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Normal is broke, and common sense is weird.

So, we're here to help you transform

your life from the Ramsey Network in the Fairwinds Credit Union Studio.

This

is the Ramsey Show.

I'm Ken Coleman, thrilled to be alongside my buddy, George Camill.

888-825-5225 is the phone number.

Triple-8-825-5225.

I'd love to hear from you.

We're going to have some fun today.

George has got his favorite denim jacket on, and that tells me he's ready to run.

Not fooling around today.

No.

Because when you get up in the morning and decide this is the jacket, I always know you're bringing it.

Yeah, I'm impervious to criticism when I'm wearing this denim jacket.

Very exciting.

Anderson starts us off in Atlanta, Georgia.

Anderson, how can we help?

Good afternoon, Ken.

Good afternoon, George.

So my question, thank you again for taking my call.

My question is, I'm currently on baby step two of the.

And my partner and I are on our collections, on our debt collections.

And we currently have three credit card collections that are seven months old.

One that's $3,200.

Another one that's $3,800.

And then the last one is roughly $3,750.

And we're trying to, we're not really sure how to deal with collectors.

And this is our first time doing this.

So I'm not really sure what's the best way to approach them.

Should I settle in full?

Or should I pay them all the

in full?

Or should I just settle?

And I also have I also owe the IRS 4,200.

And

I was thinking of stopping the or pausing the death snowball and knocking that out first before I go and go into collections.

So, what's the best way to approach those things?

Well, I'm glad you know your numbers.

It sounds like life was chaotic for a little while there.

What happened that got you guys to miss all the payments and going to collections and missing the tax bill?

What happened?

Yeah, so last year we were just fooling around, going just traveling, and really

looking over our money.

And

after traveling, we just we couldn't pay the credit cards.

We we funded all the traveling with the credit cards, all the expenses and going out, everything,

groceries, we funded it with the credit cards and after a couple of months we couldn't pay it and then we just let it let it ride until we couldn't pay anymore.

And then

this month they sent us

a mail saying that we owe them this amount, which is $3,200 for my lady.

And then they sent me two mails saying i owe them those amounts also last year

uh i was working at a 1099 where the construction company

and this year the the bill came through that i owe the irs 4 2200 because you weren't setting aside money for taxes exactly okay exactly i was just spending it because i didn't really know how to how to manage that money because it was just I didn't know I had to set aside 25% until the year ended.

And I'm like, oh, shoot.

And that's just what happened.

And now I don't have $4,200.

So I'm trying to knock it out.

Yeah.

Well, you're right.

The IRS debt is going to come first.

Okay.

So I would just, you know, if it's in collections, there's no payments, just leave it.

You haven't been paying it anyways.

Let's leave that alone and just stack up that $4,200 to get Uncle Sam off our back ASAP.

How quickly can you do that if you do nothing else, you and your partner, you're not doing anything except keeping the lights on and paying the IRS?

We will probably, we'll probably knock it out this Friday once we get paid.

Amazing.

Okay, good.

Then once all that's done, you can start talking to the collection agencies and you can try to settle.

Now, here's the thing.

I'm a fan of having integrity and going, I signed on the dotted line.

I went $3,200 into debt to go on this trip.

I'm going to pay the $3,200.

If the debt is old enough and they're willing to settle, you might shave off some money there.

But seven months is not an incredibly

long amount of time.

So you're probably on the hook for what you owe.

Okay.

In that case, I'd start not, you know, be honest with them.

Call them and say, hey, listen, I don't have the money now.

Here's what I can do.

And here's when I will have the money.

Are you willing to settle in full for, say, $3,000?

And never give them access to your checking account.

Okay.

So you can do like a money order, a cashier's check, but don't just give them direct access to your account because they will take the money.

All right.

That's all you got to do, man.

It's not fun.

And part of it is just being in denial about it.

So just start tackling them, get the IRS one knocked out, out, and then you can kind of debt snowball the collections as they go and see who's willing to settle.

And again, your goal for the next six to 12 months is just knocking out these debts and then getting your emergency fund in place and never doing any of this again.

Thanks for the call.

Anderson, let's go to Sam and Casper Wyoming.

Sam, how can we help?

Hey, guys, thanks for taking my call.

I'm a big fan.

Thank you.

What's going on?

Yeah, so I'm going to buy a truck now, and I'm sort of stuck between a rock and a hard place trying to decide how much to spend.

You know,

I'm a fisherman.

I make good money and I've done a good job saving.

But I'm trying to figure out

between spending $35,000, $40,000 on a truck or, you know,

something a little older, something with a little bit more miles.

What's your $20,000?

What's your income?

So

as a fisherman, it's variable, which is kind of making it a little bit hard for me to do it.

You're a full-time fisherman?

Yes.

Okay.

In Wyoming?

No, that's where I spend my shoulder season.

Okay.

I had to ask.

I had to ask.

Yeah.

Okay.

Well,

give us, how long have you been a fisherman

and then what have you made kind of on average so that we can pin down a number?

Because that's going to dictate our answer.

Yeah.

So

on average, I've been a fisherman about five years now.

Okay.

And of course, it's a boom and bust industry, but typically in the close to $100,000 range.

Of course, self-employed, so you've got all those taxes to deal with.

All right, George, tell me about our formula.

All right, so we've got a formula.

George, walk him through this.

So the goal here is we're going to pay cash, and we're going to make sure that everything in our life with wheels and motors doesn't add up to more than half our annual income.

So is this the only thing in your life?

Are there other ⁇ I mean, you've got a boat involved.

Now that's more for business.

Yes, so I'm actually not the owner.

I'm just a hand on deck.

Okay.

So you don't own a boat?

So So what do you need the truck for?

Now, if you're not hauling up?

Yeah, I've got no other debts.

So I need a truck really, because as I'm thinking through this, I'm sort of at the tail end of my career in that, you know, fishing becomes a hard job to do as you get older.

And as I'm sort of planning through my next life steps, I'm thinking something, you know, along the lines of,

you know, contracting or building or it seems like everything else is going to be a lot of fun.

What's the timeline?

All right, sure.

So, what's the timeline for making that transition?

Uh, I would say definitely within the next by the time I'm 30.

How old are you now?

I'm 27.

Okay.

You're already on the cusp of retirement?

Well, from fishing.

Is it?

I mean, no, see, be careful, George.

You're going to get in trouble.

You've not watched all these shows that I've watched, all these fishing shows.

I watch these shows,

and it's hard work.

Let me rephrase, sorry, let me rephrase not retirement by any means.

No.

Retirement from fishing.

Yeah, no, I got it.

I'm tracking with you.

We don't have a lot of time left.

So real quick,

what are you driving now?

Give me the 10-second answer.

That's good.

I just sold our truck, so nothing.

I don't have a vehicle.

Okay.

How much money do you have?

Yeah.

I've been able to save, you know,

I guess

like $35,000 in cash.

Does that include your emergency fund?

Yes, included.

Okay.

We got to separate those two out.

Let's get the emergency fund, then anything above and beyond that becomes the car fund money.

What's the number, George?

I'd like to see them in the 25 or less range.

Let's wait until you know what you actually need.

So, right now, I get a used older truck, probably 20k.

I was going to say to say, we don't need a truck for a business that doesn't exist for three more years.

A car, though, we need.

I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.

Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance.

We actually took a question of a lady and she had three kids, pregnant, and husband didn't have life insurance.

and I'm like I can't even imagine or even if it was opposite right if if a mom passed away there's a dad with kids and trying to figure out how am I gonna afford child care how do I how do I outsource some stuff that maybe she was doing like and it just takes the grief and the sadness of something like a sudden death to a whole new level like when you have to think through how am I gonna pay my bills how am I gonna pay next week yeah in the middle of all that grief like it's just it is it's terrible and so life insurance is the one thing especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.

Xander is the place that Winston and I actually get all of our life insurance.

And we keep re-upping it because I'm like, I just want it there.

Like there's something about that safety of knowing that you have money if something suddenly happens.

And it doesn't cost much because Xander shops among a gazillion different companies.

It doesn't cost much.

You just have to admit that someday you're not going to be here.

You got to say it out loud.

And you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place.

The cost of stinking pizza.

It really is.

So that is one thing to do to say I love you to your family.

So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance.

To get a free quote, go to 800-356-4282.

That's 800-356-4282 or go to xander.com.

Jane is up in Phoenix, Arizona.

Jane, how can we help today?

Well,

thank you so much for taking my call.

Sure.

And I have a little difference with my husband over budgeting.

Okay.

And

he, his idea of budgeting, now we are both, he's 73, I'm 66.

We're debt-free.

We have a little bit of savings and we have some money invested.

But I feel like we need to be on a dollar for dollar, you know, every dollar where it's spent budget to get us through these retirement years that are coming up because we're not really set financially to travel and do the things that I was hoping we could do in retirement.

And my husband's idea of a budget is

that you spend less than you make.

And I wrote you guys about that because I wanted an answer.

And,

you know, that's where we are.

We are debt-free I appreciate that he doesn't spend I mean neither one of us spend a lot but there's always a lot of tension over what's spent because we don't really know what's going on and I just it's a lack of clarity

yeah and he listens to your radio show he's the one that says we got to be debt-free we got to have this much money put away we got to do this before we can retire this is what Dave Ramsey says so I reached out because you're someone he listens to.

Well, but when, yeah, and I appreciate that, and I guess he's listening.

Is he in the room with you?

No.

We did set it up so he could be, but he is in his office doing something else.

That's convenient.

That is convenient.

You know,

before we dive in, I just want to know what his response is,

given the setup you just gave us, that he talks about us.

He, you know, he's like, hey, let's get debt free.

So he's on board with a good bit of it.

So when you say, I feel tension,

I feel we need to go dollar for dollar, what is his response?

He gets extremely,

I don't want to say volatile, but yeah.

I mean, he gets very, very angry with me because I won't say that spending less than what you make is

a budget.

Are you guys been married?

What is a budget?

Yeah.

How long you were?

28 years.

28 years.

28 years.

Okay.

And the reason I ask that is, what is your best guess as to why he doesn't want to do it that way?

To the point that he gets agitated.

What do you think is behind that?

You know him better than anybody.

So a little backstory.

This is a second marriage for both of us.

And Bruce lost his first wife to cancer.

And he thought he had saved up the money and they had a plan and

it was all devastated.

I, on the other hand, and the reason I'm pushing for the budget is because as a single mom and I'm a school teacher,

it was Larry Burquette back then who shared with me how to set up a budget.

A friend of ours was working with him and set me up on a budget.

And even as poor as I was on a little school teacher's income with three kids, I was able to make my bills.

And we were both, when we got married, we were both debt-free.

We have never had any debt in our 28 years of marriage, except for our house, which the current house we have paid off.

You're both frugal.

Yes, very frugal.

I'm going to make a suggestion.

I don't know if George agrees with this or not, not, but just listening to this situation,

I don't know what's behind it.

I'm not sure you do either.

I appreciate that information, but there's something emotional for him

around the idea of sitting down and going through the specifics, the details.

And I'll give some insight because I hate that.

It's just something about my spirit.

I feel like I'm a wild Mustang.

And I just how I have always been.

I don't like anybody telling me what to do.

I just really don't.

And I've had to fight that, but also to learn about it.

And so he's got to get to a place where he realizes, oh, this is why I don't like it.

And it doesn't excuse it, but it does get him to a place where he goes, I still have to do it anyway.

In other words, I don't like going to the dentist,

but I got to go do it to keep these pearly whites healthy.

All right.

So there's just, there's a trade-off on some of these things.

But I'm going to make a suggestion, George, and I want to bring you in here on this.

And I don't know what you think about this.

But based on the fact that they've been married 28 years, they're very frugal.

They do live on less than they make.

They got no debt.

And he just has an aversion.

He's the free spirit, is what we'll call him in this situation.

If you're, Jane, you're very aware of the finances, right?

You have a full picture of it.

Yes.

I'm going to suggest that you put together a budget for him.

Now, I'm not saying that's the long-term play, but I think initially, George, I'd like to see Jane come to him and go, hey, I know that this creates tension for you.

I'd love to know more why, and I don't want to do that, but this is for us.

And so I've attempted to do a budget, and I'm trying to take all the yucky, icky out of it and go, here's my first pass.

and present it to him and see how he does with that.

Because it may just be the idea of sitting down, talking it out, hashing it it out, and maybe he's an editor.

What do you think on this?

Well, we always say one person's going to make the budget, the other person's job is to mess with it and screw it up.

You know what I mean?

That's how you create some teamwork.

There needs to be some give and take here.

And so I do think showing him a budget that reflects reality that says, hey, listen, you're going to have fun if that's his holdup is that we're not going to have any fun if we're on a budget.

Put the fun money in there for him to where he gets to spend his 500 bucks a month, whatever it is.

And that way he realizes that the budget is really permission to to spend.

And I think right now he just sees the budget as, well, as long as there's money left over in the bank, we're doing okay.

And yet, you both go, well, the trip feels frivolous.

Well, how do we know it feels frivolous unless it's in the budget, right?

And then also,

have you really dug in, like Ken mentioned, to go, what's behind all this?

Is it because of baggage from the past?

Is it triggering a difficult

time for him?

That's what I, yeah, and that's the part I really don't know.

He's very private.

what is your household income

uh it's about 120 okay and that's all retirement nest egg social security

well that's his I'm still working he's on social security I still work okay and are you wanting to stop working

well

no I have a dream job I'm a principal of a practical

with 45 kids come on that's great

okay it's it's I mean my plan has always been to work till I was 70 because I know my Social Security will be higher then.

And that was kind of what we were banking on.

He has worked up until just recently.

So he was also working.

And at that point, I mean, in the last two years, we've probably put like $30,000 to $40,000 in our savings.

Now, we've spent, but then we're able to generate that much savings because we don't have any expenses.

Jane, I got to tell you, I appreciate you calling.

I don't think this is a crisis, but I do think that the concern that you have is legit.

But I will also tell you that the reason he's not wanting to do this is some type of a fear.

I guarantee it.

And I don't know that it's a massive fear, but I can't put my finger on it.

I can tell you this.

If I talked to him for five minutes, I could absolutely tell you what it is.

I really could.

Because it's a fear.

Well, he just walked out of his office.

Yeah.

He finished his Sudoku puzzle.

He's ready to talk to us.

No, he was talking to somebody.

I think this would be good.

If we can get it, we may have to hold you.

We'll put you on hold here and get this this set up.

But if he's willing, and here's the thing, I want to make sure you know this.

He needs to feel safe.

This is not an attack.

Not a gotcha.

And he needs to know that I'm like him when it comes to budgeting and the process.

I don't enjoy it.

But if you'll allow me, I think we can dig in and find out what he's afraid of and what causes the emotion.

And I think it's going to help you guys.

I think it's going to unlock something in your marriage and for your future retention.

Is he willing to do this?

Because I know we're catching him off guard.

Well,

he just heard you say the word afraid and he made a funny face I don't know would you be willing to talk with them oh about what about our budgeting and what I love him already great poor guy we're catching him right in the hallway as long as they realize I guess I'm blindsided I don't know he's not blindsided this is going to be fun and positive yeah please stay on the line we want to

deal with we'll put it put you guys on hold okay and you guys discuss it and Christian will verify this but this is not a gotcha moment we are for him this is not an attack.

But I think we can uncover as a guy who doesn't like this.

And I'll tell you what my fear is going into this.

My fear that has always made me resistant to the sit-down part is I don't want to disappoint my wife.

I am a recovering people, pleaser.

And so there it is.

I'm leading, folks.

This is not a gotcha thing.

We'll see if we can get a little breakthrough for this couple.

And if not, we'll move on.

If not, it was entertaining.

All right, so we're talking.

We'll figure it out.

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All right, so we're going to go to Jane and Bruce.

Now we're going back to Jane.

She's got Bruce and we're on Bruce's team.

Bruce, are you there?

Yes, sir.

Man, I want to tell you something.

Thank you for doing this.

This is people are going to love this.

Number one, it's going to help some dudes.

Two, I'm on, I am normally like you.

For years, I hated the budgeting process and

I just didn't want to do it.

So Jane called us and you know what she talked to us about.

So I wanted to ask you a real quick question because we know you're waiting on a service call at your house.

Don't want to miss that.

What do you think

creates tension for you?

What do you think's behind?

I have a fear behind mine, and it's a fear of disappointing Stacy, not being enough.

If the budget doesn't turn out the way I want to, we can't do it.

So I have always avoided it.

Okay, now I don't anymore, but that was my story.

And I'm trying to make you feel safe because your wife really wants to go through the budgeting process.

We encouraged her to put a budget together and let you just be the editor.

You don't have to sit there and construct it.

But

we just wanted to know, because I think it'll help you and her, do you have a sense of why it's it's a negative emotion for you when the idea is discussed?

What do you think it is?

I don't have any negative

feeling on a budget.

I budget in my head.

So far, I don't see any

problem

that has risen

of not having a budget.

Yeah, you guys have done well.

Now, to be fully transparent, Jane told us that when she brings it up that you get upset.

Well, I mean,

if she wants to have a budget, let her have a budget.

I mean, the only thing I would say

you can't, like yesterday, our car went down and it cost $1,000 to get it repaired.

So where in the budget, you know, was that?

Well, that's if you've got it.

That's in the emergency fund, right?

I know.

And we have $10,000 emergency fund.

If we

don't need

or we need more, our roof is

going to be needing replaced.

That's $20,000.

So we go to our next one, which has $100, I think, and $20,000 in it, and we take out $20,000.

So you're talking in terms of emergencies right now, but what about everyday spending?

What about the fun stuff, the vacation?

She wants to buy a thousand-dollar purse.

Are you going to raise some eyebrows at that?

No,

as long as it's

we're paying for it, there's no problem with it.

If you start taking out a savings, then I have a question about that.

Does it when you take out a savings, it needs to be something

that

is

above and beyond our needs?

Right.

And is a thousand dollar purse

a need or a want?

If it's a want.

Well, you said earlier, Bruce, you said, well, the budget's in my head.

Right.

You said the budget's in my head.

What's the problem?

And I'm going, well, Jane can't read your mind.

I feel like the picture of the budget in your head versus what's in her head are two vastly different things.

And there's invisible tension there.

Okay,

maybe she asks tension.

I don't know.

There you go.

I haven't.

So you're okay.

you're okay if she brings you a very detailed budget and says, this is my first pass at it.

And you're okay looking at it going, I don't think we need to put this over here.

I would say it over here.

You're okay going through it line by line, dollar for dollar, if she puts the first draft together?

I don't know if I've got time.

I guess I could.

I thought you were tired, Bruce.

No, I'm tired.

Oh, Oh, you're just tired.

I'm not.

He has time.

He's just exhausted.

Yeah.

I still have work to do.

You don't have five minutes, though, to look over her budget that she worked really hard on?

I looked over it

maybe

20 years ago.

Okay.

All right.

We got a 20-year-old budget.

All right.

If she wants to budget the expense for vacations, let her merchant it.

All right.

Jane, are you still with us?

Are you listening to all this, Jane?

Do we have Jane on the line as well?

Yeah, Jane is here.

Okay, what do you think about everything he just said?

Well,

I think that what he's saying and what y'all are hearing and what he's meaning are like different things.

It's a game of telephone while we're on the telephone.

Yeah, yeah.

Well, the reality is, I hear, I don't know that Bruce necessarily understands.

Like,

here was my take when we had, when I had a budget way back when,

forever ago, you put aside, let's say, $10

a month

for fun.

Okay.

You might not spend it this month.

That means then you bake it in.

You know, the next month you have like $20.

But then the third month, you might need something that's $30.

Well, because you didn't spend those first two, you have it so that at the end of the year, you end up balanced all the way across.

So that is my idea of a budget.

So, that would mean, like the car he's talking about, that was an emergency, but we would have had an automotive piece going out.

A sinking fund for vehicle maintenance and repairs to where you didn't even need to touch the emergency fund.

Exactly.

So, we wouldn't have touched that all year, but then, whoo, October, we need that money, and boom, that money goes in.

So, I think, in a way, that's what he's calling a savings, which it is, but it's not budgeted that way.

So, it's this unknown so then when i do say hey i'd like to go on this vacation well what are we going to give up in order to do that because at that moment he wants it all to be balanced and it's it's not because you're wanting to plan ahead and he goes well it either comes out of our emergency fund savings or it's not going to happen okay right and and and that's the problem is that emergency fund can be for the car but it it ends up being the vacation money which puts so much stress when there's a vacation money.

He wants some more labels on this, and he's going, well, it's just all in my head, and we'll figure it out.

And if it's in savings, that's great.

And to his credit.

I forgot to go

to service calls there.

Okay.

Service call.

All right.

Thank you so much.

I appreciate that.

Bruce, you're a good man.

You're a good man.

Work down the road.

Thank you.

Work with her.

Bye-bye.

He's got to go see the rotor rooter guys.

That was fun.

You don't want that to not happen.

You got to make that.

I get it.

Bruce is a man of priorities.

Bruce is paying everyone in the neighborhood.

He's got the car repair guy, the service call guy.

I get why he's stressed.

Jane, we're with you.

So here's the deal.

I think, having talked to Bruce, thanks for doing that, by the way.

Jane, you still with us?

Yeah.

Okay, this is great.

So

my insight in listening to Bruce is Bruce is a man of his ways.

And nobody else's ways are going to get adopted.

And he's at this point 71.

73.

Can we be honest?

And I love Bruce and I'm honoring Bruce, but there's not a lot of change in Bruce's life that's going to happen.

All right.

You're right.

I know.

He's not going to go start yoga.

It's just,

like, and I love Bruce.

Like, I would love to just throw lots of topics at Bruce.

I think Bruce would be a great podcast guest.

100%.

I think he's got a lot of salt and vinegar in him.

He is the Clint Eastwood of budgeting.

He really is.

So you're going to have to lead the horse to water.

You remember that old phrase?

You're an educator.

Yeah.

Yeah.

I think

what we already said, you got, but I would go this route.

I would pick one major item that's causing you stress, and I think it's the vacations, the trips.

Yep.

And I think, I think, okay, great.

I think you got to go.

We want to go to

Bora Bora, and it's going to cost us 15 grand.

I'm making this up.

All right.

So

you lay all of those powers of influence and persuasion that only a wife has on Bruce.

And you say, Bruce, you went on the show.

You told George and Ken.

she can budget if she wants to.

That's what he said.

I'm holding business.

And so, you know what?

You start pulling money aside.

You do the line by line.

Stick it in front of him and make him edit it.

If he doesn't edit it, then by osmosis, he approves it.

And you start putting 500 bucks, 1,000 bucks, whatever you want to a month away to Bora Bora.

And I think we lead Bruce to water, at which point Bruce drinks.

But to explain to Bruce why we should go to water, why we should have a cool cool drink, Bruce isn't having it.

He's never gonna have it.

He's too tired and he just doesn't care.

He's tired and he's got to take care of the service.

You have to care on behalf of Bruce, Jane.

That's the truth.

You got to care.

We love Bruce.

Okay, but Bruce is Bruce and you're amazing, Jane.

Thank you for that.

I think that helped a lot of coaches.

Thank you so much.

Appreciate it.

You bet.

All right.

I hope the air filters and everything get changed.

You know, the sprinklers, I mean, Bruce is on it.

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All right, folks, as you know, the Fed just cut rates for the first time all year, and the 15-year fixed mortgage rates have dropped to the lowest we've seen in 11 months.

So if you're financially ready, now's a great time to buy or sell.

And I can tell you this, if, and the rates are kind of popping around, so depending when you hear this, you know, obviously things change.

But I will tell you this.

Here's why this is a great time to buy if you're prepared.

Because if mortgage rates do drop, demand is going to increase.

People are going to get off the sidelines and that's going to drive prices back up.

So while mortgage rates, if you look at the last five years, are higher than they were.

They were at all-time lows.

And you're sitting there going, I'm just hoping I'm praying to the mortgage rate fairy.

It ain't happening.

All right, because as mortgage rates drop, you're going to see housing prices go up.

So the point here is sitting on the sideline, if you're ready, is not a great move.

And you're going to need to have a pro, a Ramsey trusted real estate agent on your team buying and selling a house, major transaction, maybe the biggest financial transaction most people ever make.

And so you want to make sure that you got a pro walking you through it.

You can find one for free at ramseysolutions.com/slash agents, ramseysolutions.com slash agents.

And by the way, if you are not sure how you're doing on the baby steps, we also have a quick quiz called Are You on Track with the Baby Steps?

Takes just a few minutes.

You'll get a personalized plan

so that you know where you are and can keep that momentum.

That's in the show notes.

Just click on the link.

Are you on track with the baby steps?

Emily is up in Dallas, Texas.

Emily, how can we help today?

Hi,

honor to speak to y'all.

My question is about, I know interest rates just dropped and are possibly expected to drop again soon.

I'm curious,

I would like to, we would like to refinance to a 15-year mortgage, but if rates don't drop below what we currently have, 5.75,

would it make sense to recast at least and just be paying less in interest

because we've put down an additional about 30 grand on our principal in the past couple of years.

Way to go.

And so you currently have a 5.75% rate on a 30-year?

Yes.

Okay.

Have you actually gotten a quote yet to see what it would be to get a 15-year?

No, I haven't.

Okay.

I played around on calculators online.

Yeah, and they can help.

If you contact our friends at Churchill Mortgage, they can run the numbers for you and show you what's called a break-even analysis to show you how long it will take you for this to make sense.

Okay.

You know, they might say, hey, you'll get a 5%, but it's going to cost you this to refinance.

So a year from now or two years from now, you will break even and then it'll begin to make sense.

And the recast isn't going to do anything except lower your payment.

It's going to keep the loan length and the terms, the interest rate.

So the way the recast will work is you make that a big, you know, lump sum payment, they lower your payment down.

But if you're following the Ramsey plan, you're knocking this mortgage out, it doesn't matter.

If it lowers it at $500, but you're throwing $500 extra versus a thousand-dollar payment, the same amount is going to principal.

Okay.

So, what is your goal right now?

Just to lower the payment or pay it off faster?

Both.

Yeah, we're newly in steps 4, 5, and 6.

And so I just stare at that mortgage payment all the time.

And it just makes me mad how high the interest is versus principal.

What's left on it?

I'm just figuring out $368.

Okay.

And are you guys in 4, 5, 6, where you're tackling the mortgage, throwing extra at it?

Yes.

Yes.

Okay.

And what's your track right now to pay it off early?

I haven't really looked into that much.

I kind of, I know I did something wrong.

I was paying extra on the principal while we were in baby step two

still,

just because I hate how high it is.

But now we're fully in 456 and just started contributing 15%.

And

so we've been paying, I've been paying $1,500 extra a month towards principal.

And we are three years into the mortgage.

Okay.

I'm so proud of you guys.

You're making great progress.

Yeah, the refinance can start to begin to make sense as these rates drop.

And so I would just get in touch with our friends at Churchill Mortgage and see what the rates are currently at.

On the 15-year, it's going to be lower than the 30-year in general.

But again, based on the timing, who knows?

But hopefully, if you can save at least a percent or more, I think the break-even will start to look a lot better.

So, best of luck to to you.

All right, real quick, imagine a whiteboard here, George, behind us.

This is what I wish we had right here in the studio.

Get a whiteboard here.

You love a whiteboard.

I do love a whiteboard.

I love a quick lesson.

I want to make sure people understand this.

Mortgage rates.

If you're trying to see what the market's doing, when Jerome Powell, who is the Fed chair, comes out and says we're going to lower the interest rate, that does not mean that your mortgage rate moves with it.

All right.

So, mortgage rates, people who set the mortgage rates, tend to follow the 10-year treasuries.

So the yield, whatever the yield is on a 10-year treasury, on our 10-year treasury, is what you're going to see rates move.

So as of today, the yield is flat.

So you're going to see mortgage rates probably hold pretty steady to where they are.

So I just wanted to, I want you to speak to that.

I want people to make sure that when you see all the news, Jerome Powell and the Feds meeting, everybody's paying attention, that does not have a direct, I mean,

it can somehow, it's related, but it is not directly related.

And there's a delay to simple.

There's generally a delay.

It's not going to happen tomorrow.

It might be 30 days, 60 days out.

And it's important to also know: a 15-year and 30-year mortgages, they also fall into different buckets.

That's correct.

In the industry, 15-years are seen as more of a short-term versus 30-year long-term.

And so it follows different treasury yields.

That's right.

So you'll see that just because the 30-year rates move doesn't mean the 15s are going to move with it.

That is correct.

That's important to note, too.

But I wanted to just crunch some numbers.

Oh, I like it.

This will be fun.

Like, they said their home value.

She said they have $368,000 left.

Is that right?

So we're going to just crunch some numbers here to show you what that would be like.

You know, let's see if we got the down payment.

All right.

So 15-year fixed with a rate of 5.5%, you're looking at $3,900

for a monthly payment.

But if rates go down to, let's say, 4.5%,

it's $3,700.

So it's about $200 in savings a month with a rate change like that.

So if you could shave off 1% with that plus interest, you could save a lot of money over the length of that loan.

But again, if you're following the Ramsey plan, you're attacking that mortgage with a vengeance, you're not going to get hit with as much interest.

You know, when I paid off my mortgage, instead of paying six figures in interest over the course of even that 15-year loan, we paid less than $10,000 because of us aggressively attacking it.

Yeah.

So, okay, so play that out.

So when people try to play that mathematics game, well, I'm not paying as much interest,

but I'm also forking out a lot of cash.

I'm playing devil's advocate here because I know you can handle that.

But I mean, let's play that out.

What's the response to that argument?

Well, generally the thinking is, well, I have a low interest on my mortgage, therefore I'm going to keep my cash invested.

Right.

Now, the chances of you having the mortgage payoff amount sitting in a savings account, slim to none.

Right.

So those people don't have that.

That's the narrative.

Exactly.

Now go look at the amount you're actually paying at interest on what's called the amortization schedule.

And you'll see that most of it is going towards interest in the beginning part of your loan.

What's beautiful about the 15-year loan is that a lot more goes to principal a whole lot faster.

So you're making way more progress, way faster when you do the 15-year fixed-rate mortgage.

So that's a beauty of it.

And plus, when you think about a 30-year loan, it's double the time, which means you're paying double the interest, except a little bit more, because generally 30-year interest rates are going to be higher than the 50-year.

So a lot of nerdery there.

I love it.

Tricky.

Let me see a question for you related to this topic.

Uh-oh.

Okay.

Okay.

Question, and then I'm going to make a statement.

Question is: What do you think the new average age in America is for a first-time homebuyer?

What do you think it is?

I'm going 32.

It is 38.

Wow.

38 years of age.

Now, before we go doom and gloom, I was thinking about this.

I heard this this morning.

This is fresh.

It's fresh.

I can tell.

Like the hot and now sign at Krispy Kreme.

I mean, I heard it this morning.

I love fresh data.

I'm sitting there listening to this in my car, and I go, you know what?

Ramsey, our new crusade ought to be just if we could abolish anything, it would be student loans.

Because I got to believe that student loans are, if not the primary factor, a major factor as to why we're seeing that age of the first-time homebuyer jump up.

Do you agree or disagree?

100%.

Think about this.

If you were debt-free out of college, making a good salary, and even had some savings in the bank, you could buy a home, the Ramsey Way, in your mid-20s, which means by the time you're 40, the thing is paid off if you do it our way with a 15-year fixed, let alone getting into your first home.

Oh, boy.

So I think the reason we're delayed, yes, the housing market, yes, the economy, but also crippling debt.

That's what I think is.

Largely due to student loans.

This is why I would get rid of the federal student loan program.

Private student loans, I would abolish it altogether.

I would actually make the universities raise their own money to pay for tuition.

Let's go.

Oh, boy, I'd change America, folks.

I think we'd see a big price drive when the government isn't backing up.

Lots of good things would happen.

Yes, sir.

Gosh, Campfire.

Coleman Camille, 26.

Who would vote?

It's better than most options at this point.

We'll win.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union Studios.

Alongside George Campbell, I'm Ken Coleman.

So excited to have you with us.

Let's go to Catherine, who's joining us in Milwaukee.

Catherine, how can we help?

Yes, good afternoon.

Thank you so much for taking my call.

It's an honor to talk with you.

My husband and I are big fans, so he listens to your show every day.

I'm going to ask a question about whether or not

if my husband can quit his second job.

We make a total of $118,000 a year.

I work very part-time as a nurse, like a couple shifts a month.

He works a full-time job as a, he just got promoted as a supervisor at a factory and then a

credit analyst at a local bank.

And we're just, he doesn't have a very good work-life balance, and it's very taxing on me.

And we have a two-year-old daughter, and

just trying to figure out a good balance to see if

he can

quit the job as a credit analyst to just have a better work-life balance.

So give us the breakdown.

So how much is he making at each job?

Sure.

So So at the supervisor job, he makes $87,000.

At the credit analyst position, it's $26,500.

And how many hours a week is he at the credit analysis or whatever that is?

Yeah,

20 hours.

In addition to the 40 he's working on the other deal?

Yes.

Is it hourly rate?

Yes.

Okay.

So what happens tactically if he walks away from the second job, making 26 grand over a course of a year?

Practically.

So

we

spend about our total spending that we spend is about $4,500 or yeah,

$4,500 a month.

We are renting.

We're saving for our house.

And if he would just work as a supervisor, it'd be about $5,000 a month.

coming in so yeah five thousand a month coming in so i mean that's that's a pretty big hit to you guys i mean obviously just the twenty six thousand alone is is over two grand a month and he's there because you guys are trying to save our house get out of debt right the whole nine yards right yeah how much debt do you have left

uh we don't have this oh we don't have any debt we just are saving for a house okay

How long would he have to work

the two jobs to help you guys get,

let me ask that differently.

If he stays in the second job, at what point will you guys have saved, how long will it take to save what you need for a house?

So right now we have about 100, 150 saved

for a down payment.

And we're just waiting for the right house.

So we're just trying to save and pay off our, once we get a house, we want to pay it off as fast as we can.

What kind of house are you guys looking at?

What's the price point?

Between

in this area, in the area that we're in,

between $350,000 and $375.

Okay.

But we're willing to go lower.

All right, so let's go back to this.

So my question was,

how long is he going to have to work this second job to hit a number where you go, this is the right number, or is it just to infinity?

Because the way you answered it was kind of like, you didn't give me an answer.

Is it when you find the right house?

Is it when you hit 200,000 in down payment savings?

Because this plays into our advice on the question that you asked, which is, can he leave?

Okay.

Yeah.

So he,

when he works the numbers, he said it would be about a year.

So it would be like next year.

And that would get you guys well over 50%

on the house that you were talking about, the price point.

Right.

So he wants to work for another year and sock that $26,000 or whatever away.

And you're going, I'm at a breaking point.

Am I understanding this right?

Yeah.

Well, I want to bring in my colleague because he's probably the tightest person I've ever met in my life.

He's so tight, he squeaks when he walks.

That's pretty tight.

It's not my shoes.

And I could see him being in this guy's shoes, whereas I'm going,

your hubs need to listen to you, and you guys are more than fine on a down payment.

George, I feel like this is suited to you.

What say you?

Well, the major problem here is that you guys never set a defined goal, right?

It was just kind of like, well, we'll just keep doing this.

And nobody really knows why anymore.

And so I think we need sort of a realignment to go, hey, we did this for a long time.

We're out of debt.

We don't need the gazelle intensity anymore.

We do want to get in a house.

We're clearly not in a rush because you're not just picking up any old house.

You want it to be the right one.

You have $150,000 saved, which is incredible.

That's an amazing down payment.

And so now I think we need to reassess and go: hey, I need you at home more.

I'm drowning over here.

You're not watching your two-year-old grow up.

Like, there's no need for this level of sacrifice at this stage of the game.

And maybe that means we compromise a bit.

Maybe you pick up two more shifts and he scales back from the part-time job so you guys can still hit a goal that you guys decide on.

But I think right now there's just no clarity, and that's that's breeding some of this tension.

That's really good.

Great analysis.

How does that sit with where you are?

Does that feel right?

I would say so.

The one thing is like, so I work as a, I'm a registered nurse, and I also have a few health concerns.

And so I'm trying to like manage myself, like manage stress management.

And so I'm trying, and my goal is to stay at home with my daughter.

And my husband

respects me for that.

Like he wants me to stay home home with her.

So it's just trying to find that balance of him being able to be home with us.

And then also me not working.

I feel like it's like

it's a hard balance.

It is.

So let's address this.

Because I'm hearing a husband who is, he's as tight as George is, super saver.

He wants to work a whole nother year to keep adding to that amount because this guy doesn't even want any kind of house payment, which we appreciate and love.

so good on him and then you're going but i want you home and then you're going but i also i want to come home full time and there's nothing wrong with that either and that's great but now i can tell you right now that stresses him out because you're bringing how much home every year through your nursing job um it's about 600 a month yeah but that's a lot of money to him

That's going to freak him.

I mean, below the surface, you coming home and him, so now we're going to one income.

And I'm just going to tell you, you guys are going to have to get on the same page emotionally.

You're going to have to be honest with each other to go, I'm worried about this.

This is what freaks me out.

You got to go, I want to live like this.

This worries me if I'm working all the time as a nurse and I'm not home.

All these things have got to get out on the same page of paper.

And we're going to have to decide, well, what does that mean?

So you may not be able to come home as soon as you want to if we want to pay the house off.

Because if he's going, I don't feel good with you coming home if we got a house payment.

I'll do what I got to do, but I got to go work.

And you go, I don't want you to work a second job.

Something's got to give, George.

And the budget will be your referee.

And I'm guessing you guys have never sat down and actually done the Every Dollar budget to look at the reality of this.

What's it going to look like when he makes 87 and that's it?

Can we make this work?

Can you do that tonight?

We can.

We can.

I think so.

You got to.

You got to.

Or you guys are coming to a fork in the road where it's not going to be pleasant.

You're both good people.

You love each other.

You got a good overall plan, but we got some tensions and some fears that have got to be addressed, or else it's going to get ugly.

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All right, Danielle is joining us in Las Vegas.

Danielle, how can we help today?

Hi.

Hi.

Thanks for taking my call.

You bet.

I'm a little nervous.

I'm sorry.

Listen, don't be nervous.

It's just me and George.

I mean, honestly, how could you be intimidated by either one of us, you know?

Hi, George.

Hi.

So,

I

have papers in the works to

by two years and eleven months so I can retire earlier for my job.

So I didn't understand.

I'm sorry.

Do you understand what she's saying?

Papers?

What do you mean by papers in two years and eleven months?

What do you what are you talking about?

So I have papers.

I just have to sign them and I can have my deferred comp that I have

rolled over to by time

so I can retire sooner.

Okay.

Okay, gotcha.

How old are you?

I'm fifty-four.

Okay.

And you're wanting to retire early?

Yeah.

How come?

So if I put it in, I'll be able to retire at 57 with 30 years in.

Okay.

So I'll be my full retirement.

Got it.

I'll be able to get my pension.

And what's that going to be?

I'm just, my pension will be $6,700 a month.

Okay.

And I don't have any debt except my house.

I bought it in 2021,

and I paid $464 for it and I owe $130 on it right now.

So I'm paying it down.

All right.

So what's your question?

I'm going to pay off before I retire.

Should I do that?

Like, I'm nervous.

Should you retire early?

Yeah.

Well, you know, that's a deeply personal question.

I got to have some more numbers.

Let's start with what are your fears if you were to retire early?

I don't know, but I'll run out of money or something.

All right.

How much money?

George is the man.

He's got his investment investment calculator.

Give us your retirement.

We know what your pension is going to be, but what do you got in retirement?

So, um, my I get my husband's pension,

and right now I'm getting three thousand a month, but in about a year it's gonna go down to um 800,

and then I'll be able to get his Social Security when I'm 60, and that's another

uh 1865 a month.

Um,

And

I have another retirement that invested in California that I have to call and check and see how much that is.

But if it's just the face value, what they show me, and it's not, you know, keeps adding up or whatever, it would be another $4.60,000 a month from that.

And then

I have my

deferred comp, which I met with my person yesterday and I ramped it up so that when the money gets taken out, it's not going to go to zero.

I'll have like $65,000 in there still.

I'm going to ramp it up so I could save more on my deferred comp.

And I have a Roth and I have a four,

I have a $357 that they match.

And right now I'm putting 5% that they match.

And then in my Roth, I'm putting 10%.

But what are your total amounts in those accounts?

In my

401k and the Roth.

Oh, it's $172,000 and I'm going to roll over like $119,000.

Okay.

I mean, it sounds like you're in pretty decent shape considering you have this pretty massive pension that's going to be there for you.

Yeah.

So financially, I don't think this is about just the numbers.

I think you know your numbers pretty well when you're going, can you live off just even if you had to live off just the pension alone, nothing else, could you do it easily and be comfortable?

And you say you're going to pay off the the mortgage before you retire.

So by your 57th birthday, no more mortgage.

Right.

Okay.

I don't think you're going to run out of money.

If that's that was the question or that was the fear.

I don't see that.

Well, I just worry about like health care and stuff because I've been like really blessed.

My whole life, I've never paid out of pocket for health care.

My company or my husband has paid for it, like over and above.

So I'm kind of worried about that.

And I want to get like

a long-term

disability.

Like, when I get really old, and so my kids don't want to take care of me, are you in good health now?

Yeah, okay.

Let's let future you worry about that with all the future retirement money that's going to be sitting there on top of Medicare.

So, I'm not as concerned about the health care piece, I'm more concerned in the meantime, in the next 20 years, what does Danielle's life look like?

Because you're you're a widow,

yes, wow, what happened?

Um, my husband committed suicide in 2020, January.

Oh, my goodness.

I'm so sorry.

So, so sad.

So, your picture of what the future looked like, I mean, just immediately shattered at that point.

Yeah, we don't even know.

What does your new picture look like?

What does Danielle's future look like

on her own?

Do you have kids all out of the house?

I just, I mean, I had a whole house full at one point.

Now they're all gone.

I just,

I just got diagnosed with ADHD and anxiety.

And so, like, and I didn't notice that I even had that until my husband passed away.

Like, it was just like a lot of things at once.

I never, I never realized I didn't wake up to an alarm clock until after he passed away because he always kissed me goodbye in the morning.

I'm so sorry.

That was really, really hard.

Yeah.

Oh, my God.

I don't hear my, I said like 12 alarms.

Yeah.

Well, the question behind all that is to go, have you actually started to dream again?

To go, what does this new picture of life look like other than, well, I just think I should retire early?

And that's all we want is we want you to have a you want we want you retiring to something and not just from something.

Right, right.

And my son, he's in the service and he's stationed in Hawaii.

He wants me to go stay out there for a few months.

And then I have three granddaughters.

And I just want to spend more time with my family.

Yeah.

Those are some great wives.

My sister lives in California.

My sister lives in California and takes care of my mom and I kind of want to help her with that.

Just a little flexibility with my time.

You're laying out a strong case?

I do my art.

Oh, you paint.

What kind of art do you do?

I just paint.

I love it.

That's one of the cheapest and best forms of therapy right there.

Yeah.

We just want to encourage you, Danielle.

You're in good shape.

You're frugal.

You're going to work a little bit longer.

Between all the numbers, I mean, George ran the numbers for you.

You know,

there's no reason for you to be fearful about your future.

I didn't think so, but I just like, my anxiety, I'm just always, I'm always in a worry word.

I get it.

Do you have a financial advisor in your corner?

I don't really,

but I just, and I have like over $100,000 in a savings and checking account.

Of course you do.

Here's what I'm telling you this for a reason.

I think this is going to be one of the most effective forms of treatment for what you're going through is to have a financial advisor sit down, go through all the accounts, help you optimize, and then go, Danielle, you're fine.

Go see your grandbabies.

Stop thinking about the money.

Yeah.

And

I want to do like a trust because I want, you know, whatever money or investments that I do because the lady I talked to yesterday about my 401k and stuff, she said, I won't have to touch it till I'm 75.

You won't have to touch it?

But I won't have to start taking money out of it.

Oh, like required minimum distributions, the RMDs on it.

Yeah.

Well, I jump on to ramseysolutions.com, Danielle.

Go to ramseysolutions.com and click on Smart Vestor Pro.

Get in touch with a financial advisor that can walk you through all this and help you think through things very clearly, very calmly, so that you don't have to think about it anymore.

I think we need to get all this out of your brain.

It's living there rent-free for far too long.

And you have bigger dreams, bigger things to worry about than your numbers.

You're young.

You're young.

So, you know, who knows what the future will be?

I feel like I'm not those sometimes.

Well, listen, you've been through a lot.

There's no doubt on that.

But interview a couple.

do two or three meetings off of that list on Ramsey Solutions and get with somebody you feel very comfortable with.

As they begin to map out your future and help you see all this, you're going to go from worrying to a lot of peace in this area of your life.

And then hopefully, that will trickle down into the other areas of your life because you've been through a lot.

Your sweet lady,

so very sorry for your loss, but I can tell you financially, you're going to be more than fine.

So, map out a future that involves family, grandbabies, all the things.

Yeah, I don't want to be like, well, it's my kids and there you go.

There you go.

While you're alive, live, you know, and

you got plenty of time and plenty of money to do that.

Thank you, Danielle.

Claire is joining us now in Knoxville, Tennessee, the home of the Tennessee volunteers.

Claire, how can we help?

Thank you so much for taking my call.

You bet.

I guess what I'm wondering is: me and my boyfriend, we currently live with my parents and are expecting our first child.

And we want to know when the correct time for us to buy a house is going to be.

When you can afford it.

And I guess I'm thinking, can we afford it?

Probably not.

People who ask that question generally side in the area of they cannot, but tell us your financial situation.

How much money

do you guys make?

Right now, he brings in,

we're just on one income right now.

He brings in $3,600 a month.

Okay.

And what does he do for a living?

He basically works for a union, but he works in construction.

Okay.

Go ahead, Jerome.

I'm just wondering, is there a growth path for him there, or is this it?

Like

he's at the top of the ladder?

No, he's not at the top of the ladder.

He's basically just begun.

He's in his second year apprenticeship, so he will be getting

pay raises throughout.

And

what's the ultimate destination?

If he is

apprenticing, where does he end up?

Eventually, I think he becomes a journeyman, and

I think he would top out around

somewhere around $40 an hour, but I haven't calculated

that.

So, why are you two living with your parents with a baby on the way?

You're not married.

Do we have a family plan here?

What's the deal?

Because one of the things we don't do is we never recommend that an unmarried couple.

I was on the show with Dave yesterday, and he made it it extremely clear, George, that marriage, if you're not married, you should not be buying a house together.

So I want to make that clear.

So what's the family plan here for you two?

Well, we want to get married and that's in the plan.

How long have you guys been together?

No.

Two years.

Well, it doesn't seem like we really want to get married.

People that want to get married go down to the courthouse and get married and do a ceremony later.

You guys are playing house in your mom and dad's house.

That's not ideal.

Yeah,

I would be fine with going down to the courthouse, but I think it's kind of

he's worried about what his family will think.

I mean, he's worried about the

optics of living with your mom and dad with a baby on the way to someone he's not married to.

I think the optics are out the window at this point of what his family thinks.

Yeah, that's not a winning scenario for him with his folks.

Yeah, and I feel like I tried to explain that to him, but he doesn't really

understand, I guess.

I think it may be deeper than that.

I hate to tell you, I know you didn't call for relationship advice,

but if his excuse is I don't like the way it's going to look, George nailed that one to the wall.

It looks way worse when you are shacking up with your girlfriend who's pregnant in her parents' house.

That doesn't say I've launched.

So

I'm not going to take any more time up on this call, but I do think this is a serious relationship conversation.

Where are we going?

And he doesn't get to kick the can down the road anymore.

You got to force this issue.

Yeah, so you think that first step before anything is just get married?

If we're talking about buying a house, yes.

Or bringing a human into this world that we're going to raise together.

I think that too.

what's the financial situation

um you guys have any debt

uh well yes he does have debt um

we

we have about

he's got a truck well see here's the thing let me let me jump in there is no we you guys aren't married There's your finances, and then there's his finances.

There's no we.

You guys aren't legally married, therefore you don't have shared finances.

So, do you have any debt in your name?

Have you co-signed anything?

Great news.

Okay.

So, you didn't co-sign on his truck?

No, no, I don't have any.

What is his truck payment?

With a warranty that he has on it, it's 77.

So, you're telling me you, okay, this is the frustrating part.

You guys can't even afford to go rent, let alone buy a house.

Exactly.

That's why they're living in the basement.

Childlike behavior to say, I I want a truck instead of create some independence for my own family.

Yeah.

What other debt does he have?

That's that.

Just the truck.

Yeah.

What does he owe on the truck?

Do you know the balance?

Yeah, it's 36.

Goodness gracious.

36 bucks.

Yeah.

Your parents would do well to kick him out of the house.

I'm serious.

He's got to grow up.

I mean, that's almost his yearly income tied up in a car that's going down in value.

Yeah.

Guarantee he plays video games too.

Guaranteed.

He's got to grow up.

He does.

He does play video games.

I knew it.

This kid should not be playing video games.

He doesn't have any time to play anything.

He's got a child on the way and he's living with his girlfriend's parents.

It's a grow-up time.

Somebody's got to have a hard conversation with him.

Because I'm going to tell you, if you were my sister, I would be freaking out right now with you going, what in the world are you doing?

This young guy who's not a grown-up is going to pull you into his mess.

So forget the house.

I hear you called about the house.

I want the true next steps if you can convince him and get on the same page would be to sell the truck, get married, get an emergency fund, and then move out and rent.

Yeah.

And do that for a year, two, three, while saving up a down payment.

And then maybe a few years from now, we can get into a house.

That's a big maybe.

That's if his income goes up drastically.

And he's got a good trade job.

That's the good news.

He's got work ethic.

He's going to work every day and showing up.

So,

would you guys suggest using, like, should he use his savings to

pay off the truck?

How much does he have?

$16,000?

Yes.

He doesn't have enough to pay it off, but he can cover the difference he's underwater.

I'm guessing the truck isn't worth $36,000.

I have no idea.

I would do some homework tonight and find out the Kelly Blue Book private party value to see what he could sell it for on his own.

Not a trade-in, but to sell it private.

And if he can get $40 for it and the loan is $36, good.

But it might be worth $32,000 and he owes $36.

Well, now he needs to pony up $4,000 to get out of this deal.

And he still needs money on top of that to buy something reasonable, used that can get him from A to B to the construction site.

Yeah.

Do you love this guy?

You want him to marry you?

Yeah.

Okay.

Well, then you need to tell him.

This is what we're doing.

And when are you due?

Actually, in a few days.

Whoa.

Oh, my goodness.

All right.

Here's the deal.

Once the baby's born, everything's healthy, hopefully, and all the things, you guys need to get married.

And well, I'm sorry, you need to get married.

I get married today, but you need to get to work.

You've got family that can watch the baby.

And if you're a young couple, as George was saying, the only thing I'm going to add to this, if you want to marry this guy, let's go get married.

Get married today.

And then we start our life together.

We're going to combine finances, which means he needs you working.

You need to work.

And you got somebody to watch the baby.

Is this forever?

No.

But it's for this season to get you guys out of your parents' house and living on your own.

You need two incomes.

You got childcare.

Do you think I should pay for child care?

No, I think I, well, I would ask my mom if they would help watch the baby.

You're living with them.

They're okay with your boyfriend living with you.

I'd crunch the numbers on what it's going to cost if they're unwilling to watch for free or you need to pay them or you need to get child care.

See what you could make to make sure it makes sense because it might cost you your entire paycheck and then it's a moot point.

Yeah, and I'm not saying that.

I'm just assuming, probably incorrectly, but I've at least had the conversation with my parents.

Yeah, they are able to watch.

Okay.

Well, then we've got to figure that part out.

But you guys need to get married if you're going to be together.

You got a name for the baby yet?

Oh.

I'm curious.

Yeah.

Yeah, we do.

It's Maggie.

Oh,

Maggie.

I love that.

Ignorant question.

Whose last name does the baby take in this case?

His.

His.

Okay.

Yeah.

I think it's time to get, I'd get married before we head to the hospital.

I would too.

Let's go down to the courthouse so we can party later.

If George or I were ordained, we'd do it here on the air.

That'd be incredible.

I think the Rainbow Show needs a ceremony.

I'd be the ring bearer the flower girl i'd be careful and you could do the music oh love it call us back we'll make it i'd marry him and throw the rice

Heather's up in Minneapolis.

Heather, how can we help today?

Hi, thank you for taking my call.

You bet.

I have a question about budgeting.

Is there ever a time in your life, or like in our life in the future, that we would stop tracking intensely with each and every dollar and just connect can

i don't know budget maybe more in large buckets

oh okay yeah i mean i think the concept of budgeting will always be there should always be there but it will get easier and more fun the more money you have and it can be more generalized so for example you might not need 17 line items and sinking funds and instead it just says shopping

you know what i mean and it might just be a little simpler man that's music to my ears yeah ken loves to hear that i have that's what i have I have an item that's just

shopping.

But right now it says Amazon, Costco, Target.

You know, it's got 17 places.

So where are you guys at financially?

So we're baby step seven.

Woo-hoo.

And probably within a couple years, we'll be able to withdraw from, start taking some money from our non-retirement investments just to kind of do some locations.

That's great.

What does your picture look like?

Can you tell us your net worth?

Yep, it's maybe just over 8 million.

Woo!

Heather!

Back to your initial question.

I think you're there.

You're pretty darn close if you aren't.

I think you're there.

I think you have that kind of margin.

Yeah, the budget now exists not to just keep you on track.

It exists to fulfill your dream and your vision for what retirement in this next season of your life looks like.

And so the better you manage it, the more you'll have to make an impact.

Maybe that's pass down wealth, maybe that's to impact your community, give to organizations you love, spend like Congress.

I mean, you can do what you want with $8 million.

It's going to be hard to outspend yourself.

So how do you go from intensely budgeting to get I mean, we did that to get where we are today to

being more

generalized categories, I guess.

What does your budget look like today?

Do you have a ton of line items?

Aaron Powell, yes, very much.

Okay.

And

whose idea was that to go, let's get very specific?

Or how long has it been like this?

It's mostly mine.

I'm the budget spreadsheet person.

So

we have lots of funds and just kind of draw from there.

And the truth is the funds, you don't need all of those funds anymore.

If you guys had, you wanted to get a new car, you could just go get a new car.

Right.

You don't need $1,000 into a car sinking fund to tell you that you have $12,000 at the end of the year.

Yeah, yeah, that's true.

Is that a good example?

Yeah, yep.

Okay.

And then for utilities, for example, instead of having everything listed out, you could probably just have one that says utilities.

And you drag the water bill in there, you drag the electricity bill in there.

And right now it says water, electric, HOA, et cetera.

Sure.

Okay.

So it's more just a brain switch for myself to

switch that to more details.

Do a budget audit and maybe with your husband and just go, hey, what areas could we simplify of this budget so when I look at it, it doesn't give me anxiety.

It just gives me joy.

And maybe you have like the margin category now of just how much extra you're going to have per month.

Because my guess is you guys have a great income.

How much do you make a month?

Well,

we're annually it's $262.

Awesome.

So is it like, you know, 15 grand drops in that account every month, give or take?

About 13,653.

Just about.

Yeah, she knows.

So, you know, this is a great example.

So what I would do is,

okay, we know all of our utilities and all the bills and grocery.

Like, you've got that down to a science.

I know you do.

So all of the basic living expenses, all of that, you can consolidate, you know, as George told you.

But once you got that number,

then anything outside of that number, again, you simplify the budget because again, you don't have to have all these funds.

So I would just, you know, super simple, like George said, but then after we've taken care of the necessities, whatever that monthly margin is that you don't have to spend, it's not going to anything to live.

That's when you start to loosen up and have some fun with that and realize we've got plenty of margin.

So let's just keep it.

Let's budget it like it's margin.

Does that make?

Does that make sense what I'm saying?

It's super simple.

Yeah.

And it'll retrain your brain over time because the more you look at that budget and the more simple it gets, the more your brain goes, oh, we're fine.

It'll be a quick glance.

Instead of a long budget meeting.

It's just like, hey, do we have any big things coming up this month that we want to do?

Right.

No?

Okay.

Cool.

Do you guys plan ahead on fun stuff?

Oh, yeah.

Yep.

Yeah.

All right.

Does anything scare you right now?

Like, what are your fears?

Like, the thing that you're like, I want to do this, but it feels frivolous.

Like, do you have a hard time spending?

What's the issue?

No,

we don't have a hard time spending.

It's just I would like to not.

I feel like I've been budgeting for so long that I would just like to just kind of loosen it up a little bit.

Sure.

Hey, how about this?

I'll gift you this.

Take a month off of budgeting.

Just take a month off.

See how it feels.

Could you do that?

Okay.

You are so powerful.

You just

gave her the gift.

You just wield that power so effortlessly.

You just told Heather, hey, hey, Heather, don't budget for a month.

I just want, it's like you've been counting calories your whole life, and I'm going, hey, just eat the meal and enjoy it and see what that's like.

Because you guys have done such a good job

to get here, and the budget was a key.

And so it's not that the budget is no longer serving you.

I just think it is taking up too much space in your head.

And so, I would like to just see you free yourself of that for a month.

What likely will happen is you'll forget after like seven days, enjoy your life, and then you'll go back to it and go, oh, I remember you.

You're a friend.

Okay.

Wow.

I tell you what, folks.

George never ceases to amaze me.

A lot of power you're wielding here.

Old dog, new tricks.

He's telling someone to not look at the budget.

I'm not going to not budget for a month.

Be careful, George.

Watch some guys.

A lot of power for one person $7 million.

It could go to your head quickly.

No, but I think you're absolutely right.

That was good.

You know what?

You were like an emperor, and then you were Mr.

Rogers, all in one house.

Oh.

Yeah.

Do things I never thought I'd be.

I'll go back for the week and I'll see that the budget is my friend.

Who's very Mr.

Rogers?

Thank you.

I love that.

By the way, we're talking about budgeting, and we have to mention the all-new every dollar.

Now, George, when we say all-new, I don't want people to think that we slapped a new logo on this.

No, actually, same logo.

Exactly.

But under the hood is all new.

Exactly.

And let's describe this because I don't think people realize this is no longer, and when we launched it, it was a great budgeting app, but it is no longer just a budgeting app.

Tell them, George.

I'm pulling mine out right now.

Oh, we still got a same great budgeting app there.

Like, you still have that tab, but there's a new tab that says today.

And so this is the personalized plan.

We're calling it the digital coach experience with a bunch of advanced features.

And what it does now is we've integrated the Ramsey plan.

We have breathed life into what once was just math and a slick budgeting app.

Now we're actually going to give you recommendations personalized to you based on where you're at, based on the information you give us, so we can skew you in the right direction, much like we would on the Ramsey show.

But now you can do this in your pocket 24-7 on your smartphone.

All you got to do is go download every dollar in the App Store or Google Play.

And what's cool is the average person is finding thousands of dollars in margin in just the first 15 minutes.

How is that possible, George?

Well, you go through the onboarding,

and just like you would on the show, you start telling us, hey, here's my income, here's the debt I have, here's the assets that I have, here's kind of what I'm willing to do, here's my goals.

Well, now we can start to shape that and go, hey, what if you did XYZ?

Are you willing to do that?

Nope.

Okay, how about this?

And so between all those recommendations, it adds up to over $3,000 in margin.

Yeah, it's crazy.

I love that.

So there you go.

Go to that.

Every dollar,

and you can get it for free in the App Store or Google Play.

And then I got to share this because,

you know,

we love what we do because we get to help real people, get to meet real people.

And one of the great things about this is we do our show in front of a live studio audience.

They're out there in the lobby, lovely group of people today from all around the country.

We get to meet them.

And we went out

just a minute ago and took some pictures.

And I don't know if the guys can zoom in on this.

Oh, please zoom in on this photo.

You've got to be watching on YouTube or Spotify.

Some young children love George's videos.

There they go.

Here's the zoom in here.

If you're on YouTube.

Perfect.

And they drew a picture of you and expressed their love and appreciation for you.

That's amazing.

This is actually a pretty good photo, but they see you without a beard.

Oh,

did you notice that?

And it's a good reminder of why I have one.

So shout out to Gideon and Ethan.

Sorry, Elliot.

Elliot and Gideon Fowler.

Appreciate you guys listening to that.

Listen, we're affecting the next generation.

You really are.

Listen, they love his videos.

I said, George, this is a high compliment.

These kids have the attention span of a squirrel on cocaine, and they're watching your videos.

This is fantastic.

I have the same brain as a 10-year-old.

That's why they love it.

You look handsome with Elka Beer.

Appreciate that.

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best.

If you're ready to learn how to make your money work for you, check out the SmartVestor program.

Smart Vestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more.

Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand.

Head to ramseysolutions.com/slash SmartVestor to get connected.

Ramsey Solutions is a paid non-client promoter of participating pros.

Learn more at ramseysolutions.com/slash smartvestor.

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio alongside George Campbell.

I'm Kim Coleman.

Glad you're with us.

Let's go to West Virginia and Eric is there.

Eric, how can we help?

Hi, yes, sir.

Sue, my question comes to my wife and I have made very poor financial decisions in the past, and we're trying to take care of that now.

But my question is, how do we get rid of vehicles when we are so upside down on them?

Because that's our biggest hurdle right now.

Okay, well, walk us through the exact details of the vehicles, what you owe, and what you could get for them in private sale.

Okay, so we'll start off with the most expensive.

It would be my wife's Jeep.

We We owe $47,000.

On a good day, high Kelly Blue Book value is $35,000.

And then my car, it's a Civic.

We owe $21,000.

On a good day, it would be $18,000 that we could get.

And then we have a motorcycle as well.

And motorcycles are weird.

It's hard to find direct value with those.

But we owe $10,000 on that.

And

I would be lucky.

I'd like to think I could get $8,000 out of it.

So we're about, if I did quick math, George, $17,000 in the hole on all three?

Okay.

Is that all of your debt?

You guys have other types?

Oh, no, we have a lot of other debt, and that's where we're trying to get on top of.

What are the total payments for these cars and motorcycle?

So the Jeep is $960,000, the Civic is $4.55,000, and the motorcycle is $3.05.

Oh, my goodness gracious.

I literally have a stomachache.

Like, right now.

I got to get 10 some tums after this.

I need some tums.

What's your household income?

About $67 a month after taxes.

Okay.

Are you guys doing any investing right now?

No.

$6,700?

Yes.

Okay.

And you got over $1,700 in payments on these vehicles.

Yes, unfortunately.

What's your rent or mortgage?

Our mortgage is $4.68 a month.

$468?

Yes.

Do you live in a trailer?

I do, yes.

Goodness gracious, man.

Your Jeep is nicer than your house.

It is.

We've, like I said, we've made really poor financial decisions and we're just trying our best to get out of it at this point.

Okay, what other debt do you have?

What's the total balance?

So total debt of everything is $209,000.

That's just consumer debt?

Well, yeah, so that includes the vehicles, the house, and then credit cards

would be $41,000.

Okay, all are just living like you're in Beverly Hills, not West Virginia in the hills.

That's for sure.

What made you guys want to turn this thing around?

Well, so

I had a security clearance and

I had, again, we've made super poor financial decisions, but I had a vehicle years ago get repossessed.

And that repossession come back up on my security clearance and with the security clearance concern

obviously that was like a slap in the face like okay we need to get our our life together here

and so that's been trying to or sorry our extra income has been trying to go towards taking care of that

and yeah so okay

Well, I'll give you the advice on the cars.

You're 17 grand underwater, so that's your magic number of how much money you need to come up with to get out of these payments.

So either you need to save up that amount or you need to get a loan from your local credit union to cover that amount.

I don't know that they're going to give it to you.

My guess is your credit shot.

It is.

It is.

And we've tried to do that and they won't work with us.

How much can you put away each month?

You know, if you cover all the bills, minimum debt payments, how much can you set aside?

So right now we're working with around $600 a month.

And like I said, we've been trying to use that towards our other debts and stuff like that in the last year.

But then, like I said, that repossession from years ago kind of came up, and that's what we've been trying to tackle at this moment.

All right.

I'm going to ask a question here.

What would it cost you to rent?

I know you're in a trailer.

Did you have a mortgage on, but what would it cost you to rent in your area?

So that's tough.

Because we've been looking at that.

The cheapest that we found is like $1,200 a month.

And, of course, we've been looking at other areas.

We've been looking at outside of our county and stuff like that.

But yeah, it's

not really found anything.

Well, what do you mean?

You looked outside your county and you didn't find anything to rent?

No, we found plenty of stuff to rent, but like $1,200 a month is far more than we can afford.

I get that.

But I mean, what about like somebody who's got a bedroom over a garage?

Have you looked at that kind of stuff, the non-traditional rentals?

Well, we have two children.

I know, but you're in a trailer that's losing value.

And where I'm going with this, George, is I don't know if you have any equity in that trailer.

So, we owe about $40,000 on the trailer.

It's a 2017.

I bought it brand new in 2017.

And

I don't think that it would be worth much more than that.

I don't know.

I don't know how I would even go about selling a trailer.

You know what I mean?

I don't know either, dude.

But you got the credit card debt and the cars.

Anything else?

And of course, the trailer.

Do you have any other debt?

Well, student loans, but that I included that in my credit card debt.

It's $11,000 in student lines.

Okay.

Well, here's the hard truth.

At this rate, if you put $600 away to get to that $17,000 amount you're underwater on, which, by the way, just lets you sell them.

It means you have no vehicle.

You have no money to put towards another vehicle.

It would take you 28 months.

And by then, those cars have dropped even more in value.

So we don't have time to play that game.

You guys are both about to be working.

80, 90 hour weeks to climb out of this.

There are no good solutions here.

That's, I mean, my wife has picked up a second job.

Because of my career now, I'm not allowed to pick up a second job.

So, you know, we're doing what we can with a little bit of a business.

What do you make?

So I bring home

about five grand, a little over five grand a month.

Can you switch careers and go work three jobs?

I can, but my, yeah, I've been in this career now for 12 years and retirement is only eight years away.

Retirement, dude, you can't even eat.

You're broke.

I understand that, but with, I mean, I'm eligible for retirement at 20 years.

And, you know, obviously I can stay in it longer than that.

I mean, let me tell you something, young man.

You called, and your response to what we're telling you

is just...

a heartbeat away from being stuck in this cycle the rest of your life.

And I was born in a small town in West Virginia.

I know that state.

Yes, sir.

I know the economic situation that you're in.

You don't want to do this to yourself.

So your response of, well, I'm in this.

This is where I'm at.

And then, but,

I mean, you, you have a full-blown crisis on your hands.

I agree.

How old are those kids?

Nine, and the other one's about to turn two.

My goodness.

Man, if you do it for nothing else, do it for those kids.

You got to bring in some more income.

This is an income issue issue right now to fix.

I don't care what the benefits are.

Because you're going to be stuck in the cycle the rest of your life if we don't make severe changes.

Well, so my career, I mean, just clarify that.

My career, I'm in the military.

And so,

you know,

I can get out of the military, but obviously I'm in a contract and I got to wait and all that kind of stuff.

Well, your wife's going to have to take the brunt of it for now.

All right.

So we get that.

So now she's got to work like crazy.

And she is.

Income is your only way out of this because we can't even get rid of these cars because of the dumpster fire situation with them being underwater.

Maybe your credit gets decent enough over time that you can get a loan from the credit union to cover the difference, plus a little bit extra.

But man, this is a no-win situation.

So sorry.

Hey, you guys, Rachel Cruz here.

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Our question of the day is sponsored by YReFi.

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Today's question comes from Hayden in Georgia.

My wife and I bring home $8,000 a month and we pay $7,500 a month on debt and living expenses.

We're $138,000 in debt between credit cards, car loans, student loans, and unpaid taxes.

How am I supposed to pay extra on the debt with only $500 a month left over that has to cover food, utilities, et cetera?

I have redone my budget and saved money where I could.

I tried selling my car, but I'm $5,000 upside down.

Should I just file bankruptcy and be done with it?

Well, if this isn't the most American question I've ever gotten.

In other countries, they'd be like, you make $8,000 a month.

You are the wealthiest person I've met.

And they go, no, no, no, no, we're broke.

We're broke.

You don't understand.

Okay, let's address this.

You said living expenses, but then you said $500 a month has to cover food, utilities, et cetera.

So that should be included in your living expenses.

Not sure why you worded it like that, because that frightens me if that doesn't even cover your food and utilities, and it's costing you $7,500 a month.

So the upside-down question, that's a simple one.

You need $5,000 either saved up from your extra cash every month or you need to get a loan from your local credit union plus enough to get you a different car to get rid of that car payment, which will definitely help.

The unpaid taxes, that's going to the top of the list.

IRS gets paid first because they are the scariest.

They can destroy your life, garnish your wages, yada, yada.

The rest of this, I'm going, we need to do a budget audit tonight, which I'm sure you guys have never done one, but go download every dollar, list out your income for the month, $8,000, list out every single expense, including your minimum payments on your debt, and then be judicious and go, what do we not need to survive?

And that becomes your new budget.

Hopefully you can shave off a whole lot right there.

And then if that doesn't solve it, you don't have enough margin, you need to go make more money.

which I know is crazy because you guys have a great income making eight grand a month.

You might need to make nine grand, 10 grand a month with some side hustles and overtime, selling stuff, whatever you got to do to get to a little more stability and find that margin.

George, my take.

No bankruptcy, though.

Don't do it.

I agree, but I'm going to tee you up.

I don't, the last line is what concerns me because I think there's millions of Americans who drop into this.

It's a mindset.

The last line is, should I just file bankruptcy and be done with it?

It is a,

if I file bankruptcy,

hey, I wipe it all clean.

I get a fresh start.

I don't think people realize what a prison bankruptcy is, George.

Let's talk about the meat and potatoes of bankruptcy.

Okay, you do it, you file for it.

Now, here's the circumstances.

Or in other words, here is

what you're going to have to deal with because you've done it.

Explain that.

Well, number one, it destroys your financial world.

So your credit is completely shot.

And again, I don't care about your credit score, but if you have a bad one, it's going to hurt every area of your finances, your insurance premiums, your ability to get a job, to rent an apartment.

All of that is affected by that.

Sustain.

And on top of that, there's two types that most people do, Chapter 7 or Chapter 11.

And, you know, one is just a repayment plan, or chapter 13, sorry, the repayment plan.

And so you're going to have to sell all your assets.

You know, you're going to have to get rid of the cars, and your student loans aren't bankruptable.

So good luck getting rid of those if that's the main thing dragging you down.

And again, it doesn't solve the problem.

What we find is most people that file bankruptcy end up doing it again if they don't change the behavior that got them there.

It's kind of like watching an episode of Hoarders, and they've just destroyed the place.

It's a dumpster, and they go, well, I guess we'll just sell the house and start over instead of going, let's clean this up.

Let's maniacally get rid of stuff, send it to the junk, clean it up.

And so bankruptcy is something we never recommend.

Obviously, famously, our CEO, Dave Ramsey, went through bankruptcy, but he had no other choice.

His back was against the wall, and he couldn't pay it off fast enough.

He was actually very close, and he couldn't pay it off fast enough to avoid it.

So it's something that we always tell people, avoid it at all costs.

Fight, fight, fight to climb out, especially when you make $8,000 a month.

You got to just reassess your life and go, what do we need to change?

Yep.

Absolutely good advice there.

Alexa is now joining us in Springfield, Michigan.

Alexa, how can we help?

Hi, guys.

Thank you so much for having me on the show.

I'm a longtime listener, big fan.

And I'm actually in Springfield, Missouri.

Oh, Missouri.

You know what?

I thought that, but I saw the MI instead of the M.O.

That's okay.

People forget about us a lot.

Not me.

It's not Ken's fault.

Not me.

He just was reading.

He was Ron Burgundy reading what was on the screen.

Do we have a president, a former president from Springfield, Missouri?

Am I right about that?

Oh, Harry Truman?

Is that right?

I may be wrong.

I know he's from Missouri, but nonetheless, trying to make you feel good.

We love Springfield.

What's going on today?

Yes.

So, my question is a shovel question.

Okay.

So, currently, I'm trying to decide between two jobs.

I'm a nurse, and I have worked at my hospital that I'm at now for 13 years.

And I've just recently moved into healthcare IT.

I'm making a decent income for my area, about $91,400 a year.

I graduated from here.

I've worked here for my entire career.

I've got a very flexible job.

I'm in office four days a week, remote one day.

I love my team.

I love my bosses.

And I also qualify for public service loan forgiveness here in May of 2026.

And that will be $24,000 forgiven.

But

recently I was not looking for a job because I qualify for PLSS so soon, but I was approached for a job for a big company.

and just decided to explore it.

Good.

And this job, yeah,

was it's fully remote.

And it would be, I would be a consultant for a product I do really believe in.

And I thought it was going to be $110,000 a year plus a 10% bonus yearly guaranteed, but I would lose that public service loan forgiveness.

The other catch is that it's 45 to 60 days a year of national travel.

Okay.

So my official offer came in on Monday,

and they offered me $115,000 a year,

a $10,000 sign-on bonus.

We like that.

And that 10% yearly bonus.

I guess it's a moral conundrum because I'm very attached to my current system that I'm in.

And I've got such a good thing going.

So I'm like, should I take this new risk and jump into something kind of more unknown

for more money?

Well, it comes down to this.

So I love this.

Great job laying it out.

And, you know, I've counseled over 10,000 people on the air on this very topic.

And it always comes down to the long term.

Where do you want to be 25, 30 years from now?

And the professional choices that you're going to be faced with,

they need to always come in through that filter.

Does this move me forward?

one way or the other.

Even a step back sometimes moves us forward.

But if the step back puts me on the path to where I want to be long term, then I'm always, always for it.

And I make financial concessions in order to be able to do that.

So in this situation, when you say you're morally tied to your system, that's a curious statement.

What do you mean morally tied?

I, you know, I've worked here for so long and we are a pretty small community.

I mean, we're the biggest little town kind of in Missouri.

All right, so here's the deal.

I got a minute with you, so I got to hurry.

okay okay so question is which one of these jobs staying where you are or taking the new job which one of those puts you on the path or moves you further along on the path you want to be the current one or the new job the new one it sets you up for the long term financially plus professionally

Yeah.

Oh, it's a no-brainer, Lexa.

You're a good person.

And those people are going to be okay with you when you leave.

And if they're not, they were never good people in the first place.

Oh, I, yeah, when you put it like that, it makes so much sense.

I know, because I'm not emotionally attached to it, so I sound so balanced.

But the reality is, I've had to walk through this too.

And because you're a good person and you like the people and you're loyal, then you're feeling, you know, what you're really worried about?

You're scared they're going to think you're a bad person if you leave them behind.

And the math checks out.

I mean, this ROI is a thousand percent taking this new gig, the 10,000 sign-on bonus.

You're making it for 24 a year.

Yeah.

So the PSLF on the 24 is a moot point.

You can pay that off on your own.

This was a financial no-brainer, George, from the get-go.

I always want to know emotionally and professionally, where are we at?

And that's the answer to the question.

Love it.

Excited for you, Alexa.

Go.

Don't look back.

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All right, we get a lot of great questions from our audience, George, and here are some top questions people have about online wills.

Number one, how do I know if I need a trust or if my estate is too complicated for an online will?

Ooh, a good baseline.

If your estate is worth less than a million, getting a will online, probably the right option for you.

All right.

Number two, what do I need to start my will online?

Well, you got to think it through a few questions here.

Who do you want to get your stuff?

That's a big one.

Who do you want to take care of your minor children?

And then who do you want to make decisions for you if you're incapacitated?

So there's a lot that goes into a will, online or not.

You got to think through those things.

Good stuff.

Number three, is an online will legally validate these people a little worried about the old online business.

They go, well, it's online.

It's got to be done in the lawyer's office.

That's right.

Not just any online will you find on the internet is legally valid.

Your online will needs to match the laws of your state.

So you got to have a state-specific will.

And then a follow-up to that: why would I want an online will versus a traditional one made with a lawyer?

If you're like me, a millennial, you want it to be less expensive, more convenient, and take less time to set up than a traditional will with a lawyer.

There you go.

It's that simple.

I love the way I did it.

You're trying to save a buck or two, George.

Go to ramseysolutions.com slash wills quiz to find out if an online will is right for you.

And

I feel like I got to tell the audience this, and I think you'll be okay with this, George, but you know, George is very calm.

He's a very calm person.

It's rare that you seem flummoxed.

And

he is, your broccoli got steamed today.

Yeah, and I don't, you're not really a steamed broccoli guy.

And more of a roast.

And when the show is over, boy, somebody's going to catch your wrath.

That's all I'm going to say.

George, there's somebody attempting to rip George off.

Might catch a stray today if you're

to the tune of $149, and you would think think this guy got ripped off for fourteen thousand nine hundred dollars it's the principle said he is it's the principal

so just i'm proud of you you're really holding it together because i know how angry you are well i'm a consumer advocate and you got to advocate for yourself first and so there nobody rips old georgie boy off oh sorry i'll keep you guys posted caller beware he is steaming underneath that natty little coat there he's looking good yeah he is hot to trot kevin is up in minneapolis kevin how can we help?

Hi, how are you doing?

We're having a blast, Kevin.

What's going on with you?

Well, good.

Well, I've got kind of a funny situation here.

We really have it pretty decent financially.

We're going to be, my wife and I are 65 years old.

We're going to be retiring in the next month.

And we make about $150,000 a year.

We've got an employee compensation of

about $120,000.

That's tax-free.

It's taxable when we take it out.

Our Social Security should be about $4,500 a month.

I got about $1,500 a month pension.

We owe about $160,000 of our house.

It's worth about $430,000 now.

My uncle recently passed away, and we are set to inherit

between $500,000 and $700,000.

Whoa.

Here's the problem that

I have.

We attended Dave's Financial Peace University

through our church, and we loved it.

We absolutely loved it.

We don't owe anybody any money except for our house.

And

Dave says that if you don't know about investing, he said, don't do it.

And

I'm wondering where do we put this money?

Because I don't know anything about the stock market.

I don't know anything about

financing to that level.

And I just don't want to

do what God wants me to do.

I want to be careful, you know?

Sure.

Well,

let me speak on behalf of Dave here.

When you heard him say that, the spirit of what he was saying is

no one should ever invest a nickel into anything if they don't understand what they're investing into.

So he's not saying because Kevin doesn't know anything about investing, he should go bury the 500,000 in his backyard and coffee cans.

I don't want to do that.

I know.

But I just want to make sure you understand.

So

we teach an investing plan.

I'll let George walk you through it.

I can tell you that you're going to need to go to ramseysolutions.com when this call is over and click on the Smart Investor Pro tab.

And you need to go interview.

I recommend two to three at a minimum.

And these are professionals that we have vetted.

They will teach you.

And what Dave wants you to do in those situations is you find somebody that explains your situation well, explains what the investment strategy is that we agree with.

And then you understand it to the point and you go, oh, I understand this completely.

This makes total sense.

And you like them.

And then you choose to go with them.

And so that's what you need to do.

But George, explain the overall investing strategy here.

And then I know you got a plan for what they need to do with this money.

Sure.

So the one thing we say is just wait.

Don't make any big financial decisions on day one.

Just park that money in a high-yield savings account.

Is it going to come to you just all in cash?

Yes.

Okay.

It's not like real estate that you have to sell or anything like that.

No.

Okay, great.

It's going to be.

It's going to be straight cash.

Okay.

He had 10 nieces and nephews, and he split his inheritance up.

And

I think we're going to get between $500,000 and $700,000.

Yeah, that's quite the legacy.

So I would wait and breathe and get a good dream team in your corner.

And like Ken mentioned, an investment advisor is one of them.

I'd get a good tax CPA in your corner as well to help you understand tax implications of all this.

And then I would be focused on knocking out that mortgage.

That's only going to allow you guys to retire with even more breathing room, right?

What's that payment every month?

It's about

$1,500.

Okay.

So boom, you just gave yourself a $1,500 raise in retirement.

Well, yeah,

I understand what I want to do, but we are planning to move out of the state when we retire.

We want to be close by our grandkids, so we're moving to Sioux Falls, South Dakota.

Okay.

So

that's the quandary that we're in.

Well, if you pay off your house, it's not like the money disappears.

You're going to get it in the net sale of the house.

And in the meantime, you freed up $1,500.

Yes.

So that's still not a bad move to give you guys some peace as you move, and then you can get your next house in cash.

Is that the plan?

Yes.

Okay.

I don't want any mortgage.

I love it.

I want to pay everything.

How old are you guys?

We're 65.

Okay.

So let's just play this out.

You pay off the mortgage.

That's 160, right?

And you buy your next house in cash.

Let's say there's $500,000 sitting there left over.

You can do what you want with, right?

And you don't need it for your actual income right now.

So let's say you could just invest it

into the stock market.

If you invested in some good gross stock mutual funds, an index fund, and you let it ride from $65,000 to $72,000, that $500,000 would double in those seven years with the historic rate of return we've seen in the market.

I'd love that.

That's if you did nothing.

This is not like you're not playing stocks.

You're not day trading.

This is in like an S ⁇ P 500 index fund.

It just tracks the top 500 companies in the market.

You buy, you know, $500,000 worth of shares.

Historically, if you get an average rate of return of 10%, so like this year, we're already at, you know, if you look at the last six months, it's in the 20-something percent.

Year to date, probably closer to 15% or 16%.

Some years it might be down.

Some years it might be up.

So there's a little bit of a roller coaster, but you're not going to lose your lunch either if you just leave it invested.

And so that would be my goal for you guys.

If you don't need the money, just let it sit at least in an investment account.

And one of the Smart Investor Pros can guide you through that, help you understand it.

Again, I want to make sure that you know what you're doing and not just going, Well, George told me to, so I'm going to do that.

But having a good dream team to fill in the gaps and moving with patience and always going, Are we doing this with wisdom?

Are we avoiding debt?

Are we going to use this money to grow it?

Are we going to give more?

Are we going to spend more?

All of that needs to be part of your plan so that you don't have any financial regrets with this.

Okay.

There it is, Kevin.

Here's the deal.

Final word on this to encourage you.

Fear goes away when we have clarity and knowledge.

But when we're not sure about something, it's fuzzy, foggy,

we don't know, the fear of the unknown is terrifying.

So that fear that you have is going to go away when you get a bunch of knowledge and clarity.

And George is giving you a good plan on that.

So excited for you in your future.

I know you're going to do good things with that money.

I hope he can leave

a legacy to his nieces, nephews, children.

I mean, that'd be pretty cool, too.

I was sitting there thinking, this is a really nice uncle, because I love my nieces and nephews, but I'll be honest with you, it's not going to.

I don't know if I'm giving them any money.

I don't know.

Sorry, Ken.

We'll see.

It's not a final decision.

I'm just sitting there going, is that part of my better suck up to Uncle Ken starting now?

Probably wouldn't be a bad idea.

Our scripture of the day, Galatians 5:22 and 23, the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, and self-control.

Our quote of the day from Theodore Roosevelt, there is only one quality worse than hardness of heart, and that is softness of head.

Just let that sit there.

I'm not sure, I love Teddy, and normally I think when he says softness of head, that means somebody who's not

the brightest,

yeah, yeah.

Because if you call someone hard-headed,

that means they're

stubborn.

So, I think he means stubborn is a strength, and if you're not, by the way, a callback

for you

trivia lovers.

To the astute listeners out there.

Yeah, we had a call earlier.

I forget the lady's name.

She was from Springfield, Missouri.

And I said I think President Truman might have been from Springfield, but I wasn't sure.

And I was right both times.

I fact-checked them.

The older people.

He is from Missouri.

He was born in Missouri.

Yeah, but not from Springfield.

And I bailed myself out by saying I'm not sure.

Lamar.

Lamar, Missouri.

There you go.

Do you know what, quote,

Harry Truman is most famous for?

Couldn't tell you for a million bucks.

I bet you know it because you can finish it.

If you can't stand the heat, get out of the kitchen.

Harry Truman, ladies and gentlemen.

It doesn't feel like a Truman quote, to be honest.

It feels like a movie quote.

Well, see, because it's that good.

And I'm trying to smarten up the younger generations that have not been taught well in class because this is clearly a generational thing.

Well, they don't know their way around the kitchen, so clearly they couldn't stand the heat.

There is that too.

They're door dashing everything.

Yeah.

Jake is up in Boise, Idaho.

Is it, Jake, is it Boise or Boise?

Boise.

That's what I like.

Yeah, I used to do the Z, and now I went to the C.

Boise.

All right, very nailed it.

How can we help?

Okay, so we live in a 1945 farmhouse.

Kind of a, it's a two-bedroom, one-bath.

We do have a bonus room, but for some reason, it's not counted as a room.

We have five children.

We're kind of out of room.

So we were looking to sell, buy something bigger.

It ain't moving.

It isn't moving.

So we were thinking about doing a construction loan and building

a modest 2,000 square foot house.

We didn't know how smart it would be to do that.

Well, can you do that if you don't sell the current house?

I think it'd be really tough.

Do you guys have any debt right now?

Yes, we do.

The only debt we have is a camp trailer.

Okay.

The land is paid off.

Okay.

The land is paid off, yep.

Good.

And how much do you have in savings?

I think we have $1,100 in high yield.

So pretty much nothing.

What about the camper?

Is it worth anything?

About $1,600.

What do you owe on it?

About $1,600.

I think it books at almost $20, but it's scraped up on the side a little bit.

Well, you got to get rid of that.

You got to get rid of that because that thing is only devaluing, and you need to get that out of your life.

That'll free up how much a month?

Oh,

$202.

That's real money, I'm guessing.

What's your income?

$63.

Yeah, dude.

$63K.

George, am I right?

We're getting rid of the camper today.

Let's sell that.

That's one step toward this.

But the problem is, if you build this thing, you get the construction loan, you convert it to a traditional loan, I'm scared you can't afford it.

Well, no, not with the current house.

What are you listing the house for?

570.

How many squares?

13 acres.

Okay, but how big of a house is it?

I think they say that the livable square footage is $1,100 or $1,200, something like that.

Whoever bought it, would they just tear it down and build something else on it or use it for other things?

Yeah, they would just tear it down, but they're not wanting to spend $570 on the property and then turn around and do that.

I have a dumb question.

I'm sure you've thought of this, but I'll ask.

Can you expand the current house?

Probably could, but we're a little bit leery of it because it was built in 1945 and I don't think the foundation is all that.

You just want to start from scratch to be safe?

I want to add on to it, but I was advised by a cousin of mine who is a builder.

And he said that wouldn't be very smart.

You may as well just build a new house and tear it down.

Oh.

Because he said that you're still in a 1945 farmhouse with a foundation that was poured in 1945.

He said, so anytime you go to sell that, they're going to look at that.

Have you looked into, and I'm only going through stuff that I would go through if I were you.

Have you looked into a foundation company to see what the real reel is, to get under there and take a look and go, okay, what kind of shape is it in?

And then what would it take to get it up to par?

Yeah, I actually thought about, because I used to work in excavation, I thought about just getting an excavator and digging around.

But they're seven-foot-tall walls because it's a basement.

That's not my recommendation.

My recommendation was getting somebody out there who's a specialist in this and let's get a real picture of what we're dealing with.

Because here's my I was just going to dig around it and then have them look at it.

Oh, okay, gotcha.

Well, you don't have any money to go buy it.

Oh, I see.

Yeah, the issue is as it stands currently with basically no payments, we can't put away a dollar.

And so I'm real nervous to get into this project only to realize you can't afford it and afford the ongoing payments that come along with that.

It's going to sink you guys.

Yeah, I kind of already knew that.

So the question mark is income.

Can we get the income up to be able to say?

I'm going to stay where I am until we grow.

What would it cost to rent in your area?

Something like this is not even heard of, and we farm.

So

is the farm producing income?

Yeah.

Not much, but

it pays more than double of taxes and irrigation.

So when you say

we can't leave here until we grow, what did you mean by that?

Oh, I thought you asked me about my income going up.

Sorry, yeah, your income going up.

I apologize.

Yes.

We're looking for variables that can shift here.

Yes, I just, I worked at the company for a month and got, they gave me as big a raise as they possibly could.

But we are bidding on a bunch more contracts right now.

And when we get those, then I will go into the general manager position and I will get another increase.

What kind of work do you do?

Right now, I have no landscaping.

Can you do side work and build up some more income?

Because my point is this.

As George said, you building a house and going to get a construction loan is a non-starter.

That doesn't make any sense.

And yet it's going to also cost money to expand your current home because you need more income in order to fix your living situation.

And the more income is step one.

Then we start start figuring out, do we renovate?

Is that even doable?

Is it even feasible with the foundation and all the things with the 1945 house?

Or is it, but here's the problem.

If no one's going to buy your current house, you are in fact stuck with it.

And then your best move is to renovate it.

And you get to keep the 13 acres and all the things.

I'm leaning towards trying to renovate it.

Otherwise, you're lowering the price until someone's willing to buy.

You can use that cash to buy something.

But more income has got to happen recently.

Either way, the income needs to go up.

But the question mark is, do we keep it and try to do something with it or just keep lowering the price until we sell it?

Are you working with a good real estate pro on this?

Yeah.

What are their thoughts?

Sold me this house and helped me sell my first house.

Why do they think it's not moving?

He doesn't know.

He said it's kind of blown his mind.

I think it's high, personally.

I do too.

There's no comps out here.

I think it's crazy.

It's over half a million dollars.

I understand.

It's 13 acres, but it's a rinky-dink house.

It's super small.

They're not buying it for the house.

So, again, it's got a renovated tiny home on it,

which isn't going to add a lot of value.

It's got a shop on it.

No, that's not going to add anything to it.

I mean, that thing's going down.

How old are your kids?

My oldest is 11, youngest is four.

Well, the 11-year-old could live in the tiny house.

That'll free up some room.

One problem solved.

He'll love it out there.

Just put it in the backyard.

You can see him.

She won't love it out there.

She will not.

Never Never mind.

Never mind.

Your smoothest, easiest path out of this is to keep lowering the price, and you sell it for $500 instead of $570.

And now we live to fight another day.

And the dream of building on this land we'll have to put away for now.

Yeah, I guess.

Because you got five kids in a dilapidated house that just worries me to keep living like this for another few years.

It's kind of talking it down.

It's not actually in that bad a shape.

Well, but the point is you got to lower the price.

That's your instinct.

Five kids and 1,100 square feet.

Something's got to give.

Yeah.

Woo!

It ain't a shack, but it might be close to it once you get seven people living in there.

Yeah, that's tough stuff.

Oh,

good stuff.

Wow, thanks for the call.

All right, folks.

Well, remember, there's only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.