The Ramsey Show - The Hard Road Leads to Freedom

Episode Date: October 1, 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 Rachel Cruz hosting this hour with Jade Warshaw and we are taking your calls about life and money. So give us a call at AAA 825-5-2-2-25. First up, we have Sarah in Cleveland, Ohio.

Hi, Sarah, welcome to the show. Hi, how are you? Hi, we're doing great. How can we help today? So my question is whether or not Chapter 13 bankruptcy is the only way or I guess the best way for my husband and I to get out of substantial debt. Okay, what's going on? What are your numbers? So over the last three to five years, we've basically accumulated $62,000 of credit card debt, $28,000 in loans between house repairs.

and personal loans. We have a $210,000 mortgage balance. We have about $150,000 in student loans and car leases that are about $11,000 annually. Ooh, okay. Yeah. Can you tell me the very first one you said in that list first? I didn't get that one written down.

Credit card is about $62,000. 62, okay. Oh, my goodness. What happened that you guys got to this extent? I mean, obviously the student loans speak for themselves, but the 62,000 in credit cards, the 28,000 and other personal loans. What happened? Did somebody lose a job? Well, the long story short is we had our son about three and a half years ago, and I had pretty bad postpartum depression. We moved back in with my parents and sold our house, and the plan was to save money and have help, but it was not emotionally feasible.

So after about eight months, we bought the first house that we could get an offer accepted on and pretty much put most of our savings down, which made our housing go more than double. So we had a beautiful COVID interest rate beforehand. So pretty much our expenses doubled from there and then just things just getting out of hand in terms of the cost of living. And I wouldn't say keeping up with the Joneses, but I would just say living like we still had. half the expenses. Okay. And you still have that house? You're still in that same house?

Yes. We just bought it about two and a half, three years ago. What do you guys make a year, Sarah? Our net income is $120,000. Okay. And what percentage of your take-home pay is that mortgage? Our mortgage is about $1,800 a month. Mm-hmm.

And you take home how much? After tax. Monthly, it's about $10,000 after tax. Okay. So that's not the problem. Yeah, it's not terrible. The mortgage is not the problem. Have you started the student loans?

It's $150,000. Are you paying on those or have you not been touching those? We are on income-driven repayment plans right now. So we pay about $200 a month for those. And then the thing that's really killing us is about $2,800, $2,900 of minimum payments between all the credit cards and like the personal loans. 2100 in minimums okay okay 29 okay yeah and are you guys doing anything extra on the side at this point are you working extra hours are you working overtime tell me about your free time currently

not really um we both work in business and finance so about half the year my husband works probably 70 hours um a week so he's not able to take on extra work okay and i commute to work about an hour. So, you know, there's time loss there. I started to do some bookkeeping on the side, but that's not really lucrative. Right. So here's, we do have a three-year-old. Yeah, you do. Here's, here's where I'm at. I'm at, you can take the journey here and really change who you all are and who you are and how you operate as a family at a core level and clean this up. And I think it would be good for you. what I'm hearing right now, Sarah, is I understand how you got here. I'm not a fan of how you got here, but I understand how you got here.

But I'm still hearing a lot of reasons why nothing can change. And I think that if you don't address that, that's going to be the hardest part for you. You've got to get to this point where you're like, I don't care what it takes. I'm going to fix this. I don't care if I'm exhausted. I don't care if I have to pick different side jobs that I hate because they make more. I don't care if we have to start looking for jobs. I don't care if we have to sell the house. I don't care. I just want to be free. And right now I feel like you're still,

well, we can't do that because we have kids. Well, we can't do that because of this. Yep. And the 150 student loans, are they government loans? Are they private? They're federal. Okay, so they're not bankruptible. So you still have $150,000 of debt. And so I'm with Jade. And I'm sitting next to somebody who paid off close to half a million. You guys are at about that 250, 270 mark. And I mean, it's going to take you guys probably four to five years. It's going to take a long time to get out of this mess. But what Jade is saying is, I don't know, there's a level of, could you take the, and I wouldn't say easy route because bankruptcy is hard. That's going to affect the rest of your life, right, if you end up doing that route. Just take that and be done.

or do you take some level of responsibility of it's been a hard road and and life has thrown at us a lot of things but we also put our names on some of this like we we did walk into it maybe for difficult reasons but we did walk into this and choose this and there's something that changes and jade you can speak to this because you and sam i mean walked this road completely of this amount of years right this isn't you know sarah unfortunately it's It's not a 18-month journey of like, hey, suck it up for a year. And you guys, I mean, this would be a, this is a, this is a marathon. So what we want to do, have you ever, you know, have you ever played the game,

Jenga and you have to pull out the block and put it on top? And you have to test the block first to see if it'll even move. I feel like what we need to do with this stack of debt is test and see which block we can even move to get out of the way. And I'm looking at these car leases. That's one block that I think has enough movement to get rid of it. And I'm looking at the mortgage. I wonder if it's better for you guys.

I don't know if there's equity there. I wonder if it's better for you guys to sell and rent for a while. Looking at what you're paying a month, there could be something there. Do you have equity? I think it's about $65,000. Okay. And then tell me about the car leases. The car leases, one is actually up in December, which if we were going to do bankruptcy,

we were only going to file myself, like my half, I guess. first, I guess we're just scared that if we both do it, then if something... What debt is in your name, Sarah? About half. Of the credit card and personal loan. Yes, we are only joint on the mortgage and the one loan for the basement repair. And see, even that, for me, feels like it's certainly not the right move because you're just not clearing enough.

In my mind, you're not going to be able to clear enough of this debt. You're making a worse situation worse, yes. And, you know, depending on income and everything, they may put you on a repayment plan. You know, some of this, depending on which bankruptcy chapter you guys pursue or that you're eligible for. Right. Some of the time you're back on a payment.

You're going to end up paying something at some point. You might as well pay to get out of debt and avoid bankruptcy. Yeah, I agree with that. So look at these car leases. If, you know, if you have them and you can say, obviously the one you're out in December, that's good. Do not go back in. Start saving up for a cash car now, I would say.

And then for the other one, figure out what it costs to just, you know, buy the car out. and then turn around and get a loan for that and then turn around and sell that car and then save up cash for a next car. And even with the credit card, if some of it goes to collections, you can negotiate that too, down possibly. But call us back, Sarah, if you need us. I'm so sorry. It's going to be a long road ahead, but it's going to be the best road. If you're already enrolled in a Medicare plan, you might think there's nothing else to do. You're good to go. Wrong? The fact is Medicare premiums, networks, prescription coverage, and benefits can all. change, even if your health doesn't. So doing nothing could cost you hundreds or even thousands of dollars a year. With annual enrollment time coming soon, you need to talk to Chapter right away.

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That's askchapter.org. org slash Ramsey. Next step, we have Melody in Orlando, Florida. Hi, welcome to the show. Hi, Rachel and Jade. So I'm debt-free, and I make a good income and should be on baby Step 6 where I'm paying off my mortgage early. Great.

I live in a new build community. I moved in about two years ago, and our HOA is suing the builder due to building defects and the major issue that they're looking at is water intrusion. Oh, no. Which is obviously a huge problem being here in Florida with all the rain and the hurricanes. Oh, sure. And I also only live in Florida because I want to be near my parents who are older and not in great health, but Florida in general is not my long-term plan.

So my question is, I'm wondering if I should actually try to pay off my mortgage, knowing that my house is probably rotting from the inside out. And I'm also not going to be in Florida long term anyways. I wanted to get your thoughts on that. Is everyone experiencing the water intrusion? Is it just a few homes? Have you experienced any issue thus far? I have experienced some issues.

It does seem to be a problem across everyone's home to different degrees. Mine is more on the minor end, but still pretty serious. just in general, we don't want any water intrusion. And it's probably going to be a couple of years before this litigation even ends where we could start getting funds to fix it. What does it take to fix it? Do you know what the solution is and what it costs, at least for you? No, not yet because most of the issue seems to be the front of the home.

So we live in townhome. So it's like the front, the siding underneath it, the waterproofing. It's all been like nailed through. so it's basically like a whole overhaul of the front of all of the buildings and it would have to be done like at the community level because we're town-in-law. Wow, wow. How much do you have left on the mortgage? So I have about 500K left on the mortgage. I bought it two years ago for 655.

Okay. And you said that Florida is not going to be your long-term, you know, home. Do you have a time frame on when you will probably move out? Will it be in like two years or like 10 years? I mean, I hate to say it this way. It's more dependent on how long my parents are going to be around. Yeah, yeah, that's fair. How old are they?

But they're in their 70s. Okay. So there's a good chance. It could be 10 plus years. Yeah, there's no real like definitive. Sure. Yeah. So if that's the case, and if,

if you think you're going to be probably not moving out of your current home, do you think you'll be there for 10 years? I'd like to guess probably not, like maybe five-ish years, but who knows? Yeah, because the ideal situation would be that the lawsuit goes through, they have to pay up the, you know, the builder to whatever degree to fix, whatever issue is going on. So it's not coming out of your pockets. And then you've been paying down the mortgage. and then when you move, there's some equity there,

and it's a fixed home. It's a fixed town home, right, in that situation. So that's the ideal. And there's still something about putting money into a property. Like, if you, I don't know, I'm kind of even thinking, like, are you wanting to move right now? Like, if you get water damage and, you know, I'm thinking mold and, like, who knows what else could grow in the meantime?

Can start to happen. Do you feel good where you are? Well, the thing is, if I were to move, I probably would take a loss on the house. I know, you know, Zillow is not always the most accurate, but because it is a new community and it is townhomes, the most recent units just sold earlier this month. So I kind of have a benchmark already. But with the addition of the litigation and all the destructive testing that's happening, it's probably not going to be easy to sell and let alone sell for at least what I paid for it. Yeah, tell us about the ones that did sell. Were those new construction that no one had lived in?

Or were there people who had bought and were actually able to sell even with the water issue? No. So those were the last few available units of the community before those are left. So you would be the first person trying to sell as an owner with the water damage? So the community's been open for like, I think, three or four years. So there have been a couple units that have sold, but not before the, not after the litigate. Yeah, right. So now that everybody knows what the deal is, you'd have to disclose that.

And that would be part of that. So if I were in your shoes, you know, I think, Melody, I would kind of, I love that the HOA is going after this. But I think I would kind of own this as my own thing as well. Yeah. And I would have some people come out to my own townhouse and give me estimates. Let me know. And just kind of gather your own information because there may be. gathering it from the perspective of the whole, but there may be some things that you can do

individually. I don't know, but there might be. And I'd want to know those numbers for myself. I'd want to know maybe there is something I can do that it doesn't have to be the whole line of townhomes, right? I'd want that information and I'd want to know what that cost is. Yeah, and get all the HOA guidelines too, because sometimes with townhomes, depending on, I think the HOA of what you actually own. Right. And what. which you can actually work on, you know, depends on the unit, depends of the part of the neighborhood. I don't know. I would be very specific about your townhome. And yes, is there any work you can do to mitigate some of this that could happen? And I would just want another

person's professional opinion who's not in the middle of this because this isn't always the case, but sometimes HOAs are traumatic. Sometimes it's like, you know what I mean? And I'm not saying there's not a problem. I'm sure there is. There's been a lot of crappy builders, you know, that just throw up stuff and it's not good quality for sure. That could definitely be the case. But I would want to get an actual realistic perspective from an outside party who knows what they're talking about looking at my specific home, not what everybody else is talking about. You know what I mean? And it could be worse. It could be better. I don't know. But I think that news then that information will be able to help you make some good decisions on what needs fixing

and what you can do to protect your asset so that when you do sell, whether that's after you're parents before your parents. I mean, you know, whatever that situation is. At least you've done which you can control. I agree. Right. Yeah. Our HOA guidelines do say that the, basically, it's like the whole entire front and like top of the units are HOA managed. So I don't think I would be able to do anything independently. We do have engineers and construction folks hired by the HOA going around doing destructive testing on all the units. So I have had them. at my unit and they did discover already some water damage that they're trying to like sort of mitigate in the interim period, but it's not a long-term solution right now.

Yeah. Understood. Yeah. Well, to answer your question, I would just keep paying the more. I mean, I would just keep paying the payments. And honestly, what I might do with the extra money that you were going to put on the payment, I might stack it up for repairs, knowing that I might be the one that has to come out of pocket in some capacity to handle this.

And then I'd probably hold on to that until some sort of information is given. If they're not going to pay, then somebody's going to have to pay. And it's probably going to be you guys to a certain extent. So I'd want that money ready to go to make my house livable.

It's almost like upping that emergency funds enough that when, yeah, when it has to happen and it has to get fixed and if it's coming out of your pocket, you have the money for it. Oh, it's so frustrating. though. And that's the other part. We say it all the time on the show, but it's true. Homeownership is expensive. Things happen. And sometimes it's stuff you can't control. Sometimes it is stuff that you control. But the

expense of owning a home, it is worth it in the long run. And not that every house deals with every specific issue like melodies, but it's another plea that when you become a homeowner, that you don't have debt, that you have an emergency fund. Like you're in a good financial position to have margin as a homeowner. So when things come up, because they will, that it's not a stress point, that you know you can take care of it. And I mean, that's always our big push with homeownership because it's a lot. If you've ever been really sick or been the caregiver to somebody who was, you know how broken the health care system can be. Man, nothing is easy. Finding the right doctor, sitting on hold for hours, or, gosh, trying to understand co-pays and treatment plans. and weird medical terms that no one really explains and so much paperwork. But what if you had someone to do all of that for you?

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They'll fight the system so you don't have to. Go to solacehealth.com slash Ramsey or click the link in the description. Checking your eligibility only takes about two minutes. That's S-O-L-A-C-E-H-H-H. Health.com slash Ramsey. You must be 18 or older. And remember, advocates do not provide medical or legal advice. Well, if you haven't heard, Ramsey is taking over an entire cruise ship. So we are doing the Live Like No One Else Cruise, March 14th through the 21st and 2027. And we are going to the Western Caribbean. So it'll be Jamaica, Grand Cayman, Cozumel, the Bahamas, so many great stops. And I just want tell you guys, this is more than just a cruise. This is really this moment in time where you're trapped on a ship with all of your fun Ramsey, Ramsey people. And there's a lot of learning and

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So that's your cabin, your food, entertainment, taxes, and tips, and all of it. So this is such a unique week, and we don't get to do that. We've only done one of these. And it was so great that we were wanting to do it again. And so there's a few cabins left. But you guys, make sure to sign up and go with us again. The dates are March 14th through the 21st. You can go to ramsysolutions.com slash events.

Get signed up. Book your cabin and join us on a wonderful, beautiful ship in March of 2027. All right. Let's go to Kevin in Mobile, Alabama. Hi, Kevin. Welcome to the show. Well, thank you. Thank you for kicking my question.

Absolutely. How can we help today? Well, my wife and I have a college freshman who just started in the fall. We had done a good job of preparing him for college. He's real responsible. He does not owe any college tuition. He did a great job scholastically. He got scholarships. And so we're paying for living expenses.

One of the issues I have, and this is probably thanks to listening to your show, I had always assumed that it would be beneficial for young people to begin building credit history. So when he started in the fall, I thought, well, hey, I'll just add him as an authorized user on one of my credit card accounts and let him start charging just his minimal living expenses there on campus. But after listening to the show and recognizing the serious consequences that can arise with using credit cards, my question is, am I doing him a disservice teaching him to use a credit card to build credit? And is building a credit file actually necessary to move forward in life? Well, I got to say, I love, I think you're a really good dad because I think that you're a really thinking through what's best for him. And it sounds like you're really open. And so,

Rachel, what I'm hearing is somebody who is wanting to build like good habits, good financial habits. And if we take that as the through line and we go, okay, what's what's the most healthy financial habit? It's being able to live on less than you make. It's being able to delay gratification for the things that we want. It's being able to right kind of control our behavior and make sure that our money is behaving and not the opposite way around in our money controlling us. So I think that's what you're after. And if that's the case, then I would say that a credit card would not be even necessary for him if those things that we just discussed are in fact true about him because he would be able to use cash to do those things.

And he does. He does have a debit card that he could use instead. You know, obviously, as I said earlier, I assume that using a debit card is not going to build any transactional credit history. But if that is something that is really unnecessary and not worth the risk, then I will encourage him to shred that card and just use cash. Well, yeah, and to know, Kevin, the reason, you know, that all of this whole debt product, in the first place, you know, pushes messages like this, because that's a very normal way of thinking. You know, a lot of people who are going to build my credit. That's a very normal statement we hear. And as you look at the credit score and how it's actually calculated, right, it all has to do with debt, right? If you pay the debt on time, the types of debt you have, if you're accumulating

new debt, like it's that score. And the reason, the main reason you use that score is to go into more debt, right? So he would need a score if he's going to go get car loans. If he's going to going to get personal loans, a small business loan. You know, if he's going to go into a life of debts, then yes, that score would be necessary. But what Jade and I, you know, what Jade laid out was beautiful to say, if you're choosing a debt-free life where you save up and pay for things, where you actually say no to the whole debt industry, even things like a car, then there's really no reason for that credit score. The mortgage is the one type of debt that we won't yell at you And so you can actually get a mortgage still without a credit score.

It's called manual underwriting. And you can go through that process and still own a home. And so really that credit score, man, it has been inflated so much of the importance of it. But if you kind of choose the weird path of life, like what we teach you on the Ramsey show and you choose a life without debt, you really, you don't need it. Now, there are moments maybe employers or, you know, even with like cell phone companies. they may pull his credit report to see any history of how he has paid, but there just really won't be anything on that credit report. And it doesn't necessarily ding you.

He may have to fill an extra form or two. But that would be the only time that you kind of run into a situation outside of debt of why people, you know, try to have great credit history and all of that. So if anything, Kevin, you know, he could even freeze his credit. And so that, you know, make sure that no idea. You know, no one's taking debt out of his name and, you know, even identity theft and all of that. Sure. That can take care of that.

So that's probably the card I would play with him is that, yeah, why you don't need it, explain it to him. And creating these habits in college is so healthy. Like for an 18-year-old to be budgeting the money that he has and spending within his means is amazing. Yeah, Kevin. And I would just add one more layer to that because I think Rachel, I mean, what she's saying is exactly right.

And even the fact that just reframing that a zero credit score or an indeterminable credit score in the market is just as effective as a high credit score, there's no negative to it. And Rachel talked about the home. But really, there's kind of three key areas that most people think, I need credit for this. Most people thought they needed credit to buy a home, which Rachel mentioned. A lot of people think they need it for a car and they think they need it for an apartment. And so just kind of getting ahead of those and being able to talk with them and just tell them, hey, when you go to your apartment, just know you might have to pay a little bit more down for first and last month's rent. Just know that they're going to ask for other trade lines, your cell phones, maybe things like your insurance payments. So being ready to be able to show those types of things. And just so he knows what to expect with a car, right? One of the big things about this is now we're saving up and we're paying cash for cars. And just by him doing that, Rachel, he will be. so ahead of the average American, never getting into that car loan cycle. So that's how this works. And I think when people have that information ahead of time, it kind of just counteracts some of those things

that we come up against when it's time to buy an apartment. It's time to buy a car. Just getting ahead of that. Yes. No, absolutely. Because, you know, there is a life navigating without debt. And the positive side of it, too, even the numbers, like even, you know, Kevin running, if you go to ramsysysolutions.com, we have an investment calculator and I'm like just throw in with the average family owes I think right now $12,000 balance is on a credit card and it's like throw that in an investment calculator and instead of that being your reality here's what your reality could be you know in in 40 years and same with the car car loan I mean the average car payment on a new car is up around $900 a month and if you just said hey what if you avoided that and debt was not part of your life and you invested a car payment every

month instead of paying a car dealer or a bank, what you could be. So the, you know, the possibilities are endless. So Kevin, yeah, just like Jade said, at the top of the call, you were such a great dad. And I think that's where parents can step in. And it's not out of control or judgment with your kids, but teach them and show them like, hey, here is what this looks like. And even your own mistakes, right? I mean, as parents, I'm like, man, that's, what a wonderful, humbling thing for your kids. But please learn this before because that's one line we get. all the time is I wish I had known this stuff earlier. Absolutely. And if you can get it, Kevin, at your son's age, oh my gosh, to set him up for

not only financially having peace, but also emotionally around money, that is such a gift. Okay, George, we hear from so many people that are trying to live out to the Ramsey plan, right? They're getting out of debt and everything. But the hard thing is, there's not many banks out there that actually support the way we teach people to handle money. Yeah, most banks, they don't want you to win with money. So they charge a bunch of nuisance. fees, there's all this fine print, and worst of all, they are pushing debt products at you nonstop. Yes, but the good thing is, is that Fairwinds isn't like most banks. They're not like the other guys. They're not like the other guys. Yeah, they are not pushing debt, and they actually

want you to win with the baby steps. And so what's great, too, is they created the smart bundle for Ramsey fans, which includes a high-yield savings account and no monthly fee checking. Which is huge, because it's rare to have a checking account tied to a high-yield savings account. You can get all of that with Fairwinds. And for the nerds out there, you can have 10 different high-yield savings accounts for different goals. So you got your emergency fund, the car upgrade fund, the vacation fund. The world is your oyster. So beautiful.

And check out the debit card, the new one. The Live Like No One Else Debit Card. It's so beautiful. That's a conversation starter. It's so good. Well, and when you swipe or you tap, you know, every time you take it out of your wallet, you're remembering that you are living like no one else and you're being intentional with your money. I've been using Fair Winds for months and months now.

I love their features, the app, the customer service. It is all so good and so aligned with the Ramsey principles. Absolutely. So y'all, we both bank at Fairwind and we love their commitment to Ramsey values. So check it out. You can get that smart bundle. We're going to drop a link in the description or you can go to fairwins.org slash Ramsey today. That's right.

That's fairwins.org slash Ramsey insured by the NCUA. Well, if you're new here, like many of our listeners that have joined, even in the past couple of months, You know, one filter that we use to answer a lot of our money questions on the show is through the seven baby steps. And so this, these seven steps really take you from paycheck to paycheck living, broke, no savings, debt, all of it, to going through it for paying off debt, getting an emergency fund, a fully funded emergency fund, you're funding retirement in kids college, you're paying your house off early, like getting you through that money process is the seven baby steps. So if you want to, you want to check it out. Make sure you do. We'll put a link down below if you're listening on podcast or watching on YouTube because, I mean, it's a pretty simple, you read them and you're like, all right, pretty simple to understand. Sometimes it's hard to do because it can be a long, it can be a long journey, but it really does have you get a grip on your money and actually have control over it, actually have a plan for your income, and the fastest way of building

wealth long term, it's this. So check it out the Ramsey Baby Steps. All right, let's go to Lonnie. in Austin, Texas. Hi, welcome to the show. Hi, how are you doing? Thanks for taking my call. Absolutely. How can we help? So I've been Dave-ish my whole life,

and I recently got busy with it, and I have my $1,000 emergency fund. Good. And I was tackling my snowballs. And while I was doing that, I had $17,000 on the credit card. And the monthly payments got so bad that I just kind of stopped

paying them. I figured I'd pay it later, you know, get in touch with them. And so then when I did that, they put a lawsuit against me. They gave me to a debt collector and went to a law firm. And they said that I had a lawsuit and they gave me all the paperwork and everything. Somebody came in there and said handing me the papers. And so I called them and I settled down to $8,000. And we, I gave them all the numbers that they asked for, my routing information, all the stuff my bank. Oh no. Oh, no. And they were moved. Like, you know, they're supposed to, you know, drafted out of my account, the $8,000, and it never moved. So then I called them, they sat there for like two weeks, and I called them back, and they said that I had a zero balance. And so I was like,

okay. And then I got a receipt in the mail saying that I had a zero balance and they wouldn't go after the rest of the money that I owed because we had $8,000 agreement. So then it sat there for another two weeks, nothing happened. And then they called me and telling me, like, I had never even spoke to them. They said that I had a lawsuit pending against me and I owed $17,000. Oh, my gosh.

Stupid people. They're just, I thought to a guess. They're just idiots, Lonnie. They messed up. They clearly got you confused with somebody else, unfortunately, it sounds like. Well, I did have the $17,000 thing. And they might have pulled somebody

somebody else in this money out of their account. I'm not sure what happened, but it's still sitting there, and they're still saying that I have a lawsuit, and I gave them all the routing information again to draft it out of my account, still sitting there. So my question is, should I, like, go take some of that money and go hire a lawyer? I don't think so. It sounds like, I just want to make sure I'm following your story. You got it settled for $8,000. You sent them your bank account for them to clear it. They didn't clear it, but they did send you something that said it was free and clear. Now they're coming back saying, oops, no, it's not freeing. clear you actually still owe it. So what I would do is I would get on the phone and I would call

several times until I feel like I'm speaking to somebody with a working brain. And when I feel like I am, then I'm going to send them probably a money order for the difference or like a cashier's check. Do not give them any more access to your bank account. Okay. And that way you've taken it into your own hands to make sure it's paid. And then I'd want written receipt again that it's been cleared with the new date on it when it was clear. And yeah. Yeah, so go renegotiate again back down to the $8,000 if you can. And sometimes they are going to need you to have that amount of money to go ahead and just make the payment.

But you said you still have in that account. So what I would do is actually get them to email you like a transcript of your conversation or at least in writing say, yes, we are going to settle this for $8,000. So you have it on the front end. and then send them the cashier's check and then ask them to make sure that they send you a receipt for after, you know, that they have collected your money. So that's what I would do.

That's the rest of what I did whenever they, when we settled the deal and asked from my account, I said, can you do this today? And I said, no, not until you send me a piece of paper saying that this will be settled for the $8,000. They sent that. And then after I talked to them, they sent me a receipt saying that there's zero balance.

And then they're calling you back. The guy that I does handling my case or whatever is real arrogant and acts like I owe him money personally. Right, right. Well, but they never took money out of your account, right? So you haven't lost any money, correct? Right. Right. So you're just having to go back through the hoops again of renegotiating.

Even send them a copy of that first, you know, thing, you know, the first deal that you made with them. Yeah, it is, it's an absolute roundabout situation. And it kind of ends up being your part-time job, Lonnie, unfortunately. because it is so obnoxious. Yep, so obnoxious. But you did the right thing. They screwed up on their end, which just means you're just going to have this a little bit longer

until you fix it again and just keep trying. And honestly, by the end of it all, I bet that your debt, your bad debt has now been, it'll be sold to another company because that collection company is going to sell it off. Maybe you'll get it settled for a little cheaper. Yeah, it's just going to go round and around. And so until it's until it is a done deal,

sadly, this is part of the gig of getting out of debt. But, you know, I mean, because of your situation and because of what they've chosen to negotiate, what a great thing that 17 went down to eight. I mean, we'll take it. You know, that's a win. And when you do that cashier's check, keep that receipt that you know that you paid them. Because even if these are bozos, so they may never send you the receipt on their end, but at least you know you did it and you can file that away forever.

That's right. All right. Let's go to Pete in Jacksonville, Florida. Hi, Pete. Welcome to the show. Hi, my husband had one for an employment so you get me. Oh, perfect. Perfect, what's your name?

I'm going to go with Patty. Patty, perfect. Thanks, Patty. How can we help? My husband and I are looking at buying a lake home, second home. We are debt-free. We inherited a large sum of money, and we're just wondering if we should pay for the lake home out of that money

or if we should borrow money, take out of a short-term mortgage, as to keep our tax burden down. Interesting. How much is the amount that you received in the inheritance? 2.9 million. How much is the lake house? 850,000. Great.

So you all guys will have 2 million left. No, I mean... That's not our whole pile. That's just what we inherited. Oh, that was just the inheritance. Okay, how much is your net worth total? $5 million. Good for you guys.

And you're wanting to take the mortgage out so that you're not... What was the thing about the tax bracket? What did you say? We would have to take the money out of our pile of our investments to pay for the home, which we can do. But we're just wondering it's going to boost this up into a 24 or more tax bracket. And we're just wondering if we take out a mortgage, then maybe we could stay in a lower tax bracket and just pay it off over time if that's a parking. Yeah, well, the amount you would save on taxes is probably.

going to be smaller than the interest you're going to end up paying on a mortgage over time. So, I mean, I would run those numbers, but no, I mean, I would tell you, just pay for it, Patty. Just pay for it. Absolutely. And if you're in that, yeah, I mean, that's, because you're going to have, if you pull the money out of these investments at any point, you're going to have to pay taxes on them. And so, yeah, it's probably going to be a lump sum of it, and it's not going to feel great. But also, but also, like, it's, it is what it is.

Absolutely. There's a part of our life of, you know, living in America that I'm like, it is that, that is the bracket. And to play the game with the government and the mortgage companies to try to get around it, usually at the end of the day, the consumer is the one that ends up paying more. Yeah. Yeah. Well, don't. Here's a thing, though. It is bittersweet, but it's also, it's like mo money, Mo problems. It's one of those things where it's like, it's a blessing to have this problem because having this problem means you have a bunch of money. And so it's kind of all in the way you look at it. You don't want taxes to shield the fact that this is an incredible blessing that you can actually pull $850,000 out of an account and pay for a house in cash. That's the business right there. which is beautiful.

Yeah. And just staying debt-free the whole time, owning it, not messing with everything. I'm telling you, in the long term, just buy it. Just buy it,

buy the property. You guys have worked hard. You've done so well, Patty, as part of this was an inheritance, but also you guys had some of your own hard-earned money, which is wonderful.

And this is why you do it for moments like this. So just keep moving forward, get the lake house, have fun, enjoy it, and we all don't care for taxes. Yeah.

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356, 4282 to find the coverage that fits your family. Welcome back to The Ramsey Show and the Fair One's Credit Union Studio. I'm Rachel Cruz at hosting this hour with Jade Warshaw, and we are taking your questions at AAA 825-5-2-2-25. First up, we have Jessica in New York City. Hi, Jessica. Welcome to the show. Hi, guys, thanks for having me. How are you? Hi, we're doing great. How can we help?

Yeah, so I'm just calling, you know, a lot of times I feel like people call and know what you're going to say, but I've gotten myself into a little bit of a pickle. I'll start out with what I'm looking for, financial advice and how to get back up on my feet or even survive my current situation. So I've been in a four-and-a-half-year relationship with a man who makes about $900,000 in health care. and I found out about five months ago that he was married. He's been married for seven years, and I didn't know this. He claims that he has been afraid of the financial consequences of getting a divorce, but, you know, actively seeing his wife, and then there was me. So he is now in the process of getting a divorce, which is costing him like seven figures in alimony.

And so now I decided to give him a second. chance and I'm just struggling with living with the situation, the betrayal and stuff. But also, I'm struggling if I were to leave the situation too. I can't, I don't know how to get back up on my feet because I move cross country to be with him. I'm four months pregnant and I am taking care of his family and also I filed for bankruptcy last year because I didn't want to enter a marriage with a bunch of baggage and a lot of that debt was after my mom died

I had bought a timeshare and like it's about $40,000 and lesson learned so I'm debating whether I should stay and see it through because now we're living paycheck to paycheck with this divorce and just the mental baggage of that

and I'm also contemplating leaving the relationship but where do I start I used to make 150,000 now I make 30,000 after taxes. So I don't know. I just want some advice on any of the above.

Where are you now? Are you still living together? Like what's the current today's situation? So we are still living together as a couple and we have funding the day stuff but this financial situation and it's not finalized

with his previous ex yet through the legal system. So we're living a normal life. I take care of his family rental property. Help me understand that part. When you say you take care of his family, was that a health thing? Was that, what does that mean? So parents, siblings, aunts and uncles, they have a lot of like appointments and rental properties. And I am the rental manager for seven properties. And, um, and some, you work. You work in the family business. And that's what earns you the 30,000? I do not for free. I make $30,000 at a remote job.

So you manage seven properties for his family for free? Yes. Girlfriend. All my bills are paid for, but yeah. So that's the exchange. If you manage these properties, you live with him and he'll pay for everything. Is that what I'm understanding? I'm not judging.

I'm just trying to understand. That's the current situation. I pay my student loans and health insurance, very small stuff myself. but Jessica that's what I do you endanger girl you got to get out of this like this is this is so unhealthy for you

financially it is so unsafe for you because everything hinges and you're feeling that it's like the golden handcuffs of a relationship right that you've kind of built these systems in place where he has so much control over you

and I think that's why you laid it out that way because you're right And it shouldn't stop you, but you are right. If you, when you, let me say when you leave him, you are going to be starting over. And that feels really scary. It does. And it is. But it doesn't mean that you can't do it.

You are a fully grown woman. You are smart. You're capable. There's no reason that you can't go into the world and, you know, increase your income from 30K up. You've just proven you can be a property manager. There's nothing capable. ability-wise keeping you from going to the world into the world standing on your own two feet. Yeah. And I just feel like he, you know, there's this devil on my shoulder telling me that he is still willing to marry me and not sign a pre-up, but I almost want to see that through and have them sign a pre-not that's going to give me what I...

He was deceptive. He proved that he could be a deceptive person for seven and a half years. That tells me something. He's shown you something about himself. Don't ignore that. Even though, you experienced it different from what his wife experience. You had two separate experiences. It was geared towards you. Don't let that make you feel like you've won some prize here. He's been deceptive for seven years. I mean, had a whole other, whole other life. And if you can function in that mentality for seven years for him, and he's not done anything different, right, gone to Arizona. to a rehab center for six months together or something. Do you know what?

Okay, something to prove. But it doesn't sound like, I mean, it sounds like he is the same person. So from the relational standpoint, I don't know how you trust someone after you find out that he had a wife and kids and stuff, you know. And so that's the relational side. And then Jessica, I mean, and then the baby, what a sweet baby. But man, that adds for sure. makes you feel like you have to stay in it.

And all of this too. And so, and I don't know what the laws are, but you guys aren't married. And so it's not like there's going to be necessarily, I think state by state there may be different ways you can kind of pick through the law to see if there's anything from a common marriage perspective, right? Because you guys have been to get anything from him to help with the baby. That would be helpful. But yeah, I would be creating an independent.

solo life, Jessica, of how you would function out in the real world. And I would start those habits pretty soon just to start before you actually, unless you're, you know, unless it's, unless it's happening tomorrow, start, you know, building some, some skills around you for you to hold yourself up. Do you have family anywhere? They're across country. Where are they? And none of them know what's going on. Are you close? In the Midwest. Okay. Are you close? close with them at all? Yes, my dad and his side and my aunts and uncles.

Okay. Yeah, I call them a lot. But they don't know about this? Man, Jessica, I may be going home. Yeah, I think you do. With my baby. And I'm going to start a life. I'm going to start a life.

And I'm very aware of Jade and I sit behind this desk and we say that and you are where you are and the consequences of what we say. and the life that you have to build, it takes year. I mean, that is a big ask from us to you of what we would advise you to do. But you can't let this blind you from what's right. Like you can't let the financial comfort blind you

from what you know you have to do. Yes. And I think Jessica, five years from now, has a better shot at creating a better life as she's dependent upon Jessica than a man who's lied to you for seven years and had another family. If you're waiting for rates to drop before you buy a home, here's what nobody tells you.

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Except we have Katie in Minneapolis. Hi, Katie. Welcome to the show. Hi, thank you so much for having me. Absolutely. How can we help? Curious if our family should focus on increasing our down payment enough to make a $550,000 home affordable or if that would be stretching beyond what we can realistically afford. And I'm also wondering if there's some pride or, lifestyle inflation influencing what I want versus what we actually need oh great questions okay so

how much do you guys have saved for the home now um currently we are working through baby step number two okay um but we are we're looking ahead and it's kind of feeling like the light at the end of the tunnel is not as bright because now I'm looking at the numbers and I can't realistically afford what I actually want what do you you want? What's the, what's the amount of the home that you think would fit your family? So, um, what, what I want is roughly a $550,000 home. Okay. And we do a lot of hosting. Um, and we started our, our debt free journey this, this past year, like in January, we started, um, and we downsized significantly. Okay. Um, and I'm, I'm, I'm itching to get out.

now. And so we, my husband, we're a single income family home. And my husband brings home about 103,000 a year. Okay. And what hits your account every month, Katie? Yeah, what hits every month, just after tax number. Okay. So he actually gets three large bonuses a year. And so we are, for We are $4,400 weekly. But with his bonus, if I include his bonus amounts, that's $8,650 a month. Total. Yes, total. When does he get the bonuses?

Is it at the end of the year or how are they paid out? Or do they pay out monthly? No, they pay out in three large sums within the first six months of the year. Understood. So you could essentially take that and disperse it throughout the year and kind of get ahead of it like that. Okay, I understand. So we're looking at... We could do that. We're looking at when the time comes, assuming his pay is just the same. We are looking for a payment that's no more than 25% of your take home. So if we take the 8,650 and we divide that by four, we don't want to spend any more than $2,162 on this mortgage, if that's the after-tax amount. Right. Okay. And go ahead. I was just, I'm trying to see if we just keep our heads down and keep saving for a larger down payment so that we can get the mortgage at a more comfortable amount.

If that's a good plan or if I just really need to reel it in. I think you may, I mean, it just depends on where you see. your income going because I'm just running the numbers here and if they want to pull it up. I've just got you in for a $550,000 mortgage. And right now I just guess I put in 300,000 down. Let's just pretend. 15 you're fixed. Let's keep it at 6.5, even though mortgage rates have been moving lately. And that puts you at everything all in. And this is just a guess on property taxes and homeowner insurance. But that puts them, Rachel, at 2,9007. So we're already above. where you want to be and we've already put 300,000 down.

So there's part of me that it's not impossible, but that's a very long stretch of time. I think I'd rather adjust my expectations to get into something. Yes. I mean, on a $100,000 income, Katie, I mean, for what you can afford month to month, to enjoy life too.

Like some of this is, yes, us, you know, making sure that there's enough other money to invest and all of it, but it's also just to be able to live comfortably and not stress every single month that you don't have any money to take the kids to target real quick to get something. You don't mean just to have margin to live life. So yeah, I think the expectation of the house

is sadly probably going to have to come down. But think about this as a trade. And this is what's probably either going to give you some peace about it or cause you to switch lanes. you have chosen that a value for you is to be a stay-at-home mom. And so because of that, we've got one income coming in. And, you know, in America right now, the cost of living is very high. And so when you made that choice to stay home, which is great, you made that your number

one priority financially. That means that everything else kind of bows at that. Do you see what I'm saying? And so if you look at that, you go, you know what, I'm getting what I really wanted out of life. Because of that, I'm happy to, you know, scale back my home. dreams, you may be cool with that. Or it might cause you to re-look at that and go, okay, maybe I only want to stay at home for the first six years and then I want to go back to work so that I can have a little bit of both of these. Or maybe you go, today I want to go back to, right? Looking at all of this together and looking at it through values and priorities will help you to know what's most important to you. Yeah, is this house first home? Katie? we previously sold a home so we wouldn't like qualify for first home buyer anything like that

but my kids are like next year my youngest will be going to school full time so we're we're at a crossroads right now and I want to go back to work but I've also been out of the workforce for eight and a half years sure yeah yeah so I'm kind we're we're at a pivotal point right now trying to figure out exactly where we're going and figuring out. Yeah, how old are you guys? My husband is 35 and I'm 28. 28, okay. How old are the kids?

Eight and four. Okay, so great. And we've paid off $50,000 this year. Oh, my gosh. And we will be out of debt in by July. Excellent. By February. Okay.

We have 22,000 left. Well, okay. But see, listen, if you did 50,000 in a year, and if you guys did that for two years, saved 100,000, right? You could maybe find it. I mean, I don't have the calculator in front of me right now, but, you know, you could do a $450,000 house, right, with $100,000.

I don't know, like, I just wonder if there's the amount you guys can save in three years, right, even $150,000. I don't know. I'm just wondering what you guys can continue to save. sacrifice. That'd work. Because a home, you know, it is such a long-term play. So I almost would take another year extra of my timeline to save a big chunk for a down payment to make it work, right? Like that, to me, that would be, that would be worth it. Yeah, if you said what Rachel said, $350,000, or maybe a little bit more assuming you guys' income goes up and you save $150, well,

then you're right at it. And again, assuming that his income goes up, it sounds like he's got some trajectory. It could be a $400,000 house, you know. Right. But it's tough. Our time, yeah, our timeline is that we should have a $51,000 down payment by July of 2028. So if we just keep our heads down, we could, we could really get a large chunk. But I just am not sure if that's worth it or if, like I said before, if it's like a pride thing or I just need to really dial it in. I don't think you have a choice. Because you cannot do. the $550,000 house. So that choice is made for you. You simply cannot afford it.

So I think the choice is made for you. And I do think if you lower, slightly lower the expectation of the home, allow that over time over the next three and a half years as you save, his income is going to go up. Possibly you'll go back to work already. That's looking a lot better for you, Kate, because you're going to be able to afford more home that way with both of those two things happening. So I would approach this as, okay, the next three to four years, that time is going to pass regardless. I'm going to do the best that I can with this time.

We're going to save up as much money as we can because the day is going to come. If you keep doing that, you're going to pile up money and pile up money. And the day is going to come when you're going to be able to buy something. Yep. And when you buy it, hopefully, you know, you have it for quite a while, right? Yeah. Yep. And so that's it.

It's like kind of that short-term sacrifice to get what you want for a lot. longer term is worth it to me. So I don't know if that helps, Katie, but oh, I'm, it's a frustrating, it's a frustrating time. We get it. But also, it's just adjusting expectations some and probably having to save a little bit longer. Hey, guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And health care is one of the biggest expenses in most families' budgets. And that is why I recommend that you check out Christian health care ministries. CHM isn't insurance. It's a health-cost-sharing ministry. That means members help pay one another's medical bills, and they've been serving Christians since 1981. CHM programs start at just

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and to find agents that actually know their stuff. And so Ramsey trusted insurance pros are vetted and coached to make sure that they're market experts who have your best interest at heart. So make sure to Ramsey Solutions.com slash coverage to find the type of insurance that you're looking for and connect with a Ramsey trusted agent there. All right, let's go to Joel and he's in Canada. Hi, Joel. welcome to the show. Hey, how's you going to date?

Hi, we're doing great. How can we help? So I run a concrete business, and I've never took a loan in my life. I bought my house flat out. I've never took a car payment. Wow. That's awesome. Well done.

Thank you. My question, though, is right now I have about $200,000 a year gross profit, but I know I could double that or more if I start playing a debt game and take a line of credit. Because all these big jobs I financially can't do from paying my labors for six months plus sometimes and financing all the materials. So do you think it's worth taking extra risk

to expand my company and play the deck game? Do you think it's worth it? Personally, yes, but it's putting a lot of risk on top. Yeah. Yeah. And I think that's the biggest factor. And obviously it's the unknown. And the way we coach small businesses here through Entree leadership is really walking through

through a process of where your business is, you know, where you own it outright. And you're not having to play the debt game because when banks and payments and all of that enter into your life, Joel, you're playing a different game at that point. And some people think it's worth it. and they figure it out and that's what they want to do. And it's what they do. And then other people try to play that game and their entire life is full of stress

because they've out-leverage themselves. They jumped ahead and had some expectations that never really came through that they thought because they were supposed to and all the numbers worked and everything was supposed to work. And the reality is it didn't. And so now they've put themselves in a situation that they could have,

easily avoided by going slower. And going slow for an entrepreneur is not a very fun thing, I know, because you get energy from the growth and you're seeing all the success and all of it. And you're like, why not just magnify it? And I mean, the moment you do is the moment suddenly your business is in a completely different game. And it's not one that we recommend people playing. There's just more peace and more control to go slower and move at the speed of cash that gives you a quality of life that is so much better. And it's not that you can't be successful. It may take you a little bit longer, but it's not saying that you can never get there. And there may be some things you always will say no to. There's stuff at Ramsey that we could go

and buy this technology or whatever. And it's like, no, if we don't have the money, we're not, we're going to have to say no. We're have to figure out a different path, a different way. Yeah. I do wonder, Joel. what is it, and let me see if I can answer this, ask this question clearly. What is the increase that you would need, like, monthly and operating costs to do what it is that you're trying to do? It's hard to say that exact amount piece that's different from job to job, but a lot of these jobs, if I'm quoting them, I'd need to have finance probably $200,000. So I'm wondering if this is something where we can go, we need, like, a replenishable stash of money that is, like, kind of there for when opportunities come, we can go over there and say, oh, this job is worth it.

If we do it, there's going to be such a gain from it. And you're kind of so over the next however long it takes you, you're working to kind of build up this money that's there to be able to go out and do other work. And if you're able to grow slowly doing it that way. Does that make sense? It's almost like you're saving. It's almost like you have savings that's ready for when these great opportunities come up that you can go do them.

and then when you do them, you're replenishing that money, plus you've earned money, right? Something like that. Okay. So, yeah, right now I got a good amount in the bank, but I always like to have a certain amount of this, too, to have that comfort zone. Right. How much is in the bank right now? Around 100,000. And I'm saying, what if you went well above that and you had the money to do the work when it came?

Like, you had the money to explore different opportunities in cash when they come. Yeah, yeah, that's definitely an option. It does take me longer to build up to that point. Exactly. And that's kind of what I wanted to like put legs to what Rachel was saying. When we're saying build slowly, it's not to say that this is the business. It never changes, but you're saving up the money to be able to do more over time versus versus you're just taking out the $200,000 loan to do it. Let's save up $200,000 over time in the business.

Now we can afford to do more of these things that come our way as our way. opportunities. Yeah. And, you know, the calls we get Jade on the show of small business loans and things that go awry and it's like, you know, I got $200,000 and the business went under. I'm not saying, it's going to happen to you, Joel. But I mean, it's just this element of like, what are you going to choose? Are you going to choose a slower road, but that's full of peace and autonomy eventually of over what you need in the business. And if you need to make a pivot, you have the ability to because you own it all. Or is it that I have to be making. payments and now I'm living a life where I'm attached to this banker and what is expected. And

it's just a totally, it's a different game. And it's one that we teach people to get out of and steer away from than head right into. Yeah, absolutely. And I mean, there's something to be said for. His whole life has been built on cash and look how successful he's been. Yes. When you see like best practices that are working for you. Like keep doing that. Yes. That's right. Absolutely. stay the course. All right, let's go to Christine in Connecticut. Hi, welcome to the show. Hi, Jaden, Rachel. How are you? We're doing great. How can we help? So, I remember that my parents never mentioned about having life insurance the minute we get married. But I recently, well, recently I got off from this life insurance because it seems too good to be true. But the problem is, I don't know if I did

the right decision and there was the national life group that I was in. I am new to listening to Ramsey so I'm like learning and I guess you can say I am on baby step too. I mean I am trying to pay off all my loans because I'm tired of it. Good for you. What kind of insurance did you get? Do you say life, what kind of life insurance, whole life? Yeah, it's like the, what is it, life insurance about the, the, when you're spouse die and all that, the death thing. Hold on. Yeah, because they said that I got pre-approved for $250,000, but I kind of seem like it's

term life insurance, Christine, or is it like universal life or whole life? So it's an index universal life. Okay, so it's a type of whole life policy. Okay. And so you got that. And how much, how much are you paying per month? this. So since I started with me and my husband, we were doing 200 and 200, so it's 400 in total. Okay. A month? Wow, that's a lot. Yep. So what, yes, it is. So Christine, what this is, is they basically

pair some type of this investment element to the insurance. Okay. So a rule of thumb to remember is always keep your insurance and your investments separate. The moment they combine them in a product like this, you get a crappy rate of return and you pay a lot for not a lot. I mean, $400 in and you're only getting $250,000 versus if you did term life, and let's say you got a 20-year policy, depending on your health and age and everything, it's very inexpensive. I mean, a fourth of what we're talking about here for way more coverage. For way more coverage because it's just insurance.

They're not trying to play this investment game on the side. So what I would do. is do you guys have kids? No, we don't have kids. Okay, so what I would do, Christina, is I would cancel the policy, and you may have to pay some fees and all of it to get out of it. Cancel it, and then I want you to go to Xander Insurance. So go to zander.com and look up a term life insurance policy, okay?

Term is your key. 20-year, and you can do that. Now, if you had kids, I'd say get the term first, then cancel the universal. But at this point, I wouldn't worry about it because there's no kids involved. But I would do it all back to back. So get life insurance. You guys need life insurance. But man, get out of this whole life because it is a crappy, crappy product.

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The Ramsey Show Question of the Day is brought to you by Y Refi. If your private student loans are in default and you're not sure what to do next, why refi can help you explore refinancing options with low fixed rate and a payment plan that's based on what you can actually actually afford. Go to y-refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey may not be available in all states. All right. Today's question comes from Gina in North Carolina. She says, at what point does it make financial sense to give up our 3% mortgage rate and move? We're considering moving because the cost of the HOA is $400 a month. It is doubled since we moved here five years ago, and I anticipate it will continue to do so. We will

would be moving to a home with a new mortgage interest rate of over 6%. I know we're building equity if we stay, but I feel like we can never really pay off our house if we continue to live in our current neighborhood. Okay, so this is a good question, and I'm thinking about what you're thinking about, Gina. HOA's, yeah, there is an unknown there, and I would, I feel your pain on that. So it's gone up $250. It started at $250. now you're at 400 or start at 200, now you're at 400.

I would run some numbers on this, though, because if you move and now you're at 6%, you might be paying that same amount, basically. Do you see what I'm saying? You're almost like just moving it from one area to another area, but either way, you're paying the $200. And rates just went back, went up this week too. So we don't, yeah. So playing the rate game.

Yes. And insurance could cause your payment to go up. That's right. Any of those, all those things have the ability to adjust over time, which is why we're such sticklers about that 25% rule. Yes. To give you breathing room to be able to absorb some of this. And the hope is that you're moving forward in the baby steps and you can absorb it in a better way as you go further throughout the baby steps as you're paying off your mortgage. So I don't have all the details of our numbers, but just looking at this, I'm like, I would not move from 3% to 6% because of a $200.

are changing your budget. That's right. That's right. A hundred percent. Unless you were wanting to move anyways and you had the money to do it with the new interest rate, the money payment and you wanted to, don't wait up. Like the best time to buy a home is when you are ready to buy a home. So if you guys are wanting to move and you have the money for it, but you're just like, oh man, I don't want to give up the rate. That's what a lot of people. I mean, a lot of people are just like, I don't want to give up the rate, so I'm not going to move, which is fine, totally understandable. But if you have the ability to and you want to, that's the part of being wise with your money is you get to make these decisions.

But if it's only because of the $200 HOA fee at that point. I wouldn't. And you can also, too, look at things going on in your neighborhood that'll speak to why the rates may have gone up in that way and kind of projected. It's probably going to be like this for a while. Or do you know what I mean? You can sit down and if you dare attend one of the HOA meetings

and find out what's going on over there. But unless for some reason the 3% house, that you already have is like stretching you guys to the gills and you're like this just really threw it over the edge. But then you couldn't afford a 6% anyway. Yeah, yeah, yeah, yeah. So, that's go to Grace in Las Vegas, Nevada. Hi, Grace. Welcome to the show. Hi, yeah. Thanks, Rachel and Jade. Thanks for taking my call. Absolutely. Did I, this is Grace, right? Yes. Okay, perfect. Okay, good. Sorry, I think I may hit a different button. Sorry to the booth. Okay. Yeah, how can we help? So, question about inheritance. So I don't know how direct I need to be with my dad and asking about

our inheritance. And long story short, my dad has four kids. The three, you know, grew up in the household. I did not. You know, I grew up in the States with my mom. So I've never been entitled to any of that stuff and it's fine right I've made my own way I told the screener I'm a baby steps millionaire thanks to you guys wow good for you thank you

so I was always led to believe sorry if I get emotional but there was hundreds of thousands of dollars which I didn't want to fight for right like I don't want to fight for you know like 50K it's not going to change my life anyway I got a phone call this week and it might be more

in like the millions of dollars that this inheritance might be. And anyway, I'm just like feeling conflicted because, you know, two of my siblings are trying to get me out of the will. You know, my dad's starting to get dementia. But I guess as the will stands, I'm supposed to get the house and some money. So again, like I was always of the camp of I'm not fighting for this. Like it's not something I expect, you know, at the time I said it's not going to change my life.

But now that it's, I don't know, a life changing number. I don't know. Am I being greedy? Like, should I pursue that? Like, I just, I'm struggling. Like, I couldn't even sleep last night trying to figure out what I should do next. Do you have any relationship with the siblings at all? I do with one.

The oldest one has kind of been on my side of, like, hey, this is about fairness. Like, it doesn't matter that, you know. She's not like, she's our half-sister. So, anyway, yeah. So just with one. The other two, it's like friendly, but, you know, I mean, they have put me in my place before of, you know, your like that midlife mistake. You know what I mean? Oh, gosh.

See, and that's the part. Grace. Grace, I hate all of this for you so much. Like, it sounds like there's a lot of emotions. It sounds like there's a lot of water under this bridge that has gone on. And I feel like that's what's clouding this discussion. And I get it. I'm not saying you wouldn't be clouded by that because there's a lot there just in the few things that you've told us. But what I would want to keep first and foremost is what you said, which is you were going throughout life and you were fine with your baby steps millionaire doing your thing. And at the end of the day, whatever happens, I would just keep in mind it's not yours nor your siblings money at this point. It's your dad's money. and he's going to make a plan that he sees fit. Now, I do want to know, whatever it is, like, these bits and pieces that you guys do know about the will?

How do you know that? Is that from your dad's mouth? Was there at one point a reading of the will? Or is this just jibber-jabber from the family? It's from my oldest sibling. So I got a call, like I said, and she was, sorry, I'm getting emotional. But, again, she said, so anyway, there's a lot of properties involved, right? and pretty much they're getting the lion's share.

And it's basically a home. How does she know? How does she know? Because she knows what all it's worth. She kind of had her hand in all these things. She helped him make the will? No, she, I mean, she is, she knows what's in it, basically. She didn't make it.

But she said, yes, basically, you know, you're supposed to get this fourth home, plus, you know, whatever is in the bank. And they're trying to make it so you don't get the home. home and, you know, it basically goes to the grandkids, which I don't hate that either, right? I just wouldn't bet on what she's saying. I think I would go straight to your dad and I'd say, dad, talk to him. Your health is going. We all know that. But you need to, I would love if you would speak to us about what your final wishes are going to be with the property so that we're hearing it directly from you and with the spirit of what you have in mind behind it.

You know our family is messed up. And it's, it's. It's going to mean a lot to me to hear your wishes from you versus one of my siblings. That's all you can ask for. Okay. So just address it straight on. How do you bring that conversation up, though? Without entitlement. Yeah, a lot of gratitude and humility.

But just say, Dad, this is starting to weigh on me. And because it's getting dragged so deeply and it's starting to feel really personal. And I don't want it to be. I hate that it is, but this is what I'm feeling, and I just think it's going to be helpful and best for you, Dad. You've worked really hard. You have a lot to show for it, and I want your wishes to be what they are. And I think that it is, it's fair for all of us to hear those together, just for your legacy to be able to be lived out the way you want it to be when you're not here anymore. And yeah, I mean, I feel like that, I feel like that is totally fair. And I would also say to

Grace, at the end of the day, does it feels, I think it's, yes, is the amount of money maybe becoming more motivating for you to be like, whoa, hold on. But also, what can easily be attached to someone's value to an amount of money. And Grace, regardless of if you get this money or not, you are valuable. That you're not some mistake, midlife, mistake like what they're naming because it can easily, you're going to start to feel like if this money does not come to you, you have less value because of that. And I would detach that from a spiritual element as fast as possible because it's just not true. Will it be heartbreaking? Absolutely. But your value is still there. If you own a business, you know what a pain it is

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That's ZipRecruiter.com slash Ramsey. Meet your match on ZipRecruiter. Welcome back to The Ramsey Show and the Fairwin's Credit. Union Studio. We're taking your calls at AAA 825-5-2-2-2-5. Let's go to Rachel in Riverside, California. Hi, Rachel. Welcome to the show. Hi. Are we just asking my question? Yes, yep. What can we help you today? Okay, so I'm 54 years old and then a widow. I've been a widow for about six years. Prior to my husband passing away, I was a stay-at-home mom for 17 years. So I immediately got a job. And I've inherited his IRA.

I've been working, but works really slowed up. So I'm trying to think about doing the 72T and start with drawing some of the money that I have. Okay. And you're 54. Yeah. So not quite to that 59 and a half to avoid the penalty. So what are you doing for work now? Right now I'm still trying to do the real estate, but I've taken some time off because it's just been really stressful.

I jumped into work so quickly after he passed away. And now I feel like it's hitting me a little harder. Yeah. Are you there, Rachel? I was kind of scared. Yeah, because I was kind of scared when he passed away. For sure. And so I just immediately started working.

Now, I have a pretty big IRA. Yeah, why are you thinking you need to, I mean, if you've got the job now, how, why are you thinking you need to start doing this? Okay, but what kind of work is it? Real estate. Okay. So I would go more along the lines of, is there other work I can do versus trying to draw from this retirement earlier through a 72T? Well, I didn't have a lot of experience before we got married. And then I didn't work for 17 years. How much is in that account? Almost 1.8 million.

1.8. Okay. And how much are you needing to have per month to live on to feel good and secure? just a couple thousand dollars a month and I have money in my savings but I hate to deplete that is your savings um is it like in a high yield savings account or is it your IRA that you're talking about how much is how much is in there about 200,000 okay okay because listen richel I'm just trying to figure out and I paid off my house oh my gosh amazing wow that's great see I'm just I'm just wondering how we can fill the next five years or so yes um And if you, you know, I mean, like if you pulled 2,000 out every, I guess it'd be every month is what you're saying that you need. Yeah.

Yep. So, I mean, I'm just thinking because, I mean, if you did that and you pulled 2,000 out, I mean, it's going to be over 100,000 will be gone from that savings, which is not the end of the world. You got 1.8s in an IRA that you can live off of two, right? So it's not the end of the world. I'm just wondering, can you supplement instead of paying, you know, pulling? 2000 out a month. Well, yeah, it kind of screwed up. I had gotten some job offers.

And then I turned them down because real estate was really booming. Yeah. That's okay. And now it's like, well, do I try again and put it out there again and try to get back? I would, Rachel. I think you are a lot more competence and marketable than you realize. I mean, you've been doing real estate in California. You're, I mean, I think you have a lot to offer to something.

And again, you're not needing this massive $300,000 a year job that you're trying to look from corporate that you're trying to replace. Thank God, because you've done so well with your money, though, that gives you the freedom to feel like, okay, I don't need to take this. I don't need to be looking for this needle in a haystack type job. I just need something that I enjoy. I mean, it'd be amazing to find something that you love, Rachel, that you could plug into or an environment that you love. I don't know if there's, you know, a great church and you work part time there, part time. time somewhere else or maybe there's um i don't know i'm just saying like a receptionist at a dentist office nearby and you know what you mean like you find a group of good people somewhere that's a it's an

uplifting environment for you and again you're not you're not having to make too much money it's just supplementing no some of this supplementing yeah it's just i'm pulling from my pension that i had before okay it's just a small amount but i am able to pull on that from a job i had prior to getting married how which comes in a month for that? Just like $700. Oh, okay. But it helps. But you are going to need some money to, I mean, realistically, how much extra?

You said a couple of thousand. Be more specific for me. Well, I am writing out of room, so I'm getting $1,500 for that. Okay. So I figure my bills, since I don't have a mortgage, my bills are really minimal. I don't have any debt at all. Yeah. What does it cost you every month to just operate your life?

About $3,400. $3,400. And then... $3 to $400? No, Rachel. $3,400. $3,400. Okay.

I was like, Rachel, Rachel. And so you've got the $1,500 from the room rental, the $700 from the pension, and then what, I mean, obviously real estate is slow, but, I mean, could we close that gap pretty... I mean, you're more than halfway there. I could, but just to stress. of real estate spend so much for me. Yeah, and I'm not saying it has to be real estate, but I do want to lay this out. Like, if you were to draw from this early doing what you said, if you did do a 72T, it's not just I get, I get to pick the amount that I want and I can do it for a limited time. The IRS is going to calculate, the government's going to calculate what

works for you, and you're locked into that. You're going to be locked in for at least five years. So if something does change, you can't increase it, you can't decrease it. You're locked in. And if for some reason that calculation something changes in your life and that calculation no longer works, you could, they could go back and say, well, actually, there's a 10% penalty here. And actually, that wasn't the right calculation. So it's kind of a precarious thing. So I would pull out of the high yield if you have to do anything. I would leave the IRA alone. And the high yield is where I would pull some money if I need to. But I'm thinking about this too, Rachel, of just, you know, you're 54. I think just having a place to go, waking up and morning having a purpose, having something that you're going to is really good. It's like a very healthy thing. So I feel like you could find something and make $2,000 a month, you know, doing that. And maybe it's, and it's part time. That's not a full-time job. That's part-time. But like two to three days a week, you got a place you're going. You're making some money. And I just think that's a, I think that's a good mental health play for you. And then I'm totally okay if you look up in

three years and you're like, you know what, I'm going to retire and go be with my kids over here or whatever, you know, and you got two years that you got to pull from the high yield savings count. Do that. You can do that. You have the margin to do it. But I just think it's good for you to go find something with purpose in your life. Yeah, I guess I'm just scared because I haven't worked outside of, you know, I haven't had much work experience. Do you have kids? They're older. They're all grown up. Okay. Where do they live? Two live here and then the other close to me and the other lives in Texas. Okay, great.

Yeah, I mean, well, what do you love to do, Rachel? Do you have a hobby or something that you just love? I used to. I don't know anymore. I used to volunteer a lot, but I haven't really been doing that. Yeah. Yeah, I mean, honestly, I mean, honestly, I'm like, you go work at the library. You know, honestly.

I don't know, just anything that you're out with people, you're making some proactiveness in your life and making some money. I think it's good. You know, Rachel, if you hold on the line, Christian, it's going to pick up, and we're going to send you Ken Coleman's book, find the work you're wired to do. And again, I'm not saying you have to have a full-time career by any means, but let some creativity kind of jog your mind. And, you know, there could be some great things in your area that you plug into. You get paid a little bit, which sustains your life. And it's a beautiful thing. Yeah. It's a beautiful thing. Hey, it's Dave Ramsey. If you or someone you know owns a

small business, listen up. What if you could build the kind of business you'd be proud to hand down to your kids? Over 30 years, I've been able to build Ramsey Solutions into a business that's going to be a blessing for my kids. I'll show you how to do the same thing at Entree Leadership Master Series November 8th through the 13th. During this five-day conference, you'll get my strategies for building a winning business that outlasts you. Ramsey Solutions.com slash master series for tickets or click the link in the show notes. When it comes to looking at your money and your lifestyle, even just like with our last caller, you know, knowing where your money's going is so crucial. And every dollar is an amazing app to

help you with that. Not only is it a great budgeting tool in it, but also just your overall financial picture and the roadmap of how to get you to point A to point B, it is there to help you. And so every dollar is, it's one of my go-to apps every day. I mean, I'm in there almost every day, you know, tracking transactions and looking at everything. And so it really does have an amazing way to walk right beside you when it comes to your money. So if you want to find some hidden margin and take control of your money, make sure to check out every dollar for free in the app store or Google Play.

All right, we got Julian in Omaha, Nebraska. Hi, welcome to the show. Hey, how's we going? Doing great. How can we help? Okay, yeah. So I'm basically looking for some guidance about saving for college versus investing in a Roth IRA. Okay. Is this for you or for a family member? This is for me. So I'm 17 right now and turned 18 in two months. I just started working at a bank and basically they have a pretty good deal for me so that every 6% that I contribute to a Roth retirement account, they'll now. match it with for 5% and I'm immediately invested.

I'm also going to be graduating May with my associate's degree in business. And I want to go to college after that in state. I think I'll be able to get a lot of scholarships and my parents will help. So my goal is to graduate with little to zero debt, but I'm not really 100% sure about that. And I will work during college. Do you know what college will cost? Each semester?

So I was, yeah, per semester, it was about 14,000 because per year was 28. Okay. But that's basically the figure price. I think we can probably work it down a lot from there. So 28 per year, that's 2000 or so, a little over 2000 a month. Do you see a plan for that? Cash flowing that? Yeah.

The FAFSA opens tomorrow, so I was going to fill that out. I think my main goal is to just work hard and get a lot of scholarships, and I think my parents will cover maybe room and board. It's not confirmed about that yet. But I think, I feel like with my ACT score and GPA and me going to like an in-state college for only two years instead of four, I was just kind of thinking why my student aid wouldn't need to be as much for my overall costs. Sure. Yeah. I mean, Julie, I think your mindset is perfect in the sense of I'm going to be applying for scholarships and grants. One little asterisk, though, the FAFSA can be very confusing. And some people end up signing up for loans thinking their scholarships. So read the fine print, be extra, extra careful. I'm like, oh, my God. And I don't even say kid, young man, very, very mature. And I think your parents, I mean, they obviously know you well. You're their kid. And I think sitting down with them this weekend even and saying, hey mom, dad, I'm planning out my college life.

I would love to know just, and, you know, with zero expectation, but I just want to know the plan for college on your end, if there is one, just because I'm planning so that you know, so that it's not kind of, I think they're going to do this, they may, they may not. Get a kind of a solid number from them. And then from there start, yeah, filling out scholarships and grants, see what you get, you can work. And I think you 100% can work your way through.

Now, the prospect of what the Roth, is probably a Roth 401k at the bank. I'm assuming because they're doing a match. And that's a great deal. But I would not do any kind of long-term investment right now. I would be concentrating on investing in yourself. And that is getting yourself through college debt-free. And there is plenty of time to invest and build wealth. I promise you.

You are going to be fine. If you didn't do this for two years, you are going to have millions and millions of dollars at retirement. I just have a feeling if you're going to start early and it's going to be wonderful. But I want you to get, I want your number one. goal to be to get through school debt-free because that will set you up then to be able to go straight into investing after college and not have to go backwards and pay off debt. Yeah. Because to your point, there is going to be the 28 per year is just face value. You might

need a car. You might need an apartment. There's going to be cost of living. And then right after school, what are you going to be getting into? You'll need to, you know, so having money, if you have extra money saving it just in a high yield versus trying to invest it. So you've got. that liquidity of getting to that money when you need it. Yeah. So I was going to ask, like, so you think I should just stack cash for college, not touch, like, the Roth match at all? And then, so for my college savings account, do you think I should save it all in, like,

a high-yield savings? I would. Right now I have everything, just like a basic savings. Yes, I would move it to a high-yield savings. You can check out our friends at Fair One's Credit Union. They have, you can do up to 10 high-yield savings accounts with them and with the smart bundle. So check that out if you go to fair ones.org slash Ramsey

And open up that. I think that's a great starting place. And yeah, because if you put anything into a Roth, like a 401k or an IRA, you can't touch it till 59.5. Anyways. So I want that cash to be available. And you'll get around, I mean, it should be around 3% now. Maybe I'm not sure I haven't checked rates, but even a little bit more this week.

Everything's kind of been crazy. So you'll get much more in a high yield. even 3% more, you know, than basically less than a percent in a traditional savings. Yeah. Okay. Well, perfect. That mainly answers my question. Awesome.

Well done. Gosh. I love how his mind works. Smart cat. I know. Smart guy. All right. We got Elaine in Sacramento.

Hi. Welcome to the show. Hi, Jane and Rachel. How are you doing today? We're doing great. How can we help? Good to hear. So I have a quick question.

We, my wife and I, we are currently on baby step two and have it mapped out to where will be paid off within 18 months. Great. Congratulations. Thank you so much. Shortly after that, we intend to list our home. And then it's a three-story town home. We have a kid and a large dog looking to expand the family, so we want to move into a single story.

And so our question is, as we're paying off our debt, are we closing our accounts if we intend on purchasing a home right around the same time that will be debt-free or is that going to hurt us? that's for the, you know, because we wouldn't be able to do the manual underwriting process at that time. That's a really good question. The credit cards, that's the end of all consumer debt. There's nothing else open? Correct.

Yeah, we don't have, I mean, in this 18 months, we'll have paid off the student loan as well. It's just one single loan. And I think it's totaling like six or seven thousand. Okay. And all accounts would be closed. because what I'm getting at is, what I'm getting at, and we can work backwards, is your credit score, it usually takes like six to eight months to roll to zero. And that is making sure every account is closed. There's no balance anywhere.

If you have a random credit card open somewhere, it's not going to roll to zero. So that's kind of the game you're playing. You want to make sure that everything is closed so that that has the ability to happen. And then from there, you would be able to do manual underwriting. Yeah, because it has to be undetermined that credit score. So basically the credit score can't exist, like what you're saying. You know this because you mentioned it. And the beginning of the call to do manual and during, but it takes, it's going to take, yeah, probably six to eight months to do that.

So it may pause your plan to move for about six months. But at the end of the day, honestly, that is worth it. And it's going to probably take you guys a little bit to save up an emergency fund and a down payment. You know, and you may have equity that you're rolling over to. But you could use that six months to pile up. a lot of cash to have for a bigger down payment and an emergency fund. So by the time it all is said and done with the baby steps, by the time you get to 3B, you should be good to go. I mean, how much equity do you guys have in that condo? I mean, at this time, the neighborhood that we would

break even if, you know, if we're like that. Okay. So you do need a save for a down payment. Well, and that affects what we're saying because I was, I don't know why I was thinking that you're renting right now. Your credit score is going to remain there because you have a more attached to it. That's what I was, that's really where I was getting it. As I, you know, we can close the account's no problem because we don't intend on using them, but having it's not going to go to zero. That's true. Yeah, yeah, yeah. It's not going to go to zero. So what I would do, just go ahead and pay off the cards. It's not going to, it's not going to take your credit in the way that you think because you have such a major asset on there, your mortgage that you're paying on time every

month. You should have no problem in the world moving from that. My husband and I had a mortgage, it was the only thing we had. When we moved here, we got another mortgage. And so it was no problem. If you're paying your payment on time, you'll be fine. Yep. But congrats on the progress, you guys. Well done. It's exciting. People ask me all the time. George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the every dollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending. And from there,

it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average every dollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download every dollar for free and start saving more money right now. So one thing we love to see is the comment section. Sometimes we venture in at Jade. At your own risk. At our own risk as the hosts of this show. But But we do love to see you guys talk about it and talk through the calls and all of it. The engagement is part of the fun and all of this.

So we love it. So make sure you're subscribing to the channels. Make sure you are commenting. And, yeah, get in there. Because I think it's a fun element of, it can be a negative part of the Internet for sure. But it can also be a positive part. And callers we see sometimes, you know, they're like cheering on other people. And it's great.

So get in there and engage there. on especially with YouTube and even you can follow me and Jade on all social media's TikTok and Instagram and Facebook and all of it. And I'm definitely in those comments. Rest assured. We see those. We can see those. All right, let's go to Melissa in Tampa, Florida.

Hi, Melissa. Welcome to the show. Hi, thanks for having me. Absolutely. How can we help? I just wondered if you had any guidance or advice on how I can talk to my dad. about planning for the future, specifically why he should put his assets into a trust versus just leaving me with a will.

I've tried to have conversations with him in the past, but it always feels awkward, you know, and I kind of feel like I don't want him to think that I feel entitled to it. Or do you know what I mean? I just, it's not a comfortable conversation. For you, what's the difference? What do you see the push for a trust versus a will? Does he have a large estate? Yeah, he does.

I mean, in my mind, he does. Like, to me, he does. I don't exactly know the numbers. What would you guess? He has at least a couple of millions. I mean, he, I know his house alone is worth close to a million and it's completely paid off. he has multiple multi-unit rental properties that he was borrowed against his 401k when he was younger, and so those are now paid off.

So he was able to retire, you know, in his early 60s. And as far as I know, he doesn't really have to touch his retirement. He just lives off of the income from the rentals. So, um, does he have, you know, I'm an only child. Okay. I'm just wondering. Because a will can be sufficient enough. I'm curious why that's not good, like what you're seeing.

It's like he really, he really needs to do a trust versus a will. I'm just curious what you're seeing. Yeah. I, I've just heard like, um, I have a couple of financial advisors like in other parts of my family and they've always just said like, you don't want to go through probate and, you know, the government's going to take, you know, 30% of, you know, of your money and it's just a hassle and it's just all these things. But then I mean, if I were in your shoes, the thing I'd be worried about for me is if you had like a minor, like if you had a young

child and he was intending to leave a large sum that he would get at 18, like those are the things that I'd want to say instead of just willing him this money that he receives at 18, can we do a trust where it pays out a, you know, a more reasonable time? Those are, the things I'd be thinking about. Okay. But if that's not part of this, honestly, I don't see why he couldn't have a will. I mean, yes, it will go through probate, but the state won't decide. The will will decide.

And it doesn't take 30 percent. Where are they getting that number from? Okay. I don't know. No, I don't think, Melissa, I don't think, I don't think it's anywhere near 30 percent. I don't think so either. Okay. Okay, so there may be just like exaggerating with me.

But yeah, I think so. My concern, he does have a will now. I will say that is that I've been trying to have this conversation with him for probably 10 years ever since I started working in health care. I saw a lot of, you know, a lot of things happened to my patients that I went to both of my parents who were separate and said, you know, please get stuff in writing. And it did a really long time to get him to get a will. his third wife, you know, finally they did that separate but together. And, you know, my concern was that, you know, he was getting married multiple times. And, you know, that was my concern about having a will.

But now he's divorced again. So I've just said, Dad, if you get married again, can you please get a pre-year? Yeah, right. Yes, which would be, yes, which would be smart on his end. Yes, going on the third wife for sure. married. So, you know, I guess the other side of like me wanting him to get a trust or an LLC for his properties is that, um, like I'm worried about liability because for him if something happens, like I feel like we live in such a Sue happy world that I just have, you know, I have like this

horror story in my mind of like him getting into a car accident and somebody, you know, trying to, like if his properties are part of his personal assets and not particularly, you know, protected by like a trust or an LLC that they would like, you know, try to take those things from him. That's fair. Part of that's fair enough with the properties. Yeah. It means a lot of real estate.

An LLC would probably be smart for him to set up just for his own protection too. So if something happens at one of those properties that, you know, the renter or whoever can't sue him personally, they're going to have to sell the LLC. So there's ways to do that. But that's from my understanding, and I don't know Florida law specifically. specifically, but from my understanding, it'd be more for his benefit while he's alive than even at his death. But yeah, I mean, setting that up would be smart. But no, and I think it's, I think on like a $2 million estate, I mean, maybe $50,000 or something through fees and different things,

through probate, maybe, but it's so minimal. It's, it will not be 30% by any means. Now, now there may be an estate tax, but that's over like, you know, tens of millions of dollars at that point. Yeah, 15 million, I think is the, yeah. Okay. The people that are the, you know, financial people that I know have just made it seem like it's going to be so difficult for me to like do anything

with his properties or manage them or, you know, it's going to be such a long process to go through probate and all those types of things. But I'm not really, it's not about the money to me. Like I've even told him if you don't want to leave it to me, leave it to my son, you leave it to the next generation. At the time he was married. So I was like, please,

just put in in writing. Yeah, yeah, yeah. Now, I will say if all the properties were in an LLC and through a trust or something, I think the people that are advising you, that is right. I think that would be a smoother transition. But it's not like it's that it's never going to happen. It may be a longer process for sure, especially if there's multiple properties. So there will be some work on your end.

But I don't think it's not the end of the world. I would not lose sleep over it by any means. No. Okay. Yeah. And I probably would just tell him to leave everything to your son. I think you want to have more say in what's going on and how, if that's the case, because you don't want your son to inherit $2 million at $18.

I mean, that's, yeah. No, no, of course not. I mean, you know, but I was just kind of like trying to, you know, that uncomfortable feeling of talking about it and you don't want him to read into something that's not there. Right. Yes. Yeah, yeah, or think that all you care about is his money. Like I would trade more years with him.

for all the money in the world. And he's known you his whole life, Melissa. He knows that's not true about you. He made you. Yeah, I know. I know. I just, you know, it can be an uncomfortable conversation to have. He's just, he's so smart with money and he's sacrificed his entire life.

And now he's retired. And I'm the one encouraging him. I'm like, go spend your money. Enjoy yourself. Totally. You're traveling. Like, spend it all. You can't take it with you.

You know, like I try to encourage him. encourage him to really let go and now enjoy it because a lot of his friends, his age aren't, like, you know, physically able, health-wise to enjoy the money. Yes, absolutely. Like, he's lucky and not fun. Yes. Well, you're a great, you're a great daughter, Melissa. So, yeah, I think the will is in place.

That's really great. Yes. If the properties were in an LLC, you know, and then that's in a trust, might be an easier process, but I think you're going to be okay. And if you want to know more, you can take the wills quiz, ramsysysolutions.com, Welsh will's quiz will tell you if you need a will or if a trust is better. Yeah. And you guys, listen to Melissa, though, for real, everybody needs a will.

Everybody needs a will. And Mama Bear Legal Forms is a great spot to do that for state-specific wills. But regardless of the amount that you have in your estate, everybody needs a will. Hey, George Camel here. We often talk about how being normal sucks when it comes to your money. But guess what? Normal isn't so great when it comes to your job either. Normal is staying in a job you hate, dreading Mondays, and working for people you don't even like.

Sound familiar? Well, the good news is you can break free from normal because Ramsey Solutions is hiring, and we refuse to settle for the ordinary. In fact, we are anything but normal and we are proud of it. And right now we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. So head over to ramsysolutions.com slash careers and apply today. Our scripture of the day is Proverbs 1425. A truthful witness saves lives, but one who breathes out lies is deceitful. And Frank said,

people can tell you to keep your mouth shut, but that doesn't stop you from having your own opinion. Oh, true that? Man, it's good. All right, let's go to Josie here in Nashville, Tennessee. Hi, Josie. Welcome to the show. Hello, thank you for having me.

Absolutely, how can we help? The biggest question that me and my husband can agree on is how can we get over the fear of losing everything so that way we can ultimately have everything that we want. Oh, wow. Be a little more specific. What does that mean? Okay, so he had quite a jump in income this year due to a job change and now we're finally able to pay our bills on time and not be underwater on everything or scrape by between, you know, groceries and live paycheck to paycheck. And it's definitely not change us completely, but now we have room to breathe and experience things that we want and, you know, be able to go out to dinner if we want to.

Yeah. But we do have, we have a little under, right around $100,000 in debt. And we want to, we want to be able to actually have everything that we want and set up our kids as well. Right. Okay. It's just, I think it's just the fear of actually. not having that extra money now.

Well, how would, since we've been used to it? What would be the main thing that you'd be sacrificing? I mean, I'm thinking about things like, yeah, going out to restaurants, maybe like entertainment, things on the budget that you can cut back subscriptions. What are, is there something bigger and concrete that you're seeing yourself sacrifice? Is it vehicles? What are you saying? I don't know if it's necessarily anything concrete.

I think it's just us actually having a cushion in our savings now. just in case. Ah, so it's taking the savings. Okay. Okay. Yeah. Okay, so how much? We're going to.

How much is he making a year now? So he's on a 1099. So, and with the job that he does, he's a tour bus driver. So some months he could be around $4,000. And then depending on how many tours he does, it could be around $12,000. Okay. So it's a pretty big fluctuation. but it's now that we're able to save money,

we're scared to get rid of it, to put it towards our debt. What does it take, just your minimum kind of bare bones, normal month budget, what's it take for you guys to get by? About 3,900. Okay, so we'll say 4,000.

So just to start this thing off, because his income is so variable, like the first step I would take for you guys is to have like a peaks and valleys, account because there is so much variation and right with the baby steps you're taking every bit of extra margin and throwing it at the debt so on a month where he makes 12,000 right you want to be able to have that extra to throw out the debt but you're not going to feel comfortable to do that unless you have a peaks and valleys account that has another 4,000 in it right so I would do that and then I would

go from there I mean how much you guys have in savings right now um so we we just recently opened a second checking account to put all of our, like our bill money into our rent and our car payment, his motorcycle payment, insurance and everything like that. And we've fully funded for October. And then in our separate savings, we have 800. Okay. Gotcha. Okay. Do you work at all? I don't. We have two kids, four and two. Okay. So work inside the house. Go ahead, Rachel. Well, I'm just thinking, I'm trying to map out for you guys, because $100,000, it's all consumer debt, right? So about $60,000 is student loans, which I'm still in school. I do online college.

So I'll end around September of next year, and my student loan should be around $60,000. Okay. And then we have my car payment, which is around $8,000 is a total. And then his motorcycle is $14,000. thousand. And then we moved and we started renting this place and we didn't have any furniture. And we got into one of those rent-a-center payments. So now we owe on our furniture. Oh, and it's still rent-a-center? Yeah. It's like a local company that does it like that and we pay on it weekly so we don't

lose our couch in our refrigerator. But you never own it, right? It's just rent to own. Like it's just rent. We do own it. After we get on paying it, we will own it. And how much is that? total is about 1500. Okay. And he doesn't have a car. He just has the motorcycle. There's not another vehicle? Yeah, correct. Just the car and then my car and then his motorcycle. Okay. So did we get it? Is there anything else? 14 and 1500? Anything else? So I have a car that was, it was a lemon and it was repossessed and I had planned to work something out with the bank a couple years ago. Well, they finally, you know, they took me to civil court and all that, and I'm paying on that monthly as well. And it's about 11,000.

Okay. Okay. There it is. Okay. So, I mean, Josie, really what it comes down to is I think you guys having that separate account is okay for now because his income fluctuates so much. So I'd get that 800 up to a thousand. And then from there, man, anything extra you can throw. Like, if he has a great month, you could throw eight grand and get some of this stuff

knocked out. mean like you can make some big progress in some of these big months and when you map it out i mean it may take you guys 18 months or so to kind of get all of this squared away but it's not going to be forever so just as quickly as this income changed i almost would go back to the mindset uh knowing emotionally though there's a cushion because if something happens the truth is if something does happen now an emergency and you got a three grand thing they're like crap we got to pay for this you have the money to do it right Like you could cash flow it through that month if you had to. You could pause paying off the debt to cash flow.

So that's the beautiful thing is that the money is there if you need it, right, with this great income. Yeah. But still have the habits of how you guys were living paycheck to paycheck so that anything extra on a month where nothing happens can be thrown at this debt. I mean, you guys should pay off that furniture. Gosh, next month. Yeah, no. It's so on. Joe seriously.

Seriously. Like get some aggressive goals. I think once you kind of start seeing that momentum and stuff starts getting checked off, it's going to feel great. You're going to feel a lot of freedom. Does he have a guarantee on his pay? Like, is he guaranteed at least the $4,000 and then it can go up from there? Or is there no guarantee?

No, there is no guarantee at all. So it's really just, you know, if the company gets a client that rinse off the truck, then the client will need a driver, then he can go on that tour. Okay. So it's no guarantee. There could be a month, you know, like, because we were planning to try and, Go ahead, because he's on a really long tour right now where he's going to be making a substantial amount where we could fund all the way through January for our monthly expenses. So we're going to try to do that just in case, you know, he doesn't have anything in, you know, in between the holidays from December and January.

I wouldn't do that. And I was going to actually ask about that because there is such a fluctuation. I'm also thinking there's freed up time there too. So I feel like probably the third piece of advice in your list of homework would be. what can he do if he has a month that he's not doing all of those tours that equal up to $12,000 or $13,000, right? If he has a $4,000 month, what is he going to do with that time? Or if there's an off season, what's he going to do with that time? And I think that's a really important part of this equation because if you don't, you are going to tie up a lot of money, kind of earmarking it for future months. And I don't want you to do that. I think if you have that peaks and valleys account, you get one month in that.

And then if you're having a situation where there's multiple. months of not making bank, then that means we need a secondary job or we need something else coming in regularly. To supplement that income. Right. Yeah. I think the biggest thing was just we finally got comfortable for a second and now we're scared to kind of start all over again. Even though we know in the long run it's going to feel so great, we're just, we're scared to give it up right now. Yeah, I hear you. But also there's a little bit of the false security because you still have all this debt. Like you guys oh, $100,000, right?

What's scary? I didn't need to know it was that much until I started adding it up, and I was like, how are we like? Holy crap. Oh my gosh, yes. Like I felt like a normal person. Like, we've got my car payment. We've got this and that.

And I was like, it can't be that much. And it is. It is. Once you actually see it. Yeah. So I think sometimes there's a weird false security. If people have a ton of cash on one side, but tons of payments. Because if something happens, those people still have to be paid.

That's right. And so there's an element to that that's very real. So I understand that it feels like, oh my gosh, we can take a breath and that feels great. But listen, stay motivated to attack that debt, Josie. Stay motivated. Send her a copy of what no one tells you about money. Oh, yes, Jade's book. All right, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus.