A Past Gambling Problem Is Haunting His Financial Future

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From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show.

Speaker 2 I'm George Campbell, joined by best-selling author Dr. John Deloney, and we're taking your calls at 888-825-5225.
We're here to help you take the right next step for your life and your money.

Speaker 2 Rob is in Kansas City. What's going on, Rob? How can we help today?

Speaker 3 Yeah. Hi, George.
How are you doing this afternoon?

Speaker 2 Great. What's going on with you?

Speaker 3 I'm doing all right.

Speaker 3 Longtime listener, and I figured it'd be time to give you guys a call.

Speaker 3 I'm in an interesting situation here, and I'm kind of pushing back. So a couple of my best friends are very good with financials.
I would say I trust them. And

Speaker 3 my situation here, and I'm looking for your advice, is that I owe $8,000 on a credit card, and that stems from a gambling issue that I had years ago that is no longer a problem.

Speaker 3 I balance transferred that money to a 0% interest card for 15 months. I have $20,000 in cash and savings.

Speaker 3 I have a truck payment. I drive a F-150 Raptor used.
I owe $28,000 on the truck. I make roughly $100,000 a year, and I'm 26 years old.

Speaker 3 So the question here and what my friends are advising me to do, George, is for me to take the $20,000 that I have in cash and put all $20,000 towards my truck and my credit card debt.

Speaker 3 And the pushback that I gave to them, George, is that I don't want to completely wipe out my cash that I have on hand in case of an emergency. And baby step number one is to save $1,000.

Speaker 3 So just wanting to see what your thoughts are on that. Thank you, George.

Speaker 2 Wonderfully put. Okay.
And so you don't agree with your friends. And in turn, you don't agree with us, which is fine.

Speaker 2 You know, you can hang on to the debt as long as you want and hang on to the emergency fund as long as you want.

Speaker 2 What we have found is that people generally get comfortable with their debt when they have a pile of money and savings.

Speaker 2 And so it's actually psychologically going to to take you longer to pay off the debt because you don't feel the fire that is actually happening in your backyard right now.

Speaker 2 And so I think if you put 19 of that 20 towards the debt, that would knock out your credit cards completely, giving you a lot of momentum and knock out a significant portion of your car loan.

Speaker 2 Correct.

Speaker 3 Yeah, the issue that I have, George, is, you know, I'm

Speaker 3 become cheap because of the issue that I had years ago with gambling. I lost pretty much everything, but I've rebuilt what I had lost.
And it felt good to save that money back.

Speaker 3 And obviously, I know I have 20,000 minus 8K in credit cards, so I have 12, and then you take, I basically have a negative net worth with my car payment and my car loan. So

Speaker 3 it's just me being kind of impatient of like, oh my gosh, I have to start over again.

Speaker 2 Yeah, it feels like you're going back to rock bottom.

Speaker 2 There's a legitimate scarcity mindset there.

Speaker 4 Well, Rob, I want to throw something at you. This is John sitting next to George.
I'm his sidekick. He doesn't let me talk very much, but occasionally he does.

Speaker 2 I have a mute button for John.

Speaker 4 The only point.

Speaker 4 Can I throw something else out there? And I'm throwing spaghetti at a wall, and you can say, nope, you're an idiot. That's not real.

Speaker 3 Okay.

Speaker 3 Go ahead.

Speaker 4 Are you completely through with your gambling past?

Speaker 3 Yes. Okay.

Speaker 4 Let me rephrase that. You're done gambling.

Speaker 4 You've done what you need to do. You've healed from that.

Speaker 4 Are you okay okay with you? Are you okay with that guy who gambled and created a big hole for himself?

Speaker 3 Yes, because it was a decision that I made. It was right.
It was wrong. It was indifferent.
I made the decision. I'm an adult.
I have to live with it.

Speaker 3 And I'm a man of faith, and I just leaned on my faith with God and honor him, praise him, and look for him as pleasing him in all decisions that I make. Okay.

Speaker 4 So I want to take that. I'm going to take you at your word.
And

Speaker 4 I want to tell you what it looks like from the outside, that you still haven't fully completed the full circle of healing when it comes to that gambling debt, because you're still hanging on to it.

Speaker 4 Right. And I don't know that you're going to have that full exhale.
And when I say, what I mean by that is

Speaker 4 you've hacked your way to safety. Meaning you've done some amazing work to get yourself a bunch of cash.

Speaker 4 And instead of leaning on gambling, instead of leaning on excitement, instead of leaning on what's the next cool thing, now you're leaning on something else, which is cash, as this warm blanket to

Speaker 4 keep you safe.

Speaker 3 And that's what I feel daily.

Speaker 3 When I look at my bank account, I see 20 grand. I'm like, oh my gosh, that's great.

Speaker 3 It is. I remember when I didn't have anything.

Speaker 4 But you still haven't finished the gambling debt yet.

Speaker 3 Right.

Speaker 3 You just need to get to the point of being comfortable with saying, all right, I'm going to spend

Speaker 3 $2.

Speaker 4 That's not how comfort works. Comfort is through the other side of discomfort.

Speaker 4 And you have this big, uncomfortable path ahead of you, and you're not walking through it. Because you've walked through a lot of discomfort to get here,

Speaker 4 and you want to call that the end.

Speaker 4 It's like you're running a marathon and you found mile 15, 15 to 17, which is when everyone's, no matter how good a shape you are, that's when people are like, dude, this is stupid, I quit.

Speaker 4 And you're saying to yourself, you know what, I ran 15 miles, that's enough.

Speaker 4 And what I want to tell you is, the true exhale you're looking for is on the other side of finally being done with all of the gambling stuff.

Speaker 4 And it's going to be uncomfortable to write an $8,000 check. Send it.
Send it today.

Speaker 4 And be forever done with both the action of gambling and the consequences of that because the consequences are still floating out there.

Speaker 4 And you've created a story that makes it kind of okay, which is it's at 0%,

Speaker 4 but it's still in your backpack. Set it down, man.

Speaker 3 Can I ask you another, I actually just thought of something, too, that I wanted to ask, but I forgot to mention to you guys. Of course.

Speaker 3 One thing that I think I have, and my father's even mentioned, it's kind of like an OCD thing here with

Speaker 3 because of the gambling issue, I became

Speaker 3 fixated on saving money, right?

Speaker 3 So I think I found myself trying to save too much money. And I know people have told me, guys, that, oh, well, you can't save your way to wealth.

Speaker 3 You know, investing is the way, you know, to build wealth. And I have a savings incentive plan with my company.
And at 26 years old, I've got about $50,000 between my ESOP, my 401k, and my IRA.

Speaker 3 You know, my boss is like, that's great. That's amazing.
You know how many 26-year-olds don't have that, you know, and, and I just,

Speaker 3 I want, because I want to get married. You know, I'm going to propose to my future fiancé, you know, around Christmas time, and I want to buy a house.
And I'm like, gosh, like,

Speaker 4 it sounds like, honestly, it sounds like you traded one addiction for another.

Speaker 3 I think so, too.

Speaker 4 I do. I mean, and so listen, the only path, you cannot

Speaker 4 psychoanalyze your way through this. The only path to the confidence you're seeking, and confidence here is trusting yourself,

Speaker 4 is through it, not around it.

Speaker 3 Right. And I know that, you know, I'm a saver.
I know I live with him. I need to go.

Speaker 3 Here's the thing.

Speaker 4 Just pay it off. Pay it off.
And George, about the truck.

Speaker 2 And you got to attack that truck, man. I mean, you can afford to keep it, but if you're going to hang on to the payments and carry this into your marriage, this thing's got to go.

Speaker 4 That's a different kind of gambling, that you're always going to have this income and that debt's always going to be okay.

Speaker 2 And I don't think you're ever going to get to a point where you feel comfortable enough to then throw it at the debt.

Speaker 2 We're going to be talking years from now, and you're still going to be carrying this. So I pay it off.
You're going to have 17K left, attack that, and knock it out before you get married to this gal.

Speaker 2 That's what we would do, man.

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Speaker 2 chase is in new york what's going on chase how can we help today

Speaker 3 hey guys how you doing great

Speaker 2 How are you?

Speaker 3 I'm doing good. So my question is, I have some money saved up.

Speaker 3 I've been considering putting a big lump sum towards some loans that I have. So I'm just looking for some advice on what the best route is here to do that.

Speaker 3 Taking into account how much money I can save in terms of the different interest rates on each loan.

Speaker 2 Well, do you want to do math or do you want to get out of debt? Which one's more important to you?

Speaker 3 Yeah, so

Speaker 3 it's a combination of both.

Speaker 3 I mean, these loans aren't, there's really no emotional aspect to them for me because I have them set up in some different bank accounts where it's direct deposits straight from my paycheck.

Speaker 3 So I really don't feel it at all. And then my car loan is just the same exact thing.
So I'm not actually making those monthly payments. So I really, I don't.

Speaker 2 You're not making the monthly payments? I'm so confused.

Speaker 3 No, it's automatic. It's all automatic in my payments.

Speaker 2 Okay, so you are making

Speaker 4 monthly payments, homie. Yeah.

Speaker 2 You've just automated.

Speaker 2 You're saying you don't feel it emotionally because everything's automated and you go, whatever, it's money out of my account. It's not there anymore.
Who cares? I'm not that concerned about the debt.

Speaker 2 Are you trying to make money by keeping the cash in the bank instead of paying off the debt? Is that your question?

Speaker 3 No, I just don't know. I want to.
So my car loan is $15,000 left on it. Okay.
And my student loan has $71,000 left on it. Those are the two, the two big ones.
I have a mortgage as well that I just

Speaker 3 started, which is sixty six hundred and twenty thousand dollars left on it and that's obviously that's my highest interest rate and my biggest loan but really i could i feel like i put a decent dent in how much money do you have that you could allocate toward the debts

Speaker 3 um so right now in my savings I have $60,000.

Speaker 3 Part of it, the reason this hole came up, I got a raise at one of my jobs, and I didn't update the percentage of direct deposit that was going into my account that was just covering my student loan.

Speaker 3 I knew that, but it was just additional savings. So it's now $17,000 in that account that's just sitting there.

Speaker 3 So I figured, does it make sense to put that towards my student loan to eliminate a lot of the interest and shorten the length of this?

Speaker 1 You have way overcomplicated your whole financial life.

Speaker 2 You've got like 17 accounts sitting there. You've got direct deposits coming every which way.
I would simplify it all and take all cash you have minus a thousand bucks and just knock out your debt.

Speaker 2 Could you just about knock out all of your debt if you did that today?

Speaker 2 You have 60 plus the 17?

Speaker 3 Yeah, 60 plus the 17. So it's about $73,000 in my savings.

Speaker 2 So you could knock out the car loan today, free up that payment, knock out most of the student loan, and probably be debt-free by Christmas.

Speaker 3 Yeah, I guess my question was like, I'm kind of towards, it's $80 a month in interest right now for the car loan. The student loan is about $220 per month in interest.

Speaker 3 So I just wasn't sure if it makes more sense going,

Speaker 3 really just keep paying the car loan and wipe out that whole student loan first.

Speaker 3 And then that's all my savings. Like, is it...
Is it smart to eliminate that?

Speaker 2 The interest savings is not going to matter with the speed that you're going to attack this if you do it our way.

Speaker 2 Now, if you're gonna hang on to the debt forever and keep playing games, then I think you should start looking at the math and the interest. But if you do it our way, you're debt-free by Christmas.

Speaker 2 We're talking the difference in pennies.

Speaker 2 We're talking two months, you're completely debt-free.

Speaker 4 Think about it this way: you've made it easier for yourself by thinking about the interest that you're paying on the loan on top of the principal.

Speaker 4 How much is the interest rate on your student loan?

Speaker 3 My student loan is that's the lowest one, that's 3.74%.

Speaker 4 Okay, so if you have your money in a high-yield savings account, that's a wash right now.

Speaker 4 Yeah. Right.
What are you paying on the interest of your car note?

Speaker 4 5.79%.

Speaker 3 Okay.

Speaker 4 So you're paying 5.7%, right? 5.8%. So let's say 6%.
You're paying 6%

Speaker 4 for the privilege

Speaker 4 of holding on to that money.

Speaker 4 That's bad math any way you use it. Yeah.

Speaker 3 Yeah, I'm also not really sure with

Speaker 3 like, I don't know, how limited I have in my savings.

Speaker 4 Let's flip it around. Let's flip it around.
Yeah.

Speaker 4 Pay off everything by Christmas.

Speaker 3 Okay.

Speaker 4 If you hate it,

Speaker 4 if you hate not having any payments, then go take out a $70,000 HELOC against your house. And you can have one back.

Speaker 3 That'd be awesome.

Speaker 4 There's just like, there's a way to do this.

Speaker 4 Yeah. George and I have never met a person and Dave Ramsey before us have never met somebody who paid off everything.
And they're like, man, I wish I hadn't done that.

Speaker 3 Yeah. How much do you make? That's the goal for sure.

Speaker 2 What's your income? Well, that's

Speaker 3 roughly per month after taxes, $11,000. Okay.

Speaker 3 Let's play this out.

Speaker 2 You're debt-free by Christmas and you have $1,000 in savings. And you're going, oh, gosh, I got to rebuild.
Okay.

Speaker 2 Well, the next paycheck, how much could you throw into that savings account now that you don't have any debt?

Speaker 3 Yeah, let's defend. $11,000.
$7,000?

Speaker 3 $8,000? Yeah,

Speaker 3 my mortgage is $5,500 a month. We have an apartment in the house, which we get $1,700 in rent from.
Who's we?

Speaker 3 Me and my wife.

Speaker 2 Oh, okay. What does she make?

Speaker 3 She makes $120,000 a year.

Speaker 2 On top of your $11,000 that you're taking home?

Speaker 2 Yes. Okay, so you could rebuild this emergency fund in like two months.

Speaker 4 You're rich, brother. Pay off your debts, man.

Speaker 3 Okay.

Speaker 3 You're already doing the big lump sum towards it.

Speaker 4 Yeah, just pay it off today.

Speaker 2 You're like a rat in the maze, and we're going, dude, you don't need to be a part of this lab experiment. You can just opt out.

Speaker 2 You're overthinking at every corner, and you're too successful. You make too much money to even be doing this math.

Speaker 2 Yeah.

Speaker 2 What does your wife think about all this? What's her involvement?

Speaker 3 She's not, I'm a little bit more entrepreneurial-minded and doing the finance stuff for us.

Speaker 4 Okay,

Speaker 4 you're not good at it, yeah. So, I'm

Speaker 2 what would she say if she took control of the money today and saw everything going on? Would she go, What are we doing over here? You got nine accounts, you're trying to direct.

Speaker 2 Can we just pay this off and be done?

Speaker 2 Is that how she is, or would she say, No, I think we should keep it very complicated and overwhelming?

Speaker 3 No, she would go, she would just do the monthly, the monthly payment, and that's like honestly what,

Speaker 3 not financial experts, but like telling my friends and things like that, like everyone just, everyone in my life is just making their monthly payments. I know, and their life is awful.

Speaker 3 Look around, dude. Look around.

Speaker 2 And they complain and they vent about how awful everything is, how they can't afford everything while they carry their $600 car payment that they can pay off today.

Speaker 2 Yeah.

Speaker 2 So I don't know. I mean, you can keep playing the game, but it just feels like you're choosing.

Speaker 2 I just need to call out, you're choosing to play the middle-class game by making it complicated, holding on to the loans.

Speaker 4 Thinking a lot of action is getting you anywhere.

Speaker 4 So

Speaker 4 you're in a truck right now and it's stuck and you just keep hitting the gas and you're like, yeah,

Speaker 4 look how fast this thing is. Like at the RPMs, look how hard it's revving.

Speaker 4 But me and George are sitting in the field next to you. We're like, you're not going anywhere.

Speaker 4 And every check, it like a little goes here and it goes over there and then a direct deposit's here and you can't. Lloyd Christmas once said, you can't triple stamp a double stamp.

Speaker 4 That's from Dumb and Dumber. You should go watch that movie for for Christmas.
But listen, just pay it off. Pay it off.
Get out of the game. Your friends are broke, dude.
Your friends are broke.

Speaker 2 So the question is, are you wanting to try to make a spread off of this or are you wanting to build wealth? Because you can't do both at the same time.

Speaker 3 So if you want to build wealth,

Speaker 2 here's the simplest way to build wealth. Here it is.
You ready for it? Live on less than you make, invest the difference.

Speaker 4 That's it.

Speaker 2 You make 16 grand, live off five, invest the 11. You're going to be unbelievably wealthy no matter what because your savings rate will trump anything else going on in your life.

Speaker 2 And the other piece is avoid debt.

Speaker 2 Avoid owing other people money so that your income stays with you.

Speaker 2 And instead of paying interest, you're going to be earning it in no time and you're not going to be doing any more interest rate math.

Speaker 4 And you and your wife make was about a quarter million dollars together. They'll make a lot of money.
Think of it this way. In three years, you can own your house outright.

Speaker 4 You can owe nobody anything. And you can have an emergency fund.
Nobody can ever take your home. No one will ever knock on your door.
That's the definition of wealth moving forward.

Speaker 2 You get a health scare, a job loss, wife wants to stay home, you yawn, and then you do it. Yeah.
That's financial peace, man. That's what we're after.

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If you're watching on YouTube or podcasts, click the link in the description. All right, Amanda is out in Salt Lake City.

Speaker 2 What's going on, Amanda?

Speaker 3 Hi, my husband and I have no debt. Our house has been paid off for a few years.

Speaker 3 I have a 401k. He has a pension.
And we had a friend die a couple years ago at about our age.

Speaker 3 And we got nervous. So we got some life insurance through a friend.
It's a fixed index universal life insurance policy. And I'm beginning to think it's not that good of a deal.

Speaker 3 Well, good job. Yes.

Speaker 2 I'd even join the rest of us. I'm so sorry.

Speaker 3 I've been listening to you guys, and I'm like, uh-oh.

Speaker 2 Are you still friends with this person?

Speaker 3 Well, it's my sister-in-law's dad, so yes.

Speaker 4 My sister-in-law's dad. That's like space balls.
It's like my best friend's brother's room.

Speaker 2 So you want to surrender the policy. And so.

Speaker 3 So we're putting like $1,000 a month into it. I have

Speaker 3 looking at this paperwork as I've been listening to you guys, I have no idea how much is in it. I don't know.

Speaker 2 That's how they like it. They like to make these things so complex that the average person like you and me, Amanda, we could not fathom how it works.

Speaker 2 And so we leave it to the really smart people in the index universal life world

Speaker 2 to scam us out of $1,000 a month. Do you know how much wealth you could build just putting $1,000 a month into the stock market in an index fund instead of an insurance fund?

Speaker 4 Venmo me $1,000 a month and I'll send you a nice note every day.

Speaker 2 And sadly, you would make more doing that.

Speaker 4 It would probably be more.

Speaker 2 Because the commissions and fees that he is making off of you right now would blow your mind. Okay.
Most of the money that you're putting in is going towards commissions and fees.

Speaker 2 A small percentage is going to be.

Speaker 4 Is his house bigger than yours?

Speaker 3 Yes. Yes.

Speaker 4 Ta-da.

Speaker 2 So you have a polite conversation and you say, hey, I'd like to get out of this policy and surrender it. ASAP.
And he's going to try to talk you out of it.

Speaker 2 He's going to tell you how bad of an idea it is and how much money you're going to lose by doing this. And you firmly just say, yep, I understand.
I understand. I want.

Speaker 3 We're going to pay this stupid tax.

Speaker 2 Exactly. Because the amount of time it takes for, they'll tell you.
They'll say, well, you got to really be committed to this.

Speaker 2 You've got to give us a thousand bucks a month for the next 20 years for this to work. All right.
Which just tells you how stupid of an idea it is.

Speaker 2 And so I would get out of it, ASAP. In fact, there's been a huge news story.

Speaker 2 One of the biggest NASCAR drivers out there, I think it's Kyle Bush. I hope I get that name right.
They just lost $8.5 million doing this at scale. The exact thing you're doing.

Speaker 2 Okay. So if that gives you any.

Speaker 3 So what do I do with the money that's in there? Like, how do, can I move it?

Speaker 2 I mean, I don't know how much you'll have at the end of the day there may not be much that's the sad news

Speaker 2 oh my like you can check how much cash value is in there i don't think it's gonna you're gonna be very disappointed with the amount of money you're gonna get from this

Speaker 4 okay and so the longer this goes the longer this goes

Speaker 2 okay do you guys have term life insurance in place

Speaker 2 no okay i would do that today before you surrender this policy

Speaker 2 you need term life insurance not whole life not universal life, not index universal life, none of these, just term life, a level term life policy. It will be a fraction of the cost.

Speaker 2 Instead of a thousand bucks, it's probably going to be like $65 a month.

Speaker 2 And it's going to do the only thing that life insurance was intended to do, which is replace your income if something were to happen to you.

Speaker 2 Okay. So you can jump on to xander.com and check them out.
That's who I have my policy through. Me too.

Speaker 3 Or you call them up.

Speaker 4 I've got mine through there too.

Speaker 2 And it's super affordable. And then the money that you save, that difference in the $1,000 you are paying, that $900-something dollars, you can then invest that money.

Speaker 2 And you can pop that into our investment calculator and see how much wealth you could build for yourself instead of making an insurance salesman wealthy.

Speaker 3 And both of us really aren't savvy in that. Like, how do you invest?

Speaker 3 I don't even know how to invest money.

Speaker 2 I mean, investing in your 401k is light years better. Yeah, just we'll, we'll teach you.
There's a great guide that we have on our website for free. Just jump on ramseysolutions.com slash guide.

Speaker 2 And we have a free investing investing guide that will walk you through it in plain English. No complex insurance jargon.

Speaker 2 In fact, we won't mention insurance in the investing guide because they should never be mixed.

Speaker 2 Anyone telling you they should be mixed is trying to make money off of you as you've already learned the hard way.

Speaker 2 Yes.

Speaker 2 I'm rooting for you, Amanda. So just know that you're not alone.
Thank you.

Speaker 2 And I hope someone else out there holding one of these policies or who's about to get talked into one, you might have just saved them. So please know that you've done us all a favor.

Speaker 3 Real quick, Amanda, are you still there?

Speaker 4 Yeah. I want to circle back to one thing you said said real quick.
You said you're out of debt and you've paid off your house.

Speaker 3 Uh-huh. Okay.

Speaker 4 Let nobody ever again tell you, convince you. And I'm talking to the people that you, the person you look at in the mirror and your husband looks at in the mirror.

Speaker 3 Y'all are light years

Speaker 4 ahead of the vast majority of Americans when it comes to handling your money.

Speaker 3 Thank you. My brother, or my brother, my husband always tells us that we're broke.
And I'm like, I don't think we're broke, buddy.

Speaker 4 Listen, if y'all, one of y'all loses a job, nobody's coming to take your house away.

Speaker 3 Right.

Speaker 4 If both of y'all lost your job, y'all would have to mow lawn so y'all could come up on an annual basis with the taxes and insurance.

Speaker 4 This is what real wealth looks like, not having a fancy policy that somebody else manages for you because you're quote-unquote too dumb.

Speaker 3 Right.

Speaker 2 How old are you, Amanda?

Speaker 3 We're 43.

Speaker 2 Okay. Do you guys have some wealth already built? Like, what's your current Nest Ag look like across retirement accounts?

Speaker 3 So I have about $450,000 in my 401k. I haven't worked for about five years.

Speaker 4 Are you apologizing for having half a million dollars?

Speaker 3 I can't believe that. I just seriously are making excuses.

Speaker 2 Okay, what about your husband? What's he have in retirement? He has a pension.

Speaker 3 I don't know how that works. Okay, I don't even know what he does.

Speaker 2 We'll take the pension out of it. Let's just put this in your world here.

Speaker 2 You have 450 grand, you're 43 years old, and you pop that that thousand bucks into an investment account, you're likely going to have, are you ready for this?

Speaker 2 $5 million at $65.

Speaker 2 If you just do that, just $1,000 a month, the amount you were paying into that insurance policy.

Speaker 4 Put it into your 401 or into a mutual fund.

Speaker 2 Yeah, even a Roth IRA. Now, you'd run out of money pretty quick because you'd go over the limit, but you can invest outside of retirement.

Speaker 2 If you run out of, if you max out all of your retirement options, you can invest outside of retirement, just into an index fund, in a brokerage account, and that'll still get you that number.

Speaker 4 somehow you and your husband would have to figure out how to exist with your paid-off house and five million dollars plus his pension however are y'all going to make it and your husband is saying you're broke for four weddings oh four weddings that might make you broke yeah i take it yeah i take it we have four girls so i he said i said we're going to pay for their college he said i'm not worried about college i'm worried about weddings that's okay so he's right he's right y'all are poor but you'll get there you'll get there they don't do full-ride scholarships for weddings although i i feel like they should you know what though you can do the cash out option

Speaker 4 when when your daughter comes home and says hey uh i'm engaged you can sit down and say okay we'll write you a check for twenty thousand dollars

Speaker 4 and we will marry you in our local church just right down the street hey right there you go i'd rather take that or you can just put it on a house and go aloe that's right well we will pay your down payment on for your house and we'll meet you and throw rice at you outside of the courthouse young couples will be like oh my gosh housing is so unaffordable and then spend $120,000 on a wedding.

Speaker 2 Like, it's worth it. It's my special day.

Speaker 2 Goodness gracious. We've got it twisted.
But hey, we're ruined for you, Amanda. It's a stupid tax.
You're going to be fine. The resentment, that'll sting for a little while, though.

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That's chministries.org/slash budget.

Speaker 2 JP is in New Jersey up next. JP, welcome to the Ramsey Show.

Speaker 3 Hey, folks, hope you guys are doing well. We are.

Speaker 2 What's going on with you?

Speaker 3 All right. So, my spouse and I have been married for three years.
We started at FPU when we got married, and now we're at Babyset 4, which is awesome. We've put 15% down

Speaker 3 into our retirement and are thinking of buying a home. We've been renting this whole time.

Speaker 3 Famously, New Jersey is pretty high cost of living. So we're trying to decide if it makes more sense to use what we saved and buy or keep renting and start investing what we've saved.

Speaker 3 Now, the caveat is we're planning to stay in the area for another five to seven years.

Speaker 2 Okay, so you're already investing 15%.

Speaker 2 Why are you wanting to invest more?

Speaker 3 Well, we have all this that we have saved, and we just started like doing baby steps and think, wow, we could be kind of gaining more if we invest.

Speaker 3 So we were like, do we have to invest? Do we use that as a down payment? Like, what makes more sense?

Speaker 2 How much money do you have?

Speaker 3 Outside of our emergency fund, we have about $140,000.

Speaker 2 Woo, that's a heck of a down payment. What kind of house are you looking at? What's the budget?

Speaker 3 The budget's around, like, $600,000 max.

Speaker 2 Okay, so what's your target here? Are you trying to keep it within the Ramsey parameters to keep it to 25% of your after-tax income?

Speaker 3 Yeah, we're trying to follow that as well.

Speaker 3 And

Speaker 3 we were thinking if we do do that and we leave in five to seven years,

Speaker 3 is the equity,

Speaker 3 does that match what we could win if we invest? We're trying to figure out.

Speaker 2 Well, you tell me. Tell me exactly what the stock market is going to do for the next five to seven years, and I'll tell you if it's a good plan.

Speaker 3 No idea.

Speaker 4 That's another presidential election, too, by the way.

Speaker 2 Perfect. So here's

Speaker 2 what I wouldn't do is try to time the market and decide: is this money going to go towards investments or house? I think both are good. You're already investing 15%.

Speaker 2 I would rather see you guys get your foot in the door of the housing market because I can tell you this: houses are going to be more expensive seven years from now, and it's a moving goalpost.

Speaker 2 So I would rather see you guys get into a home as soon as you're financially ready versus hanging on to the money or investing the money because you're going to be multi-millionaires at this rate.

Speaker 2 How old are you two?

Speaker 3 We're in our mid-30s. We're 34, she's 33.

Speaker 2 And how much money do you guys make?

Speaker 3 We make about two,

Speaker 3 I guess, before taxes is about 280. Okay.

Speaker 2 A third grader doing this math could tell you you're going to be a multi-millionaire investing 15% of hundreds of thousands of dollars with compound growth for the next 30 years.

Speaker 3 That's awesome.

Speaker 2 So in that case, I'm going, okay, well, let's really hunker down and get this house knocked out, which means we need to find a down payment goal so that we can get into this house.

Speaker 2 So is that $200,000? $175,000? $250,000? What is that number for you guys?

Speaker 3 So what we're looking at, it's about like $155,000.

Speaker 2 And you're at $140 right now.

Speaker 3 Yeah.

Speaker 2 So $15,000 is what's stopping you from buying a home?

Speaker 3 Pretty much.

Speaker 2 And you'll make that in the next month or two.

Speaker 3 Yeah, exactly.

Speaker 2 It sounds like you should start home shopping by Christmas.

Speaker 3 All right.

Speaker 3 We have been looking and then we, you know, we kind of paused and we're like, oh, we want to make sure that we're doing the right thing. So this is.

Speaker 2 You are doing exactly the right thing. Now, in the baby steps, this would be baby step 3B, or you can do it in four, which is you invest anywhere from zero to 15% while saving up a down payment.

Speaker 2 So if you guys want to keep at 15% and throw anything else at the down payment savings, you'll get there in no time.

Speaker 2 But I would not prioritize investing over buying a house when you're already doing baby step four. You guys are doing great.
Gotcha.

Speaker 4 And for whatever it's worth, I pause retirement to save up for my down payment.

Speaker 2 I see.

Speaker 2 The pause that you do for three months is not going to make that big of a dent long term. Right.

Speaker 3 So I would, you have a good real estate agent?

Speaker 3 We do. We do.

Speaker 4 Okay, good.

Speaker 2 I would start shopping now because it could take a little while to start finding the right one. And in the meantime, you guys keep stacking cash, keep stacking cash.

Speaker 2 And when the right one comes along, you guys are going to be financially ready.

Speaker 3 Amazing. All right.
We'll do.

Speaker 2 Way to go. Congratulations, dude.
I needed a win today, JP, and you gave me that. Thank you for being an inspiration.
All right. Bill is in Sacramento up next.
What's going on, Bill? How can we help?

Speaker 3 Well, I'm looking for some godly advice, and you guys are the key.

Speaker 2 John is the holiest man.

Speaker 4 I'll do the godly part. George will do the advice part.

Speaker 3 Now,

Speaker 3 I've got a situation where I got a couple kids. They're in private school, and my job is cut back way back on their overtime and stuff that I was using to keep them in private school.

Speaker 3 So my wife works, I work, and we're just getting barely by and all it takes is an appliance breaking down or our car that needs to be replaced and we're going to go in debt.

Speaker 3 Right now, we don't have any debt.

Speaker 3 But we've got about 600,000 plus equity in our home. So we were wrangling or tossing around the idea that what we could do is We get just one, you know, just a single mortgage.

Speaker 3 We were thinking about maybe taking out a loan against it, you know, whatever percentage they charge, and taking that money and it paid for the next four years of school. No, no, no, no.
Pay for a car

Speaker 3 and then just pay it off when we sell the house.

Speaker 4 Please don't do that.

Speaker 3 Okay.

Speaker 4 Please don't do that.

Speaker 4 Is this private school as part of the reason you sent them to a private school? Is it a faith-based education for them? Because that's something you value?

Speaker 3 Oh, yeah, it's a Christian organization and it's top-notch. Okay, great.

Speaker 4 That's amazing. I'm going to tell you something that's hard to hear, okay?

Speaker 4 Sure. It's faith-based and it's top-notch.

Speaker 3 It can be world-class.

Speaker 4 And

Speaker 4 in the current situation where you find yourself, you can't afford it.

Speaker 4 And this is dad to dad, okay? I'm just telling you, like, dad to dad, that's a hard thing for me to say to another dad who's trying to do the best he can to raise great kids.

Speaker 4 But I will tell you, in my house and in George's house, in our neighbor's house,

Speaker 4 the spiritual life of our kids is chiefly our responsibility.

Speaker 4 Absolutely.

Speaker 4 And if you can, if you have found yourself in a season where you can afford to also put them in a different environment where you know their teachers are all believing the same faith that you value and all that, that's amazing.

Speaker 4 But the other side of this is the biblical principle that the borrower is slave to the lender.

Speaker 4 And if you take out a HELOC against your house, even though you have built in equity,

Speaker 4 you are creating tension inside your house that your kids will absorb from the inside out.

Speaker 4 Okay.

Speaker 4 I would much rather, if you like, just again, dad to dad, I would much rather you guys have a hard conversation with your kids, which, by the way, would be one of the greatest lessons you could ever teach them, which is dad had his hours cut and our finances have changed.

Speaker 4 And if they saw their dad weep, if they saw their dad be sad, that would be a blessing to them because they would see dad have real emotions and then go do the next right thing,

Speaker 4 which is for this season or at the end of this year or at the end of this semester, this is as far as we can go. And if my hours peck back up, this is priority number one.

Speaker 4 I know it's going to impact your friendships. It's going to impact your school stuff.

Speaker 4 It's going to be hard, but my job is to keep all of us safe and I won't put the house on the block

Speaker 3 for

Speaker 4 something that I can get down the street and I'm just going to have to up my intervention in the school system, in the schools, in us talking about spiritual matters at home, doing morning devos, whatever you want to do in your house, because I'm going to have to take full ownership of that and not outsource some of that to a school.

Speaker 4 Those are hard, hard conversations, man. But I would not be a good dad, a fellow dad, if I told you, yeah, the right thing to do is to borrow against your home

Speaker 4 for this season right now.

Speaker 3 Okay.

Speaker 2 And if things are tight now, that HELOC is just going to make it even tighter.

Speaker 2 You're adding an extra payment in your life and you're putting your house on the block because that puts your home at risk as well.

Speaker 2 And so to John's point, I think this is going to add more stress than it's going to add peace of mind that you're doing the right thing for your kids. I think you've probably raised some great kids.

Speaker 2 Am I right?

Speaker 3 Oh, absolutely.

Speaker 2 Yeah. Do you think a temporary change in school would affect their character and their values and the principles you've instilled in them?

Speaker 3 Well, if it did, I'd, you know, I'd kick them out behind the woodshed. There we go.

Speaker 2 There we go. We have a solution.

Speaker 2 But I would not do this, Bill. I don't think using your home as a piggy bank is going to be a blessing in your life.

Speaker 2 And we just talked to too many people that are your age going, I wish I never did this. I wish I didn't take out the HELOC.
I'm unable to retire now and unable to make these payments.

Speaker 2 And that's just going to add stress into your home.

Speaker 4 Or the moment you take out that HELOC, you're going to get called in and they're going to say, hey, you know, we've been cutting hours, man, and unfortunately, we're going to have to lay off some positions.

Speaker 4 And then you're in a big, big-time mess that you're not in right now. And so, man, I

Speaker 4 i always want homes to be places of warmth and safety and peace and adding

Speaker 4 adding debt to your house plus putting your house on the block man

Speaker 2 that's a way to add some major stress take debt off the table and find any other way and it's not going to be fun but it's going to be for a season

Speaker 1 finally mortgage rates have dropped, and you know what that means? People who've been sitting on the sidelines are about to jump back in to the housing market.

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Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm George Campbell, joined by Dr.
John Deloney. Open phones at 888-825-5225.
Tyler is in Fort Worth, Texas.

Speaker 2 Salt of the earth, folks, over there. What's going on, Tyler?

Speaker 3 Oh,

Speaker 3 hello, I guess. How are you? Good.

Speaker 2 John is upset with me.

Speaker 3 He doesn't like my comments about Texas.

Speaker 4 Fort Worth is the 817. It's a great town.
And

Speaker 4 George doesn't know how to talk to Texas.

Speaker 2 I said salt of the earth. That's a compliment.
I'll teach John what that means after. What's going on today?

Speaker 3 So my wife and I got married a little over a year ago.

Speaker 3 So that brought all of our debt together, obviously. We're about $150,000 in debt.

Speaker 3 That includes car payments and a camper payment and student loans. And I also filed Chapter 13 bankruptcy six years ago.
And I'm at the light at the end of the tunnel where it is paid off

Speaker 3 in July of next year. Awesome.
Good for you, man.

Speaker 3 Yeah.

Speaker 3 So what got you back into the menu?

Speaker 3 Well,

Speaker 3 you know, Chapter 13 keeps you in, keeps you eating beans and rice, just like you guys say it should.

Speaker 3 But we'll put you back into it. My wife had $40,000 worth of student loan debt before we got together.

Speaker 3 Vehicle payment, I had to have a vehicle to get back and forth to work. I currently don't really need that now.
Just need to

Speaker 3 just have, I have a work vehicle that that can drive back and forth to work she needs a vehicle to drive back and forth to work and her payment her her Jeep we have about ten thousand in debt left on it so and I want to sell my pickup but I just found out today that the transmission went out and that's a six thousand dollar repair I just don't know where to start what do you guys make

Speaker 2 about a hundred and eighty thousand a year there's some good news and what can you sell your truck for if you got the transmission fixed

Speaker 3 if I somewhere between $33,000 and $39,000.

Speaker 3 Okay.

Speaker 2 And how much money do you have in savings, if anything?

Speaker 3 I've got about $500 in savings right now. Okay.

Speaker 2 And what could you sell the camper for?

Speaker 3 The camper is probably about $30,000 and we owe about $45,000 on it.

Speaker 2 So you're underwater on that? Are you underwater on the truck as well?

Speaker 3 I owe $31,000 on it, so if I put a transmission back in it, then I technically, yes, I would be underwater on it, but then I could sell it and walk away from the payment. Good.

Speaker 2 Well, I'm just thinking that if you get rid of that camper in the truck, man, you can breathe a little bit.

Speaker 3 Yeah. So the whole reason we got a camper was because we moved from Montana to Texas, and living in a camper with a couple dogs was the cheaper option than renting down here.

Speaker 3 I mean, we pay around $1,600 a month with, you know, the lot rent, the camper payment, and our electrical.

Speaker 2 So are you currently living in the camper?

Speaker 3 Yes, sir.

Speaker 4 Okay, what would rent be?

Speaker 3 Rent somewhere from $2,000 to $2,500 a month.

Speaker 3 Hmm.

Speaker 2 Is there anywhere cheaper?

Speaker 3 Every place that I've looked at that accepts dogs is usually pretty high. It's hard to find a place that accepts dogs without it being around that two grand mark.
Okay.

Speaker 2 Well, I'm just worried because this camper is going to continue to just tank in value.

Speaker 2 And you're going to be even more underwater on it to where you're going going to go, well, I guess we have to live in this camper forever. This is our life now.

Speaker 2 And so for a couple making $180K, you can afford $2,000 in rent.

Speaker 2 Yeah. So I just don't want you doing bad math going, well, it's worth it to stay in this camper and stay in debt when you could knock out $45,000 plus the 31 of the truck.

Speaker 2 That's half your debt right there.

Speaker 2 Yeah. And now making 180K, how quickly can you clean up 75? 12 months.

Speaker 2 So that's the napkin math I'm seeing on paper. I don't know if you see that future, that path out of this, but there's a very clear path out of this if you guys want out.

Speaker 4 Bro, you asked us, we don't know where to start.

Speaker 4 George gave you a math, like a path, and it's literally a year from now.

Speaker 3 That's it.

Speaker 4 But I want to get to, if you were just sitting with me and we were having nachos and you said, I don't know where to start.

Speaker 4 I don't think you have taken full ownership yet.

Speaker 3 Because I've heard you say.

Speaker 3 go ahead. Oh, sorry.
No, no, I was going to say, I just went through the baby steps reading the book.

Speaker 4 No, I got you. I got you.
Here's what I want you to begin to own from this point forward. Not I had to, I needed to.
There's the only, I want you to say,

Speaker 4 I chose to go buy a $50,000 truck that I couldn't afford even in the middle of a bankruptcy.

Speaker 4 I want you to say,

Speaker 4 We made $180,000, and instead of paying $2,000 a month for a one-bedroom apartment, because we are choosing, choosing, I'm owning, I'm choosing to have two dogs in this little bitty space,

Speaker 4 I chose to buy a camper that I couldn't afford. Ownership here is where you got to start because so far the story you've told us is all these things have happened to you.

Speaker 4 And I just want you to exhale and say, I've made some choices.

Speaker 4 And so that means, because here's what, that's freeing. I made those choices and now I can choose to make other ones.

Speaker 4 Because right now you're just waiting for the life to happen to you the other direction. That's not how it works.

Speaker 4 And so there's some kind of reckoning about, man, I did something really dumb. I went and bought a big, nice camper that I can't afford so that we could keep two dogs.
And, bro, I love my dogs.

Speaker 4 Love them. And when my wife and I were getting out of debt and we had to move into an apartment on a college campus with a toddler, I had to pay somebody to keep my two dogs for a year

Speaker 4 because long term, more important than those dogs was my my wife and my son and my freedom. You get what I'm saying?

Speaker 4 Yes, sir. But it just comes with you owning all of this.
Not this happened and then I had to. And this happened and then I had to.
This happened and then I had to.

Speaker 4 I'm going to own this because then you can own what happens next. And George just gave you a literally a one-year plan.
Can you just fast forward to yourself

Speaker 4 this time, not Christmas of 2026?

Speaker 4 You're done with bankruptcy. You owe nobody anything, you and your wife.

Speaker 4 And you finally finally have that clean slate you've been dreaming about for seven years.

Speaker 3 Yep.

Speaker 3 And it's going to be a hellacious year.

Speaker 4 And if y'all move two dogs into one bedroom apartment, it's going to be full of dog hair and smells and all that stuff.

Speaker 1 Great.

Speaker 4 It's a year. It's one year.

Speaker 4 You know what I'm saying?

Speaker 2 Is your wife on board with this plan?

Speaker 3 Yeah, so we've talked about a few different things.

Speaker 3 It's, you know, I told her I wanted to figure out what we needed to do to get our life back on track to where we had money in the bank and we survived.

Speaker 3 And I mean, we live comfortable as we are, but I would love to live better than comfortable.

Speaker 2 I think we need some discomfort before we get to comfort. Right now, $11,000 is probably going to slip through your fingers in the next 30 days.
Am I wrong?

Speaker 3 No, you're not.

Speaker 2 And it's going to go right back out to lenders and minimum payments, restaurants, restaurants, travel, and comfort.

Speaker 3 Right?

Speaker 2 That's what's been happening because that's why we only have 500 bucks when we make 180 grand a year.

Speaker 2 So what I want you guys to do is make a budget tonight where you list out your income, $11,000, expenses. Here's my four walls.
Here's food, utility, shelter, transportation.

Speaker 2 Here's the minimum debt payments. Anything that isn't on that list, we don't spend money on for one year.
Could you guys commit to that?

Speaker 3 I believe we can.

Speaker 4 And the one thing you need more than anything after six years of bankruptcy and starting a new life with somebody is you need some confidence. You need to begin to trust yourself again.

Speaker 4 And you can't think your way to trust. You have to act your way to trust.
Doing the next right hard thing for one calendar year will change everything from your DNA on out.

Speaker 2 Go check out Every Dollar Tyler. We'll get you started.
Kelly's going to pick up. We'll gift it to you if you guys commit to doing this stuff.
And call us back if we can help along the way.

Speaker 1 Don't let big grocery bills spoil your holiday plans. Shop at Aldi first.
They've got USDA choice meats like beef, pork, and even your turkey, along with fresh produce, holiday desserts, and more.

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Speaker 1 You don't need a membership or some loyalty app either. So stop overpaying this holiday season.
Go to Aldi.us to find a store near you.

Speaker 3 That's Aldi.us.

Speaker 4 Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

Speaker 2 Our question of the day is brought to you by YReFi. If your private student loans are in default, it can feel like the end of the road.

Speaker 2 But YReFi helps you find a way forward with a low fixed-rate payment plan that fits your life. Go to YReFi.com/slash Ramsey.
That's the letter Y. R-E-F-Y.com slash Ramsey, not available in all states.

Speaker 2 And we've got something special today. Today's question comes from Bailey in Florida, and it's an audio question.
So let's take a listen, John.

Speaker 3 Hi, my name is Bailey, and I'm from Florida. I'm on Babyson 2, and I'm trying to decide what to do with my car.
I have a 2021 Honda Civic that I owe about $18,790 on, but it's only worth around $17.5.

Speaker 3 My brother works for Ford, and he wants me to get a brand new Ford Maverick with a lifetime lifetime warranty. He's got these employee discounts.
He's able to get all these fees taken off.

Speaker 3 He's kind of been my financial advisor most of my life, and he thinks it's great decisions. He makes great money.
It's not like I'm taking financial advice from broke people, as they would say.

Speaker 3 Should I sell the Civic and get in a cheaper used car while I pay off the rest of my debt? Or would getting a new car make sense?

Speaker 2 Oh, boy, there's so much to unpack here.

Speaker 2 First of all, your brother is your financial advisor, and you said he makes great money, so it's good to take financial advice from him as he tries to talk you into a car that you can't afford, that he's going to make commission off of.

Speaker 2 This whole thing just feels odd to me.

Speaker 4 Not as odd as a Ford Maverick with, quote-unquote, a lifetime warranty.

Speaker 2 Yikes.

Speaker 2 And guess who's making all the money off that warranty?

Speaker 3 His brother.

Speaker 3 No wonder he's rich.

Speaker 2 Yeah, exactly.

Speaker 2 You're in baby step two. You've got your $1,300 underwater on this car.
I'm guessing you will make that within your next paycheck.

Speaker 2 And so just save up a little bit more than that to get a new to you car, get something used. Please do not go out and buy a new car.
I don't care if you're getting an employee discount.

Speaker 2 Buying a brand new car, it's going to depreciate in value like a rock.

Speaker 2 And you're going to be carrying this payment, which is just replacing the payment you have now, which is just broke people mentality.

Speaker 4 Yeah, you basically have a car with a lifetime warranty. It's called a Honda Civic.
Yeah.

Speaker 3 These cars last for eternity.

Speaker 4 They're apocalypse cars. You already have one.

Speaker 2 So if you make 50, 60, 70, 80 grand, and you want to keep the car, then just pay it off in the next year or two and be done with it.

Speaker 2 I don't know if you have more debt than that, but that's where I would start.

Speaker 2 And if you want to sell it and get a cheaper used car, because you said, while I pay off the rest of my debt, that tells me there's a bigger problem here.

Speaker 2 And so, in that case, I think it will expedite your debt-free journey if you sell the Civic for

Speaker 2 $18,000, $20,000, and then buy a $10,000 car. That'll get you out of debt much faster.

Speaker 4 And let's just put this out here.

Speaker 4 George,

Speaker 4 I know in my life, I'm pretty sure I know yours, but let's just put this out there.

Speaker 4 You're pretty good with money,

Speaker 4 pathologically so. I call you and I have money questions, right?

Speaker 4 So I trust you.

Speaker 4 Have you bought a new car

Speaker 2 in my life?

Speaker 4 Since you started cleaning up your money mess?

Speaker 2 No.

Speaker 2 I haven't bought a new car ever, personally. Yeah.
I just got a new to me car, and it was almost new, and I still

Speaker 2 couldn't fathom paying the MSRP retail price. So instead, I found one that was slightly used, and I got a 22% discount.

Speaker 4 I did the exact same thing. My discount wasn't near that high because I bought a reputable brand instead of one you brought.
That helped. But even I couldn't bring myself to buy a brand new car.

Speaker 4 It was new that year, but someone had driven it and they had brought it back for what.

Speaker 2 And we are both in a place where you could, and it would not be against the Ramsey parameters. Cause here's what we say.
If you have a net worth of a million or more, you can stomach the depreciation.

Speaker 2 You can buy the new car in cash.

Speaker 4 Or as Dave says, can you just take that money and set it on fire in your living room and your family will still be able to continue on, right?

Speaker 4 And so it's this, even if you get like a deal and a thing and all the fees taken off, the second you drive that Ford Maverick off the lot, it's worth less.

Speaker 2 It's worth less. It's going to lose 10%.

Speaker 4 You couldn't back it up and resell it back to them for even the same price you just got it, minus all the fees and everything.

Speaker 4 And so, like,

Speaker 4 I've never heard of anybody buying a new caring themselves out of debt. And that really isn't a real sentence I just made up, but you can't buy yourself a new car to get yourself out of debt.

Speaker 4 You just either have to suck it up and pay off this Honda Civic, this 21, which will last you for all of your life, or, like George said, sell it and get get a 20, a 2005 Honda Civic that's still running for $3,000

Speaker 4 and it looks ridiculous and drive that until you pay everything off.

Speaker 2 I drove one of the, I had an 09 Honda Civic. I drove up until a few years ago.

Speaker 4 It's still driving somewhere.

Speaker 2 Well, here's the truth. Kelly Daniel, your producer, her son bought it, and then he crashed it within two weeks.

Speaker 4 I bet you they.

Speaker 2 It's on a pound lot somewhere. I know.

Speaker 4 I bet you they, somebody with a hammer and a chisel, like fixed the thing, and it's still driving somewhere.

Speaker 2 They are truly invincible vehicles. There's great.

Speaker 4 Yeah.

Speaker 2 So, yeah, I think you're stuck in a broke people maze here.

Speaker 2 And I would choose a better role model than your brother who's about to get you into a lifetime warranty and yet absolve you of all of the, he said, all the fees are taken off, except that lifetime warranty.

Speaker 2 That's thousands of dollars extra that you paid. That's mostly commission to him.

Speaker 4 So, hey, I think it's worth calling out here. When you're trying to get out of debt,

Speaker 4 I faced this today, George. Somebody sent me something.

Speaker 4 I'm trying to, I want to buy a place where I can go hunting that's just mine, right? And I can invite a couple of buddies. Somebody sent me something today that's really amazing.

Speaker 4 And it's actually at a really amazing price. And I don't have that money.

Speaker 4 And if you're trying to get out of debt, it's amplified.

Speaker 4 A hundred percent of the people who get out of debt have a quote-unquote great opportunity from their uncle, their dad's trying to sell a thing, or I'm just going to sell you this guitar or this.

Speaker 4 It's always going to come, and you have to stick to it.

Speaker 4 It's just like getting on a really firm nutrition plan for a season, and then somebody shows up at your house with three dozen cookies they just made for your family because you have a choice to make when that happens.

Speaker 4 There's always gonna be a new, a deal, shinier,

Speaker 2 better thing in front of you.

Speaker 4 It can be a great deal, it's just not a good deal for you, especially during the season.

Speaker 2 So, let this be an exercise in saying no.

Speaker 2 All right, Peggy is in Colorado Springs up next. What's going on, Peggy?

Speaker 3 Hi, hey, how can we help?

Speaker 3 Well,

Speaker 3 I wanted to ask, get some advice. My husband and I are in our middle 70s and

Speaker 3 we feel like it.

Speaker 3 We have had an opportunity come up to take a cruise

Speaker 3 in Europe from Rome to Istanbul.

Speaker 3 And

Speaker 3 it's going to cost, I figure, I've been creating a budget for it, and it looks like it's going to cost, I can barely say it, about $35,000

Speaker 3 for the whole thing. And I'm just trying to find out if

Speaker 3 we should even be thinking about spending that kind of money.

Speaker 2 What's your net worth?

Speaker 3 About

Speaker 3 $1.5 million, $1.6 million, somewhere in there.

Speaker 2 And how are you guys covering all of your expenses right now?

Speaker 3 We have a paid-for house that's worth about $800,000.

Speaker 3 and we have our

Speaker 3 monthly regular income is uh about nine thousand and then we each have little part-time jobs so to speak and um so that's a little bit of extra income that's not that's not part of that nine thousand right so maybe call it like ten thousand a month you're making you know six figures a year no payments no mortgage how much money do you have saved for the trip

Speaker 3 well i have i've been looking at cruises like this for a couple of years now.

Speaker 3 And in fact, this cruise, it came up, we got a note from a letter from his alumni association from his college, and it was this particular cruise.

Speaker 3 And it's one I had been looking at, and it was with the cruise line I had decided that we would cruise with whenever we did it. Serendipitous.

Speaker 4 Do you have 35,000?

Speaker 3 Well,

Speaker 3 we have it. We'd have to take it out of

Speaker 3 some of it. I have about $10,000 toward what I was saving for the cruise.
So the rest of it would come out of your retirement accounts?

Speaker 3 A little bit, but it would come out of one of our retirement accounts.

Speaker 2 I mean, you're probably not going to be depleting those retirement accounts in the next few years, right? You got $9,000 coming in outside of that?

Speaker 3 Yeah,

Speaker 3 what I've been doing since we both have earned income, with the RMDs we have to take from the IRA, we've been funding our Roth IRA.

Speaker 4 Peggy, guess what? You're going to Europe.

Speaker 2 I feel like a game show host.

Speaker 4 You're going to Europe. Go and have the time of your life.
Take tons of pictures and rub it in your kids' faces.

Speaker 2 And don't do the math on what it's costing you per hour to enjoy the trip. Just enjoy the trip.

Speaker 4 Have fun.

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Speaker 2 Michael is in South Carolina up next. Michael, welcome to the show.

Speaker 3 Hey guys, thanks for taking my call. Appreciate what you guys do.

Speaker 3 So I'm in a sales position that has like a base plus a bonus that you get throughout the year, then you get a bigger bonus at the end of the year.

Speaker 3 End of the year is here, and I'm expected to get a bonus, or I will get a bonus that I will most likely never get again. And so, I want to use this money as best my wife and I possibly could.

Speaker 3 And so, how big is this bonus?

Speaker 3 It's about $200,000 before taxes. Goodness, Gene, is there any openings?

Speaker 3 You guys hiring? Well, yes, there are, but hey, what do you say?

Speaker 4 I'm interested. Why do you think you'll never have this good of a year again?

Speaker 3 So, the way our

Speaker 3 structure is that you get your base salary and then based upon the quota, your percentage of your quota, you get a bonus based on what percentage of your quota you get to.

Speaker 3 And that bonus is a percentage of your base salary. It's confusing.
It's actually pretty common in the sales world these days.

Speaker 3 But so I basically had a pretty low quota last year and blew it out of the water. And so I know my quota this year is just going to get higher and higher and higher.

Speaker 3 And hey, I expect to blow it out of the water. Why don't you blow that one out of the water, dude? Yeah, man.

Speaker 2 So what's your total salary for the year if you get this $200,000?

Speaker 3 Maybe salary right now is about $80,000.

Speaker 2 Okay, so 80 plus the 200?

Speaker 3 That's just one.

Speaker 3 I got commissions throughout the year that totaled about $60,000 or so.

Speaker 4 Nice. Homie had the year, man.
$340,000.

Speaker 3 Yeah,

Speaker 3 it was a good year. It was a good year.
Great. Are you married?

Speaker 3 I am. I'm married.
We have two kids.

Speaker 3 And the dilemma that we're in, so we have a house that we bought like five years ago, and we just recently moved into a new house, new to us, and we rent the other house out.

Speaker 3 It's got about $100,000 left on it at a 3% interest rate. The new house we're in has like $290,000 on it at a 7.25%.

Speaker 3 So you're probably getting at where I'm going.

Speaker 3 Sure.

Speaker 2 How much do you guys have in savings?

Speaker 3 So in our savings, so we have in our savings and our,

Speaker 3 if I logged into my apps, about $20,000. We have about

Speaker 3 $10,000 to $15,000 a brokerage account that's totally separate. And then I have some retirement accounts and stuff as well.

Speaker 2 And any other debt outside of these two mortgages?

Speaker 3 So I would normally say no, except I did recently buy a mower and it's 0% down for a year. So I've just been paying what it will cost to pay it off.
I know. Bro, you make $340,000 this year.

Speaker 3 But I'm going to finance a money. I'm going to have a $20,000, but I'm putting like $200 a mux on it

Speaker 2 okay well we'll pay that off with your bonus how about we start with stretch and pay that off all right deal what will be your what will be the actual net from all of this like how much will you net by christmas to be able to throw at these mortgages

Speaker 3 i'm hoping to have

Speaker 3 i'm i'm i'm gonna say a hundred thousand but i mean it could be possibly a hundred and twenty to a hundred and thirty thousand dollars that i could do anything i want with okay

Speaker 2 so if i was in your shoes, normally we'd say, let's knock out the primary mortgage first.

Speaker 2 But if you can knock out this rental mortgage with one fell swoop and free up that payment to now apply to the other mortgage, I would go that route and attack the primary aggressively at that point.

Speaker 3 Okay. That's kind of where I was leaning as well.

Speaker 4 Yes. And

Speaker 4 good. Can I just say, dude, out of the gate, you know what you're thinking? Like, you're thinking like a farmer.

Speaker 3 Like the old school farmers that have a... They have a homestead, yeah.

Speaker 4 Do you have a homestead?

Speaker 3 We do. We have some garden and some animals that bring in some stuff.
Yeah.

Speaker 4 Okay, so like this, like this idea has been lost on us as a culture, but farmers for all of human history would have a year that was just record yield, and it was amazing. And

Speaker 4 they knew it doesn't happen every year. And every five to seven to 10 years, there's a bust year.

Speaker 4 Right?

Speaker 4 And so the fact that you're as young as you are, as successful as you are, knowing I crushed it this year, I made 340K this this year. I'm probably

Speaker 4 not going to make that next year. Most people in your situation go buy a house based on I make $340 a year and they buy two stupid cars.
Good on you, man. This is awesome.

Speaker 2 And I would enjoy some of it too.

Speaker 2 So I think you and your wife sit down and go, hey, we're going to knock out the mortgage, anything above and beyond that, well, and the mower, anything above and beyond that, we're going to enjoy some of it.

Speaker 2 We're going to give some of it, maybe stack some in the emergency fund if you want to beef that up a little bit.

Speaker 2 And man, that's going to free up some cash flow.

Speaker 2 Because because now you're that property is cash flowing pretty nicely with no mortgage on it what will you be netting from that property once it's paid off

Speaker 3 it'll be about 700 after rent is what we'll get for it 700 bucks profit so

Speaker 2 that's right are you even profiting right it sounds like you're losing money on this thing right now then

Speaker 3 Well, so the mortgage on the house is about $700 and we charge about $1,400 for it. So we'll bring in about $700.
No, but

Speaker 3 once I pay off the mortgage.

Speaker 4 But yeah, you pay off the mortgage. you'll be making $1,400 a month, right?

Speaker 3 That's right. Yeah, I think that's what I'm saying.
That's what I was thinking. In my head, it's like I want to put some of it back into it.
But yeah, I guess I would be netting $140.

Speaker 1 Oh, I forgot.

Speaker 4 You're really wise. My bad.
Yes.

Speaker 4 Man,

Speaker 4 if you keep a small fund for taxes and insurance in that house, and if you start building a small emergency fund for when, not if, the air conditioner fails and the roof needs to be replaced, bro, you are so far ahead.

Speaker 3 So far ahead, man.

Speaker 4 That's incredible, dude.

Speaker 2 And I would sit with your wife wife and set maybe a four or five-year goal to knock out your primary mortgage. Because how old are you, two?

Speaker 2 30. 30.
So think about this. 35 years old.
You have not a payment in the world. Two paid-for houses.
Two paid-for houses.

Speaker 2 One's cash flowing, and you're still making hundreds of thousands of dollars a year.

Speaker 2 It's a pretty sweet life.

Speaker 3 Yeah, that would be amazing.

Speaker 4 Or how about this? What if you did a hold my beer and you said, I want to scratch and claw, honey, for one more year?

Speaker 4 I want to be the most aggressive salesperson on my team, and they're going to give me a bananas quota, and I'm going to crush it too.

Speaker 4 Let's see if we can pay this house off in 18 months, our primary house.

Speaker 3 Oh, yeah.

Speaker 4 You know what I mean? And then, but then have a destination. After that, we pack up and we all go to Disneyland or Disney World or wherever, or we go to Jamaica, whatever you want to do.

Speaker 4 And then you look at her in the eye and say, then

Speaker 4 I'm going to exhale. I'm not going to be the most crazed out aggressive because I want to be present for you and these kids.
But we have a chance in the next 24 months to set us up forever.

Speaker 3 All right. Well, it sounds like I'm on the right page.
My mind was like, well, hey, should I focus on refinancing this house to bring this payment down?

Speaker 3 Or do I just pay off the other house completely?

Speaker 2 You can figure out what the break-even is on, you know, when you're actually going to break even on that refinance because it'll cost you a little bit.

Speaker 4 7.25 and bring it down to what, what is it right now, 5.5?

Speaker 2 Are you on a 30-year?

Speaker 3 I'm on a 30-year right now. Yep.

Speaker 2 You could probably refinance into a 15 and have you know, right in the fives right now. That'd be worth it.

Speaker 2 Your payment's going to go up because it's a 15, but you'll knock that thing out within a few years and be done with it.

Speaker 3 Yeah. Because way more is going to principal.

Speaker 2 I dare you to go look at that amortization schedule. You're going to throw up seeing how much is going to interest versus principal on that balance.

Speaker 3 Oh, I hate it. Every time every month and I get the statement, I'm like, ugh.

Speaker 4 And I don't know if you're like me, and my wife always makes fun of me about this. I have a weird thing about the first number, right?

Speaker 4 So when we were paying off debt, I was like, I just need to get it with a two in front.

Speaker 4 I just need to need to get with a one in front right even if it was 199 999 like i just needed to get that number if i'm you i'm looking at that seven in front if i could refinance that and even i was going to recoup in 12 to 18 months and i could get a five in front i would just feel better you know what i mean

Speaker 2 yeah yeah i'd get in touch with uh like a best case scenario go ahead no i was just going to say if you want to just run the numbers our friends at church hill mortgage can just help show you the numbers and go hey this makes sense or this doesn't make sense based on your situation and and the market.

Speaker 3 Okay. And I'll tell you,

Speaker 3 when I called Churchill,

Speaker 4 when I called Churchill and asked about refinancing a couple years ago, the first thing

Speaker 4 my Churchill person told me is, I'm going to dig into this and run the numbers. I will not take your business if this isn't a good deal for you.
And that's how I knew, oh, you're my right person.

Speaker 4 Real deal.

Speaker 3 Yeah.

Speaker 3 Well, that's great. That's awesome.
Hey, congratulations on A.

Speaker 2 great job. Can I ask what you sell?

Speaker 3 I sell security systems, fire alarms, that kind of stuff.

Speaker 2 You're dang good at it, dude. They don't give out money to people who aren't making them a lot of money.

Speaker 4 Especially salespeople.

Speaker 2 Yeah, you've earned it and more. So congratulations.
And you can jump on to churchhillmortgage.com and get in touch with their team over there and help you run these numbers.

Speaker 2 And it might save you some. I think at the rate you're going, you're just going to knock this out.

Speaker 2 And so they might go, yeah, if you're going to knock it out in two years, it may not be worth it, but it's going to be seven. Sure, let's refine it.

Speaker 4 And have an amazing Christmas for your wife.

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Speaker 2 Get a crazy gift that blows her mind.

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You can get it in the App Store or Google Play.

Speaker 2 Mark is in Ohio up next. Mark, welcome to the show.

Speaker 3 Hey, guys. Thanks for taking my call.

Speaker 4 It's an honor.

Speaker 2 Absolutely. How can John and I help?

Speaker 3 Well, I'm calling about my father. He's

Speaker 3 been a Christian for probably nearly 50 years. He spends his life, you know, every day serving people.
That's his calling.

Speaker 3 And he owned a construction business for something like 35 years. And during that time,

Speaker 3 he's acquired a lot of rental properties, all debt-free. And

Speaker 3 the issue is, what I'm calling you today is talk about, is that he doesn't have a will or an estate plan.

Speaker 3 And he says that he doesn't need one because he believes that the Lord will return before

Speaker 3 his death or during his lifetime.

Speaker 3 Okay.

Speaker 3 So how do I encourage him to do that without making it feel like

Speaker 3 he's questioning his own own faith. And who am I to do that?

Speaker 2 What date does he have in mind? Can he tell me when the Lord would be arriving?

Speaker 3 No, no,

Speaker 3 no, he doesn't have any date or anything like that.

Speaker 2 Just before he during he croaks, he's like, it's definitely going to happen before I pass.

Speaker 3 Yeah, yeah, that's what he believes.

Speaker 2 But he knows that. He has good authority.

Speaker 3 Yeah, yeah, yeah.

Speaker 4 All right. Here's what I would say, dude.
This is a very tough situation. I would sit down with him and say, dad um

Speaker 4 like watching you do life has been one of the greatest learning lessons and like coolest things any son could ever have i've watched you serve people i've watched you probably he probably gives rent below market value right probably takes care of people is that true Oh, yeah.

Speaker 4 Yeah.

Speaker 4 So like if you lead off this conversation by saying like watching how you serve your local community and you go make money and you figured out how to do both of those well and you've dedicated your life to God like all that's amazing it's been a high privilege being your son can I ask one thing of you in the event

Speaker 4 in the event that something does happen to you

Speaker 4 before the Lord returns

Speaker 4 this would be a huge mess for me

Speaker 4 right

Speaker 4 would you do me the honor and because some people think wills are for them would you do do me the honor of putting this stuff down in writing on the off chance?

Speaker 4 Because you're not going to convince him, right?

Speaker 4 Like, you're not going to make a rational argument. He's going to be like, you know what, you're right.
He's not going to do that.

Speaker 4 And so really what you're appealing to in this moment is

Speaker 4 your sense of discomfort.

Speaker 4 Yeah.

Speaker 4 That to me is the only shot you got. Do you have siblings?

Speaker 4 Yeah, there's 10.

Speaker 2 10 of us. That sounds fun.

Speaker 2 So

Speaker 2 how does he feel about the government?

Speaker 3 He's

Speaker 3 not a fan.

Speaker 2 Well, he is a fan because he's letting the government decide what happens with his estate.

Speaker 4 That's the way to say it.

Speaker 3 Yeah, you're right. And I've talked to him.
And he loves the government, actually.

Speaker 2 He trusts the government to handle all of his estate planning right now. He's hired him out.

Speaker 3 Yeah, you're right.

Speaker 4 And they're happy to do whatever they want with his property.

Speaker 2 They're happy to take his probate fees on top of his estate taxes as all this unfolds. So here's what I would say.

Speaker 2 Even if Jesus returns tomorrow, scripture still calls us to be wise stewards today because we don't know what tomorrow is going to bring. And so you can appeal with that.

Speaker 2 You can appeal with the government angle. You can appeal with the Mark Wants It for Security and Peace of Mind angle.
Because here's what we do know.

Speaker 2 The calls that we take on this show, where 10 siblings are involved dividing up a very complicated estate, never ends well. It ends with relational resentment.

Speaker 4 And even if all 10 of y'all are on the same page, which there's 0% chance of that, right?

Speaker 3 Yeah, right, right.

Speaker 4 It's those 10, and y'all have all married other people.

Speaker 4 And they all have cousins.

Speaker 4 And they all think that by marrying into a construction

Speaker 4 empire, that they're going to suddenly get rich.

Speaker 2 And Uncle Randy wants a piece because he helped him with that deal one time. That's right.
He told me he was going to craft for you guys.

Speaker 4 He promised me.

Speaker 4 And, bro, getting 10 signatures to simply sell one $110,000

Speaker 4 rental property is a nightmare.

Speaker 2 It'll be a reality show on HDTV. I'll tell you that much.
Right.

Speaker 3 Yeah, that's my biggest fear, you know, is causing issues amongst the family.

Speaker 4 Have you told him that? Because that's another big one. Dad, I want to

Speaker 3 know that I have.

Speaker 4 I want this family. I want my brothers and sisters.
I want us to all stay united after you pass.

Speaker 4 In the event you pass before Jesus returns, I want us to all stay united, and this will be tough.

Speaker 4 Like, you're almost guaranteeing that y'all will all dissolve your relationship in some shape, form, or fashion.

Speaker 4 Right.

Speaker 4 I hate that you're in this situation, man, because your dad says like a pretty amazing guy. He's just got this thing in his mind that's pretty tough.

Speaker 4 And it might be a protective measure for him because he doesn't want to.

Speaker 4 He has been a pretty strong guy and a guy that's always been in control of who he's giving and his own company and all that.

Speaker 4 And the thought of being in a hospital bed, the thought of passing away is so heavy

Speaker 4 that it's easier to create a story that

Speaker 4 I know it's going to happen. Which, if scripture is pretty clear, you don't have any idea when it's going to come.
Nobody does.

Speaker 4 Right, right. Right.

Speaker 3 Yeah, well, hopefully, if he hears this, maybe this will help persuade him.

Speaker 2 I hope so, man.

Speaker 4 Yeah, send him the call.

Speaker 3 Send him a call.

Speaker 4 Because

Speaker 4 George and I are both sitting here. What an amazing guy.
What an amazing legacy he's left. And

Speaker 4 what a way to pit brother against brother and sister against sister. Or

Speaker 4 brother's wife's cousin suing everybody because they tripped and fell on one of the houses.

Speaker 4 You know what I'm saying? It's just, golly, what a recipe for dissension among your family tree that you've spent so much time watering and growing.

Speaker 2 Right. Yeah.
There's so much out of his control, and yet there's so much in his control. And this is one of the things he can control during his time left here on earth.
And I hope it's a long one.

Speaker 2 All right. Let's get to Sue in North Carolina.
Sue, get right to the question. We're up against the clock.
How can we help today?

Speaker 3 Yes, sir. I was calling actually to find out when you sell your house.
That's what my husband and I are getting ready to put our house up on the market on February 1st of 2026.

Speaker 3 And the big thing is that we're having a problem with when we we're moving up near St. Louis from Charlotte, North Carolina.
And

Speaker 3 my husband and I are not agreeing on

Speaker 3 where we should live. You know, if we should go ahead and build a house while we're living in our house or should we and sell in our house or should we, you know, rent there and then build.

Speaker 3 So I don't want to rent, but he does.

Speaker 2 What's his argument for renting?

Speaker 3 Kind of, you know, each other's throats about it.

Speaker 2 Well, is he stressed out with the idea of trying to sell this house and we don't have the money from the equity and we're trying to build this new one and we need a loan for that?

Speaker 3 Oh, I'm sorry to interrupt.

Speaker 3 I'm trying to get to the bottom of it. Yeah, we have $225,000

Speaker 3 equity.

Speaker 3 Okay. So we're doing well.

Speaker 2 And we bring in, you know, about $8,000 a month.

Speaker 3 You know, we're retired. We do a little over 60,

Speaker 3 and we don't have too much debt.

Speaker 3 So we're just, this is, we've been in this house for 25 years, and it's a turnkey. So everything's ready, I'll accept just a few little repairs, like about $5,000 worth.

Speaker 4 Sue, I can tell you, Sue, every time me and my wife have moved, especially we move towns, we always rent for six months at least.

Speaker 2 Okay. Can they compromise a short-term lease just to kind of get the the lay of the land, get your bearings? Because moving is already so stressful.

Speaker 4 Where's the grocery stores? Where is the nearest place for the grandkids? Like all of those little, like where's the restaurants? All of that stuff.

Speaker 4 Man, finding a new place in a new community,

Speaker 4 that's a tough lifestyle shift.

Speaker 2 And then the timing of it gets tight to try to time it all to sell yours, close on yours, close on the new one all in the right time.

Speaker 2 So if you can make all that happen and not be stressed financially or otherwise, go for it. But I think there's a lot of wisdom in just renting for just six months.
It's not a long time.

Speaker 4 You can put your stuff in storage, put it in storage, and then say, Okay, I'll rent, but you've got to hire like turnkey movers that will get it out of the storage base and put it exactly where I want it.

Speaker 4 And he has to leave town while the move happens.

Speaker 2 Oh, yeah.

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Speaker 2 Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. I'm George Campbell, joined by my good friend Dr.
John Deloney, and we're taking your calls at 888-825-5225. Give us a call.

Speaker 2 We'll try to help you take the right next step for your life and your money. Tyler is in Texas up next.
What's going on, Tyler?

Speaker 3 Hello.

Speaker 3 Nice to be talking with you today. You as well.

Speaker 3 I'm a buried man.

Speaker 3 I just became a dad last year. My

Speaker 3 year and a half.

Speaker 2 Fantastic. And

Speaker 3 we just got rid of over $100,000 in student loans.

Speaker 4 Yeah, dude. Congrats, brother.

Speaker 3 Thank you very much. And now we're in an interesting predicament.

Speaker 3 So we want to buy a house. We are completely debt-free at the moment.

Speaker 3 But I am currently with a second job. I'm the maintenance man at our proper complex part-time, and we have free rent.
Oh, heck yeah. And we, so we'd love to

Speaker 3 get into a bigger house, and we kind of need it, but gosh, how can I walk away from that?

Speaker 4 One word.

Speaker 4 Three words. Sorry.

Speaker 3 I was going to say one word.

Speaker 1 One three-word sentence.

Speaker 4 One three-word sentence. All right.
You ready?

Speaker 4 Okay.

Speaker 4 With a plan.

Speaker 3 Right.

Speaker 4 My wife and I did the exact thing. I moved into a residence hall.
One of the things at the university was over, I was over housing, so we got to live in that apartment for free.

Speaker 4 And there was me and my wife and a toddler in a very small place, and it worked for a season.

Speaker 4 And so we had a plan. We had an end date, but that end date was contingent on two things.
One, my wife and I shook hands on it, and two, there was a financial goal we were going to try to get to.

Speaker 3 Exactly.

Speaker 4 I think the challenge for you guys is this thing kind of feels indefinite.

Speaker 3 Right, it's indefinite. And

Speaker 3 we feel like the end date of this is going to be dependent on

Speaker 3 getting a certain amount of down payment

Speaker 3 and being able to achieve a certain monthly payment that we think would be

Speaker 3 very manageable and would give some wiggle room to give us some incidental spending without dipping into our emergency fund because we don't want to be house-trapped with too much of a payment.

Speaker 4 Absolutely.

Speaker 3 But where we're we want a three, ideally a four-bedroom house, and something like that where we are living is looking at about a quarter million dollars. Okay, great.
And that's

Speaker 2 that's not undoable, but most of America is like, that's it? That's amazing.

Speaker 3 I want to move to your town.

Speaker 4 Don't tell anyone what town you live in because everyone will move there.

Speaker 3 Right, right. Well, we want to keep our payments under two grand a month for sure with everything in the middle.

Speaker 2 So we have our magic numbers. The house is going to cost $250,000.
We want to keep the payments around two grand. So how much down do you need? I can do the math for you right now.

Speaker 2 On a 15-year, you're looking at maybe 60 grand down. Does that sound right?

Speaker 3 Yeah, it sounds about right to me.

Speaker 2 How much do you have currently saved outside of your emergency fund?

Speaker 3 We've got $14,000 directly dedicated for down payment at the moment.

Speaker 3 And we can probably do $3,500 of momentum towards that a month.

Speaker 2 So that's

Speaker 2 one year from now, you have your number.

Speaker 3 Ta-da.

Speaker 2 Ta-da. 42 plus to 14 with high-yield savings account.
You'll get right around 60.

Speaker 3 So a year.

Speaker 4 And you sit down with your wife and you say, we have one year of,

Speaker 4 and if y'all want to cut spending, she wants to make some money on the side, whatever, it just accelerates this.

Speaker 3 Right.

Speaker 4 And we get $60,000. We have 14, so we have 46,000 bucks left to go.
It's going to take us about a year.

Speaker 4 And then we're out of here.

Speaker 3 Well, cool deal. So within the Dave Ramsey framework, it is within the realm of blessing to walk away from free living in favor of something like this.

Speaker 4 Dave pays an insane amount of money to keep up his various houses.

Speaker 3 Yes.

Speaker 2 Free rent would never stop Dave from buying real estate. I'll tell you that much.
He would just use it to accelerate buying more real estate.

Speaker 2 Because here's the other thing to think about. That real estate is going to cost you more five years from now.
And so at some point, the free rent party is going to end.

Speaker 2 At some point, you're not going to want to live in an apartment or you're going to have a big enough family where it doesn't make sense. And so I would start planning for that day.

Speaker 2 And it starts today, my friend.

Speaker 4 That's awesome, dude.

Speaker 3 Well, I appreciate that. Well, thank you for the thank you for that advice.
That's really helpful.

Speaker 4 Hey, congrats for your new kid. Congrats on you being a dad who is and a husband who is putting in two jobs to

Speaker 4 put his family in a position where they're going to... That's all.
This is awesome. We don't get to talk to a lot of great dads and great husbands.
You're one of those guys.

Speaker 4 And so it's an honor to talk to you, brother.

Speaker 2 And the fact that you've created $3,500 in margin just to throw at this savings, it just blows my mind. It's fantastic.
It's very inspired, man. Thanks for the call.

Speaker 2 Elizabeth is up next in Cedar Rapids, Iowa. What's going on, Elizabeth?

Speaker 3 Hi. My question is if I can afford to put my kids into a Catholic school.

Speaker 2 Ooh, what's that cost?

Speaker 3 So it is about six to seven grand a year is my understanding.

Speaker 2 Per child?

Speaker 3 Per child.

Speaker 2 How many kids?

Speaker 3 So I have two kids, and they won't need the first one, it wouldn't start for another year and a half.

Speaker 2 Okay. Do you have 14 grand of net income to throw at this without derailing any other financial goals?

Speaker 3 Well, with with already daycare costs, I feel like my thought is that would just channel into

Speaker 3 what the cost of

Speaker 3 Catholic school is. So that I feel like we're making things work right now with daycare costs.

Speaker 2 When you say making things work, are things tight? Do you guys have debt you're trying to pay off? Do you have savings?

Speaker 3 Just our mortgage to pay.

Speaker 3 And I'd say we're probably like pretty close to breaking even each month as far as expenses going out with mortgage and daycare and then

Speaker 3 just household things.

Speaker 2 Are you investing right now?

Speaker 3 Yes.

Speaker 2 Okay, so you're investing 15%. You have an emergency fund.
You have no debt. You're doing the baby steps to a T, but all the money is allocated to those places.

Speaker 2 And right now you don't have extra money to throw at, let's say, the mortgage or toward kids' college funds.

Speaker 2 Pretty much. So what's the plan with that stuff? If this is the foreseeable future for the next, I don't know, 10 years?

Speaker 3 That is a good question.

Speaker 3 I mean, as far as knowing that daycare currently with two kids is probably about $25,000 that I'm paying a year,

Speaker 3 I would...

Speaker 3 I see the balance as, okay, well, this isn't as expensive as that. So I should be able to do that.

Speaker 2 So the $10,000 you save, you could funnel toward, you know, $529 plans for college, throw a little bit at the mortgage.

Speaker 3 Okay. Correct.

Speaker 2 I mean, it sounds reasonable. What's your household income?

Speaker 3 About $160

Speaker 3 a year.

Speaker 3 And my husband is commissioned, so his is a little bit more fluctuating. It's variable.
Okay.

Speaker 2 Yeah, I mean, it's green flags for me. If this is a big value to you guys, it's a part of your faith and you want to do this and you have the money and it's not derailing your other financial goals.

Speaker 2 I'm good with it.

Speaker 4 Here's what it's going to cost you, though, okay? I want to be sober about it. Oh, yes.

Speaker 4 Given the financial picture you just gave, George and I,

Speaker 4 it's, it's, or me and George, it's going to cost you, y'all are going to be a Camry family.

Speaker 4 Okay. And you're not going to go by the big suburban.

Speaker 4 And when you get into the middle school and high school, and your kids are doing sports and athletics and everyone's rolling up and new escalades and stuff like that because that's a private school.

Speaker 2 And going on vacation for fall break.

Speaker 4 That's right. Y'all are going to, this is, this is enough of a value for y'all that it's gonna be worth.

Speaker 4 We're gonna be a huge Camry family because this is that big of a deal to us. And that's okay, that's amazing.
I love that choice.

Speaker 4 But I want you to make those choices with sobriety, not always being like, Man, I wish I had different car. We need a bigger house.

Speaker 4 Nope, this was our value, and this is what we chose.

Speaker 5 Hey, you guys, Rachel Cruz here. Look, I know you want to do better with money, but let's be honest, life seems to be getting more and more expensive.

Speaker 5 And lately, you hardly have any breathing room in your budget to do anything but cover the basics. You work way too hard to feel broke.
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Download the Every Dollar app for free today.

Speaker 2 Buying or selling your home is a big deal, and there's a lot of clickbait headlines and conflicting data out there. So, we're here to make the latest trends easy to understand.

Speaker 2 Median home prices dipped a bit last month to about 426,000, and buyers have more options in negotiating power, and sellers may be facing more competition right now.

Speaker 2 Mortgage rates dipped slightly to 5.5% in September, which is giving buyers some breathing room.

Speaker 2 But since rates are unpredictable, the best time to buy is when you're financially ready, not when rates drop.

Speaker 2 So, to learn more about housing market trends and get free tools to help you buy or sell with confidence, head to ramseysolutions.com/slash market or click the link in the show notes if you're listening on podcast or YouTube.

Speaker 2 Ashley and Dan are up next in Virginia. What's going on, guys?

Speaker 3 Hi, so we recently moved from the south from Baton Rouge, Louisiana, to Virginia.

Speaker 3 We previously tithed, thank you, we previously tithed at a church that we had been going to probably almost a decade in Baton Rouge. And we haven't found a church home yet.

Speaker 3 We've tried a couple and we've been looking around and we just don't really know where to tithe.

Speaker 3 I was a very strict tither and my husband Dan did probably like at the end of every year, he would just do 10% of everything he made. He would

Speaker 3 donate at the end of the year.

Speaker 3 So we just don't know where we should tithe to now.

Speaker 2 Great question.

Speaker 4 Where are you feeling convicted to give?

Speaker 4 I

Speaker 3 really loved our church. We both really loved our church that we used to go to.
And if we're not together, if I go visit home or something, we'll still watch that church that's in Baton Rouge.

Speaker 3 And so that's where I tithe until we started going somewhere new.

Speaker 3 And then I gave one time

Speaker 3 a tithe to one of the churches that we went to because I felt like, you know, I probably should do something here in my local community instead of back home.

Speaker 3 But now I just don't know since we haven't settled.

Speaker 4 Are there a bunch of kids in your community that just lost food benefits?

Speaker 3 I don't believe so. I think Virginia is still

Speaker 3 doing all the food benefits like statewide.

Speaker 3 But that is that is a consideration. The church that we have been going to has been giving a lot of money.
I think in

Speaker 3 related $20,000 to communities

Speaker 3 that had lost or were at risk of losing food benefits.

Speaker 2 Well, let me free you. There's no wrong way to give as long as you're doing it with a joyful spirit.
And so you're not going to screw this up.

Speaker 2 If you're asking the options, you could give to your old church for now. You could give to every new church you jump into on Sunday.
You could stack it all up and give at the end of the year.

Speaker 2 Maybe you find a church home and you just save up all that money and throw it at that new church that you call home.

Speaker 4 Or you can go find a local elementary school and say,

Speaker 4 we hear there might be a gap in school breakfasts and lunches, and we want to be a part of filling that gap.

Speaker 4 Consider the spirit of the thing,

Speaker 4 not

Speaker 4 maybe the destination, right?

Speaker 3 Yes, that makes sense. That makes sense.
Yes.

Speaker 2 I'm just proud of you guys. That's a really cool thing to say this is a really important value to us, and we want it to go somewhere, and we just don't know exactly where until we land.

Speaker 4 Keep George's words in your head, which is a sentence I've never said before. Wow.
You can't mess this up.

Speaker 4 Generosity is a...

Speaker 3 Thank you all so much.

Speaker 4 Generosity is a posture. It's a way to do life, right?

Speaker 4 Yeah.

Speaker 2 I think

Speaker 2 you're going to do the right thing. Whatever that thing is, whatever you do, it was the right thing.
I want you to know that.

Speaker 2 John is in San diego up next john welcome to the ramsey show how can we help today

Speaker 3 hey yeah thanks for jumping on with me i just have quick question for you guys to see where to put some money and kind of pick your brain a little bit i'm 20 excuse me 30 years old i live in san diego california um i've got no debt at all my company pays for my car i just have to pay the gas on it as well as very minimal monthly expenses I make about $300,000 a year and have about $200,000 in savings.

Speaker 3 And I'm just curious to know if

Speaker 3 there's anything I can do to put this money anywhere to help save on taxes. I don't own any houses or anything like that.

Speaker 3 And also, I just feel like in San Diego, it's kind of impossible to buy a house with what I've got going as well.

Speaker 2 It's impossible to buy a house with what you've got going. What does that mean?

Speaker 3 Just like the income that I have and the savings that I have and just the prices in San Diego have absolutely soared and my job. Okay, what? So you're a single guy?

Speaker 3 Yes.

Speaker 2 Okay, so what is a small home in your area cost that you would want to buy? Give us a number.

Speaker 3 Probably about 1.4.

Speaker 2 Okay, so how much would you need as a down payment to make that a manageable mortgage payment in your world?

Speaker 3 Probably about

Speaker 3 7 grand, I think, would be what it would be right now with 20% down, which seems like a lot.

Speaker 2 Okay, so 20% is is the goal? That's the number that would get you into a home?

Speaker 3 Correct. I mean, I'm just trying to avoid that PMI, but is that even smart to have to do as well? Or should I just look at other avenues like buying out of state to continue renting here?

Speaker 3 I don't know. You're lost.

Speaker 2 Oh, you don't need a house right now. You're a single guy.
If you want a house, that's fine. I don't know that you need a $1.4 million starter home.
Now, I know prices are insane out there.

Speaker 2 That's probably a starter home in San Diego.

Speaker 2 But you're telling me that it's impossible for a guy with no debt, with 200 grand saved, making $300,000 a year, that he'll never be able to afford a home in San Diego.

Speaker 4 That's what it's seeming like.

Speaker 2 And you said you have very little expenses. How much can you save per year at this point if you're living frugally and throwing most of your net income at that savings goal?

Speaker 3 Probably 80 to 100.

Speaker 2 Out of 300? So you're saying 300 gross, you net, what, 180 or so?

Speaker 3 Around there, depending. It's variable.
A lot of it's commissioned. So it's between 250 $250,000 and $300,000.

Speaker 2 $15,000 a month.

Speaker 4 You could somehow figure out with no expenses and no debt how to scrape by on $80,000 by yourself?

Speaker 4 Correct. I bet you could scrape by for less than for less than.

Speaker 2 In the ballpark, though, you could throw $100,000 a year into the savings, right?

Speaker 2 So four years from now, you have $600,000 saved.

Speaker 2 I think that can get you a house.

Speaker 2 So just hold off a little longer.

Speaker 2 Yeah.

Speaker 3 It's not like it's not a now or never in that meantime, correct? Is there anything I can do in that meantime between now and the next four years to help me save on taxes?

Speaker 2 Well, that's a different question. Buying a house for a saving on taxes.
If you're a W-2 employee, there's not a whole lot you can do. Now, you can max out a traditional 401k.

Speaker 2 That'll help a little bit.

Speaker 2 But there's not like some magic trick. If you're W-2,

Speaker 2 John and I pay a whole bunch of taxes.

Speaker 4 And I'll tell you this, you are in the,

Speaker 4 I'll make up a term, you're in the squash bracket where if you made significantly less, there's programs to help you with taxes or to pay none. And if you made significantly more,

Speaker 4 you're in this big wild,

Speaker 4 it's a whole nother universe of buying a property over here and moving it over here and triple stamping and double stamp.

Speaker 4 You are in the squash where you are making a significant amount of money and you're getting getting crushed on taxes.

Speaker 4 And you live in one of the highest tax states in the country and you live in a really

Speaker 2 high cost of living area.

Speaker 4 High cost of living expensive place to live.

Speaker 4 So you have three like really gnarly compounding variables on you. But this is a conversation folks who make, and nobody has any sympathy, right?

Speaker 4 Nobody, but people who are making 300 grand to one 1.5 million are getting hammered on taxes because they're just below the big games that guys with tons of money play with tax money.

Speaker 4 And they're just above any sort of relief program whatsoever.

Speaker 4 Sure. So this is where you are.
And as one of my buddies once, one time I called him and said, hey, this is, I've never had this happen in my life. I had a book go number one.

Speaker 4 I called him and said, I just need to tell one person, he's a banker, how much I spent in taxes last year. And he said, good God, that's a lot.

Speaker 4 And then he goes, wait a minute, that means you make a bunch of money. I'm never paying for drinks or nachos again.
And we all started laughing. And so there is, yes, you're paying a bunch of taxes.

Speaker 4 You can smile at night knowing that the roads are getting taken care of and the firefighters are showing up and so be it. Or you can just beat yourself over the head every night.

Speaker 4 But either way, you're in that category that's paying a ton of taxes and there's no games to play or relief

Speaker 3 in your bracket.

Speaker 2 I just keep stacking as much cash as possible, keep living frugally, and sooner or later, you're going to have a half a million bucks. And I would get into the housing market when you can.

Speaker 2 I wouldn't wait a a decade and I wouldn't do it tomorrow either. Or you can move out to the suburbs.

Speaker 4 You're paying a lot of taxes and you're also winning incredibly.

Speaker 2 Congratulations.

Speaker 5 Hey guys, it's Rachel Cruz, and I've got great news for you. The Ramsey Christmas Cash Giveaway is here.
We are giving away $500 every week, plus a grand prize of $5,000 in cash.

Speaker 5 Listen, you can enter daily to boost your chances of winning, and there's no purchase necessary. Just go to ramseysolutions.com/slash giveaway.
That's ramseysolutions.com slash giveaway.

Speaker 5 Good luck, you guys.

Speaker 2 Jenna is in Florida up next. Jenna, welcome to the show.
What's going on?

Speaker 3 Yes, hi. Thank you so much for taking my call today.
I was calling, wanted to kind of see some professional help. I wanted to see if there's ever

Speaker 3 a point where there's just too much debt. We don't worry about the debt.

Speaker 3 We just say, hey, pay minimum still, you know, forever and just try to save up as much money as you can so you can actually try to enjoy retirement and life later on.

Speaker 2 You sound tired, Jenna.

Speaker 4 Are you tired? Tired.

Speaker 3 Nervous about what you guys are going to say. I mean, you know what we're going to say on the Ramsey show.

Speaker 2 But you're saying, hey, our debt is so insurmountable. Should we just ignore it and have a wonderful retirement? I don't know how that thing leads to the other thing.

Speaker 3 Right. Yeah.

Speaker 2 Like, it doesn't go away.

Speaker 3 I don't know.

Speaker 2 So, either collectors come after you, sue you, or you file bankruptcy, it implodes your financial life for seven years. There's no, like, well, can we just pretend it didn't happen?

Speaker 3 Well, no, I mean, we would pay, like, just continue paying the minimums,

Speaker 3 but then try to also put money in savings. How bad is it?

Speaker 2 How bad is it? Give us some numbers.

Speaker 3 Okay, so we have a car,

Speaker 3 26,000 left on my husband's car.

Speaker 3 I have $47,000 in my student loans.

Speaker 3 And then we have $475,000 in my husband's student loans.

Speaker 3 And then $525,000 for the house. So we've even like, we've been trying to run numbers.

Speaker 3 Our budget, we have margin $3,000 left over. So

Speaker 3 it's just.

Speaker 4 Is your husband a physician?

Speaker 3 Yes. Okay.

Speaker 2 So what's what's your household income?

Speaker 3 So our income is $16,000 a month.

Speaker 2 Is that your take-home pay? That's what ends up in the bank?

Speaker 3 Yes. That's what ends up in the bank every month is the $16,000.

Speaker 2 Are you guys investing a single penny right now?

Speaker 3 I believe I'm putting like 6% in retirement, and I think he's probably putting like 10%.

Speaker 2 Okay, so you're about to get 16% of your household income back if you pause investing.

Speaker 2 Okay. Did you get a refund last year on your taxes or did you owe?

Speaker 3 Yeah, we owed. Okay.

Speaker 2 So that's 16% right there of your, what's the household income you said?

Speaker 3 $16,000 a month.

Speaker 2 No, what's your gross household income for the year? Like, what did your tax return say you made?

Speaker 3 My husband makes $250,000 and then I make $70,000. So $340,000.
Okay.

Speaker 2 So if we do $340 times $16, you just got $55,000 back in your life.

Speaker 2 On top of the $3,000 a month on top of

Speaker 2 that's ninety thousand dollars now that you can use to tackle debt i got more right he has to be an adult

Speaker 4 and sell this car because he can't afford it

Speaker 4 and he's going to be the doctor that parks at the very back of the lot in a used corolla

Speaker 4 yeah i'm serious and you know how i know this is possible because i was a guy with a phd that drove a used corolla and parked in the back of the lot.

Speaker 4 I was the guy with a second PhD that drove a 94 F-150 that I bought for $3,000 out of some guy's field in West Texas.

Speaker 3 Right?

Speaker 4 Right. And you know, I drive now, whatever I want.

Speaker 2 Right.

Speaker 2 And then the other piece, you said $16,000 is what you guys take home. What are your actual monthly expenses you need just to keep the lights on and cover the minimum debt payments?

Speaker 3 Yeah, so that's kind of our mortgage is $3,500 a month.

Speaker 3 After all of our bills,

Speaker 3 private school, everything. There we go.

Speaker 2 Ding, ding, ding. We just found a money maker.

Speaker 3 $100,000 a month.

Speaker 2 How much are you throwing at private school a month?

Speaker 3 $1,200.

Speaker 4 Okay.

Speaker 4 All right, so there's another $14,000 a year.

Speaker 2 On top of the $90,000 now, we're over $100,000 a year we can throw at the debt.

Speaker 3 $90.

Speaker 3 Okay.

Speaker 2 Are you seeing what we're doing here?

Speaker 3 Yes.

Speaker 4 And we're not even trying.

Speaker 2 We're just soft-tossing right now. If we actually looked at your budget and said, here's your actual income, $16,000, well, really, it's going to be more once you guys pause investing.

Speaker 2 You're going to bring a few thousand back. So let's call it $20,000.
And now let's learn to live on $7,000.

Speaker 2 Well, now there's $13,000 a month we can throw at the debt.

Speaker 2 Right. You get that? That's $156,000 a year.
And if he sells the car, you're down to, let's see, $47,000 plus the $475. That's 522.

Speaker 2 And we're going to be debt-free in less than four years.

Speaker 4 And listen. Right.

Speaker 3 Because we even like floated the idea of like selling our home, but we love our home. And

Speaker 4 you don't even have to do that.

Speaker 3 Because listen,

Speaker 4 I've studied.

Speaker 4 I've worked through the mental health of physicians.

Speaker 3 Yeah.

Speaker 4 And it's not good.

Speaker 4 And I'm convinced that this is one of the core issues is physicians and and their spouses, it's hell. Seven years plus rotations, plus sleep, no sleep, right?

Speaker 4 Plus matching, plus residency, all that stuff. And you finally get out and then you get that first check and you're like, finally, I can, dot, dot, dot.

Speaker 3 Right. And then you add a whole

Speaker 4 bunch of crazy stressors because we're doctors. We're supposed to be rich.
And

Speaker 4 you're broke.

Speaker 4 I've got people in my life who I love and care about who are working physicians physicians who are still paying on their student loans and now they have kids in college.

Speaker 4 Madness. Madness.
Yeah.

Speaker 4 Literally, it's you guys taking, and by the way, if he works extra shifts or picks up ER shifts, which I have buddies that do, he can cut this in half.

Speaker 4 And you're talking about 24 months, 30 months, and you're free. And then you know what y'all are for real?

Speaker 4 Wealthy.

Speaker 4 Then you can live that doctor lifestyle.

Speaker 4 Yeah. Y'all make 300 grand and you're broke.

Speaker 3 I know. It's embarrassing.

Speaker 3 I'm willing to do what you said.

Speaker 4 I don't think that's embarrassing. I think what's embarrassing is y'all are too smart to be this broke.
Y'all are making daily choices to be miserable.

Speaker 4 You know what I mean? To be stressed out.

Speaker 4 Right. How old are your kids?

Speaker 3 She's three and a half.

Speaker 4 she's three and a half she won't even know what day it is you could pull her out and put her in a tuesday thursday school or i mean in a mother's day out program five days a week at a church i mean it's elmer's glue and googly eyes we don't really need private school to do that right now yeah you're good man

Speaker 4 be in a position to send her to whatever school you want in your community when she hits third grade

Speaker 3 right

Speaker 3 no i get it it's just i guess our thought was the private schools are just so hard to get into. We just, we had to start early.
So that's kind of where, how we ended up getting into that.

Speaker 2 That's how they like it. They want you to be like, you know what, your three-year-old is good enough for us.
Pay up.

Speaker 3 Yeah.

Speaker 4 And if you don't get into this school when they're three, they won't get into that school when they're seven. If they don't get that, then they're.

Speaker 4 It's none of that's true. Zero of that is true.

Speaker 4 And by the way, after four years, he's a physician in your local community. He'll know somebody.
Y'all will be fine.

Speaker 3 Yeah. Right?

Speaker 3 Yeah. Yeah.
It's reassuring because we were just running the numbers and we would just get frustrated and we would just say, you know what,

Speaker 3 we're just going to have to pay minimum the rest of our life kind of thing.

Speaker 4 No, it's just going to be three years of y'all not acting like doctors, y'all acting like teachers. Yeah.

Speaker 4 And which, by the way, is still a good life.

Speaker 2 I think you'll realize how much of that stuff you didn't really need and how exciting it is to be on the path to freedom instead of a path to hopelessness, which is what it is now.

Speaker 2 Well, we'll just make minimum payments.

Speaker 2 We'll end up paying a million dollars for his student loans that were $475 because we just let the interest build up and build up while we didn't attack the principal.

Speaker 2 And I just think you're worth more than that. And you're worth being out of debt in the next three years and having the next 30 of freedom.

Speaker 4 Can I guilt trip you for a second?

Speaker 3 Sure, go ahead.

Speaker 4 I'm going to guilt trip you, but I'm really just sending this message out to anyone listening.

Speaker 4 I actually don't want my physician, the person that I go to when I'm not okay. Or let me make it, let me one-up it, when my daughter's not okay.

Speaker 4 I don't want that guy

Speaker 4 stressed out of his mind because he can't breathe at his house.

Speaker 4 I don't want that woman, that physician that I bring my daughter to. I don't want her shaking while she's looking at my daughter because her bills are so high, she can barely make her payments.

Speaker 4 But her kid's in the right school and she's got a nice depreciating asset out in the parking lot.

Speaker 4 And she has a spouse that is working and also making 70 grand, which is an amazing salary.

Speaker 4 I don't, I don't, I want a person who's holding my daughter to exhale and be completely autonomous so they can make the next right decision for my daughter, not the one that's going to get them the most payout so they can make this payment, so they can make

Speaker 2 Our scripture of the day, Proverbs 13, verse 3. Those who guard their lips preserve their lives, but those who speak rashly will come to ruin.

Speaker 2 Les Paul said, don't say you can't until you prove you can't.

Speaker 4 At a boy, James, Les Paul of the great Gibson guitar.

Speaker 2 If you didn't know, Deloney is a big Les Paul Gibson guitar fan.

Speaker 4 James is a Fender guy, which to each his own. Kind of all you need to know.
Oh, you are too.

Speaker 2 I like both. I think they both have their, you know.

Speaker 4 I like Gibson for acoustic. I like Fender for a lot of Wetland.
You like Cold Brews, too.

Speaker 3 That's a whole other thing. All right.

Speaker 2 Ryan is in Oregon up next. What's going on, Ryan? Welcome to the Ramsey Show.

Speaker 3 Thanks for having me. I have a question for you, please.
I'm a permanently

Speaker 3 disabled veteran, so I'm on a fixed income from the VA for the rest of my life. And

Speaker 3 with a wife and three kids and the economy, it's been a challenge trying to save for retirement and trying to pay off my home.

Speaker 3 And I'm wondering if you have any ideas on how I can possibly save more or get higher in steps and whatnot.

Speaker 4 What's the nature of your disability, brother?

Speaker 3 100%, I shattered both my legs, my ankles, and part of my back. Oh, my goodness.

Speaker 4 Well, on behalf of the regular civilians who are just going about our lives and don't realize the day in and day out pain you

Speaker 4 experience on our behalf, thank you.

Speaker 4 That didn't put money in your account, and that doesn't make your pain go away, but I want to just tell you thank you. Yeah, appreciate you.
Thanks.

Speaker 2 Wow. So, what is your fixed income?

Speaker 3 So, I get $4,200 a month.

Speaker 3 I have a wife and three kids. My wife has to stay home with me because I unfortunately need a lot of help.

Speaker 3 So,

Speaker 3 you know, with the price of everything and, you know, mortgage,

Speaker 3 a car, three children, there's just none left. And

Speaker 3 I'm having a hard time saving.

Speaker 4 Yeah. I just, it just escaped my mind.
And I can take a bunch of time on this call looking it up, but I won't do that. There's a program.
One of my closest friends in the world is a part of it where

Speaker 4 he gets paid for taking care of his disabled brother.

Speaker 4 Um, have you all applied for that program?

Speaker 3 We have, yes, we're waiting for that.

Speaker 4 Oh, waiting for it, okay. That's that tends to be a huge relief,

Speaker 4 yeah.

Speaker 2 I hope you guys get approved for that for sure, because that'll help increase the income. So, what are your current expenses every month? Are you guys doing a budget?

Speaker 3 Absolutely, um,

Speaker 3 cash flow system, um,

Speaker 3 and

Speaker 3 that's obviously helped a lot because we know exactly where each dollar is going. And we were able to fine-tune that.
But I have a mortgage.

Speaker 2 I live.

Speaker 3 It is $2,200 plus it's an HOA, so I pay an HOA fee on top.

Speaker 3 Then all utilities, of course. I drive, if I do ever drive, just a free, you know, beater

Speaker 3 old Honda. And then my wife, we do have one auto loan out for her.

Speaker 2 How much is left on that?

Speaker 3 $19,000 left on that.

Speaker 2 What's the payment?

Speaker 3 The payment is $390,000.

Speaker 2 Okay, so

Speaker 2 if you got rid of that car and had a cash car, you could then at least invest the $390,000.

Speaker 2 Is there any money left over right now as it stands? Or are you guys in the hole? Are you just able to cover the bills with that $4,200?

Speaker 3 I'm able to cover the bills. I have about $10,000 in savings that I've been able to come up with, but I mean, that's over years because there's just not a lot.

Speaker 3 So I do have that,

Speaker 3 but we also need a new roof.

Speaker 3 So, you know,

Speaker 3 do I pay off the car? Do I, you know, I got to get the roof? And, you know, so there's just, it's very challenging.

Speaker 2 How urgent is the roof? Is this like tomorrow or is this three years from now?

Speaker 3 Within the next six months.

Speaker 2 Okay. I would continue stacking cash and get through the storm with the roof, and then we'll take a look at the car and see if it's worth selling that, downsizing into a cash car or saving up.

Speaker 2 I think that payment, well, at least for you guys to invest something. The other glaring issue is that most of your income is going towards your mortgage and HOA.

Speaker 2 Right. So, is this housing situation the long-term play, or can we find something more affordable?

Speaker 3 The big thing is, I don't know if I was to sell my home. Yes, I have equity.

Speaker 3 Everything else is even more.

Speaker 3 So, I don't even know what I could get into that would even save me much.

Speaker 4 Here's what I'm hearing, though. Bro, you're doing,

Speaker 4 you are squeezing blood out of a rock every month.

Speaker 4 Most of the people who call into this show, like the last caller we just talked to, there's money everywhere, right?

Speaker 3 Right.

Speaker 4 That's not you. And so like the horroring part of this conversation is.

Speaker 4 Like you have a math problem. Y'all are doing amazing with what you got.

Speaker 3 And so the challenge here is it's just, it's very hard to keep squeezing the same tomato over and over.

Speaker 4 Oh, absolutely. And that's where you have to ask way more, what I would say, more existential questions, which is, we're in Oregon, which is an expensive place to live and it's a high tax area.
Right.

Speaker 4 Do we have to move to Kansas? Because that's the world, that's the cards we're holding right now in our hand.

Speaker 4 True, yes. I wouldn't wish that on you, but I don't know.

Speaker 3 Right. And then also with the VA system, how's how's the VA in Kansas? You know what I mean? Compared to.

Speaker 4 Yeah, I have no idea.

Speaker 3 So that's a really big factor where I would live is based on the VA care systems around because they're not all the same.

Speaker 4 Totally. And that's going to be one of the, that's like that energy you have, that desperation you have, which, dude, I can hear it in your voice, man.

Speaker 4 And it breaks my heart because you're a dad who gave everything for all of our kids.

Speaker 4 And you're looking at this, like you have a very clear trajectory for yourself, which is I cannot work and this is the amount of money we have right now.

Speaker 4 Hopefully, you get approved for that program, which would give a ton of relief to your family.

Speaker 4 But without that, like y'all have to make a hard decision about I got to get on the phone and call all my buddies and find the best VAs in the country and see if I can find the lowest cost of living.

Speaker 4 And that might pull you away from family and resources and friends. I get all of that.
That's a nightmare. But like you said, dude, this tomato is running out of juice.
And tell me about your kids.

Speaker 4 How old are your kids?

Speaker 3 15, 10, and 7.

Speaker 4 Okay, so, I mean, you know this as well as I do. I have a 15-year-old, a nine-year-old.
You're one fun afternoon away from a broken arm, right?

Speaker 4 Or whatever, like running into a tree, just having a good time. And so,

Speaker 4 and then bam, there goes like, so you're, I get that, I can hear it in you, in your voice. You're on a razor's edge.

Speaker 4 Yeah. The only thing I can see right now is y'all have to ask yourself way bigger questions.
Or can your wife go earn $150,000 doing something? And again, I'm just making that up.

Speaker 4 And y'all can hire care for you. That might be the other way to gap it.

Speaker 3 I wish that was possible. Sure.
That's not either.

Speaker 4 God almighty.

Speaker 2 There's only two ways to get margin here. It's to spend less and make more.

Speaker 2 And you guys have done a lot to spend less, and we can get rid of the car payment at least, which will free up some breathing room. And on the other side, we got to figure out, can we make more?

Speaker 2 And maybe that's through her being a caretaker, and that gives you the breathing room you need. And then we can look at, okay, what are the best investment investment options?

Speaker 2 Now, without earned income, which your VA disability, I don't believe, counts as earned income, correct?

Speaker 2 Correct. So you can't invest in an IRA because you need earned income to do that, but you can invest in a taxable brokerage account.
That's not a retirement.

Speaker 2 And if your wife does end up making money, she can open a spousal IRA and invest in that, which has some tax advantages.

Speaker 2 And then you've also got a high-yield savings account you can take advantage of for your emergency fund, sinking funds, the ROO fund, all of that.

Speaker 2 So there is a path forward, but there's some variables here that feel immovable right now that we've got to figure out. And that's going to be the hardest part.

Speaker 4 And tell me about your disability benefits. Is there a,

Speaker 4 and brother, I know you've thought through every one of these things. I'm just throwing things up against the wall here.

Speaker 4 Do you have the ability to work from home or to side hustle from home?

Speaker 3 No, and I legally can't.

Speaker 4 Okay, that was my question.

Speaker 4 If you were to get a online job, some shape, form, or fashion, you lose your benefits, right?

Speaker 4 Bingo. Okay.

Speaker 2 Jeez, Louise, man what a nightmare dude I'm so sorry you're going through this Ryan there's no magic wand here for you but I'm glad we could at least sit with it and help you brainstorm yeah no and I've kind of looked at every you know avenue

Speaker 2 I just wanted to ask this to me because I listen to you guys all the time and I feel like if you might have an idea then it's going to be you I would kind of give it a timeline for you guys to try to navigate all this try to increase the income try to solve it and if you can't it's going to mean bigger life change like we talked about with lower cost of living.

Speaker 2 Where could we go to lower our expenses? If this $4,200 a month, this is it, this is all we have, then we got to get our expenses lower, and that might mean moving across the country.

Speaker 4 I hate that you're in this situation, bro. Yeah, I hate it.
You deserve it.

Speaker 2 All right, until next time, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.