If You Live Fake Rich, You Will Become Real Broke!

live from Ramsey solutions. This is the Ramsey show where we help people build wealth, do work they love and create amazing relationships.
I am Rachel Cruz hosting this hour with my good friend and fellow co-host of the Smart Money Happy Hour, George Camel. Different vibe on this show, but still fun.
It's still fun. Yeah, we don't have a cocktail on the show, but we are answering your questions, America.
So give us a call at 888-825-5225 and we'll help you out. And it's anything from your career, your money, your life, relationships, anything and everything.
We're going to start off this hour with Alex in Cleveland, Ohio. Hi, Alex.
Welcome to the show. Hi, thanks.
How are you guys doing today? We're doing great. How can we help? So I am 23 years old.
I, I roughly have about 90,000 in debt. Um, 47 of that is, uh, a car loan.
My payment per month is $1,200. Okay.
Um, when I bought the car, I was making roughly 150 per year, um, lost both those jobs. And now I make about 60 per year.
And, um, just wondering, should I voluntarily surrender my car? Um, I really can't afford it anymore with, um, between rent and cost of living. Um, I have 47 on the car, about 37 in student loans and 6,000 on credit cards.
I did complete baby step number one, working on number two. My mom also mentioned that she thinks I should file for bankruptcy.
I'm not sure if that's the best solution, but I just wanted to get your guys' thought on that. No, on the bankruptcy.
I'll just say that, yeah, first and foremost. We're not there.
We're not even close. So there's some good news for you.
I think mom wants you to get a clean slate, and she's kind of wanting you to just shortcut this and be free from the pain. But there's better options here.
And so let's talk about the car. Instead of a voluntary repo, could you sell it and come up with the amount you're underwater on? The car is only worth about $25,000.
Did you roll negative equity? I might be able to, but... No, did you? From a previous car.
How do you owe 50 grand and the car's worth less than half of that? The interest on it is 25%. Oh my goodness.
When I bought the car, it was during COVID. I needed a new car.
Didn't have much credit. And they would only approve me for a brand new car.
I could not get approved for a used car. And you said, sure, 25% sounds good.
That's reasonable. Let's go.
I need this $50,000 car. And when you're making $150,000, this is the problem.
You feel like, okay, well, I can afford the payments. And if I can afford the payment, everything's fine.
And that's the backwards way of going into when it comes to buying a car. But that's what a lot of people do.
I can afford the payment. So regardless of how much interest it is, I can afford it.
And then life happens, as you've experienced. Okay, job-wise, Alex, what were you doing before? You said you had two jobs that you lost.
What were those? I was a payroll manager for an IT company, and then I was an assistant manager for a retail store. Okay, and what happened to those jobs? The retail store ended up closing down, and I wasn't able to get reloc relocated and the IT firm also shut down.
Oh, okay. So both companies closed.
What are you doing now? I work in IT still on like the administrative side. Okay.
Okay. Single? Family? Kids? Single? Okay.
Where are you living? Cleveland.veland okay are you living alone renting uh rent uh with a roommate um 1300 split between the two of us okay that's good um okay so yeah i mean the getting the car out do the 25 000 that it's worth where did you pull that number from from a dealership or from like kelly blue book uh kelly blue book and a couple other like just look uh like browsing seeing like what similar um but it's not trade-in value that's private party value yes private party oh man yeah because the problem is you need to come up with the difference even if you do a voluntary repession, they're going to sell it at auction for way less than it's even worth, and you're still going to owe the difference. Yeah.
So it doesn't really – it doesn't solve all of your problems to even do the voluntary repo. That's why we're trying to find another solution where you come up with a difference.
I'd rather you be $25,000 in debt driving a beater than $47,000 in debt. Yeah, and that that's kind of my thought process too.
Trust me. I know this was probably the worst financial decision I've ever made.
But yeah, I'd rather drive a hoopty at this point than, you know, drive. Are you able to keep current with your other bills, Alex, right now making 60? Yes.
You are. So this credit card debt is not ongoing to keep lights on and everything? No, I'm slowly paying that off, thankfully.
I mean, honestly, Alex, if I were in your shoes, I mean, I would figure out a way. I mean, it's about 18K for the difference of the car.
And you're probably not going to be able to get a loan for the difference. Well, you said you owe $47,000 on the car? $43,000.
Oh, $47,000. Oh, I wrote the $43,000.
$47,000, yeah. Okay.
So you're $22,000. $22,000.
$22,000 under. So, I mean, ideally we'd say, hey, go to your local credit union, get a loan for the difference, maybe $25,000, and spend three of that on a beater car.
But I don't know that they'd even grant you that loan at this point.

Have you tried?

No, I haven't tried.

I kind of wanted to search all my options beforehand.

Sure.

That's the least harmful of the options is to go to a credit union

and see if you can get the difference in a loan

and maybe a little bit more in order to get a beater car,

get rid of this payment,

and then you'll be climbing your way out of this.

And then hopefully in the meantime, we can get your income back up to six figures. Because clearly you're skilled enough and you're willing to do the work.
Yeah, for sure. Yeah.
If you can get that 60 up for a full-time job and find something 75 or 80, right, in like a perfect world. And then the side hustle is what, I mean, that's what I would be doing, Alex.
And I'm like, if you can make, God, I mean, you'd have to make 3,000 extra a extra a month I mean I'm trying to do the math of how to do this within a year um to get to even save the amount for the difference right so best bets you can take a loan for the difference and like George said earlier a local credit union is going to be your best bet versus a bank um they're the ones that are probably actually going to sit down with you and run more numbers and look um but so that would be my first option and then if not that's probably what i would do i would probably try to get out of this car before anything else even before the it solves half your problems yep yeah if you can get out of that and then now the second half at least it's bearable and you can climb out of that pretty quickly even making what what you make. It's a solvable problem.
But I do think income is the biggest part, and then your lifestyle is going to have to get cut down to nothing for probably the next 18 months. Yeah.
And so this is no eating out. This is, hey, the roommate wants to, sorry, I can't hang out.
I'm working three jobs. It's not going to be a fun journey.
But the good news is you're young enough that you have a lot of time to make up for this. And so all hope is not lost.
You don't need to go file for bankruptcy. George, would you, if you were him, would you save the $25,000 first, get the car out and then do the debt snowball? Ideally.
I know. I just don't know how quickly he's going to save up $25,000.
Yes, that is. Because I do wonder Alex too if you got if you paid off the six credit cards and

did just the traditional debt snowball how much payments monthly will be freed up because

those are paid off.

So even just working down the debt snowball but knowing you have a freaking $1,200 car

payment till you get to it to pay off is not fun.

But in the meantime I almost would just work the debt snowball till you get there.

But yeah thanks for the call Alex.

Good luck to you.

We learn from our mistakes George. We learn from our mistakes, George.

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Welcome back to The Ramsey Show. If you have jobs like us out into the internet, one of the things that, you know, it's just kind of a known thing, you just don't read the comments.
You just kind of let people feel what they're feeling, and you just move on about your life.

But George, on the other hand, reads all the comments.

I live for the comments.

George is always in the comments.

I've got to find my joy somewhere,

and the comment section is so entertaining to me.

And we keep getting a consistent comment.

Here it is.

A lot.

Where's Dave?

Question mark, question mark, question mark, question mark.

One question mark would suffice.

Yes.

So can you clear the air? Yes. Dave is okay dave is fine dave is living like no one else he's in cabo wabo mode dave and they they are i i mean you know i don't know george he's left us to run the ship the grandparents are they're gone you know the the kids are asking where they are and you know I didn't think about that your children are like where's queen patty they're just living it up which good for them good for them uh so if all of you want to know he is totally fine he's alive this is not a weekend at bernie situation actually doing great uh and yeah george we we have to fill the show the the shoes he's thriving of the goat let me just tell you yeah so no he will be back we promise he is better than he deserves right now yeah he's tan and happy he's doing great that golf swings really looking good all right uh we're next we're gonna go to tammy in milwaukee hey tammy welcome.
Hi, guys. Thanks for taking my call.
Absolutely. I am 34 and I have had a couple of houses.
I went through a nasty divorce a couple of years ago, bought a house, sold it and bought this one. And this is where I'm in a little bit of trouble.
I bought this house debt-free. So I had a paid off car.
I did put 20% down. So I thought it was in good shape.
Yeah. Until one thing after another kind of broke and I was fixing things.
And now that I've been watching you guys for the last

six months, I know that I should not have taken this large of a mortgage because it's about half of my income. Of your take-home pay? Yes.
Oh. So what do you make and what's the mortgage? Sure.
So I have a few jobs now. So my first income is about $4,000 a month.
That's my primary job. And I see that keep going up and I'm trying to get promotions and doing well.
And then I also bartend on the side. So that helps.
And then I'm about to start doing taxes on the side. So coming up here, I'll hopefully.
Okay. How much do you make bartending a month, would you say? About 400, 500.
I try to be conservative with that number. A month.
Okay. Yeah.
Okay. Perfect.
And what's your mortgage payment every month? $2,000.

All right.

Got it.

Okay, so how can we best help you today?

I'm wondering if I should sell my house because it is a lot.

Yeah.

Or if I just keep hustling because what it did was it put me into debt.

I was also paying for school, and I made the mistake of putting that on my credit card. How much other debt do you have? $37,000.
Is that all credit cards? One is a personal loan and the rest is credit card. Okay.
I mean, yes, Tammy. the only reason I would say and kind of get to that answer pretty quickly with the house is that you would have to basically double your income for this to make sense.
And you are saying that you see your income going up. But what I would want is the side hustle income not be part of the equation for your mortgage, because I want to get you to a point in your financial journey that you're not having to have a side hustle to keep your mortgage, right? It's not sustainable.
Yeah, you want just like, yeah, your regular income to be able to support your main four walls and more. So tell me, how long have you been in the house? I just I just hit two years, uh, last summer.
So I'm, I'm good on the capital gain side. Yeah.
Okay. How, um, how much do you owe on it? And what could you sell it for? Um, I owe two 75.
Uh, and I think I could probably get four 10, four 10. Yeah.
Oh, wow. It went up a lot in two years.
It did. I live in a crazy area.
Okay. I'm more in the suburbs.
Yeah. But it definitely did.
And I put a lot down and I think that might have been another. Yeah, that's true.
That's fair. Yeah, yeah, that's fair.
So if you sold it after fees, you would net probably $110,000 or so, maybe $120,000 if you're lucky? Yeah, I kind of assumed it'd be around that $100,000 just because of realtor's fee. And then you could then pay off your $37,000 in debt, leaving you with another $60,000 plus to then begin a new down payment fund while you rent.
Did you have kids, Tammy, when you divorced or no kids? No. Okay, so it's just you.
Okay. Just me and a dog.
Okay. No, that's great.
So yeah. I mean, honestly, Tammy, you know, our goal when, at least when I'm giving this advice and George would be the same, is it's ultimately leading you to have a level of control over your money that ultimately then gives you peace.
That's what we want, right? I mean, if you build wealth and do all of this, that's later in the baby steps and that is so doable for people. But the biggest component here is peace.
And Tammy, I don't feel like you have a lot of peace when half your income is going to just the mortgage and you have $37,000 of other debt that you're having to pay and you're having to keep up the house. I mean, there's just not, it doesn't sound like a lot of peace.
Would that be true? Yeah. I mean, I've paid off like $5,000 in the last six months ever since falling your baby steps, which is great, but I don't know if it's enough.
Right. Right.
And I don't want to work 80 hours a week. Yes, totally.
At that pace, it's going to take you another 40 months to get rid of the debt you took on, on top of covering your mortgage, which is already consuming a lot of your take-home pay. So I can feel the stress of all of that.
Yes. Making things worse.
Yeah. So I think like a good goal to shoot for Tammy is I probably would, I would sell the house.
I would use some of that money to pay off your debts. I would use some of it for an emergency fund.
And then I would quickly get back into a house or into real estate in general. Cause I don't, I think you can put yourself in a position where you're not a renter forever.
But it may even look like a townhome or a condo or something, right? It may not be even a single family home. Or if it is, it's smaller and it's way more doable.
Because I do think prices with homes, they continue to go up. So I don't want people on the sideline for too long.
But a move like this, I think will open up so much margin for you. And you'll be able to have kind of a clear head to go and purchase something again.
Because I do think you'll be in a position soon to buy something. Yeah, it's not quitting on home ownership.
It's just getting your head above water to do it with a little more peace on the next go around. Because this just feels like, I mean, you can give it six months and see if you can get your income way up, like Rachel said, before you sell.
It's not like an on-fire sell today, but it just feels like if there's no end in sight where this is going to get easier and you're going to continue to go into debt, then I think the writing's on the wall that it's wise to sell. Yeah.
And then I'll follow your plan of 25% of my income. That would be nice.
That's right. That's right.
I know. And again, it's not a fundamentally, you got to do 20.
It's just that when it's 50%, life is hard. When it's 25%, you always have margin.
If it was $1,000 right now, right? Compared to your income, that changes. I mean, that's $1,000 freed up right there.
And if you work hard and bartend and maybe do double what you're doing, that's $2,000 coming in extra a month to pay off this other debt, right? It just kind of ends up working so much more in your favor in that way. Is there a growth plan for you to make five, six, seven grand a month in your current role? That's complicated.
Our company is going through a lot of changes, so I'm not sure. Is it time to look for another company? I've started looking.
I'm a loyalist, so we'll see. But maybe it is time.
Maybe I need to dig into that further. For your skill sets, would you say you could ROI better out in somewhere else and you're staying because you love this company? Or do you, no, like I'm worth this amount even if I transferred to another company?

No, I just graduated.

So I think I could leverage that.

Okay.

Yeah, for sure.

Yeah, Tammy, it feels like there's some big moves coming up in the future, which is all

positive though.

That's it.

I'm like, it's freeing you up more and more, giving you more peace and control.

And I think it's going to be an incredible thing.

I really do.

Yeah, renting is not a waste of money if it's going to buy you peace.

That's right.

Thank you. you up more and more, giving you more peace and control.
And I think it's going to be an incredible thing. I really do.
Yeah. Renting is not a waste of money if it's going to buy you peace.
That's right. For a period of time, for sure.
And then you can save up and get for a down payment on your next property and you just keep that ball rolling. Thanks for the call, Tammy.
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All right, George, we had a Smart Money Happy Hour episode. You know, we have some that just you can tell have hit a nerve with the world in a good way and we did one recently on things that scream I'm pretending to be upper class because living a higher lifestyle than maybe what you can afford keeps you broke I mean when you are living beyond your means and trying to in a way kind of keep up with what everyone else is doing will constantly lead you back to this idea of spending money that you don't need to spend.
And sometimes you're spending money you don't even have to keep up this lifestyle. And you talk about comparisons a lot.
So this segment hopefully will help you fight those comparisons and FOMO you feel amongst your friends. So here's some signs, some things that your friends may be doing, people out there on Instagram that may show they're faking their upper class status.
Number one, flashy designer logos. This is a big one.
Most luxury items like a cashmere sweater never have logos all over them. We've talked about stealth wealth.
Yes. That's not many happy hours.
It's a new trend. It's called quiet luxury, stealth wealth.
People that are actually really wealthy, you won't really know it. They don't really have all the flashy stuff that you just look at and you know exactly, oh, that hat, that jacket, those shoes, like you know exactly where everything's from.
A lot kind of go under the radar. If you know, you know.
If you know, you know. Yeah, yeah, yeah.
Secret society. Yeah, it's kind of that.
That's like the new vibe, which is great. I think it's great.
So yeah, that's number one. Number two is ordering expensive wine when everyone knows that you're on a beer budget.
Ooh. Hey, some of these beers now are crazy expensive.
But yes, the wine does, that one feels like a ripoff to me personally. You know this, my stance.
I do know this. I will not order wine at a restaurant.
But if someone else buys a bottle, hey, I'm happy to share. Oh, I'm sure you are.
I'll chip in. Take a glass from someone.
Glasses of wine and cocktails can go for $20 a pop versus a beer. Or even better, just a water.
What happened to just drinking water with a meal? Why do we got to add more calories to the mix? And more money. And more money.
See, that's not fun, though. I do like an appetizer.
I'll just have a water. Rachel's like, I'll have three appetizers.
I know. Let's try a bunch of...
I do. I love going out to eat.
Rachel lives

a little. I do.
Number three

is talking about money too

much. So it's like, oh,

I'm leveraging this debt

for all this

real estate. I think those are

some of the funniest Instagram

reels that come up on my feed sometimes where people are

like, I'm $6.2 million

in debt and we are loving it.

And it's like showing all their VRBOs

that they've bought and all this stuff. And you're just like, no, no.
It's exhausting. And then you've got the crypto bros who are very loud right now because crypto is worth $14 billion for the moment.
And so all these people talking loudly about money is usually a red flag to me. Maybe they don't actually have a lot.
Yep. Next is flaunting wealth on social media.
So this is an interesting one because I do think you can like use vacations for an example. You could see somebody at the same destination on social media, but the way they present themselves again, kind of back to that stealth wealth of like, oh yeah, we're just like, maybe I'm showing you some of the stuff, but it's more of what we're doing or like, you know, the kids and the poor, I don't know, whatever.
And then there's those that are like, oh no, I'm going to take you around. The suite that we have rented for the week, you know, or we're going to, it feels, it just feels like I want to show you this amazing life that i live and that's and then the kicker they're like and by the way it was totally free with their credit card points sign up for my course if you want to i'm like oh my gosh get out of here it's true it's true out of town here's another one uh-huh leasing luxury cars oh yes if you're a dude and you've ever posed in front of any vehicle it's a hard no for me you your dad didn't hug you enough and i'm sorry that's just the truth but this is a status symbol that's usually draining their wallet we just took a call earlier it is guy's got a 1200 car payment yeah he may look like he's driving great when you see him but behind the scenes not doing so well and leasing cars you know the number one city i read this somewhere so don't i don't want everyone in dallas city did that of least cars dallas dallas texas that makes sense the number one so a lot of young bros who are doing well for themselves i guess got those beam you know and you're always leasing like a beamer mercedes it's always like a i want a nice where are the guys who are leasing like the Honda Civic, you know? They're not there.
Does that exist? No, I don't think so. I don't think they make money off that, George.
Okay. And then number six, over-accessorizing, flashy nails, expensive watches, loud hair, or loud hair slash makeup.
That's what's on there. Meaning, I don't know, just a lot.
Yeah, no, and this, you know, obviously the watches leans more the dudes but the women the flashy nails and loud hair and makeup we could tone it down you know i know but here's my thing here's my thing with this there's a limit i know here's my thing with this though is i mean i do that i get my nails done like well you follow a lot of like the influencer moms and some of them are very sweet and authentic and being themselves and then some fall into the category of this is a lot yeah you're trying to portray a certain life i would agree with that like they wake up and they have full makeup who's believing this this isn't real this isn't real uh so yeah so all of these things you know can again scream i'm pretending to be upper class so here's the thing you guys not to be faking upper class how do we get there and be wise? Because again, none of these things in and of themselves, I wouldn't say, right? If you order wine at dinner, if you do have a nice designer purse, none of these things in and of themselves are bad. But when it becomes your whole persona and it's the only thing you're shooting for in life, and again, that you will put yourself in a financial position that's not wise in order to achieve these things, that's where the the caution flight, the caution lights come on.
And if you're doing it with debt, it is a facade. It is a house of cards.
You're artificially propping this up. So here's my, you can tweet this if you're listening out there, whatever it is called, whatever platform you're on, whatever free speech platform you choose.
Here it is, Rachel. You ready for this? Can't wait.
If you live fake rich, you'll become real broke. Eventually you will be calling the show

and life was great

and now something happened

and you're going,

I'm in a real pickle

because of my financial decisions.

Yes, it is the house of cards.

And so we just don't want that for you.

Yep, let it be real

and yeah, doing things again,

doing a budget,

living within your means,

saving up for an emergency fund,

getting out of debt

so you free up payments

so that you can actually use your money to give, to invest, to buy a house that's actually, you know, reasonable for your income. You know, you're doing all these things.
And again, they're not, it's not going to be like this flashy, beautiful, wonderful lifestyle 24-7. It's not going to look like that, but there's going to be the steadiness and this like firmness of a foundation under you.
And it's not all just like shaky and built on other people's money.

That's right. Normalize the 10 year old used minivan.
That's practical. It paid for car.
That's the real flex. Okay.
So yeah. So the minivan and everyone knows I love my minivan.
We know your feelings about minivans. Yes, I do love.
I love my minivan. I think it's great.
It is wonderful. but i will say the plastic on the side of the seats have popped off so two now are so when you get in my van there's like wires and have your kids been vandalizing this vehicle i feel like that's a personal problem i don't think that's on honda you know what i mean we can't blame the good people at honda for i know but i'm like oh my gosh this my gosh, this is like, yeah.
I'm blaming Chuck Cruz. He's been working out too much, just ripping pieces of this van apart.
Oh, but it's, you know, but it's paid for. That's what matters.
That's what's great. Less stressful.
You know what? I hit my garage the other day. Big old scrape on my car.
You know what I said? Eh, it's 12 years old. It's fine.
Who am I trying to impress? Rachel Cruz? She's not impressed. What am I trying to do here? So yeah, there's a big old scrape in my car.
So good. Because I hit my garage.
All right, if you are watching on YouTube, comment below because we want to know some of your, you know, things that you see out and you're like, huh, are these people trying to be upper class and they're not? Yeah, we'll share your stories. Is it the lifestyle fakeness that's out there? And I would say a good bit of it is probably on social media.
Can we be honest with that? It helps to just get off of there. I realize I stop caring what other people think when I'm not looking for reasons to be angry and upset and jealous and envious.
Just get off and live your life. George, if we could all be as wise and as disciplined as you.
I'm the most humble guy you know. All of it.
But you can check out our Smart Money Happy Hour episode as well on YouTube and podcasts where we dive into this conversation even more. This is The Ramsey Show.
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Visit Xander.com or call 800-356-4282. the employee benefit research institute recently did a study asking people really have a million or asking how many people really have a million dollars saved for retirement and according to the research only 3.2 I'm sorry 3.2 percent of Americans have a million dollars or more in their tax advantage accounts like a 401k or an individual retirement account and IRA.
58% of Americans have less than $10,000 saved in their retirement. So as a Ramsey Show listener, the question is, are you staying on track with the baby steps to reach your financial goal? If you want to know that, make sure to take our quick quiz to check your progress and received a personalized plan that's just for you.
So you can head to the show notes and click the link titled, Are You On Track With The Baby Steps? and complete the quiz for free. All right, let's go to the phones and let's talk to Lee in San Antonio.
Hi, Lee. Welcome to the show.
Hi, how are you all today? We're doing great. How can we help? So I have a question.
I just got turned on to your show about a month ago and I've become an addict. I kind of learned about the baby steps several years ago from a friend of mine and it really burned a hole in me.
So just this week I paid off my vehicle. I paid off all my personal own except for my house.
Oh my gosh, Lee. Did you have all this money sitting around and you just weren't willing to part with it? Yeah, kind of.
I paid off all the credit card student loan. I took a lot of extra gigs as a contract nurse and stuff.
Awesome. That's a big step.
You drank the Kool-Aid. Way to go.
I did. I did.
So my question. I am married.
We've been married for 30 years. My husband is terrible with money.
He has almost put us in the poor house three times. So about when I got turned on to this a couple of years ago, I've separated our finances completely.
Because, you know, you give him a debit card, he has money. If he had checks, he had money.
So we have on money. Um, he doesn't make as much as I do, but he is definitely not hurting as far as his credit sucks.
He can't go anywhere. Sorry for the word.
Um, so he, um, he, I just found out that he did put all his stuff into like one, one of those credit consumer people. He didn't talk to me about it.
So when I was out on – I've always done our income tax. When I was out on the COVID run, he did one income tax return, and he forgot to tell me he had spent or took money out of his 401K.
So anyway, that's a $9,000 bill. I told him he has to pay it because that was his mistake.
He didn't say anything about it. He didn't report it.
And now he gets to pay it. So going back a couple weeks, I was listening to your show.
And I know I heard you all talk about the Bitcoin and I'll sell it, whatever. But I do remember him mentioning something, and I haven been able to find the show about if you had stock, like Sequel stock.
So when I worked in the hospital, I used to buy stock from them and it wasn't much, but when I checked on it the other day, it's worth 35 grand. My question is, do I want to sell it and then pay some of that IRS? Because I'm in Texas, so everything's community property here.
I owe half if he defuncts. Or do I take that money and do a Roth IRA for last year and then put the rest into my six-month emergency fund? Or should I just leave it and let it go still? Okay, so you have the $35,000, the tax bill is how much in your husband's name? Nine grand.
Nine grand. Both are names, but it was his mistake because he took the money out of his 401k.
Got the taxes and penalties and all that. Yep.
What did he use that money for? He didn't report it. I was gone.
You have no idea what he spent it on? Does he have an addiction? Frivolous. He likes to cook.
He likes to buy junk. People don't rob their 401k to buy junk.
Well, I cut him off from myself, like I said. He buys junk, believe me.
He likes clothes. He likes junk.
He does. Okay, so what's the total debt? Is it just the 9,000 or is there more where this came from? Well, his that I know of that I'm on is the 9,000.
He did not tell me how much he has put into that thing. That was his credit cards, whatever.
He is not on mine. The house is in my name.
My car is in my name everything's in my name that i am okay so from a practical standpoint lee i would probably pay it off because it's good it's in your name i mean it's yeah for you guys which sucks that it's his mistake um and i say sucks that it's his mistake because of the way you guys have been living um yeah but i so i would do that i would um do you have money saved or are you on baby step one? My net worth. No, my net worth.
I already have my I have my thousand dollars in a separate account. I have paid all my accounts off and I my my net worth with all my IRAs and investments because I put money in investments when I was doing the COVID thing also and paying off loans.
and all. So my net worth according to my Quicken account or whatever that is or whatever was on my

computer because I'm not a investments when I was doing the COVID thing also and paying off loans and all. So my net worth, according to my Quicken account or whatever that is, or whatever was on my computer,

because I'm not a really good money savvy person, is about $670,000.

Way to go. That's great.

My house only owes, I only owe $172,000 on my house right now.

Okay.

Okay.

But you've been doing the solo, essentially. You're just like, whatever you do you, you i'm gonna manage my money and not go into debt and get my goals and yes you're not dragging me yeah so the question to if you sell and the stock is in what again um it's in a hospital stock in a big uh corporate okay okay okay um yeah i mean i bought it years ago it was only like you know from payroll deduction and i've just kind of like left it on the back burner sure yeah and it's grown it was like 25 50 50 bucks when i bought it and now it's worth like 300 i mean it's 35 000 that's what i found out that's amazing so you'll probably what's your uh you do you file single or married filing jointly at this point oh we still do married filing jointly just because it's cheaper that way.
And what was your income last year? Last year was 94, but this year I got it up and it's 97. Okay.
So it'll likely fall into like a 15% capital gains tax on those stocks since you've owned them for longer than a year. It's going to be long-term capital gains tax and it'll likely be 15%.
I would talk to your tax pro about what that number actually would turn into, because you'll need to have that, you know, be able to pay the taxes on that come tax time. But I would definitely sell these stocks, pay off that 9,000, and then fully fund your emergency fund.
And then be putting the rest in your Roth 401k, or I'm sorry, your Roth IRA that you were saying, and just be putting... Well, putting because I just found out this because I just found out yesterday when I called my uh HR benefits and stuff uh we do have Roth IRAs available here at my job I mean a Roth 401k I'm sorry yeah right okay we have you yes so that and your Roth IRA are going to be your friends because the great thing is when you take the money out like versus this stock stock where you're having to pay capital gains, you wouldn't pay anything and you could just cash it out and it would be all $35,000 of yours.
The only difference is you won't get the tax deduction come tax time because it's on the Roth side. Yeah, that's right.
But that's worth it because of how much you're going to be making in interest over time. So I would do that.
And then, and then Lee, I mean, that's the. it into this year's IR, like go ahead and put it in, like if I sell it, I get it before

I file do that. And then, and then Lee, I mean, the, that's the.
Should I put it into this year's IRA? Like, go ahead and put it in. Like, if I sell it, I get it before I file my income taxes.
Put that into the seven, like 7,000 into my IRA for last year's. And then I could worry about the taxes on the long term capital gains for this year.
yeah I mean that's one way to do it before tax time you can fund last year's

you know Roth IRA and HSA and all that

stuff so that would be a good thing

to do and then make sure you have your fully funded emergency fund set up before that. And if you have enough, you can fund the rest in that IRA.
But the bigger glaring issue here is this marriage, Lee. It's like the elephant in the room.
how long have you guys been married 30 years okay so i did talk i did talk to an attorney

um and basically he was like it's cheaper to keep him so because you know you're gonna have to split your assets and everything yes i also want to think about your the quality of your life and not just about the dollar signs, but I just feel for you.

I mean, has it been 30 years of this?

I mean, the way he handles money and the way he approaches money is the same as how he approaches life, correct?

Yes.

I mean, he's very, I mean, he's not a, I don't even know how to say it.

He's an oxymoron in his whole world.

I mean, he's, so the kids need him for something, he's there.

He's never been not there. Yeah.
He did have an infidelity issue years ago. Mm-hmm.
I don't think that's a problem. It hasn't been a problem anymore, but.
Okay. Well, I would, I would say this, Lee, too, just for the wholeness of who you are as a person, what George is saying is, you know, making sure that you're a whole person and how you can do that best, you know, is your decision for sure.
But I would keep my money separate at this point because he's not proven otherwise and I don't trust him. So I hope that helps, Lee, and good luck to you.
Well done on all the progress. Thanks to all the guys in the booth and Kelly, lady in there.
Oh yeah, Taylor, we got some ladies in the booth and you, George, is a great co-host. This is The Ramsey Show.
Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend, bestselling author, and co-host of our other podcast, Smart Money Happy Hour, and George Campbell.
That's you. That's me.
I didn't introduce you. I just gave you all the titles.
I appreciate that. I'll take the accolades.
You don't need to mention my name. And we are answering your questions this hour at 888-825-5225.
And to start us off, we have Dustin in Palm Springs, California. Very nice area.
Hey, Dustin, welcome to the show. Hey, thank you.
So my wife and I were in our mid-30s and we are so close to baby step seven, we can feel it. But we have one small hurdle that we got to jump over to get there and differing opinions kind of on how to resolve it and hoping to get some advice and maybe you guys can break a tie for us.
Perfect. Can't wait.
What is it? What's going on? All right. So we've knocked out all of our debt using the baby steps.
We paid off about $350,000 worth over about two and a half years. Wow.
$350,000 you guys paid off? Yeah. Well, not all paid off.
We sold stuff. I mean, we had everything under the sun.
Wow. Well done.
Automobiles and campers, and I don't even like camping. So all we have left now is our primary primary home and we do have a vacation home.
And what we want to do is sell our primary home and move into the vacation home, which we like better anyways. And basically the net proceeds from selling our main house will pay off our vacation home, which will become our primary residence.
Wow. Great problem.
Yeah. So we're ready to go.
The problem is I bought the vacation home prior to our marriage and I unfortunately bought it from a friend. He's carrying the note.
And when I kind of brought up to him, you know, excited that, Hey, I'm going to have a big, big check for you. He kind of pushed back and, you know, he's kind of saying he wants to spread his capital gains tax over the 10 year note that we'd agreed upon at the and kind of just, you know, park his money in that investment.
So my question is, how do I do this? I don't want to burn a friendship. My wife wants me to just slap a check on his desk, but she doesn't have to play golf with him on Saturday morning.
So I'm not really sure how to approach this conversation without, you know, ruining a friendship kind of thing. So he basically kept the mortgage in his his name and you just pay him the mortgage payment and he pays for it.
No, we did it all legit. We went through a title and escrow company and we drafted up a purchase agreement.
Um, and basically it's, it's just a loan from him. Basically, you know, I did a 20% down payment with him.
Um, and I do pay him, you know, basically as the bank, but I am on the title of a deed, all that stuff. Okay.
Okay. So you're, so it is your home.
Correct. I mean, yeah, it's your home and he's just the bank is what that is.
Just seller financing. Yes.
Correct. And I wish I didn't do this because now I'm in this situation, but yeah, basically when I brought up to him that, you know, you know, I owe him about 500,000 and, you know, have the ability, well, Will, once we sell this primary home to pay him off.
But he just doesn't sound very excited about it. He wants to just go per the terms of our agreement, pay it off over 10 years so he can expense that capital gains over the 10 years rather than all at once.
Has he actually talked to a tax pro to see if this loan repayment counts as income? Well, he said that was for, yeah. So, well, it does because he has to pay tax on the interest portion of it, I think.
And then, you know, on the principal, he's, you know, it's capital gains rate, I believe, because it was paid off, you know, for him. Yes.
So to answer the question, yes, he said he talked to his CPA and basically if I pay it off, he will have to pay capital gains on the proceeds.

Yeah.

Is there anything in the contract that you signed with him that would prohibit you from just paying it off?

And that's the issue.

There's not.

I've read over it a hundred times, and it's like, legally and all that, I can go pay it

off.

Yeah.

So boo-hoo, friends.

Here's your $500,000.

You're going to have to pay taxes on it.

Did he not make money off of this?

Did he not benefit from this whole thing? No. Yeah.
yeah he's gonna make a lot of money off of it um you know he bought it 25 years ago um so he's gonna make quite a bit i i guess my worry is that i'm either gonna upset my wife or my friend right because it's like she or your life dustin or your life you guys have freaking paid off 350 Like, you guys are on a plan together for your life, and you did this side deal with a friend, and your life has changed, and your priorities and your goals have changed. And so, sorry, friend.
It's not like you're putting your friend in debt. Boo-hoo.
He gets $500,000, and he's going to have to pay some taxes on it. He can wipe his tears with $100 bills.
Sorry, dude. And I'm being very insensitive.
If I were you, I would feel much worse because it is a good friend. I don't have a lot of empathy for the friend.
I mean, yeah, Dustin, the writing's on the wall. You have to do what's best for you and your family.
It'd be very unwise to make an unwise financial decision for you and your family because of the feelings of a friend. And so I guess that's going to be a hard conversation I need to have with him and say, listen, this is our goal.
And I think you can give him some time and say, hey, I'm not doing this tomorrow. You know, our goal is to do this in 12 months or whatever the goal is for you guys when you sell your primary home, all of that.
Like if you can kind of map out a timeline, give him some time and space and just say, hey, yeah, this isn't happening tomorrow, but it will be happening in the next year. And I looked over the agreement that we signed and I'm sorry, I know it's not ideal in your situation, but like this is this is our values and our priorities with our families to be completely debt free.
And and yeah, this is what we're deciding to do. And again, Dustin, you're not like completely screwing the guy like it's you know you're not paying you the the debt back yeah sorry yeah he's a little older and that was part of it too is he's like well you know and he gave me a great interest rate at four percent he's like well you know i can kind of guarantee to make my four percent of that money where and he like i say he's a little older in reality he can just go park that in a high yield and make that that was exactly the point i was trying to bring up to him and he he just he'll i he just didn't seem jazzed about it and it put me in a weird situation where i'm like man i don't want to like burn a friendship with a guy that i you know i've had a long friendship with but at the same time i'm not matching up with the well and i'll be honest too if you're a friend i'm like trying to put myself in his position right if i ever was in that deal and i had a young guy come to me and be like you know oh my gosh we're able to get out of this deal um because because we have the cash we have the money we're so excited we're gonna be debt free like you would hope that it doesn't burn a friendship that in fact he celebrates with you and you know what i mean which i know like this way of thinking is different to celebrate being thankful a friend paid me back which is very rare in today's world the other thing, Dustin, is that when he loaned you this money, the relationship already changed.
It turned into a business partnership transaction and it moved away from friendship. And so this is what happens with friendship.
So the truth is, if you pay it off and he decides to not be your friend, was he really your friend? Yes, George. He's sure.
There's a piece of it, though. I know what you're saying.
I know what you're saying. It changes the relationship.
I would never burn a friendship over them paying me back. Yeah, yeah, that's it.
That's what I'm saying. If he really, Dustin, is not your friend anymore after this, then to George's point, then he's looking to make money off of you.
You know what I mean? It feels weird if he is going to cut ties with you as a friend because of this move that's weird yeah that would be weird I don't think that would happen it's just I guess I'm you know I hate to even say this I guess I'm kind of just being a sissy about having the conversation because of the vibe I got when I brought it up you know a couple times over and I even told you know my thought was just let's just park our money that we make from the primary home in a high yield and just pay him off. And then I kind of, you know, we're quote unquote, we feel debt free ish because the money's there.
But my wife says, you know, she's so excited because we did so good on the first, you know, six steps, call it, that she's ready to just finish, quote unquote, finish the journey and be done. Yes.
My wife, her vote counts 1000 times more than any of my friends. And I love my friends.
And you have a little bit of that people pleaser in you Dustin I hear it and so yeah this is grown up stuff and be a man suck it up and talk to him and again if he is weird after this because of this whole thing like that's a weird guy I'm going to add this to one more reason to not borrow money from friends. That's the new book.
And family. Yes, all of it.
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Welcome back to The Ramsey Show. Up next, we have Ethan.
Oh, we have Mike. Sorry, Mike in Asheville, North Carolina.
Hi, Mike. Welcome to the show.
Hey, how are y'all doing? I got a good one for you. Okay, perfect.
So we, COVID hit, we did a big remodel.

It was about $100,000 that we've invested to create home offices.

As a result, we kind of credit carded everything,

and we've been living paycheck to paycheck for a while,

and I just lost my job this week.

We were trying to do a refinance, and that fell through.

And so long story short, we went from about $195 income to about 65 and looking for advice and we cannot sell the house because it's under a remodel we're not allowed to sell it for at least a year and the remodel is not quite finished oh boy okay is that more than just getting the two home offices during covid y'all done more remodeling yeah it was extensive we we kind of um expanded the second floor and just with the goal of ultimately selling but it's obviously when i lost my job it was uh kind of a deal where it kind of put the brakes on everything even more you know after living paycheck to paycheck and so we're obviously doing it the wrong way. So looking for advice on how to get out of this.
How much more debt do you have? What's the total amount? And break it down for us. Okay, so the mortgage is 202, and we have things like cars and credit cards, and a lot of that is just due to the remodel, but it's $210,000 and other non-mortgage debt.
Oh, my goodness. Well, we can sell the cars.
What do the cars have to do with the remodel? They don't. Yeah, so the cars we're paying, one of them is $394,000.
The other one is $380,000 a month. How much are they, how much do you owe on the cars? How much debt's on them? Yeah, approximately 28 in total.
Okay, break them down. What's the each one? Each, well, so one of them is about $13,500.
The other one's $15,000. Okay.
I'm confused. You said you had $210,000 in other debt and only 28 of that as cars.
You're saying the rest of that is credit card debt? Well, unfortunately we had like a foundation loan, a bunch of its credit card of a student loan at about 20,000. And I think, yes, the rest of it is either small loans like through Home Depot or credit cards, correct.
And what were you doing for work where you guys were making about $200,000? Software developer. Okay, and what are you doing now? I am looking for work, but I'm going to work on some certifications.
I took a job that wasn't ideal for obviously my career and skill set, and so that's something I'm going to be working on is some probably Azure certifications. Are they going to cost money? That, as I understand, will help.
A little. The test, the actual certification exam is only $165.
But then you need to, is there some kind of online education you need to get that will cost money? Or can you just do a certification test? I can. There are some sample tests and some certification videos that are very helpful, but it's minimal charges, if any.
And how quickly do you think you could get a job making six figures as a software developer? Well, I've applied for a bunch of jobs already, but it's a matter of finding the right fit. I would like to focus on the skill set to some extent, but probably in two weeks, I'd be able to pass that certification.
Okay. If I was in your shoes, Mike, right fit would be a luxury and a privilege.
Right now I'm going, who is willing to pay me $100,000 to write some code? And I'm going to do that so I can survive. Because right now I don't see a way out of this with your monthly payments and your income.
You guys are going to continually go into debt. Is your wife working, Mike? Yes.
Okay. Is she making the 65?

Yes.

Okay.

So if you made 100, then you guys can get back up to 165. I was at 130, but yes.
Okay. Yeah.
So, I mean, ideally replacing that completely like what you're saying. And then, yeah.
I mean, and then from there, Mike, it's just a complete overhaul and mindset shift and change on how you guys have been viewing money. The way you, and you said it at the beginning of the call, so I'm not telling you anything you don't know, but the way you've been doing it, it has to be the complete opposite.
So this is cutting up credit cards. This is, I mean, if any of your cars have equity in them, I would just sell them and get a $5,000 car.

I mean, I would do the complete opposite of everything I've been doing up until this point because that's where you're actually going to start to see some progress.

And I really feel like, Mike, you guys need some quick wins in here.

Yes, the income is number one.

But I would be cutting up credit cards tonight.

I mean, no more. No more.
Like, you guys are not in a place to even have them around um because so much of this is credit card debts and i know it was all in you know because of the remodel but the but the but the whole mindset yeah of going in when you don't have the money it just that that can't be it anymore and then you know walking through the debt snowball of paying off and breaking all these out too. So when you say, yeah, some of these are credit cards, breaking each specific credit card out.
So you guys may have a long list of debts, but as you start knocking these out, that's where that momentum starts. Are you guys able to stay current on payments right now? Well, we had a small severance, but it was only $5,000.
And so our current, just our debt load is like a little over $6,200 for the month. And so the money we've got in hand will, you know, in my last month.
Yeah, I mean, you guys are, you're on the edge of running out and going back into more debt. And so can you do, go do three side jobs this week? Yes.
Doesn't have to be software. It could be Instacart, shipped, Uber, Handyman, whatever skills you have, go do it to bring in something while you look for that.
I had one job where I picked up some work to do some light remodeling for a lady, and that was $530. So you're pretty handy? I've collected about half of that.
Yeah, I mean, I'm doing the remodel myself, so yeah. Okay.
Well, today we start Mike's handyman business and you're going to charge 50, 60, 70 bucks an hour and put it on your neighborhood Facebook group and hand out some flyers and go, I'm doing good work and I show up on time and get referrals, word of mouth and get this business going and do as much of it as you can until you get that next software developer job. Okay.
That's what I would be doing if I had your skill set. Yeah.
And I think what's hard, Mike, is there's a level of like deep humility that you're going to have to have in this process because between now and getting your new job, making anything and doing work that maybe you never thought you would be doing is what's necessary right now, right? Because I don't want you guys, like what George was saying, to get behind. So bringing in $1,000, $2,000, $3,000 a month on numerous things that you're pairing together and you're working late.
I mean, do you guys have kids at home? Yes, two. How old are they? Yeah, so 14 and 17.
Okay. Do they know about any of this? I'm sorry? Do they know about your financial situation at all? To some extent, yes, high level.
Okay. It might be good to sit down with them and have a hard conversation and say, listen, the next year or two, it's going to look different for our family.
We used to go do stuff and eat out and do all these sports. And right now we got to really tighten up and get out of this financial mess.
Here's what that's going to look like. Yeah.
And even if your wife can work overtime, Mike, too. I mean, I would be doing that.
I mean, again, income is going to be your best bet and then cutting lifestyle, which we're just saying. And it's going to be.
Yeah, I mean, I mean, guys if you get back up to that 195 i would be living like i made 80 because the 65 000 is covering the bills basically per month right i mean i mean living on seriously on nothing and that's you could you could really turn this around if you could throw which sounds wild wild numbers here but if you could throw a hundred grand a year out of, yeah, I mean, seriously, I mean, there's, there's some big changes you can, yeah, selling the cars, getting rid of what you can, selling stuff to my, go around your house, sell all the crap you guys that, you know, that you have doing what you can. But if you hold on the line, Taylor's going to pick up and we're going to give you financial peace university.
It's our nine lesson course and you and your wife sit down together and even your kids and watch this. You guys binge this weekend because, yep, life's going to look different in the household.
And that's exciting, Mike, because that means you're going to be winning. I hate to admit this, but I don't always eat right.
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Today's question comes from Matthew in Idaho. My wife and I are millionaires after years of working through the baby steps.
In the beginning, it was exciting. The baby steps happened fast, and our children learned to have Christmas on a budget.
But once we got to the point where we had an emergency fund, the house was paid off, and we were building wealth, everything just started to seem very routine and boring. How do we keep the excitement going in our financial lives? If there was ever a Rachel Cruz question, this would be it.
You were made for this question. George.
You were so good about keeping your financial life excited. Because you're the spender.
You're like, I've got some ideas. And they're like, he's like me.
He's like, well, I like a financial goal. We saved the thing.
We invested the thing. But now what? Goals.
Now you have to actually figure out like who you are. I'm just kidding.
I'm kidding. Find hobbies.
That's right. Okay.
So I always go back to this because it's so spot on and I agree with it 100% and it's science. But Arthur Brooks talks about what you can do with money.
Five things. And four bring happiness and one does not.
So this is what I would say to him. To Matthew, you can give which brings happiness.
You can save which actually brings happiness because it shows progress. You can buy experiences with people you love and that brings happiness.
You can buy your time back and then use your time well spent right so if you have someone mow your lawn have them mow the lawn but you get time back but go work out or like go do something productive and then number five you can spend money on stuff but that does not that does not produce joy and then ramsi we always talk about you can give save and spend right so kind of using that framework if i were you mike i mean if there isn't a big goal out there, and I would say Winston and I, we've kind of gotten to this place. Our house was a massive goal.
That was in 2019. And then we made it a goal for a pool and we actually were finished.
We're not now, I know. So what we took, I mean, it took us probably five years to save for that.
And so now we're at this point when we were planning our 2025 of like, okay, we don't really have a big financial goal in place. And I would say that for a time period, I think that's okay because we shifted the excitement and like, hey, what's the next thing to some of those things Arthur Brooks talks about? So like plan a fun trip with your family, like have some experiences with them.
Give someone a trip, right? If you have the money, like are there people in your life that you could bless them of like oh gosh this couple really helped us walk through some hard times and we want to give them a weekend away right and like like what are things you can do and then the giving aspect which once and I even changed some of our giving goals this year um and we are we like have a percentage now in our every dollar budget that is above our tithe, above everything else we do. And it's spontaneous giving.
And we're going to force ourselves every month to do it and to say, yeah, well, like, where can we give spontaneously to someone throughout the month? If we hear a story, if we experience someone, you know, at a restaurant, a waiter or waitress, like give an insane tip, like what are ways we can do that? And that fueled my excitement, George. Like when we planned all this out a few weeks ago as we were kind of talking through the year, it was like, okay, we don't have a big goal, quote unquote, we're saving for.
There's no baby step eight. Yeah, yeah.
But we're being more creative with our giving, which does make it more exciting. We are going to travel some this year.
So we put that in the budget. So yeah, so like leaning in on these things that actually will bring you joy.
And I'll probably, you know, buy some shirts from Abercrombie, you know, it's just what I do. Uh, but overall, like where do we put our time and our energy and our money, put it in the stuff that's going to bring you joy and excitement.
And for me, that's, that's giving and experiences, but that's probably just my personality. No, you, you nailed it.
I think there's usually a flat tire situation when you're really good at saving and investing. And then the giving side usually is a little lackluster.
And you have a hard time just spending for fun because it feels frivolous after everything you've been through. Are you speaking out of your experience, George? This is me.
This is me. I'm working on my flat tire, Rachel, trying to spend more, enjoy life a little more.
But I relate to Matthew's situation because the baby steps are so great because it gives you a very exact process. If you do this thing, you'll hit this goal.
And then you get to baby step seven and it's a choose your own adventure of live and give like no one else. Yes.
Yeah. And so that's where he has to figure that out for himself.
And maybe that is, we need to find some hobbies. Maybe I'm going to try golfing or I want to get back into this thing that I used to love as a child.
And I'd really need to pick back up piano lessons. Yes.
Whatever the thing is for you and your family and go, Hey, this is something we never thought we would do. Or back in the day, we were like, Nope, we can't do that.
What can you say yes to now? That was a no five years ago. Yes, that's good.
That's really good. Make that list.
Yeah. Of what are things that we, yeah.
And you got, you and Winston just did your annual dream date recently. that's what i was talking about yeah and we had the we had we had every dollar for our monthly budget up and then we had excel and winston has all these crazy formulas of like implementing taxes i don't know he has all this like he does it all and um i gotta get that spreadsheet from winston i know you should in my life yeah and that's the interesting thing is people really do you know on the show about, you know, for a lot of listeners and for those of you that are new to the baby steps, a lot of people are starting out on baby step one.
They're just trying to get that thousand dollars and pay off debt. Right.
But this, this long journey of money, I always want you guys to hear from us on this show that the goal of building wealth and being in a really secure place in baby step seven, where you don't even have house payment your house is paid for retirement's being funded like all of that um it's not just to continue just to get more and more and more and more and more and more and more and more right there is an outflow that needs to happen you need to do things with your family give to others give others great experiences in life like there is something about using money as a tool It's not something to hoard and to keep, but you're doing this to leave a mark on the world. I mean, there's something beautiful about that, that I think is really innate, um, and how we're created.
And so leaning into some of that, because I do think there can be this mindset, maybe early on, you know, maybe baby steps like four, five, six, where there's like, my goal is just to like, get money, get money get money, get money. Which, right, you're funding retirement.
You're wanting stability. But there's been listeners here that have been with us for eight, nine, ten plus years that are Baby Steps millionaires.
And they're like, yeah, and they're on the other side. And the ones we talk to that have this joy about them, this countenance about them that we meet, it's because they've been able to do some cool stuff.
And every now and then they'll drop their story to us, you know, the things they get to do. But I don't know.
There's something about this whole idea of building wealth. It's not just to build wealth.
It is what you do with that wealth that brings you a level of joy and happiness and how we're created. Beautifully said, Rachel.
Gosh, no notes. No notes.
No notes notes so matthew spend some money go on a great trip and and be a generous giver go find things that bring you joy with giving because that's that's the best um all right george there are some social questions that we get all the time i love a social question yeah when it comes to i do too i don't oh i don't see them out here do you have your they did not give we are missing our social question okay i got one you got one all right here we go you ready for this yeah oh shoot zach from tiktok asks how much is enough or normal to spend on an engagement ring i want rachel's opinion on this so badly i don't think i've ever talked to you about this isn't the isn't like the jewelry people out there don't they say three months and we say one generally we'd say one month salary is like a top one month salary that's what i meant yeah but three months out there i think like zales and you know i think they usually say a three kiss begins with k came up with it should be 17 months of your salary i think it was i think it was the diamond company like that did the diamonds decades ago. Debeer's or whatever? Debeer's, that's it.
I was like, I don't want to mispronounce it. But I think they came up with the three-month salary rule, and we'd say, pull that back a little bit, a month.
I think a month is great. But yeah, the weddings, engagements, rings, it is expensive, George.
I'm glad that I'm out of out of that season because nowadays like what people are spending it's insane to be in weddings to go to all the stuff i mean well and then the comparisons can i just be honest it's the women on women comparisons of oh let me see the ring oh that's that's cute you know what i mean like the guys don't care no man has ever cared no it's just like we don't want the woman to be upset that's how we go are they gonna know it's from the lab and not a blood diamond oh yeah what do you think about uh yeah i could give a rat's toot about where like if that's what you're basing this marriage on well was it did they work hard for the diamond or did a laboratory don't care get a moisonite. It's about the beauty of the ring and does it match her personality? And does it make sense financially? Because that is an industry that you can spend so much on.
My wife's ring was not that expensive. There you go.
It's not a blood diamond. I'm not even sure it's a real diamond, Rachel.
I don't even like you saying that. It was just a beautiful ring.
That's what they call them. I don't know what else to call them.
Lab grown versus nature found? Real. Real.
I mean, it's like an actual tool. Producer Kelly, she's showing her ring going, real.
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Oh, that's nice that he at least invites you. You're on the calendar.
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All right. Next up, we have Morgan in Kansas City.
Hey, Morgan, welcome to the show hi rachel hi george thank you for taking my call absolutely how can we help well i'd like some guidance today on how to navigate my brother-in-law with tragedy um excuse me if i get emotional on january 14th my sister-in-law passed away unexpectedly oh my gosh Morgan that was just what two weeks ago two weeks ago she's 38 and they have three children and it's been pretty tough I'm so sorry oh thank you that's heartbreaking so what how are doing? As good as they can do for right now. They have three children, 15, five, and two.
The 15 year old is from a previous relationship. So I think financially her father is able to provide a lot, but to be honest, they weren't prepared.
I mean, nobody is, but he's kind of in a financial mess. Okay.
So I have a few numbers. I don't have all the details because it's still very fresh, but I've gathered a few things.
To my knowledge, they don't have very, I don't think they have any savings. Okay.
Bought their house two years ago for $170,000. I believe their mortgage is $1,400 a month.
Okay. I think he makes, they both worked for a trucking company.
I think he's in like the 70 to 80 range. Okay.
And I believe she was about 60 to 70. So he's losing half of her income.
Yep. And also she was getting $1,700 a month in veteran benefits.
They did not pay for the survivor benefit. No survivor benefit, so he lost that too.
Did she have any life insurance on her? I think she had a small policy through her work, maybe $20,000, no will. They have $15,000 in credit card debt, two cars.
One has a small loan. I believe it's her car.
Okay. And she may have a small 401k.
She may. My question is, she might, I'm not sure.
Is that him wondering if he does, or is it you just saying she might? It's me wondering because my wife and I have been following the day of steps for years. So we're on four, five, and six.
my brain automatically went to right up the baby steps. I was just trying to gather everything I have.
So that is kind of a high level overview. So I don't know if he should take her life insurance and just try to walk up the baby steps.
I don't know if credit cards that are only in her name, if I should tell him to stop paying because autopsy results are pending. And so we may not get the death certificate for about two months.
So I don't know if he can do much of anything until we get a death certificate. Yeah.
Oh, Morgan, I'm so sorry. So in these kinds of situations, when there's something so unexpected and so tragic, we usually advise the families not to do anything major for probably about 12 months because there is...
And that's why I haven't asked these questions yet. This is just kind of what I've gathered because this is, I mean, this is so heavy.
It's just pure grief. Right, right.
And he doesn't, I mean, he can't even probably, you know, put together a thought. And so for you just to kind of be a side support, right.
Um, and at least be able to gather and do, you know, some level of work for him is such a gift, Morgan. I mean, I mean, honestly, you're, uh, you're, you're giving them such a gift by even kind of navigating this part of their lives because everything, yeah.
I mean, I just, I can't even imagine. Um, so I, you know, I wouldn't do anything again, big from a decision standpoint, unless they get to a point where there is something big, right? If they get six months into this and he can't pay the mortgage and they're, you know, you know, there's, you know, foreclosures pending or like something like really big, right? Then we have to make some some big decisions but whatever I think he can do to the degree of staying somewhat afloat for a year maybe some small things and we can maybe talk to you about those here on this call but but overall I wouldn't make any any big big decisions so I think because again the emotion you see straight, you know, she handled all the finances.
So he's trying to just open bills. What accounts do we have? I mean, he's starting from scratch.
So it's, it's just tough all around. It's kind of where he's starting.
Like he said, you know, I'm going to Verizon today to get my name on all the accounts. He's on a scavenger hunt while graving.
I mean, that's the hardest. Yeah, that's the hardest part is that life continues on right in the middle of all this.
And you're like, I have to be a grown up. And the kids still need food.
Do this. Yeah.
I mean, oh, oh, so terrible. Okay.
So yes, I think, you know, your gut on starting to kind of just like put the baby steps in place that plan I think is is a good one again I would I would take you know find the life insurance I would get as much concrete information as you can because that's going to help you guys navigate this but for him I mean he to get him to live on 70K and be comfortable there probably will mean offloading some of this debt so that they don't have all these payments. And I would have him look through every account possible to see if there's any savings.
And I would probably start working on paying off maybe these smaller debts if they do have credit card debt. And sell her car and get rid of that loan.
In the meantime, that's a short-term thing that could relieve some pressure here. And then with the credit card debt...
If there are credit cards only in her name? Yeah, if they're only in her name, he may not be liable for them. It just depends on how things are set up and will the estate pay it out of her assets and his name on that.
And so that's, I can't tell you for sure. Like if her name's on the mortgage, they can, I mean, technically they can come after those things.
They're not going to go after like the mortgage or her retirement accounts, but if she has any other assets that can be used to pay this down, they will use that. But I would not be in a rush to pay off this credit card debt and I would not let the creditors pressure him and lie to him and say, no, you need to pay this today.
Do send a copy of the death certificate to the credit card companies. Once you get those, get a bunch of copies, probably 10 copies minimum to send to all the creditors involved.
So these credit cards are in just some, some of them are just in her name. Is that what you're saying, Morgan? I think they might be.
I think a handful might be. And I would pull her credit report and his just to verify and make sure that, yeah, that that information is correct.
Get a lay of the land. And you can do that for free.
You can have them go to this website, annualcreditreport.com, I believe is the site, and you can pull. Don't ever pay to get this pulled.
Perfect. Yep, there it is, annualcreditreport.com.
You can pull from all three bureaus and get a real picture of here's the reality of where we're at and now we know the next steps and he's lucky to have you to help and clean up the pieces and if we can help in any other way, let us know. But this is just one of those reminders to everyone else listening, get a will in place today.
It's not going to cause you you to die any sooner but it will cause your family to just grieve your loss instead of also lead you on a scavenger hunt and guess and have the government decide what happens to your stuff may I address your listeners for just one minute please excuse me for getting emotional get this done. Because instead of just being able to grieve, take three months off work, six months off work, take the children on a trip, he's in a financial mess.
So on top of grief, there's headache, frustration, and stress. So please, this stuff happens every day.
I know, excuse me, none of us think it's going to happen to us until it does. So if anything, just get enough life insurance to cover these things while you clean up the baby set.
Well said, Morgan. I know.
Thank you so much. It's not easy to go on radio like this and share.
I'm so sorry. Everyone listening, including us, we're thinking of them and praying for them and wishing them the best.
And just to continue on what Morgan's saying, we believe in this so much, you guys, to get your wills done. Xander Insurance for life insurance.
Get 10 to 12 times your annual income. If you're a stay-at-home mom, you need half a million at least on you.
Get life insurance today. Morgan, we're praying for you guys.

George, thanks for the hour.

Thanks to everyone in the booth that's making it happen.

Thank you, America.

We'll see you next time.