The Ramsey Show - YOU Are The Only One Responsible for Your Financial Future

Episode Date: September 25, 2024

📱Watch the full episode for free in the Ramsey Network app. Ken Coleman & George Kamel answer your questions and discuss: "My parent asked to borrow $20K for a scam," "My church is asking me to guarantee a loan," "How do I capitalize on my new $210K salary?" "I lost my job and don't know how to pay my bills," "I drained my savings in a custody battle," Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 💻 Visit NetSuite today to learn more 🚨 Get 15% off a medical emergency kit at The Wellness Company 📖 Learn More about Timothy Partners 🏛Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 💼 Join the Crusade! Apply Now! 🎟️ Reserve your seat for Summit 2025 today! 💵 Start your free budget today. Download the EveryDollar app! 🛳️ Live Like No One Else Cruise 🛒 Shop the online store at Ramsey Solutions Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Welcome to the Ramsey Show where we help you win in your life. We're going to help you win with your money, win in your work, and win with your relationships. 888-825-5225 is the phone number. 888-825-5225 is the phone number. 888-825-5225 will get you in. I'm Ken Coleman. George Camel is with me. We are affectionately known by many of you out there, certainly on social media, as the root beer float.

And George believes he's the root beer and I'm the vanilla ice cream. I take issue with that, but that is why. Depends on the day. Depends on the day. We'll see. So we will see what happens today. I take issue with that, but that is why. Depends on the day. Depends on the day. We'll see. So we will see what happens today. I can tell you this. He and I actually do enjoy being together, and we love coaching people up.

We try to have fun while we do it. So this is not your boring money show. I promise you that. Robert starts us off this hour in Los Angeles, California. Robert, how can we help today? Hey, thanks for taking my call. I really appreciate the time. I was calling because I had a family member recently request a loan from me in the amount of about $20,000. And so I started digging into it a little bit, and it

looks like they got suckered into some type of investment. I hesitate to say scam, but it looks like they have lost about $60,000. And they are requesting this loan in order to be able to withdraw the funds. The brokerage that they are working with has said that they need about 30% of the amount that they've put in in order to allow them to withdraw the $50,000 that is, or $60,000, excuse me, that is locked up in that account. Yeah, that's not how it works. Yeah, that's a complete and utter scam. Yeah. So what did you say?

Well, I said I wanted to look into it a little bit more, and so we dug into basically how all the accounts and everything were connected together and it ended up getting paid out of a crypto wallet. And so there's no way that you can basically file for fraud claims. I just feel horrible, but they're still kind of under the impression that this is going to be okay if they just put in another $20,000. And I just can't. I don't know. So what's your question? What's your question for us? I mean, should I give them?

No. It sounds like a scam. No. Do not give them a dollar. What do you think? What was your answer before you called us? Well, it's just I hate saying no to family, and I just feel really bad about it, and I don't like lending money to begin with.

And yet you're feeling bad about this? All you need to say is no. No, I'm not doing that. How close is this family member it's a parent oh boy well if it's my parent it's a very different conversation no it's not well it's it's much more hey mom dad no i will not allow you to be a part of this scam anymore if it's a cousin i'm going hey you do you well you but i appreciate that george but you can't say that to mom and dad because he can't allow them to do anything. He can say, I am not

going to participate in this because this is an absolute scam. And what you're asking me to do, mom or dad, is to burn $20,000. And I did my homework on this. This is a scam. I'm not going to give you $20,000 to be completely ripped off. The answer is no. I'm so sorry. I'm happy to walk you through my answer on this, but I don't think it changes. The answer is no, because then you're going to resent them. Do you want to resent them? No, I really don't. I just don't know how to respectfully, I mean, I really want to respectfully talk to my parents in a way that, you know, helps them, but it just, I mean, I just don't know how to respectfully I mean, I really want to respectfully talk to my parents in a way that helps them, but it just...

I just told you. Was that too harsh? No, I think you're right. The respect is as you explain to them, I love you too much to see you continually get scammed. But wait a second.

I appreciate that, George, but no, he gets scammed. If Robert gives them $20, he's getting scammed. The money part's gone. We're not even dealing with giving him a dollar. Well, but he wants to be respectful. I feel like you're more respectful than I am, George. I don't know. I feel like I laid it out there.

I'm trying to think if my mom or dad was going through this, I would have a real hard conversation. What would you say to your mom and dad? I know your mom and dad. They're nice people. Very kind. I would say, you hard conversation. What would you say to your mom and dad? I know your mom and dad. They're nice people. Very kind. I would say, you can do what you want. You were grown adults. But I know with 100% confidence this is a scam.

Right. And you need to cut your losses now before you continually lose money. I don't want to see you guys in poor financial state. And as to the $20,000 they asked from you, how do you address that? I will not enable this behavior. And I don't want to be a part of this scam. Because if I give $20,000 and it then gets disappeared to scammers, now I'm complicit. I'm an accomplice. Yeah, we're back to square one.

So this is not going to be fun. Do you think they're going to be angry with you if you don't give them the $20,000? I mean, we've had a couple conversations about it. I think the issue is I make a fairly good income right now. I have about $125,000 a year income. I've got the money and they know I have the money. And they've been out of work for a little while. And I just, I feel horrible because I think they, I think a lot of this is on credit. I don't know how much of the money that they put in is on credit,

but in order for them to, I imagine it's somewhere in the $25,000, $30,000 range, and I don't know how they've managed to pull that off, but I just feel horrible, and I'd like to help them dig out that. Okay, so the way you answer is not by giving money. And you didn't answer George's question. Yes or no? Are they going to get mad at you if you tell them no? I hope not.

I hope not. I don't think it would ruin the relationship. Okay. But anyway, you've kept up for a little while. Let me switch gears real quick because George is a little bit more adept at this stuff. At least I think you are. It's very kind to assume that. Thank you.

I don't know why I'm thanking you. Robert, listen in here is there a way for robert to get on the phone with this with this crypto company and just kind of play a little john wayne here like hey i'm the son and this is what my mom or dad is telling me this is a scam i'm coming after you i'm gonna blah blah blah is there any chance that he at least gets on there and kind of says, they're not giving you money. Give them the money they gave to you. Give it to them.

Give it back. You don't need another deposit or whatever this weird deal is. Is that even worth a college try? I feel like it is. I don't know that scammers would be very complicit in allowing, oh, never mind, as soon as you pushed a little bit. I think he's going to have trouble getting pushed a little bit. I think he's going to have trouble getting in touch with anyone. I doubt there's a phone number to call.

I doubt there's an email to even get in touch with these people. Robert, what do you know, having done some research on these folks? Yeah, so having looked into them a little bit, it looks like there's a couple of ways to get in touch with them, but most of them are encrypted messaging apps like WhatsApp or Telegram. So it's not a legitimate. If it's on WhatsApp, you're a scammer. No legitimate company says, hey, reach out to us on WhatsApp. That's a great point. All right, well, so much for that. I was trying to give you some hope.

Yeah, but I would do some digging on the internet and find out stories of people getting scammed from this exact company. I would file a complaint with the FTC, CFPB, all of the legitimate agencies that deal with these kind of scams. PB&J. PB&J even. Report it to them all and then say, hey, mom, dad, listen, this is not just me talking. I'm trying to spare you from more harm to your financial life. And if there hurts the relationship, you know, the old famous quote, choose guilt over resentment. I'd rather you be guilty that you didn't give than be resentful because you gave

and you saw them continually burn holes in their bank accounts. That's tough. You know, George, I feel so bad for his parents. Been out of work for a while in the get rich quick schemes. This is where all of this happens. They're desperate. They're looking for a way out and they think this will be it. They said if I give them 50, they'll turn it into 100. And it's gone. Heartbreaking. I'm so sorry, Robert, but you can't control the people. The best you can do is warn them with all the data and passion that you can. If you're desperate right now financially, get my boy George's book, Breaking Free from Broke. Get it right now, RamseySolutions.com. It'll help guard you from this stuff. Please, he warns you. He'll take care

of you. But if you're broke, hang tight. Get George's book. We'll be right back. This is The Ramsey Show. One of the questions I get all the time is, which life insurance company should I use for my term life policy? A valid question since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision. That's why the only company I use and have recommended for over 25 years is Zander Insurance. Zander is a broker who shops the top term life companies for you and finds the best rates available from the only plans I recommend. They also save you time. Whether you want to work online, over the phone, or via text,

their team will cater to your needs and help you make the right decision. This is an absolute necessity, and Zander has made the process easy and convenient. Call them at 800-356-4282 or visit zander.com for instant online quotes. Welcome back to the Ramsey Show. I'm Ken Coleman. I'm alongside the one, the only, George Camel. He is without comparison, folks. That's just all I'll say.

And he is our resident money expert today. He'll help you figure out what to do with it. I'm going to help you earn more of it. How about that? So you've got the guy who wants to help you make more money and the guy who tells you what to do with the money. That's quite a combo. Winning team.

And I see you've got one of your nicer jackets on today. It's a sportsman varsity jacket, I think is what they say. Is that what it's called? I don't know. I was hoping you could tell me's a sportsman varsity jacket, I think is what they say. Is that what it's called? I don't know. I was hoping you could tell me. That's no varsity jacket. Got it. It's missing the leather sleeves and the letterman.

Do you even know what it means to letter in a sport? I never made the team, Ken. I think that's pretty obvious. I know. No one is shocked by that at all, but we still love you, George. Thank you. And you are our coach today, so where's the whistle? Let's get you a whistle and a hat.

Whistles are obtrusive. They might be. Jim is up next in Little Rock, Arkansas. Jim, how can we help today? Hi, how you doing? Yeah, I'm calling because our church is expanding. We're adding on to the building, taking out a loan. Our church collects decent offerings every week and month,

but they want some guarantors to co-sign for the loan. Our church collects decent offerings every week and month, but they want some guarantors to co-sign for the loan. How big is the loan? The loan is going to be about $3 million. And what kind of offerings are... Yeah, tell me about those church offerings. The church offerings are about $15,000 every week. The loan amount would be like $17,000 a month. So they want you to take personal risk for a $3 million loan. A few of the members. Are you on the leadership team? Yes, I am. Well, how do you feel about this? I'm not at peace about it.

That's why I called, to be honest with you. We have some people that have done it. Yeah, I wouldn't do it. I wouldn't do it. I guess I'm just kind of shocked that they would ask that. I agree. That's a very uncomfortable position to put you in. The church should never have to ask individuals to be guarantors on that. If the church can't service that loan, I don't know what they're thinking. So yeah, the reason they need the guarantor is because

the lender doesn't believe the church has the finances to pay the loan. That should be red flag number one. Yeah. Waving in the wind. And number two, if I'm part of this church board, I'm going to say, what would it take to cash flow this through, you know, a giving through the church? Who's driving this? Who's driving this expansion idea? Is it the pastor? It's a combination, pastors and leaders. Yeah, but I mean, come on, who's the real cheerleader?

You know the answer. Who is it? The pastor. Yeah, that's what I thought. Yeah, he needs to cool his jets. The answer's no. I wouldn't touch it with a 10-foot pole. And by the way, you felt that way before you called us.

Yeah, I'm just calling for some confirmation, just to make sure. Your gut's right. Listen, I come from the church world. I was raised in the church. My dad was a church planner. My dad didn't do what this pastor's doing, but I've seen it. You know, growth is exciting.

Hey, we want to do this. We want to grow. And I believe the pastor's heart's in the right place, but he's got building fever, and it's an easy thing to happen. And it's just like anything else. He is a pastor is not immune from the idea of being tempted, you know, to, to buy a bigger house, George, or to buy some land and build the dream home well before you're ready to do so. He's not immune from that. And that's what this is. He shouldn't be putting pressure as a leader on people in the church to personally guarantee what the church needs to handle on their

own. So that's, for that reason, George, we're out. We're out. So there you go. Let's go to Morgan in Cleveland, Ohio. Morgan, how can we help? Hey, how's it going, guys? Good. How are you? I'm great. Thank you so much for taking my call. I recently experienced a pretty big increase in my income. I am a student and I've moved from an hourly wage to kind of a higher salary. And I'm a bit overwhelmed about what to do with it and how to manage it responsibly. I was wondering if you have any advice for a student on go buy a house or invest or I have no idea what to do. Wow, congrats. So what were you making and what do you make now? So I was making, the most I've ever made is about $20 an hour and my new salary is $210,000 a year. Whoa. So you have 5X your income.

You went from like $40,000 to $210,000. Tell us really quickly, in 20 seconds, what happened? I'm a law student, and I just got really, I got decent grades, and I landed a job. Nice. Good for you. So you've already taken the firm job. You I landed a job. Nice. Good for you. So you've already taken the firm job. You got the big job. So this will be for next summer.

So I'd be a summer associate. But after that, hopefully the plan is that they'd hire me back. I've pretty consistently hired those individuals back, and they train you over the summer. Okay. So I will receive this prorated next summer. Okay, so it's a prorated. It's not like you've signed on and you're now going to be making $210,000

over the next 12 months. I will after I graduate, so that will be in a year. Okay, gotcha. So it's locked in. Okay, gotcha. But you know this is coming, that potentially a year from now you'll have five extra income, and you're going, what do I do? Wow.

Yes. Do you have any debt from law school? No, I was very fortunate to have a good scholarship. Wow. Well, you worked your butt off for it. It wasn't luck. I appreciate that. That's awesome. So no debt at all? No debt at all. No car loan, no credit card debt. I live in an apartment. How much fun are you going to have with this? You just catapulted your future. Do you have anything in savings right now? I have about $100,000 in savings. Who are you?

Is this a prank call, Morgan? Be honest. Morgan, are you a real person? I am. Actually, I wanted to thank you guys because my parents actually, I'm sure they would be shocked that I'm calling the show right now, but they listened to Dave Ramsey growing up. And the whole show, they went to his event. They wanted to thank him and get the opportunity. Well, this works. The best thank you is following the plan and living it out and changing your family tree.

And your parents have done that. You're doing that. Wow. A hundred grand saved, no debt. They paid off their house, so they want to thank you as well. Wow. They'll be sending them. Look at that. Incredible family.

Okay, so if I'm in your shoes, my next goal would likely be to purchase a home once I have that stable, big income. So what does your living situation look like right now? Right now, I'm in an apartment. I pay about $1,000 a month. I'm right next to my law school, walkable, and yeah, that's about it. Is the firm in the same area where you're going to school now? It's not. I will have to move. I have a place rented out for the summer already that I've paid for for next summer, but that's about

a thousand as well, a thousand a month. George, what I was going to suggest here, and I'll stay out of the way here, let you keep going, but I wonder if she doesn't rent for at least six months, maybe 12 months, once she lands in this new metropolitan area or wherever she's going to be. Even if you want to rent for two years and continue stacking up cash. Depending on how big a home she's going to get. Yeah, I don't know what your area is like, but I mean, how cool of a goal would it be to say, I'm going to keep living how I've been living, and this extra, you know, what, $150,000, I'm going to just sock away into savings, and after two years, I'm going to have a few extra $100,000.

Well, I think that's what I'm wondering is, I don't, I mean, I know nothing about houses. I've never looked to buy a house. I don't know if that's a terrible idea or I should be investing and just keep living kind of frugally. The good news is you can do both. So in the baby steps, you would be at baby steps for, you could call it 3B, where you're saving up for the home down payment. And many people choose to invest that 15% into retirement from their income. And so you can do that now, depending on what retirement options you have through your employer. You could always open a Roth IRA and fully fund that through your income. And then as you make more, that 15% chunk gets larger. 15% of 200 grand is way more than 40.

And so as you do that, you're going to continue to build wealth. Any money beyond that, let's stack away in a high yield savings account and maybe get a house in the next two years. And maybe you could even pay cash. Yeah, that's an overwhelming thought. And here's the deal. You don't have to do this alone. If you jump on to RamseySolutions.com, click on Trusted Services, and you can get connected with a real estate agent that is Ramsey-trusted that will help you walk through this home ownership journey. And I think that's the next step for a young gal who's crushing it.

And beyond that, enjoy some of it. Give some of it. Yeah. And I just want to say, Morgan, I know you're doing such a great job out on your own, but your mom and dad have taught you right. They've done it the right way. Call mom and dad. You're not alone on this deal.

They're going to walk you through them. They're solid people. And so you've got the best bench that you could possibly want helping coach you as you enter into life. Thanks for the call, Morgan. You're a superstar. This is The Ramsey Show. Hey, when you go against what society thinks is, quote, normal, like avoiding debt, for example, it might seem weird at first, and that is totally okay. We want you to be weird if that means doing things intentionally, including how you spend your health care dollars. And one way to be intentional is with Christian health care ministries. CHM isn't health insurance. They're a health cost-sharing ministry that's helped

hundreds of thousands of families like yours take care of health care costs without sacrificing their freedom. Find out more and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell is my partner today. And we are here for you, America.

888-825-5225 is the phone number. One of our favorite things to do on the program is when we have folks come in live here in our lobby, just across the way from our studio right now. And we are looking at another fantastic young couple here to do their debt-free scream garrett and tisha welcome hello thanks for having us all right so you guys ready to go for the debt free scream you're all fired up what's your nervous level on a scale of one to ten one being no nerves ten being freaked out like a one maybe wow you don't hear that very often they do seem calm notice that uh tisha's the one that said that. Garrett was unable to answer. He's so uptight. Choked up. Yeah, he's good. I'm a three. A three. Okay, good. Well, this is exciting. Where are you guys from? West Fargo, North Dakota.

West Fargo. Okay. Very nice. All right. So how much debt? Give us the data. How much debt did you pay off and how long? The last five years we've paid off $200,000. Wow. $200,000 in five years. And what was the range of income in that time? Between 90 and 130. Oh, cool. What'd you do to bump it up to 130? Just raises and just life. What do you guys do? Just life. Yeah. It just happened. It was exciting. So what do you guys do? I'm a social worker. Okay. I work with people with disabilities.

Okay, great. Fantastic. Love that. Both working with people all the time. Love that. What kind of debt was the $200? It was our mortgage. Whoa. Whoa. All $200? Yep. Oh my goodness. That is a weird thing to do in today's day and age. It really is. What's the house worth, you think?

About $250. Okay. Awesome. So what happened five years ago when you guys decided one day to pay off your house? Yeah, so it started even a little bit before that. We started our debt-free journey in February of 2017, and we just started attacking our consumer debt, and in 2019 paid off $75,000 of consumer debt, and we're actually on the show in September of 2019

to do our debt-free scream just for our consumer debt. So this is your second. This is our second one. This explains the nerve situation. Yeah, we've done it before. Don't call it a comeback. Because you guys have done this before. This is old hat.

Yeah. Oh, this is rare. The old twofer. So tell us the difference you feel from paying off consumer debt to now paying off the mortgage. How would you explain both of those experiences? It's a lot more relaxed.

Yeah, we were gazelle intense, you know, for those first few years and extra jobs and all of that. And now the last five, it's been a lot more relaxed, able to enjoy life a little bit more. I mean, you guys are still hustling here. Just based on napkin math, we're talking like 60 grand a year going toward the mortgage. How'd you do that? A little less than that, but yeah, just every penny, every dollar that we had extra always went to the mortgage. Wow.

Yeah. This is, okay, now this is interesting because you just shared with the audience that this is your second time around. You paid off all the other debt, and I'm guessing that was fairly intense as well. That was. Okay. That's when it was really gazelle intense. Like we weren't doing anything fun, anything extra. And then once that was done, we could. So what was the timeline like when you finished all the consumer debt to then tackling the house? Was it a one month, two month layoff? I feel like it was a couple of months. We left here, got back to town, and started putting more into our savings account and working on that and then immediately just attacking the house

with everything that we had extra. But you still had a little bit of fun with this time. We did. We actually went out to eat a little bit more and bought some fun things here and there. Wild. Yeah, I know. Absolutely wild. So we talk about moving from intensity to intentionality, and that's what you guys did

in this phase. We're so proud of you. That's amazing. Thank you. Do you guys have cheerleaders? Were people looking at you weird for paying off your mortgage? Yeah. Did anyone know it was even happening?

Oh, yeah. Everybody knew. We love to talk about it. That's one of our motivators, I guess. It keeps us going, being able to talk about it. You got to be accountable. You tell everyone, now they're going, hey, how's that mortgage doing? You're like, we're knocking it out. We're on it. And here you are. We've been our biggest cheerleaders because we talk about it every day. And then having a little one now, she's always yelling at us, cheering us on.

Oh, we're seeing the photo here. If you're watching on the app or YouTube. That's amazing. So what was the why behind this? I think, I mean, it changed over the course of time. You know, right away when it was just us, it was we wanted to provide for each other safety and security and just have, you know, have no debt and just feel free. And then as our daughter Penelope was born, it changed. And then she really became the why. We want her to never experience debt and have parents be free

and have financial peace. That way we can be more relaxed, calm parents and give her the world. Yeah. I'm just curious, is there any way of describing what it felt like to make the last payment? For me, it didn't set in making the last payment. Like we went to the bank, we paid it off, and I was like, okay, that feels good. It was when we got paid next and that money was just ours and we could do what we want with it. Like I was like, oh, my gosh. I love that.

That's when it gets real. It just sits in the bank account instead of going back out to lenders. Yep. What's like the first big thing you did or you're going to do? This? This was, yeah. Yeah. A little trip to Nashville.

Yep. But you guys are super young. You got, you know, you got what, 30 more years of a working career? Yep. What are you going to do now? You got no payments in the world. Well, the next step is save to be a millionaire. So there we go. Are you guys are on the path? I'm guessing you've been payments in the world well the next step is save to be a millionaire so there we go you guys are on the path i'm guessing you've been investing along the way yep you've got a paid for

two hundred fifty thousand dollar house so you're probably at least halfway there what's your what's your net worth you think it's just under five yeah amazing yep we kind of feel like 2030 we might be that millionaire status i love it yeah. We're going to gift you guys two every dollar premium subscriptions. And inside of that, there's a great tool called Financial Roadmap. It'll actually show you exactly what your millionaire date's going to be. It's a fun milestone to celebrate. And you'll just be getting started at that point. I mean, you'll blink and you'll be there. So yeah, that's for you. You can give it to someone else to kickstart their journey. Someone who's been maybe inquisitive going, hey, tell me more about this. How are you guys actually doing this?

Maybe a coworker who's been a little skeptical. Were there any haters along the way? Because people are going, why would you pay off a low interest mortgage? What are they thinking? There's been a few. Our neighbor, a car salesman, they've called it out. That's the class of culprits. Yeah. I love the neighbor giving you a it out. That's the classic culprits. I love the neighbor giving you a hard time. It's pretty great. Did you do the old run out in the yard with the shoes off now that it paid off

or are you waiting for the snow to do some snow angels? We've been out with the girl. So fun. It does feel different. It does? You feel the financial peace just emanating off of them. That's fun. It does feel different. It does? Yep. Yeah. I mean, you feel the financial peace just emanating off of them.

It's beautiful. Yeah, you really do. So fun. All right, well, let's do this. Let's get the sweet little princess in here. Her name is? Penelope. That's a great name, by the way.

I love that name. And how old is Penelope now? She is 20 months. Wow. Beautiful red hair, too. Thank you. She'll get to look back at this YouTube video one day and go, that's how my mom and dad changed my family tree.

Yeah, yeah, that's right. And she'll probably roll her eyes that you didn't do something right, mom or dad, in the scream and the pinky. You picked that dress for me. Yes. Yeah, welcome to being a teenager. That'll happen. But you guys are great parents.

This little one has no idea how you have paved the way for her prosperity as well. So such a great story. Really, really fun. All right. We've got Garrett and Tisha. Am I saying that right? Tisha. See, I forgot in five minutes. Tisha, along with little Penelope from West Fargo, North Dakota. They paid off $200,000. That is the house, by the way, in their second debt-free journey. In five years, making $90,000 to $130,000. Let's hear your debt-free scream. Are you ready? Three, two, one.

We're debt-free! I love it. Oh, yay! Penelope's clapping as well. We got her clapping. Oh, my goodness. That is so cute. She is so sweet. Oh, yay. Penelope's clapping as well. We got her clapping. Oh, my goodness. That is so cute. She is so sweet.

She's smiling. She's debt-free, and she doesn't even know it. How fun is that? It's incredible. So they started the journey February 2017, paying off consumer debt, and here we stand 2024, house paid off and everything. That's a seven-year journey to completely transform their financial lives. Yeah.

So for everyone listening out there who thinks, you can't do this, are you willing to commit for seven years that could change everything, that could change the next 30, 40, 50 years, change generations that come after you? That's pretty wild to think about. Sounds like a long time. They're still young. They're still with it.

And they got the rest of their life with no payments. That's a dream worth chasing. Folks, I can't add anything to that. Coach George with the locker room talk today. We'll be right back. This is the Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success. So work with a mortgage advisor you trust, not just some random website.

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Brentwood, Tennessee 37027. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell is my partner in crime today, and we are here for you, America. We want to coach you up to win with your money. That's a budget. That's saving. That's investing.

And then it's all about making the maximum income that you can make so that you can actually build wealth. And so that's what George and I specialize in today, winning with your paycheck and winning with that budget. So let's get right to it. 888-825-5225. 888-825-5225. Shuby is up next in the Big Apple. Shuby, how can we help? Hey, how's it going?

Thanks for taking my call. You bet. So I just wanted help on how to make my rent payments and car payments. I just actually suffered a job loss last week on Wednesday. Oh, sorry about that. Yeah. What happened? So basically it was just I had medical reasons and that kind of factored into my performance.

And like I just had to be, you know, out and take a lot of doctor trips. And like I just guessed they were like, you know, we have to let you go. And to be honest, it wasn't somewhere where I wanted to work. It was really toxic. What were you doing and what were you making? Yes, I was a fund accountant and I was making $74,000. Okay. So what have you been doing in the meantime? What's your next bill? How are you going to pay for it? Yeah. So I did file for unemployment, but to be honest, I don't think I'm going to get much off of that. Maybe maximum $2,000 a month, I guess, for this October. I'm planning on using my savings. How much do you have in savings? About $3,060 something. And what are your monthly bills?

If you had to just cover the bare bones, you're not eating out, we're just trying to survive, what would it take to cover a month? I would say like about $3,700. So we can't even get through October at this point? Well, in terms of rent yes but for like the in terms of like the next like um what do you call it the next because i do have like income from this month that i got from my

job so i should have enough good so we can get through a month we need some short-term income and ken's going to help you get some ideas of what we can do and then we need to find you a full-time job that you can do what's the status of your health now um so i've been going to help you get some ideas of what we can do. And then we need to find you a full-time job that you can do. What's the status of your health now? So I've been going to a doctor and my eye is getting better, but it's not 100%, but it's definitely better, much better than where I started from. Are you expecting that you're going to be having to miss work?

No. I think before, yes. Before when I was let go, yes, I had to because there was no choice. But I don't think that should be a problem now. Okay, and are you planning to stay in the same type of a role, doing accounting work? To be honest, that's not my dream, but I think for now I would have no choice. What's the long-term play?

I want to be a cybersecurity analyst. Okay. Have you talked to people that are in cybersecurity and doing the analytical work inside of that to get a real sense of what that looks like? And you know that you'd be on fire for that kind of work? Yes. Great. Good. like and you know that you know that you know you'd be on fire for that kind of work yes i mean there's um yeah good that's good news because that's the thing should be it's like okay we got to get stable right now in the short term so that's you doing three and four uh accounting type contracts or something like that or let's get some full-time work right away. But you have a very, very transferable skill, and I would assume, tell me if I'm wrong, that you also can do a lot of your work remote

in certain situations as well. So that opened you up beyond just the New York market. Is that true? Yes, that's correct. All right, so how intense are you right now about getting work? On a scale of 1 to 10, 1, you're catching up on all the Netflix shows, and 10, that's all you're thinking about is getting work? No, definitely 10.

Okay. All right. I mean, that's the key. That's the absolute key is to jump on this right now. We don't wait. We don't let, okay, we're going to take it easy this month. It's right here right now. So, George, I mean, Shuby, before we let you go, you feel good about, I've got a budget in place

and I've got enough money coming in in the next month, but I've got to start drawing a paycheck in the next month, month and a half. Is that true? Yes. And I guess my car is just another thing. Well, I'm just paying a lot for the car, and I want to get rid of it. Do you need a car? Are you in New York City proper where you can use public transportation? Yes. Okay. What is left on the car loan?

Well, it's actually a lease. I actually have $23,970 left. Is that the yearly buyout amount? No. The yearly buyout is $36,674. Oh, my gosh. That's insane. I know.

The car's not even worth. Well, yeah, that's the problem with leases. I mean, you're prepaying that appreciation, and then you still got to give back the car. Yeah. So we need to get you out of this, and that might mean we need to come up with some cash. We might need to get, you know, kind of a loan from a credit union to cover the difference to get out of this. And then you need to sell it and get, you know, I don't think you need a car right now.

So I think the good news is you can just get rid of it and not have to turn around and buy something else. Yeah. I was also thinking like maybe a car car like it could be useful for like doing the door dash or something that's that's what i was thinking too no you're an accountant why would you trade your time for driving door dash when you can trade your time for getting paid at a premium for a really needed service why would you do that you're going to get paid way more offering your accounting services than you are dropping off somebody's tacos.

Not to mention that lease has very strict parameters. I mean, you look at what you can do with mileage and wear and tear. I mean, I don't think you're going to be able to pull that off. Yeah. You want to get rid of this car and putting more wear and tear on it doesn't make sense. Yeah. Okay. Come on, Shuby. So you got a few options here. The first is an early lease termination that involves a whole bunch of fees the second option is a lease transfer where you convince some other goober to take over your lease that's going to be tough and the third one is what i mentioned is the lease buyout where you pay the difference between the lease payoff

amount and the current value of the car which which you said you're underwater on. Yeah, like they're often like $36, $674, the buyout, but like when I'm going on like Carvana or CarMax, the car is only worth $29. Well, yeah, they're not going to give you much for it. You got to go a private party to get a higher value for the car. So I'd see if you can do that, what would the difference be and can you come up with that difference? Yeah, I'm going to have to take that out then. That's some extra homework for you. Well, hang on the line, Shuby. I want to send you a great

resource from my friend Ken. It's called Find the Work You're Wired to Do. And with that comes a Get Clear Career Assessment. So here's your homework. I think we need to figure out if this is really the path, if cybersecurity analyst is what you're wired to do. And it's going to help you answer a few of those major questions, who you are, why you're wired that way, what you want to do professionally and how to get there. So if you want to, we're going to send that to you for free. And for the rest of America, if you guys want to check out, find the work you're wired to do, go to RamseySolutions.com slash store or click the link in the description. If you're listening on YouTube or podcast. Thank you.

Right now, the book is a number one bestseller in two categories on Amazon. Congrats. Well, that means it's been helping people. Starting to help people. And it is such a great resource. I'll just say this, that the assessment itself is going to give you real clarity on what you do best, what you enjoy doing, and what motivates you. And then the book itself is about a 45-minute read of me coaching you. How do we actually translate this information about myself now into finding the right kind of work where I can grow and make really good money? And what have we told people for decades, George, about their income? I want to bring it back to income.

Your income is your greatest wealth-building tool. So we need to get the income. Why do we say that? Because without it, it's hard to accomplish any of the baby steps. You need margin in your income in order to pay down the debt or to invest. And so a lot of people out there can, number one, they're in hourly jobs that aren't paying enough. They either got a degree that wasn't useful or they didn't finish or they're kind of wandering through life going, is this it? I'm miserable. I mean, we see these calls all the time. People

are doing work they're not passionate about. And then they wonder why they're not making progress in their careers. Why would you at that point? And this leads to the desperation that we heard on a call to start the show today. And you cover this stuff all the time. You wrote about it in your book. People fall into these traps because it seems to make sense. Oh, I'm desperate. Oh, here's the Hail Mary. I'm out of work. I need a shortcut. I don't make enough. I need a shortcut. And when you find the work you're wired to do and you make good money doing it, you're no longer looking for shortcuts. You move slower with more peace. And there's constant opportunities for growth. And growth is what you're looking for. Good hour,

George Campbell. Thank you, sir. Thank you, America, for joining in. This is your show. This is The Ramsey Show. Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app, your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser-focused on reaching your goals. Loaded with over 7,000 hours of Ramsey Network app is designed to keep you laser focused on reaching your goals. Loaded with over 7,000 hours of Ramsey shows, this free app is the best place for uninterrupted content and no distractions.

Plus, you can search specific questions to get more personalized content in seconds. So, for the days you need some extra motivation, you'll have proven advice at your fingertips. It's time to get serious about your goals and shut out the distractions for good. Simply search Ramsey Network in the App Store or Google Play. If you're listening on a podcast, just click the link in the show notes to download our free Ramsey Network app today. Welcome to the Ramsey Show, where we help you win in your life. We help you win with your money. We help you win in your work, and we help you win in your relationships.

By the way, all three of those areas are just always interconnected, and that's why we focus on those areas to help you win. I'm Ken Coleman. George Campbell is alongside, and he's looking snappy today in his new coat from Gap Kids. Thank you. It looks great. It fits really well. On sale.

He got the extra large. Yeah, good. I love that. 888-825-5225 is the phone number. 888-825-5225. We have fun because we truly do love each other. Don't worry, Merrick. I'll get him back later.

Trust me. When he least suspects it. He's going to get me back, and that's kind of the fun because we truly do love each other. Don't worry, Merrick. I'll get him back later. Trust me. When he least suspects it. He's going to get me back, and that's kind of the fun that we have here on the show. By the way, if you want to check out our Instagram accounts today, at George Camel, K-A-M-E-L, or at Ken Coleman, we collaborated on a post where the social media team had some fun, and that's all I'll say. Yeah.

It's worth the watch. It's worth the 10 seconds of your time. That's all it is, 10 seconds. Abby's up. We're going to give her a lot more time than that. Abby in Buffalo, New York. Abby, how can we help today? Oh, thank you so much for taking my call. I am looking for some advice.

The long story short is I fought a custody battle for five years. I got divorced. My daughter was two. She's now 14. But she was about nine when this started. And I lost the custody battle, unfortunately. The judge is actually in a civil lawsuit with 350 plus families for always siding with the man to give sole custody. Wow.

So, yeah. Yes. Sounds like he's got an agenda. It's a she. That's the irony is the judge is a female um and she yes she does have an agenda and so there's a lot of families who have filed this together it's a very unfortunate um i wish i'd seen some more of the red flags. Are you still in the middle of this? And the reason I'm asking,

so you're not spending any more money on lawyers at this point? No, it's all over. And what's your financial status? Horrible. Are you in debt? Do you have any savings? I am in little debt. I have one credit card left that I need to pay off.

I've paid off all of my attorney fees, which is at $450 an hour. That's all over. I have one small credit card, but I have no savings, essentially. How much? Give George a picture. Is it $100 or $1,000? I'm sorry? Is it $100 or $1,000? Give us sorry? Is it $100 or $1,000?

Give us a number. Oh, for the credit card? No, for your savings. $4,000. Oh, I have about $200 in my checking account and about $2,000 in my retirement because I also pulled from my retirement to pay legal fees. Okay. Do you have any money in savings?

No. $200. And the Do you have any money in savings? No. $200. And the credit card is $4,000? Yes. And what are you doing for work, and what do you make? Well, that's part of the problem as well. When I started, the judge deemed that I cared more about my profession than my child, which anyone who knew me, it was not the case. I worked for Harvard University at

the time. I made about $135 a year, and I resigned from my position to show that I did, in fact, care for my child. You quit your job to convince the judge? Yes. That's essentially what she told me I had to do to prove that my daughter is more important than my position. What are you doing now? I represent a nonprofit. I am a director for them. We train service dogs and place service dogs for people who have hard of hearing. What are you making in this job? About half of what I used to, about $67,000 a year.

What were you doing for Harvard? I was a director of development as well. I raised money for academic research. How long ago was this that you left? About four years ago. So you've been working for this nonprofit at half the income for four years? Yes. I, after resigning the emotional, I, someone asked me once if the financial stress of the custody battle or the emotional was worse. And I'd say the emotional,

but financially it destroyed me. And honestly, I wasn't great at working for a while. This is my only child and it destroyed me. And I wasn't great at jobs that I did. I got jobs. I knew I wasn't doing it well. Well, but you were just trying to survive. You're just trying to survive this unbelievable fight for your daughter. So I think everybody understands that it's very difficult to be engaged at work when you're on this battle.

But here's the reality. This is my take. I want George to weigh in. You're on the other side of this. It is what it is now. The fight is over. I hate that you drained your savings. But as I look at the current picture, you only have $4,000 worth of debt.

And so this is an income. This is a, I've got to move on with my life now. And part of moving on with my life is I'm on the other side of this battle. I'm sure there's still some healing. I'm not in any way minimizing the battle scars. But at this point, the battle's over. The smoke is cleared. And you have got to fight for you right

now. And a huge part of this is you are worth double at a minimum of what you're making right now. And it's time for you to build back. And the good news, George, I want to bring you in here. I don't think she's in as bad a shape financially as she feels. I think six months from now, your life looks completely different because in the next 30 days, you've got a thousand bucks. What's your next, your next paycheck is going to be a few, a few grand. Yes. So I get paid every other Friday and essentially after, you know, healthcare taxes and that, it's about, I clear, I net 2000 every other week. Can you sock away another 800 bucks from that and put it in savings and not touch it?

That's what I think I need. That's the advice I need to hear. I mean, at this point, I don't own anything and I miss owning my house because I sold my house in this process, everything. Like, I want to save up for a goal of something like that. We'll get you there. We'll get you back to a foundation and a life that you love. Right now, we're just trying to build that foundation. And so a thousand bucks is your starter emergency fund. Once you have that in savings, we don't touch it. And then we go about the business of knocking out this credit card debt. So how quickly, if you got real intense, you didn't invest, you maybe worked extra, how quickly could you knock out four grand of credit card debt? Three months? Probably.

Part of it is I work remotely. And so I'm like, I live, work, eat, sleep in the same one-bedroom apartment that is affordable. But it's also very lonely. So I think I waste too much money going out for dinner to have other people around me to have some socialization. Well, get some friends over the apartment and let's knock out this credit card debt. Let's not go out for, you know, retail therapy or whatever we're doing. Let's just focus on knocking out the credit card debt. Because then you get to baby step three, where you work on a fully funded emergency fund, three to six months expenses. You'll likely do that about six months later. So what we're talking about here is likely a nine month, 10 month plan to where you have a

fully funded emergency fund and no debt. George, let's give her a session with one of our financial coaches. Oh, absolutely. Hang on the line. We'll get you connected and we'll cover the session for you because we want to see you win and get back on your feet. So hang along. Christian will pick up. We'll get you scheduled. You can do this, Abby. You can do it. You've weathered a really difficult battle, and you're still kicking. You got this. We're here to help.

Hang on the line. We'll take care of you. This is The Ramsey Show. This show is sponsored by BetterHelp. This is the season for Halloween. It's October, we're wearing costumes and we're wearing masks. So if you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest.

A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work, we do this around our friends, we do this around our families. We even do this when we look at ourselves in the time. We do this at work. We do this around our friends. We do this around our families. We even do this when we look at ourselves in the mirror. I know because I've been there multiple times in my life and it's the worst. If you feel like you're stuck hiding behind masks and costumes all the time, if you find yourself hiding from your true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest, where you can talk to somebody else and reflect and learn, and you can accept all the parts of yourself over time and start living an authentic life. Masks and costumes should be for Halloween parties, not for our emotions and

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Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell is alongside. The phone number for you to jump in is 888-825-5225. 888-825-5225. We'll go to Buffalo, New York. Sabrina is waiting for us. Sabrina, how can we help? Hi, guys. How are you today? Good. How are you? Good, good. I'm just kind of trying to get some advice on how to not live paycheck to paycheck anymore. My fiance and I bring in about $5,000 a month. We have about $18,000 in credit card debt, and these cards are behind. We haven't made payments in a while.

Uh-oh. Yeah. Why is that? Well, my fiance lost his job probably about two months ago. It took him about three weeks to start again, to start a new job. So that incurred us to kind of dip into our savings to pay for our monthly expenses. Did you guys already combine finances? We, so we established each of us putting in about a thousand dollars a week. We both get paid by weekly. Um, so we were paying about 4,000 a month in bills. Um, and we had this conversation actually last week that now we need to contribute a hundred percent of our paychecks to try to get out of this hole. Um, but it just

doesn't seem reasonable with all of our expenses. And we're living extremely paycheck to paycheck. We have about $100 in savings. What other debt do you have? About $100 in checking. We have about $18,000 in credit card debt. But there's other stuff here. Yeah. My father-in-law was generous enough to take out a home equity loan for us to pay off our car loans. So we rolled our car loans together to try to lower that payment. So we owe him about $35,000. So he took out a HELOC in his name and then gave you the money? He paid off our car loans for us, and now we owe him that money. And we have about $185,000 in a home mortgage.

Okay, what do you owe him? We owe our father-in-law about $35,000. Goodness gracious. And the mortgage, you're both on the mortgage? No, just myself. And he's paying into it, helping you build equity, but you guys aren't married, but you sort of combine finances, but not totally. Do you feel how messy this is? Yeah, we were actually supposed to get married next week, but we postponed the wedding because financially we can't afford to do it.

I got a great idea for you. You ready? Go to the courthouse tomorrow. We'll do a party later, but let's sort this out because part of this is it's very messy and we can't make progress when we're sort of halfway in this thing. You guys need to get officially married by the judge. It costs very little to nothing. Get the old marriage license.

And to George's point, you guys got to fix this. This thing is a mess waiting to happen. Yeah. It really is. And also, these cars are more than half of your annual income. Mm-hmm. So I think one or both of these cars needs to go.

You need to sell it and then use that money to pay dad back, and then whatever's left, we buy beater cars. Yeah. That's part of the reason we're living paycheck to paycheck. And also, why are you guys only bringing in 5K together? So I make about $67 a year. He makes about $58. So after taxes and health insurance, it's about $5,000 a month that we're bringing in.

You're not paying 53% in taxes. Yeah. There's something fishy here. Something's weird. You guys are over 100. You guys are, what, pushing 120 income. It's 125 grand. It's 125. And you're taking home 60. It's not adding up. Are you guys investing at all?

That's why it's confused. That's why I'm confused on what's happening. Well, we'll help you. I'm going to tell you what's happening. You either don't know your numbers or he's not giving you the full picture of his. Something's just not adding up. And by the way, this is why we want you to be married and get all of the money into one account. Okay. And then get on a budget. And we're going to help you with that in just a minute. Okay? But first things first, you guys don't know what the other one is doing.

And we're playing house. And I'm not making a moral statement. This is a financial thing. And so you've got to get combined so that we can use the power of two pulling together. But George is right. There's no way you guys are only netting $5,000 a month between the two of you. Are you guys investing at all into retirement accounts? I invest into my 401.

I don't believe his company offers a 401. How much are you investing right now? What percent? 12%. Okay. How much are you investing right now? What percent? 12%. Okay. Can I give you some help here on why you're living paycheck to paycheck? Yes. You're giving a lot of money to the investment account that should be going toward debt payoff. To the tune of, are you ready for this? $8,000 a year is what you're currently investing. If you got that back in your check, you brought it down to zero, you'd have an extra almost $700 every single month. Could you breathe a little better with an extra $700 if I gave it to you? Absolutely.

And now, what do the car payments add up to? Yeah, car payments right now are about $340, excuse me, $460 a month. For both of them total? For two cars, yeah. Okay. So let's take the $700 plus the $460 if we got rid of these car payments. Now you have almost $1,200. Do you see how you can breathe again if you just knock some of these things out? And I'm guessing, let me jump in, George.

Sabrina, I'm guessing that we're not talking about combined incomes right now. You guys are only putting $1,000 of your income towards this joint account. So if we take his full take-home and your full take-home and combine them, we're even better off. Plus the $1,100 or $1,200 that George has found, correct? Right, right. You guys shouldn't be struggling. You need to put 100% in. Right, but guess what guys shouldn't be struggling. You need to put 100% in. Right, but guess what?

We're not struggling. We sell a car or two, and you pull out that investment income that George told you, we got breathing room. We're rocking and rolling. Right. So here's your homework. Figure out what you could sell these cars for at private party, not what the dealership would trade it in for because they're going to give you pennies on the dollar,

and then you're going to sell those cars private party with the money you get, the proceeds, the profits, hopefully there are profits. You buy yourselves two cheap cars, like Facebook marketplace, four grand, get an inspection, a pre-purchase inspection on it for a hundred bucks. So, you know, you're not buying a lemon and drive those as you then pay off the credit card debt. Cause now we're making 125 grand. We paused investing. We freed up the car payments. We have almost 1200 bucks to throw at the credit card debt. Because now we're making $125,000. We paused investing. We freed up the car payments. We have almost $1,200 to throw at the credit card debt. Yeah.

You see the momentum you just made in just one month? Yeah. So based on that math, you'll be at a credit card debt in less than a year, probably closer to six months with some intensity. And now we're married. We have combined incomes. We don't have any debt. Now we can work on a fully funded emergency fund. And from here on out, we're

not going to take out another dime. We're not borrowing money from anyone for any reason. Right. But the key to this, all of this, George, I want you to keep going here. I'm teeing you up. Okay. They got to get on a budget. The two of them, they got to get married and they got to get on a budget. So here's what, they got to get married and they got to get on a budget. So here's what that looks like. I'm going to gift you every dollar premium. We'll call it a wedding gift from Ken and I. See? And when you open it up, I want you and your fiance, once you're married, sit down and go, what is the paychecks coming in this month? Once we pause

investing. All right. We're going to assign every single dollar a job in the expense category. What is the rent going to be? What's the utility bills? How much are we going to spend on groceries? The eating out budget is going to be zero because we are in a crisis right now. And then beyond that, what do we have to cover? And anything else that's not in the budget, we don't buy. That's the hardest part is the budget forces you to have some discipline in your life instead of just sort of willy-nilly floating through going, wow, we made six grand. I don't know where it all went. Pretty crazy. And you two, how old are you two? I'm 36. He's 39. Would you agree it's time we started being adults and went like, where do you want to be at 45,

at 50? Absolutely. Do you want to be the 50-year-olds? I feel pretty shameful that I don't have anything to really go for. No, we don't want you to feel any shame. We want you to just be motivated. And real quick question. Is the fiancé, how's he going to react to us telling you guys to go to the courthouse tomorrow? How's he going to react to that? Oh, he's all for it. He thinks that I want the big wedding.

Sabrina, no, listen. You can have an amazing celebration after you're debt-free and the shrimp are paid for. Ha, ha, ha. There we go. Come on. I love a good cash shrimp cocktail. There is no shame in financial freedom. So you're looking through the windshield now.

That's what we're helping you look at. And so you've got to pick up the pieces, leave the baggage behind, and say, where are we going? Five years from now, where do we want to be? I'll tell you where they're going. To the courthouse. Booyah. Huh?

Going to get that merit certificate. Put a ring on it. Sabrina's fiance. This is exciting. Hang on the line. We're going to gift you every dollar. You guys are on your way. This is the Ramsey Show.

Motivating your team to work and lead with the same passion you have is one of the toughest things in leadership, but it's crucial if you want to scale your business. Fortunately, Entrez Leadership Summit is the leadership event that will equip you to build a team that fights shoulder to shoulder with you so you can grow like never before. Join us in Denver, Colorado, May 18th through the 21st by going to ramsaysolutions.com slash summit or click the link in the show notes. Welcome back to the Ramsey Show. Thrilled that you are with us. I'm Ken Coleman. George Campbell is alongside 888-825-5225 is the phone number 888-825-5225. David is up next in

Oklahoma City. David, how can we help today? Well, it's good to talk to you, gentlemen. Thanks for taking my call. You bet. What's up? Well, I've got a question. I am 60 years old, and I am starting to put together the pieces, thinking about retiring, hopefully in the next year or two. That's how I'm framing it right now.

One of the pieces that I'm considering is that my employer has a pension, and my projections that I've done so far indicate that I could have about an $1,800 a month benefit from that with a 100% survival option for my wife, or I could elect to take a lump sum, which projection right now indicates it would be just under $300,000. So my question is, as I'm assessing the different pieces on this, would it be okay to just take the $1,800 and trust the annuity, or would it be smarter to consider taking the cash out lump sum as a direct rollover into a self-managed, self-directed IRA. Great question, David. You're thinking this through very wisely, and it sounds like you've done a great job. What does your total nest egg look like? How much of your world is this pension?

Well, my 401k is a little under $900, and my wife will have a pension also in the two-ish per month range when she decides to retire. That's probably a couple of years down the road, the way we're kind of planning it right now. You might retire first. That's possible, yes. Okay. Well, let's walk through sort of the math of it first, and then I want to talk about what's next for you and what retirement really looks like. So generally, we say you want to take the lump sum, and it's based on simple math. If you take the $300,000 into an IRA, it's going to grow at a greater rate than the pension, which is likely going to underperform probably around 6% or 7% on average, versus what we've seen in the market. If it's in the IRA, you could be making, you know, 9%, 10%, 11%. Right. And so the question

is, the $1,800 a month, that's about $21,000 a year. Could you make that or more if you just invested it on your own with more control, and you can pass that down to your heirs? Because the pension dies with you, or worst case, with your wife, right, benefit that's correct that's correct versus creating generational honestly that right that's kind of the direct i was the lump sum option since it looked like that is a qualified plan that would allow me to do the direct rollover and avoid the tax penalty so i could push all that over into a self-directed ira and see like that was the direction, but I wanted to make sure I was kind of thinking all the variables of the equation out as best I could. Let me just have some fun with this.

Let's put this, you said you're 60? Yes. Okay, let's take the 300, George, on the lump sum. And George has got his investment calculator out, David. This is where this really becomes a super easy decision for you. So run those numbers. Let's say 60 to 67. You just drop 300 grand in there. You don't touch it. I was going to say to 70. You want to say to 70? Well, let's ask you, David, you want us to run the numbers on what that 300 becomes in 10 years or seven years? You don't need this.

Or 15. Right? This is not money you need. As soon as you start retirement, you're not going to start withdrawing from it. The plan would be to not. Yes, that's correct. Okay, great. So let's say 70. Let's just do 10 years, what that 300K is. So 10 years with a 10% return, which is what we've seen on average for average annual returns for the S&P 500, you would have $812,000 in that account. So you made $212,000 on that in 10 years. Right, and that means I'm not losing money by just taking the annuity. Exactly.

Now, if you took the annuity, $1,800, $21,000, 10 years, it's $210,000. And so, you know, it could be apples to apples. The difference is it's in your control, and you're probably going to see greater returns over the long haul. And I guess that's probably the other part of it, is being able to control it and making sure it's not under, you know, it's a money that a third party controls and spends to me, and something that one day, oh, sorry, the pension had just gone bust.

Exactly. And people like annuities because it's guaranteed, and so if you're real spooked by the market, but as a guy who's been investing for a long time, you know that as long as you don't jump off the roller coaster when you get spooked, you're going to do better. I want to play this out a little bit more, David, because life expectancy. Let's jump that, George. Let's take that 300, and let's do it in 20 years. Let's see what it looks like at $80,000. At $80,000, your results, $2.2 million.

And again, the likelihood of you- That's my favorite sound right there. You probably don't need that money. I think David needs a cigarette. It's what he needs. He lit one up right there, an imaginary heater right there he's like 2.2 million i i that's why i like that option david yeah i i i think that i think that sounds like the smart it seemed like that was the direction i was going but i i needed i needed a confirming a confirming sense that that was the right thing and it sure it sure sounds like that's the right thing to do. Awesome. I'm with you. It's what I would do

personally, David. It's what Dave Ramsey would do. You've done a great job. Again, this is not a make it or break it, life or death thing here. You have other money sitting around. You've done a great job and your wife's got the pension. You likely have Social Security on top of all that and some gravy. I love that sound

he made. He needed a moment there. That's why we do what we do. Thanks for running those numbers, George. Math is fun when it works in your favor. Yeah, it's like we can tell you or we can show you, and George is always ready. You're like that investment calculator.

You're like the quickest calculator in the West. Yeah, you're like one of those new Western movies where George is always ready to go with the numbers. That's right. It's not as cool as being a real cowboy, but I'll take what I can get. Yeah, you're an investment cowboy. I like that. Wow.

That's what I'm going to call you. Changing my Twitter bio today. All right. Thanks, good. Greg is up next in Detroit, Michigan. Greg, how can we help? Hello. Hi, Greg. How are you? Good. How can we help? Oh, I'm 67. My wife's 64. We're retired. And we're living off Social Security. And I'm

also drawing some money out of our IRA every month, mostly for fun and paying off debt. So at this point, we owe on our house, and that's about it. We owe $75,000. The house is worth about $300,000. My interest rate is 2.8%. So I've never been really keen on trying to get it paid off. You know what I'm saying? It doesn't seem like I would make more money leaving my money in savings. So what I want to do is my lease on my truck is coming due, and I want to either release one or buy this truck out. And my wife is not keen on me leasing.

Why is that? Because it's, you know, over $600 a month. Because you married a smart woman, was the answer. And she can do math. Right. But what am I saving this money for? You know, I saved it all this time, and now I kind of want to spend some. What are you making off Social Security? $4,200 a month between us. Okay. And then you're pulling out of the ira for like fun money yeah mostly okay what's in the ira cares 900 000 way to go that's awesome so why not just buy a cash car and pay off the house and just be done with all this um the spread is not it's not going to be that much of a spread you're saying hey i can make and just be done with all this?

The spread is not going to be that much of a spread. You're saying, hey, I can make more if I invest it. I'm going to hang on to the lease. Why not just fully enjoy this retirement completely debt-free? It lowers your monthly expenses, allows you to have more fun with less stress. So I would pay off my house for my savings as well? Yeah, how much do you have in savings? You're talking about the $900?

No, I meant from the IRA. Yeah. Yeah. Yeah, so if you took $75 out of the IRA, do you want to buy this truck when you're done with the lease? Yes, I don't mind buying it, yes. Okay, so just figure out the buyout amount, and if you really love it, it sounds like you guys can afford to do that

and not decimate your nest egg that you've created along with social security. So I would do the budget, run it out, and talk to your wife and say, hey, these guys on the radio convinced me that we should pay off the house because it'll lower our expenses, which is only going to give us more flexibility. His wife's going to love this. And I'm done leasing. Let's just own it outright instead of prepaying the depreciation. I'm with your wife on this one. Yeah, and the monthly budget changes dramatically, we know, by $600 plus the mortgage. Just for the car, plus the mortgage. We got some fun money now. Oh my goodness, it's that simple, folks. That's why they call him the Camel. This is the Ramsey Show. Listen up. Trying to reach your money goals without a rock-solid budget is like trying to climb Mount Everest in ice skates.

It isn't going to work. That's why we built the EveryDollar app to help you win with money. It's the simplest, most straightforward way to track your spending and give every dollar a job. That way, you can stop letting your money push you around and start reaching those money goals. Download EveryDollar for free on the App Store or Google Play. It is time for our question of the day here on the Ramsey Show. I'm Ken Coleman. George Camel

is with me. And our question today is brought to you by WhyRefi. Politicians make a lot of promises, and sometimes they may even keep one or two of them. But if you're in over your head with private student loans, don't rely on the government to rescue you. Contact Y-Refi. Y-Refi refinances defaulted private student loans and gives you a low fixed rate loan built for you. Go to Y-Refi.com slash Ramsey today.

That's the letter Y. R-E-F-Y dot com slash Ramsey. It may not be available in all states. Today's question comes from Catherine in Colorado. My husband just finished his bachelor's degree in business administration and is considering going on for his MBA at age 53. He's in upper management position and feels like he won't continue to move up the ladder unless he gets this degree. I've tried to tell him that he's well-liked at his company and has made it quite far without it, but he has it in his head that he'll be stuck where he is forever. He already has significant student loans, which we will be paying into retirement. We do not have any investments,

so other than a small pension each, we will rely on social security when we retire. What say you about going on for his MBA, yay or nay? Nay. Nay. Nay. Nay. There it is. How else can I say it?

I mean, that's all I got. I can't get any more clear on this. First of all, he's not stuck. The MBA at this stage of his life at 53, it's not like it's going to open up opportunities for him based on a, well, I got this education, it gets me in. The NBA itself doesn't guarantee success. It certainly is a requirement in certain positions. But at this stage, given their situation, my goodness, they've got student loans, George, that they're already under the impression they're going to have to pay these all the way into

retirement and i'm so saddened by this this email question i'm sad bummer we're just gonna well we're gonna live off of social security small tiny pension social security and we're gonna go further into debt clearly they don't have the money to pay for the mba if i'm in his shoes if the company wants to pay for me to get an mba because it's going to go further into debt. Clearly, they don't have the money to pay for the MBA. If I'm in his shoes, if the company wants to pay for me to get an MBA because it's going to benefit the company, then go for it if they're paying for it. But do not pay for this yourself thinking it's going to move you up the ladder or that you're stuck. You're already in upper management. So just excel in what you do and find other ways to learn and grow that don't involve going into debt. You can upskill without an MBA.

And at this point, he's in the industry. He's done very well at this company. And so what he needs to be thinking about right now is his lateral movements that will allow me to eventually go vertical or straight vertical movement with some other company. But you're operating on fear here. I see a lot of fear in this email. I see a lot of fear in this email. I see a lot of doubt in this email. And fear and doubt cloud us from making good decisions. You cannot make a good decision when you've got this fear that I'm stuck at 53. I'm stuck. Well, then, George, what happens is,

and you see this a lot and you talk about this a lot with financial decisions that people make in your book, Breaking Free from Broke. Desperation leads us to poor financial decisions. And in this case, make no mistake about it, it is being couched as a professional decision. But this is a financial decision only. This MBA is not going to make him more valuable. So now it is a pure financial decision with the hope that it pays off in more income. And I'm just telling you, it's really risky. Nay, nay, nay. I would be about the business of knocking out the student

loans with the income you have. Sounds like you guys make good money. You just have been squandering it probably due to lifestyle and hanging on to this debt as it accrues interest. So you're 53. I want to see these student loans gone in the next few years and then start stacking up for retirement, get the emergency fund there. Sounds like they've been living in the paycheck-to-paycheck cycle for way too long. Yeah. Well, again, we've got a couple here who have resigned themselves to we're going to be paying off student loans into retirement, and, oh, we're going to be doing that with Social Security.

I've got to tell you something. I'm not trying to be unkind, but the idea of paying off my student loans with Social Security payments makes me want to jump off a bridge. Well, the numbers came out, Ken. The average Social Security payment as of August of 2024 was, you want to guess? I bet you'll be close.

I'm going to say, is this individual or a couple? This was just the average payment. Didn't say. Just the average payment that the social security office paid out. I'm going to say $2,200. You're very generous. It was $1,900. Oh. So we're talking about poverty level living here. I know. With the average payment. And some people make way less than that with social security, depending on what they've paid into it. $1,900. This is not a retirement plan. And by the way, we don't know that the Social Security Administration is going to be, we don't even know if that's going to be solvent. We've seen scary stats that by the time I see it, if I ever do, it's going to be at a far reduced rate. So, Catherine, I can smell,

by the way you framed this question, you do not want him to pursue this. I think you guys should pursue the Ramsey plan instead, and your income will go up over time, naturally. Let's go to Josh, who's waiting on the line in Salt Lake City. Josh, how can we help today? Yeah, I just kind of got myself into a little bit of a pickle, and kind to, you know, entertain different ideas of how to get myself out here. Okay. So I got myself a HELOC back in, uh, you know,

good old days of 2020 with the good rates. Um, I got my house loan down to a 2.375 on a 20 year loan. We only have 16 year loan left. Um, but my HELOC is now sitting at a hundred thousand at nine and a half percent. So what I've done with that was I actually quit my job and kind of started up my own thing, doing a service company. So I took some of that HELOC to help me get started with that business. And the business has been going for about two years now we

kind of you know we're plateauing because of this interest rate paying you know nine hundred almost nine hundred dollars a month and interest only on that he lock so what I've done is I've reached out last year to a capital with a credit kind of type of company you know they got me about fifty thousand dollars in credit cards through the business. We did a balance transfer. Josh, you keep thinking debt is the next answer to get you out of debt. You understand that?

I know. You're correct. Yeah, and I got to get out of this cycle before, you know. So what is your next step? If you didn't call today, what were you about to do? Get another credit card and transfer more over. Trying to keep that repetitiveness, unfortunately. I've tried to look around to see small business loans

at an even higher percentage than my HELOC. Josh, zoom out. Have an out-of-body experience. Look down at Josh from above and tell him debt is not the next answer. Another credit card, a balance transfer, a HELOC is not going to solve Josh's problems. What you need is income. Yeah. Has it occurred to you that you need to make more money or spend less? Well, we definitely need to spend less, but to get out of this, you've got to get some margin. So what's your total consumer debt?

With the HELOC and the two credit cards, without the truck, we're sitting at $130. Without the truck? Why did you say without the truck? Well, yeah, I mean, with the truck, you know, we're paying $600 a month on the truck. What's the total debt? What is the truck, you know, we're paying $600 a month on the truck. What's the total debt? What is the truck loan left? About $30 left on the truck. So we've got $160 sitting here.

What's the household income? We're pushing about $100,000 right now for this year so far. Okay. So here's the deal. I'm going to move this HELOC into your baby step six debt, and I want you to aggressively attack the other 60 using the debt snowball method. Do you have any money in savings? I do have like a cash value life insurance. It has about 20 grand in it that's available. So if you surrendered that policy and got out of it, number one, because it's a trash product, what would you get out of it if you surrendered?

I'd probably say, you know, minus their fees and everything, probably about, well, it's sitting at about 26 right now, so about 20, 18. Okay. And could that knock out some of those smaller debts you have? Some of the credit cards? Yes, I only have the two credit cards. And I got those credit cards to transfer the HELOC balance over because... I think we're done using the only language. I only have two credit... I only have... I think we're done. There's no more need to justify...

I had zero until I got those two. So besides the HELOC... And here's the deal. You're going to run this business completely debt-free. And if you can no longer keep this business running to where it's profitable, we need to find you a better full-time gig. And the key is you're not going to file bankruptcy, no more balance transfers. You need to get your income up, your expenses down,

and use the margin to knock out the debt. And get term life insurance in place before you cancel the crappy whole life policy. And call us back if you need help. Oh, and catch the rest of the show in the Ramsey Network app. That's right. If you're listening on YouTube or podcast. If you're on radio, it's going to keep coming your way. For the rest of you, you've got to get it on the Ramsey app.

Get it in the App Store or Google Play. This is The Ramsey Show. Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out

of here. Enjoy. We'll see you on the app.