The Right Financial Decision Starts With Understanding the Problem

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 and the Fairwinds Credit Union Studio, this is the Ramsey Show. From George Campbell, joined by Jade Warsha and we're taking your calls at triple 8-825-5225. You can't tweet it in, you can't call it in, you can't... Sometimes we do take the social lens. That is true. And you can leave us a voicemail, but that's less fun. So call in live. We've got some open phone lines here. Triple 8-825-5225. Tony is in Bismarck, North Dakota to kick us off. What's going on, Tony? Hi, thanks for taking my call. So basically my whole world imploded on me recently. Oh no. I found out that my husband, we've been together for 15, Mary just over 10, we have two boys that he's been cheating on me.

1:10For at least two years physically online, who knows how long, but we again, we have two boys and all of our assets are combined. We had, we have no debt except for our house. Well, so I thought because another layer to it is he has been hiding a significant amount of credit card debt. Yeah, I bet having this relationship on the side is costing him. Yeah, yeah, and it, yeah. And so I'm trying to figure out how to move forward with not only that credit card debt, it doesn't have my name on it, but we're married. So I'm responsible for it too. Well, you may not be with that. I think if I'm the judge, I'm going to go, well, you're an innocent spouse. And he's taken on this credit card debt as part of the, you know, judgment. What are you going to do next? I don't know.

2:10Have you spoken to an attorney yet? Tony? Not yet. Not yet. I think that might be my first order of business day by day. Yeah, I would see what, you know, in every state has different laws, but I just want to make sure that there's no rash decisions here out of fear or anger that could hurt you later on. And so I think talking to an attorney going, what can I do and should I do legally to protect myself during this, this awful season that you're going to find yourself in cleaning up this mess? Have you guys talked to each other? How did you find out about all this? Well, I had lost my phone basically and he was sleeping. So I grabbed his phone and I saw a Snapchat. I was just looking at a Snapchat and I kind of led me to snooping in his phone. First time I've ever done that in 15 years. Wow. Yeah. How old are you guys? 33. Wow. I'm sorry this is happening. This is devastating.

3:11I mean, I can't imagine waking up in your shoes. So just the fact that you're trying to keep it together, you know, good on you. How old are the boys? They are 10 and 6. I'm sorry. Do they know about this? They don't know the details. They just know mom and dad are going through some things and dad moved out. Okay. But we're trying to keep it as civil as possible. I think I have all the reason to be the crazy one, but I don't that's just going to make things work. I think my first order of business would be like I said, I find an attorney. I'd ask in my circle of friends and who do we know? Who did Jeff use for his divorce? You know, asking your circle of friends and find somebody recommended an attorney that you can speak with. And then the next thing is I'd be looking for a counselor. And I'd be speaking with a counselor and I'd also ask what do you think about the kids? What's the best way for me to approach this with the children? Just to make sure everything's being handled with as much care.

4:12I think you're probably doing a fantastic job, but just to make sure everything's being handled with the most intentionality that we can muster up. And then from there, it's about letting the, you know, your attorney kind of guide these proceedings and guide. Okay. How do we bring up divorce? What's the best? Because I think that if you, and it's not to say that anything has to get muddy or ugly, but I think if you're going to try it because I see on my screen, you're asking, how do I sell my house? The answer is right now you're not. You know, I wouldn't try to do anything with moving money, selling assets. I just wouldn't do that until speaking to an attorney. Okay. Are you paying the mortgage yourself right now? Or is he helping? What's going on there? Yeah, he's helping like he basically just started his own account. And then he's just letting his paycheck 50, 50 to go into the joint account for bills and stuff. Okay. Okay. Good. So he's he's got a mind that he wants to keep taking care of the kids.

5:13He's not completely just. He's not going to like drain the account and flee the state. No. Okay. No, I know. I think he knows he's the one that really screwed up here. And he's not going to do anything to make it any worse for himself. Well, that's good. And both of your names are on the deed of the house. Yes. Okay. And is he down to sell this house? Would he be cooperative in that to sign the paper or what he needed? I think so, but we have so much renovating to do with the house before we could really make a good gain on it. Okay. How much equity do you have right now? We have about 100 equity in it now. Okay. And do you work outside the home? Yes. Okay. What do you make? I make about 85. Fantastic. So what I would be doing, Tony, is just trying to forecast what the future might look like with this new chapter for you and these boys going, hey, if I am on my own six months from now, what is life going to look like financially?

6:14And I would start to craft a budget around that and start seeing, hey, what would rent me if we sold the house and I rented somewhere? What kind of place would I need? How much would that cost? Can I afford all of this without needing any income from him? Now, maybe there's going to be child support, alimony. I don't know the full story, but I would sort of try to create this independent island in case this thing doesn't go well. Yeah. But there's no easy way to deal with the situation other than taking it one step at a time. So I would make a list of all the things I need to do to get it out of your head, because right now everything is swirling everything is emotional. You're going to have moments where you just need to lay down. So don't feel like you need to do this alone and don't feel like you need to figure it all out day one. That's what I've been trying to do. Yeah. The first day I'm like worst group. We're not going to make it through this. I'm going to be homeless. Well, I liked your idea because it is going to help out and just to put even a little bit more on that what I would do tonight.

7:15And we can help you walk through a little of this. I would just list out all the assets, list everything out and just split it in half for now and say, okay, there's this much debt. I'm going to assume that I'm on the the hook for half of that, half the assets and then kind of do that net worth equation and decide, okay, what's left. And then from there, that'll kind of give you because I've heard Dave say this and I believe it's true. When there's no knowledge, your brain just kind of makes things up and fills in the gaps and you start freaking out and winging out. So as much as we can pull some hard numbers and hard facts, that's going to help give you some peace. Even if it's not pretty, it's still going to give you peace because you actually know the answer. So I would do that tonight and then along with that budget, what are you bringing home 5700 a month? Is that about right? Well, I pay all the health insurance and so that comes directly out of your check. So whatever your take home amount is, plug that into every dollar. We're going to give you that for free. And at least for the next year, just to help you see and start planning out, go online and go, how much does a two bedroom apartment cost?

8:20And just start to answer some of these questions that are floating around in your head. I promise it's not going to be fun, but it will give you peace. Yeah, we always say that divorce turns a marriage into a business transaction. And so now it's just how do we do this as cleanly as possible without affecting the kids and not dragging them into this mess that was created. I'm so sorry, Tony. We are rooting for you to get through this. Hey, this is Dr. John Deloney. I take my sleep seriously because better sleep means better health. And if you've been losing sleep or waking up sore because you've got some old thin, gross mattress that wasn't designed with you in mind, it's time to make a change. I love Helix mattresses. They make mattresses for real individual people, whether you're a side sleeper, a back sleeper, whether you sleep hot or if you and your partner have completely different sleep styles, Helix has a mattress designed just for you.

9:30I want you to get online and take the Helix sleep quiz. It takes like two minutes and they're going to match you with a perfect mattress that fits how you actually sleep. Helix is not just a show sponsor for me. I sleep on a Helix mattress. Helix mattresses are the best. The best savings of the season are happening right now on Helix mattresses. Go to Helix sleep.com slash Ramsey and save up to 30% off mattresses with their Helix Labor Day offer. 30% off exclusively at helix sleep.com slash Ramsey with Helix better sleep starts right now. Chris is in San Diego up next. Chris, what's going on? Hey, how's it going guys? Good. How can we help today? Yeah, so I've recently been having some trouble. So I recently had like I would consider her a low maintenance girlfriend at the time.

10:33She was pretty easy on the budget, but as things have gone like increasingly, you know, a little more serious, you know, my budget has kind of expanded on the every dollar app. So nice way to put it. Yeah, so I was just going to ask like how do you guys, you know, comfort those things is like, no, I'm like every month. I'm like having to like siphon off other categories like my restaurant budget. Now it's just her at a lot of budget at this point. Like I'm just trying to do extra things for her. So how is this like explain to us start to finish is she texting you like, hey, we're going out to eat tonight. It's a little less of that and more of like I somehow got tricked into like paying for extra things. Like what? For the final week. So she was like very tired. So I was like just buying her coffee every day. What was that on your volition or was she asking for it? It's my volition. Okay. Because I don't want to dog her and be like, wow, she's terrible. It sounds like you just feel this pressure to spend. Yeah, tell us what, tell us what type of money you're spending on her on a weekly basis.

11:36Like we go to a dinner and the dinner is $90 and then I spend coffee on her and I probably get her five coffees a week. That's, you know, $69. I don't know how much coffee is, but tell give us some ball parks here. Yeah, sure. So I think every month is a little different just like this month has been like a birthday and then final. So it's been a little more since when you get her for a birthday. A small package. How much? Roughly around $450 to $500. Yeah, wow. Okay. Now here's the problem, Chris. You just set the tone and the bar. Yeah, next birthday. It's got to be at least $500 bucks. You set the bar early, my friend. It's not flowers and chocolate next time. Yeah, I kind of got a little screwed over here. We start dating around Christmas time. So I kind of had to get a Christmas gift. So like that kind of put me in the hole a little bit too. Okay. So I will start out by saying this because I, I want you to know who you're dealing with here. I believe in wooing and I believe in like whining and dining.

12:37I do believe that I love that as part of courtship. So there's part of me that I feel like you're just doing everything right. It costs money to have a girlfriend. Just like it costs money to have some of the other things you enjoy having. So there's part of this that I do think there's, you know, there's a toll here. Now the question is, is it bothering you because you're in debt and you need that money to pay off debt? Or why is it bothering you that you're shelling out this money? Tell us about your financial situation. Yeah, sure. So she's the one who brought me onto the, the Ramsey stuff. So for me, I think it's a mixture of like I'm trying to be like, you know, I got a budget for her. But like this month, I just blew right through it right for the birthday. So I don't have that much debt. I think I have point to here. I mean outside the morbid is about 35,000 in debt. So you have a CD that's about a hundred thousand. Oh, I won't be able to access it. I've been to August, July, but the plan was to use that to pay off the debt and start investing a little more aggressively.

13:40Um, but that's the plan. But I was just trying to figure out like my budget like has been just changing every month, like so much lower than the others so much are higher. And also just trying to bonds that with, well, you're you've set the budget. You're the boss of the budget. And so it's your job to say, all right, I'm going to spend two hundred dollars for this birthday and no more. And then you figure out how to do that. But instead you're going well I really want to get the spot package is it to impress her? I mean I don't it doesn't sound like she has crazy expensive taste and you're just trying to appease her. Yeah I think for me it's trying to appease for sure it's not so much expensive taste but I guess the way her schedule works out we don't have as much time to spend so it kind of makes it a little more sense to like go a little extra step. So you're trying to buy her love since you can't do it with your physical presence. I don't think there's anything wrong with you saying like I said I love whining and dining but I also love a budget and I love financial goals. I think if she's a good match for you you should be able to say to her I love being able to take you out I love being a

14:41gentleman I like being able to you know practice chivalry and and pick up the bill that being said my budget is kind of limited I just want you to know so that if there's something that maybe you're used to us doing and we don't do it that week that's the reason why it's not that I'm not into you anymore it's just I got to pay off my debt and I think you should be able to say that at this stage in the relationship and it be received because she probably has things at least she should on her end that are similar financially like yes I'd like to do my financial goals too so I think another human being should be able to understand that type of statement. What a fun question Chris thank you for that. And you do by the way once that CD let's let's him and he needs to pay off that debt with the full maturity and I would look into what the actual penalty is because if it's a nothing burger and you're just missing out on some interest I would pay off that debt today. Yeah because sometimes it really isn't anything it just kind of stops other times there might be a withdrawal penalty there's different rules on that so I look into that but I think if she turned you on to the Ramsey plan it's an easier conversation

15:44yeah you go hey listen I've been whining and dining and I realize I've been blown through my budget every month I got to get this thing under control date nights might look a little bit different for the next year as I clean this up can I tell you a real life story okay so it's gonna be good yeah maybe you get that smile of like mischief it's just a memory that I see in my mind right now when I first met Sam he my husband he lived in a townhouse obviously alone and he was shown me around his house for the first time and I was struck because he just had a pile of cash that he kept he just savings he just had he had a lot of things and we only have like papers and piles yeah no no it was in his closet it was just stacked up money and let me just tell you Sam definitely wooed me he whined and dined me and I could actually see the stack of cash going down down as he continues to date you yeah yeah yeah it's so funny and then he finally did propose he proposed six months into dating and yeah and by then he needed to get a paper route because he'd gone

16:45through his savings and so he had to get a paper route to buy my engagement lesson did he not know about a savings account he listen did we know anything back then we only got seven years old man with tin cans in his backyard that's funny all right I got a razzin for that next time I see all right Justin is in semi-valley California up next what's going on Justin hey guys are you doing thanks for taking my call appreciated absolutely how can jaden I help super excited to talk to you guys so we're my wife and I are about to be on baby step four which I'd love to share how we did that we're both educators and contribute to calsters we're contributing about add to our 4 3b as well as the calsters do work which equals about 10 percent once we get to baby step four do we bump up our 403b contributions invest more in mutual funds open up a lot um he's kind of excited about getting to baby step four and what do I do want to get that I really love that question and

17:48just for the listening audience baby step four is the baby step after you've paid off your debt after you've saved up three to six months of expenses where you get to invest 15% of your gross income that is the amount before taxes before insurance before all that good stuff comes out and to answer your question yeah and baby step four I would bump that up to 15% um at and if you're already maxing out the 403b at the 10% I would move to a Roth IRA but if you're 403b isn't Roth I and if there's no match I would do the Roth first and I would go to those funds first and max that out then go over to the 403b if you can't I don't know if you have a match in the 403b no I thought a match is just whatever whatever we put into it okay and then is there a Roth option for the 403b have you looked into that there there isn't so I was with a previous school district and I took that 403b and I was able to convert that to a Roth because I separated from them so my company was able to do that but um not able to do that on a day to day so it's just a straightforward three

18:52and not not able to okay so if there's no Roth option and no match I would go straight to the Roth IRA first and fund that and if you still haven't hit 15% then go back to that 403b and contribute there that sounds perfect I'd love to share with you guys just how we got here do you have I got 20 seconds okay speed round total money make up on 2025 um put it away thought Dave was way too strict um in 2026 I went back to it for I sold my car bought a car cash we paid off $53,000 in debt we have a rental house that we're selling it to the S-crow now once that goes through we'll wipe out and integrate stuff for us yeah yeah way to go man these are teachers educators and it's the number three career path four millionaires that's right you know a millionaire study we love to see it so it's about what you do with the income not making a high six figure salary because those people are generally broke the teachers they got control of this money way to go

20:03one of the biggest mistakes home buyers make is talking to a realtor and shopping for houses before understanding their real budget and that's how you end up falling in love with a house you can't afford and trapping yourself in a bigger payment than you can handle that's why you should talk to Churchill mortgage first Churchill shows you what you can actually afford not just what a bank will approve and with their certified home buyer program your financing is completely secured before you shop so you won't miss out on your dream home while you're waiting for pre-approval I've recommended Churchill for 30 years because they help you buy a home the Ramsey way so here's your plan contact Churchill know your numbers and then when you find the perfect house you're ready go to Churchill Mortgage dot com slash Ramsey offer for a special offer only for Ramsey fans that's Churchill Mortgage dot com slash Ramsey offer or click the link in the

21:03description welcome back to the Ramsey show right before the break we were talking to a fellow who is asking hey how do I invest with baby step four and I've got a fourth rebate through my employer and the Roth and the match the lot we were throwing out lingo left and right and so we thought we just take a moment to help explain some of this in layman's terms because it is confusing and it can be overwhelming and I don't want that to stop anybody from building wealth yeah that's right and and we teach over here obviously baby step four I told you guys the last segment and we say when you do start doing baby step four you're investing 15% we like for you to start with an employee sponsored account so if you just have you know a regular nine to five W two it's usually a 401k with teachers we see 403 B's military has something different but most professions have their version of a 401k and that's just literally the section of the tax code that says you can have

22:05an employer sponsored retirement plan so section 401 subsection k yes that's it and then from there there's different tax treatments on it so we've got the traditional that we talk about all the time and that's just saying hey you are adding money into this account before you've paid money before you've paid taxes on that money pre-taxed dollars and people go okay great the that's one option and then there's the Roth option that we talk about that we tend to favor because this is the option where this is after tax dollars you've already paid the taxes on this money we love that because when the time comes later on in life after retirement when you want to pull that money out you don't have to pay taxes because you've already paid them yeah think about your take home pay the government already took their cut so I'm using my take home pay to fund this retirement account and Uncle Sam says all right you paid us once you don't have to pay us again yes great so if there's two million dollars in a Roth 401k that's like two million dollars of net income yes because you're not paying tax on that and that's great especially if we're talking about leaving that money to heirs and things like that that's also so so important uh you mentioned the match

23:08earlier we asked him do you have a match from your employer we can talk about that George yes so that we say match be throught be traditional for a very simple reason match is an instant return on your money so at ramsey you know fine vest 4% ramsey's gonna give me 4% to match that so I just got a hundred percent return right there yep now some might say we do 50% up to a certain amount so it might be different based on your employer but many employers have a match so we always tell people take that first when you're ready to invest then go to the Roth options because you're gonna have that tax-free growth that's right and then move on traditional if you haven't hit that 15% market and the last thing I'll say about this jade is people message mean they go I'm so confused is it 15% of my income or hour income and I say it doesn't matter so jade and sam are investing jade invest 15% of her income sam invest 15% of his income yeah how much of their household income are they investing 15% ding ding ding cuz people go well I'm doing seven and a half she's doing seven and a half

24:09like no no no that's just seven and a half total of the whole pie no so all the money together 15% 15% of his 15% of yours 15% again if you don't have an employer sponsored plan or you don't have a Roth option you can always open a Roth IRA and that is just a non-employer retirement plan that anybody can open as long as they have earned income yes you're 17 year old working at Burger King can open up a Roth IRA that's right and start investing there and the limit for this year is $7,500 so that's why we said if you fill that up and you still haven't hit 15% of your household income then go back to traditional options and if you make too much there's contribution limits for the Roth IRA that's right you can look into a backdoor Roth IRA which sounds you know sneaky it's not that sneaky it's a very legal loophole where you just you basically fund an after-tax traditional IRA and then immediately convert it over to Roth yeah I like that and while we're here let's just hit on what happens if you have a 401k connected to your job you leave your job

25:11and now that 401k is sitting there we had a call about that yesterday George yes so we always tell people you don't want to see that money because if you do you're going to have some taxes and penalties and fees attached to it because it looks like an early withdrawal in the eyes of the IRA right let's hit that real quick obviously if you've invested this money it's it's expected to be there until 59 and a half which is like legal retirement age so if you pull it out early it's an early withdrawal you're going to get hit with that penalty plus 10% just for pulling that bad boy out what you want to look into is a direct rollover IRA and what that means is the money is moving from your traditional 401k directly over to a traditional IRA and same with the light of day you want to keep the flavors the same yes if it's a Roth 401k move it to a Roth IRA direct rollovers what you want make sure that you've checked that box before you just send money to your bank account and then go oh my gosh I didn't know what I just did yeah yeah that's a hard one to undo all right I was hard it investing 101 in about four minutes we did our best all right Mike is in Salt Lake

26:16City up next what's going on Mike thanks for taking my call sure so I'm just finding myself in a situation here I've been I've been taking the steps towards starting my own business doing carpentry work and other construction jobs for the last couple years and we decided to purchase a home this spring and in our area about an hour from Salt Lake it's there's a lot of opportunity for me in construction there's a lot of not a lot of affordable homes so we bought a home on the edge of our budget and we're paying about 3,800 a month a month for our mortgage and I've calculated the rest of our expenses at about three thousand after health insurance and gas and everything like that we currently have fifteen thousand dollars in securities back to line of credit against my

27:16index funds that value 105 thousand dollars otherwise we're debt free and I was curious also we have a baby come in in December here so just yeah just kind of seeing if you guys think it's the right time for me to jump into this business and kind of just getting a little overwhelmed with our overhead right now I don't want to sell the house I'm not ready to think about that just because we do have some runway what's your take home going to be hard what's that what's your take home pay every month my take home pay was about 70 thousand a year before I left my before I started doing more of my own work and now it ranges from about 1500 a week so seven that's what's that 4500 or six thousand dollars a month

28:17to about ten thousand dollars a month pending on the month and is your wife working outside the home does she plan on staying home after the baby's here what's the plan there she does work outside of the home she makes about 1200 biweekly 2400 a month and commutes about 30 minutes and I think between childcare and the commute and the opportunity cost of her being able to be home to keep our expenses down I think it's best that she doesn't work once the baby's here because I don't think we we're gonna end up keeping much of her income after her childcare. What do she think about that? She's back and forth she loves her independence she's also excited to take care of the babies and I think we're I kind of talking about you know let's look at three four years of you staying home and then we can revisit that and are you telling me that you're currently self-employed with this business? I am currently self-employed with this business I can so what do you mean jump into it?

29:21Yeah I'm like you already did that's what I'm confused about too what's what's that mean to you? So I can go back to my employer as a 1099 subcontractor and make my $70,000 per year so you're saying do I do this is it a safety a safety thing like do I do the safe thing of making the $70,000 with the with the employer or do I keep doing my thing making $6,000 to $10,000 a month even though it's more risky do I have that right? Right that's kind of that's kind of where I'm at right what makes it more risky? Just the fact that I may not be able to find work for myself and that well right now based on what you said if you make six grand in a month and it's just you you can't cover your monthly expenses so this house is too much of your income even at 10 grand it's still close to 40% of your take home pay on your best month and so I I don't know that this house is a good long-term option for you yeah if you guys want this life where

30:23she stays at home I'm self-employed doing this business and covering you know all the insurance so that's the tactical numbers you need to crunch and figure out if you can sustainably make 12 grand a month 13 grand a month with this business I would consider it but I would probably go get that full-time job again and do this on the side until you have a clear path to doing it on your own full-time just a lot of risk here 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 if you have anyone depending on you a spouse kids anyone you need term life insurance

31:29term 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 an instant approval my wife and I had term life insurance through zander for years long before I worked at ramsy 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. Buying or selling your home is a big deal and you want an expert in your corner fighting for you to find the best deal for the right price and the ramsy trusted program is the only way to find a top agent you can trust who will help make your home

32:31a blessing not a burden it's super easy compare agent profiles you interview them and choose the right one to work with and you can do that at ramsy solution dot com slash agent or click the link in the description if you're on youtuber podcast Sharon is in Houston Texas up next what's going on Sharon. Hi good morning how are you doing well so I was I was calling basically just to see so right now I owe $52,000 me my husband owe $52,000 to my car that we got in August we had about $40,000 now bank account saved we started saving pretty aggressively back in December and we're about to have a baby in july my husband makes about $2,000 a month and I'm a travel nurse so sometimes I work sometimes I don't but my question is should we get rid of my car payment or should we keep my car payment because my husband owes about $3800 to his truck which we

33:33were planning to pay off within the next two weeks about $3,000 to a furniture payment and about $13,000 to land that we're paying on land but we want to know if we should yes land property we want to know if we should get rid of my car or if we should keep my car I don't like my car it was an impulse is by what kind of car is it it's a 225 Honda pilot I wouldn't say it was an impulse is by I actually raked and told it out my grand-eat Cherokee that was paid off in july and we were trying to carry up and get out of the rental and even though they have an a better interest rate than a used car wow yeah so that's how they got you they said we'll give you a lower interest rate if you buy brand new on a $52,000 loan he said what a deal I'll take it I mean I can tell you actually was about 60,000 so we paid it down some but it's still very that hurts my soul okay what's the car worth today so we quoted it with carbon

34:40I thought about selling it to them it's about 43,000 that's how much they'll give us for it okay but we still owe 52,000 so okay so we're upside down there not too much to scare me I think we can get out of that and I would by the way if you want to get out of that you guys have the cash you can pay the $9,000,000 difference and even have a little bit left over to get yourself like by yourself a cash car maybe $10,000 or 12 since you're trying to get out of debt I know you've got a baby on the way so hold that hold everything that I'm telling you to the side because I know you have a baby the way we would teach to get out of this debt is by snowballing it listing it smallest to largest and paying minimum payments on everything in the meantime so it sounds like the smallest thing here is is the furniture so I hypothetically knock that one out first with any extra money after paying the minimums then I'd move on to the truck then I'd move on to the land and do it that way however there's a baby coming in July so that we always talk about the stork mode here

35:47on the baby steps where you can hit pause to stack up cash now you guys already have the cash stacked up so that changes the advice here so now it's how much can we use to pay off the debt without putting us in jeopardy to make sure we're okay when you know until baby and mom are home safe and so jade's right and that debts snowballing these these bottom few you could do that with less than 20 grand from your 40 which frees up those payments and gets rid of those debts and then maybe pause until babies here and then decide what to do with the car right I think we were heading to the car because the car payment is 950 for the yikes you know we can afford it I'm just being in the money that's what car are you going to get on the other side of that well we were planning for me to just drive my husband's truck because he drives he works pipeline and he is always in his work truck he never has been in another state for four months so you can live on you can be one car family for a while yeah because you have been struck in about four months

36:51it's been in that estate so I'll be honest with you I would get out of that car right away because it knocks your debt in the debt snowball from 52,000 down to 9,000 so then that order would be the furniture the truck the loan the upside down difference although I guess you could do that in cash and then the land right and I would also shop around to see how much you could get for that car you may want to check car max if you look will dealerships private party to see if you can be less underwater so I'm eating as much of this and then if you can live on that be one car family for while you just freed up a thousand bucks these other debts will get paid off real fast because you're not having to dip into savings to get something for you to drive right away exactly yeah I like that plan now let's talk about the storek mode thing a little bit because you do want to consider that you need to make sure that you've got a nice chunk of money sitting there and I'm not mad at if you want to wait until the baby comes to do all of this because it makes you feel better I'm not

37:52mad at that a rule of them that I kind of have is I want to make sure that I have the out of pocket max saved like that's what I want to make sure I have just in case you stay in the hospital a little longer just in case there's any complication God forbid that you have the money there because that's really the most that you're going to come out of pocket and then you might want to do some calculations on I don't know George Meals like that first couple weeks can be can be tough so just making sure that you've got a nice cushion of money there just in case is really really important nobody's cooking for at least a month so you got to factor that in hopefully there's a good meal train going on the old you the math Sharon says that if you paid off all of your debt today the underwater amount plus the other debts that's 29 grand out of your 40 so you still be left with 11 grand plus another month or two to save out of your great income so you guys might decide hey we can do this all right now and take the stress off that's right so that when this baby arrives into this world we are debt free wouldn't that feel good that would feel good so it's a risk tolerance thing because either

38:53way all the debts getting paid off in the next you know in 50 days for the question is when do you want to do it based on your comfort level and all of the variables that we haven't even talked about so I would sit down with your husband tonight and figure that out and decide a plan that works for you guys but my guess is you could probably stack up another 10 grand before the babies here right yeah because I'm actually traveling at the moment right now great good wow based on the next couple of paychecks think okay what are these next paychecks going to be until you know I head into the hospital have this baby and if you can make it work I love the idea of you guys become completely debt free and getting rid of this payment because next month that 9.55 stays with you instead of going to Hanville lending nice feeling whoo thousand dollar car payment that makes me want to throw up glad it's going to be out of your life all right Jessica is in Detroit up next what's going on Jessica hi my husband and I are on baby step two and plan to be moving into baby step four around this time next year I own my own company and have learned

39:56that my business can contribute up to 25% on tax of my salary into a solo 401k yeah but yeah I'd like to know where this fits into the baby step and how do I know if I should prioritize that contribution overtaking owners draws to pay down the mortgage on our home I love this question okay good I'm unclear on the best way to categorize these revenues I have to make the choice between funneling it through payroll taking it as owners draws or making it employer contributions into my personal retirement yeah I think right now because you have the debt you're doing owners draws and you're in you're doing payroll right that's what my husband and I did there's probably a limit on how many draws you can take and then the rest is payroll and you can get with your tax person or your bookkeeper on that and you're yeah it sucks because if you're taking more payroll than you want right just to be able to pay off personal debt so I would do that and then the 25

40:59percent which is fabulous for that solo 401k that falls under baby step four that's you investing and so that's where that falls under now I wouldn't go over 15% until you've gotten through the baby steps and then yeah if you wanted to go up to that full 25% limit you could but it all fits within the parameters of the baby steps for a reason and it's because we want you to be paying off your house so once you've gotten up to 15 percent you can do the rest through payroll there's a I don't know if you work from your home or not but there's a certain amount that you can pull from the business to put towards your mortgage as well so yeah get with the tax professional get with your CPA and definitely do that yeah so the key is it sounds great to invest right now but we have some debt to clean up so let's wait one year from now you got your eye on the prize you're going to be investing 15% there let's knock out the mortgage and in no time you'll be investing that full 25% and you guys will be building some serious wealth the rest of your life

42:11when you take your card of the shop you're probably thinking two things how much is this going to cost me and is it going to get done right what you need is a mechanic who will give you transparent information so you can make the best decision for your car and your wallet Christian Brothers Automotive is the official auto repair shop of the Ramsey show because you can trust them to take care of your vehicle the right way their digital vehicle inspections let you see exactly what their technician see giving you confidence on which repairs are urgent and which ones can wait plus every repair is backed by their nice difference warranty three years or 36,000 miles with a guarantee like that you can walk away knowing that your car and your wallet are taking care of schedule your service today and get 10% off your visit at cbac.com slash Ramsey or click the link in the description that's cbac.com slash Ramsey 10% off up to a $250 value see store for details

43:15welcome back to the Ramsey show in the fair winds credit union studio i'm George camel here with jade war saw open phones at triple eight eight two five five two two five if you want to jump into the conversation about your life and your money Jacob is in springfield illinois up next hey Jacob hey how's it going great how can we help today yeah so my wife and I were basically just trying to figure out how to navigate rising cost and everything while still trying to put money aside to for the future and for retirement but also just other savings goals and just trying to figure out how can we navigate this while everything seems to be just keep rising out of control where do you feel like in your home where do you feel like you guys are feeling it the most is it groceries is it gas are you trying to buy a house like tell us tell us the top three pain points

44:18that you feel like you're feeling it so it so our our two biggest spent is obviously our demi housing and child care um but then the third is uh right it's actually a kind of a tie between uh groceries and uh gas okay good to know okay so let's get into the nitty gritty's what do you guys do for a living and what do you earn uh so i'm an insurance service and then my wife she's working working in uh in a clinic uh so we're basically combined we're right about uh $110,000 a year gross okay cool and do you have any debt right now the only that we have is our mortgage and the we have a small about two hundred dollars what to pay off on our credit card okay and that was just and that was just to do a monthly nine monthly uh couple medical bills that we just wanted to split those payments not to

45:21earn our budget how much do you have in savings right now for your emergency fund and anything else so emergency fund we have about three to four months of expenses for right about that $20,000 range okay okay so i think in those ways i i feel like you guys are in a in a pretty good spot i guess the biggest question is how much is your mortgage payment every month uh it's about 13 25 so i mean it's pretty much right about that 21% i think yeah excellent right so it's got to be child care then how many kids do you guys have and what do you pay for child care every month uh so we just have one child she's 18 months and we're paying uh right about uh that would be 13 okay yeah 13 hundred months i mean that is definitely it i mean you're usually somewhere between 13 and 1500 especially for a younger baby um are you guys investing 15% right now

46:21uh we are not um so i'm putting money into a Roth IRA and then uh wife is putting uh out uh i think it's about 5% of her paycheck into a 403 so i see oh how much into the 403 uh i think about 5% okay okay uh for paycheck why can tell you i mean i'm looking at the biggest ticket items your mortgage daycare that's eating up 2600 of i'm guessing you're bringing home around 7100 a month how much are you bringing home so after so after taxes and after uh uh deductions like uh help insurance and health care all up stuff uh we're right about 64 100 a month okay so i still think there's something missing here have you guys done a detailed budget to figure out where the rest of the money's going because even if you were spending a bunch on gross raising gas there's still a couple grandloins to offer uh so yeah actually i mean yeah i was just

47:23doing the budget before we hopped on and i mean looking through our paychecks it's in our in it costs i think it was about i want to say about a hundred and fifty hundred eighty dollars uh per pay period for uh health care for uh because it's under because mine's by myself and then uh wife covers herself and our daughter so yours doesn't come out okay so hers is coming out of the pay so that's the 64 hundred a month that already covered hers and then yours is another 300 a month is that what you're telling me so no for my health care it's like i want to say about her in fifty months oh okay so that's that's not the problem either here's what i this is what i think i think you guys don't have a detailed budget and i think and i this is no implication this is no judgment i think you guys have a young baby i think you've come off of uh but you know when

48:28you have your first child it's major life change you're doing a lot of things out of convenience you're doing a lot of things out of learning what a new life rhythm feels like and my guess is there's just a lot of spending that is can be cleaned up and i'm not saying that some of it hasn't been necessary you have a new baby so you buy new gadgets and new things and conveniences to make life easier you pick up dinner more often those sorts of things and my guess is that if we give you every dollar and you really use your bank statements to kind of do what i would recommend is do last month's budget go look at your bank statement and plug it all in and you're going to go oh crap you're going to see how much in the red you were and then do this month months budget and in real time start making those adjustments and i think George that they're going to find a couple of thousand dollars here you'll see i'm based on my estimation there should be like two grand left over and so the last question is what are you actually saving for because you're saying you're at a hard time continuing to save is that for the emergency fund is that investing is that trying to path the

49:32mortgage what is the goal so we have to do you that every dollar you're talking to the nerd well what do you think is going on there you see the line out of it tell us how much is actually left over when you do your every dollar budget what's the margin right now so right now it's about i mean grand last month was rough just because we had five weeks to pay for in daycare um yeah but it's right about it's right about eight hundred a month so our savings goals we have we have to just we have a kind of a a home improvements savings account we have emergency fund i'm just basically just trying to keep up with it a couple like a hundred or so here there um the but the other two big thing that we're trying to focus on is the saving for a new car to try to pay that in cash and you have sinking funds for all those things

50:32there's a sinking fund for saving sinking okay so that's where the money's going which in that and those are not mad at that so that's why there's eight hundred left over after all of that right so we have that so we we uh so we contribute to those sinking funds at the end of the month when we after we see where our margins at um so for new so for the car uh a vacation fund that we just have kind of just to keep as like a safety net for if we want to do a vacation in the next year or so i think that's great Jacob i think what you're doing is exactly right uh the only thing that i would tweak in what you said is i wouldn't wait till the end of the month to decide that i would plan that when the month begins because the money you have is the money you have you're both it sounds like on salary so if you know we are taking home sixty four hundred make the plan on purpose this is how much we're spending this is how much we're putting in the vacation sinking fund this is how much we're putting in the car do it at the beginning because if you don't

51:33you'll let yourself go over on door dash you'll let yourself go over on you know some of the frivolous things and then you say well that's okay we're just not going to put as much in the car fund be intentional about that it's your money you get to decide and if you want it to feel like you have more going to those categories make the necessary adjustments as your business grows everything becomes more complex there was a time when Ramsey solutions had too many disconnected systems and not enough visibility across the business we wasted too much time chasing information instead of making decisions that's why we got net sweet net sweet brings your financials inventory CRM and more together in one place more than forty four thousand businesses

52:34run on net sweet including Ramsey and now they're taking the next step with net sweet next making it easier to put a eye to work across your entire business net sweet next helps you make the most of your time automating routine work like forecasting demand and following up on overdue accounts with net sweet next AI is built into everything you do so you can ask it questions just like when you're talking to a member of your team and right now you can try net sweet next for free if your revenue is at least seven figures go to net sweet dot AI slash Ramsey that's net sweet dot AI slash Ramsey Sarah is in Sarah soda up next what's going on Sarah

53:35hi thank you so much for taking my call sure so I have a question um can we bought our home in 2022 we've on it for five hundred and thirty five thousand dollars and um there's a lot of equity in that in it now we think it's worth about seven fifty and I should be coming into a settlement in the next six months I just talked to my attorney today and I think I'm going to be receiving about two hundred and fifty thousand dollars and my husband really wants to sell her home take the equity and the money from the settlement and buy a home outright so we don't have a mortgage and we just have a little bit more freedom in our budget but to be honest it doesn't really buy a lot of house around here anymore and I like our neighborhood and you know we are kind of tight month months and I was thinking maybe we take the two hundred thousand dollars I we have kind of a smaller emergency fund so I was thinking that we put fifty thousand in an emergency fund in two

54:39hundred down on our mortgage which we have um three hundred and ninety seven thousand dollars left on it so I was thinking about doing that but I wanted to get you guys what you thought was a better idea cool so you guys do you have any debt right now outside of that mortgage no okay so you're thinking hey let's stay in the house let's use two hundred grand to throw with the three ninety seven that brings it down to about two hundred thousand in a mortgage and then would you do a recast to get the payment lower um that was going to be my other question do we do that or we just kind of continue to wait and try to pay it down faster or we do a recast well what's your current order's payment now it's thirty six hundred dollars including the H.O.A. and the state and insurance taxes and everything I think the actual like mortgage is only like twenty five hundred but um I mean we live in a plant you know a nature-wide community and there's also questions that probably is going to go up over time so it's the community development

55:40fee and I think our taxes should remain stable because they're home-stated yeah what's your take on pay every month um I think it's around ninety three hundred dollars a month okay that's kind of variable um we made two hundred and six thousand dollars last year but my husband got a bonus and I got a bunch of commission but we can we're guaranteed ninety three hundred dollars a month that I made about an extra thirty last year and commission bonus that's gonna say I'm making over two hundred you should be bringing more home so I would look into yeah because I'm going made thirty six hundred bucks all in for your house your housing payments for all the H.O.A.'s and things that's that's a lot of your take on pay right now so you are feeling the pinch but with the recast it could lower it which would help um but again if you can just keep paying what you're paying and not pay for the recast you'd be fine to just keep knocking through that mortgage and if you guys did that you'd probably be done with this thing and what maybe two or three years the mortgage yeah could you do that I think that would be a little bit

56:44hard for us so we have one child still in daycare um that's a mortgage payment right there for sure yeah it is and I also we have quite a bit of medical expenses so I just went through kind of a really hard challenging time health wise and um the treatment that I'm doing right now is not covered by insurance and I'm spending about one hundred dollars a month on that that could be another reason why the recast is good for you because obviously for anybody listening when you do a recast you're throwing the lump sum at the mortgage and it's just recast at that new principal amount it doesn't change the terms it doesn't change the length of the loan but your payment is going to be lower everything stays the same but the payments now calculate out on the new balance the new balance and yeah so your your payment would be lower and that would free up a lot of margin especially if you're saying you've got medical things to pay for um there could be something there but I do I would caution on this because it doesn't change the length of the loan you do want to

57:45find ways to be more intentional about paying it off since it is a lower monthly balance monthly payment I should yeah so that's where I'm going man if you guys make 200 and you can live off of let's say 80 to 100 and throw the rest of the mortgage that's where I'm going how you could pay this off in three years but if you're saying there's a lot of other expenses right now that's okay you guys are in a tough season I mean you got one in child care you're doing with the health issues I would focus on that right now there's no urgency to knock out this mortgage as far you know nothing's on fire here you guys are doing great so I would take care of you right now and when the time is right you do this move and bringing that mortgage payment down will give you some breathing room for sure but I wouldn't downsize into it house that you guys hate just just to be mortgage free no I wouldn't do that either because you're not going to enjoy it want to live yeah I mean no one else right you think we can find a place that we can be happy and like we don't have a pool we could afford a pool in some of these different areas a little bit more land we'd be closer to schools also the schools that we're going for are like really far away

58:51from middle school type school so I think he's thinking long term and and I get I get all the reasons why but I mean we've been in the neighborhood for four years now and I really we have a big beautiful home that we have a lot of equity in and we're very lucky I mean I think to get in when we into this neighborhood when we did I mean new house here construction with everything we have would probably be close to a million dollars so I feel like it was a really good investment and I want to stay here but things are really tight so the other day it just came up he wanted to do some more sports activities for my son over the summer and it was going to be $400 like we had just paid like for a camp we found like a county camp that was very reasonable and price we had just paid for that and a bunch of other expenses and he's like I hate the things are so tight all the time it's a value of the question yeah you guys have a lot of questions sir of what's important to us and what are we actually going to put in the budget and that should be a reflection of the life you guys want and because you are talking about a mortgage you do need to look long term because

59:55you don't want to make a short term decision uh and and change a long term asset like like a mortgage so you need to be thinking through okay the sports thing is that just for this summer how many summers do we see them wanting to participate in things like that and really think through how long certain variables are actually going to be part of the equation and just have some really intentional time set aside to dig through this before you make a major choice I would say thanks for the call yeah appreciate that sir good luck with this and the health issues especially yeah Kyle's up next in Louisville Kentucky what's going on Kyle hey there thanks for taking my call I am 45 my wife 43 we have three kids uh daughter that's 15 a 14 year old boy that has profound autism and we have a 10 year old boy um my question is uh whether I should keep a survivorship policy that I have in place that the sole beneficiary is a special needs trust that we set up for our son

1:01:00who's likely to to be with my wife and I you know for his lifetime so I know that Dave is not a big fan of a lot of these universal life policies but wanted to get your old thoughts on how I should think about that from a special needs planning mentality how much is that what's the premium on that that the premium is only about 1300 a year uh definitely not anything that's um you know break in the bank um you know it's something that we plan for every year the the death benefit would be $500,000 in the event that both me and my wife died and that would go straight to the special needs trust that's correct okay and in addition to that you know I have a uh term life policy that is about 10 times my base salary my wife is a state home mom and we also have a term life policy on her as well okay okay that's good is there anything else in the special needs trust besides those

1:02:05three pieces no uh not not currently and the the term life policies don't pay to the to the trust immediately um you know that would go to my wife or if she could have passed away that would go to me and then would likely go to our other kids uh the trust is there to fund uh you know any trustee or any caregiver that that might uh take on um you know our son yeah I mean if you guys are debt free you're investing well 1300 bucks a year is a small price to pay for some peace of mind right now I agree and if you want a second opinion I would definitely get with an estate planning attorney a smart vester pro at ramsey solutions dot com because special needs trust and having a special needs child you want to make sure that all the eyes are dotted the teaser crossed to take care of them or something or to happen you guys so you're doing a great job man I can't imagine what you guys are dealing with three three kids and the special needs kid that's uh that's a lot to manage at your age in your mid 40s trying to hold down the fort keep it up

1:03:17hey 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 recommend that you check out Christian health care ministries CHM isn't insurance it's a health cost sharing ministry that means members help pay one another's medical bills and they've been serving Christian since 1981 CHM programs start at just a hundred and fifteen dollars a month and here's why that matters if you are paying more than you need to for health care that money could be going toward paying off debt building your emergency fund or reaching your next financial goal and your monthly cost isn't based on your medical history or where you live y'all a lot of families find CHM gives them more room in the budget that's why so many members say they're better with CHM and right now new members can receive a 50% credit towards their first month of membership go to CHM ministries dot org slash budget and use promo code Ramsey at CHM ministries dot org slash

1:04:22budget and promo code Ramsey today's question of the day is brought to you by YRIFI if you've been turned away by other because your private student loans are out of control YRIFI may still be able to help they specialize in refinancing options built specifically for borrowers in that situation go to YRIFI dot com slash Ramsey that's the letter Y R E F Y dot com slash Ramsey may not be available in all states already today's question comes from Hudson in Utah it says I am 17 years old and I run a music marketing business using Spotify playlists I've been running this business for just about a year and a half now the business has taken off and I have secured several deals worth up to 25,000 and have gotten to work with very large artists my parents are hard set on me going to college

1:05:25but they are not paying for it so all tuition and expenses would be on me I have about 30,000 in the bank a car worth 15,000 which I bought with cash and zero debt do I go to college and pursue a business or finance degree take a gap year to try to scale my business or skip college completely man I just love this question because it really does I like things towards that kind of like butt up against norms and like allow you to do your own thing because there is no rule that says when you leave high school you must go to college there is no rule that says that and I know a lot of parents probably hate me saying that especially if their children are listening but it's true that's not always the smartest path and so if we have three choose your own adventures here go immediate lead to college which is very easy George for somebody to say ghost spend your money on this they're not the ones paying for it he doesn't I mean he's got 30,000 but he maybe doesn't

1:06:27want to spend his money that way he's doing something entrepreneurial that's doing well for himself right now I like that and so my thought here I'm just going to and I want to hear your opinion to George ruffles some feathers my opinion my opinion is college is always going to be there it's always going to be there and I know there is something to like momentum like when you're you don't want to just take a gap year and not know anything right but this guy he's got a clear path it's like okay there's momentum going in one direction follow the momentum your entrepreneurial business on Spotify is taking off I love you doing it if for some reason it putters out and you find yourself like okay the reason it's puttering out is because I just don't have the information or skills I need to grow it well then you might look at okay what are some of the things I need to learn is it a university path is it a certification path do I need to go shadow and you know do some sort of internship path so many options there George what say you well as a guy who took a gap here I went to school for a year took a gap here pursued music love that was in a band worked

1:07:28at the Apple store everything you think about me looking at me is true so I I would never tell them not to do that I mean here's the funny thing people send their kids to colleges with prestigious music programs hoping one day they'll start a business like Hudson did at 17 and just not to be whatever but the school is already behind the education is already behind your professor doesn't know what Spotify is most likely so I would go hey I'm going to pursue this I'm going to see where it leads and worst case if you go mad I am at a wall I hit a wall I don't know where to go from here I think a business degree would help a finance degree would help then go for it but do it because you're passionate about it and not because mom and dad told you to I don't think that college is a place to search for what you want to do I don't I don't think you should search for it's a thousand thousand for most parents it's just a safe place to find that and so they go well I'd rather my kid there than out in the real world but you're paying for every semester and every change of major and every change of I just think that we can be more efficient 100 percent I would joke that

1:08:34you should if you want a kid to be cultured send them to Europe for a year instead of the college I can tell you that a person they'll have a better time and come back a different person I agree with that wholeheartedly George as a person who worked on ships right out of college traveling the world will do more for you than a lot a lot of things I'll tell you that I love it way to go Hudson yeah like I'm proud of you man I mean I don't want your parents mad at me they're already mad at you but I'd say mom and dad unless unless you're foot in the bill yeah I'm gonna just pursue this business and let's add this maybe he has to move out at 18 because of it because mom and dad have one opinion and he has another that's okay too and you can afford it if this business keeps up way to go Jason is in Chicago up next what's going on Jason hey how you doing great what's your question today uh so I have a 2026 uh Honda and it's 25,000 left on the vehicle I have 23,000 um I'm close to Pannon offering but I was wondering I don't know I'll get paranoid when

1:09:37I don't want to pay it off right away to the knife nothing my bank uh what do you recommend just paying off right away or I mean I can build it back up pretty quickly but like what's your pay emergency set uh it's 532 and what's your next paycheck what's my next paycheck yeah 21 22 okay so we're talking two paychecks from now you'd have enough to pay off the car and still have a thousand bucks left over in savings yeah and you'll be freed up with that 532 for the rest of your life so how quickly could you save it back with 532 extra in your pocket every month oh I could probably give it like a couple couple months I'd be in a decent spot I think you have your answer because I I what I do is I split my check in half half of it goes the savings half of it goes to bills and go from there okay so 50% of your take-home pay is going to that savings account that has 23 in it yep way to go I mean if you keep that up once

1:10:39you're dead free you're gonna be right as rain my friend so I would definitely do that I mean if you look at our baby steps baby step one is a thousand dollar starter emergency fund which means if you have more than that it's gonna go towards baby step two which is pay off all of your consumer debt so is this all the debt to your name is this 25 thousand dollar car loan yep man I would pay it off and not look back but again don't do it until you have that thousand dollar buffer on top of the money to pay it off yeah we're talking about a month from now roughly that's it all right I would not be scared my friend and listen if you have a an emergency come up you hit pause and you cover the emergency and then you hit play and move forward again but I think are you a single guy young guy I'm not single but yeah I'm young is as your wife working outside the home yes okay so we have two incomes on top of this yes what do you guys bring it home every year or every month probably she's bringing oh month I don't I mean she's like girlfriend so oh okay well

1:11:42that's a different story okay that's a story yeah then it doesn't then the the advice stands it's not concerned her not her business appreciate that Jason that's a fun one that is I want to talk about the the car loan epidemic Jade because I just saw the headlines that they have now surpassed student loans in national debt oh boy what's the number I believe it's 1.68 trillion dollars oh wow that is surpassing in auto loan debt the average payment is now 750 dollars for a new car that's painful and in the high five hundred for a used car yes and it just shocks me that people are still out here buying a brand new car which depreciates 10% the moment you drive it off the lot yeah 60% within the first five years yeah on average while you pay interest and it goes down a value I think the most compelling argument here is when you synthesize the data out there on car payments who has car payments

1:12:43you can derive that of working adults like adults that are of working age over 50% of them have car payments then when you stack that up against to the percentage of people who are living paycheck to paycheck and then when you stack that up against the amount of people who feel like I won't be prepared for a retirement or I don't have enough money in retirement the numbers are so close that you go oh it really is true that the car payment is keeping middle class broke and unable to cross over that line to wealth hmm well that's very interesting and then the hardest part is we can justify it I mean ever you talk to the callers they got brand new cars and I go why do you need a brand new car well safety and reliability I go okay so two years from now you've got a used car is it still safe and reliable yeah yeah it is and the truth is new cars you know if you look at all the technology and things that can go wrong they're not as reliable some of these used cars without all the bells and whistles are actually safer in a lot of ways and less less prone to

1:13:45eating all these repairs so what I do is research the make model year for known issues that come up with this car don't buy one oh it's got the CV transmission issue in that Nissan great let's avoid that specific model for those years and find something we can buy in cash until we can upgrade in cash and if you stare step at that way you are guaranteed to build wealth agree so that's trading in one payment for another most people spend years changing their money habits but never think twice about how their bank probably works against their values with nuisance fees and endless debt products if you're being weird by sticking to the baby steps you deserve a bank that helps with that that's why Ramsey partnered with Fair Winds Credit Union they built the smart bundle specifically for Ramsey listeners

1:14:52not for everybody else and it includes up to 10 high yield savings accounts so you can set up different funds for different needs and goals and now they've introduced the live like no one else debit card the original debt is normal be weird debit card is still available to and every time you reach into your wallet your card is a daily reminder that you follow a different path listen if you're living like no one else your bank should back you up check out the fair winds smart bundle including the all new live like no one else debit card at fair winds dot org slash Ramsey that's fair winds dot org slash Ramsey insured by the NCUA all right you've heard the saying check yourself for yourself yes I apply that to insurance

1:15:57okay the insurance check up the right insurance acts as a shield around your loved ones in your wallet if disaster strikes and we've got a free insurance coverage checkup that helps you figure out if you have the right coverage by giving you a personalized action plan with clear next steps so go to ramsey solutions dot com slash checkup to take the coverage checkup and find out if you've got the protection you need because when you disdry you dis yourself thank you full circle Marie Marie's in San Jose up next what's going on Marie hi so two years ago I went to the emergency room because of a cold and I'm not from this country I had no idea how how deductible worked I have insurance at the time and while I was there I signed up a paper that the amount would be around seven hundred twenty dollars but I would take with the bill of four thousand seven hundred dollars and the insurance paid seventeen hundred and I still have a few thousand dollars bill to pay I think there's those of trages and I really don't want to pay this bill I didn't pay so you

1:17:02went to collections and the collections company sent me a bill with the same amount but with my my name wronged it I was wondering if I can skip this statement okay so you when you went to the hospital did you stay over or was it just a quick ER visit tell us and did you think that you were just going into an urgent care tell us what happened did you stay over no I didn't it was a few hours there was a lot of people there were a lot of people in there was it the emergency room I I took a a pill and I like a like a not-ville like it gave me a not-ville and that was the whole treatment you know it's like I was a short time I mean it could be faster but you know for what he was it took a long time but it was a cold I had a cold did you get an item my statement did you get him to print you out a statement of each line by line item so I called them and I complained about the price because I couldn't believe when I saw the price and I asked for a night of

1:18:06my and they didn't send me the item I say they never sent me the item I would be finding your shoes send a written dispute to the collection agency and to the original hospital I can tell you this I don't think you're going to get out of it because of a typo of your name no the debt is yours you can get a debt validation letter you know you can send them that but they're going to validate it and go up there's a typo in your name but the debt is yours I'm surprised for if you saw the portion that the insurance paid but you couldn't see the information do you see I'm saying I would keep fighting for that I'm like let me know show how it was this debt three years oh wow yikes well you can still try to get all that information and at this point they're going to be willing to settle do you have any money I do I do yeah okay so this is more out of principle you're just angry at the American healthcare system absolutely join the club you could price settle this for a quarter of the amount and be done with it do you think a quarter

1:19:08of the original amount that they asked that I signed for because they told me I would go to the bill seven hundred dollars and they talked to the collection company and say listen I was told it'd be seven hundred I've got that that's all I have if you'll take that as paid in full in writing and don't give them access to your checking account then you call it good and see what they say they might go now we can't do seven hundred we can do a thousand it's probably worth it for you to to not deal with the hassle at this point and just go all right I'm angry but you've been angry for three years now yeah so I want you to just be free of this and when you settle it just know because I've had to do this you might have to call several times to get somebody with a brain who will actually know the policy that they can settle it the first three people might say we can't settle this you owe three thousand dollars better to just hang up and call the next person until you get somebody with some persistence brain cells and have you talked to the insurance company to understand why they didn't cover more or what your actual insurance was you didn't call the insurance company what I understood is that I had a high deductible and I at this point

1:20:13I had no idea at that point I had no idea how this worked in how it stayed I had no idea of this cam that insurance are in this country so I yeah I didn't I sincerely didn't understand I couldn't believe I thought I was going to have to pay the whole thing but what this is my office is 700 dumps to 47 hundred yeah that is the confusing part that's the part I would at least get the info on and through the itemized bill and some of the validation of this debt and I would be talking everybody I'd be going to the insurance company to the hospital to the collection agency and really get to the bottom of this before you ask for that settlement just so you know the type of my name is not really just a type of it's like a whole name they put a wrong name like they put the first name correctly and they put a second name and then they put my last name so do you think there's a confusion of accounts do you do you genuinely think they have your account confused with someone else you know it is possible I and I bet you I never thought about it but not that

1:21:15you're saying that I mean I mean it could be that's where sending that debt validation letter would really help say hey this isn't even my debt this is my name I don't know I didn't get these services and so that's the part you can fight and I would but again it's been three years and so there you might be limited in your options because of the the age of this so worst case if you fought the good fight I would just try to settle if it really is your debt and if not keep fight yeah see that's connected to your social security number that's usually yeah that's a good call and pull your credit report and see what pulls up on there because if it's not your credit report you got to wonder you got to wonder is it really your debt listen to Maria's could have come in on the same night with similar last names and similar symptoms well it's funny as we just took a call from Maria now we've got Maria Maria was it your debt hey are you with us I think you're calling on me yeah yeah how are you doing hi I'm well thank you are you good

1:22:15what's your question today good um so I have a subtle debate question my husband and I are on baby steps too and we are debating whether or not to pay off um kind of like our fifth or loan amount debt um to free up a huge monthly payment oh tell us more how much would you be paying off if you jumped the line and paid off the fifth smallest debt what's the amount of the debt and what's the monthly amount it's 3,591 and the monthly payment is 4105 okay and what's the smallest debt right now how much is it total and what's the monthly payment it is 2000 total and there's no monthly payment because it was a friend from church that um went money to help pay for a car repair oh listen I don't want that paid first yes like aside from the rules for a second

1:23:17I would 100% pay the front that's a relationship tied to that right how much money do you guys have right now to pay if you threw money at debt um right there's minute we like it's it's about four to six thousand I was pregnant so we were like bankrolling and then several things went wrong we all three ended up in the hospital so we have money to throw at debt but we're waiting and we're kind of like holding my husband just started working again and um we're still waiting for the financial assistance application to be answered to find out like how much of it is are they going to end like charitable right at all yeah what you're like what they're going to do okay okay so let's imagine perfect world we'll call it good for a grand yeah want to make sure we have yeah so let's say you have five grand of throw at your debts if you did the debt snowball how many debts with that knockout so that would be one two it would get into three okay which is the two thousand dollars

1:24:28uh yeah so it'd be one for two thousand one for two thousand fourteen which is a credit card and then one for twenty eight hundred which is a pass you bill and also doesn't have a monthly minimum okay I still like the debt snowball option because you're going to be up against that one soon enough the thirty five ninety one if it was like twelve hundred dollars or something it might be worth it if you have the lump sum but I think either way if you map this out on paper you're probably going to get to the same destination in a similar amount of time yeah and and because this particular loan goes down by four seventy one oh five per month so we've been having this conversation for many many many months yeah and at this point it's gone from like ten grand or eight grand I mean I can tell you this I can tell you this Maria I would I do care about relationships when you owe people money and I do care about knocking those out fast I think there's worse things you could do than to pay the thirty five hundred first but I'm a person who I like following the rules I think

1:25:31when you set a standard to follow a process you will follow it welcome back to the Ramsey show in the Fairwinds Credit Union studio I'm George Campbell joined by Jade Warsha the sour taking your calls at triple eight eight two five five two two five Julie is an Indianapolis up next Julie welcome to the Ramsey show thank you for having me absolutely how can we help today I'm wondering if I should pursue public service loan forgiveness or if I should try to pay off my student loans hmm what are you doing for work I work at a university doing what kind of role I'm a pharmacist okay and what are you making uh one hundred fifteen thousand a year starting when my job starts next

1:26:34month okay and how much student loan debt do you have one hundred sixty four thousand okay um so the term on that is the this idea that if I if I follow the the payment structure that they put in place sometimes there's other things attached to it then after a while these loans can be forgiven the only problem that I have with this like I would love for everybody to have some form of you know pay out on something oh you didn't have to pay the debt that's great but the the problem with this is the success rate is so very low I mean we're talking one to one percent to five percent of people even have their loans forgiven that is just terrible I mean that is just a terrible success rate so what a horrible idea to pour a decade of time into something and never see it you know it

1:27:35never come to fruition when if you applied the full force of your income that's only going to go up from a hundred and fifteen thousand to paying off a hundred and sixty four thousand as a single person with no kids do you see what I'm saying I think that you could pay this off and more than half the time don't you of waiting around for the forgiveness yeah see I know do you know why the success rate is so low um there's a lot of reasons so a lot of it is paperwork being filed and completely um incompetent government is the headline yes incompetent government whoever's working and checking things behind the scenes there's just so much of it that you might not even be able to control here and so that's we're talking like three presidents from now and I don't know if you've seen even with this administration they're already starting to change the rules of what qualify what employers can and can't qualify and so because of that it just scares me for you to sign up for a 10-year clock

1:28:36make all of these payments minimum payments while interests accrues and then still possibly be on the hook while locking yourself into a certain job or certain type of employer when you could go make more in the private sector I mean what if you went to go work for a big private sector company making double yeah that would be really difficult given my job um I pretty much have to work at the university but uh I hear what you're saying so I right now I make fifty thousand a year like I said next month I'm transitioning jobs I'll be making one fifteen year how do I then allocate like what should my percentages be my income what should I be saving what should I be putting towards the phone well let me clarify something first are you working for the university because they're a qualified employer for the public service loan forgiveness no I work in academia I do research and stuff so I pretty much will always have to work for university because you're on the research side things just just double checking that okay so

1:29:37your question was how much will you have to put towards this to pay it off yeah okay well let's look at let's look at some real numbers to get this a fair timeline for you so where are you living right now like what are you what are you bringing home and what are you paying for rent um I pay eighteen hundred dollars in rent um and then that will be against the one hundred fifteen thousand dollar income okay and you haven't received the income right that's not till next month correct next month is when I start that income okay so let's pretend you'll be bringing it in around seventy two hundred a month I think that's a fair place to start taxes considered okay so eighteen hundred and rent what other expenses have you taken into account that maybe we should think about um I mean I have pets so obviously like uh food and stuff groceries but I don't have any um car payment I don't know other does uh yeah no other credit cards don't feel like that good

1:30:43I mean the napkin math is telling me you could probably knock this out in four and a half to five years yeah if you're bringing home seven and you can throw three at the dead every month which I think you can live on four that's very reasonable and so the key is this is all we're doing is we're focused on this debt and we're not you know investing going on vacation upgrading the cars this debt is going to be your singular focus for a couple of years but this short sacrificial time is going to free you up for the rest of your life so how old are you today you 26 love it can you imagine by thirty years old you're completely debt free making mid six figures that's the dream for most people and so what I don't want is for you to now be thirty six and go oh my gosh this whole thing fell apart and now I'm still on the hook now you're really frustrated so much regret I like to feel like I'm in control of my life and I'm not mad at people who got the public student loan forgiveness but the thing is it was also created for the person making thirty eight thousand dollars who is going to have a real hard time climbing out of

1:31:47it and so in your situation with as much as you make it's a very solvable problem for you to just knock this debt out making one fifteen plus okay thank you very much I appreciate the encouragement I feel feel better about this yeah and if you look at that timeline and you don't like it you still feel like it's too long that's another place where you can take matters into your own hands and say okay maybe I'm working overtime maybe I'm picking up side hustles maybe I'm getting a roommate all of these things that are going to add to your income and add to the amount that you can throw up this debt every single month the more the merrier I like this plan all right Laura's in New Orleans up next what's going on Laura hi how are y'all today doing great my question great my question is this I am just about sixty two years old I just do to my past not making the best financial decisions and being married at the time and no longer married I have about a hundred and

1:32:48ninety thousand in debt that I accrued and took over from my divorce and in retirement only have three hundred and twenty nine thousand okay what kind of debt so ninety I am some I had a SBA loan where I use that most of that was the pay-off debt that we had had from a marriage due to some real estate difficulties and so got it was able to get a loan to pay off some of that most of all that debt and at a lower interest rate so the other debt is my car I have a a five hundred and fifty five hundred and fifty dollar a month car note for a car I owe about twenty eight thousand on that um hey Laura hang on the line I'm going to kill you over into this next segment because I want to break this down with you and and give you some hope that you can

1:33:48still retire with dignity even at sixty two with a bunch of debt not enough in retirement let's walk you through a plan where you leave feeling confident so hang on the line we'll be right back to explore that situation you you work your butt off for your money but your money is never going to return the favor if all you do is hope for the best if you're ready to learn how to make your money work for you check out the smart vester program smart vester can help you find advisors who specialize in retirement planning

1:34:48charitable giving advanced investing strategies and more whatever your goals your pro will take the time to explain your options so you never have to invest in anything you don't understand head to ramsysolutions.com slash smart vester the get connected ramsysolutions is a paid nonclient promoter participating pros learn more at ramsysolutions.com slash smart vester all right we're going to be joined by Laura before the break we were talking to her she's sixty two has a hundred and ninety thousand dollars in debt she's got three hundred twenty nine thousand dollars in retirement let's see if we can help her out Laura are you still with us yes i am okay so you were breaking down your debts for us you got a car loan that's five fifty a month you have this sba loan any other debts in that one ninety uh i have a um a boat loan that

1:35:51is about forty thousand yes who's both of them with a person to win it's it's it's it's my boat and another friend of mine that we are trying to sell okay both at your name on it on the on the on the loan it's under no it's under my name okay just your name that's good do you have any money saved besides retirement not not not really not anything to speak of tell us the amount because it's something um it's probably five thousand okay great five thousand saved and what do you bring in every month for work from work um i make about thirty two thousand a month gross okay good great that helps the situation that's how the situation greatly now how much do you actually have left over if you if you went real serious and what i'm going to cut all my expenses i'm selling the car selling the boat how much could you realistically throw at this debt out of that thirty two grand obviously that's gross so you bring in home you know twenty two and then you've got a bunch of debt payments right yes so um i could probably that's probably about i'd say with all my expenses

1:36:58about ten thousand that uh with expenses okay so you got about twelve left over yes that you could throw with these debts that's great and then what's the car worth if you sold it and what's the loan on it uh i owe about twenty eight it's i've only had it probably a year and a half so it's probably would at least break even if not maybe sell the thirty okay and then the boat what is that worth the boat um i would probably it probably is about a hundred and twenty maybe hundred forty thousand and i owe ninety on it oh i thought you said forty is owed on the boat okay so you owe ninety but it's worth one forty that's a nice boat yes okay and you think you could get one forty because that could clear a whole lot and give you some profit back to knock out you could knock out the car and keep it if you wanted to right and then the sba loans the giant one right that just one big debt right and couldn't you throw ten or twelve thousand a month at that and knock

1:38:00that out and almost well that's what i'm trying to do less than two years because i really want to get rid of that um trying i have right now i've been putting about um fifty five hundred and two my retirement um and so i i don't know if i should put less into that and pay more to the debt yes i would i would i would stop those contributions altogether and put it all towards it at because if you can put if you said ten to twelve if you could bump that up to fifteen by really cutting back your lifestyle i mean gosh you could knock that out so quickly and then you could put that same amount into retirement right because it's the sba loan like seventy grand so it's well ninety five grand i thought i heard you say a hundred and ninety thousand did i get something wrong that well that's what the boat oh that's everything together okay great yeah okay so think about it this way if you just had the sba loan of ninety grand and you

1:39:01through fifteen at a month you'd be done in six months perfect so think about that you sell the boat you could profit you're telling me fifty grand which would knock out the car completely and still leave you with another twenty grand to throw the sba loan now we're down to seventy grand right correct so four and a half months you throw fifteen at that sba loan and four and a half months you're completely debt free if you pause retirement so what we're talking about is not pausing retirement forever we're talking four and a half months you pause retirement get to a place where you have some financial foundation no debt get yourself an emergency fund and then think about how much you could sock away in your investments you had no debt making thirty two grand a month okay so this is you're gonna be just fine because it's been okay and that's if we haven't only the three twenty nine in my retirement well if you turn around and if you do it George said and then you take the ten thousand that you were throwing at the debt even just ten thousand of it

1:40:01and you put that away every month if you put seventeen away every month into investments that's two hundred grand a year that's crazy that's just your contribution that's not even the compound growth over the next ten or twenty years so Laura I'm telling you if you get focused and you follow these baby steps knock out consumer debt that's it that's all you're doing get the emergency fund of three six months in place that's all you're doing then baby step four is fifteen percent of your income and if you don't have a mortgage if you're completely debt free then you can bump that up to twenty five thirty forty fifty percent of your income to catch back up on retirement so very solvable problem because of your amazing income get focused and call us back when you're debt free we'll celebrate with you Michael is up next and still water Oklahoma what's going on Michael I'll just work in a way I feel you how can we help today so a few months ago my wife and I decided to get a house built and so we just signed a contract a little over a month ago to start

1:41:02that process and they started on it and then so within a year of that they told us is when we'll have to get our traditional mortgage and we'll need to down payment at that time and then a few weeks ago she got diagnosed with cancer and they're going to have to amputate her right leg and she's not going to be able to work for six months give or take so that takes away a large majority of our income and I don't know how we're going to be as far as monthly bills my job should be able to hopefully sustain everything but I don't see how we're going to have money for a down payment now and then the other thing is I our house won't actually be complete either because in that loan I told them not to worry about drilling well for a water I was going to pay for it out of pocket and then not to worry about running electricity because I've got a friend who's

1:42:09an electrician and I was going to pay for that out of pocket and get a deal but now I don't know the well would have been about 10,000 electricity a couple thousand and then about 60,000 for the house down payment which we I don't see how we're going to be able to make that work now. Yeah how much debt are you currently in? About 50,000. Is that the construction loan? No, nope that is a sumer debt car and student loans and a tractor. Okay what are you in for the construction loan so far? The total cost at the end will be $304,000. That'll be the total cost okay and where are we at in this process? You said you're under contract is there a way you can negotiate a stop with the with the builder on this? I not that I'm aware of I talked to them a little bit and they basically pulled me

1:43:15to work. So they they gave me when we started the process they gave us a backup plan which is very possible I guess at this point and it is a the full loan mortgage at a 30 year mortgage at a 10% interest rate. Ouch. Oh gosh. Which just sounds absolutely terrible to me. So. And what was the down payment they needed from you? What I was going to do is go through another company for the mortgage we wanted to do like a 15 year mortgage. Okay. And now we're kind of out of options from what I can see I really don't want to spend you know a million dollars on this house after interest and stuff. Yeah I mean there's just there's a lot of dominoes here that are going to fall. So I would be trying to do anything I can to get out of this deal and even if that's going to cost you some it's

1:44:17still cheaper than what's on the other side of this. So I would be talking to maybe a real estate attorney to see what the heck did you sign? What will they be willing to negotiate if there's an amendment to the agreement to maybe even just pause this build or get out of it completely? Can you pay him 10 grand to call it good and you sell the lot? I don't know what all those details will be. Maybe you can pause if nothing really big has started yet. Maybe you can pause and sell the cell the plot and somebody else can pick up where you left off. I'm not sure. That's the best case scenario. Otherwise you're going to be working your tail off and I would be selling this car and tractor and getting out of as much debt as you can in the meantime because we don't know what the future holds but man we are rooting for you guys and praying for your wife. Hey guys Dave Ramsey here every day on this show we help people work through real money problems

1:45:19and figure out what to do next. Now you can get that same kind of help anytime with ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show whether you're making a decision or just want something explained ask Ramsey is here to help. It's fast, simple and free to use go to RamseySolutions.com and try ask Ramsey today that's RamseySolutions.com. In the lobby of Ramsey Solutions on the debt free stage we have Chad and Michelle. How are you guys? Great. We're doing great. How about you? Thanks for joining us you brought the debt free T-shirts to match. Love it in your Ramsey blue. That's fantastic how much debt did you guys pay off? 268,933 dollars. Wow. Nice. Love it and where you guys from? Bristol Vermont. Love it and what kind

1:46:24of debt was the 268? Credit cards, car loan, tractor loan, mortgage. I knew it was coming. I knew it. That's amazing. That's great. 268 and how long did that take you guys? Five years. Wow. That's impressive. And what was the range of income? It was 90 and we ended at about 140. Obviously paid off the consumer debt, student loans, tractor, all that. And then you just decided, we're just going to go right on through. Did you keep that same intensity? Well, we kept the same intensity for a while. What happened? It sounded like something changed. Go ahead. Well, the gazelle intensity started off pretty well. gazelle intensity. She was certainly going off the start of it. I was kind of more like a land down gazelle to start with. And then I finally got up and I was keeping up with her. Wow. So you were the reluctant spouse? I was. I was, I was, yeah,

1:47:29I'm the spender and she's the nerd and it took a while for me to get on board. But once I started going to the classes and seeing what the outcome would be, it's like, yeah, was that the turning point for you? Was going to financial peace university with her? That's correct. How did you, how did you convince Michelle to actually go to the class? Every spouse wants to know, how do I get this gazelle to get up off the grass? Well, I, I, this started in 2019. I had, I was doing our bills thinking I was like, had a budget in my brain. And I was like, I don't know how we're doing this. I mean, I just don't know how we're doing this. And our youngest was graduating that year and I was like, we have no money for her for college. Wow. And I was like, that's it. I gotta do something in, in 20, 19, we had done a school trip and we're actually going to Kentucky to run the Kentucky, Kentucky Derby marathon. And on the way there, I saw a billboard with financial peace on it. And I was like, hi, wonder what that is. And I didn't think anything about it. And then in December,

1:48:33I saw our local front porch forum had a advertisement for a financial peace class. And I was like, okay, this is a sign. So serendipitous. Yeah. So I took it and my oldest daughter was going to go with me and she kind of bailed on me. And so Chad fell guilty. Really. So the second week of class, I ended up going and then we went through the rest of them. And this was during COVID. So we had two in-person classes and then we were all remote. I remember that. I was hosting a class at that point and we started together and then we ended up going remote. That's so funny. Wow. Okay, so it was a slow start, but then things ramped up and it sounds like your income went up. What do you guys do for work? I'm a paralegal. I'm a mechanical assembler. Fantastic. So what happened to the income over those five years? Was it just natural promotions and raises? Yes. And I worked a lot. Wow, absolutely. Very, very cool. So the house is paid off. What's been the hardest part through this journey? Once you guys really understood what it's going to take to make it happen? You get focused,

1:49:33you get intense. What became the hardest part day in and day out? Patients. For me, stick into the budget and not getting the wants. Yes. So there's the needs. Got to have those. What were those sacrifices for you, Chad, that you were like, I can't spend money on this for the foreseeable future until we're out. You know, if for some reason I thought I need a new pair of running shoes, just can't go out and buy a pair of running shoes. Yes. Because if you budget for the next month or you make it do with what you have, there's one thing I didn't sacrifice. My beer budget was always in there every month. Beer budget remains intact. Don't mess with beer budget. That's correct. That's what's keeping Chad going right now. That's amazing. Okay, so what's the house worth? 5.30, around 5.30. Awesome. And how much do you guys have in your nest egg and retirement accounts? 1.4. Oh my gosh. I love it. Baby steps millionaires. That is what. So you got did a really good job investing your whole life, but you were also kind of collecting debt and being normal along the way.

1:50:33That was the smart thing we did was invested our retirement. Yeah, you don't get to 1.4 million accidentally. And you guys still have a long life to live, which means that money's going to double triple quadruple. Hoping so. Wow. So it'll at least double. Well, I mean, every seven years, if the stock market's about 10% average, every seven years it'll double. And you guys could live a good at least 30, 40 more years, right? Well, we're a lot older than you guys. The 48 as the crow flies. It's on the marathon running. Chad looks older. I will say that. He's got Jay Bramsey look to him. Thank you. I'll take that as a compliment. Well, he's younger. I robbed the cradle. Wow. Okay. So you guys are far past baby steps millionaires, but now you're doing things intentionally. Did you have any cheerleaders along the way? All right, our two daughters. We're our cheerleaders. Wow. And you brought them here with you. Did they learn along the way? Because I mean, they're older now. They saw mom and dad do this journey. They were older when we started. Well, did they think you guys were crazy or were they on board? I believe they probably

1:51:38think they think we're crazy. I believe so. I believe that's be true. They thought you were crazy before though. It sounds like nothing changed. Yes, but just more poor. We had to say no to them a lot. Well, yeah, because you said the college was the crux of this whole thing. So how did that end up tell us the end of the story? What'd you end up doing? Well, we actually sold the we had undo some of the stupid that we could. Yeah. So he had bought a piece of property, of course, on a home equity loan. Man. And so we sold that. Yeah. And that money helped pay for her for share college. Good. Worth it. Very much. You want to bring them on stage? Yes. And tell us their names and ages. Good. This one is Sydney and she is 25. Awesome. This one is Ariana and she is 30. Oh, wow. And a family tree change just like that. And so did their inheritance. That changed too. They didn't know that number until now. They're like, what? Mama, that's what I opened. Yeah. Well, the good news is you got a lot of time to enjoy it. And you know, the character traits

1:52:40are passed down now. Sacrifice, perseverance, patience. And Chad now gets to spend a little more on the beer budget. I would imagine that's still pretty tight. Okay. That's good. I love this so much. So what's next for you guys? You're in baby steps seven. The house is paid for what are you looking forward to in life? Well, traveling more. We've run marathons. So we I have four more states left. And so that's the next two years is to are you going to do one in every state? We've done. I've got four more. That's great. And that's the last four states. Idaho, Minnesota, Wyoming, Colorado, holy cow. That is amazing. Wow. So inspiring. You're only like 46 ahead of me. So I'm going to catch up one of these days. That's incredible. Oh my goodness. You guys are excellent. What do you tell people the key to becoming debt free is how do we become like Chad and Michelle? My theory is you need to stick to the budget. You make a budget every month and you stick to it. And it works because I to start with I was a non-believer, but I'm a believer now.

1:53:45I want to sing it so bad. I'm a believer. Oh, there it is. All right. How about you, Michelle? What was the key for you? I think the biggest the first step to me was admitting there was a problem. And then you know, then the budget working as a team and getting both of us on board. I mean, now if he wasn't on board, I would have tried to do it. Sure. But it made it so much easier. Yes. With him being a share grid. But you probably would have been very resentful along the way. He would have felt guilty. Oh my goodness. Yeah. Working together is a different story. I would had to double the beer budget. Oh, man. We use we have this no button. So we use the no button a lot. Hey, before us. What does it sound like? There's different ones, but they sound like they have seen this before. Yeah. Oh, is it actually Dave Ramsey? It just sounds like it. Not I'm sure that's how I think it is. That's fantastic. That's his side job. So I heard that a lot. I asked her question and she said she hit the button a lot. Well, you said no for five years and you get to say yes for the rest of your life because of the position you put yourselves in. We're

1:54:45so proud of you guys. All right. Here we go. It's Chad and Michelle and their daughters, Ariana and Sydney from Bristol, Vermont. They paid off $268,000. The credit cards, the car loan, the tractor, the house and everything. Five years making 90 to 140. Count it down. Let's hear a debt free scream. Three, two, one. We're down free. You're right. Michelle is jumping for joy. You would have thought she won the price is right. I mean, look at her. She's run Marathon's in 47 states. I wish I had those legs can jump. That's true. I wish I had a broyhill dinette set to give her as a prize, but instead they get to be on the debt free stage, which some say is even better. Hey guys, George Campbell here. You ever feel like you make good money and still have nothing to

1:55:55show for it? You run into Target for one thing and somehow walk out $87 later with toothpaste and emotional support candles. Just me. Okay. Well, that's the problem. Most people don't pay attention to how they spend their money. So it does whatever it wants. And that's why we created every dollar. It's a budgeting app that helps you create a simple plan for your money. Every dollar is simple. It's clear and it helps track where your money is actually going. Plus, you get daily lessons, to do's and reminders along the way. It's like having a money coach in your pocket. Your money has been freelancing long enough. It's time to give every dollar a full time job. Go download every dollar for free on the app store or Google Play. Our scripture of the day, 1 Corinthians 924. Do you not know that in a race all the runners run, but only one gets the prize? Run in such a way as to get the prize. Sarah Blakely said, don't be intimidated by what you don't know. That can be a great strength and ensure that you do

1:56:58things differently from everyone else. I love that. Hey, the 1 Corinthians made me think of something in that debt free screen talking about running. We talk about gazelle intensity all the time. I think we should take a minute and explain that because if you've been rocking with us for a while, you're like, oh, gazelle into like we've dropped phrases a lot. But that's one of those that if you're listening for the first time, you're like, what the heck were they talking about? What is this? Like a gazelle. So, you know, we talk about getting out of debt and doing it with intensity. And there are villains out there. There are predators out there. That's how we consider debt debt is the lion. It is the apex predator that is chasing after you. And gazelles are able to outrun a cheetah or a lion that can, you know, have a burst of speed, but a gazelle, if you can run fast enough for long enough, you can outrun them. And so being like a gazelle and running fast and intense for a long period of time will get you out of debt. So that's kind of the crux. I could never explain it the way Dave does with with his. Yeah. Well, I'll read you the original scripture

1:58:02Dave stole this from, you know, he plagiarizes a lot. So this is from proverb six. It says, my son, if you have put up security for your neighbor, if you've shaken hands and pledged for a stranger, aka debts, you have been trapped by what you said and snared by the words of your mouth. So do this, my son, to free yourself since you have fallen into your neighbor's hands. Go to the point of exhaustion and give your neighbor no rest, allow no sleep to your eyes, no slumber to your eyelids, free yourself like a gazelle from the hand of the hunter, like a bird from the snare of the fowler. There it is. poetic. Yes. That's intensity right. It is. It is. You got to go, you got to go heart and pain. No sleep to your eyes. No slumber. I like that. That's right. That's gazelle intensity, if you ever wondered. All right. L is in Detroit, Michigan. Up next. What's going on? L. Hey, George, hey, Jade, how are you guys doing? Good. Did I get a ride or is it L.E? Nope. You got to write. Boom. First try. Okay. How can we help today? So I'm trying to figure out what to do with the pile of money that I have. Hey, just lower the cost of living that I'm dealing with. Oh, wow. Okay. How much do you have?

1:59:07Well, I have like $100,000 in a safe in my house. Gangster. And I'm expecting like, yeah, it's stupid. I know. I'm expecting like 28,000 more in about six weeks. How you getting to where is this money coming from? Can you legally tell us? Can you really range it? Like, we are weird people. So like, we breed dogs and this is all for like four years. So I clean houses for living. I get a lot of tips. My husband buys and flips cars and like furniture. Okay. And so it's just like whatever cash we get. I mean, obviously we clean it. And then it's it's tips. I don't think you have to claim that. But it just sits in the house. So, but I'm thinking, I don't know, just with me with that, because you know, it's not doing anything. And then our monthly mortgage payment increase, DG taxes. And I'm pregnant with our first child. So I'm kind of, yeah, excited, but very, very scarce in the future. Why are you scared for the future? Do you guys

2:00:08have debt? Or is there something that's not secure about your life? No debt. No, the only debt that we have is the house and we owe 298,000 on the house. And we're both self-employed. So, like I said, I clean houses. My income is steady, but I plan to quit working once I have our child. And then my husband, he, he's a painter. And so it really adds and flows with the season. Okay. So, someone's telling me like two grants. So, someone's, he'll be able to bring in like 10 to 20,000, and I'm like a high season. So, but I think that's one of the reasons why I'm just really unsure because like you said, that lack of security and really knowing what's the mortgage payment every month? Well, it was 2450 and as of March, it's now 2995. Ooh, yeah, that did go up. What happened? I have no idea. You know, I think it's taxes, even though like we've only been living here for two years, and I know that they kind of read, they reassessed the value and up on the assessment. Okay. I was just

2:01:13making sure it wasn't anything else, but taxes and insurance that can do that. What do you bring in every month? You said his could be anywhere from two to 10 and on a good month 20. What's yours look like cleaning houses? So, like on paper, it's three grand, but sometimes like with tips, it's like four. Okay. So, the good news is you have like 128,000 dollars, it sounds like that's to your name. And we can do a lot with that. The bad news is I think that it might be worth it for you guys to figure out what an exit plan looks like for you to exit out of your income and into his in a way that makes it feel secure. I think that that's what the crux of this call is. Yeah, I agree. Can he find something? Can he find something to do in the slower seasons? I mean, he sounds like a real handy guy. Are there other things he can do where he could keep business up to be? Because really what you want, you got three grand in a mortgage, you want to be bringing home about $12,000 a month

2:02:15in order to make this all work and have some cushion to breathe, invest, safe, reach, college, all of that. So, I mean, yeah, it's one of those things where the things that he can do, it's unpredictable. You know, we just want to a car like three days ago, that was $2,000 we paid and it's worth like $7,000. So, I mean, it's like we can we can just we have close cars. Crazy. Wow. And you just sell them off. Yeah, I know. I'm like, if you knew how much money in Pokemon cars we have, that'd be. Oh my goodness. I like that you guys are resourceful. I like that you find ways to make money. I think that's very cool. I think that what would really help is to lower your monthly expenses a lot and to make sure that you have a fair amount of savings. So, six months of expenses, I would not do three months. I do six months for you guys. And I would treat your money like a real estate agent or somebody who has variable income like that. And I would always make sure I have an extra months worth sitting there so that I always know that I have enough to cover

2:03:19the bill. So, essentially, you're always one month ahead. I would recommend that for you. And honestly, if you guys have no debt, I'd probably keep I'm not exactly sure what six months would be for you. But let's pretend it is $28,000. So, you keep the $28,000 there and your emergency fund. You guys start the process of investing, baby step four. And maybe you take this 100,000 and you throw it on the mortgage. Maybe you recast the mortgage so that it's not such a big chunk of your life. I was thinking about doing that, but honestly, it's been burnt like every person that I called, whether it's the mortgage company or just some person I know who's a lender, I feel like I've been burned and everybody's just looking out for themselves. And, you know, there's ReFi and obviously there's like closing costs and you start your own. Not a few recast. Recast my cost a couple hundred bucks. So, you're not actually doing a refinance. They're just recalculating the payment based on the new balance and keeping all the other terms the same. And if you want to a trusted partner of ours reach out to Churchill mortgage and they can walk you through that and tell you if it makes sense for your situation. But I like that plan to give you guys some breathing

2:04:23room and cushion. But either way, we need to put this in an actual high yield savings account, not in a safe. So, inflation. Yeah, inflation is eating away at that money right now. Even if it's physically safe. I know. So, I would put it in a high yield savings. We have another partner, Fairwinds. You can go to fairwinds.org slash Ramsey. They have a smart bundle just for our fans with a great high yield savings account. And you can actually have up to 10 savings accounts in there. So, what I would do if in your shoes L is have a peaks and valleys fund with your variable income. So, on a great month, he makes 10 or 20. Let's park a bunch of that in that peaks and valleys fund so that if he has a two thousand dollar month, we can pull from that instead of our emergency fund. I see. Okay. That sounds like a good game plan for sure, especially with my income reduction coming up once I have the baby. Yes. That's going to give you a whole lot of piece instead of going, oh my gosh, our expenses are still the same, but he only made two grand this month. What are we going to do? Go flip some cars real quick. You need some simplicity in peace in your life as this baby enters the world. And so, I'm wishing you guys the best on that

2:05:26journey. Thank you so much, you guys. I really appreciate the clarity. I sometimes just need a straight path forward. Yeah, absolutely. That's what we're here for. That's one thing we got you. That's all I know how to do. Straight a clear plan. Straight path. I love it. That baby steps like that. Man, but the good news is there's a lot of good things happening here. You know, when you don't have a bunch of consumer debt, you have a pile of money, even if it's physically in a safe. That's a while. Usually you hear that from the, you know, the 78 year old man with 10 cans in his back yard rarely from a, you know, a young couple. Yeah. I mean, I would do it. But, you know, you get that distrust of the bank banking system and go, ah, but you got to spread it around. Yeah. You got to have a little here. It's a little bit. It's insured in the bank. Yeah. You know what I mean? If someone comes up a mill the night, takes that safe. You're out. But FDIC insurance and CUA insured. If you're with a credit union like Fairwinds, go check it out. Remember, there's ultimately only one way to financial peace, folks. That's to walk daily with the Prince of Peace, Christ Jesus.