Make Money Choices Today That You Won’t Regret Tomorrow

This is the Ramsey Show, where you come, America, to get coaching, to win in your life, win in your money, win in your profession, and win in your relationships. 888-825-5225 is the phone number to jump in.
Alongside the incomparable, the fabulous, and almost happy birthday gal tomorrow. She will be the birthday gal, Jade Warshaw.
I'm Ken Coleman, just happy to sit next to her. That's how goes folks just that's it it's i'm i'm easy just happy to be here sunday morning i enjoy being with you friend we always have a good time so jade will coach you up on what to do with your money i'm going to coach you up on how to make more money how about that pretty simple let's go to the atl atl atl georgia christie's there christie can we help? Yes.
I got a divorce a few years ago. Not really by choice.
But I cannot seem to find a job. Before I stayed at home with my kids, I had a great job.
I have a master's degree. And now that I'm trying to look for a job full time, nobody will really really hire me.
And I'm currently doing the small business that I was doing when I was married, so it's more of a part-time income. But my house is paid off, my car is paid off, I have a rental house that's paid off, so I've got that and I've got some cash, but I'm not really sure what to do

with it because I don't know what my salary is going to be in the future. Okay, well, let's get, we'll get to the cash.
I want Jade to weigh in on that and help you out, but let's just talk about this reality that you're facing. You're saying, I can't get hired.
Are you not getting interviews or are you getting interviews and you're not winning the interview? What's going on? Well, I started with looking in the health care business section that I was in, and because it had been over 20 years, I just could not get any kind of interviews. I've had all kinds of people look at my resume and say it's really good.
I mean, vice presidents, all types of people I've had look at it. Um, so then I tried to, you know, change it up and do more marketing stuff, which is kind of what I've been doing, I guess, part-time.
Um, and I just can't seem to find anything. Well, no, again, here, I'm looking for specifics.
When you say you can't get interviews and that's across the board. I have had a few interviews, um, very many.
Like I'm just not getting any calls for interviews, so I'm not sure. What's your process? What is your process for getting these interviews? What are you doing? I'm going online and filling out.
I have different resumes tailored to different types of jobs, and then I'm sending them in. And I've been looking locally, but also I can't really move right now.
I still have one in high school. So I'm kind of a little bit.
I don't live in a big area. Okay.
So based on what you did in the past in the healthcare industry, what did you do, by the way? Oh, I was in finance. Okay.
So on the the number side okay so based on that um that skill set is still there you largely it's not like you forgot how to crunch numbers and be detailed and all the things and be analytical all the things that it takes to win so uh you've had a few interviews but based on all of that that's what people are telling you in the health care space that your resume is up to speed and ready to go? Yeah, I mean, I have had a few people in healthcare, but mostly it's just been other fields. Anyone that I knew that could look at it, I would let them look at it, but everybody said they thought it was a great resume.
All right, two things. One, I want to make sure, Christian, let's get her my Ken Coleman resume templates.
They're very, very different, and they're designed to actually call attention to what I teach in my bestselling book, The Proximity Principle.

So you've gotten a few interviews, but you have tried to get far more.

So your percentage right now is, based on what I'm hearing, it's pretty low.

So how do we increase the percentage of actual interviews?

The way we do that is through relationships. So your percentage right now is, based on what I'm hearing, it's pretty low.
So how do we increase the percentage of actual interviews?

The way we do that is through relationships. It's not going online.

And I'm not criticizing you.

I'm encouraging you.

You are essentially playing the job lottery when you go through what is now heavy AI format when you go onto a website.

To give you an idea, there are tens and tens and tens of thousands of people that apply at Ramsey Solutions every year. They're coming through our website, but I'm going to tell you how you get hired here is how you get hired everywhere else.
You make a connection. That's right.
And so I'm going to give you my book, The Proximity Principle, to encourage you. But more importantly than reading the book, what's really important is that you begin to say, okay, as I'm moving forward today, as I'm talking to Ken and Jay today, going forward, when I see a job that I'm interested in, I'm not going to fill out the online resume submission thing.
What I'm going to do is, is I'm going to look at that job at company XYZ and I'm going to go, okay, do I know anybody that works at company XYZ? If the answer is yes, we reach out to them and say, hey, do you know somebody over in this department because this is where I'm looking? Okay, and we walk through that. And the goal here is to get them to personally walk into Jade's office and go, Jade, I know you're hiring for this position.
I want to tell you about my friend, Christy. I've known Christy for this long.
This is her story, her background. I've got a physical copy of her resume in this nice little manila file folder, if anybody uses those anymore.
Or they put the resume in front of Jade and say, Jade, I'm not going to bug you. I'm not going to rash you.
I'm not going to bend your arm. But I think you should seriously consider my friend, Christy.
Now, it's not a guarantee that Jade, who's helping me role play in this situation, is going to go, done, she's hired. Thank you, Ken.
I've been waiting for you to walk in and tell me who I should hire. That's not going to happen.
But Christy, you get how that does move you out of the pile, yes? Yes. The digital pile.
Okay. Now, if you don't know anybody at Company XYZ, you've got to ask, do I know somebody who knows somebody? And now we're playing this old game of 7 Degrees from Kevin Bacon.
But I'm telling you, as old-fashioned and as simple as that sounds, that is the way to get noticed. And it's going to take some time.
And you're going to have to keep turning over rocks, turning over rocks, turning over rocks. And eventually you're going to get into the right situation where the door opens for you.
Now I want to transition to Jade here because she's got some money she doesn't know what to do with. And I wanted you to help her out with that while she's in this season of part-time pay.
All right. Well, let's talk about the money because when you, what you pretty good.
Paid off house, paid off car, paid off rental. What else is going on? I mean, I have some extra money.
Like when we sold the marital house, I wanted to do something with it. So I bought a rental.
I have a great tenant, pays on time, like it's going great. The problem is I don't have enough to buy another full house.
So I'd have to get, of course, mortgage and the rates, you know, are not good. And I don't want, if I do that, I don't want it to be too close to what I'd have to pay, you know, with insurance and taxes and such.
The other house is for you? I'm just, no, no, another rental. My house is paid off.
Why are you in a rush to where you're like, i'd have to get a mortgage and i'd have to why do you feel rushed to do that um because i won't be getting any help from my ex-husband soon like i'm you know i'm kind of getting near there and i don't make a lot with my job or my so you're you're thinking this is going to be good income like instant income yes i'm looking Okay. Well, it's not going to be too, too much because you're going to have a mortgage on the house.
I would not do that. I would not go into debt to pick up another rental property.
I think you could probably go make more doing something else with less risk or no risk attached to it, just in the form of a job. If I were you, the money that you have left, I would probably sit it in a high-yield savings account and continue to save for it.
If the horizon is more than five years, I suppose you could throw it in an index fund and let it grow a little bit faster. But other than that, nothing's on fire here.
Yeah, I agree. I mean, Ken gave you the- You just gotta be patient.
Ken give you what you need to get the job you need. And I would, by the way, be getting solid hourly work if that's what you gotta do to make up the difference here.
But hang on the line. Christian, let's get her a copy of The Proximity Principle.
Let me tell you something. The right people will get you in the right place.
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? They think they're not going to die or something? Well, I used to be one of those guys. I didn't even think about it.
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. 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. You're going to have a crisis here.
You know, you got two options while you're sitting and talking to a young widow. 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 right. These are the two options.
It's saying I love you to your family. Term life insurance.
Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years.
They're the only people I trust. Go to Zander.com or call 800-356-4282.
Welcome back to the Ramsey Show. Alongside Jade Warshaw, I'm Ken Coleman.
We're so excited that you're with us. Well, it's that time of year.
I can't believe how fast the calendar is coming at me. And before you know it, you're going to have to pay those taxes.
And you need to make sure that you've got a pro, knows how to navigate maybe some of the complexities, or just making sure that you are not paying too much. All of those things that are associated with taxes, you just don't want to try to do it yourself unless you really know what you're doing.
That's why we want you to think about a tax pro. Go to RamseySolutions.com slash tax pro to find CPAs and enrolled agents who have been vetted by our Ramsey team.
And I was just emailing back and forth with my local tax pro, and I always tell him, I gave you some love today on the show because I sleep better because I know he's taking care of business. I know that's right.
You know what I mean? I do not want to get on the wrong side of the IRS. I know that's right.
Take care of that business, Ramsey. I don't want to do it.
I hate taxes, Ken. So do I.
I'm not going to get distracted. Sometimes I hear the word taxes and I go into a rant.
We're going to go to Kevin instead. Okay.
Kevin is in Charlotte, North Carolina. Kevin, how can we help today? Hi guys.
Thanks for taking my call. This fall, my wife and I will be coming into a significant amount of money.
It'll be like probably a million after taxes. Wow.
What's going on? And, and so I want to be smart about it. Um, my, um, my wife and I kind of disagree about this.
So she, she wants to move, uh, there's an area of our city that, um, she really wants to move into. It's incredibly expensive.
I know what you're talking about if you're in Charlotte, I know. Yeah.
Yeah. So, so doesn't have very many kids, and our oldest has no one his age.
So that's a big portion of why we want to move. How old is he? We owe about 182 on our house.
Kevin, Kevin, Kevin. Kevin, you're going so fast.
We've got a couple questions for you. I'm sorry.
No, no. You're doing great.
How old is your child? My oldest is 11. Okay, so you've got 11 years old.
And then what is creating this windfall? What's the 1 million coming from? My wife, she's a rock star. And so she's moving a book of business to a different institution.
And that's one Okay. So this is, so this is considered income.
This is not an inheritance. That's why I asked that.
I was curious. Wow.
That's a big deal. So tell me more about the numbers.
You want to move. You gave me the reasons why.
I don't know how good those reasons are, but I digress. Tell me the numbers so we can see if this makes sense.
Okay. So we owe about $182 on our house.
We bought it for $265. What's it worth? It's now probably worth about $700 on the low end, I would say.
Moons, okay. It does need a renovation.
We bought it when we had nothing. It was kind of an up-and-coming neighborhood, and it has just exploded.
So our mortgage right now is about $1,700. I could rent it as is probably for about $2,700.
I wouldn't do that. Keep rolling.
Okay. So, and basically that's kind of what I want to know is I kind of want to keep the house because I think it would be a great rental.
I also just love the house. I love the neighborhood.

If it was paid off, I wouldn't necessarily disagree with that if you were also paying for your next house in cash. Yeah.
So so then that's so the next house, the houses in this neighborhood go for like one point five. Okay.

So, you know, we could rent it, we could sell it.

If we rent it, we would need to do some renovations like kitchen, bathroom, our current house. Should we take the million and put it all towards the other home? Should we take 100 or two and put it towards renovations for this property and put 800 on the other home? Yeah, I don't think you can have your cake and eat it too on this.
I think that there's a really clear path forward, which would be if you've got, you're going to have $1 million. The house you own is worth about $500, a little less once like fees and everything are accounted for.
And the house you want is $1.5. That's the money right there.
So without looking at the other factors, because I have to ask you more questions, but let's just say, hey, I want a house that's 1.5 million. Selling your current house gets you the 1.5 million to pay cash for it.
I wouldn't do a situation where I do a little bit on this house, rent it while it still has a mortgage and then put a little on the next house and have a mortgage there. I feel like there's a way for you to do this really clean and come out on top.
The only other way would be to take the 182 and pay that off and then buy a less expensive second house. And then you could do the two things at one time.
Does that make sense? Yeah. From a math perspective makes sense, yeah.
Yeah, but let me tell you why I don't think it makes sense and why I agree with Jade. Wait a minute.
What's the other perspective other than math? We're talking about money. That's right.
I know, I know. Well, his wife, he wants to stay.
So Kevin wants to stay where he is. The wife wants the nice upgrade of the neighborhood.
That's true. Listen.
That's true, that's true. I know.
So let me throw this out. Okay.
As to why I like Jade's idea, and I want to give you real numbers, Kevin. Okay.
But before you do, we have to ask a couple of key questions to even see, does my idea work? Because we don't know. Do you guys have debt? Do you have...
Tell us about your debt. Tell us about your income.
Tell us more. Okay.
So, um, so I, we, I do, I do have a car, uh, so we have about 20,000 left on a car. I'm going to, I'll pay that tomorrow.
I'll pay it off tomorrow. Okay.
So that's, that's done. After, after I pay the 20,000 left on my car, our emergency fund will be down to about 27,000.
Um, it, it should be about 115115,000. For six months? For six months, yeah.
Dang. Okay.
Yeah, they're crushing it. Love it.
What's the income? Our income is currently about $350,000. Let's go.
Okay, good. So here's the deal, all right? I've heard everything I need to hear, Jade.
Yeah, me too. Kevin, you don't need to be a landlord.

And I just don't think it makes any sense.

Here's why, okay?

You only are talking about right now,

if you owe $1,700 a month, you're paying for it on mortgage.

You said it was about $2,700 that you would get in rent.

That's $1,000 a month.

That is a whopping $1,000 a month.

That's on the low end.

Kevin, don't fight me on this one. Don't fight me on this one.
That's a whopping $12,000 a year. Let's up it a little bit.
You're going to make $15,000 a year gross on renting this house. Yes or no? Gross.
All right. Yeah.
Now I know you're talking about putting money in it to renovate it, just to rent it. It's just burning cash.
I would sell it, pay off the debt that you have left, and like Jade said, take the rest of it and put it to the down payment with the million dollars and buy a sweet house in a sweet neighborhood cash because you're not making much money. Even if you pay it off.
Jade gave you a second scenario. You pay off the 182, Now you're in it.
You're still only clearing about 25 to 30 grand a year. And I'm being generous because that's gross.
That's not including rental costs, maintenance, dude, it is not all it's cracked up to be. Okay.
We talked earlier about money and the math part of it. And you are right.
There's more to money than math. It might

not weigh as heavily, but is this like the house that you had your children in? Is this the house, like this clearly has some sentimental value. It feels like it's more about that than the real estate side.
There's certainly sentimental value. I mean, if I'm paying $1,700, dollars, if I'm paying $1,700 a month for this house, you know, and just also looking at trends of, you know, kids moving back in with their parents and everything, like I could probably in 10 or 15 years, I could probably, you know, afford for my son to live here temporarily, you know, to get his life set up whenever he graduates from college or my other two kids, you know, and it could just be sort of the house that we have that lets the kids roll through.
I also think it's a great investment like this, this area that we're in now is just exploding and has become very popular. And so I feel like if we were to sell right now, we'd be leaving money on the table because then just going up in value.
So, so, so much. Why then tell me this.
I now I'm sensing something else. It's like we've got this million dollars.
It's going to be burning a hole in our pocket. We've got to do something with it.
What would what would it look like to just say, hey, let's let's sit on this for a minute, because in any other scenario, whenever somebody comes into a large amount of money like that, we tell them to wait chill out for a minute get used to the idea his wife wants it that's the challenge and i know i think you're moving too fast she she she wants to move into this i mean our our life is in this other neighborhood all of our friends are in the other neighborhood don't matter all of our kids friends are in but you don't feel right about it if you don't feel right about it don't do it he doesn't feel right this is't do it. He doesn't feel right.
This is a therapy session. I mean it.
They're at an impasse though. They are both on different ends of the spectrum.
And boy, oh boy, I've been married long enough to know how that turns out. This is the Ramsey Show.
You spent years trying to get everything just right for your family. Now you need an easy way to make sure your important financial documents are as organized as the rest of your house.
Well, good news. Knockbox, that's N-O-K box, as in next of kin box, is a complete system that helps you be sure that you leave happy memories, not a mess, when you pass away.
Knockbox is a simple way to organize important paper and digital documents,

IDs, tax returns, insurance policies, estate plans, accounts,

and other personal history in one manageable place.

Your family will feel your love in every detail you take care of.

So start taking care of them at knockbox.com slash Ramsey. A well-organized legacy is a gift to your family.
That's nokbox.com slash Ramsey. The Ramsey show continues.
I'm Ken Coleman, Jade Warshaw with you as well. 888-825-5225.
Let's go to Erin in Augusta, Georgia. Erin, how can we help? Yes, so my husband and I have been married for about four, five years this year, and my daughter is 11, and we have a difference of opinion on what we should spend on her.
We get along great, we communicate great. But when it comes to this, we cannot agree.
And I would just like some unbiased opinion. It's everything from she needs something from school to summer camps.
I feel like she should be able to go to summer camp and not sit in front of a tablet all summer when he thinks those are a little ridiculous because they are so expensive, and that we should not really spend anything extra outside of what our child support is to spend anything on her. What do you mean? Hold on a second.
What do you mean child support? So I get child support from her dad every month, obviously. Okay, gotcha.
But that's the only money that I should use for anything school-related. $300 a month.
And so your husband is going outside of medical and groceries and just keeping this child alive. Anything outside of the basics has to come out of the 300 a month from your ex yes sir interesting how what's your combined incomes 150 000 okay uh how often does this happen yeah like is this a weekly or monthly or is this just in some of the bigger things like you described, like summer camp? No.
It's everything.

Why do you think he's scrutinizing it so much um because she she's she is a brat she's 11 she got to has a little bit of an attitude they don't get along do they get along get along? No, not at all. Got you.
Her biological dad buys her everything she asks for every single time. Okay, so she's spoiled.
Yes. Is she spoiled or does she just get what she needs? No, she's spoiled when it comes to her dad okay so um okay there's a lot going on here I kind of wish Dr.
John was here there's a lot going on here because on the one hand it's like as a parent I don't say to my son um you're acting you're acting a type of way right now and so because of that I'm not gonna I I'm not gonna make sure you have the things you need for school or i'm not gonna put you in summer camp like that's not my that feels retaliatory and so i don't feel like that's the spirit that we should be making our boundaries out of that the spirit that we make our boundaries out of is our budget and what makes what's a logical use of money for a child right that's the spirit that we use to do that right um i'm curious how old was she when you guys got married six was he this way from day one yes okay that's what i'm digging very much i don't want to spend money on anything so okay and so what i was here's let me tell you why i asked that question i'm trying to figure out if this is because she's a brat and he resents her because she's also not his biological daughter these are all reasonable things that a human being could be struggling with and i say that by, by the way, Erin, not from judgment, but a sense of understanding. But the fact that you said

he was this way day one tells me this is more his scarcity mindset about money. Rachel Cruz wrote a

book, Know Yourself, Know Your Money, a few years ago, and it was a genius book, in my opinion.

And I think he's got, from his childhood, so I would say there's two E's. It's our experience and our environment.
So his environment growing up shapes his view of money, and then his experience with money up to this point shapes his view of money. So since he was that way day one, sure he could have still had some resentment, but it would have been very small just in her position as not his biological daughter.
I think it's more that he's a scarcity mindset guy with money. He's scared to death.
It's hoard, hoard. The resource is not a hoarder.
But does he do that in other areas is my question. Is he a tightwad in other categories, or is it just as it relates to your daughter both he is a tight wad but he will spend things it's like if i wanted something sure i could have it but he grew up if he wanted something he had to work for it so that's exactly okay so i think he also resents your ex and how he spends so lavishly on her.
And I do too. You do too.
So you know what he's doing? He's correcting. He's course correcting whether he realizes it or not.
Right. All right, so.
But I, at the same time, feel like I should be able to buy things for her and not feel any kind of way about it. I agree.
I'm not saying going overboard. So it's you guys deciding on what's a normal amount and what's considered overboard.
Yeah, this is a, I think this is a therapy session or a four because I think you need a, here's what I believe. I really believe that you two need to get with a marriage therapist and it's a safe place.
What's great is you guys are not in crisis. You told us you guys get along on everything else.
So this should not be too painful, but it might be difficult to get to a middle ground. And I think you need a, I mean, appreciate you calling us.
We're not marriage therapists, but I think getting a objective licensed marriage marriage therapist who can get you two in the room together and we find middle ground on this because I, hearing what I hear, Jade, I'm in the middle. I think he's probably way too tight.
Yes. But I think you also need to come his way, not in giving into his demands, but understanding maybe where he's coming from.
I think this is solved with a lot of understanding. And the daughter needs to understand it because she feels it and probably doesn't know what that is, right? Well, that's a difficult one.
She feels going over to dad's house and it's like, I get what I want. Then she feels going over to your house and it's like, do these people hate me? It's nothing.
Right. Right.
I've told him I don't tell him every time she asks for something because I do say no a lot but all he hears is when I'm in agreeance and she's like all she does is ask for stuff and I'm like well she's 11 yeah yeah I mean they're gonna ask and you can say no but I mean the example you gave about going to summer camp You know, it depends on what summer camp. It depends on how Yeah.
I mean, they're going to ask and you can say no, but I mean, the example you gave about going to summer camp, you know, it depends on what summer camp. It depends on how much.
I mean, there's a lot of ways that can go. Jade, that's where the budget comes in.
Yeah. That's why I said this has to be guided by the budget, right? It's not just a free for all on any side.
We don't just stop it because we just feel like we're going to stop it we also don't spend whatever we want so it's you guys looking at your budget and going okay like what's a reasonable amount to spend here um well and i've asked him that i'm like give me a number and he was like five hundred dollars i'm like that spends one camp so you got three months i get one camp and she's gonna sit in front of her phone the other well. Well, now that part, let's go to the next extreme because just because she doesn't go to camp doesn't mean she has to sit in front.
Where I come from, we went outside and we had to play on our own and we played basketball. Don't get me started.
We'd play with a stick and a box. Okay, make it happen.
I agree. The caveat is we work full time.
So she's with her dad all summer who lets her do whatever she wants. Being on the phone is what it happens.
Well, but again, to Jade's point, I think Jade's locked in on something here, Erin. I'm changing my opinion a little bit.
I thought the man giving you 500 bucks for a summer, that's plenty of money to spend on her, if that's what I'm hearing. And I think you have to adjust your life and her lifestyle.
Like, great, you work. So come up with a better plan than she's just at her dad's all the time getting spoiled.
So make a fix to that. But throwing more money at it doesn't solve all these issues.
It just doesn't. You could send her to camp all the time.
You've still got to come back to, I think, therapy and a budget. And I think this guy is probably a little bit more reasonable than he sounds.
I think so. But he needs a good reason why.
Yeah. Yes.
I think he does, but my reasoning isn't good enough. And I think we argue so bad about it, we just avoid it at this point.
Yeah, that's the therapy part of it. I think therapy will change this in such a positive way.
I'm hopeful. I really believe this.
If you guys submit to this process and go in and go, okay, we're going to allow ourselves to be open to this process and meet in the middle, I think you guys can solve this. I do too.
It's complex given the relationship with the divorce and the dad and all this stuff. That's tough, but you guys can figure it out.
This is The Ramsey Show. I hate to admit this, but I don't always eat right.
I know I need to eat more fruits and veggies, but sometimes I just have to pound some chips because they taste so good. That's why I love my field of greens.
It helps me eat healthy when I don't have much time. And each fruit and vegetable in field of greens was doctor-selected for a specific health benefit.
Heart, lungs, kidney, metabolism, even healthy weight. And folks, I ain't getting any younger.
It's super easy to mix with water.

And here is the great part of it.

I thought it might taste like grass, but it tastes great.

And only Field of Greens makes this promise.

Your doctor will notice your improved health or your money back.

So go to fieldofgreens.com slash Ramsey for 20% off your first order.

That's fieldofgreens.com slash Ramsey to save 20% on your first order. Welcome back to the Ramsey Show alongside Jade Warshaw.
I'm Ken Coleman. Thrilled to have you with us.
888-825-5225. 888-825-5225 is the phone number.
Our Ramsey Show question of the day is brought to you by YReFi. YReFi refinances defaulted private student loans, which are different than federal student loans.
YReFi refinances your defaulted private student loan and builds a custom loan based on your ability to pay. So kick your private student loan debt out of your life by going to YReFi.com slash Ramsey.
That's the letter Y, R-E-F-Y dot com slash Ramsey. May not be available in all states.
All righty then. Today's question comes from Olivia in Mississippi.
She says, last week I was approached by a friend who recently became a multi-level marketing representative. She asked me to join her team and said that many money experts recommended their company as a side hustle to get out of debt.
Not this money expert. She said that she had been skeptical when she first started, but the checks were clearing and they weren't doing anything illegal.
They emphasize that the business is not about recruiting people, but doing so leads to earning more money. Is this going to cost me more money than I would be making? Or does that depend on me and how wisely I use this business? She's asking us like we're the gurus of this multi-level marketing business.
I would just steer clear of it all together if I were you in your shoes. I mean, can I just, okay, let me confess something.
I have fallen victim to this like back in the day. I did.
Yeah, I just graduated. Let me tell you the quick story.
I just graduated college. I was working in the mall and a guy came in to my store in a nice suit.
And I thought I was helping him sell, selling him a suit. And he was like, you know, you're a sharp young lady.
He kept calling me a sharp young lady. And then he said, you know, I'm looking for people just like you to work in my business.
And I was like, you know, I'm in college. I'm like, okay, I can make some money.
He starts telling me, you can make six figures a year. And I'm like, really? Like I was falling for a hook, line and sinker.
Ended up going to lunch with him, with my Sam, who was my fiance at the time. And we still didn't understand it was multi-level marketing at the time and he's like yeah you know you know all you have to do and then and here's the thing when he showed up at lunch he showed up in a really nice mercedes and i was like this guy's making me he's got all the whatever he's doing right then he starts talking about energy drinks and i'm like energy drinks and i realized that's what i'd be selling is energy drinks that's the product well it was the one product he decided to highlight then he says man let me tell you about my boss he is killing it he takes us over to his boss's house that he described his boss is like living in a mansion boss is living in like a normal nice house and you still and you still got sucked in you listen i bought the energy drinks i can't even remember what they're called i couldn't sell one dadgum it was energy drinks paper towels he was and his his shtick was i mean everybody needs paper towels everybody needs i've heard that before toilet paper was the one that i heard toilet paper yeah yeah and i'm like i didn't sell one dadgum how much money did you have to front i I think it was like 150 or something like that.
It wasn't a whole lot. Yeah.
Yeah. I mean, listen, I'm with you.
I just think this whole thing just sounds like a house of cards and you just shouldn't invest your time into this. Yeah, I wouldn't.
I wouldn't. I mean, the truth is, yeah, I guess there are people who are making money doing it.
Oh, first of all, there are people who crush it. Make no mistake.

Yeah, I mean, I'm not saying there's not.

But just the way the tone of the question and everything else,

it just doesn't sound like it's the right thing for you.

You've got to be really focused.

And by the way, let's be very clear,

all of those models are based on recruiting people.

That's right, they are.

So I don't like the dishonesty of saying it's not about that.

Yeah.

Pass, hard pass.

By the way, I like to buy my toilet paper from a store. I do too.
Not from somebody dropping it off in a bag. You know what I mean? That was always the thing for me.
My parents got into that for a while. I was like, we got all this toilet paper at our house and gum and all the things.
Energy drinks. You know what I'm talking about? It's like, what are we doing here? Oh, gosh.
Oh, that's good. All right, let's get back to the phones.
Marie is joining us in South Bend, Indiana. Marie, how can we help? Hello.
So I'm wondering how my husband and I should prepare for planning to pay for college for two children under two without overfunding a 529 plan and if we should potentially also look at other investment options to help set them up outside of the 529 plan. Yeah okay so you're on baby step five? We're on like four five six yes.
Okay great so you're you're currently putting away the 15 for your retirement and then on top of that how much are you able to kind of put into these 529s every month right now probably just like a couple hundred dollars um the big thing is that my husband actually works at a university who will pay half of whatever their tuition is to go anywhere else. That's awesome.
That's great. Okay.
Which makes most state schools and even some like smaller private universities like very cheap or completely free. Yeah.
How old are your kids? That's what we're trying to figure out. How old are they? The oldest.
Yeah, the oldest is two. So that's the big thing of like, things can change.
He has no intentions of leaving. But if he does, then we do lose that benefit.
That's true. I mean, yeah, this is a long, long way in the future.
A lot can change in many, many ways. But it is a cool thing to have right now.
If I were you, the amount that you're funding, what is it? Did you say $100 per kid every month? Yeah. I don't think that's going to get you to the point that you're just busting at the seams with cash because there could still be books.
There could be other things to spend that money on. And there are two.
So as you get closer, you can decide you can decide to ramp up you can decide do you see what i'm saying like you don't this is not something that you have to lock in and you can't change at any point you have a lot of freedom here right and we were hoping to start contributing more um but we're just trying to figure out how much do we put into a 529, knowing that room and board would be on the hook for. Have you projected it? Have you projected what that $100 per kid will be when it's time for them to go to school? I have not.
I need to. Okay.
I would do that. I would do that.
I would look at the 529 that you're interested in. I would look at the average rate of return for that and see, okay, if I put $100 in here, you know, after 16 years, what's it going to be? And then you can decide, okay, let's work backwards.
How much do we think room and board will be? And kind of work backwards from there. And that's what I, that's, if I were in your shoes, that's where I would start.
Perfect. And if we get to the point where we are potentially going to overfund there there are other investment opportunities that you would look at doing to help set them up for when they graduate and things like that so what I would do at that point once I funded a 529 working through the baby steps if I had extra after that, I would put it towards paying off my house.
And then once I paid off my house, then I would start looking at other things that I could do. I know my husband and I, one of our big goals is to have a fund for our kids to help them buy their first house, like that sort of thing.
But that comes after mama and papa pay off their house. Yeah.
Right. Yeah.
And ours paid off here in a few years. So that's what I'm trying to think.
Yeah. After that, then I just probably start with a brokerage account, something that you can dip into.
It's not part of your retirement and you can gift them a certain amount each year, you know, under the gift tax, you and your husband are both entitled. What is it? 14? I can't remember off the top of my head.
I can't remember the exact amount. You'll have to check it and it might be different by then, but that's what I would do.
And that way you can kind of see, okay, here's the amount that I can gift them every year, or here's the amount that I can gift them as a lump sum. And again, you guys can kind of project out and see, okay, what do we think that we want to be able to give them? How long would it take us to save it at the rate that we're able to save? Perfect.
Yeah, makes sense. All right, thanks for the call, Marie.
Good thought. Yeah, love it.
Love when parents are thinking about that. And by the way, I think that advice is great to kind of go, okay, looking at tuition now, there's really no way to know what tuition is going to look like, just the way that the higher ed industry is kind of evolving right now.
That's right. So it's kind of like you got to do your best with those projections to kind of go, okay, based on where we are right now, adjust for inflation, and then you kind of back into your number.
And his was based on a work benefit that who knows in 16 years where they'll be. Yeah, that's interesting.
All right, let's go to San Antonio. Oh, wait, actually, no, we're not.
Look at that. The little ding cut that was it off that's right we are running out of time in this segment so uh we will take a quick commercial break don't move the phone lines are lighting up 888-825-5225 is the number alongside jay warshaw i'm ken coleman you're listening to the ramsey show all right dave you have some strong opinions.
Possibly, yeah. I think so.
Okay, because you really prefer credit unions over big banks. So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union.
So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing.
But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union. So I find very few credit unions that aren't very customer-centric.
Yes. Well, and I think we have found one that is incredible, and that's Fairwinds.
They are an incredible credit union that is really out with the heart to help the customer. You know, that's why we're partnering with them, because they've got a scope to be able to handle the Ramsey audience, and they're the right kind of people with the right kind of values.
And they've done a really, really good job with customer service. And the deals that they're offering, the Ramsey Tribe, is incredible.
Yeah, absolutely. And you're right, their customer service is unbelievable.
Winston and I just signed up, and we got an account. And I'm not kidding.
It took less than five minutes. It was so user-friendly.
The step-by-step approach was unbelievable. And then the next day, rings and it says fair wins on my phone So I answered it and talked to someone there and they said yeah, they give Calls to every new customer and so again, they just Really care about your experience and I I so so appreciate that So again, you guys I know it can be a pain to switch banks or to open up new accounts But fair wins again, they make, they make it so easy.
Plus, anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app, and you'll have free access to over 33,000 ATMs. Hey, you guys know how much I hate banks in general, and so for me to do this is a big deal.
Talk to our friends at Fairwinds and check out the combined

checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible.
Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org slash Ramsey to learn more.
That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome to the Ramsey Show America

where we're here to coach you up

so you're winning in your money, winning in your profession and winning with your relationships. Alongside Jade Warshaw, I'm Ken Coleman.
The phone number to jump in is 888-825-5225. 888-825-5225.
We're going to start it with Nicole, who's joining us in Toronto.

Nicole, how can we help?

Hi.

I've been with my boyfriend for some time now.

And basically for the last year, we've been kind of planning to buy a house together.

So I've been going through the steps and saving money.

And recently, he's been kind of hinting at the fact that he's going to propose soon.

So I kind of sat down with him to see over the last year how much he's saved towards this house.

So we kind of know where we're falling.

And I discovered after a year that he basically hasn't saved any money.

And during that period of the year, I have been taking on most of the financial burdens

because I make significantly more money than he does.

I'm kind of shocked by the fact that he hasn't saved any money, and I don't really know how to go forward. So I wanted your advice.
Yeah, good question. On the one hand, I get why you're concerned because in you guys's relationship, it sounds like there was kind of an agreed on point that you wanted to reach and you were going to try to reach it together.
And it seems like he hasn't, you know, held up his side of the deal. But from my perspective, I would say he doesn't have to contribute to this at all because it's really not a great idea for you guys to buy a house together if you're not married.
And it's really not a great idea for you guys to be combining your money in any sort of way if you're not married. It's really great for you guys to guys to say okay say you do live together i'm paying my portion you pay your portion but we're not doing this thing together until there's some legality um protection surround again in marriage i agree with that but nicole how did you feel i got a point to make after i ask her this question how did you feel that's actually when out? That's actually the plan.
Sorry, I don't mean to interrupt you. No, go ahead.
But the plan is not to buy the house until we get married. That's why he's telling me that the engagement is coming soon.
So we're getting the ducks in the row for, okay, we're engaged now. That means after we do the wedding, we're going to be buying the house, but the house is going to be the biggest feat, right? I see, I see, I see.
Yeah, but, so, okay. So how did you feel? What emotions and thoughts did you have when you found out that he hadn't been saving any money? I was absolutely devastated because he's living at home with his, we don't live together now, he's living at home with his family.
Ah. And I've been printing the money on everything, all of our dates.
I've been putting away tons of money and I make three times the amount of money he does. How long have you been dating? Just over a year.
I think this is a very clear, I'm going to call it yellow light. Oh, I would have said red flag.
Well, you always surprise me. I feel, I think it's a yellow light.
I think in the sense of this, what I mean by yellow light. Oh, I would have said red flag.
Well, you always surprise me. I think it's a yellow light.
I think in the sense of this, what I mean by yellow light is... Proceed with caution.
No, it's we sit down, she doesn't dump him. Red light to me is dumping, leaves him, I'm out.
Yellow light is sit down and go, we need to do some premarital. I mean, if if we're talking this we need to get in alignment on this because this is what I was devastated and you may have already shared that with him Nicole but even if you have there needs to be a true alignment conversation yeah and is he going to show you in the days and weeks and months ahead that he understands your values and is in alignment with your values and he begins to save some money? I would not even say yes to his proposal.
I wouldn't move forward on anything until that. That's what I mean by yellow light.
I agree with that. I think Ken and I are saying the same thing.
We just used different colors because red for me means means like, let's stop and see if anything else dangerous is happening. And so my question for him would be like, okay, you've not been saving.
Can you tell me why? And then can you tell me like, well, what have you been using your money for instead? Because you're still living at home. I would have real questions and I would want real answers because that's indicative of what it will be like in your marriage when you speak about money.

Well, I know the answer to that.

I did ask that question.

And the majority of his money has been spent on food and video games.

Again, massive, massive construction sign going, watch out, watch out, cliff ahead.

Nicole, are you feeling that too?

Yeah, that's what i'm calling because it's okay so can i play if i could play older brother or i might be old enough to be your dad for all i know i would just tell you that this is a serious serious conversation he needs to make some changes in his life if he wants to be in your life. That would be my bumper sticker.
What do you see about him that's really, I want to go in another direction. What do you see about him that is really great that you go, this guy, this guy's got motivation.
This guy's got that thing. This guy, like tell me those things I'm just curious uh why I love him um he has been my rock like I've opened up a ton of new businesses in the last year and every single one I've done he's had my back through every single one he's so genuine he is so sweet and he is so kind-hearted I've never met a man like him in my life okay Okay, I like that.
Listen, I'm going to say something really harsh, and I realize this. You can get all of those things from a pet.
Support, somebody to be there to talk about. I want you to be able to say deeper things.
Does that make sense? Oh, it makes sense. I love this.
I love you're bringing the heat today. What you said, like that's a golden retriever.
And we love that. That's why we love our animals.
They're always there for us. Unconditionally, you know, they're there to support us.
They've got that. By the way, he's doing by playing video games and buying fast food.
He is essentially the same as a golden retriever there as well. Just costing you money.
Costing you money. And I want to hear you say, you know, this guy, you know,

if you were to ask me or my husband that same question,

it would be more about what they bring out of us

and what I see when I go, oh, man,

nobody works harder than Sam Warshaw.

Like, that's inspiring to me.

The way he will get up and do whatever it takes

to take care of his family,

the way that he'll take care of his kids, like the way he's sacrificed for us year after. Like those are the things that I want to hear.
And I'm not hearing that. That's why I kind of flipped it to see, okay, how is, what do you guys mean to each other and what roles are you playing? And is it beyond just, well, you know, they're, they're there when I need them, you know, and what does that even mean? He's a very sweet guy.

A nice guy.

All the things.

He's also a pretty decent gamer, sounds like.

You see where I'm going, Nicole? I got a chuckle out of you.

I mean, listen, you can love someone

and decide to also say they're not the person

that they need to be right now for me to decide to marry them.

Yes.

I think this is a very real conversation.

Back in my day, we used DTR to find the relationship.

Kids don't know what that means, I'm sure.

DTR.

I'm sure I dated myself again on that.

But I think that's what's got to happen.

Yeah.

I think so, too, because—

All right.

So give her the—you're the strong female.

I think she's a strong female.

Give her 30 seconds on how she starts that conversation with our guy. Oh, boy, how she starts the conversation.
Or sets it up. I've been thinking.
Okay, give me more. I've been thinking, you know, I love you because you've always been there for me.
You've been my rock, but I really needed you to be there for me.

I really needed you to show up when it came time to talk about our goals as a couple.

And when it came to our goals as a couple,

you let me down.

You didn't show up with your side of the money.

You said you were going to do this.

You said you were going to do that.

And I haven't seen that.

And this is the first time you've let me down.

And unfortunately, it's in an area

that really matters to me

because it's not just about you or me.

It's about us.

Wow.

And all right.

Thank you. that and this is the first time you've let me down and unfortunately it's in an area that really matters to me because it's not just about you or me it's about us wow and all right oh it's good it's good all right i think it's gonna get his attention uh well done poor guy but he's gonna have to stand up at some point we'll be right back this is the ramsey show you shouldn't own a gun you're not willing to shoot.
In moments of self-defense, a Berna launcher lets you protect yourself in a non-lethal way. That's exactly why Berna launchers were created.
Everyone from parents and nurses to pastors and even special forces veterans rely on Berna to protect themselves and their families. I own several Burnas myself.
They look like guns, but they're not. They shoot a 68 caliber round kinetic or chemical irritant projectile that can disable a threat from up to 60 feet away.
And they're powered by compressed CO2 cartridges, so they're classified with paintball and airsoft guns, but they're more powerful than those for increased protection. Not to mention, burner launchers are legal in all 50 states with no permits required, and because they're not firearms, they can be shipped directly to your door.
Plus, Ramsey fans 10 off an exclusive bundle which includes a burner pistol co2 cartridges and ammo and other burner products like safety alarms defense sprays and body armor are also 10 off for our listeners just go to Burna.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave.
I talk to people every day who want to know how to do better in two areas, money and relationships. That's why I'm pumped to bring the Money and Relationships Tour to a city near you.
Join me and Dr. John Deloney for a night that will challenge the way you think about this stuff and possibly change how you live forever.
Starting April 21st, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth, and Kansas City. Grab your tickets at RamseySolutions.com slash tour before they're gone.
Welcome back to the Ramsey Show alongside Jade W Jade Warshaw, I'm Ken Coleman.

Glad to have you with us.

888-825-5225 is the phone number.

Hey, folks, as the Ramsey work guy here,

helping you win at work so you can make more money,

really excited to tell you I've been dreaming up a concept for a long time.

Jade, you know this.

It's called Front Row Seat,

where we're having deep dive conversations with movers and shakers

and the other tell you, I've been dreaming up a concept for a long time. Jade, you know this.
It's called Front Row Seat, where we're having deep dive conversations with movers and shakers, thought leaders, people that are successful from every walk of life, designed to do three things. To get better as a person so that I take a better version of me to work, so I can move up the ladder professionally.
And then as I move up the ladder, I'm going to be put in a leadership position. How do I lead? And so helping you grow in your professional development is called Front Row Seat.
And it is now out on YouTube, wherever you get podcasts. So check it out, Front Row Seat.
It's a lot of fun. Here's what's unique about it.
We have a live audience and the audience sits with me and the guest and they get a chance to ask questions as well. So it's not just me asking questions.
I wanted the audience to be able to learn as I'm learning, engage with me, with our

guest, and they also represent the larger audience. So download Front Row Seat, or not download,

subscribe wherever you get your podcasts, and on YouTube, just search Front Row Seat with Ken

Coleman. All right, let's go to Orlando

Florida where Mo joins us what's up Mo hey how you guys doing today good how are you

I'm well so I've just been doing research with my financials and then I came across George Camel

on YouTube and then that's why I saw the Randy show yeah you gotta love George oh yeah yes sir

Thank you. financials and then i came across george camel on youtube and then that's why uh saw the randy show yeah you gotta love george oh yeah yes sir he's uh he's very amusing on youtube so if you guys ever see him please give him a thank you for how you believe me i'm gonna tell him on the next break because he loves hearing it how can we help so my uh my question is, so with the baby steps, I feel like I'm in limbo between baby step two and baby step three.
I have $6,000 right now in my HYSA, so I feel step one is definitely complete. So my financial situation, my wife and I, we closed on a home in June of 2023 out in California.

Our mortgage is, sorry, expense-wise, we're stocking away $5,200 a month into another HYSA to cover the mortgage, property taxes, and insurance.

Okay, so let me just make sure I understand. You moved from California.
You hadn't sold the house. So right now you're still paying for the house.
No, I'm, I'm going to, I'm moving out to California. You're moving out.
Okay. Okay.
I think I understand. So that's, so that's the mortgage there.
And then I have non-traditional student loans. My parents, my parents had a 529 plan for me and my siblings and they want half of the money back of what they totally spent for my college university.
and then okay hold on let me clarify make sure I understand that are you telling me your parents

created a 529 you used the money

for education and they're like hey pay us back

some of what you used from the 529? Correct. That's wild.
Okay. How much do they want? They only want 50% back of what my costs were.
Which is what? Which is $75,000 now. That's wild.
I've never heard of a parent investing in a 529 and then saying, hey kiddo, pay me half of it back. Did you know that on the front side or is this new information? No, this was when I was a teenager in high school.
So you knew? Yes. Okay.
Okay. That's okay.
Whatever you guys decided, that's the deal. All right.
That's different. What else? So you owe your parents $75,000.
You've got $6,000 in the HYSA. Why did you say earlier that since you had $6,000 in the HYSA, you had moved from Baby Step 2 to Baby Step 3? No, no, no.
I moved from Baby Step 1. And now I feel like I'm in limbo between baby step two and baby step three.
Okay, got it. Well, technically, well, let me clear that up.
You are in baby step two, because baby step two is we pay off all of our consumer debt, anything except our home, if we have a mortgage at that point. So you are in baby step two.
And part of that is taking your savings down to $1,000 and putting the rest at the debt. So in this case, yeah, you'd be dropping that HYSA down to $1,000 and throwing the rest at the debt.
Is there any other debt aside from the student loans? uh the yeah for for the, so we, when my wife and I closed on our home, we don't have PMI. So the other 10% came from a loan from her parents.
Okay. And how much was that loan? that uh now i believe is i think it's fifty thousand dollars oh sir okay man let me tell you something i'm gonna be flat out i'm gonna be straight up with you owing money to like debt and creditors sucks but it kind of feels worse when you owe it to family members because they Oh, different emotion.
It's a different emotion. I, I want you to get out of debt so quickly.
Okay. So you're moving to California.
You've got the house. What are you going to be making? Uh, my gross salary last year was 137 and I'm predicting it.
It'll go up. It's not a, it's not a predictable set.
It's predictable in that the salary will increase, but it's not a predictable number per year. What about your wife? She's predictable at around, I think her gross last year was 80,000.
Okay, so you guys are going to be a little bit over 200, like maybe 210?

That sounds about correct with our gross income for last year. Okay.
And so I just want to make sure because your mortgage is $5,200 a month. What's your month? The mortgage is $4,252 a month.
Okay. And then we also sock away extra money.
Property taxes are now increasing. It's about $8,400 a year now.
And then California does its 2% increase from Prop 13. And then we also sock away extra money for the insurance.
I have a question. And the insurance last year was.
I have a question in all of this because I'm trying to track with you on the math as much as I can, but I don't know these direct numbers. What percentage of your take home is your mortgage going to be? Because California is expensive tax wise and the number you gave me, the $4,000, that's not including taxes and insurance so what percentage is it have you done that math yeah uh I think it's about 50 to 60 percent my guy I know it's supposed to be 25 percent yeah and you're not even a little bit over I we got to go back to the drawing board and I want want that for you.
Like, I don't want you to be in this situation because you're about to be stressed to the team. I was going to ask, do you feel stress, Mo, when you start thinking through this? I have, but now I've, I've accepted the terms of it and I feel relaxed because, uh, because of the nature of my job.
I feel content that my wife, she is 20 minutes away from her parents, and the nature of my job, I'm gone for two weeks at a time. So emotionally, I feel okay because I know she has somebody to rely on while I'm gone.
But you don't have any negative emotion about the lack of margin because of how much you're paying in mortgage i used to i i've come to i've come to terms with it and accepted it i mean i'm just like percentage wise i just want to lay this out because i i think you understand it conceptually like on a very like uh not detailed level but like actual numbers putting it in your budget, because I'm looking at it like this. I'm like, okay, 15% in a little while, 15%, well, not for you, it's going to be a while, but at some point, 15% is going to go to investing, 10% is going to go to giving, you're at 60% on your mortgage, that leaves you 15% to live on.
that's not much. And at this point that that would be for paying off debt, which is going to take forever at that rate.
So I strongly urge you to consider nothing's done that can't be undone, right? Like you don't have to stay in this situation. It might be, and I think that it is you not keeping this house.
It's too much house for you. You got to get out of this house.
That's what I would do. And then I'd work on paying off the debt that you owe to your family.
Yeah, I agree. Thanks for the call, Mo.
Please reconsider. Don't move.
We'll be right back. This is The Ramsey Show.
Hey, you guys. Health insurance costs are only moving one way, and that way isn't down.
And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries.
CHM is a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape.
And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs.
Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs.
CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets.
That's chministries.org slash budgets. Listen, guys, I've heard just about every excuse for why folks think they can't get ahead with money.
So let's go ahead and settle this right now. The truth is you get to decide what happens with your money.
And if you want to start winning with money, you have to get on a budget. The EveryDollar Budget app makes it easy for you to plan every dollar you've got coming in and every dollar going out.
Plus, it's free. So no more excuses.
Go download EveryDollar in the App Store or Google Play today. Welcome back to the Ramsey Show.

Alongside Jade Warshaw, I'm Ken Coleman.

The phone number to jump in is 888-825-5225.

888-825-5225.

Ray is joining us now in Dallas.

Ray, how can we help today?

Good afternoon.

Thank you so much for taking my call.

Sure.

I have a bit of a unique situation, a little different than others. I'm in my late 70s.
I'm quasi-retired. And I've amassed an estate a little north of $30 million.
Way to go, Ray. Come on now.
We have no debt. We have no mortgages.
We have no credit card debt. Everything is paid.
And we have approximately $17 million in cash and equities and the balance in property. Holy smokes.
My question is that we've set up a very, I think, qualified estate plan with competent estate lawyers. And the beneficiaries of my estate are approximately a third, a third, a third, my daughter and my grandchildren and my wife.
the monies that are spinning off of our investments are more than my grandkids

could legitimately or reasonably spend when they become of age.

Right.

I want to, right now, the estate plan calls for up to $250,000 per annum, um, uh, for my, uh, for my grandchildren. By the way, my grandchildren are six and nine.
Okay. So they're going to build a lot of wealth over the next several years.
When they're 21, they get a modest amount of money for five years. And then at 25, they begin to kick in.
My question, the simple one, is $250,000 a year too much or too little, given the fact that the, you know, the growth of the estate will be much larger than that? That is a good question. I don't know that I can tell you if it's too much or too little.
I think that... Yeah, I would return that with a question.

Do you think it's too much or do you think it's too little or do you think it's just right and why? Yeah, that's good. I'll throw it back at you.
Well, at this stage, you know, in our economy, in our country, I think it's just right. But I'm concerned that the growth of the investment portfolio, it'll be selfish not to let them grab more of it.

And the whole reason for having an estate is to take care of the little ones in the future when you don't know what's going to happen.

That's right. However, you decided that $250,000 at this point in time does feel right.
And it's per year, correct? Yes. Starting at $21,000? No, at $21,000, I think it was a little bit too much.
So we're going to do $5,000 a month between $21,000 and $25,000 and then $250,000 and then a map of $25,000. Yeah, I think it depends on, you know, I'm trying to channel Dave right now.
I think gifts are really great. And I think how people use gifts depends on who they are as people.
Because when one person's hand, 250,000 a year is like, hey, this was my grandfather's legacy. I'm going to do great things with it.
It's not going to stop me from reaching my personal potential. It's not something that I'm going to use as a crutch in life, whereas another personality, it could become, you know, really a stumbling block for them.
So I wonder more about the type of language that's built in as far as who, what type of person does this grandchild have to be in order to get this money? And is there language built in that says if it's harming them, what takes place? Those are the things that I'm thinking about. And I know it's, you know, it's not like you can reach out from the beyond and control everything, but those are the things that I'm thinking about.
other part of this and again this is your estate I am not trying to overstep uh I see what you're saying you're like there's a lot of money that's going to be generated here I don't want to not let them have it but I also wonder okay well there's other things that you can give to that's not just kids and grandkids because you might it's in many ways like that you've got so much money you can only give them so much without really giving them a ton of money right how long would the the 250 be paid out is it in perpetuity uh yes i mean we don't have a stop on it and one would assume that they were, uh, by the way, just to comment on your last statement, we have clauses in our state plan. They have to be good people of good character, uh, you know, drug and disease free and all of those.
And we have a very competent trustee, um, and, um, um, you know, with a wonderful wonderful moral compass, and we're comfortable about that. But I'll be gone.
So let me ask you this then, Ray. So they get to 250 each year.
By the way, these are the grandkids we're talking about? Once they get to 25. Okay.
So at what point would they get the rest of their inheritance? Is there like a kick in at like a retirement age where they get it all? Because you were saying they're going to be building tremendous wealth, and it's like the $250 is a nice dividend, for lack of a better way of describing. Is that right? That is essentially correct.
So when would they get the big chunk? There is no clauses in the estate plan in which they get to clean out the drawer. So I would assume that that legacy would continue on with their wills and estates to where they could leave it to the great-grandchildren, whom I will never know.
Okay, so it's $250 each year, and it's not like they get it all at one lump sum. That's all they get.
And that's very generous, by the way, each year. And then it transfers to their children's children.
Yeah. I hope so.
But we could well afford, just with the increases in the portfolio of the investment side of it, to give them more. I'm concerned to do that for all the reasons that you already know.

You know what I'm thinking, Ray? I'll get out of your way, Jade, but I was just thinking,

I really trust your gut. I think you are a man of wisdom, and you have proven it with how you've

lived your life and as to where you stand today. So I'm not going to second guess your plan.

However, if I personalize it, and if I was doing this for my grandkids, which I don't have, but if I'm sitting there thinking this, I'm wondering if even the most mature of 25-year-olds, it's not that they can't handle it, but how would it change their perspective if they knew they were going to be making a quarter million dollars every year, whether they do anything at all? And I almost would want to maybe put it to them in different ways. So for instance, they get a really big lump sum to buy a house, but it can only be used to buy a house cash.
So you can put that in the trust, right? So that's one thing I'd think about. I'd be thinking about it can only go to an investment.
It's going to be put in an investment thing, at which point you can only pull out at retirement. You know, like that could be another way of doing it, Ray, but I'm not second guessing your plan.
Jade? Yeah, I agree with Ken. The other question I had for you, Ray, was you said, okay, obviously this $250 is paying out to the kids, grandkids, but that's by no means going to drain basically your estate nest egg.
And then you said, I hope it would go, but they never get the lump sum. So what happens to it based on the estate? What happens to it? Do you know what I'm saying? Like what's the transition point? Well, the transition point is that following our conversation, you know, with you guys,

you know, we'll certainly go back to council and we'll amend these things to make sure that we,

you know, make that money's available either in the gift side of it or increase in the 250

or include the unnamed biological grandchildren in the state. Our major concern was giving them too much too soon.
Yeah, I agree. And our major concern was requiring them to be good citizens and, you know, no criminal record and all those things that you can think of, you know.
So we're, that's kind of what we're leaning on.

But, you know, with insurance, with insurance and property taxes,

and we want to have, we want them to have cars that work and a good vacation.

And Ivy League school, if they choose to do that,

there's plenty of money there to do that.

Well, well done.

I mean, I wish we had more time.

I want to know how he, how he came up with this 30 million, maybe another call. I mean, Ray's my hero.
I would love to be Ray one day to be able to bless my kids and my grandkids that way. That's really awesome.
What a blessing. What a legacy.
Well done. This is the Ramsey Show.
Alongside Jay Borshaw, I'm Ken Coleman. So glad you are with us.
888-825-5225 is the phone number. Let's go to Devontae in San Antonio.
Devontae, how can we help? Hey, how are y'all? Good to talk to y'all. Good, how are you? Good, good.
So I'll get right into it. Me and my wife, we started a Christian-based after-school program last year.
And long story short, we felt led led to do it but it did not end well we took some risk i mean it started with personal finances and then credit cards and then we did a heloc loan 50 grand okay uh fast forward to right now um got all the credit card debt paid off uh we went down two cars but the lord bless, we're back to both cars being paid off.

But I got this $50,000 HELOC loan.

I want to know what y'all would do if they are all of me.

I got a two-year-old, a baby on the way.

I'm trying to be like Ray.

Come on.

Me too.

No, it says to leave an inheritance to your children's children, spiritually and financially.

That's right.

I'm ready to, I'm ready to, I'm not, I'm about to be Dave Ramsey Bonafari from now on. I'm not doing that anymore.
Good, good. But what do I do now? Okay.
So for, uh, are you guys homeowners, your homeowners, what's your house worth? Like, what do you owe on it and what's it worth? Uh, it's at, I'm going to say it was 120, about 120 left on the's about $250,000 to $260,000. Okay.
Yeah, the reason I asked is because we kind of say if the HELOC is more than half of what you owe on the house, then you kind of throw it to baby step six and it's part of paying off the house. But if it's less, then it's part of baby step two.
So for you guys, I would treat this HELOC as though you're in baby step two and paid off in that way. And I think it's possible.
I'm in real estate and, you know, it's had some good years. Last year was tough, but still did pretty well.
But I'm torn between, you know, emergency fund and paying off the HELOC. Like how should I attack that? Because I don't have our emergency fund where I want it.
Okay. And you've got the baby on the way.
Yeah, I hear you on that. You're technically in stork mode, I would say, in that case, which is you just piling up money to save for this baby being born.
And the hope is, you know, you stack up a bunch of money, the baby is born, everything's all good. You know, maybe you pay the insurance deductible at most, and then the rest of it can go on to the debt.
And it's kind of like push play on the baby steps at that point. That's what I would do in your situation.
As far as the idea of saying, I'm going to kind of skip baby step two, and I'm going to do baby step three first, I would not do that. Because if you do that, you're honestly putting yourself back in the position that got you into this mess, which is when we don't have savings and when we don't have cash, we use debt to do the things that become emergencies or even the things that we say we want to do.
And so having that emergency fund there is so important so that later on, you're not dipping into things like the 401k when an emergency comes or a HELOC when the emergency comes. Got you.
Got you. So, Lena and a little bit, you know, have a considerable amount in emergency fund, but attack the HELOC.
No. So we'll talk.
Let me let me put it to you two ways. You're almost there.
So the baby steps are baby step one's a thousand,000 saved. After you get $1,000 saved, you do baby step two, which is you pay off all of your consumer debt.
In your case, that's including the HELOC. And then baby step three is you save up three to six months of expenses.
And then you go on baby step four, five, and six on down the road. We don't need to cover those just now.
In your case, though, since there is a baby on the way, we kind of call that storm mode, which is whatever baby step that you're on, in your case, baby step two, we stop, pause, and we stack up as much money as we can, knowing that there's a baby coming, there could be added expenses, and we want to be ready for that. So once the baby comes, and you go, okay, everything's good, you know, like I said, maybe you paid the deductible, but you've still got, I don't know, 10 grand sitting there.
That 10 grand doesn't stay there. Now you push play on the baby steps and it goes back to paying off the debt.
Does that make it a little clearer? Yes, that makes perfect sense. Awesome.
Listen, that's what Ray would do. That's what Dave would do.
So true. I love that.
Hey, Devontae, man, listen, I love your spirit. I love that you've got a clear goal ahead of you.
And right now, you're working as hard as you can work. You are stacking jobs.
You're just not able to be turned down if you're out trying to sell a house or sign up somebody who's looking for a house. You just have got to turn this into big time intensity.
And that's the best thing you can do for, you know, when you've got this, this sense of, oh, I got to provide. And I get that.
And I can hear it all over you. And no judging yourself, just moving forward, just turn that angst into effort.
And I think if you do that, you will be surprised at how quickly opportunities come to you to make more money so that you can move forward. So, I mean, that's the play.
Owen is up next in Nashville. Owen, how can we help? Hey, guys, I was hoping to get your take on, you know, how young of navigate, um, car ownership, some things like that.
You know, honestly, I'm actually currently working on my wife's blown up car to repair it, to either keep it or sell it. But, um, man, we've been shopping around for a car and the, the used market, the new market.
And I'm just over here like, wow, do people really buy these things? Like, that's too much. And I'm like, use RAV4s, $30,000 for a used car.
I'm like, no, I'm just not doing it. So.
Well, what do you have to spend? Well, kind of whatever I want, but then I'm hitting our savings and things like that. And we have a very large savings for a home right now.
So that's kind of what I'm hoping to get through and hopefully get some clarity. What do you want to get? What kind of a car, what do you want out of it? So currently my wife has a Prius, which is one of

the larger small cars and she is pregnant. And so we're expecting a child.
So a small SUV to

midsize SUV. Yeah.
Something like that. Okay.
You guys debt-free? Completely, yes. Okay.
What about 15 grand? How's that number hit you? No problem. We were going to put that down and try to maybe finance a little extra.
No, no, I'm saying 15 to 20. If you can do 15, you can do 20 and not feel indigestion, right? Well, we were looking in the 25s, but the problem is for the kind of vehicle that we can get for that price range, you know, now I have my wife in a car with 200,000 miles on it.
Not true. And a new child.
Owen, listen. But wait a minute.
Even to that degree, my car has 200,000 miles on it. Almost.
Well, but we're in the wrong narrative. Yeah.
Owen, I just bought my son two years ago, a Ford Explorer that had 98,000 miles on it. We got it for 13 grand.
It's an older model, but it's in phenomenal shape. And it's got, like I said, just right now, he's only got 101,000 miles on it.
So this idea that you can't get something that's decent mileage in the 15 to 20 range is not true. Yeah.
Well, and that brings me to the, I guess the frustrating part is when we look at vehicles like that, we always look at each other and say, well, why don't we just keep your Prius then? Because it's about to be, you know, have a rebuilt engine in it. Does it fit everybody? Well, the baby doesn't care and the baby fits in there.
If everybody fits, I thought the reason was nobody, we couldn't fit as a family in the Prius. No, well, she wants something a little bit bigger because the Prius is tight.
Here's what I think. I think you need to do more shopping.
If I were in your shoes, I would set my budget first because I want that to be the driving factor. Here's what I'm going to spend.
Here's I don't want to spend any more than this number right here. Right.
I'd set that first. Our top cap is 26.
OK, so to no more than twenty six thousand dollars. And then I just work backwards.
I say, OK, what are we looking for? We want four doors. We want a midsize.
We want it to be the color black, whatever it is. And then run that back because the options are there.
They might be higher mileage. And then as you begin to narrow that funnel, you might decide, listen, I thought I cared more about the make and model, but really I care more about the mileage.
And I just, for whatever reason, I'm not saying it's right, but you might go, I just don't feel good about a car with 150,000 miles. Fine.
That's your prerogative. But it's going to shift the year and the make and model of car that you get.
So I think that you just have to have a set of priorities listed in order of most important to least important. And then we're working through that model to actually get where you want to go.
And by the way, you get where Owen is by budgeting, by having an idea

what it is that you have and you keep it. The best way to make most of your money, by the way,

is creating and sticking to that budget. And we've got the best tool.
It's EveryDollar,

makes it simple to plan, spending, track expenses and save for what matters most to you. It's an

easy to use app. So go get it.
You can get it at the App Store or Google Play or click in the link

of our show notes.

Get every dollar right now for free.

This is The Ramsey Show. We'll see you next time.