The Ramsey Show - You Can’t Make the Same Money Mistakes and Get Better Outcomes

Episode Date: January 28, 2026

💵 ⁠Get Money Help from Ask Ramsey!⁠ 🚢 Book your cabin: Save $300 this week only! George Kamel and Rachel Cruze answer your questions and discuss: "I started a paranormal investigation company with my friend. Can I make this my full-time job?" "I got scammed out of $38,000. We found the scammer and got a judgement against him. How do I collect my money?" "How do I maintain my credit score?" "My HOA wants us to pay a $5,000 special assessment fee. Should we just sell our house and move?" "Should I keep my whole life insurance policy?" "How can I live sustainably when my mortgage is 65% of my income?". Next Steps: ✔️⁠⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take 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. 💵 ⁠⁠⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠⁠⁠ 🏠 Find a Ramsey Trusted Real Estate Agent 🚢 ⁠Book your cabin: Save $300 this week only! ⁠ 🤔 ⁠⁠⁠⁠⁠⁠⁠⁠Find out where you stand with your money and get a free plan⁠⁠⁠⁠⁠⁠ Connect With Our Sponsors: Get 10% off your first month of ⁠⁠⁠⁠⁠⁠⁠BetterHelp⁠⁠⁠⁠⁠⁠⁠ Go to ⁠⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠⁠ to switch today! Go to⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Casper Sleep⁠⁠⁠⁠⁠⁠⁠ and use promo code RAMSEY to learn more If you want your car to keep going and going, trust ⁠⁠⁠⁠⁠⁠⁠Christian Brothers Automotive⁠⁠⁠⁠⁠⁠⁠. Find a local shop and get an exclusive Ramsey discount of 10% off 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! Debt collectors hassling you? Take back control of your life at ⁠⁠⁠⁠⁠⁠⁠Guardian Litigation Group⁠⁠⁠⁠⁠⁠⁠ Find top health insurance plans at ⁠⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠⁠ Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠⁠ Visit⁠⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠⁠ today to learn more 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 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. Normal is broke and common sense is weird. So we are here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm George Campbell, joined by best-selling author Rachel Cruz and co-host of another show we do together, Smart Money Happy Hour on a Ramsey Network. The number to call is AAA 825-5-225.

And I'd be remiss not to mention this crazy winter storm that has hit our area, Nashville, very hard. So thinking and praying for all of those that have been affected by this. For sure, a lot without power. We made it here through the ice to provide this show. It's what America needs right now, I guess, Rachel. Here we are. Jake is going to kick us off in Detroit. Jake, welcome to the Ramsey Show.

How's a good one? Great. How are you? How can we help? Good one hour. So me, my cousin and our friend, we started a company, and we do like paranormal investigations and things like that. Paranormal investigation. We're talking ghosts. Yes. Okay.

Wait, what? Real life Ghostbuster. Yes. So I give you like a basis of what we do. We kind of just like one of people's homes and confirm that there's a presence there. Shut up. How do you do this, Jake? So it's a number of things.

It depends on, you know, where we're at, you know, what kind of person we're dealing with, as in like we know what the spirit is because sometimes you can understand the basics of what, you know, you know, what paranormal investigating was built on, opposed all the fancy equipment. I mean, we do have a bunch of equipment, but it depends on. They like to text like warbs and stuff? Yeah. So I know about a worms. I've done a ghost tour in my day.

You called on the right day. Rachel is all. She's about to pay you. Okay. Sorry. This is a business you started with your cousin? Yeah, my cousin and then our friend. Okay.

So three of you, when did you start the business? We started a business in August of 25. Okay. And how much have you guys made from this business so far? So based on what we're looking at, we're looking at between. 10 and $20,000 a year. Between the three of you, that's going to be split. Yeah.

Okay. So now, my question is, is there a possibility? Because I obviously can't do a full-time out of a $20,000 a year, even if it was just one of us. So my question is, is number one, is it possible for me to do this full-time? And number two, if it is, what are the steps to making this a full-time thing? Okay. So let's talk about it, regardless of what the business or hobby is. let's talk through this how to do this wisely.

We always tell people you want to get the boat close to the dock, meaning we want this business to be generating enough income to where you clearly can go, hey, if I did this 40 hours a week and we scaled up, I could definitely replace my income, if not get a raise. So what are you making now? Right now, my full-time job. My full-time job, around $60,000 here. Okay.

Good for you. So let's say the business, you were like, hey, we can see a password. where this could make 180K this year after expenses. We could pay ourselves 180K, 60 grand each, to make this work. Would you all go all in on it? No, absolutely. Okay. Okay.

So with the partnership side, Jake, that's the money side. And I will say their partnerships can be very difficult and the fact that you guys have three people who are going to have ownership in this company, you guys need to write out very, very, very, very clearly, kind of this almost contract between you all when the worst case happens. Because for a lot of people in partnerships, the worst case happens. And that's everything from addictions, affairs, divorces. I mean, you go death.

Death, yes. Someone wants out and they want to buy out. You've got to buy out their share now. Yes. How does that work? All of it. So you've got to go through like in like a lot of detail. Think of like crazy situations and say, hey, if this.

plays out, here's what this looks like for us. And you want to be very up front and very clear. And to know that you, and I hate to be Debbie Downer about partnerships, but when you go into something like this and you say, hey, we're going to commit so much time and energy into it. And I'm doing this with a family member and a good friend. There's a chance that that relationship doesn't survive if something happens to the business. Because here's what happens. likely one of you is going to be working harder or at least think you're working harder than the other ones. And so then there's resentment. You go, well, I feel like I should get 50%.

You guys should get 25 each because I'm handling all the business. I'm doing all the sales. And so that's where you guys need to get very clear on what the roles are, what the boundary lines are between your KRAs, your key results areas. And so if you do that way, this could be a fun hobby that turns into something. What's your current game plan? Like, how do you get customers? So it's really word of mouth, and we have social media, but it's not really, you know, social media, social media isn't really, you know, bigger anything.

But it's really word of mouth. So if we, like we did, an investigation at a pretty big barbecue restaurant near us, and that got us got us a few other people. Now, as for what you were saying with people having, you know, written out wrong, So I am being, I can pick up myself to leave. And it's how it is. But most of the time, I am scheduling. I am, you know, finding new customers as possible. I'm, you know, looking for anything new.

So you're, like, customer acquisition, new business. Yeah. Okay. Yeah. What about the other two? My cousin, she is the merchandise person. Oh, we got merch already. As well as, what was it?

You got merch? Like T-shirts and hats? What are we talking? So, Holly, we look to like a third-party place where they create it and we don't buy anything. They just, they sell it and we get a little bit, a dropout. Like a drop-ship situation. Okay. Yeah. All right.

And then third person, the friend? Yeah, he's the equipment tech. So what he does is if he wants to do, please, first of all, if anybody asks questions, he's the guy to ask. He's like the expert. Yeah. So without him, this whole. whole business kind of dissolves. Well, I'm not, I mean, all of us know all about the equipment.

It's just I have him making, having him answer all the questions because basically to keep the workload off of myself and my cousin. Okay. So him and I know all about the equipment. My cousin's so much about it, but she doesn't, you know. Gotcha. Okay.

Okay. But basically what his job is, number one, to explain the equipment to keep what they have questions. is that if you want, if he finds a new piece of equipment, his job is to learn as much about any piece of equipment as possible. Bring it to the company and say, here, here's this. That's the amount of money. It can do this, this, and this and this. You know, I think we should buy it. And then we have a discussion about it. Okay. Most important question, have you guys found any paranormal activity? Oh, yeah. And then what happens? Do you get like a reward?

You get paid the same amount, whether you find something or not? It's a good question. Yeah, so basically how I work is kind of like, you know, a money-back guarantee. So if we go in here and so we recharge anywhere between $50 to $100 to $160 to $160 per house depending on, you know, what we're looking at, what the dangers are. You said $160 on the high end? Yeah. I think you guys need to up your prices, man. This is serious work. If you want to scale it, you need to look at all the factors here.

and you need to get enough people in the pipeline where you can go, hey, if we did this full time, we can make this work. To the point that you're having to turn people down because you don't have time for it. That's how you know this is going to work. But for now, leave it as a hobby, continue to try to grow it. I would start a YouTube channel and really make this a media company. That's a good point. And it's been, what, six months, they said, since August. August of 25.

So, yeah, we're talking six months, still early on. So, yep, I would just take your time. Don't rush into anything and don't go into debt for this equipment. Save up and pay cash. When you've saved up and paid cash for a reliable used car, you want that thing to last. And the best way to keep it running for the long haul is to take care of it with people you trust. That's why I'm proud to welcome Christian Brothers Automotive is the official auto repair partner of the Ramsey Show. At Christian Brothers, they treat you like family.

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Visit CBAC.com slash Ramsey to find your local shop and get an exclusive Ramsey discount of 10% off your visit. 10% off, up to a $250 value. See store for details. George is up next in Newark, New Jersey. George, welcome to the show. Are you with us? Thank you. Thank you.

Sorry about that. Oh, absolutely. Yes. What's going on? How's going, guys? Rock and rolling. First of all, you guys are awesome. I've been working with you all for maybe like going on.

two years, about to be debt-free this year and everything like that, working with the smart best of pro in Maryland. Oh, good. Amazing. I had a quick question for you. Hopefully, this is your area, expertise. If not, then hopefully you got me in the right direction. Before I was working with you all, I was ignorant to a lot of stuff.

So I had got mixed up back in maybe 2016 with a guy from my general. Um, long story short, uh, he's, he was running the LLCO supposedly. And, um, I was investing into a, uh, high interest savings account. Um, so basically I got scam, long story short. Uh, he got me for 38 grand. Oh, no. And then I hired lawyers and everything like that. Um, so I, all in all, I was out maybe like 40, about 45 grand.

Oh my gosh, George. I'm so sorry. Was it like a Ponzi scheme kind of thing? or like a pit, like, or he would take your money and invest, you know, put it somewhere else, thinking he would make a difference and then he ended up not and lost all your money? Exactly. Oh, man. So I, you know, again, this is before I met you guys.

I wish I would have met you guys sooner. But that's done. So it's kind of a thorn in my side because I'm trying to figure out whether I should continue going after him because I already went to court. We already got the judgment. He didn't show up and everything like that. you know, he got served and everything. But the thing is, you know, I had to learn about the law because the judgment is just basically

a piece of paper right now because he got rid of all of it. Exactly. If he doesn't have assets, he got rid of all of them. He doesn't have income you can garnish. There's not much they can do. That's basically what I want to do. When you say you've been chasing him for four years, who has actually been the person trying to track him down and get him to pay? I hired a debt collection company.

and then at first it was you know it was free and everything like that because uh you know they get paid i get paid kind of kind of deal but then after maybe like a year or two then they they asked me if i wanted to like increase the some some kind of excuse they gave me and it was like another two grand or whatever i think to push stuff for because this is during the pandemic yeah so to push like paperwork for it and so that added to the money that i'm out and i wanted to see if you guys think i should just count it as a loss or just, you know, because without assets, you know, now that I know that I know that, it's just... Yeah, that's my fear.

You spend $25,000 chasing this guy down, and then it turns out you don't get a dime from him. Well, now you just lost another $25,000. So it may be time to emotionally write this off and call it a stupid tax and move on. Yeah. If it's been four years. I mean, this is weighing on you. It's living rent-free in your head, and I think it's time to move on. Oh, yeah.

People do all kinds of dumb moves and lose $40,000. You know, I went $40,000 to consumer debt back in the day. And so I'm going to chalk it up to a life lesson that was hard to learn and never let it happen again. Gotcha. Okay. I figured that. I'm so sorry, man. I'm sorry, George.

I'm like when I'm like a dog who's like, I want to get this guy. You want justice, right? I want to go full John Wick, man, you know, but at some point. And it was $38,000, you know? It's not $3,800. Like, that's a lot of money. It's a lot of money. Yep.

But the crazy thing is, is I do think once you emotionally kind of just, you know, just get over it, right? You detach and you're like, okay, I am moving on. You start to really, really see what you can do and what you have the power to do as you're experiencing now on baby step two, George, like you're getting yourself out of debt. Like that money will come back, right? Like you will be able to turn all this around, but it's just emotionally having just to let it go, which sucks. Sorry you're dealing with that. Maybe this will get you debt-free faster. If you allocate all of your energy and focus and resources towards that, I think you'll feel a whole lot better, and it'll be a fun story you

share with your kids one day when you're a multimillionaire. Okay. Okay. Best of luck, my friend. That's brutal. Rachel, that reminds me when I got scam long ago. Fraud happened. People opened up AT&T accounts, Verizon accounts under my name, Social Security number,

passed the dress, wracked up $1,700 bucks on both accounts, never paid a dime. And so I had to deal with that. And luckily, I had Zander ID theft. And so they stepped in and helped clean this mess up. Yeah. But I found who the people were because I was a sleuth. You found who it was, like the individuals? Yeah.

And I really wanted to go full, you know, wishbone on the case and go, I'm going to investigate. I'm going to bring them to justice. And then I just went, I'm like, what am I doing? What am I doing? Just Nancy Drew. I don't know how dangerous these women are. Yeah. Was it women?

It was two women. No way. Still have their names. Here, like in America? They were in Boston, in the Boston area. I lived in Tennessee at the time, but they opened these accounts up in Boston. Sure. Yeah, there you go. I'm not going to, I'll leave that for future investigations, but goodness

gracious. It's a hard pill to swallow when it happens. All right, Dominic is in South Bend up next. Dominic, welcome to the show. Thank you. What's going on? So I've heard you guys speak about zero credit score and buying houses with manual underwriting. I purchased a home years before hearing about you. So having zero credit score when buying my next one, won't be an option. Sure. You have a credit score now due to your mortgage payment. Correct.

Is that a loan going to be enough to maintain a good enough score? Yes. Have you made your mortgage payments on time? Yeah. Great. You likely have a great score. So there's no need to open up new credit accounts and credit cards to try to increase it. When you go to get another mortgage, they're just going to look at yours and go, okay, is your debt to income ratio good?

Do you have a history of on-time payments? And they'll grant you that. So unless you, have you checked your credit score? Is it in the tank or is it solid? No, it's solid. I just, I wasn't sure if just a mortgage alone would be enough in the future. Yes. Or if they needed more history.

No, you'll be good. And if you ever have questions about it, you can always contact, you know, Churchill mortgage and they can walk you through what they actually look for. But the score is the score. That's what they're looking for. And so they're not going to say, well, you don't have enough types of debt. That's all factored into your score. And so if your score is solid, you're going to be fine.

And once you pay off the mortgage, then six or 12 months after that, your credit score will disappear again. Okay. Until you'll go back through that process. But you're on the path, man. Good for you. How long until you pay off the house? I don't think I'll pay it off. Not with that attitude, Dominic.

What's left on the mortgage? Well, it's my first home. Okay. I still owe 160 on it. Okay. Because you're saying you'll probably move homes, move houses. Yeah. Yeah.

Okay. Yeah, I know that's a, but it's a good. question because we do talk about people not having to worship at the altar of, you know, the credit, the FICO score, the credit score, because you can actually get a house called, you know, through manual underwriting. But if you have a bad credit score and you go and apply for a mortgage, they're going to pull your credit score regardless. That will hurt you. Yes. If you have one that's undetermined, then you can do manual underwriting. But if you have a bad credit score when you go and get a mortgage, and as you're getting out of debt charge for a lot of people, consumer debt,

your score will lower as you, you know what I mean? Like, as you're starting to get out. That's how stupid the credit score game is. You're like, wait, I'm doing good things. I'm knocking out debt. And they're like, yeah, but we don't like that. We'd rather you keep it around and pay it perfectly. Yeah, so on Baby Step 2, you guys, if you're paying off your debt and then you try to go and get a mortgage, which is not part of the, you know, that's Baby Step 3B, but if you try to do it earlier and they pull your credit score, it may not be great because you're paying off your debt, your consumer debt. But very few people, and they always go, what about once I'm out of debt? I'm like, well, then you still need to save up your

emergency fund, and then still save up your down payment. And so you're talking potentially years of not having a score, which is fine. So your credit score will not be in the tank, as long as you actually close all accounts. Yes. If you still have any accounts open or you still have a credit card open, that will show up on your credit report and keep your credit score alive. And so make sure when you pull that credit report, nothing is active. And then six to 12 months later, there's no real exact timeline, but that's what I've experienced and many that I've talked to, your credit score just becomes indeterminable. It doesn't actually go to zero. Yeah, it's not actually technically a zero credit score. We just like to

say that because it sounds cool. It's fun. What's your credit score? Zero. Zero. I don't have one. That's the real flex. And that's honestly how they operated back in the day, like in our parents' day. The credit score has only existed since the 90s. So before then, you're like, well, how did people get homes? Well, they looked at your actual tax return. You got a relationship with the bank. And I looked at your income and savings. I went, okay. Your other bills to see if you pay on time, if you're a trustworthy borrower that they can lend money to. Like, they looked at you with a person, which is what manual underwriting to us anyway. Instead of the computer.

Instead of the computers going, good credit score, give them a loan. And so it's really not that difficult. I've done it myself. I'm alive to tell the tale. So it's worth pursuing to become completely debt-free and then do it the right way. If you're waking up tired every morning, you don't need more caffeine. You need better rest. And that's why Casper mattresses are engineered to help you sleep deeper and wake up refreshed.

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Exclusions apply. Well, you guys asked and we listened. The Live Like No One Else Cruise is back by popular demand. This is your moment to celebrate your debt freedom with Dave Ramsey and all of us Ramsey personalities in the Western Caribbean. Worst places to be right about now. And look what I brought today. Didn't even mean to. The Live Like No One Else Tumblr.

This is the tumbler we all got from the cruise. Yeah, so tropical. Huge. Take me back. I know. Look at all these leaves. See? That was like a swag drop.

I think we did in some of the rooms. Yes. You get fun surprises on this cruise, guys. So much swag. So great. So come share your story with Dave, swap jokes with me, sing karaoke with Jade. I don't know what Rachel is going to be doing, maybe shopping, shop with Rachel at some of the crews, get some accoutrements and souvenirs. And if this is for a specific person, this is not for everyone, it's for people who are on Baby Step 4 or hire, meaning you've paid off your debt, you have the emergency fund.

We want to celebrate that progress. Join us, March 14th through the 21st, 2027. You've got time to budget and save. You can get your deposit locked in. And right now you can save up to $300 this week only when you book by February 1st. Cabins are limited and you can lock in your spot with a $600 deposit.

Click the link in the show notes or go to ramsysolutions.com slash events if you want to learn more. And George, the cruisers that went back last year they got this email about a month ago. We gave them first dibs. There is some spots filling up because a lot of them are coming back,

which is so fun. So you need to, yes, if you want your cabin, do it. And a lot of people didn't know we did the cruise until after. They're like, I wish we had known. I wish we had known. So you know now. You know. It's happening.

If you've heard our voice, you know. There we go. Join us. It's going to be a good time. Tommy is in Colorado up next. Tommy, welcome to the Ramsey Show. Hey, thank you guys. How are you guys doing?

We're doing great. What's your question today? Hey. So I, me and my wife just bought a house in August. And it turns out that the HOA has a business. about a million dollars in deferred maintenance. Their solution is to do a $5,000 special assessments and then hopefully increase dues going forward.

We're wondering if it's a good idea to stay or maybe try and cut our losses and get out of this situation. Wow. That's pretty aggressive over a one-time $5,000 fee. What do you know that we don't? The couple things is the total amount to get back to zero would be a $20,000 fee. Okay.

So there might be more assessments in the future? There might be more in the future. And then we live in a high-fire zone, high-fired danger community, in 50-year-old houses. We lost our HOA coverage this year, and we were being covered by excess insurance. And we're expecting that to probably go up to almost 75 cents of every dollar that comes in produce. Was this disclosed to you, Tommy, when you guys bought? When did you say you bought just like in August? What did you say?

in August yeah yeah yeah there was nothing to disclose at best we maybe could have dug into the documents and found it but yeah the H-WA's not in very good shape well do you like where you live right now aside from these fees we really like the house but yeah we're just concerned about the money it was mentioned that the HOA if this does not pass which it's a community vote we could head towards bankruptcy as a community Yikes. Okay, what's the HO fee now monthly? And what will it go up to? $340 a month. And then there's no consensus about the raises would be. The documents are extremely limited to 3% a year, but that's not enough to keep up. Okay. Well, the bad news is you've got to pay this 5,000 assessment no matter what. Even if you sell, it's going to come out. And so you're not going to get out of that. So what you're really asking is, is it worth it to live your life? long term knowing it's going to get more expensive to live here. Yes. Yeah, what's your mortgage payment percentage-wise to the income you guys bring home?

Just shy of 30%. Just shy. Okay, okay. And because these dues, you know, the HOA and insurance and all that, we kind of wrap into our 25% rule of what your percentage should be from a mortgage standpoint to income. So I'm wondering as these start to notch up, if you start to get to be, yeah, over 30%, 35%, I mean, all of that, then there gets to a point that you can't afford to live there anymore, right? But I feel like that would take a lot in order for that to continue to raise. I just factored in just the mortgage.

If I were to factor everything else in, it would be closer to 40% currently with the HOA insurer. insurance. Is there room for your incomes to grow? There is. Okay. I would hold off personally. I don't think this is like we got to get out right now. I would hold off since you enjoy where you live. This is just a part of living in society, unfortunately, and HOAs get a lot of hate for a valid reason, and assessments are part of the annoyance. You're like, I already pay so much to live here. Now you're just going to throw five, it's like the mafia. It's like give us five grand or else. And you have no way out of it. And so long term, If you see the writing on the wall, if three years from now your income hasn't gone up, and yet all of your dues keep going up, the assessments keep showing up, that could be a sign, hey, it's time to move. But the longer you wait, the better off you are ROI-wise on this purchase of the home.

The sooner you sell, the more of a loss you're going to take. Because you've got to pay realtor fees, and you probably don't have much appreciation at this point. So this could be way more than a $5,000 loss just to get out. Yeah, no, we were estimating $25,000 loss to get out. out. Yeah. So I don't want to, you know, eat 25 grand to save five. And I think you're going to know a lot in 12 months, right? After a year, I just, I think that a lot will kind of shake out and you guys will kind of see where you're at. And then to your point, George, you could look up, you know, and say, okay, let's stick it out for another year. Let's see where our incomes are at that point. See what the HOA is doing, you know. And you can make, you make the call. Yeah, in three years or so. But I probably wouldn't go any less than three just because of everything attached to it for you wise. And if you want to live in a non-H-O-A community, you're going to have to go probably further out, and it may not be a home that you love. And so this is a trade-off of living where you want to live. HOAs are everywhere.

All right, Mark is in Sacramento up next. Mark, welcome to the show. Hello. Yeah, I told your screener, I'm just about, I'll be 63 next month, and I got a whole-term, whole-life insurance. Okay. that I've been paying into, oh, God, since before I was 30. Oh, wow. You made someone very wealthy.

My brother's one that signed me up for it. That hurts even more. That's not in the business anymore. Oh, boy. Yeah. So my cash value is up well over $40,000. The policy itself only pays out $160. Yeah.

And I'm married. My wife is 64. you know, she's obviously the beneficiary. And from what I understand, from listening to your show, that should I pass away, my wife will get the 160 and all the cash value is just... Goes to the insurance company. Yeah, it's horrible. Yeah.

And most policies, that's how it's structured, which is insane. I'm with you. At 63, you might have a hard time getting term life in place now, but it's... it's worth looking into and to see, you know, it's going to be expensive, but your whole life policy is also very expensive. What are you paying per month? Oh, God. It went up this year, like over $200. I'm paying $1,700 a year. Oh, my goodness. How much do you guys have in retirement? Are you self-insured to where if you didn't have this policy in place, your wife would be okay? If something would happen. Me and my wife, not including our house, are at about $1.2 million.

Okay. You might be at a special. bought and you can consult with a, you know, financial advisor to see, hey, is this worth keeping around? Because if you just put $1,700 in a savings account, you might be better off than continuing to pay this with $160K payout. Well, that's what I'm cut, you know, or what about taking out the cash value? Yeah, I mean, that's another option. You surrender the policy, take the cash value, invest that, plus your $1,700 a month. It'll probably be better off. You'll get to $160 pretty fast as long as you're still with us, and I hope you are. Okay, that's my question.

I would run the numbers. This might be something you keep around for now until you're very sure that if something were to happen, you are self-insured. But $1.2 million, based on your expenses, you might go, yeah, we can easily drop this and get this money out of here. And invest that with what we already have. Exactly. $1,700 on top of your $40K, that'll add up fast, my friend. And I'm so sorry that your brother hosed you into this. I don't know what your relationship is like with them right now.

30 years ago, 30 years ago. It's all water under the bridge. Hey guys, George here. Listen, just because it's 2026 now doesn't mean 2025's ideas all go away. Some things are timeless. Like if you want to win with money, it's still the same playbook. Budget like your money depends on it. Avoid debt like $10 lattes and build wealth on purpose.

But here's the truth almost nobody tells you. Most banks make money when you lose yours. They want you swiping, overdrafting, and racking up fees because that's how they stay rich, while you stay broke. And that's why I tell people to go with Fairwin's credit union instead. They actually want you to win with money and become debt-free. And their smart bundle gives you a no-feet checking account, a high-yield savings account, and my favorite, the new Ramsey-branded debit card that says debt is normal, be weird, right on the front. It's not just a piece of plastic with your money attached. It is a declaration. It says you're not buying the lie anymore. You're taking control of your money for real. So this year,

forget the gimmicks from the big banks, forget so-called rewards that keep you broke, and instead partner with a credit union that actually backs you working the baby steps. Go to fairwins.org slash Ramsey to get started. That's fairwins.org slash Ramsey, insured by the NCUA. Anna is up next in Seattle. Anna, welcome to the show. Hi, thank you. What's going on? Okay, so I bought a house in August. Briefly, I'm a divorced single mom. I have two kids. I basically used my divorce settlement

to buy this house. I put a big down payment. And even now, I am struggling with having a pretty high mortgage payment with my income. And I don't think it's sustainable. And I'm sort of going back and forth on, you know, what is it the best decision? If it wasn't, you know, it's done now, but what could I do to kind of help myself move forward? I bought a house and I thought I would have some money left over, but I had to pay off my car in escrow, and that added an extra like $18,000 in order for me to get my debt-to-income ratio low enough to be approved.

So that increased the amount of mortgage you needed, which increased the payment? Mm-hmm, yeah. Yeah, so. Tell us the ratios. What is your mortgage payment and what is your after-tax monthly income? So my mortgage is 3880. You can just, I don't know, 30, 3890, let's say that. That includes all of the homeowners insurance and property tax, so they put it in there.

So, yeah, so $3,800, and my net pay is $6,220. Oh, gosh. Oh, yeah. Yeah. I mean, I make $100. $103,000, but I live in Seattle, and it's a very expensive. So we're talking two-thirds of your take-home is going toward the mortgage, and that's not leaving a whole lot left to live and put food on the table, let alone accomplish any

financial goals. Are you getting child support at all, Anna? Yeah, I get $850 a month for two kids. Okay. And that's on top of your $6,200? Yeah, that's on top. All right. helps a little bit. Yeah, we can count that. Yeah, we kind of count all income coming in,

even if it is child support or alimony. Okay. So. It gets you to like 55%. Now, does that include the take-home pay? Are you, do you have any deductions coming out? Like health care premiums, 401K? I pay my health care. My kids' health care are on their dads, and I pay, I have to help pay for that. My deductions are just the typical stuff. taxes.

Just tax stuff. Okay. And a 401. I do contribute to 401K. How much? What percent? I believe I think I meet my company match. I think it's 4%.

Okay. So you're likely investing. If you make 100K, we're talking 4 grand. And so you wouldn't include that for the 25% parameter, which also helps your number. So now we're down to like 50-ish percent, which is not great. But at least we're kind of, we can see the fours from the trees here. Is there room for your area?

income to grow? There's a little bit. I mean, I don't, I wouldn't say any time soon. Okay. No. But when did you buy this house? I bought it in August. Okay.

It's only been half a year. Yeah, it's similar to our last callers, six months, because there's not going to be a ton of equity. I mean, it's already, I mean, it's, I already, well, I mean, I don't know how accurate, you know, looking at redfin, et cetera, is, but I mean, there is, there is already equity in the house. What would you get if you sold it after, you know, net of fees and all that? I mean, I don't, I don't, I didn't calculate the fees, but I bought it for, uh, 730, and it's, I mean, it says it's worth between 8, 20 and 9 something. Yeah, I'd be shocked in six months if it went up 150,000. Zillow and Redfin, they're not always accurate.

I know. What you could do, Anna, just to gather information as you're thinking about this, because it is a big enough question financially for you, is to get a realtor and have them just pull some comps in the area and just see. I mean, you know, maybe it's gone up a little bit. I mean, I don't know, but after you factor in maybe a little bit of equity, but then all the fees and the realtor fees and all that when you sell the commissions, like once you factor it all in, you may end up lose.

money if you end up selling, right? So there might be a reason to hold it and to stay in it for maybe two years or so, and it's going to be uncomfortable because it is eating up so much, but at least to get some equity back in so that you can make a better long-term decision because it probably was, I mean, I would feel like if I went through something like that and having kids, you want a place to land, you want something that you're like, okay, this is our home or building this new life, right? And so like I could see it almost being an emotional decision and not always factoring in like, okay, what is this actually going to feel like in real life? So I don't fault you for that. It makes sense. But we also want to get you

into a place where you can start building walls and you have some breathing room because, you know, going through a divorce, like, that's, that's in and of itself extremely stressful. And then you put on top of a financial strain, which so many single moms, they, I mean, you were in the boat with so many people, which is so hard, it's so heartbreaking, having to raise these two kids, too, along with everything. So have you done a month? Have you done a month? budget to see how much is actually left over or if you're going into the red each month? Um,

I mean, I'm working on it. I mean, a big part of why I got divorced was because of my financial incompetence. Because of yours? Because of mine. Okay. So what went on there?

Just, just not keeping up with details, spending whatever you want? Like, what does that look like? Yeah, like hidden debt. You know, I'm working on it. I'm actually in, like, a DA program, which is helping. Good. So I was completely out of debt, and now I have debt, again, home costs, or, you know, obviously, because I'm kind of moving outside my means.

But I do know some places I can tighten. I do have kind of a side job. I teach classes, and I can teach more. Have you cut off all access to debt? Have you frozen your credit and all that? Yeah. I don't use my credit. I don't use my credit cards.

I mean, the other question I had is I do own my car, and my car is worth, I'd say, $18,000. But I could easily sell it and then get a car that is, you know, good for my kids and for me and for commuting. I wouldn't. I wouldn't. You're not going to free up a debt payment. And then you're going to downgrade in car and you might have, you know, eight grand, but that doesn't solve that mortgage problem. Yeah, your car's not the issue. at this point.

So I would hang on, like Rachel said, for, you know, two years and then see where you're at. Nothing is like you're not going to miss a mortgage payment. You're just sort of skating by right now in survival mode. Right. And it is going to be uncomfortable. And that's where the budget is really going to help you. Because now whatever's left over after that mortgage payment comes out, you have to be very intentional with. And that's where a budgeting app, like every dollar will help.

So we'll make that our gift to you to help you figure all of this out. And when you fill out that every dollar budget, you'll list your income for the month. include the child support, and then below will be all of your expenses. Yep. Yes, to stay on the line and Christian will pick up. And, George, I vote that Anna cuts up all of her credit cards tonight. Absolutely. You said you don't use them, but you still have them.

I think you just cut it off at the source. Since you know it's an issue, right, just in general, it's been just cut off at the source. And listen, if you hate it, if you hate it, I promise, they'll let you back in. You can get another one. Yeah, I only have one and I pay a lot off. is all it takes. I'll tell you that. You can still do some damage. I'm not kidding, though. I would cut it up and actually

use a debit card. Force yourself to use your money because there is something even if you pay it off every month there's something about in the moment taking care of groceries, whatever it is. When you pay it, it's done. There's not a bill coming. And it actually factors in psychologically

and you end up actually spending less when that's the case. And so I would try to Anna. You're kind of on this whole new journey. this whole new chapter, this whole new life, right? And so do something so different. You're the kind of person who doesn't swipe the credit card, who uses her own money. Because she doesn't have one, right?

Because she cut it up. I love it. I love that challenge to you. Yeah, I should, sorry, I can I go back? Let me go back. I have one credit card to pay off every month. My other credit card I don't use it. I had a, I opened it because I used it for moving fees, et cetera, you know, some new things in

the house and get some appliances. and it had a zero percent. Well, I would cut it up and pay it off and close the account. And I want you to try no debt, Anna. Like hardcore, and it's extreme. This is extreme in our world today. But be so hardcore with it and be so extreme. And do it for six months and see how you feel.

Because I'm telling you, there is a freedom there. You don't even realize the burden you're carrying. So if you keep doing what you've been doing, you're going to keep getting what you've been getting. So do something so extremely different with your money and see the results. If you missed open enrollment, don't panic. Most health plans lock you out for the year if you didn't sign up by December, but Christian Healthcare Ministries lets you join anytime. CHM offers a simple, flexible, and budget-friendly

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that fits your budget and your values. Check out CHministries.org slash budget to learn more. That's CHministries.org slash budget. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel, joined by Ramsey personality, Rachel Cruz. We're taking your calls at AAA 825-5-225. Katie is in South Carolina up next.

Katie, what's going on? Hey, thank you guys so much for taking my call. I hope you all are well. We are. What's going on with you today? How can we help? So, I mean, I might sound crazy for seeing this, but I just can't shake the feeling that we're charging a little bit too much money. And I guess I'm looking for a way to justify my guilt or, you know, try and figure out how to process, you know, how fast do we want to grow and how should we scale our company.

Okay. So we, is this your husband? Yeah. Yeah, my husband started this business before we got married, and I kind of joined him after that. We've been in business for about 11 years. Cool. What kind of business is it? It's a trucking company, so we do some hauling. Wow, that business has really taken off, hasn't it?

Yeah, yeah. We've been very blessed. So last year, we brought in $290,000, and then after, you know, paying everyone and expenses, we profited about $120,000. thousand. And that's as a household. So that's your household income for the year? So that's not the household income. Most of that stayed in the business. That was just what the business profited. We paid ourselves about 50,000. Oh, wow. And that's together. That's total that came to you guys. Wow. All right. Yep. Correct. So where did this price hike come into play? And why? Yeah. So we, our pricing is very simple. We just match what the competition is around us. We don't have a lot of competitors.

And, you know, we're one of the few people that do our specific type of hauling in our area. So we really have just always kind of matched what market price is. But I'm kind of looking at case-by-case job-by-job and realizing that the range of profit we have on each job is super wide. So sometimes it's, you know, a small amount of profit. But a lot of the time, it's quite a lot of. large. So I'm just kind of, you know, when I brought up the idea of restructuring how we do our

pricing and, you know, taking it from super simple to trying to be a little bit more specific so we can afford to help some people that usually say, oh, no, you're too expensive. Well, you know, if we were willing to make 40% profit on that job instead of 60, maybe that person would have said yes. Because you feel like you need more business? Do you feel like you need more business? Well, so our work is very seasonal. The demand in season is so high. We can't keep up with it. But then during the off season, it's not really a thing. So we, you know, we obviously sew down a lot. And that's, we're blessed that, you know, able to work very full time, overtime, six months out of the years, enough for us to live off of. And then the rest of the time we can work on side gigs or spending more time with family, which is great.

So yes and no. We definitely do. don't need more work, we can't handle it in the summer. But the idea is obviously to grow so we can do even more during the summer, if that makes sense. Got it. So is there a moral profit margin in your mind that it's like anything above this? It's immoral to charge. Well, I don't have a specific number. It's more the concept of, you know, is that even a valid question? Well, I mean, if you look at prices, is his reasoning, hey, everything's gone up. Everything costs us more. Fuel, insurance, maintenance, tires, labor, permits. Like, that's all gone up. And so it's not like he's tripling the cost just for fun. And you guys are bringing home 50 grand as a household.

And it's a specific type of service that you said. There's not a lot of competition. And there's high demand. Yeah. And not a lot of supply. Which means you can charge more. And it's not like you're hurting anybody. They're happily paying you for this service that they can't do themselves. Yes. The more I say it out loud. the more I know I'm kind of making my husband sound like a superstar in business. But, you know, I just always back to, I always go back to the few cases where people have asked us for help. And, you know, we give them our price. And they're like, oh, you know, that's way over budget.

And in my head, I'm saying, I really know I could have helped this person out. I could have met their needs. And, you know, I chose not to because I wanted to keep that profit high. Yeah, I hear you. So I wonder if, because, you know, even here at Ramsey, for instance, like, we give stuff away a lot, whether it's tickets to a live event, books, you know, and some stuff, it's like very nice coaching, you know, one-on-one coaching that will pay for people's sessions. Like, we will have life with an open hands business-wise, but we're only able to do that because we are making a profit on the other end that is feeding a thousand people that work here and their families and all of it, right? So there is room to be, if there is room to be generous, I would talk to your husband about that and say, hey, you know, and I hate to, this sounds so like legalistic and I don't mean to be this like formulaic about it, but I don't know. Okay, I'm just thinking like four different situations, you know, throughout the summer when you guys are in high demand and people like, we need you, but I can't afford that pricing. You know, are there four times that you can say and you guys agree on that. Okay, I just feel something in my spirit that I'm supposed, that I'm supposed to extend some great. to them and help them.

Yeah. And so that way you're at least in the practice of doing that when you feel led, but it's not changing the whole structure of the company because I don't feel like you guys are doing something wrong or immoral to George's point. And, you know, you're, you know, you guys are bringing home 50K a year out of this thing. We're far from being greedy here. Yeah, yeah, yeah. It's not like you're making, you know, five million and you're like, oh my gosh,

I feel like we're overcharging everyone. Most of your customers are making more than you. And so that's the other thing to think about here. is you guys also need to put food on the table and you have financial goals and there's nothing wrong or a moral about making money. Have you screwed anyone over? Have you lied? Have you cheated? Right. No. Yeah. Absolutely not. And so it's okay to say this is what our service is worth and we're going to charge it. And if you can't afford it, that's not a slight on them. It's just saying, hey, you need to go somewhere else that you can afford. And so I can't get everything that I want.

There's things that I can't afford. And I don't expect that business to go, well, can you just bring the budget down for me? me, this is not a charity. If you want to start a charity, go for it. You can open a non-profit and do all kinds of charitable giving through that. Yeah, but I wonder, could she kind of like scratched the hitch a little bit within it, right? I like your idea of saying, hey, there's going to be a customer that comes our way that I just, my heart grieves for them and I want to help them. And that's totally great to say, we want to be generous to this many customers a year or when it comes up, we're going to give some people a break. But I don't think you also need to go, well, whatever your budget is, we'll try to meet that because that's how you go out of business.

could. Yeah, I mean, any industry, Katie, there's going to be people that can't afford. You know what I mean? I'm like, I was just thinking about, I don't know, that's why I thought social media. I'm like people that, you know, need help with social media. There's people that do that as a job that charge insane money because they're really good at it or people that are starting out and don't charge much. And you know, you couldn't afford, you know, the high ends. That's okay. It's a service they provide. And just because they charge a lot, you know, doesn't make them a bad person. It means they're probably really good at their job or they found this niche area of life, which is. what you guys have done. Yeah, yeah, for sure. But I would say lean into when you can, and it's not the whole business bottle,

but if there's moments to say, hey, I want to be generous in this instance. You and your husband get on the same page with that, and maybe that'll kind of help free up your spirit some in that generosity. Think about this way. If you guys charge more and you make more, that gives you the freedom to be more generous

when the time comes without it being a loss for you. And so I think there's nothing wrong with that. And listen, If you charge too much, you'll go out of business eventually. And so you'll know when the price is right, when you have the right amount of supply and demand happening. And so I don't think anyone's right or wrong here. I think we need to meet in the middle and understand you want to be generous and he needs to pay the bills. Both of you are right.

Tax season is coming up fast, which means a lot of you are paying more attention to your money and maybe realizing the holiday damage. So if you're trying to clean up the budget and start the year strong, cutting your phone bill is an easy win. With Boost Mobile, keep the phone you love and pay just $25 a month for unlimited data, talk, and text forever. No contracts, no traps, just predictable savings that help you stay in control. Switch now at boostmobile.com slash Ramsey. Restrictions apply. See website for details. Matthew is in Denver up next. Matthew, welcome to the show.

Hey, thanks for taking my call. How are y'all doing this afternoon? We're doing great. How can Rachel and I help? So I just, I was going to get some advice. My wife and I are looking, taking a $100,000 loan from my father to buy an eight-unit rental property. And I just kind of wanted to see what you guys thought based on the details of the property and everything else. Yeah, let's hear it because not super excited about this. So now taking it alone from your father-in-law. Yeah, give me your numbers.

What are you thinking? Okay, so I got a $900,000 property at 3% interest, owner finance. And so it's going to be $100,000 of my money, a $100,000 loan from my dad. And then the owner is willing to do $100,000 of in-kind money, is what she calls it. And that includes repairs and improvements on the property. for a period of 10 years. And then she's also willing to mentor my wife and I for two years, the first two years, that we own the home.

And then at the end of the 10 years, it's going to be a balloon payment. And I know this kind of goes against a lot of the day brandy, I guess, principles. But I wanted to see what you guys thought because I think it might be a good opportunity for us to kind of get a business and start moving that way. Do you guys own a home currently, a primary home? Yes, we do own a home currently, and we have no debts or payments at all, besides that house. Oh, besides the house. What's left on that mortgage? $190,000.

Okay, and what's your household income? We make around $135,000, and there's a lot of room for growth there. Cool. How did this idea come up of the eight unit and then your dad loaning you the money? Who brought it up? So we met this woman at a graduation, and we had owned a single family home, investment property, and we got to talk into her, and I kind of told her that we're real estate investors, and she's like, oh, well, I got a deal for you. My husband and I are trying to get out of this property because her husband is pretty sick,

and they're just trying to move down to Arizona. And so that's kind of how this got brought up. And then she is the one that's kind of structured this deal. Sounds like it. So she knows your dad and was like, well, if he ponies up 100, you pony up 100, we can make this work. And I'll mentor you for two years from Arizona. Yeah, she's kind of curtail related to my wife, not by blood or anything. Matthew, I just see 85 ways this could go sideways.

It's not worth it. It's not. I mean, from the way the loan structured with the balloon happening in 10 years, all this borrowing from family, going into a $900,000 investment property that you don't have the money for. How much you all have state? How much cash do you and your wife have? So I have $100,000 for the down, and then we have about $250,000.

the markets right now. Okay, why don't you, why do you have to borrow money from your dad? Take your money out if you're going to do the deal. I wouldn't do the deal, but don't, don't borrow money from your dad. You have $350,000. Okay, got it. And I don't know. I guess my thought is if I could keep it in the markets and make 10%, whereas I could pay my dad back 10% on the money that he loans the company. I mean, you're needing the stars to align with this. You need eight tenants who pay on time with no risk there. You need to pay dad back. You need to make money in the markets. There are so many variables

here that could go wrong. If all of this just tanks, you're screwed. Right? If the market tanks, you're screwed. You can't find renters are screwed. If the market goes down, as Dave always says, if Trump burps and the market goes down. I mean,

he was like, we're going to invade Greenland and the stock market got spooked. That's right. Yeah. And so you just don't know. I mean, yeah. But here's the parameters that are underlying. I'd pick off your house, Matthew. Yeah, the underlying principles are we never recommend you buy investment property until your primary home is paid off.

Number two, we never recommend you borrow to invest in a rental property. Always recommend paying cash. And number three, we always tell people never borrow money from family. And so there's a lot of principles here that are being violated, all for the sake of a quote unquote good opportunity. And can I, I'm going to say this, Matthew, and I don't want it to be rude, but you guys had one single residential investment property. Correct you and your wife?

That is correct. And you tell this lady that your real estate investors, which I guess technically you are. You have one investment property. And I think she saw, ding, ding, ding, here's my ticket out. I got to get out of this horrible situation I'm in because my husband's sick. And yet, I don't think it's like ill will on her end. I just think she thought, oh, my gosh, here's a guy who's probably doing all these like deals that you see on TikTok and he's got eight VRBOs.

here you know what I mean and he'll do it I bet I bet I could offer him this and we'll we'll structure the loan where it works for him so I can get out of here that's what she saw I mean honestly she didn't list it she didn't go and go to some you know investment firm that has you know 18 different investors around the country that go and buy property you know what I mean like no no no she found you and your wife and you thought you hit the hit a great deal and you hit a horrible deal not good not good Okay. Okay. Thank you. I appreciate your advice. Not what you wanted to hear right now.

Sorry, Matthew. So listen, what you and your wife did, though, with, I would pay off your house, but I'm all about, I think having investment properties is amazing. My husband and I do, my family. I mean, I think it's, I think it is great. You just have to start slow. Like the first one Winston and I got, this was, gosh, probably 10 years ago. It was a short sale condo in this, like, kind of like, sketchy part of Nashville. But it's what we did it. But we got a deal. we saved up, you know, we bought it for really not a lot, had to go do a lot of work in it. We sold it probably, gosh, seven years later when Nashville was on, and it was amazing. I was like, this is great, right? Like, you have to start slow, start small. Don't start with a million dollar eight unit property because you're about to take on all those people. Like that's going to be a huge headache.

Like get some things under your belt, start small, and then start to work your way up, which is not as flashy, not as exciting, but it is peace. That is a peaceful way to do this and not create chaos because you guys are setting yourself up from chaos and maybe to ruin a relationship with your dad if this goes bad too. I've rarely seen it where they go, yeah, borrowed money from dad. It worked out perfectly. Pay them back and he was happy. I was happy.

Usually it becomes, well, dad wants a piece of the pie now. He wants his money back because he needs to retire. That's it, yes. Which means I need to sell the property. Oh, and he wants appreciation. And so he wants that, too, on top of his 100,000, on top of interest. And it just always ruins family dynamics. Yeah, or he gets sick, and he needs 100 grand back, you know?

And I don't know. There's just a lot, a lot of things. So I would hold off and just go slow. And it's not exciting. It's not exciting, but it's worth it. What is the 250 invested for? What is that earmarked for? What exactly do you mean?

What am I saving that for? Yeah, you said you had $250,000 in the markets. I'm guessing that's not a retirement just in a brokerage account? Yeah, yeah, so it's a mix of IRAs and then just do a personal brokerage account. And that's just saving for retirement is kind of what I've been doing and kind of learning to trade it on my own and with the help from a financial investor and stuff. Okay. I was going to say, if you have liquid money that is really earmarked for nothing and you want to take it and throw it at the house, the non-retirement portion,

you could do that and speed up the process. You free up a mortgage payment, and then you can see it. stack cash fast. And you guys are amazing savers. So then, yeah, stack up some cash and get 300 grand here. You know, like save that over the next five years or whatever your income is. And then go buy a rental property with cash. And that's it. You know what I mean? Like you can you can do this slow walking it, but do it in the right order. Pay off the house. If you have the money, I would pay off your primary home. And yeah, I'd stay away from this deal. And right now we're just adding more and more and more risk. And your first real investment property

to be a $900,000, eight unit just feels like we're biting off a lot here. Yes. I mean, the purposes of helping this woman move. Right. With her ailing husband. Yeah. I mean, eight different families, eight different situation. I mean, that's a part-time job right there of what you just signed up for as a landlord.

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and they've been around for over 95 years. So you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them, and you can too. visit zander.com for instant online quotes or for a more personal touch give them a call at 800 356-4282 we are headed to detroit next to talk to katelyn what's going on kately hi how are you guys i grew up listening to guys so it's amazing i'm here that's fantastic how old

are you now you grew up i mean this is a long time yeah my dad used to have you guys on the radio i I used to do the, you know, putting every dollar in the individual envelope, but I'm 24. So nice. So great. Well, thanks for calling in. Yeah, of course. So my question is, I just graduated with my master's. It took me five years, and I ended up getting most of it covered with volleyball scholarships.

But now I have $50,000 in student loans. and I ended up getting a job out of college that pays $50,000, which obviously is a lot less. I mean, it's more like $3,000 every month. So I'm just calling in to kind of see how I should attack that and what I should be doing, you know, in the future to kind of get these loans paid off as soon as possible. Yeah, that's a great question, Caitlin. Are you living at home or where are you, what's your living situation? Yeah. So in my living situation, I pay 1,251 for my rent.

Okay. And it doesn't include utilities. I just moved in, so I don't know exactly how much my utilities are going to be. But I have it kind of conservative at like, you know, like 150, hopefully. Yes. And you said you're bringing home 3,000? Yes, 3,000 every month. 3,000.

Do you see your income going up? I know you just started. but I'm just thinking your rent is close to 50% of your take-home pay so it's eating up a lot of your income

so just to be able to pay these loans off faster I would want your income up either if it's from your primary job or you're probably going to be taking a second job Caitlin I hate to say it but right now in life

that's what I would do and whether you're waiting tables or doing whatever you can at night after your job a few nights of week can make a big difference. Yeah, that could be a thousand bucks a month. You can just throw all of that at your student loans. A hundred percent, yeah, and that's kind of been where I, because I'm very, obviously I went to business school. I'm very, like, entrepreneur, like, kind of minded, but it's a little

hard right now because I feel like I'm just, you know, looking at a million different things to do. And I'm trying to, like, center myself on what should I actually be focusing on to potentially, you know, start a brand or, you know, bring in some extra cash or something. like that. Yeah, well, your focus right now is just solely knocking out that debt because getting rid of that will give you the flexibility to actually pursue those things and not be a hindrance. Because right now you need that financial foundation of no debt and an emergency fund. Then we can start building toward this business. So what did you get your master's in? So I got a master's. It was an MBA, so just in business administration. Okay. And what are you doing right now for work? What kind of work is it? Finance. Okay. So there's probably

a lot of room for growth in the finance world. I'm hoping that MBA pays off, right? That it puts you more marketable. I mean, seriously, though, because some people are getting jobs out of college at 50 grand without an MBA. Yes, and I definitely understand that. And I also hope it does as well. I got my undergrad in marketing,

so it's kind of a big switch to go into finance. So I was kind of willing to take a lower paying job in order to kind of get my, you know, foot in the door. Credits or whatever up. Yeah, exactly. Gotcha. Yeah.

So I think, yeah, if there is something that you could start on the side that doesn't cost a lot that's going to bring in more than waiting tables or, you know, delivering, you know, food or whatever the side gig is that you are going to have, if you find a way to make more doing something else, that's great. We actually do find that you tend to make more in your skill set, like if you have a specific skill. You know, even if it's like helping. coach volleyball or not coach but even like do personalized sessions like with girls at the local high

school like parents will pay big bucks you know when it comes to sports so I'm like if there's if there's kind of a little niche there that you could make more doing there and be able to charge more than again if you're just waiting tables or something but yeah I would be getting an extra job or two and I would try to bring in I mean if you could cut this in half like right it because if it was a thousand a month that went towards this debt. That's 50 months. That's over four years. And we want that cut in half.

Could you bring in two grand a month, right? Extra beyond your job. And if your primary job, you get a raise maybe in six months or a year, like that extra raise goes straight to pay this debt off. Like everything is so tunnel-visioned towards paying off this debt.

Because just like George said, when you don't have debt and then you have some savings in the bank, that's going to give you so much flexibility in what you get to do in life. I mean, the options and the first. freedom you have. Okay, that makes sense. Thank you.

Do you have any other debt outside of student loans? I don't. I only have, well, I do. I have $2,000 for a medical thing that just happened, but I'm kind of waiting right now on the insurance to see if that's going to be covered, but that's about it. Okay, no car loan, no car to car debt. I have, I'm leasing a car, but.

Oh, Caitlin, I thought you listened to us. Guy, you grew up with us. Caitlin. You should know that. How many times have you heard Dave say it's the most expensive way to operate a vehicle? I know. And he calls it a fleece. It even has its own nickname.

What car is this? Tell me exactly the make model and year of this vehicle. So it's a Chevy. It's a Chevy LT 2025. And the reason why I leased it was because I had my car paid off and everything. And then it completely broke down. And it wasn't fixable. It was very old.

So I was kind of in between work at that time. And all my friends were on spring break, I didn't have anybody to take me. There was no Uber's. So I had to make a very, you know, quick call. And that, in my opinion, felt like the best thing to do because I didn't have any money saved for another car. And Uber's were, I mean, like I said, we didn't have Uber's where I was going to school. So that's like, I know. I talk to the dealer about potentially, you know, getting out.

There's no getting out of a lease. I mean, you're going to find someone to take it over or have the full amount in order to buy it out. My payment is only, it's $400. So it's not good, but it's not, you know. That's a lot of money out of your $3,000 take home pay. I mean, what's the buy-off amount? And you don't get to keep the car at the end, you know? Yeah, that's what's the other part.

So, no, but this is a good, this is a good lesson, Caitlin, because I want. you, well, I want you to know that it wasn't a great decision. Like, do you look at it now and you're like, oh, man, I probably, like, if anything, I could have taken a $5,000 loan out from the bank and at least gotten a $5,000 car and paid that off soon, right? Like, there's, there are, again, we wouldn't have endorsed that, but there are other things that you could have done in the situation. And when you get painted, this is true for anyone, into a corner, and you feel like this is my only option. That's usually when we make really bad financial decisions. Some people do that with a car situation. Some people do that with a house. They go and buy a house,

and they're like, oh my gosh, I feel like it was the only thing. It's the only house we could have bought or the school or college. It's the only college. I had to do it. I didn't have the money, so I had to take out the loans. It was the only way. Like when you paint yourself in a corner of having just one option, usually debt is going to end up having to be the solution. And so I do from from here on now, I would love for you to start thinking of like, okay, I'm not going to be pinned in a corner. I'm going to think about options A, B, C, and D. And I'm going to look at, okay, here are all my options. It's a bad option, good option, uncomfortable option. Oh, this is a really easy option in the moment. Probably not great long term. You know, you look at all the benefits. But when you have multiple

options in life and you force yourself to have multiple options, because there are always are, you make better decisions. So just remember that going forward, Caitlin. Now, if I was 24, I wish someone had told me that because sometimes I don't make great ones. Yeah. No, thank you. That's a So nice. Thank you. These are expensive lessons to learn now, but I'm telling you, at 24, if you figure this stuff out, you knock out this debt fast. From 26 or 27 onward, you are going to build so much wealth and have the ability to be an entrepreneur. But the problem with entrepreneurs is their risk meter tends to be broken. And so they're willing to take quote unquote risks for a quote unquote opportunities, which usually means leveraging a whole bunch of debt hoping it all works out.

And unfortunately, we take the calls from the entrepreneurs who say, my business failed and apparently they still want me to pay back these SBA loans. I know. They don't just forgive them just because the business failed. And so doing it with less risk is always going to give you the best ability to survive. Yeah, but you're such a go-getter, Caitlin. Just steer all that energy in the right direction financially, and you're going to do incredible. But you've got to rein that in.

And keep listening to us. But actually... Listen this time. But yeah. Don't just hear us. Listen. You're awesome. Thanks for calling.

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So my wife and I, we started the Ramsey plan a few years back and just started chipping away at it, kind of dive into that deficit. And we, you know, we've since had a family. We chipped away at it and snowballed our debt and got to baby step number five. And so with the three kids, they're getting to the point where we're getting a little nervous because we don't have anything for them saved, dedicated just to them. So we were looking at different ways to get the ball rolling. And once you kind of get into that and open their doors, there's a lot of different options. Looking at ESAs, looking at 529s, you know, Roth IRAs. And then even within those, there's different layers, pretty much one of those buckets.

And there's a lot of variables in the equation. So everybody has obviously the unsolicited advice because we have three daughters. So once they see them all, all you'd be a better start saving for college or for weddings and all this stuff. So I guess the fear is, you know, we want to do something, but we don't want to make a decision now that our girls might pay for later on, right? So how old are they? 9, 7, and 5. Okay. Nice.

We've got a decent timeline here until college, adulthood, weddings. And so the A1 is college and maybe a car if you're going to help with that. And so there's a few ways you can invest. I love the 529 plans are a great option for college-saving ESA also, but there's more limitations to that as far as your contributions. And then you can invest outside of that. And so you can do that in a brokerage account in your name. That's personally how I like it because you retain control. What scares me about some of these investment accounts for kids is they get control no matter what when they turn, you know, 18 in most states. And so you give a kid compound growth that's $100 something

thousand dollars. If I'm 18, I'm going to blow that money. You're like, hey, this is this should be for a down payment for your future home or her wedding. And they're like, I'm going to go. I'm buying a Lamborghini. Your girls will probably never do that awesome, but to George's point, it is, yeah, that's right, that's right. There is less control when it comes to that. And at 18, yeah, that's a lot to give, depending on, you know, how much you have saved. So, yeah, so the 529 is a great starting point for the college fund. That's what my husband and I are doing. Our kids are very similar ages.

They're 8, 10, and 5, or 6 now. Gosh, 8, 10. Time flies. So, yeah, we do five, we have 529s for each of them. And then we've just kind of created an account in general. I think it's even just like an index fund, honestly, that we just throw money in each month that we kind of save. And it's kind of earmarked kind of for them in the future. So whatever that looks like to be able to help them, you know, and what they need, weddings.

And yeah, I mean, all that kind of stuff that just gets so expensive. And depending on when it hits, you know, it could all be at once, too. You never know. So that's kind of what we look at. on it, the options with a 5.29, I know there's the custodial option, right, where we have more control as the parents versus them. At the same time, if they don't go into secondary education, they want to do something else or they get, you know, full rides, wherever. I know there's options there for that money, but if you make, you know, the unqualified withdrawal, we're paying a penalty. There's just, there's a disadvantage is when we start to look at it on. Yes, there can be. So the good thing is it grows tax-free, which is great. And then if you get a scholarship and grant, you can actually pull money out with these things. Yeah, pull it against a scholarship. So if you get a $10,000 scholarship, that's $10,000, you could pull out of the 529. And on top of that, with the new Secure Act 2.0, you can roll over up to 35 grand into a Roth IRA for them. And so there are more options. And I'd rather you have the money and not need it than not have it. And now they're turning to student loans and parent plus loans. That's the reality for most people. They go, well, I don't want to invest because what if we don't use it? And then they don't do anything. And so if I'm you, I'm going to open a 529 plan. for each kid and then open a brokerage account in my name like Rachel said and just put money in there and that becomes the future gift money wedding money whatever yeah and in their name Austin my

parents did this when um with Roth IRAs once they start working like when we start when we were teenagers and we actually filed taxes under our name once they've earned income they have earned income then you can open up a Roth IRA in that yes in their name and um and what's wild is my Roth which I'm trying I think when mom and dad opened that for me. I think I was probably 15. It's when I started working at. I thought you'd be like four years old. I'm like, well, Rachel's off. Yeah, no, no, no, no. They did it the right, the legal way. I really did go earn an income, but they, and I think they even helped fund it. I mean, honestly, like, because it wasn't a lot of money. As long as you earn that level, they can fund it. So if you made seven grand that year,

they can put up to that. They can use their own seven grand. Yes, exactly. In it, so yeah, it wasn't a ton. Yeah, it was definitely not even seven grand. But what's crazy is, starting that at 15 versus my husband started one after we got married and just, you know, just a 10-year period, like the difference in the compound interest. It's pretty wild. So you could do that later, too, for the girls as you're thinking about this. I have a feeling you're going to have a lot of options. But yeah, but you're not a big fan of the utmost, right, George? No, I just don't like the idea that the kids are going to have control at 18 because I just don't know what they're going to turn into. I hope they're wonderful sweet children and they're going to be like, we want to

give it to the old folks home. But there's a chance stay below it, prodigal son style. So I like retaining control personally. So I would do both. 529 plan and the brokerage account really hedges your bets. And it's okay to not be fair. You know what I mean? The nine-year-old should have more dumped in than the five-year-old because they have four extra years of saving and compound growth on their side. So it's okay to stay a stuff. You feel like more of a lump sum to start versus a higher percentage or both. If you have the money, I mean, if you've got 10 grand just sitting, burning a hole in your pocket, you can front-load that 529. And what's well to us, and as you we did this with our SmartVestor Pro, they can do a map.

It's not 100% because we don't know the future, but they can look at the rate of which tuition has increased and how much money you have in to see and say, okay, you know, are you overfunding it? Are you not? I mean, they can kind of help you balance. And even awesome, if you guys wanted to underfund it some, right? And you knew like, okay, we may only have, I don't know, 30 grand in it per kid or whatever,

even though college is going to be double that because we're going to do something else over here. But to Georgia's point, you have to invest somewhere else the difference just in case they do go to school. But if you're scared, they're not going to use it or whatnot. You could underfund it a little bit and invest somewhere else and use that money. And just be prepared to help cash flow if necessary. Or they're working part time to help pay. They're also working on scholarships and grants. So it's a great problem to have if all of your kids get full rides and the money sits there and you can change the beneficiary at any time. That's it too. It can be passed down. So your girls could even keep that 529 and give it to their

girl, right? Their kids. That's what's crazy about it. It can stay in. It grows in perpetuity. Yeah, there was one call we took. What was that? Last week, George, about the debt. It was a, it was a main, he was like 40 and he had a call, I don't know, it was a college fund. The 529 still. It was something like that. And he ended up saying, I don't want to cash it out. I'm going to keep it for my grandkids. Yeah, like a generational endowment, basically. And he did the math and it would pay for like 10 kids college, which is like the next generation down because of the growth, like, which is just why. So even that's something you know you can think of high level too. Awesome.

So much like I said, a lot of options there, and that's where it was kind of like a little overwhelming for us. So we wanted to kind of throw out a lifeline to see if anybody had any good. Yeah, for sure. I keep it simple. I hope we help narrow down your focus to those two things. One for college, one for non-college. And then I throw in the Roth once they start working. That'll be later down the road.

Get them working. That nine-year-olds, you know, might be coming up. These kids these days, they're also on side hustles. Yeah. Bile taxes on. They're going to become, you know, world-renowned YouTubers by 11 years old. Oh, gosh, that is true. That's what everyone's fear is.

They're like, everyone's going to just be like influencers and YouTubers. No one's going to go to college. And makes so much money. So it's a real fear because I do think college is due for a reckoning where families are waking up going, why would I go to school unless you need to? Unless you're becoming a lawyer, a doctor, a nurse, a teacher, things that require that degree. Yeah. Otherwise, don't just go to.

burn some time. As much as Rachel loved her college experience. No, I did. I know, but I do think, and again, I don't know where I sit with this. I'm not at this age where my kids are having to make these decisions right now. But there is something when you're 18 to still be in a structured type environment, if you have the money. Again, I'm not saying like, don't go take out crazy student loans and not know exactly what you're doing. Yes, you want a game plan. But there's something about those years that you're still in a system that helps you kind of like stay on You're in a little safe bubble to mature and grow and learn some social skills. They're still so young.

I know. It's just a very expensive way to do it. I know. If you're going to go into crippling debt. So always cash flow. You can go watch Borrowing Future for free on our YouTube channel. It's a documentary we did on the student loan crisis and higher education worth the watch with your kids. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio.

I'm George Camel, joined by Rachel Cruz this hour. The number to call is triple-8-8-25. 5-2-25 if you've got a question or you want to join the conversation. Jason is in Phoenix up next. Jason, welcome to the show. Hey, guys, thanks for taking my call, much appreciated. Absolutely. What's going on today?

My family and I are working our way through the baby steps. We're on baby step two, but there's a lot of uncertainty in our life revolving around two kind of central areas. One, the employer I work for is kind of cutthroat and the assessments are pretty strenuous each year. I do pretty all right, but, you know, there's always that uncertainty every year. And then two, I was diagnosed last year with the chronic disease that will progress with time. Oh, gosh, I'm sorry. My wife is a stay-at-home mom. We're a family of five, and there's just a lot of uncertainty in our life.

So I've been trying to think about things like the rate at which we pay off debt versus the rate at which we can start some other investments besides retirement slash start doing the 529 for our kids. And I just wanted your input on how to juggle the baby steps with those year by year uncertainties. Wow. Well, I'm so sorry to hear about your diagnosis. Is it something where they can sort of give you a timeline of here's how it will progress? You know, is this life-threatening? Is this something you can manage? What does that look like?

Um, it's a long-term progression. Um, it's a multiple sclerosis. Um, and so it definitely could be slow, but it also could be rapidly live a long full life still. Yeah. Yeah, I could. And medicines are really great these, in this day and age for it, but, um, it's still an uncertainty and the background sort of stacked on top of the uncertainty with the employer on a year by year basis. I just wanted to know if you got would say that in this kind of the case, we may want to invest in some $529 at the same time first, or something like that. Well, I probably wouldn't just because I think with the,

there's no guarantee that you're going to lose a job. And if you did lose this one, you'd have to replace it anyways, right? I mean, so there would have to be, you know, income coming in. And so how much debt do you guys have and how much do you make a year? I make about 170 a year. And we got about 80 grand in student loans to pay off and then a 266 mortgage.

Okay. And how long have you been with the company? Almost three years now. Okay. And is it... Go ahead. The other thing is that the company has great health insurance, like one of the best in the country. So my medicines are incredibly expensive.

And losing the company would mean losing co-pay assistance and stuff like that. You'd be paying like hundreds and hundreds a month out of pocket just for the medicine. Is there something obvious in the assessment coming up, Jason, that you think that you really could be terminated? Or is it just this kind of like lingering fear of like, ugh? It's a lingering fear. It's kind of subjective every year based on your supervisor. My supervisor likes me, but I don't think he assesses me of the highest quality of, say, the previous supervisor I did. It's just sort of a personal bias.

And so I don't think I have any issues to worry about really right now. Yeah, when is the assessment? It comes up, well, it's conducted in April and May, and then I find out the results in July. In July, I find out the results. Okay, gotcha. Yeah, I mean, if there's nothing obvious besides just, that it's just a tough, you know, they make tough calls really quick or, you know, besides that, I would, I would stick with the babysat because I think not having the debt is going to get you guys

freed up from not just that payment, but also the risk of having this bill that's just lingering. And if I, if you guys are able to, you know, cutting the lifestyle, which I'm sure you've done, because I think you guys have been working on Baby Step 2, you know, cutting everything down what you can, because you're making a, you make a great income. and I'm just wondering if you can get this thing paid off. You know, if you guys lived on 80, could you pay this off in a year? Yeah, I was trying to run the math on that. I think the most we can squeeze out of it, if you just said, like, the groceries, mortgage, and basic bills,

I think the most I could squeeze out would be about 4K a month. Okay. Our groceries are, those, a little high. Well, especially with my diagnosis, I have to eat a pretty good Mediterranean diet. Okay. Yeah. I can't just live on rice and beans because diet is a big issue with the progression of this disease, too, they've learned. Okay.

So this might take a little longer. So a year and a half is what we're talking for you to knock out the student diets? Yeah, that's what I'm thinking, like, year and a half-ish kind of timeframe. Do you guys have any savings right now? I mean, besides retirement, yeah, I got about seven grand, but I also. have some potential lawyer fees coming up dealing with my dad's probate. I'm sort of saving that for, if in case. Okay. Yeah, and I'm okay with you having a little bit. Yeah. Oh, I'm sorry. Man, you've had a rough go. Yeah, I would just make it an aggressive goal to get that paid off and then to get

that emergency fund. And then you'll be jumping right back into retirement in kids college. You know, I think a two-year difference isn't going to be massive. I think you guys will be, you'll be fine. And then if something switches with the job or if something does happen in July, that's when I would pause everything, stop paying aggressively on the debt, see if you can find something new, obviously, because you're going to have to support your family in some way. On the defense side, do you have long-term disability insurance? No. I was actually in the process of getting term life insurance, and thank you so much for asking me this. This is another point. I was in the process of getting term life insurance when the

diagnosis came through. So I was denied. But these are two different things. So you've got long-term disability, which is you're not passed away. You just are unable to work and you're still alive. Do you have that in place to your employer? Or do they offer that? No. No, I don't think they offer the disability one. They do have a life insurance. And then I also picked up accidental death because I have to wait five years after my diagnosis to circle back around to try to get term life again. Okay. They require a five-year assessment to see how you progress kind of thing. So, but no, I've been thinking a lot about the long-term disability insurance after listening

to you guys. And I just asked the guy who I do insurance with the other week if we could look at that. He hasn't been able to get back to me yet. But like I look at that as almost even more improbable than ever getting regular term life insurance because you're talking about a long-term thing. and this is something that's chronic, right? So I'm not sure I would qualify for that ever anymore. Yeah, I mean, there are some guaranteed issue policies.

They're just more expensive and it's not going to cover a whole lot. The policies are going to be much smaller, the face value. But there are certain things you can do, and I would keep pushing to get any coverage you can. Those five kids and your wife is protect your family. But, man, this is one of those, this is going to be your why as to why you're going to become debt-free even faster, as to why you're going to save like a madman to make sure that your family's taken care of.

And, man, I hope that this is something that you end up managing and you live a long life and your family's taken care of and those kids go to college debt-free. I'm praying that for you. I appreciate that a lot. Wishing you the best on this journey, man. Your amazing dad, Jason. The fact you're even thinking about this right now in the stage that you're in and what's going on is impressive. So keep fighting the fight, man.

written for you. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at Ramsey Solutions.com slash agent. That's ramsysolutions.com slash a ramsie show question of the day is brought to you by why refi if your private student loans are in default it's time for a plan. Why refi helps you refinance defaulted private student loans into a low fixed rate payment so you can get back on the baby steps and

start making progress. Go to yrefi.com slash ramsi that's the letter why r eifi.com slash ramsi may not be available in all states. Today's question comes from natalie in Wyoming. My husband and I do not agree on where money should be saved. I was putting money into a savings account until we got married last year. I have around five months of expenses in that account. My husband says it's losing value

due to inflation and thinks that any money we save should go into gold or crypto. While I understand his logic to a point, I do feel uncomfortable with it, especially the crypto. My logic is, if an emergency happens, we have immediate access to it.

I appreciate that he wants to invest for our future and protect our wealth. Does he have a point about the savings account or should we leave it where it is. Oh, boy. This is way beyond just where should we put our savings. This is a fundamental disagreement on what is an investment. That's true.

That's so true. So let's separate it. All right, let's talk about the emergency fund first. Your emergency fund should be liquid and accessible in a savings account and ideally a high yield savings account, which helps you at least keep up with inflation. Yeah, so he was right to that point. I agree. Yes.

You don't want it just sitting and checking or a normal savings account making it. 0% interest. Yes. So yeah, I'm right. Yes, he's correct. But then you are also correct that this is savings. This is not an investment. We see this as insurance.

So your emergency fund is like insurance. It's there when you need it. And so to your point that if something comes up, you have to be able to get to it. So yes, you are exactly right. When you put it in something that you can't get to, I mean, golly, God forbid, crypto or gold, you're going to have to sell, let alone even just the market, right? It takes a little bit to get the money out and all of it. So there's something about.

the ease of that emergency fund being there. But then also we want to invest, which is a different category. That is completely different. And clearly he's been online too much if he's going, we got to put all our money in gold and crypto. The US dollar is going to crash. Or maybe the stock market did 23% last year and everything's actually just fine. And so I'm not going to trust the fearmongers telling you to put all your money in gold or crypto. If you want to use some fun money and he wants to do that on the side, that's fine. But you need to be investing 15% of your income into legitimate tax advantage retirement accounts in mutual funds. If you have that as the foundation, a fully funded emergency fund, you're investing 15%.

If he wants to use some fund money because he's spooked and he wants to buy some gold to crypto, he can have at it. So I think we're having very different discussions here. And we need to just be clear on what this money is for and where we're going to store it safely. Good question. And if you want a great high-yield savings account, our friends at Fairwinds Credit Union have a really great smart bundle.

you can check out. Just go to fairwinds.org slash Ramsey, and you can get their high-yield savings account, along with their no-fee checking and the Ramsey Be Weird debit card. Fantastic. Great question. All right, Marissa is in Philadelphia up next. Is it Marisa or Marissa? It's Marissa. Great. Nailed it first try. What's going on? So my question is, should I slow my family down on Baby Step 2 to start putting money towards life insurance for my husband? who does work a high-risk job and or for both of us. I have context if you'd like that. Yeah, how much debt do you guys have?

So our mortgage is just under 500, and then we have about 44 in school loans, and then we are at about 90 in other like personal credit. Okay. And when you say, you know, putting money towards life insurance, what is it? you looked into and what has been the cost? So my husband's employer does offer life insurance, but it's not nearly enough to, you know, keep me and my current child and future child, who's expressed in about two weeks, a float.

Oh, congratulations. Thank you. So that's not nearly enough to cover our debt and to keep me afloat if something happens to him. Yeah. I've kind of noodled with the Xander, like kind of not really committing to anything, just estimates. For my husband, we're looking at about 70 to 100 a month to take out enough to cover our 10 months, is it 10 months or 10 years of expenses. Okay.

10 times your income? Yeah, 10 times the income. On like a 15 or 20-year term policy? Yeah. Okay. And then for me, we're looking at 30 to 50 a month. So I'm looking at like 150 to, you know, almost 200 a month. Yeah.

And like where I'm still working on getting us out of being in the red every month with budgeting and baby step two. Okay. Yeah. Well, life insurance is something I would get. So I would figure out where else we can cut in order to make this happen. What's your income? What are you guys bringing in?

So together we bring in about base 200 a year. He is paid hourly, and it's kind of tricky to, like, guess. But he makes about almost double what I bring home. And my husband travels for work. And I work from home, but I'm like the stay-at-home parent. So, like, I do all of the housemaking. I deal with our kids. It's a lot.

How are y'all in the red, though, Marissa, making $200 a year? We have debt that we have, so we've been married a few years, but we are just kind of getting around to like actually financing, not financing, consolidating our money. Okay. So it's all the payments. We just weren't budgeting. Yeah. We just weren't budgeting and we've decided that we can't keep moving like this.

Good. Well, good for y'all. It's kind of your, we call it your I've had it moment that you've had that you're like, yeah, we make 200. What are we doing? Why do we feel broke? How do we not have enough? So I love that. Do you guys have the Every Dollar app?

We've looked at it. Okay. I've not taken this step to actually set it up yet. Okay. We're going to give that to you for a year. That's our gift. To you guys. It's a little bit of a baby gift, we'll say.

Yeah, I like that. A push present. That's what I call it these days. It's right. Yeah. The Every Dollar app is your, I hope you get a better push present for that. I think if you do this budget together, you're going to go, oh my gosh, we're bringing in, you know, $10,000 a month, $12,000 a month.

Where is it all going? We're spending $2,000 at restaurants, you know what I mean, or whatever. Like, it's just crazy what you can spend when you're not watching. Like, so I think you will tighten up that lifestyle. It's going to be a big change for you guys is to live on nothing. You're going to live on nothing. Like, try to make a budget where you're, you know, a $70,000 income, right? And then everything else, $130, goes to this debt and gets a climate.

debt, but you don't even need that much. I mean, yeah, you guys will be out so soon. You really will. You have such a great income. You got, what, 134,000 in consumer debt? 90 plus the 44? Yeah. Okay.

Is there anything you can sell in there? Are there cars involved that have loans? We both have cars that are paid off, actually. That's one thing we don't have. Wow. Good. That's great. So what makes up the 90 and personal credit?

We have, so we finance some home improvement things. that's about 10. We have about 20 in personal credit card. Not to jump down a rabbit hole, there's a work credit card that has racked up debt that we're trying to fix that we are on the hook for, unfortunately. Yeah. Okay. And then it's 44 in student loans. Oh, is that 44 part of the 90?

Or is that on top of? It's on top of. Oh, okay. So it is 130. So you're right, George. I mean, so yeah, if you guys could live on 70, you know, and throw everything at this debt. Like, you know, you guys can make some big progress. Which means we are not doing any investing right now.

Yeah. We are making sure we're not getting big tax refunds. We are not eating out and obviously not going on vacation with a newborn, you know. We're not shopping. We're not going into Target. We're doing nothing, nothing but to get this debt paid off. And again, at Merza, I really think you guys will see some big progress. You know, I will give you this, though.

We call it sork mode. when you are expecting, we do say to pause everything and save up as much cash until you and baby are home and everything's good. So if you guys want to start, we're going to give you every dollar. So I want you guys to make a budget tonight so that you guys can get ready for February and start acting like, hey, we're going to live on a tight budget this month. But instead of that money going to debt, I would just put it in a savings account for now until you're good. and then once you come home and baby's good and you're good, take whatever has been in that savings for the next two months, which again, I'm hoping is like four grand, you know, eight grand or something,

throw it at the debt once that happens. And do not sit on the fence with this life insurance. Get it done today. I know it's $150 a month, but you need it. It's a non-negotiable in the baby steps. Zander.com or you can call 800356-4282. They'll take care of you. If you've been paying off debt working the plan and have reached base,

Maybe step four or beyond, you've done the hardest part. Now it's time to celebrate. The Live Like No One Else Cruise is back. March 14 through 21, 2027. Join all the Ramsey personalities and me as we sail to Half Moon Key, Cozumel, Jamaica, and Grand Cayman. Cabins sold out last time and they will again. Lock in yours with a $600 deposit at ramsysolutions.com slash events.

That's ramsysolutions.com slash events. If you're sick and tired of working so hard and got nothing to show for it, that is normal, unfortunately, and normal is broke. You don't have to live that way. Our every dollar budgeting app helps you find extra money every month and builds you a personalized plan to beat debt and build wealth. And in just 15 minutes, you'll find thousands of hidden margin, and you'll feel like you've got to raise. So don't live normal when you can live like no one else. You can start every dollar for free in the app store or Google Play. Jade is in Boise up next.

Jade, welcome to The Ramsey Show. Thank you. What's your question today? Okay, so my husband, I are newlyweds. We've been married about a year, and we have a huge budget we've combined. I'm afraid we over-expended when we purchased our house when we got married. But I'm just trying to figure out how to combine our multiple retirement accounts that are kind of spread all over. How old are you two?

How old are you two? I have a lump sum. Okay. I'm 48 and he's 55. Okay. And I think our 30-year mortgage will have some working until we leave 85 unless we do something really smart. Well, yeah, yeah, I hope we do something about that. No need to keep it around for 30 years.

And so you're talking about retirement accounts specifically? Yeah, and we also have a lump from of 70,000 coming in soon. So I feel like to have four options with that 70,000, and I want to be really smart with that. Okay. What's your household income? So we gross about 200,000, and I feel like we bring home about 130 of that. Great. So about 10K a month, a little over that. And do you guys have any debt outside of the mortgage? Just one car for 40,000. Okay. Okay.

And do you have any savings right now? Anything cash, liquid? Yeah. We have a 6,500 and an HSA account for most. medical expenses and about 15,000 set aside for our emergency fund. Okay. So we'll have 70 coming in plus the 15. When does the 70 come in, Jade, did you say? I think 50 will come in in about two months and 30 will come in, or 720-ish, will come in about four months from now.

Okay, so you'll have everything by April, April, May. Yes. Okay. Yes. Cool. And have you guys actually combined your finances as far as a checking account goes? How are you handling that? Yes. Yes. Okay. So let's give you the game plan and we'll talk about the retirement portion. So in the baby steps, currently you guys are in baby step two, which means

we're knocking out all consumer debt. So right now for you, that'd be the $40,000 car loan. And the good news is that $50,000 is going to knock out that loan instantly. Okay. And that was one of my first option choices is take that and put it there. I know there's more fun things you probably wanted to do with that, but that is the right thing to do because it frees up. giant payment. What's the car payment? 825. Woo, you just got a race. Great, great, great.

So that leaves you. You got 85 total coming your way. 40 goes to the car. That leaves you with 45K. And a majority of that will be your emergency fund of three to six months of expenses. And they have 15,000 already of that. Yeah. And so you're going to be golden. You'll be through baby step three by the time all this money comes in, which gets you to the point where you guys are investing 15% of that awesome $200,000 income. That's $30,000 a year you'll be putting into retirement accounts going forward. Tracking? Yes, yes. Okay. Now, when it comes to retirement accounts, you're talking

about combining those retirement accounts will remain in your own name separate. I mean, like, I have Percy from a state job, and then he has a bunch in, like, crypto, and then I have a bunch in one from, like, two prior jobs. I have some infidelity. of a higher job and some in, yeah, Vanguard and some in Transamerica. And some, like, so exactly. Okay, so it's just, there's funds all over the place, and you're just trying to simplify your life.

Yeah, so we have 10 different retirement places where money's being held. Yeah, yeah, it's a lot. Yeah, if I'm in your shoes, I would be contacting a SmartVester Pro and saying, hey, help us simplify. Now, every account that's in your name is going to stay in your name when it comes to retirement, and same for him. But what you can do is then kind of pull the money into one place for like, hey, I want to put it all in fidelity.

Well, they can help you kind of roll all of that over, the things that make sense to roll over. Okay. When we talk about being balanced now, he pretty much went 100% crypto and I went 100% ETS. Oh, but. So do, is like, is that balanced? That's what he thinks is balanced. Yay, we're like 50-50 almost of craters. crypto to eat.

So, like, as long as one of us has our head on our shoulders, we'll be good. Yeah, no, his risk meter is broken if he's putting 100% of his investing in crypto. Yeah, I would not be doing that. He's gambling. That's pure speculation. And again, I'm not mad at crypto. If you love crypto, put some fun money in there, but you guys need to be investing 15% of your income into tax advantage retirement accounts with things with a proven track record,

like mutual funds. ETS, that's fine if you want to do that. But putting it all in crypto. is not balanced at all, even if it's on one person. Okay. That's a different battle, though. If you had about 300,000, would you say about 15% of that is, like, the crypto play? You're saying he has 300,000 in crypto?

No, but if you had 300,000 total. In investments, how much is it okay to have in crypto? I mean, we generally say don't have more than about 5% of your world tied up in those things that are more speculative. So it depends on your net worth. You know, 10 grand in crypto for someone might be a whole lot, and for someone else it might be, you know, jump change compared to their net worth. So it's all about ratios there. But I think you guys have an alignment issue more than a financial issue.

What does he say, Jade, when you kind of bring up that, because, I mean, does the crypto make you nervous? It makes me really nervous, but he thinks that it'll make him be able to retire a millionaire. What if I told you he can still retire millionaire and not even touch crypto? Because what's really happening is he wants to shortcut it, which I mean he's 55. He's no, you know, no spry chicken here. But there's still a level of I want to get there faster. And therefore, I'm willing to take shortcuts and potentially try the get rich quick route.

Yeah, and it may not be a battle you win. I don't know, Jade. I don't know what your tolerance is for that kind of risk. but if I were you... I just wouldn't count on that money being there in retirement. Exactly. You have to play that game. Yes.

So I would, for your sake, just say, okay, well, if he's just like gung-ho and he's not moving anything, it's not very loving to you, I would say, number one. But number two, making sure that, yes, what income that you, you know, the 15% you put in to the ETFs or whatever it is, run, there's a calculator on Ramsey Solutions.com. and you can run some numbers and just look at those and see how that makes you feel, right? And you may be, you know, moving up in your job too and doing incredible and you're like, oh, it's great. We'll have $4 million for just my stuff.

I mean, I don't know. I was making up numbers, but, you know, you'll be great. You'll be fine. Even if his, you know, crashes out and who knows what's going to happen with crypto. That's what's hard about it is that there's no long-term track record that we can look back and see what's been proven with it. And so, again, I'm not mad that he has some in it, but I wouldn't, I think we're, I think he is not diversified at all. I mean, that's like the, not even the definition of diversification.

And most financial planners would tend to agree, which obviously they're in the market. They probably have a reason to their job. But still, it's a, it might take a third party like that. This helps with knowing that with the 30K left after paying off the new car, that we probably shouldn't put any more of that in crypto. No, I would not. Yes. Going forward, I would do that 30K of your 200K, that 15% should be going into actual retirement accounts, into mutual funds. So that would be the game plan.

Perfect. The next question I had, though, in where I wanted to, like a big thing is we did buy a $640,000 home. The average home price in our market is about $5.50. there's not very, you know, what percentage of your mortgage, what percentage of your mortgage, Jade, is going to, oh, sorry,

what percentage of your mortgage is from your income each month? Or how much is your mortgage payment? It's $4,000. We'll just refinance from 7.2% interest to 5.875. So it's high, but if you guys can keep up that income, you'll be okay. but I would not let that mortgage sit around for 30 years while he continues to accumulate crypto.

And that is my fear, is he will be 85 going, why would I put down on the mortgage? I can keep investing in crypto. It's going to be a hard conversation. When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our get started assessment. go to ramsysolutions.com slash start, answer some questions, and we'll show you what steps to take next.

Don't stay stuck. Take control of your money starting today. Go with ramsysolutions.com slash start. Our scripture of the day, Luke 1411, for all those who exalt themselves will be humbled, and those who humble themselves will be exalted. C.S. Lewis said humility is not thinking less of yourself, but thinking of yourself less. poetry right there that's good great quote all right let's go out to dave and denver what's going on dave hey guys thanks for having me i'm a loan officer for mortgages my question is i often get clients and they come to me needing a mortgage most often it's older clients in this situation and one spouse has passed away i have access to their assets or see what they what they have

and it's a vulnerable situation. And really they don't need a mortgage. What they need to do is sell some of their assets to get a home to downsize. I'm just looking for advice on how to bridge that gap with that and how to properly communicate that to them. So you see this going to a dangerous place, and you're like, how do I help these people when my job is to lend them the money that they're approved for?

Yeah, and it's not overly dangerous sometimes, but, like, you know, they have one spouse, maybe I've their whole life collecting these assets. And so when I come along, I say, hey, maybe you should look at selling somebody. That's kind of a, you know, my husband or whoever put all this together this whole life. Who are you to tell me to sell this? Yeah, you feel like, hey, that's outside the boundaries of my job. But it's like your heart is aching for them to be like, hey, you really need to go do these things.

Yeah, so I'm looking for words of wisdom on how to appropriately navigate that. Well, I think you have the right heart. That's the most important part is your motive and your spirit and the tone in which you deliver this. But I think just starting with, hey, I want to make sure this house fits your life, not just your approval amount. And as I'm seeing it here, I can see the assets over here. I can see what the mortgage payment's going to be. I think things are going to be tight unless you make some moves, make some sacrifices here. And you could offer, hey, one recommendation you could pursue is selling these assets, which could do X, Y, Z.

Yeah, yeah. And then it's just, it's not you telling what they have to do. do. It's just saying, hey, I treat people how I want to be treated and I can see all of your information here and this is what I'm seeing. Yeah. And it's kind of a, you know, for them, take it or leave it kind of thing, but it's almost for your conscious, you know, you're like, man, I see this. And I just want to say it out loud. But at the end of the day, they're going to be the ones, you know, making the decision. And if they don't take that advice and they do something else, that's okay. They're adults and they can do that.

At least you're sleeping well at night. You said your peace. Oh, yeah, absolutely. I'm just trying to find out how I sprayed the Dave Ramsey throughout my entire career. Yeah, love it. I love it. It's hard because you want to like, well, Dave says, but you can't do that. It's not going to work. And instead, you sort of get to the root of it.

You say, hey, the families that I see thrive when it comes to buying a home, they have margin outside of their mortgage payment to live and to save and to have fun and go on vacations. And right now what I'm seeing with your payment, it's going to be a lot of your income taken up by this payment. And so you can go, hey, here's the approval amount. But here would be a, let's run the numbers and see what would be a comfortable amount. And then you can kind of get to the principles without saying, well, Dave recommends 25% of your take home pay on a 15-year fixed rate mortgage. You know, they get to choose the wisdom at that point. Yeah, Big Dave.

I'm Little Dave, that's Big Dave. Little Dave, Big Dave. I like it. That's true. And you know what, Dave, I mean, honestly, it would be so impressive and it would actually garner a lot of trust, I would think, from the people you're working for. because in some situations, I'm assuming, you know, you're asking for them to pay less for a home, you know, and that's money out of your pocket too, right? If they choose that option. Less loan, less origination fee, less commission, all of them. Yeah, I mean, all of it. So there's something, I don't know, really trustworthy for you to say because you're not, you're not doing it the other way to be like, hey, you should spend more here with me so I can make more. In some of these cases, it's the opposite. And so they shouldn't be offended by that, right? There's, I mean, I mean, yeah, there's, I don't know, a lot of kindness in you even doing that. Yeah.

Well, thank you. Absolutely. Thanks for actually being, you know, serving well and serving your customer as well and being one of the good guys in the mortgage world. That's fantastic. Rachel, I've got a friend in the mortgage world and he, knowing what I do, he's like, dude, you would not believe the debt-to-income ratios people show up with. You're like, this is bonkers.

Like, no one should be giving them this loan. And sadly, a lot of the banks, you run it through the computer, and it goes, yep, give them the loan. That's fine. Yep, yep. We'll just do it. And the bank doesn't always care about the reality of your financial situation. Which is wild, because that's part of what got us into the biggest housing disaster in 0-8 is because of that kind of stuff, too. Lending people money, an amount that they shouldn't.

I know. Keep on doing it, though. Oh, my gosh. All right. Let's go out to Brian in Alaska. Brian, what's up? Hi, can you hear me? Yes.

Loud and clear. Okay, sweet. So I am in an interesting situation where I actually live in my dad's second home or my parents' second home here in Alaska while my family lives out of state. And I'm curious, I feel like I'm getting a smoking good deal on rent here. I just rent a room, but it's way cheaper than I can rent anything else in the area. How long should I stay here saving up for a house? how long should I let this good deal ride as long as they're willing to give it to me?

Yeah, that's a good question. How old are you? I'm 28. 28, okay. Are you married? Nope, single. Okay, any debt? Consumer debt?

I owe $12,000 on an airplane. That's in a leasing company that I own. Okay, $12,000. And is that it? No credit card. Or cars or car loans? Nope. Okay, great.

And how much? Credit card. And how much do you make a year? Last year. So I started a new job last year. I had six months. I made about $55,000. And then this year for the whole year, I guess about $120 to $140.

Good for you. Okay. And how much money do you have saved? I currently only have like $3,000 saved. Okay. How long have you been living at this, your dad's place? So I've been living here about three years. I actually used to own half of it, and then I sold out my half to my stepmom.

That paid off a lot of my debt and was able to give me a down payment for this airplane that I lease out. Okay, so this airplane, is this a business you have where you basically rent out the airplane? Yep. Okay. What do you make from that? Is that on top of your 140? That's completely separate. So I make about $40 an hour every time it flies. And right now it's pretty much just all going back into the business for improvements for the airplane.

Got it. I'm paying the principal for, I get a loan from a friend of mine, which basically zero interest, that I pay the principal out of my personal funds. and then what the airplane makes just kind of get circulated back into making improvements for the airplane. Okay, gotcha. Okay, so, yeah, the whole living, you know,

with parents or on their property or whatever, you know, for a period of time, I'm totally fine with it. I think after a while, there needs to be a point that you, you know, go and you're on your own and you're living, you know, on your own, doing your own thing. So what worries me is,

and I know you just got this job six months ago, you said, so I'm not going to harp on it too much, but you've had a, you know, you said I'm getting a great deal, all this, but you only got $3,000 saved. So there's a part of me that's like, you know, if people have this idea, I'm going to go live really cheaply at my parents, but then they don't take what they would have paid and rent or more of what they're saving and actually save it. You know, they end up spending it on restaurants and going on trips and stuff.

And so then it ends up being this point of like, okay, you weren't using it actually to benefit yourself or to get you further financially. you were just using it for lifestyle in the moment. So if you're doing this, I want you to be really, really disciplined and you make a great income. And so honestly, Brian, I mean, you're a single guy. You're living in Alaska and basically no rent.

If you could live on, I don't know, 40 grand a year or something crazy. Like you could bank so much money, not only pay off this airplane, but... You could have six figures saved up, you know, by the end of the year, maybe into a little into 27. really quickly. And I would use that for a down payment on a home because as soon as you can get something in your name building equity, that's the best route for you, Brian. So I'm okay with it for a little bit, maybe a year or two, but I would be so disciplined in that to actually put that money in that savings towards your future and a future home for yourself. I would just say, hey, Dad, I'm going to be out on my 30th birthday. And that's the plan. And you go, I'm going to save up like a madman until then. I'm going to live off $1,500 or $1,500 a month. And the other $6, $7,000 is going to go into savings for that, house. Build for your own future and independence, and you will not regret it. That puts this hour of

the Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.