The Ramsey Show - Take Debt Off The Table For Good

Episode Date: July 8, 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 in the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, your host, George Camel, Ramsey Personality, number one best-selling author, co-host, The Smart Money Happy Hour on the Ramsey Network. He's my co-host today.

The phone number here is 8255-225. Maddie is in Sacramento. Hi, Maddie. How are you? Hi, I'm good. Thank you for taking my call. Sure. What's up? Okay, I am 23 years old, and I have over half a million in a 529 that was funded from Social Security money given to me after the death of my dad when I was a child until age 18. my mom ended up paying for all of my tuition because she had the means, which is why all that money is sitting. I also have 50K in the S&P 500 and I max out my Ross, which is funded from that 529. My financial advisor, he told me not to open a 401K.

He is into credit cards and points and that whole game, which is kind of making me question if he's investing my money, well, specifically the 529. Okay. So your question is what? My question is, is he investing my money well? In the 529? I don't know. What's it invested in?

I have no clue. He just told me it's in a 529. Do you have access to the account? I do. Okay. You can go in there and see exactly what the investments are, and that will help you figure out. Are you looking for a high return and you're not getting it? What's the thing you're worried about?

I'm just worried that it can be sitting somewhere else and growing at a better rate for my future. Okay. All right. Well, the first rule of investing is you don't put money in something you don't understand or don't know. That's how you lose it. Okay. The second rule of investing goes with the first rule, and that is you don't hire someone that does things. for you that you don't know what's going on. Instead, you hire someone that helps you decide

because they teach you. So your financial advisor should have the heart of a teacher, meaning they should have this desire for you to understand what you're investing in. Yours apparently does not have that desire. How long have you used this person to manage your money? So he's actually the financial advisor for the family business, so I kind of just automatically automatically adopted him. Mm-hmm. It sounds like you guys have different financial values the way you're talking about this. Well, I mean, the credit card points thing is absurd.

And then not opening a 401K. That's what. My only thing is he's gone, well, I can't manage that, therefore I can't make money from that. Therefore, I don't want her to open one. Yeah. Which would be reason to fire him. Here's the other thing is, if you don't feel good about someone that's managing your money, they shouldn't be managing your money.

period regardless of the reason even if they're a perfectly legitimate person and you just don't you know you just want to hit it off with them you don't vibe you don't vibe if you're not vibing you should go somewhere else i mean really so you know the credit card thing scares you you don't know what this is in you've kind of fallen end of all of this off of your parents business how old are you i'm 23 okay all right well i you know if you want to try to stay with him because he's a family friend and has been with you forever. That's fine. You need to sit down and go with them and go have a meeting and say, okay, I'm now actually

a standalone adult, and here's what I require in a financial advisor. I require that you teach me what is going on with this and that I understand it or we don't do it. Okay? You don't do any trades without my authorization, and I have to understand what you're suggesting to me. And so let's go through the portfolio. If you want to do that, if you don't want to do that, if you want to just, if you want me to just do what I'm supposed to do and do what you tell me to do, then I need a different financial advisor.

Because I'm not going to do what you tell me to do. You're going to do what I tell you to do. That's how this is going to work. You work for me, not the other way around. And honestly, there's a percentage of people in the financial advising world who function off of arrogance because they're very, very good at math. and they think they're supposed to be taking care of the little people, which is actually bull crap, okay? Instead, their job is to not be an arrogant jerk, but instead teach you.

That's their job. And if they're not teaching you, they're failing at their job. That's why the SmartVestor pros in the Ramsey program that we vet, they don't work for us, but we won't send you to someone unless they have that heart of a teacher. And so, you know, what would I do if I was 23 in your shoes? I would go sit down with your existing guy, talk to him that way, because he probably still looks at you as if you're five. Mm-hmm.

And that needs to stop this week because you're not five. I'm 500,000 is what I am. I'm not five. And so, and that's a big account. And so he needs to treat you with that kind of respect. And then I also would sit down with a smart vestor pro and interview them. And then after you've had both discussions, you as a woman, of 23 years old and a good brain, decide where you want your money to be.

Now, so that's the first thing, and that's a big deal. Does that sound right to you? Does that feel comfortable? Yeah, definitely. Okay. Then once you've done that, I also want you, once you select someone, I want you guys to figure out what the flip you're going to do with $500,000 stuck in a $529. Because you're going to get hammered with taxes on that at some point.

There is a provision to move some of it at age 30, before age 30. into, or maybe after age 30, which is it, George? It's before. Before age 30 into a Roth, but the rules on it are very strenuous. So I want you to learn about beginning to move that into a Roth IRA as you can. And it's up to 35,000 is the new Secure Act 2.0. So I assume that's what he's doing. And so the other 400.

So you can do it up to the max of the Roth. The other 365 is screwed. Yeah, I mean, there's not, you can change the beneficiary. So if Maddie, you know, has kids of her own one day, they can use it. Or brothers or sisters or anybody else. you want to pay for college. It becomes like a legacy education fund. You're going to pay a 10% penalty on the growth and your taxes on the growth. If it's not used for education. Yeah. And you're not going to use half million dollars for education. She's graduated.

Her mother paid for it. That's over. So somebody didn't think this through very well. Should have used the stinking 529 and giving you the money she was going to use to pay for the education and at least gotten it out from under that 529. Yeah, you've talked about that before. I love 529s, but I very seldom run in. to them being overfunded, and this is a case where they were overfunded. That's tough. Yeah, up to a couple hundred grand, and then it's used for education, is fine. But no more than that in a 529.

And so I don't, and it can't just sit there forever and grow. It gets worse. The problem gets worse and worse and worse. So, yeah, you're right, George. There's not a lot she can do, I don't guess. Yeah. But that's why you got to know, I mean, she learned this years ago, because he actually taught her what he was doing and why he was doing.

it. She could have understood some of this, but she just, you know, there's two parties at fault here, the one that didn't teach and the one that never asked. Well, and this is the same guy told her mother not to use the 529, and she's telling her not to do a 401k, which doesn't make any sense at all. You need to be doing your 401k. Should have used the 529 money first and then moved on to her own cash. Exactly. Exactly. For sure. Let me tell you something I see happen way too often. People fall behind on their bills and they wait. They hope it will work itself out. It won't. That's why I recommend Guardian Litigation Group. Here's the deal. If you've missed payments, collectors are calling, or if you're getting letters threatening legal action, that's not something

to ignore. That's the moment to deal with it, because when you do nothing, it escalates. They can take you to court, and if you don't respond, they can win by default, and that gets expensive fast. Guardian litigation isn't a call center. They're an actual law firm. From day one, you're assigned an attorney to represent you. So if things do escalate, you're not scrambling and you're not hit with surprise legal fees. Guardian litigation only gets paid when the debt is negotiated and you accept the settlement offer. This isn't about shortcuts. It's about dealing with the problem before it gets worse. Go to Guardianlit.com slash Ramsey today. That's guardian l-it.com slash Ramsey today. Attorney advertising. Results may vary and no specific outcomes guaranteed.

Raquel is with us in St. Louis. Hi, Raquel, how are you? I'm doing good. My question is, I am wanting to know how is it that I can do the envelope system. I'm trying to save, you know, the first thousand, but everything is direct auto pay and direct deposit. And I feel like, do I go withdraw everything and then put in envelopes and then put it back in the bank? I'm really struggling with that. And just when I get the money saved, a major thing happens, like, you know, recently. But how do I do that? Okay.

The envelopes for the $1,000 emergency fund or envelopes for other categories? For the first to get my $1,000 and then to do the other category. Okay. Well, the $1,000 could simply be transferred into a savings account. It doesn't have to be in cash. The other categories, most people are doing the envelopes for just a couple of categories these days in the digital world. Mainly groceries. Groceries and maybe eating out and a couple of things like that.

By your light bill, you don't need to take out cash to go pay that. You don't need an envelope for very many things. If you do need, if you want to find your grocery category in cash into an envelope and write food on the outside of that envelope, and then only buy your groceries out of that envelope. That's the system we've taught years and years ago for a whole bunch of things. Now mainly people do it for food and a couple of other things. If you want to do that, you could just take the money out of ATM. Okay.

I just go up to the teller window and make a withdrawal on your account for that much cash. But how do I budget? I'm trying to get on a budget. How do I get on a budget, divide it up, and then say, okay, this is what I have to put in, and this is what's in this for each amount. Oh, I see. Okay. The Every Dollar app is the easiest way to do that. It's the budgeting app that we invented years ago,

and it has grown into actually the full Ramsey plan where it holds your hand and helps you decide what to do with each of the categories so that you're following the baby steps. But download the Every Dollar app at Apple Store or at Google Play. It's free, and you can set up your budget on it. It won't take but about 20 minutes to set it. up. And they'll guide you through the whole process too. It's very, very hand to mouth, easy to understand. Even I can do it. Okay. And then I can just leave all the money in the account and work

with that. Exactly. Or if you wanted to say, I'm going to do the grocery envelope, I'm going to do, I'm going to do cash for groceries. Then you could withdraw that portion, whatever you write in every dollar and say my grocery budget is $700, okay, whatever. I don't care what it is. Okay. then you would go to the teller window and take out $700, or you go to the ATM and take out $700 cash, put that in an envelope, write food on it. And that transaction will show up in your bank account, which now you can track in every dollar.

So you track your $700 against the $700 planned. Now you've nothing left to spend because it's all in cash in the envelope. When the envelope's out, it's out. So that's the goals to sort of force the discipline with the envelope system. The old envelope system that your grandmother used, your great-grandmother used. And I've got, people have sent me antique ones from the 20s.

Oh, wow. I got one from 1913, even. And it's a little, little card file, little envelope system. And you write, you know, you write a category on the outside. And when you, if you write $200 for clothing on there for the month and the shirt is on sale for $2.25, you can't buy it. Because you don't have $2.25. You've only got $200 cash in your clothing envelope. But you can spend up to $200 on clothing completely.

guilt-free because it's allocated to that. Now, you can have that same experience, same experience digitally, but man, I'll tell you what, when you are doing it physically with those Uncle Benjamin's in the account, they're laying right there looking at you, Uncle Ben is looking at you, you will spend less. You will take some stuff out of that cart. Yeah. You will not spend, you will not go, oh, well, I'll fix it later. You know, I'll move money. You don't lie to yourself when there's real money staring at you. So I do miss the old day. of the actual cash. You see this TikTok trend

called cash stuffing. Gen Z claims they've invented this new method of cash stuffing. It's the envelope system. Yeah. But I didn't want to say it that they ripped it off you. Well, they didn't rip it off me.

I ripped it off your great-grandmother. You weren't around in 1913. But hey, think about it. In the old days, what happened was on Friday, was payday, and the boss counted out money. And you walked out with money in your hand. And when you got home, I'm talking 1930s, 40s, 50s.

Okay, when you got home, you counted the money out on the kitchen table and you went, that one for you, one for you, one for me, one for me. This goes in the grocery envelope. This goes in the clothing envelope. This goes for kids' activities. This is for gasoline. And the envelope system worked perfect because the whole thing was cash-based. Now you're shopping online.

It's much harder to use the envelope system for everything like you could back in the day. Yeah, you just, you have, yeah, every dollar house, be the, only thing that holds you accountable digitally back to that. I'll tell you the other side note that's just interesting. If we brought this back, there would be a revolution. People would burn Washington, D.C. down. If the taxperson from the IRS had to stand in the lobby of your company and you got paid in cash and you had to take your cash and hand it to the tax collector and count it out every time you got paid. And people would realize how much money your government,

how big a tick on your butt the government is, how big a parasite the government is. And they would, I'm telling you, there'd be pitchforks and torches. Oh, yeah. If you actually saw and physically had to take possession of the money and then give it back in cash to the government, every time you got paid,

people would, their faces would melt off. Just the amount of $100 bills you're just giving to the IRS for doing nothing. That hurts. It would be a tea party round two. Yeah. So it was a really brilliant idea to do income tax withholding. Just make it all behind the scenes. It was a brilliant psychological trick.

It's like the worst magician ever. Otherwise, you end up with Matthew, the tax collector, who was hated even in Jesus Day. Hello. Wow. So that's what you end up with. Of course, they were crooked. Oh, wait a minute. Yeah, well, that's different.

Right. That's completely different. Yeah. Ouch. Blake's in Orlando. Hey, Blake, how are you? Hey, Dave, how's it going? Better than I deserve.

How can I help? All right. So I have a truck loan that is about $15,000. And I was having a discussion with my fiancé the other day. She thinks that I should make a lump sum payment and just pay it off out of my savings that I've been holding on to for a down payment on a house. and I think that I should continue making payments over time, continually making the minimum payments,

but building on top of the principle. You know, it's good that you get used to her being right early before you're married. The training is complete. When are you getting married, Blake? October. Congratulations. That's awesome. You got a good one, I think.

Yeah, I've been at this 40-something years, 44 years, and I'm still working on being wrong. It's hard for me. Oh, man. Yeah, she completely got you. Here's the thing. If your truck was paid for, would you borrow on it to put a down payment on your house? No. Same thing.

Okay. You follow that logic? Right. Yeah. Do you have any other debt? Pay your truck off today. Nope. That's the only debt between two.

of us. Amazing. What does that leave you in savings? I think using hers that puts us... No, no. We're not putting her money on your truck.

You're not married. No, no, no. I'm just saying, you know, by the time that we are married, combined savings after the truck is paid off. Oh. We'd probably have about...

Let me do math here. About 80 grand. Oh, you're going to be fine. And you'll build it back up real quick. Yeah, that's good. Without a car payment. What's the truck payment?

It's the monthly payment. I'm paying 500 right now. That's like 30 extra dollars on top of the minimum payment. Nice. I would pay it off. I tell you, here's an interesting thing, Blake, your truck will drive different when it doesn't drag a payment book around. Feels lighter. Yeah. Gets better gas mileage. That would be incredible. Fuel efficiency increases when there's no payment. Yeah, just get used to being wrong, brother, and you'll be all right. What's up, guys? It's Jade Warshot. Now, I know a little something about saving money while my husband. husband and I were paying off over $460,000 in debt, we went over every expense in our budget to find ways to cut back. Nothing got a free pass, including our phones. And you need to be doing the

same thing. And now with Boost Mobile, one of the easiest places for you to save money is your phone bill. Their unlimited plan is just $25 a month forever. With a price that nice, why would you ever go back to your old carrier? And with Boost Mobile, there's no contracts, no hidden fees, and no surprises, which makes this a no-brainer when it comes to saving money. Best part, you can keep your phone and your number when you switch. So it's not like you're making some huge lifestyle change. Listen, you need a phone, but you don't need to be overpaying every month. So whether you're paying off debt or building wealth or you just want to keep more of your money in your pocket, this is a win.

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. For most people, the largest transaction you make is your home, buying or selling a home. And it's a little bit complicated, and, you know, not everybody knows how to do it. But the problem is it's actually easy to pass a real estate test. Now, I passed my real estate test. I was 18 years old.

It was 1978. I took the test in 27 minutes, and I got a 97. And I'm not a savant. It was that stinking easy, okay? and that means I was eligible at 18 years old to sell a house, and I sold one three weeks later. That should scare you, people. The ease in which an 18-year-old can complete that transaction. That should scare you, right?

So if you're going to list your house, don't list it with 18-year-old Dave, okay? Three weeks after he got his real estate test. They must have really trusted you. You were a good salesman. As a guy I went to high school with, bless his heart. And the transaction went fine. You didn't screw it up. Yeah, he, yeah. Anyway, if you're going to buy a house, get a pro in your corner. If you're going to sell a house, get a pro in your corner. A pro is someone who's actually done a lot of transactions, like 50 or 100 this year kind of thing. Okay. This is not somebody who, you know, I've done, how many houses have you sold? Four. That's not who sells your house. Okay. That's not what you do.

You don't want a side hustler. No. Or I just, I always dreamed of being, no, I don't care. Not selling my house. house. Okay. This is a $500,000, $600,000, $200,000 asset here. All right. So how do you find someone you can trust that's high octane? We vet them. They're called Ramsey trusted agents. You can find a Ramsey trusted agent for free at ramsysolutions.com slash agent, or you can click the link in the description. If you're listening on YouTube or podcast, we'll take you straight there. Julie is in Greenville, South Carolina. Hi, Julie, what's up? Hey Dave, hey George. My question today is about taking a dream vacation to Hawaii. My husband and I have been dreaming about taking ourselves to Hawaii, and now we have three kids,

so we would love a family vacation. To Hawaii, we wanted this for about 12 years now and started saving. On the bad side of the things, we started saving only $100 a month for almost the last 12 years. Where we failed is thinking that would get us somewhere in the ballpark of $10,000 to maybe $15,000, and that would be enough to take five people to Hawaii for a week or two. We failed to think for inflation. No, you failed to save enough money. Inflation didn't have anything to do with it. You just weren't saving enough money.

So you truly were dreaming. You weren't working a plan. So the question then is now we only have $14,000. And every time we try to run the flights. What's your household income? $70,000 between the two of us. So what does it need to be? How much do you need to spend on this vacation for you to get to go?

Actually go, not just pretend. 15 to 20. Okay. No, our thought is, do we just... 15 to 20, you've got 14. Yep, exactly. So put some stuff on Facebook marketplace and buy the tickets. That's the question, is do we just say, you know what, let's take it?

We've always dreamed of this, let's do it, let's find the money, let's pull it out, because we're not putting anything on debt. So let's just work harder. Wait a minute, wait a minute, wait a minute, wait a minute, wait a minute. You're not putting anything on debt. You have debt? No, no, none. We refuse.

You're saying you want to do this. Oh, you mean you're not going to borrow the money for the vacation? Yes. How long is the trip? How many days are nights? Right now we want to go seven nights. Okay. I was just wondering what the levers we can pull.

Because if you go six nights, well, all of a sudden, you can afford it. So have you done the research to actually see who has the best price? We've been researching for two years consistently, thinking we had enough for two years, and we just keep pushing it off. And so my thought is, let's push it. it off another year or let's just go to a lesser quality hotel. Everyone's tired of hearing about this trip. I think you just need to go ahead and go. We can't wait another year. I mean, I just, so this is just for fun, Julie. I like Costco travel. I jumped on there, found a Maui package,

five travelers, two rooms, 11 grand, including flights from Greenville. So I'm just saying, he did that while we were talking, Julie. That's 60 seconds of research. The goal is spring break. only because children, summer sports. Julie. And so we're just thinking through all the options. Did you not hear what he just said? Yes. And he went on Costco.com and booked a trip while you were talking.

This is for August 4th. We're talking like a month from now and it's a week-long trip. So I'm just saying we need to look at some options here and not kick the can down the road. Because the kids are free this summer, aren't they? So here's the problem you're going to have overall. You need to go on the trip and you need to pay cash for it and you need to figure out a way to do it between now and spring break and stack up whatever cash between now and then to add to this.

So you get to do close to the trip as you want to go. But the problem is, is you have put too much psychological bull crap on this trip. Your expectations are so stinking high. I don't care where you stay. You're going to be disappointed. Because you've been dreaming of this for 12 years. And I've been researching, not well, but you've been researching.

George beat you in 30 seconds. I might go. I'm excited about this trip now. George, about the book a trip right now. Whitney, here comes George. We're going to Hawaii. I seriously think you're going to be, you've got this thing built up to being some kind of nirvana. It's nice. I've been to Hawaii a couple times. I'm not mad about Hawaii, but it's not actually my favorite place to go. If I was going to spend that kind of money, there's probably a different island I would go to, honestly. But you go, it's going to be nice. You're going to enjoy it. You ought to go see Diamond Head. You ought to go see Honomom. Bay and, you know, run over to Maui. Go see the Big Island if you can with an active volcano. There's some great diving there if you guys know how to do diving. And, I mean, you know, it's a good, it's a good trip. It's a good trip. But there is no piece of travel.

It's like owning an item. As soon as you buy the car, stupid thing breaks. As soon as you buy the house, the hot water heater goes out. And all the little shine and all the little gloss on this dream goes away. 90% of the excitement was the fantasy of it happening. Exactly. The anticipation and the actual event is going to be a letdown. Because you've got this thing up so high in your brain.

It's going to rain. Someone's going to get sick. The kids are on their phones. Every afternoon it rains and they call it a blessing. A Hawaiian blessing. Nice way of saying, it's freaking raining again. Okay. Like, what are we in Seattle?

I mean, it's crazy. It's not like the pictures. They don't show that on the brochure. The famous website of the hotel, right? It's like, where is this hotel? Not the one I'm staying in. But yeah, I want you to go. And I want you to have a good time.

But let's be more, let's have reasonable expectations as to what this trip represents and what this trip is. It'll be a fun thing to do. Your family has saved gradually to be able to do it for a long time. You've finally gotten to where it looks like you're going to be able to do it. it, but maybe not the Ritz-Carlton version, instead the Motel 6 version or whatever it is. I don't know. Where were you staying on your little Costco flight? You know, they only choose quality hotels, so I trust them with my whole heart. Yeah, and you can upgrade, you know.

No, really, I mean, they sell caskets. I did two trips. I did Cabo and I did Cancun. I'm saying, I don't tell you the hotel? They will if I keep going. Oh, you got to buy it. Yeah, I got to keep going. I'm in airfare right now. You know, it's a whole process, Dave.

I can't just book a trip. It's hotel. What's in the package? There we go. Continue to hotel. Here we go. This is very exciting for me. I feel like I'm getting 90% of the thrill of booking the vacation. Costco owes us big time for this freaking endorsement. Yeah, I don't think they even do marketing. Here we go. These are, you know, three and a half star hotel. What is it? It's the Aston-Kan-Poly Shores. Three and a half stars. Okay. It's not a bad room. Three and a half? That's not good enough for Dave, apparently, guys. But, you know, it's almost a four-star. Yeah.

Yeah, you're right. It's almost a three. You want a luxury. But you can actually choose different hotels, which is nice. Okay. You can go down here. And you can upgrade that. There you go.

Waldorf Astoria, four and a half. That's going to cost your pretty penny. Oh, that goes up. That double the cost of the trip. Oh, okay. Now we're up to where Sharon Ramsey wants to go. That's a live like no one else package right there. Okay.

But hey, go on the Ramsey cruise. That's less than half the price of Hawaii. There we go. Think about it. Could be. Get back to me. Get back to me. Yeah, that's a lot.

I don't know. It could be. How many, how do we stack them in those cruise rooms? Yeah, three bucks. Stacked high. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people are surprised by how affordable term life really is. Even if you're not in perfect health. Look, I understand the hesitation, since most insurance companies make it more of a hassle than it needs to be.

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Michelle is in New Haven, Connecticut. Hi, Michelle. How are you? I'm good, thank you. How are you? Better than I deserve it. What's up? So I was actually calling to find out if I should use my 401K to pay off my student loan debt. No. You know why?

I do know why. I think pretty sure I know what you're going to say about. Okay. What am I going to say? Well, the tax penalty and then also the tax for your income market would reduce what you get significantly. Yeah. So you're going to pay a 10% penalty plus your tax rate on what? whatever you withdraw, which is going to be like 35 or 40% when we're done.

And so it's like saying, Dave, I want to borrow money at 30% interest and pay off my student loan. And that wouldn't make sense. So how much do you have your student loan? I have 16,000. Okay. That's not bad. Good. That's good news.

What other debts have you got? I've been honestly. Basically an orthodontic debt of 4,800. Mm-hmm. How old are you? A mortgage. I'm 41. Okay.

You're single? recently divorced, yeah. Okay. And you have a mortgage? What's your mortgage balance? Well, the mortgage, the balance is $205,000, but it's a three family. I live on the first floor, and the tenants cover the mortgage. So I actually have a positive of around $440 a month.

When the tenants pay, they cover the mortgage. Yeah, that's good. Okay. What made you feel hopeless enough to go to your 401K to pay this off? I think the divorce kind of put some things in perspective, especially since I started now having to pay child support, and also now paying for child care just because I wanted my son to have more time with peers and other people besides family.

So the budget got tighter and you went, well, I don't know if I'm ever going to be able to pay this off. What is your income? My income, my salary is $100,000 a year, but my take home ends up being around $56, $51 a month. And effectively, after the renters pay, assuming they do, you don't have a house payment because they're paying enough rent to cover it. Right. And so why can you not knock this 16 out pretty quick? So that is what I've actually been working numbers, and I was part of the problem. I think is I was putting 12% of my 401k, I've not that down to 4% to take advantage of my

company's match. Yeah, what I would do is just stop your 401k until you're out of debt. You're about to unplug the whole thing anyways, so pausing is way better. If we're going to look at the consequences here. And you'll be back to investing. And the other thing you've got to think about is all of the growth that was unplugged if you were to do that. If you put that in an investment calculator of what that amount would have grown to,

it'll make you stop real quick. But let's just stop the 401K temporarily. on beans and rice, rice and beans and beans and knock out the $4,800. You need $20,000 in your life, you get your life back, right? Right, right. At least that portion of your life.

I mean, you've still gone through a divorce. You've still got the other heartache and the things from what you've been through. But if you got $20,000 out of $100,000, you should be debt-free and well under a year. Yeah, a year would be about a little over $1,700 a month would knock it out, six months. If you could get intense and do $3,400 a month,

you're done in six months by Christmas. This thing's over. And then finish your emergency fund of three to six months of expenses. We're working right up the baby steps. That's baby step three. And then restart your 401k at 15%, not 12, not four, going into your 401k. Make sure it's a Roth and make sure you're invested in good growth stock mutual funds. And then you're going to be wealthy. And then long term, I want you to decide if you want to live next door to your tenants or not. Or in the the same abode with your tenants. The good news is you're right beside your tenants. The bad news is you're right beside your tenants. And that can be a sticky wicket. They're footsteps away. It can be a sticky wicket. All right. Sarah's in Waco, Texas. Hi, Sarah. How are you? Doing well, Dave. Thank you so much for taking my call. Sure. What's up? I am a military spouse, and me and my husband rely on, we currently rely on our credit score so that we can easily rent a house when we move every three to four years. That is absolute bull crap.

That is just not true. You do not need a credit score to rent a freaking house when you're in the military. I'd like to, that's what I want your advice on. How can we prepare to rent? when we, in a year and a half, pay off all of our debts. Good. What do we need to do to kind of prepare so that we can rent easily? If you're going to go home, your husband's in the military, and what is his rank?

He's a staff sergeant. Great. You walk up to the landlord, you meet them at the property, and you say, my name is staff sergeant, and you're in a military neighborhood. He knows exactly what that means. Your landlord will. I promise you. Okay. He knows exactly what that means. It means that you're always going to get that amount of money every single month.

Your husband's income is what's known as secure. Your landlord is going to love the fact that your husband is not going to lose his job or get laid off because some tech tycoon decides to cut stock price. Okay. So your husband has what's known as the ultimate steady job, a predictable environment, and he's a staff sergeant. So he's a leader. He's going to pay his bills. And Mr. Landlord, Staff Sergeant, so-and-so is also going to smile and say, we are privileged to be 100% debt-free, which means it's going to be very easy for us to pay this rent. It also means that when you check our credit, you're not going to see much of a credit score because we don't believe in borrowing money.

And I know you're going to like that as a landlord. That's all you've got to say, and the landlord will sign you up. I guess the other side, my husband does have to have a travel card with the Army, and that is in his own credit score. Is there any way that you know of that we can get rid of that? Nope. He's stuck with that. Have a terrible credit score? Okay.

He's stuck with that. Great. Okay. So we'll just kind of have to make the case. Yes, you're going to see this score because of the Army and the travel card. It should be a low score. It's the only thing we've got. Well, it could be because there's very little activity on it.

It's not going to tank it. Yeah. Okay. You shouldn't stop you from getting a house. If you're in corporate America, I'd have some ideas. But in the military, you're stuck with that. There's not a lot you can do with it. But the big thing is you just have to get the landlord to look at the actual benefit. Why would you want to be out of debt?

So it's easier for me to have money to pay bills. And the landlord's going to like that. I would love to see somebody that comes up. And I have a bunch of houses we rent out. And if somebody walks in and goes, I'm in the military, which instantly, know is guaranteed income. Oh, I'm Staff Sergeant. I know what that income level is going to be. Put that out there. And oh, okay, I got guaranteed income. Oh, and they don't have any debt. It's going to be fairly easy to pay this rent. Instead of like, oh, we have six car payments but a high

credit score. Or we got a student loan, a car payment, a boat payment, and four-wheeler payment, and a payment and a payment, but I got an 800 credit score. Yeah, but how are you going to pay the rent with all these stinking payments? That's what the landlord's thinking. Now, if you're dealing with some idiot that's a corporate employee at some corporate apartment complex. And they go, well, we have to look at the credit score. Then you're not going to get that one. But if you're dealing with a single family residence and you can't make the case that you guys are the best possible renter on the planet as a staff sergeant with zero debt, oh, you can make that case for sure. This idea, I have to have a credit score in order for us to rent because we're in the military. Don't ever say

that out loud again. Well, I've played this out. We actually on my YouTube, and on my podcast to find print, I called multiple apartment complexes and single family homes across the country. How many? At least seven or eight per. Okay. Okay. And so every single one said, well, yeah, if you don't have a credit score, we just do a background check, make sure you're not a criminal. Do you have steady income? And you might have to pay a slightly higher security deposit, which you'll get back.

In some cases. In some cases, they didn't do that. In some cases, they don't. Even at apartment complexes that were corporate, I explained my situation. I said, I don't have a score. Can I still rent with you guys? And they went, yeah, we should have a slightly higher security deposit. But okay, big whoop, if you follow our plan.

So did you have anyone out of seven or eight that said no? There was one in New York that had more stringent laws. But they still said, yeah, if you come in, we can take a look and see if we can make this happen for you. Okay. So that was the only one. Absolutely not. It's impossible to rent a house without a credit score. What they're looking for is.

That's just a bunch of crap. Because what people don't understand. People don't believe stuff out there that is not true. They're looking for bad scores. They're looking for misbehavior. They're looking for terrible scores, not a no score. That's way less of an issue. Hey guys, health care is one of the biggest stress points in your budget. It's confusing and most of the time it feels completely out of your control. But there is a better way to handle it. Christian health care ministries isn't health insurance. It's a health cost-sharing

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Right now, CHM is offering new members a 50% credit towards their first month of membership. Go to CHMinistries.org slash budget and use promo code Ramsey. That's CHMinestries.org slash budget and use promo code Ramsey. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio, George Camel. Ramsey Personality is my co-host today. Ashley is in Green Bay, Wisconsin. Hi, Ashley. How are you?

Hey, good Dave. How are you? Better than I deserve. What's up? Hi. So, it's kind of a long story, but I'm going to try to condense it. I'm 24. I've been living on my own. Bad family situation I had to get away from. I've been kind of working odd jobs here and there. Currently make about 30 to 35 a year, if I'm lucky. my car that I was fortunate to get recently broke down. It's not worth fixing just because it's not worth the amount of money that it would take to fix it. I'm just wondering if I have no money in the bank, no savings,

how would you recommend getting a different car without taking on debt? What's wrong with your car? Who said it's not worth fixing? So it's had a lot of suspension issues, and it has like 222,000 miles on it. It's 2011. You know, I wouldn't be able to get that much out of it. And the suspension issues, they quoted me like $3,000. And then on top of that.

Can you drive the car? What's wrong with the suspension? Yeah, it's a lot of, like, different, like, like the wheel bearing, Like, there's just a lot of things that I couldn't afford to fix. That wasn't what I asked. I asked if you could drive the car. Is it rolling? No.

Why? What's broken that keeps it from rolling? Because suspension issues don't keep it from rolling. The brakes are creating, like, a lot of heat that is for something that requires. And brakes are different than suspension. Okay. Well, yeah, I mean, it's a lot of things is what I'm trying to say. Have you gotten multiple quotes on this?

So let me stop you for a second. Okay. I'm sorry, George, just a second. I want you going back to that. Here's why I'm asking that, okay? I drove junk cars for a lot of my life and turned a wrench on them, old redneck style, all that stuff, right? And I don't want you to have to drive a piece of crap car the rest of your life. I want you to not have to, and I'm trying to get you up and moving again.

But I would say close to 100% of the cars with. 250,000 miles have suspension issues. The suspension is merely what causes the car to feel like it isn't riding well. If you hit a pothole, it feels like it runs up through your back, you know, and jars your brains out and that kind of stuff. That's a suspension issue. Or when you go into a corner, it feels like it moves like four times as you go around the corners instead of once. That's a suspension issue. None of those things keep you from driving that car to work. And almost all worn out cars have a worn out suspension. I've got a 1960 Corvette that has been renovated frame up.

The suspension and the thing absolutely sucks. Yeah. Okay. So the suspension doesn't bother me. The brakes you've got to have fixed. The brakes are different than suspension and different than wheel bearings. And I think someone has just looked at your car and said, oh, this is going to take more than to put this car back the way I would do it because I'm a mechanic is going to cost more than this car's worth. Yeah, well, we're not trying to do that.

We're trying to put a Band-Aid on this sucker so this girl can get to work. That's different. Sure, yeah. So they said in the dealership. Oh, dealership. There's your other problem. The most expensive place to get a car worked on. The most expensive place to get a car worked on is in the dealership.

Yes, I'm aware of that. Then why did you go there? If you would let me explain, I will explain it to you. Okay, try. I took it to another friend after. I was done at the dealership, and he also told me the same thing. It's going to cost, you know, even though he was able to do it for slightly cheaper, the parts themselves were really expensive with everything that needed to be done.

Okay. I still don't think everything needs to be done. Okay. I disagree. Okay. I think your friend is wanting to fix your whole car, and I don't think he understands. All we need is get the brakes gone this thing. Can you get some brakes on it for me so I can get to work?

And when I get to work, then I'm going to start stacking cash, and I'm going to sell this piece of crap to a junkyard for $2,000 for $1,500 for $1,500. I'm going to go buy a car that's twice as good as this one, which ain't much still. But we're going to move up in car a little bit. You've got no money. I'm trying to get you off of your feet. Yeah. Yeah. And that's what I'm trying to do.

And the dealer's not even going to come close to helping you. 100% of dealers are going to tell you, oh, you need a new car. Here's three easy payments. asking a dealer to fix your cars like asking a dog of it's hungry. Of course they're going to tell you it's broken. And your friend is probably looking at it going, yeah, I'm a good mechanic and I know how to fix all this stuff and it's not worth screwing with. But he hadn't thought about the fact that you got no money to go buy a car with. Yeah, I mean, my friend doesn't have a financial incentive to tell me anything, though.

I didn't think that either. I think he's a good mechanic and he wants to do everything. He wants to fix everything, and I wouldn't fix everything on this car. I drove cars just like this when I was broke, too. Can you go back to him and say, hey, I just want to get from A to B. I don't need to do everything. What do I need to do to get this thing rolling again? And then you go take six shifts at whatever it is you're doing and pick up four side hustles

and go put your little money together, and let's get this thing up and running for four months. Okay. I had a guy loan me a car with 400,000 miles on it when we went bankrupt. Mm-hmm. 400,000. This car was an absolute piece of crap. When I drove it into a good neighborhood, the cops followed me. They thought I was going to steal something. This car should not be in this neighborhood. It was that bad. I drove that car for three months, and it was the worst experience of my life. I used to tell people I drove that car for 10 years, one three month period.

But you know what I did during that three months? I worked like a maniac and I bought a $1,500 car, which was way better than the blessing my friend had loaned me. That's the blessing of a beater. When the guy loaned it to me, I swear to God, we jumped it, we got the jumper cables, jumped it off and I drove it up out of the weeds. You might be a redneck if. This is the loner I was driving. The vinyl roof was torn loose across the front, so when you drove it, it filled up with air. It looked like a rolling parachute.

When you come to a stoplight, your top would settle for three months. I'm emotionally scarred. This was 35 years ago. It feels like it was yesterday. You're still angry at this car. Old blue. Take this thing out to the farm and shoot it, Dave. Is it still around somewhere?

It needed bullets put in it. It's in a junkyard somewhere. Like an old horse. It needs to be put out of its misery. Uh-oh. Wait a minute. That's your. Yeah, that's my territory.

Anyway, so what I want for you, Ashley, is I want you to get out of the mindset that you're going to go take out a car payment. You're 24. You make no money. You're on your own. You got away from a toxic family situation. And the last thing you need is a car payment. In the meantime, it might be... What you desperately need is some semi-horrible transportation for a short period of time for you to work like a crazy girl and pile up cash and no happy hours.

and no eating out and no nothing, no partying, no fun, pile up cash and get you a little better car, and then pile up cash and get you a little better car, and then you'll start to be in something that's reliable. But you're not going to do it with car payments. If you sign up for car payments, girl, you're going to be stuck right where you is for the next five years. This show is sponsored by BetterHelp. Somewhere is a time when people get away from it all. Whether it's relaxing or going on vacation, we've all been sold this lie that if we could just escape from everything, then our lives will magically fix themselves.

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is stop running from things and start dealing with them. Go to betterhelp.com slash Ramsey to get 10% off. That's BetterHelp. H-E-L-P.com slash Ramsey. Guys, I want to loop back for a second. If you find yourself with a low-income and no money, the way out of the situation is not borrowing money to buy things. That will nail your feet to the floor and you will not be able to move.

It's a trap. And that's why payday lenders, pawn shops, rent to own, and tote the note lots are in the poor end of town. They're not in the rich end of town because they oppress, they take advantage of people with low incomes who feel trapped and desperate. I have been broke. I've never been poor. Poor is a state of mind. poor is I'm trapped and there's no way out, so I'm forced to rent my washer and dryer at the rent-all place. I'm forced to buy a car and pay three times too much for it at an interest rate that can't even be calculated on the tote the note lot.

Or I'm going to borrow money at 8,800% interest. That's actually what it is. That's not an exaggeration. at a payday lender because it feels like I'm trapped and I'm reaching for I'm grabbing for anything that I can get a hold of to get out of this trap

and when you do that someone will hand you a concrete block and you will sink they will not hand you a life preserver and so and that includes going to a car dealer when you make $25,000 a year and you're 24 years old to get your $1,000 car worked on in the repair shop. That's 100% of the time not going to go well. They are not set up to serve that clientele.

They're not set up for it. They don't even know how. Their brains don't even work that way. And so you can be angry about it if you want. That's not a bad thing. But the way out is not to borrow your way off of the bottom rung of the income ladder. The way out is to cut your lifestyle to nothing and work like a maniac and get your income up. Get your income up.

Get your income up. get your income up. You do not, when you're in a situation like that, and I have been there, you do not have any time or margin for any kind of relaxation or luxury. In a country that is full of relaxation and luxury, every Instagram feed is some bull crap thing that you don't need to be messing with. You don't need to look at any kind of social media when you're in that situation. All you need to do is work.

My grandmother used to say there's a great place to go when you're broke, to work. And it's the only way off the bottom. But it will get you off the bottom. It'll get you out. You're not stuck. You live in the greatest country of the world has ever known. And if you simply get up and go work six jobs,

today you can make $20 an hour at Target and FedEx, throwing boxes. Today. Today, you do not have to have a master's degree in finance to make a really good living today. And once you get your income where you can go buy a $3,000 car for cash, now things start to loosen up a little bit. And then you can go buy a $6,000 car for cash. And because the good news is a $3,000 car in one year does not go down in value.

It's pretty well done. So you can take your $3,000, $4,000 add to that, get a $7,000. This is how Sharon and I got out after we went bankrupt and lost everything and had two little babies. We did a borrowed car to $1,000, $1,500 car, to a $3,500 car. Those are the real numbers. I remember distinctly when I bought the first $10,000 car after bankruptcy. It was a several years later. Wow.

It wasn't 20 minutes later. And I wasn't trying to rebuild my credit because credit had not served me well. I was done with credit. And so I went to all the way to the bottom, lost everything, started in the hole because I still owed the IRS. My net worth was not zero. It was negative. I owed the IRS money because you can't bankrupt those buttholes. And so I've still got the IRS.

I've still got this and that. I've still got these things. and I've still got two babies to feed and I've still got to keep the lights on. And I was so scared I couldn't breathe. I didn't know what to do. And so if you're in that situation, I've been there. And I'm not going to sit here and tell you what you want to hear. And if that pisses you off, that's awesome.

Because that's my job is to piss you off so you don't stay where you are. If I can upset you and make you move off your little butt, then I did my job. because that's what people do with me. They didn't look at me and go, oh, Dave, you need a government program. They said, you need to go make some lemons out of all, eliminate all this freaking lemons you got. You got cases of lemons, boy. You need to go do something with it. These are my friends, my family. They zero mercy. Actually, it was really great mercy because it was the truth. That's the kind of thing you can do for some way out. The way out is the truth, not say, oh, well, you know, you just need, the poor need a line of credit.

That's the last thing you need when you're broke. It's going to keep you freaking broke. So the last thing you need is a car payment because you've got a car problem. And I just, my job here is to love you so well. I remember how that feels and I am not going to tolerate the narrative of lies that are going to be thrown at you. I'm a consumer advocate. We're here, George and I are here to help you. Not anything else.

You're not our entertainment value. We were entertained long before we got to these microphones. Doesn't take much. So, this is what you've walked into. If you walk into the Ramsey Show, don't expect anything else. Steve is with us in San Antonio, Texas. Hey, Steve, what's up? Hey, guys.

Thank you so much for taking my call. Sure. Can you hear me? Yes, sir. How can we help? Okay. So I'm going to ask the question, and then I'm going to describe the situation. My question is, when should I file for Social Security with Irma in mind?

You're working here with Irma, right? Yeah. Okay, give me the rest of the story. I'm so confused. Okay. So, I turn 65 in March. I'm a school teacher. I got part A cover.

I filed part A of Medicare. The rest, because I'm still with the school district, I'm taking care. of. I've got Social charity coming to me when I do retire, not much, but some. Next March,

I will meet what in Texas it's called the what's it called, but when you hit the certain age and then here's a service, you get full benefits.

All right? So I'll get that in March. The third source of income that I'm going to have when I retire is, and I'm blessed. I won a scratch-off ticket for $500,000.

And that turned out to be $380,000 after the taxes were taken out. So my question is, with Irma in mind, I know in two years' time, I will be taxed heavily because of that sudden growth of income. My question is, what was your advice for filing for Social Security? do I wait after that two-year grace period or should I file with Social Security next year when I retire? I would wait, given that you're going to take the hit on the lottery. The lottery income is going to come in. Let that purge be the rat and the snake all the way through your taxes and then do your Social Security after that and then you won't have to deal with Irma.

It's not a problem. Is Irma is not affected by net worth. It's affected by income. And so, yeah, that's what I would, yeah. And by the way, what they withheld on that is not necessarily your tax rate. Your tax rate is they withhold 24% on lottery winnings, but you may or may not be taxed that. You may be taxed more or less.

So you need to get some good tax advice as well. Go to RamseySolutions.com and click on taxes. When I started, I had great ideas and I knew how to serve people, but I didn't have systems in place yet. At that time, I saw books out of the trunk of my car. It was a lot harder to start a business back then. Shopify makes it easier. Shopify is the business platform

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Well, we wish we could get to every call and question here on the show. If you've got a money question, you want an answer for your situation. Head over the website, use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained only on proven Ramsey principles. About three years' worth of this show, we dropped into it. And we dropped all the books we've written into it. We dropped all the articles, which are thorough. thousands of that we have on our website on different subjects into it. And so it's pure Ramsey,

no Reddit, no TikTok, no crap, just what Ramsey says. And if you don't want to know what Ramsey says, then you wouldn't certainly use Ask Ramsey. But if you do want to know what what Ramsey says, you could ask Ramsey and you will only get a Ramsey-Fied answer. As a matter of fact, it's getting increasingly smart aleck. It's starting to sound like me. It's so bad. but hey ask your question today at ramsysolutions.com completely free ask ramsie or click the link in the description if you're listening on podcast or youtube abigail is in vermont hi abigail how are you i'm doing well how are you better than i deserve what's up uh so my husband and i we've been married for five years now um we bought a house uh right before we got married and uh before

we got together, I lived at home with my mom and I ended up buying my own house on my own, kind of spiraled into, we had a good nest egg built up. So now five years into marriage, we have no debt except for our mortgage. And during that time when I was living at home, before we were together, I didn't have any bills or anything. So I dumped a lot of money into my retirement account. I did it as a 403B Roth. So I have about 143,000 in my retirement account. Our current debate that we have is my husband really wants to take a chunk of that money and pay off our mortgage. We have about $54,000 in investments, including an emergency fund. Our yearly income is about $110,000.

But our investments and our retirement, we definitely have enough that we could wipe out our mortgage. but I wasn't sure if taking that 10% penalty because it did go in Roth, if that would be worth paying the mortgage off early. That way we are, every month except for June and July, we have an extra $1,600 that we are able to throw into our investments and our mortgage. What's your mortgage balance? About $125,000. Did you keep the house you paid off?

So the first house that I bought, we sold it and we used that money to renovate our current house. Our house was a fixer-upper. So we did all of our renovations without getting any. So you only own the one house? Correct. And you have $54,000 in what, and you have $112,000. And $100,000. And what was your income?

100 and what? So $110,000 in income. Our mortgage is $125,000. We have $140,000. Yeah, $54 in investments and emergency fund. You got $140. We do have license. Yeah, your husband's wrong.

There's no possible way I would pull money out of a Roth and pay off a mortgage. I want your mortgage paid off worse than he does. It's going to do amazing things for you guys, but I don't want to be stupid in paying it off. And the hit you're going to take on this account is not worth it to pay it off. You're going to get there. You're fat on your emergency fund. You don't need $54,000 in there, so I'd take 25 of that and throw it on there. Then you've got 100 to go, and you're doing about $18,000 a year right now, $1,500 a month, right?

Roughly, yeah. I work per diem, so when I say our yearly income is about $110, I'm per diem, I'm a nurse, but I have a lot of like medical conditions that kind of inhibit me from working more. Do you work? Do you make $110 or don't you? We do. But some years we are able to make a little more than that. Okay.

Well, when you make a little more, put a little more on it. But if you don't make a little more, then you're still okay. You're fine. I mean, you've put $20,000 a year on $100,000. It's gone in five years. And you're how old? I'm 28. He's 34.

Yeah. And so you're going to be not even 40 and you have a paid-for house. The house is worth what today? About 220. Good, good. You're going to be in great shape. Y'all are doing so good. I want to reset the conversation with him tonight.

Go, hey, I know you want to pay off the same. mortgage, let's make a plan that doesn't involve decimating our nest egg to get there. Yeah, let's use future income, a little bit of our savings. Let's have a plan. Spitshake, three years, four years, five years, this thing's gone. Yeah, and your 403B, make sure it's invested in good mutual funds because a lot of them aren't in 403Bs. They get into insurance products. Be careful with those. Let's just get in some good mutual funds, good growth, stock mutual funds. You should be earning 10, 12 percent average on your money. And if you are, you're going to double that money every seven years.

And so about the time this house has paid off, you guys are going to be millionaires. That's one way to look at it. Now, as far as paying this off, would you recommend rice and beans or just continue on the path that we've been doing? I'll continue on the path that you're doing. But I would just say anytime we have, quote, found money, I get a bonus, I get some unexpected overtime. I get whatever. Anytime we've got some found money that the budget didn't need, And that, you know, we can still have a good life while we're doing it.

I'm just going to throw all found money at it. You know, rich uncle passes away and leaves you $5,000. That's found money, right? You just throw it at it. Something happens. You get $10,000 somewhere. Just throw it at it. What's going to end up happening?

You're probably going to pay the house off in about four years without doing rice and beans. Sounds about right, yeah. Yeah. I think that's where we're kind of. Yeah, I think that, I mean, that's more than $20,000 a year. But you're going to have some found money. You're going to pick up your per diem. different things are going to happen.

And you can still have a good life while you're doing that. You still go on vacation, go on a date? Yeah, yeah. Don't punish yourselves for no reason. When you're in baby steps, four, five, and six, which is where you all are, we are intentional, not intense. One, two, and three is intense, which is beans and rice, rice and beans. You don't see the inside of a restaurant unless you're working there, and you don't go on vacation.

Do you get your butt out of debt and have an emergency fund? Then when you move to where you guys are, Abigail, we go four, five, and six, and that's intentional and that's when we have a life, but we also have goals. And we're, you know, found money goes towards the goal. And your husband's got a great goal of having a house paid for. Because, guys, when you got no house payment, you know how fast that old house payment turns into a million dollars when it's invested? I did that.

I took my old house, but when I finally paid off the house, it was 20, it was about 1,900 bucks back in the day. And I rounded it up 2,500. And I put that automatic draft into a, you know, mutual fund just to see and left it on. They never put anything else in it. How fast that one mutual fund became a million dollars was absolutely mind-boggling. Yeah, that's the compound growth on that.

Because you're used to paying a stupid house payment. When you pay yourself a house payment, oh my goodness. Instead of paying interest to the bank, you're paying yourself some interest. Ding, ding, ding. That's amazing. And once you cross that threshold under $100,000, you're like, game on. We got this. Oh, yeah, you can smell it now.

Anthony's in Chicago. Hey, Anthony, what's up? Hey Dave, thank you taking my call. Sure. How can we help? So I've been recently, I graduated two years ago. I've accumulated or accumulated a lot of debt in those four years plus the new car I bought that you probably won't like.

But currently I sit at roughly, I was just trying to get like some tips. I'm like, I feel like I'm doing a good job repaying it back. And I was wondering if you can provide any more helpful tips to keep going on that aggressive. edge that I've started. What's the total debt? The total debt after, like, the start or around that right now. Today. Today is about 50,000-ish.

What's your income? It's about 66,000, but I have overtime, so it was 76 last year. Good. What's the ish 50,000 on? So we got 33,000 in a private bank student loan. We got 17,000 in federal loans. And then my car is above equity value, above my loan value. I don't care.

What do you owe in your car? 15,000. Okay. So you don't have 55,000. You don't have 50,000. You have 65,000 in debt. Correct, technically. Yeah, okay.

That's almost 100% debt-to-income ratio. So you need to get this income. come up. We might want to sell the car if you want to speed this process up, but that's the only way to do it. Spend less, make more, throw the difference at the debt, debt snowball. It's the largest balance. And hopefully you'll be out of this thing in two years. Hey guys, George Camel here. Two things you should know about me. I love a good movie and I hate overpaying for things. An angel just checked both boxes. They've got a new movie called Young Washington, the story of George Washington's early life as a soldier before he became a founding

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celebrate America's 250th birthday. Sign up at angel.com slash Ramsey. That's angel.com slash Ramsey. Sarah is with us in Oklahoma City. Hi, Sarah. How are you? Hey, doing well. Thanks for taking my call. Sure. What's up? The gist is, I'm wondering, there's a lot more context, but I'm wondering if I should take money out of my 401k so that my fiancé can kind of get prepared and pay off some of his debt before we get married. I'm sorry, what would you do with the 401K money? So I am staying at home right now with our eight-month-old baby, so I haven't been working since like 38 weeks pregnant,

and so I don't have my own income. So he's covering everything, very grateful. for that. But I also hear you all coach. What does he make? Um, total about 35,000 a year. So it's pretty low. So we're kind of, you're going back to work, I take it. Yes, at some point soon, but that's not on the table right now. Why? And we get married in six months. Why are you waiting six months? You have a baby. Get married tomorrow. Well, so that's where the nuance comes in. We're Catholic, and we have to be kind of in a marriage prep. before we can get married in the church. So we have it set up. We've tried to keep our life fairly

separate. We wouldn't be living together if we didn't have a baby. But this is where we found ourselves, and we made certain decisions so that I could stay home with our son. I was in an in-between. I had left my career a few years ago. So it was just working part-tending on. You're looking for a magic switch to make an impossible set of math work, and the magic switch is not your 401k. So the box that you guys have built for yourselves that you're trying to live in doesn't fit, and the 401k is not going to make it fit. So how much debt does he have?

He has about 28,000, and I have zero. So that's also part of it is... Yeah. Well, number one, you know, I'm fairly aware of the detailed pre-marriage process that a good Catholic goes through. And it's also, by the way, for those of you that aren't Catholic, I'm not, but I'm aware of this part. The statistics of the folks that go through the pre-marriage system that the Catholics use are very good for staying married. So the pre-marriage process that you're talking about is very thorough and very good. I'm a believer in what you're doing.

I'm not aware of how they treat a child out of wedlock in that process. That's a little surprising to me. That the priest would say, wait, you've had a baby, but we're still going to act like you didn't and go through all of this detailed pre-marriage counseling as if you guys weren't sleeping together. That's weird. Yeah, it surprises us too. So in our area, they actually don't even start marriage prep until after a child is born.

So even though we've been together for a couple of years, just to allow, I guess, freedom with the sacrament and make sure that it's not like a shot-sent wedding kind of thing. Okay, I don't know. I don't know. That's confusing to me, but I don't know how to speak into that. What were you doing before and how much were you making? So immediately before he was born, I was just working at a brewery and like substitute teaching. The 401K is from when I was a teacher, a public school teacher a couple of years ago.

Okay. And what's he doing? How much is in the 401k? Only about 13 grand. Okay. All right. If you take it out, it's 6,000, not 13. by the time they take the penalties and taxes out of it.

It might be seven. Might be seven. Okay. And so it's not going to, but my point earlier is it's not going to fix your problem. Your problem is an income problem and a marriage problem. And you need to solve both of those as soon as possible. His income going up, temporarily working six side hustles, your income going up, picking up a side hustle and planning to go back to work. and you do not pay bills for someone you're not married to, period.

And I don't know how to solve the part that is tied to Catholicism because I don't know enough about it to speak intelligently. But I do know if I were in your shoes, I would sit down and talk to a priest and figure out some process by which we got married sooner rather than later. And so if you're going to be married, you're going to have a child and you already have a child together, then, you know, the sooner you get that together, the faster your all's lives are going to be knit together,

the faster you're going to be able to get the debt cleared and build wealth and so on. But cashing out this 401K doesn't fix. It's like spitting in the wind. You got you got, you got $60,000 and $70,000 problems. You don't have a $6,000 problem. And by that, I mean, your al's incomes suck. And so, you know. The debt payments alone are probably eating up half the take-on pay.

Yeah. And it doesn't fix it. It doesn't fix it. It's like, it's a glancing blow at best. Okay. So, yeah, yeah, interesting. So if you cash out your 401k early, you get a 10% penalty plus your tax rate. So it's typically going to be a 25% tax rate plus about.

a 10% penalty, so about a 35% hit. So roughly one third of your money. It's like saying, I want to borrow money at 35% interest to pay my fiance's bills. Okay. Number one, we don't ever pay our fiance's bills under any circumstances. You're not married to them. Do not pay someone else's bills. It's your roommate. And legally, that's where you stand. And if he decides he's just going to say, yeah, I don't really care about priests and I don't really care about babies and I don't really care about you. I'm just going to leave. And then you paid his bills. Now, that's the other call we get on the air here. I paid the bills. I paid his debts and then we broke up. What now? Because I thought we were going to get married. I thought we were in love and I thought we had a

baby together. Oh, wait, that last part you did what do. But yeah, this is where you get yourself in a pinch, boys and girls, girls. Yeah. This is a little. This is. This is. is a problem. It's a serious problem. All right, not aimed at her, but just because I can't get out of my system right now, there's several pieces of research on what's called the success sequence. If you first graduate from high school and only then do you get a full-time job and only then do you get married and only then do you have children. If you do those things in sequence, if you are a millennial, you have a 97% probability of not being at the poverty level. If you get them out of order and have babies before kids and high school and jobs and grown-up stuff and you get them out of order, then you have a much higher probability of being at the poverty level.

And that's exactly what I'm talking about. That's what I'm fumbling around on here. And so after the cow is already out of the barn, now what do you do? you know, well, all I can do is try to help you from where you are at that point, and that's to return you as quickly as I can to the success sequence, which is, you know, okay, we have the baby thing out of order here. Well, let's get married as soon as possible because otherwise you end up, you know, I make really good money and I paid off all his debts and then he just left because he really

didn't want a baby. And even though, you know, oh, yeah. Yeah. And this, you know, oh, when he took the car I bought for him that's in my, name and and he's not paying the bill and my credit score is getting messed up. I'm going to get repoed. What do I do now, Dave? These are the calls George and I get every week. And so I can't, I just want to grab all of you that are 18 to 26 years old by the shoulders and yell in your face. Don't shack up, period. There's no data that says this works. None. There's lots of research says you're going to get your face pounded in.

Your net worth is going to be one-thirteenth of what it should be if you're shacking up in your 35 versus your friends that are married in their 35. One-thteenth. That's more than 10x that you screwed yourself up. This stuff matters. Get it in order. Molly is in San Antonio, Texas. Hey, Molly, how are you?

you. I'm good. How are you? Better than I deserve. What's up? Well, my husband and I are trying to come to an agreement on pausing, investing to cash by our next house, and wanted to get your opinion on that. I'll give you a little background. We are 33 and 34. We bought our house at 26 and paid it off in five years. Way to go. No debt. Wow. We have two kids.

So we have our retirement and 529s. Just, you know, outgrowing our house. We want more land. We would like to build. We're just kind of in that window. Way to go. So what's the current home worth? About $400,000.

Okay. And what would your target be for the move? How much? I'm looking to be about 700 with the land okay so we need 300 yes okay I got that and do you have any investments or savings beyond emergency fund that are not retirement money yes we have a brokerage for the house that's about 125 okay so you're almost halfway there yes okay and what's your household income last year we grossed 190 good for you well done Okay, and how much is in your retirement accounts? Retirement with 529s. No, retirement accounts.

Oh, just retirement. 160. Okay, and how much is in the 529s? 60. Okay, and how old are the babies? About to be 7 and 2. And you're 34, you said? Yes, 33 and 34.

Okay, and so the argument is do we stop? retirement and 529 temporarily to get the other hundred and seventy-five thousand that we need to finish this deal correct and you make 190 so is that a two-year plan yeah my husband works overtime and has the option to make more so if we if we did this we would probably really crunch down I mean if you did 175 um you would need to save 85,000 a year, right, out of 190 to do it in two years? Yeah, we can do that. Yeah, so it's a two-year plan.

So if we don't stop saving for retirement, instead of two years, how long does it take us? Three. Yes. So we're arguing about a year. That's correct. Okay. It always helps me to kind of boil it down when Sharon and I are looking at this, because it's not really philosophically some big, oh, we're not going to save for retirement. It's like one year

difference if we do or if we don't. So we're really arguing about a year's worth of retirement savings or two years worth of retirement savings one year when we purchased the house. So would we give up two years worth of addition or savings in my 30s making 190? What would you do, George? That's kind of Interesting. I mean, I was in this exact position, Molly, when we paid off our first house. And what did you do? And we wanted to cash for the second one. I kept investing. I kept investing at that 15% rate, but not more. Because, you know, once you're in Baby Step 7, you can invest 20%, 30%, but we kept it at 15% and the rest of it, we stacked away to make that cash purchase. And how long you take you to save them to your move up? Two years? Yeah, that was a couple of years, probably three years? Probably three. So I think you guys need to decide the urgency of the house move. Does it need to be? 700 to 650 work because you're talking if you're investing 15% right now that's about 28 grand of your gross income that's what you're actually talking about so does the 28 grand is it worth

waiting a year is it worth investing for that year it's more like six months now when you talk about that yeah if you guys actually crunch the numbers I'm curious what the actual numbers would be based on how much you're investing now what pausing would get you what that next house will actually cost because the other part is buying a new home is just the starting point is that 700 number. And then you've got the furniture and the moving costs and all the extra things that you want to do. And so it just gets expensive. They can cash flow that. Yeah, making $190.90. You guys will be fine. Because they don't have a house payment. Nowhere in this scenario is there a house payment. What's your emergency fund? No payment. Emergency fund is $45. Okay. You guys,

I got to tell you, you're like poster children. You're amazing. Very, very well done. when we did pay off at new babies and life. I mean, y'all, y'all really got this nailed. You're going to be, no matter which of these choices you take, you're going to be very wealthy because you're doing several things. You're very intentional. You both are having a vote. You both talk about it.

We even argue about it sometimes. And we both are setting detailed goals, but neither one of us are budging on the stuff like I'm not going to go into debt. Neither one of us are doing stupid stuff. You're both just deciding, you know, which type of investing. we want to do. Do we want to do single family real estate that we're going to live in, or do we want to, you know, put this money in the mutual funds for there? So, um, so George said, okay, so really it's $28,000 a year. So it's two years of that, it's $50,000 bucks, $60,000.

If you pause for two years. Are you guys investing 15%, Molly? I'm just throwing a number out there. I have no idea. I did the math, and I think it might be like 16 or 17%. Okay. So we could back off a little. Yeah, you can back off a little. But I mean, yeah, so it's $28,000 a year if that's the case. Yeah. It slows your savings rate by that. I like the personal challenge. Can we do it without pausing investing?

That's just a fun challenge for me personally. I'm just a super nerd. So I would go, can we increase our income by $28,000 temporarily? That could be an interesting challenge too. And then you're still done in two years. Can we cut our expenses by $14 and make an extra $14? Boom, you just got an extra $20. of it, but yeah, I, because I, both are excellent goals.

Okay. So there's neither one of these things put your face in the stupid column. You know what I'm saying? You guys are just doing so good. I'm so proud of you. It's almost like you're reverting to Babysept 3B for a time. Yeah. That's kind of I see it.

There's not a wrong answer to the argument. Yeah, we say zero to 15%. I can't just say, you know, Molly, you win, your husband loses. Or husband, you win, Molly loses. can't just, there's, there's not a wrong answer because both of these things are very smart and you follow the baby steps properly. You're not going back into debt to move up, which I would yell at you for, um, all of that. You just, everything about this conversation is so healthy and positive. I think you two are going to figure it out. Um, and also, by the way, there's, uh,

there's even a weirder scenario mathematically halfway in between. Oh, we shut, down investing for one year. And then we start it. We take on the overtime and we cut over here. And then where do we end up? How much, you know, and then we're talking even about six or eight months. We're now talking about, you know, just a few months difference. And then it's irrelevant. Yeah. So that'd be an easy one to hit in the middle. Yeah. Just hit in the middle and go. I like to fast forward and go, okay, when we're 65, do we want to have 11.3 million or 11 million? That's really what you're like, all right, we're going to be okay. It's not worth the brain calories at this point.

That's true. That's exactly what it's going to end up to. That's funny. That's funny. Oh, Molly, it's so refreshing to talk to you today. Thank you for calling. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next.

Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's Ramsey Solutions.com. Sydney is in Lancaster, Pennsylvania. Hi, Sydney. How are you?

I'm good. How about you? Better than I deserve. What's up? Oh, my gosh. Sorry, first of all, just so happy to be on the phone with you. Oh, my gosh. I, like, grew up listening to you. So, like, this is just wild to be on the phone with you.

Well, we're honored. How can we help? So my fiancé and I are getting married in January, and we both already are living outside of our parents. And so we're trying to figure out what to put on our registry. And a lot of people have been telling me, oh, don't do a cash fund because people want to give you things. and if you don't tell them what you want, they'll just give you crap.

But both of us really just would prefer money for the future. Like, how do we go about doing that, or should we just, like, upgrade this stuff that we have? Wow. Well, what occurs to me is that you might ask people to give you money, but certain ones won't. They're just not going to. Yeah.

Like, my wife is old-school southern redneck hillbill whatever you want to call it, right? And the chance that she's giving you money for a wedding, for her that would be tacky. Yeah. It's outside of her value system to do that. She couldn't do it. She's also the one that sends flowers to funerals when they say don't send flowers. She doesn't care.

I mean, she cares, but she doesn't care. Yeah. Because she's going to do what her upbringing taught her to do, which is to bless the bride and groom. with a silver platter that they will never use. Of course. So it's a very southern thing to do or genteel thing to do or whatever you want to call it. But I don't understand.

I would take the money, but I'm with you. George, you got married how many years ago? That was 2018. And we used a registry site. I'm sure you're using a similar one, Sydney. We used one called I think Zola, which is a popular one. And on there, we had all the registry stuff, right, all the Target and Amazon crap. But we also had like a home down payment fund listed on there with a little cute, you know, picture.

And a few people gave to that. You could do a honeymoon fund. And that's just a cash gift that people can give through that. And can you write a little paragraph at the top saying we prefer this. Yeah. You can say it. And I, you could place it. I place mine right at the top. I want everyone to see that first. And in the invite, you know. It's a go fund, George. Exactly. And so the invite is a little trickier. You don't want to be like, here's the invite. Also, cash gifts preferred. You could. Yeah. Yeah. And people will have feelings.

That starts to be a little tackier. Yeah. Yeah. So put it on the registry, George says. Yeah. If it's on there as a link and you can have a more about there. And the more practical among us will give you money. And then the ones that were with proper upbringing, like my wife, will give you something you can't use.

So do you guys have a specific goal in mind for this money or is just we'd rather have money? So, yeah, that's the other thing we're trying to figure out. So we both ultimately want to do overseas missional work. like relief work, also like their church organizations. So we would love to, like, it would be so much easier if it was for a house because people would be like, oh, we could see that goal in mind, but we just don't really have anything. If it depends on the audience.

I mean, if it's, if your friends and relatives are believers and they want to support your working for the Lord, then that might be more motivating than buying you a house. I'd feel more convicted over getting a cupcake platter to go, you know what, I should probably support the missions they're so passionate about. Cupcakes are Jesus, yeah. You pick. Okay. But you can put that on the registry site.

You can put a little blurb of, hey, here's our heart, here's what we'd love. Now, if you collect money to go on a missions trip, you cannot spend it on your house. That would be unethical. Oh, definitely not. And also, Sidney, here's the fun part. You have the addresses of all these people now. I might just do a follow-up later with a separate missional ask versus trying to combine it into the wedding. Okay, okay.

That feels better. To do a support letter six months after you're married. Hey, thanks for the gift also. Thanks for the cupcake platter. Yeah. Jesus, yeah. So I might separate it out just so it doesn't feel like you're kind of mixing two wonderful things at the same time. That's fun.

But, you know. So that's a fun question. If people are going to think you're tacky, they'll think you're tacky. Rachel thought I was tacky because I had a QR code to give to my daughter's 529 at her birthday party. Instead of gifts, I don't want more toys and crap for a one-year-old. I don't know if it's tacky. It's just strange? Yeah.

Yeah. Yeah. It's pretty nerdy. Yeah. I just got excited. A QR code for how old was your daughter? It was her one year old birthday. For her one year old birthday party, you put a QR code on your kid.

It was not on her person. Yeah, well, same thing. It was a little cute frame. It was like you put a tattoo on her forehead. It's like sponsor the one year old. Gosh, well now I know Dave wouldn't support my daughter's 529. No, I didn't. I wasn't invited, but, yeah.

Oh, that's fun. I'm kind of with Rachel. I don't know if tacky is the right word, though. No, this is close family. It's just classic nerd George. I wasn't soliciting money from strangers. If they know you, there don't think it's tacky. They just think it's George.

Can I tell you? Nobody gave to the 529. Dead gum QR codes just don't work. Backfired. Not a one. It backfired bigly. Not a dollar. My parents, they gave every year to her 5.5.

I know, but not through the QR code. They don't even know how to do the QR code. You know how long it took me to figure that out? Oh, that is so classic. Now I'm upset. That is. Well, that answers the question. This is a don't try this at home.

Wow, don't DIY this puppy. Oh, my gosh, George. That's funny. Oh, boy. All right, I got the wrong number. Here we go. Here we go. Tessa's in Chicago.

Hey, Tessa, what's up? Hey, thank you so much for taking my call. Sure. How can we help? So I want to start off by saying that my husband and I have gone over this, and I have very strict instructions on what I'm supposed to tell you. I am the problem. He works very, I acknowledge it, I do.

I'm trying to have gazelle-like intensity. Wow. I listen to total money makeover every single day is a little piece of motivation for my day. I'm trying to get better. But he works really hard and he lets me stay home. I homeschool our kids. I'm just, I don't want to be careless with his hard-earned money. And we got ourselves into a position when we bought my parents, my childhood home.

We decided to buy it and renovate it. We started off doing FPU when we got married and we, the only debt we have our mortgage, the home equity, which is the problem. And then we do have a truck payment, but his company gives him an allowance for that. They give him an allowance whether you have a payment or not. They do not. That's not true. It's got to be like so many years new.

No, they do not. Yes, they do. They give you an allowance whether you have a payment or not. It has to be a certain age, but it can be a paid-for truck. Yes. Okay. So that you don't have to keep the payment to keep the allowance. So don't say that again.

Yeah. So that's kind of unclear for me. He had told me how it works, but I still don't quite understand that. But he gets an allowance for a truck, but it has to be a certain age. It does not require it has debt on it. It's that simple. So we are suffocating and we're dwindling our savings. We do have our $1,000 emergency fund, but that's pretty much it.

Everything else dwindles. And I don't know if it's a matter of... Where does it dwindle to? So we are paying, our mortgage is $1195 a month. We pay $1,000 on the home equity every month. What does he make? He makes $98,5 a year, take home. And you're at home full-time with a baby.

I'm a photographer, so I make a little bit, but it's like $8,000, $9,000 year. And what's the truck payment? His truck payment's 810, and he gets just under that, like $760 or $770, something like that. Yeah, okay. All right. Well, the truck has to get paid off, and that'll give you your margin back. For one thing. You do that before pushing more at the home equity?

Whichever one's the highest balance is second. Yeah. Okay. And have you stopped your 401Ks? So that was our main question. He's currently contributing 11%. Listen, if you're listening to 401, if you listen to the total money makeover, you already know. You're supposed to stop your 401K, right?

That was what I just passed that chapter. So, yes, that's what prompted the phone call. Yeah, yeah, you definitely stop it. It's a temporary stop until you get these debts cleaned up, the mess you've made. And then you've got margin and you can do this. But you can't do everything at once because everything at once isn't working. That's why you called. You're going to get almost $1,000 back in every single month if he stops his 401K.

And then we clean up the helock, sell the truck, get a cash one, and you're set. Got your margin back. You've got a truck has to be a certain age to get the $700. And so then you start to wonder if that's actually worth it or not. It might not be worth it because you might be keeping a truck as expensive that you're wearing out. You've got to look at the math on that truck. But anyway, yeah, stop the 401K temporarily and beans and rice, rice and beans. Get on the every dollar budget, both of you.

No more eating out and no more vacations until these debts are cleaned up. You bought a house and a truck you can't afford. Hey, what's up, guys? It's Jade Warshot. Listen, summer spending adds up so fast between vacations and road trips and camp fees. and events and all the extra gas and grocery runs, money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the Every Dollar Budget app.

It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download every dollar in the App Store or Google Play and start for free today. The Ramsey Show Question of the Day is brought to you by Y-R-R-R-FI. Missed Private Student Loan Payments can keep your budget stuck in neutral. Why-R-R-R-E-F-R-E-F-R-E-F-R-E-R-E-F-R-E-R-E-F-R-E-R-E-F-R-E-R-NES

explore, and payments based on what you can afford. So you can start moving forward again. Visit Y-R-R-E-F-Y.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey, might not be in all states. Today's question comes from Amanda in Utah. I vacation on the same cruise line twice a year. Each cruise is 14 days long. If I buy 100 shares of their stock, I will receive $250 in onboard credit per sailing, which equates to 500 bucks a year.

Even without growth, I would get my investment back in about five and a half years. I know you don't recommend investing in single stocks, but under these circumstances, do you think it's worth it for me? Oh, boy. Get your investment back. How do you get your investment back? her onboard credit of 500 bucks a year. Oh. So not just one time. If you're a stockholder, one time of 100 shares, anytime you sail, you get 250. You buy 100 shares. But anytime you sale, you get 250. In onboard credit. It's one of those, the Jews ain't worth the squeeze here,

especially with five and a half years to make the money back. Yeah, that's not. For onboard credit that you may or may not. Yeah, on board credit, which is marked up crap. Use it in a gift shop, a massage? Were you on here the other day when the guy called about the million dollars in onboard art? Oh, no, but that one went viral. I saw that. That was wild. He said his mom had been going on cruises and she's buying on board cruise art and had dropped a million bucks in it over the series of years.

She had the money, clearly. Well, yeah, but now she doesn't. She completely broke now because it's all invested in onboard art, which I didn't even know was. I mean, I knew they had. I've been on cruises. I've seen the onboard art. I didn't. It can't be great. I don't invest in. Was she three sheets to the wind? How do you do that? I mean, she had to have been like a lot of three sheets to the wind. That's like she did this over a period of years. But yeah, so anyway, what do you buy on board a cruise? I mean, it's like going to Disney. They sell $9 raincoats that they, because it rains every afternoon because they control the weather.

And it rains every afternoon at Disney. And they sell you a $9 raincoat with a Mickey on it that they paid. 49 cents for in China. And that's what you're buying on cruise ships. Yeah, it just take your money. It's not like it's, you know, like you're getting mint coats or something on there. I mean, or whatever. Well, she's saying five and a half years. So this must mean if 500 a year she's getting, talking she's going to spend almost six grand to buy these hundred shares? Yeah. That's crazy. Well, overall, the answer would be no. Put that six grand on high-yield savings. Your onboard credit is going to stuff that's marked up at least double. And so now we're not at five and a half years. We're at 10, 11 years.

And it's stuff you might not have purchased anyway. And so buying something on sale that you don't need is not a good buy. And think about it this way. If this was a credit card that said, hey, if you spend $50,000, we'll give you this many points. We'd say that's crazy. Don't do that. Don't spend money to try to get some back. So we're going to say it about this.

That's crazy. That's crazy. Okay, there we go. Ethan's in Jacksonville, Florida. Hi, Ethan. How are you? Hey, Dave. How are you?

Better than I deserve. How can we help? Hey, so my question is, do I leave my current job? I've been here for about two years, and do I go work with my dad or his HVAC company and potentially take it over whenever he's ready to hand it up? Okay. Well, what do you make now and what would you make there?

So me and my wife right now What do you make at your job now that you're going to give up? Yes, 65. And what would you make fixing HVAC for your dad? He would start me out at the same. So that's what an HVAC tech makes in Jacksonville, 65? Roughly. I mean, he's being generous, I'll say.

I don't know exactly what an HVAC tech would make. But what do you you're not an h-fact tech now no no not I'm not I'm not like you know experience how many employees does he have he only has two right now and how old are you I'm 23 and how old is he 46 47 okay so he retires at 65 20 years from now and you're 43 meanwhile you've been an h-fact for 20 years, working for your dad, and then you get a company of whatever size it is at that point, 20 years from today. Correct.

Yeah. Let's pretend this wasn't your dad. Okay. And somebody offered you a job making the same amount of money you make now, and in 20 years, you could have the opportunity to buy the company or be given the company 20 years from now. Would you do that? Hard one, Dave.

I don't think you would. Hard one. I think you could start your own H-FAC business. and have more than two employees 20 years from now. Yeah. So, you know, what I might do is this. I guess do you want to, I mean, does he need the help and you want to help him? Do you want to work together?

What's your, I kind of feel like there's, like, love involved here. Like, you're trying to love your dad well. Yeah, like, I mean, he's, so he's my stepdad. So he's been nothing but a dad to me. And I want to help him out. I want to do whatever I can to help him. And I love the trade. The trade is just, I mean, it's a good trade.

I worked with him when I was throughout school. So, I mean, I love it. It is a good trade. What do you do now? I work for Anheuser. Okay. So I work Swin-Shift, and I'm young, but I felt forward. I ain't going on life.

You're young, but what? I'm young, but I feel old because of the swing shift. Oh, oh, oh, yeah. Yeah, graveyard, yeah, that'll get you. Okay. So, my life, she's, she, she likes, getting on day, getting on days sounds fun. Better quality of life. Yeah.

Yeah, I'm going with that. Okay. So here's what I would do if I did go forward with this. Let's continue the conversation before you make a decision. Okay. Number one, you said you're how old 23? Yes, sir. Yeah.

So I would want a written game plan for clarity so that everyone, him and you and your mom and your wife, all know what you're signing up for. Okay? Okay. And that's called a partnership agreement or we can call it whatever. And I want you guys to really spend some time detailing this out because this way, when this is over, you'll still be friends. Okay. And if you don't do this, you probably kill each other. you know what I'm saying right

yes so it worked out when you were a teenager but you're not a teenager anymore you're like a grown man and stuff now so you guys are going to have opinions so I want him to progressively hand you ownership over the years okay so you kind of move into ownership ownership position and not not suddenly 100% at 20 years from now when he's 65 but instead after you've been there five years, he's going to give you 25%. After you've been there, another five years, he's going to give you another 20%. And now he's still a major owner and you're 33 and he's in his 50s. Okay, kind of think that through, how that's going to feel for him and for you. But I want him to begin to hand you ownership in this. And then based on that ownership, you're going to get paid

for the job you do plus the percentage of ownership you have of the profits. And so if the thing makes a profit after you're paid your salary and he's paid his salary for working there or his income, if it makes $100,000 and you have 25%, you get an additional $25,000. Follow me? Okay. Then lastly, you have to cover all the D's. What happens in the event of death? Divorce, drug use, disinterest. I don't want to do this anymore.

What happens in the event of D's? disability, somebody gets hurt, they're in a wheelchair. What happens? How's that going to take? How's it going to shake out? What happens to the ownership? What happens to the income? Write all of that stuff down or don't do this? Hey guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life and insurance, health insurance, identity theft protection, and more. And when you're ready to get the

coverage you need, you can connect with a Ramsey trusted insurance pro who will only get you what you need at the best price. Go to Ramsey Solutions.com slash insurance. Ramsey Solutions.com slash insurance. Our scripture of the day, Isaiah 32, 8, generous people plan to do what is generous and they stand firm in their generosity. Charles Buxton said, in life as in chess, forethought wins. I got to tell you, I love hearing all these results from the people using every dollar. We've got tens of millions of people now using this budgeting app, and it's following the Ramsey steps exactly. It's giving you a personalized plan,

and it helps you get out of debt and into wealth faster than anything else out there. It's the shortest distance. Dave, just being able to use every dollar and see the extra we have every single month. It was super motivating. We have thousands of dollars extra, and just throw it on the mortgage. Hey, that's pretty cool. I love it. So you get the pick when you do it on purpose. I like this. Start every dollar for free in the app store or Google Play. Aaron is in Anaheim, California. Hi, Aaron. How are you? Good, Dave. Thanks for having me on the show. Sure. What's up?

Well, got married a little over a year and a half ago, and wife and I have done pretty well, and we're trying to buy a house. We live in Orange County, specifically, and it's super pricey to live here, as you probably know. Our goal is to buy a home. We've been smart. Our parents have raised us right. My dad put me in touch with all your stuff, and I've been hooked to the show ever since. So it's been a pleasure and a blessing in my life and my wife. Thank you.

Yeah. So we've been smart with our money, and we feel like we've done well with it, but I'm kind of reaching a point as we get maybe a little bit closer to figure out how we should move it around from here, I guess. It's currently invested in the stock market. In what? What's that mean?

In the stock market. I know, and what in the stock market? Oh, 80% is in equity investments, and then 20% is in bonds and fixed incomes. Equity investments. What's that mean? You've got it in single stocks? No, well, yeah, it's kind of spread out across multiple different stocks, and the advisor that's helping me is put it in the market.

Okay, all right. Well, that's not what we teach. You know that. Yeah, that's one thing. That's why I'm going. That's very risky. Yeah. is, and it's done well. The bonds are worse. Yeah, the bonds are risky too. Yeah. Okay.

So that's where we have it right now. I mean, we've done well with it, but the market, you know, we're concerned that it's going to come down. And when it comes down, how far is that going to set us back? And I think it's time that we maybe reconsider where we have our money right now. Okay. Yeah. I don't time the market either. So I don't know. I would not do it based on what I think the market's going to do because most people don't have any idea. No one could have guessed the market was going to be up as high as it was three years in a row these last couple years. Yeah.

In the last five years, it's doubled and nobody could have guessed that. Sure. Now, that's not in the portfolio you've got, but the portfolio that I've got has doubled. Yours may or may not have done that because those stupid bonds probably were an anchor on yours. Dragging it down. Anyway, how much is in there and when will you be buying the? house. I've got about 250,000 in it right now, not counting like my emergency fund and other savings

that we have. And our goal is, I mean, we're renting for really cheap from family right now, a house from one of our family members that they own. And why with 250,000, why have you not bought yet? It's so expensive. Like for a single family home in our area. It's not going to go down. I know, but for our area, it's between 1.1 to 1.1.

I know, but it's not going to go down, and you have $250,000. I'm in a sales role, and it's commission-based, heavily commission-based, so it's been kind of my goal to throw down as much as I can out of home. And since my rent is so cheap and I'm not really pushed up against a wall to move out, I mean, my wife and I have the goal moving out, right? We don't want to take advantage of it. Okay, so are you willing to trade the volatility of the portfolio that you have and the returns it has for Z-WR,

volatility and moving 250,000 into a high-yield savings account? No, that's that was what I was kind of questioning. Is it better to have it in a high-yield savings? If you're going to buy within 12 or 14 months, yes. Because your heart's going to sink when 12 months from now your money's down. You know, if the market dropped 10%, that would be like one of the worst drops in a year in history and history. And that would be $25,000, which would not keep you from buying a house.

Right. So it's not that big a deal, but I don't know what kind of mess your portfolio is and how volatility you've got, how much volatility you've gotten yourself signed up for. But if you were just so many you're like in an S&P 500 index fund and you're just sitting there riding the actual market, I mean, it's up 10% for the year right now, today, year to date. So you have any idea what your portfolio is up this year? I'm up at 8% a little over 8% this year. So you're not even keeping up with a basic S&P 500?

Mm-hmm. Yeah. Probably because those bonds and fixed incomes are keeping it back right there. Almost like what I said earlier. Yeah, you've got an anchor on this. And you know what bond values do when interest rates go up, right? To go down. Yeah.

They're an inverse relationship, exactly. So that's going to be bad. We were thinking, I mean, waiting as much. I guess, let me quit Malvin around the edges of this. What would I do if I woke up in your shoes? I would move it all to an HSA, or I would move half of it, or an H.S. High-yield savings account. And or I would move half of it there and the other half into just an S&P 500.

That way you get the best of both worlds. Yeah, you got a little mix. Whatever the market does, you're going to get. But that gets rid of. The S&P 500 is probably half as volatile as what you've got right now. I wouldn't be in what you've got right now for anything. I don't have a dime in a portfolio that looks like that, not one. I don't play single stocks, and I for sure, is cred, don't play bonds.

And I would have an end goal and end date instead of just vibe and going, well, maybe a couple years from now, just go, hey, 12 months from now. Our amount of money says, you know, when I get to 400K, we're going, we're going. Or when I get to 300K, we're going. Or whatever the number is, have a name. have a name on it and then let's go do it because the sense of I'm in sales and I'm scared of volatility is never going to go away that you're going to have that as long as you're in sales and so that's not going to change based on the expense of the real estate or based on the interest rate environment it's not going to change based on any of that and so yeah that's that's what

I would do I would take all the money out of that right now I would put either all or half of it in a high yield savings and not worry about it anymore. If I put half of it in, I'd put the other half in. The most volatile thing would be an S&P 500. And I use personally an S&P 500 to park money in while I'm saving up to buy my next real estate project, which is some of my favorite investing. And so I'll let it sit there. And so I've made 10% on my money this year, you know, that's been sitting there a year to date. And I'm fine with that. And if it went down 4% or 5% I'm not going to kill me be fine with that. You're not desperate. But I and I don't have to sit there and make you know high yield savings rates which is what three or four right now? Yeah. Three and a

half about yeah somewhere in there. So that that's the thing. So it's a good call out that this is we're talking non-retirement accounts here. Yes. Yes. Absolutely. And retirement accounts we suggest putting money across four types of mutual funds. Yeah. You're going to have your aggressive growth growth, growth and income and international. So it's kind of like large cap, midcap, small cap. And we're talking about, you know, the huge companies. Those are the safer bets. He's like the cruise ships. It's going to be hard for them to move much. And then as you get down to the small cap and these aggressive growth, it's like a jet ski. These things are moving. And sometimes it's great. Sometimes there's low lows, but you're riding that wave to capture it over a long period

of time. And then international, we saw this happen. International actually went up as the U.S. market went down. So it's a good hedge against the market here stateside. So all of that helps you just sleep better at night. So what's crypto? A pirate boat? Oh, gosh. At this point, I'm not sure who the pirates are and who's taking them down. I think they're taking themselves down. They're sinking. I know that. It's like 56% down from its all time high. What happened to you crypto bros? Bragging about yourself and you're all five, six percent. 56, baby, lost half your money. They get real quiet when it's down. The crypto bros get real quiet when it's not working.

They took their ball and they went home. Yeah, they just go hide in the corner of TikTok over there in the deep corners of recesses of TikTok. It go back where they came from. When an investment's not basing anything and it's just hype, as soon as everyone jumps off the boat. Yeah, I hadn't noticed anybody by bragging about gold lately either. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.