the map to break down. Yeah. Break down the deductions there. Okay. Do you have a specific skill in welding? So I was a pipe welder, but I think I'm more, I really just did that because it was lucrative and I could subsidize doing art with that. But I find myself fabricating more than anything.

So can you find some fabrication contractors and get some work in between? Probably. I also, my expected timeline is about a three-month layoff. I don't think it's like I'm never going back. I think there's just not enough work right now. Yeah, I'm just, I'm, this is something I've been passionate about, and I'm nervous because I try to live in a very risk-averse manner. I'm nervous that I'm using it, the layoff as a kind of,

list for a poor decision when I'm not there financially to take that risk. And that's fair. I think that your spidey senses are exactly right because you're talking to two creatives here. We love art. We love the arts. Okay. So I love the idea that you have and I love entrepreneurship. So there's two things that I love for you. I want for you. But I think your your instincts are telling you a correct thing, which is there's a way to do this. That's wise. And the way to do this that's wise is not just to jump in it with no net and with no plan and with no money. The way to do this is what we said. We're going to do it right. We're going to, if this is a three-month layoff, you don't know that for certain. It doesn't sound like it sounds like you just think it is.

I try to find that out for certain. Is this, how long is this going to last? When will the paychecks run dry? And if they can't tell you, then that's your cue. I'm going to go out and get a job. Go out and get a job. And then once you land that job, now let's start working on the welding. business. And again, to George's point, I do think you need to start business first because we know that that's going to bring in some income. And then once that's bringing down the $4,000 a month, now we can start trying to go into the art welding space. But you got to play this the right way. You can't just, that's like me just saying tomorrow, I am a professional vocalist. I mean, you are very good. Yeah, but I don't, I ain't got a job. But you need money coming. I don't have any

money, exactly. So we got to do this the right way. So how much saving? you have right now to your name? So cash savings, I have $20,000. Nice. And no debt? Zero debt, yeah. Fantastic. Well, you've set yourself up to be in a great spot. I've heard the Ramsey jingle. Yeah, I've heard the Ramsey jingle since I can remember. Fantastic. I never heard it called the jingle. I like that. Dave's going to really love that.

So the goal now is that's your emergency fund. Our goal is to not touch that thing if we don't have to. That's your break in case of true emergency. Hey, I'm up against a wall. The electricity is going to get shut off unless I dip into this emergency fund. Now, on the side, you can start creating a side pile that is sort of the business startup fund because you're going to need to buy some equipment, right?

You're going to need to pay for some insurance. Yeah, actually insurance is the only thing I think I'd need. No equipment needed? Over the years, I've been, well, I've been cash flowing. Perfect. Good, you own it. It's not owned by the business. Yeah, no, I'm.

I'm self-proprietor on LLC. That's great news. It's just past year. And the next thing is, can I actually get some clients? Am I good enough at the sales side? Because you might love welding, but man, you hate getting the jobs. And you might need to either offload that to someone who can get you the jobs and pay them, or you need to be working for someone else.

Those are the two options. 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 families' businesses. budgets. And that is why I recommend that you check out Christian health care ministries. CHM isn't insurance. It's a health cost-sharing ministry. That means members help pay one another's medical bills, and they've been serving Christians since 1981. CHM programs start at just $15 a month. And here's why that matters. If you are paying more than you need to for health care,

that money could be going toward paying off debt, building your emergency fund, or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all, a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now, new members can receive a 50% credit towards their first month of membership. Go to CHministries.org slash budget and use promo code Ramsey. That's CHministries. Dot org slash budget and promo code Ramsey. Tom is in Los Angeles up next. Tom, welcome to the show.

Hey guys, how you doing? Doing great. My question is, I'm 24 years old, and I'm looking to buy my first ever nice car. I've never had a car with payments. I've been very diligent about saving and no wasting my money, and I just don't know if it's the right move. I've always heard cars are depreciating asset. and I'm just kind of hesitant to make the move. Well, I'm proud of you for never having a payment.

Are you ready to waste some money on a depreciating asset? That's the question. I think I am, but I'm not sure. How much is the car? The car varies from 18 to 23, 25 max. Okay, what kind of car is it? What's the year-making model? It's 2016 through 2019 RC-350 F-Sport, Lexus.

Oh. Sounds nice. So it looks nice. I mean, you're not a debt guy. So if you didn't have car payments, I'm guessing you don't have any other debt laying around. I have no debt. Yeah. And I'm guessing that you've got three to six months of expenses on top of the money you need for the car.

So I've saved about $55,000 so far. I have $33,000 in mutual funds, four separate mutual funds. and I have about $22,000 in cash. And right now I'm waiting. I just listed my work van. I had a got in a van about four months ago that I was using for work. But it's a V8 and gas was very expensive. So I just listed it for sale yesterday.

And what's it worth? Yeah, no. Roughly about $10,000. Okay. And the mutual funds, that's just in a brokerage account? I have a financial advisor that helped me set that up. So I believe so, yeah. It's not in retirement.

That's the key. No retirement. Okay. Okay. How much do you make? It varies. I have a small business and I work in the pool industry. So I work for a big company and that brings me about three to five, three to six thousand a month.

And then I have my own business on the side. That brings me another two to five a month. So in the summertime, I did about 10,000 a month. Right now, we're slow season. I'm doing anywhere from six to eight. Wow. So you're making anywhere from, can we call it like 75 to 120? What's, what would be the range?

This year, I think I'm going to make about 100,000. Last year I made about 80. Fantastic. So let's say, let's call you 90. And this would be your only vehicle? So right now I have a 2002 Ford Ranger. It's an old pickup truck. And that's why I'm going to be using for work for now.

Great. I mean, it's green lights all around. Because our parameter is you pay cash, you buy used unless you're a net worth millionaire and the total value of all the things with wheels and motors in your life adds up to no more than half your annual income. So you check all those boxes, right? Yeah. So can we go buy this waste of a depreciating asset and enjoy it? We should, right? Yeah. It's not that bad of an idea. I don't think so. I would, man. I think you need to do it. I think you need to do this. Do you have one in mind like you know it's out there, or it sounds like you have a range that you're willing to

sort of concede for and now you know the prices? I'm kind of waiting for the best deal. There's a 2018 for 18-7 right now, and I really like that one, but I have to wait until I sell my van because I have no space to store three vehicles. Right, and you don't need three vehicles. Okay. Yeah. But I'm kind of strapped waiting.

So there was one other good deal that I missed out on just because I couldn't get it just yet. But, yeah. And you're ready to take on the insurance, the maintenance, all of that that comes along with a luxury vehicle? That's the additional cost. You know, I'm young. I haven't had my license. for that long and my insurance is going to be probably about $300 a month on top of the whatever I buy for cash.

How old are you, Tom? So I'm 24. 24. How are you living? Do you rent? I'm guessing. I mean, it says Los Angeles on my screen. Yeah, I rent a room.

It costs me about $12.50 a month. What's your long-term plan for, you know, living in California in Los Angeles area? I'm not from the United States. States. I moved here about six years ago from Greece, so long term, I'm planning or retiring there. Okay, cool, cool, cool. All right. Yeah. Man, way to go. You've done really well, and I'm glad you're walking through this slowly and wisely instead of impulsively. You've thought about a long time. You've worked to save up for it. You might need to cash out some of the mutual funds, it sounds like, to make this happen, right? I'd like to not mess with any of it. I don't want to touch it. That's

I'm trying to be at 25 max because I figure since I'm going to get the 10,000 from the van, I have another 22 in cash roughly. Yeah, but I want you to have some liquid cash as your emergency fund. That's the only thing. Okay. So keep three to six months of expenses, and then anything beyond that becomes your car fund. Okay. Because their emergency is going to hit, the market's going to take a dip,

and you're going to need to dip into those mutual funds at the worst time. Okay. So just kind of know. I don't know what you're earmarking those mutual funds for, but I like my investments to have a goal. So do you have a goal? No. Well, it sounds like it was the car.

I didn't want to waste it. I didn't, well, the car, yes, but the main reason I put it there was I just didn't want to have immediate access to it. I didn't want to spend it or anything else. And I wanted to be out of sight, out of mind, live as if I don't have it. So let's talk about that because that's a part that it is, this is a part of budgeting. And a lot of times people have margin. It's just like, let me throw this in the bank. but you do want to be intentional even with the margin.

If you're in a good enough position that you can do your budget and look at that margin and say, okay, I got $3,000. What am I going to do with it? Well, I just throw it over there in the HYSA. It is a good discipline to sit down and go, what do I want to do with this money? If I'm going to throw it in a high yield, this is what it's for. If I'm going to throw it in a brokerage, I'm doing it because I'm saving for a down payment on a house.

If I'm going to split it up, I know what the split up is. And when you do that, not only do you have a greater level of control of the money, but then when you reach over to spend it, you can do that with confidence because I've earmarked this money. Yeah, specifically for that, for that reason. Well, ideally, I'd like to buy a home, you know, but it just in California, it doesn't, it seems like it's an out of reach plan. And that, well, that's why I asked you about that because I could sense that there is some trepidation in your voice about doing this car. And I'm looking, I'm like, okay, this guy lives in Los Angeles. it would be tough for me if I know that I have home buying on the horizon, it would be hard for me to spend $25,000 on a car.

So now it's a thing of priorities and it's a thing of timeline of what's most important to you. That's why I asked about that. So if you say to me, hey, Jade, if I'm being honest, home buying is actually number one on my list, well, then we might need to talk. But if you do say, no, for this season, cars number one, home buying is like number three or four, then that means that we have more flexibility. So what would you say? I'd like to be very cautious with where I spend my money. I don't want to waste it. That's why I've been so hesitant to do the car. And ideally, yes, the house would be

number one priority. It just seems like it's impossible to do it out here. I was thinking about buying a house out of the country, buying an apartment back from and have my parents help me run it as an Airbnb. And that seems like a little more doable an apartment out there. That would do quite well in the hot season of the summer. If that's the case, Tom, if that's the case, Tom, then you need to start aligning that because if you sit here and say, hey, guys, my number one priority is to buy a house, then your goals have to align with that, which means, okay, if that's my, I'm going to start shifting everything towards that. And right now, that's not the case. We're talking about a car when we should be talking about, okay, what's it look like to get out of the Los Angeles area?

What's it look like career wise? What's it look like property wise? And that's really the conversation. If I were you, I wouldn't buy this car until you start to online on what you want the next two years to look like in your own life and keep that home buying thing on the table. Obviously, you can't do it in Los Angeles in the next two years. But what does that look like for you? Because $25,000 is a lot of money if we're talking about buying a home. Yeah. I don't know how much time I have. It's just it was kind of a reactionary idea of I keep saving.

All I do is work. I'm working about 60 to 70 hours a week. I have two weeks off in the year. I'm 24 and I was like, why am I being so mature all the time? You could go somewhere where your money immature. Why couldn't you go somewhere where your money gets you a lot further? You say you're in the pool business. My guess is you could do that in a lot of different places around the country.

Maybe South Florida, Tennessee has a lot of pools. I don't know. Just saying. Start dreaming, man, but you got a lot of time. It sounds like you are either in the moment or you are so far. in the future, we can split the difference and enjoy life today while planning for what's ahead. If you're living like no one else with your money, you're probably being smart with your entertainment choices too. And the truth is, finding entertainment that's high quality and aligns

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If it helped you, something stuck out, something was fascinating, crazy. Share it with a friend as well. Hit that share button. That means a world. Thank you for doing that. Sean is in Atlanta, Georgia up next. Sean, welcome to the show. Hey, thank you for having me.

Absolutely. How can we help? Hey, back around 2000. I'm going way back. I took out one of those dumb 125% second mortgages for about 25,000. And I paid on it for like 10 years. And when 2008 came, I lost my job. and got another job, but I was having a hard time making that second mortgage payment.

So I called them in 2010, said, hey, any way you guys can help me with this? They said no. So basically, I haven't paid them since 2010. Whoa. Do you still have the house? I still have my house. Is there a lien against it? Like when you check the records?

I looked at court records. I looked at court records. I don't see a lien. every once in a while, it's been sold numerous times to other companies. And every once in a while, I will get a letter maybe once a year for like the privacy notice, saying, hey, we might sell your information or something like that. Okay.

But other than that, I am looking to pay my house off within the next two to three years. I only owe $68,000 on it. and I don't know what's going to come about when it comes time for this because my wife keeps telling you after a certain amount of time, if they don't contact you and they don't try to get their money, then you might not owe that money. And I don't know. I try calling a real estate attorney. He's like, just call a title company and just have them do a title search. Yeah.

Yeah. And just blew me off. And so I didn't know if that was really. the right thing to do. Yeah, because then you can see if there's anything against it or if it's totally clean, because you're probably right. They probably kept selling it lender after lender. You're not paying anything.

They just charge it off, sell it to the next one, charge it off, sell it. And so you may be right. I mean, I checked the law in your area, but it could be too old to collect. But at the same time, it could come back as a zombie later. Like, hey, you owe this plus, plus, plus, plus. Right. And that's kind of what I'm worried about is if I pay my house off. Are they going to come after me at that point?

That's the part to find out. I think right now we're sort of living with the boogeyman under the bed. Let's just put the flashlight under there and get the title search done. And you can check with your county, check the Register of Deeds Records for the property. Yeah. Have you done that? Yes. Have you pulled your credit report?

Does anything show up there? No. Okay. It doesn't pull all my credit report. Nothing like that. So I'm just like, I'm at a loss. Does the company exist anymore? According to, like, I've researched the one that owns it now, and they exist.

Some company that just likes to buy debt, and they still exist, and they send me a privacy notice every year or something. I mean, it's possible that in all the hubbub of 2008 or nine and after. The chaos. It just got lost. Maybe it did get lost or settled or forgiven and you didn't know about it. And there might be a statute of limitations. I would ask your real estate attorney about the laws in your state to see if they can even enforce it when you do sell. Right. That's what I wonder about the statute of limitations. Worst case, I would just go, hey, when I sell it, I might owe something in a worst case scenario. Right. Because I took out a $25,000 loan. And now, even after I paid $20,000, 10 years, I still owe 25,100.

Because of that crazy interest. Yes, it was 125%. And my guess is it's been so long, even if it does exist, they'd probably be willing to settle at this point. And I just, with the interest being the way it was and what that would mean in today's money, if it were out there, I'm pretty sure someone would be trying to collect it. Do you know what I mean? That just feels, but yeah, if you do that professional title search and there's nothing there, I feel like that's about as clean as you get.

I would do some more due diligence and then sleep easy knowing you did everything you could and get everything in writing so that they know and that you know. And we know. I would trust your real estate attorney over us on the air because they don't know your exact state laws and what to do about it. But I would definitely do that title search. Listen, I'm rooting for you because that would be pretty sweet. It's a big win. Chad is in Fayville, North Carolina up next. Chad, welcome to the show.

Hey, how you doing? We're doing great. What's going on? I've got a question. I kind of want some advice on something. So 20, 24, my wife and I was working for a company, and they were downsizing, so we decided to leave. So when I left, I grew out my 401K. I paid my home off and whatever loose bed I had.

I kind of want to know how to go forward with now kind of being more aggressive with my retirement going forward. I'm 48. You guys have no debt? Just a couple of vehicles. So two vehicles were 750 a month. One of them's like 10,000 left I went on it. The other one's like 12.

Okay. Do you have the cash to pay those off today? We do. So here's what we got. So when I left the company, I drew out my 401K and paid off the house and all that. she had a previous property called we got married in 2021. She sold that property. Okay, so we got 40,000 out of that inequity.

We put that in a short-term CD, and it's been there ever since. We both went back to working right after, you know, right after leaving another company. I opened up 401K with this company and started it immediately. So I got like $16,000 in that company that I'm working for now. She rolled over her 401K from the previous company into an IRA, so she's like 137 now. Oh, good. On top of your 16. She's got a, yeah, she's got a new 401K that matches like 3%.

So she don't have a whole lot in this because it didn't start for her for a year for some reason. Okay. And then I've got a pension from my old employer that they're telling me will be maxed out at 75,000 when I retire at 67. Mm-hmm. That is showing an estimation of like 33 right now. So that's just sitting there. What do you guys make every month?

Or a year? So right now, so I was making a lot more with my previous job. But right now, I work three days a week for a pretty big company and maintenance. And I'm making like 17. I bring home like 1,700 every two weeks. And what's that a month? And she brings, let's see, 17, 17, that's 34, 34 months. Okay.

And what is her gross income per year? She brings home, she, okay, I can tell you by weekly, she brings home $600 a week after her 401K. For a week. Figure it up that, yeah. Okay. So you both are probably making like $40, $50,000? Yeah, I'm probably making like $60, I think. So you're making about $100,000?

together. Yeah, and before with the other job, with the other job, I was making a little over a hundred. Well, before it was before. A year. And now is now. So let's focus on what we have at hand. So you guys have $153,000 between the two of you in retirement. You're making $100,000.

If you follow our plan, both those cars get knocked out. You have no consumer debt. You build up an emergency fund of three to six months of expenses. Then you invest 15% of your household income, which is $15,000 a year is what it amounts to. So you would be adding. 1250 a month across your returns. Like I was saying, we've got 40,000 in the bank in a short-term city that we're just drawn in.

Good. I would pay off the cars today. You could do, yeah, pay off the cars today to George's point. If you do that, and then you're going to have to go ahead and save up another three to six months of expenses, and if you do that, now we're free to start investing. If I were you, I may pause investing temporarily if you need to in order to get everything cleaned up in an order to get that three to six months saved, then turn it back on. do, you're going to put aside $1,250 a month that you're investing. And when I plug that in at your

current age, age 48, let's say you retire at 67 with the 153 that's already there. I mean, gosh, that puts you at $1.8 million, which is pretty good. I think you can rest easy. Plus pension, plus potential Social Security. So that's a pretty good life. But here's the thing. You have to keep investing 15% continuously and never stop. That's the goal. This episode is brought to you by Better Health. Every year you tell yourself you're going to handle the holidays differently this time. You're going to stay calmer, you're going to feel more peace. But then the same old pattern emerges, the same family tension, the inability to keep healthy

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She says, in my area, all the cars at very low prices have rebuilt titles. which means they can't be fully insured. My husband wants to purchase a car with a rebuilt title for him to drive, but I'm not sure it's a great idea. What is the Ramsey opinion on cars with rebuilt titles? So what, this car has been completely totaled out, and they've done what they need to do to fix it. They can legally give you a clear title for it.

Yeah. It says some things have happened. There's been some trauma. It's been busted, is what we're talking about here. Yeah, that could involve damage to the frame, suspension airbags, flood exposure. And so I don't think that's where I'm trying to save a buck. Absolutely not. Because you have to get a rebuilt title, you can't afford that car.

Yeah. And it's not going to be a savings because there's going to be something that pops up wrong with this car. It's, I got to believe, over time. Yeah. And insurance is like the number one factor here. So if you can't get that thing insured, the insurance company's not touching it. You shouldn't either. That's a lot of risk on you.

Yeah. It's a no for me, boss. Yeah. What about you? I would never, not in a million years. Okay. Sorry, unless you're like a mechanic who just like wants to fix it up and work on it for fun, you don't really care. Even still. That just feels like, yeah, it's a lot. No, thank you. Get a discount elsewhere. Abby is in Baltimore, Maryland up next. Abby, welcome to the show.

Hi, how are you? Good. How can we help? So I guess I'm just kind of asking for a little bit of advice or what my husband and I should do next. So he has a lot of student loan debt. However, not all of it is in his name. Part of it is in his father's name and part of it is in his mother's name. So with that being said, in total, it's probably about 170,000. And so we're paying his, the loan from his name as well in those of his parents' name.

And it's just it costs so much a month that we cannot afford to live. So I was just seeing maybe what your thoughts were on what we can do. to pay it off quickly, but also to maybe make that payment a little smaller. What was the plan, because he's sound like Parent Plus loans, was the plan initially for him to pay back his parents, or did they say, hey, we'll take out these loans so you can go to school. Like, what was the plan? So I think it was just to take him out so he could go to school.

Honestly, I've asked and they never really given me an answer. They have not only his, he has five other siblings, they have in their name. So we can't consolidate. Right. So are his parents broke? Is there a zero chance they're actually going to pay these loans? So they would have to if we didn't pay. However, you know, we feel guilty like, you know, these are his loans. So we just don't know what to do. They're trying to refinance them in our name. However, we can't do that. His interest rates are so low. That would be ridiculous to do. So there's a lot circulating here that needs clarity.

The first thing is, and listen, you're talking to someone who has been exactly where you're at. Exactly. And so the first thing is let's get clarity on the story. And for him, it's probably a little uncomfortable because he's sitting in the middle of the two systems that he loves most. He's sitting in between your family, you guys' family system and the family system he came out of. And he's just in the middle feeling like he's probably not doing. doing well for either of them because of this debt, right? So let's kind of recognize probably the guilt and shame that he's feeling. And when you talk to him about it, just say,

hey, I don't think we can move forward effectively until we can really understand what's going on and what the expectation was and what it is today. So if he can have that conversation with his mom and dad and say, what did you guys, what was your expectation? Because here's the way I viewed it. And if his expectation, I'm not trying to put words in his mouth, but if he thought, hey, my mom and dad are covering this and I'm covering this portion, he needs to assert that and say, you guys said that you were going to cover those loans and I was to cover these. And so for my family, I need to do what we said and cover the ones that I'm on the hook for. Now, if that's not the case, then we can talk about, if you don't think that was the case and the

case was no, no matter what, he's supposed to pay back all of them, even the ones that aren't in his name, fine, we just need to figure out what it is. Yeah. What do you think? What's your gut telling you? I do think maybe initially they were probably thinking they could help him out. And then each sibling decided they wanted to go to school. And so now they can't afford to pay for, you know, five kids' college loan debt.

So I think even if that was initial plan, they would never see it that way, if I'm being honest. That's fair. And that's their choice, by the way. So the second thing becomes owning what's yours and what's not yours. So today, what portion of the loans are his in his name? So about if I remember correctly, I do have a thing, but it's on my phone. So I can't look at it. It's 60 to 68,000 would be the realm that's in his name.

So I'd be focused on those. I'd be very focused on knocking those out. And I wouldn't be making payments on the other stuff because you got to pay off the stuff that's in your name because you guys are out. you're trying to have a life, have a family. And we do have a child, so that makes it even more. You know, we have to pay for daycare. We have to pay for a lot of other things. And it's just we're actually living with family because we can't pay rent right now.

Wow. Because of his living. I'm guessing it's different family. Actually, it's the same. So it makes it harder because they are helping us with living. I'm screaming for you. There's some toxic codependency here. I mean, isn't breakfast awkward?

Yeah. I mean, it is awkward. So before we just moved back. So that is why we were with him. I was without a job. We moved back to this state. I was without a job for a couple months. So that is also why when we were not in this state,

we could afford to live and save a little, but that was it. So you're both working currently. We were still fairly scraping by. I'm about to start my new job. It took a couple months. What's your new household income? So our new household income will probably be about $90,000 a year. We were a little higher beforehand, but that's where we are now.

And is it so low with all these student loans? What did he pursue? So we both have a master's degree. However, his is in athletic management. So finding a job kind of in that with only a few years of experience has been a little hard getting a higher paying job. But it took almost 200 grand to get through undergrad and the master's for him. Yes.

Okay. There's a lot that has to be unraveled here. And what I'm here, here's here's the reality. You guys got to get out of that house with the quickness. Because as long as you're living there, you won't feel like you have the Cajonis to have the conversations that you need to have, which is mom and dad or mom and dad in law. You guys made a choice. It adversely affected you and it adversely affected us. and the truth is you were the adults when the choice was made and we were the minors. And so because of that, it really was your choice and we cannot pay for that. And that's a very hard conversation to have when you're living in their home.

Because if you stop paying, you're going to overhear the phone call with the collections place calling your parents, calling his parents. So this is just a dark situation all around. So the key is you asked us, how do you get out of this? well, you're going to have to up the income and then it's smallest to largest debts. Let's knock this out using the debt snowball. And I agree with Jade, I would focus on your debts for now, the debts that are in his name only, to knock those out.

Then we can figure out the rest down the road because that sounds like it's going to take a couple of years just to knock out his debts. Yes. So this might be a five to six to seven year journey at this rate, if you're lucky. So that's where the income really needs to go up. Okay.

So, yeah, I think, and there's no shade on that. guys, you're not wrong. You can't even afford to live. You certainly can't afford to pay off debts that they signed for as the adults. So this is tough. Gosh, I can't say it enough. If you're a parent and you're in the situation where you have kids going to college, you've got to be realistic. And you've got to be the one to draw the line in the sand and say, we simply can't afford that. And you can't either because it would be debt. So this is you guys's chance to kind of change the story here and just start on a new path and do it the right way and not indict your children on down the line. And $2,000 a month in just minimum payments.

That is soul crushing. It's soul crushing. And I hate it for the parents, too, because you know they had good intentions. It's just that's not enough. Well, they basically kick the can down the road. Said, future us will figure this out. Let's just take the loans out. And here we are.

It doesn't work that way, my friends, unfortunately. If you want to free up margin in your budget, one of the first things you should do is take a hard look at your monthly bills. Because every dollar you overpay is another dollar you don't have for reaching your financial goals. And overpaying for your phone bill? Well, that makes zero cents. And it's why I recommend Boost Mobile. Their unlimited plan is just $25 a month forever. No contracts.

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Go to BoostMobile.com slash Ramsey and make the switch. today. That's boostmobile.com slash Ramsey. $25 forever requires customers to remain active on Boost Mobile Unlimited Plan. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. I'm George Camel. She's Jade Warshaw. We're taking your calls at AAA 825-5-2-2-25. Trenton is in Milwaukee up next. What's going on, Trenton? I'm doing all right. I wish I could do better. We'll see if we get off the call and you have less of an E-R energy. I hope we can get a smile on your face, my friend. I hope so what's going on I'm in about

28 29,000 in debt I'm 20 years old I'm God zero to my name I'm trying to come back in a way I can and I was hoping you guys could help

absolutely well here's the good news at 20 most people have nothing to their name and I didn't get I didn't get any financial literacy until I was was like in my 20, mid-20s is when I climbed out of my debt, and I had more debt than you. So let me tell you, there is hope. That's good. What kind of debt is the 28?

22,000 of that is a car loan. 2,000 of that is a signature loan. About $6.50 of that is a credit card, and then the rest of it I owe to parents and grandparents. Okay, so just kind of personal loans to family. And what do you make? Yes. I make about 35 a month. 3,500?

Yeah. Okay, great. You're working full-time? Yes, sure. What do you do? I work federally. What was that? I work a federal job.

Federal, okay, government job? Yes, sir. Cool. All right. So here's the good news. You can climb out of this and be debt-free by your 21st birthday if you want. How soon do you want to get out of debt? As soon as possible.

Me and my fiancé are trying to buy a duplex to make that passive income. Oh, boy. That just went off the rails in another direction, I think. Yeah, she just got $6,000 reimbursement, so we are saving that for a home loan. That won't get you a Honda Civic, let alone a down payment. Mm-hmm. No. So, okay, we'll pause on that.

Put a pause on any big financial decisions with someone you're not married to. Let's talk about your debt for a second. What is that car worth? You owe 22. What could you get for it if you listed it yourself? If I listed it myself, I could about 19,000. Okay. Great.

So you're three grand underwater. So that's the amount we need to aim for. Plus, we need some to get you a different vehicle. Would you agree this is too much car for how much money you make? I bought it for the gas mileage because I'm driving an hour and a half to work every day or one way. Can we agree there's $10,000 cars that get equal fuel economy?

Yeah. Okay. Because what I'm trying to do is free up your greatest wealth building tool, which is your income because that payment is crushing you based on your take home pay. What's the payment on that? $7.50. What is the interest rate? 13%.

Ouch. And what's the insurance cost? Because at 20 years old, it's probably up there. It's 350. Oh, my Lord. So this is $1,000. So, yeah, $1,100 between the payment and the insurance alone. Yeah.

It's about a third of what you're taking home. I know we can agree that having $1,000 back in your pocket is better than the $22,000 car. Because that alone, you'd be out of the paycheck-to-paycheck cycle. Agreed? Yeah. And then you'd have that money freed up to then pay off your other debts, which would take you a couple months at that point. And I just want to clarify this even greater, Trenton, this is a third of your income going to your vehicle. Yeah.

That's the part when George said, can we agree that this doesn't make sense? It's a third of your income. You can't do anything of a third of your income is going to your vehicle. For most people, the third of their income is going to their home or their mortgage. What is your rent? Rent is 12.05. Okay. Wow. So that car is almost as much as you're paying for housing.

Yeah. Yeah. Okay. We see it. We see it. So there's one angle. I'm just showing you one option. One option is you come up with the difference that you owe,

either with through savings, through your income, selling stuff, side hustles, or you go down to your credit union and get a personal loan for that $3,000 plus a little more to get you a car to get from A to B for now. That's not your forever car,

There might be a car you drive for a year until we can get you to a better place financially to where you can get a better car. Yep. So we're going to stair step in cash from now on because, man, at 20, if you figure the stuff out now in your early 20s, you're going to be unbelievably wealthy if you learn how to get out of the cycle at this stage. But if you do that, now you've got a $8,000 loan instead of a $22,000 loan and you're paying significantly less a month. At a lower interest rate. it's a 2025 jet and I bought it for 28, which I overpaid. Yeah, which I mean, the dealerships will hose young guys like you. Yeah, they will.

Once they see a stare-eyed guy wanting a nice car, they go, we got him. 757. They probably bragged about it in the break room as soon as you left. That's the sad part. But, I mean, that can be your homework this week in Trenton. You can shop out there and see, I don't know what your, I don't like credit scores, but you would need one to get a loan. So if you have one that's fine to get a loan for, like I said, maybe you get an $8,000 loan. You take three, close the gap, sell this car, and then you take another five and buy yourself a beater.

That's thing number one on your list of priorities before anything else. And then when you do that, now it's just simple debt snowball. Smallest the largest debts, attack the small one with a vengeance, minimum payments on the rest. Okay. So do you have any money left over right now each month? With everything I calculated, I have about 400 less. Okay. So think about that.

If we freed up that $1,100 plus your $400, that's $1,500 you could use to knock out the rest of the debts, which means by Christmas you could be debt-free. That would be amazing. Now, that's some short-term sacrifice, right? Driving that beater car is not going to be fun. Selling that nice jet is not going to be fun. But on the other side of this, it's not three years of sacrifice, which is the other part. You can do our plan or here's another option. You go work 60 hours a week with a side job or overtime to try to make up the difference to clean up this date yourself.

Yeah. So you decide which hard do you want to go down. I think selling the car is the best move because, number one, I wouldn't recommend you keep that car, even if you could pay it off. We don't recommend any car, any vehicles that are worth more than half your annual income in total. And so right now you're riding that line. And then, too, you have your fiancé, and it sounds like there's a wedding coming up. How are you guys planning to pay for that? We just plan on doing a court wedding.

Okay, good. Reason one, she's trying to join the Army, and I'm also in the Army. Okay. Cool. So we can do that. I don't know if you guys have a date set for that, but we can do that sooner or later, sooner than later. And then that allows for both of you guys to kind of join forces on them. Joint incomes.

You can move in together. Are you guys already living together? We've been living together for about five months now. Okay. Does she have debt? She's got about 1,300 in credit card debt. Okay, so once you guys get married, your debt's going to be cleared by Christmas to George's point. Let's say you guys have a Christmas wedding and then you turn around and clear off her debt.

Gosh, that looks really nice for you. And we didn't get to talk about this, but I beg of you, don't buy the dupe. Do not do this. There's no such thing as passive. come in the real estate world. I promise you. Hang on the line, Trenton. I'm going to send you a copy of my book, Breaking Free from Broke. I can give you the audiobook version, if that's better for you. Hang on the line. Our phone screen will pick up and hook that up. Both of you read that and then come up with a game plan. 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. 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 Ramsey Solutions.com slash store. Buying or selling your home is high stakes because one bad deal could cost you tens of thousands. You don't want to overpay for your next house or sell your current home for less than it's worth. And that's why Ramsey trusted connects you with vetted real estate agents who have the experience to guide you step by step to make smart

decisions, not expensive mistakes. Connecting is easy. Just compare agent profiles, interview your top choices, and pick the right one for you. Go to Ramsey Solutions.com slash agent to find a local Ramsey trusted agent or click the link in the description if you're listening on YouTube or podcast. Jose is in Newark, New Jersey up next. Jose, welcome to the show. Hello, thank you for having me. Absolutely. How can we have Well, that is the question, isn't it? It is. I'm 63 and I'm going to retire Friday.

Hey, congrats. Does your employer know you? Yeah, well, actually, they offered a buyout. Nice. What was the buyout amount? Well, the buyout amount is, it's called an ISP enhanced incentive package. And they're offering $2,200 for every year of service, up to 40 years. along with another $50,000 on top of that, just to put a cherry on top of the...

How many years of service you got? I have 43. Wow, and you get up to 40. I have 40, yes. I get up to 40, yeah, which makes it $88,000 plus the $50,000. So guarantee $88,000 a year plus a one-time 50? No, no, not a year. $2,200 per year of service up to 40 years.

Oh, okay. $88,000, one-time some. But I do have a pension, and then this is the reason I'm calling is because I'm stuck between taking a lump sum, which is all at once, or the monthly. Okay. What's the lump sum? And that's what I'm trying to decide. The lump sum is down now because of the rate increase in the interest. So it's down to $531,66. $531,656. And what's the monthly payout if you don't take the lump sum?

Monthly would be $3,500. Do you need the money today? Like if you were to retire today, do you need that income or do you have other investments? What else do you have? Well, I have $212,750 in a 401k. My house is fully paid off. And my monthly budget is between $4,500 and $5,000. Okay.

So today, you don't have the money to cover the $45,000. The $212 isn't enough to keep you afloat in that way. Well, it, I mean, temporarily. for a few years because the 88,000, I would get half of that up front and then the other half over 36 months, I believe it is. I tend to lead towards a lump sum just because I get to invest it my way. Yeah, because the rate of return, if you get that monthly payment, I would figure out what the implied rate of return is for that pension. Have you sat down with a financial advisor

to actually calculate this out? I've sat down with several, actually. What did they say? Well, of course they're going to say the lump sum because they want that money to... Yeah, you invest the money with them. But they showed you the math on which is a better deal outside. Even if you invested on your own, which one came out ahead?

Well, it depends on how long I'm going to live. Can you tell us that? That would be very helpful on our calculation. What's that? Will you have Social Security coming in as well? I haven't activated yet, but that's another option. Okay. And the longer you wait, the more you'll get, of course.

67's your full retirement age. So depending on when you absolutely need it, if you're in good health and you're 63, there's a good chance you make it into your 80s or 90s, right? There's a good chance, yes. So there's a break-even point. If you took it later in life at 67 or 70, that might be a better bet for you since you don't have a very big nest egg. Okay. So I would also factor that in.

I'm saying, hey, seven years from now, I'm going to activate Social Security, and that's going to be a guaranteed payment of whatever plus cost-living adjustment every year. So that might be a good bet. In the meantime, you can use that one-one-k, the lump sum. And that's where I'm going, hey, all right, you need about 60K of net income per year to live, it sounds like. That sounds about right. So that's where I sit down with a pro, and instead of just talking about should I invest the lump sum, come up with a more holistic plan for how long will these piles of money get me by?

And if they go, hey, you know what, they'll get you by for the next decade. And then at that point, Social Security will have kicked in, that plus your lump sum and vested pension, you'll be okay. That's the part that's hard to figure out with you on air without crunching all the numbers. Yeah, of course, of course. I'm going to be okay either way. I'm just trying to figure out which would be the best. Yeah, generally, we say take the lump sum. Take the lump sum if you're going to invest it. Now, if you're going to just use it all, that's a bad plan.

But if you can invest the lump sum, apples to apples, you would find that that lump sum in the market would likely beat your monthly payment. In the long run. In the long run, exactly. Yeah. So I'm leaning towards that based on everything you've told me. Yeah, I want to go back. And that's what I'm leaning towards also. What you got for leaving, the $88,000.

Did you say that was a one-time deal? Did I understand that correct? That's a one-time deal, yes. Okay. Yes. And how much do you have saved currently that's liquid? Liquid, I have about $6,000. Okay.

Is that your emergency fund? It feels low. That's my emergency fund. Yeah, that's my emergency fund. Okay. I would bump that up. For a guy retiring on Friday, I want to have a little bit more peace that if something goes wrong,

I have the money to cover it. Yeah. I was told to take the $50,000 and use that a day. the emergency going. After taxes, of course, it would be about 38 or so. And that's fair. But Jose, do you plan on doing anything else that earns money? I mean, obviously, you're not going to do the job at the rate that you were working before, but do you plan on doing anything else to bring an income? Because that could also be a major factor in this. Absolutely.

So how about this? What if you go find another job as sort of an encore career that can float you by without ever touching these piles of money? That would give me a whole lot more confidence. in your financial plan going forward. Are you guys hiring? We always are hiring. But if you, if you did what you said and said, I'm going to take this 50K and I'm going to set that aside and that's going to be my emergency fund. The 88,000, if you can take that out as a lump, that's kind of your bridge this year to say, okay, what do I want to do with my life? And what do I want to do to kind of do that second encore deal? And then during all that time, the 212 continues to grow. If you decide that you're going to invest the $531,000 lump sum, that continues to grow, and you've just started a completely new life for yourself.

It will, it will. And the goal is to beat inflation. With anything you do, inflation is going to be the killer over the next, you know, 30 years for your financial plan. So that's why I say investing in the market, in general, is going to beat the crappy return of a pension. Absolutely. Which you have no control over. No, and that's an 8% return according to the financial expertise. the pension, but it doesn't keep up with the rate of inflation, so it's going to diminish over the years as opposed to...

Yeah, there's no adjustment. There's no cost-living adjustment on the pension. It's flat. No, there's not. So over time, the power of that money erodes. Yeah. Versus having it invested or even Social Security, it will grow with inflation. So that's why I lean towards that lump sum.

But again, I would sit down with whatever favorite financial advisor, it sounds like you got a bunch and go, hey, help me craft a plan where I... see all the scenarios. I'm down to two. Good. The one is their fees are 0.4%. And the other one is 0.9%. So I'm leaning, given everything being equal, I'm leaning towards the 0.4%. That's fair.

And those are both very reasonable rates. I mean, 1% is about the industry average and assets under management fees. And it's well worth it if you actually get to retire with dignity and sleep better at night versus trying to DIY this. and just hope that you made the right decision. And so if you don't have a good SmartVestor Pro in your corner for whoever's listening out there, jump on a Ramsey Solutions.com, click on SmartVestor Pro,

and they can take a good holistic look at your picture. They're not just picking mutual funds. If you're just using a pro for that, you're doing it wrong. You need to look at tax planning, insurance planning, cash flow planning, education planning for the kids, retirement planning. All of that comes into consideration, and they can see all of the blind spots that you don't,

and that's where a pro is worth every, Penny. Listen, guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now. You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're going to start winning with money, you have to get on a budget. And the easiest way to get started and stick to it is with the every dollar budget app. It'll help you make a plan for every single dollar coming in and every single dollar going out every single month. And guess what?

It's free. So no excuses. Download every dollar in the app store or Google Play today. Alexis is in Memphis, Tennessee at next. Welcome to the show, Alexis. How can we help? My question today is, me and my husband just welcomed our daughter into the world four months ago. Congratulations.

And we have big. Thanks. And, you know, we're getting those hospital bills in and everything, and we're wondering, we have the option to pay it off in a lump sum or paying it off in payments. Well, they're giving you a sweet discount, right? I'm wondering what the best. Well, I don't know about a discount for the lump sum. I haven't checked that.

Don't check. Just call and say, hey, I'm looking for a discount if I pay in cash in full today. Amen. You tell them how it's going to go. Okay. And you can even suggest a reasonable discount that you'd like to see. Could I get 30% off if I paid in full today for the full payment? And they might say, no, we can do 20.

Okay. You'll get something off. Okay. So when we go to, if we go to pay in a lump sum, we would have to take that out of savings. And we've been trying to save for our house. So do we put that on pause and take the, lump thumb? Yes.

Or, like, how do we prioritize that? Yes. Do exactly what you said. So what I'm filtering that decision through is our seven baby steps, which is the foundation to be able to do anything financially in a responsible way. So the first things first is after you've saved just $1,000, the next most important thing is to pay off any consumer debt and medical bills fall under consumer debt. After you've paid off the consumer debt, then we save that.

up money that's considered our emergency fund, a fully funded one, three to six months of expenses. And then after that, then we say for the down payment on the house. So the reason that it goes in that progression is so that you can protect the savings that you actually have and so that you can move into the house with a lot of peace and freedom because you have an emergency fund. You didn't take your emergency fund and use it as your down payment. So that's kind of the basis of this way of thinking. It's I want to make sure that I'm looking. at this from all angles so I don't rob myself of peace along the way trying to do something quickly.

Okay. Fair enough. Can I give you some homework, too? Yeah. Okay. So before you do any of this, request an itemized bill from the hospital and your insurance explanation of benefits and say, hey, I'm not sure that this is all correct. There might be a few errors here, some double billing.

Can you guys send me an itemized bill so I can look it over? And what will happen is they'll go, ooh, we need to take some random stuff off. and clean this thing up. Then you get the final bill. Then you can negotiate the payment. Okay. How much is it? What's the lump sum today?

The lump sum is a little over $6,000. Okay. And how much do you have saved in total? That's no insurance being applied. We have a little over $13,000. Okay. And is the medical debt the only debt that you have? The only other debt that we have is my husband has $1,600 left on his car.

Okay. So my plan for you, after you've done what George said, you get the itemized bill, you go over there and say, hey, I can't pay $6,000, or I can pay the lump sum, but I need a discount so I can give you the money today. And let's say they do it for, I don't know, $4,000. So then you're going to say, okay, great. Now I'm going to take the rest of the money that I have. I'm going to reach over and pay off your husband's car, and now you're completely debt-free. And not only are you debt-free, but you've got some money to begin to pad your three to six months of expenses. So now the next step is to go, okay, what is a fair amount for three to six months of expenses? It's not three to six paychecks. It's not three to six months of your budget with all the bells and whistles. It's just kind of the way I do it is, hey, man, if something happened, what would we need to make this ship continue to sail? And so whatever that amount is, times that by six. All the non-negotiables.

Yeah, all the non-negotiables. We need to have food on the table, groceries, but we may not be eating out constantly. Right. So now we stack that up times that by four or times it by five and set that aside because you don't have to do the full six months. I know you're trying to save for a house. If you want to do it at four months, I'm fine with that. Stack that up. Now we start the down payment.

And so that's the progression of this. And if you do that, you guys are going to be sitting pretty. What do you think? That's what we want. What's your household income? Yeah. That sounds great. Well, right now I'm a stay-at-home mom since we had my daughter.

Wonderful. And my husband is making about 75. Okay. So now it becomes, okay, how quickly can we save up this down payment if he's making 75 and we have our normal bills? And then that'll give you a pretty good picture of when this house is going to happen so that you don't go, well, I thought it was going to be a year from now. Well, the math will show us at this rate, it might take three years to save up. that down payment, depending on the type of house you want. So that's where you guys can come up with a game plan and be aligned so that nobody, you know,

is a little starry-eyed or confused or frustrated that we aren't where we want to be. And the baby doesn't care. I can tell you that much. The baby is living like next to your bed, right? Right now? Are we in the nursery yet? Not yet, no. Okay. Good.

Well, you guys are reasonable people. I can tell. I can tell by the fact that you had money saved. I can tell by the fact that you don't have a lot of debt. And those are the behaviors I want you to continue. I want you to continue to avoid debt. I want you to continue to be savers. And I want you to be budgeters going into this. So if you don't have every dollar, we'll gift you that for free as your baby congratulations gift. Late baby shower gift. There you go. Sorry, we're late to the party. Thanks for the call.

Peter is in Salt Lake City up next. Peter, welcome to the show. Hi, thanks for taking an time to talk to me. Absolutely. What's your question? I'm 27 years old and I just had a career-based question. I work at a local utility here. It's just pretty steady. I make a good income. I make about $140,000 a year. Nice.

I've got a single income of three kids and a fourth one coming any day now. Congrats. Thank you. And I'm just considering potentially taking an opportunity for a consultant's company, which is a lot of demand in the power industry these days. But I'm just wondering, is it worth the torrent? potential a $20,000 to maybe $30,000 pay increase to move to a job that, you know, could be, it's probably going to be similar benefits, but could be less steady overall. And, you know, if there was a contract, I might be looking for work.

Now, you're working for another company doing the consulting. You're not just out on your own doing consulting? Correct. It would be, you know, probably a fairly large consultant set. Okay. So there's less risk right there because it's not all on you. someone else is going out and getting these contracts, and, you know, they're incentivized to do that. So you're saying you would make 170 likely?

Best case, probably, you know, 160 is reasonable. I don't have a job off on the table, but looking at former teammates who have gone, that's roughly what it's been. Yeah, I mean, if the benefits are good and the income's good, I would take it. Because the good news is power will always exist, right? You can always go back and do a job in the energy field. Right. But now you're a guy who was making $170 looking for a new job. And so that could also help increase your chances of making more in the long run.

Yeah, I mean, what's the downside? It's just a new gig, and you have to kind of prove yourself in that field? I guess the downside is I'm just kind of risk-averse, and I feel comfortable and steady where I'm at, and I don't know, and I feel hesitant to make a jump to a place that might not be as stable. What caused you to look at this to begin with? What caused you to kind of look up and out and say, maybe I need to look at things that pay more? Is it debt?

Is it kids college? What fuel do you to even be looking at? So we are baby steps, four, five, and six, you know, a long-time listener. And it's mostly just looking at, it's the extra money that definitely motivates me. I mean, two grand, that's 500 bucks per kid per month going into a 529 plan.

When you look at it that way, I'm willing to work and hustle to do that. Yeah. Yeah, I guess, yeah, I just, you know, I guess I'm always, if there's a downturn in the economy or something like that. Yeah. I think this is a problem to find a job. I think it's another kind of values and priorities play.

If you're saying, hey, I've got these kids, college is coming up, I could use the money, then that makes sense that you would begin looking for jobs that offer more money versus staying put and doing the safe play. Plus increasing your skills, new experience. That's only going to help you in the long run. And, man, I mean, your field isn't going anywhere.

We've got to keep the lights on around here. So I think you're in good shape as far as, you know, your job not being replaced by AI anytime too soon. Good luck, man. I'm excited for you. Congrats on the baby. You've heard from me and the Ramsey personalities for years, but nothing beats actually getting together in person.

That's why we created the Live Like No One Else Cruise. for seven days, we're vacationing with you and 2,500 Ramsey people in the Western Caribbean with live shows, us, new content, us, and more. If you're on Baby Step 4 or Beyond, come spend the week with us next March. Choose your cabin at ramsysolutions.com slash events or click the link in the show notes. Our scripture of the day, Psalm 2713, I remain confident of this. I will see the goodness of the Lord in the land of the living. Our quote of the day, James Madison,

the circulation of confidence is better than the circulation of money. Very presidential. Thank you for that. Jane is in Chicago up next. What's going on, Jane? How can we help? Hi. I'm trying to figure out if selling our home and paying off our debt and rent is kind of starting over

is the best next move for our family. Okay, tell us more. How much debt do you guys have? I mean, not a ton. The real problem comes from we refinanced a few years ago, and now I'm just having a hard time making ends me every single month. You're just saying the mortgage payment is just too much? It's not the consumer debt? Yeah, like mortgage plus everything else on top of just the whole combination. What do you pay? What do you pay? particularly is now more money.

What do you pay every month? My mortgage is 3,100. And what's your take home between you and your husband? I bring home about $4,000 a month. My husband gives me three. We are not on the same page when it comes to finances, so this is... You said he gives you three? Part of the reason.

Understood. Yeah, yeah. How much does he make? Three to four. On the varies, he owns his own business, and so it kind of just depends on how business is going. Okay, so that's like his pay, that's him paying himself, or is there other money that he's paying himself that you don't have access to?

Does that make sense? I do not have a full financial picture of his. So he gives you three to cover some household bills and then says, kick rocks, pound, saying the rest is mine. Well, not exactly. I mean, he drives a truck, so there's like maintenance and other things, but I do not have a full picture yet. Okay.

Okay. But who pays the mortgage payment? And I have... Well, all the bills... I mean, I pay all the bills out of all the money that ends up in that... Out of your account. So what I'd want to know, obviously, as it stands, if we just say, hey, we have 7 grand of income,

obviously the mortgage is way too much. It's no wonder it's half, so that's why you're feeling that. But the second question, I'd want to know, before we even start the business of combining money, because I can tell this is going to be a long road. I would at least want to know from your husband if the $3,000 he's giving you, is that just that's what he pays himself? There's no more.

The rest goes towards, you know, expenses. Or is there more that he's just keeping as his own guy money, you know, that he is spending as he wills? I'd want to know that because that is going to play a huge factor in how we approach this conversation. If you guys actually bring home after tax monthly income is like 10 to 12 grand, then we'd say, oh, the house is fine. It's not on fire. There's no problem. Don't sell it.

But if you're telling me, this is all the money to your name consistently, then, yeah, 3,100 out of $7,000 is a problem. Okay. Yeah. I mean, I don't think he's keeping a ton of money anywhere, like hit in or anything like that. I do think a lot of it goes back into expenses. You know, I am obviously hoping to get on the same page with that, and that is a goal that I'm working towards. But do you know how much debt he has? So we need to be like 10 to 12.

Well, my biggest concern is we put out an IRS debt from back to Texas. Other than that, I don't think we have very much debt in general. We have 12,000 in credit card debt. I don't think he has a ton of additional debt. How much is the back debt? How much is the IRS debt? $50,000. Say it again, please?

50,000. 50,000. Okay. So you got 50K to the IRS, 12K and credit cards, anything else? Car payments. No, that's all I know about. I would pull your credit report to get a clear picture on where things are at, and I would encourage him to do the same. Even if you guys aren't on the same page,

we need a full picture of what debts are out there so we can attack this thing. So if you today, if you sat down today, Jane, let's pretend you get off the phone here, you get home from work, your husband gets home from work, and you say, you know what, I've been thinking and I'm realizing I have a lot of stress about our financial situation. I wonder if you would sit down with me. I pulled some of the things from the personal side. Can you pull some numbers from your business? I just feel like I need a picture of what's going on and it will give me a lot of peace just to see what's going on with both sides of our life. What would he say to that? Probably no. I tried to have a conversation a week ago. And the hesitant of before when all the money was coming in, the business wasn't getting prioritized. And so that's kind of when things were. And he does not see, like, re-combining or having that conversation in the future for him.

Forget combining for a second. Just so you can understand, because the truth is him having 50, him having. having created $50,000 of IRS debt affects you greatly. So he can't assume, and I know you know this, I'm just saying this for a good measure. He can't assume that the things that he's doing as an individual doesn't affect his marriage as a whole because when he got married, he became a unit with another person. And so that's the thing, that's the part of this that has to work out is just forget combining the money, just him understanding, hey, what you do does affect me.

You can't think that your whole life over here has zero effect on me. It does. So if you say that to him, what's his response? Get out of my face or I'm not having this conversation. What do you think he'll say? No, I hope that I mean, I hope that would be heard. And I think if I asked for it from a business perspective, that maybe I would be able to get some numbers probably. And maybe you tell him, maybe you start with saying, my intent today is not to combine money.

I know how you feel about that. but I would like to understand what's going on over there just so I'm in turmoil over here. I'm thinking about selling the house. Like I just, Bob, I would really love if you could just have some transparency with me just so I can sleep at night, right? Especially if you're the one paying the bills. Right. Right. So I wouldn't sell the house. I think that is a last ditch effort if we realize there's no hope in the situation to make more than $7,000 ever again.

But I think that what you're going to find is that the house really isn't the problem. It just feels like a good shortcut, and it's not going to solve all the problems underneath. Right. Okay. So the question is, can you afford to pay off the IRS debt, the credit card debt in a reasonable amount of time, or is this going to take a decade? Right. Well, I do have a payment plan set up. We are working on it. So it should only take a couple of years, assuming I don't continue to add to it. And that's my biggest concern is adding to it. Do you guys not have someone doing the book?

And that's the part, yeah. We don't just because it's just a small single thing, but maybe that's something you need to look into. It might be a small business, but you got a big problem with the IRS. I'm going to tell you right now you need to go on Ramsey Solutions and you need to find a tax pro that can help you with this at the very beginning to get you started. And then you need to be looking for somebody who can manage your books ongoing because the definition of insanity is doing something and expect. a different result. You guys have tried or he has tried to manage these books and there's 50k in debt. And then you're thinking, gosh, assuming we don't keep, right? So there's not a strong sense of

confidence. And that's totally fine. Managing books is a completely different set of skills. So invest the money. You will save money by investing the money to have somebody do it correctly for you. Some IRS penalties and fees would have been worth paying someone over, let alone the stress and hassle. Well, here's where, and let me just point to this because here's a thing. Now I know what he's not is setting aside any sort of monthly withholding or any set of, I'm sorry, quarterly withholding, which means that means the $3,000 that he's giving you, he doesn't even have it to give. So that means, is this business even making any money? That's what my brain goes to immediately if we're not paying our taxes and we're not taking any income.

So that it points to some deeper questions there that need to be answered. Okay. Have we given you enough homework? We gave you a lot of, Jane. Sorry, Jane. This is not fun. I mean, I'm happy to have somewhere to start because I just feel very overwhelmed. And call us back. We'll start with the website.

Listen, I want, I am saying this. I want you to have these conversations that we had as homework. And then I want you to email again and call back and say, Jade told me to call back, schedule me. And we want to know what happens next so we can help you out and help you take the next step through this. Plus, the people love a storyline. They love the way are they now. Yeah, they want to know what happens.

We hope for a happy ending here, Jane. That puts this show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.