The Hard Road Leads to Freedom

0:00Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio. This is the Ramsey Show. I'm Rachel Cruz hosting this hour with Jade Warshaw and we are taking your calls about life and money, so give us a call at AAA8255-225. First step we have Sarah in Cleveland, Ohio. Hi Sarah, welcome to the show. Hi how are you? Hi we're doing great, how can we help today? So my question is whether or not chapter 13 bankruptcy is the only way or I guess the best way for my husband and I to get out of substantial debt. Okay what's going on? What are your numbers? So over the last three to five years we've basically accumulated 62,000 of credit card

1:03debt, 28,000 in loans between house repairs and personal loans. We have a $210,000 mortgage balance, we have about $150,000 of student loans and car leases that are about $11,000 annually. Okay. Can you tell me the very first one you said in that list first I didn't get that one written down. Credit card is about 62,000. 62, okay. Oh my goodness, what happened that you guys got to this extent? I mean obviously the student loans speak for themselves but the 62,000 in credit cards, the 28,000 and other personal loans. What happened? Did somebody lose a job? Well the long story short is we had our son about three and a half years ago and I had a pretty bad postpartum depression. We moved back to with my parents and sold our house and the plan was to save money and have

2:03help but I was not emotionally feasible. So after about eight months we bought the first house and we could get an offer accepted on and pretty much put most of our savings down which made our housing go more than double because we had a beautiful COVID interest rate beforehand. So pretty much our expenses doubled from there and then just things just getting out of hand in terms of the cost of living and I wouldn't say keeping up with the Joneses but I would just say living living like we still had half the expenses. Okay. And you still have that house? You're still in that same house? Yes. We just bought it about two and a half, three years ago. What do you guys make of your Sarah? Our net income is 120,000. Okay. What percentage of your take home pay is that mortgage? Our mortgage is about $1800 a month. And you take home how much?

3:06After tax? monthly it's about $10,000 after tax. Okay so that's not a problem. Yeah, that's terrible. The mortgage is not the problem. Have you started the student loans? It's $150,000 are you paying on those or have you not been touching those? We are on income driven repayment plans right now. We pay about 200 a month for those. And then the thing that's really killing us is about $2,800, $2,900 of minimum payments between all the credit cards and like the personal loans. 2100 and minimums. Okay. Okay. 29. 29. Okay. Yeah. And are you guys doing anything extra on the side of this point? Are you working extra hours? Are you working overtime? Tell me about your free time. Currently not really. We both work in business and finance. So about half the year my husband works probably 70 hours a week so he's not able to take on extra work.

4:07Okay. And I commute to work about an hour. So there's time lost there. I started to do some bookkeeping on the side but that's not really lucrative. Right. So here's. And we do have a three year old. Yeah you do. Here's where I'm at. I'm at you can take the journey here and really change who you all are and who you are and how you operate as a family at a core level and clean this up. And I think it would be good for you. What I'm hearing right now Sarah is I understand how you got here. I'm not a fan of how you got here but I understand how you got here but I'm still hearing a lot of reasons why nothing can change. And I think that if you don't address that that's going to be the hardest part for you. You've got to get to this point where you're like I don't care what it takes. I'm going to fix this. I don't care if I'm exhausted. I don't care if I have to pick different side jobs that I hate because they make more. I don't care if we have to start looking for jobs.

5:10I don't care if we have to sell the house. I don't care. I just want to be free. And right now I feel like you're still well we can't do that because we have to. Well we can't. And because of this. And the 150 student loans are they government loans or they private? They're federal. Okay so they're not being corruptible. So you still have a hundred and fifty thousand dollars of debt. And so I'm with Jade and I'm sitting next to somebody who paid off close to half a million. You guys are at about that 250 to 70 mark. And I mean Sarah it's going to take you guys probably four to five years. I'm going to take a long time to get out of this mess. What Jade is saying is I don't know there's a level of could you take the right and I wouldn't say easy route because bankruptcies hard that's going to affect the rest of your life right if you end up doing that route. Just take that and be done or do you take some level of responsibility of it's been a hard road and life has thrown at us a lot of things.

6:14But we also put our names on some of this. We did walk into it maybe for difficult reasons but we did walk into this and choose this. And there's something that changes and Jade you can speak to this because you and Sam I mean walk this route completely of this amount of years right this isn't you know Sarah unfortunately it's not a 18 month journey if I say suck it up for a year and you guys I mean this would be a this is a this is a this is a marathon. So what we want to do have you ever you know have you played the game Jenga and you have to pull out the block and put it on top and you have to test the block first to see if it'll even move. I feel like what we need to do with this stack of debt is test and see which block we can even move to get out of the way and I'm looking at these car leases that's one block that I think has enough movement to get rid of it and I'm looking at the mortgage I wonder if it's better for you guys I don't know if there's equity there I wonder if it's better for you guys to sell and rent for a while looking at what you're paying a month there could be something there do you have equity.

7:15I think it's about 65,000 okay and then tell me about the car leases. The car leases one is actually up in December which if we were going to do bankruptcy we were only going to file myself like my half I guess first I guess we're just scared that if we both do it then if something what names of what debt what debt is in your names Sarah about half of the credit card of personal on yes we are only doing on the mortgage and the one loan for the basement repair and see that even that for me feels like it's certainly not the right move because you're just not clearing enough and my mind you're not going to be able to clear enough of this debt. You're making a worse situation. Yes and you know depending on income and everything they may put you on a repayment plan you know some of this depending on which bankruptcy chapter you guys pursue or that you're eligible for right some of the time you're back on a payment you're going to end up paying something at some point you might as well pay to get out of debt and avoid bankruptcy.

8:15Yeah I agree with that so look at these car leases if you know if you have them and you can say obviously the one you're out in December that's good do not go back in start saving up for a cash card now I would say and then for the other one figure out what it costs to just you know buy the car out and then turn around and get a loan for that and then turn around and sell that car and then yeah say but cash for next car so even with the credit card if if some of it goes it's a collections you can negotiate that too down to possibly but call us back Sarah if you need us I'm so sorry it's it's going to be a long road ahead but it's going to be the best road. If you're already enrolled in a Medicare plan you might think there's nothing else to do you're good to go wrong the fact is Medicare premiums networks prescription coverage and benefits can all change even if your health doesn't so doing nothing could cost you

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10:24next step we have melody in Orlando Florida hi welcome to the show hi Rachel and Jade um so I'm debt free and I make a good income and should be on baby steps fix where I'm paying off my mortgage early um I live in a new build community I moved in about two years ago and our HOA is suing the builder due to building defects and the major issue that they're looking at is water intrusion oh no obviously yeah which is obviously a huge problem being here in Florida with all the rain and the hurricane and I also only live in Florida because I want to be near my parents who are older and not in great health but Florida in general is not my long term plan so my question is I'm wondering if I should actually try to pay off my mortgage knowing that my house is probably robbing from the inside out and I'm also not going to be in Florida long term anyways one of

11:28the eight years that's on that is everyone experiencing the water intrusion is it just a few homes have you experienced any issue thus far I have experienced some issues and it does seem to be a problem across everyone's home to different degrees mine is more on the minor end but still pretty serious just in general we don't want any water intrusion and it's probably going to be a couple of years before this litigation even ends where we could start getting funds to fix it. What does it take to fix it do you know what the solution is and what it what it costs at least for you? No not yet because most of the issue seems to be the front of the so we live in town home so it's like the front the siding underneath it the water proofing has all been like nailed through so it's basically like a whole overhaul of the front of all of the buildings and it would have to be done like at the community level because we're telling them wow wow how much you have left on

12:32the mortgage. So I have about 500 K left on the mortgage I bought it two years ago for 65. Okay and you said that Florida is not going to be your long term you know home do you have a time frame on when you will probably move out will it be in like two years or like 10 years? I mean I hate to say it this way it's more dependent on how long my parents are going to be around. Yeah that's fair I know but they're in their 70s. Okay so there's a good chance it could be in it could be you 10 plus years yeah there's no real like yeah definitive you know. Sure yeah so if that's the case and if you think you're going to be probably not moving out of your current home didn't you'll be there for 10 years? Honestly like if I had to guess probably not like maybe five-ish years.

13:35Okay. Yeah because the ideal situation would be that the lawsuit goes through they have to pay up the you know the builder to whatever degree to fix whatever issue is going on so it's not coming out of your pocket and then you've been paying down the mortgage and then when you move there's some equity there and it's a fixed home it's a fixed town home right in that situation. So that's that's the ideal and and there's still something about putting money into a property like if you I don't know I'm kind of even thinking like are you wanting to move right now like if you get water damage and you know I'm taking mold and like who knows what else could grow in the mean times like the problems could do you feel good where you are? Well the thing is if I were to move I probably would take a loss on the house. I know you know Zillow's not always the most accurate but because it is a new community in his townhomes the most recent units just sold earlier this month

14:39so I kind of have a benchmark already but with the addition of the litigation and all the destructive testing that's happening it's probably not going to be easy to sell and let alone sell for at least what I paid for it. Tell us about the ones that did sell were those new construction that no one had lived in or were there people who had bought and were actually able to sell even with the water issue? No so those were the last few available units of the community. So you would be the first person trying to sell as an owner with the water damage. So the community has been open for like I think three or four years so there have been a couple units that have sold but not before the not after the litigation. Yeah right so now that everybody knows what the deal is you'd have to disclose that and that would be part of it. Yeah if I were in your shoes you know I think melody I would kind of I love that the HOA is going after this but I think I would kind of own

15:39this as my own thing as well. And I would have some people come out to my own townhouse and estimate give me estimates let me know and just kind of gather your own information because there may be gathering it from the perspective of the whole but there may be some things that you can do individually. I don't know but there might be and I'd want to know those numbers for myself. I'd want to know maybe there is something I can do that it doesn't have to be the whole line of townhomes right. I'd want that information and I'd want to know what that cost is. Yeah and get all the HOA guidelines too because sometimes with townhomes depending on I think the HOA of what you actually own right and what you can actually work on you know depends on the unit depends of the part of the neighborhood. I don't know I would be very specific about your townhoming yes is there any work you can do to mitigate some of this that could happen and and I would just want another person's professional opinion who's not in the middle of this because this isn't always the case but sometimes

16:40HOA is a traumatic. Sometimes sometimes it's like you don't even mean and I'm not saying there's not a problem. I'm sure there is there's been a lot of crappy builders you know you know that just throw up stuff and it's not good quality for sure that could definitely be the case but I would want to get an actual realistic perspective from an outside party who knows what they're talking about looking at my specific home not what everybody else is talking about you know what I mean and it could be worse it could be better I don't know but I think that news then that information will be able to help you make some good decisions on what needs fixing and what you can do to protect your asset so that when you do sell whether that's after your parents before your parents I mean you know whatever that situation is at least you've done what you can control. I agree. Right yeah our HOA guidelines do say that the basically it's like the whole entire front and like top of the units are HOA managed so I don't think I would be able to do anything independently. We do have engineers

17:44and construction folks hired by the HOA going around doing destructive testing on all the units so I have had them at my unit and they did discover already some water damage that they're trying to like sort of mitigate in the interim period but it's not a long-term solution right now. Yeah I've understood yeah well to answer your question I would just keep paying the more I mean I would just keep paying the payments and honestly what I might do with the extra money that you were going to put on the payment I might stack it up for repairs knowing that I might be the one that has to come out of pocket and some capacity to handle this and then I'd probably hold on to that until some sort of information is given if they're not going to pay then somebody's going to have to pay and it's probably going to be you guys to a certain extent so I want that money ready to go to my house level. It's almost like upping that emergency fund enough that when yeah when it has to happen and it has to get fixed and if it's coming out of your pocket you have the money for

18:46it. It's so frustrating though and that's the other part we say it all the time on the show but it's true homeownership is expensive things happen and sometimes it's stuff you can't control sometimes it is stuff that you control but the the expense of owning a home it is worth it in the long run and not that every house deals with every specific issue like melodies but but it's another plea that when you become a homeowner that you don't have debt that you have an emergency fund like you're in a good financial position to have margin as a homeowner so when things come up because they will that it's not a stress point that you know you can take care of it and um that I mean that's that's always our big push with home ownership because it's a lot.

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21:20don't have to go to solacehealth.com slash Ramsey or click the link in the description checking your eligibility only takes about two minutes that's S-O-L-A-C-E-Health.com slash Ramsey you must be 18 or older and remember advocates do not provide medical or legal advice. Well if you haven't heard Ramsey is taking over an entire cruise ship so we are doing the live like no one else cruise March 14th through at the 21st and 2027 and we are going to the Western Caribbean so it'll be Jamaica, Grand Cayman, Cosymouth, Bahamas so many great stops and I just want to tell you guys this is more than just a cruise this is really this like moment in time where you're trapped on a ship with all of your all of your fun Ramsey Ramsey people and there's a lot of learning

22:27and entertainment and enjoyment and great restaurants and coffee shops and bars and it is so much more than just you sailing individually on your own and just you know with your family and you're going solo this becomes kind of this full community aspect that is the fun unique part of this cruise so if you have paid off all of your debt but your house and you're on baby subs foreign beyond or maybe you've even hit baby subs 7 and you've paid off your house this cruise is for you so it's all inclusive pricing that starts at $2,105 per passenger so that's your cabin your food entertainment taxes and tips and all of it so this is such a unique week and we don't get to do it we've only done one one of these and it was so great that we are wanting to do it again and so there's a few cabins left but you guys make sure to sign up and go with us again the dates are March 14th through the 21st you can go to ramsey solutions dot com slash events get signed up book your cabin and join us on on a wonderful beautiful ship in March of 2027 all right let's go to Kevin and mobile

23:35alabama hi Kevin welcome to the show well thank you thank you thank you thank you for kicking my question absolutely how can we help today well my wife and I have a college freshman who just started in the fall we had done a good job of preparing him for college he's real responsible he does not owe any college tuition he did a great job scholastically got scholarships and and so we're paying for living expenses one of the the issues I have and and this is probably thanks for listening to your show I had always assumed that it would be beneficial for young people to begin building credit history so when he started in the fall I thought well hey I'll just adding as an authorize user on one of my credit card accounts and let him start charging just his minimal living expenses there on campus but after listening to the show and recognizing the the serious consequences that

24:39can arise with using credit cards my question is am I doing him a disservice teaching him to use a credit card to build credit and is credit building a credit file actually necessary to move forward in life well I gotta say I love I think you're really good dad because I think that you're really thinking through what's best for him and it sounds like you're really open and so Rachel what I'm hearing is somebody who is wanting to build the like good habits good financial habits and if we take that as the through line and we go okay what's what's the most healthy financial habit it's being able to live on less than you make it's being able to delay gratification for the things that we want it's being able to write kind of control control our behavior and make sure that our money is behaving and not the opposite way around and our money controlling us so I think that's what you're after and if that's the case then I would say that a credit card would not be

25:46even necessary for him if those things that we just discussed are in fact true about him because he would be able to use cash to do those things and he does he does have a debit card that he could use instead you know obviously as I said earlier I would assume that using a debit card is not going to build any transactional credit history but if that is something that is really unnecessary and not worth the risk then I will encourage him to shred that card and just use cash well yeah and to know Kevin the reason you know that all of this whole debt product in the first place you know pushes messages like this because that's a very normal way of thinking every you know a lot of people have to build my credit that's a very normal statement we hear and as you look at the credit score and how it's actually calculated right it all has to do with debt right if you pay the debt on time the types of debt you have if you're accumulating new debt like it's that score and the

26:48reason the main reason you use that score is to go into more debt right so he would need a score if he's going to go get car loans if he's going to get personal loans a small business loan you know if he's going to go into a life of debts then yes that score wouldn't be necessary but with J and I you know with Jade laid out it was beautiful to say if you're choosing a debt-free life where you save up and pay for things where you actually say no to the whole debt industry even things like a car then there's really no reason for that credit score the mortgage is the one type of debt that we won't yell at you for and so you can actually get a mortgage still without a credit score it's called manual underwriting and you can go through that process and still own a home and so really that credit score man it has been it has been inflated so much of the importance of it but if you kind of choose the weird path of life like what we teach you on the Ramsey show and you choose a life without debt you really you don't need it now there are moments maybe employers or

27:53you know even with like cell phone companies they may pull his credit report to see any history of how he has paid but there just really won't be anything on that credit report and it doesn't necessarily ding you he may have to fill out an extra form or two but that would be the only time that you kind of run into a situation outside of debt of why people you know try to have great credit history and all of that so if anything Kevin you know you he could even freeze his credit and so that you know make sure that no identity you know no one's taking debt out of his name and that you know even identity theft and all of that that can take care of that so that's that's probably the the card I would play with him is that yeah why you don't need it explain it to him and creating these habits in college is so healthy like for an 18 year old to be budgeting the money that he has and spending within his means is absolutely amazing yeah Kevin and I would just add one more layer to that because I think Rachel I mean what she's saying is exactly right and even the fact that

28:55just reframing that a zero credit score or an indeterminable credit score in the market is just as effective as a high credit score there's no negative to it and Rachel talked about the home but really there's kind of three key areas that most people think I need credit for this most people thought they needed credit to buy a home which Rachel mentioned a lot of people think they need it for a car and they think they need it for an apartment and so just kind of getting ahead of those and being able to talk with them and just tell them hey when you go to your apartment just know you might have to pay a little bit more down for a first and last month's rent just know that they're going to ask for other trade lines your cell phones maybe things like your insurance payments so being ready to be able to show those types of things and just so he knows what to expect with a car right one of the big things about this is now we're saving up and we're paying cash for cars and just by him doing that Rachel yeah he will be so ahead of the average American never getting into that car loan cycle so that's how this works and I think when people have that information ahead

29:59of time it kind of just counteracts some of those things that we come up against when it's time to buy an apartment it's time to buy a car that's right skating ahead of that yes no absolutely because you know there there is a life navigating without debt and and the positive side of it too even the numbers like even you know Kevin running if you go to Ramsey Solutions.com we have an investment calculator and I'm like just throw in with the average you know the average family owes I think right now $12,000 balance is on a credit card and it's like throw that in an investment calculator and instead of that being your reality here's what your reality could be you know in in 40 years and same with the car loan I mean the average car payment on a new car is up around $900 a month and if you just said hey what if you avoided that and debt was not part of your life and you invested a car payment every month instead of paying a car dealer or a bank what you could be so the you know the possibilities are endless so Kevin yeah just like Jade said at the top of the call you were such such a great dad and I think that's where parents can step in

31:00and it's not out of control or judgment with your kids but teach them and show them like hey here is what this looks like and even your own mistakes right I mean as parents I'm like man that's what a what a wonderful humbling thing for your kids but please learn this before because that's one line we get all the time as I wish I had known this stuff earlier absolutely if you can get it Kevin at your son's age oh my gosh to set him up for not only financially having peace but also emotionally around money that is such a gift okay George we hear from so many people that are trying to live out to the Ramsey plan right they're getting out of debt and everything but the hard thing is there's not many banks out there that actually support the way we teach you but a handle money yeah most banks they don't want you to win with money so they charge a bunch of nuisance fees there's all this fine print and worst of all

32:01they are pushing debt products at you non-stop yes but the good thing is is that fair winds isn't like most banks they're not like the other guys they are not pushing debt and they actually want you to win with the baby steps and so what's great too is they created the smart bundle for Ramsey fans which includes a high-yield savings account and no monthly fee checking which is huge because it's rare to have a checking account tied to a high-yield savings account you can get all of that with fair winds and for the nerds out there you can have a ten different high-yield savings accounts for different goals so you got your emergency fund the car upgrade fund the vacation fund the world is your oyster so beautiful and check out the debit card the new one the live like no one else debit card it's so beautiful we that's a conversation starter it's so good well and when you swipe or you tap you know every time you take it out of your wallet you're remembering that you are living like no one else and you're being intentional with your money i've been using fair winds for months and months now i love their features the app the customer service it is all so good and so aligned with the Ramsey principles absolutely so y'all we both bank at fair winds and we love their

33:04commitment to Ramsey values so check it out you can get that smart bundle we're going to drop a link in the description or you can go to fair winds dot org slash ramsey today that's right that's fair winds dot org slash ramsey insured by the ncu a well if you're new here like many of our listeners that have joined even in the past couple of months you know when filter that we use to answer a lot of our money questions on the show is through the seven baby steps and so this these seven steps really take you from paycheck to pay check living broke no savings debt all of it to going through it for paying off debt getting an emergency fund a fully funded emergency fund your funding retirement and kids college your paying your house off early like getting you through that money process is the seven baby steps so if you

34:07want to check it out make sure you do there's we'll put a link down below if you're listening on podcast or watching on YouTube because I mean it's a pretty simple you read them and you're like all right pretty simple to understand sometimes hard to do because it can be a long it can be a long journey but it really does have you get a grip on your money and actually have control over it actually have a plan for your income and the fastest way of building wealth long term it's this so check it out the Ramsey baby steps all right let's go to Lonnie in Austin Texas hi welcome to the show hi how you doing thanks for taking my call absolutely how can we help so i've been a day based my whole life and I recently got busy with it and I have my thousand dollar emergency fund good and I was tackling my snowballs and while I was doing that I had a seventeen thousand dollars on the credit card and the the monthly payments got so bad that I just kind of stopped paying them I figured I'd pay it later and I didn't touch with them and so then when

35:12I did that they put a lawsuit against me they gave me to a debt collector and went to a law firm and they said that I had a lawsuit and they gave me all the pay for working everything somebody came and I said handed me the papers and so I called them and I got a settle down to eight thousand dollars and we bet I gave them all the the numbers that they asked for my routing information all the stuff from my bank oh no no and they removed like you know they're supposed to you know drafted out of my account the eight thousand dollars and it never moved so then I called them it's that they're for like two weeks and I called them back and and they said that I had a zero balance and so I was like okay and then I got a receipt in the mail saying that I had a zero balance and they wouldn't go after the rest of the money that I owed because we had eight thousand dollars agreement so then I said there for another two weeks nothing happened and then they called me and telling me like I had never even spoke to them they said that I had a lawsuit pending against me

36:13and I owed seventeen thousand dollars and I'm not sure if they want to talk to the e-mob they're just I thought it was good they're just idiots Lonnie they they they they messed up they clearly got you confused with somebody else unfortunately it sounds like well I do I did have the the seventeen thousand dollar thing and the they might have pulled somebody else's money out of their account I'm not sure what happened but it's still sitting there and it's still saying that I will lawsuit and I gave them all the routing information again to drafted out of my account still sitting there so my question is should I like go take some of that money and go for a higher lawyer or I don't think so it sounds like I just want to make sure I'm following your story you got it settled for eight thousand you sent them your bank account for them to clear it they didn't clear it but they did send you something that said it was free and clear now they're coming back saying oops no it's not free and clear you actually still owe it so what I would do is I would get on the phone and I would call several times until I feel like I'm speaking to somebody with a working brain and when I feel like I am then I'm going

37:17to send them probably a money order for the difference yes cashiers chat do not give them any more access to your bank account okay and that way you've taken it into your own hands to make sure it's paid and then I'd want written receipt again that it's been cleared with the new date on it when it was clear and yeah yeah so go reinnegotiate again back down to the eight thousand if you can and sometimes they they are going to need you to have that amount of money to go ahead and just make the payments which you said you still have in that account so what I would do is actually get them to email you like a transcript of your conversation or at least in writing say yes we are going to settle this for eight thousand dollars so you have it on the front end and then send them the cashiers check and then ask them to make sure that they send you a receipt for after you know that they have collected your money so that's what I would do that's the rest of what I did whenever they when we settle the deal and ask from my account if it can you do this today and I'm

38:22saying no not until you send me a piece of paper saying that this will be settled for the eight thousand they sent that yeah and then after they talk to them they send me a receipt saying that's their old balance and then they're calling back and the guy that does handling my case or whatever is with real arrogant and act like I owe him money personally and right right right well but they never took money out of your account right so you haven't lost any money correct right so here's how to go back through the hoops again of renegotiating even send them a copy of that first you know saying yeah the first deal that you made with them yeah it is it's it's an absolute round about oh situation and and it kind of ends up being your part-time job Lonnie unfortunately because it is you're dealing with yeah yep so obnoxious um but you did the right thing they screwed up on their end which just means you're just gonna have this a little bit longer till you fix it again and just keep trying and honestly by the end of it all I bet that your debt your bad debt has now been so it'll be sold to another company because that collection company is gonna sell it off so maybe

39:23you'll get it settled for a little cheaper yeah I know it's just gonna go round and around and so until it's until it is a done deal sadly this is part of the gig of getting out of debt but you know I mean because of your situation and because of what they've chosen to negotiate what a great thing that seventeen went down to eight and we'll take it you know that's a win and when you do that cashiers check keep that receipt that you know that you paid them because even if these are bozos so they may never send you the receipt on their end but at least you know you did it and you have a lot of way forever that's right all right let's go to Pete and Jacksonville Florida high Pete welcome to the show hi my husband had going for employment so you get me oh perfect what's your name I'm gonna go with patty patty perfect thanks patty how can we help my husband and I are looking at buying a lake home second home we are debt free we inherited a large sum of money and we're just wondering if we should pull to pay for the lake home out of that money or if we should borrow money to get a short-term mortgage as to keep our tax burden down

40:29interesting what do you how much is the amount that you received in the inheritance um two point nine wow how much is the lake house uh eight hundred and fifty okay great so y'all guys will have two million left um no that's just what we oh that was just the inheritor okay how much is your net worth total five million good for you guys and you're wanting to take the mortgage out so that you're not what what was the thing about the tax bracket what did you say we're you would you would have to take the money out of our pile if our investments to pay for the home which we can do but we're just wondering it's gonna boost this up into the 24 or more tax bracket and we're just wondering if we take out a mortgage then maybe we could stay in a lower tax bracket and just pay it off over time if that's yeah well the amount you would save on taxes is probably gonna be smaller than the interest you're gonna end up paying on a mortgage over time

41:34okay so i i mean i would run those numbers but no i mean i would tell you just pay for it patty just pay for it absolutely and if you're in that yeah i mean that's because you're gonna have wait if you pull the money out of these investments at any point you're gonna have to pay taxes on them and so yeah it's probably gonna be a lump sum of it and it's not gonna feel great but also um no but but also like it's it is what it is like there's a part of our life of you know living in America that i'm like it it is that that is the bracket and and to play the game with the government and the mortgage companies to try to get around it usually at the end of the day the consumers the one that ends up paying more yeah yeah well don't don't here's the thing though it is bittersweet but it's also it's like mom money mo problems it's one of those things where it's like it's a blessing to have this problem because having this problem means you have a bunch of money and so it's kind of all in the way you look at it you don't want taxes to to to shield the fact that

42:35this is an incredible blessing that you can actually pull yeah $850,000 out of an account and pay for a housing cash that's the business right there which is beautiful yeah and just staying debt free the whole time owning it's not messing with everything i'm telling you for in the long term just buy it just buy it buy it buy the property you guys have worked hard you've done so well patty as part of this was an inheritance but also you guys had some of your own hard earned money which is wonderful and this is why you do it for moments like this so just keep keep moving forward get the lake cows have fun and joy it's and we all don't care for taxes hey i want to talk to you for a second about love and not love like in Titanic or something i mean responsible love the kind of love that moves you to take care of the people closest to you and one of the most important ways to show that kind of love is by having term life insurance

43:39if you have anyone depending on you a spouse kids anyone you need term life insurance term life insurance gives your family real protection if the unthinkable happens so they can spend their time grieving and not worrying about how the bills are going to get paid zander is a broker who works for you shopping the top companies to find the right coverage options for your needs and your budget in many cases there are options available with no medical exam and instant approval my wife and i had term life insurance through zander for years long before i worked at ramsi because we trust them getting term life insurance is a way of saying i love you when you can no longer say it yourself go to zander.com or call 1-800-356-4282 to find the coverage that fits your family welcome back to the ramsi show in the fair one's credit union studio i'm ritual crews at hosting

44:42this hour chaed war saw and we are taking your questions at triplate 825-225 first up we have Jessica in new york city hi Jessica welcome to the show hi guys thanks for having me how are you hi we're doing great how can we help yeah so i'm just calling so a lot of times i feel like people call and know what you're going to say but i've gotten myself into a little bit of a pickle um i'll start out with what i'm looking for financial advice and how to get back up on my feet or even survive my current situation so i've been in a four and a half year relationship with them and who makes about nine hundred thousand dollars in health care and i found out about five months ago that he was married um he's been married for seven years and i didn't know this he claims that he has been afraid of the financial consequences of the getting a divorce um but

45:42you know actively seeing his wife there was and then there was me so he is now in the process of getting a divorce which is costing him um like seven figures and alimony and so now i decided to give him a second chance and i'm just struggling with living with the situation um the betrayal and stuff but also i'm struggling if i were to leave um the situation too i can't i don't know how to get back up on my feet because i move cross country to be with him i'm four months pregnant and i i'm taking care of his family and um also i filed for bankruptcy last year because i didn't want to enter a marriage with a bunch of baggage and a lot of that debt was um after my mom died i had bought a timeshare and like it's about forty thousand dollars and less than learned um so i'm debating whether i should stay and see it through because now we're living to pay check

46:42to pay check with this divorce and just the mental baggage of that and i'm also contemplating leaving the relationship but where do i start i used to make you know one hundred fifty thousand now i make thirty thousand after taxes so i don't know i just want some advice on and any of the above where are you now are you still living together like what's the current today's situation so we are still living together as a couple um and we have fondant the day stuff but this um financial situation and it's not finalized with his previous ex yet um through the legal system so we're living a normal life i take care of his family why property help me understand that part when you set you take care of his family was that a health thing was that what what does that mean so parents siblings aunts and uncles they have a lot of like uh appointments and rental properties and i am the rental manager for

47:45seven properties and um infancy you work you work in the family business and that's what earns you the thirty thousand i do not for free i make thirty thousand at a remote job so you manage seven properties for his family for free yes girl friend all my builder paid for but yeah so that's the that's the exchange if you manage these properties you live with him and he'll pay for everything is that what i'm understanding i'm not judging i'm just trying to understand that's the current situation i pay my student loans and um health insurance very small stuff myself but Jessica that's what i do you you and danger girl like you got you got to get out of this like this is this is so unhealthy for you financially it is so unsafe for you because everything hinges and you're feeling that it's like the golden handcuffs yes of a of a relationship right that you've

48:46kind of built these systems in place where he has so much control over you and i think that's why you laid it out that way because you're right and it shouldn't stop you but you are right if you when you let me say when you leave him you are going to be starting over and that feels really scary it does and it is but it doesn't mean that you can't do it you are a fully grown woman you are smart you're capable there's no reason that you can't go into the world and you know increase your income from 30k up you've just proven you can be a property manager there's nothing capability wise keeping you from going to the world into the world standing on your own two feet yeah and i i just feel like he you know there's this devil and my shoulder telling me that he is still willing to marry me and not sign a prenat but i almost want to see that through and have them sign a prenat he was deceptive he proved that he could be a deceptive person for seven and a half years that tells me

49:52something he's shown you something about himself don't ignore that even though you experienced it different from what his wife experienced you had two separate experiences it was geared towards you don't let that make you feel like you've won some prize here he's been deceptive for seven years mm-hmm how many had a yeah had a whole other whole other life and if you can function in that mentality for seven years for him and he's not done anything different right gone to Arizona to a to a rehab center for six months together or something that there's but he it doesn't sound like i mean it sounds like he's that he is the same the same person so from the relational standpoint i don't know how you how you trust someone after you find out that he he has he's he had a wife and kids and stuff you know and so that's the relational side and then Jessica i mean and then and then the baby would have sweet baby but man

50:54that adds up for sure element it makes you feel like you have to stay in it and all of this too and so and i don't know what the laws are but you guys aren't married and so it's not like there's going to be necessarily i think state by state there may be different ways you can kind of pick through the law to see if there's anything from a common marriage perspective right because you guys have been to get anything from him yeah to help with the baby that would be helpful um but yeah i would be creating an independent solo life Jessica of how you would function out in the real world and i would start those habits pretty soon just to start before you actually unless you're you know unless it's unless it's happening tomorrow yeah start you know building some some skills around you for you to hold yourself up do you have family anywhere um bear craft country where are they i don't know what's going on are you close it well in the Midwest

51:55okay are you close with them at all oh yes my my dad and his side and my aunts and uncles okay yeah we i call them a lot and but they don't know about this man Jessica i maybe go i maybe go in home yeah i think you do with my baby and and i'm going to start a life i'm going to start i i mean and i oh and i'm very very aware of jay and i set behind this desk and we say sure sure you are where you are and the consequences of what we say um and the life that you have to build it takes year i mean that that is a big ask from us to you of what we would what we would advise you to do but i can't let this blind you from what's right like you can't do the reality of the financial comfort blind you from what you know you have to do yes and and i think Jessica five years from now has a better shot at creating a better life as she's dependent upon Jessica than a man who's lied to you for seven years and had another family

53:08so if you're waiting for rates to drop before you buy a home here's what nobody tells you when rates fall every buyer who's been sitting on the sidelines makes their move at the same time you do that means more competition higher prices bidding wars all that that's why i tell people to talk to church home mortgage before they do anything else church Hill gives you a strategy so you're not at the mercy of the market they can show you what you can afford not just what the bank will approve and with their certified home buyer program your financing is completely secured before you shop which means when rates drop and everyone rushes in you're already ahead of the crowd you're not scrambling for pre approval while the house goes to someone else my husband and i bought both of our homes with church Hill and having a real strategy not just a rate we were waiting for

54:10made us ready when it really mattered so start your search with church Hill click the link in the description or go to churchillmorgage.com slash ramsie offer for an exclusive ramsie audience offer churchillmorgage.com slash ramsie offer you next up we have Katie and miniapolis hi Katie welcome to the show hi thank you so much for having me absolutely how can we help i am curious if our family should focus on increasing our down payment enough to make a $550,000 dollar home affordable or if that would be stretching beyond what we can realistically afford and i'm also wondering if there's some pride or lifestyle inflation influencing what i want

55:13versus what we actually need oh great questions okay so how much do you guys have saved for the home now um currently we are working through baby step number two okay um but we are we're looking ahead and it's kind of feeling like the light at the end of the tunnel is not as bright because now i'm looking at the numbers and i can't realistically afford what i actually want what do you want what's what's the amount of the home that you think would fit your family so um what what i want is roughly a $550,000 home okay and we do a lot of hosting um and we started our our debt-free journey this this past year like in January we started um and we downsize significantly okay um and i'm i'm itching to get out now um and so we my husband we're a single income family home

56:19and my husband brings home about 103,000 a year okay um and what hits your account every month Katie yeah what hits every month just after tax number okay so he actually gets three large bonuses a year and so we we are 400 what i'm sorry we are $4,400 weekly and then but with his bonus if i include his bonus amounts that's $8,650 a month total yes total when does he get the bonuses is it at the end of the year or how are they paid out or do they pay out monthly no they pay out in three large sums um within the first six months of the year understood so you could essentially take that and disperse it throughout the year and kind of get ahead of it like that okay i understand so we're looking at we could do that we're looking at when the time comes it assuming his pay is

57:24just the same we are looking for a payment that's no more than 25% of your take home so if we take the $8,650 and we divide that by four we don't want to spend any more than $2,162 on this mortgage if that's the after tax amount right okay so then and go ahead i was just i'm i'm trying to see if we just keep our heads down and keep saving for a larger down payment so that we can get the mortgage at a more comfortable amount if that's a good plan or if i just really need to really live in i think you may i mean it just depends on where you see your income going because i'm just running the numbers here and if they want to pull it up i i i've just got you in for a $550,000 mortgage and right now i just guess i put in 300,000 down let's just pretend

58:2515 year fixed let's keep it at 6.5 even though mortgage rates have been moving lately and that puts you at everything all in and this is just a guess on property taxes and homeowner insurance but that puts them Rachel at 2907 so we're already above where you want to be and we've already put 300,000 down so there's part of me that it's not impossible that's a very long stretch of time i think i'd rather adjust my expectations to get into something yes i mean on a $100,000 income Katie i mean to for what you can afford month to month to enjoy life too like some of this is yes as you know making sure that there's enough other money to invest and all of it but it's also just to be able to live comfortably and not stress every single month that you don't have any money to take the kids to target real quick to get something you're gonna need just to have like margin to live life so yeah i think i think it's i think the expectation of the house is sadly probably gonna have to come down but think about this as a trade and and this is what's

59:31probably either going to give you some peace about it or cause you to switch lanes you have chosen that a value for you is to be a stay at home mom and so because of that we've got one income coming in and you know in america right now the cost of living is very high and so when you made that choice to stay home which is great you made that your number one priority financially that means that everything else kind of bows at that do you see what i'm saying and so if you look at they go you know what i'm getting what i really wanted out of life because of that i'm happy to you know scale back my home dreams you may be cool with that or it might cause you to re-look at that and go okay maybe i only want to stay at home for the first six years and then i want to go back to work so that i can have a little bit of both of these or maybe you go today i want to go back to right looking at all of this together and looking at it through values and priorities will help you to know what's most important to you yeah is this your first home Katie um we previously

1:00:33sold a home so we wouldn't like qualify for first home buyer um anything like that uh okay but my kids are like next year um my youngest will be going to school full time so that we're we're at a crossroads right now and i want to go back to work but i've also been out of the workforce for eight and a half years yeah yeah so i'm kind we're we're at a pivotal point right now trying to figure out exactly where we're going and how it going out yeah hold are you guys um my husband is 35 and i'm 28 28 okay how old are the kids um eight and four okay so great and we've paid off $50,000 this year my gosh we'll be out of debt and um by July i'm excellent i think you're wary okay we'll see two thousand left well done Katie but see listen if you if you did 50,000 in a year

1:01:33and if you guys did that for two years saved a hundred thousand right you could maybe find a i mean i don't i don't have the calculator in front of me right now but you know you could do a a four hundred and fifty thousand dollar house right with a hundred thousand day i don't know like they're i just wonder if there's um the amount you guys can save in three years right even a hundred and fifty thousand dollars i don't know i'm just i'm just um wondering what you guys can continue to sacrifice that's work because at home you know it is such a long term place i almost would take another year extra of my timeline to save a big chunk for a down payment to make it work right like that to me that would be that would be worth it yeah if you said yeah what Rachel said 350,000 or maybe a little bit more assuming you guys's income goes up and you save 150 well then you're right at it and again assuming that his income goes up it sounds like he's it could be a four hundred yeah it could be a four hundred thousand dollar house you know um but it's but it's

1:02:34tough our time yeah our timeline is that we should have a fifty one thousand dollar down payment by July of twenty twenty eight um so if we keep our heads down we could we could really get a large chunk i'm not sure if that's worth it or if like i said before if it's like a pride thing or i just need to really dial it in i don't think you have a choice i because you cannot do the five hundred and fifty thousand dollar house so that choice is made for you you simply cannot afford it so i think the choice is made for you and i do think if you lower slightly lower the expectation of the home allow that over time over the next three and a half years as you save his income is going to go up possibly you'll go back to work already that's looking a lot better for you Kate because you're going to be able to afford more home that way both of those two things happening so i would approach this as okay the next three to four years that time is going to pass regardless i'm going to do the best that i can with this time we're going to save up as much money as we can

1:03:38because the day is going to come like yeah if you keep doing that you're going to pile up money and pile up money and the day is going to come when you're going to be able to buy something yep and when you buy it hopefully you know you have it for for a quite a while right yep and so that that's it it's like kind of that short term sacrifice to get what you want for a longer term is worth it to me so i don't know if that helps Katie but oh i'm it's it's a frustrating it's a frustrating time we get it but also it's just adjusting expectations some and probably having to save a little bit longer hey guys it's Rachel Cruz if you're working the baby steps every major expense deserves a second look and health care is one of the biggest expenses in most families budgets and that is why i

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1:05:56everyone needs insurance but it can be really hard to find a pro who isn't just looking to make money and to find agents that actually know their stuff and so ramsi trusted insurance pros are vetted and coach to make sure that their market experts who have your best interest at heart so make sure ramsi solutions dot com slash coverage define the type of insurance that you're looking for and connect with a ramsi at trusted agent there all right let's go to Joel and he's in Canada hi Joel welcome to the show eight how's your going to date hi you were doing great how can we help so i run a concrete business and i've never took a loan in my life i bought my house glado i've never took a card you can never go well done thank you my question though is right now i have about two hundred thousand dollar a year growth profit but i know i could double that or more if i start playing the debt game and take a line of credit so all these big jobs

1:06:57i financially can't do from paying my labors for six months plus sometimes and financing all the materials so do you think it's worth taking extra risk to expand like company and play that game do you think it's worth it personally yes but it's putting a lot of risk on top yeah yeah and i think that's the that's the biggest factor and obviously it's the unknown and the way we coach small businesses here through entree leadership is really walking through them a process of where your business is you know where you own it outright and you're not having to play the debt game because when banks and payments and all of that enter into your life Joel you are you're playing a different game at that point and some people think it's worth it and they they they figured out and that's what they want to do and and it's what they do and then other people try to

1:08:01play that game and their entire life is full of stress because they've out leveraged themselves they jumped ahead um and had some expectations that never really came through that they thought because they were supposed to and all the numbers worked and everything was supposed to work and the reality is it didn't and so now they've put themselves in a situation that they could have easily avoided by going slower and going slow for an entrepreneur is not a very fun thing I know because you get energy from the growth and you're seeing all the success and all of it and you're like why not just magnify it um and I mean the the moment you do is the moment suddenly your business is in a completely different game and and it's not one that we recommend people playing there's just more peace and more control to go slower and move at the speed of cash that gives you a quality of life that is so much better and and it's not that you can't be successful

1:09:02it may take you a little bit longer but it's not saying that you can never get there and there may be some things you always will say no to there's stuff that are Ramsey that we could go and buy this techno or whatever and it's like no if we don't have the money we're not we're not going to have to say no we're have to figure out a different path a different way yeah um I do wonder Joel what is it um and let me see if I can answer this ask this question clearly what is the increase that you would need like monthly and operating costs to do what it is that you're trying to do it's hard to say the exact amount is different from jobs to jobs but a lot of these jobs if I'm quoting them I'd need to have to find that probably $200,000 so I'm wondering if this is something where we can go we need like a replenishable stash of money that is like kind of therefore when opportunities come we can go over there and say oh this job is worth it if we do it there's going to be such a gain from it and you're kind of so over the next however long it takes you you're working to kind of build up this money that's there to be able to go out and do other work

1:10:05and if if you're able to grow slowly doing it that way does that make sense because it's almost like you're saving it's like it's almost like you have savings that's ready for when these great opportunities come up that you can go do them and then when you do them you're replenishing that money plus you've earned money right something like that okay so now I've got a good amount in the bank but I always like to have a certain amount of this to have that comfort zone right how much is in the bank right now but I own a hundred thousand and I'm saying what if you went well above that and you had the money to do the work when it came like you had the money to explore different opportunities in cash when they come yeah that's definitely an option that this take me longer to build up to that point exactly and that's kind of what I wanted to like put legs to what Rachel was saying when we're saying build slowly it's not to say that this is the business it never changes but you're

1:11:08saving up the money to be able to do more over time versus you just taking out the $200,000 loan to do it let's save up 200,000 over time in the business in the business now we can afford to do more of these things that come our way as opportunities yeah and you know the calls we get Jade on the show of small business loans and oh it's scary thanks I go awry and it's like you know I got $200,000 in the business one I'm not saying it's gonna happen to you Joel but I mean it's just this element of like what are you gonna choose are you gonna choose a slower road but that's full of peace and autonomy eventually of over over what you need in the business and if you need to make a pivot you have the ability to because you own it all or is it that I have to be making payments and now I'm living a life where I'm attached to this banker and what is expected and it's just a totally it's a different game and it's one that we teach people to get out of and steer away from then head right into yeah absolutely and I mean there's something to be said for his whole life has

1:12:11been built on cash and look how successful he's been yes when you see a like best practices that are working for you like keep doing that yes that's right absolutely stay the course all right let's go to Christine and Connecticut hi welcome to the show hi Jaden Rachel how are you we're doing great how can we help so I remember that my parents never mentioned about having life insurance the minute we get married but I recently will recently I got off from those life insurance because it seems too good to be true but the problem is I don't know if I did the right decision and there was the national life group that I was in I am new to listening to Ramsey so I'm like learning and I guess you can say I am on baby step two I mean I am trying to pay off all my loans because I'm tired of it good for you what kind of what kind of insurance did you get do you say life will kind of life insurance whole life yeah it's like the what is it I think she's about the the when your

1:13:19spouse died and all that the death things um hold on um yeah because they said that I got pre-approved for 250 thousand dollars but I kind of seem like it's term life insurance Christine or is it like universal life or oh holy index universal life okay so it's a type of whole life policy okay um and so you got that and how much how much are you paying per month for this so since I started with Nana has been we were doing 200 and 200 so it's 400 in total month wow that's a lot yep so what yes it is so Christine what this is is they basically pair some type of this investment elements to the insurance okay so rule of thumb to remember is always keep your insurance and your investments separate the moment they combine them in a product like this you get a crappy rate of return and you pay a lot for not a lot I mean not a lot of coverage

1:14:23four hundred dollars in and you're only getting 250 thousand dollars versus if you did term life and let's say you got a 20 year policy um depending on your health and age and everything it's very inexpensive I mean oh I mean a fourth of what we're talking about here for way more coverage way more coverage because it's just insurance they're not trying to play this investment game on the side so what I would do is do you guys have kids okay so what I would do Christine is I would cancel the policy and you may have to pay some fees and all of it to to get out of it cancel it and then I want you to go to Zander insurance so go to zander dot com and look up a term a term life insurance policy okay term is your key 20 year and you can do that now if you had kids I'd say get the term first then cancel the universal but at this point I wouldn't worry about it because there's no kids involved um and I but I would do it all back to back so so get life insurance you guys need life insurance um but man get out of this this whole life because it is a

1:15:26crappy crappy product hey guys George Campbell here there are a lot of things you probably shouldn't ignore your check engine light that weird smell in your fridge the smoke detector that's been beeping for six days and maybe most importantly your phone bill the things we ignore have a funny way of costing us the most and your phone carrier is counting on you ignoring that over price bill month after month so they can keep charging you more and more but that's not the case with boost mobile you don't need to keep overpaying when you can pay just 25 bucks a month for boost mobile's unlimited plan and the best part is you can bring your phone keep your number and pay just 25 bucks a month forever that price will not go up it is inflation proof there's no contracts there's no hidden fees there's no catch and since most smartphones have an e-sim these days you can switch from the comfort of your home just like I did so it's okay to notice when you're paying more than you should but you

1:16:31shouldn't keep doing that stop overpaying for your phone service go to boost mobile dot com slash Ramsey and make the switch today that's boost mobile dot com slash Ramsey 25 dollars forever requires customers to remain active on boost mobile unlimited plan the Ramsey show question of the day is brought to you by why refi if your private student loans are in default and you're not sure what to do next why refi can help you explore refinancing options with low fixed rate and a payment plan that's based on what you can actually afford go to why refi dot com slash Ramsey that's the letter why are E FY dot com slash Ramsey may not be available in all states all right today's question comes from Gina in North Carolina she says at what point doesn't make financial sense to give up our three percent mortgage rate and move we're considering

1:17:35moving because the cost of the HOA is four hundred dollars a month it is doubled since we moved here five years ago and I anticipate it will continue to do so we would be moving to a home with a new mortgage interest rate of over six percent I know we're building equity if we stay but I feel like we can never really pay off our house if we continue to live in our current neighborhood okay so this is a good question and I'm thinking about what you're thinking about Gina HOA's yeah there's a unknown there and I would I feel you're paying on that so it's gone up $250 it started at $250 now you're at 400 it started at 200 now you're at 400 I would run some numbers on this though because if you move and now you're at six percent you might be paying that same amount basically do you see what I'm saying you're almost like just moving moving it from one area to another area but either way you're paying the $200 and rates just went back went up yes we did so we don't yeah so so playing the rate game yes and insurance could

1:18:40cause your payment to go up like anything that's right any of those all those things have the ability to adjust over time which is why we're such sticklers about that 25% rule yes to give you breathing room to be able to absorb some of this and the hope is that you're moving forward and the baby steps and you can absorb it in a better way as you go further throughout the baby steps as you're paying off your mortgage so I don't have all the details of our numbers but just looking at this I'm like I would not move from 30% to 6% because of a $200 change in your budget that's right that's right 100% unless you were wanting to move anyways and you have the money to do it with the new interest rate and you wanted to don't wait up like the best time to buy a home is when you are ready to buy a home so if you guys are wanting to move and you have the money for it but you're just like oh man I don't want to give up the rate that's what a lot of people I mean a lot of people are just like I I don't want to give up the rates I'm not going to move which is fine totally understandable but if you have the ability to and you want to that's the part of being

1:19:42wise with your money as you get to make these decisions but if it's only because of the $200 HOA fee at that point I wouldn't and you can also too look at things going on in your neighborhood that'll speak to why the rates may have gone up in that way and kind of projected it's probably going to be like this for a while or do you know what I mean you can sit down and if you dare attend one of the HOA meetings and find out what's going on over there but unless for some reason the 3% house that you already have is like stretching you guys to the gills and you're like this just really threw it over the edge but then you couldn't look for it is 6% anyway yeah yeah yeah 100% all right let's go to Grace and Las Vegas Nevada hi Grace welcome to the show hi thanks Rachel and Jade thank you for taking my call absolutely did I this is grace right yes okay perfect okay good sorry I think I may I hit a different button sorry to the bills okay um yeah how can we help so question about inheritance so I don't know how direct I need to

1:20:48be with my dad in asking about our inheritance and long story short um my dad has four kids um the three you know grew up in the household I did not you know I grew up in a safe with my mom so I've never been entitled to any of that stuff and it's fine right I've made my own way I told the screener I'm a baby steps millionaire thanks to you guys wow thank you so I was only led to believe sorry if I get emotional I guess I um better was hundreds of thousands of dollars which I don't want to fight for right like I don't want to fight for you know like 50k it's not going to change my life anyway I got a phone call this week and it might be more in the like the millions of dollars that this inheritance might be and anyway I'm just like feeling conflicted because you know two of my siblings are trying to get me out of the will you know my dad's starting to get the venture um but I guess as the little fans I'm supposed to get the house and some money so

1:21:53again like I was always of the camp of I'm not fighting for this like it's not not something I expect you know at the time I said it's not going to change my life but now that it's I don't know a life changing number I don't know it might be greedy like should I pursue that like I just I'm struggling like I couldn't even sleep last night trying to figure out what I should do next no I do have any relationship with the siblings at all I do with one um the oldest one has kind of been on my side of like hey this is about fairness like it doesn't matter that you know she's not like she's a resistor so um so anyway yeah so just with one the other two it's like friendly but you know it I mean they have put me in my place before of you know you're like that midlife and a stage you know what I mean so see and that's the most grace I hate all

1:22:53this for you so much like it sounds like there's a lot of emotions it sounds like there's a lot of water under this bridge that has gone on and I feel like that's what's clouding this discussion and I get it I'm not saying you wouldn't be clouded by that because that's there's a lot there just in the few things that you've told us but what I would want to keep first and foremost is what you said which is you were going throughout life and you were fine with your baby steps millionaire doing your thing and at the end of the day whatever happens I would just keep in mind it's not yours nor your siblings money at this point it's your dad's money and he's gonna make a plan that he sees fit now I do want to know whatever it is like these bits and pieces that you guys do know about the will how do you know that is that from your dad's mouth was there at one point a reading of the will or is this just jibber jabber from the family it's from my old sibling so I got a call like I said and she was sorry I haven't getting emotional but again she said

1:23:59so anyway there's a lot of properties involved right and pretty much they're getting the lion's share and it's basically how does she know how does she know because she knows what all it's worth she kind of had her hand in all these things she helped him make the will no she I mean she is she knows what's in it basically she didn't make it but she said yes basically you know you're supposed to get this worth home plus you know whatever is in the bank and they're trying to make it so you don't get the home and you know it basically goes to the grandkids which I don't hate that either right I just wouldn't bet on what she's saying I think I would go straight to your dad and I'd say dad okay I'm talking about your health is going and we all know that but you need to I would love if you would speak to us about what your final wishes are gonna be with the property so that we're hearing it directly from you and with the spirit of what you have in mind behind it you know our family is messed up and it's gonna mean a lot to me to hear your wishes from you versus one of my

1:25:05siblings that's all you can ask for okay so I just addressed this straight on how do you bring that conversation up though without entitlement yeah a lot of gratitude and humility but just say dad this this is starting to weigh on me and because it's because it's getting dragged so deeply and it's starting to feel really personal and I don't want it to be I hate that it is but this is what I'm this is what I'm feeling and I just think it's gonna be helpful and best for you dad you've worked really hard you have a lot to show for it and I want your wishes to be what they are and I think that it is it's fair for all of us to hear those together just for your legacy to be able to be lived out the way you want it to be when you're not here anymore and yeah I mean I feel like that I feel like that is totally fair so and and and I would also say too grace at the end of the day

1:26:06does it it feels I think it's yes is the amount of money maybe becoming more motivating for you to be whoa hold on but also what can easily be attached to someone's value to an amount of money and grace regardless of if you get this money or not it's right you are valuable that you're not some mistake midlife mistake like what they're naming because it can easily gonna start to feel like if this money does not come to you you have less value because of that and I would detach that from a spiritual element as fast as possible because it's just not true will it be heartbreaking absolutely but your value is still there if you own a business you know what a pain it is to find the right people you don't just want a warm body who can fulfill the basic job requirements you want to go get her who actually wants the job somebody bought in from day one but finding that someone buried in your inbox with 500 other applications that makes finding a needle in a haystack sound simple which is why I love

1:27:08what zippercruder is doing for small businesses zippercruder automatically puts the most qualified most interested candidates at the top of your list with their new feature that lets candidates tell you in their own words why they want the role so instead of playing resume roulette you're interviewing the right people faster and at ramsey solutions we only hire people who believe in our mission because someone who's genuinely bought in doesn't just show up to collect a paycheck they bring everything they've got every day zippercruder helps you find that person faster and they make it easy for amazing candidates to get your attention in fact four out of five employers who post on zippercruder get a quality candidate within the first day so try it for free today at zippercruder.com slash ramsey or click the link in the description that zippercruder.com slash ramsey meet your match on zippercruder welcome back to the ramsey show in the fair ones credit union studio we're taking your calls at triple eight eight two five five two two five let's go to Rachel in Riverside at California

1:28:15hi Rachel welcome to the show hi um are we just asking a question yes yeah what do we what can we help you today okay so i'm 54 years old and then you know i've been a widow for about six years prior to my husband passing away i was a stay at home mom for 17 years so i immediately got a job and um i inherited his IRA um i've been working but works really slowed up so i'm trying to think about doing a 72t and start withdrawing some of the money that i have okay and you're 54 yeah so not quite to that 59 and a half to avoid the penalty um so what are you doing for work now right now i'm still trying to do the real estate but i've taken some time off because it's just been really stressful um i jumped into work so quickly after he passed away and now i feel like it's hitting me a little harder yeah are you there Rachel kind of scared yeah because i was kind of

1:29:15scared when he passed away for sure so i just immediately started working now i have a pretty big um IRA so yeah why are you thinking you need to i mean if you've got the job now how why are you thinking you need to start doing this slow okay but what kind of work is it real estate okay so i'm i would go more along the lines of is there other work i can do versus trying to draw from this retirement earlier through a 72t? well i didn't have a lot of experience before we got married and and then i didn't work for 17 years how much is in that account? almost 1.8 million 1.8 okay and how much are you needing to have per month to live on to feel good and secure just a couple thousand dollars a month and i have money in my savings but i need to deplete that is your savings um is it like in a high yield savings account or is it your

1:30:16IRA that you're talking about how much is in there? about 200,000 okay okay because listen Rachel i'm just trying to figure out and i paid off my house oh my gosh so next time okay great see i'm just i'm just wondering how we can fill the next five years or so yes um and if you you know i mean like if you pulled two thousand out every um i guess it'd be every month is what you're saying that you need yeah yeah so i mean i'm just thinking because i mean if you did that and you pulled two thousand out i mean it's going to be over a hundred thousand will be gone from that savings which is not the end of the world you got 1.8 cent in an IRA that you can live off of two right so it's not right it's not the end of the world i'm just wondering can you supplement um instead of paying you know pulling two thousand out of one yeah kind of screwed up i had gotten some job offers and then i turned them down because real estate was really booming yeah that's okay and now it's like well do i try again and put it out put it out there again and try

1:31:21to get back i would Rachel i think you are a lot more competence and and marketable then you realize i mean you've been doing real estate in california you're i mean i think you have a lot to offer to something and again you're not needing this massive three hundred thousand dollar your job that you're trying to look from right right that you're trying to replace thank god because you've done so well with your money though that that gives you the freedom to feel like okay i don't need to take this i don't need to be looking for this needle in a haystack type job i just need something that i enjoy i mean it'd be amazing like to find something that you love Rachel that you could plug into or an environment that you love i don't know if there's you know a great church and you work part-time there part-time somewhere else or maybe there's um i don't know i'm just saying like a receptionist at a dentist office nearby and you know what he mean like you find a group of good people somewhere that's uh it's an uplifting environment for you and again you're not you're not having to make too much money it's just supplementing some of this supplementing

1:32:25yeah it's just i'm pulling from my pension that i had before okay it's just a small amount but i'm able to pull on that from a job i had prior to getting married how much it goes in a month for that just like seven hundred dollars oh okay yeah but you're neat you are gonna need some money to i mean realistically how much extra you said a couple of thousand be more specific for me um well um i i i'm writing out of room so i'm getting fifteen hundred for that and okay um so i figure my bills since i don't have a mortgage my bills are really minimal i don't have any debt at all yeah what does it cost you every month to just operate your life about thirty four hundred dollars thirty four hundred and then three to four hundred dollars no Rachel thirty thirty four hundred thirty four hundred okay i was like Rachel Rachel and so if you've got the fifteen hundred from the room rental the seven hundred from the pension and then what i mean obviously real estate is slow but i mean could we close that gap pretty

1:33:30i mean you're more than halfway there i could but i just stressed the real estate spend so much i'm not saying it has to be real estate but i do want to lay this out like if you were to draw from this early doing what you said if you did do a seventy two t it's not just i get i get to pick the amount that i want and i can do it for a limited time the IRS is going to calculate the government's going to calculate what works for you and you're locked into that you're going to be locked in for at least five years so if something does change you can't increase it you can't decrease it you're you're locked in and if for some reason that calculation something changes in your life and that calculation no longer works you could they could go back and say well actually there's a ten percent penalty here and actually that wasn't the right calculation so it's kind of a precarious thing so i would pull out of the high yield if you have to do anything i would leave the IRA alone and the high yield is where i would pull some money if i need to but i'm thinking about this two Rachel of just you know you're fifty four i think just having a place to go um waking up in the

1:34:31morning having a purpose having something that you're going to is really good it's like a very healthy thing um so i feel like you could find something and make two thousand dollars a month you know doing that and maybe it's and it's part time that's not a full-time job that's part time but like two to three days a week you got a place you're going you're making some money and i just think that's a i think that's a good mental health play for you and then i'm totally okay if you look up in three years and you're like you know what i'm gonna retire and go be with my kids over here whatever you know and you and you got two years that you got to pull from the high yield savings count do that you can do that you have the margin to do it but i just think it's good for you to to go find something with purpose in your life yeah i guess i'm just scared because i haven't worked in outside of you know yeah i've had much more experience do you have kids they're older they're all grown up okay where do they live um to live here and then the other

1:35:32um close to me and the other live in Texas okay great yeah i mean well what do you love to do Rachel what do you do you have a hobby or something that you just love i used to i don't know anymore okay i used to volunteer a lot but i haven't really been doing that yeah yeah i mean i mean honestly two thousand i'm like you could work at the library honestly just just anything that you're out with people you're you're making some pro-activeness in your life and making some money i think it's good um you know Rachel if you hold on the line christian it's gonna pick up and we're gonna send you king colman's book find the work you're wired to do and again i'm not saying you have to have a full-time career by any means but let's something let's some creativity kind of jog your minds and you know there could be some great things in your area that you plug into you get paid a little bit which sustains your life and and it's a beautiful thing out there

1:36:32so hey it's davramsy if you or someone you know owns a small business listen up what if you could build the kind of business you'd be proud to hand down to your kids over 30 years i've been able to build ramsy solutions into a business that's going to be a blessing for my kids i'll show you how to do the same thing at entree leadership master series november eighth through the thirteenth during this five day conference you'll get my strategies for building a winning business that outlasts you visit ramsy solutions dot com slash master series for tickets or click the link in the show notes

1:37:49when it comes looking at your money and your lifestyle even just like with our last caller you know knowing where your money is going is so crucial and every dollar is an amazing app to help you with that not only is it a great budgeting tool in it but also just your overall financial picture and the road map of how to get you to point a to point b it is there to help you and so every dollar is it's one of my go-to apps every day i mean i'm in there almost every day log you know tracking transactions and looking at everything and so it really does have a an amazing way to walk right beside you when it comes to your money so if you want to find some hidden margin and take control of your money make sure check out every dollar for free in the app store or google play all right we got julien and omaha nabrasca hi welcome to the show hey how's it going doing great how can we help okay yeah so i'm basically looking for some guidance about saving for college burst investing in a Roth IRA okay is it for you or for a family member

1:38:54this is for me so i'm 17 right now and turned 18 in two months i just started working at a bank and basically they have a pretty good deal for me so that every uh six percent that i contribute to a Roth retirement account they'll match it with for five percent and i'm immediately invested um i'm also going to be graduating in May with my associates here in business and i want to go to college after that in state um i think i'll be able to get a lot of scholarships and my parents will help so my goal is to graduate with little to zero debt but i'm not really 100% sure about that and i will work during college um do you know what college will cost each semester so i was yeah a person that's there it was about 14,000 because per year is 28 okay basically a figure price i think we can probably work it down a lot from there but so 28 per year that's 2000 or so a little over 2000 a month do you see a plan for that

1:40:04cash flowing out i yeah um the fapsa opens tomorrow so i was going to fill out out i think i my main goal is to just work hard and get a lot of scholarships and i think my parents will cover maybe room and board um not confirmed about that yet um but i think i feel like with my act score in gpa and me going to like an instate college for only two years instead of four i was just kind of thinking why like my student aid wouldn't need to be as much my for my overall cost sure yeah i mean i think your your mindset is perfect in the sense of i'm going to be applying for scholarships and grants one little asterisk though the fapsa can be very confusing and some people into signing up for loans thinking their scholarships i read the fine print be extra extra careful i would have you're such a mature kid i'm like oh my god and i'm going to say kid young man very very mature and i think your parents i mean they obviously know you well you're you're you're their kid and i think sitting down with them this weekend even and saying hey mom

1:41:06dad i'm planning out my college life yep i would love to know just um and you know with zero expectation but i just want to know the plan for college on your end if there is one just because i'm planning so that you know so that it's not kind of i think they're going to do this they may they may not get a kind of a solid number from them and then from there start yeah filling out scholarships and grants see what you get you can work and i think you at 100 percent can work your way through now the prospect of of what the the Roth is probably a Roth 401K at the bank i'm assuming because they're doing a match and that's a that's a great deal but i i would not do any kind of long-term investment right now i would be concentrating on investing and that is getting yourself through college debt free and there is plenty of time to invest and build wealth i promise you you are going to be fine you know if you didn't do this for two years you are going to have millions and millions of dollars that retirement i just have a feeling if you're gonna start early and it's gonna be wonderful but i want you to get i want your number one gold to be to get through school debt free because that will set you up then to be able

1:42:10to go straight into investing after college and not have to go backwards and pay off debt yeah because to your point there is going to be the 28 per year is just face value there you might need a car you might need an apartment there's going to be cost of living but then right after school what are you going to be getting into you'll need to you know so having money if you have extra money saving it just in a high yield versus trying to invest it so you've got that liquidity of getting to that money when you need it yeah so i was gonna ask like so you think i should just that cash for college not touch like the the rock match at all and then still for my college savings account do you think i should save it all in like a high yield savings or i would know everything and just like a basic savings yes i would move it to a high yield savings you can check out our friends at fair ones credit union they have you can do up to 10 high yield savings accounts with them and with the smart bundles so check that out if you go to fair ones dot org slash ramsey and open up that i think that's a great starting place and yeah because if you put anything into a

1:43:14Roth like a 401k or an IRA you can't touch it till 59 and a half anyways so i want that cash to be available and you'll get around i mean it should be around 3% now even a little maybe i'm not sure i haven't checked rates but even a little bit more this week every the about everything's kind of and crazy so you'll get much more in a high yield even 3% more you know then basically less than a percent in a traditional savings yeah okay well perfect that mainly answers my question awesome well done gosh i love how he and his mind works smart cat i know all right we got a lane and Sacramento hi welcome to the show hi jane and Rachel how are you doing today we're doing great how can we help good to hear um so i have a quick question we my wife and i we are currently on baby step two and haven't mapped out to where we'll be paid off within 18 months and great congratulations we intend thank you so much shortly after that we intend to list our home and then it's a three story count

1:44:18home we have a kid and a large dog looking to expand the family so you want to move into a single story and so our question is as we're paying off our debt are we closing our accounts if we intend on you know purchasing a home right around the same time that will be debt free or that could not hurt us for them you know because we wouldn't be able to do the manual underwriting process at that time that's a really good question um the credit cards that's the end of all consumer debt there's nothing else open correct yeah we don't have uh i mean in this 18 months we'll have paid off the student loan as well it's just one single loan and i think it's totaling like six or seven thousand okay and all accounts would be closed because what i'm getting at is what i'm getting at and we can work backwards is your credit score it's it usually takes like six to eight months to roll the zero and that is making sure every account is closed there's no balance anywhere

1:45:22if you have a random credit card open somewhere it's not going to roll the zero so that's kind of the game you're playing you want to make sure that everything is closed so that that has the ability to happen and then from there you would be able to do manual underwriting yeah because it has to be undetermined that credit score so they're basically the credit score can't exist like what you're saying like you know as because you mentioned it in the beginning of the call to do manual underwriting but it takes it's going to take yeah probably six to eight months to do that so it may pause your plan to move for about six months but at the end of the day honestly that is that is worth it and it's going to probably take you guys a little bit to save up an emergency fund and a down payment you know and you may have equity that you're rolling over too but you could use that six months to pile up a lot of cash to have for a bigger down payment and an emergency fund so by the time it all is said and done with the baby steps by the time you get to three B you should be good to go I mean how much equity do you guys have in that condo I mean at this time the neighborhood

1:46:22that it's we would break even if you know okay so you don't need to say for a down payment well in that that affects what we're saying because I was I don't know why I was thinking that you're renting right now your credit score is going to remain there because you have a mortgage attached to it that's what I was that's really where I was getting it as I you know we can close the accounts no problem because it's not going to go to zero it's not going to go to zero so what I would do just go ahead and pay off the cards it's not going to it's not going to take your credit in the way that you think because you have such a major asset on there your mortgage that you're paying on time every month you should have no problem in the world moving from that my husband and I had a mortgage it was the only thing we had when we moved here we got another mortgage and so it was no problem if you're paying your payment on time you'll be fine yeah but congrats on the progress you guys yeah yeah exciting yeah

1:47:34people ask me all the time George what's your number one money saving hack I'm glad you asked nothing makes me happier than helping another frugal friend so here's the hack get on a budget seriously how are you supposed to save money if you don't know how much you're spending in the first place and that's what makes the every dollar budgeting app a game changer with every dollar you'll get a clear picture of your spending and from there it's easy to see where you can get more intentional cut back and save more money how much money are we talking well the average every dollar budgeter frees up $395 in their very first budget and if you ask me I think your way above average so why are you still listening to me go download every dollar for free and start saving more money right now so one thing we love to see is the comment section sometimes we venture in at jade

1:48:42so at your own risk at our own risk as the hosts of this show but we do love to see you guys talk about it and talk through the calls and all of it the engagement is as part of the fun and all of this so we love it so make sure you're subscribing to the channels make sure you are commenting and yeah get in there because I think it's it's a fun element of it can be the it can be a negative part of the internet for sure but it can also be a positive part and we're yes and collars we see sometimes you know they're like cheering on other people and it's great so so get in there and engage there on especially with YouTube and even you can follow me and jade on all social media's tiktok and Instagram and Facebook and all of it and I'm definitely in those comments we we rest assured we see those we can see those all right let's go to Melissa in Tampa, Florida hi Melissa welcome to the show hi thanks for having me absolutely how can we help um I just wondered if you had any guidance or advice on how I can talk to my dad about planning for the future

1:49:50specifically why he should put his assets into a trust versus just leaving me with a will um I tried to have conversations a little time in the past but I always it always have awkward you know and I kind of feel like I don't want him to think that I feel entitled to it or you know what I mean I just like a comfortable conversation for you what's the difference what do you see the um the push for a trust versus a will does he have a larger state uh yeah I he does I mean in my mind he does like to me he does I don't exactly know the numbers what would I guess has at least a couple of million I mean he I know his house alone is worth close to a million and it's completely paid off he has um multiple multi-unit rental properties that he um like borrowed against his 401K when he

1:50:53was younger and so those are now paid off um so he was able to retire you know in his early 60s um and it's our they know he doesn't really have to touch his retirement he just lives off of the income from the rentals so um does he know I'm an only child okay okay I'm just wondering why child okay because a will can be sufficient enough I'm curious why that's not good like what you're seeing this like he really he really needs to do a trust versus a will I'm just curious what you're seeing yeah I I just heard like um I have a couple of financial advisors like in other parts of my family and they're always just said like you don't want to go through probate and you know the government's gonna take you know 30% of the money of your money and it's just a hassle and it's just all these things but then I mean if I were in your shoes the thing I'd be worried about for me is if if you had like a minor like if you had a young child and he

1:51:55was intending to leave a large sum that he would get at 18 like those are the things that I'd want to say instead of just willing him this money that he receives at 18 can we do a trust where it pays out at you know a more reasonable time those are the things I'd be thinking about um but if okay if that's not part of this honestly I don't see why he couldn't have a will I mean yes it will go through probate but okay it doesn't take 30% where are they getting that number from okay I don't know I don't think Melissa I don't think I I don't think it's anywhere near 30% I don't think so either okay okay so they're maybe just like exaggerating with me but yeah I think so I mean my concern he does have a will now I will say that is that I've been I've been trying to have this conversation with him for probably 10 years ever since I started working in healthcare I saw a lot of you know a lot of things happen to my patients that I went to both of my parents and who are

1:52:55separate and said you know please get stuff and writing and it took you know a really long time to get him to get a will his third his third wife um you know finally they did they did that separate but together um and you know my concern was that you know he's getting married multiple times and you know that was my concern about having a will but now he's divorced again so I've just said that if you get married again can you please get a preview yeah right yes which would be yes which would be smart on his ends yes going on the third wife or sure so you know I guess the other side of like me wanting him to get a trust or an LLC for his properties is that um like I'm worried about liability because for him it's something happens like I feel like we live in such a Sue happy world that I just have you know I have like this poor story in my mind of like him getting into a car accident and somebody you know trying to like if his properties are part of his personal

1:54:01assets and not protected by like a trust or an LLC that they would like you know try to take those things from him that's where he that's fair enough with the properties yeah yeah that's a lot of real estate and LLC would probably be smart just for him to set up just for his own protection too so if something happens at one of those properties that um you know the renter uh whoever can't sue him personally they're going to have to sell the LLC so there's ways to do that but that's um from my understanding and I don't know Florida law specifically but for my understanding it'd be more for his benefit while he's alive than even at his death but yeah I mean setting that up would be smart but no and I think it's I think on like a two million dollar estate I mean maybe fifty thousand dollars or something through um fees and different things through probate maybe but it's okay it's so minimal it's it will not be thirty percent by any means now now there may be in a state tax but that's over like um

1:55:02you know tens of millions of dollars at fifteen million I think is good yeah okay the people that are the you know financial people that I know have just made it seem like it's going to be so difficult for me to like do anything with his properties or manage them or it you know it's going to be such a long process to go through probate and all the types of things but I'm not really it's not about the money to me like I've even told him if you don't want to leave it to me leave it to my son you leave it to the next generation at the time he was married so I was like please just put it in writing yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah I will say if all the properties were in an LLC and through a trust or something I'll say I think the the people that are advising you that is right I think that would be a smoother transition but it's not like it's that it's never going to happen and it made it may be a longer process for sure especially if there's multiple properties so there there will be some work on your but I don't think it's it's not the end of the world I would not lose sleep over it by any means no yeah yeah and I probably would just tell him to leave everything to your son I think you want to have more say in what's going on and how if that's the case because you don't want your son to inherit

1:56:08two million at eighty I mean that's yeah no no of course not I mean you know but I was just kind of like trying to you know that uncomfortable feeling of talking about it and you you don't want him to read into something that's not there right yes yeah yeah or think that all you care about is his money like I would I would trade more years with him for all the money in the world and he's knowing his whole life Melissa he knows that's not true about you he made you I know I just it's just so you know it can be an uncomfortable conversation to have he's so smart with money and he's sacrificed his entire life and now he's retired and I'm the one encouraging him I'm like go send your money enjoy yourself totally traveling like spend it all you can't take it with you you know like I try to encourage him to really let go and now enjoy it because a lot of his friends his age aren't like you know physically able health wise to enjoy the money you know

1:57:12absolutely like he's lucky in that sense yes well you're a great you're a great daughter Melissa so yeah I think the will is in place that's really great yes if the properties were an LLC you know and then that's in a trust might be an easier process but I think you're going to be okay and if you want to know more you can take the wills quiz Ramsey solutions dot com slash wills quiz will tell you if you need a will or if a trust is better yeah and you guys listen to Melissa though for real everybody needs a will everybody needs a will and mom and bear legal forms is a great spot to do that for state specific wills but regardless of the amount that you have in your estate everybody needs a will you

1:58:19hey George camel here we often talk about how being normal sucks when it comes to your money but guess what normal isn't so great when it comes to your job either normal is staying in a job you hate dreading Mondays and working for people you don't even like sound familiar well the good news is you can break free from normal because Ramsey solutions is hiring and we refuse to settle for the ordinary in fact we are anything but normal and we are proud of it and right now we're hiring for technology sales marketing writing copy editing and creative roles so head over to ramsey solutions dot com slash careers and apply today our scripture of the day is proverbs 14 25 a truthful witness saves lives but one who breathes out lies is deceitful and frank said people can tell you to keep your mouth shut but that doesn't stop

1:59:21you from having your own opinion oh true that man it's good all right let's go to joe c here in Nashville Tennessee hi joe c welcome to the show hello thank you for having me absolutely how can we help um i guess the biggest question that me and my husband can agree on is how can we get over the fear of losing everything so that way we can ultimately have everything that we want oh wow be a little more specific what does that mean okay so he he had a quite a jump in income this year due to a job change and now we're finally able to pay our bills on time and not be underwater on everything or scrape by between you know groceries and live paycheck to paycheck and it's definitely not changed us completely but now we have room to breathe and take experience things that we want and you know be able to go out to dinner if we want to yeah um but we do have we have

2:00:24a little bit under uh right around a hundred thousand dollars in debt um and we want to we want to be able to actually have everything that we want and set up our kids as well right okay um it's just i think it's just the fear of actually not having that extra money now well how would since we've been used to it what would be the main thing that you'd be sacrificing i mean i'm thinking about things like yeah going out to restaurants maybe like entertainment things on the budget that you can cut back subscriptions what are you is there something bigger and concrete that you're seeing yourself sacrifices at vehicles what are you saying um i don't know if it's necessarily anything concrete i think it's just us actually having a cushion in our savings now uh just in case uh so it's not in savings okay okay yeah okay so how much we're gonna how much is he making a year now so he's on a 1099 so and with the job that he does he's a tour bus driver so it

2:01:25someone's he could be around four thousand dollars and then depending on how many tours he does it to be around 12 thousand okay so it's a pretty pretty big fluctuation um but it's now that we're able to save money we're scared to get rid of it to put it toward our debt what does it take just your minimum kind of bare bones normal month budget what's it take for you guys to get by uh about 3,900 okay so we'll say 4,000 so just to start this thing off because his income is so variable like the first step i would take for you guys is to is to have like a peaks and valleys account because there is so much variation and with the baby steps you're taking every bit of extra margin and throwing it at the debt so on a month where he makes 12,000 right you want to be able to have that extra to throw out the debt but you're not gonna feel comfortable to do that unless you have a peaks and valleys account that has another 4,000 in it right so i would do that and then

2:02:28i would go from there and we how much you guys haven't savings right now um so we we just recently opened a second checking account to put all of our like our bill money into our rent in our car payment his motorcycle payment insurance and everything like that and we we fully funded for October um and then in our separate savings we have 800 okay gotcha okay do you work at all i don't we have two kids four and two okay so work inside the house um go ahead Rachel well i'm just thinking i'm trying to map out for you guys um because the hundred thousand dollars and it's at all it's all consumers at right um so about 60,000 is student loans which i'm still in school i do online college um so i'll end uh round september of next year and my student loan should be around 60 grand okay um and then we have uh my car payment which is around uh 8,000 is the total and then his motorcycle is 14,000 um and then we we moved and we started renting

2:03:36this place and we didn't have any furniture and we got into one of those rent center payments for now we owe on our furniture oh and it's still rent a center yeah it's like a local company that does it like that and we pay on it weekly so we don't lose our couch in our refrigerator but you never own it right it's just rent to own like it's just rent we do own it we after we get out paying it we will own it and how much is that um total is about 1500 okay and he doesn't have a car he just has the motorcycle there's not another vehicle yeah correct just the car in my my car and then the shiz motorcycle okay so as do we get it 68 is there anything else 14 and 15 hundred anything else so i have a car that was um it was a lemon and it was repossessed and i planned to work something out with the bank a couple of years ago while they finally you know they took me to civil court and all that and i'm i'm paying on that monthly as well and it's about 11,000 okay okay there it is okay um so i mean josey really what it comes down to is i think you guys having that

2:04:40separate account is okay for now because his his income fluctuates so much so i'd get that 800 up to a thousand and then from there man anything extra you can throw like if he has a great month you could throw eight grants and get and get some of this stuff right down do you know what he mean like you can make some big progress in some of these big months and and when you map it out i mean it may take you guys 18 months or so to kind of get all of this squared away but it's not going to be forever so just as quickly as this income changed i almost would go back to the mindset uh knowing emotionally though there's a cushion because if something happens the truth is if something does happen now an emergency and you got a three grand thing they got crap we got to pay for this you have the money to do it right like you could cash flow it through that month if you had to you could pause paying off the debt to cash flows that's that's the beautiful thing is that the money is there if you need it right with this great income yeah but still have the the habits of how you guys

2:05:43were living paycheck to paycheck so that anything extra on a month where nothing happens can be thrown at this debt i mean you guys should pay off that furniture gosh super next next month next month you know it's coming on just seriously seriously pay like get some aggressive goals and i think once you kind of start seeing that momentum and stuff starts getting checked off yeah it's gonna feel great you're gonna feel a lot of freedom does he have a guarantee on his pay like is he guaranteed at least the four thousand and then it can go from there or is there no guarantee no there is no guarantee all um so it's really just you know if the company gets a client that runs out the truck then the client will need the driver then they'll go on that tour okay so it's no here there could be a month you know like because we were planning to try and go ahead because you gonna a really long tour right now where he's gonna be making a substantial amount where we could find all the way through January for monthly expenses okay we were gonna try to do that just in case you know he doesn't have anything in you know in between the holidays I wouldn't do that and I was

2:06:47gonna actually ask about that because there is such a fluctuation i'm also thinking there's freed up time there too so i feel like right probably the third piece of advice in your list of homework would be what can he do if he has a month that he's not doing all of those tours that equal up to twelve or thirteen thousand dollars right if he has a four thousand dollar month what is he gonna do with that time or if there's an offseason what's he gonna do with that time and I think that's a really important part of this equation because if you if you don't you are gonna tie up a lot of money uh kind of earmarking it for future months and I don't want you to do that I think if you have that peaks in vales account you get one month in that and then if you're having a situation where there's multiple months of not making bank then that means we need another secondary job or we need something else coming in regularly to supplement that income right yeah I think the biggest thing was just we we finally got comfortable for a second and now we're scared to kind of start all over again even though we know in the long run it's gonna feel so great

2:07:49we're just we're scared to give it up right now yeah I hear you but also there's a little bit of the false security because you still have all this debt like you guys still owe a hundred thousand dollars right so yeah so that I mean you know it was that much until I started adding enough and I was like how are we like holy crap oh my gosh yes I felt like a normal person like we've got my car payment we've got this and that and I was like it can't be that much and it is yes once you actually see it yeah so I think sometimes there's a weird false security mm-hmm if people have a ton of cash on one side but tons of payments because if something happens those people still have to be paid that's right and so there's there's an element to that that's very real so I understand that it's feels like oh my gosh we can take a breath and that feels great but listen stay motivated to attack that debt jocey stay motivated send her a copy of what no one tells you about money oh yes jade's book all right remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace Christ Jesus

2:08:52you