“My Financial Advisor Told Us To Take Out A HELOC For A Tax Write-Off”

Speaker 1 Brought to you by the Every Dollar app. Start budgeting for free today.

Speaker 2 Normal is broke, and common sense is weird. So, we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio.
This is the Ramsey Show. I'm Ken Coleman.

Speaker 2 Rachel Cruz joins me, and we're here for you:

Speaker 2 825-5225. 888-825-5225 is the number to jump in, and we would love to coach you up today.
We start off with Dan in Grand Rapids. Dan, how can we help you today?

Speaker 3 My wife and I are preparing to retire. Matter of fact, her last day of work is tomorrow.

Speaker 4 Monday.

Speaker 3 It will be the beginning of February. So 40 years of effort towards this.

Speaker 3 Dan, how are you?

Speaker 2 Very good. Dan, I got to ask you this.

Speaker 2 I mean, we men have to unite because we don't do this well. And we got Rachel here to help us on this.

Speaker 2 Before we dive in, what is the plan when she finishes the day tomorrow and she wraps it up and comes home? Do you got something planned?

Speaker 3 You know, we don't.

Speaker 3 Dan came on pretty quick. We both had this date in February picked, and then her department dissolved, and they said you can either take a buyout or you can transfer to another department.

Speaker 3 So this all happened for her in the last three weeks.

Speaker 2 Okay, but plannerably, she's excited about this?

Speaker 3 Oh, absolutely, yes.

Speaker 2 Dan, listen, I don't want to spend too much time on this. Rachel's here to back me up.

Speaker 2 This is where you got to step up. I mean, this is, you got to do something special.
She comes home, maybe a little surprise. If she hates surprises, plan a little something, at least a little bit.

Speaker 8 A little retirement celebration.

Speaker 2 40 years, babe. You're wrapping it up.
We got to celebrate her. It's my point.
I don't want to, and I'm glad I said this, Dan, because you might have blown it had I not brought this up.

Speaker 3 You're very much. I appreciate that.

Speaker 10 She works from home, but I will bring some home and make it monumental.

Speaker 8 She works from home.

Speaker 2 Okay, Rachel, what does he do in that situation? I feel like this is your category.

Speaker 8 Champagne.

Speaker 11 Pop the bottle

Speaker 11 right outside the door.

Speaker 3 Neither one of us drinks, but I'm not.

Speaker 12 Oh, man.

Speaker 8 Boy, we are striking out.

Speaker 4 We're striking out.

Speaker 11 The grape juice, sparkling grape juice. Okay.

Speaker 8 Just do something special.

Speaker 8 All right. So we've now helped you there.

Speaker 2 That's the help you didn't know you needed. Now

Speaker 3 we're going to plus your marriage. We got by.

Speaker 3 So

Speaker 3 we've worked very hard to get where we're at, and we're very comfortable with what we're planning for retirement. We're very comfortable with our financial advisor.

Speaker 3 But I have one concern that he's got me a plan that he's got for me. And we are going to put an addition on our house next spring.
So we're planning to spend about $100,000 to $120,000 to do that.

Speaker 3 Now, my plan was just kind of take that off the top of our 401k and our savings and

Speaker 12 make that do the addition.

Speaker 3 What he's suggesting, and he gave me, I guess, good reasons, is he's suggesting that I take out like a HELOC or a home equity loan to do this project. And he said, we'll chunk it away pretty quick.

Speaker 3 But he said there's reasons for that. First of all, I'll be paying a lower interest rate than he can make me.

Speaker 4 That's arguable.

Speaker 3 The second thing he said was it is definitely be a tax write-off.

Speaker 3 And the third thing was the fact that it'll save me $20 plus thousand dollars next year in taxes because of the tax bracket that he's aligning us with.

Speaker 3 And it just, it's very hard for me to think about going into debt immediately as I retire.

Speaker 11 Well, yeah, 100%. Because is he, where is he planning on having you guys pay off the HELOC? When he said you can throw

Speaker 11 a bunch of money at it, is he thinking just a little bit every year so that you don't mess up the taxes and all of it?

Speaker 7 Yeah, he's saying we'll chunk it away.

Speaker 3 And I don't know how relevant chunk it away is, if it's a year or five years, but he said we'll just make a monthly payment on it. And again, that it'll give us a tax advantage.

Speaker 3 It'll save us taxes and all this, which all kind of makes sense. But dang, you know, I just got myself 40 years of work to get out of debt and retire.

Speaker 3 And then just thinking about going back into debt just kind of scares me.

Speaker 11 Well, some financial advisors are so stupid, they don't even think about your values and what you want. out of life.
And clearly, living a debt-free life has a price tag for you.

Speaker 11 You know, you can't put a price on it, but it's a value of yours that he's not putting into any consideration. And so as he goes around, but so Michael, yeah, so no, I would not do this.

Speaker 11 I would 100% just cash flow it. And if the cash flow comes out of, I don't know if it's the 401k, if you guys have money elsewhere,

Speaker 11 but you have the ability to cash flow, right, Dan?

Speaker 3 Yeah, we got a set amount that we're going into retirement with that we're comfortable with, and it's going to last us long beyond our retirement. Yep.

Speaker 3 And just thinking of taking 100 or 120 right off the top of that and doing the addition was my plan. And so he's going to be aware of that.

Speaker 2 Well, let's just put your plan to the test.

Speaker 14 He offered a suggestion.

Speaker 8 Yeah,

Speaker 2 I want to put your plan to the test, not his suggestion we hate his suggestion we hate it

Speaker 2 so let's put your plan to the test let's assume that you didn't get this advice at all okay yes and you just went ahead and pulled the trigger on your plan how do you feel emotionally about your plan any stress uh i no i don't think so um

Speaker 3 we have kind of intentionally we have this 403b that we've been carrying for a long time and i've been very aggressive with it and i took it from twenty $20,000 to it's about $170,000 right now.

Speaker 3 So my thought was that is just some play money we've been actually not planning on that we've accumulated that would do this project for us.

Speaker 12 That's the additional thing.

Speaker 3 Well, we raised seven kids in our house, and it was fine with nine people. But now, what we find is with adult children, instead of nine people every day, we have 29 people 10 times a year.

Speaker 3 So we want to double our kitchen in our living room.

Speaker 11 How much do you guys have in retirement total?

Speaker 16 Just about $2 million.

Speaker 8 Okay.

Speaker 11 Golly. See, and he's going through all these hoops and stuff about this and then that.
You guys have $2 million.

Speaker 11 Do you know what I mean? And you want to take $100,000 of it.

Speaker 11 And if you go and burn that amount in the middle of the room, like, you're not going to have any emotion towards it because it's such a small percentage of your net worth.

Speaker 11 So that's where the peace of mind of your value system overrides his snaking and maneuvering through where it's going to be not even that much money at the end of the day. Do you know what I'm saying?

Speaker 11 Like, I would say that. I agree.

Speaker 2 I mean, Dan, you answered your own question.

Speaker 2 I asked it that way, just simply for you to hear yourself say, his plan gives me a little bit of heartburn, enough that the Pepsi AC is not working and you called us today, right?

Speaker 4 It did, yeah.

Speaker 3 I think I knew where you were going to take me, but I just kind of wanted to hear it.

Speaker 2 Yeah, and I appreciate that. And we're happy to be here for you.
But you, sir, are the ultimate arbiter on this. Your body, your heart, your head.

Speaker 2 And man, you're just like, man, if I can put this edition on, I'm paying cash for

Speaker 2 my grandkids to be there.

Speaker 11 Yeah, and I would run the numbers too, because I am curious because Helix, like the rates go up and down. Like, it really is very dependent upon what's going on.

Speaker 2 No, I don't run the rates at all.

Speaker 14 I don't want you to be tempted.

Speaker 11 No, no, it's not a temptation, but it's that versus what, you know what I mean? Like, that versus the taxes that you're going to pay on a hundred.

Speaker 11 Like, like, what I'm saying is, I think it ends up being closer to a wash than what you realize. I think that guy,

Speaker 11 I think he's like nitpicking every little thing

Speaker 11 to say, I'm making this number up. I haven't done the calculations, but to save 10 grand, whatever the thing is.

Speaker 11 And that's pennies to you guys. So I'm like, the peace of mind is worth that so much more.

Speaker 2 Yeah, just listening to you describe everything he told you versus your plan, yours is simple. Boom.

Speaker 8 We're done.

Speaker 14 We're done.

Speaker 14 And I guess

Speaker 3 you said kind of makes sense.

Speaker 8 Do you,

Speaker 11 yeah, do you have money elsewhere, Dan, where to his point, do you have money sitting in a high-yield savings or something where you wouldn't necessarily have to pay taxes if you use that cash?

Speaker 3 We have about a $40,000 savings

Speaker 4 and

Speaker 4 401k.

Speaker 3 I have a lump sum pension and a 403b.

Speaker 8 Okay, gotcha.

Speaker 11 Gotcha. Nope.
That's great. Yeah, no, I would not go borrow on my house to do an addition when I freaking have the money for it.

Speaker 11 That's the bottom line.

Speaker 2 Trust your gut, Dan. There's a whole bunch of science on this that trusting the gut is not this mysterious thing.
It's actually the brain sending physical signals to the body.

Speaker 2 And we feel it in our body. That's a real thing, it has the same validity as the logic.
Listen to your heart, listen to your body. You were right.
Thanks for calling.

Speaker 2 Tell the financial advisor, thanks, no thanks.

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Speaker 2 All right, we're going to Baltimore where Julia is waiting. Julia, how can we help today?

Speaker 18 Hi, thank you so much for taking my call. I'm curious how much I have my children pay when they break things.

Speaker 18 Recently, my 10-year-old broke a $400 window and a glass table that is thousands of dollars to replace.

Speaker 2 Well, what happened? The 10-year-old is, is this a boy or a girl?

Speaker 8 Boy? It's a boy.

Speaker 2 I was like, I can answer that. Take it easy on the boys.

Speaker 11 What was he doing? Was he just being a boy?

Speaker 8 Yeah.

Speaker 18 With the window, he was throwing the baseball.

Speaker 9 Oh.

Speaker 8 And we had told him not to do this.

Speaker 18 But he thought it was only that we were telling him that the glass door, like the storm door, was going to break. He didn't realize the little door next to the door could break, too.

Speaker 18 He was upset about himself about that.

Speaker 2 Did he throw the ball directly at it, or was he playing with a friend or a sibling, and somebody missed it?

Speaker 18 It could have been someone missed it. Because, yeah, they usually throw the ball toward the door, and they keep the batter right in front of the door.

Speaker 14 And they know not to.

Speaker 2 But they've been told not to.

Speaker 8 Many, many, many times. Okay, all right.
This is great.

Speaker 2 I'm gathering information here.

Speaker 8 I haven't ruled yet.

Speaker 2 Now, the second, the glass table, what happened with that one?

Speaker 18 Okay, so the glass table, you know, you could stand up like on your own using your own body strength, or you could push off of the table and

Speaker 18 push up.

Speaker 19 So that's what he did.

Speaker 18 I guess, and somebody else was pushing up at the same time.

Speaker 8 And it shattered. And

Speaker 18 the whole side of the table like snapped. So we actually are just using a fragment of what used to be the table.

Speaker 2 Is that safe, given that it's a glass table?

Speaker 18 Yes. We turned the jagged edge towards the wall and we put tape on it.
And no one sits over there.

Speaker 2 Julia, I got to tell you, I am no miss.

Speaker 11 I come with a boy.

Speaker 2 No one's ever going to confuse me with an OSHA inspector, but I'd probably get the glass table out of the living room. Okay.
Very easy ruling for me.

Speaker 2 He felt bad on both instances, correct?

Speaker 15 Yes.

Speaker 2 Okay, and how long has it been since these two instances?

Speaker 18 The window was over the summer and

Speaker 18 the glass table was within the last month or two.

Speaker 2 Well, I would have, I mean, I feel, I mean, okay.

Speaker 2 It's not going to change my ruling, but I think you should have acted a little quicker.

Speaker 2 But yeah, I think you should sit him down and go, hey, I told you a thousand times not to play baseball in front of the door. You did it.
And by the way, this is why I told you.

Speaker 2 It's not mom trying to cramp your baseball style. I'm sure that's your favorite spot.
Totally get it. But I knew this was a possibility and happened.
So I know you feel bad, but you know what?

Speaker 2 You didn't really learn the lesson. And so that cost us X amount of dollars.
And then the glass table.

Speaker 8 Probably you didn't warn him.

Speaker 8 Go ahead.

Speaker 18 You wouldn't have him pay for any of that window.

Speaker 9 I would.

Speaker 2 I would 100% have him pay for it. But I would sit down.
I would have done it like within the first 48 hours.

Speaker 18 I told him he needs to pay 100 of the four.

Speaker 2 Well, then you've already told him, so Ken's advice doesn't count anymore. I mean, you're not going to be able to do that.

Speaker 11 But you're wondering if you need a follow-through.

Speaker 18 Moving forward, because he's not going to stop breaking stuff.

Speaker 18 I'm curious now that I'm a Dave Ramsey

Speaker 14 gamer, I'd like to know what to do.

Speaker 2 Well, what the deal is, is that

Speaker 2 I think he learns his lesson. So if you told, I missed that somehow, that you said you're going to pay $100, I love that.
I probably would have made him pay for the whole thing.

Speaker 8 On the Facebook.

Speaker 8 You get a ruling.

Speaker 2 I'm having my ruling.

Speaker 8 Okay. My ruling is

Speaker 2 you told him 1,000 times.

Speaker 2 And he still did it. I'd make him pay for the full 400.
Now, on the glass table, I wouldn't make him pay the $1,000 because there was no, hey, don't. The way you described what happened,

Speaker 2 I don't even know if it makes any sense. I'd have a little bit more grace on that, but I'd still have him pay something, but not $1,000.
But yeah, he's got to start to respect your stuff.

Speaker 2 So sure, I love the idea of making him go do real work, by the way, not like chores around the house that you pay for. No, he's got to go get a lawnmower out or whatever.

Speaker 2 I started cutting lawns at 11. Don't anybody freak, don't at me.
But he needs to do real work for somebody and get some money back.

Speaker 2 I love this, actually, because you're not mad at him or yelling at him. You're going, look, Sparky, there's consequences.

Speaker 8 And I love that.

Speaker 8 You wouldn't make him pay anything.

Speaker 11 I think it was not intentional. There was no ill will.
Cause I think there's some kids.

Speaker 2 There was disobedience.

Speaker 11 Yeah, but it's not intentional. He was not saying, I want to go break that.
Like, there are some kids that I think are destructive and they're doing things on purpose to rile at their parents.

Speaker 11 And then, you know what I mean? That there's an ill spirit to it. And that correction, I would much, yes, I would have them pay.
But he, Julia, I don't know why.

Speaker 11 I just, I'm like, there's a part of me I'm like, you're, you're, you have a boy. Like, Charles is already thrown.
I mean, and he's five, but I'm like, I already see things.

Speaker 11 And we do tell him, hey, don't do that.

Speaker 11 But if he breaks the thing, the big light fixture we have, because he's all into this like foam basketball thing and he's trying to, I don't know, part of me if it breaks.

Speaker 11 I'm like, which granted, he's five. I don't think I would, I don't know if I would make him pay for it.

Speaker 2 Again, I don't have any judgment. I don't know.
For those of us, let's tell you, I'm telling you a real story.

Speaker 11 I mean, Ken, you have two boys.

Speaker 8 Yeah, and you have all the books.

Speaker 11 I haven't gotten there yet as a parent with a boy. I see glimpses of it.
But I kind of like it too. I know this is terrible, Joy.

Speaker 2 You're confusing me. You said you were okay with her making him pay $100 on the door.

Speaker 11 No, no, I didn't.

Speaker 11 If he was being destructive on purpose, there are some kids that are very destructive on purpose to rally up their parents.

Speaker 2 I just want to be clear.

Speaker 11 You don't think he was being disobedient?

Speaker 8 Yes, sir, no.

Speaker 2 He was disobeying his mom.

Speaker 11 Disobedience and intentional destruction are two different things to me.

Speaker 11 Both are punishable. Because his disobedience was not,

Speaker 11 it was more around a sport that then affected the window. It wasn't the window itself.

Speaker 2 I'd love if you were my mom.

Speaker 2 I got to tell you. No consequences here because my heart was good.

Speaker 2 No, he disobeyed his mom. Julia, did he disobey you in your mind?

Speaker 11 Julia's still pissed.

Speaker 8 You didn't let her finish. Y'all are probably pissed.

Speaker 2 I'm not pissed. I'm as happy as I can be.
It's not my kid, not my problem. I'm just weighing in on it.
Julia, did he disobey you?

Speaker 8 Yes.

Speaker 2 He knew he was disobeying you based on how many times you told him, don't stand here and play baseball. Yes or no?

Speaker 8 Yes. Okay.
You're a good mom. You're a good mom.

Speaker 11 Did he disobey you at all with the table? Was there any warnings around the table or was that just a pure accident?

Speaker 18 Yes, I tell them not to push on the table. Oh, shit.

Speaker 9 All the time.

Speaker 8 Don't lean on it.

Speaker 18 Don't put your elbows on it.

Speaker 8 Then he's got to pay.

Speaker 18 I said it's glass.

Speaker 2 He's got to pay that too. He's got to pay a big portion of that one.
He's got to learn this lesson.

Speaker 18 He might need to take a HELOC out or something for that.

Speaker 11 Get some of the glass guy's retirement.

Speaker 18 Yeah.

Speaker 2 I mean, I'll say this.

Speaker 2 The kid is in debt to you because he broke your glass table. I know.
And I got to say, I'm going to circle back to this one. I must be getting older.

Speaker 2 I don't like the shard of glass turned towards the wall with the tape on it. I'm going to bring that one back up.
I feel like I'll sleep better at night telling you I get the table out of there.

Speaker 2 But yeah, he needs to be able to do it.

Speaker 18 I do have bulk trash scheduled for pickup, so we are getting it out.

Speaker 8 Great. There you go.

Speaker 2 I just care about because this kid's going to run around the corner.

Speaker 8 And

Speaker 2 God forbid he runs into the jagged edge.

Speaker 8 I know.

Speaker 11 And I just like that he's playing, you know?

Speaker 8 I kid you, but he also needs a lot of people.

Speaker 11 He's got an iPad, and he's

Speaker 2 listening because what happens when he breaks something that's way more expensive?

Speaker 11 How many kids do you have, Julia?

Speaker 8 Three.

Speaker 18 I have a daughter and then two boys.

Speaker 11 And then the two boys. I think it's the double boy thing that really gets the, you know the patience gets lower maybe how old is the 10-year-old your oldest

Speaker 18 he's my youngest oh and he is the most destructive my 12 year old just broke a glass part with picture flames because he threw a ball in the house even though he knows not to and i did and my daughter who's 16

Speaker 8 go ahead

Speaker 18 My daughter, who's 16, is really not destructive at all.

Speaker 2 Well, no, because she's a female.

Speaker 11 They color. That's what little girls do.

Speaker 8 She's 16.

Speaker 2 All little boys' brains are on fire.

Speaker 8 I know.

Speaker 2 You know, and that's just part of being a boy. And by the way, I did all of those things you described, except for the glass table.

Speaker 2 We were too, we couldn't afford a glass table.

Speaker 8 Didn't have a glass table.

Speaker 2 But I will say that I think you're a good mom, and I think this is a great way to teach a lesson without, you know, that's enough punishment. Just to kind of go, here's the conversation.

Speaker 11 He needs to feel a little something. Yeah.
An effect of what his actions are. So I get that.
I know. I'm just, I don't know.

Speaker 18 Thank you.

Speaker 8 Yeah, thanks for calling.

Speaker 2 You are such a softy.

Speaker 11 I think maybe, honestly, because I have two girls, and you see that, and you know, they're doing the girl thing and dancing and singing the high school musical.

Speaker 11 And then you got little Charles with a little ball. Part of me's like, you play with us.

Speaker 8 He's

Speaker 8 a cutie.

Speaker 2 But let Charles, let Charles shatter a really important window. I know.
After you've told him not to. And let's see how lovingly you handle that.

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Speaker 2 All right, next up, we are going to go to a video call, and we've got Valentina who is joining us from New York City. Valentina, good afternoon.
How are you?

Speaker 22 Good afternoon. I'm doing well.
How are you?

Speaker 2 Well, we're doing well. What's going on with you today? How can we help?

Speaker 22 A lot is going on.

Speaker 22 So my husband and I went from a family of two to seven and under five years. How'd that happen?

Speaker 22 Well,

Speaker 22 we have a five-year-old, we have a three-year-old, we have a one-year-old and a four-month-old. I'm actually wrapping up with my maternity leave.

Speaker 11 Oh my gosh. I must tell you.

Speaker 2 Babies. You look fabulous given how little sleep you must must get.
I mean, I'm exhausted. Listen to that.

Speaker 22 Yes, exactly.

Speaker 22 But it's unfortunate that we are drowning in debt. We are drowning.
And

Speaker 22 it all again escalated within the last five years.

Speaker 22 And my question is, how can we navigate this terrible mess

Speaker 22 that we're in with all the debt that we have accumulated? And obviously, we have a large family. So we have four kids.
And then my mom lives with us,

Speaker 2 thankfully um but we we are at a negative every month and uh we don't know how to how to go about this okay let's run through some numbers real quick okay and then rachel will dive in and we'll start pulling up a plan here for you okay so let's start with your combined income

Speaker 22 Before taxes is $240,000 and after taxes, $162,000. Okay.

Speaker 22 And give us the debt, go smallest to largest, and let's keep the mortgage out of it at first okay let's just see what that list looks like okay so i will try my best so the smallest debt is uh so we have a credit card debt we have um personal loan so credit card debt all together is um

Speaker 22 90 actually that's not the smallest but um combined between my husband and i

Speaker 22 Okay, so

Speaker 22 the personal loan is 28,000. Okay.

Speaker 22 Credit card debt is 98,000.

Speaker 2 How many cards equal that 98?

Speaker 22 So my husband has five

Speaker 22 and I do have five as well. So that's a total of 10 credit cards.

Speaker 2 10 credit cards.

Speaker 11 Are they all average-ish around that

Speaker 11 like nine?

Speaker 22 I'm being conservative. I think it's above that.
Okay. I'm just around into the nearest, yes.
But that's conservative.

Speaker 8 Okay.

Speaker 22 So credit card, I'm telling you, we've been relying on credit cards.

Speaker 8 Yeah.

Speaker 22 And my student loan is $132,000. okay

Speaker 22 um

Speaker 22 and i think that's that's it okay oh no no no i'm sorry 401k um we borrowed borrowed um

Speaker 22 um so it's a total of 43 000.

Speaker 2 so 43 000 in the 401k loan yes okay all right how much um

Speaker 11 how much is going out to payments each month are you paying minimum payments on every

Speaker 8 minimum payments

Speaker 22 and it's um i was at about three thousand or so okay so all of that are any of the credit cards in default

Speaker 22 uh not yet gone to collections at all no no you've been trying to keep them afloat okay yes okay okay everything is current and do I understand that with all of this stuff plus whatever is going on in your life you guys aren't there's no money you don't have enough money left over and that's why you've been using credit cards exactly because my husband has been having to cash out all of whatever stocks he had and all of that so anything extra we had any savings anything like that has been going into stuff that he had prior to us getting married

Speaker 22 all of that has been going on towards that so what happened is that with maternity leave my income significantly decreases I have two full-time jobs and that goes down to basically 25% of what I make.

Speaker 22 And then we had major repairs to do to the house and things have broken our cars because we drive all cars. So, a lot of things we started off well, but then the debt just kept accumulating and

Speaker 22 property taxes went up twice the first year that we bought the house.

Speaker 22 So, things just kept coming up, and it was just a snowball from there.

Speaker 11 How much is your mortgage?

Speaker 22 So, we have two. My husband had a property prior to getting married, and we have our property together after getting married.
So, our home is about $4,500,

Speaker 22 and the other property is about 1,200.

Speaker 11 Okay. What is the other property? Where is that?

Speaker 22 So it's close by to where we live, but that's where my husband used to live. It's a double unit.

Speaker 23 What are y'all doing with it?

Speaker 22 What are we doing with it? So thank you for saying that because we are currently trying to sell it

Speaker 22 so that we can pay some of the debt. And I'm scared to death because I feel like that's not going to be enough.
And we do have a little bit of income coming from there as well. Okay.

Speaker 22 So right now that property is being sold.

Speaker 22 Right now there's 116,000 owed and we're selling it for 380,000. Oh, wow.

Speaker 8 Yeah. That'll make a huge chunk.

Speaker 2 Nothing to be afraid of there. Yeah.

Speaker 8 It may not

Speaker 8 get it all, but it's right, right.

Speaker 2 So let me ask you this. How much are you over

Speaker 2 every month? In other words, bills versus what we got. How much are we in the red

Speaker 2 on an average month?

Speaker 22 On an average month,

Speaker 22 a couple of thousands, I would say.

Speaker 2 Are you on a budget?

Speaker 22 We try to. We're not in a consistent budget.

Speaker 11 Yeah, because you guys are bringing in, it's what, around $12,000 a month, would you say, hits your account? Yes. Yeah.

Speaker 11 And then the two big things, the debt payments, which is $3,000, and then you have your mortgage, which is four.

Speaker 11 And so my question is, yeah, where's the rest of it going?

Speaker 22 Oh, let me tell you.

Speaker 8 Yeah.

Speaker 22 Food,

Speaker 22 schooling, daycare, insurances, utilities, transportation.

Speaker 22 We do

Speaker 22 have a couple of medical bills and then we support is very minimal, but we do support our families

Speaker 22 back home.

Speaker 22 And that helps them a little bit. But if we add all that up, honestly, we're always on the red.
And we're trying to minimize as much as we can.

Speaker 11 How much are you paying for the families?

Speaker 22 It's like a couple hundred dollars, three to four hundred dollars dollars a month.

Speaker 11 Three to four hundred, okay. And how much is the kids' school?

Speaker 22 It's about $1,300 a month.

Speaker 8 Okay, okay.

Speaker 11 Yeah.

Speaker 8 Is that daycare?

Speaker 22 Daycare about $800 a month.

Speaker 2 Well, what's the $1,300? Is that private school?

Speaker 22 Yes.

Speaker 22 And we are grateful to get financial aid,

Speaker 22 but that's sort of the balance.

Speaker 2 How old are the children that are in private school?

Speaker 22 Five and three.

Speaker 2 may i may i push on something and rachel kind of walk you through what to do here but i'll just quickly say i think you have to have a conversation about the two kids five and three being in private school to the tune of 1300 a month uh private school is still going 1300 a year oh a year a year i didn't catch that significantly less than

Speaker 22 never mind i thought it was 1300 a month so it's just like a few hundred dollars yeah it's not a ton oh i'm sorry i'm sorry 1300 a month that's correct i'm so sorry it's It's $1,300 a month.

Speaker 22 So you're right.

Speaker 2 I don't want to bog down on this.

Speaker 2 I want to give it to Rachel here, but I'm going to challenge you that private school will always be there and they really don't need it that much, as much as you need $1,300 a month back in this thing called a budget, which you aren't doing.

Speaker 2 But we just found $1,300 that you desperately need. Rachel, I'll hand that one to you.
That's just my opinion.

Speaker 11 Yeah. And, you know, there's going to be seasons and there has to be some changes, some significant changes, right? Because if there's not, you guys will keep in the cycle of where you've been.

Speaker 11 And so I think that is the hard reality is that you want to be able to do everything, but you mathematically can't, right? You guys keep running into that. I mean, you can't keep doing everything.

Speaker 11 And so you're either going to get behind on bills, you're going to get behind on a mortgage, you're going to get behind on things.

Speaker 11 And I'm scared you're going to get behind on the wrong. the wrong items.
And so I think you guys are going to have to have a really, really hard conversation.

Speaker 11 And it's not forever, not not forever, but for the next two to three years, our lifestyle has to change.

Speaker 11 And you guys really are at the point where even four or five hundred dollars makes a significant difference.

Speaker 11 And so to be able to say, okay, what are the things that if we that are not necessity, food, shelter, utilities, transportation, that's it. We have to be paying for daycare.
There's no other option.

Speaker 11 School, there's another option. Yeah.
To your point, that doesn't have to be private school. Like, what are the things that we don't have to have to literally survive? Yeah.

Speaker 11 And I'm curious what that number is. And that's going to hurt.

Speaker 11 That's going to hurt when you see that number and to think, oh my gosh, if we eliminate these things that we want to do that are good things,

Speaker 11 we can't afford it.

Speaker 2 Just for the sake of time, two things I want to give her. I want to give her a session with one of our coaches and free every dollar for a year.

Speaker 2 Let's get those things in play and you can dig out of this. Yes.

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Speaker 2 All right, let's go to Antoine in Austin, Texas. Antoine, how can we help today?

Speaker 10 So, I just wanted to question if it's worth getting a loan for school. So, this is like the scenario that I'm going to go ahead and tell you right now.

Speaker 7 So, my parents want me to go to this local school that's a lot cheaper, the financial aid.

Speaker 10 They pay me around a thousand to go to the school because of the financial aid.

Speaker 13 And then, the school that I want to go to, it's a ministry school.

Speaker 10 And it's been what I want to do, and I feel like that I'm called to do.

Speaker 13 And it's ministry itself. And that school, I do have to pay around $2,000 a semester.

Speaker 8 Okay.

Speaker 11 Well, $2,000 a semester is not bad. I mean, that's over like five months.
You could go and make that in a month doing a side hustle.

Speaker 20 Yeah.

Speaker 8 Yeah, you could cash flow it.

Speaker 13 And they were talking to me, and they're just like really bribing me with basically a good amount of stuff just to stay with that school because they think that that school is so good.

Speaker 20 And I just don't really see the hype in it.

Speaker 10 And it doesn't teach what I'm wanting to actually learn.

Speaker 11 Sure.

Speaker 5 They think that

Speaker 10 I guess in a sense they're different believers as I am and they don't think that getting a ministry degree is

Speaker 12 like a real thing. Like they don't think that it's like a legit thing to do as a career.

Speaker 11 Right. Okay.
So yeah, it is a legit thing for sure.

Speaker 11 I do think it is going usually, it is on the lower end of a salary perspective.

Speaker 11 So they may be looking and thinking, Antoine, go get a business degree and maybe go into ministry, you know, part-time and volunteer and go create a, you know, a life financially that's bigger.

Speaker 11 And then I hear you saying, no, this is kind of, this is what I want to do. I'd rather go down this route,

Speaker 11 which again is not a bad route. I would not,

Speaker 11 I would, I would caution you to

Speaker 11 not just say, okay, well, if I'm going to do this ministry and it's $2,000 a semester, I'm going to have to borrow money and all the things.

Speaker 11 But if you cash flow it through and get the degree you want,

Speaker 11 the ministry degree, I mean, I guess is this specific school, is it like a very specific type of ministry or

Speaker 10 it's like theology,

Speaker 13 Christian ministries.

Speaker 10 In a sense, it's a lot better for me to do because it's one of the cheapest schools out there because it's online, so I'd be at the comfort of my own home.

Speaker 8 Gotcha.

Speaker 10 Well, this local school that I'm currently going to, I'm currently going to right now, and it's just, I'm not learning what I would actually learn in ministry itself because there's not a ministry class that they have here.

Speaker 11 Sure. So you're wanting to be a pastor.
Like, you're wanting to

Speaker 8 get into a position that you have to have a, yeah, you know,

Speaker 2 I think this is so clear-cut. This is very simple.
Do you feel called to this or not? Yes or no?

Speaker 2 Yes. And if you don't do this, do you think that you will sense

Speaker 2 a holy, and I'm using that word on purpose, a holy disrest? That you will regret that spiritually?

Speaker 8 In a sense, I don't believe so.

Speaker 10 Like, I feel like it's like when you're called to something, like, that, that, you don't, you don't burn out.

Speaker 2 That's what I'm getting at. I'm saying if you don't,

Speaker 2 you misunderstood me. If you don't do this, if you don't answer the call, do you believe that you'll suffer disrest?

Speaker 8 Meaning, I've lost you altogether.

Speaker 8 Let me put it another way.

Speaker 2 Do you feel called? You said yes. And I think that if you don't do this, that your soul won't be whole.
That's what I think.

Speaker 8 And I also,

Speaker 2 you're with me now. And I also think.

Speaker 21 I'm with you now. There you go.

Speaker 2 And I also think that you'll resent your parents.

Speaker 2 If you don't do this and if you bow to their wishes and their pressure.

Speaker 11 Yeah, and Antoine, yeah, and I don't have a problem with it because it's a very

Speaker 11 reasonable situation. Now, we do get calls from people that want to go be missionaries and they want to go get a $60,000 a year degree from a private Christian college.

Speaker 11 And you're like, that makes absolutely no sense.

Speaker 11 But $2,000 a semester, you're like, yeah, again, you can do that waiting tables in a month.

Speaker 11 So you could, you don't even have to go into depth for it.

Speaker 2 No, not at all. And you shouldn't.

Speaker 2 Or ask them for help, especially given this situation

Speaker 15 yeah well they said they well they weren't gonna help me at all if i go to this school right kind of sucks because i mean but i mean at the same time like they in a sense they think the main reason as well is that they think that i'm not gonna like stick through it and i've like in a sense when it came to church like i'm trying to get like more involved and more involved and that's what i've been doing like I've been going to school and just trying to be like as most involved as I possibly can.

Speaker 10 And well, in a sense, I proved them wrong with several things.

Speaker 19 They think like when I went to go get like baptized, they thought, okay,

Speaker 10 no, like, I don't think you should do it like right then and there. Like, this is barely a new thing.
And in a sense, they made me wait until I was 18, which wasn't that long.

Speaker 10 It took about like half a year.

Speaker 8 Yeah,

Speaker 8 they're just, yeah, they're cautious.

Speaker 11 They're cautious. And maybe in their background, spiritually, they got burned a few places.
You know what I mean? And so they were just like, whoa, just, you know, so that's, that's fine.

Speaker 2 Honor your parents, but you don't have to do what they say. Now, there's a, there's a, there's a tension there for some people, but

Speaker 11 how old are you, Antoine?

Speaker 21 I'm 18. 18, okay.

Speaker 11 All right, so how long's the school? Sorry, Ken. Yeah.
How long's the school?

Speaker 3 It's four years. It's four years.

Speaker 8 Okay. Yeah.

Speaker 11 So I would make a plan to cash flow it, talk to some. And again, this is not a school or a degree that's going to put you in a really narrow place

Speaker 11 theologically, right?

Speaker 1 No, you can use it anyway.

Speaker 15 It gets you anywhere.

Speaker 2 Okay, perfect.

Speaker 11 I think that's another thing.

Speaker 11 I would have a red flag because there are some of these, you know, where it's a very specific niche within Christianity, even, and you can't really use it a lot of places.

Speaker 11 So I think the broad sense is helpful.

Speaker 11 I think it's great. Yeah.

Speaker 2 Yeah,

Speaker 2 I want to finish this point because I do hear your heart. And your parents are very influential, as they should be.
And you're 18 years of age, and parents do things like this all the time.

Speaker 2 I'm not immune to it. Rachel's not immune to it.
Where a parent's fear

Speaker 2 turns into what they think is practical advice, and it's not practical advice. It's them projecting their fear.
I think that's what's going on.

Speaker 2 So, Antoine, you got to honor them that I think they want the best for you. And I just think they're human beings who have fear.

Speaker 2 And I just wanted to make that point because I think it's important when you go through this. And we're giving you advice to go, yeah, go do this.
Go cash flow.

Speaker 2 Don't worry about what mom and dad say on this because you believe you're called to this. And then this is just part of growing up.
So it's tough. I just wanted to acknowledge the tension

Speaker 2 because I think we have a large audience they're going what do you say and I'm not saying it's going to be easy but I do think the choice is simple and I would rather disappoint them early so I don't resent them later

Speaker 2 so tough stuff there let's go to Trent in Tulsa Oklahoma Trent how can we help

Speaker 25 Hello, my wife and I are both 35 years old, and the only outstanding debt we have is our mortgage, which is going to be paid off next year.

Speaker 16 Nice.

Speaker 8 After we pay off our mortgage, we are thinking to build up a 529 with a couple hundred thousand in it for our daughter and or a career emergency.

Speaker 25 So the idea is that my wife and I's career field feels a bit unstable right now.

Speaker 16 So if we ever get laid off, we want to be able to use that 529 to send me or my wife back to school to build new skills.

Speaker 25 And if we never use it, then we want it to go to our daughter.

Speaker 16 when she starts college.

Speaker 25 Is this a viable plan?

Speaker 16 And if so, what risk do you see?

Speaker 2 I would say it's a viable plan for your daughter. We espouse that.
What careers are you in that you guys feel like you're really on thin ice?

Speaker 2 So my wife is in tech. She's like a data analyst and I would be an untenured professor.

Speaker 2 Yeah, yours is a little bit more sketchy than hers. I think, you know, she can upskill in the tech space without going back to school.

Speaker 2 So I'm just going to push back against the thought that this 529 is either for our daughter or for my wife or for me if we need to get more skills down the line.

Speaker 2 And I think in your particular careers to pivot, I don't think another degree is the answer. I really don't.
Could be, but I'll give you a quick litmus test on that.

Speaker 2 Is a degree the only way to do what you want to do or is it the best way to do what you want to do?

Speaker 2 If that's the case, then you could use it, but don't just make that assumption, especially for her in the technology space where upskilling now is not going to require any kind of degree.

Speaker 2 There's going to be boot camps, there's going to be classes, courses. Google just announced a whole nother array, Rachel, of

Speaker 2 a six-month program where you're going to see more and more big companies over the next few years start to train the people that they want. You as a professor,

Speaker 11 who knows? Yeah. Now,

Speaker 11 I would say for 529s, it's an investment. So you're wanting to sit there for at least five years, and you guys are probably going to want to go back sooner than that.

Speaker 11 So I would just cash flow your wives,

Speaker 11 set your daughter up for the 529, and then if you guys needed it for you guys, I would just cash flow it. it

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Speaker 1 Protect yourself, protect your income, protect your family.

Speaker 2 Welcome back to the Ramsey Show coming to you from the Fairwinds Credit Union Studio. Alongside Rachel Cruz, I'm Ken Coleman.
So excited to be with you today, and we want to coach you up.

Speaker 2 Triple 8-825-5225 Antoinette is joining us now in Fort Worth, Texas. Antoinette, how can we help?

Speaker 18 Well, I'm going to be 62 next month, and I don't have anything to say for retirement, and I want to become a first-time homeowner, and I don't know if that's stupid and ridiculous, or if it's possible.

Speaker 2 Well, I don't think it's stupid or ridiculous. Let's focus on the possible part.
Give us a picture of your financial situation, given that you have zero retirement or very little retirement.

Speaker 18 I have no retirement, and I have no money for a down payment. So I would have to go USBA or SESBI, something with a zero down, And so that would make my payments even higher.

Speaker 2 No, you don't have to do that. You don't have to do that.
Do you have any debt?

Speaker 18 Yes, I have some, but not an unmanageable. And I'm getting it paid off really quick.

Speaker 11 Okay, how much debt do you have?

Speaker 18 I think Credit Karma said I had about $8,000 or something like that. I've just paid off $600 worth of two of my accounts in the last month.

Speaker 11 Is the 8,000 credit cards or personal loans? What is it?

Speaker 18 Let's see. I paid off the personal loan, and so

Speaker 18 one of them is my car, and the rest of them are credit cards. I've got, I think, four credit cards.

Speaker 9 How much is in your car?

Speaker 11 Do you owe on your car?

Speaker 18 Oh, gosh, I can't remember. I'm really bad with money.
I mean, numbers. And so I just know that I just got it two months ago, and I had to trade in my other car because it was a 2019.

Speaker 5 It was convertible, and it didn't convert anymore.

Speaker 18 And mechanically, it was down, but everything else on it was falling apart. So I had to get rid of it.
And I was upside down on it because last year it was worth $17,000.

Speaker 18 And then this year it was worth $5,000. And so I was real upside down on it.
And so I owe more on the

Speaker 18 I had to get a minivan because I'm so popular.

Speaker 19 I can't have a convertible.

Speaker 18 So I owe more on my minivan than really I should.

Speaker 22 So okay.

Speaker 11 And did you roll over the

Speaker 11 negative equity on

Speaker 8 the convertible?

Speaker 8 Yes.

Speaker 2 Into the minivan.

Speaker 11 Okay, so how much do you owe on the minivan?

Speaker 8 I don't know.

Speaker 11 You don't know. Antoinette, you signed a loan.
You don't know how much the total is.

Speaker 18 That's right.

Speaker 8 All right, all right.

Speaker 2 And she had to go to credit karma on the other thing. So one of our problems, Antoinette, is you don't have a firm grasp of your numbers.

Speaker 11 Yes, she already said she's bad with them, but it's not a problem.

Speaker 6 I can't remember numbers.

Speaker 2 Oh, but it's not about that. It's about do you have a file over in your house somewhere where we got the car information?

Speaker 18 Yes, but I'm a truck driver, so my house is

Speaker 18 like 2,000 miles away.

Speaker 2 Why do you need a minivan if you're driving a truck all the time?

Speaker 8 I go home sometimes.

Speaker 2 And you're popular, so you and the ladies are hopping in the minivan. Okay, all right.

Speaker 8 I'm trying to catch up here. Okay.
Because I'm trying to figure out, honestly, if we can sell the minivan.

Speaker 11 What year is the minivan? What year?

Speaker 18 Well, I had to go for a, let's see here, a

Speaker 18 2023, I think.

Speaker 8 Okay. You had to.

Speaker 11 And with the negative X, I mean, this could be $30,000, $40,000. I mean, so, okay, so Antoinette, I want to paint you a picture.
Yesterday on the show, we had a truck driver, Christopher.

Speaker 11 He paid off all of his debt,

Speaker 11 and he has hundreds, I mean, tens of thousands of dollars. I mean, he's just absolutely killing it.
And he's a truck driver.

Speaker 11 He was telling us he had a a Subaru, brand new, ended up selling it, had some, you know, had to take out a small loan because it had gone down and he was upside down a little bit,

Speaker 11 bought an $8,000 Lexus. The Lexus gets hit.
He gets a check from the insurance company for $9,000. He ends up buying a $2,000 car, takes the rest of that and throws it at the debt, right?

Speaker 11 So there's a way to do this. And even someone in your industry, we literally just talked to him.
He did his debt-free screen yesterday. Here's the thing, Intimate.

Speaker 11 Okay, so the excuse that I am bad with numbers can't be an excuse anymore. Okay, you are an adult, you are smart, you are capable, and we have to get this under control.

Speaker 11 So the first thing I need you to do when we hang up is I need you to call the dealership or the credit, wherever you got the loan for the van.

Speaker 11 I want you to pull up the credit card again and know exactly

Speaker 11 which credit cards are out there and know exactly what you owe on them in companies. I want you to write a list down and then take your phone and take a picture of it.
So you have it documented.

Speaker 11 Even if you're out and about, you have it documented. And then the plan is going to be homeownership is going to be down the line, okay, for you.

Speaker 11 But I think the goal here is to get yourself out of debt. And Antoinette, I would, you're more than likely going to have to sell the minivan, okay?

Speaker 11 And you're going to get a beta $2,000 car because I want you to be out of this debt so that you can start saving for retirement.

Speaker 11 I don't want you driving, you know, have to be a truck driver for the rest of your life. I want you to be able to have a great retirement.

Speaker 11 And that's not going to be possible with the habits that you've been in, not only just financially, actually,

Speaker 11 but the way you're going about it and your attitude about it.

Speaker 11 You've got to make the turn. And it's going to be difficult and hard, but you need to get as much facts in front of you as possible because you don't know what you don't know.

Speaker 2 Are you an independent contractor? In other words, work for yourself or do you work for a company?

Speaker 18 I'm a company driver. I'm not kidding about having a bad memory, and I update all of my bills every other month.
I have a piece of paper that tells me I keep it on a hook. I look at every one of them.

Speaker 18 I see how much interest that they're charging me. I see how much my balance is.
And then

Speaker 18 I tally up my total debt. I also look at credit karma a few times a week.
I just have a bad memory. And if had I known that you're going to be asking me these questions, I would have had this stuff.

Speaker 11 Antoinette, you called a money show, my friend. You know what I mean? And so we're trying to help.
We really are. And so

Speaker 11 my encouragement to you is that

Speaker 11 when there is something, a big, big missing piece, and the car loan is that for me right now, that

Speaker 11 I need you to know what it is because I may need you to make a really quick decision to sell it. Because do you know how much the payment is each month?

Speaker 18 Yes, the payment is $995.

Speaker 11 Okay, almost $1,000. How much money do you get paid once a month per month? What are you making?

Speaker 18 Probably about $7,500.

Speaker 19 Okay. $7,500.

Speaker 2 And let me do a quick follow-up, Antoinette, because I didn't hear you. That's my fault.
Did you say you're independent? And the reason I'm asking this, did you say you're independent?

Speaker 8 No, she works for a company.

Speaker 2 Okay, do they have a 401k or some type of retirement program that you can be contributing to?

Speaker 18 Yes, but I don't, because what's the point of that at my age?

Speaker 2 Because you have nothing. So we can run these numbers, but I mean, the baby steps as we teach them is $1,000 in savings just for basic emergencies.

Speaker 2 Baby step two is to pay off your debts, smallest to largest. That's why Rachel leaned in there.
We want to get the debt out of your life because we just learned that that could save us $900 a month.

Speaker 11 That could be $1,000 that could be going towards the end of the retirement.

Speaker 18 But why would I want a $2,000 beater card? It's going to break down all the time.

Speaker 11 And a $2,000 beater card doesn't always break down all the time. You can ask Christopher yesterday.
He literally had a picture of his, and it runs great.

Speaker 2 And and i'm talking to a person who's super popular in your own words have the ladies pick you up when you're not in the truck

Speaker 18 i want to get all of my family together and take them places i hear your heart and it's

Speaker 2 not going there i don't need the art i want to dunk a basketball uh but some things are not going to happen because i'm five foot eight and can't jump you know if i want to retire with dignity

Speaker 2 I've got to start saving money. And I can't save money if I'm in debt.

Speaker 11 Hey, Antoine, I want you to keep listening to the Ramsey Show for real. I want you to listen every single day for the next six months.
Make that be your goal.

Speaker 11 Just as you're driving, listen to this show because I want this knowledge to soak in and this way of thinking and the way of life when it comes to money.

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Speaker 2 I got to say,

Speaker 2 even though she got a little upset at us, I love Antoinette. I love her spirit.
And I think, you know,

Speaker 2 what I want to touch on real quick, Rachel, is

Speaker 2 I got her frustration. I felt it.

Speaker 2 And that's what it's like when you wake up like she did one day, 61, no retirement, no house, and it feels as though she's at the base of a mountain that's impossible to climb.

Speaker 2 However, we know, and as you pointed out, in talking to a truck driver just recently on this show, it is possible, but the frustration is real.

Speaker 2 And I guess the thing is, is that it's like, hey, this is going to be hard. There's going to be some trade-offs.

Speaker 14 Yes.

Speaker 2 And they're going to be painful.

Speaker 11 Yeah, it's about choices. We have to make choices.
And, you know, we talk to people that are on baby steps four, five, and six.

Speaker 11 They've gotten out of debt in their emergency fund, and they had to make a choice to work extra. They have to make a choice to cut expenses in order to put extra money to pay off debt.

Speaker 11 They had to make choices, really hard choices. But the outcome of what they were doing was worth it.
And so I think that is it.

Speaker 11 There has to be this level of reality of to say, the outcome that I want, and in her case, whether it's a home, whether it's retirement,

Speaker 11 these sacrifices that I have to make in order to get what I want are worth it. And, you know, Ken, I think there are some people in life, they're not worth it for them, you know, and

Speaker 11 they live their life the way they want to live their life. But it is about choices.
We have to make choices. Everyone does.

Speaker 11 You know, we don't have an infinite amount of get to do whatever we want all the time. Yeah.

Speaker 11 And that is, that's difficult.

Speaker 2 So true. Hey, folks, in a few weeks, we're going to be doing our annual special giving edition of the Ramsey Show.
What do we do? If you're not aware of this, it's really fun.

Speaker 2 We ask you all, and we're asking you now to share stories with us about how you have given generously or maybe you've been the benefactor of somebody really giving generously

Speaker 2 and whether that's maybe a surprise tip or maybe a bought Thanksgiving dinner for somebody. This is just about celebrating generosity.
And we get so many great stories every year. year

Speaker 2 whether again you've been on the receiving end of an unbelievable gift or you've been blessed by giving to others. That's what we're looking for.

Speaker 2 And we'd like to hear those stories so we could feature them on the show. Go to ramseysolutions.com slash ask.

Speaker 2 Ramseysolutions.com slash ask

Speaker 2 and put giving in the subject line and share your story. We do this every year at Christmas time, and it's really, really special.

Speaker 2 And that's coming up on December 18th. So those of you who are regular listeners or love the special type shows, mark your calendar because we're going to celebrate living like no one else.

Speaker 2 You You can give like no one else. Speaking of giving, Rachel, this is where Santa Dave,

Speaker 2 I think he's out of control and I may have to have a meeting with him.

Speaker 2 The Black Friday deals, which we're already offering, do you realize this now?

Speaker 11 How great they are.

Speaker 2 But now everybody's doing Black Friday deals before Black Friday. Yeah, 100%.
And I'm irritated about it.

Speaker 11 And we're on the train, people.

Speaker 8 We're on the train.

Speaker 2 And I'm not happy about it. All right, but it is what it is.
You should be happy. You know why?

Speaker 11 $12

Speaker 2 for best-selling hardcovers.

Speaker 2 $12, questions for humans. $6.99 for audio books and e-books.
$15 for our assessments and more.

Speaker 8 I mean,

Speaker 2 Dave, you're giving the farm away.

Speaker 11 Just deals on deals on deals.

Speaker 2 I'm not going to win that battle, folks. But you win.
Ramseysolutions.com/slash store. Ramseysolutions.com slash store.
That's where you get all the great deals.

Speaker 2 All right, let's go to Greenville, South Carolina. Nicole is waiting.
Nicole, how can we help?

Speaker 18 Yes,

Speaker 18 I am very nervous nervous about a change that's coming to us

Speaker 18 and how to raise my children through this.

Speaker 18 My husband is just

Speaker 18 selling a partial of his business,

Speaker 18 a little less than 50%,

Speaker 18 and he's getting a large sum of money just before the end of the year, which

Speaker 18 leads to another question of how do we scroll, do we have to scramble to figure out exactly where to place this

Speaker 18 before the end of the year comes

Speaker 11 okay what what is a substantial amount of money what does that mean

Speaker 2 um six million okay hello it's great nicole you scratch you sound like someone gave you a bill for six million

Speaker 2 no i know because i'm kind of i don't want to act like i got the lottery for six million no no but my goodness i hope i hope that uh maybe you get yourself a light blue box you know with some jewelry

Speaker 8 Come on, Nicole, let's go. Get a little, get a little something from Nicole.

Speaker 2 I wanted to get that out of the way. All right, that's the best advice you're going to hear on this call.

Speaker 8 Nicole,

Speaker 2 seriously, hey, congratulations, you and your husband. Yeah.
This is a pretty cool deal, and I just don't want to fly by that.

Speaker 2 Now, you got the perfect person today to, no, I'm serious.

Speaker 2 She's very, very gracious and very humble, but I think you are really perfect to talk about she doesn't want this to change their life, the kids' life, and all this.

Speaker 2 I think you have tremendous insight on a couple of things. So we'll get to that, but first talk about the end-of-the-year scramble.

Speaker 11 I mean, you guys will have to pay taxes on it.

Speaker 18 Yes, and I understand, you know, that's going to happen. And I know we want to give part of that as well.
Sure. But I'm like, you know,

Speaker 18 my husband went and talked to someone, and he's like, well, you know,

Speaker 18 he plans to go back within the next couple of weeks, you know, once he gets, I guess, more of the contract in hand. It's like, you know, obviously he's like, well, I'm not going to get, you know, that

Speaker 18 investor pro. Or he's like, well, you know,

Speaker 18 they're like, you know, here's your free service, but I'm not going to tell you everything you need to know, right?

Speaker 11 Who's saying that?

Speaker 18 Well, someone that my husband had found to get advice from a business tax pro on advice like this, I guess.

Speaker 8 Okay, okay, so

Speaker 18 it wasn't necessarily one of like a day ransomware.

Speaker 11 No, it doesn't sound like it.

Speaker 18 Yeah, so well, and I'm, I mean, they, I have spoken to one of those before in the past.

Speaker 18 Yes, okay, but then this all went down, and I'm like, well, I can't really make these changes right now and getting my husband involved because he's having to deal with this mess.

Speaker 18 And I mean, not mess, but like, he's had, you know, he's got a lot of this on his shoulders.

Speaker 11 And okay, so what I would do, I wouldn't do anything. I wouldn't do anything.
I think there's a lot of heightened emotion. There's a lot of fog.
It's a lot of decision making. Don't do anything.
Okay.

Speaker 11 Just know in the back of your mind, you're going to have to pay taxes on this. So just, that's the only thing I want you to think about.
So, Nicole, that's the only thing I want you to think about.

Speaker 11 Okay. So just breathe.
Okay. So nothing big has to change.
I would.

Speaker 11 interview and find a great tax pro in your corner to make sure that everything is buttoned up.

Speaker 11 I would do that. And we have some wonderful people, you know, that are affiliated with Ramsey.
If you go to ramseysolutions.com, you can

Speaker 11 interview one of them or find your own. I don't care.
But nothing sketchy, nothing weird. Don't tell me, I mean, whatever that language was, that was weird.

Speaker 18 But that's different than an investment.

Speaker 11 Yes, yeah, yeah, yeah, yeah. So you're, you know, now a financial planner will be able to talk to you about taxes as well.

Speaker 11 But I would want to make sure that you have a great CPA that's saying, hey, here's exactly what you need to do and file because we don't want to mess this up.

Speaker 11 Then I would go sit down with a Smart Vester Pro and to say, hey, here is this amount of money.

Speaker 11 And before that, though, I would want you and your husband to sit down and say, Okay, what are the things that we want out of this? Meaning the generosity portion. Let's talk through that.

Speaker 11 What does that look like? How do we want to do that? What are some things? Because you probably don't want to give, you know, 10% all to one thing. It'd probably be good to get a couple of things.

Speaker 11 And just to say, what, you know, as a family, how can we give out of this?

Speaker 11 I want you to look at: do you guys have a mortgage or any debt?

Speaker 18 We have like $175 on our house. And then really

Speaker 18 all the

Speaker 18 other debt is like vehicles with the business. We purchased the business property

Speaker 8 about seven years ago.

Speaker 18 I mean,

Speaker 18 but

Speaker 11 I would be, sure. So I would write a check, pay everything off.
And then I do want you to remember that money magnifies who you are.

Speaker 11 And so the way you guys have dealt with money before this 6 million,

Speaker 11 it's going to be amplified. And do you like how you guys have handled money? You've dabbled in the debt stuff, all of it.

Speaker 11 And my fear is that the six million kind of creates this oh gosh well we could get into this real estate then we could we could do this and it's gonna be taken up really quick if you guys aren't careful so i would i would make it a value statement of no debt we're gonna get completely out of debt and then we're gonna look at our retirement and say okay what do we need to put away for it to have you know a wonderful which it's gonna be fabulous retirement and then what percentage are we gonna spend so to your point ken i would not change anything with the kids i think they need to be working doing chores they need to believe nothing has changed.

Speaker 11 There's no benefit to knowing that you guys are changed. You maybe go on a nicer vacation and that's all they know.
But I wouldn't change much with the kids. Go ahead and fund their college.

Speaker 11 Like use this money well and have fun with it. You guys

Speaker 11 earmark something.

Speaker 8 Upgrade the cards.

Speaker 11 Do some stuff that, yeah, you guys enjoy. But remember, you give it, you save it, you spend it.
Regardless of the amount, that's the three things you want to do.

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Speaker 2 Today's question is sponsored by our friends at YReFi. Hey, if you've tried everything to fix your defaulted private student loans and nothing's worked, YReFi can help.

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Speaker 11 Today's question comes from Kelsey in Texas. We are debt-free except for our mortgage and my husband's income is not enough to help get our home paid off.

Speaker 11 He is a musician and he dabbles in real estate. The musician world that he loves does not bring in any substantial income and I earn $35,000 a year.

Speaker 11 This year he estimates that he will earn a total of $32,000 a year. How should I communicate with him about the lack of income?

Speaker 11 I understand this is his passion, his life, and a part of who he is, but we are really struggling.

Speaker 2 Okay, Kelsey,

Speaker 2 this is hard. So I want to acknowledge that you're his wife, and you're going to come to him, and you're rightfully going to say, hey,

Speaker 2 85K,

Speaker 2 which I bring home, plus your 32, which you're estimating, is just not enough for where we could be, where we should be, where we need to be. And let's lay that out.
Let's make a numbers case.

Speaker 2 Say, hey, we need more money. And here's how I've come up with this number.
I'm not pulling it from the sky. And I'm making this up to answer the question.

Speaker 2 But if you determined that we needed an additional $75,000 to knock out debt, catch up on investments, all of these things.

Speaker 2 Then we present that number. And this is, all of this is non-emotional.
This is just, hey, I'm digging in the numbers. I know you love music, and I don't want you to give it up.

Speaker 2 This is how we lead, Rachel. Do not want you to give up music.
However, dabbling in real estate,

Speaker 2 can we go from dabbling to all in? And keep the music going at night. Keep the music, find a gig here and there.
Don't give up on the music. But the music is not the focus.
It is an outlet.

Speaker 2 It's creative, keeps his soul alive. It's a good thing.

Speaker 8 Yeah.

Speaker 2 But for this season, we got to go all in on something. And since we're dabbling in real estate, if one goes from dabbling to really focusing, you can win.

Speaker 2 And I would have him go talk to my friends at the Buffini and Company. Brian Buffini is the number one real estate trainer in the world.
And I do everything Brian tells you to do, and you'll crush it.

Speaker 2 So this is a tough conversation, but we have to lead with real numbers, vision. You don't have to give up your dream and your creative outlet, but I need your help.

Speaker 2 And we have got to lock arms and go at this. Now, that's the male perspective.
Yeah. What would you change? What would you add to the messaging there?

Speaker 11 So I think if I'm in this situation as the wife, I'm looking to say, okay, we have these goals out there that ultimately lead to a life that I'm longing for. I want the house paid off.

Speaker 11 I don't want to have to worry about that. I want to know that we're going to be taken care of in retirement.
You know, there there are these

Speaker 11 benchmarks that I would feel safe and good to know that we are at least on track of hitting. And the fact that we're nowhere near it makes me fearful, and I don't like that.

Speaker 11 And so that's me, but us as a team, I want us heading towards the benchmarks together. And if I feel like I have to be dragging you the whole way, that's not a fun marriage.
You know what I mean?

Speaker 11 Like, that's not fun. And so there's something along the lines of starting with what is going on inside of, you know, inside of you kelsey um

Speaker 11 and then also the fact the team aspect of marriage more and more ken i don't know if it's because we've just hosted this show and we get so many relation call relationship calls but there is a game changer in the health of your marriage and the peace of your marriage when you are a team on these kind of things and money is one of the big one of the big components right they say in-laws raising kids sex religion money like it is and when you are aligned on these things again you're gonna be different in them i'm a spender you're a saver you may be more chill not as goal.

Speaker 11 Like, we're all going to still be ourselves in it, but we at least are heading in the same direction. When you're fighting against those directions constantly, that's exhausting.

Speaker 11 You know, and so I think the team aspect more and more for me for marriages, I think, is as big.

Speaker 11 So, let alone just the

Speaker 11 career path. It's more, I want us to be on the same page of where we're going financially.
And how do we get there?

Speaker 11 And that may mean sacrifices on one, one side or the other, but at least we're heading in that direction. That's right.

Speaker 2 And you don't have to give up the fun, creative dream or outlet. You just keep it where it's supposed to be for this time.
Yes, yes.

Speaker 2 Which this is just a side thing that we mess around only when we have time. That's the key on those deals.
We're not giving it up. All right, let's go to Armando in Los Angeles.

Speaker 8 Armando, how can we help today?

Speaker 24 Hi, thank you for having me on the call. I just want to say I love your guys' show.

Speaker 24 So I want to preface this with saying this is a conversation me and my mom have been having for a bit now, and we're kind of trying to decide.

Speaker 24 And we figured, you know, you guys are probably the best people to ask so i'm trying to decide basically between whether staying at my full-time job uh where i'm a manager at a gym i make about four thousand dollars a month after tax with bonuses um or going to my passion which is starting my window cleaning business um that's currently producing about three thousand dollars a month and I only do that on the weekends.

Speaker 24 And so I'm at a point where I personally feel like I could start generating more during the, if I had more than a weekend

Speaker 24 during the week to produce more.

Speaker 14 Well, let me jump in.

Speaker 2 Let's jump in right there.

Speaker 2 Are you already getting calls and leads? In other words, people going, hey, Armando, I'd love for you to come clean my windows. And you're having to push them out a few weekends just because of time?

Speaker 2 Is that already happening?

Speaker 24 Yeah, I've had that a few times already. We're actually, and that's without even, we're just getting the website and everything set up this month.
I've only had the business for about 10 months.

Speaker 8 Where are you getting your leads?

Speaker 8 A lot of them are referrals and door-to-door.

Speaker 2 Bro, first of all, let me just say, you will not lose. I love that your answer is referrals.
That means you're doing a good job for people.

Speaker 2 And door-to-door, that means you hustle and you're not afraid to know. Armando, that right there is the success formula for entrepreneurs.
So I love that. Do you have any personal debt?

Speaker 24 I have no debt. I am debt-free.

Speaker 2 All right. And then we call savings in a business retained earnings in your business account.
And I'm assuming you have one, yes or no?

Speaker 24 I do not.

Speaker 2 So you're just taking the money you're making from the window cleaning and running it through your personal finances?

Speaker 24 I just put it in a savings account. Oh, okay.

Speaker 24 Yeah, and just in a big account currently saved up because I paid off a bunch of debt recently. So I now have 8,500 saved up.

Speaker 2 Okay, so you have 8,500. Now, is that in the savings account that's that's just the window cleaning business, or is that a combination savings?

Speaker 24 Combination savings, spending money to kind of go and play around with.

Speaker 24 I always keep in my checkings about $1,000.

Speaker 2 That's great. But here's the deal.
So, you know, we teach, you know, we teach a three- to six-month emergency fund after we pay off debt. Do you have it?

Speaker 2 What's your so your three to six months expenses is what?

Speaker 8 What's three months?

Speaker 24 Yeah, I only, three months really is

Speaker 19 only about, I believe it's $4,000.

Speaker 24 My expenses right now are only $1,200 a month. I am very blessed, very blessed to not have to pay.

Speaker 21 All right.

Speaker 2 So I want to move quickly, but I want to get Rachel in real quick. What would you think is a good amount on the emergency fund, just personally?

Speaker 11 Yeah, I mean, where you're at right now, I mean, maybe 5,000.

Speaker 11 Yeah, I was going to say not that much. It may change if your living situation changes, but for now, that.

Speaker 2 So, Armando, I'm going to recommend that you get a separate savings account for the window cleaning business. And for this example, I'm going to call it window cleaning, Armando's window cleaning.

Speaker 2 Okay.

Speaker 2 You need a separate bank account for that because my advice to everybody in this question, which is when do I know that it's okay to leave my full-time job to go into my side hustle?

Speaker 2 And I want to see six to 12 months. I'm pretty conservative.
I'd like to see six to 12 months of your salary saved in a window cleaning bank account. All right.

Speaker 2 So that's just me. And the reason is, is because when you leave that full-time job, I don't want you thinking about the next six to 12 months of a payday.
You got low, low cost of living now anyway.

Speaker 2 That's my advice. And when you get that number saved up, whatever that number is, and let's just say it's

Speaker 2 25,000

Speaker 2 and you've got a pipeline stacked up, then I would say see you later to my full-time job.

Speaker 2 I'd like to see you have six to 12 months expenses in the window cleaning company saved and then make the move. Rachel, I.

Speaker 11 Congrats, though, Armando. That's awesome.

Speaker 2 Thoughts on that real quick? Final word?

Speaker 11 I think that's safe. I think it's awesome.
And I think you'll get there faster than what you expect. And you're going to kill it in the window cleaning.
Love it.

Speaker 8 Thanks for the call.

Speaker 2 Rachel, the all-new every dollar is here. And folks, it is truly way more than just our world-class budgeting app.
I've been talking about this on the show.

Speaker 2 I got a meeting with the team, and I said, show me all the,

Speaker 2 just take me in the thing. Give me a tour.
And it's amazing. It's literally like a digital version of us on the show for those who call in.

Speaker 2 The first 15 minutes of answering the questions that the team provides you in this app, they're going to help you find thousands of dollars immediately in savings.

Speaker 2 We're seeing this in an average of people who use it. You can start every dollar for free by going to the app store, Google Play.
Tons of advanced features, not just budgeting. Now, that's amazing.

Speaker 2 But the fact that you've got a digital coach, mentor, accountability partner, whatever you want to call it, all those facets are in there. Fantastic.

Speaker 2 So, you got to go check it out and give it a whirl. It's free.
And I'm going to tell you, you're going to love it. Donna is up next in West Virginia.
Donna, how can we help?

Speaker 18 Hi, Ken and Rachel.

Speaker 18 I love all the personalities, but Ken, I'm really glad you're there today. I love the way you spin a tail.
You really make me chuckle. And I love

Speaker 18 your story from a few weeks ago about the welfare chicken. I grew up on on a farm and can relate to that.

Speaker 8 Thank you. Yes.
Thank you.

Speaker 8 The welfare chicken.

Speaker 18 You didn't get in trouble for telling them to sell the chicken.

Speaker 11 I think I was on there with you, Jeremy.

Speaker 2 You did not get in trouble, and I had forgotten about that, Donna. So thank you.
That's really fun. Thank you.
You're a sweet lady. By the way, I have to ask, where in West Virginia are you?

Speaker 18 Oh, geez, Romney.

Speaker 8 Do you know that town?

Speaker 2 I think I've heard of it. Do you know Point Pleasant by any chance?

Speaker 8 Oh, that's way far away.

Speaker 18 We're in the panhandle between Winchester, Virginia Virginia and Cumberland, Maryland.

Speaker 2 Yes, yes, yes, yes. Okay.
I was born in that little teeny town of Point Pleasant, West Virginia.

Speaker 8 Point Pleasant.

Speaker 2 I don't know where it is.

Speaker 18 I've been there.

Speaker 2 Well, I'm going to tell you, not many people.

Speaker 14 It's across the state.

Speaker 9 Yeah, that's right. It's across the state.

Speaker 2 All right, Donna.

Speaker 2 My sister from another mister here in West Virginia.

Speaker 8 How can we help today?

Speaker 18 Well, I'm 69, and my husband is almost 71. And we started our careers in the 70s.
And at that time, people were saying, oh, you're so lucky. You have a pension.
You'll have Social Security.

Speaker 18 You don't have to worry about retirement. So we didn't.

Speaker 18 And we're doing fine now with our pension and our

Speaker 18 Social Security, but we haven't saved a lot of money. And we had to put my mother in a nursing home

Speaker 18 last year, an extended care nursing home. And it really scared me and shocked me at the cost.

Speaker 6 per month for that stay.

Speaker 18 And what my question is today, and I've been having friends tell me, you know, you need to sign your house over to your kids

Speaker 18 to save it from being taken and all of this. And I know Dave says that you shouldn't do that.
I have heard him. I haven't heard him talk a lot about that, but I have heard him say that.

Speaker 18 And I was just wondering what the pros and cons are to that. And

Speaker 18 if there's no pros,

Speaker 18 what can we do? Or is there something we can do to save our house?

Speaker 8 Well, let's go back a step.

Speaker 2 we what do we a fear what are we afraid that's going to happen that would even uh allow us to consider that advice what are you afraid is going to happen

Speaker 18 oh it for the uh signing your house over yeah oh well there's i guess a lot of things i mean i've been listening to the stow storm work

Speaker 18 uh show long enough that uh i know if you have kids if anything happens to your kids then then that can if they're in an accident or uh anything like that uh yeah but you're talking about you're talking about your house.

Speaker 18 I'm talking about my house, yes. And your house is a house that my husband and I own.

Speaker 11 Sure. And you're worried you're going to lose it to who or why?

Speaker 18 Oh, Medicare. I mean, if you can't pay, if you go into a nursing home,

Speaker 8 Medicaid is going to look at possessions.

Speaker 11 They're going to be looking at your

Speaker 2 now we're caught up.

Speaker 8 Sorry, we weren't 100% sure.

Speaker 11 And the reason we do we say that is because a little bit it feels like you're hiding assets when you just sign it over with a wonder.

Speaker 18 I mean, I don't know.

Speaker 8 I know.

Speaker 11 So, yeah,

Speaker 11 not a great thing because you're basically lying to the government that you don't have an asset when you really do. So,

Speaker 11 okay, do you have long-term care insurance, Donna?

Speaker 18 We do, but I got it. It's been probably before I realized the cost, my father-in-law went into just an assistant living, and his was about $3,500,

Speaker 18 $4,000 a month. So when we got our long-term care, it was very expensive anyway because I have some health issues.
So it was high. Sure.
And ours is only $3,000 a month.

Speaker 18 And then my mom's came up and it was $14,500 a month. And I'm like,

Speaker 18 I was just in shock that it was really expensive.

Speaker 11 Well,

Speaker 11 okay, so a couple of things to think about that we don't know yet because how old are you guys?

Speaker 18 I'm 69. My husband's 71.

Speaker 11 So a lot of different things.

Speaker 11 Number one, you don't know if you guys are going to need. a nursing home anyways.

Speaker 11 Number two, if you did get to a point of a nursing home,

Speaker 11 you know, there are things you can do. You can sell the house and use that to fund if you need to.

Speaker 11 There's also, what are you guys doing with your pension and all of that? What do you have coming in?

Speaker 11 Per month, you mean what we have? We have,

Speaker 18 it's like $9,942.

Speaker 18 Okay. So, I mean, it's decent.
And we did just start

Speaker 18 two years ago. We have started putting some away.

Speaker 18 We both bought, I bought us and my husband a spouse. I'm still working a little bit.

Speaker 8 Okay.

Speaker 18 And I made enough money to be able to max out both a Roth for me and a spousal Roth for my husband. I did that when we got one of your pros.
Good. Great.
And

Speaker 18 he said to get one, we got him in April and he said, oh, hurry up and get a Roth before April 15th for the taxes. Yeah.

Speaker 18 That's right. So we did that.
And then when we finally sat down with him, we had enough money saved to do another one for 2025.

Speaker 8 Wonderful. So what do you have?

Speaker 8 What do you guys have total?

Speaker 18 We have 32,000 in

Speaker 18 Roth right now.

Speaker 18 And then we were playing around just during the years.

Speaker 18 And we have about 50 that our financial advisor is rolling over, about 50,000 that he's rolling over into IRAs now that we're still in with the companies that we retired from.

Speaker 2 So just below $100,000. thousand and then what is your house worth

Speaker 11 about four hundred thousand okay okay yeah so it would be one of these things if you guys did get into that situation whether it's the insurance

Speaker 11 some savings you know whatever you can put together

Speaker 11 to get into a nursing home and I'll be honest on it this sounds it sounds horrible but there is a stat that once you enter into a nursing home for on average it's there's not that long of a stay usually sometimes it is sometimes it's not either so it is kind of one of the last steps that family members will take if they're not able to care for um you know their family member and and so that would be kind of that that last step if you will so if i was in your shoes i may ask about upping the long-term care i'm just curious what other options are out there for you guys um i would be looking at that because that's going to be very helpful type of insurance for you all if the time comes that you need in-house care, nursing home, all of it.

Speaker 11 And you guys also are sitting on a great asset. And you know what I mean?

Speaker 11 If something were to happen to either you or your husband and you did get to a point that you guys didn't have the money to cash flow it and yet there was a nursing home that you knew

Speaker 11 they needed to be in, you know, him or yourself.

Speaker 11 There's always the possibility of selling the house, you know, and figuring out what to do there.

Speaker 2 So Don, I'm going to give you something. Rachel made a great point.
I looked it up. The average length of stay in a nursing home is 485 days.
Now, of course, this varies, but averages do play out.

Speaker 2 So you're looking at about, you know, a year, three, four months. So, you know, it's horrible to, but that's the reality, and we're talking about that.

Speaker 2 So, you know, between the pension and everything, Rachel, you make a very good point. It's not like you've got to fund this crazy amount for five years.
Yeah. You know, so

Speaker 2 I think you guys are doing everything you can. What, how much longer do you think you're going to work?

Speaker 2 Um,

Speaker 18 as long as I can. I love it.

Speaker 8 Okay. Do you work full-time?

Speaker 18 No, no. I do occasionally.

Speaker 18 I'm a teacher, and sometimes I'll take a long-term sub-job, and sometimes right now I'm just doing day-to-day. And it's a good thing.

Speaker 2 I'll bet the kids love when Donna shows up to be the sub. You seem like a really nice sub.

Speaker 14 I hope so.

Speaker 18 I hope they do.

Speaker 18 They always say they do, but you know. Yeah.

Speaker 8 Well, that's good.

Speaker 2 And what about your husband? Is he officially done working or still working? Yes.

Speaker 18 No, he's officially done. He's a golfer.

Speaker 9 He's fallen into the golf.

Speaker 8 I love it.

Speaker 8 Good for him.

Speaker 11 Well, at least there's a little bit of a foreshadowing of watching your mom and how expensive it has been for your mom or your dad that you guys can start planning.

Speaker 11 But if that time were comes, how we would be able to cash flow that. So thanks for the call, Donna.

Speaker 2 Do we know if people can search welfare chickens on Spotify or YouTube and find that rant? Do we know?

Speaker 11 We don't know. Sure, you could try.

Speaker 2 But they can't. Oh, you all missed it.
It was really great. Donna said so.

Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Alongside Rachel Cruz, I'm Ken Coleman.
Thanks for being with us. We're here for you.

Speaker 2 888-825-5225 is the phone number. Let's go to Caitlin, who joins us in Charlotte, North Carolina.
Caitlin, how can we help?

Speaker 8 Hi, good afternoon.

Speaker 26 I'm a recent college graduate from West Virginia University, and I will start paying student loan debt come January. And I want to know what is the best and effective way to go about that.

Speaker 2 How much student loans do you have?

Speaker 26 They will be around $26,000.

Speaker 2 And is it multiple loans?

Speaker 18 Yes.

Speaker 2 Okay, so what's the smallest amount?

Speaker 2 The smallest amount, I believe, is about $5,000.

Speaker 8 Okay.

Speaker 2 All right. So

Speaker 2 is that the only debt you have?

Speaker 2 Yes, that's the only debt I have.

Speaker 8 All right.

Speaker 2 Rachel, walk her through the various steps.

Speaker 11 Are you working?

Speaker 26 Yes, ma'am. I work a full-time job.

Speaker 11 Great. How much do you make a month? How much do you bring in?

Speaker 26 About a month, maybe

Speaker 26 maybe $150 to $1,800 a month.

Speaker 11 A month. Okay.
What are you doing?

Speaker 26 I work at a boutique.

Speaker 2 A boutique. Okay.
What kind of boutique?

Speaker 8 A women's boutique, just a locally owned.

Speaker 2 Like a spa?

Speaker 11 No, like a clothing store.

Speaker 8 Women's clothing. Oh,

Speaker 2 sorry, a little slow on that. I don't know.

Speaker 2 Well, there's lots of different boutiques. There's like boutique hotels,

Speaker 2 boutique spas. Sorry.
Fair. None of this matters.
Why do you, I have a question on your income.

Speaker 8 Yeah.

Speaker 2 That is for a college grad, that is way below what your expectations were, I'm guessing. Yes or no?

Speaker 26 Yes, so I've had this job for about two years. I worked this job throughout college, and that is the job I'm still currently at.

Speaker 2 Okay, what did you get your degree in?

Speaker 11 Business and marketing.

Speaker 2 So what do you want to do?

Speaker 2 And I'm not going to put you under pressure here on a show live, but give me a general idea it doesn't have to be a company and a title but describe the work that you went to school for that you would love to have if I could just wave my pencil in the air and give it to you

Speaker 26 well the work I would be interested in is going into law school

Speaker 2 okay so we went for business and marketing and we're like this is not what I want to do but I'm just going to finish it and then somewhere along the way we discovered I want to be a lawyer in a specific type of lawyer

Speaker 2 Corporate law, sir. Corporate law.
Okay, so a tie-in to the business and marketing.

Speaker 2 Yes. Okay, what's law school going to cost you?

Speaker 26 Law school is probably going to cost me around probably $100,000.

Speaker 8 And where are you going?

Speaker 26 I have not yet made my decision,

Speaker 26 but I'll be taking the L side soon. Okay, great.

Speaker 2 I want to make a quick commercial and I'll hand it to Rachel. But you got to get your two things.
Number one, you need to get your income up, right?

Speaker 11 Yeah,

Speaker 11 you should be making double.

Speaker 2 I don't even care what you're doing. Yeah.
At this point, you need a target of $40,000 to $50,000. Let's just put it out there.

Speaker 2 I don't want to limit you to that, but you just need to get out there and find something because more cash, the better. Now,

Speaker 2 and Rachel will tell you what to do with that cash. But I just want to make a point on the LSAT.
Years ago, I interviewed a law school expert on this, and this is a fact, by the way.

Speaker 2 There are certain schools, you're going to have to do your homework on this, but you can figure it out easily that based on your LSAT score, Rachel, if if you get a high enough LSAT score, they will give you a full ride.

Speaker 2 And the reason is these aren't the prolific ones. Let me just go ahead and tell you.

Speaker 8 This isn't Harvard.

Speaker 2 It's not the big-time schools. These are the schools who nobody wants to go to their law school.

Speaker 2 So, therefore, they're trying to get people into their law school because they want lawyers out there and they will give full rides.

Speaker 2 So, these are going to be smaller schools, not as well known, but they have legit law schools. And let me just make my pitch on this: nobody cares where you got your law degree from.

Speaker 2 And so, the trade-off is, Caitlin, you have to pay for the LSAT.

Speaker 2 And if you need to take the LSAT five times, take it. If we're aiming for and we feel like the tutors will tell you,

Speaker 2 we can get you to this score, which gets you a free ride. So that's my commercial.

Speaker 11 Yeah, it's worth investing, you know, five, six grand or it'll be like an equal, like, honestly, when you think about it.

Speaker 2 Totally.

Speaker 11 With tutors and everything.

Speaker 2 And I don't know what the current LSAT cost is.

Speaker 11 $100,000 degree for free.

Speaker 2 So that's what you need more money for. Yes.
Plus, we got to pay off these loans. So, Rachel, tell her how we pay off these loans.

Speaker 11 And that needs to be your way to law school, Caitlin. I really want you to see that because you're going to be $126,000 in debt if you don't.

Speaker 11 So, we want to really work hard to avoid all those student loans.

Speaker 11 Yeah, so it's getting your income up, Caitlin. So, I mean, I really hate to say it, but I mean, I would probably be looking for another job.
I think it was a great thing to get you through college.

Speaker 11 But now that you're a college grad, you know, you made that investment for a reason.

Speaker 11 And so now we need to go ROI it and we need to go, you know, get a job, like Ken said, making 40,000, 50,000 a year. And I would limit all my expenses.
I would live on nothing.

Speaker 11 And I would make it a goal to get this paid off in 18 months, 16 months, 14 months, you know? And so, I mean, I really think you can.

Speaker 11 Do you have rents? Are you living at home? What's your living status?

Speaker 11 I live at home. Okay.
My family. Okay.
So no rent.

Speaker 11 So I would take full advantage and make a really, really aggressive goal of getting this paid off. And then at the same time, be looking at the LSAT stuff and make that also a part-time job.

Speaker 11 So I don't know if it's a, I don't know right now if it's a full-time job that you go and find, you know, a receptionist, I mean, anything, like just go and answer phones, I mean, do something.

Speaker 11 Or if you do the boutique during the day and you wait tables at night and you're doing a two two day, you know, a two job a day kind of thing to double this income.

Speaker 11 But this income needs to be doubled, Caitlin.

Speaker 11 you're a college grad and I think that you have you have things to offer and and again it's it's kind of back to this college degree conversation that you got your degree for a reason to go and create a career and and so taking that knowledge and going and doing that and upping this income is going to be is going to be your number one goal because Caitlin here's the deal

Speaker 2 you are young enough and this debt is small enough that you can pay this off in a year. But you got to make more income than we're putting two grand a month away.

Speaker 2 So like like Rachel said, what must be true for me to be able to sock two grand, $2,500 a month away at the $26,000 loan? Knock that out

Speaker 2 and get it out of the way before the interest starts hurting you. Okay.

Speaker 2 Because I know people that are, that have your amount of loan debt and they're paying it for 15, 20 years because they're never catching up because of the interest payment.

Speaker 2 So you want to get this out of your life.

Speaker 2 And I just, I'm telling you, if you trust me and you do your research, you can go to law school for free or for a very reduced amount that you can cash flow and most people don't know that and please do that because you're going to just be so much more at peace so there's your homework assignment pretty straightforward but you got to hustle yep

Speaker 2 so thanks for the call you know rachel that is um i love when we get that call and i and i'll be honest i've not interviewed people in other lanes but i i would almost bet you there's other professional lanes

Speaker 2 like that that where certain schools are going, you know, like med schools are going, we want to get people in here.

Speaker 2 And the sticker price on a Vanderbilt, which is in the shadow of our campus here, versus a small school.

Speaker 11 Totally, yes. And it's an and it's an ego play to go to someone's like, hey, where are you going to law school? And it's a

Speaker 8 Harvard law.

Speaker 11 Maybe, yeah, or you're going to one that no one's ever heard of. It takes, and you got to have some humility to it, but you're doing it in a wise way.
You know what I mean?

Speaker 11 And so there's something special.

Speaker 8 So it just rarely comes up.

Speaker 2 Yeah. Clients aren't going to go, hey, I've heard rumors that you got your law degree from Greenbrier State.

Speaker 11 Are you thinking about vet school, law school, med school? I bet George Campbell when he took his dogs into the vet, he didn't say, Let me see your degree before. He said, Save my dogs.

Speaker 11 That was all last week. So that poor guy.

Speaker 2 Tanya. That poor guy and his dogs.

Speaker 2 It's like a soap opera, folks. We don't have time to cover it.

Speaker 11 We'll have him cover it, George, if he hosts here in the next week.

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Nick is up in Detroit, Michigan. Nick, how can we help?

Speaker 27 Hey, hello, guys. Thanks.
Thank you for the time, by the way. Appreciate it.
Sure.

Speaker 27 Yeah, so I own a business I've owned it about 10 years now. I've grown it from, you know, grossing maybe like 80K a year to now we're about 1.5 million a year.

Speaker 2 Congrats. What kind of business?

Speaker 12 Oh, appreciate it.

Speaker 27 Well, we are a mortuary transport, so we move the deceased.

Speaker 2 Oh, is that right?

Speaker 8 Yeah, I'm sure you guys get that a lot.

Speaker 2 Well, no, and that, and so I just think this is interesting. So, 10 seconds on this, is that we're not talking about the hearse.
We're talking about

Speaker 2 to the funeral home, from the hospital, or from people's home. Precisely.

Speaker 27 Yeah, actually,

Speaker 27 it's everything. The hearse is included.

Speaker 8 Oh, you do that as well?

Speaker 14 It's rented.

Speaker 8 Yep. Got it.
Okay.

Speaker 2 Fantastic. So

Speaker 14 storage all of it.

Speaker 2 Oh, wow, wow, wow. Okay, great.
So keep going.

Speaker 27 Yeah, so the issue is like growth is awesome. It went well.
I was always on top of it, but it maybe was a little too quick. And I know Dave would hate me for it.

Speaker 27 Maybe all you guys would, but I have loans, a lot of them. And so it's about $580,000.
And so the main question is, my goal is to try to pay that off as quick as possible.

Speaker 27 But people that I admire, and they're they're very intelligent people, don't think that I have the funds readily available for emergencies to do that and that I shouldn't do that.

Speaker 2 Well, just give us your picture. So, so we know you have $580,000 in loans just for the business, correct? Correct.
And what is the monthly payment to service that debt?

Speaker 27 So it's about $18,000.

Speaker 2 $18,000 a month. Okay.
And then

Speaker 2 give me a picture.

Speaker 2 Well,

Speaker 2 are you planning, you expect to do $1.5 million this year, 2025?

Speaker 3 I am. Yep.

Speaker 27 We were doing 2.2, so we got kind of hit kind of hard. It came down.
But yeah, that's definitely sticking around.

Speaker 2 Okay, so 1.5 top line, that's your gross. Yep.
Okay. What kind of retained earnings do you have? Do you have any savings in the business? Yeah.

Speaker 27 So, yeah, some of the stats that are probably helpful is that it varies from about maybe

Speaker 27 $110,000 to about $150,000 a month. And the profits can range from negative $10,000 to about positive $30,000.
That's a snapshot from this year. It's in like pretty average.

Speaker 8 How many months?

Speaker 2 Okay, but how many out of the 12 months were you in the negative?

Speaker 27 Once at negative 2,000 and once negative 5,000.

Speaker 8 Okay. And then

Speaker 27 that includes paying it off.

Speaker 2 Gotcha. And your best month is 30,000 profit, actual net profit.

Speaker 11 And how much are you bringing home?

Speaker 27 I pay myself like 40,000. I'm just trying to build something.

Speaker 8 Okay.

Speaker 8 Okay.

Speaker 27 Yeah, I don't spend money in my personal life or do much, but like a really cool way, though, you know.

Speaker 27 Sure.

Speaker 11 Yeah.

Speaker 11 How much,

Speaker 11 how many people do you have working for you?

Speaker 27 I got 25 employees.

Speaker 8 Okay.

Speaker 11 Because I'm just trying to think where you can be lean on

Speaker 11 the expenses side because that's the way you're going to be getting, obviously.

Speaker 2 What's the debt vehicles?

Speaker 20 There's about maybe 200 in vehicles.

Speaker 27 I had to take 200 out for taxes that weren't paid. So that was a big hit.
So I'm just paying back payroll taxes.

Speaker 2 All right, did we learn our lesson on that?

Speaker 27 We did. I hired a new CPA.
Not that it's, you know, I should be, I should be looking at it too.

Speaker 19 It's my fault.

Speaker 8 Right, right, right. That's okay.

Speaker 2 Not judging, but just want to make sure that it was on it.

Speaker 8 Yeah.

Speaker 2 We've now adjusted for that, and we're never going to have that surprise again. So that's that's good.

Speaker 2 Of course. Yep.
Well, I think your friends are wrong if they're saying they shouldn't pay it off.

Speaker 27 Yeah, I only have 50K in reserve, and so their concern was: like, if you have a couple bad months in a row, then you'd be done.

Speaker 27 And it's not an unwarranted concern, but five years to two years, it just seems really appealing

Speaker 11 to keep

Speaker 27 debt-free.

Speaker 4 Like instead of five years ago,

Speaker 2 I think you can do it. But again, it's the same advice we give other people, Rachel.
We don't tell them to just go, I mean, it's a baby step process, right?

Speaker 2 We say smallest to largest when we're talking to personal

Speaker 2 debt. And so in your case,

Speaker 2 you're just chipping away at it. And so you've got to come up with a business budget, too, that goes, all right, I'm going to have some variable numbers here.
It's just the nature of the business.

Speaker 2 So it's really locking in. Rachel, start to correct me when I get wrong here, but you're looking every month at the books.

Speaker 2 And when the books are cleared that month, we know, okay, this month we cleared $5,000 net. That's after paying you and everybody else.

Speaker 2 Okay, well, then that's going to change how much we're going to put towards the debt. But then we get a big month of 30,000, we can put more.

Speaker 2 And so it's just being really disciplined and looking each month to do what you can. And as you grow, knock this thing out.

Speaker 11 Yeah. Is it seasonal, Nick, at all for you? The ups and downs?

Speaker 8 Not really. No.

Speaker 8 It's pretty steady.

Speaker 27 Maybe winter's a little busier, but not enough to be any

Speaker 8 seasonal work.

Speaker 2 Can I ask a really dumb question?

Speaker 2 I understand it's about people dying, but

Speaker 2 aside from that,

Speaker 2 what causes it to drop? from 2.1 million you said, and forgive me for forgetting, to 1.5?

Speaker 27 in my in my case it was a client

Speaker 27 aha a client that was i don't know how to say it because we you know we work for you know all the funeral homes or you know we were the counties the medical examiners colleges place of life so a client dropped off

Speaker 2 correct okay yeah big one so are you in this in the process of replacing them

Speaker 27 I mean, that's the goal. I mean, I'm sure every business has its challenges, but in this industry, it's just super slow to change.

Speaker 27 If you have a director of a funeral home, they use the service for 30 years. Right.
Unless there's a reason to change. Yeah, you got to

Speaker 27 be there. Yeah.
Be ready.

Speaker 2 Yeah. It's so relatively.

Speaker 27 Otherwise, I get creative other ways.

Speaker 14 Okay.

Speaker 2 All right. I was just curious about that.
So, I mean, this is a Rachel thoughts on that. I mean, this is just a

Speaker 11 and I was just trying to run some clip math.

Speaker 8 Yeah.

Speaker 27 Do you think like $50,000 in the bank as far as like maybe like did that just mean the reserve amount? Is that comfortable, you would think, with $50,000 payroll a month?

Speaker 11 I would probably do three months reserve amount.

Speaker 2 Three months, yeah.

Speaker 11 I would do three months.

Speaker 27 150,000. I mean, so for me to say it was that much, that might be a year or two, right?

Speaker 4 So correct?

Speaker 11 Right. So I would probably lower that.

Speaker 11 Yeah, because always, Nick, too, if you guys, because if you're being aggressive on the debt and you have two bad months and you only have one left, you could pause the aggression on the debt, stockpile some money, pause that for about three months to pile up some money, and then press play back on getting out of debt.

Speaker 11 But yeah, I mean, I would have a goal to try to do all of this. And gosh, I mean, if you stayed focused,

Speaker 8 I can be focused. What? Yeah.

Speaker 11 I mean, give yourself two years. I don't know of what you can do to be very good.

Speaker 8 If you know your business,

Speaker 2 if you have a bang up year, like just phenomenal growth or just a great year, $2 million a year.

Speaker 27 Yeah, at this point, any growth is majorly profit. So every profit assets, I'm at that line, right? Right.

Speaker 2 So after you get the three months of retained earnings in there to be able to cover payroll, every nickel of operation, what do you think you could put away in a year towards debt?

Speaker 8 Towards debt? Yeah.

Speaker 13 I mean, I don't think two years is out of the question.

Speaker 27 I think that could be done. I mean, if I'm paying $18,000 right now in that debt and I have some months where I'm making 10 or 20, yeah, of course, I can be doing 30, 30.

Speaker 8 I think you're going to feel, listen, that's the point.

Speaker 2 You're going to love not having any debt on this business.

Speaker 2 Can you imagine just for a second, not having $18,000 a month going out to service that debt?

Speaker 27 Yeah, that's why people I feel like, you know, sometimes I'm like, oh, man, my business is not doing well. But I'm like, no, healthy.
It just needs to come through.

Speaker 27 It just needs to make it through this

Speaker 27 moment.

Speaker 11 Yeah, I would make, I would probably make a two-year goal and just say, you know what,

Speaker 11 and especially if you lowered what you have, that's going to throw a big chunk at it, which is really great. And get the IRS debt paid off first, the 200 that you had the IRS.

Speaker 11 And then everything else, yeah, start chipping away at it. But I think if you stay focused and diligent, Nick, honestly, I think you're going to see a lot of progress.
And throwing that extra at it,

Speaker 11 yeah, I think it's great.

Speaker 11 You know,

Speaker 11 business is business. I don't know.
We need, I guess, we need next business.

Speaker 2 Everybody's dying.

Speaker 8 It's horrible.

Speaker 2 I'm trying not to make any jokes. It's a very serious topic, but it's just like I wanted to know what was affecting his business.
He's like, well, it's a little busier in the winter.

Speaker 8 I'm like, oh, bud.

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Speaker 2 All right, it's time for a fun, fun call here with Stephen, who is a baby steps millionaire. He's in Minnesota.
Let's bring him on here. Stephen, how are you today?

Speaker 20 I'm just fine and dandy.

Speaker 2 I'll bet you are, sir. As a baby steps millionaire, you don't have a whole lot of gripes, do you?

Speaker 20 Not too much.

Speaker 19 All right.

Speaker 20 I could gripe and whine, but nobody's going to listen to me anyway.

Speaker 2 You know what, Stephen? I appreciate that because for a second, I thought you were going to give me a few, and I thought, oh, I opened up a can of worms here.

Speaker 2 But hey, we are so excited to talk to you.

Speaker 2 Tell us how old you are, Stephen.

Speaker 20 I'm 72.

Speaker 2 72. Okay, and what is your net worth?

Speaker 20 Net worth is around 4.7 million.

Speaker 2 4.7 million.

Speaker 11 What is that made up of?

Speaker 20 Multiple things.

Speaker 20 Land.

Speaker 20 I'm a farmer, retired farmer.

Speaker 4 I'm unemployed.

Speaker 8 No, retired. What's that?

Speaker 20 I've invested in some

Speaker 20 apartment complexes,

Speaker 20 IRAs,

Speaker 11 stocks.

Speaker 11 Yeah, that's awesome.

Speaker 11 What was the, from an income perspective, Stephen, what was the lowest you've ever made in your life?

Speaker 20 The lowest I've ever made, probably lost about $20,000 or $30,000.

Speaker 11 Oh, a negative. Okay, that's good.
A negative.

Speaker 20 That's one of the problems with farming is it doesn't always, it's not always profitable.

Speaker 8 Sure.

Speaker 12 You can have a real bad year.

Speaker 8 Yeah.

Speaker 11 What was the best year you ever had?

Speaker 20 The best year I've ever had,

Speaker 20 probably

Speaker 20 between

Speaker 20 250,000.

Speaker 8 Great.

Speaker 20 Well done. Again, it all depends on crop yields and market prices.

Speaker 2 What was your specialty? Was it crops?

Speaker 20 It

Speaker 20 raised corn and soybeans, and I also raised hogs later on, started out with a cow herd.

Speaker 20 Nice.

Speaker 2 Very nice. You did a little bit of everything.
All right, now, a question we love to ask our babysitter millionaires is, did you inherit any of the 4.7 million?

Speaker 20 Yes, I did. I inherited probably about 800,000 in land from my dad when he passed away.

Speaker 24 Okay.

Speaker 12 Which was about

Speaker 20 I'm thinking about 18 years ago.

Speaker 25 Okay.

Speaker 11 But you made 4 million on your own.

Speaker 8 It's very impressive.

Speaker 20 Yeah, between me and my wife, yeah.

Speaker 11 Yes, yes.

Speaker 11 Yep, yep, as a family.

Speaker 2 Can't forget her. That's awesome.

Speaker 8 Now,

Speaker 2 was she active in the business, the farming business?

Speaker 20 She was actually a registered nurse.

Speaker 8 Oh, okay, gotcha. And

Speaker 20 put it bluntly, she probably

Speaker 20 worked to support my farming habit.

Speaker 2 That's a good lady. That's awesome.
Okay, do you have a degree?

Speaker 20 Yes, I do. I have a degree in animal science.

Speaker 2 Nice. And what was your GPA?

Speaker 20 2.004.

Speaker 2 Yeah. Hey, that's my kind of guy right there.
I'm not even sure I sniffed 2.0, Rachel, in college. Squeaked out.
It's probably in their range.

Speaker 8 Yes.

Speaker 8 Well,

Speaker 20 my college years, I had an elbow problem that went from the table to my mouth.

Speaker 20 It

Speaker 20 got into, I've always claimed that I've only been drunk once in my life. It just lasted five and a half years.

Speaker 2 You liked the beer, did you, Stephen?

Speaker 12 A little too much.

Speaker 9 Well,

Speaker 11 he enjoyed his college college.

Speaker 8 He did.

Speaker 2 And you know what? He got through 2.0,

Speaker 2 and now he's lived to tell about it. I appreciate the honesty.

Speaker 11 The honesty is good.

Speaker 2 You're a hero all across America, I'm sure. Fantastic stuff.

Speaker 3 All right.

Speaker 20 The other thing is, it did take me 17 and a half years to get that degree.

Speaker 8 That's right. Oh, really?

Speaker 20 Taking classes here and there, all over the place, and getting married and having kids.

Speaker 8 Just

Speaker 8 stuck it out. Yeah.

Speaker 2 You know, I've never heard of the 17 and a half year plan.

Speaker 2 That's really fun.

Speaker 20 Not much of a plan.

Speaker 2 No, not at all, but you've done well. Okay.
So

Speaker 2 do you drive brand new cars?

Speaker 20 No, not very often. I did buy my wife the last car I bought, I actually bought her a new one.

Speaker 8 Good. What kind of car?

Speaker 20 It's a Kia Sorrento.

Speaker 8 Oh, great.

Speaker 2 The Kia's. And did you pay cash?

Speaker 8 Yes.

Speaker 20 We've been paying cash for our vehicles for a long time.

Speaker 20 One of one of the things that we have done is

Speaker 20 my dad was very good about teaching me some different things about finance

Speaker 20 that line up with the

Speaker 20 financial peace program.

Speaker 20 One of the things that he taught me was that if you borrow money, it's easy to borrow money, but it's a bugger to pay it back.

Speaker 2 Well said.

Speaker 20 But even in spite of that,

Speaker 20 he also said, don't use your own money, use somebody else's.

Speaker 11 Well, that doesn't make sense.

Speaker 8 No, it doesn't.

Speaker 2 I was going to say, not sure that aligns with the show, but you just wanted to tell us what he said anyway, which is great. All right.
So is there any advice you would give to

Speaker 2 your 25-year-old self or 25-year-olds that are

Speaker 2 maybe drinking a little too hard in college right now?

Speaker 2 And they want to win financially. What would you tell them?

Speaker 20 Just keep working.

Speaker 20 My wife and I both.

Speaker 20 I mean, you guys always preach the best way to get out of debt and get wealth is to work hard and increase your income. Even though my wife is a registered nurse, I mean, she worked multiple jobs.

Speaker 20 She's got her own little sewing business where she designs,

Speaker 20 digitizes designs, which she actually sells over the internet all over the world.

Speaker 20 And then she sews them out for people, too.

Speaker 12 And she played organ at the church.

Speaker 20 She actually taught college

Speaker 20 to different colleges for taught nursing programs at two different colleges for a while.

Speaker 8 Wow. Well-rounded lady.

Speaker 20 Yeah, I kind of out-kicked my coverage with her.

Speaker 11 How long have you guys been married?

Speaker 20 Well,

Speaker 20 you'd have to ask her. She's listening in, but she'll tell you 51, but I say 50 good years.

Speaker 8 Okay.

Speaker 8 I feel like.

Speaker 20 There were a couple days here, a couple days there where it wasn't so good.

Speaker 20 It was usually my fault.

Speaker 2 Now, I okay, now I'm catching up. I'm going to use that one myself, Stephen, if you don't mind.
That's good.

Speaker 8 She would say, I like that.

Speaker 11 50, though, congratulations.

Speaker 8 51.

Speaker 11 That's amazing. That's amazing.
That's awesome.

Speaker 20 Yeah, give some.

Speaker 20 We were high school sweethearts, so I've been hanging around with that woman for almost 55 years, 56 years.

Speaker 8 Bless her.

Speaker 11 Okay, what marriage advice do you have, Stephen? Being married 50 years, what would you say to someone that's newlywed?

Speaker 2 Love this:

Speaker 20 maintain communication.

Speaker 24 Keep talking to each other.

Speaker 20 That's the important thing. And I mean, that's

Speaker 20 one of the biggest things in our finances, too, is that we're always talking to each other.

Speaker 20 Just constantly letting each other know where we're at, what we need,

Speaker 20 what we want.

Speaker 20 Can we do this? Can we do not do that?

Speaker 20 And be willing to be honest and sometimes say, no, we we can't do that.

Speaker 11 Yep. Yep.
And be on the same page with it.

Speaker 15 Yep.

Speaker 8 Love that. That's great, Steve.

Speaker 2 Stephen, thank you so much

Speaker 2 for sharing your Baby Steps Millionaire story. It's always fun, Rachel, to walk through the journey of these folks, you know, whether they be 41, 51, 61, 71.
Yeah. Whether they, you know.

Speaker 11 He had some goodwood liners in there, Ken. And so did you.
May I quote you, Ken?

Speaker 8 Yes.

Speaker 11 When we asked what kind of car his wife, he he bought his wife uh a kia sorenta and you said oh the kias

Speaker 2 they're a family you know i hear good things about the kias i've never owned one it literally sounds like a family i don't know why just chuckle and made kelly laugh too yeah all the kias well you know it's a relatively new car brand in the u.s i don't know much about it uh

Speaker 2 quick poll in the audience oh the toyotas thumbs up on the kias or thumbs down in the audience

Speaker 11 oh we're getting mixed reviews.

Speaker 8 Wow. No mix.
No, no. No mix.

Speaker 2 It's like 90% thumbs down.

Speaker 11 Steven, you may not have picked a great car for the wife. I don't know.

Speaker 2 I got to go get consumer reports. This will be the Hondas or the We know Hondas and Toyotas have lasted a long time.

Speaker 11 Oh, the Kias.

Speaker 2 Oh, the Kias.

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Speaker 2 Our scripture of the day is Jeremiah 9, 23. This is what the Lord says, let not the wise boast of their wisdom or the strong boast of their strength or the rich boast of their riches.

Speaker 2 Our quote today from Thomas Soule. We all enter the world knowing nothing, but by the time we're teenagers, we know it all.

Speaker 2 Sometimes it's decades later before we know enough to realize how little we know.

Speaker 11 Ooh, that's good.

Speaker 2 Boy, I'm living that right now.

Speaker 8 I agree with that.

Speaker 2 I got a 16, 17, and 20, and you'd think I was a village idiot.

Speaker 2 Like, I was surprised dad knows how to get to work and get back home. Is it raining? Is dad out there standing in the middle of the rain?

Speaker 11 Dad, come on, dad.

Speaker 11 They just think you are just stupid.

Speaker 8 Is that it? It's coming. It's coming.
I know.

Speaker 14 You got three. Because

Speaker 11 they think we are just.

Speaker 14 Right now, you're dad.

Speaker 11 I meant

Speaker 2 that you are the sun, the moon, the stars.

Speaker 8 Yes, yes. And then it turns.

Speaker 2 Middle school, it starts to turn. And then full-blown teenager,

Speaker 2 you've lost your mind. You just think.

Speaker 2 It's a miracle mom can dress herself.

Speaker 8 It's unbelievable. It's that kind of unbelievable.

Speaker 2 It's just part of it.

Speaker 11 Oh, my God.

Speaker 8 Keeps you humble.

Speaker 11 And then you realize, oh, they do know something. Right.
And then you realize in your own life, wow, I may not know as much as I thought.

Speaker 11 Maybe the world is bigger than what I was even thinking, you know? That's right.

Speaker 8 And you start thinking,

Speaker 11 oh, man. Hard so good.

Speaker 2 You can come to work every day and give advice on the radio when you feel like an idiot all the time at home.

Speaker 2 I'm in a state of confusion all the time. Anyway, it's part of it, folks.
Welcome to parenting teenagers.

Speaker 11 Whatever. Your kids love you.
We had dinner.

Speaker 2 We had lunch.

Speaker 8 Love is there. Love with.

Speaker 8 They can love an idiot.

Speaker 19 I know.

Speaker 11 We had lunch with some of our team and Ty when we're in Chicago. Yes, he like loves you, kids, right?

Speaker 2 But you know, they still think you're stupid.

Speaker 2 Gary is up next in Austin, Texas. Gary, how can we help?

Speaker 13 Hey, Ken and Rachel, thanks for taking my call.

Speaker 25 My wife and I, we've been married.

Speaker 25 We had our 20-year anniversary back in January, and we realized.

Speaker 11 Congratulations.

Speaker 25 Oh, thank you. We should be further along financially than we are.
I think we're doing okay, but we could be doing way better. And

Speaker 25 basically, my debt right now, we we have $12,000 we owe on one car and we owe $7,000 on our three teenagers orthodontic bills.

Speaker 8 Oh, yeah.

Speaker 2 Boy, I've got post-traumatic on that, dude. That's brutal.

Speaker 25 Yeah. So, but other than that, we have no other debt.

Speaker 25 I do have a beneficiary IRA that I got back in 2010 when my grandpa passed away. And it had 24,000 at the time.

Speaker 20 I've taken the minimum distribution out every year, and now it's about 70 grand.

Speaker 25 Of course, every day with the market right now, it's kind of fluctuating.

Speaker 8 Sure.

Speaker 25 But my question, and plus my teenagers, we have two cars at home, and we're looking to potentially get a third car because they want to go out and work, but it's hard because

Speaker 25 I have four kids. Well, I also have a four-year-old, by the way.
So we have, it's a crazy dynamic.

Speaker 25 But my teenagers want to go work, but it's hard because we have to shift the car around because we only have the two, and it becomes because both my boys now can drive. How old are they?

Speaker 25 We want to have a little, maybe $5,000 to $8,000 in cash to buy a car.

Speaker 25 So basically my question is, if I took out, say, $20,000 or $25,000 from that beneficiary IRA, I know I'd have tax implications, but would it be worth it to pay off my orthodontist in my car?

Speaker 25 So we have two cars owned out, right, in cash, and then we could potentially buy a third car in cash. And then that way I can move on to the baby steps from there.

Speaker 11 No, I really wouldn't. I don't think I would unplug.

Speaker 11 that IRA. I mean, I just feel like that that's invested.
I think there's

Speaker 11 a part of that that, yeah, you would pay taxes on it for sure, but there's a part of me that wonders: okay, how much money do you guys make?

Speaker 25 About, it fluctuates overtime, but somewhere around $180 a year.

Speaker 11 $180 a year.

Speaker 8 Okay.

Speaker 11 Yeah, why don't we live on $90

Speaker 11 and do all of this?

Speaker 8 Yeah, I mean, if I'm live on $90,000 for a year.

Speaker 2 $7,000 in dental, $12,000 in a car. Yes?

Speaker 2 Correct. That's it.
That's the only debt.

Speaker 25 Yes.

Speaker 2 And whose car is the $12,000 on?

Speaker 25 It's my life. Well,

Speaker 25 both cars are ours, both. Our teenagers primarily use the one car in my life when I use the other.
I have a work vehicle that I can take that I use most of my days for work, but I can't use it.

Speaker 8 It's when I'm out of here.

Speaker 11 Yeah, Gary, just cash flow this. I mean, part of the baby steps is a level of changing sacrifice.
You know, if you cash out this IRA, nothing in your life has to change.

Speaker 11 You're just plugging in money and fixing your problems, and you're unplugging something that actually is going to be able to go up in value so quickly

Speaker 11 over time.

Speaker 11 And because how much is in the IRA?

Speaker 25 That particular one is $70,000.

Speaker 11 $70,000.

Speaker 8 Yeah, I don't think I would do it.

Speaker 11 I would lower lifestyle, Gary. I would live, I would have you guys be on a really, really tight budget for one year and get all this knocked out.

Speaker 25 So we've been doing the

Speaker 25 Every Dollar app since our anniversary last January, and we have been making progress at it.

Speaker 25 I guess my thoughts are I really want to get to be because I'm 43 years old, and I do have two Roth IR two Roth RAs now, but they're just not as much.

Speaker 25 I started when I was 18, and I'm just disappointed that it's only worth mine's only worth $100,000, and my wife's is like $60,000.

Speaker 25 My gosh, I thought by this point in my life, I'd have more because I haven't been able to contribute as much, or I should say, I haven't contributed as much.

Speaker 25 So basically, my thought is if I just took this out, deal with the tax, and then I could start really hitting that 15%

Speaker 25 amount toward my retirement and kind of loading it earlier.

Speaker 8 I understand your reasoning.

Speaker 2 I understand your reasoning, but I'm with Rachel on this, and I would tell you to channel the thought, the emotion you just gave us, which is, gosh, I only have 160 and I wish I had more.

Speaker 2 And you don't want to touch that because

Speaker 2 that's working for you. And so I would take that angst, that frustration, and I'd figure out how to make more money.
I'd figure out how to sell some stuff.

Speaker 2 I'd figure out a way for the two high schoolers to get to their jobs in other ways or whatever, whatever, whatever.

Speaker 2 And I would knock these debts out. $19,000 on your income

Speaker 2 is very, very doable. You know, we're talking about, and you don't have to answer this on the air, but this is the homework assignment.
What would need to change or what would you all need to do?

Speaker 2 I'm talking about you and your wife collectively as a team. What do you need to do to be able to put $2,000 a month towards the $19,000?

Speaker 2 And I just think if you frame it that way, you might be surprised about how doable that is. And now we're doing this in less than a year.

Speaker 2 Okay. And now you're building the emergency funds.

Speaker 11 Do you guys have savings at all anywhere else?

Speaker 13 A little. I mean, I save, we have a school account.

Speaker 25 Our kids

Speaker 25 have been homeschooled. And so we have, it's actually more expensive than, it's not crazy expensive, but it's, you know, $3,000 a semester, probably we pay for them.
So we have money for that.

Speaker 25 That's really allocated for that.

Speaker 11 Sure, sure. But anything else in savings?

Speaker 25 Just $1,000. We recently brought it down to $1,000 to help pay down the car.

Speaker 8 Okay, gotcha.

Speaker 11 Gotcha.

Speaker 2 Here's the crazy thing.

Speaker 8 Real quick, let's just run through this super fast.

Speaker 2 The $12,000 car, what's it worth if you were to sell it private sale?

Speaker 25 Probably mid-20s.

Speaker 8 All right. The high 20s.

Speaker 2 Since we're being uncomfortable, and we're telling you to be uncomfortable, Rachel's right, let me tell you what I would do. Now, I'm extreme on this, Rachel.

Speaker 2 You tell me if you think this is too extreme on this one, but I'd sell the car and knock that debt out.

Speaker 2 What's that monthly payment?

Speaker 25 The minimum is like just under $400.

Speaker 2 All right, so we just, so here's what happens. If it's worth $22, and you owe $12,000, if I'm doing the math right, you're going to have somewhere in the $8,000 to $10,000 range off the sale of that.

Speaker 2 You go get an $8,000 to $10,000 car, and it is what it is. We're in a season right now of rebuilding and you're jump-starting the rest of your life.
So we're going to make a sacrifice.

Speaker 2 What we just did there is we paid for the car, the secondary, we're paying for another car cash, and we just freed up $400 a month.

Speaker 2 That's what I would do. Is that too extreme?

Speaker 8 No, not necessarily.

Speaker 2 Because I know there's only 12 left, and I know that's why, but you know.

Speaker 11 Yeah, I mean, you could, you guys can make some moves, Gary, to Kent's point to get this cleaned up. I mean, you really could.

Speaker 2 Now you only got seven grand left.

Speaker 11 Yeah.

Speaker 2 And $400 extra to put towards that.

Speaker 2 I mean, if I wanted to get it out of the way quickly, that's what I would do and not take the easy button and pay taxes. And I don't want to mess with my investments right now at 43 years of age.

Speaker 2 I don't want to touch that. I need that to be growing.

Speaker 11 Well, my other thing is, I'm like, it's $180,000 income. You know, I'm like, I think you guys could really do this in a year.
I really do.

Speaker 11 So I think there's something about the discipline, which you guys have. You started.
You know, the thousand dollars and you're throwing the rest of the debt. It's amazing.

Speaker 11 But I just don't think

Speaker 11 I wouldn't touch IRAs. I really wouldn't.

Speaker 2 Yeah, I agree with you. All right, folks, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.