Don’t Let Panic Influence Your Financial Decisions

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Speaker 1 This is the Ramsey Show, where America hangs out to have a conversation about life, specifically your money, your profession, and your relationships.

Speaker 1 Alongside the fabulous, incomparable Jade Warshaw, I'm Ken Coleman. We're going to be together for you all today.

Speaker 1 Jade will lead out on what to do with the money and I'll help out on how to make more money. So that's a good combo and we're excited to have you with us.
Triple 8-825-5225 is the number.

Speaker 1 Triple 8-825-5225.

Speaker 1 You ready to go, partner? Are you ready? Yeah. Demo, your vocal exercises.

Speaker 1 She's ready, folks. Aaron will start us off in St.
Louis. Aaron, how can we help?

Speaker 2 Hi, guys. I appreciate you taking my call.
Hope you guys are doing well today.

Speaker 1 Yes, sir.

Speaker 2 Brief and to the point, about a year, about last September, my wife had a

Speaker 2 major medical,

Speaker 2 something happened medically that

Speaker 2 has left her to where she's on temporary disability.

Speaker 1 Oh, I'm sorry.

Speaker 2 Well, thank you.

Speaker 2 The problem is, is that the temporary disability is less than half of

Speaker 2 what she was earning whenever she was working.

Speaker 2 We're waiting for some sort of a resolution to come with us medically so that we should get back to work. But in the meantime,

Speaker 2 the four walls are built.

Speaker 2 I've asked her if we could sell the car, but that's a non-starter for her.

Speaker 3 Why is that a non-starter?

Speaker 2 Because we was able to make the payment whenever she was we was able to make the payment on the car whenever she was

Speaker 1 working. Okay.

Speaker 2 And she said that whenever she's able to get back to work, we'll be able to

Speaker 2 your car payment will be, we'll be able to cover that too.

Speaker 2 But what she's wanting to do is she has $100,000 worth of student loan debt that we've already tried.

Speaker 2 We've already went through Lowell Road and they're not in default, so we couldn't go through why refi.

Speaker 2 So we can't refi the student loans. She's current on those.
The problem though is that where we're at, what's what's actually killing us right now is

Speaker 2 we have about $30,000 worth of credit card debt.

Speaker 2 And she's wanting to do a debt consolidation loan. I've considered this.

Speaker 2 She's wanting to do a debt consolidation loan in order to possibly wrap those all up into a lower payment, smaller than the payments that we have right now.

Speaker 2 And I was just kind of curious as to what your idea, what your opinion is on this.

Speaker 3 Yeah. Before I get to the debt consolidation, I want to know a little bit more about the financial

Speaker 3 income situation.

Speaker 2 So she's on less less than half um what's your what are you bringing in every single month uh monthly i make it's thirteen i make 1909 every two or um

Speaker 2 uh twice a month so

Speaker 1 four thousand something like that four thousand a month

Speaker 3 okay and then what's hers

Speaker 2 hers is i want to say 1800.

Speaker 3 Okay, so you're 38, hers is 1,800. And

Speaker 3 is there, has anybody, has anybody said, hey, hey, she'll be able to be back to work in six weeks or she'll be back to work in 12 weeks?

Speaker 3 Has anybody, has a doctor given you some sort of prognosis on that?

Speaker 2 Not yet. No, right now, her life is actually being controlled.
Her pain is actually being controlled by medicine. And

Speaker 2 it's something called trigerminal neuralgia, which is, long story short, they call it the suicide disease because a dentist drilled into

Speaker 2 the nerve in her jaw.

Speaker 1 Holy sis.

Speaker 2 Yeah,

Speaker 2 it's very,

Speaker 2 i don't want to say rare but um that's literally what it's called and um the only way to treat the only way to treat the pain is with uh

Speaker 3 um anticonvulsants oh wow so she is in mad pain yeah oh i'm so so sorry oh i'm so sorry

Speaker 1 she's not awake she has to take the pain medicine the pain medicine puts her to sleep so sorry is there any end in sight

Speaker 2 right now no there was a well and then that's something else too, is that we was told that there were two specialists that could do surgery for it, but there was a 70% chance that

Speaker 2 she would be healed. The surgery was going to be $30,000 out of pocket.

Speaker 1 Okay.

Speaker 2 And insurance would not cover it. I took a loan against my stocks to put...
I took a loan against my stocks to pay off one of my credit cards to get a better credit score.

Speaker 2 So that way I could potentially get a loan for at least half. And then they was going to work as a payment plan.

Speaker 2 But they said that unless we was able to come up, if we could come up with half of it, they could do it. But then whenever we got, we got turned down for the loan.

Speaker 2 So right now there's literally nothing else. We're like,

Speaker 2 there's no end in sight for this.

Speaker 3 Okay.

Speaker 3 Thank you for the information.

Speaker 3 I mean, my heart goes out to you. I know, Ken, you're feeling the same way.
This is terrible. I'm so sorry.
Let's talk about what you've brought to the table here.

Speaker 3 So based on what you just said, that there's really, I mean, there were some options, but we really don't know. Even if she does a surgery, it's only a 70% chance.

Speaker 3 All of that, yeah, you got to sell this car. Because she's saying, oh, but when we're both working, we can afford it.
But we don't know.

Speaker 3 Like, truly, we don't know when you're both going to be working again. And nobody needs that kind of pressure, right? You don't need that kind of pressure.
She doesn't need that kind of pressure.

Speaker 3 So tell me what the car, what you owe in it, and what you can sell it for.

Speaker 2 2023, Hyundai Tucson.

Speaker 2 And we owe about 30,000 for it. And I booked it a couple of days ago.
And I think it books for like 23,000.

Speaker 3 23 or 28?

Speaker 1 Like 23,000, I think.

Speaker 3 Okay, and is that private sale?

Speaker 2 Yes.

Speaker 1 Okay.

Speaker 3 I wish it were better.

Speaker 3 Is there any other debt, any other vehicles, any other thing else that Ken and I should know about?

Speaker 2 No. There's no other, no other debt.
Aside from, like I said, the credit card debt is about $30,000.

Speaker 2 And then she has $100,000 with the student loan debt. The house is completely paid for.

Speaker 3 What's the payment on that Tucson?

Speaker 2 The Tucson's $900.

Speaker 3 Okay. So here, let's go down the line.
Student loans,

Speaker 3 they're private, I'm assuming, based on what you said. So it's not like they're being forbear like everybody else in the save plan right now.

Speaker 3 You've got these student loans. Yeah, you got to sell the car.
Yeah, you've got to, I'd rather you be in $7,000 or $10,000 once you get a little beater than $30,000, right?

Speaker 3 And that's going to make that payment a lot less. So I would be on the phone trying to make that happen.
I know you said your credit's a little sketchy, but let's make that happen.

Speaker 3 A lower payment is going to really help you out right now to try to make ends meet. When you do your budget every month, what's the deficit? What are you at right now?

Speaker 3 What are you, how much are you on red?

Speaker 2 $1,500.

Speaker 3 $1,500. So this is going to help find some of that.
And you're doing an every dollar budget?

Speaker 2 Yeah,

Speaker 2 she does the budget and then I review it with her. But it's not every dollar on the app, no, but we do have it written down.
It is a written paper budget.

Speaker 3 Okay, I want you to get every dollar.

Speaker 3 It's going to help help you a little bit more and it's going to help you guys stay on track because this is also anything that can make life a little bit easier right now is going to help you.

Speaker 3 And I want you to go through with a fine-tooth comb. Where is it that we can skim anything? Out of $4,600 a month, where can we cut back? What's your mortgage or your rent?

Speaker 1 What are you paying?

Speaker 2 We don't have mortgage or rent.

Speaker 1 Okay. The house is paid for.
Great. And

Speaker 2 we paid it off like five years ago.

Speaker 1 Great.

Speaker 3 And do you have young kids, anybody in daycare, anything like that?

Speaker 2 No.

Speaker 3 Okay. So where's this? My question then is: those are the two biggest budget items.
And next to that is food. So

Speaker 3 this money, this $4,600 a month is going somewhere. It's not going to a mortgage, not going to daycare.
You guys need to get on that budget with a fine-tooth comb to figure out where this is.

Speaker 3 Do not do a debt consolidation because, Ken, you and I know it ain't good. Yeah.

Speaker 1 And I would just add to this.

Speaker 1 If I were you, I'd be working as many jobs as I could. We've got to get the cash for this surgery.

Speaker 1 She can't keep living this way.

Speaker 1 This is so serious is the way you described it. If I were you, I would be doing everything in my power, everything that Jade said.

Speaker 1 Plus, I would be making extra money to come up with half the money that insurance, I guess, has promised that they would pay. Yeah, that's right.

Speaker 1 To get the surgery for your wife, I mean, you just can't keep this up. That's my concern.
So, hang on the line.

Speaker 1 We're going to give you every dollar so you don't have to spend any extra money right now. Hang on the line.

Speaker 1 Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John.
Why don't people want to take care of their family?

Speaker 1 They think they're going to die or something. Well, I used to be one of those guys, I didn't even think about it.

Speaker 1 And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.
That's a gut punch.

Speaker 1 And oh, you're telling me, and for for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. They don't know what to do next.
Me too.

Speaker 1 I mean, you're going to have a crisis here. And, you know, you got two options while you're sitting and talking to a young widow.

Speaker 1 She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly.
These are the two options.

Speaker 1 And take care of your dadgum family, man.

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Speaker 1 Michelle is joining us here in Nashville, our neck of the woods. Michelle, how can we help today?

Speaker 2 Hi, thank you so much for taking my call.

Speaker 2 I'm calling because my father-in-law has been in the hospital in California for about three months, off and on in a critical condition.

Speaker 2 My husband just came back from visiting him and was given financial and medical power of of attorney for him.

Speaker 2 And we have found after pulling his credit report because he's an avoidant personality that he is in an extreme amount of debt and he's behind on his house payments and we have no idea where to start to help him.

Speaker 1 Okay. Does he have any income coming in?

Speaker 2 He does not. We have applied for the state of

Speaker 2 California, but nothing has been done yet. He was on FMLA leave, but there is nothing, there is no income currently coming in for him.

Speaker 3 Okay. Was this sudden? Like what some he was working up until the point he was in the hospital? Is that what happened?

Speaker 2 Correct. So he ended up with a broken foot and he was walking on it because of complications of diabetes, had no idea it was broken, and got

Speaker 2 septic. He has had three subsequent amputations and his progress just keeps getting back and back and back, like backwalk.

Speaker 1 I'm sorry.

Speaker 3 I'm sorry.

Speaker 3 Okay.

Speaker 1 how much debt what's the debt picture

Speaker 2 so the debt picture is he has credit cards a vehicle and a home loan his home he is worth about eight hundred and fifty thousand dollars on a good day he currently owes about two hundred and eighty two thousand dollars on that His credit card debt oh he owes about twenty six thousand on his car and then the remainder out of that sixty five and a half thousand is credit cards how much is the car worth?

Speaker 2 I would say it may be worth probably about

Speaker 2 $18,000.

Speaker 3 I'm sorry, did you say $65,500 on credit cards?

Speaker 2 Between the car and credit cards.

Speaker 3 Got it. Thank God.

Speaker 1 So

Speaker 1 what is the medical situation? Is he now going to be

Speaker 1 going into some type of care facility? Is that the next step? I'm assuming he cannot live on his own, correct?

Speaker 2 So his situation is that he

Speaker 2 they're trying to discharge him to a care facility based off of his medical insurance. He only has 30 days left at a skilled rehab facility.
We have put in an application for Medi-Cal,

Speaker 2 the state health insurance, to try to get him some options. There's no current rehab facility to send him to.

Speaker 2 Ideally, what my husband and I would like is to get him out here to Tennessee and maybe take the cell of his house and get into a home together to be able to care for him as he goes through the physical therapy and learning how to walk again and,

Speaker 1 you know, all of his medical treatments that he's going to need.

Speaker 2 But right now, he cannot be moved from California.

Speaker 1 And how old is he?

Speaker 2 58.

Speaker 1 58. So let me ask a quick question.
Why would you live? Why would you, don't you guys already have a home or are you guys renting? That's the part I'm not sure about is living together with him.

Speaker 1 What's your current living situation?

Speaker 2 We're renting. We're working the baby steps.
We're on step two, baby step two right now. We do have a special needs child.
And so we've got probably about $20,000 left in debt ourselves.

Speaker 2 So the goal was to maybe use the equity from his home sale to go in on a home together that would have enough space for us to be able to take care of him and

Speaker 1 our family. The reason I'm asking all this is

Speaker 1 there's no question that given the situation that you, your husband has power of attorney on all this stuff on his finances, I would absolutely, Jade, sell the house

Speaker 1 his house and clear his debt up.

Speaker 1 I don't know if I like the idea of using some of that. This is where I'm bringing in my partner here.
I have a check in my spirit.

Speaker 3 I got a big old

Speaker 1 check. So

Speaker 1 I'll lead and go down on the diving board and then let her score my dive.

Speaker 1 I like him selling the house and let's clear his debt. He's got plenty of equity to do so.
So he's now debt-free.

Speaker 1 I am not in favor of you all using what's left of that to buy a house together. I think he needs those funds for right now set aside for his ongoing care in some form or fashion.

Speaker 1 So I would, I don't have it all figured out because I think this is a complex situation, but I would hold the money left over after paying off his debt.

Speaker 1 And let's get into a, if we got to get a different rental or something like that. And maybe some of that,

Speaker 1 but

Speaker 1 I got to check in my spirit about buying a house.

Speaker 3 I do too. I don't, you are going to be providing care, but I don't think this is like an opportunity for you guys to get in a home

Speaker 3 because

Speaker 3 I don't, I don't. I mean, there might be something that you guys talk about with him.
I don't know how, is he 100% lucid? Like, he's got a power of attorney, so I'm guessing not.

Speaker 2 He's not making smart choices.

Speaker 2 He's he's been refusing medical care uh documented in his chart but then he's telling us that he hasn't been um same thing he says oh i only have four credit cards then we pull the credit report and then does he have a does he have a will

Speaker 2 there

Speaker 3 he has an outdated will that has his deceased wife on it and he has a trust okay what i'm getting at is if there was something that you guys knew hey when he passes, we're getting, we were to get his house anyway, or we were to get, you know,

Speaker 3 his assets anyway. If you knew that ahead of time, that might make this feel a little bit different.

Speaker 3 But because we don't have that, there's part of me that's like, hey, right now we've got to keep things separate.

Speaker 3 Help him out by, if your husband has power of attorney, help him out by clearing his debt, selling the thing. Yeah, move him when you can.

Speaker 3 And maybe it's just getting him set up in a

Speaker 3 maybe he is staying with you at the rental if you have space. If you don't, maybe it's him being in a little condo and the rest is for his care.
But I think that you've got to be careful here.

Speaker 3 I think you've got to be be careful here and keep your needs completely separate from his needs, if that makes sense.

Speaker 1 Yes.

Speaker 3 I think you're a great person, by the way. I'm not trying to say that you're doing, trying to be shady.

Speaker 1 That's not what I'm saying.

Speaker 1 I just think you need offering.

Speaker 2 The only reason we had thought was him coming to us is because he can't do cleaning. He can't get out of bed on his own.

Speaker 2 And so him living separately, if he falls or something happens, he's not going to be able to care for himself at night.

Speaker 1 I get all the only things that are.

Speaker 3 Is there space in the rental? Is there no space in the rental?

Speaker 2 I mean, not currently. We would have to convert the living room into a downstairs kind of bedroom area for him.

Speaker 1 Would you be willing to do that?

Speaker 1 Here's your options.

Speaker 3 The options are you do that conversion like you're talking about. And depending on the amount, maybe you use some of the sale of the house to cash flow that, right?

Speaker 3 Or the other option is: I don't like the idea of you converting a rental. I don't know what that costs.

Speaker 3 So part of me is like, maybe you move into a rental that has more space and you use a portion of like a small portion only if you need of that money to help float that new rent but mostly the biggest thing is you're going to need that money for his care and so to ken's point we can't be blowing through that um i would take the chunk left over just to be very clear the chunk left over from paying off his debt so you're going to sell his house the proceeds pay off his debt The rest of it goes into a high-yield savings account just so we can see what the future holds.

Speaker 1 I think there's so many unknowns that are out there. I want to be in the strongest possible cash position.

Speaker 1 And it's not your responsibility to do that. You guys are already trying to get out of debt.
I don't want it to slow your momentum. So getting into a house and all the expenses, I agree with Jade.

Speaker 1 I'd get a better rental situation if dad's going to be with us. Cause, see, that's temporary too.
That's right. You don't know what his health situation is.

Speaker 1 God forbid something go worse, but I don't think that's out of the realm of reality right now.

Speaker 1 So the reason, I just want you to know why we're giving that advice.

Speaker 1 This is an onion.

Speaker 1 And right now we want to have as many stable options as possible. That's why we're saying don't buy a house with that money.

Speaker 1 Okay. Does it make sense? We don't want this.
You're already inconvenienced and this can really create hardship on you and your husband. So let's not make it worse is my point.

Speaker 1 By getting into a house.

Speaker 2 We want to maintain the family relationship and not let there be like any kind of divide there as well.

Speaker 1 We really do just want what's best for him in this and I would keep the boundary of not using his leftover money to buy a house for us. I just, I do, I would rent and let's see what the future holds.

Speaker 1 Okay. Yeah.
Stability here, Jade is essentially having as many options as possible. That's right.

Speaker 1 When you have such an unknown, topsy-turvy situation like that where you don't know which way it's going. Yeah.

Speaker 1 I want to get a wide base financially and just kind of hold and just kind of hang on through the storm.

Speaker 1 You're right. You're right.
She taught me that on the Ramsey Cruise. She saved me in a pickleball match.
She saw me. I was all over the place.
She said, get a wide base, Coleman. And I did.

Speaker 3 That's what I do.

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Speaker 1 all right folks how you doing on the baby steps if you're new to us you don't know what the baby steps are

Speaker 1 Well, this is also a good thing for you.

Speaker 1 Head to the show notes and click on the link titled, are you on track with the baby steps and complete the quiz and it's going to let you know uh your progress status and you get a personalized plan on how to start moving through the baby steps this is so important so again the link in our show notes will get you there let's go to ann in phoenix arizona and how can we help

Speaker 2 Yes, I have a question about how much was a percentage I'm currently putting into my retirement. I'm going to be 60 this year.

Speaker 2 My husband is 63, and we currently have 400, we have about 400,000 in our retirement.

Speaker 2 But we also have a special needs young adult child that we know we want to

Speaker 2 plan for. We've just gotten to baby step seven two months ago, so I'm feeling still like I should hold on really tight or can I relax a little bit or where should I go?

Speaker 2 And I'm looking for some guidance.

Speaker 1 Congratulations. First of all, let's not just fly by baby step seven.
How How does that feel?

Speaker 2 It feels amazing, but I have lived until I found you all pretty hopeless about ever retiring.

Speaker 2 So I'm adjusting in my mindset to like, can I take my family on a vacation?

Speaker 1 Well, the answer is yes.

Speaker 2 So I just, and I always worry about the future for my daughter.

Speaker 1 I have a kid,

Speaker 2 my oldest, who has special needs and probably will never live independently.

Speaker 1 Sure. Okay.
Okay. A couple quick things.

Speaker 1 One, I want you to,

Speaker 1 we were on the Ramsey Cruise. We had all these folks from the tribe that

Speaker 1 are baby steps four through seven. And one of the things that we kept coming into, it was funny.
We were talking about it on stage. We saw it in conversations on the boat.

Speaker 1 But a lot of baby step seven folks are still trying to adapt from intensity to intentionality. And you're so, yeah, you resonate with that.
And you're so new at this, right?

Speaker 1 You've been baby step seven for two to three months. So, number one, it's going to take time for your nervous system to adjust because you have been

Speaker 1 right. Yeah.
And so, I'm just calling it out to go, this is normal, okay?

Speaker 1 Okay. It's a function of how intentional you have been with intensity.
Now, we want to begin to downshift from all this intensity and go, here's the good news: we're going to be great.

Speaker 1 Now, we want to be intentional to take care of our daughter. So, give us a snapshot of what you guys have in retirement accounts as of today.

Speaker 2 So as of today, in my 401B,

Speaker 2 I have about $357,000.

Speaker 2 We just sort of discovered,

Speaker 2 you know, it feels shameful, but whatever, Roth IRA. So I've got $47,000 in my Roth 403B

Speaker 2 and

Speaker 2 my Roth IRA, individual Roth IRA for my husband and I.

Speaker 1 Okay. Does he have any or are you just giving us the totals?

Speaker 2 That's the total. So it's all, that's our total.
Our total is about 403.

Speaker 1 How old are you both?

Speaker 2 60 and 63.

Speaker 1 And what's your house worth?

Speaker 1 What's your house worth?

Speaker 2 437.

Speaker 1 Okay. And you're about ready to tell us something else.
Go ahead.

Speaker 2 And I'm the primary income earner. He does caretaking for

Speaker 2 parents and our oldest child.

Speaker 1 What is your income?

Speaker 2 About $250,000.

Speaker 1 All right, that's great news. What in your mind has been the age by which you said, I'm out of here? See you later, folks.

Speaker 2 Well, I thought I would never retire before.

Speaker 1 I got some hope.

Speaker 2 So when I've been looking at it now, if I were to retire in seven years, you know, with that rule of seven, I think based on my calculations, I'd probably end up with about, and my current rate of retirement savings, which is about 19% of my, of our income,

Speaker 2 I think I'd have about 1.4, but I just don't know if that's enough.

Speaker 1 Well, so 1.4, that doesn't include the house, right?

Speaker 2 Not including the house.

Speaker 1 All right. So that gets us at, let's just round up to 1.9.
So we're sniffing 2 mil at that stage. Yeah.

Speaker 3 How much are you contributing monthly?

Speaker 2 Monthly, I'm putting in 90% of my income, I'm sorry, 19% of my income into

Speaker 2 my retirement. So that's my match.

Speaker 1 Okay.

Speaker 3 Do you know the number of that, just so I don't have to do the math right quick?

Speaker 2 Oh, I'm sorry. Yeah, my monthly right now that's going in to Ross 403B is 2,622.

Speaker 1 Good job.

Speaker 2 And then I have going into my match is

Speaker 2 about 1,110.

Speaker 1 Wow. Okay.

Speaker 1 So can we round that up, Jade, to

Speaker 3 Okay, so yeah, we got 3,800. Like, yeah,

Speaker 3 every month going in there.

Speaker 2 Yeah. Okay.

Speaker 1 So what's going on here? Jade has got her trusty calculator out, and she's doing a little investment calculator to run these numbers. What do you got, Jade?

Speaker 3 Okay, yeah. So if you continue to do this, you're pretty close to what you said.

Speaker 3 You're pretty close. I did a really conservative rate of return for the haters, but I think that you're going to actually do better.
So let me just,

Speaker 3 I think you're going to be fine if you keep doing this in the next seven years. I have 1.3 million.
You said 1.4. Great.

Speaker 1 Same thing, right?

Speaker 3 Yeah.

Speaker 3 The question you need to ask yourself, and I think this is what Ken also was getting at, is

Speaker 3 you're thinking about your special needs daughter. You have a paid for home.
So great. that your special needs daughter is going to have a place always to live, right?

Speaker 3 If you pass that along, then for you, if you and your husband can live comfortably off of the interest on this, then you're going to have this wonderful nest egg that is going to continue to grow for her care.

Speaker 3 And so that's kind of the way to think of this is what is it going to cost annually once you and your husband, you know, have beamed up, what's it going to cost you annually for her care?

Speaker 3 And is she able to draw that off of your nest egg without touching it or without, you know, deeply deplinishing it? And I think that

Speaker 2 we also have another child, so they would split whatever we've got. That's the other

Speaker 1 well, the only way to change this is you're making a good salary. The only way to change this in my mind is your husband to get a little bit better paying job.

Speaker 1 I appreciate what he's doing, but if he can make what's his income, I'm guessing it's what less than income.

Speaker 2 So he does part-time real estate, so it varies.

Speaker 2 You know, so it's probably he's doing, you know, maybe six houses a year. It's not a lot.

Speaker 1 But you said caretaking of some sort. What does he make a year? Give me an average, roughly.

Speaker 2 He's probably making $10,000 to $15,000 a year.

Speaker 1 Okay, listen,

Speaker 1 I don't want to be unkind, and this is not unkind, but I'm going to shoot you really straight. Are you okay with that?

Speaker 1 Yeah. Okay.
If I was hanging out with your husband, I'd pull him aside and go, hey, bro, no disrespect, but your wife is seriously crushing it. And you guys have a really unique situation.

Speaker 1 And I'm not judging you at all, but you can make way more than 10 to 15,000, number one, and number two, you should be. Let's just say he listened to me.

Speaker 1 He's like, you're right, Ken, I need to step up. Let's say he got serious about selling real estate and he made $100,000 and all of his money went to juicing this retirement.

Speaker 1 If he does that for another 10 years, that's a million dollars, $100,000 a year. I'm not pulling crazy numbers out of my you-know-what, am I, Ann?

Speaker 2 Yeah, yeah.

Speaker 1 All right. So, this is all possible.
That's the answer. We put an extra million dollars in this situation, Jade.

Speaker 1 Now, now we don't have to worry about our adult child who is going to need special care. Exactly.
I don't know why he's not fired up to do this.

Speaker 1 I'm not judging him, Ann, but I am going to shoot you really straight and go, he should be making way more money, and every nickel of it should be going into Jade's fancy calculator.

Speaker 3 Yeah, and I also want you to get on with one of our Smart Vestor Pros and talk about if it makes sense to convert some of these traditional funds to Roth funds so that when the time comes that they are drawing on this money, they're not paying taxes on it.

Speaker 3 And they're able, do you see what I'm saying? That money can continue to grow tax-free. We want that for them.
We don't want them to have to deal with that as they,

Speaker 3 you know, take your inheritance one day.

Speaker 1 And I'd play

Speaker 2 that conversion process. Right now, everything's tied up in my current employer's plan.
So until I retire from that, I won't be able to convert. But that's my thought is to convert over time.

Speaker 3 Yeah. The sooner you do it, the worse the tax hit.

Speaker 1 You've done a great job. Replay that call for your hubs.
Hopefully, you don't get upset at me.

Speaker 1 I just think.

Speaker 3 You didn't mean any harm, Ken.

Speaker 1 No, no, I just think that that is a massive play right now. If I was in their shoes, that's exactly what I would be doing.
Right.

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Speaker 1 All right, tonight, Jade, Dave Ramsey, Dr. John Deloney back out on the road.
This time, they're in Durham, North Carolina.

Speaker 1 And this is a fun event. They just did the first one in Louisville.
And do you say Louisville or do you say Louisville?

Speaker 3 Look at my face.

Speaker 3 Louisville.

Speaker 1 Oh. Louisville.
Why did I have to look at your face? Louisville.

Speaker 1 What did that have to do?

Speaker 1 Do I look like Louisville? Oh,

Speaker 1 I don't know. I feel like I'm going to get in trouble if I answer.
Louisville. Louisville.

Speaker 1 And then they're in Atlanta on Friday night. So we've got two of these coming up.
This is a great, great event if you feel trapped in the same patterns and your money and your relationships.

Speaker 1 Dave and John are doing a really fun event and coming to Phoenix, May 5th, Fort Worth, May 7th, Kansas City, May 9th.

Speaker 1 Oh, Kansas City sold out according to my notes here. Nice.
And Fort Worth is not far behind. So you better move quick if you're in Fort Worth or the rest of those cities.

Speaker 1 Ramseysolutions.com slash tour. Ramseysolutions.com slash tour.
If you're watching via YouTube or listening via podcast, click the link in the show notes and you can get the tickets there.

Speaker 1 Sarah is up now in Dallas, Texas. Sarah, how can we help today?

Speaker 2 Hey guys, thanks for taking my call.

Speaker 1 You will.

Speaker 2 I have a two-part question, a little bit of background. I was have worked for the last 10 years as a travel nurse and I was making pretty good money, anywhere from like $16,000 to $18,000 per month.

Speaker 2 And I'm a single mom of six and in December, one of my children actually unfortunately tried to hurt themselves.

Speaker 2 And so I gave up traveling and I took a local contract to

Speaker 2 be there to support them. And it came with a huge pay decrease.

Speaker 2 And so suddenly my budget was not very good, very affordable anymore.

Speaker 2 But unfortunately, I had never really managed that money well, even though I was making a lot. I was spending even more.
So I do have poor credit. I have an eviction on my record.

Speaker 2 I have a repossession on my record.

Speaker 2 And so

Speaker 2 when I kind of found Dave and Money Makeover and I sat down with Every Dollar Budget, the clear answer was to move out of our rental because we have a very expensive rental home.

Speaker 2 But as I started looking, nobody would rent to me.

Speaker 2 So the first part of my question is: if you have any suggestions for alternative renting, like rental avenues to kind of get us out of this because that would free up a lot of my budget.

Speaker 2 And then the second part of my question is I've heard Dave say he has a PhD in DUMB and things like that on the show.

Speaker 2 I am am having a really hard time with the shame and the guilt of not being able to provide for my family because I made so many poor decisions.

Speaker 2 And if you guys have any advice on how I kind of jump that hurdle of the emotional weight

Speaker 2 and just feeling so pathetic.

Speaker 1 Well, let me jump in. Let me jump in real quick.
I'm so glad you're sharing that with us.

Speaker 1 But you aren't pathetic, and you are going to have to forgive yourself.

Speaker 1 You know, the kids are doing their thing.

Speaker 1 That's going to all cycle out. I think a lot of this is a tremendous amount of guilt and shame over the kid who's trying to hurt themselves.
I agree. And that's pretty dark.
It's pretty dark stuff.

Speaker 1 And there's no way for you not to personalize your child's pain. There's just no way not to.

Speaker 1 So I don't have any fix with my words. It's impossible to fix, but I do hope you listen to me and you do forgive yourself on the things that maybe you should forgive yourself.

Speaker 1 And then also realize that

Speaker 1 you're not to blame for a lot of this stuff either.

Speaker 1 Blame for the financial decisions, sure.

Speaker 1 But who among us hasn't made dumb financial decisions when we weren't healthy? Exactly. So you're a part of a pretty big tent.
And I hope that helps you with shame.

Speaker 1 Let me move practically real quick to the first thing that came to my mind

Speaker 1 on the rent situation. If you're not involved in a local church, there's a church on every corner in your neck of the woods.
And I would swallow any pride or whatever issues you have with faith.

Speaker 1 And I'd give the people of a good church a chance to help you. And I would go in and I would tell them your story.

Speaker 1 And I would be, if I were in your situation looking for maybe an elderly couple, Jade,

Speaker 1 an older widow who's got some space over a garage. Right now, your kids can adapt to anything, and I know you can adapt to anything and just a safe place.

Speaker 1 She doesn't care about credit score, or they don't care about credit score. But finding something like that, I just believe that when we ask for something like that, we can find it.

Speaker 1 And when you seek, you find. And I would be going that route.
I'm not saying that's the only route.

Speaker 1 I want to bring Jade in, but I did, that just popped into my mind for some reason, to give you a season to get stable.

Speaker 1 Because the fact of the matter is, if your kid's not hurting themselves and you're not having to come back to where you are you could have dug out of this correct yes and and that is the plan I do have a wonderful church family I do want to say that

Speaker 2 but like you said I will swallow my pride and go

Speaker 1 wherever

Speaker 1 no if you've got a church family if you've got a church family I'm saying go to them and say I can't do this alone in this circumstance but once I can get my kid back you know on the rails and all that kind of stuff then you can dig out of this because with your background you can make good money.

Speaker 1 So this is temporary.

Speaker 1 That's the plan.

Speaker 2 We have good church family support and good family support that when he is in a little bit more stable place, other people can step in to be there in that role and I can get back out and make a lot of money quickly.

Speaker 1 Good.

Speaker 3 Yeah,

Speaker 3 this is a temporary situation. That's the good news.
The hard news is it's a very tough temporary situation, right? It doesn't make it any easier.

Speaker 3 I agree with Ken wholeheartedly uh there the people that love you are the people who want to help you and you have to ask yourself if if I if a close friend of mine were in the the same situation you would almost be hurt that they kept it from you right because you want to help and so you have to remember that people have a heart like that um

Speaker 3 yeah i'm with ken i think ken i think you almost basically covered it find a rental that's from a human being not from an you know a corporation or an agency people who can go hey i know you i'm looking at you i see your situation i believe you'll pay me, as opposed to trying to go to apartment complexes or, like I said, ones that are owned by big conglomerations.

Speaker 3 Yeah.

Speaker 1 On the other side of this, have you learned how to budget? Do you have, I know you're familiar with our materials, but how can we bless you today?

Speaker 2 I'm working on learning it. I did, I purchased every dollar premium last month and I'm trying to work on that.

Speaker 2 And

Speaker 2 yes and and more importantly I've learned what the problem was that I just wasn't budgeting yeah that's good and I've really that's hit home to hear all of you but especially Dave and many makeover that I'm just not even watching my money so it's leaving and I don't know where it went did you say you have six kids I do that's my thought how old are you I'm I will be 40 next week okay And I don't normally ask a lady her age, but there was a reason that I asked.

Speaker 1 I want to leave you with this um i've already gave you the pep talk on shame and forgiveness but i want to remind you that i don't think there's a tougher organism on the planet than a single mom

Speaker 1 and you have already made it a long way at the age of 40 with six kids you've already proven to everybody who knows you that you're tough as nails am i right

Speaker 1 yeah yeah so hear me

Speaker 1 you can do this

Speaker 1 I love that you were so honest and vulnerable with this to say, hey, I know what the problem is, Jaden Ken. I just didn't budget.
Well, guess what? That's something that's forgivable.

Speaker 1 And you can learn that. And now you were just trying to hang on to survive and you didn't know how to budget.
Now you know how to budget. You're getting better at it.

Speaker 1 You're going to keep getting better at it. And when you get through this storm, you're going to come out on the other side.

Speaker 1 And I'm not saying you won't have tough days ahead, but you won't have to go backwards financially. There's no no way I'm betting against you, Sarah.
No chance.

Speaker 1 You got me?

Speaker 1 Yes. I mean,

Speaker 1 there's nothing you wouldn't do for those kids. Am I right?

Speaker 2 No, nothing.

Speaker 1 All right. So shoulders back, head up, forgive yourself.
No shame in your game, mama. And we got six kids that we got to take care of, one who specifically needs you.

Speaker 1 So you got to take care of you during this season. Get safe, get stable.
You'll come out on the other side of this and you're going to be fine.

Speaker 1 And your kids are going to talk about how great a mama you were, too. So hold on to that, and we're here for you.
Call back at any time. You got me? Yep.
Thank you. All right, head up, shoulders back.

Speaker 1 Great hour, Jade.

Speaker 3 Ken Coleman, well done.

Speaker 1 A little tear jerker there at the end. It's tough stuff, but community matters for us.
It does. Can you do it all?

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Speaker 1 This is the Ramsey Show, where America hangs out to have a conversation about their money, their profession, and their relationships. Triple 8-825-5225 is the phone number to jump in.

Speaker 1 We'd love to hear from you today, alongside the incomparable, fabulous Jay Borshaw and Ken Coleman. Triple 888-825-5225 is the phone number.
Tina starts us off at Tucson, Arizona.

Speaker 1 Tina from Tucson, how can we help?

Speaker 2 Hi, thanks for taking my call. The purpose for my call today is just to see if there's other options besides filing bankruptcy.

Speaker 2 I've been told at this point that pretty much that is kind of my only option. I've heard of Dave Ramsey.
I don't really follow the show.

Speaker 2 And I was listening to worship music and ironically, a segment came up and I happened to click on it and decided, you know what, maybe I should ask somebody else and see what I'm saying.

Speaker 1 It feels like this might be a little bit of a divine appointment. Worship music to one of our clips.
And now here you are. And I can tell you there are more options.
But hit us with your story.

Speaker 1 Tell us your story and why.

Speaker 1 Yeah, go for it.

Speaker 2 No, so I just

Speaker 2 I've been working in the mortgage sector for a very long period of my life. And

Speaker 2 in 2020,

Speaker 2 ironically, when the market was sort of going down because everybody wasn't able to work we were super busy and slammed with loans and so at that time we were making a lot of money but ever since then and the market sort of turned again my company has done pay decreases and obviously we're no longer making bonus or commission so that's really affected my financials and at this point like I said I've consulted with a few different attorneys and they're all kind of on the same boat that really the only option at this point is to file bankruptcy.

Speaker 1 Why? Again, I want to know your situation. Give us the details of your debt.

Speaker 2 Oh, okay. So you want like amounts of

Speaker 1 dire.

Speaker 2 Sure.

Speaker 2 So I make about 80 to 85 a year.

Speaker 2 And before, like pre-COVID, it was almost like $250,000.

Speaker 1 So it's a huge, sure, huge difference in pay structure.

Speaker 2 My mortgage is about $305,000 right now, and I have about $160,000 in

Speaker 2 unsecured loans meaning not tied to anything.

Speaker 1 16 separate loans.

Speaker 3 Can you break it down?

Speaker 1 Yeah.

Speaker 2 Sure. One of them is like $83,000 and the other is the difference of that $160,000.

Speaker 2 To what?

Speaker 1 And then the credit cards amount to about $50,000.

Speaker 3 Before you speed through it, like we need to get a handle on it. So you said you've got 83,000 of just personal loans.
Is that what you're saying?

Speaker 2 No, so it's 83,000 is one of the personal loans. The other is the balance that makes up the 160.

Speaker 3 Okay. And it's all credit cards, you're saying?

Speaker 2 No, that's just unsecured debt. That is not credit card.

Speaker 1 And what I'm trying to ask you is,

Speaker 1 who do you owe this to? You owe $83,000 to who?

Speaker 2 So $83,000 is to a credit union, and then the balance of the $160,000 between the $83,000 and that difference is to another credit union.

Speaker 1 Okay, now we're getting somewhere. What we're trying to do is, in order for us to help you, we got to know who we owe the money to.
So we've got two credit unions in the amount of $160,000.

Speaker 3 Yeah, $83 and 77. And then didn't you say that there is credit cards?

Speaker 2 Yeah, so there's an additional 57 in credit cards.

Speaker 1 Okay.

Speaker 3 And is there anything else?

Speaker 2 No, I actually sold all my autos. I've liquidated anything that was of value to try to pay up the difference.
At this point, I'm even selling personal items just to get by like month to month.

Speaker 1 So I have nothing at this point. That's what's left.

Speaker 3 Okay. So is it just you? Are you single? Do you have kids?

Speaker 2 Yeah, I'm single and I have two kids.

Speaker 3 Single with two kids. Okay.
Now let me, I'm just trying to get a background on this. I'm trying to see where your head's at.
So before

Speaker 3 your income got cut, you're making 250. How long have you been in this state of lower income?

Speaker 2 This has been going on for now, I would say, coming up to three years.

Speaker 3 Three years, okay.

Speaker 2 And I've been managing, trying to pay my payments, and obviously I'm not late or anything, but I'm at the point where

Speaker 2 because my employer is planning on lowering my income again in the upcoming months, I've already been told that just based on business needs.

Speaker 2 I'm going to be at a point where I will no longer be able to make those payments.

Speaker 1 What will your income be?

Speaker 2 We're supposed to drop another $4 an hour, so we're paid hourly.

Speaker 1 So, sorry, Jade, I'm getting you some numbers here. So, you're going to go from 85 to what, roughly?

Speaker 2 Well, if you take $4 times

Speaker 2 $41 an hour.

Speaker 1 Okay, I didn't know we were doing the math on the spot. Okay, I'll do that math while Jade's helping me out.

Speaker 3 Ken, you do that math, and then we're going to to come back to ken to help you with the career side because you're going to have to switch jobs that's true um what i'm trying to understand is did all of this come as a result of your 85 000 in pay or was this a result of before kind of living without a plan because i want to know are you able to meet your does that make sense are we able to meet our bills now and you're just realizing holy crap i made a mess or is this mess a result of trying to live on an income that's just not sustainable does that make sense

Speaker 2 It might be a bunch of everything, to be honest with you.

Speaker 1 Okay.

Speaker 2 I mean, I'm not a victim in this situation. I'm not sure if the money I'm the one who spent it.

Speaker 3 Yeah, you're not a victim. What you do next matters, though, big time.
And right now, the answer to the solution is lowering your expenses and increasing your income. That's always the solution.

Speaker 3 So while we have a little bit of time, Ken, why don't you hit the career thing first? Because I actually think that's the most important

Speaker 3 conversation.

Speaker 1 You can no longer allow this just to happen to you.

Speaker 1 You've let a lot of this happen to you. And I'm not beating up on on you.
I just want you to know we're going to have to change our mindset

Speaker 1 because that's really what's happened over the last three years. Well, this happened.
This happened. This happened.

Speaker 1 And, you know, look, again, we're not judging you. We are where we are.
We know where you are.

Speaker 1 The pay cut is going to be about $75 to $7,800. I did some quick math on that, all gross numbers.
So not a huge amount.

Speaker 1 But when you start playing that out, it's about $600 a month and you need every penny of that $600 a month. So we cannot take a pay cut.
You just can't.

Speaker 1 The idea of taking the pay cut and then going into bankruptcy is not a viable option. So I want to get right back to the core question at the beginning of the call.
That is a horrible option for you.

Speaker 1 What we need to do is take the skill set you have, plus the experience you have had in that industry that is transferable outside of your industry. It really is.

Speaker 1 You need a better paying job and soon.

Speaker 1 And that's what the play is. And then you dig out of this.

Speaker 1 You do not have to file bankruptcy and further ruin your life.

Speaker 1 You can dig out of this. We've helped so many people do this.
And I know you're new to us, but Jake, I mean, we can do this. We can walk you through all this and get you out of this.

Speaker 1 But I'm going to give it back to her real quickly, but you have got to get very serious. I'm going to give you two things at the end of this call.
Okay. I'm going to give you my book.

Speaker 1 Find the work you're wired to do. It's got an assessment with it.
Take it. It's a 45-minute read that'll coach you through your results so that you can see what's out there for you.
Okay.

Speaker 1 So I want you to have that.

Speaker 1 And I want to give you the book, The Proximity Principle, as well, so you can start really making great connections because that's where your opportunity is going to come from.

Speaker 1 But you got to make that move fast.

Speaker 3 That's right. That's right.
Hey, are you investing right now? Are you investing any money out of your check?

Speaker 2 I was, I don't know what you mean by investing like I was tithing to the church.

Speaker 1 No, 401k. No, 401k retirement.
Were you doing that?

Speaker 2 No, I don't have any savings.

Speaker 1 Okay. I don't have anything at this point.
Okay, great.

Speaker 3 And so what are you taking home every single month?

Speaker 2 Oh, you mean like after taxes?

Speaker 3 Yep. What are you taking home as your payment?

Speaker 2 It's like $2,300 every two weeks.

Speaker 1 Okay.

Speaker 3 So I want you to have an every dollar budget. We're going to make sure Christian picks up and gives you an every dollar budget because you need to see where every single dollar is going.

Speaker 3 And once you see that and you find out if your mortgage payment is more than 25% of your take-home pay, if it is, you need to be looking at that as well.

Speaker 3 Because unless you really change this and turn it around soon, because my guess is your mortgage is eating up all your money because you had your mortgage back when you were making $250,000.

Speaker 3 That's where I think the problem is in all of this.

Speaker 1 So it could be time to sell.

Speaker 3 It likely is. Uh-oh.

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Speaker 1 Tyler is up next in Knoxville, Tennessee. Tyler, how can we help?

Speaker 2 Thank you for taking my call.

Speaker 1 You bet.

Speaker 2 So I'm currently 22 years old, and I'm struggling with the fact that my parents are kind of financially abusing me. I've been following the Ramsey baby steps.

Speaker 2 I'm currently reading the Total Money Makeover book, and I got my refund from school about in May, and it was close to about $4,000, exactly $3,999.

Speaker 2 And I used that money to pay off my Clarina debt, my car payment, and as well a little bit of my credit card payment. And they weren't really happy about that.

Speaker 2 They were just absolutely furious about me, saying that that was their money and

Speaker 2 about how the hard work they did to put me out here and everything like that. And my head's just spinning about it.

Speaker 1 And I'm sure what to do. Hold on, hold on, hold on.
The money was from, it was a tax refund for money that you did, like W-2 money.

Speaker 1 No,

Speaker 1 refund school refund correct yeah but they paid did they pay for the school school refund or did you pay for it

Speaker 3 so they were helping me through financial aid we took out a loan and as well um just through whatever else uh federal work study as well so was this let me let me clarify because the key word in student loans is refund and refund sometimes means you took out a loan and the loan was too much for what school actually costs and so they gave you the money back in cash but it is still loaned money does that make sense so was this money that was still loaned money or was this actual cash that you had from doing work study and you were given that as payment clarify that for me i believe it was a little bowl from the work study and from the loan okay and whose name is on the loan mom's and dad's or yours who's the coo the signer on the loan

Speaker 2 um i believe it's mom and then me i believe i'm the co-signer on it. Okay.

Speaker 3 So what where I'm seeing here is there's a lack of clarity on what's going on.

Speaker 3 So we do need to have that because you need to know if you receive $4,000, if it's student loan money, you should know that because you have the right to be like, oh my gosh, I don't want to be on the hook for that.

Speaker 3 I'm not going to use debt to pay off debt, right? So understanding that's important, but it's spilled milk at this point.

Speaker 3 I can understand if it was loan money, if your mom was like, wait a minute, you took this loan money that we're both on the hook for to do this thing without consulting both of us because we're both on this loan.

Speaker 3 So I can see that. So I want to put that out there, but you used a really big word earlier when you said, oh, mom and dad are abusing me with the money.

Speaker 1 I see no evidence of that.

Speaker 3 Show us that. Let us hear about that.

Speaker 2 So the reason why I say that is because one, when I got that money, my first instinct was obviously to put it towards my debt. And my my both my parents are both spenders.

Speaker 2 My dad dad works in the middle field. My mom doesn't work anymore.
So I'm currently in, I'm in another state from Texas. I'm from Texas originally.

Speaker 2 I'm in another state working as well as in school, trying to pay all this stuff and all the things I can do. And they're helping me financially, but it's always about money, money, money.

Speaker 2 My mom just bought a brand new Mercedes. My dad spends money constantly on his new truck.

Speaker 1 Okay.

Speaker 1 What's that got to do with you?

Speaker 3 But what's that got to do with you?

Speaker 2 It's just a money struggle. They've always been haggling me for money as well as asking when I ask for money if I need it, they just never give it to me or they're 50-50 on it.

Speaker 1 Okay, so that's not abuse.

Speaker 3 That's not I don't think it's abuse. Like it what I'm hearing, Ken, is and correct me if I'm wrong, Tyler.
What I'm hearing is your parents are spenders.

Speaker 3 It seems like they always have the money when it's time for something for them, but when it's something for you, it's a big deal. And it also sounds like they've hit you up for money.

Speaker 3 Maybe you had your job in high school and they were like, hey, let me, can you spot me a 20? That kind of thing. And they never paid you back.
Is that the type of thing?

Speaker 2 But yes, but it was like recently they've been wanting me to get a truck and they want me to help pay a down payment and I've been telling them that I don't want to do that.

Speaker 1 Okay, then you don't have to do it.

Speaker 3 You don't have to do it. Here's the thing.
Here's the thing. Your parents, you're 22 now.
Your parents can make suggestions.

Speaker 3 They can even try to like strong arm you to do things their way, but you don't have to, my guy. Like you can say, I'm just not going to do that.

Speaker 3 And that might be them being pushing some boundaries, kind of being, you know, a little disrespectful, but I wouldn't go the line of abuse. Would you, Ken? I don't know that I would go to that line.

Speaker 1 You're being very nice. I've heard enough.
Listen, Tyler, there's two things. Okay.
Number one, I actually get your instinct. And I, your instinct to take that money and put it on debt.

Speaker 1 Great instinct.

Speaker 3 It's a good instinct, wrong move, like right idea.

Speaker 1 I'm getting there. I'm getting there.
I'm getting there.

Speaker 1 I'm saying it was the right instinct, but you should have communicated with the parents because they're involved in this financially.

Speaker 1 You can do both and also be frustrated with them for all the stuff you're frustrated with them about and how they handle money. I see all of this together, but the reality is.

Speaker 1 is that you and Jade's right. You're 22 now.
So now we begin the separation and now we create a little bit better boundaries. You're right.
You're right. And she's right.

Speaker 1 You should have communicated much better on this deal. What's done is done.

Speaker 1 But let me be very clear. You need to stop saying they're financially abusing you because this is not anywhere close to it.

Speaker 1 It's just disrespect.

Speaker 1 It's dramatic. And by the way, words matter.
So when we think that our mom and dad are abusing us, and then we tell somebody

Speaker 1 and we tell two hosts on a radio big giant show.

Speaker 1 Then we've now become,

Speaker 1 we've come to believe something that's just simply not true. And then that colors how you handle things.

Speaker 1 They already handle money in a way that will continue to create tension for you going forward. That's clear.
And by the way, good on you, young man, to go, I don't want to live that way. Yes.

Speaker 1 So I like the direction you're headed. All that to say, stop with this nonsense, stop thinking it, stop saying it, stop feeling as though your parents are abusing you.
They're not.

Speaker 1 And you just need to start to do things differently.

Speaker 3 You do. And honestly, how much are the student loans?

Speaker 2 So as of this moment, I checked last night. It was roughly about 40,000.
But going into next year, I will be a junior. So it's going to be tacked on roughly maybe about 80,000.

Speaker 2 I transferred to the University of Tennessee.

Speaker 3 Here's what I need for you. Here's what, here's my, we took some time talking about mom and dad.

Speaker 3 I want to talk about Tyler for a minute because you were talking about mom and dad's bad money decisions, bad money habits.

Speaker 3 Tyler, you are following in those footsteps right now because you are taking on debt and you're going to an out-of-state school and you're doing all this thing, just racking up money.

Speaker 3 And I know that you're young, but you got to stop doing that because you're going to come out of this thing with $80,000 of debt.

Speaker 3 And what's going to make it even more of a headache is you're going to be tied to mama. And so mama's going to be breathing down your neck every month talking about where's the payment?

Speaker 3 You're messing up my credit. Da, da, da, da, da.
And that is going to jack you and her.

Speaker 1 That's great.

Speaker 3 If I were in your shoes, I would be thinking long and hard about, can I, do I need this this degree? Do I need to be out of state for this degree?

Speaker 3 Can I do it in my home state where I have in-state tuition? And can I do it someplace where I'm paying, going at the speed of cash, I'm getting a job, I'm doing work study?

Speaker 3 Because $80,000 is a lot of money, especially when it's tied up with mom and dad.

Speaker 1 This is a great point because they overextend themselves all the time. And that's why that tension around money is always there.
They have a scarcity mindset. That's what you described.

Speaker 1 And so tied to that, it's going to make your life miserable. So, we prefer you not to have any more student loans, but if you're going to do student loans, do it without mom and dad attack.

Speaker 3 At the very least, and do it in states so that it at the very least, listen, don't hear me say get student loans, but do you see what I'm saying?

Speaker 2 Yeah, yes, I understand what both y'all are saying, and I've done the math as well.

Speaker 2 Even when I originally did transfer, if I was looking back at other schools, and some schools were the exact same price, the same major that I wanted compared to here.

Speaker 2 And we never ultimately came to that sports management.

Speaker 1 So,

Speaker 1 what say you can?

Speaker 1 Well, there's two ways to skin this one.

Speaker 1 You know, there are a lot of people that would argue with me and debate me on you need a degree in sports management.

Speaker 1 And that's probably statistically true, not knowing that major super well.

Speaker 1 However, I know it's possible to get any of those jobs without a degree because I can point to example after example. You got to get in.
You got to get in.

Speaker 1 You got to sweep floors. You got to be a janitor.
And then you work your way up to doing some type of analyst work.

Speaker 1 So it's possible to get into sports management without a degree, but I can tell you that my partner's right today. Nobody cares where you get your degree from.
They sure don't.

Speaker 1 So listen, I know what UT costs for in-state students. I can't imagine what it costs for out-of-state students.

Speaker 1 Tyler.

Speaker 1 There's a better way.

Speaker 3 Tyler, no one has ever asked me where I went to school.

Speaker 1 I'm not even allowed to tell anybody anymore. She made me stop talking about it.

Speaker 3 No one's ever even asked me what I got my degree in.

Speaker 1 Ever. What'd you you get your degree in?

Speaker 3 Music, commercial music. Well, that makes sense.
Concentration on vocal performance.

Speaker 1 And now you're a best-selling author.

Speaker 1 What a waste. What a waste of time and money.

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Speaker 1 What if one night could change your future? You don't have to stay trapped in the same old patterns that have left you stuck in your money, relationships, and your life.

Speaker 1 You can break the cycles that have kept you from moving forward. Dr.
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Speaker 1 Join us in Louisville, Durham, Atlanta, Phoenix, Fort Worth, or Kansas City. It's down to the wire, so grab your tickets at ramseysolutions.com slash tour.
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Speaker 1 All right, our question of the day is brought to you by YReFi. If you've got defaulted student loans that don't let you gain momentum, we get it, no judgment, but

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Speaker 3 All righty, in honor of Financial Literacy Month, as the cool kids say, Finlet, today's question comes from Tyler at the McDonald County High School.

Speaker 3 He says, how much of my check should I set aside for spending, saving, and giving? I love this because he already understands those are the three things that you can do with money. Give, save, spend.

Speaker 3 And honestly, Tyler, you could do the in equal portions at this point.

Speaker 3 Giving at, you know, obviously with giving, we, if you're a Christian person, we kind of have the 10% as the model. That's kind of like the tithe thing.

Speaker 3 And that's a great place to start.

Speaker 3 If you wanted to give beyond that, though, and if you, or if you saw other things that you wanted to do, you could.

Speaker 3 Saving, that's also very important. Spending.
So at this point, I'm like the ratios mean less to me.

Speaker 3 It's more about the fact that you're doing all three because truly, like certain seasons might call for certain things.

Speaker 3 Like around Christmas time, you might go, yeah, I'm going to split this evenly because I want to, you know, give to my church and I want to buy gifts for my mom and brothers and sisters and all of that.

Speaker 3 So yeah, that's looking like a 30% deal. And then I'm saving, you know, the other 30 and spending the other bit, 33 technically.

Speaker 3 But I think it's one of those things, as long as you're doing all three and you're shifting those ratios as the year goes on to make sense.

Speaker 3 Obviously, if you were saving up to buy a new car, you might say, okay, for this season, I'm, you know, I'm giving 10%

Speaker 3 and I'm saving 50 and the other 40 is going for spending, right?

Speaker 3 So you have the ability to do that based on what's going on, based on if you have any debt or not, based on if you're trying to save up for something specific. So that's kind of how that works.

Speaker 3 What say you can collect?

Speaker 1 I totally agree. I think when you're a teenager, you're probably going to go heavier on saving.

Speaker 1 So an adult may be 80, 10, 10, meaning 80 spend because they've got a budget, they've got a household, they got to take care of 10% tithe that would be under giving, if you will, to the church.

Speaker 1 10% savings. I'm just making that up.
I'm not saying that's our rule. But if you look at the 80, 10, 10, 80, 20, so for you as a young person, you don't have a bunch of expenses.

Speaker 1 So maybe you're only spending 20%.

Speaker 1 Yeah. And then the rest is broken down out of the rest rest of the 80%, as Jade was saying.
I loved your advice on the seasonal, you know.

Speaker 1 And by the way, that teaches a young person how to actually budget by adjusting the priorities. Really good stuff.

Speaker 1 By the way, if you would like to enter our teacher appreciation giveaway, we want to love on teachers. We love doing this every year at Ramsey Solutions.

Speaker 1 Go to ramseysolutions.com/slash teacher, ramseysolutions.com/slash teacher. And I would guess that you could nominate another teacher as well.

Speaker 1 That feels right.

Speaker 3 That seems correct. Yeah.

Speaker 1 So

Speaker 1 what a fun way to

Speaker 1 nominate some teachers.

Speaker 1 Ramseysolutions.com/slash teacher. It's always teacher.
There you go. There are things.
Yeah, I'm going to let that go. Just keep on going there.

Speaker 1 George Michael. Oh, very good.
I was getting ready to ask because I'm not good with the lyrics. Like the show, is there a game show about the lyrics?

Speaker 3 Yeah, don't forget the lyrics. Wayne Brady.

Speaker 1 Come on. You won't.
Shout out to Wayne Brady. If you were to put me on that show, I'd be the worst all-time contestant.

Speaker 3 Oh, that is the one you would show.

Speaker 3 I applied to be on that game show.

Speaker 1 Oh, well, America wants to see that. Yeah.
They didn't take me. Me, on the other hand, wouldn't get one thing right.
It'd be the most embarrassing thing ever.

Speaker 3 Well, there's no clue. There was Don't Forget the Lyrics with Wayne Brady back in the day, and then there was a new one with Jamie Foxx and his daughter.
Remember?

Speaker 1 Oh, yeah. I can't remember what that one was called.

Speaker 1 There you go. James would be very good at the lyrics.
He's a music connoisseur.

Speaker 3 Don't let James fool you. Yeah.

Speaker 3 Code of Glow in stores today.

Speaker 1 Is that his album? Yes. Are we promoting his album? I just did.
Well, I'd like to do more. What is it called? Code of Glow.
Code Coda.

Speaker 3 Coda. Like when you go back and play together.

Speaker 1 Like the Coda Return. C-O-D-A, correct.
Code of Glow, wherever you can buy music.

Speaker 3 Yeah, get it. It's, it's, I'm not supposed to be doing this.
It's very good.

Speaker 3 James knows. People send me stuff all the time, and I'm like, yeah, it's good.
Like, I, I, but this is really good.

Speaker 1 Is it an instrumental?

Speaker 3 No, it's him doing all his things,

Speaker 1 playing everything. This is very exciting.
I apologize for not knowing about this, and I will download it today. I'll introduce you to it at the break.
Yeah. Oh, very exciting.
All right.

Speaker 1 Let's go to Kim in Detroit. Kim, how can we help?

Speaker 1 Hi, how are you? Well, we're having a blast. What are you doing?

Speaker 2 I think I have a good problem to present to you.

Speaker 1 It's about time somebody gave us a good problem. Yes.
A lot of bad problems today. What's going on, Kim? Tell us this good problem.

Speaker 2 Yeah, so I'm in baby step six.

Speaker 1 Okay.

Speaker 2 and I just got a substantial inheritance, and I just want to be intentional with it. So just looking for some advice.

Speaker 1 What is the amount?

Speaker 2 $200,000. Okay.

Speaker 1 All right. And what was leading to this inheritance? What happened?

Speaker 2 Sadly, my grandma passed away just before Christmas.

Speaker 1 Oh, I'm so sorry. I didn't want to move past that.
So sorry about that.

Speaker 1 What a tremendous legacy for grandma, huh?

Speaker 2 Absolutely.

Speaker 1 And it's put a lot of pressure on me to do the same for my kids and their future kids okay all right so so you called us so what i'd love to do is between jade and i we'll try to help you spend that 200 000 how's that sound sounds great all right so baby step six all right so what do we got left in baby step six

Speaker 2 So we just moved into our house like four years ago. So we still have the leftover of the mortgage, which is $190,000.

Speaker 1 Oh,

Speaker 1 goodness.

Speaker 3 Okay.

Speaker 2 But let me say we don't have the full $200,000 to our disposable disposal right now because the first thing I did was I paid off our HELOC and I paid off a window installment loan.

Speaker 1 So what's left?

Speaker 2 Yeah, so what's left from there is $136,000, but then I immediately took $40,000 of that and put it in a high-yield savings for our emergency fund.

Speaker 1 Okay.

Speaker 3 Okay, so now you're at.

Speaker 2 We have about 90,000, 95.

Speaker 1 Okay.

Speaker 3 So you got 95 to spend. Hey, you did the right thing.
We would have, because we would have told you that. We would have said, hey, let's walk through the baby steps with this.

Speaker 3 If you're in debt, let's pay off the debt. Let's build up the three to six months of emergency fund.
And you did that. Is there any other debt other than the mortgage we should know about?

Speaker 1 That's still there?

Speaker 1 Okay. So all those moves got you to baby step six.

Speaker 1 Exactly. Great.
Great. Okay.
Well, I know what Jay's going to say, so I don't need to say it.

Speaker 3 I mean, technically at this point, unless there's something else that you really believe that your grandma would love to see you do if you always talked about going to ireland and you want to honor that and go to ireland you know what i'm saying that sort of thing then yeah the reason the other reasonable thing to do would be to put this towards the mortgage and hear me say i am not saying that you have to put every dime of this towards the mortgage i do think that there's something about an inheritance like this that you should be able to enjoy plus to your point now you're in baby step six so it's not like this all of my money must go to my mortgage it's about intentionality and if you take this 95 and say, I'm going to be intentional in some of this, a portion of this will go towards the mortgage.

Speaker 3 Maybe a portion of this will go towards, I don't know, that thing that grandma always wanted to see me do.

Speaker 3 You have that ability. I'm not going to be like super,

Speaker 1 you know, strict robotic with that. How old are the kids?

Speaker 2 There's three and five. Actually, one's in the back seat.
So apologies if there's background noise.

Speaker 1 Oh, we love background noise. No problem there at all.
So we have a three-year-old and a five-year-old.

Speaker 1 Yep.

Speaker 1 Yeah.

Speaker 2 And if you're going to ask about a 529, we're already contributing to that.

Speaker 3 She said, I beat you to it, Kim.

Speaker 1 Kim, you literally took the words right out of my mouth. These people in the booth have never seen me speechless before.
So way to go.

Speaker 1 So you're already doing that.

Speaker 1 Yeah, I'm with you, Jay. That was all I had is a couple of follow-up questions on what are some options to do with the 95 because you're so close on the house.

Speaker 1 But yeah, I just think

Speaker 1 do what's right, what you think is right with the 95.

Speaker 3 What do you think is right? Well,

Speaker 2 my gut was to pay off the mortgage or as much as we can with what's left over. But in five years, roughly, I think we're going to need two new vehicles.

Speaker 2 So I don't want to take out a loan to pay for those. So I almost want to keep some of it reserved for that.

Speaker 1 What's your income?

Speaker 2 Because our mortgage is only a 3% interest.

Speaker 2 Income is about $140,000 with me and my husband together.

Speaker 3 I mean, I'm confident that you could probably save over five years to pay for those vehicles in cash, but whatever you run the numbers out and do what you think is best on that. But yeah,

Speaker 1 not a bad idea. Congratulations.

Speaker 1 Yeah, congratulations.

Speaker 1 You're honoring your grandmother, and I think that's really, really, really sweet and fun to see the discipline.

Speaker 1 Last little thing I'd say, by leaving that much cash sitting around, there's a chance for you to get tempted to use it for something else.

Speaker 3 Yeah, the Caribbean always calls.

Speaker 1 Especially me. Especially me.

Speaker 1 All right, let's cut to the chase.

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Speaker 1 Find a local Ramsey Trusted Real Estate Pro for free at ramseysolutions.com/slash agent. That's ramseysolutions.com/slash agent, or click the link in the description on our show notes.

Speaker 1 If you are listening or watching via YouTube or podcast. Nolins is the way I used to say it.
New Orleans for the rest of you is where we go. Jeremy is there.
Jeremy, how can we help?

Speaker 2 Hey, Ken. Hey, Jade.
I have a not fun problem.

Speaker 2 I sold a vintage guitar and found out 11 days later that the credit card that was used to buy it was stolen.

Speaker 1 Oof.

Speaker 1 So what's the rest of the story?

Speaker 2 So it's an expensive guitar. It's a $10,000 guitar.

Speaker 2 It was purchased overnight,

Speaker 2 which is not normal. So I'm a YouTuber.
I buy and sell guitars and I document the process. So this guitar sold.

Speaker 2 And then I called the customer first thing in the morning and we talked for about 20 minutes. So this person knew vintage guitars.

Speaker 2 They said, well, you know, it's going for my son. And so I felt okay that this was a real person and a real transaction.
Sure.

Speaker 2 I checked with my credit card processor. They said, this is legit.
The money's on your way to the bank. So I held the guitar for a day until the transfer happened to my bank.

Speaker 2 And then I felt comfortable to ship the guitar. So I shipped the guitar.

Speaker 2 But the first red flag was that the customer never told me that. the guitar got to them okay.

Speaker 2 And then, so for that was on a Thursday.

Speaker 2 On the Sunday morning i got an email from the credit card company saying hey this is potentially suspicious and then i heard nothing else until 11 days later when they said this was a stolen card and we're going to take the money back uh tomorrow morning oh man so i

Speaker 2 so yes so i called the person that bought the guitar they've never answered they never responded of course they haven't

Speaker 1 um so you got

Speaker 2 well so i was able to stop the money from leaving

Speaker 2 So my bank was able to put a stop payment on the ACH coming back out. So I have the money, but I don't have the guitar.
And now the credit card company has said that I have 90 days to pay them back.

Speaker 3 Yeah.

Speaker 2 Which I think that's unreasonable.

Speaker 3 Ooh, interesting. This is an interesting quandary because you're not the one that committed the fraud, and yet you're the one kind of paying the price for it.

Speaker 3 Right.

Speaker 3 Here's where I'm thinking. Like on the one hand, if I were the person with the stolen credit card and somebody used my credit card to buy a $10,000 card, I'd be like, I want my $10,000 back.

Speaker 3 And I would dispute it and I'd get my $10,000 back.

Speaker 2 Right. So they have gotten their money back.

Speaker 1 They've gotten their money back, but you've lost your card back.

Speaker 2 I found the person who had the card on LinkedIn and they confirmed.

Speaker 2 that they got the money back and they but they also said they reported it the same day and did you reported all your stuff too right multiple times and i've lost the disputes it's been two different rounds of disputes uh and they say that i

Speaker 1 i did not pass and i have to give the money back wow this is i'm sitting here just really processing this me too because it it feels like there's some evidence here that the credit card company didn't do their job they were alerted that this was stolen or that it was misplaced or whatever and they still allowed allowed the transaction to go through.

Speaker 1 Right. And because of their failure, I'm just talking this out here, because of their failure and their process,

Speaker 1 you got ripped off.

Speaker 2 Right.

Speaker 1 And you can prove this?

Speaker 1 I can. You can get it.

Speaker 2 I have all the receipts for those things, the communication with them, the screenshots of the card being

Speaker 2 the process or that the money coming to my bank.

Speaker 1 Yeah, but what about, can you get an affidavit or a signed statement from the person on LinkedIn that said we actually reported it? We can prove it, blah, blah, blah, blah, blah.

Speaker 1 On the day they called?

Speaker 2 Yeah, I bet I could. He's been very responsive.

Speaker 1 I would go that route. And you know what I would do is after I got that, I'd go back to the credit card company and go, okay,

Speaker 1 let me walk you through where my head's at.

Speaker 1 Right. I don't think that you should be allowed to ask me for the $10,000 or demand it or take it.
Here's why.

Speaker 1 You all screwed up. I have a signed statement from this person who said, and they can prove it.

Speaker 1 They got a cell phone call at, you know, such and such a date at such and such a time to you all placing a hold or a cancel on the card.

Speaker 1 You know, you just walk through this and go, look, I mean, I'm not going to go down without a fight.

Speaker 3 Yeah, the merchant is liable for this.

Speaker 1 Yeah. And I'm not going to be out 10 grand because I'm out 10 grand of this guitar.
The guitar is gone. Not

Speaker 1 my problem. It's It's your problem on the 10 grand.
The 10 grand is mine.

Speaker 1 I would really fight this.

Speaker 3 I would too. You can report it to the FTC.
You might just consult with a lawyer and do one of those free money.

Speaker 1 Here's the deal.

Speaker 1 Jade, I'm going to make a statement. You tell me if you think I'm wrong because sometimes I can be Cranky Ken, and James and my wife, Stacey, always call this out.

Speaker 1 So I feel like I'm starting to get into it.

Speaker 3 I like Cranky Ken. Let's get into it.

Speaker 1 James, this is Cranky Ken on this, on his behalf. Cranky Ken believes that $10,000 is a drop in the bucket for a big old credit card company.

Speaker 1 And if I become a real thorn in their side and promise to fight them to the bitter end and I become more of a nuisance than they want to deal with, I think they walk away.

Speaker 1 But I think you've got to send a message. I'm not paying you a nickel.
Here's why. I got all the proof.
If we got to go to court, we'll go to court. But

Speaker 1 you're going to pay my attorney's fees. I just think that they will go away.
I really do.

Speaker 1 If you've got all this proof and you could show it to them, and anybody with a brain can see this trail, that's what I would do. Jay, is that too?

Speaker 3 Yeah, I'm not sending the money back. I'm not sending it back to them.

Speaker 3 I believe with what Ken said. I think if you put your foot down and stand on business, as Ken would say,

Speaker 1 where's my hat? I didn't bring my hat to the studio today. I got a standing on business hat.
And if there was ever a time to wear it, this is the call.

Speaker 1 I just don't, I don't think they want to mess with this and spend all this time and money on 10 grand. They They just write it off.

Speaker 1 Jeremy, what kind of guitar was it? Oh, do you hear James?

Speaker 2 That's a good question. It was a 1969 Martin D28.
So it was the last year of a Brazilian Rosewood Backinsides acoustic guitar.

Speaker 1 That's brutal, man. Look at James.

Speaker 3 He can tell. He shed a tear.
I saw it.

Speaker 1 He's getting a little dusty-eyed in there. That's a nice guitar.
Micro boys know guitars.

Speaker 2 They do.

Speaker 1 They do. Well, listen.

Speaker 1 Hold the line on this one, man. I like our strategy here.
I think this is a game of poker. Yeah.

Speaker 2 And I'd push all my chips in the middle because you got the cards yep oh i really appreciate it yeah and thankfully having having done the ramsey program for 10 years and being completely out of debt and you know it it makes it to where this is a lot of money but it does not break us way to go jeremy

Speaker 1 yeah gosh that's been the piece through all of this good for you that's great that's fabulous thank you all yeah sorry you got got but hold your you learned something though right did you learn something

Speaker 1 absolutely yeah

Speaker 1 very interesting all right my man well you'll get the last word what is your favorite guitar that you don't own but you'd love to have oh i would love to have a pre-war martin om 42

Speaker 2 okay a very pearly very pretty guitar who played it it's like eric clapton has played one uh i mean that that's the holy grail those are a hundred thousand dollars a hundred and twenty five thousand dollars wow yeah james has one right beside his desk uh

Speaker 1 yeah

Speaker 1 All right. I like that.
I like to ask people those kind of questions because you knew he had an answer.

Speaker 3 Oh, yeah. And somebody listening, that was like gold for them.
For me, I was like, what was it?

Speaker 1 I don't even know what it is. He said pre-war, and the rest of it was Charlie Brown's teacher for me.
I didn't hear anything.

Speaker 1 I understood Eric Clapper. But I did appreciate that he said it was pearly.
Yeah.

Speaker 1 I like a good aesthetic guitar.

Speaker 1 Yeah, yeah.

Speaker 1 A little pearly. All right, James, what's your go-to guitar? Money's no object?

Speaker 1 What guitar are you getting?

Speaker 1 I'm more of an electric player, but acoustic-wise, Gibson J45 is what I would get.

Speaker 3 Who plays that?

Speaker 1 Oh, a bunch of like, it's kind of a folk guitar, a lot of bluegrass players and stuff like that. And what's a mint condition, one of those going to set you back?

Speaker 1 Oh, I have no idea. The vintage guitar market, you can spend $20,000.
I mean, they're crazy. Wow.
Wow.

Speaker 3 You learn something new every day, Ken?

Speaker 1 I think you and I need to start a YouTube channel selling guitars. I don't know anything about them, but I can sell them.

Speaker 3 Okay, well, I'll get got because I don't don't know.

Speaker 1 This is the Ramsey Show.

Speaker 1 No matter what you want to do with your money.

Speaker 1 Hey, what are you still doing here? You know, the rest of the show is happening on the Ramsey Network app, right? So you got to jump over there to continue watching. You can download it for free.

Speaker 1 Just go to your app store, type in Ramsey Network. It's completely free.
And I'll drop a link in in the show notes to make it easy for you. So if you're watching on the app, you're in luck.

Speaker 1 But if you're watching anywhere else, this show is over for you. So jump onto the app and let the fun continue.

Speaker 1 All right.

Speaker 1 Go on now.

Speaker 1 Don't make it weird.

Speaker 1 Okay. I got nowhere to go.
So you need to go.

Speaker 1 Okay. Bye-bye now.

Speaker 1 All right. This is getting weird over there, guys.
What do we do?