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Normal is broke and common sense is weird, so we're here to help you transform your life.
From the Ramsey Network and the Fear Ones Credit Union Studio, this is the Ramsey Show.
I'm Jade Warsh on Next To Me Rachel Cruz taking calls about your life and your money
for the next couple hours.
So if you want to, you can get involved by Contrable 8255-225 in the meantime.
Go to the phone lines where we have Alisa who's in Cincinnati, Ohio.
Hey Alisa.
Hi, thank you all so much for taking my questions.
So we have been serves papers on an old set that we now are having to either go to court
and fight it or settle.
And so we don't have the money for a lawyer, so we've been using chat AI to kind of guide
us through.
And so far it's worked like, you know, if we've been able to prolong it a little bit.
So, but now, you know, I need guidance, I need real guidance on what to do and where to
go.
How long ago was this?
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm just nervous and then it's just very
emotional.
Yeah, stressful, stress, stress, yeah, yeah, okay.
So the deaths from 2007 or we took the loan out in 2017 and then like around 2019, it's
a so-fi loan.
It gave us 50 grand, it was great, we reconfulled it dead, it didn't work.
And so around 2019, I had a baby and then right around the corner of 2020, all of a sudden
I was home and had to quit my job and it was just my husband.
And we, we were kind of like, we missed a couple of payments and but we would catch up
and then right around the corner of 2020, like they just sold it off like it didn't matter.
Yeah.
And so we've been fighting it ever since.
They served us papers December 16th, I think hoping, like we only had 20 days to respond
and I think they were hoping that with the holidays, we wouldn't be able to find a lawyer
and we wouldn't know what to do, we just wouldn't respond.
But we did, we got it together, we put it in chat, chat gave us some information, we
sent it, they sent us back discovery, most of it redacted.
And so our next, like we were going to send another request for more discovery, but instead
we just sent them a pro say, if they would settle and say, what company owns the debt
right now?
Do you know the name of it?
Yeah, LVNV.
And what's the LVNV?
Yeah.
Okay, so Lisa, I need you to just understand who you're dealing with because I do think
that always helps the stress level, okay?
And bad debts, whether it's loans, credit cards are sold.
They sell them to a company, the company repackages them with other loans, sells it to another
company and it's been probably passed around, okay?
So you're dealing with someone who's sitting in a cubicle who's been on the job for probably
three weeks and will probably end up leaving in two months because the turnover rates
with collectors is constant, it's constant, okay?
So it feels scary and it's a big number, right?
So we're going to have to address it, but I do want to take some of the stress off of
who it is.
It's someone who honestly has probably the worst job on the planet who is calling and serving
people old debt.
And again, the intimidation factor is so big, but the reality of it's not Lisa.
So we have to deal with it.
So I'm not minimizing the situation, but I do want you to just realize the person you're
talking to or who even wrote the letter to serve, it's probably not even going to be there
in 60 days.
It's going to go on to someone else.
And then the company, envy, or whatever, Ellen, envy, okay, okay, there you go, yeah.
You know what Lisa, I used to back in the day when the credit card companies used to call
me and debt collectors used to call me, I used to just imagine that they probably had
more debt than I did, otherwise they wouldn't be working there and it made me feel a lot
better.
It made the whole thing a lot less intimidating.
Have you offered, so you have no money right now, have you offered to do any sort of payment
plan?
So in the past, like the past couple of years, we did a payment plan for, like they'll
do one for like 12 months and then after that amount of time, they'll hit you back up
and they want the whole amount.
Sure.
That's what's going on with your money now, that over the course since 2017 and even
2020 on, where we haven't been able to kind of stack together any money to make any sort
of deal on this or keep the payment plans going.
Tell us what's going on now.
So now we're doing better, like our income is getting up there in 2020, it just wasn't
there.
What is it today?
What's your income today?
504.
Okay.
And is this the only debt that you have or do you have other debts?
Okay, tell us really quickly about the other debts, so we can understand how this fits
in.
So we have 58,000 of like other debt and cars.
Tell me the, tell me the cars, what do they each total?
One is 11, and one is 15, and then the other debt is, I think there's two loans, like
small loans and then card cards.
Okay.
And we've been paying it down, like it was much worse than that.
So there is a light at the end of this tunnel, like 58,000 sounds really, really bad and
it is, and then we have a mortgage, and our mortgage is 175,000, but our house is worth
like 450.
Yeah.
So I just, with the numbers you're telling me, I don't see a world where you're not setting
up a payment plan, and in the meantime, stacking up a bunch of cash to settle.
I think, I think a lot of your trauma and shame about this lives in the past, because it
sounds like today, you have the ability to start getting this cleaned up, unless you
tell me a reason that you don't see that hope.
Oh, I do.
Yeah.
Okay, good.
I mean, do you think that we should settle?
Yes.
Yeah, you just have to have the amount of money to settle, and depending on how, I mean,
how long it's been and how long, you know, considering this was a, you stopped really
paying in 2020.
It's been six years.
So they're probably not expecting to really get paid, Lisa.
I mean, at the end of the day, they're probably, you know, they probably assume you guys
are broke.
So if you could, yeah, that's what I was going to say.
If you could get maybe 15,000, and that means you guys are going to have to limit your
life.
Like you guys are going to have to be working extra.
You're going to limit lifestyle.
You're going to do whatever you can, and you're going to get $15,000 as soon as possible.
And if you can hold them off till then, and then see if they will settle, if you can
somewhat get maybe back on a payment plan and then have an amount of money and say, um,
this is what we have.
What are your cars worth, the one that's 15,000, if you were to sell it, what could you
get for it?
Um, maybe 20 or 22.
You know what I do.
So one of these cars and be done with this today, hypothetically, I'd sell one of these
cars.
If you can get 24 it and you only owe 15, um, could get a $5,000 car, I get a $5,000
settle.
Uh-huh.
Is it paid off or I'm sorry.
Yeah.
I would do that.
I would clear that out, get more money per month, then I can add that up, and then I
can settle this debt very quickly.
That's what I would do.
It's going to be a major sacrifice.
But the way you cried when you came on the line, this has been going on for too long
enough, like far, far too long.
And I would be going to great extents to make this better in the next, I'd give myself
30 days to make this happen.
And if that means selling cars and driving junkers, then that's what I'm going to do.
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Alright, let's go back to the phone lines where we have Marie, who's in Phoenix, Arizona.
Hi Marie.
Hello.
What's up?
I have a little bit of an issue that I need a solution to.
I was scared about 10 years ago when I was on my mini-my-house, like all my jewelry.
Holy smokes.
Oh my gosh.
Right.
It was, it was considerable.
And as long as they're working, it's 70 more and fits.
When I came close to my daughter, we've decided on a plan and we opened a joint chicken
account and she has taken all the money, my pay, my social security, every month, and
gives me an allowance for food, gas, and medication, etc.
When I just did, she tried to send many and it kind of caught repairs, insurance, she
doesn't extra transfer.
We arranged to save almost $200,000 during that time, which is remarkable.
Oh my gosh.
How much of that?
How much of that?
How much of that?
It's all mine, but it's all in her name.
I don't have access to it.
Okay, yeah.
She did.
She sends me screenshots.
It's all still there.
Good for you, Marie.
Well done.
But I want this arrangement to stop, I've asked for several times, and she's just not inclined
to do so.
She still doesn't trust me, understandable, but I would like to have a mine.
It's not really available to me when I want it.
Okay.
And I don't know.
One time, I contacted an agency for older abuse in my area, and they told me to take
a name off the account, where I didn't do that.
I opened another account and I had no money to go there.
She found out, she came, she was not very happy because we account and transfer it back
to the joint account.
What is her, when that happens, what is she telling you?
Because there was a reason that this arrangement was made, what is it that she's afraid that
you're going to do?
She's afraid that I'm going to get pulled back into that scenario, and she does what
wants me to be penniless again, and I can understand it.
The scenario where you were scammed?
Yes.
Are there things, Marie, that you want to do with your money right now that she's saying
no to?
Well, I'm in my room at the end of last March, and I wanted to buy a condor or a town
house, and she wasn't on board with that.
She said, the only, well, that would happen if the property was going to be put in her
name, which I didn't have a problem with that, but it ended up, I had to move to the middle
place, and I have the lease now within the apartment.
So I had a line to ask to be able to use my money, or should I just pick it up and continue
with our arrangement.
You're not out of line to ask to use your money.
There's another side to this that I want to know more about.
Is she keeping you from, and here, I'm just going to based on what you said.
It sounds like something was so drastic that she was brought in to help you, and she's
probably looking at this, and I'm not saying that she's right, I'm just trying to get
both sides.
She might be looking at this going, you know, the best predictor of the future is the
past, unless something has changed, right?
So she might be looking at this going, I don't see why I would expect anything different
if I let her have access over to this money again.
So you might have to explain to her, here's why this is different.
Here's why this is not like it was before, because you said she's afraid I'll fall back
into my own old ways that got me scammed again.
So if you know that, my thought would be I need to help her understand why this is not
like that anymore.
And if you feel like, if you genuinely feel like maybe you've changed her, it's different,
then have that conversation.
And then if not, then I'd be talking with, I might have to bring a lawyer into it and
say, hey, this person is not moving away.
Yeah, it's hard.
There's such a fine line, Marie, of loving, you know, someone in your family by helping
the financially like this and then controlling them.
And so I don't know from her sake if she was on the other line that we talked to her
after, you know, doing the story she would give us, because my hope would be that it's
out of love and care for you, Marie, that she says, were you good with money besides
this scam that happened 10 years ago, when you were raising her, how was money?
And I was born and raised in Germany, my husband was in the area, he's passed, and we
were always ready for the leave.
Okay.
Okay.
So really, was it just this one scam that caused all of this?
Yeah, but it was massive.
It was like $600,000.
How did it happen?
Well, I met this guy on Facebook, he pretended to be someone he was not, and it took almost
three years, you know, that it happens more than, yeah, it was very, very, very bad.
Yeah.
I'm so sorry.
I'm glad she got that job made to protect me.
Yeah.
And that was 10 years ago, Marie, 2016-ish, yes, it happened, it started in 2015.
So what I would do to probably keep the relationship good with your daughter, and again, I'm going
to assume good in this call that she's doing this out of love and protection for you, is
I would sit down with her and I would have a road map to say, hey, this is what I desire.
At the end of this road, I want full access to my money.
I want to be able to purchase a condo because rent keeps going up and up and up, and I want
to be able to have a place to live.
That's modest, but that I own, and whatever that looks like for you, Marie, what the end
of it looks like.
And then, and then I would bring her in and just say, hey, what steps need to be taken
for you to rebuild trust?
Because it sounds like you guys have just been functioning in this and she may, she may
have decided already, I'm just going to do this to my, to forever, for the rest of my
mom's life.
I made that assumption.
Yeah.
So, so we want to break that for you and to, and some milestones, have a couple of milestones
and in the next 12 months, what are things that you can be doing that would give her
the confidence?
Because that feels reasonable to me.
And again, I'm assuming, Marie, this isn't, I'm saying all this, putting you in a good
light that you're being responsible for, that you're not off to the side.
You know what I mean?
Uh, so.
I don't, I don't even have access to online banking.
She, she sent me screenshots and I, I keep it over here.
Yeah.
So there's a point after 10 years that there's not, if there hasn't been other mistakes
or other patterns.
You should be.
You should be.
And for her sake too, that she's, she doesn't have to babysit you or, you know, rolls reverse
that she's your mom, right?
For a season, I think that's really good.
But over time, you probably do want this deal to, to dissolve.
But I would again, try to do it with her and like, what's the roadmap to get there?
And, and then I hate to say, but if she's, but if she's unwilling to do any of that, I
would be curious than her motivation at the end.
That's my question.
And I'd want to make sure that everything's above forward.
Yes.
On both sides.
So then how do we rebuild the trust?
That's the question.
How do we build the trust and how do you do it in a way that can still preserve the relationship?
Because if it really is, there's, like I said, there's probably more to the story on
her and more to the story on your in-mory.
But there probably is reason for both of you to feel the way that you feel.
Yes.
And so I like your idea of making that roadmap because I think in the end, that's going
to be.
And if the eight months or 12 months happens, then you got to start pushing, pushing more.
And maybe there's a transition even for the adult daughter to say, hey, the next step
would be that she does have access to her money, but your name's still on the account.
So you can first see it, see what she can actually log in to her own account, right?
And it's like, that's fair.
That's very fair.
So like, what are small steps that we can take to create more independence on Marie's
side?
Versus just having this hard black and white wall of like, either you do it or I do it.
Yeah.
Yeah.
It could be a both-and for a season two, you know?
Yeah.
But yeah, that's, that's hard.
And I, and I feel like Marie, to your daughter's credit, like we get the calls, we get your
daughter calling in and saying, my mom has been scammed.
How does 600,000?
Yes.
What do I do?
How do I step in?
Because she feels gullible.
She feels really vulnerable.
I feel like she could fall into one of these again.
And we probably would get it for that advice.
Sit down with your mom and say, mom, I want to be able to help you.
Yes.
And probably what the daughter is thinking is, oh my gosh, if something like this happens
again, I'll have to take care of you and I don't have the money to do that.
So all of this is really being done out of just of a abundance of caution for the future
is what it sounds like.
Yes.
That's what I would hope.
I'm going to assume the best here.
I assume everything's on the up and up.
Sorry, that's happening, but thanks so much for the call.
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All right, we have Sydney who's an Omaha, Nebraska, hey, Sydney, you're on the line.
Hey, guys, it's my question today and I know you've taken this call a million times.
But how do I persuade, that's not really the right word, but how do I inform my husband
that we no longer need the whole life insurance policy that his parents took out from him
as a child?
Oh, okay.
You don't need it because you think you should do term life or you don't need it because
you guys are self-insured, just somewhere you are financially.
We each have term life policies on one another.
Oh, okay.
You'll have term life.
Yeah.
We're good to go.
What's his reason for keeping the whole life?
So we have to talk about that recently.
It just gives him like a piece of mind.
He will be 32 in April and that's benefit on this thing is like 17,000.
Is he heading into it?
No.
It's just like growing or just sitting.
I don't really know.
I've been growing since he was a kid and there's only 17,000 dollars in it.
Yes.
If it's not costing you anything, what does it matter?
If it's just sitting there growing?
Yeah.
You know, that's a fabulous question.
One that I have asked myself.
I do know when he was a kid, his dad is in pharmaceuticals and I was a handful of times
where he would be out of work and things and they were unmedicated and so I think it's
just like that extra layer of security, whereas I'm like, we could take the cash value which
isn't a ton.
It's like three or four thousand dollars here's and yeah, use that for what?
Yes.
Well, so I'm ultimately paying off that it's I'm trying to win the war here rather than
the battle.
But you do have to pay off.
We do.
Yes, ma'am.
Okay.
That's that's more what I was getting at.
Is it just like a why do we need this?
Or could you really use the cash?
Well, here's what's frustrating Sydney.
This is how bad of an investment whole life is.
Okay.
So let's just pretend that they opened it up when he was a baby.
He's 32 now.
Okay.
32 years it's grown to 17 thousand dollars.
If you put 17 thousand dollars into the market right now in 30 years instead of it just
becoming another 70 thousand, you would have 1.1 million dollars.
So that's how crappy of an investment, like it's not even an investment, like it's
not, it's horrible, horrible.
So my motivation would be like let's actually put our money in something that's working
that will actually work for us and not grow at a snail's pace and if something really
were to happen to him, they're going to keep a lot of it.
You know what I mean?
You don't even get the full death benefit always.
So it is, oh, it's such a bad, it's such a bad product.
So from just the common sense perspective, I'd be like wouldn't you want to move 17 thousand
over to an illegitimate investment?
Absolutely.
You know what I mean?
Not that you can because you're going to have to surrender the policies so you won't
get that.
But for me, I'm like I just want to have things in my life financially that make sense,
like this isn't even make sense.
So not only could you use the cash to start paying off debt, but also let's be smart
with where we're putting our money and keeping quote unquote 17 thousand dollars in a whole
life policy that's not growing, basically, is not wise.
Well, what's the debt you're trying to pay off?
Yeah, so a little bit of everything, so like it's I'm trying to win the war rather than
the battle.
So my husband, he would sleep better at night if we had a month's worth of expenses saved
at all times.
Is it because you're your regular income?
No, no, it's just like what if the furnace goes out kind of a thing?
Okay.
And for this, getting rid of this whole life policy would allow us to easily share up the
savings account and then immediately go towards paying extra towards our debt.
How much do I have savings right now?
In savings, we've got 4,400, okay, and so go ahead, well, I was going to ask what's
a month's worth of expenses for him, six, six, okay.
So you, in your mind, you're thinking, okay, if I cause him to get rid of this policy,
which he doesn't, which he doesn't want to get rid of, but if I take that money and give
him what he wants, which is a month's worth of expenses, that's better than nothing at all.
That's you winning the war.
Yeah.
Okay.
Well, I think the war would be him getting on track with the baby.
Right, right, right, right.
And I get free.
I understand.
I understand.
Okay.
Yeah.
And after that, he's like, now we can go buck wild and pay off this debt.
Is that what he's agreed to?
More or less.
Yeah.
What's the less?
Um, just like we're not obviously following the baby steps to a T, you know, that would
be only having $1,000 in our savings account.
Right.
But is there another, is there another part that he's already said I'm not going to
do that or was that really, because if you're telling me, this is the only thing he asked
of me, Jade, he just, this will make him feel better and then everything else we're
off to the races.
I probably wouldn't argue much.
I'd be like, Hey, do it.
And then maybe over time policy, but we're going to start moving.
Yeah.
And if you told me that'd be like, great.
But if you tell me, Hey, actually, it's probably going to be, this was just one of many battles
and I'm just trying to get over this hump.
Then I'd say we have more conversations to have.
I love that you're trying to make progress.
I'd probably go ahead and do, I'd probably make that deal.
I'd be like, yes, if we, if we cancel this whole, I'd policy and you want the one
month there.
I'm not going to fight that battle today as long as we can go hard on this step going
forward.
That might be just the peace offering you need to make in order to get this thing going.
Yeah.
How much debt do you guys have, Sydney, to pay off?
About 180.
The bulk of that, my husband went to law school, so we've got about 110 there.
We've got about 15 on a car and then just shy of 14 on private loans that he took to
take the bar and then my student loans are 37.
Okay.
How long ago, Sydney, did you start listening to the show and wanting to work a new financial
plan, the baby steps?
Yeah.
Hi.
Last May, I had heard of Dave in the personal finance class I took in high school and then
a good friend of mine, her husband followed the baby steps, which is mind boggling because
if they are Catholic missionaries, I'm like, how did you do all of this and essentially
they just follow it?
It was the baby steps that helped it.
Yeah.
Yeah.
Okay.
How old are you guys?
I am.
How old am I?
I am.
I'll be 30 this year and my husband will be 32.
Okay.
Great.
Can I ask another quick question?
I'm just trying to get a sense of him.
If you said to him tomorrow, hey, let's pretend you did the thing with the whole life policy
and put them on the side and then you said to him, hey, I've really been looking at
our car.
I think that because I looked and found that if we sell it, we can make $5,000 and not
have the payment anymore and then we can take that $5,000 and buy a junker car, right?
Another aspect of the baby steps.
If you told him that, what would he say?
So we've had that conversation before and he's like, absolutely not.
Okay.
So Sydney, I hate to say it and we don't have a lot of time.
So I just feel like I got to like just say it to you.
I think you guys have way of a bigger issue happening of being on the same page financially
than a whole life insurance policy.
And I wish that was just it.
But as we start peeling back on this, you guys aren't on the same page.
And it's, I don't want to say it's impossible.
It's just, it'll take a long time for you to be the one Sydney that pulls him through
this process and that to make progress.
And so you guys need to sit down tonight and you need to tell him Sydney how you're feeling
and what's going on inside of you because it's not just a whole life policy that that
would feel good if we, if he just cashed that out, that's great.
There's more to it.
You're, you have $180,000 in debt.
Like that's terrifying.
Is that scary?
Oh yeah.
Yes.
Okay.
So talk about that.
Sydney, talk about what you're feeling, the, the sleep that you're not able to get because
you're stressed, you're scared of something happens to you.
Do you guys have kids?
We do.
She's almost two.
Okay.
Yes.
And, and so I'm like, the, the weight of this whole issue of just your entire financial
picture is weighing on you and you're trying, which I applaud you to make a little progress
here and there, but it's not going to do much to me.
It really won't unless you guys sit down together and say, hey, we are in a marriage and
we've committed our lives to be a team together.
And we're going to tackle every, every area of life together.
In law issues, parenting issues, and our money issues, and we're going to be a team.
The money is the problem, the debt out there is the problem.
You're not the problem, looking at him in Sydney, you're not the problem.
How do we tackle this together?
And you're really not going to make a ton of progress, progress, Sydney, until that happens.
And I would push and fight for that for you to be heard and in what you're wanting
because it does not sound like he's going to do much in this process.
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Well, really a couple of things.
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All right, Caleb from Indianapolis, Indiana is on the line.
Hey, Caleb.
Hi there.
Me and my wife are on baby step four, debt free, and are looking at buying a house, and
we're having a disagreement about how much we should have as a down payment.
Oh, well, congratulations for getting so far well done on paying off debt and get ready
by a house.
That's exciting.
What are you looking to spend?
Thank you.
So we have about 90 grand sitting in a mutual fund, and a good starter house in the area
is around 150 grand.
What she wants to do is to spend 50 grand, no, she wants to leave 50 grand in the mutual
fund, and probably would have 30 grand as a down payment and 10 grand for closing costs.
I want to use the full amount so we can have an 80 grand down payment.
Okay.
If we do it her way, we're following your guy's rule, the payments would be around 25%
of our combined income on a fixed 15 year fixed.
What's the reason?
Okay.
The reason I'm willing to do the full 80 grand is so that in the future, we at least have
the opportunity to live off a single income, and I feel like that would make it easier
for a baby set of six.
Okay.
I see what you're saying.
So you're wanting to put 80, she's wanting to put a total of 50, did I understand that?
She wants to leave 50 and so be 30 grand as a down payment and 10 grand for closing costs
and fees and all of that.
So me looking at this right quickly, your way, the payments around 972, her way, it's
around 1400, I believe so, yeah.
Okay.
And your thought is we can go to a one income household later on if we so choose or at least
to have the opportunity of that.
We don't have any kids yet, but we're wanting to start trying within the next couple of
years.
Um, Caleb, what is she wanting to do with the 50 grand and the mutual funds?
She wants to leave it.
What is that for for her?
She just want to leave it.
She views the mutual fund as more of an investment.
I feel like it would grow more there than it would in the house.
She's very frugal and a large purchase is just uncomfortable for her.
Mm-hmm.
There's like an extra safety net for her in a way to have that, to have that available.
Okay.
I actually, I'm with you, Caleb, I think that that I would rather do that.
I think there's more security.
Once you have a home, it becomes the number one thing that you want to protect if you
ever hit hard times.
And so I kind of like the idea of saying, hey, if we do this, our mortgage will be so
low that even if only one of us were working, it would be okay.
And that feels way more secure in my mind than having some money floating on the outside.
Yeah.
Just floating.
How much do you guys make at your Caleb?
Combined around 80 grand.
I just got a promotion.
Okay.
Great.
How old are you?
I'm 26 and she's 22.
Oh, wow.
You guys are young.
You're young.
Okay.
I always hate giving like a gray answer because I know people want like a black and white, like
yeah.
I said she would do your way.
You're a Caleb.
I would probably say, I would lean your way to Caleb.
Like if someone, we just got this question on money marriage, they were gifted a big inheritance
and they were like, should we just throw it all at the house or should we use them for
investing?
We're like, yeah, just attack the house because you have all the time in the world to invest.
Yes.
You know, every single year you guys can open up a Roth.
You can fund your Roth with work, you know, while you're working and you will, you will
be fine at retirement.
So my caveats, my caveats are, you sound very buttoned up Caleb.
You sound like you love running your excel sheet and your numbers.
And sometimes when we're so in the numbers and so in a formula, we forget about life.
And I'm just curious if she sees like we're going to have to replace a car soon.
Like we're going to have to do a couple of big purchases and having the cash available
to help us do those things smoothly would be wise, right?
Like I don't know if that's the case.
But if that's something that's in her head, that's good to know.
Either way, either option you guys are going to be fine, Caleb, I really do believe that.
I think that you guys, you could follow the, yep, the 5% 20% down and be fine.
You could throw way more at close to 50% of it and be fine.
But at the end of the day, I would probably choose team Caleb just because I like having
a lower payment and you guys just have so much time on your side to save an invest.
And that and it does free up for, you know, 450 a month to save 500 bucks way more quickly.
So that if there was something like a vehicle or all of those things that it would be nice
to have a chunk of cash for, you could do it.
Yep.
That's right.
That's right.
Or maybe you'll meet in the middle too.
Caleb, you know, leave, I don't know, 25 in or something.
I don't know.
Yeah.
And then just for her to have a little bit of that security she wants.
So yeah, y'all can meet in the middle and be great.
But either side, I think you'll be fine.
I mean, you guys are so young and you're so on target that I'm like, thank you guys.
For sure.
You're going to be fine.
So final ruling, there's no wrong answer.
But if we, if we were forced to decide, we go, we go lower, the lower payment, they're
for higher down payment.
Yep.
Yep.
That's it.
All right.
I love it.
Thanks for the final answer.
Final answer.
Guys, Katie, who's in Billings, Montana, hey, Katie, how are you?
I am good.
How are you?
Excellent.
How can we help today?
Great.
So I am so confused when it comes to the world of investing.
My husband and I were not in debt, thankfully.
And we have been able to see about $500,000 in the bank.
Wow.
Well done.
I contribute, I contribute $500 monthly into a Roth.
My husband does not have one.
And the investing, I guess, the good thing that we do is just in feedies in the bank
at $3.75, we have about $200,000 in that.
But other than that, that's it because it feels safer to me and I, is that foolish?
Well, let me make sure I understood this right.
I thought you said you had $500,000 in the bank, but then you said $200,000 in CDs.
So some of it's just sitting freely in some of it's in the CDs or is that in addition
to?
Some of it's just in savings accounts.
Got it.
Okay.
Wow.
Why are you guys averse to investing?
What happened that made you feel squeamish?
I guess nothing happened.
It just, it's foreign to us.
Yeah.
And what you don't know can be scary.
And when it, exactly, and when it comes to retirement, like I said, I do.
I do put $500, $500 a month from my paycheck into a lot of account for myself, but you don't
see that money until I'm close to 60 years old.
Then I, a CD seems a little bit safer because it's just a month, 12 months return.
Yeah.
I'm kidding.
How old are you guys?
I'm 31.
And my husband's 37.
Okay.
So just to do a little calculation for you, oh my gosh, are you ready for this?
This is going to probably make you sick.
Ready for it.
Okay.
But really quickly in, if I, if you just dropped $500,000 in the market, right, this, and,
and, and average, I put 12% rate of returns.
I'm going to get mad at that.
I'm going to just do it for fun because it was way more than that.
Yeah.
There's some down the ears, but the past couple of years have been fantastic.
So I'm going to put 12% average.
It's actually been more than that, but I'm going to just leave that.
And if you did that right now at 31, by the time you're 67, if you just set, just let
this money grow, you would have $36 million, right?
Wow.
Wow.
So if you kept it in the, now if you kept it in the CD, which is averaging 1.7% interest
right now, I'm going to bump it up to two because I'm feeling gracious to the CDs.
You'd have, you'd have one million.
You'd have one million.
Sure.
Sure.
So, you're leaving $35 million on the table, Katie.
So what we have to realize is we need to understand this intimidating part of the CD.
We have money, which is investing.
And I get that.
There's a lot of people who use diversification, index funds, S&P 500, you know, you're like,
what is, what is all, like, what does this all mean?
So I would, because you guys have done so well.
I mean, it's crazy.
It's, yeah, crazy that you've saved this much.
I mean, this is, it's amazing.
You guys are incredible at 31 years old.
I would sit down with a smart investor pro in your area when we get off the phone,
Cristian will pick up and he can kind of direct you on the website where to go.
But you could, but I wouldn't meet Katie.
Meet with two or three smart investor pros in your area, okay?
And I want you to get number one a feeling from them because these are, and these have
all been vetted.
So these are great people, but you're going to naturally connect and feel more comfortable
probably with one or two over another, right?
And that's really important this process because anyone that's going to help you kind
of push the buttons and investing, you want to feel really, really good about.
And I would ask every question that you can think of, don't feel like, oh my gosh, I
feel stupid asking this.
I should know none of that.
And it actually starts to get the basics and learn what does this mean?
What does it look like if I invest in an index fund or a mutual fund, what types of
funds are out there?
I mean, there's so much you could be doing with this money to make you money.
It may kind of feel risky, but at the same time, compared to what you would make on the
other end.
Absolutely.
I think it's worth the risk that's not really even there.
The ups and downs are real, but the overall picture is pretty bright.
So that's what I would do, Katie.
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Welcome back to the Ramsey show in the Fair Winds Credit Union studio.
It's still me, Jay Warsaw, with Rachel Cruz going straight to the phone lines where we
got Jeff and Atlantic City, New Jersey.
Hi, Jeff.
Hey, Rachel, Jay, how are you?
I'm honored to be on the show.
Awesome.
We're glad to have you.
I discovered the Ramsey show about six months ago, and I've been following a lot of the
principal and got a question for you.
OK.
So I'm 37 next month, my wife is 31, and we have been putting away money investing every
time and investing in future growth for ourselves for a little bit later on.
So we, in our community, the children live next to the parents, relatively close next
to the parents, and we have bought three residential, single-family residential homes for our
children to be able to live next to us.
We got three girls.
Yeah, we bought three homes for us.
We want that we want our girls to live next to us.
So we bought the three residential homes so they can live relatively walking distance
to us.
OK.
How old are the girls?
Eight, six, and four.
Wow.
You guys started early with the purchases, I mean.
Yeah.
Yeah, yeah, yeah.
We definitely wanted to start early, and we got great interest rates.
We bought it when the COVID rates were around, and the two's, and then the three's.
OK.
So right now, we got ten of the year that covered the, with the COVID rent until, you
know, it's time to give it to them where we feel the time is right.
And my question goes like this.
My wife and I have had some hard discussions about these homes, and we've came to the conclusion
that most likely the kids will not want to live because the area is changing, and most
likely, the kids will not live next to us.
Sure.
Yeah.
So what happens is we find ourselves in an interesting position.
Right now, we have ten of the covered the mortgage, and we have a little bit of extra every
month, like twenty to one hundred dollars extra from the three homes every month.
And we've been doubting ourselves as this is the right path going forward because we are
thinking to cash out these three homes, sell them cash out 1.65 million dollars from,
you know, basically what the down payment we put in, what you get out of equity, out
of the three.
The equity is 1.65, take us 1.65 minus the taxes, and we would have to pay on that, which
is about, let's say, we'll end up with like one three or something like that.
OK.
Yeah.
And put the one three into an S&P marriage fund where, let's say, twenty years down the
line.
That grows to a huge number.
Yes.
And then if they want to live an XYZ area, OK, here's a million out of go buy the house.
Genius.
Genius move.
No.
So my question is, is that the right move or should it just let the house keep on being paid
off by ten and what do you guys own your, do you guys own your house, Jeff, you and your
wife or do you sell them over on it?
No, we actually have a two person rate.
Yeah.
We own our house straight up.
We actually have like one point three equity in our own home.
OK.
And you don't owe anything on it.
No, we do.
It's worth about, what do you owe on it currently today?
Three, six, eight, but it's worth one point three.
No, no, it's worth about one point eight.
That's great.
Oh, it smokes.
Way to go.
Maybe one nine even.
You know what I would do?
If you're offloading the three houses for the kids, I'd take a little of that money.
If you said the whole thing, you'll walk away with one point three.
I'd probably take some of that and I'd pay off your house and full and then I'd invest
the other million and you will be, and then invest your mortgage payment back into this
fund for the girls.
Uh-huh.
Even though, now I've been listening to Randy, I know you've got to say you pay off that
motion no matter what.
So my question is, I got a two percent rate with 15 years exactly to go.
Even though it's two percent, pay that off.
Yes, because you're the guy who would take the full mortgage payment that you were paying
and you'll invest it in that.
You'll invest it.
I can tell that you would do it.
It would rather make 12 percent than 2 percent.
Yeah.
Right, right.
I hear that.
Yeah.
And Jeff, too.
Well, my question is, would you sell the three homes?
That's my question.
Yes, I would.
You would.
I would only because the reason that you said you purchased them was for your kids to live
in them so that they could be close to you.
That was the number one reason.
And that's the only reason I heard, by the way, and so much life.
And when you told me they're ages 46 and 8, so much can happen in that time.
Number one, like you said, the neighborhood can go down.
Number two, they're three different women who will have three different lives that could
go in any direction.
Yes.
I would never want this for you, Jeff, because I know how much you love them.
But she may, she may meet a, meet a, meet a mic and then just moving, moving with
her husband.
You don't need me somewhere.
Yeah.
Or you get a different job and you want to move like there's so much life that can happen
over the course of the next 18 years or so.
And so for that reason, I think you'd probably get a better bang for your buck and have more
freedom with the type of investment that you were talking about.
And when you told us the spreads on the rent, it wasn't all that great, either.
Right.
No.
Like, no, we don't end up making money at the end of the year because here in HVAC
breaks and as you break even, and what is your principles going to?
Yes.
Okay.
So I have clarity on that.
I'm sorry.
I'll make it quick.
No, go ahead.
What is the right?
So again, I'm 37.
My wife is 31, 32 next month.
So what is the right age to write a will today?
Really?
Yeah.
Today, because you've got, especially because you've got minor kids and there's a big part
of the will that's going to decide what would happen to those kids of God forbid something
happened to you and your wife.
If you don't make a will today, the courts will decide that.
For that reason alone, there's many other reasons, but for that reason alone, I would
be sitting with a lawyer today.
It's a mess.
Yeah.
Jeff, one of the Ramsey Persona's that hosts the show, George Camel.
He has my favorite line.
It's like, if you hate your family, don't do a will because it's so, it creates what
would be a horrible situation.
Your whole family trying to untangle your whole life and from the financial sense and try
to figure out what is happening financially, what's happening with the girls.
I mean, it just, it can create so much stress, but when it's all laid out in the will, if
you go to mom of their legal forms, Jeff, you can do a state-specific will with them.
Your estate might be a little bit more complicated once you guys get into it because you own multiple
properties and different things.
So you may actually want to sit down with in a state attorney just to draft one up.
But yes, I would do a will today.
And I just want to applaud you, Jeff.
This is such a success story, like what you and your wife have done because we talk
about changing your family tree.
And that's in the way you view money, the way you handle money, the role that money plays.
And when you're deeply in debt and you're living paycheck to paycheck, and life is so
stressful with money, that's the environment your kids grow up in.
But you guys, Jeff, have made such great decisions.
Your girls not only are in an environment that's peaceful when it comes to money, but
you're also going to literally live out changing their family tree.
Like if you bought your girls a home, and they never had a mortgage, and then they invested
that mortgage payment for the rest of their life, and then their kids, that's generational
whilst working for the good.
Do you know what I just want?
Right.
I just want to add one comment that, first of all, I wish I would have found the Ramsey
Duranzi show early, I only found it six months ago.
But I will say that I grew up in such tremendous poverty, and I'm the oldest of the family,
oldest of eight.
I'm a family of eight.
I was the oldest of eight.
I can't even tell you what kind of poverty I grew up in.
So when I became an adult, it was such a drive to really, really, really, and when I discovered
the Ramsey show, I'm like, oh my gosh, the match made in heaven, they told my wife.
I love that.
I love that.
You guys are amazing.
You guys are so proud of you.
Yep.
And your kids, they're going to be so much better for it.
I can tell you're going to raise them to be able to actually be great stewards of this
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All right, let's head back to the phone lines where we have Chris who's in Montana, big
sky.
What's going on, Chris?
Hey, thanks for taking my call.
You bet.
So I make about 4,500 a month gross conservatively, monthly bills, including my car around 3,200.
And after recent divorce, I live with my parents paying 400 a month while I kind of stayed
alive, my financial life.
In that time, I've lost over 180 pounds, had a major skin removal surgery and I'm kind
of getting back to where I'm feeling disciplined and focused.
But my biggest concern is my daughters.
So both of them have a genetic condition that's called Dicer 1 syndrome.
My youngest is clean so far, but my oldest has cysts in her lungs, kidneys, and brain.
Oh, no.
So sorry.
And we're happened to monitor that very closely.
So I'm trying to find the balance where in the event of a very possible medical issue,
I have a comfortable savings buffer beyond that base $1,000 emergency fund and where the
balance is between how much should I have there just in case, because what we regularly
go from anywhere to see out of children's hospitals for the girls, which is about 8 hours
each way.
How often do you foresee going to, do they have them removed every once in a while, is that
how it works or what's that going to look like for you long term medically?
So right now, it's just monitoring and they can sure that they don't grow anymore than
they have.
She's got one in her left kidney that has grown at a concerning rate, so they've got
medical boards meeting on what's the best decision because, I mean, you can operate
with just one kidney, but if we take one out, you get a one very, very bad, an issue
area.
Yeah.
How much, Chris, on average, do you think you guys are spending a month on this?
Or is it, or is it, or is it every like four to five months, something comes up or
every eight months?
What's the calendar?
It's about, it's about four times a year that we have to make this trip and each trip
is around probably $6,800.
Okay.
Okay.
So it doesn't, you don't hit your deductible.
It's just straight out of, everything comes straight out of pocket.
Um, so they are, so that's all travel expense in hotels, they're under Montana Medicaid.
So okay.
Okay.
They're taking care of that.
Okay.
So what otherwise would be?
Yeah.
So what I probably would do, because how much debt do you have?
Including the car totals of the 30,000, 30,000, okay.
And you're, I'm sorry, you're divorced.
I am.
Yeah.
Okay.
Is your wife that, that's $6,800?
Is that, um, splits between you guys or is that what you're paying and then she's paying
the same amount too?
What does that look like?
Um, I generally fund it.
I'm in a better financial position.
Um, and she'll help with, uh, a hotel, uh, everyone in that kind of thing.
Okay.
I gotcha.
Okay.
Um, so what I would probably do, because I mean, Jade and I are both moms and I'm like,
I would do anything for my kids.
They're, they're number one paying off debts.
Amazing.
And we want you to be able to do that.
But taking care of our kids and making sure that things first.
Yes.
So what I would probably do is have a different account, um, that would be kind of like my,
the girls account, if you will, and I would make sure I have $800 in it.
And then when you use it for a trip, my, I would pause the debt snowball, refill that
and then go back to the debt snowball.
But I would have that 800 continuously in an account, even if that means pausing the
debt snowball for a bit, um, and throwing money at that to replenish that account.
But that's the one I would keep consistent.
And then if something changes, Chris, if you guys get a different diagnosis or you see
she's going to have to have surgery and there's going to be more expenses either on the
travel side or anything medical, that's when we would pause the baby, that's when we
would pause baby step two and, and build back up a bigger emergency fund.
That's probably what I would do just because it seems consistent.
But yeah, um, tell me about the, the state paying for it.
Is there, um, is there an income that if you hit a certain income, the state will no
longer pay?
Yeah.
I'm, I'm sure there is, and they go through their mom with that side of things.
Okay.
I was going to say is that on your side?
Okay.
So your income can go up as much as you want and it won't affect their care.
Yeah, but they still get consistent medical care with Montana.
Okay.
Good.
So on your end, I would then be doing secondary to what Rachel said, I'd be doing
everything I can to blow my income up as far as I can.
How long is this deal going to be going with your parents?
The $400 on my side.
I said, they're very flexible, though, I have it as long as I need it to get up on my
feet.
Okay.
Like, what's your thought in your mind on that?
I would really like to be out of there and two, three years at the absolute most.
Okay.
Okay.
And you guys just split custody of the girls.
Is it, how does that work every year?
Thank you, Shifty.
Yeah.
So Sunday to Sunday, I have a week at a time and then they go back to my home.
Okay.
So I'd be looking for a side hustle or something that, when that week, that they're not
with you, that you can just go crazy on because I think for you having that fund for
medical and then getting this debt paid off, that is.
Going to relieve so much stress, like there's enough stress with the diagnosis of this
that getting the financial side in order as quickly as possible is going to do a lot
for your soul, you know, yeah, absolutely.
Yeah.
Yeah.
That's what I would do.
That's what I would do.
Yeah.
I'm sorry, Chris.
You guys are going through that.
It's horrible.
Yeah.
So heartbreaking.
Very tough.
But you've got a plan now and that can do a lot, a lot of peace.
And who you're going to be, even in the next two years, Chris, what you've done so far from
my health perspectives, unbelievable, losing 180 pounds, like you are amazing, amazing.
So keep on the track because you're creating a whole new life for yourself.
Chris, we're proud of you.
So good.
All right.
Thanks for the call.
We've got Jackson next in Boise, Idaho.
Hi, Jackson.
Thank you for the call.
Hey, you can be on here kind of an expect to be on here, but it's awesome.
Before we're glad you're here.
Glad you're here.
How can we help today?
Yeah, it's really cool.
So yeah, so I, I'm getting out of the military, I'm 100% disabled, prominent in total.
And so I get the via health care for free, however, you know, I do want to have a family
at some point.
And I've heard a lot about like HSAs and my kind of question is, should I kind of open
up another counter, open up, get other insurance for the sake of an HSA or should I wait until
kind of that bridge comes free?
You don't have the family yet.
You're not married or with kids yet.
Yeah, I mean, just, are you just saying for the, for the possible ability to invest in
the HSA?
Is that what you're talking about when you said you've heard of them?
Yeah, I've heard a lot of like the tax advantage of this stuff and so I kind of figured
it'd be good thing investment wise, but also like the health insurance thing.
I mean, well, right now you're fully covered by VA, right?
Yes.
So you don't need the coverage and your family is not here yet for them to need the coverage.
And so then when you think about it from an investment point of view, it really is on
down the line from other ways to invest.
I would rather you invest money in a Roth IRA if you could or something like that before
I'd go to an HSA.
It's kind of just like, once you have it, it's very nice to have, but it's not something
you have to seek out and go get for that purpose.
So for that reason, I would say you're just fine as you are.
Yeah, as is.
Yeah.
Yeah.
So if you have an option, like Jade said, if you're using it above healthcare for an investment,
but that's after you've maxed out whether it's 401Ks, you know, Roth IRAs.
Roth IRAs, I mean, all of it.
It's just another investment vehicle, but at this point in life, I think you, yeah, I probably
wouldn't, I probably wouldn't hassle with it because you have great healthcare with the
VA.
Mm-hmm.
Okay, that makes sense, and I just want to appreciate you guys helping.
Absolutely.
Thank you so much for the call.
It's a good question.
Yeah, HSA is, you know, they're, they're really great, like you said, they've got that triple
tax advantage.
And a lot of people, if you know you don't need to access the money for health, yeah, go
ahead and invest it.
Usually you can invest it.
There's usually a minimum of like a thousand dollars that kind of has to stay liquid and
then you can invest the rest.
And over time, it'll just convert into a normal, like IRA, you don't even have to use it for
medical expenses, which is, it is, it is nice to have that.
But if an HSA is not the right, a high deductible plan is not right for you, I would not get
the plan simply to have access to an HSA, that's right.
Absolutely.
Yeah, because saving and your emergency fund and stuff can cover some medical things that
are out of pocket where the HSA may step in and do that if you are using it for medical
purposes.
So there's ways around it for sure.
It's great if you have it, it's just kind of another tool to invest in, but definitely
not necessary and probably wouldn't move mountains for it.
No, I definitely wouldn't move mountains for it.
Thank you so much for the call.
This is the Ramsay Show.
Dave, we got a lot of calls on this show where life happens.
One day someone's healthy, they're working, providing for their family, and then a curveball
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You know, we heard all the time, a car accident, a cancer diagnosis, a heart attack, and
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Yeah.
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Yeah, that's right.
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Yeah, it's important to understand the difference between them.
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Love that.
All right.
Welcome to the KELIMBS Ohio highway.
Hi Katie how can we help?
Hi many Miss Katie.
I just wanted to see I recently got a $2.6 million settlement and I just wanted to
figure out what I should kind of do with the money.
Oh wow, I have a mortgage and I'm trying to figure out whether or not I should pay
that off or not.
Yeah, what was it from the settlement?
It's a lawsuit.
like, but you're okay.
There's nothing.
Is there anything we should know
about you going forward or you're all good?
I'm all good.
Yeah. So no ongoing medical issues.
Is there anything out of it?
No, not yet.
Okay. Okay.
How much is your mortgage?
My mortgage is $190,000.
That's how much we have on the principle
and I'm at 2.75 percent.
Okay.
Is it just you or do you have a family?
I have a husband.
I don't have any children.
Okay.
Yeah, my husband is a student right now.
And he's working on becoming
at your traffic controller.
Oh, how old are you guys?
I am currently 30 and my husband is 31.
Okay.
And do you guys have any other consumer debt?
Let me see.
We have 105 from student allowance for me.
I'm a nurse.
Okay.
And then my husband,
he's going to be about 150 total.
Okay.
Great.
And then but no car payments,
credit cards, anything.
Cards is 25K for me.
And then my husband is,
he only has that 6K left on his.
Okay.
Credit cards?
No credit cards.
Okay.
So my biggest question would be
before we get to the 2.6 million,
let's pretend that 2.6 million,
whatever happened caused that to come your way,
never happened.
Were you already on the track to say,
you know what, this debt is kind of crushing us?
We need to do something about it.
Had you already kind of been looking at that
or kind of tell us how you arrived at calling the show?
Was it just the 2.6 million?
Yeah, so I mean, basically it's the 2.6,
but in all reality,
my husband once he graduates from school,
our plan was to immediately start attacking that
as much as we possibly could.
Okay.
I've been working 60 hours a week currently.
And I make about 120K annually right now.
Okay, okay.
So as long as I just wanted to,
before we started saying,
you need to take this money and pay off the debt,
I wanted to make sure like philosophically,
we aligned on the idea that debt is.
No moving forward.
If it gets paid off,
that we're not going back into the habit
of taking out debt for stuff we want.
Oh, absolutely not, no.
Perfect, perfect.
Yeah, because sometimes you can come in
with a lawsuit like this or inheritance
and just in one sweeping motion,
be completely debt free even your mortgage,
which is amazing.
That's where we're going to guide you to,
but it comes back.
But if that behavior, yes,
it hasn't been changed or the belief system
hasn't been changed,
you'll be right back into debt and how quickly,
I mean, 2.6 million is amazing,
but yes, we just want to make sure that you can,
yes, sustain a lifestyle that still makes sense.
So yeah, so, yeah, Katie,
I mean, what I would do is,
yeah, it looks like you guys will have
a close to $200,000 in debt,
not including the mortgage.
If you include the mortgage,
that's around 400,000 after all the student loans
and everything.
So I would pay everything off,
that would leave you 2.2 million.
And, yeah, there's really three things
that you can do with money,
and I would do all three at some capacity.
You can give it, you can save it,
and you can spend it.
So I would look to see,
what are things that you and your husband really care about?
I don't know if you are someone of,
that practices a certain faith
or if there's things in the community that you guys,
I mean, as a nurse, I'm sure you see a lot.
So I don't know what that looks like for you,
but any level of...
We throw to church every Sunday.
Okay, yeah.
So any level of generosity is gonna be,
I think an important part of this picture,
just because the practice of that,
I think it's just, it's an amazing thing,
and it changes who you guys are.
So I would be giving...
I do have a question about that, actually.
Yeah.
And it's just because,
and I don't mean to break you off,
but basically with the other financial advisors,
we talked to you three different,
but we're still trying to figure out who to go with.
Yeah.
Everyone seems to have a different opinion
on gifting money to family,
because they don't want it to turn into
a transactional relationship,
and they don't want it to change the relationship dynamic.
What is your opinion on that?
Because my husband and I are both,
you know, we both want a gift,
but we want to make this so that it's not like
a reoccurring thing or an expectation with family.
Yes, that's, I think it's great advice,
because you can easily, yes, get into that where,
it becomes a habit that Katie is suddenly so rich,
and we can just go to her when we need things.
Yeah.
So is there, is there something that you guys have
pinpointed with your families,
like maybe paying your parents' house off,
or like, is there a thing that you're thinking about,
or are you just,
okay, what is that?
What are you guys thinking about?
So my in-laws, my parents are unfortunately not around,
but my in-laws, they were thinking about
gifting them with a car.
Their car is on its last leg and they need a new one.
And they're, so I was thinking about that,
and then also getting on, you know,
giving my, giving my brother some money to,
he's got some health issues going on as well.
Yes.
So.
Yeah, I, I would be okay with that with some,
like, very communicated boundaries around it.
I think just the idea of it just happening,
I probably will be a little bit more intentional with it.
Okay.
So I probably would sit down with his parents
and just say, hey, you know,
we've been put into position
that we're able to do some giving
and we would love to help replace your car.
And here is, I almost would,
this may be sound too controlling,
I almost would go ahead and just buy it.
And it, and it, and it, 100%.
Yeah, I was gonna say,
instead of giving them cash,
and a very modest car.
Yes.
But, you know, but a good car, right?
Like, it spends some money on it.
Do your family members know about the 2.6 million?
Do they know this happened
and that you got to large some of money?
Not at all.
And I don't plan on sharing.
Perfect. That's great.
I think that's what I was gonna say.
So I think you guys can kind of like sneakily come in
and help them in that way.
And then your brother,
if he has outstanding medical bills
and you guys wanna pay some or all or whatever you decide,
then again, if you can not just give cash,
pay the bill, pay the bill,
pay for the, pay and get the actual car.
You know, that kind of thing I think is helpful.
And, but I think that's the way to,
I, yeah, that doesn't like freak me out.
I think that, I think you know the person.
Like, you know the type of character that someone has
where they maybe have the propensity to take advantage
or they have the ability to, you know,
you give them an inch and they take a mile.
And if you know these aren't that sort of,
this is not that sort of person,
then I would do that in two seconds.
Yep, absolutely.
And I think it's a great blessing.
Yep.
Really good.
Yeah, and then.
Thank you very much.
Yes, and then investing some to Katie and spend some.
You know, if you guys need some upgrades on some things,
or you wanna take a great trip, yeah.
Leave some room for that,
because you don't need to be working
60 hours a week anymore.
You know, I wouldn't change your work.
I would still be contributing and still be going to work.
I think that's just good in general for a person.
Yeah, you don't want it to take away your sense of purpose.
Yes, that's right, you know.
Yep.
So I could see spending a reasonable amount,
like you said, on things that increase your day-to-day
quality of life.
It's Spotify premium if you haven't already paid.
I mean, come on.
Yeah, it's some of the enjoyment of life.
I think that's great to up some of your lifestyle a little bit.
Yeah, and just be really intentional.
Be aware, and then again, be sitting down with an investment
professional that you guys feel good about,
and invest a good bit of this money,
because this will take you guys on into a time,
yes, into retirement, and completely change your life.
So I hope that helps Katie.
Our question of the day is brought to you by Why Refi.
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Today's question comes from Daniel in California.
He said, I'm 28 years old and have $100,000 in student loans,
car loans, credit cards, and a 401k loan.
My girlfriend and I have lived together for three years
and recently got engaged.
Would it be better for us to alope and then save
for a formal wedding once my debt is paid off?
Or should I pay off my debt while she saves for the wedding?
She has no debt.
I'm currently working both full-time and part-time
to knock out what I owe.
Oh, man, this always hurts my heart.
I was on the show with Ken because Ken is not anti-wedding,
but he's like, just don't worry.
I know.
It's one day, it's one day.
I love a great wedding.
So it always hurts my heart when I'm like, just go alope.
But I would.
Daniel, after three years, go tie the knot.
And then you guys can save up and pay for a great wedding.
So I would go down the courthouse, make it what it is,
and then you guys save up for a fun party.
And I think that-
I would do it.
So I would go get married.
But again, it kind of hurts my heart a little bit
because I love a good wedding.
I do too.
She's going to be the one that feels this.
Yes, probably.
But that's going to take a while.
Even if you're working a part-time job,
and you know what I mean, I'm like,
that's going to be another two and a half years
possibly, depending on what he makes.
So I wouldn't wait that long to get married.
I would go ahead and get married.
I wouldn't, unless her idea,
okay, I could talk about this a little bit more.
Okay, go.
If her idea of a formal wedding can be done
for a lot less than what I'm thinking in my head,
like you guys can cash flow in.
Yeah.
What do you think in 10, 15?
Yeah, I was thinking 15, 20,
but if you can cash flow it, both of you,
and maybe it's like she, you know,
with her job can contribute half,
and you contribute half,
I might, I might could be okay for that.
And you could do it in like six months or something, yeah.
Um, just because I just feel like
she's going to be like, wait a second.
I know, she's going to be bought in.
So you're telling me that I can't have my wedding
because of your debt.
Ah, I agree, like sitting in this chair.
I know.
Right?
But if Sam Warshall came to me back in the day
and was like, first off, I have $100,000 in debt.
And for that reason, we're just going to allow.
We're going to allow for this lecture.
I'm so sure.
I've, she's having the ring.
She's saying, no, I don't know.
No, I would.
And that's a good point, though.
I'd like for it.
If you can cash flow this,
but I wouldn't wait, I wouldn't wait longer
than five to six months, though.
I would do it quick.
Agree, I would do this quick,
because you can't have a really nice party.
It doesn't have to be in secret.
I guess is what I'm saying.
Right.
You can have a really nice party
and then save up and do another really nice party
later on.
Yes, so who is this?
If you can save for it quick, again, four to five months.
Yeah.
Then you can, yeah, do the wedding.
But if you guys are just like,
it's not a big deal to either one of you,
then I would, yeah, then I would alope
and then you guys can, yep.
Put your income together, pay off that debt faster
and then, oh, man, that's hard.
It is hard, but yeah, thank you.
You heard, you heard our ideas.
Yes.
We gave you two options.
That's good.
All right, we've got Richard,
who's in bowling green Kentucky on the line,
right up the road.
What's going on, Richard?
Oh, doing good.
Thanks for taking my call.
Yeah, you bet.
How can we help today?
Okay.
I found you guys about a year and a half ago.
And just a year ago,
I was lucky enough, our guest were thankful enough.
I found me a really good job.
I make 140 a year.
Good.
And we kind of made a boo-boo.
We bought my 16-year-old at the time, a car.
And she's like, I'm going to work, I'm going to pay for it.
Love, love, love.
Well, she, after about six months,
decided she wasn't going to work.
Now the car is in mine and the wife's name
because she was 16 and can't take the loan.
Sure.
How much?
And, well, at the time, it was 23 and now it's down to 14.
We have paid it down to 14,000.
Okay.
My question is, should I sell it or should I keep it
and just finish paying it off?
Cause I'm in my debt snowball right now.
And it's like, the bill I'm working on right now,
it's three more, it's above that.
And then I'll be putting all towards that car.
How much are you and your wife's vehicles worth?
What'd you spend on those?
Well, I spent, I spent 20 on mine and it's paid off
and I spent like 28 on hers and it's paid off.
Okay.
And how old is your daughter now?
Well, she just heard 18, two months ago.
Okay.
I mean, you're in the parameter, like for your income 140,
we'd say no more than half of your annual income and vehicles.
So you're right there, 20, 28 and 23.
You're right at the cusp a little bit over,
but since others are paid off,
I'm not going to be too much of a tyrant about it.
You could keep it and pay it down.
She's 18 now.
Yes, she just turned 18.
And have you guys talked to her about taking over the loan?
Try to, but it's like talking to a brick wall.
I'm not liking when I'm hearing about this.
I have a very, very grateful.
Yeah, right.
Yeah, it's, yeah, she, she's got this attitude
that she's entitled to it.
And I'm like, oh, then sell it in two seconds, right?
She didn't even come up with that.
Well, and you put your daughter in debt, Richard.
I don't like that either.
What's that?
So, so, yeah, if you guys were,
baby, step seven, you had tons of money,
I would say if you wanted just to pay for it
and then say, yeah, it's yours, whatever.
I don't like the idea of you setting her up with debt.
So, I think you set her down and say, sweetie, I'm so sorry.
We messed up.
We, you said, we had a boo-boo.
Right. Yeah.
So, we said the beginning of the call.
Not only is the deal that we had made disintegrated,
which I don't blame her in time.
She's 16.
Like the frontal part of her like,
breath is even formed yet.
So, you're putting a lot of responsibility on a 16 year old,
which was not very smart.
How much is the car now?
Right.
It's right out for 50 a month.
That's a lot.
How much would you sell it for?
If you sold it, what would you get for it?
Oh, I don't have no idea to be honest with you.
I mean, 100% I wouldn't know.
Like I said, it's, yeah.
So, I would look at it.
I have 14 on it.
Yeah.
I mean, in a perfect world,
it's not upside down in a perfect world.
You'd get 18 and you could buy her a $4,000 car
and just call it like a, hey, we did this.
But yeah, but I would say the two things.
Number one, the deal that we made was a bad deal for you.
And the deal we made now goes against the value system
on which I think that you should live financially.
And because of that, in good faith, I can't keep you held
to a loan because I don't think that that's the right way
to live with your money.
And so, it's in our name.
And we're going to sell it, but she is 18.
So, I don't even want to give her the choice to take it on.
No, I would not transfer this over.
Rachel makes a very good point.
On the one hand, you guys were in the wrong
for bestowing this life of debt in front of her.
We need that now.
We need that now.
And then she also, it sounds like I don't know,
just deriving from what you've said.
She's kind of hard-headed and is not really doing
what you guys are hoping for in this moment.
So, I would not want to reward that behavior.
I like what Rachel said about kind of going and saying,
hey, you know what, we said this.
That was our mistake, our bad.
However, you also haven't shown that you really want a vehicle
and because of how you're acting,
it's very hard for us to even fund one the correct way,
which is in cast for you at this stage.
So, I would kind of play both sides of that field.
She's going to be mad, mad, mad, Rachel.
She's so mad.
So, listen, that's the thing about when you set up a boundary,
you put up the boundary and then, regardless of what that person,
how they react, what they say, that's on them at that point.
But you probably know from data points
that it's not going to be great, but I really do believe,
in the long run for her, it's going to be better.
It's going to be better.
It's going to be better.
And she is going to remember the lesson.
If you, to me, there's something so big
when a parent apologizes, it is like, I made the mistake,
and here's what I did.
I never should have done that.
That sticks with a kid for a very, very long time.
So, she's going to remember the fact that my parents went into debt
and they looked at it and realized it was the wrong thing.
And I almost, I almost would be willing to take back my former thing
about not getting her a car, because what I wouldn't want to happen
is that that lesson getting lost in the part
where she'd never longer has a car.
Do you know what I mean?
So, there's part of me that I'm like,
maybe I would give her the $5,000 car classic.
I probably would, yep.
And then she remembers the bigger lessons.
Real pissed, she can go get a carlin' on her own
and make her own decisions at that point, yeah.
Yeah, that's true.
That's a good one.
Thank you for the call.
Sorry for the call, Richard.
I hope it goes well.
We'll be praying for you.
Thank you.
All right, welcome back to the Ramsey Show.
We're here in the fair one's credit union studio taking calls about your life and money
I'm still with Rachel Cruz. I'm still Jade Warsaw doing it. We're still doing it. All right. Going back to Dominic
Who's in Springfield, Massachusetts? I'm guessing on the line. What's up Dominic?
Hello, Jada Rio. I'm good. How can we help? Did I get it right as M.A. Massachusetts?
Yeah, okay. Yeah, so I get it. I just have a quick question for you guys. I'm not too long. So I have
a lot of money investing. So like, I'm a rookie when it comes to investing. I just started. I hired an
investor back in September. And I'm watching my investments go as along the way. And it doesn't look
like my investments are doing as great as I wish I could. And the other thing is too. Like I think
I want to like cash out my investments. And because then like a couple years down the road, I'm trying
to buy a house and move out of my parents house. And I don't know if I'm should I cash out the
investments or just kind of hope for the best. Are they retirement? Is it like IRA, Roth IRA type
stuff? What's it invested? What's a vehicle? Well, no, so a lot of my, so yeah, no, I do have a
floor on cable. I went use that for the house. It would, so I have a lot of my money in the S&P 500.
Okay. I have 97,000 dollars in what's called River Bridge. And then I have another 135,000
in legal and other little fund that they have. It's like, it's called a structure note.
Okay. And they're just tax, is just a taxable brokerage account?
Yeah. One of them is like kind of like a brokerage account. And then the other one is I, it's a,
I guess like a, I'm not really so sure how to put it. But the River Bridge is what's
it's in the video and then Google with an investment and. Okay. So they're single stocks.
So it's like, yeah, yeah. So it's like not just a single stock. It's like a lot of them. Yeah.
How many together, how many single stocks are in that fund?
I think it's about like, I'm not entirely so sure to be honest. Okay. Okay. So part of me, what I don't
like about what I'm hearing is you're not sure about what you're invested in, which is always a
red flag for me because you should understand it enough to be able to explain it back in a way
that is clear. So part of me, and I think you understand facets of it, obviously, but there's
obviously facets that maybe you're not sure of. So that's thing number one that I'm thinking about.
Thing number two, I'm thinking about is the fact that you said, ultimately, you're trying to buy a
house. And I'm wondering what your timeline is for that because that, that does play into whether
or not I would keep this or what I would do with this money going forward. So what's your timeline
for the house? Like, within like the next like couple of years, I'm really interested in moving
out of my parents' house and I was thinking whether I should rent or buy a night and looking more
towards the buying because I feel like I can afford it. I do have a good chunk of change, but yeah.
Yeah. How much are you making a year? My full time position, I make like 75K a year.
Okay, how did you save up all this money? I mean, it's like almost 200 to 35K.
Yeah, no, I'm a really frugal person. I don't really spend my money. And before two,
I started working full time. I had a way back in high school, it was working a little part time
job. I was pretty much always saved money and never really spent. Good for you.
Well, if you're thinking about there's two parts to this. So first off, based off of what you've
said, the way this money is invested, it's not invested the way we would tell you to do it here,
the Ramsey way. It sounds like your your 135 is probably mostly in bonds or something like that
with the structured note that you have. And then the others and index funds, which is fine,
we would teach you if you were going to invest your money to do it in mutual funds again across
four different types. And it doesn't sound like you have it invested that way. So I would think
about rolling that money into the proper investments versus caching it out per say.
Now, if you were ready to buy a house immediately, I would say you could go ahead and pull it out.
But if you really are thinking, hey, this is two to three years down the line. What I'd be doing is
I'd be meeting with a smart investor pro and saying, Hey, I have this money invested the way the
reason that your return is not very great is it sounds like you have a lot of bonds with that
135 invested. That's why it's probably going very slowly. And I would say, I don't like the way
this money is invested. I don't believe it's invested the money, the Ramsey way and that it's
getting me the best rate of return. And then I would have them roll it over into better funds.
And then yeah, I just let it sit and grow for the next however many years until you're ready.
And just understand that when money is invested for five years or less, you may or may not,
you know what I mean, that five year point is kind of when we see like there is a locked in
and your money has grown. There's a higher rate that will have grown by five years versus if it's
less than five years, there's more fluctuation within that. So just know that. And even like the river
bridge account, like I would almost feel more okay with that. If you said there were 50 individual
stocks in there, but the 10 feels really limited. A lot of risk in that.
It could be asked you. It might. It might. I think it is a lot more
okay. So I don't do this by myself. I hired a professional. He's really good. I like him a lot.
And I'm I he answered all my questions when I ask him. But your returns aren't. Your returns aren't
what you said they should be. That's a red flag for me. Yeah, I yeah. I don't know if it's really
necessarily his fault, which is I guess it's just the stock market, which is what I'm. Well, it depends
on what you're invested in. That's the whole point. So if you're invested the way we say, like
your bonds are going to move slower than anything else. That's kind of like what you transfer to
when you're almost ready to retire. So you could you could stand to be more aggressive in your
approach. That's just me high level looking at it based on what you said. Yeah, looking at some
funds that are, you know, aggressive growth type mutual funds. You probably would see more return.
But also, you know, it is the long game. So I wouldn't. But I would make sure that yeah,
from a investment strategy perspective, like what you're saying, right? There's a right way
to play that long game. I agree. I mean, don't get me wrong. You love this guy and you think that
you just need to spend more time with them to understand. Great. I'm not going to tell you
that to divert, but yeah, it might even be that just not really giving it a fair chance. Because like,
I used to just do like CDs, which is like, like, like guaranteed. But then once you go to the stock
market, you're like, well, you know, I mean, yeah, yeah, that's a big job. It's not really. Yeah.
Yeah. Well, and I think, you know, over the next two to three years, Dominic, I would use
majority of this to put as much down on a house as possible and then have that and then and then
re re energize the the investment machine, if you will. So I think you're yeah, I mean, I would
look into it, but two to three years isn't going to make or break you because you're probably going
to use this for the house. But I would just from a knowledge perspective, like what Jade's saying,
sit down and really get a good grasp on what all this is and check out our investment, you know,
philosophy on the four types of mutual funds. And again, we're even okay with an index fund.
That's just over, you know, the broad scope, if you just want to put your money in that too. But
but the diversification piece is really is really big. So that's what I would ask him about that
that other fund. But I'd get out of I'd get out of the bond market personally. Yeah, I would too.
It sounds like I was just kind of looking at it a little bit and it just sounds like it's way
more predictable. There's an income facet of it. There's a lot of protection against the
downside of the market. So it sounds like this is just very, very conservative for you.
And at your age, you probably don't need it. You don't need to be. Yeah, you got time, buddy. So
get out there, test the waters. Well, don't don't make the keep the, yeah, the habits in place,
though, the fact that you've saved that much is so impressive. We just wanted to go as far as
possible for you. Yes, yes, absolutely. Thank you so much for the call.
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All right. We've got Susan on the line. She's in Seattle, Washington. Hi, Susan. Thanks for
joining us. How can we help today? Hey, thanks for taking my call. So I'm kind of at a loss.
The man I married, we've known each other four and a half years and we got married four months
before he passed away. Oh my gosh, Susan. Anyway, I've always had a soft landing in my life.
And there's always been somebody who's the first time. And again, it's a little bit of a soft
landing. You left a little life insurance. I've sold a lot of assets that I have. And it's helped.
I am self-employed. But when I found myself and I went through a grief support group
thing and one of the things they talked about was grief spending. I'm like, oh, that's not me.
Sure enough. It was about four weeks ago. I realized, oh my gosh, I'm a grief spender. I mean,
I was just going over my numbers. He passed in August. And since September, over my budget,
I have spent $33,800. Now, some of that was on tires to the car and you know, oil change and stuff.
But the majority of that has just been on memberships, house cleaners, gardeners,
handymen and dog stuff and just stuff I don't need or didn't need to buy and every time
and I just empathize with myself when I would click that little buy button. Yeah, not now.
Oh my gosh. Are you using the insurance money for this or is this something you're going into debt?
No, unfortunately, no, I'm not going into debt. So I currently right now in savings, I'm down to
$20,000 and three months ago, there was $57,000 in there. Okay, some of that I've been using
to live on. I need two grand a month to live on in my house. My business requires two grand and
it's staining on its own. So I'm not worried about that. But I do need my business to kick it up
a notch so that it can support my business and me. But that's, that's going to take time because
when he got sick, I did back off clientele, et cetera. The 2000 a month you live on, what's that
cover? Do you live someplace where there's no mortgage or tell us more about that? It's a rent
and that's utilities, rent is 1450 and it's gas lights, trash, water, and internet. Okay.
And that's going to be gone in 10 months. Well, yeah, like keep going in the way I'm going.
Yeah, for I am getting more inheritance next week, there's another inheritance check coming
up. That'll boost that 20 to 50,000. So it'll be 30,000. And then there is another
probably 25,000 in assets that I need to sell. Okay. That I haven't gotten to yet. I'm working
on it. There's a phone awful lot to navigate. And then there's another pension of his that I
haven't applied for yet. And that's about 18,000. So when all said and done, if I spend no more
out of the savings in about a month, there should be 95,000 in that account. Okay. Yeah.
So do you feel like the the counseling is helping with the grief spending now that you've kind
of pinpointed it? Because sometimes part of the problem is like realizing, oh gosh, that's me.
And then you identify it and you can start to work through it. Yeah, I finished the grief
counseling back in December. And I didn't realize my problem until about three weeks ago. Okay.
Now back in September, a friend was booking a cruise. I said, sure, I'll book that cruise
with you for February. So two weeks ago, I went on a one week cruise. It was five hundred bucks.
I say it was only five hundred bucks. Yeah, that's not bad for a nice, you know, balcony
state room, but I didn't calculate the hundred dollar parking fee and the four hundred dollars
I had to board my dogs. Yeah. Plus I spent another probably five or six hundred dollars on luggage
and clothes. Okay. That was in my purview back in September when I booked the cruise. Sure, sure.
Yeah, that's expensive. Yeah, they don't sneak up. No, go ahead. Well, I was going to say,
first, I would give yourself some grace because I do think when you're in a season, especially
of grief, our bodies, we're looking for a way to cope, right? And if we're not aware about,
or not intentional about it, it can go, we can start medicating sideways, right? Whether it's
drinking, gambling, shopping, like whatever we're doing to have a level of stability, we search out
for. So I don't want to fault you for that because I think, you know, that's a, it's a, that's a
common. It's very normal. Yes. So now I think the fact that you've realized that now we can put
some things in place to help with it, to actually create some friction between you and buying things.
So I would do, you know, from a low level, I would delete Amazon Prime. I would not have my card
saved on any website to make it an easy purchase. I would take off Apple Pay off of your phone,
like put some actual logistical friction between you and, and spending any money, okay? That's
like one thing you can do. Another thing that, when you're coming off of, and I wouldn't say that
your necessary are addicted to spending, but a lot of people, especially in 12 step, they say to
redirect where you would normally go and spend or normally go and get a drink, instead do something
helpful, right? When you feel the need to spend, go for a walk. When you feel the need to spend,
have that friend that you call, and you tell her, I'm going to call you every time I'm tempted.
It's this redirection of your actions that actually can be very helpful because you almost train
your, train yourself to have a new set of habits. So yeah, that, that, those are a couple of
just things I would probably, I would start today. And then of course the budget and kind of the
working with still, you know, yourself, I think is still big. Yeah, I think in this call,
I would tend to err on the side that what Rachel said is probably the bigger and the biggest part
of this because until, until you can get that piece in alignment, anything else that we teach you
is not going to hold, right? Because you need to have that self control that's built in.
But once you do have that, yeah, there's the practical side of making sure you are in a budget,
like every dollar, and we'll make sure that you get that before we hang up this call. But
I have it. And I have created the budget. It's easy to pay my bill. Good. Good. Yeah.
And then the discipline of learning how to be really detailed when new things pop up is
something that is a muscle, I think that builds over time to just think through every aspect of what
you might spend money on. But my biggest question, um, besides these lump sums of money that's coming
is what's your month to month? How are you? How much money do you earn coming in month to month?
Right now I'm earning in my business about two grand, just enough to cover the expenses of my
business. So I've been living off of whatever he has. So it's not whatever it's not actually
profit. It's having to be right reinvested right back into the business to keep it going.
So I would say that I'm concerned about that. And that would be along with what Rachel said,
creating the friction, my number two piece of homework for you would be figuring out what earning
and income looks like for you. How long have you had this business? Five years and it was doing
really well. What caused it to decline? My husband sickness and me stopping stepping back.
Okay. Do you have a timeline, Susan, a realistic timeline? And when you think it's going to start
actually creating a profit, is it going to be like another year? Is it going to be three months?
It's actually starting to build back up again. What kind of business is it?
I'm a transformational trauma coach. Okay. I'm pretty elite in the area I live. Okay.
So I'm pretty well known and it is lucrative. I mean, so it's going to be a kind tale bag.
But like 24 and I had my husband's income as well. In 2024, we were doing close to 100,000
in that year. And we live in a small town. How much were you making out of that?
About 52. Okay. So if you could get back clientele wise,
to that 52, that would you could sustain on that. And I like that for you. In the meantime,
honestly, I pick up a side hustle because when you have too much time to sit at home,
I know when I'm at home, Rachel, and my eyes just look at the walls, I go, oh, it'd be nice to
get something new for that wall. Oh, I need a new bed spread. Oh, like when I'm not doing enough
with my time, I tend to spend more money. And I think a lot of us are like that because you're bored
and you're looking for release. You add grief on top of that. And I think it's just a recipe for
overspending, which is what you've seen. And you need an income right now too. So it's going to kill
two birds with one stone to get out there. Get a side hustle until this business is producing.
And do what Rachel said, put some friction in place.
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One of our favorite things is when people share their stories of how they're winning. And we just
got this amazing review of our every dollar app. She says, I love this app. It makes it super
easy to budget with my husband. We have implemented this practice since our wedding day,
and we've had zero money fights because there's full transparency, and we're on the same page.
Love that. That's amazing. Hey, you can do it too. You can take control of your money,
and you can change your family tree. You can live like no one else. Go download our every dollar
budget app for free in the App Store or Google Play. Alrighty then. Stephen is an Hartford
Connecticut. Hey, Stephen. How can we help today? Hi, I was doing the baby steps, and I'm finally
at the pay off a mortgage step. Yeah. I thought you guys last year through a guy at work.
I've been messing up and I've been putting money towards my escrow. Is there a really good way
to attack the mortgage? Because I love to be paid off in about five years. Yeah. I mean, the best
way is to pay extra payments. So you pay your normal payment that's to do that satisfies the
interest. And then after that's free and clear, then you can go back and put extra payments and
put them directly onto the principal. And that truly is the best way to do it over time.
Okay, so when you do the, when you say pay on the principal for the mortgage payment,
are you talking about like the lump sum I pay every month? Or is it actually like a certain mortgage
payment? So your mortgage payment, the payment that you pay every month, it's probably comprised of
a couple of elements. There is the actual loan balance, what you owe for the home. And then
you probably have some insurance that's built in there, some taxes that are built in there.
Right? H-O-A. H-O-A. Sometimes that's built in. So your payment is going to all those different
places when you pay your monthly payment. Interest all of that. So after you've paid that monthly
payment, you've satisfied the interest, you've satisfied the taxes, anything else that's built in.
Now, any extra money that you apply, it's going to go directly to the loan balance, which we would
call the principal. So it's going to go straight to that. And that way it's like a pure, it's pure
money. So if you pay $500, it's going to lower your balance by five, you know, it's going to lower it
by that much because it's already, it's on top of your normal payment. And a lot of times-
I thought I was doing, but it was actually to sit in my escrow and then I got a check for those
Yeah. So what I would do is you can either call it in and tell them, I know on mine,
you could go in and you can actually decipher if it's going to be a normal payment or if it's
going to be a principal-only payment, it actually has the option. If yours doesn't have that,
then I would call in and do it that way. And if you're doing it, you kind of have to make sure
for the month, you've already satisfied the payment for the month or else it'll go towards your
monthly, it'll go towards your normally monthly payment. Does that make sense?
I have no problem with that. I usually pay a little early and then what I had at the end of the
month is what I try to put on extra. Yeah. So after everything was done, like all my bills are set
and paid, I throw whatever I have left over just right in there. I kind of have like a free
account type of thing. Yeah. After everything goes through the budget. Is there a good strategy on
how to pay it? Like try to do like two to three extra mortgage payments and try to take it down
or does it just throw anything in any extra that you have at it? As much as you can within what
makes reason reasonable sense for you. So we always teach that when you do the first three baby steps,
you're very intense. Everything is as fast as possible. You sacrifice everything in order to do
this quickly. But then when you move into baby steps four, five, and six, you're moving into a
season of intentionality, which is I don't have to be like balls to the wall, but I do want to be
thoughtful about am I intentionally putting extra towards this? And that really is up to you. If
you're in a season that you want to go really fast, that's fine. Or you know, what I find Rachel
is that there are seasons where you're very, you know, gung ho about it. And then there are
seasons where you're like, you know what? I'm going to renovate that bathroom. And so maybe you pull
back a little bit, but you're still putting something extra. And so it kind of ebbs and flows, but the
point is that you're always doing something in that you have a plan for what that looks like. It's
not just kind of a haphazard thing, but it is an intentional behavior. And I'm sure you've run
numbers, Steven, right? I mean, people do like Excel forms or a mortgage calculator. And you can watch
that as that principle goes down learned about that from days. Okay. Good. Yes. Like I said, I'm new to
this. Yeah. My mortgage calculator thingy. Awesome. I'm hoping to be paid. Like I said, I just
refinanced for 15 years. Oh, good for you. Yeah. I was I had horrible credit and everything like that
when I first did this. So my interest rate was high. Okay. So good. With doing everything. I was so
scared because paying off everything. Obviously, my credit score dropped. Yeah. So they had to do the
underwriting thing. Yeah. You guys talked about, but they did it. That's awesome. Yeah. Well done.
Steven. Yeah. 15 year. And I just really want to pay it off. Yes. Well, for a lot of people, when
you start to see those numbers and what's crazy is even, I don't remember the math, but we did the
live event recently. It was like a four extra mortgage payments a year. And how quickly that
takes off what it does on the principle and how much, I mean, how much interest you save tens of
thousands, if not even hundreds of thousands of dollars of interest, like it is, it is wild.
What even just a little bit will do, do you know what I mean? That's what's so encouraging about
it is when you start plugging in your numbers, you're like, oh my gosh. Like this goes a really long
way. And a lot of people that are doing the baby steps, they pay their houses off in seven to ten
years. So yeah, you may be faster than that, Steven, or you may be right around that. But I think
when you at least have the mindset that you want to pay off your house, it happens faster than just
settling and saying, I'll have a mortgage for 30 years or 15 years. Yeah. So if you do what Rachel
said on a 30 year mortgage, just doing four extra principle payments, you could reduce it by 17 to 20
years. Yes. Just by doing four extra principle payments. Say 15. Uh-huh. On a 15 year, it could shrink
it to around 10 to 11 years. Okay. So that is major. That's just five years. Yeah. Just a few extra
mortgage payments. So if you did that six times a year, right? Like it starts to just shrink so quickly.
That's what's wild about it. Yeah. It's really, really crazy. Yeah. If you, you know, spent the
average right now, which is around 400,000 on a mortgage, the normal terms, yeah, on a 30 year,
you would save potentially $200,000 in interest. That's crazy. Simply by doing that. Yeah. Yeah. So
if you've not ever played around with these numbers, you can get your, like you can go down a rabbit
hole of just like, oh, it's like how are you realizing? And that's money back in your pocket.
$100,000. That's not going to interest. It's for you. Yes. You save that. It's amazing. Can we just
say that for a minute? Sometimes when you're playing, when you're talking about numbers like this,
and they feel like they're out in the future, it can feel like it doesn't matter. But it does.
These are real dollars that you are paying. Real dollars. 200,000 dollars that work
harm from your money. Yep. And so just really take some time and think about that. It can feel
almost like it's not us real. Yes. But it is. It is real money. All right. Very, very good.
Let's go to Holly and Sacramento, California. Holly, you're up. How can we help today?
Hi there. Thanks for taking my call. I have a two-part question.
The first one, I'm a single teacher mom. I make 114,000 a year. I have life insurance through work
at 300,000. And I'm just wondering if I need extra term life insurance on top of that?
Yes. I would. We say 10 to 12 times your annual income. So I would put more like a million,
I have a million dollar policy. Yeah. Okay. Yes. And hopefully you can get it. You know,
and you can supplement it. If you want to keep the work one, I'd be okay with that if you got
a 700,000 term life. And it shouldn't be too expensive if you're healthy and all the things. So
yeah, but that's what I would have that to supplement. Yeah. And you can get that through
Zander. You can hop on and they'll get you set up. It's really easy now. I mean, they'll even
come to your house and everything like that. Oh, okay. Yeah. It's great.
Okay. And my other question is I recently paid off my car and one other large debt.
Oh, congratulations. Thank you. I'm working on paying off my Hewak loan and it's at 20,000 right
now. I'm paying that thousand dollars a month and I'm just curious. So, you know, what should
my next steps be in order to continue to support my child? I have more than a thousand in my emergency
fund. I'm nervous about putting it down to a thousand. Yeah. How much is in your emergency fund?
I have six thousand right now. Six thousand. Okay. And you're paying an extra thousand. So
on track, you know, you're in a half or so, you'll have that Hewak paid off.
Yeah. Yes. Yeah. I mean, I would say if there's, I mean, that's a great, I mean, to be a single mom
working. Yeah. There's a different level of stress there. Yeah. You're doing, I think you're doing
great. Holly, if there's anything extra that you can put towards it at any capacity, obviously,
the faster, the better. But you're killing a girl. Yeah. Yeah. I think you're doing great. Yeah.
I think you're going to feel the motivation on your own to find ways to get more and more income
going towards that. And it's going to be knocked out before you know it.
Hey guys, Dave Ramsey here every day on this show, we help people work through real money problems
and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey.
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All right, our Ramsey show a scripture in quote of the day, proverbs three verses five through
six, trust in the Lord with all your heart and lean not to your own understanding and all your
ways acknowledge him. He shall direct your paths. Dolly Parton said, if you don't like the road
you're walking, start paving another one. Oh, pretty good, pretty good. Classic. Man, I feel like
I'm walking on air after James gave us that nice encouragement. James, I don't know how to act.
And then we got Dolly Parton and proverbs just we're going to end the show well. I know. I wanted
him to come on. He didn't. All right, Curtis is in Richmond, Virginia. What's up, Curtis?
Hi, how are you ladies doing this afternoon? Excellent. How can we help?
Well, let me start by 2025 was a really bad year for me. I'm sorry.
In May, I lost my life. December, I lost my dad. I had been his caregiver for a few years.
When I when I need to become his caregiver, I left my job because I was getting a stipend
to take out, take care of him. Plus, my wife had a very good job and it was her idea for me to
bring him into the house. I'll take care of him. Do what need to be done because that's what I
felt like I was led to do. Sorry. Fast forward to now, the savings that I had
between my wife's passing and now my dad's has been eaten up by going back and forth to the hospital.
Yeah, a few expenses trying to catch up on girls. They'll have found myself to be about 13,000
dollars in debt. And that's after paying down almost 70,000. Wow. Okay. I have no job now.
And I'm trying to find one, but I have found it very difficult. Yeah. What's your feel? Like
what's your expertise, Curtis? Well, I was military to begin with and prior to that, I was in sales.
Okay. And how long were you out of the workforce taking care of your dad? How many years?
Eight years. Oh, okay. A while. Yeah. Yeah. Yeah. And how old are you? 49. 49. Okay.
Okay. So there's no, just to get a better picture, there's no savings anywhere to speak of. Do you
have anything that was put away while you were in the military? Anything like that? No, I've blown
through all of it. Okay. She dad, dad ended up with dementia with Alzheimer's. Okay. I'm sorry.
Sorry. And Trish, who was unexpected, she passed with a massive heart attack. Oh my gosh, Curtis.
Oh, I'm so sorry. She's really tough. Yeah. I'm really hard to hear. I'm trying to stay positive.
I'm trying to put it in God's hands. Yes. But you're also going to need to do. It's also grieving the
life that you thought you were going to have for the next 30 years. You know, I mean, it's life looks
completely different. And as Dr. John Deloney always says, it's almost like you close, not even a
chapter of a book, but a whole book. Yeah. And you almost have to open up a whole new one and start
rewriting your story. And you know, the hard thing is is, you know, you're 49. And so it's hard
because you have a long life ahead of you. And it's also a positive thing because I think you
can make some incredible changes and start, you know, it's a new life that you have to look at.
It's not even rebuilding the life that you had. It is, it's looking ahead and saying there's
going to be a new Curtis. And what do I have to do now for myself to not only sustain,
but what's good for me and finding some, some positive small wins in the midst of this grief
is not only going to help you financially, Curtis, but I also think in who you are and kind of
going back to, yeah, finding, finding a new purpose and how to contribute to the world. And that's
that's a hard, a hard thing to do. I do know at the end of the call that we will give you
King Coleman's book, find the work you're wired to do because there's still a whole second chapter
Curtis of your life to be, to be written, you know. Yeah, I agree. This is kind of like a
awareness, this is like a rebirth for you. And in many ways that can be scary and daunting,
but in other ways, it can be really interesting and can be exciting after enough time passes. And you
can see it as an opportunity to start something fresh and new. And I actually think that that might
end up being the case career wise. So I'd be spending some time thinking about if I could do
anything, and I know when King coaches people, he kind of starts with that. If I could do anything,
what would it be? And then kind of just run that down. And that would kind of be, if I were in
your shoes, I think that that would be a journal prompt for me every day is if I could do anything I
wanted to do today with my career, with my talents, what would it be? And I would just spend time
thinking about that because I think sometimes in life, we don't give ourselves, there's always
something going on and we do what we have to do, we do what we need to do, but very rarely do we
always do the things that we want to do. So I think that that would be a really good exercise for you.
And I think it's just going to take time. Yeah, absolutely. Yeah, but anything that you can do
today to start bringing in and come, and it of course won't be your dream job, but I think
getting up, having a routine, having a schedule, having something that you're doing, I think does
start to re-energize you. And there's a level of dignity that's there and getting a paycheck
and actually start seeing progress in some part of life. And this would be the more financial
side part, but it can be powerful when you start actually getting up and doing something because
it could be so easy just to not because you have so much. And don't hesitate to call us, call us
back if you feel like you're getting that traction and then you're saying, okay, I'm making this
money. Now what do I do with it? The good news is 13,000 in debt, once you start having any income
come in, you're going to realize, oh, I can knock that out. That's right. That's really fairly
quickly. And I have no doubt that you're going to do that. I just think the fog needs to clear
a little bit more for you to get your bearings in this. Thank you for the call. All right, let's go
straight to Nicole and Louisville Kentucky. Nicole, we're right up against the clock. How can we help
today? Thank you so much for taking my call. I am in my early 40s and my husband is in his early 50s.
We've both grown up and lived our entire lives in the same location and we're really interested
in starting a new adventure. Wow. We have found a place that we want to move to, but we want to
rent their first before we sell our current home. We are debt free except for that mortgage.
We do have some older kids who are currently renting and since we have family nearby who could
also support them, we want to know if renting our house to them would be life.
Probably not because you guys will probably sell it in a year, right? If you're wanting to keep it
just for a short term until you find a house that you guys want to buy in the new location, right?
If the new location is as much of a fit as we hope it is, yes. Okay, but if it's not, you'll come back home
and want to live in the house that you're in, is that what you're saying? Yes. Okay.
Hard to give up the interest rate that we have until we know we have to. Oh, okay. Interesting.
What type, I mean, what would you do for work? Are your jobs, you know, our job,
their removal, so we can, yes, we can do the exact same things we're doing now there. Okay,
would you guys be able to support the rents of the new place and then for some reason,
if something goes haywire with family? I mean, would that put you in a financial bind?
I don't think so. We've tried to use the 25% of our income to say, like, what could we
afford in rent plus covering the mortgage if we had to, but of course, you know, anybody
helping cover the mortgage while we're gone would help. I normally am not a fan of that, but since
it's still a question mark of if you're going to stay in the new location, I would be okay with
you keeping it and doing a one year very clearly communicated a one year rent agreement.
Two people you know, yes, which means that I can go haywire. That's why I want a lot of margin
with you financially, because I don't want to surround any kind of relationship and it get
weird. But yeah, but if you have that one year and then you guys, if you want to stay in the
new location, that house you need to sell it. Nicole, I don't care what the interest rate is,
you need to sell it and move your life to the new, or if the new location didn't work out,
then you move back home. But I would just do it for one calendar year and that's it.
Yeah, I like that idea and it's good that you have the kids because they seem like they'd be
just the right person to rent the house. Thank you for the call. All right, guys, thanks for
hanging out with us. Remember, there is ultimately only one way to financial peace and that's
to walk daily with the Prince of Peace, Christ Jesus.
The Ramsey Show



