The Ramsey Show - Winning With Money Is More About Hope Than Math

Episode Date: June 20, 2025

🔗⁠⁠⁠ ⁠⁠⁠⁠Share the Ramsey 101 Playlist!⁠⁠⁠⁠ Dave Ramsey and Ken Coleman answer your questions and discuss: "I was accidentally overpaid by my employer and now they want me to pay back $48,000." "Should I take over the car payment that my soon-to-be ex-husband is failing to pay?" "How can I convince my wife that we're set for retirement and don't have to make "the pie" bigger?" "Should I buy a boat?" "My husband says we can't afford a baby. Is he right?" "Should I continue working for my father or find another job?" "My husband wants to invest in gold but I want to invest in real estate. What should we do?" "How can I pay off my student loans at age 70?" "I owe $15,000 on my car and it doesn't run. How do I get rid of it?" Next Steps: ✅ ⁠⁠⁠Help us make the show better by taking this short survey!⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or ⁠⁠⁠send us an email.⁠⁠⁠  📈 ⁠⁠⁠Are you on track with the Baby Steps? Get a Free Personalized Plan⁠⁠⁠ ✔️ ⁠⁠⁠Help us make the show better. Please take this short survey⁠ 📱 ⁠Download the free Ramsey Network app! ⁠ 📈 ⁠⁠Free Tools & Resources to Help You With Investing⁠ 🏠 ⁠⁠Get organized and prepared to buy or sell a home 💵 ⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠ Connect with our Sponsors: Stop paying more and start shopping smarter at ⁠⁠⁠ALDI⁠⁠⁠ Get 10% off your first month of⁠⁠⁠ BetterHelp⁠⁠⁠ Go to ⁠⁠⁠Boost Mobile⁠⁠⁠ to switch today! Learn more about⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠ Get started today with⁠⁠⁠ Churchill Mortgage⁠⁠⁠ Get 20% off when you join ⁠⁠⁠DeleteMe⁠⁠⁠ Go to⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠ for an exclusive account bundle! Save 15% on your first ⁠⁠⁠Field of Greens⁠⁠⁠ order with code RAMSEY Find top Health Insurance Plans at ⁠⁠⁠Health Trust Financial⁠⁠⁠ To find out more about student loan refinancing, check out⁠⁠⁠ Laurel Road⁠⁠⁠ Use code RAMSEY to save 20% at ⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠ Visit⁠⁠⁠ NetSuite⁠⁠⁠ today to learn more Use promo code RAMSEY for 18% off at ⁠⁠⁠The Nokbox⁠⁠⁠ Learn more about ⁠⁠⁠Timothy Plan⁠⁠⁠ Get started with ⁠⁠⁠YRefy⁠⁠⁠ or call 844-2-RAMSEY Visit⁠⁠⁠ Zander Insurance⁠⁠⁠ for your free instant quote today!  Explore more from Ramsey Network: 💸 ⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠ 🧠 ⁠⁠⁠The Dr. John Delony Show⁠⁠⁠ 🍸 ⁠⁠⁠Smart Money Happy Hour⁠⁠⁠ 💡 ⁠⁠⁠The Rachel Cruze Show⁠⁠⁠ 💰 ⁠⁠⁠George Kamel⁠⁠⁠ 🪑 ⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠ 📈 ⁠⁠⁠EntreLeadership⁠⁠⁠ Ramsey Solutions is a paid, non-client promoter of SmartVestor Pros. ⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Brought to you by the Every Dollar app. Start budgeting for free today. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show. Where we help people build wealth, do work that you love, and create actual amazing relationships. Ken Coleman, Ramsey personality number one bestselling author and host of the new Ramsey Network's big hit called Front Row Seat. Oh, some long form interviews with world changers. You've got to be checking him out. He's my co-host today. Open phones at 888-825-5225. Rachel is in Nashville. Hi Rachel, how are you? I'm good, how are you? Better than I deserve. What's up? I have a very complex payment situation that I need advice for.

So we started, we took your class, my husband and I back in September, October, it completely changed our life. Um, we've been rapidly paying off debt, building up savings. However, in the month of October, um, I worked for a very large company. Um, and there was a payroll error where they accidentally paid me $50,000, 48,000 to be exact, gross payment in error. I told them before it hit my bank account, but unfortunately it was too far gone at that point. I, after taxes,

I received net 28,000 approximately 3,300 of that was my paycheck. And again, I told them before I hit my account, but they took so long to correct the error and get me my debt repayment letter. Now we're now 10 months in the future. And because it crossed tax year, they're asking for gross repayment, which is requiring me to come up with an extra approximately $23,000 of my own. And I've already been taxed on this because it was taxed in my 2024 tax return as well, which was additional money out of my pocket. They're offering to allow me to repay it in full,

which would be the full 48, which net 3300 of it is mine that I would have to repay back and I'm not sure how I'm going to get that back in the future but they also are giving me an option to deduct 15% from my paycheck until the debt is paid and I'm not sure what to do. We have the money to come up. So let me stop. If I understood you right, you don't owe 48, you owe 48 minus 3300. Well, net gross 48. No, I'm talking about that's the gross because the taxes were

taken out on this and you should have gotten a ridiculous tax refund this year. We did not. So because it wasn't corrected, it got charged as income to us. I know. But the net of taxes, the taxes that were taken out on this, should have created a huge tax refund for you. We haven't received it yet. I was under the impression we wouldn't get that until we filed next year for our... It was last year. Correct. No, you're filing on the extra $48,000. It's not 48.

It's 48 minus 33, correct? 33 hundred. Well, my gross paycheck is $5,700. 33 is my net. But you received $28,000 is what you actually got paid. That was the net of taxes. Net of taxes. But there's $23,000 in taxes withheld on it. Correct. Yes, sir. And you should get that back if it was last year when you filed this year's tax returns. Have you not filed taxes for 24 yet? That is the tax return that we were taxed on. I filed for an extension, but we...

that we were taxed on and we had filed for an extension but we were you have not filed taxes for 24 yet is that right correct we did sir we have filed for 24 well you should be getting $23,000 back I wasn't so I'm not sure how that works well here's how it works okay you paid $23,000 on that one check more in taxes than you should have. And so you don't have taxes on that, so you should get all of that back. Immediately? In 24? When you file on 24 as a tax refund. When you file and you have overpaid your taxes, when you file your tax return you get a tax refund. You know that. Yes sir. We still have that money

though because they haven't, they didn't submit the debt letter to me until last week so it's been almost 10 months. But you've only got the 28. Correct. It's just sitting there. For gross repayment. Yeah. I understand. Okay. Well, number one, you don't pay more than what you actually owe. And what you actually owe is the total amount, including taxes, that they overpaid you. And you should get all of your tax money back from the IRS on that amount without any trouble when you file your tax return and the other amount, the amount that was net, is sitting in your bank account so you can give them that now, correct? Yes. Okay. And then you'll have to repay them the taxes when the tax money comes.

You need a tax professional, I think. I don't think you know what you're doing on your taxes. Okay. Thank you. Do you have, I guess, we have an accountant that does our taxes. Yeah, but if he can't tell you you're getting the, see, if there's 48, they overpaid you by 48,000. Is that correct? Total? They overpaid me by 43,000. 43,000. Okay, I'm sorry. So 43,000 thousand but that netted into your bank account twenty eight thousand too much uh... twenty well if you take out the thirty three hundred for mine that's how

much i received in total tom about just a forget what you're do you on the i want to try to get to is the amount you were that they gave you that was too much as It was 43 too much, net of taxes, what was that 43? It would be around 24. Yeah that sounds right. That sounds right. Okay and so there's another 19 laying out there.

You've got around 24 in your bank account right now, correct? Correct. Okay, so you can give them the 24, you owe them the other 19, but the IRS should be giving you the other 19 back. Because you shouldn't be paying taxes on that. So you have to file an amended return, and they have to file an amended W-2. The company has to file an amended W-2 saying you were not due, you know, so that you pay taxes only on your proper amount and that means that you get the entire refund back on the overpayment. Okay. But if they have not, if they've submitted your income to the IRS as including this overpayment, then that's going to screw the thing up. They need to submit your income as not including this overpayment then that's going to screw the thing up. They

need to submit your income as not including this overpayment so you can get all the tax back from the IRS. So this is a two-check deal. You write them the check for the money you've got and then when you get the money back from the IRS, if your CPA doesn't know how to do that, get a new CPA because this is not rocket science here. And so then, how what a weird deal oh man um yeah but you know you don't that that nineteen thousand dollars tacked up in too much taxes that you have paid should come back to you once they submit the corrected w4 w2 to to reflect that you did not get that kind of income in 24.

Yeah, a little irritated here at a big company that has all the resources in the world to fix this and they didn't fix it quickly. Hate that for her, but it is, it's fixable. Well and then they're being, you know, like we're gonna give you options for you to repay this like you did. Right, they're the one that messed up. I've never done one that big, but we have overpaid people, you know, $3,000 or $4,000 or something. And you know what we do? Eat it.

Just keep the money. We're so stupid. We did this. We're going to pay the stupid tax and we're going to fix it. And somebody in accounting gets their butt chewed. Hello. Wow. Robin is in Iowa.

Hey, Robin, welcome to the Ramsey Show. Hi. Hi, what's up? So I have, I'm separated from my seem-to-be ex-husband. He took one of our vehicles, I took the other, and he's not been making the payments on his vehicle so it will be charged off at the end of the month. And I am looking for guidance on do I take this large payment or do I let it hit our credit. You're on it as well? I am. We have had two vehicles.

Why is he not making the payment? He says he cannot afford it and that the car needs to go back. Yeah, well that's called a repossession. And he's going to get sued and so are you. Yes. Yes. It's not an inconvenience. I'm aware of that and that's where I'm sitting is well I've had the other vehicle which is broke down so I've been saving to try to fix it. So his car, the car that he's

driving, what does it take to bring it current? Right now it'd take $2,200 to bring it back up to where it is. What is owed on it total? What's owed on it total? $28,000. And what's it worth? Probably closer to about 17 to 20,000 at this point. Okay. And do you have any money? Do I have money? I have money that I could get it caught up.

How much money do you have? That's what I'm asking. I have about five thousand. That's all the money in the world that you have is five thousand dollars. Yes, and I do not have a job currently. I lost my job in May. Wow. Okay. And so that in the divorce there's not going to be any things, is there a home in the divorce? No. Okay, so you're just going to split up these dumb debts is all you're going to split up because you don't have any money to split up.

Pretty much, yeah. Let it go. Pretty much, yeah. Let it go. So just let the jeep go and I should just you can't you can't afford to catch it up you can't afford to catch it up you don't have a job you have five thousand dollars to your name you have to survive and you're gonna have to deal with the repo you're gonna your credits gonna get

dinged and they're gonna come after you and come after him for the deficit when they do and it'll probably be close to a year before you hear from them be sure you've got some money saved up and let's pretend that they sell the car, you have $28,000 owed on it and they sell it for $18,000 so there's a $10,000 deficit. I'm just making this up and they come and they say you need to pay the $10,000 hole that the car didn't cover. You say well that was awarded to my husband in the divorce. Yeah, but you signed on the note. Yeah, I know. But so I'll give you $3,000 to let my name go off

of it and you chase him for the rest. And that's how you negotiate this. Okay. But get ready for that. That's going to come in about a year. And your credit's going to be messed up. But whoopty doopty, you got bigger problems in credit messed messed up so how's the job hunt going? I've been putting in about three resumes a day I haven't limited it to my area per se I've actually put in for anywhere decided let the universe decide where I go I guess no no no no no no so what your... You don't like the universe. Yeah, I gotta tell you. It's a horrible strategy, because people who trust the universe tend to be unemployed for a long time. What is your field of expertise? I'm an environmental biologist.

Oh, good. Okay. What were you making before? Oh good. What were you making before? $66,000. Just give me the quick 10-second version. What does an environmental biologist do? Forgive me. My last position I was doing environmental permitting and compliance work. Private company or government? It was a private company. Okay. There's two things you have to do. Number one, I love that you have got a pretty specific field and you know that world better than Dave and I and I would absolutely be reaching out and connecting in that field and looking for opportunities. But in your current situation, three resumes a day, while I appreciate this and I don't want you to

feel like I'm beating up on you, I'm not. But you might as well be playing the slots or the lottery. Submitting three resumes a day feels like activity and good activity, but it's not. And a resume without a connection is absolutely worthless. So here's what you have to do. There's what I would call a short-term strategy and then long-term. I like to see you have a long-term strategy of getting back in your field or at least have to do. There's what I would call a short term strategy and then long term. I'd like to see you have a long term strategy of getting back in your field or at least leveraging

the skill set and experience that you have to maybe cross another industry. And I believe that's transferable. However, right now you're working at Walmart, Target. Don't just assume I got to go drive and deliver food, but I'm not looking down on that either. Right now, you're looking at trying to make $15 to $20 to $22 an hour doing anything. Forget about skill. Forget about experience. You need to get money in the door right now for two reasons. Number one, you have a really tough financial situation and you need money.

Secondly, you need momentum. You're going through a divorce and you've been laid off. And that is the equivalent of losing a loved one. We know this from psychology studies. And I believe very much in you just staying active. One, for money, but two, keep some momentum. So right now you're taking anything and everything. And we're not sending resumes,

we're showing up at these places going, here's what I've done and I can take the night shift at Walmart I'm overqualified yes but here's my story and right now people want people that they can trust you've got character you've got a good background but this is an urgency thing Robin like right now yeah you need you need the the Walmart job by two of those by the weekend and we're gonna send you a copy of Ken's book called the proximity principle which is what he's referring to which is get yourself in proximity and get your

resumes in proximity to people that work there that you know. Just filling out applications is a complete waste of time in the digital world. We had, at Ramsey, we hired 121 people last year. We had over 23,000 applications. The chances of you getting out of that application pile are almost zero if you didn't have someone that you knew here or something very, very special that you did to set yourself aside. But people just jumping on LinkedIn

and whatever other thing that's out there and just aside. But people just jumping on LinkedIn and whatever other thing that's out there and just zip recruiters filling out bazillion applications and feeling like, well, I can't get a job. Well, it's because you're jumping in a pile of 23,000 for 140 jobs. So you got to say, Hey, my daughter plays soccer. My aunt coaches over here and she works over there at that company and hey, would you put in a good word for me? And that's what Ken teaches and that will get you the job or at least get you the interview. The other, you won't even get an interview with what you're doing. Exactly right. So yeah, go get some money short term and then go be

looking for the bigger thing and put all this other mess in the rear view mirror. I'm sorry you're going through all this kiddo. I'd let that car go and deal with it later when you're in a much better place to deal with it. You don't have to settle the whole deficit. You just settle your part and let him chase him for his part since he didn't bother to take care of business here. Two quick things to not just Robin, but to our larger audience who are in a situation

like Robin. I want to make sure you hear something first. The reason what Dave is saying is so true and why we're hitting this point is here's what happens when you submit resumes, you feel like you're doing something productive. And then that makes your expectation rise where it should not rise. And then you get ghosted and then you're spiraling because you've already lost, you've gone through a loss emotionally of losing a job and now the frustration piles on top and you can quickly get into a really depressive state and that pauses everything. The second thing, if you're in the position like Robin, Robin needs to take and Robin

I know you're listening, you need to take your current job description of the job you just lost and get it in front of you and begin to look at it. And if you have to write down what the core skill sets you have that you exhibited in that last job, then talk about the experience that you have and write that down. And here's what happens, folks that are listening, watching. You can take a job like she has and find crossover experience and skill set that can work in other places and that'll help you see more and what that does is it widens your search and then you use the proximity principle and you begin to say hey I have this skill set

in this experience while I've been in this field I can actually go over here and you watch what happens opportunities that you never even thought of before begin to present themselves. So hope that helps a lot of people. This is a strategic play. And if you do it that way, opportunity show up on your front door. Hey, listen up. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid, listening to the

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if you become a victim. It's the most thorough and affordable plan out there. I even have it for my family and our entire team. Visit zander.com or call 800-356-4282. Sticking to a budget is hard enough and inflation? George, it isn't helping us. Yep. In fact, 54% of Americans say it's a challenge to save on groceries without sacrificing quality. But Aldi makes it easy. Aldi's private label, it is delicious food with incredible prices that you can stay within your budget. Yeah, and Aldi has the lowest prices of any national grocery store, which is really impressive. And with all the money you save, you're going to be making more progress toward your financial goals.

Yes, which is what we want for you guys. So stop overpaying and start shopping at Aldi find a store near you today at Aldi dot US. That's a LDI US Alec is in Canada. Hi Alec. Welcome to the Ramsey show Hey Dave. Hey Ken. I'm a huge fan of both you guys. So I just want to thank you for taking my call. Thanks Hey Ken, I'm a huge fan of both you guys. So I just want to thank you for taking my call. Thanks So I'm probably gonna get in some trouble for asking you guys this but my question is how would you feel about me taking out? student loans To invest into a guaranteed investment certificate, even though my post-secondary education is probably paid for I thought you said you were a huge fan

Yeah, I am. I'm a... It's the what if, Dave. It's like, you're like a huge fan of bears, so you go in the cage and poke them? I mean, what is the... I don't understand at all. I'm going to see the balance of my time to the gentleman from Tennessee to my left on this one. I've heard this a time or two.

Yeah. How about, no, don't do that. All right. All right. John's in Jackson, Mississippi. Hey, John, how are you? I'm doing great. How you doing, Dave? Better than I deserve. What's up? I'm trying to convince my wife, and I think I'm there, that we are in a more or less let the good times roll situation. The complication being there's a bit of an age gap. I'm 39 and she's 59. Okay? So she's got 250k in a Roth, Social Security's on the horizon.

She'll have a small state pension to work 12 years for the state. That's at 65. We've got 77k in a stock market fund that we just have. I've got my own 160 K of retirement savings in accounts. We've got about 50 K in savings, just normal savings. And the only thing we owe is our house at 80 K and it's probably worth about twice that on a bad day I would hope. So you know, we're not going to have that traditional retirement of each being you you know, like 60 years old.

And so in lieu of that, maybe we could just spend some money and just have a better life now for the next, you know, 25, 30 years. Hold on a second. Hold on, hold on, hold on. Real quick, how much do you make? I make about 80. You make 80,000. And you're planning to work until what age? And you're planning to work until what age? Well, and I don't want to sound particularly crass, but we're both only children, and our parents have what I would say is our sizable estates. So when I don't have to work anymore, it's probably about when I'll stop. That's about where I am on that. So, 55, 60, somewhere in there. And you're contributing to a 401k? Yes, I do matching and then a little extra. And is she working? No, she's been a, like basically retired, semi-retired since she lost her job about five years ago. Okay. All right. So her 250 is there and that's it. So, well well I don't know what you mean by let the

good times roll exactly but I can tell you what I would do in your situation I can answer that okay no you are not financially independent not close even okay you're not where you don't have to work anymore and you don't have to worry about money and you're gonna sit around like some trust fund baby and wait on the parents to die. No I'm not gonna do that. That's not a high quality life. It's not a life full of dignity, a purpose or anything else. And so I'm gonna find something that I do for a living that has some purpose to it that I enjoy and that I can make some money at and that's what you should be doing with your life until you can't anymore not until you don't have to anymore

I'm 64 the building I'm sitting in is worth 600 million and I still work okay so that's just this building and so um the you know so and it affords me a very good life I can do anything I want to do and I want you to be able to do anything you want to do but I also don't want you to think that doing nothing is good for you mentally mental health wise spiritually or anything else because it's not so if I'm in your shoes I'm taking the 77 out of the stock market and paying off the house today

And I'm going to be putting 15 to 20 percent of your income into your 401k and If you want to use you know 10 or 15 thousand or 20 thousand or something out of that 250 of hers and going to cruise or something if that's let the good times roll sure absolutely but if you're talking about trying to burn through two hundred fifty thousand dollars of her money just because she hit fifty nine and a half in the next 24 months and you call that let the good times roll now I'm gonna call that irresponsible and I would not that I just want to be clear that's not I'm just talking about like hey we go out to the ninth restaurant, you know, maybe every month versus every third month.

Well, yeah, I think you can afford to do that with what I'm talking about. You don't have a house payment anymore with what I just laid out. And you do a budget, and the budget includes a nice entertainment budget, a nice travel budget, a nice furniture upgrade for her budget, a nice whatever budget. All of that is fine, but it also includes putting 15% of your income away and a plan to work. And honestly, I think she would be better off if she did something. You're two only children, she's sitting at home on her butt. I mean, I'm sorry, but what does she want? Is there not something she

wants to do? You don't have to work to have meaning, that's not the thing. My wife doesn't work today and hasn't since our first child was born, doesn't work outside the home I should say because she does work. But the, so anyway, the, you know, I think you guys lay your hand to all of that and, you know, but am I signing you up for a 24 hour a day Mardi Gras? No. That's not, that's not, that's unfulfilling.

It's not a quality life. It is if you're 18 years old but it's not for normal grown adults you know and so that's what I would do. I would say I'd systematically be saving, systematically be giving, systematically be enjoying. And if you leave her 250 alone, it'll double every seven years. Yeah, the only thing that sticks out, and in no way, Jacob, do I think you're saying this, but I'm just going to throw this out there because I think this is a slippery slope. That when we are waiting on parents to die, to inherit this life-changing money, I think that's a, I'm going to call it a slippery slope.

And I just think we've got to be very careful about that because that's really tricky. And I'll tell you this, as we sit down with our financial advisor, Stacey and I, every January, and they're talking to us, Dave, like, hey, you could live to be 90. We're starting to see life expectancy. And so this idea of like, I'm just going to try to scrape along and then hope the parents kick the bucket. And again, I know you're not saying that, but I do think that that can get into a really weird, tricky mindset, Dave, is what I was feeling

there. Our estate plan is set up that if one of our kids does that, they're out of the will. They can't, they don't have that as an option. Yeah, to squander and just wait. To sit and wait on me to die. That's not a plan. So I'll take you out of the will and then you'll have a need to work. That'll be good for you.

See, okay, we'll help you fix that. And so that's the way it's set up. And you're not allowed to just sit and wait on us to die because we may live a long time. I think you are. I see you like 99 with a cane. Still on here going, sell the car. That's it. Well, you know what's funny about this?

The calls will be the same 30 years from now. Yeah, they were 30 years ago. I can tell you that. It's pretty much the same thing. Don't do a student loan. Don't do a credit card debt. Don't borrow on your student loan to invest it in a certificate of savings. Same crap over.

I think a lot of people will be here for 94-year-old Dave, getting irritated. I don't know, man. That's going to be next level. I know what happens when people quit making sense and they don't quit. That's not a good thing. We witnessed that up close lately and I don't think I want that anymore. But yeah, so I'm pretty much ensured that these people over there, the Booth people are going to take me off the air is what's going to happen. So it makes me think of you and I are both friends with the legendary Art Linkletter. Yeah. And Art once said, he said this many times, but one of my favorite

things he said was his favorite people to ever interview were young people and old people. Young people because they don't know what they're saying and old people because they don't care. Yeah. You know, I interviewed Art on this show. He was 78 and he did 148 speaking engagements that year. And I said, why in the world are you doing that? He said, cause I'm on the council for the aging and one of the, some of the data and this was 20 years ago, some of the data we found is that, um, if you don't keep your brain active, it's a muscle at atrophies just like any other muscle. And he goes, so I'm doing it just to keep my brain active, just, uh, just so that I, you know, it's either that or do crossword puzzles. So, you know, I gotta do something to keep the thing moving

buying or selling a home is a big deal and with all the click bait headlines and confusing stuff out there on Tic Tac, it's tough to know what's actually really happening in the real estate world. Hey, we're here to make the latest trends easy to understand. Last month home prices went up slightly again. Now our median house price is around $440,000 nationally and we just hit over a million homes for sale. That's the highest inventory since 2019.

Not enough to meet buyer demand though. Prices are still going up. Average 15 year fixed rate, slightly under 6% right now. If you want to learn more about housing market trends and get ready to buy, get the free tools to help you buy or sell with confidence. We'll teach you, we'll help you. It's all free. Go to ramsesolutions.com slash market or click the link in the show notes. Our question of the day is brought to you by WhyRefi. WhyRefi works with borrowers who have

defaulted private student loans even when other lenders have said no. With a lower payment, low fixed rate, you can refi this, get a clear path forward, get out of this debt. Visit whyrefi.com slash Ramsey. That's the letter y-r-e-f-y dot com slash Ramsey might not be in all states. Today's question comes from Evan in Washington, DC. I'm 35 years old, single with no kids. I make about $350,000 a year. I have a $750,000 net worth and my only debt a year. I have a $750,000 net worth, and my only debt is my car payment and a $750,000 mortgage.

I have $250,000 in my emergency fund and about $250,000 in retirement. The country club I'd like to join has a $20,000 initiation fee, and then $500 per month after that, I golf about twice a week. Is it wise for me to make a purchase like this at this point in my life with my financial situation?

Yeah. Yeah. Yeah, you can afford that. Yeah, no question. But $250,000 emergency funds, asinine. It's too much. Pay off your car today. Yeah, that's right.

Get that emergency fund down to three to six months of expenses and invest that money into some kind of good growth stock mutual fund with your financial planning firm. Yeah, I agree. But you can afford a $20,000 initiation fee with those numbers and $500 a month with those numbers. Easily. And if it's a nice place, send an email to Dave and I, we will consider joining you for 18. Give it a consideration. I don't want to speak for David, his busy calendar. Jacob is in West Palm Beach. Hey Jacob, what's up? Hey uncle Dave, how's it going? Better than I deserve, man. How can I help?

Uh, not much. I'm just trying to see if it's a foolish idea for me to purchase a used boat. No, you ought to get it. I guess I'm kidding. What's the situation? What's it cost? Yeah. So they're asking 16,000. I could probably talk them down a little bit from there. I do have $13,000 currently stashed away in cash. I make a salary of $70,000 a year. I am debt-free, have no debt. I invest 13% of my income into my 401k, and every year I track and max out my Roth IRA. So I don't have really any...

Do you have an emergency fund? Yes, currently that's just tied up in my money market account which I could pull out anytime. I'm sorry, how much is in your emergency fund? $38,000. Okay, all right. And you have 13 saved towards a boat that they're asking 16 for. Yes, sir. So if you settle on 14, how are you going to cover it? So, well, I just wait another month and keep doing it or I could pull out, I guess, from I have a savings account as well and then in my checking account.

Okay, I'm sorry. How much is in the savings account? Savings account is just $5,000. Savings count is just $5,000. And then I have $4,000. So you have $38,000 in an emergency fund, $5,000 in savings, and $13,000 in the boat fund. Is that right? Yes, sir. Okay.

All right. I'd offer $13,000. Yeah, yeah, definitely. But I see what you can get the boat for. But yes, you can afford the boat. You think even with storage, having to pay storage fees since I don't have a house, I'm living in a condo, so I'd have to find a place that'd be roughly $300 a month. If you don't want to, it's okay.

Oh, okay. Well, I just really wanted to see if you thought I could afford it reasonably with my income. Yeah, I mean, what's your car worth? I have a Toyota Tacoma. It's probably worth 30 grand. And you make what? $70,000. Okay one rule of thumb is not have more than half of your annual income tied up in things with motors and wheels and you're probably getting ready to break that or pretty close. So that that makes it a little bit

questionable. You're gonna have a lot tied up because Tacoma is going down in value like a rock and so is the boat. So you got a lot tied up and things going the wrong way. But you can do it but you're just you know be aware that you're pushing the edge. No more toys. You ain't got room for toys and you know I don't know what these storage fees are. You need to look at that and see if you can actually afford that part. But the numbers you gave me, you have saved up for the boat and Ken's right. If you bought it for 13, I think that puts you right on track.

I think he gave us about $300 a month on storage, Dave. He said that? Yeah. Oh, I missed it. Okay. And so with that, he needs to look at his budget and go, how much does that tax his other operating expenses? It's $3600 bucks a year.

So it's doable based on the numbers he gave us. Is it the best decision? Not on the rule of thumb that we have. You're on the top side of everything here. You're not on the bottom side. It's not a slam dunk like the country club guy. What's a boat like that going to depreciate? Is there a rate? They all go down like crazy. Quickly? Anything does. I mean there's no such thing.

Anything with a motor or with wheels. You know, if it's got a battery and wheels like Rachel's car, you know, it goes down and around you too. It doesn't matter if it's got a motor. You know what I'm saying? They just all go. they're all, it's just a black hole for money. I will tell you this, the joke is always there's two best days in a boat owner's life, the day they buy it and the day they sell it. Is that true? Well, I don't know, I've never sold one other than to buy another one. So I've always, I've had a boat my whole life. Isn't that really, okay, so this is fun question for you. If you reach the end of your use of a boat and you're sick and tired of it and it's a bother, then it's a great thing. Like anything, you have a little celebration when you finally

get stupid things sold. But you have so much financial margin and freedom that there's, my point is, I don't know if that's true for someone who's in good financial situation. Yeah, but I mean, emotionally the thing could just be in the way. If you're done with it, I don't want this thing anymore, whatever it is. But you've yet to reach this moment. On a boat? Yeah.

No, I've got, I like boats. I've got master crafts and we're skiers and so, and wakeboarders and surfers and all that stuff, barefooters and all that. We do all this stuff. And so, yeah, we love our MasterCrafts. They're the world's best ski boat, as far as I'm concerned. I'll just give them an ad right here. There you go.

So there we go, give them a mention. Yeah, but that was when I was a kid and we were skiing and beginning to ski tournaments and stuff, and my teenage years, if you had a MasterCraft, you were the dog. Status simple. You were the big, it was the best boat. I mean, because it's, when you're slalom skiingalom skiing in those days and today, if you got a one

ninety, it's a zero wake and it gets you out of the water so fast. It's unbelievable. You're not dragging around back there and drowning and everything else. And so it's just and so that's what I always wanted. It was became a goal. I mean, like I was a teenager and back there going someday when I get some money. Sure. What am I going to get? Some people wanted to get a car. Some money sure what am I gonna get some people wanted to get a car some people wanted to get a Tacoma

Dave wanted to get a mastercraft. Yeah, so that was that was thing. So it's a little different for me, but Yeah, it makes sure you're gonna use a stupid thing and because you're gonna be you're gonna be putting off a Fair chunk of your life into it sir. And so make sure you're getting good use of it. Toys are not against the rules. The only rules we have are rules that cause you to become wealthier so that you can enjoy your life more. That's the only rules we have and when you make $50,000 a year and you have a $50,000 truck payment and you have a boat and two Sea-Dos and you wonder why you're broke, I can show you. It's in your driveway. That's why you're broke. You wonder why your kid's college fund isn't funded.

It's in your driveway. Because you're buying a bunch of crap you can't afford to impress somebody to stop light that don't even know you. And so, ooh, cool truck. Yeah, well, that's about what you get for 70 grand. So no, no, you don't put money in stuff like that and you live like no one else, you don't put money and stuff like that. And you live like no one else.

You drive like no one else so that later you can live like no one else and drive like no one else. The reason we can afford those master crafts is because. You know, we, we didn't for a long time and we, we saved and invested and saved and invested just like we teach here on the air. So you live like no one else. So later you can live and give like no one else. Speaking of, I along with the other personalities have been at the other end of you giving us a wonderful time dragging us on the back of that

boat and you have thrown me in places. Such a joy. My body is contorted in places and smack the water. Such a joy to launch Ken Coleman. At a high rate of speed. Launch him Such a joy. My body is contorted in places and smack the water. Such a joy to launch Ken Coleman. At a high rate of speed. Launch him on a tube. Can you just see Ken flying through the air with the greatest of ease? Limbs everywhere. Terror until you land in the water.

Terror on his face. Blisters. It's a great tube launch. No skin on my knees. Great tube launch. Dave Gibbs like no one else, folks. I'm telling you, man. That's right.

He does. I'm generous that way. Switching banks can be a hassle and I totally get that, but when Wince and I opened up our Fairwinds account, we were shocked by how quick and easy it was. It just took a few minutes online. We didn't have to block off an entire afternoon or track down paperwork. And the next day we got a personal call from a Fairwindwin specialist just checking in. I couldn't believe it when I answered my phone and I was talking to them, I was like, y'all are the nicest people.

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Lisa is in Fort Wayne, Indiana. Hi Lisa, welcome to the Ramsey Show. Hello. Hi, what's up? So my husband and I both work. We are doing everything right financially, at least according to everything I've read and seen and done. But he still insists that we can't afford a baby, and I wanted nothing more forever. And I just don't see how his math is working. I just don't see how he can think that when we're doing so well. And I look at people like my brother.

So do you have debt? I mean, technically, you know, we have a car that we're almost done paying off It's got I think like $900 left to pay off and we bought a house about a year ago. How much is your house payment? I know we pay $2,400 a month. I think it's just under but we like to round it up. Okay All right, and I do have student loans. How much are your student loans? About forty thousand. They keep going up because I'm on an income-based repayment plan and I've been working for... So you're not paying off your student loans so they're going off. Okay. And I've been working towards the

public service loan forgiveness program for those. No, it doesn't work. You've got to pay off the student loan. One percent of the people survive the public service loan forgiveness program. No it doesn't work. You've got to pay off the student loan. One percent of the people survived the public service program. It's a complete scam. So what's your household income? He makes seventy thousand ish. I don't know what my yearly salary is because I changed dollars about a year ago but I make about 20 an hour. Okay, which is about 30. So you make about $100,000 a year. And your vision of having a baby involves you quitting work?

Most likely only because I do have a disability and we think that once I have a baby I'll probably have to go on disability. But we're not sure. We're trying to figure that out. So having a child will aggravate your disability and make it worse? Yes and no. I don't know if you ever heard of EDS or POTS. It's essentially a connected tissue disorder so I'll be in and out of to make sure everything's good I'll be you know in the not in the hospital in the outpatient a lot I'll be going to the doctor quite a bit and then just because it's a connected tissue disorder where

everything's loose pregnancy make everythingoser, so there'll be a period of time where I'll be in kind of recovery getting everything to tighten back up so that can function as normal again. Okay, and all of that of course involves medical bills. Yes, we've got pretty good insurance, so I'm not super worried about the bills part of it. So is she really worried about the money? Is she worried about you? It's both.

I mean, I know it's both. He said as much, but we're both pretty confident that because I've got a really good team of doctors, a lot of my disability is, I don't want to say intermission because it never goes away, but I'm pretty well managed for what I have. Yeah. Have you two sat down and gone line by line through the budget? Because the way you led the question off, you know, you basically said I don't think his numbers are matching what I'm seeing, so I'm curious, have you gone line by line through your budget based on you losing $30,000?

What expenses is it that he thinks is going to break you all? Yeah, so we've gone line by line. The reason I think that it's coming across different is because, for example, he likes to have like a minimum $2,000 buffer in our checking account every month. we have an over $10,000, uh, emergency expense and a share certificate plus our regular savings for like saving up for things. Um, he wants to have all of the funds saved up for, you know, me being out on medical and initial baby expenses. He wants to have that all saved up beforehand.

And I grew up in poverty and I'm sitting here, he's got 17.5K in investment accounts. You know, we've got all this money stashed away places and he just doesn't like to touch it because he wants to have it just in case. He wants to have all just in case he wants to have well he's trying to make sure he takes care of a wife who's going to struggle medically and a baby he you know I think this guy's loving you well the way he knows how to love is to have some money to make sure that the family is okay so his motivation is really pure he's not that he you know you didn't tell me he's got a million dollars you told me he's got 17,000 He's not that he you know, you didn't tell me he's got a million dollars

He told me he's got 17,000 It's not like you've got stack cash stacked in the spare bedroom to the walls. Okay, it's 17 grand So, um, I have a quick question Has he revealed to you an amount of money that if you were to get to that then he would feel comfortable Sort of she had he tasked me with coming up with a number of like when we have a baby, you know, if you're not the one that, how much do we need? You're not the one that needs a number, he's the one that does. He needs to come up with a number.

Right. The reason he asked me to do it is because he's like, I don't really know what it's gonna cost for us to have a baby, and I don't know how much your work is going to let you have it. So give him what he doesn't know, and then put pressure on him in a positive way. The answer to your question is, I think you guys can afford to have a baby, but I think the way you're going to get on the same page about this is that the two of you lay out a game plan, because your husband is a planner. He is a nerd. He's a wonderful husband, but he's a nerd. And he is going to be fretting and worried about his wife and his child and

it's going to offset some of the joy of having a child if there's not a plan. So the two of you sit down and work your way through a plan and what exactly those dollars are, reallocate some of the dollars you've got and put some new dollars towards it, get the questions answered about what it's going to cost, the questions answered about what your time you're going to be off, questions answered of whether you're going to quit and what disability is going to look like, all of those things. Get all of that laid out and that shouldn't take, you could do all of this in less than a month, and figure out the plan,

and then it might take you a couple months to fill in the gaps with the cash to do the plan, but one of the plans needs to be, you know, after you do this, after you have a baby, you gotta have a plan to get this stupid student loan paid off, because your plan that you have right now sucks. It's horrible, you're gonna be in debt the rest of your life with the plan you've got right now. So that's a side issue, but you guys have got to start laying that stuff out and

go, okay, we're gonna get rid of all these debts, the last little bit on the car. We're gonna actually start paying off the student loans after the baby comes. And I'm fine with that. We never tell people, I mean virtually never, to avoid children based on cost. We always say have babies. The best thing in life is babies. Babies are awesome. They're the best thing out there and the only thing better than babies is grandbabies. Yeah, that's the only thing better. So yeah, get you some. But you know know he's laid out what makes him feel like a good dad and a good husband. So help him get there. And when you do that I

think all of a sudden baby's gonna be back on the discussion. We know a bunch of you have been trying to get your friends and family on the Ramsey plan and it's hard to get them to understand all this stuff. So we're gonna help you. We built the Ramsey 101, the first level class that you can take. It's a playlist and you can help them completely for free. It's an easy to share playlist. It covers the basics for someone who's just getting started with Ramsey. What are the baby steps? How to pay off debt using the debt snowball? How to build an emergency fund? How to get the spouse on board? Click the link in the top of the show notes and

open Ramsey 101 playlist on YouTube Text it DM it send it to a group chat say something like just thought this might help not like you're stupid Don't do that if you're listening on radio. We've got the playlist featured at the top of our YouTube channel one share One step could change everything for one person one step could change everything for one person. Aaron is in Jacksonville, Florida. Hi Aaron, how are you? Good, how are you? Better than I deserve. What's up? So me and my dad, we run a painting business here in Florida and the plan from the start was always for me to take it over. I'm 26 years old, he's about 60 years old now, but he also pastors a church here in Florida and

So the plan's always been for me to start and take over the business. He's gonna hand it off to me he's gonna retire but um Did the last six or seven years now? He's been doing just like shady things as I get older I'm realizing the things that he does are just not Ethical and me and my wife are just getting to the point of like, should I move on? Should I just take over the business and hopefully it all will just work out? But the shady things he does are just like taking payments from customers to his own

personal Venmo account and sometimes even to his own bank account and sometimes won't even tell me if I bring it up to him, he'll just it off say it's just it's our account this Venmo's our account if you need anything we'll pull it out of there and I can't get him to put it into our joint account through Fairwinds so the the big question is if I should move on so women are you one of the owners now? Yeah, I'm the VP of the company. Yeah, and you're one of the owners. Yes. Okay, and so he's taking money that is your money. Yeah, our company, our painting company. Yeah, I know, but he took it and put it in his personal account, which half of that money was yours, or some portion of that money is yours right? Yeah.

Not like if I need it, it's like mine. Whether I need it or not it's mine. Yeah. Is that what you're saying? Yeah, it's his personal demo account so it's not really my money. It's basically his money. I don't think he sees it as shady. I think he just really sucks at bookkeeping

Yeah It's irrelevant to him which account it goes in because it's his money as far as he's concerned And he left out the part where he was ripping you off Right he didn't I don't think he even realizes it does he No, he he will he'll deflect it and just try to blow it under the rug And that's not what I mean. I don't think he realizes he's stealing from you. That's why he deflects it. As far as he's concerned, it's my money.

If I put it in this account, if I put it in that account, it's still my money. But that's not true because you're one of the owners. You get paid out of the profits, right? And so this affects profits. Yeah, 100%. Yeah. So you've had a discussion that was that blunt? I don't think so. You don't sound like that guy. I have a couple of times and he just says, what's the big deal? What do you want to do? I'm like, can we try again? The big deal is I want you to put the freaking money that's my money in this

account that's ours. That's the big deal. But it doesn't sound like that coming from you. It would from me. Yeah, this is a clear cut for me. I think you need to move on. I don't think he's going to change. And it feels like to me you already resent him and this is just a mess. And I don't see him getting out of this deal anytime soon either. So then it comes down to if he's not going to change, how much longer are you willing to put up with this? And I don't think you're going to like any of those answers.

So if it were me, I would say, Dad, love you. I want out of ownership. I'm willing to stay if you transfer all of it to me within three months. If you're not willing to do that, I think I need to go out on my own. I think this thing's run its course. Yeah. Yeah. Will he do that? Will he turn it over to you now? I don't think so. I think he needs the income. He's a pastor, but it doesn't support his support. He's bivocational. This is a slush fund for him. This also has tax implications that I would not sleep well at night. I've never been a fan of people doing that and treating their business like it's a personal

account. A lot of small business people do this, and that's dangerous. The IRS loves to weaponize and make an example out of people. I'm not saying that's going to happen, but for all those reasons, Dave, you're being very generous here. I wouldn't even give him the, I'd just be done. I don't think I'd give him an ultimatum because I don't think it's going to matter. And I think it prolongs your decision.

What it does do is it gives dad the choice. Fair. You let him have the dignity of choice. And you can choose, you can, can add I'm through working together this you putting money aside and other things I'm not okay with and the other stuff you're doing I'm not okay with I love you I want to continue to be your son but I can't work here anymore if you want to turn this over to me fine if not I'm gonna go out on my own and you know it just sounds like that yeah yeah there's

no reason to burn the bridge and no reason to burn the relationship. And so don't be yelling and calling him a crook and running out the door or something that's not valuable. There's no need to do all that. So man, I'm sorry. That's a hard situation to be in. Dave is in Chattanooga. Hi Dave.

Welcome to the Ramsey Show. Hey guys, thanks for taking my call. I am looking at long-term care insurance and I see several, a couple different options out there. One, this is something I should be looking at is that that's one question. Number two, what should I be looking for? And basically what I'm looking at, I'm just trying to understand the numbers and what makes sense. Okay, how old are you? 48. You don't need long-term care insurance. Okay. The statistical use of nursing home stay prior to age 60 is very very close to zero and so I would not we don't recommend long-term care

insurance until you turn 60 and then the reason you would do it is this. If you have a mid-range net worth, meaning let's say you've got $500,000 or $700,000, 75% of the ladies outlive their husbands. So the normal scenario is 64, 65 years old, whatever, 69 years old, dad gets something and goes into the nursing home, stays three years, burns through 350 grand, cracks and scrambles the nest egg, leaves mom broke when he dies. That's who needs nursing home insurance, long-term care insurance. You also, when you're buying that at 60 years old, older want to buy an in-home care feature That it will ensure someone to do in-home care as well as a traditional nursing home

None of it covers more than three years now. You can't hardly find it It's all a three-year policy but the statistical again the stats are the average nursing home stays about 2.7 years and So very few people go over three years. It's very, very unusual. And so if you do, you can get into some other messes, but you can't get coverage for more than three years, hardly these days. So basically, nursing home is 100 grand.

So you're buying 300k worth of coverage. Costs you about five grand, four grand something like that and per year and you know that that gets you set up now if you're worth ten million dollars you don't need long-term care insurance you hire full time help and turn your home into a nursing home or you write a check and self-insure if someone does need to go into memory care or something like that and you just write the check and you're better off to self-insure through it because again your exposure is about $300,000. That's about what the average out of pocket is going to be.

And you can absorb that if you have $10 million. But we strongly recommend mid-range and down to no money, under a million dollar net worth down to no money, that you get long-term care insurance once you turn 60. It is a major deal. It's a big hole in people's thing and I see a lot of widows left with no money because daddy used up the money in the nursing home. And they had a pretty good little nest egg, a couple hundred grand or four hundred grand or something and it just gets cracked and scrambled. Let's be honest, shopping for health insurance can be confusing. With high costs, complicated terms and customer service that doesn't really serve you, most

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show hi good afternoon guys thank you so much for taking my call. Sure, what's up? Okay, so I have received a 30k buyout from my former employer. I have an $18,000 car loan left to pay off. I have $5,000 in medical bills. I'm just wondering what actionable steps can I do to set myself up in the future for financial success got the new job? No, what were you making before Before I was making like 50k a year. Okay, and when will you start the new job making 50k? That is something I'm not sure That's it's a lot of wants that I want to do.

I want to start a new business. I want to invest. I want to go to school. I want to go to college for- No, you need to get a job. I'll get a job. The job funds all of those want-tos. You don't have enough money to do all that.

You only got $30K. You didn't get $ 3 million. Okay, okay, well that is definitely out of... Let me help you with this. If you get a job this week making 50k, the 30k is free money and you can use it to pay off your debts. And you would be debt free making 50k, you'd be in a lot better position than you were four months ago before the voluntary buyout right? And then you can take, since you don't have any payments now you can start saving up money to go to school, saving up money to start a business.

Instead of just pouring out what I have now and then that would just be a risk. Well the problem is you don't want anything to eat with honey. When you pour out the 30k there's nothing left you don't have money to eat with. Right, right. You gotta have food money. That was my worry. Yeah, yeah. You need to go get a job yesterday. When did all this go down? Um this has been an ongoing situation since the last year. Yeah when did you get the check? When they cut you loose? Like three days ago. Oh good.

Okay, good. So it's fairly fresh. What were you doing? I was an automotive worker at one of the plants. They were basically very, they wasn't consistent. So I could have stayed I think my race would have been like 36 but because of the inconsistency one day is me working once some days not it just it wasn't guaranteed. Gotcha I'm sorry what did you

say you were doing automotive what? Worker. She's in Detroit. Yeah I was yeah. Oh you're okay you're on the assembly line, like putting cars together. We were the plant that sent the parts to the assembly. So you know a lot of people in that industry, I'm guessing? Not really. I just kind of stayed to myself and worked and went home. OK. Again, Dave said it and he's right. The best way for you to come out of this thing unscathed I just kind of stayed to myself and worked and went home. Again, Dave said it and he's right. The best way for you to come out of this thing unscathed is you've got to get employed quickly.

And you know enough people, you've got enough experience, you're looking at anywhere in the Detroit area, you've got to get back to work quickly. Vanessa, I'm not trying to be tacky, but I don't want you to think $30,000 is a lot of money because you're going to find out how quickly it's going to go away if you don't get back to work. It's not much money. You did not get much of a buyout here. And so you didn't hit the lottery. I know it may be more money than you've seen in one check. I understand that. And I'm not trying to be talking down to you or something, but the way

you're acting and emotionally is is that this is a lot more money than it is and you really don't have you really have a pretty serious problem you're unemployed and you need to get that problem solved as fast as possible hang on we'll send you a copy of Ken's book proximity principle which will help you with that process Candace is in Washington DC. Hey Candice, how are you? I'm good, how are you? Better than I deserve. What's up? Hi, okay, so my husband and I are, we have done all your steps, we are debt-free, we have money in our emergency account, and now we are in the thinking of investing stage. And investing in in the stock market

scared us, because it's not a world we know nothing of anything about. So my husband wants to invest in precious metals like gold. And I want to invest in a beachfront property or a lake property we can use as a rental. So my question is, what do you think is the better investment? At your stage neither one. Okay. Right now you need to just be doing your 401ks and Roth IRAs and some good growth stock mutual funds and I know you said the

stock market scares you and it scares you not because it's scary but because you just don't know anything so it's time to get, it's time to learn and start learning a little bit about how a mutual fund works. What a mutual fund is, is multiple people put money in it. That way they mutually fund it. That's where the name comes from. And what the fund buys tells you what kind of mutual fund it is. If they buy growth stocks with the money that people have mutually funded, then it's a growth stock mutual fund. And you hear people say that phrase a lot, I'm sure. And that's what we teach people and what I personally have put, Ken's personally put, our families have put our retirement into mutual funds and a mutual fund is 90 to 200 different stocks of America's best and brightest companies and so when you open up your mutual fund information

brochure you're gonna see companies like Exxon or Apple or Home Depot or Coca-Cola or McDonald's or something like that and you're going to go oh 20 years from now this group of stocks is going to be worth a lot more than it is today because for the last hundred years or so the stock market has averaged a little over 11% per year and those are the group of stocks going up in value and so that's what I would do I put my if you're out of debt you got your emergency fund I start putting 15 percent of my income

into 401ks and Roth IRAs and good growth stock mutual funds. I sit down with a smart Vestor Pro you can find one that we recommend at RamseySolutions.com we're not in the investment business but these are the people that will help you do that and have the heart of a teacher and they'll finish teaching you the lesson that I just started teaching you. Gold absolutely sucks. You're going to really screw up putting your money in gold. Your husband doesn't know anything about that either or he wouldn't be suggesting it. Gold has a horrible track record. Over the last 70 years, gold

has an average annual return of 2%. You'd be better off putting your money in a freaking fruit jar. So no, just because you've been reading too much crap on the internet, if you think gold is a good investment. No, it's not an investment. It's a good way to lose your butt. And so no, you don't need to do that. And no, you don't need a beachfront rental that you're going to borrow money to go do. You just got out of that. So no, you're going to be putting 15% of your income aside in good growth stock mutual funds and that is the shortest direction to your first million to five million dollars in net worth. I think

that advice is a little fuzzy Dave. Just as a casual observer. Could you be any more clear? I don't think that's possible. You know I think it's fun to remember that when you're investing, when you do anything that's new, there's two kinds of fear. There's fear that is good for you. Don't touch a hot stove. Don't stand in front of an 18 wheeler that's coming at you at 80 miles an hour. That's fear that keeps you from getting hurt, right?

You need good fear. The other fear is fear of the something I don't know how to do, but it's false evidence appearing real, F-E-A-R, and that's you holding the seat of your five-year-old while they learn to balance a bicycle for the first time. In their minds they're getting ready to die. In your mind they're going to be balancing and giggling within the next hour and they will probably scrape a knee in the interim and they will not die from it. Instead they will have a life of freedom because they can now pedal and balance and learn something that

they didn't know before. That's a good fear that you work your way through with knowledge and with practice and that's investing and that's investing in the stock market. The stock market is not scary at all, it's not unstable and it's not even that risky when you learn how to do it properly like we're talking about. Not buying single stocks, we're not day trading, not doing some stupid but thing you heard on TikTok, we're just put mine in your 401k baby, it's kind of boring. Well graduation does not come with a GPS. A lot of students are walking into the real world with what's known as no clue. The get clear assessment, find the work you're wired to do, student

edition is here. You get clarity and you build a real plan that they're confident in whether it's a major a trade or their first job. $34.99 the assessment will help them identify their strengths while the book will help them understand the results and figure out what's next. Fabulous for graduates. Get a copy today at ramsaysolutions.com slash store. If you're watching on YouTube or podcast click the old link in the description Noah in Seattle how are you Noah I'm good how are you doing better than I deserve how can I help hey so I'll jump into it really quick sorry this is super surreal talking to you so me and my wife

got married about a year and a half ago. And before that, two years before we got married, she got into a car accident and she didn't have active car insurance. And um, so she has a judgment, which is $80,000 about 83,000 to be exact. And we didn't know about this judgment until six months into our marriage. Like there was nothing on the record. There was nothing. Oh no, no, wait a minute. She knew she got sued. She had moved and she hadn't gotten any papers or anything. She wasn't served at all. So six months into our marriage we got a

paper saying we have this judgment we had to pay it. And it's to an insurance company I assume. Yeah. Who is the insurance company? It's through a like a processing like I Want to say collections but collections isn't what it is No, but I mean there's there's a judgment probably with the people she hit It's their insurance paid the bill and then they came after her Yeah, correct. Correct. Sorry. So who was the insurance company? Do you know? I'm not sure I can look at the paper. How old is your wife?

She's 21 now. She was 18 when it happened. So she just had no clue. Yeah. Okay. And you guys are, she's 21 and you're what? 20. And what's your household income today, hon? 75,000. Okay. And I'm assuming

you don't have piles of money anywhere. No, we're on baby step two and I just wanted to know this was our biggest and last debt to work on and I just wanted to know if... Your best route is I would take a run at it myself, I think. If not, I would probably spend $1,000 on an attorney and let them take a run at it. And your best route is to try to do a lump-sum settlement and Try to get this insurance company to say okay. I got a 21 year old kid just got married She's got no money. You ain't getting nothing Yeah, you could luck with your 80,000 dollar judgment, and this is how the conversation sounds I mean there they and once they get a clear picture that this is a

Once they get a clear picture that this is not a multimillionaire that they have sued, this is a broke person that has no money, that's brand new, married and 21 years old. Once they get that picture in their head, they're going to soften up quite a bit. Because they don't think they're going to get their money. Once they understand what they're dealing with, they don't think they're going to get their money. And that's what I want them to think. I want them don't think they're going to get their money. And that's what I want them to think. I want them to think they're not going to get their money. And then offer them, you know, 20,000 bucks to settle the whole thing. And then just go borrow that.

Okay. I would rather you have $20,000 on a credit card than $80,000 to a car insurance company. Okay. My father-in-law said that what we should do is do bankruptcy but I don't like that. Absolutely not. You're not bankrupt. Okay. That's dumb. No. Okay. He, you know, where was he? Where was this genius when all this was going on? When he can take care of his daughter and find out what the flip's going on. So no, we don't need his advice, I promise you. He means well, but he doesn't have a clue why this works.

So I think, how confident are you that you can walk into this phone call with this lawyer on the other side with a bit of a swagger and do this deal or do you need to hire an attorney to do it for you? I'm pretty sure I could do it. I could do it. Okay. Well you understand you're gonna paint the picture of you married this girl, you're not liable, okay? Under no circumstances. You know, so you can't get money from me and I don't have any either. And I just married her. She's 21. She's got no money. Yeah. And she was 18 when this happened and she had no money. That's why she didn't have any stinking car insurance. And so I've talked to the bank. The bank will loan us $20,000 on a credit card. If you'll take that as settlement in full, I'll give it to you. We'll take that and then take payments. No, we won't do that.

The only thing I'll do with you is a lump sum. I want you out of my life. And then you just begin to negotiate and find out the number and then see if you can borrow that much money. Because you can cut this at least in half. And I don't mind you borrowing because you're already in debt. We're just changing the name of the debt from 80,000 car insurance to 20 or 30,000 dollar credit union loan or whatever it is, right? We're reducing the total debt by this maneuver and then you got that item and your debt snowball and you make 75,000 a year and you go knock it out. But you're not bankrupt and so don't do that. You could threaten that if you want to threaten that.

Just go, well, my father-in-law told me to file bankruptcy, but I thought I'd call you guys and see if we could work some out. You know, that's kind of you follow the swagger here, right? Yeah. And if you feel like you're out of sorts, if you feel like they're beating you up in the conversation and you're getting, it's going to take about three of these phone calls. They're very unpleasant conversations you're not gonna find understanding compassionate pastoral humans on the

other side of this okay yeah these are ambulance chasing lawyers literally and be they'd literally chase ambulances for real. Okay. And so this is, you know, and they work for a car insurance company. God Almighty. What a horrible law job. And you got your law degree and this is the only thing you can do, which means you're not much of a lawyer. So yeah, this is who you got to deal with. And you're gonna be nasty.

And you got to, and you got to just go no, no, no, no. I guess I have to do what my father-in-law said and file bankruptcy. I don't know. No. If you can come up with a settlement number on a lump sum, I'll go down to the credit union and see if I can borrow it to help her out because I just married her. But no, no, no. What part of no don't you understand? It's a complete freaking sentence. No, no. This is how it's gonna go. You follow me, Noah? Yeah, I follow you. I don't want you you think that you're gonna make one phone call and they're gonna go Oh, we completely understand. We'll take 23 if they do that. I'll fall out of my seat

It's true stick to the script and I would go so far as to what Dave has told you Type that out or write it out and when you're on the phone because they've done this before and they will try to manipulate your emotions And I'm telling you to stick to the script give them no matter what no say No information like a politician running for office. No, what you ask them Give us a current address on you. No What's her social security number? No, what's yours? No, where does she work? No, I'm not talking about any of that We're not writing a biography on my wife, honey. We're trying to settle this Yeah, I'd repeat the same line over and over until they realized this is a kid that I'm not We're not writing a biography on my wife, honey. We're trying to settle this. Yeah.

I'd repeat the same line over and over until they realize, this is a kid that I'm not going to crack. And then they don't want to play. The only thing I can say yes to is bankruptcy. And then you get what's known as a zero. Yeah. So 20,000 or bankruptcy. Let's start from zero and go up.

Where are we going from there? I can file bankruptcy for a thousand bucks. So I'll give you a thousand bucks so she's going to file bankruptcy. Let's start from there if we got to. Come on, dude. Let's figure this out. It just occurred to me, Dave, I would really enjoy doing that once or twice on behalf of someone else.

Do you know what I mean? Just kind of call up and go, and just play the game too because we got no emotion in it. We'd really fun to mess with those people. We used to actually do that as part of our counseling here. And I quit doing it because we would get it all fixed and the consumer didn't have, the person that was in debt didn't have any blood in it. And so then they go screw it up the next month and not follow through on it.

But if they put it together, they don't screw it up. You would never do this, but it would absolutely melt YouTube if we did it live though Thoroughly enjoyed it. Could you imagine if we did that live folks beat the snot out of American Express? He's calling for a hobby No, it's so fun. No is uncle Dave and I've taken over this negotiation. I'm mrs. Savage I work for American Express you changed your name to savage it would melt I had one or lady her name was she named herself the Mrs.. Baskerville as in the hounds of

Hey George camel here listen we need to talk specifically about mama bear legal forms allow me to paint you a picture You plan a vacation you make a budget you book the Airbnb you build a spreadsheet of activities, because you're that person, you fire up the maps app and boom, trip of a lifetime. So here's the question, if you plan that carefully for a one week getaway, why are you just winging it when it comes to your will not having a will in place is like dropping your family off at a foreign airport with no map, no translator and no clue what happens next. So when you pass away, sure, your family will be grieving, but

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love your people well even after you've yeed your last haw, as we say in the South. So go to mamabarelegalforums.com and handle this tonight. Use the promo code RAMSY and you'll save 20%. That's mamabarelegalforums.com, promo code RAMSY. You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable

giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand. Head to ramsysolutions.com smart vester to get connected. Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramsysolutions.com smart vester. Janet is in Augusta. Hi, Janet, how are you? I'm fine, how are you? Better than I deserve. What's up? Well, I've got a little bit of a dilemma. I'll be turning 71 next month, and I am in debt with student loans that equal to right at $100,000, a little over. Wow. How in the world do you get $100,000 in student loans at 71?

Tell me this story. Well, I started back in 99 when I started with these student loans and they have just ballooned out from under me and I've been listening to you and I know that I need to work out a way to get out of debt before I leave this earth. So I'm looking for some guidance. What were you studying? And it was in your 50s right? Yeah I was in my 50s. I started going to college late in life. Went and got a BS degree and then I went on and got my master's degree. In what? In business, business administration.

All right and and then you did not end up making a bunch of money as a result or? I haven't made enough to overcome that, that's for sure. I've been paying on them, but it's just not enough to make a difference. Do you have any money? Very little. What do you have? Less than $50,000. And are you still working? Yes, I'm still working.

I've got two jobs. What do you make? I've got one that I just started and I'm not sure what I'm going to make per year, but it's probably around 35,000. And I teach part-time and I'm making right at 20,000 with that. Okay. How's your health? It's good. What is the job you just took that you think you're gonna make 35,000? It's a remote job selling cars. Did you do anything with that business degree and master's, specifically in the business world, some type of leadership or management role?

Yes. I was a dean for three or four colleges once I finished that, but I haven't been able to get back into that field. Okay, so you went and got education and then basically used that education in higher education. Correct. What's the most money you ever made? Ninety thousand. Good for you.

Yeah. All right. Um, well, there's no secret to this. It's just math. Okay. And that's what, that's what my brain is sitting here crunching. I'm trying to figure out, um, because we have, how do we find a hundred thousand dollars out of a $55,000 income with 71 years old? Um, if you found, if you found, if you lived on 35 and put 20 a year on 100, you'd be done in five years you'd be 76. Okay? Okay. And so the problem is we have a pretty

good sized hole and a medium to small shovel. Yeah. And so that's what's bothering me mathematically and Is you have any I'm sure you've already thought these things But I'm just I'm poking around with Ken is there any chance you get back into some kind of Dean's role? Even if it was temporary and made that kind of money for two years Yeah, I have actually been trying I've just years. I have actually been trying. I'm trying to do it at the same time, trying not to have to relocate to do it. Yeah, I think you're going to have to relocate if you want to get rid of student loans.

To that end, what is your living situation? Do you rent or do you own your home? We own. Wait, wait, wait, wait, wait. We buried the lead here. Who's we? We! Where's we? We? Where's he?

He's disabled. What does he make on his disability? Right around $1400 a month. Does he have any money? No, sir. Okay. So we don't have any money. What's our house worth? Our house is worth

about 245, 245k. What do you owe on it? I rate it a hundred. And before we think relocation, I'm just digging here, the teaching job, is that a part-time teaching job in a local public school system? What is that? No, she says online, didn't you? No, she's selling cars. It's online and part-time. Oh, it is.

Oh, it's online. Yeah, everything I'm doing is online. I heard that. I got that. I heard you were selling cars. I didn't catch the teaching thing. But let me ask you this. If you were to teach locally and it wasn't online, what do you think your salary

could be in the school system, whether it be private or public? Local community college. Yeah, local, whatever. What could you make? I would say we would probably be looking at about 50 or 60 thousand. Yeah, I was thinking 60. I think you're going to be doing that. We got to get your income up at least for a couple of years so you can knock this thing

out. Otherwise it dies with you. Here's my recommendation. I think you need to try to get full-time in some type of education role locally. Then I would be trying to make an additional $30,000 doing online teaching. Now, this is going to work you to the bone, but again- For two years and you could be clear. Then you can get through this.

You have the best income potential because of your stellar education background. Yeah, and you just live on beans and rice, and for two years we throw 50k at this. But you got to go make the extra 50k right now. And not over and above what you're making, but enough that you've got 50k margin in your old numbers. and do that for two years and you'll be 73 and be clear and this thing doesn't keep stay with you up into your 90s hovering around wondering when they're going to come do something to you and that's what's scaring me for you this whole

thing scares me and so the the lesson for those of you out there is twofold one is if you're going to go back to school at any age or go to school at any age, pay for it or don't go. The other one is that if you're going to go make 90 and you owe 100, you need to get it paid off real fast so that you're not sitting here eight years later or five years later after she last made 90. And so for those of you listening, that doesn't help Janet,

but part of listening to this show is figuring out what you can learn from it so that you're not 71 and having this exact conversation. This is an unpleasant conversation. She's in a pickle. Is a house on the table, Dave, or no? I don't think so. I don't want it to be.

I don't think so because the student loan dies with her. And he gets to keep the house. And so no, I'm not going to sell the house to clear it at 71. But I would do a lot of things to try to get my income up for a 24 month period of time. And just to get, just to spend the last two decades or whatever of my life without Freaking Sally May circling me like a buzzard Connor is in Nashville. Hey Connor. How are you? How's it going sir better than I deserve what's up?

So I have a Jeep Wrangler and I'm trying to find a way to get rid of the payment. I owe about 17,000 on it. Mm-hmm Okay, what's it worth? It's about, well, right now it's inoperable, so it's only worth about $3,000. Why is it inoperable? The aluminum on the block cracked. Oof. I'm clueless about that, but what's that going to cost to repair that? It's a whole engine. He blew the engine. How'd you blow the engine? $9,000.

Hey, I didn't know. How did you blow the engine on a downed gum Jeep Wrangler? You don't have to ask Christ for that question. No, I'm asking you. You were jacking some four-wheeling. You were running some R's, buddy. What does that mean? And then you hit the creek and the creek was cold and the engine was hot. I'm completely lost right now. I have no idea what these things are saying, James. I love this terminology. Did you mess this engine up yourself? Yeah. I don't believe so. Okay. All right. How many miles on this car? 130,000. Okay. 9,000 is what's gonna cost to fix it? Yes sir. That's a new engine. The car's not worth a new engine.

So you need to go to a salvage yard and buy a used engine out of a wrecked Jeep. That's probably about three grand. Probably going to take you about a grand to get it in. What do you make? About 48 a year sir. Okay. Yeah, you're going to be working a lot of overtime to clean this mess up. What are you driving right now?

My GMC Sierra. What's it worth? I want to say about 10 grand. Okay. All right. Yeah, the problem is that, I mean this Jeep fixed is probably worth 12 right? Yes sir. Okay, and so it's worth salvage right now, and if you spend four on it you can make it

worth 12 again, and so you need to scratch up the four and fix it that way and then sell it and that's how you get the most out of it that's that's your repair but no one buying that Jeep is gonna be expecting a brand new engine in that Jeep from Jeep from Chrysler no thank you they're gonna be buying you know they're buying a used Jeep that's probably on its last run it's 130,000 mile Jeep and you put a 40,000 mile engine in it from a junkyard and that's perfectly acceptable in that situation. If I was buying that Jeep, I wouldn't think anything about that. That wouldn't bother me a bit.

Yes, sir. And so, yeah, you scratch up the money. Start talking to your mechanic about hunting down a bargain on a 40 or 50,000 mile salvage engine out of a junkyard and then what's it gonna take to install it's probably at least a grand change it out and you need the cheapest mechanic in the world to change it out this is not some retail thing it's certainly not the dealer sir I'm the cheapest mechanic in the world I'll do it oh Oh so you can pull the engine? Yes sir I have the pulley in the garage. How'd you blow it then you know? I'm the

one that checked it I checked underneath you know where the valves are on the engines down on the left side it expanded too much and cracked right there when it cooled off. Yeah but I mean how what did you do that I mean you think the engine was just was flawed because 130,000 mile engine shouldn't blow in that car. Honestly, I'm not sure if it was flawed. Uh, that's what I've been thinking. Cause I, that's my daily driver.

I don't take the GMC to work until I started having to, but you weren't, you weren't screwing off muddin or something. No sir. Okay. Cause that, that's how you blow those engines. I mean, you run it because they're not that great an engine to start with and they won't handle high Rs and you run high Rs through that thing and then hit it into a, and hit it into a temperature change. It'll blow it in a heartbeat. So,

all right. Yeah. Oh, wow. This is great. I thought I was sitting in on a mechanic show on Saturday morning. Remember those guys? Well, those guys still around. Yeah. They've got, it got to be in every local market. There's got to be a mechanic show in every local radio. No, no, there was a big, there was a famous one that was nationally done. I don't know. Back when I was first doing talk radio, they were great. I'm afraid to ask this one. Ask quickly, we'll move on. Okay. Are high Rs, RPMs? Yes, sir. Yes, sir. Okay. Yes, sir. Thank you. Audience members are clapping for me. They know how clueless I am

There's like real men out there going. Oh, he got it. It's not a real. It's not a masculine thing It's just a bad joke. I'm joking. You can be masculine and not be a mechanic high Rs But the I don't want to say it. I'm glad I got that but you know, we've Daniels got Daniels got a Wrangler Oh, yeah, they bought when he was 16 and then I ran it for a while while he was in college and gave it back to him as a graduation present. Is that the green one? That's the green one. I told him the other day if he ever gets tired of it, that's a good looking Jeep. It's a good looking Jeep. The engines are crap. It's a little four-cylinder piece of crap. Nothing. I didn't know that you knew engines like this. Well, I don't. You're a

Renaissance man. Yeah, there's that. Anyway, open phones at 888-825-5225. You probably just learned everything I know. Matt is in Raleigh. Hey, Matt, what's up? Hey, how you doing, Dave? Better than I deserve. How can I help? Well, my wife and I took financial peace when we were engaged. We've been married almost a year now.

We're in pretty good standings, really. We're on step 3B. Oh, good. And we're on step 4B. And we're on step 4B. And we're on step 4B. And we're on step 4B. And we're on step 4B.

And we're on step 4B. And we're on step 4B. And we're on step 4B. And we're on step 4B. And we're on step 4B. And we're on step 4B. And we're on step 4B. And we're married almost a year now. We're in pretty good standings really. We're on step three B. Oh good. And we're considering a pretty substantial life change

actually of getting out of our rental house. We pay a decent amount of money. It's a nice place, but we don't really need it at the moment. How much do you pay? With utilities, it's probably about 2100. Okay it's just two of you? Yeah. Okay. I mean it's like a little three bed two bath house on point seven acre. Yeah. Like it's a nice place but it's more

place than you need for a rental. Yeah while you're trying to save up money for a house it's too much right? Right. Yeah. I've been blessed with great in-laws. They have a finished basement. For them, they've allowed us, they pretty much agreed to let us come down there for a year or two, move in, just to help us pocket a lot of money that we can. In this time period, I would like to know, should I continue contributing to my retirement or not up to you The more you put in the retirement the longer you're in your mother-in-law's basement Yeah, that was the same thing I had in mind I know it's I've heard you say like up to three years Yeah, no being out of retirement, but not being in your mother-in-law's basement. I didn't say that

so I Hey, you guys do what you want to do. I will tell you that Sharon and I would move to a cheap one bedroom apartment and continue our autonomy and that would slow down our house payment save up. You've done very, very well so far. I feel very confident you'll be able to buy a home doing that without losing your autonomy. I'll just leave it at that, or privacy, or whatever else we want to call it. And that's not to say that your in-laws aren't wonderful people. You preface this with their wonderful people. Most of them are wonderful people at a distance. I couldn't agree more. I got nothing to add to this. I just don't think it's healthy.

It's not bad, but it just does. I know, there's a difference between healthy and negative. You have it in your head as it's going to be one thing and it usually turns out to be something else. That's the problem. That's what I mean by the healthy part. It's not negative. It doesn't mean anybody's ugly at each other, but it just at some point gets to be old. It's just like- Because it's not natural. Maybe I'll say it that way. Well, it's like, yeah. It's just, yeah.

Short term, okay. Very short term. Like emergency. Yeah, this is not an emergency. This is just a, this is a money play. And so I personally wouldn't do it. I'm not mad at you guys if you do it but if you do it I would shorten it as short as I can make it and that makes the shorter time you're there the better the probability is you get out of this with everybody's relationship intact and so you know get in and out and that means yeah I would stop my retirement and go crazy on saving for a down payment.

Personally Dave and Sharon we moved into too big a thing when we first got married. I went back and visited my old elementary school principal told her where I was living and she said you're a fool get out of there you're spending too much you need to go rent something cheap and I listened to her and I went and cut my rent in half. We moved into a one-bedroom and bought our first house a year later and so and that's even when we were broke and doing stuff wrong. Buying and selling a home is a big deal and you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey Trusted real estate agents.

They're hand-picked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day. To find a Ramsey Trusted agent near you, visit ramsysolutions.com slash agent. RamseySolutions.com slash agent. Hey guys, I love summer, but do you ever notice how fast money can get out of hand this time of year?

You know how it is. You want to make all these great memories. It's so easy to just put your brain in beach mode and swipe that credit card. But then you end the summer saying, where the heck did all this debt come from? Look, I want you to have some fun. I just want you to plan for it with a budget. The Every Dollar Budget app is the easiest way to make a plan for your money. And I'm telling you right now, when you do that, you'll see that a budget doesn't confine your money. It defines it. It puts you in control of where

your money's going. So you can enjoy your summer without overspending or going into credit card debt. So go download EveryDollar for free in the App Store or Google Play right now. If you're tired of living paycheck to paycheck and wondering where your money is going, your first step is getting a plan, a budget. Our team's hosting a free budget trainings, several of them this month. That's why it's trainings with an S. You'll learn step-by-step how to make it stick to a budget using EveryDollar. Plus you can get your biggest budgeting questions answered live at the Q&A. The Q&A might be the most fun of the whole thing. Spots are limited. Sign up for free at EveryDollar.com slash webinar. Darla is in Tulsa. Hey Darla, how are you? Great. How

are you, Dave? Better than I deserve. What's up? It's a pleasure to speak with you. I started following you. My husband and I started following you in 2005 We got totally out of debt started investing and saving and We're both retired now and living with a million dollar net worth Way to go!

Enjoying life. Proud of you. You've been a blessing to us. Good work. How can we help today? Okay, my question today is I want to try to encourage my granddaughter who just graduated high school. She's working.

She's going to start college in the fall. She's been taken some classes already, but basically wanting to help her get on a fading point. And I'm thinking of doing some kind of math with her, you know, can show us where to get saved. My husband and I are not doing that. You're breaking up. Can you speak direct into your phone? Yes. We're wanting to get our granddaughter on a saving plan to help encourage her. She's 18. By doing a match.

How many grandkids do you have? Two. And how old is the other one? Eight. Okay. All right. Well, the only reason people save, the only reason people delay pleasure is for a greater good.

So there has to be a target, a goal, an inspiring goal, a dream that is dreamed in high definition. So what is it this 18-year-old is saving for other than to please her grandmother? Well, she's going to be responsible for some of her own college expenses, okay, I know that She'd like to have a nicer car, okay Other than that we haven't really... Okay, I would define the goal and then show her how you matching will help her get to the goal faster. But that needs to have a very concrete thing. If it's just throwing money into an account into eternity, it doesn't feel like it's attached to anything. It has no

motivation to it. So if you say, okay honey, you got a better car. So what's your car now? It's a $2,000 car do we want we want a ten thousand dollar car so we need eight thousand dollars okay if I'm matching that means you need four thousand dollars how much can you save a month I can save two hundred bucks a month okay how quick we're going to get to four thousand dollars then right because every time you save two hundred I'm gonna put two hundred with it after you get to the goal I'm not matching you till you get to the goal but when you get to the goal. I'm not matching you until you get to the goal. But when you get to the 4000 I'm making these numbers up. They may be different.

Sure. But whatever it is honey you save as quick as you get to 4000 and I'm going to coach you and help you look at your budget so you can get there. No spending. We're saving for a better car. We're saving for a better car. We're working for something big. We live like no one else so later we can live like no one else.

No discipline seems pleasant at the time but it yields a harvest of righteousness. And honey, the reason I'm teaching you to do this is the key character quality of people who are able to build wealth are those who are able to delay pleasure for a greater good. That's called saving. I want you to build this muscle and I'm going to help you. Okay. And only pay it... don't pay it month to month. No because it just builds up in an account and then she's going to come over and want to buy a car half the price. Right.

And quit early on the skid deal. I was wondering how I could keep an eye. Yeah, I want her to play through. Yeah. Whatever it is, I don't care what we're're but let's set a target with an actual dollar amount and then we can back into How many months it's going to take to get there and then you get to ride alongside her and coach her and go when you Get there and you ring the bell. I'm doubling it and we're gonna go out and pick out a car, baby Okay, or whatever the thing whatever the thing is

Yeah, I can see how that was Would make quite a difference than just doing it month to month. Yeah, but the month to month is coaching and cheerleading. Yeah. And you earn the right to do that with the amount of money you're putting towards the doubling. Okay. So this is a matching gift. You know, and go ahead and put a cap to put an exact amount on it. It's not more than this. It's not less than this Okay, once we agree in my example it was four thousand dollars because we're trying to get to eight thousand dollars But that was an example. I don't know what the numbers are But whatever the number is that's the number you agree to and and if she comes up, you know

$500 short of that she needs to keep working and and if she comes up you know five hundred dollar short of that she needs to keep working and if she comes up five hundred dollars ahead of that that means she's got an extra five hundred not I match an extra five hundred because we set a deal and can stick to that and and then that enables you to do it for the next one too because it doesn't get out of control here but the whole time

the the important thing is not the four thousand dollar match the important thing is teaching her the principle and she gets the dignity of delaying pleasure for a greater good, which is a sign of emotional maturity, whether you're 58 or 18. Somebody that can put off, you know, can endure pain for a greater good. That's a big deal. It's hard to find people do that. It is and I think it's great advice. I'd only add that what I love about what Dave is telling you to do here is you're gonna find out what your granddaughter really values about savings. And there are some people, we hear debt-free screams all the time, where somebody may take longer. They had a six

month or maybe a year they fell off, they got started in the baby steps, and they fall off, then they realize, oh, that was stupid. I need to get back on. Everybody learns at their own pace. And by giving her this big goal that she's got, and then saying, if you hit it, I match it, even if she struggles and falls off, but eventually gets back on,

I just think it's the power of focus. It's a powerful thing. And if she falls off, fine. But this allows her to learn the process so that when she finally gets there, it's so much more valuable. It sticks longer. Paris is in Orlando, Florida. Hi, Paris. How are you? I'm good. How are you? Better than I deserve. What's up? Okay. So I have a $895, I think it's $45 car payment.

Good Lord. And, um, yes, I am on currently on baby step two. And, um, my issue is my car has given me issues. It's given me trouble. It's starting to get, you know, breakdown. And I was thinking about trading it in however. I am upside down I Owe 25,000 on it. I bought a brand new 2022 and I still owe 25,000

The key a tell you ride what's wrong with it Well, I think the transmission is slipping and cars three years old injection issues. Yes. The issue is, um, my job requires me to drive a lot. So I have about 145,000 miles on it already. Yeah. But that kiosk transmission would go longer than 145,000 miles.

Theoretically, that's not a piece of junk car. That car should run. No it's not. So I was thinking about trading it in. No you don't need to trade it in. You got a mess. You've been trading in enough. That's how we got in this mess so you owe what on the car total a little over 25,000 okay and it's worth what and 300 what's it worth the last offer I got was 10,000 okay and what do you make mmm a little over 100 okay are you single yes okay how much would it cost to fix a transmission if that's the full issue? I don't know. A rebuilt one will be $7500. Okay. Now you don't need, I mean if you need to get rid of the car, first thing we do is get

it paid off because you have a ridiculous car payment and you're ridiculously upside down. So now I think if anything you've got to fix the transmission and keep driving it a while if it blows out on you. You don't have a choice. You're stuck in this thing. You're so far into it and you've got a crummy interest rate too, don't you? No, it's not too bad.

It's like 4%. Okay, not as bad as I thought. All right we got a horrible car payment I know that. Yeah you have identified the problem and it is your cars so don't trade again and make it worse. We need to clear this and so you know $25,000 in debt, $100,000 income, no food, no eating out, no going on vacation, sell so much stuff the cat's hiding. Our scripture of the day, Galatians 1, 10, am I now trying to win the approval of human beings or of God? Or am I trying to please people?

If I were still trying to please people, I would not be a servant of Christ. Ronald Reagan says, I've been criticized for going over the heads of Congress, so what's the fuss? A lot of things go over their heads. You can see him doing it with a head tilt and a little wink. That's classic. He might be the funniest president we've ever had. Oh, I'm gonna go ahead and say absolutely. Of course, we don't have any footage of Andrew Jackson. I bet that dude was funny. When he wasn't mad, yeah. Joshua was in Lexington, Kentucky.

Hey, Joshua, how are you? Hey, I'm good. How are you all doing? Better than I deserve. What's up? My question is about tax brackets. So me and my wife, we make about 80, maybe close to 90,000 a year together. I've seen a tax bracket the other day that showed if you make like above 97,000, it would put you in like the 22%. So I'm wondering if I can kind of control my hours and how much I work. I was wondering if we get close to that, should I kind of aim for just below that, would that

save money or? No, that's not how it works. These are what are called marginal tax brackets. The first so many thousands of dollars has zero. The next so many thousands is at whatever percent. The next so many thousand is another percent. And so if you make a little bit over, if you have a bracket creep here and you go over the bracket, it's only the amount of money that goes over the bracket that is at 22, not the whole thing. Okay. So if you make a thousand dollars over, only the thousand is taxed at 22. Everything else is taxed like it was previously.

Okay. So never slow down working because of tax brackets. The best thing that can happen to you ever in our current system is to make so much money that you have the highest tax bill you've ever had because that means you made the most money you've ever made. Yeah, okay that makes sense. Because we don't have a 100% tax bracket yet. I'm glad you said that, it's not out of the realm of reality.

Well in the current land we live in I think we're okay, but you know you never know when the socialists are in trouble or in power, so put the rest of it the capitalists in trouble so alright Stephen is in Nashville hey Stephen what's up hey how you doing Dave thanks for taking my call sure okay I I have a quick question for you hopefully pretty easy my father-in-law and mother-in-law. When he was younger, his dad went through and they had some type of investment account that they contributed to pretty much from when he was a little kid all the way up until he was 18 and a little bit on and he didn't get access to that money until he was about 25. But he got access to that money and then was able

to pretty much almost pay cash for a house Because it had been invested for so long and everybody just kind of pitched in as they went So this last Christmas they came to me and they said hey want to do something similar I don't really know what my my dad did But we want to do something similar for your kid. So their grandchild And I don't know, they pretty much just told me whatever you can come up with, both sets of grandparents and us as parents and some of the other immediate family want to contribute to it. He's a year old right now. So if we

do that for, you know, 17 years or so, hopefully it'll be a pretty hefty sum there. So one, I want to ask about what investments are they looking for? How should I set that up? And then two, when it comes down the road, I really don't want to, you know, give an 18-year-old, you know, if it's half a million dollars or something crazy at that point, how do I make sure that that is not accessing maybe like 25 and then the tax implications and all that? Okay, cool.

Good question. If it's saved for college only or for education only we of course would use the an ESA an educational savings account or something along those lines but I don't think that's the goal here. So you can sit down you can go to RamseySolutions.com and click on SmartVestor Pro, find a SmartVestor in your area that you like and sit down with them and they'll help you get that account open and explain to you everything about how it works exactly. The basic principle is this, a child under 18 cannot do contract law in any state in the United States.

They cannot contract for something. So they can't open a bank account. If you open if you open a kid bank account or a kid investment account, it's called an UTMA a uniform Transfer to Miners Act UTMA and so anytime someone says I have my kid has a bank account They don't the kid has an UTMA and the UTMA is in the kids name but there is a custodian of the account that would be you okay the person that's in charge of the money until they turn 21 okay at 21 you lose 100% control of it technically technically speaking. Okay? And so, and the income is taxed at their rate and unless this thing ends up with a million dollars in it or something, there's not going to be enough income that it creates to be

taxable. So you're probably going to have no taxes on the account because the income it creates is not ever going to be enough to really do anything. And so, you know, that's the, it's a very simple thing. You're opening an investment account, and I would just put it in growth stock mutual funds. I'd pick out, what I'd do is pick out one good growth stock mutual fund that's got a long track record and just open the account.

Most of those require $1,000 to $2,500 to start them. And then you can just throw money in whenever you want or you can systematically have it withdrawn from your checking account and go in there. That is actually what we ended up doing, Stephen, because the current college savings programs weren't available when our kids were little. So we simply saved money in our kids' names and the weird thing was by the time they ended up going to college we didn't need the money for them to do that so I just wrote the checks for college and then I was able to hand them that account after they got married and

that helped. I'm a foreigner so like if you want to use that money for college, follow me. I want them to be able to do that. But at the same time, so that was my other question. So if I use the specific one for education and he ends up not going to college, what happens to that money? It's gonna be taxable. The income on it will be taxable. Not the amounts put in, but the income.

That will be taxable at that point. And so, you know, that's what we're looking for, is that, you know, so I think probably the UTMA is the best plan. Now at 21, it's his technically. And so I ran into this moral dilemma of if there's $200,000 in their name and they're doing cocaine, how am I going to keep them from getting this money at 21?" And basically I just made the decision as a parent I would steal it. Okay. Completely illegal.

Okay, you can't do that. It's illegal, okay? But you can get sued by the kid and every friend the kid ever had and all that. But before I give my kid the money to overdose on cocaine, I'll just steal it and I'll suffer the consequences. The only other thing you could do is put it into a trust. I would not do that. That's what I had heard from other people which trust and I've always, you know, I've been listening to you for a while and you usually say it's not the route to go. It's just too much crap. It's just too much trouble to deal with. This is a simple account.

It's a mutual fund account. Got the kid's name on it. You're the custodian. If you want to move the money from the mutual fund to a different mutual fund while the kid's going, you're in charge of the money until he turns 21, then it's his. And I'll give you a, you know, the way I didn't have trouble with my kids was I didn't surprise them at 21 and go hey here's a couple hundred G. No we didn't do that because that's how you know they hit the lotto and

they lose their dad gum minds. So instead you know we start talking about these are your mutual funds when they were 11 and what you do with mutual funds is you do smart things like you go to college or you buy a house or you do something like that. This is not really money to spend its money for your future and here's how and look here's here's how it grew and we looked at the statements together when they're

twelve and fourteen by the time they're fifteen they could calculate the value of the account and so you just teach them as they go in that don't surprise them and then you have a better result by handing it to them when they're twenty one good show today Ken. Guys in the booth, booth boys, good job. That puts us out of

the Ramsey Show in the books. We'll be back with you before you know it. In the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus. Hey you guys, I was shocked to learn that 88% of you out there are sharing the Ramsey show. I mean that is so incredible. Thank you so much. And I want to tell you that we're making it even easier to share.

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