You Can’t Make the Same Money Mistakes and Get Better Outcomes

0:00Brought to you by the EveryDollar 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 and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Campbell, joined by bestselling author Rachel Cruz and co-host of another show with you together, Smart Money Happy Hour on Ramsey Network. The number to call is AAA 825-5225, and I'd be remiss not to mention this crazy winter storm that has hit our area in Nashville very hard, so thinking and praying for all of those that have been affected by this. They're sure a lot without powers. 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 it going? Great. How are you?

1:00How can we help? I'm doing all right. So, me, my cousin and our friend, we started a company and we do paranormal investigations, and things like that. Paranormal investigation. We're talking ghosts. Yes. Okay. Wait, what? Real life ghost buster. Yes. So, I give you a base of what we do, we kind of just want to be with 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 where we're at, what kind of person we're dealing with, as in what the spirit is, because sometimes you can be understood by the basics of what, you know, what we're dealing with. Paranormal investigation was built on, opposed all the fancy equipment, and we do have a worksheet equipment. But it depends on. I like to text like orbs and stuff. Yeah.

2:00So, uh, I know about orbs. I've done it. I've done it ghost tour in my mind. You called on the right day, Rachel is all, she's about to pay you. Okay. Sorry. Sorry. This is a business you started with your cousin. Yeah. My cousin and then our friend. Okay. And did you start the business? Um, we started a business in August of 25. Okay. And how much have you guys made from this business so far? Um, so they tell me what we're looking at. We're looking at between 10 and $20,000 a year. Um, between the three of you. That's going to be split. Yeah. Okay. Now, my question is, is there a possibility, because I, obviously, you can do a full-time of $20,000 a year, even if it was just one of those. Um, so my question is, is this number one? Is it possible for me to do this full-time? And number two, if it is one of 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.

3:01We 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? Um, right now, uh, the full-time job, uh, around $60,000 a year. Okay. Okay. So, let's say the business, you're like, hey, we can see a path to where this could make $180,000 this year after expenses. We could, we could pay ourselves $180,000, 60 grand each to make this work. Would you all go all in on it? No, absolutely. Okay. Okay. Okay. So, with the partnership side, Jake, that's the, 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, um, you guys need to write out very, very, very, very clearly kind of this, um, almost contract between you all when the worst case happens.

4:03Because for a lot of people in partnerships, the worst case happens. And that's everything from, um, addictions, um, affairs, divorces, uh, I mean, you go, um, death. Yes. Someone wants out and they want to buy out. You got to buy out their share now. Yes. How does that work? All of it. So, you 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. Um, and you want to be very upfront and very clear and to know that you, and I hate to be down there 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, um, 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. And you go, well, I feel like I should get 50%. You guys should get 25 each because I'm handling all the business.

5:05I'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, your KRAs, your key results areas. And so if you do it that way, this could be a fun hobby that turns into something. What's your current game plan? Like, how do you get customers? Um, so, uh, it's really more than that. We get close to media, but it's not really, you know, close to media, close to media. It's probably, you know, bigger than anything. Um, but it's really worth a mouth. So if we, um, like we did an investigation at a pretty big barbecue restaurant near us, um, and take a few other people, um, now as for what you were saying with the, uh, with people having, you know, written out roles. So, um, I am the, I, I think it's in my company. There's a holiday. So, but most of the time I am scheduling. I am, you know, finding a cut into the possible.

6:05I'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. What was that? The merch like t-shirts and hats. What are we talking? Uh, so, um, how do we, we looked like a third party place where they created and, and we don't buy anything. They just, they sell it and we get a little bit. Like a dropship situation. Okay. Yeah. All right. And then third person, the friend. Uh, yeah. He is the equipment tech. Um, so what he does is if he wants to be taken, he, of course, well, if anybody asks questions, he's going to ask. Um, he's like the expert. Yeah. So without him, this whole business kind of dissolves. Well, I'm not, I mean, all of us know all about the equipment. It's just I, I have him making the, having him asked answer all the questions because, um, to basically keep the workload off of myself and my cousin.

7:06Okay. So him and I know all about the equipment. My cousin, someone was about it, but she doesn't know. Gotcha. Okay. Okay. But, um, uh, basically what, what his job is is number one to explain the equipment. Give what they have questions. Number two is that if you want, if he finds the piece of equipment, he's job is to learn as much about the piece of equipment as possible. Bring it to the company and say, here, here's this. That's a month, that's the amount of money. They can do this, this and this and this. You know, he should be, 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? Uh, you get paid the same amount whether you find something or not? It's a good question. Um, yeah. So basically how I worked is it's kind of like, you know, a money bag guarantee. Um, so if you go in here and, uh, so we recharge anywhere between $500 to $120 to $160 per per house depending on what we're looking at, what the dangers are.

8:07You said $160 on the high end. Yeah. I think you guys need to have the 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 on the pipeline where you can go, hey, if we do this full time, we can make this work. Yeah, at 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. See, we're talking about six months. Yeah. I would just take your time. Don't rush 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.

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10:1110% off up to a $250 value. See store for details. You George is up next in New York, 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 you going, you guys? Welcome to Roland. First of all, you guys are awesome. I've been working with you all for maybe like going on two years, but to be debt free this year and everything like that, working with you. Nice. Smart best approach in Maryland. Oh, good. That's 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. I am before I was working with you all. I, you know, I was ignorant to a lot of stuff. So I had that mixed up back in maybe 2016 with a guy from my gym.

11:19Long story short, he was running the LLC supposedly. And I was investing into a high interest savings account. So basically I got scanned long story short. He got me for 38 grand. Oh, no. And then I hire lawyers and everything like that. So I, all alone, 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 and 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 with going to 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. Um, you know, he got served and everything, but the thing is, you know,

12:21I had to learn about the law because the judgment is just basically trolling people right now because he got rid of all of you. Exactly. If he doesn't have assets, doesn't have income, you can garnish. There's not much they can do. That's basically what I want to know. You said you've been chasing for four years. Who, who has actually been the person trying to track him down and, and get him to pay? Um, I hired a, um, a debt collection company. And then, um, at first it was, you know, it was free and everything like that because, uh, you know, they could, you know, they could take, I could take kind of kind of deals, but then after maybe like a year or two, then they want, they asked me if I wanted to like, increase the, just some, some kind of excuse they gave me. And it was like another two grand or whatever. I think to push before, because you're doing 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 it's just. Yeah, that's my fear is you spend 25 grand chasing this guy down.

13:21And then it turns out you don't get a dime from him. Well, now you just lost another 25 grand. So it may be time to emotionally write this off and call it a stupid test. And call it a stupid tax and move on. Yeah. If it's been four years. I mean, this is, this is weighing on you. It's living right 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 grand. You know, I went in 40 grand and 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 out. I'm so sorry, man. I'm sorry, George. I'm like, when I, I'm like a dog who's like, I want to, I want to get this guy. Just it. You want justice, right? I want to go full John Wick, man. You know, but at some point it was $38,000, you know, it's not $3800. Like, that's a lot of money. It's a lot of money. Yeah. But the crazy thing is is I do think once you emotionally kind of just get over it, write you detached 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.

14:23As you're experiencing now, I'm maybe step two, George, like you're getting to 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 multi-millionaire. Okay. Okay. Yeah. That's my friend. Oh, that's brutal. Rachel, that reminds me when I got scam long ago. Fraud happened. People opened up AT&T accounts for rising accounts under my name. Social security number, past address. Horrible. Racked up $1,700 on both accounts, never paid a dime. And so I had to deal with that. And luckily, I had Xander 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,

15:24I'm going to investigate, I'm going to bring them to justice. And then I just ran, 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 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'm going to, I'll leave that for a future investigation. That's right. Goodness gracious. It's a hard-pilled 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. Mm-hmm. I've 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 alone going to be enough to maintain a good enough score? Yes. Or what's the... Have you made your mortgage payments on time?

16:25Yeah. It's 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 a church home 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 to twelve 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.

17:28Not with that added to Dominic. What's left of the mortgage home? I still owe 160 on it. Okay. Because you're saying you'll probably move houses. Yeah. We paid off, gotcha. Gotcha. Yeah. That's it. 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, 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, that chance for a lot of people consumer debt, your score will lower as you, you know, to 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. And we'd rather you keep going around and pay perfectly. Yeah. So on baby step two, 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 three B.

18:28But 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 hear that they always go, well, what about once I'm out of debt? I'm like, well, then you still need to save up your emergency fund. That's still save up your down payment. And so you're talking potentially years of not having a score, which is fine. That's right. 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 indeterminateable. 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. Zero. 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.

19:28You got a relationship with the bank. Yeah. And they looked at your income and savings. They went, okay. Your other bills. See if you pay on time. You have your trustworthy borrower that they can lend money to. Like, they looked at you as a person, which is what manual underwriting tests anyways. Instead of the computer's 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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21:29Yeah. 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 in all the rooms. Yes. You get fun surprises on this cruise, guys. So much swag. So great. So you come and share your story with Dave. Swap jokes with me. Sink karaoke with Jade. I don't know what Rachel is going to be doing. Maybe shopping. Shop with Rachel at some of the cruise. 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 four or higher. 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 bucks 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 If you want to learn more. And George, the cruisers that went back last year, they got this email about a month ago.

22:30We gave them first dibs. There is some spots filling up because a lot of them are coming back. Which is so fun. Yes. 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. Yeah. 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 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?

23:32The couple of 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, hired into community in 50-year-old houses. We lost our HOA coverage this year. And we are being covered by excess insurance. And we're expecting that to probably go up to almost 75 cents of every dollar that comes and produce. Was this disclosed to you, Tommy, when you guys bought? When did you say you bought just like in August? In August, yeah. Yeah, yeah, yeah. There was nothing to disclose. At best, we maybe could have dug into the documents and found it. But the HOA is not in very good shape. What 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 is a community vote,

24:35we could head towards bankruptcy as a community. Yikes. Okay. What's the HOA 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 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 here long term knowing it's going to get more expensive to live here? Yeah. What's your mortgage payment percentage wise to the income you guys bring home? Just shy of 30%. Just shy. Okay. And because these Jews, 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.

25:37So I'm wondering as these start to not shop, 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? I feel like that would take a lot in order for that to continue to raise. I just factor in just the mortgage. It's hard to factor everything else in. It would be closer to 40% currently with the HOA 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 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. Yeah, totally. It's like you've assigned brand or else. And you have no way out of it. And so long term, if you see the writing on the wall,

26:37if 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 hate. 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 asked to make $25,000 loss to get out. Yeah, so I don't want to eat 25 grand to save five. And I think you're going to know a lot in 12 months. Right, after a year, 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, and say, OK, let's take it out for another year. Let's see where incomes are at that point. See what the HOA is doing. And you can make the call, yeah, in three years or so. But I probably won't go any less than three, just because of everything attached to it, fuel-wise. And if you want to live in a non-HOA community,

27:38you'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. How can we help? Yeah, I told your screener. I'm just about, I'll be 63 next month. And I got a whole-term, whole life insurance. OK. And then I've been paying into, oh, God, since before I was 30. Oh, wow. You made someone very wealthy. Well, my brother's one that signed me up for it. Oh, that's not worth even more. This is anymore. Oh, sure. 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.

28:38You know, she's obviously the beneficiary. And from what I understand, from listen 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. That'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 worth looking into it 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 bucks. I'm paying 1700 bucks a year. Oh, my goodness. Yeah. How much do you guys have in retirement? Are you self-insured? Where if you didn't have this policy in place, your wife would be OK? That's something that happened. Me and my wife, not including our house, are at about 1.2 million. OK. You might be at a spot and you can consult

29:38with a, you know, financial advisor to see, hey, is this worth keeping around? Because if you just put 1700 bucks in a savings account, you might be better off than continuing to pay this with 160K payout. Well, that's when I'm, you know, or what about taking out the cash value? Yeah. I mean, that's another option. You surrender to the policy, take the cash value, invest that plus your 1700 bucks 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. OK. 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 then that's what we already have. Yeah. Exactly. 1700 bucks 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 for them right now. 30 years ago. 30 years ago.

30:38It'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, over drafting, 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 Fairwinds Credit Union instead. They actually want you to win with money and become debt free. And their smart bundle gives you a no fee checking account,

31:38a 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 line 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 fairwinds.org slash Ramsey to get started. That's fairwinds.org slash Ramsey. Ensured by the NCUA. Anna is up next in Seattle. Anna, welcome to the show. Try, 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.

32:38I 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 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 somebody left over, but I had to pay off my car in that scroll. And that added an extra like $18,000. In order for me to get my debt to income ratio low enough to be approved. Is 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? My mortgage is $3880.

33:38You can just, I don't know, $30,000, $3890. Say that. That includes all of the homeowner's insurance and insurance and property tax, so they put it in there. So, yeah, so $30,000, $3800. And my net pay is $6,222. Oh, gosh. Oh, yeah. So it's... I mean, I make $103,000, but I live in Seattle, and it's very expensive. So we're talking two-thirds of your take home is going through 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, that helps a little bit. So, yeah, we can count that. Yeah, we kind of count all income coming even if it is

34:39child support or alimony. Okay. So, it gets you to like 55%. Now, does that include the take home pay? Do you have any deductions coming out like healthcare premiums 401k? I pay my healthcare. My kids healthcare are on their dad's and I pay. I have to help pay for that. My deductions are just the typical taxes. Just tax stuff. Okay. I do contribute to 401k. How much? 100%. 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 numbers. Now, we're down to like 50-ish percent, which is not great, but at least we're kind of, we can see the force from the trees here. Is there room for your income to grow? There's a little bit.

35:41I mean, I wouldn't say any time soon. Okay. No. Well, when did you buy this house? I bought it in August. Okay. It's only been half a year. Yeah, similar to our last callers. Six months, because there's not going to be a ton of equity. I mean, it's, I already, well, I mean, I don't know how accurate, you know, if you mentioned it, et cetera. But I mean, there is, there is already equity in the house. You know, if you get a few solder after, you know, net of fees and all that. I mean, I don't, I don't, I'm going to calculate the fees, but I bought it for $730. And it's, I mean, it says it's worth between $820 and $9. Something. Yeah. I'd be shocked in six months. I was going to say 150 grand. I was always, Zillow and Redfin, they're not always accurate. Yeah, I know. I know.

36:41So 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 kind of 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 factored all in, you may end up losing 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 to place the land, you want something that you're like, okay, this is our home, building this new life, right? And so like, I can 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?

37:42So 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 mic, that's in about self-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, so heartbreaking. Having to raise these two kids too, along with everything. So, have you done a monthly budget to see how much is actually left over or if you're going into the red each month? I mean, I'm working on it. I mean, I think 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 not keeping up with details, spending whatever you want. Like, what does that look like? Yeah, like, hit in debt. You know, I'm working on it. I'm actually in a, like, a DA program, which is helping. Good. So I, I would completely out of debt

38:44and now I have, I have spent, again, home costs. Or, you know, obviously, because I, I'm kind of moving outside my means. But I do know, I do know some places I can tighten. I do have kind of a side job. I teach classes. And I can do more. Oh, good. Have you cut off all access to debt? Have you frozen your credit? Yeah, I don't use my credit cards. I mean, the other question I had is I do own my car. And my car's worth, I'd say, $18,000. But I could easily, I feel, you know, sell it and then get a car that is, you know, come back. Good for my kids and for me and for commuting. But I would do it. I probably wouldn't do it. You're not going to free up a debt payment. And then you're going to downgrade a car and you might have, you know, eight grand. But that doesn't solve the mortgage problem. Yeah, your car's not the issue at this point. So I would, 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.

39:46And then 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 I will make that our gift to you to help you figure all 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. Yeah. So say on the line in Christian, we'll 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 I think you just cut it off with the source. Since you know it's an issue, right? Just in general, it's been just cut off with the source. And listen, if you hate it, if you hate it, I promise they'll let you back in. I don't, you can get another one. Yeah. I only have one, and I pay, I pay a lot. One is all it takes. I'll tell you that. You can still do some damage. Hey, I'm not kidding though. Guy 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,

40:47there'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, and you're kind of on this whole new journey, this whole new chapter, this whole new life, right? And so, do you do something so different? You're the kind of person who doesn't swipe the credit card, who uses her own money. Yeah. Because she doesn't have one, right? Because she cut it up. I love it. I love that challenge too. I, I, I, I should, sorry, I can't, I go back, let me go back. I have one credit card every month. My other credit card, I don't use it. I had to, I opened it because I used it for moving fees, et cetera, you know, some new things in the house, get some appliances, and it had a zero percent. Well, I would cut it up, 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,

41:47and 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 health care ministries let you join any time. CHM offers a simple, flexible, and budget-friendly alternative to health insurance, and you can join any time. That's right. No open enrollment deadlines. CHM is perfect if you're self-employed, starting a business, or in-between jobs, because it gives you options without those out-of-control cober costs. And CHM is an insurance.

42:47It's a community of believers coming together to share medical bills and pray for one another. That's real peace of mind. You're not just sharing costs, you're sharing community. And families have trusted CHM since 1981 with billions of dollars and medical bills shared. You can see any doctor or hospital you want with no network restrictions and members say that they often save hundreds of dollars a month compared to traditional insurance. So make a change 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 and the Fairwinds Credit Union Studio. I'm George Campbell, joined by Ramsey Personality, Rachel Cruz. We're taking your calls. It's triple eight, eight, two, five,

43:47five, two, two, five. Katie is in South Carolina, up next. Katie, what's going on? Hey, thank you guys so much for taking my call. I hope we all are well. We are. What's going on with you today? How can we help? So, I mean, I might sound crazy for saying this, but I just can't take the feeling that we're charging a little bit too much money. And I guess I'm looking for a way to justify my count. 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, 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, isn't it? Yeah. What do you guys bring in here? So, last year we brought in two hundred and ninety thousand sales,

44:49and then after, you know, paying everyone and expenses, we profit about a hundred and twenty 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 profit is. 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've just matched 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 a case by case job by job and realizing that the range of profit we have on each job is super wide.

45:50So, sometimes it's, you know, a small amount of profit. But a lot of the time, it's quite 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 you're willing to make 40% profit on that job instead of 60, maybe that person would have said yes. So, do 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 slow down a lot. And that's, we're blessed that, you know, able to work very full time over time 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.

46:51So, yes and no. We definitely 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 a moral 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. It's fuel, insurance maintenance, tires, labor permits. Like, that's all gone up. And so, it's not like he's tripling the costs 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 it's a high demand. Yeah, I mean, it's 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 that loud, the more I know,

47:53I'm kind of making my husband sound like a superstar in business. But, you know, I just 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. Sure. 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 at 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,

48:55you know, and I hate to, I just sound 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 to extend some grace 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, okay. You know, you guys are bringing home 50k a year out of this thing. We're far from ingredient here. 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 recharging 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 immoral about making money. Have you screwed anyone over?

49:55Have you lied? Have you cheated? Right, no. 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 slide on them. They're just saying, hey, there's, you need to go somewhere else that you can afford. And so, I can't, 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? This is not a charity. If you want to start a charity, go for it. You can open a nonprofit and do all kinds of charitable gifts. Yeah, but I wonder, can she kind of like scratch this itch a little bit within its, right? I like your idea of saying, hey, there's going to be a customer that comes our way that I just, my heart, greaves 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. Any industry, Katie, there's going to be people that can't afford. You know what I mean? I'm like, I just think about, I don't know, I just thought I thought social media.

50:55I mean, people that 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 the high-end. 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. So nothing bad. But I would say lean into when you can. And it's not the whole business model. 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. Yeah. Think about it 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.

51:55I 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. Music 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 bucks 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 ramsy. Restrictions apply, see website for details.

53:00Music Matthew is in Denver up next. Matthew, welcome to the show. Hey, thanks for taking my call. How are you all doing this afternoon? We're doing great. How can Rachel and I help? So I just, I was going to get some advice. I was, 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 want to see what you guys thought based on the details of the property and everything else. Yeah, let's hear it because not, not super excited about this. Not so now to making it alone, but from your father. But yeah, give me your numbers. What are you thinking? Okay, so I got a $900,000 property at 3% interest owner finance.

54:00And so it's going to be $100,000 of my money, $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 brand via, I guess, principles. But I want to see what you guys brought. Because I think it might be a good opportunity for us to kind of get our business and start moving that way. Do you guys own a home currently at 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.

55:01Okay, 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 we had owned a single family home investment property. And we got to talk into her and she 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 are trying to get out of this property because her husband is pretty sick. 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.

56:04Yeah, she's kind of critical 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's 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. I mean, do you, how much do you all have state? How much cash do you and your wife have? And so I have $100,000 for the down. And then we have about $250,000 in the markets right now. Okay. Why don't you get 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 put 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 market to make 10% whereas I could pay my dad back 10% on the money that he loans the company.

57:09I 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. And all this just tanks, you're screwed. Right? If the market tanks, you're screwed. Yeah. You can't find ranchers are screwed. If the market goes down, as Dave always says, if Trump burps and the market, you know, goes down. I mean, what happened? He was like, we're going to invade Greenland. The stock market got spooked. That's right. Yeah. And so you just don't know. What? I mean, yeah. But here's the parameters that are underlying. I think that's how smart you are. 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.

58:14And you tell this lady that you're, you're 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 again, 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 in here. You know what I mean? And he'll do it. I bet 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.

59:14Okay. Thank you. I appreciate your advice. Now what you want to do here right now. Sorry, Matthew. So listen, what you and your wife did though, with I would pay off your house. But I, I'm all about. I think, I think having investment properties is amazing. My husband and I do. 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, we bought it for really not a lot. How 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, it is peace.

1:00:15That 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. Paid him 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. Which means I need to sell the property. Oh, and he wants appreciation. And so he wants that too on top of his hundred thousand, on top of interest. And it just always ruins. Yeah, or he gets sick and he needs a hundred grand back. You know, and I don't know. There's just a, there's a lot, a lot of things. So I would, I would hold off and just go slow and. And it's not exciting. I want to know exciting, but it's worth it. What is the 250 invested for? What is that earmarked for? What, what, what exactly do you mean? Like, what am I saving that for? Yeah, you said you had 250,000 in the markets. I'm guessing that's non-retirement just in a brokerage account. Yeah, so it's a mix of IRAs and then just be a personal brokerage account.

1:01:20And 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 help from a financial investor and stuff. Okay. I was going to say if you have liquid money that is really your mark 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, free up a mortgage payment, and then you can stack cash fast. And you guys are amazing savers. So then, yes, stack up some cash and get 300 grand here. You know, 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? 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 say away from this. Is reducing risk. 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. For the purposes of helping this woman move. Right. With her ailing husband. Yeah, I mean eight different families, eight different situations.

1:02:21I mean, that's a part-time job right there of what you just signed up for as a landlord. So there's not passive income. It's a lot of work. A lot of work. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies. And there's two little life insurance. Or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life insurance world like that whole life crap opposing as an investment opportunity.

1:03:26What you need is level term life insurance. Usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shopped the term life companies to find you the best options 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 Caitlin. What's going on Caitlin?

1:04:38Hi, how are you guys? I grew up listening to you guys. So it's amazing I'm here. 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 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 three grand 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.

1:05:41Yeah, that's a great question, Caitlin. Are you living at home or what, where are you, what's your living situation? Yeah. So in my living situation, I pay $1,251 for my rent. Okay. And it does include utilities. I just moved in. So I don't know exactly how much my utilities are going to be. Okay. 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, you know, 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. So from 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 I'm whether you're waiting tables or doing whatever you can at night after your job.

1:06:44A few nights a week can make a big difference. Yeah. I 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 right. Because I'm very, I always went to business school. I'm very like entrepreneur, like kind of minded. But it's a little harder 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 towards 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.

1:07:44Okay. So there's probably a lot of room for growth. Yes. In the finance world. And I'm hoping that MBA pays off, right? That 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. And I got my undergrad in marketing. So it's kind of a big switch to going to finance. So I was kind of willing to take a lower paying job in order to kind of get my, you know, putting the door. Yeah. 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, it's going to bring in more than waiting tables or, you know, delivering, you know, food or whatever the, 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,

1:08:46but 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? Because if it was a thousand dollars a month that went towards this debt, that's 50 months. That's over four years. And we want that cut in half. Like, could you bring in two grand a month, right? Extra beyond your job. And if your primary job, you know, 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, 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 freedom you have. Okay, that makes sense. Thank you.

1:09:46Do you have any other debt outside of student loans? I don't. I only have, well, I do. I have two thousand 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 credit card debt. I have. I'm leaving a car. But Caitlin. Caitlin. You said you've been listening. You grew up with us. Caitlin. You should know that. How many times have you heard Dave say it's the most opera, most expensive way to operate a vehicle? I know. And he calls it a fleece. And I think it even has its own nickname. What car is this? Tell me exactly the make model in the year of this vehicle. So it's a Chevy. It's a Chevy LT 2025. And the reason why I left it was because I was, I had my full car paid off and everything. And then it completely broke down and it wasn't flexible. It was very old. So I was kind of in between work at that time. And I, you know, all my friends are on spring break.

1:10:46I didn't have anybody to take me. There's no ubers. 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, I can say we didn't have ubers where I was going to school. So that's like, I know. I, I talked to the dealer about potentially, you know, getting on. There's no getting out of the lease. I mean, you're going to find someone to take it over or have the full amount in order to buy it out. Which is, it's $400. So it's, it's not good, but it's not, you know, that's a lot of money out of your 3000 take home pay. I mean, what's the buyout now? Well, and you don't get to, and you don't get to keep the car at the end, you know? Yeah. That's the first. So, no, but this is a good, this is a good lesson, Caitlin, because I want you, well, I, I, I want you to know that it wasn't a great decision. Like, do you look at it now? I'm 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.

1:11:51Right? 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. And 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, the only thing is the only house we could have bought or, you know, 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 out, 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, to 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, there always are, you make better decisions.

1:12:58So just remember that going forward, Caitlin, 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 so nice, thank you. These are expensive, 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, quote, unquote, opportunities, which usually means leveraging a whole lot of money. It 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 got to rein that in and keep listening to us. And actually listen this time.

1:13:58But yeah, don't just hear us. Listen. You're awesome. Thanks for calling. This is Dave Ramsey. We all want to know that the money we give to charity is doing something that matters. That it's making a real change, giving someone lasting hope. And here's one way to make sure of that. Give to pre-born. They're the real deal, proven, transparent, and changing lives every day. I trust pre-born, and you can too. They're on the front lines of the battle for life, partnering with clinics to offer free ultrasounds to mothers and crisis. Because when a mom sees her baby on that screen, something changes. It's not just a decision anymore. It's a person. And 80% of the time when a mom sees that ultrasound, she chooses life.

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1:16:04And the Ramsey trusted program is the only way to find a top agent you can trust who will help make your home a blessing, not a burden. It's easy. You compare agent profiles, interview them, and choose the right one to work with. You can find a local Ramsey trusted real estate pro for free at ramseysolutions.com slash agent, or click the link in the description if you're listening on YouTuber podcast. Austin joins us up next in Knoxville. What's going on, Austin? Hey Rachel and George, how are you today? Doing great. What's going on with you? Good. I'll live in the dream. Of course. Love to hear it. So my wife and I, we started the other Ramsey plan a few years back and just started chipping away at it. Kind of diving to that deficit and we, you know, we've since had a family. We, we, we chipped away at it and snowball 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.

1:17:04So we were looking at different ways to get the ball rolling and once you kind of get into that and open their stores, there's a lot of different options. Looking at the USA is looking at $5.29 is going to, 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 and everybody has obviously the unsolicited vice because we have three daughters. So once they see and all you, you better start saving per college or for weddings and all this stuff. And 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 you? 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.

1:18:07Personally, 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. It's 100 something thousand dollars. If I'm 18, I'm going to blow. You're like, Hey, this is this should be for a down payment for your future home or wedding. And they're like, I'm going to go buy a Lamborghini. Your girls are probably never do that awesome, but to George's point, it is 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 for the college funds. That's what we're this one. My husband and I are doing. Our kids are very similar ages. They're 8, 10 and 5 or 6 now. Time flies. So yeah, we do five we have 529s for 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.

1:19:07And 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, in what they need weddings. And yeah, I mean, all 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, so that's kind of what we look at. The options are the 529. I know there's a 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 feel full rights or whatever. I know there's options there for that money, but if you make, you know, the unqualified withdrawal or paying a penalty. 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. Yeah, pull against the scholarship. So if you get a $10,000 scholarship, that's $10,000, you could pull out a 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.

1:20:08And 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. Sure. 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, what money, wedding money, whatever. Yeah. And in their name, Austin, my parents did this with Roth IRAs. Once they start working, 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 what's wild is my Roth, which I'm trying to win mom and dad open that for me. I think I was probably 15 when I started working at. I thought you'd be like four years old. Well, Rachel's off. No, no, no, no, no. They did it the right, the legal way. I really didn't 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.

1:21:09As long as you earn that level, they can fund it. If you made seven grand that year, they can, they can do their own seven grand. Yes, exactly. In it. So yeah, it wasn't a ton. And 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'm 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 to stay below it, prodigal, sunstyled. 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 like the lump sum to start versus a higher percentage.

1:22:13If you have the money, I mean, if you've got 10 grand just sit and burning a hole in your pocket, you can front load that 529. And what's wild to us and as you we did this with our our smart vester probe, 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 also, if you guys wanted to underfund it some, right? And you didn't, 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 George'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 to be prepared to help cash flow. That's right. You have to. Or they're working part time to help pay. Yep. 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.

1:23:15That's it too. It can be passed down. So your girls could even keep that $5.29 and give it to their girl, right? Their kids, like that's crazy about it. Right. 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 call. The $5.29 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. Yeah. Like a generational endowment basically. And he did the math and it would pay for like 10 kids call, which is like the next generation down. Because of the growth, like, which is just wild. So even that something, you know, you can think of high level too. Awesome. So many 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. 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 on the road. Get them working. That nine-year-olds, you know, might be coming up these kids these days.

1:24:16They're also inside hustles. Yeah. Yeah. They're going to become, you know, world-renowned YouTubers by 11 years old. My gosh. That's true. That's what everyone's fear is. Like, everyone's going to just be like influencers and YouTubers. No one's going to go to college. 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. I know. As much as Rachel loved her college experience. No. I know. But I do think, and again, I don't know where I sit with this. I'm like, 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, you get, I'm not saying like, 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

1:25:16that helps you kind of like stay on track. Some say you're in a bubble to mature and grow and learn some social skills. They're still so young. They're so young. It's just a very expensive way to do it. It is, I know. I know. If you're going to go into crippling debt. So always cash flow. You can go watch borrowed 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 Campbell joined by Rachel Cruz this hour. The number to call is triple eight eight two five five two two five. 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.

1:26:16Absolutely. What's going on today? My family and I are working our way through the baby steps where I'm baby step two. But there's a lot of uncertainty in our life. We're evolving 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 a chronic disease that will progress with time and I'm sorry. I am 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, 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.

1:27:19Wow. Slash start 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 it something you can manage? What does that look like? It's a long term progression. It's a multiple sclerosis. And so it definitely could be slow, but it also could be. But you could live a long full life still. Yeah. Yeah. I could. And medicines are really great. The end of day and age for, but it's still an uncertainty and the background sort of stacked on top of the uncertainty with the employer on any year by your basis. I just wanted to know if you guys would say that in this kind of a case, we may want to invest in some 529 at the same time first. Or, you know, it's 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.

1:28:19And 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, how much debt do you guys have and how much do you make a year? I make about 170 a year. Okay. And we got about 80 grand in student loans to pay off and then a 266 mortgage. Okay. And how long have you been in with the company? Almost three years now. Okay. And is it, and the other thing is that, go ahead. The other thing is that the company has worried 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. Yeah. You'd be paying hundreds and hundreds a month out of pocket just for the medicine. So I think that's 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, oh, it's a lingering fear.

1:29:22I, 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. I say the previous supervisor I did. It's just sort of a personal bias. Okay. And so I don't think I have any issues to worry about really right now. Yeah. When is the assessment? Yeah. It comes up while it's conducted in April and May, and then I find out the results in July. Okay. 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. Yeah. I would, I would stick with the baby stuff 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, 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 two, you know, cutting everything down

1:30:24what 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 and mortgage and basic bills. I think the most I could squeeze out would be about four, about four K a month. Okay. Our groceries are bill is a little high. Well, especially with my diagnosis, I have to do the 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. A year and a half is what we're talking for you to knock out the students. Yeah. Yeah. That's what I'm thinking like year and a half, fish. That's great. Time frame. Yeah. You guys have any savings right now? Uh, I mean, besides retirement, yeah, I got about seven grand, but I also have some potential

1:31:25for the way reviews coming up, dealing with my dad's probate, I'm sort of saving that for in case. Okay. Yeah. And I'm okay with you having a little bit. Yeah. Oh, I'm sorry. Man, you all had a rough go. Um, 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 and kids college. You know, I think a two year difference isn't going to be massive. I think you guys will be fine. Um, and then if something switches with the job or something does happen in July, that's good. Pause everything. Stop paying aggressively on the debt. See if you can find, you know, something new, obviously, because you're going to have to, you know, support your family in some way. Um, on the defense side, do you have long term disability insurance? No. I was actually in the process of getting term life insurance and, uh, thank you so much for asking me. This is another point. I was in the process of getting term life insurance, uh, when the diagnosis came through. So I was denied. Uh, I do.

1:32:25I do. Well, these are two different things. So you've got long term disability, which is you had, you're not passed away. You just are unable to work. Right. Do you have that in place through your employer? Or does that, do they offer that? No. And no, I don't think they offer the disability one. Um, 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. And do you require a five year assessment to see how you progress kind of thing? So, um, but no, I, 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 I, but I 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 a 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.

1:33:26They're just more expensive and it's not going to cover a whole lot. The policies are going to be much smaller to the face value, but there are certain things you can do and I would keep pushing to get any coverage you can to 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 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. You're amazing dad, Jason. The fact you're even thinking about this right now and the stage that you're in and what's going on is impressive. So keep fighting the fight, man. We're rooting for you. All right, let's cut to the chase.

1:34:46It'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 ramseysolutions.com slash agent. The Ramsey Show question of the day is brought to you by YRIFI. If your private student loans are in default, it's time for a plan. YRIFI 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 YRIFI.com slash Ramsey.

1:35:46That's the letter Y, R-E-F-Y.com slash Ramsey may not be available in all states. Today's question comes from Natalie and 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 it's 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. 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

1:36:47savings account which helps you at least keep up with inflation. Yes. He was right to that point. I agree. You don't want to be just sitting and checking or a normal savings account making zero percent interest. Yes. 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. So to your point that if something comes up, you have to go to get to it. So yes, you are exactly right. When you put it in something that you can't get to, I mean, Gauley got for a big crypto or gold that 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 and gold in 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 fear mongers telling you to put all your money in gold

1:37:49or crypto. If you want to use some fund 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 or 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 beware debit card. Fantastic. Great question. Marissa is in Philadelphia up next. Is it Marissa or Marissa? It's Marissa. Great. Nail it first try. What's going on? So my question is, should I slow my family down on baby step two to start putting money

1:38:50towards life insurance for my husband who does work a high-risk job and or for both of us? Hmm. I have contact. Did he like that? Yes. Yeah. 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 personal credit. Okay. And when you say, you know, putting money towards life insurance, what have 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, my current child and future child who's expressed in about two weeks. 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.

1:39:50I've kind of noodled with the, the zander 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 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. Yeah. And like what 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 do you guys bring it in? So together we bring in about base 200 a year. He is paid hourly and it's kind of tricky to like, yes, but he makes about almost double

1:40:57what I bring home and my husband travels for work. And I work from home, but I'm like to stay at home parent to like, I do all of the house making. I feel our, our kids a lot. How are y'all in the red though, Marissa, making 200 a year? We have debt that we have, so we've married a few years. But we are just kind of getting on to like actually financing, not financing, consolidating our money. Okay. So all the payments for budgeting, yeah, we just for budgeting and we've decided that we can't keep moving like this. So 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, we, 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. We are, we've not, I've not taken this up 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 as it, it's a, it's a little bit of a, a baby, a baby gift

1:42:02we'll say. Yeah. I like that. A push, a push present. That's what they call it these days. That's right. Yeah. The every dollar app is your, I hope you get a better push present. 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. 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, and $70,000 income, right? And then everything else, 130, goes to this debt and gets it cleaned up. But you don't even need that much. I mean, yeah, you guys will be out so soon. You really will. You've got what, $134,000 in consumer debt, $90,000 plus the $44,000. Yeah. Okay. Is there anything you can sell in there? Are there cars involved? That at lunch? We, we both have cars that are paid off, actually, that's one thing we don't have.

1:43:03Wow. So that makes up the 90 and personal credit. We have, so we finance some home improvement things that's about 10. We have about 20 and personal credit card and there's not the 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. Is that $44 part of the 90? Where's that on top of? It on top of. Oh, okay. So it is, it is $130,000. So you're right, George. I mean, so yeah, if you guys could live on $70,000, you know, and throw everything at this debt. Like, you know, you guys can make some, 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 going to target. We're doing nothing, nothing but to get this debt paid off.

1:44:04And again, at Merce, 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, we're going to live on a tight budget this month. 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 have, once you come home and baby is good and you're good, take whatever has been in that savings for the next two months, what you get, I'm hoping is like four gr, you know, eight grand or something, throw it at the debts once that happens. So, um, and do not sit on the fence with this life insurance. Get it done today. I know it's a hundred fifty bucks a month, but you need it. It's a non-negotiable in the baby steps, zander.com or you can call eight hundred three, five, six, four, two, eight, two, they'll take care of you.

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1:46:22got a 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 and I are nearly wed, we've been married about a year and we have like a huge budget we've combined. I'm afraid we overextended 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 many? Two. Okay. I'm 48 and he's 55. Okay. And I think our 30 year mortgage will have some working to 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 what you're talking about retirement accounts specifically? Yeah, and we also have a lump from the 70,000 coming in soon.

1:47:23So I'd 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 grossed about 200,000 and I feel like we bring home about 130 of that. Great. So about 10k a month, little over that. 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 60,500 and an HSA account for medical expenses and about 15,000 satisfied for our emergency funds. 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 about two months and 30 will come in or 720 each will come in about four months from now. Okay. So you'll have everything by April, April May. Yes.

1:48:23Okay. 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 grand is going to knock out that loan instantly. Okay. And not only when my first option choices was to 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 a giant payment. What's the car payment? 825. Woo. You just got a raise. 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

1:49:24to the point where you guys are investing 15% of that awesome $200,000 income. It's 30 grand a year. You'll be putting into retirement accounts going forward. Tracking? Yes. Yes. Okay. Now when it comes to retirement accounts, you were 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 and one from like two prior jobs. I have some infidelity from a prior job and some in, yeah, man garden, some in Trans-America and some like so. Okay. So just there's funds all over the place and you're just trying to simplify your life. Yes. 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 smart investor pro and saying, hey, help

1:50:25us simplify. Now every account that's in your name is going to stay in your name. But 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, she pretty much went a hundred percent cargo and I went a hundred percent ETFs, so do is like, is that balanced? That's what you think is balanced is, yeah, we're like 50, 50 almost of crypto. 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 a hundred percent 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 percent of your income into tax advantage retirement accounts with things with a proven track record like mutual funds.

1:51:26ETFs, 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. That's about 300,000 would you say about 15 percent 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 five percent of your world tied up in those things that are more speculative. So it depends on your net worth. Ten grand in crypto for someone might be a whole lot and for someone else, it might be 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? Does the crypto make you nervous?

1:52:28It makes me nervous, but he thinks that it'll make him be able to retire a millionaire. What if I told you he can still retire a millionaire and not even touch crypto? Because what's really happening is he wants the short cut it, which I mean he's 55. He's no, you know, no fried 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 to get rich quick route. So yeah, and it may not be a battle you win. I don't know, Jade. I don't know what your tolerance is for, yep, 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 you, if he's just like Gungho 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

1:53:28in to the ETFs or whatever it is, run, there's a calculator and ramsysolutions.com and you can run some numbers and just look at those and see how that makes you feel, right? And, and you may be, you know, moving up in your job too and doing incredible and you're like, it's great. I will have four million dollars for just my stuff. I mean, I don't know. I'm just making up numbers. 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 like, 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 where, 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, yeah, it might take a third party or something. Yeah, it might take a third party or something. The top of knowing that with the 30K left after paying off the new car that we probably

1:54:32shouldn't put anymore of that in crypto. No, I would not. Yes. Yes. Going forward, I would do that, that 30K of your 200K, that 15% should be going into actual retirement accounts into mutual funds. So that would be the game. 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 $550. There's not very, you know, so if we were, what percentage of your mortgage, what percentage of your mortgage Jade is going to, or sorry, what percentage of your mortgage is from your income each month? Or how much is your mortgage payment? It's $1,000 and that's refinance from $7.2% interest to $5.85. So it's high, but if you guys can keep up with that income, you'll be okay. But I would not let that mortgage sit around for 30 years while he continues to accumulate

1:55:36crypto. 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 RamseySolutions.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 RamseySolutions.com slash start.

1:56:39Our script for the day, Luke 1411, for all those who exalt themselves will be humbled and those who humble themselves will be exalted. CS 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, often get clients, they come to me mean a mortgage. Most often it's older clients in the situation. And one spouse has passed away, I have access to their assets or see 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 downsides. I'm just looking for advice on how to bridge that gap with that and how to properly communicate that tool. Hmm.

1:57:39So 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 overly dangerous sometimes, but like, you know, they have one spouse, maybe under a whole life collecting these assets and so when I come on, I say, maybe you should look at some of these. That's kind of a, you know, my husband or whoever blows together this whole life, who are you to tell me to sell this, do you think? 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 properly navigate that. Hmm. 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 it's 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 is going to be. I think things are going to be tight unless you make some moves, make some sacrifices here.

1:58:44And you could offer, hey, one recommendation you could pursue is selling these assets, which could do XYZ. Yeah, yeah. And then it's just, it's not you telling what they have to do, it's just saying, hey, I try to, 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 get 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. That's, you know, their adults and they can do that. At least you're sleeping well at night. Yeah. No, you said your peace. Oh, yeah, absolutely. I just kind of thought how I sprayed the Dave Ramsey throughout my entire career. Yeah. Love it. I love it. It's hard because 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 and you say, 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.

1:59:47And 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 it. 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 15 year fixed rate mortgage, you know, they get to choose the wisdom at that point. Yeah. Big Dave. I'm a little Dave. That's big Dave. A little Dave, big Dave. I like it. That's true. It's all right. You know what Dave? I mean, honestly, that's, it's really, it would be so impressive and it would actually honor 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. Less loan, less origination fee, less commission, all of it. 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.

2:00:48And some of these cases, it's, it's the opposite. And so they shouldn't be offended by that, right? There's, I mean, yeah, there's, I don't know, a lot of kindness in you even doing that. Yeah. Thank you. Absolutely. Thanks for actually being, you know, serving well and serving your customers 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. 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 a way. It's because of that kind of stuff too. Lending people money. Given it. An amount they shouldn't. I know. I'm doing it though. Oh my gosh. All right. Let's go out to Brian in Alaska. Brian.

2:01:48What's up? Hi. Can you hear me? Yes. Loud and clear. Okay. Sweet. So I am an interesting situation where I actually live in my dad's second home or my parent's second home here in Alaska while my family lives out of state. 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 could rent anything else in the area. How long should I stay here, stayed me up for a house. How long should I let this good deal ride as long as they're willing to give it to me? That's a good question. How old are you? 28. 28. Okay. Are you married? Nope. No. Single. Any debt? Consumer debt? Uh, I owe 12,000 dollars on an airplane, um, but that's in like at least in companies I own. Okay.

2:02:4912,000. And that is at it. No credit cards or car loans. Nope. Okay. Great. No credit card. And how much do you make a year? Uh, last year. Um, so I started a new job last year and six months, uh, I made about 55,000, um, and this year, uh, for the, for the whole year, um, I guess about one 20 to one 40. Good for you. Okay. And how much money do you have saved? Um, I currently only have like $3,000 saved. Okay. How long have you been living in this, uh, your dad's place? Uh, so I've been living here about three years. Uh, I actually used on half of it and then I sold out, um, my half to, um, my step mom, um, that paid off one of my debt and, uh, and was able to give me a down payment for this airplane that I at least out. Okay. So this airplane, is this a business you have where you basically rent out the airplane?

2:03:50Yep. Okay. What do you make from that? Is that on top of your 140? Uh, that, that's, uh, completely separate. So I make about $40 now every time it flies, um, and right now it's pretty much just all going back into business for improvements for the, uh, for the airplane. Got it. Okay. Not paying the, uh, the principal for, um, I get a loan from a friend of mine, um, basically zero interest, um, that, uh, that I pay the principal out of my, my personal funds. And then, uh, what the airplane makes just kind of get circulated back into making improvements for the airplane. Okay. Gotcha. Okay. People 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, um, 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

2:04:51great 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, 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. Yes. You know, by the end of the year, maybe into a little into 27 really quickly. And I would, 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.

2:05:55So 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 a thousand or 1500 bucks a month. And the other six seven grand is going to go into savings for that house, build through your own future and independence, and you will not regret it. It puts this hour of the reign to 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.