Draw a Line in the Sand and Say “I’m Done!”

Live from Ramsey Network, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by my good friend, Mr.
Ken Coleman, and we're here to serve you in whatever's going on in your life. Maybe it's the job that you want to quit.
Maybe it's that side hustle thing that you want to go do. Maybe it's how do I move up in my career? How do I get out of debt? We're here to answer those questions and help you take the right next step.
The number to call is 888-825-5225. Dante's going to kick us off in Chicago.
What's going on, Dante? Hey, guys. I just have a quick question.
So I'm $68,000 in debt, credit cards and loans. 50 of it has already been charged off from the bank.
The other 18, I'm still currently paying off.

So my question to you is, what do I do with the 50 grand that's been charged off?

I don't know if I should do bankruptcy or like debt relief program or what are my other options.

None of that.

And here's why.

Number one, you're not actually going to change any of the habits that got you here.

So we got to dig into that part of what caused me to go $68,000 into debt with money I don't have.

And the other piece is it will destroy your financial life for the foreseeable future.

So what I'd rather see you do is go, what do I need to do with my income and my spending in order to climb out of this thing in the next 18 to 24 months?

If that was the only option, then you'd start getting creative. You'd go, all right, what can I do with my work? You know, what are you making right now, Dante? I do landscaping.
So all this debt came, I bought a landscape business, and I bought a bunch of equipment. So all this debt is mostly used equipment.
And so we do landscaping, but the last year or so, we went kind of down, and then winter, we do snow removal, and when there's no snow removal, we went down even some more, so that's what ended up getting us into debt. How much value does landscaping equipment hold? In other words, let's say you paid X amount of dollars for the equipment, how much can you get for it now? I could get maybe $20, $25.
They're all used, and then the other one was just like running expenses. So half of it was used equipment, half of it was running expenses.
How much equipment could you get away with not having? In other words, if you sold it, it wouldn't put you in a tough spot given your current business load. I mean, I could maybe get 20 now and maybe still move forward.
Bro, there's the answer. Without hurting the revenue for the business? Yeah.
Dude, 100% go do that. That's the 18 right there, plus some.
You don't need... Who put this idea of bankruptcy in your mind as a way to get out of this um just i just been doing my good research myself i've just been googling and trying to see what i can do and then i've like that was one option was bankruptcy like i had 25 000 in the credit card 25 000 in the line of credit and then $10,000 in the personal loan.

And then I have another, and that's $50,000.

Those $50,000 have been charged off.

And then the other $10,000 is on another credit card that I'm still currently paying.

And then the $8,000 is another credit card separately also, and I'm also paying that

down as well.

Now, you said you were using it for business expenses.

So your business wasn't profitable and you were artificially propping it up with debt?

Yeah. Was it profitable now? Where does it stand? Now it's profitable.
Yeah. What's it making every month? What's the net profit? We are a net profit.
I'm not sure net profit at the top of my head. It's roughly like 120 gross.
I like $40,000 on my head, and I have like one part-time employee. That you pay out of the $120,000 gross? Yeah.
Okay. So how do we get this business to where you can pay yourself $60,000? What must be true? I'm not sure.
No, no, no, no, no. You know the answer to that.
You may not know how you're going to do it, but what's the answer? Is it charging more? More clients? Yeah, maybe. Yeah, yeah.
Are you working 40 hours a week? How many hours are you working right now in the business? I'm working a lot, like 50, 60 hours a week. Yeah, it's more clients.
I mean, you know the answer to that. I think it's a great question that George asked, and I think you cannot let yourself cop out.
Now, I understand the emotion behind your answer. So I'm not picking on you, but I'm actually trying to encourage you that you actually know the answer.
Because if you and I went to lunch today, let me tell you who doesn't know the answer to that is me. Because I've never run a landscape business, George.

However, I've run businesses before.

And if I were to sit run a landscape business, George. However, I've run businesses

before. And if I were to sit with you long enough, Dante, I then would be able to answer the question, true or false? True.
If I understood your business the way you understand it, I could figure it out. And so there, I want to make sure that the mindset right now is, all right, I started out in this deal.
I got over my skis a little bit, didn't have the business with all the equipment, went through downturns. By the way, that's the nature of business.
I don't care what it is. Okay.
And so you've learned a lot, but you've got to make sure that you've got a mindset right now that you are not a victim. And so, George, I don't know why we're not talking about selling this equipment.

We just brushed right past this. That, to me, would be a resetting of the business.
And then going forward, we're going to cut up these cards. We're not going to put a dime on credit for this business or in our personal life.
Can you draw a line in the sand today and say I'm done? Yeah. You know what I would do? If he's got $20,000 worth of equipment and he owes $18,000, I would pay off the credit cards, cut them up, take the $2,000, and that becomes the retained earnings that we teach in Entree Leadership.
And let's get that part going. Let's go, we've got at least $2,000.
Our goal is to not touch that unless it is an absolute four-alarm fire emergency,

and I'm going to build on that $2,000 and have a goal to have $20,000 in the bank

and then have a goal of $50,000.

That's how you build a business.

You go one month at a time, and you take everything that you've learned to this point,

and you go, okay, now I know actually how I'm going to increase revenue. And I'm going to keep the revenue in the form of retained earnings and then paying yourself more, as George was saying.
And in your personal life and in your business life, here's the number you want to focus on is margin. It's the gap between what you're taking in and what's going out.
So in your personal life today, what are your monthly expenses? Probably about $4,000 a month. Well, you just told me you're making $40,000 a year, which means you're in the hole by $8,000.
Yeah. That's why these all your credit cards are the way they are.
So here's one lesson. We got to go, what is causing us to spend $4,000 a month? If that's cost of living, we need to find a different place to live.
We need to get a roommate. If it's eating out, we need to cut off that whole piece and go, we're going to meal prep.
It's going to be rice and beans for the next few months, maybe a year or two. So you're going to do an audit.
I'm going to help you with this by giving you our budgeting app called EveryDollar. And you're going to list out your income for the month, list out every single expense, and then see where you actually stand.
And if you don't like what you see, change it. I got to spend less.
I got to make more. Because here's the math on this.
Instead of filing bankruptcy, what if you made a goal to say, I'm going to be debt-free in two years? I'm going to sell 20 grand worth of equipment. That'll get me out, right? Now we're down to 48 grand in debt? Yeah.
So that's another question. That's charged off already.
What can I do with that? Well, you're going to need to settle eventually, right, with the creditors? Yeah. So they're going to be coming for you.
I'd be proactive in saying, hey, I'm trying to figure out a way to get this paid off. It's going to go into your debt snowball.
And maybe a year from now, they're willing to settle for, you know, 30 grand instead of 50. We don't know.
It may not be new enough. You may need to

pay the full 50, but this is not going to go away. This is going to take you busting your butt

two grand a month toward the debt. You're debt free in two years.
That's the math on it. If you

do what Ken and I said, so bankruptcy is not the only option. You've got a ways to go.
Call us back.

If you need help, hang on the line, we'll send you every dollar. This is The Ramsey Show.
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Brentwood, Tennessee 37027. Welcome back to the Ramsey Show.
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Or click the link in the show notes if you're on podcast or YouTube. What's a recommended snack for that? Since people can watch that in the comfort of their own home? You kind of know the content.
We went deep into the cookie jar at the event. And so I'm feeling it's going to be a cookie kind of evening.
Yeah. You know, kind of a comfort food.
Yeah. And that's in March.
You're kind of just like, get me to spring already. Yeah.
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Thanks for thinking of us, Ken. Well, I'm always thinking of the people i've been told i love it well let's be a men of the people and let's go out to christy and see if we can be of service yeah in grand junction colorado what's going on christy hey hey how can ken and i help so i am wanting to buy a new car I want to be financially able to buy a house.

And. so I am wanting to buy a new car I want to be financially able to buy a house and I am also needing to get out of debt so I have about seven thousand dollars in debt from school loans I just recently graduated with an associate's degree and so I've been working a lot.
I also have a four-year-old. I'm a single mom and I make roughly $2,000 a month and by the end of the month, I'm left with maybe like $100 to $80 to do things that I need to do like get an oil change and buy clothes and stuff like that and I'm just really struggling financially and I'm done.
I don't want to be this way, and I don't want to do this the rest of my life. Love it.
Christy, that's a great place to be. You know, being done is an awesome place to be.
Now, I know it doesn't feel that way, but George, can I get an amen on that? Oh, absolutely. So we can help.
So, Christy, what are you doing for your job? I am a medical assistant. Okay, and you're making what per hour? Nineteen.
Uh-huh. And what did you get your associate's degree in? Science.
My associate's in applied science. And what was the purpose of that? What were you thinking? What are you aiming towards? What are you thinking about? The original plan was to get my associate's degree to help me get a foot into the door for getting my bachelor's in nursing.
Nursing is very competitive, and so having that on my record makes me look a little better, I guess, than most people applying. Did you want to do nursing? So you want to be...
Yeah. Okay.
So if we could fast forward your life, you're a nurse right now. Okay.
Right? I'm asking. That's what you want.
What kind of nurse? Do you have any idea? I eventually would like to get my master's in OBGYN and become a midwife, but that's like four years down the line. Okay, but let's stay.
Yeah, I love that. No, I love it.
But if we could be a nurse today, you would be a nurse, a labor delivery nurse? Yeah. Okay, great.
It's really important that you visualize that and write that down. So the question becomes, how much money and time is it going to take to get the other two years so that you get the nursing degree and you're ready to go? To get my master's, it would probably be another two to three years.
No, no. You don't need the master's to become a nurse.
I'm asking, what is it going to take for you to be qualified to be a labor-delivering nurse? I'm not sure. Okay.
Hey, fun homework assignment number one. You got it? You started this call.
I'm done. So before you lay your head on the pillow tonight, you need to know the answer to how many more years of college do I need to get a nursing degree? The second thing you need to know before you lay down your head tonight is, in your area, where are all the institutions, like a list of the schools that have nursing programs? If there are some online programs that will help you get a certain amount of, I mean, I don't know.
I want you literally to have a list that if George and I knocked on your door tomorrow morning and we said, Christy, what are our options in the future to get that nursing degree? You could hand us a piece of paper. I go, there it is, George, right there.
And we would say, okay, great. And it has the cost.
It's really important for someone who's in your position that's really frustrated with where you are in life to have a clear picture of what it would actually take to do the thing that you actually want to do because it takes away all of the fear. Right now, you're in an emotional state that is probably frustrated and intimidated by what it takes to get where you want to go.
Is that true? Yeah, a little bit. And I understand your question a little bit.
So to get my nursing degree, I would need two more years. That's what I thought.
Two years of the prerequisite courses. That's what I thought.
So two more years of school. I'm kind of just waiting.
Great. How much money do we need to complete that two years worth of coursework? So I signed up for FAFSA, which here in Colorado is a program that you can sign up for, and it signs you up for every single scholarship grant, anything that you can get.
Perfect. So I think that I could get enough scholarship money to pay for my entire schooling, seeing as how I'm a four-year-old and I'm a single mom.

Christy.

I think that I'll be okay there.

Christy.

But until then, I'm like, okay.

That's awesome news.

So here's the deal.

I want to hand it over to George to kind of pour through your expenses because I think you've got to do some work there too.

But here's what I want to tell you.

I want you to aggressively be looking for something that's paying you $25, $30 an hour. Okay? Okay.
Because it doesn't matter what you're doing now. It doesn't even need to be the medical assistant or medical – like, it's anything anywhere that pays you more money than you're making right now.
And the reason is to create some margin. Okay? And then George is going to talk you through paying off that $7,000, which is going to also free up more money.
We got to get you a raise through income and expenses. George, tell her how we're going to do that.
So Christy, my first question is why are you paying 40% in taxes and deductions? Because you told me you're making 19 an hour. It's about 40 grand a year, but you're only taking $40,000 a year.
But you're only taking home $24,000 a year.

Are you investing right now? No. So I am trying to pay back my school loans.
I have $7,000 in debt in school loans. I just recently bought a phone, too, because my old one broke.
And so that's about $800 to pay that off. And then my son is in school and I'm paying $300 a month for that.
And I'm also on scholarships. So that is $300 with scholarships for paying for my son's school.
And then just normal, I got food, rent. So when you said take-home pay, this was after all of those other expenses were paid,

your debt payment for the phone.

Okay, got it.

That makes a lot more sense.

Yep.

So you actually have more margin than you think, but you're saying after all that's paid,

I have a hundred bucks extra I could throw at the debt.

It's not going to make a debt.

And that's where Ken's advice comes into play.

Think about it this way.

For every extra dollar an hour you can go make, that's two grand a year at 40 hours a week.

So if you can go make 25 an hour, you're going to get a $10,000 raise. Can you get out of debt a little easier if you had an extra 10 grand a year laying around? Oh, yeah.
Exactly. And this might be a side hustle.
Yeah, you might do your 40 hours and then do another 10 hours doing this. I don't know your family life and I want to respect that, but this is going to be some sacrifice and hustle.
But to Ken's point, if we can get you out of the student loan debt, free up a payment, get your emergency funds, you never have to go into debt again. Now we have a foundation to where we can step forward from a place of strength into that next piece of education.
And then once you're a nurse, goodness gracious, sky's the limit. Yeah.
And now you're going to cashflow the master's degree. That's your next goal.
and house love that for you that's going to have to be on the back burner down the line i wish we could do it all at once christy but we need with the car i am kind of in dire need of a new car my car right now let's pause everything and stack up money for this car and then we'll push play on the debt snowball this Ramsey Show. You've spent years trying to get everything just right for your family.
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welcome back to the ramsey show. I'm Ramsey personality, George Camel joined by bestselling author, Ken Coleman.
Hey, George, we are here. Ken, we're live.
We're doing it. Call us up.
888-825-5225. And you'll be, you'll be blessed to talk to Ken today.
I'll tell you that much. It's blessing.
I don't know if I, boy, you're really setting me up there. Blessed? We'll see what Grant thinks.
He's in Chicago. Boy, now I got to bless Grant.
Grant, how you doing? All right. Hey, George.
Hey, Ken. Thanks for taking my call, guys.
I'm really excited to say that right before Christmas, I paid off my house. So I'm officially on babysitter.
Woo! Way to go. Strong golf clap for that one right there, Grant.
You got kids? I got six kids ranging from 12 years old all the way down to 10 months. I got eight of us living in this beautiful paid off house.
My question is, I know I could save up for another eight years and pay cash for a bigger, better house. But by then, my kids are going to start graduating.
They're going to move out. Then you'll be downsizing.
Would it ever make sense under the Ramsey plan to upgrade to a bigger house with another mortgage? Or is it better to just stick drinking this debt-free Kool-Aid and eventually pay cash? Well, in a perfect world, if Dave was on air, he'd say, well, I wouldn't want you going back into debt. But also, it's not a sin to revert back to baby step six for a few years and knock out

the mortgage. And so as long as you're doing it, you know, 15 year fixed rate, the payments no more

than a quarter of your take home pay. And with all the hundred percent equity you have in the

house, roll that into the next one, plus any savings and try to minimize the mortgage and

then knock it out quickly. So what are we talking? What would it take for you guys to upgrade to a home? That's like right we got six kids we got room for all eight of us with room to spare for all eight of us it look it looks like um if if we hit something in the four hundred thousand dollar range uh based off of our location uh we we'd be stepping up from 1,800 square feet to somewhere approaching

3,000 square feet, like 2,800, 2,900.

How many bedrooms?

That's what our market's looking like.

Four bedrooms at least.

That's what we've got right now.

There's tiny bedrooms.

But do you need five bedrooms, six bedrooms?

Well, you got multiple boys?

Nope.

One boy.

The rest are lovely girls. Oh, I was going to say, because if it was mostly boys, you just pile them on top of each other.
They don't care. They live like rats anyway.
I got two boys. I can say that.
I can make them live under a bridge. Yeah.
Yeah, I literally was going to go that direction. But the girl thing, I only have one girl, and I don't know.
I feel like I'm on thin ice if I recommend that. Oh you know.
But I think you're still going, all right, for the house that we would want, what's your current house worth? Current house is worth $270,000. $270,000.
And let's say the next house was $450,000, right? And let's say you want to do that. How long do you have? Is this a year from now? What's the urgency? The urgency was no urgency.
I'm living my best life now. It's just close quarters.
You're very cheery for a guy with six kids. I'll be honest with you.
How do you have time to make this call? I got no payments. Okay, that's good.
Yeah, but you also don't have any sleep either. Oh, here's a question America wants to know.
I know this. Are you done having kids, or are there more on the way? No, no.
If the Lord wants me to have more kids, I'll have some more. God bless the Catholics.
There we go. I'm kidding.
I'm kidding. Thank you, Grant, for that.
You just dropped Catholicism on him. I just thought maybe, you know, they're like, let's have more babies.
More and more. But I'm happy for you guys.
He's living his best life. So you think there's a possibility that more kids are coming? Well, everybody tells me, like, you know what causes that, right? And I say, yeah, and I'm not willing to give it up.
Well, you've got a 10-month-old and a 12-year-old. You're getting partial information.
No one says you've got to give it up, but there are other things you can do. Maybe you should seek a family planner as a side to this call.
Ken will give you advice off-air that one. Hang on the line.
I'll give you a couple of tips when we go to commercial break. Thank you for that.
All right, Grant, let's talk. He's not willing to give it up.
That's the best thing I've heard in a long time. You're in Baby Step 7.
Do you guys have a bunch of money in savings outside of your emergency fund? So not a bunch of money in savings. Why? Because I got a little gazelle intense on paying off the house there at the end.
I have three to six months of expenses because I have no expenses. But yeah, so savings are a little low right now.
I've got $6,000 in the bank. How much could you save up in 12 months as a kind of a down payment plus your equity? Plus equity, I would be approaching 285.
So you could save up, you're saying 15 grand in the next 12 months? I think so. Okay.
So just set a goal and you're married, you have a wife? I am. Okay.
You didn't know the answer to that? You never know. I thought we had covered that earlier.
But I would set a goal with her and say, hey, here's what we're wanting to do. We want to upgrade about a year from now.
Here's how much I think we can save. We're going to take all of our equity plus the savings and throw it at the next one.
And then there likely will be a gap of, let's say, $50,000 to $100,000. And here's how we're going to tackle that.
We're going to attack that for two years or three years, whatever it is. Just set a goal, and don't let this linger, and don't do a 30-year with as little payment as possible.
Get aggressive and get rid of it, and get back to baby step seven in no time. Yeah, yeah, yeah.
But you have Ken and I's blessing that you're not, you know, it's not going against the Ramsey plan to get another mortgage and to be temporarily in baby step six. You guys have done such a great job.
You sound like you're a young family. You've got a 10 month old.
How old are you two? Yeah, I'm 36. Amazing.
And so if we say, hey, by 40, we're going to be debt free again, back in baby step seven, the house will appreciate. And so I would go down that path.
That's a lot of kids to bunk in an 1,800-square-foot helmet. He's a better man than I, I tell you.

You'd be out of there?

Well, I reached my max capacity as a father at three.

I readily admit that.

I'm glad we have three.

I do think people are hardwired for a certain number.

There's no question.

That guy right there was born and created to father a lot of kids.

He's very, very bubbly. A very positive young man.

I'm a curmudgeon with one child.

No, you're a curmudgeon, period.

Without children.

Right. We were hoping that your sweet little princess knocked off some of the mudging.

She has. She brings me joy.

Yeah, she's a sweet girl.

Wow, we got through that one, Ken. Let's move on to Federico.
Just down the road in Nashville. What's going on, Federico? How's it going, guys? How can we help? Big fan of the show, just by the way.
Thank you. Dave Ramsey in high school, so it's been a little while.
Yeah, so my situation, I'm 23. I'm recently graduated college out of Middle Tennessee University, and debt- free.
I was able to pay it out of pocket, uh, between some, what I was making and scholarships and stuff. Um, so yeah, I have my degree in engineering and I started being a, in May, I started as a NASCAR engineer for, uh, uh, the number 25 truck.
How about that? That's really cool. Yeah.
Was. Was that a dream of yours? Yeah, pretty fun, Joe.
I'm sorry? Was that a dream of yours? Yeah, so I've always been in the automotive field or whatnot. I used to be a technician, and I mean, now that I have my degree, being able to use it for NASCAR, I mean, it's definitely pretty cool.
Oh, yeah, you can write your ticket. I've always watched it on the TV.
Yeah. Good for you, man.
Yeah. That's great.
So what's your question? Yeah, so downside, it is a 1099. It's my first year ever being on 1099.
I've been on W-2 since I was 15. With this being said, I was able to get a lot of money from not having any debt.
And I was able to save $15,000 on my savings. I had about $3,000 invested in dividends yielding stocks and the S&P 500.
But with that $5,000, that big chunk of money, I didn't want the, in better words, I didn't want the government to take it right. I didn't want to just sit in there and not compounding any interest or anything.
So my big question was, should I invest into maxing out my 2024 IRA, making that a deductible for last year? You could. I don't think it's going to be that much of a game changer.
I mean, and if you did that in a Roth IRA, you wouldn't be able to

get a deduction on your taxes because you've already paid taxes. It's going to grow tax deferred and you can withdraw it tax free and all that.
So I don't think it's worth doing it for the tax deduction. I would do it because of where you're at in the baby steps, which is if you're debt free with an emergency fund, invest 15% of your income.
And because you don't have a traditional retirement plan, the Roth IRA would be a great place to do that.

Okay.

So I do believe, so I have my fidelity, I believe it's a traditional IRA. And I was reading up that you can, if your employer doesn't give you retirement, you can deduct up to a hundred percent of it, which is 7,000 for one tax period.
That's on the traditional side.

Yes. And I'm saying if I were you, I'd do Roth side.
I wouldn't do it for the taxes. I'd pay whatever taxes are owed.
And I'd rather be tax free. At your age, man, that's all going to grow

tax free till retirement. So that's what I would do personally.
But it's a great point. You can

still max out your Roth IRA for 2024, people, until tax day. So get to it.
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May not be available in all states. Today's question comes from Maria in Connecticut.
I recently received my license to practice architecture. I'll be having a conversation soon with the management at my current job about a new role and the responsibilities that come with it.
I also suspect that with those responsibilities will come a pay increase. My employer has always been generous.
However, I would like to go into that meeting with an idea of what a fair salary looks like. I understand there are nuances to salary, such as your years of experience, geographical location, and specialty.
I want to manage my expectations of what their offer might be so that I can be grateful to my employer if it's generous. Oh, that's fun.
If it's generous. I want to be grateful if it's generous.
On the other hand, here's the other one. If I'm offered less than expected, I want to be prepared to find out why, prove my value, and prove my value.
Where can I find accurate salary data to know what FAIR is? Well, there's no Bible on this. So let's start with that.
There's no one source. There are multiple sources.
I would be checking job sites. And, again, I'm not going to say names because I'm not endorsing.
But you can go look and try to get a range with research. You can also, I would consult LinkedIn, you know, reach out to people that, you know, have similar experience.
There are ways to get a range. And what you want to do is get a range.
And you already laid out in your question, Maria, what we're looking at here. Geographic region, you start with that because that's very, very different.
You know what region you're in. You look at years of experience, qualifications, et cetera, et cetera.
And because this is a new qualification that you will be getting, you are going to be at the bottom rung of the experience ladder. And so you've got to take that into account.
So I think you've got enough markers to be able to do pretty good research and have an idea of the range of what you want. But do not lose sight of the fact that this employer has, by your words, always been very generous to you.
And this is an opportunity to make a nice pivot. And even if it's not exactly what you want, you can't get lost in the number being absolutely ideal.
You have focus george on the fact that you've made the switch and now you're in the line of work you want to be in and you got a chance to get experience which sets you up for your future so mindset and prioritizing your focus is the key here on how to handle this conversation going forward yeah to your point, Ken, the initial number is less important to me. It's more about how quality is the leadership at this company? What does a growth track look like in the role that I'm in? That's what I'm more interested in versus what am I making day one when I just got my license? Right.
And she knows these folks. She feels valued by them, it appears.
So that's a pretty good situation to be able to make that pivot yeah but i think having a range in your mind is good it's not going to be thirty thousand dollars it's not going to be three hundred thousand dollars so having a range is good i wouldn't plant on one specific number and if it's a dollar less i'm gonna leave yeah that feels uh unhealthy i agree with you there all right let's go out to the phones. Thomas is in Sacramento up next.
What's going on, Thomas? Hello. How's it going? Great.
How can we help? So my question is my wife recent, not recently, but a couple of years ago was diagnosed with cancer and had her had a hysterectomy. And so we're trying to have a surrogacy to have a biological child and we're just trying to find out the best smartest way to get that much cash because it's around it depends on how we do it but like 80 to 100k um and so we have like 40 saved up but um yeah i just don't know if we should sell our stuff like our house like our other house what do you mean what do you mean by other house tell us about an investment property she well she's we were both in the military and then i got out and then she piece moved so now we live live in California.
So our old house in Arkansas, we just rented it out at the time. What's it worth and what do you owe on it? We owe like $170 and Zillow says like $270.
I think we just found our answer, man. There's the answer.
I think this baby trumps having an investment property. Are you guys going to be financially okay losing the rental income? Yeah.
I mean, we only make like a hundred bucks after because we don't charge that much rent. Oh, man.
But the other issue, too, is they're going to kick her out of the military because the cancer has reoccurred now couple of times. So then we're losing, she's primary bet breadwinner.
Um, they just medically separate, like they look at her and go, well, she's can't deploy. She can't do her.
Um, she can't do her job. I mean, she could still do her job, but she can't deploy.
So they're going to medically separate her. Essentially, we'll get to keep the health insurance.

That's good.

And is there any income that will still come in?

Yeah, she, we don't know exactly how much she'll get VA disability, but they won't give us that rating until kind of the final steps. Like that's like right before they do the deed.
They pretty much tell her, okay, you're going to get this. But we're estimating, I mean, with cancer, she should get 100%, but you can never be too certain.
So what would your income need to go to to make you feel comfortable after all of this? We've already figured out how to fund the... Yeahacy.
Yeah, I would have told you to sell this house even if this wasn't the case. I agree.

Just to not be a long-distance landlord and be done with it. So we have one thing solved.
Sell it, take all the profits, and use it to fund the surrogacy. You've already got $40,000 in the bank,

and so let's say you walk with, what did we say? You said it was worth, what, $280,000, you said?

$270,000. I mean, I take Zillow with a grain of salt.
It could be way more than that. I feel like it's over on Zillow personally, but I mean, I don't know much.
You still stand to walk with about $100,000 or $80,000, somewhere in that range? Something like that. Which on top of your $40,000 is more than enough to cover this.
That takes care of that. Plus an emergency fund emergency fund that's right so what kind of income would you need to how much would you need to increase your income to make you feel uh calm at night not knowing what that military number is going to play out to be that's like the big issue is i don't really know because right well sure She definitely going to lose like two.
She's going to lose like two to 3000 a month and income. But once she gets kicked out, we don't have to live where we live because, you know, we're the military is making us live here.
So what's a conservative? What's a conservative number? Can we say 36,000? Like if you increased your income by 30, if she's going to stand to lose 3000 a month, I'm being very conservative because I'm thinking ahead. I'm thinking rainy day, what's the umbrella? So what I'm asking you is, does that make sense? If not, give me another number.
Yeah, that sounds about right. Probably another 20 to 30, somewhere in that range that I would have to supplement to be comfortable living where we're at.
I mean, we could deal with, because we already dropped like 3,000 in savings each month right now. So, I mean, we could, you've got margin, which is fine.
Yeah, we would be fine, but then we wouldn't be able to be, because we're already pretty tight with our money. So we would.
Don't, but don't do that. Don't accept that.
In other words, I appreciate what you're saying from a number standpoint, from an attitude standpoint, I'd prefer you go, I'm not going to deal with anything. I'm going to happen to something.
And so I'm going to go make an additional, I'd like to see you try to make an additional $2,500 a month to come up with an additional $30,000 a year. I don't care how you do it, but if it was me, George, that's what I would be doing.
I don't know if you have a different thought on that, but I would be wanting to pad my stats, if you will, on that situation. Then if it's extra and we don't need it, awesome.
We got gravy. We got the college fund started.
There's many things you can do with that extra 30 grand, but I would be trying to do that. Yeah.
I think that'll give you a lot of peace during this chaotic time is just control what you can control. Control your spending, control your income.
And we're wishing you guys the best with the surrogacy. And I mean, what a blessing to have this house that we can just sell to fix this problem.
You know, it's a beautiful problem to have. Yeah.
So, and I, again, I think this baby trumps the investment property, especially when you're essentially losing money on the deal. That baby will trump it all.
So wishing you guys the best with that. Thank you so much for the call.
That puts this hour of the Ramsey show in the books. Thank you to my co-host, Ken Coleman, everyone in the booth, keeping the show afloat and you, America, will be back before you know it.
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From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Ken Coleman, and the number to call is 888-825-5225.
Ken is the man. If you need help getting that income up, he's the man when it comes to getting your income up.

We say your income is your greatest wealth-building tool.

A lot of people are going, I got to make more.

Ken is so good at guiding you through, coaching you through,

how do you make more for your current state in the short term and in the long term.

And I'll be alongside to answer all of your money questions. Thank you, George.

Whatever else is on your mind.

I thought you were going to say something else because you were telling me I was the man. I thought it would make you feel good, too.
Well, I appreciate it. A little disappointing.
Wow. But let's help some people, shall we? That's the goal.
What do we have up first? We got Rob in Columbus, Ohio. Rob! What's going on? Hey, guys.
Hey. Hey, so I'm looking for a little guidance here.
You know, back in 1980, long before I became a Ramsey disciple, I purchased two Northwestern Mutual Whole Life policies. They have a cash value of $96,800 and a death benefit of $150 now.
I'm just looking for a little guidance on, you know, is it worth my while to cash this out, pay the taxes and reinvest it? Or is the train too far down the tracks with that significant death benefit? How old are you? 69. Okay.
And you're wondering, hey, if I cash this out, I'll get $96,000 that I could invest, minus some surrender fees? I would deduct the basis. I would probably end up, my calculation, I'd end up with about $78,600 to invest.
Okay. $78,000 that you can do what you want with.
Or you go, I'm just going to keep paying this monthly premium, and I'll'll have $150,000 death benefit, the face value of the policy.

Right, currently.

Okay.

What's your financial situation?

I'm very financially secure and no debt at all.

I mean, what does that look like?

What's your retirement look like?

$10 million in the bank?

What's the nest egg?

About 3.7. Amazing.
So you're self-insured. You don't need life insurance.
Probably not. So the question is for you, why in the world would you continue to pay that monthly premium knowing what you just told us? Well, I mean, last year, interest in dividends, it came to about $4,000.
So, and that, you know, after I paid the interest in dividends, it was just, you know, do I set that up? What are you paying per month to keep this policy going? It's $741 a year for both policies. Okay, so here's my question.
$741 in the grand scheme of things, not a huge amount of money, but it's still $741 for a benefit that you don't need. You don't need $150,000 upon your death.
You're right. So when you think about the purpose of life insurance, which, by the way, we only recommend term life insurance instead of these whole life policies because of how expensive they are and because of a whole host of other issues.

The goal is to replace your income if something should happen to you so that your loved ones won't have to grieve financially.

And so are there people in your life who rely on your income today?

No.

Okay.

Just my wife and I.

And on top of that, you're self-insured. If something happened, she's got $3.7 million sitting there, right? Correct.
So the $150,000, that's cute compared to the nest egg you've been able to build up. And so that's the point and the goal of having that term life for, you know, 15 or 25 years.
Over that time, you follow the baby steps, you pay off your house, you've been investing consistently for decades, and here you are with this policy. So if I was in your shoes, just because it would pain me to keep making this payment on this crappy product, I would be done with it.
I'd take my 78, invest it, go on vacation, do what you want with it, but I wouldn't continue paying it. Yeah.
I agree with George. You just got $78,000 wealthier.
That's the way I'd look at it. Well, we love that.
Now, if you were destitute financially, you had no nest egg, this was all the money to your name, and you were in ailing health, I'd go, okay, I'd probably just keep paying the policy because it's going to be more helpful than it is harmful. But man, you've done such a great job regardless of this crappy product that it's impressive.

There's a 25-year-old listening who says, I'd like to have $3.8 million.

What do you tell that person?

What was the key to your success?

I mean, I've worked hard.

I've invested well.

But also, I mean, I've got to give some credit to Ramsey.

I attacked my mortgage first, and I did not spend money that I didn't have. That simple.
Live on less than you make. Get rid of your debt.
The things my grandmother taught me. I mean, it was very, very, very simple, and, yeah, I've done well with it.
Yeah, good for you. That's amazing.
Thanks for the call, Rob. I'd be planning a $78,000 spend party.
I'd be like, let's get together. What do we want to do with $78,000? Divvy it up.
Have fun with that. Yeah.
You know, give a little. You know, fund kids or grandkids college fun, go on a nice vacation, upgrade a car.
And then maximize that money. Yeah.
That's living like no one else. right aaron is in youngstown ohio up next what's going on aaron

hey george how are you great how can we help so first and foremost thank you guys for taking my call it's it's such an honor to speak to you today excited um secondly um a little bit about me. I'm 22 years old.
I work for All Team Sales in Lorsal, Ohio. I make around $90,000 a year, including profit sharing.
And the only debt that I have is my mortgage. Awesome.
What's your question?

My question is, given the circumstance, how would I diversify my portfolio? Given right now, my company also does a 10% match. Amazing.
I'm only investing in the Roth right now. So are you investing 15% of your gross income regardless of match? Right now, currently, I do 15% of my income after taxes, so that would be the Roth right now.
I'm not doing anything towards the 401k. Okay.
So you've got a Roth IRA that you're contributing to? Correct. Do they have a Roth 401k option through your employer? No.
Okay. I would check in on that, but here's the strategy.
Match beats Roth beats traditional. So you're investing, you got the match, it's 100% return.
Next, do all the Roth you can. For you, that might just be the Roth IRA.
And if you still have money beyond that, in that 15%, go back to your traditional options in the 401k. And as far as diversifying, what are you invested in right now? What funds did you choose inside of your retirement plan? Right now, I'm currently doing American funds, just a couple of different growth index funds, a few different mutual funds.
I think right now I have a couple separate stocks I'm also investing in as well. I would avoid single stocks because of the risk and volatility.
I would stick to those funds that you mentioned, mutual funds, index funds. And there's four types you want to diversify across.
And it basically is like a large cap, mid cap, small cap, and international, because that'll diversify even amongst those funds. And to help you do a deep dive on this, jump onto ramsysolutions.com slash guide.
We have a free investing guide where we walk through exactly how to choose those funds. Appreciate that.
You should invite him to your live stream.

You and Dave.

Join us for the Investing Essentials live stream.

The ticket is on me, Aaron.

So hang on the line. It's on us today.
Thank you so much for the call. He may have planted that to get a free ticket.
I don't know. I'd like that move.
Appreciate that. Smart move.
This is The Ramsey Show. 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. 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.
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This is The Ramsey Show. I'm George Campbell, joined by Ken Coleman.
The number to call is 888-825-5225. Andrew's up next in Pittsburgh.
How can we help, Andrew? Hey, guys. Can you hear me? Yeah, loud and clear.
Hey, great to talk to you. I'm a huge fan.
I'm calling today about my parents. My dad has Alzheimer's, and my mom had a pretty significant stroke about four months ago so they're not able to live independently

much anymore fortunately my sister has been able to take care of them at her house most of the time and i'm taking them to their cabin on the weekends but ultimately we're looking to build them like a small residence next to me with lots of grandkids to drop in on them through the day and stuff um We're hoping to keep construction costs under $250,000 and pay cash for it.

My parents have done an awesome job at living well within their means, but we're looking at their statement from their financial advisor, and it's kind of like a mixed bag of things that don't give us a good feel for exactly how much is available or liquid, at least at this point. So I guess our question is if or how we try to consolidate all these accounts to keep it simpler and have enough money to cut checks for the home they're building in the next few months.
And I have the list for you when you're ready. Okay.
Are you like a financial power of attorney? Can you make financial decisions on their behalf? Fortunately, no. It's my sister.
She has all that responsibility right now. Okay.
And you and her are working in tandem to figure this out? Yeah, as well as my other sister, yeah. Okay.
All right. So as you dug into the numbers, what do you mean parts of it may not be liquid? Well, they have traditional IRAs, each of them.
So my mom has $150,000 in hers. My dad has $580,000 in his.
They also have a $47,000 investment. It sounds like a blend of mutual funds um both both of the iras are set up with annuities okay um they also have a pacific life it sounds like a whole life policy it shows a value of 31 000 dollars um they also have a bunch of gold, probably at least $20,000.
And they have about

$90,000 in their checking account. All right.
And you're going, okay, what's the...

And I'm intentionally leaving out the $80,000 worth of long-term care insurance coverage,

because that's a whole other nightmare that we're going through. Was this an advisor? Was this the one who got them into all this? Yes.
Oh boy. I might find a new advisor.
Yeah. They've been selling them crappy products for a long time.
Yes. All I heard was ka-ching, ka-ching, ka-ching, more commission for me, more commission for me.
Here's a whole life.

Here's an annuity.

These are some of the most complicated and expensive products that your parents honestly

didn't need with this level of wealth.

That was my initial thought also.

So I'm glad to hear you guys say that.

Neither here nor there.

But here's what I would do is figure out which of these has the least impact tax-wise.

So think through some of that tax strategy because the traditional IRAs, they haven't paid taxes on the funds. So if you just withdrew $250, no, you're going to have to pay taxes on that as they file their taxes.
So I would sell whatever else, like the gold, again, you're going to have taxes probably with anything that's not just straight liquid cash in a checking account. The cash value on the whole life, that's $31,000 worth of cash value.
Right. I might get rid of that before I dip into the retirement accounts.
You're going to need to dip into the retirement accounts anyways with a project this big. Right.
And you guys need them living on the same property with you? Yeah, I actually have a couple other lots next to me that are mine. Oh, nice.
And we're going to set them up on one of those. How many square feet is this potential build? We're trying to keep it under 1,000.
It's just going to be a single level, you know, the basics. Okay.
But you're still thinking $250,000 is what this might cost? Yeah, we have some grade to deal with on the properties. Okay.
So you've done your homework, it sounds like, this is not a wet finger in the air. No.
Okay. You're right.
Yeah. So if that's the case, I'm going to go strategically through a prioritized list of what I would liquidate first.
And I would honestly get a second opinion. And if you want one, you can jump onto ramsysolutions.com and click on trusted pros.
And you'll see a network of investment pros that we trust to help you out in this situation. And they're not going to sell you garbage products.
I can guarantee you that. So what are your thoughts, George, maybe on a tax advisor as well? Yeah.
Tax Pro as well would really help going. Here's, here's what's going to have the minimal tax impact based on what you sold, what the cost basis was, what the capital gains tax, all the nerd, nerdtron stuff, um, as you dig into this, but it sounds like your sister is going to have to be very involved too.
Right. Because she's making all these moves happen on your parents' behalf.
But the good news is the money's there. It's not going to decimate.
You're probably talking about, you know, liquidating a quarter of their nest egg to make this happen. Right.
And then what's the ongoing cost to take care of them? They need 24-hour private care? Well, we're trying to work that out. No, I don't think they do need 24-hour around-the-clock care.
But being that they'd be living next to me, we'd set them up with cameras and things like that. In case of an emergency or something, we'd be pretty handy to go over and see what's going on.
But no, we're trying to get home care to come by, at least for some of the basics. But my sister is able to handle that right now, and I think that's probably one of the problems we're running into with the long-term care insurance.
They don't want to pay because it seems like they can, you know, we can handle it. And it's, and we're just, you know.
So you're having to fight that and go, no, this is, this is something, this is exactly why we got long-term care insurance. So that if it got to this point, they could have care that was covered.
Yeah. Andrew, I would encourage you to talk with their doctors.
Also get some advice from people that may have walked this road a little bit. I'm only saying this because my brother-in-law is dealing with this right now.
And I will tell you that, unfortunately, the Alzheimer's situation is not going to get better. It's going to get worse.
And with your mother, you know, it's probably limited on what she can do depending on her symptoms post-stroke. At some point, assisted care, assisted living is something that you need to at least kick the tires on.
I just don't know how long your sister or you with cameras can, you have to think about you guys and your ability to step in and do what you need to do while your life is moving. And I, I'm not trying to be sober, but I am trying to give a bit of wisdom, just a little bit of observation I've been able to take in as my brother-in-law walks through this.
They're just not, that situation is not going to get better for your mother. Yeah.
And so my dad's actually the ones with Alzheimer's. I know, but she can't take care of him.
It's all you guys. And I'm saying before I spent $250,000 on a home, I would really look at this from multiple angles to see how long that solution that you're describing, and I understand your heart.
I'm not trying to talk you out of it. I'm just trying to give you another perspective because I've got no emotion attached to it.
But I would really be playing that out with your sisters as to how long that model is sustainable. Yeah.
I would also just come up with a game plan with whoever's involved. Is it more than just your sister involved? My other sister.
He's got two sisters. Okay.
I would get together with all three of them and go, okay, here's where we're going to lay this all out. Here's how we're going to fund this project.
Here's what the ongoing care is going to look like. Here's the priority in which we'll spend this money.
And that way everyone's on the same page. Because this is the kind of stuff that will destroy relationships.
That's right. When there's surprises, things weren't communicated.
That's right. I expected this.
I was supposed to get this. That's right.
And I want to at least savor these relationships. And that's what I'm cautioning, Andrew, is look at all of the possibilities of how this thing could go so that there are zero surprises.
Do they have a will in place? Yes. Okay, good.
Sorry you're going through this too,

Andrew. Yeah, you're carrying a lot.
Thanks. It's not going to be easy, but you're doing the right thing.
You're a good son. Very knowable thing to do, and I'm wishing your parents and your whole family the best through this process, man.
This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers.
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It's on January the 23rd. Take control of your money.
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Plus, Rachel Cruz and I will join at the end for a Q&A where you can ask your money questions live. And if that didn't sell you, here we go.
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Oh, wow. And again, this is a free live stream.
So go sign up, ramsysolutions.com slash live stream, or click the link in the description if you're listening on podcast or YouTube. You know, I was thinking about that when you said that that means four people or five people? There will be five people who win four grand each.
So 20 grand total will be given away. Five people are going to sign up for this thing for free and get a massive boost into their baby step situation.
4K is 4K. Worst case, you get information and motivation to help you get at it.
Best case, you might get a little cash to speed it up.

I'll take the odds on that one. All right.
Judy is up next in Tampa. How can we help, Judy? Hi there.
Thank you for taking my call. So I am 65 years old.
I have zero savings right now. And I wonder if I should start, instead of building up a savings account, build up an investment account, like mutual funds, as you and Ramsey speak about all the time.
Yeah, we say, you know, you can't save your way to wealth. The thing is, I'm 65, and nobody knows how long they're going to live.
So like, 65, what if in five years, you know, it's not going to move a lot.

Sure.

Well, if you're not here in five years, it won't matter.

That's true.

So you can't use that line of thinking, right?

You've got to plan for the best, you know, and hope for the best.

But, you know, once the worst happens, it really doesn't matter because this is for your long-term play.

Do you work right now?

I work part-time, yeah. I make about $1,600 a month.
Are you single, married? I live with my boyfriend. He covers most of the expenses.
Most of my income is disposable, as I said. I hate that term, but yeah.
Well, what happens if, and boy, I'm sure that's nothing but bliss between you guys. Go ahead.
Say it. Well, what happens if you guys have a breakup? He's been your sugar dad.
Yeah, yeah, yeah. How old is this young fellow? Oh, wow.
He's my age. He's your age.
And did you just slip in there that you've tried to break up with him a couple times? We had, well, yeah, yes. What happened? There was a big difference.
Well, the last time his drinking was out of control, but he had stopped drinking. And so we're back together the last two months.
Okay. He's been two months sober.
That's good. Yeah.
Okay. Yeah.
Really, really, really good. I really appreciate you sharing all this.
And I'm glad we know this now because I think it really, it's really, I'm really, really passionate now about making sure that you stop relying on him

now I'm happy you guys are back together

hopefully that sustains

but you've tried to break up with this guy

twice this is a relationship that we can

at least say has not been stable

so well it is 18 years

okay but my

point is is

you guys aren't married

there's no legal

involvement he doesn't want to marry me

Thank you. okay but my point is is uh you guys aren't married there's no right there's no legal involvement he doesn't want to marry me that's the problem i get it and you're broke but i'm saying it put he's saying it puts you in a precarious situation financially because you don't have any legal financial protections so you need to treat your finances on a home i do own a home that i am that i mean as said, as you know, I live near Tampa, so the home just got flooded.
So that put me back in the, not in a hole. I'm not in a hole.
I'm not in debt. But it wiped out any savings I had.
Are you living in his home? Right now I'm living in his home, but I was in my home. Okay.
And what's going on with your home? Now we're going to rent out my home. Oh boy, what's your home worth? Well, there's good news and there's bad news.
The good news is we bought it at $50,000, and it's probably anywhere between $200,000 and $300,000 now. Is what it's worth.
And is it paid for? Yeah. Yeah, yeah, yeah.

We bought it kind of together.

We bought it together and we paid cash for it at $50,000 during the hosting market crash.

You and your boyfriend did?

Yeah.

So what happens if you guys split and you wanted to sell it?

It's my name.

It's in my name only, only.

But you said you guys bought it together.

Well, he gave me the money. Wouldn't he want to write to some of the money? Hold on, hold on, hold on.
Hold on. I need to hear the voice.
What did he say? Give us the whole voice treatment on that. What did he say? I didn't do it very well.
Do it again. Well, here, we will get married, but you can have this house.
And now, if anything happens, you always have this house. Wow.

This is delightful. I feel like you guys

are a reality show waiting to happen.

You know, 65-year-old's

been dating 18 years.

This is interesting, George.

This is a Netflix series.

I can't force him to marry me.

No, Judy, no.

You want to hear something even worse?

Yes.

You do? Yeah.

My work? I work for him.

Thank you. Oh, Judy, no.
You want to hear something even worse? Yes. You do? Yeah.
My work? I work for him. Oh, boy.
He has a small business. You're right, Judy.
That was worse. See, George and I are on Team Judy.
Okay? We're wearing Team Judy t-shirts right now. I love that.
Good. And so you need to accept this, that you have got to get a different job, a full-time job that's not paid by this guy.
And you need, George, I want you to step in on what you think she should do at that house. I'm just wondering what's it like when you ask for a raise from your boyfriend.
That's got to be awkward. I think the last time I asked, he said, he said, okay.
I love this voice. I could talk to Judy forever.
Judy, you're nominated for my favorite caller ever. Okay, George, let's help out.
Let's answer your original question. You got to save money.
You can't save and invest until you make more. So here's the deal.
There's a foundational savings you need before you ever put a dime into investments, and that's an emergency fund. So you need three to six months of expenses.
She doesn't have any expenses. Let's pretend like you do have expenses.
So what would it be? I do have to pay. Now I'm on Medicare, so I have to pay that, and I have to pay for my phone, and I have to pay for my car insurance.
Great. Okay.
And I get a Social Security check, so that kind of eats up my Social Security check. What's your Social Security check? Well, it was $1,000, but now they take Medicare out of it, so it's a little less than that.
It's basically nothing. $875.
Okay. That's not enough for you to retire on.
So our game plan is, hey, when and if Judy can't work anymore, how is she going to survive if Sugar Daddy's not in the picture? The other stream of income I have is that we're going to rent out the house for approximately $1,300 a month. Yeah, but that's not enough to live off of.
Would all that money go to you? Yeah. He wouldn't take a dime of it.
Well, as soon as i pay back some money that i borrowed from him see do you see how this gets messy and complicated you said no the house is in my name and i went what's team judy gonna do when she doesn't have the ball you know i'll tell you right now if judy doesn't make some changes judy's gonna have to find another sugar sugar daddy. And I don't know how many of those are left, sweetheart, when you get to your age.

You know what I mean?

I mean, just keeping it real.

I don't want one.

I don't want one.

Okay, great.

So then how do we exist without a sugar daddy?

The answer is more income.

As George was taking you down the line.

Get your own savings in place.

Then you can begin investing.

And all of that is going to take more income because you don't have a ton to throw at any of this right now.

Okay.

So, like, actually, if I have $5,000 to $10,000 saved, then I can start investing?

Is that what you're saying?

Yeah, I would say $10,000 minimum.

And then you can begin investing.

And, you know, we'll send you our investing guide.

Go to ramsaysolutions.com slash guide.

And we have a whole guide showing you the right way to invest, what to invest in. You don't need to be risky.
I got that. The mid-cap, the large cap, and the small cap.
Sure. And the international mutual.
Yeah, index and mutual funds and tax advantage accounts. Probably if you don't have any money.
You need to make some money and start taking care of Judy. If this guy wants to keep...
I mean, I lost some money twice. I mean, I had some money, but...
I know.

I know, Judy, but that doesn't matter.

Like, you know, the hurricanes.

The hurricanes.

I get it.

As I said, that costs $20,000.

I know, but we're talking about the future.

George, let's put her on hold.

Christian, let's get her a free ticket to the live stream investing event.

Yeah, that'll be great.

I think that'll also help her.

Join us March 4th and 5th, Judy. You can watch with your boyfriend.
I don't know if he's going to like it, but he can be there and hang out. But he can make that voice the whole time.
It'll be great. Best impression I've heard today.
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It's here, guys.

What is?

The Ramsey Show Annual Listener Survey is now live.

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When's it going to drop?

I feel like you oversold that one.

That was a good tease.

That was the goal.

Yeah.

I'm going to drop. When's it going to drop? I feel like you oversold that one.
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We do like to know what people think, though. No, really, this is our biggest survey of the year.
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Let us know in the survey and we'll take it to heart. Oh, there we go.
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and you're listening on podcast or youtube show notes just go to the show notes it's ken's favorite place to hang out it's my favorite place to send people ken loves sending you because it's all there everything you could ever want on this show is in the show notes what was that linked it's in the show notes what was that it's in the show notes there you go i could answer every call that way i could just go next show notes next call show notes. What was that link? It's in the show notes.
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I could answer every call that way. I could just go next, show notes, next call, show notes.
I could get through a record of an amount of calls. I'm impressed.
And here's the deal. If you sign up for this survey and you actually complete it, you'll be entered to win a $500 gift card as a little thank you.
Enter to win. You're not guaranteed, but there's a chance.
Nothing says I appreciate you more than cash. Exactly.
Yeah. I don't know where the gift card's to, but I'm excited to find out.
Where would you like a gift card to, George? I'm a practical guy. If one was to get you a gift card that delighted you, where would it be to? Oh, man.
My practical says Amazon or Costco. Love it.
Because Costco, that one $500 gift card, that's one trip to Costco if you're lucky. I'll be honest.
That's a disappointing answer. Someone's buying you a gift.
Where do you want a gift card to? Pick a specific brand. Huh? Where do you want one to? I don't know.
Academy so you can get more pickleball gear? Yeah, maybe Ralph Lauren. I don't know.
J.Crew. I'm going to pick a lot of specifics.
You gave me Costco. They have everything.
What do you want? Like the show notes. Exactly.
Let's get to the phone. Raymond is up next in Portland, Oregon.
What's going on, Raymond? Hi, Ramsey. Thanks for having me.
Sure. I was wondering, would it be worth for me to finance a vehicle? My vehicle is in the shop right now.
It has a blown head gasket, and it also has a timing chain that needs to be replaced. It's going to cost me $4,000 to replace, and they can't find an engine for that vehicle because it's so old.
Okay. How old is the car? It's in 2012.
That's old? Oh, my goodness. They can't find an engine? what nope 2012 chevrolet colorado they said the engines are discontinued all right let me ask a question uh does it have to are there other chevrolet trucks or suvs where that engine is compatible they said they can find one but it's going to be a used one.
Right. But I would be barking up that tree to see what that's going to cost.
Well, the question is, you put $4,000 into this thing. At that point, what is it worth? Right now, it's probably worth $4,000.
Oh, I see. So it's worth $4,000 right now, but if you did this repair and put $4,000 into it, what would it be worth? Probably the same thing, $4,000.
That's what he said. Okay.
That changes my answer, I guess. And how much money do you have saved right now? Right now, I got $600 in savings.
I got $10,000, or no, $11,000 in retirement. Okay.
We're not going to touch retirement. So you're down to, in liquid cash, you got $600? Yeah, I got $600 in savings, and then I got just a little over, right now just right about $1,000 in checking.
Okay. So you don't even have the money to do this repair? No, I do not.
And your solution is to go finance a $25,000 car?

Well, the thing with this vehicle is I have a warranty on it.

I bought a warranty package when I bought the vehicle.

Okay. The vehicle is paid off cash.

I have the title in hand.

But I have an extended warranty on it,

and right now they're going through to verify if they will cover anything on the vehicle under that warranty. Okay, so let's play the scenario out.
Let's say they cover it, and they cover all $4,000 of the repair. Now you have a drivable $4,000 car? Right.
Okay, and we'll drive that while continuing to save up, and then once we have enough money to... What I have the problem is, is that they're going to say it's going to need a new engine, and they tell the warranty company that, where are they going to get an engine at? I don't know.
Well, they'll put a used engine in it, and you'll ride it out. Yeah, you already said, we already covered that you could get a used engine.
Okay. This isn't your forever car.

We just need to go, there's a gap right now.

You're broke.

And I would imagine the warranty is going to cover the engine, the gasket on it,

unless you didn't put oil in it.

Nope, I put oil in it.

I do my regular maintenance on it.

All right, so I've got to believe that it will be covered.

How long have you been living paycheck to paycheck, Raymond?

I've been living paycheck to paycheck since I was born. You want to try another way? Would you be open to that? I'm actually on your guys' system right now.
You're calling me asking if you can finance a $20,000 car. I don't know what system you've found out.
But the Ramsey plan would say... It's on the backside of the page.
If we have to make the repair to get by, we make it happen. We pause all of the baby steps.
We save up aggressively, sell anything we can to avoid debt. So that would be the game plan for you.
And the question is, how can I build a habit where you learn how to save up 500 bucks or a thousand bucks a month to pay cash for things versus turning to payments to solve problems. You see the difference? I hear you.
Right.

And so that's where if they can't fix it and you need to get rid of this, if it's undriveable,

then we need to go, we'll sell it for what we can, plus use any savings we can to buy a car from Facebook marketplace and whatever car we can afford in cash, that's what we drive for the time being. And the goal is that you're not doing this for very long.
It might be five months. It might be a year.
So what is your income? I make about $54,000 a year. And what other debt do you have? I have a mortgage.
I bought a house for the first time. My mortgage is $342,000.
What's the payment on that? $22.78 a month. And what's your take-home pay? Right about $4,000.
Wow. Dude, you're not even living paycheck to paycheck.
I got my mom helping. She lives with me.

She co-signed the house with me,

and she's paying her portion.

She pays me $1,000 a month for her portion.

I pay the rest.

What's the long-term game plan?

Well, you get married, kick mom out,

but she's still on the mortgage and has to pay? No, no. She just pays.
She lives with you and your wife and chips in? I'm not married. I know.
He's asking you what the long-term play is. I think I'm the only person thinking about Raymond's future.
I am. I'm just enjoying your version of it.
So I'm with you. Anyways, I'm kind of role-playing here, Raymond, to go, we've got to make different decisions.
This house was a mistake. I'm not telling you you need to go sell it tomorrow, but this is a glaring problem in your life as you try to get out of this paycheck-to-paycheck cycle.
And this car is one symptom. This is one Jenga piece in this mess.
Okay. Can you make more money? What are you doing full-time right now? I am a PL driver for Amazon.
Okay. Can you work more hours? I can, yeah.
I can request overtime. I would be doing that.
It's just you and mom at the house. I'd be working a lot if I were you.
And my car's in the shop and i'm desperate for a better car dude i'd be working as much as i can selling anything in that house that's not tied down to get out of the situation you have no other debt other than the mortgage well come back to the work part is i have a problem with that because my mom works too. She works on the days that I don't work,

and then she goes to work on the days that I don't work.

Why can't you guys work at the same time?

Did I miss something?

So I have a 13-year-old daughter.

Oh, so someone needs to be there?

Yeah, so when I'm at work, she watches her.

And then when she's at work, I watch her.

Man.

Is there a special condition?

I mean, why does the 13-year-old need to be watched?

I think we might need to figure out a child care situation

where you both can work at once.

Man, that's messy.

Hang on the line.

I'm going to send you a copy of my book, Breaking Free from Broke.

And hey, if you want to catch the rest of the Ramsey Show, we got more where that came from. Head over to the Ramsey Network app.
Just search that in your app store or click the link in the show notes. If you're on radio, stick around.
The show will continue. Hey, what's up, guys? Episode two of 90 Day Money Makeover is available right now on YouTube.
This series follows real people as they take on the challenge of transforming their finances and their lives in just 90 days. In this episode, watch as they face new obstacles, celebrate wins, and push forward on their journey.
And of course, I'll be walking alongside them every step of the way. Okay, now here's a little sneak peek of what the new episode is all about.
Me and Dara, back in November, have a new son, a baby boy. We have $87,000 in debt.
I've been in debt since I was like 18 years old. I gave birth to him.
I knew. I said, I cannot leave him with someone that I don't know.
I don't care if we're eating rice and beans, Sean, I told him. There was no going back.
When you guys called into the Ramsey show, it was like, I think that we should push them harder. Baby Jonathan being born is a wake-up call for us to finally change.
I can't go on another month. Wake up call.

You know, the next 20 years, this is important.

You know, we gotta get this right.

You want to pay off your debt.

You want to get your time back.

You want to get your home.

Nothing usurps those three.